Suck. Blow. Repeat.

Here we go again? Arghhh. Say it ain’t so.

Well, we’ll see. But the latest market stats out of Canada’s two major-league delirious real estate markets certainly suggest that for a variety of reasons house lust is back.

The facts: In Toronto prices popped last month the most in about two years, which means houses are creeping back to their ridiculous 2017 record levels. The year/year gain was a little over 5% – the largest move in about 24 month. Listings fell as buyers moved back in, pushing the average price to within a used Kia of its highwater mark – back when governments panicked and started throwing on the brakes.

Sales are also bubbly. Ahead 22% in Toronto and 46% in Vancouver. The number of frenzied buyers is still far less than in 2016 when people made bid on houses after just driving by and realtors delighted in holding blind auctions, but the recovery is evident. Listings are down 14% which means these extra buyers are starting to fight each other, resulting in the highest values this year. GTA detached house sales jumped almost 30%.

Van prices are still 8% below year-ago levels, but the catch-up appears to be on. That’s despite the punishing anti-Chinese tax, the anti-Alberta spec tax, the empty house tax and the uber property tax tax.

YVR listings have started to swell again – up by about a third from August. The kids are back at it, as the sales-to-listings ratio for condos pops up to 22%. The composite price is sitting just below $991,000 and the level for detached homes is $1.4 million. BTW, detached sales jumped 46% from disastrous levels in the late summer of 2018.

So there ya go. The realtors are all happy and out leasing new Audis. Mortgage brokers have stopped sleeping on cardboard. Appraisers and home inspectors are no longer taking in laundry and running daycares. The Holy Grail – a balanced market – is on the horizon.

What happened?

Three things.

First, the cost of a mortgage has crashed. It’s ridiculous. Five-year money is available for 2.44% these days – when the inflation rate is 2%. That makes it almost free. You can bet when Mr. Socks is re-elected (maybe) and the carbon tax ticks higher over the next four years that the cost of living will tick along with it. Locking in today at these rates is a generational opportunity. But the flip side is what this is doing to real estate.

There’s an inverse correlation between the cost of a house and the price of a mortgage. As central banks knuckle under to slower economic growth and political demands, home loans might even dip further. It won’t last, but the impact is starting to be profound.

Second, the stress test is baked into buyer expectations. It was a big, hairy, scary thing a year ago. Now it’s a meh. Once again the market has adapted – as it did to the death of 30-year mortgages, the limit on CHMC loan amounts plus speculation and anti-foreigner taxes.

Third, politicians. And this damn election. In an orgy of giving, real estate has been front and centre. The Libs rolled out the shared-equity mortgage, then goosed it to $800,000. RRSP withdrawal limits for downpayments swelled. The Cons plan to bring back 30-year loans and would gut the stress test. Both parties are showering retrofit money on homeowners. The Dippers and Greens would also put a pony in every garage.

The meme is out there, bigly, that whomever forms the government, breaks, incentives and encouragements for home ownership will be a central policy plank. So on one hand politicians have been trying to tamp down a bubble asset and at the same time working hard to pump it. Suck & blow in its purest, most classic form.

Thus, sales and prices in the nutso markets are creeping back. The much needed correction has been sidelined for a while. Canadians will be nudged into swallowing additional dollops of debt. More and more disposable income will end up in interest payments. Real estate affordability will erode. More of the nation’s net worth will migrate into this one fixed asset. More borrowing. Less saving. Reduced mobility. A nation of nesting.

Until, of course, it all changes. Just hope you’re in the right spot then.

About the picture...

It’s arresting how many blog dogs end up in the weensy coastal fishing village where I bought a little stone castle to escape to whenever possible. Mark from Barrie, Ont. tracked me down this week. “Probably didn’t think of your bank as a tourist destination. Great job on the building,” he says. “Thinking of moving out…let me know when you are Mayor ha! ha!”

Too bad he didn’t come inside. We’d just baked cookies.

131 comments ↓

#1 Lost...but not leased on 10.03.19 at 6:40 pm

Yup….

I dig this blog

#2 crowdedelevatorfartz on 10.03.19 at 6:47 pm

Well, done Mark.
I drove past the front door this summer and the streets were jammed with cars and horse drawn carriages.
Kept going with the expectation I would be back….
Alas, didnt happen.
Next year.

#3 Alberta Ed on 10.03.19 at 6:48 pm

Hasn’t Sock Boy promised interest-free mortgages yet?

#4 Boombust on 10.03.19 at 6:49 pm

All nonsense. The only reason sales are up in Greater Vancouver is because prices are down; there is no stopping this correction, either.

As prices decline even more, buyers will sit on the sidelines waiting for more price drops; you have said as much many times.

Talk about a flip-flopper.

#5 Flop... on 10.03.19 at 6:49 pm

If you build it they will come.

Quite possibly leave empty after purchase, but nonetheless they came…

M45BC

Tens of thousands of homes are sitting vacant across Canada.

“An August report by Point2 Homes estimates there were 1.34 million empty and temporarily occupied homes in 2016 – the most recent data available”

https://www.ctvnews.ca/canada/tens-of-thousands-of-homes-are-sitting-vacant-across-canada-report-1.4621000

#6 conan on 10.03.19 at 6:50 pm

I guess you did not have to take down the Bank of Montreal signs. Also, is that the main entrance to the building?
Carrying in a box of beer is a two man job.

#7 Linda on 10.03.19 at 6:53 pm

Interesting that house sales are up. Saw a headline today that stated that Canucks are broke, stressed & have lost their appetite to spend. Can’t think of many commonly purchased things more expensive than real estate for the average Joe/Jane.

The upcoming election outcome is definitely of interest. Not holding out much hope of fiscal joy given the varied platforms, but since promises are often broken perhaps it won’t end up being as bad a fiscal slaughter as feared.

#8 TC on 10.03.19 at 6:53 pm

Just received a snail-mail letter from Mr Scheer. It looks like the Liberals are going to implement a sliding scale capital gains tax on the sale of primary residences if they get re-elected. I will definitely be voting for the Conservatives now!

#9 Debtslavecreator on 10.03.19 at 6:56 pm

The wild times seem to be back again
Several bright , highly educated people I’ve dealt with for years have, on a whim and no planning, decided to buy 7 figure houses firm and double the size of their mortgages at record low rates. No real need to buy a home. Financial cocaine cannot be resisted.
It’s horrible and most will never listen to prudent advice
Our housing and debt situation has become an embarrassing spectacle that WILL end very badly for most just as they hit pre retirement
I don’t feel sorry for anyone in 3-5 years time
Poor financial CHOICES require accountability

#10 april on 10.03.19 at 6:57 pm

Real estate on the uptick is a big lie..naturally by the real estate industry. … according to Ross Kay.. Howestreet.com Oct 1st.

#11 Cto on 10.03.19 at 6:58 pm

Nope, will not be in the right spot then. Been way too much pressure to buy investment property for way to long. They , wife’s family (real estate agents) have been totally vindicated, and me,…well….if anything I was at the very least logical. But logic has no place in Canada any more. They will finally force me to roll the dice and by a condo, likely some time in 2020. This will ensure at some point my hard earned life savings will be wasted in some distant crash, maybe 3 or 4 years out, when it really hurts.

#12 Andrewski on 10.03.19 at 7:00 pm

Mmmmm, cookies.

#13 Caledondave on 10.03.19 at 7:00 pm

You’re a bit late today. Were the cookies spiked?

Also first

#14 Long-Time Lurker on 10.03.19 at 7:03 pm

#72 long time lurker on 10.03.19 at 9:56 am
Almost everyone i know are at best breaking even on stock market, what happened in the past 2 years basically wiped out all the gains from 2016. Heck, my gain (or should i say recovery) in the past 2 months were all wiped out in the past week and a half. Mean while, Garth is making 20% again. Amazing.

>Hee hee. I got an impostor again. Now watch, Flop!

We’re all going to die! Climate change will kill us all in 12 years! It’s all over! Trump-Apocalypse was right!

#15 Cottingham a bargain on 10.03.19 at 7:07 pm

I guess we all needed to listen to nonno big rider all along, although I never doubted the fact

Uppa uppa uppa she goes as he says

#16 JohnnyAB on 10.03.19 at 7:08 pm

No, real estate won’t go down. It’s too big of an industry (that doesn’t produce anything) to be gutted. It will be sustained by the government just to make sure people don’t lose their jobs and they don’t kill the economy. The worst case scenario is prices that don’t go up for years, but that is improbable. So just buy houses, it’s still the best investment, and it has a bonus: it’s also a place to live.

#17 No Meaningful Correction on 10.03.19 at 7:12 pm

Prices need to drop more than 50% for any of this to make any sense. But Canada has pulled it off.

Skyrocketing housing prices in the major cities with no meaningful correction…none, not now not ever. I gave up on that meme 4 years ago after looking like a mule as a real estate bear for 10 years. Banks, politicians, media…you name it, won’t let it happen.

