“Well,” blog dog Craig wrote as he emailed me out of the azure, “it’s happening! We are selling our little 1950s house in North Vancouver. The realtor says we have 4 offers so, yes, I’m thinking it is really happening!”
Turns out our kennel colleague was pumped at the thought of (finally) have a nice pile of dough. About $1.5 million, actually. Good insurance against the future when you’re 51 years old with two teenagers, a dog and a cat.
“We think the housing market is going down so we plan to rent for a while. Looking forward to portfolio returns that will pay our rent, so we finally live for free!”
And it was a good plan. When Craig sent me that note four weeks ago it was clear the Van market was starting to seriously roll over. Fortunately cheap mortgages and spring hormones promised enough buyer activity to get them out before the real pain rolled in.
Close, but not close enough as it turned out.
One week later: “A quick update we have an accepted offer. One subject to be removed on April 30th. If that happens we will be in contact quickly as closing date is May 10th.
“Renting vs buying another house immediately is not an easy emotional decision.” Craig confessed, “but a good discussion with you and the part of our sale that lets us live rent free in the house until October 1st should help clear the way.”
One week later: “Well that didn’t happen, they couldn’t get financing. But we do have another offer with no subjects however we haven’t accepted it yet. If we close it will be quick (May 15th) so we will be in touch.”
And yesterday: “Our house didn’t sell and we took it off the market. A weird sense of fear over took us when we felt our place had fallen too much in value. We likely could have sold for 80% of assessment but it seemed like too much of a haircut.”
And then, after Mr. Market had scorned Craig, came the rationalization:
“The plan was not to re-buy but that didn’t seem to matter. My wife really wanted to retain a home and a rental wasn’t going to do it. As soon as it was becoming real, turning our house into cash I started to worry about what if the stock markets crash and or real estate comes back. So we wimped out and now are looking to add on an addition. A big expensive adventure but at least we will be saving the 100k in Real estate commissions and property transfer tax. Thanks for listening and I’ll keep reading the blog.”
And so it ends. Instead of harvesting a once-per-lifetime windfall gain, Craig & squeeze suffered an attack of humanity. Greed kept them from selling for less than they might have received in other times. So they reaped nothing. Fear prevented them from going liquid. In fact, they’ll double down on a one-asset strategy, saving $100,000 in realtor commission by spending twice that on more house. Still 50 years old. Three dependents. Even more eggs in one basket. And in a market now in distress.
Fresh evidence that came Tuesday from YVR appraiser Paul Sullivan, of Burgess, Cawley, Sullivan & Associates. Seems the BC Dippers are being spectacularly successful in sucking away tens of billions in real estate equity, crashing sales and messing with people like Craig. The appraiser estimates that in a single year – April to April – Vancouver property owners lost $89.2 billion (with a ‘b’) in equity. More than half of that was in the city proper, while West Van shed close to $8 billion – or $451,485 per household. Ouch!
Postmedia News graphic, REBGV statistics
The culprit? “Demand-side taxes,” he says. The disincentives to buy in the Lower Mainland are now legion. A speculation tax. An empty-houses (or under-utilized) tax. Higher property tax on expensive homes. The foreign buyer tax. And the promise of more to come. Then, of course, there’s the stress test. A perfect governmental storm, concocted by politicians who can’t resist trying to screw with market forces. “Something has to give,” Sullivan says, as BCers deal with higher taxes and less wealth. (By the way locals have more of their net worth in their homes than anywhere else in Canada, says our central bank.)
Meanwhile a Reuters poll of economists finds an expectation Van prices will fall further throughout 2019. “The major risk right now is with the overextended consumer,” says Peter Norman, chief economist at Altus Group. “With interest rates now leveled off, this risk is sidelined but there continues to be stress in terms of the consumer’s ability to take on increased spending.”
Anyway, there’s today’s tale. One family eschews being millionaires, to invest even more in a single asset class in a place of doom and confusion. Less free, less diversified, less balanced, more at risk, more exposed. Familiarity’s not always the right answer.
But Craig did send me a snap of his dog. Looks worried.
148 comments ↓
I just paid for my son’s 1st graduation dinner. Grade school done as a dinner.
1.5 Mil could easily spit put 50-75k a year withput ever dipping into the capital. Thats like a whole other person working for the household!
Talk about a lost opportunity. They will probably ride the slow rollercoaster all the way down.
First!
Seems like solid evidence I had my condo listed for 400k in Langley last August just sold for 372k .. what a roller coaster good thing in watching from the beer garden. Red horse anyone? La Dolce Vita…. you do know “Its more fun in the Philippines” … right?
There are now 4 houses on our street in Calgary for sale. Many more in the community and not much seems to be selling…….
Cont. from previous day….
Shawn Allen on 05.21.19 at 10:48 am
Green party and Truthiness and Spin
#47 Russ on 05.20.19 at 9:07 pm
Wake up.
The Green Party has two seats!
*******************************
Let’s jazz that up a bit!
Green party surges and doubles seat count!
Green party seat count rises 100% in one day. Let’s see, annualized that’s a growth rate 36,500%!!!
But seriously those two ousted-from-caucus-for-being-too ethical former cabinet ministers ( Jody Wilson-Raybould and Jane Philpott) are rumored to be mulling joining the Green party.
Green Party recently got official opposition status in PEI.
Do not under estimate the Green Party this next election.
=========================
The Green Party are the only ones with gender parity in the House o’ Parliament.
How’s that for ‘creds’?
Just sold my 2016 bought GTA home for a 6% gain (that includes all renos, taxes, maintenance, insurance, realtor fees, closing costs, etc.)
Did I become filthy rich? No. But 6% is not bad and I got to live somewhere stable that I liked.
Now I bought another great home to raise my three kids for the long term. Better area and got it at a good price Buying is the most important part.
Judging by my friends and associates who live pay cheque to pay cheque….
Its going to be a blood bath.
#4 PHMIKE on 05.21.19 at 3:01 pm
Seems like solid evidence I had my condo listed for 400k in Langley last August just sold for 372k .. what a roller coaster good thing in watching from the beer garden. Red horse anyone? La Dolce Vita…. you do know “Its more fun in the Philippines” … right?
……………………………………………………………………..
You don’t sound like a loser man. But didn’t anyone tell you that whoever has bought a condo is going to lose. They don’t hold any value. Your worst investment experience is now behind you. Good luck in the future.
They could have traveled the world for 6 months of the year and live like kings without even touching their capital… yet they doubled down….
Wow, just wow….
For a 1.5M windfall (assuming it is all paid off), getting say 60K per year interest would not be enough to make me move unless I was cashing out of the city and moving somewhere remote. Finding a good comparable house to rent (while still raising teenagers) would be at LEAST 4K per month in North Van. The savings wouldn’t be worth it in my view given all the extra insecurity in getting tossed out each year, paying moving expenses etc… If I was checking out of YVR it would be a different story.
For the record, Mr. Sullivan’s whining and moaning is all noise to me.
Poloz sees higher interest rates on the horizon once economy exits current soft patch
https://business.financialpost.com/news/economy/poloz-sees-higher-rates-as-the-natural-tendency-for-canadas-economy
IMF urges Canada to resist pressure, stay course on mortgage stress test
https://business.financialpost.com/real-estate/imf-urges-canada-to-stay-course-despite-calls-for-easing-mortgage-stress-test
Stress test is here to stay…..reality is that rates will be rising
Wouldn’t now be the time to buy a nice house in Vancouver?
Ditto here in the Okanagan! Lots of houses sitting with For Sale signs and very few SOLDS. Even the realators are indicating that they see a continuing sales slide at least for the balance of this year.
For many, many reasons, the provincial election can’t come too soon – much more of this NDP “management” and there will be no economy left in BC.
#3 PHMIKE on 05.21.19 at 2:58 pm
First!
==========
But you hesitated.
Nearly $90B in equity wiped off Lower Mainland home values in past year (INFOGRAPHIC);
https://www.richmond-news.com/nearly-90b-in-equity-wiped-off-lower-mainland-home-values-in-past-year-infographic-1.23826849
Oh Craig. Ohhhhh Craigy craig craig
What is the letter writer talking about, he really has no clue..
The BC Property Transfer Tax is paid by the buyer.
Realtor commission is 7% on first 100k, 2.5% on remaining..
So 1.5 mil is 42k (7+35)
(Property transfer tax should not be confused with annual property taxes.
Annual property taxes are paid yearly for each property you own or have a registered interest in to fund services in your area.
The property transfer tax is paid one time when the title is transferred from the seller to the buyer.)
But today’s chart shows Port Moody & Delta are up! Would those areas happen to be exempt from some of those add on taxes? Or are they just the last outposts of positive housing activity?
About the sale that wasn’t, talk about emotions triumphing over fiscal sense. Though we don’t necessarily have all the story. Is the 1950’s bungalow all on one level? In excellent condition? Centrally located with great amenities nearby? Easily renovated to age gracefully ‘in place’? If the answer is yes to all of the above, maybe there are good reasons to eschew 1.5 million. Though if there are no retirement savings or pensions other than CPP/OAS the decision not to sell may trigger regrets later on.
Strategy to employ in a falling market?
= ” Chase the market down “.
I’ve posted this numerous times….aka get ahead of the curve/herd.
Chances of price recovery are near zero…accept this .
If the given market is exhibiting say 10% haircuts…make your 15%..make it stand out and attract buyers..before 15% haircut is the norm…then you have to try 20% haircut.
