Sigh.

Is there an emoji for that?

If I put the word “sigh” in brackets, will WordPress populate a tired, frustrated, emotionally-withdrawn emoji?

Nope.

Just one more thing I have to handle on my own…

We are only one week into the fall real estate market and already it’s feeling like November.  Murphy’s law, “anything that can go wrong, will,” doesn’t quite describe the last seven days, because everything that can go wrong, has.  Not just anything.  That would be a breath of fresh air.

Take today, for example.  Tuesday morning.

Today, we were scheduled to bring out three listings.

The first listing is pushed back because the home inspection found one strand of knob-and-tube wiring, so rather than list the house and risk buyers being deterred, we’re getting an electrician into the house to remove it, then a painter to patch the hole and re-paint the entire ceiling.  So we’ll be a bit late bringing that one to market.

The second listing is pushed back because hairline cracks in the 100-year-old plaster, which were filled last month, have re-appeared.  Our contractor has a special type of plaster/putty that’s flexible, so we’re going to try that, then paint, then list when ready.

The third listing, oh man, this is a doozie.  Imagine a 75-unit building where, if you’re lucky, you see three units per year listed for sale.  Now imagine that this morning, just as we’re about to click “Submit” on MLS to get our new listing online, we notice a nearly-identical listing came out this morning at 7:30am?  So, yeah.  Rather than listing today, competing, and dividing the buyer pool, we’ll list next week when they’re past their offer date.

Now, that’s just today.  I won’t bore you with the previous week, or feel the need to point to the clock right now and explain that there are several hours left in the day…

Cynicism aside, experiences like this are not ideal but they keep us on our toes.  This is how we keep sharp.  Without adversity, there is only complacency.

But how much emotional energy is left when all the problems are solved?

How do we see the rest of the world through our bloodshot eyes?

Today is one of those days, I’m going to admit it.  And I’ve been so burned out by the headlines out there regarding the real estate market, the election, and the intersection of the two, that I can barely stomach these water-cooler conversations, mutual rants with clients, and eventually, discussions on TRB.

Do we really want to discuss rising house prices, inflation, foreign buyers, a ban on “blind bidding,” shared-equity mortgages, the new first home savings account, debt-to-income ratio, and the absolute insanity of election promises?

I don’t.

Do you?

(sigh)

You probably do, otherwise, you likely wouldn’t be reading this.

I guess I’m just tired of banging my head against the wall, metaphorically and literally, since my son wouldn’t go down for his nap on Sunday and I actually banged my head against the wall.  I had a small mark on my forehead, and when my wife asked me what it was, I said, “It’s a mosquito bite.”

So what are the topics I don’t want to discuss?

I’ll have to narrow them down, but let’s get started…

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Topic I Don’t Want To Discuss #1: The Insanity Of Election Promises About Bringing Real Estate Prices Down

Your name is Blake.  You’re a 23-year-old who is two years out of undergrad and you’re living in your parents’ basement.  Literally.  But also figuratively, in a sense that your entire life can be described by any sentence fragment with your name alongside the words, “…..who lives in his parents’ basement.”

You feel that you should be able to afford to buy a home in Toronto, notably that really cool brick-and-beam loft in King West, and you’re frustrated with the real estate market, capitalism, corporations, big business, “the man,” the new world order, and also Starbucks because they got your $8 latte order wrong this morning…

The candidates vying for the PMO’s office are all promising to “bring the price of housing down” and you think this is great!  Then you can afford to buy what you want!  I mean, if only prices dropped like, what, 70%?

So as a result, you vote for whichever party is promising to bring prices down the most, or “ban” the most things you don’t like, or build 30,000,000 houses in six weeks.

Blake doesn’t understand economics.

Blake probably didn’t take economics in high school because it was deemed “unfair to some students” by a leftist think-tank, but I digress…

Blake doesn’t understand that the real estate market in Canada is simply too big to fail.  The government can’t “tank” prices.  All those $500,000 condo buyers, with 5% or $25,000 down, can’t withstand a $150,000 price correction or the economy would collapse, and then society would collapse, and the government is never going to let that happen.

The CMHC is simply too big and has too much exposure, and what many of you are reading right now angers you, but you know I”m right.

I’m sorry.  I don’t run the CMHC.  I don’t like it either.

But you know as well as I do that candidates vying for office are simply yelling things into a microphone, all day long, and will continue to do so until September 20th.  None of this means anything!

And yet, we continue to talk about which candidates will do the most to bring prices down.

No, not just “make housing more affordable,” but rather actually “bring prices down.”

You think I’m joking?

“None Of The Parties Are Willing To Drive Down Home Costs”

This isn’t a random internet-dweller’s rant either.  This is an opinion piece from a professor at the University of British Columbia.

It’s insane.  It drives me crazy.  And if I see one more photo of a happy couple holding two children and a dog, in front of any newspaper article, I might smash my screen…

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Topic I Don’t Want To Discuss #2: First Home Savings Account

“Hey, did you hear?  The Liberals are going to give us $40,000 to buy houses!”

Surely, somebody yelled that to a friend when the idea for the First Home Savings Account was announced, right?

For those who don’t read (at all, or beyond the headlines…), I can imagine that there was some confusion on this.

