Stressed out

On Monday we vexed about the byelections. Done now. Results as expected. GTA went Con. Montreal to the Libs. BC now NPD, sort of. In Burnaby only a third of voters showed up. Sad. Of those, 60% didn’t vote orange – which means the Dipper won. The fact he’s party leader just made the win more lackluster. And let’s throw some disbelief on this: 10% of the ballots went to the Mad Max candidate – the one God talks to about media gigs. Sheesh.

Well, on to the election. You can count on a Moister Housing Strategy at the heart of the Lib campaign. The question, then, is how disruptive will this be to Mr. Market? For months real estate has been in corrective mode. Sales have been squishy, prices in a slow decline in most cities, detached houses hardest hit and a swell in rental demand as many prospective bidders give up and lease. Mortgage rates have stabilized and it looks like the Bank of Canada will hike again, reluctantly, once or twice in 2019. That could be the end of the current tightening cycle.

The stress test has reduced credit among those who don’t actually deserve it. Mortgage and HELOC debt levels just increased again. Household borrowing at over $2 trillion sits in record territory. Wage gains trail inflation. The savings rate is almost down to zero (0.8%). Yes, more people are working but family finances grow more perilous monthly. This is an environment in which real estate values need to fall in an orderly fashion until an equilibrium is reached. Supply and demand. Not FOMO and fear.

But will T2 and Bill Morneau crumble in the face of Moister malaise? Will the tireless industry campaign against the stress test succeed?

There was more of it this week, as the Financial Post gave over space to Re/Max to publish this:

“After more than a year in play, it is now apparent that the stress test is causing more harm than good, effectively closing a door in the faces of first-time homebuyers. The time has come for policy-makers to consider how to incentivize homebuyers in Canada, not penalize them.

“Ten per cent of Canadians no longer qualify for a mortgage with banks. The stress test has cut first-time homebuyers out of many markets in Canada and caused a ripple effect through every tier of homebuyer. It has affected move-up buyers needing larger homes to accommodate growing families. It has created a frenzy in the rental market, since those who no longer qualify for a mortgage are opting to rent. The bottom line is that the Canadian government needs to find ways to support, even incentivize, homebuyers in Canada (especially first-timers who are facing challenges entering the market) rather than penalize them.”

It’s a moan repeated by real estate boards and the entire building industry, as well as the mortgage lobby. And now that real estate-related activity accounts for about a quarter of the entire economy (more than oil and factories combined), it resonates with Ottawa. Especially in an election year. And especially with the Libs, who counted on weedy Millennial support to grab power in 2015.

Now here’s the problem. The stress test was created by the bank regulator to shield the Big Five from an erosion in their mortgage portfolios. By forcing all buyers – even those not looking for CMHC insurance – to pass the test, it ferreted out the Bank of Mom grifters who were actually credit slouches. The goal was to ensure all high-risk bank loans were properly insured.

But the real estate/mortgage/builder cartel sees it differently – as a politically-motivated blunt instrument designed to burst a housing bubble that no longer exists. In fact, Bill Morneau himself has walked into that trap. Last week he said, “We wanted to make sure that prices were not escalating in some markets at a pace that was unsustainable.” But the stress test is the child of OSFI (the regulator, who says this isn’t about house prices) and not the government. Or is it?

Mortgage guys are consequently flipping out, arguing the stress test may be a “politically-driven seat-of-the-pants rule-making.” As broker and industry spokesguy Rob McLister writes, the test has “prevented borrowers—who would have previously qualified in 2017—from benefiting from home ownership, driven up rents, pushed people to non-prime lenders with higher mortgage rates, kept people from consolidating debt and lowering their interest rates, and hampered competition for renewers, among other things.”

So which is it? A bank protector, or a bubble-pricker?

Both, actually. But don’t expect it to last.

Fighting scandal and slipping in the polls, the federal government fears losing the critical moister vote. When it comes to staying in power or doing the socially responsible thing, it’s no contest. So get set for a package of changes which will ‘boost affordability’ and end up making houses less affordable. Diddling with the stress test will be a part of it.

The only question is, when? The answer is March 19th.

About the picture...

Shawn in YVR writes: “I instantly thought of you when I saw this on my commute today. The handwringing is a great visual for everything you’ve been preaching since I’ve been reading your blog for the last few years.”

 

148 comments ↓

#1 Mike on 02.26.19 at 4:26 pm

.
Stress test to be soon gone. Buy now, or pay more later in Van.

Up and up goes the Canuck RE, beats the stock market hands down.

Not lately. – Garth

#2 For those about to flop... on 02.26.19 at 4:30 pm

Pink Snow falling in Vancouver.

I’ve showed a few attached properties taking losses in Marpole recently and this townhome seems certain to join them.

The details…

270 w 62nd ave,Vancouver.

Paid 1.76 March 2017

Originally asking ?

Now asking 1.49

Assessment 1.45 down from 1.61

Regular helper The Hoff pointed this one out to me and I do remember writing about them once, but couldn’t find the original post to compare details.

Seeing different buy prices being bandied about, I attribute that to gst inclusion or exclusion.

The other part of secrecy with this one that I could not confirm without the original post was the original ask price.

For now I will just put a question mark,but as a whole it doesn’t really matter.

Originally asking and assessment, interests some folks, and is irrelevant for others, I just try to pack as much information into each post as I can get my hands on.

Whatever the numbers, these guys are going to take a loss as the steam has mostly run out of the attached market, especially in less desirable locations…

M44BC

https://www.zolo.ca/vancouver-real-estate/270-west-62nd-avenue

P.S ,A.B , I walked by 904 e 37th, no sales sticker up as yet…

#3 MF on 02.26.19 at 4:51 pm

Umm why would “moisters” vote for anything that would increase house prices?

The stress test is working, although not enough.

Expect another misread by these Liberals and a con minority in October.

MF

#4 MHM on 02.26.19 at 4:58 pm

On the one hand the Real Estate guys are saying the stress test is hurting the market.

But on the other hand they say sales are up.

How can the stress test be hurting the market if sales are up every time?

#5 Victoria Real Estate Update on 02.26.19 at 5:04 pm

200 years of world housing bubble history shows that all housing bubbles inevitably go through major price corrections that bring prices back down to the long-term price-to income ratio. And Canada’s housing bubble is massive.

Every housing bubble in history has gone through a major price correction as a result of years of housing price gains skyrocketing out of control and leaving income gains far behind – not because of market intervention/tightening.

No bubble country in history acted to intentionally bring about its major price correction. And Canada won’t either. And just like every housing bubble country in history policy makers here will use whatever is left of its (almost depleted) list of potential stimulative measures in an attempt to prevent the inevitable from playing out. But history shows that these efforts always fail.

Those who claim that the government is in control of Canada’s bubble and can simply tinker with lending standards to make prices go higher or lower at will (and prevent prices from reverting back to the mean) lack a basic understanding of housing bubbles.

Clearly those who claim that house prices can be maintained at a permanently high plateau until incomes catch up are exhibiting the same “it’s different here” thinking as those from every housing bubble in history. It’s always different – until it isn’t.

200 years of world housing bubble history has shown that no country has succeeded at avoiding the major bubble price correction through policy changes near the peak.

This tells us that a major price correction is an inevitable part of the housing bubble boom-bust cycle. The bust part of the cycle typically lasts as long as the boom and is similar in size (in the opposite direction).

Canada can tinker all it wants with mortgage lending standards but they will learn that it isn’t possible to permanently hold off the inevitable.

It’s impossible to predict the exact month and year that events unfold in a housing bubble boom-bust cycle. However it is always possible to predict the basic inevitable outcome. That Canada will experience a major price correction is a certainty.

#6 Smartalox on 02.26.19 at 5:07 pm

If the stress test is changing at all, it may be lowered to prime +1.5% instead of prime +2%. It isn’t going to go away.

A better move would be to increase the amount that can be removed tax-free from an RRSP to $50k per holder. This would result in higher down payments, lowering the risk of big mortgages with little to no equity.

It might also encourage people to save money in their RRSPs, and who knows? Maybe a few will see the value in saving / investing and decide not to blow their brains out on debt.

As for HELOCs: maybe the feds should tax them: like liquor, tobacco, pot and fuel they’re very popular with consumers, to the point that they’re viewed as a ‘necessity’, even if they’re not. These things are all popular, but must be used in moderation. A small tax (maybe 0.5% on outstanding balances) would motivate people to pay down their debts.

#7 Drill Baby Drill on 02.26.19 at 5:08 pm

Interest rates need to go up this year 3 – 4 times but alas since there is a Federal election in Oct the first up tick for 2019 will be Nov 01.

#8 Richie on 02.26.19 at 5:10 pm

#4 MHM

I would love an official RE/MAX response on that! :)

Unfortunately, I don’t Garth’s blog is really their bag…

#9 SwanPardis on 02.26.19 at 5:14 pm

Irrelevant to today’s theme and hard to find another day’s topic when the fit is better. But since there’s a good deal of nonSTEM education bashing (along with all other kinds of bashings) in the comments section here (which, I trust the Omniscient blog knows better than to agree with), it’s worth sharing for a different perspective.

“Legendary investor Bill Miller has always been a little unorthodox. During his 35 years at Legg Mason Value Trust, he was best known for beating the returns on the benchmark S&P 500-stock index for an astounding 15 years straight, from 1991 to 2005. Now, as chairman and chief investment officer of his own investment fund, Miller Value Partners, Miller likes to draw market research from nontraditional sources like academic journals and philosophical readings. Fortune Magazine described his investment style as iconoclastic, saying: “You simply can’t do what he’s done in the supremely competitive, ultra-efficient world of stock picking by following the pack.”

https://mellon.org/resources/shared-experiences-blog/why-study-philosophy/

#10 Ponzius Pilatus on 02.26.19 at 5:15 pm

DELETED

#11 RICK on 02.26.19 at 5:22 pm

“Yes, more people are working but family finances grow more perilous monthly.”
Hmmm….seems to me that someone was bragging that a job is a job a while ago. Guess he was WRONG.

Jobs are good. Borrowing, not so much. – Garth

#12 Captain Uppa on 02.26.19 at 5:23 pm

Do I even have to say it?

#13 For those about to flop... on 02.26.19 at 5:27 pm

Pink Snow falling in Richmond.

This 14 year old house in Richmond went off the market about a month ago and they have come back with a torch to hopefully find the exit sign this time.

The details…

8955 Cooper Rd, Richmond.

Paid 1.8 June 2016

Originally asking 1.98

Now asking 1.66

Increased competition this time of year but what they will really be looking for is that one family that loves the house and is willing to pay for it to soften the blow.

