Pucker up

Let’s say you & your squeeze bought a detached in 905 two years ago when nobody could imagine empty commuter trains and people in masks. You paid $850,000. Now it’s worth $1,100,000.

You call the bank, get a HELOC for 65% of the value, and [email protected] hands over $715,000 at prime. That’s 2.45%. You buy a condo down by the mall to lease ou.t Bingo. You’re a rentier. A person of properties. An investor. A god.

Sure, the rent barely covers the property taxes, condo fees, insurance and HELOC interest so the ROI is like a wimpy GIC. But, man, the $1,500 a month the line is costing you is 100% tax-deductible. Interest-only payments can be written off in their entirely. And the bank is asking for no principal repayment. Yahoo. It all came for free from the equity in your home. And you just know that condo unit will be worth a million in a few years. Suddenly that one genius real estate investment you made (the house) has turned into two of them.

What’s not to love about the system?

This is exactly what thousands of families are doing. New home equity line of credit (HELOC) loans surged wildly – 57% higher – in the last six months, compared to 2020. Almost all this money has been borrowed on variable rates and secured by a principal residence. The bulk of borrowers now make minimum payments and are not reducing the amount owing. And why would they? The cost is barely 2.5%. It’s deductible. And housing is rising by 20-30% a year. Free money, baby!

As we told you a couple of days ago, this accounts for 25% of all real estate deals now going to investors. No, not big companies hoovering up houses, but mom-and-pop-and-junior family units leveraging up the family digs to start a property empire.

Some people think this is not going to end well.

Says the credit outfit Equifax (which tracks this stuff): “The HELOC trend is worrisome as often the payments are tied to a variable interest rate. With many consumers now heavily leveraged and the potential for increases on variable rate mortgages and HELOCs, consumers may find themselves not in a position to pay back their debt obligations if interest rates rise. This can lead to higher insolvencies.”

As we told you yesterday, it worries the Bank of Canada, too. “A sudden influx of investors in the housing market likely contributed to the rapid price increases we saw earlier this year. That can expose the market to a higher chance of a correction… extrapolative expectations risk creating a disconnect between actual home prices and their more fundamental levels.” The odds of an earlier rate-tightening cycles are rising.

It worries the regulator, too. Peter Rutledge is head of OSFI (the federal bank cop) and says household finances are becoming more fragile. “The use of HELOCs and non-traditional housing backed products can lead to greater and more persistent outstanding principal balances, increasing risk of loss to lenders.” There’s speculation this will push the stress test even higher as everyone worries about excessive borrowing – especially in light of the federal Lib’s crazy plans (the FHSA, new buyer tax credits, enhanced shared-equity mortgage and the $1.25 million HMC limit).

Now this is worrying the mortgage dudes. Too.

Broker, web rate aggregator and media star Rob McLister is now talking of a “significant” correction in real estate values next year. Rates are going to jump, he says, while pointing to a National Bank report showing Canadian real estate assets are now five times national disposable income – the most extreme in the world. “When you get that all-important leg on the table — which is interest rates — being kicked out next year, couple that potentially with some more tightening by regulators and a higher potential mortgage qualifying rate, it raises a lot of questions about real estate next year,” he told BNN (which you should never watch).

So, the targets are clear. (1) The cost of money and mortgages will rise. (2) It’s likely we’ll see a tightening of the HELOC rules so people cannot turn houses into ATMs so easily. (3) The mortgage stress test may rise again. (4) We could see Ottawa disallow interest deductibility for real estate investment loans. NZ is doing exactly that.

Any one of these moves will be consequential. Prices are now detached from economic reality. Families are plunging headlong into leverage and debt, no longer fearing risk. As McLister says: “The point is, people are taking their newfound equity and redeploying it in the real estate market because that to them is one of the safest no-lose investments.”

Now, you can’t blame folks for doing this. It’s irresistible. Households are addicted to real estate, unable to break the habit and enabled by bankers, brokers and delusional, floundering policymakers. Risk has augmented dramatically. It threatens everything. Thus, regulators are accepting their responsibility to slap you down. Ouch.

About the picture: “Here’s our newest member of the family, ‘Scarlett’,” writes Jenn. “She is four months old and a Cavalier King Charles Spaniel. I met her breeder 3 years ago at a horse show and waited a long time for her. She joins my Golden x rescue and Hound x as part of the pack. We paid a pre-Covid price for her and I have been to the breeder’s house 3 times, met the puppy’s  father and mother and the rest of the puppies. Your blog has taught me more than any other source about personal finance and that’s saying a lot given that I have read well over 50 books on the subject over the years. Thanks for all that you do.”

145 comments ↓

#1 TurnerNation on 11.25.21 at 3:27 pm

Wages dropping. Under Globalism we all shall be equal/equitable – that is, Poor.

https://www.bloomberg.com/news/articles/2021-11-24/immigrant-influx-stunts-wage-growth-in-canada-s-strong-recovery
“As Immigrants Pour In, Wages Stagnate in Surging Canadian Economy”

https://www.centuryinitiative.ca/why-100m
“Growing our population to 100 million by 2100 would reduce the burden on government revenues to fund health care, old age security, and other services…100 million by 2100 is not just a number. It’s a vision for the Canada we want to build for future generations.”

“Mulroney, who is remembered for tripling immigration over his term as prime minister, called for Canada to grow its population to 100 million by 2100.”
https://www.cicnews.com/2021/04/former-prime-minister-wants-canadas-population-to-grow-to-100-million-0417708.html#gs.hi0tnu

NOTED here way back in 2017, and onwards

#119 TurnerNation on 07.18.17 at 8:22 pm
A maximum wage of $15 net of taxes, carbon taxes and money stolen to overseas and never again seen.
500 sq feet UN approved living box and a 2nd world lifestyle

#5 TurnerNation on 12.01.20 at 3:19 pm
This is why you might have lost your business, your profession, your income. They want us working at the Amazon and Walmart distribution centres (which never get shut down for “cases”) at the new global Maximum Wage, $15-20. Which, inflation will eat, up.


— Food supply under pressure. Control over our Feeding sure.

https://www.foodmanufacturing.com/supply-chain/news/21915887/report-general-mills-to-raise-some-prices-by-20-in-january
“Report: General Mills to Raise Some Prices By 20% in January

#2 millmech on 11.25.21 at 3:31 pm

This is so easy to solve, just raise rates, so why will they not do this is the million dollar question.
All the big dealers of money keep shoveling it out the door to the cash addicts and then keep asking the government to make them stop, kind of reminds me of leaving a drunk in charge of a pub, It is all about market share and profits as no one wants to be the one to raise rates and lose business.

#3 Damifino on 11.25.21 at 3:31 pm

Now, you can’t blame folks for doing this.
—————————–

Actually, I can.

#4 Sail Away on 11.25.21 at 3:43 pm

Scurrying ants, driven by instinctual urges.

All hunters know that animals follow regular patterns and identifying and exploiting those patterns leads to hunting success.

Human animals are no different. Ask any con man: Construct an atmosphere of emotional exuberance or danger. Add shortage. Make it urgent. Give a heroic solution. Done.

It works universally except with Austrians. They just corner you in an alley and say, ‘Wanna buy a rutabaga?’

#5 Ambi and Vasu on 11.25.21 at 3:44 pm

As we told you yesterday, it worries the Bank of Canada, too.

– So, what is Bank of Canada doing about it?????
Other than plain noise!!!!!
Or looking the other way???

It worries the regulator, too.

– So, what does the Regulator doing about it?????
Other than plain noise!!!!!
Or looking the other way???

We need a time driven plan of action and implementation of that plan from these Leaders.

#6 TurnerNation on 11.25.21 at 3:47 pm

2022 we go back to normal! 2 years was enough right?

— Control over Travel/movement? Yep the New System.

https://www.bloomberg.com/news/articles/2021-11-25/eu-to-propose-9-month-limit-on-covid-vaccine-validity-for-travel
“EU Proposes 9-Month Limit on Covid Vaccine Validity for Travel”


— This will not be ending – planned till 2025. CV rules and Economic Lockdowns/reset are permanent feature of this global #reset.

.”The Trudeau Liberals have outlined their latest aid package for an economy recovering from Covid-19, proposing targeted financial support to businesses still recovering from the pandemic…
The Liberals are proposing to send income-support payments of $300 per week to workers who find themselves off the job because of a “Covid-19-related public health lockdown in their region” between now and spring 2022.” (investmentexecutive.com)

https://ottawa.ctvnews.ca/mobile/chance-of-vaccine-mandates-ending-in-january-next-to-zero-ontario-science-table-head-says-1.5679932
“Chance of vaccine mandates ending in January ‘next to zero’, Ontario science table head says
“Vaccine certificates plus masks in spring. I would bet on that,” he said.”

.WHO says fully vaccinated should wear masks and physically distance as Covid infections surge (cnbc.com)

.Indiana USA Extends COVID State of Emergency After Lawmakers Stall Anti-Mandate Bill(msn.com)

.Dutch ICU boss calls for tough lockdown to rein in virus (abc17news.com)

.Finland tightens restaurant restrictions, announces boosters for under 60s (yle.fi)

.Poland will need tighter COVID curbs if cases do not fall, says minister(reuters.com)

.France: starting January 15, the health pass will be invalid “seven months after the last injection” in the absence of a booster dose (francetvinfo.fr)

#7 X on 11.25.21 at 3:47 pm

Aren’t we at all-time highs for home ownership? Why then need to pump the RE market more with ‘the FHSA, new buyer tax credits, enhanced shared-equity mortgage and the $1.25 million HMC limit’? It would be nice if this were one of the election promises that didn’t get followed through on.

And for the love of dog, can rates please rise. Send a warning shot out early next year (earlier than April). Policy makers don’t have the gumption to do it.

#8 crowdedelevatorfartz on 11.25.21 at 3:48 pm

Low interest rates, HELOC’s, LoC, million dollar mortgages……

When this ends up going down….
It’ make BC’s Mudslide billions look like a kindergarten party

#9 paddy on 11.25.21 at 3:48 pm

How much did me and my squeeze put down on this figurative 850k home? 20%? The whole shebang?
715k LOC would be if the paid cash for the house yes???…I love math

#10 Overheardyou on 11.25.21 at 3:49 pm

Sounds like a snake biting it’s own tail. Can’t wait for it to reach it’s head…

#11 crowdedelevatorfartz on 11.25.21 at 3:52 pm

@#123 Wrk.dvr
“Just what we all need. To see Trudeau cry.”

