The melt-up melt down?

Planning on buying a home this month?

Don’t. You’ll probably pay too much.

Real estate analysts, economists, aficionados, experts and key players are now all expecting the same. Bubble, meet prick. The federal budget on Monday the 19th will either set up a blow to the housing market to be delivered by CMHC, or do the deed that afternoon. Either way, it’s coming. The result, says mortgage broker/blogger Rob McLister is clear: “They’re running scared because they’ve fallen behind the curve. They’ve got to do something to counter market psychology and the melt-up in home prices, and they will.”

More on what’s coming in a moment. First, here are the fresh stats, demonstrating without a doubt that Canadians are in the midst of a giant group pooch.

Vancouver’s on fire. So are Delta, Squamish, Whistler and points in between. “Activity reached unprecedented levels in March,” say local realtors, shocked. Regional sales are up 126%. Delta-South deals surged 195% and Whistler sales were up 196%. Detached houses in Van surpassed $1.7 million – and that is the muted Frankenumber, not even the average. It’s a hike of 18% from last year. And, incredibly, things are even worse in Kelowna and across the OK.

Sleepy Victoria? No better. The average detached house price is now more than $1.1 million and demand for real estate, says the local board, “is overwhelming.”

The sales increase was 93% in March with condo deals in a 112% moon shot. Listings have plunged by almost half as more and more owners figure they can no longer afford to sell, then buy. Average prices have risen 10%, but in a worrying explosion, values jumped 2.2% in March alone – an annualized 26%.

On the other side of the country, more astonishment. “Numbers continue to shatter records,” says Halifax agent Jeremiah Wallace. “Both weekly average and median sales are well above any recorded reports this week, and just look at the weekly average sold prices!!” Indeed. The typical SFH is going for $520,255 (cheap by national standards), compared to $357,000 one year ago. Yes, that is a 45% increase. The sale-to-list ratio in the HRM is now 108% while the DOM (days on market) has crashed by two-thirds.

And, wow, look at Calgary. Lots of virus, too much unemployment, commercial real estate market in the toilet, fighting the political green agenda – and now residential real estate leaping irrationally. Sales in March jumped 277%, say local realtors. New listings also coursed higher, but not enough to satisfy demand. As a result the average price has jumped in the last few days to more than $534,000 – up an incredible 32.6% from year-ago levels.

No stats out of the GTA yet – those will come in the next day or two. They will be epic. But look at the story in southwestern Ontario. In blue-collar Windsor sales swelled almost 40% over March, 2020 levels and are ahead year-to-date by a third. Meanwhile the average price has blossomed even more than in Halifax – from $355,000 to $531,000, or 49.4%.

Does this sound sustainable to you? It doesn’t to anyone in the biz, including major lenders like the banks. Over the last few weeks, as chronicled on this pathetic blog, economists for RBC, BeeMo, TD and Scotia have decried the FOMO sweeping Canada, warning the hammer will drop. Even the Bank of Canada and the Pollyannas at CMHC, as well as the house-humpers in hot zones like the GTA are now convinced Ottawa cannot fail to act.

The nation is still in recession and pandemic. The largest provinces are in lockdown. We just passed one million Covid cases. Unemployment is unacceptable, tourism and travel are dead for another season while tens of thousands of small businesses – restaurants, hair salons, gyms, retailers – will not survive. And now housing is being pushed beyond the reach of average families with average incomes.

The result? People are gambling. Stretching. Exposing themselves to any economic shock by borrowing excessively to ride a market they believe is racing past them. It’s classic end-of-bubble behaviour. “Never before have so many homebuyers been so leveraged,” observes broker McLister. Look at the number now taking loans exceeding 450% of their incomes. Truly scary.

Source: OSFI. TDSR – Total Debt Service Ratio.  LTI = Loan-to-Income ratio.

__________________________________________________________

So what happens?

Wait and see. It could be a drop in acceptable loan ratios, higher downpayments, a spec tax or restrictions impacting investors. But it will be something, and could hit the market broadsides.

Do you really want to have just ‘won’ an emotional, excessive bidding war and handed over your certified $100,000 deposit cheque to buy a property whose worth could be torpedoed by Chrystia the Impaler at 4:30 pm ET fifteen days hence? Will the appraised value drop? Will the lender balk at financing what you need? Will you be trapped? The greater fool?

These are days one looks back upon, asking, ‘How did I not see that coming?’

About the picture: “This is Maina,” says Martin of La Conception (near Mont Tremblant), “in a picture taken on this beautiful Easter weekend. She is 17 years old now. Thank you for your awesome knowledge-sharing blog!” (Do you have a canine to share? Email me: [email protected])

138 comments ↓

#1 Mr Happy on 04.04.21 at 11:48 am

Listed our condo for double what we paid a couple years ago. Accepting offers Tuesday. I hope my greater fools do NOT read this blog!!!

#2 crowdedelevatorfartz on 04.04.21 at 11:48 am

Well, I’m glad I have zero debt and lots of cash to “vultch” in the ensuing bloodbath……

Unless, of course Chrystia decides I’m “plutocrat” because I have a bit more available cash than most and raises taxes to punish the “rich”.

#3 Dharma Bum on 04.04.21 at 11:49 am

One of my kids is currently in the midst of this insanity.
Bought a house in Ottawa 2 and a half years ago.
Just sold it for $310,000.00 MORE THAN WHAT HE PAID.
Now, he’s stuck.
Lost 3 blind auctions in a row.
That $300K windfall is gonna need an additional $300K on top of it to come close to getting the house upgrade he’s after.
The upper end houses have skyrocketed up disproportionately to the mid-range properties.
Like our guest blogger said a few months ago:
TANSTAAFL!
I told him to just rent and invest the half-mil cash he now has.
But, y’know, kids today, I tell ya!
No respect.

#4 Millennial 1%er on 04.04.21 at 11:53 am

Do you really think the liberals are going to screw over their largest voting base right before an election?

It’s going to get much worse before it gets better.

#5 ogdoad on 04.04.21 at 11:54 am

Happy Easter, Garth and team! I have no idea what you have to ingest to keep writing every day but your posts are always informative and appreciated.

Speaking of ingesting…sure I got an egg eddy around..

Og

#6 Thanx again Garth ... on 04.04.21 at 12:09 pm

nobody else tells it like it is … happy Easter to all …

#7 Hilroy on 04.04.21 at 12:27 pm

Happy Easter. To left coast compatriots – Happy Wester.

#8 Stone on 04.04.21 at 12:30 pm

#106 Sail Away on 04.04.21 at 11:10 am
#96 Stone on 04.04.21 at 8:38 am

Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

———–

That portfolio has a ytd total return of 5.4%.

So to gain a better return than the B&D you went into… stocks? Anybody can play the cowboy game, but it’s hardly considered BD.

Sticking solely with the Turner advice of prefs returned 11.56% ytd.

———

Grind, grind, grind. It must really bother you. I also like how you only copy and paste bits and pieces of what people write here.

“Also, did I not tell you that my portfolio has similarities to the above however I decided to tweak mine making it riskier and was comfortable with my choices because it was within my risk tolerance.”

You do realize I’m doing this to see if any of you can figure it out. I give a hint here, a hint there, yet no one can seem to figure it out. Grind, grind, grind. Soon, no more teeth.

Oh funboy, you’re not as smart as you make yourself out to be.

You might enjoy this. Actually, I know you will. Particularly at 4:45 to 5:33. You seem to like quoting others so much. You even like quoting the bible. Apparently, the guy on the video has figured out why.

https://m.youtube.com/watch?v=exgRlBUqrdM

Enjoy.

#9 crowdedelevatorfartz on 04.04.21 at 12:37 pm

@#4 Millennial 1% er

“Do you really think the liberals are going to screw over their largest voting base right before an election?

It’s going to get much worse before it gets better.”

+++

Very true.

And they will use our tax dollars to Billion Dollar bribe us with our own money with endless promises of “free” this and “free” that.

Voters.
They dont get any smarter do they?

#10 Grandv!ew on 04.04.21 at 12:39 pm

If the Friday post about OAS and CPP is even somewhat correct, anything going forward is pretty much inconsequential. Is it incorrect or possibly too pessimistic to say that we are just rearranging deck chairs on the Titanic? Or has Canada figured out the way how to make Reale state = CPP. If this is the case and this charade continues does anyone know what is the end game. I am personally not holding my breath that government will do anything meaningful because the simplest truth is that they can’t. We have painted ourselves into the realestate corner and have no other industry to brings us out of this mess. There is going to be some dinky little measure to soothe the masses and make housing market pause until the fall. And than as per plan headlines of economy reopening and hordes of people waiting in line to buy the properties. You ask why? Well, because it is what everybody does and how else you are going to retire dummy.
As a father of two teenagers I am gravely concerned about the ability or willingness of this country(government) to provide meaningful opportunities for kids future. How long before the kids get the whiff of the information about imminent down spiral or collapse of pension system. Honest question is why should they even pay into it. Time has come to look and confirm if the grass is greener at our neighbors (USA) or even EU. After all new workers at McDonalds in Denmark are getting paid $22.00 USD with paid six weeks of vacation. Yes I know it is cold and dark most of the year but houses in the south of Italy are sold for
1 Euro and flight to there and back is half the cost of flight from Vancouver to Calgary. How could this be bad?

#11 Km on 04.04.21 at 12:40 pm

It has been years of thinking the government will do something meaningful however they never do as they are to afraid of being the ones to drop the hammer etc. Anyone who is buying now is nuts, that being said I am trying to convince my mother to sell as she can live in assisted living for a song where she is off what she can make on her house.

#12 earthboundmisfit on 04.04.21 at 12:45 pm

What happens? Lotta hurt and here’s to hoping that hurt hits the ethically challenged real estate cartel the hardest.
I fully expect the capital gains exemption will at least partially disappear in the not too distant future, but not before the LPC secures a majority mandate in a fall election.

#13 Leftover on 04.04.21 at 12:50 pm

“Wait and see. It could be a drop in acceptable loan ratios, higher downpayments, a spec tax or restrictions impacting investors. But it will be something, and could hit the market broadsides.”

…and a serious tapering of BoC purchases of mortgage bonds from the banks…in order to avoid a debt-induced coma for the whole country.

Dissolving equity? Sure. Guess whose? – Bank of Mom

#14 Avinash Patel on 04.04.21 at 12:54 pm

These “experts” are notoriously wrong. The main thing they like to ignore is that Canadians value there homes highly.

As well Canada pulls tons of immigrants creating a ton of demand at the entry level. The pandemic will end. These “experts” fear mongering will not.

If you listened to these guys the last ten years you would be screwed renting and watching inflation destroy your investments.

Canada is a great country.