This is the time of the year the market gets a jump start but less people are willing to offer up their cash as the battery…

M44BC

https://www.zolo.ca/richmond-real-estate/8955-cooper-road

#14 BlogDog123 on 02.26.19 at 5:29 pm

Don’t fret about that foreclosure!

Drop a few hints in front of grandma… She won’t let you get kicked out of your house… She’ll pony up the cash!

Wait, that didn’t work… Well you can’t wait for that inheritance…

Harold the Jewelry Buyer is on TV. Whass that, you want me to sell my gold, Cartier watches for top dollar? I don’t have anything of value… But wait,… Grandma keeps some at her place… She’s not going to blame me if it goes missing…

Yes, sad but true… it’s come to this folks…

#15 yorkville renter on 02.26.19 at 5:30 pm

further propping up the real estate market is a losing strategy – the market is out if gas, period. Libs would be better served looking elsewhere, like forcing pipelines and other infrastructure.

This market is pooched.

how insane is house lust? bank says no, so I’ll borrow at doublw the rate. W T F ???

and what’s the ‘benefit of home ownership’? is it the right to pay taxes and repairs?

#16 JohhnyAB on 02.26.19 at 5:31 pm

As I see it, the housing industry has become such a big thing that the government is going to bend over the requests of the house owners. The moisters are going to pay 70% of their disposable income for the housing. The political parties are going to dance under the tune of the real estate boards just to stay in power and the population is going to be even more indebted, which is going to drive the house prices even more up. What a screwed up situation. Personally, I’m staying out of it.

#17 yorkville renter on 02.26.19 at 5:33 pm

#6 – A better move would be to increase the amount that can be removed tax-free from an RRSP to $50k per holder.

_____

That’s my guess, and I would absolutely support it (as I’m hoping to buy in 2020 or 2021)

#18 yvrguy on 02.26.19 at 5:36 pm

PPC is just gaining momentum. Pretty amazing to have gotten 11% of the vote in Bnby South having only existed for 5 months.

They may not win 2019, but they’ll obliterate the polls in 2023 after we suffer one of the worst recessions in recent memory.

Maxime’s platform makes the most sense out of any in Canada. Nice to be able to vote for something you believe in, instead of only against bum in office.

Do your own research.

Good interviews to start:

https://www.youtube.com/watch?v=TIu_JBlI6PU

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

After watching those, I was an instant fan.

#19 I’m stupid on 02.26.19 at 5:42 pm

The question is; who are the largest shareholders of the big banks?

The answer themselves followed by each other. That’s right the largest shareholders of the 5 chartered banks are the other charted banks. So if one runs into trouble it will certainly spill over to the others.

I know that during the gfc the big banks diversified into the US but the fact remains that the majority of profits are made from Canadian related business.

I’m not suggesting a collapse of any big bank, I’m just making the point that they’re stakeholders in one another.

Only history will know if the SNC scandal created the environment to remove safeguards to protect the portfolios of the big banks that led to a collapse in our banking system. Not saying it’s going to happen but the odds aren’t zero.

#20 Ponzius Pilatus on 02.26.19 at 5:44 pm

Is there no end to the madness?
1.5 mill for a 3 bed townhouse in Richmond’s worst community.
Amenities:
1 minute away from the most congested intersections in the Lower Madland.
This was the site of Vander Zalm’s Fantasy World.
Maybe that explains it.
https://www.ovlix.com/property/abxkRF-11-10800-No-5-Road-Richmond-BC-V6W0C2

#21 Mean Gene on 02.26.19 at 6:05 pm

Does the OSFI have to listen to the politcians, or is it completely independent like the Bank of Canada?

#22 AGuyInVancouver on 02.26.19 at 6:15 pm

I’m surprised we didn’t get a blog post on this, given how tied in it is to real estate:

“B.C. real estate audits reveal widespread tax evasion
Taxman recovered over $140 million in nine months last year from B.C. real estate audits; new speculation tax expected to curb tax avoidance..

..Tax collectors are getting more efficient, it appears, as 1,470 B.C. real estate audits from April 2015 to March 2016 generated only $18.5 million in evaded taxes.

In B.C., $173.4 million of the $310.4 million recovered in taxes – from 6,861 audits since April 2015 – is income tax related (lifestyle audits of owners of expensive homes and capital gains assessments on home sales). The other portion relates to unreported GST on sales and house flipping. Ontario’s 31,749 real estate audits since April 2015 brought in $547.4 million. Overall, the CRA also applied $70.9 million in penalties for knowingly making false statements..”
https://biv.com/article/2019/02/bc-real-estate-audits-reveal-widespread-tax-evasion

#23 Long-Time Lurker on 02.26.19 at 6:21 pm

Jim Rickards on Twitter
11:19 AM – 24 Feb 2019

Another Bitcoin pump-and-dump successfully completed. #MissionAccomplished

https://twitter.com/JamesGRickards/status/1099750602580676615

#24 Islander on 02.26.19 at 6:23 pm

Talk about a nation of addicts.
Unbelievably sad.

#25 Sebee on 02.26.19 at 6:28 pm

Lower RE prices are in direct conflict with government needing tax revenue, so there you go.

Didn’t you tell us Toronto lost $100m in tax revenue last year because of lower number of sales alone? You think these politicians aren’t missing this $100m?

#26 Joe Money on 02.26.19 at 6:34 pm

Sign the petition!

“Mr. Morneau, don’t drive up home prices by loosening lending standards.”

https://www.change.org/p/bill-morneau-mr-morneau-don-t-drive-up-home-prices-by-loosening-lending-standards-f32354e9-d7e5-4852-b2b4-d26365433e08?recruiter=938946145&utm_source=share_petition&utm_medium=copylink&utm_campaign=share_petition

#27 JSS on 02.26.19 at 6:40 pm

Scotia bank – dividend increase!

Woo hoo! Rub tummy

Next up…TD and CIBC…this Thursday.

Record Canadian debt, record bank dividends…

#28 CHERRY BLOSSOM on 02.26.19 at 6:41 pm

Too many people wanting the same thing. Way too many people for the infrastructure of medical and housing and even car insurance companies. Canada not ready for this many human needs. My friend had a stroke the other day and had a NINE hour wait in emergency. She said they just don’t care. So don’t get sick.

#29 Groundhog Day on 02.26.19 at 6:45 pm

For over a decade, posters have pointed out that the government would intervene to prop up any falling market. And for a decade, they were mercilessly ridiculed as wishful thinkers, arm chair economists, and out to lunchers.

And yet, here we are in 2019 – 10 years into a bubble, with prices doubling and tripling in the hotest markets, and the government will introduce stimulative measures in a few short weeks.

If bears want to refute this, they need to step up their game and bring in comparisons from other jurisdictions showing that market interventions failed. Otherwise, musings about how the federal changes won’t make a difference, are useless.

The majority of posters here ascribe a level of intelligence to the average buyer that is unwarranted – the average buyer is an idiot that does not look at trends, market fundamentals, or heed the advice of patience and prudence. No, the average buyer will have heard on March 19th that the government wants them to buy and that its all safe to do so, because the governments wants high house prices.

Renters lose again. Owners win for the 10th year in a row after the Great Financial Crisis.

#30 dakkie on 02.26.19 at 6:45 pm

People Using Home as ATM at RECORD Level! Extreme Debt They Can’t Pay Back!

https://www.investmentwatchblog.com/people-using-home-as-atm-at-record-level-extreme-debt-they-cant-pay-back/

#31 Paul on 02.26.19 at 6:48 pm

17 yorkville renter on 02.26.19 at 5:33 pm
#6 – A better move would be to increase the amount that can be removed tax-free from an RRSP to $50k per holder.

_____

That’s my guess, and I would absolutely support it (as I’m hoping to buy in 2020 or 2021)
————————————————————————————————
Finally we found the Greater Fool,
Remove R.R.S.P tax free, lol
Did you vote for legal weed as well?

#32 young & foolish on 02.26.19 at 6:49 pm

“200 years of world housing bubble history shows that all housing bubbles inevitably go through major price corrections … ” — Victoria

No doubt, prices are connected to interest rates, and they have been low. And just like equities and other forms of debt, when rates rise …. well you know the rest. Good luck with that 6% in 2019 …. may we fair better than last year!

#33 You know on 02.26.19 at 6:54 pm

So let’s see now, the gumernment giveth and the bank of Canada taketh away with one or possible two interest rate hike this year…hum…interesting…seems things really go nowhere.
Another suck and blow tactic…lol

#34 Dolce Vita on 02.26.19 at 7:02 pm

The RE party’s over.

All that’s left to see now is how low it can go.

Libs can’t turn that around before the election…if they last that long.

For the RE et. al. pumper’s here on the Blog, advice:

Apply to Walmart, they’ll need Greeter’s.

———————————–

#1 Mike

Not lately. – Garth

…or Formerly:

1969 to 2018 Avg. Toronto Home Price CAGR = 2.9%
1969 to 2018 S&P 500 CAGR = 8.9%

Not that much different in the rarefied and cold air of La La Land.

Speaking of cold air and La La Land:

So, how are all those cherry blossoms doing you were all so smug about last month?

You know, the one’s that all froze, fell to the ground and shattered but you couldn’t see for the snow.

All the best to the YouTube Victoria dude that shoveled his snow with a lawn mower. I wonder how that worked out for him (Tip: multi-viscosity 5W30)?

#35 MF on 02.26.19 at 7:08 pm

#31 Paul on 02.26.19 at 6:48 pm

“Finally we found the Greater Fool,
Remove R.R.S.P tax free, lol
Did you vote for legal weed as well?”

-Ouch lol.

MF

#36 yvrguy on 02.26.19 at 7:10 pm

#29 Groundhog Day on 02.26.19 at 6:45 pm

Renters lose again. Owners win for the 10th year in a row after the Great Financial Crisis.

///////////

Thanks realtor.

Meanwhile in America…

https://www.marketwatch.com/story/the-current-bubble-could-take-two-paths-on-this-chart-one-is-nastier-than-the-other-2019-02-26

Oh right, it’s different here. Fundamentals don’t matter.

We didn’t correct and kept climbing in 2008, so we’re gonna suffer twice the fall.

#37 crowdedelevatorfartz on 02.26.19 at 7:13 pm

Well.
I’ve seen it all.
I have a few resident crows around my workplace.
Occasionally I will feed them out of date meat or fish from lunch, dinner, etc.
They are damn appreciative during this cold snap.
They have begun bringing me “presents’…. as incentive to feed them.
They always drop the “present” in a plant pot, squawk a few times and fly up in the nearest tree to wait.
Its stuff like, shiny metal bits, colored ribbons, etc.
Today?
Someone’s 1 gram plastic zip lock pack of legal pot…
It smelled pretty good.
I dont smoke so I gave it to a coworker.
The crows got her lunch.

