The plunge to come

It’s Friday. A good day to hate on Kumail.

“I’m an avid reader of your blog and have been renting a condo and saving the difference for a number of years now,” he tells me. “My fiancé and I are looking to potentially buy a townhouse in the Leslieville area as prices continue to drop.”

Okay. Understandable for those who have been watching the market and wanting a house for years. The average detached in TO is $450,000 cheaper than it was in February – but still north of $1.6 million. So does it makes sense?

“We make $500k annual total income, with that continuing to rise over the next few years as I’m in tech and she’s in healthcare.  Do you see prices continuing to nose-dive throughout 2023? Would you recommend buying or renting over the next few months?”

So I asked for details. Turns out K is 33. The soon-to-be-Mrs K is 28. The goal is a semi or townhouse for about $1,300,000. Here are the current assets: $325,000 saved for a downpayment, $165,000 in liquid investments and cash, plus a cottage worth $425,000 financed with a $305,000 mortgage.

First, the net worth situation. Today these Mills have liquid wealth of $490k and real estate equity of $120k for a total of $610k with $305k in debt. If they buy in Toronto and stick to the budget they’ll have $165k in liquid assets and $445k in real estate equity for the same total of $610k. But debt would swell to $1,305,000. From 19% of their net worth, real estate would zoom to 73%. Debt would increase from 50% of NW to 214% – at a time when interest rates are rising and real estate falling.

Does this make sense? Even for house-lusty kiddos raking in a half million annually?

Here’s the latest on what comes next.

RBC’s new report is pure gloom. “The Bank of Canada’s rate hiking campaign since March has added hundreds of dollars to mortgage payments that come with a home purchase,” it says. “This, along with the jump in property values during the pandemic have made it more difficult than ever to become a homeowner in Canada… the impact of higher mortgage rates has yet to fully run its course.”

Source: RBC, Bloomberg

The bank finds average people need to spend 60% of their pre-tax income (even if they have a 25% down payment) to carry a house. That’s epic. But in Victoria the number hikes to 67%. In Toronto, 83%. In Van, 90%. In other words, it is utterly impossible.

“The spike in interest rates since March—the policy rate is up 300 basis points to date with another 75 basis points on the way by year-end in our opinion—is raising ownership costs in every corner of the country… It will likely take years to fully reversed the tremendous deterioration that took place since 2021.”

K and his mate are not average, of course. They make oodles. But real estate’s price decline has only really started, as the bank suggests. The bottom is a ways off – at least next spring.

And here’s the Parliamentary Budget Officer weighing in. His conclusion: we’re kinda screwed. To be affordable to the average family, he reports, the average house price should be $494,952. Not the current $777,500. So real estate nationally is 67% overpriced. Yikes.

Even CMHC, in the business of heroic house-humping, is dropping its estimate of future price moves. There’s another 15% ahead, it says, as well as a “protracted drop” in market activity as the CB piles two or three more rate hikes atop the 300 basis points already moved. “We’ve seen that inflation has been more persistent than we originally anticipated and the Bank of Canada is taking more aggressive action, so we’re in the process of revising our forecasts,” the agency says.

Finally, you know things are dire when Re/Max alters its mythical market projections. From a sustained price increase in its last report based on butterfly migration changes and TikTok  influencers, the floggers now admit things are going in the opposite direction. Valuations will plop.

So back to Kumail.

Big incomes, great jobs, moderate debt, growing liquid assets, real estate equity already held, plus youth. Why would they want to mess this up? Why take on a million in debt? Why thrust three-quarters of net worth into one asset class? Why buy now when the price decline may have only just started? Why not wait six months and get a whole house for the price of half of one? Or stay renting, eschew the rising cost of debt and have millions in liquid wealth in a decade or so?

Logic says take a pass, K. I will not enable you.

About the picture: “Figured you need some more dog content for the blog,” writes Rose. “This is our buddy Gus who turns 2 in October (who previously made an appearance on the blog). He’s full of life and reminds us to not sweat the small stuff. Thanks for the free content! Sorry to hear of your crazy interaction with that biker the other week, and also the aggressive emails you’ve been receiving.”

111 comments ↓

#1 Shawn on 09.30.22 at 12:36 pm

Big immigration

The fact that Canada got 269,000 immigrants in the second quarter did not get much news coverage since it was released on Wednesday.

I’m in favor of immigration. But this was EPIC. At that rate we’d have a million in a year. Of course it was boosted by Ukraine. Still, it’s EPCIC.

This has to be positive for house construction?

https://www150.statcan.gc.ca/n1/daily-quotidien/220928/dq220928b-eng.htm?CMP=mstatcan

Over 157,000 of those were non-permanent residents, including a ton of students. Don’t get too excited. – Garth

#2 DOWn on 09.30.22 at 12:42 pm

I’d say definitely buy, they make loads of money.

Perhaps settle on a date to pull the pin and commit.
Garth suggests housing could be halved in 6 months so use that timing as a goal, no one knows when the bottom will be.

Go for it.
Your young.

Remember moving sucks if landlords or circumstances don’t work out plus it apparently takes years off your lives.

#3 Felix on 09.30.22 at 12:45 pm

Good advice. Stay liquid, invest, spend the rest on cats.

Happy Feline Friday!

Did you know:

Cats Dream! Cats not only spend most of the day sleeping but also dream in their sleep. Like humans, cats experience Rapid Eye Movement sleep, a stage where most dreaming occurs. Their dreams do not differ with that of humans since they also dream about day-to-day activities. A cat that is twitching, chattering and moving its paws while sleeping is most likely dreaming. The most significant indication of dreaming in cats is utterly slack and relaxed conditions. Cats may also sleepwalk but in reality sleepwalking only occurs in brain-damaged cats. Cats are likely to fulfill their dreams by chasing toys or convincing the owner to feed it again.

Cats navigate using sunlight. How a lost cat can find its way back home without a map remains a mystery to many people today. A cat is able to walk a long distance from its new home back to the former foster owner without getting lost. Cats have mental maps that not only store the memory of their paths throughout the day but also help them find their way in case they are lost. Cats also navigate by observing the angle and position of the sun and also may be calculating the polarization of the sunlight.

(*Dogs lack the intellectual ability to do any of the above)

#4 K Clone on 09.30.22 at 12:49 pm

Ironically, i am in the same boat as K, with the same income, and have a baby on the way. I may not have the same luxury of waiting… And reading this makes me think that us mills in Toronto are all making 500kish annual incomes…. how else are people affording this?

What’s a baby got to do with it? – Garth

#5 Ole Doberman on 09.30.22 at 12:54 pm

When you say next Spring, do you mean 2023 or 2024?

#6 Leftover on 09.30.22 at 1:06 pm

Rule of 90 implies about 60% in RE is fine, or $360k out of $610k total new worth. Since they already have $120k tied up in the cottage, that means a down payment of $240k out of their savings for something in town.

How big a mortgage? $240k is 20% of $1.2 million, so a mortgage of $960k, not so hard if you’re making half a million a year, even if one of them loses a job.

Just numbers. Advice is to start pitching low-balls on a house. Don’t budge unless there’s serious capitulation. It’s happening as we speak.

#7 James on 09.30.22 at 1:09 pm

If people in that great financial situation shouldn’t buy, I’m not sure who should.

#8 Ole doberman on 09.30.22 at 1:11 pm

Big immigration

The fact that Canada got 269,000 immigrants in the second quarter did not get much news coverage since it was released on Wednesday.

I’m in favor of immigration. But this was EPIC. At that rate we’d have a million in a year. Of course it was boosted by Ukraine. Still, it’s EPCIC.

