The knockout

How gnarly has the mortgage business been lately? Well, you’re about to find out. Crazed, desperate money lenders are stripping to their skivvies, and Rutting Season 2019 is about to be gassed with interest rates you haven’t seen since Stephen Harper.

Days ago we told you about HSBC’s 2.99% five-year, fixed-rate home loan – which is about half a point lower than the other banks. If that mortgage were a guy, we’d be talkin’ toxic masculinity. But wait, this pales in comparison to what Ontario’s biggest credit union has just unleashed upon the market.

Meridian’s new two-year fixed-rate mortgage is available for new borrowers at…ta-da… 1.98%. Compare that with what the Big Banks are charging for the same term (3.29%) and you can see what a ballsy, alpha-male move this is. In fact, Meridian is lending out mortgage money for less than it costs the CU to get it (via GICs from depositors). Yes, insane. It won’t last. But it throws fuel on the mortgage war that is just erupting.

The Meridian mortgage is for up to $1 million, for owner-occupied digs only, not available for refinancings and you have to live in Ontario to get it. So think about a typical GTA mortgage of $500,000. At the current bank rate that would cost $2,441 a month. With the Meridian masher, that falls to $2,100. So, almost $350 a month less for two years, or $8,400. You might even buy a used Kia for that. Or two.

By the way, Meridian (like Vancity and Coast Capital) also lets people have group mortgages (bad idea), plus you still have to pass the stress test to get approved (and be able to afford payments at 5.34%).

And while this mortgage offer is designed – like a financial blogger with chiseled abs and an epic bottom – to garner attention, there are further implications. First, it’s a major escalation of the mortgage war and will help push the banks into cheapo offers over the next few weeks. Despite a tumbling of bond rates the big guys have been reluctant to drop the cost of their borrowings (lower spreads hurt the bottom line) but now with 2.98% five-year and 1.98% two-year money available, there’s little choice but to gear up for battle.

Second, this kind of rate warfare takes pressure off the Bank of Canada. The central bank doesn’t need to contemplate reducing its policy rate if commercial lenders are doing the job of stimulating the economy for it. The latest GDP numbers showed the economy is cooling quickly, despite robust job growth, so this kind of on-the-street monetary stimulus is welcome.

Third, what a gift for Mr. Socks. Just as the Lavalin-JWR-Philpott-Butts-McCallum mess was deepening, there’s a new shiny thing to distract the moisters. Cheap money! Come & get it!

Fourth, the rate slash is nicely timed for the Bill Morneau budget next Tuesday. I hear that over the last couple of weeks revisions have been made to increase spending (drugs, pensions, kids) to hike corporate competiveness (building on last autumn’s tax changes) and, of course, to reboot real estate. The Millennial homebuying plan will bring back 30-year amortizations for CMHC-insured mortgages, reducing monthly payments (and increasing the amount of interest paid), and likely include a new tax credit to help closing costs. Apparently no diddling to the stress test, which may happen later in 2019 and come from the bank regulator, OFSI.

So there you go.

Mortgages at 1.98%. Back again. Thirty-year mortgages. Making a return. Buyer incentives. Just like in 2016. The central bank backing off its rate-hike agenda. Cheaper detached houses in the major markets. And it’s spring. Green stalks thrusting lustily through the virginal snow, confident, cocky and unstoppable. For untold ages this has been the moment of rebirth, embrace, flow and creation.

Or, in this case, a mortgaged condo on the 18th floor.

* Sigh. *

144 comments ↓

#1 Penny Henny on 03.13.19 at 4:58 pm

Meridian’s new two-year fixed-rate mortgage is available for new borrowers at…ta-da… 1.98%.-GT
////////

That’s funny. Back in Sept or Oct I put some money in a 1 year Meridian GIC at 3.15%

As stated. They are loaning for less than the cost of funds. And you gave them money? – Garth

#2 Penny Henny on 03.13.19 at 5:00 pm

And while this mortgage offer is designed – like a financial blogger with chiseled abs and an epic bottom-GT

////////////

is epic a synonym for huge

#3 Shawn Allen on 03.13.19 at 5:00 pm

Making Money By Losing Money?

In fact, Meridian is lending out mortgage money for less than it costs the CU to get it (via GICs from depositors). Yes, insane. It won’t last.

**********************************
So, they lose money on each mortgage then? Can they make this up on volume?

Is it the New Math?

Well, cue the “Evil-banks-charge-interest-on-money-they-create-from-thin-air-crowd”… If so, why not lend at 0.5%?

Meanwhile, should we expect lower GIC rates?

#4 Bigrider on 03.13.19 at 5:05 pm

You really do sound like you are throwing in the towel on your bearish position on RE. Can’t Blame you. I did a long while ago. (should have listened to nonno..uppa Uppa UPPA she goes)

There simply is nothing to stop the mania and all the more kerosene soon enough to get the fire burning bigger and hotter.

Of course there is. All advances just set us up for a bigger drop. Downa, downa, downa. – Garth

#5 Alex on 03.13.19 at 5:10 pm

Mr. Socks government won’t say it outloud that they’re broke, they’ll rather just keep digging a deeper grave to make this charade going on to be able to appeal to the Millenials… If let’s say the opposition takes over in October, what in heaven’s could they do to put a stop on this and to start running a surplus? How would they win the elections stating that there’ll be a lot if cuts if they win to start reversing the deficit? Not sure that I see a light at the end of the tunnel. Any thoughts?

#6 Victoria Real Estate Update on 03.13.19 at 5:13 pm

BRINGING IT DOWN

In 2017 single family homes sales tanked ( – 23%) year-over-year across Greater Victoria – a full year before the stress test was implemented on January 1, 2018. This happened (naturally) as a result of extremely high (bubble) price levels.

The stress test contributed to even fewer sales in 2018 and so far in 2019, but it’s likely that SFH sales would have continued to decline even without the stress test as a result of the continuation of the natural market correction process that had begun in late 2016/early 2017 in Victoria.

Those who claim (incorrectly) that Victoria’s market changes have been all about the stress test – and not about it’s massive housing bubble – have obviously not considered that SFH sales tanked a full year before the stress test was implemented.

If you didn’t know the facts you might believe the unsubstantiated claims of those who say that SFH prices in less expensive areas (for example Sooke and Langford) have skyrocketed higher as a result of buyers flocking to these lower-priced areas to bid up prices.

But the facts simply don’t support that claim:

Sooke SFHs
Average Price Increase/Decrease
Year-over-year:

Feb. 2019: prices down – 9%
Jan. 2019: prices down – 5%

Langford SFHs
Average Price Increase/Decrease
Year-over-year:

Feb. 2019: prices down – 14%
Jan. 2019: prices down – 6%
(Source: Victoria’s R/E board)

That SFH prices are falling in Langford and Sooke shows that Victoria’s powerful market correction process is overriding what many realtors claimed would happen – that the stress test would cause SFH prices in lower priced areas to skyrocket.

House prices in Victoria have almost quadrupled (3.5 times) since 2000. (Source: Teranet’s index) Have incomes in Victoria almost quadrupled (3.5 times) since 2000 to support house price gains and prevent overvaluation? Of course not. This is why we have a massive housing bubble in Victoria.

When housing bubbles go through their inevitable major price corrections it affects all areas – high-end to low-end – of the market. And that’s exactly what the facts are indicating in Victoria.

#7 Fairmont emp on 03.13.19 at 5:15 pm

How does this just keep on going?

#8 Guy in Calgary on 03.13.19 at 5:15 pm

Had to check what year it was after reading this post. Amazing how we fail to learn from past mistakes.

#9 Eco Capitalist on 03.13.19 at 5:17 pm

Given that Credit Unions are restricted in how much business they can do with non-members, this sounds more like a recruiting drive than anything else.

#10 JWD on 03.13.19 at 5:18 pm

Livin the dream! People have become so accustom to cheap money. We just can’t live without it! And why not just try to re-ignite the real estate craze because what else is there in Canada? Snow goose, Tim Hortons coffee? Ya boring… let’s buy another Condo!