#15 Dogman01 on 04.04.21 at 12:55 pm

“Of course, nobody listens to me. I’m like the guy who gives you the colonoscopy. You know when you hear the rubber gloves snap you should have eaten way more fibre. It’s the epiphany.” – Garth Turner

“Politics = economics = financial consequences. Follow the puck.” – Garth Turner

“Millennials would be fools to expect their lives to unfold as carbon copies of their parents’. No profligate hippiedom, no finding-myself-in-Europe, no sha-na-nah for them. This is Darwin, baby. And you’d best know that now.” – Garth Turner

“Almost without exception in life it is better to have money than to have stuff.” – Garth Turner

“Own the banks, don’t owe them!” – Garth Turner

“It’s not what you can carry that counts, but what carries you”. – Garth Turner

“You are supposed to read this drivel, throw it into the hopper of your brain, then come up with your own opinion. It’s called, um, thinking.”-Garth Turner

“When a bat in China ends up sickening your Granma in Kelowna, it’s time to reconsider a few things.” – Garth Turner

“So, let’s remember. There are those among us who, in serving themselves, serve no one.” – Garth Turner

“Concentrate on using you life to achieve some good for yourself, and others. Railing against the gods wastes your most precious gift, while changing nothing.” — Garth Turner

#16 Damifino on 04.04.21 at 1:03 pm

Wait and see. It could be a drop in acceptable loan ratios, higher downpayments, a spec tax or restrictions impacting investors. But it will be something, and could hit the market broadsides
———————-

It could also be nothing of substance. Some hat maybe, but no cattle.

#17 FerrisWheel on 04.04.21 at 1:05 pm

#4 has it right. Trudeau has an election coming up and won’t chance it

#18 Brian Ripley on 04.04.21 at 1:11 pm

My Vancouver housing “what me worry charts” are up with the March data: http://www.chpc.biz/vancouver-housing.html

In March 2021, Vancouver housing prices in all sectors pressed higher with detached house and townhouse prices hitting new peak prices.

Listing levels remain at the near term lows down 5% Y/Y adding fuel to FOMO 2.0 stoking sales which are up 126% Y/Y and are at a 15 year record high, at least.

​Apparently credulous buyers cannot say no to shorting cash in exchange for a fundamentally wasting and negative yielding asset.

​Rents continue to drop; 1 and 2 bedroom rents dropped Y/Y 13.6% and 12%, respectively according to the March 2021 Padmapper Rent Report

#19 Quintilian on 04.04.21 at 1:12 pm

Chrystia Freeland is a superior intellect.

She knows the long-term damaging effect of the housing mania. But she is also acutely aware of the political fallout if she did anything that would devalue the real estate lotto ticket that working stiffs are holding on to.

If anything, she will make some minor cosmetic alterations around the edges, and let the bubble get a bit bigger so that it will gradually float down until it collapses on its own weight.

Why would she do anything with political expense, when time will take care of the inevitable bursting of the bubble?

#20 mmehan on 04.04.21 at 1:14 pm

My co-worker is looking at buying a townhome in Abbotsford. She told me that the agent is having two open houses for two consecutive weekends starting next week and then they will accept bids the week after. Neighboring homes sold for ~600k she said. She doesn’t know what to “bid” but she doesn’t want to “lose”.

#21 Bob on 04.04.21 at 1:15 pm

Garth, you’ve promised real estate Armageddon too often. I’ll believe it when I see it. Isn’t this pandemic just the sort of economic “shock” you’ve warned about in the past? And yet, no one loses their house or goes bankrupt. The government just bails them all out with CERB cheques and loan deferrals. Why would it be any different this time?

#22 FNAiks on 04.04.21 at 1:22 pm

Happy Easter everyone!!

All bubbles pop with or without government intervention. Best guess? Boomers with no pension, who expect their house to finance their retirement, will be the first to panic. Supply will swamp demand and the market will unwind. Likely over many years IMHO. Should never have been allowed to get this far out of hand. Apparently the IMF is also now calling out Canada over our housing market. Praying we can achieve some sort of soft landing. GLTA.

#23 NEVER GIVE UP on 04.04.21 at 1:39 pm

If the supply of housing was not artificially controlled by numerous factors outside of low interest rates, we would all be housed.
We have draconian Zoning restrictions holding us all hostage to the few properties that are already Zoned.
In BC we have the Agricultural Land Reserve that spoon feeds out land for development at a rate that keeps property prices high for all while we have Incredible amounts of land in the interior that, with irrigation could easily rival the interior of California for Agricultural Value.
The ALR should be renamed “The Land Pricing Control Reserve”.
Why do we allow NIMBYS to control how we live. There are so many bylaws on the books that virtually no homeowner is in compliance. If a neighbor complains then the bylaws are enforced!

If no one complains then we simply live in fear of an inspector coming to make us comply. Do you have an extra vehicle parked in the driveway? Does you RV extend one foot past the front of your home?… Fine from Bylaw enforcement.

Builders are waiting for 3 years for approvals from the dictators of your little city Fiefdoms.
When you call for information you get a robot that says we have unusually high call volume. Why don’t they just stop lying and say it is unusually low staffing.

Nothing can be too perfect for our idyllic way of selfish living.

We use these tools to control our neighbors whom we want to live in the manner we are comfortable with. Not the way they can afford or wish to live.

Canadian Building Codes will not allow a bare bones apartment shell to be lived in like many countries in the world will.
Since when are young people in need of marble countertops and Stainless appliances when cheaper alternatives will do while they get started in life.
The same goes for dwelling size. If someone is willing to live in 150sq. ft. why cant they? In Japan millions of people are happy and content to do so.

Let the market decide dwelling size. Not the NIMBYS who say “I don’t want to live with the PO People.”

Instead the NIMBYS say build high standard housing for the homeless but NOT IN MY BACK YARD!

#24 SoggyShorts on 04.04.21 at 1:39 pm

#96 Stone on 04.04.21 at 8:38 am
#87 SoggyShorts on 04.03.21 at 10:54 pm
#71 Stone on 04.03.21 at 6:38 pm
#52 SoggyShorts on 04.03.21 at 4:45 pm
#122 Stone on 04.02.21 at 8:06 pm
Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

Whatever did you do with that? Nothing? Be honest. Not with me but with yourself.
*************************
A 5.4% return YTD vs my 4.32% when yours is full of stuff that all moves in the same direction?

No thanks. The whole reason I went away from all equity was to reduce volatility and give me something to sell high when equity goes on sale.

Your entire suggested PF above crashed together in 2020 and has had a weaker recovery than most.

Besides, even if I had taken your advice I would pay more than that 1% difference in taxes by an entire PF worth of capital gains.

I guess one good thing did come from this: I feel even better about my PF than before.

#25 Old Ron on 04.04.21 at 1:42 pm

1 % Millennial. I agree. Our economy runs on Real Estate. This budget will be an election budget.

#26 Freedom First on 04.04.21 at 1:47 pm

People are not only much smarter than me, they are much richer!

I am okay with that.

Freedom First

#27 Dude Looks Like a Lady on 04.04.21 at 1:50 pm

Hi Garth,
Is there a recommended max % of assets or net worth that should be allocated to holding a non-publicly traded employer company stock. After purchasing any shares, only 15% of the total stock value can be sold/year?

Thanks.

#28 AlbertaGuy Ejecting From AZ on 04.04.21 at 1:51 pm

Time to pull the rip-cord on the AZ seasonal home. Packers and movers in this week. On the market the week after. Realtor says expect 10-20 offers. No conditions. No inspections. Stay tuned.

#29 Dan in Nanaimo on 04.04.21 at 1:51 pm

Now that society is beginning to reap the combined consequences of infinite CB Ctrl-P and low interest rates… here is a tip:

Mr. Turner has shared a lot of free valuable advice over the years on his blog, and now that the “GreaterFool” mentality has metastasized, reflect on his advice to understand tactical implementation of best use portfolio diversification and tax deferral strategies for the growth and preservation of wealth.

Going forward, I believe a lot of people are going to need all the help they can get.

#30 crowdedelevatorfartz on 04.04.21 at 1:56 pm

@#25 Old Ron
“This budget will be an election budget.”

++++

Ultimately .
ALL budgets are election budgets….

#31 ever after on 04.04.21 at 1:56 pm

human greed and idiocy … encapsulated

buying in a frenzy at market peak and in 2 years when its a much better deal … very few buyers

groan

#32 TurnerNation on 04.04.21 at 1:59 pm

I was asked what am I doing to keep busy during ‘Quarantine’. My reply, A quarrantine is 2 weeks.
After 13 MONTHS, this is a RESET. Much agreement.
Buckle up we got 9 more years till ‘Agenda 2030’. I hate giving airtimes to that but it’s happening.

– Bankers running this show of course:
“Trudeau calls for global response as UN warns of looming debt crisis” (ca.news.yahoo.com)

-Oh boy. What have our elites got planed for us. Into 2030.
“The Spars Pandemic 2025-2028. ”
https://www.centerforhealthsecurity.org/our-work/pubs_archive/pubs-pdfs/2017/spars-pandemic-scenario.pdf

– Official document. Sounds like the Economic Lockdowns/#stayhome would do this yes. Welcome to 2021
https://sustainabledevelopment.un.org/content/documents/Agenda21.pdf

Agenda 21 – Chapter 4
CHANGING CONSUMPTION PATTERNS
4.1. This chapter contains the following programme areas:
a. Focusing on unsustainable patterns of production and consumption;
b. Developing national policies and strategies to encourage changes in unsustainable
consumption patterns.
4.2. Since the issue of changing consumption patterns.

——–
So what was this all about

— The Comfort and Mercy ships came and left. Made for good TV though.

.Birmingham’s Nightingale Hospital closes without treating a single patient (birminghammail.co.uk)

.May 2020:
U.S. Field Hospitals Stand Down, Most Without Treating Any COVID-19 Patients
May 7, 2020 1:15 PM ET
https://www.npr.org/2020/05/07/851712311/u-s-field-hospitals-stand-down-most-without-treating-any-covid-19-patients

#33 Blacksheep on 04.04.21 at 1:59 pm

So…T2’s gang is going to make RE to correct, with him seeking a majority in the next election, only months away?

Sorry Garth, but this the same flawed thinking I’ve been reading here for years. What ever highly publicized ‘action’ that is taken, will have little, to no effect on the average Canadian RE owner or their current homes values.

I personally have accepted demographic housing models have simply shifted, now that everybody has had a year to think about where they really want to raise a family.

This ‘new’ demand for the burbs is not going away, if anything is just going to accelerate, going forward.

Don’t forget, the above is with out even discussing our very real life loss of purchasing power with the Canadian $.

10 $ 2×4, 100K 1/2 ton pickups and 4K puppies?

Ya…we have 2% inflation…please.

#34 TurnerNation on 04.04.21 at 2:08 pm

#17 D C on 04.02.21 at 2:51 pm.

I shook my head alright. Who will be preparing meals? The workers who WANT To work and who have been laid off. They are marching in the streets all over.
How selfish of you to deny them an income.
Let me guess you work from home and order Amazon delivery?

Again show us your studies that restaurant workers got sick and we had to shut down the economy and deny them a living? Come on we have a year of data now.

#35 Prince Polo on 04.04.21 at 2:36 pm

Photo-op Minister to his handlers: Are you saying the plebes can’t all be the proud new owners of shiny $1M+ mortgages?? Preposterous! How else am I to distract them from my poor decisions?? Chrystia!! Save meeeeeeeeeeeeee!!!

#36 Sail Away on 04.04.21 at 2:37 pm

#8 Stone on 04.04.21 at 12:30 pm
#106 Sail Away on 04.04.21 at 11:10 am
#96 Stone on 04.04.21 at 8:38 am

Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

———–

That portfolio has a ytd total return of 5.4%.

———–

Grind, grind, grind. It must really bother you. I also like how you only copy and paste bits and pieces of what people write here.

———–

??

