We’ll get to the latest dreary Canadian real estate update in a moment. Seems when central banks take the cheap-money punch bowl away, everything turns to crap. First a reality check on what we’ve done to ourselves – in a sparsely-populated country where the average house prices is just shy of half a million dollars. (Double that in Toronto or Van.)
Compare us to the States, where a brief bout of house lust resulted in a national spankfest with apparently lasting consequences. Sit down and grab something secure while you read the following summary of available listings in five major American cities. Here is a summary of homes available for less than $200,000.
Chicago, population 2.7 million. Median house price: $285,000. Number of current listings less than $200,000: 15,416.
Miami, population 2.75 million. Median house price: $385,050. Number of properties now asking less than $200,000: 9,169.
Philadelphia, population 1.56 million. Median house price: $264,000. Number of listings on the market for under $200,000: 8,575.
Atlanta: population of metro region: 5.7 million. Median home price: $315,050. Number of listings currently available for under $200,000: 8,469.
New York: population of metro area: 20.3 million. Median house price: $529,050. Number of properties (within commuting distance of the core) available for under $200,000: 7,684.
Apples are not oranges and the States is not Canada, but our two countries are among the most similar on the planet. So the difference in real estate values and household debt is worth noting. We little beavers have overreached when it comes to houses, accepted epic levels of mortgage financing, and adopting a reckless one-asset financial strategy. Now, sadly for many, it’s coming unglued. This is what FOMO, financial illiteracy and trashy lenders have wrought.
National home sales faded 2.3% over the last 30-day period. Nationally, sales have fallen more than 11% this year, and the decline is accelerating (12.6% in November). Average prices are down over 4% – the first year/year plop in half a decade – but this is just the start. In Vancouver sale prices toppled almost 2% in November alone – the most in a decade. Across this entire frosty land, prices have dropped for six months straight, back to mid-2017 levels.
This is best that CREA’s chief economist could muster: “The decline in homeownership affordability caused by this year’s new mortgage stress-test remains very much in evidence. Despite supportive economic and demographic fundamentals, national home sales have begun trending lower. While national home sales were anticipated to recover in the wake of a large drop in activity earlier this year due to the introduction of the stress-test, the rebound appears to have run its course.”
You betcha. There are more clouds now. The oil mess in Alberta. Rising interest rates in both Canada and the US (another one this week). The silly, pointless Meng arrest. Ottawa’s move to punt the $15 billion Saudi arms deal (cost = 500 jobs in London). The most indebted households in the world. GM. Trump troubles. Meanwhile we’ve allowed real estate and the entire FIRE sector to grow bigger than manufacturing, larger than oil & gas, and constitute a quarter of the economy. If this turns recessionary, it’ll be utterly home-grown. Remember the blog motto: the greater fool is the fool who follows.
That the real estate market would disappoint is a given. It’s taken only 2,300 posts here (plus 585,900 comments) to make that point. Sellers today can still do well. Buyers are rolling the dice. And the entire industry is scared. They see what’s coming.
The Ontario Real Estate Association says governments have launched “a war on first-time homebuyers.” The boss of Mattamy Homes calls the 2% stress test “kind of overkill,” given the market’s collapsing state. Housing economist Will Dunning says government bubble-busting measures are “ridiculously dangerous to the economy.” The president and CEO of Mortgage Professionals Canada, Paul Taylor, is urging a 5% cap on the stress test, to exempt renewers form it, and a return to 30-year mortgages with their cheaper monthlies.
MPs and T2 are under big pressure to relent, and probably will. The Bank of Canada needs new Depends thanks to the trade war, Alberta’s oil cap, the Bay Street stock plop, the explosion in family debt and now the property unwind. As reported here, the pace of rate hikes will slow and shudder to a halt. Alas, the frog has already croaked.
So the latest housing stats, released this day, are both a confirmation and a warning. If all your net worth’s in one asset, I hope at least you love it.
133 comments ↓
Hi Garth,
I know your hatred of condos well. Does this include detached or townhouse condominiums or is your disdain reserved for highrise, “box in the sky” condos? I assume you own the land under your condo if it’s located on hard land, but I no nothing for sure!
No hatred. But why would you buy something you can lease for half the true cost, that has monthly overhead beyond your control, no development potential, will eventually produce big special assessments and affords a precarious lifestyle depending on who lives beside, above or below you? And, no, you don’t own the dirt but are part-owner in a condo corporation that does. You also own its liabilities. – Garth
My Debt (Household & Mortgage), Net Trade, GDP and FDI study is up with the latest data
http://www.chpc.biz/household-debt.html
Household debt at record levels.
Net Trade has been negative in 8 out of the last 11 prints.
FDI-FDO is chronically wide as it started to spread 20 years ago.
GDP ticking up, but what happens as the 3 month data lag catches up to what is happening on the street with FOMO deteriorating?
Garth, I just feel like with Trudeau’s leadership Canada is becoming uninvestable. (I suppose the world agrees wit the latest selloff) Any point in adding to Canadian assets or just move those monies to US/Intl where they actually welcome business.
https://business.financialpost.com/personal-finance/mortgages-real-estate/toronto-new-home-prices-post-biggest-12-month-drop-since-1996
This is currently happening in Edmonton.
They built a townhome development near me, and they were going for about $320k in 2011. The resale asking price was about $300k. In 2015, they built another one around the corner, and those ones were nicer, and they were priced at $300k new. That pushed the older built units down to about $250k. There was a big development planned in 2015 across the street from these, buut after the oil price crash, they put it on hold, so it was a blocks-long stinkweed infested mudhole until this fall. Originally, they were advertising new townhomes in there ‘from the low $300s’, with some as cheap as $290k. This fall, the signs went back up, but now they are advertising new, unbuilt townhomes ‘from the low $200s’.
The original townhomes are now listed around $220ish, with the middle ones trying to get $250k. Once the new development breaks ground, that will push the prices for these down to $200k for the middle ones, and the oldest ones might get $180k. After all, who wants a 10 year old townhouse fort the same price you can pay for a brand new one? And these ones weren’t slapped together in two weeks during the oil boom, either.
The house prices won’t start from the bottom or middle in pre-existing homes. People don’t lower prices unless forced, but big developers paying property taxes out the nose on undeveloped land are slashing prices like crazy to get them off the books before they go bankrupt like Reidbuilt.
All over Zolo are unfinished homes and undeveloped lots for sale by builders desperate to liquidate.
~Flu
2% rates coming your way in 2020. Just in time for another run.
Rates will never ever be normalized again.
Maybe a debt jubilee is around the corner.
“But why would you buy something you can lease for half the true cost.”
Sadly no longer the case in my hood…
I can rent a tiny high-end box or a larger POS, but no sane middle of the road rentals at a reasonable cost any longer. Rents are up 50% over the past 3-5 years. I did not see that coming.
Without capital appreciation, renting is the better financial option. So consider yourself smart. – Garth
What Caused the U.S. crisis
I can’t disagree with the substance of the Post today but would quibble with the cause of the U.S. financial crisis.
Compare us to the States, where a brief bout of house lust resulted in a national spankfest with apparently lasting consequences.
*************************************
I believe it was caused when institutional investors (world wide and most ironically including banks themselves) in mortgage securities got burned due to defaults and then capital losses due to panic selling of said mortgage securities.
The mortgage securities had been sold to fund mortgages but the mortgage brokers selling on commission used the funds to let liars, bums and the unemployed buy houses often with low teaser rates that would reset higher.
There was indeed housing lust too as easy money pushed house prices up giving everyone gains. At first it all worked great because those you could not pay the mortgage simply sold the house at a gain.
Eventually the gains stopped and the bums, and liars and unemployed defaulted on the loans and this triggered a death spiral of falling home prices leading to financial crisis and recession leading to unemployment and more and more defaults.
That is my understanding. So yes to house lust but the bigger issue was lack of rules around collecting fat commissions for helping bums, liars and the unemployed get mortgages.
We never had quite such a rotten system in Canada. But we did have awfully cheap mortgages that reset in 5 years or less so maybe that will cause a lot of trouble too.
Nice essay, but I did not comment on the GFC cause. Only the US housing market. – Garth
Thanks Garth,
Totally spot on! I just listed my place and am following your opinions on the RE market carefully.
This housing price decline is a ‘nothingburger’. If you purchased in the last 18 months you might be down some but everyone who purchased before this is sitting pretty with huge tax-free capital gains. Some only using 5% of the home’s value to secure these massive wins.
The fact that real estate is 25% of the economy basically guarantees the government will do anything to ensure home values stay stable.
– They will punt the stress test. , t
– They will increase the amortization rate to 30, 35, or even 40 years in necessary
– They will drop the short-term rate
– They will keep the tap open for high-net worth migrants or investors to keep flowing in the home market (not to be confused with the zero-net worth migrants struggling at the southern US border or southern Quebec border).
