Ride with me to a medium-sized city east of Toronto. My sidekick and I have something to share.
He’s a lawyer. A real estate guy, handling deals for a decade now. After reading yesterday’s post about blind auctions and the effect they have on property values, he offers this experience.
- Single family ranch home in a small town market 2 hours outside the GTA.
- List Price $396,000
- 42 viewings on the weekend, offers held until Tuesday
- 12 offers
- One (winning offer) at $504,000 no conditions
- One offer at $465,000 with typical financing, inspection, etc conditions
- The 10 other offers? … all between $425,000 and $450,000
Why did this home sell for almost 30% more than the vendors asked? Was it purposefully underpriced by a manipulative realtor? Here’s what our legal beagle thinks…
The information asymmetry effect was pretty clear as the vast majority of the buyers valued the home in a relatively narrow range and the two outliers (especially the winning bidder) unnecessary paid significantly more than what the rest of the market was willing. I am sure the “winner” would love to know what the other 92% of bidders thought the house was worth. This of course this will lead to the inevitable knock on effects as the house down the street will have this inflated price as the comparable resetting everyone’s expectation of what everyone else thinks the value is inaccurately higher – snowball meet hillside.
Over and again this story is playing out. In a multiple-offer situation and blind auction there is zero transparency. No goalposts. The only known is the asking price. Prospective buyers must guess wildly, muster up their best offer, throw caution to the wind, eschew conditions, gamble and bid. They may never know the final selling price, the competition faced, nor the reasons an offer was selected and are usually denied a chance to alter their submission. All cards are in the hands of the vendor and their agent. It is a repugnant system designed to inflate prices, reward greedy sellers and grant absolute power to the listing realtor.
Agents argue holding back offers until a certain date and time allows a property to be viewed by more interested buyers. But in essence the hold-back has but one objective: to create that blind auction. Maximize value for the seller. Harness emotion, desperation, FOMO and competition to jack values to a new crescendo. Plus generate more commission.
Well, things gotta change.
And the Covid real estate crisis is surely bringing that reform closer.
Steve is a commercial real estate agent with three decades of experience. “Although sometimes I think of switching over to the cesspool that is residential real estate,” he says, “I cannot bring myself to make the switch.” One reason is the blind auction. It irks him, too.
The process is beyond ridiculous. The entire process should be transparent. However, RECO (the regulatory body in Ontario)and as you called it the “Residential Real Estate Industrial Complex”, will not have it. The regulator is useless and residential agents are like an unorganized union that is more militant than the teachers union. Love your Blog – hate Adele and Drake!
It’s notable that in a landmark report this week, economists at BMO are calling for immediate action to douse the flames of real estate, and also share disgust at the bidding process. “Implement an offer system that eliminates blind bidding in real estate transactions,” says the bank. “This would keep the sale price from settling well above the price of the next willing buyer, and keeps the comparable more appropriate for the next property to list in that location. While this won’t cool the market on its own, it would limit the ballooning that we’re now seeing in a very tight market.”
There’s more. The BeeMo guys are the latest bankers to push politicians into facing a growing accommodation quagmire. “We believe policymakers need to act immediately, in some form, to address the home price situation before the market is left exposed to more severe consequences down the road. As it stands now, prices are going parabolic across a number of markets and the price strength appears to be feeding on itself.”
The action needed today is one that immediately breaks market psychology and the belief that prices will only rise further. That would dampen the speculation and fear-of-missing-out that those expectations are creating.
Besides trashing blind auctions, the bankers are suggesting… (a) The central bank should raise rates, or at least stop saying the cost of money will stay low. (b) A spec tax – a special capital gains tax on the sale of residential real estate purchased from today forward, with the rate falling to zero over five years of holding the asset. (c) Allow all capital gains on non-principal residences to be taxed at the full marginal income tax rate – potentially doubling the hit. (d) Implement a national non-resident buyers tax similar to those currently imposed in B.C. and parts of Ontario. (e) Make it harder to get a mortgage. Increase debt service ratios. (f) Tighten the rules for borrowing against a property to buy another property. (g) End the exemption of principal residences from capital gains taxes.
Well, blog dogs, there you have it. Lawyers, agents, bankers – and us – we all have eyes. We see the damage being done by the few to the many. If our leaders do not act, maybe a coup?
About the picture: “We escaped the crippling high RE prices and craziness of Vancouver early last year,” says John and Jane. “Packed everything into our Jeep and drove with our beloved Briard dog ‘Dougal’ to Lunenburg where we now live. Sadly, Dougal just passed at 13 years. He is sadly missed but we thought you might like to use this picture for your blog. Feel free to do so if you wish but just keep on blogging!”
188 comments ↓
Early today Garth! Can you imagine if stocks were sold at blind auction?
The sheeple will always buy houses… as it always go uppa uppa! Then they go broke later in life and blame someone else for their misgivings. Sheeple never learn, the only consequence is they get sheared for a hair cut every once in a while. As they deserved to be.
https://www.theglobeandmail.com/business/article-bmo-report-calls-on-policymakers-to-douse-the-fire-on-rapidly-rising/
Um, hello? Where were you cautious bankers in 2014-2017?
The real risk here is Trudeau, as per usual.
The bankers have some great ideas.
Expect nothing from our useless Liberals in Ottawa. There’s probably some social injustice somewhere that is consuming all their attention right now.
Sorry Canadians!
so i got vaxed yesterday.
happy easter
There’s no backbone in Ottawa whatsoever.
The long-anticipated real estate meltdown may now actually be unstoppable. Given it’s the only functioning segment of our economy (others having withered through moral posturing), the prognosis looks bleak.
Parliament Hill’s pretend leadership has brought us enormous pretend prosperity. That will have to be corrected with onerous taxes on actual wealth.
Ho Hum….
‘Well, blog dogs, there you have it. Lawyers, agents, bankers – and us – we all have eyes. We see the damage being done by the few to the many. If our leaders do not act, maybe a coup?’
We all have eyes, but many do not see. You know what i mean Garth, you’re a smart dude.
Btw, that sounds like a bit of conspiracy talk.
Are the sellers greeting for doing this? (Blind auctions)
Or is the realtors at fault for pushing this kinda of system?
#3 Prince Polo – you are 100% correct. The banks have been lending money out like drunken sailors for over a decade. Very irresponsible. We know a [email protected] who left the pengiun bank several years ago because all they wanted her to do was flog mortgages.
Governments know that the home is the only way to mandate people save/invest into something that appreciates. Otherwise it’s restaurants, RVs, boats, bikes, cars and other depreciating rubbish.
It makes total sense. Those homes can then be tapped in retirement, resulting in less burden on government social benefits.
In the mean time they also milk for every increasing tax imaginable.
A total win for them and home owners. Why would they change.
However, RECO (the regulatory body in Ontario)
______
Despite the fact that this is a provincial responsibility, I wondered how many posts until Trudeau is blamed. 4! Good work people.
Cloudy day here in the GTA. Damn Prime Minister.
Corporate Taxes to rise in U.S.A
https://www.cbc.ca/news/world/biden-infrastructure-1.5970866
What will this do to equity markets this year? Looks like a significant hair-cut in profits.
Nothing new. Biden campaigned on this. Already baked in. – Garth
All these suggestions being thrown around, when all that is necessary is three things:
1) Abolish the CMHC and force banks to take the risk
2) End QE bond rigging and allow mortgage to rise according to free market demand
3) Remove the tools and conditions that permit money-laundering to flourish (non-existent law enforcement, numbered companies, etc)
That’s it. That’s all we’d need.
#11 Love_The_Cottage on 03.31.21 at 11:50 am
Despite the fact that this is a provincial responsibility, I wondered how many posts until Trudeau is blamed. 4! Good work people.
Cloudy day here in the GTA. Damn Prime Minister.
————
If he was Trump, it would be the first 4 plus the next 6,000.
#33 RyYYZ on 03.30.21 at 3:59 pm
Do you lurk here all afternoon trying to infer that correlation equals causation? Sounds like you need a better hobby.
– “They’ll Stone you just like they said they would; everybody must get stoned”
You could not believe the new Cannabis stores popping up all over my city, into the spaces once held by the useful successful businesses. This was known a year ago, the deets on this map:
https://agco.maps.arcgis.com/apps/webappviewer/index.html?id=bef894bc0876448fba26333f1de8d370 – Wow!
But why, the government never gives us anything for free. Why the legal T2 soma? A passive docile population. The New System is coming for the children. Now tune into your VR learning-headset, turn on and DROP OUT. Everything old is new again
https://www.bloomberg.com/news/articles/2021-03-29/cannabis-almost-as-addictive-as-opioids-among-teens-study-finds
Teenagers’ addiction rates for cannabis are about the same as for prescription opioids, according to a new study of drugs and youth.
……………..
– Easter Lockdowns continue globally. Look I don’t do Politics, or Religion. But timing is fishy.
This is all about a Bat, and public health don’t you know.
Byron Bay Bluesfest cancelled over Easter as Queensland records two new Covid cases and NSW one (Australia) (theguardian.com)
Netherlands: Packed city parks close, sun worshippers get corona fine(telegraaf.nl)
Queensland frontline doctor says people should get used to COVID lockdowns (amp.9news.com.au)
–Our elite rulers are not even hiding it. Their goal of this global takeover. You see, Freedoms = poor health outcomes.
“From April 26 more freedoms are likely, including the opening of shops and restaurants”
https://www.thetimes.co.uk/article/ac7dfa94-9168-11eb-930d-e9e6e3751f8f?
—Off to the kamps! It’s been said that the world was conquered by use of only two terms: Mandatory, and Asymptomatic. 2023 cannot come soon enough (when this *might* end). Say why not take them to hospital, they are sick right? Right?
Justin Trudeau @JustinTrudeau
Officiel du gouvernement – Canada
If your results come back negative for COVID-19, you’ll be able to head home and finish your mandatory quarantine there. If your test results come back positive, you’ll need to immediately quarantine in designated government facilities. This is not optional.
I’ve become cynical and have no faith in our government to implement any of the above changes. Policy seems to be motivated by optics and not what might be best for the country.
I really hope I’m wrong though.
Well, I posted a loss for a a real estate investor yesterday of 2 million, opportunity costs over the six years added on top hurt but I’m going to pivot to the bottom end.
Time after time, day after day as things started to unwind in 2017 in Vancouver detached market I saw people post on this very site that in a couple of years they were going to vulch.
After showing a lot of heavy losses that the pumpers constantly denied were happening, someone would sprout that it was only the top end getting pummelled, eventually the rot set right in to the bottom of the market and those that bought on the bottom rung and didn’t buy to hold took reasonable percentage losses.
The people talking about vulching on here, were they seriously going to buy, I had my doubts and was one of my inspirations behind my hundreds of “Race to a million” posts on here and my Pink Snow blog.
