Suckas

At 9 am on Tuesday, after reporters have been locked in a windowless basement room for a spell, the Bank of Canada will release its latest interest rate announcement. It will be a bust.

Despite surging oil, swelling food costs, higher house prices and a jump in the core inflation rate, the central bank will hold firm on rates. But only for six weeks.

In fact, there are two shoes about to drop this spring for the real estate market. On March 18th the 35-year mortgage dies a well-deserved death, murdered by F. And on April 12th, interest rates begin a long and inexorable climb higher, sweeping mortgage costs along with them. The initial increase may be modest, just a quarter point, but there will likely be four or five more added by December, bringing the prime rate to more than 4%, and dragging VRMs with it.

As I’ve explained, the 35-year mortgage croak will be significant. Already we’ve seen suicidal young virgins – at the urging of ethically-challenged realtors – loading up on debt and attacking the market “before they are priced out forever.” Tricked into believing houses will be harder to buy after the rule change, they’re directly responsible for a surge in February sales. Sadly, of course, houses will actually be cheaper after the orgy is over. All that will be left are empty KY Jelly tubes and endless debt.

Hard to imagine how the mortgage rule change could have been handled more badly. The sixty-day lead time begat a flood of misleading propaganda aimed at convincing the most vulnerable and inexperienced of buyers they had to act immediately. It worked. Demand was brought forward. Prices rose. And the ensuing decline will be worse.

As for rates, well, don’t doubt Mark Carney. The central banker’s been itching for months to pull the trigger. He knows cheap credit – as exemplified by the 35-year feeding frenzy – will have disastrous long-term consequences. As family debt increases, future spending erodes. In an economy when 60% of everything depends on consumerism, you can hardly prosper when people are choking on loan payments. The only prudent action is to return rates to normal levels – which would put five-year mortgages back around 7%. Within 24 months, we’ll be there. Just in time for the 5/35 crowd who bought in the last few years to face renewal.

And guess what that means? And did I mention all those geriatric hippies who’ll be hitting 65 at the same time, with big houses and no dough? Such fun.

Meanwhile, let’s talk Yellow Peril.

As this blog bears witness, many Canadians now blame unaffordable home prices on immigrant or offshore purchasers from Mainland China. Anecdotal evidence supports that. Areas of the GTA, like Richmond Hill, Markham and Unionville, are peppered with Asian homeowners. In the Lower Mainland, Richmond is turning into a Chinese-dominated community while upscale neighbourhoods such as Vancouver’s west side are the backdrops for Asian-only bidding wars.

This Asian Invasion has been wildly amplified by the media, prompted by real estate promoters who’ve found it handy to have a Chinese monster on their marketing team. In Vancouver that includes The Key, which sponsored that infamous “Chinese buyers” helicopter ride over a terrified White Rock – all to make pre-sales in a condo building. It  came to a head on Saturday when a scary story in the Vancouver Sun quoted Key honcho Cam Good saying: “There are literally planeloads of Chinese coming here to buy real estate.” Good then went on to claim he’s sold more than 500 homes to mainland Chinese investors and immigrants in the last few weeks in Vancouver and Toronto.

That would be quite a feat, of course, since it’d amount to about 8% of all the houses sold in those two cities. Even more impressive, considering there are almost 30,000 realtors in Vancouver and the GTA.

So, Cam sold 500. The others averaged 0.2 each. I think somebody is full of 拉屎.

If the two most active Canadian real estate markets are being held aloft by those pesky, filthy-rich, neighbourhood-busting, price-exploding, airplane-stuffing Mainland Chinese, then you’d think there would be some empirical evidence of it. Like, you know, facts.

Instead we get promotional crap like this, duly parroted by our MSM repeaters: “We predict that this will be a dominant trend for a long time,” Scott Brown, senior vice president, Western Canada for Colliers International residential marketing, said in an interview. “Some of the most expensive real estate is only being marketed to Chinese buyers. And Vancouver and Toronto are very popular.”

That’s convincing.

But perhaps I’m just a gnarly old cynic who has seen too many people fall for the ‘buy now or buy never’ mantra. I’ve seen it with houses, Bre-X, dot-coms, cottages, sun belt and Nortel. Incredibly, it works every time. All it takes is a threat, some confused reporters, a hot marketing guy and people who’ll believe anything if they hear it enough times.

And here are two right now.

My wife and I each have professional degrees and have VERY good jobs.  We are conservative and big savers. We just sold a property for 45% more than we paid in 2008.

We could purchase a home in the $1m to $2m price range with cash.  We simply can’t fathom paying that for the properties that are listed in that range (except perhaps some in West Vancouver). We can’t bring ourselves to buy what appears to be grossly over priced real estate.  Our issue is that we need to live in Vancouver for work.

We are also concerned that the wave of investment from mainland China will not abate and we will eventually be completely priced out of the market.  One could argue that logic would dictate otherwise since many of these properties are sitting vacant (I understand that two thirds of the Shaw Tower is empty).

I can’t believe I am about to ask the following question but is it possible that Vancouver is in fact different and will be the exception to the rule? Have you carefully analyzed the Vancouver real estate market? It is perhaps easy to blog that the market is unsustainable in the context of Canada (cost of homes relative to average income) but can foreign investment skew the market significantly and permanently?

See what I mean. Yellow Peril. This will not end well.

Priced to sell - $2,199,000

“Rare opportunity to own a half block from Locarno Beach on freehold 60 by 95 lot. Build your dream home on one of Vancouver’s most prestigious streets.” Listing here.


274 comments ↓

#1 i am first to annoy you! on 02.27.11 at 11:33 pm

Whether or not I am indeed first…..I will stake claim and congratulate myself!

Great blog Garth and keep fighting the good fight!!!!

#2 tiger baby on 02.27.11 at 11:34 pm

First

of all, it seems that Gold standard only works if the total value of worldwide goods and services increases at the fixed ratio to the rate of increase of worldwide gold holdings. Has gold production increased in proportion to world economy over the last 50-60 years given 1) population growth, 2) increase in education, 3) productivity gains through industrialization and computerization … etc worldwide? Probably not. Thus going back to “gold standard” will result in enormous contraction … who is going to invest so they can earn less later?? everyone would just stockpile, economy would slow to a grinding halt. Thus there is a severe competitive penalty put on any economy that is gold based, thus even if the mismanagement of fiat money forces a temporary gold standard, nations will be racing to get out of it as soon as possible unless it wants to be left completely behind.

Some people like to talk about “intrinsic” value of gold, but the fact is that the “value” of anything is strictly as ascribed by people, there is nothing “intrinsic” about it. What value does gold have if there is no one around? Nothing. Wikipedia gives “The average gold mining and extraction costs were about US$317/oz in 2007.” Note this is in super-inflated fiat dollars. Shouldn’t long term cost target approach production cost, plus a small margin??

“A gold standard doesn’t have to lead to a contraction of credit, just bad credit. Fractional reserve financing can still exist, and has in the past.”
Probably it is screwed up that’s why we don’t use it anymore … how can credit expand beyond the increase in physical gold holdings if they are exchangeable at a fixed rate?? If what you say is possible, then what’s the point of the gold standard??

Pure Randist system is as unfeasible as pure Marxist system. Their theories and writings were in response to the concerns of their day, good for educational purposes but ultimately too simplistic and incomplete for real life implementation if the goal is to maximize overall benefit to society. That’s why people can embrace Ayn Rand until they become responsible for a nation’s economy.

#3 Love This Blog on 02.27.11 at 11:44 pm

“All that will be left are empty KY Jelly tubes and endless debt.”

You slay me!! At least the Realtors didn’t “give it to ‘em dry”

#4 Ayn Rand on 02.27.11 at 11:51 pm

Wow that picture of that $2M house looks like my Cabana – no, actually my Cabana looks more attractive.

Thanks Garth. Almost March, any ETA on the next book?

#5 dradak1 on 02.27.11 at 11:54 pm

Hi Garth – now I know what is your problem – you are not fully bilingual. I am in my way to learn French as my 5-th language – and I am able to understand people who talk any European language and more – body language is universal like numbers in math.
Good luck greedy bustard !!!

#6 tiger baby on 02.27.11 at 11:54 pm

Yellow Peril?? They make huge sacrifices both in environmental and human terms to make cheap consumer goods for us, and now they are bringing the profits into Canada in exchange of some over priced crack shack. We should all be sending them personal thank you cards!!

Just make sure you don’t try to out-bid millionaires with 19 x leverage …

#7 Does Not Matter on 02.27.11 at 11:59 pm

“As I’ve explained, the 35-year mortgage croak will be significant”
Well, It may not be. we kept hearing about HST last year and yet RE kept climbing up.

#8 bsallergy on 02.28.11 at 12:00 am

Damn! Looks like an average shack in north end Winnipeg. Good luck with that. So glad it is different there. Hahahahahahahahahahahahaha . . .

#9 Angela on 02.28.11 at 12:07 am

My dream home wouldn’t fit on that lot the size of a postage stamp.

#10 tiedattutu on 02.28.11 at 12:07 am

I think I know where this is going. Canadian real estate turns down, with relentlessly falling prices. Then China has a hard landing-which it almost certainly will. And bam! a swift blow to a massively devalued market, crushing the hopes of many that one day this real estate hell will end. Is that about right?

#11 Jon B on 02.28.11 at 12:10 am

Your 中國 is excellent. Keep up the good 工作.

#12 HouseBuster on 02.28.11 at 12:11 am

House prices are going to crash. It is simply unsustainable and 2003 prices are on the way.

#13 Bottoms_Up on 02.28.11 at 12:14 am

I look at that house and all I can see is a tulip…..

#14 Timing is Everything on 02.28.11 at 12:19 am

The Yellow Peril is a red herring.

Interest rates…2013…renewals…demographics…

…sno-cones.

#15 Tim on 02.28.11 at 12:23 am

“The only prudent action is to return rates to normal levels – which would put five-year mortgages back around 7%. Within 24 months, we’ll be there. Just in time for the 5/35 crowd who bought in the last few years to face renewal.”

——————
So another two years before things tank? At this rate, there will have to be a 50% correction. We’ve been waiting for things to tank for four years now…
Our spineless Government should put a stop to the direct marketing to Chinese investors who don’t even live here. Our Govt is disenfranchising their own people. I know many that are leaving Vancouver becuase it is ridiculously expensive, and good jobs are difficult to find. The Chinese want to come here because it is nice and quiet and the air is clean. Well, if enough of them come here, then guess what?…

I did not say two years until tanking. My consistent prediction has been a correction, followed by a multi-year melt. It stands. — Garth

#16 tiedattutu on 02.28.11 at 12:25 am

This actually worse than the US craziness. ‘We aren’t the US”. True, but not in the way you think. People sometimes can be such nimrods.

#17 Shane on 02.28.11 at 12:26 am

Many folks will retort that if real estate were ever to become oversupplied in Canada we could just increase our immigration numbers… I’ve even read that many people think that US real estate crashed primarily because immigration (legal and illegal) crashed at around the same time… Simply a matter of supply and demand.

I look at supply and demand from the other side… Many cities in Canada in the last eight or ten years have instituted ever more strict zoning and development laws… The GTA established the Greenbelt, BC has the Ag Land Reserves, Calgary has shady land speculators influencing city councils and zoning commissions, Saskatoon has land auctions, etc.

My unscientific study also shows that areas with pretty loose development rules, such as New Brunswick, Southwestern Ontario, etc. have avoided the run up in housing costs as well while much more economically depressed areas still had major run ups in prices. Heck everyone in Windsor knows that housing has ALWAYS been cheap in Windsor, even when it was booming 10 years ago, and you could build a house anywhere you wished.

This hypothesis is a part of what Robert Shiller believes went wrong in the US…

Just wondering why this hasn’t been investigated further in Canada?

#18 Jeff on 02.28.11 at 12:29 am

By the way Garth, Richmond isn’t turning into a Chinese dominated community, it has long passed that and many Canadians won’t live there as a result. Given that there are over a billion Chinese, even if half of one percent of them start coming here then it would dramatically change things. A co-worker’s kid is the only Caucasian in his elementary school class.

#19 City Slicker on 02.28.11 at 12:30 am

Is it just the pic or me, but the house seems like its tilted to the left.
Maybe $2 million is justified cause its close to the beach?!?!

#20 Jane on 02.28.11 at 12:31 am

“Despite surging oil, swelling food costs, higher house prices and a jump in the core inflation rate, the central bank will hold firm on rates.”

Why? Why wait yet another six weeks?

#21 Jeff Smith on 02.28.11 at 12:31 am

Looks like those DVD players & LCD are going up in prices sooner than we anticipated.

http://www.bloomberg.com/news/2011-02-28/yuan-near-17-year-high-after-wen-says-strong-currency-beneficial.html

#22 Priced Out Canadian on 02.28.11 at 12:32 am

The “yellow peril” is alive and well in the Lower Mainland.

Vancouverites will stand by and watch the destruction of their treasured city through increase house prices as owners sell to the highest chinese bidders . We have watched it since the mid-1980s, when the first wave of asians came over and contributed to rise in prices. Think about it – Vancouverites have paid a premium (five times average income) since the influx of Chinese fleeing the Chinese takeover of HK. This will continue to be the case for some time, to the point that Vancouver will become an ethnic enclave where speaking English will be an anomaly.

True Canadians will just move the rest of the Province, where one feels that they are still part of Canada. Its a shame that the city has to degenerate into self-segrated ethnic enclaves, a haven for drug dealers and corrupt Chinese officials, and zone for those that have zero intention of contributing to Canada.

One positive note is that my banking friends have told me that they are tightening up restrictions around lending to mainland Chinese. They are supposed only lending 50% to these “rich” mainlanders. Realtors are telling me that the Chinese are putting multiple bids on multiple houses at the same time, and despite having the cash, are borrowing as much money as possible. They view borrowing the maximum as essentially shorting the dollar, and they do it because if shit hits the fan, they pull out without risking their own capital. Thank you Canadian government for giving foreign investors a no-lose situation while sacrificing the well-being of your own citizens.

Sorry folks, but the Chinese are driving the market here. You can reject such notions as empirically invalid, and not politically correct, but at the end of the day, the front line folks in RE are telling it how it is (despite the transparent self-serving puff pieces as the Vancouver Sun article)

I liked that “true Canadians” bit. Very 1930s. — Garth

#23 Chaos on 02.28.11 at 12:33 am

The word is that the govt of China ( in an attempt to try to control the countries’s real estate bubble) has taken steps to restrict ownership of homes to no more than 2 per family.

These new property owners in Vancouver don’t care about 5/35 mortgages.

They’ll be paying cash.

If you aren’t selling your home in Richmond or Vancouver West side….you’ll be SOL.

#24 ted on 02.28.11 at 12:33 am

don’t believe the letter is true. They claim they sold for 45% higher than what they paid in 2008. Can someone show me any home that went up 45% in this time. They have two million yet sound like children asking for advice.

Looked real to me. — Garth

#25 Jeff Smith on 02.28.11 at 12:34 am

>But perhaps I’m just a gnarly old cynic who has seen
>too many people fall for the ‘buy now or buy never’ …
>and Nortel

Garth, are you mocking me?

#26 Jsan on 02.28.11 at 12:36 am

I’m not sure if these links have been posted before but it just shows the speculative greed that is sweeping through the Vancouver housing market. The sad part is allot of it seems to be coming from overseas. Of course it will all end badly but you can be sure there are many local Vancouver realtors getting the word out in China about how Vancouver is a great place to flip a house and play the real estate casino.

“Hong Kong curbing of house flipping coincides with local real estate boom”

http://www.bclocalnews.com/richmond_southdelta/richmondreview/news/116348674.html

http://www.bclocalnews.com/richmond_southdelta/richmondreview/news/116772744.html

.

#27 Jeff Smith on 02.28.11 at 12:39 am

>#6 tiger baby on 02.27.11 at 11:54 pm
>Yellow Peril?? They make huge sacrifices both in
>environmental and human terms to make cheap
>consumer goods for us, and now they are bringing the
>profits into Canada in exchange of some over priced
>crack shack. We should all be sending them personal
>thank you cards!!

>Just make sure you don’t try to out-bid millionaires
>with 19 x leverage …

That’s what I have been saying, we should be all smiles from ear to ear while it lasts. Harpie should open immigration flood-gate and let all that money in

$$$ :)

#28 john on 02.28.11 at 12:40 am

”The only prudent action is to return rates to normal levels – which would put five-year mortgages back around 7%. Within 24 months, we’ll be there. Just in time for the 5/35 crowd who bought in the last few years to face renewal.”

So you didnt want people to buy a house 3 years ago, and you dont want them to buy a house now, and you dont want them to buy a house in a year or so!! you want people to rent for around 5 years and pay all the rent on hope the prices will go down, so if they rent a 3 bedroom apartment for 1600 for 5 years that would be 96,000, so even if prices went down 96,000 to them its still the same, plus if they buy in a year or so interest rates would be much higher than people who bought before and thats extra probably around 40,000-50,000……all in all they will loose around 140,000 if they buy in 2 years from now instead of buying 3 years ago.

I’m not your Mom. Do what you want. — Garth

#29 Bill on 02.28.11 at 12:41 am

2 mil plus for a junk, hahaha..

#30 Peter Pan on 02.28.11 at 12:42 am

Garth, here is some clarification on the geography and lexicon of the lower mainland for areas containing “West” in the name.

West Vancouver (West Van) is a separate city from Vancouver. It’s on the North Shore and has not been the subject of intense speculation from the mainland Chinese.

The area to which you are referring to is the West Side of Vancouver which comprise neighbourhoods generally east of Oak Street. Some of the most “in-demand” neighbourhoods have been… Arbutus Ridge, Dunbar-Southlands, Kerrisdale, Kitsilano, Shaughnessy and West Point Grey

Which is not to be confused with the Vancouver’s West End, which is an area on the downtown peninsula neighbouring Stanley Park and east of Denman.

I know it’s all very confusing, but I was hoping to inject some clarity into the discussion.

#31 $froma$ia-The mother of all Bubbles on 02.28.11 at 12:43 am

I SAY THE BANK WILLRAISE RATES

#32 Sasquatch on 02.28.11 at 12:43 am

There are a lot of Philippines in Winnipeg. You don’t hear of Philippine immigrants ruining the Winnipeg real estate for home grown Whities. OOHH-YEAH, that’s because there are not any. Most of the Philippines in Winnipeg are 2nd 3rd generation of local raised variety.

How many “mainland Chinese” in BC were born and raised in BC? Even when I was a child who had never been to BC, know that there are many Asians in BC. Check with immigration Canada people. With out looking i would guess that Sri Lanka immigrants would be the bulk, and I understand that they don’t have much buying power.

God love propaganda!

#33 Jeff Smith on 02.28.11 at 12:44 am

For a second I thought that was the public washroom at one of the Ontario Parks campsites I visited last summer. Whew!

#34 InvestorsFriend (Shawn Allen) on 02.28.11 at 12:45 am

RRSP Tax Whining…

In the past few years it has been popular to whine that the tax on RRSP withdrawals, treats all withdrawals as income and the usual lower taxes on capital gains and on dividends is lost.

It’s true.

And for that matter you pay tax on an RRSP withdrwal even if your RRSP never made a cent.