Wow………..extreme dark clouds forming across all asset classes around the world. Housing, stocks, ETF’s etc… Asset deflation, price inflation, continuing rising interest rates, trade wars, tariffs and more tariff threats, record public corporate and private debts all over the place, political uncertainty, lions, tigers and bears Oh My!
As far as investments go, keep trying to catch a falling knife no matter how many times it cuts you and continue to buy more! It won’t goto zero and it will probably go lower before it washes out but this is how you create real wealth. As Garth says, “Don’t sell in a storm” and “Ignore the noise”, is right on the money. Fight back your human nature to panic and sell and when you have more capital available to invest KEEP BUYING MORE! Think of companies like it was your house. Do you consider selling your house every time things get rough and real estate loses value? Or do you tough it out and wait for better conditions? Do you appraise your home every year, or worry about whether or not it’s worth more this month than last? After all, if you’re not selling and you don’t need the money, who cares!
according to the oecd denmark is the most indebted (household) country in the world. year after year danes are ranked the happiest people on the planet therefore canadians should go into more debt and be happier.
https://data.oecd.org/hha/household-debt.htm
Inventory of homes for sale is soaring in : Las Vegas
Honest question for you Garth.
Do the liberals really think they can oversee the decline of manufacturing, the oil industry, and make economic decisions based on social justice…. without the country failing?
400k of my London neighbors are asking.
” But why would you buy something you can lease for half the true cost…”
True, if the premise were true. Point is, you can’t in some places. When the total of your monthly mortgage interest +property tax +condo fees is still <than rent for the exact same or comparable apartment, the only downside to owning is alternative investment opportunity cost.
I wish Mr. Market could attest to that opportunity cost. But it does not. So it might be useful, some days, to read something here more interesting, more informative, more novel, and more convincing in favor of those alternatives rather than the same old, same old.
“Ottawa’s move to punt the $15 billion Saudi arms deal (cost = 500 jobs in London).”
Ottawa should punt the LAV sale to Saudi Arabia. Those LAV’s will be used to run over women and children in what’s left of Yemen as soon as they arrive.
Remember the outcry in Canada when Syrian refugees came by the tens of thousands to Canada after we sent our CF-18’s to help bomb them back to the Stone Age? This country will not support humanitarian assistance after the conflict is done but we are quick to grab a chair at the big boy table when selling weapons to facilitate it.
“Without capital appreciation, renting is the better financial option. So consider yourself smart.“
I dunno dude. Barring serious recession – which you regularly rule out – and potential for dangled housing goodies from the feds, I’m not so confident that capital appreciation is on the way out. Not here anyhow.
If I pump in my current rent vs house prices from 3 years ago into a rent v buy calculator, it would’ve screamed buy. Instead I pumped in my much lower rent, which screamed stay put. The outcome is not devastating – I am indeed richer in the interim – but something for others to think about – if you get kicked out of your rental, your rent may increase more than you ever thought possible. So choose wisely.
Well, we’re at the end of Ray Dalio’s Phase 3 of his “The Phases of the Classic Inflationary Debt Cycle”.
You can pretty much check off every box of this phase for Canada.
Phase 4 not well named:
The Depression (as in inflationary deleveraging).
Some of the signs of this phase have already started (paraphrased):
-Nominal short rates rise and the yield curve inverts.
-Equities in local currency terms fall.
-Debt service rises further, further squeezing
incomes and spending.
-etc.
It does recover: Phase 5 Normalization.
Dalio’s phases created by averaging 27 inflationary deleveraging’s in which there was a lot of debt denominated in foreign currencies. Canada’s Dec. 2017 External Debt as a % of GDP = 115.2, was 57.4% in Dec. 2007.
A lot of pain still to come. Futures, dreams put on hold or destroyed. Creative destruction ensues.
It’s the in between part that’s so very hard to take whether you are affected by it or not.
Buonanotte and a sobering Blog today Garth.
Markets are a crap shoot.
TSX REITs are either being massively shorted or sold off like crap. Several dividend paying sectors are under heavy selling pressure.
Looks to be a concerted effort by a group of investors, maybe hedgies. Remember Garth, you mentioned here overhearing some group talking about how they would short the Canadian real estate bubble? Well, looks like they found their way and they are succeeding.
Trudeau is not the right man for the job. What we need now is strong leadership who works with the banks and the CB to instill confidence and make the TSX his priority. Just announcing that Canada’s government is ready to fight and support the markets, would get the job accomplished. Leadership should make Canada’s finances a matter of national security.
We need to get rid of Turdeau and quick. He’s a total disaster at this time, even at the best of times this guy is clueless like a drama teacher.. oh wait. He’s just plain useless.
#10 Terry on 12.17.18 at 5:12 pm
Do you consider selling your house every time things get rough and real estate loses value? Or do you tough it out and wait for better conditions? Do you appraise your home every year, or worry about whether or not it’s worth more this month than last? After all, if you’re not selling and you don’t need the money, who cares!
——-
Well let me address that. Home prices crash once or twice a generation. A correction is slow motion event taking years – witness the date of Garths book. And at least you can live in until it recovers.
Stocks flash crash 3 or 4 times a year, correct monthly and have a catastrophic failure every 20 yrs or so that take the next 20 to recover – witness the TSX over the past decade. Totally dead money.
Study some history. Terry is totally correct. – Garth
I’m not so sure. My Plunge-O-Meter table is only a slice of the market…
http://www.chpc.biz/plunge-o-meter.html
…but relative to single family detached houses, Edmonton peaked in May 2015 and SFD prices are only down 6.6% while Toronto SFDs peaked March 2017 and are down 17% and the trend globally in housing markets is generally down so I would not be comforted by being only “down some” especially if I was ‘weak hand’.
Remember those “massive wins” are on paper only if not crystallized. Meanwhile whatever is sitting on the land is depreciating.
Timing is everything eh?
Historically what is the average 5yr fixed rate? 6.5%?
Why don’t they use that as the benchmark to cap what people have to qualify at? I mean, if that is the historical average, that (average rate historically) seems like a reasonable enough bar to qualify at.
Data expert reveals the harsh reality of Australia’s housing crisis | 60 Minutes Australia
https://www.youtube.com/watch?v=T3ZrjqCQRog
it’s a world of junkies.
Maxime Bernier 2019 is all I have to contribute today!
capitulation by the FED will get the gold bugs going and an unfazed FED.. well.. much more fun shorting markets than going long.
Will Dunning is priceless…
Nothing said about Bubble growing policies that GREW the bubble.
Housing isn’t the ONLY thing going down quickly…Everything is including your stocks.
Glad I went short early last year and still am for quite a while. We haven’t seen anything yet, the party is just getting started.
Thank the USA FED for this mess. Both up and now Dooooowwwwwwnnnnnn.
#19 not 1st
Depends on your age, lifestyle as well don’t you think?
If I was in a stable government job at 30 with a new family yes. At 65 plus with family gone, may be an entirely different story.
Far too much GENERALIZATION often on posts here.
Everyone’s situation is different and unique to them.
Some of those US metro areas listed have sections I would not even drive through. Is that where you find the sub-$200k homes?
Was in Philly once upon a time. Good neighborhoods, but also many very scary areas. Cars on the street shredded of any value, nobody cleaning it up… Try driving around Temple University, east of, and tell me what you think…
Garth is this for sure this time???? Are we for sure on the cusp of a major correction in both the house and condo Market in the GTA in Toronto?
The significant other is convinced condo prices are going to rise and then she needs to get in orbi price though forever!
I have been fighting this thinking for a very very long time say 7 years. Every year the house prices go up condo prices go up and then there’s a little drop. Then thanks recover and then prices go up again.
I know you’re right… because there’s nobody in Toronto that makes the kind of income that can afford a basic condo. So, not arguing with you here. But I just can’t seem to sustain the same argument and logic well our financial investments correct negatively.
I don’t think the world has ever seen anything like this before it’s totally surreal.
After having lived in 5 different detached houses over the years we are currently in a condo that’s about a 10 minute walk from our last house. We are now about a 5 minute walk to our bank, dentist, doctor, restaurants, parks and full service grocery store and mall.
Our original choice was for a townhouse but almost all that we saw involved driving to those places mentioned above.
See if you can find a concrete building with concrete exterior walls and floors and interior walls separating the units. Hard to find and they will probably be a little older but they pretty much guarantee peace and quiet inside. Our building is also age restricted to 55+, no rentals, and no smoking. Perfect. Been here for 3 years and love it. Basically we’re a community of friendly retired types.
Taxes and hydro are a small fraction of our last house and the monthly strata fee of $476 covers heat, hot water, basic cable and gas for the fireplace.