I think when I started noticing the bottom end of the market really start to correct the bottom rung on detached market was around 1.2 million.
A short while later it busted through the 1.1 range but then I remember it pausing for a while above the mental marker for sellers of the flat one million for your house.
Probably edging close to a year later in early 2017 you could pick up a totally liveable, starter home in a respectable area of Vancouver proper for less than 900k, occasionally you would see one with an 8 in front and a house that needed to be bulldozed could be had for around 750k.
Not once did I see anyone on here declare that they were getting ready to buy despite myself observing that the general number chucked out there the people would think was a good price to buy was 750k when the previous asking prices for these prices were around 1.2, only 15 months earlier.
Now the price of the exact same properties with 4 more years on the clock is currently shooting past the prices they wanted back in the heady days of 2016.
I guess what I’m trying to say, is that no one knows how long all these cycles are going to last, but there was an opportunity for people to get in for about a year where developers, speculators and just about everyone else, sat on their hands and did nothing, when as the host of this blog points out only started buying when prices were going back up, and they had way more competition for the same previously unloved property.
Young people today need to make decision on how much owning real estate really means to their life goals.
Probably at 25ish you need to decide how important this decision is for you personally whether you are partnering up or not.
Go for it when one of these resets happen or go mobile, rent, and revisit things much later on when the cycle could be completely different.
I didn’t have nowhere as much pressure on me as kids today, when I bought my piece of real estate, I had income, affordable housing everywhere, sizeable downpayment and not much of a rental market to choose from at the time.
To be honest I don’t even know how old I was when I bought, I think 19 or 20 but it turned out that it was such an insignificant moment in my life that it doesn’t even register in any form of importance in my overall life.
Had the mortgage paid off in around 2 years with small payments, so you see why it was just a small blip in my 46 year timeline
I had it, I didn’t need or treasure it, it was not my life goal to be a homeowner, but I understand how much importance people place on it, which is why I was willing to document a moment in Vancouver real estate history while I was laid up for an extended period of time.
Now is clearly not the time to be a buyer on the bottom end in Vancouver, but who knows, like last time I documented, in a year or so it could be be go-time if it means the world to you…
M46BC
Leave Government out of it!
It will fix itself.
God’s Away On Business (Tom Waits)
I’d sell your (house) to the junkman baby
For a buck, for a buck
If you’re looking for someone to pull you out of that ditch
You’re out of luck, you’re out of luck
The ship is sinking
The ship is sinking
The ship is sinking
There’s a leak, there’s a leak, in the boiler room
The poor, the lame, the blind
Who are the ones that we kept in charge?
Killers, (bankers), and lawyers
God’s away, God’s away,
God’s away on Business. Business.
God’s away, God’s away,
God’s away on Business. Business.
Digging up the dead with a shovel and a pick
It’s a job, it’s a job.
Bloody moon rising with a plague and a flood
Join the mob, join the mob
It’s all over
It’s all over
It’s all over
There’s a leak, there’s a leak in the boiler room
The poor, the lame, the blind
Who are the ones that we kept in charge?
Killers, (bankers), and lawyers
God’s away, God’s away,
God’s away on Business. Business.
God’s away,
God’s away on Business. Business.
[Instrumental Break]
God damn there’s always such a big temptation
To be good, just be good
But there’s always free cheddar in a mousetrap, baby
It’s a deal, it’s a DEAL
God’s away, God’s away,
God’s away on Business. Business.
God’s away, God’s away,
God’s away on Business. Business.
I narrow my eyes like a coin slot baby,
Let her ring, let her ring.
God’s away, God’s away,
God’s away on Business.
God’s away, God’s away,
God’s away on Business. Business.
FOMO
The Fear Of Missing Out…
I was driving to work this am in the Lower Brainland and listened to the ads on the radio.
Home Equity Loans applications were followed by and ad for…
The Financial Regulator in BC.
Discussing FOMO in investing. “Dont dump money into a sure thing because your Brother in Law knows a guy who knows a guy…” On and on the ad has gone warning you about FOMO.
Never have I heard a similar ad for BC Real Estate.
Great article. I think all the calls for action will have to amount to something in the budget. I know plenty writing letters to their MPs and lots of media attention. Tough to ignore IMO
It’s too late. 500K+ units in the hands of flippers and amateur landlords, substantial HELOC debt, fraudulent lending practices, unstoppable upward pressure on rates both in Canada and US.
This train has sailed. Hold your crowns.
#11 Love_The_Cottage on 03.31.21 at 11:50 am
However, RECO (the regulatory body in Ontario)
______
Despite the fact that this is a provincial responsibility, I wondered how many posts until Trudeau is blamed. 4! Good work people.
Cloudy day here in the GTA. Damn Prime Minister.
___
Housing costs are a nationwide problem now homie.
You can thank Trudeau’s fiscal non-policy and hand sitting for letting it run to the extremes it has. It’s going to get worse too – you know why? Because Trudeau won’t fix it – as per usual. He’ll just “watch it very, very closely” (as it shoots to the moon).
It’s been overcast right across Canada since October 2015 – so much for sunny ways.
#115 BillyBob on 03.31.21 at 6:09 am
Just can’t get me off your mind can you? Touching. Sad, but touching.
What happened to you in Victoria?
And sorry for using HTML markup. I know it gives you certain feelings about me.
#11 Love_The_Cottage on 03.31.21 at 11:50 am
However, RECO (the regulatory body in Ontario)
______
Despite the fact that this is a provincial responsibility, I wondered how many posts until Trudeau is blamed. 4! Good work people.
Cloudy day here in the GTA. Damn Prime Minister.
———————————-
Yes it’s so unreasonable to hold the guy running the country at least partially responsible for a nationwide housing affordability crisis.
Take a look at a historical chart of national or Toronto house prices. The average rose gently until 2015. The spike in 2015/6 was largely due to the Bank of Canada crashing interest rates due to the oil collapse. Clearly wasn’t Trudeau’s fault. But everything after that is on him and various provincial governments.
who needs streaming when….
the blind and the connected
the campaign to free pastor’s Brunson ?
salt lake over 100 000 members
100 businesses in the west casino s.california cattle ranch tactical arms company semiautomatic weapons
..’
The Kingstons are members of the Davis County Cooperative Society, a secretive polygamist Mormon sect that has been likened to a cult. The group, also known as The Order, reportedly believes in maintaining the purity of its blood lines ahead of a prophesied race war. In 1999, one of its senior members was convicted of incest. The group reportedly refers to the practice of financing itself by defrauding the government as “Bleeding the Beast.”
Dermen ran a chain of California gas stations and truck stops and is, according to federal prosecutors, a member of Armenian organized crime. Dermen owned a fleet of luxury cars, traveled with a retinue of bodyguards, and maintained a network of paid-off moles inside both the police and federal law enforcement.
Dermen was among the attendees of the 2015 launch for Korkmaz’s $20 million charity pledge. According to court documents, he also used Korkmaz’s jet — the same one used for the Brunson trip — in mid-2017 to temporarily flee to Turkey from what he thought was his impending arrest in Los Angeles.
The Kingstons were arrested in August 2018. They subsequently pleaded guilty and testified against Dermen.
Prosecutors have charged Jacob Kingston, a member in a shadowy Mormon offshoot known as the Order, with collecting a half-billion dollars in biodiesel credits his company didn’t deserve.
https://www.bloomberg.com/news/features/2019-06-24/the-polygamist-who-allegedly-scammed-the-u-s-out-of-a-half-billion-dollars
==
and who was on that jet?
https://www.splcenter.org/fighting-hate/intelligence-report/2017/blood-cult
https://www.occrp.org/en/investigations/turkish-tycoon-trump-fundraiser-and-ex-cia-chief-involved-in-2018-attempt-to-free-us-pastor-held-in-turkey
Transparency in offers is the trick I to get this under control and getting the comparables back in line with reality. Next, deal with the speculators and tax them good.
There’s no quick and easy fix to this. If people would stop being stupid that might help, but that’s not going to happen.
750k$ for a rundown house that needs to be bulldozed. And that’s a deal! Are the views in Vancouver really that good?
In the USA just prior to the GFC, appraisers were at the pointy end of crisis as they filed enough fraudulent reports to undermine loans. This got whipsawed by credit default swaps and, well, the rest is history.
While I don’t feel the love for real estate agents, there are a lot of players in the structure (appraisers, lenders, lawyers) who abet the process and who could cut it off pretty quickly.
Blind auctions are a symptom (maybe the worst) of a broken system. I agree with Garth’s commercial buddy when he calls residential real estate a “cesspool”.
I like the BeeMo suggestions A thru F – all eminently sensible. Not sure I’d go to G (end principal residence capital gains exemption) just yet, and certainly not eliminate it entirely. Of course A (raise rates) won’t happen until hell freezes over, as the BoC seems largely unconcerned with home prices surging 20-30% yoy. And frankly I don’t expect the government to do anything meaningful.
It’s not just house prices going wild. Stocks are extremely expensive, and some indices have gone parabolic. This is extremely unhealthy behaviour and indicative of economic policy that is far too loose. It’s what happens when policymakers spike the punchbowl for a decade and the players assume there will never again be downside risk, since the policymakers will step in to rescue the bubble every single time.
I’m growing more and more concerned they’re going to lose control and we’re going to see significant inflation. Or maybe the plan is for intentional inflation in order to inflate away the copious amount of debt on the backs of the poor and middle class. Either way, I’m so concerned that I recently did something I’ve never done before – buy gold (small percentage of portfolio). Well not gold, but gold miners – at least the miners pay dividends and buyback stock. I’ve never thought much of the yellow metal, but historically it has provided some protection against the printing press. If we go full-on Zimbabwe – and with the way central bankers are talking and ignoring the clear signs of tremendous excess, I can no longer fully discount the possibility – hopefully it will provide some protection. I know some are looking to crypto for similar protection, but I can’t bring myself to go there – at least not yet.
If CMHC (us) wants to play such a big role, (using our $), they should require listed properties to be pre-inspected to ensure CMHC (us) isn’t going to be on the hook for 95% of a 50% overvalued problem.
Who gave CMHC our proxy? As in who’s really in charge?
Us or them? Yeah, I know….
#132 Howard on 03.31.21 at 11:11 am
#131 IHCTD9 on 03.31.21 at 10:12 am
For years I have advocated for Ontarians to gtfo of the GTA and build a better quality of life in a smaller center.
This has now become more difficult, but after a quick look at MLS’s for 4 nearby small cities, I have to hold my ground I think.
————————————
I think at this point the choice for young Canadians without rich parents is between emigration, lifelong housing instability and stress, or suicide.
First option is the only desirable one.
_____
Admittedly, the options for a good quality of life in Canada are indeed shrinking fast under our current “leadership”.