-no meaningful legislation or regulations to stop this freight train
-no real laws or controls on foreign buying
-no CRA to be found to nail tax cheat flippers and illicit international money laundering
-prime interest rates that will never go up past 2%…ever
-lax lending standards and CHMC stepping way outside its mandate for 15 years now
-no risk to the banking cartel, who print it all out of thin air
-highest per capita immigration in the developed world with our new Canadians needing a place to live (whether they rent or buy, demand is demand) with oh so few places that are worth living in when it comes to employment and opportunity, education, proximity to family etc
-Air BnB everywhere helping to make it all affordable
-25% of the total economy totally reliant on this Ponzi scheme
-delusional and greedy sellers completely unwilling to sell for anything less than top dollar and will wait out any feeble legislation designed to “cool” the market.

Need I go on?

The score:

Buyers since 1998…300% in most markets on the total purchase price with as little as 5% leveraged while keeping a roof over their head

Sideliners…S^&t sandwich with $2500-$5000 per month rental fees with no stability and expected to save hundreds of thousands of dollars to put toward an investment portfolio to show them real estate investors how silly and irresponsible they really are.

A true madhouse if there ever was one.

#18 MF on 10.03.19 at 7:14 pm

“But the latest market stats out of Canada’s two major-league delirious real estate markets certainly suggest that for a variety of reasons house lust is back.”

-House lust never left in Toronto.

Hope you listened to my advice (even though I didn’t) and bought that GTA condo.

House across the street from my parents sold. Asking price was around 1.2 million. DOM was about 3 months. Not sure what the selling price was. It’s smaller than my parents’ house, which they bought in 92′ with zero mortgage. This was before the central bank experiment we are dealing with today, of course.

hwy?

-Central banks are bluffing and we all know it. Rates can’t go anywhere meaningful. They screwed up and are out of options. Everyone knows it as well.
-Increased urbanization is continuing to accellerate.
-Canada, with its stable government and open society will always be attractive.

Of course it’s a joke and infuriating. This is why people are demanding there be action with respect to housing. It’s a complete joke.

MF

#19 Long-Time Lurker on 10.03.19 at 7:28 pm

#14 Long-Time Lurker on 10.03.19 at 7:03 pm
#72 long time lurker on 10.03.19 at 9:56 am
Almost everyone i know are at best breaking even on stock market, what happened in the past 2 years basically wiped out all the gains from 2016. Heck, my gain (or should i say recovery) in the past 2 months were all wiped out in the past week and a half. Mean while, Garth is making 20% again. Amazing.

>Hee hee. I got an impostor again. Now watch, Flop!

We’re all going to die! Climate change will kill us all in 12 years! It’s all over! Trump-Apocalypse was right!

That wasn’t me. Someone is impersonating me. I have an impostor! (Hee hee.)

#20 Jack Manning on 10.03.19 at 7:33 pm

New York City real estate is down 12% in 12 months. De Blasio socialist is going to kill New York’s future with more and higher taxes from property to who knows what.

Toronto will get its hit too just a matter of time.

#21 Cto on 10.03.19 at 7:33 pm

Since globalism started to gut western economies, governments and central banks have been doing everything in the book to use the real estate crutch to prop things up. They will keep doing this until the west is completely wasted.
I truly fear for my 9 year old son and the future of Canada and north america.

#22 Blackdog on 10.03.19 at 7:47 pm

@CaledonDave #13

You haven’t heard? Garth is into edibles.

#23 Flop... on 10.03.19 at 7:48 pm

When I started to look for market weakness in late 2016, there wasn’t much available in Vancouver for under 1.2 million, now there is lots.

All I observe now is a slow grind downwards.

Not only do prices continue to retreat, people down the bottom of the market continue to take losses, or delay the pain for another day.

Look at these guys down the bottom of the market.

If the market was just levelling off they would not be looking at a 200/300k loss.

Don’t bother telling me this is a one off, it’s not by a long shot.

Yeah, I know, never let the truth get in the way of a good story…

M45BC

Paid 1.38 May 2017

Original ask 1.69

Now asking 1.14

https://www.zolo.ca/vancouver-real-estate/2797-parker-street

#24 Tannhäuser Gatekeeper on 10.03.19 at 7:52 pm

So here’s the latest, from where the election will now be decided (sorry BC, again):

School janitors and support staff have been without a contract since the end of August. Just gave notice that they’ll walk out Monday. Teachers would legally have had to cross the line, and besides, they’ve got mortgages. So the boards said schools would be unsafe without support staff, and they’ll lock out the kids come Monday.

Teachers are also without a contract, though not yet in a legal strike position, so anything Dougie gives the support staff, teachers will want, too… setting the tone for public sector bargaining for the rest of Ford’s term. P.S. With the GM strike dragging on, it ain’t boomtown.

If the better part of half a million families suddenly need emergency daycare Monday and onward, and blame it on Ford, Trudeau is a shoo-in. Might not be fair, but there it is.

Dougie’s probably turned off his phone by now. Scheer seems to be creating enough of his own offensive and defensive turnovers that he sure didn’t need this. But that’s politics.

#25 Neo on 10.03.19 at 7:59 pm

What everyone is forgetting here is we haven’t had a real recession since the 90’s. 2008 was a blip by flooring interest rates a blowing this housing bubble in the first place. The initial correction in 1990 was exacerbated by the 90’s recession. We are overdue and in much worse shape across the board.

#26 Entrepreneur on 10.03.19 at 8:02 pm

I agree with #17 No Meaningful Correction…The proper thing to do was to stop this “real estate debt madness” was to correct the wrongdoings.

And here we are now, debt on debt, leaders handing out promises, so on, and how much more can reality take.

How much can the working citizen take, how much can earth take? Until they can’t, everyone and everything has a limit of abuse.

All parties should be at all the debates, English/French, no matter how good or slightly off their English/French is. When certain parties are left out of any debate how can Canadians make a decision.

Having just certain parties to participate says to me that the decision has been made up for us. Is this called “controlled democracy?”

#27 Miracle on 10.03.19 at 8:03 pm

They say its better the second time around, and what a great opportunity to sell out, and cash in the chips to move on.

#28 Nonplused on 10.03.19 at 8:05 pm

I personally am getting a little concerned by all of the government “creep” that is occurring. For example what constitutional right does the government have to tax an “empty” house differently than another house? With regular property taxes I sort of get it, the idea is everyone pays the same rate based on the value of their property. But now you have a tax that singles out certain property owners for additional taxes. Isn’t that discrimination? Or more like desperation?

It seems like governments at all levels in the west have given up any pretenses that government power should be limited and applied fairly to all citizens.

Take for example this proposal in the US to forgive student loans. What about people who never took student loans? What about people who went to community college so they didn’t have to borrow so much? Why should someone who went into the trades have to subsidize the frat parties of others? What incentive do people have to minimize their expenses if they are looking at debt forgiveness? Why not head to Florida for spring break even if you have to borrow the money? The idea conceptually is so flawed I can’t understand how it is even being discussed.

We already have huge problems in Canada because subsidies ruin the price discovery of everything, with the possible exception of dental care. Somehow or another dental care escaped the attention of the government, although I don’t think that will last because it is a great bone of contention among those who do not have insurance. And veterinary care. The government doesn’t seem to care about our dogs. Yet. But it seems as if the government will not rest until there is free dental care and education for everyone’s dogs and cats too. Who they expect to pay for all this is anyone’s guess because it won’t be me, I am going to be in school for the next 25 years living off student loan debt forgiveness.

#29 Shawn Allen on 10.03.19 at 8:09 pm

Defined Contribution Pension Plan MERs

Some have pointed out the MER are not that bad these days. But other issues would be a lack of investment choices. (You can’t go all in on Cannabis or be a stock jockey – which might be a good thin, but some would like the choice)

The high MERs have been discussed. Question: Are participants in these plans typically (or ever) prevented from switching their defined contribution plans to another provider and emptying it out every six months or year? I suppose that would have to be to a LIRA? These defined contribution plans are not RRSP, they are pension plans even though they are individual accounts?

I mean is the money literally trapped with the same plan administrator such as Sun Life until you change jobs or retire or what?

#30 tccontrarian on 10.03.19 at 8:13 pm

Given that this is dog-blog, I can safely say this (sorry Felix):

Any recent strength in the housing data in the hottest markets is (more than likely) a ‘dead-cat-bounce’ – a common feature in any bear market in its early stages. Stay tuned for the next phase…

tcc

#31 conan on 10.03.19 at 8:16 pm

(sorry BC, again): – Tannhäuser Gatekeeper

Its going to be over before Manitoba is counted.

Scheer will be done and the Cons will be looking for Harper 3.0. More likely they will come to their senses and just get back to the way they used be before Harper

#32 Sail away on 10.03.19 at 8:21 pm

Hey- who wants to be a landlord? Check out this tale of joy:

https://www.msn.com/en-ca/money/topstories/this-ns-landlord-is-out-thousands-from-one-tenant-—-and-hes-not-alone/ar-AAIdjtK?ocid=spartanntp

#33 ronh on 10.03.19 at 8:23 pm

Less savings? No one saves, they invest.

#34 Shirl Clarts on 10.03.19 at 8:25 pm

Until, of course, it all changes. Just hope you’re in the right spot then. – Garth

^^^^^^^^
Lower end of the price spectrum is in the right spot right now! Up goes Maple Ridge, Mission, Abbotsford, Chilliwack, the entire Fraser Valley. I predict a bunch of re-listed stuff to come back on the market in Spring 2020 with price increases.

Of course, all this just hurts the average family. The middle class is waging war with itself – you either play ball, or you’re out!