This has to be positive for house construction?

https://www150.statcan.gc.ca/n1/daily-quotidien/220928/dq220928b-eng.htm?CMP=mstatcan

Over 157,000 of those were non-permanent residents, including a ton of students. Don’t get too excited. – Garth
——————————————————–
Thing I don’t understand is if us Canucks can’t afford our own RE how do immigrants?

I assume only a small % might be wealthy.

#9 Ole doberman on 09.30.22 at 1:13 pm

“And reading this makes me think that us mills in Toronto are all making 500kish annual incomes…. how else are people affording this?”

Yep, those are executive salaries. And few will ever move up that high.

#10 Neo on 09.30.22 at 1:14 pm

DELETED (Abusive)

#11 WTF on 09.30.22 at 1:21 pm

Overheard on Talk Radio interview with an independent RE observer.

“CREA has dropped high Value homes from its calculations”. Minimizes the price drop %.

No Idea if it is accurate but the source is credible and does follow the MO of those who have a vested interest in continuing the obfuscation.

#12 Keith on 09.30.22 at 1:26 pm

Garth counsels patience. K should wait six months, and re assess the situation. Rinse and repeat until real estate becomes too affordable to resist.

#13 Sail Away on 09.30.22 at 1:26 pm

#8 Ole doberman on 09.30.22 at 1:11 pm

Thing I don’t understand is if us Canucks can’t afford our own RE how do immigrants?

I assume only a small % might be wealthy.

———-

We immigrants just come here, start businesses, create jobs for a whole bunch of Canadians, become wealthy from it and buy RE.

Easy peasy. You guys should try it.

#14 Crystal ball futurist on 09.30.22 at 1:33 pm

500k income. Seriously.

What do these guys produce to be paid 500k a year.

Garth: Pl ask them to write on your blog so us mere mortals can better our existence.

#15 jess on 09.30.22 at 1:36 pm

biggest bust in calgary 55m

Talal Fouani, left, was on bail for organized crime and money laundering charges when he was shot while sitting in his parked Bentley outside his southwest Calgary home. Fouani’s wife, Nakita Baron, 31, was killed.

this latest should be added to his skill set!
https://www.talalfouani.com/

Police seize waterfront home, Lamborghinis, and millions of dollars in drugs bound for Alberta
Fouani Equity Funds Ltd.,

https://www.cbc.ca/news/canada/calgary/alert-calgary-organized-crime-bust-1.6599747

The ASC called the Bluforest pump and dump scheme “a deplorable form of securities fraud.”

Two of the largest securities fraud cases occurred in Canada and involved Mafia figures.

In the first, Russian crime boss Semion Mogilevich caused the pumping of the stock of a Canadian issuer he controlled, YBM Magnex, which lost investors over US$1 billion. In the second, deceased Canadian Costa Nostra leader Vito Rizzuto and one of his associates, allegedly came to control a series of Canadian stock promotion newsletters owned by Canadian Eric Van Nguyen, which allegedly were material in the loss to investors of an estimated US$3 billion in connection with several issuers that were pump and dump schemes orchestrated from Canada.

Mogilevitch and Van Nguyen remain wanted US fugitives. Mogilevitch is in Russia. Van Nguyen allegedly went from Montreal to Toronto. Some experienced securities investigators in the private sector believe, based on their investigations, that Van Nguyen is behind several recent paid promotions of several issuers in Canada, including several being pumped to investors right now in real time.
https://www.antimoneylaunderinglaw.com/2021/06/alberta-securities-commission-decision-to-permanently-ban-two-scoundrels-who-were-the-hidden-operating-minds-of-an-issuer-shows-the-anatomy-of-modern-pump-and-dump-schemes.html
https://albertacorporations.com/fouani-investments-inc

#16 Cottagers STAY THE HELL AWAY! on 09.30.22 at 1:37 pm

Summer’s over, more Covid and health care stresses are on the way.

DO NOT come back here all you inbred southern hillbillies.

Just.

Stay.

Home.

#17 enthalpy on 09.30.22 at 1:38 pm

tech pays much much lower in Toronto…
like its not even funny. Check out ‘levels. fyi’ on the interwebs.

If they are truly making that much….they should chill for the time being and revisit after winter.

#18 yvr_lurker on 09.30.22 at 1:39 pm

I agree. Just continue to save and revisit this issue again next summer when prices will be lower. However, it sure signiifies how absolutely screwed up things are and have been if a couple making 500K is struggling to afford some decent digs… and what about the 99% making less and trying to get into the market on their own two feet (no family help… house inheritance etc…)… a sorry state of affairs for sure with housing in this country.

My suggestion is to wait and buy a SFH if at all possible so that one does not have to move again after 4 years….

#19 Omasare on 09.30.22 at 1:51 pm

What’s a baby got to do with it? – Garth

——————————————————————

Your name is Garth Turner, not Tina Turner. Although I’d probably enjoy hearing you sing.

#20 Quintilian on 09.30.22 at 2:09 pm

“Why would they want to mess this up? Why take on a million in debt? Why thrust three-quarters of net worth into one asset class? Why buy now when the price decline may have only just started? Why not wait six months and get a whole house for the price of half of one? Or stay renting, eschew the rising cost of debt and have millions in liquid wealth in a decade or so?”

Many many questions Garth.

One answer only.

You see just as evolution leaves some physical remnants, such as the tailbone, it also leaves psychological deleterious imprints that are still controlling and act as “springs into action”.

Sometimes these impulses become so powerful that they penetrate upward above the limbic system and cancel out rational calculations.

They affect curmudgeons more frequently, and more severely, but young evolved humans can fall prey to this, and RE pumpers know how to take advantage of the weakness.

#21 Joe jones on 09.30.22 at 2:10 pm

1/2 mil per year. I make 800k per year
See anybody can say anything
Unprovable

#22 Mr Fox on 09.30.22 at 2:14 pm

Why not wait six months and get a whole house for the price of half of one?
Because after 2-3 years of prices growing like crazy, the ones on the sidelines see an opportunity to jump in. It’s like going from being completely morally destroyed to having a glimpse of hope. And that works for both: the ones who don’t own RE and the ones who wanted an investment property for years.
Disclaimer: the opinion above is based on what I see from my entourage (work and friends): the ones who couldn’t jump into buying are jumping now when the prices went down for some time. Rates are going up and values down? They (for some reason) don’t care much.
And you know what’s the fun part? One Friday at work, at a happy hour the RE subject was discussed. There were some who want RE more than anything and one other guy who was always flipping houses and has some rental properties. He said that the total mortgage amount on all his properties went up $800 per month since the rates went up, and that’s painful. The others who crave RE though, it’s like they didn’t even hear it…
Will this RE desire last until rates stabilize and start going down? I hope not.

#23 Shawn on 09.30.22 at 2:16 pm

Big immigration

“The majority of growth from international migration came from the largest increase in the number of non-permanent residents (+157,310) on record. This was due to high numbers of asylum claimants and permit holders (work, study, and other), including people affected by the Russian invasion of Ukraine.

The number of immigrants observed in the second quarter of 2022 (118,114) was the highest in any second quarter since comparable records have existed.

This follows recent increases in Immigration, Refugees, and Citizenship Canada targets and could be the result of catch-up in growth following lower levels of immigration early in the COVID-19 pandemic.”

https://www150.statcan.gc.ca/n1/daily-quotidien/220928/dq220928b-eng.htm?CMP=mstatcan

#24 JT Dawg on 09.30.22 at 2:29 pm

Re: #1 Shawn. Just remember of the 405,000 immigrants to Canada reported in 2021, the majority were already in Canada so they didn’t need housing. To make matters worse: Nearly 125,000 Ontario residents left in the year-ending Q2 2022, up 54.7% from a year before. People are leaving in droves due to affordability. Canada produces over 250,000 new builds each year (more than enough to house immigration). Vacancies in provinces such as Alberta are as high as 6%. FOMO is dead. The immigrant narrative that prices will go to the moon is a fallacy. Ontario may have a housing shortage however today’s prices are more based on the former cheap interest rates and sentiment rather than fundamentals.

