Sharing it

Four years ago four babes in their 60s and 70s moved in together in Port Perry – rural Ontario. That broke the rules in a municipality where unrelated people are not supposed to co-own and co-inhabit a single-family dwelling.

The gals protested mightily and eventually won the blessing of the provincial human rights office. The local government backed off and the ‘Golden Girls’ became celebs as champions of affordable seniors’ housing. Three years later the Ontario government adopted a private member’s bill preventing discrimination against people who want real estate co-ownership. Bill 69’s short title is The Golden Girls Act. And now it’s law. “Solving Ontario’s housing crisis is going to take new and innovative ideas,” says Steve Clark, the housing minister.

The women – Louise Bardswich, Beverly Brown, Sandy McCully and Martha Casson – are currently the poster hotties on the cover of Ontario’s newly-minted ‘Co-owning a home’ guide  which enthusiastically promotes alternatives to one family-one house.

Meanwhile in BC, co-ownership is hot stuff, especially since huge CU Vancity started offering its weird ‘Mixer Mortgage’ allowing up to six people – not formally related to each other by family or romance – to finance property. There are now realtors specializing in co-ownership, and a breathless new media story appears every few months. The latest features a $1.8 million butt-ugly house which, “may be out of reach for a solo buyer. But it’s already been divided into four suites. If four people or families split the cost, each would be paying $400,000 and $500,000 for a home of their own in one of the city’s most desirable areas.”

The Mixer Mortgage, by the way, can offer multiple owners different loan amounts, varying rates, amortizations and cover a portion of ownership ranging down to 2%. But they all have the one property as security. Buyers can be roomies, buddies, brothers or strangers. Says the company:

“We have the ability to split mortgage terms. For example, if two people or two couples are taking on half a million dollars of debt, and $200,000 is earmarked for one person and $300,000 is earmarked for the other, those people could potentially pick different terms, different rates and different amortizations that are more applicable to them. So, while everyone who owns the property is still responsible for the debt, they can earmark their own debt and pick their own repayment terms.”

In Ontario, by the way, the lenders of choice for co-ownership seem to DUCA credit union and Meridian, whose ‘Family + Friends’ mortgage allows for up to four owners. So far the Big Six banks have eschewed this, but with passage of Bill 69 that could change.

Okay, so you round up four or six people and together buy a property that none of you could ever dream of purchasing individually. You live there and pay the mortgage like rent, then make a tax-free killing as the property escalates in value. What could possibly go wrong?

As it turns out, lots.

Married or common-law owners form economic unions. They bring responsibilities. That’s what family law is all about. Inescapable obligations, whether for whelping or real estate. But unrelated co-owners are, well, unrelated. The BFF you bought a house with could go broke, lose her job, split for Nevada, get married or die. An unrelated owner could simply stop paying their portion of the mortgage, or property tax, utilities, insurance or maintenance. This could potentially trigger a mortgage default, foreclosure, power of sale and misery. It could force a sale of the property, legal bills, an unwelcome move and lost equity. The risks are palpable.

So, don’t even think about co-ownership without (a) understanding everything financial about your potential co-owners. There are no secrets allowed. Net worth, ex-spouses, income, job security, gambling debts, assets, addictions – everything should be on the table. Then, (b) you need a good lawyer and a great partnership agreement. It should set out the space each person occupies, responsibilities, division of expenses and, above all, procedures for dealing with unexpected events. Like job loss. Or (in the case of the Golden Girls) a visit from Mr. Reaper.

The agreement also needs to deal with dispute resolution. There will probably be some. Maybe a lot. And what happens if one person just wants out? Will there be a financial crisis if the remaining owners cannot find a replacement? Remember it’s easy to put a few names on title – and lenders are happy to do that because each person individually could be responsible for 100% of the debt – but it’s hard to make co-ownership smooth and workable.

So, careful. This has the potential to bite you. And it breaks one of the cardinal GreaterFool rules: never buy real estate with someone you don’t sleep with. Pooch excluded.

$     $     $

Well, they did it.

T2 & Chateau Bill have started to dismantle the mortgage stress test in a giant concession to moisters – and about the worst possible thing they could do to affordability.  On Tuesday afternoon the announcement came that the qualifying rate will be dropped by about a third of a point – from 5.19% down to 4.89%, using a new formula.

“This adjustment to the stress test will allow it to be more representative of the mortgage rates offered by lenders and more responsive to market conditions,” says the government. Maybe so – after all, five-year loans are available at less than 2.9%. But what the move means is more borrowing and more price pressure.

Says mortgage broker and blogger Rob McLister:

Will a looser stress test stoke the market? Absolutely.

While it might boost buying power by just 3% or less (depending on what the new benchmark turns out to be, come April 6), the psychological boost will be material. Homebuyersparticularly younger buyersare already worried about prices running away from them, given the double-digit gains of the last 12 months. News of an easier mortgage stress test won’t help.

And just in time for rutting season.

Railway blockade? What railway blockade?

 

153 comments ↓

#1 paulo on 02.18.20 at 3:43 pm

My observations over many years indicate that “partnerships” are ships that are prone to sinking.

Stick with Garth on this one if you are not sleeping with the significant partner in a joint real estate deal dont go there.

#2 Randy Thomas on 02.18.20 at 3:44 pm

Neat.

#3 The Wet One on 02.18.20 at 4:08 pm

Sound advice Garth.

My guess is most people who do this will ignore it and lawyers will reap the benefits. They always do.

Pay me now or pay me more later. I’ve seen it enough times to know that you pay early and up front to avoid the problems rather that pay later to deal with things after the problems have become fully grown and unmanageable.

Good times.

#4 Dave on 02.18.20 at 4:08 pm

A lot of people are saying that there will be a mass exodus from China once the quarantine is lifted.

Is a large quantity of Chinese coming to Canada and reigniting the real estate market in Metro Vancouver?

#5 BlogDog123 on 02.18.20 at 4:11 pm

Mr. $300+/yr Paikin already did a story on TVO Agenda about this one.

They gotta have a clear written agreement and dispute resolution progress in case one decides to go lazy, leaving syringes and tinfoil in the sink and invite her crack smoking ex husband over all the time…

#6 Piano_Man87 on 02.18.20 at 4:14 pm

I once bought a CD with a classmate of mine when I was in high school. He talked me into it. I only kind of wanted it, but he really wanted it. We were going to trade ownership of it. He would get it one week, I would get it the other week.

When we got the CD, he took it and I never saw it again.

Co-ownership sucks.

#7 Emile on 02.18.20 at 4:14 pm

Did you see the new request for comment from osfi on the mortgage qualification rate?

https://www.osfi-bsif.gc.ca/Eng/fi-if/in-ai/Pages/bnchrt-let.aspx

#8 Mean Gene on 02.18.20 at 4:19 pm

Yet these simple folk wouldn’t borrow a few hundred grand and buy stocks in a REIT…. too risky.

#9 SimplyPut7 on 02.18.20 at 4:27 pm

I thought on the TV show, Blanche owned the house and the other ladies were renting from her.

Either way, co-owning sounds like a recipe for disaster, what happens when one person needs to sell their share of the house because the cohabitation isn’t working the way they intended or they need the money to go into a retirement home when they are no longer able to care for themselves?

#10 Alistair McLaughlin on 02.18.20 at 4:29 pm

Co-ownership of a single family dwelling is like buying a condo where the condo board lives inside your house!

#11 Victoria on 02.18.20 at 4:30 pm

I love my friends and family dearly and we could go on a holiday together and have a great time. I would love to live down the street or even in a semi – especially if we found ourselves alone in later years. Living together? Nah! I can’t imagine how badly this is going to end for people.

#12 FreeBird hi on 02.18.20 at 4:30 pm

I would say all points to consider prior to signing on to multiple ownership apply to more traditional co-ownership incl what deal your SO made with new/future in-laws for downpayment. Find out if you’re also on legal hook for unknown debts in case of split. Some also share a rental space (all pay rent or with one as owner.) I think this can be a win/win albeit with same careful pre vetting. I also know of adult single kids living with widowed/single grand/parents as covered on blog. One way to disclose/check financial picture both history and current is agree to each getting a credit history/score. Easily done online in minutes. We do ours once a year to check for errors (found a few.) Good to do a month before applying for large amounts of credit, ie mortgage or car loan. As always choose your partners in anything carefully. Avoid stress and chaos and save relations.

#13 JacqueShellacque on 02.18.20 at 4:50 pm

I hope the walls have been soundproofed, what with all the stuff Blanche gets up to.

#14 running on 02.18.20 at 4:52 pm

Absolutely ridiculous proposition.

Must be running out of qualified buyers.

This is the kind of scheme you would generally see at the end of a cycle.

#15 wallflower on 02.18.20 at 4:53 pm

Insurance – whatsup?
I cannot find an underwriter for my wholly owned home in which I occasionally have a boarder who uses a single bedroom and bathroom. Only some will underwrite with the stipulation there is no coverage for any issues associated with the boarder.
How will all these unrelated people get insurance for the home?

