With five rate hikes in the bag and likely as many to come, Big Bro says it’s working. The central bank this week dumped data showing the proportion of greater fools and total idiots borrowing 450% of their income is falling.
Incredibly, it used to be an average of one in five households snorfling this amount of debt back in late 2016. In truth, that meant 0% in Timmins, Fredericton, Windsor, Lethbridge or Kamloops, and 100% in Vancouver and Toronto. The Bank of Canada began to gag with news that most households buying properties for more than seven figures were diving deeply into debt to do so.
So, the universal mortgage stress test came in. CHMC stopped insuring mortgages on million-dollar properties. And the cost of money started rising.
The result: now 6% of new mortgages equal more than 4.5 times income. Of course, this is just fresh borrowing. All the previous loan piggies are still in place. That makes the economy vulnerable, says the bank. But ‘loan quality’ is going up, “which puts the economy on a more-solid footing to withstand future adverse economic developments.” That’s so comforting.
While the urban uber-borrowers are dipping less as rates rise, a poll shows it’s the moisters who are freaking out the most at the swelling cost of money. Nick Nanos’ latest survey claims 51% of the 18-34 crowd believe what the Bank of Canada’s doing is having a negative impact on their lives. That’s a serious jump in the last three months. No real surprise here, of course, since most of this group’s debt is in the form of mortgages. Big ones.
Remember what banker boss Stephen Poloz told lawmakers in Ottawa when they queried im on exactly this topic:
“I have children who are adults, and I think they don’t understand this, because they’ve never experienced the kinds of interest rates that you and I have in our lifetime. It shouldn’t feel difficult. It shouldn’t be a hard thing for people to service their debt at those kinds of interest rates.”
Nah, it shouldn’t. My first mortgage in the 1970s was 11.75%. When I lost my mind and was initially elected to Parliament in 1988, Dorothy and I were paying 14%. In fact the average home loan over the last three decades has been pegged at 8%. So why are the kids moaning and gnashing over borrowing at 3.5% which may rise to 4%?
Simple. They borrowed too much. And they had to, because as rates fell houses inflated. But because rates are now rising, real estate will eventually follow – yet the debt incurred will not be reduced. And that, simply put, is the best argument possible for renting until this tightening cycle is long over.
Now, in fairness, the hipsters may have a point about real estate.
Millennials appear to be the most urban generation… ever. Just drive across the Granville Street bridge or downtown on the Gardiner and you can see what’s happened to Van and 416. The wall of condos is astonishing. Tens of thousands of little boxes piled atop each other in a density which is at odds with all of the rest of the country. This is moister ground zero, where developers have responded with bicycle elevators, buildings without parking and coffin-like cool cement ceilings.
Of course all that competition has jacked prices. So while detacheds are out of favour and losing value in many hoods, condos have continued to appreciate, even as sales are weakened by the stress test. And now comes some official confirmation that the city kids – many paying $1,000 or more a square foot – may actually know what they’re doing.
CHMC, no less, now says moving to the burbs to get a cheaper house price may not be worth it, once the cost of commuting is factored in. Looking at Toronto, where a stunning 2.6 million commute. Most of them (almost 70%) drive, which explains what TTC stands for – ‘Take The Car’. A million of these people spend 45 minutes travelling, and close to 40% of them take an hour to reach work. So, yeah, it sucks living in Milton, Halton Hills or Clarington where all the minivans go home to sleep.
It also costs a fortune. Like $800 a month when traveling from those places, compared to a fraction of that cost for city-dwellers. And not included is parking – which can easily be three bills in a downtown lot, bringing the commute bill to $1,100. Add in daycare (a median cost of $1,750 in Toronto) and you need about $44,000 in pre-tax income just to have a car and a kid. Ouch. Hard to afford tats and lattes when you’re shouldering such a load.
So while real estate costs less in the boonies, living might not. Guess where prices wither first?
142 comments ↓
#121 Stan Brooks on 11.14.18 at 3:04 pm
Some[charles nenner] say it[the dow] will go down to 5000.
********************************************
He said the exact same thing in July 2010, and again in March 2014, that the Dow would plummet to 5,000.
Next time you think someone might be great at predictions, simply google their name plus the word “wrong”.
If you ever wonder did people completely lost their minds, especially climate scientists, knowing the fact that highest natality rate is in sub saharan africa, and where mean outdoor temperature ranges low of 27’C and higher that 30’C, you have to click on a link so you don’t wonder any more.
https://www.usatoday.com/story/tech/science/2018/11/13/climate-change-could-damage-sperm-and-thus-male-fertility/1990220002/
Outdoor/indoor temperature chart
https://en.wikipedia.org/wiki/Climate_of_Africa#/media/File:Africa_temperature.png
World natality rate chart
https://www.indexmundi.com/map/?v=25
Re: Where People in GTA Prefer to Live:
“RBC-Pembina Home Location Study: Understanding where Greater Toronto Area residents prefer to live”
2012
https://www.pembina.org/reports/rbc-pembina-home-location-study.pdf
Also, is there no limit to the hoopdedness Calgarians face? Our oil producers are taking it on the chin. Downtown is vacant. A two week lavish party on the public dime (graciously provided by people outside of Calgary and from coast to coast to coast) might have helped sentiment in the Stamped City. 56% of us are not enamoured with the International Olympic Committee.
I voted to save all of you some tax dollars.
6th?
… where all the minivans go home to sleep …
Hey Garth,
Do you happen to have a similar map for Metro Vancouver?
Cheers.
First.
Based on the map at the end… it looks like Mississauga, Brampton, Richmond Hill, Markham and Pickering will be safe from any market crash.
The problem the Bank of Canada can’t fix with rates increases is that too much of our economy is in two cities. We need to build pipelines including Energy East to start fixing that.
Everyone in Canada can fit in Toronto and Vancouver. After all Metro Tokyo has a population of 38 million. But will that be good for Canada?
First
While I don’t doubt the data regarding suburban commuting costs, cheaper real estate is not the only reason people live out there.
My friends are a mixed group of city and suburbanites in th GTA, each of have different likes and ideas of a comfortable life. Some must be close to renowned restaurants, others couldn’t care less and want more space in their home (homebodies). Some work downtown, some work on the fringes of the core… and even if they drive 45 mins, they pop in a podcast and relax. Some don’t like the pollution of Toronto’s core, some can’t even tell there is pollution.
If you want to talk strictly dollars and cents when it comes to commuting DOWNTOWN, which I believe this data is reflective of, then yes the burbs are just as pricey. But all situations and tastes are different.
But because rates are now falling, real estate will eventually follow
—————
Typo – you meant rising.
Indeed. – Garth
Exactly as I predicted.
Gta is on fire. Condos especially. Urbanization is accelerating.
All of us paying rent have been wasting our money with rents so high.
And lol @ the bank of Canada. Their stupid policy of keeping rates too low for way too long is a big reason why people drove up prices and borrowed so much. What a dumb institution.
MF
The GTA is not ‘on fire.’ You must have a low ignition point. And renting is still cheaper than owning. – Garth
If SCM was still around he would be all over this post.
“All the boomers push the mills into real estate ‘get in now, it always goes up’
So the Mills buy at the absolute Apex years, meanwhile its likely every single renewal they do will be a higher rate for a depreciating asset.”
– SCM…probably
compare
what is value :
China’s 3 Dreams
In the 1970s, ordinary Chinese citizens were said to have three dreams: to own a watch, a bicycle, and a radio. Today, they strive for wealth and a better life, often to the detriment of family and tradition. Filmed over seven years, Nick Torrens’ documentary about China in the modern world is an exploration of the missing years of the Cultural Revolution.
Only Me Generation
Did China’s one-child policy create a generation of spoiled, privileged, selfish young adults? This documentary explores what everyday life is like for the people born between 1979 and 2015, when the policy was in effect. These young Chinese speak candidly about the huge pressure and high expectations from their parents, and reveal the dreams, worries, hopes, and fears of a generation.
https://tvo.org/video/documentaries/only-me-generation
https://tvo.org/video/documentaries/chinas-3-dreams
It’s about lifestyle.
When you’re young you go out to bars, restaurants, whatever and they’re mostly downtown.
Soon enough you get tired of it as you age into your late 20’s and early 30’s and then you want out to the relative serenity of the burbs and their mall amenities nearby.
And then you say the heck with weighing transportation costs vs. maintaining your sanity.
If downtown resident mating rituals bear fruition, you get the heck out of the DT to the suburbs where there is more room for the same buck and for a family.
The above is fine if you rented, you are mobile.
Not so good if you bought a DT condo since the “next mating ritual” crowd will not be able to afford the cash you paid.
But everyone will pay more as rates go up, everyone.
That will determine RE market prices and not some blue shaded traffic map from CMHC (they must not be very busy).
The CMHC traffic map is at the mercy of human nature (and, interest rate rises).
The GTA is not ‘on fire.’ You must have a low ignition point. And renting is still cheaper than owning. – Garth
-Condos selling for $1000/sq ft is not exactly ‘lukewarm’ either.
MF
That is in some new buildings. The average for new builds last year was $790. – Garth
And that whole commuting stupidity (don’t worry, I did my share as a kid and saw my parents do it for decades) is why I spent the money to buy a place close to work, downtown and almost all amenities my city has to offer.
I could have saved $40 – 50K more by living on the periphery of my burg, but the additional lifetime costs of 2 hours a week more spent on the road going to and from work was more than I was prepared to pay. It’s cheaper to pay the funds up front now and have that time for other later over the course of my working life.
