Unloved

Among its victims, Covid has big-city condos on life support. This has cleaved the real estate market in two. Houses with dirt, in the suburbs or even the sticks, are objects of desire, FOMO and bulbous prices. Concrete boxes in the heart of urbanity are emptying, devaluing and shedding equity. Rentals are piling up. Leases are coming down. The inventory of listings is bloating fast. The epicenter is 416, but this class of housing is now unloved in every major centre.

Here’s why. Followed by reasons it cannot last.

  • Rental demand is plunging. Small investors and amateur landlords are sitting on empty units costing them big bucks every month. In the good times rent barely covered costs. Now, for thousands, the rent is gone. Ouch.
  • Covid killed off gobs of jobs in hospitality, entertainment, the food industry, retail and other sectors where many renters tend to work.\
  • Silly politicians declared a virus moratorium on evictions, signaling tenants could live for free and suffer no consequences. A knife through landlords’ hearts.
  • Airbnb restrictions in Toronto, Vancouver, Montreal and other places have sent large-scale hosts screaming for cover. They have flooded the market with long-term rentals and listings. Down she goes.
  • Tourism is kaput. This is a multi-billion dollar piece of the economy utterly destroyed by government edict. Urban real estate, downtown properties, employment and condos have been negatively impacted.
  • Students at university and colleges aren’t in class, staying home in Mom’s basement, taking online courses. Rental demand has crashed in key areas near these institutions.
  • Economic uncertainty, fears of a second wave and the drop in rents (now 15% in Toronto) has kept investors on the sidelines. New condo sales have been decimated – down 85%.
  • Supply keeps piling up. Every day another 300 resales hit the market, pushing prices lower. There are 12,000 rentals listed on MLS, forcing rents down. Lots of those will migrate into active listings as tenants stay rare.
  • The industry is grossly overbuilding. Urbanation reports a record 78,212 condos were under construction in the second quarter,
  • Covid has made condo living seem close, germy and dangerous. People are freaked out at encountering others in the corridor, the elevator and garbage room. Irrational, but powerful.
  • Immigration is largely gone – massively curtailed by Covid and politics (down 63% so far in 2020). The bulk of immigrants rent or look for entry-level real estate (condos). That demand has evaporated.
  • Cities are viewed by many as less desirable than the burbs or the boonies, especially when four million people are WFH, want more space and delude themselves into thinking this is the new normal.

The results are entirely predictable. Prices are falling for some of the most prime, desirable, convenient, hippest urban real estate in the country. Units that commanded $1,400 a foot last February have dropped to $1,000 and below. That’s a crash of almost 30% in the space of 180 days. New condo sales in Q2 were off 51% year/year in Toronto, and in Vancouver 75% of pre-sale units failed to find buyers.

According to Padmapper, the average one-bedder in the core if now renting for just over $2,000 a month, down from $2,300 six months ago. That price will soon have a ‘1’ handle for the first time in a decade.

So where’s this all headed?

Down. Way down, and fast.

The Covid condo correction has only started. Big declines are yet to materialize over the winter months as these trends take hold, inventory accumulates, renters stay scarce, landlords give up and potential buyers sit on their hands. Cheap mortgages can’t save this puppy. Rates likely won’t go any lower. This is a simply play of supply and demand.

Then, it all changes.

The time line is fuzzy and evolving. But it’s probably safe to make these assumptions for 2021 and beyond.

  • That awful US election will be over.
  • A vaccine will have been approved, and distribution started. Restrictions eased. Social distancing and mask-wearing will start to fade.
  • Therapies will emerge. Cases numbers will fall fast. The second wave will have come and gone. Deaths will continue to drop even if infections do not. Everybody feels safer.
  • Global will growth resumes, economies reopen and markets rage higher.
  • The Canada-US border will be reopened. Flights resumed. Tourism, pro-sports and concerts trickling back to life. Immigration restored.
  • WFH will stop being a thing. Ambitious employees will flock back. The downtown will be repopulating. Office towers will slowly, steadily return to more normal operations.
  • People who thought they’d never commute again will be taking the train, the bus, the streetcar, the subway. Traffic and congestion will be back. All the reasons people wanted to live downtown – to be close to work, entertainment and buzz – will rage again. Cities do not die.

The opportunity?

It’s coming. Buying back into the excitement of a thriving urban core for 30% or even 50% less than in late 2019 would be a win. Get into a quality building with a proactive condo board, adequate reserves and a competent management company. Buy low-rise, not into a 95-storey tower (like just announced at One Yonge). Location is everything to a condo.

Mostly, take advantage of conditions which have not been here for years. Maybe decades. Maybe forever. Oodles of inventory – thousands and thousands of units to choose from. Motivated sellers, some of them bleeding and desperate (my fav kind). Scant competition, so no multiple offers, bind auctions or no-condition offers. And the lowest, most ridiculously cheap mortgage rates ever.

Or, you can raise sheep in Marmora.

157 comments ↓

#1 TurnerNation on 09.17.20 at 2:14 pm

Wrote this hours ago seems to fit the weblog today.

So this is how small business capitalism dies. September is Harvest Season – for our assets. The #s on the telescreen will rule our lives.

Three data points:

1. An Ontario person on Twitter said they had a convo with a News Reporter, was told that “this is a year-long exercise”.

Have I not been saying since the beginning there are planned timelines to this Global rollout? The quarrantine rules will devastate tourism regions (Atlantic).
Air Canada knows. They permanently cancelled 30 stations and routes months ago. Special knowledge or?

2. Seen elsewhere, notice what’s missing…RIGHTS are not being returned. No fall fairs. No events. Half these replies are bots , swaying public opinion. I said in
March in the New System the Individual Rights are no longer. I’ve heard the goal of Communism is Humiliation. Seems so.

“They just extended the mask bylaw in Waterloo Region till May 31, 2021”
https://twitter.com/NiagaraRegion/status/1305604378284429312

3. This fellow, I do not know his veracity, is hinting at year-long as well. June to June.

https://twitter.com/randyhillier/status/1305648563439972354
I spoke with some former caucus colleagues last week.
@fordnation has informed them that Covid and covid restrictions will be with us in Ontario till at least June of next year.
@fordnation apparently has Science that can predict the future of the virus. Brace yourselves #onpoli
7:24 PM · Sep 14, 2020·Twitter for iPhone

——-

The future is big pharma and drugs – again our global elites control our feeding, breeding and movements on this tax farm.
– Map of coming Weed stores in Toronto, Epic: https://www.agco.ca/sites/default/files/map/ONT_CN_ST_E.html
https://www.cnbc.com/2020/09/14/pepsico-to-launch-drink-to-aid-sleep-as-consumers-struggle-with-stress.html
https://futurism.com/neoscope/adding-psychoactive-drug-water

UBI will do? https://www.recorder.ca/news/local-news/addicts-using-cerb-money-for-drugs

“Drug overdoses and deaths have exploded in the Brockville region during the COVID-19 pandemic partly because users have more money to spend on their addiction, city council was told this week.”
^-But were they wearing a mask???

#2 NFN NLN on 09.17.20 at 2:23 pm

“To learn who rules over you, simply find out who you are not allowed to criticize.”

https://www.youtube.com/watch?v=vGzG4Q29Bf0&t=0m51s

Newt Gingrich caught Fox News off guard. Awkward and telling moment for the hosts.

#3 TurnerNation on 09.17.20 at 2:25 pm

Small business the target. This is not about science or health it’s a political tool, global agenda. Give us the numbers. Give us the science. Give us the symptoms and results. Else continue giving up rights for numbers:

https://fox17.com/news/local/covid-19-emails-from-nashville-mayors-office-show-disturbing-revelation

“NASHVILLE, Tenn. (WZTV) — The coronavirus cases on lower Broadway may have been so low that the mayor’s office and the Metro Health Department decided to keep it secret.
Glover says he has been contacted by an endless stream of downtown bartenders, waitresses and restaurant owners asking why would officials not release these numbers?

“We raised taxes 34 percent and put hundreds literally thousands of people out of work that are now worried about losing their homes, their apartments…and we did it on bogus data. That should be illegal,” Glover said.”

#4 Toronto_CA on 09.17.20 at 2:31 pm

Prices have a LONG way to go before buying a condo makes sense to me in Toronto or Vancouver.

Condo fees in Toronto seem to be some of the highest in the world (inexplicably) – even if you get a good deal on the condo you could be looking at extortionate condo fees and “special assessments”.

There’s better places to park your investment money than a TorVan condo I think. Let’s see if prices keep plummeting though…

#5 KNOW IT ALL on 09.17.20 at 2:31 pm

DON’T take the VACCINE!!

It’s going to POISON your blood and alter your brain cells.

#6 Dirty Dan on 09.17.20 at 2:34 pm

DELETED

#7 Piano_Man87 on 09.17.20 at 2:42 pm

Garth, have you seen The Social Dilemma, yet?

Very fascinating documentary, I hope you check it out. Could make for a good post, as it relates to the polarized political landscape that has emerged in the last decade. Moreso elsewhere, but still, evident here.

#8 Dirty Dan on 09.17.20 at 2:43 pm

DELETED

#9 Bill on 09.17.20 at 2:44 pm

Along with Garth’s view Scott M I believe nails it on what possibly next for RE and below our clown at the helm couldn’t run a bubble machine. Zero cost analysis on ANYTHING….just paper over it eh T2?
T2 fiscal bus has no brakes so therfore our grand kids can worry about the repercussions down the road?!!

https://financialpost.com/executive/executive-summary/posthaste-rents-in-canadas-two-most-expensive-cities-are-dropping-at-record-rates/wcm/d3b71550-a97d-4838-8864-e1a1c234e0ef/

https://financialpost.com/news/economy/justin-trudeaus-credibility-as-a-fiscal-manager-is-shot-hell-have-to-restrain-spending-to-get-it-back/wcm/34fc8c33-4610-4132-89d6-039df1571722/

#10 Millennial 1%er on 09.17.20 at 2:47 pm

Forget condos… buy parking spots in downtown. People must be bleeding cash flow out of them. Lower buy in & therefore less risk. You can mortgage them out and when the human organism finally kicks this virus you’ll be able to dump your bags on the next wave of immigrants.

#11 tbone on 09.17.20 at 2:53 pm

No thanks , i wouldnt buy a condo even at gunpoint.
Not for investment purposes or to live in.
I will put more money into the market as i have a stash still sitting in cash . Think i will wait for the second wave to pick up some stuff on sale .
Not going to deal with tenants anymore. Been there , done that .

#12 mj on 09.17.20 at 3:00 pm

BOE is starting to talk about negative rates. If things don’t get better, I wouldn’t be surprised if they start talking about here next year.
https://www.youtube.com/watch?v=JpzJk22WLNk

#13 Herkunft on 09.17.20 at 3:00 pm

Just bought myself REET ETF (global REITs) within RRSP. So, not all your words of wisdom get lost, Garth :)

#14 CJohnC on 09.17.20 at 3:10 pm

#5 Know it all

Take the vaccine! From the sounds of it you could use having a few of your brain cells altered

#15 Yukon Elvis on 09.17.20 at 3:28 pm

The opportunity?