#16 Howard on 02.18.20 at 5:02 pm

It seems the new AirBnB rules and a flood of new supply have had an effect on Toronto rents.

From RFD : https://forums.redflagdeals.com/current-416-rental-demand-2355857/

One landlord says prospective tenant responses to a condo ad on Kijiji have plummeted compared to 4 years ago.

#17 Shawn Allen on 02.18.20 at 5:03 pm

Bombardier – Not that anyone cares

I listened to the conference call and read the press release. Not a single word or question on whether the Transportation division is being sold at a gain or a loss. They say they got 12 times EBIT and so it does appear a good price. It may well be a gain, but if so would they not say so?

They talk of net debt. There is really no such thing. If the will end up with say $5 bullion in cash and $7.5 billion in debt, they claim that is $2.5 billion net debt.

The misleading implication being that they could use all that cash to pay down the debt by $5 billion. The reality is that much of that cash would be needed in the business. Some of it comes from customer deposits on aircraft. Most manufacturing businesses need cash to operate.

A debt of $7.5 billion is a debt of $7.5 billion. Let them forecast not the net debt but the actual debt after they pay some down.

Any time you hear a company talk about net debt being lower than actual debt, be suspicious of what they are trying to say.

I am 100% certain that Bombardier will still have negative net worth on the balance sheet. That is liabilities will still be greater than assets after this deal closes. Yet they talk of having a strong balance sheet after the deal closes. It is a laughable claim.

The company is solvent in terms of cash flows but can be described as technically bankrupt according to its own balance sheet.

I do not trust this company and would be very leery to invest in even its debt or preferred shares and would not even think about buying its common shares.

#18 BobC on 02.18.20 at 5:05 pm

Everybody is so negative. This is a great idea for single boomers. Better yet,
I’m thinking a small 6 or 8 condo building with a couple of store fronts on the first floor to offset the common area fees. Heck, throw in a common area with small bar and kitchen for get togethers.
The legalities can always be worked out.
Why does everybody expect the worst?

#19 Shawn Allen on 02.18.20 at 5:09 pm

No More Pipelines

And no crude by rail either

Certain parties are against pipelines and against oil by rail. It now seems clear they have merely to illegally block the rail line to block the oil. Is Alberta toast? What fool would invest a dime in added oil sands production? The proposed Teck Resources Mine will never go ahead in this environment.

#20 the ryguy - In cabo on 02.18.20 at 5:28 pm

My observations over many years indicate that “partnerships” are ships that are prone to sinking.
———————————————————–
Yup, this is almost word for word what a lawyer once told me. After university a friend and I opened a nightclub. Place took off and did really well. 5 years later we were both kinda bored of it and put it up for sale. We had a buyer pretty quickly so we went and got a lawyer to make sure everything was kosher.

It took a few months to dot the I’s and cross the T’s, plus we had to stick around for a month to train the new owners. Anyway during that time my partner and I became buddies with our lawyer, he sure loved having clients that owned a bar…LOTS of free after work drinks, at least he tipped the staff well. Anyway he said we were the first clients he can remember that started and successfully sold a business while remaining friends. He said “the only ship that sinks, is a partnership”.

Two other things he told us that would apply to co-owning a house.

1. A lot of times just the act of creating a partnership agreement is enough to make one party rethink if they really want to do it. SOOOO much detail, like every possible scenario under the sun, you and the other{s} have to plan out and agree to ahead of time.

2. When two parties don’t have an agreement, they end up suing each other. So both parties spend a ton on lawyer fees, and then most of the time the court essentially tells them to figure it out themselves, especially with civil suits.

#21 Sam on 02.18.20 at 5:39 pm

Rip Canada

#22 leo on 02.18.20 at 5:43 pm

Canada is ranked #3 for oil reserves, yet the country is struggling economically. And we are too busy with infighting like little children or coddling the minorities in this nation to ever change that.

https://open.alberta.ca/dataset/4ad7b5c8-8fdf-42a4-bec4-e57fae9f058e/resource/e5dd5f00-5139-4b0d-ba45-4990824b81af/download/did-you-know-fact-sheet-7-sept28.pdf

#23 Smartalox on 02.18.20 at 5:46 pm

Re: Co-ownership

Obviously the objective here is to have a little equity in the home as possible – and all the rights.

Picture a $1.5M home;
– Owner 1 has a $200 000 share (fully paid)
– Owner 2 has a $300 000 share, ($60k equity, $240k liability)
– Owner 3 has a $400 000 share ($80k equity, $320k liability)
– Owner 4 has a $600 000 share ($120k equity, $480k liability)

The person with the least amount of ‘ownership’ has the most equity at risk.

The person with the least amount of equity in the property stands to make the largest gains: if the property price goes up 10% in a year or two, owner 1 earns $20k (10% on their ‘investment’) – but owner 4 earns $60k (50% of their initial ‘investment’)!

In my 20s, I knew some guys who shared a house. One of them had inherited title to a house when a relative had passed, and paid it off by renting the other rooms to 3 other buddies. It was an awesome set-up, a rambling old house with a swimming pool, epic audio/video set up, and a music room in the basement. Just four young professionals making professional salaries but still living like students -with plenty left over for cars, bikes, parties and investments.

It was quite a case study in delayed-onset adulthood. I was impressed an envious. I called it ‘the Peter Pan complex’

Eventually the ‘landlord’ found a partner to settle down with, and the rest of the lads moved out.

#24 Sail away on 02.18.20 at 5:47 pm

#19 Shawn Allen on 02.18.20 at 5:09 pm

No More Pipelines

And no crude by rail either

Certain parties are against pipelines and against oil by rail. It now seems clear they have merely to illegally block the rail line to block the oil.

——————————-

This is just NN Taleb’s turkey paradigm in play: the turkey enjoys regular food, care and shelter. Therefore, he expects this to continue forever… and he’s right… until he isn’t.

A government always holds the ace. Precedent means nothing if and when they decide to play their hole card.

Everyone gets hurt in a war. Let this play out.

#25 Sail away on 02.18.20 at 5:53 pm

#17 Shawn Allen on 02.18.20 at 5:03 pm

Bombardier – Not that anyone cares

——————————-

Oh, I care. I own some of their preferreds yielding 7%. I’m not too concerned though- BBD is taking steps to reduce debt, so I’ll let it ride for now…

#26 Singh on 02.18.20 at 5:59 pm

Buy now or be priced out forever. Wages are frozen until 2021:

https://betterdwelling.com/canadian-real-estate-prices-are-climbing-at-the-fastest-pace-in-almost-2-years/

#27 Howard on 02.18.20 at 6:00 pm

HSBC to slash headcount by 35,000.

Sounds healthy.

https://www.ft.com/content/c0095f40-5203-11ea-90ad-25e377c0ee1f

#28 SimplyPut7 on 02.18.20 at 6:00 pm

#16 Howard on 02.18.20 at 5:02 pm

I hope this is finally the beginning of the end of this madness. Most people in Toronto aren’t rich and relying on a lot of debt to get by.

I saw a TV ad encouraging people to put their daycare and other expenses on a home equity line of credit.

Debt eventually has to be paid back, it’s not free money.

#29 Shawn Allen on 02.18.20 at 6:02 pm

RIP U.S. democracy.

Trump has now described himself as the chief legal officer.

People wanted a strong leader. They got it.

#30 Don Guillermo on 02.18.20 at 6:07 pm

Shirly, this is the beginning of the mess. Start digging.

#40 Shirl Clarts on 12.18.19 at 7:13 pm
#21 Don Guillermo on 12.18.19 at 5:55 pm
^^^^^^^^^^^^^
If you are referring to the 2015 election, the one where the Liberals eviscerated the Cons to take a Majority, then yes. Otherwise quit your whining.
******************************************
Kind of funny what you think whining is … but anyways I don’t care. Your ” because it’s 2015 ” sunny boy Skippy promised you something he can never deliver (you may figure it out someday but I doubt it). Anyways, it has no impact on me so enjoy your life digging out of the mess

#31 Lost...but not leased on 02.18.20 at 6:09 pm

QUOTE:

“. And it breaks one of the cardinal GreaterFool rules: never buy real estate with someone you don’t sleep with. Pooch excluded.”

We know there is a punchline contained within for Phartzy and MF

#32 Dave on 02.18.20 at 6:12 pm

Global recession maybe ahead…from Raymond James

https://www.google.com/amp/s/www.cnbc.com/amp/2020/02/18/chernobyl-like-response-by-china-means-worst-is-yet-to-come-for-coronavirus-raymond-james-says.html

#33 Bob Dog on 02.18.20 at 6:13 pm

I see a bunch of half-wits smiling about the fact that they can no longer afford to live in their own ridiculous excuse for a country.

We need another investor migrant program to allow hundreds of thousands of wealthy people from around the world to move here, buy housing and rent it back to the biggest collection of losers the human race has ever produced.