The opportunity costs of commuting (especially where it takes huge amounts of time to commute like in Vancouver) is massive. Any accounting that doesn’t take account of this cost is dramatically off. 10- 20 minutes a day each way adds up to a whole lot of time (and time is money) over a life. A whole lot.
The more space you have, the more junk you collect, not to mention the increased maintenance.
Sometimes, smaller is better …
One of the other reasons that millenials don’t like the BOC rate going up is it pushes up the interest rates on student loans. Super low interest rates have had the exact same effect on school costs as they’ve had on real estate, and people forced to pay current eye-watering tuition prices are going to be burned even worse by a rising prime rate.
Be a plumber. Better pay. More security. Self-employment. No student loan. – Garth
Oil Producers Taking it on the Chin?
WUL at 3 mentioned this. It’s true. Hard times for Alberta oil producers especially heavy crude and bitumen.
Yeah, and Trudeau deserves some blame (or credit depending on your point of view) for this and also the B.C. government and the Supreme court and the Quebec government and or Montreal mayor and all the anti-pipeline people.
But the Alberta producers deserve blame as well. They seem to have vastly over-invested ahead of pipeline capacity causing a glut of trapped oil in Alberta.
Some of them have finally and wisely started to curtail production and called on others to do so. That’s perfectly legal and legit as long as you don’t make an actual agreement among competitors to cut production – which we call collusion.
Now some of these big free market capitalists want “Mommy” (the Alberta government) to force their competitors to curtain production. Apparently they want the government to protect the oil sands producers from themselves. This seems seriously weak and pathetic to me.
I have been optimistic about Alberta. Things were improving until Spring 2018. Now it is getting ugly. Private capitalists calling for government market interference. Yikes.
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Alex from Edmonton @ #18:
I graduated with $21K in student loans (1998 dollars, $32k is today’s equivalent) at 7.75%. After I paid them off, that experience made a mortgage on my first place (2007) at 5.07% look like a steal!
Oil Companies Seeking Government-mandated production cuts
P.S. I mean it’s totally normal for private companies to seek government regulations in their favor and to seek subsidies and protection from importers and even protection from competitors. And to seek to limit new entrants or new production licenses. Very normal. But to ask the government to mandate production curtailments by all companies already in business! That seems unusual and extremely weak to me. Let the weakest go out of business! Sorry but that’s how it is supposed to work. There are too many producers for the export capacity. Until there are new pipes someone needs to be pushed out of business. It’s not the government’s job to share the available business, even if it would like to.
Also, time is money… commuting sucks and you HAVE to go to work more days in a week than not. It’s why I rent and walk, bike or sometimes bus to work – way better IMHO.
question – I’ve often heard that housing affordability means not spending more than 4x or 5x income – so 450% is 4.5x. Is it safe to say THAT is the max one could safely spend
Canada’s housing market is imploding, growth is slowing and it will eventually go negative like it did back in the 80’s.
http://www.investmentwatchblog.com/canadas-housing-market-is-imploding-growth-is-slowing-and-it-will-eventually-go-negative-like-it-did-back-in-the-80s/
Be a plumber. Better pay. More security. Self-employment. No student loan. – Garth
And maintain a very high savings rate from the outset because the trades are hard on the body. Having entrepreneurial skills and mindset as well could set someone up very nicely. Accountants and lawyers seem to work forever but I don’t know many tradesmen (women are still new to the trades) who make it past 60. Be prepared to spend your “golden” years in a fair amount of pain too.
Source: father was a carpenter and we grew up surrounded by all manner of tradesmen.
“#19 Shawn Allen on 11.14.18 at 5:24 pm “
The losses to Albertan oil producers have been significantly exaggerated for political purposes for two big reasons.
The first is that much of the production of the oilsands is hedged, or is contracted for on a long-term basis. While those who dislike the current politicians and climate around pipelines run around quoting the spot price, and claiming that the losses are literally the difference between spot WCS and spot WTI multiplied by production volume. Which couldn’t be further from the truth. Exaggerated claims based on ignorance or for partisan reasons really reflect poorly on those who make them. All that we need to do is look at the Harper regime that lied about running a surplus (in fact they ran large deficits for most of their time in office) and how voters soundly threw the Tories to the curb for their dishonesty.
Secondly, WCS will always trade at a discount to WTI for two main reasons. WCS is produced at a significant geographic distance from actual demand centers. Always requiring a lot of transportation which can be costly (albeit it could be less costly if a pipeline were to be built compared to oil-by-rail). Additionally, WCS is significantly higher gravity oil and higher sulfur content which requires substantially more processing than WTI or the other light crudes that can be run on a comparatively larger number of refineries.
I agree with you fully, a big part of the problem is that oil companies continue to ramp up their production in light of the market giving them extreme signals to actually ramp down. Probably destroying shareholder value in the process. The issue of poor capital allocation is not one that can be fixed by politicians, but needs to be addressed by the oil executives looking in the mirrors. No Tim Hortons would fry up 1000 donuts if there’s only demand for 700 — why do oil producers feel comfortable doing metaphorically the same? Do we have Tim Hortons franchisees who over-produce donuts crying to government that they need to have government-sanctioned donut purchase programs in schools to deal with their overproduction program? Or do we simply tell the donuteers that they need to learn to manage their production better?
I’ve often wondered:
What should be more expensive, a sq foot of condo or a sq foot of house?
I mean… the house comes with yard and all, but then, you also buy the footage in bulk?
Shawn Allen:
I’m in complete agreement with your two comments about the ardent free enterprisers asking Rachel to impose production quotas on participants in the biz. The stupid should fail. The pipelines which are sought are within federal jurisdiction. Neither Notley nor Kenney can do anything about it. Also, the Asian market for bitumen is mythical. Trans Mountain has been shipping bitumen to Burnaby for decades and almost none has gone to Asia. A Hail Mary proposition.
Ross Kay on HoweStreet.com Radio:
Could China’s 22% Vacancy Rate Cause World Recession?
Why are Canadians still expecting house prices to rise?
https://www.howestreet.com/2018/11/13/could-chinas-22-vacancy-rate-cause-world-recession/
Agreed it’s all about lifestyle. But for me and the wife (in our 40s), that lifestyle means proximity to everything, and time saved = time with family. We are under 10 mins by walk/TTC to topnotch piano lessons (RCM), ballet (NBS), swimming (condo pool), skating/soccer/fencing/math club (U of T). I work long hours, but when I’m done, it’s 15 mins from office desk to bouncing my preschooler on the couch. It may be a small condo for many at 1100 sq feet, but twice as large as the one my brother and I grew up in, back home in India. We don’t own a car, and have never needed one, with 3 zipcar locations within shouting distance. We know many families making the same choice, and happy with it despite some downsides.
—
#14. Dolce Vita
It’s about lifestyle.
When you’re young you go out to bars, restaurants, whatever and they’re mostly downtown.
Soon enough you get tired of it as you age into your late 20’s and early 30’s and then you want out to the relative serenity of the burbs and their mall amenities nearby.
And then you say the heck with weighing transportation costs vs. maintaining your sanity.
DELETED
did the commuting from burbs thing early on in my career. Vowed once I made decent coin i’d never do a commute again. bike or walk to work for the last 20yrs.
more time with the fam and a bit of excercise to boot.
One thing I remember from living in the burbs – everyone drove their cars into their garage and entered the house from there. little to no interaction with their niehgbours. walking around it was like a ghost town
Re: #1 SoggyShorts on 11.14.18 at 4:01 pm
5,000 will probably look rich once Trump is gone. The elites will be making up for lost time as the entire system was supposed to be imploded shortly after the Hillary victory two years ago. I keep on telling Mark the same thing over and over again.
@#17 young & foolish on 11.14.18 at 5:17 pm
The more space you have, the more junk you collect, not to mention the increased maintenance.
Sometimes, smaller is better …
_____________________________
most times.
pay more property tax as well
#19 Shawn Allen on 11.14.18 at 5:24 pm
Oil Producers Taking it on the Chin?
WUL at 3 mentioned this. It’s true. Hard times for Alberta oil producers especially heavy crude and bitumen.
———————————————–
That’s putting it mildly… WCS was trading at a $15 handle today – a whopping $41 discount to WTI!
I don’t think even coordinated production cuts can keep all players in business unless the new pipelines are built – and good luck with that… FUBAR!
$1.83 million for this? Nice, modern house for sure with a decent sized lot (~1/4 acre), but I wouldn’t pay more than $1.0M for it.
I’ll wait a couple years and follow the ‘reductions’, which have already begun to show up all over the place.
Patience Grasshopper!
https://www.zolo.ca/langley-real-estate/3969-202-street
TCC (as opposed to ‘TTC’)
Check out the taxes you pay in Timmins on a 500k house compared to Toronto. $3000 in Toronto and $9000 in Timmins. The reason is simple. Toronto is subsidized by our provincial government in exchange for votes. We even sold Ontario Hydro to pay for your ride to work. Stop the subsidies and we’ll see business and people relocate to other jurisdictions. Maybe then people won’t have to drive into Toronto if a few businesses move to the outskirts.
https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-calculator/property-tax-calculator/
http://www.timmins.ca/city-hall/budget-and-finance/municipal-property-tax-calculator
To FLOP..
Any Richmond BC SFH sales data …..tear downs or new?
I am noticing SFH sales are literally non – existent…many “FOR SALES”….
Older condos and townhomes are selling reasonably well…..new projects seem to be slowing down.
