The plan today was to provide a brief review of Atlantis before my “MLS Musings” post.  But then I got typing, as I often do, and the “brief” review just kept going!

By the time I got to 1,200 words, I realized I’d be saving the MLS Musings for next Friday.

This post does have at least one thing in common with the topic of real estate, however, and that’s the inherent negativity that exists in all reviews…


Was I really away on vacation?

It sure doesn’t feel like it…

The week after your vacation is always three times as busy as the week preceding the trip, and Atlantis feels like it was a year ago.

A reader asked me for a brief recap of the trip, but surely by now, you guys know nothing I say is brief.

Feedback, commentary, and opinions on hotels, resorts, restaurants, and almost everything in the service industry are almost always inherently negative, so while I will say, “I had a great time,” and “I would definitely go again,” let me regale you with my long list of complaints first.

If it bleeds, it leads.  And happy stories don’t make the news.  So why should a review of a glorious Caribbean resort be any different, right?

Let’s start from the very beginning…

Atlantis has a shuttle that picks you up at the airport and takes you directly to the resort, but as the parents of a 17-month-old child, we wondered, “Does the shuttle have child seats?”

The answer, of course, is no.

And as my wife was told on the phone, “You don’t need a child seat in Bahamas.  It’s not mandatory.”

Not mandatory.  But preferable?  This is supposed to be a 5-star resort; we were shocked that they’d encourage us to overlook the safety of our kids, but oh well.

We decided to hire another service to take us to and from the airport, partially because of the child-seat issue, but also so we could stop at a grocery store and liquor store before we hit the resort.  As I’ll explain later, that was a more important journey than we thought it would be.

Having taken the 7am flight, we arrived at the resort around 1pm, tired already, and looking forward to unpacking and getting settled.  We were told by the front desk, “Check-in isn’t until 4pm,” but I figured that was more of a general rule.  How many times have you got to a hotel or motel and they said, “Oh, actually, look – your room is ready”?

We wandered around the sprawling and intimidating resort for 90 minutes, then went back to the desk, only to be told, again, that our room wasn’t ready.  2:30pm?  Really?  The room wasn’t ready?

My wife was in that, “Please don’t do this again” space, hoping I’d get down with “island time” and relax a little.

When we went back to the desk at 3:45pm, and were told the room wasn’t ready, I just about lost it.  But then I remembered I was supposed to relax, so I did.  I relaxed against the wall next to the front desk, and stared at the clock.  For 13 minutes.  Until at 3:58pm, magically, the person at the front desk said, “Mr. Fleming?  Your room is ready.”

Our room wasn’t ready, however.  Not for habitation.

We opened the front door, and like a punch in the face, the smell of cleaning products hit us.

The carpet was damp.  It was clear that they had put a lot of effort into cleaning the room, I’ll give them that.  But nothing was dry.  It was like a steam room, and you could see moisture on every surface.  Even the TV had streaks from cleaning products.

We explored the resort a little more, and soon realized that the “perfect resort for kids” had no ramps for strollers, and only three elevators.  The entire resort is full of husband-and-wife teams, carrying their strollers down the stairs like contestants on American Gladiators.

The resort is full of these little shacks that serve light and healthy meals like hamburgers, nachos and cheese, pizza, french fries, and hot dogs, but looking for something a little more our speed for the first night, and hoping to get out of the sweltering heat, we asked if there was anywhere we could just sit down?

Go to Mosaic, we were told, and so we did.

Hiking up and down paths that seemed to lead nowhere, with positively no idea where we were going (“up there, right, then left, then right,” is what we were told), we found Mosaic after about a half hour.

Once inside the beautiful, air-conditioned restaurant that didn’t have a single person inside, we were quite relieved to say the least.  It was exactly what we wanted after a long day of travel, and forced walking.  Just a nice, cool place to grab a quick bite and then get back to the room to put our daughter to bed.

Little did I know, the restaurant opened at 5:30pm.  We arrived at 5:31pm.

My wife and I took turns going to the massive buffet, looking for what our daughter could, would, should eat, and helping ourselves as well.

We were probably in there for twenty minutes, and when we asked for the bill, the waitress looked at us a little funny.

A few minutes later when I opened the billfold, I realized why.

$144 U.S.

For two people, because children under 2-years-old eat free.

My fault, 100%.  No question about it.

We were like lambs to the slaughter; walking inside and sitting down without inquiring about the price.  I probably wouldn’t have left, had I known this was an “all-you-can-eat” buffet at $72 USD per person, since I was so tired I’d have likely just said, “Screw it, let’s do it.”  But I sure wouldn’t have been caught off-guard!

I signed for a $15 tip, which I actually felt bad for, because it’s so cheap!  Barely over 10%, I thought.  But having been there for 20 minutes, and since the waitress only sat us down and gave us glasses of water, I tried to justify it in my mind.

I would soon learn what you guys already know: that there’s an automatic 15% gratuity on EVERYTHING on the resort.  Not to mention the 7.5% vacation tax.

22.5% added to every bill.  Even something as “cheap” as a $5 bottle of water comes with the 22.5% addition.

We left Mosaic feeling stupid.  Almost $200 Canadian for a twenty-minute meal.

My mother and I have this saying about vacations, and it goes like this, “Start spending.”

On vacation?  Start spending.

If you’re going to do it, do it right.  You’re away from home, you’ve earned this, you saved for this – so enjoy it.  Just start spending!

And after shelling out $200 for one plate of food on the first night, I figured, “What the hell, it is what it is.”

The next morning, however, I made another discovery regarding price, and this one didn’t sit quite as well with me.

It seems that all the “cheaper” restaurants on the island are of the all-you-can-eat variety.

Meaning that if you want breakfast at Mosaic or Poseidon’s Table, you’re paying $41 USD per person.

Sorry guys, I can’t do it.

I’m not cheap, and I’m not poor.  But I can’t do it.  I can’t pay $106 every morning for breakfast for my wife and myself.  I simply refuse.

The problem was, they didn’t have anywhere you could avoid the all-you-can-eat money-grab.

I’d have gladly paid $20 for two eggs on a piece of toast, but that option was nowhere to be found.

We ended up getting bagels and/or Starbucks-style cheese-croissant-bacon-thingees from the coffee shop, which along with a coffee, ran our total to about $30 per morning.

Thankfully, all the food we had bought at the grocery store for our daughter – fresh fruits and veggies, Cheerios, et al, was able to help one of us avoid gaining 6% in total body mass over the course of the trip.

I don’t know if Atlantis styles their all-you-can-eat restaurants around the American obsession with being fat, or the best way to overcharge people, but either way, the results were felt.

On the first night when we went to fill the bath for Maya, we discovered that the faucet didn’t work.  It let out a trickle of water that I calculated would have taken 8 hours to fill the tub.  So I took out the ice bucket, filled it with lukewarm water, and dumped it into the tub.

I repeated this act twenty-six additional times.

And then did so for the entire trip.  Twenty-seven buckets per night, for seven nights.  I filled the ice bucket 189 times in total.