Make sure you vote in the next election. It will make all the difference. /s

https://www.youtube.com/watch?v=0Ag75QrFfJ4

#34 Felix on 02.18.20 at 6:32 pm

Hmm.

Idiot savage canine attacks a realtor in Barrie trying to sell home to Toronto speckers. Her arm is now so badly damaged she may not be able to sign another BRA.

https://barrie.ctvnews.ca/it-looked-like-a-murder-scene-barrie-realtor-attacked-by-dog-at-house-showing-1.4817479?cache=yes%2F5-things-to-know-for-friday-november-15-2019-1.4687011

What do the pooch acolytes here think of this?

#35 Don Guillermo on 02.18.20 at 6:33 pm

Canada burns and Trudeau fiddles!!

#36 Don Guillermo on 02.18.20 at 6:38 pm

Remember how Standing Rock ended? Most won’t. Anyways that was the Trump approach. We’re into Skippy’s approach.

#37 YouKnowWho on 02.18.20 at 6:44 pm

Bill 69? The Golden Girls?

What is going on here Garth?

#38 Anonymous on 02.18.20 at 6:49 pm

If someone wants to co-own, why not do it the old style way and just register a legal housing cooperative?
This way no single person is responsible for the mortgage, and as life events happen (marriage, job loss, death) there is no need to deal with the legal aspects of the loan, just find a new member to join the cooperative.

#39 Sail away on 02.18.20 at 6:50 pm

#29 Shawn Allen on 02.18.20 at 6:02 pm

RIP U.S. democracy.

Trump has now described himself as the chief legal officer.

People wanted a strong leader. They got it.

—————————-

If anyone’s not happy, they could go blockade a US train in protest. A Canadian turkey would experience a significant paradigm shift.

#40 Barb on 02.18.20 at 6:59 pm

It’s tough enough when you ARE sleeping with your partner…

Run away from co-ownership.

#41 DrC on 02.18.20 at 7:05 pm

A couple of years ago I had a discussion with a friend of mine (who is not too financial literate, but bought a house for 700k in Missi), he was saying “when I’m gonna sell my house in 25-30 years for 3-4 mils, I’m gonna have enough money to retire”. I asked “who’s gonna buy your house for that money, you really think houses are gonna quadruple in price over 30 years?”. Now I’m having thoughts… Could he be right? Is this what we are going for?

#42 Andrewski on 02.18.20 at 7:07 pm

If the “Golden Girls” are over the age of 75 & they hold their mor5gage insurance through DUCA, here’s another potentially huge insurability (or lack there of) problem:

“DUCA Mortgage Insurance;
Insuring your mortgage is about protecting your investment. Mortgage insurance takes care of your mortgage when you simply can’t. Through CUMIS*, we offer a wide range of mortgage protection options to help ensure you keep the home you’ve worked so hard for.

Life Coverage
Pays your insured mortgage balance plus accrued interest and settlement interest up to age 75 to a maximum of $1,000,000.

Disability Coverage
Covers your insured monthly mortgage payments for a maximum of $3,000 per month for 24 months (per claim) up to age 75.

Involuntary Loss of Employment Coverage
Covers your insured monthly mortgage payments for a maximum of $3,000 per month for nine months (per claim) up to age 75.

Critical Illness Coverage
Covers your insurable balance at date of diagnosis of a critical illness plus accrued interest and settlement interest for cancer, stroke or heart attack. Maximum coverage is $1,000,000 up to age 75.

*Life and Health insurance is made available through Licensed Insurance Representatives of CUMIS Life Insurance Company, part of The Co-operateors group of Companies. CUMIS is a registered trademark of CUMIS Insurance Society, Inc. and is used under licence.”

#43 Big Bucks on 02.18.20 at 7:08 pm

That’s the way to do it and hire a live in stud(to help out) when you get a little older.Condos are stifling,lonely and just reek of marijuana—unless they’re into the stinky cabbage then fill your boots.Rather have a house with yard and some fresh air.

#44 Asterix1 on 02.18.20 at 7:10 pm

Hurry up kids, go buy a house in GTA. Realtors, bankers and a mortgage guy are telling you prices are going up. You will be priced out forever! Don’t think…buy, buy, buy!

Or be smart, take your time, shut out the noise and you quickly realize that home prices are not really going up. Ross Kay explains it well, it’s all about the sales mix, average can go up, even though everything is actually going down.

For detached prices, Toronto prices Are the same as early 2017. In Markham, same as early 2016! Not even going up with inflation..

Yes, condos have gone up, unrealistically high for what you pay and get to live in. Stay clear, it’s a hot potato, that one is ready to blow all over GTA.

#45 Igor on 02.18.20 at 7:11 pm

Back in the USSR co-habitation of unrelated people was a thing, called “Communal Apartment”. https://en.wikipedia.org/wiki/Communal_apartment

They were ugly, dirty and horrible. People got rid of them slowly after the collapse. In the 3rd World countries. Now it reappears here. History repeats itself.

All the latest trends towards collectivism and socialism in Canada really frighten me, a lot. I am very sad that schooling system in Canada failed to explain that “common” means “no one’s”. Pseudo socialism and collectivism lead to famine, poverty and eventual collapse of that system. It is inherently broken. I can only advise those “dreamer heads” to open a history book and learn what it leads to. I know. I ran away from that and the fallout that still plagues eastern Europe.

I am extremely sad to see Canada moving towards catastrophe at full speed.

#46 Blair on 02.18.20 at 7:12 pm

The protesters should be forcibly removed from the rail lines and prosecuted.

#47 crowdedelevatorfartz on 02.18.20 at 7:15 pm

@#23 Smartalox
“In my 20s, I knew some guys who shared a house. One of them had inherited title to a house when a relative had passed, and paid it off by renting the other rooms to 3 other buddies.’
++++

I went to a party at a house like that.

Hardwood floors and they had a full sized, stuffed buffalo on rollerskates. God only knows where they got it and how they got it in the house but….. the look on people’s faces when they visited for the first time and someone pushed that Buffalo as fast as they could right at the front door as it opened…..

Classic crap your pants time…..

#48 Shawn Allen on 02.18.20 at 7:19 pm

#25 Sail away on 02.18.20 at 5:53 pm
#17 Shawn Allen on 02.18.20 at 5:03 pm

Bombardier – Not that anyone cares

——————————-

Oh, I care. I own some of their preferreds yielding 7%. I’m not too concerned though- BBD is taking steps to reduce debt, so I’ll let it ride for now…

*****************************
Well, the prefs are probably in no danger yet.

But if you want to frighten yourself, look at the 2019 December 31 balance sheet and calculate the book value per common share.

Okay fine I will do it for you, I want to see the number anyhow.

Start with the share holder equity of negative $7,667 million. Deduct the pref equity of $347 million.
So the common share holder equity is negative $8,014 million.

There are 2,384 million common shares . So a value per common share of negative $3.36.

Liabilities exceed assets by the $7,667 million.

In a liquidation, there is WAY less than nothing left for pref share holders (and common share holders) after all debts and liabilities paid. In a liquidation, if assets are sold at book value,unsecured creditors would receive less than the amount owing and pref and common share holders would get nothing.

On the other hand that has been the case for years and the pref dividend (unlike the common) has continued to be paid. This might well continue to be the case.

There will likely be some gain on the transaction. I would be amazed if it is as much as say $2 billion on this $8 billion sale. I would not be surprised if it is a loss. If there will be a big gain, I think they would say.

In a case where the company is $8 billion in the hole how can this sale even if there is a large gain (say $2 billion) make the prefs safe?

#49 Shawn Allen on 02.18.20 at 7:20 pm

And the Bombardier prefs yield a LOT more than 7%, at current prices,reflecting their risk.

#50 jess on 02.18.20 at 7:25 pm

27 Howard on 02.18.20 at 6:00 pm to add to HSBC “simplifying”

https://www.barrons.com/articles/hsbc-reveals-major-restructuring-as-profits-plunge-the-stock-is-tumbling-51582025976
https://www.cnn.com/2020/02/18/business/hsbc-results-2019-announcement/index.html

Violation Tracker Parent Company Summary
Parent Company Name:
HSBC
Penalty total since 2000: $6,295,662,407
Headquartered in: Britain
lookback —– anti-money-laundering deficiencies 2012 DOJ_CRIMINAL $1,256,000,000
fraud 2018 DOJ_CRIMINAL $100,000,000
thursday, January 18, 2018
HSBC Holdings Plc Agrees to Pay More Than $100 Million to Resolve Fraud Charges
https://www.justice.gov/opa/pr/hsbc-holdings-plc-agrees-pay-more-100-million-resolve-fraud-charges

Number of records: 53 see more here
https://violationtracker.goodjobsfirst.org/parent/hsbc
===========

HSBC fined $336m to repay Belgium after huge tax fraud
HSBC set up illegal schemes to help investors funnel money through tax havens and launder cash, said prosecutors.
6 Aug 2019
https://www.aljazeera.com/ajimpact/hsbc-fined-336m-repay-belgium-huge-tax-fraud-190806145436442.html

#51 Less is More on 02.18.20 at 7:33 pm

#19 Shawn Allen

If people want to stop pipelines and oil by rail (and oil by sea in Quebec and Ontario) there is a very real Jordan Peterson type “clean your own room first” type thing they can do: Stop buying petrochemical products. This includes gasoline, oil & natural gas if that is how your home or business is heated, plastics of any type including cell phones, TV’s and printers (and bottled water), and no more riding transit or flying in airplanes.