A Government job in a smaller center is still a workable formula, especially DGINK’s (dual government incomes, no kids). Commuting to a smaller city for work while really getting out into the hinterland for a house is an option too – if you are cut from the right kind of cloth.
The kids these days need to be wise as to what they are getting into, and plan very carefully. My eldest is facing this decision right now. He was accepted into RMC to become an Officer in the CAF – this is a pretty solid deal from the looks of it. No riches, but nothing to complain about either. Better than a fat slice of private sector employment. He also has applied to 3 Universities for Computer Science, and IMHO – this might be setting up a requirement to have to work in a Metro. I’ve already added my $0.02 on that point, the rest will be up to him.
I give thanks every day that I did not have to start out trying to build a life under a PM like Trudeau.
“(g) End the exemption of principal residences from capital gains taxes.”
I can definitely appreciate the public’s concern here, but taxing a principal residence is not the answer.
If the property values drop, is there going to be a taxable credit for that? No, right? So why tax a principal residence when the value goes up? This will not continue forever and those that have purchased before this crazy increase in price, should not suffer because the market prices have gone up.
What’s the option to closed auctions … open auctions ? Works well for art. And if BMO thinks politicians should act, maybe they can show a sign of good faith first by incentivizing their salespeople not to make stupid mortgages. It’s not like BMO can’t tighten their own standards.
#24 Faron on 03.31.21 at 12:54 pm
#115 BillyBob on 03.31.21 at 6:09 am
Just can’t get me off your mind can you? Touching. Sad, but touching.
What happened to you in Victoria?
———————————-
I’m wondering, too.
Must be a deep emotional scar.
Victoria and the Island is a beautiful place.
Sure, they have problems with homeless people and druggies, but so do other places.
@#17 Flop… on 03.31.21 at 12:26 pm
Well, I posted a loss for a a real estate investor yesterday of 2 million, opportunity costs over the six years added on top hurt but I’m going to pivot to the bottom end.
Time after time, day after day as things started to unwind in 2017 in Vancouver detached market I saw people post on this very site that in a couple of years they were going to vulch.
After showing a lot of heavy losses that the pumpers constantly denied were happening, someone would sprout that it was only the top end getting pummelled, eventually the rot set right in to the bottom of the market and those that bought on the bottom rung and didn’t buy to hold took reasonable percentage losses.
The people talking about vulching on here, were they seriously going to buy, I had my doubts and was one of my inspirations behind my hundreds of “Race to a million” posts on here and my Pink Snow blog.
I think when I started noticing the bottom end of the market really start to correct the bottom rung on detached market was around 1.2 million.
A short while later it busted through the 1.1 range but then I remember it pausing for a while above the mental marker for sellers of the flat one million for your house.
Probably edging close to a year later in early 2017 you could pick up a totally liveable, starter home in a respectable area of Vancouver proper for less than 900k, occasionally you would see one with an 8 in front and a house that needed to be bulldozed could be had for around 750k.
Not once did I see anyone on here declare that they were getting ready to buy despite myself observing that the general number chucked out there the people would think was a good price to buy was 750k when the previous asking prices for these prices were around 1.2, only 15 months earlier.
Now the price of the exact same properties with 4 more years on the clock is currently shooting past the prices they wanted back in the heady days of 2016.
I guess what I’m trying to say, is that no one knows how long all these cycles are going to last, but there was an opportunity for people to get in for about a year where developers, speculators and just about everyone else, sat on their hands and did nothing, when as the host of this blog points out only started buying when prices were going back up, and they had way more competition for the same previously unloved property.
Young people today need to make decision on how much owning real estate really means to their life goals.
Probably at 25ish you need to decide how important this decision is for you personally whether you are partnering up or not.
Go for it when one of these resets happen or go mobile, rent, and revisit things much later on when the cycle could be completely different.
I didn’t have nowhere as much pressure on me as kids today, when I bought my piece of real estate, I had income, affordable housing everywhere, sizeable downpayment and not much of a rental market to choose from at the time.
To be honest I don’t even know how old I was when I bought, I think 19 or 20 but it turned out that it was such an insignificant moment in my life that it doesn’t even register in any form of importance in my overall life.
Had the mortgage paid off in around 2 years with small payments, so you see why it was just a small blip in my 46 year timeline
I had it, I didn’t need or treasure it, it was not my life goal to be a homeowner, but I understand how much importance people place on it, which is why I was willing to document a moment in Vancouver real estate history while I was laid up for an extended period of time.
Now is clearly not the time to be a buyer on the bottom end in Vancouver, but who knows, like last time I documented, in a year or so it could be be go-time if it means the world to you…
M46BC
–
buying real estate didn’t hit my radar until around 30.
too busy living life and trying to pay off student debt.
If you’re in your 20’s and owning real estate is a worry for you, maybe you need to do a little soul searching.
#24 Faron on 03.31.21 at 12:54 pm
#115 BillyBob on 03.31.21 at 6:09 am
Just can’t get me off your mind can you? Touching. Sad, but touching.
What happened to you in Victoria?
And sorry for using HTML markup. I know it gives you certain feelings about me
**************************************
I couldn’t remember how long I’ve been following this blog so last week I went back to some earlier posts to see what I recalled. Stumbled across this one about Victoria posted in 2008 by Lawrence. Not sure if he is still around but I thought the Fantasy Islanders might enjoy this 13 year old perspective. I know, he should have just bought a house by the park.
******************************************
#9 Lawrence on 03.24.08 at 7:05 pm
Victoria has probably the highest poverty level of any Canadian city. When I first moved here, I couldn’t believe all the street people, syringes near parks (they are offered free by the government) and the filth. Also, the city is very polluted thanks to 90% of people who cannot afford newer cars and drive pollution spewing 30 year + rustbuckets. And also, the majority of owners hardly get by and must resort to wood burning as their primary source of heating.
There aren’t any high paying jobs here, not a single head office, just low paying jobs associated with the geriatrics and tourism industry. Unless, of course you have a relative working with the BC government, perhaps you can get a job there.
In addition, the city doesn’t have elaborate bike paths or park systems like Toronto, Ottawa, Montreal or Calgary. People are not friendly.. many are frustrated and scrowl faced.
I just don’t see the wealth here, that’s all BS, just like the notion that Albertans are buying here. They are buying in Phoenix and Palm Springs not in grey, cloudy, cold and rainy Victoria. After I complete my project, I am out of here
IHTC
The kids gonna be all right.
Best not interfere too much.
Experience is the best teacher.
#13 Howard
All these suggestions being thrown around, when all that is necessary is three things:
1) Abolish the CMHC and force banks to take the risk
2) End QE bond rigging and allow mortgage to rise according to free market demand
3) Remove the tools and conditions that permit money-laundering to flourish (non-existent law enforcement, numbered companies, etc)
That’s it. That’s all we’d need.
But that would actually work so our Government won’t choose that path. Too many people in Government and society are benefiting from real estate. Nothing will change until a crisis and then we all lose big time.
Blaming the PM for high real estate prices?
Next time you see him putting a gun to a buyers head, phone 911.
And remember, there is no constitutional right to own a house.
Houses too expensive?
Rent, and invest wisely.
You’re probably better off in the long run.
When I sell my property by myself … possibly in the next few weeks/months, I can assure you I will employ every tactic in the book, especially those described here.
I draw the line at holding a gun to the head of those who choose to make an offer.
>A spec tax – a special capital gains tax on the sale of residential real estate purchased from today forward, with the rate falling to zero over five years of holding the asset
Sorry, that won’t work. That will just encourage people to hodl their houses and never sell, further limiting the supply. Taxes = bad.
#38 Ponzius Pilatus on 03.31.21 at 1:52 pm
IHTC
The kids gonna be all right.
Best not interfere too much.
Experience is the best teacher.
__
Agreed, I gave him .02 and that’ll be it – unless he asks for more.
#32 IHCTD9 on 03.31.21 at 1:33 pm
Canadian Forces a good choice today, there could not be a better launch point for a young male than RMC in today’s complex, ambiguous society. The forces still are largely a meritocracy where what you do is more important than what you look like, where you are from or how rich \connected your family is.
Prospects in our regular economy for the young are there but increasingly only for the top 10% of the Bell Curve. (Housing however out of reach unless parents help)
#28 Immigrant man on 03.31.21 at 1:03 pm
750k$ for a rundown house that needs to be bulldozed. And that’s a deal! Are the views in Vancouver really that good?
—————–
that was at the pit of doom for RE in van. not today.
a couple hoods over, still in east van, near the drive, the bottom was around 1.1m. a neighbour of mine got the best deal, paid 1.0m for a dozer bait house about 3 years ago.
today it will go for 1.75 instantly.
This behaviour is irrational exuberance. It’s the last phase of the bull run. Let it run it’s course. The lesser we interfere, the faster it will self destruct. The last set of greater fools will go bankrupt. Don’t think anyone would shed any tears for them.
I hate Real Estate*.
Tulipmania Cdn style.
———————–
#15 TurnerNation
Live now on Twitter Macron trying to sell a 5 Apr to 5 May, 1900h curfew, schools shut down, you name it to his nation.
https://twitter.com/EmmanuelMacron/status/1377319892706324480
His fellow countrymen in the Comments less than enthusiastic, few likes.
I admire his verve though.
Poor France having a hell of a time with Covid variants as is Italia. My Region, FVG, 90% of all new cases are the UK variant.
———————–
Speaking of variants, Canada had a heck of a variant spike yesterday…
https://twitter.com/bsant54/status/1377180013141794821
Vax’ng off despite the supply being there…
https://twitter.com/bsant54/status/1377182432768577536
Cdn BS about AstraZeneca blood disorders (Germany in on it too now), Pfizer about as bad and “scientists” ignore wealth of data from UK NHS, 24M jab experience with those vax’s and TRUDEAU saying take whatever you can get and the real reason why:
https://twitter.com/bsant54/status/1377199783450980354
[Hint: take disorders ÷ millions of jabs]
PS:
Cdn Medical Science reinventing the wheel by its lonesome. Can’t Google Search properly or does not know UK NHS exists. Or, they distrust science from foreigners?
————–
*Yup, just another Covid-19 day on Planet Earth.
Blind offers? Blind bids? Really?
An asset owner has the right, yes the right, to sell their asset any way they choose.
The buyer does not have the right to full transparency in a purchase.
I’m surprised Garth does not agree with this.
#37 Don Guillermo on 03.31.21 at 1:52 pm
I could point out an equal number of crappy things about Ottawa, Toronto, Calgary or any large/largish city in Canada NTM your town in Mexico. But, you know what, I don’t. Why? Because everywhere I’ve been I’ve found stuff that I liked about the place. From Trail to Calgary to Edmonton to Saskatoon to Toronto to Moncton to Dartmouth to Garth’s Lunenburg in Canada let alone where I’ve travelled outside of this country.