I sold my 680 sq ft condo in Lower Mainland last June, paid off the balance of mortgage and bought a 10 year old 1580 sq ft house with a garage in Kamloops, paid cash and have a little left over. Completely debt free, no heloc, no debt ! Working 3 days a week, some of my friends say I’m lucky… maybe so ? There’s no real profit until you cash out I kept telling them.
M56BC
When many Canadians, don’t know what finances our Country, and embrace Politicians, to solve their problems, then we are on a fast track to failure… Why do Canadians, have to pay other Canadians, to Police how Canadians, do just about everything, in our daily lives, now… In the recent past in Edmonton, there have been discussions, on a Municipal levy to document which Trees can be planted and which trees can’t grow, or be encouraged to grow in a specific neighborhood. Some Canadians, are so Tax Brainwashed, they chastise other Canadians, for not having a sales tax… It is Orwell, all over in the new millenium…. And soon no doubt we will have facial recognition, to control us… I am older, and a little surprised at the New Hires that believe Politicians, like Trudeau, will make their lives so much better… at least that is the trend today… Horgan et al., is an example of a Group of Activists, without a real or impressive mandate to Govern, but charge ahead with Draconian rules, on a three person Coalition Government, that the Folks, would like a do over for… What is this country coming to… Common sense seems to be gone for good..
Russian documents reveal desire to sow racial discord — and violence — in the U.S.
New documents reveal plans by close Putin associate Yevgeny Prigozhin to foment racial tensions in the U.S. He has already been indicted for the 2016 election meddling.
“The documents — communications between associates of Yevgeny Prigozhin, a Kremlin-linked oligarch indicted by special counsel Robert Mueller for previous influence operations against the U.S. — laid out a new plot to manipulate and radicalize African Americans.
…”Some of the documents appear to have been sent by Dzheykhun “Jay” Aslanov, an employee of the Internet Research Agency, the St. Petersburg-based troll farm that played a key role in the 2016 Russian meddling campaign. Aslanov was one of 13 Russians indicted by Mueller in February 2018 for his role with the IRA….
https://www.nbcnews.com/news/world/russian-documents-reveal-desire-sow-racial-discord-violence-u-s-n1008051
From BNN today:
“Several rounds of macroprudential measures, provincial and municipal tax measures, and tighter monetary policy have contributed to a reduction in housing-related financial stability risks,” the IMF said in a statement following an official mission to Canada”
Garth it looks like the IMF doesn’t agree with your take on the wisdom of provincial real estate taxes to reel in speculative excess.
In metro Vancouver, the number of Lots available for sale is unbelievable. These lots are owned by developers who normally would build houses to sell and would never ever sell ready to build lots.
House sales are dead and now no one is even touching Lots…unbelievable.
More symptoms of a very sick industry on life support.
“One week later: “Well that didn’t happen, they couldn’t get financing.””
This has been the norm in the GTA for the past few months, especially with new builds, where the builder has “inventory lots”. Many of these inventory lots are deals that fell through due to financing.
The CRA looking for second suite income tax and flippers that were dodging tax. The party is over. No doubt. Go play with a mortgage calculator and you will quickly see that even with $250k annual income and $200k deposit you can’t afford half a home in North Vancouver. Houses will come down 50% or even more before this is over.
UBS to implement zero interest rate on savings accounts
This content was published on May 21, 2019 2:49 PM May 21, 2019 – 14:49
“Interest rates of youth savings accounts, retirement accounts (third pillar) and vested benefits pension accounts (second pillar) will also take a hit, dropping from 0.50% to 0.25%, 0.20% to 0.15%, and 0.05% to 0.01% respectively.”
=======
The European Union has issued a positive, yet guarded, response after Swiss voters agreed at the weekend to both bring gun laws and the corporate tax regime into line with EU requirements.
On Sunday, voters gave the green light to a tightening of gun ownership rules that allowed Switzerland to remain in the Schengen free movement zone. They also gave the thumbs up to a revision of company tax following years of complaints from the EU that the old regime violated competition rules.
https://www.swissinfo.ch/eng/big-hurdle-remains_eu-welcomes-swiss-double-vote-on-guns-and-taxes/44976118
Brussels has given Switzerland until July 2019 to decide whether it wants to accept the deal.
The framework agreement covers five key themes: free movement of persons, mutual recognition of industrial standards, agricultural products, air transport and land transport.
… the EU has indicated it would toughen its stance further. For example, the Swiss stock market would likely be denied continued equal access to the EU market, meaning it could not trade shares of EU companies.
https://www.swissinfo.ch/eng/latest-news/point-of-no-returns_ubs-to-implement-zero-interest-rate-on-savings-accounts/44978770
#17 Duncan on 05.21.19 at 4:09 pm
“Oh Craig. Ohhhhh Craigy craig craig”
——-
Exactly what I was thinking!
This same ‘Craig’, if offered the SAME amount of money for the SAME house in, say 2014-15 (ie. pre- major bubble), he would’ve snapped it up instantly thinking how ‘lucky’ he got.
Recency bias works on both sides of the curve…
One thing that I’ve learned (the hard way), it’s just as important – if not more so – to be able to cut ‘losses’ when wrong, than riding the big ‘wins’.
In this case, the ‘loss’ perceived is from accepting 80% of assessment. Alright, tell us this Craigy, what’s better: 80% of assessment or 65% of assessment?
We all learn from mistakes – some BIG, some small.
TCC
Chances of price recovery are near zero…accept this
————————————————————–
This a million times. Forrest through the trees or something like that.
Good luck Craig.
Paper millionaires…ya gotta sell to make it real…
I don’t believe Craigster reads this blog everyday….he sounds like an askhole: someone who seeks advice, but then does the complete opposite of what he’s told. Maybe after he reads the steerage section today he will come to his senses………….hmmmm prob not.
Seems the BC Dippers are being spectacularly successful in sucking away tens of billions in real estate equity, crashing sales and messing with people like Craig-Garth
_ _ _
And yet you continually ignore the biggest reason for the drop, thereby putting yourslef in the same boat as the real estate shills. According to the Globe & Mail: …”Chinese courts have begun jailing nationals for life for moving money illegally out of the country, part of Beijing’s ongoing effort to halt currency outflows,..”
The amount of hubris out there in regards to value & what home owners think they can get selling their homes in the current real estate market is astounding. Financial illiteracy is rampant.
A Wells Fargo banker pleaded guilty to knowingly opening bank accounts for people working with the Sinaloa cartel.
Luis Figueroa of Tijuana, Mexico, admitted he took part in the money laundering scheme that stretched across the US.
Money laundering organizations recruited people who would open bank accounts for the cartel’s drug money, according to US investigators.
The drug money would be deposited in amounts below the threshold for regulatory reporting into “funnel accounts.”
Visit Business Insider’s homepage for more stories.
A Wells Fargo personal banker pleaded guilty on Thursday to knowingly opening bank accounts for people working with the Sinaloa cartel.
http://visar.csustan.edu/aaba/jerseypage.html
When our parents bought or built homes, they weren’t thinking about the juicy profits they were going to make when they sold; they thought long term “nest” not “nest egg”.
It seems Craig is being forced into that way of thinking now, whether he likes it or not.
RE: “Looking forward to portfolio returns that will pay our rent, so we finally live for free!”
Someone should tell him how ETF portfolios actually work, so he is not banking on that comment.
Yes, sometimes the ETF will pay the stated dividend, if they have the money and yes sometimes, the ETF will go up in value. Over a period of years, you will get a positive rate of return which averaged out will be somewhere between 4-6%.
Sometimes, you will lose tens of thousands of dollars per month, and the dividends will not come.
Earning money this way requires a lot of self control and a lot of budgeting sense. Someone who is used to a steady paycheque, is not going to be pleased with how they have to manage their cash flow. It’s a delicate balancing act.
I believe the people who would be best able to just jump into this sort of situation and be successful at it would be farmers. They are used to getting paid once or twice a year and having to save the money to last throughout the entire winter, and every so often having to live off of savings for longer periods of time until the markets come back again.
For your average working stiff used to cash deposited in their bank account every month, earning your money off of investments is a hard shock.
That’s why anyone with a such windfall amount would be smart to have some professional help. No, you don’t count on dividends to pay the rent, but rather return of capital distributions, carefully and tax-efficiently harvested by a portfolio manager. – Garth
I commented this many times, broken record and all:
Greed and Avarice NEVER end well.
Today’s Blog, an abject lesson in that. Yet again, thank you My Liege.
Good to read a couple of Commenters got out while the getting was good (#7 Captain Uppa, #21 Chopping Broccoli). Nicely done.
And #31 PastThePeak, no truer words said. An ongoing comment by yours truly during the heydays years ago. The value of a home has always been what it sells for not what the piece of paper says its worth.
————————————–
#4 PHMIKE
Home is where the heart is, Philippines or wherever that is on the face of this beautiful Planet. Had no family left in Kanuckistan, gobs of them in Italia, so here I came (La Familia).
Sorry, but the foods better here. I expect they have pizza and pasta in the Philippines; since, we’re EVERYWHERE (a sign of civilization esp. if you have an Emporio Armani):
https://www.tripadvisor.ca/Restaurants-g298573-c31-Manila_Metro_Manila_Luzon.html
https://en.wikipedia.org/wiki/Filipino_spaghetti
https://www.clickthecity.com/shops-services/b/or48b05/emporio-armani-greenbelt-4
In regards to Toronto, in my area, downtown waterfront, I get the impression that some people are buying without really understanding the market dynamics, fundamentals and future price gain expectations.