#25 chalkie on 09.30.22 at 2:31 pm

Quote for our pensioners: I am not so sure how people tend to say, these are our Golden years, the only thing golden about olden is our pee. Take a look at what (most) Canadian pensioners have $$$ to live on, and its no wonder there is so much screaming about the cost of living.

Sign of the times in the making:
Yesterday as sales of Nike were published to show they did plummet, the running shoe maker sent a shockwave through the rest of the expensive athletic gear stocks, its an indication that people are turning to lower priced products and Nike stocks dropped a whopping 12%, better known as a fire sale to raise needed cash. Nike losses yesterday accounted for the biggest one-day shares to fall since March of 2020.

When Nike sniffles, the rest of the competing athletic stocks catches a cold. Nike has estimated a hit of 4 billion dollars. Nike’s promotions and outlook is a bad omen for guidance at under Armor, Adidas, Puma and others in the athletic space.

Elon Musk has said a robot business will be worth more than its cars, Lets see you do that Elon? Tesla’s live demonstration record is mixed. Launches typically draw cheers, but in 2019 when Musk had an employee hurl a steel ball at the armored window of a new electric pickup truck, the glass cracked, “wow” would love to have seen the look on your face at the moment Elon.

SAN FRANCISCO, Sept 30 (Reuters) – Tesla (TSLA.O) CEO Elon Musk has said a robot business will be worth more than its cars, and on Friday investors, customers and potential workers expect to see a prototype at Tesla’s “AI Day” that could prove whether the bot named “Optimus” is ready for work.
The robot will be the star of the AI show, but Musk is also expected to discuss Tesla’s long-delayed self-driving technology. In May, Musk said that the world’s most valuable carmaker would be “worth basically zero” without achieving full self-driving capability, and it faces growing regulatory probes, as well as technological hurdles.

Let’s see you live up to your expectations Elon, for a lot of us, your TESLA stock is down 31% for the year?? Elon, we are still waiting for your pep talk pay out from the summer of 2021 for Tesla.

United States: Mortgage rates surged closer to 7% this week, in a move that caused even repeat buyers to back off from purchase plans, no listing means no sale.
The average rate on the 30-year fixed mortgage jumped to 6.70% from 6.29% last week, according to Freddie Mac, its highest level since July 2007. Rates increased over a full point this month and are now more than double where they were at the start of the year. Sounds like a casino, double or nothing.
Elevated borrowing costs have crushed affordability, driving inflation-weary homebuyers to lower their purchase budgets or simply walk away from house hunting. Those who haven’t run off are negotiating sales before rising rates wipe out even more of their buying power. Canada and the US is connected at the hips, we are to follow in their footsteps, just ahead over the hill, deals, deals and more deals on homes.

CMHC has said at the Canadian Finance Conference, they now expect unsustainable level home prices to fall by 2023, three times as much as they predicted last summer. Homes may not be any more affordable due to the rise in interest rates – you gain by falling home prices, but lose due to the BOC padding of interest rates.

Putin illegally proclaimed annexation of 4 occupied regions and the jury is out on who sabotaged the Nord Stream Pipeline. You don’t have to look or dig very deep to see what country most benefit from this sabotage that was most done by a submersible vehicle, its 300 feet below the surface, many times deeper than a diver can go. US suggests Russia could be behind the Nord Stream Gas Leaks.

Amazon Amazon.com Inc. was one of the latest companies to discuss its belt-tightening efforts this week. During its quarterly earnings call Thursday, the e-commerce giant said it’s been adding jobs at the slowest rate since 2019. After relying on attrition to winnow its staff, Amazon now has about 100,000 fewer employees than in the previous quarter. “wow” 100,000 employees have moved on in three months, that is about 3300 people per day, would only have to assume that there is negativity in the air or better opportunities days ahead.
Sept 2022

Layoff’s:

Credit Suisse
No. of Employees to be Laid off: 5000
Industry: Financial Services
Sept 2022

Power Home Solar
No. of Employees to be Laid off: 1100
Industry: Energy & Utilities
Sept 2022

Opel
No. of Employees to be Laid off: 1100
Industry: Automobile
Sept 2022

Cazoo
No. of Employees to be Laid off: 1500
Industry: e-Commerce
Sept 2022

Beaumont Spectrum Health
No. of Employees to be Laid off: 400
Industry: Healthcare: How do one lay off health care workers, beyond one’s imagination, given the outcry all over the world for healthcare workers.
Sept 2022

Skip The Dishes
No. of Employees to be Laid off: 350
Industry: Technology
Sept 2022

The list goes on and on for announces of lay-offs in September 2022, it would take a book to print them, so do you still believe there is no downturn ahead of us? Think again, the downturn is coming faster and faster every day, it will be a fire sale for the retailers to dump their Christmas stock this year, for the smart retailers, the sales will start early.

Don’t be in a rush to dole out your cash for that home yet, better buying opportunities ahead my friends.

Tip of the day: It’s not the employer who pays the wages. Employers only handle the money. It’s the customer who pays the wages

#26 Love_The_Cottage on 09.30.22 at 2:33 pm

Beautiful weather this weekend in Ontario. Everyone join me up in cottage county to see the fall colours and enjoy the local shops. Have a great weekend everyone!

#27 Dave on 09.30.22 at 2:36 pm

“But in Victoria the number hikes to 67%. In Toronto, 83%. In Van, 90%. In other words, it is utterly impossible.”

Which obviously means that foreign buyers are the ones buying.

No evidence to support that. Instead, it is move-up buyers, as the RBC numbers are based on zero equity going into a purchase. – Garth

#28 Mr Fox on 09.30.22 at 2:37 pm

#17 enthalpy on 09.30.22 at 1:38 pm
I’m in tech. The range for a .NET Senior Dev is $100-$115 per hour for a contractor. Same person on a full-time job will make around 175k, and these rates are not for FAANG companies. Now, let’s say Kumail makes $110 per hour + HST, that’s about 220k. As long as his GF in healthcare makes 280k, that’s the 500k total..
On the other side, if the guy works for MS, FB, AMZN there then he alone could make around 250-350k based on levels.fyi

#29 Dave on 09.30.22 at 2:38 pm

I find it amusing how people who want the housing bubble to continue, hope for more and higher immigration. Yet, immigration has been one of the forces that have driven prices higher in the first place and causing locals to leave big cities.

Untrue. Myth. – Garth

#30 Daveyboy on 09.30.22 at 2:39 pm

We just moved from, Oregon to Arizona in a drop of a hat because we rent. The more I learn about money, the less I want to own a place. I am in a similar situation as K. I suggest, just keep on renting!

#31 twisted_sisters on 09.30.22 at 2:53 pm

Garth, you rule! This is the type of post that gets me. The housing market is finally going to see its reckoning. The greedy bankers, the sleazy RE industry and all those around who made this insanity possible will meet their 1987, 1997 Asian currency meltdown, dotcom, 2008, crypto – you name it moment.

It had to. And for all those that complained the BoC or Fed lied are simply wrong. The fed speak has always been used to interpret things in your own way, greedy or not. Those who interpreted wrong and thought they could play the debt gamble without worry or backup plan, sorry you’re screwed and for good reason.

#32 Steven Rowlandson on 09.30.22 at 2:57 pm

That $1,300,000 home would be expensive even with a 90% discount.

#33 twisted_sisters on 09.30.22 at 2:58 pm

And yes, the economy will pick up again in the not too distant future as prices will be back to what reality can sustain as price points. Same goes for equities.

#34 1255 on 09.30.22 at 3:00 pm

Wow Kumail, you’re making soooo much money.

