The retreat

Is our house lust now an economic threat? Should you lighten up on the maple in your portfolio because of rampant house-horniness? How is this possibly going to end well?

Fidelity portfolio manager David Wolf made waves saying he’s dumping some Canadian exposure in his funds because idiots are paying extreme, unsustainable amounts for houses. But who cares about some mutual fund dude?

Maybe you should.

Wolf joined the global fund manager seven years ago after service as senior policy advisor to the governor of the Bank of Canada. Lately he’s been helping to run the Fidelity Canadian Asset Allocation Fund, Fidelity Monthly Income Fund, Fidelity Monthly Income Class, Fidelity Dividend Fund and Fidelity Income Allocation Fund.

Here are his creds:

“From 2009 to 2013, Wolf served as Adviser to the Governor of the Bank of Canada, and served as Secretary to the Governing Council for Monetary Policy at the Bank of Canada. As Secretary to the Governing Council for Monetary Policy, he oversaw the analysis supporting the monetary policy decision process and acted as Editor in Chief for the Monetary Policy Report. In addition, he served as a representative of the Bank of Canada on a number of international bodies, including the G-20, the International Monetary Fund (IMF) and the Organisation for Economic Co-Operation and Development (OECD).

Prior to his work for the Bank of Canada, Wolf served as the Head of Canadian Economics & Chief Strategist for Merrill Lynch Canada from 2005 to 2009, where he was responsible for fundamental analysis and asset allocation strategy. Previously, he served as the Chief Interest Rate Strategist & Senior Economist for RBC Capital Markets, where he worked from 1997 to 2005.

Hmm. Smart guy. So what does Wolf say now?

“Housing is becoming a dominant player in GDP in a way that is dangerous, like in Spain, Ireland and Greece,” he states. “These turned out to be epic housing bubbles that led to severe recessions.”

These days real estate accounts for a direct 10% of the economy. But that’s misleadingly small. Residential mortgage debt is almost $1.7 trillion, and growing by $200 billion a year. The entire Canadian economy is $1.8 trillion – so figure it out. Real estate’s reach is massive. Over 250,000 people are employed in flogging properties across Canada, 130,000 of which are agents. Then add in all the mortgage brokers, insurance dudes, home inspectors and closing lawyers, and the number swells. This does not include builders, contractors, renovators, drywallers, roofers, electricians, plumbers and virtuoso Italian tile guys.

Is this why the recent federal budget wimped out in dealing with the housing bubble? You bet. Real estate is being left to run hot because politicians would rather have buyers and borrowers shoulder the risk than the government. Besides, at this point in the neverendum pandemic, all growth is good growth. Even when homes are made unaffordable and society is set up for an inevitable, painful correction.

By the way, here’s an example.

No. 380 West 62nd Ave in Vancouver sold for $4.28 million in February of 2018. Uh-huh, you read that right. That’s a ‘4’. At the time the province’s assessed value for the 50-foot lot was $3.2 million. Eighteen months later the owner tried to move it for $4.3 million. No takers. Over time the asking price was reduced to $3.9 million. Still not deal. Now it’s for sale at $2.9 million. Oops.

In what universe, you might ask, is an old, ugly beater house in Canada’s third city worth even three million? How could anyone have been so myopic and possessed as to pony up well over four mill? Meanwhile, as reported here, a rural home outside Ottawa recently went for $1 million more than the listed price, and the average sale price in Toronto is now 111% of asking. Nationally residential real estate gained 31% in the last 12 months, and more homes sold in March (during a global pandemic) than any previous month.

By the way, it’s worth recalling the last time a real estate bubble turned negative. What followed was a long period of stagnation. In the GTA it took seventeen years for the average house price to restore.

What could go wrong?

Lots. A ton of new listings could hit the market, overwhelming demand, knocking prices back. That could put recent buyers under water – and remember almost a quarter of GTA purchasers have debt-to-income ratios of at least 450%, considered to be in the red zone.

Interest rates could rise (the CB last week said as much). Mutated mutant virus variants could up the misery and spike the economy. Or the vaccines might work great, defeating Covid, repopulating downtown workplaces and making WFHers in faraway hick cities panic and sell. Maybe we just hit the price wall. Disgusted potential bidders quit. The market loses momentum and sinks.

Who knows? But experience tells us this much: bubbles do not deflate. They burst. And Wolfy wasn’t born yesterday.

About the picture: “The celebration of canines in your blog helps keep us all focussed on what really matters and so I hereby submit a photo that might be of interest,” writes blog dog Jack. ” This is Meggie (left) and Pepper, our 2 unrelated miniature schnauzers who each lived a nice long 17 years.  Here they are trying to figure out how to access a squirrel, their constant nemesis.”

142 comments ↓

#1 Happy Renter now Terrified on 04.25.21 at 12:55 pm

Hey Garth and Dogs!

LL just informed us he is thinking of selling our long term rental. We are worried sick now. Any idea how long the back up is at The Tenant Board for processing evictions due to selling. The thought of having to get back into the insane market right now is horrifying.

#2 Flop... on 04.25.21 at 12:56 pm

Three Billboards Outside Ottawa, Ontario.

Are you sure

You guys know

What you’re doing…

M46BC

#3 Leftover on 04.25.21 at 1:01 pm

When it comes it’ll be death by a thousand cuts. Things like banks tightening credit, just a little. Or governments removing innocuous advantages like homeowners’ grants and deferred property taxes for people over 55 simply because they can’t afford these tax expenditures anymore.

No big bang, no headlines because media is addicted to real estate just like everyone else in the country. By the time anyone notices it”ll be too late.

#4 Cheese on 04.25.21 at 1:02 pm

Curses, I just put 10% of my portfolio into VCN.

My timing is almost invariably awful.

#5 Rainman on 04.25.21 at 1:08 pm

I agree with what you and Wolfy are saying, but what is perplexing is the cost to build these days. For residential you are looking at $400 at least a SF to get a basic but nice build. Inflation is also driving the market and is why I see a correction, but not a massive bursting of the bubble.

#6 crowdedelevatorfartz on 04.25.21 at 1:09 pm

No no no Garth.
you’ve got it all wrong.

A financial guy with an impeccable financial background doesn’t have the creds a polyglot former author appointed because of gender politics has……..

#7 TurnerNation on 04.25.21 at 1:10 pm

I call it Kanada – as we have fallen and are under occupation. Don’t believe it?
Why not ask at your local checkpoint. Papers please.

Here is a photo of police guarding the…Cherry Blossom trees fenced off in a local park. Yup total occupation.
Right behind them would be a homeless camp with people shooting up drugs. (Homeless are immune to all this. Basically anything which gives joy in life is now off limits.)
https://twitter.com/rpoconnor/status/1386087152417742851

***Supply chain shortages incoming? *** (As that stupid leaked doc claimed.). Still predicting a government-induced recession, 2022-2024.
I knew these new CV laws in BC, ON for workplace closures, would be used for this. Posted it here the other week.

1. Ontario health unit partially closes 2 Amazon fulfilment centres to control COVID-19 outbreaks (cbc)
Closures apply to businesses with 5 or more cases in workplace over 2-week span

2 I hear Montreal Port Longshoremans’ Union has gone on strike as of Monday.

3. April 20, 2021 – The Seafarers’ International Union of Canada (SIU) is demanding a meeting with the federal Minister of Health and an immediate action plan to vaccinate Canadian seafarers’ against COVID-19 or risk a total stoppage to the Canadian shipping industry. After countless attempts to get direct answers from provincial health officials, the Union is warning of dire consequences to the Canadian economy if the shipping industry is forced to shut down due to the spread of the COVID-19 virus. The federal government must step in now to ensure the flow of critical goods continues.
https://www.seafarers.ca/seafarers-union-warns-of-total-shutdown-to-canadian-shipping-industry-if-vaccination-plan-is-not-developed-immediately/

#8 Linda on 04.25.21 at 1:15 pm

450% is ‘hitting the red zone’? I’d have thought the red zone would have been reached at less than 100%, but that is just my crazy live within your means thinking. So old school, so out of tune with the times.

#9 earthboundmisfit on 04.25.21 at 1:20 pm

That gentleman has some serious creds. Best listen.

#10 Faron on 04.25.21 at 1:23 pm

Thanks for the post Garth.

Just noting that when a price rise looks steep on a log-scaled plot, that’s troubling. Also note that, if the 1980s ramp is a useful pattern, we are only halfway up this go around. As the saying goes, markets can stay irrational longer than one can stay solvent.

Finally, by some estimates, it would take 19 years of RE stagnation for inflation and wages to catch up. Eerily similar to the 17 year stagnation in RE in the 80s 90s. I wonder if there’s a threshold in there that the market wont cross.

#11 Tim on 04.25.21 at 1:26 pm

Like you say “builders, contractors, renovators, drywallers, roofers, electricians, plumbers and virtuoso Italian tile guys” – big time! I’m in Riley Park (stick a pin in the center of City of Vancouver’s land mass) and every freaking block has a reno or rebuild in progress – often more than one. (We’re paying some ourselves to upgrade our Howe Sound cottage) Every construction and skilled-trade truck/van has “We’re hiring!” on the side. I can’t imagine how much, in aggregate, is flowing through this sector, but it’s bigger than most people realize. When the bubble starts hissing, I wonder how hard it hits these people?

#12 Doug in London on 04.25.21 at 1:26 pm

“Housing is becoming a dominant player in GDP in a way that is dangerous, like in Spain, Ireland and Greece,”
———————————————————–
As the old saying goes, the only thing we learn from history is that most people learn nothing from history. We could really use the sensibility and sobriety of someone like Paul Martin right now. I think I’ll also take a hint and reduce some of my Canadian exposure.

#13 VGRO and chill on 04.25.21 at 1:35 pm

A couple weeks ago I moved from 70% maple to 42% maple for exactly these reasons.

What future growth potential is there, when Canadians would rather trade houses and pay mortgages, rather than create and grow profitable businesses that create goods and services that improve our lives?

Still overweight. – Garth

#14 Dolce Vita on 04.25.21 at 1:37 pm

Garth, if you will permit me…

Liberation Day today in Italia.

