- Precambrian Video Games
- Aug 19, 2002
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lol at the X condos having faulty plumbing and extreme temperature variations. I was going to take a wild guess and say this was cheap-rear end cost cutting by lovely developers and hey, guess what?
quote:Not long after he moved into his 5th floor condo in January, 2012 and took a shower, de Muelenaere realized there was a problem which he suspects has been an issue since the building was completed in late 2010. Every time someone in a nearby unit flushed a toilet or started up their dish or clothes washer, the water in his shower suddenly got hot or cold.
There were numerous complaints which the condo board, Great Gulf and even officials of Ontario’s new home warranty program, Tarion, investigated. So did de Muelenaere.
“I work in construction, so I did a bit of research,” he says, suspecting that non pressure-balanced valves were used instead of pressure-balanced valves which keep temperatures constant, despite fluctuations in the hot or cold water supply lines.
Great Gulf became aware of the valve problem in 2012 but says it took until 2013 to discover the reason. No one has been scalded, it stresses.
Great Gulf has “been working on a solution for several months,” and has tested a prototype device in a few units which would stop the temperature fluctuations without having to crack out the tiles in all 417 units, many of which have two bathrooms, says Great Gulf spokesperson Madeline Zito.
“We advised the condo board and the residents who complained that we were working on a solution. But we have to be careful to come up with a solution that works and where we’re not being intrusive to a homeowner and creating problems for them,” Zito added.
Great Gulf is about to start implementing the fix, which is expected to cost less than $1 million, she said.
So summary: the developer claims to not have known about the problem. They took over a year to figure out what was causing the problem. They don't want to actually replace the valves because they'd have to break the expensive tiles in every washroom - instead, they want to install some prototype device to control temperature fluctuations (??? no idea what that is). They claim this will cost less than $1 million but in the meantime they're facing a $29 million lawsuit over it.
gj
e: some quick google searches show that a pressure-controlled valve costs around $100 from Home Depot. So 5-10 of these in every one of the 417 units would have been what, 200-400k? 500k maybe, paying full retail price and not wholesale?
Precambrian Video Games fucked around with this message at 06:00 on Sep 29, 2014
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Sep 29, 2014 05:57
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- Adbot
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ADBOT LOVES YOU
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May 26, 2024 22:57
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- namaste friends
- Sep 18, 2004
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by Smythe
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One more thing, said real estate agent family friend confirms that anyone who bought a condo after 2008 made 0 dollaz in capital appreciation.
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Sep 29, 2014 06:45
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- Kalenn Istarion
- Nov 2, 2012
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Maybe Senpai will finally notice me now that I've dropped :fivebux: on this snazzy av
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Can you guys tone it down a bit? You come off as sky-is-falling idiots.
People should have budgets and spend responsibly but it doesn't warrant the spiteful hate and exasperated incredulousness.
"You guys" is mostly the OP tbf
lol at the X condos having faulty plumbing and extreme temperature variations. I was going to take a wild guess and say this was cheap-rear end cost cutting by lovely developers and hey, guess what?
So summary: the developer claims to not have known about the problem. They took over a year to figure out what was causing the problem. They don't want to actually replace the valves because they'd have to break the expensive tiles in every washroom - instead, they want to install some prototype device to control temperature fluctuations (??? no idea what that is). They claim this will cost less than $1 million but in the meantime they're facing a $29 million lawsuit over it.
gj
e: some quick google searches show that a pressure-controlled valve costs around $100 from Home Depot. So 5-10 of these in every one of the 417 units would have been what, 200-400k? 500k maybe, paying full retail price and not wholesale?
Maybe, but the tile work could easily be a couple grand a unit depending on how detailed it is and whether they can crack out a time or two without damaging other pieces.
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Sep 29, 2014 11:11
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- triplexpac
- Mar 24, 2007
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Suck it
Two tears in a bucket
And then another thing
I'm not the one they'll try their luck with
Hit hard like brass knuckles
See your face through the turnbuckle dude
I got no love for you
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Is there a go-to site for calculating property taxes? I was messing around with ratehub.ca and it said for a $600k house in Toronto it would be $610/mth, which seems high
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Sep 29, 2014 16:04
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- computer parts
- Nov 18, 2010
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PLEASE CLAP
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Is there a go-to site for calculating property taxes? I was messing around with ratehub.ca and it said for a $600k house in Toronto it would be $610/mth, which seems high
I found this, from the City of Torono website. It seems like payments would be closer to ~$360/month.
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Sep 29, 2014 16:09
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- triplexpac
- Mar 24, 2007
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Suck it
Two tears in a bucket
And then another thing
I'm not the one they'll try their luck with
Hit hard like brass knuckles
See your face through the turnbuckle dude
I got no love for you
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I found this, from the City of Torono website. It seems like payments would be closer to ~$360/month.
It's pretty easy way to deflate the "you could just get a mortgage instead of throwing your money away renting" argument anyway. There's no way my wife & I could get a mortgage + property tax for what we currently pay in rent, not to mention all the extra home owning expenses on top of that. And property tax is "throwing your money away" just as much as renting.