Why are you looking at such cheap houses? You should be going for something that’s $5 million and up.

/sarcasm off

#35 Meh on 09.30.22 at 3:00 pm

DELETED

#36 Shawn on 09.30.22 at 3:05 pm

Population

We just hit 39 million (38.9). I am not for a minute saying house prices won’t go down.

But a lot of people just came and no they were not already here JT Dawg

https://www150.statcan.gc.ca/n1/daily-quotidien/220928/dq220928b-eng.htm?CMP=mstatcan

#37 DON on 09.30.22 at 3:09 pm

#30 Daveyboy on 09.30.22 at 2:39 pm
We just moved from, Oregon to Arizona in a drop of a hat because we rent. The more I learn about money, the less I want to own a place. I am in a similar situation as K. I suggest, just keep on renting!
********
Thank you…for a minute there I thought was in bizarro world. Nothing like catching a falling house price no matter how rich you are, the ego still takes a beating! This was always in the cards it was just a matter of when greed turned to the first degree of fear. Many more degrees of fear. No one wanted this 20 year Party to stop…only question left…Did the Can run out of road?

#38 Steven Rowlandson on 09.30.22 at 3:14 pm

“And reading this makes me think that us mills in Toronto are all making 500kish annual incomes…. how else are people affording this?”

I would seriously question the idea that 6-digit incomes in Canada are the norm. $100,000+ would be exceptional and $500,000 + preposterous unless one is a big lottery jack pot winner with the prize in a safe investment or a very highly paid businessperson or professional. I think the real estate market and its fans for are making some very delusional assumptions about people’s ability to pay for a home. It will not end well.

#39 Broader Mind on 09.30.22 at 3:14 pm

Good news , when the Canadian peso hits 50 cents USD Americans will start to think are real estate is moving towards reasonable.

#40 Broader Mind on 09.30.22 at 3:17 pm

Our real estate not are real estate.

#41 Linda on 09.30.22 at 3:20 pm

‘Gus’ has one magnificent nose:)

About Kumail & squeeze: I agree renting is the fiscally prudent way to go, but the heart wants what the heart wants. Myself, I’d wait six months & do a lot of due diligence, narrow down just exactly what it is I’m looking for & then if the stars align make my move to buy. K & squeeze will have their own set of ‘musts’ but if it were me, the deal breakers would be 1) it is a condo or similar. Won’t go there, no matter how cheap it is. 2) has issues/conditions that make it a potential money pit & 3) simply not financially feasible. Who am I trying to impress with epic debt? Not anyone whose opinion I care about.

#42 Flop… on 09.30.22 at 3:38 pm

Just got back from completing my 2 challenges for the day.

I walk the talk, so I left my wallet at home and took the $10 Uncle Don Lunch Challenge, and got a $7 Vietnamese Sandwich.

In doing so I completed the second challenge, The 2nd Annual 5km Justin Trudeau Tofino Beach Walk Challenge.

I chose to raise awareness about Vietnamese Sandwiches…

M48BC

#43 CL on 09.30.22 at 3:38 pm

This has been going on a lot longer than since 2021. Once again, those that caused the problem (.e. banks doing the lending) are bemoaning the problem they caused using other people’s money and the moral hazard called CMHC that protects banks.

Central bankers caused the problem and now they’re gonna fix it. Why anyone gets paid for these debacles and are then called experts is always perplexing to me.

Gov’t will pressure the stress test to disappear and they will bring in 30-40 year amorts. It’s inevitable.

#44 Ponzius Pilatus on 09.30.22 at 3:46 pm

#98 Don Guillermo on 09.30.22 at 12:42 pm
#93 Ponzius Pilatus on 09.30.22 at 10:45 am
#92 Don Guillermo on 09.30.22 at 10:23 am
#81 Faron on 09.30.22 at 12:09 am
Soon-to-be hurricane Orlene bearing down on Don Guillermo’s neck of the woods in Mex. Monday w/ potential 85kt winds. The rain is always the killer in Central America. Stay safe.
########
Thanks Faron. Last October you’ll recall we waited out hurricane Pamela in Cabo for a couple of days. Tomorrow we’re flying to Phoenix with a scheduled flight to Mazatlan Sunday morning. Hopefully we can get into our house before Orlene hits. So far the models show we’ll be a little ahead of it but if not we’re in wait mode in Phoenix.
———————-
Looks like “Waiting for Godot”.
Time to settle down?
########
It is actually. Plan on settling in Mazatlan in a couple of years. A few home improvements to look after first. Maybe some hurricane shutters on the west side? :-)
—————–
Brave Man.
Not something I would do.
But, all the best.
Then you have time to read “Waiting for Godot”.
And figure out what the hell it’s all about.

#45 Inflation on 09.30.22 at 3:50 pm

Either they are lying, or they are an ideal couple to get robbed and home invaded.

I’m thinking that your client is exaggerating the income. Nobody earns that much money in Toronto at that age.

Not my client, and why would you lie on an anonymous blog? Are you just feeling inadequate? Hug? – Garth

#46 Ponzius Pilatus on 09.30.22 at 3:53 pm

#39 Broader Mind on 09.30.22 at 3:14 pm
Good news , when the Canadian peso hits 50 cents USD Americans will start to think are real estate is moving towards reasonable.
—————
After the hurricanes are over, RE in many parts of the States (coastal areas) will even be even bigger bargains.
For those who like to gamble, anyway.
There were always people here, talking about moving to Florida (low taxes, low house prices, great weather).
I wonder what are they thinking now.

#47 PeterfromCalgary on 09.30.22 at 3:55 pm

I think this Nord Stream pipeline sabotage is really going to make getting inflation in the US and Europe down more difficult.

New England doesn’t have enough pipelines to get all the natural gas it uses so it relies on LNG for 20% of its gas. Well the price of that LNG is going to sky rocket because Europe will need it to.

This is what happens when you don’t build pipelines because you are virtue signalling. You also get worse CO2 emissions globally because cooling the natural gas to -161 Celsius in order to make it liquid uses lots of energy.

#48 ogdoad on 09.30.22 at 4:02 pm

Yo, Kumail. I got nothin’. I always have to question those who make a ton and have a ton yet still look for advice from leute, who are not their parents, on how to spend 1M, which is really nothing for you (full. dis. I know there are lot of father issues goin’ on amongst young males these days but you don’t sound like a guy that needs validation like the rest of Canada)…don’t you have peeps? If not, start there. I can help. But, I don’t come cheap

On another note. Gettin’ smiles again…and reciprocating…this is great! Where’s this gonna lead? Lookin’ forward to meeting some new people who aren’t talking about housing. That, and Ski season is comin’ and I’m ready to rip. Too early, I know, but gotta be prepared for when the show starts…

Happy Friday to those who look forward to Friday’s!

Og

#49 Big Immigrant on 09.30.22 at 4:07 pm

DELETED (Anti-immigrant)

#50 Ponzius Pilatus on 09.30.22 at 4:13 pm

#42 Flop… on 09.30.22 at 3:38 pm
Just got back from completing my 2 challenges for the day.

I walk the talk, so I left my wallet at home and took the $10 Uncle Don Lunch Challenge, and got a $7 Vietnamese Sandwich.

In doing so I completed the second challenge, The 2nd Annual 5km Justin Trudeau Tofino Beach Walk Challenge.

I chose to raise awareness about Vietnamese Sandwiches…

M48BC
—————–
Vietnamese Beef Noodle soup and Sandwiches are one of my favorites.
My to go place is at Kingsway and Knight.
The price went up lately, but a 5.50 still a steal.
And they don’t ask me if “I want fries with that”.

#51 omasare on 09.30.22 at 4:22 pm

#29 Dave on 09.30.22 at 2:38 pm
“immigration has been one of the forces that have driven prices higher in the first place and causing locals to leave big cities.”

