Buyers have been prowling the city streets for the last two months. Realtors in Halifax say valuations have erupted. The average sale price in Toronto jumped 4% in April alone and has been swelling again for the last three weeks. Calgary hit an all-time high last month.
And in Vancouver it’s a “surprising comeback”, says the local real estate board, leading to price escalation. And we all know why…
“What we’re seeing unfold so far this year is consistent with our prediction that near record-low inventory levels would create competitive conditions where almost any resurgence in demand would translate to price escalation, despite the elevated borrowing cost environment. At the crux of it, the issue remains a matter of far too little resale supply available relative to the pool of active buyers in our market.”
It’s the same story everywhere as it is in YVR. More demand than supply. Not because there aren’t enough houses in existence, but because people won’t list, sell, trade up, downsize, move or relinquish them. What we are witnessing is historic – helping wipe away the price-depressing impact of eight interest rates increases.
In Vancouver new listings in April (4,307) represented a 30% plunge from the same month a year earlier, and was 22% lower than the 10-yer average. Total listings (8,790) were down almost as much compared to the long-term trend. So when the spring market hit and a year’s worth of pent-up buyer demand was unleased, prices popped. The detached Frankenumber is now just eighty grand less than $2 million.
Ditto in T.O.
Here’s a chart from data freak Scott Ingram showing active freehold listings. Incredibly, there were fewer last month than during the worst of Covid. And in the midst of the spring market 20 years ago there were three times the number of homes available to buyers.
Source: Scott Ingram. Click to enlarge.
As addicted readers will know, this blog has long talked about the inverse relationship between rates and prices. When the cost of money rises, the sale price of houses plonks. When mortgages are 2%, real estate goes nuts. Now that the Bank of Canada jacked its benchmark rate from one quarter of a point to almost 5%, shouldn’t property prices be on the ropes?
Nope. Now it’s all about supply. There are fewer buyers who can qualify with mortgages at 5%, true, but they’re chasing far fewer listings. As a result, the correction is over, according to RBC. January was the trough for prices. Now we’re on the way to surpassing the February ’22 Peak House mark.
What happened?
There are two reasons listings are scant. One is psychological. One financial. Lots of people are afraid to sell and contemplate moving in a world which seems volatile and precarious. Recession talk. Ukraine war. Sketchy financial markets. Debt ceiling crisis. The cost of food and gas. There’s a cocooning mentality. Besides, as people understand the value of real estate is going up, many think by hanging on they’ll make more tax-free money. Besides, where are ya gonna move to? A drought of listings hits move-up buyers as it does the newbies. There’s no point selling your place and make bank if you have to shell out more for the next one.
But chief among the disincentives to list? Taxes and real estate commissions.
In Toronto, for example, there is double land transfer tax – provincial and municipal. On the average $1.8 million detached home that means piddling away $64,950. For nothing. It’s a serious amount of cash. In Nova Scotia out-of-province buyers face a daunting 5% transfer tax that adds $55,000 to the price of a $1.1 million place in Halifax. In Vancouver there’s a $37,000 bill for buying the typical detached house. If you’re subject to the non-resident levy, the hit swells to $427,000.
But the main grab for most is realtor commission. Generally across Canada it’s 5%. That level was difficult to stomach when the average property was changing hands for $500,000. Now when people are selling for double, triple or quadruple that amount, it’s staggering. Worse, the commission itself is taxable, subject to HST. So to bail out of a $1.7 million home in the GTA, the seller needs to give up $96,050. (And then pay another $65,000 in transfer tax to buy…)
The transactional costs of residential real estate are massive, punitive, market-distorting and predatory. Governments have turned our house lust into a massive income stream while realtors stoke property inflation by clinging to an outmoded and unjustifiable payment structure. After all, most agents don’t actually ‘show’ their listings to prospective buyers, but merely throw a lock box on the front door. They don’t ‘present’ offers anymore, but simply email them to the listing agent. Few ever negotiate on behalf of a buyer or seller, letting MLS do all the marketing then throwing any potential deal in their clients’ laps.
So add it up. Real estate fetish + needy governments + voracious realtors + a paucity of listings = your kid will never afford a house.
Why do we put up with it?
About the picture: “Huge fan of your blog,” writes Trevor. “I think I discovered it over 10 years ago now. It’s been part of my daily routine for a very long time. It should be converted to a textbook and used as teaching material for a high school personal finances course. This is Marty, aka Willy Dangler. He likes watching the world go by in our front bay window. He’s mostly a grump and doesn’t like other dogs, but he brings us smiles. He would be pleased to grace your blog.”
To be in touch or submit a picture of your beast – [email protected].
130 comments ↓
… regarding RE.
But few understand what that means.
So wait, after claiming we don’t have a supply issue for years, as recently as a few months ago, now supply is the main driver of RE prices, not rates?
My call, this is a dead cat, when mortgages renew people will quickly find out they aren’t as rich as they think, even with extended amorts. And more tightening to come.
FWIW this is happening in rec property and toys, which are always the first to go. Boats, RV’s, rec lots all stagnant.
IEP -8.5% today. Suckers indeed.
Also, no one with a brain pays 5% on total amount of a RE sale. Net on a 1mm home is closer to 3.5%. 5% is for the first few hundred grand.
Still too much to open a door 10 times and take a few photos.
Hi Garth, I think you left out a big factor. The huge amount of extended amortizations. Peoplebarely hanging on coupled with a ( probable) recession, just might open the floodgates for listings soon
Why Sell ?
I’ve said this to many others…
…..make sure you make the right decision and that you are not moving from the frying pan into the fire.
Strip away the value of their RE, and then what is the average CDN Schmoe worth?
Negative balance because of the SUV & four door truck?
“More demand than supply. Not because there aren’t enough houses in existence, but because people won’t list…”
Nets to the same which means there aren’t enough houses in existence. Housing should be more abundant so it’s easier to acquire and we can avoid the housing stupidity that’s been plaguing this country for over a decade.
If the government wants to bring prices down, forget FHSA and all the rest of it. Incentivize building through an abundance of sensible, easily implemented options available to all levels of government and housing issues will moderate, the affordability crisis will abate and houses will become homes again. Sufficient supply in excess of market sentiment will create a buyers market, which housing should always be.
Canadian real estate is simply cost prohibitive for Canadian families now. And politicians that can’t see the next election cycle couldn’t care less about what his means for the future of the country (hint: it’s really, really bad).
I’d make a joke about a van down by the river looking pretty right about now, but even those are going for six figures these days (and that’s if the land is free).
Nothing that a couple million more newcomers won’t solve, though. Higher demand always lower prices. Oh wait…
@76 Theory of Everything
“… for EVs we know are not the solution to our problems.”
Thank you for helping those “who get it” spread the word.
Asphalt needs renewing every 15 years or so – maybe less as road damage is proportional to axle weight to the 4th power. And we know that EVs are heavier vehicles. And we know that no government has the money currently to maintain, and will not have in the future, money to rebuild roads for heavier vehicles, especially as road taxes are not collected on EVs.
It will take a couple of decades before streets are rebuilt for the people – probably the world will have 2x the population it does now… best time to start was 10 years ago, second best time to start is today.
Not sure how current suburbs will fare; but cities will flourish. Buy real estate accordingly.
Asphalt road link: https://www.engineering.com/Ask/tabid/3449/qactid/1/qaqid/4074/Default.aspx
Oh, and I do love driving my car, living in my SFH on a nice street. Sigh.
Hahaha, beautiful isn’t it? Homeowners are now like market investors opting not to ‘lock in’ a loss.
I’d like to sell but I can’t afford my own house due to all the reasons listed above. No worries, I sleep like a baby in this paid off shack. Thanks eh.
#77 TurnerNation on 05.21.23 at 11:04 pm
Hectares burned in AB wildfires by year? A Chart.
https://twitter.com/ddawgmvp/status/1660414317618171904
https://www.dailyheraldtribune.com/news/grande-prairie-rcmp-arrest-one-and-ask-public-for-assistance-in-identifying-other
Grande Prairie RCMP arson investigation: One suspect arrested, police ask for public assistance identifying others
///////////////
Very few fires in 2020. Is there nothing that Corvid can’t do.
Theoretically speaking – even with historically low inventory prices went up only 4% ( i know only in a month but i dont expect it to keep rising by that mich all year),which tells me that market is not hot as Realtor industry is painting it to be. If really the market was very tight even 5% drop in inventory would result in much higher price increases. Its like a centrifugal pump stalling due to operating much right of its curve because at that moment there will be heavy fluctuations in liquid flow , but operators and engineers know its not for real, its going to trip pretty soon.
