The correction

February 2nd, 2023 | Book Updates | E-mail this blog post to a friend

Seven years ago the house at 2019 W 37th Avenue on Van’s tony west side sold for $3.68 million. That was $1.3 million more than it traded for six years earlier. In 2017, at the height of the pre-pandemic horniness, the owner tried a flip for $4.7 million. No takers. The place came back on the market last March, asking $3.7 million. It took ten months to find a buyer, who just paid $3.38 million.

This, says well-versed Blog Dog Darren, is, “a picture perfect example of West Side Vancouver house and how its value has changed in 7 years. Down . . . down . . down.”

West Van has been one of those few areas that attracted offshore bucks. In 2017 the first wave of anti-Chinese taxes in BC took hold, which might explain why the flip failed. “But aside from that,” adds Darren, “the past 7 years have also shown us how the market as a whole was not driven by foreign buyers – but by interest rate movements . . . it was only pockets of the market that were disproportionately affected, like this home in Vancouver Quilchena.”

As we pointed out over the last few days, Canadian real estate corrected as the cost of money rose. The average price (nationally) is down 23%. Sales levels have tanked. Listings been withdrawn. Today there’s nothing normal about this market. Mortgages at 5% make houses more unattainable than ever for people who need financing to buy. But a year of central bank tightening has created a deep well of pent-up demand. Lots of people have been waiting for prices to bottom. When they think that moment has come, they will pounce.

It’s happening now whenever a ‘good’ listing appears (there’s much overpriced junk cluttering up the MLS), bringing a flood of viewings and a spate of bids. Stats to be unveiled in the next few days for January will show that volumes are still historically low, but the price erosion has stopped.

“It’s still a buyer’s market,” Doug the neighbourhood broker told me as I walked my dog past his door this morning. “But there are so many people waiting. It looks like everything is going to change in Q2 and Q3.” To him, that means we’re about six weeks away from a normalized Spring market. Just like the groundhogs said this week.

Now, it’s key to remember all real estate’s local. Big urban areas will feel the heat while Bunnypatch has yet to touch bottom. Like the 905 and SW Ontario, where a year ago people were buying like demented avatars. Today, crickets. And pain.

Here’s the report of a real estate lawyer and blog addict in K-W, discussing Powers of Sale proceedings now underway:

Spoke to three very close Mortgage Broker Friends this week and the theme match is…. : 1) Much moaning, hate the atmosphere right now and not enjoying their work, applications being denied, denied, denied and clientele not happy campers. 2) One bank in local area issued over 30 POS this month. 3) On those POS people did not list because their values had decreased such that the sale list suggested by agents would not remotely cover the mortgage- the usual advise- you are in deep doo doo and might as well live “rent free” so to speak for as long as you can before the good Sherriff arrives to do his locksmith deed. It will be an interesting five or six months as these mortgage renewals come washing in and out.

In Halifax, where a torrent of GTA refugees fled during the pandemic jacking prices, the average detached home which sold for $645,000 last year is now trading at $536,000. That’s a 17% drop. DOM has jumped from 23 to 52, so it takes twice as long to find a buyer.

Says agent Jeremiah Wallace after last week’s Bank of Canada hike: “This plan certainly seemed to help along the rapid cooling of an already dying market, but it makes you wonder if interest rate hikes at the bottom of a correction really helps, or is it just piling on more debt load to already heavy burden… And how will this impact our local market.? It’s already tough out there for Buyers, having to navigate falling prices (what is a value or not), and having to adjust budgets, since these rate hikes can change what people can afford.”

That’s the biggie. Affordability. Rates may stabilize and five-year mortgage costs may moderate a little. But we’re not going back to 3% or below and in many markets prices are set to stabilize or even increase as buyer demand returns. For the CBs to give up now, and reverse course, would only throw gas on the inflationary fires and lead to a far worse outcome.

What to expect?

The US Fed’s expected to add another quarter point (maybe a half), then pause. Our guys have already indicated they’re on hold. Inflation has dropped reasonably but the impact of higher rates on people who made bad choices and overdosed on cheap debt is yet to be fully felt. Metropolis real estate could well be as cheap as it’s going to get during this correction. The burbs and beyond have more to give up. Secondary and tertiary markets, especially those that went ballistic in late ’21 (Ingersoll and Ladysmith come to mind) will reward buyers who wait. Kits and North York will not.

The advice here has not changed. If you really need a house and can afford one without gutting your finances or endangering your family, go ahead. Buy. But a 50% haircut seems fiction.

About the picture: “I have been reading Greaterfool blog for double digits of years now,” writes Dany in St-Georges, Québec, “and I do confess that I never wrote down a comment in the roller coaster section neither browse through all of them (well, most of the time…). But I do participate when you feel to poll your blog dogs for our precious opinion (lol). Thank you for your guidance Garth, your financial literacy daily contribution changed our family perception, understanding and behavior about finance. Well, here is our Covid pup, Becky ! She’s a friendly 20 months old cockapoo that loves to play in the snow! She’s always happy and ready for fun!!!”

171 comments ↓

#1 Steven Rowlandson on 02.02.23 at 11:11 am

Corrections in real estate prices are not possible without all the price gains since the mid 1960s being wiped away.

#2 The Original Jake on 02.02.23 at 11:22 am

Bank of England “talked down expectations that it is readying to pause or pivot rate hikes, noting that there is still some way to go in taming inflation.”

That puts 2 big boys in the “no pause” camp. Tiff may need to adjust his position.

https://www.cnbc.com/2023/02/02/bank-of-englands-andrew-bailey-tempers-talk-of-pause-pivot-in-hikes.html

#3 Mattl on 02.02.23 at 11:36 am

Risk on!

As much as I think this bounce is ridiculous, sure enjoying the returns. Have officially wiped out last years losses as of this AM. Glad I held last years dogs, this tech rebound is going to pay off in 2023.

Or, inflation isn’t actually tamed and all that comes with that. Who knows, but +9% is a great way to start the year.

#4 Joe Mama on 02.02.23 at 11:38 am

I still don’t see this as being even close to bottom in GTA or GVRD, it takes months for interest rate hikes to be felt, we just had one a month ago. IMO as spring market hits, many more listings will hit market and at current pricing there wont be enough buyers to absorb them, many wont want to buy after seeing and many wont be able to qualify for loan necessary. All this adds is more downward pressure on prices. 50% drop might not seem realistic now but it wouldn’t shock me either, especially if unemployment increases. Just read almost half of variable mortgage holders will need to sell in next 10 months, that’s a lot of inventory coming online in the near future

#5 Doug t on 02.02.23 at 11:40 am

There’s nothing “real” about Real Estate anymore – it has morphed into a slimy bloated zombie sucking the soul out of this country

#6 Miff Tacklem on 02.02.23 at 11:42 am

I don’t understand Garth’s willful blindness on foreign money having a huge impact on home values in Canada. He’s ignored the MP responsible for housing commenting that Canada’s housing market is great for foreign investment but bad for Canadians. Ignored the proven examples of how foreign dirty money was washed in Vancouver casinos then used to purchase real estate in BC. Ignored research showing that foreign money is responsible for over 30% of the BC real estate bubble, and countless more examples.

It doesn’t make any sense why he refuses to change his perspective on the impact, and still plays dumb about the difference between foreign MONEY and immigrants. Cue him calling me a xenophobe.

We did this to ourselves. – Garth

#7 Mattl on 02.02.23 at 11:48 am

#4 Joe Mama
“Just read almost half of variable mortgage holders will need to sell in next 10 months, that’s a lot of inventory coming online in the near future”

You need better sources.

The Banks will do what they have always done and are currently doing with mortgage holders that have income but are struggling to meet obligations – restructure these deals. Sure more inventory is likely coming but Canadians will eat KD every meal before giving up their homes. And when you consider how crazy rents are, the selling and renting for most is not a path you more disposable.

#8 Quintilian on 02.02.23 at 12:06 pm

West Van has been one of those few areas that attracted offshore bucks. In 2017 the first wave of anti-Chinese taxes in BC took hold, which might explain why the flip failed.

There you go again with the anti-Chinese diatribe.

There are hardly any Chinese people living on the North Shore.

“Chinese people”? Do you mean Canadians of Asian heritage? Would that not make then “Canadian people”? Or even “”Asian-Canadians”? Your slip is showing. – Garth

#9 Sail Away on 02.02.23 at 12:11 pm

Thanks Garth!

Friends of ours in Vancouver, who have lived in their SFH in a desirable location for 27 years, will be putting it on the market next week (realistically, they hope) for about 7% under assessment, hoping for a speedy and problem-free sale so they can proceed with a footloose and fancy-free retirement joyride at 60-ish yo.

Specific contract terms around the new 3-day cooling off period state that the buyer must pay 0.25% ($6k in this case) if they back out of the contract after that time, and the realtor will not take any commission from the seller for such a situation.

#10 Canadian Dollar on 02.02.23 at 12:12 pm

#96 AM in MN on 02.01.23 at 9:15 pm
Turning the Bank of Canada into a straw man for people’s bad personal decisions is beneath this blog. Sadly it is, so far, not beneath the leader of the Official Opposition. – Garth

——————————————————-

PP has been clear that issue isn’t normal monetary policy disagreements, it was the 3rd worldish move into fiscal policy by printing $400B and giving it to Jr. to buy votes with.

The corruption from that spending hurts us in more ways than just the fact that the everyone pays for it at the grocery store.

That is how 3rd world governments destroy their currency, when the ruling party can simply order printed money, and Canada, and every other nation, needs to get back to a sound currency if it is to have real wealth creation over the long haul.

—–

Yo, AM in MN, what if the goal is not to have a sound currency? What makes you think it ever was the goal? Maybe Jr. is just making this clear for us, a favour of sorts?

What if the goal is just to show growth in whatever fluid units you can claim to show growth?

The beauty of any currency, let’s say CAD in this case is that there isn’t some 1kg calibration weight sitting at Le Grand K, located in an environmentally monitored safe in a lower vault in the basement of the International Bureau of Weights and Measures in Sèvres, Paris against which 1kg remains the same exactly everywhere and anywhere at all times. Never was. All currencies are fluid and deteriorating, and someone decides how quickly it should be deteriorated based on data, feelings or perhaps instruction.

