The Elusive Canadian Housing Bubble

[GRG55]

Re: Cracks Becoming Clearly Visible Now

Thanks, santafe2. Yes, I've seen the various data for housing markets (including the data for Amsterdam going back hundreds of years) and realize that prices ultimately mean revert. I was just offering one possible explanation why some people are buying into a bubble. It may not necessarily be driven by avarice or cluelessness. In the case of the two geologists, it might not have seemed too irrational as I would imagine the combined salaries of two geologists is quite handsome. And, perhaps most critically for humans, time lost waiting for a bubble to burst can never, ever be recovered.

I still remember seeing a 1920s shack (it looked more like a weathered, one-car garage) being sold in Palo Alto in the very early 2000s for $800,000. At the time, it was the most outrageous real estate I had ever seen in my life and I thought to myself that the buyer would most certainly suffer greatly for it. Joke's on me! Nearly 15 years later, $800,000 for a run-down, one-car garage in Palo Alto is looking like a bargain.

They graduated this spring. Both started their first jobs. They have no idea if these jobs and this city is where they will want to remain for the rest of their lives. They rush out and buy a house (actually they rush out and tie themselves down by paying fees to buy a big mortgage). For these two the time lost for the bubble to burst can be counted in months, and didn't exceed single digits. What can't be recovered is the money they will lose so early in their working career, because they are both out of work and the house will undoubtedly have to be sold into a falling market, unless the parents step in.

[Milton Kuo]

Re: Cracks Becoming Clearly Visible Now

MK, even the real estate bubbles in New York City and Paris moderate. It will happen in Vancouver as well. Paying rent in this sort of market hurts but buying a $500k home for $1M and watching it come back to $500k, will be devastating.
There are no great choices in Vancouver now but there are horrible choices. That is how investing works. There are times where all you can do is preserve as much capital as possible so you're ready when opportunity strikes.

Thanks, santafe2. Yes, I've seen the various data for housing markets (including the data for Amsterdam going back hundreds of years) and realize that prices ultimately mean revert. I was just offering one possible explanation why some people are buying into a bubble. It may not necessarily be driven by avarice or cluelessness. In the case of the two geologists, it might not have seemed too irrational as I would imagine the combined salaries of two geologists is quite handsome. And, perhaps most critically for humans, time lost waiting for a bubble to burst can never, ever be recovered.

I still remember seeing a 1920s shack (it looked more like a weathered, one-car garage) being sold in Palo Alto in the very early 2000s for $800,000. At the time, it was the most outrageous real estate I had ever seen in my life and I thought to myself that the buyer would most certainly suffer greatly for it. Joke's on me! Nearly 15 years later, $800,000 for a run-down, one-car garage in Palo Alto is looking like a bargain.

[santafe2]

Re: Cracks Becoming Clearly Visible Now

The problem with a housing bubble is that it is particularly painful waiting for the bubble to end. It's not necessarily the fact that everybody else appears to be making easy money flipping real estate and fires up an urge to speculate or keep up with the Joneses. The problem is that people must participate in a real estate bubble whether they like it or not: either buy housing at an elevated price or wait who knows how long for prices to normalize while putting up with ever-rising rents and less than desirable living quarters. People who have been waiting for Vancouver real estate to correct have been waiting for over a decade. I don't know about anyone else but I most certainly never imagined that the Vancouver real estate bubble would stay inflated this long and rise as high as it has. All the while, a decade has passed: humans don't live forever and 10 years of waiting with no reward and no reward in sight is a bitter pill to swallow.

Stock market bubble? No problem. Just don't buy stocks. It really won't affect your standard of living. Tulip bubble? Again, no problem. It won't affect your standard of living. A bubble in shelter? Unless you're a person who likes camping or paying rents that rise faster than wages, it's just highly unpleasant. And there's always the fear that the bubble won't pop or, if it does, the powers that be will throw everything and the kitchen sink to reflate it.

MK, even the real estate bubbles in New York City and Paris moderate. It will happen in Vancouver as well. Paying rent in this sort of market hurts but buying a $500k home for $1M and watching it come back to $500k, will be devastating.
There are no great choices in Vancouver now but there are horrible choices. That is how investing works. There are times where all you can do is preserve as much capital as possible so you're ready when opportunity strikes.

[Milton Kuo]

Re: Cracks Becoming Clearly Visible Now

The article is about the broader Canadian economy, but one paragraph in it seemed particularly appropriate on this thread. What is it that causes two new graduates to rush off and and buy a house at the top of the market and indebt themselves for decades? As I have posted before this is Canadians doing it to themselves. Blaming this sort of behaviour on "foreign buyers" is absurd.