You are being asked for proof to back up your claims.

You have definitively failed to provide proof.

If you are not lying, then just prove what you’re saying. It’s not as if you have some secret gold mine nobody’s ever discovered except you.

#37 Dolce Vita on 04.04.21 at 2:51 pm

– I hate RE.
– Tulipmania Cdn style.
– Must be official something is up Garth, BoC Tiff Easter Miracle: officially worried about RE. Again, Garth’s LEAST favorite business site; thus, a warning to you all that go there:

“Lasciate ogne speranza, voi ch’intrate”

https://twitter.com/BNNBloomberg/status/1378764060645281792
———————————-

Twitter Cdn Highlights today (a.k.a., you’ve lost your mind Canada but I love it):

– Trudeau “we have to once again celebrate Easter differently” I don’t think that’s what he meant to say and he looked kind of…well, judge for yourselves:
https://twitter.com/JustinTrudeau/status/1378695691069980674

– Dr. Tam basically “We’ll all be killed 1/2 way thru the long weekend” then remembers its Easter and while on topic, gives advice on how to have a safe Easter Egg Hunt:
https://twitter.com/CPHO_Canada/status/1378739330169049088
https://twitter.com/CPHO_Canada/status/1378709205385904135
https://twitter.com/CPHO_Canada/status/1378769466331369478

-Health Canada Happy Easter just in case Dr. Tam forgets, StatCan retweets since the NERDS over there don’t know how to do it themselves or forgot to thanks to Seasonal Adjusting:
https://twitter.com/GovCanHealth/status/1378694206739341319

-StatCan on Easter worries your kids don’t have enough devices at home to learn with (not even a single bunny in their graphics):
https://twitter.com/StatCan_eng/status/1378739342147993601

-Patty Hajdu tasteful Easter greetings (a.k.a., I hate being Health Minister, can’t they just have a Home Interiors Ministry that I can feel “at home” at? I mean, I would ROCK that):
https://twitter.com/PattyHajdu/status/1378708661497778181

-CBC British Columbia worries about recycling jam jars, Happy Easter to you to La La Land – former home of the Valhalla Norse Gods:
https://twitter.com/cbcnewsbc/status/1378747446029922313

-Premier Kenney celebrating mass with the Pope (OK, I made that up)…meanwhile Mayor Nenshi sends the Calgary cops to shut down Artur Pawlowski – Street Church on Easter, Artur outraged as all BIGOTS should be:

https://twitter.com/ArturPawlowski1/status/1378732264985554944

Nevertheless, Mayor Nenshi wishes all a “restful and joyous” Easter (well, not everyone, still well done Mayor):

https://twitter.com/nenshi/status/1378729009698107395

———————

…and

CUTEST EASTER TWEET HANDS DOWN from The Canadian Army – thank you for all you have done during Covid and continue to do:

https://twitter.com/CanadianArmy/status/1378724042132258818

Buona Pasqua a tutti and to you Garth da Zona Rossa Italia.

Translation unnecessary, image says it all:

https://www.adnkronos.com/pasqua-2021-zona-rossa-spostamenti-e-visite-cosa-si-puo-fare_3z9bXj45TBgDXOiw2ZbMvJ

#38 Leo Trollstoy on 04.04.21 at 2:56 pm

#4 Millennial 1%er on 04.04.21 at 11:53 am

This is correct

#39 rknusa on 04.04.21 at 3:13 pm

if all they are prepared to do is tinker to engineer their so-called “soft landing” (which is what I suspect) I say do nothing

let this go on until it implodes

would be the best thing for the country, bring people back to earth and have them invest in more productive areas that really add national wealth

#40 Pete on 04.04.21 at 3:15 pm

Wow. I can’t believe readers of this blog have such a selectively flawed memory. Garth predicted a correction, and we got a good one in 2017. He also predicted a dead cat bounce the years after. We were on a final bounce when covid hit. Probably a substantial drop would have occurred if QE wasn’t pushed out by all governments. We are not in a normal world. RE is especially not going to stay in this artificial strata bubble that interest rates have created. Happy Easter.

#41 Dolce Vita on 04.04.21 at 3:19 pm

#32 TurnerNation

“A quarrantine* is 2 weeks”

No it’s not.

“The word quarantine comes from the Italian quaranta giorni, meaning “40 days”, used in the Venetian language in the 14th and 15th centuries…and still is.

*quarantine

—–

And you probably think “decimates, decimated” means everything gets killed off.

No it doesn’t.

Latin decimat- ‘taken as a tenth’, from the verb decimare, from decimus ‘tenth’.

Roman military discipline in which every tenth man in a group was executed by members of his cohort.

In case you want to misuse that word too in the future.

——————

…mangia cakes

#42 Howard on 04.04.21 at 3:23 pm

Real estate analysts, economists, aficionados, experts and key players are now all expecting the same. Bubble, meet prick. The federal budget on Monday the 19th will either set up a blow to the housing market to be delivered by CMHC, or do the deed that afternoon. Either way, it’s coming.

——————————–

Sure. Whatevs.

My money is on more grants to “help” people buy into the market.

Nothing more.

#43 rknusa on 04.04.21 at 3:24 pm

#19 Quintilian on 04.04.21 at 1:12 pm

seems the most plausible given election coming can’t prick the bubble

maybe a foreign owners tax and some small allowance to make it easier for first time buyers

then they let the market take its course and they will be off the hook if there is a housing implosion

the Liberals will not prick the bubble

#44 cuke and tomato picker on 04.04.21 at 3:32 pm

I liked the comment yesterday about les bickering. Just
be thankful to be living in Canada. We are happy to have moved here from the south Okanagan to Central Saanich
for full retirement our home has probably double in price which is an added bonus. Enjoy your Easter weekend. We
like the blog as well as the comments very informative and at no cost.

#45 FreeBird on 04.04.21 at 3:33 pm

Not slowing market here. We’re selling then renting. Thanks to friends. Before listing told we better have a place to go. Last summer contractor said most clients were from ‘city’ (T.O. etc) upgrading cottages to live year round. A neighbor who’s selling is riding out to fall in their’s. Others we know escaped/ing to US for a while. Some we know asked to see house pre-listing. Seriously.

#46 Paul on 04.04.21 at 3:35 pm

Close the Hair salons close the Restaurants, at least the waitresses and Barbers can get together and go to Home Depot?

#47 Flop... on 04.04.21 at 3:36 pm

So I went a day early with my comment yesterday showing in Australia how even though the bidding process is totally different, things can still be manipulated and when the rush is in things get out of control.

When you see it and think it will cost you more in the future you want it, anywhere.

Maybe my body clock is still eighteen hours ahead?

Here’s what’s been going through my head the last day or so.

Most real estate transactions don’t raise any interest, even in hot markets the majority just get shoulder shrugs.

If you agree to pay 500k asking for a Langley townhouse and in the next day or so it becomes big news, shouldn’t that indicate that you might have made a mistake?

My wife got home that night and one of the first things she said was “did you see that place in Langley?”

It came up in her newsfeed and her friend had even brought it up in a phone call earlier that day.

If I was the buyer, and my sale had been flagged by the real estate friendly media, in a red hot under 2 million dollar market, I would reach for some aspirin and start making some phone calls.

Somebody answer the phone…

M46BC

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

Calls to examine bidding process and ‘multiple offers’ in B.C. real estate deals.

Low interest rates have fuelled a hot housing market. Now, there is scrutiny on the bidding process and how it might be changed to temper crazy price gains

“More transparency around the multiple offer process is needed, and I think many in the industry would agree,” said Vancouver real estate agent Steve Saretsky.

There are some absurd examples.

Rabidoux recently tweeted about a Vancouver realtor friend whose client only got two bids. One was at the asking price and the other a whopping $175,000 over the asking.

“I don’t understand why we can’t have a (system) here in Canada so, for example, my maximum bid on this property is $900,000, but the increments are $5,000 above the next bid. So if the next bid comes in at $850,000, then the winning bid is $855,000.”

Instead of gradual price increases, one Fraser Valley appraiser previously described the market looking “like a staircase” with larger jumps.
Rabidoux emphasized changes like this wouldn’t be “a silver bullet by any means.”

In Australia, properties are sold in a very open, auction style, and still that “market is very hot as well.”

https://vancouversun.com/business/calls-to-examine-bidding-process-and-multiple-offers-in-b-c-real-estate-deals

#48 tkid on 04.04.21 at 3:37 pm

I think they just might prick the real estate bubble. I think Trudeau is tired of politics and wants out. CtI is the wild card; if the real estate bubble pops, it could harm their chances of re-election. Or will it?

#49 JSS on 04.04.21 at 3:40 pm

have Edmonton house prices gone up too?
Or is it only Calgary?

#50 Dolce Vita on 04.04.21 at 3:41 pm

Vaxing better in Canada.

196,624 dose avg. past 2 days. 32M, 15 yr or older ALL vax’d by:

Jan 21, 2022

54,600 doses delivered yesterday, 7.5M total (7M from the European Union, still NO 1.5M AstraZeneca doses from AMERICAN the BEAUTIFUL*) and this many on hand, unused:

1.21M

Why Cdns getting irritated with Prov Govs, excl. Territories, the latter are the vax’ng Whiz Kids of Canada (34-57% vax’d, La Belle Province next highest at 18%).

Oh ya, and no thanks to VAX HOGS USA or UK (SailAway spot the Exporters, where Exports reported as 0 by Statista):

https://www.statista.com/chart/24555/vaccine-doses-produced-and-exported/

————————–

*Cheques in the mail apparently (has been since Mar 18):

https://globalnews.ca/news/7733789/astrazeneca-vaccine-doses-canada-us-approved/

…meanwhile the European Union will deliver another 11M doses to Canada to the end of May, according to this MISINFORMATION website (Vaccines for COVID-19: Shipments and deliveries – Pfizer vaccine forecasted allocation and Moderna vaccine forecasted allocation tables):

https://www.canada.ca/en/public-health/services/diseases/2019-novel-coronavirus-infection/prevention-risks/covid-19-vaccine-treatment/vaccine-rollout.html

#51 Howard on 04.04.21 at 3:42 pm

#4 Millennial 1%er on 04.04.21 at 11:53 am
Do you really think the liberals are going to screw over their largest voting base right before an election?

It’s going to get much worse before it gets better.

————————————-

It depends. They are undoubtedly trying to predict whether 18-35 year-olds will come out in force in the next election. If they think young people will snooze through another election or, yet again, fail to vote in their generation’s interests, then they have no incentive to cater to their needs. Which means more house pumping for the Boomers who reliably show up to vote.

#52 household built on 04.04.21 at 3:46 pm

As the world reflates,,, why oh why must Canada slow this thing down..?? All over the world RE is where money is going and so why should our leaders try to put things in the way… https://www.bloomberg.com/news/articles/2021-04-02/manhattan-homebuyers-are-back-but-they-re-here-for-the-deals?utm_content=business&utm_medium=social&utm_source=facebook&utm_campaign=socialflow-organic&cmpid=socialflow-facebook-business&fbclid=IwAR09cQ_pSLAKBV3f8c1ifiOY7KlJ-aPCJdXsXXN-pQ0RGFuMAG2ItjxBit8

#53 Dolce Vita on 04.04.21 at 3:58 pm

Variants in Canada.