It’s coming. Buying back into the excitement of a thriving urban core for 30% or even 50% less than in late 2019 would be a win. Get into a quality building with a proactive condo board, adequate reserves and a competent management company. Buy low-rise, not into a 95-storey tower (like just announced at One Yonge). Location is everything to a condo.
……………………………….
Good call on the condos. Boomers are retiring, cashing out, and downsizing ( i did ). This is exactly what they are looking for. No more shovelling snow, mowing lawns, vacuuming the pool or cleaning the gutters. Just lock the door and take off for a month or six.

#16 ADPeee on 09.17.20 at 3:31 pm

How can Canada ADP Jobs report +1,969,000 jobs over past 5 months, when the revisions month later for oeach month show -7,078,223 jobs lost? Any clarity on reading these reports would be appreciated please. Are these cumulative?

https://www.newswire.ca/news-releases/adp-canada-national-employment-report-employment-in-canada-decreased-by-205-400-jobs-in-august-2020-870528469.html

>
Employment in Canada decreased by 226,700 jobs in April
(In May published report, the April total of jobs lost was revised from -226,700 to -2,361,700)

Employment in Canada increased by 208,400 jobs in May.
(In June published report, the May total of jobs added was revised from 208,400 to -2,951,400)

Employment in Canada increased by 1,042,900 jobs in June.
(In July published report, the June total of jobs added was revised from 1,042,900 to -1,764,600 )

Employment in Canada increased by 1,149.800 jobs in July.
(In August published report, the July total of jobs added was revised from 1,149,800 to -523,000)

Employment in Canada decreased by 205,400 jobs in August
(In September published report, the August total of jobs added was revised from -205,400 to TBD)

#17 Bill on 09.17.20 at 3:34 pm

#13 Herkunft

Your far better off to buy Jeffrey Olin vision capital
fund. Blows away any other REIT market and the TSX performance. Actively managed, trading discounts to the market and even shorting like in the case when Alberta’s oil blew up.

#18 Howard on 09.17.20 at 3:38 pm

#4 Toronto_CA on 09.17.20 at 2:31 pm
Prices have a LONG way to go before buying a condo makes sense to me in Toronto or Vancouver.

Condo fees in Toronto seem to be some of the highest in the world (inexplicably) – even if you get a good deal on the condo you could be looking at extortionate condo fees and “special assessments”.

————————————

But property taxes in Toronto and especially Vancouver are some of the LOWEST in the world, are they not?

#19 Dispatcher101 on 09.17.20 at 3:49 pm

I just bought a house in Southern Alberta…

#20 Tarot Card on 09.17.20 at 3:51 pm

I have been reading allot lately about the best time to buy is when everyone is selling, and yes I believe that those with money will profit huge. This bottom will never appear again in our life time well except toilet paper.
It boils down to the same people including myself who are still worried about the future. And we will miss out on this opportunity. In reality you are correct Garth this is a fantastic opportunity for those who have vision and money.
All the best! Thanks for the blog.

#21 mike from mtl on 09.17.20 at 3:53 pm

#4 Toronto_CA on 09.17.20 at 2:31 pm
…Condo fees in Toronto seem to be some of the highest in the world (inexplicably)…
/////////////////////////////////////////////////////////////////

Yeah don’t understand their accounting and how they come to those figures. Quick math.

Say each unit pay about 350 in fees (some more, less), 12 units per floor, 35 floors = $147k PER MONTH or 1.7 MILLLION a year. 10 years of that provided does not go up, yeah right, could buy the original build value of the building.

Obviously I understand there’s maintenance calls, cleaners, security, insurance but really??? Yeah it is not like your typical cheapo owner SFD that defers major maintenance as long as possible or worse do it yourself.

No Garth, low rises are notorious for special assessments as they’re typically cheaply wood built and costs spread across less ‘owners’. All the disadvantages of cornflake SFD and strata shared.

#22 Howard on 09.17.20 at 3:57 pm

#15 Yukon Elvis on 09.17.20 at 3:28 pm

Good call on the condos. Boomers are retiring, cashing out, and downsizing ( i did ). This is exactly what they are looking for.

———————————

Is it? I don’t think so. My Boomer parents in the 416 never plan to leave their SFD, and neither do any of their friends of which I am aware. For those with difficulty climbing stairs, a chair lift to the rescue. I think you underestimate how poorly downsizers will cope with suddenly having to share walls with loud, pot smoking strangers after 40-50 years of bliss in a large house and lot.

#23 JB CONDO DEATH on 09.17.20 at 4:03 pm

#4 Toronto_CA on 09.17.20 at 2:31 pm

Prices have a LONG way to go before buying a condo makes sense to me in Toronto or Vancouver.

Condo fees in Toronto seem to be some of the highest in the world (inexplicably) – even if you get a good deal on the condo you could be looking at extortionate condo fees and “special assessments”.

There’s better places to park your investment money than a TorVan condo I think. Let’s see if prices keep plummeting though…
…………………………………………………………
ITS IN THE SMALL PRINT PEOPLE CONDO FEES ANS S A’S ARE GOING TO GET YOU EVENTUALLY!

#24 Mehling on 09.17.20 at 4:03 pm

“Signature mass-timber Terrace House stalled under court protection from insolvency”

“Developer said cost overruns and lack of capital to cover them were behind financial troubles, according to court filings.”

https://vancouversun.com/news/local-news/signature-mass-timber-terrace-house-stalled-under-court-protection-from-insolvency/wcm/b12d15e9-eeb0-4c6f-a840-892d751e009f/

I wonder what will happen to the pre-sale buyers on this project. Concessions offered?

There are many projects in Vancouver which have already sold out in the past few years (currently under construction) which start at $2,000-$4,000 sq foot for “entry level” condos.

#25 Justin S on 09.17.20 at 4:07 pm

Very, very interesting post. I agree with Garth. Some serious opportunities on the horizon. Cities will thrive again – 100%.

#26 Dolce Vita on 09.17.20 at 4:12 pm

“Or, you can raise *sheep in Marmora.”

*sans N. American growth hormone, selective breeding & Lord knows what else you’ve done to the poor things.

The World needs more Pecorino (and Italia needs the cash esp. Marmora).

They are more than sheep Garth, all 62 of them (about the number of residents in Trauma +20 storey condo high rises):

http://www.comune.marmora.cn.it/Default.aspx

Povera Marmora:

“Eventi
Non ci sono eventi da visualizzare.”

“Events.
There are none.”

————–

But hey, a couple, three hour drive is (you know, like DT YVR to Abbotsford & the scary beyond as if Abbotsford isn’ìt scary enough, DT Trauma to Hamilton “rush hours”):

Torino, Mont Blanc NE of there
Nice
Genova
Langhe (go pick some truffles [as good as the hoity toity French ones, better tasting & a lot cheaper] and while there, drink Barolo.

…don’t know shit from clay Canadesi, AS USUAL.

Viva L’Italia and it’s 62 Marmoresi and their Pecorino (and NO Events).

#27 JSK on 09.17.20 at 4:14 pm

2021 – more unemployment, more homelessness, higher crime rates, higher food prices and lower rents in places people don’t want to move back to. Tax oblivion by May.

Cities will thrive, but not in a year. A decade later, maybe.

#28 Linda on 09.17.20 at 4:18 pm

I’m with #11 ‘tbone’. Would never purchase a condo, though I would consider renting one. The so called convenience of not having to do yard/work maintenance or to lock/leave on vacation is not enough to offset ever increasing condo fees, special assessments or out of control condo boards. Presuming condo fees average around $300 per month, that alone should suffice to hire a company to do basic yard work as required. Or to cover most if not all the cost of small home repairs on an annual basis. In fact we just received our local lawn care/snow removal company quote for snow removal for the coming winter. $241.50 per month, which is due to our having a corner lot with extra sidewalk to shovel. Service is stellar to boot.

#29 Sheep farmer from Marmora on 09.17.20 at 4:21 pm

OK, Mr. Smartypants…. What effect will all of this have on the unit values of private multi-unit residential REITs that tend to get re-evaluated but once per year, most of which have calendar year-ends?

None. – Garth

#30 Dolce Vita on 09.17.20 at 4:33 pm

It’s the Vodka + Frutti Rossi Juice.

(and no, I’m not picking up where SM left off, though, I smoke)

Mea culpa:

Torino, Mont Blanc *NW of there
.
.
Langhe (go *dig some truffles up…and still SO VERY correct: drink Barolo, che buono!).

FWIW.

——————————–

I liked your “The time line is fuzzy and evolving.” list.

I HOPE you are SO CORRECT about that Garth.

BTW, not looking good in Europa. New cases went BOOM today (the Brits up to 6500 by the end of the day, numbers below Sept. 17, 800 h, CET):

https://i.imgur.com/0dK0wuP.png

What worries me most is that deaths starting to creep as well, usually a month or so time lag between new cases and deaths here (not as bad as March, still gave me pause:

https://i.imgur.com/yBbOYdD.png

Cases surging upwards as well, save Italia and Deutschland (again, UK at 6500 end of today):

https://i.imgur.com/WusZevB.png

Spain, France like the March 1st Wave peak. Their Regional “semi-lockdowns” are NOT working.

AGAIN, hope you are correct about 2021 Garth. THAT would be SO very nice.

Economies can then begin to recover. Does not look like it now though.

#31 Ronaldo on 09.17.20 at 4:36 pm

#22 Howard on 09.17.20 at 3:57 pm
#15 Yukon Elvis on 09.17.20 at 3:28 pm

Good call on the condos. Boomers are retiring, cashing out, and downsizing ( i did ). This is exactly what they are looking for.

———————————

Is it? I don’t think so. My Boomer parents in the 416 never plan to leave their SFD, and neither do any of their friends of which I am aware. For those with difficulty climbing stairs, a chair lift to the rescue. I think you underestimate how poorly downsizers will cope with suddenly having to share walls with loud, pot smoking strangers after 40-50 years of bliss in a large house and lot.
—————————————————————-
Totally agree Howard. I’m the oldest of the boomers and those in my age group are saying the same. Staying in house til they carry you out. Most of us have already done the condo thing back when we bought our first home and learned back then that this is not what we want to retire to. Too many risks associated with these things. Many stories of people having to cough up thousands for leaky buildings and other problems. No thanks. Not for us.

#32 Tbone on 09.17.20 at 4:38 pm

Nobody I know is selling their house to downsize into a condo either . it’s not expensive to stay in your own home and taxes are cheap too . 5500.00 for a two story in the 416 . couple of grand to cut grass and shovel snow is much cheaper than condo fees .
I know you need a roof and a furnace every 15 years .
That’s one year of condo fees for a decent size condo .
Still cheaper to stay in the house .