++++

Your wish is my command.

https://www.youtube.com/watch?v=YMCaDvah6N0

#12 OK, Doomer? on 11.25.21 at 3:52 pm

Not a fan of disallowing interest payments on second properties. It’s changing the rules mid-game. I think a better option would be ratcheting up interest rates for mortgages and dropping them for business loans.

You get more of the activity that you reward. In the past ten years the government has rewarded people being stupid and irresponsible. So guess what type of behavior you get?

#13 Nonplused on 11.25.21 at 3:52 pm

I don’t see how “(4) We could see Ottawa disallow interest deductibility for real estate investment loans. NZ is doing exactly that” or any other measures to discourage real estate investment can increase the housing supply. After all these investors largely rent them out, so a family is housed, at about the same or a lower cost than it would cost them to own, assuming the bank would even lend them money. The net affect on the number of families living in a house is zero.

The other major activity of small time investors is “flipping”, often after some amount of upgrades. But this should be seen largely as a service. Much of the current housing stock hasn’t received any love or even regular maintenance in years. It is dilapidated and rotting away. A new roof, siding, and kitchen and bathroom are just what it needs to extend its life by another 20 years. Ya, somebody is going to have to pay for that and the flipper is going to expect a return on his/her/they/them/ze/zer’s money, but what is the better option? Let it rot?

And then there are the more serious flippers who buy up R2 50 foot lots and tear down the shack that’s on it and put up a 2 story duplex. Sure you get tiny postage sized yards, but you also get two much larger living quarters with modern efficiency standards for the real estate previously occupied by one dilapidated old shack with no insulation and a 40 year old furnace.

So once again we see that the government solution is going to make the problem worse, and the free market was already in the process of solving it without any government interference.

It’s always the same. All the new ideas are actually old ideas that have already been proven to not work.

“Of all things common sense is the most equally distributed. I have never heard a (person) express any desire for more of it.”

#14 X on 11.25.21 at 3:54 pm

Has RE ever had a greater % of investors buying properties? When the market turns as Rob McLister suggests, guess who bails first? Yep, those who don’t need to live there.

#15 earthboundmisfit on 11.25.21 at 3:55 pm

In “Value(s)”, Mark Carney cites “This time it’s different” as the most expensive phrase in history.

#16 Doug t on 11.25.21 at 3:56 pm

There was a pyramid scheme spreading around southern Ontario in the mid ‘80’s – some of my family members got in early and were treated with (literally) a brown paper bag containing $9k in cash – of course they were lucky

#17 Lt. Frank Drebin on 11.25.21 at 3:59 pm

Ouch …
Greed never ends well , and even people living within their means will pay the price.

#18 Shawn Allen on 11.25.21 at 4:00 pm

Pension increases

As Garth noted last week, Federal government retirees will get an increase of 2.4% for inflation in January. The amounts are fully indexed but done on the average of the 12 increases through September s 2021 so there is a lag.

The old age pension is increased quarterly and for the last quarter of 2021 is now 3.4% higher than the same quarter of 2021. This is fully indexed to official all-items inflation.

CPP is fully indexed and uses a lagged formula like the federal public service pensioners. But it does the average 12 months through October 2021 and will likely be somewhere around 2.7%.

The Alberta public pensions (former government employees) are only 60% indexed so likely about a 1.6% increase.

These increases are not terrible but of course not as high as grocery store increases. To get a lower inflation rate switch to shopping at Costco.

#19 Earlybird on 11.25.21 at 4:00 pm

Yes! Overheard a conversation today on this very thing…they wanted to get the kids out if the house!! The money stays in the family and they can keep an eye on their “investment” Seriously …..rates cannot get to high and everyone one knows it…

#20 Prince Polo on 11.25.21 at 4:02 pm

Let’s pool our assets and start the Greater Fool Tissue Paper Co.! Manlier than Bounty paper towels and more helpful for sopping up the crocodile tears coming soon from these same genius real estate investors. The special edition Photo-op Minister tissues will be a real hit for the biggest crocodile tears of all!

#21 Tactless Capital on 11.25.21 at 4:05 pm

Housing will continue to go up because everyone is in on the play. If the pandemic couldn’t pop the bubble then what can? Runaway inflation? Deflation?

#22 jimmy zhao on 11.25.21 at 4:06 pm

The federal Conservatives need to get rid of O’Toole and make Pierre Poilievre their leader.

#23 Dolce Vita on 11.25.21 at 4:15 pm

People also ask…

Are house prices rising in Italy?

Record increases in house prices in Italy in 2020.

In spite of the COVID-19 pandemic, Italy saw record increases in house prices in 2020. According to the regular Istat housing index (from the Italian National Institute of Statistics), values show an increase of 1.9% over the past year.

[they bold faced “increase of 1.9% over the past year”]

——–

Italia, where a home is just a home and not a disease…

Average home price by Region:

https://www.statista.com/statistics/818726/average-price-for-properties-for-sale-by-region-in-italy/

[1 sq m = 10.7639 sq ft, 1 € = 1.42 CAD; thus,
1 €/sq m = CAD 0.1319224445/sq ft]

FVG, the region I live in = €1315/sq m or CAD 173.48/sq ft.

————————

“It threatens everything. Thus, regulators are accepting their responsibility to slap you down. Ouch.”
-Garth

Ya think?

#24 Andrewski on 11.25.21 at 4:17 pm

Recently read an article that parents who have the dough are buying pre-builds “for the children”, which I believe would only exacerbate the ability of 1st time homebuyers who don’t have parental assistance to get their foot in the door.

#25 Linda on 11.25.21 at 4:19 pm

‘Scarlett’ looks like she would like to not be the love interest in the kissing booth:)

The possible regulator slap down. Have to say, have some difficulty believing JT & crew would disallow interest deductions, given the heaps of RE fuel they have added to this housing fire. Would JT & crew be so dastardly to the adoring RE hordes? If there is any kind of RE correction sufficient to threaten your average beaver’s home ownership – both principle residence as well as any ‘investment’ property – would not the government step in to save the day? I’d say your average beaver speculator is counting on just that.

#26 OK, Doomer? on 11.25.21 at 4:28 pm

The entrails suggest a big run up in interest rates, and soon. Why do you ask? Bank stocks are rising sharply for no (apparent) reason. Banks will make a crap load from rising rates, so don’t think that they’ll try to help out the consumer. They want rising rates and they’ll get them.

Put on your seatbelts. This is about to get bumpy.

#27 Ponzius Pilatus on 11.25.21 at 4:29 pm

#146 Don Guillermo on 11.25.21 at 1:52 pm
#141 Ponzius Pilatus on 11.25.21 at 12:01 pm

To quote the late John Prine:
“A question ain’t really a question,
If you know the answer, too”
I can’t stand the drunken fool.
**********************************
Love John Prine. He’s big on my playlists. I regret never seeing him live.
————
Totally agree.
He’s probably the most under rated musician.
He had the pulse on the ordinary guy.
Beautiful lyrics and melodies.
As for life performances:
I saw Johnny Cash and Joan Baez in Vienna.
Cash was great, but Baez was kinda boring.
But The Who, under a the Krone Circus tent in Munich was something else.

#28 cramar on 11.25.21 at 4:36 pm

A good metaphoric picture (assuming other than cute canines) for this blog today would be a picture of the Hindenburg with the name crossed out and renamed “Canadian Real Estate.” The ultimate hydrogen-inflated gasbag!

When interest rates rise, RE prices start to drop, and many of these pseudo-investors start to default, it could have a cascading chain reaction. RE prices drop more, causing more foreclosures and more bankruptcies. The question I would like answered is what will be the status of Canadian banks after this crash and burn? They set aside billions for COVID issues, which did not materialize. The coming default tsunami is likely to hit banks hard.

#29 Rach on 11.25.21 at 4:42 pm

This has been going on for a long time now so why, suddenly, is it coming to light and so “surprising” ??

#30 wallflower on 11.25.21 at 4:44 pm

Another lens through which some of this could be viewed is corruption.

International students and offshore banking
https://globalnews.ca/news/8383731/international-students-and-offshore-banking-flagged-in-canadian-real-estate-money-laundering/

Humber College scandal
https://www.theglobeandmail.com/real-estate/article-brokerages-dealing-with-fallout-from-misconduct-investigation-at/

#31 Mark on 11.25.21 at 4:47 pm

People have all along been blaming immigrants and foreign investors. It is local investors who were responsible for this mess. It is the Canadian local middle class who have bought up all these properties and have now become investors.

#32 Dolce Vita on 11.25.21 at 4:47 pm

So yesterday I had a fake reincarnation of Lucius, former owner of Villa dei Papiri in Herculaneum, remark where did all the water go?

20 m of it went somewhere on the planet to give us our modern day sea level.

So that got me to thinking what if the Climate Goofs are right – heat melts ice and sea levels rise by 20 m to 79 AD levels by 2050 AD?

Since today is about RE, again, and poor BC is flooding I wonder what would happen to Vancouver, Victoria and Lunenburg if sea levels rose by 20 m as they were in Roman times?

Dark blue line = current coast line, light purple = areas inundated

Lunenburg Mini-Archipelago

https://i.imgur.com/I4bH3wA.png

Proof Delta, Richmond on flood plains, Abbotsford gets deserved beach front, Denman gone but Davie still there and Lion’s Gate needs 2 more extensions, 1 more to get to the N. Shore and 1 to the Island of West End.

https://i.imgur.com/KwFe8fW.png
[Port Coquitlam no longer a port, gone, gone & Surrey Island]

Half of Oak Bay gone so prices there will skyrocket even more:

https://i.imgur.com/v1kYom8.png

—————

Knock yourselves out:

https://www.floodmap.net/

Enter elevation in meters on the LHS, click Set. By the way, their starting sea level rise of 400 m is absolute whimsy, if not scaremongering:

Google Search “the maximum sea level can rise if all ice melted”

PS:

My city of Pordenone, FVG, IT will have an Adriatic Sea beach (and ya, I bought on the heights here too):

https://i.imgur.com/sb9A8UY.png

#33 inOttawa2021 on 11.25.21 at 4:49 pm

We bought a second property using HELOC for downpayment, the rest mortgaged – essentially 100% financed. We need to do a substantial gut-reno on the second property before we can move over there and sell current house. This let us do both. Great short-term, but as a long-term strategy to hold and finance both? Terrifying….