Judge for yourselves.

https://twitter.com/bsant54/status/1378576130932899842

#54 Bob the Cat on 04.04.21 at 4:00 pm

Let’s stop dreaming about what’s not gonna happen. The factors like immigration, “loans to everybody”, the necessity to live somewhere and the “renting pays someone’s elses mortgage”, the upcoming elections as well, will not make any changes to calm the market. Maybe allowing the first time buyers to buy with more RRSP money or paying less land transfer taxes etc but not calming the prices.
We have seen this long enough that the housing market in Canada is too big to let it fail, just too much of our GDP depends on it (25%). Whoever bought 1 year ago, with an investment of 20% down, will see their money at least double. And good for them for having the balls to do it.

#55 gfd on 04.04.21 at 4:28 pm

BURN! Yippee!

#56 Alberta Ed on 04.04.21 at 4:29 pm

I wouldn’t expect anything except virtue-posturing platitudes from Prime Minister “What Me Worry” Trudeau and Chrystia “Free Spender” Freeland.

#57 the Jaguar on 04.04.21 at 4:35 pm

++About the picture: “This is Maina,” says Martin of La Conception (near Mont Tremblant), “in a picture taken on this beautiful Easter weekend. She is 17 years old now. Thank you for your awesome knowledge-sharing blog!”++

My heart soars when I see a reference like the one above. What a lucky dog Maina is to have a family that cared for her and is undoubtedly responsible for her advanced age. 17 for a Golden is a real triumph. She would never have got there without Martin and his family.
I hope all the people out there that welcomed pets into their lives during the Pandemic will see this in the same light. As the commitment they made when they brought an animal into their home.
We talk a lot about material things on this blog. Real estate, stocks, bonds and the like. But if ever there was a great undertaking by humans during a time of uncertainty and need it must be this one.

Please don’t abandon these animals when the Pandemic ends. This is one enterprise that is ‘too big to fail’. It’s on everyone.

#58 Stone on 04.04.21 at 4:49 pm

#24 SoggyShorts on 04.04.21 at 1:39 pm
#96 Stone on 04.04.21 at 8:38 am
#87 SoggyShorts on 04.03.21 at 10:54 pm
#71 Stone on 04.03.21 at 6:38 pm
#52 SoggyShorts on 04.03.21 at 4:45 pm
#122 Stone on 04.02.21 at 8:06 pm
Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

Whatever did you do with that? Nothing? Be honest. Not with me but with yourself.
*************************
A 5.4% return YTD vs my 4.32% when yours is full of stuff that all moves in the same direction?

No thanks. The whole reason I went away from all equity was to reduce volatility and give me something to sell high when equity goes on sale.

Your entire suggested PF above crashed together in 2020 and has had a weaker recovery than most.

Besides, even if I had taken your advice I would pay more than that 1% difference in taxes by an entire PF worth of capital gains.

I guess one good thing did come from this: I feel even better about my PF than before.

———

I’m unclear why you say the portfolio is full of stuff that all moves in the same direction. If you mean it all is up for the year except for VSB, then I don’t see the issue. You’ve got just under 90% of your portfolio mix in an S&P500 ETF and XIU. Is this a pot calling kettle black moment? Am I the pot or the kettle? Or am I both? Apparently, you’re having a victim moment so of course everything is my fault.

Did I give you the above portfolio recommendation in 2020? Have I not repeatedly said I dumped all my ZPR at the beginning of Jan 2020 to load up VAB and then dumped almost all my VAB at the end of March 2020 to then load up ZPR and some VSB and dumped the last shreds of VAB to buy ZPR in early Jan 2021 (wow, what a run-on sentence).

Buddy, things change over time. You need to adapt to extreme circumstances. If you didn’t notice, we had a massive shock to the stock market in 2020. You don’t sit idly by and do nothing. It’s called rebalancing. Not doing that would have been a dufus move.

Lastly, capital gains tax hit? I enjoyed a bit of tax loss harvesting in 2020. Also, if you spread your positions properly between an RRSP/RRIF/TFSA, you can pretty much avoid unnecessary capital gains. I gave you a portfolio allocation that is balanced and diversified. That’s what you got. You had asked. Proactively. I shared something that I thought was reasonable. You just cut over 4% ytd. What I recommended cuts nicely above it. Extra profit is extra profit. But I see now that you don’t even want to modify your portfolio regardless because…you don’t want to take a tax hit. Remember when I said you had short term thinking. Looks I was right in more ways than one. Classic case of loss aversion.

Don’t constantly ask for advice every few weeks when you obviously have no intention of applying any of it.

#59 Pete on 04.04.21 at 4:52 pm

Whatever the govt does to control house prices will be too little, too late.

#60 Stone on 04.04.21 at 4:58 pm

#36 Sail Away on 04.04.21 at 2:37 pm
#8 Stone on 04.04.21 at 12:30 pm
#106 Sail Away on 04.04.21 at 11:10 am
#96 Stone on 04.04.21 at 8:38 am

Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

———–

That portfolio has a ytd total return of 5.4%.

———–

Grind, grind, grind. It must really bother you. I also like how you only copy and paste bits and pieces of what people write here.

———–

??

You are being asked for proof to back up your claims.

You have definitively failed to provide proof.

If you are not lying, then just prove what you’re saying. It’s not as if you have some secret gold mine nobody’s ever discovered except you.

———

Apparently I do.

Grind, grind, grind those teeth.

Looking forward to when you next quote the bible, Buffett, his sidekick Munger, Musk, etc., etc., etc.

Every time you do, I will smile. Broadly.

What do you think? Do you think?

Lol

#61 VGRO and chill on 04.04.21 at 5:00 pm

#96 Stone on 04.04.21 at 8:38 am
#87 SoggyShorts on 04.03.21 at 10:54 pm
#71 Stone on 04.03.21 at 6:38 pm
#52 SoggyShorts on 04.03.21 at 4:45 pm
#122 Stone on 04.02.21 at 8:06 pm
Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

Whatever did you do with that? Nothing? Be honest. Not with me but with yourself.
*************************

The reason that portfolio has done well in 2021 is because preferreds have been on a tear this year, and bonds have done poorly. If you have 40% in bonds, your returns in 2021 have been meagre. The other stuff in there, most with a B&D ETF portfolio have, in greater or lesser amounts.

Garth’s opinion is preferreds make up the safe stuff, but that is not consensus opinion in the world of finance. Some would consider that as an alternative asset class. So is this really a 60/40 portfolio? Some may consider it closer to 80/20, which we would expect would have greater returns than a 60/40.

I checked this, and my 60/40 portfolio (from Canadian Couch Potato in 2014) at backtestportfolio.com on the max time frame available (2014 to present, due to VCN inception in Sep 2013). Mine returned 7.43% annualized, This one above returned 6.40%.

Here is my 60/40 portfolio:
VCN: 20%
VUN: 15%
ZRE: 10%
XEF: 10%
XEC: 5%
VAB: 30%
XRB: 10%

(And yes, I am aware ZRE could be considered an alternative asset class, too…)

It’s also worth noting that ZPR still isn’t back at where it was in 2018, despite 2021’s tear.

#62 Bezengy on 04.04.21 at 5:05 pm

Chrystia “the Impaler” will step up to the microphone and declare she will solve the housing affordability problem (which the Trudeau gang helped create) by implementing a broad range of new taxes. It’s a no brainer. More tax revenue, and she gets to claim it’s for our own good. Win Win!

#63 Nonplused on 04.04.21 at 5:46 pm

I find the Calgary numbers hard to believe but I guess numbers don’t lie. Maybe people are streaming in from Vancouver? Hope they WFH because there are not many jobs unless you are a doctor or an Uber driver.

#64 KaleyCat on 04.04.21 at 5:53 pm

Making blind auctions and bully bids illegal will help cool the market extremes, and also garner support from the voting plebs. It would be hard for any party to oppose that position. The question becomes, will the real estate cartel stand for it?

#65 Sail Away on 04.04.21 at 5:54 pm

#36 Sail Away on 04.04.21 at 2:37 pm
#60 Stone on 04.04.21 at 4:58 pm

———-

??

You are being asked for proof to back up your claims.

You have definitively failed to provide proof.

———–

Grind, grind, grind those teeth.

Looking forward to when you next quote the bible, Buffett, his sidekick Munger, Musk, etc., etc., etc.

Every time you do, I will smile. Broadly.

————

Sigh. The Black Knight strikes again:

https://youtu.be/ZmInkxbvlCs

We’ll stick with the 5.4% YTD for you, shall we? Oh… I’m 10.6%. Verifiably. That’s almost double. Doble in Spanish.

#66 Flop... on 04.04.21 at 5:55 pm

What is the most romantic city in North America?

Ask a different person, get a different answer.

I’ve been around, and in my mind it’s Savannah, Georgia.

Don’t have any kids to prove it, but my wife was pretty loved up while we were there strolling among the picture perfect streets.

Europe is on a different level when it comes to places like this with charm and history, but you take what you can get when things start to get too pricey.

St Augustine in Florida is not without some charm and the size of the place forces you to slow down.

Mrs Flop asked me the other day where do you think our first trip will be to after this COVID interrupted travel drought.

I thought prices might go down a little bit in a few cities with less travellers but maybe the 2% inflation is also underreported in this segment too?

Maybe its2.1%.

Big city romantic trip for me equals San Antonio.

Evening strolls around the Riverwalk in San Antonio are hard to beat after a few Chardonnay’s, so many pockets of beauty and for most only a short stumble back to the hotel.

Riverwalk downtown San Antonio is a subterranean city loop surrounded by shops and restaurants that can be a bit claustrophobic in a few bottleneck areas but the whole Riverwalk extends to around 20kms overall.

Probably not the best place to go if you are a scaredy-cat but my intention was to stay just south of the main loop and then tour The Mission Trail as much as possible with its wide open spaces.

https://en.wikipedia.org/wiki/San_Antonio_River_Walk

Looking at hotels last night, still reasonably priced, could I resist clicking on the Zillow link that was stalking my every move?

No, I could not.

Was looking down in the historical district so that’s what they decided to get me on the hook with.

What can Zillow offer up for 300k in downtown San Antonio in the 7th biggest city in the land?

https://www.zillow.com/homedetails/831-S-Flores-St-STE-1201-San-Antonio-TX-78204/2087749085_zpid/

The place is older than Betty White but I thought the renovation was a decent mix of the old and the new plus a great location not many blocks from some of the nicest houses in San Antonio in King William Street.

Been up for 183 days as well, so no FOMO going on there.

Gotta stop doing this hybrid travel/ real estate comparison posts on a blog with tens of thousands of lurkers.

All I am doing is making my next holiday more expensive…

M46BC

#67 Stealth on 04.04.21 at 5:59 pm

Budget day will come and pass. Nice political advertising for the election, it is all virus’ fault, we had no other choice but to spend, more fear to justify more spending and bunch more excuses and victim talk.

Just like almost every time in history of budgets (substitute virus fault for other parties etc) across time and nations. (Not all of course some were done well)

I hope I am wrong.
Regardless, considering everything and looking at history it is still a beautiful world.

Thanks.

#68 Linda on 04.04.21 at 6:13 pm

Today’s blog dog is a ‘super-centenarian’ in dog years!