The problem with a housing bubble is that it is particularly painful waiting for the bubble to end. It's not necessarily the fact that everybody else appears to be making easy money flipping real estate and fires up an urge to speculate or keep up with the Joneses. The problem is that people must participate in a real estate bubble whether they like it or not: either buy housing at an elevated price or wait who knows how long for prices to normalize while putting up with ever-rising rents and less than desirable living quarters. People who have been waiting for Vancouver real estate to correct have been waiting for over a decade. I don't know about anyone else but I most certainly never imagined that the Vancouver real estate bubble would stay inflated this long and rise as high as it has. All the while, a decade has passed: humans don't live forever and 10 years of waiting with no reward and no reward in sight is a bitter pill to swallow.

Stock market bubble? No problem. Just don't buy stocks. It really won't affect your standard of living. Tulip bubble? Again, no problem. It won't affect your standard of living. A bubble in shelter? Unless you're a person who likes camping or paying rents that rise faster than wages, it's just highly unpleasant. And there's always the fear that the bubble won't pop or, if it does, the powers that be will throw everything and the kitchen sink to reflate it.

[GRG55]

Re: Cracks Becoming Clearly Visible Now

It's like an evangelical religion. The belief in an afterlife of perpetually rising property prices has removed all fear of the evil debt devil.

The article is about the broader Canadian economy, but one paragraph in it seemed particularly appropriate on this thread. What is it that causes two new graduates to rush off and and buy a house at the top of the market and indebt themselves for decades? As I have posted before this is Canadians doing it to themselves. Blaming this sort of behaviour on "foreign buyers" is absurd.

The Oil Price Crash Is Taking a Heavy Toll On Canada. And the Worst Is Yet to Come

December 23, 2015 — 9:51 AM MST

Crime is rising, home prices are falling and food banks are overwhelmed in Calgary as job losses spread. And the worst isn’t yet over in the heart of Canada’s oil patch.

Some of the city’s largest employers are poised to cut more jobs in 2016 as they reduce spending for a second straight year, adding to an estimated 40,000 oil and natural gas positions lost across the nation since the crude price rout began 18 months ago.

“We all know someone who has lost a job,” Naheed Nenshi, the city’s mayor, said in a speech this month, lamenting the “funeral"-like atmosphere in the business community...

...The largest 23 Canadian producers are set to spend 11 percent less in 2016, a cut of about C$3.61 billion ($2.59 billion). That includes reductions by Canadian Natural Resources Ltd., Imperial Oil Ltd. and Cenovus Energy Inc., according to company forecasts and analyst estimates compiled by Bloomberg. It follows a 32 percent cut in 2015.

Jillian Berling-MacKenzie, 25, was one of the lucky few of her graduating geology class to secure full-time work this year, at oil company ConocoPhillips. She bought a house with her boyfriend, also a newly graduated geologist with a job, before they both became victims of the cuts. A friend’s company has provided some contract work paying slightly more than employment insurance as Berling-MacKenzie tries to land positions just about anywhere, seeing no postings she qualifies for in her field...

[GRG55]

Re: Cracks Becoming Clearly Visible Now

Oh, oh, guess we won't be shipping as many F-150s north in 2016. Q4 auto sales should begin to show some stress, at least in areas most dependent on higher commodity prices to create jobs.

Because of its large oil, mining and agriculture sectors tiny Alberta accounts for about 25% of all new pick-up trucks sold in Canada. F-150 sales numbers were in trouble the minute mineral prices started to head down.

Canada is an important export market for USA products (although you wouldn't know it listening to the NAFTA complainers).

Year-to-Date Exports (to end October 2015)

---	Total, All Countries	1,264.6	100.0%
---	Total, Top 15 Countries	922.3	72.9%
1	Canada	236.8	18.7%
2	Mexico	198.9	15.7%
3	China	95.4	7.5%
4	Japan	52.8	4.2%
5	United Kingdom	47.5	3.8%
6	Germany	41.8	3.3%
7	Korea, South	36.8	2.9%
8	Netherlands	33.8	2.7%
9	Hong Kong	30.8	2.4%
10	Belgium	28.7	2.3%
11	Brazil	27.0	2.1%
12	France	25.3	2.0%
13	Singapore	23.9	1.9%
14	Taiwan	21.9	1.7%
15	Australia	21.0	1.7%

[santafe2]

Re: Cracks Becoming Clearly Visible Now

“Canada doesn’t produce at home many of the consumer goodies that are desired especially on the bigger ticket side of the equation,” he wrote. “It is also unlikely to start doing so.”