#35 Politico on 10.03.19 at 8:28 pm

I think most of us suspected for a long time that politics and what we consider to be elections were nothing more than a bad theater comedy. People of sound mind ask how after SNC, “people-kind”, and now blackface Turdeau has not been run out by his own party. Yet the MSM says his party is still leading in the poles, with him at the wheel. It makes no sense.

That is….

Until we look at the US.

The Bad Orange Man is not the first actor to be elected president, he’s the second. But all of the recent ones have seemed to be pretty good actors, especially Obama. Is this a clue? Is the whole thing a charade?

Let’s look at this impeachment thing. Certainly, according to the transcript, it does not appear that Trump did anything on the questionable phone call approaching what Trudeau did in the SNC affair. Yet no one is calling for Trudeau to be removed. No pictures of Trump in blackface have emerged from the depths. Yet Trudeau is getting a pass? Is this because they can’t find a better actor to replace him (remember Trudeau is also a trained actor. Yes, Canada and the US are both currently being “led” by people with acting experience. How many of the rest of them have received acting training? And don’t forget Greta is an actor too, and so are her parents. They could all be actors.)

Notice how so many of the “actors” in this play suddenly end up as CNN correspondents immediately after they leave “politics”?

It’s hard at this point not to conclude that the whole thing is a show designed to sell advertising. Trump is the most followed person on Twitter. There has been some talk of suspending his account, but is that merely a ruse to drive up traffic? Twitter will never suspend Trump no matter what outrageous thing he comes up with because talking about Trump and Trump himself is their bread and butter at this point. CNN as well. Trump single handedly saved CNN and indeed most of the MSM from oblivion at the hands of independent internet media.

From a certain point of view, it’s hard not to see the whole thing as a well organized charade. One big psy-op. But go ahead and vote. I think we have to. But we should not think we can vote the craziness to go away and sanity to be restored. That option is not being presented.

#36 conan on 10.03.19 at 8:48 pm

“it does not appear that Trump did anything on the questionable phone call approaching what Trudeau did in the SNC affair.” – Too much kool aid

Trump is Tony Soprano-ing another nation to interfere with the 2020 elections.

Trudeau thinks that a DPA is the way to go with SNC. Guess what ? He is right.

#37 Ace Goodheart on 10.03.19 at 8:51 pm

It may be that house prices in demand areas like Toronto and Vancouver can never reset back to match fundamentals.

There is a long line of cars that heads into Toronto each morning from the North.

The same long line heads downtown from the East.

From the West, there’s yet another one.

All these people would live in Toronto, if they could afford a house there.

Many are just building enough equity where they do live, so as to be able to qualify for the mortgage that lets them move closer.

After years of commuting, some of these folks can claim the prize of a house in the inner city.

The rest will keep dreaming (and waking at 5am for the three hour drive into work each day).

Prices are a function of demand.

#38 Keyboard Smasher - From the GTA Frontlines on 10.03.19 at 9:21 pm

I can attest to the return of FOMO to real estate in the GTA.

Circumstances have forced me to put down a minimal downpayment to try and secure some entry level 2-bedroom town on the fringes of Mississauga.

Put in at least 5 different bids on mediocre properties that in the Old World of brick and mortar would not classify as anything more than a shelter for the stable animals, and I was outbid on every single one, allegedly, by a wide margin, above asking.

The only way to win is to sit this out on a pile of cash.

There WILL be a correction that shakes the dumb belief that Canadians hold about RE, just like it did to Americans.

#39 Ronaldo on 10.03.19 at 9:23 pm

#35 Politico on 10.03.19 at 8:28 pm

Well said. Can’t agree more. And not even good actors at that. Bugs Bunny could do a better job. On with the show.

https://www.youtube.com/watch?v=pUtZVEpG5cM

#40 JohnnyAB on 10.03.19 at 9:29 pm

In 2016 a friend of mine made a bully offer on a house in Mississauga. I was, of course, believing in the bubbly market and that it should come down. He told me the words: “you’ll see, it will never come down. Too much for too many people to lose. It will go up, want it or not”. Since he was zero in economics and didn’t have any knowledge how markets work, I thought he is making a big mistake. He bought his house for 750k, now the same kind of houses there are sold for 1100-1300k. Who is laughing now? And yes, he had a downpayment of 100k. If he sells his house with 1200k minus another 100k for realtor fees and land transfer tax, he would make 350k in after tax money. That’s a 350% in 3 years. Any markets beating that? Oh and wait, that’s not the end yet, because houses still go up! For me to win the bet we had, his house should now go 30% down. Anyone still believing for a 30% decline in houses?

No sale, no profits. Is he selling? – Garth

#41 Blackdog on 10.03.19 at 9:33 pm

Beware investing in RESPs. If you do, you may find yourself with highly educated progeny, who are convinced that man-made climate change is real. Thanks Garth. WTF? I have two daughters, one with a biomedical science degree, awaiting MCAT results with plans to pursue a medical degree and the other finishing off a biology degree, both who actually believe in this stuff.

#42 oh bouy on 10.03.19 at 9:35 pm

@#31 conan on 10.03.19 at 8:16 pm
(sorry BC, again): – Tannhäuser Gatekeeper

Its going to be over before Manitoba is counted.

Scheer will be done and the Cons will be looking for Harper 3.0. More likely they will come to their senses and just get back to the way they used be before Harper
________________________________________

really this should be an easy win for the cons.
definitely be a rebuild should they lose.

#43 oh bouy on 10.03.19 at 9:39 pm

@#32 Sail away on 10.03.19 at 8:21 pm
Hey- who wants to be a landlord? Check out this tale of joy:

https://www.msn.com/en-ca/money/topstories/this-ns-landlord-is-out-thousands-from-one-tenant-—-and-hes-not-alone/ar-AAIdjtK?ocid=spartanntp
////////////////////////////////////

few years back I considered investing in a couple rental properties in the parkdale/roncey part of TO. Lets just say i’m incredibly grateful I didn’t go there. the potential profit just isn’t with dealing with people.

#44 Ronaldo on 10.03.19 at 9:47 pm

#29 Shawn Allen

I mean is the money literally trapped with the same plan administrator such as Sun Life until you change jobs or retire or what?
—————————————————————–
Shawn, since you mentioned Sun Life I was wondering if you could give me your opinion of the Sun Life Granite Enhanced Income fund compared to the PH&N Balanced Fund. I realize there are many many other funds out there that one could choose and etf’s as well but if you had to choose between one of these two, which would you pick and why? Much appreciated.

https://www.morningstar.ca/ca/report/fund/performance.aspx?t=0P0000XUIX&[email protected],[email protected],[email protected]&lang=en-CA
https://www.morningstar.ca/ca/report/fund/performance.aspx?t=0P0000717M

#45 What I Think I May Know on 10.03.19 at 9:49 pm

Still surprised by GTA house prices? Why? GTA House prices will always continue to track in an upward direction. There may be a few blips now and then, but in 10 years’ time, prices will be much, much higher than present. That is guaranteed. Why? For many reasons, but basically, the government wants it that way.

#46 PastThePeak on 10.03.19 at 9:59 pm

I love the smell of napalm in the morning…

In this case, napalm = extreme debt.

The results will be about the same…

#47 Asterix1 on 10.03.19 at 10:10 pm

Prices are not going up in Toronto and Vancouver. Trusting the ridiculous industry “benchmark” is not sane. Prices are dropping in pretty much all categories. You get a lot more of real estate for your dollar than 2017. That won’t change for a while.

It’s still downhill from here. It’s a bubble. It already deflated and is not done.

#48 PastThePeak on 10.03.19 at 10:11 pm

#21 Cto on 10.03.19 at 7:33 pm

Since globalism started to gut western economies, governments and central banks have been doing everything in the book to use the real estate crutch to prop things up.
++++++++++++++++++++++++++++++++++++++++++++++++++

Central banks cut rates deeply, and kept them so low for almost a couple decades, in a desperate (and flawed) attempt to try to keep the economies going so the financial system could keep expanding.

The bankers care about derivatives far more that real estate.

RE inflation is a by production – not the main target.

#49 leebow on 10.03.19 at 10:11 pm

How will this unwind? Inflation? Crash? Direct subsidy to the borrowers or lenders? It’s so tempting to go and borrow a good chunk.

The crash scenario is terrifying in its unpredictability. A cat 5 hurricane? Easy peasy. I’m sure Garth bought a shingle company in Lunenburg and was kinda impartial about the outcomes.

#50 PastThePeak on 10.03.19 at 10:13 pm

“Housing can only go up” (says almost everyone on this blog)

..someone should check in with the Australians, who also thought the same thing…

#51 oh bouy on 10.03.19 at 10:21 pm

@#50 PastThePeak on 10.03.19 at 10:13 pm
“Housing can only go up” (says almost everyone on this blog)

..someone should check in with the Australians, who also thought the same thing…
///////////////////////////////////////

ah no.
definitely more glass half empty types congregating here.

#52 dosouth on 10.03.19 at 10:25 pm

Guess you are right, depends where you live and the market you are in but the Okanagan not doing so good…

Okanagan condo sales SCREECH to a halt!!

#53 SoggyShorts on 10.03.19 at 10:31 pm

#1 Flop… on 10.02.19 at 4:26 pm
Flop’s Public Service Announcement.