Given that all government intervention measures to date have done nothing to douse the RE fire I’m not sure what if anything can be done to let the air out of this bubble without explosive consequences. It is like watching a mass financial suicide. Only problem is, the burial costs aren’t going to be limited to those who drank the Kool Aid.

#69 Lead Paint on 04.04.21 at 6:14 pm


85 The Woosh on 04.03.21 at 10:18 pm
#82 Lead Paint on 04.03.21 at 9:33 pm
#71 Stone on 04.03.21 at 6:38 pm
#52 SoggyShorts on 04.03.21 at 4:45 pm
#122 Stone on 04.02.21 at 8:06 pm

Strange? Did I owe you something?

——————————————————

You owe everyone to shut up about your portfolio if you don’t back it up with substance. And that goes for everything else you opine about.

—————————————————

I must say that Stone has done a very good job refocusing the deplorables. You’re all focused on just one thing. Your portfolios must really stink in comparison.


———————————————————————————-/-/-

Wooshy,

Indeed his/her imaginary B&D portfolio is ahead of mine, but it is not a concern if mine because I have a lot of net worth tied up in startups, including my own, so I have a relatively conservative weighting. If all goes according to plan mine would drop less than Stone’s in a downtown, although I’m sure magically we’ll be told Stone is ahead in a bear market as well, without explaining how.

I’m just not fond of those who make things up to feel big and important and can’t support their claims with facts. Essentially some of us take satisfaction catching someone in a lie, as we have with Stone. You seem to be jumping in just to call people names, whatever floats your boat I guess.

#70 Nonplused on 04.04.21 at 6:15 pm

#98 crowdedelevatorfartz on 04.04.21 at 9:40 am
@#91 Noplused
“I read most of the link you provided and it does not seem this potential accident had anything to do with nuclear power,”

+++

Odd,
I though we were discussing how “green” nuclear power is and the by-product is radioactive waste…..
So, a tailing pond about to burst in Florida with radioactive waste is a bit of a stretch I will admit .
Would you be willing to buy the farmland for growing food after its flooded?
Kinda like houses with elevated levels of radon gas in the basement and higher incidences of cancer in the occupants?
Radiation is radiation….. natural or not….best to be avoided….like tanning booths.

—————————————

Radiation is radiation, sort of. Naturally occurring uranium 238 is not so bad because it has a half life of 4.5 billion years, so it decays relatively slowly. Plutonium on the other hand has a half life of 88 years which makes it nasty and hard to handle. Strontium 90 has a half life of just 28.8 years and can be absorbed by the bones like calcium making it very nasty indeed.

But the promise of Gen IV nuclear, especially the thorium proposals, is that in addition to being fail-safe, they don’t make plutonium. They still make nasty stuff but of sorts that are easier to handle than a uranium reactor.

But I guess we shall see if Gen IV reactors actually pan out. I don’t know that one has actually been built and tested yet.

#71 NoOneOfConsequence on 04.04.21 at 6:21 pm

Valid Short Term TFSA use…

My daughter, self-employed, $90K last year…on track for same this year, has a separate account where she keeps her ‘income tax savings’. First quarter, she has $8,000 sitting in cash…earning “high interest” of .10% and a monthly fee of $10.99.

She is thinking about just sending “income tax pre-payments” to CRA to save the bank fee. She can only stay disciplined if the tax set aside is in a different account.

At first I thought laddered GIC might be the way to go…but now I am considering advising her to use her TFSA, buying a bank preferred or other “somewhat predictable” ETF.

She is already investing…but has TFSA contribution room to do this for now.

Wonder what your thoughts are on this? Make a bit of earnings tax free. I did tell her that she might need to top up next spring when taxes are due and the investment might be down a bit. Or, alternatively…she might be on the positive side and be up some capital.

Your thoughts?

#72 Concerned Citizen on 04.04.21 at 6:25 pm

I highly doubt the BoC will do anything. It and the west’s other major central banks are happy only when asset prices are going up. Since 2009, they have had zero tolerance for asset prices going down even for a short time. Look at the record, especially in the U.S., EU, and Japan – every time the markets have caught the sniffles, the central banks have intervened in force.

Of course the natural outcome of prices never being allowed to correct is the formation of bubbles, which is where we’re at now. But to prick the bubbles, prices would need to go down, and that would interfere with the central banks precious “wealth effect” policy.

This government can implement a few measures to attack the problem around the edges, but they’ll have little to no impact. As long as central banks continue their negative real rate and asset buying policies, the lunacy will continue.

I’m sure the Tiffster will express further concern in the near future, and then continue with his policies that continue to pour gasoline on the fire. He and his generation got his – screw the kids.

#73 Stone on 04.04.21 at 6:38 pm

#61 VGRO and chill on 04.04.21 at 5:00 pm
#96 Stone on 04.04.21 at 8:38 am
#87 SoggyShorts on 04.03.21 at 10:54 pm
#71 Stone on 04.03.21 at 6:38 pm
#52 SoggyShorts on 04.03.21 at 4:45 pm
#122 Stone on 04.02.21 at 8:06 pm
Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

Whatever did you do with that? Nothing? Be honest. Not with me but with yourself.
*************************

The reason that portfolio has done well in 2021 is because preferreds have been on a tear this year, and bonds have done poorly. If you have 40% in bonds, your returns in 2021 have been meagre. The other stuff in there, most with a B&D ETF portfolio have, in greater or lesser amounts.

Garth’s opinion is preferreds make up the safe stuff, but that is not consensus opinion in the world of finance. Some would consider that as an alternative asset class. So is this really a 60/40 portfolio? Some may consider it closer to 80/20, which we would expect would have greater returns than a 60/40.

I checked this, and my 60/40 portfolio (from Canadian Couch Potato in 2014) at backtestportfolio.com on the max time frame available (2014 to present, due to VCN inception in Sep 2013). Mine returned 7.43% annualized, This one above returned 6.40%.

Here is my 60/40 portfolio:
VCN: 20%
VUN: 15%
ZRE: 10%
XEF: 10%
XEC: 5%
VAB: 30%
XRB: 10%

(And yes, I am aware ZRE could be considered an alternative asset class, too…)

It’s also worth noting that ZPR still isn’t back at where it was in 2018, despite 2021’s tear.

———

You were getting warmer, and then you shot yourself in the foot. Too bad you’re suffering from recency bias. You see it but you just don’t recognize it. Soooo close…yet…so far away.

Also: XRB. Why?

Lastly: Stop backtesting. If/when you realize why, please don’t bloody your forehead from smacking it against a doorframe.

#74 Annek on 04.04.21 at 6:41 pm

For upcoming budget: What would be politically popular is to tax the speculators on housing. Perhaps increase the down payment on houses. Nothing else.

#75 BC Renovator on 04.04.21 at 6:41 pm

#1 Mr Happy on 04.04.21 at 11:48 am
Listed our condo for double what we paid a couple years ago. Accepting offers Tuesday. I hope my greater fools do NOT read this blog!!!

______

haha! Awesome. Best of luck with your Greaterfool

#76 Sunny Daze on 04.04.21 at 6:42 pm

They couldn’t deflate this thing 3 years ago without hourly sob stories in the media of million dollar homeowners who were stuck and couldn’t finance.

Now we have debt layered onto leveraged debt compounded by grotesque government debt and no chance at an economy outside housing.

Fugedaboutit

All lip service and someone to blame game after they were all in on it together anyway.

#77 Sunny Daze on 04.04.21 at 6:53 pm

Happy Easter folks. Family time and health first always.

Housing insanity is just a sideshow in the grand scheme of things.

#78 Ponzius Pilatus on 04.04.21 at 7:10 pm

#107 crowdedelevatorfartz on 04.04.21 at 11:11 am
Ponzie’s Pickup Paranioa

Has the Austrian Audi Aficionado spread his message to La Belle Province?

Or have the environazi’s run out of targets?

https://driving.ca/features/feature-story/motor-mouth-environmentalists-looking-to-cancel-pickup-trucks

Only Ponzie knows for sure.
———-
Only the beginning my friend.
People are getting tired of the tyranny of the black, jacked up black monster cars that take over the roads, streets and parking lots.
Inconsiderate drivers who tailgate, middle finger and cut you off are a menace to a civilized society.
Example of “The tragedy of the Commons” at its worst.

#79 S.Bby on 04.04.21 at 7:13 pm

Realtor warns Canadian home prices could fall 40 percent in major housing market correction:

https://www.straight.com/news/realtor-warns-canadian-home-prices-could-fall-40-percent-in-major-housing-market-correction

“If the average mortgage rate gets to 5.5 percent in Canada in five years, we could see house prices fall 40 percent,” Major said.

#80 Ken on 04.04.21 at 7:18 pm

I dreamed last night that I was living in the house from the movie ‘UP’ and that the house kept going higher and higher until finally the balloons started to burst and it came crashing down. Unlike the movie — it did not end well.

#81 Stone on 04.04.21 at 7:25 pm

#65 Sail Away on 04.04.21 at 5:54 pm
#36 Sail Away on 04.04.21 at 2:37 pm
#60 Stone on 04.04.21 at 4:58 pm

———-

??

You are being asked for proof to back up your claims.

You have definitively failed to provide proof.

———–

Grind, grind, grind those teeth.

Looking forward to when you next quote the bible, Buffett, his sidekick Munger, Musk, etc., etc., etc.

Every time you do, I will smile. Broadly.

————

Sigh. The Black Knight strikes again:

https://youtu.be/ZmInkxbvlCs

We’ll stick with the 5.4% YTD for you, shall we? Oh… I’m 10.6%. Verifiably. That’s almost double. Doble in Spanish.

———

I believe you. But you’re a gambler and not B&D so who cares. Apples to oranges.

But you see, here’s the rub. You actually believe my returns as well. And you should because they are real. Yes, I’m cryptic sometimes but at the same time, so many of you just can’t let it go. You need to know. It’s eating you. Grind, grind, grind. Why the angry comments and retorts. Posting your return shouldn’t be a reason to get all upset. I wonder how you’d all feel if I posted a 3.25% ytd instead. Probably you wouldn’t care less. You’d probably laugh at me instead of showing so much anger. You’d only be angry if you believed. And I believe that you believe.

See, even you’re impacted. Don’t you realize you’re my beta-orbiter now?

Spin around me puppet.

#82 Yorkville renter on 04.04.21 at 7:33 pm

increasing the down-payment will do basically nothing as the insanity MUST be from people upgrading vs saving $$$ for a purchase.

I have $350k+ in cash to buy a place… my wife and I make well above average, have no debt, and we can’t get a mortgage over $1mm…

so, who’s buying the ‘average’ detached for 1.6mm? people who sold their place and have $700k to plop down.

it ain’t first time buyers!

#83 Steven Rowlandson on 04.04.21 at 7:36 pm

No matter how badly burned Canadians get when the bubble bursts I seriously doubt that they will learn from the experience except to be more ruthlessly greedy than before. They won’t get frightened enough to quit their financial sinning. It will be like the narration at the end of the Big Short movie.

#84 SoggyShorts on 04.04.21 at 7:37 pm

#58 Stone on 04.04.21 at 4:49 pm

I’m unclear why you say the portfolio is full of stuff that all moves in the same direction.

************
Plot a chart of that PF, you’ll see.
In March 2020 it all went down together.

What part of that PF would be up in the next big correction allowing you to sell it off and buy what’s on sale? Nothing. Might as well have been a 100/0 PF in 2020.