#11 Alberta Boy on 03.13.19 at 5:18 pm

I honestly do not think this will have a significant impact on the weak markets in Alberta. This will be like putting a defibrillator on a cadaver.

#12 Smartalox on 03.13.19 at 5:36 pm

I still think that Morneau and the Finance team should allow RRSP holders to access more than $25k per RRSP holder without triggering withholding taxes. The only stipulation would be that the funds to be withdrawn must be held in the RRSP for more than 3 to 5 years.

It would encourage people to get in the habit of saving, instead of piling on debts.

#13 Shawn Allen on 03.13.19 at 5:44 pm

Deposit athe Highest Rate

#1 Penny Henny on 03.13.19 at 4:58 pm
Meridian’s new two-year fixed-rate mortgage is available for new borrowers at…ta-da… 1.98%.-GT
////////

That’s funny. Back in Sept or Oct I put some money in a 1 year Meridian GIC at 3.15%

As stated. They are loaning for less than the cost of funds. And you gave them money? – Garth

*************************************
Well, I could see the point of avoiding a credit union where failure might be imminent. But that’s not the case here is it?

Personally I prefer to keep everything with one big bank and avoid having multiple T5s to deal with.

But I would say Penny Henny made a great move grabbing 3.15% if the choice was between a 3.15% one year GIC and other one year GICs paying lower rates.

#14 2 years on 03.13.19 at 5:45 pm

What will happen when this short term comes up for a renewal?

#15 Joe Money on 03.13.19 at 5:46 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

#16 Remembrancer on 03.13.19 at 5:54 pm

#5 Alex on 03.13.19 at 5:10 pm
How would they win the elections stating that there’ll be a lot if cuts if they win to start reversing the deficit? Not sure that I see a light at the end of the tunnel. Any thoughts?
——————————————————-
$5 they open with a “its worse then we thought” go with “everyone needs to tighten their belts (by loudly cancelling some social programs that impact the already economic insecure that can get high-5s from the so-called base)” and to proceed with quiet deficit spending kicking the can down the road with some handwaving.

Basically Ontario with hopefully less multi-million $ lawsuits settled out of court due to hamfisted ineptitude…

#17 Yukon Elvis on 03.13.19 at 5:54 pm

#4 Bigrider on 03.13.19 at 5:05 pm
You really do sound like you are throwing in the towel on your bearish position on RE. Can’t Blame you. I did a long while ago. (should have listened to nonno..uppa Uppa UPPA she goes)

There simply is nothing to stop the mania and all the more kerosene soon enough to get the fire burning bigger and hotter.

Of course there is. All advances just set us up for a bigger drop. Downa, downa, downa. – Garth
…………………………..

By the time the bigger drop comes we will all be gonna gonna gonna.

#18 Long-Time Lurker on 03.13.19 at 5:55 pm

#102 miketheengineer on 03.13.19 at 1:05 pm
Message for Carol:

My friend is going to this clinic in England this week to see if she can try this concoction of stuff. Right now she is NED, since they cut out the cancer. But it could come back and spread…. here is where she is going for treatment with the article….Good luck and my God bless you.

https://www.dailymail.co.uk/health/article-3115964/Could-simple-antibiotic-help-fight-cancer-Experts-London-clinic-believe-cheap-everyday-drugs-starve-deadly-tumours.html

>A very interesting article. It’s worth reading if you have an interest in this subject. (In my opinion.)

#19 Glengarry Girl on 03.13.19 at 6:01 pm

Short term low interest Mortage Loans in an over priced Housing Market to an over indebted population…what could possibly go wrong?

#20 Not 1st on 03.13.19 at 6:02 pm

Early election? Whispers are it could be. Can’t wait to toss out our grotesque excuse for a govt.

Today they voted to prevent JWR from returning to committee.

http://www.thesuburban.com/blogs/cohen_confidential_with_mike_cohen/trudeau-likely-to-call-early-may-federal-election/article_2fa27aae-452a-11e9-94a4-4f77d989d503.html

#21 Penny Henny on 03.13.19 at 6:03 pm

#1 Penny Henny on 03.13.19 at 4:58 pm
Meridian’s new two-year fixed-rate mortgage is available for new borrowers at…ta-da… 1.98%.-GT
////////

That’s funny. Back in Sept or Oct I put some money in a 1 year Meridian GIC at 3.15%

As stated. They are loaning for less than the cost of funds. And you gave them money? – Garth
///////////////

I wasn’t feeling the love in preferreds

Trade a 4.4% tax-reduced yield on a pref for a 3.15% fully-taxed GIC. Good thinking. – Garth

#22 Remembrancer on 03.13.19 at 6:09 pm

#13 Shawn Allen on 03.13.19 at 5:44 pm
Well, I could see the point of avoiding a credit union where failure might be imminent. But that’s not the case here is it?
————————————————
I think Garth is getting more at the point that an institution that is “selling” for less than its “buying” is not necessarily making good business decisions (my words though, not his)…

Of course, Penny Henny’s realtor math that ignores debt as negative worth may support this strategy, seems like a hell of a way to run a railroad though… Sounds more like a what we lose per sale, we’ll make up in volume theory…

#23 Reality is stark on 03.13.19 at 6:27 pm

Canadians are too indebted for any markets to revive, housing included.
We now get to feel what the USA felt after 2008. Get ready for big increases in unemployment and a lower dollar.
Social justice warriors dominate the political landscape and they want much higher tax rates as the marriage rate falls and single parents want compensation for their poor choices.
The country is a mess. We have a diabetes epidemic and people here want the “free” medical system to fix them.
There is an explosion of stupidity in this country as the people expect the “system” to fix their selfish moronic choices.
Expect higher taxes.

#24 Paul on 03.13.19 at 6:28 pm

They better do something sales are tanking, so if you want to get rid of that slanty semi or that old grow-op now is your chance.

#25 Barb on 03.13.19 at 6:47 pm

The credit union vs big bank rates (just to prove there’s no price fixing?)

Akin to gas prices?
https://www.beachradiovernon.ca/2019/03/13/115609/

Kelowna’s prices rose to $137.9 yesterday
https://www.gasbuddy.com/GasPrices/British%20Columbia/Kelowna

*grin*

#26 WUL on 03.13.19 at 6:47 pm

We’re Number 1!

Calgary is numero uno among 11 urban centres (some not so urbane) in detached housing price decline in Feb.

“City saw largest annual decline among 11 metropolitan areas in February, according to national study….”

I was surprised by the realtors’ failure to mention that it was the coldest February in 40 years. Had to be that, right?

https://www.cbc.ca/news/canada/calgary/calgary-detached-house-prices-teranet-national-bank-creb-1.5054471

#27 PeterfromCalgary on 03.13.19 at 6:59 pm

I heard if you buy in a condo in a building built by SNC-Lavalin Trudeau will send you autographed portrait of himself.

#28 IHCTD9 on 03.13.19 at 7:00 pm

Will folks really clasp their hands in joy at the prospect of diving into 30 years worth of debt slavery? For a 7 figure crap pile mildew farm in the GTA? So they can sit in traffic half their lives while making the same or less as just about everyone else in the country?

#29 The Trend Is Your Friend on 03.13.19 at 7:02 pm

Another year, and another set of dashed expectations waiting for the never to be had real estate correction/crash! March 19th it all begins again with the a federal budget committed to reinflating prices.

We are now entering year 11 of the bull market and this juggernaut is unstoppable – all possible because of a government and central bank committed to keeping houses prices up.

If the current government was prepared to intervene with SNC-Lavalin to save a supposed 9000 jobs, why would anyone think that any action would not be taken to protect the jobs of hundreds of thousands and 25% of the economy?

All those examples of over-leveraged greater fools that bought in 2016 and 2017 that saw their equity erased in the GTA and Metro Vancouver slow melt of 2018 will soon have their equity restored!

The predictable trend will be a 10% pop in prices with the soon to be announced 30 year mortgages that will last several more years. The government will be sending the ‘all clear to invest’ signal on March 19th.

The simple maxim of follow the heard, the government will protect owners, and buy real estate, has put owners in a far superior financial position that even the most frugal arm chair economist bear that preached fear and sat on the renter sidelines.