We rented a “suite” at Atlantis, that’s essentially a 1-bedroom with a living room, so that we could have Maya sleep in a crib in the living room while we slept in the bedroom.  The pocket sliding-doors that separated the living room from the bedroom, however, did not close.

So every night when we went to bed there was a 24-inch gap that allowed noise to transfer, and thus if we wanted to be inside, we had to remain silent to avoid waking the little bug up.  We ended up drinking on our terrace every night, watching the people below – without kids, party the way we used to.  Oh, we made that observation more than a few times!  It’s just not the same with kids, is it?

The next day we decided to check out “Dolphin Cay,” which is pretty much as it sounds; a large man-made lagoon with a pack of cute-as-can-be dolphins, that kids of all ages would love.  It’s $400 USD per person to swim with the dolphins, but we were told by many on the island that you can go and watch for free.

Free?  Is anything free at Atlantis?

Imagine my surprise when we walked up to Dolphin Cay and found a swarm of people standing behind a fence that was 700 feet from any dolphin, and yet some people were on the sand, on the other side of the fence, a little closer.

Want to walk out onto the sand for a better look?

That’s $17 USD per person.

I couldn’t stomach it.

$51 for the three of us is nothing, and I’d gladly pay it to see one smile on my daughter’s face.  But I was just so unprepared for how this entire resort is built around picking people up, turning them upside down, and shaking them until every last penny falls out.

The goddam umbreallas on the beach, necessary to keep my kid from baking in the sun, were $20 to rent.

And while I don’t want to complain about the $295 USD per round of golf at Ocean Club, since that’s a personal choice I made, it bears mentioning.

So what else can I complain about?

Not once during the trip did the cleaning staff replace our shampoo and soap, so I basically grew dreadlocks.  Thank god for the bar of Dove I brought from Toronto.  I’ve never liked hotel soap.

The cleaning staff also didn’t empty our garbage, so each morning we’d take that down with us and throw it out ourselves.

We checked out the Atlantis “Kid’s Club” one afternoon, only to find it wasn’t a place where our kid could play, but rather a drop-off centre.  I mentioned in my post from two weeks ago how our daughter wouldn’t be allowed to play, given she was under 3-years-old, but I didn’t realize this was for kids only.

We asked if we could take a look anyways, and the guy at the desk said, “Adults aren’t allowed back there.”  I smiled, and said, “I’m not looking to build a Lego castle, I just wanted to see what’s behind the curtain.”  He replied, “It’s not possible, sir.”

I pictured a dozen kids behind that curtain, all sitting in front of cute little sewing machines, making textiles to be shipped out from the nearest port…

Call me crazy, but the idea of dropping my child off at this fine establishment for an extended period of time didn’t sit well with me.  Maybe, as a huge Liam Neeson fan, I’ve seen Taken a few too many times.  Tell me if I need to cut the cord here.

In the end, we made our own good time, as one has to do.

I realize just how much this reeks of “first world problem’s,” but, well, we live in the first world.  So this is my review.

The irony is, I had an amazing time.  So did my wife.  And our daughter?  I’ve never seen her so happy.

As I said at the onset, most reviews are negative.  People are far more likely to put the effort into a complaint than they are to put the effort into a “job well done.”

I’ve been to two Sandals resorts, and those trips were flawless.  So I’m not letting Atlantis completely off the hook, but I will admit that many of the negatives we experienced at Atlantis are things we would filter out next time.

Atlantis comes with a massive learning curve, and many of you wrote comments on my blog two weeks ago to that effect.  In fact, some of your comments helped us to learn what’s what!

This trip with our daughter was a huge “success.”

Last summer, we went to the same cottage that we’d been to four times previously over Canada Day long weekend, and it just didn’t work with Maya, who was then 7-months-old.  One month later, we went to Idaho, and soon learned that it wasn’t the right vacation for an 8-month-old child.

But Atlantis was perfect for her.  She played in the kiddie pool for hours every day, and in the sand on the beach.

She loved to explore the grounds no matter where we went.

And she spent hours watching the fish, sharks, and turtles from the various aquariums and outdoor ponds.

Seven days, and she never fussed.  She didn’t cry on either plane ride, she went right to sleep every night at 7pm, and slept for 12 hours.  She never stopped smiling the entire trip, and every day was a new experience for her.

Yes, Atlantis is expensive.

Yes, Atlantis is large, awkward, and has no accessiblity for strollers.

Yes, the room and the service disappionted us.

But as I have come to learn in the past year, the needs and well-being of my child now come far before my own.  This wasn’t a vacation for David and Jenna; it was an experience for Maya, and for the Fleming family as a unit.

I’m sure there are other, better, cheaper, closer, quieter, cleaner, sexier resorts out there, but looking at the photos and the smile on my daughter’s face in each of them, I wouldn’t change a thing.

Have a great weekend, everybody!


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  1. Kyle says:

    Regarding point 8, the vast majority of mortgages are still financed through a bank. Alt is a very small percentage, and if loans are performing, i don’t expect the alt lenders (not referring to the MICs and sharks, but they are an even tinier percentage) to not renew. Overall i don’t see this having a big effect.

    1. Housing Bear says:

      Just going to reply to a few of you comments here.

      Look up Laurentian Bank, Home Capital, Fortress – all have admitted to mortgage fraud over the past year. (Still playing out)

      BOC wont raise if we are hitting a recession – (Despite the fact they have less impact on mortgage rates then you think) I agree, however we are already in a recession, which you already agreed with me would be enough to have an impact on housing market.

      Boomers who to need to sell at some point for retirement (especially those that lived through the late 80s/90s bubble) may not wish to hold out for 10-15 years if prices start to go down. They will still have a lot of equity and may wish to pull out what they can…….. Or just keep working until they are 70-75. I guess some people are work aholics.

      Rents are ultimately tied to incomes (not what you can borrow from the bank or familly) if rents raise to far then what is the average person’s choice. 1. Move 2. Live with familly or friends 3. Live in a shelter. 4. Live on the streets. Our natural birth rates are declining, and immigrants may start to going to another country or city if they would never be able to afford housing. In smaller towns you can probably get by on wellfare. Sounds like a better deal to me then working 80 hours a week to live in a shelter. Just my opinion though

      1. Housing Bear says:

        I get people do have an attachment to their family home. In this case of speculators/investors – couldn’t “Don’t fall in love with your stock” be changed to “don’t fall in love with your investment property”

      2. Kyle says:

        I’m well aware of the news about the mortgage frauds you mentioned but how many of HCG and Laurentian’s borrowers have been forced to sell? Far as i can tell even their fraudulent mortgages are performing. Fortress is syndicated mortgage broker, which is completely different than residential mortgages.

        Can you share your source for Canada being in a recession right now?

        1. Housing bear says:

          You point out that rate increases or inflation wouldn’t happen if we were already in a recession. In regards to points 1-2-3 I made below. I just said fair enough, but we are already in a recession at that point which we both think would impact house prices. No?

          Those fraudsters I don’t believe have been forced to sell yet (why I said still playing out) . In my opinion however, those that have to lie about their incomes are probably more vulnerable to raising rates or a recession. What do you think?

          1. Housing bear says:

            Even fraudsters don’t default or go bust in a rising market. You sell and walk away with your gains if push comes to shove.