Unless Market timing is part of the system(it isn’t) then setting things up to take advantage of another possible 2020 (or a more minor correction) is my plan.

I’ve set MY PF at 80/20 and the 20 in HTB is a solid shock absorber and would have been great to have last March (or in any historical drop)

As for proper allocation, My registered accounts are full, but only represent 27% of my PF, so there is no allocation that would have allowed me to switch the remaining 7 figures over to your proposed PF that wouldn’t have resulted in a massive hit.

As for me asking for opinions but not taking it as advice, why would I?

Would you take advice from someone who has had inferior returns historically?
Would you take advice from someone who claims to now be getting double your returns but when pressed can only produce an inferior portfolio?

Back in 2020 I really did come here for advice, and both Garth & SailAway offered some that I did in fact take.
It turns out that the guys who have verifiable results are pretty good at what they do.

#85 millmech on 04.04.21 at 7:46 pm

Liberals will enact legislation so that all rrsp money can be used for the FTHB, and it will be considered a grant.
There will be be no tax implications/paying it back for getting into the housing market for the youngsters, it will make housing way more affordable if this is implemented.

#86 The Woosh on 04.04.21 at 7:52 pm

Does this sound sustainable to you? It doesn’t to anyone in the biz, including major lenders like the banks. Over the last few weeks, as chronicled on this pathetic blog, economists for RBC, BeeMo, TD and Scotia have decried the FOMO sweeping Canada, warning the hammer will drop. Even the Bank of Canada and the Pollyannas at CMHC, as well as the house-humpers in hot zones like the GTA are now convinced Ottawa cannot fail to act.

————————————————

Funny…are the appraisers used by the banks that these economists work for appraising at a level expecting a market dump? Thought so.

The demand is there in spades. I don’t like what it’s become but this problem us not just Canadian made. It’s world wide.

#87 Drill Baby Drill on 04.04.21 at 7:59 pm

Let these fools keep buying highly leveraged property. It will be a great learning lesson (for some). Freeland will have a poison pill in this budget. I wonder if it will be the housing issue.

#88 Doug t on 04.04.21 at 7:59 pm

I cannot fathom the price of a 4 man tent in Victoria’s tent city – THROUGH THE ROOF – homeless people are bidding up prices and emotions are HIGH (amongst other things) – people are worried about tarp prices too, apparently a Very hot commodity right now. And don’t even mention “rates” to this sorry lot cause apparently “homelessness “ is on the rise and fears are that tent prices will continue to inflate – talk about a bubble

#89 The Woosh on 04.04.21 at 8:05 pm

#69 Lead Paint on 04.04.21 at 6:14 pm

85 The Woosh on 04.03.21 at 10:18 pm
#82 Lead Paint on 04.03.21 at 9:33 pm
#71 Stone on 04.03.21 at 6:38 pm
#52 SoggyShorts on 04.03.21 at 4:45 pm
#122 Stone on 04.02.21 at 8:06 pm

Strange? Did I owe you something?

——————————————————

You owe everyone to shut up about your portfolio if you don’t back it up with substance. And that goes for everything else you opine about.

—————————————————

I must say that Stone has done a very good job refocusing the deplorables. You’re all focused on just one thing. Your portfolios must really stink in comparison.

———————————————————————————-/-/-

Wooshy,

Indeed his/her imaginary B&D portfolio is ahead of mine, but it is not a concern if mine because I have a lot of net worth tied up in startups, including my own, so I have a relatively conservative weighting. If all goes according to plan mine would drop less than Stone’s in a downtown, although I’m sure magically we’ll be told Stone is ahead in a bear market as well, without explaining how.

I’m just not fond of those who make things up to feel big and important and can’t support their claims with facts. Essentially some of us take satisfaction catching someone in a lie, as we have with Stone. You seem to be jumping in just to call people names, whatever floats your boat I guess.

———————————————

I actually know Stone. Yes, Stone can be obnoxious sometimes but no, he’s not lying. The returns Stone posted are real. I know the allocations of his portfolio. He just rebalanced at the right time.

Doesn’t that just blow your mind?

#90 jimmy zhao on 04.04.21 at 8:12 pm

This house was sold in 2018 for $2.060 Million

It is now again for sale in 2021 for 2.398 Million
An increase of 16.4%

https://www.realtor.ca/real-estate/22995542/43-n-holdom-avenue-burnaby

BC Assessment Thinks the value is $1.862 Million
https://www.bcassessment.ca//Property/Info/RDAwMDBZRFJWTQ==

I wonder what a lender would think when issuing a Mortgage?

#91 Phylis on 04.04.21 at 8:14 pm

Note to fomo’rs, get vaxed and chill.

#92 45north on 04.04.21 at 8:29 pm

Real estate analysts, economists, aficionados, experts and key players are now all expecting the same. Bubble, meet prick. The federal budget on Monday the 19th will either set up a blow to the housing market to be delivered by CMHC, or do the deed that afternoon. Either way, it’s coming. The result, says mortgage broker/blogger Rob McLister is clear: “They’re running scared because they’ve fallen behind the curve. They’ve got to do something to counter market psychology and the melt-up in home prices, and they will.”

They sure will. The bubble has to be pricked to make housing affordable because housing is a human right. If the air rushes out faster and with more force than anyone thought, then that’s collateral damage. It’s building back better.

#93 crowdedelevatorfartz on 04.04.21 at 8:40 pm

@#78 Politically correct purgatory
“Only the beginning my friend.
People are getting tired of the tyranny of the black, jacked up black monster cars that take over the roads, streets and parking lots.’

++++

Careful about the use of black in a disparaging tone.
In the world we now live in someone might take offence.
Lets just call them ….trucks.

Cancel Culture is reaching it’s zenith.
Where we simultaneously rewrite history and protect the environment.
Perhaps the horrible reminders of oppressive Sir John A MacDonald statues should all be pulled down from every City and town in the name of political correctness (progress) and tossed in the back of those horribly polluting Ford F-150 4wd trucks.
What we people thinking 150 years ago?
Raising statues to the Father of Confederation..?
How colonial.
After the statues are smashed and the trucks crushed…
We could all sing and dance around the giant crushing machine and determine …..what or who….. is next on the cancel culture of obliteration.

A modern Lord of the Flies.

#94 Damifino on 04.04.21 at 8:47 pm

#85 millmech

Liberals will enact legislation so that all rrsp money can be used for the FTHB, and it will be considered a grant. There will be be no tax implications/paying it back for getting into the housing market for the youngsters, it will make housing way more affordable if this is implemented.
———————————

That is the most irrational prediction I’ve heard yet. Are you suggesting you believe the path to “affordability” is to throw gasoline on the fire?

On the other hand, it is T2 you’re talking about here. A man with nary a foot in economic reality, yet possessing an astonishing ability to sway the gullible, shed all manner of mud, and get himself duly elected.

#95 VGRO and chill on 04.04.21 at 8:48 pm

#73 Stone on 04.04.21 at 6:38 pm
#61 VGRO and chill on 04.04.21 at 5:00 pm
#96 Stone on 04.04.21 at 8:38 am
#87 SoggyShorts on 04.03.21 at 10:54 pm
#71 Stone on 04.03.21 at 6:38 pm
#52 SoggyShorts on 04.03.21 at 4:45 pm
#122 Stone on 04.02.21 at 8:06 pm
Didn’t I tell you a couple months ago to consider this?

VSB 20%
ZPR 20%
VCN 20%
VUN 20%
XEF 16%
XEC 4%

Whatever did you do with that? Nothing? Be honest. Not with me but with yourself.
*************************

The reason that portfolio has done well in 2021 is because preferreds have been on a tear this year, and bonds have done poorly. If you have 40% in bonds, your returns in 2021 have been meagre. The other stuff in there, most with a B&D ETF portfolio have, in greater or lesser amounts.

Garth’s opinion is preferreds make up the safe stuff, but that is not consensus opinion in the world of finance. Some would consider that as an alternative asset class. So is this really a 60/40 portfolio? Some may consider it closer to 80/20, which we would expect would have greater returns than a 60/40.

I checked this, and my 60/40 portfolio (from Canadian Couch Potato in 2014) at backtestportfolio.com on the max time frame available (2014 to present, due to VCN inception in Sep 2013). Mine returned 7.43% annualized, This one above returned 6.40%.

Here is my 60/40 portfolio:
VCN: 20%
VUN: 15%
ZRE: 10%
XEF: 10%
XEC: 5%
VAB: 30%
XRB: 10%

(And yes, I am aware ZRE could be considered an alternative asset class, too…)

It’s also worth noting that ZPR still isn’t back at where it was in 2018, despite 2021’s tear.

———

You were getting warmer, and then you shot yourself in the foot. Too bad you’re suffering from recency bias. You see it but you just don’t recognize it. Soooo close…yet…so far away.

Also: XRB. Why?

Lastly: Stop backtesting. If/when you realize why, please don’t bloody your forehead from smacking it against a doorframe.

——

I already stated that my portfolio is from Canadian Couch Potato in 2014. That’s why XRB is in it.

The entire idea that a 60/40 portfolio gets 7% ish in the long run is based on backtesting portfolios. The entire idea that index investors beat most hedge fund managers, and therefore you shouldn’t do active management, is based on backtesting portfolios. Without backtesting portfolios, we have zero clue how to design a balanced and diversified portfolio. You are assuming that I think future returns will match historic returns based on a backtest. And we all know what happens when you assume.

#96 Steerage easter eggs on 04.04.21 at 8:52 pm

DELETED

#97 Karl hungus on 04.04.21 at 8:59 pm

Stone,
You realize rebalancing does not increase returns right?

#98 Phylis on 04.04.21 at 9:13 pm

Extra thought, require and assign fiduciary responsibility to real estate agents. Change agents to fiduciaries. Both agents. There, fixed it.
One too many drinky poos today, time to stop.

#99 Alphonse Kehaulic on 04.04.21 at 9:16 pm

“Unemployment is unacceptable, tourism and travel are dead for another season while tens of thousands of small businesses – restaurants, hair salons, gyms, retailers – will not survive.”

Chatting with a friend who lives in Shenzhen (China) and he tells me it’s business as usual there. Domestic tourism? On. Salons? Open. Gyms? No problem. Retailers? Thriving, including small corner shops. Restaurants? Yes, those are open too and you can even dine inside with your friends, family, and complete strangers.

What about Kanada? You will be locked down until you F(l)atten the Curve™ (hint hint: no end to your lockdowns).

You will get “Ghost Kitchens”, more symbolism of course, “ghost” meaning both a faint trace and a spirit of something that was once alive, like……. restaurants.

Bottom line is YOU haven’t worked hard enough yet. Sacrifice! Wins every war.

#100 Job#1 on 04.04.21 at 9:24 pm

#41 Dolce V

Your erudition does you proud, however, here in Canada the standard mandated isolation for covid is in fact two weeks. The word “quarantine” has become a generic term and is no longer taken literally. I suspect the length of time depends on the disease.

Re your #37 …BIGOT…?