Who says there’s no money in the trees…..

#38 Dolce Vita on 02.26.19 at 7:19 pm

#30 dakkie

“People Using Home as ATM at RECORD Level! Extreme Debt They Can’t Pay Back!”

MORON’S.

For the math challenged idiot savants at Investment Watch: Canadians held $12 trillion in assets at the end of 2016.

Total Household Credit Dec. 2018: $2.17 trillion.

-StatCan, Bank of Canada

As f***ing if they can’t pay it back.

#39 MF on 02.26.19 at 7:20 pm

#25 Sebee on 02.26.19 at 6:28 pm

Lower prices and increased affordability will greatly increase the number of transactions, along with tax revenue.

The delusional prices in the GTA are the problem, and sellers are to blame.

MF

#40 Barb on 02.26.19 at 7:20 pm

#6 Smartalox on 02.26.19 at 5:07 pm

“As for HELOCs: maybe the feds should tax them: like liquor, tobacco, pot and fuel they’re very popular with consumers, to the point that they’re viewed as a ‘necessity’, even if they’re not. These things are all popular, but must be used in moderation. A small tax (maybe 0.5% on outstanding balances) would motivate people to pay down their debts.”
——————————–

…but must be used in moderation?

And you will define the degree of that moderation?

So anything that ISN’T popular with a population can have taxes reduced?

#41 joe on 02.26.19 at 7:33 pm

7% house price correction for first time buyers makes homes as affordable as an increase to a 30 year amortization does at current prices.

https://mobile.twitter.com/rosskay/status/1100436735559954432

#42 Lisa on 02.26.19 at 7:34 pm

“After more than a year in play, it is now apparent that the stress test is causing more harm than good, effectively closing a door in the faces of first-time homebuyers.”
I ‘m sorry… It’s not the rates or the stress test that makes housing unaffordable, it’s those stupid high prices PLUS higher rates.
People were still able to buy in the early 80s when rates were sky high. That’s when my parents bought their first home in Hamilton for $48k. That was a deal!

#43 Robert Ash on 02.26.19 at 7:37 pm

It would be great if Garth would offer his opinion concerning the lack of participation evidenced, in the Voter Turnout in Burnaby. The greatest problem for the new hires, and younger citizens, is voter apathy. What has caused the masses, to support Big Government, to this extent, that there is such complacency. What has changed, and it is positive for the country, to give up the practice of selecting government, when the same government, exact such a high price for many of the patrticipating Tax Payers… With 70% of Government revenues used as Transfers to Individuals, is it time for an audit of what is important and what should be eliminated… It was a while ago that I started out after University, but we sure seemed to be able to hold on to a lot more cash then than now….

#44 Willy H on 02.26.19 at 7:37 pm

Markets did not get us into this housing mess.

Politics and poorly calibrated central banking policy did!

If the Grits are about to cave on the OSFI stress test order to shore up our one-trick pony economy it will only backfire in the mid-term.

For diverse economic growth to take place we need to free up billions in mis-allocated resources we currently park in real estate and divert it towards value-add private sector investment which will in turn drive healthy diverse consumption.

If we are going lubricate moisters with with government funded incentives and almost-free borrowing we are likely headed for the kind of mess Australia finds itself in today!

https://www.youtube.com/watch?v=smPR0s2W-Ck

https://www.youtube.com/watch?v=vRSdiq3sOTc

#45 Kilt on 02.26.19 at 7:38 pm

#6 Smartalox – Everyone I know who borrowed from their RRSP to make a down-payment have made no effort in paying it back. I don’t think they realize that as the years go by and they slowly move up in the tax bracket, they are paying a higher tax rate on the money they borrowed as it gets added to their income.
Doubling the HBP to 50K also does nothing to prevent the gifting issue. Anyone with 50K room in the RRSP could be gifted money from mom, then use their tax return and the 50K as a down-payment. Still doesn’t mean they can afford the mortgage if rates go up another 2%.

Stress test is still a better route.
But I am biased. Overweight Canadian banks and looking to buy a rental property at much lower prices than they are now.

Kilt

#46 Smartalox on 02.26.19 at 7:44 pm

#31 Paul:

What is the Home Buyers’ Plan (HBP)?
The Home Buyers’ Plan (HBP) is a program that allows you to withdraw up to $25,000 in a calendar year from your registered retirement savings plans (RRSPs) to buy or build a qualifying home for yourself or for a related person with a disability.

https://www.canada.ca/en/revenue-agency/services/tax/individuals/topics/rrsps-related-plans/what-home-buyers-plan.html

One can currently take up to $25k from an RRSP account to buy a home, without paying taxes on the amount removed. The amount removed must be replaced within 15 years (with the repayment portion in after-tax dollars) otherwise the amount of the withdrawal will be taxed on top of regular income.

#47 Dolce Vita on 02.26.19 at 7:47 pm

You know, we are teetering between recession or slow growth.

It’s really difficult to tell what will happen.

BAD NEWS:

-2/3 of the last GDP reports negative growth. Probably another month of negative growth due to the shitty weather and 3 year low XMas retail sales.
-RE dropping like a bad habit.
-Consumer Spending dropping to near 2007/2008 lows.
-High debt load of about 170%.

GOOD NEWS:
-As mentioned, Canadian’s have $12 trillion of wealth and about $2.2 trillion of household debt.
-Only 33% of that wealth is in RE.
-30% of Canadians are debt free.
-About 38% of Canadians hold a mortgage.

Job Reports are shitty economic indicators as they are Seasonally Adjusted, bear no resemblance to the actual or Unadjusted numbers, never provide the average wage for the new jobs created and in a recession, Unemployment lags considerably the onset of recession.

What happens in the next Qtr’s worth of GDP reports will tell the story of where we are headed economically.

I’d normally say flip a coin but it is Consumer Spending dropping to a near decade low, 60% of the economy, that ought to scare anyone (INCLUDING YOU GARTH). RE dropping in value is an irritant as people will feel “less wealthy” and spend less (Wealth Effect).

I think we are headed for recession.

Too much doom and gloom out there and hard to find any good news other than that manufactured by RE Boards and those that suckle from that industry.

As usual, Mr. Consumer decides and not The Market nor the Liberals. We’ll see what happens in the next Quarter.

Therein will lie the truth.

#48 Smoking Man on 02.26.19 at 8:00 pm

Won’t make a differance. World is in a beer market regarding real estate. Thousands of canceled and terminated listings in GTA the second owners sense there is some life in the real estate market mass listings. Supply and Demand rules.

Any athletic dudes out there. Instant fame and fortune. Buy a dress put on some make up, try out for an Olympic Girl’s team. Now accepting trans athletes.

#49 not 1st on 02.26.19 at 8:08 pm

This is great. We need the millennials ALL in big time. And voting for socialism too. They will eventually be trapped in Canada with big mortgages a 50c dollar and a lot of bewilderment while retirees and smart money sit in the sun.

#50 the Jaguar on 02.26.19 at 8:09 pm

Amazing that people would rather blame the ‘stress test’or OSFI or the ‘bad old banks’ versus stepping back and really looking at the market fundamentals. Better they ask themselves this : if a measly 300.00 or so a month that the ‘stress test’ adds to their total monthly debt creates such a strain on their ability to make payments ( using time tested, proven affordability models) why in hell would you put yourself and you family in that jeopardy? Just to satisfy housing lust? Draining their savings, borrowing from family members, rolling the dice in the mad hope that real estate always goes up. It’s like a front row seat to a disaster at a casino, watching some gambler drain every last dime he has because he lacks the vision or self awareness to walk away from the table. I guess some overwhelming need to ‘fill up’ on ‘stuff that will impress others’ drives this behaviour. What a blessing it is to understand the real things that matter in life. Love, family, friendship, making a difference in someone or some creatures life, health. Travel, great meals with good friends, adventures. It’s a long list, and involves no stress test.

#51 Remembrancer on 02.26.19 at 8:12 pm

#39 MF on 02.26.19 at 7:20 pm

The delusional prices in the GTA are the problem, and sellers are to blame.
——————————————————
Huh? Sellers are only selling at what buyers are paying…

#52 Remembrancer on 02.26.19 at 8:16 pm

About the picture…

Hey MyLawBC, here’s an action plan for dealing with the bank – stop borrowing to spend money you don’t have on stuff you can’t afford…

There, no legal fees or lawyer’s photocopying charges required…

#53 Acdel on 02.26.19 at 8:32 pm

#50 the Jaguar

Clap,clap,clap, you win the internet for this evening with the most sensible post! Cannot wait to read the feedback on ….. why…. blah, blah, blah!! :)

#54 young & foolish on 02.26.19 at 8:33 pm

The most telling stat: ” … real estate-related activity accounts for about a quarter of the entire economy (more than oil and factories combined) …. ” — GT

Are we officially a “service” economy now?

#55 For the queen on 02.26.19 at 8:44 pm

#48 Smoking Man on 02.26.19 at 8:00 pm
Won’t make a differance. World is in a beer market regarding real estate.
….

Seems more like a G and T market.

#56 crowdedelevatorfartz on 02.26.19 at 8:49 pm

@#42 Lisa
“That’s when my parents bought their first home in Hamilton for $48k. That was a deal!”

++++

A friend of mine purchased a house in East Vancouver in 1970 for $17,000.00.
When he sold it a few years ago for $875,000.00 the young realtor asked him what he paid for it, ” $17,000.00…”
“You only paid $70,000.00 for this house!”
“No, I paid SEVEN-TEEN thousand.”

The realtor was gobsmacked.

It doesnt matter what the Federal Liberals do to try and buy Millenial votes……houses are ridiculously overpriced in Vancouver and with the BC NDP Govt determined to chase every last non resident owner into tax purgatory….
Houses and condos are still going to drop.

#57 Millmech on 02.26.19 at 9:04 pm

#1 Mike
January market returns have put 6yrs of rent into my pocket, I guess I could buy and have the next 25 years of potluck social innings with my house poor acquaintances.
Each to their own.

#58 Asterix1 on 02.26.19 at 9:08 pm

I do hope that Moisters are smart enough to realize that the stress test is actually good for them (and all Canadians)!

Voting against T2 should be the line of thinking if they are selling out to the RE cartel.

Pretty sure T2 is done if he pumps the cartel back up. Let the cycle continue its normal downward progression. It’s what Canada needs to survive in the short/long term.

PS: Presently in Miami, great city, beautiful beaches/weather/food/cultures. When I compare homes in this area vs GTA, makes you laugh. GTA pricing is set to ignorant levels!

