How to invest

Looking for digs in Vancouver? Kijiji alone has 2,700 apartments to chose from this week. In Calgary there are 3,200 units available online. And in Toronto, Kijiji today has 15,545 rental places to hang your hat – a whopping number of them condos bought by speckers and flippers. By the way, there are 1,885 more listed for rent on the MLS system – which means you have seventeen thousand reasons to cherish being a tenant more than a landlord.

In fact, now that the real estate market’s running out of gas – and with another 17,000 condos set to flood Toronto alone this year – it’s hard to fathom what investors are thinking. Do they research the market before they buy? Do they know what it costs to carry a Big City condo these days (fees and taxes alone can be $1,200 a month for a one-bedder)? Do they really think their concrete box will soar in value in cities stuffed with them? Or are they merely seduced by a cheap downpayment, flashy brochure and a shapely babe in the sales centre?

For those who were still filling their Pampers when the last condo crash hit – 21 years ago – let me tell you, it was ugly. At the end of a housing boom (like this one) developers went nuts and overbuilt (like now) and about 30% of all sales were to speculators (just like now). Within two years it was impossible to sell without losing money, and equally futile trying to collect enough rent to carry a place even if it was paid mortgage-free. I know. I had two of them.

As I’ve mentioned before, a failed investor who owed me big bucks swapped his debt for two, new downtown condos on the waterfront. The taxes and condo fees were $1,400 a piece and the market rent was $1,200. I was happy to find tenants at all – and had to sit on negative cash flow for five long years until the market started to sputter back to life (and I had no financing in place).

So, I’ve seen this movie before. Know how it ends. Only this time, on the heels of the greatest condo orgy in Canadian history, boatloads of idiot investors are about to understand economics. Especially those who bought with minimal downpayments, whose leverage will magnify losses exponentially.

One of my working rules has always been, never, ever buy a single residential housing unit to rent out. And never, ever, ever buy it from plans.

Far better to buy a SFH which can house a couple of tenants, or a triplex or a small apartment building. As I write this, for example, there’s a five-plex (fully rented) in downtown Windsor for $250,000 or another giving an 11% return, for $169,000, or a cash-positive 8-unit apartment building in Guelph for less than the price of a Lesleyville shanty.

But there’s another option available for those who want to put their investment bucks into residential real estate, instead of those scary stocks or bonds. They’re called REITs – real estate investment trusts – and for the past couple of years the returns have been impressive. While my own preference are REITs that invest in top-notch commercial properties (last year they jumped more than 20% while kicking out a 5% dividend), trusts that own rent-collecting residential properties are smoked.

In fact, this week a research paper by Macquarie Capital Markets Canada underscored exactly what I’m talking about. The company compared owning a condo in Calgary or Toronto with investing in units in one of two REITs – Boardwalk or Canadian Apartment Properties. The assumption was a 900-square-foot, one-bedroom unit for 40% down, generating market rent and appreciating (or depreciating) at the same rate as all similar properties in the same city.

Guess what?

Calgary: “If an investor purchased a standard condo as an investment with a three-year holding period from January 2008 to December 2010 (while achieving average market rents), the investor would have realized a 31.7% decline in equity value. In contrast, had the investor purchased units of Boardwalk REIT, the investor would be up 8.4% – an absolute difference of 40%.”

Toronto: “If a condo was held from January 2008 to December 2010, the investor would have realized an aggregate net rent income (after expenses) of $1,825 against an initial equity investment of $122,000 (approximately 1.5% income return). On the other hand, had the same investor purchased $122,000 of Canadian Apartment Properties REIT (7,656 units), the investor would have received $24,800, or a 20% income return.”

But there’s more. In a crappy market, condos are illiquid. REITs can be sold in 15 minutes. Empty condos need to be filled with tenants who actually pay on time and don’t pee on the hardwood. REITs require no maintenance. Rental properties with mortgages need to be refinanced every few years, at interest rates you cannot control. Worse, condo owners have to pay monthly fees and escalating property taxes. REIT owners, in contrast, collect money.

And here’s the ultimate strategy: Move into a speck condo and let the idiot investor subsidize you. Use your down payment money to buy an apartment REIT.

Or maybe a whole damn building.

207 comments ↓

#1 Jeremiah on 04.06.11 at 9:35 pm

5 plex for 250k. Wouldn’t that be nice

- edmonton

#2 Victor on 04.06.11 at 9:39 pm

Dear Garth,

I following your blog for two years. For two years you’re keep telling us that the real estate market in Canada is about to burst. What we see…For the last two years real estate prices went trough the roof and keep going up. In almost each of your postings you’re saying that in few more months canadian real estate bubble will burst and prices will drop for at least 25 – 30%. You have to realize that here is a lot of people like myself following your blog and keep waiting for this miracle to happen. How long we have to wait for that moment?

I’m not your mom. The above post gives you options. Figure it out. — Garth

#3 Chaos on 04.06.11 at 9:46 pm

yay!!!!25th

Vlad, news report today on CBC Newsworld…

“Gold prices rising because the end of the world is approaching.” Blah, blah, blah….mayan calendar…
blah, blah, blah…people will be trading gold for basic needs…blah, blah, blah…December 21, 2012.

Woofin’ hell. We’ve gone mainstream. We’re going to have to find a new schtick. Unbewoofin’lievable.

It’s one thing when you and me put on our tinfoil and act a little crazy, it’s something else when apparently rational people start to sell the end of the world.

Oh, I forgot….Y2K. There’s a buck in it somewhere.

#4 Montrealer on 04.06.11 at 9:46 pm

I bought a plex with my father at 6.x times revenues.
Today the same type of building on the same street is selling for around 21 times the revenues.
Even with low interest, you can’t make money at 21 times the revenues!!!

So buy elsewhere. — Garth

#5 Darryl on 04.06.11 at 9:47 pm

Better check fire codes before buying multi units . You may have to upgrade.

#6 Cyrus on 04.06.11 at 9:50 pm

http://www.theglobeandmail.com/globe-investor/a-home-sweet-investment-home/article1973980/

#7 Landlord22 on 04.06.11 at 9:50 pm

Just yesterday a real estate agent friend of mine encouraged me to purchase a pre-construction “investment” condo in Toronto. Not a chance. I will send her this link :)

What caused the condo crash 21 years ago? My agent friend argues that it is different today due to immigration rates and demand for housing in Toronto. Is there any merit to this?

#8 LJ on 04.06.11 at 9:55 pm

Great post. If people don’t get it with this one, they never will.

I love the part about not having maintenance with investments. Park the money and don’t worry about tenants calling you in the middle of the night.

#9 Winterpeg on 04.06.11 at 9:56 pm

As with any investment there needs to be research,. Just last weekend in the Winnipeg Free Press there was an article on REITs

REIT shell games are destined to implode – Winnipeg Free Press
26 Mar 2011 … REIT shell games are destined to implode. By: Fabrice Taylor / Inside Track.

That article sure didn’t impress me. Not a single concrete reference or fact. — Garth

#10 squidly77 on 04.06.11 at 9:57 pm

Jeremiah……Patience.

Idiot Specuvestors don’t even know they’re stupid.

#11 Donn on 04.06.11 at 9:59 pm

Actually that 5 plex in downtown might be a good deal. The University of Windsor is talking about moving several faculties downtown like the college did. We have had our butts kicked for about 6 yrs. in real estate so the downside might not be as bad as boom towns. Go spitfires!

#12 The American on 04.06.11 at 10:00 pm

Garth, I know your statistics for new inventory entering the Canadian market are absolutely spot-on. It is absolutely alarming to think Toronto alone as 17,000 new units entering the market this year. I’m sure people cannot comprehend what that really entails, but allow me to break it down. All things are relative.

The closest U.S. market to a city such as Toronto would be New York City. Each city is the beacon of financial strength within each country, and each are relatively close to one another on the Eastern side of each country. Here’s the deal… Stay with me now…

Toronto has a metro population of 5,113,000 people. New York City has a metro population of 19,007,000 people. Toronto has 17,000 ADDITIONAL condos coming to market this year, NOT including existing inventory today. New York has about 12,700 condos on the market today. These are the data points we will use for this discussion.

New York is almost 3.72 times the size of Toronto, or 372% larger than Toronto. However, New York has significantly less aggregated inventory coming to fruition compared to that of Toronto. New York has 4,300 LESS condos in inventory than Toronto to serve a market that is 372% larger than Toronto.

Prices, even in New York, have declined over 20%. Yes, prices fell that much even with inventory supply at that minimum level. So, what’s this say for Toronto? Well, these numbers indicate that, when adjusted for population, Toronto has 500%, FIVE HUNDRED PERCENT, of the inventory of New York. THAT DOESN’T EVEN INCLUDE EXISTING TORONTO INVENTORY. Simply put, Toronto is complete toast in the very near future. No amount of immigration, flipping, new buyers, move-ups, move-downs, or speculation will save it. Canada’s TOTAL immigration each year does not even amount to the immigration that New York receives each year. No more excuses, and no more “we’re different” pathetic b.s. It is over.

#13 sick_of_waiting_to_buy on 04.06.11 at 10:02 pm

#2 “How long we have to wait for that moment?”

Garth, don’t dodge the question. Answer it straight if you have courage to face the reality that your wrong forecasts are hurting people following this blog.

You bruise easily then. It will happen when it happens. — Garth

#14 squidly77 on 04.06.11 at 10:03 pm

It ain’t just condos sitting empty, there’s thousands and thousands of houses in Alberta sitting empty also. There they sit lonely and sad, month after month after month.

Even the specuvestors offer of subsidized rent isn’t enough to lure people into their card-box fire prone boxes made of particle board, plastic and glue.

#15 dd on 04.06.11 at 10:11 pm

#3 Chaos

Woofin’ hell. We’ve gone mainstream. We’re going to have to find a new schtick. Unbewoofin’lievable.
…………………………………………………………………….

Mainstream? Out of all the people that I known only 2 own the metals. How could it be mainsteam when nobody owns it? It is a fact. Do a little research.

#16 April on 04.06.11 at 10:12 pm

Victor #2 – Not all real estate has gone up. In fact if your going by the media reports be very suspicious of the numbers. Just ’cause it’s on tv doesn’t mean it’s the truth. Garth has said a 15% drop this yr and a slow melt after that. Many listings in my area of the Lowermainland BC have been sitting for mths … some sold signs in the last couple of weeks. Units in a few buildings that I’ve been keeping an eye on for the past yr and half have not increased their asking price and some have dropped recently.
Garth did accurately predict a downturn in 2008 and you surely must know what happened via CMHC to create a housing bubble so as to prop up the Canadian economy.