My wife and I know two couples, both living in Canada for the past 2 years. They recently purchased, a few weeks apart, condos for around 950K (2 bedrooms, 2 bathroom). In my opinion, it’s a terrible decision!
Wondering how many people are making these massive financial decisions by trusting as their only source of info, Real estate agents, banking economist, developers and the rest who get non-stop MSM coverage?
Can’t see price gains in condo segment, or single detached for the foreseeable future. This whole market is about to get a massive hit!
Of course prices in Van will continue to fall. What sane person would pay 1.5 million for a small bungalow in North Van, where there is more rain and more bridges?
Great job the NDP is doing, making housing more affordable. Glad the sleazy Liberals are gone and now hopefully we’ll eventually have a balanced market.
Toronto condo projects sold since 2016 in danger of collapse, analysis finds
https://www.theglobeandmail.com/real-estate/article-a-list-of-endangered-toronto-condo-projects/
Have been reading on Twitter posts by Alberta politicians of all stripes with warm wishes for the 2019 Vaisakhi Nagar Kiran Sikh Parade in Edmonton.
I have my own warm wishes, but with a very practical reason. BARE WITH ME and it’s all about the:
Parmigiano-Reggiano
I was in Parma’s train station last year, I looked around and a lot of the faces (not the clothing, they dress like us) reminded me of a large segment of the population in Surrey, BC.
I thought, WTF, maybe this is a hotbed travel spot for Surrey’s Sikh population? Who knew?
So, I decided to do some digging and low and behold I came across this article by the BBC:
https://www.bbc.com/news/magazine-33149580
and on YouTube (in Italian, the Sikhs speak very good Italian with virtually no accent – they end by saying that they love it here and you can see it on their happy faces):
https://www.youtube.com/watch?v=hx1MKcLJtpk
Apparently, the Parma area and its climate reminded them of their farm land back in India. And, it was difficult to find skilled Italian workers for the making of Parmigiano-Reggiano cheese.
GRAZIE and indeed, belated BEST WISHES for:
Vaisakhi
From this former Albertan and VERY GRATEFUL Italiano (no pun intended on the “grate”ful). And I expect, Italia vi ringrazia.
#21 Chopping Broccoli
Good for you! Smart one’s do the same as you; mind you; when greed sets in it is all up in the air for those trying to squeeze out that last dollar!
Curious how this is going to affect Victoria. People are saying it will never touch Victoria. LOL.
“We likely could have sold for 80% of assessment but it seemed like too much of a haircut.”
———————————————–
What is it about the BC assessment that makes it the last word in what a property is worth and desirable to be plump as possible? Anywhere I’ve bought, taxes and tax assessments rank up there with multi-month utility bill records, an expense benchmark worth considering in overall ownership costs, but not a sale closer…
What happened to what did you buy for, what did you spend on major improvements/want to recoup costs on, if any, and what could you have sold for?
We sold our house 2.5 years ago and pocketed $1.85 million in Thornhill. We have no debt of any kind. we both retired for good in our mid 50’s.
We live off and reinvest the interest and dividends of $102,468 a year and have made topped up all our TFSA’s $135,000 total worth now in addition to the $1.85 million.
We have no RRSP’s and no high taxable income. We rent for only $2,200 a month house in pretty good shape. We are figuring that in 10 to 11 more years we have more than another $1 million more so close to $3 million by 2029 to 2030, by that time our income will be up by at least 60%+.
A money launderer or mafia don will gladly buy his house as a way to transform dirty money into clean money.
The financial advisors over at TD, RBC, BNS, CIBC and BMO know the right “connections” to get the house sold, but your God of faith will disapprove of it as selling your house to a criminal is a sin.
Good to see that I didn’t waste two years of my life so everyone in Vancouver knew what was going on.
I forgot that only a small percentage of readers bother getting down and dirty in the comments section…
M44BC
@#40 Lost…but not leased
Nice try!
But those condos deals aren’t folding because of a lack of interest.
The greedy builders want to cancel all past sales so they can then re-brand and re-list the projects for sale again but at MUCH HIGHER 2019 prices!
Next time read the article you post : )
Everybody on this blog makes the observation that too many people are vested in real estate appreciation,……… but why are so many people doing that in the first place?
It’s because an average person cannot save money and earn interest on it in a traditional manner.
This then begs the question, why are interest rates so low. Would a truly free market ever bear such low interest rates. Has there ever been a time in the history of the world, when the cost of money has been so absurdly cheap for everyone and particularly for the banking class. The answer is of course no, because until a few hundred years ago there was no such thing as a “Central bank” in the first place.
99% of problems always come back to the government interference in the free market. If a free market existed, interest rates would normalize, people would save money rather than constantly shovel more of their savings into over inflated real assets.
But sheeples will endlessly look to governments to “solve their problems”, never able to understand that the government interference is the problem.
#39 Asterix1 on 05.21.19 at 6:32 pm
The entire real estate market is over valued, but downtown condos are less over valued than suburban homes, particularly the McMansions.
Let’s take an example, if you buy a condo in mid town manhattan near Times Square, that condo will cost you a lot more than a toronto condo.
But if you buy a mansion in Fort Lee, which is reasonable commuting distance from Manhattan, you will observe that a better quality mansion will cost you less than an Oakville McMansion.
In most of the world the downtown core is……. rightly ……..(or wrongly) ……..in inflated in price.
The GTA is unique in that even in a backwater like Milton more than an hours commute from the core houses cost a million bucks. This level of insanity, most of the world (barring perhaps the Australians) does not have.
#37 Ace Goodheart
For your average working stiff used to cash deposited in their bank account every month, earning your money off of investments is a hard shock.
———————————
I was such a person and did exactly that. No shock, no stress and no problem. Of course, there certainly have been some euphoric ups and ugly downs since then, but I have all the capital I started with 10 years ago (after retirement and the liquidation of a residential and a recreational property). The resultant funds have actually grown in spite of monthly withdrawals.
I’m here to say that without a doubt professional money management has been almost entirely responsible for my smooth transition from average working stiff to useless, aging boomer living comfortably with more than adequate funds.
Craig has missed the boat, poor fellow.
Haaaaaaahhaaaaaa ! oh! Stopp!! It’s killing me! Stop!!
He turned down a winning lotto ticket. Does anyone have any idea how long it would take to make $1.5MM after tax free money by working a job? That’s more than half a working career.
The 40 somethings that borrowed an extra million to buy a bigger home in Vancouver a couple years ago just lost a million.
A million is a lot of money in case you weren’t sure. When it sinks in the divorce lawyer gets a call.
That’s when the tragedy turns into a comedy.
I’ve seen it play out a thousand times. If you think they’ll stick it out through the hard times you are dreaming.
This is the generation where it’s all your fault.
Good luck. Family court is a real party.
Well, just when Dilettante Justin thinks he’s out of the woods and doing cartwheels about US steel and aluminum tariffs being removed, along comes this from Norman Spector, a mere 10 hr ago:
https://twitter.com/nspector4/status/1130839757099917312
When it rains.
It pours.
That man cannot win for losing.
Speaking of rain in EU YVR (a.k.a., my domicile here in Italia, Pordenone):
https://i.imgur.com/FU0KAVK.jpg
Gloat away Canada, esp. the “Real YVR”. ‘Been like that for the last 1.5 weeks.
BUT tomorrow onward, the weather forecast revised to “Sunny Days”, +22°C for rest of the week. Finally, heat, sun.
Thank God, since my outdoor Bay, Oregano, Thyme, Tarragon, Sage, Rosemary, Parsley, Basil and Chervil plants starting to give me dirty looks.
Mark Baum would call it a bubble and look for ways of shorting the market just like in the movie “The Big Short”.
People never really learn from history and those who try are dismissed as nut jobs at least for awhile.
I see Australia has dumped its version of the Stress Test as their real estate market goes down the crapper. Will Canada be far behind? (not that it will help Vancouver)
https://www.smh.com.au/business/banking-and-finance/apra-moves-to-scrap-7-percent-mortgage-rate-floor-20190521-p51pht.html
The Infographic from the Vancouver Sun was correct:
Additionally, single detached home prices were down 18% in West Vancouver, comparing between Jan and April 2018 and the same period in 2019 but I suspect that the Cartel wouldn’t let them publish that.
Also, a remarkable thing about Port Moody (single detached down 19%): April was the first month in 2019 that Port Moody registered more than 20 sales to make a statistically significant comparison possible.
Up until then, the trend had been masked by entries that were listed in the stats as N/A.
No surprise though: it must be hard to sell homes in a place with ‘Moody’ in its name, in January and February, when the whole place is socked in.
Chop Chop! What type of work are you doing in Kamloops that you can work 3 days a week and live on it… (If I may ask!) Cheers,
I believe this guy should put his house back on the market.
North Vancouver has been a little bit more resistant towards the correction as has Burnaby.
They are both down but East Van and Richmond have fallen much easier and lower.
West Vancouver and Vancouver Westside are bloodbaths.
The bottom of North Vancouver market is roughly around the million mark and a place that could have gotten 1.5 a short time ago could still possibly get 1.35
It’s still a pile of money.
Craig’s place would have been on the bottom rung a few years ago but now it’s about the third so while not overly spoiled for choice, potential buyers can go elsewhere and save a bunch.