#33 crammer on 09.17.20 at 4:38 pm

“• That awful US election will be over.”

——

Yeahhhh…maybe! Only if there is a clear winner on election night.

The American networks keep talking about the mail-in vote situation. With record numbers voting via mail, experts are saying expect it to take several days, maybe weeks, to count the ballots. Especially a problem in swing states if it is close. Couple with Trump telling everyone every day that it will be the most fraudulent election in American history, and the only way he is going to loose is if the election has been rigged. Forty percent of the electorate are his base and they cannot and will not believe that he can loose in a fair election—because Trump has told them so! Add to this, idiots supporting Trump in government have actually called for armed insurrection if he loses. Add to this, some fear (based on his own words) that Trump will NEVER concede defeat.

The bottom line, it could turn into the United States of Belaruse, and total chaos post election. It may not be over Nov. 4, Garth.

#34 Ronaldo on 09.17.20 at 4:40 pm

#28 Linda on 09.17.20 at 4:18 pm
I’m with #11 ‘tbone’. Would never purchase a condo, though I would consider renting one. The so called convenience of not having to do yard/work maintenance or to lock/leave on vacation is not enough to offset ever increasing condo fees, special assessments or out of control condo boards. Presuming condo fees average around $300 per month, that alone should suffice to hire a company to do basic yard work as required. Or to cover most if not all the cost of small home repairs on an annual basis. In fact we just received our local lawn care/snow removal company quote for snow removal for the coming winter. $241.50 per month, which is due to our having a corner lot with extra sidewalk to shovel. Service is stellar to boot.
——————————————————————
Totally agree Linda.

#35 Catalyst on 09.17.20 at 4:54 pm

The idea prices would be anything close to 50% lower is absolute disconnected from reality. I generally agree condos downtown TO will/are under pressure and think 10-25% being the extreme downside. If we recover in one year time and we still have low rates for 3 years, we could be talking a condo boom this time next year so you will have to be really good at your timing.

#36 Dolce Vita on 09.17.20 at 5:06 pm

Further to…

I liked your “The time line is fuzzy and evolving.” list.

The mood here in Europa is not good Garth, forget about all the fancy charts and numbers. Just read the dailies. I know for Canada you worry about the USA on trade alone BUT 4 of the G7 are in Europa.

The Spanish and French would rather talk about anything than COVID (El Pais, El Mundo, Le Figaro).

I mean to get COVID info in El Pais, you have to click on the EN button, the Spanish version not much to say. Pretty much the same with the French (they bury headlines like today’s “10.593 nouveaux cas détectés en 24 heures, un record” past the 1/2 way mark of their main web page).

Deutschland the same. DW and the normally chatty Der Spiegel, not a word. Even kinky Express.de prefers to carry stories about how Germany is restricting travel…well, to almost all her neighbors (like it’s their fault German cases are on the rise) – save Italia but not Holland, Vienna or Budapest:

https://www.express.de/nrw/amsterdam–den-haag-und-co–reisewarnung-fuer-teil-der-niederlande—was-das-bedeutet-37359726

Brits the same. Normally, Rule Britannia BBC preferring to talk about Regional restrictions that the overall situation.

…and Italia, no matter how bad (or good) she will level with you on cases and deaths, CHATTY AS EVER, be it Commie Il Manifesto, neutral RAI, Left of Center La Repubblica, La Stampa, Corriere della Sera or Righty Il Giornale and we hate everyone except the Pope, Il Foglio.

——————————

The mood is grim, I’d say depressed, in Europa Garth and this has to affect their economies. Something has to break the “bury head in sand” syndrome save talk your head off Italia.

I hope it’s your list Garth that sees that true.

#37 Gravy Train on 09.17.20 at 5:07 pm

#276 NSNG on 09.16.20 at 11:49 pm
“But that is the whole point. Where do you think the government finds the money to do this ‘public good’?” From taxation, issuing bonds and borrowing for capital projects. Duh! What does that have to do with anything I wrote? Do you even understand what I wrote?

“They borrow it from the private sector and pay it back with the tax dollars of people who will never benefit.” Never benefit? Do you or your family not use hospitals, schools, libraries, buses, streets, street lighting, etc., etc.? Do you not benefit from national defence, a police force, fire protection, a health-care system, a transit system, sanitation services, etc., etc.? How would the private sector provide all this? What world do you live in?

“So investors are still making a profit and are more than willing to invest…as long as all the risk is put on people who have no say in the matter…like future generations.” Again, how would the private sector provide all these public or quasi-public goods without contracting with government? You still haven’t answered the question!

“So I have two issues with your point:
• That it is not a public good when you are taking from some and giving it to others via tyranny of the majority. I have no idea what that even means. You clearly don’t understand the characteristics of public goods, and the reasons why free enterprise could never produce such goods on its own, i.e., without government paying for them.
• That the private sector does not profit from these government ‘investments’.” The private sector only produces public goods when it contracts with government. Explain to me how private-sector builders could make a profit from building a lighthouse without government paying for it. :P

#38 Yukon Elvis on 09.17.20 at 5:13 pm

The opportunity?

It’s coming. Buying back into the excitement of a thriving urban core for 30% or even 50% less than in late 2019 would be a win. Get into a quality building with a proactive condo board, adequate reserves and a competent management company. Buy low-rise, not into a 95-storey tower (like just announced at One Yonge). Location is everything to a condo.
………………………………..

Garth’s description fits my condo in Kelowna almost exactly. Residents are over 55 and it is very quiet. Across the street from a park, 2 blocks to the beach altho we have a pool, one block to shopping, medical/dental, bus. Quality building, mature condo board, good balance sheet, full time caretaker/landscaper, low strata fees with only 10 dollar increase in past 3 years, and zero complaints. People only leave here when they die and the units sell very quickly. I would never move back into my old house, too much work.

#39 TurnerNation on 09.17.20 at 5:14 pm

Smoking man’s lessons live onward.
I use the saying Tax Farm because he used it and I work in one.
If our forum host bides lessons on Bikes, Babes and Balanced Portfolios then SM hit us with: “The Machine – and its games”.

P. Floyd lyrics:
“Welcome my son, welcome to the machine
Where have you been?
It’s alright we know where you’ve been
You’ve been in the pipeline, filling in time
Provided with toys and ‘scouting for boys’
You brought a guitar to punish your ma
And you didn’t like school, and you
Know you’re nobody’s fool
So welcome to the machine”

#40 Brian Ripley on 09.17.20 at 5:15 pm

My chart of Vancouver, Toronto and Calgary SF detached house prices in $CAD and $USD is up with August data:

http://www.chpc.biz/canadian-housing-in-usd.html

House are cheaper by 24% in USD

If Canada becomes a bedroom community of the U.S. as a result of Trump’s horror show handling of … everything, perhaps we will see a 1960’s wave of new American neighbours in our communities.

I have one on my block now.

#41 Bdwy on 09.17.20 at 5:18 pm

Is it? I don’t think so. My Boomer parents in the 416 never plan to leave their SFD, and neither do any of their friends ….. underestimate how poorly downsizers will cope with suddenly having to share walls with loud, pot smoking strangers after 40-50 years of bliss in a large house and lot.
…..
Bingo for this genx too. King of the castle.

In a condo id be forced to pay 3x to have someone ocassionally shovel or mow. Id have to be near dead to not want to do it myself anyway. Exercise and results, a win win.

Was thinking of renting out the place for extended travel. Looked up rates. Wowsa. Half duplexes 4300 to 5500 for small cramped rooms on shit busy streets in east van. Kinda shocked. Already get good coin for the basement.

#42 Rodeo time on 09.17.20 at 5:30 pm

Condo downtown Calgary soon to be juicy?

#43 willworkforpickles on 09.17.20 at 5:54 pm

I’ve said it for months and years here but especially emphasized it in the last few months. The non greater fool with cash – not the frenzied FOMO stricken bid up buyer are the ones laying in wait to buy real estate for pennies on the dollar.
The greater force. The ones with cash who don’t need to buy RE but will as an investment at greatly reduced price’s. The pay what they’re willing to pay or they simply walk away set of future buyers.
The time is nearing for them as i said months back (when no one was listening).
I have another message to post on a topic no one listens to with regard to interest rates but i don’t like to post overly long messages so i will post it separately.
It is a message for those with cash who wait to buy RE at pennies on the dollar and why i wanted to post this message in the first place.

#44 Garth's Son Drake on 09.17.20 at 6:02 pm

Garth bro – Kelowna rents are up on pad mapper. Inching closer to 2k per month just for a basic unit. Soon, all of BC will be 2k per month.

Meanwhile…

More than 8,000 businesses in Metro Vancouver have closed since February, according to Statistics Canada, while the same region has lost 149,100 jobs. The unemployment rate has climbed to 11.6 per cent from 4.6 per cent before the pandemic.

Now Horgan wants a snap election. I would vote for Horgan, but if he calls a fall election in the middle of this pandemic I will be voting against him. Nobody wants to be going to the polls during a pandemic and could be a costly mistake for the NDP.

Don’t even get me started on the failed reopening plan.

Second wave coming? Dude, it is already here. Looks like a tidal wave.

If I was a school teacher in the public system I would quit. Not even the pension is worth the risk.

Thursday rant complete.

#45 Dolce Vita on 09.17.20 at 6:04 pm

One last thing on depressed Europa AND hot off the press here.

Seems Gov UK saw the same numbers I was taken aback by today and had an even bigger kanipshit than I did. Now they’re acting AMD, their MSM wakes up…

10 MILLION in lockdown:

https://twitter.com/BBCNews/status/1306711465488011264

Hospitals to clear beds for spike in 2 weeks time:

https://twitter.com/BBCNews/status/1306701483648442371

The Regional lockdown won’t work. Hasn’t in Spain or France, doubt it will in the UK as well BUT hope springs eternal.

Still I wish the UK all the best. They are Canada’s largest Europa trade partner.

#46 Doug t on 09.17.20 at 6:11 pm

I hear horror stories of the loons that sit on strata counsels and hold everyone hostage- nope no thanks – don’t need anymore exposure to crazies as it is – PLUS in Victoria those monthly maintenance fees are anywhere from $250 to $1000 per month

#47 N on 09.17.20 at 6:15 pm

Change is happening all around us…..

The First Massive Change To Banking in 100 Years
https://m.youtube.com/watch?v=n4xxmRwtQIU

#48 Old Man River on 09.17.20 at 6:17 pm

“Cities never die.”

—————

Garth, um, Detroit, Cleveland, Buffalo, et al.

#49 Sandro on 09.17.20 at 6:17 pm

Saved this blog so I’m holding you to it Doug. Now I wait for my 50% off condo in Toronto.

#50 earthboundmisfiit on 09.17.20 at 6:22 pm

Incompetent management, know nothing imperious directors, insurance issues = the never ending nightmare. Then there’s the dreaded “Special Assessment”. Condo? Never, never never.