This whole hysteria isn’t about anything real other than certain US moneyed interests keeping Alberta land-locked to the US. TC is already building pipe to the US to supply US LNG facilities with gas because BC won’t let a pipe go through until every single native on the reserve has a new truck and quad. Sad thing is it is working.

Don’t worry about Teck. They are thinking long term and they rub shoulders with the right people. They know that pipelines that cannot go east or west will eventually go south and then east or west. Most of them do now. Alberta is a cash cow for Ottawa but in terms of economic influence, it is a US protectorate. It’s not really part of Canada, economically speaking.

#52 S.Bby on 02.18.20 at 7:39 pm

#33 Bob Dog

Paul Oei was convicted of securities fraud a few years ago.

#53 Shirl Clarts on 02.18.20 at 7:47 pm

#30 Don Guillermo on 02.18.20 at 6:07 pm
Shirly, this is the beginning of the mess. Start digging.

#40 Shirl Clarts on 12.18.19 at 7:13 pm
#21 Don Guillermo on 12.18.19 at 5:55 pm
^^^^^^
Wow, you’re a sore loser. But I guess you do care; digging through old comments from 2019? Did you figure out my point yet? Pathetic, Donny boy.

#54 Drill Baby Drill on 02.18.20 at 7:49 pm

Canada is slowly slipping down the slope of a failed state. I am very disappointed in our non leadership. Canada deserves much much better than this.

#55 Rexx Rock on 02.18.20 at 7:50 pm

Its booming in Canada so they have to change the rules on co ownership and everybody wants there money to grow. A gic just does”t cut it.Rents are skyrocketing so there is little choice unless you can live in a city that nobody wants to live.Are interests rates will follow Japan,EU and UK.Gold is making new highs in Canada.1 oz coin will cost you over $2100 !

#56 Toronto Rraltor on 02.18.20 at 7:53 pm

1 bedroom in Toronto, 454 squares at 87 Peter St just sold for $700,000

Jus sayin……

#57 Politico on 02.18.20 at 8:12 pm

#29 Shawn Allen on 02.18.20 at 6:02 pm

“RIP U.S. democracy.

Trump has now described himself as the chief legal officer.

People wanted a strong leader. They got it.”

Except that he is, as have all US presidents been. That’s why the president appoints all the federal judges. Now that said, congress has oversight and can reject appointments, but they can’t make any appointments themselves.

The president has always been head of the judicial system, because he appoints judges, has the power of commutation or pardon, and veto over any laws that do not pass a 66% threshold. Plus he is the head of the CIA, FBI, and armed forces as commander in chief. Nobody ever complained about this before until it was Trump. “Damn, we thought that was all good until someone I think is a fool got the job!” people think. But it is what it is fool or not.

#58 Never ends on 02.18.20 at 8:16 pm

Realturds, douchey developers and sleezey mortgage brokers have been proven right about house prices. 25 year freight train with no end in sight.

Real estate refuses to revert to sane and affordable levels in almost all markets.

Should have bought more. Meh, gonna go watch The Goldbergs.

#59 Genesis II on 02.18.20 at 8:24 pm

#40 Barb on 02.18.20 at 6:59 pm

It’s tough enough when you ARE sleeping with your partner…

Run away from co-ownership.

+++++++++++++++++

Tell me about it! My wife and I now sleep in separate beds (on separate floors), 3 or 4 nights per week. She says I snore (but hasn’t proven the claim – I’ve never, ever heard myself snore!)
No complaints…I get to read my book(s) till late and listen to YouTube videos till I get tired (after reading GF of course) – which happens to be at least an hour longer than she can stay awake.

#60 Doug t on 02.18.20 at 8:25 pm

This “might” work for women but not men so much

#61 Armpit on 02.18.20 at 8:37 pm

Lawyers will love this “Golden Girls Act”. As there isn’t enough business in Family law.

#62 akashic record on 02.18.20 at 8:44 pm

#199 crowdedelevatorfartz on 02.18.20 at 8:31 am

@#194 Akashic homegrown
“Reading the voices of gratitude for being able to live in this land gives a profound insight how this gratitude might have been even just decades ago.”
++++

Delirious with gratitude or just hitting the bong a little early today?

#229 doug t on 02.18.20 at 12:37 pm
#194 akashic record
are you sniffing glue?

Relax settler boys…

No substance can hallucinate you into the altered state of gratitude.

Just continue sniffing your fartz and keep breathing…

#63 Yukon Elvis on 02.18.20 at 8:54 pm

#4 Dave on 02.18.20 at 4:08 pm
A lot of people are saying that there will be a mass exodus from China once the quarantine is lifted.

Is a large quantity of Chinese coming to Canada and reigniting the real estate market in Metro Vancouver?
………………………….

You might be right Dave.

https://moneymaven.io/mishtalk/economics/wuhan-mother-speaks-out-no-beds-no-medicine-all-lies-YaKcRN-lv0eLHTropm9swA

#64 will on 02.18.20 at 9:01 pm

a most interesting post. will have to think about it. ty garth.

#65 G on 02.18.20 at 9:06 pm

The Pretenders’ Chrissie Hynde Pens Letter To Trump, Calls For Pardon of Assange

‘I believe he has been duly punished and should now be set free’

#66 Haemato on 02.18.20 at 9:08 pm

BC budget 2020 is adding a new tax bracket for income above $220k (20.5% vs 16.8%). Cool.

Excellent quote from a friend: “bumping up against the bottom of the ‘incredibly elite’ earning class and can’t realistically afford even a modest home.”

#67 G on 02.18.20 at 9:08 pm

‘More interested in pipelines than indigenous people’: Trudeau faces activists’ wrath over yet ANOTHER contentious energy project RT Feb 18
https://www.rt.com/op-ed/481140-trudeau-pipeline-indigenous-land/

#68 G on 02.18.20 at 9:13 pm

Coronavirus in Westchester County New York State? by Paul Cottrell Feb 18 44seconds
https://www.youtube.com/watch?v=1SXp8XzVtu0

#69 Janet LeMon on 02.18.20 at 9:21 pm

DELETED

#70 Dazed and CONfused on 02.18.20 at 9:21 pm

“…T2 & Chateau Bill have started to dismantle the mortgage stress test in a giant concession to moisters….”
———————————————–

Moisters? Not likely. Too busy texting, tweeting, and selfie-ing.

More likely a giant concession to the uber-lobbying Canadian Bankers Association and the Canadian Real Estate Association.

Never underestimate the power of both the CBA and CREA lobbyists to advance their own interests ahead of the interests of the average financially uneducated working Canadian.

#71 Phylis on 02.18.20 at 10:31 pm

#6 Piano_Man87 on 02.18.20 at 4:14 pm. If it was a Billy Joel cd you would have fought for it, right?

#72 Yuus bin Haad on 02.18.20 at 10:35 pm

OK kids, raise your hand if you understood Commander Marc’s reminder to all Canadians: “Train Time is Anytime”

#73 Phylis on 02.18.20 at 10:36 pm

Thoughts passing through me, thinking of the future. Hmm. Some deal. You know what? I’ll still end up scrubbin’ the bowl. This is not what I signed up for.

#74 Vladimir on 02.18.20 at 11:03 pm

So, ON and BC will have undivided co-propriery , like QC had for a long time.
Nothing dramatic, I was a member of one – nothing bad or interesting happened, city taxes were lower and we could not rent our units, that’s pretty much it.

#75 canuck on 02.18.20 at 11:08 pm

You Easterners(Ontario east) must be so proud to put the crown prince of papineau back in office for another 4 long years.

#76 MF on 02.18.20 at 11:18 pm

#56 Toronto Rraltor on 02.18.20 at 7:53 pm

Stress test changed. Of course it wasn’t a good move.

Predictions have changed:

-Expect the bump in prices I predicted
-Expect a much sooner eventual crash, and for it to be much more widespread/deeper than originally predicted.

This thing has become a true runaway freight train.

MF

#77 Ponzius Pilatus on 02.18.20 at 11:30 pm

Garth,
Whatever happened to :
Don’t share a mortgage with someone you don’t sleep with?

#78 Everything is better in USA! USA! on 02.18.20 at 11:32 pm

House addiction in Canada.
https://www.bloomberg.com/news/articles/2020-02-18/morneau-eases-stress-tests-for-canadian-insured-mortgages?srnd=premium-canada

#79 Ponzius Pilatus on 02.18.20 at 11:40 pm

Just wait until one of these nice ladies dies.
A lawyers field day.

