The outcome

So much for that. As predicted and expected, Americans have not lost their minds, after all. The elections yielded a split government, libs in the House cons in the Senate. Trump is on a shorter leash. The 2020 presidential election has already started. Mitt Romney is back. Oprah’s energized. Women roared. The polarization continues. And markets are happy.

Investors crave certainty. This is certainty.

History shows us two important things, as referenced here yesterday: markets do okay with a gridlocked government (up 545 on the Dow today). And, second, the third year of a presidential cycle (this one is 2016-2020) is generally positive for equities. You can add another positive – if the Dems thwart Trump’s growth-at-all-costs agenda, it might placate the Fed and slow the pace of rate hikes. After all, it was fear of 4% bond yields (and the elections) that got everyone bent in October.

Without Congressional support, Trump can’t wave his hand and get more tax cuts. Or fund that ridiculous wall. Or dismantle health care. The president will also be forced to spend more time on personal defence, as an inquiry into his missing tax returns is likely plus a probe of how his family might be benefiting from the Oval Office. (Just look at what he did today to Jeff Sessions, in preparation.) In short, the next two years should be a tad less frenetic than the last two. More comfort for Mr. Market.

                   

Katelyn’s tale continues. Not good.

I told you days ago the aging Millennial’s DT Toronto condo had been for sale for weeks and weeks. As the market weakens, lots of showings, price reductions, no offer. Until the weekend. “It was not what I wanted, but okay,” she told me. “So I took it – only conditional on them getting the financing they wanted.”

Yesterday, the bad news. Turns out the buyers are a young couple from upstate New York relocating to Toronto where he’ll be a resident doctor at one of the giant hospitals on University Avenue. Lots of income, but no stomach for what Canadian politicians have done to the toll of housing.

The condo deal was for $750,000, but the Yanks were flabbergasted to learn of the 15% premium because they’re not yet permanent residents. That adds $112,500 in tax to the purchase price. Oh yeah, then there’s the double land transfer tax imposed by the city and province. Another $22,950. And now the condo costs…ta da… $885,450, of which $135,450 goes to government.

Sorry, no sale.

By the way, the foreign buyer tax is actually called the ‘Non-Resident Speculation Tax.’ Here is the description: “The NRST is a 15 per cent tax on the purchase or acquisition of an interest in residential property located in the Greater Golden Horseshoe Region (GGH) by individuals who are not citizens or permanent residents of Canada or by foreign corporations (foreign entities) and taxable trustees.” The buyers could possibly get a rebate, but only after paying it and working for an extended period of time. And the tax has zero to do with speculation.

Katelyn, as you might imagine, was ticked.  In colourful moister language she asked how the @%#&! any of this makes houses less expensive or helps a young person like her. I had no answer.

                  

Naturally, rising rates make everything more difficult. Sales slow. Buyers qualify for less debt. Prices come under pressure. There’s an inevitability to what’s happening, even as the bulk of the population stays oblivious, convinced they’re richer than they think.

This week TD rang the bell. For the last quarter century, its economists said, every time people renewed their mortgage, it was at a lower rate. Those days just ended. Home loan rates, on average, will rise by about 1% over the next year. Here’s why that’s a big deal: “About a quarter of fixed rate mortgages come due for renewal every year. So, in about four years’ time nearly all households with a fixed-rate mortgage will face a higher interest rate.”

More money for the mortgage means homeowners have less to spend on tats and Netflix, which is obviously a tragedy. Meanwhile higher rates bring lower real estate values, because of the inverse correlation between the two. But there’s more.

Now, says Ottawa, we have a HELOC emergency. “There is a pressing need for us to help Canadians realize that not using HELOCs responsibly can have serious repercussions on their financial well being,” says the Financial Consumer Agency of Canada – which confirms at least a quarter of people with lines of credit are making no payments against them.

It’s a red alert, since home equity lines are demand loans with fully-variable rates. Every time the Bank of Canada hikes, the cost goes up. So if folks can’t pay more than just the monthly interest now, they may well be in a state of true poochedness in a year or so. Of course, if real estate values fall (they secure the HELOC) then it gets worse. By the way, we now have almost $235 billion in outstanding HELOCs – up about 30% in eight years.

Do you smell new regulations coming that mandate  principal payments on outstanding balances? I do.

184 comments ↓

#1 The Wet One on 11.07.18 at 4:58 pm

First.

And what if you have money in the bank, stable jobs (so far as such things exist) and considerable free cash flow to re-direct to mortgage payments and/or investment.

But really, just first.

#2 mitzerboyakaQueencity kid on 11.07.18 at 5:02 pm

It’s nice to know that money still flows like old dogs children and watermelon wine

#3 Millmech on 11.07.18 at 5:07 pm

Ratehub has an article on the changes that have taken place at the banks on Helocs staring yesterday.

#4 eightlock90 on 11.07.18 at 5:08 pm

They are worried about second mortgages now?!? (heloc a neat little way to avoid calling them what they are)

Let it burn. Just let this mess end already. People who lost their minds and borrowed all that money can deal with the consequences of their poor decisions. Maybe next time they will learn.

#5 renter in Surrey on 11.07.18 at 5:08 pm

What sane person would move from NY to Toronto (from US to Canada in general)?
What for?
To buy concrete shoe-box for almost mil $ and have half of your income taken away by JT2 gang?

#6 Freedom First on 11.07.18 at 5:12 pm

If interest rates ever have anything to do with your financial well being, you need help.

Freedom First

#7 baloney Sandwitch on 11.07.18 at 5:12 pm

Monster rebound today – just as you predicted. If the S&P breaks through 2900 – the momentum trade would be on again.

#8 BG on 11.07.18 at 5:13 pm

“Katelyn, as you might imagine, was ticked. In colourful moister language she asked how the @%#&! any of this makes houses less expensive[…]. I had no answer.”

You don’t have an answer to this Garth? It seems obvious:
No local buyer is ready to buy at her price, she has to lower it. And this DOES make houses less expensive.

Without the Foreign buyer tax, someone who’s not even a permanent residency would have taken a higher price. Thus participating to make houses more expensive.

Where you trying to bash the foreign buyer tax? Because it seems like it did its job this time.

And I don’t care if the Doctor plans toe get his permanent residency. Fact is, he is not a resident.

No sale is no sale. Hard to see how that benefits the buyer, seller or the economy. – Garth

#9 funny on 11.07.18 at 5:18 pm

“In colourful moister language she asked how the @%#&! any of this makes”

…….. sense? Condo for $750K???? Yep no sense whatsoever. Only idiot would pay more than $200K for a CONDO.

If Yanks were willing to spend $750 on a CONDO they wouldn’t care about extra $130K or so. Nothing to do with financing – they realized any of this made sense!

#10 You know on 11.07.18 at 5:20 pm

Hey garthgantuan…what does this mean? they secure the HELOC

The HELOC is secured by real estate equity. – Garth

#11 EmmGee on 11.07.18 at 5:21 pm

Going to make some popcorn and read all the Trumpnuts explain why their red wave never happened and why Nate Silver was somehow still wrong even though he was right.

#12 Shawn Allen on 11.07.18 at 5:22 pm

Home Capital Up 24% Today after releasing earnings.

Again, remember my rule Number One:

“Always assume Buffett is correct.”

It’s no joke. It’s a way to have the odds in your favor.

#13 When Will They Raise Rates? on 11.07.18 at 5:23 pm

You can add another positive – if the Dems thwart Trump’s growth-at-all-costs agenda, it might placate the Fed and slow the pace of rate hikes.

Alternatively, in order to get anything passed, he’ll now have to agree to additional Dem spending… thus inducing the Fed to raise more quickly.

And I think you meant that beautiful wall.

#14 Brian Ripley on 11.07.18 at 5:25 pm

Well I guess we can relax about the red wave now.
Next up will be Mueller and the Attorney General.

So back to real estate. My chart of the biggest 6 Canadian cities SF detached prices is updated with the Oct data:
http://www.chpc.biz/6-canadian-metros.html

… and the plunge-o-meter is up as well. It’s all red with Toronto leading the way even though they put in some better M/M prices, higher total sales with few total listings.

FOMO is still on in some markets…. will that lead to more red ink?

#15 Bob on 11.07.18 at 5:27 pm

Well, now dear Katelyn will have to continue dropping her price until she finds a buyer. That’s how the tax makes houses cheaper.

#16 yvr_lurker on 11.07.18 at 5:30 pm

The american couple must have had an uniformed and, hence, incompetent real estate agent who did not warn them about the non-resident tax. By simply informing the couple of the tax and indicating to the couple where to read the Gov’t regulations online all of this is could be avoided. Don’t have much sympathy here for this lot. Wait for a little while; get your PR status as a doctor, and you are good to buy whatever you want. Regulations are in place to avoid selling out most units of new towers to the highest overseas bidder, who will hold the property as a monopoly board piece.

None of which applied here. Taxing real estate more does not make it affordable. – Garth

#17 MF on 11.07.18 at 5:31 pm

“Katelyn, as you might imagine, was ticked. In colourful moister language she asked how the @%#&! any of this makes houses less expensive or helps a young person like her. I had no answer.”

Umm, how about dropping the price???

MF

#18 dakkie on 11.07.18 at 5:32 pm

Australia Real Estate WORST DROP Since 1990! Prices Down 8.2% In Sydney!

http://www.investmentwatchblog.com/australia-real-estate-worst-drop-since-1990-prices-down-8-2-in-sydney/

#19 Guy in Calgary on 11.07.18 at 5:33 pm

Mandated principal only payments on HELOC’s wouldn’t be that bad. Most would likely just lock in their HELOC’s and push the amortization as far as it can go. Generally HELOC conversions do not require a stress test or prequalifying (since they already qualified for the HELOC) and cost nothing. You also get the benefit of locking in a lower rate then prime + x. Sign one form and you are done.

Realistically this is something people should already be considering while rates remain reasonably low. But alas, people want “flexibility”… call that what you will.

If people can’t afford interest-only payments, imagine the mess when they’re required to go P+I. – Garth

#20 HowDeepThePain? on 11.07.18 at 5:33 pm

Based on Realtor.ca

Homes for sale in the Greater Toronto Horseshoe
7,500 over $1 Million
4,000 over $1.5 Million
1,500 over $2.5 Million

That’s current, how many are planning on being listed? How many dropped their list in the last six months?

Credit is tightening! Sure people will spend every available credit dollar on your home…but if they can’t, they can’t.

Good Luck Sellers!