But what the Liberal Party has proposed is not giving people $40,000 but rather a tax-free account that would allow individuals under 40-years-old to save up to $40,000 and withdraw the funds tax-free with no obligation to repay those funds over time, unlike the RRSP.

This is a great idea, don’t get me wrong.  Kudos to the Liberals!

But for those people who can’t afford a home, there’ a catch: you still have to save $40,000.

How long does it take the average person to save $40,000 in after-tax dollars?

Or the better question: how long does it take a person, who might actually use this account, to save $40,000?

Because while there are some Canadians who can save that amount of money every year, they probably aren’t the ones who would benefit from this account.  In fact, the ones who can benefit from this account might not be able to save $40,000 in a decade!

This account is a great idea, but it’s a band-aid.  It’s, as the Financial Post, via Rob McLister, explained earlier this week, voter candy:

“First Home Savings Account Called ‘Voter Candy For Millennials’ By Mortgage Insider”

From the article:

The accounts meld together benefits of both a registered retirement savings plan (RRSP) and a tax-free savings account (TFSA), but despite the extra $40,000 of sheltered savings and the tax deductibility of deposits, not everyone is convinced the FHSA will help a significant number of younger Canadians enter the housing market.

“I don’t know how beneficial it’s (FHSA) going to be for a lot of the young people that are having a hard time saving up to buy a home in the first place,” said Jason Heath, a financial planner and managing director at Objective Financial Partners.

Heath said paying less tax is a good thing and describes the tax refund component as “mildly beneficial,” but noted that the extent of the savings would be in the hundreds or maybe thousands of dollars.

“That barely puts a dent in it,” Heath said, of the cost of entering the market.

While Heath sees some benefits, others see the FHSA as a purely political manoeuvre.

“This thing to me just seems like voter candy for millennials, it’s quite redundant,” said Rob McLister, a mortgage editor at RatesDotCa.

McLister said that there are already two federal savings programs that can be used to save for a down payment.

Canadians already have the ability to take up to $35,000 out of their RRSPs penalty-free via the Home Buyers’ Plan, but most do not take advantage. In 2020 around 110,000 individuals withdrew funds from an RRSP account under the Home Buyers’ Plan, according to an email from Canada Revenue Agency. Of those individuals, only 17,000 withdrew the full $35,000.

Note the last portion in case you’re skimming: Only 17,000 of 110,000 individuals who borrowed from their RRSP in 2020 withdrew the maximum amount.

So what good is another tax-free account on top of this for those truly in need?

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Topic I Don’t Want To Discuss #3: Banning Foreign Buyers

Every party vying for the PMO’s office has a plan for this, and if everybody’s jumping off a bridge, then dammit, prepare to take the plunge…

Tell me I’m binary, but we have to be all or nothing here, folks.

The Conservatives Party’s idea of a two-year ban is ridiculous.

Either we decide that only Canadians can own real estate in Canada, or we leave the door open to foreign investment in our real estate in the same way as foreign investment is open in a slew of other markets and industries.

I’ve heard both arguments before and they make equal amounts of sense.

Would Canadians balk if foreign interests took over all of our natural resources?   Sure!

So why do we allow individuals from other countries, whose dollar might go a hundred times further than ours, to buy up the homes in which our citizens would otherwise live?

You can structure a “fairness” argument if you want to, or an economic one.

BNN Bloomberg recently wrote this:

“How A Foreign Homebuyer Ban In Canada Could Backfire”

From the article:

“There are some Americans who buy property here, but there are a whole lot of Canadians that buy property in the United States and we need to be very very careful that the Americans don’t respond in kind,” said Mike Moffatt, senior director of policy and innovation at the Smart Prosperity Institute, said in a recent interview.

“You can just imagine all the snowbirds who have places in Florida, Arizona, Las Vegas, and all of a sudden they have to start paying an extra tax? If the Biden Administration or the governor of Florida says, ‘Well, the Canadians are going to do that to our people who own fishing lodges in New Brunswick? Okay, we’ll put a one per cent tax on any Canadian that owns a home in Orlando.’”

“Globally, we are often the foreign buyers and I don’t think Canadians would be too happy if we were given a taste of our own medicine,” he added.

Former Toronto Chief City Planner, Jennifer Keesmaat, surprisingly had this to say:

“Foreigners don’t vote so it is a really easy policy for the electorate to buy into, but I’m always wary of policies that aren’t backed up with data and analysis that demonstrates that they are responding to the crux of the problem,” Keesmaat said in a phone interview.

“The risk for me with these types of policies, I put them in the category of ‘buck-a-beer’ in that they get people excited but they don’t really do anything. It gives people the perception that some action is being taken, but it doesn’t actually address the problem.”

Words that I never thought I’d say: I agree with Jennifer Keesmaat.

This is, as the newly-discovered buzz-word explains, voter candy.

Not only that, I remain unconvinced that “foreign buyers” are paying the foreign buyers tax, because I don’t trust that the government is savvy enough to collect it in the same way that I don’t trust the foreigners are lined up to pay it.

Either ban foreign buyers entirely or shut up about it.  Because the taxes and the two-year moratorium don’t do anything to solve the “problem” in our market, which not a single politician seems to have actually addressed.

–

Phew!

That’s a mouthful.

Let me come back to the topics that I don’t want to discuss, to discuss them, on Friday…