Record Low Interest Rates

Record low interest rates for mortgages are keeping Toronto's real estate market at record highs. Torontonians are buying houses for incredible prices (often in bidding wars) despite the fact that we still have a pandemic going on.

Honestly I wonder if we had a war - possibly even a major war - if we might still be seeing this trend so long as the interest rates are super low and people feel safer in "a new house in the suburbs".

Meanwhile the CERB, CESB and various other measures like a moratorium on evictions have kept the Canadian economy alive, but in the next few months CERB and CESB are being phased out and evictions will resume. Those measures kept the Canadian economy going and Canadians spending money.

It could be that we shall see the true effects on the economy during the next 9 months if we see more companies declaring bankruptcy. There has already been dozens of large scale bankruptcies during the past 5 months of the pandemic, effecting tens of thousands of employees.

Similarly low oil prices means that various parts of Canada have shut down oil production, and yet gasoline prices remain high - proof that gas companies are continuing to unfairly gouge Canadians.

Thus I cannot help but feel that even though Canadian home buyers are benefiting currently from record low interest rates that we are standing on a precipice of what could be the biggest recession or depression in decades. I don't think the current situation is sustainable. Housing prices will have to crash eventually when a recession finally hits, and hits hard.

Canada managed to avoid the housing bubble bursting in 2008. Instead prices have continued to balloon, largely due to low interest rates.

But even record low interest rates must have a limit for how much they can stave off a recession or depression.

Home Buyers Insurance

There are many different kinds of insurance out there.

Eg. Mortgage Life Insurance and Homeowners Insurance

Home Buyers Insurance is literally another term for Mortgage Life Insurance. It is insurance aimed usually at married couples who are worried one of them might die and then they could lose their home due to the loss of income within the family.

It makes sense, especially for couples where one of them doesn't work or is unable to work due to disability. If the breadwinner dies and they were responsible for paying off the mortgage, the Mortgage Life Insurance (aka Home Buyers Insurance) kicks in and pays off the mortgage. Due to the variable value of the home the insurance typically starts off more expensive and then as the value of the mortgage is paid off the insurance gets cheaper over time*.

* This and the exact amount may vary on the insurance provider.

However I think there is room in the market for a different kind of Home Buyers Insurance. Namely a new type of insurance which is specifically about buying a new home which might have something wrong with it and the previous owners or their real estate broker/lawyer did not reveal anything wrong with the property.

1. There could be a leaky sub-basement they failed to mention.
2. There could be something wrong with the plumbing or wiring.
3. There could be a lien on the property that wasn't disclosed.
4. The property could have some legal matter that is unresolved involving neighbours or the city and that was the reason the previous owners were eager to sell.
5. Other unknown factors. Eg. Fraud, misrepresentation, stolen identity, etc.

Basically the idea is that you buy the insurance at the time of the purchase of your new home in the event the previous owners tried to pull a fast one on you. The property would still need to be inspected and assessed, but in the event they missed something that the previous owners failed to mention and the issue turns out to be expensive the insurance would kick in and cover the costs (including any legal costs).

As far as I can tell nobody has invented such insurance yet, and it certainly should not be confused with "Home Buyers Insurance" because although the name certainly sounds apt for the type of insurance I am describing, it doesn't cover the same thing.

See Also

Homeowners Insurance Scams

Average Homeowners Insurance Losses

Why did China ban skyscrapers?

China recently passed a ban on the building of new skyscrapers that are over 500 meters tall, leading to new buildings being cut short at 499 meters to make sure they fall within regulations.

But why?

Is it because the Chinese government is worried about earthquakes?

Is it because they are worried about shoddy construction?

Or is it because they are worried about Ponzi schemes in which real estate developers build new structures for investors, and then pay off older investors by attracting new investors for other buildings that haven't yet been built... and they still manage to make a profit because they are cutting corners on construction costs, which in turn contributes to shoddy construction and increases the risk of more damages if a big earthquake ever hits the region?

Honestly... probably "All of the above."