#17 dd on 04.06.11 at 10:14 pm

.#2 Victor

I following your blog for two years. For two years you’re keep telling us that the real estate market in Canada is about to burst.
……………………………………………………………………..
Victor, open you eyes and do a little independent research. Garth is one man with one opinion. Some of his predictions are right but they won’t all be.

#18 Tim on 04.06.11 at 10:14 pm

Garth,
Given the taxes, high maintenance fees-north of $400/mo for some condos, and the fact that you don’t own the land and the building depreciates, when (other than at the start of this run-up ten years ago), if ever is a good time to buy one for a principle residence Also, factor in that if you buy in the Lower Mainland, chances are that it was built by inept tradesmen, using cheap materials and stands a good chance of leaking…

Does it ever make sense to buy? I rent a one bedroom apartment for 1000/ month in one of the nicest neighborhoods. A one bedroom condo in this neighborhood would cost around $375k-$400K

#19 TEN STRAIGHT MONTHS OF FALLING SALES IN THE GTA on 04.06.11 at 10:15 pm

The housing crash continues to worsen as sales have dropped yet again for the 10th month in a row of falling sales. Empty condo’s everywhere and “investors’ can ‘t even rent it out cash flow negative. Driving around the GTA and what you see is a disaster in the making as house after house sits on the market for MONTHS without any buyers. It’s going to be a nasty crash.

#20 squidly77 on 04.06.11 at 10:16 pm

Someone left a comment once that said….

Specuvestors wont know that they’re stupid until someone smashes a 2×4 right into their face.

IMO that blogger called it right.

#21 Utopia on 04.06.11 at 10:17 pm

I laughed my head off at todays photo. Too funny!!!

#22 April on 04.06.11 at 10:19 pm

Just wondering if anyone has the stats on the number of condos coming on stream in the Lowermainland this yr?. There’s alot of building going on all over the place.

#23 Jsan on 04.06.11 at 10:20 pm

As some people understand and more will soon understand, the last couple of decades of pure debt driven growth is all but winding down. Governments have desperately pumped Trillions and Trillions of dollars into our economies and pushed interest rates down to zero and what has it bought? Barely a return to what would be considered tepid growth. The game is over, this will be the last hurrah in Canadian real estate as in the near future we will inevitably join the US meltdown and than finally this current generation will begin to understand that yes, debt does matter and having too much of it really cramps the lifestyle many have been funding thanks to cheap and easy credit

You can add much higher costs for everything to this whole mess. Here in Alberta, they are warning that electricity rates will probably double in the next couple of years. Just another large expense that will have to be paid by already stretched consumers.

“Our Debt Binge Is Ending — And The Middle Class Will Get Clobbered”

http://finance.yahoo.com/blogs/daily-ticker/debt-binge-ending-middle-class-clobbered-20110405-094510-405.html

#24 Dr. WAYNE on 04.06.11 at 10:20 pm

#13 : It will happen when it happens. — Garth

Well … the polar ice cap will melt ‘when it happens’ … not a very good confidence builder.

#25 Cellar Dwellar on 04.06.11 at 10:22 pm

I actually feel sorry for the 30-40 somethings that have never seen a crash( they were too young to remember or care). I remeber the 80′s .It was UGLY. One person asked me to burn their house down at one point. THATS how desperate people were.
I have friends in Vancouver that brag that their houses are worth over a million bucks.
When I reply,” Then sell it and you’d be a millionaire”
They’re incredulous response is , ‘But,but, I’d just have to buy a more expensive house”.
“Then rent for a year or two”, is my reply.

Which begs the question, BPOE. If people with houses that are assessed at over a million dollars arent willing to sell because they dont want to have to spend even more to jump back into the market……Who else can afford it? Asian investors? for how much longer? Chinas bubble is about to pop and then everything! Housing ,commodities, US T-Bills, everything is gonna be a gong show.
Before you put the prescription Qualada cream down so you can wash your hands to type a reBUTTal. Just remember ….INTEREST RATES ARE GOING UP UP UP!
Your heard it here first :) from Garth. Months ago.

2

#26 Bill Grable on 04.06.11 at 10:24 pm

Mr. Turner, I would have given up a few days in the Maui sun to have had you here with me here today, to try and patiently explain exactly what the implications are for RECOURSE and NON-RECOURSE loans.

I should have taken my non-alcoholic St. Paulie and moved ….but then this guy from California starts talking about how he was on Maui hoping that he was going to be signing off on a deal to unload a place he’s been trying to sell for TWO YEARS.
The Canadian, from Richmond, decided he’d do the – in Vancouver, “The Planes are of full of millionaires – coing to buy everything” speech on this American.

He held up his hand about two minutes in and says, (* I swear) “You ever heard of a Isaac Newton?”. The baffled Richmondian goes, “huh? you mean, Gravity Newton> Sure…”. Our quiet American friend said – “Well he was the smartest man of his day, and he made a FORTUNE on the way up and became wealthy as Croesus, but trouble was, even he got skunked in the end.

I am sure not as smart as Newton, and I can tell you my genius move on buying a condo to “rent out” has just about given me fits”.

Oh, Mr. Turner, I remember the killer 17% mortgage on my humble pile of bricks just off South Kingsway and Bloor.

I remember “THE DEFICIT” – and STAGFLATION.

Dawgie, pal = Get smart. Get a book by Mr. Turner, and start reading and learning all you can. * Any of them will do – but start!

No time for real St. Paulie. Sober days, amigo.

#27 dmc on 04.06.11 at 10:29 pm

Housing finance has gone off the cliff in Australia, which seems to be showing the hands of the data providers – dancing around like lakers girls trying to will the market back up.

http://tasmanianrealestatetrouble.blogspot.com/2011/04/whoops.html

#28 Chris B on 04.06.11 at 10:31 pm

Hey Garth, what impact will the house crash have on the value of various REITs?

None. These are rental properties. — Garth

#29 mid-Ontario on 04.06.11 at 10:35 pm

Had my hair cut yesterday.
I have been talking about Garth’s blog to my friendly hairdresser for 2 years now.

I obviously have been making no impression on her as she just went and bought herself a house with her daughter..(the out of town daughter’s portion is an investment).

She said that she could not afford to live in an apartment any longer.
She knows that taxes are up 5%+, water/sewer up 10% and hydro has doubled in the last year and that RE is at a peak but still bought. She knows that houses are sink holes but she says that she has no doubt she will get her $ back+ when she is ready to sell.

I fear that this will end nicely.

Garth, not one of my friends listens to me about what you are saying. Someone is wrong here and I fear that it is not you.

RE is slow here and dead in the countryside around us.
Being unaware is one thing BUT I told her everything we talk about here. It must be my delivery or something. Maybe, I should practice a Garth zinger to get better attention when I talk about RE.

#30 Jordan on 04.06.11 at 10:36 pm

#13 sick_of_waiting_to_buy on 04.06.11 at 10:02 pm
#2 “How long we have to wait for that moment?”

Garth, don’t dodge the question. Answer it straight if you have courage to face the reality that your wrong forecasts are hurting people following this blog.

You bruise easily then. It will happen when it happens. — Garth

All the books I read state that it nearly impossible to call a top or bottom in any market. Doesn’t matter if your Buffett or any other major investor. Too many unforeseen events can delay the inevitable.

Good luck with your new purchase!

#31 tonguestump on 04.06.11 at 10:38 pm

Don’t kid yourself Garth, It’s not the same movie. You haven’t seen this one before. Significant investor flaw that one. But then you have lots of time horizon left with investment bucks – don’t you.

I have no idea what you mean. Try again. — Garth

#32 bridgepigeon on 04.06.11 at 10:39 pm

Nice post GT, even the photo was simple and direct.

#33 dd on 04.06.11 at 10:49 pm

#25 Cellar Dwellar

Chinas bubble is about to pop and then everything! Housing ,commodities, US T-Bills, everything is gonna be a gong show.
””””””””””””””””””””””””””””””””””””””””””””””””””’
They have about 2.5 trillion in savings at the monent. They may not let it POP.

#34 Blobby on 04.06.11 at 10:52 pm

quote : “face the reality that your wrong forecasts are hurting people following this blog.”

Sheesh – that’s the problem with our economy at the moment. People seem to feel they HAVE to own property.

*facepalm* – we’re doomed.

#35 Samson on 04.06.11 at 10:54 pm

“have to wait”

have to?

HAVE to?

sigh.

#36 Adam on 04.06.11 at 10:57 pm

REITs are fine in a bull market, but look at what they did in 2008 after the last rally. If we are really in for a collapse of housing prices I don’t think now is the time to buy. (Maybe for a short run.)

REITs derive their income from the cash flow of commercial or high-density residential rental properties. A housing correction will have no measurable impact. As for performance in the financial crisis, investors never missed getting a payment. Did you just make this up? — Garth

#37 Taiwan is not China on 04.06.11 at 11:11 pm

#2 Victor

Hey Victor, you sound like a girl. Grow up and learn.

#38 Chris L. on 04.06.11 at 11:24 pm

That Guelph place has been off and on the market for a while – at least it looks very familiar. There’s gotta be something wrong with it.

It’s an example. There are hundreds more. — Garth

#39 Mikey the Realtor on 04.06.11 at 11:25 pm

RE is going up as we speak, I have been saying this for a while. Garth has been back peddleing in the last while and some of the pups are starting to see it. Lets get the RE party started, asian and italians are scooping up property at lightinig speeds. Get in or be priced out for ever!!

#40 The Phantom on 04.06.11 at 11:29 pm

Garth:

I have some funds kicking around after selling and taking some profits in precious metals. Your reference to REITs has caught my attention. While a 5% return beats any GIC, the fact that commercial REITs jumped 20% last year AND paid a 5% return is impressive. Do you believe that those types of returns and capital appreciations will continue? Can these be held within an RRSP? Would you be prepared to either (a) recommend some types?

Although I know employment and other considerations compel people to reside in GTA or Vancouver, I recall last year visiting my old “fire team partner” at his home in Fredericton, NB. He had an impressive house in the north part of the city on a one acre treed lot and the house was modern, spacious and close to the downtown. While I asked him about the value of his home, he replied that it was worth about 1/4 million. I’m sure Fredericton has negatives like any other place (I’m a Prairie guy and have heard many of the jokes about our cities and towns) but why people who have a yearning need for a nice place wouldn’t sell in GTA or Vancouver and move to places more affordable is curious. Anyway those are my serpentine meanderings for this evening.

The Phantom

#41 Kaganovich on 04.06.11 at 11:31 pm

REITs derive their income from the cash flow of commercial or high-density residential rental properties. A housing correction will have no measurable impact. As for performance in the financial crisis, investors never missed getting a payment. Did you just make this up? — Garth

Wouldn’t a significant tightening of access to credit have an impact on the viability of commercial operations and the properties they lease? Credit won’t be so easy to come by in the future, right?