Both sides of my family during WWII were Partisan from the outset of WWII and did their part. None of that can even begin to compare to the casualties the Allied Armed Forces suffered to liberate Italia (scroll to the “Casualties and losses” side bar):

https://en.wikipedia.org/wiki/Italian_campaign_(World_War_II)

25,890 Canadians.

To me the:

GREATEST GENERATION.

Italia’s air acrobatic team, Le Frecce Tricolori, in a flyover today of Rome’s Altare della Patria in honor of the WWII Allied Armed Forces that made the ultimate sacrifice:

https://www.youtube.com/watch?v=-yBCWZUr9OA

[dog and car alarms enthused]
—————-

We do not forget, not even in a Pandemic.

Grazie infinite Canada.

——————-

Hey, we also sent you our “virtuoso” tile guys (use Italian –> English for how I read that).

Good one Garth, either way interpretation.

#15 Prince Polo on 04.25.21 at 1:40 pm

Agent Provocateur Garth!

‘Twas not long ago that I recall reading that a housing bubble would not have a material impact on TSX. I guess the inflation of said bubble is now too large for there not to be collateral damage. Duly noted. Thanks!

#16 Dolce Vita on 04.25.21 at 1:49 pm

So.

What’s up with the logarithm chart Garth?

…kidding, just kidding.

I like it, it looks good to me except for the numbers. Crazy.

—————–

Glad Gov Canada in the budget did not stick its nose into the RE market and prolong the misery.

Let the market decide true value and not a bunch of meddling, know nothing, Gov bureaucrats.

And as always, I hate RE.

—————–

A nation of Gollum’s about to find out what “precious” is really worth.

#17 Travelbug on 04.25.21 at 1:53 pm

I don’t write here often but today, I have to get something off my chest and perhaps find other bloggers who ask the same question: why has our government not taken measures to reign in the real estate market to keep this part of the economy at a sustainable and healthy level within the GDP years ago? What is the point of Canadians selling houses to each other at ever inflating prices? Wouldn’t it make more sense to create jobs in manufacturing, hi-tech, green industries, public infrastructure etc., have incentives to attract investors in such industries, thus increasing real productivity and worldwide competitiveness? For years now, our government has pushed the agenda of making it easier especially for first time home buyers and where did this
get us? I am so fed up. Who to vote for in the next election?

#18 Handsome Ned on 04.25.21 at 1:58 pm

I, like a lot of boomers grew up in a house like the one in the picture. Stucco sides that didn’t leak, framed with old growth fir, L shaped living dining room. This was heaven for our parents who went through the depression and ww2. A working man could support a wife and 4 kids on his wages alone. Shame that the old girl is bulldozer bait.

Three years ago, I visited my childhood home in Edmonton, still standing strong at close to 70 years old.
When I was in grade one, all students were given a tiny spruce to plant. Mine is still there in the back yard, now a massive tree. A young family lives there now, bet they paid under 400k.

#19 Dogman01 on 04.25.21 at 2:13 pm

#2 Flop… on 04.25.21 at 12:56 pm
Three Billboards Outside Ottawa, Ontario.
Are you sure
You guys know
What you’re doing…

——————————————–

Trusted —- Not Trusted —–Dis Trusted

For me our Governments started this pandemic at the right end of Trusted.

They have moved far to the right on my scale to full on Dis-Trusted.

I am not sure if they are stupid or bandits
https://medium.com/understanding-us/the-heavy-price-of-stupidity-67fe6fe4bcd5

Canada has spent Billions upon billions for this crisis.

14 Months ago we learned that ICU bed were the stress point of our medical system , and now again ICU beds are the stress point of our Health Care system. It appears to me Canada did nothing substantive over the 13 months and used little of the Billions spent to ameliorate this ICU situation.

#20 -=jwk=- on 04.25.21 at 2:15 pm

So prices go up another 20% and then level off for 15 years. House we bought in 2015 has now doubled. That’s fine with use, and likely fine with most people….

#21 Lead Paint on 04.25.21 at 2:17 pm

Sail Away and Faron:

Have you ever thought that the reason you can’t stand each other is that you are more similar than dissimilar?

Your egos and insecurities actually overlap quite closely?

In a group you overlap one another’s identities?

Food for thought.

#22 Ok, Doomer on 04.25.21 at 2:22 pm

Had an interesting chat with a Mill relative the other day. She decried my social justice “insensitivity” as an old white guy (and balding and portly too, both of which I proudly disclose) that I was doing too well financially compared to her. She felt that she was entitled to live the same lifestyle that my wife and I enjoy, despite being in her early-20’s. She pouted and carried on for a bit, complaining that it was also unfair that she was expected to pay for her own Lasik surgery as she deserved, as she tone-deafly called it, “the gift of sight”. Then she jumped in her new Toyota SUV and headed off for a weekend of snowboarding in Banff.

At her age, and for a long time after that, my wife and I didn’t have a pot or a window to throw it out of, let alone going skiing to Banff for the weekend. We spent years risking every penny we could scrape up to build a business and indulge in the hedonistic practice of meeting payroll.

The self-centeredness of her comments was unbelievable and I felt like I was watching a Millenial version of the old Monty Python skit “Upper Class Twit of the Year Awards”.

And this is the cadre fueling the real estate bubble? Shouldn’t take long now.

#23 housed and owning it on 04.25.21 at 2:23 pm

The big bad wolf come to blow these houses down… Wolfie against the Canadian government,,, not a chance… Too much employment there,,, too many votes there and too much future there… They’ll slow it down,,, bit by bit,,, so that not a sound is heard – when and only when the economy is running again on its own and no need for the government to keep it going…

#24 drydock on 04.25.21 at 2:27 pm

Fifteen days to flatten the curve:
17 March, 2020
405
days ago.

#25 tkid on 04.25.21 at 2:30 pm

Hi Garth, what Canadian weighting would you recommend?

#26 Freedom First on 04.25.21 at 2:32 pm

Garth, enjoyed your blog today, as I do everyday! Thankyou!
I side with Wolfy, and I believe everything he said to be correct.
Liquid, diversified, balanced, and debt free. There is no life like it. Stay calm.

Freedom First

#27 Damifino on 04.25.21 at 2:32 pm

#17 Travelbug

Wouldn’t it make more sense to create jobs in manufacturing, hi-tech, green industries, public infrastructure etc., have incentives to attract investors in such industries, thus increasing real productivity and worldwide competitiveness?
——————————

Absolutely! That is, except for the “green industries” part which is purely a flight of fancy. In addition, we should stop sabotaging our fossil fuel production and begin the immediate decriminalization of nuclear energy.

But realistically, I think selling houses to each other will remain our principal industry for quite a while yet.

#28 Ponzius Pilatus on 04.25.21 at 2:38 pm

#18 Handsome Ned on 04.25.21 at 1:58 pm
I, like a lot of boomers grew up in a house like the one in the picture. Stucco sides that didn’t leak, framed with old growth fir, L shaped living dining room. This was heaven for our parents who went through the depression and ww2. A working man could support a wife and 4 kids on his wages alone. Shame that the old girl is bulldozer bait.

Three years ago, I visited my childhood home in Edmonton, still standing strong at close to 70 years old.
When I was in grade one, all students were given a tiny spruce to plant. Mine is still there in the back yard, now a massive tree. A young family lives there now, bet they paid under 400k.
—————–
Saw a clip the other day about a guy who strips out the old growth wood of beaters like this one.
Showed how much stronger that wood is than new growth.
Makes a killing re-selling it.
I say, remove the wood from the beater and then nuke it.
She’s uglier than my exwife.

#29 Yuus bin Haad on 04.25.21 at 2:53 pm

There was a delay in John Kerry getting his talk about how to remove all the CO2 from the atmosphere started the other day. Apparently he had to call on his assistant to help get his Zoom call off mute.

#30 Justin S on 04.25.21 at 3:00 pm

What if home prices in Canada are ‘fairly valued’ relative to everywhere else in the world?

Canada is consistently ranked as one of the top countries in the world to live. This is home, but I’ve been all over the world, and no country even comes close compared to Canada.

Why shouldn’t we have the most expensive real estate values in the world? We’re one of the most desirable countries in the world to live: universal medical coverage, accepting of all races/cultures/genders, natural resources and beauty, world class cities (yes – Toronto and Vancouver ARE world class cities), and on and on.

If Canada isn’t worthy of having the highest real estate prices in the world, which county is?

Just some food for thought.

Local real estate prices are – everywhere – a function of the local economy, not the global one. – Garth

#31 Justin S on 04.25.21 at 3:02 pm

Just to expand on my above comment, what if there is lots of room to run for RE values here in Canada? This could be just the beginning……

#32 ts on 04.25.21 at 3:08 pm

If people in the know like David Wolf, David Rosenberg, and Garth are hinting at a bubble, I would definitely listen and hold off buying right now. There will always be bubble deniers, but these are people who are way overextended with a lot to lose and won’t believe it until it’s too late.

#33 Flounder on 04.25.21 at 3:10 pm

According to the graph that you posted, are we to assume that there is no historic evidence to show significant housing price declines to be expected? Is this unique to Canada? A long period of stagnation perhaps. Or is this an historic event that will indeed bring a pricing correction starting in 2022!

#34 Damifino on 04.25.21 at 3:12 pm

#28 Ponzius Pilatus

Saw a clip the other day about a guy who strips out the old growth wood of beaters like this one. Showed how much stronger that wood is than new growth. Makes a killing re-selling it.
—————————————–

It works fine if you’re willing to replace your saw blade after every third cut. That stuff is tough as iron, doesn’t conform to modern dimensions and is usually chalk full of impossible-to-extract nails.

#35 Brian Ripley on 04.25.21 at 3:12 pm

“Over 250,000 people are employed in flogging properties across Canada, 130,000 of which are agents. Then add in all the…

I have my very long term (1976-2021) charts of Canadian Provincial Employment and Unemloyment charts up: http://www.chpc.biz/employment.html

Also featured are the tabled decadal percentage changes over 40 years. Alberta is the clear outlier with the most persistent drop in employment and rise in unemployment.