————————–

Dave really has a problem with immigrants…

Maybe Dave should read this:

https://betterdwelling.com/alberta-is-calling-ontario-residents-are-fleeing-the-province-in-record-numbers/

“Immigrants eventually see the same lack of opportunity that locals do, and move as well. ”

&

“Immigration can patch over the issue temporarily, but remember, they’re moving here for opportunities. If locals are moving for more opportunity, recently arrived immigrants will follow.”

Although this article is about Ontario it can be extrapolated to the rest of the country.

On a side note, I disagree with Garth about BC real estate.
If he knew the shenanigans I’ve witnessed, the criminal activity, the notaries looking the other way.

And in good old Ontario one should research this expression: “Brampton special” and I ain’t talking special olympics. And I ain’t making it something racial either.

There is so much funny stuff going on, and so much problems being (for the moment) under rug swept in the mortgage industry. I’d love to say more but can’t as I don’t want to spend the next few years in court.

Onwards

#52 omasare on 09.30.22 at 4:23 pm

#49 Big Immigrant on 09.30.22 at 4:07 pm
DELETED (Anti-immigrant)

————————————————-

It’s becoming a bit too frequent no?

Sadly yes. We are diminished by this sentiment. – Garth

#53 IHCTD9 on 09.30.22 at 4:26 pm

#28 Mr Fox on 09.30.22 at 2:37 pm
#17 enthalpy on 09.30.22 at 1:38 pm
I’m in tech. The range for a .NET Senior Dev is $100-$115 per hour for a contractor. Same person on a full-time job will make around 175k, and these rates are not for FAANG companies. Now, let’s say Kumail makes $110 per hour + HST, that’s about 220k. As long as his GF in healthcare makes 280k, that’s the 500k total..
On the other side, if the guy works for MS, FB, AMZN there then he alone could make around 250-350k based on levels.fyi
————

I know a mid 20’s couple – he’s AMZN, she’s health care, moved out of the sticks to the GTA, mid 20’s, 300k income. Bought a GTA half-house. It’s pathetic really. But this is what urban Canada looks like today. Sorry kids.

#54 Russ on 09.30.22 at 4:30 pm

PeterfromCalgary on 09.30.22 at 3:55 pm

I think this Nord Stream pipeline sabotage is really going to make getting inflation in the US and Europe down more difficult.

New England doesn’t have enough pipelines to get all the natural gas it uses so it relies on LNG for 20% of its gas. Well the price of that LNG is going to sky rocket because Europe will need it to.

This is what happens when you don’t build pipelines because you are virtue signalling. You also get worse CO2 emissions globally because cooling the natural gas to -161 Celsius in order to make it liquid uses lots of energy.
=================================

Location, location…

B.C. natural gas in the south at Station #2 near the USA border is 32 cents per GJ this week.
That is correct $0.32/GJ if you have a “subscription” on that pipeline.

Cheers, R

#55 Brett in Calgary on 09.30.22 at 4:32 pm

Folks are funny. 500k is quite doable if the squeeze is any sort of MD specialty (i.e., 300-400k per year) and IT money can certainly be 100-150k per year. Point is, even these folks with all things going for them financially shouldn’t be buying a house in Canada. Let that sink in. That’s how mental our housing market is here, pure lunacy.

#56 ogdoad on 09.30.22 at 4:32 pm

#26 Love_The_Cottage on 09.30.22 at 2:33 pm

Beautiful weather this weekend in Ontario. Everyone join me up in cottage county to see the fall colours and enjoy the local shops. Have a great weekend everyone!

:):):):):):):)

In! Couple questions first: Do you like fit, tall dudes with hair and a motorcycle? what is the first thing you think of when you hear ‘kitchen’? Is your hair long or short?

Og

#57 enthalpy on 09.30.22 at 4:35 pm

Mr Fox on 09.30.22 at 2:37 pm

I have my doubts for Toronto.

SF, Seattle… etc. I wouldn’t question it.

#58 IHCTD9 on 09.30.22 at 4:41 pm

#45 Inflation on 09.30.22 at 3:50 pm
Either they are lying, or they are an ideal couple to get robbed and home invaded.

I’m thinking that your client is exaggerating the income. Nobody earns that much money in Toronto at that age.
———

It could be true. He might be faang, she could be a Doc (or on the way). But yes, if they are employees, they’d be in the upper fraction of the 1%. Basically 2 one percenters combined.

#59 Karlhungus on 09.30.22 at 4:55 pm

We have month over month DEflation. Rate hikes to stop soon

#60 IHCTD9 on 09.30.22 at 4:59 pm

#51 omasare on 09.30.22 at 4:22 pm

And in good old Ontario one should research this expression: “Brampton special” and I ain’t talking special olympics. And I ain’t making it something racial either.

There is so much funny stuff going on, and so much problems being (for the moment) under rug swept in the mortgage industry. I’d love to say more but can’t as I don’t want to spend the next few years in court.
——————

It’s OK, you can say it. On the street it’s called the “Brampton Mortgage”. You don’t want one. I doubt too many OSFI regulated banks fell for these either. IMHO, they’re a time bomb waiting to blow, I think they’re pretty common. Lots of live-in immigrant kids have been roped into co-signing with their parents too. None have much of a clue what they’ve done to themselves. That comes later when houses stop appreciating. Whoever these lenders are who figured the risk was null because houses always go up, are probably tossing and turning at night right about now. The shtf after the last possible corner of these houses are rented out…

#61 Doug t on 09.30.22 at 5:02 pm

I have it on good authority that the Libs are going to give everyone a free house if they win the next election

YOU GET A HOUSE AND YOU GET A HOUSE AND EVEYBODY GETS A HOUSE

#62 Pain_Trade on 09.30.22 at 5:04 pm

Did the global pivot back to QE just begin?

Can we have QE in an inflationary market and keep raising rates?

Is this some new kind of financial wizardry brought on by your local central bankers?

A bit of reflection is needed on this wouldn’t you agree?

#63 TurnerNation on 09.30.22 at 5:17 pm

What happened to all those Fort Mac rig hands and welders (with own service truck natch) clearing 400k yearly.

#64 wallflower on 09.30.22 at 5:20 pm

about the immigration numbers

also consider that Canada produces emigrants as well as takes in immigrants; and for every Canadian-born emigrant, there are two non-Canadian born emigrants, meaning, the immigrants are emigrating.

#65 The Original Jake on 09.30.22 at 5:20 pm

Where is all that disposable income going in the meantime? With their net income I would expect a higher net equity. Are they ready to cut back and start feeding a mortgage?

#66 PBrasseur on 09.30.22 at 5:21 pm

Unless you’ve got money to burn and just don’t care buying a house in Canada these is just stupid, plain and simple. Just say no.

And no amount of immigration will ever change that. You can’t print (create demand) your way to prosperity, the same goes for immigration.

#67 My 2 cents = 5c with inflation on 09.30.22 at 5:21 pm

@ #46 There were always people here, talking about moving to Florida (low taxes, low house prices, great weather).
I wonder what are they thinking now.

even lower house prices, great wether for another 100 years. Floridians will always rebuild no matter what .

#68 Ronaldo on 09.30.22 at 5:23 pm

Since the largest percentage of the cost is in the land and any drops in the housing prices will pretty much be in the land values. I would expect that as the recession sets in that you will see dramatic decreases in the lot values as developers stop building and try to dump their lots. This happened in all the previous recessions. You should also see the cost of lumber take a dramatic drop as it did in the 2008/9 housing crash. Building costs will come down a lot as unemployed tradepeople will be bidding against each other for the work.

During the mid 70’s recession I purchased a building lot as demand for them was next to zero and held on for 5 years. By the time the next recession of the late 70s came along I was in a position to start building.