And even those buildings that are below 500 meters are now being reviewed for earthquake safety and energy efficiency.

Lastly the Chinese government also wants to make certain that the architects "better represent Chinese culture"... which is code for 'the architect has to be Chinese'. No hiring American or Japanese architects for example.

So clearly something is up.

China has been building up a huge real estate bubble for decades now and it is doomed to burst sometime.

It is quite possible that the Chinese government is now working to prevent such a bursting bubble by toning down the construction with more red tape and regulations.

Rental Fraud

I think it is disgusting despicable that people will take advantage of the poor and/or mentally ill in these rental fraud schemes.

It also shows that local governments are not doing their jobs properly to both police such situations, and to provide housing for the mentally ill so they don't end up in abusive situations like this.

If you are not familiar with this crime, here is what happens:

1. The criminal rents a house, often providing fake documents for their identity to make it difficult for police to later track who they are.

2. The criminal then rents out the home by pretending to be the homeowner to multiple people all at once, taking their first and last month cheques and cashing them. So for example if they rent out the home for $2000 per month, that is $4000 per each person duped. If they rent it out to 20 people all at once they could make $4000 x 20 = $80,000 for one giant fraud. They might even insist on being paid in cash, making it even easier for them to run off with the cash.

3. The people who thought they were renting the house all show up on moving day and discover that they are not the only people who was trying to rent the house, and furthermore discover that the person they were renting from was not the true owner.

The alternative to this fraud is even more heinous, it is when people rent out individual rooms in the house, for a comparatively cheap price, and then collects the pension cheques of the elderly or welfare payments for mentally ill people, effectively robbing them blind and take advantage of the fact that they are senile or ill equipped to defend themselves.

Unfortunately it is also very difficult to even find the criminal involved as they continually do these frauds, often moving from neighbourhood to neighbourhood. Some might not even live in Canada, but rented the place remotely and then rented it out remotely to any people foolish enough to send cheques or cash in the mail.

Do Skyscrapers Predict Recessions, or is it a Coincidence?

I quite enjoyed this video. It certainly convinced me that the perception that skyscrapers are a warning sign of a recession to come is really just a coincidence of a boom period.

After all, it isn't like developers are lining up to build skyscrapers during an economic downturn. Large scale construction projects are very expensive after all, so building such structures during a recession or a depression doesn't make much sense.

And this is why you get homeowners insurance...

If a tree falls on your car, does your car insurance company have to pay?

Answer: Probably not.

Most people do not get insurance on their car against acts of nature/god/etc. The vast majority of people get liability insurance, and possibly theft insurance.

So if a tree falls on your car, your car insurance probably will not cover it unless acts of nature was covered in your insurance.

But if you have homeowners insurance which covers such accidents, and it is your tree on your property, then it is your homeowners insurance which will pay to repair or replace your car.

Toronto Real Estate Market Surprisingly Robust

If there is a recession on the way in Toronto the people of Toronto are continuing to spend lots of money despite the looming threat of a recession.

• Real estate is up.
• Pool installations are up.
• Commercial shopping (eg. shopping malls) are only down 20%.
• Online shopping is way up.
• Tech stocks for Microsoft, Tesla, Netflix and Amazon are all way up.

If it wasn't for the millions of people who have lost their jobs / are not currently working / various companies declaring bankruptcy / a global pandemic you would think the economy is booming.

Meanwhile in the USA, they definitely reopened too early and the recession (when it does come) is certain to be deeper and harsher than in Canada where the government and health services have proven themselves to be capable and competent.

So if you are scratching your head as to why the economy is doing so well, you are not alone. My conclusion is that the recession has been delayed by government spending. Possibly even averted in Canada.

But whether this is true might not be revealed until December or so. By the end of 2020 we will have a better idea of whether we are truly in a recession and what impact that will have on real estate prices.

COVID19 Fueling Gardening, Landscaping and Pools

If you're trying to hire someone to install a pool in your backyard, good luck finding someone who isn't fully booked for the rest of 2020.

