So, the nothingburger budget came. It went. The kids’ TFSA is interesting. Not a lot else will have consequence.
Whither the market now?
As economists like to say when they get crazy and tie one on, “high prices are the cure for high prices.”
It’s true. The cost of residential real estate went nuts during the time of pandemic and cheap rates. It was bound to hit a wall. Thunk! That just happened. Especially in Bunnypatch, where the most insane increases occurred as fear of the virus and WFH had buyers streaming out of the tepid metropolis, competing for listings, paying whatever the rapacious realtors suggested.
Now we have insane valuations colliding with sharply rising interest rates. Playing a supporting role in the coming carnage are foreign buyers bans, land transfer taxes, vacancy taxes, non-resident taxes, plus new lending and industry restrictions. As we’ve detailed here this week, politicians just can’t keep their hands off houses. High prices and higher rates would be enough. But we also have diddling.
The result:
As mentioned, average detached prices in the GTA have eroded over 7%, or more than $150,000, in the past month. Sales are down year/year and every realtor will tell you that since the beginning of March the market’s been on a slow and steady slide.
Now look at Hicksville. Same story. Detached Houses in Cambridge, 100 km to the West of 416, just gave up $117,000 of their value in a month. The average price is still $1,029,740, but that won’t hold. After all, the same house cost $547,500 in 2019.
Ditto in K-W. Kitchener houses jumped 25% last year, and just started backing off. Detached homes there fell 6.5% in March. If this were to turn into a monthly trend as interest rates rise, then buyers next year could jump in for 80% less. Impossible? Of course. But half that could be a reality, depending on the course of the economy, central bank nastiness and political overreach.
Mike’s a local lawyer. “I remember being a young guy doing powers of sale back in the ‘70s,” he says. “Wait until those Heloc and high rate fixed mortgage rates hit mythically-appraised high purchased homes in a two or three years. We’ll be back to the late 70’s. Politicians will not have to worry about affordable housing – the market will do what it always does, and leave some carnage on the FOMOs.”
But, the house-pumpers cry, all this bear talk is mere hopium on the part of jilted buyers and discredited paleo bloggers. The world wants to come here. Immigration will ensure real estate stays in the clouds, no matter what the cost of a home loan turns out to be.
Bunk, of course. Governments are banning non-resident buyers – which does nothing to cool houses but telegraphs a message to the world from Canada: bug off. And a new poll from Leger confirms what many of us see – a deep disenchantment among recent newcomers to the Land of Maple. The survey found 30% of these families want to leave Canada within two years of getting here.
Says a veteran realtor who dares to post here:
“The absurd cost of shelter is the # 1 reason folks want to leave. We like to tell the world that we are the greatest country ever, but the reality is that many countries have caught up, and there are viable alternatives for both new and current Canadians. (And BTW, all of the competition has better weather). Immigrants are the life blood of the Toronto real estate market, their rent cheques make the Real Estate Boom possible. It will take more than a 10% correction in prices to ease the pain of providing shelter for one’s family. Demand reduction due to prices is real.”
Yup, the cure for high prices is high prices. Eventually this will catch up with us (if not already happening).
Meanwhile, rates keep rising. Next Wednesday will shock many. Five-year mortgages are already approaching 4%, and could well be 5% this summer, going into the autumn real estate season.
The last time mortgages were at that level, our realtor friend reminds, was 2013. The average property price in the GTA then was $522,951. Mr. Trudeau was gearing up for a federal election that he would win.
“We will make it easier for Canadians to find an affordable place to call home,” the Liberal platform for the 2015 vote promised. “We will review escalating home prices in high-priced markets, like Toronto and Vancouver, and consider all policy tools that could keep home ownership within reach for more Canadians.”
Well, that $522,951 average GTA property now costs $1,299,854.
Good job, guys.
About the picture: “Two weeks ago I noticed this husky perched expectantly,” writes David, “at Sky High Wilderness Ranch southwest of Whitehorse, Yukon Territory, Canada. You are welcome to use the image on your blog.”
147 comments ↓
Kids tsfa?! Say what? Don’t leave us hanging Garth!
Best url to review budget? Pls and ty
Here ya go. – Garth
On the Permanent Rolling Economic and Social Lockdowns designed to bring the (former) First World Countries to their knees. Don’t take my word for this.
Boris Johnson admits Covid lockdowns are STILL on the cardshttps://www.dailymail.co.uk › news › article-10699029
5 hours ago — Boris Johnson has admitted he ‘can’t rule out’ plunging the UK into a Covid lockdown again in the future, despite only just releasing the
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For Dolce & The Data Mongers.
“Australian FOIA Request on Covid Deaths reveals just 19% died from COVID-19 alone”
https://victoriantimes.com.au/exclusive-breaking-news-australian-foia-request-on-covid-deaths-reveals-just-19-died-from-covid-19-alone/
No one “who” bought in the bunny patch will sell at a loss…not for the prices they bought real estate for !!
The greater reality will be….renting homes in these areas at Toronto rental rates.
Sticky prices are a reality in Canada.
When the details on the Homebuyers’ RRSP/TFSA come out, I sure hope my kids can use it to buy houses in the US.
Here? Um… nope.
No one “who” bought in the bunny patch will sell at a loss…not for the prices they bought real estate for !!
The greater reality will be….renting homes in these areas at Toronto rental rates.
Sticky prices are a reality in Canada.
I know so many people that have fled Canada in the past couple of years – me included – because of the insane housing situation, it’s almost as if the Government has started to notice a thinning of the tax base. The folks I know who have left are all high-earning professional types, with their spouses included, were grossing $250-400k a year, that’s a lot of recurring income tax revenue that’s being lost, mostly to the US but other low-tax more affordable nations. My family alone will no longer be paying about $60k in tax to Canada this year.
In many cases they’re still working for the same employer in Canada, just earning and paying their taxes elsewhere.
Maybe my perspective is skewed from working in a well-paying profession, but it seems most of the new immigrants to Canada are much lower-skilled, minimum wage types that produce negligible tax revenue.
#2 Reddy on 04.08.22 at 12:40 pm
Best url to review budget? Pls and ty
———
Here’s another with highlights and summary from MNP:
https://www.mnp.ca/en/insights/directory/2022-federal-budget-highlights
Reddy, new here? FYI, you won’t find Bunnypatch or Armpit if you look for it on google maps Canada.
If this were to turn into a monthly trend as interest rates rise, then buyers next year could jump in for 80% less. Impossible? Of course. – Garth
_______________________________________________
I do not wish for 80% plop but fear it might happen.
It would be devastating carnage to everyone alas what can government do or anyone else for that matter. Real estate value is largely based on the sentiment and right now that sentiment is negatively changing + government is pushed into the corner with inflation (must raise rates to stave off or lose the value of the loonie) and seemingly crazy Putin is establishing gold standard for Russian Ruble(which does not help our case at all). If the market goes down 50% (only back at 2019 valuations) it will easily inflict major damage to the psyche of people and the sentiment of real estate being rock solid place to keep money invested vs money markets and the pendulum would swing into the oversold territory. Something like this has already happened in Ireland and Spain and not that long ago.
“Well, that $522,951 average GTA property now costs $1,299,854.”
Well noted.
i.e. – The value of real estate in the GTA has increased by 2.5 X times, in 9 years.
I cautiously foresee an increase of 3-4 X times over the next 15-20 years. (some think it will be much more)
That is a moderate projection, on balance.
I agree that Bunnypatch will suffer, possibly greatly. I don’t work there and don’t support the idea of forever WFH.
But in the GTA and a few other major centres, the RTW plus major immigration will put steady, sometimes sharp upward pressure on prices for at least another generation. Canada will have over 50 million people before most younger couples hit the age of 40.
Don’t miss out. Few investments will provide the stability and gains of well-selected real estate.
Interests rates aren’t going up for long. OECD predicts Canadian economy to under-perform for the rest of the decade. More asset inflation is guaranteed.