#21 yorkville renter on 11.07.18 at 5:34 pm

all 3 topics on the blog are damn interesting!

1) Trump still sucks and blows Let’s not all pile on SM – others were certain in their certainty

2) Sucks to sell a cookie cutter condo when you want out, but there’s tons of growth in pricing, so if she REALLY needs to sell, she could via price reduction

3) mandating principal payback would be a finances KILLER… I’m sure many are simply treading water, hoping for a raise or a drop in their expenses… I wonder though – will people simply extend the amortization upon renewal to make it all work? does anything prevent that?

#22 Bob on 11.07.18 at 5:34 pm

No sale is no sale. Hard to see how that benefits the buyer, seller or the economy. – Garth

Total red herring. The point of the tax isn’t to benefit any of those three. The point is to benefit all those would-be buyers who can’t get in because prices are so damn high.

And it isn’t. You have bought into a failed plan. – Garth

#23 Milos Rako on 11.07.18 at 5:36 pm

“Women roared”

https://toronto.citynews.ca/video/2018/11/07/trudeau-praises-record-number-of-women-elected-in-u-s-midterms/

Only about eleven more months until Canada has its Blue wave (of kicking out them fib-erals and tru-dolt).

#24 Ex-Cowtown on 11.07.18 at 5:37 pm

New HELOC regs will be brutal. So much for parents digging into the equity of the family home to help the porch monkeys buy a new a new shack.

As to Trump; I was half right; I called for the Republicans to pick up seats in the Senate and the House. Only the Senate came through.

Interesting how a lot of the the radical-left Dems got left at the altar. There may be hope for the moderate Dems yet. My next prediction is that Trump will pivot to the left and suck the wind out of the Dems sails. That’s the advantage of not being a politician; ideology is meaningless.

#25 Milos Rako on 11.07.18 at 5:38 pm

Welcome back freedom first hopefully it’s really you and not an impostor.

#26 Strange on 11.07.18 at 5:38 pm

American elections are strange:

They almost elected a known pedophile.

They fully elected a dead pimp in Nevada.
https://www.apnews.com/afd73fee87e5442ca72b7179c593089e

#27 The Real Mark on 11.07.18 at 5:43 pm

If interest rates on mortgages go up will my mom have to charge me more rent?

#28 Penny Henny on 11.07.18 at 5:44 pm

Balanced and diversified nudged back into the positive today

#29 Good Tax that Doctor! on 11.07.18 at 5:49 pm

Are own Canadian trained doctors have trouble securing residency, sorry, but I like the Foriegner Tax and I like that Kaitlin’s deal fell through (or whatever the heck her name was). The greedy boomers can’t find anyone to fund their retirements by asking ridiculous prices for their McMansions and the entitled Millennials can’t find anyone to buy their ridiculously overpriced shoe boxes in the sky. And tonight everything feels right in the universe. Maybe it’s time for the Gen Xers to feel joy!

Power to the the cohort that watched Reality Bites!

Man I feel alive again!

Ya baby!

#30 The Real Mark on 11.07.18 at 5:52 pm

To Stan Brooks;
if there is so much inflation then why is my air mattress flat every morning?

#31 Shawn Allen on 11.07.18 at 5:53 pm

Principal payments on HELOCs?

Well, for many people, that would be a non-event. As long as the HELOC is not yet maxed out, new money can be borrowed from the same HELOC to make those payments.

But yes, for some people who a e already close to the cliff, with HELOC maxed, this would push them over. But perhaps not until they max out all their credit cards as well.

There must be some seriously ugly bankruptcies going on where people with pristine credit ratings have used new debt to make all payments on time for years but have hit the wall. I don’t hear that much about it.

#32 Terry on 11.07.18 at 5:53 pm

“In short, the next two years should be a tad less frenetic than the last two. More comfort for Mr. Market.”

I would agree that the past 2 years were quite frenetic Garth and I am a bit disappointed with the outcome of the midterm elections since I did believe in what Trump was doing but………it is what it is and it will be different going forward. A lame duck Presidency is what we will be getting over the next 2 years and as much as I love following politics my #2 passion in life is making money! Gridlock in Washington with the two sides fighting among themselves for the next 2 years will be a welcome distraction for Mr. Market to catch up and start showing me the money again!

KA CHING! Happy to be invested!

#33 unbalanced on 11.07.18 at 6:00 pm

Manitoba here. Some people on here knock the Credit Unions. My LoC states, 2% mininum payment on outstanding balances. Whats so hard about that? CU’s want you to have some skin in the game too. Blah, blah blah.

#34 Shawn Allen on 11.07.18 at 6:01 pm

Credit Card Job Interruption Insurance

Canadian Tire quite deservedly got bad publicity this week about charging a self-employed guy for job interruption insurance that he could never qualify to use.

Also they seemed to get bad publicity for going after his wife to collect $18,000 outstanding. Wait, is that not a thing anymore? Are we or are we not legally responsible for our spouse’s credit card debts?

The story said the man had dutifully paid for that insurance for many years. Actually it seems he just paid the minimum required and ran up a huge balance. He never really paid for that insurance at all. And quite possibly was never going to be in a position to pay off that huge balance, but that is unclear.

#35 Wrk.dover on 11.07.18 at 6:08 pm

I wonder if Tony looks the same from both ends…

#36 STM on 11.07.18 at 6:09 pm

“No sale is no sale. Hard to see how that benefits the buyer, seller or the economy. – Garth”

No sale! I guess her condo will sit on the market until the end of time, and nobody here will ever want it and she’ll never lower the price because that defies the laws of nature or something

#37 Corrective Rates on 11.07.18 at 6:09 pm

‘You can add another positive – if the Dems thwart Trump’s growth-at-all-costs agenda, it might placate the Fed and slow the pace of rate hikes.’ – Garth

If cheap debt was the primary driver of the housing crisis, and there is an inverse relationship between house prices and rates, won’t the US election now slow down the correction taking place based on your above statement?

Won’t the path to rate normalization in the US, and a neutral rate in Canada as articulated by Poloz recenty, be put on hold or a much slower path at least?

If so, it means the era of cheap credit is not over, and a slowing of rate hikes gives more confidence to current buyers. Ostensibly, we are now looking at sideway prices for years with drip rate interest increases. The media pressure announcing the ‘negative impacts of rate increases’ will die down, lulling buyers back into the ‘best investment possible.’

If that is the case, it seems a lot of renters and sideliners should have been cheering for a red wave if they wanted the correction to continue, and for it to pick up pace to the point where homes are affordable…

#38 I like it on 11.07.18 at 6:10 pm

Whiskey tastes great

#39 Ronaldo on 11.07.18 at 6:16 pm

Yep, was definitely a ‘sleeper’. Was interesting to watch the talking heads on CNN get all giggly about the outcome. Like they won the lottery. The balanced portfolio is doing just fine though. Prepare for a nice end of year rally.

#40 Game of Musical Chairs on 11.07.18 at 6:18 pm

The music has stopped. The buffet is over. Go back to the bar. They are calling you over. Your credit card was declined. You hand them another, another and another – they are all declined. Sure sucks to be a millenial in Canada with big dreams, a huge ego, massive mortgage and other debts climbing higher and higher by the hour with no more credit whatsoever available to you. By hey – doesn’t the stainless and granite look great in the kitchen ?

#41 J on 11.07.18 at 6:21 pm

No sale is no sale. Hard to see how that benefits the buyer, seller or the economy. – Garth

Total red herring. The point of the tax isn’t to benefit any of those three. The point is to benefit all those would-be buyers who can’t get in because prices are so damn high.

And it isn’t. You have bought into a failed plan. – Garth

But it will. Lower sales = eventually lower prices, as you have stated many times. It obviously doesn’t benefit the seller in this case, but her having to eventually drop her price in order to sell will help prospective buyers who can’t afford today’s inflated prices.

#42 Azashi on 11.07.18 at 6:23 pm

I feel like Garth goes out of his way to “not understand” how a speculation tax helps. So let me help him out.

Let’s use the example above – 15% foreigner tax on $750,000. By making foreigners pay 15% extra on $750,000, you’re accomplishing two things:

1. If they’re innocent foreigners, not speculating, they’re less likely to compete against Canadian bidders because their total costs are going to be higher.

2. If they’re foreign speculators, that means that they’re looking to play the housing market like it’s a stock market. Now imagine you had to buy a stock and *guarantee* to yourself that it will go up 15% before you can even make a single red cent. And because this reduces speculator motivation, and they all realize it, they’ll stop gambling on homes and driving the price up for no reason other than to see who’s got the balls to ride the rollercoaster to its highest and selling RIGHT before it crashes. That’s TWO motivators dealt with in a single point.

3. If they’re simply Chinese and looking to get their money safely away from China, then, again, with a 15% foreigner tax, Toronto is SO much less attractive than anywhere else.

But naturally, tomorrow Garth will once again be unable to understand how a foreigner tax reduces home prices. It will be utterly mystifying. Likely because he won’t approve this post.

No speculators. No Chinese. Just people who think being penalized for nothing is discriminatory. You are totally out of touch with the market. Like the politicians you relish. – Garth

#43 HT on 11.07.18 at 6:26 pm

“No sale is no sale. Hard to see how that benefits the buyer, seller or the economy. – Garth”

No sale! I guess her condo will sit on the market until the end of time, and nobody here will ever want it and she’ll never lower the price because that defies the laws of nature or something
——————————–

Ha! Perhaps, Garth, you can explain your position here a little. Otherwise it sounds to me like rhetoric. I have no sympathy for the Americans wanting to buy a piece of our land at local prices, no sympathy for the sellers who are marketing to those foreigners (based on price), and no desire to keep “an economy” that doesn’t work for the people who are a part of it. They will lower the price, which will benefit the eventual buyer. There indeed is pain in the transition, as there always is. You provide no evidence or insight as to why BC and GTA taxes aren’t solutions. Would be appreciated, as always!

HT

#44 Darryl on 11.07.18 at 6:27 pm

The HELOC is secured by real estate equity. – Garth
#11 EmmGee on 11.07.18 at 5:21 pm
Going to make some popcorn and read all the Trumpnuts explain why their red wave never happened and why Nate Silver was somehow still wrong even though he was right.
———————————————————-
They’re actually trying to explain that it did happen .
Trumpnuts don’t fall far from the tree.

#45 RyYYZ on 11.07.18 at 6:32 pm

Love today’s blog dog picture, Garth! So cute…

#46 EddieEagle on 11.07.18 at 6:32 pm

The American public will be so sick of @NancyPelosi by 2020, Trump will sweep and Congress will go red.