CAD is not a fixed unit of measure. Never was. It has been designed to erode in value with passage of time from the start.

Brilliant!

#11 Dolce Vita on 02.02.23 at 12:33 pm

#3 Mattl

https://www.google.com/finance/quote/META:NASDAQ?window=1Yhttps://www.google.com/finance/quote/META:NASDAQ?window=1Y

https://www.google.com/finance/quote/TSLA:NASDAQ?window=1Y

https://www.google.com/finance/quote/AAPL:NASDAQ?window=1Y

https://www.google.com/finance/quote/GOOGL:NASDAQ?window=1Y

#12 Parksville Prankster on 02.02.23 at 12:34 pm

Here in the land of the retirement mecca of Parksville, heart of the newly wed, or nearly dead on Vancouver Island, the same old game seems to be playing out on the streets:

List high last fall, refuse to budge on the price, if you don’t get your price, then delist, and relist in the spring at the same price.

That said, it seems like decent listings are snapped up pretty quickly, in spite of 1MM or more price tags.

Although, part of me wonders what the 75+ plus crowd is thinking buying up SFHs of over 2,500 sq ft., on half acre lots, when it’s just them and a couple pooches.

Ah well, trophy wives, trophy cars, and trophy houses – you know, to telegraph ‘success’.

#13 Old Boot on 02.02.23 at 12:34 pm

West Van =/= Vancouver’s west side.

#14 Dolce Vita on 02.02.23 at 12:35 pm

#3 Mattl

meta

https://www.google.com/finance/quote/META:NASDAQ?window=1Y

—————————————————–

Yes, tech is on a heater, some of my positions are +40% YTD. What is you point?

Also, how is the weather in Edmonton?

#42 Fiendish Thingy on 02.02.23 at 2:31 pm

Fed hikes, says no pause, hikes will continue…

Ok Garth, now what?

If the Fed keeps hiking, and BOC pauses, won’t that tank the Loonie?

#43 Alois on 02.02.23 at 2:32 pm

#12 Parksville Prankster on 02.02.23 at 12:34 pm
Here in the land of the retirement mecca of Parksville, heart of the newly wed, or nearly dead on Vancouver Island, the same old game seems to be playing out on the streets:

========================

Have (in – law) family there….

Couple is in their 80’s….sold their last home and bought new SFH from one of the major local SFH developers.

The homes are basically a choice of (5) stock plans and ranchers.

When we visited…they were discussing a $30,000 landscaping job to finish off the home…these are very small yards.

My guess between selling their last home…and buying this one….there must be 10’s of thousand of $$$ in fees, commissions, taxes etc. etc.

This couple is not in the best of health…plus one of their (2)daughters, recently divorced… had a serious health event.

I don’t get it…but to each their own.

#44 dave on 02.02.23 at 2:41 pm

If the Federal Reserve is increases rate, then doesnt Canada almost Always follows?

#45 greyswan on 02.02.23 at 2:48 pm

Ray Dalio was recently on the tube, warned about looming sovereign debt crisis…”who has the cash to cover the debt around the world after covid”. If someone does at what interest rate if inflation even moderates at 3 or 4 percent what would bonds returns have to offer?! Higher rate than 3% to attract investors to cover the debt to be real interest return. The Fed is not going to print money as before and attempting Quantitative tightening or selling bonds have back into the market.

#46 VanIslander on 02.02.23 at 2:50 pm

Let’s not forget all the private money mortgage lenders when rates tanked during Covid. They were quoted saying there many getting denied even at 1.5% but many approved who had no business owning. There has to be a ton of pain coming from those deals.

#47 American House Buyer on 02.02.23 at 2:51 pm

We love buying and selling cheap houses and condos we find throughout North America and beyond.

#48 mapleleafdweller on 02.02.23 at 2:53 pm

Aw shucks. You mean Canada’s strategy of becoming the world’s biggest economy by flipping houses to each other is back on? I say game on. Let those prices escalate to the moon bearing no resemblance to oft quoted fundamentals. I mean what else is Canada going to do to secure a high-tech future, foster innovation and attract high wage high productivity jobs. Apart from realtors. Of course.

Even the sage Garth has a vested interested in the correction being mild. Banks are invested in property ( what else are uncompetitive oligopolistic mediocre run banks) supposed to do? Extending amortizations to 75 years to avoid having to report on non performing loans is so pathetic. If I a US hedge fund I would short Canadian bank stock. Having worked for a number of European banks and dealing with them here, they are pretty amateur outfits.

Let the OFSI tear them to a new a**hole. By the way assertion is not fact. Prices have along way down to go and the one asset strategy to secure wealth most Canadians seem to pursue is about to backfire. Don’t mistake leverage for genius.

#49 an investor on 02.02.23 at 3:06 pm

#6 Miff Tacklem
Absolutely agree. Canadian RE is a money laundering scheme … we did NOT do this to ourselves.

Of course we did. 95% of all transactions are local-to-local. – Garth

#50 Neo on 02.02.23 at 3:20 pm

Ask not what a home is worth on the local market. Ask what your country is worth on a globalized market.

Most people simply cant understand the magnitude of eight hundred thousand souls seeking shelter in 3 cities over the next 11 months.

Good luck to all the chumps that were born too late. You’re going to need it. Your country is a joke.

#51 yvr_lurker on 02.02.23 at 3:29 pm

Garth says “Most people do not live there, will never be afford that hood and such has been the case… forever.”
———–
With regards to Vancouver Westside it was not so unaffordable in the late 1990s-2002. I know this for a fact as I was looking at that time. An old-timer (but still decent house in Dunbar or Kits on standard 33 foot lot) was between 450K–575K… Two teachers bring in 140K total at that time, no problem to purchase with 75K down…. Now same house is between 2.3M–2.8M….

the comment about forever is incorrect….

#52 B on 02.02.23 at 3:32 pm

Not enough listings for a sizable drop

#53 Rook on 02.02.23 at 3:32 pm

Can ANYBODY afford a down payment, and not gut their finances, at these prices and rates, without a gift from the Bank of Mom and Dad, or some sort of windfall?

If you’re single, it’s impossible, I reckon, unless you make $250,000 or $300,000 a year. I don’t know how many of those people there are. Certainly not me.

If you’re married, a household income of $250,000 is doable if there are 2 engineers, or lawyers or computer programmers, but I’m not sure how frequent that is, either.

#54 Lower the Boom....er not on 02.02.23 at 3:40 pm

Yogism #40: ‘Updated moniker heard up, down and around VI’ – “Newly wed, nearly dead and without bed”.

#55 bcPaul on 02.02.23 at 3:47 pm

House prices have yet to fall around here in the Salmon Arm area and don’t expect they will. Only 550% increase in home prices since 2003 whereas wages increased slightly.

#56 crowdedelevatorfartz on 02.02.23 at 3:48 pm

@#36 Ponzie’s predictions
“Also, it is said that Chinese Canadians are not keen about living on the side of a mountain.
Bad Feng Shui.”

+++
Tell that to Chinese Canadians people living in Burnaby.
Mind you.
I’d rather live in a mountainous area than “tsunami central”
aka Richmond…
When the overdue 8.5 Richter scale event hits.

#57 Gerald on 02.02.23 at 3:53 pm

But a 50% haircut seems fiction.

——————————

That’s because a 75% haircut will be fact.

Price to income is coming back, no matter how much pain it causes for all the suckers of the last decade.

This will be way worse than the 1990s.

I think there’s cabin fever raging below decks. – Garth

#58 Dismal Scientist on 02.02.23 at 3:58 pm

#10 Canadian Dollar on 02.02.23 at 12:12 pm

CAD is not a fixed unit of measure. Never was. It has been designed to erode in value with passage of time from the start.

—————————————————

True, but… We can think of relative measures for currency. My personal fave is M2 vs GDP. Here’s a quick peak at Murica https://fred.stlouisfed.org/graph/?g=eTtE . So yeah, if it feels like there’s a lot more money sloshing around that’s probably because there is. I haven’t found a simple graph for CAD but comparing data sources shows something similar. QT is beginning to mop up some of this but we’ve got a long way to go and I have no idea what the court wizards might consider a desirable or politically viable ratio.

#59 Old Retired Ron on 02.02.23 at 4:02 pm

It is too early to make assumptions about the RE market. December and January are always weird months with relatively few sellers or buyers.

# 1 The facts have not changed. After increasing almost 50% during Covid, GTA prices went down about 20%. Prices have been flat since last July.

Fact # 2. Current prices do not align with current mortgage rates. It is not the Bank’s fault. Mortgages are still historically low. It is Sellers expectations that grew out of the Covid price craziness that needs to adjust.

Fact #3 Rates cannot come down much. The Canadian economy is still chugging along with no recession in sight.
It is at least 12 -18 months too early to consider a rate reduction.

I expect this weeks TRREB numbers to show, flat prices, and low volume of sales, just like last month.

#60 Grandv!ew on 02.02.23 at 4:05 pm

I am really having difficult time understanding why would this house be costing as much as 3.38 Million CND or equivalent of
2.5 Million USD. I know this street intimately (my kid plays soccer at the school across the street). To be honest it is a fantastic neighborhood, (Kerrisdale) that most of the Vancouver people very seldom venture in (unless you are lucky or achieved status that allows you to live there). Still…. the house is fairly old and for someone to drop millions just to live there is quite something. One would think that there are at the very least equally stable, and equally beautiful places to buy the home and spend millions.
Maybe even with better weather or with far more opportunities for jobs or advancement.

https://goo.gl/maps/ti1qzSmtwiDeeq8W6

#61 Toronto Condo Anyone? on 02.02.23 at 4:13 pm

#42 GratefulCanadian on 02.02.23 at 2:29 pm

On the other hand, housing isn’t NFTs or crypto. Like food, it fulfils a basic need, and it’s not optional.

This. Right there, you nailed it.

Housing is a basic need.

And yet, someone should have to pay $7500 a month to have a 2bdrm condo in a market to satisfy this basic need?

The perversion around this need that has happened in this country is incredible.

Someone was asleep at the wheel for nearly 2 decades.

I’m sure it was accidental. If I may, a definition of a word:

car·ny1
/ˈkärnē/

noun: INFORMAL•NORTH AMERICAN
noun: carney

a carnival or amusement show.
“a carny atmosphere”
a person who works in a carnival or amusement show.