#51 Leftover on 09.17.20 at 6:23 pm

Buying a condo over the past few years was equivalent to buying a timeshare in the 1990’s – seemed okay until the fees accelerated and made owning one of those dogs more expensive than just getting a hotel room for a couple of weeks every year.

I wouldn’t sink any money into a condo today unless renting it paid at least 5% cap triple net. I have no idea what that translates to relative to current prices, but I wouldn’t be surprised if there are a lot more projects cancelled and developers running for the exits.

#52 Rusty Winchester on 09.17.20 at 6:26 pm

Any predictions on what’s going to happen with those overpriced homes in the burbs? Buying into the downtown core at lower prices might be great for some, but will we see the detached prices fall again once that trend resolves?

#53 Old Ron the Realtor on 09.17.20 at 6:31 pm

If you read the entire article you will realize that it is quite balanced. It is not doom and gloom. It is a realistic picture of the Toronto Condo market. If you need a condo for a principal residence, or investment, then wait, then wait some more.

This once in a lifetime perfect storm will present some splendid opportunities, but resist the urge to jump too soon. I have survived three crashes — people too often get back in the market after about a 10% correction. This will fall more. How much ? I do not know, but you will be rewarded for your patience.

#54 not 1st on 09.17.20 at 6:32 pm

Or it will all be gone Nov 4.

#55 aW on 09.17.20 at 6:34 pm

I miss Smoking Man.
Turner Nation is my new fav.
Dolce Vita is long winded with nary a point – we get it, you live in Europe, super cool.

At least that person copy/pasting Victoria housing stats from their blog has given up. I’m not even sure what they were even really getting at.

I miss Smoking Man. I need more herdanomics lessons :(

#56 Penny Henny on 09.17.20 at 6:37 pm

There is going to be massive shutdowns everywhere this winter in the Northern hemisphere, sad to say.
Those who have already decided the progression of this virus have let you somewhat enjoy your summer now be prepared to give up your rights.
One workplace in Mississauga had (supposedly) 61 cases of Covid, but the name of that business is none of your business.
Can we actually believe the number of cases being reported? Number of cases are easy to fake especially if you there are no names, deaths are much harder to fake cause then they have names.
All I know is that there are only 50 some people reported to be in hospital in ALL of Ontario from Covid (or with Covid) and more and more of our rights are being taken away.
I pity the small business owner.

#57 Tom on 09.17.20 at 6:40 pm

Haha Garth you too funny. You make it sound like majority of people have a choice. With houses at $1.5MM in GTA and $1MM in Barrie and Kitchener all they can afford to buy or rent is a condo.

#58 Froggy on 09.17.20 at 6:45 pm

Catalyst your 100 percent wrong. I feel conds are going to a low of 400 to 500 a sq. Ft. which is lower than 50 percent and for retirees won’t don’t worry they own about 40-50 percent of homes with dirt 60-70 years of age and they slowly be dieing out the next 10 years like 30 percent so this down spiral will last more than 10years with the biggest downward in the first few years maybe 35 percent on average condos losing more than 40 and people in homes eating drywall can’t sell under water that’s all she wrote thats my call no jobes no money you figure it out

#59 Attrition on 09.17.20 at 6:45 pm

Dolce – how come, in between your lap-dawg fawning praise of ‘your Liege’ (cringe) you never mention the good news stories in your beloved Europa? Like Sweden, and now Denmark?

How about you tell us about the death/ICU rates in those places, and the current state of local economies and lock downs?

Garth – the ‘awful’ election? Come on man, it’s going to be epic!!

Here’s what’s going to happen: Trump will win a majority, and the Marxists camouflaging themselves under various causes (BLM etc.) left will protest with much indignant righteousness, empowered by their belief that it just can’t be.

This is the anarchy you fear: the Leftists not accepting the election result; the democratic will of the people. No surprise there, they despise free and fair elections, the common man and woman being enfranchised with the power of a vote.

The difference this time, with Trump holding a solid second term and clear law and order mandate, is that the anarchists and rioters will be put down by force as they should be.

Sure, Neil Young will be able to write a new album about those who choose to martyr themselves and get cut down by the state, and they may number in the hundreds or more, but rest assured the people shall rejoice…

Don’t fret the speed bumps on the road to a stronger democracy – instead, relish the coming beauty of witnessing history as the neo-Marxists are expunged like so many puss-filled pimples from the world’s greatest democracy.

Dolce and his Euro-centric socialist ilk might cringe, but I for one can’t wait…

#60 I believe everything on television on 09.17.20 at 6:48 pm

world banks says it ends in 2025, page 6

http://documents1.worldbank.org/curated/en/993371585947965984/pdf/World-COVID-19-Strategic-Preparedness-and-Response-Project.pdf

#61 prairie person on 09.17.20 at 6:48 pm

There may be a flood of condos coming or already here but SFHs are in such demand, it is like a mania. My son and his wife put up their home for sale last spring. They live just across the border from me in Washington State. Didn’t sell. They pulled it. Last week they got a call from a real estate agent. Do you still want to sell. Yup, sold. Just like that. The Canadian side is just as crazy. Covid rising. Smoke so thick I could barely see the neighbour’s this morning. Doesn’t matter. I thought prices would fall. I don’t know who is doing all the buying but one house had a sold sticker on its sign before the end of the day it went up. You’ve got to have money. Not just for the price. My strata fee has gone from 500 to 1800+. It’ll go higher.

#62 Cbo on 09.17.20 at 6:55 pm

Also consider that the massive run up in towns and SFD, once again, make condos appear to be a steal at $1000 sq ft. (These were $450 a foot 10 years ago).
W 5 yr fixed at sub 2% available for the foreseeable future, condos will have another ascend up and to the right once again.
The next year is dicey as per reasons listed above.

Condolences to SM’s family, friends and fans. I was sorry to read about his passing as well.

#63 willworkforpickles on 09.17.20 at 6:58 pm

A RE price correction could be coming to all property types in the coming year and not just to condo’s which are pretty much a given at this point.
In my last message i said even those who wait to buy with cash for pennies on the dollar, their time may be coming and could due to slowly rising circumstances with interest rates…. latest newsflash from the Fed just in notwithstanding.
There are two nasty little catalysts about to hatch that could move the Fed and BoC to raise interest rates sooner than what they are prepared to admit to.
Better to floss with bs and sit on their hands until they go numb than breathe any semblance of truth and reality in the decade of lies…this decade (2020’s).
….Just in: Fed plans to hold interest rates at near zero until at least 2024.

First off – there’s China holding massive US debt looking to one day de-throne the US dollar as the worlds reserve currency. (tariff retaliation and other deep resentments)
This will happen as China moves slowly…s…l…o…w…l…y… selling off US treasuries but to inspire other countries to do the same deterring them from purchasing those treasuries becoming counter productive to do so.
Countries holding US debt are left with no choice but to do the same or be left out of the greater scheme of things down the road still holding near worthless to worthless US treasuries in the end.
China and the rest of the world will take the economic pain minimalized at a slow sell off pace.
As this global transition begins to unfold, (and is) pressure on interest rates over here will begin in the early going.
China’s dumping of U.S. Treasuries will in effect begin to flood the bond market which would impact the U.S. government’s ability to issue new debt at the low interest rates it desires, forcing up the cost of all its new borrowing.

Secondly – Canada and the US are in unchartered waters never before seen by the Fed or BoC and neither do they know how to deal with it.
Never in history has there been this level of debt creation (borrowing) and…a…n…d…coupled with unemployment levels nearly 3 times that of the great recession, even with unemployed levels easing somewhat over the summer months but due to increase into the fall and winter.
You can print money like no tomorrow in good times of low unemployment and high productivity (and they did) and not have runaway inflation.
Can you print money to infinity (much much more than before) in times of unemployment numbers off the charts and growing and not have runaway inflation.

Runaway inflation… or rising interest rates to curb it.

The two systems, Canada and US and the difference with regard to how the debt is handled where the debt is held and who the debt holders are means little, as Canada is joined at the hip economically with the US and interest rates will move in lockstep as they have.
The future (of interest rate increases) will be here sooner than many think.

#64 Drinking on 09.17.20 at 7:06 pm

The real test will be this fall/winter; if we get through it ok then I can see a huge upswing next year.

A cure for Covid will never happen just like a cure for the seasonal flu barely ever works, to each there own! And “NO” I am not anti vaccine for the proven that have saved hundreds of millions if not more lives!!

We just need to learn to live with it. Stay angry and learn the truth!

#65 Freedom First on 09.17.20 at 7:09 pm

#55 aW

Yes. Me too. Ditto. I am also a member of the Turner Nation fan club.

Of course, I love your Blog Garth.

Freedom First

Freedom First

#66 Nonplused on 09.17.20 at 7:17 pm

I dunno. One of the things we will be back to facing when the economy does recover is energy scarcity, particularly for oil. The fact of the matter is that the EROEI (energy return on energy invested, so it is a purely physical measure) has been declining for years. This means new oil supply is becoming more expensive to produce.

But the problem is that the economy is powered by energy. If increasing amounts of energy are being plowed into producing it, that leave less energy available to power the other parts of the economy. This creates a formidable headwind on the economy.

This was the real lesson of 2008. And 2014. And 2018. And the 70’s. Energy is different than other commodities in that once it becomes too expensive the economy cannot continue with business as usual. Structural changes must be made towards efficiency. So I don’t think we can go back to congested freeways and business as usual. If we do we will just get another oil price shock and another recession.

What about shale oil? Well, nobody ever made any money on it and nobody ever will. The EROEI is too low. Therefore it will always be too expensive to produce for consumers to afford. It was a debt inspired frenzy of optimism that ended in tears. By the end of 2021 the shale patch will be largely in receivership. The process is already underway. The EROEI is better for shale gas but I don’t want to get into the reasons why just now. This is already going to be long enough.

So the days of happy motoring and jet-set vacations are never going to fully recover. This could be good news for the downtown core as people try to live closer to work, but it also means some of these other changes that covid pushed along are permanent. They were on the horizon for economic reasons anyway, and the technology was already here. Once again the porn industry saves society (in the early days it was a major incentive to build out high speed internet, just like they sold a lot of VCR’s years earlier. You need content to motivate consumers to purchase these fancy gadgets and Hollywood was slow to adopt both technologies since they were tied to the “theater” model, although they are on it now.)

So WFW will only return to the extent that it is more energy efficient than WFH. For some tasks that have a high value-add due to in person collaboration WFW will be the case. For other jobs that do not require much collaboration or benefit from an office environment, it will not. The trend was already underway. Same as how the Jeep Cherokee (post oil crisis) looked a lot different than the Jeep Wagoneer (pre oil crisis). “Honey, I shrunk the car!”