I have been using Turmeric to treat a couple of my ailments, in particular, inflamed gums and arthritis, and I was just researching something and in light of a recent post regarding Alzheimers, I will just leave this here in case it helps someone out…

M45BC

Curcumin May Be Useful in Preventing and Treating Alzheimer’s Disease.
**************************
Just a quick google search shows this to be just another snake oil placebo fad.

Remember, before sharing things on the internet always do a quick search for “Thing I just learned debunked”

All of the hype is based on a few studies done on 20 to 50 patients that showed promise. The only large-scale study (600 patients)showed zero benefits.

Large study:
https://www.consumerreports.org/dietary-supplements/does-turmeric-really-reduce-inflammation/

Science:
https://blogs.sciencemag.org/pipeline/archives/2017/01/12/curcumin-will-waste-your-time

Layman’s terms:
https://medium.com/@gidmk/the-bitter-truth-about-turmeric-8cf9256e73c5

#54 Steven Rowlandson on 10.03.19 at 10:32 pm

“Well, we’ll see. But the latest market stats out of Canada’s two major-league delirious real estate markets certainly suggest that for a variety of reasons house lust is back.”

Given that people will tend to do what is allowed and is done by their peers especially if it is seen to be seriously profitable you should expect the current trend to continue until it is unprofitable , not allowed and utterly disastrous. It would take something extreme to change peoples minds sufficiently to make a difference.

As for alternatives to real estate as an investment what incentive could other investment markets offer to drive money out of the real estate market and into something else that is safe, and seriously profitable enough to make real estate look as bad as the bubonic plague and a dose of HIV in the eyes of the public?

#55 Metro Van Observer on 10.03.19 at 10:38 pm

What might be a catalyst for higher interest rates? Sure, central banks control short-term overnight rates, but what about longer duration gov’t bonds? Is it possible that some sort of monetary crisis leads to a loss of confidence in the gov’t bond market, leading to higher rates?

Surely there are implications to zero bound or even negative interest rates? Likewise for unsustainable deficits that are projected to run on and on. This is an unprecedented era in monetary (experimental) policy. Or does Japan already provide us a glimpse into our futures?

Garth, any thoughts? Or perhaps worthy of a future post. Would love your thoughts on the topic and what the implications might be in the medium to long-term.

#56 Comrade on 10.03.19 at 10:52 pm

Without intention to take any sides here, but the way real estate boards report their data is questionably ethical, or not so questionable.
So after reading this post I went read the news. So the big headline: Vancouver area home sales jump 46.3%, then you read further, that is from the same month last year, than you read more, and apparently it is just a below average month on 10 year average, 1.7 below average. Then you read further, and the price drop even with the frankonumber is 7.3% from last year, and 0.3 from last month. And most of the homes are actually condos.
So there was one positive number for the real estate cartel, out of last month stats, and that was worth the headline.

I am not saying the prices will go up or down, but is professional and matter of fact reporting too much to ask for?

#57 IHCTD9 on 10.03.19 at 10:56 pm

Just let it fly. 2 mil for a gta shack, 3 mil, 4 mil. As long as money is basically free, and politicians want to get elected even if the mushroom cloud climbs a mile high – just keep jacking it.

Make sure they’re all insured mortgages, tested for the ability to make the payments – even when their terms are up – and full recourse loans. Whip it till they’re so jacked up on Xanax you could drive a garbage truck through their living room and they wouldn’t even flinch.

This is how we fix the problem. When it blows, and it will; the financial devastation will send shockwaves through two or three generations. It’ll be so bad, no one will have the heart to say “told you so”.

In the meantime, Boomers have the sweet option to retire with millions worth of millennial cash. I humbly suggest they realize those gains before Gen Z comes along in force. I’m probably not the only Gen X’er teaching their Z kids to steer well clear of the 7 figure metro shacks.

#58 Eks dee Siple on 10.03.19 at 11:08 pm

Classic bull-trap, yes?

#59 Politico on 10.03.19 at 11:15 pm

#36 conan on 10.03.19 at 8:48 pm

“it does not appear that Trump did anything on the questionable phone call approaching what Trudeau did in the SNC affair.” – Too much kool aid

Trump is Tony Soprano-ing another nation to interfere with the 2020 elections.

Have you read the transcript? There was no strong-arm tactics, no quid pro quo, and a dozen people were on the line so it would have been a really stupid time to pull a stunt like that, even for Trump. So far there is no “there” there. The “whistle-blower report is about as close to the transcript as Adam Shiff’s rant was.

Corruption in the Ukraine is a big issue though, and it is pretty suspicious that Hunter Biden was making $600,000 a year on the board of a Ukrainian company he knew nothing about while his father Joe was controlling foreign aid payments. There may be nothing there either, but I actually know something about the natural gas business and I didn’t get offered a sweet board position.

The blow back from all of this is likely to be the end of Biden’s run. Even if there was no corruption, it just looks too bad.

Further facts include the fact that the Ukraine and the US have a mutual assistance treaty for criminal matters that was signed by Bill Clinton. Thus, it is actually Trump’s duty to ensure the appropriate investigations are occurring.

And everyone from New York talks like Tony Soprano. I’ve been there.

On the other hand what Trudeau did was shut down an investigation into some of his political donors, which is different than requesting one, and then fire 2 of his cabinet ministers for attempting to do their jobs. Much worse, even if both are bad.

Requesting an investigation into things that might need investigating is what lawmakers and law enforcement are supposed to do. The only problem arises when the outcome of that investigation is manipulated. That’s what Trudeau did, not Trump.

—————

The real purpose of the impeachment of Trump is to provide more theater for the news networks. We already have the transcript. The conversation was conducted in-front of a number of people. If there was a “there” there, we would know. What the Dems are really after is Trump’s tax returns (which he is not legally obliged to provide, in fact the framers of the constitution would be horrified at the prospect of people having to involuntarily provide such information other than to the IRS who is sworn to secrecy unless something criminal happened).

What will happen when we get Trump’s tax returns? We’ll find out he is not as rich as he claims, but still rich enough to have his own plane. We’ll find out that his businesses do not make as much money as he claims, but that he got paid well to do The Apprentice. We’ll find out that he had several audits by the IRS and complied with all of them. That’s about it.

#60 #38 and #40 on 10.03.19 at 11:18 pm

post the addresses so we can see for ourselves.

#61 Stan Brooks on 10.04.19 at 12:11 am

It seems a shack or a glass condo in crappy Mississauga is more valuable than a castle in France these days.

And of course housing will keep appreciating.

They call it ‘affordable’ when a substandard house costs 1.5-2 millions.

Hamilton (!?) shacks fetch 600-700 k. Soon to be a million bucks.

Poor delusional sheeple.
Poor young hoping for a normal life in a mental institution.
Poor non retiring boomers.

Rich banks.

#62 Smoking Man on 10.04.19 at 1:21 am

Canada is dommed. Sheer is a globalist teet sucker.. Mad Max is owned by Soros, 80 precent sure. The other parties. Owned by a Brilliant forex trader. Not as good as me.

If you have any wealth at all. Make it disappear, NOW. Plead poverty. Let govt save you.

These communist animals are coming for everything..

#63 Damifino on 10.04.19 at 1:36 am

#42 oh bouy

Its going to be over before Manitoba is counted.
————————————

Unless… unless… the unpredictable Bloc Quebecois has a spectacular night on October 21 at the expense of the Grits while the Tories manage a lesser version of the same thing in Ontario. Perhaps if the voters there have Kathleen Wynne’s gong show nearer the front of their memories than Doug Ford’s current dumpster fire.

And maybe, if just a few Atlantic constituencies (all of them currently red with embarrassment) decide to switch back to blue… well…

Then, it’s entirely possible it might all come down to BC to put the Tory ball through the hoop, at least in a minority sense.

Or else do the same for Mr Socks. I’d be a while getting over it, but I’m sure I’d be my jovial old self by Christmas. Perhaps the advent of legalized weed would ease me through four more years of Liberal ineptitude.

#64 Anna on 10.04.19 at 3:58 am

Garth, I’m wondering, could some of the bump in sales/prices reflect that stocks have been near all-time highs and people are cashing out and using the proceeds as downpayments?

#65 Stan Brooks on 10.04.19 at 5:46 am

#57 IHCTD9 on 10.03.19 at 10:56 pm

Spot on.
Of course it is not money that is based on savings but some ‘magic’ stuff.

Current valuations are based on ultra-uber-leverage and borrowing from the future, a classical Ponzi scheme which no matter of the ‘insurance’ will collapse by itself when it runs out of idiots to buy into it/something difficult in this place with abundance of idiots but ultimately unavoidable.

The collateral damage with the destruction of currency and decline in real standard of living is quickly becoming a reality.

Inflation will be a killer as well as taxation.
It already is but wait for what is to come.

The best hedge in my mind is to move away asap with any preserved capital as when the thingy unravels it will be smelly. There will be many candidates for your money and there will be nothing you can to to protect yourself.

1 bedroom condo for 3-4 k monthly rent in crappy GTA is kind of a given.
Poor idiots.