So I suspect this bump in price is temporary and not sustainable.However if GoC decides to maintain market strength, however false it may be, anything is possible.
Anyways I dont care about Toronto real estate market as I live in Central Alberta. Currently dealing with some smokey air. Fully sympathy to folks in northern Alberta dealing with wild fires currently hopefully we get some rain which will help control these fires. Also thanks to all fire fighters Military etc helping us out.
I inherited my family home.
I haven’t listed it yet as the market seems to be increasing faster than the costs I am having to put into i monthly.
Consideration of just keeping it….and let the balls fall where they may.
“There’s a cocooning mentality.” … “…during the worst of Covid.”
—————————-
Not just scarce listings. Acquaintances stated that many organizations are having a difficult time gaining new volunteers following long-time volunteers bailing. Whether it’s a local Food Bank or Elks Lodge, new volunteers are difficult to find.
Signs of a general malaise?
Or disgust at learning that a local Chief Administrator’s annual salary is $255,000?
$21,000 a month?
When “regular” folks are asked to donate their time for the good of the community?
Is this an as yet undiagnosed Long-Covid effect?
Or simply anger that volunteers aren’t getting a piece of the pie.
Where do you come up with this mythical 5% realtor fee ? Not ever in the last 20 years myself or anyone I know here in BC has paid 5% of total sale price. It is 3-5% on the first 100K and then 1-3% on the balance. Still a lot but realistically more like 2.5 to 3.5% . A quick mls search should provide all of the evidence needed.
Last house we sold (last summer) we payed 5% on first 100k then 2.5% on the balance.And we negotiated a rebate on our realtor’s part of the comission ,so even less.
The other issue here in BC is the “Colling off period” which introduces a significant amount of risk ; we have always put an offer for the next house as soon as the current one sold ,now with the cooling off period there is an obvious problem as you don’t know if a sale is really a sale. Good intentions from the NDP that everyone could predict would go wrong ,and they are.
B.C. developer asks court to shut down Yaletown supervised injection site
Wall Financial said Vancouver erred in approving the overdose prevention site because its own bylaws didn’t permit it
https://vancouversun.com/news/local-news/wall-financial-owner-asks-bc-court-to-shut-down-yaletown-supervised-injection-site
============================
COMMENT:
Not really “news” in the global picture…
Major cities are experiencing “controlled demolition” via deliberately seeding crime zones via lax laws re: drug use and crimes.
So the combination of realtor fees and land transfer taxes has only pushed up the property values since no one wants to waste that kind of cash.
The result ….. no sellers, no supply, buyers in abundance so price go up!!
Solution: Realtors need to lower fees, governement needs to do away with the tax.
But that would require common sense to understand that logic.
One day real estate agents will be replaced by an App that will facilitate real estate deals. they will fight tooth and nail against it, just like the taxi drivers fighting uber, Maybe there will be real estate agent protests blocking streets downtown just like the taxis did. But one day it will happen. Paying $100,000+ to a real estate agent to do maybe a few hours work is ridiculous. ANyone can take a few photos and post listing online, a well designed app would help the layperson though all the necessary steps.
I’m just waiting for the Real Estate Cartel to be eradicated and then I will add my supply to the market
Read this on twitter today from a real estate guy:
This is the text of the tweet: “Homebuyer’s Shocking Revelation”
Realtor’s deceptive tactics lead to massive overpayment, uncovers hidden truth in real estate industry.
Read the full tweet here: https://twitter.com/ShaziGoalie/status/1660630642269323265
Soooo…supply issues. As this blog’s section of dogs has regularly said all along.
Time to throw realtors under the Chat GPT bus. Go back to selling used cars, vacuums and such.
Supply seems clear enough from the data.
Everyone talks about Demand.
Well how many are there?
Once someone provides that number then we will know if the price increases will be sustained or not.
All this talk about Demand, is just that, talk. Conjecture.
When the majority of people are making money, they don’t question it. Sub-conscious greed.
#10 Another Deckchair on 05.22.23 at 1:40 pm
@76 Theory of Everything
“… for EVs we know are not the solution to our problems.”
Thank you for helping those “who get it” spread the word.
Asphalt needs renewing every 15 years or so – maybe less as road damage is proportional to axle weight to the 4th power. And we know that EVs are heavier vehicles. And we know that no government has the money currently to maintain, and will not have in the future, money to rebuild roads for heavier vehicles, especially as road taxes are not collected on EVs.
===============================
COMMENT:
Excellent points…
Anecdote:
Was at our Nissan dealer a while back…a gal next to me had come in to get her Tesla tire fixed. We chatted…then the service guy comes in to tell her the new tire would cost over $400.
I thought ..WTF?
….I was hearing things??
Later ..
…..came across a YouTube video where a gal was saying that Tesla…via the huge added weight EV batteries have(ie over 1/2 ton)…do require special tires to carry the weight that also require special sealant …..and she also submitted the cost of over $400/tire
Over to you Tesla fans…
Wait? What? Now you’re turning on our beloved profession, suggesting we’re charging too much, Turner!?
I’ve put the word out. You won’t be able to sell your shack in Lunenburg or buy a place in the 416 for less than 25% commission – enjoy that!
Imagine the multiple meetings that must be taking place among the heads of the Five Families these days…. As Vito Corleone once said, ” How did things ever get so far? I don’t know. It was so unfortunate, so unnecessary..”.
Oh! I was referring to the other five families, you know Penguin, Red, Blue, Blue Light, and Green.
They must be going through a lot of Tums after the BOC Financial Review came out last week. Here it is for those whose religious beliefs circumvent the use of other sleeping aids:
https://www.bankofcanada.ca/2023/05/financial-system-review-2023/
A sampling:
Canadian banks maintain a high share of uninsured mortgages on their balance sheet.* While most households are proving resilient to increases in debt-servicing costs, early signs of financial stress are emerging. High debt-servicing costs and low homeowner equity make households more vulnerable to default if they experience a drop in income. Indicators of financial stress among households remain low but are rising. The share of indebted households that are behind on payments for at least 60 days in any credit category is below its pre-pandemic average but has been increasing since the middle of 2022.’
Jeepers. Of course one supposes the Five Families have their own internal data. Probably gobs of it. Maybe they’ve even secretly installed webcam’s throughout the nation’s households. Full dossiers on the heavily indebted and who orders in Skip the Dishes too often. Mercy.
Is it just me that thinks house price recovery whether ‘here today or gone tomorrow’ isn’t really the elephant in the room? Remember when Clinton said “It’s the economy, stupid’? In Canadaland it’s the DEBT.
* That bit included for the blog dogs who always blame CMHC for everything…..
A guide to Alberta land transfer tax
Jamie David
Jamie David, Sr. Director of Marketing and Mortgages
Land title transfer fees Alberta (updated in 2022)
Alberta does not have a large land transfer tax like most provinces in Canada. Instead, it has a much smaller land title transfer fee. There are two major parts to the fee: one on your home’s value and the other on your mortgage amount. The rates for the two parts are as follows:
Land title transfer fee First-time home buyer rebate
On the property value $50 base + $2 for every $5,000 or portion thereof of the property value. There is no land transfer tax rebate in Alberta.
On the mortgage $50 base +$1.50 for every $5000 or part thereof of the mortgage amount. There is no land transfer tax rebate in Alberta.
Example land title transfer fee calculation – Alberta
Let’s assume you are purchasing a house worth $300,000 with a 20% down payment resulting in a $240,000 mortgage.
1. Land title transfer fee on the property value:
$300,000 property value
÷ $,5000 tax portion size
= 60 portions of value up to $5,000 (rounded up)
$50 base value
+ ( $2 tax per $5,000 portion × 60 portions of value up to $5,000 )
= $170 land title transfer fee on property value
2. Land title transfer fee on the mortgage amount
$240,000 mortgage amount
÷ $5,000 tax portion size
= 48 portions of value up to $5,000 (rounded up)
$50 base value
+ ( $2 tax per $5,000 portion × 48 portions of value up to $5,000 )
= $120 land title transfer fee on property value
3. Total land transfer fee
$170 fee on property
+ $120 fee on mortgage
= $290 total land transfer tax
The Alberta land title transfer fees can be paid to the Alberta Land Titles Office when your legal documents are submitted for registration.
Source: Service Alberta, “Land Titles Act – Tarrif of fees regulation”
Steady gradual inflation and erosion of the US dollar will continue. THAT is how they pay down the debt.