#59 ImGonnaBeSick on 02.26.19 at 9:09 pm

#47 Dolce Vita on 02.26.19 at 7:47 pm

Yet this; Canadian stocks stage ‘surprise’ comeback, jumping 12% this year – https://www.cbc.ca/news/business/tsx-stock-markets-1.5032544

#60 acdel on 02.26.19 at 9:15 pm

Great Story!

https://www.cbc.ca/news/canada/calgary/105-year-old-calgarian-businessman-birthday-marriage-1.5034548

#61 Shawn Allen on 02.26.19 at 9:20 pm

Stupid as Well as mis-Informed?

#19 I’m stupid on 02.26.19 at 5:42 pm claimed:

The question is; who are the largest shareholders of the big banks?

The answer themselves followed by each other. That’s right the largest shareholders of the 5 chartered banks are the other charted banks.

*****************************
Where did you pick up that particular completely fake news? The banks own very little to nothing in the way of common shares of anything much less of each other.

Also, by law no one can own more than 10% of any of the large Canadian banks. So, there are no controlling shareholders. The big banks are basically controlled by their Board and or the CEO (many Board members were nominated by the CEO and are thus somewhat beholden to the CEO).

The banks are very widely held.

#62 Nonplused on 02.26.19 at 9:35 pm

I’ve talked about this before, but it’s been a while and the point is worth repeating.

Home prices will not go down so long as the major source of funding for civic politicians and their campaigns remains property developers.

Read that again and let it sink in.

The gig is simple, the people who want high real estate prices so they can make a fortune building a house pay for the election campaigns of politicians who will restrict building permits. It’s supply side economics, done backwards. It’s like a teacher’s union. It’s why you can’t rent out your basement. It’s why you can’t tear down your 80 year old house and put up a 4 unit condo because you are zoned R-1, even though you a right downtown. Supply is being intentionally restricted. There should at this point be no zoning restrictions on any property within walking distance of downtown Calgary, yet there still are. At the very least they should all be R-4.

Sure, low interest rates added fuel to the fire, but what also happened is that builders were making $100,000 profit on a $500,000 unit. How could that happen without supply restrictions? It can’t. Back when my dad made his living building things 10% was the profit, so that home should have cost $440,000.

There is a certain venerated family in Calgary that made their fortunes years ago by buying up all the farm land around Calgary, Regina, and Edmonton, and then growing hay on it. And it was a leveraged bet to boot. But boy did it work out because they could leverage that monopoly to make sure that only so many new houses were coming online. And they bought off the politicians too.

This situation remains especially on display in Calgary (well and also Edmonton and Regina), where we are surrounded with land that could be turned into housing in every direction including up, but houses can’t be built fast enough. Heck we still have sections of land within the city limits that aren’t under development. Why? You can build a house there at a profit. Maybe a small house at a small profit but it can be done. The building is not underway. Contrast that with Houston, which has at least 4 times the population probably much larger if you consider the suburbs like Sugarland where you can get a mansion with a pool and an outdoor kitchen for the same price as a 25 foot lot with a 2 story house that feels like 2 trailers stacked on top of each other in Calgary. Why? Houston doesn’t have zoning restrictions. If you own a piece of property in or near Houston and you would like to subdivide it and build houses, you subdivide it and build houses. That’s all there is to it. Their building codes are a little lighter too, because the government’s approach is that if you build a house that hurricane Big Bad Wolf is going to blow away, that’s you’re problem. Other people will say “well but they have a lot of Mexicans building those houses” which is true, but we have a lot of unemployed immigrants who can carry 2×6’s around too.

The problem with the Canadian housing market is simple: Collusion between interested parties and the civic governments. We have the second largest land mass on this planet earth, and only 36 million people. We have lots of trees to build houses out of. We have lots of concrete and steel to build high rise apartments. We have lots of our own energy to run the equipment. There is no way to explain using market theory why our housing prices are not the lowest in the world, no matter what interest rates are. What we are experiencing is one of the biggest cases of collusion the world has ever seen. Trump has nothing on your city counselor.

It is often said that land is a good investment because they aren’t making any more of it. This is patent bullshit. Go visit Hong Kong or New York. The sky really is the limit.

#63 Sail Away on 02.26.19 at 9:39 pm

#38 Dolce Vita

Morons doesn’t usually have an apostrophe. Maybe only smart people like you spell it that way.

#64 Vampire studies on 02.26.19 at 9:55 pm

6 Smartalox – here’s an interesting take on taxing debt.

I have one of those handy corporations. It allows for some tax flexibility. A business associate has one too.
But he lives large. A few years ago – time of the GFC –
business drops. I was fine (still saved) but he went beyond his earnings and borrowed on LOC. So now business is good, and he is trying to pay it off. But that means he has to “realize” the income from his corp, and with no more income sprinkling, he will have to declare all or most of the corp income as his wage.

So he is paying more tax in an effort to reduce debt.

April 30th could prove interesting.

#65 Lisa Power on 02.26.19 at 10:03 pm

Re:#62 Nonplused -You are speaking the truth that few want to acknowledge in this country.

#66 Vampire Studies on 02.26.19 at 10:14 pm

62 Nonplused – Have you checked the price to income
ratios for Edmonton and Houston?

#67 PastThePeak on 02.26.19 at 10:49 pm

#5 Victoria Real Estate Update on 02.26.19 at 5:04 pm

Well, there is certainly a limit to consumer debt when income growth is low. Eventually the consumer hits a debt wall where one either cannot borrow any reasonable amount more, and no longer wants to. Doesn’t matter what the gov’t tries – you just can’t prime the pump past a certain point.

The data seems to indicate that Canadian consumers are almost there…

#68 yorkville renter on 02.26.19 at 10:53 pm

#31 – hey Paulie, any idea what my wife and I have in our RRSP and unregistered accounts? of course not.

4 people in a 2 bed condo can last only so long before it gets old. Some of us actually need a house and can afford to buy one without blowing our brains out on debt…

But if your comment makes you feel better about yourself, go ahead – you do you.

#69 SW on 02.26.19 at 10:55 pm

#28 CHERRY BLOSSOM on 02.26.19 at 6:41 pm
“Too many people wanting the same thing. Way too many people for the infrastructure of medical and housing and even car insurance companies. Canada not ready for this many human needs. My friend had a stroke the other day and had a NINE hour wait in emergency. She said they just don’t care. So don’t get sick.”

I don’t know where your friend is living CB, but my mother had a stroke a month ago in Eastern Ontario and was taken to hospital by ambulance. She was in Cornwall Hospital for 7 days and had very good care.

Now at home, she is having many weekly home visits from nurses in the rehab team (Occupation Therapy, Physiotherapy, Speech Language Pathology) and home care. Assistive devices were ordered installed by the team.

Follow up by GP and with a special clinic for 3 months.
I am very pleasantly surprised with it all. Excellent, excellent system.

I have also noticed that the integration of digital records is proceeding fairly well. Records from different hospitals and specialists are available to medical teams on-line. This is going to make a difference.

#70 DON on 02.26.19 at 10:55 pm

#59 ImGonnaBeSick on 02.26.19 at 9:09 pm

#47 Dolce Vita on 02.26.19 at 7:47 pm

Yet this; Canadian stocks stage ‘surprise’ comeback, jumping 12% this year – https://www.cbc.ca/news/business/tsx-stock-markets-1.5032544
*************

Really? The markets look skiddish and hanging off China/US trade talks. What about main street Canada and consumer spending?

#71 Nonplused on 02.26.19 at 11:02 pm

I should add one more point. Because our housing bubble was in large part created by developers colluding with local politicians, when interest rates normalize the housing collapse will be far greater than could be explained by interest rates alone. I think Garth does his calculations based on economic models, which would imply that the relationship between house prices and interest rates is the only factor, but watch what happens when the collusion between developers and civic counselors is understood by the public. People can kind of accept the cost of money. They can’t accept being cheated. In sports where retribution is possible, players will risk ejection to make the point that something wasn’t fair. It’s human nature. We will actually die on that hill.

#72 DON on 02.26.19 at 11:06 pm

@50 the Jaguar

“Better they ask themselves this : if a measly 300.00 or so a month that the ‘stress test’ adds to their total monthly debt creates such a strain on their ability to make payments ( using time tested, proven affordability models) why in hell would you put yourself and you family in that jeopardy? ”

Nicely put!

When you are young timelines are so distant, paying a mortgage for 25/30 years is a distant concept to get, as we live in the Now World. We also have to take into consideration that potential buyers have now witnessed that prices don’t go up indefinitely so the meme has changed. We can’t assume that the younger millennial will want to engage in such extreme debt for an average home knowing that they will struggle to have a family.

Besides the froth is gone from the market and world wide the news on housing is negative even Hong Kong. Cycles.

#73 Midnights on 02.26.19 at 11:10 pm

I didn’t even look at the phone before it was mentioned.
How sad is that?

#74 Politico on 02.26.19 at 11:11 pm

Can anyone explain what is going on in Venezuela? Why do US politicians care what is going on there? Why threats to invade? I can’t figure it out.

#75 Politico on 02.26.19 at 11:25 pm

“A woman needs a man like a fish needs a bicycle” – Gloria Somebody.

Well yes but I’m sure fish would love to have a bicycle if they could. Cruise San Francisco.

#76 For those about to flop... on 02.26.19 at 11:38 pm

Recent sale report.

Court ordered sales in the current environment don’t usually work out too well, and this one was no exception.

The details…

2948 e 25th ave, Vancouver.

Paid 1.57 March 2017

Sold 1.34. January 2019

Originally asking 1.49

Assessment 1.50

Approaching 20% after expenses or 315k to the wrong side of can’t lose money in Vancouver real estate history…

M44BC

https://www.zolo.ca/vancouver-real-estate/2948-east-25th-avenue

#77 Smoking Man on 02.26.19 at 11:45 pm

My wife has been bonding and talking to young single chick moms in California. 30ish.

This beauty of a wife with no grand kids yet has been enjoying helping em with their babies , natural born nurturer she is.

The girls she talks too don’t want jobs. They want hunks , real men that can take care of them and fight off all asshole intruders so they can enjoy rasing their babies with out worry..

Feminism sucks they say. They don’t want to work for the man.

Ladies is it true?

Is my wife right with her observations.

#78 Austruck on 02.27.19 at 12:12 am

This time any changes to mortgage legislation to make borrowing easier will have negative effects. The government is desperate but the trend has changed. There won’t be a reversal with easy money policies. We are moving to higher rates and a lousy economy..coming soon…time to get the house in order folks!