Much of the work above the foundation I did myself. I started early in the spring as tradespeople were absolutely anxious to get work. The savings were enormous. This may not be the solution for many but it certainly worked for us. I was in my early 30’s at the time.

I ended up building two more homes since I made several moves in the years after that. I believe the average time people spent in one place in those days was 4 years. I never intended to spend a lifetime in one place. How boring would that be?

I don’t think this couple should be in any big rush to buy right now as we most certainly have not seen the bottom.

Building a home and being your own general contractor is not rocket science and you can save a bundle by doing it this way. Be brave, give it a try.

#69 Ponzius Pilatus on 09.30.22 at 5:23 pm

Just incredible the damage done in Florida.
That shows you the wrath that mother mature can unleash.
Makes us look tiny and helpless.
What are they gonna do now?
Built 18 foot walls on each beach?
Florida is in for a rough winter, with many snow birds probably staying away.
De Santis run for President will hinge on how he deals with that.
He may have to go to Washinton with a hat in his hand.
And/or increase taxes.
The horror for a Mega Republican.

#70 PBrasseur on 09.30.22 at 5:35 pm

@#63 QE

Inflation is a much a productivity crisis as a demand crisis. In the absence of strong growth sovereign debts are unsustainable and QE is the only option to avoid (for now) financial crisis.

Yet inflation has to be contained, so yes you can and will get QE and high rates simultaneously.

#71 IHCTD9 on 09.30.22 at 5:37 pm

#55 Brett in Calgary on 09.30.22 at 4:32 pm
Point is, even these folks with all things going for them financially shouldn’t be buying a house in Canada. Let that sink in. That’s how mental our housing market is here, pure lunacy.
———-

Yep. K and squeeze should be thinking bigger. 500K and hoping to buy a townhouse – that should be reason enough to pause and think harder no? It’s scary to realize that a couple factory workers who bought into the GTA 20 years ago will appear to have a similar, (if not higher) standard of living than this 500K income couple today. Their net here in Ontario is probably under 300K. They can go places, just not in the GTA. Any American with this kind of income could buy a Mansion in a primo hood without needing to ask anyone for advice.

#72 george on 09.30.22 at 5:49 pm

RBC’s new report is pure gloom. “The Bank of Canada’s rate hiking campaign since March has added hundreds of dollars to mortgage payments that come with a home purchase,” it says. “This, along with the jump in property values during the pandemic have made it more difficult than ever to become a homeowner in Canada… the impact of higher mortgage rates has yet to fully run its course.”

*******

So what happens next? House prices fall as the broad market adjusts. This is good news for buyers. Perhaps lenders have reason to be gloomy.

#73 AM in MN on 09.30.22 at 5:55 pm

I’m one of the ones hoping for more drops.

Good to see the US markets close the quarter with a down week. That means that in a couple of weeks people will get their paper 401(k) statements and see how much their down, just in time to decide if they want to keep going down or perhaps vote for change?

Higher interest rates will drive more of this, perhaps another year or so of steady drip drip drip. Cold winter heating bills ought to be a wake up call for some as well.

Hopefully this puts more people back to work, especially those close to retirement but still healthy enough to work. No free lunch from the money printers!

As mentioned above, New England gets it worse because they refuse pipelines from cheap Pennsylvania gas and need to import LNG, while their power plants switch to liquid oil. They can’t even import US gas from the Gulf because of the Jones act, so need to go on the international markets. At what point does the pain even start to affect rich white liberals? We’re not there yet, let’s see after the winter.

And the BC gas prices would be over $5 if the BC Liberals hadn’t bowed to gods of global warming and allowed some LNG export terminals!

#74 SW on 09.30.22 at 5:55 pm

Maybe it’s because I am a long time banker but it still amazes me how clueless people are about money even those high earning professionals. I have known dentists and doctors that would be lost without their accountants and bankers…someone said here that there is no way someone around 30 can make that much money. Nonsense. My old high school friend was make 500k/yr by 30 as a GP. Mind you he was working crazy hours. Lots of high earning software developers out there too.

#75 Wrk.dover on 09.30.22 at 6:02 pm

I smell sticker shock, Garth.

Put a decimal in all of the figures, including income, and it all smells good.

#76 The Forecaster on 09.30.22 at 6:02 pm

Double whammy coming.

The Canadian housing market is going to crap its pants as soon as the big job losses hit in the first quarter of 2023. That will be the final big slide.

Most price drops will be in by the Spring. The Spring housing market will be dead on arrival.

You could jump in at that point, but why? The housing market will trade sideways for many years after the big price drop happening. It will be easy to score a place in the coming years.

What I would watch for is affordability and based on RBC’s findings this is the most unaffordable time ever for the masses. No deals to be had yet.

#77 ogdoad on 09.30.22 at 6:13 pm

#45 Inflation on 09.30.22 at 3:50 pm

Not my client, and why would you lie on an anonymous blog? Are you just feeling inadequate? Hug? – Garth

:):):):):)

G, you got it made, man!

Og

#78 Wrk.dover on 09.30.22 at 6:15 pm

I just remembered the price of RE is going down.

Oops!

#79 Trading-Up No More on 09.30.22 at 6:15 pm

Forget the cost of a detached house eating almost all of your income in Vancouver. As Garth pointed out, a new buyer is not entering into a detached. People trading up are buying the detached. They have to find a sucker buyer to release the equity before the seller can sign onto another place. And this is the bulk of logistical chain reaction in real estate sales.

There is currently a huge problem though.

If the cost of an entry level condo is exceeding the level to be approved, who is going to buy your condo so you can release equity and trade up into a bigger place?

Spoiler alert: nobody!

The housing market is ceasing up as new buyers cannot afford to enter the low end of the market into a condo. Sales are dropping. Liquidity is disappearing.

CMHC is right. 494 is where prices need to be for the average person to afford it, but the reality is that you cannot even find a condo for that price. You cannot even find a crappy condo in Vancouver for under 600.

Lights out. Goodnight. Have a good one.

#80 Sore Back on 09.30.22 at 6:29 pm

Moving hurts your back for a few days. Losing hundreds of thousands makes your fat wallet permanently flat.

Pick your poison; a couple days of discomfort or decades spent trying to backfill a life altering financial loss.

I can’t believe people are stupid enough to worry about the cost of moving when a hurricane is barreling in.

#81 Søren Angst on 09.30.22 at 6:38 pm

CRA:

Individual Taxfilers by Age Group, Tax Bracket, and Province or Territory (2017 Tax Year)

Most recent year I could find.

$202,800 or more Tax Bracket, Total # of Taxfilers = 364,140 – ALL CANADA

Age, # of Taxfilers, % of Total:

25 to 29 = 4,610 (1.27%)
30 to 34 = 13,600 (3.735%)

% of Total Taxfilers for their age group:

25 to 29 = 4,610 (0.2% of 2,295,260 Taxfilers that age)
30 to 34 = 13,600 (0.6% of 2,302,060)

Garth’s Horde are well heeled.

https://www.canada.ca/content/dam/cra-arc/prog-policy/stats/itstb-sipti/2017/tbl04-en.pdf

#82 Concerned Citizen on 09.30.22 at 6:41 pm

It’s quite simple, really. It means a declining standard of living. Multiple families living in the same house – each getting their own floor. Homes with 6+ singles living together. I know of several homes in my neighbourhood alone where this was already happening pre-pandemic, and I don’t even live in the big city.

Homes have been unattainable for most families for over a decade in many parts of the country, and policy makers have done nothing. And they continue to do nothing. Affordability will keep getting worse, and policy makers will continue to do nothing. I wish it weren’t so, but we have to face facts and probabilities.

Check out the latest interprovincial migration statistics for Ontario – young people appear to be fleeing, much as I predicted. There looks to be little future for young people in Ontario, unless of course they earn like Kumail and his squeeze – and the vast majority come nowhere close.