Richmond and East Van by comparison have bottom rungs below the 900k mark.
A detached sold on Vancouver’s Westside the other day below 1.2 , but the true bottom on the Westside is around 1.4
I could go on but my stalker doesn’t want me to sat too much…
M44BC
@#47 Flop
“only a small percentage of readers bother getting down and dirty in the comments section…’
+++++
And like pigs…… we like it!
Heads I Win, tails You Lose?
Huh at 48 said:
The greedy builders want to cancel all past sales so they can then re-brand and re-list the projects for sale again but at MUCH HIGHER 2019 prices!
**********************************
So they want to play the time-honored game of “Heads-I-win-Tails-you-lose? Bring on the lawyers to fight it out. (Lawyers at least are up front, they always win no matter what the outcome)
Re: “That’s why anyone with a such windfall amount would be smart to have some professional help. No, you don’t count on dividends to pay the rent, but rather return of capital distributions, carefully and tax-efficiently harvested by a portfolio manager. – Garth”
True.
But you cannot count on return of capital distributions each and every month. There will be months when you are in the red. And months when your returns are hot and you are making a lot of money.
The way I found it works best, is during good times you build a cash-nest with enough to get you through any tough times. When things are down, you hold onto your portfolio, not having to sell anything because you can just spend the cash out of the nest.
Things will inevitably get good again (they always do), and you fill up the nest with more cash during the good times, so that you are ready for the bad times.
Doing this takes a lot of self control and a lot of will power. It also takes math. You have to be able to calculate how much money you’ll need to get through a hard period, so you aren’t forced into panic selling into a trough in the markets, thereby locking in losses forever.
It’s a different kind of earning experience. I’ve done it for years, while at the same time running my various businesses over the years, which is also a learning experience as businesses, like investments do not produce a steady pay cheque.
Most people who have spent their lives on salaries are really just not prepared for the sort of thought and planning that goes into successfully earning your income from a portfolio.
However, once you get it, and the hard shock of how it works, passes, it is actually quite rewarding to earn your money this way.
I have been “unemployed” and earning all of my income through businesses that I start and run, and portfolio income for 14 years now. I would not trade it for a pay cheque, for any amount of pay. I much prefer earning money this way.
But people need to know, it is not just collecting cash at the end of every month and paying all your bills for free. There is much more involved than that.
Why did the second buyer back out? Did they fail to secure credit as well? “No subjects”, so sounds like they might have even had 20% down, possibly from selling their current place?
Sounds like credit is finally tightening up for good. Bond markets should be interesting in the next few months.
When even a bull like you starts advocating taking a neutral position Mr. G, looks like it might finally be time to batter down the hatches and turn 80/20 liquid for a bit. The over-leveraged are completely screwed of course, but we already knew that.
Will Neobanks come to a Canadian city near you?
https://en.wikipedia.org/wiki/Neobank
not that we’re moving, but you can buy a spectacular chateau in Framce with 10 acres for less than $1.5mm CAD… and the same $$$ buys a nuce house (not a mansion) in Hollywood Hills.
If this doesn’t show how messed up RE is in Toronto and Vancouver, nothing will
Three to four houses for sale on almost every street in our SW Calgary neighborhood. Some of the new build infills sport asking prices of around a million. Good luck with that one. I watched them build them and haven’t seen such crappy worksmanship since watching Mexicans build condos outside Acapulco.
Even at $700k I’ll pass. Maybe at $500k. At least then a guy could have enough left to fix their screwups.
Im sure they’ll sell them to some low info millennials though. These idiots all voted NDP so it’s obvious they can’t do math or deal with reality. Perfect marks! As in a an easy mark for a con.
“The disincentives to buy in the Lower Mainland are now legion. A speculation tax. An empty-houses (or under-utilized) tax. Higher property tax on expensive homes. The foreign buyer tax.”
The good news is that none of these taxes apply to the 99% who work in Vancouver and want a house to LIVE in. And the B20 is nullified by the drop in prices. Win-Win!
#59 Grantmi
Technician/Mechanic
Veggie politics………..
https://www.foxnews.com/politics/ocasio-cortez-growing-cauliflower-colonial
Hmmm is this as easy as it seems? not sure when Craig
bought and what he paid. And he is at that funny age of 50. Too young to retire, too old to start over.
So, the golden rule, according to Momma was “never
speculate with the family house – either way”. Buy
what you can afford and for the right reasons. Move up
or down but always be “in” the market.
In the meantime, build a balanced, liquid, diversified
portfolio.
#66 yorkville renter
SO true.
For that “Under the Tuscan Sun” experience, here are a few more examples to corroborate (not to compete, I love S. France, but to show what $1-1.5 MM buys you in Italia):
Rustic Rural Villa with Chianti vineyards your neighbor, € 800.000, 250 sq.m.
https://www.immobiliare.it/58335021-Vendita-Villa-via-di-Mucciana-San-Casciano-in-Val-di-Pesa.html
Room with a View Villa overlooking Firenze, € 850.000, 330 sq.m.
https://www.immobiliare.it/73298874-Vendita-Villa-via-di-Calcinaia-Lastra-a-Signa.html
And finally, a Rural Hilltop Villa with vineyard overlooking San Gimignano, € 950.000, 430 sq.m.
https://www.immobiliare.it/71804342-Vendita-Villa-via-del-Cimitero-del-Bagnano-Certaldo.html
There are many more, some ultra-modern as well.
Then there is beautiful S. Italia, this from Scilla (of Homer’s Iliad and Odyssey fame), Reggio Calabria, pricey but WHAT a view, check the waters out (swordfish fishery, Blue Flag Beach steps away, not shown but vineyards up the slope from this Villa, I’ve been to Scilla, it’s stunning):
€ 1.200.000, 140 sq.m.
https://www.immobiliare.it/66979127-Vendita-Villa-buono-stato-140-mq-Scilla.html
…and they cream their drawers over Positano on the Amalfi Coast, Scilla an unknown gem to tourists. Up the coast is Tropea (tuna fishery, best onions in Italia) and equally unknown…Google Image that as well and search for Villa’s there in the above Italian RE site.
#66 yorkville renter
Or one can buy a nice little villa or home with a decent backyard for a garden; a climate that supports it, and spend 1/3 on your grocery bill as you would here.
Hey just a few more years for me and I am outta here; it’s a no brainer!
#13 JSS on 05.21.19 at 3:56 pm
Wouldn’t now be the time to buy a nice house in Vancouver?
I really do not think one could be any dumber. Wow!!
#49 HUH? on 05.21.19 at 7:44 pm
@#40 Lost…but not leased
Nice try!
But those condos deals aren’t folding because of a lack of interest.
The greedy builders want to cancel all past sales so they can then re-brand and re-list the projects for sale again but at MUCH HIGHER 2019 prices!
Next time read the article you post : )
===============================
Huh..???
@WTF ???
Developers are in WORSE case scenarios…
The “fine print” in majority of pre-sale contracts gives enormous lee- way for developers..
That said…SHTF in a 2 phase scenario..aka (i)developers bail or
(ii)purchasers bail.
aka developers bail= the long overdue correction and Pre -Sales end…..buy the product finito or park it.
Craig is a coward. This is why cowards are poor
#13 JSS on 05.21.19 at 3:56 pm
Wouldn’t now be the time to buy a nice house in Vancouver?
—————————————————————
Why now?
Sold Kits T Home 6 mo ago for 1 Mill. Added to Half Mill from previous RE sales. My friends ask my wife and I what will you do now ? I love the world of options. More global travel. Boating. Having fun. Freedom !
So now we know why real estate is considered illiquid.
An unwilling Seller and an incapable Buyer.
Paraphrase, ” politics and social media the biggest threat to our future prosperity”. Excellent observation Dude !!
https://business.financialpost.com/news/economy/andrew-scheers-economic-vision-is-right-out-of-1993
Generation X and Z are renamed as “Generation of Dumbass Kids Repeating Crazy Rhetoric” in this piece, I agree. If I hear about the world ending in twelve years from another sea sponge I think I’ll puke. I’ve got hair on my ass that’s witnessed world change over 60 years, seeing this by product of propaganda taking days off school to demonstrate on cue is disheartening. A generation of dupes and lickspittle. Bring back spanking.
#9 JB on 05.21.19 at 3:38 pm
I forgot to mention i bought for 200 in 2014…. But thank you for the words of wisdom because the truth is nobody told me condos were a bad investment they told me the opposite and at the time i was not a blog reader … i have seen the light.. Thanks to everyone in this community :)
Dolce Vita… You are correct about the food, good thing I am a chef with italian roots and nonna taught me the old world recipes. Buonanotte a tutti voi!
#41 Lost…but not leased on 05.21.19 at 6:40 pm
This is a supply problem that will jack condo prices higher
Here is Chraig’s neighbour “Elegant Old Timer” 306 days on the Market and a $325k price drop- still overpriced. I may be able to buy in my childhood neighbourhood afterall one day.
http://bcres.paragonrels.com/CollabLink/?id=0b4b5ca7-32b2-4a25-9ff7-1909be0d6bcf
#12 jim on 05.21.19 at 3:55 pm
Poloz sees higher interest rates on the horizon once economy exits current soft patch
He can’t see his balls due to that tummy/not that he has any.
Come again: soft patch with interest rates close to zero?
Rate increase in Canada is not possible in any shape or form for quite a while.