Not a big fan of supporting the chaining of intelligent, social animals away from their pack, in forced proximity to their own filth, for the amusement of tourists.
Or are you’re implying that owning a house is like being chained up in your own filth for the amusement of rich people?
Well! Could be crying wolf? Maybe but don’t forget – at the end of the story the wolf does come!
Seems to me that the government(s) is doing something interesting…talking about reining in house prices while doing nothing of the sort. Lotsa talk, but no real effort in this budget.
Government debts are sky high.
Maybe they are just trying to… inflate the debt down?
In other words, make the debt seem lower because prices (and eventually wages) are so high.
Blood in Bunnybatch.
Garth, it’s Easter.
You’re scaring the kids.
They only know one thing about RE:
“Prices can only go uppa”.
Imagine buying an average house in Cambridge, ON for over a million.
Table A1.1
Average Private Sector Forecasts
p. 242
Garth’s Budget link:
https://budget.gc.ca/2022/pdf/budget-2022-en.pdf
Inflation, GDP Growth, T-Bill/Bond Rate assumptions…one word:
Fantasy.
I wondered how they were able to forecast such a quick fix to their deficit projections.
Now I know.
Unicorns. Faerie Dust. Pot of Gold Rainbow + Leprechaun.
Farce.
Pray your CB can tiptoe between very high inflation and recession.
…queue Unicorns etc.
Canadian money supply charts on the Bank of Canada’s website:
https://www.bankofcanada.ca/rates/indicators/key-variables/monetary-aggregates/
Viva Europa. Viva von der Leyen. Slava Ukraini.
RUSSIA DELENDA EST.
https://twitter.com/vonderleyen/status/1512453309185114122
And ya, Viva il Canada.
For all it’s foibles still one of the VERY BEST countries on Planet Earth. Cold, rain and all.
Warm hearts and a lotta love see that thru.
i am curious to see how this all plays out.
my SW Ontario bunny patch locale is still looney tunes with no end in site. average house price and average rent sky high. It’s gotta be real tough on the working class.
Just to have one up on Shawn, read all 304 pages of the budget, and it falls a bit short of perfect, however it deserves A+ as a political exercise and B- as an economic blueprint.
It leaves the cons in the wilderness, and the Liberals have once again forced them into a corner, and bring out the rabid mouth foaming nut bars.
Professional sports figures to actors to everyday folks are getting into bitcoin. One of the main reason is that it’s value continues to increase.
Canadian dollar is losing its value at an alarming rate….its buying power is dissolving so quickly.
Real inflation is double digit….is central banks digital currency their answer? Just providing more control over individuals.
What is the new world order for fiat money?
blood in the pref market.
i guess high rates aren’t good for fixed rate and floaters…
why would someone what prefs when inflation in canada is 6%+ ?
perpetuals have negative real returns.
i’ll buy them when they start yielding CPI +1.5%
fixed and floaters will fall accordingly.
you can thank your central banks for this opportunity.
the Canadian 5 year is at a high. Wait until it passes 3 percent . If the BoC raises 50 basis points next week, you will really start to see houses hitting the market. Almost an extra 10,000 properties for sale in just a week
Trudeau’s political promises are like eating Kraft Dinner.
Distasteful, cheap, and a trip to the bathroom soon after is required.
I was in Mark’s to buy new overalls this am.
A guy came in panicked.
He needed 6 pairs of work boots in various sizes for him and his workers, and he had to catch a plane to Thompson , Man.
The Nickel Mine was hiring.
The more blood that courses into the storm drains out here in bunny patch, the better. Almost none of it is local. I want to see rapids. I’ve watched the local MLS listings grow from 2 pages in January to 10 pages today. I think they’re all too late at this point. A couple more years, and I hope to be right back at laughing at the GTA’ers like I was prior to 2020. :)
Happy Feline Friday!
Did you know:
Cats are nearsighted, but their peripheral vision and night vision are much better than that of humans.
Cats have nearly twice the amount of neurons in their cerebral cortex as dogs.
Cats will refuse an unpalatable food to the point of starvation. (unlike dogawful mutts, we have standards)
The world wants to come here. Immigration will ensure real estate stays in the clouds, no matter what the cost of a home loan turns out to be.
Bunk, of course. Governments are banning non-resident buyers – which does nothing to cool houses but telegraphs a message to the world from Canada: bug off.
….Of course there are loop-holes (exemptions) that will allow immigrants to purchase the recreation properties that the millennials will sell off due to the end of WFH….
Real Estate will continue climbing. As well as other assets. Pick your winner!
https://budget.gc.ca/2022/pdf/budget-2022-en.pdf
<>
14 years of cheap money has created this mess. To point blame exclusively at the Liberal party shows bias because this cheap money existed under the harper regime as well . Its important to note that the central bank is independent from political influence and their mandate is to keep inflation in check while maintaining growth.
When Trudeau became “PM”, the average price for a roof in my hood was 198K. After 6+ hellacious years of bungled Liberal fiscal policy, and dunce cap sporting Trudeau leadership? It’s now 611K.
Thanks Libs. Great job Justin. Too bad kids. I’m rich for nothing.
T2 opens mouth and all I hear is Charlie Brown’s teacher’s voice…..wah wah wah wah blah blah blah
#26 Felix on 04.08.22 at 2:44 pm
Cats will refuse an unpalatable food to the point of starvation. (unlike dogawful mutts, we have standards)
——-
Standards indeed. Our cat’s favourite food is a freshly-killed rat – starting with the feet. Fact.
#20 Quintilian on 04.08.22 at 2:15 pm
… however it deserves A+ as a political exercise and B- as an economic blueprint.
———-
I think I just heard my house increase in value by 100K…
I don’t care either way Quint, but if you wanna know why you can’t afford a nice sfd? Look above the “——-“…
Meanwhile in Niagara Region
Feb 2022-March 2022
Sales 630-830 up 31.7%
New Listings 864-1293 up 49.7%
Days on Market 14-11 down 22.2%
HPI Sales Price $798,100-$825,300 up 3.4%
https://www.niagararealtor.ca/public/Stats/2022/March%202022%20Media%20Release%20and%20Stats.pdf
Trudeaupe housing budget…..
“But the maximum contribution is $8,000 a year, up to a maximum of $40,000, which won’t get you much in the Greater Toronto Area.”
So you can save up to 40k tax free MAXIMUM in the account for housing that is increasing by more than that per year. Add increased immigration and a boost in Temporary Foreign Workers (who no doubt become “immigrants”) and we’re at the starting line again.
Some help; obviously a benefit for the banks to spend while you save a pittance on the now pie in the sky home ownership for middle class workers.
#24 crowdedelevatorfartz on 04.08.22 at 2:43 pm
Trudeau’s political promises are like eating Kraft Dinner.
Distasteful, cheap, and a trip to the bathroom soon after is required.
I was in Mark’s to buy new overalls this am.
A guy came in panicked.
He needed 6 pairs of work boots in various sizes for him and his workers, and he had to catch a plane to Thompson , Man.
The Nickel Mine was hiring.
__________________________________________
just waiting until Trudeau slugs the nickle industry as dirty and un-green. Does this excuse for a human being ever give up. He had to sleep with Singh in order to keep his job. Between Singh and Trudeau if they don’t eat each other then they surely will gut this country.
“We will make it easier for Canadians to find an affordable place to call home,” the Liberal platform for the 2015 vote promised. “We will review escalating home prices in high-priced markets, like Toronto and Vancouver, and consider all policy tools that could keep home ownership within reach for more Canadians.”
Well, that $522,951 average GTA property now costs $1,299,854.
Good job, guys.
————————–
There zero correlation as to what they say and what they do.
That’s always guaranteed.
Looks like a German Sheppard to me. Only the leveraged lemmings will feel pain. Debt is evil.
#24 crowdedelevatorfartz on 04.08.22 at 2:43 pm
“The Nickel Mine was hiring.”
That’s right Crowdie nickel is up 70% which means a windfall for the Lib’s coffers.