#80 Ponzius Pilatus on 02.18.20 at 11:53 pm

G:
Stop infecting this blog with you fear mongering.
Back to your mother’s basement,
————
https://www.richmond-news.com/news/asia-pacific-news/most-coronavirus-infections-are-mild-says-chinese-study-1.24078259

#81 Al on 02.19.20 at 12:05 am

HSBC fined $336m to repay Belgium after huge tax fraud
HSBC set up illegal schemes to help investors funnel money through tax havens and launder cash, said prosecutors.

This after the Mexican cartels fiasco just recently. There’s even a Netflix movie about it lol. The governments needs to learn that these fines obviously don’t work. People need to go to jail. Same reason you and I dont get just fines if we commit major international fraud and money laundering.

#82 Barb on 02.19.20 at 12:11 am

Another thing re co-ownership:

How would the Personal Residence Exemption be administered? Pro-rated?

And just think what a Land Title document would look like:
at least 4 bank mortgages, maybe 3 or 4 with second mortgages. The thing would be 5 pages long.

#83 Sail Away on 02.19.20 at 12:20 am

#49 Shawn Allen on 02.18.20 at 7:20 pm

And the Bombardier prefs yield a LOT more than 7%, at current prices,reflecting their risk.

—————————

Yes, they were yielding 7% when I bought, so now should be nearer 12%. I believe the gov’t will continue to prop this decrepit pig, so will continue to hold for now.

#84 Not So New guy on 02.19.20 at 12:31 am

A commune by any other name….

#85 Caroline Shapely on 02.19.20 at 12:31 am

#4 Dave. Trump has begun to demand that Chinese identify themselves and any relationship to any state actor and be barred from buying real estate without special authorization. The “land rush” out of China you speak of may be limited to those who donate to Trudeaus ‘Foundation’ . Both points have been reported publicly and hectored in the wildly left media such as The Guardian.

Trudeau is weak kneed when it comes to admitting his relationship and fondness for Chinese Authoritarianism. After all, aren’t the Communists admirable in Trudeaus eyes for the way they “get things done”?

The Mainland Chinese in Canada are a community unto themselves, very much attached to the old country by choice and force. It’s not unheard of for Chinese Agents to knock on doors to make a point and organize pulpits in our community centers and universities.

Immigrant groups have traditionally been fertile ground for buying and harvesting votes. Politicians make promises to allow additional programs targeted at poor desperate migrants buying votes in exchange for bloc loyalty. The usual tactic is to anoint an ethnically correct ‘leadership’ and funnel the Canadian largesse through a very small tightly controlled filter ensconced in community and religious centers. Women especially who want freedom from ancient restraints find themselves trapped.

Many immigrants who come to Canada to escape the harsh leadership style of wherever they escape from find themselves being herded into the ballot box by the same leaders they fled from.

We’ve seen in communities like Richmond B.C. the Mainland Chinese vote has backfired on the Liberals, where the constituency is controlled from China and not from bribery and promises out of local riding associations. Additionally, these immigrants are harder to control as they come with money, and as such are less desperate to conform when handouts are proffered from greasy political fingers.

Trudeaus lickspittle have been caught flat footed by the Mainland Chinese. For one thing, they are not “Liberal”. They are the harsh communist trained cadre that Trudeau so admires but obviously doesn’t understand. I think what Trudeau and Hussein are starting to understand is the Chinese migrants don’t produce the political results that old style politics formed-up. I expect to see a new plan from Hussen towards the more desperate who are more likely to exchange votes for handouts.

Trudeaus lip service to multi-diverse pandering is proving to be a mine field 400 years in the planting and each statement coming out of Trudeaus back room is just making it worse.

#86 april on 02.19.20 at 12:55 am

#26– Not according to Ross Kay. So much deception no wonder people don’t know who to believer.

#87 dosouth on 02.19.20 at 1:26 am

You cannot fix stupid….

#88 Don Guillermo on 02.19.20 at 1:29 am

#53 Shirl Clarts on 02.18.20 at 7:47 pm
#30 Don Guillermo on 02.18.20 at 6:07 pm
Shirly, this is the beginning of the mess. Start digging.
#40 Shirl Clarts on 12.18.19 at 7:13 pm
#21 Don Guillermo on 12.18.19 at 5:55 pm
^^^^^^
Wow, you’re a sore loser. But I guess you do care; digging through old comments from 2019? Did you figure out my point yet? Pathetic, Donny boy.
*****************************************

Pass us your wisdom Shirly girl. If it was missed please resend.

#89 Sleep Country on 02.19.20 at 1:32 am

My wife and I have the same problem, snoring races. First one to sleep wins! Drove all of the kids out of the RV and into a tent! (Which might have been a win.)

So we bought one of those beds that tilts up and down like a hospital bed. It is not a perfect solution, but if she is snoring I can tilt her up, and if I am snoring she can tilt me up, and if we are both snoring the dog can leave the room.

It didn’t come with an ejection button though, although I was hoping. That would have been fun. I’d eject her just to see the look on her face even if she wasn’t snoring! On the other hand I probably wouldn’t survive the aftermath so it is probably for liability reasons that the eject button is not included.

#90 Janet LeMon on 02.19.20 at 2:43 am

BANNED

#91 Howard on 02.19.20 at 3:28 am

How do you like this doozy from Chateau Bill?

For many middle class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market.

Well there you have it. Government finally admitting it is in the business of using fiscal and monetary policy to prop up the housing market at all costs.

If this isn’t a clear signal to young Canadians to GTFO of the country I don’t know what is. Anyone under 40 must look into emigration. There is no other way.

#92 Howard on 02.19.20 at 6:26 am

#50 jess on 02.18.20 at 7:25 pm

Even worse for HSBC.

Hong Kong alone represents 1/3 of HSBC’s revenue.

That would be the same HK undergong the double whammy of riots/protests and coronavirus.

That would be the same HK with a banking asset to GDP ratio of 8.5. The same ratio recorded in Iceland, Ireland, and Cyprus right before economic crashes in each of those countries.

In short, HSBC is doomed.

#93 under the radar on 02.19.20 at 6:29 am

One mortgage gets registered . the borrowers will be jointly and severally liable to the bank , meaning they are all liable to the bank for the entire debt not just their interest in the property. The co- ownership agreement will deal with their liability to the bank and to each other with indemnities and defaulting owner provisions. The point is, default by one in their payment is default by all, bank does not chase individual owner who defaults in payment.

#94 Steven Rowlandson on 02.19.20 at 6:56 am

Back in the 1970s David Wilkerson the author of ,”The cross and the switch blade”‘ wrote a novel called,” The Vision'” and one of the divine revelations he wrote of was that it would take investors syndicates pooling their money to buy homes and young adults would have no choice to remain living with their parents and sometimes in eternal fiendship. It could be that David was correct.

#95 MF on 02.19.20 at 6:59 am

#91 Howard on 02.19.20 at 3:28 am

“If this isn’t a clear signal to young Canadians to GTFO of the country I don’t know what is. Anyone under 40 must look into emigration. There is no other way.”

-Ah no.

The idea is to fix the problems at home and make it a better place, not run and cower in fear the first second I don’t get what I want.

Besides, go where? The sad worldwide low interest rate environment has done similar damage all over the western world. Go on other forums and you’ll hear the same complaints about housing in the big cities.

The problem is the real estate industry, which is predatory, has grown way too large. It’s a consequence of the low rates. Lots of people’s wealth is tied to this crap.

What should happen is:

-A collapse will force everyone to abandon this real estate every economy
-An increase in rates will force everyone to abandon this real estate focused economy
-Better policy meant to divert funds away from worthless real estate investment
-A change in thinking regarding real estate

Garth has been trying for years to enact that last point to make changes, and better us all.

That’s much more useful than just running away from the frying pan into the fire somewhere else.

MF

#96 Janet LeMon on 02.19.20 at 6:59 am

https://www.dailymail.co.uk/news/article-8015737/Chinese-villager-tied-post-scolded-refusing-wear-face-mask.html

And, today China revoked the writing of 3 Wall Street Journal reporters. I suppose you put yourself above them too? Pathetic….much?

#97 Steven Rowlandson on 02.19.20 at 7:14 am

Re#91
Perhaps this is why Deagle.com is predicting a loss of population for Canada of 26% by 2025. In Canada it is survival of the richest and a Canadian without real estate is nothing. I would pose the question; Where could a Canadian real estate refugee go without winding up in a country with a real estate market? 6 feet under?

#98 maxx on 02.19.20 at 7:17 am

The perfect nightmare. Perhaps if all parties own their shares outright sans mortgage…hmmmmm……no.

“Golden Girls”. Yeah, I’m sure it’ll all work out that way. Everyone paying their share 100% of the time, 100% on time. Florida sunshine every day.

Run screaming.

#99 50 YEARS OF MAPLE LEAF INCOMPETENCE! on 02.19.20 at 7:18 am

Toronto and the Make Believes hitting rock bottom.

“Outclassed.