#79 Andrea L. Sargeant on 02.27.19 at 12:38 am

We talk to our teenage daughter about many of the things you write, including today’s blog, as best as we can. Her response was that in high school, there is an implicit expectation for required “tests”. It includes a daily rigour and preparation as well as an acceptance of an outcome. It seems pertinent and natural to us to gauge whether someone can CARRY a mortgage. Weakening the stress test for increased popularity and political power is not responsible. If that happens, are you saying that house prices will go up because then can or just that they won’t be reachable because people cannot afford them with such low qualifications? Furthermore, would you predict that housing starts would increase? That would be a shame and not what our environment or young people need to deal with as elders exponentially multiply in the next 2 decades. Lastly, our daughter says things like “…causing more harm than good….” is a narrow one-sided view which she wishes teachers would take to task in classrooms. Instead of repealing the health curriculum, it would be wiser to focus on introducing financial awareness, stress-management or mindfulness so people would be less materialistic.

#80 For those about to flop... on 02.27.19 at 12:49 am

Recent sale report.

Another 2015 purchase that bit the dust, nothing that funny about the results of this one, except maybe one day they will look back and laugh at their original asking price.

The details…

2149 w 35th ave, Vancouver.

Paid 3.15 April 2015

Sold 2.88 February 2019

Originally asking 5.18

Assessment 3.92, down from 4.62

So if I fire up the old Flopulator it tells me they were hit for the best part of 14% or not much daylight between them and a 450k hole.

Come, Mister tally man, tally me banana.

Daylight come and me wan’ go home…

M44BC

https://m.youtube.com/watch?v=PMigXnXMhQ4

https://www.zolo.ca/vancouver-real-estate/2149-west-35th-avenue

https://www.rew.ca/insights/89821/2149-w-35th-avenue-vancouver-bc

#81 Howard on 02.27.19 at 4:49 am

New Angus Reid federal poll out.

CPC 38%
Lib 31%

http://angusreid.org/snc-lavalin/

#82 Dolce Vita on 02.27.19 at 5:20 am

#59 ImGonnaBeSick

Yes, one of the +’s but then again, only a part of Cdn’s wealth and not a large portion of it (e.g., 33% of that wealth is in RE, 29% is in private pensions).

You have to take a step back and look at the larger picture of what Cdn’s are doing. They’re risk averse, something like 20% or so contribute regularly to RRSP’s, over $700 billion in unused contribution room 7 years ago, TFSA’s value in total is far less ($55 billion 7 years or so ago) – more now according to Garth.

I get you are trying to say invest instead and the market indicates bullish times but falls on deaf ears of the average Canadian. Most of the investing is done by the WELL HEALED such as read Garth’s blog. Look at recent wealth distribution stats and who profited the most: they represent the upper quintile only, 20% of the population.

Look at GDP over the next Quarter and what Mr. Consumer does and not Mr. Market or the Liberals or the hapless Economists say.

Look at Mr. Market over the past few years, if we were to believe it, we would have had at least a few recessions by now YET we haven’t.

#83 Buy? Curious? on 02.27.19 at 5:25 am

Real Estate prices around the world are declining! You’re not safe! Sell now or Sell Never! (SNOSN, trademarking that)

Quick question, Garth, all those DELETED comments, what are you going to do with them? You said you have SOOOO many, maybe write a new book?

#84 Dolce Vita on 02.27.19 at 5:31 am

#63 Sail Away

Have a care with the minutiae:

https://i.imgur.com/JhFBVbM.jpg

Observe the 5th Circle of Dante’s Internet Inferno.

A mere 2 Circle’s away from its bowels.

#85 Steven Rowlandson on 02.27.19 at 6:19 am

If the non union workingman (at or near minimum wage earner) can’t buy it on decent terms relative to income then it is in a bubble. When bubbles burst what is left is a very insignificant amount relative to the bubble. Hint: no soft landing for real estate.

#86 Hamsterwheelie on 02.27.19 at 6:58 am

We lucked out by ‘finding’ Hamilton in 2011 – we used brokers and starting with only $10,000 saved up as a deposit, bought our first 1900’s foursquare home downtown for $160,000. (Parents signed to back us up) Now that home would sell for approx $500,000. 4 houses in total were purchased between 2011-2017 and now we’re down to 2 with mortgages paid by rental income at about 10% return.
The new talking point round here is when do we sell for the max, invest it all and live in Mexico on the dividends?
The real estate thing is addictive, nowhere could we have made $290,000 tax free on a $10,000 investment – we ploughed it back into more housing and rental income so that should carry us decently.
I suppose it becomes a different game when your costs (renting) and income (from selling everything and investing) are actually fixed and not random balloon animals. Lol.
We’re pretty happy as we are but the cancer diagnosis has been a great clarifier to whats truly important – living somewhere warmer for at least half the year as a start :-)
Love hearing stories of others who’ve cashed out of real estate successfully. Cheers!

#87 IHCTD9 on 02.27.19 at 7:04 am

#37 crowdedelevatorfartz on 02.26.19 at 7:13 pm
Well.
I’ve seen it all.
I have a few resident crows around my workplace.
Occasionally I will feed them out of date meat or fish from lunch, dinner, etc.
They are damn appreciative during this cold snap.
They have begun bringing me “presents’…. as incentive to feed them.
They always drop the “present” in a plant pot, squawk a few times and fly up in the nearest tree to wait.
Its stuff like, shiny metal bits, colored ribbons, etc.
Today?
Someone’s 1 gram plastic zip lock pack of legal pot…
It smelled pretty good.
I dont smoke so I gave it to a coworker.
The crows got her lunch.

Who says there’s no money in the trees…..
____

That is hilarious! I really like crows, they’re smart as heck.

Years ago I saw a crow flying overhead with a pack of smokes in it’s beak. Players filter. I knew Crows were always up to something, but this was a new one. It landed on the roof of a pickup in the parking lot, and started picking away at the smokes. I walked closer to see there was a double chocolate doughnut upside down glued to the pack of ciggies via the chocolate on its’ top.

When my Dad was a kid, he had a pet Crow. He’d be way out in the back 40 plowing a field, and “Ucky” would sail over and land on his head for a visit (and a lunch treat). Dad said he was always stealing shiny things and stashing them somewhere. One day Dad decided he would watch him and find out where his hiding spot was. He found Ucky’s hoard in the crotch of some timber work up in the hay mound of their barn. Nuts, washers, nickles, dimes, anything that had a sparkle to it.

Gioachino Rossini’s “La gazza ladra” (The Thieving Magpie), has a section in in it that perfectly invokes a crow walking up and checking out something with bad intent. I had to look up magpies the first time I heard this piece to see if they are related to Crows (they are).

#88 Ace Goodheart on 02.27.19 at 7:05 am

SNC-T2 situation getting scarier each day.

From what I can see now, our PM’s office directly interfered in the prosecution of SNC, by requesting the attorney general to scuttle the prosecution in favour of a deal.

Grounds for doing so: So that SNC would not be barred from accepting government contracts (from the same government) for a ten year period.

Our attorney general said no.

She was fired and demoted, replaced with someone who would do as he was asked by the PMO.

This has basically destroyed the rule of law in Canada. We currently do not have rule of law at the Federal level.

T2 has basically admitted to the above, and his excuse is he was trying to save Canadian jobs. Which is a load of bunk. If SNC got barred from accepting government contracts, there would still be Canadian workers on those contracts, they would just be working for another company.

This was a set up to protect a Liberal friendly company, which company seems to make a lot of its money from contracts given out by the same government that fired our attorney general to protect it.

#89 earthboundmisfit on 02.27.19 at 7:12 am

#74 Politico …… Oil. It’s all about the crude, dude.

#90 Stormy Daniels on 02.27.19 at 7:47 am

Stressed out?

I don’t want that for you, Garth. But Michael will testify in about two hours.

Does Congress really need to know about you and Bandit and me and Fluffy in the park? Does Dorothy need to hear all that?

$130,000 by e-transfer will only take a few seconds.

Too-da-loo…….

#91 crowdedelevatorfartz on 02.27.19 at 7:57 am

@#44 Willy H

The best line in the Australian 60 Minutes investigation,
“You have more rights buying a toaster than an $800,000.00 Condo….”

#92 Tater on 02.27.19 at 8:00 am

19 I’m stupid on 02.26.19 at 5:42 pm
The question is; who are the largest shareholders of the big banks?

The answer themselves followed by each other. That’s right the largest shareholders of the 5 chartered banks are the other charted banks. So if one runs into trouble it will certainly spill over to the others.

I know that during the gfc the big banks diversified into the US but the fact remains that the majority of profits are made from Canadian related business.

I’m not suggesting a collapse of any big bank, I’m just making the point that they’re stakeholders in one another.

Only history will know if the SNC scandal created the environment to remove safeguards to protect the portfolios of the big banks that led to a collapse in our banking system. Not saying it’s going to happen but the odds aren’t zero.
—————————————————————-
A user name that perfectly matches the content, well done.

The banks don’t own shares in other banks. Their asset management arms hold them on behalf of clients. If bank stocks go down, the clients are hurt not the banks.

As an example, RBC owns 10.8mio shares of CIBC. If you look at the filings, you’ll see they’re all held by RBC Asset Management entities.

#93 TurnerNation on 02.27.19 at 8:01 am

TD Bank no longer advertises a Mortgage Vacation (skip the payments). I suspect people keep just rolling their HELOC instead. Make min payment, withdraw it all next week.

— Low voter turn out? In Toronto mayor election the poorest areas had lowest turn out. Map here.

https://seanmarshall.ca/2019/01/13/voter-turnouts-in-the-2018-toronto-municipal-election/

Read in it what you will: apathy, complaining or no time.

#94 Tater on 02.27.19 at 8:12 am

Let’s say that they bring back 30y mortgages, allow 5% down up to 1.5mio and 50k from RRSPs.

You’d need a household income of 230k or so to be able to buy that house. And you’d be pretty stretched. In the GTA the top 90% cut off is 100k and the top 95% is 130k.

How many of these couple do you think are out there? And how many of them don’t realize they could rent that same house for 3500 or so per month vs a mortgage and prop taxes of 6800?

The credit expansion phase is over. Now comes the contraction.

#95 crowdedelevatorfartz on 02.27.19 at 8:23 am

@#87 IHCTD9

Yep crows are definitely smarter than seagulls.
Put a bit of food out and a crow will sit and look for a minute. Make sure its not a trick. Swoop in. Grab as much as it can and fly away to hide it. Come back grab some more and hide it in a different place, repeat until all gone.
A seagull will fly down and then start squawking to everyone in Gull speak, ” Food! Food! Food! I have FOOD here!”
And wont stop screeching until tons of other gulls have arrived.
Then, the brainless moron will proceed to fight all the other seagulls that show up for the food…… quite the feeding strategy.
Gulls ….Stupid as a stick.