Why do I mention this?
Because this is a learning opportunity for you.
You are so concerned about the public debt, which is rather miniscule in the big picture.
But you are distracted by the shiny object and fail to realize the economic agony to come is for the idiots who gorged on debt.
It’s the private debt that will be the Chinese water torture.
Another teaching moment as in opposite in the Karate Kid again.
But I don’t mind teaching you. I hope IHCTD9 is reading.
#25 IHCTD9 on 04.08.22 at 2:43 pm
The more blood that courses into the storm drains out here in bunny patch, the better. Almost none of it is local. I want to see rapids. I’ve watched the local MLS listings grow from 2 pages in January to 10 pages today. I think they’re all too late at this point. A couple more years, and I hope to be right back at laughing at the GTA’ers like I was prior to 2020. :)
___________________________________________
I know of two couples on our street how have moved to the hinterlands from down here in central TO. They will not be coming back and they love it. Their children apparently now know that green-space out there can go on for many kilometers. They sold at a high rate and bought just around the time it when nuts but not ridiculously overpriced. Here where I live my yard is about 8 metres wide and I have parking for two at the best of times. I like my small old home here as my wife is a nurse downtown and she doesn’t want the commute. She has mentioned that the day she retires we are heading to the bunny patch. I’m good with that as I can still work from anyplace.
for the ever yapping bit-bros;
https://www.cnbc.com/2022/04/08/ron-insana-peter-thiels-sociopaths-know-something-he-doesnt.html
ron insana ain’t on tv because of his looks! prob the sharpest knife of the bunch.
oil etf/producers still spurting to new highs even as spot hovers under 100.
go oil! (pinwheels don’t work when the wind stops)
The survey found 30% of these families want to leave Canada within two years of getting here.
Obviously! Middle class families and businesses of all sizes are leaving leftist woke California in droves, why wouldn’t they leave Canada, especially immigrants who don’t have strong emotional ties to the country?
You ain’t seen nothing yet…
The Canada we knew and loved barely exists anymore and IMO it’s never coming back.
Did you know:
There are about 88 million pet cats in the United States, which makes them the most popular pet in the country!
Happy Feline Friday!
If they increased income taxes I would have actually left lmao I was like this close
Hate to see dogs on a chain, no matter how healthy they appear to be.
—————————————
“foreign buyers bans, land transfer taxes, vacancy taxes, non-resident taxes, plus new lending and industry restrictions.”
A shorter list might be what govt ISN’T doing to people.
“ in the coming carnage ..”
Hmmm interesting choice of words there…
So are we entering crash territory as against the previous estimate of a slow melt?
Funny you should mention Cambridge. Dad got out last year – I told him timing the top was impossible.. oh man he sure let me have it for the past twelve months or so. His two realtor buddies were in his ear constantly over his ‘mistake’. He’s over today visiting the grandkids and first thing he tells me once he settles in… “Have you heard what’s happening to real estate?
Thank you for convincing me to get out.” Had no other retirement savings.. but now his retirement is secure. He’s buying dinner for the family tonight :)
Your recent commentary Garth, clearly shows you don’t like the Liberals. I don’t blame you. I can’t imagine you being an NDP supporter, or a party that doesn’t have official status.
So if Pierre Poilievre wins the conservative race… gasp… could you see yourself voting for him?
Those are tough choices.
#31 Sail Away on 04.08.22 at 3:15 pm
#26 Felix on 04.08.22 at 2:44 pm
Cats will refuse an unpalatable food to the point of starvation. (unlike dogawful mutts, we have standards)
——-
Standards indeed. Our cat’s favourite food is a freshly-killed rat – starting with the feet. Fact.
——-
Our Cat has done a lot of killing, and a Rat is the only prey where the tail goes down with the rest of the thing. Squirrels, chipmunks, and mice all get tail gnawed off and left.
Incidentally, Cats in Ontario must be different than Cats in BC. Out here it’s head first every time. Ontario Cats seem to think heads are the best part of the kill.
Kids TSFA? Tell me more!
Dave on 04.08.22 at 2:17 pm
Professional sports figures to actors to everyday folks are getting into bitcoin. One of the main reason is that it’s value continues to increase.
‐—‐—————————————————-
Yes, but the only reason that the value of Bitcoin is increasing is becasue the people that are buying them believe that the value will increase.
#36 Philco on 04.08.22 at 3:29 pm
There zero correlation as to what they say and what they do.
That’s always guaranteed.
Time to wine-up dude. You missed this very early statement by the MoF.
…..“On housing, I’d like to offer one caution,” wrote Freeland. “There is no silver bullet which will immediately, once and forever, make every Canadian a homeowner in the neighbourhood where they want to live.”
Garth, do you accept pics of cute bunnies for the blog? Next time bunny anything is in the title, give me a shout.
#26 Felix
Dogs are far smarter than cats and actually have more than twice the number of cortical neurons. The fact that a cat ‘will refuse unpalatable food to the point of starvation’ is a pretty clear indicator.
Stories like these are so distressing:
https://twitter.com/ChrisWalkerCBC/status/1511500224589537280
https://www.cbc.ca/listen/live-radio/1-63-the-current/clip/15905323-ever-increasing-rents-hot-market-priced-place-call-home
As long as housing is a commodity and investment/speculation vehicle rather than basic human right there will be grief.
We are house poor and I worry for my kids.
I want to know more about the huskies chained to those wood tops.
pheww…what next? I need a break. These 1am booty calls are great but I needs to replenish. Build strength. rest ’till wind. Stock the accounts (fin. blog, after all). Full disclosure – technique mastery is KEY.
Neurogenesis for sure but what’s next? Everything else is just boring now. How will I ever satiate my new found needs? Become a multi-millionaire? nah. Find a job? Hahaha. Learn a third language?Oh, the effort. Go ‘hunting’? Interesting. Become content? Not yet :)….Hug more? definitely!
Way too may things to think about. I’ll nap on it.
Og
A new picture, thank Garth….
I can’t believe most of these comments on the post about house prices will still go up no matter what rates are that’s a lot of wishful thinking l seem to think that 80% is very doable my prediction in 5 years 50-60 % off plus 30-40 % inflation you see folk’s in the real world there are house shopper’s and then there are vulture’s there will be no pity
“Immigrants are the life blood of the Toronto real estate market, their rent cheques make the Real Estate Boom possible.”
———-
I have mentioned this a few times. Immigrants fuel the rental market. So do international students. This drives rent seekers to buy RE to profit from the unending supply of newcomers/students in Canadian urban centres. This is essentially why Trudeau did not do squat for limiting HELOC’s as a source for down payments on second properties, and why an investment property still requires only a 20% DP instead of 35%+ as it should be.
Trudeau ain’t ever going to undermine this scenario, because all these 700+ thousand worth of annual immigrants and students need a place to live. As it is, there are already 10-25 packed into a single SFD in places like Brampton. That’s cool, just keep this garbage out of bunny patch is all I ask. The GTA is well on its way to becoming an unliveable ultra-divided hell hole where only the rich homeowners prosper. Lets keep it confined to there please Trudeau.
In my opinion, Canadians would rather eat cat food than take a loss on their property sale. Canadians are just too obsessed with it.
Correlation versus causation
I’ve aged over 6 years since Trudeau came to power. Clearly it’s his fault.
Hi, my name is Karen Nimby, a boomer with a government defined-benefit fully indexed pension. I live in ‘Leaside’ in Toronto. Hey we just got a new LRT line through our neighbourhood, it’s kinda like a new subway.
No friggin’ way will we allow our pricey single family homes on my wonderful street get torn down to build 3 level or townhouses. I better go yell at my city hall people to ‘protect the character’ of my neighbourhood and keep my house price sky-high. That’s my motivation.
Screw you Gen Y,Z! When I’m very old, I’ll be selling my house to someone willing to win it in a bidding war. But I’m not selling now, as I’m headed to the cottage or Florida home for a month or so, leaving my house mostly empty.