Is Victoria perfect? Hell no. Is your Mexican town perfect? Also no, especially outside of whatever gringo echo chamber you inhabit. I’m sure your town is lovely in some ways and a ramshackle heap of tenements and roadside trash in others, but I’m sure you make sure you don’t have to look at or deal with that.
Grousing about Canada or Canadian cities from outside it’s borders is tres fabergé egg. Glittery, but hollow AF. Unfortunately, not so rare on this comments section. You, BB, Howard, Toronto_CA and whoever else complains from afar — running away while throwing insults — are cowards. It reminds me Canadians complaining about the US who don’t even know where Washington state is or what side of the country Arkansas is on.
Anyhow, tune in next time when BB weighs in about how “angry” I am and then offers to boink a woman he’s never laid eyes on. As I’ve said before, we are far, far better off without the likes of you.
Not holding my breath.
Wonderboy blew a yuuge hole in Canada’s finances.
Governments are Waaaay too dependent on RE sales tax Revenue to do anything substantive.
#44 Dogman01 on 03.31.21 at 2:11 pm
#32 IHCTD9 on 03.31.21 at 1:33 pm
Canadian Forces a good choice today, there could not be a better launch point for a young male than RMC in today’s complex, ambiguous society. The forces still are largely a meritocracy where what you do is more important than what you look like, where you are from or how rich \connected your family is.
Prospects in our regular economy for the young are there but increasingly only for the top 10% of the Bell Curve. (Housing however out of reach unless parents help)
_____
Seems like a pretty good deal. Decent wages, no debt, ok pension, 100% job security, retire at 43 if you want. If you want 6 figures it is possible, if not; you’re still doing ok.
Looks like he’s really taking a shine to CS though, even though the CAF was all he was interested in throughout high school. It’s a lot tougher to get into RMC than a regular Canadian Uni too, so it’s a bit of a feather in his cap getting accepted.
We’ll see what goes down, it’ll be his call.
We know the government will take the wrong action. I have been following for years. But I’d hate to see them reintroduce longer amortizations etc. As someone who would love a home to own, at this point of waiting, saving and investing, I think I’d rather see the status quo maintained and let the cards fall where they fall.
Personally, I have my own rules in place for when I have bought, and sold, a house in which I have lived in. I am an expert in doing what is right for me.
Book smarts and street smarts have been of #1 importance as I have been managing my own affairs since the age of 10. I am now near 70.
Listen to Garth, as he is giving you all the rules which will stand the test of time.
Freedom First
#32 IHCTD9 on 03.31.21 at 1:33 pm
He was accepted into RMC to become an Officer in the CAF
—
Sincere congrats IHCTD9, that’s huge!
Random Length lumber over $1,014 US today. Never thought I’d see that.
Real Estate cartel is out of control. Other industries are regulated and the R/E industry needs more oversight as well.
My guess is that Langley townhouse that sold for $500k over asking was the same situation. Some (probably a senior) buyer was cajoled by their agent to submit an exorbitant bid to “win” the purchase and the other offers were for far less. No one in their right mind would pay $500k over asking for a 2 bedroom townhouse in Langley.
I think the market is crazy enough to price in any new taxation structure because of sheer shortage of supply. There’s nothing for sale especially if you you must move. We had to recently move within NS for a job transfer. We lost 16 offers, until a seller finally said yes (and we’d offered under asking!) We won’t tread out in these waters again anytime soon….
All of you all know, deep down, that this all started with Mulroney and him allowing the banks to expand into insurance, annuities, mutual fund sales, etc.
Because the trade off for that was to allow those formerly in those sectors to also provide mortgages.
Suddenly it was mortgage for you and you and you and you…just like on Oprah.
And now here we are. Disingenuous to (entirely) blame the current government. I mean who first offered 40 year amorts?
Depressing surveys in the U.S. suggest scoopers represent only 60 per cent of dog owners.
The resulting leftovers are a health and environmental risk, says the Canadian Public Health Association, which notes kids are especially susceptible to diseases carried in dog feces.
https://www.thespec.com/news/hamilton-region/2021/03/11/its-so-gross-why-do-so-many-hamilton-dog-owners-refuse-to-scoop-poo.html
Thank goodness greaterfoolers are 100% scoopers, right?
#43 IHCTD9 on 03.31.21 at 2:10 pm
#38 Ponzius Pilatus on 03.31.21 at 1:52 pm
IHTC
The kids gonna be all right.
Best not interfere too much.
Experience is the best teacher.
__
Agreed, I gave him .02 and that’ll be it – unless he asks for more.
—————————
Haha,
If he goes to University, he’s gonna need more, much more.
While they’re at it, they should probably end the practice of real estate agents being able to represent both the seller AND the buyer. I wonder how many of those over inflated accepted offers come from the seller’s own agent?!
Somebody else mentioned this today as well but end CMHC backed mortgages. Make the banks responsible for the loans and not have any taxpayer bailouts for them if they screw up like they did back in 2008 to the tune of $75 billion.
Easy come easy go.
For the people getting sucked into a blind auctions b/c their mother told them they are the best and should win at everything – Champagne is on it’s way courtesy of HGTV. You won!
Any profession where the only way you make money is by directly trying to influence the buyer has no conscience. None. Don’t fight it. Keep your kids out of the loop.
IoT may lean it alllll out! PAN has taught that what you need you get online.
Og
#48 John The Grouch on 03.31.21 at 2:47 pm
Blind offers? Blind bids? Really?
An asset owner has the right, yes the right, to sell their asset any way they choose.
The buyer does not have the right to full transparency in a purchase.
I’m surprised Garth does not agree with this.
——————————————————
This is true – caveat emptor never dies. But when you have a system set up whereby gains are privatized, and losses are socialized (or at least the banks are protected, off the taxpayer dime), you can understand why people might get a bit cranky if the behaviour you describe on an individual level, scales to an industry-wide best-practice level.
Most systems are robust enough so that when a small number of people game them, it’s just exploiting a loophole. We rightly celebrate that, because a smart person found a competitive advantage.
When everybody exploits the loopholes, though, that’s when systems collapse. And usually with serious and unanticipated knock-on effects.
https://www.blacklocks.ca/cmhc-lied-on-housing-tax/
looks like CMHC did want to speculate on some housing tax
#49 Faron on 03.31.21 at 3:00 pm
#37 Don Guillermo on 03.31.21 at 1:52 pm
Is Victoria perfect?
**********************************
Just sharing Lawrences 13 y/o perspective of Victoria.
Speaking of Trail here’s a photo from around 1900. Arlington Hotel shows up on the right. I was raised in a little trappers shack like the ones in the back of the photo. The hill going up later became Oak St. Great childhood. We didn’t know we were poor. My best friend from Oak street moved to Victoria 40 years ago. My first overseas job in 1975 was in Algeria. When I arrive the fellow I was travelling to site with was raised in North Van. He couldn’t believe all the poor houses we saw driving around. I didn’t know what he was referring to. Great times.
https://www.facebook.com/LostKootenays/photos/a.176494359167738/1938467659637057/?type=3&theater
Its so funny the banks control the money tap then when people come and fill their buckets they squawk.
No money no market simple?
I vote for a coup d’etat with Garth leading it, but since that’s not going to happen…maybe the PC party will grow kahonas and start actually making some oppositional moves.
Trudeau is inept. He is afraid to call China out for repression of their own people, he hasn’t fired Tam, who deserves to be fired for her incompetence and denying any responsibiity for the disastrous handing of the pandemic. He hasn’t taken any action on money laundering, so why expect him to take any action on a housing bubble?
So is Real Estate part of this surprise strength?
https://www.bnnbloomberg.ca/canada-s-recovery-gains-steam-with-growth-tracking-above-5-1.1584701
What loser is going to listen to bank economists or real estate lawyers? Pffft!!!
Do they drive an Audi?
End of discussion.
DELETED
While we’re on the topic of the ridiculousness in real estate, check out this tear down dump near us….sold March 2020, they are asking $848,000 more than just 1 year ago, now asking $3,198,000. It’s a POS, no view, totally rundown.
https://www.zolo.ca/vancouver-real-estate/3781-west-27th-avenue
I bet one loonie on government believes budget/RE market will balance itself. UBI and cannabits are more important on our agenda.
Too many opportunities have been missed. Human beings have to be taught the hard way. in last 10 years also, the group being taught is the greaterfools; the flappers and amateur landlords still have couple years. Just how many greaterfools are switching to the other side before that because of FOMO…
real estate industry is rotted
I know a recent deal where the differential was MUCH higher than stated above… and worse… two offers total… the difference between the two (only!) offers was gob smacking
NY Times on AZ vaccine story:
https://www.google.ca/amp/s/www.nytimes.com/live/2021/03/24/world/covid-vaccine-coronavirus-cases.amp.html
https://www.nytimes.com/interactive/2020/health/oxford-astrazeneca-covid-19-vaccine.html
This is being sold with two other adjacent lots:
https://www.realtor.ca/real-estate/22975729/4883-belmont-avenue-vancouver
$99 million total. Will there be a bidding war on this ?
At the end of the day, what someone is willing to purchase a house for is what it is worth. With or without a blind auction.
No more taxes, the gov will simply waste, it, its a drop in the bucket when compared to gov spending.
Stop blind auctions yes
Dont touch capital gain taxes
that will stop investers from offering rentals which in turn decreases supply of rentals which will cause increased rent prices.
Its already difficult to finance rentals! dont beleive me try it. I have had them for 20 years, they are much more dificult to finance than ever before “A”lenders are ecentially out of that buisiness.
Flippers already pay capital gains, they dont make what you think, if it was that easy more would be flipped.
Amature landlords provide 50% of all rentals so take that away and see what mess you have.
Oh sure! Blame the PM PM (aka Mr. Justin Trudeau). How can somebody with his dance moves be anything but brilliant? Just watch and learn.
https://i.ebayimg.com/00/s/MTIwMFgxNjAw/z/c88AAOSwM9ZgV4ef/$_1.JPG?set_id=8800005007
BB
https://www.youtube.com/watch?v=nqStHqdqODg
#48 John The Grouch on 03.31.21 at 2:47 pm
Blind offers? Blind bids? Really?
An asset owner has the right, yes the right, to sell their asset any way they choose.
The buyer does not have the right to full transparency in a purchase.
I’m surprised Garth does not agree with this.
—-
This is the truth.
Ask the Toyota dealer how much your neighbor paid for his Civic, ha ha ha
If your name is not on the contract, it’s none of your business
Amongst the banker’s suggestions, we find the following gem: (e) Make it harder to get a mortgage. Increase debt service ratios.
Meaning, they are demanding regulation that prevents them, the lenders, from lending so much money. You can’t make this stuff up.
Reading this statement (and the posts of the last few weeks in general), one would think that people are being forced to buy homes. Where on earth did personal accountability go?