Oh, oh, guess we won't be shipping as many F-150s north in 2016. Q4 auto sales should begin to show some stress, at least in areas most dependent on higher commodity prices to create jobs.

[GRG55]

Re: Cracks Becoming Clearly Visible Now

As a canadian, i can confirm the mania canadians have for owning homes, and the belief that they are a guaranteed money machine. I was talking to a buisnesswoman at a doctors office some years ago and she told me that the Canadian housing market "would never crash" ooookay then. i also have a few friends who are buying 1 bedroom condos in downtown toronto for close to half a million dollars, with the argument that the location makes them valuable, and that they will keep rising year after year. When it comes to talking to a Canadian about the problems in the housing market, you may as well be talking to a brick wall, because most of them don't see it, or don't want to see it

It's like an evangelical religion. The belief in an afterlife of perpetually rising property prices has removed all fear of the evil debt devil.

As for the answer to the question in the headline below, all I can say is: "Who knows?"

Will 2016 be the year the Vancouver housing bubble bursts?

U.S. short-seller says signs point to a real-estate ‘debacle’ in Metro Vancouver

THE PROVINCE DECEMBER 20, 2015

Outspoken U.S. short-seller Marc Cohodes uses frightening words to describe his outlook for Vancouver real estate in 2016.

Since The Province’s story in June featuring Cohodes — a prominent investor who bets on the collapse of speculative bubbles — the stock price of the Canadian subprime lender he is targeting has been cut in half. And that loss was despite double-digit price gains in Vancouver and Toronto homes.

But for several reasons Cohodes and a group of U.S. investors believe a rot of bad loans will spread and drag home prices down in 2016.

They believe their Canadian housing research was validated in December when the federal government announced policy changes aimed at reducing excessive borrowing and fraudulent loans.

The root of the federal government’s concern is that housing prices, especially in Vancouver and Toronto, have soared far above wages in the past decade.

In addition to Ottawa’s tightening mortgage rules — with CMHC requiring a 10 per cent down payment on the portion of mortgages it insures over $500,000 — Canada’s Office of the Superintendent of Financial Institutions said mortgage fraud is a key threat to Canada’s economy.

Among measures meant to reduce risks the office said it could require banks in Vancouver and Toronto to retain more cash. The idea is that bank capital hasn’t kept pace with the relentless paper gains on the mortgages loaned. But if prices suddenly reverse banks will scramble to cover failed loans.

The result of increased capital requirements would be less money flowing into real estate. But banks will be less vulnerable to collapse and taxpayer-funded bailouts.

Cohodes believes Ottawa’s unstated intent is to remove “moral hazard” — meaning risky financial behaviour encouraged by easy money and government-backed mortgages — from Canadian housing.

“What all this means to me is Canada is putting the risk back in the market,” Cohodes said in an interview.

“But when you take the booze away after a 10-year party there will be a magnificent hangover. So I think 2016 will be a debacle. The speculators and money launderers will get burnt. But it will be good for younger people and the economy in the long-term.”

As The Province wrote in June, Cohodes and other investors who warned of the 2008 U.S. housing crash are aggressively betting against Canadian lenders and the Canadian dollar.

Cohodes specifically targeted the massive Ontario-based mortgage lender, Home Capital Group. Two weeks after The Province’s story was published, the company announced it was cutting ties with 45 mortgage brokers because of suspicious loans.

The company eventually acknowledged the group of brokers was responsible for $1.9-billion in mortgages, and its stock price fell from about $45 to about $25. The company says it is reviewing “income verification” on suspect loans and taking “corrective action.”

Also, since June the Canadian dollar has collapsed as Cohodes and others predicted, tumbling nearly 20 per cent against the U.S. dollar.

The second factor Cohodes and similar analysts note is that interest rates were raised last week in the United States for the first time in 10 years.
Cohodes and others believe volatile market forces could push interest rates higher in Canada.


Canadian dollar’s decline couldn’t have come at a worse time for Canada’s debt-laden households

Bloomberg News | December 21, 2015

The U.S. greenback broke above $1.40 (71.42 US cents) versus the Canadian dollar late last week in the wake of a softer than expected inflation and wholesale sales prints north of the border.