So you need to stop buying Starbucks, pull yourself up, work harder, and you can one day afford your own home like my generation did.
@#35 James
“just waiting until Trudeau slugs the nickle industry as dirty and un-green.”
+++
Nah.
The Liberals need 40 million Nickle plated participation medals….THEN he’ll discover that Mining is “un green”.
@#64 NimbyKaren
Well said.
But you forgot to mention we Boomers also pull the wings off flies, eat small defenseless animals and steal candy from babies.
Other than that.
Bang on and proud of it!
:0
#64 NimbyKaren on 04.08.22 at 4:48 pm
Jeeze, Karen. You sound super interesting. I’m into hooking up and bragging with you sometime?
Og
A commodity boom and this turkey T2 still can’t balance the budget even with tax increases.
When the boom ends and stagflation takes hold all this debt won’t seem so comical.
Repeating the same sins as his father.
The rich are to blame for everything, that’s why Justin’s goal is to make everyone poor and thus more equal.
Housing is not a human right, maybe it’s a civil right.
Individual human rights should have priority over the rights the society or science, according to the UN
Article 3, #2
https://en.unesco.org/themes/ethics-science-and-technology/bioethics-and-human-rights
34 Penny – welcome back. Behave yourself :)
That kid’s TFSA thing is just a drop in the bucket for a down payment on a million dollar home. It could take years to save that up when half your paycheque goes to rent. I think this budget is a joke. If I were a millennial I would be damn mad.
And how does adding a tax on excess profits of the banks help anything? And that foreign buyer nonsense.
Good grief!
Garth, if Canadians want to leave to look for cheaper houses, just give ’em my number dude.
I’m gonna have more time to sell since I can’t go back to Hollywood for ten years now.
Send me some clients bro, or I will SLAP YOU SILLY!
#48 Aiks on 04.08.22 at 4:06 pm
Funny you should mention Cambridge. Dad got out last year – I told him timing the top was impossible.. oh man he sure let me have it for the past twelve months or so. His two realtor buddies were in his ear constantly over his ‘mistake’. He’s over today visiting the grandkids and first thing he tells me once he settles in… “Have you heard what’s happening to real estate?
Thank you for convincing me to get out.” Had no other retirement savings.. but now his retirement is secure. He’s buying dinner for the family tonight :)
——-
Your Dad’s got brains. Prime selling time between late 2020 to early 2022. I got a B+SIL who exited the KW market in mid 2021. Bought for 112K 2 decades ago, rented it out for 10 years, sold for ~700K lol! Suka’s! Absolutely awesome timing. Good thing too, since they got squat for investments. They’re in good shape now though! :)
I pity the fools who did not sell when they could have locked in epic gains.
Too late! [Swiper the fox voice].
#4 Jenna on 04.08.22 at 1:00 pm
No one “who” bought in the bunny patch will sell at a loss…not for the prices they bought real estate for……
Sticky prices are a reality in Canada.
—————————
Yes. Prices of RE are extremely sticky on the upside. The only reason RE will go down in price is if people are force to sell.
And the only thing that will forced people to sell is significantly higher interest rates or an employment recession.
Kinda like the double whammy that happened in the early 1990s.
Of course back then nobody thought house prices could go down. And from 1990-2000 we had a 60% correction in the inflation adjusted price of a Toronto house. That meant that the Toronto house that cost $300,000 in 1989, cost $120,000 in “1989 dollars.”
People can’t stop asking politicians to diddle with real estate either
Been reading for couple of years thanks
I know housing is difficult but has always been difficult. Remember morgage rates were 20% or more at 1 time. But we survived. The saying was you were morgage poor.
Also there are other parts of this country than the big city areas, thats you Toronto,Vancouver. Yes its rough but remember banks love,love home owners. So how about you stop beating the housing market to death and more info on investing and finance
Thanks
Maybe this time your right Garth, or maybe not ?….the answers are all around, you just have to wake up first, until then ….
#69 nimbykaren
YOU TELL IT GIRL – we worked hard for what we have so BOO HOO Millenials and othe kids – get your own life and stop whining – not our fault you were born when all the good times were over – you get whatchu get and then you die so stop blubbering and roll a fatty – this ain’t namby pamby daycare, this your existence deal with it UH HUH
What is bunnypatch?
#4 Jenna on 04.08.22 at 1:00 pm
No one “who” bought in the bunny patch will sell at a loss…not for the prices they bought real estate for !!
The greater reality will be….renting homes in these areas at Toronto rental rates.
Sticky prices are a reality in Canada.
…….
Not everybody has a choice as to whether they sell. Work transfers and people passing cause many houses to be placed up for sale.
Rent Seekers?
#61 IHCTD9 on 04.08.22 at 4:33 pm
“Immigrants are the life blood of the Toronto real estate market, their rent cheques make the Real Estate Boom possible.”
———-
I have mentioned this a few times. Immigrants fuel the rental market. So do international students. This drives rent seekers to buy RE to profit from the unending supply of newcomers/students in Canadian urban centres.
This is essentially why Trudeau did not do squat for limiting HELOC’s as a source for down payments on second properties, and why an investment property still requires only a 20% DP instead of 35%+ as it should be.
*************************
“Rent Seekers” ? Otherwise known as enterprising people trying to get ahead? Also known as “risk takers”. Most probably hard-working as well. All power to them.
Don’t fall for the headlines. This budget does nothing to stop foreign money/buyers from buying residential real estate in Canada.
The loopholes that allow their kids to declare $1K in annual income while driving Maseratis and owning a $10M mansion have not been closed. Foreign money will just continue to incorporate and avoid this ineffectual so-called “ban”.
A true foreign money ban would require a beneficial ownership registry. Didn’t hear about that in the budget.
The reality is that if Canadian families were the ones setting housing prices, they would haven’t gotten to such absurd levels in the first place. So I don’t share Garth’s optimism that home prices will come down.
This budget is pretty much as I expected – more virtue signalling that will, in practice, do next to nothing. The only real chance of home prices coming down is if interest rates rise meaningfully, and while central bankers talk incessantly about doing that, we’ve still had a single solitary 25 basis point raise to date. They’re terrified about what higher rates will do to their bloated bubble portfolios.
If a once in a generation global pandemic couldn’t kill the Canadian housing market nothing will. Even if rates go up substantially the market may cool but not crash. With high immigration, the laws of supply & demand will keep this market well inflated
“The survey found 30% of these families want to leave Canada within two years of getting here.“
——-
Aye, the honeymoon phase does not last forever. Eventually the meat and potatoes of life matter. Trudeau sat on his hands and let housing double under his watch. Looking at yesterday’s budget, it looks like the Libs are content to stand by and watch it double again. At least in urban Canada where newcomers tend to set up shop.
Everything matters. We got a great foreign reputation, but it’s not bullet proof. Regular working stiffs who immigrate here do have certain expectations. Trudeau has essentially killed off the possibility of these desires ever coming to fruition. Today, regular economic immigrants will rent till death. Not all of them will acquiesce. Long term exit of immigrants from Canada stands at 30-40% depending on who you read. Today under Trudeau, we’re probably looking at 50%+.
If the US ever revises their immigration policy to mimic ours, the vacuum created by folks exiting Canada will be strong enough to create thunder. In less than 7 years, Trudeau has swamped Canada with new folks, allowed a hideous level of immigration fraud to perpetuate, and allowed the COL in urban Canada to more than double. And he hasn’t even started to deal with his drunken orgy of spending yet. The Libs are a freak show, and are steam rolling the standard of living in Canada for anyone under 35, no matter where they were born.
I watch as more and more young unattached urban immigrants work 80-90+ hours per week to make ends meet in Trudeau’s Canada. It’s pathetic that he expects this kind of living from those leaving everything to try and build a life here. All work, no play, no house, garbage pay, crap jobs, shit life. They ain’t going to do this forever. Just a matter of time before the math starts giving them nightmares…
#68 Reality is stark on 04.08.22 at 5:11 pm
A commodity boom and this turkey T2 still can’t balance the budget even with tax increases.