#101 Ponzius Pilatus on 04.04.21 at 9:28 pm

DELETED

#102 Tim123 on 04.04.21 at 9:28 pm

Nothing goes up for ever. I just think real estate has reached that point, where it is beyond the ability of most people to purchase. I would take profits if I was a trader, as I don’t think pushing for the last few percentage points is worth the downside risks. I realize that most people are not traders, so they should be asking themselves, do I have any use for a couple hundred thousand dollars or not. If it is pocket change then do nothing and watch your potential profits melt away when the bubble bursts. If it is of significance then sell your house and go to cash and invest it. In this type of equity market if you are good at trading then a 30% rate of return is doable. Things should be good in the equity markets in 2021 assuming you are playing the reopening trade with industrials, cyclicals and financials.

#103 crowdedelevatorfartz on 04.04.21 at 9:36 pm

@#101 Pre-empted Ponzie
deleted….

++++

tsk tsk.

On another note.

A “DOUBLE MUTANT” strain of the coronavirus in California………?

https://www.sfchronicle.com/local/article/Double-mutant-coronavirus-variant-surfaces-16076361.php

#104 millmech on 04.04.21 at 9:39 pm

#94
Well the Liberals did promise to make housing more affordable and balance the budget and look where we are today.
If they go this route all FTHB will be able to drain those poor performing RRSP and watch the value of their new asset go through the roof right before election time.
The taxes not collect as a grant from the RRSP collapse will make it back into the coffers through transfer taxes, fees etc.
It just might work is what they will be thinking!

#105 VladTor on 04.04.21 at 9:47 pm

Gart, very good analysis for whole Canada.
Thank you.
My forecast: NOTHING will HAPPENED! NOTHING!!!!!

Why? B’s exist CMHC.

Ceterum autem censeo Carthaginem esse delendam – Cartage must be destroyed!

MANTRA for every day for honest politicians should be:

CMHC must be destroyed!
CMHC must be destroyed!
CMHC must be destroyed!

This is first and more important step to return RE to reality and rescue Canada economy.

Actually I don’t see now brave enough politicians who can reach this goal. Nobody discuss this not in media , not in parliament. CMHC in Canada transformed in second government inside Canada legal government with much more power than they suppose to have. This is absolutely harmful organization.

Tax payers not supposed to be responsible for mortgage insurance. Parties even not raise idea for closing CMHC. Why – you know answer better than me.

Second, When I was reading this —>

….Over the last few weeks, as chronicled on this pathetic blog, economists for RBC, BMO, TD and Scotia have decried the FOMO sweeping Canada, warning the hammer will drop. Even the Bank of Canada and the Pollyannas at CMHC, as well as the house-humpers in hot zones like the GTA are now convinced Ottawa cannot fail to act.

And this–>

….It’s classic end-of-bubble behaviour. “Never before have so many homebuyers been so leveraged,” observes broker McLister. Look at the number now taking loans exceeding 450% of their incomes.

I was laughing like a baby. (this is second time for this week – first time was when yours “RE porno sites” – remember? ). Do banksters thinking that we are idiots?

Easy to solve problem. Why banks give loans to people with leverage to their income equal 5x-12x. Why they close eye on real income? Banks created problem and blame now … blame for whom? Sorry, I forgot – they protected by CMHC – means protected by you and me.

Actually government don’t have a plan. What they discussing is not a plan – this I will be temporary (for couple month) cosmetic action. Personally me – may be I have complicated plan how to cool down RE market – they not. But I’m quiet – I’m not in power. Who will listen me.

Finally will be big bang. We are very close. Historical moment approaching! Keep ready cameras!

#106 What Is Even Happening? on 04.04.21 at 9:59 pm

You know how some Canadians make fun of and/or look down on the Americans who love their guns? Well, these Americans’ love of guns is similar to Canadians’ love of housing – illogical, ever-present and intense to the point of self-destruction.

Canadians who are willing to leverage themselves into oblivion in order to own a house or condo are objects of scorn, humour and pity to other people – including Americans. Just remember that the next time we shake our heads at “those darn Americans” who love their guns.

#107 VladTor on 04.04.21 at 10:26 pm

This is from Toronto news web https://www.narcity.com/en-ca/real-estate/canadas-house-prices-skyrocketed-since-2000-this-video-shows-the-tragic-reality

Prepare to be surprised — and not in a good way! A new video shared online shows how much Canada’s house prices have surged since 2000 compared to other countries.
Using data shared by the Organisation for Economic Co-operation and Development (OECD), Twitter-user James Eagle created a clip that shows exactly how Canada’s house prices have risen compared to other countries around the world over 20 years.

link: https://twitter.com/JamesEagle17/status/1377353707478601729

Just think about this Canada RE prices for 20 years +168% , US +55%. Compare Canada economy and US, Canada salaries and US etc. You will not sleep this night well after.

#108 The real Kip (Ret) on 04.04.21 at 10:49 pm

Canadian house prices are not finished rising by a long shot. Government money printing caused this and they’re going to print more.

The need to win the election will outweigh the need to rein in housing. Chrystia will do little to slow it down.

#109 Garth's Son Drake on 04.04.21 at 11:17 pm

Can’t even find another market in Canada to cash out to anymore.

I used to tout Calgary as a buy a few years back. Not anymore.

For the first time ever I cannot find anywhere in Canada that is a buy, therefore never plan on selling.

Langley zero lot line house with side vented gas furnace venting into your window well = 1.4M

Messed up.

#110 Scott Storch on 04.04.21 at 11:20 pm

It is the price of a house going up or the purchasing power of the dollar going down?

Houses look cheaper than 2003 in gold tender.

#111 DON on 04.04.21 at 11:31 pm

Not sure what Trudeau will do with a looming election and a housing bubble that threatens to unwind our economy. Most likely cosmetic changes like increasing the down payment or a spec and foreigner tax or ban foreign purchases. But nothing to touch current home owner equity until after the election.

House prices falling under their own weight is an inevitable result as more people are priced out. I think Trudeau is gonna let this play out a bit more. Let’s not forget this is all happening on scant listings. Like another poster mentioned when the pensionless boomers (now being vaccinated), no longer fear germs they will want a piece of this action. They are seeing their friends reap the gains.

Emotion created this bubble and emotion will prick it. It is now not a matter of how just when. Markets this big need to he constantly fed to sustain such momentum. The experts are now all in alignment as it is to big to ignore.

#112 Don on 04.05.21 at 12:04 am

I seriously doubt that Christia or any other would jump to rock this boat just ahead of an election. Nah! they will just talk about it, say they are “closely monitoring” and “will not take action “, IF NECESSARY!. This ball has to roll a bit more and they are going to let it. With Corvid-19, they want all the cash into the country, they don’t care from where. If anything is going to happen that will be 2022.

#113 Don Guillermo on 04.05.21 at 12:05 am

#78 Ponzius Pilatus on 04.04.21 at 7:10 pm
#107 crowdedelevatorfartz on 04.04.21 at 11:11 am
Ponzie’s Pickup Paranioa

Has the Austrian Audi Aficionado spread his message to La Belle Province?

Or have the environazi’s run out of targets?

https://driving.ca/features/feature-story/motor-mouth-environmentalists-looking-to-cancel-pickup-trucks

Only Ponzie knows for sure.
———-
Inconsiderate drivers who tailgate, middle finger and cut you off are a menace to a civilized society.
Example of “The tragedy of the Commons” at its worst.

********************************
I hear you. Those Audi driving realtors are the craziest.

#114 Lead Paint on 04.05.21 at 12:21 am

#89 The Woosh on 04.04.21 at 8:05 pm

———————————————

I actually know Stone. Yes, Stone can be obnoxious sometimes but no, he’s not lying. The returns Stone posted are real. I know the allocations of his portfolio. He just rebalanced at the right time.

Doesn’t that just blow your mind?

——————————————

Cool, if you know them can you confirm if they have a histrionic personality disorder?

It would explain his behaviour here.

#115 morrey on 04.05.21 at 12:25 am

“It’s like frogs in boiling water,” says Damien Klassen, head of investments at Nucleus Wealth in Melbourne. “Once mortgages were for 20 years, then 25, now 30. Soon it will be 50. Many people will never pay it back, so owning a home will become like renting – just that it’s renting from the bank.”

RENT by almost owning…

#116 Fortune500 on 04.05.21 at 12:34 am

Big claims Garth, but I suspect it will be a huge nothing-burger like all the other supposed attempts over the last 15 years. Here are my bets:

1. They will only nibble around the edges as they mostly want these gains to stay. Just slow in pace.

2. They will increase tax on second and third home sales, but profits have been so high that this will slow the market for a bit before picking up steam in a year or so.

3. They will give young buyers more rope to hang themselves in the name of ‘housing affordability’ but it will make things worse.

4. They will not get that they are the ones ‘talking’ the market to where it is. They wont come out strong enough around things like low interest rates being there for years, or how they plan to bring in record immigrants. Thus, the Canadian public’s perception will remain the same. Get in now, or be out forever, like those who waited and saved the last 15-20 years.

5. They will make commitments to building more, which is a too little too late situation but it makes them look good.

I see a 5-10% correction over a year after any attempts they make to cool this, and then is starts to slowly rise again.

So for those Canadians who’s parents did not have the wealth to give them down payments or ‘help’ with university etc. the message is clear. CANADA is not for you. Get a good paying job in a country where you can afford to raise a family and go. No point fighting this any more.

And yes, I did this. And yes, it was a great decision. I am just trying to decide what advice to give my children. Not holding my breath on this one Garth.

#117 Tudval on 04.05.21 at 1:11 am

LOL..”It’s classic end-of-bubble bla bla” but your only hope is for the government to intervene in the market.. Which they have done every year for the past decade or so. Maybe this time.. BUT there’s an election coming, so don’t bet if what they plan ‘works’, they will still be in power to gloat about it. You know, I’ll take the trade-off – a hit on equity only to see them GONE!

#118 Tudval on 04.05.21 at 1:18 am

It’s just comical.. begging for the government to take buyers’ and property owners’ money through taxation, for the banks to take their money through higher interest rates, only so the money doesn’t get to the builder, the property owner etc.. A whole new generation raised on hopes the government will do them “right” through redistribution of other people’s money. Good going Canada!

#119 Diamond Dog on 04.05.21 at 1:28 am

I believe you are right again, Garth. Real estate is an asset class that has benefited tremendously from government engineered low interest rates created by central banks buying MBS’s and the Bank of Canada still buying CMB’s (Canada Mortgage bonds) also used to buy MBS’s. That free money party is soon to end:

https://betterdwelling.com/bank-of-canada-ended-the-mortgage-program-that-inflated-prices-kind-of/

We are likely to witness both central banks pulling out of buying Mortgage bonds in one form or another by summer or fall. Predictably, yields rise from there. If CB’s don’t end buying CMB’s and MBS’s, the pressure on Trudeau’s government to tighten regs will be high. Readers take note, the banks themselves, the largest beneficiaries of a housing bubble, are calling for tighter restrictions due to dangerous levels of market risk.

Lets remind, when real estate bubbles pop, recessions are born and we are already in one with public borrowing running out of runway. The wealth effect created as real estate values rise becomes the poverty effect when values fall. Historically, values rise and fall with interest rates and this current real estate bubble is no exception. As values fall, home lines of credit become an issue. Higher interest rates take more bite out of disposable incomes. If inflation hits when the earners are squeezed (like right now), bankruptcies become a problem taking more money out of the economy. Then everything begins to spiral.