#66 crazyfox on 10.04.19 at 5:57 am

Damn elections is right Garth. So much human nature. Solid assessment as per usual btw, color me impressed, a not uncommon reaction if I may say so and likely don’t say it enough to wit, I am a solid admirer of your work and I’ve learned a great deal from you. Thanks!

just wondering (not sure why really) what are central bankers going to do if an actual recession hits, what can they do. Go negative and give money away? Do they know what they are doing? Dry question for a dry economy…. zigs zags what’s that, blues cruise?

https://www.youtube.com/watch?v=4jEnY6nhSxg

#67 Eat the Babies on 10.04.19 at 6:47 am

Climate Crazies are right. We must ” Eat the Babies”. The Greta Globalist Hate propaganda has the left and kids convinced that it’s hopeless. The Earth will die within months.

Al Gore etc might have got just what they asked for, without ever imagining mass insanity would arise.

#68 Steven Rowlandson on 10.04.19 at 7:52 am

Re#62 “Canada is doomed. Sheer is a globalist teat sucker..”
So are the rest of them and if they were not they would not be allowed on the ballot or if possible in Canada.
Politically Canada is a closed shop just like many of its allies.

#69 crowdedelevatorfartz on 10.04.19 at 7:54 am

@#25 Neo
“What everyone is forgetting here is we haven’t had a real recession since the 90’s. 2008 was a blip ”
++++

Depending on where you lived…. the 90’s were nothing.
The mid 70’s were fugly,
Early to mid 80’s really fugly ( interest rates at record highs .. 18% comes to mind).
Yep its been at least a generation since people were unemployed, broke, and desperate…ahhh my Boomer youth.

#70 Stan Brooks on 10.04.19 at 8:13 am

You can’t achieve a sound economy through constant lies.

https://www.huffingtonpost.ca/2012/04/30/canada-bank-bailout_n_1466219.html

Dissolve the parasitic Boc and CMHC.

#71 MF on 10.04.19 at 8:16 am

#57 IHCTD9 on 10.03.19 at

The oldest millennials like me are nearing 40 now.

Almost everyone I know has already made money of real estate here.

It’s time for you, and a lot of others on here, to adjust your idea of “millennials” which is very dated.

Btw, I’ve said it a few times and I’ll say it again. Gen Z is 100% the same as the millennials. No different. Again no difference. Zero. Donut. Bagel.

MF

#72 MF on 10.04.19 at 8:28 am

68 Steven Rowlandson on 10.04.19 at 7

-Don’t like a politician in 2019? Call him a “globalist”.
No thought required. No effort. Easy peasy.

65 Stan Brooks on 10.04.19 at 5:46 am

-Yes please move away. Best thing you can do for the gta. Also please move away from this blog as well.

Smoking Man on 10.04.19 at 1:21 am

-used to be a decent poster. Now troll. Again, don’t like a politician’s views? Just call him a “globalist”.

Also, some American living ex pat in “commie California” calling out Canada is hilarious.

MF

#73 Stan Brooks on 10.04.19 at 8:38 am

DELETED

#74 Captain Uppa on 10.04.19 at 8:50 am

I won’t say it. We all know what direction things are headed.

Thanks Canada!

#75 Ponzius Pilatus on 10.04.19 at 8:53 am

Herr Scheerer has dual Citizenship.
Should we care?

#76 n1tro on 10.04.19 at 8:53 am

#69 crowdedelevatorfartz on 10.04.19 at 7:54 am
@#25 Neo
“What everyone is forgetting here is we haven’t had a real recession since the 90’s. 2008 was a blip ”
++++

Depending on where you lived…. the 90’s were nothing.
The mid 70’s were fugly,
Early to mid 80’s really fugly ( interest rates at record highs .. 18% comes to mind).
————-
Hmmm….was still with the wet nurse during that time so I’ll take your word for it. 18% interest rates? That would mean diversified portfolio back then was making +20%….gold…+50% to 100%? Can’t wait.

#77 Dharma Bum on 10.04.19 at 9:01 am

#41 Blackdog

I have two daughters, one with a biomedical science degree, awaiting MCAT results with plans to pursue a medical degree and the other finishing off a biology degree, both who actually believe in this stuff.
——————————————————————-

The climate change “emergency” hysteria continues. The false narrative of impending doom is perpetuated by charlatans with evil political motives. The naive and ignorant sop it all up like so many sponges. Suckers.

https://www.snopes.com/fact-check/nations-vanish-global-warming/

https://www.europereloaded.com/500-climate-scientists-write-to-un-there-is-no-climate-emergency/

Climate change rhetoric is like religion. The dumber and more paranoid one is, the more they believe.

#78 Ponzius Pilatus on 10.04.19 at 9:05 am

IHTC
I think there’s too much labeling going on these days.
In the good old days we had:
Teenagers, Middle agers and Old agers.
And only two genders:
Male and female.
They tell us, it’s better now. More inclusive.
Not so sure.
There could be inter generational and/or inter gender wars coming.

#79 oh bouy on 10.04.19 at 9:11 am

@#75 Ponzius Pilatus on 10.04.19 at 8:53 am
Herr Scheerer has dual Citizenship.
Should we care?

______________________________-

No, but the hypocrisy is strong in all our politicians these days.

#80 Ponzius Pilatus on 10.04.19 at 9:11 am

#76 n1tro on 10.04.19 at 8:53 am
#69 crowdedelevatorfartz on 10.04.19 at 7:54 am
@#25 Neo
“What everyone is forgetting here is we haven’t had a real recession since the 90’s. 2008 was a blip ”
++++

Depending on where you lived…. the 90’s were nothing.
The mid 70’s were fugly,
Early to mid 80’s really fugly ( interest rates at record highs .. 18% comes to mind).
————-
Hmmm….was still with the wet nurse during that time so I’ll take your word for it. 18% interest rates? That would mean diversified portfolio back then was making +20%….gold…+50% to 100%? Can’t wait.
—————
Yep.
Did not have much money, but my father in law made a killing with his GICs.
Was not much fun, though, when you had a mortgage.

#81 Sail Away on 10.04.19 at 9:26 am

#75 Ponzius Pilatus on 10.04.19 at 8:53 am

Herr Scheerer has dual Citizenship.
Should we care?

———————————–

Well, it would be pretty funny if he won the Prime Ministership, then relocated to Hawaii halfway through.

#82 Stan Brooks on 10.04.19 at 9:33 am

Deflation in Ontario.

Only 14 % increase in car insurance premiums year over year.

https://ca.finance.yahoo.com/news/model-driver-break-car-insurance-140004662.html

Coming with an advice on how to ‘mitigate it’, guess that goes as 2 % under CPI?

#83 Phylis on 10.04.19 at 9:59 am

MF is feeling old. Soon to be taking the blame. Doesn’t like the stereo type that was earned. Wants you to redefine them. Time will make you better.

#84 crowdedelevatorfartz on 10.04.19 at 10:00 am

@#80 Ponzie Pilot
“Was not much fun, though, when you had a mortgage.”
+++

Yeah,
A friend had a car loan in 1983 .
22.75%…..from a major bank.
And that was what killed consumer spending.

#85 CCToronto on 10.04.19 at 10:05 am

I’m a long time blog dog. We just got out of Toronto – sold our tiny midtown row house with no parking and traded it for a 3000 square footer in a gorgeous town on Lake Ontario (we are right near the beach). More space for our kids, great schools, and just an hour train ride from downtown for meetings, baseball games, etc. We bought way back in 2006 with 25% down – I honestly don’t know how young families are managing to live in this city. Prices are high but rents for a family sized space in our Toronto hood are in the $4000-$5000 a month range.

#86 Jesse on 10.04.19 at 10:07 am

Third, this is 2019. We’re in the midst of an AI, 5G, autonomous-driving, drone-delivery, online revolution which is making society more efficient, productive and profitable, leading to the creation of omnibus conglomerates like Amazon which were unfathomable a decade ago. None of this is going away. (And it’s also responsible for populism, Trump, Brexit, nationalism and trade tensions which result when traditional employment vanishes. But these forces are destined to lose.)
******************************

This is one of Garth’s most interesting pieces of information, our bright future in tech is sure to accelerate the economy and stock market gains….however, we’ve seen the pitch forks come out recently against the Silicon Valley…how will this play out? Could a cyberpunk future emerge, where the gap between the rich and poor is widened and cemented for good? Time will tell, but the people are angry and the backlash against globalization has been fueling the hurricane of nationalism growing all across the west. Where are we going?

#87 Mattl on 10.04.19 at 10:12 am

#23 Flop… on 10.03.19 at 7:48 pm
When I started to look for market weakness in late 2016, there wasn’t much available in Vancouver for under 1.2 million, now there is lots.

All I observe now is a slow grind downwards.

Not only do prices continue to retreat, people down the bottom of the market continue to take losses, or delay the pain for another day.

Look at these guys down the bottom of the market.

If the market was just levelling off they would not be looking at a 200/300k loss.

Don’t bother telling me this is a one off, it’s not by a long shot.

Yeah, I know, never let the truth get in the way of a good story…

M45BC

Paid 1.38 May 2017

Original ask 1.69

Now asking 1.14

https://www.zolo.ca/vancouver-real-estate/2797-parker-street

—————————————————————–

Not much of a big reveal here. Market stats say prices are down around 10% from peak. These guys bought at peak and are asking around 15% below what they paid.