Indeed. Mark the date it all started, when the carnival came to town.

Carney saved your butt in the GFC. Stop looking for individuals upon which to hang our collective financial failures. Unseemly. – Garth

#62 dave on 02.02.23 at 4:13 pm

Most political analyst believe that Putin is one of the most clever, smart and experienced leaders in the world today.

After being in power for over 20 years…I dont think his plan was to crash and burn in Ukraine and be outsmarted that easily by NATO.

In the end, Russia and its allies are looking to provide an alternative to the US dollar for trade. And send as much inflation to the West as possible to destroy its economy.

#63 kommykim on 02.02.23 at 4:21 pm

RE: #31 Dog Poop on Sidewalk on 02.02.23 at 1:34 pm
But lately I’m often seeing dog poop scattered on sidewalk. Clear evidence the dog wanted to pinch a deuce, but the owner kept yanking on the dog’s leash and not giving the dog a minute to TCOB.

=======================================

There was evidence of this in my neighborhood. Poops from a large dog were dropped in a 8-10ft line on the sidewalk. I used to walk to work on this route for years and every week or two I’d see this trail of 4-6 pinched off turds.
Then one day I saw the walker and the dog ahead of me. Just as I approached, poop started dropping from the dog. The dog did not slow or pull on the leash at all and the owner was completely unaware of the droppings. It was like when a horse or cow does it; no real reaction from the animal.
I asked the woman to pick up her dog’s poop. She denied that it had even happened. Then I exclaimed something like, “I saw it drop right out of it’s ass 10 seconds ago and you can see it right there!”, got frustrated with her continued denial, and had to walk away.

#64 Yorkville Renter on 02.02.23 at 4:23 pm

Two more houses in the hood I follow have dropped prices…
One home that sold in November is back up after ‘deal fell thru’ and is listed for $25k below November’s sale price

A property I was watching sold in early Jan for LESS than what was paid in 2017

I think this is a Bull Trap market… places sitting longer.

Let’s see what the RE board cooks up in a few days

#65 Brian on 02.02.23 at 4:24 pm

In this stream, we go through the debt nightmare that is about to unfold. We discuss the data using Toronto as an example and we prove that this in fact a super bubble and no fundamental can explain the massive debt growth. But what we’ve seen actively is the greater fool theory playing out in front of our eyes in Canada’s real estate market and housing market. Canadians are massively exposed to this $2 trillion dollar debt bubble.

https://www.youtube.com/watch?v=5X9Z8TiLszI

#66 The real Kip (Ret) on 02.02.23 at 4:27 pm

Inflation at 6% and Macklem folds? We are to believe that the inflation battle that BoC created has been won? Calling horse dung on that one.

#67 Ole Doberman on 02.02.23 at 4:27 pm

Heard this rumor today, take with grain of salt of course:

Rubbish. – Garth

————————————————————-
Ummm…..I’m just going to leave this right over here:

https://ca.finance.yahoo.com/news/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoomaru-poll-110037392.html

Doesn’t even come close to passing the smell test. – Garth

#68 PeterfromCalgary on 02.02.23 at 4:28 pm

“The lowest fed funds rate was zero in 2008 and again in March 2020 in response to the coronavirus pandemic.”

There is nothing “normal” about this market. Consider:

The lowest fed funds rate was zero in 2008 and again in March 2020 in response to the coronavirus pandemic. So now the Fed funds rate is 4.5%. You can’t even calculate the increase percentage wise because you can’t divide by zero.

“Interestingly, rates aren’t just low within the context of American history. They also happen to be at the lowest levels in the last 5,000 years of civilization.”
https://www.businessinsider.com/chart-5000-years-of-interest-rates-history-2016-6

#69 Foggy on 02.02.23 at 4:29 pm

I do not understand:

– The average price (nationally) is down 23%, but affordability is worse than a year ago due to much higher interest rates.

– People being being denied mortgages (as per your article).

– POS coming down the pipe as people can no longer afford their mortgage payments (as per your article)

-> Yet the bottom is because of “pent up’ demand? Doesn’t matter how long someone’s demand has been “pent up”, if you couldn’t afford a house last year, how do you afford it now?

Because you sell and move up. Buyers have thinned. They have not vanished. Expect low volumes and price stability. – Garth

#70 Doing my Part on 02.02.23 at 4:36 pm

dave the real estate pumper is now a Russian political analyst, and most of his colleagues think “Putin is one of the most clever, smart and experienced leaders in the world today”, are you kidding?

Invading Ukraine the second time was a monumental F-up that really has very few comparisons since the early 20th century.

Putins days are numbered, he will go down in history, but it won’t be for being “clever”.

#71 Dogs Not Barking on 02.02.23 at 4:46 pm

Pent up demand may cause a dead cat bounce, but that’s about it. The math still dictates a withering in price, no way around it. Stability may result once the average wage earner can again afford the average home.

If GT’s assertion is correct and that 95% of sales are local to local, that is a massive red flag. Prices have nowhere to go but down, especially once the pent-up demand has bled off.

Pent-up demand is not infinite or sustainable. Once it’s gone, it’s gone.

#72 Ole Doberman on 02.02.23 at 4:51 pm

Heard this rumor today, take with grain of salt of course:

Rubbish. – Garth

————————————————————-
Ummm…..I’m just going to leave this right over here:

https://ca.finance.yahoo.com/news/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoomaru-poll-110037392.html

Doesn’t even come close to passing the smell test. – Garth
————————————————————

You’ve been calling for this moment since I found a copy of your blog on in the mens washroom on the floor in 2009 – now it’s finally here and you’re playing modest?!
Whats wrong with you man

Believe what you want, but almost half of people with VRMs are not going to crash and burn within ten months. Use your head. – Garth

#73 Alois on 02.02.23 at 4:52 pm

#65 kommykim on 02.02.23 at 4:21 pm

=======================================

=========================
Sigh

This site is going to the dogs……

(….actually worse? …dog $#@& ?!? )

#74 Franco on 02.02.23 at 4:55 pm

For house prices to drop 50% in this country, interest rates would have to go to north of 12% and a complete economic disaster would have to happen, just cannot see that happening, unless WWIII breaks out, then we will have other things to worry about. Real estate has always been known as a safe investment, that is why they call it real.

#75 AM in MN on 02.02.23 at 5:02 pm

#8 Quintilian on 02.02.23 at 12:06 pm

There are hardly any Chinese people living on the North Shore.

———————————————————

people not from Vancouver sometimes have a hard time understanding 3 completely different areas of town;

– The West side of Vancouver, officially west of Main St., but in reality west of Oak St. The original British builders of the city designed it for the upper classes, with the east side for the working classes. This was before they even built the Airport and when UBC was a half a dozen buildings.

– The West End (nick named the “rear end”) became very popular with the gay community from about the ’70’s on, as well as retired folks west of Denman who like being beside Stanley Park

– West Vancouver – its own municipality, one of the wealthiest in the country. Very little heavy industry, unlike North Vancouver to the east of the Capilano River

#76 Palpha on 02.02.23 at 5:03 pm

How can prices not go down?
Home sales down 55%

#77 GratefulCanadian on 02.02.23 at 5:10 pm

#38 Toronto Condo Anyone? on 02.02.23 at 2:15 pm

If your comparison wouldn’t have zoomed in too much on one example, it could have been good. As you present it, it’s unfortunately not representative.

The choice isn’t between $2700/month in rent or $1.3mil with a 300K downpayment/1mil mortgage. For instance, in my building (15yrs old, walking distance from subway) for $2700 a family can rent a 2BR+den condo with 2 parking spots. The same unit costs about 725-750K. Going with a $735K purchase price and a $35K downpayment, at a 5yrs closed mortgage from one of the big banks the monthly is $4,289.05 (which probably can be negotiated down somewhat). Fees & property tax add another $500/month. So as of today the total is about $4,800 which vs $2700 means about $2,100 extra, which is not pocket change, I agree. However, in five years time, the then-rent might catch up with the then-mortgage amount (it has happened here a few times over the last couple of decades), and if they chose to rent today, they might regret it later.

Bottom line: I’m with you, both the rents and the monthly mortgage costs are ridiculous, especially considering what one gets in exchange – crappy weather in most locales, a debatable state of the economy, and a somewhat questionable future (but promising). But applying this logic, one might wonder why anyone would live here. But people do, and many more are joining them every year. They can’t all be stupid!

#78 Alois on 02.02.23 at 5:11 pm

Back in the ugly early 1980’s..

Met this fellow…a Dentist….who had a home in Vancouver and was trying to do a reno.

He ran into opposition by neighbours…got Po’d…sold… and bought a home in Richmond. He said he paid around $350,000 for an older house on an acre.

The 20% interest rates hit….his immediate neighbour was near foreclosure…and the dentist bought him out for around $ 180,0000..again older house on an acre aka Dentist paid about 1/2 price what Dentist paid for the Dentists’ own home.

Back in the day…this was not unusual…I could cite another example. (Point is…it can happen, but again it was the ugly 1980’s.)

The dentist ultimately sold BOTH properties for a large sum when the area was rezoned.

An anecdote from past RE wars….

#79 Nonplused on 02.02.23 at 5:14 pm

And also remember that inflation has also added 10% of “value” to the “price” of a house over the last 2 years, maybe more. It is hard to know what things are worth when the money is dying but with houses going down or even staying the same while inflation goes up, the actual “purchasing power” of said house is going down even faster.

So your 30% drop in house prices is actually already 40%. Yikes!

Remember, when inflation is high even the price of rocks goes up. If there is high inflation and your “thing” isn’t going up in price, then it is really going down in value. Fast.

#80 Don on 02.02.23 at 5:20 pm

#22 Toronto Condo Anyone?

In every market, there are dead cat bounces, where the promoters of such events call it the turn around point to hussuell customers into real estate, stock portfolios, only to see the bottom is far below. All they do is make money on those short bounces, luring unsuspecting clients into the trap. Their attitude ‘Who cares, I made my commission”.

This so called BOTTOM will be pumped by REMAXERs to the hilt.

I am yet to find a realtor , who would say it is NOT A good time to buy.