The cost of living shrinks to compensate, but unemployment rises as consumer spending further shrinks and incomes fall as the economy continues to shrink into a vicious spiral. The stock markets tank in response and all of the other bubbles deflate, save the debt bubble leaving no way out.

Most gambles fail. Rates rise further as risk continues to rise. Cash becomes king because few have it. Credit further tightens leading to more and more bankruptcies and higher unemployment. Austerity then sets in as tax revenues dry up and rates tick higher along with consumer choices. Lending further tightens to shrinking incomes and ever higher unemployment. The white hairs have seen it all before and headed for the exits before this SHTF, while the full color mops are deer in headlights and handed handles and told to mop the mess. For some, it will be too late and the pain will last a decade and beyond.

“Governments have our backs, they’ll bail us out” is the stinking thinking until they can’t. The multi page explanation “we never saw coming” is nested in bond markets and currency woes, compounded if the U.S. economy melt comes late. As juniors are about to find out, money isn’t free after all.

As it is with all omega’s, the end is never the same as the beginning throughout the eternity of eternities. Some will say, “I have seen the future of horror” and his name is (just substitute hellraiser and unholy with “housing crash” and that should describe the pain and suffering to come). Predictably, it won’t end well:

https://www.youtube.com/watch?v=8mOn4h0lgKQ

Does one need further description?

“The Box. You opened it. We came.”
“It’s just a house, a puzzle box!”
“Oh, no! It is a means to summon us.”
“Who are you?”
“Explorers in the further regions of experience. Demons to some, angels to others.”
“It was a mistake! I just, its just a house it is. (sobbing)
“You can, you can go to hell!”
“We can’t. Not alone. You solved the box. We came. Now you must come with us. Taste our pleasures.”

https://www.youtube.com/watch?v=4rjDx2v12TA

#120 Steve on 04.05.21 at 1:40 am

Is that 450% of gross or net income?

I don’t understand why they never specify gross vs. net in charts.

#121 Diharv on 04.05.21 at 1:43 am

Since the only economy Canada has anymore is selling houses to each other, it’s in govt’s best interest to keep the gasbag inflating.

#122 Zealot on 04.05.21 at 2:27 am

Trudeau has kept the rate at zero so he could borrow and spend, and he’s paid no attention to the consequences. He wants to borrow and spend, but he doesn’t want Canadians to do the same? He can treble rates right now and crush the buyers if he wants. Trudeaus plan will have to be some dodgy way of allowing him to keep borrowing at zero and stop everyone else from doing the same. Zero rates are fuelling the hyperinflation in real estate and the rampant inflation elsewhere. It will be grossly dishonest if Trudeau attacks home equity. It isn’t the prospect of reduced capital gains that will damp this fire. Only when Trudeau stops borrowing and spending will the insanity stop. Let’s see if he has the guts to be honest.

#123 IHCTD9 on 04.05.21 at 8:52 am

I think those that bought out in the sticks in 2021 as an “investment” are going to be punished by the time they have to renew. There is absolutely zip to keep prices as high as they are out here right now. A trickle of WFH folks and retirees is about all there ever was, and will ever be to push prices outside of a mania like we’re having this year – which basically can’t go on much longer without sparking some kind of revolution.

Canada is going to come out of this with bruises.

#124 millmech on 04.05.21 at 9:03 am

#109
I see your Langley house and will raise you one Toronto Garage.
https://www.thestar.com/news/gta/2021/03/03/this-tiny-toronto-garage-was-listed-for-729000-it-sold-in-only-three-days.ht

#125 Sail Away on 04.05.21 at 9:08 am

#89 The Woosh on 04.04.21 at 8:05 pm

———-

I actually know Stone. Yes, Stone can be obnoxious sometimes but no, he’s not lying. The returns Stone posted are real. I know the allocations of his portfolio. He just rebalanced at the right time.

Doesn’t that just blow your mind?

———-

You know what he told you, same as us. Is he helping you ‘manage’ your portfolio for a fee? And if so, has his magically done better?

#126 Concerned Citizen on 04.05.21 at 9:56 am

I see a lot commenters suggesting this lunacy will burn out on its own. Unfortunately, I highly doubt it. This time is different. You have central banks pumping asset markets like no tomorrow, to the point that if the markets aren’t up every single day it’s a shock. S&P 500 up over 84% in ~1 year and counting as I type. That’s a major market index trading like a penny stock.

Sure many Canadians, including first-time buyers, are priced out of the market. But who cares, we don’t need them anymore. It’s the folks flush with the central bank cash that are investing and speculating in the housing market.

The central banks are presiding over and expediting the greatest concentration of wealth we have seen in generations. It’s so blatantly obvious, you have to assume it’s by design. So really, who can reasonably expect them to stop? It’s far too out of control at this point.

I predict a mass exodus of young skilled workers out of Canada in the near future. The kids that remain and the “middle class” immigrants that come will be shacking up with roommates for the rest of their lives. The dream of home ownership is now out of reach for the majority of Canadian young people, and that’s not hyperbole. It’s a travesty. I increasingly think many of our policymakers are sociopaths.

#127 Jenna on 04.05.21 at 9:57 am

Garth,

Nothing will happen to punish Canadians that purchased real estate. Any political party that pulls the trigger will be out of office. The party that reverses the changes will be voted into office with a Big Majority.

Nothing will happen…maybe…maybe window dressing stuff with lots of loopholes.

#128 crowdedelevatorfartz on 04.05.21 at 10:11 am

When the Real estate madness ends….and it will end.

Prepare for the financially crushed mortgage holder ( greaterfool) to look at the tv cameras in bewilderment and say…..”I never thought this would happen”.

Then they will say, ” The govt has to DO something!”

The financially illiterate braying and crying for the govt (taxpayers) to save them from their own stupid greed.

Will the Liberals be that govt?
Stay tuned.

#129 Guelph Guru on 04.05.21 at 10:11 am

Knowing our beloved, kind hearted, benevolent leader Mr. T, he would not want to hurt the feelings of his loyal subjects.
He would ofcourse show genuine concern for the well being of his subject and urge them to think wisely. But in this matter he truly believes in non intervention. The definition being non intervention to cool off, but intervene to help his loyal subjects.
With the possibility of elections, it will be a strong warning and then back to buying more MBS. What’s there to loose, its your and mine tax payer money.

#130 Shaun on 04.05.21 at 10:21 am

Real inflation isn’t 2% it’s at least 5% and probably 10% last year and next year too. Once you accept that the government is lying to you about that, the rest of the numbers balance. And if you can borrow for well under the real rate of inflation, inflation pays off your mortgage and prices go up.

I was trying to get a $3.75 million house for $3.3 in December for these reasons, then it relisted and sold at $3.9. I didn’t care because the TSXV tripled in a year.

Governements lying about the real rate of inflation is a massive wealth tax and your after tax investment gains have to exceed that or you’re actually losing money.

If the liberals start taxing capital gains at 100% and raise the top tax bracket income tax, we might soon need 20% ROI annually to break even. Less of course if you use leverage.

#131 Penny Henny on 04.05.21 at 10:37 am

#114 Lead Paint on 04.05.21 at 12:21 am
#89 The Woosh on 04.04.21 at 8:05 pm

———————————————

I actually know Stone. Yes, Stone can be obnoxious sometimes but no, he’s not lying. The returns Stone posted are real. I know the allocations of his portfolio. He just rebalanced at the right time.

Doesn’t that just blow your mind?

——————————————

Cool, if you know them can you confirm if they have a histrionic personality disorder?

It would explain his behaviour here.
////////////////

Lead Paint you are much more understanding and tolerable than I. I just assumed Stone was an A-hole.

#132 Ponzius Pilatus on 04.05.21 at 10:44 am

123 IHCTD9 on 04.05.21 at 8:52 am
I think those that bought out in the sticks in 2021 as an “investment” are going to be punished by the time they have to renew. There is absolutely zip to keep prices as high as they are out here right now. A trickle of WFH folks and retirees is about all there ever was, and will ever be to push prices outside of a mania like we’re having this year – which basically can’t go on much longer without sparking some kind of revolution.

Canada is going to come out of this with bruises.
————————-
Not afraid of some bruises.
Had worse.
Bring it on.
Better an end with horror, than a horror without end.

#133 crowdedelevatorfartz on 04.05.21 at 11:02 am

@#126 Concerned Citizen
“I predict a mass exodus of young skilled workers out of Canada in the near future. ”

+++++

There are YOUNG skilled workers in Canada?
Please tell me where they are as, I and many other business owners are ready , willing and able to hire them…..

#134 IHCTD9 on 04.05.21 at 12:00 pm

#132 Ponzius Pilatus on 04.05.21 at 10:44 am
123 IHCTD9 on 04.05.21 at 8:52 am
I think those that bought out in the sticks in 2021 as an “investment” are going to be punished by the time they have to renew. There is absolutely zip to keep prices as high as they are out here right now. A trickle of WFH folks and retirees is about all there ever was, and will ever be to push prices outside of a mania like we’re having this year – which basically can’t go on much longer without sparking some kind of revolution.

Canada is going to come out of this with bruises.
————————-
Not afraid of some bruises.
Had worse.
Bring it on.
Better an end with horror, than a horror without end.
__

I’d like to see big honking black and blue ones asap please – preferably before my kids hit house buying age.

It didn’t have to be this way, but the Liberals sat (and are still sitting) on their hands when carefully administered and sustained fiscal policy could have gently applied the brakes. Trudeau didn’t (and still doesn’t?) have the ballz – and if the Liberals don’t find some – like right now – the homeowners of Canada will become crash test dummies. It’s too far gone to be gentle on landing.

#135 DON on 04.05.21 at 12:26 pm

#125 Sail Away on 04.05.21 at 9:08 am
#89 The Woosh on 04.04.21 at 8:05 pm

———-

I actually know Stone. Yes, Stone can be obnoxious sometimes but no, he’s not lying. The returns Stone posted are real. I know the allocations of his portfolio. He just rebalanced at the right time.

Doesn’t that just blow your mind?

———-

You know what he told you, same as us. Is he helping you ‘manage’ your portfolio for a fee? And if so, has his magically done better?

********

Why do you care so much…it is the internet. The rivers are running with fish…the sun is out. Stone is also clever and knows how to yank a change just for the fun. I am game for spending some time doing a deep drive on the info he provided, why the hell not…need something to occupy my mind these days…including the possible rebalancing as The Woosh suggested.

I took a bunch of family kids river fishing yesterday and to my delight, I have at least 3 more fishing buddies to spend time with in the future. Those are the only moments that count when looking back.

We are all refugees on this gracious blog… (mileage may vary). As newsrooms become talks shows with endless mindless banter between the hosts I escape to greaterfool for my news sounding board.

#136 raven on 04.05.21 at 2:35 pm

Meanwhile in Langley, BC…https://www.cbc.ca/news/canada/british-columbia/hopeful-metro-vancouver-homeowners-stand-in-line-for-the-chance-to-snag-langley-townhomes-1.5975207?__vfz=medium%3Dsharebar

#137 Tri state pat on 04.05.21 at 5:42 pm

Again, If the government wanted to cool things down they would have done it a long time ago. The banks run this country.

#138 A J on 04.05.21 at 11:14 pm

Nothing’s going to change. This has been the same song and dance for years and real estate prices continually march higher and higher. This is the new reality. If the pandemic couldn’t kill the real estate market, nothing will.