So add it up. Real estate fetish + needy governments + voracious realtors + a paucity of listings = your kid will never afford a house.
Why do we put up with it?
——–
“We” have no power to change anything I’m afraid. It is not about putting up with it, as there are no actions that I can do to change any of this. My kid will be fine as he will inherit our house, but the current landscape certainly disadvantanges those without family resources. Two top undergrad engineering kids who I have taught for a few classes over the past 5 years, have just accepted positions in the U.S. (Austin and Seattle). A loss to Canada I think…..higher wages, more opportunity elsewhere…
So true. At one point, after the kids are gone, I had thought I would sell my suburban GTA pile and move to a smaller but more fashionable place midtown or even a penthouse. Then covid came and I have changed my mind. Its just worth it to move. My almost 4000 sq ft mortgage free house costs less to carry than a 1 bedroom rental in midtown Toronto. Why move? when I don’t really need the money.
#19 Victor Llearna on 05.22.23 at 2:38 pm
One day real estate agents will be replaced by an App that will facilitate real estate deals. they will fight tooth and nail against it, just like the taxi drivers fighting uber, Maybe there will be real estate agent protests blocking streets downtown just like the taxis did. But one day it will happen. Paying $100,000+ to a real estate agent to do maybe a few hours work is ridiculous. ANyone can take a few photos and post listing online, a well designed app would help the layperson though all the necessary steps.
——————-
All these “Apps” are already available.
It’s a free country.
You can just hang a “For Sale” sign outside.
And wait until the cows come home.
No big fan of Realtors myself.
But most them just wanna make a living.
Just like everyone else.
Except Plummers, of course.
….then more rate hikes are required
Supply vs Demand. Rent or own doesn’t matter, either way you need a place to live. When both rents and housing is going up it’s really not that tough to see why.
The Long Game is unfolding before our eyes. One small step at a time, far enough apart we will not piece together.
Has anyone asked for this let alone voted for it?
https://www.youtube.com/watch?v=rMPZLtglLgo
Ford says other Ontario mayors are calling for independence
— Gee how swell this took place ahead of time
.Ontario passes law boosting ‘strong mayor’ powers in Toronto, Ottawa. Ontario has passed legislation that allows Toronto and Ottawa to enact certain bylaws even if a minority of councillors are in favour, capping off a whirlwind of widely criticized housing-related moves.Dec 8, 2022 (cbc.ca).
——– — What oh what are our Rulers planning?
Maybe kick people off the land and independence, herded into the crowded and fetid “Smart Cities”?
Defunding rural areas? Mark this post. Something is going down. Density is a magic potion. Flavellas and barios incoming.
WW3…since 03/2020 and wars are fought over LAND.
“So add it up. Real estate fetish + needy governments + voracious realtors + a paucity of listings = your kid will never afford a house.
Why do we put up with it?”
Too many have an interest in getting rich on real estate, there is no escape for the homeless and government won’t do anything but clip toenails and fiddle tax rates.
The solution is price and market regulation in the interest of the nation and the species and to drive the investor wannabees into the stock and bond markets where they belong and do the least harm to society.
Every real estate listing in the country has a price on it that says nonmillionaires or better are not welcome in Canada. Too many Canadians have tossed their moral compass and it seems they tossed their sense of shame also in favor of a fat juicy profit.
Headed to Montreal yesterday to visit family and couldn’t believe the number of big “Nous embauchons” – “We’re hiring” signs along highway 40 on the West Island. This just might be anecdote, but thought worth sharing. Have never seen that many signs on road trips there and back.
It’s because we don’t have enough land to build on…oh wait…
Trudeau has screwed the mills/gen Zs (even though a lot of them voted him in) – but they are beginning to wise up and will toss him out next election.
But has the damage already been done???
APATHY- Canucks are suckers !!!
Here’s the crux of the problem.
Urbanization of the world.
Roughly 4 out of 5 North Americans live in an urban setting.
Rural services are getting slashed, building and infrastructure in urban settings is lagging population growth.
Statista has it recently pegged at 81.65%, Stats Can had a different number because they’re special.
By 2050 in the States the number is expected to be 90% living in urban settings.
Hopefully I’ll be a campground host by then…
M48BC
//////////////////////////////
“Urbanization in Canada 2021
The statistic shows the degree of urbanization in Canada from 2011 to 2021 and details the percentage of the entire population, living in urban areas. In 2021, 81.65 percent of the total population in Canada lived in cities
——————————————————
Canada’s large urban centres continue to grow and spread
In 2021, nearly three in four Canadians (73.7%) lived in one of Canada’s large urban centres, up from 73.2% five years earlier.
These large urban centres with a population of 100,000 or more people, referred to as census metropolitan areas (CMAs), accounted for most of Canada’s population growth (+5.2%) from 2016 to 2021.
Canada continues to urbanize as large urban centres benefit most from new arrivals to the country. From 2016 to 2019, Canada welcomed a record high number of immigrants and more than 9 in 10 settled in CMAs.
There were six more CMAs in 2021 compared with five years earlier, another sign of the increasing urbanization of the country.
Rapid population growth in cities is increasing the need for infrastructure, transportation and services of all kinds—including front-line emergency services. Further urban spread also raises environmental concerns such as car-dependent cultures and encroachment on farmlands, wetlands and wildlife
Using new 2021 Census data, today we look at how Canada’s 41 large urban centres have evolved since 2016 and since the onset of the pandemic. For the first time, we focus on population changes within different areas located inside Canada’s CMAs and see that population growth within our cities has not been uniform across their territory.
Most CMAs across Canada, big and small, are generally structured the same way. There is a downtown, usually characterized by a high concentration of apartments, condos, offices, shops, restaurants, theatres and bars.
There is also an urban fringe, which often includes neighbourhoods of single family or town homes with a yard, low rise condos and apartments, occasionally interspersed by commercial or industrial zones. Various types of suburbs surround the downtown core and urban fringe, and depending on the size of the city, can stretch out anywhere from a ten minute drive to a thirty or more minute journey to the downtown.
https://www150.statcan.gc.ca/n1/daily-quotidien/220209/dq220209b-eng.htm
***********************************************
“The Social Fabric of the U.S. is Urban.
At its founding and like many other countries at the time, the U.S. was largely a rural country. In 1790, only 5.1% of U.S. residents lived in urban settings.
Rising industrialization and immigration after the U.S. Civil War and Reconstruction (1861-1877) helped drive the growth of cities. As more and more people made their homes in cities, the U.S. became more urban than rural, some time in the late 1910s.
But it wasn’t only immigrants that drove this rapid growth—rural migration also played a part. Between 1880 and 1890, almost 40% of U.S. townships experienced a population decrease, according to the Library of Congress.
Fast forward to 2023, and 83.3% of people in the U.S. now live in an urban setting. Here are the state-by-state numbers from the 2020 U.S. Census. “
California (94.2%), Nevada (94.1%), and New Jersey (93.8%) were the top three most urban states in 2020, according to the U.S. decennial census. This excludes Washington, D.C., which is considered to be 100% urban.
Not surprisingly, the three most populous states also had the largest urban populations: California (37.3 million), Texas (24.4 million), and Florida (19.7 million).
On the opposite end of the spectrum, four states had rural majorities: Mississippi (46.3%), West Virginia (44.6%), Maine (38.6%), and Vermont (35.1%). Last place Vermont also had the smallest urban population at 225,850 in absolute terms.
The Rising Cost of Urbanization.
With nearly 90% of U.S. residents projected to live in cities by 2050, finding a decent place to live is becoming harder and more expensive.
Median house prices in the U.S. hit an all-time high of $479,500 in the fourth quarter of 2022, before easing off slightly to $436,800 in the new year.
https://www.visualcapitalist.com/sp/mapping-us-urbanization-by-state/
“Not because there aren’t enough houses in existence, but because people won’t list, sell, trade up, downsize, move or relinquish them.”
Which means add more supply.
Show me some charts on house stock versus actual demand. This defines how much output is needed to balance demand (ragardless of where the demand is coming from).
But spoiler alert. Nobody truly wants to balance demand with supply. That isn’t good for business.
Population growth is a massive factor and correlates/counter balances with the other variables mentioned here.
#24 Rainman on 05.22.23 at 3:19 pm
When the majority of people are making money, they don’t question it. Sub-conscious greed.
********
Is it greed or wise and prudent to pursue financial security for you and your family?
If that’s the case could you say the opposite of greed is financially illiterate or lazy?
Any thoughts?