          2. Kyle says:

            Sorry i misunderstood.

            To clarify what i was saying is that, rate increases will only happen if there is the spectre of inflation and a strong economy. It does not require us to be in recession for inflation to be tame and our economy to be growing at less than 2%. As far as the BoC following the Fed, they can only raise if inflation is on the rise. But if our economy is weak, they’d prefer a weak Canadian dollar to boost exports.

  2. Kyle says:

    By the way has anyone seen today’s ZOLO stats?

    While the first half of the year 2018 was underperforming 2017, the gap has been narrowing since August 2017. In the City of Toronto for May 7th:

    Avg Sold Price: 908K
    Mothly Change: 13.7%
    Qtrly Change: 16.1%
    Yrly Change: (2.8%)

    To steal a line from Amy Winehouse, I foresee May Y/Y in 416 to be Back to Black. Will be very interesting to watch the remainder of the Spring market.

    1. Chris says:

      TREB May 2017 Average Price was $862,149.

      In order to hit 0% YoY, we would need to see average price grow 7.2% from April 2018’s figure of $804,584.

      Not impossible, but not sure I would bet on it either.

  3. Kyle says:

    To Housing Bear

    HELOCs can be converted to mortgages at any time, so to my mind i see no reason to differentiate them. But i think we can all agree rates will likely rise, the question is by how much and how fast.

    Let’s look at a worse case and say the BOC raises rates right to that neutral level of 2.5% all in one go this July (i.e. a 1.25% interest rate hike) and the whole term structure shifts up in parallel. First let’s agree that the BOC raising 1.25% in one go is super improbable, but for the sake of argument let’s see how much that increases payments if mortgages go up to 4.34% (1.25% more than today’s 5 yr fixed rate) from the average contract rate of 2.69% on all mortgages. That equates to $87 / month per $100K. IMO, this is not going to force people out of their homes, not even close. In fact given how i see people spend money in this City, i don’t even think this is going to register to half of them. There is just so much fat in today’s household budgets to cut, before people actually start to feel real pain.

    And as a PSA, i will now share a survival guide, called “How to not end up homeless, if a super improbable rate hike of 1.25% occurs” for anyone who fears ending up in this situation:
    5. Switch from lattes to drip coffee. Estimated savings $66/month
    4. Cut your cable and get Netflix. Estimated savings $50/month
    3. Clean your own place. Estimated savings $200/month
    2. Walk your own dog. Estimated savings $400/month
    1. Cut your Instagram account. Estimated savings $1000-2000/month. You’re probably thinking huh? But think about why else do people pay $100’s and 100’s per month, getting mani’ed, pedi’ed, buffed, scrubbed, tanned, tweezed, waxed, blown out, micro-bladed, toned, ombre’ed, trimmed, shaved, beard waxed, etc? And why do you think people line up to throw perfectly good money at incredibly stupid stuff like ice cream that looks like dirt, cheesecake with the consistency of damp magic eraser or the latest smart phone? One reason – to post pictures on the internet to get likes from their followers.

    So while this list is obviously facetious, the reality isn’t that far off from what i’ve presented. $87/month per 100K will cause some people pain, but when push comes to shove, they will find something to sacrifice to stay in their homes, until their incomes eventually rise. 38% of mortgage holders are making some form of prepayment or taking steps to accelerate their mortgage termination. 65% are making contributions to their RRSP or TFSA. Others will fritter away less or find side hustles or take on a room-mate. The reality is your worse case scenario is frankly not really bad all that bad.

    1. Housing bear says:

      If you roll your heloc over to your mortgage. You gofrom paying just interest to interest and principal on the full amount (lower rate but will up payments). Again as reported in August of last year, housing costs take up 70% of household income in the GTA. Will take more if debt gets more expensive.

      When 70% of your income goes to shelter How many of these people are drinking lates everyday? How many millenials still buy cable? Manis pedis etc without debt

      On 400k of debt that equals over 32O a month. Do we give any weight to studies by MNP that say 50% of respondents are 200 away from not meeting their bills each month. 10% say less than a 100. And 32% say they are already behind

      MNP is in debt consolidation and insolvencies (do better with higher insolvencies so would have an incentive to overstate this) but how fabricated can it be

      1. Kyle says:

        TBH, I don’t give any weight at all to sentimental surveys, where they ask a question that elicits a knee jerk response. Now if they actually crunched the respondents financial situations and then came up with that conclusion, that would be very different.

        It would be like surveying a bunch of fiscal conservatives with the question, can you afford to pay more taxes. 100% will say, “absolutely not, i already pay too much”. The answer you get depends more on how they feel about the question, not whether they can actually afford it.

    2. Housing bear says:

      also add another 2% (stress test) and the person who youbhope will cash you out now has to prove the could handle an addition 600 a month on top of that.

      The worst case scenario is that inflation picks up and rates go a lot higher than just the BOCs target

      1. Kyle says:

        So while we can agree that the hypotheticals you’ve postulated are possible. I think it comes down to us disagreeing on how probable they are. In my view, your hypotheses, rest on events which individually *may* have moderate probability, but need to be combined to get the outcome you predict. For example: IF rates go up then payments go up. And <b.IF payments go up many people may be unable to make their payments. And IF many people don’t make their payments they may be forced to sell. And IF those people sell and B20 holds back demand therefore prices will fall.

        However in statistics when you have nested “ifs”, the probability shrinks exponentially with each successive “if”. Basically you have spelled out one possible path, among an infinite number. If any of those “ifs” don’t hold then your path becomes nullified. IMO, the second IF already seems very low probability in my view. So TBH, what you’ve spelled out seems more like a tail risk (which i acknowledge exists), but i certainly wouldn’t consider it to be a base case.

        1. Housing Bear says:

          Great post, realize the difference in our thinking now. I actually believe that any of the following items can lead to a downturn, and while each may have a low to moderate probability individually, there is a larger probability that at least ONE of the triggers could happen. I then believe that anyone of these triggers could start a chain reaction that then increases the probability of another event happen. The magnitude of the spiral or chain events will be dependent on how much bad money is in the system, or how much we have to bleed out to get back to a healthier economy.

          My line of thinking is more that (more detailled below)
          1- flat prices will cause a recession.
          2- a recession will cause prices to fall and an increase in defaults. Prices falling will cause more default. Defaults will lead to the banks further tightening credit. Reducing borrowing and causing prices to fall further, leading to a deeper an more prolonged recession…causing prices to continue falling
          3- Higher rates will lead to less credit. Less credit will lead flat or declining prices which will lead to recession. Back to point two.
          4 – An increase in defaults will cause credit conditions to tighten further. Back to point 3
          5 – If people panic and rush for the exits we will at minimum see flat prices, if not declining right?. This brings us back to point 1

          The above is only averted if prices continue to rise. For prices to continue rising we need the next wave of borrows to be able to borrow more money than the previous ones. Sounds a bit like a ponzi scheme doesnt it? B-20 and higher rates will make this very difficult..