#81 Chaddywack on 02.02.23 at 5:22 pm

I will have to respectfully disagree with you Garth. There has been such a high number of cancellations/terminations in Vancouver over the last year. Nearly every house I looked at ended up going no bid and the ones that sold went several hundred K under asking.

I’m noticing a lot of these former terminations starting to list again (strangely often at the same prices they didn’t sell for before–didn’t work the first time so why not try again!). That plus new listings in the spring will up the supply side in my view, but we shall see.

#82 Shawn on 02.02.23 at 5:27 pm

Yes, house prices love lower interest rates.

…For the Bible of investment knowledge (Warren Buffett) tells me so.

Follow the math…

Imagine for a moment that the biggest benefit to owning a house is to avoid rent. Probably, not true, but bear with me.

How much would you pay to avoid rent of $24,000 a year. And let’s say for sake of argument that is maybe $3000 in rent but you deduct $1000 for monthly costs that a homeowner faces that a renter does not. Just for argument.

Okay here’s the math: If long term interest rates (or the amount you could get investing elsewhere) are 10% then saving $24,000 a year is worth $240,000. Calculated as 24,000 divided by 0.10. So, with this math the house is worth $240,000.

Let’s say you could make Garth’s often-stated 7%. Then to save $24,000 annually you could invest $24,000 / 0.07 = $343,000 (I round because of significant digits)

At 5% interest (You borrow and keep your funds invested at 7%) you could pay $480,000 for the house to avoid $24,000 net of other homeowner costs.

At 2% borrowed cost you could pay $1,200,000 or $1.2 million.

At 1% it’s $2.4 million.

So there laid bare is the extremely simple math that shows you the extraordinary power of extraordinarily low interest rates can have on home prices.

And you see, it has NOTHING to do with a ratio of home prices to earnings.

All else equal, lower interest rates mean higher home prices. Higher interest rates all else equal mean lower home prices.

Ain’t it simple? It’s simple math. The kind of math most people in school say they will never need.

#83 You know Val on 02.02.23 at 5:36 pm

Rates are on a Conditional Hold. I guess no body likes to use the work Conditional. Let’s see what the numbers say before we stroke ourselves again into a worst inflationary environment. Remember Tiff And Jerome are Data Dependent.

#84 Bill on 02.02.23 at 5:38 pm

Three words for the spring real estate market:

Dead cat bounce.

In a month we will know more. Unlike you, who knows it all now. – Garth

#85 SunShowers on 02.02.23 at 5:39 pm

#73 Ole Doberman on 02.02.23 at 4:51 pm
“You’ve been calling for this moment since I found a copy of your blog on in the mens washroom on the floor in 2009 – now it’s finally here and you’re playing modest?!
Whats wrong with you man”

Ok, which blog dog would be most likely to scrawl graffiti about Garth in the men’s room?

Was Smoking Man posting in 2009?

#86 Work and Tumble on 02.02.23 at 5:39 pm

Just keep an eye on the American FED as they will keep on moving up slowly and BOC will follow.
I am not feeling confident about a rebounding housing market in Canada, you would have to be nuts to get in this year.

If you believe the price correction will surpass 23%, wait. If you think pent-up demand and a rate pause mean this is the bottom, don’t wait. It’s a gamble. – Garth

#87 Shawn on 02.02.23 at 5:53 pm

My House price example above

I treated the $24,000 NET rent savings as a perpetuity (as in forever). And I assumed the interest rate was applicable to a risk-free perpetuity.

This makes it an idealized case. In the real world the home price movements will not be as severe as those for a risk-free perpetuity.

But you look at the math of a perpetuity to understand the basic underlying power of interest rates to impact the value of all financial assets.

Lower interest rates are equivalent to weaker gravity when if comes to the value of future dollars.

#88 wallflower on 02.02.23 at 5:56 pm

In my southern Ontariowe city, the number of unlived in, never lived in, recently built condo apartments and townhouses grows daily. It simply does not go down in number, it just keeps going up while the asking prices keep going down and converging into one main price band. DOMs going up up up.

Relistings with new numbers to reset the DOM and reduce price now common on RENTALS!!!!

#89 Craig on 02.02.23 at 5:59 pm

Current US fed funds rate now 4.5-4.75%. General consensus in the States at the moment seems to indicate another 2 hikes of .25% each this year before pausing. If the US does move to 5-5.25% range , can Canada afford to hold at 4.5% ?

#90 Toronto Condo Anyone? on 02.02.23 at 6:02 pm

#62 Toronto Condo Anyone? on 02.02.23 at 4:13 pm

Carney saved your butt in the GFC. Stop looking for individuals upon which to hang our collective financial failures. Unseemly. – Garth

Nailed it Garth! Well put.
CFF – Collective Financial Failures

The thing is, some have contributed more to our failures than others. Some have more say in them than others.

Some put the drugs on the table at the party, stepped back and watched it happen.

Parents who protect children from challenges and adversity of all cost by helicoptering over them all the time, are they helping them, or putting weaklings into the world?

Dentists who shoot up your gums with pain killers, when they know they could drill and maybe cause you a touch of pain, but spare you the injection and 2 hour numb hangover, are they helping their patients by not suggesting no shot pain option or are they hurting them?

Doctors who prescribe opioids seemingly carelessly for pain claimed by patients as needing these, who are they helping?

And same is true with finance, as you know better than anyone by being in the industry.

The helicoptering and “butt saving” has resulted in no deleveraging of debt among the masses and governments. Far from it!

And now what is the next logical question? It took 3.5 trillion to bail out the GFC mess. It took, we’re told 20 trillion to bail out the Covid mess. The debt keeps climbing and no one seems to be worried. Rainbows and unicorns!

There is no free lunch Garth, as we all know. Something has got to give. Already the system is highly manipulated and rigged and with each day giving less and less incentive for people to participate. And they are participating less and less.

Collective Financial Failures indeed.

#78 GratefulCanadian

Fair point. Funny enough I was going to run the example with a lower cost unit down the street, this one:
https://www.realtor.ca/real-estate/25237926/101-2511-bloor-st-w-toronto-high-park-swansea

But you’ve saved me the trouble. Obviously if the $1.3M place is triple the equivalent rent, the $848,000 place will be double the rent. This was slightly more than double due to maintenance fees. Note older buildings, higher maintenance fees, obviously.

Your example also shows how out of what ownership is.

The double the cost of renting premium is clearly out of whack, for the liability of ownership associated with the condo. $2100 you note in your calculation is not nothing. We are talking about $25,200 per year, not including improvement/other costs. $126,000 over first 5 years.
This premium surely continues for another 5 years at least.

Assumption of course is that the asking price of the unit at $735,000 is retained at a later time. However, there is hardly a guarantee of that in an older building with likely increasing maintenance fees, large assessments and required improvements to pipes, boilers, HVac, etc. all of which would be the responsibility of the owners of units, and not renters.

Condo unit owner says my rent is going up by $1000 because of these improvements – SO LONG OWNER! I’m moving out.

Thank you for acknowledging that things are out of whack. I don’t see ay problem with that $735,000 unit being $375,000 for example.

#91 Ronaldo on 02.02.23 at 6:50 pm

#1 Steven Rowlandson on 02.02.23 at 11:11 am
Corrections in real estate prices are not possible without all the price gains since the mid 1960s being wiped away.
——————————————————————
So in other words, an averaged priced house of say $1,000,000 in Vancouver would need to drop to $20,000 in order to satisfy your idea of a correction. That is absolutely insane.

Insanity is abundant here today. – Garth

#92 Two-thirds on 02.02.23 at 6:50 pm

Timing is the real question. As if on cue, poll results released today state that “45% with variable mortgages say they would have to sell in under 9 months.”

Interestingly, roughly one third of poll respondents report no impact from rate increases while 38% say they can manage. So overall, the minority are under significant pressure, which lends some credibility to Garth’s correction postulate.

https://www.msn.com/en-ca/money/finance-real-estate/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoo-maru-poll/ar-AA171AaT?cvid=95ab384dfba4431eb0044431866163f8

For those waiting for other people’s misery, check back in October…

#93 GratefulCanadian on 02.02.23 at 6:58 pm

#83 Shawn on 02.02.23 at 5:27 pm

Your options analysis looks good. On paper. Most human beings aren’t the rational kind. They want a place to call home. A place where they hope to enjoy their golden years at a lower cost then if they’d be renting. Daily, they drive by the homeless and tell themselves that they need to do whatever it takes to never join them. They want to impress their significant other, their families, their friends – and if some do that with a fancy car – for others having their own place is the way to go. Also, homeownership is a cultural thing. Many immigrants want to leave something behind for their offspring. No matter how much one explains to them that this is inefficient from a fiscal perspective – no one will change their mind, no matter how smart they are, and how much math they know (and some know a lot of STEM, that’s how they made it to here). Finally, some (many, actually) simply cannot save money, no matter what. Those ones would spend any leftover amount that they save by renting (instead of having a mortgage), so at the end they have no equity (or place bought outright), and no savings. For them it’s a good forced retirement savings plan.

Bottom line: “typical” housing (not talking about the white mansion by the lake or sea, or the fancy penthouse downtown) shall not be regarded as an investment, but simply a place to call home, where one is to enjoy beautiful moments together with the loved ones. If more thought that way, houses would cost less, and there would be more disposable income to invest. But one shall not play the roulette with the essentials, as that seldom works well over the long run.

#94 DON on 02.02.23 at 7:04 pm

#52 yvr_lurker on 02.02.23 at 3:29 pm
Garth says “Most people do not live there, will never be afford that hood and such has been the case… forever.”
———–
With regards to Vancouver Westside it was not so unaffordable in the late 1990s-2002. I know this for a fact as I was looking at that time. An old-timer (but still decent house in Dunbar or Kits on standard 33 foot lot) was between 450K–575K… Two teachers bring in 140K total at that time, no problem to purchase with 75K down…. Now same house is between 2.3M–2.8M….

the comment about forever is incorrect….

**********
Can confirm also. A collegue and her husband bought a old house in Dunbar for 400k. When this whole bubble started to get off the ground. Condos on West 4th going for $165k. Then again interest rates were 7-8% I believe.

#95 Km on 02.02.23 at 7:04 pm

Why even talk about housing anymore. A real crash that would bring back affordability never happened and if covid and higher rates won’t do it , then it never will. Canada is for the rich now or those willing to be house poor. It won’t change.