While it is true that many of today’s youth have never experienced the high interest rates of the 80’s, they have also not experienced being able to purchase a newly built standard sized detached house for under $100K in Canada. These days the cost of serviced land, labor & materials alone would prevent such a price from occurring, even in the hinterlands.
Like everything else, commuting has its pros & cons. Perception of whether something is a pro or con varies. For instance, most would say that being able to walk to your place of employment would be on the pro side of the ledger. The cons might be 1) no excuse for being late to work; 2) expectation that you will come in if your commuting coworker(s) can’t make it; 3) your employer might show up on your doorstep if you call in sick; 4) your employer might expect you to work later than your coworkers for the same reason because after all, you can walk home in just a few minutes.
Of course, all of the above is still dictated on whether one’s work involves going to a separate work site. There is a growing segment of the population that telecommute & for those folks, they can live wherever they choose as long as they have access to a reliable wireless network. Of course, the con to that is that unless the network is down you have no excuse for not being at work:)
#29 prash42 on 11.14.18 at 6:04 pm
“Soon enough you get tired of it as you age into your late 20’s and early 30’s and then you want out to the relative serenity of the burbs and their mall amenities nearby.”
-Nope.
I’m 35. Almost all of my friends who purchased RE did so in the GTA. The farthest north is maybe Maple, which is pretty urban anyways.
BTW most bought 6-7 years ago and these teeny tiny rate increases mean nothing.
Anyways, the last thing any of us want to do is commute for hours a day. I watched my dad do that for years. Total waste of time and life.
I’d take smaller and closer to work over a large house and long commute any day. Don’t really care about nature. If I want a slower lifestyle, I can drive north and escape for a weekend or so. But the city is where it is at.
Looks like most of us agree.
MF
My wife and I paid a lot more dough for a place in East York (Toronto) than we would have paid for an identical house in Pickering.
But, we commute 14 minutes a day to work.
Worth every cent for me.
#5 Jag Mann on 11.14.18 at 4:16 pm
Hey Garth,
Do you happen to have a similar map for Metro Vancouver?
//////////////////
I’ll try and help you out Jag.
It’s not like for like, but when I saw the Toronto one my mind went back to this one from September last year.
Part of it discusses whether or not at the end of a 25 year mortgage you are better off by moving out to the suburbs.
A year later down the line you can get a Vancouver starter for under a million and people continue to pour into a Surrey thinking this is their only option.
Like clubbing seals…
M44BC
https://www.citynews1130.com/2017/09/26/daily-commute-may-cost-million-dollar-vancouver-home-city-expert/
This is getting very dark and very serious, very quickly.
“Furious over election losses and the Mueller probe, the President is growing isolated. ‘He’s pissed — at damn near everyone,’ an official said.”
https://www.cnn.com/2018/11/14/politics/donald-trump-mood-pissed-white-house-intrigue/index.html
Trump is in his bunker, and knows that Mueller is about to launch an A-bomb. North Korea is now in his sights after lying to him, a perfect war distraction, he thinks.
Gasoline is cheaper today in most parts of Canada. Fuel up those extra tanks.
In spite of their commuting problems discussed here today, it’s now a great time to be in the distant suburbs. Much safer and easier to get away from.
PREPARE
Time to pack your bags and move to Ecuador Garth!!
Mr. Market is making me nauseous ….
#44 young & foolish on 11.14.18 at 7:07 pm
Mr. Market is making me nauseous ….
——————–
That’s a good time to be buying (as I have!)
**********************************************
Regarding the commute vs price as per blog, I’ve moved 4 times since 2003. Each successive move reduced my commute (one way times):
from 40 minutes
to 20 minutes,
to 12-15 minutes,
to 7-9 minutes,
to 4-5 minutes.
Coincidentally, my quality of life has been improving and a I’m quite certain that huge factor is the near-zero stress from commuting.
My next ‘move’ is to work from home – but then, my wife might not want me aroung all day…
I have a friend who spends at least 2 hour/day commuting from Langley to Vancouver and back, 5 days a week! But he has a large mortgage so not much choice in the matter (at least, that’s what he’d say).
TCC
It’s a shame that this isn’t common knowledge, a long comute is not only expensive but drains the life out of your life. For what, more square footage, manicured lawns and a car dependent lifestyle. For many it’s not a good trade.
#31 KLNR on 11.14.18 at 6:07 pm
“…One thing I remember from living in the burbs – everyone drove their cars into their garage and entered the house from there. little to no interaction with their niehgbours.”
——————————————–
Exactly.
And not solely because of tiny lots, monstrous garages now front homes, replacing large shady porches where people would sit and greet neighbours who were strolling by after dinner.
I have recently done some research on Banking Internationally. I came across a very interesting book by Ray Dalio, the Founder of Blackwater.. His is the most successful Hedge Fund in the World.. .. At any rate, as Credit is Withdrawn, or tightened .. Spending is Reduced and as a result incomes.. We are entering a Deleveraing Stage of the Short Term and Long Term Credit Cycles, .. with spending curtailed, incomes, decrease, and then Assets, follow… Incidently Ray’s book is a detailed analysis of the Great Depression and the recent Financial Crisis… 2008 Depression… He outlines all the Options, available to the Central Banks, to control ultimately spending. There are signifiicant headwinds, approaching in the near future.. especially since my Understanding of Ray’s thesis is that the Bank of Canada, got it quite in correctly, and kept Interest Rates, too low, for too long… The Goverement, is now trying to balance the Debt repaymment over a longer period, as the debts from the crisis are still an issue… The Analysis, also highlights the mistakes, that the Feds are making Taxing the Weathly and Redistributing strategies.. If Ray is correct most of the Policy Makers, have got it wrong.. There are problems, brewing, significant problems.. Even the Analysis of the Psychology of the Market is very interesting… How folks, believe it will get better, or the short bounce in the market we just experienced… RENT, RENT… and reduce your debts… ASAP.
#37 Lost…but not leased on 11.14.18 at 6:43 pm
To FLOP..
Any Richmond BC SFH sales data …..tear downs or new?
I am noticing SFH sales are literally non – existent…many “FOR SALES”….
Older condos and townhomes are selling reasonably well…..new projects seem to be slowing down.
Hey Lost,lots of people hanging on.
Throughout my study I have always maintained that Richmond was rotten to the core and could see some of the biggest percentage losses.
Richmond leading edge in detached just dipping below one million.
Also happening in Burnaby and North Vancouver as well.
East Van is below 950k with some going in the 800s and one for 775k
Here is a Race to million post I recently did on my blog regarding a very tidy and updated house in Richmond.
Enjoy…
M44BC
https://pinksnow103480648.wordpress.com/2018/10/21/race-to-a-million-richmond-editon/
One of the aspects of living downtown GTA is the vast amount of restaurants , bars, clubs etc. So the millennials are out and about enjoying all the benefits. Great life, great socialisation etc.
What are the costs?
Huge costs. Even the cheapest meal would run you $20 plus. If you want to save money , you would sit in your condo box, watch TV or the traffic. Depressing.
At least in the burbs , you have more space inside and more parks to enjoy the outside.
I was on a home visit to a condo where the space was small, and all the senior could do is watch TV and the traffic on the expressway . Most depressing place I had ever seen. I was almost thinking a jail cell would have been more interesting.
As well, I work in the Yonge and Steeles area which is a hot real estate area. The commute to the downtown Toronto via TTC is forever and vice versa . So living downtown and commuting to uptown to my workplace, still in Toronto, would be a nightmare.
I can commute via TTC from my home in Mississauga ( or Go train) in less time to downtown than Yonge and Steeles . But why would I want to go there when I have everything in the City Centre of Mississauga.
Downtown Toronto.. what is the hype?
High stress, swarms of people, congestion, pollution and expensive. Commutes may not be shorter depending where your job takes you.
As well, the condos with no parking. That is another story. No parking for visitors, caregivers , tradesmen as well.
If you are old, too bad if you need nursing help, MD home visits etc.
Toronto is over rated and I fail to see if it is world class.
By the way, Amazon has chosen New York States area, I read the other day. Not Toronto.
Real estate prices are reflective of the greed of speculators who own quite a few condos , hoping to flip and the millennials don’t get it.
Something oft forgotten is if a couple work in opposite areas. That is the case for me and my wife. Seeing as how my wife has carried my children, we moved closer to her work.
Either way, someone was going to have to commute further.
Side note: I get to start work early and leave work early, so I beat all the traffic.
#18 Alex from Edmonton on 11.14.18 at 5:20 pm
———————————————————
I really hope you are taking something that gets you a job right out of school. The amount of people (usually girls) taking english lit, sociology or gender studies all while using student loans is shocking.
#11 MF on 11.14.18 at 4:43 pm
Exactly as I predicted.
Gta is on fire.
———-
Guess which Canadian city more Canadians leave than any other?
It’s the GTA.
Intraprovincial migration of local Torontonians leaving the city is up over 300% among millennials, and up almost 50% among Gen X’ers. The GTA emergency exits are jammed with folks who have figured out what they’re up against.
International immigration into the GTA has been on a steady decline since the mid 50’s and population growth for 2018 will top out at 1.2%.
Translation: folks who have lived in the GTA for a while are getting out of Dodge. The city is 100% reliant on international immigration as the locals want out. Those newcomers will likely join the exodus once they realize what it really means to live there.
TLDR, the only folks that are moving into the GTA are from other countries.