          Potential triggers in more detail.
          1. Flat prices would lead to a reduction in future investment and cause a RE industry led recession (though on its own would not be that severe). A lot of Ontario’s economic growth over the past decade has come from FIRE (finance, investment, RE etc) related industry. BUT how many individuals in the industry may have issues paying debt if their income is cut or they lose their job?
          2. A reduction in sales (even with flat prices) will lead to a pay cut for a lot of those in the industry that are dependent on transaction volumes. Agents, staging companies, lawyers etc….. Do any of these individuals have bad debt? The article Chris shared talks about John the RE agents who lost his shirt. Do any of these individuals rush to sell?
          3. Interest rates – Will they continue to go up and how high? Can we assume that at least a couple households over indulged and might be stressed to the very max at current rates? How far does this rabbit hole go. Does anyone in this group rush to sell? That may be answered by the 47% renewing this year.
          4. Higher rates also impact businesses. – Do higher debt costs in general slow down business investment and job growth…… This is usually the whole point of monetary stimulus, that is to stimulate the economy.
          5. Even if the bulk of households can manage their payments. Does that $87/ 100k of debt not pull money out of other areas of the economy? How many people who work in the latte, avacado toast, mani/pedi industry for example own homes? (smaller industry as a whole then FIRE, don’t know think it could cause a recession on its own) Do people in these industries that have homes and large debt just rush to sell?
          6. If prices stay flat, the owners that maybe have cut their expenses to the bare bone may not feel as happy doing so when they do not see the annual appreciation anymore……… I’d be fine to have drip coffee and not be able to go out to the bar with friends if the sacrifice meant huge annual gains to my net worth. If prices were going no where it might start to get a bit more depressing, at least for a few………If prices started to tumble it could be absolutely devastating. Especially if more and more of money is now going to debt due to raising rates while you are also watching your net worth fall. Do any of them just decide to sell?
          7. Baby boomers with big expensive homes. Are any of them counting on their home equity to fund their retirement? Who are they going to sell to? Can the next wave of buyers cash them out with higher interest rates and B-20? 200k of HELOC being service at $725 a month might seem fine while you are still working and expecting to be able to pull 1.3 million out in equity a few years down the road. What if prices start to drop? Do any of them rush to sell to protect their retirement nest egg? Does fear of loss replace fear of missing out?
          8. Alternative lenders – Usually provide secondary financing and sit behind the banks in terms of claim on the asset. Bank gets paid first. Also a lot of these loans are meant to be short term. Borrower wants to refi with the bank at a lower rate, lender wants their capital back to make a new high rate loan where they can slap some new service fees on it. If prices start to drop the alt lenders will be faced with this decision on renewal. “This borrower never intended to pay back a loan at this high of rate – Do I refuse to renew the loan, which could force a power of sale, or take my chances that prices will come back or if they do go bankrupt there will be enough equity left over for me to get paid back after the bank? If greed and fear kicks in, this could lead to alot of recent buyers being forced to rush and sell?
          9. If any of these groups rush to sell what will happen to prices?

          To summarize, I believe flat prices, higher rates, or any one cohort deciding to rush for the exit could then trigger all of these events happening………….

          1. Kyle says:

            I agree that any type of recession, has a moderate to high chance of causing real estate prices to fall, where i am not convinced is that flat real estate activity will lead to a recession. Falling back to 2016 levels is what i would consider flat (as we have now). But remember 2016 was nothing to sneeze at.

            Flat sales in my mind will lead to that component of GDP shrinking relative only to 2017, but not relative to normal historical levels. And since the 2017 mania was so short lived, i don’t think there was a whole lot of “overhang” built up in the industry to now sit idle.

            The other thing with real estate that is different than other sectors is that the winning’s accrue to relatively few. The top 5% of Agents get the vast majority of the commission, there are a few handfuls of people at the few handfuls of Developers that do really, really well. It doesn’t translate to masses and masses of people who now have to sell their homes.

          2. Chris says:

            “Falling back to 2016 levels is what i would consider flat (as we have now).”

            Sorry, are you referring to prices? Because we are certainly not flat with 2016 when it comes to sales activity. In fact, we’ve fallen below the sales activity seen in April of 2009.


          3. Kyle says:

            @ Housing Bear

            Regarding points 3, 4 and 5 about interest rates and slowing economy, i don’t see BOC continuing to hike if the economy is slowing. If what you postulate happens, inflation will be stagnant, and the BOC will stand pat or cut again, before risking a recession or stagflation.

          4. Kyle says:

            Regarding 6 and 7, i quite frankly have observed the opposite in my time. When things get tough or uncertain owners stop selling. From what i’ve noticed the mental anchoring by home owners is far stronger than the mental anchoring with any other asset. The old adage, “don’t fall in love with a stock”, doesn’t apply to home owners, they all fall in love with their homes (for obvious reasons). And unless they are forced to, they won’t sell for less than they think it’s worth.

          5. Chris says:

            Agreed that BOC won’t continue to raise if the economy is slowing. But a Canadian recession won’t dissuade Jay Powell and the Fed from raising interest rates south of the border.

            As to not selling unless forced to, absolutely agree. Most people will hold on to try and get the price they think it’s worth. Yet not all will be able to hold out. For whatever reason, be it illness, job loss, divorce, etc., they may be forced to sell their home and take less. Especially so if the home is not their primary residence.

            And now, particularly in a low sales volume environment (as I pointed out to you above), these sales by those forced to sell influences the value of all other homes in the area, when others look at comp. sales.

          6. Housing Bear says:

            Forgot a big cohort (probably the most important too) , and ties into your flat pricing/ recession comment as well as normal market 2016 stuff.

            Speculators, you know those folks who own multiple properties but can only actually live in one of them (way more exposure to RE and debt). – In condo sector 48% of condos taken possession of in 2017 were to “investors”. 44% of which lose money month over month and therefor are only chasing capital gains. If completed in 2017, means it bought pre con sometime between 2013-2015, how many more jumped in for the precon sales in 2016-2017?.

            In housing the areas with the highest concentration of “investors” are now the ones that have had the largest correction so far. New Market, Vaughn, Richmond Hill for example. Most concentrated was 22% of sales between 2012-2016 In first quarter of 2017, just under 17% of total sales of SFH were to investors for all of GTA who on average were short 1650 a month if renting out. Also chasing appreciation……. If appreciation stops (flat prices) who wants to be losing money every month? Why buy a stock that has a negative yielding dividend and no appreciation? Especially when that negative yield can potentially get higher and higher (raising rates). On any other investment a worst yield usually results in a lower price. Will speculators stay in the market. Do they all rush to sell?

            In SFH that means fewer sales. Number of RE agents has tripled in GTA over last ten years for example. Also, less new loans for banks. People who are employed by house flippers lose their jobs. Home Depot gets way fewer sales. Subcontractors lose clients and work. Permits and sales tax do not get collected by city. They have less to spend for city services and jobs. Plus your probably get a lot of supply hitting the market.

            For condos it scares me that we have record levels of supply coming to market over the next few years (YOY) which were presold during the crazy 2016-2017 period. How many investors in these buildings? I’d guess more than 48%. Rents would need to rise by an additional 17% over next four years for these investors to break even on a monthly basis assuming 20% down and no interest rate increases. With a 1% interest increase rents need to rise by 28%. Thats 7% annually while all current buildings being rented out are subject to rent control increases. How many peoples jobs are tied to condo construction? (builders, suppliers, transport, etc)…………… I sure see a lot of cranes in the sky.