#34 Slim on 11.25.21 at 4:54 pm

https://www.westerninvestor.com/british-columbia/surrey-condo-projects-pre-selling-out-in-record-time-4795074

This project is sold out. It’s on the King George Highway where the old Flamingo Hotel used to be. Most of the pre-sales went to parents who bought for their kids. This developement was heavily promoted by real estate genius Ozzy Jurock.

Won’t be ready till 2025. What could go wrong?

#35 mark on 11.25.21 at 5:09 pm

lol people make no sense. why is everybody jumping in AFTER prices have gone up 35% in one year? rates are lower but your payment is the same or higher than if you had bought a year earlier, more interest, more risk, lower returns. I don’t understand. what am I missing?

#36 crowdedelevatorfartz on 11.25.21 at 5:17 pm

@#34 Slim Pickens

“This developement was heavily promoted by real estate genius Ozzy Jurock.”

+++

Ahhh yes, Ozzie “it’s always a good time to buy” Jurock…..

He’s been flogging Real Estate all over North America since the early 80’s.

If the market melts here…he’ll promote somewhere else.
“Its always a good time to buy!”

#37 crossbordershopper on 11.25.21 at 5:25 pm

the smith maneuver is excellent, and if the feds think that chaning the rules and cant make an investment in real estate, it would be tough for them legally to do that. Anyone can borrow money, (if the banks or whoever lend it) and invest in ANY investment that will generate an income or have potential for capital gain.
If they do, you can borrow against home, yes, you buy stock, like me at interactive brokers, i pay 1.59% margin rate, get a cheque and buy real estate and its deductible. so i dont really know why they would want to tinker with this.
i dont see a lot of people writing off mortgage payments thats the first step, crank up the smith maneuver , trillions of dollars of money are sitting on every street in suthern ontario, 45, 47, 49, one million, two millino , three million. we can just borrow from each other, pay no taxes, max out govt benefits. and live well off our wealth for ever. its possible. even with no return on investment property. debt repayment and inflation will handle that.
I still have a problem where the millionaire old lady is sitting in a 1.5million dollar house alone, with her cat, not a dog. and collects all the govt cheques they issue her till the day she passes. Others are getting up at 530 to go to the 401 to work for the rest of there life. The system is messed up we all know that, but what are you going to do, ask grandma to sell and move in with her kids, no, somehow get the youngins to get some plan of incentive to buy in, its easier that way , its all about the votes. wrapped up in money and i think good intensions.

Deducting investment loan interest has nothing to do with the Smith Maneuver. – Garth

#38 active on 11.25.21 at 5:25 pm

anyone want to buy my Merritt, BC house from me? looking to unload it ASAP. Thanks.

#39 Chameleon on 11.25.21 at 5:25 pm

I’m not giving this dog 5 cents for a kiss!

Look at that sour face. Makes me think of some angry old lady stare after I got the last muffin at Timmies.

I’m going to need to be paid at least $100 to have any type of saliva applied by that thing on my person.

#40 Reality Bites on 11.25.21 at 5:30 pm

#2 millmech

Same old question.

Don’t you see? THE GAME IS RIGGED!

Raising rates would put the bank debt at risk.

Oh sure, the housing is secured by the government in the first place with CMHC scam, but can you imagine how much business debt they are issuing too? LOC? Other debt that’s not CMHC secured?

The banks need everyone to be borrowing to keep the house of cards propped up. Low rates is a BLACK FRIDAY SALE on loans – permanent one.

Fascinating game this game is. Really, it is.

You know what too? We blame the big corporations, and banks and oil and tech for slave labour, BUT LOOK AT US – buying all this crap, expecting it to be cheap, expecting credit, expecting it to be delivered for free…who’s addiction are these corporations serving?

#41 Paul on 11.25.21 at 5:31 pm

Well I guess its not all the Realtor’s fault, who knew?
No money no sales!

#42 Don Guillermo on 11.25.21 at 5:31 pm

#147 Barb on 11.25.21 at 5:12 pm
#140 Shawn Allen Nov.24/21

Hwy 97S through Wenatchee
#90 to Spokane.
No tolls there
****************************************
Growing up, Spokane was the only city we knew. Never drove to Vancouver or Calgary … approx 8 hrs to either – too arduous. With our 3 TV stations (NBC, CBS & ABC) coming out of Spokane and barely having to slow down at the Northport crossing I thought we were Americans for the longest time..

#43 zxcvbnm on 11.25.21 at 5:44 pm

I’d like to know Turner Nation’s actual thoughts on the subjects he posts about, uncensored, and un-self-censored (as I’m sure he/she/them holds back somewhat so that Garth doesn’t delete – or maybe Turner Nation IS Garth??)

Dear Turner Nation: Start your own blog! I’d read it daily. Thank you.

#44 Don Guillermo on 11.25.21 at 5:46 pm

#27 Ponzius Pilatus on 11.25.21 at 4:29 pm
#146 Don Guillermo on 11.25.21 at 1:52 pm
#141 Ponzius Pilatus on 11.25.21 at 12:01 pm

To quote the late John Prine:
“A question ain’t really a question,
If you know the answer, too”
I can’t stand the drunken fool.
**********************************
Love John Prine. He’s big on my playlists. I regret never seeing him live.
————
Totally agree.
He’s probably the most under rated musician.
He had the pulse on the ordinary guy.
Beautiful lyrics and melodies.
As for life performances:
I saw Johnny Cash and Joan Baez in Vienna.
Cash was great, but Baez was kinda boring.
But The Who, under a the Krone Circus tent in Munich was something else.
**************************************
Prine was very underrated, except with other musicians.
One of my favorite live shows was James Taylor at the Saddledome a few years ago. The Dome has a bad reputation for acoustics but Lovin’ Man JT and his band absolutely nailed it. He’s coming back this summer.

My favorite Cash song (except of course when the Flames win and they play “Ring of Fire”) is his duet with Dylan “Girl from the North Country Fair”. I can put my noise cancelling head phones on and get lost in it.

#45 Dolce Vita on 11.25.21 at 5:53 pm

New variant. Bad.

Read about it this morning CET:

https://www.theguardian.com/world/2021/nov/24/scientists-warn-of-new-covid-variant-with-high-number-of-mutations

A few minutes ago, I read this from a trusted source, worse in that it outcompetes Alpha and Delta:

https://twitter.com/EricTopol/status/1463959610281259019

B.1.1.529 its dot number designation, to be called Nu (Ν,ν). If any good news is that it so mutated, 32 in all, that any old PCR test will detect easily.

The wrong kind of new.

————–

FWIW heads up to the Blog et. al.

#46 Stone on 11.25.21 at 5:53 pm

#35 mark on 11.25.21 at 5:09 pm
lol people make no sense. why is everybody jumping in AFTER prices have gone up 35% in one year? rates are lower but your payment is the same or higher than if you had bought a year earlier, more interest, more risk, lower returns. I don’t understand. what am I missing?

———

Nothing.

#47 Shawn Allen on 11.25.21 at 6:06 pm

Hey Blacksheep:

How much of Canada’s increased money supply is due to what can be called central bank money printing and how much due to commercial bank lending to people, corporations and government?

I feel like “money printing” is an easy target.

But if Canadians borrow money which increases bank deposits and therefor money supply and if they keep bidding up the price of everything are we wrong to blame mostly the central banks money printing?

Or is the central bank to blame because their low interest rates spurred the borrowing?

#48 Shawn Allen on 11.25.21 at 6:07 pm

#46 Stone on 11.25.21 at 5:53 pm
#35 mark on 11.25.21 at 5:09 pm
lol people make no sense. why is everybody jumping in AFTER prices have gone up 35% in one year? rates are lower but your payment is the same or higher than if you had bought a year earlier, more interest, more risk, lower returns. I don’t understand. what am I missing?

———

Nothing.

***********************
Out. mark is missing out?

#49 T-Man on 11.25.21 at 6:09 pm

Mabey Canada is different. In the U.S.A., more than 200 corporations and investment firms are in the housing hunt. J.P. Morgan Asset Management, Black Rock Inc, Invitation Homes, Blackstone and LGI Homes are some of the bigger ones. B. Wayne Hughs’ company, American Homes 4 Rent, owns 53,000 suburban houses in 22 states. Collecting 1 billion in annual rent. Sounds like vacuuming to me.

#50 twofatcats on 11.25.21 at 6:10 pm

Why are people investing in houses? Because they are making out like bandits. Look at the profits that can be made as long as they claim they are selling their ‘principal residence’.

https://housesigma.com/web/en/house/GMnKYqpQ5m13w1Qr/162-SCHOLFIELD-Avenue-Port-Colborne-40189010

https://www.zolo.ca/st-catharines-real-estate/45-chestnut-street-west#sold-history

https://housesigma.com/web/en/house/2Zpj39Ezgq03DrK8/228-PHIPPS-Street-Fort-Erie-40187109-X5438703

#51 Nonplused on 11.25.21 at 6:14 pm

#24 Andrewski on 11.25.21 at 4:17 pm

Recently read an article that parents who have the dough are buying pre-builds “for the children”, which I believe would only exacerbate the ability of 1st time homebuyers who don’t have parental assistance to get their foot in the door.

———————————

You should probably complain to your parents about that.

Also if this thing really is going to blow, you should probably count your blessings. The renters aren’t going to lose anything.

————————————-

For you socialists out there, remember that most of the parents who are helicopter swooping in with down payments for their kids worked hard for the money and paid approximately 50% income tax on it. It is really kind of your personal situation to own if your parents did not. (Mine certainly did not, no help for me not even with school. Yet I got by.)

#52 Wrk.dover on 11.25.21 at 6:22 pm

I know a boomer that bought one of the first semi’s in Meadowvale, just up the two lane from Garth’s Streetsville root in 1976. Not much was paved ‘out’ there yet. Winston Churchill was a sketchy concession rd.

After a few years, he made the same play portrayed in todays topic, levering a townhouse in Bramalee. He didn’t even have car payments, but the down payment along with the townhouse fell from his grasp after a few years, despite his good income from work subsidizing it.

Seeing is believing, so I do believe it.

#53 the Jaguar on 11.25.21 at 6:24 pm

Wellum. I told myself not to post further until I returned from the beach. Behave. Still waiting in anticipation of airport transport. Impatient, but unable to take the bait Garth has put out. Enough said.