Then kiss the economy goodnight. There will be no ‘significant’ tightening. Just enough to terrify those with VRMs. — Garth

#42 sick_of_waiting_to_buy on 04.06.11 at 11:37 pm

quote: “that’s the problem with our economy at the moment. People seem to feel they HAVE to own property”

Not everybody. For a lot of people, it is matter of owning a shelter to raise their kids. How sad, RE has become just a casino.

#43 Billy on 04.06.11 at 11:38 pm

#37 Mikey the Realtor
“Garth has been back peddleing”

Nice spelling. Yor credibility is out the window if your spelling is grade 4 level.

#44 45north on 04.06.11 at 11:39 pm

The American: Toronto has 500%, FIVE HUNDRED PERCENT, of the inventory of New York.

yeah Toronto condo market is in trouble

by the way, my wife and I are going to NY City in May

#45 DJH on 04.06.11 at 11:41 pm

“It will happen when it happens.” — Garth

I admire and respect what you’re doing, and enjoy your blog, but this is a rather empty and unhelpful piece of forecasting – not up to your usual high standards.

July 9th. — Garth

#46 Nostradamus Le Mad Vlad on 04.06.11 at 11:43 pm

-
#3 Chaos — Whoa! CBC Newsworld has journalists? Could have sworn CBC was a major conspiracy theory by itself!

BTW, the world ended Dec. 31, 1999; we’ve all been teleported to a galaxy far, far away! “We’ve gone mainstream.” — And mainstream is not rational.

Consider: The Borg came to assimilate us, but when they realized the collection of precious metals earth held — nuts, spanners, tinkerballs and bolts of all kinds — they began to assimilate PMs instead, leaving us alone.

No conspiracy theories or links 2nite, as I’m getting older and more daft by the hour. You may curtsy!

Vlad gone to lunch!
*
#33 dd — “They have about 2.5 trillion in savings at the monent. They may not let it POP.”

One more CT to consider: Suppose Japan and China dump their US holdings simultaneously? That would poor gas on to the fire.

#47 DJH on 04.06.11 at 11:52 pm

“July 9th.” — Garth

Thanks. Why didn’t you say that in the first place? Love you.

#48 shanks on 04.07.11 at 12:02 am

AAHHH! Who pays for the heat?!

#49 Get Real on 04.07.11 at 12:06 am

July 9th. — Garth
————————————————————
Loved it! LOL

#50 confused and a little crazed on 04.07.11 at 12:17 am

Woww Garth,

what is this insataible need to buy…are you going to die without it?

Let’s call it Rentisicktis…u have palpitations..sweaty palms…,and you feel a little wood when you hear presale

you are drawn by that “Buy Now” sign and you linger because the young hot sales clerks…not one but 3.

they don’t want to miss a young buck. they fill the air with friendly chatter answer some basic questions like sq foot / price and direct the questions about variable rates/ maintence fees and contingency fund to some one else

people yoiu have to accept some accountability …you missed out…i missed out…so F**^$ what.

I ‘m not gonna die. turn off the TV/ forget the media and just go hug yiur child or wife

you cannot take it with you…some many people smarter/ more powerful have tried and all they leave is a very expensive grave.

everyone here can be financially successful…educate your self….don’t just blindly follw a blog. Garth just points out a few good ideas and poiints you out in the right direction. he is not your mom. I don’t he right all the time either

I just sold all my gold exposure today @ $54.50/ share…so i ‘m gold less. I made money…is it a mistake . i don’t know. will it go higher …maybe but i’m not blaming garth

if you don’t believe him then buy …. the condo / house may go higher…do what yiu feel is right for your family.

above all educate yourself because you are your best investment

peace out !! :)

#51 Victor on 04.07.11 at 12:21 am

#40 The Phantom on 04.06.11 at 11:29 pm

Garth:

I have some funds kicking around after selling and taking some profits in precious metals. Your reference to REITs has caught my attention. While a 5% return beats any GIC, the fact that commercial REITs jumped 20% last year AND paid a 5% return is impressive. Do you believe that those types of returns and capital appreciations will continue? Can these be held within an RRSP? Would you be prepared to either (a) recommend some types?

==================

I picked up a thousand Riocan preferred’s recently and it offers $328 back to me every 90 days. That’s a 5.25% yield. Makes for a solid fixed income option.

More details here:
http://investor.riocan.com/Investor-Relations/News/News-Details/2011/RioCan-REIT-Announces-Public-Offerings-of-100-Million-of-Cumulative-Rate-Reset-Preferred-Trust-Units-Series-A-and-175-Million/default.aspx

#52 The InvestorsFriend (Shawn Allen) on 04.07.11 at 12:21 am

Garth said:

I’m not your mom. The above post gives you options. Figure it out. — Garth

That is an important message. A blog is not your Mommy. Your financial advisor is not your Mommy. The Government is not your Mommy.

People, grow up and learn to take responsibility for yourself. Stop blaming the world whenever anything goes wrong.

Heck, if you are over 25 (or maybe 18) then even your Mommy is not your Mommy. She is your Mother. But you no longer have a right to expect her to clean up the messes you make in your diapers, shorts or elsewhere. And certainly you should not be expecting anyone else in this world to be your Mommy.

Now get out there and look after yourself.

#53 BC Bring Cash on 04.07.11 at 12:28 am

CNN reported today about the US housing slump. The theory was that due to the fact that Banks are demanding a 20% down payment and a extremely good credit score to qualify for a mortgage was putting a damper on housing demand. I guess going from giving anyone a mortgage to demanding ability to pay is going to hurt the housing industry down south for years to come.
Where are the private mortgage insurers like AIG, Freddie Mack, Fannie Mae? Did they just hit the exit doors? They had the perfect business model. (NOT) Could this fiasco of a business model also hit the CMHC sometime soon. I believe the Canadian industry is about mimic the US experience. 20% down payments are a real possibility. Then watch prices tank Mr H, F, & C.

#54 Devore on 04.07.11 at 12:30 am

From a page (by a realtor(tm)!) I posted yesterday:

http://www.randi-emmott.com/market.htm#avg%20price%2080-99

If you bought at the top of the TO market in 89, you were losing money on the price (in nominal terms) for 13 years. Inflation adjusted, over 15, probably close to 20.

That must have sucked.

#55 West Coast on 04.07.11 at 12:32 am

ping pong anyone? (its not a bubble, its not a bubble,
its not a bubble,
its not a bubble,
…)

http://www.businessinsider.com/china-to-open-ping-pong-paddle-hotel-with-a-main-stadium-shaped-like-a-football-2011-4

#56 confused and a little crazed on 04.07.11 at 12:35 am

13 # sick of waiting to buy

‘ blog hurting people’ i can’t belive your financial strategy is based on a blog by a stranger you don’t know?

do you answer those emails about ” If You give me a $10,000 dollars I send you half a million after I leave my war torn country?”

#57 Devore on 04.07.11 at 12:38 am

#29 mid-Ontario

Being unaware is one thing BUT I told her everything we talk about here. It must be my delivery or something. Maybe, I should practice a Garth zinger to get better attention when I talk about RE.

You need to accessorize. I suggest cowboy boots and a yellow tie.

#58 Adam on 04.07.11 at 12:42 am

Garth,

You don’t think there is a correlation between housing prices and the REIT’s trading value. Will a 25% drop in housing prices across the country not influence the REIT’s unit price?

Why would it? Sheesh, asked and answered numerous times. REITs don’t buy houses. — Garth

#59 (low density) Sam on 04.07.11 at 12:45 am

#2 “How long we have to wait for that moment?”
Garth, don’t dodge the question. Answer it straight if you have courage to face the reality that your wrong forecasts are hurting people following this blog.
_____________
Everyone who does this kind of forecasting will tell you it’s impossible to know when.

Even guys like Eric Jansen (called the housing crash within months and called the dot-bomb and told people to go short within one month of the top), and Shiller, who called the dot-bomb and the US housing crash within a couple of months still hedge their bets by saying the standard, you know it;

… the markets can stay insane longer …

#60 kilby on 04.07.11 at 12:47 am

#45 July 9th,
Thanks Garth……What everybody that reads and contributes to this blog has to remember is although it all makes sense, Garth can’t predict the day, politicians and bankers keep prolonging the inevitable. We all have different financial conditions and “house lust” I will probably buy another SFH in the spring of 2012 because I like working on and owning my own home and will not have a mortgage. I could rent for the rest of my life but that isn’t my nature…..But, I am confident that prices will be lower in 2012. Take from this blog what works for you personally, it’s great information. I agree that a house should be a home, not an investment.

#61 Ex-Cowtown on 04.07.11 at 1:00 am

Which begs the question, BPOE. If people with houses that are assessed at over a million dollars arent willing to sell because they dont want to have to spend even more to jump back into the market……Who else can afford it? Asian investors? for how much longer?

+++++++++++++++++++++++++++++++

Excellent observation. The acid test is whether you could afford to buy the house you are living in today. If not, that does not bode well for the market.

#62 Slow Learner on 04.07.11 at 1:08 am

Good point on multi-unit properties, they don’t blow up in value because generally they are sold between business people who won’t buy something with negative cash flow, unlike house and especially condo speculators.

If banks would give average Joes and Janes a half million dollars to speculate on something like, oh, monkey soap futures, people would bid up the price of monkey soap futures. Just happens the only thing banks will give that kind of a loan for to the average person is real estate, partly because they know where to find it if they need to take back posession, but mostly because the government guarantees the loan. Imminent destruction of capital – see Phoenix.

Speaking of, talked to a realtor in Phoenix tonight, cash flow numbers and ROI on SFHs there are looking real good. Returns in Canada, on the other hand, look like a train wreck. Wish we had the cash for an apartment building.

#63 Cato on 04.07.11 at 1:08 am

REITs for the most part are soundly managed, their lenders and shareholders force fiscal discipline. Same goes for private investors seeking a rate of return. These aren’t the investors that are about to bring down entire house of cards on the rest of us.

Its the speculators that will bring about the collapse. Glorified gamblers, but its not their fault. The blame lies at the feet of the enablers. The political elitists who feel their place in the world is lording over the rest of us. They are the ones that arrogantly removed the checks and balances from the banking system that had been in place for thousands of years. If speculators were denied financing we never would have had this bubble. Banks never would have financed this bubble if the free market was allowed to operate properly and do its job.

You can’t really blame speculators for their behaviour. What gov’t did was akin to putting an addict in a room full of cocaine and then telling them to get clean. Like it or not the free market always wins over socialism & elitism – at some point it flushes away the failure and cleans the slate. Get ready, we’re about to be hit by a tidal wave.

#64 Patz on 04.07.11 at 1:09 am

@ 12 The American
What he said!