Why is taht fair?

In fact the tax on RRSP withdrwals is quite fair because of the fact that a huge tax refund was granted at the time the money was put into the RRSP. The tax refund meant that in effect your RRSP investment was in pre-tax dollars.

$6000 of after tax dollars can be turned into $10,000 in RRPS dollars since a $10,000 deposit will net a $4000 tax refund assuming a 40% tax rate.

So yes your RRSp withdrwals are fully taxed as income because the original refund turned your RRSP into pre-tax dollars.

The benefit of the RRSP is taht this pre-tax pool of money is allowed to grow with no tax until it is withdrawn. But yes indeed at withdrawal the tax is paid.

I have NEVER heard anyone complain that the RRSP refund is based on the full marginal tax rate.

It is unfortunate that RRSP withdrwals add to income and couase clawback of old age pension. So too does a part-time job.

The point is, RRSPs are tax-subsidised savings. You still save tax as compared to a taxable investment account.

RRSPs are not madatory. People who suckle at the teat of RRSP related tax refunds should not complain later that at age 71 they have to take the money out and pay tax. That was the deal all along.

A deal is a deal. If you don’t like it then stay out of RRSPs

#35 Location, Location, Location... on 02.28.11 at 12:46 am

Yeah, you cannot beat a location – close to lots of parks and the ocean… Don’t look at the house, but the location…

http://goo.gl/XUGKD

Put it down. Now slowly step back from the Kool-Aid. — Garth

#36 TO Renter on 02.28.11 at 12:46 am

For those of you in Toronto, maybe you’ve noticed this too.

I was walking along Bloor between Landsdowne and Dundas West. There is a bunch of small auto mechanic/ garage shops. And right beside these mom & pop shops are newsly built condos and lofts. I feel these condos are now everywhere. Supply is everywhere!

#37 smartalox on 02.28.11 at 12:47 am

We’d all do well to remember…

A collection of anecdotes is not data
A collection of data is not information
A collection of information is not knowledge
A collection of knowledge is not wisdom
A collection of wisdom is not truth.

The real estate industry is highly anecdotal, and doesn’t get much better than that.

#38 Industrial Guy on 02.28.11 at 12:50 am

Democracy in the Middle East is a great thing …. Oh, until fundamentalist Islamic governments are elected.

Just wait till all this unrest spreads to Saudi Arabia. Their quiet little civil war against the followers of the Wahhabi sect of Islam won’t be so quiet anymore. Scores of American made F-15’s and F-5’s have kept the billionaire members of House of Saud safe on their thrones ….. but, without the support of the Saudi military, their reign will be quickly over. The Pro-west dictators ousted from power will no doubt leave a legacy of hatred towards their past supporters … Oooops …. that us, isn’t it?

So $2.00 a Liter gas is coming …… July – August 2011? It’s very possible.

If this happens. There will be growing pressure for a Made in Canada oil pricing policy like Trudeau’s National Energy Policy …. Will a pro-Alberta Prime Minister refuse to act in the best interests of Canada? Remember Prime Minister Harper was a member of the Alberta Agenda Group. The authors of the “build firewalls around Alberta” letter.

Zooming inflation will lead to rising interest rates. Us older blog dogs will remember how mortgage rates climbed to 21.8% in 1981 after the two oil crises of the 1970’s
If this happens ….. the conditions for a true housing market collapse in Canada will be in place.

It’s funny how much things can change in just two short weeks.

#39 InvestorsFriend (Shawn Allen) on 02.28.11 at 12:51 am

Garth is proud of his role in creating the TFSA.

But why really should the government have to subsidise our savings? Are we not adults?

If you put money in a TSFA and your neighbour with a similar income can not and does not, then the income tax rate has to be higher to make up for the lost tax income on your savings.

Why really is your neighbour forced to subsidise your savings?

I advocate maximising all tax-assisted savings like pensions, RRSP, TFSA and RESP.

What I don’t understand is why it is the government’s role (and ultimately the forced role of our neighbours) to subsidise my savings.

Since the government has forced my neighbour to subsidise me I will go along with it, but I don’t see why my neighbour, who may not be in a position to save – maybe he has 8 kids – should not be complaining bitterly.

#40 AG Sage on 02.28.11 at 12:52 am

I think the HELOC rule change will have more impact than the amortization, which doesn’t impact leverage. Given the long term negative savings rate, flat incomes after inflation, and significant equity withdrawals, it’s a safe assumption that some not insignificant number of mortgagees are making part of their payment using money borrowed from equity. No government backing for insurance means HELOCs are about to get scarce. That will lead to serious discounting by some very motivated sellers.

House prices get set on the margin on the way down too.

#41 BC Bring Cash on 02.28.11 at 12:53 am

Cam saying there are plane loads of “Investors” flying from China to take advantage of Vancouver’s rock bottom RE deals sounds like a sales pitch full of crap. He is trying to and most likely is profiting from a sales frenzy about to pop. Why not work over his fellow Country Men for his personal own advantage? Whats wrong with ripping off his fellow citizens? As heard often in the past, there’s a sucker born every minute. Unfortunately there are always so many out there to fall the latest scam. I’ve been waiting for BC and Vancouver RE scene to shit tank for years. I’m still waiting. Will it ever tank?

#42 Alex on 02.28.11 at 12:55 am

I figured I’d bore you with the latest long-winded letter in my private campaign, written yesterday to Brian Morton at the Vancouver Sun in regards to the article Garth discusses in today’s blog. I’ll let you know when he writes back and tells me to take a flying leap.

Hello:

Regarding your piece in today’s Sun discussing “planeloads” of Chinese descending upon Vancouver.

I wonder: Did you do any actual “reporting” before writing this puff piece? Or did you simply listen to the real estate pumpers you’ve quoted? What is it about the mainstream media and this real estate bubble? Why are you compelled to flaunt only rising prices and bidding wars? Why are your headlines structured to look like “truth” when they’re typically, as in this case, the opinion of people involved in the industry who benefit from such a headline? Why do you tend to ignore the fact that seeing this sort of crap ISN’T good for the average lower mainlander, who can’t afford to buy here already? That the bubble we’re currently in is due primarily to the emergency interest rates instituted two years ago when housing prices were set to correct as they have elsewhere around the world? That it’s a very different story in the eastern lower mainland municipalities, where listings are surging and prices are regularly dropping? Have you even looked at places like Langley or Chilliwack or further out to the Okanagan or Vancouver Island?

Look, Brian, Canadians, who are already one of the most indebted people on earth, per capita, have driven housing prices into the stratosphere because they think it’s magical. They pay the outrageous sums currently being asked in the Vancouver area when they can barely afford to do so because of: 1) The availability of easy credit and rock bottom rates, both of which are soon coming to and end, and 2) The mania stirred up by the mainstream media and lying realtors (who never, ever say it’s a bad time to buy).

So…Joe Average, who can’t afford to buy even a shack in Vancouver or Richmond, looks at articles like this and truly believes this entire area will soon be populated with crazy rich Chinese and that he’d better, as the realtors say, “Buy now or be priced out forever.”

This article, as it sits, offers a glowing, one-sided view of the situation. It does a disservice to a totally tapped-out population that is already being hammered by some of the priciest real estate in the world, a cost of living that’s markedly higher than virtually anywhere else in North America, increasing gas prices, increasing electric bills, etc, etc.

Maybe you should just admit to me that the real reason behind bogus yellow journalism such as your piece is that the real estate industry advertises heavily in media outlets such as Vancouver Sun?

I guess I’m coming across as angry, but that’s only because I am. I’ve already filed a complaint with the Canadian Broadcast Standards Council on similar puff pieces broadcast during the past couple of weeks on Global TV – one of them, interestingly enough, involving a fellow you featured prominently in your article, Cam Good. Cam flew three or four Asians over White Rock two weeks ago and called in all the local media outlets to come along for the ride. And along they came, hook, line, and sinker. The result? “Chinese Buyers Flock to White Rock,” yet another trumped-up bit of PR posing as “news.”

Just disgusting.

#43 Crash Callaway on 02.28.11 at 12:57 am

Hey y’all stop picking on that cute little 2.1 mil house.
Any realtor will tell you, you can always rent out the basement and get the shmuck renter to help with the mortgage.
Basements in a place like that in Van gotta be going for at least $5000 a month.

#44 Jeff Smith on 02.28.11 at 1:02 am

>#36 TO Renter on 02.28.11 at 12:46 am
>For those of you in Toronto, maybe you’ve noticed >
>this too.
>I was walking along Bloor between Landsdowne and
>Dundas West. There is a bunch of small auto
>mechanic/ garage shops. And right beside these
>mom & pop shops are newsly built condos and lofts. I
>feel these condos are now everywhere. Supply is
>everywhere!
.

Ever notice they tend to erect these condos right besides railroad track bridges ? Must be nice to hear the loud sound everytime train runs by. Years ago when I was a dirt poor student, and had to rent an apartment near a railroad, it was like you are in a helipad. Sounds like a whoop whoop whoop of a helicopter blade and it gets louder and louder and it’s a train flying past your building. Took me a month before I can learn to sleep with that noise.

#45 WesternCanadian on 02.28.11 at 1:08 am

” My consistent prediction has been a correction, followed by a multi-year melt. It stands. — Garth”

Fine, Garth, but WHEN????

I predict the Calgary Flames will win the Stanley Cup!

Dosen’t mean much when you don’t attach a timeline to it does it??

#46 Adventures in Sea-Tac with Moneta on 02.28.11 at 1:20 am

32 Sasquatch – link for you re foreign born in Van

http://en.wikipedia.org/wiki/Foreign_born#cite_note-10

39%, largest portion from Peoples rep of China.

#47 nonplused on 02.28.11 at 1:24 am

Not much to argue with today Garth, good all round post. Although I think you might be a bit our on a limb with 4% by December. Seems high to me. The C-banks and especially the Bernanke are going to use the unrest in the Middle East as an excuse not to raise rates. “See! The rising prices are geopolitical! Can’t react to that! It will all be fine in a few months if we print a little more money.” But I think you are correct that the trend will be up.

#48 Devore on 02.28.11 at 1:26 am

#7 Does Not Matter

Well, It may not be. we kept hearing about HST last year and yet RE kept climbing up.

And anyone who knew what they were talking about said it would have minimal effect on RE.

#49 Amarillo on 02.28.11 at 1:29 am

I lived in West Van for a time. Cool little house on Gordon Avenue, had a tennis court across the street. The ocean was a short walk away. There was a good breakfast restaurant in Dundarave also next to the ocean. Everyone money conscious of course, wouldn’t last long otherwise. Appropos of nothin’.

#50 Kevin in Winnipeg on 02.28.11 at 1:31 am

http://www.realtor.ca/propertyDetails.aspx?propertyId=10387444&PidKey=1905687652

This is an interesting listing in Winnipeg. Possibly priced low to get out before the 5 /30 changes. Real estate is still selling well in Winnipeg, at least til March 18th. I still don’t think the change will have any effect at all but we shall see.

#51 Jeff Smith on 02.28.11 at 1:32 am

While I can not fully grasp the theory and concept of this article, it is nevertheless interesting. Maybe Garth can put it in layman terms for us.

http://theautomaticearth.blogspot.com/2011/02/february-25-2011-exporting-speculative.html?source=patrick.net

#52 Tim on 02.28.11 at 1:38 am

Re Article in Vancouver Sun about the Chinese coming here in droves… The level of journalism has sunk to an all time low, but what can you expect from Can West? They’ve gutted the industry and cut pay, so we now have incompetent people writing for Can West. The writing is terrible, and as a result, many people have stopped reading the local paper. Don’t get me started on Global. It is the equivalent of a white trash US station. But hey, what can we expect when the “Liberals” elected the shameless opportunist, champion of the 30 second sound bite show on CKNW, the one for people with the attention span of a flee-Christy Clark? She certainly didn’t get voted in based on her IQ lol! Wait until the dirt comes out on the BC Rail scandal, we may actually have an NDP govt yet…

#53 Roial1 on 02.28.11 at 1:40 am

Garth, Garth, Garth.
You know full well that good old M.C. is NOT going to raise interest rates till AFTER the election.
Knowing what an A** hole S.H. is there will be no rate increase before his LAST crack at a majority.

You can take that to the bank!

No mater how many Canadians he destroys before hand.

#54 Burnt Norton on 02.28.11 at 1:45 am

About that couple – the one that has $1-2 million and…OMG…”can’t believe” that they are …OMG…thinking about spending it all on a house in Vancouver, so they whine to you about their gut wrenching situation:

Instead of wasting Garth’s time, how about you put on a hat and sunglasses, get in the Range Rover, lock the doors (of course) and head down to Main & Hastings. Notice the people lying under tarps in doorways. Wonder if they are still alive after our -10 C overnights recently. Feel better about having a roof over your head.

About “Yellow Peril”:

Growing up here in the 80’s, there was a lot of resentment of FOB’s (as they were called), vilified for anything from bidding up the price of RE, to undercutting unionized and / or European-descent tradespeople, to bribing drivers license examiners. The blatant racism made me sick then and it makes me sick now.

The common denominator here is that, unless you are on a commune, people don’t “deserve” to own property. Resorting to racism and / or xenophobia as an excuse for one’s own weakness, insecurity and inability to compete is pathetic.

#55 Grant B on 02.28.11 at 1:46 am

Garth, I have a question for you: where do morals and ethics come into “flipping” houses – both for the speculator and the realtor? Of course you can get burned but, beyond that, it just seems plain wrong. Of course, it seems wrong for someone on Wall St. to be buying soya beans when he has no plan to actually receive them. Those folks seem to come up with all sorts of investment vehicles to take the average persons money and, if they don’t get it that way, they’ll charge fees or convince you to buy insurance or something else like that. It’s all very disappointing. I guess they’re magic bullet is to always stay a few steps ahead so that the always convince folks to stay in their schemes. I don’t foresee any major upcoming crash and I’ll tell you why: there’s an endless supply of suckers to sustain this for some time and, even when they run thin, the “correction” doesn’t need to be much of a correction.

Grant

#56 Used to believe, now unsure on 02.28.11 at 1:49 am

Hi Garth, I sold my Toronto home 2 yrs ago and am still renting, after listening to your reasons for housing to drop (never did buy squirrel recipe book tho).

In that time, my old house rose 20%, and I threw away 2 yrs of rent. Despite all your reasons for housing to drop (and reasons for the delay), it hasn’t happened. I have to pay up if I want to buy a new home.

You give various reasons for the housing market to drop, and you keep extending the time frame for this to occur. You extended the break to occur after the March 5/35 changes… or are you again extending it to after the April rate rise? The govt. may have something else up its sleeve to prevent housing from dropping… we don’t know.

All I know is that even a broken clock is right twice a day, and, while housing will fall one day, you should be a little more balanced with your blog. What say you?

Still reading, but far more doubtful……….

So did you invest the proceeds in a proper portfolio? If so, you could have grown it 15% last year alone or, alternatively, secured enough income to live rent-free. Or is it easier to come here and whine? You may read this blog, but you do not learn. That fault for that is yours alone. — Garth

#57 wetcoaster on 02.28.11 at 2:01 am

I think the question that needs to be put to this Vancouver Sun writer is ” did you actually see the completed contracts for these 500 sales and their addresses proving offshore citizenship ? “.

If he didn’t then that is false reporting based on some salesmen bullshit and falls under CRTC rules.

#58 604genX on 02.28.11 at 2:09 am

Stay cool Garth. Here’s the same story with a positive spin:

1. The Tory-manufactured housing bubble has done wonders for the Canadian economy and created many jobs across the country while the rest of the world tanked. It is better than any other stimulus plan out there. And the bubble has so far only cost some press releases to drag demand forward.

2. Instead of borrowing tons of stimulus money the government has induced horny Gen Ys into borrowing zillions (guaranteed by both CMHC and their Boomer parents). The taxpayers are not (yet) on the hook for any of this stimulus plan.

3. When the bubble pops it remains to be seen if CMHC will also collapse. Canadian mortgages are recourse to borrowers (and guarantors). It means many will have to eat Kraft dinner for a long, long time. But the Canadian debt may dodge a massive hit if CMHC can enforce its security and nail the borrowers (both domestic and offshore).

4. So what if dumbass Chinese overpay Canadians for dirt in Toronto and Vancouver. No harm done in the long-term since prices will eventually revert to the long-term mean (especially after the Chinese bubble bursts). It is a massive transfer of wealth back into Canada – something we need. Bring on the Yellow Peril – the more, the better.

5. If the Tories can time the Canadian real estate melt-down with the re-emergence of the US/global economy then we may do okay. Exports may pick up to save us as all those real estate jobs evaporate. If not then it was a decent gamble.

It feels like the Tories know exactly what they are doing in this real estate bubble. It also looks like we will see an election soon because the Tories cannot hide this bubble anymore. They have to go all-in and try for a majority now before the bubble-pop and following period of pain.

Stay cool. This may not end well, but F has managed to avoid disaster for two years. If he can beef up CMHC enforcement and Canadian taxpayers may not be sandled with the debt from this real estate orgy after all.

I almost believe all that myself. I better cut down on the smack.

#59 Steve from Calgary on 02.28.11 at 2:15 am

As a reminder, the National Energy Program (NEP), sucked $100 Billion dollars out of Alberta.

#60 Patz on 02.28.11 at 2:17 am

#42, Nice rant Alex, keep it up.

Once again I would refer people to the article about the condo development at UBC where the mostly Asian residents objected to siting a hospice next to them. A commissioned report which included a profile of the residents found that almost half of them were Asian mothers with children whose husband had come to Canada with them and then returned to work in China.

The main reason they went back to China was that they would be unable to earn a living here (for various reasons, such as inability to transfer professional qualifications). They’re well off but not rich. And they are as vulnerable as any to real estate downturns. (Aside: the family situation is generally not emotionally healthy as the father is able to see his family only a few times a year.)

Here is the link:
http://tiny.cc/o1cdr scroll down to the article A Particular Problem at the Promontory

#61 Garth Rocks on 02.28.11 at 2:17 am

I don’t understand why people show up to this blog & cry foul by posting comments against Garth’s supposed ‘market will crash’ blog. He has repeatedly said that there won’t be any. US style crash – it will be a Canadian style slow meltdown…which will in the end have the same or similar consequences as the US & many other countries who got caught up in a housing bubbke.. That said, this blog is a conservative investors view of a major sector of the Canadian economy – housing.. The overarching thesis seems to be that buying property in Canada at this stage of the game is a bad investment based on a number of macro-economic fatctors that he has spelled out pretty clearly over a period of time. Each blog is another witty paragraph of support of his thesis or rebuttal of those who don’t support his theory..

No one is stopping anyone from buying real estate – but when you start considering this ‘investment’ you have to look at what the future will look like & make an educated choice. I keep coming back here because all of the Garth’s points – while sarcastic as hell – seem to hold water. They are conservative enough to make u stop & think that they are not farfetched, hey are realistic & maybe this dude actually knows what he’s talking about…

#62 Blobby on 02.28.11 at 2:21 am

I always find myself agreeing with pretty much everything you say garth. But the guy who wrote the letter is right about one thing.. If you go to coal harbour, every single building is sold out, but the place is a ghost town. I’d guestimate 60 or 70% of all the condos there are empty. And if you walk around coal harbour at night, it really is a ghost town.