#47 Darryl on 11.07.18 at 6:33 pm

#25 The Real Mark on 11.07.18 at 5:43 pm
If interest rates on mortgages go up will my mom have to charge me more rent?
————————————————————-
LOL !
To the fake real Mark … Good one . That was funny.

#48 espressobob on 11.07.18 at 6:33 pm

Well, for those dumping equity positions last month?

” Oh the pain, the pain” — Jonathan Harris in character.

#49 Darryl on 11.07.18 at 6:38 pm

#33 Wrk.dover on 11.07.18 at 6:08 pm
I wonder if Tony looks the same from both ends…
—————————————————————-
If you look through his right ear you can see the left side of the room

#50 ALFRED E. NEUMAN on 11.07.18 at 6:44 pm

“In short, the next two years should be a tad less frenetic than the last two.”

I’m not so certain of that, Garth. I worry (what? me?) that tRump is just warming up. Just watch.

‘Cause with a Democrat-laden House to now blame for stalling his destiny, he will orchestrate the venom to escalate and the country to polarize even wider.

Its not personal, .. its just that tRump loves the smell of napalm in the morning.

I hope I am wrong, but think we best buckle up, folks.

#51 earthboundmisfit on 11.07.18 at 6:46 pm

Prediction: The next two years are going to be long, ugly and deranged.

#52 renter in Surrey on 11.07.18 at 6:49 pm

No sale is no sale. Hard to see how that benefits the buyer, seller or the economy. – Garth
——————————————————————————
I am confused.

I thought reduced volume of RE sales should lead to price reductions, no?

#53 Linda on 11.07.18 at 6:51 pm

Over $800K for a condo? Good golly, Miss Molly! I hesitate to inquire as to this condos size for fear I might have a spasm. Too bad for the seller but that is where reality bites. On paper, she would be considered ‘rich’ but in fact she has an asset that she is trying to convert into cash, how much she will actually receive potentially eroding by the day. Even worse, she may end up losing money on the sale – no profit, just (one trusts) an end to the losses.

On the plus side for those who are ‘in’ the market, looks like good times will continue for the balanced portfolio. Even if the pace of interest rate increases slows, those with debt should still take steps to lock in at lower rates & put their financial houses in order as soon as possible.

#54 Randy on 11.07.18 at 6:54 pm

Some Twitter wisdom

Fact @Fact
The word “mortgage” comes from a French word that means “death contract.”

#55 Musty Basement Dweller on 11.07.18 at 6:57 pm

Wow it turns out there a lot of empty homes in Vancouver –$30 Million worth of taxes annually, not bad.. Do we still think this is mostly our average Vancouver citizens that own these? (Not those mythical foreign investors)

https://www.castanet.net/news/BC/241344/Empty-homes-30M-in-tax

#56 Tim on 11.07.18 at 6:57 pm

What crappy condo is worth three quarters of a million in Canada? COme on, things are way out of line, so bring on the taxes for non locals!

#57 Slim on 11.07.18 at 7:05 pm

Sounds like Trump was in a cranky mood today…I feel sorry for the First Lady.

#58 Ace Goodheart on 11.07.18 at 7:05 pm

One thing that’s gonna push down prices is all these folks panic selling their investment homes in the GTA.

This is getting ridiculous. I mean, so it’s a higher interest rate. So what? Did you think you’d pay 2% forever? People bail too quickly.

Oh well. I was almost out of the bricks and mortar business, having fixed one too many clogged toilets and been called to one too many plumbing emergencies. I was growing to hate mice and cockroaches.

Now I have a neighbouring property that I know is in some financial distress, being offered to me for a song and a dance, by a seriously frantic person who is about to lose his house due to HELOCing it to buy this dump he now wants to dump on me.

What to do? Figure out the lowest possible amount he could get, and still manage to keep his house, and offer him that? No one is buying up here anyway, especially not rental buildings.

#59 Bob Dog on 11.07.18 at 7:08 pm

Debtor prisons are a very persuasive tool for preventing excessive borrowing.

#60 Cristian on 11.07.18 at 7:09 pm

“In colourful moister language she asked how the @%#&! any of this makes houses less expensive or helps a young person like her. I had no answer.”

But it’s so easy. She should simply lower the asking price for her condo, et voila! houses are less expensive!

#61 crowdedelevatorfartz on 11.07.18 at 7:12 pm

@#11 M G

yep.

538.com and Mr Silver was bang on in his forecast.

And MAGA crowd after all “red wave chest pounding” was said and done?

Crickets

#62 Smoking Man on 11.07.18 at 7:12 pm

Sessions broomed. New top cop at dept of Justice. Mueller and the on the ropes. Bad cops running for the hills.

Major math error in the climate change hysteria put out by IPPC.

https://dailycaller.com/2018/11/07/global-warming-study-oceans-error/

T2 Cash grab is based on bull shit.

#63 ShawnG in TO on 11.07.18 at 7:13 pm

surely Garth you have heard about the HELOC tightening rules? OSFI is mandating that when you apply for a new mortgage your debt payment is not calculated on your HELOC balance but on your HELOC limit.

fun keeps on coming

#64 Musty Basement Dweller on 11.07.18 at 7:13 pm

“Katelyn, as you might imagine, was ticked. In colourful moister language she asked how the @%#&! any of this makes houses less expensive or helps a young person like her. I had no answer”
Garth I can answer this question. In fact isn’t it sadly and completely answered within this story of Katelyn s sad misfortune? Things are getting less expensive as we speak due to several market conditions and government initiatives. Unfortunately Katelyn gave in to the hype instead of being patient and bought way too early.

#65 Remembrancer on 11.07.18 at 7:15 pm

#39 J on 11.07.18 at 6:21 pm

Well come on, lets run this whole macroeconomic morality play all the way – so the doctor goes to do doctoring somewhere else where they can actually get a place to live is a good thing you think?

Serious question, what is the desired state you’d want to see and how would that benefit society as a whole?

#66 crowdedelevatorfartz on 11.07.18 at 7:16 pm

Gee another week, another apology from Trudeau……must be an election looming.

#67 Bob Dog on 11.07.18 at 7:16 pm

As Americans they get an instant 30% discount on the Canadian Peso. So what if they have to give 15% back. They are at a huge 15% advantage compared to the suckers and losers who were born here, paid taxes all their lives and built a country over several generations, only to watch as it is sold out from under them to overseas speculators and a tsunami of migrants.

#68 Shawn Allen on 11.07.18 at 7:17 pm

Government Confiscation of Real Estate wealth

I read years ago that government can effectively take away your real estate wealth by:
1: Imposing (unreasonably) high property taxes
and
2: For commercial real estate by imposing rent controls.

I guess that was just the condensed version to which we can add things like:

Imposing large property transfer taxes

Blocking or taxing foreign buyers

Causing banks to charge higher interest rates.

Imposing vacant house taxes

Oh well, on the other hand for years governments generated real estate wealth by:

Restricting new supply

Making new building lot supply more expensive in various and sundry ways

Providing mortgage insurance

Artificially lowering interest rates

Forgiving capital gains taxes on personal residences

Allowing RRSP home buyer plans

Lowering down payment requirements

I guess the latest downward efforts come under the title of “that’s the risks we take”

Every such action benefits some people and harms others. Such is life.

#69 FOUR FINGERS WATSON on 11.07.18 at 7:18 pm

Lots of top notch entertainment to look forward to now. Investigations, impeachment hearings, and Donald Trump and Maxine Waters wrestling in a sack…..Chill out and enjoy the laughs.

#70 SaraJ on 11.07.18 at 7:18 pm

Adding full amount of HELOC, not just used balance, to calculate ones TDS might be the final pin that bursts Canadian RE bubble. Clearly OSFI is trying hard to burst it.

#71 Ace Goodheart on 11.07.18 at 7:19 pm

RE: “I told you days ago the aging Millennial’s DT Toronto condo had been for sale for weeks and weeks. As the market weakens, lots of showings, price reductions, no offer. ”

Re sale condos are like used cars. Hard to sell, and you always get way, way less than when it was new.

A condo depreciates about 10-15% as soon as you crack open the brand new, fresh smelling door for the first time, and walk on those fake hardwood floors that only contractors’ shoes have ever tread over.

A used condo is like that 2 year old car you looked at in the lot but decided against. It is likely full of hidden problems, will cost more to maintain, it has probably not been taken care of by the previous owner, there will be lots of “special expenses” for this that or the next thing, it isn’t as cool or fun as the newest model and lacks all of the most up to date interesting features, and gosh darn it, that new car smell…..

The older condos get, the less they are worth. Special assessments for fixing salt damaged parking garages, weathered windows and cladding, replacing HVAC systems and upgrading elevators and fire systems, drive down the prices. Condo corps routinely get mired in law suits, resulting in increases in condo fees to pay for legal expenses. The older the building, the more problems it will have and the less the units will be worth.

Welcome to condo life.

#72 Ex-Cowtown on 11.07.18 at 7:22 pm

#29 Shawn Allen on 11.07.18 at 5:53 pm
Principal payments on HELOCs?

Well, for many people, that would be a non-event. As long as the HELOC is not yet maxed out, new money can be borrowed from the same HELOC to make those payments.
+++++++++++++++++++++++++++++++++++

Ahh yes; a classic Ponzi scheme. But if you do it to yourself it’s not a crime.

#73 The Totally Unbiased, Highly Intelligent, Rational Observer on 11.07.18 at 7:25 pm

DELETED

#74 Musty Basement Dweller on 11.07.18 at 7:25 pm

As a verifiable Musty Basement Dweller living in the bowels of damp East Vancouver (as well as a proud “steerage section resident of this blog) I wanted to shout out some advice to any of my moldy compatriots out there. Get a dehumidifier! I just purchased the first one in my life and I have no idea why I never tried it before. They work really really well and you can save a lot of rent money by going the musty suite route. Automatic conversion to a dry comfortable space to wait out and observe this comical real estate bubble.. Have a great day.

#75 islander on 11.07.18 at 7:26 pm

TD bank and Financial Consumer Agency of Canada pair up to warn borrowers!

First a funny TD wake up call – then the sober warning.

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

https://www.canada.ca/en/financial-consumer-agency/campaigns/financial-literacy-month/promotional-material/week-2.html

“It isn’t always easy to live within your means, and debt can accumulate quickly. Having a plan to pay off debt will go a long way to reducing your financial stress. Spending more than you earn makes you less resilient to economic surprises. A heavy debt load makes you more vulnerable if your financial situation changes or if you need to pay for unexpected expenses.”