Those damn greedy sellers.
Do a FSBO and you’re greedy.
Use a realtor and you’re both greedy.
Seems like sellers are getting a bad rap.
But in the end you know what they say.
uppa, Uppa, UPPA
#11 Love_The_Cottage on 03.31.21 at 11:50 am
———————————————————
Libtard #11 Revenue is a Federal responsibility like capital gains etc.
The sock boy Jr. is responsible for alot of our issues but hey, let’s blame Dougie right. I can bet you probably do.
Two stories, one about my only time in a bidding war:
In 2007, I put in an offer on a Toronto house. My agent asked me to come down to the office while the offers were considered. I refused and said my offer was my only offer. I didn’t get the house, happily. I wound up buying privately from an acquaintance and my lawyer wrote a compelling agreement of purchase and sale. I know Garth says you should use an agent to buy, but sometimes you can’t trust your own agent, who is looking out for his commission….
In 2018, a co-worker was selling his condo. He was in his agent’s office looking over the one offer. His agent picked up the phone and winked at him as he called the buyer’s agent. My co-worker’s agent said that his client would consider the bid if the buyer sweetened it by $10K. The agent said yes almost immediately.
@36 Don Guillermo
What a blast of ignorance:
#9 Lawrence on 03.24.08 at 7:05 pm
Victoria has probably the highest poverty level of any Canadian city. When I first moved here, I couldn’t believe all the street people, syringes near parks (they are offered free by the government) and the filth. Also, the city is very polluted thanks to 90% of people who cannot afford newer cars and drive pollution spewing 30 year + rustbuckets. And also, the majority of owners hardly get by and must resort to wood burning as their primary source of heating.
There aren’t any high paying jobs here, not a single head office, just low paying jobs associated with the geriatrics and tourism industry. Unless, of course you have a relative working with the BC government, perhaps you can get a job there.
In addition, the city doesn’t have elaborate bike paths or park systems like Toronto, Ottawa, Montreal or Calgary. People are not friendly.. many are frustrated and scrowl faced.
I just don’t see the wealth here, that’s all BS, just like the notion that Albertans are buying here. They are buying in Phoenix and Palm Springs not in grey, cloudy, cold and rainy Victoria. After I complete my project, I am out of here
1. Victoria has probably the highest poverty level of any Canadian city. No. My bet would be Winnipeg. There’s a big difference between visible (street) and invisible poverty.
2. The city is very polluted ????? There is a breeze/wind off the ocean 360 + days per year in Victoria, and probably 100 days+ with some precipitation, and several million trees. Cleanest civic air and drinking water on the planet, more likely. Wood burning? – very little in the warmest city in Canada in the winter months. I’ve never heard of complaints about air pollution in Victoria, and before anyone squawks the sewage treatment is up and running.
3. High paying jobs include wealth management for all the rich people, professionals of every kind, and higher level civil service jobs from directors to deputy ministers. Thriving real estate development. Contractors to the provincial government. Plus all the businesses that thrive off the civil servant middle class and tourists.
4. Bike paths – current mayor Lisa Helps has replaced Gregor Robertson as the most hated in B.C., for exactly the same reasons – bike paths would be well in the top three
5. The notion that Albertans are buying here can be confirmed by the real estate agents selling houses in Oak Bay to oil patch multimillionaires who are joining Victoria Golf Club and buying one of their retirement properties. They like to fly to Victoria for the weekend to visit their property and play a couple of games of golf.
Victoria has an admittedly provincial museum, art gallery, symphony orchestra, opera company, art house movie theater and a pretty good restaurant scene because of the civil service middle class and tourism. It has a nicer climate by far than the rest of Canada, and offers year round golf. Fantastic boating in the southern gulf islands, easy access to the U.S.
Slow paced, uptight, and overly cute and wannabe British to be sure, but for overall quality of life Victoria is hard to beat.
Coup is real. Conservative momentum is increasing. Liberals won’t put out financial fire . Dog loving conservatives enjoy biting liberal rats. Nobody west of Kenora will vote Liberal. Jagmeet will hit unemployment line after next election. All boils down to how many Torontonians enjoy being xxxxheads or Canadians.
PB43
#54 Faron on 03.31.21 at 3:17 pm
#32 IHCTD9 on 03.31.21 at 1:33 pm
He was accepted into RMC to become an Officer in the CAF
—
Sincere congrats IHCTD9, that’s huge!
— –
Thanks! Now hopefully he’ll take them up on it :)
For all buyers of real estate.
Don’t want to be involved in a closed bidding process?
Simple dat, make a bully bid. If they accept, great!
If not, then so what.
If we switch to open bids, that will only push prices higher. Research is clear that open auction systems yield higher prices in comparison to blind bids. Plus Australia has an open bid system for real estate and look where that’s got them.
#39 Canadian
All these suggestions being thrown around, when all that is necessary is three things:
1) Abolish the CMHC and force banks to take the risk
2) End QE bond rigging and allow mortgage to rise according to free market demand
3) Remove the tools and conditions that permit money-laundering to flourish (non-existent law enforcement, numbered companies, etc)
*****
Good ideas.
I would keep the CMHC, but only for first-time buyers. That helps the kids, and encourages people to build equity in their existing homes if they want to upgrade (since the commercial banks would demand a larger margin of safety without the CMHC backstop). Having the taxpayer – through CMHC – backstop the current craziness is unacceptable.
The QE is supposed to help people by keeping their borrowing costs low. Only problem is it encourages new borrowing and leads to asset bubbles. I’m sure the newlywed couple appreciates the low interest rates when they’re paying 30% more this year compared to last for a home (if they’re fortunate enough to still afford one).
#3 goes without saying, and should have been done eons ago. No excuse not to get it done now.
FOMO is a viral meme.
I have updated my 13th edition of month-end charts on the progression of the global pandemic with the March data:
http://www.chpc.biz/history-readings/pandemic-update6675445
% Deaths of Total Cases = 2%
% Recovereds of Total Cases = 81%
6 month increases:
Cases = 178%
Deaths = 135%
Recovereds = 211%
Epidemiologists are still concerned about:
– The variant case increases and severity.
– The anti-vax and anti-maskers.
– Developing countries that lag far behind in procurement and distribution of vaccines.
Young people are the biggest cohort in Canada now getting infected (19-29-39-49-59 all double digit percentage case infection of total cases.
https://www.statista.com/statistics/1107149/covid19-cases-age-distribution-canada/
Advise your friends and family.
#70 Stone on 03.31.21 at 4:23 pm
What loser is going to listen to bank economists or real estate lawyers? Pffft!!!
Do they drive an Audi?
————–
Of course, they drive Audis.
No room in an F-150 for clients.
Maybe put park benches on the back trunk?
#49 Faron on 03.31.21 at 3:00 pm
Anyhow, tune in next time when BB weighs in about how “angry” I am and then offers to boink a woman he’s never laid eyes on. As I’ve said before, we are far, far better off without the likes of you.
//////////////
You do sound angry. Maybe you need a gobby?
I mused the other day whether it was wise to take my elderly In-Laws to do their taxes and vaxxes in the same day.
Mum was fine.
Dad rolled up his sleeve in the tax office, and pulled his pants down at the vaccination centre, but apart from that things went pretty smooth…
M46BC
The CMHC’s mandate was (and is) to provide Canadians with affordable housing. The threshold for it’s involvement in loan guarantees to the banking sector should be limited to no more than $300,000 (arbitrary yes, but a good start). You and the bank want to buy homes more expensive than that? You’re on your own.
Won’t happen, but should.
In the states they spell it R.I.C.O.-Racketeer Influenced and Corrupt Organizations act seems to fit even if they want to go with R.E.C.O. here.
Then again though: It is a dimension as vast as space and as timeless as infinity. It is the middle ground between light and shadow, between science and superstition, and it lies between the pit of man’s fears and the summit of his knowledge. This is the dimension of imagination. It is an area which we call The Twilight Zone.”
I’m not sure blind auctions make any difference. In fact, from what I’ve seen of open auctions (not been to one for a house mind you) they might be worse, because they squeeze every last dollar out of the successful bidder. “Someone bid $504? Well it must be worth $510 then.” Auctioneer: “$510! Do I hear a $515, 515, 514, 513, 512…$512! $513, 513, do I have a 513…” you know the routine. So an open auction might have been worse.
Lots of ideas get tossed around about how to fix the housing market including a capital gains tax because everyone is mesmerized by the notional wealth being created, but the fact is only 2 things will really help; increasing interest rates and increasing supply (reduce zoning restrictions for example). Everything else is just a Band-Aid solution. I mean look at the land transfer taxes in YYZ and YVR, which act as a sort of capital gains tax, and they didn’t do anything! The mayhem continues unabated. And as always the buyer pays all the taxes not the seller. A capital gains tax will most likely put upward pressure on prices, not downward, as sellers figure they need to cover that cost too like they do with realtor commissions. You can’t make something more affordable by taxing it.
You are an idiot if you get caught up in a blind auction bidding frenzy for real estate — an idiot!
#56 S.Bby on 03.31.21 at 3:32 pm
My guess is that Langley townhouse that sold for $500k over asking was the same situation. Some (probably a senior) buyer was cajoled by their agent to submit an exorbitant bid to “win” the purchase and the other offers were for far less. No one in their right mind would pay $500k over asking for a 2 bedroom townhouse in Langley.
/////////////////////////////////////
Hey Sobby, I looked at the listing the other day when someone asked how much the realtors got from that deal.
Below is an edited version of that post, that doesn’t look very flattering for the realtor considering what happened with that sale, paying 500k over ask.
Look at the details closely.
It appears to be the same bunch, just a different branch of the tree.
Different brokerages pulling the goat in the same direction over the same cliff…
M46BC
——————————————–
#77 Flop… on 03.26.21 at 4:27 pm
—————————————————————————
From the Langley listing.
Seller’s Agent Sutton Group-West Coast Realty
Buyer’s Agent Sutton Group-West Coast Realty (Surrey/24)
Governments, bankers, legislators, lawmakers etc…. should all just leave Real Estate alone. Caveat Emptor!……….it’s the wild west gambling casino of the age today! It’s a great way for us sellers to get a maximum return from all the people who want to play the game with us. All we sellers care about is getting the most money out of you. That’s why we pay the Realtors, who work for us, to come up with every trick in the book to get the most for our digs. There is nothing wrong with doing this…….nothing to talk about here folks……….just leave well enough alone……….the Real Estate markets working just fine.
Bankers…like hiring an arsonist to advise you about fire insurance.
They love the low interest, free money we’ve had from the BoC for many years now. Until they suddenly don’t like it.
They are perfectly capable of raising their own lending standards for mortgage qualification. They don’t need to wait for government to change the rules to do that.