And according to Scotiabank Economist Derek Holt, the timing of the loonie’s slump is abysmal as it drains debt-laden households’ purchasing power precisely when big-ticket purchases like cars and autos are running at all-time highs. And the higher they are, the farther they could potentially fall.

“The currency’s plunge couldn’t have happened at a worse time for the country’s household sector,” Holt lamented in a note published on Friday.”When a currency declines as CAD has alongside a deep negative terms of trade shock, it is among the mechanisms through which markets price a large wealth transfer out of the country to the regions of the world that are large net importers of commodities.”...

...Real retail sales growth has slid from 3.8 per cent year-over-year at the end of 2014 to 0.9 per cent as of September. Current dollar retail sales in Newfoundland, Saskatchewan, and Alberta have declined on an annual basis. In those commodity-producing provinces, hits to employment in resource extraction have compounded the deleterious effect that a lower currency has on households’ aggregate purchasing power.

Import compression has occurred, Holt acknowledged, with real volumes shrinking in back-to-back quarters, but import substitution — making goods or services domestically that were previously produced by foreigners — might not be in the cards.

“Canada doesn’t produce at home many of the consumer goodies that are desired especially on the bigger ticket side of the equation,” he wrote. “It is also unlikely to start doing so.”

In some respects, the macroeconomic backdrop in Canada is similar to that of the mid-1990s. One major segment of the economy is overextended and in need of deleveraging. Back then it was the government, now, it’s households. The loonie had softened, and external demand from a buoyant U.S. was — and is once again — required to help smooth the transition process.

Unfortunately for Canada, the Boy Meets World era is over...

...The depreciation dividend, in terms of cashing in on U.S. demand, isn’t expected to yield as much for Canada this cycle. That’s a function of structural shifts in U.S. non-commodity imports, with Canada’s shipments to the world’s largest economy stagnating while Mexico’s have picked up steam. Currency fluctuations have done nothing to boost Canadian competitiveness in this regard, as the loonie and peso have lost nearly exactly as much value relative to the greenback since the start of 2014.

“It adapted, restructured, and became more competitive and its currency enables it to grow import market share in the U.S.,” wrote Holt of Mexico.

Moreover, the part of the economy in need of deleveraging this time around — households — is substantially larger.

“When judging the hit to the household sector there are two things to bear in mind: the starting point on the equilibrium matters enormously and that points to record highs across everything we can track by way of consumer and housing metrics,” wrote Holt. “When your nation’s consumers have spent to the max because their purchasing power in world markets became so strong and then sharply weakened, the scope for significant downside risks cannot be ignored.”

[verdo]

Re: Cracks Becoming Clearly Visible Now

As a canadian, i can confirm the mania canadians have for owning homes, and the belief that they are a guaranteed money machine. I was talking to a buisnesswoman at a doctors office some years ago and she told me that the Canadian housing market "would never crash" ooookay then. i also have a few friends who are buying 1 bedroom condos in downtown toronto for close to half a million dollars, with the argument that the location makes them valuable, and that they will keep rising year after year. When it comes to talking to a Canadian about the problems in the housing market, you may as well be talking to a brick wall, because most of them don't see it, or don't want to see it

[GRG55]

Re: Cracks Becoming Clearly Visible Now

Those are also key indicators; inventory and average time on the market. As inventory moves up and sales move down, average time to sell moves up from a few months to a year or more. Pricing is a lagging indicator. It normally falls much faster once these three leading indicators run their course.

Once time to sell plateaus for a year or so you can be sure there's plenty of dark inventory waiting to come to market as soon as sales and pricing come off the bottom. There are houses just now coming on the market in our area, four years after the bottom. Although Case-Shiller shows a massive move up in housing cost in their 20 city group, that price move has not come to smaller markets in the US.

It is like the stock market today, narrow breadth. The price indexes are being driven by a small number of markets in the senior cities, NYC, Boston, San Fran, etc. A broad recovery will take much longer after the damage that was done in 2006-2008. Last time around, in the 1980s, it took just over 5 years before prices in Calgary stopped falling, and another decade to get back to the previous peak in nominal terms. People today have no clue what that is like.

[santafe2]

Re: Cracks Becoming Clearly Visible Now

Calgary house prices drop 6% in October while sales plummet 33%

About 20% more homes on sale compared to last year, sitting on the market 11% longer

Those are also key indicators; inventory and average time on the market. As inventory moves up and sales move down, average time to sell moves up from a few months to a year or more. Pricing is a lagging indicator. It normally falls much faster once these three leading indicators run their course.