“It’s because we don’t have enough land to build on…oh wait…”
That is not the case. If the whole world can be housed in the state of Texas I think every Canadian that needs a home can be housed on an acre lot in a decent home for within 3 years pay based on non union wage rates for one person. https://www.youtube.com/watch?v=_lIboR9Wtg8&list=PLtAkvJkQxoy1OI4-6znpLRtwkk-8lpedz&index=3&pp=iAQB
This is the second biggest nation in the world. Our people should be housed with in range of a job without being financially buggered, enslaved and holocausted by a real estate market. No problem!
Here is the play list:
https://www.youtube.com/playlist?list=PLtAkvJkQxoy1OI4-6znpLRtwkk-8lpedz
@#32 Ponzie’s Plummer Passion
“No big fan of Realtors myself.
But most them just wanna make a living.
Just like everyone else.
Except Plummers, of course.”
+++
Ponzie,
As the wise, rich old plummers saying goes
“When you’re up to your eyeballs in sh!te…
Don’t open your mouth.”
Why do we put up with it?
’cause we have been duped for so long that any effort that requires the PFC results in the most trodden of pathways to fire while less trodden wither even more?
Quite similar to taming a pet.
But, just a guess…
Og
#28 Popeye the sailor man
Wow.
Ontarians are getting screwed.
Torontonians…royally!
…by comparison.
Honestly, if you’re going to implement a tax avoidance strategy, property related taxes have to be considered.
Who sees themselves moving from a rent control unit? Plenty are going to be stuck in a rut. Owners and renters.
So… should we all buy a house before we get priced out of the market?
I wonder what could be causing record low inventory in housing. Are houses bing scooped up and taken to another country?
It’s a real mystery I tell ya.
#37 Don’t Believe The Hype on 05.22.23 at 4:32 pm
Headed to Montreal yesterday to visit family and couldn’t believe the number of big “Nous embauchons” – “We’re hiring” signs along highway 40 on the West Island. This just might be anecdote, but thought worth sharing. Have never seen that many signs on road trips there and back
—————————————-
Quebec has a very particular type of labour shortage due to lower immigration than other provinces. It’s even worse in the regions (outside the cities), where most restaurants work reduced hours and municipalities can’t find people to hire. Believe it or not, most political parties want to keep immigration low to “preserve the Quebec culture” – but what they really mean is they don’t like people that don’t look and sound like them. The Parti Quebecois is so ethno-nationally obsessed that it wants to drastically reduce immigration from its already very low levels. The result is that the Quebec government needs $13B in equalization from the rest of Canada to survive- and it already levies the highest tax rate of any jurisdiction in North America. Basically – the place is going to hell, and the Rest of Canada is paying for it!
The loan extensions provided by Canadian banks to over leveraged mortgage holders is a big mistake.
Any economist would say that this practice undermines credit discipline, and could present risks to the financial system.
I’m amazed that Canadian bank regulators have been permitting this ever-greening of loans.
Tick tock, tick tock…
Clearly the problem is not enough young people are moving out of Canada yet.
https://www.rfsuny.org/media/rfsuny/procedures/ap_nafta-professional-list_pro.htm
Sold in a European country: 1.6% of selling price only, in total fees, to lawyers and RE agents. I also don’t understand why Canadians don’t chase the realtors off what is, in fact, the owner’s own property. Realtors are simply a cartel controlling their services, their market and their financial take. Too much of that in Canada: communications companies; dairy industry; dentists, etc. Don’t get why you’re out in the streets about so many things, but not this. Can anyone explain?
Exactly same thing happening in Australia.
“FOMO intensifies as Hunger Games hits home buyers”
https://www.macrobusiness.com.au/2023/05/fomo-intensifies-as-hunger-games-hits-home-buyers/
Was at a get together with some old friends in Steveston, Richmond.
A couple mentioned that they are looking to sell and move to my area in South Surrey.
Morgan Creek is a nice area, they said.
Can’t disagree.
“Besides, where are ya gonna move to?”
With that $2 million from your Vancouver special, how about the south of France?:
https://www.green-acres.fr/en/properties/house/salies-du-salat/A0dk4o8j64fbxfn7.htm
It is beginning to be the same like where I am in Germany.
I once thought the US was acting crazy with their desire for ANY house. Then, Canada (with different banking regulations, to be sure) followed suit and are now the same.
Now it’s the same in some towns in Germany. 100 applications for a rental, many people bidding. The only difference is you cannot sell the property before 10 years. Stops flipping, maybe.
Everybody cries about affordable housing but nobody wants their house to be affordable.
#37 Don’t Believe The Hype on 05.22.23 at 4:32 pm
Headed to Montreal yesterday to visit family and couldn’t believe the number of big “Nous embauchons” – “We’re hiring” signs
________________________________
In 93 most all of the industrial RE had either aloui and or au vendre, or similar spelling. For Sale or Rent!
Weren’t the Libs supposed to ban blind bidding???
WTH ever happened to that?
I am not sure why so many complain about housing prices. Go look at home much prices are in other countries. You will be surprised. Exactly the same. Without any 5% mortgages. But they do have 14% purchase fees and taxes. And their salaries half or even quarter of what it is here.
Do you just expect to buy a 4 bed at 25 yo? Go save from 20 to 35 and then buy. 2 people renting can easily save 1 grand per month each. Thats 24k year – 240 in 10 years. And you are just 30.
Today thats 30% downpayment. But I guess noone taught you that bottle service in clubs or buying a BMW in your 20s just because you can pay for it – doesn’t get you a house, did they?
Well there you have it. Nothing to do with unaffordability. And in any case 2 working people who advanced in their skills and career and now in their late 20s can afford a house, period.
Who and where did the expectation come from to just work in Walmart for 16/hr and live in a house? Rent basement, save up. You get what you work for. To make more money – increase the value you bring to the company.
Construction jobs start at 25-30. Lots of work. But people don’t want to hear that. They want to become famous making TikTok videos. And no problem with that. Tons of people made it. But you want to become TikTok millionaire without shooting a single video.
People want a house without doing anything for it. They expect it as a given. That someone should just hand them the keys and it just for some reason costs 1000/mo to finance.
Why should anyone give you something you didn’t work for? And that is the question with your salary AND real estate.
Go sleep on this.
Rant is over.
Subway is advertising ‘pickleball sub’
Rutabaga?
#51 Steve French on 05.22.23 at 6:04 pm
The loan extensions provided by Canadian banks to over leveraged mortgage holders is a big mistake.
Any economist would say that this practice undermines credit discipline, and could present risks to the financial system.
I’m amazed that Canadian bank regulators have been permitting this ever-greening of loans.
Tick tock, tick tock…
——————
Also makes me wonder if Canada’s perpetually profitable banks have not become less than ideal investments. Sure, they can squeeze more interest income out of mortgage holders but at what long term cost? Where will loan growth come from if consumers are maxed out, construction industry is in recession, and politicians inevitably turn against more immigration?
San Francisco’s Doom Loop: The High Cost of Cheap Living
https://www.youtube.com/watch?v=ExCGSdysaT0
================================
COMMENT:
Cities are becoming war zones….many anticipate lower rents but don’t realize WHY they may drop. (Think of Detroit)
There is often a subtle equilibrium between the two factors of livability VERSUS affordability.
@ #43 Steve Rowlandson…
“It’s because we don’t have enough land to build on…oh wait…”
That is not the case. If the whole world can be housed in the state of Texas I think every Canadian that needs a home can be housed on an acre lot…”
________________________________________
We agree – I was being sarcastic, but perhaps with text it was not clear – sorry.
look at all the tents where the homeless are called campers.
There’s No Such Thing as Affordable Housing
…”Housing economists call this “filtering”: the process by which a housing unit moves into a different price tier and houses a different type of resident. Homes can filter up, or they can filter down. Historically, down was the predominant direction—homes and often whole neighborhoods, as they aged, tended to become cheaper (in relative, often not absolute terms) and to be occupied by residents of a lower socioeconomic strata. Research by Freddie Mac has found that in the 2010s, in high-cost cities like Los Angeles, the overall direction of filtering switched from down to up. That’s the story LAist is observing in a nutshell.”