For those following financial prudence since the early warnings of a bubble, and diligently renting and investing the rest, they will have been waiting for over a decade and half for a buying entry point.

That my friends is a lifetime of waiting for life to begin, for affordable housing, and for the stability of ownership required by families and spouses.

#30 BlogDog123 on 03.13.19 at 7:04 pm

So this all just delays the inevitable implosion of family finances?

Take heed 30-somethings-up-to-your-eyeballs-in-debt:

Like Admiral Ackbar says: “It’s a trap!”

#31 Timmy on 03.13.19 at 7:05 pm

RE 6 Victoria Real Estate Update

Then why does it still cost $700K for a townhome in Victoria?

#32 Simple Yes on 03.13.19 at 7:08 pm

#28 IHCTD9 on 03.13.19 at 7:00 pm
Will folks really clasp their hands in joy at the prospect of diving into 30 years worth of debt slavery? For a 7 figure crap pile mildew farm in the GTA? So they can sit in traffic half their lives while making the same or less as just about everyone else in the country?

————-

Seriously, you are asking this?

The answer is simply yes – or did you not pay attention for the last 10 years of this blog and current house prices, and everyone here asking the same questions as prices went through the stratosphere?

#33 Bigrider on 03.13.19 at 7:17 pm

It is disingenuous or misguided to think that the massive escalation in condo prices we have seen in Toronto has strictly to do with easy lending prices and semi relative affordability.

The ‘ gentrification’ of Toronto past 10 or 15 years ,on a global sphere , coupled with the average Canadians overwhelming religious , cultish belief that real estate ownership as defining the very meaning of life, has led us to where we are today.

I have come to realize that nothing much is going to change this truly unique GTA circumstance

#34 Bongo on 03.13.19 at 7:22 pm

DELETED

#35 Yukon Elvis on 03.13.19 at 7:26 pm

Mortgages at 1.98%. Back again. Thirty-year mortgages. Making a return. Buyer incentives. Just like in 2016. The central bank backing off its rate-hike agenda. Cheaper detached houses in the major markets. And it’s spring. Green stalks thrusting lustily through the virginal snow, confident, cocky and unstoppable. For untold ages this has been the moment of rebirth, embrace, flow and creation.
………………………

Told ya. Been saying it for years. But you never listen.

#36 Old gringo on 03.13.19 at 7:27 pm

Why do I have visions of RATS running around in cages , snorting copious amounts of illegal drugs when I see I see the house horny scooping up these cheap mortgages when real estate is at such insane highs.
This is going to hurt big time amigos!

#37 Canadian Infidels on 03.13.19 at 7:35 pm

DELETED

#38 Smoking Man on 03.13.19 at 7:40 pm

I bet T2 calls for a snap election after the budget comes out.

He can’t aford to wait till Oct when the economy will be in the shitter. And his housing measures failed to resesatate the over priced real estate market.

#39 Well ... on 03.13.19 at 7:40 pm

#27 PeterfromCalgary on 03.13.19 at 6:59 pm
I heard if you buy in a condo in a building built by SNC-Lavalin Trudeau will send you autographed portrait of himself.

I heard a good dog can’t control his licker.

#40 The Reno coach on 03.13.19 at 7:42 pm

Hi Garth
So would it make sense to borrow at 2% against my mortgage free house and invest with you in your diversived portfolio?

#41 not so liquid in calgary on 03.13.19 at 7:44 pm

@ Penny Henny on 03.13.19 at 5:00 pm

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

bwahahahaaaa. hilarious!

#42 crowdedelevatorfartz on 03.13.19 at 7:47 pm

@#85 Ace
“It will be interesting to see what the Chinese do with it. I’m thinking major rebuild.”
****

Yeah I agree.
Years of minimal maintenance, incompetance, etc. has brought a huge Dam to its knees.
Whatever the Chinese do….it’ll take months if not years.
I’m thinking substations, etc will fry before that amateur socialist experimental gong show is over.

#43 crowdedelevatorfartz on 03.13.19 at 7:52 pm

@#20 Not 1st

“Early election? Whispers are it could be.”

*****

Ahhh yes.
A May election before the SNC-Lavatory poo really overflows the Liberal bathroom.

And I’m sure Trudeau is looking at the possibilities.
If he wins he can go on vacation this Summer.
If he loses he can go on vacation this Summer.
Win!

#44 crowdedelevatorfartz on 03.13.19 at 7:54 pm

@#37 Canadian Infidels

you and Bongo should get a room together……

#45 Simple Yes on 03.13.19 at 7:56 pm

#30 BlogDog123 on 03.13.19 at 7:04 pm
So this all just delays the inevitable implosion of family finances?

Take heed 30-somethings-up-to-your-eyeballs-in-debt:

Like Admiral Ackbar says: “It’s a trap!”

——–

Same ‘it will delay the inevitable’ and ‘beware the bear trap’ nonsense spouted in 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and ‘insert future year here’

Wrong for years, and soon to be wrong in the foreseeable future….

#46 Rargary on 03.13.19 at 7:59 pm

#11 Alberta Boy – I honestly do not think this will have a significant impact on the weak markets in Alberta. This will be like putting a defibrillator on a cadaver.
—————-‐—————-‐———–‐—————-
The cadaver still reeks of last nights binge drinking! Stitch it back up please someone!

Housing and jobs are all we have here in Canada to boost our economy. Hence the snob appeal of owning a mcslanty!

For all of those Alberta oil and gas bashers, you are welcome to have your very own recession like we have! And how warm was your wood fireplace keeping you last month? … Exactly!

#47 Trumpocalypse2019 on 03.13.19 at 8:00 pm

BEWARE THE IDES OF MARCH!

In 2 Days.

PREPARE

#48 reynolds531 on 03.13.19 at 8:02 pm

Somebody with a CFA can do the math on which is a better RISK ADJUSTED return. Preferred or a 3% gic.

#49 And you r surprised ... on 03.13.19 at 8:03 pm

Garth?

When will you learn ?

#50 Asterix1 on 03.13.19 at 8:19 pm

28 IHCTD9 on 03.13.19 at 7:00 pm
Will folks really clasp their hands in joy at the prospect of diving into 30 years worth of debt slavery? For a 7 figure crap pile mildew farm in the GTA? So they can sit in traffic half their lives while making the same or less as just about everyone else in the country?
———————

I second that! Well said, so true.

RE is done for a while in GTA. Desperate moves from T2 and banks will not work.

This cycle is done..

#51 I think I know something about RE on 03.13.19 at 8:35 pm

There is nothing on the horizon that will stop this RE juggernaut in the GTA. A lot of people on this blog have been waiting in vain for RE to cool off. It hasn’t happened and it isn’t going to happen. If you want RE, just buy it. In 10 years time your future self will love you for having done so.

#52 I Want A Vacation on 03.13.19 at 8:42 pm

I wish to be a T2 flying to an island retreat with my entourage on the government jet. Sitting on the beach or by the pool being served refreshments on the rocks, and enjoying the finest dining and accommodations that money can buy. Guess who is paying for such a nice vacation?

#53 Magic 8 Ball on 03.13.19 at 8:49 pm

#51 – All signs point to No.

#54 Breathless on 03.13.19 at 8:53 pm

Green stalks thrusting lustily through the virginal snow, confident, cocky and unstoppable.

Wow!

#55 Dan from RH on 03.13.19 at 8:53 pm

#23 Reality is stark on 03.13.19 at 6:27 pm

We have a diabetes epidemic and people here want the “free” medical system to fix them.

What do you mean by “diabetes epidemic” ?
Thank you.

#56 Honest Realtor on 03.13.19 at 8:55 pm

I am afraid to say it but the truth is that we have merely had a predictably mild lull in real estate values, and another big increase is on the way. This will probably last another decade, then repeat. I urge the hopeful doomsayers to get off the sidelines and buy soon before they are truly priced out forever. Toronto will not crash, nothing close is going to happen. Don’t keep missing the boat.

#57 Vampire Studies on 03.13.19 at 9:05 pm

6 VREU – good evening. Looks like spring is here.

The teranet index for Victoria only indicates a 2.5% drop from the peak in Sept 2018 and still a 2.8% YOY increase.