It may be the case that all the things are deeply inter-related, as they usually are. Consider this abbreviated chain of events:
-Vietnam war causes US to go deeply in debt
-As a result the gold window is closed
-A period of systemic inflation begins
-Conventional US oil production peaks, but worldwide it continues to grow
-Cheap energy is still abundant, so the economy grows but is increasingly reliant on imports
-The “oil shock” of the 80’s interrupts growth but is temporary since it was artificial
-Fast forward to the mid 2000’s and world-wide conventional oil and cheap energy peaks
-Energy prices go ballistic
-As a result, in 2008, the financial system nearly melts down
-A period of “emergency interest rates” has continued since 2008 and there is no end in sight
-These emergency rates allows the financing of alternative energy sources like wind and shale oil, but these energy sources turn out to be too expensive to support the economy even with rock bottom interest rates
-The emergency rates cause a rapid rise in all kinds of phantom wealth including in stocks, bonds, bitcoin, and even houses but no new actual physical wealth is produced
Where we are now:
-Cheap imports from China and others keep the CPI deceptively low
-Nobody wants to hold cash, but the CB’s feel compelled to keep printing more of it
-Inflation expectations in certain areas like stocks and housing have become entrenched
-A pandemic arises which temporarily reduces demand for energy and it is met with a huge increase in the money supply but no new economic activity
-M2 money supply is way up, but money velocity drops like a stone
We are at the Camping Stage.
We are all out “social distancing” with our neighbors like a bunch of campers who have tents and food in the trunk and a portable BBQ. Things seem fun even though the weather is lousy. But there is only so much food left in the trunk. Once all the food is gone the party is over and it is time to head home and fend for yourself.
What comes next?
-An eventual realization that things are not going back to normal
-Resource wars
-Government upheaval
-Economic decline
-And a bunch of other bad things
Too far gone in my opinion.
My realtor back in day said he had a friend who always puts in a non-serious low ball offer on his listings so that the realtor could go to the other agents and be like…offer coming in. Act now. Then all of the sudden he gets 6 offers.
Then he tells me…you want a new mercedes? Let’s rip up all these offers and send the buyers back to the drawing board. We will tell them the demand is insane proving the price is too low and jack the price 60k.
I picked the one who looked to want to live in place and said I don’t need a new car.
Problem is, if you don’t play the game this price pumping eats you, because the next place will be inflated.
Realtors need to be replaced with AI and blockchain.
Same with bankers.
Put in limits on what one can lend on.
And the final change that would fix it all. 1 home per family for living in. That is it. Supply fixed.
And if there is not enough houses per every family in Canada, then start building.
There is enough houses for every one family in Canada. Time to shut this unregulated casino down.
I don’t want my house going to 2M. It is stupid. It is going to take everyone down eventually.
Oh and look at what is being proposed. An end to work from home by the big corps. Soon!
Just an anecdote from Vancouver bidding scene.
A week ago we put an offer on a house and there were 10 bidders. We were asked if we wanted to bid higher as we were in the top three. When none of the top three bidders , including us, wanted to offer more, the owner decided to sell the house to a neighbor. She and her agent were using us to discover the price, but all this time, the owner wanted to sell the house to a neighbor. Once she knew the highest bid and the neighbor agreed to it, she sold the house to a neighbour for few thousands less then highest bid. I asked the agent if this was even legal and he said “yes” . It was not ethical, but it seems that it is legal. Welcome to the wild west people. When I moved to Canada 20 years ago, ready to work hard and pay my taxes, I never would have believed this. Greeting from Banana Republic!
One sure way to decrease mortgage demand would be to shift the risk from the taxpayer (CMHC) and put this risk back to the banks where it belongs.
Number 86 Keith you are 100 per cent correct. We moved to Central Saanich from the South Okanagan which I felt
was the best place to live but we are extremely happy to have retired here – no regrets.
People that have not yet been exposed to this don’t know what’s in works. Centralized global control over everyone and everything. That’s the Blockchain and QR codes. Or do you think your leaders have shut down life, culture and the economy for over a year now, for your health?
Remember…there is no more news. A clear timeline for lockdowns has been here given:
https://time.com/5900739/fix-economy-by-2023/
……………………………….
-Economic & Culture Lockdowns for Easter of course. In the Former First World Countries
28 days!! Gee they said that, last year.
.Ontario: Either the whole province will go into a 28 day “shutdown” or specific regions like Toronto & Peel will (twitter.com)
.Turkey reimposes restrictions after sharp rise in infections (apnews.com)
.France to widen Covid-19 lockdown measures to others parts of the country, says Macron (france24.com)
.Premier Doug Ford says “stay tuned,” there will be an announcement on a potential lockdown tomorrow. The Premier has a cabinet meeting today to review new modelling data. (twitter.com)
,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,
The “news” summed up. Everything old is new again. This stuff works:
https://en.wikipedia.org/wiki/Zersetzung#Targeted_groups
Operations were designed to intimidate and destabilise them by subjecting them to repeated disappointment, and to socially alienate them by interfering with and disrupting their relationships with others as in social undermining. The aim was to induce personal crises in victims, leaving them too unnerved and psychologically distressed to have the time and energy for anti-government activism
—– Another Revenue Stream
Russia registers ‘world’s first’ Covid vaccine for animals.
The agriculture oversight agency Rosselkhoznadzor said in a statement that the vaccine called Carnivak-Cov had been tested beginning October on dogs, cats, mink, foxes and other animals and was proven to be effective.
http://www.france24.com
Garth, as a property rights king of guy, I have to disagree with you.
The problem is not blind auctions….you haven’t been hearing stories like this on downtown condos this year have you?
The problem is money printing by the BoC and the govt. taking the mortgage risk.
Time to get back to a free market without government intervention.
Supply and demand will always prevail, and there seems to be demand for these types of houses. Anything the owner can do to sell for a higher price, more power to them.
Nothing worse for an economy and the mindset of the people than asking for the government to “fix” a problem it created.
CMHC was originally created to that war veterans could buy a home and raise a family since the banks would not lend to them.
Today no war veteran will ever own a home is raise a family because of CMHC. It has transformed into a criminal organization run by parasite realtors.
What a joke Canada has become.
I’m an engineer who is passionate about agriculture and finished a diploma in Food and Farming. But, unfortunately, there is a slim market out there in terms of affordability for young farmers like me. CALA program doesn’t even help here. I placed an offer today and out of 9 offers, mine was rejected as I had conditions any reasonable engineer/farmer will look for in a farm property.
Systematically, this real estate situation is putting young farmers or anyone who is legit and want to honour the system out of scope (options).
There is no transparency in the banking sector, who is calling for these changes. Change should start from there. I personally know through connections where one individual is closing 3 mortgage deals at the same time. Trick is that each bank knows only about one property that person is closing. (Sharing with you, not for public).
There is a whole lot of fraudulent activities that are happening through banks. So, again, change has to start there.
Of course, the more transparency we bring the better it is for every individual house/property buyer. But, you are talking about putting the agents out of business in the long run with the block chain technology ;)
@32 IHCTD9
Congrats to your eldest son on getting accepted into RMC, and best wishes as an aspiring RCAF officer. Most of my classmates and various colleagues have gone on to very successful careers in both the military and civil aviation afterwards. Some became not so successful however, by misfortune and/or bad choices…
Should he actually go down that path, hopefully you’ll tone down your views on DB pensions, a clear condition of his military enrollment contract. Again, I’m totally unabashed about collecting mine, having been paid much less than my civilian counterparts, plus seeing dozens of fellow aircrew that never got to collect theirs after paying the ultimate price in operations.
Curious as to what trade he’s considered for, although all officers eventually become senior leaders and managers later on. Still, true adventures likely await him and will help him develop valuable skills for the rest of his productive life!
Cheers
#93 Ponzius Pilatus on 03.31.21 at 6:08 pm
#70 Stone on 03.31.21 at 4:23 pm
Realtor cars. While looking, we saw many Teslas. We knew we had the right realtor when we realized we all mocked Tesla driving realtors.
#103 Camping Stage on 03.31.21 at 7:08 pm
-And a bunch of other bad things
—
Or, to look at it another way, some good things might happen.
#94 Penny Henny on 03.31.21 at 6:08 pm
#49 Faron on 03.31.21 at 3:00 pm
You do sound angry. Maybe you need a gobby?
—
Yes, to those entitled ones used to listening to platitudes or dodging around issues while eating eat mush soup with a side of grits and a Evian on the side, I suppose so.
#80 Binky Barnes
I’m so glad I got to see Trudeau moving to the sound of the beat. It was refreshing to revisit these skills, made me very proud to be a Canadian, I can’t wait to vote him in again, his cash shower will ensure a victorious term ahead!
Ya gotta give realtors credit – they do what they want and nobody does anything to stop them – more credit to them
I lived in the UK for a decade.
When I left in 2013 the English system for real estate maded ours look highly regulated. Verbal offers that can be accepted but aren’t binding on the sellers until literally contracts are exchanged, which can take weeks or even months. Meanwhile estate agents continue to show the property as ‘under offer’ and sellers can still entertain and accept higher offers right up to the minute of contract exchange. In rising markets sellers sometimes demanding more money on the closing [‘exchange date’] or the deal is off. It’s diabolical without certainty for anyone and often entire chains of buyers and sellers looking to move collapses on the last day if a seller refuses to exchange contracts or demands more money and the buyer refuses or another buyer swoops in on the last day.
And then there’s Scotland where all residential properties are listed as ‘offers over X amount’ [i.e. whatever number they pull out of thin air] and all offers are submitted by solicitors in sealed envelopes.
Total information vacuum for buyers.
lee bow
It’s too late. 500K+ units in the hands of flippers and amateur landlords, substantial HELOC debt, fraudulent lending practices, unstoppable upward pressure on rates both in Canada and US.
This train has sailed. Hold your crowns.
I’m starting to see the off-ramp. Sales stall. Prices stop rising. Prices drop. Prices drop some more. Flippers and amateur landlords look to get out but the exits are blocked. They drop their price. They drop their price some more. All without government intervention.
re: #31 Wrk.dover on 03.31.21 at 1:29 pm
If CMHC (us) wants to play such a big role, (using our $), they should require listed properties to be pre-inspected to ensure CMHC (us) isn’t going to be on the hook for 95% of a 50% overvalued problem.
in the US Federal Housing Assisted Loans require an inspection and everything has to be up to Code
Canadians must know better
How About This:
Implement a rule requiring RE agents to maintain a bid record in cases of blind bid/auctions etc . Required information would be name and contact info of bidders along with there starting and ending bids and conditions agent would be required to certify information is complete and correct, and the winning bidder would be required to be provided with a copy of the bid record as disclosure. This would stop a lot of the fraud and scams currently taking place.