It’s an interesting subject, city versus suburb. What’s equally interesting is the gentrification of some inner city neighbourhoods that have traditionally housed the working poor, who for various reasons rely on lower rents and jobs near their residences. Many don’t own vehicles due to the reasons just mentioned. When the hipsters and developers move into the hood to build all these shiny condos they are forced to move out, and not to the ‘outer suburbs where the equally newer and shiny developments are being built. Only as far as easy public transit allows, and then because their transportation costs increase they may need to lower their allowance for rental costs, perhaps giving up a previous cosy apartment for a basement suite if the neighbourhood bylaws allow for it. The hood changes, sometimes bringing with it new issues that did not exist before. Progress doesn’t always reward everyone and we need to keep our compassion within easy reach. We live in interesting and evolving times. Some of the old models will not longer apply. The wise among us will remember to stay alert, keep an eye on the horizon and ear to the rail, and most importantly keep our powder dry. Enough said.
#24 pay your taxes on 11.14.18 at 5:49 pm
Be a plumber. Better pay. More security. Self-employment. No student loan. – Garth
And maintain a very high savings rate from the outset because the trades are hard on the body. Having entrepreneurial skills and mindset as well could set someone up very nicely. Accountants and lawyers seem to work forever but I don’t know many tradesmen (women are still new to the trades) who make it past 60. Be prepared to spend your “golden” years in a fair amount of pain too.
Source: father was a carpenter and we grew up surrounded by all manner of tradesmen
—————
Sitting in a cubicle is no paradise for your body either. Without fail, the tradesmen I know FAR outlive the paper shufflers who did not do enough to offset all the sitting around. Heart attack city.
The last funeral I attended was for a great uncle of my wife’s. He was a brick layer for almost 50 years, got around great until his death at 95. If you make it this far, everything probably hurts anyway no matter what you did for a living 30+ years prior.
3 dakkie on 11.14.18 at 5:42 pm
Canada’s housing market is imploding, growth is slowing and it will eventually go negative like it did back in the 80’s.
http://www.investmentwatchblog.com/canadas-housing-market-is-imploding-growth-is-slowing-and-it-will-eventually-go-negative-like-it-did-back-in-the-80s/
—————————————————————–
Where will everyone sleep 350,000 new Canadians a year. 2016, there were 387,516 babies born in Canada.
= 760,000 people per. The wrinkles better start croaking !
I live in Owen Sound and commute every day to the big smoke. Commute cost is not an issue since I fly my helicopter into the city core. The trip takes 20 minutes. Having my own private landing pad at queens park is a bonus. I hope I win the next election too.
Doug
@#53 IHCTD9 on 11.14.18 at 7:58 pm
#11 MF on 11.14.18 at 4:43 pm
Exactly as I predicted.
Gta is on fire.
———-
Guess which Canadian city more Canadians leave than any other?
It’s the GTA.
Intraprovincial migration of local Torontonians leaving the city is up over 300% among millennials, and up almost 50% among Gen X’ers. The GTA emergency exits are jammed with folks who have figured out what they’re up against.
International immigration into the GTA has been on a steady decline since the mid 50’s and population growth for 2018 will top out at 1.2%.
Translation: folks who have lived in the GTA for a while are getting out of Dodge. The city is 100% reliant on international immigration as the locals want out. Those newcomers will likely join the exodus once they realize what it really means to live there.
TLDR, the only folks that are moving into the GTA are from other countries.
_______________________________________
Toronto proper is another story.
the growth and gentrification the past 20yrs i’ve been here is insane. I don’t see either stopping anytime soon. sfh in my hood don’t stay on the market for more than a week (unless the price is obviously outrageous). the executives at my shop all lived in the burbs, now are all downtown or close to it. life is good in TO at the moment.
Don’t be silly, the BoC is in control of nothing that matters.
The FED is telling them what to do and for now is follow them. Yes they tried to implement stricter borrowing rules to shake some upcoming reality to the idiots.
Besides rates aren’t increasing at multiples per year and what other choice is there?
-Rent where there are jobs and throw money away
-Borrow big and hope for the best
-Move to Kuujjuaq and work at a PetroCan station
-Live under a bridge
Capital Flight?
There is always lots of talk about how capital will flee Canada for greener pastures.
There is some truth to that.
But in finance, capital has a couple of different meanings. Money is often referred to as capital. But on a balance sheet fixed capital is not money at all but rather fixed assets like land and buildings and mines and pipelines and trucks and all manner of corporate fixed assets.
Despite fearful rhetoric, THOSE assets (with the exception of maybe some trucks and mobile equipment) cannot and will not leave Canada. Cenovus can warn about capital leaving. But it has sunk huge capital into northern Alberta that simply can’t leave. They can turn off the taps on new capital spending. But the existing capital in the ground is there to stay.
@#36 Bezengy on 11.14.18 at 6:29 pm
Check out the taxes you pay in Timmins on a 500k house compared to Toronto. $3000 in Toronto and $9000 in Timmins. The reason is simple. Toronto is subsidized by our provincial government in exchange for votes. We even sold Ontario Hydro to pay for your ride to work. Stop the subsidies and we’ll see business and people relocate to other jurisdictions. Maybe then people won’t have to drive into Toronto if a few businesses move to the outskirts.
https://www.toronto.ca/services-payments/property-taxes-utilities/property-tax/property-tax-calculator/property-tax-calculator/
http://www.timmins.ca/city-hall/budget-and-finance/municipal-property-tax-calculator
______________________________
dude, how many folks paying to use utilities in timmins vs Toronto? It’s all relative. probably get quite a bit more house and land in timmins for 500k
#53 IHCTD9 on 11.14.18 at 7:58 pm
“Guess which Canadian city more Canadians leave than any other?
It’s the GTA.”
-Simply incorrect:
https://www.fin.gov.on.ca/en/economy/demographics/projections/
“Regional population growth
The GTA is projected to be the fastest growing region of the province, accounting for over 65 per cent of Ontario’s net population growth to 2041. The GTA’s population is projected to increase from 6.9 million in 2017 to 9.7 million in 2041. The region’s share of total Ontario population is projected to rise from 48.3 per cent in 2017 to 52.3 per cent in 2041, passing the 50 per cent mark in 2026”
Maybe they are leaving the GTA (or Ontario)?
“Over the past 30 years, net interprovincial migration has not contributed to Ontario’s population growth, with net losses averaging about 1,500 people per year. Between 2003 and 2015, net interprovincial migration to Ontario was negative, largely due to net outflows to Alberta. However, the most recent data shows a reversal of the out-migration trends.”
^Contrary to what you said, and notwithstanding the GTA being the choice for net inflow migration, it looks like the the amount of total interprovincial migration is insignificant at best and a non-factor.
I don’t know where you are hearing this IH, but you are flat out wrong on this one.
Again, expect urbanization to continue accelerating. Expect the GTA to continue booming.
MF
Your article is depressing enough but the photo really freaks me out.
I find it sick.
Living downtown?
Why would I want to live where the riots and race wars are or will be?
We are looking at civil war between right and left.
Seattle is your mirror
look in it
Deplorable Antifa vs Deplorable bikers beating the crap out of each other on the street corner
The true value of living downtown
Now there is Location Location Location
Look to 2008-09 Florida, NY, California for the carnage you will see here,
March Break 2009 I was walking down a beach in Boca Raton area Florida and came across an auction for condos in a waterfront new condo development taht went bust.
Bought 2 for 20K each as the guy with the mike asked if I wanted the rest of the building for 300K.
The guy beside me took the rest for 300K. 15K each
I’m telling you if you didn’t see it you wouldn’t believe it.
TO and VAN will be the same. 1000’s of condos for 20-50K each.
BTW China is in deep crap….
That foreign capital flow thing ain’t working too good now.
#11 MF on 11.14.18 at 4:43 pm
Exactly as I predicted.
…All of us paying rent have been wasting our money with rents so high.
MF
***************
You would be right if the housing super cycle was over but it isn’t. How can prices increase year after year after year without consequences? Immigration?
Just read an article in SCMP last night that rich Asians are now focused on the South east Asia in terms of housing and vacations. Meanwhile back in China, there are approx 50 million vacant homes. China’s housing market was pricked by tougher lending policies and prices are falling quicker than expected causing homeowners to call for government intervention. I believe they want them to stop raising rates. Big country, can’t they just stop if they want to?
Australia is a mess, expect the worst housing problem in 30 years. They are now conceding a negative effect on the larger economy. At first the talking heads said it was only a little problem and a month later it is a major problem.
The global international news is full of interest rate increase talk. De-dollarization is also a hot topic as is the trade war which seems to be kicking in. Chinese manufacturing down, consumer spending down etc.
So yes if the super cycle were over your statement would be true. But what happens if this housing downturn starts to pick up momentum and issues start cascading. Those who over bought or over leveraged could stand to loose a lot of paper equity. A renter doesn’t pay the interest and will not experience all the stress and headaches of a downturn. I loved the city life but a lot of people don’t. I loved int in my 20s and early 30s. You believe people will always want to live downtown, fair enough. But as we age things change, hell i plan on moving to a town that has at the very least traffic lights i can avoid. Nature has never put me on edge but people do. Wait till downtown TO becomes congested with pedestrians, bikes, people, pollution, crime etc.
The 80s were not fun times for many in the housing market at least prices weren’t as outrages as they are today. Life is about perspectives and hopefully your perspective matures over the course of a long life.
“..In truth, that meant 0% in Timmins, Fredericton, Windsor..”
Lol no. Windsor’s Teranet HPI rose 60% in the last four years. The large markets are milked. The RE grift is sweeping through Windsor, London, Peterborough, leaving debt wreckage and new Rona kitchens in its wake.