This doesn’t seem to jive with the figures you presented. These reductions must be offset with
increases elsewhere. Can you verify?

https://www.cbc.ca/news/canada/calgary/calgary-detached-house-prices-teranet-national-bank-creb-1.5054471

#58 DON on 03.13.19 at 9:06 pm

#4 Bigrider on 03.13.19 at 5:05 pm

You really do sound like you are throwing in the towel on your bearish position on RE. Can’t Blame you. I did a long while ago. (should have listened to nonno..uppa Uppa UPPA she goes)

There simply is nothing to stop the mania and all the more kerosene soon enough to get the fire burning bigger and hotter.

Of course there is. All advances just set us up for a bigger drop. Downa, downa, downa. – Garth

****************************
Yup

Things are different now than the last run-up (assuming the 30 yr mort provides an uptick.

1) Prices have declined so nothing goes uppa uppa uppa forever as my Nono would say.

2) Problem is prices are already knocking many off the buyer’s pool and stress test still in place.

3) Credit delinquencies up across the country in all demographics.

AND

4) Domestic and international growth declining.

5) The economy is on the ropes.

6) People have recently been educated that house prices can decrease at a quick pace in less than a year.

7) Less brazen money laundering

8) Foreign capital retreating

9) Australia didn’t touch interest rates and their housing market is rolling over.

so yes some people will jump in…but at this point the buyer pool is shallow and people know house prices don’t rise forever and can come down a faster rate than expected.

So things are different now… Do any realtors actually follow economic news?

#59 Fruit Vendor on 03.13.19 at 9:08 pm

This is a sad, sad state of affairs. We are in a housing bubble, so lets make sure that bubble does not pop. Legislation and the upcoming budget will not force people that are heavily indebted to address their financial situation. Wow, let the cake continue to be served. This will not end well in my opinion. Welcome to Japan, 1992.

#60 -=jwk=- on 03.13.19 at 9:12 pm

Somebody with a CFA can do the math on which is a better RISK ADJUSTED return. Preferred or a 3% gic.

Risk tolerance isn’t a single number, it varies by investor and strategy.

GIC’s up to 100k are backed by CDIC. So the only ‘risk’ you have is loss of interest.

There are many common shares paying more than 3% – any major canadian bank for example, with preferreds easily in the 5-5.5% range.

#61 The Real Mark on 03.13.19 at 9:13 pm

Sounds like a big sell signal on the Canadian bank stocks, if they’re willing to get into a margin war.

Please, someone tell me that I’m wrong… I did lighten up on the ol XIU and allocate a bit more towards precious metals miners a few months ago, but banks have been the bedrock of the TSX for the past 20 years. If they’re in trouble….

#62 Dolce Vita on 03.13.19 at 9:17 pm

It’s over people. BEATING A DEAD HORSE time.

The Americans are forecasting GDP growth at or near 0 or a very, very slow 0.2 to 0.4% for 1st Qtr 2019 (Atlanta Fed. Reserve Bank GDP Now).

The BoC is shitting bricks. The Cdn. Consumer has put the breaks on spending (as has the American Consumer). The rest of the developed nations are either in Recession or forecasting very slow growth.

The Banks are basically lending at break even or below just to keep some money flowing in. The Feds want to be seen stimulating the economy so they can say “we tried” but in reality they are hoping for the:

SECOND COMING, and

A HAIL MARY PASS. They know they’ll get blamed for the recession and lose the election. Best plan for a recession people. And I believe we are in it now. The next few GDP reports will corroborate that soon enough.

RE sales will be a bust as people know to wait out those selling that are vulnerable financially and have to sell at any price to get out of the market before losing everything. They will define market prices.

BAD FOR ALL OF US.

-Buonanotte e Ciao from tech. recession Italia.

Time to light some candles, pray, then pour yourself a stiff one and sit back in a comfy womfy chair.

#63 DON on 03.13.19 at 9:20 pm

#45 Simple Yes on 03.13.19 at 7:56 pm

#30 BlogDog123 on 03.13.19 at 7:04 pm
So this all just delays the inevitable implosion of family finances?

Take heed 30-somethings-up-to-your-eyeballs-in-debt:

Like Admiral Ackbar says: “It’s a trap!”

——–

Same ‘it will delay the inevitable’ and ‘beware the bear trap’ nonsense spouted in 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and ‘insert future year here’

Wrong for years, and soon to be wrong in the foreseeable future….
**********************

It’s the ECONOMY and ALREADY UN-AFFORDABLE PRICES.

So I take it you are about to use the 30 year mort to buy another house (assuming you already have one)? Why not buy two or three and test your theory out?

#64 Asterix1 on 03.13.19 at 9:29 pm

QUESTION : #58 DON on 03.13.19
“Do any realtors actually follow economic news?”

ANSWER: #56 Honest Realtor on 03.13.19
“I am afraid to say it but the truth is that….another big increase is on the way. This will probably last another decade, then repeat. … buy soon before they are truly priced out forever”

ANALYSIS: Realtors do not read any economic news. They are spoon fed ridiculous lies and stats by their boards and are happy to spew it to get a commission.

#65 Paddler on 03.13.19 at 9:29 pm

What happened to the big predictions about more rate increases this year on this blog?

I just took out a variable rate for 5 years at 2.95%. I do not listen to predictions because nobody really knows what tomorrow brings. We live in such a tumultous world why make predictions? You can always lock in.

The central bank signaled to months ago increases were coming.The fact they are not is, trust me, not good news. – Garth

#66 Madcat on 03.13.19 at 9:35 pm

Someone needs to set up a GoFundMe to raise funds to hire minimum wage workers to stand at Major arteries holding signs that say ‘Access to more DEBT is not the answer to affordability!’ and ‘More DEBT is NOT the Answer to our Housing Crisis!’ etc

#67 Show me the Money on 03.13.19 at 9:38 pm

Garth I currently have variable mortgage @ 3% with scotia, if they drop their 5 year fixed to 2.98% should I get a fixed or stay with the variable?

#68 jim on 03.13.19 at 9:39 pm

Mortgages at 1.98%.

Buyer incentives. Just like in 2016.

The central bank backing off its rate-hike agenda.

Cheaper detached houses in the major markets.

******************************************

Conclusion: Morneau doesn’t need to do anything.

#69 Madcat on 03.13.19 at 9:40 pm

Or make a sign and pay a homeless guy to hold it for a few hours at his intersection…

Vive la revolution!!!

#70 BlorgDorg on 03.13.19 at 9:44 pm

So much for 2019 bringing some long-overdue reality to all that rickety leverage. I guess there’s no moral hazard if you just totally abandon morals altogether.

Sigh indeed.

#71 Vision on 03.13.19 at 9:52 pm

IHCTD9 on 03.13.19 at 7:00 pm
Will folks really clasp their hands in joy at the prospect of diving into 30 years worth of debt slavery? For a 7 figure crap pile mildew farm in the GTA? So they can sit in traffic half their lives while making the same or less as just about everyone else in the country?
“……………..
LOL: The thinking of most sheeple , especially the millenials, but lots of boomers as well. ( Bank of Mom)
“But prices of houses in GTA will never come down. You can never lose with real estate in Toronto. “
You don’t know how many times I have heard this, from the educated to the uneducated. Worst is the professionals who think they have it made. New house, new car, go out for lunch regularly, vacations regularly at all inclusives. Why deny yourself life’s pleasures?
These people are driving up prices . How high she goes no one knows. I do not understand it, but I have no debt. I can sleep at night. But somehow, I think these millenials are sleeping well also. Ignorance is bliss, until it isn’t.

#72 Linda on 03.13.19 at 9:53 pm

What exactly are group mortgages? I did a quick search via Google & what came back seems to be a form of employee benefit plan. Sort of like a group RRSP but using mortgages instead, with employers helping employees to purchase. This sounds like a modern take on a very old idea – to wit, company supplied housing. Sounds good, until one researches some labour history. The cost charged to employees for the housing & other company supplied services such as groceries & medical services very often was far in excess of the wages paid. Workers who quit or who could no longer work were required to pay back the company for those services, regardless of whether they had the funds.