But DonG reeled me in. The best John Prine tune was ‘Speed at the Sound of Loneliness’.

https://www.youtube.com/watch?v=eFvenjll1Bk

Never saw him perform it live, but it sure stands up.

Long ago and far away I was in the audience in a place called Wheeling, West Virginia. Tammy Wynette performed at some historic theatre there. Felt like the ‘Grand Ol’ Opry’. One has to understand and appreciate how important that music was to many who had migrated north for work from southern states. It was magical. Emmylou Harris & Gram Parsons. Their sound was similar. Singular.

O.K. Back to my ‘allowable carry-on list”………………

P.S. Interesting ‘On the ground” reporting today from the BC interior & CBC The Current.

Especially this part of the link below that addresses ‘Adaptation versus Mitigation’ in the endless debate of climate change. 1:14:29 in length, but this sensible rancher type has something to say beginning at about 32:00. Worth your time.

https://www.cbc.ca/radio/thecurrent/the-current-for-nov-25-2021-1.6262165

#54 Ponzius Pilatus on 11.25.21 at 6:25 pm

#4 Sail Away on 11.25.21 at 3:43 pm
Scurrying ants, driven by instinctual urges.

All hunters know that animals follow regular patterns and identifying and exploiting those patterns leads to hunting success.

Human animals are no different. Ask any con man: Construct an atmosphere of emotional exuberance or danger. Add shortage. Make it urgent. Give a heroic solution. Done.

It works universally except with Austrians. They just corner you in an alley and say, ‘Wanna buy a rutabaga?’
———–
Sailo, I agree with your comparison of Austria to an Ant Colony.
Austria is tiny, but it is home of some very famous people.
One of them is Sigi Freud.
If he were alive today, he would put you and CEF on the couch.
And his diagnosis would be:
Rutabaga envy.

#55 SP on 11.25.21 at 6:29 pm

BTW, as a long-time renter, I prefer a corporate landlord (owning a rental complex) over mom-and-pop rental unit, any day.
Reasons being better maintenance and better security (they won’t kick you out because they are selling/renovating/wanting to live there)

#56 Catalyst on 11.25.21 at 6:31 pm

Talk is cheap – they’ve been talking about how worried they are back when houses were half as expensive. Until actual action happens, I don’t believe any of it.

The OFSI guy actually sounded more like a real estate investor bull if you watch the interview. He praised their smart investing as how capitalism works.

#57 Ponzius Pilatus on 11.25.21 at 6:34 pm

#44 DG
My favorite Cash song (except of course when the Flames win and they play “Ring of Fire”) is his duet with Dylan “Girl from the North Country Fair”. I can put my noise cancelling head phones on and get lost in it.
————–
Well, I give you one better:
Cash and Rod Stuart:
Country Comfort.
I don’t have the fancy noise canceling head phones.
What makes them special?

#58 Comrade on 11.25.21 at 6:39 pm

didn’t Evan Siddall predict the same, and then came out a year later to apologize for doubting the canadian real estate.

the prices have been disconnected from fundamentals for quite some time, and that didn’t seem to make any change in behaviour or prices.

#59 Shawn Allen on 11.25.21 at 6:52 pm

Is the Game Rigged?

#40 Reality Bites on 11.25.21 at 5:30 pm
#2 millmech

Same old question.

Don’t you see? THE GAME IS RIGGED!

*************************************
I suppose the losers of most games believe the game is rigged.

Winners win and losers lose (and make excuses and whine a lot)

#60 Barb on 11.25.21 at 7:01 pm

#42 Don Guillermo

Never drove to Vancouver or Calgary … approx 8 hrs to either – too arduous.

————————————

Arduous? Total eye candy!

The geology seen on Hwy 97S from Kelowna through Wenatchee, Quincy, Ephrata/Moses Lake, to Spokane
makes me drool. Beginning with the White Lake Formation in Westbank and Summerland where we found tree fossils and coal seams! Also outcropped near Okanagan Falls.

And the columnar basalt spikes east of Wenatchee to Quincy are breathtaking.

I picture the Ice Age Floods carving out valleys and mesas after volcanism.

Always sad when the drive ends.

#61 yvr_lurker on 11.25.21 at 7:07 pm

#30 Wallflower
International students and offshore banking
https://globalnews.ca/news/8383731/international-students-and-offshore-banking-flagged-in-canadian-real-estate-money-laundering/
—-

Exactly. How many of these new upstanding citizens are living in Canada, easily laundering proceeds of crime and corruption done overseas in our real estate markets. I would vote for any Gov’t that would be rather draconian in sending these crooks back to their own countries ASAP. No 10 year legal battles to stay in this country. Rounded up and quickly deported; no residency and no long legal process.

This same shite goes on in other western countries and frankly the Gov’ts in the west need to become much stricter with this type of abuse. If this means I vote for the Cons, I’ll do it. However, doubtful any Gov’t will take it on in a serious way.

https://www.theguardian.com/australia-news/2021/nov/09/widespread-money-laundering-in-property-locking-out-australians-from-owning-homes-senate-told

#62 under the radar on 11.25.21 at 7:10 pm

It all depends on the ability of Central banks to control inflation and keep rate increases measured. High single digit prime quickly ends the party. Most will say not possible. This storm has been brewing for 20 years

#63 Quintilian on 11.25.21 at 7:11 pm

“It worries the regulator, too. Peter Rutledge is head of OSFI”

“it worries the Bank of Canada, too.”

Yes, it worries them. It keeps them awake at night.
Just like the tobacco executives who put warning labels on cigarettes.

CMHC, BOC, OSFI are part of the cadre, beholden to the politicians.

They are appointed for their exceptional skill of being masters at lying while sounding/appearing dignified.

#64 "NUTS" on 11.25.21 at 7:12 pm

#17 “Ouch …
Greed never ends well , and even people living within their means will pay the price.”

I absolutely disagree with your statement. People who accessed their finances properly-which includes risk analysis and allowing for sufficient fluctuations-will come out just fine. We are in that group, which is why we did not ‘gamble’ our savings on property because it would have left us exposed to too great a risk. Darwin also plays in finances, and it’s time to thin the herd.

#65 CL on 11.25.21 at 7:17 pm

“and enabled by bankers, brokers and delusional, floundering policymakers”

suck and blow. Enable then worry about the enabling. And they’re not worrying about those that are drinking the Kool Aid, they’re only worried about the banks and financial implications to them and the economy.

#66 jm on 11.25.21 at 7:25 pm

House insurance just went up, Agent blames it on inflation,lumber, What about the extra 66 bucks, oh that’s insurance on your Heloc-bank’s have to be protected you know.

#67 Ponzius Pilatus on 11.25.21 at 7:35 pm

#63 Quintilian on 11.25.21 at 7:11 pm
“It worries the regulator, too. Peter Rutledge is head of OSFI”

“it worries the Bank of Canada, too.”

Yes, it worries them. It keeps them awake at night.
Just like the tobacco executives who put warning labels on cigarettes.

CMHC, BOC, OSFI are part of the cadre, beholden to the politicians.

They are appointed for their exceptional skill of being masters at lying while sounding/appearing dignified.
——————–
I can only speak for OSFI.
I worked for a Tier1 bank for over 20 years.
Found the OSFI auditors (mostly CAs) very professional and competent.
There is a reason no Canadian bank was in trouble during the GFC in 08/09.
Stop mixing up Canada with Mexico.

#68 bobo on 11.25.21 at 7:39 pm

“We could see Ottawa disallow interest deductibility for real estate investment loans. NZ is doing exactly that.”

Good luck with that, rents would just increase further to cover this extra cost of operating an apartment building.

Maybe for single family homes only, but remember we are short apartments already and good luck renting a house when there is no point investing in a rental home.

#69 Quintilian on 11.25.21 at 7:48 pm

“There is a reason no Canadian bank was in trouble during the GFC in 08/09.”

Yes, the reason is they are basically an oligopoly.

No other industry , or most countries, would be allowed such degree of concentration.

#70 Reality Bites on 11.25.21 at 7:55 pm

#59 Shawn Allen on 11.25.21 at 6:52 pm
Is the Game Rigged?

#40 Reality Bites on 11.25.21 at 5:30 pm
#2 millmech

Same old question.

Don’t you see? THE GAME IS RIGGED!

*************************************
I suppose the losers of most games believe the game is rigged.

Winners win and losers lose (and make excuses and whine a lot)

*************************************

To see how rigged the game is, consider the small business bailout.

$40K loan minimum must be taken, to get $10K forgiven – right? That was the formula?

Why not just give the small businesses the $10K as a rebate or GST break?

Because that would NOT grow the Bank Business loan book!

These damn politicians “assisted” the small business just so they could really assist the banks.

This is the level of rigged we’re talking about pal.

#71 Shawn Allen on 11.25.21 at 8:07 pm

Reality Bites at 70 complained:

To see how rigged the game is, consider the small business bailout.

$40K loan minimum must be taken, to get $10K forgiven – right? That was the formula?

Why not just give the small businesses the $10K as a rebate or GST break?

**************************
Could it be because a lot of small businesses needed more like $40k and $10k would not have kept the wolf at bay?

This is an investment personal wealth site. Did you forget to own bank shares directly or indirectly?

And so what if the economy is “rigged” in certain ways? What does that mean? What stops you from getting on the right side of that? You must play the hand you are dealt. You must strive to improve your finances in the world as it is.

Circa 2009 this very blog was filled with laments that the stock market was rigged. No one had made money in ten years etc. There followed 12 (and counting) mostly fat years in the market. Money was made like falling off a log. Same in real estate.

#72 Sail Away on 11.25.21 at 8:08 pm

#70 Reality Bites on 11.25.21 at 7:55 pm

To see how rigged the game is, consider the small business bailout.

$40K loan minimum must be taken, to get $10K forgiven – right? That was the formula?

———

Even better. The sweetener turned it into a $60k loan with $20k forgiveable.

#73 Ponzius Pilatus on 11.25.21 at 8:13 pm

#69 Quintilian on 11.25.21 at 7:48 pm
“There is a reason no Canadian bank was in trouble during the GFC in 08/09.”

Yes, the reason is they are basically an oligopoly.