I don’t think Garth is suggesting that the market is back at peak yet, just that the numbers show that the market may be turning. Assuming that house doesn’t have any major issues, I suspect it moves fairly fast at that price.

#88 Mattl on 10.04.19 at 10:23 am

#29 Shawn Allen on 10.03.19 at 8:09 pm
Defined Contribution Pension Plan MERs

Some have pointed out the MER are not that bad these days. But other issues would be a lack of investment choices. (You can’t go all in on Cannabis or be a stock jockey – which might be a good thin, but some would like the choice)

The high MERs have been discussed. Question: Are participants in these plans typically (or ever) prevented from switching their defined contribution plans to another provider and emptying it out every six months or year? I suppose that would have to be to a LIRA? These defined contribution plans are not RRSP, they are pension plans even though they are individual accounts?

I mean is the money literally trapped with the same plan administrator such as Sun Life until you change jobs or retire or what?

—————————————————————

I can move money out of my Sun Life DC plan once every 12 months. And I do, although the MER’s are pretty reasonable – 80bps – and the returns have been strong – 15% ytd and 8.4% 3 year.

The issue, as you have highlighted , is choice. We have 8 funds to choose from, but the quality is pretty good and since we get a 6% match and I can move the money, I don’t lose much sleep over my mix

#89 Renter's Revenge! on 10.04.19 at 10:25 am

#53 SoggyShorts on 10.03.19 at 10:31 pm

Remember, before sharing things on the internet always do a quick search for “Thing I just learned debunked”

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

Thanks for the tip.

I just Googled “Thing I just learned debunked, debunked”.

Turns out you can’t use Google to reliably debunk things you just learned.

#90 Sail Away on 10.04.19 at 10:30 am

#75 Ponzius Pilatus on 10.04.19 at 8:53 am

Herr Scheerer has dual Citizenship.
Should we care?

———————————

If only Trump was a dual citizen. Then he could be President and Prime Minister simultaneously.

#91 Tannhäuser Gatekeeper on 10.04.19 at 10:35 am

Suggested reading:
https://www.collaborativefund.com/blog/three-big-things-the-most-important-forces-shaping-the-world/

#92 Captain Uppa on 10.04.19 at 10:36 am

#85 CCToronto on 10.04.19 at 10:05 am

“Prices are high but rents for a family sized space in our Toronto hood are in the $4000-$5000 a month range.”

——————————————————————

Holy Crap!

You should have just kept your town and rented it out. Having put 25% down on a 2006 price and 13 years of built equity, you’d be looking at great monthly cash flow as rental unit.

Then you take that cash flow and invest in a 60/40. Bob’s your uncle.

#93 Mattl on 10.04.19 at 10:36 am

#52 dosouth on 10.03.19 at 10:25 pm
Guess you are right, depends where you live and the market you are in but the Okanagan not doing so good…

Okanagan condo sales SCREECH to a halt!!

————————————————————–

Uhhhh, did you read the article or just the headline? Here is what it says in the article:

“The number of apartment and condominium sales dropped six per cent in September in Kelowna, with only 88 transactions. This brought sales numbers in line with the 10-year average and left the situation teetering between a buyers’ and balanced market”

Hardly a bloodbath, that is about 6 less apartments sold and in line with 10 year average lol. Things are slowing in Kelowna like they do every winter – the market is hyper seasonal.

#94 Sail Away on 10.04.19 at 10:40 am

#71 MF on 10.04.19 at 8:16 am
#57 IHCTD9

Btw, I’ve said it a few times and I’ll say it again. Gen Z is 100% the same as the millennials. No different. Again no difference. Zero. Donut. Bagel.

——————————-

Sure it is, MF. Wait until GenZ blames you, specifically, for ‘Stealing our future!!’

Accept your position and get your retorts ready. Hopefully better than Smokey’s.

#95 MF on 10.04.19 at 11:01 am

75 Ponzius Pilatus on 10.04.19 at 8:53

Only in the sense that he will be the next Prime Minister.

Other than that none story.

MF

#96 MF on 10.04.19 at 11:05 am

94 Sail Away on 10.04.19 at 10:40 am

Generations always blame each other. Nothing new there.

83 Phylis on 10.04.19 at 9:59 am

My boomer parents don’t match the boomer stereo type either. That’s how I know they are bull excrement.

MF

#97 Tony on 10.04.19 at 11:07 am

A Bank of Canada interest rate cut looks like a certainty (90+ percent) after the U.S. jobs report and the Canadian PMI. Invest accordingly. The jobs numbers due October 11th will change nothing.

#98 Shawn Allen on 10.04.19 at 11:08 am

Defined Contribution Plan MERs and lack of choice

#88 Mattl on 10.04.19 at 10:23 am responded:

I can move money out of my Sun Life DC plan once every 12 months. And I do, although the MER’s are pretty reasonable – 80bps – and the returns have been strong – 15% ytd and 8.4% 3 year.

The issue, as you have highlighted , is choice. We have 8 funds to choose from, but the quality is pretty good and since we get a 6% match and I can move the money, I don’t lose much sleep over my mix

************************
You have a good deal there at 6% match. You can move the money every 12 months. So, in theory you can overcome the lack of choice.

If the money is moved out does it go to a self-directed LIRA locked in retirement account? If so do you get to reopen the same LIRA each year so you don’t tend up with a multiple small LIRAs for each year? How practical is it to move the money out?

But if the MER is reasonable and you are not a skilled stock jockey, you are right to leave it there.

#99 Flop... on 10.04.19 at 11:13 am

#89 Renter’s Revenge! on 10.04.19 at 10:25 am
#53 SoggyShorts on 10.03.19 at 10:31 pm

Remember, before sharing things on the internet always do a quick search for “Thing I just learned debunked”

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

Thanks for the tip.

I just Googled “Thing I just learned debunked, debunked”.

Turns out you can’t use Google to reliably debunk things you just learned

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

From the guys own report.

“While the researchers tested how turmeric affects only one type of inflammation in a specific population, the findings still might “help temper the enthusiasm around curcumin,” Patrick says.”

I guess I’ve got the other type of inflammation since they only tested for one and then ruled it out.

That’s good enough effort for me.

I don’t waste my money on the capsules, I just use the spice daily and I get some benefits.

I don’t know I just saw something and passed it on thinking I might be able to help someone out by drawing attention to it so they can do their own research.

I’m just a Southern Son who will never be as smart as you Northern Hemisphere guys.

Still mesmerized how you guys get your poop to go down to toilet in the opposite direction…

M45BC

#100 Shawn Allen on 10.04.19 at 11:15 am

Which Fund is best?

Shawn, since you mentioned Sun Life I was wondering if you could give me your opinion of the Sun Life Granite Enhanced Income fund compared to the PH&N Balanced Fund.

***********************
Ronaldo, no I can’t help you there. The whole concept of enhanced income I vaguely understand to be a specialty area that I don’t know much about (covered calls? return of capital?) . And, it does not sound very similar at all to a balanced fund. Apples and oranges. In any case I would not look into individual funds for you. I did not click the links. I think it is pretty clear that Garth advises balanced funds.

#101 Penny Henny on 10.04.19 at 11:40 am

Hey Garth a suggestion if I might.
Using the power of your almighty blog, how about the readers contribute some info for an unbiased survey on how the election might turn.
What I propose is that each blog dog report on which party appears to have the most signs in their riding and who the incumbent party is.
For example

Niagara Central
incumbent- Liberal
most signs-
Conservative
NDP
Green/Liberals tie

#102 Eggheadman on 10.04.19 at 11:41 am

Eggheadman
Midtown
0 points
·
2 days ago
So this story has been published every year for the last 10 years. The only person that actually still believes it is Garth “Been telling you the market is overvalued for 12 years” Turner.

#103 n1tro on 10.04.19 at 11:51 am

#71 MF on 10.04.19 at 8:16 am
#57 IHCTD9

Btw, I’ve said it a few times and I’ll say it again. Gen Z is 100% the same as the millennials. No different. Again no difference. Zero. Donut. Bagel.
——————
Gen Z are the spawn of Gen X. We are a different breed.

#104 conan on 10.04.19 at 11:55 am

#59 Politico on 10.03.19 at 11:15 pm

Again with Biden’s son……. what about Trump’s kids?

Anyway…

NANOS: LPC 36.3, CPC 34.3, NDP 13.8, GP 8.2, PPC 1.2

Time to close the Kool Aid stand.

#105 Must Be A Joke on 10.04.19 at 12:03 pm

Why would anyone take a principal residence with equity to rent out?

#106 DON on 10.04.19 at 12:13 pm

#25 Neo on 10.03.19 at 7:59 pm

What everyone is forgetting here is we haven’t had a real recession since the 90’s. 2008 was a blip by flooring interest rates a blowing this housing bubble in the first place. The initial correction in 1990 was exacerbated by the 90’s recession. We are overdue and in much worse shape across the board.
******************

Most will have to experience it before they believe it. Until then, the real estate industry needs to pump it up on one months sales. Couldn’t be the rush into the shared equity plan could it.

Funny they only mentioned Vancouver and Toronto.

Meanwhile less realtors in Vancouver (article came out today).

Logic is hard pressed against self interest. Feels like the early 80s all over again.