So, for all of you of a certain age condo living can be great.
re: #9 Nothingburger on 12.17.18 at 5:11 pm
i think he/she is on to something
every political party will ride the real estate train
real estate is too much a part of the economy to ignore and it gets votes, government policy will be adjusted to milk it till it destroys us financially in the end
Yes….Garth…”the greater fool is the fool who follows”
But those leaders ….the real estate cartel……. are still selling….new Condos in Etobicoke by Lake Ontario at $800,000 for 2 bedrooms and 2 bathrooms 800 square foot units in high rise towers under construction….same for used condos at Bloor Street West and Islington Ave.
Do the math…..$1,000 per square foot!
When will these developers stop being so Greedy.
Now Mattamy….and other big developers and large concrete construction companies…who we now know funded F2’s (Ford 2) Ontario Conservatives lap dogs in the last election are waiting for Doug Ford to put them in powerful government boards (like the Ontario Provincial Police, family friend of the Fords) to direct government policy in their own self centered belief of…..”make us richer so that the fools have no other choice “.
Of course house horny folks can go on….. STRIKE….and not buy……and not join the greater fools who bought the way overly priced housing…during the last two years.
Succesful tribalism depends on holding back truth and reality until it is too late…..and then the leaders of the tribes… will blame the Federal Government because the followers were not smart enough to listen to Garth but rather put their trust in the Real Estate snake oil salespeople.
When there is price fixing…..the buyers always lose.
No integrity in Doug Ford ….which doesn’t surprise us in Etobicoke who knows the Ford family…who many neighbors have known for a long time that the Fords have been “buddy, buddy ” …with some Etobicoke police….now it just been made more public.
Doug Ford you can’t say that you know that your friend has better credentials than the other candidates and then say you did not interfere in the selection process of the Ontario Provincial Police …..Daaa!
S&P 500 hits 14-month low on economic jitters ahead of Fed meeting
https://finance.yahoo.com/news/wall-street-opens-lower-growth-144050178.html
It was that windy in Vancouver today even all the beautiful people with Botox could manage a smile…
M44BC
“How Much Money Americans Need for Economic Security in Every State.
1 out of 3 adults in the U.S. is economically insecure, meaning they don’t have the resources to provide for housing, food, transportation and childcare.
That is according to a new report from the Institute for Women’s Policy Research (IWPR), an advocacy organization designed to promote research benefiting women and their families. We adapted data from the IWPR’s most recent report on economic security for single adults and two working adults with two small children two create two heat maps. The results indicate which states and regions are the hardest places for working Americans to get by, and how having children can put economic security increasingly out of reach.
Financial security is obviously much easier to achieve for single working adults than anyone else. There is literally only one mouth to feed. But that doesn’t mean that economic security is attainable for everyone across the country. There’s a clear cluster of states around the Northeast led by New York, where an adult would need at least $44,088 to get by. The situation across the Midwest is comparably much more manageable with only a couple in the middle band of expensive states. South Dakota is boasts the lowest threshold in the country at only $24,648.
Going to the other extreme, California ($42,060) stands out on the West Coast. Hawaii takes the cake as the most expensive state in the Union ($45,456), not counting Washington, DC ($50,508). In other words, if someone working in Washington, DC were to move to South Dakota but keep the same job, he or she would earn double the amount needed for minimal economic security.
The situation is a bit more complicated for two working parents with one infant and a preschooler. The Northeast remains prohibitively expensive with young parents in New York needing to earn an astonishing $101,496 just for economic security. The threshold for Washington, DC meanwhile jumps to $124,320. It’s the same story on the West Coast too, where working Californians with two children need to make $94,992.
But here’s the real story. Economic security becomes much harder to obtain in several other surprising states too, like Minnesota ($84,696), Colorado ($88,512) and even Montana ($70,224). In many of these places, economic security requires more than 3 times as much income for two parents with children as it does for single adults. If you get married and start having children, you better hope you also start getting huge raises at work too.”
Visualization
https://howmuch.net/articles/income-household-economic-security
As we head into 2019, it will be proven ‘that the real estate market is too big to fail’ and that the ‘government will do everything possible to keep the game going.’
These two perspectives have been mercilessly mocked, as these statements are cradled in a simplistic understanding of political and economic forces. They are espoused by shrills, pumpers, and one asset bag holders. And yet, these statements will be true.
The rate increases are on hold, and if the bears are lucky, they might increase at a snail’s pace as to not upset the market. Canada has only increased rates 1/2 the number of times as the US at the strongest economic time, despite that historically we have always walked pretty much the same line.
And we know that as we head into the 2019 federal election, the current government will remove the brakes on the market and ease the supposed pain and suffering caused by B20. Of course, pain and suffering is relative after the hottest markets have gone up 50% in a few years, and sales are down single digits with price decreases barely noticeable.
Before accounting for today’s stock market slaughter, balanced portfolios are down 6% with the gains of 2018 completely wiped out. We are back in 2017 territory now with no Santa rally on the horizon.
Once again, conservative, prudent savers and stock market investors have been outdone by the herd that leveraged their pitful salaries into massive leveraged once is a lifetime real estate gains
And the future holds no silver bullet for popping the market, especially since the best efforts to do so – namely rising rates and B20 – will be political road kill next year. Game on for real estate.
Hardly. Your anonymous comment is simplistic pumper talk, not realistic conjecture. Rate increases will modify for reasons unrelated to housing, and any public policy decisions which encourage more household debt are unlikely. This asset class has seen its best-before date pass. – Garth
Love it or list it BABY
RATM
@#34 Game on for repo men
“sales are down single digits with price decreases barely noticeable….”
+++++
Tel that to someone who bought in 2016 and just sold for a loss.
Tell that to someone who is leveraged o themax and needs to renegotiate their mortgage in 2019 and “doesnt qualify”……
Go pump real estate at a ReMax convention.
Wrong audience here.
I bought another 100 shares of General Mills today. Kids age 1,4,8 keep asking for Cheerios at multiple times per day, 7 days a week. It is their goto snack. All 3 ask for them independently. I think it’s a good business.
Everything I have said so far has come true. However the best advice is yet to come.
If you have just completed law school become a divorce lawyer. You will make a killing in the GTA in the next 5 years.
For those that don’t know how the law works, the 2 lawyers discuss the value of the total assets and then work out a plan to drain a predetermined amount over a specified period of time. The court thing is all an act.
#9 Nothingburger on 12.17.18 at 5:11 pm
This housing price decline is a ‘nothingburger’. If you purchased in the last 18 months you might be down some but everyone who purchased before this is sitting pretty with huge tax-free capital gains.
The fact that real estate is 25% of the economy basically guarantees the government will do anything to ensure home values stay stable.
– They will punt the stress test.
– They will increase the amortization rate to 30, 35, or even 40 years in necessary
– They will drop the short-term rate
– They will keep the tap open for high-net worth migrants or investors to keep flowing in the home market (not to be confused with the zero-net worth migrants struggling at the southern US border or southern Quebec border).
_________________________________________
Huge tax-free capital gains? Only if you sell, and even then, you will only get what someone is willing to pay, which is probably a whole lot less than what you ask.
The government doesn’t care about you, so the only guarantee is there are no guarantees.
The stress test is here to lower risk for lenders, just because people stop buying houses doesn’t mean it goes away.
The short-term rate will not decrease, rates are not yet close to normalizing. Again, just because people have stopped buying real estate doesn’t mean rates suddenly need to go down.
The tap may still be open for high net worth individuals, but what makes you think Canadian real estate is a good investment right now? Anyone with brains and lots of money will probably be looking to park cash elsewhere.
Garth,
I was flipping channels on Sunday, and this Metro Roberts show came in from Buffalo. 6.5 acres 4 bedroom ranch in Evans, NY $65,000 USD! 1.3m Toronto houses $119,000 USD. Mansions for $200,000. It was interesting to see. Yeah…I know Buffalo. But come on, where in Ontario can you get 6.5 acres with a 4 bdrm for under $100k? We’re nuts.
#37 Greg
Um you do know that GM doesn’t care about the health and well being of said kids right – you do know of their ties to Monsanto right – ethically evil
RATM
CRIED LIKE A BABY!
While having coffee with a real estate agent, I asked if all was well in his world? What with sales in decline and interest rates moving up. His reply, yes, the real estate market may be bad, but I slept like a baby last night, I woke up every hour and cried.
I suspect for a lot of real estate agents, mortgage brokers and assorted lenders, life is about to get a lot harder than it has been under the sponsorship of the worlds central banks. To make matters even more complicated, many real estate agents are talking about tinkering with their trading style. So many of the old strategies have underperformed and sellers are starting to get a bit antsy. I am hearing a lot of “maybe my style just doesn’t work anymore” rather than ” I am confident this will be my time to shine”. Real estate sellers, beware of any unannounced style drift by your real estate agent. History is replete with examples of ex-real estate agents that indulged in it. In the age of universal deceit, telling the truth is a revolutionary act. You can trust me as the teller of truth in the land of gypsies, tramps and thieves.