            You should search the “4 stages of the Real Estate Cycle” Pattern that has held true time and time again. Maybe this time will be different.

            Flat prices might also make some think twice about further leveraging their home via HELOC – Some use this debt for additional RE investment and or home renovations….. a reduction here would further the impact some of the issues mentioned above. Others use this debt for day to day consumption. Retail, auto, travel ETC.

          7. Housing Bear says:

            BOC will hold as long as possible but our lending institutions may be forced to raise rents anyway because of increasing yields in the bond market. When US fed raises rates, all debts get more expensive. The FED is also starting to sell off a bunch of bonds from the good old QE days which could lead to too much bond supply hitting the market. This will further increase yields. All independent from the BOC.

            If BOC holds back from the FED for too long our currency will devalue. (Sweden’s currency has falling 10% this year already because they have kept negative rates)…………….If this goes on for too long you can risk an argentina situation. If it gets really out of hand think Venezuela

          8. Housing Bear says:

            A devalued currency leads to higher prices for everything we import. (same thing as inflation)

          9. Housing Bear says:

            And all the investors that bought pre con in 2016-2017 did so before B-20 came out……….. Hopefully they didn’t max out what they thought they would be able to borrow to get in.

          10. Kyle says:

            The speculators/investors are not necessarily “losing money” every month without appreciation. They may be cash flow negative, but that is not the same as losing money. A portion of their rent collected goes to principal repayment which goes to equity.

            As a natural counter balance, so long as the population keeps growing people need to live somewhere, and if end users aren’t buying or are forced to sell then they’re renting. Which drives rents higher, restoring the investor’s proposition.

            I’m not familiar with the dynamics of New Market or Richmond Hill, but i believe that is unique to those regions. People who bought precon condos in 2013 – 2015 at $600/ sq ft are now getting astronomical rents in 2018:

            “Average monthly rents in Canada’s biggest city surged 10.7 per cent in the first quarter from a year earlier to $2,206, according to Urbanation Inc. That’s the second-biggest increase since the firm started tracking the data in 2010, surpassed only by the 11.5-per-cent jump in the third quarter of last year.

            Part of the reason is simple supply and demand: Workers are flowing to Toronto for its booming tech and financial-services industries and competing for a scarcity of available units. At the same time, stricter mortgage-lending regulations and escalating condo prices are pushing potential buyers out of the purchase market and into rentals.”

          11. Chris says:

            “While Urbanation’s data is bad news for renters, there is a silver lining in the numbers. Based on the company’s calculations, it’s a much better financial move to rent than to buy at the moment.

            That’s because based on current mortgage rates and assuming the buyer can come up with 20 per cent down up front, that same average condo would cost $170 more every month in ownership costs that it would be able to generate in rental income.

            So a standard buyer on that theoretical condo would be under water every month, and banking solely on making up for it by selling for a higher price down the line.”


  4. Appraiser says:

    “I find it interesting how many real estate analysts (professional and armchair) really struggle to understand how house prices in the GTA can be stable even though sales are down and inventory is up over last year.”

    John Pasalis, May 4, 2018.

    1. Chris says:

      “Well played, but we are not seeing the same type of imbalance between supply and demand as they had in Phoenix. It’s still a sellers marker here – which is why prices are stable. Of course, it’s anyone’s guess how long that will last.”

      John Pasalis, May 4, 2018 in response to a reply on the tweet you quoted.

      Careful hitching your wagon to Pasalis. He’s not nearly as bullish as you are.

  5. Appraiser says:

    “Despite the YOY declines in home sales, the GTA is still a seller’s market and there are a lot of buyers sitting on the sidelines worried prices might fall further. I suspect we’ll see these buyers jump back in once the YOY numbers improve in 2 months.”

    John Pasalis, May 3, 2018

    1. Chris says:

      “Great to see @BMO chief economist Douglas Porter agree with one of the findings of my recent report – that despite the rapid decline in house prices last year, the GTA’s housing market still looks overvalued.”

      John Pasalis, April 16, 2018

    2. Ralph Cramdown says:

      Ahh, July! Always a popular time to list or buy Toronto SFH.

      1. Chris says:

        Oh, didn’t anyone tell you, Ralph? This time it’s different!

    3. Housing bear says:

      May will be the first month where there are no more B20 pre approvals kicking around. Depending on how may goes, and how many more stories come out of financial ruin between now and then. The circumstances may be present for a small bull trap in the fall. We could be up YOY in July or August. That is provided the banks are not forced to raise rates further before mid July by the bond market as July 2018 pre approvals will give you a bit more room to borrow until October (Stress test is based off of posted rate, not your actual rate). If May however is down MOM from April look out below. In any case I expect a full blown panic by next spring

      1. Housing bear says:

        Next spring at the latest

        1. Bal says:

          Housing bear when you are planning to buy? Or you are just gonna keep renting? By the way I ended up buying townhouse in Oakville…

          1. Housing bear says:

            Sold my detached just over a year ago. Renting ever since. If I’m right I think the time to buy again will be three to four years from now. By start of next year I think it will be obvious as to whether or not I’m right about the debt problem. If I am wrong I’ll jump back in sooner. If I’m wrong I do not see prices being up more than 5 percent from where they are now. If I’m right We could see another 30-40% drop.

          2. Housing bear says:

            Guess my advice really doesn’t matter if you already bought. If you can handle the debt payments on your townhouse and can wait it out for about 10-15 years (maybe longer) you will be fine

          3. bal says:

            i can still come out of deal …as it is conditional….i am so damn confused…can i talk to you…?

          4. bal says:

            i really need help today….as i am driving myself crazy….i cannot hold a house for 10 to 15 yrs..Most likely i am planning to hold for five years…..But if you think it is gonna come down 30% that is huge number…I will get killed very it possible i can talk to you…only if you feel comfortable…I am not a creep or anything…Just confused housebuyer

          5. Chris says:

            Bal, nobody can predict the future. We’re all just putting forward our best guesses here. I don’t think you should make such a big life decision based on advice from a stranger on the internet.

            I think you would be well served to seek out guidance from people you know and trust, who are knowledgeable in this arena. Talk to them, talk to your family, crunch some numbers, run some scenarios, think about how you would feel and act if different realities came to pass, and decide what is going to be right for you.

            Best of luck with whatever you decide to do.

          6. Housing bear says:

            As Chris said I could be completely wrong here. The reason I post on this site sometimes is so that some people at least get to hear the other side of the argument. Not really comfortable giving advice to an individual as everyone’s finances are different and so is their situation in life when it comes to housing. No one can say how far the drop will be. It depends on how much bad money and bad debt are in the system. Not being able to hold long term if a down cycle hits is bad money and bad debt in my opinion. Needing to use an alt lender to help you get your deposit together or to get the loan in the first place is bad debt 90% of the time.