…”These shifts in price without any physical change to the housing stock ….They dwarf the impact of actual new construction. Affordability for the masses will live or die not by what we build this year or next, but by what happens to the price of homes that already exist, in which the vast majority of people live.
in other words the deck chairs are under water…lol
https://www.strongtowns.org/journal/2023/1/3/theres-no-such-thing-as-affordable-housing
Lots of issues around selling especially if you want to downsize. First as mentioned in today’s blog you end up handing over a considerable chunk of change in agent fees, possibly land transfer taxes depending on where you live & now the ‘foreigners’ tax, which can apply even to fellow Canadians. Also part of the idea of downsizing is to have $ left over from the sale of the larger abode – except these days, the price of the smaller space may equal what one received (post agent, tax & other fees) from the sale of the larger property. So a real lack of incentive there. The airy advice of ‘just rent’ is all very well, but surprise! There is competition & limited availability when it comes to rentals these days as well. I’d imagine paying $3K+ for a place per month would be a bit of a hard sell to anyone who currently owns a place free & clear.
27 Jag – thank you for the link
What I am wondering, would it not be better to have a
low number of insured mortgages?
Mortgage insurance is normally used on high ratio mortgages, typically to first time buyers who have not amassed a significant down payment. As such, it’s reasonable to conclude in general that these buyers would not have overly high incomes, nor have significant
other financial resources or wealth.
While uninsured mortgages can have a larger value, they are secured with higher equity, and owners may have higher incomes and other resources to draw from.
Some more info (2 years old already) here
https://www.cmhc-schl.gc.ca/en/blog/2021/insured-uninsured-residential-mortgage-data#:~:text=As%20of%20the%20first%20quarter,the%20same%20period%20of%202021.
I’m surprise that the title “British Columbia” hasn’t been protested against and changed.
Just change it to Bring Cash?
I have a small plot rural towns sask we purchased a decade ago with plans to live there. Well plans have changed and it is up for sale on Kijiji. I get emails every few weeks from realtors asking to sell it. All they do is list it on MLS, no lawyers fees or even showing it to people. Fee is 6k. The property is worth about 15k.
#23 Dolce Vita on 05.22.23 at 3:12 pm
Supply seems clear enough from the data.
Everyone talks about Demand.
Well how many are there?
Once someone provides that number then we will know if the price increases will be sustained or not.
All this talk about Demand, is just that, talk. Conjectur
__________
Canada has the lowest number of housing units per 1,000 residents of any G7 country. The number of housing units per 1,000 Canadians has been falling since 2016 owing to the sharp rise in population growth. An extra 100 thousand dwellings would have been required to keep the ratio of housing units to population stable since 2016—leaving us still well below the G7 average.
https://www.scotiabank.com/ca/en/about/economics/economics-publications/post.other-publications.housing.housing-note.housing-note–may-12-2021-.html
__________
On a seperate note the fact that people aren’t moving is the dumbest point I’ve heard here. If you move you’re just shuffling the deck chairs. It doesn’t create more housing. Same thing if you rent your house or own. No difference. The shortage of housing remains exactly the same.
Not too sure why a person needs to spout off statistic’s about big city living like previous poster’s here? Smells of desperation. You can choose to live wherever you like. Many people have stated the benefits of not living in a megalopolis. If you want to join the lemmings off the cliff with overvalued and overpriced big city real estate , go for it. Don’t try to convince others to follow you. It is all about lifestyle, peace, security, happiness, friendly helpful neighbor’s and community. My spouse /I and our next generation are very thankful indeed to live away from all that nonsense. Sometimes hidden treasures are best left hidden so I will not say where we live. People are happy here. You have free will. Choose wisely( or not).
#67 Linda on 05.22.23 at 8:04 pm
I’d imagine paying $3K+ for a place per month would be a bit of a hard sell to anyone who currently owns a place free & clear.
____________________________________
I wouldn’t participate for a third of that!
The total invested is safe being home.
But that’s my Bunny Patch price bias.
#25 Alois on 05.22.23 at 3:24 pm
#10 Another Deckchair on 05.22.23 at 1:40 pm
@76 Theory of Everything
Over to you Tesla fans…
—
Here’s a bunch of reasons to love yer Tesla.
@#55 Ponzie’s potential pals
“Was at a get together with some old friends in Steveston, Richmond.
A couple mentioned that they are looking to sell and move to my area in South Surrey.”
+++
Are they nervous about a potential tsunami?
Spending big bucks in fees and moving expenses to move a few miles east to higher ground….
Morgan Creek? Pfffft.
Tell them North Burnaby is about as high as it gets in the Lower Brainland.
Lots of 40 story condos to get even higher above the 300ft high surf…….
@#56 Leftover
Beautiful spot and impressive mansion.
The south of France seems to have tons of estates like that for 1 million Euros.
I wonder what the rules are for renovation…
Dragging a 200 year old beauty into the 21st century.
The old wallpaper, the asbestos filled plaster, etc.
Disposal of the construction debris…..
Ugh.
I’m sure Canada isn’t the only socialist country with endless bureaucratic red tape when historical buildings are involved.
Double the sales amount to do a proper job.
If I win the lotto I’ll buy it and you can come for a visit after the renos are all done.
:)
I have a second property that I rent out.
I thought about selling, but I keep going back to the thought that my kids will need an affordable place to live and I may have to put them up. Or they stay at home till 35.
This situation with houses is messed up.
Enjoy a beer and have a good night sleep my friends.
So, Garth,
I understand why you deleted my post about Kamala yesterday regarding the misuse of a proper name (I have no issue with that after all; this is your blog). I apologize, and I won’t do that again, probably because you will ban me after what I say here now.
In all the years I have been reading and engaging in your blog, I never did a search on Wikipedia to learn more about you. I’m happy that I did.
I should have done this sooner.
I always thought you were conservative, but according to your Wiki, you aren’t really a conservative, are you? The only conservative ideal you have is around finances: pay what you owe, don’t get into debt, invest wisely in a 60/40 conservative way. The rest of your platform is probably mostly liberal/NDP, with a nod and a wink to Elizabeth May of the Greens.
Now that I know where you position yourself politically, I will go with the flow… I won’t bother you anymore with my theories on leftist idiocy but will continue to be an avid fan of your take on real estate.
So from now on, all you will get from me is that real estate (primarily one’s home) will always increase over time as long as you are in it for the long haul, and that paying off your mortgage as soon as possible is probably the single best thing a person can do to reduce risk. Even you are making the argument to do this in a roundabout way.
Chat soon if you will still have me on this blog, after all, you know what they say of leftists – they are finding it increasingly difficult to tolerate free speech these days.
Young people, please pair up and get into a live-in relationship. Formerly single people sleeping together with a partner will free up a lot of housing units.
Do it for yourself and for the country. No need to thank me for this idea.
@#62 Wrk.dover
“Subway is advertising ‘pickleball sub’
Rutabaga?
+++
The Sauerkraut Sub for Pickleball Ponzie!
Now it’s all about supply.
I wonder how could that be? Is it because we got 1M people coming to Canada in the last year and a half?
Hmmmm…
@#68 Dr. V on 05.22.23 at 8:05 pm —27 Jag – thank you for the link—
What I am wondering, would it not be better to have a low number of insured mortgages? +++
Well…hmm..Insured or uninsured they are all useful money makers for the lender. Where the fork in the road lies is likely in the underwriting standards. In the case of insured mortgages the insurer will hold the underwriter’s feet to the fire on time honoured and proven affordability measures, i.e. GDSR/TDSR as an example. ‘Devil in the details’ kind of stuff…
That information is contained on the insurer’s website.
Any claim made for loss will receive an intense review for adherence to those standards. In the other scenario (with a minimum 20% required down payment), the equity position is more significant at point of purchase, but there is much more flexibility in how underwriting principles are applied. That information likely not published.
But what does a Jaguar know? I am run off my feet as a criminal mastermind intent on worldwide domination. (sigh). Maybe then I too can wander about taking in ‘ the apple and pear trees flowering in the orchard and the giant linden trees bursting with new leaves. ‘….
What the hell are linden trees, anyway?
@#79 Shawn single solution
“Young people, please pair up and get into a live-in relationship. Formerly single people sleeping together with a partner will free up a lot of housing units.”
+++
Pair up?
Thats so Boomer.
Three’s Company!
https://www.youtube.com/watch?v=QFlf5pIgTU0
Unless your PC radar is clanging red alert…..
It’s totally unrelated to this blog but I couldn’t resist. It may help some get over housing angst.
An amazing version of the 1959 classic “Sabor a Mi” performed by Raul Malo and the Mavericks on live their World tour.
The trumpet intro by Julio Diaz is brilliant and beautifully haunting. Enjoy!
https://youtu.be/4UT3MWUVpGY
Hmmm
Is India cracking down on the paper currency again?
https://www.reuters.com/markets/currencies/indian-rupee-poised-weaken-after-central-bank-pulls-2000-rupee-notes-2023-05-22/
2000 Rupee are worth about $32.50 canuck bucks.
Or its an attempt to crack down on tax evaders and drug dealers like they did a few years back with another large denomination bill pulled from the circulated currencies……
A crypto Rupee can’t be far behind.