We’re not alone….check out our Aussie cousins
https://www.youtube.com/watch?v=smPR0s2W-Ck
6 common sense on 12.17.18 at 6:14 pm
-Not really. I’ve posted this a few times, but all government jobs since about 15 years now are contract. Thank the baby boomers for screwing the pooch on that one as usual.
#6 Bobs ur uncle on 12.17.18 at 5:07 pm
And this is the problem. Soaring rents ensure that there wil always be a demand for condos. Paying >50% of your pay toward some “landlord” is completely unpalatable for most.
This is the same old story. We heard about all the storm clouds in 2012, 2013, 2014 etc ..and after a brief halt prices always marched higher along with rent.
When was there ever a time when everything was perfect? Urbanization is accelerating not slowing down. I Expect continued capital gains on condos and renters still left behind.
MF
You have to pay for your own insurance and healthcare in the USA, but you wouldn’t have police kicking down your door for offending the Wynne Liberals and her snowflake foot soldiers.
I know of someone who actually had a SWAT team kick down his mid-town Toronto door, because he criticized the Toronto District School Board and the way it was forcing an agenda down children’s throats.
Prove it. – Garth
MPs and T2 are under big pressure to relent, and probably will. The Bank of Canada needs new Depends thanks to the trade war, Alberta’s oil cap, the Bay Street stock plop, the explosion in family debt and now the property unwind. As reported here, the pace of rate hikes will slow and shudder to a halt. Alas, the frog has already croaked.
As if there were a painless way out. Which there isn’t. In 2006-2008, the US housing market popped, the US Fed dropped interest rates to zero. It could do this because, the US controlled the world’s reserve currency and rates were 5%. Still there was lots of pain. This is not a theory. It can be researched and verified in any level of detail. One source is the housingbubbleblog.com
http://thehousingbubbleblog.com/index.html
Another yuge advantage the US had, was that the standard mortgage was 30 year, fixed. Which means that the interest rate did not go up for 30 years. In the US, if you had a standard mortgage and you could meet the monthly mortgage payment, you were alright.
Which brings us to Canada. December, 2018. The Superintendent of Financial Institutes, hand-in-glove with the banks have put in place the stress test. It has been successful, the market has cooled but not collapsed. The banks have paid a price. They’re writing fewer mortgages. They’re losing market share. Bill Morneau, the Minister of Finance knows this. Knows it from the top to the bottom. Like a man who has spent his life working in finance. Now is his time. To tell it like it is.
Tel that to someone who bought in 2016 and just sold for a loss.
—-
why would anyone do that…other than a flipper
#37 Greg on 12.17.18 at 6:54 pm
I bought another 100 shares of General Mills today. Kids age 1,4,8 keep asking for Cheerios at multiple times per day, 7 days a week. It is their goto snack. All 3 ask for them independently. I think it’s a good business.
——————————–
Seriously? I hope, for your childrens’ sake, you make a better effort at a more nutritious diet plan. Cheerios are mostly sugar and refined carbs – a daily consumption are a near-certain path to diebetes/obesity.
TCC
********************************************
“The president and CEO of Mortgage Professionals Canada, Paul Taylor, is urging a 5% cap on the stress test, to exempt renewers form it, and a return to 30-year mortgages with their cheaper monthlies.”
—
I sense fear! About time I say…
TCC
A 2% drop in house prices is hardly Armageddon. For GTA/YVR where properties still list for one million plus, it amounts to $20,000 off per million. Cumulatively over the past six months the price drop might be what? $100K? $120K? While this might cause sellers to sob into their morning cuppa as they see possible profits waft away, those who do sell may still clear more than what they paid – just not as much as they might have received had they listed/sold a year ago.
As for T2 & MP’s vs. stress test/interest rates, I thought that wasn’t supposed to be under their control? Or is that just another fairy tale & the reality is that yes, the government really does dictate things like the stress test & interest rates?
Yet more lumps of coal in the market stocking today. One headline touts concerns over global growth as the reason. Chicken Little is having one heck of a winning streak these days. Plenty of investors are likely to end up with more than a few feathers missing before things settle down. This may explain the ongoing shortage of pot – lots of folks changing their reality to something more mellow:)
Its not your fathers stock market anymore or even the one Garth was talking up 10 yrs ago. The thing is fragile, susceptible to black swan events and manipulated with QE and rates.
Now add in HFT, giant hedge funds, cocky quants, foreign hackers, impulsive tweeters and now Artificial Intelligence is stalking it, isn’t a chance in hell I would put a dime in that thing.
T2 said Quebec is not interested in a pipeline. Fine. I’m thinking of suing the Quebec government for producing massive quantities of asbestos and setting them loose into the environment over the past 140 years.
I’m sure T2 has no interest in apologizing to the families or paying reparations for all of the people poisoned by asbestos.
It’s T2’s cowardly way out; do the electoral math to see who you can throw under the bus. Ever has it been so.
How are preferreds, bonds and pretty much every N American equity doing?
Working people who rolled the dice and leveraged up on Real estate did just fine in Ontario and BC these past 15 years. No more reason to sell your house and go to a rental than to sell your investments and go to cash.
#19 not 1st on 12.17.18 at 5:31 pm
I love it when you generalize on ‘stock markets’ and then give as an example the crappiest of it – TSX.
Stock market is generally the representation of the economy, our is crappy, based on housing and financial/based on housing, no one outside the mental institution is interested in investing here, the sheeple has no money, just debt, so the market tanks.
============================
#34 Game On For 2019 on 12.17.18 at 6:36 pm
As we head into 2019, it will be proven ‘that the real estate market is too big to fail’ and that the ‘government will do everything possible to keep the game going.’
I absolutely count on that approach, the lemonade stand owners, horse face daddy’s boys french villa guy and wild hairdo empty head socks boy truing to ‘rescue the economy’. This is not like buying the media with stolen tax money (no cheating there, liberals considers federal tax money as their party’s money).
This is why I expect the loonie to tank.
The best is to enjoy it watching from the sidelines (as Dolce Vita is correct, an inflationary depression is in the cards for Canada).
No retirement for entire generation, maybe two and no jobs for another two and the whole economy in ruins thanks to the greed of the lenders and the real estate cartel. Tragic but hey, that is life, people brought it on themselves. Suck it up and move on (A Canadian saying).
I really enjoyed the news about the rents at Jane and Finch – 2 k for a dump + utilities in the crime capital of GTA.
You know what, I am looking for it to become 3 k per month for a dump + utilities + property taxes. The economy is booming after all.
Or 2.5 k for a basement ‘apartment’.
And of course the ‘statistics’ will measure no inflation.
Silly people. Canada is a great country therefore Canadians should pay more to live here.
#34 Game On for Real estate.
—————
Bang on post .
There seems to be a reluctance of our blog host to acknowledge what is evident to all that we live in a country whose lust for RE will drive policy decisions through the power of the vote.
The vote cares not for the ‘liquidity, crowd .
T2 , much like the movie , will terminate B20.
Nope. – Garth
#49 Linda on 12.17.18 at 7:44 pm
Whoever sells can ‘clear profits’. The rest will be left holding the bag and once they realize they are under water for 20 %, 30 %, 40, 70 % of the their mortgages, many fill forego the down payment and many (majority of new mortgage holders in GTA and Vancouver) will simply leave.
In every Ponzi/scam scheme there is a moment when the players lose confidence and the things unravel rather quickly.
The good news for the Canadian taxpayers is that as banks would definitely refuse to take any losses and as they are connected, the bag will be transferred to the taxpayers so in addition to an economic depression following the biggest ever credit bubble in housing that drove the total debt into the stratosphere and will cause huge loss of jobs, taxes will increase, our finance wizard is making sure that all Canadians can pay their fair share of taxes, guess what, your fair share just increased, his shrunk.
Chicago: 6,949 homes for sale on Zillow, not 15k.
Some are very cheap, but with $700+ HOA, which is nonsense for Canada.
I guess, everything else is also false…
The numbers come from the NAR, for the metro area. Zillow is not a complete compilation. – Garth
Isn’t property tax in the U.S. much, much higher?
got another truckload of dividends today, i like that.
regarding the tsx, i will go out on a technical limb here and call it 13000 by july next year, maybe sooner. recovery to 16586 not until sometime late in 2020. reading charts? tea leaves? yep. let your cash pile up for the time being.
Interesting to read and observe some of these comments over the last little while . Quite interesting logic from some fear mongers and those who are constantly out to argue against fact and reality .
Equities markets are correcting , but a diversified long term portfolio is the safest and most porofiyable approach forward . Been investing slowly but surely since the late 80s from the age of 15. Still own some of my original purchases and love the dividend increases . Point us not to over react and to stay rational .
I agree with Garth on this and was of the same mindset prior to stumbling onto this blog .( Mandatory suck up without asking for anything! )
I have been watching the real estate market for some time now . Have many real estate agents and mortgage agents on my social media feed . I get a great kick out of their rationality and justifications . I did notice an eye opening trend over the last week. Very unscientific but I think it foretells something . Three different real estate agents . Unrelatated except for their choice of industry posted similar boastful adds on their fb feeds . Something along the lines of “ Sold for $50,000 BELOW asking “.