#96 crowdedelevatorfartz on 02.27.19 at 8:26 am

@#88 Ace Goodheart
“This was a set up to protect a Liberal friendly company, which company seems to make a lot of its money from contracts given out by the same government that fired our attorney general to protect it.”
+++++

Quebec voters dont care.
Keep your hands off their beloved SNC-Liberallan.

The Charbonneau Commission exposing bribery and corruption in Quebec was a complete waste of taxpayer dollars.

#97 yorkville renter on 02.27.19 at 8:42 am

#95 – there’s an incredible doc on crows and how intelligent they are, even using sticks as tools and warning other crows about dangers in the wild.

I forget the name, but it’s worth a google and a view

When did this become a crow blog? – Garth

#98 Alistair McLaughlin on 02.27.19 at 8:53 am

@#68 Yorkville renter, you got a tax deduction for every penny you put into those RRSPs. Now you want to take $25K out without ever having to put it back in, nor pay the tax back? Um… no, that’s not going to happen, nor should it. If you can afford to buy, go ahead and buy. You don’t need a tax exemption on $25K for doing so.

#99 n1tro on 02.27.19 at 9:09 am

Free $20 for Canadians. From similar people who brought your the bread fixing scandal comes the CRT fixing fiasco.

http://www.crtclassactioncanada.ca/

#100 IHCTD9 on 02.27.19 at 9:19 am

#95 crowdedelevatorfartz on 02.27.19 at 8:23 am
@#87 IHCTD9

Yep crows are definitely smarter than seagulls.
___

Disney nailed those gulls in “Finding Nemo”:

https://www.youtube.com/watch?v=H4BNbHBcnDI

Seagulls are high on my don’t-like list of birds – right up there with starlings…

#101 Tater on 02.27.19 at 9:27 am

#98 Alistair McLaughlin on 02.27.19 at 8:53 am
@#68 Yorkville renter, you got a tax deduction for every penny you put into those RRSPs. Now you want to take $25K out without ever having to put it back in, nor pay the tax back? Um… no, that’s not going to happen, nor should it. If you can afford to buy, go ahead and buy. You don’t need a tax exemption on $25K for doing so.
—————————————————————–
Do people really not know how the HBP works?

Yes, you have to repay the money. You have 15 years to do it, so $1,666 per year needs to be contributed each year. You don’t get a tax refund on these contributions. If you don’t make an RRSP contribution in a year, the $1,666 gets added back to income and you are taxed on it.

#102 Howard on 02.27.19 at 9:36 am

#97 yorkville renter on 02.27.19 at 8:42 am
#95 – there’s an incredible doc on crows and how intelligent they are, even using sticks as tools and warning other crows about dangers in the wild.

I forget the name, but it’s worth a google and a view

——————————————-

Crows and ravens have also been shown to recognize people’s faces and are capable of communicating quite complex extraneous info (eg “beware – there is a hawk circling a nearby field in that direction”). They can also remember hostile farmers who shot at them and will specifically avoid flying over the same area where the incident occurred. They are also capable of play, which is extremely uncommon amongst birds and a sign of high intelligence.

They’re basically the Einsteins of the bird world. Even more intelligent than macaws.

#103 yorkville renter on 02.27.19 at 9:37 am

#102 – Thank you, Tater.

I put in $25k (hopefully $50k soon), get the tax rebate, amd then amortize that income over 15 years.

It’s a no brainer

#104 IHCTD9 on 02.27.19 at 10:10 am

#79 Andrea L. Sargeant on 02.27.19 at 12:38 am

___

Extending mortgage length to 30 years, castrating the B20 stress test, and allowing fat chunks of cash to be vacuumed out of an RRSP for a down payment empowers buyers. This essentially makes them “richer”.

If buddy is selling a home and buyers are “poor” due to restrictive policy, then the houses sit until the price drops to match what the market will bear.

If 10 kids show up flush with new buying power and bid up every house on the block – then the price will quickly rise to (again) match what the market will bear.

End result is that the house costs more, the borrowing costs more, and the monthly payment stays the same.

So yes – homes will actually go up in price from where they are right now if buying power is increased.

#105 Mattl on 02.27.19 at 10:36 am

#85 Steven Rowlandson on 02.27.19 at 6:19 am
If the non union workingman (at or near minimum wage earner) can’t buy it on decent terms relative to income then it is in a bubble. When bubbles burst what is left is a very insignificant amount relative to the bubble. Hint: no soft landing for real estate.

——————————————————-

In any market Steven? So a guy working at Tom Hortons should be able to buy a house in Kits, or in the Beaches? How big a house? Waterfront in West Van?

There are places in Canada, lots of them, where low wage earning savers can get into RE. It will be a one bedroom apartment in a questionable neighborhood but that is the price you pay for a lifetime of crappy wages.

I mean anyone that can work a shovel can make 15-20 bucks an hour the past 15 years so I struggle to understand why someone that settles for a job at the local pet store should be owed a nice house at a low price.

#106 Headhunter on 02.27.19 at 10:43 am

Nonplused
The problem with the Canadian housing market is simple: Collusion between interested parties and the civic governments. We have the second largest land mass on this planet earth, and only 36 million people. We have lots of trees to build houses out of. We have lots of concrete and steel to build high rise apartments. We have lots of our own energy to run the equipment. There is no way to explain using market theory why our housing prices are not the lowest in the world, no matter what interest rates are. What we are experiencing is one of the biggest cases of collusion the world has ever seen. Trump has nothing on your city counselor.
_________________________________________

#truth.. you may not agree or comprehend what this poster is saying but its the gospel truth. ARTIFICIAL SCARCITY game is rigged.

#107 Shawn Allen on 02.27.19 at 10:46 am

Non Plused at 62 on High Edmonton Home Prices

“There is a certain venerated family in Calgary that made their fortunes years ago by buying up all the farm land around Calgary, Regina, and Edmonton, and then growing hay on it.”

****************************
Your points on supply restrictions and zoning restrictions are great points.

It may not only be land developers that support zoning restrictions but also the local population. The existing neighborhoods oppose the house next door turning into a duplex much less a four plex. Politicians make decisions with unanticipated consequences.

Is the name of that Calgary family a secret? I believe one such family was the Melton family. Melcor Developments has built wealth over the long term but their returns on equity in the past ten years have not been good. The share price far worse.

Whoever held all that land around Calgary and Edmonton growing hay, how did that feel when interest rates were 18%? I am vaguely aware that Melcor was near the brink in some of those years.

Developers face high land costs for raw land. And it seems they face very high development costs. What are all the reasons that the direct cost to develop a building lot from a field is roughly $100,000?

#108 Alistair McLaughlin on 02.27.19 at 10:50 am

@#102 Tater, I understand how the HBP works. I had thought – mistakenly – that Yorkville renter was suggesting something different, when he quoted #6 Smartalox about removing $50K “tax-free”. I see now that they were both simply suggesting the HBP limit be raised. Something that I myself am in favour of.

That was my own misinterpretation of the conversation. Serves me rights for wading into a conversation without making sure I understood the comments first. I put my keyboard in my mouth. :)

#109 dharma bum on 02.27.19 at 10:53 am

What right does the government have to get involved?

Can the banks not simply increase their standards for mortgage lending?

Can they not tighten the requirements on their own to tighten borrowing requirements?

Are they so blinded by greed that they would knowingly put themselves at risk by overlending to those they suspect could have difficulty repaying?

Mind boggling.

“When the government is quite unobtrusive, people are indeed pure. When the government is quite prying, people are indeed conniving.” ~ Lao Tzu

#110 Blacksheep on 02.27.19 at 11:03 am

Steven # 85,

“If the non union workingman (at or near minimum wage earner) can’t buy it on decent terms relative to income then it is in a bubble. When bubbles burst what is left is a very insignificant amount relative to the bubble. Hint: no soft landing for real estate.”
—————————–
Sorry, that’s one of silliest comments I’ve read here in a long time. I hope for your sake this, is not the bench mark being used to assess when it is ‘right time’ to buy RE.

#111 jess on 02.27.19 at 11:16 am

https://www.cbc.ca/news/business/canadian-startup-properly-offers-new-way-of-buying-and-selling-homes-in-calgary-1.5032771

=========

Anonymous Company Owners

Anonymous companies are getaway cars for the world’s criminal and corrupt – we must take away the keys. We’re pushing governments to change laws and bring business into the open
The current financial system makes it simple to hide and move suspect funds around the world. You can quickly and easily set up layer upon layer of paper companies, crossing borders and jurisdictions and making it almost impossible for law enforcement to track down the real human being behind the money. Corrupt politicians, tax evaders, terrorists, drug gangs, fraudsters and other criminals are all able to cover their tracks in this way.

Global Witness wants to fix this loophole, in its efforts to tackle the root causes of corruption, poverty and lots of other problems.”

https://www.globalwitness.org/en-gb/campaigns/corruption-and-money-laundering/anonymous-company-owners/#more

#112 Dogman01 on 02.27.19 at 11:25 am

More problems with Calgary Condo’s:

https://www.cbc.ca/news/canada/calgary/calgary-leaky-condo-special-assessments-city-engineer-inspections-1.5034644?cmp=rss

There is always risk with stuff you own.

Interesting proposition:
They pay less but your Real Estate becomes “Liquid” a Liquidity premium:

https://www.cbc.ca/news/business/canadian-startup-properly-offers-new-way-of-buying-and-selling-homes-in-calgary-1.5032771

#113 NotLegalAdvice on 02.27.19 at 11:35 am

#117 IHCTD9 on 02.26.19 at 2:02 pm
#113 espressobob on 02.26.19 at 1:44 pm
#98 NotLegalAdvice

With 200k to invest it might be in your better interest to have a pro manage this matter.

I hear there is a former MP who runs a blog and has a thing for canines who does portfolio stuff.

That’s good advice.
__

I’ll second that. 200K at 28 is a great place to be. Don’t screw it up, let a pro handle it, you’ll retire early as a millionaire.

_______________________

I think Garth only invests money over $500k… so my measly $200k would not interested him lol

What to do what to do

Don’t make assumptions. – Garth

#114 expat on 02.27.19 at 11:35 am

As a toxic white male according to the anarco fems getting airtime lately.

I can’t wait for the day when my wife says go shovel the walk and I say sorry I’m emotionally unavailable right now.

Maybe next week after I shave my legs and talk to my buddies on facebook….

Well – she says – what about checking her oil and tire pressures?

Sorry I can’t get my hands dirty as I have a manicure this afternoon…..

My son says this is the greatest social movement in history as he tells his girlfriends to drive him around for shopping…..

The girls suddenly realize that they will have to work for a living as the boys nurture their inner princess….