“Everyone wants to live in Windsor! It’s out of land!”
#36 – Toronto taxes are also lower due to economies of scale and massive density and nothing is $500k
#50 – Mississauga is hell now… so much traffic. Grew up there in the 80s and it was amazing then. problem is, the roads are the same size but there’s twice the number of people. traffic hell.
From my place, in less than 15 minutes walk, I can go to the movies, the ROM, a city park with 2 rinks, 8 tennis courts, a big playground and splash pad… countless coffee shops, restaurants, groceries, high-end stores and I have no congestion or grime in my hood.
Love it here.
I bet you only come downtown during work hours when it is chaos in the core… try a Wednesday night in Yorkville – its terrific
Lucky to be on the very edge of a city, with a subdividable / infill lot, approved by the city.
Agenda 30 densification. Plan accordingly.
We pay the same for a 4-bedroom in a satellite city + one commute to BeeMo as we did trying to cram four grown people into a dirty, weed-filled, two-bedroom on Palmerston. Second spouse telecommutes to D.C. Telecommuting/coworking is going to blow this whole condo thing out of the water, especially if arts and leisure keep fleeing the city, and it could happen extremely fast.
I read this report and I wonder if it’s propaganda for living in Toronto. I made the move to live in Guelph after living in Toronto for 25 years. I work from home now (more employers are offering this as there are real benefits for both employee and employer) . Guess what? Best decision. No commute and I’m able to enjoy my big home, pool and outdoor activities. You guys can keep your shoeboxes.
#67 Don
Just read an article in SCMP last night that rich Asians are now focused on the South east Asia in terms of housing and vacations.
……………………………
Just got back from a 3 month holiday in Asia. It is not just rich Asians it is the middle class too. Ten years ago I rarely saw Chinese tourists out and about. I see them everywhere now, Japan, Korea, Taiwan, Philippines etc. Lots of them. Mostly small groups of 20 something guys. Lots of Koreans too.They have money now and are buying into businesses and condos in nearby Asian countries and holidaying abroad. And good for them. They are seeing how the rest of the world lives. The middle class there is growing, getting richer, and spreading out.
#108 For those about to flop… on 11.14.18 at 10:58 am
The Horn Section of the commentators were a disgrace on Remembrance Day.
I thought they would have at least behaved themselves during The Last Post…
M44BC
“Visualizing Financial Literacy Rates Around the World.
What is financial literacy? The S&P’s Global Financial Literacy Survey defines it as the ability to understand essential financial concepts in making informed decisions about saving, investing and borrowing. The survey asked respondents a series of financial literacy questions. Here’s one example. Suppose you have some money. Is it safer to put your money into one business or investment, or to put your money into multiple businesses or investments? The answer is obvious to anyone familiar with risk diversification.
Top 10 Most Financially Literate Countries (%)
1. Denmark: 71%
2. Norway: 71%
3. Sweden: 71%
4. Canada: 68%
5. Israel: 68%
6. United Kingdom: 67%
7. Germany: 66
8. Netherlands: 66%
9. Australia: 64%
10. Finland 63%
Thanks Floppy,
All of them social democratic countries.
(most of the posters here would call them communists)
With high living standards, excellent health care and a few or no homeless people.
Thinking about Val from yesterday:
Emotional connection aside, I’d sell the condo as it wasn’t a great investment and rent with the boyfriend because he hasn’t married you yet. You can buy a place together after you’re married and not having the condo to take care of gives you a lot of flexibility.
—
Hey, Smokey, did you see a doctor yet? 200/100 bp is a ticking time bomb for a stroke or heart attack. Get a full physical. Your liver probably needs a check-up, too.
I can confirm the accuracy of the graph for Mississauga. I live in Mississauga and work in downtown Toronto and it costs about $320/month (go-train + gas) .
#62 MF on 11.14.18 at 9:26 pm
#53 IHCTD9 on 11.14.18 at 7:58 pm
“Guess which Canadian city more Canadians leave than any other?
It’s the GTA.”
-Simply incorrect:
——-
My info is based on StatsCan’s latest inTRAprovincial migration numbers (we’ll get to the reason for those caps in a minute…):
https://betterdwelling.com/see-ya-local-millennials-are-abandoning-toronto-and-vancouver/
Here is another article based on the same data:
https://www.huffingtonpost.ca/2017/03/01/canadians-leaving-major-cities_n_15080726.html
Here is a historical record of population growth of the GTA, bottom of the page:
http://worldpopulationreview.com/world-cities/toronto-population/
Your link is more about Ontario, and projects growth over two and a half decades, of course the numbers look big.
Your link deals with inTERprovincial migration in/out of Ontario, I specifically stated inTRAprovincial movements in/out of the GTA. Two totally different things.
You won’t be hearing me say Toronto isn’t growing, or that it isn’t the fastest growing city in the Province. I only said that it’s growth has been on the decline for longer than I’ve been alive, and that the locals are now leaving in droves.
I’m going to summarize the info and my assertion:
Toronto is growing, but the growth is slowing (under 1% projected from 2020 on out)
Local gta residents are leaving with huge increases appearing in the data from the last study period, to the current one.
The largest age demographic by far who are exiting the gta are millennials with a neutron bomb explosion flaming mushroom cloud increase of over 300%.
Toronto suffers the largest losses of locals of any city in Canada.
I would expect most folks would not find this so hard to believe with the ultra-long list of headaches and roadblocks involved in living there.
I know you love the big city, just keeping it real yo?
If it makes you feel any better, the area I live in is straight dying out due to old age.
Leased Audis sleep out there too, i bet. I was lucky enough to be self employed, half office & half field work. Will say my aging body is getting tired from lots of skiing, hockey, etc. Finding a balance, I suppose, may be best. Home office a definite bonus.
#58 KLNR on 11.14.18 at 9:10 pm
…life is good in TO at the moment.
————
I’ll bet your buds are not kids, been there a while, got on the property ladder long time ago, 20+ year careers etc..?
Life undoubtedly is good for those that moved in and got established before houses went up, and the job market went down.
300% increase in youth burning rubber to get out. These are the folks that supposedly love the urban environment more than any other age demographic, but they’re bailing.
#74 Ponzius Pilatus on 11.14.18 at 10:27 pm
All of them social democratic countries.
(most of the posters here would call them communists)
————
They were all forced into learning about money because of getting taxed to death by their governments. They had to figure out how to keep enough of their paycheque to put food on the table and avoid starvation.
Makes perfect sense :).
Robert Ash: I have recently done some research on Banking Internationally. I came across a very interesting book by Ray Dalio
Ray Dalio:
https://www.howestreet.com/2018/11/08/ray-dalio-on-the-debt-ctisis-and-navigating-net-worth-over-full-market-cycles/
he says that the present downturn is similar to what happened in the 1930’s.
I’ll say more tomorrow
Recent sale report.
Well someone asked me for more information on Richmond and this long term case just sold, although still up on Zolo, and so let’s see what happened.
The details…
11140 Granville Ave,Richmond.
Paid 1.8 July 2016
Originally asking 2.48
Just sold for 1.69
Probably a 200k loss after expenses.
I’m pretty sure right now they are curled up on the couch with a case of Grandular Fever…
M44BC
https://www.zolo.ca/richmond-real-estate/11140-granville-avenue
https://www.bcassessment.ca/Property/Info/QTAwMDA1V0haVA==
51% of 18-34 think the Bank of Canada is impacting their lives? I didn’t know it existed at 34. What a bunch of blame shifting babies.
On commuting, people at my office that bought cheap yet far are forking big bucks for the 407. Should have rented in Sauga.
Wow, Gartman Letter on oil…
https://www.zerohedge.com/news/2018-11-14/gartman-shocked-what-going-canadian-oil
#24 pay your taxes on 11.14.18 at 5:49 pm
Be a plumber. Better pay. More security. Self-employment. No student loan. – Garth
And maintain a very high savings rate from the outset because the trades are hard on the body. Having entrepreneurial skills and mindset as well could set someone up very nicely. Accountants and lawyers seem to work forever but I don’t know many tradesmen (women are still new to the trades) who make it past 60. Be prepared to spend your “golden” years in a fair amount of pain too.
Source: father was a carpenter and we grew up surrounded by all manner of tradesmen.
—
How many of those tradesman drank a 12 pack of beer a day? It wasn’t the trades that hurt those guys.
I’d argue there’s a much greater percentage of desk jockey’s that die younger than trades guys who actually live a healthy lifestyle.
Walk through most offices and have a look around… those daily birthday “parties” with donuts and cake for your co-workers, followed by the long commute home, do a lot of damage.
DELETED
#75 Long-Time Lurker on 11.14.18 at 10:32 pm
Thinking about Val from yesterday:
Emotional connection aside, I’d sell the condo as it wasn’t a great investment and rent with the boyfriend because he hasn’t married you yet. You can buy a place together after you’re married and not having the condo to take care of gives you a lot of flexibility.
—
Hey, Smokey, did you see a doctor yet? 200/100 bp is a ticking time bomb for a stroke or heart attack. Get a full physical. Your liver probably needs a check-up, too.
….
It was 210 tonight. Had annoying itchy pimple on my back. I reached over to crush it with my dirty finger nails. Got a cramp in my chest. First thought was where did I leave my back scratcher. Second was, oh shit, is this a heart attack..
The next thought, this going to be a shit day for God. He’s got some explaining to do.
