Earning the GVS

“Call me Pablo,” he said, “if you write about us. Now, Garth, would you please validate our decision to succumb to the hormones, or just lay on us for being fools?”

Of course. S’what we do here. Validate. Ridicule. Embarrass. Irritate. And, on rare days, educate.

Turns out Pablo & his love are some of those irascible, high-income young people that the old, fading snorts who scuttle around the steerage section love to pillory. Here’s the story:

I’ve enjoyed reading your blog everyday for years, but I’m here now to confess to the sin of purchasing a condo in the burbs of YVR.

We’re a couple of millenials in our 30’s with a toddler. We have a combined income of over $300k/yr with over $400k stashed away in all sorts of registered and non-registered balanced portfolios. We could not resist the flaccid housing market and decided to catch this falling knife. It was a fresh breeze of air not having to compete in a bidding war and forgoing typical subject-to clauses in our offer.

We ended up getting a condo in the 700’s range around $100k under asking, with carving out enough funds from our assets to avoid CMHC insurance (20% down).

While we expect the market to go even lower or remain half-dead for a long time, we feel pretty good about it. Now, Garth, please validate our decision, or else.”

For regular readers and others with no life, the advice here has been consistent and repetitive. If you need a house and can afford it without gutting your investments, imperiling you future or turning yourself into a walking debt zombie, yeah, do it. We all need to live somewhere. Owning real estate can stabilize your housing costs. You can nest and paint a room chartreuse. If it appreciates in value, the profit is free of tax. Financing with a mortgage is relatively cheap these days, and you can borrow against a house at any bank. There are obvious benefits.

But balanced against those are risks and costs. Property is ridiculously inflated in certain markets (you know where). Closing costs are insane, especially in the 416. Condo owners have zero control over escalating strata fees or special assessments. Property taxes are destined to rise with the carbon levy. It costs a bucket of money in commission to sell. In bad markets your property can grow illiquid. Owners pay more for insurance, have to finance all maintenance and foot operational overhead, all in after-tax dollars. If you sell and lose money, there’s no tax relief as with bad liquid investments. And, almost everywhere, is costs more to own than to rent when all costs are factored in.

The pachyderm in the closet, however, is emotion. Our society has a real estate fetish. People are bred to crave it. They believe property equals security. We all suffer from the myth of the Forever House. We believe having a baby means immediately acquiring insurance and land. And because the Boomers won the birth lottery, growing up with inflation and swelling real estate values, their kids have been indoctrinated, even though conditions have changed bigly.

But what of Pablo? His argument that buying was so much smoother (and cheaper) than it might have been two years ago?

Totally right.

This pathetic blog has made the same points. People pile in and chase assets when they are rising, causing more competition, stress, bad decisions and over-spending. Conversely, when stuff corrects in price, buyers vanish. We are pact animals, after all.

So kudos to P for bucking the trend. He took advantage of a Comrade-Horgan-induced BC market shellacking to buy at a discounted price, in the absence of competing bids, and in a more relaxed, cautious way, leading to a better outcome. Plus he maintained most of his liquid portfolio, creating diversification. Yes, prices could keep falling (and will). The bottom is unknown, and could be uncomfortably lower. But maybe not. It’s an open guess.

However, Pablo, a condo? Seriously?

You have a kid. There might be another. It’s impossible to expand a condo unit, so the walls could close in on you sooner than expected. In addition, monthly fees – like property taxes – are destined to increase over time as operating costs rise, and there is no way to escape. In addition, this is an apartment. Others live above your head, next door and below your feet. You can’t really control your own environment – plus, there’s no dirt. Your investment can be materially affected if the parking garage gets cracks or the pool craps out. The condo corp could have an insufficient reserve fund, or a dodgy management company. Lots of additional and inherent risks buying a concrete box (and it is concrete, right? Remember the leaky condo caper?).

For more than $700,000 in the burbs of Van you can actually buy a detached. Or even a cutsey little float home . Anyway, having some real in your real estate is never a bad idea. Likely you will learn this.

Otherwise, smart kid. You get a Garth Validation Sticker. That and five bucks will buy a Vanilla Bean Crème Frappuccino at Starbucks on Robson.

 

105 comments ↓

#1 Lost...but not leased on 05.29.19 at 3:57 pm

Phyrrzzzt woof woof

#2 Brett in Calgary on 05.29.19 at 3:59 pm

A little off topic, but couldn’t resist posting here for the dogs to feast on.

https://www.calgary.ca/cfod/hr/Pages/Careers/Job%20Postings/302065-Coordinator-Walking.aspx

No it is not your eyes…you are reading the job title correctly.

#3 cto on 05.29.19 at 4:01 pm

So what you are saying? the condo increases are purely emotional fomo and greed in T.O.?
Ok, I get this, but how does a single person afford a 600K unit???
Where is the money coming from? Do the boomer parents actually have that much?
Are the rents, starting at $2200 sustainable?
Need answers Garth, can’t say why, this guy is no housing bull…, but someone I am very close has been convinced by now that it is a “can’t loose investment”,… after making 5-6% returns on liquid investments per year for 10 years now,..while she watches condos increase 10% every year for a decade, based on my advice for her to stay out.
I can’t fight this fight anymore, my credibility is shot!!!

#4 Red falcon on 05.29.19 at 4:03 pm

I’d rather have passive income than a house with obiligatory debt and payments!!

And… first!!!!

#5 The Real Mark on 05.29.19 at 4:10 pm

Smart move, the bottom is in. Calling it now. Peak 2013, bottom 2019.

#6 tccontrarian on 05.29.19 at 4:24 pm

$700k for a condo? Wow…

I think a 50% ‘correction’ (aka haircut), on the way.
It’s ok, they can afford it.

TCC

#7 caledondave on 05.29.19 at 4:30 pm

First….mmm doggies loves burgers. Looks like a Harveys burger to me. Smart doggie.

#8 Greg on 05.29.19 at 4:37 pm

Pablo, I think a condo is a splendid idea! None of the many upkeep responsibilities of a house. Hopefully underground parking to eliminate weather frustrations. Hey, with a toddler, you need to keep it simple. The kid will be happy wherever he/she lives for at least another 10 years. The adults factor into family life too. Good move.

#9 Smartalox on 05.29.19 at 4:37 pm

The classic rookie real estate mistake: buy for where you are now, instead of where you WILL be. Garth is right: a suburban condo with a kid may be fine now, but not in three years, when your kid needs to run around, and your family is set to expand.

Renting is the original pay as you go plan: need a larger home? Give 60 days notice. Need a place you can carry on one income? Rents are still a lot cheaper.

#10 Paddy on 05.29.19 at 4:47 pm

He just purchased a condo for 700k….and you just called him a smart kid….Dr Garth are you feeling ok??….they just took 25% of their savings and through it at a condo…at a box within a box, surrounded by other boxes…hopefully it was a penthouse suite…

#11 Vision on 05.29.19 at 4:49 pm

The dog in the picture looks smug with his reward just as Pablo must have been until you tore holes into his decision.
Lol.

#12 Brian Ripley on 05.29.19 at 4:51 pm

Vancouver Housing Chart (May data)
http://www.chpc.biz/vancouver-housing.html

Well, perhaps there are more strata buyers that caught other knives and the sales plot in the chart will get beyond exhaustion. But the last evidence of solid sales and FOMO in Vancouver was between July 2015 and July 2017

June data will be interesting.

#13 Hawk on 05.29.19 at 5:08 pm

LOL – Float homes………now I’ve seen it all.

#14 not 1st on 05.29.19 at 5:10 pm

Yeah Garth, I am chasing falling assets in the equities market and guess what, they keep falling.

The Dow is up 7.7% this year so far. The TSX has added 12.6%. You must be standing on your head. – Garth

#15 Ponzius Pilatus on 05.29.19 at 5:17 pm

#122 Ace Goodheart on 05.29.19 at 10:40 am
They’ve admitted it:

“MillerCoors, the U.S. arm of Molson Coors, has said that Miller Lite and Coors Light do use corn syrup, while Bud Light uses rice, to aid fermentation. But it notes that the sweetener gets consumed by the yeast during fermentation, meaning it is not in the final product.”

This straight from the US court case where Molson sued Budweiser for saying that Molson uses corn syrop in their beer.