The ongoing theme for the next 20 years will be doing more with less energy, or at least until small nuclear takes off, assuming it isn’t too expensive. It has actually been the theme since 1970.

#67 Flop... on 09.17.20 at 7:20 pm

Don’t normally work on condos.

Currently doing a major renovation in one.

Opposite of the McDonalds jingle.

Not loving it.

If you think they are tight to live in, then they are even worse to work in.

The only thing I can compare my current working situation to, is trying to cook a gourmet meal in a kitchen with no counter space.

You have to pull one thing out and put one thing back.

Building looks solid, the finishing inside the unit, questionable.

When I used to do my real estate blog, some of the maintenance fees I used to come across were obscene, and almost like a second mortgage.

I just looked at some of the units for sale in the complex I am working on, and it sort of ranged from 300 bucks a month to late sixes for the over million category.

Doable.

I’ve noticed the yard work guys mowing and cleaning twice a week.

Even had a guy start power washing the windows of the unit I was working in, which scared the crap out of me because I had to patio door open and it took me a few seconds to work out where the water was coming from.

All in all, yeah low rise, park like setting, looks well managed, but as someone once said, the rent is too damn high…

M46BC

#68 cuke and tomato picker on 09.17.20 at 7:21 pm

Dispatcher 101
Where in southern Alberta did you buy?

#69 Get Ready to Vulch on 09.17.20 at 7:26 pm

Strike when the iron is hot. Know the psychology of desperate sellers frantic to get out from under a mountain of debt. Don’t be a dummy. They signed up for it so let them eat it. Remember every dollar you save when you buy is gold in the bank for you. Think like a shark.

#70 Apocalypse2020 on 09.17.20 at 7:28 pm

50 Days to Global Catastrophe.

PREPARE

#71 Steven Rowlandson on 09.17.20 at 7:29 pm

Without a massive and persistent collapse of prices the correction will be as big a farce as the pandemic….

#72 tccontrarian on 09.17.20 at 7:31 pm

“So where’s this all headed?

Down. Way down, and fast.”

——————————————

Yep – the markets too, have resumed the bearish action now that the FED news has been digested somewhat.

No, the Fed cannot save the economy (aka kicking the can down the road). Lowering the rates further is no longer an option and fundies are going to become the main drivers in ALL markets.

Happy Everything Crash Everyone (HECE)

Oh, and Dolce – enough with FEAR PORN! Haven’t you heard?
Cases going up (more testing and opening up economies) yet deaths are not – it’s what you’d expect when large percentage of population develops herd-immunity.

tcc

#73 Froggy on 09.17.20 at 7:31 pm

you know ever since c9vid hit town everyone thinks things are going back to where they were but with more than 10 percent UNEMPLOYED AND HUGH LOSSES IN RETAIL INVESTMENTS NEVER TO BE RECOUPEF LIKE THE STOCK MARKET to many people will be stuck in hugh debt the economey will do fine in large corporations with lots of funds but the average folk will pay through there nose too many black swans not one but a few Garth always said prepare for hard times and everyone’s been hit hard but not as hard as canada follow the money it wont be coming here just wait and see

#74 Words to live by on 09.17.20 at 7:32 pm

If you are thinking of buying a condo to live in, I always remember the best advice I ever got, only look at concrete buildings! Wood construction of any type is noisy so unless you like to listen to your neighbours, stay away!

#75 SoggyShorts on 09.17.20 at 7:37 pm

#64 Drinking on 09.17.20 at 7:06 pm
A cure for Covid will never happen just like a cure for the seasonal flu barely ever works….

******************
We’ve never really tried this hard to make a vaccine though, have we?

#76 Freedom First on 09.17.20 at 7:39 pm

#59 Attrition

Yes! It will be epic this time when Trump wins!
Kudos to your whole post!

Freedom First

#77 Nonplused on 09.17.20 at 7:39 pm

#40 Brian Ripley on 09.17.20 at 5:15 pm
My chart of Vancouver, Toronto and Calgary SF detached house prices in $CAD and $USD is up with August data:

http://www.chpc.biz/canadian-housing-in-usd.html

House are cheaper by 24% in USD

————————————

Interesting. One could argue that since the USD is still the world reserve currency the great Canadian housing collapse has already been underway for some time. Harleys aren’t 24% cheaper in USD. Actually nothing is, save maybe oil. But that is temporary.

Gold is hovering around $1950 USD. That’s $2600 loonies. Damn near a whole month’s take home for many Canadians. iPhones aren’t even half that much.
Buckle up folks.

#78 SoggyShorts on 09.17.20 at 7:44 pm

#17 Bill on 09.17.20 at 3:34 pm
#13 Herkunft

Your far better off to buy Jeffrey Olin vision capital
fund. Blows away any other REIT market and the TSX performance. Actively managed, trading discounts to the market and even shorting like in the case when Alberta’s oil blew up.

*******************************
With a 2.5% MER, up to 5% buy-in price, and with a 2% withdrawal penalty I’d expect miracles.

#79 MF on 09.17.20 at 7:49 pm

63 willworkforpickles on 09.17.20 at 6:58

Where to even start with this post?

First off, the majority of US debt is held by us social security and retirement funds.

A third is held by foreign governments, of which the largest holder is Japan. China is number 2. Both are more than happy to have the USD as the world’s reserve currencies and their own currencies low to encourage exports.

Read this:

https://www.thebalance.com/who-owns-the-u-s-national-debt-3306124

Next,

The geopolitical aspirations of foreign countries are a joke when you compare their flawed geography to that of the United States. Surrounded on both sides by huge oceans, having huge swaths of arable land for foodstuffs, blessed with enough energy reserves to be self sufficient, a temperate climate suitable for a large population, and friendly countries to its north and south mean there is absolutely zeeeeero chance anyone on earth will ever come close to dethroning the US, regardless of how much they try.

Granted, you have a point with the debt, you also have a point the fed is in dangerous territory and yes interest rates will rise…but to believe the United States, and North America, will ever lose its place as the premium continent on planet is very incorrect.

MF

#80 Nonplused on 09.17.20 at 7:51 pm

#48 Old Man River on 09.17.20 at 6:17 pm
“Cities never die.”

—————

Garth, um, Detroit, Cleveland, Buffalo, et al.

——————–

And now they are all on fire. I think once you see that the suburbs look pretty good and so does a firearms acquisition permit. The best thing you can do when you see the “mostly peaceful” riots come to your town is stay the heck away. Can you imagine being 40 floors up when the “mostly peaceful” rioters set the building on fire and block all the exits? I think I will avoid that risk, even if it be remote. Sure, it is true that you cannot avoid all risk, but if it is a clear and present danger why would you not? Even without the “mostly peaceful” riots who knows if someone’s meth lab is going to blow up? No thanks. I’ll take my chances with the “mostly peaceful” forest fires.

#81 MF on 09.17.20 at 7:52 pm

….

That’s planet Earth (or is it Nectonite?)

MF

#82 TheDood on 09.17.20 at 7:52 pm

#35 Catalyst on 09.17.20 at 4:54 pm
The idea prices would be anything close to 50% lower is absolute disconnected from reality. I generally agree condos downtown TO will/are under pressure and think 10-25% being the extreme downside. If we recover in one year time and we still have low rates for 3 years, we could be talking a condo boom this time next year so you will have to be really good at your timing.
_________________________________

If we recover in one year’s time? Not gonna happen. The threat of COVID is here and staying until everyone and their pooch is vaccinated, and this isn’t happening any time soon. The downward pressure on condos is just getting started and will continue for at least a few years. I think you’re wrong that 10%-25% represents the extreme downside. Lots of people who own condos have lost their jobs, have non-paying tenants, or were in the process of immigrating here when COVID showed up and now they’re stuck. No one can predict where prices are going to be in future, but talk of a condo boom is what’s disconnected from reality.

#83 Steve French on 09.17.20 at 7:54 pm

One closing thought on the life and times of Smoking Man:

“In this age the mere example of non-conformity, the mere refusal to bend the knee to custom, is itself a service. Precisely because the tyranny of opinion is such as to make eccentricity a reproach, it is desirable, in order to break through that tyranny, that people should be eccentric… that so few dare to be eccentric, marks the chief danger of the time.”

– John Stuart Mill, 1859
“On Liberty”

#84 Ronaldo on 09.17.20 at 8:03 pm

#38 Yukon Elvis

Sounds like Lakeshore Drive.

#85 BG on 09.17.20 at 8:07 pm

Here in my trendy Montréal neighborhood I tried to buy two condos during COVID and was outbid for both of them.

I will admit the bidding wars seem to have calmed down. But I would not call condos in major city centers “unloved”.

#86 Ronaldo on 09.17.20 at 8:07 pm

#40 Brian Ripley

If Canada becomes a bedroom community of the U.S. as a result of Trump’s horror show handling of … everything, perhaps we will see a 1960’s wave of new American neighbours in our communities.
—————————————————————–
You think Biden would do a better job?

#87 Drinking on 09.17.20 at 8:14 pm

#75 SoggyShorts

I really truly hope that you are right for all of us sake.

As we know so far this nasty virus mutates as bad as Corona (the common cold); so far, no cure for a common cold or a flu virus. All I am saying is that i am hoping for the best but being realistic! Just prepare as we are all doing, cash up, save up, and keep your fingers crossed…..

#88 DON on 09.17.20 at 8:17 pm

Bloomberg News

In the US

The 30 yr mortgage rate ticked up to 2.87 from recent lows.

Still sad about SM. Now I know that James is not SM.

#89 DON on 09.17.20 at 8:22 pm

#5 KNOW IT ALL on 09.17.20 at 2:31 pm
DON’T take the VACCINE!!

It’s going to POISON your blood and alter your brain cells.
***********
Are you speaking from experience…lol

#90 Ronaldo on 09.17.20 at 8:23 pm

#44 Garth’s Son Drake on 09.17.20 at 6:02 pm

Don’t even get me started on the failed reopening plan.

Second wave coming? Dude, it is already here. Looks like a tidal wave.

If I was a school teacher in the public system I would quit. Not even the pension is worth the risk.

Thursday rant complete.
————————————————————–
Wow. They’ve really got to you. If the police, nurses, doctors, truck drivers, abulance drivers, farmers, and service workers that we rely on for our food, medication and other essential items, felt the same way as you do, if you were a teacher, we would be in a heap of trouble.

#91 Ronaldo on 09.17.20 at 8:26 pm

#46 Doug t on 09.17.20 at 6:11 pm
I hear horror stories of the loons that sit on strata counsels and hold everyone hostage- nope no thanks – don’t need anymore exposure to crazies as it is – PLUS in Victoria those monthly maintenance fees are anywhere from $250 to $1000 per month
—————————————————————-
And let’s not forget having to deal with the self appointed ‘condo cops’ that every development seems to have.

#92 april on 09.17.20 at 8:30 pm

#74 – I live in a 40 yr old concrete building and I can hear my neighbors thumping around… can hear them talking and when their on their balcony just under my sliding door. It’s most invasive and irritating.