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Sep 29, 2014 16:14
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- ocrumsprug
- Sep 23, 2010
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by LITERALLY AN ADMIN
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I meant installing pressure-controlled valves originally. I don't buy the developer's story that they had no idea what kind of plumbing was going in.
Aren't those buildings built using lowest cost specialty bidding? I could easily imagine the plumbing contractor discovering that the guy inspecting his work couldn't tell the difference in the valves, and made himself an extra $500K on the contract.
Still doesn't excuse the general contractor for not noticing in the first place though.
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Sep 29, 2014 17:23
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- peter banana
- Sep 2, 2008
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Feminism is a socialist, anti-family, political movement that encourages women to leave their husbands, kill their children, practice witchcraft, destroy capitalism and become lesbians.
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God drat, when me and other friends lived in lovely basement suites the whole "someone upstairs flushed so the water got really hot" thing was just part of the fun of living in someone's lovely self-built basement suite. I've never heard of that happening in a purpose-built multi-family, not even some of my friends nearly slum apartments have that problem.
I have it in my slum apartment but that's because I pay $1300 to live on Queen West and I accept it. If I was paying $1700+ to rent a glass cube, I'd be onto my helpless landlord ASAP.
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Sep 29, 2014 17:57
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- Grand Theft Autobot
- Feb 28, 2008
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I'm something of a fucking idiot myself
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It's pretty easy way to deflate the "you could just get a mortgage instead of throwing your money away renting" argument anyway. There's no way my wife & I could get a mortgage + property tax for what we currently pay in rent, not to mention all the extra home owning expenses on top of that. And property tax is "throwing your money away" just as much as renting.
Interest on your loan is easily the most "throwing your money away" part of owning. Property taxes actually pay for useful public goods, interest is pure rent. And renters pay property taxes anyways, through their rental price to the property owner, though the relative share varies based on market conditions.
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Sep 29, 2014 18:39
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- Lexicon
- Jul 29, 2003
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I had a beer with Stephen Harper once and now I like him.
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Interest on your loan is easily the most "throwing your money away" part of owning. Property taxes actually pay for useful public goods, interest is pure rent. And renters pay property taxes anyways, through their rental price to the property owner, though the relative share varies based on market conditions.
Best to think of it as a "holding cost" that owners have that renters don't (even if it is ultimately baked into rents at some level - but remember that prices are set by demand, not as some function of cost).
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Sep 29, 2014 19:26
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- Grand Theft Autobot
- Feb 28, 2008
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I'm something of a fucking idiot myself
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Best to think of it as a "holding cost" that owners have that renters don't (even if it is ultimately baked into rents at some level - but remember that prices are set by demand, not as some function of cost).
That's why I explicitly stated that the share of p.tax being paid by owner or renter will vary based on market conditions. In a tight rental market, where renters have few options and face higher prices, more of the p.tax can be shifted onto their bill.
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Sep 29, 2014 22:43
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- Lexicon
- Jul 29, 2003
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I had a beer with Stephen Harper once and now I like him.
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That's why I explicitly stated that the share of p.tax being paid by owner or renter will vary based on market conditions. In a tight rental market, where renters have few options and face higher prices, more of the p.tax can be shifted onto their bill.
Indeed. I don't disagree with what you wrote.
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Sep 29, 2014 22:59
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- Grand Theft Autobot
- Feb 28, 2008
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I'm something of a fucking idiot myself
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Indeed. I don't disagree with what you wrote.
I guess I was confused at how you told me to remember something that I in fact brought up.
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Sep 29, 2014 23:13
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- Lexicon
- Jul 29, 2003
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I had a beer with Stephen Harper once and now I like him.
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I guess I was confused at how you told me to remember something that I in fact brought up.
Wasn't intended as a correction of your post - just thread chatter really, but I can see why it would have been construed as such. Consider it withdrawn.
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Sep 29, 2014 23:20
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- FrozenVent
- May 1, 2009
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The Boeing 737-200QC is the undisputed workhorse of the skies.
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Honestly, "prices are set by demand, not cost" is something a lot of people need to be reminded of constantly. I've worked with a few self-styled quantitative analysis people who would forget that.
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Sep 30, 2014 00:33
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- melon cat
- Jan 21, 2010
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Nap Ghost
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Is there a go-to site for calculating property taxes? I was messing around with ratehub.ca and it said for a $600k house in Toronto it would be $610/mth, which seems high
If you ever doubt that, take a look at what people in Mississauga, Ajax, Pickering, and Milton pay compared to Toronto. It's ridiculous.
melon cat fucked around with this message at 21:12 on Sep 30, 2014
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Sep 30, 2014 21:09
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://mobile.reuters.com/article/idUSL2N0RV1ZV20140930?irpc=932
quote:
TOP NEWS
Canadian watchdog says banks can withstand major housing downturn
Tue, Sep 30 15:14 PM EDT
By Jeffrey Hodgson
TORONTO, Sept 30 (Reuters) - A recent systemwide stress test confirmed Canadian banks could absorb the hit from a significant downturn in the country's booming housing market, the new head of Canada's banking regulator said on Tuesday.