For those in the know, the biggest part of brewing beer is starch.

Basically, what you do, is grind down whole grain, to get at the white starch in each grain kernel. You then warm that ground up starch to 66.67 degrees, keep it at that temperature for an hour, and the result is sugar.

Enzymes work the magic. They transform starch into sugar, at 66.67 degrees.

You then extract that watery sugar from the grain bed (known as the primary extraction) and the result is, yup, good old malt extract, the primary ingredient in beer.

Problem is, grain is expensive.

So where else to get starch?

Well, corn is full of starch. And so is rice. Both can be purchased for a fraction of the cost of grain.

So those who like to cheat and make beer using things other than grain, will just grind up either corn or rice, to get the starch, and then heat that up to 66.67 degrees, extract the sugar, and voila, you have malt extract made from corn or rice.

Only problem is, it tastes like shyte. Corn beer and rice beer is garbage. It also is full of impurities which require many levels of filteration to remove.

So the big three brewers, using corn and rice, make low quality beer, filter the crap out of it, and then use small amounts of grain to make it taste “beer like”.

They have always denied doing this, but now it comes out in Court. You can’t lie to a Court or a Judge. So they have told the truth.

They make beer with corn and rice.
————-
That’s been known for a long time.
Only beer brewed according the Bavarian Purity law (water, barley, hops & yeast) for me.

#16 The Wet One on 05.29.19 at 5:22 pm

Well…

That story makes me feel better about what I bought. That’s for sure.

Yay me!

No more condo living for me. It was good while it lasted, but I probably did it for too long and didn’t get while the getting was really good.

Of course, in my market, Edmonton, buying and selling property isn’t quite so dramatic or as costly. Sure there’s million dollar homes in my neighbourhood, and I’ve got a brand spanking new infill in the heart of the city, but there’s plenty of quite affordable condos, houses and places that people making normal wages ($50- -60 k/year) can readily afford. The rent’s are pretty cheap too at the moment with quite a bit of selection.

Sure the economy is weak at the moment, but it’s pretty good on the whole. No ocean though, but you’ve got a fabulous river valley. And a fair whack of high paying jobs (assuming you can get one).

Life is good in my world. It’s very good indeed. Heck, I even kinda like cutting my grass, which I honest to god didn’t expect. I hated cutting it as a kid and got a condo for just that reason. No snow to snow to lawn to cut. Heaven!!!

Anyways…

Tell me about you and yours from across the land of the actually free (unlike those Yanks to the south who have some deluded idea of freedom)? How is it in your neck of the woods.

I’m as happy as a clam here in E-Town!

#17 Mean Gene on 05.29.19 at 5:32 pm

I rent a float home, the disadvantage of a float home is the moorage which runs $1000.00 per month.

But no property tax? – Garth

#18 Ponzius Pilatus on 05.29.19 at 5:35 pm

#5 The Real Mark on 05.29.19 at 4:10 pm
Smart move, the bottom is in. Calling it now. Peak 2013, bottom 2019.
————
Not what Central 1 economist said yesterday.
At least 2 more years of declines. Specially the high end.
Can’t wait to see who was swimming naked.

#19 NotLegalAdvice on 05.29.19 at 5:41 pm

“In bad markets your property can grow illiquid”. -GT

If I put 20 percent down in the suburbs outside of Toronto, you think my property may still become illiquid?

Example: 200k down on a 1million dollar property means that the value of my home has to be less than 800k for me to become illiquid, correct?

I don’t think the prices will drop a further 20 percent, not here in the suburbs. Not on a detached home, but what do I know.

Liquidity means it can be turned into cash. A house with no buyers is illiquid. – Garth

#20 Keyboard Smasher on 05.29.19 at 5:42 pm

So where do these millennials with half a million dollars in savings come from?

Are the demographics of this blog strictly 1%ers?

#21 NotLegalAdvice on 05.29.19 at 5:44 pm

#14 not 1st on 05.29.19 at 5:10 pm
Yeah Garth, I am chasing falling assets in the equities market and guess what, they keep falling.

The Dow is up 7.7% this year so far. The TSX has added 12.6%. You must be standing on your head. – Garth

Perhaps they picked up some assets in March and missed the boom this January.

Another with a time horizon of two months should stick with [email protected] – Garth

#22 Ponzius Pilatus on 05.29.19 at 5:44 pm

What happens if you buy a float home, and you find out that you get sea sick when the weather is rough.
Do you get your money back?

#23 Lost...but not leased on 05.29.19 at 5:51 pm

Seems like Pablo took the dive while weighing the risks.

Personally, I wouldn’t even touch RE for a year or 2…the unprecedented run up calls for an unprecedented correction.

#24 MF on 05.29.19 at 5:54 pm

#20 Keyboard Smasher on 05.29.19 at 5:42 pm

Everyone exaggerates online.

It’s just like online dating. All men are 2 inches taller, the women 2 inches thinner.

MF

#25 No Bueno, Pablo on 05.29.19 at 6:00 pm

Sure, he can afford the condo, but lower mainland condo prices haven’t even come close to falling. There’s a long way for those to go. Definitely should have done a house with land. Even at a slightly higher cost, could have rented out a suite to supplement the monthly payments since you don’t mind living in the same building with others. There are A LOT of ‘for sale’ signs up on the lawns here.

Kids need space. More so, adults with kids need space!
:)

#26 Re-Cowtown on 05.29.19 at 6:05 pm

Going off topic but hey….

I caught Mueller’s tour de farce today. Hillarious. His view is that they couldn’t prove that Trump did nothing so they didn’t exonerate him. That is the dumbest thing ever.

I can’t prove that Fidel Castro isn’t T2’s dad either, so maybe we should assume he is because we can’t prove he isn’t and impeach T2 for being a commie spy. This type of thinking is so stupid it beggars belief.

As to Mueller not being able to indict Trump because of DOJ policy: Pure crap. The DOJ can indict anyone they want, anytime they want including POTUS. If there was any type of a crime Mueller would have been all over it.

Mueller soiled himself on this one by claiming that although they didn’t find a crime, they can’t prove one didn’t occur. Again, an illogical and Monty Pythonesque conclusion to a witch hunt.

What’s next? Will Mueller claim that Trump didn’t know the flight speed of an African Swallow so that proves that he’s in league with Putin?

All Mueller proved was that when you depart of the letter of the law and head down the rabbit hole of speculation there is no end to the stupidity.

#27 Yukon Elvis on 05.29.19 at 6:11 pm

Fire season has started early in Kelowna this year. Smoke from the Alberta fire is in the air and it is only the end of May. It is not bad enough to leave town yet like i did last year but just wait until BC has its own fires…..don’t tell anyone tho, we need all the tourist dollars and retirees that we can get.

#28 BD on 05.29.19 at 7:10 pm

I live in Surrey BC;(

A house built in 2001 – 3700 sqft over 3 levels was going for $350K. In 2006 to 2007 this same house was going for $700K. In 2008 it was going for around $640K and slowly moved up to $700K between 2009 to 2015. By April 2016 the houses were selling for $1.0m. In 2017 1.2m and now about 1.1m. House prices were basically flat in Surrey BC for about 7 years (2008 to 2015) – and that was the time to buy!

#29 Flop... on 05.29.19 at 7:27 pm

Pablo, this detached is on for 950k in Vancouver proper.

It cuts like a knife.

But it feels so right…

M44BC

https://www.zolo.ca/vancouver-real-estate/2248-east-30th-avenue

#30 Flop... on 05.29.19 at 7:46 pm

Well, Dr Garth was in the clinic yesterday but howmuch just put this one up.

Bit of a long one, someone will moan.

I don’t care.

I will give it the respect it deserves…

M44BC

“What the Numbers Tell Us About the U.S. Drug Crisis.

The U.S. has been battling a growing drug use epidemic for several years. This crisis has resulted in an increase in overdose-related deaths as well as an increase in prescription drug spending. By looking at how much people are spending on prescription drugs in each state, we begin to understand the scope of the problem.

So how large of an impact has this drug crisis had on each state? Let’s take a look at the numbers to get an idea.

North Dakota has both the lowest spending per capita on prescription drugs ($734) and the lowest number of deaths by overdose (68).