No other industry , or most countries, would be allowed such degree of concentration.
——————
You forget Canada has many T2 financial institutions such as Credit Unions.
VanCity is the largest mortgage lender in BC.
Very diversified and solid.
Just like you retirement portfolio should be.

#74 Ponzius Pilatus on 11.25.21 at 8:19 pm

Wow,
Just watching the opening of Whistler and Blackcomb.
The Pineapple Express is bad for the Fraser Valley, but is dumping a ton of snow on the slopes.
Can’t wait to ski the Seventh Heaven.

#75 I'm Alright Jack on 11.25.21 at 8:21 pm

Interesting article on GlowBall today about foreign ‘money laundering’ through Canuckistan real estate. I know its not the main reason for our ridiculous house prices (Canadians’ stupidity is), but still it can’t help.

https://globalnews.ca/news/8383731/international-students-and-offshore-banking-flagged-in-canadian-real-estate-money-laundering/

#76 RE_Investor on 11.25.21 at 8:22 pm

Multiplex time!
https://www.toronto.ca/legdocs/mmis/2021/ph/bgrd/backgroundfile-173156.pdf

If you’re going to invest now in RE in Toronto, plan on either corner lots, properties spanning 2 streets (3 is better), detached houses (or both semis), and close proximity to rapid transit.
This will give you greater possibilities once Toronto finally updates the current zoning by-law
(2013 : https://map.toronto.ca/maps/map.jsp?app=ZBL_CONSULT).

There is a push to remove the restrictive Residential Detached (RD) zoning and allow multiplexes to be situated in these neighborhoods. Of course NIMBY will result, but with the expected population growth in Toronto, neighborhoods will have to adapt and grow. The existing homeowners will get large returns when they finally sell to developers who then in turn construct multiplexes with either purpose built rentals or condo units for sale. You can slowly see this adaption of more density where laneway housing and secondary units are been written into the zoning bylaw (2019). Also a bonus, Toronto will be reviewing the heavy fees and arduous approval process that developers are faced with for planning new multiplexes. It all looks good for Toronto Real Estate, especially if you are into houses (not condos!). Having land is better than money in the bank. It’s real and it always goes up in value!

#77 Politicians on 11.25.21 at 8:24 pm

Ha ha ha!

Look at your old friends Garth. They push for vaccine mandates in House of Commons and then vote themselves a WFH setup. No debate!

Even our leaders don’t want to wear pants.

https://nationalpost.com/news/politics/otoole-accuses-liberals-of-hiding-as-house-of-commons-moves-to-resume-hybrid-sittings

#78 Drinking on 11.25.21 at 8:24 pm

As long as the Libs and the NDP are in charge I do not believe any of this (sarc); there current objectives will destroy this country; run young educated ones RUN!!!!

#79 Garth's Son Drake on 11.25.21 at 8:27 pm

This goes back to my point about people should be limited to 1 house for living in. Canadians have to be regulated in this way otherwise they will topple the financial system. It might already be too late…but

The housing market is only like Gamestop if everyone is buying 2nd, 3rd or 4th properties as investors, which according to you is about 25% of the market.

So, how much of this investment money will fold with raising rates? My guess is it will be limited.

Therefore, Dennis is correct, if Trudeau does not backstop an employment loss next time.

Who is to say the Feds won’t always have the home owner back when they lose their job, because the fallout from housing is a far worse outcome for the country and the leader of it. The Canadian consumer is too big to fail. They learned this the hard way in the US re: 2008. Hundreds of billions spent in the last year by the Feds in Canada is empirical evidence of my point.

Dennis Mitchell, chief executive and chief investment officer of Starlight Capital, is dubious about the chances of a sharp pullback in home prices.

“If the cost of servicing your mortgage goes up $100 a month and your wages go up $300 a month, that’s not the recipe for a housing correction, alright?

“Are we going to see the gains that we’ve seen in the last two years? Absolutely not. … but for a significant correction you need a significant interruption in employment.”……which I might add, without a government backstop of 300+ billion that allowed a 14% unemployed group to skate right through the crisis unscathed.

What is coming is a correction of about 15% in price due to the rise in cost of money and it is too far out to predict thereafter – we don’t even know if rate hikes will materialize. Once the facts change, we can be quick to adjust.

#80 Elon Fanboy on 11.25.21 at 8:29 pm

#45 Dolce Vita “New Variant, Bad”.

Garth may have been premature with his proclamation that Covid is over.

This latest variant is scaring the crap out of Epidemiologists. It’s out competing Delta….by a lot. Plus a tonne of mutations that may confuse our immunity/vaccine efficacy. Only discovered on Tuesday in South Africa…but already got cut off from a tonne of countries who stopped flights in response.

‘COVID-4…This time it’s personal’.

#81 400 Billion on 11.25.21 at 8:42 pm

That is the amount that was required for JT to plug the risk to the housing market by writing a 400 billion dollar tax funded cheque to home owners and renters, stabilizing house prices and injecting confidence to sky rocket real estate valuations soon thereafter people figured out the position of the Federal government.

vs.

a 60% immediate house price correction if the above was not executed.

Pick your poison. The latter would have meant financial devastation to most and a new prime minister (ironically this would be more healthy for the country in the long run).

What do you expect an elected prime minister to do? As the one person whose job relies on keeping voters happy with the authority to drop this helicopter money and avoid disaster.

That is a pretty clear signal to investors. Canadian tax payers have your real estate investing back.

It is pure logic that everyone would be tapping any means possible to capitalize on this.

Even Poloz is creatively getting in on it.

How much more evidence do we need about easy life changing windfall gains to be had in real estate? The not so well kept secret is out and there are a lot of loop holes to keep your gains tax free.

Let’s see if this ever changes.

#82 Drinking on 11.25.21 at 8:47 pm

Garth, you did not post my post yesterday regarding my hellish experience in B.C. in the past few weeks, I did not think that it was over the top of other post you allow on this blog but you did, but I do respect it due to it being your blog.

With all that I experiences being a non resident (tourist)I just wish to thank all those wonderful people in B.C. that helped me get back home under unimageable circumstances under there part, all Canadians do the same under harsh conditions and that is what I love about this country, cannot stand the politics, especially the hypocrisy but love the Canadian soul, be well all of you from the West Coast to the East and our Northern Canucks.

#83 crowdedelevatorfartz on 11.25.21 at 8:52 pm

@#54 Purile Ponzies Prepubescent Ponderings

“If he were alive today, he would put you and CEF on the couch.
And his diagnosis would be:
Rutabaga envy.”

+++++

Speaking from experience?

#84 Stone on 11.25.21 at 9:39 pm

I read this blog every day and every day, I am grateful to be pretty much debt free with a fat, balanced and diversified portfolio that spews out divvies into infinity. The 35% or so downturn in financial markets in 2020 was so easy to rebalance into from the bond component. Renting is easy and carefree. Why oh why do people want to complicate their lives with so many unnecessary headaches when such an easy path to financial success is pretty much laid out in front if them?

#85 Shawn Allen on 11.25.21 at 9:44 pm

Bank Oligopoly?

#73 Ponzius Pilatus on 11.25.21 at 8:13 pm
#69 Quintilian on 11.25.21 at 7:48 pm
“There is a reason no Canadian bank was in trouble during the GFC in 08/09.”

Yes, the reason is they are basically an oligopoly.

No other industry , or most countries, would be allowed such degree of concentration.
——————
You forget Canada has many T2 financial institutions such as Credit Unions.
VanCity is the largest mortgage lender in BC.
Very diversified and solid.
Just like you retirement portfolio should be.

*********************************
Ponzie is right. There are more than 50 Schedule 1 banks in Canada. Plus some big credit unions as he mentions.

Even with the big 5 actually that’s more major players than many industries in our economy.

How many big grocery store chains in your area? How many big telco providers?

How many major brands of gasoline?

How many major movie theater chains?

How many big parcel delivery firms?

I think most of the answers are 5 or less.

For whatever reason, having 5 big competitors is not low compared to many industries. The profit of banks is not primarily because of few competitors. It may be because once we choose a bank we tend to stick around /bend over.

Banks are indeed protected from foreign competition. But why they don’t compete more fiercely against each other driving down profits is a bit of a mystery. Quiet collusion? Lazy consumers?

#86 crowdedelevatorfartz on 11.25.21 at 9:47 pm

https://www.cbc.ca/news/canada/calgary/suzuki-pipeline-apology-blown-up-1.6262738

One wonders when everything everyone says in Canada will be immediately followed by a retraction and an apology.

Raining like crazy for 6 hours and counting,…..sorry.

#87 Doug in London on 11.25.21 at 9:58 pm

Rather than buying a second property, if you already have one or more it would be a good time to sell them to the seemingly abundant greater fools out there. The market out there has lost all sanity. As I said before, if you absolutely MUST buy property in this market then buy a REIT.

#88 Reality Bites on 11.25.21 at 10:05 pm

#71 Shawn Allen on 11.25.21 at 8:07 pm

**************************
Could it be because a lot of small businesses needed more like $40k and $10k would not have kept the wolf at bay?

This is an investment personal wealth site. Did you forget to own bank shares directly or indirectly?

And so what if the economy is “rigged” in certain ways? What does that mean? What stops you from getting on the right side of that? You must play the hand you are dealt. You must strive to improve your finances in the world as it is.

Circa 2009 this very blog was filled with laments that the stock market was rigged. No one had made money in ten years etc. There followed 12 (and counting) mostly fat years in the market. Money was made like falling off a log. Same in real estate.
**************************

So…shouldn’t they have gotten more than $10K if their business was being shut down against their will and they needed more? Was government shutting them down and putting them in debt to boot?

And yes, but is that how it goes? Profit at other’s misery? Winners come at the cost of losers you know, and who are they? Not people, right? Not lives. Not our problem. Screw them – we got one in the W column!

I hear the point you’re making, but in situations like a pandemic, honestly – profiteering of any sort is quite repulsive – on strictly ethical humane level – is it not?

I will say this to you – I don’t hold people who brag about gains over the pandemic past 2 years in high regard. Shut up and be quiet about it. It’s nothing to brag about and hold up as a point of pride.

#72 Sail Away

———

Even better. The sweetener turned it into a $60k loan with $20k forgiveable.

———

You know it Sail Away – the whole point was to make the businesses come to the bank and borrow, and you can be sure many borrowed what the bank would lend, and not the minimum $40K or $60K to get most back.