The central bankers royally screwed up by keeping real rates negative since 2009, and now we’re all paying for it big time. And yet, even today, after the rate increases so far, real rates remain highly negative. German inflation came in at 10%, and the ECB rate is ~1%. Can you imagine if they actually got serious about fighting inflation and got real rates to positive territory? Half the country would go bankrupt.

#83 Marie-Ève on 09.30.22 at 6:47 pm

@#59 IDHTD9 – I’m thinking that your client is exaggerating the income. Nobody earns that much money in Toronto at that age.

If not Toronto then Quebec. From ici.radio-canada.ca (enquète) Dans l’ombre, la firme McKinsey était au coeur de la gestion de la pandémie au Québec.

$35k/day and $215k/week – In the shadows, McKinsey consultants were being payed by the generous tax payers to make CRUCIAL decisions on behalf of the Legault government to scare the bejesus out of the generous tax payers on the communication of the pandemic and strategies involved to roll out the vaccination plans.

Ontario signed a contract shortly after with the same firm for $1.6M Basically you are being played by fear and using your own money to do it.

#84 IHCTD9 on 09.30.22 at 6:47 pm

#64 wallflower on 09.30.22 at 5:20 pm
about the immigration numbers

also consider that Canada produces emigrants as well as takes in immigrants; and for every Canadian-born emigrant, there are two non-Canadian born emigrants, meaning, the immigrants are emigrating.
– ———

There’s a lot of action going on with folks moving around due to the cost of living. The Toronto Tsar recently had an article about rental costs in some GTA hoods equalling/exceeding the cost of home ownership. Recent Emigration numbers are well above the 35-40% norm, and a continuation of Toronto being the number one city in Canada for suffering losses due to intraprovincial migration. Everyone and their dog seems to want out.

Seriously though, it all makes perfect sense.

That Star article was incorrect and disproven on this blog. Math kills. – Garth

#85 Shawn on 09.30.22 at 6:58 pm

#59 Karlhungus on 09.30.22 at 4:55 pm

We have month over month DEflation. Rate hikes to stop soon

******************
I think you might be right. September will show deflation versus August.

#86 Søren Angst on 09.30.22 at 6:59 pm

#42 Flop…

Your sub made from these meats:

European Union and Canada have ended a 21-year dispute over hormone-treated meat *
https://www.reuters.com/article/us-canada-eu-wto-meat-idUSKCN1C81HY

Probably why you had a bounce in your step for the 5K run.

Basically, a Canadian Chicken is the size of an Italian Turkey, Canadian Cornish Game Hens the size of Italian Chickens.

“Selective Breeding” my buttocks.

——————

* Nobody in Italia will buy your meat Canada.

For example, we don’t buy The Netherlands perfectly formed, shiny GMO infested Bell Peppers.

1st month in Italia at the supermarket I picked up a pack of Dutch GMO Bell Peppers and the Produce Guy RAN over and said to me “NO, NO, NO…GMO, GMO…Olanda”.

So, I put them down. Bought the gnarly looking, non GMO Italian ones. Tasted great.

Italia has to import the Dutch GMO no thanks to the EU. Now we will have to import Canadian steroid infested thru selective breeding Beef.

Me at the meat counter in a few months picking up Cdn beef and the Butcher come running over and telling me …

“NO, NO, NO…STEROIDE, STEROIDE…CANADA”.

#87 The House of Comuppance on 09.30.22 at 7:07 pm

#29
Untrue. Myth. – Garth

Why do you continue to deny the impact that mass immigration has on real estate prices? This stance just erodes your credibility.

Because it’s true. Proven. Get over it and understand the real reasons real estate is unaffordable. – Garth

#88 Søren Angst on 09.30.22 at 7:13 pm

#3 Felix

Did you know that in the US 2 MILLION TONS of Kitty Litter are disposed of each year.

And the clay in the litter is non-biodegradable, so will get thrown away, including sitting on landfill for 1,000’s of years.

Last time I checked, dogs don’t defecate Kitty Litter.

MEOW.

#89 Flop… on 09.30.22 at 7:15 pm

Been to Florida 3 times, Tampa Bay, Orlando and Jacksonville, including St Augustine.

Been trying to go to Ft. Myers for years, not always easy to get to a secondary city on a budget from the West Coast.

We’ll have to wait few years now, similar thing happened when we tried to go to New Orleans and Houston, just give them a little while to get back on their feet and then try and support them with your tourist dollars.

We were planning on staying downtown in Fort Myers and just going out to the beach area for a day trip or two.

The thing that impressed me the most about Fort Myers, is when you contact the tourist bureau for information they actually send you out a free copy of a Lonely Planet guidebook, or at least they used to, I’ve still got mine and hope to use it in the future.

People like to give me crap about Corpus Christi in Texas, you get them palm trees and the sand without the same amount of storm action.

As I’ve stated before Corpus Christi is at about 9 o’clock on the storm clock face.

New Orleans is at 12 o’clock, Florida is at 3 o’clock, most storms hit between 12 o’clock and 3 o’clock.

I’ll keep dreaming of spending 6 months of my retirement in Corpus Christi and keep Phoenix as the back-up.

San Diego, just too expensive nowadays.

Forget affordable housing, I need affordable sun.

I’ve gotta do something, I’m an Australian with glass ankles.

I know I can’t outrun two things, a hurricane, and a Canadian winter…

M48BC

#90 IHCTD9 on 09.30.22 at 7:35 pm

#84 IHCTD9 on 09.30.22 at 6:47 pm

There’s a lot of action going on with folks moving around due to the cost of living. The Toronto Tsar recently had an article about rental costs in some GTA hoods equalling/exceeding the cost of home ownership. Recent Emigration numbers are well above the 35-40% norm, and a continuation of Toronto being the number one city in Canada for suffering losses due to intraprovincial migration. Everyone and their dog seems to want out.

Seriously though, it all makes perfect sense.

That Star article was incorrect and disproven on this blog. Math kills. – Garth
———

Figures. I always end up getting burned when I source from that rag.

#91 Horace Neiz on 09.30.22 at 8:02 pm

#56 ogdoad on 09.30.22 at 4:32 pm

Couple questions first: Do you like fit, tall dudes with hair and a motorcycle? what is the first thing you think of when you hear ‘kitchen’? Is your hair long or short?”

Og”

Garth, seeing a potential future pony tail dude-like 5th columnist lurking here….keep an eye on this guy wuddya?

#92 Mr Fox on 09.30.22 at 8:09 pm

#54 Russ on 09.30.22 at 4:30 pm
Location, location…

B.C. natural gas in the south at Station #2 near the USA border is 32 cents per GJ this week.
That is correct $0.32/GJ if you have a “subscription” on that pipeline.

Cheers, R
———————————————————-

My friends live in Moldova (you know that country to the west of Ukraine). Recently they had an increase natural gas price. As I see 1 GJ is about 25.5 cubic meters of gas. Since 1 cubic meter there now is $2.20 CAD (yes, two-dollars-twenty), 1 GJ is about $56 CAD. Whatever it costs in Toronto, thank God we’re not in Europe right now.

#93 Broader Mind on 09.30.22 at 8:11 pm

# 46 Ponzius Pilates. Bargains after hurricane in Florida. I know it’s an old fashioned principle but supply and demand dictates a rise in price when supply is down. I will continue to snowbird as before outside hurricane season.

#94 Rochdale GM on 09.30.22 at 8:16 pm

28 and 33 and making 0.5M a year. Not likely, even in TO, unless she’s already a working doctor.

#95 Quintilian on 09.30.22 at 8:18 pm

#85 Shawn on 09.30.22 at 6:58 pm
“#59 Karlhungus on 09.30.22 at 4:55 pm

We have month over month DEflation. Rate hikes to stop soon

******************
I think you might be right. September will show deflation versus August.”

Wrong, it is not deflation, just a temporary bout of disinflation.