Clarity on the true nature of our ‘money’ – coupons issued by banks or banks controlled bodies/BoC at will, backed by no deposits, with risk outsourced to taxpayers, the interest on which does not exist with the sole purpose of making somehow the inept sheeple bust its behind and produce more for the rich.
How does that sound to you: BoC bureaucrats are de jure in charge of the money and economy, de facto their sole purpose is to provide for profits of the banks.
Of course the stupid sheeple is doomed, IMF is just stating the obvious.
My friend who is a bank CEO says BC real estate prices are crashing more than what is being revealed to the public.
Luxury House down the street in Anmore has been vacant for the last 3 years. Overgrown lawn. Saw the Asian owners maybe once a year. Home up for sale now. Empty home tax working?
Simple physics:
The higher you climb, the lower you fall.
reversion to the mean.
You can’t beat the house in the long run.
What goes up must come down.
Smoking Mans Herdonomics Report 1
Wow, The markets are going to go wild over the next few months. Markets love Trump.
So now that the nose it tightening up against the deep state, the democrat house will be shifting into full-on impeachment mode. Nancy has just bought in. WHY?
She knows it will be toilet paper once it hits the senate floor.
They know arrests are coming for rogue elements CIA, FBI, MI6 even Mueller might be going down. It’s a distraction, a gift to fake news.
Buy the dips huge when Demoncrats seem to be winning this battle. Once arrest warrants are out for the rogue cops. The markets will go into orbit.
Trump has a new social media app, it’s called Telegram, you can see things there that are not tweeted. I’m betting he brooms twitter once his base goes over too it. It’s going to be #byetwitter. #cryingJack
His support is through the roof, all this crap about Joe Biden beating him is about as reliable as the Candian Jobs report.
Fred Keller republican has just won Pennsylvania congressional contest, took 70% of the vote in a landslide victory. Trump endorsed him.
Australians boot out the globalists, in a stunning surprise victory, Canada will do the same in spite of T2 bringing in full on social media censoring.
If you want to know what’s in store for the deep state.
Watch the clips below
Stunning!!!!!!!!!!!!!!
Part 1
https://www.youtube.com/watch?v=ggNWpNZJjNg
Part 2
https://www.youtube.com/watch?v=sl40tJBfZN4
Dr. Smoking Man
Ph.D. Herdonomics.
#49 HUH? on 05.21.19 at 7:44 pm
@#40 Lost…but not leased
Nice try!
But those condos deals aren’t folding because of a lack of interest.
The greedy builders want to cancel all past sales so they can then re-brand and re-list the projects for sale again but at MUCH HIGHER 2019 prices!
Next time read the article you post : )
==================================
_uh….yeah
…err..ummm.
(aka OMG……..!!!!!)
#90 Evangeline on 05.21.19 at 4:06 pm
#86
Ronaldo, the Biden voters will be really voting for Obama’s third term. Biden’s boss now lives not far from the White House.
—————————————————————–
Evangeline, compare this to the video of Trump’s rally in Pennsylvania last night and you can see why Biden doesn’t have a hope in H of winning in 2020. Pathetic performance and apparently he was speaking to about 150 people. Same reason Hillary didn’t have a chance.
https://www.youtube.com/watch?v=u-AEAq7jzcU
Why is the choice either to sell, or stay and renovate? It’s always possible to stay and not renovate. We’re a very adaptable species.
” #42 Dolce Vita on 05.21.19 at 6:53 pm”
Yes I’ve read about these Italian Sikhs and their successful integration into the local culture and economy there… certain segments of immigrants seem to do well wherever they go… it’s too bad and probably too late for many European countries who unfortunately brought in the wrong immigrants….
The reality is, given time and patience these sellers are likely going to give up ‘some’ of the massive equity they have gained in a very very short time from really doing absolutely nothing. The overreactions both ways are real signs of our current ‘outrage culture’.
The NDP are doing what was necessary so that the city can function and include those who are not speculators or money launderers in its future. Some will lose, others will gain, It was the same on the way up, except those who lost only got ridicule.
No tears shed for the huge numbers of gainfully employed professionals who have had to leave the city due to extreme housing costs.
Re: Not 1st #54
I want your calculator. You say it takes half a working lifetime to sock away a million and a half after tax? That ain’t working. To sock away that much you have to have been making north of $400,000 p/a and spending nothing .
The average person making $150,000 has disposable income of less than $30,000 (maybe that’s generous) after average hard taxes and soft costs. That’s 50 years of being very frugal by my napkin calculation. Less than .075% of Canadians have a net worth, exclusive of real estate.
Like I say, I want to save like you, teach me.
Catherine Mckenna, ak climate barbie.
I like her in spite of her insanity. Her posts on Twitter are becoming a hestaracly bazaar.
Action!!! Activism!!!. All trigger words for the newly schooled. Trained by far left teachers who were taught by far left teachers so on and so forth. 30 years worth, each new teacher more crazy than the one that taught em,
The educational-industrial complex has manufactured a generation of children that would have no chance of defeating a zombie apocalypse.
The kids are not alright.
Life is all about offense, the better you at offending back the better off you you will be. Natural selection if you will.
These newly schooled low IQ teachers have no concept of risk. Risk taking is how you get rich. Safe spaces ensure life long misery and depression.
Wealth is generated from creativity, not theft
Climate Barbies only fans are mind fk children, and she will lose them on the first paycheck stub.
The entitled generation will freak out when they see how much these jet setters, carbon burning flyers with there 300k bar tab on T2 flights take away from them.
T2 is history.
1.5 million at a 3% return and a 3% dividend yield growing at 6% per annum and a DRIP will give you a 2.5 million with 90k in dividends after 10 years. That’s a below average return with additional savings of zero.
Retirement looks pretty decent. Buy a house in a small town. Or you could get a townhouse with a 200k downpayment. Use the dividends to pay off your mortgage and save the rest of your income. Lots of options. The windfall from the house makes a lot of sense.
Yes this is the last week to buy a house like forever…
O__o
Garth when the housing bubble dust settles can your blog start covering the gas bubble prices??
Long reign Turdeaux
The disincentives to buy in the Lower Mainland are now legion. A speculation tax. An empty-houses (or under-utilized) tax. Higher property tax on expensive homes. The foreign buyer tax.
—————————————-
But 95% of buyers would be unaffected by any of those.
However it seems 100% of buyers are affected by market sentiment. So when people believe demand is high, they pile in. When they perceive demand is gone, they back off in fear. Time you learned something about human nature. It moves markets, and government policy is a huge influencer of it. – Garth
i know lots of people who cant get a mortgage, they rent and they have either 4 or 10 or even 20% down but cant get a mortgage.
any rate, any situation, so i find it strange that people talk these low mortgage rates, investment returns etc.
millions of canadians about 30% or so, who dont own, would like to own, they pay the rent every month and other expenses but their ratios are too high of what the banks want, or their record is spotty, or something from the past.
idk Canada is a socialist place, from cradle to grave, when your born the governemnt gives your mom a cheque every month, that is now actually pretty good.
and you waste your time in this shithole of a country where your credentials never get recognized, my friend has two degrees from india, and of course you can find him in the electronics department at walmart in Guelph.
idk how they would ever afford to buy a house in Guelph, on $15 hour. why would you even try.
and as you waste your life here, in the end you become old and sick and the millionaire who brain went to mush like yours is in the home eating the same chicken and massed potatoes.
he had savings so he paids more, you have little and pay what you can afford.
in the usa, you have access to capital, loans etc, to buy business make real us dollars. pay less taxes, and can save because stuff doesnt cost as much in general.
and if you dont get sick you can win at 65. in Canada, if you rent at 65 or own your place, it doesnt really matter. you get your coffee at tim hortons talking crap with the other old guys. who have nothing to do
@#60 Grantmi
“What type of work are you doing in Kamloops that you can work 3 days a week and live on it…”
*****
Doctor.
Dentist.
Teacher….
@#87 47% drop in prices province wide by 2021
Still not low enough for most potential buyers.
A 60% crash in YVR would be more affordable to the vultures pecking at the real estate carcass…
I’m sure there’s tons of spec’ers and their mortgage holders crapping their pantaloons right now.
credentials never get recognized, my friend has two degrees from india, and of course you can find him in the electronics department at walmart in Guelph.
idk how they would ever afford to buy a house in Guelph, on $15 hour. why would you even try.
and as you waste your life here, in the end you become old and sick and the millionaire who brain went to mush like yours is in the home eating the same chicken and massed potatoes.
he had savings so he paids more, you have little and pay what you can afford.
__________
deep man real deep but true. Seen this 1st hand when my Pops was in a nursing home with Dementia… rich and poor alike batshit crazy locked up in a ward waiting on pneumonia to set them free..
Here’s the real reason they doubled down. “My wife really wanted to retain a home and a rental wasn’t going to do it.”
#95 Fred Murtz on 05.22.19 at 1:44 am
Re: Not 1st #54
I want your calculator. You say it takes half a working lifetime to sock away a million and a half after tax? That ain’t working. To sock away that much you have to have been making north of $400,000 p/a and spending nothing .
The average person making $150,000 has disposable income of less than $30,000 (maybe that’s generous) after average hard taxes and soft costs. That’s 50 years of being very frugal by my napkin calculation. Less than .075% of Canadians have a net worth, exclusive of real estate.
Like I say, I want to save like you, teach me.
—————————————————————-
Perhaps stop trying to solve this on a napkin, and use a calculator.
Or at least learn the equations involved if you want to do the calculations.