You probably heard that Ai Weiwei was arrested in China today. But did you know that it’s apparently part of a larger crackdown on suspected dissidents in China? Seems the government is very worried about revolutionary contagion from the MENA (MidEastNorthAfrica). China has huge systemic problems which don’t portend well for stability. A little rock ‘n roll in the middle kingdom and who knows what might happen. Might even slow down those millionaires rushing over to grab a bite at the Richmond Mall food court.

#65 moloko on 04.07.11 at 1:11 am

Don’t worry about it, Garth isn’t even listening to himself, he just bought real estate this week.

———————————————–

“Had my hair cut yesterday.
I have been talking about Garth’s blog to my friendly hairdresser for 2 years now.

I obviously have been making no impression on her as she just went and bought herself a house with her daughter..(the out of town daughter’s portion is an investment).

She said that she could not afford to live in an apartment any longer.
She knows that taxes are up 5%+, water/sewer up 10% and hydro has doubled in the last year and that RE is at a peak but still bought. She knows that houses are sink holes but she says that she has no doubt she will get her $ back+ when she is ready to sell.

I fear that this will end nicely.

Garth, not one of my friends listens to me about what you are saying. Someone is wrong here and I fear that it is not you.”

Two weeks ago. And the post here shows why. — Garth

#66 arit on 04.07.11 at 1:14 am

Vancouver Bubble I

https://picasaweb.google.com/BeMeCollective/VancouverBubbleI

All original photograpks taken by yours truly with permission at Vancouver’s Museum.

********************************

Real Estate Men Reap a Harvest

Eight years ago, a woman bought a house and lot in Vancouver for $1780. A few weeks ago she sold it to a Vancouver investor for $17,700 cash.

———————————–

Real Estate purchases exceed all the heady expectations of eager investors in the boom years between xx08 and xx12.

Advertisements would have you believe that anyone can get ahead by investing in real estate at “exceptionally reasonable prices” with “easy terms”. There is a house for everyone, even those who could never have afforded property in the “old country”.

——————————————

Vancouver’s economic boom collapses in xx13, leaving many impoverished homeowners with high mortgages on worthless lots.

The price of land does not recover to its pre-but levels until the mid xx50s.

Regards

arit

#67 Sunshine Blower on 04.07.11 at 1:18 am

#2 Victor
Why do you have to wait to buy? Some wise man told me it’s always the right time to buy because “if you think there aren’t already bargains, you’re not looking.”

#68 smartalox on 04.07.11 at 1:22 am

Two gems for you, Garth, re property speculation:
Never be long two houses.
It’s called REAL Estate, not potential estate.

#69 lurker on 04.07.11 at 1:25 am

The fact of the matter is Garth’s predictions are way off, its July 10th!

#70 Tim on 04.07.11 at 1:29 am

Foreclosure in Port Moody- $139K
http://vancouver.en.craigslist.ca/pml/reb/2310150017.html

Is it finally starting to happen?

#71 arit on 04.07.11 at 1:35 am

Dear Garth,

As I am already sharing my personal pictures, dedicated to you for signing my copy of Money Road: Black Swans
(and feel free to use them).

https://picasaweb.google.com/BeMeCollective/BlackSwanEvents

Regards

arit

#72 nonplused on 04.07.11 at 1:47 am

REITs are definitely a good way to invest, and after some (ahem) experience, I would say they are even better than being a shareholder in a small commercial real estate company. Not that the small companies do that badly (I did well), but they are illiquid (much easier to buy than sell even if the price seems to be rising), and are prone to being hijacked by the largest shareholder group, for good or bad.

But I track these things quite thoroughly, and even though REITs look like a pretty good bargain right now, over the last 5 years they have been the all around laggards on the TSX. They experienced the real estate crash the retail market did not. Even banks did better. But oil, better still, and commodity producers kicked butt. Even gold was a far better choice.

However, given the current yield, they look attractive. It might be time to buy. The caveat? Check to make sure the profits aren’t being generated based on short term financing at unrealistically low interest rates. A lot of the smaller companies anyway chose to forgo mortgages in favour of short term credit in the 3% range and dividend out the savings. It’ll work for a while, but not forever. As with the current snafu short term variable rates on mortgages, the line of credit for REITs is just too good to pass up, but it is likewise unsustainable. Do your homework and make sure the tenure of the financing is sustainable.

#73 Jace on 04.07.11 at 1:52 am

Don’t wait for the CRASH bears. 30% reduction is not going to happen until 2016. Garth has been telling about sky falling for about 7-8 years. He will be right one day like the weather man. The real estate mafia is huge. Govt, agents, bank are co-conspirators and these folks will make every attempt to prop it up. Mean while the middle class and working population will never be able to realize affordable living.

#74 Blobby on 04.07.11 at 1:57 am

>July 9th. — Garth

Now can i have the exact time it’ll happen please? To the nearest minute?

I’m guessing it’ll be at 14:13.

#75 shanks on 04.07.11 at 2:01 am

By the way, doesn’t anyone else remember the days when NATO could only attack another country AFTER it was attacked?