So, if group mortgages are effectively company provided housing, what happens if you leave the company? Does the company have legal rights pertaining to your property? Will you be required to pay the company back for any financial assistance provided? Golden handcuffs, indeed.

Nope. These mortgages let you buy a house with a roommate, or your cousin or the guy who rents next door. Bad idea. – Garth

#73 Shawn Allen on 03.13.19 at 9:55 pm

3.25% GIC versus other options

-=jwk=- at 60 pointed out that “There are many common shares paying more than 3% – any major canadian bank for example, with preferreds easily in the 5-5.5% range.”

The discussion was around Penny Henny’s 3.15% GIC.

*****************************
Well, I have never bought a GIC…

But a certain omnipotent blogger espouses always keeping a certain relatively high percentage of the portfolio in fixed income.

Bank equity shares are most definitely not fixed income. So not comparable to GICs.

Preferred shares are usually considered to be fixed income.

But, unlike GICs, or high quality bonds (upon maturity) , they have most certainly not been fixed in terms of capital value. (But I do like them at the discounted prices)

The point is why bash a man who got 3.15% on a 1 year GIC? It could certainly earn its place in most portfolios.

As far as tax, be fair, compare to bonds which are part of the anointed balanced portfolio.

#74 stupidity on 03.13.19 at 10:01 pm

@#128 Dharma Bum on 03.13.19 at 8:20 pm
#127 stupidity

Sure buddy.
—————————————————————-

Well, at least your handle fits the bill.

And I’m not your buddy.

Toronto is for suckers.

Unless you got in cheap, years ago.

Anyone wanna buy some overpriced real estate?

Anyone?

Hello?

No?

Oh well. I’ll wait another ten years as the Yonge subway line gets extended past my hood. That should be good fir another half mil on my already overpriced paid for abode.

Gotta love being a boomer.
_____________________________

for a boomer you sure do act like a child.
Watch that blood pressure fella.

#75 crowdedelevatorfartz on 03.13.19 at 10:02 pm

@#62 Dolce Vita
“Time to light some candles, pray, then pour yourself a stiff one and sit back in a comfy womfy chair.”

*****
No Italian worth his weight in pasta would ever say ‘comfy womfy”…..
You are an ex-pat Canuck whether you admit it to your paisanos or not.

#76 45north on 03.13.19 at 10:14 pm

Mortgages at 1.98%. Back again. Thirty-year mortgages. Making a return. Buyer incentives. Just like in 2016. The central bank backing off its rate-hike agenda. Cheaper detached houses in the major markets. And it’s spring. Green stalks thrusting lustily through the virginal snow, confident, cocky and unstoppable. For untold ages this has been the moment of rebirth, embrace, flow and creation.

Wolf Richter talks about financial crisis. He says that Australia and Canada are each due for a financial crisis. They have hugely over-inflated housing markets. Very concentrated banking sectors with huge exposure to mortgages. Their households are among the most indebted in the world when compared to their incomes. But he does say that a financial crisis is not inevitable: If housing declines in small increments, in an orderly manner over many years, then a financial crisis can be avoided.

https://wolfstreet.com/2019/03/03/the-wolf-street-report-another-global-financial-crisis-china-at-epicenter/

In my view, Canada can have a slow orderly decline in housing over many years or it can have a disorderly decline in a short space. At an unknown time. There are those that say, Canada’s financial stability is assured. That’s what they said about Nortel.

#77 reynolds531 on 03.13.19 at 10:14 pm

#60 jwk

I think you’re missing my point. What is the Sharpe ratio for preferred shares? Or a basket of them? How does the extra 2.5% return plus the tax advantage compare to the gic when you add in risk?

How did the two investments actually perform from September to today?

Good grief. Buy preferreds for a great, tax-efficient yield and relative stability. Stick them in your portfolio, harvest the dividends and stop fixating on capital values. Over time they will do just fine. – Garth

#78 Karma Bum on 03.13.19 at 10:18 pm

@#45 Simple Yes on 03.13.19 at 7:56 pm
#30 BlogDog123 on 03.13.19 at 7:04 pm
So this all just delays the inevitable implosion of family finances?

Take heed 30-somethings-up-to-your-eyeballs-in-debt:

Like Admiral Ackbar says: “It’s a trap!”

——–

Same ‘it will delay the inevitable’ and ‘beware the bear trap’ nonsense spouted in 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and ‘insert future year here’

Wrong for years, and soon to be wrong in the foreseeable future….
_______________________________________

actually theyve been spouting since 2002.
who knows, maybe they’ll finally get their schadenfreude.
pretty sad if that train of thought has kept you from the real estate you want for that long.

#79 Silent the people on 03.13.19 at 10:21 pm

This so reminds us of the US subprime
Problem. All this won’t fix the housing decline…..

#80 AFD on 03.13.19 at 10:21 pm

The central bank signaled to months ago increases were coming.The fact they are not is, trust me, not good news. – Garth

Is that not good news for Mr Market as well?

#81 Marcus on 03.13.19 at 10:21 pm

Canadians are getting suckered in once again. Have fun with that! LOL!

#82 Vampire studies on 03.13.19 at 10:23 pm

OK everyone, here is a detailed explanation of the Teranet house price index calculation.

https://housepriceindex.ca/wp-content/uploads/2017/08/Teranet-National-Bank-House-Price-Index-Methodology-Overview.pdf

least squares, outliers, the works!

Test tomorrow!

#83 Not So New guy on 03.13.19 at 10:29 pm

That’s funny. Back in Sept or Oct I put some money in a 1 year Meridian GIC at 3.15%

As stated. They are loaning for less than the cost of funds. And you gave them money? – Garth

———————————–

Maybe they are making up the difference with 17% credit card rates

#84 CL on 03.13.19 at 10:29 pm

I’m so sick of politicians quest for power and ego at the expense of all who are responsible.

Sickening this bullshit.

#85 n1tro on 03.13.19 at 10:39 pm

The central bank signaled to months ago increases were coming.The fact they are not is, trust me, not good news. – Garth
———-

Garth, can we at least concede that “central bankers” aren’t as omnipotent as you have implied in the past. What has changed so much in the last 2 months? Consumers were broke then as they are now on cheap debt. Poloz may be smarter than the average person but I think he is average at best compared to anyone who went business school.

#86 Remembrancer on 03.13.19 at 10:51 pm

#72 Linda on 03.13.19 at 9:53 pm

Ahh, the company store. One of the hallmarks of the “good” old days of coal mining…

https://youtu.be/tfp2O9ADwGk

This group mortgage thingee looks like more madness from the same marketing team that brought you endless credit card offers with your favorite logos on them as blue box recycling stuffing…

https://www.groupmortgages.com/ca/home.page

Really CIBC? Did the world really need this?

#87 TurnerNation on 03.13.19 at 11:02 pm

#21 Penny Henny turn in your Blog Dog card at once. You have patronized a Saint (Preferrds). No longer proffer us the pity.

#88 tccontrarian on 03.13.19 at 11:04 pm

#56 Honest Realtor on 03.13.19 at 8:55 pm

I am afraid to say it but the truth is that we have merely had a predictably mild lull in real estate values, and another big increase is on the way. This will probably last another decade, then repeat. I urge the hopeful doomsayers to get off the sidelines and buy soon before they are truly priced out forever. Toronto will not crash, nothing close is going to happen. Don’t keep missing the boat.
////////////////////

An honest realtor? An oxymoron, maybe??

A ‘rule’ you all must learn in any kind of investing is that when most participants believe something isn’t going to happen, it all but guarantees that it will.
This is RE last gasp and bringing in the Greatest of Fools and the worst possible time to buy in Canadian history. Just like nobody thought 2018 would end in a rapid plunge giving up the entire year’s gains (for most people, including the B and D crowd), so it will be with RE – in due time. It’s not going to be the ‘smart money’ buying in 2019, I assure you of that.

As 2018 Q4 was a prelude, 2020 will bring in the real-deal crash in Financial Markets; as well, CDN RE will prove that it can’t avoid the Laws of Economics forever.