#76 AK on 11.07.18 at 7:30 pm

” Or fund that ridiculous wall.”
=====================================
This is nothing new. Democrats supported a border wall back in 2006..

#77 -=jwk=- on 11.07.18 at 7:34 pm

If she listed at 650k, it would have sold the next day. Get the hint lady, it ain’t worth 750k to anyone except you. Assume you bought it 4-5 years ago for 300, why not just take the huge non-taxable profit and be happy? If you want to sell it, sell it, simple.

The tax+stress test is FINALLY working.

#78 Millmech on 11.07.18 at 7:37 pm

Article is on RateSpy, not Ratehub,my bad

#79 Felix on 11.07.18 at 7:41 pm

The feline in today’s pic has positioned herself as close as possible to the dog’s head, desperately trying to detect even a smidgen of brain activity in that animal.

Alas, there is none. It’s just a dog. Hence the smirk :)

#80 Victor V on 11.07.18 at 7:49 pm

Conrad Black: An electoral draw, but as always, astonishing theatre

https://nationalpost.com/opinion/conrad-black-an-electoral-draw-but-as-always-astonishing-theatre

The American political system ineluctably addresses great problems when they have to be addressed and elevates leaders from improbable provenances when it needs them. It is not impossible that the next two years will be a productive time. Continuation of the attempt to destroy Trump by Clintonian dirty tricks and tuning up the Orwellian media hate campaign would lead the Democrats to complete disaster in two years. However appalled Canadians may be by the vulgarity, corruption, hucksterism, maudlin posturing and outright demagogy of the American political system, the national American genius of the spectacle, and of attracting the rapt attention of the world to their astonishing orgies of political theatre, has been demonstrated once again.

#81 islander on 11.07.18 at 7:50 pm

Regarding ‘foreign’ ownership:

https://www.icc-ccs.org/talkfraud/to-canada-from-transparency-international-unmask-anonymous-owners-of-companies-trusts-lincoln

http://www.transparencycanada.ca/who-we-are/our-organization/our-board/

“Using specific case studies and original research into the luxury real estate property sector in Vancouver, TI Canada’s report demonstrates how little is known about who truly owns Canadians companies, trusts, and the assets they control.
In 2016, the Financial Action Task Force – the global anti-money laundering authority– published an evaluation of Canada that was highly critical of the secrecy it affords corporate owners”.

#82 Fish on 11.07.18 at 7:51 pm

PIC Of course I would for you , thoughtful

“Do you smell new regulations coming that mandate principal payments on outstanding balances? I do

*****

I’m sure it would be very shocking to some folks
may in December or will we see that for the new year?

#83 For those about to flop... on 11.07.18 at 7:54 pm

Pink Pumpkins being carved in North Vancouver.

Flopperite Mike wanted me to run this one that he found in North Van and since I’m trying to help another person out in that neck of the woods it seems like a good one to get the evening rolling.

Picked up for 1.48 in March 2016 it is now on the market for 1.37

Another one that realizes that they’ve been had, and aren’t even asking close to what they paid.

These guys will be lucky if they can get someone up a little and just take a 100k hit after expenses.

Maybe this time last year they could have broken even and settled on a close shave.

These guys are probably gonna need some toilet paper on their face to stop the bleeding.

Gillette, the best a man can get…

M44BC

1210 Shavington St,North Vancouver paid 1.48 ass 1.34

Now asking 1.37

https://www.zolo.ca/north-vancouver-real-estate/1210-shavington-street

P.S,A.B,I believe the address you are looking for is 935 Highland Drive.

#84 Al on 11.07.18 at 7:55 pm

“..asked how the @%#&! any of this makes houses less expensive or helps a young person like her. I had no answer.”

You both know the answer. It just happened. The no sale to that lonely buyer might make her accept a lower price in the future. The condo is now less expensive for residents. It doesnt help the seller, young or old, unless the seller is buying into the same depressed market however that was never the intent. The merit of the last can be debated, the former is inevitable given the current conditions.

Telling sellers who can be buyers is not the role of government. Hard to believe the number of people here so willing to rig the market with so flawed a concept. Prices will find their own level. There was zero speculation in this example. Owning real estate is not a right and shame on politicians who delude you into thinking so. – Garth

#85 WUL on 11.07.18 at 7:59 pm

Katelyn should thank her lucky stars that she lives in Hogtown with a pro hockey team filled with hockey players that can dangle like Marner. She could own a condo in Fort Mac and face financial ruination.

https://www.cbc.ca/news/canada/edmonton/fort-mcmurray-condo-hillview-park-lawsuit-1.4885927

Oh and, I’m with Felix.

I’ve shared my fires with dozens of dogs. Loved them all. Three months ago there were no pets in my house. Now there are two cats. Far superior to mutts.

Yours,

Cat Lady (Sorta) WUL

#86 Tulips on 11.07.18 at 7:59 pm

No sale is no sale. Hard to see how that benefits the buyer, seller or the economy. – Garth
—————————————————

I agree it’s definitely bad for the seller, and bad for the economy. But isn’t this good for the buyer? I’m seeing a steady increase in listings, decrease in sales, and a resulting growing divide in Sale to List price (now at 95%) in my Fraser Valley market. That’s after list prices have been creeping lower too. Thanks to rising interest rates, if I bought today my monthlies would be no less than if I had bought 18 months ago. But total debt would be less. My anticipated monthlies upon first renewal are what I’m using to decide when I can afford to buy.

Housing hasn’t been affordable for a long time, and isn’t yet. But a real change recently is that people are now aware that they cannot afford it, whereas in recent years they were fooled into thinking they could afford what they really could not afford for the long term. This is good for me as a perspective buyer. No more competing against reckless self destructing over-bidders. Prices are slipping, and will continue to be coming down while people don’t buy. And then we return to a more sustainable affordability. It may come after a couple years of excessive seller hurt and resulting economic hurt. But that’s just offsetting the past couple years of excessive seller gain and resulting economic boost.

#87 45north on 11.07.18 at 8:07 pm

Turns out the buyers are a young couple from upstate New York relocating to Toronto where he’ll be a resident doctor at one of the giant hospitals on University Avenue.

an example of the unintended consequence of the non-resident speculation tax

The non-resident speculation tax is a provincial tax . I suppose passed by Kathleen Wynne and her Liberal Government. What a bunch of dummies.

#88 Dave on 11.07.18 at 8:07 pm

Is there any way of knowing how many people are using their HELOC to invest in the market (ie the Smith Maneuver) as opposed to renovations/buying a boat/dumb shit? I would imagine those investing, if they are doing a balanced and diversified portfolio, would be better equipped to pay back the principal if the loan is called. This would make the risk from all these HELOCs much lower, no?

That is not the Smith Manouvre. – Garth

#89 45north on 11.07.18 at 8:09 pm

For the last quarter century, its economists said, every time people renewed their mortgage, it was at a lower rate. Those days just ended. Home loan rates, on average, will rise by about 1% over the next year.

this is not going to end well.

Here’s Danielle Park:

The US housing bubble that peaked last cycle in 2006 was epic and financially devastating for the masses, the highly levered financial system, the economy and government budgets in the 12 years since and counting.

in response to the US housing bubble, the US Fed lowered interest rates from 5% to 0%. In Canada, as the housing market rolls over, interest rates are rising. In other words, the blow in Canada will be harder, not softer. Another thing, in the US, the banks were surprised, in Canada they’re not. They’re ready. One more thing, the BC and Ontario provincial governments were totally sucked in by the idea of a rising housing market. That’s why they created the non-resident speculation tax. Boy were they wrong.

#90 Newcomer on 11.07.18 at 8:19 pm

she asked how the @%#&! any of this makes houses less expensive or helps a young person like her.

—-

That’s an easy one. She can’t sell to the American doctor, so she has to keep dropping the price until local resident can buy. There you go, cheaper house. As for helping young people who own homes valued at three quarter of a million dollars, unfortunately no help was intended. She is on her own.

No, the government just prevented a transaction, based on discrimination. Another buyer will come along and the market will set the price. So many young socialists here. Who knew? – Garth

#91 young & foolish on 11.07.18 at 8:27 pm

To all the anti-real estate owning crowd here … come on, who do you think should own those rentals you inhabit?
How about some perspective here. You don’t have to own stocks or bonds, but you do have to pay for shelter one way or another.

#92 Yuus bin Haad on 11.07.18 at 8:34 pm

Just dropped by to put my two cents in. Anyone have change for a fiver?

#93 Shawn Allen on 11.07.18 at 8:35 pm

Assuming the Line of Credit is Maxed Out in calcualting Debt Service Ratio…

I believe at least some banks made that assumption regarding credit cards and any lines of credit circa 1988 1990.

Banks were cautious lenders back then in my experience.

#94 SimplyPut7 on 11.07.18 at 8:43 pm

Do you smell new regulations coming that mandate principal payments on outstanding balances? I do.

——————-

I guess for new debt it would be fine, but for old debt (e.g. 100,000+ condos under construction in GTA and YVR, hoping to get financing at completion) it would be bad.

https://www.ratespy.com/got-a-heloc-your-mortgage-options-are-about-to-shrink-11067208

#95 slick on 11.07.18 at 8:47 pm

Garth;
i thot for sure you would have mentioned abooout the jump in loans from HCG.

‘The improvement came as Home Capital saw mortgage originations total $1.44 billion during the quarter, roughly 273 per cent higher than the same period a year ago when Home Capital was dealing with the fallout of its earlier liquidity crisis.’

I suspect most of these loans were for people who did not qualify with a traditional lender, or could not pass the stress test.

#96 VANCOUVER NOW WORST IN WORLD on 11.07.18 at 8:57 pm

SORRY to those who still think Vancouver is Awesome. I cannot stop laughing. It’s all over the talk shows and regular MSM.