To get to 1.5mm, you need an 8% return for 25 years investing 20k per year. Or 14k per year for 30 years.
@ #10
Most people have no clue about the value of money – even many with tons of it.
It’s not always a numerical thing.
Money is a universal key that opens doors to life’s experiences……or whatever toy blows your hair back.
Money is ability.
Canucks are like groundhogs. Content in their little, often pressed corn flake hovels while the rest of life goes on in brilliant colour inches above them.
Give me liquid any day.
#100 crossbordershopper on 05.22.19 at 7:02 am
——————————————-
Wow, that sums things up,
When debt knocks on the door, love flies out the window.
@ #12
I hope you’re right – raising rates is the only way out of this global mess.
The world’s debt load does not make for a healthy real economy, which is the nexus for consumer confidence or……..widespread fear about the future.
The viable tax-paying units are worried.
Many businesses continue to shrink and/or shutter up, whilst much (and increasing) grass roots activity is either debt-fueled or super-bargain (read second-hand) oriented. Either way, both do not contribute much to the real economy.
When you see luxury cars at the charity shop on a regular basis, you know that this fear has spread across society at large.
#22 Robert Ash
Some Canadians, are so Tax Brainwashed, they chastise other Canadians, for not having a sales tax… It is Orwell, all over in the new millennium…
I am older, and a little surprised at the New Hires that believe Politicians, like Trudeau, will make their lives so much better… at least that is the trend today…
What is this country coming to… Common sense seems to be gone for good..
——————————————————————–
Well, I’m extremely pleased to see that at least some other people out there get what’s really going on.
All politicians are useless phoney posers and liars that TAKE OUR MONEY and never give anything of value back to the people.
Unfortunately, many others, like our fellow blog dog MF, think that we’re just complainypants that should start our own political party if we don’t like being taxed to death and ruled by incompetent morons.
Glad not everyone is that naive.
From the REITa MacNeil dept.
Seniors Reits under attack in new ad campaign.
Squeeze those oldsters for our fat returns?
https://tellthemtocare.ca/
Of course a Kanadian Oligopoly with four REITs – the lion’s share.
Quacktavist Shareholders crowing or?
@#81 Great Gordonski, nice rant. Regarding the article you linked to, I found this passage rather puzzling:
An economy dominated by Alphabet Inc. and generation Z demands different policies than one structured around companies such as General Electric Co. and the Baby Boom. Canada’s political class developed a multi-partisan consensus to fit the later, but is making no attempt to reset the baseline for the former.
The author seems somewhat bothered by the fact that there is no new “consensus” to replace the old centrist Liberal-Red Tory axis that governed Canada from the post-war era until the early 1980s. I expect such silly sentiment from aging Red Tories like Ustabe, but I wonder why an otherwise reasonably intelligent commentator like Carmichael would assume such a “multi-partisan consensus” is even remotely desirable.
Canada “enjoyed” a quarter century of relative stagnation from 1970 to 1995, brought about largely due to the “multi-partisan consensus” that governed Canada from the 1950s through to the mid-1980s. In 1970, Canada was roughly tied with Sweden for the second-highest GDP per capita in the world, after the US. By 1980 we were in tenth place, with little improvement until the very late 90s. That “multi-partisan consensus” did NOTHING for this country, and in fact cost us more than one lost decade.
I do not believe Andrew Scheer has all the answers, and quite possibly he has none of the answers. But wistfully yearning for the muddled, obsessively centrist and inoffensive “multi-partisan consensus” governing of the 1950s, 60s, 70s and early 80s is a recipe for another quarter century of stagnation.
While the economy did not improve until well after they were out of office, I give credit to Mulroney and Michael Wilson for the free trade agreements, the GST, and the appointment of John Crow as BoC governor, all of which combined to finally shake us out of our multi-decade drift into mediocrity. Those policies were extremely controversial, but absolutely right, and a perfect example of how, if a government wants to actually achieve something, it must be willing to suffer unpopularity and court electoral disaster.
There was nothing centrist or “multi-partisan” or “consensus-building” about those policies. Free trade, the GST, and hard inflation targeting might seem run of the mill today, but they remain the three most polarizing, viciously partisan policy debates I’ve seen in this country in my 50 years.
The future, if we are to have a good one, rests with bold leaders who are selfless and visionary enough that they are willing to push through extremely polarizing and unpopular reforms for the good of the country. Leaders who are willing to temporarily make things worse so that they might someday get better. High minded concepts like consensus-building and centrism and multi-partisanship sound nice and comforting to the idealistic, to the timid, to the pathologically inoffensive, but they also guarantee inertia, mediocrity and stagnation. Nothing good comes without sacrifice.
#95 Fred Murtz on 05.22.19 at 1:44 am
I want your calculator. You say it takes half a working lifetime to sock away a million and a half after tax?
____
I want that calculator after you’re done with it! I think the typical Canadian couple would never do 1.5 even in 40 years.
Big incomes (two of them), and a very early 20’s start would be required at the kind of rates you should expect going forward.
If said couple lives in Toronto and wants a house too – well, it’ll be one or the other. You’ll need two 1%’er incomes to have both.
I know a young mid 20’s couple fresh out of school. One is a nurse, the other works in IT for a bank. They live in Toronto and rent. They’ve got a few years to go before the school debt is gone. They make about 140K.
Sad to say for this couple, even packing double the median household income in Toronto, the savings rate required (starting at say 30 years old) to build 1.5 mil would preclude buying a typical GTA SFD. After the mortgage and ownership costs, plus 1.8-2K /month investing, they wouldn’t have a grand left over for living their lives.
RE has sucked all the gravy out of Toronto, whatever extra you might earn out there is gone and then some the minute you buy a house.
Time to change your slogan, Garth.
The Greater Fool
“Come for the financial advice, stay for the Schadenfreude.”
#66 crowdedelevatorfartz on 05.21.19 at 8:29 pm
Will Neobanks come to a Canadian city near you?
https://en.wikipedia.org/wiki/Neobank
====================================
You can only hope. I use Revolut and while it has its limits on certain things, it absolutely blows traditional banks out of the water for 95% of the average person’s banking needs.
I have no doubt the Canadian banking cartel is fighting tooth and nail to avoid having to compete with companies like this. And they should be afraid.
#112 Alistair McLaughlin
The future, if we are to have a good one, rests with bold leaders who are selfless and visionary enough that they are willing to push through extremely polarizing and unpopular reforms for the good of the country.
———————————-
Then clearly, we are utterly screwed.
#89 Smoking Man on 05.21.19 at 11:46 pm
Smoking Mans Herdonomics Report 1
Part 1
https://www.youtube.com/watch?v=ggNWpNZJjNg
Part 2
https://www.youtube.com/watch?v=sl40tJBfZN4
——————————
Wow. Regardless of what you think of Trump, everyone should watch the interview.
13 IHCTD9 on 05.22.19 at 10:25 am
#95 Fred Murtz on 05.22.19 at 1:44 am
I want your calculator. You say it takes half a working lifetime to sock away a million and a half after tax?
____
I want that calculator after you’re done with it! I think the typical Canadian couple would never do 1.5 even in 40 years
_________
from my quora feed.. too may holes in the damn to plug.. this dirty $$$ thing will assure a 50% drop.. million dollar builds in Milton/Angus On?
How do people afford to live in Toronto?
Charles Cousins
Charles Cousins, lives in Toronto, ON
Answered Jan 5
Even if you make really decent money here, you can’t pretend as though you aren’t living paycheck to paycheck.
In Toronto, it’s still really common for people making 6 figures to be living paycheck to paycheck.
Let’s break it down.
$100k/year net of tax is about $6000/month of real money.
I’m going to pick a really specific example, (which is close to my personal situation.)
I live at Yonge and Sheppard, it’s north of downtown but still one of the most desirable locations that isn’t “downtown”. (Good luck living in a really nice and central location downtown on a measly $100k.)
For a decent apartment here, (one that isn’t in a basement, nor with roommates, nor with cockroaches everywhere,) you’re looking at $2k/month, not including hydro, cable, internet, or typically laundry. So in terms of just your overhead related to housing, you’re looking at roughly $2.5k/month.
I personally take the TTC as I work really close by and don’t go out of town often enough to need a car. There’s another $150/month. Running tally is $2650/month.
I work hard, sometimes long hours, and I run a few businesses on the side. I’m not putting in 40 hours/week, I put in more like 65 or 70. This is not even that much. A lot of the top finance people, or the mgmt consultants, or the corporate execs, or the auditors, they’re working at least that much at just their jobs. So I’m not big on cooking. I keep things pretty cheap though, as I don’t drink coffee and don’t buy garbage for breakfast. I’d say I spend about 20–25 a day on food. Lets call it $650/month. Running tally is $3300.
Interestingly enough $3300 a month is more than the median net income for Canadians, so the life I lead right now wouldn’t be attainable for most average level earners.
But I hear the silence of all of the other finance people in the background. Yeah, that’s right, I hear their silence. Because it speaks volume.
It’s isn’t making a statement though, the silence is asking a question.
The question is this: “Where’s the booze?”
So now I have to include bar trips, booze I pick up for myself, basically all social and intoxicant spending that occurs outside of what has already been listed. I won’t lie, it probably runs me $30/day or so. This might sound like a lot, but I’d love for someone to try going out for 2 pints and not dropping near $30 bucks.
$900/month on substance abuse brings the running tally to $4200/month.