Now why are they empty? Common sense says they’ve been bought as “investment” properties, or holiday homes… Local “common sense” says they’ve been bought by foreign investors as investments.

But who truely knows? Is there a way to find out who owns all these empty places?!?

But what the locals dont seem to understand is – IF these are investment properties – the minute there is a downturn in the market, they’ll be put on sale in an attempt to dump them quicker than a surrey girl drops her underwear… And will actually add to the downturn. (imho).

But, how do we know for sure who owns these places?!? They’re empty – but they’re not for rent!

#63 Utopia on 02.28.11 at 2:24 am

#29 Bill

“2 mil plus for a junk, hahaha….”

———————————————————-

Hey, I partied in that place when I was a kid. It has memories. Of course it is worth two million.

#64 Blobby on 02.28.11 at 2:25 am

@#39 InvestorsFriend (Shawn Allen):

Are you REALLY that clueless?

If your next-door neighbour DOESNT invest in a TFSA or any retirement package.. Then it’s NOT their tax dollars propping you up.. its YOUR tax dollars propping up them when they retire and have no savings and so need a state pension, healthplan, place to live, etc etc.

Its in the tax payers INTEREST to encourage people to save for their retirement.. not the other way around.

Sheesh.. what do they teach in schools?

#65 Not PC but I don't care... on 02.28.11 at 2:31 am

I drove by the line up for the Bosa property in Burnaby several times, all I saw were Chinese. It sold out in one day most likely to a very high percentage of Chinese. The Olympic Village lineups were again 90% plus Chinese and I am sure that a similare percentage of the sales were Chinese. From my experience many of them don’t work here or they park their family here while the husband works in China. They therefore don’t pay their share of taxes to live here but welcome the free medical and education for their families.

There are 1.4 billion people in China. You tell me what is going to stop the influx. If real estate corrects more will come.

When is the government going to wake up to this crap? When there is so damn many of them they run the government? If they want to come here so bad tax the bejesus out of them to do it. Tax them on their global assets and income. Sure everyone is happy that their home prices are up but look around, your the only one that speaks english in Richmond and none of your neighbors speak to you. When you sell and downsize where are you going to live and not feel like a minority? Moosejaw? Where are your kids going to be able to afford a home?

Our government is a pathetic group of short sighted, spineless sell outs. Thanks for turning a once amazing Vancouver into Shanghai.

Do not label me a racist. Many of my friends are Asian and they are more pissed off than me. They joke that this is exactly why they left China in the first place. I think if many of us were given the choice of having a more severe recession or pumping in as many Asians as possible to float the economy we would have chosen a more severe recession.

#66 Diffrent on 02.28.11 at 2:32 am

I’ve disemboweled three goats, two chickens, and a not-so-stray lhaso apso. The innards of each tell the same story: the market’s cooked.

If these methods sound odd to you, it’s because I long ago realized that reason had nothing to do with the market in Vancouver, so why not? If you can’t beat ‘em, join ‘em. But then, that’s exactly why I did not buy. If you can’t understand how it works, you probably shouldn’t invest. Voodoo real estate is no better than voodoo economics.

#67 5/35 crowd on 02.28.11 at 2:43 am

Hi Garth, thanks for this blog. My question is, should I renew my mortgage now and pay about $2000 fine or wait until 2012. My current rate is 5.44. Thank you

#68 Sea Wave on 02.28.11 at 2:45 am

All bubbles are fueled by anecdotes; people love a good story – the most effective tales incorporate an element of truth, something just plausible enough to enable people to rationalize their impulsive buying decisions, and justify such to their friends (who internalize said story, also buy, and pass it on …).

Sure, there are lots and lots of Chinese people in Vancouver, and undoubtedly some of them are actually rich. But as I scratch around under the surface a little, I’m left with questions:

– If Vancouver is flush with so many Asian millionaires, why is there no appreciable trickle-down effect into the greater economy of all these massively rich people (and their spouses/children) spending buckets of cash indiscriminately on other goods and services?

Median familial income in Vancouver is middle-of-the-road, essentially matching the median for all of Canada: http://tinyurl.com/494898a

– And why do the immigration statistics indicate that the average immigrant familial income in Vancouver is far below the average “Canadian born” resident’s income (and immigrant unemployment rates are higher)? http://tinyurl.com/4tx6rku

My money’s on “bubble within the bubble” … the majority of Richmond and West Side buying occurring as a consequence of predominantly local Chinese-Canadians desperately stretching their finances, attempting to “keep up with the Wongses”, and/or engaging in speculative “investment” buying, with much of this frenzy fueled by apocryphal stories of Mainland Chinese … their own tales of a “yellow-er peril”, if you will.

#69 Zorik on 02.28.11 at 2:51 am

Just wanted let you know guys in spelling
It is not anymore Vancouver it is Hongcouver!

#70 Priced Out Canadian on 02.28.11 at 2:57 am

don’t believe the letter is true. They claim they sold for 45% higher than what they paid in 2008. Can someone show me any home that went up 45% in this time. They have two million yet sound like children asking for advice.

Looked real to me. — Garth
*******

Well, if it was real, and it took 2 years to gain 45%, then I guess they were not the greaterfools for buying in 2008 eh? More importantly, if houses such as their’s went up 45%, then any 20% or even 30% correction will mean nothing. Good thing people are sitting on the sidelines with those types of gains.

#71 RoninBC on 02.28.11 at 3:00 am

Drive around the west side of Vancouver and you’ll see what was once a quaint tudor or craftsman style character home, once typical of the area, has now beeen replaced by a garish “monster home”. They often have Oriental trimwork and detailing so you know who are the buyers.

But what really pisses me off is their ruthless clear cutting of every tree on the property totally disregarding the neighbourhood. The city should not only impose it’s fines but require replacement of the tree, same species, same size.

Feng shui, don’t you love it?!

But hey, if it wasn’t for the Chinese buyers the “Cam Goods” and the “Bob Rennies” would be eating Kraft Dinner like the rest of us.

#72 Utopia on 02.28.11 at 3:09 am

Care of GameCalls.net, a recipe for crock-pot squirrel that is sure to keep ‘em coming back for more! Yum, Yum.
——————————————————–

CROCK POT SQUIRREL RECIPE

7 or 8 gray squirrels (Stanley Park squirrels are ok too)
Flour
Cooking oil
Salt and pepper
1-medium onion
8 ounces mushrooms, sliced
2-cans creamy chicken mushroom soup
2-cups sour cream
2-cups water

Dress the squirrels and cut them into pieces.
Salt and pepper them, then roll in flour.
Heat some cooking oil in a large frying pan and brown the squirrels. Put the squirrel pieces into a crock pot. Add soup, water,onions,and mushrooms.
Turn the crock pot to high for 1/2 hour.
Last, turn the heat to low, add sour cream, and cook for at least 6 hours

Enjoy!! Now what was that again about all the Vancouver newbie buyers having to renew in two years time at rates approaching 7%…?

That’s what I thought. Many of those people cannot afford quality food in their household budgets right now due to excessive indebtedness and high mortgage payments.

We have been hearing of the high demands placed on food banks there, in the so-called richest overpriced city in Canada for months now.

How dire will it be at 6 or 7% rates.

#73 The Original Dave on 02.28.11 at 3:12 am

So you didnt want people to buy a house 3 years ago, and you dont want them to buy a house now, and you dont want them to buy a house in a year or so!! you want people to rent for around 5 years and pay all the rent on hope the prices will go down, so if they rent a 3 bedroom apartment for 1600 for 5 years that would be 96,000, so even if prices went down 96,000 to them its still the same, plus if they buy in a year or so interest rates would be much higher than people who bought before and thats extra probably around 40,000-50,000……all in all they will loose around 140,000 if they buy in 2 years from now instead of buying 3 years ago.

—————————————

Garth has explained the numbers dozens of times. There’s these two special words that when they’re combined let you know that there is another angle that you’re oblivious to: Opportunity Cost. The cost of so much money going into a downpayment, mortgage payment, upkeep etc. and not being invested while earning pretty good/stable returns. You also forget to mention costs like property taxes, insurance, utilities, and did I mention up keep?

You know, you can actually sit down a decipher the cost of home ownership per month with all the known variables. You can also compute how much an individual would earn by simply renting right now and investing the difference. You’ve either not collected the data properly or you’re too narrow minded. You represent the common person’s thought process: “that if you’re spending it on rent, you could have put that all into your house.” That is very flawed logic. Too many variables are not considered.

#74 Todd on 02.28.11 at 3:25 am

I wonder if people won’t take Garth or the average canadoshmuck’s advice, maybe they’ll consider the advice of one of the richest human beings on earth who got that way for making wise investments.

“All things considered, the third-best investment I ever made was the purchase of my home, though I would have made far more money had I instead rented and used the purchase money to buy stocks. (The two best investments were wedding rings.)”

“For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come,” Buffett said about his house in Omaha, which county officials currently value at $660,200.

“But a house can be a nightmare if the buyer’s eyes are bigger than his wallet and if a lender — often protected by a government guarantee — facilitates his fantasy.”

Note how he considers his home an investment in the memories it’s given him and recognizes it as a poor financial investment, relative to stocks. I’d have to agree. If I only made $630k on a $31k investment over 52 years, I’d be pissed. The average annual return for the NYSE over the same time frame would have made me a millionaire several times over.

At any rate, I’m rooting for blood in the streets these days. Idiots deserve what they get and watching dumb, uninformed, ignorant herd mentality people get what’s coming to them is one of my most loved pastimes. Can’t wait :)

#75 pete on 02.28.11 at 3:28 am

This whole Chinese thing is just a sign of how desperate the RE industry has become.

They know no-one here is buying so they’re marketing to foreign buyers. It’s been a very long time since I’ve seen a MSM article about a happy young couple buying their first home.

I think there have been four groups of people expanding the bubble in Vancouver, and the foreign buyers is the last group left standing – but not for much longer IMO.

1. People who got lucky and bought before the bubble and sold then wiped out their profit by buying somewhere bigger at inflated prices. There are possibly some of these people renting just now waiting to grab a again but, anecdotally, everyone I know who sold at a huge profit ended up buying again. So I think these people are mostly out of the market now.

2. Investors. They stopped buying a while back. All that are left are the amateurs who still think prices are doubling every year. They’ll soon learn and investors will be completely out of the market.

3. People who can’t afford houses and bought at 0/5% down and 35-40 yr mortgages and are now renting from the bank for the rest of their lives. With interest rates rising these people are also out. Forever.

4. Garth’s ‘Yellow Peril’ (don’t like the term – it’s racist – but I guess you’re being facetious) – they will soon learn that they are needlessly paying inflated prices and will stop doing so.

The market is so obviously going to crash.

#76 Anthony on 02.28.11 at 3:40 am

“Richmond is turning into a Chinese-dominated community”

Back in 2006, according to the Canada Census, “65.1% of the population [of Richmond] is a visible minority” and “The predominant minority group in Richmond is Chinese, at 44% of the total population”.

http://www.richmond.ca/discover/demographics/Census2006.htm

That was 5 years ago.

#77 Coho on 02.28.11 at 3:49 am

When people with one to two million in cash are afraid that they will be priced out of a housing market (buy now or buy never), then we’ve moved from the programming of the masses which is often perceived as a herd mentality, to full blown mind control.

Comfort and stability is really just a state of mind. People with money worry about keeping it and people without money worry about making it. And there are those of course, who are good at making it and keeping it, but they never have enough. Something is playing with our minds. Fear abounds, which scares us into traps and it is fear which keeps us in them.

Can’t blame people for being mired in doubt and confusion. After all, we’re constantly being bombarded with lies, misinfo, disinfo, spin, and half truths. This is by design. Feed the little people contradictions to confuse, confound and keep them off balance.

Finding truth is like mining for gold. You must sift through tons of worthless rock and sand to find a few grains of gold. Once you access it, you must grab it and hold on before the propaganda machine buries it again.

#78 debtified on 02.28.11 at 3:54 am

Garth, I am with you – I also think that that Cam dude is full of 拉屎 (whatever that means).

However, I think a Made-in-China real estate behaviour in Vancouver is now becoming painfully obvious. It will become even more apparent as more and more houses/condos remain unoccupied despite having been purchased. This is the same thing happening in China as proven by the so-called “ghost cities” where millions of houses/condos remain empty BUT they are all “sold out”.

I just spoke with a Chinese girl I used to have a relationship with. She confirms what we already know – they are all gaga with real estate there (all her family members are active participants with most of their assets in real estate). This behaviour is now increasingly becoming a major component of their export to Canada – first stop: Vancouver. In general, it is now cheaper to buy in Canada than in China (in comparable locales).

A Chinese person firmly believes in the value of real estate. I don’t think they have ever seen, in their whole history, the value of real estate going down. They’ve lost faith in the stock market – SSE Composite Index is still under half of its value at the onset of the last recession. They now use the real estate, not just an investment but also, as a savings account.

If this analysis proves to be accurate, Garth, I think your call of a “correction” will turn out to be overly optimistic. It will start in China – once real estate there go bust, it will eventually reach our shores. It will be like a double whammy for us with the supply of imported Greater Fools from China drying up AND, here’s the kicker, the demand of construction and production raw materials we export to China will also dry up!

Just for the record, I don’t think any correction in real estate here in Canada (or anything worse) will be good for anybody – homeowners and renters alike. It will be bad for the whole country. But it has to happen for us to regain our sanity. I am ready.

#79 Debt's Dark Embrace on 02.28.11 at 4:16 am

Central Bank to hold firm on rates but only for six more weeks !!!!!! You only have another six weeks so get in now or be priced out forever!!!!!!!! hahhahaha. Just more helium for the bubble. Six weeks from now there will be another announcement. ……….central bank to hold firm on rates for another four weeks!!!!! Get in now before you are priced out forever. On and on it goes

#80 Lance on 02.28.11 at 4:20 am

The reality is, once our friends across the Pacific Ocean get a whiff of solid price declines in real estate in Vancouver/Canada, they will move elsewhere with their money. And then watch the price of tulips…err…real estate… drop like a rock.

#81 BPOE on 02.28.11 at 4:25 am

Dirt cheap housing in Locarno one of the top 3 locations in Canada bar none. Speaking of Kool Aid, I think Garth needs to do what he does best and focus on the rest of Canadian Real Estate. I’ve noticed his recent posts are becoming more paranoid about the yellow peril, and planeloads of Chinese investors. It’s time to refocus the blog IMO and just shrug your shoulders and state ” Hey I don’t get Vancouver”. People who live here get it. We don’t look at higher interest rates, Employers (Like our American friend in rain barrel Seattle), etcetcetc. Folks this is beyond “different this time”. Do you research, read the news, talk to locals. There is a tsunami of cash coming from the World’s richest countires flooding Vancouver. It cannot be stopped. It will never stop. Dropping like a stone Seatlites like the American post useless figures about how great Seattle is because of Microsoft just don’t get it. Wanna see prices go into the stratosphere just raise the 5 year rate to 25%. Weak Canadian bids will be mopped up quick and it’s off to the races. This year yiou will find out the whole premise of higher interest rates is a scam. Mark my words there will be no higher interest rates. IOt’s scare mongering and BS and just plain immoral to publish out and out lies. Check back in December of this year and see where the rates are at. I’m thinking down a percent or 2.

#82 Jay Currie » Snort! on 02.28.11 at 4:28 am

[...] Garth Turner guides us to a 2.2 million dollar home in Vancouver. [...]

#83 BPOE on 02.28.11 at 4:32 am

I don’t think Garth has ever been to Richmond. If he were to put on a talk there would only be disgruntled Canadians who can no longer afford to live there. This is flood plain Real Estate folks. Even on a flood plain investors are flooding the market
****************
By the way Garth, Richmond isn’t turning into a Chinese dominated community, it has long passed that and many Canadians won’t live there as a result. Given that there are over a billion Chinese, even if half of one percent of them start coming here then it would dramatically change things. A co-worker’s kid is the only Caucasian in his elementary school class.

I guess you missed my last talk there. Pity. — Garth

#84 TS on 02.28.11 at 4:38 am

#42 Alex on 02.28.11 at 12:55 am

Launching a formal complaint to the Canadian Broadcast Standards Council to point out shoddy ‘reporting’ is one of the best ideas I have heard in a long time. Maybe if hundreds of thousands of us did that things would change.

The CBSC is an industry run group….and as such I really wonder if it has any teeth and if its members actually face any real penalties.

Here is a web link to the CSBC web site and the codes of conduct for the CSBC:

http://www.cbsc.ca/english/codes/rtnda.php

There is a short blip on Accuracy in the code as well as something on Authenticity. I suppose both sections could be referenced to complain about some of the shoddy stories recently broadcast.

#85 TS on 02.28.11 at 4:48 am

For all of those folks who have a “but it’s different here” attitude… Phoenix was touted as a city that was “different” i.e. climate, endless stream of retirees etc. Prices are off over 54%…

This link takes you to some interesting material. Surprise, surprise…. price to rent and price-to-wage ratios actually do matter.

http://howestreet.com/2011/02/interactive-map-case-shiller-home-price-drop-peak-reflections-flying-monkeys/

#86 TS on 02.28.11 at 4:52 am

Japan provides a good early warning for the impact of macroeconomic trends… including housing bubbles and the effects of demographic shifts…i.e. retirees.

Here’s an interesting piece on how demographic shifts are likely to affect future tax rates….

http://howestreet.com/2011/02/worlds-largest-pension-fund-sell-japanese-bonds-japans-demographic-time-bomb-officially/

#87 TS on 02.28.11 at 5:02 am

It is estimated that there are currently 64 MILLION vacant homes in China….sufficient to house about 200 million people or about 15% of China’s population. So we are to believe that with that many vacant houses that Chinese investors are flocking to Vancouver and Toronto?

http://www.businessinsider.com/there-are-now-enough-vacant-properties-in-china-to-house-over-half-of-america-2010-9

#88 Jay Currie on 02.28.11 at 5:18 am

It’s adorable!

Dear God I hope my wife does not see this otherwise we’ll have to sell the kids and move back to Vancouver.

Too cute!

#89 Brian1 on 02.28.11 at 5:34 am

Great insight Garth, as always.
Thank you Tiger Baby for your contribution.
Tim: everyone’s goal is to maximise profits.
These new Canadians are injecting capital into our country. What have you “true Canadians” done for me lately.(Jeff Smith beat me to it).
#28 John:Rents will fall too. Be prepared tomove regularly or to renegotiate. Maximise profits.
Alex: I enjoyed your well written piece. I cannot see how Brian Morton can ignore it, but he probably will.

#90 RubyToozday on 02.28.11 at 5:47 am

Hi Garth,

I’ve been lurking on your blog here for a couple of weeks. I just wanted to pop in and say thanks for being a guiding light for those of us that are bewildered about real estate and investing, in a culture that’s gone batshit crazy on so many levels.

Life isn’t a dress rehearsal, and for those that choose to become slaves to so-called “real” estate debt and keeping up appearances (usually to others like themselves and fuelled by mass media) god help ya.

I’ve ordered Money Road, and eagerly await its arrival. I’m now off to have a delicious sip of rum. :-)

Thanks!