I can’t wait for all of this! It will be sublime. Plenty of time to prepare – few ever do!

TCC

#89 Paul on 03.14.19 at 12:23 am

Nope. These mortgages let you buy a house with a roommate, or your cousin or the guy who rents next door. Bad idea. – Garth
————————————————————————————————
It’s like Garth repeatedly says don’t buy a house with someone you do not sleep with.

#90 Fortune500 on 03.14.19 at 12:29 am

So back up she goes. What a mess. Glad we left to be honest. I love Canada and visiting our families, but the opportunities to get ahead are just no there for this generation. My kids get to experience the Canadian summers still, but the US, Middle East, and even Asian markets make a lot more sense for motivated working-age Canadians who want to do more than spend their entire lives buried in mortgage debt with the same standard of living there parents had on one income from Nortel. And snow. I still hate snow.

#91 Overheardyou on 03.14.19 at 1:11 am

Or it could be that people are so maxed out on cheap credit already, they can’t borrow to buy anything. We shall see.

#92 The Real Mark on 03.14.19 at 1:25 am

“#82 Vampire studies on 03.13.19 at 10:23 pm
OK everyone, here is a detailed explanation of the Teranet house price index calculation.”

Yeah well known to lag literally years behind reality. Effectively a “low pass filter” as an engineer might tell you. Not terribly useful. Have a listen to Ross Kay sometime, he does a decent explanation without having to resort to the sort of mathematical intricacies that I only know how to explain such with.

#93 Smoking Man on 03.14.19 at 1:43 am

Hey James.

July 12 1954 , Washington DC Call it my birthday.

#94 Smoking Man on 03.14.19 at 1:46 am

Acutely it was 1952. God damm dementia.

#95 Nonplused on 03.14.19 at 1:55 am

#44 hello darkness my old friend (yesterday)

Not seeing only the darkness, instead stating that the light doesn’t necessarily come from your soul. There is an outside force, whether it be God or dogs or law, which makes good people out of us. Otherwise the law would be unnecessary. In the same way soccer wouldn’t need referees if everybody would just play fair, you can’t have a soccer game without a referee. I feel it is an important thing for people to understand about people. Ya I mean even you. Time and time again we’ve proven that without constraints, we rape and pillage. Just read the old testament. Those are weird stories, because of course raping and pillaging in the name of the lord was allowed, but you can also see through the text that these were bad things.

#96 jane24 on 03.14.19 at 3:33 am

I must be using something here. How does it help young people to get on the housing ladder if houses become more expensive again? Surely their votes will be for polices that bring house prices down and not up or are they that stupid that they can’t figure this out.

#97 Chastity on 03.14.19 at 4:07 am

Wow, cheap money, definatley boner material. But a gift to Mr Socks? Who says it ain’t the 4% drop in taxes on banks that’s making the spread work? This is electioneering 101. Are the CUs going to lose money, not a chance. They have already worked through the budget and know a subsidy from a horses ass when they see it. Gawd damn , I smell me some Liberal sleaze. Look, if Trudeau doesn’t win this election he’ll go to jail. He has to win. Ergo, bribe the banks, easy.

Poloz has already telegraphed his position. He’s standing in the lobby with his pants, hair on fire, waving his piggy little arms at the CBCs cracked up reporters. Rates will go down during the vote cycle. Polo has never been subtle about to whom he lends his support, why fight it.

Conclusion? Time to repurchase CPD was last week when Mr Socks found himself running from a lynch mob.

#98 tallpop on 03.14.19 at 6:53 am

Garth,
You got a mention in the following CBC opinion piece for speaking truth to power!https://www.cbc.ca/news/opinion/opposition-scheer-1.5055428

No wonder I sucked as a politician. – Garth

#99 Steven Rowlandson on 03.14.19 at 7:10 am

The government, banks and realtors must be desparate to prevent a fall in real estate prices and mass default on mortgages.. Not to mention the discontinuance of commissions on home sales and mortgage lending.. They must be scared stiff over it.

#100 Basil Fawlty on 03.14.19 at 7:18 am

It appears the cheap money spigot is going to be open full bore. $70T in new credit since 2008 and now rates below even the “official” rate of inflation.

This is the largest misallocation of capital in world history. We have only papered over the 2008 financial debacle, nothing has been fixed.

#101 crowdedelevatorfartz on 03.14.19 at 7:50 am

@#jane24
“Surely their votes will be for polices that bring house prices down and not up or are they that stupid that they can’t figure this out.”

*****

1st: Legalize pot
2nd: Tell blissed, tattoo’ed , beareded Millenials they can have anything they want because they’re “special”.
3rd : Win re-election
4th: Sign another multi billion dollar contract with a rebranded SNC.
5th: Take family to the Aga Khan’s private island for some down time.
6th: Raise taxes in the Summer when no one notices.

#102 Stan Brooks on 03.14.19 at 8:03 am

Nothing new under the sun.

Just normal corruption, incompetence and economic decline in a stagnant, inflationary, bankrupt third world country.

The warning to move all assets out asap was issued long time ago.

You don’t want to be paying for this mess.

Pathetic sad place.

#103 Tater on 03.14.19 at 8:07 am

For the uppa uppa uppa crowd, take a quick read of the first 5 or 6 pages of this, and have a think about where we might be in the cycle.

https://www.economicprinciples.org/wp-content/uploads/ray_dalio__how_the_economic_machine_works__leveragings_and_deleveragings.pdf

#104 Remembrancer on 03.14.19 at 8:13 am

#93 Smoking Man on 03.14.19 at 1:43 am
Hey James.

July 12 1954 er 1952 , Washington DC Call it my birthday.
———————————————————-
Those weren’t birthday balloons Smokie, they were weather balloons and temperature inversions… ya temperature inversions, that and maybe street lights reflecting off the clouds, maybe…

#105 maxx on 03.14.19 at 8:18 am

“Or, in this case, a mortgaged condo on the 18th floor.

* Sigh. *”

IMHO, this “fortuitous” development will toast the retirements of legions of Mils. A torrent of interest payments about to be harnessed – and all most see is salvation through re.

What is it about acquiring and being liquid that so many just don’t get? It can’t be that intangible a concept, can it?

This question always leaves me scratching my head, however I do know that people with actual money saved couldn’t imagine existing without it as the money then works for you, not the other way around.

#106 Gravy Train on 03.14.19 at 8:28 am

#95 Nonplused on 03.14.19 at 1:55 am
“Not seeing only the darkness, instead stating that the light doesn’t necessarily come from your soul. There is an outside force … which makes good people out of us.” Are you saying you’re devoid of goodness? Gosh, I’d hate to be you, and to live in your world! :)

#107 Penny Henny on 03.14.19 at 8:31 am

Niagara region sales numbers for Feb 2019

https://www.niagararealtor.ca/news-stats#PhotoSwipe1552566518952

#108 Dominoes Lining Up on 03.14.19 at 8:31 am

If this is not a canary in the coal mine…….

https://ca.finance.yahoo.com/news/canadians-are-sellingoff-assets-to-pay-down-debt-181853239.html

#109 young & foolish on 03.14.19 at 9:24 am

Grandad says: Cheap money = High Valuations (yup, it’s that simple)

I am grateful for this blog (thanks Garth!)

#110 Tater on 03.14.19 at 9:33 am

#45 Simple Yes on 03.13.19 at 7:56 pm
#30 BlogDog123 on 03.13.19 at 7:04 pm
So this all just delays the inevitable implosion of family finances?

Take heed 30-somethings-up-to-your-eyeballs-in-debt:

Like Admiral Ackbar says: “It’s a trap!”

——–

Same ‘it will delay the inevitable’ and ‘beware the bear trap’ nonsense spouted in 2012, 2013, 2014, 2015, 2016, 2017, 2018, 2019 and ‘insert future year here’

Wrong for years, and soon to be wrong in the foreseeable future….
—————————————————————-
So at what point does the price appreciation slow? Or put another way, how high does the ratio of average price to average income have to get before you think we plateau?