Also on the same page is the percentage Y/Y change in the Employment Class of Worker and yes the FIRE sector (finance, insurance, real estate and leasing) is up 3.1% (March data)… but the big winner is actually “Educational Services” that is up 16.4% Y/Y.

Anyone who has had the experience of “education from home” this past year knows, it is clear that a lot more work is still required to get home schooling more efficient and accessible, not only is access to better technology required, but much better human interaction is required as well.

I suggest that in primary and secondary school settings, a student should have one or more senior students as liaison for student mentoring which would reduce the burden on teachers and parents and further increase the skill sets of all students. An effective way to learn is to teach.

In my opinion the industrial warehousing of children in overcrowded underfunded settings is due for a change… perhaps to a more decentralized system.

We have a lot of unproductive real estate that could be used for smaller educational pods… strip mall vacancies, libraries, churches, devoted floors in office and residential towers etal. And of course easier to use cross platform technologies and better broadband services.

#36 Dolce Vita on 04.25.21 at 3:14 pm

Since the 3rd Wave Covid + spawn front and centre news in Canada, did another 1 week snapshot, Apr 16 –> Apr 23.

Again, the young accounting for the majority of new infections, age in years, # of new infections:

≤19…12,696
20-29…11,328
30-39…9,880
40-49…8,982
50-59…7,894
60-69…4,765
70-79…2,016
80+…960
Total = 58,521

49 yrs or less = 73% of new infections. 29 yrs or less = 40%.

—————

HOSPITAL beds. Basically the 30-39 yr olds got the message, vacated the beds and let the 40-49 yr olds have them so they could fill them right back up again. Not much change in the Paleo #’s:

Apr 9-16
https://i.imgur.com/84VTiNP.png

Apr 16-23
https://i.imgur.com/zo8vCUI.png

—————

ICU beds. Same story. 30-39 yr olds vacate, 40-49 yr olds fill them right back up again. 60-79 yr olds up a bit.

Apr 9-16
https://i.imgur.com/pW22pIv.png

Apr 16-23
https://i.imgur.com/fhc6eDM.png

—————

Young bulk of new infections and they are getting sicker – more of them in hospital and ICU beds over the week. 30-39 yr olds playing musical chairs with the 40-49 yr olds for hospital and ICU beds.

VAXING making little or no headway so far with the PALEO numbers. If anything, a small uptick in ICU beds, no change in Hospital beds either.

—————

ZERO new vax deliveries yesterday, again. Means this past week instead of 1M doses projected from Manufacturer’s my count is about 52-54K were received. NOT good.

Minister Anand, Dr. Trudeau silence on Twitter about this even when asked numerous times by Plebeian me over the past week:

WTF is going on? Is the EU cutting off Canada?

Hopefully this week Canada gets its 1.7M projected doses + the 1M or so it did not get last week.

—————

June Garth.

It will be June.

#37 NSNG on 04.25.21 at 3:15 pm

The domino effect is well in play. My Canadian vitamin retailer was one of the cheapest in Canada many years ago when I started patronizing them. I am not loyal to the country, I am loyal to price(or let’s just say I am about as loyal to this country as it is to me). I was buying from the US but when the C$ tanked I decided to search Canada first for the product vital to a healthy life.

I found one. They were good and I stopped looking. Just this month I was looking for my regular supply and I was checking my old orders from just a couple of months ago. Many of the products I buy were close to 25% higher. This was shocking. This store has been expanding like crazy and I have seen the prices creep up but not like this. They also are mainly in the Toronto region and I order by mail (this is one reason I kept returning to them because getting vitamins from the US can sometimes be a pain).

I don’t know if housing prices leading to higher wage demands are part of the problem with this store but I did a simple search on the web and was able to find the things I was looking for at the lower price in the US.

When your product can be beaten by up to 25% with a simple web search from your most loyal customers, you are not going to be competitive for long. US stores are not hiring people living in million dollar shacks and most of their products are easily shipped to Canada.

Ottawa, we have a problem.

#38 the Jaguar on 04.25.21 at 3:17 pm

DELETED

#39 Cookie crumbles on 04.25.21 at 3:23 pm

Hey Garth and Dogs!

LL just informed us he is thinking of selling our long term rental. We are worried sick now. Any idea how long the back up is at The Tenant Board for processing evictions due to selling. The thought of having to get back into the insane market right now is horrifying.

______________________________________________________________

Not sure what the issue is. The landlord has every right to sell the property assuming you are no longer on a fixed term lease. He just has to cross his eyes and dot your tease. I’d suggest you start looking sooner than later. Unfortunate, I know … but can you blame them? What would you do if you were in there position? Aaah … now you understand.

#40 Humbled ◇ Broke on 04.25.21 at 3:23 pm

The really great thing about T2’s money printing schemes is that by the time they are done with their policy tinkering with your economic future, everybody is a billionaire, just like in Venezuela, Zimbabwe, and soon in Loonie Lanada. Just keep adding zeros, it will all work out swell.

The problem, however, is while we’re all rich from MMT, no one can eat because a cold, stale Timmies Coffee is two billion dollars. No one will own anything and you will ge happy … (that your dead).

Thanks T2 and Claus Slob

#41 ogdoad on 04.25.21 at 3:25 pm

Wusses beget wusses. Since our politicians are wusses so will wuss out the entire Canadian population. As long as there is an expectation of appreciation the buying will continue – thank HGTV, CTV, CBC and the fact that even the smartest of us think we’re entitled.

I’ve lived all over the world and after only a little while in the country their values would consistently become clear.

Garth – Quiz topic for you. Since (as far as I can tell) most readers of your blog are rich, homeowners, dog lovers, educated blah, blah, blah – what are their values? What defines a Canadian? What do they teach their kids to value(besides both parents should work and everyone deserves 4000sqft and stainless)..haha..

Anyway, little latakia and a tea sounds good ;)

Og

#42 Dolce Vita on 04.25.21 at 3:33 pm

Forgot to mention:

N’est panicker pas about onhand vax.

As of yesterday:

13,692,894 doses received.

11,977,685 into arms.

1,715,209 unused vax doses, somewhere in Canada, out there.

——————-

“Dire straits” Canada vaxing nose dives, AGAIN, on the weekend…same story since before Easter.

Friday doses into arms = 368,302 per Gov Canada.
Saturday doses = 164,484 per CTVs Vax tracker.

Boggles my mind.

Since people home from work on the weekend, the above numbers ought to be reversed.

#43 Michael on 04.25.21 at 3:34 pm

Honestly, I would love somebody open up the brain OS the guy or gal who paid 4 millions for such type of house. A scientific study would be very interesting.

#44 red falcon on 04.25.21 at 3:43 pm

Yes, the Sheeple will espouse the need for FOMO housing, and as a bonus covers the need for people to have a place to stay. But they clearly omit the costs involved with housing. Taxes, water, electricity… all these are inherent with keeping a house and so are part of the costs of keeping said house. In the end, they will be financially insufficent for other things, say… retirement or lack of schooling funds for their kids?
The myopic vision of Sheeple has so much tunnel vision, it transcends common sense now!

long live dividend growth stocks! eschew mutual funds, etf’s and their elk! bonzai bonzai bonzai!

#45 Sunny Daze on 04.25.21 at 3:56 pm

A federal deficit next March of $100B or more will tell the tale. Bond market might start to sniff it out sooner. Till then everyone will believe the projections.

#46 Faron on 04.25.21 at 4:04 pm

#21 Lead Paint on 04.25.21 at 2:17 pm

Absolutely. BillyBob too. But, there are massive differences in ideology that are important. And/or each thinks, for obvious reasons, that they are “right” or “superior” including myself. I reflect on this frequently.

#47 BIPOC on 04.25.21 at 4:05 pm

Hello,

This incident is being covered up by the school board and the Edmonton Police, by blaming the victim for being called the n-word while being brutally beaten up on Rosslyn school property:

https://edmonton.citynews.ca/video/2021/04/23/family-demands-justice-after-14-year-old-edmonton-boy-beaten-in-racist-attack/

Alberta is the Mississippi of Canada: A racist province. I wouldn’t be surprised if the Principal and the police are friends with the white racist attackers. Canadians are too sheep to call out racism for fear of being labelled a racist country.

The Edmonton Police department is looking for a lawsuit through nonfeasance and bias with the school bullies who attacked a young Black male with physical battery and using racial slurs.

With the inequality going on in Canada, the country might end up like South Africa where the Economic Freedom Fighters will be born to deal with white people.

#48 Peter pickle on 04.25.21 at 4:14 pm

3 bed bungalow in Peterborough on a busy street, listed for 450k, goes for 750k.

Think they have buyer’s remorse? Wonder what the 2nd highest bid was.

https://housesigma.com/app/en/listing/JRv53KDlGmqYVPW4/905-Hilliard-St-Peterborough-K9H5R8-X5189702

#49 ulsterman on 04.25.21 at 4:14 pm

Reading the blog today i can hear the words of Yogi Berra “Deja Vu All Over Again”. We’ve been saying this for nearly 20 years. It can’t go on! Wait til rates rise! You’d be a fool to buy at these prices! What if a global pandemic crushes the economy! OK we never predicted that last one but i guarantee if anyone HAD predicted Covid, we’d have been 100% certain it would have been the end of housing. But…it…wasn’t…yet again. The housing beat just marches on and on, with bears bellowing from the sidelines while others pay down mortgages at record pace. Sorry but as a housing bear being wrong for nigh on 20 years is just a painful life lesson in over analysis.

Good thing you’re not a financial advisor. The detection and mitigation of risk is how professional managers ensure their clients avoid being victims of their own myopia, greed, recency bias and ignorance. Thanks for the reminder. – Garth

#50 Ponzius Pilatus on 04.25.21 at 4:17 pm

#34 Damifino on 04.25.21 at 3:12 pm
#28 Ponzius Pilatus

Saw a clip the other day about a guy who strips out the old growth wood of beaters like this one. Showed how much stronger that wood is than new growth. Makes a killing re-selling it.
—————————————–

It works fine if you’re willing to replace your saw blade after every third cut. That stuff is tough as iron, doesn’t conform to modern dimensions and is usually chalk full of impossible-to-extract nails.
————
I’m sure you wouldn’t wanna use in a cookie cutter, particleboard town house.