Low spending per capita on prescription drugs does not necessarily indicate a lower number of overdose-related deaths. California, for example, has the second lowest spending per capita ($788) and the fourth most deaths from overdose (4,868).

The largest spending category on prescription drugs in the country is commercial — meaning, the majority of these prescriptions are covered by commercial and government programs.

25 out of 50 states had over 1,000 fatal opioid overdoses in 2019 with only three states having less than 100 fatal overdoses — indicating that the drug epidemic is a national concern, not a localized issue.

Fatal overdoses in the United States are continuing to increase. The age-adjusted rate of overdose deaths increased significantly by 9.6% from 2016 (19.8 per 100,000) to 2017 (21.7 per 100,000).

Unsurprisingly, this correlates with an increase in prescription drug spending. In 2018, individuals in the United States spend a total of nearly $400 million on prescription drugs.

While the opioid epidemic seems to be improving, other drugs are becoming an increasingly severe threat to the U.S. population.

States With Highest Spending Per Capita On Prescription Drugs:

1. Delaware – $1,693
2. Tennessee – $1,655
3. Kentucky – $1,612
4. West Virginia – $1,507
5. Connecticut – $1,423

States With Lowest Spending Per Capita On Prescription Drug:

1. North Dakota – $734
2. California – $788
3. Montana – $828
4. Washington – $833
5. South Dakota – $862

States With Highest Opioid Prescriptions per 100 People:

1. Alabama – 107.2
2. Arkansas – 105.4
3. Tennessee – 94.4
4. Mississippi – 92.9
5. Louisiana – 89.5

States With Lowest Opioid Prescriptions per 100 People:

1. District of Columbia – 28.5
2. Hawaii – 37
3. New York – 37.8
4. California – 39.5
5. Massachusetts – 40.1

Most people would assume that either larger populations or some other correlating factor would present itself in the data. What we tend to see is that the higher the expenses per capita, the higher the opioid prescription rates. You see this in places like Alabama, Mississippi, and Arkansas.

However, this isn’t always true. States like Wisconsin and Connecticut have high per capita spending, but low amounts of opioid prescriptions. In fact, there isn’t necessarily a correlation between opioid deaths per capita and either the total expenses per capita or the prescription rate per 100 people.

To find the prescription drug spending per capita by state, we used U.S. Census data to get the population by state. KFF then provided data from IQVIA to total expenses for each state. We then divided the population to get the per capita spending for each state. The CDC provided the data on the opioid prescription rates.

The figures used in this piece were obtained by dividing all prescription drug expenses by the U.S. Census 2018 population estimates in each state. This data includes prescriptions covered by commercial and government programs, Medicaid, Medicare, and cash.

You were likely already aware of the current drug epidemic in the U.S. It has been the subject of extensive media coverage over the past several years.

However, if you haven’t experienced the effects of this problem in your own life, taking a look at the numbers surrounding this crisis can help give you a better idea of the severity of this issue.

It’s important to understand what this data represents and what it implies for the future. Moreover, it’s important to learn from others that have been affected by this epidemic to better understand the situation at hand. We encourage you to leave a comment about your personal experiences and what conclusions you think can be drawn from these figures.”

29 May 2019

Visualization

https://howmuch.net/articles/prescription-drugs-spending-per-capita-by-state

#31 Sean on 05.29.19 at 8:04 pm

I assume you’re joking about the float home, especially mentioning it in the same sentence as “real I. Real estate” – even less land with a float home than a condo.

#32 Janice on 05.29.19 at 8:09 pm

HI Garth…We’ve been long timer readers of your site. The ‘letters’ you post are very interesting and instructional but my husband mentioned something. They all seem to have the same writing style…like the same person writes all of them. I said it was just his imagination. Who is right? You are a very smart man and we both enjoy your insight and the comments of many of your posters. Keep up the good work and please don’t ever consider shutting this site down.

No letter is published without confidence of authenticity. – Garth

#33 jess on 05.29.19 at 8:16 pm

– a shift towards “unitary taxation”, which would mean corporations are taxed where they do business rather than where they have headquarters”

https://www.bbc.com/news/world-europe-jersey-48354081
=

mueller -says trump is lying /he was not exonerated– he would have said so!

#34 Spectacle on 05.29.19 at 8:23 pm

“Your investment can be materially affected if the parking garage gets cracks or the pool craps out”
The Horouable Sir Turner

Or, in the case of The Veridian Green condos in Richmond BC ;

“The pool cracks, and 100% floods into the parking lot.”
What else could go wrong?

#35 Vampire Studies (doctoral thesis) on 05.29.19 at 8:44 pm

28 BD – a similar experience in my island burg as well. After the peak price in 2008, there was no definitive correction, just a melt of less than 15% over the next few years. The low rates undoubtedly had an effect on this. Paid off the mortgage in 2009, so I wasn’t watching all that closely. By the time it picked up again I wasn’t really interested in moving, but just adding to the retirement fund.

So the question now is if there is enough powder and bullets left to soften a correction, or will it be a quick crash?

No debt, no worries.

#36 yorkville renter on 05.29.19 at 9:01 pm

#26 – dude, there is nothing that can be said for you to waiver from your dear leader, so why keep posting about it? you are either trolling or simply don’t want to evaluate the evidence in front of you.

#37 Ace Goodheart on 05.29.19 at 9:01 pm

So talking to a bloke I know about commuting.

He uses Toyotas. Corollas. Actually, uses one of them, his second. And four, going on five engines.

He told me, the key to successful commuting is being able to keep your vehicle going. Most people don’t realize that. They buy a brand new car, on a loan or a lease, and then start trundling it up and down the highway every morning and evening. By the time they have put 300,000 or 400,000 km on it, the car is junk, needs major repairs, and they still have payments left on the loan.

Toyota Corollas.

Five speeds. He bought a bunch of low KM motors for these things, put them in his garage, threw a tarp over them and started driving.

He told me, he gets around 450,000 to 500,000km out of the engines. The five speed gear boxes last forever. Don’t buy an automatic, he says. Those trannys break down before the engines do, and they have computers hooked up to them, so you can’t pull them and replace them in your garage.

When a motor blows up on him, he tows the Corolla back to his house. He has CAA plus. 200km towing range. Within his daily commute, wherever the car dumps him.

His last motor went 515,000km then it threw a rod. Oil everywhere. Effectively made the motor into a boat anchor. He was lucky that the rod went out the bottom of the motor. He told me of a time when that happened to another engine, and it made a hole in his hood.

So he pulled the car into his garage, hooked the destroyed engine up to a hoist he rigged using the cross beams in the garage and an industrial pulley, and lifted it out.

You have to disconnect a bunch of stuff. Luckily, it is plug and play. He marks it all with little pieces of tape, carefully reattaching it to the new motor after he drops it in.

The moment of truth is when you turn the key. He says usually he forgot something and something goes wrong. One time coolant sprayed out everywhere. Another time, he forgot to hook up the gas line and burned out a fuel pump.

But when the operation transplant is done, he has a good little car that will commute another 400,000km or so, before the transplanted engine blows up or wears out.

Oh, and the odometers? They don’t go past 999,999. In case anyone was wondering. They stick at that number, and never turn again.

He figures he has over 2 million KM on his current Corolla. It’s on its fifth motor. Same original five speed transmission. He replaces the clutch disk each time.

You don’t go through a lot of clutches when you’re cruising down the highway in 5th gear, but anyway…

You don’t go through a lot of brake pads, either.

But you do use up a few engines…..

#38 Nonplused on 05.29.19 at 9:07 pm

The salvation for Pablo, seeing as he has already made the catastrophic mistake of buying a condo, is that as his condo falls in price so will the properties with “dirt” that he should have bought. Probably by more.

It’s more fun with statistics but if we can assume that the market is ergodic (a new fun word I learned that means the same in a small sample as on the whole or sort of like that) then a 10% fall in YVR would mean that say this $700,000 condo will shed $70,000, but a $1,400,000 house with dirt will shed $140,000. So Pablo will still be ahead, but only half as much as he could have been.