——-
The Libs had a few smart cabinet members, but Trudeau either fired them or forced them to resign. God forbid you think about your constituents in Trudeau’s Canada. That’s a quick one-way trip to losing your govy pension. The list of these ex-Trudeau employees who might agree with this assessment is getting quite lengthy.
Frankly, I’d rather have a turkey run the show in Ottawa. We’d all be better off right now if we had a gobbler calling the shots instead of Trudeau. That’s a fact.
David Stockman predicts: “…whether it wants to or not, the Fed will crash the stock market.”
This makes sense. If interest rate rise dramatically the stock and bond market will implode!!
@#57 Wallflower
“I want to know more about the huskies chained to those wood tops.”
+++
Those are called “doghouses” and its how working animals in the North live.
@#64 NimbyKaren on 04.08.22 at 4:48 pm
Hi, my name is Karen Nimby, a boomer with a government defined-benefit fully indexed pension. I live in ‘Leaside’ in Toronto. Hey we just got a new LRT line through our neighbourhood, it’s kinda like a new subway.
No friggin’ way will we allow our pricey single family homes on my wonderful street get torn down to build 3 level or townhouses. I better go yell at my city hall people to ‘protect the character’ of my neighbourhood and keep my house price sky-high. That’s my motivation.
Screw you Gen Y,Z! When I’m very old, I’ll be selling my house to someone willing to win it in a bidding war. But I’m not selling now, as I’m headed to the cottage or Florida home for a month or so, leaving my house mostly empty.
So you need to stop buying Starbucks, pull yourself up, work harder, and you can one day afford your own home like my generation did.
–
leaside eh.
rant would be more believable if you claimed to be genX
@#43 pPrasseur on 04.08.22 at 3:46 pm
The survey found 30% of these families want to leave Canada within two years of getting here.
Obviously! Middle class families and businesses of all sizes are leaving leftist woke California in droves,
–
they’re leaving because cali is perpetually on fire.
Remember, you read it first here, 5% 5 year mortgage rate by September-2022, 6% 5 year mortgage rate by 2023. Those with 2% or lower mortgage rates better hope they don’t stay this high for years. Inflation and money printing, government and central bank manipulation of the real estate market and interest rates, bond markets is coming home to roost.
Smoke and mirrors. Still allows corporations to buy up real estate. Only hurts individuals.
#81 Shawn on 04.08.22 at 6:12 pm
Rent Seekers?
#61 IHCTD9 on 04.08.22 at 4:33 pm
“Immigrants are the life blood of the Toronto real estate market, their rent cheques make the Real Estate Boom possible.”
———-
I have mentioned this a few times. Immigrants fuel the rental market. So do international students. This drives rent seekers to buy RE to profit from the unending supply of newcomers/students in Canadian urban centres.
This is essentially why Trudeau did not do squat for limiting HELOC’s as a source for down payments on second properties, and why an investment property still requires only a 20% DP instead of 35%+ as it should be.
*************************
“Rent Seekers” ? Otherwise known as enterprising people trying to get ahead? Also known as “risk takers”. Most probably hard-working as well. All power to them.
—- –
Right. Hopefully they can figure out how to jam 30 international students into a single 1500 sf SFD instead of the 25 or so they are doing now. (No joke)
Trudeau: keep this $h!t confined to the GTA please.
Perhaps if we can set an immigration target LOWER than what T2 and the NDP want, there would be less competition for housing at all levels (rentals, condos, etc..), which will help the next generation of local kids. By making daycare more affordable, this would be an incentive to the next generation to have kids. We do need immigration, but perhaps not as much as what T2 and the NDP want.
And there you have it.
A 40 year interest rate down cycle is on its way back up at a time of unprecedented debt.
Bonds, stocks and real estate all reached their peak are of the ride will now begin their journey down.
This generation will find out what leverage really means.
#89 KLNR on 04.08.22 at 7:04 pm
@#43 pPrasseur on 04.08.22 at 3:46 pm
The survey found 30% of these families want to leave Canada within two years of getting here.
Obviously! Middle class families and businesses of all sizes are leaving leftist woke California in droves,
–
they’re leaving because cali is perpetually on fire.
——-
They’re leaving because of the cost. Same thing has been going on in NYC and Chicago (not on fire). Been years already.
Hopefully Trudeau is paying attention
Nah, after yesterday we know he ain’t.
YVRTeckGuy, my family of 4, myself, brother, 2 wives all are low to mid skilled immigrants from India but we don’t pay small amounts of taxes. Since we have been in Canada 7 years now working 50+ hour weeks have paid combined $578,000 in total taxes, from income taxes to CPP, EI, GST/HST, property taxes, gas, fuel taxes, alcohol taxes, land transfer taxes, many other taxes etc.
We have it all on a spreadsheet, keep track of all these taxes and have have used little to modest government services even during the pandemic. My wife and I are having a child in the next 4 months my brother not yet is younger but since we have accumulated quite alot of equity in our real estate and paying down debt, making RRSP, TFSA contributions, savings the government will be making more future taxes at higher rates with us. We all make modest incomes right now, $42,000 to $48,000 a year each which with 50 hours+ a week is not that much higher than $15.20 minimum wage right now.
#82 Concerned Citizen on 04.08.22 at 6:16 pm
Don’t fall for the headlines. This budget does nothing to stop foreign money/buyers from buying residential real estate in Canada.
The loopholes that allow their kids to declare $1K in annual income while driving Maseratis and owning a $10M mansion have not been closed. Foreign money will just continue to incorporate and avoid this ineffectual so-called “ban”.
A true foreign money ban would require a beneficial ownership registry. Didn’t hear about that in the budget.
—————-
They’re working on it, at least I hope they are.
https://www.nationalobserver.com/2022/03/18/news/canada-prime-spot-financial-criminals-set-shop-new-report
@#78 Douggie Tee
“you get whatchu get and then you die so stop blubbering and roll a fatty – this ain’t namby pamby daycare”
+++
Thats not a fatty unless you can’t handle it…..but it’s how we roll.
https://www.youtube.com/watch?v=-8hbUqhKM38
Boomers still love ya.
Keep bringing us the cash.
I just drove to Kensington market for some takeout.
What a dump this city has become. It is really noticeable. From the streets, to the business owners faces, to the people on the street. Dump.
I think the pandemic has really made many evaluate life, and smiles are gone. There are more people with long faces on the streets than ever.
And the traffic? My goodness. Friday at 7pm? For what?
#31 Doug t on 04.08.22 at 3:13 pm
T2 opens mouth and all I hear is Charlie Brown’s teacher’s voice…..wah wah wah wah blah blah blah
——————————————–
You should hear the non-fiance, blurred lined Cythia Freeland speak, you’d think she only spoke to two-year-olds all her life, with her child’s voice and hand gestures…I couldn’t listen to it…Ugh, like Canadians have a lower IQ. Just sick.
Imagine going to work for minimum wage at a restaurant to get gunned down during a robbery attempt in Toronto:
https://www.reddit.com/r/toronto/comments/tza8bi/student_from_india_gunned_down_outside_sherbourne/
Read the first sentence. Hmmm, a double negative. Probably a Butts recommendation.
@#64 NimbyKaren
Bravo, and if ya can’t buy here, then move to a city that is more affordable… I hear Alberta calling you.
Yesterday outside speaking with some Boomers, put their kid thru school, a nurse, living in the basement free with her boyfriend. Complained to her folks about doing 12 hour shifts at 28… What the???? Seriously?
The parents thought it was so awful for her, poor sapling… they moved here from Toronto —-guess what? the kids moved with, freeloaders… and she thinks 12 hours is too much?
When I worked for the airline, we all did 16 hours days 2 months straight for the OT. We fought over the extra time and were miffed when seniority won. I was 40 plus, took no days off because they were offering overtime – LIKE CHA-ChING!!!… and she can’t get her butt up for 12 hours, maybe pay back the folks, maybe move the lawn, maybe do her own laundry or cooking, hell, I would do 18 hours if my mom did everything for me.