Jeremy Rudin, who took the top job at Canada's Office of the Superintendent of Financial Institutions in June, said the banking system must be strong enough to cope with the "inherent uncertainty" of the future of the property market.
"Everybody's conscious of the fact that the mistake that some people in the U.S. made was to assume they knew what housing prices were going to do. Our approach is we need to ... have a system that's robust to the fact we don't know," he told reporters in Toronto.
Canada's housing market boomed following the financial crisis, fueled by borrowing costs near record lows. While policymakers and major banks have predicted a soft landing, some commentators have said the situation is a bubble waiting to burst.
At the same time Canadian banks, which avoided the taxpayer-funded bailouts that occurred in the United States, have increased their capital ratios and been repeatedly ranked among the world's soundest.
Rudin said the onus is on lenders to make sure a surge in mortgage lending is sustainable.
"It's the institutions that are responsible. They need to know what their risks are. They need to manage them, measure and manage them, and they need to have enough capital and enough liquidity to support those risks," he said.
Rudin made the comments after his first major policy speech, in which he said Canada's reputation for rigorous regulation has become a competitive advantage for its financial institutions, giving them better access to funding and lower funding costs. (Reporting by Jeffrey Hodgson; Editing by Steve Orlofsky)
This is loving OUTRAGEOUS. I wanted the banks to loving CRATER
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Oct 1, 2014 03:18
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- Lexicon
- Jul 29, 2003
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I had a beer with Stephen Harper once and now I like him.
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I kind of want the crash to happen purely to see the effect on CI's already maniacal and arguably disturbing posts
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Oct 1, 2014 03:36
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- FrozenVent
- May 1, 2009
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The Boeing 737-200QC is the undisputed workhorse of the skies.
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At this point I basically picture CI as the caretaker of the Overlook Hotel, except he keeps typing "all debt and no assets make Vancouver a poo poo town" over and over.
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Oct 1, 2014 03:54
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- Lexicon
- Jul 29, 2003
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I had a beer with Stephen Harper once and now I like him.
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Wait, BC's economy is amazing is a talking point?
Surely even the slickest realtor snake oil salesman would struggle with that one?
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Oct 1, 2014 04:09
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- namaste friends
- Sep 18, 2004
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by Smythe
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LOL loving australia
http://www.bloomberg.com/news/2014-09-30/sydney-pads-costing-more-than-new-york-spurs-rba-rethink.html
quote:
To see why Australia’s central bank has shifted its stance on home-lending curbs, look no further than Sydney’s inner city where a one-bedroom apartment sold at the weekend for 35 percent more than its last price in 2012.
The 54-square-meter (581-square-foot) property in Surry Hills was purchased by an investor for A$647,000 ($565,931), said Con Fotaras, a sales consultant at Belle Property Surry Hills who brokered the transaction. “It’s really hard to put a price on a property at the moment,” he said of a Sydney market where the median home price is higher than in New York.
Policy makers have taken a U-turn on their past dismissals of macroprudential measures as they seek to slow lending to investors in a market that the Reserve Bank of Australia has described as “unbalanced.” Governor Glenn Stevens said last week regulators are exploring “tools that might, at least, lean on that a bit” and analysts say these could include forcing banks to calculate loan approvals at a higher interest rate and set aside more capital when the economy is growing strongly.
The RBA is grappling with a conundrum that drove its counterparts from the U.K. to New Zealand to tighten lending rules and slow housing while keeping interest rates low to revive other industries. Complicating Stevens’s task is that Australia’s home price surge is limited to Sydney and Melbourne.
“It’s not an easy one as you’re targeting investors only in two capital cities,” said National Australia Bank Ltd. Chief Economist Alan Oster. “The one thing you don’t want to do is dry up investors’ interest in newly built houses as then the rental market becomes tight.”
A parliamentary panel has asked RBA officials to explain tomorrow at a hearing in Canberra why the central bank is considering lending rule changes amid concerns they could choke off residential construction in a country with a fast-growing population and limited housing supply. Lawmakers will question RBA Assistant Governor Malcolm Edey, who looks after the financial system, and Luci Ellis, the head of its financial stability unit.
UBS AG’s Australian economists, led by Scott Haslem, said regulators may consider ordering banks to add 3 percentage points to current lending rates when assessing an investor’s ability to repay a loan. That compares with a 2 percentage point buffer frequently used by banks. Lenders could also be asked to apply a stricter income test when assessing loan serviceability, they said.
Investor Lending
The use of caps on loan-to-valuation ratios, as introduced in New Zealand last year, is “very unlikely”, the economists said in a research note yesterday.
Data released by the central bank yesterday showed growth in lending to investors for property purchases accelerated to 9.2 percent in the 12 months through August from the previous year, the fastest pace since April 2008.