When I say Life in our crowded, fetid cities…case in point.
A RIOT squad is required to police a family fireworks event. (It devolves into domestic t3rroism each year)
Don’t worry, more Density will aid this.
“”Riot police on standby if Toronto’s Victoria Day weekend celebrations get out of hand: TPS
Police say officers in riot gear are on standby if Victoria Day celebrations in Toronto’s east end descend into ‘mayhem’ like they did last year.
On May 22, 2022, the day before Victoria Day, the scene at Woodbine Beach was anything but celebratory. Two people were shot, two others were robbed at gunpoint, one person was stabbed, groups of people were shooting fireworks at each other and seven officers were injured.
At least 19 charges were laid in connection with the chaotic scene that MacIntyre said was filled with “crime and disorder.”
The next day, a man was seriously injured after he was stabbed in the back during a fight at Ashbridges Bay Park after the Victoria Day fireworks. (cp24.com)
—- —
No fireworks for you Calgary. Your Rulers are punishing you. That freedom was taken away. (Shades of the past years?). All the old culture must go Comrades.
https://calgary.citynews.ca/2023/05/18/calgary-canada-day-no-fireworks/
The City of Calgary is going without fireworks at this year’s Canada Day celebrations.
The city says it recognizes the cultural sensitivities around fireworks displays in relation to Truth and Reconciliation.
Franca Gualtieri, manager of arts and culture at the City of Calgary, says it’s a test to address some of the “cultural, community and environmental impacts previously experienced with traditional Canada Day fireworks.”
One time I did tell the BC government that the property transfer tax was ripping off buyers. It is a ridiculous amount. A lot of good that did. I just got ignored. But the costs don’t end there. You also have legal costs.
#86 TurnerNation on 05.22.23
No fireworks for you Calgary. Your Rulers are punishing you. That freedom was taken away. (Shades of the past years?). All the old culture must go Comrades.
The City of Calgary is going without fireworks at this year’s Canada Day celebrations.
The city says it recognizes the cultural sensitivities around fireworks displays in relation to Truth and Reconciliation.
Franca Gualtieri, manager of arts and culture at the City of Calgary, says it’s a test to address some of the “cultural, community and environmental impacts previously experienced with traditional Canada Day fireworks.”
$$$$___
Here’s Calgary’s mayor Gondek at her finest
https://www.westernstandard.news/news/watch-gondek-walks-away-after-keean-bexte-asks-about-police-funding/article_10d480f2-d330-11ed-8c0a-ef7773bc1715
You can say that we’re entering the twilight zone. The mountain of lies and debt that is the western rules based order is beginning to sway back and forth like a drunken sailor. And the men are donning dresses in hope of getting a seat on one of the lifeboats before the titanic breaks in two and sets sail for Davey Jone’s locker. This fiasco that is built on greed and easy money (real-estate) may be the ultimate bubble to pop, along with the dreams of the delusional masses of the western rump of the world
Maybe this Gondek link will work better.
https://youtu.be/l1_HDEGDDNM
#83 Sail Away on 05.22.23 at 7:34 am
Thanks for the heatwave reminder. I went to look up the heatwave comment and along the way found another deeply underwater TSLA purchase of yours (last week of July) that you, of course, boasted about soon after. Today, down about 27%.
Also, IEP settled down not quite 11%. Not sure, but I think your are now severely underwater on that recent purchase. IEP lovers/bag holders have become a point of mockery among the financial industry experts I read.
Heatwaves? Didn’t word it the best, and admittedly a bit hyperbolic, but it has a very good chance of holding up despite your efforts to misconstrue my words. Changes of a heatwave killing thousands of mammals (likely humans unfortunately) in the next 19.25 years is very high. Not 100%, but high.
Oh, and take responsibility for your posting of your own personal information and that of your *presumed loved ones. I present zero risk of harm to you. Stop defaming me now.
*presumed because I still can’t fathom the idiocy in telling a bunch of internet strangers anything about someone I love without their consent. It’s so fcking stupid and you know it. Yet, there you are blustering around like a child instead of owning your actions.
All the taxes are why the government can’t let housing fail. If it fails so does their budget. Realtors provide no useful service whatsoever. They are just glorified used car dealers and are not needed.
The evidence is overwhelming that inequality erodes democracy.
https://theconversation.com/taxing-the-wealthy-to-the-hilt-would-make-us-all-much-better-off-203814
I have the European lindens. Very fragrant 35 to 40 ft high , beautiful crowns. This past weekend the forest called me in for spring maintenance. Fresh pine scent, abundant wild fern and trilliums flowering all like magic. When you live on the Ponderosa, WFH comes with the deed.
I agree that the RE commission system is antiquated and unfair. It pays just as much to lazy agents as it does good ones. If you get a quote from a renovator it would tell you exactly what they’d do and how much it will cost. They wouldn’t give you a quote saying your new kitchen will cost you 4% of whatever your homes value is, it would be a specified amount for a specified service. I’d like to know what you think would be a “fair” system?
You are going to like this one Garth! https://www.msn.com/en-ca/money/finance-real-estate/why-buy-a-house-in-canada-when-you-can-buy-a-castle-in-europe-for-the-same-price/ar-AA1bwaxS?cvid=08557aa0345d43e6942b1db25d083087&ei=35#image=1
@#91 Fanatically Focussed Faron.
Seek help.
#91 Faron on 05.23.23 at 12:26 am
#83 Sail Away on 05.22.23 at 7:34 am
Thanks for the heatwave reminder. I went to look up the heatwave comment and along the way found another deeply underwater TSLA purchase of yours (last week of July) that you, of course, boasted about soon after. Today, down about 27%.
Also, IEP settled down not quite 11%. Not sure, but I think your are now severely underwater on that recent purchase. IEP lovers/bag holders have become a point of mockery among the financial industry experts I read.
Heatwaves? Didn’t word it the best, and admittedly a bit hyperbolic, but it has a very good chance of holding up despite your efforts to misconstrue my words. Changes of a heatwave killing thousands of mammals (likely humans unfortunately) in the next 19.25 years is very high. Not 100%, but high.
Oh, and take responsibility for your posting of your own personal information and that of your *presumed loved ones. I present zero risk of harm to you. Stop defaming me now.
*presumed because I still can’t fathom the idiocy in telling a bunch of internet strangers anything about someone I love without their consent. It’s so fcking stupid and you know it. Yet, there you are blustering around like a child instead of owning your actions.
—————
The lady doth protest too much, methinks
I have no beef with land transfer taxes. Taxes go to pay for the things we, as a society, decided we wanted. We may all question some of those purchases but we’ll all have different ideas about which things are worth spending money on so it’s a wash. Given that we decided to spend the money, it has to come from somewhere, and a tax on an asset that is otherwise exempt from capital gains makes as much sense as anything.
But on realtor commissions–100% agree.
If the demand for real estate is really so high right now, then all of the “marketing” and “advertising” that realtors purport to do for you if you list with them should be unnecessary in this market.
List your house for sale on Kijiji or whatever other internet platforms are out there for advertising things, and the true house hunters will find you.
Just have a lawyer or a solid paralegal outfit handle the transaction for you with dotted i’s and crossed t’s.
If you fail to snag a hot-to-trot buyer, well, I guess you might need an agent then. Maybe negotiate the commish.
Or, just suck it up and fork over the $100 Gs for the sign with a picture on your lawn.
#94 Under the radar
When you live on the Ponderosa, WFH comes with the deed.
———————————————————————————————————-
https://www.youtube.com/watch?v=euw4j17czzs&t=2s
Speaking of bizarre.
The Russian “leadership” seems to be lacking these days…
https://www.reuters.com/world/europe/jester-or-rebel-mercenary-prigozhin-lays-bare-strains-putins-war-2023-05-23/
“A puzzle, wrapped in a mystery, inside an enigma…”
As Sir Winston once said about Russia……
Garth
More banks predicting more hikes incoming.
At this rate if the Government keeps up with saving the mortgaged to the hilt people, the consumer could be in for a huge problem of the mortgage growing substantially faster than it could be ever paid off.