Never thought they would actually admit to selling below asking . The times are a changing !
Interest rates have to go up in the USA. Not only this Thursday but soon after. Rates will need to acellerate for the basic fact that internationally the USD is being dumped.
Just watched a DIY house reno show on Rochester, N.Y. where you can buy a house for $80,000. shocking
I love the “nothingburger!”
How about this: if you have bought a house in the past 18 months you have eaten a “crazyburger.”
Housing costs in TO and Van, and other places, are not reasonable. Garth’s US numbers are accurate. You can buy more, be taxed less, live closer to downtown in both Boston and NYC. How can a condo cost of 3/4 million become normal anywhere in Canada? I don’t get it.
Canada is competing internationally for talent. How can you attract people and businesses with sky high taxes and ridiculous RE prices. The weather? Those with options will leave.
Selfie Boy has to go Q4 2019
Here is the thing folks: stock market price fluctuations are a feature, not a bug. If you don’t understand that, you do not understand what you invested in, and you’d be best off to find an advisor.
I would have to agree with others here that housing is too big to fail. Especially in 2019, an election year. The liberals will do whatever is in their power to keep this sucker afloat. BOC and government policies got us in to this housing/economic mess but now we’re in too deep. BOC is stuck, I think that why they started this mortgage bond buying QE stuff because they realized they didn’t get rates high enough and housing is completely out of control.
I suspect there will be a recession 2019/2020 as its been a good run and trump pretty much single handedly killed it on his own. I think because we haven’t seen a downturn since the GFC, everyone thinks we are going straight to depression. Hopefully it is just a recession and we work out some of the imbalances and trade wars before they become real ones!
Some honesty for the love of any god, the war is not on first time buyers, there is no such war. The war which is won as always, is against last time buyers. There have never been survivors of such a war in regards to recent history. Therefore this is a war of blindingly spectacular entertainment if enjoyed from the sidelines. As all wars with incontestable winners must surely be.
Pink Pumpkins being carved in Surrey.
Not much happening sales wise and so I’ll do a couple of previous posted Pumpkin cases that are heading further into the abyss.
These guys just took another 150k off and they were already in serious trouble.
The details…
13493 32b ave,Surrey.
Paid 1.85 July 2016
Originally asking 1.99
Now asking 1.64
Assessment 1.74
Hear that sound?
That’s the sound of someone getting hit across the backside really hard with a for sale sign…
M44BC
https://www.zolo.ca/surrey-real-estate/14393-32b-avenue
Pink Pumpkins being carved in Surrey.
Not much happening sales wise and so I’ll do a couple of previous posted Pumpkin cases that are heading further into the abyss.
These guys just took another 150k off and they were already in serious trouble.
The details…
13493 32b ave,Surrey.
Paid 1.85 July 2016
Originally asking 1.99
Now asking 1.64
Assessment 1.74
Hear that sound?
That’s the sound of someone getting hit across the backside really hard with a for sale sign…
M44BC
https://www.zolo.ca/surrey-real-estate/14393-32b-avenue
The ‘Stress Test’ was the unavoidable measure required to dial back the gluttonous behaviour of real estate obsessed Canadians, who were unable to push themselves back from the table of irresponsible behaviour and financial piggishness. It may still be too late to save the self afflicted from themselves, especially those in the GTA & GVA. The chickens are indeed coming home to roost. If qualifying at the five year bench mark rate during one of the lowest interest rate periods in recent memory is thought to be ‘unfair and a burden’ you might want to take a long hard look in the reality mirror. And yes, that person peering back at you over your shoulder in the reflection belongs to a member of ‘the Cartel’. In that unathletic leap of faith to secure your place with other fools who know the price of everything and the value of nothing you have jeopardized your future and maybe even your kids future if you herded them in the direction of what was really your own self interest. They needed life survival skills, not a housing burden. So stop complaining. If you are knee deep in it you got there on your two hind legs. There is still time to climb up and out of the pit, but it will take clearheaded and unflinching self assessment.
#150 Crazfox on 12.17.18 at 12:44 pm
Thank you for that leinghtly reply, i do really appreciate, few things that i didn’t know and few that i already did. Making money on el ninja is ingenious, i wish i think of it before, but gave me few new ideas…
Funy that you mention loony bin…
One time i got bored and went online and looked for our cars carbon footprint, there is calculator on internet somewhere did calculation for both cars of ours and compare to lawn/shrubs/trees as a carbon sink, that we have on our lot and interestingly enough we almost break even there.
What else is left buy less trinkets, cut on energy used to heat a house and electricity. Nat gas consumption is more or less same as it was when we moved in, electricity consumption is probably if not more that 30% less but funny enough bill is twice as much now than before, and electricity, i could ditch hitachi and get more efficient tv, but for what to save 1-2kva a month. I am sure that many working stiff like me reached a point of diminishing returns, by choice or chance doesn’t matter.
Interesting that you sad eat less beef walk more and leave smaller carbon footprint, I am already doing all that what else is left, for me to pay more carbon tax so that carbon tax luminaries can write off there’s CT thru numbered companies and use working stiff as source of rebate.
People i know by choice or necessity they all cut on their energy use what else is there to do, live 1950-60 lifestyle, probably not bad idea, women were mannered and dressed much nicer back then…
But i’ll tell you something interesting where the waste is but few are talking about it, way back while geocities was hosting free webpages i had one, index and probably all graphics and pages (11-12) totaled 200 maybe 300 kb max, now days average size of ONE webpage is 3MB 10x more, because all bloatware and other garbage is crammed in.
Google alone use 1% percent of global energy consumption, air travel 10%, what i am saying under current conditions there is nothing we (we as unwashed masses) can do. But if you aks socks hell tell you carbon tax is an answer.
I can’t remember where i red that in order for carbon tax to be somewhat effective, not to stop, just to slow down climate change, it has to be priced around 20k CAD per ton, think of it for a sec.
And on side note, this is how much i walk an average month. Screenshot from beginning of the year. Considering that doctor describes me as morbidly obist i think that amount of walking is impressive.
(google doesn’t count steps anymore and app looks different so i can show you more recent months I just have old screenshot).
https://imgur.com/a/ProJktS
Fox, you keep posting i’ll keep reading, any idea is welcome.
To Yankee Canuck: yup, people leave Canada when they have a chance. There are 2 Canadians in our small firm :) almost half of the workforce.
The states has so much more to offer, I lived on both coasts, worked at the best companies, there is an endless queue of recruiters bugging for jobs – 200k/year is not uncommon for developers.
I’ve rebuild my networth in the states, since the Canada was a total scratch and there was simply no access to technology, trading and self-directed investing.
Canadá is a great country but man there is not much to do. The behemoth economy of the southern neighbor is hard to ignore.
Pink Pumpkins being carved in Vancouver.
This is the other pre-dipped Pumpkin that I will bring back on yo the kitchen island for further dissection as the just sliced the best part of 300k off and they too were already in trouble.
The details…
4724 w 6th Ave,Vancouver.
Paid 4.4 December 2017
Originally asking 4.98
Now asking 3.99
Assessment 4.4
So another one that was running with bad information.
The bloom was well and truly of the rose by then,especially in that price bracket.
They decided to pay the full assessment number and nowadays a lot of sales in that price bracket are going roughly 20% less than assessed.
So two cases that were already begging for mercy and no mercy was shown.
There is no pity party on the way…
M44BC
Price Event
Dec 17, 2018 $3,998,000 Price Reduced
Oct 29, 2018 $4,280,000 Price Reduced
Oct 12, 2018 $4,500,000 Price Reduced
Sep 10, 2018 $4,980,000 Listed For Sale
https://www.zolo.ca/vancouver-real-estate/4724-west-6th-avenue
Ontario to announce tax exemption for low-income workers in fall fiscal updated
Starting next year, Ontario workers earning less than 30K will no longer have to pay provincial income tax
The Canadian Press · Posted: Nov 15, 2018
https://www.cbc.ca/news/canada/toronto/income-tax-exemption-1.4906440
#72 Roman on 12.17.18 at 9:42 pm
I guess because of the topic of this blog (Canadian housing bubble) it’s understandable that we get posts criticizing Canada.
In my line of work I see a lot of Americans. Similar story, didn’t like the US for whatever reason and now they are here. The US economy seems more prone to cycles than we are. Remember 10 years ago “200k jobs” were impossible to find.
MF
That’s all for me folks. Garth take your stinking left wing commie garbage and swill it down with maple syrup. Canada SUCKS. Trudeau DEGAGE
Trudeau really upsets me with his Saudi Arabia virtue signaling. First he cancels the Energy East Pipeline which would of deprived Saudi of lots of oil revenue and created jobs in Canada.