#76 Rico Suave on 04.07.11 at 2:06 am

Re: #45

July 9th. — Garth
~~~~~~~~~~~~
You crack me up.

#77 Weevie on 04.07.11 at 2:07 am

One significant downside of renting a speculator’s highly leveraged property is that when the inevitable negative cash flow can’t be subsidized any more, there may be a repossession by the lender, power of sale/foreclosure, pending eviction and abrupt need to change one’s address, whether or not one has been paying the rent on time. I’ll stick to tenancy in professionally managed corporate owned regular apartments, so as to choose when I relocate.

http://www.youtube.com/watch?v=Z9ckDNgVHb0

#78 Rhino on 04.07.11 at 2:10 am

Wanted: Tenants who pay on time and don’t pee on the hardwood. http://toronto.kijiji.ca/c-housing-apartments-for-rent-1-bedroom-Brand-New-Condo-at-Sheppard-Leslie-W0QQAdIdZ272864289

#79 Weevie on 04.07.11 at 2:11 am

One of the occupational hazards of being an amateur landlord in the USA: lead poisoning by AK-47:

http://www.youtube.com/watch?v=cIh6nQ9HS3c&feature=related

#80 munch on 04.07.11 at 2:12 am

Billy

Don’t be too harsh on Mikey the Realtor

Everything is relative – for a realtor, he did well in that post

There but for the grace of God goes you, sir

#81 Thetruth on 04.07.11 at 2:36 am

Times change…

Forecasts change…

Peoples views change…nothing wrong with that.

Good luck with that RE purchase Garth.

I know you never respond positively to my posts but… Do you think it is better to buy a small commercial plaza in north central California or southwestern Ontario/St Catherines area?

#82 Laughing on 04.07.11 at 2:45 am

Your rejoinder to #45 was classic.

#83 Frank on 04.07.11 at 4:42 am

With all the great economic forecasts for Canada’s economy, I cannot see anyone believing that the RE market is going to collapse. What will be possible that in the unlikely event that interest go up very quickly, then yes there might be a small correction. As long as immigration is kept up, homes will sell. I like Garth’s investment strategies, over the long haul you will make a lot of money. Very few people have predicted major changes in any given market or worl events.

We don’t need a ‘collapse’ to have consequences. Why does everyone talk in extremes? — Garth

#84 Tim on 04.07.11 at 6:49 am

Even if houses were affordable, why bother owning at all? You stop paying property taxes, the government takes your property, therefore no one really owns anyway its one big illusion. In other news the silver in my safe is protecting my purchasing power now more than ever.

#85 T.O. Bubble Boy on 04.07.11 at 6:58 am

shhhhhh – rental property investing is a “secret”:

http://business.financialpost.com/2011/04/06/a-secret-tax-shelter/

#86 bigrider on 04.07.11 at 7:24 am

Thank you for pandering to all of us RE deal challenged potential investors.

I asked for your help and you provided .Appreciate it Garth.

You are a stand up guy.

#87 dd on 04.07.11 at 7:32 am

#55 West Coast

ping pong anyone? (its not a bubble, its not a bubble,
its not a bubble,
its not a bubble,
………………………………………………………………..…)
funny what a billion people watching ping pong will do.

#88 Live Under Your Means on 04.07.11 at 7:44 am

Another zinger by Bruce MacKinnon.

http://thechronicleherald.ca/brucemackinnon/mackinnon-cartoon-2011-04-07

#89 tangocash on 04.07.11 at 7:50 am

I love how people come on here and whine and moan about ” when is the crash is coming….what day is it….” This blog is merely a collection of information with an opinion attached to it. Yes the info is scewed sometimes towards the bias of the author but it is valid none the less. Garth can no more give the date of a market reversal than an analyst or broker can call the top or bottom of the stock market. Market extremes are impossible to call, so for the love of god, take the info provided and MAKE YOUR OWN MOVE. Who the hell leaves the final call on where they live and the date they will buy and sell a home to a blogger? Seriously …..

#90 Moneta on 04.07.11 at 8:01 am

Adam on 04.07.11 at 12:42 am
Garth,

You don’t think there is a correlation between housing prices and the REIT’s trading value. Will a 25% drop in housing prices across the country not influence the REIT’s unit price?

Why would it? Sheesh, asked and answered numerous times. REITs don’t buy houses. — Garth
——–
Well Boardwalk did go from 50$ to 20$ during the crash.

Like everything else in that once-in-a-generation event. So what? — Garth

#91 Sid on 04.07.11 at 8:13 am

rental properties are wonderful money earners. Yes there is some stress and hassle involved, but if you do a good job of selecting tenants and keep your buildings well maintained and clean, you can make some nice returns.

I never thought to look in Windsor.

#92 Been there on 04.07.11 at 8:18 am

No-one, not Garth, Buffet, Rubin, Harper, Flaherty, Bernanke, can predict what will happen.

IMHO Garth offers the very important critical view of real estate ownership, and hopes to make money off it to sell his books, to counter the positive views of real estate sale people, who make money off the buys and sells.

Garth should not be expected to predict the timing of what cannot be predicted. His value lies in having the guts to counter the real estate industry.

#93 maxx on 04.07.11 at 8:22 am

#39 Mikey the Realtor……re: “Let’s get the RE party started”….you’re actually stating that it needs starting? Beware the RE media police!
Since last fall, we have been contacted (email and ‘phone) by realtors……out of the blue and on a regular basis. Any calls we put in to them have been returned within minutes with showings on a moments notice, whereas back in 2000, we had realtors not bother to return calls and one didn’t even show up for an appointment.
We recently made an offer 40K below asking on a property (Ottawa area) and it was accepted, but conditions allowed us to back out and we did as we are certain this baby will sell for way, way less. We are completely comfortable waiting. The tide has turned and along with melting prices, we get to enjoy the show!!

#94 S.B. on 04.07.11 at 8:39 am

Don’t forget about Morguard REIT: MRT.UN

http://www.morguardreit.com/portal.cfm

“The company owns a diversified real estate portfolio of retail, office and industrial properties containing more than 10 million square feet.”

#95 Purrfect on 04.07.11 at 8:41 am

To #51 Victor
I looked into the Riocan preferred shares as well. My understanding is the distribution is NOT considered a dividend payment and will be taxed like interest. Not a problem if the shares are in an RRSP or TFSA. I have done quite well with Riocan paying about 6% as a dividend and decent appreciation

#96 S.B. on 04.07.11 at 8:52 am

“The RCMP is taking responsibility for ousting people from recent Conservative campaign events in southwestern Ontario, acknowledging it broke the rules in doing so and saying it has reminded Mounties to stick to their jobs.

Stephen Harper’s campaign has come under criticism this week because a number of people were ejected from his rallies in London and Guelph.”

That is their job, protecting El Presidente’s rein from dissent. We are no different than any other hardline country in the world. The police and army are loyal to El Presidente. They do not work for us. El Presidente sent them overseas, not to protect our country but to fight in the grand wars of conquest and aggression. Every little boy’s fantasy: playing with toy soliders but in real life.

I am the War President! Stevie like Boosh Jr is an addict, if only for the power. They only put addicts into the job, easier to control people like this. Get ‘em hooked early. Stevie was invited to the Bilderberger conference back in 2003 while he was still a no-name fringe party leader. He must have felt like a big man rubbing shoulders with the elite. Intoxitcating. A small town boy thrust in the life of global private jets and 6-star hotels.

Especially in hard economic times, they will not bite the hand that feed them. A captive and loyal army. Cracking skulls is good work if you can get it. G20 anyone?

#97 Buyright on 04.07.11 at 8:58 am

July 9th , wrong

July 1st is more accurate

The only unknown is the time of day

Let the fire works begin

#98 Utopia on 04.07.11 at 9:08 am

#23 Jsan

As some people understand and more will soon understand, the last couple of decades of pure debt driven growth is all but winding down.
——————————————————-

Good post Jsan and thanks for that link to the John Mauldin interview. I happen to think he is a brilliant thinker and he is saying what few want to hear.

His new book is well worth reading too. It is called “Endgame” where he discusses the tough decisions that will have to be made in order to avert all out crisis in both the US and most of the Western world. The end of debt must coincide with the advent of productive enterprise and a reduction in government expenditure.

It means that savings and the ability to deploy private resources in a period of scarce credit will separate those who get ahead from those who fall behind. Cash counts. Debt meanwhile will kill you and that too is a common theme on this site and the one major concern for all of us that our friend Garth has tirelessly tried to pound into a few thick skulls.

Austerity on steroids may well be in the cards for government and those of us living here in Canada will feel the sting of US policy changes. We can also anticipate many reductions in government services, pension payouts, health benefits and social spending over the coming years.

Lets all get used to it now because times will not be as easy in the future as they were in the past. The overflowing cup of free money and easy credit are already starting to fade with the advent of rising interest rates and reality dawning on a nation of debtors.

#99 Dmitry on 04.07.11 at 9:10 am

Garth,

I am very thwarted with your use of Macquarie Equities Research “Apartment REITs vs Condo” paper. One does not have to be an equity analyst to come up with research showing that investment in selected equities two years ago would have been a better choice than buying a condo.

A cursory glance at Globeinvestor findlist demonstrates that investment in pretty much any precious metals mutual fund would have yielded a return close to 12% for the past three years. If you put your money in PH&N High Yield Bond fund you would have had gotten close to 10% return no questions asked for the same period too. However, why go for peanuts if S&P/TSX Capped Metals and Mining Index appreciated more than 20% for the past three years and almost 30% for the past 10 years???

My point is that it is always possible to look back and select equity or an asset class that performed well. It is even easier to compile spreadsheets with lots of historic numbers. However, mere illustrations of past performance (and Macquarie paper is nothing more than such an illustration) have little predictive value, if any.

One should look at current figures to compare investment potential of Canadian REITs to condos. For example, gross rental yields of apartment REITs, while low, are not nearly as low as those of condos. Unit expenses in condos are obviously higher than in apartment buildings because of marble foyers, uniformed security and other frills. Typical net operating income (that is, income before mortgage interest) of condos is in 1% to 3% range and often negative. Accordingly, your advice “Move into a speck condo and let the idiot investor subsidize you” is on the money.

Enjoy your blog :-)
Dmitry

The report used numbers to the end of 2010 – that was 3 months ago, not two years. The comparison was between two methods of real estate investment, so contrasting it to gold or bonds is a non sequitur. — Garth

#100 Alnaexan on 04.07.11 at 9:11 am

Don Campbell on global calgary says it’s gonna be hot market in 24 months, better plan for it ;)

#101 Utopia on 04.07.11 at 9:20 am

#93 maxx

“Any calls we put in to them have been returned within minutes with showings on a moments notice, whereas back in 2000, we had realtors not bother to return calls and one didn’t even show up for an appointment”
———————————————————

Funny you mention that. I was trying to pick up a place in the Okanagan not so long ago. You almost got the feeling you needed some kind of security clearance to see them in person or to make an offer on a property.

Bloody arrogant realtors. They thought they had the world by the tail then and you were not a client or a customer…you were an inconvenient appointment that may or may not be sceduled in depending on the daily attitude.

My how times have changed. Good to see the buggers are getting a little hungry again. Most of them can starve as far as I am concerned though.

I have no respect for that trade.

#102 Paul on 04.07.11 at 9:34 am

Changes to the TFSA today will probably boost the contributions. Still I’ll never vote for that SOB.

#103 Mackie on 04.07.11 at 9:34 am

I was invested in Boardwalk REIT for a short period of time earlier this year, but I began to get uncomfortable with it when I realized that the REIT was having trouble finding renters to keep the apartments rented at full capacity. Why the problem? Too many people renting out their investment condos and SFH in desperation and at desperation prices. Be careful with REITS in this weird market. I prefer oil, and materials.

#104 Joe Larue on 04.07.11 at 9:37 am

Toronto condo sale update….

The investment condo was listed on Monday and there were 6 showings scheduled for Wednesday (yesterday). We got 3 offers, all over asking.

So it’s official….the market is still crazy.

#105 David B on 04.07.11 at 9:46 am

Never happen here in Canada …. housing is booming!

BY TERENCE ROTH AND NINA KOEPPEN