            I believe the bull market is over. Credit taps are being tightened. This will cause the bad debt to surface to the top. Starting to see some of it already. Now is an extremely risky time to make a short term play or to buy secondary properties. (In GTA or GVA). Maybe a very short term play like finding a desperate seller, then re listing and being a bit more patient could work but this hard once all the transfer costs are factored in. If shit does hit the fan it might not be easy to find renters, and if even if you do you would also need them to pay enough to cover your costs, otherwise you could need be go live with family while you subsidize some renter. This depends what you paid, your income/ job security and rents in your area. If it’s bad recession you should also see if you could cover costs if rents were to fall by 10-20%.
            The safest plan B for someone buying today is the ability to potentially live there yourself for the long term to allow our markets to recover. If you can handle debt payments, can handle them at a higher future rate, maybe 2%-3% at some point over the loan, and have a safety net in case some in your household loses a job you should be fine. The fact you are so worried maybe means you can not handle this.Long term RE has mostly been a winner especially in larger and more important cities. GTA is the heart of Canada.

            That’s being said, If you post your number I can give you a call but Chris is right. You shouldn’t be taking advice from strangers on the internet. Especially for financial decisions that could set you back a decade.

          7. bal says:

            I understand housing bear…my number is 647-283-8475… one is giving me any advice and i need help and you seem very knowledgeable.

  6. Daniel says:

    David, i give a strong thumbs up to 7 stars on Grace Bay in Turks and Caicos. Walkable to a bunch of good restaurants, all teh rooms are suites which is key with the kiddies. The island has great service culture, is very safe, etc etc. Prior to kids i would have found it a little boring but i consider the ‘nothing to do’ aspect of it a bonus now.

    Last pro tip, get the travel in now, it’s not nearly as easy when they’re a little older.

  7. GinaTo says:

    Great post David, I really enjoyed it. You brought your keen analysis to a different topic! Yeah, vacations with kiddos are definitely very different. We went to Ottawa for 5 days on March Break with a 4 year old and a 4 month old baby (who had starting teething) and it was great! Our hotel was better than yours 😉 We visited places we would not have gone if it was just us two, but it was still very interesting (the Nature Museum is awesome) and our oldest had a great time. Happy kid, happy family!

  8. Ralph Cramdown says:

    Good story, David!

    A few holiday stories I loved —
    David Foster Wallace’s “A Supposedly Fun Thing I’ll Never do Again”
    A Rough Guide to Disney World

    And, uh, how to do the Bahamas on the cheap… “You can never go hungry in the Bahamas, mon!”

  9. Moonbeam! says:

    This was quite interesting to read. Yes you were warned by readers two weeks ago that Atlantis is very pricey…. so that turned out to be true. (Thanx for the shout-out: you’re on holidays, start spending!). And the flaws and complaints you described were valid.. But instead of being a sourpuss, you still found ways to enjoy your holiday, you saw that Jenna and Maya enjoyed it, and you all came back with good memories!
    And ultimately Atlantis will continue doing what it does, just like Disneyland does what it does.. and planeloads of families visit every week.

  10. Libertarian says:

    Thanks for the review David! I’m always curious to hear about different resorts. This should be mandatory reading for anyone going to, or even thinking of going to, Atlantis. Your last sentence applies to me – based on your review, I think there are other resorts that I would like better.

    It was nice to talk about something other than real estate for a second.

    1. @ Libertarian

      Tough crowd to please on here! Damned if I do, damned if I don’t. I was told in Wednesday’s blog by a few readers “stick to real estate.”

      I’ve always said that TRB is three things:

      T for Toronto – anything and everything to do with our city, including, to the chagrin of many, politics
      R for real estate – the primary focus of the blog is, and always will be, real estate
      B for blog – sometimes I want to vent, opine or share

      I’m pleased that you enjoyed today’s blog, as I definitely enjoyed sharing my experience.


      1. CB says:

        This grandma teared up at the end. So good job!

  11. Chris says:

    Ralph, a couple weeks ago, you mused that ” Nobody’s talking about the ongoing fallout from last spring.”

    Since then, there have been a few discussions here on the topic, as well as some mainstream media reporting on it.

    Well, one more article to add to the pile:

    And before appraiser chimes in to say that this is “old news whatever who cares”, etc., the article clearly states:

    “None of these transactions are the norm, but they serve as painful reminders of what happens when everyone—buyers, sellers, agents, lawyers—get caught up in a frenzied market.”

    1. Appraiser says:

      The only thing less relevant than yesterday’s news is a rehashed version of yesterdays news. Yawn.

      1. Chris says:

        Such a predictable response, appraiser. Yawn.

        If you’re not interested, there’s a very simple solution: don’t read the article.

        For others, like Ralph, who are interested, this article explores the stories of the actual people caught during this downturn.

        1. Appraiser says:

          Problem is I did read the article. For those who love gossipy stories and anecdotes – knock yourself out.

          Hey while we’re wallowing in yesteryear, you may want to re-read their 2013 ‘bestseller’ article about how the real estate market had crashed, and no one would be left unscathed. Boffo headlines to be sure. Macleans is the best.

          1. Chris says:

            Let me summarize your last paragraph:

            What about that time 5 years ago that another Maccleans writer was wrong?? Surely that means they’re wrong again today!!

            Questionable logic at best.

      2. FreeMoney says:

        “The only thing less relevant than yesterday’s news is a rehashed version of yesterday’s news.”

        But if yesterday’s news is irrelevant, that means today’s news will be irrelevant in 24 hours. So do you only watch CP24 just to make sure you’re never irrelevant? Or perhaps you were speaking metaphorically, in which case it’s really no help at all.

        1. Appraiser says:

          It’s an expression, defined “as a person or thing that is no longer of interest.”

    2. Housing Bear says:

      Obviously I have a very negative view of the market but this is just the tip of the iceberg. Now that the debt taps are turning off, people who jumped into the market naked are getting caught with their pants down………. Keep an eye out for stories like these over the next few months to get a true sense of where our RE markets and economy are headed. I suspect that more and more stories of bad decisions, bad debt along with fraud and shady behavior will surface to the top.

      Until the bad debts are cleared and we can see how exposed our banks are, nobody can say confidently that this correction is over. In the US it was the speculators and subprime borrowers who got caught first, but their bad decisions set off a chain reaction that took down a bunch of prime households as well.

      I throw you an olive branch appraiser. If by the end of 2018 we are not seeing three times as many stories about bad debt and bad loans as we are today I will shut up and stop posting on this blog.

      In the meantime…….FEAR THE DEBT TRAP

      1. Appraiser says:

        Constantly referring to the U.S. crash, as if it were in any way analogous to where we are in Canada today, is where all rational discussion on this matter ends.

        1. Chris says:

          Those who fail to learn from history are doomed to repeat it. Your constant outright dismissal of any comparison to or discussion of the United States seems a prime example of this. But hey, maybe you’re right, and it truly is different this time?

          1. Appraiser says:

            Just what the world needs, more clichés.

          2. Chris says:

            Ah, the classic second play from the appraiser strategy book. A short, curt couple of words.

            You need some new material. Yawn indeed.