#96 Steven Rowlandson on 02.02.23 at 7:06 pm

RE#49
There are plenty of things banks could supply credit to other than government and real estate.

Car loans, consumer credit, commercial and industrial enterprises. There is no need to subsidize bad behavior.

#97 Tony on 02.02.23 at 7:07 pm

Fed to raise at least another half a point and Tiff will be under the gun as the CPI comes out hot for January in Canada.

#98 crowdedelevatorfartz on 02.02.23 at 7:07 pm

@#92 Ronaldo
Re: Steve-O
“So in other words, an averaged priced house of say $1,000,000 in Vancouver would need to drop to $20,000 in order to satisfy your idea of a correction. That is absolutely insane.”
+++

Apparently the last few asylums in BC still open …have the internet…

#99 Wrk.dover on 02.02.23 at 7:22 pm

https://siestamotel.ca/

An old school third rate romance, low rate rondezvous
seasonal motel is going to be turned into monthly rentals.

A no vacant rental municipality, solution!

#100 The Great Gazoo on 02.02.23 at 7:28 pm

Grateful Canadian #41

“The typical house prices won’t fall by half, as they shouldn’t have increased to unreasonable levels either.”

I think you misunderstood. Oxford did NOT forecast prices would fall by half – they said the price correction is only half way to the bottom. Here is a quote from the article I referenced.

“They say Canada is only about half through the correction—if things don’t break.”

“The firm’s baseline scenario forecast sees home prices falling 30% in total, from peak-to-trough.”

#101 db on 02.02.23 at 7:28 pm

Hello,
Your smell test instincts were bang on though the readers quoting the Yahoo article were quoting it correctly; the article misunderstood what the poll result were.
Quote below is directly from what Manu Poll published in pdf form: (https://www.marugroup.net/public-opinion-polls/canada/rising-interest-rate-impact)

55% of variable rate mortgage and LOC holders felt they could manage their borrowing cost at the current rate of 4.5%; the rate was 66% for fixed rate mortgage holders.
Of the 45% of variable rate mortgage/LOC holders who said they were struggling, only 45% said they would be forced to sell/make other financial arrangements. This equates to roughly 20% of the total from the variable rate mortgage group.
For those with fixed rates, it was 35% of the 34% who were struggling, or roughly 12%.
The time-frame average for the former was roughly 8 months, for the latter it was 10 months (i.e. how long they could last before being forced to sell).

#102 Kootenay Dave on 02.02.23 at 7:53 pm

This should be an entertaining next few months, we’ll see where this thing goes. It just feels like many non-upper class people are overextended and reluctant to make big ticket purchases… but who knows? There’s probably a lot of debt scar tissue out there. My guess is that we’ll see a consolidation here for a bit and then another leg down… but who knows?

#103 the Jaguar on 02.02.23 at 8:12 pm

What a perfect storm. You couldn’t write this debacle as fiction.

After ridiculously prolonged low interest rates, resulting in inflated housing prices unsupported by wage gains, we followed with a feeding frenzy of further real estate madness caused by a once in a generation pandemic where everyone totally lost their minds. Then, just as the fog was beginning to lift the neo cons throw gas on the five alarm fire, exasperating choked supply chains and other geopolitical mayhem. In addition to the return of foreign students and the Liberal governments theory that we need 500,000 new peeps each year to keep the population and economy stable we also have welcomed in a pretty significant number of refugees.
This from an article in the Calgary Herald mid January:
‘More than 760,000 applications have been received by the federal government for Ukrainian evacuee settlement and around 478,000 have been approved. Of those approved applications, approximately 20,000 have landed in Alberta. Each evacuee receives $3,000 per adult and $1,500 per child from the federal government. Nearly 20,000 Ukrainians have come to Alberta since the start of the war in February 2022, with the majority of them, around 8,000, settling in Calgary. Roughly 6,000 have gone to Edmonton, with the rest finding a home base in the province’s smaller cities and towns.’

That, and apparently the ‘Come to Alberta’ program has been a roaring success. “According to the annual estimates of interprovincial migrants by province of origin and destination, nearly 30,000 people moved from BC to Alberta last year, up considerably from the year before.”

It goes a long way to explaining the very sudden and significant change in rental vacancy rate numbers. Where does that number go if people have to bail on owned real estate and try to find rental accommodation, never mind the impact on schools, EMS, hospitals, nurses, doctors, etc. Pile on homelessness, a drug crisis, mental health issues run amok with other social disorders on the rise and we have a recipe for chaos.

Or maybe I’m just overreacting…. At least that cute French Canadian dog Becky lowers my blood pressure…

#104 VanLoserRenter on 02.02.23 at 8:14 pm

Lots of envelope math being thrown around here today. Since I live in this tony part of town (and do feel so special since “most people do not live there and will never be able to afford that hood”) why not share mine?

The houses are big between Oak and Granville and our updated 1920s build has around 2700 square feet upstairs plus a separate entrance basement suite that we rent out. Leafy street, big private yard, double garage etc.

Current assessment is $3.4m. At 5%/25/20% dp the monthly for the $2.72m mortgage would be $16037. Add in $1500 for taxes and insurance, plus $2833 for the opportunity cost of the $680k down (at a conservative 5%) and the total nut is just over $20,000/month. We pay a little over $5k which is a little bit below market but not dramatically so for this category. That’s before the rental income for the 2 bedroom suite.

One metric I like is expressing a house price in months of rent. In our case 666 months or over 55 years.

#105 Don on 02.02.23 at 8:21 pm

Large Commercial RE holding Co. is plannig to dump a seriers of building and hand over ketys to the banks.
Reason: No longer viable.

COrvid showed what a a waste time for employees to travel 5 days a weeks like slaves to fancy bulidings, driving, coffee, gas, weather, clothing.

I think my wife saved well over $40k over 2 years, still collecting the same salary with no drop in productivity.

Only people who are lobbying docotrs and professors to write fancy articles about the need to work together and social benefits of it are the Commercial RE owners
,Toronto included.

#106 Summertime on 02.02.23 at 8:21 pm

The facts:

1. FOMO was incentivized by countless number of targeted policies:

– 0 down 40 years ‘insured’ by CHMC mortgages
– zero rates for 15 years
– new ‘Home savings’ plan
– purchase of MBS by BoC
– extensive securitization of mortgages
– increase of limits for ‘insured’ mortgages
– zero deposit reserves requirements for the banks
– allowance of reverse mortgages
– Excessive HELOC

etc.

2. Based on current income and inflation house prices in Vancouver and GTA should be bellow 600 k for a SFH.
Condos at 300 k. With average statistical rates.

With market rates matching and above current real inflation we are talking 450 – 500 k SFH max for GTA.

3. It is clear that the number of 45 % of variable mortgages holders that can only make it for a few more months considering the excessive lending at 2 % mortgages (now that variable rate mortgages are at 6-7 %) is actually quite low.

How can excessive valuations of 2.5 times from normal market conditions be sustained without explosive crash in the housing market is beyond me.

4. It is clear that BoC will chicken out and reduce rates
very soon that will result in the continuation fo the horrific inflation.

I don’t buy the 6 % (seems more like double that) current CPI sold as a fake inflation number.

The worries:

1. Announcing a quick win against inflation with such meager interest rate increase knowing that wage inflation is coming is a very alarming fact.

You can’t win a fight against inflation without breaking the housing, labour market and the economies.

2. It seems the ‘soft landing’ verbal diarrhea is again in play as was the transitory inflation.

It shows that central banks are done

How can you have a soft landing and normalization
after years of extremely bad policies of zero rates?

3. What will be the real inflationary price to pay in order to maintain ‘stability’ in the economy/financial sector?

I watched ‘The Big Short’ again recently and for me things are 2-3 times worse now in GTA in terms of valuations compared to intrinsic value of housing than they were at the peak of the bubble in 2006-2007 in US.

How can that be close to normal, so all is good and rosy is Utter BS for me.

You can’t have the cake and eat it too.

4. Continuous reassurance that ‘all is well’ by former contrarians only supports the view that things are so much worse in the debt/inflation department than officially claimed that even they can not continue the contrarian line in fear of being accused of spreading fear and panic, as there will be a blame game when SHTF/when the thingy hits the fan and the starting praise of central bankers when they should be criticized for their bad policies is another indication on where this is going.

————————————-

If we are to maintain integrity in the view that there is a huge housing bubble for over 10-15 years that resulted in 300-400 % increase in house prices and now with 20 % correction it is suddenly over, we need to acknowledge that the real inflation was much higher than the official 2 % reported in the past and with housing representing over 50 % of household expenses
that inflation was probably 8 – 10 %, so now with inflation of necessities further skyrocketing:

How on earth is temporary 4-5 % nominal rates enough to curtain and fight inflation of at least double that number for the last 1.5 -2 decades?

The average rates for the last 10-15 years have been sub 2 % and will soon dive again.

How much longer will this charade and circus with lying that much about inflation continue?

And what will be the end result from continuing on this path?

#107 Don on 02.02.23 at 8:27 pm

#93 Two-thirds

I bought my first Condo for $125,000. The Seller paid $205,000 for it, in 1993.

Is that 40%?. Not good in math.

#108 Ponzius Pilatus on 02.02.23 at 8:35 pm

93 Two-thirds on 02.02.23 at 6:50 pm
Timing is the real question. As if on cue, poll results released today state that “45% with variable mortgages say they would have to sell in under 9 months.”

https://www.msn.com/en-ca/money/finance-real-estate/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoo-maru-poll/ar-AA171AaT?cvid=95ab384dfba4431eb0044431866163f8

For those waiting for other people’s misery, check back in October…
——————-
Lots of F-150s can be sold before this happens.

#109 Junior Gold Miner on 02.02.23 at 8:49 pm

DELETED

#110 Alois on 02.02.23 at 8:54 pm

Life is politics …baby….

https://www.macleans.ca/society/14-weird-platform-promises-from-the-now-defunct-rhinoceros-party/

1. Take Canada off the gold standard, opting instead to use a snow standard to boost the economy. (And then, when summer comes . . . not sure yet.)