#51 jimmy zhao on 04.25.21 at 4:27 pm

Who cares about some high fee mutual fund guy.
Don’t 90% of the mutual funds Underperform the market?

I imagine we care more about his opinion than yours. But feel free to post your CV, smart anon Internet guy. – Garth

#52 David Pylyp on 04.25.21 at 4:31 pm

Wow Garth….

No. 380 West 62nd Ave in Vancouver sold for $4.28 million in February of 2018. Uh-huh, you read that right. That’s a ‘4’. At the time the province’s assessed value for the 50-foot lot was $3.2 million. Eighteen months later the owner tried to move it for $4.3 million. No takers. Over time the asking price was reduced to $3.9 million. Still not deal. Now it’s for sale at $2.9 million. Oops.

Is that a short sale?

David Pylyp
SellinginToronto

#53 Doug t on 04.25.21 at 4:33 pm

Our feeble government won’t do anything because it knows that this country is fully reliant on the housing industry – but sadly this will end in tears and ruin for many

#54 T-Rev on 04.25.21 at 4:46 pm

Don’t worry about it. I just read the sample first chapter of The Deficit Myth on google books and it sounds like we can just print our way out of this. We’re all saved. If the house bubble bursts Justin can just fire up the printers and save us all. It’s worked so well for everyone else who’s tried it, right?

#55 Free Investment Advice - Worth Every Penny! on 04.25.21 at 4:56 pm

#1 Happy Renter now Terrified on 04.25.21 at 12:55 pm

Hey Garth and Dogs!

LL just informed us he is thinking of selling our long term rental. We are worried sick now. Any idea how long the back up is at The Tenant Board for processing evictions due to selling. The thought of having to get back into the insane market right now is horrifying.

_______________________________________

Couple of things:

1. Do NOT sign anything quickly!

The buyer, if moving in or renovating, will need to provide you about 4 months notice, in most provinces. Use this to your advantage in negotiations.

2. Consider the cost of your options – in places like 416/905, renting houses is pretty good right now, as well as condos, lots of vacant units.

3. Offer a negotiation to sign an early departure agreement, dependent on a payout of cash. At least 4 months worth of rent. This will allow the seller to close with no worries to the buyer, and take care of you for a while.

Keep in mind, if they close in the next few months, the buyer will miss the best renovation season if they have to wait months to get rid of you. The seller should be happy to pay you more to leave.

Rinse and repeat the next time.

#56 crowdedelevatorfartz on 04.25.21 at 4:59 pm

@#47 BIPOC
“…the school bullies who attacked a young Black male with physical battery and using racial slurs….”

++++

Apparently the millions of dollars spent per year on “Pink Shirt day” and “Anti Bullying” messaging has been wasted on the Lizard brained teenagers who for thousands of years enjoy gathering in packs to pick on a singular victim….OR we need billions of dollars to change the human thought process………”

Bullies will be bullies and if they toss in racial slurs to verbally assualt/insult the person while physically assaulting them…..
You cant say your surprised.

#57 SWL on 04.25.21 at 4:59 pm

Always a good read Garth, though depressing at times. The financial literacy of the masses and the leadership we have elected in this country is truly shameful. You most certainly have done your part in keeping people informed and providing us with the knowledge and tools needed to best navigate the mine trap that lies ahead. Not all, but most sure have painted themselves into a nasty little corner

#58 greaterfool on 04.25.21 at 5:05 pm

I think the burst will NOT be triggered by the government, or anyone intentionally. It will be some random or irrelevant (at the beginning) triggers

Everyone is vigilant now, we have pushed too far, Canadians have been too crazy and too stupid. They are in FOMO model now, when they are in FORS (Fear of Running Slow) mode (they will), avalanche starts. The going up has been insane, the going down will be the same, because it is the same group of people.

the problem is that, this will drag every Canadians down, regardless if you have been a greaterfool, or you have been embracing the bubble.

It is government’s responsibility to prevent this from happening. But our government? they couldn’t even prevent the double variant virus from entering into Canada. But it seems fine, no one is holding them accountable. Socks is still bragging everyday on Twitter how good a job he has done, and many are begging him to take over Ontario. Hopeless, Disappointed and Frustrated.

#59 LTRFTW on 04.25.21 at 5:10 pm

How could anyone have been so myopic and possessed as to pony up well over four mill?

The real question is ” Who would provide a mortgage for an overpriced house such as this ? ”

But the banks and credit unions are still providing money for expensive real estate.

What do they know that we don’t ?

How much risk is CMHC exposed to ?

CMHC = $1 million limit. – Garth

#60 45north on 04.25.21 at 5:14 pm

But experience tells us this much: bubbles do not deflate. They burst.

affordable housing is cheaper housing

let it burst

#61 Dolce Vita on 04.25.21 at 5:20 pm

I hate to say it but Gov Canada closing travel to India is a good thing.

I was just watching NDTV on YouTube and it is scary what is happening there. They have another mutation now and with little sequencing, little information.

Apr 20, NDTV, FYI show…

The most chilling expert opinion was from Prof Madhukur Pai, an Epidemiologist, Canada Research Chair…CHILLING have a watch, video url at a current time:

https://youtu.be/5z3kYRYWaOM?t=229

Prof Pai is as common sense as they come. He believes the Indian and all their all NEW variant escapes antibodies, whether from a prior infection or vaccine (e.g., AZ). Still thinks vax protects from death, but not certain.

It would appear Western MSM has GROTESQUELY underreported what is really going on there.

And that from 5 days ago.

——————–

2021 is going to be a long year.

#62 Free Investment Advice - Worth Every Penny! on 04.25.21 at 5:26 pm

#1 Happy Renter now Terrified on 04.25.21 at 12:55 pm

Hey Garth and Dogs!

LL just informed us he is thinking of selling our long term rental. We are worried sick now. Any idea how long the back up is at The Tenant Board for processing evictions due to selling. The thought of having to get back into the insane market right now is horrifying.

_________________________________________

Don’t forget to do some research on previous bought/sold prices for the property. A LL trying to cash in on $500K of gains may easily be willing to spend 10% of that on you to make sure the place gets sold in good times.

Also, hiring a lawyer will be cheap for you to demonstrate you are serious. Require that the LL provide positive references, in writing, to future landlords, to help you get your next place.

Renters have rights. And as Garth has said, so often, renting is a very intelligent choice. Don’t sell yourself short.

#63 Devil Anse on 04.25.21 at 5:26 pm

By the way, it’s worth recalling the last time a real estate bubble turned negative. What followed was a long period of stagnation. In the GTA it took seventeen years for the average house price to restore.

—————————-

Was this in the late eighties and nineties? If so, I was paying attention to other things at the time, but does anyone know the exact years this happened, and how equity markets performed over the same period?

#64 the view out west on 04.25.21 at 5:37 pm

Any Canadian political party that allows the housing market to crash knows that it will be out in the political wilderness for the next generation. Therefore there will not be a housing market crash. The government will change the rules, or pressure Canadian banks to change their rules in order to preserve the status quo

#65 wallflower on 04.25.21 at 5:42 pm

Dogs deserve pets

#66 Steven Rowlandson on 04.25.21 at 5:47 pm

“No. 380 West 62nd Ave in Vancouver sold for $4.28 million in February of 2018. Uh-huh, you read that right. That’s a ‘4’. At the time the province’s assessed value for the 50-foot lot was $3.2 million. Eighteen months later the owner tried to move it for $4.3 million. No takers. Over time the asking price was reduced to $3.9 million. Still not deal. Now it’s for sale at $2.9 million. Oops.”

A sane bid for the property would be $42,800.00 and it would be a starter home for someone earning market wage rates with the price being within the 3 years pay rule. Remember folks it is not an investment. It is a place to live and raise a family.

#67 wallflower on 04.25.21 at 5:56 pm

#31 Justin S on 04.25.21 at 3:02 pm
and #30

Gonna be having to refer to you as Another Justin from here on in.

#68 WTF on 04.25.21 at 5:56 pm

#1 Happy Renter” Hey Garth and Dogs!LL just informed us he is thinking of selling our long term rental. We are worried sick now. Any idea how long the back up is at The Tenant Board for processing evictions due to selling. The thought of having to get back into the insane market right now is horrifying.”
————————————————————
In the same boat, been here 8 yrs, Owner wants to sell (I would too!)the Realtor is having showings here in DT Van. Been looking and there is quite a bit of inventory out there. Here in BC 60 days notice After completion (if the buyer occupies you move, if not you continue to rent with existing amount). One nice stipulation is 30 of the 60 days is rent free! Which allows some overlap when moving, if required.

We are being very accommodating with access and keeping the place presentable, don’t need any karmic blowback and its the right thing to do. We may be able to stay but are kinda excited to move on if need be.

Good Luck!

#69 JEFF13 on 04.25.21 at 5:57 pm

There are good reasons for Wolf to be worried about Canada. Crazy real estate price is only one of them. Canada has a massive amount of total debt (household, corporate and government)
https://stats.bis.org/statx/srs/table/f1.1

For Q1 2021, Canada is getting close to around 400% total debt on GPD. I am not sure how it can end well…

#70 Ponzius Pilatus on 04.25.21 at 5:57 pm

#98 Sail Away on 04.25.21 at 9:52 am
An excellent use of 30 minutes is reading Charlie Munger:

https://fs.blog/great-talks/academic-economics-charlie-munger/
——————-
Well, I gave it a try. Everyone who mentions “The Tragedy of the Commons” gets my attention.
The guy is obviously smart. And witty.
But following him?
Personally, I don’t follow humans. I follow ideas.
And, as I do with my investments, I also diversify my reading portfolio.             Therefore, may I suggest that people read or watch the play “The ThreePenny Opera” by German writer Bertold Brecht.
For music lovers, it includes “Mack the Knife” and “Alabama Song”
But I’m afraid, it will take a little longer than 30 minutes.

#71 Steven Rowlandson on 04.25.21 at 6:00 pm

RE:30
“If Canada isn’t worthy of having the highest real estate prices in the world, which county is?”