And so, small businesses piled on the debt. What is it now? $190,000 average debt for a small business in Canada as a result of this effort. Must be nice for the bank business loan book.

#89 willworkforpickles on 11.25.21 at 10:06 pm

The Fed will reposition their stance with rising inflation and rethink raising rates sooner than they had anticipated. Canada raises its rates in lockstep with the US to remain competitive in that it sends about 75% of their exports there.
Canada may take the initiative as they are currently and get the jump on raising a bit sooner than the US but won’t/don’t lag behind them.
The days are coming soon enough when the US will have to kowtow to foreign holders of US debt ushering in historically normalized interest rate levels. Canada will have no other choice but to kowtow to US rate policy.

#90 Robert Ash on 11.25.21 at 10:19 pm

I am not surprised that this trend is prevalent. I mean a family with a few decades of work ahead of them.. what are they going to do, GIC’s or Hand over the money to someone else, or invest in Real Estate, and you have some level of control, and it is self administered. The alternatives just won’t pay for retirement. So Garth can help, but of course there is hesitancy on the part of the high deposit folks, and the Limited Savings folks, can try to be Landlords. It is Financial Repression to manipulate, or install non market conditions, favoring one group over the other. It is the start of a large mistake. Kind of like MMT is starting to foment major problems.

#91 Smengy on 11.25.21 at 10:37 pm

@#34 Slim Pickens

“This developement was heavily promoted by real estate genius Ozzy Jurock.”

Ozzy will continue to be right until he is wrong. Then he will be off the radar living sweet on the left coast. Easy pickens for the last decade.

Don’t listen to me I have been a real estate bear since the
late 2000’s. Garth can back me up when I met him and I think Dorthy that cold night in Edmonton. I think she was taking attendance. I might be wrong but that’s how I remember it.

#92 Smoking Bear on 11.25.21 at 10:43 pm

I know you hate any opinion not sutured to the ass of the climate change juggernaut, but? Can it be true that man has no power at all to change anything, and except for the fund raising part for wealth transfer to poor nations, the climate hysteria is out of control.

Read about some facts about the human folly of renaming an occurring jet stream bringing rain to a climate emergency and atmospheric rivers. History has been around a lot longer than the David Suzuki’s of the world, there words by comparison, hoist on their own petard.

https://financialpost.com/opinion/terence-corcoran-a-human-mistake-why-the-b-c-floods-are-not-a-climate-change-issue

#93 Ben Graham on 11.25.21 at 11:03 pm

And that way lies Sorrow.

#94 willworkforpickles on 11.25.21 at 11:27 pm

Those talking how RE always goes up in value…always has and so it always will, are quite flawed in their thinking. Flawed in the “always will” aspect of it.
Never in history have circumstances with easy money (QE…rates,etc) existed like this before. Those very factors changed it all. US Debt to GDP ratio’s have never breached sustainability levels before as they are doing currently… and with the US dollar being the worlds primary reserve currency, foreign holders of US debt are becoming nervous over the US ability to pay indefinitely.
Rates will rise and remain there to accommodate further spending and debt creation until US sovereignty itself ceases to exist. Canada won’t escape the fate of the US.
Property values will continue inflating for a little while yet until rates do adjust.

#95 Drinking on 11.25.21 at 11:54 pm

#92 Smoking Bear

I basically said the same thing yesterday but was not posted.

Again, a great big thank you for all of those that helped me get back home. Canadian empathy is what keeps me going, I love Canadians.

Being a tourist in B.C, lately and experience the latest crisis was an eye opener. I have been travelling to that province for close to fifty yrs now, have I seen a difference on how things are managed and blamed on climate crisis?? you bet, no different then any other province, climate changes, always has always will, do humans have a an affect on it, sure, mostly out of greed. Try and control climate without everybody getting on board is a waste of time, driving past mountain ranges that use to have a full forest and now a partial small section that is suppose to control a vast amount of water going through it thinking like a full forest would is just insane. Allowing deadfall to just gather and burn is just as foolish. Our natives had a smart system regarding this but now it is all about greed and building in past flood plains. None of this makes sense.

A majority of Canadians get this but unfortunately are controlled by hypocritical SUV or Plane chauffeured especial interest groups (hmm Suzuki??) that do nothing for a community except get there five minutes of exposure on Network TV. So many that I have talked to say that the media is the enemy.

Spent a couple of weeks in a different Province and was amazed of the difference styles in the media. It had nothing to do with the people that helped me and there opinions. It had all to do with different media organizations competing with the most sensationalized crap they can put out there not reflecting on how people actually thought.

Thank whom ever that most Canucks can read between the lines!!!!

Canucks just need to think for themselves again and ignore the vastly incorrect info directed to them, go out and see for yourself and then make a judgment call. So many lies out there!!!

#96 Vic&Van on 11.26.21 at 1:26 am

Prices are going crazy in the suburbs and small towns of Canada. However, that’s not so in the condo markets of Downtown Vancouver. Prices are up quite modestly at 5-10% year on year and just getting going over the 2017/2018 highs. For the $2,500,000+ true luxury condo market, prices are completely flat. Not overvalued or out of control.

I would not say there is an out of control real estate market in Downtown Vancouver and, hence, do not believe a correction is coming to that market any time soon. In fact, that is probably the place to buy right now.

Point is that there is not “one” real estate market.

#97 Don Guillermo on 11.26.21 at 2:13 am

#57 Ponzius Pilatus on 11.25.21 at 6:34 pm
#44 DG
My favorite Cash song (except of course when the Flames win and they play “Ring of Fire”) is his duet with Dylan “Girl from the North Country Fair”. I can put my noise cancelling head phones on and get lost in it.
————–
Well, I give you one better:
Cash and Rod Stuart:
Country Comfort.
I don’t have the fancy noise canceling head phones.
What makes them special
*****************************
Sometimes when I’m in my hammock listening to music I like the headphones to cancel the waves rolling in. After that I take them off and let the waves lull me to sleep. Cash and Stuart … I’ll check it out. Thanks.
************************
#60 Barb on 11.25.21 at 7:01 pm
#42 Don Guillermo
Never drove to Vancouver or Calgary … approx 8 hrs to either – too arduous.
————————————
#60 Barb on 11.25.21 at 7:01 pm
Arduous? Total eye candy!

I’m talking 1960’s as a child.
***********************************
#53 the Jaguar on 11.25.21 at 6:24 pm
Wellum. I told myself not to post further until I returned from the beach. Behave. Still waiting in anticipation of airport transport. Impatient, but unable to take the bait Garth has put out. Enough said.

But DonG reeled me in. The best John Prine tune was ‘Speed at the Sound of Loneliness’
*****************************
Oh yes Jag, that’s another favorite. JP has so many greats. Your beach trip will be awesome! Enjoy!

#98 willworkforpickles on 11.26.21 at 3:59 am

Sellers: You have 4 more months. Or hold for lower prices.

#99 Wrk.dover on 11.26.21 at 6:05 am

No airlines, no hotels, no retail rental reits I told my financial advisor.

If only….

Here we go again!

#100 willworkforpickles on 11.26.21 at 6:31 am

This just in…
America is losing its mind and control of its streets.
Unless all retail businesses close shop and blow away, spontaneous rampant lootings now the norm daily on American streets will escalate wildly. Many are saying in large urban locales all across the US that street crime is worse every week. Street bandits know that in many US states that if they keep the value of the merchandise they steal at each store to under $950, they won’t be charged with a felony even if they are caught. Street bandits/smash and grab artists have amassed and looted a half dozen retail stores a day keeping their individual take under a G note each. Just one group in now growing numbers of marauding gangs across the US can and are doing extensive damage daily, a statistic that is growing in numbers everywhere…it is growing worse by the week.
The real madness in it all is the chit hasn’t even hit the fan yet where real civil unrest is expected to blow the lid off of whats left of law and order. A food price inflation meltdown will be enough of a spark to ignite it.

…now – back to your regular programming.

and…(don’t worry Canada…JT’s got your back)

#101 Kirk on 11.26.21 at 6:49 am

So with this new super variant, all of a sudden rate hike bets are off.

It is amazing how quickly the tone changes.

They will try and delay rate hikes for as long as they can.

#102 crowdedelevatorfartz on 11.26.21 at 7:11 am

@#91 Smengy
“Ozzy will continue to be right until he is wrong. Then he will be off the radar living sweet on the left coast. Easy pickens for the last decade.”

+++
A decade?
Ozzie has been flogging the real estate mule for at least 35 years.
In the mid 80’s when everything tanked in BC he was pumping RE in the States.

“It’s always a good time to buy”…..somewhere.

#103 crowdedelevatorfartz on 11.26.21 at 7:19 am

Is the surfing good in Tofino this time of year?

https://vancouver.citynews.ca/2021/11/25/trudeau-bc-visit/

#104 Wrk.dover on 11.26.21 at 7:20 am

I just learned from last nights PBS newshour, 6.75 billion of cash AND 24% of PG&E shares are now held by survivors of the Cali campfire.

This confuses what NonPlus has to say about notational values not being accessible as a liquid asset.

Those shares changed hands in a fluid manor as an asset. Liquidity.

#105 Do we have all the facts on 11.26.21 at 7:37 am

I find it interesting that using equity in your home to invest in real estate is considered risky while borrowing funds to purchase stocks at a time when the ten year average P/E ratio of the S&P 500 is close to 100% higher than the 19.6 average P/E ratio of the S&P achieved over the past 70 years is just what the doctor ordered.

I get that low interest rates have made investing in stocks very attractive and that most companies issuing stocks are profitable but using borrowed funds to purchase assets that appear to be overvalued based on corporate performance over the past 70 years has considerable risk attached.

You can hardly call performance of the North American economy over the past 20 years as a shining example of consistency. One year ago the market capitalization of the S&P 500 was $27.1 trillion. Today the market capitalization of the S&P 500 stands at to $39.1 trillion, an increase of $12 trillion or 44.3% in just one year. Does that look like a sustainable scenario to anyone.

This blog offers a wide range of very sound advice and advising against the use of funds borrowed through a HELOC to invest in equities during periods of extreme volatility seems to be warranted.

Leverage through the use of borrowed funds to purchase any type of overvalued asset usually ends in tears.