Glad I didn’t have kids! I hear this kinda story over and over…. maybe when these brats are kicked out and cut off they will Man-Up!
PP can’t come soon enough, eh Garth?
Credit card debt in the UK and the US has increased dramatically. People more worried about eating and energy costs rather than buying an over priced house.
Nutty high prices neutering the housing lust. Recency bias is much like a boomerang. Duck!
What ever happened to risk mgmt? I guess that’s what they did in the ‘olden days’.
Our pharmacist in Kelowna left for Alberta. They were searching for a home for over 2 years and could not find one that was affordable.
Now we are facing closure of our pharmacy in Kelowna because even though we are offering 150 and a juicy sign on bonus with potential ownership stake, we can’t find anybody from anywhere in Canada who will consider moving here because of the high cost of housing. A decent house now costs 1.5 million here.
Maybe a salary of 250 per year will attract someone to the area.
The Year of the Strike continues.
Apr 1st
393,000 BC govt employees have 184 expired contracts.
The union wants a 2 year contract 5% and 5%
The govt wants a 3 year contract 1.75% , 2% and 2% plus a $1000 bonus.
A 1% increase will cost $311,000,000
The difference between the two adds up to about $2 billion dollars over 2 years.
The teachers contract expires June 30th
#64 NimbyKaren on 04.08.22 at 4:48 pm
Hi, my name is Karen Nimby, a boomer with a government defined-benefit fully indexed pension. I live in ‘Leaside’ in Toronto. Hey we just got a new LRT line through our neighbourhood, it’s kinda like a new subway.
No friggin’ way will we allow our pricey single family homes on my wonderful street get torn down to build 3 level or townhouses. I better go yell at my city hall people to ‘protect the character’ of my neighbourhood and keep my house price sky-high. That’s my motivation.
Screw you Gen Y,Z! When I’m very old, I’ll be selling my house to someone willing to win it in a bidding war. But I’m not selling now, as I’m headed to the cottage or Florida home for a month or so, leaving my house mostly empty.
So you need to stop buying Starbucks, pull yourself up, work harder, and you can one day afford your own home like my generation did.
=============
Hi. My name is Mona the millenial. All my life I have had it pretty good, apparently, but I am worried that may change.
My late generation Boomer parents (they prefer to identify as Gen X because Boomers suck) always put me first, gave up vacations so I could get braces they never got, spent oodles on Beenie babies, gaming stations, computers, etc and put money into RESPs (educational savings wasn’t the norm for their parents) so I could go to uni without debt (their parents said they were on their own after they finished high school).
They never had much, but the house they bought in 1989 in southern ontario is now worth a fortune. Yeah they had no furniture when they moved in cause their mortgage rate was 12% and no child tax benefit for me and my two siblings, but they had a house at least.
Too bad they sold that house before the house market took off in the 2010’s to move the family to a bigger city so I could go to university while living at home (I had some issues I was dealing with, but am fine now). They waited to long to buy another house, and now are renters, but I digress.
I deserve more. Always have. They treated me that way, so it must be true. Totally not fair I cannot afford a house. And don’t get me started on how it is their fault (well not theirs exactly but they were born when it happened) that climate change is going to shorten my life. Woe is me.
Wait – won’t the foreign buyer ban drive up rental prices? Immigrants have to live somewhere until they’re citizens
the wolf,
the alpha makes the kill
gotta ask smoking man
when will the us lose world currency status
Honestly this time is different.
>Boomers and gen X were in the right place right times of falling lending rates, hence the decades long aberration.
>We’ve never had legal buybacks since the 80s
>QE used to be illegal
>Indexes moving sideways for years signalling a fake top
>true interest rates was never negative
>’once in a generation’ events was not every decade
>Super high immigration with nearly zero new housing supply
>Obviously the FED & BOC won’t surpass 2% longterm
>The big banks benefit greatly from their own free lending bubble, however what if that ends?
I don’t know, everything easily investable seems to be in a super bubble, where is the top?
even with rent cheques from immigrants, almost all investment properties are in negative cash flow. it is the believe that RE prices always going up, which has been true since 2013 (when 5yr is at 5%). so RE has been a financial asset, no longer just a shelter. that’s why all policies from government have failed.
the tipping point will be the sentiment changes among investors, so watch the # of listings. the sharp up in last two years will make things worse, those investors jumped-in since pandemic started could be under water easily, which will trigger a snowball effective.
let’s see if Canadian RE is the asset which always goes up
I’m maybe not terribly surprised the budget didn’t bring the hammer down on housing. I see it this way- the inverse relationship between residential home prices and interest rates is well known and documented. Central banks have indicated (reluctantly) that they’re behind the curve regarding inflation and will be aggressively raising rates. As it is, the increases we’ve seen already in the bond market and their effects on mortgage rates have given many pause and has already begun to moderate prices- in a spring market no less. I’d bet my bottom dollar that they’re going to sit tight and let interest rates do the heavy lifting. After all, the BOC is a separate and independent body and their decisions aren’t that of government. From a political point of view, it seems like a smart move- let the BOC do what needs done to temper inflation and they become the bad guys when artificially bloated asset prices come back to reality.
From the BOC’s perspective, they’ve been scolding Canadian’s for years about the high levels of household debt and have been warning that at some point rates would normalize. They can certainly say “I told you so”.
As Garth has stated many times, a reduction in home prices would only critically affect the most over extended. I don’t feel bad at all about this as they did it to themselves.
At work today we were discussing the high rate of asset price increases of late and it was clear that for everyone present, inflated home prices have brought them no real and tangible benefit and their reduction would not really harm their household finances or long term plans. I suspect this small sample could be extrapolated to account for the experience of a large number of home owners in Canada.
NimbyKaren No friggin’ way will we allow our pricey single family homes on my wonderful street get torn down to build 3 level or townhouses. I better go yell at my city hall people to ‘protect the character’ of my neighbourhood and keep my house price sky-high. That’s my motivation.
Housing Affordability Task Force
Recommendation 3: Allow “as of right” residential housing up to four units and up to four storeys on a single residential lot.
https://files.ontario.ca/mmah-housing-affordability-task-force-report-en-2022-02-07-v2.pdf
The Housing Affordability Task Force ignores Ottawa’s Official Plan which real planners worked on for three years. For that matter it ignores Ottawa. So if land is so precious, it would be a waste to build multiple versions of four units. Four units doesn’t allow common spaces. Four units doesn’t allow for energy efficiency. Doesn’t allow for parking. It’s a planning disaster.
#11 Honest Realtor on 04.08.22 at 1:31 pm
—————
Recency bias is strong with this one lol
#4 Jenna on 04.08.22 at 1:00 pm
…The greater reality will be….renting homes in these areas at Toronto rental rates…
************
Not a good idea if you have… a mortgage. Not a good idea if you… don’t have a mortgage too!
Mr. Garth explained it this blog why is that so many times.
Probably need to explain/discuss pros vs cons again (Dear Mr. Garth – this is request for you! Please do/repeat this job again!) b’s situation sharply changing! New people coming on this blog and Mr. Garth will save money some careless persons with some updated explanation.
Actually greater idea will be sale asap
with price a little bit less (5%-10%) than similar property on market to attract new idiots.
Just tell them that you moving back home in Europe (for instance) and ask them to close deal end of the month.
#11 Honest Realtor on 04.08.22 at 1:31 pm
…I cautiously foresee an increase of 3-4 X times over the next 15-20 years. (some think it will be much more)
*****************
It will never happened.
Looks like you try to soothe yourself before bed. You (probably!) bought too many real estate.
Don’t relay on immigration. Coming people don’t have a money to buy real estate here. Canada will not attracting people anymore with huge property price and rent price. People coming and sooner or later start understanding that they wont to work rest of yours life to pay off to bank for 1 bedroom 500 sq. feet condo. They may came and stay here just for 4 years to became a Canadian citizen and receive a Canadian passport and than…. move back. I know at least 3 families which did that and it was good time in economy here.