Now because of this Khashoggi thing he wants to punish Saudi by eliminating even more jobs in Canada.
Meanwhile the Saudi’s will just take all that money that they are getting from selling oil to Canada’s east and purchase military vehicles from either the US, Russia, France, UK, China or someone else.
I am sick of Trudeau’s stupid virtue signaling! That anti job jerk needs to resign before he is the only one in Canada with a job!
#37 Greg
By buying shares of General Mills, you bought yourself a growing income for life.
Good move that will lead to tummy rubs annually.
DELETED
The Real Kip, the war in Yemen is being fought and paid for by Iran. It’s an age old battle to the death between two competing tribes, Sunni and Shia. They’ve been killing each other since Muhammed died and didn’t leave a clear successor. The Iranians place families on the front lines for the cameras, shoot them if they try to run. They do the same thing with Hamas and ISIS in Syria and Iraq. The misery of these families is only and solely caused by fanatics seeking to discredit the opposition in the media by using their own people as human shields while firing rockets into the homes of families on the other side. Get your priorities straight. Canada is not selling war to an aggressor, Iran is the aggressor. Iran is why there is so much misery in those three war zones.
Did I misunderstand – Rates aren’t going up anymore?
#58 Mike in Toronto…..
Slightly higher taxes are irrelevant when you consider that US mortgage payments are tax deducible.
The fake news CREA are still making the following statement that the Canadian Press writers still flog:
“CREA also projects the average price for a home will climb yet again next year, this time by 1.7 per cent to $496,800.”
Re: General Mills # 34
Apple cinnamon Cheerios were my go to snack.
I stopped buying them because they are mission impossible to stop eating.
Who invited Mr. Grinch to the Santa rally?
Faith Goldy. Branded a white supremacist by the globalist run MSM while working for a Jewish dude . She came in 3rd in the Toronto mayor race with no coverage. She sued msm. A libtard judge said sorry bitch you got to pay globalist msm legal fees.
She starts a gofund me page for legal fees which gofundme kills after 3 hours.
And these morons scratch their heads at the Trump win, have zero clue what about the storm that is heading for Canada.
People with Phd In Herdonomics deserve more respect.
I know Q. I inspired her.
Where we go one we all go…
#52 OttawaMike on 12.17.18 at 7:48 pm
How are preferreds, bonds and pretty much every N American equity doing?
Working people who rolled the dice and leveraged up on Real estate did just fine in Ontario and BC these past 15 years. No more reason to sell your house and go to a rental than to sell your investments and go to cash.
…….
You don’t see it coming do you. Dear God. It’s going world wide.
I left the country I love and my children behind, trying to beat the clock and get em down here in Trumps America.
Canada is going full on Venezuela, Christ if you don’t see this you’re over paid.
All margined up long on a company that mfgs yellow vests. Potential market 70 million Americans and 25 million Canadians with every rainbow under the sun regardless of skin pigmentation. Logic rules when it comes to what’s in your wallet.
I see it now, safe space ,Doug, Ryan and Smokey at Turner Investments.
Doug and Ryan scratching their heads. How can this loser who shows up at work everyday smelling like a brewery and an ashtray have their cliants switching to smokeys portfolio picks.
Those two had the same teachers. Me I’m a road warrior. Got my badge doing door to door sales.. It’s all about the herd and not what your teacher thinks. They were taught by other teachers.
Dr Smoking Man
PhD Herdonomics!!
#14 SwanPardis
Don’t be so bloody lazy.
Rent vs. buy data for Canada is easily found.
This for Toronto from the search term “rent vs buy real estate in canada” (a dire 3 sec. type job, an arm breaking pressing of the Enter key and a it took forever 0.54 sec. search, according to Google):
“Rent or buy? How stagnating home prices and high rents affect that equation”
https://globalnews.ca/news/4206474/rent-vs-buy-canada-2018/
Or, run your own location specific scenarios using a downloadable rent vs. buy calculator (Excel):
“Rent versus Buy Calculator” by Prett Banerjee.
http://wheredoesallmymoneygo.com/rent-versus-buy-calculator/
Enlighten yourself rather than posting tiresome Comments based on no data whatsoever.
#46 45north
“…the market has cooled but not collapsed.”
It takes about 1.5 years for the full effect of something like a B20 to fully work its way into the RE market.
Even Ross Kay admits that.
Canadian RE is in the midst of a rapid unwinding exacerbated by economic signs of an inflationary deleveraging (<5% down B20 started Oct. 2016, <20% down B20 started Jan. 2018).
Monetary policy actions such as B20 do not yield "immediate gratification" results. They take time. Just like it takes time to fully recover from a recession.
Patience, your collapse is just starting.
Look at history. Expect a -30% overall price drop for Toronto while returning to its long term average price trend, more than -30% due to the Despair Phase (price < long term trend, from: "4 Psychological Phases of Asset Bubbles"), the latter taking 8 years or more to recover from.
Posted this many times, history of Toronto RE long term average price trend vs. RE bubble prices (note how long price languishes below the long term trend price = Despair Phase):
https://i.imgur.com/2SYBufT.jpg
NO SOFT LANDING. NO SLOW MELT.
The LARGER the bubble, the more RAPID the price decline. Just compare our current MOTHER OF ALL CDN. RE BUBBLES to past bubbles to extend that hypothesis as to what is to come in terms of price decline and its rapidity (not shown, early '50s bubble very small, corrected in < 2 years).
Patience…
#34 Game on for 2019
Rate increases will modify for reasons unrelated to housing, and any public policy decisions which encourage more household debt are unlikely. This asset class has seen its best-before date pass. – Garth
—————-
But haven’t you said that B20 is likely to be modified from the realtors and developers lobbying the feds, and that amortizations might move back to 30 years? If this is going to happen and there are one or two rate hikes next year how can this not stimulate the market? Seems pretty stimulative to me. 40 year amortizations goosed the market and the 2015 two rate cuts goosed it even more. Seems the headwinds against the market have fizzled out.
Poor Baby Boomers, they won’t be able cash out now. We need to raise taxes to make sure they’re ok.
#15 The real Kip on 12.17.18 at 5:21 pm
“Ottawa’s move to punt the $15 billion Saudi arms deal (cost = 500 jobs in London).”
Ottawa should punt the LAV sale to Saudi Arabia. Those LAV’s will be used to run over women and children in what’s left of Yemen as soon as they arrive.
Remember the outcry in Canada when Syrian refugees came by the tens of thousands to Canada after we sent our CF-18’s to help bomb them back to the Stone Age? This country will not support humanitarian assistance after the conflict is done but we are quick to grab a chair at the big boy table when selling weapons to facilitate it.
—————————————
There always has to be that “one guy” blaming the West for an internal Syrian civil war.
#84 conan on 12.18.18 at 12:28 am
Re: General Mills # 34
Apple cinnamon Cheerios were my go to snack.
I stopped buying them because they are mission impossible to stop eating.
Who invited Mr. Grinch to the Santa rally?
——————————————
Sir, I disagree with your T2 idolatry however on this we are in agreement. Apple cinnamon Cheerios – a little bowl of heaven that I used to indulge in several evenings a week (for me it was always an evening snack, never a breakfast item).
I too have stopped though – too much sugar.
#88 Dolce Vita on 12.18.18 at 1:59 am
#14 SwanPardis
Don’t be so bloody lazy.
Rent vs. buy data for Canada is easily found.
This for Toronto from the search term “rent vs buy real estate in canada” (a dire 3 sec. type job, an arm breaking pressing of the Enter key and a it took forever 0.54 sec. search, according to Google):
“Rent or buy? How stagnating home prices and high rents affect that equation”
https://globalnews.ca/news/4206474/rent-vs-buy-canada-2018/
Or, run your own location specific scenarios using a downloadable rent vs. buy calculator (Excel):
“Rent versus Buy Calculator” by Prett Banerjee.
http://wheredoesallmymoneygo.com/rent-versus-buy-calculator/
Enlighten yourself rather than posting tiresome Comments based on no data whatsoever.
—————————————————————-
I took the time this morning to run the numbers on that calculator provided above and owning wins out for me … by about 300K.
As for the markets, a wise man once said: “troubles will come and they will pass…” So be a simple kind of man and ignore your daily portfolio changes.
B&D over the long haul. Simple.
in the us you can write off your mortgage interest, which is huge advantage. You can get reasonable properties and write off the interest huge comparable to overpriced southern ontario.
i was looking at 700K townhouses in guelph, what a joke, poor construction and the guy went on about quality, i said this is home depot crap, he said what, home depot, what are you talking about upgrade, upgrade what, laminate flooring is upgrade. everything is plug and pay, i said it couldnt cost you 300K to build this thing, he didnt say anything.,
what a rip off southern ontario is.
I know Q. I inspired her.
Give us a Christmas present…explain Q Clock to those of us not as enlightened as you.