#107 DON on 10.04.19 at 12:25 pm

#93 Mattl on 10.04.19 at 10:36 am

#52 dosouth on 10.03.19 at 10:25 pm
Guess you are right, depends where you live and the market you are in but the Okanagan not doing so good…

Okanagan condo sales SCREECH to a halt!!

————————————————————–

Uhhhh, did you read the article or just the headline? Here is what it says in the article:

“The number of apartment and condominium sales dropped six per cent in September in Kelowna, with only 88 transactions. This brought sales numbers in line with the 10-year average and left the situation teetering between a buyers’ and balanced market”

Hardly a bloodbath, that is about 6 less apartments sold and in line with 10 year average lol. Things are slowing in Kelowna like they do every winter – the market is hyper seasonal.
******************

The main take away is that conditions have changed and as Garth stated 5 years ago or so, ‘the Great Canadian Real Estate SLOW Melt.

Besides the global slowdown, lack of affordability, big debt and now Forestry jobs losses throughout BC will affect the market even with the seasonal adjustment. The fact that things aren’t the same as they were 5 years ago should concern people a tad. No gloom and doom…just families not able to hang on. It’s a slow trickle until all the dominoes are melting. They will be another uptick in terms of housing inf 30 yr mortgages get approved…but who is left to buy at those prices. There is not an endless amount of buyers.

The NASDAQ has a problem breaking over 8000, it teeter totters back and forth. The next affordable tech wave is not upon us.

#108 Yukon Elvis on 10.04.19 at 12:26 pm

Why is it that nobody is promising to spend a few bucks to fix the broken ?

In Nova Scotia, emergency department closures are becoming the new normal.
For most of this week, emergency service at All Saints Springhill Hospital in Springhill, N.S., is shut down during daytime hours. Hospital authorities blame a chronic shortage of doctors.
https://globalnews.ca/news/5986086/nova-scotia-doctor-shortage-emergency-room-closures/

There are 2,700 people living in Springhill NS. How many villages and towns with that population base in Ontario or BC have their own full-service hospitals? – Garth

#109 IHCTD9 on 10.04.19 at 12:28 pm

#71 MF on 10.04.19 at 8:16 am
#57 IHCTD9 on 10.03.19 at

The oldest millennials like me are nearing 40 now.

Almost everyone I know has already made money of real estate here.

It’s time for you, and a lot of others on here, to adjust your idea of “millennials” which is very dated.

Btw, I’ve said it a few times and I’ll say it again. Gen Z is 100% the same as the millennials. No different. Again no difference. Zero. Donut. Bagel.

MF
___

Those Mils you mention that made some money on RE? They’re the exact ones who paid the Boomers their 500-1000+% appreciation. I’d bet most of the Boomer home owners have still yet to sell.

Time will tell on Gen Z, you may end up being right – but not about my Gen Z’s :).

#110 Ponzius Pilatus on 10.04.19 at 12:39 pm

#91 Tannhäuser Gatekeeper on 10.04.19 at 10:35 am
Suggested reading:
https://www.collaborativefund.com/blog/three-big-things-the-most-important-forces-shaping-the-world/
—————-
You had me curious.
But then I came to the projected population chart.
The same old, same old linear projection.
No one knows what the world population will look like in 30 years.
After 70 years of relative stability (at least in the Western World) we’re again are entering uncertain times.
And, no, technology will not guide us through it.
Only wise people will.

#111 Flop... on 10.04.19 at 12:41 pm

Conan.

Trudeau just lectured Scheer about being honest applying for the job of Canadian Prime Minister.

After all the stuff that dude has been up to in his past.

I can forgive him for brownface if he promises to forgive me for being a dual citizen.

Trudeau just jumped the shark.

Apologies.

Trudeau just jumped the canoe…

M45BC

#112 James on 10.04.19 at 12:50 pm

#72 MF on 10.04.19 at 8:28 am

68 Steven Rowlandson on 10.04.19 at 7

-Don’t like a politician in 2019? Call him a “globalist”.
No thought required. No effort. Easy peasy.

65 Stan Brooks on 10.04.19 at 5:46 am

-Yes please move away. Best thing you can do for the gta. Also please move away from this blog as well.

Smoking Man on 10.04.19 at 1:21 am

-used to be a decent poster. Now troll. Again, don’t like a politician’s views? Just call him a “globalist”.

Also, some American living ex pat in “commie California” calling out Canada is hilarious.

MF
____________________________________________
Still no rebuttal Old Man?
Canada is dommed?
BTW It is spelled “Doomed.”

#169 James on 10.01.19 at 12:17 pm
#128 MF on 10.01.19 at 7:06 am
#120 Smoking Man on 10.01.19 at 12:46 am

-Yeah and GM is closing plants in the US of A.
Trump has made a few big errors:
1) the omni bill (or whatever it was called) made T2’s spending look cheap. And it occured at the same time tax revenues were cut deeply. 21 Trillion reasons why that was not a smart move and will come to back to bite “people with money” very shortly.
2) Pressuring the Fed for rate cuts was beyond stupid. Low interest rates have warped and messed with the world economy. The medicine was being administered and Trump (who campaigned the Fed left rates too low for too long) should have kept his mouth shut. Dumb move.
3) the Democrats have become far more left leaning than even our Liberals, whom 3/10 Canadians vote for. The Dems are 50% of your population down there. When you say “they are coming for your money” you might mean your fellow American.
MF
___________________________________________
The Old Smoking Man is a bogus wannabe American. He is an impostor that asserts the USA is the greatest nation in the entire world. He is entitled to his own delusional diatribes and we all recognize that he is just stirring the pot from his encampment in Newport Center where the homeless issue has become such a national embarrassment that he cannot talk about that as an issue. All we hear from this miserable excuse for an Old Man is how we Canadians are doomed. Go get your American citizenship Old Man and then come back here so we can tell you to Piss off Yankee and mind your own God Damn business. He blows hard but all that comes out is foul odorous gas.

PS Old Man I lived there and I know what a shit hole your part of the USA is like, for that matter

https://www.latimes.com/socal/daily-pilot/news/tn-dpt-me-newport-beach-homeless-tents-20190711-story.html

https://patch.com/california/newportbeach/orange-countys-homeless-crisis-update

https://voiceofoc.org/2019/04/7000-homeless-people-in-oc-is-a-wake-up-call-experts-say/

#113 Neo on 10.04.19 at 1:08 pm

#69 crowdedelevatorfartz on 10.04.19 at 7:54 am
@#25 Neo
“What everyone is forgetting here is we haven’t had a real recession since the 90’s. 2008 was a blip ”
++++

Depending on where you lived…. the 90’s were nothing.
The mid 70’s were fugly,
Early to mid 80’s really fugly ( interest rates at record highs .. 18% comes to mind).
Yep its been at least a generation since people were unemployed, broke, and desperate…ahhh my Boomer youth.

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

This is the problem. Boomers are the last cohort to experience a recession as adults. Gen X and Millennials have no clue for the most part. Yet Boomers think it’s different this time and are feeding this bubble providing down payments to kids who can’t afford the homes they are buying otherwise.

#114 Yukon Elvis on 10.04.19 at 1:17 pm

There are 2,700 people living in Springhill NS. How many villages and towns with that population base in Ontario or BC have their own full-service hospitals? – Garth
………………………

Hopeful patients lined up for hours outside a Metro Vancouver practice on Wednesday – a clear indication of how desperately the province needs more family physicians.
A Coquitlam, B.C. practice allows those seeking doctors to line up on the first week of each month to become a patient at the Foothills Medical Clinic.
It’s the only time the doctor’s office accepts new patients. As one of the few facilities in the area allowing intakes right now, it’s a popular offer.Some potential patients arrived at the strip mall as early as 6 a.m. Wednesday and waited until 8. While the wait just to sign up may seem long, it’s nothing compared to the months, or in some cases, years, they’ve been waiting to get a general practitioner.
Many in line told CTV News they or their loved ones have illnesses that require regular visits and consistent care. They believe the situation is getting worse.
“I was told yesterday that it’s going to be intake today, and (to) come before 8 o’clock, so I was here at quarter to 8 and found over 50 people standing in the line,” patient Kasia Cison said.
“My parents are elderly and our family doctor retired last October, and we’ve been trying to get a family doctor since then,” said Camila Alvaraz, who joined the line at 7 a.m.
Alvaraz said in her native Peru, long waits are normal, but when her family came to Canada they thought service would be better.
While Canada has universal health care, many patients struggle to find a family doctor in B.C.
https://bc.ctvnews.ca/it-s-a-crisis-patients-in-need-of-family-doctor-wait-hours-in-line-1.4000350

#115 SoggyShorts on 10.04.19 at 1:36 pm

#99 Flop… on 10.04.19 at 11:13 am
#89 Renter’s Revenge! on 10.04.19 at 10:25 am
#53 SoggyShorts on 10.03.19 at 10:31 pm

I guess I’ve got the other type of inflammation since they only tested for one and then ruled it out.

That’s good enough effort for me.
****************************
You may have missed the part where it’s explained that turmeric isn’t what is even supposed to maybe help with inflammation, it’s the curcumin in turmeric which is about 3%. However, it’s not easily absorbed into the bloodstream so you’re only getting about 1/4 of that.
Even in the tiny trials with ~40 people that showed some promise with curcumin they were using 2-6 grams of curcumin with piperine to help absorb it.