So, you greedy Vancouverites with no life other than your dwindling home values, I can guarantee there will be no recovery for 4 years. Truth is that now that the Marxists that run our health care “system” are taking away any last vestige of freedom, doctors and other related health care professionals are heading for Russia and Communist China where people have a choice between public and private, just as in every European country. Wow, we SUCK. So, for those who have a heart attack from the rapidly declining values, don’t bother trying to get help from a broken health care system

#97 another resident doctor on 11.07.18 at 9:03 pm

Turns out the buyers are a young couple from upstate New York relocating to Toronto where he’ll be a resident doctor at one of the giant hospitals on University Avenue.
—-
This was a bad deal regardless of whether he was getting into it at 750 or 850. Residency is a 2-5 year gig. You start at a 60k annual income and by year 5, you’re making 75k annual income. There is no deviation here or room for additional income. Then you move on from your residency to wherever you can find a doctor job. And if you need to work at a hospital (ie. you’re a specialist) there are no jobs waiting in the GTA. Its stuffed. There’s no guarantee he’ll be here permanently or even long enough to make the rent vs. buy argument logical. At these prices, renting is the only logical thing to do. Seems he wisened up and saved himself the future losses…

#98 cmj on 11.07.18 at 9:03 pm

Telling sellers who can be buyers is not the role of government. Hard to believe the number of people here so willing to rig the market with so flawed a concept. Prices will find their own level. There was zero speculation in this example. Owning real estate is not a right and shame on politicians who delude you into thinking so. – Garth

I fully agree with you, Garth. The government interference with real estate only messes up the natural balance of where this market finds its rightful place. It is a smoke screen and a way to generate more taxes. Think about it. What percentage of the market is foreign? We inflated this market. Take responsibility.

#99 Victor V on 11.07.18 at 9:08 pm

[Video] Banks tighten home equity line of credit guidelines

https://www.bnnbloomberg.ca/real-estate/video/banks-tighten-home-equity-line-of-credit-guidelines%7E1534071

#100 Brian1 on 11.07.18 at 9:08 pm

The Democrats won nothing. If they don’t negotiate then Trump will play golf for 2 years, stay healthy and win 2020.

#101 Shawn Allen on 11.07.18 at 9:08 pm

HELOCS… big impact

They have been around now for probably 35 years or so… It took a long time though before sort of everyone had one.

For the first time, it allowed people to borrow at low rates without needing approval from the bank after the line was set up.

So no more nosy bank asking if you actually still had a job when you started spending on that LOC. Or why you needed the money.

What could go wrong? And what is taking so long to find out what could go wrong?

Rising home prices certainly covered up a multitude of sins.

#102 crowdedelevatorfartz on 11.07.18 at 9:16 pm

@#77 felix

I think that kitty can hear the ocean……

#103 mathman on 11.07.18 at 9:20 pm

Smart money has already sold their investment properties in the GTA. Dumb money will keep their cash flow negative condo’s until they are forced sellers and realize a major loss. Smart money is less than 10% of the population.

Stress test is absolutely having a major impact – anything other than prime SFH is sitting with a seller waiting for a grater fool who likely cannot get financing – the days of having a heart beat and getting approved are over. it is a joke and mirrors show list, crickets – re-list with new pictures, much lower price and agent will still tell you sold for above asking.

I’ve yet to meet someone outside of Canada that didn’t thing we are nuts.

Stay liquid

Math

#104 Tony on 11.07.18 at 9:29 pm

Re: #83 WUL on 11.07.18 at 7:59 pm

Albertans didn’t learn a thing from the last American housing crash. You simply walk away in the first place as property values fall each year, year after year seemingly forever in Alberta.

#105 Newcomer on 11.07.18 at 9:31 pm

#52 Randy on 11.07.18 at 6:54 pm
Some Twitter wisdom

Fact @Fact
The word “mortgage” comes from a French word that means “death contract.”
———

Not really.

In Latin Law, Vadium Mortuum refers to a Dead pledge or a mortgage. It is a security given by the borrower of a sum of money, by which he grants to the lender an estate in fee, on condition that if the money were not repaid at the specified time, the pledged estate shall continue to the lender. This was considered a “dead pledge” because as far as the borrower is concerned, it would be dead or gone from the borrower or mortgagor. Vadium Mortuum is also known as Mortuum Vadium.

https://definitions.uslegal.com/v/vadium-mortuum/

#106 Emperor McMuff on 11.07.18 at 9:32 pm

Sorry Garth, you are clearly wrong here. The tax worked. She likely needs to drop her price. Therefore, housing becomes less expensive for Canadians. I see families with kids/babies living in tents out West. Prices. Need. To. Drop. FAST.

The condo is in Toronto. Get a grip. – Garth

#107 Bev Fournier on 11.07.18 at 9:43 pm

For the first time I am truly worried about the people at the end of their debt rope.

#108 yvr_lurker on 11.07.18 at 9:43 pm

I recall an earlier post by our blog-master saying that the vacant homes tax in YVR will not even cover the administrative expenses incurred in setting it up. It seems like it has generated somewhere between 18-30Mill in the first year.

https://www.castanet.net/news/BC/241344/Empty-homes-30M-in-tax

In the end, it all depends on what one wants to believe and what our core values are. Is it “discrimination” when we put some barriers in front of non-residents for bidding up local real estate? (I think not)… etc…

#109 Newcomer on 11.07.18 at 9:43 pm

#60 Smoking Man on 11.07.18 at 7:12 pm

Major math error in the climate change hysteria put out by IPPC.
—–

Not put out by the IPCC. Published in ‘Nature.’ Not even remotely similar things. How can you make predictions about the future if you don’t even understand the plain facts of the present?

#110 BobC on 11.07.18 at 9:45 pm

“Can’t fund the wall” isn’t that great? If I was Trump I’d line up the busses and take them straight from our southern border to the Canadian border. Your spending over $50 million dollars on hotels now and you don’t mind Millions more because you love being the nice guy.
My grandmother was right. The only way to fix a liberal is to give them everything they want.

#111 Drill Baby Drill on 11.07.18 at 9:49 pm

There are 2 highly probable very negative geopolitical scenarios currently in play. Either one will seriously spike interest rates.

1) USA losing it’s dollar hegemony ie: China, Russia, Iran purchasing and selling in Yuans or Rubbles.

2) China selling off it’s USA dollar reserves ie: bonds

#112 Prince Polo on 11.07.18 at 9:55 pm

Sure, taxation is scary…..but how do we get to the point of $750,000 condos?! People have lost their marbles.

#113 Remembrancer on 11.07.18 at 9:55 pm

#66 Shawn Allen on 11.07.18 at 7:17 pm
Government Confiscation of Real Estate wealth
———————————————————–
Sounds convoluted and excessively complex, you should spend your energy worrying about simple expropriation…

#114 LL on 11.07.18 at 9:56 pm

# 38 – “By hey – doesn’t the stainless and granite look great in the kitchen ?”

What a joke…stainless & granite! It’s not even nice.

At the price condos are, counters should be at least plated gold!

#115 Ace Goodheart on 11.07.18 at 10:19 pm

RE: #103 Emperor McMuff on 11.07.18 at 9:32 pm:

“Sorry Garth, you are clearly wrong here. The tax worked. She likely needs to drop her price. Therefore, housing becomes less expensive for Canadians. I see families with kids/babies living in tents out West. Prices. Need. To. Drop. FAST.”

“The condo is in Toronto. Get a grip. – Garth”

Toronto Condos are cheap.

You just have to buy older ones:

https://www.realtor.ca/real-estate/20081012/single-family-1505–330-dixon-rd-toronto-ontario-m9r1s8-kingsview-village-the-westway

https://www.realtor.ca/real-estate/20095913/single-family-1209–320-dixon-rd-toronto-ontario-m9r1s8-kingsview-village-the-westway

https://www.realtor.ca/real-estate/20088241/single-family-1102–100-lotherton-ptwy-toronto-ontario-m6b2g8-yorkdale-glen-park

Many, many more like this, for under $250,000.00 for two and three bedrooms.

There is no reason to spend 3/4 of a million dollars on a condo in Toronto.

Go visit those spots. They’re ‘affordable’ for a reason. – Garth

#116 Paul on 11.07.18 at 10:29 pm

Zillow Ya baby

http://fortune.com/2018/11/06/zillow-stock-plunges-20-warns-disappointing-revenue-risky-expansion/

#117 paulo on 11.07.18 at 10:32 pm

well Garth i think that changes governing heloc’s are just around the corner think mid December or early in the new year.

Katelyn’s situation underscores the dangers of oppressive measures by goverment in the market place
with Toronto seeking to up its game as a hub for medical research and talent,along with it and ai companies of course have to consider the cost of housing for there projected hires. its all about cost competitiveness in addition to the available talent pool something i think is actually declining as professionals find more affordable locations to move to.

#118 Doug in London on 11.07.18 at 10:33 pm

The Yanks would be wise to rent if they stay in Toronto, and only consider buying if they move elsewhere. Say, are there any vacancies for a doctor in Temagami?

#119 For those about to flop... on 11.07.18 at 10:40 pm

Pink Pumpkins being carved in Vancouver.

Condo edition.

This down condo is on the market for less than purchase price from last year.

Picked up for 1.38 in October 2017 they just pulled out the toenail clippers and chopped off 60k

Third price reduction since late September.

They are acting skittish.

Relax,enjoy the winter as you are surrounded by nice warm concrete…

M44BC

Price Event
Nov 7, 2018 $1,318,800 Price Reduced
Oct 25, 2018 $1,378,800 Price Reduced
Sep 24, 2018 $1,398,800 Price Reduced
Sep 10, 2018 $1,450,000 Listed For Sale

https://www.zolo.ca/vancouver-real-estate/1318-homer-street/101

#120 Where's The Money Greedeau? on 11.07.18 at 10:40 pm

Re: #72 Musty Basement Dweller on 11.07.18 at 7:25 pm
As a verifiable Musty Basement Dweller living in the bowels of damp East Vancouver (as well as a proud “steerage section resident of this blog) I wanted to shout out some advice to any of my moldy compatriots out there. Get a dehumidifier! I just purchased the first one in my life and I have no idea why I never tried it before. They work really really well and you can save a lot of rent money by going the musty suite route. Automatic conversion to a dry comfortable space to wait out and observe this comical real estate bubble.. Have a great day.
+++++++++++++++++++
Careful what you wish for. That musty smell is MOULD. Now that the water is out of the air, those pesky mould spores will now be airborne filling the lungs. Expect a cough in the next couple months and worse the longer you stay.
Taken from: https://www.goodairgeeks.com/can-will-dehumidifier-kill-mold-effectively/
“Existing Mold Spores
Even though dehumidifiers have the ability to prevent mold growth and spread, they cannot remove spores that are already in existence. To ensure that this infectious fungus is gone for good, it needs to be removed and the area has to be continually cleaned. There are a variety of products that you can look for in the store that may assist with the removal of visible mold spores. Alternatively, simple household products such as soap, water and bleach can remove mold when regularly used.”