#111 dharma bum on 03.14.19 at 10:17 am

#28 IHCTD9

Will folks really clasp their hands in joy at the prospect of diving into 30 years worth of debt slavery? For a 7 figure crap pile mildew farm in the GTA? So they can sit in traffic half their lives while making the same or less as just about everyone else in the country?
——————————————————————-

Yup.

Because stupidity reigns.

When you suffer from stupidity, you lack the ability to see reality.

Stupid people are delusional, and follow their delusions.

One of those delusions is:

“Toronto is such a great city. It’s, like, really cool and hip, and has great ethnic restaurants, and is, like, sooooo culturally diversified and stuff, and my condo has such neat handles on the kitchen cupboards”.

Ha Ha.

Boomers win again.

#112 232 on 03.14.19 at 10:31 am

#89 Paul on 03.14.19 at 12:23 am
Nope. These mortgages let you buy a house with a roommate, or your cousin or the guy who rents next door. Bad idea. – Garth

It’s like Garth repeatedly says don’t buy a house with someone you do not sleep with.

—————————————————————————————————–

Paul, I guess Garth’s advice doesn’t apply to Alabama.

#113 tkid on 03.14.19 at 10:33 am

So at what point does the price appreciation slow? Or put another way, how high does the ratio of average price to average income have to get before you think we plateau?

Prices won’t come down until I buy, and I won’t buy for at least another year or two …

#114 joblo on 03.14.19 at 10:34 am

“The Knockout”
SNC Lavalin, where is CBC the National Broadcaster on this story?

https://buffalochronicle.com/2019/03/11/political-grandmaster-frank-iacobucci-is-at-the-center-of-snc-lavalin-kinder-morgan-scandals/

#115 Bongo on 03.14.19 at 10:34 am

I used to think deleted posts were offensive and inappropriate. Now I know from experience most are probably just explaining a truth that Garth stubbornly refuses to acknowledge. You couldn’t pay me to have money managed by someone so closed minded that they are unable to change their mind in the face of new data.

Foam all you want, but this blog will not devolve into the anti-Chinese, xenophobic swamp. Just go away. – Garth

#116 entropy on 03.14.19 at 10:40 am

I’ve never seen something so unethical. jfc

#117 Ken from BC on 03.14.19 at 11:10 am

How’s this for Mr Dressup and his liberal government trying to save Canadian jobs? Makes me sick to my stomach.

https://business.financialpost.com/opinion/gwyn-morgan-talk-about-collusion-how-foreign-backed-anti-oil-activists-infiltrated-canadas-government

#118 MF on 03.14.19 at 11:47 am

111 dharma bum on 03.14.19 at

Usually people who criticize are secretly envious.

MF

#119 Tater on 03.14.19 at 12:04 pm

#118 MF on 03.14.19 at 11:47 am
111 dharma bum on 03.14.19 at

Usually people who criticize are secretly envious.

MF
—————————————————————–
This post brought to you by a relentless weed critic.

#120 Gordon on 03.14.19 at 12:17 pm

Trudeau now a proven traitor collaborating with American hate groups to destroy Canada. Read this shocking and disgusting National Post article.

https://business.financialpost.com/opinion/gwyn-morgan-talk-about-collusion-how-foreign-backed-anti-oil-activists-infiltrated-canadas-governmentCanadisn

#121 JB on 03.14.19 at 12:37 pm

Didn’t Mr. Socks start this mortgage slaughter last year? Now they want to help all of us?

#122 American Activists on 03.14.19 at 12:42 pm

#117 Ken from BC – American activists engineered Harpo’s election too. His win was engineered and no accident whatsoever.

#123 Penny Henny on 03.14.19 at 12:50 pm

#114 joblo on 03.14.19 at 10:34 am
“The Knockout”
SNC Lavalin, where is CBC the National Broadcaster on this story?

https://buffalochronicle.com/2019/03/11/political-grandmaster-frank-iacobucci-is-at-the-center-of-snc-lavalin-kinder-morgan-scandals/

/////////////

HOLY, WOW!

read what anonymous writes in the comments.
scroll way down

#124 Brett in Calgary on 03.14.19 at 12:54 pm

Several of you have already posted the link to this article, but you know what jumps out to me? Look at Edmonton’s peak… 12 years ago! Damn. Good investment?

Housing Price Index in major Canadian cities
1 Calgary -0.8% -2.7% -6.5% Oct 14
2 Edmonton -0.1% -1.6% -6.4% ***Sep 07

#125 Karma Bum on 03.14.19 at 1:05 pm

@#111 dharma bum on 03.14.19 at 10:17 am
#28 IHCTD9

Will folks really clasp their hands in joy at the prospect of diving into 30 years worth of debt slavery? For a 7 figure crap pile mildew farm in the GTA? So they can sit in traffic half their lives while making the same or less as just about everyone else in the country?
——————————————————————-

Yup.

Because stupidity reigns.

When you suffer from stupidity, you lack the ability to see reality.

Stupid people are delusional, and follow their delusions.

One of those delusions is:

“Toronto is such a great city. It’s, like, really cool and hip, and has great ethnic restaurants, and is, like, sooooo culturally diversified and stuff, and my condo has such neat handles on the kitchen cupboards”.

Ha Ha.

Boomers win again.
____________________________

Win at what? being old?
there are a lot of boomers out there caring heavy debt into retirement. Why are you so upset with toronto?
If you don’t like it don’t go there. move along.

#126 Gravy Train on 03.14.19 at 1:27 pm

#111 dharma bum on 03.14.19 at 10:17 am
“… [S]tupidity reigns. When you suffer from stupidity, you lack the ability to see reality. Stupid people are delusional, and follow their delusions.…” I take it you’re not a Buddhist! You come across as adharma! :)

#127 AGuyInVancouver on 03.14.19 at 1:44 pm

#56 Honest Realtor on 03.13.19 at 8:55 pm
I am afraid to say it but the truth is that we have merely had a predictably mild lull in real estate values, and another big increase is on the way. This will probably last another decade, then repeat. I urge the hopeful doomsayers to get off the sidelines and buy soon before they are truly priced out forever. Toronto will not crash, nothing close is going to happen. Don’t keep missing the boat.
_ _ _
What a load of crap. New figures how the average Canadian is completely tapped out. Congratulate yourself on reaping high commissions while you killed the golden goose by playing your part in the insane real estate inflation over the last decade.

#128 2020 Crash? on 03.14.19 at 1:49 pm

#88 tccontrarian on 03.13.19 at 11:04 pm

As 2018 Q4 was a prelude, 2020 will bring in the real-deal crash in Financial Markets; as well, CDN RE will prove that it can’t avoid the Laws of Economics forever.

————–

tc, I usually read all your posts (as well as a select other few) on here. What is your 2020 financial market crash prediction based on? Thanks in advance.

#129 MF on 03.14.19 at 2:04 pm

#119 Tater on 03.14.19 at 12:04 pm

Lol tushe.

MF

#130 PastThePeak on 03.14.19 at 2:12 pm

All the ingredients for the dead cat bounce before the fall.

Canuckistan national housing value falls for first time in decades, while the debt to income ratio ratcheted higher to 174. Sounds like all is well to me…

#131 James on 03.14.19 at 2:22 pm

#104 Remembrancer on 03.14.19 at 8:13 am

#93 Smoking Man on 03.14.19 at 1:43 am
Hey James.

July 12 1954 er 1952 , Washington DC Call it my birthday.
———————————————————-
Those weren’t birthday balloons Smokie, they were weather balloons and temperature inversions… ya temperature inversions, that and maybe street lights reflecting off the clouds, maybe…
_________________________________________
So that’s a confirmation of your age Old Man! Happy Birthday your 67, you look much older on you periscope videos.

#132 James on 03.14.19 at 2:29 pm

#125 Karma Bum on 03.14.19 at 1:05 pm

@#111 dharma bum on 03.14.19 at 10:17 am
#28 IHCTD9
Will folks really clasp their hands in joy at the prospect of diving into 30 years worth of debt slavery? For a 7 figure crap pile mildew farm in the GTA? So they can sit in traffic half their lives while making the same or less as just about everyone else in the country?
——————————————————————-
Yup.
Because stupidity reigns.
When you suffer from stupidity, you lack the ability to see reality.
Stupid people are delusional, and follow their delusions.
One of those delusions is:
“Toronto is such a great city. It’s, like, really cool and hip, and has great ethnic restaurants, and is, like, sooooo culturally diversified and stuff, and my condo has such neat handles on the kitchen cupboards”.
Ha Ha.