So the above example is that we have a hard working person making decent, (albeit not great,) money, living relatively conservatively while still indulging in what they want. They don’t own their home, they don’t own a car, and they end up saving roughly $1500–1800/month.
This really isn’t a lot of money to try to build a retirement with.
So the real answer is how do people afford to live in Toronto? Most barely do afford it. And those of us that can have barely got out heads above water. Earning a decent income in this city doesn’t mean you wouldn’t be screwed, or possibly find yourself begging for a spot in your parents basement if you got laid off. I know if my job went tits up and I spent 6 months unemployed, I’d have to be liquidating things I don’t really want to touch for 30 years.
We afford Toronto by accepting the risks. We accept the risks because for many of us in banking, consulting, finance, public accounting, real estate, insurance, recruiting, or at the executive level, the VAST majority of jobs are here.
So we are too.
#67 yorkville renter on 05.21.19 at 8:30 pm
not that we’re moving, but you can buy a spectacular chateau in Framce with 10 acres for less than $1.5mm CAD… and the same $$$ buys a nuce house (not a mansion) in Hollywood Hills.
If this doesn’t show how messed up RE is in Toronto and Vancouver, nothing will.
____
That’s a good illustration. I see the 1+ Million condos for sale in Picton and just shake my head. I don’t know what kind of people would pay that much for these things, but they must be drinking deeply of someone’s Kool-Aid…
Time for the Canadian big bank earnings dumps (CIBC was the first to go, the others will be next).
Expect no growth, on par or slightly below expectations results, and forecasts for limited to no growth in the near term.
For those of you unfamiliar with how bank stocks work, this is a buying opportunity.
#101 crowdedelevatorfartz on 05.22.19 at 8:10 am
@#60 Grantmi
“What type of work are you doing in Kamloops that you can work 3 days a week and live on it…”
*****
Doctor.
Dentist.
Teacher….
—-
Open for everyone to chose it.
#82 PHMIKE on 05.21.19 at 10:50 pm
#9 JB on 05.21.19 at 3:38 pm
I forgot to mention i bought for 200 in 2014…. But thank you for the words of wisdom because the truth is nobody told me condos were a bad investment they told me the opposite and at the time i was not a blog reader … i have seen the light.. Thanks to everyone in this community :)
Dolce Vita… You are correct about the food, good thing I am a chef with italian roots and nonna taught me the old world recipes. !
…………………………………………………………….
Buongiorno signore
Quite a lot of people have fallen for the condo deals. The market is collapsing on condo construction as people are longer willing to pay outrageous amounts for a sky box with no return. Builders are now nervous and purchasers are looking elsewhere to live. Hefty condo fees are also a non-starter that most don’t factor into the equation. At least I can turn on my heat and AC when I want as well lmao.
https://www.theglobeandmail.com/real-estate/article-a-list-of-endangered-toronto-condo-projects/
#83 Leo Trollstoy on 05.21.19 at 11:14 pm
#41 Lost…but not leased on 05.21.19 at 6:40 pm
This is a supply problem that will jack condo prices higher
================================
Huh ?
How does an oversupply of condos result in higher prices ?
Neil MacDonald routinely writes stuff I like, and also stuff I hate – but I have come to respect the guy. He’s got this carbon tax and Climate change situation all figured out IMHO.
https://www.cbc.ca/news/opinion/carbon-tax-debate-1.5143916
Cliffs: Scientists say it’s too late to turn things around, even if we all went zero carbon tomorrow. Over a thousand new coal fired plants are in the works worldwide, and the biggest economies in the world have clearly stated “no deal” to carbon taxes, and Climate initiatives in general.
Canada’s carbon tax is small, does not go towards Climate initiatives either, and will do SFA towards lowering C02 outputs.
In short: No one is doing anything effective, it’s too late anyway; better move to higher ground.
What I wonder is, why didn’t they sell 3 years ago when the market was going crazy with bidding wars?
CMHC says debt levels at highest level ever recorded in Canadian history:
https://ca.finance.yahoo.com/news/cmhc-says-canadians-debt-levels-144535456.html
Ok! First 2 i can see! Teacher! lol… I call BS on that one.
#112 Alistair McLaughlin on 05.22.19 at 10:15 am
… I expect such silly sentiment from aging Red Tories like Ustabe, but I wonder why an otherwise reasonably intelligent commentator like Carmichael would assume such a “multi-partisan consensus” is even remotely desirable….
++++++++++++++++++++++++++++++++++
Carmichael does write “intelligently”, but he is also a complete Liberal partisan. He can’t write an article without praising Trudeau and putting blame on Harper, and be disparaging of Scheer. Once you understand this, you get why he writes what he does.
#53 Grantmi on 05.21.19 at 8:03 pm
#13 JSS on 05.21.19 at 3:56 pm
Wouldn’t now be the time to buy a nice house in Vancouver?
Haaaaaaahhaaaaaa ! oh! Stopp!! It’s killing me! Stop!!
————————————————————–
Why is this such a crazy opinion. If homes are getting crushed and no one is buying, there are going to be opportunties to buy. And money, if you qualify, is still incredibly cheap. So falling prices, desperate sellers and cheap money = lol lol lol don’t buy lol?
Let me guess, you are still waiting for the corrections of 2008 and 2014 to hit bottom right? The folks waiting for an obvious bottom, will always miss the bottom. Same way Craig missed the top.
FWIW I wouldn’t encourage anyone to buy right now, but I’m not sure it’s a terrible time, particularly at the top end. It’s definitely a reasonable discussion to have.
#125 NotLegalAdvice on 05.22.19 at 1:16 pm
CMHC says debt levels at highest level ever recorded in Canadian history:
https://ca.finance.yahoo.com/news/cmhc-says-canadians-debt-levels-144535456.html
++++++++++++++++++++++++++++++++++++
Not to worry – it will all be fine – because “Canada”…
“The International Monetary Fund is warning that Canada should not relax housing regulations, saying that the country’s real estate market still needs to cool down amid high consumer debt levels.
The organization’s report Tuesday comes as Vancouver and Toronto’s real estate boards have been calling on the federal government to ease its B-20 mortgage guideline that was introduced at the start of 2018. The rule imposed new stress tests for uninsured mortgages, in which borrowers make a down payment of at least 20 per cent on a home purchase.
“Several rounds of macroprudential measures, provincial and municipal tax measures, and tighter monetary policy have contributed to a reduction in housing-related financial stability risks,” the IMF said in a statement following an official mission to Canada.
“The government is under pressure to ease macroprudential policy or introduce new initiatives that buttress housing activity. This would be ill-advised, as household debt remains high and a gradual slowdown in the housing market is desirable to reduce vulnerabilities.”
https://www.bnnbloomberg.ca/imf-warns-easing-canada-s-housing-rules-would-be-ill-advised-1.1261848
///////
There you go. A stern warning from the IMF even.
tcc
Matty Matty Matty!
This is just the beginning!
You’re right! You can never catch the bottom.. but this decline is only the start.. this could be a 2 year unwind.. or longer.
2008.. 2014…. possible! Who knows! Maybe worst! I still remember the Toronto 1989- 1990 unwind. Took 7 years to bottom.. and you lost 30%! and… Took another 13 years to recover to those 1990 price levels.
I’m keeping my powder dry!
#131 Grantmi on 05.22.19 at 1:49 pm
#128 Mattl on 05.22.19 at 1:35 pm
#53 Grantmi on 05.21.19 at 8:03 pm
#13 JSS on 05.21.19 at 3:56 pm
Wouldn’t now be the time to buy a nice house in Vancouver?
Haaaaaaahhaaaaaa ! oh! Stopp!! It’s killing me! Stop!!
————————————————————–
Why is this such a crazy opinion. If homes are getting crushed and no one is buying, there are going to be opportunties to buy. And money, if you qualify, is still incredibly cheap. So falling prices, desperate sellers and cheap money = lol lol lol don’t buy lol?
Let me guess, you are still waiting for the corrections of 2008 and 2014 to hit bottom right? The folks waiting for an obvious bottom, will always miss the bottom. Same way Craig missed the top.
FWIW I wouldn’t encourage anyone to buy right now, but I’m not sure it’s a terrible time, particularly at the top end. It’s definitely a reasonable discussion to have.
Matty Matty Matty!
This is just the beginning!
You’re right! You can never catch the bottom.. but this decline is only the start.. this could be a 2 year unwind.. or longer.
2008.. 2014…. possible! Who knows! Maybe worst! I still remember the Toronto 1989- 1990 unwind. Took 7 years to bottom.. and you lost 30%! and… Took another 13 years to recover to those 1990 price levels.
I’m keeping my powder dry!
………………………….
So who do you believe? I just watch my neighbours for sale signs and then google the sale price. It looks like houses are going uppa.
https://www.msn.com/en-ca/money/real-estate/canadian-house-price-forecast-what-the-next-5-years-will-look-like-in-33-cities/ar-AABHcgm?li=AAggNb9
Plastic recycling breakthrough.
https://www.foxnews.com/science/holy-grail-recyclable-plastics
—
Here, Smokey.
https://nypost.com/2019/05/22/the-pentagon-finally-admits-it-investigates-ufos/
#112 Alistair McLaughlin on 05.22.19 at 10:15 am
Leaders who are willing to temporarily make things worse so that they might someday get better.
————————————————————————————
Like the way that we ***should*** all run our own lives?
The problem is that this seems no longer necessary to a vast number of people who have decided, nay, dictated, that Government is responsible for all their ailments and are the path to riches.