So unless you are consuming a pound of turmeric a day…

I don’t want to beat up on whatever placebo is working for someone but I really really hate the Dr. Oz/Homeopathic scam artist industry. I get that everyone can do their own research and not waste money on garbage sugar pills- but not everyone has the time to do so.

#116 The Totally Unbiased, Highly Intelligent, Rational Observer on 10.04.19 at 1:39 pm

The Sad State of Canadian Politics in October 2019

Liberal Party of Canada — Pure evil.

Conservative Party of Canada — Claims to be good but will support evil to try to get elected.

New Democratic Party — Evil that, thankfully, cannot seem to get elected.

People’s Party of Canada — The LESSER evil.

#117 Penny Henny on 10.04.19 at 1:53 pm

Re Liberals Federal Carbon Charge

My home is heated by natural gas supplied by enbridge.
My latest gas bill now has a separate line item for the Federal Carbon Charge.
I am charged 9.63 cents/cubic metre for the natural gas itself.
The charge for the Federal Carbon Tax is 3.91 cents/ cubic metre.

Doing the math, 3.91/9.63 means the Federal Carbon Tax is 40.6% of the cost of the natural gas itself.
And this will only be going UP every year under a Liberal Government.
How long before the tax is over 100%?

#118 Cottingham a bargain on 10.04.19 at 1:54 pm

No sale, no profits. Is he selling? – Garth

Does that logic also apply to balanced and diversified financial portfolios?

You often cite that staying invested and rebalancing is best course of action but without actually selling no profits right ?

Did you miss all the posts about rebalancing? Try that with a bungalow. – Garth

#119 Cottingham a bargain on 10.04.19 at 2:20 pm

Cottingham a bargain on 10.04.19 at 1:54 pm
No sale, no profits. Is he selling? – Garth

Does that logic also apply to balanced and diversified financial portfolios?

You often cite that staying invested and rebalancing is best course of action but without actually selling no profits right ?

Did you miss all the posts about rebalancing? Try that with a bungalow. – Garth

———————-

Love the idea of rebalancing and no did not miss your point at all.

With a bungalow in an equity gain position, a simple rebalancing is accomplished with a line of credit extracted to invest in a leveraged portfolio of financial assets as you often cite or , heaven forbid as I have done , another real estate property .

#120 Sold Out on 10.04.19 at 2:23 pm

Hey Flop,

At the risk of sounding like Gwyneth Paltrow:

You may wish to look into the role of probiotics in oral health. Studies are finding that the bacterium that causes gingivitis also plays a role in the formation of plaques associated with Alzheimer’s disease. You seem to be suffering from systemic inflammation, and are rightly trying to minimize it via non-drug treatments. If you are Googling medical information, the first thing you search for should be “Google Scholar”; it’s a much more trustworthy compilation of scientific research. Whether you employ a jade egg/carrot/ninja shuriken whilst perusing the internet is strictly your business.

#121 James on 10.04.19 at 2:25 pm

Hey Old Smoking Man just heard on the news that your coming home.
I had an L-1A when I was in soCal for many years and even that highly coveted work visa is threatened. Your lowly TN-1 is easy to wipe off the map. It looks like your füh·rer Her Trump has it out for your old saggy ass. Sorry you Old wannabe American.

https://windsorstar.com/news/local-news/u-s-officials-clamping-down-on-work-permits-for-canadians

#122 James on 10.04.19 at 2:27 pm

#117 Penny Henny on 10.04.19 at 1:53 pm

Re Liberals Federal Carbon Charge

My home is heated by natural gas supplied by enbridge.
My latest gas bill now has a separate line item for the Federal Carbon Charge.
I am charged 9.63 cents/cubic metre for the natural gas itself.
The charge for the Federal Carbon Tax is 3.91 cents/ cubic metre.

Doing the math, 3.91/9.63 means the Federal Carbon Tax is 40.6% of the cost of the natural gas itself.
And this will only be going UP every year under a Liberal Government.
How long before the tax is over 100%?
__________________________________________
The liberal loving disciples of T2 are dumb as shit. Wait until they all have to eat cat food, then the grumbling will start, but alas it will be too late.
That is why you have to always read the fine print fully!

#123 James on 10.04.19 at 2:30 pm

#111 Flop… on 10.04.19 at 12:41 pm

Conan.

Trudeau just lectured Scheer about being honest applying for the job of Canadian Prime Minister.

After all the stuff that dude has been up to in his past.

I can forgive him for brownface if he promises to forgive me for being a dual citizen.

Trudeau just jumped the shark.

Apologies.

Trudeau just jumped the canoe…

M45BC
_________________________________________
Wow Trudeau is sure as hell “the pot calling the kettle blackface”
Just could not resist!

#124 MF on 10.04.19 at 2:38 pm

#109 IHCTD9 on 10.04.19 at 12:28 pm

No buying from boomers. Or at least less than you think.

The oldest Mils (me) are nearing 40 now. A lot of us bought houses and condos 10-15 years ago and have risen the fake rise in housing prices upward.

As always, the most radical are the most vocal. This idea that we are all radical leftists who smoke pot all day while living in our parents basement is a fringe minority IMO.

MF

#125 Secret Detection on 10.04.19 at 2:47 pm

#121 James – The USA and Canada have an ongoing operation of sharing results. They are photographing car plates through computer systems at all border crossings. In this way, can ascertain who is spending too much time in either country for illegal stays, and will cancel all entitlements if caught, including residency status.

#126 MF on 10.04.19 at 2:58 pm

Just heard some guy on the news talking about Alberta separatism.

“we are mistreated”, “equalization payments”, “seat counts” etc.

Then he starts talking about being ignored by “central Canadians”. I assume that means us in Ontario?

I’m sympathetic to the plight of Albertans. Always have been. Nobody I know has ever uttered anything bad about Alberta. Everyone I know is pro oil and business, and grateful for Albertans and Albertan oil. But I guess that doesn’t matter when you have victim mentality level 9000 and are blaming everyone else for your problems. Does he remember Ontario going blue in 2011? Does he think the Liberal platform speaks for all Canadians? Or that everyone in a riding where a liberal candidate is elected thinks the same way?

I don’t know but lets hope the pipeline issue is resolved soon enough and the province can flourish again.

MF

#127 Sail Away on 10.04.19 at 3:11 pm

Flop,

Recent Harvard medical studies show a clear link between chronic inflammation and excess body fat. So.. the fix seems to not be putting more crap in the body, but less. Much less. And exercise more.

Sedendary lifestyle and excess food cause the majority of 1st world health problems.

#128 Harry on 10.04.19 at 3:19 pm

Wealth Confiscation
My crystal ball sees governments increasing looking to wealth confiscation through taxation as a means to fiance their reckless spending.
Please write serious piece on preserving capital through the use of overseas tax havens.

#129 usually suspect on 10.04.19 at 3:24 pm

#117 Penny Henny on 10.04.19 at 1:53 pm
Re Liberals Federal Carbon Charge

My home is heated by natural gas supplied by enbridge.
My latest gas bill now has a separate line item for the Federal Carbon Charge.
I am charged 9.63 cents/cubic metre for the natural gas itself.
The charge for the Federal Carbon Tax is 3.91 cents/ cubic metre.

Doing the math, 3.91/9.63 means the Federal Carbon Tax is 40.6% of the cost of the natural gas itself.
And this will only be going UP every year under a Liberal Government.
How long before the tax is over 100%?

—-

Check out oil burner stoves. Use stuff in jugs from past oil changes. You can even run old paint through it. Lots of BTUs.

The funny thing is, forest fires kick out hundreds of millions of tons of carbon every year. Emissions from a city’s natural gas use are like a wildfire going up an extra gulch. But the tax is supposed to be going to an impoverished equatorial region where they want to convert from old school jungle burning to strip mining for lithium car batteries.

Sarcasm aside, ten years from now, when the rational thinking gen Z’s start to take over, we will realize this was a confusing period of nature angst. We want to ensure a better habitat and maximize our efficiencies. The industrial age existed and there’s no going back. So now what can we do? Tax is not the answer. Better choices and systems are. Innovations are going to come from backyard inventors and problem solvers wih the goal to minimize impact and reduce costs.

Natural gas is part of the transition from complex hydrocarbons to self sustained energy harvesting. This has to involve a combination of energy sources, no one source can completely replace the energy payload of combustible fuels, yet.

I know, i have two properies. One is completely off grid, with solar and geothermal. The other is a combination of hydro/gas/solar. This message is being posted from a 24 volt system. It took some work to set up. Now I have to charge my tablet, made of plastic and lithium and little factory bits.

#130 David Prokop on 10.04.19 at 5:04 pm

I hate to say it but real estate in GTA is coming back. Just check bungol.ca, properties are selling fast and like before close or even above asking price. I saw multiple properties that could not sell last year and were taken off the market now getting re-listed and they all sold at the the price that couldn’t sell last year. Definitely RE not dead which is surprising because when bubble bursts it usually lasts long time. Maybe it’s just a dead cat bounce, but who knows

#131 Mike on 10.04.19 at 9:56 pm

Wasn’t Tom Mulcair of the NDP a dual Canadian and French citizen. I read somewhere that Elizabeth May is or was American. Michael Ignatieff lived and worked in the United States for decades.