FRANKFURT—The European Central Bank on Thursday raised its benchmark interest rate to 1.25% from a historic low of 1%, making it the first of the developed world’s major central banks to begin raising rates as the economy recovers from recession.

The move, which marks the ECB’s first rate rise since July 2008, comes despite the deepening debt crisis in the euro zone’s periphery, after Portugal became the third nation in the 17-country bloc …

#106 stealth on 04.07.11 at 9:48 am

Garth, what do you make of this:
http://money.ca.msn.com/investing/news/breaking-news/article.aspx?cp-documentid=28283117

“Compared with a year earlier, total building permits rose 6.5 percent, with residential permits down 15.6 percent and non-residential permits up 47.3 percent.”

Looks like we are traveling left on the supply curve.

#107 smart renter on 04.07.11 at 9:52 am

My good friend has over 20 condo for sale in her building and only 2 sold in the past three months. She has the second lowest price for a two bed and two bath unit compared to the others. It’s been on the market for six weeks. Condo sales in Toronto are still doing bad and it will only get worse it seems.

#108 grantmi on 04.07.11 at 9:53 am

Oink! Oink!!

http://bit.ly/hljXfj

#109 a prairie dawg on 04.07.11 at 9:56 am

Ya know, #2, #13, and #24, all sound like they came from the same CREA meeting.

And then Mikey the Realwhore® chimes in to be the voice of reason? What a lucky break. Right….

I smell a rat. A whole bunch of rats actually, and we’re being infested. It’s those nasty CREA rats that feed off commission. (raticus realestaticus)

And this blog is the exterminator…

#110 RobM on 04.07.11 at 10:03 am

Since this article is about how to invest I have a very basic question.

Do I need to have an account at a Discount Brokerage, or is just selecting the right mutual fund on online banking enough? I just never see where to buy things like ETF’s and REIT’s.

#111 WINNIPEGER on 04.07.11 at 10:10 am

The housing market will tank when people finally realize that it should.

Garth is voicing his opinions by interpreting the indicators. At the end of the day the market will slide based on what buyers , sellers ,govt and the banks do.

#112 Herb on 04.07.11 at 10:10 am

Industrial Guy,

your #175 on yesterday’s “The News” thread raised the spectre of reality in our happy realm of speculation. Well said.

#113 Herb on 04.07.11 at 10:15 am

#75 shanks,

those days must have been about the time when NATO restricted its planning and operations to the NATO area.

#114 The American on 04.07.11 at 10:17 am

AT #73: Jace, Garth may have been telling people for a few years that there is something severely wrong with the fundamentals of a healthy Canadian real estate market and that prices should fall. Take into consideration the FACT that he, nor anyone else for this matter, has the ability to predict government invtervention to prop up and support the crashing market. This action would include items such as “emergency rates” that are STILL the “new norm” for Canadian buyers. Or, amortizations for a period that were up to 40 years. Or, 0% down with only stated income (meaning you don’t have to prove it). You see, even prior to these types of action/programs existing the fundamentals were there to support a market meltdown for Canadian real estate, and it began to happen before artificial mechanisms were put into place to stop it.

I’d like to point out that Garth is/was indeed correct as is evidenced back in the 2008 stock market crash, when the Canadian real estate market began losing value faster than the ugly bridesmaid loses her dress at a drunken wedding party. Of course, however, the government quickly found a way to rob Canadians of their future, including “emergency rate.” This is all that has kept the market on life support, and the government knows it. Hence, why these rates are still the “norm.” Guess what? The stock market crash is over and ended a while ago. So, you should ask yourself why these rates still exist.

The government honestly have NO IDEA what to do now without absolutely ruining the insanity of the market there. Any action they KNOW they should take would only cause for a crash/melt, which isn’t very good for votes, you know? Make no mistake, though, what goes up MUST and WILL ALWAYS come down to the mean. Canada has driven prices higher and higher, exceeding most all countries in the G20 back at their peaks. This will surely test the tensile strength of the already fragile market, much like a rubber band being stretched to its maximum before it has no other option but to snap back. What I am saying as the more it continues to go up, the harder , more painful, and longer the correction will take for Canada.

#115 JohnnyBGood on 04.07.11 at 10:30 am

Call me old fashioned, but I never liked the idea of investing in condos. (If you want to make a condo your home, that’s a lifestyle choice, or a an issue of affordability, but it has nothing to do with investing.)

In my opinion a real estate investment should be directly tied to its own piece of land that you as the owner get to actually hold “in fee simple” as the Queen allows.

It’s from the the land that a property ultimately derives its fundamental and long term value. A condo is just a concrete box in the sky that has no real land to call its own.

Sure, in the end it comes down to supply and demand. As long as people want condos, they will have a market value. But at the end of the day, we will always need land to live and work on. You don’t need a concrete box in the sky. You can’t make more land (well you can but it’s usually uneconomical). However, you can always eaasily build more condos.

#116 JoshL on 04.07.11 at 10:39 am

13 # sick of waiting to buy

Read “The Black Swan” by Nassim Nicholas Taleb. He explains why it’s impossible for anyone to predict WHEN an event will occur that will crash a market and even impossible to predict which event will crash it. The important thing is to recognize when something is unsustainable and just avoid it.

Or more importantly, as Garth has pointed out several times, don’t put all your eggs in one basket. If you can afford real estate as a reasonable portion of your net worth (Garth’s 90% – your age rule of thumb), then go ahead and buy something. If not … don’t sweat it, just rent and invest your money. If you’re planning on living in a cheap area, then buying could certainly be an option. If you want to live in a big city near the centre, rent’s the better way to go.

#117 refinow on 04.07.11 at 10:39 am

That picture could be my son…. No fear. The only difference would be he would have built a ramp at the end of the dock.

#118 Daisy Mae on 04.07.11 at 10:48 am

“Get Real on 04.07.11 at 12:06 am
July 9th. — Garth”
————————————————————
“Loved it! LOL”

Yes, it is priceless! LOL

#119 dm in c on 04.07.11 at 11:04 am

“It ain’t just condos sitting empty, there’s thousands and thousands of houses in Alberta sitting empty also. There they sit lonely and sad, month after month after month.”

Indeed — squidley tends to exaggerate, but I have 4 empty houses within a 2 min walk — two of which have been empty for 4+ months, one is a foreclosure, and two for sale on and off for a year.

And this is in the ‘desirable’ community of Tuscany in Calgary.

#120 Timing is Everything on 04.07.11 at 11:06 am

July 9th. — Garth

What year? ;)

———————————————-

‘How to invest’….Ha!

Garth, ya coulda just referenced this site…

http://tinyurl.com/3qlem84

#121 Fuzzy on 04.07.11 at 11:13 am

I think the reason why REIT prices crashed in 2008 is the same why so many typically uncorrelated things crashed in that event: too many investors with too much borrowed money.

Thanks to low interest rates, hedge funds/investment banks bought a lot of assets (including REITs) with a lot of borrowed cash. When trouble hit in 2008, they had to liquidate a lot in order to cover their highly-leveraged backsides, nothing was spared including REITs.

Now I fear the same will repeat in the next down-cycle, with interest rates remaining far too low. The only way to stop this cycle is for rates to go to levels too risky for speculators to flood the market with hot money. Otherwise, that “once in a generation” event will become quite chronic.

Asides this risk (which really applies to anything), REITs make a lot of sense in an era of deflation we are currently experiencing. Thanks for the post, the REIT comparison is real good to know.

#122 JOHN on 04.07.11 at 11:14 am

Research shows that analyst are wrong 2/3 time. What makes them successful is their ability to cut losses and run rather than let mistakes snowball. Garth does not have a magic ball but he does give you insight that market direction could and should change soon. If you could have taken money out of the stock market before the last crash you would have left a lot on the table but could have doubled your money again when the market turned around.

Here are some tips given to me by a bank employee
*valuations are beginning to drop
*everyone thinks their home is worth more than it is
*takes longer to sell these days
*wish I could afford to live in the GTA

#123 Mr. R. on 04.07.11 at 11:25 am

The American

Very true. The whole problem here is that these idiots argue that the markets are still going up. The whole problem with a bubble is that it accelerates before it pops! Leveraging debt is the worst thing you can do.

Mr. R.

#124 Ferris Bueller on 04.07.11 at 11:32 am

Bueller, Bueller ….. why do some on the blog ask G-Man when will the market finally collaspe – what a retart question – Garth is just providing proof that the watershed just can’t hold anymore – and logic states what will eventually transpire – at exactly 4:23pm on May 2 the market will offically fall apart – (shaking head at such stupidity)

If G-Man had the devine vision of the exact date – he’d be scoring billion dollar deals to capitalize on it – he wouldn’t be writing on this lonely blog – I wonder how some here even dress themselves…

PS – VLAD – awesome job in providing some wicket side notes each day – after reading Garth’s fine points – I head to your post – keep up the Awesome work –

[this post was written on my commodore 64 computer..lol - thats my 80's joke for today]

#125 realist on 04.07.11 at 11:41 am

From StatsCan today:

“The value of building permits in the non-residential sector totalled $2.8 billion in February, up 72.9 per cent from January. Aside from the strong support from Alberta and Ontario, five other provinces also posted gains in the non-residential sector.

But, the value of residential permits fell 18.3 per cent to $3.0 billion for the same month, amid a decrease in both multi-family and single-family dwellings. Ontario and Quebec registered the largest declines.”

This is a very good sign for the economy. The industrial / commercial sector looks to be picking up, which bodes well for job creation, while the residential sector is cooling as builders restrict supply going forward to maintain price stability.

#126 Sean on 04.07.11 at 11:46 am

Can someone please help me understand one thing. In terms of the REIT. If the housing/condo market tanks like this blog talks about. What happens to the REIT??? Do they tank along side, or does the value stay up. What exactly is the value of the REIT tied too???

Please help answer this for me, thanks!

One more time… REITS buy income-producing property and the income flows to investors. Houses do not produce income and REITs don’t buy them. They invest in commercial assets (office buildings, malls etc.) or apartment blocks in urban areas. There is no correlation between a correction in the price of a bungalow and the rent a REIT collects from a housing complex or a shopping mall. — Garth

#127 45north on 04.07.11 at 11:58 am

The American: The government honestly has NO IDEA what to do now without absolutely ruining the insanity of the market there.

It doesn’t but the banks do. They have battened down the hatches are going to ride out the storm.

#128 bill on 04.07.11 at 12:02 pm

hey july 9th is nunavut day….

http://daysuntil.com/Nunavut-Day/index.html

anyone going?

#129 Joe on 04.07.11 at 12:02 pm

When you can’t pay your mortgage anymore, these are the levels you may stoop to:

http://www.dailymail.co.uk/news/article-1374489/Adzookie-pay-mortgage-allow-logo-painted-house.html

#130 Tony on 04.07.11 at 12:17 pm

Hi Garth
Why do you say

“One of my working rules has always been, never, ever buy a single residential housing unit to rent out. ”

I am thinking of buying in florida condo…thats why I am thinking should I go for single condo or a multiple unit to rent out.

The HOAs in florida (west palm beach) condos are like 350 a month plus annual property tax of 1000USD or so.

Usually a bad idea. The vacancy rate in FL is 17.6%. — Garth

#131 bystander on 04.07.11 at 12:19 pm

“Between 1908 and 1912, speculators bought land with heedless frenzy.* Property was bought and flipped for a profit so quickly, sometimes within hours or days of the original purchase, that people didn’t even bother to get title. After a few years of this, tracing ownership became a laborius and confusing task. Land from choice downtown sites to bits of bog no one had ever seen were traded on margin, like stocks. Speculators even took options on property and then sold the options overnight. Everyone from tram conductors to school teachers was a real estate investor.
_________
* Today people talk about the 1979-81 real estate boom as if it were the most significant in the country’s history. But there were at least three earlier ones, in 1898, 1911, and 1929, that rivalled or surpassed the speculative excess of 1979-81 and the subsequent and spectacular crash.”

————————-
“FLEECING THE LAMB”
by David Cruise & Alison Griffiths
The inside story of the Vancouver Stock Exchange

The book published in 1987
ISBN: 0-88894-558-2

***************************
***************************
* *