        2. Housing Bear says:

          My premise as to why a crash is inevitable rests on a couple easy points that I will try to explain for you, if you can refute these, which I haven’t seen from any bulls, I will back off.

          1.Debt loads for many households are not sustainable. This makes any assets tied to those debts very vulnerable if the cost of debt goes up or there is a recession.
          2. In place like Ontario and BC (ground zero for housing/ debt bubbles) so much of your economy, and economic growth over the past decade has come from housing market. Even a long enough slowdown (fewer sales, flat prices) WOULD lead to a recession in Ontario or BC via a reduction in employment and investing from house flipping, construction, and all of those other related activities. People in these sectors that lose their job and own real estate with high debt levels will get wipped out.
          3. Bond yields have been rising in the US which forces our banks to raise rates because their borrowing costs now have to go up to stay competitive with US borrowers…….. the Bank of Canada has a lot less control and impact than most think.

          I will dissapear from this site if you can thus answer the following.
          1. How our debtloads will be sustainable even with raising rates or a recession
          2. How a slowdown in RE related economic activity would not lead to a recession in BC or Ontario
          3. How banks will be able to keep their rates low despite having to pay more for the money they need to borrow……. or how Canadian banks can stay competitive for raising capital while offering much less than other global counterparts.

          I like to use the US example of what can go wrong when too much economic activity and debt are tied to one industry and asset class when the credit cycle turns, but if you dont like this one I can provide numerous other examples. Recent ones include Spain, Ireland, Greece, UK, Iceland. More historic ones include Japan in the late 80s. The last Canadian example would be the GTA in early 1990s. But who knows maybe this time is different?

          I suspect the business schools will be talking about Canada, Sweden, Australia and China a decade from now.

          1. Chris says:

            Let me see if I can guess appraiser’s response.

            It’s not like him to actually address any of the points people raise. Usually he either slinks off with his tail between his legs, or retorts with a short, curt couple of words.

            “Completely amateurish analysis.”

            How close was I, appraiser??

          2. Housing Bear says:

            Well I guess that if you can prove that our debt loads are sustainable even with raising rates and/or a recession. There is no need to prove why we won’t have a recession or why the banks won’t continue to raise rates

            That being said, i think Appraiser will try something along the lines of…….

            Debt loads do not matter because of rich foreigners who dont declare income – could be some truth to those households, however CRA and our governments are starting to crack down on them (wont default but may reconsider their investments now that they cost them a lot more)…….Also the article Chris shared shows a lot of local Canadians who couldn’t handle their debts. There have been similar stories


            As pressured locals have to liquidate rich foreigners or money launders will step in right away, which will prevent the bleeding from spreading too far…….. Money laundering is now starting to get cracked down on hard. The taps in China were turned off before the fair housing plan came out. Again the individuals in that article were not bailed out by money launders or rich investors

          3. Appraiser says:

            Define sustainable and provide evidence other than slogans, that debt loads are not sustainable, because I’ve been hearing that for past decade too. Yet mortgage defaults are miniscule and a mere fraction of those in the U.S. Where is the “jingle mail” I used to hear so much about. Where is the spike in bankruptcies…?

            Oh yeah, I know…just around the corner.

            You guys need some new material.

          4. Chris says:

            “You guys need some new material.”

            Quite rich coming from you, for whom any and all subjects of disagreement are cast aside as “not relevant”, “amateurish”, or “fucking nonsense”, without a single substantive point of discussion.

            Great to see more and more people calling you out.

          5. Kyle says:

            I’m not sure what you mean when you say debt loads are not sustainable, but i presume you are talking about people renewing into higher rates and not being able to manage the new payments.

            Over the last 5 years the rules and the standards to qualify have been tightening exponentially. I often here people talk about how the banks are giving away free money, but those people clearly have not tried to qualify for a mortgage in the last 5 years. The reality is you can’t get a prime mortgage if you’re not a prime credit.

            Let’s look at how much payments will increase: The average mortgage rate on all mortgages is 2.96%
            Today you can get a five year fixed mortgage for 3.09%

            So how much does that 0.13% increase translate to in payments? About $7 / month for every 100K borrowed.

            Most of those renewing this year, will be people who last renewed 3-5 years ago. Over 3.-5 years most people’s incomes will have increased, therefore so too would their ability to support higher payments.

            IMO, nothing here indicates a massive crash is coming.

          6. Batalha says:

            Concern about debt levels is fine and dandy, but why is Canada (i.e. GTA/GVA) the “poster child” for runaway, unsustainable consumer debt? According to a 2017 report by SmartAsset, reported on CNBC, Californians’ debt-to-income ratio is a lofty 2.34, far above Canada’s 1.70 (as of this past March). Even residents of tenth-place Maryland shoulder $1.84 in debt for each greenback of income.

            I’m certainly not saying Canadians’ debt burden is not a potential powder keg, but if any business schools are talking about debt crashes a decade down the line, they’ll have to case a much wider net than the one you imply.

          7. Housing Bear says:

            Proof of household stress can be found in articles such as the one Chris posted. Dated may 4th, but you claim this is old and irrelevant. Do not have a live feed of someone in tears who just realized the state of their finances unfortunately.
            For sustainability, I look at price to income (4 is considered healthy, GTA is around ten right now) and then I like gross income to housing costs. The usual consensus is that your total housing payments should not exceed 25-35% of your monthly income. BOC says 30% but I think that’s too conservative and not reflective of major cities. Canadian average as of august 2017 was 45%. GVA and Toronto were both above 70%. Due to unprecedented FED policy (Cheap debt and plenty to go around….rates and QE) I think the latter measure is better for today because total debt is less important when you have extremely low rates. The former measure is helpful when trying to figure out how far off the norm you are. When these levels are surpassed such households are much more vulnerable to a negative economic event. Household debt to income is another measure that can be used but there really isn’t a set number that defines when you are in the danger zone. We were at 90% in 1990 right as the last bubble was blowing up and we are at 170% today. Examples of countries where these metrics were exceeded would include Japan, the US, Spain, Ireland etc…… but I am not sure if I am allowed to use these examples because you know….. that all happened in the past and is therefor irrelevant and old news.
            If I am allowed to reference those examples, then I would point out that the US household debt to income peaked at 130%. 1.30 dollars of debt for every dollar in income. Ours is currently at 170%. Why didn’t we blow up once we hit 130%? Well rates continued to trend downwards making the debt servicing more affordable, where as the Fed started raising rates in the US at this peak and the house of cards came tumbling down.

            Defaults and bankruptcies were at record lows for quite sometime in the past few years, but this is to be expected in a rising price environment. Think about it, if I buy too much house and the debt is too burdensome I just list and sell within a week, the debt payments go away and I feel like a genius because I probably walked away with some nice capital gains. When liquidity dries up and/or prices decline it is not so easy to get rid of your debts.

            In regards to those that have been predicting doom for the last 10 years for the same reasons I outline, I think their biggest mistake was underestimating how long the FED would manipulate the market for. Rates are now rising and QE is being unwound.