In another Surry Hills sale last weekend, a two-bedroom terrace house went to an investor for A$1.41 million, 47 percent higher than it was sold for last year, said Fotaras, who was the selling agent. Sydney’s median home price rose 14.3 percent in September from a year earlier to A$655,000, an RP Data CoreLogic Home Value Index showed today. That compared with $539,500 in August in New York, according to Yahoo!-Zillow Real Estate Network.
Softer Stance
Outside housing, data today showed retail sales rose less than forecast in August, gaining 0.1 percent from a month earlier compared with an expected 0.4 percent increase.
Stevens dismissed macroprudential measures as an “international fad” six weeks ago and said that while he didn’t rule them out, the scenario for implementing such steps “seems unlikely on any near-term horizon.”
A month later the stance softened. In its semi-annual financial stability review last week the RBA said investors are starting to distort the market and it was discussing possible measures with other regulators to strengthen lending practices.
“The composition of housing and mortgage markets is becoming unbalanced, with new lending to investors being out of proportion to rental housing’s share of the housing stock,” the central bank said in the Sept. 24 release. “Strong investor demand can be a sign of speculative excess.”
Housing loan approvals to investors are almost 90 percent higher in New South Wales than two years ago and 50 percent higher over the same period in Victoria, the document showed.
View Change
Saul Eslake, chief Australia economist at Bank of America Merrill Lynch, who is also skeptical about macroprudential measures, said the governor hadn’t flip-flopped on policy.
“It is a change of view,” Eslake said by phone from Sydney. “But I guess he would defend it if you put that to him by quoting Maynard Keynes who said famously: ‘When the facts change, I change my mind. What do you do sir?’”
Stevens repeated his reservations on the value of lending curbs in remarks to an economics forum in Melbourne Sept. 25.
“I’ve always said I have a certain skepticism about macroprudential tools as a panacea, but I remain open to using them if it seems sensible to do so, and that’s the kind of thing we have in mind right now,” he said.
obviously we don't do anything because bc is the best place on earth so it is only right that our median house price is more expensive than NYC
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Oct 1, 2014 04:11
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- ocrumsprug
- Sep 23, 2010
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by LITERALLY AN ADMIN
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quote:
The RBA is grappling with a conundrum that drove its counterparts from the U.K. to New Zealand to tighten lending rules and slow housing while keeping interest rates low to revive other industries. Complicating Stevens’s task is that Australia’s home price surge is limited to Sydney and Melbourne.
“It’s not an easy one as you’re targeting investors only in two capital cities,” said National Australia Bank Ltd. Chief Economist Alan Oster. “The one thing you don’t want to do is dry up investors’ interest in newly built houses as then the rental market becomes tight.”
It is really entertaining to read about how they would love to tighten up mortgage rules, but they are courting the foreign investment crowd so they just cannot.
0-5% down and ever expanding government backed insurance being the hallmark of high rolling foreign capital investment.
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Oct 1, 2014 05:37
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- melon cat
- Jan 21, 2010
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Nap Ghost
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You've got to look at what the article isn't saying. Like the article said, the banks will be fine. They're stable, and the fact that they seamlessly operate across the country allows them to quickly adjust their lending policies and adapt to shocks in the market.
But, there's absolutely nothing in the article saying that the average Canadian will be able to weather this kind of storm.
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Oct 1, 2014 07:22
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- I would blow Dane Cook
- Dec 26, 2008
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It is really entertaining to read about how they would love to tighten up mortgage rules, but they are courting the foreign investment crowd so they just cannot.
0-5% down and ever expanding government backed insurance being the hallmark of high rolling foreign capital investment.
Foreign investors pay cash, it's the local investors, sorry speculators, that are borrowing like mad.
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Oct 1, 2014 07:37
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://m.theglobeandmail.com/globe-...hboard/follows/
quote:
Who wouldn’t like an investment with an 18 per cent annualized rate of return?
That’s the pitch for some investment condo projects being sold across Canada. Emails from realtors, developer ads in free condo magazines, and even spots on the radio are bombarding the public with promises of huge profits, such as doubling your money in three years.
It might be possible to get rich quick by investing in a condo, especially if you’re leveraging yourself 20-to-1. And anyone who’s bought stocks, bonds or mutual funds in recent years knows how difficult it is to see gains that size, especially in the wake of the 2008 global stock market meltdown.
But focusing solely on the potential upside ignores the cardinal dynamic of investing in anything from equities to real estate: risk versus return. If an investment has a potential return that is high, then it necessarily carries a lot of risk. My two cents on the condo-as-investment idea?
Spend at least as much time understanding the risks before signing on the dotted lines.
The ad below, for example, promotes an annual return on investment of 18.8 per cent and a return on investment on your deposit of 74.3 per cent. Attend an information seminar and you’ll also get a free forecast of real estate market returns.

Here’s another advertisement that suggests a 91 per cent return on your investment, if you buy a pre-construction condo and flip it before it closes. The idea here is that you agree to buy the unit before the building has been built in the hopes that in the years it takes to complete and register the building, the price of that unit will have increased.