Once time to sell plateaus for a year or so you can be sure there's plenty of dark inventory waiting to come to market as soon as sales and pricing come off the bottom. There are houses just now coming on the market in our area, four years after the bottom. Although Case-Shiller shows a massive move up in housing cost in their 20 city group, that price move has not come to smaller markets in the US.

[GRG55]

Re: Cracks Becoming Clearly Visible Now

I suppose it has to get that silly before the last "greater fool" lines up. If there is a 30% correction in the future it will strap a generation of Canadians with a mountain of full-recourse debt that must be repaid without tax relief. If this happens, the first market affect will be a nose dive in real estate sales as new buyers disappear and current owners remain unwilling to sell for less than they paid. Then some current owners will begin to sell for what they owe to get out from under the debt load and finally some others will sell at a loss and take on the equivalent of US student debt that they slowly pay off over a lifetime. None of this bodes well for Canadian real estate over the next decade and since this is the largest component of Canadian GDP, it doesn't bode well for the Canadian economy in general.

You are absolutely right, transaction volume is always the first sign that a hot property market is in danger of rolling over. Transaction volume in cities like Calgary fell off significantly early this year. The prices at the high end of the Calgary market are now under considerable pressure with some high profile luxury starter-castle blowouts already making the papers (this is an exact repeat of the pattern here in the early 1980s). Entry level housing in Calgary is just starting to get hit on price, with the overbuilt condo sector leading the way, as expected.

The family home is usually the last thing to be put up for sale in times of income stress - the vacation cottage in the B.C. interior (that market should have been a warning as it saturated, reached exhaustion, rolled over and started to die two years ago!), the winter condo in Phoenix (which was a winner on the exchange rate alone), the summer-only sports car/convertible in the garage, the Harley toy, the holiday trailer/motorhome, the snowmobiles, ATVs, dolled-up "Platinum Edition" pickup trucks and all that other stuff go first. So the process takes time. The smart money (very few) and the lucky money (those few who had to sell to move away to find work) was quick to discount and get out of their unaffordable, now depreciating homes; the dumb money will repeatedly re-list and follow the market down. Happens every time.

For a select few in Alberta and Saskatchewan these two provinces have non-recourse mortgage rules that allow some indebted owners to walk away from their mortgages. However, these rules do not apply to high ratio mortgages insured by the government - CMHC has the right to sue for any shortfall in that instance even in Alberta and Saskatchewan. House prices have not declined enough for anyone with a large downpayment to be underwater yet. But there are a lot of high ratio mortgages now and that means "homeowners" and their bankers will be doing a lot of debt rescheduling. These two effects will continue to cushion the decline and drag it out.

I am watching Vancouver transaction volumes as an indicator that market may finally be setting up for a reversal.

Calgary house prices drop 6% in October while sales plummet 33%

About 20% more homes on sale compared to last year, sitting on the market 11% longer

CBC News Posted: Nov 02, 2015 10:14 AM MT Last Updated: Nov 02, 2015 12:02 PM MT




What a former Calgarian learned from Canada’s runaway real estate markets

Jameson Berkow, Reporter, BNN
11:50 AM, E.T. | November 11, 2015
Real Estate

Free money is impossible to resist, and that’s precisely what was pitched to me when I dipped my toe in two of Canada’s biggest housing markets.

It certainly seemed impossible for me to resist when I decided to make my first-ever real estate investment in early 2014; purchasing a modest downtown Calgary condo. At the time, Alberta’s largest city was by far the hottest housing market in Canada. With prices increasing by double digits every year it was outpacing even the likes of Toronto and Vancouver.

“You’re living here anyways, you might as well make some money while you’re doing it,” went the oft-repeated argument to me by local real estate boosters (the sort you can easily find in every major Canadian city). Even if I ended up selling after just one year, I could count on easily getting 10 percent more than I paid, meaning I would make a roughly five percent profit even after all the realtors, lawyers and the bank took their various fees.

For a $300,000 condo (roughly the average in Calgary) that would be a $15,000 profit after just one year! I’d have been crazy to resist an opportunity like that.

Then the price of oil crashed, tens of thousands of Calgarians lost their jobs (and those that did not started to fear for their livelihoods all the same). The city became a buyer’s market as the boom times went bust and a sense of fear swept the city. I was forced to sell for a loss when I moved back to my hometown of Toronto last month.

But it wasn’t just the collapse of $100 crude that caused the collapse of Calgary’s home price growth. Overbuilding, dramatic bidding wars and an overwhelming sense of boundless price growth all contributed as well -- and all those factors are continuing to drive the market down now that low oil prices have largely taken their toll.