All I get is sell all my Bitcoin and buy gold but there has to be more, right?
Trudeau’s decision to “save the world” again by cancelling the Saudi contract…
Kinda reminds me of the on again off again Canadian Military Helicopter of a few decades back when the Cretien Libs cancelled the Mulroney Cons Italian contract….what were the taxpayers on the hook for? $400 million to cancel a contract?
How much does Canada have to pay the Saudi’s in penalties for breaking a legal contract worth billions?
One wonders if South Africa armoured vehicle manufacturers will contribute to Trudeau’s re-election campaign.
Will there be any jobs left in Canada after social justice super hero Avenger Trudeau is done? Could we call him Debt Man and give him a green cape with a red zero in the middle of it?
Social justice children and their misguided dreams of a perfect world where deer and wolves frolic together peacefully….. I think I saw that on a religious pamphlet handed to me on a sidewalk one time…….
Garth, I often see you criticizing the purchase of condos and other inner city joint living real-estate situations, but what do you consider is a good buy in the market these days? I know a lot of young people looking for special sales that happen fast like bank foreclosures and power of attorney sales on detached homes. Do you think even those are viable/smart buys?
Such things do not exist in most of Canada, where lenders taking over properties are required to dispose of them at market value, not fire-sale prices. – Garth
@#55 Mr Pragmatic
“what is evident to all that we live in a country whose lust for RE will drive policy decisions through the power of the vote.”
+++++
Mr Pragmatic meets Mr Market.
Mr Market cares not one wit what tiny little Canuckda and it’s miniscule population wants or desires.
Vote for SJW Trudeau all you want. He cant save you by raising taxes, crushing investment and promising everything to everyone stupid enough to believe him.
Alas the Real Estate market will continue to sink as Canuck banks continue to tighten mortgage qualifications in a shaky , grotesquely indebted economy.
Perhaps you should rename yourself to who you really are………Desperate Delusional Realtor has a nice ring to it.
Apples are not oranges and the States is not Canada, but our two countries are among the most similar on the planet. So the difference in real estate values and household debt is worth noting. – Garth
——————————————————————–
This is what I keep obsessing and commenting about.
Especially after travelling and spending months at a time in the US.
It starts to become painfully obvious.
Something doesn’t add up.
Canadians are sold a bill of goods, that we are so privileged to be living here and should shut up and pay our exorbitant taxes and astronomical house prices, and be thankful for our nanny state government for taking such good care of us, blah blah blah.
In the meantime, we are getting pick-pocketed to death.
How the cost of housing in this winter-frozen-overcast -gloomy (summer-humid-overcast-stinking hot and rainy) welfare economy ever got so high is an enigma.
Are Canadians really so stupid as a group?
Or, is it because Canada is such a haven for economic refugees, that in comparison to wherever they are fleeing from, we look like paradise, so a million bucks or more for a Toronto shack seems like a bargain?
I don’t know.
Yes, Canada is not such a bad place to live. I’ll give you that.
But, come on, at these idiotic unsustainable real estate prices?
What the hell went wrong?
It used to be reasonable. It made some sense a few decades ago.
I feel pity for the young.
“MPs and T2 are under big pressure to relent, and probably will. The Bank of Canada needs new Depends thanks to the trade war, Alberta’s oil cap, the Bay Street stock plop, the explosion in family debt and now the property unwind.”
……and the 2019 election looms large.
Rates stable, rates down – makes zero difference at best and likely adds even more damage to our economy. The mess is manifest and will not correct until money is worth more. Diddling with rates over the past 25+ years, and especially the past 18 has done more harm to the global economy (no, the globalization cake, like any other, can’t be rapidly had and eaten too) than anything else. The present state of crappiness was not a black swan event, it wasn’t cyclical and it wasn’t any kind of accident. It was our illustrious and cryptic “leaders”, read pied pipers.
“Utterly home-grown.” Absolutely. And we had a perfect example as to what not to do under our noses after the GFC with our neighbours to the south. But fiscal hosers blithely ignored it. “It’s different here”.
Yes indeed. It’s worse.
#86 Smoking Man
RWW News: Rick Wiles Sees the Upside of a Deadly Ice Age
https://www.youtube.com/watch?v=IVIzv5xPxhk
RWW News: Liz Crokin Says California Wildfires Were Set To Burn Evidence Of Pedophilia in Hollywood
https://www.youtube.com/watch?v=0tofB-Fd_ms
Falling tide for retail commercial mortgage investors (so-called syndicated mortgages):
https://www.theglobeandmail.com/business/article-inside-the-fall-of-fortress/
This is a good read. Caveat emptor.
Cancel the Saudi Light Armour Vehicle (LAV) sale and get Canada off the list of belligerents Yemen civil war (weapons supplier).
https://en.m.wikipedia.org/wiki/Saudi_Arabian–led_intervention_in_Yemen
#1 Jarad on 12.17.18 at 4:35 pm
Hi Garth,
I know your hatred of condos well. Does this include detached or townhouse condominiums or is your disdain reserved for highrise, “box in the sky” condos? I assume you own the land under your condo if it’s located on hard land, but I no nothing for sure!
No hatred. But why would you buy something you can lease for half the true cost, that has monthly overhead beyond your control, no development potential, will eventually produce big special assessments and affords a precarious lifestyle depending on who lives beside, above or below you? And, no, you don’t own the dirt but are part-owner in a condo corporation that does. You also own its liabilities. – Garth
…………………………………………………………………
Ha I spent two hours once explaining this to my cousin and she could not get it through her head that you actually don’t own anything just the space. In addition she said special assessments will never happen. Boom eight months later they received a special assessment. They needed to take out a loan, can you believe it?
@#100 dharma
“I feel pity for the young”
++++
Don’t pity the young.
Their majority voted SWJ Trudeau into power
#87 Smoking Man on 12.18.18 at 1:50 am
I see it now, safe space ,Doug, Ryan and Smokey at Turner Investments.
…………………………………………………..
And the day that happens is when I seek another advisory company.
Me too. – Garth
#92 Howard on 12.18.18 at 5:37 am
#15 The real Kip on 12.17.18 at 5:21 pm
—————————————
There always has to be that “one guy” blaming the West for an internal Syrian civil war.”
If the war in Syria was “internal” as you allude, then why did we (Canada) send CF-18’s to join in bombing with the US, Britain, France and, on the other side, Russia? Time to give your head a shake son. The war in Syria was anything but “internal”.
#63 Yankee Canuck
RWW News: Steve Strang Says Trump Was ‘Forced’ to Engage in Massive Tax Fraud
https://www.youtube.com/watch?v=SL1AU4jK2v8
#72 Roman
RWW News: Kat Kerr Says ‘They Had A Party In Heaven’ When Kavanaugh Was Confirmed
https://www.youtube.com/watch?v=mDjezN__VhM
Enough of this crap. – Garth
Dolce Vita: Canadian RE is in the midst of a rapid unwinding exacerbated by economic signs of an inflationary deleveraging (<5% down B20 started Oct. 2016, <20% down B20 started Jan. 2018).
you’re saying:
starting in Oct 2016, those who had less than 5% down had to pass the stress test
starting in Jan 2018, those who had less than 20% down, had to pass the stress test?
I thought:
starting in Oct 2016, those who had less than 20% down had to pass the stress test
starting in Jan 2018, those who had less than 100% down, had to pass the stress test
Patience, your collapse is just starting.
I agree. Looking at your chart, the last collapse from 1989 to 1996 took seven years. Ross Kay said the good people of Toronto just kept paying their mortgages and in seven years had paid off enough principal that prices could start rising again. In other words, the banking system remained stable throughout. I’m worried about what happens if it doesn’t and so are the banks.
Long term interest rates have not gone up much actually in Canada rates are much lower than 2008 Financial mess globally and beyond When Obama, Clinton got turfed out.
You can bet your bottom dollar that 30 year Canada bond rates will fall with shorter term rates going lower. The 30 year Canada bond was 1.55% not many years ago.
Don’t say but short term rates are higher. In a real economy that is strong longer term 30 year rates go higher than 2.58% Canada and 3.45% U.S. It is all a joke.
Enough of this crap. – Garth
lol, isn’t the delusional cargo cult trajectory of the USA exciting and full of opportunity? https://www.truthdig.com/author/chris_hedges/
i didn’t even get around to posting the pop culture the kids are loving up. tekashi69, ooh la la
Sorry Canada, you can quit bitching. You voted Trudeau. Pierre Justin what did you expect? Boohoo
Garth goes on and on about rates etec but totally underestimates the effects of the toxic T2 brand. This guy is going to lose the country first economically then politically and we will all be looking at ourselves wondering WTF we did by electing him.
@No.88/Dolce
“Don’t be so bloody lazy.”