Making $3000/mth payment to service a $800k loan @1.5% is good, at 7.5% payment is $6000 only $3000 is paid back as relief, $3000 is added to the mortgage as unpaid interest, in five years mortgage is now $950k+. Would the leaders then grant relief again so that at the next renewal with added relief payments added to mortgage would it not grow to $1,500,000 at the end of 10 years of minimum payments, tell me I am wrong with my math.
https://www.msn.com/en-ca/money/topstories/ecb-to-raise-rates-after-summer-3-more-hikes-until-september-hsbc/ar-AA1bzepj?ocid=msedgntp&cvid=c47ef52fca9a49d7aac5b8ada44ddf23
Real estate is doing to this country what trade unions did to Britain in the 1970s.
https://financialpost.com/opinion/canada-worst-decade-real-economic-growth-since-1930s
Snippets (NP). I agree with this. She’s earned my vote on the 29th. I’ll give her a chance….
“I can tell you it is one of the biggest differences between us and those on the left. I think you can see the wreckage of lives and communities all down the West Coast — and maybe the worst is in Vancouver’s east side — as a result of failed policy that has given up on people. ….But when a person has lost their individual agency and can’t think clearly for themself because all they are worried about is their next fix, I think it is a responsibility of family and community to say, you know what, you are either going to jail for a long time or you’re going into treatment.” Danielle Smith, UCP, Premier of Alberta
Garth, didn’t you have a post a few weeks ago that defended the realtor commissions? Just wondering if you think they are actually worth it or not (I don’t believe they are when prices are what they are) and if you think there is a case to be made for a “Property Guys” type of service.
Commissions are crazy. And FSBOs are a disaster. Be careful out there. – Garth
You’re missing the biggest issue on the lack of listings Garth:
Extended amortizations
People are now trapped in their houses with zero chance of moving, either up, down or sideways. They are simply unable to qualify for another mortgage or even renew their own mortgage. Fear is the running rampant in homeowners.
Case(s) in point: We have several friends and acquaintances on Vancouver Island who are acknowledging that they have no hope of renewing their mortgage when it comes due next year. They are leaving the coast and moving someplace cheaper, with Calgary commonly on the radar.
Luckily for them, they caught to updraft of pricing over the past several years on the Island and can cash out, retire and buy a comfortable home in Calgary before they are forced out. More power to them, but this is not a sign of a healthy market.
The Liberal/NDPs allowing the banks to unilaterally extend amortizations on existing mortgages is just creating a bigger bomb later.
The next step of insanity will be when the Libs/NDP introduce legislation to allow 50 year amortizations on new mortgages. The game must continue, no matter the cost.
Why do I say that? Since 9/11 I’ve been consistently wrong on how the governments can mess things up. I’ve always had the naive view that somewhere there is an adult in the house who will make a responsible decision and do what is best for the economy and country.
Not happening, so the the next logical thing is 50 year amortizations. Governments have a vested interest in the value of your home, probably even moreso than you do.
Governments recognize that it is the one investment that people will always protect to the death and shut up and keep paying usurous taxes and fees forever.
50 year amortization for new/renewed mortgages. You read it here first.
You nicely avoided the main reason. The massive amount of 5 year fixed mortgages locked in at 2.09%. In 2020.
Those will reset. I spoke to a mortgage specialist last week an BMO. NOT a broker.
The scenario is very clear. Home owners CANNOT just go to the bank and ask for a 40 year amortization. Or 30. When they reset they get handed the new payments. Now at close to 5%. If they wan to extend the amortization, they need to REQUALFY. That means another stress test. Currently at 7%. So most will not pass as most barely past the last time at 5%.
So the reality is as the 5 year crew roll into the bank, reality will be coming in. Every single day a new group of hundreds if not thousands will be forced to downsize. Its not a question of if. Its coming and there is no way to spin it.
That is why in USA most have 30 year-which makes this scenario far less likely. We have the 5 year.
Explain that to an American. I do-nearly every day-and see the shocked look on the faces.
“Construction jobs start at 25-30. ”
Ha!, Ha!, Ha!, Ha!, Ha! I started on a framing crew in 1981 for $5 an hour and the next year doing stairs for $4 an hour and now I make $17 an hour and I am going on 63 years of age this summer and no wife, kids or a home yet. If the joke is on me it isn’t funny.
I’ve heard plenty of BS in my life time but construction jobs start at 25-30 sounds like a real whopper to me. Union pay perhaps? Many homes in this country were built by people paid the least amount of money per hour. Not much more than minimum wage and sometimes got screwed out of their wages because the employer lives high on the hog and or doesn’t remit deductions and goes broke. Plenty of that in the 1980s and 90s.
#91 Faron on 05.23.23 at 12:26 am
*presumed because I still can’t fathom the idiocy in telling a bunch of internet strangers anything about someone I love without their consent. It’s so fcking stupid and you know it. Yet, there you are blustering around like a child instead of owning your actions.
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Kind of like you mentioned early on about your partner previously being in an abusive relationship?
Selective memory and cherrypicking facts as usual.
Which does track for a climate scientist.
#97 crowdedelevatorfartz on 05.23.23 at 8:13 am
@#91 Fanatically Focussed Faron.
Seek help.
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All I can do is sing my song of harmony and hope for the best. Poor fella. All sweary and angry as usual. And talking about my family again, as usual. Sad.
94 under the radar on 05.23.23 at 5:32 am
I have the European lindens. Very fragrant 35 to 40 ft high , beautiful crowns. This past weekend the forest called me in for spring maintenance. Fresh pine scent, abundant wild fern and trilliums flowering all like magic. When you live on the Ponderosa, WFH comes with the deed.
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“Unter den Linden”
Is the famous Boulevard in the Centre of Berlin.
Family sold their home in Calgary and realized $200k increase over 8 years. No great money maker. Now they are moving to Victoria for work and several listings are being re-upped every 60-90 days to look fresh. Not moving fast in their price range which is 1.2-2 million.
Some even up the price in greed and since they are watching the arkert and listings can identify which realtors seem to be good at the price bumping.
So….unless we let our politicians pee away as much money as they want, according to Biden, the White House says the markets will plummet 45% ? Isn’t that “misinformation”? Isn’t that ‘ terrorism’? Don’t we deserve better that to be ruled over by terrorists?
1.5 degrees and we all die? C’mon man. Mr. Trudeau is that all Canada is to you, a font of ideology , an appeasement of ego with no benefit to the citizens? Mr Trudeau we aren’t terrorized, but we are broke and we can’t afford your ego anymore.
I fail to see how a single mom paying for the EV tax credit of a multimillionaire helps the mom stay away from the food bank, other than by ensuring that she can’t afford the gas to drive to it.
It’s time for people who drive EVs to pay their fair share for the excessive road damage, tax credits, power grid brownouts, child slavery and environmental mining mayhem that their EVs cause.
But, never fear, France has found a new light at the end of the tunnel by announcing a ban on short haul domestic flights. Everyone now has to travel by train to meet the new greenhouse gas emission targets. Quelle Egalite!!
But wait, there’s more: If you have a private jet, then the new rules don’t apply to you. You can still continue to take your jet for those 15 minute Kardashian-style croissant and capuccino runs to that trendy little boulangerie outside of Lyons. Elites and government officials supporting and making rules that don’t apply to them. Who would have thought that would happen??
https://www.breitbart.com/europe/2023/05/23/france-bans-short-haul-flights-decrees-travelers-must-catch-a-train-instead/
Ever think we’re being forced into living in the prequel to “The Hunger Games”???
Suckers….
93 Tax
Define “rich”.
#108 T on 05.23.23 at 10:20 am
So the reality is as the 5 year crew roll into the bank, reality will be coming in. Every single day a new group of hundreds if not thousands will be forced to downsize. Its not a question of if. Its coming and there is no way to spin it.
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Correct right until the conclusion. Some with be forced to sell (downsize). Some will borrow for a secondary source / family member to not lose the house. People with jobs will choose door #2 most of the time.
91 Faron:
You can’t take shots at people ,and then fend outrage when they are returned in kind. That is so Trumpish !
#115 barkless dog
It’s time for people who drive EVs to pay their fair share for the excessive road damage, tax credits, power grid brownouts, child slavery and environmental mining mayhem that their EVs cause.
But, never fear, France has found a new light at the end of the tunnel by announcing a ban on short haul domestic flights. Everyone now has to travel by train to meet the new greenhouse gas emission targets. Quelle Egalite!!
But wait, there’s more: If you have a private jet, then the new rules don’t apply to you. You can still continue to take your jet for those 15 minute Kardashian-style croissant and capuccino runs to that trendy little boulangerie outside of Lyons. Elites and government officials supporting and making rules that don’t apply to them. Who would have thought that would happen??