To follow that logic, heck, why stop at one? Why not buy five investment condo units to rent out and become a millionaire in eight and a half years?
It’s worth noting that many families have created wealth through owning property. And across Canada, there are still many projects that will likely turn out to be good real estate investments over the long run. That being said, any investment decision, be it stocks, bonds, mutual funds, or condos, needs to made with an appreciation of not only what could go right but also what could go wrong.
When dealing with investment funds, there are industry regulations in place for what can, and cannot, be communicated. For example, according to National Instrument 81-102, which governs the investment funds area of securities markets in Canada, any sales communication for a fund that contains performance data must also have certain disclosures.
Ads have to disclose the existence of commissions and other fees. They also must clearly indicate that returns are not guaranteed and past performance may not be repeated.
The rules governing advertisements for real estate investing either seem to be less developed, or not enforced.
For example, people may know that when you are selling your existing home the buying and selling agent will split the once-traditional 5 per cent commission. That 5 per cent has been ground down a bit over the last decade as people are bargaining harder on rates, so maybe the two agents each gross 2 per cent.
With a condo pre-construction sale, however, there is only a selling agent. The developer may offer a 6 per cent commission (gross) to this agent. They may receive that in three equal instalments of 2 per cent, conditional on milestones of the development, but suffice it to say, that’s three times what they would earn for a regular sale.
The spread-out payments also create a stable income, which is great for anyone in sales. Make no mistake, the incentive to push pre-construction condos is very high. And that’s important information for prospective buyers.
Speaking of pre-construction condos, this video with realtor David Fleming adamantly arguesthat it’s almost impossible to make money flipping a pre-construction sale in Toronto in 2014. If you’re contemplating a similar investment, it’s worth watching. Remember, you need to at least be aware of what can go wrong.
Since some investors put little down when they buy an investment condo, they can find that the income from the condo doesn’t cover the expenses of owning the unit. They are slightly cash flow negative from the start, in the hopes of making money by quickly selling that condo for a capital gain.
The longer your horizon, the more confidence you can have that housing prices will be higher, but no market can be reliably predicted over the short term. If the market is flat or down, you may end up with a capital loss in addition to the monthly losses you were eating.
There is also the risk of a gap between tenants. If you are thinking of buying a condo as an investment, as yourself: How many months could you carry a property without a renter? For now, vacancy rates may be low in certain areas, but what if that changes between the time you agree to buy and the time the unit is ready for rental, which could be years?
What if condo prices stagnate, or fall?
I’m not suggesting you should panic. I’m suggesting that you inform yourself of the risks and the possible downsides of buying a condo as an investment.
When making any kind of investment, here are some general rules of thumb to consider:
Borrowing to invest magnifies potential gains as well as potential losses.
The potential of higher returns necessarily comes with higher risk (but higher risk may or not come with higher returns).
All markets move in cycles, and they cannot be reliably predicted.
The longer people have been enthusiastic about a certain asset class or strategy that has been performing well, the less likely the enthusiasm is to continue.
Follow Preet Banerjee on Twitter:@preetbanerjee
I wish people would stop writing news columns which lead talking points with questions.
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Oct 1, 2014 13:45
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- Saltin
- Aug 20, 2003
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Don't touch
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I don't know of a better resource calculating taxes, but for what it's worth Toronto's property taxes are quite low compared to the rest of the GTA. So, that's something to factor in your estimated property tax costs.
If you ever doubt that, take a look at what people in Mississauga, Ajax, Pickering, and Milton pay compared to Toronto. It's ridiculous.
Property taxes are all about supporting infrastructure and services. It makes a lot of sense that people who live in less dense areas pay higher property taxes. Your infrastructure and service spend reaches/benefits less people and the pool of payees is much smaller per given geography. In fact, most people who live in the suburbs you mention benefit indirectly from the property tax base in Toronto, because they work here.
It's almost like living in less dense areas is not completely sustainable, unless you're a loving farmer with a well and septic system.
Saltin fucked around with this message at 15:07 on Oct 1, 2014
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Oct 1, 2014 15:05
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://business.financialpost.com/2014/10/01/housing-bubble-will-force-bank-of-canada-to-renew-rate-hike-warnings-soon-pimco-says/
quote:The Bank of Canada will be forced to renew warnings of the possibility for higher interest rates in order to halt a “bubble” from forming in the housing market, according to Pacific Investment Management Co.’s Ed Devlin.
Governor Stephen Poloz’s removal of language about the potential need to raise rates from the central bank’s policy statements has helped to weaken the currency, spurred inflation and contributed to a pickup in exports. At the same time, the rising home prices and debt levels that caused Poloz’s predecessor Mark Carney to insert a “hawkish bias” into official statements have continued to climb.
With projected rate increases from the Federal Reserve likely to cause the Canadian dollar to fall further and inflation now at the central bank’s 2% target, the Bank of Canada will turn its attention back to risks from excessive consumer debt this year or early next, said Devlin, who oversees $17 billion, including the Canadian portfolios for Pimco, the world’s biggest manager of bond funds.