You would maintain high real estate prices and mouse utopia experiment conditions in Canada for the sake of profit? That is evil! Set aside all that you have and get work part or fulltime at or near minimum wage and start from scratch and tell us how far you get.

#72 under the radar on 04.25.21 at 6:05 pm

“Meanwhile, as reported here, a rural home outside Ottawa recently went for $1 million more than the listed price ”

– That property was listed very under market and sold for what it was worth . It had acreage and a lot of waterfront , I think 1500 ft.
Pretty unique to have acreage and that much waterfront, a nice home , and not in the middle of nowhere.

#73 Dan in Nanaimo on 04.25.21 at 6:06 pm

The mania we are experiencing is amplifying social cognitive dissonance to an unprecedented level. A potential for this cycle to end in financial disarray for many folks is very real. Anticlimactic outcome probabilities are high.

Make the time to appreciate and enjoy nature. Turn on, tune in, and drop out.

Remain mentally, physically, and financially balanced and be ready for anything.

#74 Papabear on 04.25.21 at 6:07 pm

Good post today, Garth, thank you for that.

For this week, it might be interesting to see some comparisons with the Canadian housing market with some international ones, like the bubbles you mentioned of Spain, Ireland and Greece. It might be nice to give the audience some insight into how things unfurled (or are currently unfurling) in the rest of the world.

If we are due for another 80s stagnation of a decade+ of stagnant house prices, it doesn’t give me a lot of hope for young people to afford a home even ten years from now. But it might be interesting to see how the smaller cities in Canada could grow and benefit from the new surges in young people needing a place to move to.

#75 Sail Away on 04.25.21 at 6:17 pm

#21 Lead Paint on 04.25.21 at 2:17 pm
Sail Away and Faron:

Have you ever thought that the reason you can’t stand each other is that you are more similar than dissimilar?

———–

What makes you think we don’t get along?

My main goal is to benevolently offer experience, verifiable investing strategy and a logical roadmap to a successful life. Leading the horse…

#76 Lee on 04.25.21 at 6:29 pm

Is it just me, or is Bitcoin gaining credibility?

#77 Habitt on 04.25.21 at 6:30 pm

WFH going nowhere. Too many pluses for all the players.

#78 Flop... on 04.25.21 at 6:43 pm

Just got back from getting vaccinated at Canada Place.

One of Mrs Flops work colleagues went down yesterday and received a Pfizer jab, that was my wife’s preference but it was not to be.

We were given Moderna.

I didn’t mind either way.

I read the fine print on the empty vial, for the most important information.

Moderna is rated for 15,000 blog posts, so I should be good to go for another 7 or 8 years.

Look out, Garth…

M46BC

#79 Cow Man on 04.25.21 at 6:53 pm

Sir Garth: While you correctly state that CMHC has a $1 million limit for housing, Farm Credit Corporation, the Federally backed farm loan originator will lend $200 million.

“The program’s maximum guaranteed loan limit is also being permanently increased from $120 million to $200 million to allow extended loan repayment deadlines and accommodate an increase in lending capacity”.Feb. 11, 2021

#80 JM on 04.25.21 at 6:56 pm

With all due respect Garth, you sound like the David Rosenberg of real estate. All assets are going up because of the money printing presses. You have inflation of all assets classes that are trading at multiples at all time highs and yet you have a hard time believing that real estate goes up.

Nope. Not the cause. If it were, incomes would be inflating. They are not. – Garth

#81 Nonplused on 04.25.21 at 6:59 pm

I prefer Brian’s chart

http://www.chpc.biz/6-canadian-metros.html

to the one shown above “Average Canadian Home Prices (1980-2021) because there really isn’t a “Canadian Real Estate” market. About the only thing the Calgary market shares in common with either Toronto or Vancouver is interest rates. Prices in Calgary and Edmonton have been relatively stable although up a bit since 2007, although 2006 was a blockbuster year. That was the year everyone cashed in their oil & gas stock options. Money was flowing in the streets like beer during Stampede. What’s happening recently in Ottawa and Montreal appears a little odd though.

Canada in many ways doesn’t make a very good country. There are striking differences in the interests and realities between the provinces, which I guess one would expect given how vast the land is. Mind you the US has the same problems, but their constitution identifies each “state” to a higher level of autonomy than the Canadian provinces have. Alberta, for example, does not have its’ own national guard or police force. And the people of Alberta have more in common politically and culturally with the people of Montana than they do of say Quebec.

If you ignore the lines on the map the US & Canada look more like this:

http://dgallowaycanada.weebly.com/uploads/1/6/9/4/16943656/5713567_orig.gif

I’ve seen a much better version of this map but I can’t seem to locate it just now.

About the only things that unites Canada as a country from coast to coast is 2 rail lines and a love of hockey. There is a highway too but most of it is 2 lanes and people often prefer to go through the states because the roads are better and the gas cheaper.

But it makes some sense because geography is everything. Ontario and Quebec are much more integrated with the North Eastern US economies than they are with Alberta for obvious reasons. The Great Lakes, St. Lawrence, and the Mississippi river (and of course the ocean) gave that area a natural historic trade advantage. Until the railway went through, Alberta was just too far away to matter much to Ontario. It still is.

#82 Nonplused on 04.25.21 at 7:04 pm

“Still overweight. – Garth”

That’s what my doctor keeps saying….

#83 Pasha on 04.25.21 at 7:05 pm

For $4.28 million, I expect to live on Tracy Island.

#84 Guelph Guru on 04.25.21 at 7:05 pm

Beautiful graph Garth. It seems to confirm the realtor’s story that prices always go up in the long term.
As was said on this blog earlier a bubble burst may cause a 15% decline, but if the recent buyer can stomach that for some time e.g. 17 years, you are set for the next bull run.
I personally think there would be a 40+% price adjustment instead of 15% in areas like GTA, when we see 5% Mtg rates. Let’s see.
On selling Canadian stocks, don’t think oil and gas(ZEO) or resource etfs (XBM) or prefs (ZPR) need to be excited from your portfolio. RE may burn, but these guys would continue to earn and make money.

#85 Phylis on 04.25.21 at 7:06 pm

#54 T-Rev on 04.25.21 at 4:46 pm
Don’t worry about it. I just read the sample first chapter of The Deficit Myth on google books and it sounds like we can just print our way out of this. We’re all saved. If the house bubble bursts Justin can just fire up the printers and save us all. It’s worked so well for everyone else who’s tried it, right?
Xxxxxx
Can the printer go fast enough so that they no longer need to collect taxes? That would be swell.

#86 Ponzius Pilatus on 04.25.21 at 7:09 pm

#21 Lead Paint on 04.25.21 at 2:17 pm
Sail Away and Faron:

Have you ever thought that the reason you can’t stand each other is that you are more similar than dissimilar?

Your egos and insecurities actually overlap quite closely?

In a group you overlap one another’s identities?

Food for thought.
———————
Wow, first free investment advise.
Now free psychiatric assessments.

#87 Northshore guy on 04.25.21 at 7:14 pm

No. 380 West 62nd Ave in Vancouver sold for $4.28 million in February of 2018. Uh-huh, you read that right. That’s a ‘4’. At the time the province’s assessed value for the 50-foot lot was $3.2 million. Eighteen months later the owner tried to move it for $4.3 million. No takers. Over time the asking price was reduced to $3.9 million. Still not deal. Now it’s for sale at $2.9 million. Oops.

Added to my list, it will sell quickly, that asking price is a screaming BID ME UP!!!, most likely around 4m. It probably won’t get 4.3 but in these market anything can happen.

I will update as soon as I get notification.

#88 Ed on 04.25.21 at 7:16 pm

Saw a clip the other day about a guy who strips out the old growth wood of beaters like this one.
Showed how much stronger that wood is than new growth.
Makes a killing re-selling it.
I say, remove the wood from the beater and then nuke it.
She’s uglier than my exwife.

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

The clip was BS…modern mills put each piece of lumber thru a MSR machine (machine stress rating) before going thru the planer.
All stronger wood ends up in trusses,glulams & Japan…you can order the strong ratings if you like but no point in western platform framed houses…#2&btr is just fine.

#89 Nonplused on 04.25.21 at 7:20 pm

#17 Travelbug on 04.25.21 at 1:53 pm
I don’t write here often but today, I have to get something off my chest and perhaps find other bloggers who ask the same question: why has our government not taken measures to reign in the real estate market to keep this part of the economy at a sustainable and healthy level within the GDP years ago? What is the point of Canadians selling houses to each other at ever inflating prices? Wouldn’t it make more sense to create jobs in manufacturing, hi-tech, green industries, public infrastructure etc., have incentives to attract investors in such industries, thus increasing real productivity and worldwide competitiveness? For years now, our government has pushed the agenda of making it easier especially for first time home buyers and where did this
get us? I am so fed up. Who to vote for in the next election?

—————————————–

Probably the first mistake we made was to assume the government could or should do anything about it. The CMHC was probably a terrible idea and kicked things off. The BOC could probably have raised rates but they have to stay competitive with the US Fed. The correct reaction would have been personal responsibility, ie. people not paying more. But “personal responsibility” is now on the list of phrases that will get you banned on Facebook and Twitter.

So we brought in the CMHC to much fanfare because it would make housing “more affordable”. All it did was crank up the cost and size of houses. Just go do a drive sometime from the inner city to the suburbs and look at what’s happened to the size of an original house (don’t look at infills). In 1945 a typical house was 800 sqft. Now the garage is that big. And you can see the progression the further out you drive.

#90 Phil on 04.25.21 at 7:25 pm

Garth, can we have a moritorium on the word “scary” ?
Although we live in uncertain times, the incessant use of what is basically a childs’ expression is becoming quite annoying. There has to be at least a couple of synonyms that are serviceable.

#91 Squire on 04.25.21 at 7:26 pm

Think Scotiabank…. We’re more pooched than you think…

#92 Nonplused on 04.25.21 at 7:39 pm

#35 Brian Ripley on 04.25.21 at 3:12 pm

“Anyone who has had the experience of “education from home” this past year knows, it is clear that a lot more work is still required to get home schooling more efficient and accessible, not only is access to better technology required, but much better human interaction is required as well.”