“Are you going to buy a place here?” was the question put to me by pretty much everyone who learned I was returning to Toronto.

“Of course not!” I would instantly retort. “What would be the point?”

Immediately I would be given the same argument advanced by the Calgary market boosters back in early 2014: “The market is going to keep on climbing from here, all you have to do is hang on for a year or two and you can make free money!”

Yet the reason I was willing to invest in Calgary in the first place was because prices a couple of years ago, while climbing quickly, were at least still within the realm of basic affordability. The carrying costs (mortgage, taxes, condo fees etc.) for my Calgary condo were roughly equivalent to what I would have paid to rent a similar dwelling (“So why not build up some equity?” was my logic at the time).

In Toronto, the cost of owning the east-end duplex I now share with my fiancé would be easily more than double what we currently pay in rent...

...Yet few if any first-time buyers are heeding those warning signs. Just like in Calgary only two years ago, buyers in Toronto still seem to be climbing over each other to win the right to pay a massive mortgage they can barely afford even with interest rates at historic lows...

[santafe2]

Re: Cracks Becoming Clearly Visible Now

What could possibly go wrong? And for a semi=detached shoebox the place is just huge. It's starting to look more and more like the Los Angeles real estate market.


Leslieville house, (Toronto), sells for $129,000 over asking price

55 Kerr Rd., Toronto

ASKING PRICE $639,000
SELLING PRICE $768,000

PREVIOUS SELLING PRICE $340,000 (2008)

TAXES $2,988 (2015)

DAYS ON THE MARKET Three

The Action: Hours before many Leslieville homeowners would be visited by children on Halloween, the sellers of this designer renovated, semi-detached house were bombarded by adults with competing offers, including one with a $129,000 premium to sweeten the deal.

What They Got: Along the northern edge of Duke of Connaught school, this brick house has the framework of many older two-storey residences nearby, but its 1,127-square-foot interior is quite modern, recently fashioned by the owner and professional designer.

[santafe2]

Re: Cracks Becoming Clearly Visible Now

Hard to believe it has come to this.

I suppose it has to get that silly before the last "greater fool" lines up. If there is a 30% correction in the future it will strap a generation of Canadians with a mountain of full-recourse debt that must be repaid without tax relief. If this happens, the first market affect will be a nose dive in real estate sales as new buyers disappear and current owners remain unwilling to sell for less than they paid. Then some current owners will begin to sell for what they owe to get out from under the debt load and finally some others will sell at a loss and take on the equivalent of US student debt that they slowly pay off over a lifetime. None of this bodes well for Canadian real estate over the next decade and since this is the largest component of Canadian GDP, it doesn't bode well for the Canadian economy in general.

[GRG55]

Re: Cracks Becoming Clearly Visible Now

Hard to believe it has come to this.

Here's an excerpt from Garth Turner's blog today: It sez it all.

December 20th, 2015

Forty minutes by car (an hour and a half in the rush) west of downtown Toronto lie the vast suburbs of Milton and north Oakville. This is where young couples go who must have a home (average $600,000) and cannot afford to buy a detached place in 416 (average $1.1 million). For this they pay another price. Monolithic design. Zombie commute. Strained services. No trees. Homogeneity.

But this is the leading edge of Canadian society. Vast numbers of people want it. They’re willing to overlook so much, in order to embrace it.

Here’s a comment from a buyer posting on the community site for Milton’s Hawthorne Village – the creation of a builder (Mattamy) so large it actually hammered together many of these homes 16 hours a day on an assembly line inside a factory:

“I took 2 days off work to line up. Was awesome…got to know my neighbours and I would do it again if need be. Mind you Mattamy raised the price of my house $40,000 during that time…so well worth lining up and losing two days of work…
“We kept checking Mattamy’s website and the site plan was leaked couple weeks in advance so I knew which lot I wanted. We did all our research prior to buying and knew which house we wanted too. In all honestly, I wish I had purchased 2 homes because we had the first 2 spots in line…”

If you ever doubt real estate is a mania in Canada, a social affliction, then remember those words. “Mattamy raised the price of my house $40,000 during that time…so well worth lining up and losing two days of work…” This is what happens to a society when money’s so cheap it’s considered virtually free, and young couples focus only on the monthly, not the pile of debt they’re walking into. These folks often got a down payment gifted to them by the Bank of Mom, believe interest rates can never rise, and guys like me are geezer idiots...