2. Repeal the law of gravity.

3. Provide higher education by building taller schools.

4. Pave the Bay of Fundy to make more parking for the Maritimes.

5. Change Montreal’s rue Ste-Catherine into the world’s longest bowling alley.

6. Count the Thousand Islands to make sure the Americans didn’t steal any.

7. Ban crappy Canadian winters.

8. Abolish all laws to end crime.

9. Tear down the Rockies so Albertans can see the Pacific sunset.

10. Abolish lawn mowing in Outremont, Que.

11. Ban guns and butter—both kill.

12. Reform Loto-Canada, replacing cash prizes with Senate appointments.

13. Forget having two official languages; replace with having two official ears.

14. The Queen would now be seated in Buckingham, Que.

===============

PS
…. missed one of my faves….

Rhino Party policy:

“…..Vehicular traffic patterns and traffic flows move from driving on RHS of road to LHS.
….to be phased in slowly. “

#111 crowdedelevatorfartz on 02.02.23 at 9:16 pm

Look up!
Its a bird!
Its a plane!
Its a Chinese surveillance balloon!

https://www.cbc.ca/news/world/us-china-suspected-spy-balloon-1.6735320

#112 The Great Gazoo on 02.02.23 at 9:22 pm

Increases of 6.9% like this are not going to be helpful to bring inflation to the B of C’s 2% target.

“The electricity provider, Nova Scotia Power, struck an agreement in November …… The deal allowed rate increases averaging 6.9 per cent in each of 2023 and 2024…… The regulator, the Nova Scotia Utility and Review Board, approved the increase on Thursday.”

https://www.theglobeandmail.com/business/article-nova-scotia-utility-rate-hikes/

I believe inflation will remain entrenched in the 4-5% range for the next year at least.

#113 yvr_lurker on 02.02.23 at 9:29 pm

Don:
Can confirm also. A collegue and her husband bought a old house in Dunbar for 400k. When this whole bubble started to get off the ground. Condos on West 4th going for $165k. Then again interest rates were 7-8% I believe.-
—————

Yes that is how it was in the late 1990s until around 2003. My friends one who taught in a high school and the other at Langara (and who had no family plan $$$), bought a really decent (but older) house in 2000 for 525K…. I am sure they were pulling in around 120-140K per year… no big struggle… We were set to buy in 2002 a house on a 50 foot lot for 625K, but the deposit was a little below the threshold for that stupid mortgage insurance as I had lost some $$$ in market in the dotcom bust. We would have to pony up for the insurance with what we had. We ended up passing on this house. Big mistake for sure, and should have taken a gamble. Took us many years to have the income to buy something decent as houses were appreciating far faster than our incomes.

Just want to emphasize that the word that Garth used, “foreover unaffordable” is completely incorrect for most parts of Vancouver. It is only since the meteoric rise since around 2005 that buying a SFH in most parts of west side of Vancouver are out of the cards except for the highest income earners.

The way things are going in this country in our major cities, we will be looking more and more like Seoul, Hong Kong, Tokyo, where the only thing that urban families with a high income can purchase is some condo in a highrise. Owning a lawnmower will become the ultimate status symbol as it implies you have land that needs upkeep. Great progress that has been made over the years (sarcastic).

#114 Faron on 02.02.23 at 9:39 pm

#116 crowdedelevatorfartz on 02.02.23 at 8:22 am

@#103 Faron

PHD

—

Ph.D.

And, AFAIK, there aren’t any meteorologists who comment here.

#115 youneedto on 02.02.23 at 9:52 pm

You need to write a new blog because it does seem today that prices are down 55% from year earlier the cbc just reported. If your last sentence indicated that it would not happen, i cant understand what you wrote completely.

#116 crowdedelevatorfartz on 02.02.23 at 10:16 pm

@#103 the jag
“Then, just as the fog was beginning to lift the neo cons throw gas on the five alarm fire, exasperating choked supply chains and other geopolitical mayhem.”

++++
The “neocons”?

I thought it was Putin’s paranoia and Liberal /Democratic govts throwing the fiscal doors wide open to billions in free cash….no strings attached.

Then we had the millions of people fed up with the endless pc/apologist policies of their govt and private sector employers driving them stark raving mad so….they quit.

Let the Mills and Gee Zee’s create a perfect utopia where no one works and everyone gets a Universal income.
Pollution problems solved.

#117 TurnerNation on 02.02.23 at 10:39 pm

Oh-oh. What do our global Rulers have in store for us?
Get out there and vote! For your lapdog. T2, JS, PP. Pick your poison.

https://twitter.com/vonderleyen/status/1620746760279805952?
Ursula von der Leyen @vonderleyen
EU official President of the @EU_Commission
The Green Deal Industrial Plan
In the next few years the economic shape of the net-zero age will be firmly set.
We have a strong starting point with the #EUGreenDeal
Now let’s be fast and united, to secure our place in this new economy.

—— We were to be so healthy these days :-(

https://www.irishexaminer.com/news/arid-41059661.html
The death rate in Cork has been so high in the last two months that bodies had to be stored in the city’s hospitals until space became available at the Cork City Morgue.
A spike in the number of deaths in recent weeks has disrupted funeral arrangements and put mortuaries under unprecedented stress.
An analysis of rip.ie shows there were 1,092 deaths in Cork alone from December 1, 2022, to January 25, 2023 — an increase of 16.4% from a year earlier.

#118 DON on 02.02.23 at 10:47 pm

#93 Two-thirds on 02.02.23 at 6:50 pm
Timing is the real question. As if on cue, poll results released today state that “45% with variable mortgages say they would have to sell in under 9 months.”

https://www.msn.com/en-ca/money/finance-real-estate/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoo-maru-poll/ar-AA171AaT?cvid=95ab384dfba4431eb0044431866163f8

For those waiting for other people’s misery, check back in October…

********
Has anyone brothered to factor in other debt…heloc, line of credit, car loans, credit cards etc.

#119 Groundhog Day on 02.02.23 at 11:06 pm

Fred the Groundhog died before being taken out to see his shadow?

OH BOY!

What does this say for the economy prediction this spring?

https://www.cbc.ca/news/canada/montreal/fred-la-marmotte-dies-1.6734368

#120 Dr V on 02.02.23 at 11:24 pm

116 you need to……check your facts more closely, and provide a link.

The 55% drop is in the number of sales (not the price)
in Greater Vancouver.

https://www.cbc.ca/news/canada/british-columbia/january-home-sales-down-greater-vancouver-1.6734982

#121 Dr V on 02.02.23 at 11:47 pm

119 DON (and others regarding the yahoo finance article)

Check the source of any articles on Yahoo. I have found various yahoo staff writers to be….. inaccurate?? Generally of higher integrity if provided by reputable news agencies (Reuters, Canadian Press etc).

https://ca.finance.yahoo.com/news/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoomaru-poll-110037392.html

“Alicja Siekierska is senior reporter based in Toronto. She covers Canadian business news, including inflation and the transportation and retail industries. She previously worked as a reporter at the Financial Post, Toronto Star, Globe and Mail and Edmonton Journal.”

#122 DON on 02.02.23 at 11:54 pm

#116 youneedto on 02.02.23 at 9:52 pm
You need to write a new blog because it does seem today that prices are down 55% from year earlier the cbc just reported. If your last sentence indicated that it would not happen, i cant understand what you wrote completely.

********

You need to show some respect to our Host.

And that was sales, Not prices.

#123 LeeBee on 02.02.23 at 11:56 pm

Great doggie pics !

#124 Darren on 02.03.23 at 12:16 am

For the record – I did say “West Side Vancouver” in the message to Garth – – I know our location names in Vancouver are hard to keep in line (for the non-locals) – – so it was lost in translation – – the rest of the facts are true – – and the move in price on this exact house exactly tracks the HPI for Van-West detached . . 5 year move is -11.6%. The point of my message was also two-fold.
1.) The areas with the largest foreign demand concentration have shown the largest impacts from the implication of the foreign buyer’s tax.
2.) The general market moves over the past 5 years show that in the end – it is cheap credit and local money that is driving the broader market. We are now seeing that impact with higher rates bring prices down.

The example house shows a sale price of $3.38 million – so not below $3m as someone above seemed to imply was not possible (as it was not).

#125 ulsterman on 02.03.23 at 1:17 am

Folks I’ve been reading bear blogs about Vancouver since around 2005, maybe earlier. Give it up. No matter what happens, be it GFC, pandemic, massive rate rises, nothing will ever make the market significantly correct.

How much longer and how many “big events” will it take before you realize that it just isn’t happening? Look back on the big events. Even if the “Big One” flattened the city, i think we’d just see a rebuilding boom and people saying all was well now because it will be hundreds of years until the next quake.

Save yourself the pain. Either buy what you can afford and settle down to paying it off, and get on with other more productive activities or move away to a more affordable market.

If you do decide to battle on, figure out a number. The number of years you can keep rationalizing and justifying. Is it 10, 20, 30?

Yeah, I AM in a pissy mood but honestly i want to save some of you younger blog dogs from another decade of wasting your time.

#126 jane24 on 02.03.23 at 1:46 am

This is definitely a dead cat bounce as although buyers will visit open houses and make offers, at the current mortgage rates they won’t be able to obtain a mortgage. Plus the banks are running scared and won’t appraise at the purchase price. End of.

Lastly the only reason that Canadians mortgage their souls and suffer and eat cat food in poverty for a house of their own is that they believed that the house would make them a fortune in a forever rising market. Once this belief has gone, the market is done.

#127 fishman on 02.03.23 at 1:59 am

Anybody looking at Windy lately. Looks like tomorrow night it finally starts to freeze in the Ukraine. Heavy Armour needs at least 4 or 5 freezing days. Tuesday it gets down to -6. Looks like -6 for 10 days. Beyond that? If the Ruskies are going to attempt a break through with heavy armour, their going to have to start by the middle of next week. Wednesday we should know if its show time. Otherwise, I guess they keep turning the handle on the meat grinder till summer.

#128 Polozi Scheme on 02.03.23 at 3:33 am

#114

I concur completely. So what accounted for the meteoric rise in Westside prices over a decade or two starting in 2002 roughly? Last I checked the increase over the period was roughly 600%. Interest rates?