Be careful what you wish for – ladies – as you deny a man’s nature….

You may get what you want…

#115 not 1st on 02.27.19 at 11:38 am

nonplussed, I agree with some of your assessment but remember because of the vastness and harshness of this country, people tend to want to huddle together into a couple large centers and no live in the boon docks. You can get free land in small town Canada but would you want to live there.

If you go to the US because of the much larger population, better infrastructure, better distribution of people you see people living between major centers on cheaper land. Canadas geography is a major barrier to capital.

That’s why I welcome the US take over of Canada and whip this place into shape.

#116 KLNR on 02.27.19 at 11:42 am

@#58 Asterix1 on 02.26.19 at 9:08 pm
I do hope that Moisters are smart enough to realize that the stress test is actually good for them (and all Canadians)!

Voting against T2 should be the line of thinking if they are selling out to the RE cartel.

Pretty sure T2 is done if he pumps the cartel back up. Let the cycle continue its normal downward progression. It’s what Canada needs to survive in the short/long term.

PS: Presently in Miami, great city, beautiful beaches/weather/food/cultures. When I compare homes in this area vs GTA, makes you laugh. GTA pricing is set to ignorant levels!
_________________________

Take a tour of the non-tourist part.
90% of that city is a crime laden shithole.

#117 IHCTD9 on 02.27.19 at 11:50 am

#100 n1tro on 02.27.19 at 9:09 am
Free $20 for Canadians. From similar people who brought your the bread fixing scandal comes the CRT fixing fiasco.

http://www.crtclassactioncanada.ca/
____

Done – and thanks. Bought my first computer in ’97 – a Pentium 200 MMX with a 15″ CRT monitor. Also bought a nice SONY 27″ Trinitron in ’98. $2500.00 lot for those.

Funny, that same 27″ SONY finally died last summer. It cost 800.00 new in 1998, that’s about 1200.00 in 2018 dollars. I noticed while shopping for a new TV that 27″ HDR LED’s were 99.00/ea lol! (that’s about 65.00 in 1998).

I just got 20.00 from UPS a couple weeks back for some similar overcharging there too for customs I think. :)

#118 Ace Goodheart on 02.27.19 at 12:03 pm

BC takes first steps in nationalizing its housing stock:

https://www.theglobeandmail.com/canada/british-columbia/article-landlords-challenge-new-westminsters-rental-only-zones-in-court/

This is very interesting. Owners of these properties now cannot do anything with them other than rent them. If they sell, the new owner is also restricted from dealing with the land in any manner other than renting it out.

It is assumed the rental price will be strictly controlled by rent caps and yearly percentage rent increases.

So these folks have just had their private property confiscated by the government, for use as rent controlled property, with a twist – even though they have lost the right to use their own property (they can’t live there themselves, or use the land in any way other than to rent it out as housing to other people), they still “own” the property in that they are responsible for keeping it up, making it comfortable for the tenants and ensuring that the tenants’ many, many, many human rights are upheld at all times.

So this is a bit of a twist on the nationalization of private property for public use.

In BC, we nationalize private property, but we keep the owners as “custodians” and “caretakers” of that property, for the benefit of the renters.

Generally when governments confiscate people’s stuff, they just take it.

This is an unusual twist. “you no longer own or control your land, but you still have to pay for upkeep and maintenance, and any problems that come up, are yours to deal with”

#119 MF on 02.27.19 at 12:05 pm

16 not 1st on 02.27.19

The US has “better” infrastructure?

And lol if you think they are that different. Go on any forum and you’ll read a thousand posts from Americans whining about the “liberals in California or New York”…or taxes.

One government that Albertans don’t like and the toughness that makes them so successful seems to turn to whining, complaining, and hyperbole.

MF

#120 For those about to flop... on 02.27.19 at 12:14 pm

Recent sale report.

When I saw that this detached house in Port Coquitlam had been moved over to the sold side of my folder by Zolo, I thought I was going to be doing a Price Discovery Post.

Turns out I had it in there because they were a chance to take a loss even though they bought towards the bottom of the market in Port Coquitlam.

The details…

1102 Ellis Dr,Port Coquitlam.

Paid 868k May 2017

Sold 825k February 2019

Originally asking 868k

Assessment 904k

https://www.zolo.ca/port-coquitlam-real-estate/1102-ellis-drive

So at the end of the day it cost them 90k to leave Ellis Island…

M44BC

————————————–

Since this is now a crow blog.

P.S, I thought February was gonna suck numbers wise, being a short month and all, but maybe all the snowfall helped me pass 5000 visitors on Pink Snow for the first time in a month.

I’ll stay humble, nothing to crow about…

#121 Boomer Bill on 02.27.19 at 12:31 pm

#86 Hamsterwheelie

Congrats on your judicious choice of Hamilton before the crowd realized what a great deal it was. You were ahead of the curve and it is nice to see that you have been so well rewarded for it.

#122 Carl Canuck on 02.27.19 at 12:37 pm

#117 KLNR

“Take a tour of the non-tourist part. 90% of that city is a crime laden shithole.”

This sadly is true of almost every American city….

#123 yvrguy on 02.27.19 at 1:02 pm

#99 Figure it Out on 02.27.19 at 8:56 am

Second saddest thing:
60% have an unfavourable view of Trudeau
54% ditto Scheer
64% ditto Singh

Unless things change, it’s going to be a “pox on all of your houses” election.

——————————-

This is exactly why PPC is going to steamroll politics in the next 5 years, if not by October.

Maxime’s message doesn’t and hasn’t changed in 10 years. All these other slippery clowns do polls to figure out how to buy votes with their platform.

How about just coming up with a LOGICAL platform based on solid values which unites the Country, not divides it or panders to special interest groups.

People want authenticity these days with all fake news and garbage bias the MSM puts out.

Maxime is that guy. Watch the grassroots message spread.

I know Max. Do you? Be careful what you fall for. – Garth

#124 Developer Dan on 02.27.19 at 1:03 pm

#62 Nonplused

“The problem with the Canadian housing market is simple: Collusion between interested parties and the civic governments. We have the second largest land mass on this planet earth, and only 36 million people.”

You mean stuff like the GTA Greenbelt which is the largest on the PLANET… 7200 sq kms of land…You can trace GTA houses prices on their vertical climb as soon as it was implemented in 2005…

https://en.wikipedia.org/wiki/Greenbelt_(Golden_Horseshoe)

#125 AGuyInVancouver on 02.27.19 at 1:03 pm

#119 Ace Goodheart on 02.27.19 at 12:03 pm
BC takes first steps in nationalizing its housing stock:

https://www.theglobeandmail.com/canada/british-columbia/article-landlords-challenge-new-westminsters-rental-only-zones-in-court/

This is very interesting. Owners of these properties now cannot do anything with them other than rent them. If they sell, the new owner is also restricted from dealing with the land in any manner other than renting it out.

It is assumed the rental price will be strictly controlled by rent caps and yearly percentage rent increases.

So these folks have just had their private property confiscated by the government, for use as rent controlled property, with a twist – even though they have lost the right to use their own property (they can’t live there themselves, or use the land in any way other than to rent it out as housing to other people), they still “own” the property in that they are responsible for keeping it up, making it comfortable for the tenants and ensuring that the tenants’ many, many, many human rights are upheld at all times..
_ _ _

Silly comment. Zoning has been in place in the western world for decades. Can you build a factory in the midst of a residential neighbourhood now? Of course not.

Since the law is a provincial one, they will lose any case targetting New West.

#126 Farmer Fred on 02.27.19 at 1:09 pm

“When did this become a crow blog? – Garth”

Well there are a few politicians “eating crow” after the recent byelections…

#127 Hugo Chavezsky on 02.27.19 at 1:14 pm

#74 Politico on 02.26.19 at 11:11 pm
“Can anyone explain what is going on in Venezuela? Why do US politicians care what is going on there? Why threats to invade? I can’t figure it out.”

One word, OIL.

#128 Penny Henny on 02.27.19 at 1:19 pm

Here you go IHCTD9
another class action suit

https://www.cbc.ca/news/canada/london/lawnmower-lawsuit-class-action-settlement-1.4987042

/////////////////
#118 IHCTD9 on 02.27.19 at 11:50 am
#100 n1tro on 02.27.19 at 9:09 am
Free $20 for Canadians. From similar people who brought your the bread fixing scandal comes the CRT fixing fiasco.

http://www.crtclassactioncanada.ca/
____

Done – and thanks. Bought my first computer in ’97 – a Pentium 200 MMX with a 15″ CRT monitor. Also bought a nice SONY 27″ Trinitron in ’98. $2500.00 lot for those.

#129 IHCTD9 on 02.27.19 at 1:28 pm

#126 AGuyInVancouver on 02.27.19 at 1:03 pm

Silly comment. Zoning has been in place in the western world for decades. Can you build a factory in the midst of a residential neighbourhood now? Of course not.
____

Uhhh, those buildings were ALREADY BUILT. Now the Gov wants to change the zoning afterwards. Big difference.

What if the gov creates a rental only zone in your city and your house ends up in it. Sorry, you can live there for now, but you’ll be the last. The next owner will operate a rental unit after chopping up your house into 4 apartments.

Think the new landlord to be is planning on paying top dollar for that SFD of yours under this scenario?

#130 NotLegalAdvice on 02.27.19 at 1:29 pm

NotLegalAdvice:

“I think Garth only invests money over $500k… so my measly $200k would not interested (sic) him lol

What to do what to do ”

_________________________________

Don’t make assumptions. – Garth

_________________________________

My mistake. How do we begin??

#131 IHCTD9 on 02.27.19 at 1:31 pm

#129 Penny Henny on 02.27.19 at 1:19 pm
Here you go IHCTD9
another class action suit

https://www.cbc.ca/news/canada/london/lawnmower-lawsuit-class-action-settlement-1.4987042
____

No dice on that one – I’ve never bought a brand new mower in my life!

#132 jess on 02.27.19 at 2:08 pm

i would like a olive oil rebate as i trusted what the label said. can we do a class action against the mafia?

=======

revocation of tax status?