#121 Shawn Allen on 11.07.18 at 10:53 pm

I Get Some advice:

#109 Remembrancer on 11.07.18 at 9:55 pm
#66 Shawn Allen on 11.07.18 at 7:17 pm
Government Confiscation of Real Estate wealth
———————————————————–
Sounds convoluted and excessively complex, you should spend your energy worrying about simple expropriation…

************************************
Oh, I’m not worried at all, just commenting on the many ways government can push real estate values up and down.

Also, why would I worry about expropriation when it usually involves fair monetary compensation? Expropriation is not confiscation.

None of these things are high on my list of what to worry about.

#122 notagreaterfool on 11.07.18 at 11:03 pm

A quiet rule change will make it tougher for Canadians with a HELOC to get a second mortgage

https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-a-quiet-rule-change-will-make-it-tougher-for-canadians-with-a-heloc-to/

#123 Graeme on 11.07.18 at 11:20 pm

“Owning real estate is not a right” Garth

Unless you are a foreign investor who collects houses like kids collect baseball cards.

International agencies have redlined Canada as a place where criminal activity and money laundering take place because the government, up until recently has NOT interfered.

Do you think the former B.C. Government turning a blind eye to the potential for grave abuse of OUR laws was capitalism at its finest?

Do you think allowing rampant speculation in a survival basic like housing for locals is just the way it should be?

I don’t get it and neither do any of your readers. The new government of B.C is finally doing what should have been done ten years ago.

#124 Barb on 11.07.18 at 11:27 pm

“…So many young socialists here. Who knew? – Garth”

————————————————–
I’ve thought the same thing!
Unfortunately the frequency is increasing.

#125 Ponzius Pilatus on 11.07.18 at 11:31 pm

Massive price reductions in Richmond.
https://www.ovlix.com/property/7ZRzfI-4220-Pendlebury-Road-Richmond-BC-V7E1E5

#126 Bottoms_Up on 11.07.18 at 11:39 pm

29 Shawn Allen on 11.07.18 at 5:53 pm
———————–‘
Only the husbands name was associated with the account.

#127 Smartalox on 11.07.18 at 11:43 pm

Wow, this HELOC stress test is going to hit a lot of families that I know, and hit them hard. Dual-income families who took on major mortgages, then maxed out their HELOCs to pay for a special assessment on their homes.

https://www.theglobeandmail.com/investing/personal-finance/household-finances/article-a-quiet-rule-change-will-make-it-tougher-for-canadians-with-a-heloc-to/

#128 Rentin on 11.07.18 at 11:45 pm

“In colourful moister language she asked how the @%#&! any of this makes houses less expensive or helps a young person like her. I had no answer.”

I too agree that it doesn’t make the house less expensive for the buyer that is a non resident. But it does take away another sale or demand, while the supply grows.

So will rising interest rates.

That will make houses cheaper for those that do not need to borrow money to purchase a house.

And shouldn’t those people be the ones to legitimately complain about prices the loudest?

I rent my 1M dollar house for 1700/month. The LL has a nice 500K capital gain, and I “missed” out on the opportunity for a tax free 500K gain since 2013. My money has essentially done the same, but subject to higher taxes. So right now I have the opportunity to trade cash for house. But at 1700/month its a no brainer to stay put….

I welcome a correction, with it bringing devastation to those financially illiterate. Risk averse investors who chose not to get caught up in the catapult of house prices can only be rewarded with a major correction.

Given the choice, I would pay half the price for a house at twice the interest rate. Even though my payments would be almost the same. It rewards those who pay for the house quicker.

For those that can buy cash, well duh, why wouldn’t we want the prices to fall????

#129 Bottoms_Up on 11.07.18 at 11:46 pm

#40 Azashi on 11.07.18 at 6:23 pm
————————–
I agree with Garth on this. if these people have oodles of money or are just trying to relocate money (let’s say a few million from China) then $150k ain’t no big thang. However, if these are hard working people trying to scratch out a living, then yes the 15% tax will hurt (especially if unexpected), and they will have to shop at a lower price point (or not come here at all).

The 15% tax hurts the honest folk coming in. I think it does little to stop speculators and those just trying to move money out of other countries.

#130 Figus Makum on 11.07.18 at 11:50 pm

WRT the unsuccessful condo sale because the buyer was a foreign national, the buyer could have exempted himself of paying the Non-Resident Speculation Tax if he were to “certify they will occupy the property as their principal residence.”
(see “Exemptions” in https://www.fin.gov.on.ca/en/bulletins/nrst/ )
From the information given, this appears to be their intention. Furthermore, the Exemption article uses the term “will occupy” (future tense) without stipulating a time period/duration of occupancy for the buyer to qualify for the exemption.

Unfortunately, there is no exemption/reprieve from the bevy of the other taxes.

#131 Bottoms_Up on 11.07.18 at 11:51 pm

111 Ace Goodheart on 11.07.18 at 10:19 pm
——————
recent gun violence near those dixon road condos.

#132 Newcomer on 11.07.18 at 11:56 pm

No, the government just prevented a transaction, based on discrimination. Another buyer will come along and the market will set the price. So many young socialists here. Who knew? – Garth

——
I didn’t say I supported it. I don’t. (But I do appreciate being called young.) But I don’t understand why taxing foreigners would not work. The assumptions here are that the other buyer you mention will have shallower pockets than an international buyer, and the smaller pool of potential purchasers will bid less than a larger pool would.

(My federal approach would be to close the CMHC and make the banks factor risk into their rates. My provincial approach would be a progressive property tax.)

#133 Bottoms_Up on 11.08.18 at 12:00 am

88 Newcomer on 11.07.18 at 8:19 pm
———————-
Think about that for a second. The tax prevented them from buying THAT place. It may not prevent them from buying a place of lesser value. In fact, buy forcing that couple to shop in a lower price bracket, they are now competing against more buyers, thus potentially driving up the price of lower priced units.

The tax is flawed.

#134 Mr Grimm on 11.08.18 at 12:06 am

Time is ripe, moistens borrowing seconds at 20% to re-up and stay in the pad….my kind of market. Garth, you interested in setting up a finance wing? Cash is available.

#135 Greg on 11.08.18 at 12:07 am

The tax doesn’t make housing more affordable.

Buyer pays the same total market price.
Seller gets less.
Government takes the difference.

It’s just a wealth transfer from sellers to government.

#136 Bottoms_Up on 11.08.18 at 12:08 am

60 Smoking Man on 11.07.18 at 7:12 pm
—————————
I commend you in finding the math error in ocean warming.

The bad news is that global warming and climate change are still very real. The good news is we may have a couple extra years to get our collective acts together to do something substantial about it.

#137 cramar on 11.08.18 at 12:09 am

Why doesn’t the good doctor who is moving to Toronto just rent a condo? Makes no sense to me. He needs to read this blog (but not the steerage section).

#138 Bob on 11.08.18 at 12:14 am

Owning real estate is not a right and shame on politicians who delude you into thinking so. – Garth

So you’ve said, many times, but I don’t recall anyone claiming the opposite. Shelter and security are basic human needs. A wise government will ensure that those needs are satisfied.

Shelter is not real estate. – Garth

#139 Smoking Man on 11.08.18 at 1:50 am

Working on an essay on the evils of globalism to share with you inbread mutts..

It’s not going to be sexy. Truth telling from an empty bottle of bravery will hurt my job that I don’t need but love.

It’s coming. Stay tunned to greater fool. I want to own the crown.

The lefty loons on here. They hate everything anyway.
Their hate toward me. Badge of Honour.

Dr Smokimg Man
PhD Herdonomics

#140 When Will They Raise Rates? on 11.08.18 at 4:28 am

Go visit those spots. They’re ‘affordable’ for a reason. – Garth

And what reason is that exactly?

I’m confused by your comment because I’ve visited these spots and they are full of diversity and culture, home to some of the best people you will ever meet.

Why are they ‘affordable’ in your opinion?

#141 Howard on 11.08.18 at 4:45 am

#111 Ace Goodheart on 11.07.18 at 10:19 pm

Toronto Condos are cheap.

You just have to buy older ones:

https://www.realtor.ca/real-estate/20081012/single-family-1505–330-dixon-rd-toronto-ontario-m9r1s8-kingsview-village-the-westway

https://www.realtor.ca/real-estate/20095913/single-family-1209–320-dixon-rd-toronto-ontario-m9r1s8-kingsview-village-the-westway

https://www.realtor.ca/real-estate/20088241/single-family-1102–100-lotherton-ptwy-toronto-ontario-m6b2g8-yorkdale-glen-park

——————————————

That last hideous one isn’t worth more than $50K. Shudder.

#142 Less Qualified on 11.08.18 at 6:14 am

This should hurt a few people.

Canada’s No. 1 player in HELOCs, Toronto-Dominion Bank, just changed a key policy on Tuesday.

For people applying for a separate new mortgage and keeping their existing HELOC, TD is requiring that applicants prove they can afford a theoretical monthly payment based on the limit – not the outstanding balance – of that HELOC.

Link to Globe & Mail article.
https://t.co/mydHo2n5Nm?amp=1

#143 The NRA on 11.08.18 at 6:24 am

Another mass shooting in the good ‘ol US of A. As our late president Charlatan Heston said,

“I’ll give you my gun when you pry it from my cold, dead hands”

#144 NoName on 11.08.18 at 6:40 am

#131 Greg on 11.08.18 at 12:07 am
The tax doesn’t make housing more affordable.

Buyer pays the same total market price.
Seller gets less.
Government takes the difference.

It’s just a wealth transfer from sellers to government.

—-

You are wrong, buyer is only party with party with money, buyer pays for everything, not seller. Seller is just passing buyers money around.

#145 MF on 11.08.18 at 6:52 am

#120 Barb on 11.07.18 at 11:27 pm
“…So many young socialists here. Who knew? – Garth”

I’ve thought the same thing!
Unfortunately the frequency is increasing”

–>Oh please spare us Barb. I didn’t hear you complaining about socialism when the Bank of Canada reduced rates to near zero and gifted all home owners with fake equity. Or when 40 year mortgages were mandated in to prevent a housing collapse.

That was okay with you though right?

Let’s not forget the origins of our housing bubble and why this condo is flirting with 750k.

MF

Monetary policy is not socialism. The brief existence of 40-year mortgages had zero to do with any collapsing market. Stop embarrassing yourself. – Garth

#146 Gramps on 11.08.18 at 7:22 am

You are wrong, buyer is only party with party with money, buyer pays for everything, not seller. Seller is just passing buyers money around.