It’s how I roll dogs. No fear. Not in my DNA.
Probably stupid way to go through life. But it’s short, 59 years old or 90 years old.
You are all going to die no matter how much salad you eat or how many miles you jog.
I’m going out in a fun forever attitude, never a sacrifice made..
Total win. .
You safe space dogs, the humiliation of nursing homes for you and your kids to enjoy the spectical.
Not doing that to my kids…
#29 prash42
Same idea as me, but more up to date.
Got out of the DT and rented a nice townhome a 1 min. walk from Keele St. station and High Park. Would cycle thru the park to the Humber River bike trail on up to Eglington and back (at least 3 times per week, 30 mi. round trip).
Fast enough to get DT w/TTC and with the peace and serenity of the ‘burbs.
No easy car rentals back then like you have now nor larger condo family units to buy (mid to late 80s – even if they had them, would not have bought as RE market overpriced back then, relative to the times).
Progress, a good thing.
#1 SoggyShorts on 11.14.18 at 4:01 pm
#121 Stan Brooks on 11.14.18 at 3:04 pm
Some[charles nenner] say it[the dow] will go down to 5000.
********************************************
He said the exact same thing in July 2010, and again in March 2014, that the Dow would plummet to 5,000.
Next time you think someone might be great at predictions, simply google their name plus the word “wrong”.
—————————————————
Of course I was being sarcastic, I thought that was clear.
Like this ‘news’:
https://ca.finance.yahoo.com/news/trudeau-says-canada-china-eventual-042511302.html
Do you really need comments on it?
Just look at that clueless smile.
#73 FOUR FINGERS WATSON on 11.14.18 at 10:24 pm
Just got back from a 3 month holiday in Asia. It is not just rich Asians it is the middle class too. Ten years ago I rarely saw Chinese tourists out and about. I see them everywhere now, Japan, Korea, Taiwan, Philippines etc. Lots of them. Mostly small groups of 20 something guys. Lots of Koreans too.They have money now and are buying into businesses and condos in nearby Asian countries and holidaying abroad. And good for them. They are seeing how the rest of the world lives. The middle class there is growing, getting richer, and spreading out.
————————-
It’s not just SE Asia, it’s everywhere.
Until 5 years ago I had never seen a single Chinese tourist anywhere in the Caribbean, but on my last several trips I’ve seen them in parabolically increasing numbers all throughout the Caribbean. Not only that, ten years ago I rarely saw any Chinese where I live… now they have displaced almost all of my neighbors and I am completely surrounded by them. And good for them. They are getting richer and spreading out, yes, but hopefully they reject marxism and embrace “capitalism”. We shall see.
Stereotype much? – Garth
#89 Dolce Vita on 11.15.18 at 3:40 am
Progress, a good thing.
—————————
Not necessarily.
Yeah, kids today are real pussies. When I was in my 30’s building subdivisions in the 80’s I was paying up to 16.75% on a COC demand loan on millions of dollars…..no sweat….I slept fine…..last of the big balls generation ? When I borrowed I had a plan to repay….contingencies, not the whiny whiny whining you hear today from millennials. Note to kids…
Smoking dope rob’s you of your ability to think of anything past your next joint. Proven fact that marijuana thinks your testicles .
https://www.cnbc.com/2018/11/14/cramers-3-cardinal-rules-for-investing-during-a-bear-market.html
Excellent news from Jim, but you have to stay balls in and sober.
.
Buying here in 2011 we just couldn’t believe we suddenly had a huge Victorian home, downtown, with a yard for $160 000. Wandered around our empty home in awe, felt we’d won the lottery. Bought 3 more houses under $200 000 and watched them double in value – counted on the oncoming wave of Torontonians wanting a downtown lifestyle just in a different city that they could afford.
(And that big wave is still rolling in)
We’ve ‘downsized’ into a place we custom built with 3 rental units as income & kinda got it all now, 1km to waterfront and trails, 50m to excellent international restos, galleries, cafes, farmers market.
Still enjoy an occasional visit into TO on the express Go bus, meet friends, spend a day on Wards island etc but wouldn’t move back.
“Nah, it shouldn’t. My first mortgage in the 1970s was 11.75%. When I lost my mind and was initially elected to Parliament in 1988, Dorothy and I were paying 14%.”
Garth it will probably take mortgage rates that are far higher than you paid to restore sanity to the real estate market, government spending and people in general.
Will the process be fugly? Damned right it will be.
Grew up in Sauga and the logical thing was to move out and buy a home in Sauga. Was single at the time.
Work downtown on subway line (Yonge line) and had to spend just shy of 3 hrs a day commuting back and forth. Screw that, moved out to North York where I am not 35min door to desk.
More free time. Don’t own a condo though but a condo townhome so no yard, not detached and no exterior responsibility.
@#11
“You must have a low ignition point.”
Excellent – probably works in FIRE.
Britain entering chaos:
https://edition.cnn.com/europe/live-news/brexit-latest-gbr-intl/index.html
USA in flames – Paradise lost:
https://weather.com/news/weather/video/drone-video-shows-devastation-in-paradise-california-after-camp-fire/
Trump creating democratic disaster:
https://www.nytimes.com/2018/11/14/us/politics/conservative-lawyers-trump.html
Do NOT buy real estate anywhere in major cities now, GVR or GTA especially.
Liquidate as much property as possible, take whatever the market offers.
You need CASH FLOW and LIQUID ASSETS going forward, not real estate.
International, environmental and US military and constitutional crises are right around the corner.
PREPARE.
#94 Hamsterwheelie on 11.15.18 at 6:25 am
Buying here in 2011 we just couldn’t believe we suddenly had a huge Victorian home, downtown, with a yard for $160 000. Wandered around our empty home in awe, felt we’d won the lottery. Bought 3 more houses under $200 000 and watched them double in value – counted on the oncoming wave of Torontonians wanting a downtown lifestyle just in a different city that they could afford.
(And that big wave is still rolling in)
We’ve ‘downsized’ into a place we custom built with 3 rental units as income & kinda got it all now, 1km to waterfront and trails, 50m to excellent international restos, galleries, cafes, farmers market.
Still enjoy an occasional visit into TO on the express Go bus, meet friends, spend a day on Wards island etc but wouldn’t move back.
—————————————————
What city?
Stereotype much? – Garth
“Marxist classes are required for all Chinese university students and president Xi Jinping said Karl Marx was “totally correct” in a speech marking the 200th anniversary of the philosopher’s birth.”
https://www.theguardian.com/world/2018/nov/12/ten-student-activists-detained-in-china-for-supporting-workers-rights
They are all indoctrinated with Marxist ideology, fact.
And, all being empty vessels, they adhere to it? Give your head a shake. – Garth
And, all being empty vessels, they adhere to it?
I don’t know because I don’t speak Mandarin. But my hope is that they came here because they don’t adhere to it.
I see a photo of a porn star holding a bawling (not ballin) president in her arms at the top of this page.
On TV interviews, the first word of every answer was “absolutely” for the last few years, but the first word of every statement has now become “so”.
———————————————–
So, a friend of mine was planning to alter his stressful lifestyle after his impending first heart attack.
He came over for supper one night, and looking like shit, with his wife he returned home twenty minutes later to have that first heart tackle, apparently. EMS brought him back to life on the scene, and again on the way to the ER.
He was on life support in a coma for a week.
After his death, we learned that the first attack kills over half of all recipients.
Plan accordingly, overworked indebted first world commuters.
Maybe those ‘choose life’ billboards should mean something entirely different to you.
#103 Wrk.dover on 11.15.18 at 8:48 am
Plan accordingly, overworked indebted first world commuters.
Maybe those ‘choose life’ billboards should mean something entirely different to you.
———————————————————-
Very dramatic I’d say. This is a big generality. Everyone’s situation is different. You could live next door to your work and be in a toxic marriage that will kill you all the same.
So many factors come into play, like what are your working hours? What do you do? What do you value in life? What type of housing makes you comfortable? Where does your family live? Where does your spouse work? Etc…
I remember when I was a young lad and lived in Etobicoke. I was studying at York University and the subway/bus commute was 1 1/2 hours each way. Dead serious.
The answers are not always as simple as move 5 minutes away from work. Nor does being within Toronto necessarily make your commute easy and stress free.
@#88 Smoking Man on 11.15.18 at 2:32 am
#75 Long-Time Lurker on 11.14.18 at 10:32 pm
Thinking about Val from yesterday:
Emotional connection aside, I’d sell the condo as it wasn’t a great investment and rent with the boyfriend because he hasn’t married you yet. You can buy a place together after you’re married and not having the condo to take care of gives you a lot of flexibility.
—
Hey, Smokey, did you see a doctor yet? 200/100 bp is a ticking time bomb for a stroke or heart attack. Get a full physical. Your liver probably needs a check-up, too.
….
It was 210 tonight. Had annoying itchy pimple on my back. I reached over to crush it with my dirty finger nails. Got a cramp in my chest. First thought was where did I leave my back scratcher. Second was, oh shit, is this a heart attack..
The next thought, this going to be a shit day for God. He’s got some explaining to do.
It’s how I roll dogs. No fear. Not in my DNA.
Probably stupid way to go through life. But it’s short, 59 years old or 90 years old.
You are all going to die no matter how much salad you eat or how many miles you jog.
I’m going out in a fun forever attitude, never a sacrifice made..
_______________________
Momento mori
@#79 IHCTD9 on 11.14.18 at 11:15 pm
#58 KLNR on 11.14.18 at 9:10 pm
…life is good in TO at the moment.