The Toronto Maple Leafs had the opportunity to witness first-hand what a legitimate Stanley Cup contender looks like on Tuesday night in Pittsburgh, taking a 5-2 loss to the Penguins. Sidney Crosby put on a clinic as he continues to surge since returning to the lineup, racking up four points in the victory, while Tristan Jarry was solid in goal with 34 saves.”

https://ca.sports.yahoo.com/news/penguins-provide-another-season-low-point-to-maple-leafs-031429719.html

Meanwhile, the pathetic province there adopts unreadable Tory-Blue brand license plates, so Drug Fraud dope dealers can get away at night without the cops reading their plates and catching them.

What a pathetic place.

#100 maxx on 02.19.20 at 7:25 am

@ #18

You first.

#101 crowdedelevatorfartz on 02.19.20 at 7:40 am

@#48 Shawn Allen
“In a case where the company is $8 billion in the hole how can this sale even if there is a large gain (say $2 billion) make the prefs safe?”
++++

When the “zombie” company is a large Quebec employer that requires billions in federal govt bailouts….. or the votes flitter away….
Its been happening for decades in La Belle Province.

#102 crowdedelevatorfartz on 02.19.20 at 7:53 am

@#96 janet lemon

Less than 1900 dead from Covid19 in 1.5 months.

4000 per DAY die in China from complications due to air pollution.

Sensationalist drivel over a non event.

i thought you were BANNED

#103 not 1st on 02.19.20 at 8:01 am

If you are holding Canadian stocks after what just transpired here, you are playing with fire. Capital is going to flee like crazy now that we see what devastation someone like Trudeau can wreak in just a few short years. Nobody and no country is going to invest a cent here anymore. No company is ever going to work with a native band again because they have no certainty at all. Sell it all and buy the S&P.

Garth why is the BoC buying mortgage backed securities? First time in its history, started last year, ramped up since the election. Canadas own little subprime brewing?

#104 jack on 02.19.20 at 8:09 am

I thought the b20 rules were brought in by OSFI? At the time I believe you said that it was the banks that wanted the rules brought in to reduce their risk. So how do Mr. Socks and Chateau Bill have any influence over it?

#105 NoName on 02.19.20 at 8:21 am

#102 crowdedelevatorfartz on 02.19.20 at 7:53 am
@#96 janet lemon

Less than 1900 dead from Covid19 in 1.5 months.

4000 per DAY die in China from complications due to air pollution.

Sensationalist drivel over a non event.

i thought you were BANNED

Cmon farts you cant compare pollution to
infection. But but is not all doom and gloom over there.

https://twitter.com/IsChinar/status/1229816872608116742

#106 TurnerNation on 02.19.20 at 8:25 am

This blockade will end when it’s planned to end. Which is why the government, the opposition, RCMP, CN police all are standing down. They do not work for us btw. Get the picture?
This is a well-planned and organized attack.
As I’ve been saying for years here, 2nd and 3rd World countries get bom’d; First World Countries get Economically Bom’d. As we see.

All opposition is controlled. The Rex’s. The Erza’s. The Sue-anns. All are telling you *exactly* what you want to hear. But how do they know? Social media and hashtags is designed to track all of this. It knows you better than you do. Social media is weaponized. All that cool stuff like Google Earth, Google glasses, and stuff never revealed to us, all were developed for the battlefield.
That is our towns and cities. Tracking us down to the foot. Overseeing all traffic and movements.

We are under attack, from the outside, inward.

#107 Ubul on 02.19.20 at 8:51 am

It might work for retired people, who downsize their single family homes or condo. Especially if they are time-proven friends, they can even help to take care of each other.

#108 YVR Expat on 02.19.20 at 9:19 am

“Partnership” mortgages are just as prone to failure as marriage mortgages. Guess what – divorce happens, and it financially ruins about 50% of the people that try it. Millennial’s are prone to cheating, I mean poly-style relationships…this won’t end well.

#109 JB on 02.19.20 at 9:20 am

#43 Big Bucks on 02.18.20 at 7:08 pm

That’s the way to do it and hire a live in stud(to help out) when you get a little older.Condos are stifling,lonely and just reek of marijuana—unless they’re into the stinky cabbage then fill your boots.Rather have a house with yard and some fresh air.
………………………………………………………………..
Hilarious only because Ive been there with the stinky smells that permeate your cavity and the halls. You are correct sitting there surrounded by concrete walls does get stiflingly lonely. Boomers must love this shitty lifestyle cause they eat it up. Oh well at least is a place to go and die where none of your neighbours know your dead until it starts to stink up their place.

#110 Howard on 02.19.20 at 9:28 am

#95 MF on 02.19.20 at 6:59 am

Moving elsewhere for a better life is “running away and cowering in fear”? Is that what you say to immigrants to Canada too?

Canada pretty much IS the fire. Any other first-world country is a frying pan on a low simmer by comparison. What first-world country is worse when it comes to the tradeoff between salary, cost of living, and quality of life? I can’t think of any.

Did you read Bill Morneau’s comment? The government’s priority is to prop up the housing market. Period. If you didn’t win the birth lottery and buy 20 years ago your prospects are bleak. The icing on the cake is that the government acknowledges that housing is an “investment” yet in a fit of cognitive dissonance continues to insist that principal residences be exempt from capital gains.

Young Canadians with any talent need to leave in order to realize their life goals. There is no other way. Stay away long enough to earn a second passport and then reevaluate.

#111 JB on 02.19.20 at 9:29 am

#94 Steven Rowlandson on 02.19.20 at 6:56 am

Back in the 1970s David Wilkerson the author of ,”The cross and the switch blade”‘ wrote a novel called,” The Vision’” and one of the divine revelations he wrote of was that it would take investors syndicates pooling their money to buy homes and young adults would have no choice to remain living with their parents and sometimes in eternal fiendship. It could be that David was correct.
…………………………………………………………………
I’m Sicilian background and this is the norm! So we must have written that book. My matri (mama) is living with us “uppa stairs not in the basement” and I’m the youngest son go figure. So its cultural but we like it that way with famiglia.

#112 not 1st on 02.19.20 at 9:55 am

#110 Howard on 02.19.20 at 9:28 am

Canada pretty much IS the fire.
—-

And there is Canadas dirty little secret. 30% of our GDP is FIRE, Finance, Insurance, RE and the construction of it. Basically we are selling more and more expensive real estate to each other at the expense of real productive capacity, like making things and selling them.

We do have raw exports though, Ag, Forestry and O&G are 35% of the GDP, but people want to kill those sacrifice those sectors as well.

So if we don’t want the RE industry and we don’t want the resource industry because of green wokeness?, then whats left? And don’t tell me polishing solar panels is going to save us.

People need a better understanding of what our economy is and what it isn’t and never will be.

#113 Classical Liberal Millennial on 02.19.20 at 9:57 am

How pathetic is it that a country with as much land as we have, has a real estate supply crisis.

#114 Shawn Allen on 02.19.20 at 9:57 am

Stress Test Fixed, Not Gutted

The notion of a stress test based on fake 5 year posted rates that the banks did not actually charge was a problem from the start.

No one needed protection from mortgage rates rising to a fake rate.

It’s one thing to support lower house prices and/or to wish that people would borrow less. It’s another thing to use that as an excuse to support an irrational stress test. The reference to the fake posted rates will now be removed.

Next up should be an investigation into why the banks were fraudulently implying that these fake posted rates were their actual regular mortgage rates. Regulators go after mattress sellers for similar misleading advertising.

Actually a stress test north of 5% was a fine deterrent against excessive market froth and accelerated personal debt. The clear intent here is to artificially increase demand. That will create a market that is, ah, fake. – Garth

#115 Mattl on 02.19.20 at 9:59 am

#86 april on 02.19.20 at 12:55 am
#26– Not according to Ross Kay. So much deception no wonder people don’t know who to believer.

—————————————————————

Betting against Ross Kay on RE has always been a winner.

I’m sure at some point he will be right – but so will the Dow 30K guy.

#116 IHCTD9 on 02.19.20 at 10:04 am

#19 Shawn Allen on 02.18.20 at 5:09 pm
No More Pipelines

And no crude by rail either

Certain parties are against pipelines and against oil by rail. It now seems clear they have merely to illegally block the rail line to block the oil. Is Alberta toast? What fool would invest a dime in added oil sands production? The proposed Teck Resources Mine will never go ahead in this environment.
___

Alberta? Try the whole country. The Federal Libs are allergic to testosterone right across the board.

Forget about rule of Law and efficiency. No one with a brain would drop a dime here in Canada – everyone’s worst fears about Trudeau have been confirmed.

Say hello to deranged protesters half way across the country deciding if you get to heat your house or not.

Thanks Trudeau!

#117 Eks dee Siple on 02.19.20 at 10:13 am

#89 Sleep Country
“I’d eject her just to see the look on her face…” LOL. You owe me a new laptop keyboard. Covered in peppermint tea:)
Rail blockades affecting my business also, but the majority of Canadians (especially those who are not conservative jerks) see that business cannot go on as usual and we need to have this conversation. Propane and chlorine can be rerouted via truck for now. As well as most of the other supplies. Stop your whinin’ and let’s fix this problem.