“You have an overvalued asset that can correct orderly or disorderly — and the longer we keep rates this low, and the more we accumulate debt the higher probability it gets disorderly,” Devlin said at the Bloomberg Canada Fixed Income Conference in New York Tuesday. “If Poloz gets his weaker dollar because of the Fed, I think he will become more cognizant of it moving forward.”
Target Rate
Canada’s currency fell 0.3% to C$1.1198 per U.S. dollar Tuesday in Toronto, after touching C$1.1220, the weakest since March 24. One Canadian dollar buys 89.30 U.S. cents. The loonie has weakened about 8% since Poloz took over from Carney in June 2013.
The Bank of Canada has frozen its key lending rate since September 2010, the longest pause since the 1950s. The central bank’s key interest rate will probably remain at 1% until the second half of next year, according to economists surveyed by Bloomberg News.
Devlin said Canadian housing prices may be 10% to 20% overvalued and low interest rates may spur price levels to as much as 30% when adjusted for inflation, opening the door to a sharp decline.
“Then you have a swathe of people with negative equity on their house,” Devlin said. “You have all the kinds of problems we have down here in the U.S.”
quote:
Hawkish Bias
This will cause the Bank of Canada to renew warnings about potential interest rate increases in coming months, he said.
Poloz dropped such language from policy statements last October and instead focused on the possibility of low inflation slipping into deflation while stressing how an increase in exports was needed to sustain the recovery and identifying an elevated Canadian dollar as an obstacle to that.
Since Poloz surprised investors by dropping the hawkish bias almost a year ago, the loonie, as the Canadian dollar is nicknamed for the waterfowl on the C$1 coin, has declined about 8%.
That’s stoked inflation by making imported goods more expensive. Consumer price gains have been at or above the central bank’s target rate five straight months and the latest reading from August showed the core rate, which excludes certain volatile items, also above the 2% target.
The weaker currency has also boosted the exports Poloz has said the Canadian economic recovery depends on, with the country posting the widest merchandise trade surplus in almost six years in July.
quote:
Housing Gains
The Teranet-National Bank Home Price Index reached a record reading for August. Canadians’ ratio of debt to disposable income started inching up again in the second quarter after falling the two previous periods.
“The longer they let this go, the higher it goes, the more it will correct,” Devlin said. “If we get the kind of momentum in the short term, I think we’re going to see they’re going to have to start to recognize that and they’re going to turn more hawkish.”
Though Devlin doesn’t expect the central bank to start raising rates until later next year, the reintroduction of hawkish language will cause bond yields to rise as traders begin to price in a more aggressive rate-increase timeframe. That will cause bond values, particularly in longer dated securities, to fall as yields rise, he said.
“In the short term rates are going to go higher,” Devlin said. “You don’t fight the central bank too hard, but I do think they’ll have to recognize the data.”
look at this guy they put in charge since bill gross hosed off
BoC isn't going to set rates to control one sector of the economy. Ever.
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Oct 1, 2014 20:37
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- ocrumsprug
- Sep 23, 2010
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by LITERALLY AN ADMIN
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BoC isn't going to set rates to control one sector of the economy. Ever.
What about once real estate is 100% of the economy? What then smart guy?
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Oct 1, 2014 20:39
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- namaste friends
- Sep 18, 2004
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by Smythe
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What about once real estate is 100% of the economy? What then smart guy?
I will jump into my condo and travel to the housing event horizon and emerge as a hellrealtor. Like Sam Neill but with more cashmere sweater and black framed glasses and less cuts on my face.
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Oct 1, 2014 21:14
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- tagesschau
- Sep 1, 2006
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D&D: HASBARA SQUAD
THE SPEECH SUPPRESSOR
Remember: it's "antisemitic" to protest genocide as long as the targets are brown.
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In order to halt a bubble? Does the Bank of Canada secretly own a time machine?
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Oct 1, 2014 23:09
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://m.thestar.com/#/article/news...s_question.html
quote:
oronto Star
News

Campaign notebook: Real estate board president blasts journalist over commissions question
James Tumelty, senior camera operator for Citytv, asked a question about realtors’ fees. Board president Paul Etherington did not enjoy them.

SUSAN PIGG / TORONTO STAR
Toronto's land transfer tax and realtors fees were questioned during a news conference at the headquarters of the Toronto Real Estate Board.
Published on Oct 01 2014
Daniel DaleCITY HALL
Mayoral candidate Doug Ford (open Doug Ford's poilcard) held a Wednesday news conference at the headquarters of the Toronto Real Estate Board to discuss his plan to cut the land transfer tax by 60 per cent.
After Ford finished taking questions, the board’s chief government and public affairs officer, Von Palmer, stepped up to the microphone himself. Other board officials, including president Paul Etherington, watched from the side.
After various questions about Ford’s proposal, James Tumelty, senior camera operator for Citytv, calmly asked Palmer a series of questions about realtors’ commissions.
Etherington did not enjoy them.