As to the Big Banks Crying for intervention umm sort of like the drug dealer crying about the addicts they have created!. Why don’t the big six unilaterally create and jointly implement curbs and raise down payment and qualification requirements before they hand over the money ? we all know that the sox and crew are only looking at getting re elected, the guy running the bank of Canada is apparently clueless and incompetent so don’t look for help from the feds.
#99 Ken on 03.31.21 at 6:39 pm
You are an idiot if you get caught up in a blind auction bidding frenzy for real estate — an idiot!
———
In stupid we trust.
Camping Stage
We are at the Camping Stage.
We are all out “social distancing” with our neighbors like a bunch of campers who have tents and food in the trunk and a portable BBQ. Things seem fun even though the weather is lousy. But there is only so much food left in the trunk. Once all the food is gone the party is over and it is time to head home and fend for yourself.
What comes next?
-An eventual realization that things are not going back to normal
-Resource wars
-Government upheaval
-Economic decline
-And other bad things
that got my attention
#3 Prince Polo on 03.31.21 at 10:47 am
https://www.theglobeandmail.com/business/article-bmo-report-calls-on-policymakers-to-douse-the-fire-on-rapidly-rising/
With home prices spiking across the country and houses selling well over asking prices, BMO’s economic team said policy makers need to take action to immediately break “market psychology and the belief that prices will only rise further.”
Um, hello?
********************
The only plausible answer is that the Earth just passed through a truth inducing energy field and the bankers came to a hallelujah moment. Or a bursting bubble may affect their bottom lines in this COVID recessionary inflationary environment.
@#105 vancouver
“I asked the agent if this was even legal and he said “yes” . It was not ethical, but it seems that it is legal. ”
++++
Unfortunately in Canada’s legal system.
What’s “just” doesn’t necessarily equate to “justice”.
I loved Vancouver, until 1986 and that stupid Expo…..I detest this place now.
I call it “Cleveland by the Sea” – if I could I would move back to Mahne Bay and Pray never see this crappy, construction, overpriced dump, again.
Could you keep blind auctions (based on others suggesting if you don’t prices will increase more) but if you win your bid is lowered to $1 above the next highest bid?
Though you may get 2 really high bids and this doesn’t accomplish much.
But I agree things like inspections should be mandatory before someone purchases a home. I also agree the purchaser should pick who inspects it.
It’s a like a car being safetied before it is sold.
Addenda: Please excuse my typing errors – I have a lot of trouble writing – it should read: if I could I would move back to Mahone Bay and hope I never see this crappy, construction, overpriced, again.
Apologies.
I have enjoyed this blog since day one – but this will be my last post here…I have trouble typing.
Thank you to Mr. Turner – for the incredible writing.
You all have my best wishes.
Stay well….and guard your health – trust me – make every day count.
I didn’t.
Real estate price increase is just an attention diversion technique. Government will not do anything about it because it’s taking people’s attention away from the Debt & other bigger issues with Canada . Smart game !!
I find it fascinating and troubling that everyone thinks they are entitled to own property. Sure people should have a place to live but not necessarily own. I just wonder how many people would tolerate the government trying to deflate the value of their financial investments. I’ll hazard a guess that it would not be many!
“Offer night” in the listing alone gives people a sense that there will surely be multiple offers. I honestly wonder how many people have bid higher than asking against themselves. Only the realtors will ever know.
#122 45north
Yup – next five years are going to be historic
I have enjoyed this blog since day one – but this will be my last post here…I have trouble typing.
——————————————————–
Some of us are going to miss you … I never scrolled by your comments. Take care …
Our government and central bank are terrified of home prices going down.
Big banks just paying lip service and play both sides. They are after all….bankers.
We’re going back into lockdown. More restrictions coming to the US. Growth to lead again. Banks and cyclicals are wildly extended here. The re opening trade is over.
#118 45north
Y. The path to avoid stagnation and collapse is very narrow. And so many things can go wrong.
LOCKDOWN COMETH!!!
https://www.google.com/amp/s/globalnews.ca/news/7730826/covid-announcement-possible-new-restrictions-ontario/amp/
Our housing crisis is now on the front page of reddit
https://www.reddit.com/r/dataisbeautiful/comments/mhdudx/oc_where_have_house_prices_risen_the_most_since/
https://www.reddit.com/r/dataisbeautiful/comments/mhdudx/oc_where_have_house_prices_risen_the_most_since/ you’ll like this one Garth
Banksters “concerned”. Laughable.
They facilitate the cash for this madness out of thin air with no rewards for savers and they’re concerned.
Ghouls.
Let the market fix itself, what a bunch of cry babies. The best way to stop this is to just stop buying into it, literally.
Plus generate more commission. That is it in a nutshell, nothing more needs to be said.
127 Bill Grable on 03.31.21 at 9:37 pm
Addenda: Please excuse my typing errors – I have a lot of trouble writing – it should read: if I could I would move back to Mahone Bay and hope I never see this crappy, construction, overpriced, again.
Apologies.
I have enjoyed this blog since day one – but this will be my last post here…I have trouble typing.
Thank you to Mr. Turner – for the incredible writing.
You all have my best wishes.
Stay well….and guard your health – trust me – make every day count.
I didn’t
*************
Take care of yourself…been a pleasure getting your perspective over the years.
#94 Penny Henny on 03.31.21 at 6:08 pm
#49 Faron on 03.31.21 at 3:00 pm
Anyhow, tune in next time when BB weighs in about how “angry” I am and then offers to boink a woman he’s never laid eyes on. As I’ve said before, we are far, far better off without the likes of you.
//////////////
You do sound angry. Maybe you need a gobby?
******************************
So, was that a typo meant to be “hobby”, or were you genuinely offering? Hardly seems appropriate for a finance blog, but it would be a sure cure for anger.
:-)
And for the first time in 50 years, someone is going to have to tell the boomers the word “no”.
Their parents never taught it to them when they were growing up.
Thanks for shedding light on the ridiculous blind auction process. My Grandma’s place in west Toronto (Etobicoke) sold in a blind auction in 2018. The “winning” bidder payed $100k over the next highest offer (about 10% more than second highest offer). A couple in their early 30s. I felt sick for them. The couple then flipped the house 2 years later for an additional $200k, after moderate renovations.
This game need to end.
Faron, do you tell immigrants to Canada that they are cowards for leaving their countries of origin in search of a better life?
New real estate agent here. The general asset inflation we are seeing is not limited to housing. Yes house prices have appreciated alot but not anymore than other assets. That in my opinion is by government design to stimulate that part of the economy.
Same thing can be said for stock prices etc. Assets in general are appreciating due to QE and other government interventions.
As I’ve mentioned before this imo is most likely the inflating away of debt by g7 governments. Wages will most likley start inflating as well. 200k is 600k, new normal. Don’t shoot the messenger.
Blind auctions are a symptom of the current regulations and privacy laws.
I’m thinking if the government was serious about these bubble conditions they would have done something long ago.
I am no liberal fan, but if you are reading this Trudeau, if you actually made a bold move here to fix this issue that is negatively impacting so many of our younger generation, our collective futures, I would honestly vote for you in the next election. But I mean substantive changes with guts. No more of this nibbling around the edges garbage. So strap on a pair. Show us you are a man … oops … guy … person … cis gendered ..crap … you know what I mean
Faron
Did you buy the beat down DISCB, VIAC, these companies got hammered 50% by the fire sale of the hedge fund margin call.
Exro was another company that got hammered down.
All these companies had 50% plus retraction in stock price for no fundamental reason.
Housing will be the same, there will be a fall and no one will want the asset that lost 50% in value, there will be no bidding wars, people will despise housing for the loses they sustained on their investment. Then you buy, hold and prosper.
This is the way!
@#125 Bill Grable
“I loved Vancouver until Expo..”
====
Yep.
Vancouver almost had a small town feel to it back then.
Expo 86 invited the world …. and they stayed…
As for not posting due to spelling mistakes….
It never stopped Smoking Man.
It is good to see our open climate change government is so willing to help the world by storing the planets nuclear waste in Labrador.
Now they can use Canadas pipeline technology and ship the highly radioactive Fukushima waste water to our western port and pipe it back east for safe disposal. Easy money this is, since Japan will take at least 40 years minimum to come up with the technology to solve their ongoing disaster.
https://www.msn.com/en-ca/news/canada/former-prime-minister-jean-chr%C3%A9tien-part-of-secretive-project-to-store-nuclear-waste-in-labrador-emails-show/ar-BB1fc5eW?ocid=msedgntp
@#144 NSNG
“And for the first time in 50 years, someone is going to have to tell the boomers the word “no”.
Their parents never taught it to them when they were growing up.”
+++
Possibly because their parents didnt bother telling them “No”…….. they just spanked them for screwing up.
I’ll take that “lesson” over a parent telling their kid “good job” for every lazy attempt they make.
There’s an entire generation coming up that cant handle the truth…..
#136 SOMETHINGS UP!! on 03.31.21 at 11:45 pm
LOCKDOWN COMETH!!!
https://www.google.com/amp/s/globalnews.ca/news/7730826/covid-announcement-possible-new-restrictions-ontario/amp/
—————————–
Time to get back into the NASDAQ, for those who took profits early this year. I predict a repeat of last year’s tech meltup especially given new lockdown orders. This will likely be the final leg of the tech bull market, to top out around 18,000.
@#147 Pet Peev
“Blind auctions are a symptom of the current regulations and privacy laws.”
++++
Blind auctions are an obscene way to jack up the prices on a product that you receive an obscene commission to sell…..
Try another crowd.
We aint buying what you’re blind selling…
Listening to the shysters on CP24’s ‘HOT PROPERTY” just makes my skin crawl.
They somehow justify blind bidding wars, full asking offers that are rejected because there wasn’t a bidding war, no condition offers, and on and on.
I would welcome some rules to protect the FOMO people, that have never seen prices go down, or 5% interest rates.
These first timers have no idea of the risk they are exposing themselves to.
As pathetic as it may sound, Garth is my grounding on markets. I need a better life!
Thank you for what you do Garth.
#58 Ustabe on 03.31.21 at 3:36 pm
All of you all know, deep down, that this all started with Mulroney and him allowing the banks to expand into insurance, annuities, mutual fund sales, etc.
Because the trade off for that was to allow those formerly in those sectors to also provide mortgages.
Suddenly it was mortgage for you and you and you and you…just like on Oprah.
And now here we are. Disingenuous to (entirely) blame the current government. I mean who first offered 40 year amorts?
———————————–
Previous governments have a mixed bag with respect to housing. For example, the stupid 40/0 mortgages (which lasted all of two weeks) inflated housing, but Harper’s ending of the Immigrant Investor Programme in 2014 surely reduced housing demand.
The Trudeau Liberals are the only government since, …maybe ever, whose actions are entirely on one side (i.e. to inflate housing). The upcoming budget might change that but I think it’s more likely to include more taxpayer subsidies to home buyers.