#93 Nonplused on 09.17.20 at 8:33 pm

Wow 361 comments yesterday about Smokey. Garth, tell me, that has to be a record.

I know you often disparage the “steerage section” and point out how different the numbers are on views and comments, but I think this shows one point you fail to give enough consideration to. Your comments section is a bit of a community even though most of us have never met.

I think it’s partly because the moderation keeps it from descending into something like ZeroHedge. I think it’s partly that you create engaging conversations. I think it’s partly because we come to know each other over these comments.

I will admit that I did not find Smokey to be intelligible more than about 50% of the time. But he was part of the community sort of like that crazy uncle who passes out drunk on the hood of his car at 3 pm during the family reunion. I am sad to hear of his passing, as obviously were many other people.

#94 kommykim on 09.17.20 at 8:37 pm

RE:”Units that commanded $1,400 a foot last February have dropped to $1,000 and below.”

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

So what you are saying is that totally insane prices are now slightly less insane.

#95 willworkforpickles on 09.17.20 at 8:50 pm

#79 MF
Well I have to say that you are dead wrong on most of what you say.
Japan is not the largest holder of US debt…they are #2.
You missed the point of the entire message.
Its not about when the US dollar will lose its current world reserve status…that’s years away, but its where enough of the US debt being dumped slowly over an extended period of time will put upward pressure on int. rates.

…and you said…

“but to believe the United States, and North America, will ever lose its place as the premium continent on planet is very incorrect.”

I have to say…you are dead wrong there too.

Each and all are rightly entitled to their own opinions for whatever reasons researched or otherwise anyway.

#96 1255 on 09.17.20 at 8:54 pm

People who WFH put in more hours than when at the office. When WFH you’re always connected, always at work! A lot of people are going to figure that out soon. No more going for coffee no more hour lunches. I’m surprised anything gets done at the office.

I’m sure employers are loving it. More productivity and lower costs.

#97 Jack on 09.17.20 at 8:59 pm

the US border is not closed. You can fly in for any reason… just can’t drive across. Seems like its a one way street though … canadians can fly into the US, but US citizens can’t fly into Canada for ‘non-essential’ purposes.

#98 Wrk.dover on 09.17.20 at 8:59 pm

I’m some glad that Amy Stojsin chimed in that her Father In Law was the self professed Financial Maverick, which clears up that the Marlborough Man whom I referred to last night, would be he with cowboy boots.

I can say nothing in favor of condos. Strata is legal extortion.

#99 Stone on 09.17.20 at 9:00 pm

Garth, you’ve inspired me to go and get my real estate license.

How many low rise Toronto condos can I pencil you in for?

I’ll take the commissions I make and plow them into low cost, balanced and diversified ETFs.

How could you say no to such an attractive proposal?

#100 Canuck on 09.17.20 at 9:03 pm

#59 Attrition

You are the smartest dog in this pack!

#101 SoggyShorts on 09.17.20 at 9:04 pm

#184 YouKnowWho on 09.16.20 at 12:03 pm
#180 Yukon Elvis

Money is security and the freedom to do what you want when you want with your own time.

————————-

OK. So how much do you need to hoard? And you know, you’re free to do what you want with your time if you just stop buying all that useless $#!+ like Harleys and pickup trucks.

Look, we’ve read the stats. 1% wealth equals the remaining 99%. Jan 2020 50% of Canadians were $200 away from broke, now it’s 43% – hurray!

Bottom line – the 1% are hoarding all the wealth away from the other 99%, are they not? There is only so much of it, and it is controlled, owned, hoarded.

My question simply is – how is the lady hoarding dead cats in her house a woman in need of mental help, with an anxiety disorder and the billionaire guy hoarding wealth a saint to be celebrated? They are both hoarders exhibiting the exact same behaviour that is classified as a mental disorder. Only difference is the item the hoard.

************************
Well I, for one, am “hoarding” money so that I can use it as a pension fund.
I don’t think a stack of dead cats or newspapers from the 80s can provide an income stream in the $50,000 range for 50+ years.

As for trucks being “useless”, I think anyone who drives in Alberta winters without a real 4×4 is insane.

And you’re wrong about wealth being finite and that the 1% is keeping it from the 99%. The wealth of the entire world is increasing, it’s not a zero-sum game.
I worked my ass off to make my pile and I intend to enjoy it fully. In the process I also created wealth for each of my employees as well as all of the companies that I dealt with and their staff.
That, and in the end I plan to spend it all so eventually others (mostly 99%ers) will be getting that too.

Remember there are 7.5 Billion people, and only 2,800 billionaires, which makes them the 0.00004%

Let’s not lump anyone who manages to successfully earn a mill or two in with that group, eh?

#102 Ferry Boy on 09.17.20 at 9:06 pm

We bought on the ground floor of a low rise condo building in south Mississauga. Small but a nice (concrete) building within walking distance of everything .. it was a compromise with my wife to move the main house up north. It has a wonderful 400 sq ft patio where I am sitting now. I carries for about $1250 per month and I love it. Its the perfect place for a city pad but the main thing, as Garth said, its low rise. The same builder has another development coming up early next year. I might be tempted if its a similar layout. Not all condos are the same

#103 Where's My Money Sleazy Greedeau? on 09.17.20 at 9:20 pm

Re: #56 Penny Henny on 09.17.20 at 6:37 pm
There is going to be massive shutdowns everywhere this winter in the Northern hemisphere, sad to say.
Those who have already decided the progression of this virus have let you somewhat enjoy your summer now be prepared to give up your rights.
One workplace in Mississauga had (supposedly) 61 cases of Covid, but the name of that business is none of your business.
Can we actually believe the number of cases being reported? Number of cases are easy to fake especially if you there are no names, deaths are much harder to fake cause then they have names.
All I know is that there are only 50 some people reported to be in hospital in ALL of Ontario from Covid (or with Covid) and more and more of our rights are being taken away.
I pity the small business owner.
++++++++++++++++++
“Can we actually believe the number of cases being reported?”
“I pity the small business owner.”
I went and picked up a pizza at an old, very popular restaurant in Poco BC (Port Coquitlam) and the owner was livid!
There was no sit down service and his open-hours were cut almost 30% by the city.
He’s not making any money and will close his doors in a month or so if something doesn’t change.
It was helped along that he had a major reno to his building in the last couple years that he is paying off and no doubt paying way more taxes on the new, so far, increased value.
No doubt Poco city insiders are rubbing their greedy mitts at picking up the property on the cheap when he has to sell.
RIP small business. I will resort to making my own pizza before buying from the internationals, will never spend another dollar there.
Also: any comment on this, to keep the SM trail traveled, and is there a credible source; https://buffalochronicle.com/2020/09/10/we-charity-funded-sophie-gregoires-rendezvous-with-iris-elba/

#104 willworkforpickles on 09.17.20 at 9:26 pm

Sorry MF – i am mistaken as to who holds the most US debt currently.
You are right, Japan is #1….now.
They have recently taken the distinction as China who recently held that position has been slowly reducing its debt and is now number 2.
China as i have said will continue to slowly reduce US held debt.

#105 Earlybird on 09.17.20 at 9:35 pm

Wow…soon to be affordable housing for renters and buyers…how novel! This is a bad thing???

#106 baloney Sandwitch on 09.17.20 at 9:40 pm

Had to look up Marmora. No chance of ever going there. Once I went to Peterborough. That was bad enough. Too white bread for my taste. I like whole grain.

#107 crowdedelevatorfartz on 09.17.20 at 9:50 pm

@#14 CjohnC
“#5 Know it all
Take the vaccine! From the sounds of it you could use having a few of your brain cells altered”
++++

Unfortunately, you incorrectly assumed NoItAll has brain cells………..

#108 Dutchy on 09.17.20 at 9:52 pm

There is a nice Tim Horton’s in Marmora.

https://www.realtor.ca/real-estate/22234665/101-peepy-horn-road-marmora

#109 crowdedelevatorfartz on 09.17.20 at 9:54 pm

@#36 Dolce Vita
“The mood here in Europa is not good Garth, forget about all the fancy charts and numbers. Just read the dailies….”
++++

Patience Paisano

Canada and the US are about 30-60 days behind the Italiano Covid curve.
I’d say, round two in the Covid flu shut down will gut our economy…. No matter how much money Trudeau dumps into the local Media to tell us “everything is beautiful”.
I expect bankruptcies and….unfortunately….suicides to increase exponentially.

#110 crowdedelevatorfartz on 09.17.20 at 9:57 pm

Totally off subject.

So Garth.
Are you “ready” for “Teddy”?

#111 Stone on 09.17.20 at 9:57 pm

#87 kommykim on 09.17.20 at 8:37 pm
RE:”Units that commanded $1,400 a foot last February have dropped to $1,000 and below.”

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

So what you are saying is that totally insane prices are now slightly less insane.

———

No. I think what he’s saying is that the prices have gone from ludicrous down to a more reasonable ridiculous level.

https://www.youtube.com/watch?v=ygE01sOhzz0

#112 Phylis on 09.17.20 at 10:04 pm

So the 23rd has no place in the list of observations to come. I find solace in that. Phew relief. Queue the young one.

#113 Phylis on 09.17.20 at 10:07 pm

Oh, TN you know you will have to pick up the pace now.

#114 conan on 09.17.20 at 10:19 pm

I have driven through Marmora dozens of times.
Never stopped once. it needs something like the Wawa Goose. Maybe the Marmora moose.

#115 Marcia M on 09.17.20 at 10:21 pm

#44 Garth’s Son Drake on 09.17.20 at 6:02 pm

Second wave coming? Dude, it is already here. Looks like a tidal wave.

If I was a school teacher in the public system I would quit. Not even the pension is worth the risk.
—————————

Yep, agreed. And the 8000 biz closures in YVR will only get worse here.

The second wave will be terrible and disrupt the winter totally. And then there will be more, wicked twists coming.

The upside? Not for us, but maybe our kids I hope.

Covid will probably reduce the global population to about 2 Billion by 2027. about 6 Billion will not make it.

Sadly, it’s what our planet needs to survive as a habitat for us – fewer of us.

This thing has barely gotten started…….

#116 Buford Wilson on 09.17.20 at 10:23 pm

Remember, Garth? When six months ago I advised that it’s best to let our old friend Mr Market manage the Airbnb situation. As opposed to the government prohibition that you promoted.

You’re welcome.