A transcript of the three-man exchange, some of which was inaudible on tape:
Tumelty: “For all the reasons that you said the land transfer tax hurts seniors…and for the reason that real estate prices have grown considerably…should real estate commissions be reduced too?”
Palmer: “I don’t think that’s a topic of discussion.”
Tumelty: “That’s the lion’s share…it’s that real estate commission.”
Palmer: “Right. There are some who choose to attack realtors in this process. Realtors are not the problem.”
Tumelty: “I’m not attacking, just asking a question.”
Palmer: “Fair enough. But the homebuyer pays the tax. People don’t work for free, by the way. Realtors provide a service. You have a choice to use a realtor or not use a realtor. But let’s not run away from the facts, though: the homebuyer pays the tax. That is the problem, because those are the people that are hurt. So it’s not a question of commissions or what we give up. The question is who’s hurt by this tax and who benefits when you start to take it out.”
Tumelty: “Same idea when they don’t have to pay the real estate fees.”
Etherington (interjecting from side): “You know what? That’s an inappropriate question. Who pays for you. Let’s end this conversation now, thank you.”
Reporter: “Whoa, whoa, whoa, whoa. He’s allowed to ask a question.”
Etherington: “Thank you very much. Inappropriate competition question. Not appropriate for this. Thank you very much. “
Reporter: “Sir, who are — you’re regulating the press conferences? If he wants to ask a question he can ask a question.”
Etherington: “Not a question that might be anti-competitive. And it’s not a proper question for here. Thank you very much.”
Reporter: “Sir, who are you?”
Etherington: “I’m the president of the Toronto Real Estate Board, Paul Etherington.”
Crucify all REALTOR(tm)
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Oct 2, 2014 03:29
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- FrozenVent
- May 1, 2009
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The Boeing 737-200QC is the undisputed workhorse of the skies.
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For what it's worth, the president of an industry association holding an official association event in association space has legit legal resins not to want any discussion of fees to happen. The competition act is a bitch and a half, you don't want to risk even the appearance of collusion.
He totally hosed up how he handled that though.
And it was a pretty valid question. But I can understand why he panicked.
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Oct 2, 2014 04:38
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.cbc.ca/news/business/housing-market-a-bubble-set-to-burst-investment-expert-says-1.2784511
quote:
An Edmonton investment manager has a dire warning about the Canadian real estate market: a major correction is coming.
“The more that I researched it and the more I asked questions about it, the more convinced I became that we are in a significant bubble in Canada,” said Hilliard MacBeth, director of wealth management at Richardson GMP, in an interview on CBC’s The Exchange with Amanda Lang.
MacBeth makes that argument in his coming book, When the Bubble Bursts: Surviving the Canadian Real Estate Crash.
He says the Canadian real estate market shows all the classic signs of an asset bubble: a rapid rise in prices, feelings of regret expressed by those who feel they missed out on a buying opportunity, intense media coverage, and a broad fixation on the asset in question.
“Clients who have been with me for 30 years, in the last 10 years started to obsess about real estate,” MacBeth said.
Hard landing predicted
If the real estate market does decline, politicians and policymakers are hoping for a “soft landing,” in which prices level off gradually. MacBeth doesn’t think Canada will be so lucky.
Stephen Poloz sees high home prices as economic risk
High housing costs boost inequality, OECD tells Canada
“If we are in a bubble, as I’m convinced we are, then we can’t get out with a soft landing,” MacBeth said. “We have to have a hard landing, and a hard landing means that we have to go back to the trendline that was in place before the bubble started to appear.”
In this case, MacBeth says, a hard landing means prices could decline by between 40 per cent and 50 per cent, causing an economic recession.
“It probably would be a little worse than the early '90s, depending on how long it takes,” MacBeth said.
A market crash could be triggered by anything that affects the ability of first-time or investment buyers to afford a home, he said. That could include external economic factors, stricter lending rules imposed by Canada Mortgage and Housing Corp. or an interest rate hike that makes mortgages less affordable.
A house is not an investment
MacBeth is concerned that Canadians see their homes as a speculative investment.
“Think of it as a lifestyle choice,” MacBeth said.
“People should look at housing as where they live, as an alternative to paying rent, but certainly not expect any investment component. That’s a bit of a problem for baby boomers like myself, because a lot of us have a fairly large amount of equity in our homes,” and expect to use that equity to pay for retirement, he said.
Hilliard is not the only commentator predicting a crash, but so far, Canada's real estate market has defied those expectations, and has been rising since the mid-1990s.
Last week, Prime Minister Stephen Harper told a business audience in New York City that Canada is not facing a housing crisis. Bank of Canada Governor Stephen Poloz has acknowledged the risks in Canada's housing market, but believes a soft landing is likely.
welp
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Oct 2, 2014 06:00
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- VERTiG0
- Jul 11, 2001
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go move over bro
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Man selling book about crash wants to push more talk of crash, news at 11
i welcome it
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Oct 2, 2014 06:13
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- Rime
- Nov 2, 2011
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by Games Forum
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Man selling book about crash wants to push more talk of crash, news at 11
This is why I stopped trying to keep tabs on the overall collapse of society. While it's inevitable and slowly progressing, the sheer number of people who started trying to milk money out of idiots through fear mongering post-2008 has muddied the waters so as to make it impossible to find decent analysis anymore.