DELETED
Re: the poor dogs in chains above. They’re sled dogs. Working dogs. They don’t need your pitty, they love to pull in harness. Ahhh, real life… Very different world than the one many of you enlightened key board warriors live in.
I couldn’t believe the number of people here who don’t believe that real estate could go down. As recent as 2008-2009 US real estate crashed.
My first 10,000 dollar 1 year term deposit earned me 1,300 dollars back in late 80s. My cousin sister told me she had to buy a house in TO before being shut out forever. She bought and then declared bankruptcy after 1989 crash when her house lost 50% of the value.
We might be in for a similar ride.
Holy braggarts yes everyone’s house market values went up. Only figurative when you sell it, ONLY. Live for your life and no Jones’ or you will always fall short. Lots of us are a million $$ richer. Only a moment in time. Consider happiness and who wants to sit and enjoy a coffee with you because you relax them. Time to get back to Life.
This political agenda was here before Trudeau. Thoughts? lol
IHCTD9 on 04.08.22 at 4:33 pm
“Immigrants are the life blood of the Toronto real estate market, their rent cheques make the Real Estate Boom possible.”
———-
I have mentioned this a few times. Immigrants fuel the rental market. So do international students. This drives rent seekers to buy RE to profit from the unending supply of newcomers/students in Canadian urban centres. This is essentially why Trudeau did not do squat for limiting HELOC’s as a source for down payments on second properties, and why an investment property still requires only a 20% DP instead of 35%+ as it should be.
Trudeau ain’t ever going to undermine this scenario, because all these 700+ thousand worth of annual immigrants and students need a place to live. As it is, there are already 10-25 packed into a single SFD in places like Brampton. That’s cool, just keep this garbage out of bunny patch is all I ask. The GTA is well on its way to becoming an unliveable ultra-divided hell hole where only the rich homeowners prosper. Lets keep it confined to there please Trudeau.
RE: #115 Overheardyou on 04.08.22 at 10:44 pm
#11 Honest Realtor on 04.08.22 at 1:31 pm
—————
Recency bias is strong with this one lol
—————
Yep.
It is difficult to get a man to understand something when his salary depends upon his not understanding it.
Upton Sinclair
#44 – Felix : Did you know how many birds are killed annually by those 4 legged, furry psychopaths you admire so much? A good cat is a…..
” The survey found 30% of these families want to leave Canada within two years of getting here.”
I didn’t leave within 2 years just because I had a high income profession. But I left as soon as I retired at 58 (and 15 years after immigrating) and now enjoy with my family a significantly better life in Portugal where the money I saved and invested while working goes a lot farther.
#99 There is some truth to Toronto’s decline. I see it as a consequence of an expensive City where the divide between rich and poor keeps growing and is on permanent display. Where my farm is, the contrast is all hidden in the hills.
#113 Rogerhomeinspector on 04.08.22 at 10:04 pm
This is correct in my experience as well.
The idea that everyone is overextended is false.
For the last decade, with rates so low, it’s been prudent to not pay off debt. Many people took that advice and reaped the rewards. Is it changing now with rising rates? Unlikely.
Home owners are generally wealthier, and more stable than renters. Almost everyone I know who bought real estate (I live in the gta), did it to raise a family and lay down roots. Are they happy their homes have increased in value? Well, yes, but do they reap many tangible benefits from it? Not really. Most people are content just living in their shelter and enjoying life. Paying rent is not considered a viable alternative for a number of reasons.
Like stocks, you only realize a gain or loss if you have to sell.
You buy real estate when you can afford to, not when your crystal ball predicts you should.
IDK
Another risk is younger Canadians moving to the US. I don’t blame them but it will hurt Canada’s economy. These younger Canadians can get a TN Visa and actually afford a home and earn USD.
#125 Cristian on 04.09.22 at 4:47 am
” The survey found 30% of these families want to leave Canada within two years of getting here.”
I didn’t leave within 2 years just because I had a high income profession. But I left as soon as I retired at 58 (and 15 years after immigrating) and now enjoy with my family a significantly better life in Portugal where the money I saved and invested while working goes a lot farther.
————
I have a few Gen X family members on both sides planning a similar exit. Since 3 out of 4 of our parents were not born here we can get their birth Citizenship through ancestry to allow a permanent exit. I have a bro who has already done so, and also has vacationed in some of the countries/islands where he can now live full time to see what it’s like. They’re not really cheap places, but much nicer if you like palm trees and sandy beaches.
Being Gen X, I got off and running before Trudeau came along and wrecked half the Country, so I could stay. There’s a lot to like about small town Ontario – I’ll likely stay here, but move north a ways.
@ #103 Satori on 04.08.22 at 8:52 pm
@#64 NimbyKaren
Bravo, and if ya can’t buy here, then move to a city that is more affordable… I hear Alberta calling you.
Yesterday outside speaking with some Boomers, put their kid thru school, a nurse, living in the basement free with her boyfriend. Complained to her folks about doing 12 hour shifts at 28… What the???? Seriously?
The parents thought it was so awful for her, poor sapling… they moved here from Toronto —-guess what? the kids moved with, freeloaders… and she thinks 12 hours is too much?
When I worked for the airline, we all did 16 hours days 2 months straight for the OT. We fought over the extra time and were miffed when seniority won. I was 40 plus, took no days off because they were offering overtime – LIKE CHA-ChING!!!… and she can’t get her butt up for 12 hours, maybe pay back the folks, maybe move the lawn, maybe do her own laundry or cooking, hell, I would do 18 hours if my mom did everything for me.
Glad I didn’t have kids! I hear this kinda story over and over…. maybe when these brats are kicked out and cut off they will Man-Up!
–
We are also glad you didn’t have kids.
One wisdom was not to accelerate the pay back debt when rates are low and instead invest. Will rates overrun returns? Do we flip once rates exceed expected returns of 6-7%?
#148 Sail Away on 04.08.22 at 10:52 am
#137 Bezengy on 04.08.22 at 9:20 am
#125 Sail Away on 04.08.22 at 12:24 am
#85 Satori on 04.07.22 at 8:55 pm
#15 an investor on 04.07.22 at 5:19 pm
———-
Some of us don’t believe they’re paying their fair share of taxes. If we had proper transparency, then we would know.
From the CFIB website
For example: You sell shares of a small business corporation in 2022 and make a $950,000 profit (also called capital gains). Without the LCGE, you would have to pay taxes on half of this amount, i.e., $475,000. However, seeing as the LCGE allows you to subtract $913,630 from your profits in 2022, you only pay taxes on ($950,000 – $913,630) x 50% = $18,185 rather than on $475,000.
You end up reaping major tax savings!
———-
???
Only residents of Canada are eligible for the LCGE. Residents are not foreigners. And for someone to sell a corp, someone else needs to buy it, which usually means that the corp is successful and beneficial to Canada. Otherwise why buy it?
Big picture.
——————
This is complicated stuff, way above my pay grade, but clearly the LCGE is being abused. The bottom line is that I believe profits from small companies foreign and domestic are involved with profiting from real estate and using loopholes to avoid paying their fair share of taxes. Changes are clearly on their way.
https://www.mondaq.com/advicecentre/content/3528/Proposed-CRA-Changes-to-the-Lifetime-Capital-Gains-Exemption
Structures designed to enable this outcome often use trusts when some of the individuals accessing the lifetime capital gains exemption are minors or not involved in the business associated with the property.
Ahhhh then never occurring, always predicted Canadian house price crash.
I have a friend who is a mortgage broker. I have known him since 2006. He is retiring.
I used to party with him (before the kids came along and made that impractical).
At the time I met him, he was just starting out. He had a method. He would buy a house, rent it out, and then wait. He would use minimal equity. As little as he could. When the price went up (it always did) he would put a HELOC on it, take out the increase in value, and buy another house. Then he would repeat the process.