#117 Fragrant Cookie on 09.17.20 at 10:36 pm

I agree with #63 willworkforpickles. I don’t buy the government’s promise on holding rates low right through to 2024, or even 2022 for that matter. When the vaccines and therapeutics come, and Garth’s long list of “assumptions for 2021 and beyond” materializes (and they will, probably sooner rather than later), the government can always revise their economic outlook and adjust rates accordingly (raising them earlier than promised). If you are able and need a house/condo now, stop trying to time the market and go for it while supply and aplenty and rates are at the bottom. If you already have real estate equity, resist the urge to take on more debt and gamble it in sensational tech stocks. Use this time to kill off your debt while you can devote most of your monthly payments to the principal. When interest rates eventually rise due to inflation (courtesy of the colossal government spending), you will be forced to pay high interest with little progress made on the principal, effectively stuck with the debt. Don’t be stuck paying the bank into eternity.

#118 Classical Liberal Millennial on 09.17.20 at 10:39 pm

Take a stroll through Reddit and you’ll see what the real fear and panic is like for the easily swayed.

#119 5Inatrailer on 09.17.20 at 10:45 pm

Wow. Been reading for 10 years. First time I’ve ever seen a post recommending a condo buy. These are strange times indeed.

The rest of the narcissists that keep posting random unrelated noise…As you were.

#120 Moh on 09.17.20 at 10:51 pm

I’m good on the condo. When I bought my house from a home builder in the burbs back in March 2019, i paid 25 percent less than what its going for today I was laughed and mocked on this blog. You can beat garages, basements, front lawns and back yards. If they start building condos like they do in the states (same size of an house so 1600 square foot) then I’ll maybe consider. I’m good on living in a shoe box.

#121 Reality is stark on 09.17.20 at 11:05 pm

When it is only $700,000 for a 700 sq. Ft. Condo in Toronto you can afford to buy 5 of them.
Rent them out for less than cost, wait for the inevitable appreciation and make your killing.
Easy money. No risk.
No immigration. No jobs. Wages in decline. Divorce rate skyrocketing. No Airbnb. No tourism. Municipal government starving for tax money.
Stupid is as stupid does.

#122 Kat on 09.17.20 at 11:42 pm

Condos are still way over priced in the lower mainland. Not much slows the train down here.

#123 TurnerNation on 09.17.20 at 11:52 pm

To see the best of Smoking Man posts search this pathetic weblog for the term “stir stick”.
Yes that temporary plastic appendage that sent SJWs scurrying and HR burying:

https://www.greaterfool.ca/2017/04/30/contagion-2/#comment-513553


This one Oddly prophetic:

“#183 Smoking Man on 04.25.15 at 7:45 pm
God’s revenge, trading me in a 55 year old abused body, while leaving me with the mind of a 17 year old.

He’s cruel prick.. I’m looking around at the nearly dead, trying to figure out how they’re going to make it to the escalator to see Paul.. slightly older than me. Their still, obviously thinking about stuff.

Eyes aren’t moving, one dude chewing on a coffee stir stick with his only remaining two teeth.

Is that going to be me.. Thelma, Louis, please lock me in the trunk on the next drive out into the desert..”

#124 fishman on 09.17.20 at 11:57 pm

When the Gartho throws out a little bon bon, taste it before you spit it out. I know, condos, yech. Dirt is where the money is. Just relax,sit down & think of a well run,well built, nice location, bachelor or one bedroom, in your home town. Now imagine you got it cheap. Furnished simple & tastily. The kid fights with the gf or bf. They can sulk somewhere else. The grandkids & their parents are wonderful. Stay as long as you want. Matter of fact stay here at home. Lots of room. We’ll go to our pied a terre. Same with long lost buddies visiting with their wives who you can’t stand. Simple. Off to the condo. And if your still young enough that bedlam is no problem, rent it out. The day will come & especially sweet if the renters paid it off, that you’ll be so glad for that little hideaway..

#125 Al on 09.18.20 at 12:32 am

In for 50% off condos. Let us know.

#126 NSNG on 09.18.20 at 12:44 am

#37 Gravy Train on 09.17.20 at 5:07 pm

My original statement was about the government calling spending ‘investments’. It had nothing to do with whether or not they are public goods. That is a different debate.

About ten or twenty years ago finance ministers and leaders started twisting the term spending into investments because it was better spin. Investing involves risk and potential loss. That has nothing to do with public accounts.

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

Never benefit? Do you or your family not use hospitals, schools, libraries, buses, streets, street lighting, etc., etc.? Do you not benefit from national defence, a police force, fire protection, a health-care system, a transit system, sanitation services, etc., etc.?

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

The people who will be paying for many of these services are not even born yet because of government overspending. Many will not be born for two generations. So no, some people will never benefit from this government spending for the ‘public good’. That is theft pure and simple.

As for whether or not many (no, not all) of these services could be provided for by the private sector better and cheaper is a whole other debate for another day.

#127 Dan on 09.18.20 at 12:46 am

Calgary houses with dirt at 2005 prices.

Prices will revert to the mean.

I wonder if other cities will drop, or Calgary go up?

#128 JoinEm on 09.18.20 at 1:09 am

#67 flop

What was your real estate blog? Link?

#129 Bill on 09.18.20 at 1:23 am

#40 Brian Ripley on 09.17.20
Brian you and i have know ea other 20 yrs.
You blame Trump?!
What he started covid?
Would you rather the Clintons Obama Bush run the show.???
You blammig Trump is ingnorant. This SHIt show started eons ago..
You should maybe look our super Scocialistic country and talk about that?.
Trump didn’t start the problems the world blew up long ago you know that….hes just in it…
Hopefully your new location on the island is good.

#130 Tater on 09.18.20 at 6:37 am

Just saw the post about Smoking Man and that’s quite sad. He and I argued a bit here, and I found his “character” incredibly annoying, but I don’t doubt that he will be missed by his family and friends. RIP.

I always do a double take when I see that picture, looks like Ricky Gervais and Bruce Willis hanging out at the general store.

#131 MF on 09.18.20 at 8:43 am

Moh on 09.17.20 at 10:51 pm

We are still laughing at you.

This whole market is propped up by billions of dollars of bond buying by the bank of Canada per week (life support). Once that stops it’s over.

I wouldn’t buy your house for .20 cents on the dollar, garage and basement and all.

MF

#132 IHCTD9 on 09.18.20 at 9:48 am

#120 Moh on 09.17.20 at 10:51 pm

When I bought my house from a home builder in the burbs back in March 2019, i paid 25 percent less than what its going for today…
____

So you’re selling it to bring that paper gain into the real world where you live right?

Let me guess: no you’re not. So the not so humble brag is crowing about nothing. Buddy, EVERYONE’S house has spiked over the last year. My place in the sticks is “up” too – so can I go buy a new truck tomorrow?

No, because GM does not accept amateur home appraisals for payment.

#133 TurnerNation on 09.18.20 at 9:56 am

Are you a condo speculator, looking to at least meet your costs? Denied – the government is in your 1-bedroom now
(New System wags/sages/pundits/whistleblowers claim that private property
rights are to be eliminated in this new global system. Always via Incrementalism. Slow steps;
we are but 6-months in, of a decade long plan (google UN Agenda 2030 it’s all there).

https://www.blogto.com/city/2020/09/ontario-freeze-rent-2021-what-you-need-know/
The formula for calculating the maximum allowable rent increase for the next year in rent-controlled units is set out by the Residential Tenancies Act (RTA), and the freeze would apply to the vast majority of rental units covered by the RTA.

This includes those first occupied after Nov. 15, 2018, which are typically exempt from rent control thanks to controversial rent control-scrapping legislation introduced back in 2018.

#134 Scott Carter on 09.18.20 at 10:03 am

I had the chance to buy a condo for $134,900 back in 1999 and did not. The first 3 years was a low $100 a month condo, maintenance fees. They use these gimmicks to lure people in that don’t have much experience, naive, most young or newcomers to Canada.

I knew those condo, maintenance fees would get out of hand in decades later. You know how much those monthly condo, maintenance fees went to after the 3 year fixed period gimmick, $300 a month and now they are $850 a month. Remember, this does not include the monthly mortgage, hydro, utilities etc. This condo is roughly worth $425,000 but getting that full listing price and after commission, lawyers fees, closing costs, HST etc. they will be lucky to get $375,000 to $380,000.

I see projections of $1,500 a monthly condo, maintenance fees by 2028-2029. This is the same rate of roughly increase over the last 21 years at 6% a year compounded yearly. This is almost my current rent today of $1,550 a month without hydro. My future rent will be probably $2,100 to $2,200 a month without my hydro by 2028-2029.

I currently rent a similar 2 bedroom house for $1,700 a month which includes my hydro too. All that money I would have paid in mortgage payments, CMHC insurance, condo insurance, condo, maintenance fees etc. I invested and now have $715,000 in RRSP’s, TFSA’s, non-registered investments which with bond interest and dividends is spinning off from $31,000 to $33,000 a year and keeping compounding.

If I want to buy a property at more reasonable prices outside Toronto I have liquidity, mobility, and more choice to do that now and in the future.

#135 David Hawke on 09.18.20 at 10:10 am

#5 KNOW IT ALL on 09.17.20 at 2:31 pm
DON’T take the VACCINE!!

It’s going to POISON your blood and alter your brain cells.

Spot-on!

This not an anti-vax blog. All such future comments will be deleted. – Garth

#136 Don Guillermo on 09.18.20 at 10:24 am

Sail Away – was that you?

https://www.princegeorgematters.com/local-news/sleeping-bc-driver-of-speeding-tesla-on-alberta-highway-faces-criminal-charge-rcmp-2720691

#137 Moh on 09.18.20 at 10:53 am

#131 MF on 09.18.20 at 8:43 am

I doubt that the prices will come down in the Burbs but you can wish it does. People have learned the hard way that living in a condo sucks and people want more space.

#138 Jay on 09.18.20 at 10:56 am

Does this apply to places like Calgary and Edmonton as well, or would we just be a complete idiot for “investing” in a cheap downtown condo in a place the feds have sacrificed to the environmental Gods.

#139 Moh on 09.18.20 at 10:59 am

#132 IHCTD9 on 09.18.20 at 9:48 am

Yea but had you bought in late 2018 early 2019 you were paying about the price of 2016 for new builds. Now the price at 2020 has surpassed what the prices were in 2017. People who bought new builds with large pieces of land were lucky to buy at the right time. The gains before it being built are astronomical in comparison if you bought a pre-built. Yes the price of everything has gone up about 17%. But if you bought back in late 2018 or 2019 when builders did not know that the price would go up your gains are about 25%-30% in certain area’s. I see it everyday in my new neighbourhood.

#140 Attrition on 09.18.20 at 11:13 am


#132 IHCTD9 on 09.18.20 at 9:48 am

#120 Moh on 09.17.20 at 10:51 pm

When I bought my house from a home builder in the burbs back in March 2019, i paid 25 percent less than what its going for today…
____

So you’re selling it to bring that paper gain into the real world where you live right?

Let me guess: no you’re not. So the not so humble brag is crowing about nothing. Buddy, EVERYONE’S house has spiked over the last year. My place in the sticks is “up” too – so can I go buy a new truck tomorrow?

No, because GM does not accept amateur home appraisals for payment.