————
I’ll bet your buds are not kids, been there a while, got on the property ladder long time ago, 20+ year careers etc..?
Life undoubtedly is good for those that moved in and got established before houses went up, and the job market went down.
300% increase in youth burning rubber to get out. These are the folks that supposedly love the urban environment more than any other age demographic, but they’re bailing.
_______________________________
definitely some truth to that IHCTD9 but…
majority of mils I know aren’t leaving Toronto, merely purchaseing properties in PEC, Creemore, Thornbury etc and renting in the city. This is how they’ve decided to get skin in the game. Unfortunately this has started jacking prices in any community within a couple hours of TO. Fell sorry for the locals of said communities.
Heck, I live in Toronto’s “Upper Beach” and because downtown real estate is so expensive, my employer is now in “The Junction,” with another move likely when the lease is up in two years. Using a streetcar, the subway and a bus, it takes me an hour to get to work.
If I have to go anywhere in Toronto, even if it’s 1 km, I give myself an hour. This city is so broken.
Today on a money forum:
“I am trying to find a lender for a short term loan. All I’ve come across so far are people trying to get me to pay them money upfront or people trying to steal my identity. It’s sad that they prey on those already in a rough spot.
So I’m wondering if anyone might be able to suggest a legitimate option for such a loan? I don’t have any assets that I can use as collateral, but will have the money for repayment within a month when the refinancing on my house is complete. As my credit cards and LOC are used up (hence the refinancing to improve all this), I’m not in a position to get more credit from a bank or cc, so those options are out.
Thank you”
Ouch
94 Hamsterwheelie on 11.15.18 at 6:25 am
Buying here in 2011 we just couldn’t believe we suddenly had a huge Victorian home, downtown, with a yard for $160 000.
?????????????????
What city/town are you in?
#109 Penny Henny on 11.15.18 at 10:03 am
94 Hamsterwheelie on 11.15.18 at 6:25 am
Buying here in 2011 we just couldn’t believe we suddenly had a huge Victorian home, downtown, with a yard for $160 000.
?????????????????
What city/town are you in?
___
I’m curious too – even my permafrost encased swath of boreal forest could not offer such a deal – even in 2011.
I usually love your photos but that poor child is terrified.
“Be a plumber. Better pay. More security. Self-employment. No student loan. – Garth”
The principle I extract here is “make yourself useful” … and since we all live in houses, we will always need trades people?
As for finances, well this blog has summed it up: Worry about what you can control (get balanced and diversified). Just don’t expect juicy returns for awhile. My grandad says “investing is a long term game”.
New house / condo demand
Paul at 55 asked and requested:
“Where will everyone sleep 350,000 new Canadians a year. 2016, there were 387,516 babies born in Canada.
= 760,000 people per. The wrinkles better start croaking !”
************************************
Those are informative statistics. As for deaths Google says it was 269,000 in 2016.
So net population increase of 469,000 per year.
And Canada has been averaging around 210,000 housing starts per year for at least a decade. So, it looks like the population growth supports the housing starts.
And consider too that each year there must be some houses and apartments / condos that are demolished are allowed to rot empty in a field.
So Cananda may not have been over-building at 210,000 per year.
https://tradingeconomics.com/canada/housing-starts
But in the U.S. they are now building about 1.3 million houses per year. And they were as low as 500,000 in the financial crisis and have ramped up.
So an argument would be that the U.S. has under-built for years? Buffett has made that argument looking at household formations. And remember my rule No. 1 when it comes to Buffett.
https://tradingeconomics.com/united-states/housing-starts
Or perhaps the U.S. population growth rate is quite a bit lower than Canada’s. At a quick look I did not find the figures.
Just took a look and nice homes are still under 200K, and saw a beautiful office building from the 1930’s for sale. The outside brickwork is in prime condition, and all inside is original. Not bad for 275K.
#91 Rates. Remember the Japanese in the 80’s? They seemed to burst out and were suddenly everywhere buying everything. The Japanese credit bubble burst and all the real estate and movie studios they bought were all returned to the proper owners. Now we see China. Boom. Bust Echo, like Yogi Bera said ‘it’s deja by all over again’.
For the Japanese they overextended bad credit loans and the banking system imploded, in China were seeing exactly the same thing, trillions upon trillions have just vanished and Chinese tourists , business ventures , military objectives and retail investments are imploding like a popped gasbag.
The suddenness of it all is shocking the crap out of Asian economies. Tourism is. Tasting resulting in quickly rising layoffs. Condo town purpose built for Chinese tour operators to shaft the hotel industry are black all night. Condo towers built with Chinese retail buyers in mind are desperate with no buyers. In Thailand the government has desperately announce free visa waivers to try and bring the Chinese back. But it’s a bit like the pet cemetery story, you can’t raise the dead with consequences. Malaysia, Indonesia all reporting the same story.. business down by 30% and falling. Tour operators to restaurants are failing daily. Broke Vhinese who just lost their life savings in the stock k market crash aren’t planning a vacay in tropical Thailand.
This brings me to Canada. I firmly believe that people going broke in China will be forced to sell in Vancouver and Toronto, the likely catalyst is the government current clamp down on credit by shadow banks. It’s also been reported that loan shark lenders are being arrested and executed in record numbers. Many have left the country and try to collect debts from cramped shops in Bangkok, the cops are all over them with strict reporting rules on foreigners.
Trump has smashed China in its big fat nose. He’s shown the world that China is nothing but a fat gasbag . I expect prices in Vancouver to collapse as soon as media reports Xie on his knees at G20.
On the commuting front, I agree that the commutes some people take on are far too long, time consuming, and expensive, outweighing whatever benefits there might be to living in the suburbs.
I commute Hamilton to Burlington, which is not too bad. Depends on what you’re used to, but a 1/2 to 3/4 hour commute is something I’ve done most of my live, regardless of where I live.
For a while I was commuting Hamilton to Mississauga or Brampton – 20 years ago. That was too long of a commute, especially in bad weather. Then I almost got killed in a rear-ender on the highway on the way home. Found a job in Burlington and the commute was much better, although it’s gotten worse over the years.
Recently my position with my company in Burlington was eliminated (along with 50 others), and I had to start looking. Being in the software business, many of the jobs are in downtown T.O., or up in North York or out in Markham, or Mississauga. Depending on where, exactly, I might have been able to handle the commute to Mississauga on the 407, at a cost. If I’d had to take a job in Toronto, I’d be looking for a place to live there. That’s the kind of commute that seriously cuts into your time. A friend from my old company who got laid off last year finally took a job in Toronto. He says he spends nearly 4 hours a day commuting. No, thanks.
Provincial Land Tax
The Provincial Land Tax (PLT) is the property tax paid in unincorporated areas of northern Ontario outside municipal boundaries
https://www.fin.gov.on.ca/en/consultations/landtaxreform/
Recreational Waterfront Property Assessment in Ontario
https://www.mpac.ca/PropertyTypes/PropertyAssessmentProcedures
Pink Pumpkins being carved in Burnaby.
Well Playland is shut for the season but these guys have decided to jump back on the real estate roller coaster.
The details…
7260 Sutliff St,Burnaby.
Paid 1.62 April 2017
Originally asking 1.79
Now asking 1.56
So they bought it in April 2017 and had it back on by October for a price that was only ever gonna bail them out plus expenses.
These are the types of cases I have some sympathy for.
Everyone has a story to tell that we’ll likely never hear, but as always the people who could afford to be hurt financially the least, will be impacted the most.
Got cases on my books from 3 years ago,still trying to exit the market.
That’s a hell of a ride…
M44BC
https://m.youtube.com/watch?v=ldk2pLyVZ4c
https://www.zolo.ca/burnaby-real-estate/7260-sutliff-street
https://www.bcassessment.ca/Property/Info/QTAwMDAzVlZRUQ==
Montrealers can now pay their property taxes in up to 11 instalments
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Residents had been asking the city to allow the amount be paid in more than two payments for years
CBC News · Posted: Nov 09, 2018 7:29 AM ET | Last Updated: November 9
https://www.cbc.ca/news/canada/montreal/property-taxes-11-payments-1.4898617
Just an obvious point here…. no bloody reason why you cannot put your business in the burbs. I live in Oakville and work in Burlington. Our business has been here for almost 40 years, like many others. I totally agree living more than 30 mins commute from your workplace is crazy and not worth it in any way.
@SmokingTroll – dude you do not understand life. You are right, we all die and it could come at any time. But, odds are it won’t. People who live healthy do so, so they can keep living excellent, engaged lives into their 80s & 90s. Maybe you win the genetic lottery and are not affected by wasteful habits like smoking and excessive drinking… but odds say you likely die in your 60s or 70s or live your life tethered to O2. Who wants a life like that? And dude, trust me, your drinking is not helping your writing or your thinking. Something to consider.
#91 When Will They Raise Rates? on 11.15.18 at 5:45 am
It’s not just SE Asia, it’s everywhere.
Until 5 years ago I had never seen a single Chinese tourist anywhere in the Caribbean, but on my last several trips I’ve seen them in parabolically increasing numbers all throughout the Caribbean. Not only that, ten years ago I rarely saw any Chinese where I live… now they have displaced almost all of my neighbors and I am completely surrounded by them. And good for them. They are getting richer and spreading out, yes, but hopefully they reject marxism and embrace “capitalism”. We shall see.
……………………………………………………….