Thanks for preaching to the choir (data to financial math people). Thanks, but no thanks, as the enlightenment wasn’t particular new. Had you read my original comment with a bit less resentment and cooler (and with more active gray material) head, you would have avoided an assumption of generalization in it and it might have occurred to you that others might have run the same (and more sophisticated) calculations too.
>BC housing in mild recession.
https://www.citynews1130.com/2018/12/18/housing-bc-mild-recession/
https://www.central1.com/wp-content/uploads/2018/12/ea-2018_05-BC.pdf
—
I’m glad you changed your handle Godth. Otherwise people would be calling me “Long-Time Loser.”
Canada’s liability for cancelling the Saudi Deal……..possibly billions….
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiiw8fR56nfAhWqsVQKHT4DDTYQqUMwBXoECAEQBA&url=https%3A%2F%2Fca.reuters.com%2Farticle%2FidCAKBN1OG28B-OCADN&usg=AOvVaw3kPTiuZrb3pn-9FKY9Lqfm
Who knew social justice was so expensive…….even more so in an election year.
#77 PeterfromCalgary on 12.17.18 at 10:46 pm
I am sick of Trudeau’s stupid virtue signaling! That anti job jerk needs to resign before he is the only one in Canada with a job!
______
Fear not my friend. Yes, Trudeau is going to wreck the country if he gets another 4, but this is exactly what Canadians need. We need a good hard old-school @ss-kicking, and it needs to be bad enough to hurt for a long time.
Trudeau didn’t force himself into office, we put him there. With a majority. It looks like we’re going to put him there again. So it’s Canadians themselves who do not value jobs, or financial security (a quick look at household debt numbers will back that up).
Canada has never had such an air-headed dunce cap wearing birdbrain goof for a PM as Trudeau. It is now obvious this guy is a moron, and has no idea what the hell he is doing. There is no longer any excuse. If we put him back in there again, you can just forget about any ideas you have that say the Politicians themselves are the problem.
The problem lies with the voter.
Well it has been a good run over the last 5 years.
Are we going to run out of gas and slowly coast to a halt or is the crazy Child in charge of America going to pull up his diaper and stop playing with fire in China?
https://ktla.com/2018/12/18/former-federal-reserve-chairman-alan-greenspan-says-investors-should-run-for-cover-if-stock-market-goes-any-higher/
Maybe Greenspan will be as prescient as he was when he claimed the US had no housing bubble – months before it burst. – Garth
I am waiting for T2 to apologize to all Canadians with a fireside chat. He looks at the camera with tears in his eyes announcing his resignation effective January 1, 2019.
00 dharma bum on 12.18.18 at 8:27 am
We didn’t have a RE meltdown like the US did in 08.
That’s one reason why our houses are more expensive.
And Canada is more than RE. Think of the tons of crap countries on earth and compare them to Canada for a clue on why that is so (and why our RE is expensive).
Btw, I go on other forums with lots of Americans and it’s the same wailing and complaining about taxes and RE and corporations.
The grass is always greener.
MF
#108 The Real Kip;
Kip, to be fair, I think there was an element of civil war at the very beginning of the Syrian conflict. From what I could tell from here, the “Free Syrian Army” was initially from the actual Syrian army. Of course, they were “encouraged” by arms and promises from outside like the other Arab Spring countries, but they were actually Syrian.
After the first two months, nope. It looked like foreign fighters took over.
Who paid for them? CIA? Saudis? Mossad? Turkey?
All of those wanted Assad out. What a shitshow.
What? What’s this now?
Climate change is about to kill us, the food supply really is killing us and now rates are going up. Again. And we’re still borrowing our brains out? Consumer debt is over 178%? Looks like the neighbors will be looking for handouts across the street. Poor sops, I’ll likely give it to them. Who knew.
My sister’s car gave up the ghost. Oil pump went on her EOS. Can’t believe I offered to change it… its cold outside this is December Canada, what was I thinking?
Women are in a mood… the markets are in a mood… rates going up… rubbers half worn out on the back on the half ton, can’t seem to get any traction…
The old man gets out to gun shows and such and does the senior circuit. He hears it everywhere now “I’ve got no money”. Everywhere he goes, in a store… fall suppers… at the card table… at the pool table… in the doctors office…. its the same thing. “I’ve got no money”. That’s the word on the street in the Sask sticks, 2 years of drought in the south and poor grades in the north have caught up out here.
The dealers are hurting. There were 59 John Deere combines for sale at the last RB auction of the year. In good years there might be 6. The oil patch is soft. Real estate is soft. Troubles everywhere.
And I can see people wanting to complain y’know its in our DNA (its in mine apparently) but don’t Canadians come across as just a wee bit entitled? Just a little? We have the highest valued homes in the world for a reason. Our “instant gratification” nation “must have it all now and to hell with tomorrow!” Until tomorrow arrives and its always someone else’s fault.
Its not hard to see irrationality in Canada. Look at the protesters in Alta, stirred up from the latest Facebook fake Russian sponsored news. Trans mountain gets bought by the fed this summer and shot down in the courts because we were too rushed to construction and “the sky is falling in Alberta”. Media histrionics to no end, “we’re losing so much money and this can’t go on like this, we need pipelines now!”
Oh, Kitimat LNG is approved this summer a mere $41 billion dollar project rumored dead a mere year ago but you don’t hear a peep about that in Alta and BNN right? With Kitimat, its crickets. Keystone? Approved a year and a half ago in the U.S., years ago here and still nothing as the U.S. gets oil for near free just because it can, or because of its own shale production stretching their own pipe and facilities to the max… or whatever reason suits them for near free oil but we don’t see protesters over that do we, no, do we. Instead, we have to hear some braindead West/East angst argument spun by Western politicians over how slow Quebec is for not pursuing Energy East.
TransCanada pulled out of Energy East a year ago. Who’s building Kitimat LNG project? TransCanada pipeline. TC can’t do both so they bet on a winning horse. And to think that our governments weren’t aware of the options here… how hard is this to understand? Oil pipelines must be built, we get it but does anyone seriously believe T2 would spend $4.5 billion on a bridge to nowhere? I bet some do just because, for no other reason, he’s T2. See? Histrionics. Watch that sucker get construction approval before the next election and if I’m wrong, within 2 years.
Meanwhile, histrionics…. its what we Canadians do… well… some of us anyway. Is it the food supply? It probably is! No really, it is!!!
https://www.youtube.com/watch?v=bhh19cQukfg
One can only imagine the nut show to come when it gets worse.
https://thediplomat.com/2018/07/the-case-of-the-khrapunovs/
Prosecutors Asked to Probe Dutch Middlemen Washing Billions in Dirty Kazakh Cash for Real Estate Deals in US and Europe
By David Cay Johnston, DCReport Editor-in-Chief
https://www.dcreport.org/2018/10/31/group-calls-investigation-of-guiliani-trump-money-laundering-scheme/
#118 crowdedelevatorfartz on 12.18.18 at 11:37 am
Canada’s liability for cancelling the Saudi Deal……..possibly billions….
https://www.google.ca/url?sa=t&rct=j&q=&esrc=s&source=web&cd=6&cad=rja&uact=8&ved=2ahUKEwiiw8fR56nfAhWqsVQKHT4DDTYQqUMwBXoECAEQBA&url=https%3A%2F%2Fca.reuters.com%2Farticle%2FidCAKBN1OG28B-OCADN&usg=AOvVaw3kPTiuZrb3pn-9FKY9Lqfm
Who knew social justice was so expensive…….even more so in an election year.
——————————-
Where’s all the “rule of law” people at? I guess contract law isn’t real law right?
#123 Iconoclast on 12.18.18 at 1:01 pm
You forgot to add Russia and Iran to the mix making it the 21st century equivalent of a dirty little proxy bush war all around…
Surely some economist has published a paper on why Canadian housing prices are so much higher than those in the USA, all things equal?
I listened to the Smoking Man’s tips on investing and lost all my money. Now when someone comes to my pathetic doorway to pay for a delivery have to barter with household items that are left. Learn to barter with goods and services when the cash runs low.
CrazyFox: My sister’s car gave up the ghost. Oil pump went on her EOS. Can’t believe I offered to change it… its cold outside this is December Canada, what was I thinking?
that you were 24 and the cold didn’t bother you anyway
#130 45north on 12.18.18 at 2:57 pm
Yeah. When I was 24 my brain was soft, I didn’t mind so much. Now my heart’s soft. Everything’s gone soft. Economy, drinks, the markets, me, its mushy out there. Keep safe 45’er.
The BOC isn’t jacking up anything. And Trudeau is going to be throwing out goodies to everyone. Greenspan and the BOC are all saying the same thing, stagflation.
https://apple.news/AQCsntEniQKG4-TGntKVB4Q
These toxic assets are Bonds. Žhat are expected to possible get downgraded. Which are illiquid to the companies holding them. Chris Wallen and Danielle DiMartino have been saying the same too. And as the quote goes, they don’t sell what they want, they sell what they must.