#91 jane54 on 02.28.11 at 6:07 am

The federal government could stop this non-resident speculation if they wanted too, by increasing the capital gains tax for non-residents to a level which is non-acceptable to potential foreign buyers. Would they still buy for example with a 60% capital gains tax? If the government does not act re tax increases for such house buys, then the government must be content with this situation.

For those cheering the purchase of local RE by non-resident buyers, be careful what you wish for. If these houses then sit empty who will support the local shops, the schools and the community. No-one will actually live there, just hold empty houses until they are worth more..

Here in England we have a problem with pretty little chocolate box villages being brought out by weekend owners. They become too expensive for the village children whose families have lived there for generations. With not enough business during the week first the schools close, then the post office and general store close and lastly the pub goes and you a have a ghost village. I see a ghost Vancouver on the horizon.

#92 Robert Dudek on 02.28.11 at 6:28 am

#18 Jeff wrote…

“A co-worker’s kid is the only Caucasian in his elementary school class.”

So I guess the instruction language in that school is Mandarin?

Those “Chinese” kids are going to turn out just as Canadian as the “white” kid.

The implication of your xenophobic post is that Caucasians are Canadian and Asians aren’t.

Disgusting.

#93 Macrath on 02.28.11 at 6:36 am

#265 David on 02.27.11 at 4:20 pm (yesterday)
BTW, if you wanted to hedge a long agricultural commodities position, long THI might do the job pretty well.
——————————————————————————-

There could be some very bad news in the works for the genetically modified fast food industry and Monsanto . A Jim Jones black swan event for the Tim Horton cult.

“The new pathogen appears associated with serious pervasive diseases in plants – sudden death syndrome in soybean and Goss’ wilt in corn – but its suspected effects on livestock is alarming.  Huber refers to “recent reports of infertility rates in dairy heifers of over 20%, and spontaneous abortions in cattle as high as 45%.”
This could be the worst nightmare of genetic engineering that some scientists have been warning for years. “
http://www.i-sis.org.uk/newPathogenInRoundupReadyGMCrops.php

#94 Robert Dudek on 02.28.11 at 6:51 am

Shawn Allen wrote…

“Since the government has forced my neighbour to subsidise me I will go along with it, but I don’t see why my neighbour, who may not be in a position to save – maybe he has 8 kids – should not be complaining bitterly.”

Taxing is not only about fairness, but also about promoting the choices we think are better for society.

First, the guy with 8 kids probably gets a good child-tax benefit. He is a great position to get RESP money from the gov’t (perhaps even by borrowing). Schooling from grade 1 though to Uni is heavily subsidized (rightly so) so he wins there big time.

Second, it’s not necessarily income tax that will rise; consumption tax could rise and has risen notwithstanding the recent drop by 2 percentage points. Incidentally how stupid was that move by Harper, coming on the eve of a financial crash.

We are a nation with a propensity to over-consume and under-save, so I think there is a solid case to be made for discouraging spending and encouraging savings. In Japan, the opposite policy would probably work better.

Lastly, it was his choice to have 8 kids. Live with the consequences of your actions.

#95 Peter on 02.28.11 at 7:03 am

Look, I live and work in Hong Kong and I can tell you that not only will it not end well in Canada, but it won’t end well in China either. The ‘threat’ is doubtful, and even if buyers on the margins from the mainland do end up bidding up prices, when it all comes crashing down everyone will lose money.

Chinese buyers are doubly at risk since they are in their own property bubble. Wait or one bubble or the other to burst and reap the rewards of delayed gratification (i.e. waiting).

#96 Daisy Mae on 02.28.11 at 8:24 am

“What don’t you understand about interest-bearing assets inside an RRSP, less-taxed assets outside a shelter and growth assets in a TFSA?” — Garth

I do understand what you are saying. It’s overwhelming for the average lay person. Therefore, most if not all of us, need advisors.

Women like you are hot. — Garth

#97 Paulson on 02.28.11 at 8:45 am

What happens if China has its own hard landing? Down goes commodities AND Canadian real estate. A double-whammy for Canada.

http://www.planbeconomics.com/2011/02/16/chinas-hard-landing-will-cause-a-commodity-crash-gary-shilling/

#98 Shane on 02.28.11 at 8:57 am

Garth, When will the Chinese wake up and smell the coffee about the realestate market correcting??

#99 SquareNinja on 02.28.11 at 8:58 am

C’mon man… the unassembled snowmen are going up in price! Buy now or be priced out forever!

#100 Moneta on 02.28.11 at 9:00 am

Garth, I have a question for you: where do morals and ethics come into “flipping” houses – both for the speculator and the realtor?
——–
Morals and ethics are rules of play which usually favor the rich.

When a large enough segment of the population can not get ahead by respecting the established rules of conduct, they disregard them.

We are there now.

#101 Moneta on 02.28.11 at 9:03 am

BTW, if you read up on the history of most major cities in North America, you will notice that they were not built on ethics and morals but on the survival instinct and trade.

#102 The Apocalyptic One formerly Old is Gold on 02.28.11 at 9:03 am

It will not end well!

It’s time to change the punch line to:

IT WILL END DISASTROUSLY

I remember how many realtors and car salesmen had to go start flipping burgers at the end of the 80’s, this time it will be a heck of a lot worse, there is no other possible outcome.

#103 somecatchphrase on 02.28.11 at 9:03 am

Vision of the future:

Boomers, in desperate need of a medical procedure, facing life threatening and painful waiting lists in the Canadian public health system, desperately trying to sell their McMansions, with no bidders. Trying, desperately, to sell their home so they can afford to travel abroad and pay for a procedure that isn’t readily available here in Canada.

http://www.theglobeandmail.com/report-on-business/commentary/barrie-mckenna/health-care-costs-our-single-most-pressing-budget-item/article1922693/

#104 bigrider on 02.28.11 at 9:10 am

#28 John.

You personify how dumb most RE buyers are .Real estate always goes up ???

RE always is a good buy no matter what ,right? Always better to own than rent, right?

Zero formal education on your part right? Right.

#105 Moneta on 02.28.11 at 9:13 am

But the Canadian debt may dodge a massive hit if CMHC can enforce its security and nail the borrowers (both domestic and offshore).
——-
They can’t have their cake and eat it too.

If the borrowers get shackled, that would mean even less consumer spending. That means many more business defaults than if homeowners could walk. More business defaults means more house repossessions.

It’s called the domino effect.

#106 The Apocalyptic One formerly Old is Gold on 02.28.11 at 9:22 am

#75 pete on 02.28.11 at 3:28 am wrote:

4. Garth’s ‘Yellow Peril’ (don’t like the term – it’s racist –

I am an immigrant from India and have to say that there is nothing wrong in identifying people by race, culture and ethnicity. More than race, it is cultures that differ and people of different cultural backgrounds have different ways of thinking. Multiculturalism as a mandated policy only promotes segregation, that is why there are so many Indian neighborhoods in Surrey where the culture is Indian, not Canadian, the same with Richmond, Richmond Hill, Markham etc.

Keeping cultures segregated makes for an unhealthy national culture, ghettoizes the nation and city, promotes real Racism not what the media calls racism. In the 60’s and 70’s, many Indian professionals immigrated to Canada, and most of them integrated themselves into the culture, raised their children as Canadians. Since the 80’s when MULTICULTURALISM became government policy, most immigrant kids now think of themselves as Indians or Punjabis rather than Canadians, it is they who think racist for they feel that they cannot be a part of the Canadian culture since they were raised in Little India rather than Canada. They are taught to think that their culture is somehow superior to that of their adopted country, governments should promote integration, require people to learn the language, history etc. of the nation where they live not glorify the imagined greatness of their ancestral lands.

#107 Utopia on 02.28.11 at 9:28 am

#90 RubyToozday wrote……

“Hi Garth, I’ve been lurking on your blog here for a couple of weeks. I just wanted to pop in and say thanks for being a guiding light…. I’ve ordered Money Road, and eagerly await its arrival. I’m now off to have a delicious sip of rum”.

———————————————————-

That is fantastic.

I have been seeing a lot of comments lately from newcomers. This place really needed a fresh infusion of new blood and more boozers are always welcomed, even encouraged, to participate.

So lets see….a crisp copy of Money Road, a 40 pounder, a Friday night and just a hint of attitude about the daily topic after reviewing some house porn or Garth’s picture of the day…..

And Voila! You will be a regular poster in no time flat.

#108 David on 02.28.11 at 9:42 am

If the photo at the end was of an empty lot, the discussion would rightly be centered on whether a building lot near Locarno was worth $2.2 million or not.

But I give Garth credit for one thing….he can get a ‘cheap’ laugh out of Vancouver real estate!

#109 AM on 02.28.11 at 9:44 am

#67 5/35 crowd on 02.28.11 at 2:43 am

“Hi Garth, thanks for this blog. My question is, should I renew my mortgage now and pay about $2000 fine or wait until 2012. My current rate is 5.44.”
_____________________________________
Use a morgage calculator (available on line) and compare the cost of your morgage at 3.7% vs 5.44%. Add the $2000 (and other related legal fees) to your new principle amount on the 3.7% mortgage. Your monthly payment will drop.

Your biggest risk/uncertainty is having to renew in a year, but the consensus seems to be that you will likely be reniewing at or near your current rate of 5.44% if you wait till then.

#110 Jarry Street on 02.28.11 at 9:50 am

@#65 Not PC but I don’t care.

Yes the native population of Canada must have felt the same way all those centuries back. I am not racist, but i have alot of white friends that feel the same way.

Of course you’re not. — Garth

#111 Debt's Dark Embrace on 02.28.11 at 10:03 am

#58 604genX

WOW. You actually understand. You got it exactly right. I am not alone !!! ………………………………………………………………………
#58 604genX on 02.28.11 at 2:09 am

Stay cool Garth. Here’s the same story with a positive spin:

1. The Tory-manufactured housing bubble has done wonders for the Canadian economy and created many jobs across the country while the rest of the world tanked. It is better than any other stimulus plan out there. And the bubble has so far only cost some press releases to drag demand forward.

2. Instead of borrowing tons of stimulus money the government has induced horny Gen Ys into borrowing zillions (guaranteed by both CMHC and their Boomer parents). The taxpayers are not (yet) on the hook for any of this stimulus plan.

3. When the bubble pops it remains to be seen if CMHC will also collapse. Canadian mortgages are recourse to borrowers (and guarantors). It means many will have to eat Kraft dinner for a long, long time. But the Canadian debt may dodge a massive hit if CMHC can enforce its security and nail the borrowers (both domestic and offshore).

4. So what if dumbass Chinese overpay Canadians for dirt in Toronto and Vancouver. No harm done in the long-term since prices will eventually revert to the long-term mean (especially after the Chinese bubble bursts). It is a massive transfer of wealth back into Canada – something we need. Bring on the Yellow Peril – the more, the better.

5. If the Tories can time the Canadian real estate melt-down with the re-emergence of the US/global economy then we may do okay. Exports may pick up to save us as all those real estate jobs evaporate. If not then it was a decent gamble.

It feels like the Tories know exactly what they are doing in this real estate bubble. It also looks like we will see an election soon because the Tories cannot hide this bubble anymore. They have to go all-in and try for a majority now before the bubble-pop and following period of pain.

Stay cool. This may not end well, but F has managed to avoid disaster for two years. If he can beef up CMHC enforcement and Canadian taxpayers may not be sandled with the debt from this real estate orgy after all.

I almost believe all that myself. I better cut down on the smack.

#112 Peter May on 02.28.11 at 10:05 am

Here is something worth $2.5 mill. In the hammer! Or maybe I’m just old fashioned!!

http://www.realtor.ca/propertyDetails.aspx?propertyId=9348908&PidKey=815127518

#113 Slopetester on 02.28.11 at 10:10 am

Egypt Bans Export Of Gold “In Any Form”

According to Reuters. “Egypt has issued a ministerial decree immediately banning the export of gold in all its forms, including jewellery and ornaments, until June 30, the official news agency MENA said on Sunday. “This decision, which comes in light of the exceptional circumstances the country is passing through …, is to preserve the country’s wealth until the situation stabilises”

Good thing the Egyptians didn’t take Garth’s advice a month ago and sell their ‘barborous relics’ …

I hear this is to protect artifacts. — Garth

#114 V Brad on 02.28.11 at 10:11 am

@ 81

BPOE, every time you bring up Seattle, you only worsen your case for Vancouver. Seattle is a bigger, nicer city, with better weather than Vancouver, far better industry and business case for sustainability, along with far better educated people than here in Vancouver. Didn’t we go through this already a couple strings ago? Like I said earlier, it sounds like you have a hard on for Seattle and you’re jealous. Learn to be more subtle.

You say “people who live here [Vancouver] get it.” Well, I live here, and I don’t get it at all. I think it SUCKS and has absolutely nothing to do. Your overly broad generalization of the population in Vancouver is skewed. Most of the people I know here are ready to leave it and feel it has lost its way in the past decade. I would hardly call “The American’s” data and supported facts useless as you put it. He/she has valid points that shock me to be perfectly honest and should be taken seriously. They only paint a picture of what is already happening here and will continue to happen. I’m sure you know that already, however, and that is why you’re always on here having to pump pump pump the Vancouver market. No reason in the world to do that unless you’re sweating, which clearly you are. Like I said, I don’t care what the CREA sayas; it is all bull shit. Inventory all around me is sitting much longer and prices have come down. You’re only cherry picking certain data to pump it up.

Anyway, that’s beside the point. Oh yes… I remember now… Rates ARE and WILL push up again this year. It has already happened this year, so your little theory is blown right out of the water. Again, you’ve lost credibility. Will you just go away? You sound worse than a used car sales person from Nanaimo.

#115 S.B. on 02.28.11 at 10:14 am

That explains it – nervous Yuppies and DINKs are driving the market.

It’s important to buy in the very best area, otherwise young Finn or Hailey will not receive proper after school enrichment! programs ;) The horrors.

-January 1999

Dear Garth,

We could purchase stocks in the $300-400 range. But we simply can’t fathom paying that for stocks listed in this range. We can’t bring ourselves to buy what appears to be grossly overpriced investments. Our issue is that we need to invest for retirement.

I can’t believe I am about to ask the following question but is it possible that the NASDAQ is in fact different and will be the exception to the rule? Have you carefully analyzed the NASDAQ market?

(note: a nervous over-educated yuppie questioning an expert’s wisdom, the same people who engage in doctor-swapping).

This blog has detailed the wisdom of a balanced portfolio with various bonds, preferreds, trusts, index and sectoral ETFs. Nobody with less than seven figures to invest should be scooping up individual stocks, and everyone should have a realistic split between fixed-income and growth assets, ensuring the right ones are sheltered and unsheltered. Is it time for another post on this? — Garth

#116 GTA Girl on 02.28.11 at 10:18 am

The decline has already begun in the GTA. I sold a single family 4bedroom in Vaughan in 2003 for $400k. Right during slump, when SARS and ice storms hit Toronto. Since then homes of that area climbed to a ridiculous $480-500k and then flattened out. Now I see a glut of homes on the same street are going for $400-$425k And they aren’t selling.

Can’t believe some idiot would buy a new build condo for same price or more. Wait a minimum of two years and be at whim of a developer. Must be a investment scam in those new condos. Oversupply must be insane. Even some in the industry are wondering when it will bottom out. Because it will.

And note: after 2003 I bought a nice property and built in an area i love See value went up. But I put no faith in it. Never look at a home as a bank machine.

#117 BDG-YYC on 02.28.11 at 10:23 am

#38 Industrial Guy on 02.28.11 at 12:50 am

“So $2.00 a Liter gas is coming …… July – August 2011? It’s very possible. If this happens. There will be growing pressure for a Made in Canada oil pricing policy like Trudeau’s National Energy Policy …. Will a pro-Alberta Prime Minister refuse to act in the best interests of Canada? Remember Prime Minister Harper was a member of the Alberta Agenda Group. The authors of the “build firewalls around Alberta” letter.”
__________
Please do expand. And which “Canada” would you be referring to?

#118 Mackie on 02.28.11 at 10:28 am

How can I get in on that snowman deal. Looks like a good buy for a smart investor in the sunny south. Lol

#119 Moneta on 02.28.11 at 10:33 am

Lastly, it was his choice to have 8 kids. Live with the consequences of your actions.
———-
It might have been his choice but not the 8 kids’.

These kids will have an impact on my kids so they should be treated right.

#120 robert in london on 02.28.11 at 10:40 am

I notice our currency is up almost 2% since last Wednesday. Higher interest rates should create a ‘virtuous’ circle to a higher Canadian Dollar – perhaps much higher – unless China collapses tomorrow. Was it Mr. Turner who once said he would be shorting it with both hands at $1.04? Unless the US Dollar stops its descent the Loony rise will become even more self reinforcing as American capital seeks a better return in both the FX and interest rate world. Not to mention the commodity ‘value’ attractiveness inherent in our pseudo bronze tokens. Housing prices are nuts but under this dynamic I would not be holding my breath for any serious declines just yet.

It was not me who said that. I see $1.10. — Garth

#121 House Porn on 02.28.11 at 11:00 am

Waiting for interest rates to fall is like watching house porn waiting for Sophie Allsop to have a nipple slip. Sure you can dream about it but interest rates will not rise in April with well lubed oil prices. The economic recovery will orgasm shortly and the next refractory period will be the summer and than the fall for a possible interest rate hike. By that time many new episodes of house porn will have goosed us yet again. Garth please get rid of the old people on your blog, we want Sophie. Thxxxs.

You need to get. Out. More. — Garth

#122 V Brad on 02.28.11 at 11:04 am

@81

BPOE, you should check out where my friend just bought. Would you like to guess where? S E A T T L E. Yes, yes, looks like word is getting out that there are much better places to live than here. Apparently, they aren’t the only ones either going there. He called me and said several others from BC are realizing its much nicer there and they’re buying. It looks like people around here are using their BRAINS and EYES to research it instead of listening to the blind “best place on Earth” campaign. Face it, it is over. Vancouver is getting very tired and too full of itself.

I’m going down to Seattle in a week to check it out with my wife. It would be a difficult move with my job, but I am in the process of posting for work there. Like I said, if I could live there again, I would in a heartbeat. I’ll report back what I think of this building in particular. It looks very nice, though. It isn’t a bunch of flash and trash green glass that we throw up around here with cheap “lipstick” finishes.

http://www.1521second.com

Check out the testimonials on their website. It looks to be a diverse building and neighbourhood. It sure looks to me like they like and accept Asians, Europeans, old people, young people, gay people, and anyone who chooses to live there. Funny how we seem to be fed propaganda that constantly says otherwise. Start using your brains, people.

Chew on that for a while…

#123 CREA Circle Jerk on 02.28.11 at 11:18 am

We’re flying to Vancouver at the end of April to attend my wife’s friends wedding. The soon-to-be bride works as a producer at a local CBC radio outlet, and her future husband apparently has a fairly good job too.

The shocking part is that my wife told me yesterday that they’re renting and plan to do so for the foreseeable future because they can’t afford to buy a house. I would guess their combines income is $150,000+.

This rampant speculation, especially in places like Vancouver, is pricing young people with good jobs out of the market without question.

Buying a house is not always the wise move. We should have learned that by now. — Garth

#124 cool on 02.28.11 at 11:25 am

I work at a chemical manufacturing site with many buildings such as Admin, warehouse etc.