Many are in the process of rejecting “ marxism “. It is why they are moving money out of China and investing abroad. China has huge problems that are seldom talked about. The economy is “ capitalistic “ and you can get rich and prosper if you get the right ” permits “. But the political scene is totalitarian and you can get hurt badly by disagreeing. There are many who want to get their money out of China so they buy real estate abroad. They don’t care if it sits vacant or the value fluctuates due to market conditions. They objective was to get the money out of China. Big changes are coming in China, they know it, and are preparing to bail if necessary.
#106 KLNR on 11.15.18 at 9:21 am
definitely some truth to that IHCTD9 but…
majority of mils I know aren’t leaving Toronto, merely purchaseing properties in PEC, Creemore, Thornbury etc and renting in the city. This is how they’ve decided to get skin in the game. Unfortunately this has started jacking prices in any community within a couple hours of TO. Fell sorry for the locals of said communities.
____
I am certain that 99% of mils that leave the gta go against their will.
I’m not far from PEC, and you’re right about the prices – although the local sellers have to be just delighted with how things have turned out.
I think the trend is set for the youth leaving – they don’t want to, they just have to. Can’t earn enough to build a life. The last thing I’d want is to arrive at retirement after a lifetime of work with no hard assets, no liquid assets, and hoping CPP/OAS will be enough.
The Ham in Hamsterwheelie is Hamilton.
And David, 37 years ago I was in your exact predicament, I can’t recall how I got through that next month, but I have kept it all so far.
#117 Fish on 11.15.18 at 11:23 am
….in unincorporated areas of northern Ontario outside municipal boundaries
_____
Ahh yes – the free for all zones where a guy can still do essentially what he wants to do.
There is a very popular YouTube Channel that deals with an Ontarian who built a weekend cabin in just such a zone.
Millions of views, and it’s just vids of him building it, then spending weekends living in it going fishing and hunting with his dog and sometimes his wife. All this with a generous side order of food preparation and philosophy. :)
Direct, from the Horse’s mouth:
All RE markets in Canada are down. Except that Royal Mountain in Quebec.
https://housepriceindex.ca/2018/11/october2018/
Forty-three years ago we had a professional photographer come to the house to take pics of our 1-year old daughter. She was a really shy child who we could not take to the local department stores for the usual $10 photo package. Unfortunately that didn’t work either. When we finally got the pictures, my husband took one look at them, ripped them in half, and put them in the garbage. The photographer had done his best (and was paid for his product) but still our daughter looked afraid.
All these years later I can still see the look on her face and hope never again to see such fright in the eyes of anyone, child or adult. Whoever set-up that shot featured atop this post should have given more thought to what he/she was doing to that defenseless child.
How thousands of people don’t pay a dime in property tax
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Hundreds of communities don’t have property taxes
CBC News · Posted: Sep 17, 2013 5:40 AM NT | Last Updated: September 17, 2013
https://www.cbc.ca/news/canada/newfoundland-labrador/how-thousands-of-people-don-t-pay-a-dime-in-property-tax-1.1856765
109 Penny Henny on 11.15.18 at 10:03 am
94 Hamsterwheelie on 11.15.18 at 6:25 am
Buying here in 2011 we just couldn’t believe we suddenly had a huge Victorian home, downtown, with a yard for $160 000.
?????????????????
What city/town are you in?
??????????????????
I’m going to guess Cornwall.
Bought a townhouse in GVA burbs a few years ago. Have a growing family and will want to upgrade to a detached with more space in a few years. While sales are slowing considerably, there is probably time to cash out and rent for a few years, then buy a house at a 20% (maybe more?) discount. However, it means uprooting the family and dealing with landlords again (some are better than others – hard to ever really know). If our property drops 20% I’m sill not underwater, and a house will be that much more affordable. Hard to pull that trigger.
Does the CMHC track shadow lending? How do we know these high net borrowers didn’t just migrate to that dark corner of the mortgage world.
“..“It’s much more vulnerable right now, and we’re already starting to see some very distressed sales in the Vancouver market where the lenders were private lenders,” said Ben Rabidoux, the owner of North Cove Advisors, an investment research firm in Ontario.
For nearly a year, Canadian banks have been required to “stress test” borrowers to make sure they can withstand a mortgage rate increase. The new requirements were brought in by a federal government concerned that homeowners were taking on too much debt. The regulation means that many borrowers can no longer qualify for as big a mortgage as before, and borrowers looking for a second mortgage are more likely to be turned away…”
https://www.thestar.com/vancouver/2018/11/14/sub-prime-lending-as-well-as-the-risk-that-comes-with-it-is-growing-in-canadas-hottest-real-estate-markets.html
Race to 900k
Here is another Vancouver detached that just sold well below the million marker.
The details…
813 Mclean Dr,Vancouver.
Asking 949k
Just sold for 945k
Assessment 991k
So as you would expect the structure is nothing special, but of note, couldn’t get ask ,no bidding wars ,no stampede.
Take your time and do what’s right for you…
M44BC
https://www.zolo.ca/vancouver-real-estate/813-mclean-drive
Race to 900k
Here is another Vancouver detached that just sold well below the million marker.
———————–
well, you could call it a detached. sort of.
or maybe you could call that a half lot, with a demolition bill, in quite possibly the very worst setting possible in all of east van for a house. trucks ALL day long in that alley. busy . noisy. no neighbours.
pros: close to d/t and a brewery in your backyard.
————-
o/t china tariff pause and the dow bounces 600! wowsa.
just talk.
no deal is remotely near for a long time yet.
dow may resume trek to 20k.
Doug Ford say no provincial income tax for those making under 30,000 per year, Don’t you just want to kiss him!
Also booze sales from 9am to 11pm SEVEN days a week?
Madness. What would Auntie Kathleen say
#123 Wrk.dover on 11.15.18 at 12:14 pm
The Ham in Hamsterwheelie is Hamilton.
And David, 37 years ago I was in your exact predicament, I can’t recall how I got through that next month, but I have kept it all so far.
———————————-
The month interest hit 23.75% actually….
#88 Smoking Man on 11.15.18 at 2:32 am
#75 Long-Time Lurker on 11.14.18 at 10:32 pm
Thinking about Val from yesterday:
Emotional connection aside, I’d sell the condo as it wasn’t a great investment and rent with the boyfriend because he hasn’t married you yet. You can buy a place together after you’re married and not having the condo to take care of gives you a lot of flexibility.
________________________
Hey, Smokey, did you see a doctor yet? 200/100 bp is a ticking time bomb for a stroke or heart attack. Get a full physical. Your liver probably needs a check-up, too.
………………………………….
It was 210 tonight. Had annoying itchy pimple on my back. I reached over to crush it with my dirty finger nails. Got a cramp in my chest. First thought was where did I leave my back scratcher. Second was, oh shit, is this a heart attack..
The next thought, this going to be a shit day for God. He’s got some explaining to do.
It’s how I roll dogs. No fear. Not in my DNA.
Probably stupid way to go through life. But it’s short, 59 years old or 90 years old.
You are all going to die no matter how much salad you eat or how many miles you jog.
I’m going out in a fun forever attitude, never a sacrifice made..
Total win. .
You safe space dogs, the humiliation of nursing homes for you and your kids to enjoy the spectical.
Not doing that to my kids…
…………………………………………………………………
Wow Smoky I bet your grandchildren just love your attitude towards life. See a doctor for more than your blood pressure man.
http://www.bloodpressureuk.org/BloodPressureandyou/Thebasics/Bloodpressurechart
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Race to 900K..these properties look like they belong in a bad neighborhood in Hamilton…what are people drinking or smoking in BC?
For many, it is a lifestyle choice. I enjoy the countryside, lived in it for years growing up. However, I prefer the city with its plethora of amenities. I live in what used to be considered outer suburbia 30+ years ago. Now it is considered inner city, though it still takes at least 40 minutes to travel to the downtown core via transit. Driving to the core can take as little as 20 minutes if done outside of rush hour.
While I appreciate the pros associated with downtown ‘core’ living, the noise level is not to my taste. All the high rise buildings & concrete act to boost the sounds of sirens & traffic noise. Where I live is quieter but still has the desirable amenities provided by big city living & even better, most are well within reasonable walking distance or are readily accessible via transit.
Living in the city isn’t to everyone’s taste. Those who are happiest in the countryside are willing to pay the price of commuting to be there. With luck, many who now ‘have’ to commute will eventually be able to telecommute & the overall quality of life will improve.
#137 AA on 11.15.18 at 4:35 pm
Race to 900K..these properties look like they belong in a bad neighborhood in Hamilton…what are people drinking or smoking in BC?
_ _ _
Bubble Tea apparently.
My commute is at least 30 seconds down the hall, pick up second cup of great, brewed at home, coffee, check out rented ocean view…off to work.
The whole idea of the office is very 20th century. Work at home.
Meanwhile, in an amazing turn around, our rented house sold – no idea on the price but my bet is under assessed – and the new guy wants us to stay on for a couple of years. Perfect.
My own sense is that Victoria and the distant suburb where we live is at the slow end of the melt. As rates rise, the stress test bites and wealth taxes increase, houses are going to get cheaper. A lot cheaper. My lovely landlady had to sell. Sad. My new landlord is betting on catching the knife just right. I wish him all the luck in the world.
And, by the bye, the smart, big, money in the Uplands is selling. Hard.
#131 “Does the CMHC track shadow lending? How do we know these high net borrowers didn’t just migrate to that dark corner of the mortgage world.”
OSFI and CHMC are trying to protect A lenders from the blowup, they will not pay attention to subprime private lending space, imo