Anyway I am opposed to buying apartments unless you own the whole building and you are the landlord. If it looks like a hotel, you should rent it or own the whole thing (perhaps with partners) and rent it out. There are far too many problems that can come from joint ownership of something with a bunch of people you don’t know anything about. And remember that half those people are below average IQ, in a condo probably more because I doubt the IQ distribution is ergodic when it comes to condo owners. They won’t make good decisions. If the roof needs repair, they may vote against it because they don’t have the money. They may grow pot in their suite and inadvertently flood your unit. They may be running a brothel. Who knows what they are up to. Whatever it is, it probably isn’t something you’d let your teenager do in their room.

Never buy a property that isn’t surrounded on all 4 sides by a fence or at least a well defined property line, unless you own the whole thing and plan to rent it out.

But there is more good news for Pablo, the real estate market is not ergodic. Expensive properties rise in price more than cheap ones in a boom, and they fall further in a bust too. So a 10% overall reduction in house prices in YVR might mean the sought after houses with “dirt” might decline 20% while condos might hardly go down much at all. Premium properties only carry a premium when somebody has the money to pay that premium. High end restaurants go out of business all the time, but McDonald’s never will.

#39 islander on 05.29.19 at 9:21 pm

Well you can bet at 700,000 CAD that the condo ain’t concrete. Poor Pablo is too young to remember the ‘leaky condo crisis’. With land prices in YVR being so high, developers are one step away from building with balsa wood and styrofoam (oh wait – they already are!). As it was in the 80s, so it remains today. Some things never change.
Buy land, pitch a tent, then go try and save some money.

#40 IHCTD9 on 05.29.19 at 9:49 pm

#20 Keyboard Smasher on 05.29.19 at 5:42 pm

So where do these millennials with half a million dollars in savings come from?

Are the demographics of this blog strictly 1%ers?

No.

But I hear ya…

#41 Victoria Real Estate Update on 05.29.19 at 9:57 pm

Vancouver’s housing price correction will be epic. House prices there quadrupled from the early 2000s while incomes barely budged.

Buying a condo there at near-peak prices will prove to be a huge mistake. That they can afford the paymentslowwr is no reason to buy when prices are still extremely bloated when they could rent and buy when prices are much lower in the not too distant future. This is the same mistake millions of families worldwide have made in the past in other bubble countries.

No housing bubble has ever had a soft landing. It won’t be different with Canada’s bubble.

#42 meslippery on 05.29.19 at 10:02 pm

Float Home
Was wanting waterfront but flooding was a concern.
Float home beats that all the way around???
It will rise with the water (No sand bags )

#43 IHCTD9 on 05.29.19 at 10:03 pm

#37 Ace Goodheart on 05.29.19 at 9:01 pm
So talking to a bloke I know about commuting
———

Tell your buddy to investigate the old tdi Jetta diesels. Late 90’s early 2000’s vintage. I know a sales guy who lives in Bancroft and works in the GTA (outside sales obviously). He got 806,000 out of it when something went in the top end. He sold it to his mechanic who fixed it and put it back on the road! Plus it’s one of the few vehicles that can crack 50 mpg in the real world.

#44 IHCTD9 on 05.29.19 at 10:15 pm

Also, over 700k for a condo is insane, all condos go to zero. At least Pablo and his Senora are loaded with cash with big cash flow backing it up.

Pablo, next time buy dirt, even if the house falls over, at least you’ve still got something. When fist fights start breaking out at the condo board meetings, that’s your cue to sell ASAP.

#45 NoName on 05.29.19 at 10:18 pm

#37 Ace Goodheart on 05.29.19 at 9:01 pm

What model year is that corrola with magical powers, where body doesn’t designate after all that road stress and salt lets say 800k max. Asumin he is driving 125 one way (250 roundtrip) every day of the year back and forth, that is 730km after 8 yrs of i got a math riight.

So im order for him run 4 (400-isk per engine)engines in one body he probably runs 200km+ per day one way, even with corolas gas milage he is running 30cad in a gas a day and he is at gas pump more often than i am, i and i know all pump people by first name…

And he is driving on gas not propane, interesting…

#46 Tony on 05.29.19 at 10:20 pm

Pablo must have missed the boat when they passed out brains. Locals make around $38,000 a year on average and the ongoing trade war between the U.S. and America is just starting to heat up. Some people like money and some people hate money. Pablo must be the type of person that hates money.

#47 Triplenet on 05.29.19 at 10:24 pm

Of course there is property tax applicable.
There is a land value and an improvement value.
Very similar to a MH park lease.

#48 Vampire Studies (doctoral thesis) on 05.29.19 at 10:26 pm

37 Ace – what kind of commute does your friend have to accumulate 2M km? That just sounds like waaay too much time spent that can never be recovered.

#49 NoName on 05.29.19 at 10:45 pm

Interesting read about propane for
super luxurious omnidirectional thingimajigers.

http://www.whipnet.com/sites/e85.whipnet.net/alt.fuel/convert.propane.html

#50 Re-Cowtown on 05.29.19 at 11:04 pm

#36 yorkville renter on 05.29.19 at 9:01 pm
#26 – dude, there is nothing that can be said for you to waiver from your dear leader, so why keep posting about it? you are either trolling or simply don’t want to evaluate the evidence in front of you.
+++++++++++++++++++++++++++++++++++

What evidence? Please be specific. Provide a link to what Trump did. Not what people think he did, or read his mind, or guessed about, but something tangible, something like lying to congress (Bill Clinton), or breaking into an opponents campaign office (Nixon).

What was Trump’s crime?

The thing that is so disturbing about how Trump is being treated is that if the government can bend or break the law to do that to him, what chance do you or I stand?

#51 Josh Simpson on 05.29.19 at 11:40 pm

Just say a commercial on Yes TV. It is about a 8.29% rate of return and avoiding the ups and downs of the stock market, http://www.cannect.ca.

I read up on it and it is a mortgage investment company that talks about eligible and accredited investors allowed only to invest. It looks too risky to me to get involved in. This is just my take on things anyway.

#52 yvr_lurker on 05.29.19 at 11:55 pm

Perhaps people don’t quite see how it has changed in YVR since around 2002. A total combined income of over 300K for this age-group is probably in the top 2% of their peer-group. A similar top 2% in income with the same % downpayment (and without the famous family plan inheritances, gifs etc…) would have been been able to buy the standard 650K-700K very decent house in Dunbar at that time. I know these numbers because that was when I was first looking. Now the top 2% based on income are relugated to getting a decent 700K condo probably somewhere in east van, or something much smaller in Kits. If you don’t see a problem with how this “evolution” has gone for the next generation we don’t have much to discuss…

#53 Tina Thompson on 05.30.19 at 12:21 am

I don’t know why GIC’s are treated so badly. I don’t make alot but I am still building a big annual investment balance. I started with only $1,000 back in 2010 and now have amassed $125,459.87 in regular GIC’s, $85,341.66 in RRSP GIC’s, $75,113.23 in TFSA GIC’s.

I am in the 3.2415% average rate on all these GIC’s over the last 9 years so I’m not making too little either. I am a 38 years old single lady with a paid off car and paid off condo since 2014 in a decent size town here 50,000 population or so.

I know interest rates are still low as I have been watching this stuff only since 2010 and it looks like 2.5% to 3.5% is around the low to high range is on these things.

In past years just say 15 to 20 years ago I heard from friends and family 4.25% to 6.25% interest rates on GIC’s which now looks high. My main strategy over the last 16.5 years was pay off my debts, credit cards, car loan, mortgage etc.

Once I had extra money it just seemed logical and easy, simple to manage my money by just getting fixed interest deposits called cashable GIC’s, term deposits. The RRSP tax refund reinvested in these GIC’s and TFSA GIC’s were also a good thing that really help build my money more then I thought possible.

It just kept building and building up and now I am worth about $600,000 with no debts and condo mortgage free. I am thinking that I am in a pretty good position but why should I take more risk if not needed.

By the way, I don’t make alot of money, I own my own flower shop and made last year a net profit of $64,000. I work 6 days a week, 12 hours a day my flower shop is open. I hope my story inspired someone that if there is a will there is a way.

#54 Damifino on 05.30.19 at 1:29 am

#32 Janice

They all seem to have the same writing style…like the same person writes all of them.
———————————-

Janice, I can accoubnt for this.

If you consider that imitation is the sincerest form of flattery, it’s only natural the denizens in this corner of the blog-o-sphere would wish their correspondence to emulate the refined lexicon of their universally respected and highly esteemed host.