The management had to change a building number(not sure what number it was) because some chinese employees considered that number unlucky in their culture!!!!!!!!!!!

Im an immigrant myself , but this is too much.I think Canadians are too generous.Most immigrants do not come here to see this crap.

#125 kilby on 02.28.11 at 11:29 am

We live in a leased 600 sq. ft. condo on the waterfront in North Vancouver, the owners (3) live in mainland China. There are two identical buildings with a total of 190 suites, we were in the common storage area yesterday and counted the number of lockers that were being used…..27 only. These buildings are having their first mandatory general strata meeting in 2 weeks and it will be a pretty empty room! There is a unit for sale in our building for $940k, the owner bought pre construction in 2007 and has never lived in the unit. A similar unit sold before Christmas for $1.1 million…..this one is not moving. This is a great location on the water and if priced correctly would sell but just lots of lookers. Have seen only moving truck since New Year and probably a renter like us.

That is $1,600 a square foot. Are you all on drugs? — Garth

#126 Bart on 02.28.11 at 11:32 am

Odyssey Petroleum is trading at 2 cents today. Up 33% since Friday. Stock symbol ODE on TSX venture exchange. http://www.odysseypetroleum.com/properties.html

So? — Garth

#127 David on 02.28.11 at 11:33 am

People in glass houses….

Charles Ferguson ripped into Wall Street last night at the Oscar ceremonies.

Now, I’m no apologist for Wall St., but isn’t there something surreal about Hollywood, where people can make untold millions for 6 weeks ‘work’ (!) on a movie, enjoy a life of immense mindless privilege, and have the self-righteousenss to criticize anyone’s greed..all after they just personally profited from making a movie about it?

Maybe it’s just me, but it seems like these people are most opinionated about saving the world, but don’t even live in it.

#128 BrianT on 02.28.11 at 11:42 am

#106Apocalypse-Look at the wealth stats for Canada or the US or most countries. Multiculturalism is very useful as the likelihood of a popular uprising during hard times is decreased (not eliminated-decreased). The more the differences between different groups are stressed, the less notice is given to the reality that less than 15% of the overall population is making it.

#129 BrianT on 02.28.11 at 11:47 am

#126David-You are right-that jerk had no right to shine a flashlight on these cockroaches. Relax and let the vaunted SEC do God’s work like Bernie said in his slammer interview the other day.

#130 AG Sage on 02.28.11 at 12:02 pm

#72 Utopia on 02.28.11 at 3:09 am

My original Joy of Cooking has a squirrel recipe. Heck, it has instructions for skinning and gutting. No joke.

(Also has a recipe for crow.)

#131 BrianT on 02.28.11 at 12:12 pm

#74Todd-Buffett/Berkshire would have crashed and burned without the taxpayer bailout-the guy has a lot of nerve talking about government guarantees.

#132 been there seen it on 02.28.11 at 12:20 pm

In the bubble of the 80’s, in Japan, the “yakuza” (criminals) speculated in real estate with many others.

But being who they were, unlike the many others, they never paid their mortgages when the bubble burst.

The banks took the losses, the gov. bailed them out.

Ref: Contemporary Japan, by Jeff Kingston, just published, 2011.

Draw your own conclusions.

#133 AG Sage on 02.28.11 at 12:23 pm

#81 BPOE on 02.28.11 at 4:25 am
>Check back in December of this year and see where the rates are at. I’m thinking down a percent or 2.

Do you know how the bond markets work? Do you really expect a flight to safety into Canadian bonds in November after your housing has already fallen 10%?

Oh, wait. Vancouver doesn’t have a bond market. Magic flying Asian monkeys provide liquidity. Silly me.

#134 Eric on 02.28.11 at 12:26 pm

Here’s one from The Globe and Mail of February 26, 2011. Asking price $698,000, Selling Price $899,500. Days on market: 6.

http://www.martyhomes.com/Properties.php/Details/588

#135 Crazy on 02.28.11 at 12:29 pm

#74 Todd

At any rate, I’m rooting for blood in the streets these days. Idiots deserve what they get and watching dumb, uninformed, ignorant herd mentality people get what’s coming to them is one of my most loved pastimes. Can’t wait.

________________

You see? Another person who wishes evil to befall his neighbour.

#136 Petrol Head on 02.28.11 at 12:35 pm

In the end, there will be much debt but very little parties.

Vancouver, you can have it, it’s long overdue for an earthquake.

#137 Pr on 02.28.11 at 12:37 pm

The Action Canada Task Force on Canadian Household Debt released their final report on Friday. The report echoes many concerns like this one:

“…it would take only a 0.5% increase in interest rates for 1.1 million Canadian households to become at risk of defaulting on their consumer credit or mortgage-related debt.”

OH my god!!! I just ran outside to put a FOR SALE sign in front of my house!

Yeah!…This will not end well.

#138 DaBull on 02.28.11 at 12:40 pm

#74 Todd on 02.28.11 at 3:25 am

Note how he considers his home an investment in the memories it’s given him and recognizes it as a poor financial investment, relative to stocks. I’d have to agree. If I only made $630k on a $31k investment over 52 years, I’d be pissed. The average annual return for the NYSE over the same time frame would have made me a millionaire several times over.

Not quite right…

A 31k investment that was now worth 630K would provide an annualized return of 5.9586% over 52 years.

The DJI in Jan 1959 was at 601.71 and as of today it’s at 12,223.16 which is an annualized return of 5.9577% over 52 years.

They are both gave almost the exact same ROI. On the other hand an investment in BERKSHIRE HATHAWAY INC. returned just over 20% annualized since inception.

If you had invested 31K in the NYSE (DJI) you would be worth 630K today, or the same as Buffets current house value.

#139 Petrol Head on 02.28.11 at 12:41 pm

.#76 Anthony on 02.28.11 at 3:40 am
“Richmond is turning into a Chinese-dominated community” Back in 2006, according to the Canada Census, “65.1% of the population [of Richmond] is a visible minority”

How the heck can you have 65.1% of the population a MINORITY? Is not 65.1% a MAJORITY?

If there are so many Chinese in Vancouver, maybe they should start a protest to demand MAJORITY rights… Chinese street names, Chinese schools, Chinese hospitals… maybe even bring in their own judicial system and outlaw the minority English language. (after all, it is understandable when the majority is the minority).

#140 Ret on 02.28.11 at 12:44 pm

Who is a Canadian? We don’t know or even seem to want to re-visit that old chestnut.

To be honest, I am not sure if I am still a Canadian or not according to the new rules. In any event, I just informed my wife that we will be flying to China next month, gain entry as persecuted Hamiltonians and become Chinese! We will be able to buy a palace in Bejing with lots of rooms to rent out and we will be getting a maid too. The wife is thrilled. We, as new Chinese, also plan on being covered by all of China’s medical and social welfare programs, so no problems there. Just think, we will be the “newcomers.” The Chinese government will be overjoyed that we have arrived to diversify their country. We will be new Chinese! We plan on retiring in luxury on full Chinese pensions. At which point, our daughter will be picking up our OAS and CPP checks from a P.O. Box and depositing them for us in a Canadian bank account. Hopefully we can get some GIS checks too! China-Canadian reciprocal tax agreements are not in place, so party on. We will probably get a couple of matching Bimmers with that tax free pension cash.

Great plan eh? I thought it up all by myself, honest. Just call me 天才先生 (Mr. Genius.)

#141 Spiltbongwater on 02.28.11 at 12:48 pm

Wouldn’t surprise me if China has this website on its blackout list.

#142 Ret on 02.28.11 at 12:48 pm

Who is a Canadian? We don’t know or even seem to want to re-visit that old chestnut.

To be honest, I am not sure if I am still a Canadian or not according to the new rules. In any event, I just informed my wife that we will be flying to China next month, gain entry as persecuted Hamiltonians and become Chinese! We will be able to buy a palace in Bejing with lots of rooms to rent out and we will be getting a maid too. The wife is thrilled. We, as new Chinese, also plan on being covered by all of China’s medical and social welfare programs, so no problems there. Just think, we will be the “newcomers.” The Chinese government will be overjoyed that we have arrived to diversify their country. We will be new Chinese! We plan on retiring in luxury on full Chinese pensions. At which point, our daughter will be picking up our OAS and CPP checks from a P.O. Box and depositing them for us in a Canadian bank account. Hopefully we can get some GIS checks too! China-Canadian reciprocal tax agreements are not in place, so party on. We will never forget Canada. We will get a couple of matching Bimmers with that tax free Canadian pension cash to remind us of the old country.

Great plan eh? I thought it up all by myself, honest. Just call me 天才先生 (Mr. Genius.)

#143 Crazy on 02.28.11 at 12:49 pm

Priced to sell – $2,199,000

“Rare opportunity to own a half block from Locarno Beach on freehold 60 by 95 lot. Build your dream home on one of Vancouver’s most prestigious streets.” Listing here.

————————

Ok, I will not say this house is worth $2M, but due to location and the types of homes located in the next doors, the lot with a well-built home (in the future) may be worth this price, for the right person. I mean, it is right next to the ocean.

Could I afford this? No. But there are folks who can, easily.

It will sell for under $2M. And that will be that!

#144 debtified on 02.28.11 at 12:49 pm

#123 cool on 02.28.11 at 11:25 am

The management had to change a building number(not sure what number it was) because some chinese employees considered that number unlucky in their culture!!!!!!!!!!!
***********************************************

I used to work in this building in Vancouver (666 Burrard Street): http://www.parkplace.ca

At the other corner of the same block, there is a church: http://www.artefaqs.com/Order1.php?ID=4612&IN=2&SS=GSS

#145 Irishorder on 02.28.11 at 12:54 pm

From the ‘Vancouver Sun’ article,
“Lindsay believes there’s speculation is going on, because some buyers are getting an accepted contract with a clause that allows them to assign the contract to a third party before the sale is completed”
In other words, assignments are being “flipped” without the knowledge of the develloper or Government, so that no “CAPITAL GAINS ” on the ‘lift’ is declared.
Isn’t that illegal?

#146 Bottoms_Up on 02.28.11 at 12:57 pm

#115 S.B. on 02.28.11 at 10:14 am
———————————–
Stocks are not expensive based on the absolute price of the stock.

The judge is the comparison between the price and the earnings per share. This is known as the P/E ratio.

A $10 stock with $0.50 earnings per share is more expensive than a $300 stock that earns $20 per share.

#147 Joel Toronto on 02.28.11 at 12:58 pm

Canadian Housing Market Collapse – Housing Bubble? I don’t think so!

#148 Todd on 02.28.11 at 1:05 pm

#81 BPOE on 02.28.11 at 4:25 am

Check back in December of this year and see where the rates are at. I’m thinking down a percent or 2.

A 2% drop? That’d be impressive. I don’t think I’ve ever seen a federal bank’s overnight rate go below 0% before. You know how the 5 year variable rate is set, right buddy?

#149 Joel Toronto on 02.28.11 at 1:05 pm

M1nd Over M0ney – Part 1

#150 MikeT on 02.28.11 at 1:05 pm

@123 cool:

as an immigrant myself, I totally agree with you: Canadians are too tolerant with immigrants. Waaaay too tolerant. I wish they were more like Australians, who put it bluntly: “you decided to come here – you live by our standards, otherwose go home”.
Another form of tolerance or maybe just oversight is the fact that too many newcomers abuse the social system, work for cash and don’t contribute their fair share. I had the chance to meet several of them. They said that Canada is like heaven: it’s so easy to trick the system that it makes no sense to try and get an official job: just make 5-6 kids and work for cash. Getting a job means they will have to pay taxes, you see?
Thanks for letting me rant.

#151 Anotherlowlyrenter on 02.28.11 at 1:06 pm

I think that anybody who expects the continued uptrend of Vancouver property to be sustained on the back of Chinese buying should do their homework in respect of bull/bust cycles in Hong Kong.

I can’t be bothered to search for linkable data but the rough numbers if my memory serves me correct is that in the last 15 years there have been two massive bear markets in Hong Kong were housing prices plunged 65% (on average) after massive bull markets.

My point: hot money rushes in and hot money rushes out. The Chinese are great at riding trends on the way up and on the way down.

I would bet that when Hong Kong/China hits its next recession, Vancouver will be cinders.

#152 Todd on 02.28.11 at 1:20 pm

#134 Crazy on 02.28.11 at 12:29 pm

You see? Another person who wishes evil to befall his neighbour.

————–

That all depends on your definition of evil. I consider the guy next door with the $80k gross income and $900k mortgage (and literally, that is the guy next door) akin to the surfer of a tsunami or the bungee jumper who doesn’t know the rope’s static length. I don’t view the end result as evil. It’s Darwinism at its finest. If anything, I’m an ardent fan of the School of Hard Knocks.

#153 Throwstone on 02.28.11 at 1:23 pm

Being white does not make someone a racist.

Speaking out against foreign ownership of one’s homeland by any identified group is no doubt a guarded move, one might call it protectionist, another might call it patriotic.

I imagine if the norwegians came in to buy up all the real estate, refuse to learn the language, demand norwegian street names, decline business dealings with non-norwegians etc..etc. one might hold the same concerns.

Being white does not make someone a racist.

Do you think the only caucasian child in a classroom will not experience racism…

Just saying….

#154 June on 02.28.11 at 1:23 pm

I have to say the “yellow peril” as you called it; are very real…. I think the canadian government should set up legislation that limit the number or even the type of real estate foreigners can buy in Canada. I’m Chinese myself but I’m not from mainland China and I’ve been living in Vancouver a long time and I’m not fithy rich. I just hope that people know that not all Chinese people are like that but I can tell you it’s very true some mainland Chinese buy real estates in the world such as in Vancouver like buying a pair of shorts. These people are making the market becoming unstable and affordable to local citizens who actually live and work in Vancouver. The government should really do something about it.

#155 kc on 02.28.11 at 1:25 pm

142 debtified on 02.28.11 at 12:49 pm
I used to work in this building in Vancouver (666 Burrard Street):

what is really funny is that the building is home to lawyers….

“Davis LLP is a leading full-service law firm with more than 250 lawyers and patent and trade-mark agents across Canada and in Japan.”

#156 Macrath on 02.28.11 at 1:33 pm

#123 cool
Next time you are in an elevator push the button for the 13 th floor.

#157 AG Sage on 02.28.11 at 1:37 pm

#126 David on 02.28.11 at 11:33 am
>People in glass houses….

When hollywood sucks up 40% of GDP, taxes everyone’s pensions 15% and takes off with $2 trillion in bailouts, give a holler.

#158 pigeon patties on 02.28.11 at 1:38 pm

Wealthy RE investors from any outside country don’t contribute much to the overall economy. The seller makes a bunch and the realtors skim a bunch, but nothing of value is created. Bring in more immigrants who want to live here for the opportunities not just the freebies (medical, education).

It is not hard to have family in Canada and pay no taxes at all. The new West Vancouver home is in the wife’s name, the husband files a non-resident form and goes back home. His income from his home country is non-taxable in Canada and she gets GST rebates and her kids fall under the official poverty line. And our politician gets all excited to find kids living officially below the poverty line in million dollar homes. Not bright enough to understand how people work around his laws.

It happens every day. Way to go Canada!

#159 David on 02.28.11 at 1:52 pm

#128 Brian T. I’m not a humourless guy in the least, but I honestly can’t tell whether you are agreeing or being sarcastic.

That the SEC could do a much better job is not the gist of my post, as I said upfront. It’s the irony of having civics lessons delivered by self-righteous, insanely overpaid airheads.

I guess it is just me.

#160 Devore on 02.28.11 at 1:54 pm

#70 Priced Out Canadian

Well, if it was real, and it took 2 years to gain 45%, then I guess they were not the greaterfools for buying in 2008 eh? More importantly, if houses such as their’s went up 45%, then any 20% or even 30% correction will mean nothing. Good thing people are sitting on the sidelines with those types of gains.

In bubbles, like in ponzie schemes, most people lose money. That is because, while everyone plans to sell at the top, no one actually does. With real estate, it is even worse. Those who sell and realize massive profits, just go on to buy an even more expensive house with an even bigger mortgage.

Leverage. It produces spectacular results in both directions.

#161 Devore on 02.28.11 at 2:00 pm

#84 TS

The CBSC is an industry run group….and as such I really wonder if it has any teeth and if its members actually face any real penalties.

CBSC is a funny place. It is an industry organization, in a world where everything is regulated by one or more levels of government. Their primary concern is to keep the government monkey off their backs so they can stay in business, which leads to some interesting and illogical decisions, like banning “Money for Nothing” based on one complaint. If too many people complain to CRTC about CBSC regulation, then CRTC will step in.

To paraphrase Office Space, their only motivation is to do just enough work to not get hassled.

#162 David on 02.28.11 at 2:02 pm

156 AG Sage

I had no idea that Hollywood is a more useful and productive part of the economy than Wall Street. Y’all really like your movies.

So…you read this blog for fun then? That’s cool.

#163 Alex on 02.28.11 at 2:05 pm

Thanks to the folks who gave me props for my little “campaign against insanity” here in YVR. FYI for those who care, I do have updates from the Canadian Broadcast Standards Council re: my Global complaint, and I’m *definitely* not letting it fall by the wayside. But it’s still in process, so I’m holding off on saying anything here for a bit.

#164 Devore on 02.28.11 at 2:08 pm

#86 TS

I’ve posted that one before. Japanese pension funds are set to shortly become net sellers of JGBs, which will force Japan to flog their ultra-low bonds abroad, no doubt quickly doubling and tripling their rates.

The demographic time bomb has also gone off in the US, as Medicare AND Social Security are in negative cashflows starting this year (and Medicare started in 2010 actually, according to the trustees report). They will cost the government more than they bring in. Instead of being general revenue cash cows, they’re now dipping into their reserve accounts, filled with IOUs put there by every president starting with Reagan, that need to be replaced with money. There will be some interesting maneuvering no doubt in order to control (or conceal) the costs of these programs.

#165 Randman on 02.28.11 at 2:08 pm

Tim #52
“Wait until the dirt comes out on the BC Rail scandal, we may actually have an NDP govt yet…”

Which would be the worst possible thing that could happen to B.C.

#166 Devore on 02.28.11 at 2:13 pm

#91 jane54

Here in England we have a problem with pretty little chocolate box villages being brought out by weekend owners. They become too expensive for the village children whose families have lived there for generations. With not enough business during the week first the schools close, then the post office and general store close and lastly the pub goes and you a have a ghost village. I see a ghost Vancouver on the horizon.

And to another poster’s point, that’s what’s happened in Coal Harbor in downtown Vancouver. Ghost town. The place was planned to be a vibrant hip diverse community with high density, bringing in retailers and services to the ground levels of the condo towers. Instead, it’s a cold dead zone, with only lost tourists wandering through, looking for the seawall and Gastown.

#167 Moneta on 02.28.11 at 2:13 pm

Not quite right…

A 31k investment that was now worth 630K would provide an annualized return of 5.9586% over 52 years.

The DJI in Jan 1959 was at 601.71 and as of today it’s at 12,223.16 which is an annualized return of 5.9577% over 52 years.
———-
You forgot the dividends which have probably added more than 2%. That would give you more than 1.6 million.