Thanks to COVID19 the pool installation business is going BONKERS.

As is the landscaping of ponds...

And the gardening business...

If it involves anything to do with spending time in the backyard (including sprinklers or kids pools) chances are likely that it is sold out.

Indoor pools and expensive landscaped waterfall grottos? Yep, probably fully booked too.

Seriously if you want a landscaped waterfall grotto/pool, you might have to BUILD IT YOURSELF.

Honestly I think I would tempted to go all in with respect to making a two-in-one greenhouse / pool, that way you can enjoy swimming outdoors in the pool even during the winter. Just turn the backyard into one large enclosed greenhouse, add a pool, and voila!

Or an outdoor pool attached to an indoor pool? Why not, right?

Ten Years on 'My Search for a Home'

I started this blog on June 14th 2010.

It has been 10 years since then, and the blog is nearing the 200 blog posts mark.

When I first started this blog I was living in downtown Toronto and feeling rather unhappy with the size of my small apartment.

Now I am married, living in the neighbourhood of Leaside, and my wife and I have a son together. We are also discussing getting a new place in January 2021.

My wife has even been pushing me to become a real estate agent or broker. She feels that I am a "people person" and would be good at it. I am not so sure that I would be good at it because I don't believe in "pushing people" into buying something that they might not want. Maybe that is just my impression of real estate agents/brokers are sometimes pushy people, but I don't want to be that type of person.

I even consulted with a friend at Royal LePage on the subject of me becoming a real estate broker and he was against the idea, saying it is very difficult to get into the business and highly competitive.

Still despite his objection I haven't given up on the idea of that becoming a possibility. My Aunt Edna was a real estate broker in Sudbury for many decades, and she was hardly a people person. Talkative yes, but she had a problematic personality. So if she could do it then it is entirely possible I might take the leap and get into this.

If I did become a real estate broker it would mean I would need to clean up this website and turn it into a more business oriented machine to help me sell homes. Or maybe I could specialize in selling condos.

Being a real estate agent might also allow me the spare time to work on my writing career (if you like fantasy books check me out on Amazon).

For the past 11 years my main occupation has been teaching archery in Toronto. Supplementing that has been my writing and advertising businesses. But I am getting older and I have a hunch I won't be able to teach archery forever. In many respects archery

So what do you think folks?

Should I try to become a real estate agent or broker? Leave a comment below on whether you think I should at least try and see what happens.

Doug Ford wants to dump nuclear waste in prime farmland

A bit off topic, but I am posting this anyway because a lot of our food in Toronto comes from Bruce County. Plus technically this is a real estate issue because the province purchased the farmland already and now they want to dump nuclear waste on it.

And who wants to own land next to a nuclear waste dump where it is no longer safe to drink the water???

And who wants to eat the food products that comes from the land when the ground water becomes contaminated with radiation???





Doug Ford.

The name brings fear to the minds of many people in Ontario.

Doug Ford is the Premier of Ontario, and he is a jerk. A real nasty jerk. He wants to dump nuclear waste in Bruce County, close to the town of Teeswater. The Teeswater River (and the underground aquifer beneath the region) supplies the drinking water to:

• Tens of thousands of people.
• Dairy cows.
• Water for agricultural farming (corn, potatoes, soy beans and more).
• Water for Aquafina bottled water.
• Cattle, pigs, turkeys and chickens. Bruce County is the Beef Capital of North America, but it also produces a lot of other meat products.

If you live Ontario you've eaten food many times from Bruce County. Guaranteed. You've drank the milk. You've eaten the cheese. You've eaten beef, pork, turkey and chicken. You've eaten the corn, the potatoes, the soy products. You've drank Aquafina water.

Even if you are a vegan and don't eat milk and dairy, you should still care where your soy products and other vegetables are grown and where your bottled water comes from.

And that is why you should care.

If you care about what you eat, then you should protect what you eat. Learn more at:

https://www.protectsouthbruce-nodgr.org/

If you care write to Doug Ford. Tweet him. Phone him and leave an angry voicemail.