The cynics among us might label it a mere tip of the hat to a rumored mandatory suck up policy, but I am not among them. Garth inhabits a rarefied air, well beyond the need for hollow praise and blatant brown-nosing.

#55 Smoking Man on 05.30.19 at 2:10 am

Kids are figuring out

https://youtu.be/xydwMqIhZ54

#56 The Great Gordonski on 05.30.19 at 2:39 am

Here we go, another fantastic opportunity to buy cheap courtesy of the Hate Trump media, moron retail investors, clueless hedge fund mgrs who hate Trump and ” Uncle Xie” , while seemed to have a half with advisor equivelant to Trudeau’s Axelrod/Butts , that’s right, total morons. China is collapsing in slightly faster than slow motion.

Normally we have a summer swoon in June. This hearkens back to the nineteenth century calender for school holidays during harvest and melting tundra . You’ve all heard it said ” Sell in May and Go Away”. But this year, fundamentals have been abandonded and the Trump Hate Media is republishing Chinese propaganda straight out of Chinese Workers Daily exacerbating a swoon into a perception meltdown. A sell off in the summer is normal. Fundamentals good, perception bad equals over sold conditions lead to an early buy season just days away instead of a month or two.

If this were climate related we’d say it’s as good as ” the world will end in twelve years” and the golly gosh repetition of a cute twelve year old Swedish girl making speeches on subjects she knows nothing about. Yes, it’s sad that children are being brainwashed with nonsense, but there is precedent in the anti- alcohol campaign of 1914. This level of cynicism is not new.

Uncle Xie is a chump if he believes threats of withholding export of rate Earth metals is his ace in the hole. Rare Earth Metas which are neither rare or in short supply globally. China has used non existent regulations to dirty mine it, we said “Go right ahead”. But that doesn’t mean current mines and on site facilities in North America can’t be producing in North America within 30 days. Mines larger than China’s production exist in California and Brazil. #3 is India.

The Trump Hate Media grabbed this straw and cried “We’ve finally got him”, but nope, you don’t. However the press went nuts on this item all the same and retail batters got flushed out. When you’re so scared that you need your pants watching MSNBC , that’s Mother Nature tweaking your survival instinct. A rational mind knows that blood in the street means added zeros in your bank account down the road.

https://www.ccn.com/china-ruthless-trade-war-dow-stock-market/amp

#57 islander on 05.30.19 at 3:02 am

September 22, 2011

True then – true now

https://www.vancourier.com/living/travel/condo-nightmare-buyer-beware-of-leaky-rotten-condos-1.378410

#58 Dolce Vita on 05.30.19 at 3:26 am

Bitch, bitch, bitch.

So when the Blog Canadiana Vignettes are about the under class, Steerage Section spitting cobra venom is spat upon the irresponsible.

When about the over class, the like is spat upon the responsible.

And I thought @JustinTrudeau could not win for losing.

Add @garthturner to the list.

#59 Dolce Vita on 05.30.19 at 4:01 am

From the @JustinTrudeau “cannot win for losing” primacy:

Not a good thing to say to CANADIAN VETERAN’S by our Dilettante PM (in light of $600 MM for the Luddite Cdn. MSM and $650 MM for women’s reproductive rights and health services around the world):

“They want more than we are willing to pay.”

@JustinTrudeau Tweet 17h ago (he is traveling to the UK and France for the 75th Anniversary of D-Day):

“We owe an IMMEASURABLE debt to the veterans, the fallen, & their loved ones who served & sacrificed during the Second World War. ”

Well, that went over like a lead balloon on Twitter as in scathing Replies:

https://twitter.com/JustinTrudeau/status/1133740525067145216

I’m starting to believe Justin Trudeau is a dim witted, effete, cardboard pastiche and vacuous programmable robot of the latest and greatest Progressive cause célèbre.*

He is no longer a “disappointment”, he is a “sham”.

—————————————–

*Despite what you say in his defense Garth (he got elected as an MP and then PM – thus, show respect), he was carefully groomed by the Liberal Elite solely to defeat Harper (a.k.a., S. Bronfman, et. al.) and as for his riding of Papineau, you could run a 3 headed dog there, call it Liberal, and it would get elected too (save 2006 and not by much).

The Bronfman’s need to pass the torch back to the Desmarais Family, at least they gave us Chretien, Martin and yes, Mulroney too…2 out of 3’s not bad.

#60 BillyBob on 05.30.19 at 4:57 am

#37 Ace Goodheart on 05.29.19 at 9:01 pm
So talking to a bloke I know about commuting.

……

He figures he has over 2 million KM on his current Corolla. It’s on its fifth motor. Same original five speed transmission. He replaces the clutch disk each time.

You don’t go through a lot of clutches when you’re cruising down the highway in 5th gear, but anyway…

You don’t go through a lot of brake pads, either.

But you do use up a few engines…..

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

I admire the system in principle, I really do. I use similar methods for other things to squeeze maximum benefit from minimal cost.

But the one thing your whole story doesn’t really address is the tragedy of spending ones life commuting 2 million kilometres.

He may have saved a ton of $$, but the time is gone forever.

That’s the true waste.

#61 The Great Gordonski on 05.30.19 at 5:28 am

#59 Dolce. Look at how a sleazy public broadcaster tries to end run third party advertising rules set out by Elections Canada.

https://www.theglobeandmail.com/arts/television/article-cbc-pitches-advertisers-in-push-to-save-commercial-revenues-pre-empt/

Is this intimidation on top of the $600 million pledged by the Liberals? The CBC received a billion in return for loyalty during the last election, they ran the Hate Harper Campaign with millions in additional funding from American and European Haters, as proved up by Vivienne Krause who uncovered the transaction tax records. The sober among us will remember Trudeau promising to double the gift to two billion if loyalty remained firm in 2019.

The CBC must either register as a political lobby or be arrested for election fraud. It’s as simple as that, and an obvious fact that public money is being used to fight for the Liberal Party and against Canadians who disagree with thier globalist agenda.

#62 Sail Away on 05.30.19 at 6:30 am

#51 Josh Simpson on 05.29.19 at 11:40 pm
Just say a commercial on Yes TV. It is about a 8.29% rate of return and avoiding the ups and downs of the stock market, http://www.cannect.ca.

I read up on it and it is a mortgage investment company that talks about eligible and accredited investors allowed only to invest. It looks too risky to me to get involved in. This is just my take on things anyway.

——————————–

No, no and no. A company requiring accredited investors advertising on TV? I’m guessing you’re not accredited.

But… get their prospectus and study it carefully to see the disclaimers, how few rights ‘investors’ have and the recovery position if things go sideways. Good free education.

#63 Captain Uppa on 05.30.19 at 6:44 am

I just bought my next home and I was happy to do so in this “down time”. Garth is bang on about our herd mentality.

Everyone flees when prices go down. This is true in real estate and stock markets. But, those are the periods where the real money is made.

Unlike Pablo however, I bought dirt. A decent size portion of it too.

#64 Gravy Train on 05.30.19 at 7:08 am

#50 Re-Cowtown on 05.29.19 at 11:04 pm
“What evidence? Please be specific. Provide a link to what Trump did.” Here you go:
https://www.justice.gov/storage/report.pdf

If you don’t have time to read all 448 pages of Mueller’s report, just read the introductions and executive summaries of both volumes (a total of 18 pages). You can do that, can’t you? Just think: You’ll be the world’s first educated deplorable! What an achievement! People will line up to buy tickets just to get a glimpse of you! :P

#65 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 05.30.19 at 7:46 am

Sadly, the impending Rapt Whore debacle has served as another staging ground for GTAholes to expose their savagery and mendacity.

After the last game, the Toronto police attempted to arrest the malevolent brutes vandalizing public assets, but the crowd of Rapt Whore supporters threatened to murder the cops!!!!

http://torontopolice.on.ca/newsreleases/44023

Way to go, Toronturds, show the world who you really are. Violent, ignorant thugs.

The upside is that it will help burst your delusional bubble in both civic reality and real estate.

Want to know why the Warriors are such a great team, making it to the finals five years in a row, about to win their fourth title this decade?

Simple. Because Steph Curry took Garth’s advice!