But the gain on the house is tax free.

#168 vomitingdog on 02.28.11 at 2:19 pm

“Richmond is turning into a Chinese-dominated community…”

You’ve got your verb tense wrong.

#169 Robert Dudek on 02.28.11 at 2:19 pm

All you Vancouver people complaining about how Asian immigrants game the system and that Chinese have taken over Richmond…

1) Change the laws

or

2) Move somewhere else if you don’t like it

#170 VICTORIA TEA PARTY on 02.28.11 at 2:21 pm

MARKETS ARE UP: EVERYTHING’S GROOVY!!

The Dow and some other major averages and indexes are up. Why? Because Saudi Arabia has “assured” the West that it will be able to make good on replacement oil supplies thanks to the new civil war, unfolding in Libya, that has halted daily shipments of more than one million barrels of the stuff to downtown Europe.

‘Oil Fluctuates as Saudis Offer Supplies, Unrest Spreads to Oman

Feb. 28 (Bloomberg) — Crude oil fluctuated as Saudi Arabia offered to make up for supplies lost because of unrest in Libya and as Mideast tensions spread to Oman, the region’s largest oil producer outside of OPEC.

Futures slipped as much as 1.2 percent in New York after Khalid Al-Falih, the Saudi Arabian Oil Co.’s chief executive officer, said the kingdom is ready to compensate for any shortfall in crude supply. Two demonstrators were killed and several wounded in clashes with police yesterday in Oman, according to hospital and government officials.

“The threat to supply overall doesn’t look as dangerous as it did last week,” said Tim Evans, an energy analyst at Citi Futures Perspective in New York.’

Let’s take a closer look at what happened in Oman on the weekend thanks to Yahoo:

‘SOHAR, Oman – Protesters set a supermarket ablaze and rallied at two places in this seaside town on Monday in a third consecutive day of unrest that has included deadly clashes in the strategic Gulf nation.

Security forces sealed off main roads to Sohar, about 120 miles (200 kilometers) northwest of the capital of Muscat, in an attempt to isolate the protesters and keep crowds from swelling.

Markets just ignored such events TODAY. But wait. there’s more. Check out what’s shakin’ in Kuwait!

‘The Breitbart news group reports:

A key Kuwaiti opposition group on Monday demanded the ouster of the prime minister as youth activists called for a rally on March 8 to force the premier to quit.

“The first step toward reforms is in forming a new government under a new prime minister that should be capable of running the country and reforming imbalances,” said a statement by the nationalist Popular Action Bloc.

The new government should combat corruption, safeguard the constitution and public funds, guarantee public freedoms and find solutions for unemployment and housing, the statement said.’

And then there’s The world’s Nanny-in-Chief Hillary Clinton wagging her finger at Libya’s nut-case leader this morning at the US Human Rights meeting. There will be sanctions and ponderous words.

But tragically the civil war has spawned a Biblical-style exodus from Libya. Neighbouring Tunisia is getting the full-force of it.

Meanwhile British Special Forces and the RAF are combining efforts and flying into the Libyan desert to rescue oil workers trapped by bandits.

And given that it’s Monday, a few words from Mr. Kunstler:

“…The café layabouts of Italy, the flaneurs of France, and the bratwurst-devourers of Germany may now have to militarize and get into the action in places where American boys have been bleeding out in the sand for decades…Something that smells an awful lot like World War Three is shaping up around the Mediterranean and spilling over toward the Indian Ocean…the ghost of Erwin Rommel scratches his head on the gritty shores of Tobruk…

…The Baby Boomers…expected nothing worse than a sequence of diminishing golf scores and blander meals as their horizons moved past assisted living to the final meet-up with God.

Now, it turns out, we get to watch our grandchildren fight over the table scraps of the American Dream – such as it was: Chevies, burgers, reality TV, and all the mortgage obligations you could cram in the kitchen drawer…

I give Saudi Arabia three weeks before it starts to blow up…it’s not altogether certain that we’ll keep up the conveyer belt of Little Debbie Snack Cakes and other staples…into the supermarkets when diesel fuel hit $10 a gallon and the truckers stay home to watch the Kardashian girls. I’m already getting hungry.’

Keep those seatbelts snug. The ride doth continue unabated…

#171 The Original Dave on 02.28.11 at 2:21 pm

” My consistent prediction has been a correction, followed by a multi-year melt. It stands. — Garth”

Fine, Garth, but WHEN????

I predict the Calgary Flames will win the Stanley Cup!

Dosen’t mean much when you don’t attach a timeline to it does it??

———————————————–

people like you are annoying. Attaching a time line is impossible. All you can do is look at the valuation and use the proper metrics to determine whether the market price is too high or too low…that’s for any asset.

For me, I see prices going to the 2003 level. It doesn’t matter when. Why would I buy if I believe 2003 prices will be coming? Why try the impossible in predicting when? I’ll just wait for it. I’ve done this before with other assets and can spot when something is over-heated. There’s always the people like you that are on the fence and try to shoot the messenger. Like I said, it’s people like you that annoy me. My advice for you is to go b*lls out and buy a house. Hopefully you get financing to get 2 places.

We all like to attach a time line to when something will happen based on economic, social, and political changes, but those guesses aren’t definitive. The best way, as I said earlier is to look at the valuation and determine whether the asset is over priced or not. If you cannot see that real estate in Canada is over – valued, then I suggest you go to a place of worship this weekend and thank the heavens that you found this blog. Maybe you gobble up the insight you receive on here and stay away from this particular mania, but something tells me that you’ll be buying at the top of some other mania in the future.

My advice for you is to go and buy baby! Buy some real estate!!

#172 GrimWeeper on 02.28.11 at 2:25 pm

“Canadian seniors declaring bankruptcy at alarming rate”:
http://opinion.financialpost.com/category/wealthy-boomer/

#173 Devore on 02.28.11 at 2:33 pm

#137 DaBull

Not quite right…

A 31k investment that was now worth 630K would provide an annualized return of 5.9586% over 52 years.

The DJI in Jan 1959 was at 601.71 and as of today it’s at 12,223.16 which is an annualized return of 5.9577% over 52 years.

Not quite right.

DJIA paid dividends, the house, on the other hand, requires property taxes and maintenance. In the US, you re-buy your house every 30 years through property taxes alone.

#174 New Era on 02.28.11 at 2:33 pm

The Growth of the banking and Oil stocks is going thru the roof.

Glad I sold my real estate properties. Banking on Saudi Arabia to start pumping like the vancouver real estate agents.

There’s a shortage in oil. You can’t make the stuff. Hoping to see a 2.00 ++++ per liter. In the next couple of months.

Also I’m sure the people with those empty monster houses is shitting bricks. A 50% increase in energy cost.

Go Inflation Go!!!!!

#175 HouseBuster on 02.28.11 at 2:36 pm

Funny story, so I guy at work says some of his friends are moving out of a condo in downtown TO because they don’t like the type of people moving in. He says there are too many immigrants.

Yeah, he’s Chinese but born here. I nearly fell off my chair.

Is he allowed to be racist?

#176 pablo on 02.28.11 at 2:38 pm

I know rates have to go higher, but regardless how itchy carney is getting, (isnt there a creme or ointment for that!) he wont be able to pull the trigger on rates any time soon, imho; given spiking oil and commodity pricing, real inflation is alot higher than the 2% or so that govt is telling us, it’s running 10-12% easy, just look at your own expenses. Increasing unemployment, again way higher than govt stats tell us.

#177 The Original Dave on 02.28.11 at 2:39 pm

Hi Garth, I sold my Toronto home 2 yrs ago and am still renting, after listening to your reasons for housing to drop (never did buy squirrel recipe book tho).

In that time, my old house rose 20%, and I threw away 2 yrs of rent. Despite all your reasons for housing to drop (and reasons for the delay), it hasn’t happened. I have to pay up if I want to buy a new home.

You give various reasons for the housing market to drop, and you keep extending the time frame for this to occur. You extended the break to occur after the March 5/35 changes… or are you again extending it to after the April rate rise? The govt. may have something else up its sleeve to prevent housing from dropping… we don’t know.

All I know is that even a broken clock is right twice a day, and, while housing will fall one day, you should be a little more balanced with your blog. What say you?

Still reading, but far more doubtful……….

—————————————————-

and another id*ot. Garth please post this. I think it’s sad that you guys depend on Garth’s outlook as for reasons not to buy or to get out of real estate. He’s simply the messenger. Why cling on a person’s opinion? It doesn’t matter who the person is, why would people gobble up a single individual’s opinion? This is what you guys are doing. You are neglecting the numbers that clearly show house prices are over valued.

I’d hate to be you in those discussions that people have in real estate. Your only argument is: “a smart guy named Garth Turner said real estate will go down.” Like I said, it’s pretty sad. What Garth does provide is statistics and arguments for why real estate is over valued. Garth provides general information about the Canadian economy – things like household income vs house prices and how that gap has increased dramatically. He provides information about Canadian debt levels, Canadian incomes, Canadian unemployment etc.

You seem to be one of those people that cling on to the person rather than the message. There’s a lot of people like you. Roadkill. Again, go to your place of worship this weekend and be thankful you found this blog. You neglect the numbers but are influenced by the person.

I’m just thankful that there’s an outlet like this blog that I can gather information to help me make better decisions. It’s not because Garth said so, but because of the information I get from here that helps me make better decisions. I”ve always been thorough with my finances and have always heard people like you whine. Things have worked out for me. Garth is bang on. My advice for you is: to take what you presume to be a loss and go buy some real estate. Get back into the market because it’s hot, hot, hot!!!

Have some backbone and do what you believe, don’t do something because a guy on a blog says it’s smart. I’d hate to be you. What do the numbers tell you?

#178 pablo on 02.28.11 at 2:41 pm

oh and regarding the yellow peril………..i’ve had chinese tell me that they’re coming here because we need them here and that white people are soooo stupid. I kid u not.

#179 Bill Grable on 02.28.11 at 2:44 pm

Just keep listening to these prevaricating slime at Real Estate offices and wind up like so many desperate people here in our winter headquarters.

On Maui: there are so many foreclosed properties, the banks are keeping off the market, and until some of them clear.

Only Canadians seem stupid enough to take the leap.

Look the bottom line is, the price of fuel is on a hockey stick ride to hell, and people are losing their jobs, pensions, and soon their underwear from over leverage.

Time to sit back and wait and keep your powder dry.

I was walking yesterday, and a very earnest guy came running off the front lawn of his home here, and asked if I was looking for a new house. “Nope, just out to stretch the legs” – the guy was crestfallen.

I asked in a round about way if he has been trying to sell this lovely place of his for a while. “Two years”.

That sort of says it all.

The guy might have been 55 or so,but he looked about 85 from the stress lines on his face.

#180 kilby on 02.28.11 at 2:55 pm

#124 Kilby
I wasn’t clear Garth, we lease for $1,600 (600sq. ft.) the one for sale is, I believe 1040 sq. ft. same as the 1.1 million one. Both elevators were out of service on Saturday but thankfully 1 is back working today. Honouring the warranties on these places must surely reduce the developer’s profit a lot as the repairs are ongoing continuously.

#181 jess on 02.28.11 at 3:08 pm

The report takes aim at the assumption that people who file for bankruptcy are unemployed: in fact, the average insolvent person is working and earns close to the Canadian average of $2,419 per month.

The average Canadian who files for bankruptcy owes $59,800 not counting his mortgage and is a 41-year-old married man with four credit cards, according to a report by a Kitchener-based bankruptcy trustee.

The information, released Monday by Hoyes Michalos & Associates, says this amount owed by the average bankruptcy filer is about three-and-a-half times more than the debt level of the average Canadian.

The report is based on an analysis of 8,000 insolvency filings the firm dealt with in 2009 and 2010 and offers a profile of men, women, and seniors.

http://www.therecord.com/news/business/article/494137–average-bankrupt-person-is-41-married-and-has-four-credit-cards
http://www.hoyes.com/blog/wp-content/uploads/2011/02/Face-of-Bankruptcy-2011.pdf

#182 NotAGreaterFool on 02.28.11 at 3:11 pm

You think all the inflation indicators account for ‘stealth inflation’

An analysis of 10 products in the U.S. by Consumer Reports found packages are getting smaller: Ivory dish detergent shrank from 30 ounces to 24 ounces, Classico pesto sauce from 10 ounces to 8.1 ounces, Kraft American cheese from 24 slices to 22 slices, and Häagen-Dazs ice cream from 16 ounces to 14 ounces. According to Peter S. Cohan & Associates, a consulting firm, assuming prices stayed the same, the smaller packaging translates into an average price inflation of 12.2 per cent—far above the official rate. Call it inflation by stealth.

Read more here: http://www2.macleans.ca/2011/02/25/stealth-inflation/

#183 Bailing in BC on 02.28.11 at 3:14 pm

#126 David- Frequently it’s the altruistic wealthy who do the most good in the world. After all, they can afford to be principled, while the peasants are just trying to put food on the table.

#135 Petrol Head – What are ya? A kiwi? :-)

#184 The Original Dave on 02.28.11 at 3:15 pm

#115 S.B. on 02.28.11 at 10:14 am
———————————–
Stocks are not expensive based on the absolute price of the stock.

The judge is the comparison between the price and the earnings per share. This is known as the P/E ratio.

A $10 stock with $0.50 earnings per share is more expensive than a $300 stock that earns $20 per share.
——————————————————–

and then there’s the amount of shares fully diluted. The company trading for $300 a share may only have 4,000,000 shares while the company trading for $10 may have 200,000,000 shares. The $10 company would have a larger market cap and be more expensive when considering P/E. I tend to compare a company’s market cap to it’s peers when looking at a stock amongst other things.

Garth, don’t get mad, I know you’re not an advocate of purchasing individual stocks.

#185 betamax on 02.28.11 at 3:16 pm

#94 Robert Dudek — well said!

#186 dd on 02.28.11 at 3:17 pm

$1 – 2 mill blocks from the beach? Buy it … I will come visit.

#187 BrianT on 02.28.11 at 3:17 pm

#152Throw-Technically speaking, to be classified as a “racist” in North America an individual would have to be a white male, Christian or atheist is OK but no other religion would qualify. I can’t recall any high profile individual being labelled “racist” who fell outside this narrowly defined boundary.

#188 NFN_NLN on 02.28.11 at 3:18 pm

How the heck can you have 65.1% of the population a MINORITY? Is not 65.1% a MAJORITY?

If there are so many Chinese in Vancouver, maybe they should start a protest to demand MAJORITY rights… Chinese street names, Chinese schools, Chinese hospitals… maybe even bring in their own judicial system and outlaw the minority English language. (after all, it is understandable when the majority is the minority).

—–

Why don’t the Chinese move to Montreal or somewhere in Quebec? The entertainment value for anglophones would be worth.

#189 Jeff Smith on 02.28.11 at 3:25 pm

>#78 debtified on 02.28.11 at 3:54 am

Nice post!

#190 New Era on 02.28.11 at 3:27 pm

#139 ret

Of course all the chinese want to live here, or pretend to.

In the world economy the chinese provide cheap goods.

Canada provides free health care and social services $$$.

If you play the game right, you can get your divs on the free money train too.

BTW its old news. Alot of the chinese people I know already plays that game. Instead of owning a PO box, they just pretend to live in a basement suite of their friends or relatives. Some haven’t step foot in this country of over 5 years, but they keep on getting their benefit check.

Kudo’s to them for playing the game right.

#191 BigAl (Original) on 02.28.11 at 3:33 pm

From the example letter in today’s blog seeking advice about buying in Van now:
“We just sold a property for 45% more than we paid in 2008.”

I really don’t know why you came to this blog for advice, as you would have been chastised and ridiculed by the vast majority on this blog for having purchased back in ’08. Everyone here was so sure that the crash was just around the corner, especially in Vancouver. And yet, you ended up making 45%.

…………………………………………………………………….

To sum up what’s going on in Wisconsin:

A unionized public employee, a member of the Tea Party, and a CEO are sitting at a table.
In the middle of the table is a plate with a dozen cookies on it.
The CEO reaches across and takes 11 cookies, looks at the tea partier and says, “Watch out for that union guy, he wants a piece of your cookie!”

#192 bystander on 02.28.11 at 3:39 pm

Hold on. It’s coming…

“Men who can both be right and sit tight are uncommon”
– Jesse Livermore

#193 Crazy on 02.28.11 at 3:43 pm

Garth,

You censored my comment. Why?

Comment on any issue. Not on me. — Garth

#194 Old timer on 02.28.11 at 3:47 pm

A sign of the times? I currently rent a house on the west-side of Vancouver that was sold last week for $1.3M to a group of over 60’s (Caucasian) who are going to be “developers” to fund their retirements. They did it once, bought the house next to where the principal “developer” lives, knocked it down and built a new monstrostity. They didn’t pay anywhere near $1M for that knock-down though. I don’t know what the margins on a new-build will be by the time it’s finished but my gut feeling is the would-be real-estate tycoons are playing with fire. It’s a 33′ lot, btw.

#195 Mackie on 02.28.11 at 3:52 pm

… And the tea partied still doesn’t get it.

#196 piazzi on 02.28.11 at 4:10 pm

Garth,

how about those on variable

should they roll into a fixed term now?

thanks

#197 Devore on 02.28.11 at 4:19 pm

#181 NotAGreaterFool

According to Peter S. Cohan & Associates, a consulting firm, assuming prices stayed the same, the smaller packaging translates into an average price inflation of 12.2 per cent—far above the official rate. Call it inflation by stealth.

It’s been going on for years, masked by clever marketing.

http://www.time.com/time/nation/article/0,8599,1818761,00.html

http://www.consumerreports.org/cro/food/news/2008/10/the-lowdown-on-downsized-products/overview/downsizing-ov.htm

http://frugaldad.com/2008/08/13/companies-change-product-sizes-to-reduce-costs/

http://consumerist.com/tag/grocery-shrink-ray/

#198 Victor on 02.28.11 at 4:23 pm

Pressure grows for rate hike

Paul Vieira, Financial Post · Monday, Feb. 28, 2011

OTTAWA — Pressure on the Bank of Canada to raise rates is likely to build after Statistics Canada reported Monday the economy ended 2010 with a bang as it grew 3.3% annualized in the fourth quarter – a full percentage point above the central bank’s expectations.

Leading the way were exporters, which posted their best quarterly performance in eight years. The data suggested the economy roared in December as real GDP advanced 0.5% on a month-over-month basis. This, coupled with an upward revision in growth for previous months, meant Canada grew 3.1% in 2010, matching the best annual performance since 2000.

“This upbeat report begins to tip the balance back in favour of earlier rate hikes,” said Douglas Porter, deputy chief economist at BMO Capital Markets.

http://www.financialpost.com/news/Pressure+grows+rate+hike/4358664/story.html

#199 BigAl (Original) on 02.28.11 at 4:24 pm

Protectionism works, and builds economies.

Just ask India and China.

Just look at the greatest success period of the United States under Hamiltonian Protectionism that was fully implemented 1861-1932, and partially from 1932-1970. (This policy also involved infrastructure development along with sound banking policy.)

Very very very few benefit from the asymetric free trade of today.