#123 IHCTD9 on 05.22.19 at 1:02 pm
Stay away from the MSM.
The white cliffs of Dover are made of their calcium carbonate skeletons. The amount of CO2 in the atmosphere was reduced by about 90% during the last 150 million years. If this trend continues CO2 will inevitably fall to levels that threaten the survival of plants, which require a minimum of 150 ppm to survive.
See below per: https://co2coalition.org/co2-fundamentals/
Carbon dioxide (CO2) is a natural and beneficial constituent of the atmosphere. By volume percentage, 99% of dry air is nitrogen (78%) and oxygen (21%). Most of the rest is argon (0.93%), with carbon dioxide amounting to only 0.04%, but slowly increasing. Even smaller amounts of other gases, neon, helium, methane, etc., make up the remainder.
Atmospheric CO2 is essential to life on earth since plants use sunlight to combine CO2 molecules from the air with H2O molecules to make carbohydrates (for example, sugar) and other organic compounds. In the process, oxygen molecules (O2) are released to the atmosphere. At CO2 levels less than 150 ppm (parts per million), most plants stop growing. Over most of the history of multicellular life on earth, CO2 levels have been three or four times higher than present levels. Current CO2 levels of 400 ppm are still much less than optimum for most plant growth.
Air also contains water vapor (H2O), from as much as 7% in the humid tropics to less than 1% on a cold winter day. Human exhaled breath typically contains 4% to 5% CO2 and about 6% H2O.Water vapor,
Water vapor, clouds, and carbon dioxide hinder the escape of thermal radiation to space and allow the earth’s surface to be warm enough for life. Without this “greenhouse warming,” most of the oceans would be frozen. Increasing levels of the greenhouse gas CO2 from fuel combustion will slightly increase the surface temperature of the earth. Observations indicate that every doubling of the CO2 concentration will increase the earth’s surface temperature by 1 to 2 C, and perhaps less. The warming is so small that the resulting longer growing seasons and increased plant productivity from additional CO2 will of great benefit to life on earth.
@#126 Grantmi
“Teacher! lol… I call BS on that one.
++++
I factored in 2 months off in Summer,
8 Pro D Days, 2 weeks for Christmas break and 2 weeks for Spring break. for a total of about 3.5 months off out of 12 months.
That would approximate a 3 day work week over 12 months.
Your tax dollars at work.
@#120 Ubul
“Open for everyone to chose it.”
*****
English Teacher I presume.
#129 PastThePeak on 05.22.19 at 1:37 pm
#125 NotLegalAdvice on 05.22.19 at 1:16 pm
CMHC says debt levels at highest level ever recorded in Canadian history:
https://ca.finance.yahoo.com/news/cmhc-says-canadians-debt-levels-144535456.html
++++++++++++++++++++++++++++++++++++
Not to worry – it will all be fine – because “Canada”…
With mortgage debt at a peak and the need to ‘insure’ increasingly and aggressively ultra sub-primes through CMHC as otherwise the whole Ponzi scheme will collapse, now the ‘rich’ sheeple has to borrow in order to survive on GMO cheapo food.
It is called ‘G7 standard’ of living folks, enjoy and don;t forget to invest in lubricant companies.
Neat coin bank
https://imgur.com/gallery/P7fBO8x
#115 BillyBob on 05.22.19 at 10:59 am
#66 crowdedelevatorfartz on 05.21.19 at 8:29 pm
Will Neobanks come to a Canadian city near you?
https://en.wikipedia.org/wiki/Neobank
====================================
You can only hope. I use Revolut and while it has its limits on certain things, it absolutely blows traditional banks out of the water for 95% of the average person’s banking needs.
I have no doubt the Canadian banking cartel is fighting tooth and nail to avoid having to compete with companies like this. And they should be afraid.
=============
They won’t compete. They’ll absorb them into the collective like the Borg.
CIBC. Resistance is futile.
#124 Doug in London on 05.22.19 at 1:04 pm
What I wonder is, why didn’t they sell 3 years ago when the market was going crazy with bidding wars?
======================
WHEN is the time to sell?
I was Executor for my Dad’s estate….he passed away in Aug 2015.
He had a SFH…and I had noticed the prices in the neighbourhood were rising.
In April 2017 they had risen by 70%….by early Fall 2017 they had doubled.
I figured that was a nice appreciation, do NOT get greedy(and I have been reading Garth’s blog for years)…so we SOLD it.
Now…the prices are down 25% from peak.
Mind you, via it being an estate situation,..we were motivated sellers, as opposed to it being a PR.
#135 Eaglebay on 05.22.19 at 2:50 pm
#123 IHCTD9 on 05.22.19 at 1:02 pm
Stay away from the MSM.
====================
Yes..Exactly
What are they teaching in schools these days?
Plants are a CARBON based life form.
WHERE do they get carbon from..duhhhh
https://askabiologist.asu.edu/recipe-plant-growth
QUOTE:
So if you are creating a cookbook of life and want to include a recipe for plant growth you would add the following.
water tree
Some plants are as much as 95% water. Click for more.
Water, which can make up to 95% of the weight of a plant, enters the plant through its roots.
Carbon, which makes up the most of the rest of the plant, comes from the air and enters the plant through holes in its leaves.
Oxygen from carbon dioxide, and hydrogen from water, enter through the leaves and roots, and are used to make glucose.
Energy, which the plant needs for photosynthesis to work, is absorbed from sunlight.
We are actually in a CO2 deficit
Interview with Professor William Happer
https://www.youtube.com/watch?v=zcsSn7ehZ1g&t=2s
#16 Damifino on 05.22.19 at 11:21 am
#112 Alistair McLaughlin
The future, if we are to have a good one, rests with bold leaders who are selfless and visionary enough that they are willing to push through extremely polarizing and unpopular reforms for the good of the country.
———————————-
Then clearly, we are utterly screwed
I don’t know about utterly but, yes, totally agree. There isn’t a political leader in my town, Province or country that intrigues or attracts me.
~~~~~~~~~~~~~~~~~~~~
Alistair, you don’t need to call me silly to make a point, remember I’m old enough to be your father. I was boots on the ground when the Progressive Conservative party was sacrificed to the machinations of the Reform turned Alliance party. The tempering thoughts and wisdom of those who were there should at least be taken into account, not outright dismissed. Especially not needed would be a soft pejorative like “silly”. Ageism has zero place, period, and that is a hill I’m prepared to die on.
A society that doesn’t or won’t listen to the experiences and wisdom of its elders probably isn’t one you’d really want to live in. A person who exhibits the same deficiencies is probably one you wouldn’t want to associate with.
@#115 BillyBob
“I use Revolut and while it has its limits on certain things, it absolutely blows traditional banks out of the water for 95% of the average person’s banking needs.
I have no doubt the Canadian banking cartel is fighting tooth and nail to avoid having to compete with companies like this. And they should be afraid.”
*****
Yeah.
I was reading about neobanks in the Economist and I’m pretty sure the Canadian Banks are pumping millions into election war chests to delay the inevitable.
That being said.
I’m sure “bricks and mortar” banks are going to be obsolete in the small towns and cities of Canada in the next 25 years as cash disappears, the boomers die off and millennials embrace the new tech.
Or Amazon and Google use their Billions to challenge the status quo
The Nature of Money and the Blind Leading the Blind
Stan Brooks posted at 85:
Clarity on the true nature of our ‘money’ – coupons issued by banks or banks controlled bodies/BoC at will, backed by no deposits, with risk outsourced to taxpayers, the interest on which does not exist with the sole purpose of making somehow the inept sheeple bust its behind and produce more for the rich.
*********************
Always a contentious topic.
Stan contends that money is coupons not backed by deposits. Well, the “coupons” that banks provide ARE the deposits that function as money as we all transfer our deposits to pay for things (write a cheque, use a debit card, interac transfer, electronic transfer). Maybe he meant not backed by cash in the vault? True a bank’s deposits are backed by its loan assets mostly and by its owner’s equity and other forms of capital. Also by its liquidity including a bit of cash on hand and more on deposit at the central bank.
True there is government backing in the form of deposit insurance and also CMHC. Both of those however have been to date entirely self-funded and cost the tax payers nothing.
The notion that the interest that banks charge on loans is somehow not legitimate is laughable given that there is actually a lot of competition and given record low interest rates. I mean open your own bank if it is so easy. Or for goodness sakes at least buy bank shares.
In Canada, the banking system is a key and highly successful pillar of the economy that benefits the economy and almost all bank customers. Some bank customers get into debt over their heads. Not the banks fault anymore than it is McDonald’s fault that people over eat.
How old is Stan? What apparently derailed his career? What apparently prevented him from becoming rich or at least wealthier than average?
#137 crowdedelevatorfartz
@#120 Ubul
“Open for everyone to chose it.”
*****
English Teacher I presume.
—
Not even close. Not that it would affect the argument that any profession is available to anyone, if you really want it. I presume nothing prevents you to become a teacher, which requires the least amount of upfront investment, compared to the doctors.
#113 IHCTD9 on 05.22.19 at 10:25 am
“I want that calculator after you’re done with it! I think the typical Canadian couple would never do 1.5 even in 40 years.” The future value of annual savings of $9,692.31 invested at 6% for 40 years is $1.5 million. It’s just math (not magic).
Here’s the math: $1,500,000 x 0.06/((1 + 0.06)^40 – 1) = $9,692.31