#118 Jack Palance Once parked my gold Roller. on 02.19.20 at 10:18 am

BANNED

#119 Howard on 02.19.20 at 10:24 am

#112 not 1st on 02.19.20 at 9:55 am

Several countries have tried to grow the economy through people selling houses to each other. Ireland, Iceland, Spain, Cyprus, states like Arizona and Florida. Even the UK to a lesser extent.

None of those bubbles were sustainable.

Will Canada be different? Maybe?

#120 Shawn Allen on 02.19.20 at 10:31 am

Stress Test

Actually a stress test north of 5% was a fine deterrent against excessive market froth and accelerated personal debt. The clear intent here is to artificially increase demand. That will create a market that is, ah, fake. – Garth

*****************************
Excessive in whose view. What of freedom?

The means don’t justify the laudable ends when the means are clearly flawed.

What is artificial or fake about people borrowing at interest rates that they can afford? Choking off borrowing by the use of fake posted rates was improper and not intellectually honest.

If the lending market is fake that is due to the CMHC guarantee. But that’s been around for many decades.

Buffett has said many times that the value of basically all assets rise when interests rates go lower. Lower interest rates are a buoyancy force on asset values. Certainly on assets that produce income or a financial benefit (that includes rental value even if owned).

Nope. It’s a fake market because of CMHC guarantees that allow and encourage 20x leverage and mandated tax-free profits on houses. There is no free market in residential real estate. It’s the ultimate government rigging job, so higher rates to keep the lid on prices are a reasonable brake on the irresponsible personal behavior said policies have created. – Garth

#121 Dina Santos on 02.19.20 at 10:37 am

The mortgage rate 5 year or variable or 1-4 years should be 7% at the minimum.

This low interest rates communist, socialist sickness is making everything worse for all consumers, investors, taxpayers. Nobody wants to look at reality but live in this fake world of a fake recovery. Don’t tell me there is a real recovery because inflation numbers especially are so skewed and understated by at least 2.0% to 2.5% annually, 2.4% inflation, lies, it is at least 4.5% to 5% on average.

#122 IHCTD9 on 02.19.20 at 10:39 am

#110 Howard on 02.19.20 at 9:28 am

Young Canadians with any talent need to leave in order to realize their life goals. There is no other way. Stay away long enough to earn a second passport and then reevaluate.
__

Find yourself a spouse that also earns.

Live in Canada – somewhere other than the GTA/YVR

Done!

No need to fly half way around the world to settle down.

Plus if you decide to have a few kids, the Trudeau Liberals will pound thousands and thousands of tax free dollars into your bank account. More than probably any other country in the world.

The fact is, Canada offers the potential for a certain demographic to enjoy all the benefits of a first world country, yet pay diddly in taxes for it.

Become that fraction of the population and you’re set.

#123 Not So New guy on 02.19.20 at 10:40 am

#91 Howard on 02.19.20 at 3:28 am

How do you like this doozy from Chateau Bill?

For many middle class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market.

Well there you have it. Government finally admitting it is in the business of using fiscal and monetary policy to prop up the housing market at all costs.

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

Be sure and hold this quote up the next time some internet message board RE investment genius says that the government shouldn’t be interfering in the ‘free market’ to bring prices down

#124 Howard on 02.19.20 at 10:53 am

#120 Shawn Allen on 02.19.20 at 10:31 am

You do realize that the state insures the CMHC mortgages, do you?

Freedom? Huh? Freedom to be bailed out by taxpayers?

#125 G on 02.19.20 at 10:55 am

#80 Ponzius Pilatus.
FYI Heads up stop reading my post if you don’t like them!

Some people surprisingly like to be informed and are still able to think for themselves. No need to panic, not to cause fear. Some People like to be informed so they can take steps too try and keep there families and friends safe, if that’s still even possible.
(If others think I’m full of BS, like you seem to do #80, just move along nothing to see here.)

No need to panic. Could I be wrong about COVID19, I hope I am wrong! But the more I see the more it looks like it will be spreading here due to incompetence or intent. (Don’t worry it’s ‘safe and effective’ some will understand my meaning.)

If you still believe the main stream media is telling you what you should know all the time, as apposed to what they want you to think… you are still on a low level of Plato’s cave IMO. But you’re entitled to think and believe whatever you like, as is everyone IMO.

I saw this today, it’s not about the COVID19, someone other than you might find interesting to think about, maybe even you, but I’m not holding my breath on that one.

Grand Illusion part 2: Urban Pacification Feb18 18min
https://www.youtube.com/watch?v=LvsRlGkaBVI

#80, Your attempt/desire a controlling free speech has been shown to cause bad things to happen to people through history. Be careful what you wise for!

Again you don’t like my post, just save your time and skip them. I do hope I’m wrong about COVID19, but the info I’ve seen to date isn’t looking good at the moment. Again I hope I’m wrong. I hope you #80 and everyone else stays safe and can avoid being infected at all.

#80, as for your 2nd comment. Grow up and get a life! You clearly don’ know anything about me. Except you don’t like that I have free speech and can think for myself given the available information at the time, which can change over time if given other info that I trust. (if your 2nd comment was simple trying to push my buttons, it clearly has worked.)

I come here to reads Garth’s blog because I trust his option, which seems to be right most of the time. In a complex changing world.
I keeping in mind he’s only human like the rest of us. And does seems to be much smarter that the average including me. I’m guessing his Dorothy would agree, that he is most of the time anyway.

#126 IHCTD9 on 02.19.20 at 11:04 am

#113 Classical Liberal Millennial on 02.19.20 at 9:57 am
How pathetic is it that a country with as much land as we have, has a real estate supply crisis.
__

Been North of 7?

I love it – most don’t, but yeah it is rough, sparsely populated, and filled with bogs, swamps and black flies. I think Northern PQ and On. have some kind of global record for blood drinking/itchy bump insect populations. I think some plants drink blood up there too.

The biggest killer is no jobs. All the Northern cities started around sawmills, pulp and paper, mining, O+G etc.. These are slowly dying via natural forces, and being actively killed off (eg. Trudeau/LPC). The infrastructures around health, Police, Education etc are shrinking along with the the future prospects of these areas. Property taxes also tend to be abusive.

Immigration is the only population growth we get, and they all head where starting out might be easiest (where the jobs and ethnoburbs are) – ie. GTA/YVR.

Northern Canada will probably have its day again, but it will have to wait until earnings are fully decoupled from locations. It’s starting already, and those at the point of the arrow will win the biggest.

#127 Ubul on 02.19.20 at 11:12 am

121 Dina Santos on 02.19.20 at 10:37 am
Those Communist, socialist bastards at the FED and other central banks.

#128 Shawn Allen on 02.19.20 at 11:39 am

Gasoline Prices

About 91 cents in Edmonton. All taxes included. Federal, provincial, carbon and GST.

Roads are almost entirely free to drive on and so it is fair that gasoline taxes be imposed to cover some or all of the cost of roads (I doubt it covers all).

All in all, gasoline is cheap and there has not been much inflation on a percentage basis in at least 20 years.

#129 Smartalox on 02.19.20 at 11:39 am

Remember kids, taking the stress out of the Stress Test ONLY BENEFITS THOSE THAT HAVE REAL ESTATE TO SELL. Or, those that get paid (on commission) to sell it.

Prospective buyers will have to pay more, over longer periods, along with higher property taxes (calculated as a percentage of the property ‘value’). That means you, kids.

#130 Yukon Elvis on 02.19.20 at 11:54 am

Nope. It’s a fake market because of CMHC guarantees that allow and encourage 20x leverage and mandated tax-free profits on houses. There is no free market in residential real estate. It’s the ultimate government rigging job, so higher rates to keep the lid on prices are a reasonable brake on the irresponsible personal behavior said policies have created. – Garth
………………….

Right you are about it being a fake market. And it will stay that way too. The economy would collapse into recession/depression without government support and encouragement. No going back now, low interest rates and high housing costs are here to stay.

#131 Smartalox on 02.19.20 at 12:06 pm

Also, seeing a web link posted to ‘Russia Today’ (Putin’s Propaganda Network) tells me everything I need to know about the rail blockades and the diverse, infrastructure protests.

It’s becoming a bit of a well-worn playbook: diverse ‘action’ groups, ‘leaderless’ and ‘coming together online’ and ‘rallying around #hashtags’ to illegally disrupt western commerce, I see foreign influence. People who ‘like’ provocative posts on Facebook are targeted and whipped into a frenzy. Small monies are transferred to fund ‘grass roots’ activities, in the hope that mass-media report the 30-second soundbites and lend the ruse legitimacy.

Trudeau is doing the right thing: he knows this is a PR battle, and that the optics of having authorities move in and clear out the protesters will feed the Trolls exactly what they need.