He got the hell out of the GTA years ago, and it has been success for him ever since :)

Lesson learned.

#66 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 05.30.19 at 7:52 am

But in the meantime, Toronturds, this may be your last chance to salvage a fraction of the soon-to-be imploding value of your shaky, flimsy condos – so……

-try selling your glass-wall condo online this week with a couple of Rapt Whore tickets included dangled before the Greater Fools, maybe you can get $350,000 for it!

(A lot better than what it will be selling for in a couple years as the crash takes hold and your maintenance fees go through the roof!)

Go to kijiji and StubHub ASAP!!!!!!

#67 Rational Optimist on 05.30.19 at 7:58 am

“In our 30’s” isn’t a very high-information statement. There is a difference between two 31-year-olds with a toddler and $400,000 saved and two 39-year-olds with a toddler and $400,000 saved. Though both are in their 30’s.

Either way, though, he wrote you asking about his decision to buy a property worth barely double his annual income. Remarkable.

#68 Tater on 05.30.19 at 8:13 am

Tough to get too worked up about this condo purchase. Let’s say the market drops 50% over the next 5 years.

Condo is now worth 350k, their cash assets are 380k from what they have now, and should have added another 290k (save 50k per year at 8%). Mortgage is around 480k. So total net worth is 540k. While they are under 40. That’s not bad.

Is it the way to maximize their wealth? Likely not. But people make the trade off between wealth maximization and lifestyle all the time.

#69 dharma bum on 05.30.19 at 8:14 am

How could Pablo go so wrong?
Tell me Condo, Condo Connnnndo!

https://www.youtube.com/watch?v=mMaIzHkGwO8

#70 crowdedelevatorfartz on 05.30.19 at 8:18 am

@#61 The Great Gordonski
“The CBC must either register as a political lobby or be arrested for election fraud. It’s as simple as that, and an obvious fact that public money is being used to fight for the Liberal Party and against Canadians who disagree with thier globalist agenda.”
++++

I used to pay almost $80/month for the “privledge” of having cable tv. The endless Real Estate advertisements bracketing the 6pm Global “news” were the icing on the cake.
Global “News” towed their Masters pro business agenda like the faithful lickspittles they were.
I cancelled my tv ( why do we have to pay money to be inundated with ads?) and bought an antennae.
Now?
My CBC socialist, politically correct, propaganda is free.
And no matter how many pro Trudeau “news” stories they print……
I still wont vote for him in Oct.

#71 Glengarry Girl on 05.30.19 at 8:20 am

#53 Tina

My husband and I have followed a similar savings strategy since 2007. We took advantage of a low taxation opportunity to Cash out all of our RSPs before the correction. We sold our house which was paid off. We moved all of our Savings to USD at Par and moved to the US for work. After the crash of 2008, there were many insured GICs paying 5% BTW, but we have averaged about 2 to 3%. We rent homes and move for better jobs and save. Over the past 2 years we started tapering USD to CAD at average of 1.33 %. We are prepared for a housing correction and plan to buy three investment properties and live off the rent in our Retirement. We do not at all trust the markets for our cash and are careful not to buy property in a bubble. This simplistic strategy has left us feeling very secure and we sleep sound at night not worrying about the Dow Jones. There aren’t many advisors that recommend this because there are no fees to be made. I am also fine with others that have made 8 to 10% in the Markets over the past 10 years, or money on appreciating homes, Good for them. But remember, it isn’t actually a gain or profit until you cash out and I believe we are on the cusp of another major correction. It doesnt seem logical to believe that a housing correction is going to happen, but your investments in the Markets won’t also take a hit. I’m also fine if a correction doesn’t occur. We travel full time, no debt, live Simply and are content. We live in a travel trailer currently. At 50, my husband took almost a year off work and we camped 35,000 miles through the USA and Canada. He has worked for 18 months and now we are preparing for another sabbatical in Australia. We have been keeping an eye on the Boat market and it has started to soften. We are going to buy a live aboard once the prices come down. I think the key to this kind of thinking is not to be Greedy. You can have a great adventure very inexpensively. Many people live this way, just look at YouTube.

#72 dharma bum on 05.30.19 at 8:27 am

#30 Flop…

States With Highest Opioid Prescriptions per 100 People:

1. Alabama – 107.2
2. Arkansas – 105.4
3. Tennessee – 94.4
4. Mississippi – 92.9
5. Louisiana – 89.5
——————————————————————

I guess that’s why the stuff is called Hillbilly Heroin.

#73 the Jaguar on 05.30.19 at 8:34 am

I am transfixed by the instagram clip with that big ship. Imagine being able to sit in the chair, so close while as it struggles to get loose. Exhilarating.
If one could open a small bar next to the dock I might like to work there.

#74 Incubus on 05.30.19 at 8:43 am

“getting a condo in the 700’s range”

I checked in kijiji ads, and I found 4 1/2 units around $2000/month.
So if you divide 700 000/(2000*12) = 30 years rents !
It is far more cheaper to rent, and wait for the market to fully correct.

#75 Stan Brooks Fan Club on 05.30.19 at 8:48 am

Stan, oh Stan. When will you post and acknowledge that you know have a bona fide fan club on this blog…

#76 IHCTD9 on 05.30.19 at 8:54 am

#53 Tina Thompson on 05.30.19 at 12:21 am
____

Excellent job, I like stories from the regular working schmoes too!

#77 Steven Rowlandson on 05.30.19 at 9:01 am

If these people with high incomes are being put in a dodgy position in respect to home acquisition then those of lesser means are doomed to the Honda Hilton if they are lucky.

#78 IHCTD9 on 05.30.19 at 9:05 am

#74 Incubus on 05.30.19 at 8:43 am
“getting a condo in the 700’s range”

I checked in kijiji ads, and I found 4 1/2 units around $2000/month.
So if you divide 700 000/(2000*12) = 30 years rents !
____

The mortgage on that puppy would be about 3300.00/month at 3% for 25 years – plus 300 grand in interest paid after the smoke clears. A million dollar sink hole.

IMHO, as long as those big incomes hold out, they’ve got no worries – but think about the consequences if they did not – life could do a 180 real quick.

Hopefully they have government jobs…

#79 Ace Goodheart on 05.30.19 at 9:08 am

RE: #45 NoName on 05.29.19 at 10:18 pm
#37 Ace Goodheart on 05.29.19 at 9:01 pm

“What model year is that corrola with magical powers, where body doesn’t designate after all that road stress and salt lets say 800k max. Asumin he is driving 125 one way (250 roundtrip) every day of the year back and forth, that is 730km after 8 yrs of i got a math riight.”

He drives from Mactier to Toronto. He is a “drywall mudder”. Works in new condo buildings. The round trip is about 450km.

As for the rust issues, yes all commuters know about that. Highway 400 is basically a big salt bath in the winter.

But there is a secret to overcoming that, too.

Oil. You spray it on and in the body panels. If you get it right, the car will not rust. Ever seen a car in the winter, that looks like it has black goo all over the lower body panels, door bottoms and fenders? Notice that it is not rusty, at all? Someone oil sprayed it. Do that, the bodies last forever.

Yeah, gasoline is expensive.

But drywall mudders can make 90K per year in the Toronto condo industry, which is way more than anyone can earn in Mactier.

#80 Greg on 05.30.19 at 10:08 am

Smartalox #9, you either have no kids or a wife who does it all. With kids (1 or 50) you don’t have time to scratch your ass, let alone pamper lawns, paint decks, rake leaves or shovel snow. Pablo, enjoy life!

#81 The Great Gordonski on 05.30.19 at 10:28 am

Do you really need more proof that climate change is fake news ?

https://sovereignnations.com/2019/02/07/global-warming-destroying-capitalism/

Only a complete fool would believe the propaganda.

#50 Crowded Farts, agreed, cut out the CBC and starve the beast. I switched to ROKO for home entertainment, super free upgrade . Friends don’t let friends get brainwashed by the lying CBC .

#82 Tater on 05.30.19 at 10:29 am

#79 Ace Goodheart on 05.30.19 at 9:08 am
RE: #45 NoName on 05.29.19 at 10:18 pm
#37 Ace Goodheart on 05.29.19 at 9:01 pm

“What model year is that corrola with magical powers, where body doesn’t designate after all that road stress and salt lets say 800k max. Asumin he is driving 125 one way (250 roundtrip) every day of the year back and forth, that is 730km after 8 yrs of i got a math riight.”