———————————————

My main takeaway from the “education from home” (EFH?) thing is that the teachers grossly underestimated how much copying and “group work” was going on in the classroom. The amount of work being assigned for EFH for a single student to complete on their own is, IMHO, unmanageable.

#93 Lead Paint on 04.25.21 at 7:43 pm

#78 Flop… on 04.25.21 at 6:43 pm

How’d you manage that Flop? I thought our age bracket was getting only AZ in BC?

M48BC

#94 Lead Paint on 04.25.21 at 7:52 pm

#86 Ponzius Pilatus on 04.25.21 at 7:09 pm
#21 Lead Paint on 04.25.21 at 2:17 pm
Sail Away and Faron:

———————
Wow, first free investment advise.
Now free psychiatric assessments.
———————

You’re up next. So…. tell us about your childhood…

#95 Nonplused on 04.25.21 at 7:58 pm

#107 NoName on 04.25.21 at 11:52 am
#99 Oakville Rocks! on 04.25.21 at 10:06 am
#82 Nonplused

Battery that wont recharge.

If its NiCd battery and its not taking any charge while plugged in, Give ‘er small jolt with much more voltage, but limit the current, that works most of the times.

So if 12v bat i would try with 18-20 and limit current to 1,5-3A for a sec or two, than put it in charger.

https://www.youtube.com/watch?v=2FORZQtnNz8&t=79s

——————————–

It’s an 18 volt NiCd setup, so maybe I need 30 volts? I don’t happen to have such a voltage supply. In any case the drill and batteries are at least 15 years old and my new lithium powered drill was 50% off.

And it’s not that the old batteries won’t take a charge, they just won’t hold it. One of the batteries is useless, but the other one can still do some work if it is fresh off the charger. But I think the new set was cheaper than trying to replace the old NiCd cells. It was 50% off, and you mostly pay for the batteries.

#96 Flop... on 04.25.21 at 8:06 pm

People seem interested enough so I will give them a bit more information on that property in Garth’s post that ran in the Georgia Straight during the week.

I don’t need to be told these things, as I live it daily.

The project I am currently working on was a former Pink Snow case where the people who land-banked the property came back a couple of years later and to probably over a million dollar loss after expenses.

As I look from the top balcony, you see nothing but a picture perfect setting.

If you stop looking at the water and the mountains you can see danger lurking underneath.

This is the big leagues, 5 million just for the block of land, 20 million gets you waterfront.

I’m thinking of making musical about all this.

West Side Story…

M46BC

——————————–
“Vancouver real estate: bought for $4.2 million in 2018, Marpole house now selling at a loss, for $2.9 million

Not everyone gets to make money in the hot real-estate market of Vancouver.

Some risk losing their shirt.

Let’s look at 380 West 62nd Avenue, a Marpole area property listed this week.

B.C. Assessment record shows that the single-family home on a 50-foot lot was purchased on February 11, 2018 for $4,280,000.

In that year, the provincial assessment agency pegged the value of the two-storey property located east of Cambie Street at $3,130,000.

On August 6, 2019, the same property came on the market, when RE/MAX Real Estate Services listed it for $4,380,000.

No buyer came forward, and so the listing terminated on September 19 of the same year.

Another listing agency, Sutton Group-West Coast Realty, tried to sell the four-bedroom, two-bath home less than a week later.

On September 25, 2019, the Marpole home in front of Winona Park returned on the market with a price of $4,280,000.

After more than a year, the listing expired on November 1, 2020. By that time, the price has been reduced to $3,980,000.

Now it’s the turn of RE/MAX Real Estate Services again to try and sell the home.

On April 21 this year, the property was listed for $2,990,000.

Note that the new selling price is also below the 2021 assessed value of the residence.

As of July 1, 2020, the B.C. Assessment valuation of 380 West 62nd Avenue was $3,130,000.

It’s the same assessment as 2018 when the property was bought for $4,280,000.

The property’s value increased to at least $3.7 million in 2019, and dropped to over $3.6 million in 2020.

The listing and history of the 380 West 62nd Avenue were tracked by real-estate sites Redfin and Zealty.ca.

Vancouver realtor David Hutchinson took note of the listing on a Twitter post.

The Straight sought comment from the Sutton Group-West Coast Realty property agent, and Hutchinson said this example speaks about the “blessing and the curse of the Cambie Corridor”.

“A lot of people made money. There was a lot of investment and speculation. And, of course, some people lost money,” Hutchinson said.

“What the city got in return was a lot of overpriced housing,” Hutchinson added.

But there may be hope that 380 West 62nd Avenue will get a good price.

The listing notes that it is an “excellent holding property for future redevelopment “.

It mentions the city’s community plan for Marpole, which allows apartment buildings of up to four storeys on the site.

The house is currently tenanted.”

#97 Nonplused on 04.25.21 at 8:13 pm

#99 Oakville Rocks! on 04.25.21 at 10:06 am
#82 Nonplused
For all the reasons you list I also try to never pay full price for tools (or kitchen gadgets, gardening supplies etc).

One place I have been finding specialty tools at a huge discount is a site called MAXSOLD.

————————————–

I’ll check that out. But really the drill and batteries are 15+ years old. If I wanted to salvage the drill at this point I think I need new cells. But my new drill was 50% off complete with 2 lithium batteries! Same Ah ratting as the old NiCd’s but half the size and weight.

I’m down on battery powered devices, except for the drill of course because it is so darn handy, mostly for screws. For example, I live on 2 acres so I bought a pretty big line snipper. With electric start. Cool. Except now those batteries are cooked too but it starts right up with the pull string. So the snipper still works great, but I have to carry around a dead battery and thus useless starter motor. It would have been smarter to save a little money and weight and got a pull start only. When I got a leaf blower, I did not make the same mistake, and it starts right up with one pull too.

The garden tractor, on the other hand, needs a new battery every three years. There is no pull rope. The motorcycles too, as even down to the 250 class kick starters have largely disappeared in favor of electric start. I can get a kick starter for my 250, but it is $700 and I have to remove the side of the engine to install it. The 1300 of course has no option for a kick start.

Batteries suck.

#98 Two-thirds on 04.25.21 at 8:24 pm

Speculation about the future aside, the chart shows a 40-year upward trend, with a “lost decade” for good measure, but no significant drops.

So for many bears waiting for the long-awaited “correction”, it looks the best that can be hoped for is a decade-long stagnation, followed by a resumption of the upward long-term trend in the 2030s…

Of course past performance is not guarantee of future results. But based on the chart, what other lesson can be drawn?

At least 3 Governors of BoC have expressed their concerns about the market, but failed to act. Carney, Poloz, and now Macklem, have provided warnings ad naseum while the market boils. How many more Governors will it take before one of them acts? Can they even make a difference if the bond market dictates mortgage rates and not them?

What is the predicted impact of MMT on housing, by the way? Particularly, a market dominated by hobbits, of the most hardcore inward-looking variety?

That is Canadian real estate. Hobbits blissfully unaware of the perils and struggles of the world and the menace to their Shire, trading with each other, drinking their beer, smoking their leaf, and giving the evil eye to anyone who does not do likewise.

As The Jaguar says: Mercy.

Oh, Canada!

:(

#99 Nonplused on 04.25.21 at 8:28 pm

#90 Willianm tells it on 04.25.21 at 7:14 am
#73 Nonplused on 04.24.21 at 7:29 pm

Sidenote: Mr Turner, you clearly are waging an uphill battle here. I don’t know how you persevere. I would consider it a lost cause.

————————————–

I respectfully disagree. Mr. Turner is fighting a “he who has an ear, let him hear” or “when the student is ready, the teacher arrives” type battle. My estimation is that he has helped so many people, even if you count just the ones who have made an appearance here in the steerage section, that he deserves the order of Canada.

Contrary to popular opinion, we don’t all have to be in the same boat. The people who went to the life boats did significantly better on average than the folks that stayed on the Titanic. At least that’s what I got from the otherwise sappy movie.

Garth, Ryan, Doug, and Sinan are doing a great service, for free, and to all. But only those who are ready will be able to take up the advice. Maybe it is like a ski lift operator; he can get you to the top of the mountain, but only if you pole your ass over to the lift first.

#100 Flop... on 04.25.21 at 8:29 pm

#93 Lead Paint on 04.25.21 at 7:43 pm
#78 Flop… on 04.25.21 at 6:43 pm

How’d you manage that Flop? I thought our age bracket was getting only AZ in BC?

M48BC

————————————————————-

Hey Leady, I will try to help you out the best I can.

A colleague of Mrs Flop had an enquiry and called the COVID hotline, got talking to the agent and they started discussing things and the agent revealed that Canada Place is Pfizer-Moderna site.

We were already booked in, but I my wife wasn’t crazy about getting the AZ jab anyway, so things worked out.

Only registered a week a half ago, got notified that we could book an appointment at a place of convenience early this week, and now it is done.

No line-up, smooth operation, and for once I had something medical done that didn’t involve me using crutches and hobbling around for a few months.

Of course, I could always fall off the scaffolding at work tomorrow…

M46BC

#101 Jessica on 04.25.21 at 8:38 pm

Stop being so negative.

Canada is a great country, with vast resources, water, air quality and a stable government.

Global citizens pay a premium to live in this great nation we call Canada.

Just the other day, a couple from Russia did not mind paying over $500,000 over asking for a bungalow in Scarborough, because they believe that Canada is a safe country for them.

I’ve met countless couples, businessmen and politicians from emerging economies willing to pay over $1M for a condo in Toronto because of our great reputation as a country.

Don’t make us look bad mister.

#102 Jessica on 04.25.21 at 8:40 pm

Poster #47 is making our great nation look bad. Delete the post.

The young teenager shouldn’t have taunted those schoolmates.

Canada is a great country. We have the best healthcare, education and rule of law in the world.

#103 KaleyCat on 04.25.21 at 8:48 pm

#22 Ok, Doomer

Thanks for the chuckle. We have a lot of Older Mills in our family. There’s the one that had to be told he couldn’t take the swimming pool with him when he moved out. Now has a full time job, a wife, a baby and a mortgage of his own. Then there’s the ones that debated whether people should even be allowed to earn over $100k or $140k per year. They now gross $140k/yr.