Look at it this way. Your employer is the party with the money. You pass your wages around. The more you pass to the government in taxes, the less you have to buy books on “economics 101”
Result; employee is pissed.

#147 MF on 11.08.18 at 8:07 am

Monetary policy is not socialism. The brief existence of 40-year mortgages had zero to do with any collapsing market. Stop embarrassing yourself. – Garth

-I don’t care what you call it. Government mandated on the way up and now government mandated on the way down.

MF

Just admit you misstated facts. It’s faster. – Garth

#148 crowdedelevatorfartz on 11.08.18 at 8:23 am

@#138 Less Qualified
“For people applying for a separate new mortgage and keeping their existing HELOC, TD is requiring that applicants prove they can afford a theoretical monthly payment based on the limit – not the outstanding balance – of that HELOC.”
++++

This has been going on for years.
All banks look at your “potential debt” ie Loans, unused lines of credit, unused credit cards, etc.
They assume IF you are maxxed out on all potential credt to the hilt and then they calculate if you can make your “new” payments.

Interest rates rising….. housing sales tanking…… gonna be an interesting election year for T2 when the economic shite starts hitting the fan.

I wonder if T2 will apologize to all Canadians for the Real estate cartels’ 5 decade lock on sales information…. might win him some votes.

#149 TurnerNation on 11.08.18 at 8:26 am

#136 When will they raise.

Why would I need diversity when I have my own traditions, food, holidays, faith, rituals, social and moral code?
I don’t care for anyone else’s. I want to be around people which enjoy the same things.

Like going to a dive bar, drinking rotgut and singing along to Lynrd Skynrd. Good times.

Special occasions might include beer drinking then burping out the National Anthem.

Care to join me?

#150 Victor V on 11.08.18 at 8:29 am

Bombardier is selling off two businesses and cutting 5,000 jobs

https://business.financialpost.com/transportation/airlines/update-1-bombardier-ebit-more-than-doubles-to-sell-two-businesses

#151 Hamsterwheelie on 11.08.18 at 8:55 am

I think houses should pay us, I have to crunch my numbers more precisely but it seems we’re getting paid decently for living in our house. 6 units over 2 houses, one of which is ours, is clearing a coupla thousand after all bills. Doesn’t make us rich but sure helps a lot :-) Thanks for the heads up on the HELOC – will add it into my monthly bill payments. (Have just had minimum payments on autopay) batten down the hatches mateys!

#152 Fish on 11.08.18 at 9:41 am

Bombardier cutting 5,000 jobs, selling Q Series aircraft
Montreal-based company said the measures will result in $250M in annual savings
CBC News · Posted: Nov 08, 2018 6:47 AM ET | Last Updated: 36 minutes ago

https://www.cbc.ca/news/business

#153 AJ on 11.08.18 at 9:44 am

#82 Al on 11.07.18 at 7:55 pm
“..asked how the @%#&! any of this makes houses less expensive or helps a young person like her. I had no answer.”

You both know the answer. It just happened. The no sale to that lonely buyer might make her accept a lower price in the future. The condo is now less expensive for residents. It doesnt help the seller, young or old, unless the seller is buying into the same depressed market however that was never the intent. The merit of the last can be debated, the former is inevitable given the current conditions.

Telling sellers who can be buyers is not the role of government. Hard to believe the number of people here so willing to rig the market with so flawed a concept. Prices will find their own level. There was zero speculation in this example. Owning real estate is not a right and shame on politicians who delude you into thinking so. – Garth

100% bang-on Garth! That is why I love this blog.

#154 Shawn Allen on 11.08.18 at 9:52 am

Is $150k foreigner tax a big deal?

#125 Bottoms_Up on 11.07.18 at 11:46 pm said:
if these people have oodles of money or are just trying to relocate money (let’s say a few million from China) then $150k ain’t no big thang

************************************
The vast majority of people with oodles of money did not get that way by wasting money or treating $150k as no big deal.

It’s one thing to pay $800k for a Condo expecting it to retain its value so that the $800k becomes an asset.

It’s another think to tack on $150k tax that can never be recovered in a later sale price since the foreigner’s condo will not be worth $150 more than his neighbor’s despite the extra payment.

For that reason and for the very real and painful reason of feeling discriminated against, the foreigners will tend not to buy.

This tax may be wrong and mean-spirited. But it will most definitely work to push home prices lower. It harms those foreigners that pay it and all home sellers and home owners and benefits home buyers and provides tax revenues. It was up to politicians to decide if this was in the overall greater good and if the benefits justified the very real harms.

#155 David on 11.08.18 at 11:01 am

Taxing real estate doesn’t lower purchase prices. It splits the purchase price between the seller and the government, so reducing profit to the seller.

#156 Karlhungus on 11.08.18 at 11:22 am

#151
Bang on. I’m amazed at how this is lost on so many people here

#157 thesecondcomingofjohngalt on 11.08.18 at 11:22 am

Awwwww! Love the picture today, I must say Garth, having stumbled across your blog a few years ago, it has become one of my mandatory morning rituals. Keep up the good work.

#158 dharma bum on 11.08.18 at 11:31 am

It’s astounding to see how cheaply one can own a beautiful condo in the Greater Phoenix Area, i.e., Scottsdale AZ, compared to a condo the GTA or Greater Vancouver.

Checking the local listings, there are tons of amazing higher end properties available for around $200K.

What a bargain. A pretty low price to have such great access to the stunningly magnificent American Southwest.

We are so ripped off with real estate prices in the Great White North (in the decent places, that is).

https://www.nationalgeographic.com/travel/destinations/north-america/united-states/arizona/scottsdale-desert-destination/

#159 Ace Goodheart on 11.08.18 at 11:37 am

RE: “Go visit those spots. They’re ‘affordable’ for a reason. – Garth”

Yes of course they are. They’re old buildings, in poor shape, out of date condos with worn out interiors, located in “bad” neighbourhoods like Dixon City.

My point is there is no housing crisis in Toronto. There is plenty of housing. People are just all trying to cram themselves into the same small popular areas.

At any rate, they have apparently uncovered that about a billion or so of our tax dollars have been misplaced in Afghanistan, likely going to “ghost workers” (ie, paycheques to people who don’t exist), to the Taliban, to warlords and to people who simply stole the money.

So I guess there will now be another general assault on the taxpaying Canadian public, to replace this missing money. Maybe the 54% top marginal rate is not enough.

Maybe the foreign buyers tax should be 30% or 45% or 100%.

What I wonder is when, if ever, someone will point out that when governments routinely lose, mismanage, misplace, misspend tax money, the solution is not to attack the taxpaying public and demand more money, but rather for those who lost the money to pony up.

We need those in government to be directly accountable to those whom they are supposed to be representing.

Part of that billion dollars was money that was extorted from me, on threat of jail time, garnishment, court activity and loss of assets, by an organization whose goal seems to be to take as much money from the public as they can, and then deliver it to people who will quite literally throw it away.

And we have a comment board here of people who are basically supporting this, asking to be taxed more and supporting excessive, stupid, pointless taxes that only have the effect of stopping free market activity.

I guess y’all better go work for the government, because the private sector is very quickly being taxed out of existence.

#160 Fish on 11.08.18 at 11:46 am

$509M paid to Sears Canada shareholders could be subject of court case
Facebook
Twitter

Court-appointed insolvency monitor identifies ‘unresolved concerns’ over 2013 dividend payments

Sophia Harris · CBC News · Posted: Nov 08, 2018 4:00 AM ET | Last Updated: 6 hours ago

https://www.cbc.ca/news/business/sears-canada-eddie-lampert-dividends-shareholders-1.4896425

#161 n1tro on 11.08.18 at 11:48 am

#59 crowdedelevatorfartz on 11.07.18 at 7:12 pm
@#11 M G
yep.
538.com and Mr Silver was bang on in his forecast.
And MAGA crowd after all “red wave chest pounding” was said and done?
Crickets
—————–
What did you expect? Crying and bitching? Not conceding? That is what the other side likes to do.

https://nypost.com/2018/11/07/stacey-abrams-not-conceding-georgia-governors-race/

#162 Musty Basement Dweller on 11.08.18 at 11:59 am

To #116 Where’s The Money Greedeau? on 11.07.18 at 10:40 pm:—————
Thanks for the good information on mold –noted!

#163 Asterix1 on 11.08.18 at 12:03 pm

Trudeau’s next apology….

“On behalf of all Homo sapiens, I wish to apologize for the pain and suffering that we inflicted to the Neanderthal 40,000 years ago”

#164 When Will They Raise Rates? on 11.08.18 at 12:14 pm

DELETED

#165 Barb on 11.08.18 at 12:18 pm

Price/Ft2 Canada survey:

http://www.century21.ca/ppsf2018

#166 Leafsfan on 11.08.18 at 12:18 pm

Hi Garth, great blog- go leafs! Ur right houses r going down

#167 Travis on 11.08.18 at 12:25 pm

#95 cmj on 11.07.18 at 9:03 pm

We inflated this market. Take responsibility.

*******

Finally somebody using the “R” word.

It’s crazy to me wherever there is a housing bubble you hear the same things: everyone wants to live in (Ireland, Spain, Australia, etc), it’s all these damn foreigners, prices are rising with no end in sight. Basically nobody takes responsibility (“Well yeah I gave my kid a loan for a home and didn’t disclose it to the bank, but everyone does it.”)

Then the bubble bursts and people with piles of debt based on their “equity” suddenly discover their socialist side “Oh please help me. Won’t the government do anything for the man in the street? We’re living in tents here as our homes were repossessed. God forbid I learn responsibility and accept that I gambled and lost.”

Take some responsibility. Nobody will budget for you. Nobody is holding a gun to your head, forcing you to buy in an overpriced market. Nobody made you get the HELOC, nobody forced you to sell your portfolio at a loss to make debt payments, the system is not “rigged”. Your homes and jobs were not “stolen” by immigrants and refugees. Responsibility starts with not blaming others for your mistakes and demanding that others fix your situation for you.