* STUDY THE HISTORY *
* *
***************************
***************************

#132 BM on 04.07.11 at 12:31 pm

Garth, thankyou for your post Investing today. Just a few days ago I was looking at REITS and Viola today you talk about them. My question here is
1. Post #51 mentioned owning REITS as a Fixed income . Is it true or should REITS form the 60% as per your 60/40 rule
2. What about ETF REITS Like BMO ZRE that pays dividends , would not those be a safer bet than owning an individual REIT like Northern properties.
Please keep writing more on investments.
Thanks

#133 SaggyBottomBoomer on 04.07.11 at 12:40 pm

Here’s one I know you’ll appreciate Garth.
http://www.bbc.co.uk/news/uk-scotland-edinburgh-east-fife-12989019

#134 Eyeopener on 04.07.11 at 12:43 pm

For all those who keep asking Garth when EXACTLY the crash will happen: Who are you taking him for, some kind of fortune teller?
Don’t be idiots, just read what he says literally: the threat is real and imminent, and the crash will happen in the foreseeable future. And, keep in mind, this opinion is not guessing, it is a logical conclusion based on the facts existing at the time of writing.

#135 T.O. Bubble Boy on 04.07.11 at 12:45 pm

# 8 LJ

If you allocate for a property manager you never get tenant calls in the middle night. Actually you never get tenant calls.

#12 The American

If you were Canadian, you would know that the argument of “x tens of thousands of units are coming online this year” has been made year after year.

#65 moloko

Your hairdresser didn’t listen to you because you pointed her to a blog that has been wrong for over 2 years now. Why would they listen to you?

#136 Joel on 04.07.11 at 1:03 pm

Garth,

Who knew that you and the Steven were back on talking terms. Late night discussions from the bunker?
Pity it will not happen until the budget is balanced, in 2014,maybe, kinda, sorta if you believe that the balanced will ever be balanced

http://ca.news.yahoo.com/tories-double-tax-free-savings-accounts-10-000-20110407-081529-597.html

#137 poco on 04.07.11 at 1:09 pm

%70 Tim–that foreclosure you posted is actually in Pt Coq.–has been on the market since Feb–still no takers
you asked “is it finally starting to happen?

as i’ve said many times before, it’s been happening since last spring here in the tri-cities– price drops galore– tons of places listed for less than the owners paid 2 and 3 years ago–here’s a few of the listings i received this week
#108-285 Newport–bought Mar 08 –289k (that’s 3 years ago) listed dec10 for 319–dropped to 299k now listed at 285k
#204-2228 welcher–bought sept 09 –317.9k now listed at 281.4k
#209-1438 Parkway Blvd–bought nov 06–294k(5 years ago)–listed for over 2 years at 329.9k and just sold for 285k
#2002-2959 Glen Dr–bought sept 09–699.9–just listed 679k
open up your eyes people, do some research–look up these addresses on the realtor map –see how many properties are for sale in the same complex–write down some of the mls#s and contact the listing agent or any realtor -get the real scoop on the properties-original price– price changes –don’t rely on these goofy numbers you hear on MSM or read in the local rags–by the time you figure it out the market will have tanked and started back up again

#138 bill on 04.07.11 at 1:13 pm

bystander
thanks for the information.
I have been meaning to buy that book and ”snakes in suits ” for some time.
i used to work in the old vse on howe and I can very safely say it was at least as bad as the book say it was.
it was an education for sure.
the tsx-v is not the place to be unless you really understand whats going on. it is a very unlevel playing field.
unless a exploration jr has a major company ie hecla ,gold corp ,or someone really big and successful with a track record of repeatably bringing moose pasture to a mine , closely tied to it,like they have a percentage and directors from the big company on the board,the big company’s geologist ect ect i would not touch it.
even with all that they can blow up in your face with great ease
seen many a lamb sheared ok?
it is just as garth says it is not investing it is a gamble
[cue dirty harry 'do you feel lucky?']

#139 Cowboy on 04.07.11 at 1:20 pm

I have been waiting over 5 years to take advantage of house price declines in Calgary. Just when I thought I was going to see it, people are STILL snapping up houses!
(really expensive ones too with tiny yards)
This makes me sick but unfortunately will have to wait a few more years perhaps…
What are ya gonna do?

#140 torontorocks on 04.07.11 at 1:25 pm

#110 RobM – here’s what you need to do. Using Scotia as an example, go to your bank, ask to open a self directed RRSP and or self directed cash account.

you can open a TFSA inside there as well. the ‘regular’ TFSA account is for crap like GIC;s. this TFSA allows you to put stocks, bonds, mutual funds, whatever inside it.

then when you’re online and trading, in the buy/sell options (and you may need a tutorial, which I think they provide), say you want to buy Claymore 1-5 year laddered corporate bond ETF – (http://www.claymoreinvestments.ca/en/etf/fund/cbo)…you would, in your direct investing, BUY CBO and the amount of units. then you’re done.

#141 Live Under Your Means on 04.07.11 at 1:34 pm

#102 Paul on 04.07.11 at 9:34 am
Changes to the TFSA today will probably boost the contributions. Still I’ll never vote for that SOB.

Could you please provide a link.

#142 Live Under Your Means on 04.07.11 at 1:38 pm

Just found the link re #102 Paul’ comment.

http://www.theglobeandmail.com/news/politics/harper-pledges-to-double-tax-free-savings-limits-but-not-till-deficit-is-beat/article1974378/

#143 MDG in Burlington on 04.07.11 at 1:47 pm

#2 & 13

It is impossible for an actual drop dead date to be given regarding this inevitable housing retraction. I understand that there are other variables in play and that Garth does not have a crystal ball. However, things are not different here and it will happen in time. Think for a moment use your common sense….
- Garth cannot predict the action or in action of the government
- continued high dollar value; will impact our exports
- continued increase in fuel cost
- continued economic problems in the US
- change in mortgage rules

May I also remind you that three things will happen; Garth mentioned this before and if take everything into consideration it’s starting….. don’t be fooled by the biased media outlet that you follow and wise up and be patient.

1. Sales Fall
2. Listing Rise
3. Prices Erode

We are at step one……

Trust me I have been following the blog since it’s inception; I waivered and did my own research…..

I will listen to Garth and eventually it will pay off….. for now I am eliminating my debt and saving for that day!

Patience is a virtue to me; but maybe not for you.

#144 Saw this in US and now's its in Canada on 04.07.11 at 1:53 pm

Garth, just bought a beautiful place in southern Florida; on a canal, 10 minutes by boat to the Gulf of Mexico and deep sea fishing. Location, location, location! Last time this place sold it was $600,000, I paid $179,000, thanks for your tips concerning being a vulture. Paid cash for the place.

The question I have is it possible to get an investment HELOC loan using that on that house in Florida as collateral? I would love to write the interest off on my vacation home and use that money to invest in the stock market.

Also after spending considerable time in Florida before buying; I got to know the area quite well. If you know of any investors which would be interested in creating a real estate partnership for the Cape Coral area of Florida, please give them my email address.

#145 Ferris Bueller on 04.07.11 at 2:02 pm

Regarding the American on New York vs. TO … I don’t know your background – but do you know anything about Toronto to start with – besides comparing stats. Have you actually stepped foot in the downtown core -because if you did – you would be embar”assed” and your comment..

I agree – the builders have shot forward and there will be a price to pay – but lets settle some facts first, New York (city core) has been planned that many work, play and live within walking distance – not so with Toronto. The Condo craze is answering what many young professionals are yearning – to ditch the car, walk to work and to enjoy the night life all within walking distance of your home. Toronto (Downtown core) is finally creating that lifestyle – What was once a cluster of office buildings where Canada’s top businesses set up shop and people commuted each day – thousands upon thousands taking the GO Train or subway from the burbs -

Well American, though the numbers appear to be startling – in fact, Toronto’s downtown core is transforming – from a 9-5 hustle and bustle – and believe me, after 6pm many years ago – it was a errie ghost town – now – its all changing – those just starting their careers are ditching the long commute and are working, living and partying all within walking distance.

So, take a walk in our fair city – don’t play it so coy because you have a stack of stats to fart about – take your hate and spew it elsewhere – TO may be running ahead of itself – but she always seems to pull off the unthinkable…. CANADA – CANADA !!

Plus – I have been to NY – dirty, conjested, over run and thinks WAY to highly of itself – Donald Trump’s on each city corner – NICE, LOLLLLLLLL

#146 Timing is Everything on 04.07.11 at 2:04 pm

Why buying a REIT is more profitable than a condo…

http://tinyurl.com/3syz637

#147 Feedthegreed on 04.07.11 at 2:13 pm

When prices start to unravel so do the people who helped inflate them with the ultimate motivation,” GREED”. Being an old guy who built a few houses and renovated a lot more, have watched speculators, financiers, mortgage brokers, realtors and even a couple of lawyers crash and do time for flipping and fudging.
When the value of the property you bought to “make a bundle” by flipping as the market goes up, eventually drops below the mortgaged value after a series of inside flips, the rats start coming out of the cracks.
Calgary, late 70’s, several flippers went to jail for 1 month to 2 year terms. As the web unwound, people started filing complaints with the RCMP fraud squad. Several realtors, lost licenses, mortgage qualifiers lost their jobs (usually tied to industry), mortgage brokers were sued, and even a couple of lawyers were disbarred. All because property stopped rising in value and the pawns who had signed their names to the single homes, apartments, and warehouses couldn’t or in some cases wouldn’t make the payments, everyone turned on each other.
There are a couple of similar cases before the courts now in Alberta with a similar ring and hundreds (if not a few thousands) before the US courts with property deals built on flipping and industry created property inflation. As long as the prices rise, all is OK because everyone can “feed the greed” and gets their piece. Now that prices are starting to recede in some Canadian markets and more to come, watch for the “rats” turning on each other, coming soon in an area near you.

#148 poco on 04.07.11 at 2:18 pm

further to my previous post, if you know the tri-cities you’ll notice those listings are in various areas –Pt Coq.-Cq. -Pt Moody–no area is immune to price drops
the condo market started first –price drops in townhouses started later and are now picking up -owners realizing that buyers here are dwindling-lots of price drops in the SFHs`though a majority of these have not been on the market for years so have built up equity and can take the price drop–it`s not unusual to see owners drop their price 40k to 50k after just a few weeks because of the lack of interest
don`t get me wrong, properties are still selling–people are buying as they do in any market –all this bullcrap hype has many scared–buy now or be priced out forever–i think some of the posters in the last few days are having doubts of where this market is heading—for me i know it`s going down
one last tip for all you naysayers
DO YOUR F_ _KING HOMEWORK !!!!
– no research–no sympathy when you lose your shirt for not finding out the real numbers

#149 super dave on 04.07.11 at 2:20 pm

They invest in commercial assets (office buildings, malls etc.) or apartment blocks in urban areas. There is no correlation between a correction in the price of a bungalow and the rent a REIT collects from a housing complex or a shopping mall. — Garth

check our Morguard REIT
http://www.morguardreit.com/reit.cfm

they buy BC Gov office buildings, and are building the Uptown Mega Mall in Victoria. Campell sold our building and one in Vancouver. Office space in Victoria is and will be at an absolute premium, Uptown filled of before the plaster was dry. I work in BC gov and have lots of inside info on the tenants etc. Mega Walmart that is capturing market share.

I am thinking not a bad investement, but i haven’t looked at it in detail, and do not own it.

Garth how does this REIT stack up ?

#150 Chaos on 04.07.11 at 2:20 pm

dd

Key note the key phrase “end of the world”.

This should lead you to the automatic conclusion that a “tinfoil warning” has just been issued.

Dalmations shouldn’t try to play with wolf/siberian husky crosses.

If you did a little “research” you would know not to play with the crazy dawgs.

Gold schmold. WGAS.

#151 BrianT on 04.07.11 at 2:29 pm

Good Keiser today-covers the paramount importance of drug cash in providing liquidity for the global financial system http://www.youtube.com/watch?v=IDdODlFVIfw

#152 GAZZA on 04.07.11 at 2:29 pm

It is amazing how few people know what a REIT is. People really need to get educated.

#153 Grrr on 04.07.11 at 2:40 pm