#129 J-Pow on 02.03.23 at 5:06 am

The house pumpers apparently can’t understand basic math. Pent up demand from whom? Who can afford these houses when they eat up the lion’s share of after tax pay. The only people who can afford a house are the ones sitting on mountains of equity thanks to the recent bubble. The entry level market is devoid of any rational economics.

By the way, despite the poo-pooing of Mr. Musk and Tesla, anyone who got into Tesla in early January has reaped a massive gain. As I said then, and I’ll say now, Tesla isn’t car company. It’s an AI company that is far ahead of any other company in this industry.

#130 under the radar on 02.03.23 at 5:25 am

Population growth and immigration drive real estate. Interest rates and income determine affordability. The flat on the back crowd who plunged in at peak mania are stuck as are those who rent with aspirations to own. Rents keep rising , competition is fierce and higher rates offset price declines. So indeed, a perfect storm. Navigate with caution for those determined to put a million dollar noose around their necks.
Equity markets on fire, not based on great earnings, but on FOMO as risk is now soup of the day. Market says no recession good times ahead with lower rates coming. Maybe, I was never good at looking through the clouds.

#131 Harvey on 02.03.23 at 7:39 am

Government will destroy the Cdn Dollar to save the property bubble…..

#132 The Great Gazoo on 02.03.23 at 8:38 am

“U.S. added 517,000 jobs in January”

https://www.cnbc.com/2023/02/02/stock-futures-fall-after-earnings-reports-from-apple-alphabet-disappoint-investors.html

I think this is great news – jobs for everyone who wants one. Doesn’t bode well for those expecting interest rate cuts in 23.

#133 H.G. Wells on 02.03.23 at 9:00 am

From: A Short History of the World 1922
Chapter: Modern Political and Social Ideas

…on ownership and debt.

“In the natural savage and in the untutored man today there is no limitation to the sphere of ownership. Whatever you can fight for, you can own; womenfolk, spared captive, captured beast, forest glade, stone-pit, or what not. As the community grew, a sort of law came to restrain internecine fighting, men developed rough-and-ready methods of settling proprietorship. Men could own what they were the first to make or capture or claim. It seemed natural that a debtor who could not pay should become the property of his creditor. Equally natural was it that after claiming a patch of land a man should exact payment from anyone who wanted to use it. It was only slowly, as the possibilities of organized life dawned on men, that this unlimited ownership in anything whatever began to be recognized as a nuisance. Men found themselves born into a universe all owned and claimed; nay, they found themselves born, owner and claimed. The social struggles of the earlier civilization are difficult to trace now, but the history we have told of the Roman republic shows a community waking up to the idea that debts may be repudiated, and that the unlimited ownership of land is also an inconvenience. We find that later Babylonia severely limited the rights to property in slaves. Finally, we find in the teaching of the great Revolutionist, Jesus of Nazareth, such an attack upon property as had never been before. Easier it was, he said, for a camel to go through the eye of a needle than for the owner of great possessions to enter the kingdom of Heaven.”

#134 Tony on 02.03.23 at 9:31 am

Re: #133 The Great Gazoo on 02.03.23 at 8:38 am

All good news my brother-in-law has a big holding in Apple and finally, finally a legit earnings report.

#135 Dharma Bum on 02.03.23 at 9:35 am

Ph. D.

Piled high.

Deep.

#136 Tony on 02.03.23 at 9:36 am

Re: #132 Harvey on 02.03.23 at 7:39 am

I’ll be shocked if the January CPI isn’t a lot higher than the December CPI in Canada. Only used car prices fell food decelerated slightly and almost everything else was much higher.

#137 Tony on 02.03.23 at 9:46 am

Re: #131 under the radar on 02.03.23 at 5:25 am

Hopes for a recession in America pushed the equity market higher in January in America. That hope is starting to fade. Awaiting the January CPI in America which should be marginally higher than the December CPI.

#138 Sail Away on 02.03.23 at 10:00 am

Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

https://twitter.com/fonsdk/status/1621249873176567813?s=46&t=BEYY_a5yJJR-geUo7fzxdA

#139 Observer on 02.03.23 at 10:14 am

My guess is as good as anyone else’s, but I suspect house prices will drop further. Perhaps we’re seeing a dead cat bounce.

#140 Observer on 02.03.23 at 10:29 am

I and my spouse sold our family home in Brantford in 2012 for 320K due to a job relocation to Ottawa. It was a newer raised ranch, 1500 square feet on main level. A similar, but slightly larger home on the same street with higher level finishings sold for just under 1 million summer of 2022. A similar, but smaller home on the same street is currently listed for 975K. I think the sellers are dreaming and the fever in bunny patch has ended.

I kick myself for not buying back into the real estate market after leaving Brantford. Thought we’d rent and wait a bit as prices seemed expensive in Ottawa compared to Brantford in 2012. Of course prices went balistic, and are now unafforadable for us.

Not all Boomers made out like bandits in the housing market. Depends when you first bought in (1989 for us) and sold. The younger people who got into the market ten years ago or so have seen nothing but uppa, uppa, but yeah…Boomers had it great.

#141 Quintilian on 02.03.23 at 10:30 am

DELETED

#142 the Jaguar on 02.03.23 at 10:32 am

Snippet (NP).

Wow! Don’t know how I missed this previously. Under the “Business Card Directory’ section of the NP is the following advertisement for services. Looks like any money or mortgage problem or worry about financial markets can be solved with a simple phone call to this Spiritual Healer & Coach. Who knew?

“Specialized in all kind of love situation. Remove all kind of black magic, witchcraft, evil spirits, curse & depression. We restore luck, jobs, position, impotence, sexual desires, court case & more. Destroy enemies & offer protection 100% guaranteed result in seven days!’

#143 Flaming Anarchist on 02.03.23 at 10:35 am

On top of high prices for real estate we also have maintenance costs that so many new buyers have no awareness of. If you can’t paint, do some basic plumbing, wire up a light fixture or build a fence you will pay thousands more in maintenance costs. Electricians and plumbers run $100/hr most places in BC. Very quickly you can rack up a HELOC working on an older house. I did a rough calculation on my last house, paying myself $25/hr and my labour over 25 years would be easily 100k in labour costs.

#144 Artisanal Mining of Cobalt on 02.03.23 at 10:40 am

Anyone still want to brag about their electric car? You should feel utter shame and revulsion at your own naivete.

https://www.wsj.com/articles/cobalt-red-review-the-human-price-of-cobalt-11675293373

#145 Linda on 02.03.23 at 10:42 am

#137 ‘Tony’ – chances are CPI will come in lower in January than in December, because the cost of housing is part of the calculation. Since house prices have come down it follows that CPI will trail lower in turn, given that housing costs so much.

#146 DON on 02.03.23 at 10:45 am

#122 Dr V on 02.02.23 at 11:47 pm
119 DON (and others regarding the yahoo finance article)

https://ca.finance.yahoo.com/news/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoomaru-poll-110037392.html

*********
IMO they are All failing to provide any thoughtful analysis that can quench an information thirst.

#147 Lorne on 02.03.23 at 11:12 am

#130 J-Pow on 02.03.23 at 5:06 am
The house pumpers apparently can’t understand basic math. Pent up demand from whom? Who can afford these houses when they eat up the lion’s share of after tax pay. The only people who can afford a house are the ones sitting on mountains of equity thanks to the recent bubble. The entry level market is devoid of any rational economics.
……
Plus “move up buyers” have to sell their homes…which is problematic in this market unless prices on both ends drop.

Over 3,000 people sold their properties in Toronto last month. Three thousand people bought. – Garth

#148 Ponzius Pilatus on 02.03.23 at 11:21 am

#147 DON on 02.03.23 at 10:45 am
#122 Dr V on 02.02.23 at 11:47 pm
119 DON (and others regarding the yahoo finance article)

https://ca.finance.yahoo.com/news/45-with-variable-mortgages-say-they-would-have-to-sell-in-under-9-months-yahoomaru-poll-110037392.html

*********
IMO they are All failing to provide any thoughtful analysis that can quench an information thirst.
———————-
I for one.
Need at least 3 independent news sources.
Still waiting for the “facts” behind the “Spy Baloon”.

#149 Victor V on 02.03.23 at 11:47 am

The Homeowner Horror Story: “My Mortgage Is Up for Renewal.”

https://www.thestar.com/news/gta/2023/02/03/the-homeowner-horror-story-my-mortgage-is-up-for-renewal.html

In the cold depths of February, Josie Dye is already dreading summer. It should bring sunnier times. But instead, the thought fills her with fear.

“I think July is going to be a terrible month for me,” said Dye, a well-known local radio host on Indie88.

“My mortgage is up for renewal.”

Whether it’s that thought that pops up in the middle of the night or a constant low rumble in the background, Dye isn’t the only one with serious mortgage anxiety. According to the Bank of Canada, an estimated 1.1 million Canadian households are facing renewals this year. And they might be in for a shock.

After eight rate hikes in a row, they are facing a crisis a sharp increase in their monthly payments, and many are now in uncharted waters, even beyond the stress test rate they originally qualified for.

#150 Alois on 02.03.23 at 11:53 am

#126 ulsterman on 02.03.23 at 1:17 am
Folks I’ve been reading bear blogs about Vancouver since around 2005, maybe earlier. Give it up. No matter what happens, be it GFC, pandemic, massive rate rises, nothing will ever make the market significantly correct.

========================

Agree (and with other’s similar comments)

I once thought I’d be able to wait for a major RE collapse and dive right in !!!

Not saying it can’t won’t happen per se…..but my advice and experience for those ready willing and able to buy is to pick and choose your timing.

Scout out properties…your best bets are a stagnant listing, motivated seller and lack of bidding wars.

As I have posted before…we bought our SFH in 1996 and the assessed value has risen 5 X’s

Our sons bought a condo while Covid was ramping up…the sellers had to move… the Covid paranoia benefitted them in the purchase.

#151 Faron on 02.03.23 at 12:02 pm

#139 Sail Away on 02.03.23 at 10:00 am
Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

https://twitter.com/fonsdk/status/1621249873176567813?s=46&t=BEYY_a5yJJR-geUo7fzxdA

—

Breaks at least two laws in the clip.

“Design”. LOL.

Looks like something a clown with a fu manchu would drive.