He drives from Mactier to Toronto. He is a “drywall mudder”. Works in new condo buildings. The round trip is about 450km.

As for the rust issues, yes all commuters know about that. Highway 400 is basically a big salt bath in the winter.

But there is a secret to overcoming that, too.

Oil. You spray it on and in the body panels. If you get it right, the car will not rust. Ever seen a car in the winter, that looks like it has black goo all over the lower body panels, door bottoms and fenders? Notice that it is not rusty, at all? Someone oil sprayed it. Do that, the bodies last forever.

Yeah, gasoline is expensive.

But drywall mudders can make 90K per year in the Toronto condo industry, which is way more than anyone can earn in Mactier.
—————————————————————-

90k/12 hours a day including commute, less 15k in pretax dollars for gas, and we get $26 bucks an hour.

Ewww.

#83 Mattl on 05.30.19 at 10:57 am

#37 – Ace

So your buddy commutes 3 hours each way including occasionally breaking down at the side of the road, and in his spare time fixes up the shit box he spends half his life in. Great example of penny wise, pound foolish. Talk about not having any respect for your own time.

#84 Stoph on 05.30.19 at 11:31 am

#53 Tina Thompson on 05.30.19 at 12:21 am
—————————————————-
Congrats on taking charge of your finances and building a sizeable nest egg.

The reason GICs get treated badly around here is that the returns are low in comparison to our gracious host’s 6% return he gets for his clients using a balanced and diversified portfolio. They are also fully taxed as income outside of registered accounts (RRSP and TFSA) vs. capital gains and dividends that get preferential tax treatment. GICs also have no potential for capital appreciation.

#85 Greg on 05.30.19 at 11:33 am

Forget the damn dog too!

#86 IHCTD9 on 05.30.19 at 11:41 am

#80 Greg on 05.30.19 at 10:08 am
Smartalox #9, you either have no kids or a wife who does it all. With kids (1 or 50) you don’t have time to scratch your ass, let alone pamper lawns, paint decks, rake leaves or shovel snow. Pablo, enjoy life!
____

When the kids get older – they’re the ones doing the raking, mowing, shoveling, etc. Once they get old enough to drive, then you can send them on errands too, like groceries and so on. I had mine up on the roof to help with shingling last week!

If you parent right, all that work you did and sleep you lost when they were young gets paid back in spades :).

#87 That's All, She Wrote on 05.30.19 at 12:22 pm

“So your buddy commutes 3 hours each way including occasionally breaking down at the side of the road, and in his spare time fixes up the shit box…”

Geez, maybe don’t judge so quickly without more facts? You can get a nice spread in Mactier for 1/2 of what a 1 bedroom condo costs in Toronto. With the right audiobooks, you could get yourself a pretty good classical education in the car (should you wish; calculus might be a bit more difficult…), and maybe he’s got a plan to pay off the house and cash out in a few decades. If he’s self-employed, CRA lets him deduct 52 cents/km on a car that costs less than 10 cents/km in fuel… Or maybe he really just doesn’t value his time and isn’t good at math? Who knows? But people in Toronto with monster mortgages on crap properties shouldn’t be too quick to be smug.

#88 Calgary Rip Off on 05.30.19 at 12:23 pm

Yes sir as a health care worker here in Calgary the real estate remains insane.

Out at NW Symons Value there is a listing for 3.5$ million, house included, but the house isnt included on the listing, they assume it will be bulldozed as it is surrounded by condos. Sage Hill area. The current owners live in their delusion with their horses wandering the pasture of this overpriced land. They probably bought it back in 1960 for $180k and then worked at safeway, sat on their asses and now it is $3.5 million. They can sit on that price.

Elsewhere, in Hidden Valley Calgary the houses are priced at $500k. People really have no choice because the rentals are all a rip off too but people have to live somewhere.

Meanwhile city council has jacked mortgage tax up, think mine was $3,500 while Kenney has decided to cut this that and the other.

Alberta is really just like Novosibirsk Russia. Cold, overpriced, no resources, with delusional arrogance to match.

Not to sellers in Calgary: Your piece of shit properties are overpriced.

#89 EB on 05.30.19 at 12:48 pm

“…the investigation did not establish that members of the Trump Campaign conspired or coordinated with the Russian government in its election interference activities.”

From the introduction. Seems pretty cut and dried.

Remember “what if Donald Trump doesn’t accept the election results?” That was awesome.

Seems the big issue is obstruction of justice. – Garth

#90 NoName on 05.30.19 at 1:11 pm

@ That’s what she said…

I do rack up 60+ hrs in a car, commute + family thingy, i listen tons of podcasts and yes i did acquire some knowledge, but i has no time to apply it…

And another thing listening to something its hard to remember who sad what and especially where, i didnt met podcast app yet, that allows me to make markers and txt ot voce notes so i can us a start of some kind of research point or just reference.

Eventually all that aquired information becomes just blob in you head. At least in mine…

#91 NoName on 05.30.19 at 1:17 pm

Here she comes again, each time better than last.

https://www.instagram.com/tv/ByFp50OAtbc/?igshid=1j2y3hp8niut8

#92 MF on 05.30.19 at 1:18 pm

8 IHCTD9 on 05.30.19

Rare for government jobs to pay anywhere near enough.

They would be living hand to mouth for the whole time (seriously).

MF

#93 Deplorable Dude on 05.30.19 at 1:48 pm

“Seems the big issue is obstruction of justice. – Garth”

The Attorney General says not…..but that won’t stop the screeching from the Dems.

The whole concept of Obstruction of Justice will be shown to be laughable when the declassification happens.

You can’t obstruct a fake crime. Not because it wasn’t proven, but because the investigation was started on illegal and criminal bases.

Trump is guilty of obstructing a gunman trying to shoot him by knocking the gun out of his hand.

Pass the popcorn for the coming Sh!tshow of declassification….

#94 Shawn allen on 05.30.19 at 2:59 pm

West Edmonton mall – busy

“Spent” the morning at west Edmonton mall. In a word busy. Places like lululemon, simons, nespresso All busy and two of these are expensive places.

Tim Hortons lineup as usual

Without exception every place had great service and the staff were friendly and cheerful.

It seems many people in Edmonton still feeling great.

The economy rolls on.

#95 Shawn allen on 05.30.19 at 3:04 pm

a debt economy?

Some say it is a fake debt economy.

Debris not new. Stomping on connects wrote some 45 years ago “another sale we’ll buy it while it’s hot spending money we don’t got” debris nothing new urges ismore popular than ever.

It all works out for most people. Standards of living never better and will only improve.

#96 Mattl on 05.30.19 at 3:18 pm

#87 That’s All, She Wrote on 05.30.19 at 12:22 pm
“So your buddy commutes 3 hours each way including occasionally breaking down at the side of the road, and in his spare time fixes up the shit box…”

Geez, maybe don’t judge so quickly without more facts? You can get a nice spread in Mactier for 1/2 of what a 1 bedroom condo costs in Toronto. With the right audiobooks, you could get yourself a pretty good classical education in the car (should you wish; calculus might be a bit more difficult…), and maybe he’s got a plan to pay off the house and cash out in a few decades. If he’s self-employed, CRA lets him deduct 52 cents/km on a car that costs less than 10 cents/km in fuel… Or maybe he really just doesn’t value his time and isn’t good at math? Who knows? But people in Toronto with monster mortgages on crap properties shouldn’t be too quick to be smug.

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Don’t have a monster mortage or live in the GTA . It’s not smug to point out that 20 hours a week commuting, and all the costs that go with that, is pretty insane. I mean how do you even enjoy your house if you leave at 6am and get home at 8pm? All for 90k a year and a job mudding drywall?

To each their own I guess but there has to be a better way to get ahead.

#97 Shawn Allen on 05.30.19 at 5:18 pm

correction

Debt is not new. Stomping Tom Connors wrote some 45 years ago “another sale on something, we’ll buy it while it’s hot spending money we don’t got” debt is nothing new but it is more popular than ever.

Reminder to self – don’t post comments from a cell phone. With the iphone and the font size I use, the text does not wrap properly to see what I type.