I thought he was nuts. One drunken evening he admitted to me that he owed over $2 million dollars on 17 houses and he figured he would either go bankrupt or go nuts as the stress was killing him.
But he kept buying them.
Well, last week he retired. I caught up with him and had a long conversation with him. Turned out he had just sold his last house, a bungalow he picked up for $129,000.00 in Innisfil, Ontario. Sold it for $1,199,000.00. It had a big lot and was close to the lake.
All in, after taxes (which he had to hire a team of tax lawyers and accountants to figure out for him) he is worth north of $50,000,000 CDN.
All from this stupid game that he admitted was making him sick with stress, that he just could not stop doing, buying house after house after house.
So that’s the story folks. While I struggled my whole life to get my net worth up over the $5,000,000 mark through honest work (still struggling with that), this guy did it all on real estate speculation.
Will it all end? Who knows. We have a woke leftist government in power, and woke governments have shown themselves to be either unaware of, or indifferent to, classical economic theories (including the theory of the independence of the central bank).
Perhaps they will just appoint someone to print more money? Perhaps they will direct the Bank of Canada to stop raising interest rates?
At any rate, that is the story, if anyone cares. There was money to be made in real estate, if you were crazy enough……
@#124 T-Man
“Felix : Did you know how many birds are killed annually by those 4 legged, furry psychopaths you admire so much? ”
+++
There was a study a few years back and the estimate in North America alone was between 300,000,000 ( yes million) and 500,000,000 song birds, gulls, mice etc are killed by cats (domestic and wild) PER YEAR…
An out door cat is a literal killer.
https://www.cbc.ca/news/canada/british-columbia/cats-the-no-1-killer-of-birds-in-canada-1.3130437
Pollution, Global warming and habitat loss are blamed in the demise of Gulls world wide.
A 50% decrease in gulls world wide since 1960 and I’m sure most song birds are in the same situation.
“A Silent Spring” may not just be a book in the near future.
@#127 IDK
“You buy real estate when you can afford to, not when your crystal ball predicts you should.”
+++
And there in lies the problem.
Housing prices (values?) in Canada have been on and upward trajectory for 20? 30 years?
Mortgage rates ( essentially “rent” until its 100% paid off) have been on a historical drop over the last 20-30 years
Rock meet hard place.
Prices have reached the pinnacle of Greaterfoolishness.
Mortgage Rates ( rent? until its 100% paid off) are now rising.
All those people will wish they had a crystal ball when over the next 1-5 years its time for Mortgage renewals and the value of the mortgage is more than the value of the house.
We won’t even consider the amount of home mortgage “owners” that went all in on HELOC loans for flashy cars, flashy wedding for the brats or flashy vacations.
#99 Toronto Sucks on 04.08.22 at 8:24 pm
^Kanadian Kommunism, rolled out that cold winter week March 2020 has sunk in.
Traffic was due to Jays game @ Skydome.
It’s not so much that house prices will be going steadily down.
It’s more that the value of our currency will decrease so substantially that soon it will take twice as much cash to acquire the same dwelling.
Not that it’s worth any more.
So, ultimately, real estate is a pretty decent hedge against the dreaded inflation.
I wouldn’t abandon it altogether.
Unless it’s sucking you dry (i.e., you can’t really afford it because you’re way over leveraged to be in it), it’s worth hanging onto.
Besides, ya gotta live somewhere, amirite?
https://www.nbcnews.com/news/world/britain-one-putins-fiercest-critics-politicians-still-get-millions-rus-rcna22906
It is all about the money.
#135 crowdedelevatorfartz on 04.09.22 at 10:00 am
@#127 IDK
“You buy real estate when you can afford to, not when your crystal ball predicts you should.”
+++
And there in lies the problem.
Housing prices (values?) in Canada have been on and upward trajectory for 20? 30 years?
Mortgage rates ( essentially “rent” until its 100% paid off) have been on a historical drop over the last 20-30 years
Rock meet hard place.
Prices have reached the pinnacle of Greaterfoolishness.
Mortgage Rates ( rent? until its 100% paid off) are now rising.
All those people will wish they had a crystal ball when over the next 1-5 years its time for Mortgage renewals and the value of the mortgage is more than the value of the house.
We won’t even consider the amount of home mortgage “owners” that went all in on HELOC loans for flashy cars, flashy wedding for the brats or flashy vacations.
************
Those Helocs are the wild card…but we do know they are increasing daily. It doesn’t take many idiots to wreck a party for everyone.
It’s not just the rent but all the house maintenance surprises with no prior house inspection by the new purchasers. Yikes.
#132 Bezengy on 04.09.22 at 9:19 am
This is complicated stuff, way above my pay grade, but clearly the LCGE is being abused. The bottom line is that I believe profits from small companies foreign and domestic are involved with profiting from real estate and using loopholes to avoid paying their fair share of taxes.
———-
People often complicate simple things. I’m sure some jiggery-pokery goes on here and there. Same as anything involving people.
The home price slide as started, I remember well the 80’s when people were just packing their suitcases and walking away from their homes around the great smoke, when their mortgages came due at almost double the rates they had purchased for, (no value left in the home) banks did not want to finance no equity homes and deals were everywhere to be found in Ontario, it’s a cycle that may repeat itself or come close to it. Keep in mind, if a property increased by 100%, it only has to lose 50% to fall back to its original value. Garth is correct in saying Cambridge fell by 7% in a month, but in reality, the home lost approx. 14% of the owner’s gain. If you are renting, don’t be in a hurry to buy, hold on, better deal days ahead, unfortunately if you’re in a home now, your own home falls in price as you wait for the price drop on the one you want, “Yes” it’s a head scratcher.
Goes to prove that the only way to regulate real estate is to let market forces loose and stop Trudeau robbing the treasury with his free money thievery. The average 60 year rate is near 8%. This MMT bullshit is child’s play…..a notion for children.
#137 Dharma Bum on 04.09.22 at 10:19 am
So, ultimately, real estate is a pretty decent hedge against the dreaded inflation.
I wouldn’t abandon it altogether.
————————————————–
Agreed.
If you are happy, enjoy your home and neighborhood that is more valuable than taking the risk to say downsize and rent a condo packed with Mills above you until the ‘market cools’…. there is something to be said about having good neighbors too.
Renting is a whole other Beast. Sign a lease for a year and find out the walls are thin. The neighbors are cigar smokers or loud. Street noise. I don’t think many people factor all those things in as important, but they are.
Life is short, time is the only thing you cannot earn, so if you are going to spend time, spend it in a place you love. You can always earn money other ways.
The value of your home means almost nothing. It cost you money to have it. It isn’t cash in the bank unless someone buys it. This journey isn’t all about how fat your bank account is. If you have a huge house, can afford it, and feel good in it, keep it. It’s a lot healthier for you than selling your comfort for money and then taking a risk that you will end up living in a place where you are miserable.
We have all been there. I don’t think a person alive can say every place they lived in was wonderful. Likely why housing is such an emotional thing.
# 134 – crowdedelevatorfartz : Thanks for the information. I don’t hate the cute little fireballs. We had a Norwegian Elkhound who adopted a litter of abandoned kittens on the farm. She couldn’t have her own brood, due to being spayed. But she still had that motherly instinct. Dogs rule. God bless ’em.
Great articles lately, thanks Garth ! Well my buddy just cashed out of a typical subdivision house in Georgina, On for 1.25 mil and headed your way to Nova Scotia, already purchased something .. I guess they won’t care about the mortgage rate increase because they no longer have one… as for me at least I can say I’m renting a million dollar house! Hey never thought I would say that..
Can’t wait for Pierre to win the conservative race. Want to see him debate Trudeau, it’s almost too bad Trudeau won’t be around by then.
You might find this NFB doc. interesting Fartz.
Vancouver’s East side circa 1975:
https://www.youtube.com/watch?v=YeA-OMH57No