And then there’s my favourite: the one that assured me than any earned income over $100K should be 100% taxes. He 30 now, earning over $100K and phoned this week to discuss how to reduce his tax burden.

Yes, they do grow up – hopefully before you run out of patience.

#104 crossbordershopper on 04.25.21 at 9:04 pm

the southern ontario real estate market is a controlled cartel, of govt assessment values, people borrowing against increase property values to buy more properties, cleaning friends money from oversees. (yes buyers are local, but there money isnt). How else do you explain a guy who makes 24 bucks an hour is ok with bidding 200 grand above asking for a house. You think he has to go to work for that money every day.
well anyway, everyone directly and indirectly works for the real estate industry, furniture, car sellers, food, lodging everything is a direct relationship to wealth creation from real estate ownership, 100%, canadians are not being made wealthy by small business ownership or there job, its simply tax free principal residence. Yes we all shake our heads at the prices of partical board homes, but it is what it is, always has been.
drive to michigan get a nice house for 300K brand new, nicer than most new builds at 1million plus being built in southern ontario anyday. dont believe me, do your own research, real hard wood flooring, granite countertops, bigger, waynescotting ceiling textured. etc. etc.

#105 Adam on 04.25.21 at 9:06 pm

To be honest I could say the stock market is as bad as housing.SNP up 100% from just a year ago? Astronomical P/E ratios? Tesla valued at 500 billion+ with a book value of only $15? Apple 2 trillion dollar valuation when they only have 200 billion in cash? How do you want to look at it. Corp debt is as bad if not worse than personal debt. Just the idea of raising rates drops the market quickly. It’s the same thing. Except you can actually live in a house and rent it out. If business goes bad it’s all gone and ur at the mercy of a CEO who doesn’t have a stake in the company a lot of time. We’re you ever griping on Corp debt levels and saying there should be no help for companies who spent all their cash on share buy backs and no rainy day fund? Cause they are worse. In that situation they literally make money disappear over night when it could be in a bank account or god forbid pay a dividend.

#106 Lobster Man on 04.25.21 at 9:10 pm

328 W62 Ave. Vancouver/Marpole
and Flop #96

Flop,

You are absolutely correct. It was all due to speculations based on City of Vancouver’s Cambie Corridor Densification Plan.

There were properties a bit larger (slightly over 8000 sq. ft. each) near 45th Ave and Cambie that sold for well over 5 million/lot in 2017. The assembled properties of three lots are now in the process of Permit Application for Townhouses (F.S.R. 1.2) for a total of 27 units. It is very near the huge Oakridge Redevelopment.

You can estimate what those townhouse units are going to be selling for in about 3 years. And it would be easy to work out if the >3×5 million land purchase-price was a good deal or not.

Of course the question is: will the townhouses sell at the desired list prices?

Marpole is not the same as Oakridge, but they do have the Marine Gateway right next door.

LM

#107 Calgary on 04.25.21 at 9:17 pm

#47 BIPOC

Why the attackers were not identified? If guilty, should be severely punished.

#108 mark on 04.25.21 at 9:28 pm

Always been fascinated by heavy home country bias, when for most places outside the US, it’s a tiny part of a global allocation.

#109 Doug t on 04.25.21 at 9:31 pm

#73 Dan

AMEN BROTHER- been preaching this for awhile

#110 Lead Paint on 04.25.21 at 9:32 pm

#100 Flop… on 04.25.21 at 8:29 pm

Flopster you da man!

#111 fishman on 04.25.21 at 9:40 pm

Just finished the spring shipyard routine. Never seen it so busy this time of year. Sporties stuffed everywhere. When I picked up zincs & Cu paint the wholesaler told me never seen anything like it. Supplies running low & out. I had to pull some chits to get hauled & materials that were needed. Sorry Faron, I’m just one of those guys that always goes to the front of the line . Must be a lot of money out there. Not cheap taking a ship to sea. Sell the house & move onto the boat? OK as long as your prepared to burn $400/month of diesel fuel in the stove to keep yourself warm & toasty.

#112 David Prokop on 04.25.21 at 10:15 pm

My Hong Kong born wife still thinks Toronto is cheap.
We have lots of room to go up to catch up with Vancouver.
She’s been right before and I should’ve listened to her

#113 Diversified in Mississauga on 04.25.21 at 10:21 pm

Great post Garth, thanks! (MSU).
I am one of those buyers who has quit looking for a place outside of Ottawa.
Retired and living in Mississauga; can pay cash for a nice place to be closer to family but will not compete with 10 or 20 other lunatics for a house.
Just not worth it.
Portfolio is doing it’s job in the interim.

#114 Albertaguy in AB on 04.25.21 at 10:22 pm

For Brian Ripley and all the other chartists…

Greater Phoenix Monthly Average Selling Price per sqft

…the makings of a blow off top?

https://imgur.com/rVnqajg

#115 Fortune500 on 04.25.21 at 10:40 pm

They don’t burst or deflate if backstopped by the Canadian Fed put. Which they are.

#116 Tudval on 04.25.21 at 11:10 pm

The 80’s crash and stagnation if often misrepresented and present article makes no exception. The average detached house in Toronto only took about 20% hit (just as in 2017) and recouped its value in about 8-10 years. No biggie, even if you had bought at the high – that would only span a few months in ’89. If you bought in ’88 or 91 you’d be totally fine.

Worse hit were the condos (50-60%) , mostly due to huge oversupply as investors bailed out all at once due to new capital gains tax. See how the following decade of under-investment caused a supply crunch 15 years later. Government intervention backfired spectacularly. Not likely they will repeat that mistake. The flight of capital was also accentuated by the constitutional crisis in Canada, but mostly by the newly liberated markets in the former communist states. Predictable and also not likely to happening any time soon.

I’m not saying it’s all clear and there’s no risk. The huge deficits are worrisome, but everybody is in the same boat, Canada is not at a competitive disadvantage in the same way as it was in the ’90s.

Don’t rewrite history. Toronto average prices peaked in 1989 and did not trough until 1996. The decline was 28%, not counting inflation. The average price did not recover until 2002, 13 years after the previous peak. Factoring in inflation (about 3%) buyers in 1989 were out of the money for 17 years. – Garth

#117 Tony on 04.26.21 at 12:19 am

Hi Garth, how house market crash will influence Canadian Banks stocks?

#118 Mad World on 04.26.21 at 12:24 am

What is this?

https://www.theglobeandmail.com/canada/article-in-new-brunswick-experts-try-to-figure-out-why-dozens-have-been/

My goodness.

#119 KVC on 04.26.21 at 1:07 am

#4 Cheese

Why put it in VCN when China got away with the biggest con, crime, etc whatever anyone calls it. They are booming dump everything into XCH.

*Note: not serious about the investment aspect.

#120 espressobob on 04.26.21 at 1:59 am

The TSX composite is roughly 3 to 4% of the world economy. The only reason I can think of being overweight is for tax advantage in a non registered account.

It’s interesting why Canadians somehow feel like we’re the center of the investing universe?

Still trying to figure.

#121 Ostrich in Sand on 04.26.21 at 2:01 am

https://www.theguardian.com/world/2020/apr/11/coronavirus-who-will-be-winners-and-losers-in-new-world-order

https://www.theguardian.com/world/2020/mar/09/the-new-normal-chinas-excessive-coronavirus-public-monitoring-could-be-here-to-stay

#122 KVC on 04.26.21 at 2:06 am

#41 ogdoad

So yeah people are asking a lot? My home town. As per CBC:

https://www.realtor.ca/real-estate/23110028/8325-corral-road-prince-george

That house was 1966 build according to BC assessment and valued at only $304K.

https://www.cbc.ca/news/canada/british-columbia/prince-george-real-estate-1.5991433

Seems like greed is good or will it catch up to us all…

#123 Zen Investor on 04.26.21 at 2:39 am

A currency trades on demand for that currency to exchange for goods and services , including market risk. No one gives a flattened turd for the noise kicked up by real estate buyers. Mr Wolf has joined a long list of so called ” financial advisors” with a long history of low returns.

If Mr Wolf had held CDN cash hedged against USD this year he would have made 10% doing nothing. Our largest companies are interlisted in the Us, UK, Germany, France and Australia. Canada is really a branch plant occupied by tax management experts. The indexes may well do nothing, but individual companies with a majority of profits made in US and offshore holdings are ripping. Figure it out. Mr Wolf obviously hasn’t. Buy stocks not indexes.

#124 crowdedelevatorfartz on 04.26.21 at 8:32 am

@#107 Calgary
“Why the attackers were not identified? If guilty, should be severely punished.”

+++

You ARE kidding right?

Those kids were maybe 12-14 years old.
This is Canada.

1.They cannot be publicly identified by anyone.
2. They will not go to jail.
3.Their parents will not incur any legal or financial penalty.
4. They may be talked to sternly by a school official.
5. They will promise not to do it again.
6. They will do it again.

#125 TurnerNation on 04.26.21 at 8:36 am

Do you recall where you were when the Berlin Wall fell?

Do you recall where you were when the new virtual ‘Berlin walls’ were errected in the Former First World Countries -such as Kanada, Australia, England? Whereby, 400 days into the New System these residents are banned from leaving the country or even their own local prefecture/’Health District [sic]?

This is the New Green Deal rollout. The toilet paper shortage was the first test/operation to get you into the shortage mode. Governments just now banned sale of ‘non essential’ items. Get used to it
This global control over our Feeding, Breeding and Travel/Movements has been planned for decades, now rolled out as of that cold winter week in March ’20, when the Old System was shut down.

–Kanada is being dismantled before our eyes. It’s a system of rewards and punishments. Being out in public is very dangerous these days. Just 4 more weeks! Guys we need more numbers to keep this going:

.If you are out in public in the central zone, you have likely been to a low-risk exposure site and should be tested. (Nova Scotia, Canada) (cbc.ca)

.We need to buy more time’: P.E.I. tightens border for at least next 4 weeks (Canada) (cbc.ca)

—- The crime wave continues. Within 5 min of me are two homeless/drop-in shelters. The same filthy sodden crew hang out front as always. Smoking, drinking, begging, and god knows what else. They are immune to everything it seems including the fines. But your fun is now illegal in Kanada. Just work Comrades.