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Oct 2, 2014 07:16
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- Adbot
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ADBOT LOVES YOU
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May 26, 2024 22:57
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- Peugeot206
- Apr 9, 2002
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Vroom vroom
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http://www.vancouversun.com/opinion/columnists/Pete+McMartin+Vancouver+Lotus+Land+Lowest+Land/10253972/story.html
quote:
Pete McMartin: Vancouver — Lotus Land or Lowest Land?
Sagging incomes among city’s most educated raises questions about job quality
By Pete McMartin, Vancouver Sun columnist October 1, 2014
In Metropolitan Vancouver, the median wage for those with a bachelor's degree was $41,981: exactly $9,000 less than the national median.
Last week, Andy Yan, the researcher and urban planner with Bing Thom Architects, gave a talk at SFU’s downtown campus, during which he asked his audience a question.
Where, he asked, did they think Vancouver ranked among the country’s top 10 metropolitan areas in terms of median incomes for those between the ages of 25 to 55 with bachelor’s degrees or greater?
“It was the first time in my career of giving lectures,” Yan said, “when an audience gasped at the answer.”
The answer was:
Dead last.
And Vancouver wasn’t just last: It was last by a wide margin.
Median incomes for Vancouver’s most educated residents were so distant from the rest of the country, Yan said, that the city was “in a solar system all its own.”
“I was so surprised by the numbers myself,” Yan said, “that I had to run them three or four times to make sure they were right.”
The national median income in 2011 for those with bachelor’s degrees or better, according to the figures Yan received from Statistics Canada, was $50,981.
In Metropolitan Vancouver, it was $41,981: exactly $9,000 less than the national median.
The metropolitan area with the highest median income in the country was Ottawa: not surprisingly, since it’s a city that feeds well and long off the public teat. Its median income for those with a post-secondary education was $62,202: more than $20,000 above Vancouver’s median.
And on down the list it went — Calgary, Waterloo, Hamilton, Quebec City, Edmonton, Toronto, Winnipeg and Montreal — all, in descending order, with greater median incomes for their most highly educated populace. Montreal, which was ranked closest to Vancouver, had a median income for those with bachelor’s degrees of $47,276, or $5,295 more than here.
Metro Vancouver is among the most educated areas in all of Canada. Just over a third of Metro Vancouverites have a bachelor’s degree or above: for all of Canada, one in four do. Somehow, all that higher learning in Metro Vancouver isn’t translating into income.
“We have all this human capital,” Yan said. “Clearly, people are investing in their education. But why aren’t people fulfilling their potential?
“Why is Vancouver dead last out of those 10 (metropolitan areas)? That’s the perplexing thing. I don’t know.
“And the issue is, also, why aren’t we talking about this? We’re always on the top of lists for livability. But I’m kind of concerned (with the question) of, how do we get to the top of lists where we’re economically flourishing? Are people so willing to take an economic hit to live here? Or are we now going to lose our most talented (people) because they’re not going to stick around?”
Could this have something to do with the types of degrees students are taking here in Metro Vancouver?
“You mean, all those theatre arts degrees out there? I don’t think so, because similar spreads would occur in the other metropolitan areas, and they aren’t. And this is a metropolitan area with top flight schools. It’s a mystery, frankly.”
Perhaps, Yan suggested, it could have something to do with the nature of the economy here as opposed to other metropolitan areas. Alberta has an energy industry that creates a lot of high-paying jobs and attracts head offices. Ottawa has an ever-expanding government. Toronto, Montreal, Hamilton, even Winnipeg, have more manufacturing than Vancouver.
The jobs they produce for the most highly educated in those cities may be of a higher quality, Yan said, whereas Vancouver — which Yan said is now about 80 per cent service oriented — has created jobs that don’t pay as well. (Or as Yan joked in an email, “just feel blessed you are being served by some of the most educated baristas in the world.”)
Metro Vancouver is blessed with sectors that do create high quality jobs, of course. The port and airport are world class. Our universities are among the best in the world. The mining and forestry sectors produce good jobs. But is that enough? Has Metro’s economy developed a soft underbelly?
“It really talks to the issue not just of quantity of jobs but quality of jobs.
“In this municipal election, perhaps there should be a discussion not just about housing, but how do we pay for it? What are the incomes, what are the jobs that will lead us forward, and how do we create those in volume?”
There's a salary comparison chart on the web page that I can't upload in this post.
I don't know much about the Vancouver job market, but the last place ranking surprises me.
Anecdotal observation: Wealthy immigrants aside, I have never seen a place where so many people had 'nice' things. I guess it's not because of their salaries.
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Oct 2, 2014 18:05
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Sep 29, 2014 05:57