Share this post. Copy/paste it to other websites. Share it on Facebook. Share it on Twitter. Share the memes below.

Show that you care about your food and where it comes from.

Protect your food and your health from Doug Ford.

Investing in Luxury French Real Estate

In 2020 Luxury Real Estate Markets in Paris, Singapore and Vancouver are Opportunities to Investors

In 2020 luxury real estate investors would be well advised to keep an eye on three key cities: Paris, Singapore and Vancouver. Each of these cities has a real estate market that is expected to heat up, boosted by sweeping transit upgrades, increasingly robust tech sectors, and changing political conditions in their regions that has positive signs for their local economies.


In Paris, for instance, a multi-billion-euro Grand Paris project is planned to improve transit and revamp metro stations, and anticipation of the 2024 Summer Olympic games is further helping to invite investment and development.

But the cities are not alone in this boost to the values of their luxury real estate. The tourist areas and the rich resort towns across France are also expected to see a dramatic rise in real estate values.


And one of the best regions to invest in is Provence, with its scenic lavender fields, picturesque towns, and gorgeous waterfront resorts.

As a region in the south of France on the Mediterranean Sea, Provence is uniquely situated on the border with Italy, but not so far from other tourist locations in Monaco, Switzerland, Corsica, Sardinia, Spain, Paris and more. All the benefits of being close to all the big tourist attractions in the region, plus easy access to the Mediterranean.

It is also a popular place for British people to purchase holiday lets (holiday rentals). As such there is a booming industry of British people (and expats) renting holiday homes in Provence.

Thus it makes significant sense to invest in the luxury real estate in Provence because barring some kind of catastrophe the markets are only going to go up in value. So buying property (and insurance) makes quite a bit of sense.

Provence is not alone either. The whole of south France is a hotbed for tourists and holiday rentals, and as a result the local economy is continually booming and the tourists and expats just keep coming. In the south of France, many villas are for sale and are then being rented out.


Five Tips for Real Estate Investments

1. Do your research on the location and the property.
2. Consider all your options, including wholesale properties.
3. Look for tax benefits and understand how they work.
4. Avoid borrowing money to invest unless you have collateral.
5. If you are renting out the property aim to make at least 1% of your total investment off the rental per month. Eg. If it is 300,000 Euros then you want to be renting the place for at least 3000 Euros per month. The more premium the location the more likely you can get at least that much from a luxury investment.

How to Launder Money through Real Estate

Every year in Canada over $40 billion CDN is laundered through real estate transactions. Over $130 billion CDN is laundered in Canada every year, but over $40 billion is being laundered via real estate because it is so easy to launder money via real estate.

And the real estate brokerages are in on it.

So how does it work?

#1. Get lots of dirty money by being a criminal.

#2. Hire a lawyer with no ethics who doesn't ask a lot of questions.

#3. The lawyer sets up a dummy corporation that can be used to buy and sell properties, using cash.

#4. Find an unethical real estate broker or brokerage who won't report suspicious behaviour and doesn't ask questions.

#5. Pay in cash.

#6. Later sell the property and get paid via electronic transfers to your bank account. That money is now "laundered".

It is stupidly easy to do too, and while it is illegal to launder money, the above steps aren't actually illegal (except for #1 obviously) and there is no laws requiring lawyers or real estate brokers to report suspicious behaviour.

So how does this effect YOU???

Well, it means that a percentage of houses in Canada every year are bought up by criminals who can outbid you easily because their primary goal is to launder the money.

It means that real estate prices in cities like Toronto and Vancouver frequently go up by 5% or more annually (purely from criminals driving up prices).

And as noted in the video above, 5% per year is the difference between a $1 million house selling for $1.65 million after 10 years of ballooning prices.

So this is actually a huge problem and it is contributing to Canada's real estate bubble.

And when that bubble bursts it will be home owners who end up getting hurt the most, not the criminals.