#98 Hank Svazkowoski on 05.30.19 at 7:42 pm

To Stoph

I heard these points before that GIC’s interest is taxed at regular higher income tax rates and you can’t get capital gains, appreciation in tax savings and profits. Yes, this is true. Also, dividends are taxed at 30% to 50% lower than interest is at higher incomes.

These are all good points but I noticed in her post Tina, she is a business owner owing a flower shop. She has some great tax benefits and retirement benefits that she should or hopefully is taking advantage of like Individual Pension plan and other tax deductions, tax savings.

My brother-in-law is a CGA now for 10 years and always talks about this stuff. Also, TFSA’s are interest taxed at 0% or tax free compounding at even 3.24% will double that money in 21.5 or so years. RRSP’s can be withdrawn tax free or low taxes at certain lower income periods of one’s lives. It is possible that only a 15% to 20% over tax rate on all GIC interest on average near or at retirement.

GIC’s have a place for some people and others don’t need them or know they can do much better with their money.

#99 JB on 05.31.19 at 9:09 am

#38 Nonplused on 05.29.19 at 9:07 pm

The salvation for Pablo, seeing as he has already made the catastrophic mistake of buying a condo, is that as his condo falls in price so will the properties with “dirt” that he should have bought. Probably by more.

It’s more fun with statistics but if we can assume that the market is ergodic (a new fun word I learned that means the same in a small sample as on the whole or sort of like that) then a 10% fall in YVR would mean that say this $700,000 condo will shed $70,000, but a $1,400,000 house with dirt will shed $140,000. So Pablo will still be ahead, but only half as much as he could have been.

Anyway I am opposed to buying apartments unless you own the whole building and you are the landlord. If it looks like a hotel, you should rent it or own the whole thing (perhaps with partners) and rent it out. There are far too many problems that can come from joint ownership of something with a bunch of people you don’t know anything about. And remember that half those people are below average IQ, in a condo probably more because I doubt the IQ distribution is ergodic when it comes to condo owners. They won’t make good decisions. If the roof needs repair, they may vote against it because they don’t have the money. They may grow pot in their suite and inadvertently flood your unit. They may be running a brothel. Who knows what they are up to. Whatever it is, it probably isn’t something you’d let your teenager do in their room.

Never buy a property that isn’t surrounded on all 4 sides by a fence or at least a well defined property line, unless you own the whole thing and plan to rent it out.

But there is more good news for Pablo, the real estate market is not ergodic. Expensive properties rise in price more than cheap ones in a boom, and they fall further in a bust too. So a 10% overall reduction in house prices in YVR might mean the sought after houses with “dirt” might decline 20% while condos might hardly go down much at all. Premium properties only carry a premium when somebody has the money to pay that premium. High end restaurants go out of business all the time, but McDonald’s never will.
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I totally agree that unless you are the owner of an entire condo building never buy anything unless you have a fence on four sides or conversely where you are surrounded on four sides immediately with other cohabitants. Been there and done that, floods, pot, smelly food, noise, sketchy renters beside you, strata fees that never, never, never go down. Garths comments “Condo owners have zero control over escalating strata fees or special assessments. Property taxes are destined to rise with the carbon levy.” Is one of the best soundbites of what is to come. Every condo corp will have to deal with all of these legislative tax grabs and pass them on to the unwitting owner. It will be the older generations such as the Boomers that will take the hit as they are all downsizing to what they believe will be the easy life. They will be on fixed incomes and have to decide between cat food and paying for special assessments down the road. Good luck to all of you who believe a condo is an easy way of living. Unless you’ve been there before you have no idea how bad of a move it is. Just saying condos are the worst place to live!

#100 JB on 05.31.19 at 9:21 am

#56 The Great Gordonski on 05.30.19 at 2:39 am

Here we go, another fantastic opportunity to buy cheap courtesy of the Hate Trump media, moron retail investors, clueless hedge fund mgrs who hate Trump and ” Uncle Xie” , while seemed to have a half with advisor equivelant to Trudeau’s Axelrod/Butts , that’s right, total morons. China is collapsing in slightly faster than slow motion.

Normally we have a summer swoon in June. This hearkens back to the nineteenth century calender for school holidays during harvest and melting tundra . You’ve all heard it said ” Sell in May and Go Away”. But this year, fundamentals have been abandonded and the Trump Hate Media is republishing Chinese propaganda straight out of Chinese Workers Daily exacerbating a swoon into a perception meltdown. A sell off in the summer is normal. Fundamentals good, perception bad equals over sold conditions lead to an early buy season just days away instead of a month or two.

If this were climate related we’d say it’s as good as ” the world will end in twelve years” and the golly gosh repetition of a cute twelve year old Swedish girl making speeches on subjects she knows nothing about. Yes, it’s sad that children are being brainwashed with nonsense, but there is precedent in the anti- alcohol campaign of 1914. This level of cynicism is not new.

Uncle Xie is a chump if he believes threats of withholding export of rate Earth metals is his ace in the hole. Rare Earth Metas which are neither rare or in short supply globally. China has used non existent regulations to dirty mine it, we said “Go right ahead”. But that doesn’t mean current mines and on site facilities in North America can’t be producing in North America within 30 days. Mines larger than China’s production exist in California and Brazil. #3 is India.

The Trump Hate Media grabbed this straw and cried “We’ve finally got him”, but nope, you don’t. However the press went nuts on this item all the same and retail batters got flushed out. When you’re so scared that you need your pants watching MSNBC , that’s Mother Nature tweaking your survival instinct. A rational mind knows that blood in the street means added zeros in your bank account down the road.

https://www.ccn.com/china-ruthless-trade-war-dow-stock-market/amp
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Just remember that the Chinese hacked research and design data from Nortel for over ten years before it was discovered. Then Huawei undercut Nortel’s products by ½ the price. Customers would obviously choose the lower cost product. Their products were virtually identical in specifications and performance to the Nortel equipment. Nortel had its own downturn issues but this Chinese hacking contributed to the final undoing of the company. The Chinese do not innovate they copy, purloin and outright steal technologies. Your R&D costs can be substantive and theirs are zero. I wouldn’t purchase any Chinese technology from them for our infrastructure as we would really be purchasing our own creativity back.

#101 Glengarry Girl on 05.31.19 at 9:35 am

#98 Hank

Exactly correct that for some people the GIC Government Insured Savings strategy is appropriate. I also would like to stress, some of us are expecting a significant correction. I do not believing that all is well in the Economy. Because of my lack of confidence, it has made no sense to buy at or near the top of a bubble. In our case, we are residents of the US, therefore we are not taxed on our income at a high rate. We also can not take advantage of the Tax Savings vehicles in Ontario, I probably would have and rode the highs and lows if we lived there. When we lived in Ontario prior to 2008, we were self employed and used income splitting and all of the expenses allowed to keep us in a very low tax bracket. During that last tax filing year, with a low tax rate as we dissolved our business and liquidated, we cashed out our RSPs before the big 2008 downturn. We saw it coming then and we certainly feel it’s going to happen again very soon. GICs are where it’s at for the Nest Egg for those of us who believe we are going to experience another Economic Correction of 30%.

#102 John Mah on 05.31.19 at 12:40 pm

Glengarry Girl, I hope we don’t see another 30%+ downturn in stock markets like back in 2008 and possibly real estate markets like back in the 1990’s.

I don’t have all my money in stocks or stock market type investments but I do have about 40% in equity ETF’s mostly real estate, financials, energy, utilities, consumer staples.

The other 50% is in straight government bonds/GIC’s ladder of 3 to 20 years basically 5% maturing each year. These are paying around 3.6% to 4.2% with most bought at par or at $102-$103 range.

The other 10% is in just plain savings accounts, cashable GIC’s, 1 year GIC’s and 18 month GIC’s. These are getting around 2.5% to 2.75% right now.

The 40% portion of my stock market, equity investments has help boost my overall return to around 4.8% to 5.2% over the last 10 years since i started investing.

#103 Marco on 05.31.19 at 3:24 pm

DELETED

#104 Loon on 05.31.19 at 11:27 pm

They bought at 3x income, they get a pass. True, the lack of dirt is concerning.

#105 Felisha on 06.01.19 at 4:54 am

Nice article!