Ha! The humour of cold hard truth. More gold from Harvester…

#141 Dispatcher101 on 09.18.20 at 12:04 pm

#68

Coaldale Alberta is where we purchased.

#142 Ubul on 09.18.20 at 12:18 pm

35% of NYC residents want to leave the city.
That’s the real fortune maker to buy up condos. :)

#143 BillyBob on 09.18.20 at 12:23 pm

#132 IHCTD9 on 09.18.20 at 9:48 am
#120 Moh on 09.17.20 at 10:51 pm

When I bought my house from a home builder in the burbs back in March 2019, i paid 25 percent less than what its going for today…
____

So you’re selling it to bring that paper gain into the real world where you live right?

Let me guess: no you’re not. So the not so humble brag is crowing about nothing. Buddy, EVERYONE’S house has spiked over the last year. My place in the sticks is “up” too – so can I go buy a new truck tomorrow?

No, because GM does not accept amateur home appraisals for payment.

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

I think you know that I’m a fan of what you write generally, so not taking a shot at all. But not sure I follow the logic here?

I completely agree with whole concept of uncrystallized gains being theoretical. Everyone rubbing their hands in glee at their newfound “wealth” is stupid, unless they actually sold and moved to Saskatchewan with the windfall invested 60/40 or whatever.

But my take on this particular guy is that if house prices rose heavily since he bought in 2019, and his goal was to buy, it was a good decision because it was cheaper in 2019 than now. No?

I mean, to use your truck analogy, are you just waiting to buy one until it’s even more expensive next year?

Whether or not houses (or trucks) will HOLD their value, AH! That’s a different discussion entirely.

But if the goal was simply to own shelter as opposed to an investment, can’t really argue that spending 25% less a year ago than you’d have to spend now was a bad decision.

#144 lostCanuck on 09.18.20 at 12:34 pm

I would like to see your thoughts on the great reset initiative by the WEF and how it will relate to Canada

Nothingburger. – Garth

#145 IHCTD9 on 09.18.20 at 12:35 pm

#139 Moh on 09.18.20 at 10:59 am
#132 IHCTD9 on 09.18.20 at 9:48 am

Yea but had you bought in late 2018 early 2019 you were paying about the price of 2016 for new builds. Now the price at 2020 has surpassed what the prices were in 2017. People who bought new builds with large pieces of land were lucky to buy at the right time. The gains before it being built are astronomical in comparison if you bought a pre-built. Yes the price of everything has gone up about 17%. But if you bought back in late 2018 or 2019 when builders did not know that the price would go up your gains are about 25%-30% in certain area’s. I see it everyday in my new neighbourhood.
___

So sell it bro!

#146 JB CONDO DEATH on 09.18.20 at 12:35 pm

#31 Ronaldo on 09.17.20 at 4:36 pm

#22 Howard on 09.17.20 at 3:57 pm
#15 Yukon Elvis on 09.17.20 at 3:28 pm

Good call on the condos. Boomers are retiring, cashing out, and downsizing ( i did ). This is exactly what they are looking for.

———————————

Is it? I don’t think so. My Boomer parents in the 416 never plan to leave their SFD, and neither do any of their friends of which I am aware. For those with difficulty climbing stairs, a chair lift to the rescue. I think you underestimate how poorly downsizers will cope with suddenly having to share walls with loud, pot smoking strangers after 40-50 years of bliss in a large house and lot.
—————————————————————-
Totally agree Howard. I’m the oldest of the boomers and those in my age group are saying the same. Staying in house til they carry you out. Most of us have already done the condo thing back when we bought our first home and learned back then that this is not what we want to retire to. Too many risks associated with these things. Many stories of people having to cough up thousands for leaky buildings and other problems. No thanks. Not for us.
………………………………………………………………..

#147 Bill on 09.18.20 at 12:41 pm

This tickled my funny bone. “Flights to knowhere” good thing I got my diving in on that reef. One of my best experiences.

They beter throttle back from 560mph or they will miss it!
https://www.reuters.com/article/us-asia-airlines-flights/travellers-snap-up-asian-airlines-scenic-flights-to-nowhere-idUSKBN2673PI?il=0&utm_source=Sailthru&utm_medium=email&utm_campaign=Weather%20Channel-email-4B&utm_term=4B

#148 JB CONDO DEATH on 09.18.20 at 1:00 pm

#31 Ronaldo on 09.17.20 at 4:36 pm

#22 Howard on 09.17.20 at 3:57 pm
#15 Yukon Elvis on 09.17.20 at 3:28 pm

Good call on the condos. Boomers are retiring, cashing out, and downsizing ( i did ). This is exactly what they are looking for.

———————————

Is it? I don’t think so. My Boomer parents in the 416 never plan to leave their SFD, and neither do any of their friends of which I am aware. For those with difficulty climbing stairs, a chair lift to the rescue. I think you underestimate how poorly downsizers will cope with suddenly having to share walls with loud, pot smoking strangers after 40-50 years of bliss in a large house and lot.
—————————————————————-
Totally agree Howard. I’m the oldest of the boomers and those in my age group are saying the same. Staying in house til they carry you out. Most of us have already done the condo thing back when we bought our first home and learned back then that this is not what we want to retire to. Too many risks associated with these things. Many stories of people having to cough up thousands for leaky buildings and other problems. No thanks. Not for us.
………………………………………………………………..
I am the same I would never let my parents go into a CONDO they are the worst of all money pits.

Average cost to keep a home going is much lower that the CONDO cost that is a fact.
Ave taxes in the GTA for a small to medium home $4000 -$6000
Ave taxes in a CONDO $3000 to $5000
Ave cost for heat in a home say at 175.00 a month $2100 per year, average cost for heat in a CONDO depending on the floor and class of insulation $100 to $200 a month $2000 per year.
Ave cost for electricity in a home $100 per month, $1200 per year. CONDO about the same $1200 per year.
Ave cost for water in a home about $25-$70 per month so about $840 per year. Condo depends some are rolled into fees. Others are about $25-$40 per month so $480 per year.
Cost to clear your sidewalk at a home and cut your grass. Free if you do it yourself.
Condo built into the fees. Average fees in the GTA range between $450-$1300 per month. So let’s go middle of the road. $875 per month or $10500 per year.

Total up the high numbers
Home cost per year $10140

Condo cost per year $19180

Homes win hands down for cost over a year.

Yes homes you have to replace the roof every 15 years, so the same goes for CONDOs but they are special assessment fees and you don’t have elevators to take care of as well as massive infrastructure to support the many dwellings within. You are paying someone to clear the snow, cut the grass and clean the place, which I might add will be the largest secret cost they will hit you with now that COVID is here.

#149 forgotmyusername on 09.18.20 at 1:08 pm

#55 aW on 09.17.20 at 6:34 pm
I miss Smoking Man.
Turner Nation is my new fav.
Dolce Vita is long winded with nary a point – we get it, you live in Europe, super cool.

At least that person copy/pasting Victoria housing stats from their blog has given up. I’m not even sure what they were even really getting at.

I miss Smoking Man. I need more herdanomics lessons :(
———————

I am too new to the blog to have bonded with Smoking Man, may he RIP.

But I will stick my neck out — and take the blow back — to say I miss ….Sail Away!

That Dude was funny. And insightful.

I gather that he offended the overly-sensitive. Didn’t Smoking Man sometimes do that too?

Not sure Sail Away would ever come back if that was allowed, but he wrote many of my favorite comments.

#150 Gravy Train on 09.18.20 at 1:08 pm

#126 NSNG on 09.18.20 at 12:44 am
“My original statement was about the government calling spending ‘investments’.[…]” You’re obviously unfamiliar with national income accounting, which has been around decades.

“About ten or twenty years ago finance ministers and leaders started twisting the term spending into investments because it was better spin.[…]” No, government spending is either for current use (consumption) or future benefits (investment). See the attached for details.
https://en.m.wikipedia.org/wiki/Government_spending

#151 NSNG on 09.18.20 at 1:56 pm

#150 Gravy Train on 09.18.20 at 1:08 pm

The science must be settled then!

Next you’re going to tell me Keynesian monetary policy is good economic theory.

#152 IHCTD9 on 09.18.20 at 2:00 pm

#143 BillyBob on 09.18.20 at 12:23 pm

…But my take on this particular guy is that if house prices rose heavily since he bought in 2019, and his goal was to buy, it was a good decision because it was cheaper in 2019 than now. No?

I mean, to use your truck analogy, are you just waiting to buy one until it’s even more expensive next year?

Whether or not houses (or trucks) will HOLD their value, AH! That’s a different discussion entirely.

But if the goal was simply to own shelter as opposed to an investment, can’t really argue that spending 25% less a year ago than you’d have to spend now was a bad decision.
___

My take on that post was:

“I was pretty smart buying an SFD instead of a condo. “Everyone laughed at me”, but look at me now, SFD prices went up huge, “can’t beat garages and back yards” Yo!”

Like everyone else who owns a home in Canada didn’t see the exact same thing. Like a garage had something to do with the recent run to the burbs.

This guy posted subsequent to #120, and it was more houses are up this%, and that%, sees it all the time in his hood, astronomical gains, blah blah blah.

#153 dave on 09.18.20 at 2:15 pm

Marmora is better than Toronto

#154 Moh on 09.18.20 at 2:49 pm

#145 IHCTD9 on 09.18.20 at 12:35 pm
I would love to sell it to buy a bigger place why not. As soon as I get the chance I will do it in a heart beat!

#155 McSteve on 09.19.20 at 6:26 am

BUT…if you lived in Marmora you could watch the iron mine fill with water for 150 years. And there is a nice lake at the north end of town. Sounds good to me

#156 Prince Polo on 09.19.20 at 10:09 am

#102 Ferry Boy on 09.17.20 at 9:06 pm
We bought on the ground floor of a low rise condo building in south Mississauga. Small but a nice (concrete) building within walking distance of everything .. it was a compromise with my wife to move the main house up north. It has a wonderful 400 sq ft patio where I am sitting now. I carries for about $1250 per month and I love it. Its the perfect place for a city pad but the main thing, as Garth said, its low rise. The same builder has another development coming up early next year. I might be tempted if its a similar layout. Not all condos are the same

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

Care to divulge which company is the builder?
Thanks!

#157 Shortymac on 09.19.20 at 11:16 am

Do you believe a reduction in condo prices and covid will eventually reduce SFH prices? My family and I are not interested in the condo life and have been saving for a SFH somewhere in the GTA.

I’m comfortable where I am right now with our 4 bed rental in rexdale, hell one of my roommates is paying rent on a room that he ain’t using as his college went online for the semester and he’s with his mom up north.

Husband and I are blessed with being able to wait, but the housing market in Toronto has gone screwy and seems to not want to return to something sensible since I started reading your blog back in 2014. Glad I stayed out of it but I have lost hope in a return to affordability even up north in the barrie area.