#200 Robert James on 02.28.11 at 4:26 pm

#152 Throwstone Excellent post !!! If you really want to see Racism,go work in Japan for a few years.. Of course the white guys can`t say too much in public because the so called minorities will be all over them along with the phony self righteous politically correct do-gooders that got bored saving whales and God knows whatever trip they are on now and now need more to whine about.. Personally speaking,,I would take the animals any day..

#201 Edmontonian Guy on 02.28.11 at 4:39 pm

If Edmonton & area real-estate is still going in the toilette despite toronto & Vancouver real-estate soaring, does that mean the crash won’t be as severe in the near future, or does it mean it’s getting rotten already so it will be worse?
We’ve seen prices collpase overnight in 1981, and after 1987 I hope it never gets that bad again! You could buy a house from $38,000 here in Edmonton in the early 1990’s!

#202 David on 02.28.11 at 4:41 pm

#182 Bailing in BC

That’s absolutely true. Two of the most notable examples today are Bill Gates and Warren Buffett. In fact, the Bill and Melinda Gates Foundation is such an admired prototype for such efforts that his friend Warren Buffett has pledged his own billions to it (instead of setting up one himself and wasting resources just for the self gratification of having a foundation. Truly admirable.

Those 2 guys created such enormous wealth for themselves and many, many others using the resources and facilities provided by evil Wall Street….start-up and expansion capital, ongoing access to debt and equity markets, etc. etc..

Not as important as a good movie, but still.

#203 N in Van on 02.28.11 at 4:49 pm

I totally agree with you Garth. The only thing that I know of the mainland Chinese investing in is resource companies. I remember when I lived in Hawaii in the late 80’s the big urban legend was the rich Japanese investors bidding up prices on Honolulu real estate. The story was that they wanted to buy large tracts of houses so they could knock them down and build gigantic golf courses and resorts.

Well I went back to Honolulu about ten years later it was still the same with no gigantic golf courses run by rich Japanese investors. The whole myth came apart when the Japanese stock market tanked. I think it is human nature to seek any plausible reason for what we know deep down is fantasy. I think since this myth depends on the Chinese investor story, when the Chinese economy has a setback the whole myth will unravel.

#204 BrianT on 02.28.11 at 4:51 pm

#198Big-Yes, but those very very very few own and run the whole thing.

#205 TheFirstRick on 02.28.11 at 4:58 pm

#54 Burnt Norton on 02.28.11 at 1:45 am
……… Resorting to racism and / or xenophobia as an excuse for one’s own weakness, insecurity and inability to compete is pathetic.
+++++++
You’re right, business should start lobbying the government to allow for 75hr work weeks, no minimum wage, health care, health and environmental laws, bribery, etc.

And what about those “pesky” human rights issues? Lets get rid of those as well!!!!!

Actually Norton, if you take a moment and pull your self righteous head out of the sand you will find many people in Vancouver are frustrated, not with “the ability to compete” but rather money made in scandalous, illegal and nefarious circumstance.

Oh, and race has nothing to do with it.

#206 Moneta on 02.28.11 at 5:00 pm

He says there are too many immigrants.

Yeah, he’s Chinese but born here. I nearly fell off my chair.

Is he allowed to be racist?
—————-

My parents lived in an Anglo neighborhood with beautiful flower beds and trees. When immigrants took over, nature disappeared and they moved.

They mostly came from countries where cooking was more important than maintaining the landscaping and my mother could not live with that.

What broke the camel’s back was when the front neighbor painted half the house lime green and changed to orange but stopped midway.

Does that make her a racist?

#207 CandleFish on 02.28.11 at 5:00 pm

The great B.C. real estate bust
JIM SUTHERLAND
Last updated Tuesday, Dec. 01, 2009 4:05PM EST
A- A+
Leona Snider can pinpoint the Great B.C. Land Bust to the

DELETED: You posted a 2,700-word article from the Globe ROB magazine of three years ago. Why? — Garth

#208 BrianT on 02.28.11 at 5:03 pm

#161David-You must be the last Mohican-most are realizing by this point that Wall Street is an incredible destroyer of productive capital and one of the biggest problems the USA faces at this point (along with a bloated, inefficient military and wasteful sick care industry).

#209 specuskeptic on 02.28.11 at 5:03 pm

Rate hike coming sooner? Dare to dream?

http://www.cbc.ca/news/business/story/2011/02/28/canada-gdp.html

#210 zee on 02.28.11 at 5:04 pm

Hi Garth,
So i’ve been following your blog for the past couple of years and waiting for the market to correct in a meaningful way as you articulate in your blog.- btw i am in lotusland – Come end of 2010 i kind of gave up – somehow like a Netflix shorter – as Vancouver seemed to defy the odds that prices would ever drop ever again in my lifetime – yes i agreed with you that once y-o-y sales declines and rate increases came in this market would fall off the cliff and we were heading back to 2005 levels where it makes sense for a couple to pay 32% of their income towards housing.
But – and it’s a big but – something happened in the last month which for me is a major indicator of Vancouver prices. I have a friend – a real estate millionaire – he started 20 years with $100k and is now worth $6-8 million net worth . This genius – a C- student in University – has bought houses when others warned of disaster and sold when people stood in lineups to buy 5/35 condos. In the last 20 years – i kid you not – he has bought into every dip and sold into every frenzy – this f*%er has real estate in his DNA. He just accepted an offer his $3.5m home on the west side last week – two weeks ago he sold one of his bigger commercial properties to a Korean buyer – now i am a believer that Vancouver real estate is starting it’s decline….

#211 Coho on 02.28.11 at 5:05 pm

#181,

An analysis of 10 products in the U.S. by Consumer Reports found packages are getting smaller: Ivory dish detergent shrank from 30 ounces to 24 ounces, Classico pesto sauce from 10 ounces to 8.1 ounces…

Good post.

Many frozen seafood products in the USA (and starting to here) have gone from 16oz (1lb) packages to 12 oz. In Canada where shreeded cheese and other packaged products originally came in 500 gram weights, have been reduced to 400, and now 380…

#212 OttawaMike on 02.28.11 at 5:10 pm

#198 BigAl (Original) on 02.28.11 at 4:24 pm
Really?!?
Tell me why Brazil, India and China’s economies did not start to boom until they opened up their borders to world trade?
Or was it a mere coincidence that their economies thrived with globalization. I’m still waiting for the fallout from NAFTA that all the doomsters predicted.

#213 Cookie Monster on 02.28.11 at 5:34 pm

But the main point to understand is the exchange rate must be fixed!
———–
Fixed to a specific weighting of gold. Like an anchor for a boat is not worth a damn if the length of rope is unlimited or constantly extended as the wind blows. The rope must be tight and the anchor secured and even with gold there would still be small amount of inflation, increase in the supply of money, as more gold is constantly mined, but it’s very limited by mining.

I already told you this conversation is over. There will be no gold standard and we are not wasting real estate on this blog talking about it. Buzz. — Garth

#214 new_era on 02.28.11 at 5:39 pm

http://www.vancouversun.com/business/Living+beyond+means/4359923/story.html

Vancouver Residence Living beyond their means

#215 X on 02.28.11 at 5:41 pm

I did not say two years until tanking. My consistent prediction has been a correction, followed by a multi-year melt. It stands. — Garth

One day your blog posting should just run a dozen of these quotes from you. Some people either don’t get it, can’t read, or haven’t been reading your site regularily.

#216 Crashing Yuppy on 02.28.11 at 5:56 pm

All you need to know about the future of residential Real Estate is on Brampton Real Estate Board Website. They refuse to report numbers because they are awful.

It is GROUND ZERO. Once it implodes the dominoes all fall.

#217 Mtl RE Observations on 02.28.11 at 6:05 pm

don’t believe the letter is true. They claim they sold for 45% higher than what they paid in 2008. Can someone show me any home that went up 45% in this time.

===========

We sold the condo we bought Montreal in 2008 for 40% higher only 1.5 years later.

#218 Timing is Everything on 02.28.11 at 6:18 pm

Good work, if ya can get it…

http://www.theglobeandmail.com/report-on-business/bmo-head-bill-downe-takes-hefty-raise/article1923138/

Meanwhile back at home….

http://www.montrealgazette.com/business/Many+know+they+could+make+higher+mortgage+payments+poll/4357745/story.html

Two worlds that never collide…..yet?

#219 DaBull on 02.28.11 at 6:18 pm

#172 Devore on 02.28.11 at 2:33 pm

Didn’t realize that buying in to the DJI or even the S&P 500 allowed you to live at the NYSE. Think you forgot to add the rent you have to pay each month to live some where. Me thinks that would equal things out in the long run.

As far as dividends go, maybe check again, I think they’re included in the DJI, but not the S&P 500.

#220 Cookie Monster on 02.28.11 at 6:20 pm

I already told you this conversation is over. There will be no gold standard and we are not wasting real estate on this blog talking about it. Buzz. — Garth
————-
You could have at least allowed my post above the one you allowed, it’s not like I’m being offensive or aggressive. I’m being polite and explaining or challenging peoples errors, including yours.

#221 NP on 02.28.11 at 6:20 pm

#133 Eric on 02.28.11 at 12:26 pm
Here’s one from The Globe and Mail of February 26, 2011. Asking price $698,000, Selling Price $899,500. Days on market: 6.

http://www.martyhomes.com/Properties.php/Details/588

………………………

Looks like a fixer upper. We removed the exact same original tiles when we redid our bathroom this year. And our home is 31 yrs old. Notice they don’t show the ‘finished’ basement. So glad I never moved to Vcr.

#222 Confused and a little crazed on 02.28.11 at 6:26 pm

everyone,

these recent blog messages have becoming more and more intense…Borderline hate…I guess

I do not see why people are so interested in seeing real estate go up because your pay more taxes and your son/ nephews/ daughters will have to move away from you in order to buy a place for themselves… you have to sell in order to captilize on your gains. This is not logical

immigration where one party does not have to pay taxes on outside assets have been around for a while
Govt knows about it and does nothing.

Stocks on the other hand can give you gains w/o having to selll your home and it propagates good companies to do better.

We know this is a bubble and so do the BUlls but so what?
If you are an investor why buy here when areas like miami and hawaii are cheaper.. the weather / beaches are so much better.

http://www.hawaiilife.com/gallery/2177/

http://www.constecrealty.com/mls_reo.php?mlsid=D1331114

http://www.constecrealty.com/mls_reo.php?mlsid=D1331951

it is because of expected gains. they are anticipating further increases like much of the population.

When you treat it like a stock it will behave like stock

at the end of the day we come in with nothing and we leave with nothing. But rest assured nothing goes on forever… does it really matter not really

#223 Herb on 02.28.11 at 6:40 pm

#201 Ottawa Mike,

if by opening doors to trade you mean labour costs at close to zero and no environmental or other inconvenient regulations, it would be relatively easy to globalize Canada. Just reduce wages to $1.50 an hour, scrap all personal and environmental protection, line up a few tax incentives, and the business world will look to prosper and beat a path to your door. Is this the booming Canada you want? It’s easy to get; just throw the country and population to the wolves.

Perhaps you should reconsider the causal relationship between booming economies and open-for-business policies. Could be that boom times are only a function of low production and operating costs and have nothing to do with government policy, unless fostering exploitation is the relevant government policy.

On NAFTA, I’m waiting until the facts are in.

#224 snowbound on 02.28.11 at 6:46 pm

don’t believe the letter is true. They claim they sold for 45% higher than what they paid in 2008. Can someone show me any home that went up 45% in this time

======

bought two condos in calgary two years ago. sold both last month at (just over) 40% profit.

#225 Eric on 02.28.11 at 6:50 pm

I came to Vancouver in ’96. Prices were crazy then compared to the east but in ’99 I bought for $280,000. Even then, people were saying that the market was going to crash – soon. Well, now I’ve paid off the mortgage and a neighbour just sold theirs for $710,000.

The present market value doesn’t really matter to me. What is more important is that I am no longer worrying about escalating rental rates. Make no mistake, rents have gone up and they will continue to.

Ever if there were a 50% crash my place could still be worth $350,000 and if I had to sell I’d get my money back.

#226 Eric on 02.28.11 at 6:54 pm

One other thing.

The crocuses are out, there’s no ice on the sidewalks, the mailman was wearing shorts today and nobody even noticed.

#227 tonguestump on 02.28.11 at 6:55 pm

The “Chinksta” on Youtube (thechinkstashow) has a lot of great insights into Chinese culture. Hey Garth what is the minimal but impressive enough acceptable campaign contribution for an MP?

#228 Cookie Monster on 02.28.11 at 7:00 pm

Garth, the strength of this blog was you allowed people to argue and disagree, that’s what makes to forum interesting, but three time in three weeks you’ve outright deleted three of my posts and that’s what pissed me off last week. my reply today to tiger baby was thoughtful, polite and well written and you just trashed it! I’m not impressed.

It’s your blog and you have every right to censor content but it’s quite another issue to silence descent by opposing views. Especially something so fundamental as the theory of money and credit and the gold standard. Disappointed.

I think 20 or 30 gold-standard posts a day is sufficient for us to get the point. This is not a gold blog. I will do what I feel necessary to keep the conversation moving. Disappointed? Get a puppy. — Garth

#229 David on 02.28.11 at 7:02 pm

BANKS LETTING MORTGAGE HOLDERS “SKIP PAYMENTS” to get around tightening mortgage rules.

From Victoria House Hunt Blog:
Fighting a losing battle? Skip a payment.
Perma-bulls in the real estate world often use snippets of anecdotes to counter the data-driven arguments of the real estate bears who say current price levels are not supported by fundamentals.

One of the key points the bulls often fixate on is usually expressed in the form of a question with a barely passable answer attached:

“If Canadians are so stretched financially and can barely afford their homes, why aren’t mortgage arrears showing up higher than they are? After all mortgage arrears are still lower than they were in the early 1990s and our Canadian financial institutions are prudent.”
It’s this kind of rhetoric that makes the real-estate-always-goes-up crowd breathe heavy on their finger nails before polishing them against their designer shirts in gleeful gloat mode because at this point, in their own minds, they’ve won the argument.

“It doesn’t matter what your data tells you, my data tells me this time it’s different. And that’s a fact.”
Unfortunately, and you knew this was coming, that “data” provided as the bull’s argument knock out punch, ignores the financial reality: it’s only through mortgage product innovation that mortgage arrears aren’t at record highs, despite the fact they’re already double what they were just a few short years ago:

From 2006-2008, it was the 40 year amortization that allowed more over-extended Canadians to avoid falling behind. The government eliminated new origination’s of 40 year mortgages in October 2008, but the banks found a way to allow the effects of them to continue: can’t afford the increase in payments? Skip one. Every year. For as long as your term allows.

In 2010, the mortgage market was tightened ever so slightly by requiring CMHC-insured mortgages to be qualified at the discounted five year rate. You qualify for slightly less money, but you still have the flexibility of the 35 year amortization at the discounted variable rate to over-extend yourself into real estate financial Armageddon. The “prudent” banks are only too happy to oblige you because your mortgage is insured by the CMHC and they’re turning around and selling these loans into the mortgage backed securities market faster than they’re writing them anyway. In other words, the banks have zero risk in this game.

In 2011, just 20 short days away from today, the CMHC will stop insuring 35 year amortized loans. The banks have already found their solution to this little issue, it’s been working for them for a few years now: let Canadians skip a payment and roll the interest back into the principle. It’s a little accounting trick that nets the debt holder more money as long as the mortgage doesn’t default–Sh&t it’s as close to a win-win-win as the Canadian mortgage game can generate: debtors don’t have to pay their debts on time, banks don’t have to default on the loans and the pension funds that eat up the MBSs being sold by the CMHC don’t see any risk to their investments as long as the tax payers keep backstopping this prudent smoke and mirrors financial practice.

This skip-a-payment thing is offered by almost everyone in the mortgage game. If a household exercises this option once a year, as most mortgage contracts allow them to do, for a full five year term, it has the same effect on lowering payments as a five year extended amortization. So yeah, the 40 year amortization still exists. After March 18, 2011, the 35 year amortization will still exist. Just not in name.

#230 jess on 02.28.11 at 7:03 pm

http://www.guardian.co.uk/environment/2011/feb/20/worlds-largest-rubbish-dump-brazil
=========================

#231 jess on 02.28.11 at 7:16 pm

… the fraudor and the fraudee it’s so confusing!

Fox News Chief, Roger Ailes, Urged Employee to Lie, Records Show
By RUSS BUETTNER
Published: February 24, 2011

=

Phone-hacking scandal hits Murdoch business as investors grow restlessStorm surrounding News of the World threatens to engulf global empire, with investors worrying row is threat to BSkyB deal

http://www.ritholtz.com/blog/2011/02/roger-ailes-to-be-indicted/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+TheBigPicture+%28The+Big+Picture%29

=
Kerik, Ex-Head of New York Police, Gets 4 Years in Prison …18 Feb 2010 … “I’d like to apologize to the American people,” said Bernard B. Kerik, the former New York police commissioner, after his sentencing …
http://www.nytimes.com/2010/02/19/…/19kerik.html – Similar – Add to iGoogle

#232 Crazy on 02.28.11 at 7:19 pm

Garth,

You censored my comment. Why?

Comment on any issue. Not on me. — Garth

——–

So, you can comment on others, but we can not state a strong opinion about you?

You poke fun of everybody all the time…

What was wrong with my comment?

Displease me and you will be smitten. — Garth

#233 jess on 02.28.11 at 7:24 pm

the fake people ARE the news

http://www.politicsdaily.com/2011/02/25/ailess-sex-and-lies-tale-there-is-something-different-about-fo/

#234 wes_coast on 02.28.11 at 7:24 pm

Hey Garth, I was wondering if the goverment of Canada actually tracks foreign ownership of property?If so, where can a person get their hands on such data?

#235 Roial1 on 02.28.11 at 7:26 pm

#59 Steve from Calgary on 02.28.11 at 2:15 am
As a reminder, the National Energy Program (NEP), sucked $100 Billion dollars out of Alberta.

That would have been sent to Dallas as profits.

#236 Roial1 on 02.28.11 at 7:38 pm

69 Zorik on 02.28.11 at 2:51 am
Just wanted let you guys in to spelling know,
It is not anymore Vancouver it is Hongcouver!

I am kind of partial to Vancong myself.
It’s shorter and has a “Game-y” sound to it.
Don’t you think?

#237 morry on 02.28.11 at 7:42 pm

Disappointed? Get a puppy. — Garth

Your third career is in stand-up…

#238 Nicky Bouts on 02.28.11 at 7:46 pm

Garth,
I’m impressed you commented most of the way through the 306 comments yesterday. My question which I did not see when I filtered and I think I know the answer regarding TFSA’s. I know you can desposit $5k + previous years withdrawls. Does that still count when you withdrawl everything with gains?

For example myself I have $18k this year. Lets say in December that number is $20k and I take it all out. A new TFSA for Joe Blow could take $20k in 2012, mine could receive $25k correct?

You may return what you took out, but not in the same year. New money is restricted to 5K per calendar year. — Garth

#239 March of the Pigs on 02.28.11 at 7:59 pm

Vancouver looks an awful lot like California before the bust. How many years later and they’re still looking for a bottom. It was different there… Everyone wants to live in the sun and be by the beach… I even hear the same thing in Newfoundland and no offense to where I come from but I’ve lived in a few places that I would consider more appealing weather wise. It doesn’t get much worst than Canada really when it comes to winter weather, maybe Russia. Keep living the fairy tale but remember what happens when the clock strikes midnight.