The blog has not advocated buying individual stocks with borrowed money. Ever. Regardless, nobody takes investment loans with 20x leverage. There is no valid comparison to 5%-down, 95%-mortgaged real estate. – Garth

#106 Steven Rowlandson on 11.26.21 at 7:42 am

“Now, you can’t blame folks for doing this. It’s irresistible. Households are addicted to real estate, unable to break the habit and enabled by bankers, brokers and delusional, floundering policymakers.”

Indeed , how can sheep not follow their shepherd?
When the shepherd is a wolf the flock is only so much meat.

#107 the Jaguar on 11.26.21 at 7:45 am

More bad news. And BC is not even out of the woods yet. (snippet NP):

“The government of British Columbia and federal officials did see this coming. It was a known, uncontested and scientifically solid prediction. The 100-year-old system of dikes and networks that protected the areas, while frequently updated and improved over the decades, would inevitably fail, and likely in a catastrophic manner.

They knew the floods were coming — and climate change had nothing to do with it.

Another indicator that “they knew” was identified the other day by Tyler Olsen, an intrepid B.C. journalist with the Fraser Valley Current. “A doomed Sumas dike failed as predicted. Many other levees could be next,” said the headline on Olsen’s report on a five-year-old engineers’ inspection of the Sumas dike. They warned “the dike was two feet lower than it should be” and would be unable to stop flood waters if and when the Nooksack River breached its banks.

The dike, said the engineers, was “substandard,” and needed to be updated. Dike overflow “is expected during the Nooksack River overflow.” And so it did overflow. Olsen asks the logical question: “Why was the Sumas dike never fixed?” One reason is that “its inadequacy is incredibly common across the lower Mainland.”

#108 westcdn on 11.26.21 at 8:18 am

Beware the ids of November – advice I took. I am ready to pounce on opportunity. Fear is the most powerful emotion but not to be ignored. Greed makes an appearance once fear is diminished among other things.

The front running speculators are moving to the hills and trying to take their loot with them because a new Covid variant has been found. Out come the experts and grandstanding politicians with their proclamations. They believe their own hubris and enjoy selling solutions for everyone else. They think they be gods but I think mental midgets. Yet, they are not to be trifled if you value your butt.

Hitler found his brown shirts. These people have their equivalent. Tragedy of the Commons is a story that repeats itself too often.

I look at pictures of “shamans” during the the days of the Black Death where they wore gas masks that made them look like oversized crows. The beaks were stuffed with herbs, moss and whatever they thought might help in the mistaken belief that the plaque was caused by evil vapors.

Today, I think people consume far too much sugar, salt and processed foods (empty calories) that makes them vulnerable to Covid. We were not designed for the volume of that stuff. You are not going to lose weight and get healthier by sitting on a couch eating cheezies.

I need a nap as I am ranting too much besides I will need the energy to chase later today. I will take my best shots armed with my opinions of likely outcomes.

#109 Summertime on 11.26.21 at 8:21 am

It is amazing how math works in real life.

Apparently in 20 years with 1-2 % yearly inflation, a house worth 250 k is now worth 1.8 mil in Toronto.

Uber leverage of leverage with every incentive by policymakers and regulators for prices to keep rising. While issuing ‘warnings’ about the risk and record levels of debt.

I have been hearing that for over 15 years.

The debt dealers making huge profit while ‘warning’ the debt addicts about the risk.

HELOC is just one of the vehicles. CHMC and government policies being others.

The hypocrisy is that they call this ‘affordable housing’ policies.

With real inflation in double digits already we have a bunch of clowns at BOC talking about potential rise in rates in steps of 0.25 % to potentially 1.5 – 2 %.

Yearly indexation of benefits at 2.4 %

It would have been funny and pathetic, if not was not criminal and outright theft by lying con artist the lows of which the world has never seen.

#110 westcdn on 11.26.21 at 8:22 am

I usually don’t correct myself but plaque is too embarrassing. Should be plague.

#111 Do we have all the facts on 11.26.21 at 9:21 am

Garth your blog has been promoting the purchase of ETF’s for some time now and while you have never promoted the use of HELOCs to purchase ETF’s the substantial increase in market capitalization over the past year indicates that HELOC’s loans have contributed to the extrinsic value of many ETF’s today.

I was only suggesting that this blog might caution against the use of HELOC loans to purchase any asset that appears to be overvalued when measured against well established metrics. A 44% gain in market capitalization of the S&P 500 in just one year makes the average increase house prices look like an under achiever.

There is little doubt that HELOC loans contributed to the increased value of ETF’s over the past two years. The high level of volatility combined with a potential increase in interest rates suggests that this may not be the time to use borrowed funds to invest in any asset class that appears to be overvalued.

Obviously I do not share your optimism over the short term future of the S&P 500 but I fully agree with your
assessment of a pending correction in the residential real estate market.

I was only voicing an opinion based on established metrics and historical precedents. Only time will tell if my opinion had any substance.

Total HELOC borrowing is $226 million. Mortgage borrowing is $1.7 trillion. Most HELOCs are used for real estate financing. You just made this fear up. – Garth

#112 Dharma Bum on 11.26.21 at 9:26 am

The more that the government or the regulators try to tinker with the housing situation, the worse it will get.

It’s a complicated situation. The geniuses in the government think they can figure out the formula. They think A+B=C.

Dummies.

The ripple effect of their dicking around with economics that they don’t fully comprehend will be earth shattering.

It’s not simple math. It’s more like quantum physics combined with high level chess.

If you understand those types of things, you don’t go into government.

Disaster awaits.

Silver lining: the rich will get richer.

#113 crowdedelevatorfartz on 11.26.21 at 9:31 am

@#107 The Jaguar
“Olsen asks the logical question: “Why was the Sumas dike never fixed?” One reason is that “its inadequacy is incredibly common across the lower Mainland.””

++++

Yep.
They have repaired the 100 meter breach in the one dyke and ….amazingly….. the water levels in the Sumas (Prairie( Lake) are ….dropping.

The condition of the hundreds of miles of Dykes in Richmond, Delta, New West, etc etc etc have been a political football that has been punted around for Decades.
Thats why I live in the heights of Burnaby …… and Ponzie……. lives in the flood plain with the leaky dykes.

#114 Politicians on 11.26.21 at 10:14 am

#112 Dharma Bum

A few key points about politicians:

1. The want you to think you’re smarter than they are.
2. They don’t mind being called dumb – it also conveniently makes it harder or the public to assign blame to them.
3. Thus – they really are smarter than they appear.
4. They know EXACTLY what they are doing and have high certainly of what the likely outcome is going to be.

#115 Polozified on 11.26.21 at 10:22 am

I don’t see how Ottawa could simply not allow people to deduct interest used to generate income, unless they forced all amateur landlords to register businesses to manage their rental properties.

Which is equal amounts smart and stupid.

#116 millmech on 11.26.21 at 10:26 am

Garth
You should have changed the P to an F in the blog heading, way more accurate.

#117 the Jaguar on 11.26.21 at 10:28 am

@#111 Do we have all the facts on 11.26.21 at 9:21 am
‘There is little doubt that HELOC loans contributed to the increased value of ETF’s over the past two years.’ +++

May I respectfully suggest that the most common purpose of these HELOC loans is debt consolidation. All that copious high interest debt accumulated by peeps who are unable to live within their means or understand the notion that less is more. That quality trumps quantity. That what is essential is invisible to the eye. Other uses are made once the peeps digest the existence of availability on limit. New car (bad idea) or a rental property. Of course the other debt returns because the lesson hasn’t been learned. That’s why we ocassionally see press releases about how indebted Canadians are…..

Or maybe I am just cynical.

#118 Sail Away on 11.26.21 at 10:34 am

Ah, I do enjoy a heavily red day on the markets. Pile free cash into the hardest-hit sectors and ride the volatility. Vax stocks and APT flying.

#119 millmech on 11.26.21 at 10:36 am

Justin should not be out here for at least another month January will be much worse.
https://www.surf-forecast.com/breaks/Tofino

#120 Quintilian on 11.26.21 at 10:42 am

#73 Ponzius Pilatus

#85 Shawn Allen

“Banks are indeed protected from foreign competition.”

Not just protected from foreign competition but from risk which is transferred to the taxpayer.

Unprecedented liquidity was pumped into the banks by the BOC through MBS and CMB

I stand by my previous statement CMHC, BOC, OSFI are part of the cadre, beholden to the politicians.

These government tentacles were created with good intentions, but over time become instruments as others on this blog put it:
“A Rigged System”

Beware The Emperor has no clothes.

#121 Do we have all the facts on 11.26.21 at 10:43 am

Point of Order! The outstanding value of HELOC loans in Canada exceeds $230 billion not $226 million at stated in your response to #111 above.

In only the 2nd quarter of 2021 homeowners in the US withdrew $66 billion in equity from their homes and a portion of the HELOC funds withdrawn were invested in the S&P 500 and other stock based indexes.

Using HELOC loans to invest in the S&P 500 or the Dow Jones or the TSX is a reality, not a figment of my imagination as you suggested.

My only point was that it might not be a good time to use borrowed funds to invest in assets that appear to be overvalued.

Give it up. – Garth

#122 Sail Away on 11.26.21 at 11:02 am

#109 Summertime on 11.26.21 at 8:21 am

It is amazing how math works in real life.

Apparently in 20 years with 1-2 % yearly inflation, a house worth 250 k is now worth 1.8 mil in Toronto.

——–

False equivalence. A sector of the economy is not the economy. Let me illustrate:

$250k of Tesla stock purchased 10 years ago is now worth $70.5M.

And $250k of Nortel purchased 20 years ago is now worth bupkis.

#123 millmech on 11.26.21 at 11:11 am

Baytex and Meg Energy are on sale this morning, picking up some early Christmas bargains.

#124 GetBack2TheOffice on 11.26.21 at 11:17 am

Oops! Guess the back to the office mandate is on hold again!

https://www.msn.com/en-ca/news/canada/stock-markets-tumble-as-new-covid-variant-spooks-investors-oil-falls/ar-AARapRI?ocid=msedgntp

https://www.msn.com/en-ca/health/medical/chart-shows-how-quickly-the-new-coronavirus-variant-spread-in-part-of-south-africa-totally-supplanting-delta/ar-AARagXU?ocid=msedgntp

#125 Bdwy on 11.26.21 at 11:32 am

#118 Sail Away on 11.26.21 at 10:34 am

Ah, I do enjoy a heavily red day on the markets. Pile free cash into the hardest-hit sectors and ride the volatility. Vax stocks and APT flying.
………….
Thinking of adding to oil etf already overweight position

Also looked at a goregous 6 room mini hotel w pool in a still small beach town near sayaulita last nite. A 1br downtown van same price. Heloc that at 2.5 interest only and wait 5 years for a double. This feels a bit like vancouver in pre 2005 where a massive flow of foreign and domestic(mex city) is beginning. Half the ‘tourists’ we met in one town were here to shop and buy a house right now

#126 Ponzius Pilatus on 11.26.21 at 11:33 am

121 Do we have all the facts on 11.26.21 at 10:43 am
Point of Order! The outstanding value of HELOC loans in Canada exceeds $230 billion not $226 million at stated in your response to #111 above.