          8. Housing Bear says:

            To Kyle – I think the BOC is purposely trying to hold off on rate hikes as long as possible. 47% of mortage renew this year and I believe the plan is to try and let as many of such households renew at the lowest rate possible. Unfortunately pressure from the bond market is starting to pressure the actual banks to raise ahead of the BOC. A .13% hike in costs on the surface is very minor, I agree with you there. Any household can afford 7$ month/ 100k. Unfortunately that is not the only type of debt that is being squeezed right now. HELOCS are a different beast and they have grown quite substantially. In fact most banks up your HELOC as soon as you pay down a portion of your mortgage principal to continuously maintain that beautifyl 65% LTV. Great little way to move debt around if you over spend on your credit card one month. If you borrow over this amount then you have to start paying interest and principal to get it back to the 65% threshold…….. This could be ugly if your house gets reapraised at a lower amount and suddenly you have to start paying interest and principal on a chunk of debt that you were use to only paying interest on. That can be a massive jump. HELOCS have been very popular with the baby boomer gen. Where do you think the bank of mom and dad funds itself. In those scenarios banks also scale bank on how much they lend out in general to the people you are hoping will buy your asset if you have to rush and sell. Also, considering that 47% of mortgages are up for renewal this year, I do think we are in an environment where more and more people are taking out 1-2 year terms…… Usually get a lower rate this way…… Hope the bulk of people who did that didn’t max themselves out at not only record low rates but the lowest possible rate you can get in a record low rate environment.

            Back to baby boomers with HELOCS – They are a big x factor. I assume many of them are relying on their homes to fund their retirement. When they realize that their offspring won’t be able to cash them out at these prices how fast do they rush to sell.

            To Batalha.

            You are comparing specific cities (some of which i would argue are back in a bubble) with the average of Canada as a whole. The 170% you speak off is GTA and GVA households averaged out with the rest of the country. The BOC just came out yesterday to say that 8% of mortgage holders have a ratio of 350%+ and hold approximately 20% of all household debt……. If I had to take a wild guess, I would assume the bulk of the 8% reside in the GTA and GVA.

          9. Housing bear says:

            Also to Kyle,

            Forgot to add that by all indications coming from the BOC, they intend to keep raising rates to what they call neutral. 2.5 -3.5. That is unless the economy breaks before then so pick your poison for households. Yes as long as inflation doesn’t pick up it will be gradual. Most of the 47% should renew befor it goes up much from today. Looks like next hike in July.

          10. Whaaa? says:

            To Housing Bear

            Batalha cited state figures, not cities’. And the state with the highest debt levels, California, has roughly Canada’s population and GDP.

          11. Housing bear says:

            Good catch. Long post *states. Don’t really know much about the current state of the Us market so just taking those numbers at face value. From what I understand California’s prices are above what they were pre crisis by a fair margin. Any numbers I presented I can back up. Even still I would like to highlight that two of our regional markets, GTA and VGA have pulled out national average to 170. The states peaked at 130 national and several regions were in bubbles that corrected by more than 30 percent. I think the 350% number is more reflective of the GTA and VGA vs the numbers in California specifically.

          12. Ralph Cramdown says:

            You cannot show an optimist that a housing crash is inevitable. And thank goodness — many great things in our world were built by people whose optimism was unwarranted. Tell them that buying a cash flow negative condo is a really bad idea, and they’ll tell you about their cousin who did it and made $80,000 in two years. Tell them that crazy ratios like this usually end badly, and they’ll point to Australia.

            Economics is a reflexive system of individual, irrational actors. If something was an obvious, almost guaranteed loss, nobody would do it. But if not, some will. And once invested in the largest purchase they’ll ever make and surrounded by like-minded homeowners, the brain gets to rationalizing — selling, moving and renting would be a huge PITA (not to mention the wife’s views on the subject), and staying while the price declines a lot would be costly and psychically painful, so, brain, get rationalizing on why prices won’t go down!

            Bears are subject to the same irrationalities. And since the whole market moves on the basis of momentum and mass illusion, nobody can say with any certainty how long things can continue or when they’ll reverse. “Men go crazy in the congregations, they only get better one by one.”

          13. Ralph Cramdown says:

            SmartAsset study compares average (i.e. mean) debt to MEDIAN income.

          14. Housing bear says:

            All fair points Ralph. And again as I mentioned about household debt to disposable income doesn’t really have an agreed upon danger zone. Especially when it’s averaged out over a large region. In 1990 Canadian average was 0.90. Toronto had a 35 % correction. Today it is 1.70. Yet it was just reported that 20% of total household debt is held by only 8% of households. Those 8% are all above 3.50.

            The scariest number and the most telling to me is gross income to housing costs. BOC says it shouldn’t be more than 30%. That’s so that you have money for other things like food, emergencies, kids etc…GTA is around 70% GVA about 79%. It’s insane, instantly house poor. Who commits to over leveraging themselves like that? Someone who thinks that worse case scenario that they can just sell for a profit. Price to income shows how far prices need to revert or how high incomes have to climb for balance to be reached when the tides turn.

          15. Housing bear says:

            Prime example being “John” the real estate agent from that McCleans article Chris shared.

        3. BJA says:

          Appraiser: Dealing in black-and-whites (e.g. “constantly”, “in any way”, “all rational discussion on this matter ends”) works to undermine the credibility of your arguments. Perhaps try a little nuance/balance from time to time?

          1. Housing Bear says:

            No better than the “rights” activists who scream for equality to all…….. that is until you disagree with one of them. Once you disagree with them the substance of your argument means nothing and should be silenced…….. You are now some privileged oppressor who should not be taken seriously………..

          2. Appraiser says:

            Thanks for the debating tips, but I have no patience in arguing (for another decade) a case that has proven to be completely fruitless, and is based on illogical analogies.

          3. Chris says:

            No time for debating or arguing, but apparently lots of time for being a troll. Curious.

          4. Batalha says:


            Granted, the decade-long bearish case to which you refer has not yet materialized, but that does not a priori mean it won’t in the (near? medium-term?) future. People such as Housing Bear cite specific factors he feels spell potential danger. Rather than simply asserting that people who have said similar things in the past have thusfar been wrong, why not offer reasons why these factors will not, in your opinion, lead to the conclusion(s) Housing Bear has reached?

    3. Ralph Cramdown says:

      People think this stuff plays out quickly… proclaiming a V shaped recovery last fall, for example. But it plays out slowly. Think the correction is over? It may have only started.

      e.g. picture a Millennial A who has a friend B who was the first in their group to buy a GTA SFH, last spring. B now probably has negative net worth, and no amount of consolation about being in it for the long term is going to make B feel much better. A is going to be much more conservative about jumping in this spring or next, even at prices 15-30% lower (payments wouldn’t be that much lower due to rate increases). We won’t instantly go back to the level of bullishness engendered by a decade of steadily rising prices and falling rates.

      e.g. Home Capital. Reports next week? Will probably crow about borrowers having higher credit scores this quarter than a year ago. Bullish? Think it through: Those are borrowers who’d have been approved by A lenders last spring, but are now “forced into the arms of subprime lenders” as the mortgage industry would put it. Where are the borrowers HCG would have had to settle for last year? Borrowing from private lenders. Private lenders’ customers from last year? Not getting financed. And so it goes.