#240 Cookie Monster on 02.28.11 at 8:06 pm

I think 20 or 30 gold-standard posts a day is sufficient for us to get the point. This is not a gold blog. I will do what I feel necessary to keep the conversation moving. Disappointed? Get a puppy. — Garth
———-
I hardly ever post here. Unless something grabs my interest I’m usually pretty quite. Friday and Saturday was a lot of posting for me because I will make the effort when it’s important, when the topic concerns money, ethics and inflation.

Instead of stopping at two, due to being stifled, I now have six posts today. I’ll try not to post ever again.

#241 Industrial Guy on 02.28.11 at 8:14 pm

“Steve from Calgary on 02.28.11 at 2:15 am
As a reminder, the National Energy Program (NEP), sucked $100 Billion dollars out of Alberta.”

Steve, you have been smoking too many old Reform Party leaflets. I think you mean the NEP didn’t permit Albertans to suck a $100 Billion from the pockets of their fellow Canadians. The two price policy was designed to shield Canadians from the economic chaos rocketing energy prices had created in the rest of the World. Yes, a lot of oil rigs moved out of the Province after Ottawa cut short their greed fest. Trudeau wanted to use the resources of Canada to benefit Canadians. A radical idea in Calgary I guess.

Steve from Calgary, Alberta is still part of Canada. so, just get over it.

#242 ballingsford on 02.28.11 at 8:25 pm

We got a bit of snow here today and I’m willing to pack boxes full of it and sell it to anyone who wants to build their own snowman (just round off the corners), make a fort, make some snowballs, etc.

It’s made in Canada! Will ship to anywhere.

It’s only $1600 per square foot! Bargain indeed!
Supplies are limited, so place your order before you get left out!!!

Also, I need to hire people to stand in line looking as if they are interested in buying! Port a potties will be provided.

#243 Industrial Guy on 02.28.11 at 8:28 pm

BDG-YYC
Canada ….. you remember … From sea to sea to sea.
A lot of Albertans thing the world ends a few Kilometers East of Not Medicine Hat and a Kilometer or two West of the Crows Nest Pass.
Until you seperate and issue your own currency and passports …. that oil is a Canadian resourse.

#244 Robert Dudek on 02.28.11 at 8:29 pm

Well, yes real estate IS overvalued. But that does not mean it won’t get MORE overvalued.

Timing means a lot in this world.

For example, there were people in 2006 that knew the US was in a housing bubble and that there would be a huge crash and the stock market would eventually tank. So they started shorting the S&P and lost their shirts because they were “too early”.

I think real estate is overvalued all over Canada, but I also believe that the government will do all they can to prevent a crash.

On the other hand, the world is ripe for another generalized crash. There are any number of potential triggers, but if that happens equities will be hit just as hard as Canadian real estate.

So the answer is to spread out your risk. For people who are highly leveraged and have most of their net worth in real estate – Garth is 100% correct – you are on the high wire hoping things don’t go wrong.

Also, there might be a slow melt as Garth says in nominal terms, but this will actually represent a major crash in real terms.

#245 moloko on 02.28.11 at 8:38 pm

#65 Not PC but I don’t care

” I drove by the line up for the Bosa property in Burnaby several times, all I saw were Chinese. It sold out in one day most likely to a very high percentage of Chinese. The Olympic Village lineups were again 90% plus Chinese and I am sure that a similare percentage of the sales were Chinese. From my experience many of them don’t work here or they park their family here while the husband works in China. They therefore don’t pay their share of taxes to live here but welcome the free medical and education for their families.

There are 1.4 billion people in China. You tell me what is going to stop the influx. If real estate corrects more will come.

When is the government going to wake up to this crap? When there is so damn many of them they run the government? If they want to come here so bad tax the bejesus out of them to do it. Tax them on their global assets and income. Sure everyone is happy that their home prices are up but look around, your the only one that speaks english in Richmond and none of your neighbors speak to you. When you sell and downsize where are you going to live and not feel like a minority? Moosejaw? Where are your kids going to be able to afford a home?

Our government is a pathetic group of short sighted, spineless sell outs. Thanks for turning a once amazing Vancouver into Shanghai.

Do not label me a racist. Many of my friends are Asian and they are more pissed off than me. They joke that this is exactly why they left China in the first place. I think if many of us were given the choice of having a more severe recession or pumping in as many Asians as possible to float the economy we would have chosen a more severe recession.”

well said! screw PC crap, give me back my city.

#246 moloko on 02.28.11 at 8:41 pm

and screw Cam Good for flogging our real estate in China WTF!

#247 Scare Crow on 02.28.11 at 8:46 pm

Seems like the majority of the blog talk today is about immigration – bending to appease others – lets face it – bottom line, the Canada I know, loved and cared for – without hesitation die for her – is all but gone – am I being a cynical idiot – probably – but this country has lost its way – it walks on egg shells when ever a topic of different races – it hit me in the face when Mississauga many years back would fly the Canadian flag – and for some unknown – bulls@it reason let other’s in the community fly their place of origin flag beside the Canadian – sort of like a ambassador of good will…

How did that turn out – well, one country had their chance (no names mentioned or I’d be call a facist) – and then a country that was a odds with them – well the community members from that country went straight to Mississauga City hall and complained – Yep – this is Canada –

I would love just once – if this country faced a unbelievable situation and called on all citizens to bare arms and fight for this country – I would love to see who “really”comes and sheds blood for our motherland – [Exactly]

Its those who are true Canadians – a love so deep – they give and ask nothing in return – that my friends is what a true Canadian is -

#248 ballingsford on 02.28.11 at 8:47 pm

Further to my previous post, I’ll also be having a fly over with buyers from the southern areas such as Florida, Mexico, and Saudi Arabia.

It’s fresh scooped snow and it contains no poop!

Delivery is extra, probably around another $1600 per square foot.

Reply to this blog or call 1-800-ring-a ling.

The first 500 will get a frozen snowball that you can keep in your freezer forever!

#249 Pat on 02.28.11 at 8:56 pm

#224 Eric:

“Ever if there were a 50% crash my place could still be worth $350,000 and if I had to sell I’d get my money back.”

But you’d have missed to cash out for a $350,000 after-tax profit. This blog is named after people like you.

#250 CantWaitToCrash000 on 02.28.11 at 8:57 pm

re: Yellow Peril.

After reading these comments. It seems that hatred is always there as long as there is someone else is different. You hate people who are richer or smarter and you despise those who are poorer or dumber or less educated, less fortunate than you.

People will always find a reason to hate other groups.

I have known many Chinese-Canadians who is law-abiding, celebrate wildly on Canada day and paid their taxes.

Chinese-Canadians must learn to protect themselves like the Jews are now after the Holocaust. Don’t depend on other groups to play by fair and civilized rules.

#251 Pat on 02.28.11 at 9:12 pm

#205 Moneta:
“… They mostly came from countries where cooking was more important than maintaining the landscaping…
Does that make her a racist?”

No, but perhaps a bad cook?

#252 Crazy on 02.28.11 at 9:21 pm

Displease me and you will be smitten. — Garth

——-

Like the ant that I am!

#253 Devore on 02.28.11 at 9:31 pm

#218 DaBull

As far as dividends go, maybe check again, I think they’re included in the DJI, but not the S&P 500.

Maybe YOU check again? Why would an index of stocks include dividends in its price?

Didn’t realize that buying in to the DJI or even the S&P 500 allowed you to live at the NYSE. Think you forgot to add the rent you have to pay each month to live some where. Me thinks that would equal things out in the long run.

I didn’t realize living in a house was free. You’re comparing the growth of the price of the stock market index, to the growth of price of houses. By presenting and focusing on that metric only, you’re ignoring the fact that a house costs you money to live in, while stocks pay you money.

– Since 1900, average total return of the DJIA was 9.4% (4.8% in price appreciation, 4.7% in dividends)
– Since 1929, the return was 8.8% (4.6%, plus 4.3%)
– Since 1932, 11.2% (7.0%, plus 4.2%)
– Since 1985, 11.2% (8.4%, plus 2.8%)
– Since 1990, 10.2% (7.7%, plus 2.5%)
– Since 2000, 3.1% (0.7%, plus 2.4%)
– Since 2005, 4.2% (1.6%, plus 2.7%)
– For 2010, 13.8% (11.0% plus 2.8%)

As with everything, there is the right time to buy a house, and the wrong time to buy a house. If you buy at the top of the market, it will not appreciate nearly as much, and will be sucking wind for a long time if the market crashes.

#254 Pat on 02.28.11 at 9:40 pm

@ #245 moloko,

Hey, milk, if you don’t like it in Canada, go back to Russia. Same to the other xenophobes squirming against recent immigrants – if you don’t like (contemporary) Canada, go back to wherever your ancestors came from. How about this, works the other way too, eh?

#255 NFN_NLN on 02.28.11 at 9:43 pm

“If Canadians are so stretched financially and can barely afford their homes, why aren’t mortgage arrears showing up higher than they are? After all mortgage arrears are still lower than they were in the early 1990s and our Canadian financial institutions are prudent.”

http://edmontonhousingbust.com/files/101223-1.jpg

Zing…

#256 TheFirstRick on 02.28.11 at 9:49 pm

#250 CantWaitToCrash000 on 02.28.11 at 8:57 pm

re: Yellow Peril.

After reading these comments. It seems that hatred is always there as long as there is someone else is different. You hate people who are richer or smarter and you despise those who are poorer or dumber or less educated, less fortunate than you.

People will always find a reason to hate other groups.

I have known many Chinese-Canadians who is law-abiding, celebrate wildly on Canada day and paid their taxes.

Chinese-Canadians must learn to protect themselves like the Jews are now after the Holocaust. Don’t depend on other groups to play by fair and civilized rules.

++++++++

You’ve just countered a number of stereotypes you disagree with by providing your own self serving stereotypes.

Pure genius.

I think you readily and conveniently confuse dissension with ‘hate.’

#257 NFN_NLN on 02.28.11 at 9:52 pm

I did not say two years until tanking. My consistent prediction has been a correction, followed by a multi-year melt. It stands. — Garth

One day your blog posting should just run a dozen of these quotes from you. Some people either don’t get it, can’t read, or haven’t been reading your site regularily.

Garth is a financial guru, but an IT master he is not. This blog is a little 90’s. There should be a FAQ or sticky section where frequently answered questions go. Otherwise good posts get lost in all the noise. You can’t expect everything to rummage through all the gold posts, DA posts, etc. to find the gems.

I would highly recommend moving to a voting scheme so people can vote posts up and down and then each person can set a threshold level.

Would you like a pony, too? — Garth

#258 Utopia on 02.28.11 at 9:59 pm

At the little gas station I use in Saskatoon they tell me fuel theft (gas and run) have shot up since the price of fuel increased last week.

Maybe its a sign of the times. Budgets are that stressed. The sweet gal there says its usually young guys with big trucks who fill before fleeing.

So its always a big loss.

#259 Onemorething on 02.28.11 at 10:01 pm

Well Garth, a good topic right now and maybe FINALLY all the Papered Over Fallout is about to roost.

I agree in the long drawn out demise of RE in the Western world actually. Not as much a demise but a massive well engineered (not) teetering on the edge scenario where shoes are dropping left and right, damage control, more shoes until some equalibrium can form.

This will however not occur without global pain, protectionism and massive consolidation at prices below cost. The biggest swindle ever recorded you might say and will take 100’s of years to ever match it going forward.

The reality is simply something that has to occur as some point for Canada, Australia and China RE.

I’ve learned that if you take RE investment off the table, you free up bandwidth to make loads of money in currencies, oil and all other REAL consumables.

RE is such an emotional illiquid play. Between fish farming, free range chickens and growing chili peppers, I have added Birds Nest export to my list.

All is sweet when you make what you eat!

#260 MarcusG on 02.28.11 at 10:06 pm

The internet trolls that find a way to inject hatred and paranoia into every discussion appear to have found a place here. Ever read the comments sections of newspaper articles? You’d think the only people that owned computers were racists. Anonymity allows for the expression of the the ugly side. This blog (that I have been reading from it’s beginning) didn’t seem to have as much in the first couple of years but the trolls have come knocking now. People like Not PC and Jeff are cowards who forget that they’re own ancestors at one time (probably not very long ago) were also looked at with suspicion and derision.

#261 theletterM on 02.28.11 at 10:08 pm

Whoever buys these houses must be drinking Jim Flaherty’s “Financial Punch” Koolaid.

#262 The American on 02.28.11 at 10:26 pm

Frankly, I am shocked at the many Canadian-made, anti-immigration sentiments I am reading today and in the past several days on this blog. Although it hasn’t directly been stated, what it boils down to is that many Canadians are wishing they had the old, mostly-caucasian Canada of yesteryear. Is this the mindset of the Canada that is constantly conveyed to the world? Ummmmmm, NO it isn’t.

Immigration happens, and although LEGAL immigration may seem painful, it is indeed a good thing to have this diversification within a populous. It is HOW you handle legal immigration that matters so much to creating a continuity among the masses, without sparking political and civil unrest.

Allowing anyone to enter a country and establish legal residency or citizenship just because he/she can anti up $500,000 or more is clearly not a good way to handle it as is evidenced by the angry comments I keep reading. Limitations to legal immigration, aka “higher standards,” should be set prior to passing out that real estate.

#263 A True Canadian on 02.28.11 at 10:44 pm

#174 – Why do you find it so funny that a “Chinese” looking guy should make such a comment against “immigrants”? Could it be that he actually considers himself to be a “true Canadian” even though he’s not white? Oh my, the thought of that being true must blow up your tiny little brain.

Many commenters making remarks about Chinese do not differentiate between recent immigrants, old immigrants and Canadian born Canadian-Chinese, preferring to lump them all into that catch-all phrase “yellow peril”. Maybe if you actually knew a few and talked to them and were friends with them, many of the very stupid comments would hopefully not be made.

But then, ignorance knows no bounds.

#264 UnagiDon on 02.28.11 at 10:50 pm

Yes, racism in Richmond is alive and well. These days, you need to be Chinese to even *rent* a place:
“Looking for a nice Chinese family to move in, preferably Mandarin speakers”
http://postimage.org/image/1gqqq9c90/

#265 Patz on 02.28.11 at 10:53 pm

#126 David

One could argue that making money in the movies is one of the least socially destructive ways to get rich. And does making a lot of money for a movie disqualify one from speaking out? However, your point is flawed mostly by the fact that the “movies” Charles Ferguson produces are documentaries–not generally known as the big grossers–and he puts his money on his opinions. His docs are about things like Wall Street’s schemes (Inside Job) and Iraq (No End in Sight).

Put simply: I think Ferguson is well qualified to speak out.

#266 Utopia on 02.28.11 at 11:01 pm

#140 Spiltbongwater wondered….

“Wouldn’t surprise me if China has this website on its blackout list”

———————————————————-

Seems you might just be right Spiltbongwater. If you go to Baidu.com (China’s version of Google) and enter Greaterfool.ca in the English you get a lot of sites coming up code 404. Nothing, in other words. There are messages telling you that the URL cannot be found and some old copies of articles that are available.

Maybe the Chinese are mad at Garth for todays post.

Here is one that went through successfully when requesting Greaterfool.ca ….note that it refers to Kelowna and real estate offers there.

Damn, that Devils advocate may be advertising over there after all.

http://www.matchi.com/site/greaterfool.ca

#267 Throwstone on 02.28.11 at 11:20 pm

Racism really is not the issue. Seems it’s more symptomatic of other economic imbalances, and the government of the day is doing nothing to stem this.

http://www.visafirst.com/en/news_and_updates.asp?item_id=1273

“Canada has extended the Irish allocation of working holiday visas from 4,000 visas last year to 5,000 this year”

VS…this

http://hamilton.kijiji.ca/c-jobs-general-labour-hard-working-male-looking-for-work-ASAP-W0QQAdIdZ262232356

http://toronto.kijiji.ca/c-jobs-general-labour-I-am-looking-for-a-Warehouse-Position-W0QQAdIdZ263986699

http://toronto.kijiji.ca/c-jobs-general-labour-Strong-hardworking-Labourer-Ready-to-start-Right-Away-W0QQAdIdZ263957030

#268 The American on 03.01.11 at 12:36 am

Unbelievable. I’m honestly not sure if I’ve ever witnessed more racism and ignorant commentary surrounding race in a single string. You all should seriously grow up, stop being so naive, and get with the times.

#269 pablo on 03.01.11 at 2:48 am

i didnt think my last post would make the p.c. test too in your face for all the p.c. readers here.

#270 Petrol Head on 03.01.11 at 5:27 am

#168 Robert Dudek “All you Vancouver people complaining about how Asian immigrants game the system and that Chinese have taken over Richmond…
1) Change the laws
or
2) Move somewhere else if you don’t like it.”

1. The CDN gov’t is starting to change the laws due to this.

2. We did and took our money with us.

#271 Steven Rowlandson on 03.01.11 at 12:24 pm

Hello Garth.
That $2,199,000.00 shack looks like the same design as my dads first home. He bought one back in 1965 on vancouver island near comox. It cost him $6,700.00 and that was like 1.25 years pay. Frankly Garth the world as we know it today is crazy. Like you say “This will not end well.”

Steven

#272 BigAl (Original) on 03.01.11 at 4:57 pm

#211 OttawaMike on 02.28.11 at 5:10 pm#198 BigAl (Original) on 02.28.11 at 4:24 pm
Really?!?
Tell me why Brazil, India and China’s economies did not start to boom until they opened up their borders to world trade?
Or was it a mere coincidence that their economies thrived with globalization. I’m still waiting for the fallout from NAFTA that all the doomsters predicted.
=======================================

Exactly my point. These are the economies that are thriving under asymmetric free trade while the U.S. and Canada are coming down in our own living standards. Do you honestly think that these countries are completely open to imports??? They themselves are explicitly and tacitly protectionist and everyone knows it.
Until we meet the criteria for the theoreticals in free trade that will allow all to benefit (unified global currency, free, completely unhindered and unregulated flow of labour/captital/goods), there will be severe distortions and disproportianate benefits. Some (India, China, Brazil) benefit immensely, others (Canada, US), lose immensely (Trade Deficits, job losses, downward pressures on wages, etc etc).
Ask Canadian manufacturers how they feel about NAFTA now with the high dollar. Like I said, without the theoretical foundations for free trade in place, there are distortions to the theoretical outcome of “a rising tide lifts all boats”.

#273 Mister Obvious on 03.01.11 at 5:32 pm

#244 (Robert Dudek)

“Well, yes real estate IS overvalued. But that does not mean it won’t get MORE overvalued.”

True. The same type of thinking kept Nortel shares selling long after sane people should have bailed.

#274 Zorik on 03.01.11 at 7:44 pm

Listen your canadian goverment let chinees only immigrate here because of money.
You can not kill the cow who gives a organic milk for country.
1. They have a cash and they need first to be milked by canadians banks and realtors.
2. Then House prices will be go down just matter of time.
3. Then you guys buy the houses at higher interest with good downpayment
4. Who will be looser ?