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Agree.
It’s the old “Let them eat cake”.
And the ban effects only 3 destinations.
BTW.
Marie Antoinette was Austrian.
Le especial rappateur finds no reason for a public inquiry into election interference, all of which seems to swirl around one party and one leader.
Color me surprised..
Didn’t see that coming..
No story here folks…
Time to get back to smoking weed and drinking Bud Light..
#87 HH on 05.22.23 at 10:49 pm
One time I did tell the BC government that the property transfer tax was ripping off buyers. It is a ridiculous amount. A lot of good that did. I just got ignored. But the costs don’t end there. You also have legal costs.
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COMMENT:
Some BC history…
BC ‘s economy was quite dire in early 1980’s.
Bill Bennett was the Premier at the time… leader of the Socred party .
They gambled with EXPO 86….and concurrently built the Coquihalla Highway.
In hindsight…pretty clear they were setting BC up to accept Hong Kong expatriates before 1997 rang in..
The highway facilitated people in Metro Vancouver to cash out and move to the Okanagan area. The highway’s original estimate was approx.$250 million….ended up at over $1 Billion.
Bennett stepped down after Expo 86…and Bill Vander Zalm ran for leadership. He won..became BC Premier..and created a major rift in the party, bringing it more to the extreme right. He SOLD BC Gas…which was once a Publically owned utility company and also introduced the “Property Purchase Tax”.
Under Vander Zalm…the “publically- owned” Expo lands were sold to billionaire Li Kai Shing…another lost opportunity.
Vander Zalm got caught in a scandal trying to sell his Fantasy Gardens to Asian Billionaire.
Vander Zalm, in hindsight was a disaster… moreso why he would sell a cash cow like BC Gas and also introduce a property purchase tax.
The end result???….was an even more disastrous NDP Gov’t through most of the 1990’s that went through(4) premiers and various boondoggles such as Fast Ferries.
Regardless…BC’s economy since 1980’s has been focussed on Real Estate.
“93 Tax
Define “rich”.”
It used to mean something like having enough of the official currency needed to invest and generate all the income you would ever need or want in perpetuity.
Now it means earning enough to buy a roof over your head and have plenty left over to save and pay for your expenses.
https://www.lomborg.com/the-heresy-of-heat-and-cold-deaths
I like Bjorn’s approach to climate change. He believes in it but not the ways in which we are hyping or approaching it. Very practical and well educated man on the topic but certainly not an alarmist.
https://www.wsj.com/articles/climate-activists-blow-smoke-on-wildfire-fears-adaptation-land-11635367688
#105 the Jaguar on 05.23.23 at 9:42 am
Snippets (NP). I agree with this. She’s earned my vote on the 29th. I’ll give her a chance….
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Good post Jag.
Off topic.
Bucket list?
https://www.youtube.com/watch?v=IOEGRBtEqRA
Sail Away should keep mentioning stocks, as many as possible, so that the ‘stock tracker’ (“stocker” for short) can report daily on them.
I wonder how he has time for anything else?
p.s. My new Tundra is due to arrive earlier than expected. Looks like demand is cooling or supply chain issues at Toyota are getting resolved, finally. I’m still skeptical of EVs and unwilling to pay the premium, and don’t really need a truck that does 0-60 mph in 2 seconds. I also expect electricity prices to soar as gas prices remain cheap. If they ban big trucks like mine it will be worth more than I paid for it! As for stocks, Google and Tesla are my AI bets since Meta sucks, MSFT and Nvidia are too pricey too soon.
Mortage Amortizatin Externsion truth
#108 T on 05.23.23 at 10:20 am
You nicely avoided the main reason. The massive amount of 5 year fixed mortgages locked in at 2.09%. In 2020.
Those will reset. I spoke to a mortgage specialist last week an BMO. NOT a broker.
The scenario is very clear. Home owners CANNOT just go to the bank and ask for a 40 year amortization. Or 30. When they reset they get handed the new payments.
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Great comment. This rings true. But, these people may not be in bad shape at renewal because quite a large chunk will have been knocked off their mortgage owing. And their wages will generally be higher.
In addition all those with variable rate interest but STATIC fixed payments had variable amortizations. No one has extended their amortizations. Amortizations simply automatically extended with higher interest because the amortizations were variable from the start. Claims that banks are extending these amortizations are fake news.
But many of these people WILL be in trouble at renewal if they don’t take action now and increase their payments. Their mortgages at renewal could well be bigger than at the outset.
Has anyone received a trigger letter and did it REQUIRE you to increase your payments or was it more of just a warning that you were on negative amortization?
I wonder when CMHC started allowing static payments on variable rates. That was guaranteed to have amortisations increase past 25 years if interest rates rose.
You do not seem to know that VRM mortgages at several banks do not ‘automatically extend amortizations’ when rates rise but rather borrowers have contracts which state that passing a trigger point would result in “other payment options being necessary” or words similar. The decision to forego payment increases or the need for lump sum amounts was, indeed, made intentionally by bank leaderships. – Garth
Amortization Extensions
You do not seem to know that VRM mortgages at several banks do not ‘automatically extend amortizations’ when rates rise but rather borrowers have contracts which state that passing a trigger point would result in “other payment options being necessary” or words similar. The decision to forego payment increases or the need for lump sum amounts was, indeed, made intentionally by bank leaderships. – Garth
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Fair enough at SOME banks the banks made a decision to forego payment increases at the trigger point in SOME cases (on request).
But I believe at SOME big banks no payment increase was required. And that’s why something like a third of mortgages ended up with 30 or 35 years plus amortizations as of February 28. There is no way that was banks forgiving payment increases. They would not have the staff to forgive that many that fast.
I hope the banks give some clarity on this as they report this week. I will go out on a limb and predict the number of mortgages over 30 and 35 years amortization will be down slightly this quarter versus last as surely some people on fixed payment VRM will have increased their payments whether required to or not.
In my defense I would say there has not been much clarity about the trigger point situation or the long amortizations. I looked at RBC’s Q1 and searched the analyst call transcript and did not see the matter addressed in any detail. Bank analysts and RBC seemed blithely unconcerned as of Q1.
#123 Don Guillermo on 05.23.23 at 1:21 pm
https://www.lomborg.com/the-heresy-of-heat-and-cold-deaths
I like Bjorn’s approach to climate change. He believes in it but not the ways in which we are hyping or approaching it. Very practical and well educated man on the topic but certainly not an alarmist.
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Thanks! It’s always good to see sober, prudent climate science vs. the panic-stricken fear-mongering, ‘The End is Near!’ picket-carrying, public artwork destroying kind.
It’s unfortunate that many of the latter types are drawn to work in the realm and torture us with wild pie-in-the-sky proclamations. Sigh.
Climate crisis believers are just religious fanatics rebranded. The urge to aggressively demand others care about the ‘upcoming apocalypse’ is a curiously prevalent human trait… among a certain subset.
This too shall pass.
There are allot of assumptions here that many people paid down mortgages with the lower rate so they will be in “good shape” on renewal.
I always love the positive tilt as its usually projecting.
The reality is many were told rates will be low forever during 2020 by the Bank of Canada. So many leveraged the house for renos, pools, cottages, a down payment for kids, and even bought one of the 16,600 condos that are AIR BNBs in Toronto. (YES-that many)
All this is going to unwind. Its how the economy lived for a few years.
Case in point. Why do you think it was taking a year to put a pull in post covid? Or that people were selling there booked pool install to other buyers for $5,000 in cash? Cause they got a massive raise and bonus?
The reason why is a house down the street sold for $300K over list, and a simple call to CIBC and a drive by appraisal meant $300K in the bank. For armor stone and a hot tub as well.
How this is misunderstood when the average family income is $70K is a mystery. But it will be reality soon.
#105 ‘the Jaguar’ – I have to say I’m totally puzzled by the ‘Compassionate Care Act’ as presented by Ms. Smith & her UCP colleagues. The puzzlement is this: the self same group of people who had a collective cow over mask wearing/vaccines being ‘forced’ upon people are apparently happy to forcibly confine anyone considered ‘at risk’ due to addiction(s). Forcible treatment, not by choice. Which I have to say seems doomed to failure, as the first step in recovery is admitting one has a problem & accepting that one needs assistance to correct the situation. Can’t see anyone cited under the ‘Compassionate Care Act’ being on board with the suggested catch & ‘maybe’ release concept of the UCP. Can even see said ‘Act’ being used in ways ‘not intended’ but by that time too late for regrets.
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