#156 slick on 04.01.21 at 8:44 am
Listening to the shysters on CP24’s ‘HOT PROPERTY” just makes my skin crawl.
——————————————
Fraud, and it should be illegal. You ask $800 k for a house and then refuse to accept the $800k bid. These guys should be behind bars.
#13 Howard on 03.31.21 at 12:05 pm
All these suggestions being thrown around, when all that is necessary is three things:
1) Abolish the CMHC and force banks to take the risk
2) End QE bond rigging and allow mortgage to rise according to free market demand
3) Remove the tools and conditions that permit money-laundering to flourish (non-existent law enforcement, numbered companies, etc)
That’s it. That’s all we’d need.
________
Looking at these from a realistic point of view…
1. This would effectively kill the RE market all by itself. Like turn it right off. Almost no one would get a mortgage.
2. This would kill our government. Imagine Trudeau trying to run Canada without the ability to print free money lol! Plus we can barely get 10 good years in without some new SHTF event turning everything upside down – and seemingly more unpredictable (and expensive) every time.
3. 100%, regardless of RE prices.
No matter how I look at our RE market while trying to keep it real – no one is going to do anything to tame it. It will have to corkscrew up until buyers wave the flag in sheer disgust, or some huge unmanageable SHTF crises stomps everything flat.
Seriously though, if we’re still talking about this 5 years from now and *still* asking “who are these people paying [3-4 million?] for a GTA shack”, then I am going to capitulate and advise my kids that they might want to seriously consider any options that may come along to move to the USA if owning a home is important.
I have faith in the government of Canada – they will eventually do the right thing – after all other alternatives are exhausted.
I personally don’t see the issue here. The entire assumption is that we need to help the buyer get a fair deal. Why? What is a fair deal? What about the seller? No one is forced to buy property. If someone wants to put in an exorbitantly over-priced bid, its their choice.
The only problem I see is that the more bubbly the market gets the bigger the hit to us taxpayers when things fall apart. Because the incumbent government at the time will inevitably step in to protect all the imprudents, and their leveraged nest egg which they were relying on to fund their retirement. The problem is the leveraged bet the system is allowing the buyers to make. The offer is just a number, and upping it only means 5% of the increase to the buyers down payment (as an example). That’s the problem.
All this from someone who owns no property, and should therefore be biased against the seller.
The gov’t needs to stop allowing money to be taken out of RRSP for down payments on homes and stop giving any grants or any other perks for first time owners. If you can’t buy a house too bad. People will figure this out , they always do. I haven’t already said this,
Thug Ford is at it again.
Zero knowledge. Zero plan.
So, he’s shutting ‘er down again. All of Ontario.
As of midnight Friday.
Round and round and round we go. Useless.
Glad I’m taking off to Alberta for a month on Saturday.
Lake Louise, Banff, Canmore, Jasper. Then Red Deer.
Sing another prairie tune. This blog is homegrown (don’t come from Hong Kong!).
Guess Who.
#160 IHCTD9 on 04.01.21 at 9:19 am
Seriously though, if we’re still talking about this 5 years from now and *still* asking “who are these people paying [3-4 million?] for a GTA shack”, then I am going to capitulate and advise my kids that they might want to seriously consider any options that may come along to move to the USA if owning a home is important.
————————————-
5 years from now there will almost surely be a very very different government in power. It might still be the Liberals, hell it might still be Trudeau! But the priorities and orientation of the government will be different. Consider that every year that goes by, the electoral prowess of the Boomers diminishes and that of the Mills and Gen-Z builds.
None of this is to say that house prices will come down, BUT I believe the high house prices wil be accompanied by government programmes to massively build new purpose-built livable and affordable rentals, simiilar to what occurred in the 1970s. I also think a PR capital gains tax is inevitable by the end of the decade.
To put it another way, I think Canada’s homeownership rate around 70% has peaked. Right now we are experiencing “peak homeowner coddling” by governments. The coddling can only decline from here, albeit slowly.
TurnerNation, PUT ON YOUR HANDCUFFS AND BEND OVER!!
Doesn’t the bank home appraisal process have an effect on how much banks are willing to lend for the successful bidder? In other words, why would a bank lend for purchase of a inflated value house? (Unless the buyer is covering the shortfall in value with his own funds of course)
I’d say outlaw presentation centres with staged show homes.
I’ve been at a few, just out of curiosity.
The shiny marble countertops, the bright lights and the new appliances can make your old place look outdated.
@#161 baloney
“I have faith in the government of Canada –”
++++
You have to be more specific.
Are you putting your faith in the unaccountable “work from Home” bureaucrats?
Or the politicians that are using hundreds of Billions of our tax dollars to buy our votes?
Wrt (b) A spec tax – a special capital gains tax on the sale of residential real estate purchased from today forward, with the rate falling to zero over five years of holding the asset.
How will this make any significant impact to house price?
Wouldn’t raising rate and removing blind auctions have make more material differences?
#150 millmech on 04.01.21 at 8:25 am
Did you buy the beat down DISCB, VIAC, these companies got hammered 50% by the fire sale of the hedge fund margin call.
———-
DISCB was never available for consumption, DISCA, TME, VIAC all still down so easy enough to get now. They might be oversold, but on the other hand they just lost a lot of institutional support. Hard to assess their true value with this year’s wildly inflated metrics.
I will just post here again saying the following:
The government doesn’t care and won’t do anything of substance. They do not have the balls to do what needs to be done, for a whole host of excuses, some actually good for an elected representative.
Of course, in ten years from now if the market ever “blows up”, or the lack of savings ever effects us, everybody will point fingers. It’s what politicians do best.
The squeeky wheel gets the grease, and in this case, the realtors will get their way out water down everything else.
Until rates return to pre 2000 historical norms if 7-8% interest, home prices will stay high. Nobody has the balls to do anything differently. Period.
1 yr later and yet another lockdown
A great reminder that they have no clue .And govt control has heightened in Canada ,we basically are a shadow of what we thought we were
https://www.theglobeandmail.com/business/article-trans-mountain-pipeline-expansion-will-cost-canadians-billions-sfu/
I’ll bet Photo-op Minister’s (PM) rebuttal to SFU’s study is for them to politely STFU.
Who folks voted for him :)
How’s that working out ?:)
Privilege:
I rarely comment here, or even read this blog anymore, as the hypocrisy is stunning; so here is my last comment, my last blog peek:
Rich advice from old (older) wealthy folk who have bought and sold at a profit multiple times–to remove or reduce the capital gains exemption on primary residence. Akin to Warren Buffet, a rich 80 some year old, saying raise taxes on the rich; what’s a few million more in tax for one like that (the reality is any taxes target the middle class anyway). There are many other ways to make housing affordable. Start with removing red tape, permit costs, etc for builders. Target investors. But enough of trying to disguise self-righteous preaching as being good for us. If you were a 30 or 40 some year old who had just bought your first house would you be saying that? Unlikely. Unfortunately age, or being a former journalist, does not automatically translate into wisdom.
additional tax on housing is just a lazy and flawed solution. the last thing we need is more taxes.
It all starts and ends with the lenders – trying to have their cake and eat it too.
#176 JZ
I’d respond to you JZ… but you’re gone.
#169 fartz
hahahahahahahahahahahahahahahahahaha
Start with removing red tape, permit costs, etc for builders.
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Nah, not it this country.
#170 Alan Leung on 04.01.21 at 11:01 am
Wrt (b) A spec tax – a special capital gains tax on the sale of residential real estate purchased from today forward, with the rate falling to zero over five years of holding the asset.
How will this make any significant impact to house price?
Wouldn’t raising rate and removing blind auctions have make more material differences?
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Tons of houses sold in Canada are for “investments”. Buy, hold, sell higher in a year or two, or rent out and hold. The spec tax would (hopefully) severely hamper the profitability of such purchases cutting the speculators out of the market. Also cuts out the newer homeowners who might go on an impromptu fishing trip to exploit a spike in market prices – lots of that going on in my area right now.
Less buyers = lower prices. Not to mention less nutbars bidding a 400K house up past 500K despite every other bidder drawing the line at sub 450K.
This would hamper the specers as holding a house a long time makes it hard to make $, while real homebuyers expect to live there longer than 5 years so will be exempt from the tax.
It’s a great idea if it’s done right (ie. use a pile driver and make it hurt).
Gartho
“Home Prices Spike in US”
Interesting graph showing home prices compared to 2006 in the US.
They called it a tsunami from the big cities
Meanwhile…US strategizing with Austrlia wrt a response to a Taiwan war. The teams have been finalized or so it seems.
Nordstream 2 oil pipeline – warship spotted in the waters near by. US officials in the EU trying to stop a loss of market share to the EU. China is now taking away market share having concentrated on refining oil.
It looks a lot like a revived Cold War.
#178 Damifino on 04.01.21 at 12:06 pm
#176 JZ
I’d respond to you JZ… but you’re gone.
***********
good one. I started a reply to JZ and deleted it…it was too harsh. Logic is a lost art.
#176 JZ on 04.01.21 at 11:58 am
Re: Privilege
…enough of trying to disguise self-righteous preaching as being good for us. If you were a 30 or 40 some year old who had just bought your first house would you be saying that? Unlikely. Unfortunately age, or being a former journalist, does not automatically translate into wisdom.
———
Neither does petulance equal wisdom. You have to look out for you. On this blog, as in life, that always involves learning what is and isn’t valuable. Skepticism can be helpful; cynicism not so much.
I go into my local pharmacy. She asks if I am to pick up or get a Covid jab. So, I ask what is required to get a jab – 65+ and I can get it tomorrow. The Pfizer version.
Sign me up. I was going to wait because I think I will survive if not already. I want to visit my daughter and grandsons in Phoenix. I smell a vaccine passport coming so I want to be near the head of line and avoid the headache of quarantine protocols.
As to investing… I am still building cash. Option trading – much like spinning wheels with weasel. I dabbled with CFDs (CMC Capital Markets). I always felt the insiders to take me out in a heart beat.
They succeeded. The DOW took a 500 point dump one day. I tried to cover my margin call but the operation was run from Australia and I could not move money quickly enough. My positions were closed out. The next day things bounced back. It left a sour taste.
It is in the Liberals political interest to have most of it’s citizenry indebted to them. The Liberal do not want financially independent voters, because then they would lose their leverage over them. The easiest way to enslave the people is to encourage over spending on their biggest purchase. Wake up people, we are talking about politicians here.There will never ever be a radical fundamental economic meaningful change, because it would not suit the Liberals agendas.
https://twitter.com/jameseagle17/status/1377353707478601729?s=21
WOW!
#187 Bert on 04.01.21 at 2:37 pm
Very cool graphic. Horrifying, but really paints the picture. Houses == STONKS!