For what it’s worth, this is also why the police force with jurisdiction to chase trespassers off the CN tracks (the CN Police) have not yet acted: terrible PR to have one’s private, corporate police force, be seen to be doing the same thing that LED to the need for reconciliation, 1880’s style.

#132 Remembrancer on 02.19.20 at 12:11 pm

#6 Piano_Man87 on 02.18.20 at 4:14 pm

Actually a valuable life lesson for what, $23.99?

#133 AlbertaGuy in AZ on 02.19.20 at 12:13 pm

If the govt really wants to keep the party rolling, why not make the stress test “regionally dynamic” and goose demand where the markets are depressed (ie Calgary/Edmonton).

#134 Steven Rowlandson on 02.19.20 at 12:47 pm

RE#130
“Right you are about it being a fake market. And it will stay that way too. The economy would collapse into recession/depression without government support and encouragement. No going back now, low interest rates and high housing costs are here to stay.”

It adds up to an incentive to flee from all nations with real estate speculation. The fertility rate is inversely proportional to the increase in home prices. Remember that.

#135 Steven Rowlandson on 02.19.20 at 12:48 pm

RE#130
“Right you are about it being a fake market. And it will stay that way too. The economy would collapse into recession/depression without government support and encouragement. No going back now, low interest rates and high housing costs are here to stay.”

It adds up to an incentive to flee from all nations with real estate speculation. The fertility rate is inversely proportional to the increase in home prices. Remember that.

#136 april on 02.19.20 at 12:51 pm

#115 – He’s been right so far. You sound like someone with skin in the game?

#137 Sail Away on 02.19.20 at 1:07 pm

A couple of observations:

Tater- Tesla is back to a 10-bagger. Didn’t you say it was going down to some very specific number? Strange that it did exactly opposite. These sardines are a delicious meal after all.

Bdwy- SPXL is now up 6% since entry, with no slowdown in sight. Are you still holding your inverse SP500?

#138 Remembrancer on 02.19.20 at 1:16 pm

#131 Smartalox on 02.19.20 at 12:06 pm

These RT-spouting nation state agents, fifth columnists and useful idiots crowd are the real ones to stand on guard against, like the song says…

#139 Eks dee Siple on 02.19.20 at 1:19 pm

#131 Smartalox…”I see foreign influence.” Put on some glasses, smartlucks. It’s all home-grown, been brewing ignored for years, obfuscated by false wealth in one-asset-strategy RE, which in its decline is leaving the washed-up shores of a decaying economy. You can only live a lie for so long. Our youth understand and want something better than a banana republic sucking on the teat of the southern neighbour. Status quo is out, change is in, and it will be painful. Rail blockades are just the start.

#140 Tommy Zani on 02.19.20 at 1:19 pm

All the social programs and social benefits paid to all Canadians is a bailout. If you pay more in taxes than in anything received by governments, it is a bailout.

If you work for government and get pensions and benefits paid by taxpayers, it is a bailout. Everyone who is getting cheap mortgage rates 2.3% to 3.0% currently that do not cover inflation and taxes for ripped off GIC and other fixed income investors is getting a bailout.

#141 Eks dee Siple on 02.19.20 at 1:45 pm

#140 Tommy Zani… MF told me to tell you to buzz off to Mogadishu where you’ll be much happier. No taxes! Yay!

#142 newfiepower on 02.19.20 at 1:54 pm

Hi Garth,

As always its a peer delight to read this blog.
I recall not that long ago you stating that within the year we would have another election after the liberals got in.

Well with Scheers non confidence motion today it looks like we may get another kick at the can that is the Canadian economy.

Like you I have been waiting for the correction to come.
I guess the next couple of months will decide if the can gets kicked down the road or squished where it stands.

#143 Sandy Westgate on 02.19.20 at 2:35 pm

Eks dee Siple Why don’t you go live in your socialist crap hole in Venezuela and starve to death. Contribute to Canada and pay some taxes and stop living off others like parasites.

#144 Dan Munson on 02.19.20 at 2:41 pm

it looks like someone does not like the truth that they are a freeloader. I guess the truth hurts when you are sucking off the government welfare wagon.

Eks dee Siple get a job and contribute to Canada and stop being a drain on Canada’s resources and finances.

#145 Blacksheep on 02.19.20 at 2:42 pm

Garth and Yukon are right # 130

“Nope. It’s a fake market because of CMHC guarantees that allow and encourage 20x leverage and mandated tax-free profits on houses. There is no free market in residential real estate. It’s the ultimate government rigging job, so higher rates to keep the lid on prices are a reasonable brake on the irresponsible personal behavior said policies have created.” – Garth
………………….
“Right you are about it being a fake market. And it will stay that way too. The economy would collapse into recession/depression without government support and encouragement. No going back now, low interest rates and high housing costs are here to stay.” Yukon
——————————————————
Some of you are finally realizing (accepting?) what I concluded (and stated here) oh about six years ago.

The System (politico’s) is (are) self protecting.

As the lever pullers of our economy, It (they) will do pretty much what ever is required to keep the one asset (liability?) that 70% of Canadian’s already own, inflated. They (we) economically have no other choice.

Didn’t I just read this blog on the financial retirement crisis? Housing is all many have in regards to significant savings, besides it’s an open fact central banks target at least 2% inflation. Add that to the fact the $ volumes coming out of China in the last 10 years has been distributed in safe havens around the globe, is almost unfathomable.

Rising tides lift all boats (RE & portfolios included)

This is why I have been a RE bull (after 5 years of selling and being a renting bear) since fall 2013.

Those waiting for a RE crash, have simply missed the boat by not paying attention to our changing world and have unfortunately missed the chance to buy before houses became a million bucks in major cities.

Groupthink can be a bitch.

#146 Shawn Allen on 02.19.20 at 3:03 pm

Will Trudeau Let the Police do their job?

Last week Trudeau said he can’t be telling the Police how to do their job.

Then a few days later he made it clear he does not want the RCMP or Ontario police arresting protesters at this time.

Which is it? Police independence or not?

P.S. if RCMP don’t arrest those now blocking rail lines in Alberta then support for an Alberta police force will sky rocket.

#147 not 1st on 02.19.20 at 3:05 pm

The burning is just getting started.

Higher costs should kill Trans Mountain pipeline: opposition
https://www.youtube.com/watch?v=MyGfcJpZB30

#148 Sold Out on 02.19.20 at 3:25 pm

Until the Cons wander in from the socially regressive,oil-laden hinterlands, there will be more Liberal governments.

The vast majority of Canadians believe that climate change is a significant issue, abortion should be safe and legal, and that we don’t negotiate with FNs via a rifle scope.

No one even wants the leader’s job. Maybe MacKay can atone for his perfidy, and unite the party under a centrist coalition; it’s pretty clear that Canadians aren’t interested in another Harper era.

As long ~70% of us own our homes, expect the RE gasbag to wobble ever higher. Trudeau’s a complete himbo, but even he knows that messing with people’s equity is suicide. I bet MacKay would do exactly the same, were he magically elected tomorrow.

Immigration isn’t going to be paused, we can’t build enough rental housing to meet demand. Even if there’s a honkin’ downturn in the economy, people still need a roof over their heads.

I think we have a ways to go yet, before the pitchforks and torches make an appearance.

#149 Blacksheep on 02.19.20 at 3:27 pm

Howard #91,

Wild Bill:

“For many middle class Canadians, their home is the most important investment they will make in their lifetime. Our government has a responsibility to ensure that investment is protected and to support a stable housing market.”

“Well there you have it. Government finally admitting it is in the business of using fiscal and monetary policy to prop up the housing market at all costs.”
———————————
Read this after my comment above.

Cant get to much more cut and dried than that…

#150 Sold Out on 02.19.20 at 3:44 pm

Proof that the Cons would do nothing different from the Libs when dealing with FNs and resource project approval?

https://www.cbc.ca/amp/1.5467303?__twitter_impression=true

#151 Sold Out on 02.19.20 at 3:47 pm

Yeah, the Cons would handle RE differently…

Cuz transit hubs never cause land values to skyrocket.

https://www.thestar.com/amp/news/gta/2020/02/18/ontario-government-proposes-new-powers-to-expropriate-land-reduce-environmental-approvals.html?__twitter_impression=true

#152 Sold Out on 02.19.20 at 3:58 pm

To those who think the grass is greener down south. If Americans are so much better equipped for retirement, why has the percentage of workers 65 and older(7% of pop) increased 40%?

https://mobile.twitter.com/NickVRamos/status/1229768782115229696

#153 Sail Away on 02.19.20 at 11:02 pm

#148 Sold Out on 02.19.20 at 3:25 pm

The vast majority of Canadians believe that climate change is a significant issue, abortion should be safe and legal, and that we don’t negotiate with FNs via a rifle scope.

——————————-

Let me rewrite that for you:

Intelligent people believe that manufactured crises are a significant waste of time and effort, human euthanasia and homicide should not necessarily be celebrated as empowerment, and that we don’t negotiate with lawbreakers.

That’s better.