#152 teddy on 02.03.23 at 12:07 pm

126 ulsterman

I used to see you comment on vancouver condo info. I was on the same blogs as you way back. VCI was the last of the blogs it died in 2020 I wonder what happened?
I agree with you. I think real estate in Vancouver is a horrible investment now but it won’t ever correct to any reasonable level.
Garth started this blog in 2008. I don’t really find his message on real estate clear so I won’t comment on him. But this blog is full of people from way back then waiting for some correction.
I believe there will be a correction in our standard of living and slow decay in the wests economy but sadly Vancouver real estate will be one of the last things to go.

#153 PBrasseur on 02.03.23 at 12:20 pm

Over 3,000 people sold their properties in Toronto last month. Three thousand people bought. – Garth

Why does that matters?

The huge real estate bubble in Canada is a severe structural problem, not a short term “what’s going to happen in the string problem”. Anybody with half a brain knows this market in unsustainable in the long term and that because of its size and share in the economy this has major long term effects for the economy.

As an investor (or advisor) this is all you need to know: Spelling it out, it means long term economic prospects for this country are in fact lousy (as says the OEDC…). It mean investing much in “maple” (banks for example) in likely not a good idea in the long run, and that is what really matters, unless you think you can efficiently time the markets.

It matters in the context it was written (which you ignored, typically). The poster said it was almost impossible to sell a home. Obviously, it’s not. – Garth

#154 Shawn on 02.03.23 at 12:43 pm

Wage Gains were not needed to support higher home prices when interest rates fell

#104 the Jaguar on 02.02.23 at 8:12 pm

What a perfect storm. You couldn’t write this debacle as fiction.

After ridiculously prolonged low interest rates, resulting in inflated housing prices unsupported by wage gains

******************************
I showed you the math at 83. When interest rates fell precipitously, home prices were destined to rise and did not need any support from wage gains.

That happened as the math basically required.

Now the math is pushing home prices in the other direction. Other factors apply including our massive immigration. But higher interest rates are a massive gravitational pull on home prices.

Has that increased gravity already had its impact or has the impact been offset by other buoyancy factors? Time will tell. I only presented the math not predictions.

#155 Re-Cowtown on 02.03.23 at 1:12 pm

I’ve been following the controversy over BCs new drug laws on social media. So far I notice two trends:

1. People who proclaim their pronouns are enthusiastic and believe it will work.

2. People with experience in the field and in places where it has been tried (Oregon) see it as a disastrous decision that will increase addiction, crime and deaths.

Which group do you think BCs politicians wish to please?

#156 Travelling on 02.03.23 at 1:20 pm

#50 an investor on 02.02.23 at 3:06 pm
#6 Miff Tacklem
Absolutely agree. Canadian RE is a money laundering scheme … we did NOT do this to ourselves.

Of course we did. 95% of all transactions are local-to-local. – Garth

———

There are no Canadian money launderers? Canadians are so virtuous? Please.

Rabbit tracks. – Garth

#157 Ed on 02.03.23 at 1:24 pm

#139 Sail Away on 02.03.23 at 10:00 am

Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

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

That thing looks like one of those cheap bbq’s Costco flogs every Spring.

#158 Shawn on 02.03.23 at 1:47 pm

Costco flogs stuff? Not Really

#158 Ed on 02.03.23 at 1:24 pm
#139 Sail Away on 02.03.23 at 10:00 am

Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

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

That thing looks like one of those cheap bbq’s Costco flogs every Spring.

*********************************
I key in your point that Costco “flogs” bbqs.

Costco puts stuff in their stores and does zero advertising. Not exactly flogging. More like people flock to buy their stuff due to their lower prices. What a powerful business!

#159 Sail Away on 02.03.23 at 1:49 pm

#158 Ed on 02.03.23 at 1:24 pm
#139 Sail Away on 02.03.23 at 10:00 am

Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

—————

That thing looks like one of those cheap bbq’s Costco flogs every Spring.

—————

Lol. I’m due for a new Tesla, but probably not this one. My 2015 gets updated to new again every few weeks, so there’s no real urgency.

#160 BigAl (Original) on 02.03.23 at 1:50 pm

Question for All:
For a new mortgage right now is it best to go with fixed or variable?
Have rates topped out?

I’m in the process of getting another mortgage. If I go with a fixed and rates rise, then I’m good. But if rates fall then the IRD penalty will cost me a lot to switch. If I go with variable and rates rise – not good. If rates fall then I’m good.

So what’s the opinions on where rates are going in the 1 to 5 year time frame?

#161 Tony on 02.03.23 at 1:53 pm

Re: #150 Victor V on 02.03.23 at 11:47 am

They don’t tell you the value of her house has increased by about half a million dollars since she bought it 7 years ago.

#162 Alois on 02.03.23 at 1:53 pm

#158 Ed on 02.03.23 at 1:24 pm
#139 Sail Away on 02.03.23 at 10:00 am

Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

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

That thing looks like one of those cheap bbq’s Costco flogs every Spring.
\
===========================

News had a person being rescued from smouldering car after accident.

Pulled him out just in time as fierce fire commenced from underneath almost immediately after the rescue.

EV ????
…. fits the pattern

#163 PBrasseur on 02.03.23 at 2:10 pm

A recurring theme these days, in the RE industry, the medias and even from Bank analyst such a Benny Tal, is that the very high level of immigration in Canada will help sustain demand for housing.

I beg to differ.

First most don’t appear to understand the difference between need and demand, that is the difference between desire and the actual economic capacity to acquire something. If those two were the same you’d have huge RE boom in many places in Africa…

Second the type of immigration coming to Canada is changing rapidly and about to change more. That is more family reunification, more refugees, more low skill workers while highly skilled workers and professionals become more scarce because needed everywhere in the world, including in place with more affordable housing, less taxes and actually available health care for example.

Per capita economic growth is already non-existent or declining in this country, and about to get worse. So the conditions to support more demand are not likely to be met.

What this means is that the demand for housing at current prices in this country will remain unsustainable economically and can only be stretched by higher debt levels.

So with or without immigration the only way to return to an economically sustainable RE market is for prices to drop substantially, all the way down to historic price to income ratio. The alternative is continued poor economic performance with all the problems, chaos and social problems that it entails.

#164 the Jaguar on 02.03.23 at 2:15 pm

RE: #155 Shawn on 02.03.23 at 12:43 pm…..”I showed you the math at 83.”+++
Why would you presume I read your post? Your presumption, so confidently stated shows arrogance. I don’t read all the posts here, only the ones from interesting people who aren’t house pumpers.

#165 AnonyMusk on 02.03.23 at 2:17 pm

#152 Faron on 02.03.23 at 12:02 pm
#139 Sail Away on 02.03.23 at 10:00 am
Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

————————————————-
Breaks at least two laws in the clip.

“Design”. LOL.

————————————-

Tying your mental health status to the hope that the greatest entrepreneur the world has yet seen will fail miserably is a pointlessly and hopelessly bad idea.

Carry on.

#166 TheDood on 02.03.23 at 2:22 pm

#159 TheDood on 02.03.23 at 2:15 pm
#154 PBrasseur on 02.03.23 at 12:20 pm
Over 3,000 people sold their properties in Toronto last month. Three thousand people bought. – Garth

Why does that matters?

It matters in the context it was written (which you ignored, typically). The poster said it was almost impossible to sell a home. Obviously, it’s not. – Garth
__________________________________

Disagree. It’s not a structural problem. It’s an education problem. Too many dummies dropping out of high school math class. Too many dummies coming up through the arts and humanities and not enough science/math/engineers. These dummies actually believe what they’re told by realtors and what they see and hear on global news. (Re-Max is one of Global News biggest sponsors by the way)

Basically, it’s a lack of financial acumen by buyers
_____________________________

” it means long term economic prospects for this country are in fact lousy (as says the OEDC…). It mean investing much in “maple” (banks for example) in likely not a good idea in the long run”

I would also add (in relation to the above statement), Canada’s long term prospects are lousy because no potential investors want to come and do business in Canada because our decision makers (elected officials) think it best for everyone to impose a massive, red-tape, soul sucking bureaucracy on all investors who want to stick a shovel in the ground inside our borders.

#167 PBrasseur on 02.03.23 at 3:08 pm

#167 TheDood

RE helps creates a fake economy featuring piles of money coming from nowhere. While it lasts not so much need for great companies or difficult studies like math and science. ;)

People do it because they can in a environment that allows it!

Call it structural or not, it is what is is!

#168 Linda on 02.03.23 at 3:09 pm

#167 ‘TheDood’ – in response to your last paragraph I’d point out that elected officials tend to make decisions based on what their electorate indicates they want to happen. Yes, that means business interests lobbying for relaxed rules & regs, not just Joe & Jane citizen. The ‘massive, red-tape, soul sucking bureaucracy’ exists to implement those checks & balances the voters indicated they wanted. NIMBY (Not In My Back Yard) has been around ever since folks banded together to build. Unregulated development leads to headaches for those who have to live with what gets put in place. Even with all those regulations lots of issues occur.

#169 Tony on 02.03.23 at 3:37 pm

Re: #146 Linda on 02.03.23 at 10:42 am

If my math is correct it will be slightly higher in America and a lot higher in Canada.

#170 Faron on 02.03.23 at 3:40 pm

#163 Alois on 02.03.23 at 1:53 pm
#158 Ed on 02.03.23 at 1:24 pm
#139 Sail Away on 02.03.23 at 10:00 am

Tesla Cybertrucks are being spotted. Check out the newer rearview mirror design. It’s coming!

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

That thing looks like one of those cheap bbq’s Costco flogs every Spring.
\
===========================

News had a person being rescued from smouldering car after accident.

Pulled him out just in time as fierce fire commenced from underneath almost immediately after the rescue.

EV ????
…. fits the pattern

—

Tesla fires have killed about 60 people. The Ford Pinto, an ICE fuelled with gasoline that was notorious for fires occurring in accidents, killed fewer with same number of vehicles on the road.

Something about being trapped in a burning car without easily accessed mechanical door latches seems a bit sketch. NTM the garbage quality of cars the manu cranks out in order to pump the stock. Yeah, I’m out.

#171 Tony on 02.03.23 at 4:10 pm

Re: #161 BigAl (Original) on 02.03.23 at 1:50 pm

Variable, rates should bottom about two and a half years from now. Mortgages should drop to 3 percent by then.

The correction

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