In only the 2nd quarter of 2021 homeowners in the US withdrew $66 billion in equity from their homes and a portion of the HELOC funds withdrawn were invested in the S&P 500 and other stock based indexes.

Using HELOC loans to invest in the S&P 500 or the Dow Jones or the TSX is a reality, not a figment of my imagination as you suggested.

My only point was that it might not be a good time to use borrowed funds to invest in assets that appear to be overvalued.

Give it up. – Garth
———————————
All I can say is “nobody, I mean nobody, has all the facts”.
Maybe God, if you believe in him.
All we have are little pieces of information, which we use to extrapolate based on our personal biases.
Of course, there are experts in a field, who are in a better position to analyze, predict and comment on what is happening around us.
And the funny part is, that the internet was supposed to give everybody access to the “facts and the truth”.
Quite the opposite has happened.
Just go to Wikipedia. Anybody can edit/change the information there.
People are getting lazy. Let’s just google it.
No original research is done anymore.
About the “facts” in history: the victor writes the history.
Always has been like that, always will be.
Ok, now off to my daily 10k steps walk.

#127 Barb on 11.26.21 at 11:37 am

#97 Don Guillermo
#60 Barb on 11.25.21 at 7:01 pm
Arduous? Total eye candy!

I’m talking 1960’s as a child.
——————————————
Got it, Don. Same time.
I was turned around in the back seat of the family sedan and waving to drivers of trucks we had just passed. No seat belt.

So, even eye candy is recency bias.

#128 Sail Away on 11.26.21 at 11:40 am

#117 the Jaguar on 11.26.21 at 10:28 am

…quality trumps quantity. That what is essential is invisible to the eye. Other uses are made once the peeps digest the existence of availability on limit. New car (bad idea)

——–

Hmmm…

I will always favour the new car. If there is one item critical to most people, it is their car. Why buy someone else’s used junk with unknown abuse when you can get new and treat it very well?

Of course wait for promotions. 0% financing, cash back, whatever is more beneficial. If you bought a new car last time, it will continue purring while you watch and wait for the stars to align. If you have a secondhand heap that stops working, it’s panic time.

The old saw about depreciation while driving off the lot is not really true with quality vehicles.

Buy new.

Or be like Ponzie and powerwalk on rutabaga fuel.

#129 Ponzius Pilatus on 11.26.21 at 11:53 am

122 Sail Away on 11.26.21 at 11:02 am
#109 Summertime on 11.26.21 at 8:21 am

It is amazing how math works in real life.

Apparently in 20 years with 1-2 % yearly inflation, a house worth 250 k is now worth 1.8 mil in Toronto.

——–

False equivalence. A sector of the economy is not the economy. Let me illustrate:

$250k of Tesla stock purchased 10 years ago is now worth $70.5M.

And $250k of Nortel purchased 20 years ago is now worth bupkis.
———————-
You’re making an excellent point, Sailo.
Stock picking is a fool’s game.
And only fools rush in.
And hind sight is 20/20.

#130 jakethesnake on 11.26.21 at 11:58 am

Funny how this entire post is irrelevant now that the new mutant, super-transmissible, freaky, cool, variant strain is on sale. Rates are gonna stay exactly where they are now until at least 1st quarter 2023. At least.
The plans of mice and men.

#131 Summertime on 11.26.21 at 12:03 pm

#122 Sail Away on 11.26.21 at 11:02 am

False equivalence. A sector of the economy is not the economy. Let me illustrate:

$250k of Tesla stock purchased 10 years ago is now worth $70.5M.

And $250k of Nortel purchased 20 years ago is now worth bupkis.

————————-

https://globalnews.ca/news/4775685/canada-national-wealth-real-estate/

76% of Canada’s national wealth is wrapped up in real estate.

https://www.lorettaphinney.com/b/blog/how-much-income-do-canadians-spend-on-housing.html

Overall, Canadians spend a little less than half of their earnings on housing at 45.9%.

The GTA and Vancouver end up skewing the Canadian average significantly. Here’s a breakdown with the average price and percentage of income spent.

Vancouver 79.7% $1,179,482
GTA 72.0% $759,241

That was in 2017.

————————–

I do not assume you to be really that stupid so I will attribute it to the sport of pointless arguing.

#132 Summertime on 11.26.21 at 12:05 pm

#122 Sail Away on 11.26.21 at 11:02 am

——————-

So something that you spent half of your income on increases by 15 % + a year and inflation is 1-2 %?

Hello? Which planet do you live on?

#133 MARKETS CRASHING!! on 11.26.21 at 12:05 pm

This is gonna be terrible! Bail why you can.

#134 Faron on 11.26.21 at 12:07 pm

Unless you think this is THE CRASH, MARKETS IN TURMOIL, buying SPX at hourly RSI below 30 is almost always a good idea. If you want confirmation, go to squeezemetrics.com and look at the DIX. It has been printing high for weeks now. If it prints high after today. Well, you probably already missed out.

Also, the Nu headline probably only had the impact it did because we are week after OpEx. Same headline two weeks ago would have been shrugged off.

Stay dry out there SW BCers.

#135 Wrk.dover on 11.26.21 at 12:10 pm

#113 crowdedelevatorfartz on 11.26.21 at 9:31 am
The condition of the hundreds of miles of Dykes in Richmond, Delta, New West, etc etc etc have been a political football that has been punted around for Decades.
_________________________________

When we visited in Ladner decades ago, every time a city bus went by the 1/4 million dollar house shook. We headed to dinner at the water front marina strip and had to climb a staircase to get to it. What do you expect can go wrong that I thought only I could see.

#136 Steven Rowlandson on 11.26.21 at 12:19 pm

Number #2 the reason why rates will not be raised is that doing so in a meaningful way will financially bugger all governments and real estate markets in Canada and the powers that be will not allow that.

#137 THE DANDADA on 11.26.21 at 12:26 pm

HERE WE GO AGAIN!!

#138 Sail Away on 11.26.21 at 12:29 pm

#131 Summertime on 11.26.21 at 12:03 pm

I do not assume you to be really that stupid so I will attribute it to the sport of pointless arguing.

——-

Well, that was uncalled for

#139 Prince Polo on 11.26.21 at 12:39 pm

#22 Honest Realtor on 11.24.21 at 4:02 pm
Property values will easily triple by 2040 as a result, in major centres.
Don’t miss out.

What a class act!

GTA housing going up 3X-4X from here by 2040 directly translates to:
A) monthly mortgage payments of $9K – $12K for a starter condo
B) 4-generation 100yr mortgage amortizations

#140 Summertime on 11.26.21 at 12:44 pm

#138 Sail Away on 11.26.21 at 12:29 pm

If considered an insult, I take it back. I just stated the obvious, that you are not stupid.

For the pointless arguing, given the numbers I firmly stay behind it.

How can inflation be 1-2 % if something that you send 50 % of your income on increased by 15 % yearly in a decade and a half – two?

Still waiting for an explanation.

#141 Don Guillermo on 11.26.21 at 12:46 pm

Since WTI is down over $9 USD today and while we continue to restrict Canadian oil to eastern Canada it’s a good time to reflect:

Over the past five years, Canada’s major suppliers have sold us tens of billions of dollars worth of oil at prices higher than which we sell ours for due to the price discount Canadian producers are subject to. Some of those suppliers include:

-United States ($51.2 billion)
-Saudi Arabia ($12.3 billion)
-Nigeria ($3.8 billion)
-Norway ($3.2 billion)
-Colombia ($689 million)
-United Kingdom ($1.4 billion)

Here’s a nice video of what’s happening at our 3rd largest import source.

https://www.youtube.com/watch?v=ANssSLjSXN0

#142 Wrk.dover on 11.26.21 at 1:02 pm

#127 Barb on 11.26.21 at 11:37 am
#97 Don Guillermo
#60 Barb on 11.25.21 at 7:01 pm
Arduous? Total eye candy!

I’m talking 1960’s as a child.
——————————————
Got it, Don. Same time.
_______________________________

Road trip eye candy I recall is several large hill side junkyards full of big black hump back cars an hour south of Buffalo around 1960-62.

#143 Meh on 11.26.21 at 1:36 pm

“It’s worrying” all of the reptiles that are making it all possible. Non existent money out of thin air.

Respectfully Garth, you are an intelligent and educated man, you know this.

#144 Sail Away on 11.26.21 at 1:55 pm

#140 Summertime on 11.26.21 at 12:44 pm
#138 Sail Away on 11.26.21 at 12:29 pm

How can inflation be 1-2 % if something that you send 50 % of your income on increased by 15 % yearly in a decade and a half – two?

Still waiting for an explanation.

——-

Nah. Facts are powerless against a shield wall of righteous fury.

Please proceed.

#145 NEVER GIVE UP on 11.26.21 at 1:59 pm

#12 OK, Doomer? on 11.25.21 at 3:52 pm
Not a fan of disallowing interest payments on second properties. It’s changing the rules mid-game. I think a better option would be ratcheting up interest rates for mortgages and dropping them for business loans.
==============================
In the 90’s Government was trying to encourage business loans with guarantees for banks.

Now they have hollowed out small business. Why help them when you can give it all to the big box stores and have wastelands for Main streets!
Canada and the USA are the most vapid soulless countries on earth!

You have to get in a car to get to any place to walk with street level businesses. Every city is now car dependent and our citizenry is Obese for it.

People want factories to come back from China but no one wants them in their back yard. 3 levels of Government regulate them out of business.

I contemplated starting a factory here but was promptly advised against it. Welding and painting will get you a world of hurt with inspectors and in your face regulations.

No problem. After examining all options I realize the reality is Importing from China is by far the best option as much as I find it distasteful…

Our Government talks out of two sides of their face!