Headline inflation can give false readings because of volatility of some of the components of CPI.

Core inflation is still building steam.

#96 crowdedelevatorfartz on 09.30.22 at 8:46 pm

@#45 Inflation
“I’m thinking that your client is exaggerating the income. Nobody earns that much money in Toronto at that age.”
++++
The gal is probably a doctor.
Probably a specialist/surgeon.
$350k per year easy.
The guy in tech…150K
Voila!
500k per annum.
Why is that so hard to believe?

#97 Ponzius Pilatus on 09.30.22 at 8:48 pm

#93 Broader Mind on 09.30.22 at 8:11 pm
# 46 Ponzius Pilates. Bargains after hurricane in Florida. I know it’s an old fashioned principle but supply and demand dictates a rise in price when supply is down. I will continue to snowbird as before outside hurricane season.
————————
Smart Alec.
While you’re down there, make sure you scoop up one of the thousands beached yachts for a bargain, before the prices are going through the roof due to increased demand for unsalvageable yachts.
Or before Russian Oligarchs buy them all up.
Btw, the supply and demand principle is not static.
Sometimes demand is the driver, and sometimes supply is.
I know it’s complicated.
But, so is life.

#98 Ed on 09.30.22 at 9:02 pm

#63 TurnerNation on 09.30.22 at 5:17 pm

What happened to all those Fort Mac rig hands and welders (with own service truck natch) clearing 400k yearly.
//////////////////////////////

Well my millennial daughter & her husband earned $980,000 last year in Calgary…better wages & cheaper homes.

#99 Grunt on 09.30.22 at 9:19 pm

High paying jobs are usually the first to get axed in a recession.

History says the opposite. – Garth

#100 epic bear on 09.30.22 at 9:35 pm

looks like Credit Suisse may go tits up next week and cause a slight problem for markets
default swaps are higher than even 2008… so risk of collapse may be imminent
may cause a European contagion and spread to other banks. ie. Deutsche bank, HSBC etc.
expect a nice flush soon.

epic bear

#101 the Jaguar on 09.30.22 at 11:30 pm

Re: #4 K Clone on 09.30.22 at 12:49 pm
Ironically, i am in the same boat as K, with the same income, and have a baby on the way. I may not have the same luxury of waiting… And reading this makes me think that us mills in Toronto are all making 500kish annual incomes…. how else are people affording this?
What’s a baby got to do with it? – Garth++++

So true. Why do people think that home ownership is so inextricably tied to raising family. I get the ‘stability of place’ aspect, but there are more elements to successfully raising kids than home ownership. Don’t discount the success and efforts of many who have done so without home ownership.

Earlier this year in Calgary , (May) an innocent 40 year old mother of five was killed in a ‘road rage incident’. Her name was Angela Mckenzie. Father of the children pre-deceased only months earlier in the year under tragic circumstances. Kids aged 8-17, and with them a number of pets. My recollection is that the mother of the deceased who is in her 60’s was stepping forward to try to make a home for the family. I think they were trying to find a place to rent to accomodate all of them. I hope they are all still afloat.

It takes a lot more than real estate to make a home. If you are lucky enough to have a place to shelter and try and raise a family be grateful, but never think home ownership is the singular ingredient that guarantees your happiness or success. Life will throw everything it’s got at you, and only steadfastness, resilience and character will rescue you. And of course, charity.

#102 Jane24 on 09.30.22 at 11:41 pm

Why would a couple making $500,00 per year want to buy a $1.3 million semi or townhouse in Leslieville? When I was a TO agent in the 1980s/90s we called that neighborhood “under the Gardiner Expressway”. It was the last resort for a house and attracted last resort type people. The houses are old and cheaply built and many have structural problems, even the newer ones. Lots of homes are on polluted, formerly industrial land and big termite problems; lack of parking overall and too urban, bleeding edge too. Don’t be fobbed off by the trend.

if you really have that income then wait till house prices stop dropping in about 2024 and buy a better home in a better middle-class neighborhood. Don’t catch this falling knife. Many will.

#103 SoggyShorts on 10.01.22 at 4:18 am

#50 Ponzius Pilatus on 09.30.22 at 4:13 pm
#42 Flop… on 09.30.22 at 3:38 pm

Just got back from completing my 2 challenges for the day.

I walk the talk, so I left my wallet at home and took the $10 Uncle Don Lunch Challenge, and got a $7 Vietnamese Sandwich.

In doing so I completed the second challenge, The 2nd Annual 5km Justin Trudeau Tofino Beach Walk Challenge.

I chose to raise awareness about Vietnamese Sandwiches…

M48BC
—————–
Vietnamese Beef Noodle soup and Sandwiches are one of my favorites.
My to go place is at Kingsway and Knight.
The price went up lately, but a 5.50 still a steal.
And they don’t ask me if “I want fries with that”.

*************
You guys are totally overpaying.
The soup here is $1.75, and sandwiches are half that (the exact same prices as in 2017 BTW)

Then again technically every soup and sandwich here is Vietnamese…

#104 Wrk.dover on 10.01.22 at 5:51 am

#89 Flop… on 09.30.22 at 7:15 pm
We were planning on staying downtown in Fort Myers and just going out to the beach area for a day trip or two.

People like to give me crap about Corpus Christi in Texas, you get them palm trees and the sand without the same amount of storm action.
____________________________________

Two hours of gridlock traffic to get to town from the beach, that will be a real luxury saving money for you.

6-8000 dead in Galveston hurricane in 1900, right next door to Corpus.

What is so dawg awful about Tasmania, anyhow?

#105 under the radar on 10.01.22 at 5:56 am

Doctors seem to pickle themselves in debt. They buy big houses by taking on huge mortgages while working 100 hrs a week. Money always shows up, banks love doctors.

Meanwhile, inflation rages in EU, the B of E steps on the brakes while Truss steps on the gas. Putin has a signing ceremony. International waters leaking nat gas, wonder who caused it.

Markets rolling over, TINA is yesterday, real yields again, US still running hot, JP must stay the course. Canadian dollar sinking fast.

Fall colors are out up here in Mono. Spectacular views, fresh air, forest walks all for the taking for the ones who know the meaning of rich.

#106 Steven Rowlandson on 10.01.22 at 6:08 am

“Are you just feeling inadequate? Hug? – Garth”

Probably feeling ripped off by employers, markets and life. The commenter is not alone.

#107 Tony on 10.01.22 at 7:55 am

Re: #96 crowdedelevatorfartz on 09.30.22 at 8:46 pm

The converse is obviously true, he’s the one making all the money.

#108 ogdoad on 10.01.22 at 8:38 am

#91 Horace Neiz on 09.30.22 at 8:02 pm

Really? I’m a lover, not a fighter…I stick with my strengths.

Og

#109 Dharma Bum on 10.01.22 at 10:45 am

Leslieville?

C’mon man, are you SERIOUS?

If you are a couple earning a half-mil per annum, why woud ya wanna live in that slummy craphole?

Trendy?

Pshawwwwwww……

Get over it.

Buy a detached house in the bland suburbs, have kids, get cars, and live a boring miserably repetitive life like everyone else. BBQs with the zombie neighbours on summer weekends. Mow the lawn. Kill the weeds.

I hear Mississauga is perfect for mundane soullessness.

#110 Graeme on 10.01.22 at 11:43 am

“..the impact of higher mortgage rates has yet to fully run its course.”

^^ That’s what I read right there ^^

We’re in the same boat and definitely not biting yet.

Burn baby burn!!

#111 DonQuixote on 10.01.22 at 9:09 pm

Soren angst

Instead of the I word try population growth and housing demand.
You might get somewhere.