Anti-vaccination billboard campaign called ‘dangerous’ by Toronto councillor

Non-profit group has paid for 50 digital billboards across the city
CBC News · Posted: Feb 27, 2019 12:14 PM ET | Last Updated: 13 minutes ago

https://www.cbc.ca/news/canada/toronto/vaccine-choice-canada-billboards-anti-1.5035395

=====

“It’s dirty money,” Dr. Paul Offit, a professor of pediatrics at the Children’s Hospital of Philadelphia and a prominent proponent of vaccination, said of the ad Amazon ran. “What Amazon is willing to do is, for a price, put bad information out there. They should be held accountable. … There aren’t two sides to the science. Vaccines don’t cause autism, diabetes, MS, or any of the other chronic disorders anti-vaccination proponents claim.”

https://www.kesq.com/health/antivaccination-conspiracy-theories-thrive-on-amazon/1043194674
It’s Not Just Facebook – Anti-Vaxxers are on Amazon Too – The Mac …
https://www.macobserver.com/link/anti-vaxxer-amazon/

21 hours ago – Anti-vaxxer videos are proving almost as popular on Amazon Prime as they are on Facebook, which has recently moved to remove such …
Think Facebook has an anti-vaxxer problem? You should see Amazon …
https://www.wired.co.uk/article/facebook-anti-vaccine-disinformation

3 days ago – On Amazon Prime Video a search for “Vaccine” directs people to Vaxxed: … But some anti-vaxxers are also part of a wider movement of people …

But the island of Madagascar is ground zero for a massive outbreak of measles that has killed almost 1,000 people, most of them children. The World Health Organization has reported that more than 66,000 people have contracted the virus since last September.

Madagascar is one of the poorest countries on Earth, and only half the population has been vaccinated. WHO and UNICEF are scrambling to contain the outbreak and build immunity in the population through vaccinations.

#133 I’m stupid on 02.27.19 at 2:17 pm

Shawn Allen

Tater

https://m.huffingtonpost.ca/2016/11/01/canadian-banks-owned-by-each-other_n_12751158.html

#134 NoName on 02.27.19 at 2:17 pm

twenty one pilots – Stressed Out

https://www.youtube.com/watch?v=pXRviuL6vMY

#135 NoName on 02.27.19 at 2:30 pm

One more press play.

Dancing Queen – Abba (1920s Hot Jazz Cover)
https://www.youtube.com/watch?v=AaSxhKf5pV0

#136 Shawn Allen on 02.27.19 at 3:12 pm

No, Virginia, the Canadian Banks Don’t Own Each Other

#134 I’m stupid on 02.27.19 at 2:17 pm
Shawn Allen

Tater

https://m.huffingtonpost.ca/2016/11/01/canadian-banks-owned-by-each-other_n_12751158.html

*********************************
Okay, thank you, I now see exactly where you got that completely fake news that I responded to at 61 above.

Huffington post quotes bank ownership that is simply the shares that the likes of RBC Direct and TD Direct hold on behalf of their millions of clients. The banks in no way own those shares even if they are for convenience registered in the name of the banks.

From my experience in reading bank balance sheets (I read RBC closely but not the others) they own virtually no common shares of any kind. They may own some bank pref shares.

At best the shares Huffington are looking at are assets under administration of the banks. Most likely they are simply shares registered in the banks’ names. All my shares, for example, are registered in the name of TD Direct. But I own those shares. Not TD Direct.

You have been misled.

This is an example of how fake news spreads. It’s also a story that many people would like to beleive. So they do.

Again, there is also a rule against owning more that 10% of a large Canadian bank. Huffington is 100% wrong.

#137 Tater on 02.27.19 at 3:18 pm

#134 I’m stupid on 02.27.19 at 2:17 pm
Shawn Allen

Tater

https://m.huffingtonpost.ca/2016/11/01/canadian-banks-owned-by-each-other_n_12751158.html

—————————————————————-
Continuing to live up to the name. From the article:

“Not exactly. According to financial experts The Huffington Post Canada talked to, many of these banks’ investments in each other are through mutual funds. The banks own these shares on behalf of their customers.”

#138 jess on 02.27.19 at 3:20 pm

Oregon Set To Pass The First Statewide Rent Control Bill

February 27, 201911:53 AM ET
Sasha Ingber

https://www.npr.org/2019/02/27/698509957/oregon-set-to-pass-the-first-statewide-rent-control-bill

#139 Exurban on 02.27.19 at 3:28 pm

#126 GuyinVancouver #130 IHCTD9

I remember a long long time ago listening to a radio interview with 1960s Vancouver Mayor Bill Rathie. He said that Vancouver should have designated whole blocks in the West End and Kitsilano as rental-only. He was probably right.

#140 AfterTheHouseSold on 02.27.19 at 3:33 pm

#131 NotLegalAdvice
“I think Garth only invests money over $500k … so my measly $200k would not interest him”

Garth joked a while back about $500k, I think in the context of his ‘fancy pants’ portfolio managers. I’ve noticed that the number has stuck and been repeated here a number of times.

I believe Garth has previously said $150k where it makes sense for the client, every situation is different.
This may have changed since, but you can reach him above at Contact Garth for clarification.

#141 Hamsterwheelie on 02.27.19 at 3:38 pm

#122 Boomer Bill – thanks! We feel really lucky and are thoroughly enjoying this town, its 100 waterfalls and booming arts/culture/foodie scene. The Ham has taught us to be happier with less than we would have strived for in Toronto – to see how many really are right on the edge (yes, there’s visible poverty here) Hamilton also allowed us to give back in volunteering with things that make a big difference to neighbours and ourselves, and on a sideways note – the medical care here has been exceptional. Fortunates we are indeed.

#142 Shawn Allen on 02.27.19 at 3:47 pm

Who Owns the Banks

Tater and I have sufficiently dispelled the fake news about the banks owning each other but just to add to it:

I have in my hand, RBC’s 2018 proxy circular and notice of annual meeting.

At page 5 they state they are “not aware of any person who owns or exercises control or direction over more than 10% of the outstanding shares”

#143 I’m stupid on 02.27.19 at 3:48 pm

#138 Tater

I guess you can’t read so

Many does not mean all, it simply means some. The point stands that they do own or control many shares. If one bank runs into problems it may mean the others will suffer as well. I wasn’t suggesting that problems would happen either. I was simply saying that in a country where the majority (meaning most, for those that can’t read) of banking activity is concentrated with only 5 major companies, deregulation against the advise of the banking regulator can be (can be does not mean it will be, for those who can’t read)suicide.

Shawn Allen responded without personal attacks unlike you. If I had to bet I’d say you’re an angry person, embarrassed of who you are and feel good personally attacking others online because that’s how you can feel like a winner.

#144 jess on 02.27.19 at 3:59 pm

debt financing

TIF’s
“”When Mayor de Blasio wanted to build the streetcar in Brooklyn and Queens, he’s pointing to Hudson Yards as a successful use of TIF, and calling it a self-financed project,” says Fisher, referring to tax increment financing, a controversial method of funding development by diverting property tax revenues. “And my work is to try to say that that’s misleading.” Unless you’re willing to overlook a couple billion dollars, among friends.
http://gothamist.com/2018/11/05/hudson_yards_subsidies.php
TIF’s
Tax increment financing (TIF) is a tool commonly used by local governments to finance economic development projects. It allows a municipality to pay for the cost of public infrastructureand/or economic development projects using the expected increase in tax revenues, most often in the form of property taxes. TIF is based on the expectation that public investment in infrastructure and services will induce private development that, in turn, increases property values and leads to higher property tax revenues. Under the theoretical framework ofland value capture, municipalities are entitledto the additional property tax revenue to pay for the investments that sparked the growth since this economic activity and revenue growth would not occur “but for” the upfront investments made by the public sector. Since TIF offers local governments the promise of financing development with the veryrevenues they are expected to generate, it is described as “self-financing.” However, despite this positioning as a novel and low-cost choice, TIF carries costs and risks similar to other public financing instruments
https://www.economicpolicyresearch.org/images/docs/research/political_economy/Cost_of_Hudson_Yards_WP_11.5.18.pdf
==================================

debt traps
….”Ecuador equity will be paying off these debts. To repay the roughly $19 billion debt to China, Ecuador will instead give 80 percent of its petroleum exports to China, which it can then sell at a profit.”…
During the 2008 global financial crisis, China approached many Latin American countries with offers of infrastructure in exchange from breaking with the United States. Many countries agreed, and are now saddled with high-interest Chinese loans.”

https://www.theepochtimes.com/ecuadors-new-dam-a-sign-of-chinas-dept-trap-diplomacy_2751199.html

#145 Penny Henny on 02.27.19 at 4:45 pm

Hey ‘I’m stupid’
a quote from the article you posted
“So what’s going on here? Some kind of charade, where one bank is pretending to be five different banks?

Not exactly. According to financial experts The Huffington Post Canada talked to, many of these banks’ investments in each other are through mutual funds. The banks own these shares on behalf of their customers.”

Did you catch the last sentence?
Why read the WHOLE article when you can just read the headline right?

#146 I’m stupid on 02.27.19 at 5:00 pm

Shawn

I never said ownership of greater than 10%. I said the largest shareholders not majority shareholders. It was a hypothetical exercise of issues that could arise with removing regulations.

#147 I’m stupid on 02.27.19 at 5:36 pm

A lesson on mutual funds is needed. If you buy a mutual fund the issuer of the fund is the one that converts the fund to cash. It’s not sold on the open market like an etf. Therefore you own the fund once you sell the fund the assets held in the fund become property of the issuer. You would assume the issuer would convert the assets in the fund to cash to settle the amount owed. You don’t own the assets in the fund you just own the fund. You may have given up your voting rights to the issuer of the fund. Therefore who has control?

#148 Boots on the ground in Ptown on 02.27.19 at 9:09 pm

NONPLUSED and
Headhunter
Re: artificial scarcity is 100% bang on. I’m stateside, rural WA but hour from Portland Oregon. Recent Growth Management Plan that was more or less illegally rammed thru as law about 2 yrs ago had these municipalities in an uproar. I was posting more then and even though it’s US was pointing this out on this blog. There were a few other posters whom could confirm this happening in Canada as they worked in land use planning etc. One person attending some of the local meetings on this was from a semi rural area South of Portland and said he was attending because he saw the same thing happen down the just a few yrs before and wanted to help. It’s depressing.

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Since I’m here. Smoking Man I’ll bite. Your wife is 100% got it figured out. Coming from 35 y.o. gal married with 3 kiddos. Northern BC it just might have to be after all. Not if the Libs get back in though. I grew up here and it’s too metroish demographic for me already.

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millmech
I’m still watching same markets as you just not as close. late, so really appreciate your MLS alerts a few days back on the race to under 300k in the Okanagan.

Everyone else, read daily rarely comment anymore but always appreciate the comments section and glad Honorable Garth is still tolerating us all.. If there’s anything I could say to fellow Canadians and Americans it’s Read Ben Hunt over at Epsilon theory.com ….. Start with his article titled Sheep Logic. Be prepared to put your thinking cap on. He has a social Science background and his writing skills kill it. In that vein, I’m signing off now as he does with: Yours in Service to the Pack.

Read it and that’ll make a lot more sense.