.Halifax police respond to 17 calls about social gatherings, ticket 2 (cbc.ca).

……..

— Now I’m not saying that the CV is being used to implement a New World Order, what I’m saying is…oh I forget. Just for 2 weeks folks!

.Laos locks down its capital and closes its borders over COVID-19… prohibits all Vientiane residents from leaving their homes except for essential food shopping, hospital visits and other authorised tasks. The restrictions last until May 5.

.Coronavirus: ‘short sharp’ lockdown from April 26 to May 9 (Cyprus) (cyprus-mail.com)

.Merkel Urges Germans to Accept ‘Tough’ Virus Restrictions (usnews.com

#126 IHCTD9 on 04.26.21 at 9:35 am

Well, with any luck we are getting very close to some kind of RE pullback. If not, I suppose the average SFD dump in big Canadian cities will crest 2 Million (LMAO!). We’re firmly in stupidville at this point, and if it’s just going to climb like Dutch Tulips, it’s time for the kids to look for a country where folks haven’t lost their freaking minds.

Canadians have lost it – and the Libs/BoC are sitting on their hands because they know Canada is screwed without RE. That’s what happens when you chase all the businesses out of the country.

What did Trudeau expect would happen?

#127 Steven Rowlandson on 04.26.21 at 10:04 am

Comment #80

If prices are going up it is due to bidding wars financed by debt and contracting debt is the true source of inflation in the modern world. Currency is created by debt.
Employers don’t borrow to pay their workers ever increasing amounts of the official currency. So there is no serious wage inflation if any at all. This means that when everything else goes up many in the labor force get paid very little next to the cost of big ticket items like property, cars, trucks and anything that requires debt financing to buy it. Work and savings is not the biggest part of the economy like it should be. Debt and that which is financed with debt has the lime light and when that breaks down there won’t be much left.
Garth what are the consequences of real estate and government debt being rolled over at let’s say 10% or higher or being in whole or in part called if that is possible?

#128 Perspectives ... on 04.26.21 at 10:07 am

For the CMHC, Homelessness is on the Housing Continuum (see nice figure in the link below)
https://www.cmhc-schl.gc.ca/en/professionals/industry-innovation-and-leadership/industry-expertise/affordable-housing/about-affordable-housing/affordable-housing-in-canada

According to REMAX, “Despite housing affordability, many buyers being priced out of the market”. They believe 75% of Canada is undervalued.
“A Leger survey conducted on behalf of RE/MAX reveals that surprisingly, only 38 per cent of Canadians claim that the high price of real estate is one of the biggest obstacles preventing them from buying a home. Also on their list was an insufficient salary level preventing them from saving for a down payment (26 per cent) and a fear of rising interest rates (17 per cent). Meanwhile, the majority of RE/MAX brokers (56 per cent) claim that low or shrinking inventory is a more common factor.”
So only 38% of people think prices are too high, but 42% cannot afford neither a down-payment nor to pay the mortgage because their salaries are not high enough?

CMHC and Remax are some of the biggest players in the housing game – how can the market not be crazy when they simply think being homeless is just another possible state on the housing continuum, and that people should simply make more money?

#129 Geoff on 04.26.21 at 10:19 am

Hi Garth,

Would the impetus for blog dogs obediently following your model portfolio be to reduce their 15% exposure to the TSX and 5% REITS in light of your and Wolf’s prediction of recessionary headwinds ahead for Canada due to our over-inflated one-trick pony economic growth?

That was not stated. – Garth

#130 VGRO and chill on 04.26.21 at 10:21 am

#13 VGRO and chill on 04.25.21 at 1:35 pm
A couple weeks ago I moved from 70% maple to 42% maple for exactly these reasons.

What future growth potential is there, when Canadians would rather trade houses and pay mortgages, rather than create and grow profitable businesses that create goods and services that improve our lives?

Still overweight. – Garth

—–

VBAL: 42% maple
XBAL: 38% maple

Canada accounts for 4% of the global equity market. Why would you have 10x that exposure? – Garth

#131 Dharma Bum on 04.26.21 at 10:40 am

#28 Ponzius Pilatus

She’s uglier than my exwife.
————————————————————————–

https://www.youtube.com/watch?v=qvp38qj_zO8

I tell ya…NO respect!

#132 Ponzius Pilatus on 04.26.21 at 10:43 am

#IHCTD9 on 04.26.21 at 9:35 am
Well, with any luck we are getting very close to some kind of RE pullback. If not, I suppose the average SFD dump in big Canadian cities will crest 2 Million (LMAO!). We’re firmly in stupidville at this point, and if it’s just going to climb like Dutch Tulips, it’s time for the kids to look for a country where folks haven’t lost their freaking minds.

Canadians have lost it – and the Libs/BoC are sitting on their hands because they know Canada is screwed without RE. That’s what happens when you chase all the businesses out of the country.

What did Trudeau expect would happen?
————————-
You may be right.
But the question is:
Where should people go?
America? The wild fire season has just begun.
Gonna be a hot year.

#133 crowdedelevatorfartz on 04.26.21 at 10:47 am

@#107 Calgary

This happened in Vancouver last weekend.

https://www.citynews1130.com/2021/04/26/fundraiser-teen-stabbing-vancouver/

Two groups of kids.
One 15 year old dead.
One 14 year old charged with murder.
We will never know the name of the murderer.

#134 Dharma Bum on 04.26.21 at 10:57 am

Back in the day, if I presented a CV like the Wolf’s, the first question that the interviewer would ask me is:
“Sooooo…it seems like you have changed jobs with a ridiculously high frequency? Are you a chronic job hopper? How do we know that we can rely on you in the long run?”
Choose your “experts” carefully, dogs.

#135 Sara on 04.26.21 at 11:01 am

Thanks Garth for the heads up. I am going to pare down my Canadian exposure. Any advice as to what would be a prudent percentage of Canadian equity to hold at this time? Also, what about Canadian preferred shares – does the same advice apply? I know you can’t tell us EVERYTHING for free, but figured it couldn’t hurt to ask.

#136 Chris Serran on 04.26.21 at 11:24 am

This is just market timing by another name. None of you have any clue what country, region is going to do well. Buy good businesses that sell to many different regions and let them do their thing. I invest in 100% Canadian companies. Have been since I started investing and I’m doing fine thanks.

Nothing to do with timing, of course, but with the wisdom of diversification. Home country bias in Canada weakens a portfolio. – Garth

#137 Joseph R. on 04.26.21 at 12:04 pm

#130 VGRO and chill on 04.26.21 at 10:21 am
#13 VGRO and chill on 04.25.21 at 1:35 pm
A couple weeks ago I moved from 70% maple to 42% maple for exactly these reasons.

What future growth potential is there, when Canadians would rather trade houses and pay mortgages, rather than create and grow profitable businesses that create goods and services that improve our lives?

Still overweight. – Garth

—–

VBAL: 42% maple
XBAL: 38% maple

Canada accounts for 4% of the global equity market. Why would you have 10x that exposure? – Garth

——————————————————–

Your 42% is misleading; You are combining stocks and bonds:

https://www.vanguardcanada.ca/advisors/products/en/detail/etf/9578/balanced

Vanguard FTSE Canada All Cap Index ETF 18.00%

While International equities:

Vanguard US Total Market Index ETF 24.90%
Vanguard FTSE Developed All Cap ex North America Index ETF 12.50%
Vanguard FTSE Emerging Markets All Cap Index ETF 4.90%

#138 Sail Away on 04.26.21 at 12:08 pm

I was offered a crazy price for the sailboat last week, so agreed, cleaned it out and signed it over yesterday. Looks like future sailing will be via charter… everywhere in the world…

Still have a beautiful cedar/mahogany Swampscott dory for local cruising, although I might sell that as well in this environment.

So freeing.

#139 Planetgoofy on 04.26.21 at 1:10 pm

Eveyone and their dog is trading and know nothing about what drives the stock market. Its an everything bubble. Not just houses.
Theres no bubble on the sunshine coast north.
We are at build costs finally.
The house above is a joke.
Imho its all going to take a hit and if it does Ill go shopping. I have high cash levels a zero debt.
Good luck.

#140 ted on 04.26.21 at 1:17 pm

“Housing is becoming a dominant player in GDP in a way that is dangerous, like in Spain, Ireland and Greece,” he states. “These turned out to be epic housing bubbles that led to severe recessions.”
I guess this gets peoples attention but it is factually incorrect. Greece did not have a housing bubble and it was not a dominant part of the GDP prior to their debt crisis. It was a sovereign debt crisis. Personal debt was extremely low.

#141 Par on 04.26.21 at 2:02 pm

Hi Garth, I respect everything you say and Mr. Wolf as well. However, if I had agreed with you lets say 5 years ago, I would have lost out on a lot of upside more than 150%. That said, I do feel like we are at almost a climax top and it is not sustainable. Individuals with income to debt ratio’s of 450% will most definitely be the losers in all this.

Five years ago I said exactly the same thing: if you need a house and can afford one without gutting your family’d finances, go ahead. Why do people here always think in extremes? – Garth

#142 Jenn on 04.27.21 at 1:28 pm

Helpful PSA for anyone who wishes to be accurate:

“Millennial” is not shorthand for “young person.” These are people born 1980-1996. The youngest are 25 and oldest are 40.

If you are referencing people in their early 20s or younger, this is Gen Z.

PS, humanity has not evolved massively in 100 years. People, human beings, react to the conditions in which they are raised. If you were not raised with access to credit at this scale, you clearly did not use it. If you could take advantage of affordable housing and cheap tuition, you didn’t take on obscene debt to acquire these things.

Young people do stupid things, whether it’s eating live goldfish (greatest generation) or tide pods (gen Z).
Not all generations graduate into a recession (millennials) or are staring at a bleak climate future (gen Z).

No one should feel superior.