#168 jess on 11.08.18 at 12:33 pm

it just isn’t over when the economists say it’s over

whether war
https://www.va.gov/opa/pressrel/pressrelease.cfm?id=2951
VA Releases Veteran Suicide Statistics by State

or financial war e.g.

https://www.marketwatch.com/story/banks-have-been-fined-a-staggering-243-billion-since-the-financial-crisis-2018-02-20

#169 jess on 11.08.18 at 12:40 pm

Scalping is where a perpetrator makes a stock recommendation to investors and simultaneously trades against that recommendation in the open market without adequate disclosure

According to the SEC’s complaint, SeeThruEquity LLC and brothers Ajay and Amit Tandon camouflaged the payments by inviting companies to make a “presentation” at an investor conference in order to receive a research report for free. SeeThru and the Tandons allegedly collected up to several thousand dollars in conference presentation fees per company, and the issuers regularly had input into the substance of the supposedly unbiased research reports, even including the price targets at times. The SEC alleges that the Tandons often instructed SeeThru analysts to use different, higher price targets for covered issuers than those yielded through purported quantitative analysis, and the price targets contained in SeeThru’s reports were typically more than 300 percent above the current trading price of the stock.

https://www.sec.gov/news/press-release/2018-259

#170 jess on 11.08.18 at 12:45 pm

a new addend to the 78billion in fines to date

Press Release
Citibank to Pay More Than $38 Million for Improper Handling of ADRs

FOR IMMEDIATE RELEASE
2018-255

Washington D.C., Nov. 7, 2018 —

The Securities and Exchange Commission today announced that Citibank N.A. has agreed to pay $38.7 million to settle charges of improper handling of “pre-released” American Depositary Receipts (ADRs).

ADRs – U.S. securities that represent foreign shares of a foreign company – require a corresponding number of foreign shares to be held in custody at a depositary bank. The practice of “pre-release” allows ADRs to be issued without the deposit of foreign shares provided brokers receiving them have an agreement with a depositary bank and the broker or its customer owns the number of foreign shares that corresponds to the number of shares the ADR represents.

The SEC found that Citibank improperly provided ADRs to brokers in thousands of pre-release transactions when neither the broker nor its customers had the foreign shares needed to support those new ADRs. Such practices resulted in inflating the total number of a foreign issuer’s tradeable securities, which resulted in abusive practices like inappropriate short selling and dividend arbitrage that should not have been occurring.

This is the second action against a depositary bank and sixth action against a bank or broker resulting from the SEC’s ongoing investigation into abusive ADR pre-release practices. Information about ADRs is available in an SEC Investor Bulletin.

“Our charges against Citibank are the latest in our ongoing investigative effort to hold accountable Wall Street institutions that participated in an industry-wide fraud,” said Sanjay Wadhwa, Senior Associate Director of the SEC’s New York Regional Office. “Our investigation into these practices has revealed that banks and brokerage firms profited while ADR holders were unaware of how the market was being abused.”

Without admitting or denying the SEC’s findings, Citibank agreed to pay more than $20.9 million in disgorgement of ill-gotten gains plus $4.2 million in prejudgment interest and a $13.5 million penalty for a total of more than $38.7 million. The SEC’s order acknowledges Citibank’s remedial acts and cooperation in the investigation.

#171 DGF on 11.08.18 at 12:49 pm

Listened to a brief news report yesterday on the upcoming provincial byelection in Nanamio…The NDP candidate must have been told to use government-speak code words such as ‘tools’ to help justify Speculation R.E. taxes being imposed. The new Liberal candidate insists spec tax is wrong and advocates ‘increasing supply'(which also may not necessarily work). I agree with GT that any of these taxes (or ‘tools’ in NDP-speak) will not work in decreasing costs to people, but just increase the amount of $$ ending up in government coffers. And I always find it interesting that the government forecasts ongoing increased revenue on these measures. I thought that these ‘tools’ are meant to help solve the ‘housing crisis’ (another over-used term)?! Shouldn’t the revenue go down over time?! Perhaps I’m being naive..

#172 jess on 11.08.18 at 1:31 pm

eb5 fraud the list grows

Press Release
SEC Charges Lawyer and Her Husband in EB-5 Fraud
Defendants Allegedly Altered Evidence in Cover Up

FOR IMMEDIATE RELEASE
2018-241

Washington D.C., Oct. 18, 2018 —

The Securities and Exchange Commission today charged a California-based immigration attorney and her husband in a fraudulent scheme that generated millions of dollars of undisclosed compensation from foreign investors seeking permanent U.S. residency through the EB-5 Immigrant Investor Program.

The SEC’s complaint alleges that Jean Danhong Chen, Tony Jianyun Ye, and Law Offices of Jean D. Chen, with the assistance of a personal friend, Kuansheng Chen, secured over $10 million in undisclosed commissions by selling EB-5 securities to hundreds of Chen’s legal clients. The complaint also alleges that Jean Chen and Ye secretly acquired and operated an EB-5 regional center, Golden State Regional Center LLC, and later advised clients to invest in the center’s projects without disclosing their ownership interest. According to the complaint, Kai Hao Robinson assisted in the scheme by posing as the sole manager in control of Golden State when she was in fact merely a figurehead controlled by Jean Chen and Ye.

After learning of the SEC’s investigation, Jean Chen and Ye allegedly backdated documents and scrubbed other business records to conceal their role in the alleged scheme.

https://www.law.com/dailybusinessreview/2018/11/07/delray-beach-owners-accused-of-eb-5-visa-fraud-over-eatery/?slreturn=20181008132742

Twenty-one EB-5 investors sue developers of unfinished Fort Lauderdale hotel
The Las Olas Ocean Resort is entangled in bankruptcy and will go up for auction Aug. 15

https://chincurtis.com/news-events/immigration-update/uscis-warns-scams-exploiting-eb-5-immigrant-investor-program

#173 Pat Jones on 11.08.18 at 1:32 pm

I’m not an expert on real estate, having rented all my adult life. However, I think that the people who are in favour of speculation taxes on real estate are overlooking an important variable.

The thought is that a speculation tax will lower prices to the point where the ordinary Joe Canuck can afford to buy. If Mr. and Mrs. Canuck can’t afford to buy when prices are high and rates are LOW, what makes them think they can afford to buy when prices are lower but rates are HIGHER?

Some folks on this blog appear to be waiting for prices to drop, but based on their comments, it looks like they’re ignoring the interest rate hikes which will balance out the price drop, ensuring they probably won’t be able to afford the house they WANT. Instead, they may have to settle for the shelter they NEED.

Thanks for reading.

#174 KLNR on 11.08.18 at 1:33 pm

@#154 dharma bum on 11.08.18 at 11:31 am
It’s astounding to see how cheaply one can own a beautiful condo in the Greater Phoenix Area, i.e., Scottsdale AZ, compared to a condo the GTA or Greater Vancouver.

Checking the local listings, there are tons of amazing higher end properties available for around $200K.

What a bargain. A pretty low price to have such great access to the stunningly magnificent American Southwest.

We are so ripped off with real estate prices in the Great White North (in the decent places, that is).

https://www.nationalgeographic.com/travel/destinations/north-america/united-states/arizona/scottsdale-desert-destination/
_______________________________
love to visit. not sure i’d want to live there though. prices generally reflect where people want/need to reside

#175 Another Deckchair on 11.08.18 at 1:46 pm

@155 Ace Goodheart:

“We need those in government to be directly accountable to those whom they are supposed to be representing.”

When I was employed by the Feds, ALL underlings had to take a financial awareness course, because, public servants can’t benefit from the public’s money.

My hope is that, when the underlings make it to the top layers, they’ll instinctively understand that they have a responsibility to the people of Canada.

Saying that – we know how well some people deal with their own finances (i.e. illiterate in it) so one can’t expect miracles when they are at work…

#176 jess on 11.08.18 at 1:50 pm

(NEW YORK) — The prosecutor appointed to investigate allegations that former New York Attorney General Eric Schneiderman physically abused women says she has closed the case without bringing criminal charges.

Nassau County District Attorney Madeline Singas announced her decision Thursday.

She said in a brief statement that investigators did an “exhaustive review” and she personally interviewed each woman who had accused Schneiderman of assault.

Singas says investigators also spoke with members of Schneiderman’s security detail.

But she said she concluded that “legal impediments, including statutes of limitations, preclude criminal prosecution.”

Singas added that the probe found no misconduct by Schneiderman’s staff in the attorney general’s office.

#177 Shortymac on 11.08.18 at 1:56 pm

I know a couple who will gladly rent her condo from her…

Sad thing is the actual speculators just moved to shell companies to buy their properties, the average person gets hosed.

——————————————–

Voted absentee and mostly pleased with how things went down, I wish cowardly Cruz would have been kicked to the curb but we got illegal immigrant hiring Nunes out.

Lots of fresh blood in the dems, hopefully they won’t waste this opportunity like previously. I say this as a registered republican.

#178 AGuyInVancouver on 11.08.18 at 2:06 pm

#173 Shortymac on 11.08.18 at 1:56 pm

Voted absentee and mostly pleased with how things went down, I wish cowardly Cruz would have been kicked to the curb but we got illegal immigrant hiring Nunes out..
___
What are you talking about? Nunes won his seat.

#179 Penny Henny on 11.08.18 at 2:29 pm

New word of the day.
Clement.
def- to send sexually explicit photos of yourself to an unknown party.
ex- Even though he didn’t know her he had no problem clementing her.

#180 Landlord Larry on 11.08.18 at 2:42 pm

#141 MF

“Oh please spare us Barb. I didn’t hear you complaining about socialism when the Bank of Canada reduced rates to near zero and gifted all home owners with fake equity. Or when 40 year mortgages were mandated in to prevent a housing collapse.”

Fake equity you say? A previous tenant of mine took advantage of the 0 down, 40 year mortgage in 2008 and now has a nice 400k in equity in his home. Not fake cowboy!

#181 n1tro on 11.08.18 at 3:14 pm

#175 Penny Henny on 11.08.18 at 2:29 pm
New word of the day.
Clement.
def- to send sexually explicit photos of yourself to an unknown party.
ex- Even though he didn’t know her he had no problem clementing her.
—————————
I think another good example of the word would be…

Anyone who is married and thinks it’s ok to send naked pictures of themselves to someone other than their spouse is “clemented!”.

#182 Shawn Allen on 11.08.18 at 3:23 pm

Winner Win and Losers Lose

Today’s examples:

Canadian Tire, a long-time winner and one of Canada’s best managed companies reports good news.

Bombardier, a long-time loser and one of Canada’s most poorly managed companies announces more bad news.

#183 Mai on 11.08.18 at 6:34 pm

I wonder what motivated the young docs for the condo purchase. This is not a wise move since they most likely will have to relocate in 5 years after the training and it can be a hassle to sell. Unless they are counting on capital gains from the Toronto RE market. They should read this blog.

#184 Steve French on 11.09.18 at 5:51 am

Yo Garth:

Am i being blocked?!

Steve

Apparently not. Would you like to be? – Garth