Boomers win again.
____________________________

Win at what? being old?
there are a lot of boomers out there caring heavy debt into retirement. Why are you so upset with toronto?
If you don’t like it don’t go there. move along.
_______________________________________
Toronto and the surrounding burbs are full of delusional retirees who bought into the condo scene. Catch their sales when they all go down in flames next year. Can you say Condo Crash?

#133 James on 03.14.19 at 2:32 pm

#120 Gordon on 03.14.19 at 12:17 pm

Trudeau now a proven traitor collaborating with American hate groups to destroy Canada. Read this shocking and disgusting National Post article.

https://business.financialpost.com/opinion/gwyn-morgan-talk-about-collusion-how-foreign-backed-anti-oil-activists-infiltrated-canadas-governmentCanadisn
__________________________________________
Say it isn’t so? Americans meddling in our politics and business? They are paid stooges by big oil in the USA, worried that we may tip their ship over.

#134 Alistair McLaughlin on 03.14.19 at 2:37 pm

@#122 American Activists, rumours and innuendo from rabble.ca do not qualify as evidence. There is, however, an established paper trail of evidence showing how the Tide Foundation launders money from wealthy American donors that is then used to finance Canadian activism.

Mind you, the paper trail is hardly required, because they aren’t exactly subtle about it. Some of these organizations have openly bragged on their US websites about how they were able to influence Canadian campaigns and foment opposition and dissent in Canadian First Nations communities.

#135 jess on 03.14.19 at 3:45 pm

Then 45, Rebasso specialized in advising Russian clients

Then 45, Rebasso specialized in advising Russian clients on how to do business in the West. He had an excellent reputation as a fast, reliable, and discreet partner, and he spoke Russian fluently.

But it had all come apart. Rebasso admitted he had been used to launder tens of millions of dollars. He explained that, for over a year, he had been accepting payments from Russian criminals and had sent the funds to other bank accounts at their instruction.

As it turns out, those criminals were using companies that were part of the Troika Laundromat. The massive financial scheme revealed in OCCRP’s latest Laundromat investigation had been put together by Troika Dialog, then Russia’s largest private investment bank. Some of the accounts Rebasso wired to belonged to two of the system’s core offshore companies: Industrial Trade Corp. and Nixford Capital Corp.

Between December 2006 and February 2008, Rebasso used 150 individual transactions to send almost US$ 96 million to laundromat accounts at Ukio Bankas, a Lithuanian bank.

In the last days of 2008, Erich Rebasso, an Austrian lawyer, sent a letter to the main Vienna headquarters of the Federal Criminal Police, the country’s top law enforcement agency.

Its purpose was unusual — the father of four young children was blowing the whistle on himself.

“I deeply regret having been used for criminal purposes and I am willing to submit the matter to the required criminal review,” Rebasso’s five-page confession concluded.

https://www.occrp.org/en/troikalaundromat/death-in-vienna

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

i wondered why ukraine stopped co-operating with new york investigators ?
==============================
bribes were called “candies”
“The investigation first revealed that as war raged in Eastern Ukraine, top defense officials made millions of dollars selling smuggled Russian military equipment to the military at inflated prices with fraudulent contracts.

The scheme cost Ukraine’s military US$7.96 million during wartime, and implicated Oleh Hladkovskyi, the first deputy secretary of Ukraine’s National Security Council and a close friend of Ukraine’s president Petro Poroshenko.

These explosive revelations sparked calls for Poroshenko’s impeachment. But the investigation didn’t stop at top officials. Rather, its final part, released Monday, showed that almost all of Ukraine’s law enforcement agencies knew about the scheme for three years–and had been accepting bribes to not do anything about it. … read more @

https://www.occrp.org/en/27-ccwatch/cc-watch-briefs/9366-ukrainian-graft-investigators-to-be-investigated-for-graft

#136 jess on 03.14.19 at 3:52 pm

why was this lawyer murdered?

…”the scheme had been offered what appeared to be lucrative investment opportunities through a platform called Finlist Forex Found.

https://www.occrp.org/en/troikalaundromat/death-in-vienna

#137 jess on 03.14.19 at 3:56 pm

Slovakia Charges Man With Ordering Journalist Kuciak’s Murder

By Reuters

March 14, 2019

BRATISLAVA — Slovak police have charged a man with ordering the murder of investigative journalist Jan Kuciak and his fiancee, prosecutors said on Thursday, a case that triggered mass protests and the resignation of a prime minister.

#138 Stop the drivel, Mark. on 03.14.19 at 4:00 pm

#92 Real Mark
Yeah well known to lag literally years behind reality.

Not this crap again, Mark.

The Teranet HPI dropped the most in 2008.

If it had lagged “for years” it would have dropped in 2011 instead.

Hence, no lag.

For newcomers to the blog: never listen to the Mark drivel. Totally useless. According to him, YVR peaked in 2013. Yeah, right….

YVR peaked in late 2017, early 2018, and Teranet HPI shows you JUST THAT.

#139 Bongo on 03.14.19 at 5:09 pm

Nowhere in my post did I mention Chinese. The data is about non-resident ownership and that’s all I stated in my post. Stop searching for xenophobia where it doesn’t exist. Residents should come first, and there is nothing xenophobic about that.

Bye-bye. – Garth

#140 Anti-social social club on 03.14.19 at 5:36 pm

@115 bongo

Pretty sure no one wants to pay you to invest your money with Garth so no worries there! Quite sure everyone else like me is super happy with all the great advice passed along from Garth and others. I’m quite happy trusting Garth to delete posts he deems unsuitable. I really don’t feel I’m missing out on anything.So bye bye

#141 Remembrancer on 03.14.19 at 5:55 pm

#123 Penny Henny on 03.14.19 at 12:50 pm

read what anonymous writes in the comments.
scroll way down
————————————————————-
that comment reads like a recovered dispatch from the 19th century, hip hip ho ho park a dreadnaught off their shore and they’ll toe the line… pour another gin & tonic…

While compelling fanfic, I suggest reading a sampling of their other stories, all which seem to be about other powerful sponsors who can also keep the rest of the 5th Estate at bay except for that plucky Buffalo Chronicle…

#142 Unhinged Trader on 03.14.19 at 7:23 pm

I’m buying a new shit heat Townhome in Collingwood and renting out to a single mom.

#143 gfd on 03.15.19 at 8:25 am

Four reasons why you might not get the great mortgage rate you saw online.

ROB CARRICK PERSONAL FINANCE COLUMNIST
GLOBE AND MAIL
PUBLISHED MARCH 14, 2019
UPDATED 14 HOURS AGO

#144 tccontrarian on 03.15.19 at 3:07 pm

#128 2020 Crash? on 03.14.19 at 1:49 pm

#88 tccontrarian on 03.13.19 at 11:04 pm

As 2018 Q4 was a prelude, 2020 will bring in the real-deal crash in Financial Markets; as well, CDN RE will prove that it can’t avoid the Laws of Economics forever.

————–
tc, I usually read all your posts (as well as a select other few) on here. What is your 2020 financial market crash prediction based on? Thanks in advance.

/////////

The SP500 average PE is at twice the average of 15. At bear-market bottoms it’s at ~6.
The current ‘growth’ we’ve experienced since the GFC has been on the shoulders of debt, which is artificial and unsustainable. It hasn’t been fundamental economic principles fueling this. In a fiat money system these things can give the illusion of ‘wealth’, but I’m not buying it.
Also, Fund flows are at all-time highs, again — the kiss-of-death of any bull market as it’s the dumb money buying (just as in CDN RE).
Financial markets don’t reward the least knowledgeable participants – over the long term.
By end of 2020 SP500 will lose >55-65% from peak (most likely seen in Q3 2018). The bullish action in Precious metals/EM’s are signaling (as they usually do), that this bull market in the US markets is over. Also record selling from top corporate insiders.

TCC