Garth, regarding the REITs, you really should have a close look at their balance sheets. The debt levels on many of those suckers are high. They take on debt to pay a distribution; not a good long term strategy. And capital appreciation based on investors chasing yield can go south pretty fast when interest rates have only one way to go.

You’re investing in it, not marrying it. — Garth

#154 City Slicker on 04.07.11 at 2:44 pm

Looks like another earth quake in Japan. And Mexico too. Makes you wonder if we really are living in the end times.
Comments?

#155 Whistle punk on 04.07.11 at 2:50 pm

Myself I don’t see an all of a sudden drop in the realestate crash or BCs economy. Things will start dropping off like flies people will say where did that company go or what happen to them.

In the rural parts of BC you have resource-construction and service jobs as the main employers. It is where the real Blue Collar workers live not the Vancouver Metrosexual mecca.

The market is fueled by realestate of baby boomers buying retirement houses out of Crapcouver. The boomers buying their dream retirement house.

Developers love baby boomers with money and no brains they have a desire for the big fancy custom house built burning up the retirement money. People in the construction industry in the rural areas of BC have never made so much money they could double-tripple their rates. That little fairy tale is over where money was no issue just do it, the stupid ones with money is over. I have been around the construction industry for quite a few years and I have never seen so much stupid money spending that was happening from 2004 to 2007. Contractors were cashing in left right and center.

Currently resource industry work is keeping some money floating around the demand for lumber from China is keeping forestry going. Don’t kid yourself the forest industry in BC provides lots of spin off money.

The biggest kick to the nuts BC can receive will be when China says no more logs or other natural resources they are buying. Once the resource industry goes down the shit is going to hit the fan.

The problems rural areas on Coastal BC are facing.

The lack of jobs, construction has kept people employed for a steady 6 years. In that time construction workers have relieved their house horny hard on and bought themselves some house debt. Now they face the problem they are part time employed because the construction industry is dead.

The service industry jobs like landscapers, house cleaners etc are also finding the lack of work. The first thing broke baby boomers cut is the people that maintain their homes and property.

Tourism it is a big industry in this province last year rural places seen one of the worst years. Nobody has any money so this year it will be worse.

Restaurants and bars are also seeing a drop these businesses are just hanging on to what they have left.

Do I work in the construction industry “NO” not anymore I recieved some advice from wise older people 6 years ago get out while you can. I’am glad I took that advice anybody I worked with are un-employed or working part time struggling with massive debt.

I myself can sit back and watch things take its course. Do I like my living situation yes and no it is what I can afford, I’am I deep into debt no. Do I have lots of savings no I don’t the cost of living is high.

I’am I happy I found this blog that is a thumbs up.

#156 Shane on 04.07.11 at 3:06 pm

Garth, How do you find a good property before it goes on MLS.

Shane

#157 dm in c on 04.07.11 at 3:37 pm

Don Campbell gets around — now it’s Calgary’s turn. Pump that market.

http://www.calgaryherald.com/business/real-estate/Calgary+house+prices+headed+peak+levels+analyst/4576355/story.html

Of course, no comments allowed.

#158 (low density) Sam on 04.07.11 at 3:39 pm

#73 Jace on 04.07.11 at 1:52 am
Don’t wait for the CRASH bears
______________
where have I read this before?

WELCOME to the DC bubble blog, 2006
WELCOME to the SD bubble blog, 2006
WELCOME to the LA bubble blog, 2006
WELCOME to London RE pumper sites, 2006
WELCOME to Spain, 2006
WELCOME to Toronto, 1989
WELCOME to Vancouver, (many times)
WELCOME to Florida, 1913
WELCOME to Tokyo, 1989

#159 jess on 04.07.11 at 3:42 pm

FINRA is particularly focused on non-traded REITs
FINRA Announces Enforcement Focus on Private Placements and Non-Traded REITs
Apr 06, 2011 04:40 PM

For example:
“SEC Enforcement Director Robert Khumazi says the broker-dealer’s clients were not told that brokers had incentives to sell the REITs. He stressed the importance of investors being able to rely on unbiased advice from financial advisers.

The SEC charges come from REITs sales that took place between 2000 and May 2004. CNL Holdings Group, Inc. and W.P. Carey & Co. LLC created, advised, and managed the REITs named in the proceedings.
================================
bowel-dwelling bugs ! i’d rather have bed bugs. Do you think that this will put a stop to medical tourism?

http://www.thelancet.com/journals/laninf/article/PIIS1473-3099(11)70059-7/abstract
Findings
From Sept 26 to Oct 10, 2010, 171 seepage samples and 50 tap water samples from New Delhi and 70 sewage effluent samples from Cardiff Wastewater Treatment Works were collected. We detected blaNDM-1 in two of 50 drinking-water samples and 51 of 171 seepage samples from New Delhi; the gene was not found in any sample from Cardiff. Bacteria with blaNDM-1 were grown from 12 of 171 seepage samples and two of 50 water samples, and included 11 species in which NDM-1 has not previously been reported, including Shigella boydii and Vibrio cholerae. Carriage by enterobacteria, aeromonads, and V cholera was stable, generally transmissible, and associated with resistance patterns typical for NDM-1; carriage by non-fermenters was unstable in many cases and not associated with typical resistance. 20 strains of bacteria were found in the samples, 12 of which carried blaNDM-1 on plasmids, which ranged in size from 140 to 400 kb. Isolates of Aeromonas caviae and V cholerae carried blaNDM-1 on chromosomes. Conjugative transfer was more common at 30°C than at 25°C or 37°C.
======

http://noir.bloomberg.com/apps/news?pid=20601124&sid=aFNwCPBDeOEs

“There is not even a light you can see at the end of this dark tunnel,” said Peter Collignon, an infectious diseases doctor who teaches at the Australian National University in Canberra. “People are dying from infections that are no longer treatable with available antibiotics.”

The researchers, led by Timothy Walsh of Cardiff University in Wales, collected 171 swabs from some of the drains that line New Delhi’s streets and 50 samples of public tap water in September and October. The samples were tested in the U.K. to identify the bacteria they contained and whether the germs had a gene known as NDM-1, which makes them resistant to a class of antibiotics-of-last resort known as carbapenems.

The gene was found in two of the drinking-water and 51 of the seepage samples, including in Vibrio cholerae, Shigella boydii and nine other bacteria species not previously reported to harbor the resistance mechanism.
http://noir.bloomberg.com/apps/news?pid=20601124&sid=aFNwCPBDeOEs

#160 BrianT on 04.07.11 at 3:46 pm

Unbelieveably, this bubblehead is Obama’s chief economic advisor-Aaron tries to be respectful but jeez it is like talking to a little kid http://finance.yahoo.com/blogs/daily-ticker/bring-qe3-t-afford-not-more-romer-says-20110407-045249-959.html

#161 Maxamillion on 04.07.11 at 3:53 pm

Breaking News: Stephen Harper, YouTube sensation releases new song called “See You in 5 Years”. See you in five years for doubling the TFSA and the for that income splitting promise. Lets not forget that big hit a few years ago entitled “Won’t Tax Income Trusts”

#162 Industrial Guy on 04.07.11 at 4:03 pm

Garth, I guess you mean shopping centres and strip malls by the term: “commercial properties”.

Commercial properties as in factories and warehouses would be a terrible place to put your money.
Ontario has hundreds of vacant industrial malls. I pass them all the time. They used to house my customers.

Companies are moving from one building to another to take advantage of lower rents, escape higher city taxes and sometimes unions.

#163 Dmitry on 04.07.11 at 4:22 pm

Garth,

I should have written clearer. I did not mean to contrast investment returns of real estate and mining stocks. Rather, I wanted to point out that comparing past returns of selected REITs (key words – “past” and “selected”) to those of condos is a deeply flawed analytical method. As a matter of fact, it is a logical fallacy.

It is always possible to find a REIT that performed better than an average Calgary condo. Given vast MLS records it is also not difficult to demonstrate that investments in certain Toronto condos vastly outperformed REITs. Yet, both findings are mere illustrations of past performance that does not prove anything at all.

Abundant supply of new units and very low gross rental yields should be enough to caution prospective condo investors. Other factors that you write about – demographics, inflation and interest rates also suggest that condos have little potential for appreciation.

Investment returns summary (Fig 1) on the first page of Macquarie Report shows changes in equity for 2008 – 2010 and 2009 – 2010 holding periods. So does the graph. This is why I used easily obtainable three year figures.

All above is to say that while I agree with your conclusions, quoting selected examples of past performance is a disservice to your insightful blog.

Thanks,
Dmitry

#164 Kitchener1 on 04.07.11 at 4:34 pm

#145 Ferris Bueller

Are you seriously pushing the merits of Toronto??

I grew up in/went to univeristy/worked in the downtown core for 30 of my 32 years.

There is way to much inventory coming online right now. It will end badly.

Funniest thing is that back in my univeristy days, i knew and hung out with a lot of the queen W crowd. Back then you couldnt lease a storefront without a 1-2 year wait minimum. The core was full of various nightclubs and bars. Everyone back then thought the condo’s were the godsend. I disagreed and took a lot of flak for it.

Here is the deal: take a 20 something year old living at home in parents basement. assuming they are working they have lots of disposable income as they pay not rent or hydro or food. That money goes into nights partying out, eating at resturants and shopping at trendy stores.

Well, when that 20 something yr old buys a condo, now he has a mortgage/maint/property tax/food/cable/phone etc… to pay, lot less disposable income, hence no more $ for clubbing/resturants etc…

And look at downtown core today, half of the night clubs have for lease signs on them, tons of closed resturants and its never been easier to get storefront leases on any hot strip.

the hot thing to do now with the 25-35 crowd is have friday/sat dinner/cocktail/rooftop bbq parties. BYOB etc… ever try to book a party room at one of those trendy condo’s, well there backed up months!!

This stupid overdevelopment will be the end of the city I love. Toronto is going to be a ghost town when this market crashes– NO ONE WILL BUY A CONDO anymore.

all for greed.

Man, you clowns have no idea what is coming, NONE.

I travelled to and have friends in Arizona, Michigan, Florida, Boston and the change that those states-cities underwent was and still is stagering. We dont even need a crash, 15% decline in prices while mortgage rates go up 1-2-3% will KILL the RE market for a decade.

#165 Coho on 04.07.11 at 4:37 pm

Here’s an update from Arnie Gundersen on what is happening to real estate in northern Honshu, including the oceanfront. For people interested in listening to a clear and straight forward manner on what is really happening at the stricken nuclear plant, check this guy out. He’s put out a video every other day since the beginning of this event.

If you go to you tube and google his name, you’ll find his videos. It could be a good idea to watch them chronologically if someone has the time or the inclination, and get away from the granite top wishes and stainless steel dreams for a while.

http://www.youtube.com/watch?v=enddg5VFftw

#166 stealth on 04.07.11 at 4:56 pm

Mr. Harper is promising to up the TFSA contributions to 10K / year.

What do you think chance of this are?

#167 The American on 04.07.11 at 5:06 pm

In response to #145: Ferris Bueller, you’re making no sense whatsoever. Like I said, regardless of the number of people that may be stated to EVENTUALLY take these some 17,000 units, there simply will not be nearly enough to fill the gap in the near future to thwart a forthcoming crash/melt. As for Toronto, I am there quite often. In fact, I’m in Canada in general quite often, including Vancouver, Calgary, Montreal and Toronto. So, yeah, I’ve been there MANY times. Toronto is much of a NYC wannabe in every sense imaginable.

What you AREN’T making clear, however, is let’s just give you the benefit of the doubt and say that every one of these new units of inventory (all 17,000) becomes quickly snatched up by ignorant buyers this week. This, of course, means they had to come from SOMEWHERE. Meaning, they’re ridding themselves of the existing homes/condos they already live in, which will naturally create additional listings on the Canadian MLS. The 17,000 number, as I’ve explained before, will not be filled by any amount of immigration or new buyers. There simply is not nearly enough people moving to Toronto to make it happen. But, giving you the benefit of the doubt, this means a NEW glut of inventory would come to fruition as these condos are snatched up. Like I said, it is simply over. Too much inventory. 500% more inventory than New York is absolute insanity and completely devoid of any business justification. Simply put, it is ignorant to believe the influx of new inventory will be sustainable.

#168 gmc on 04.07.11 at 5:33 pm

how about buying into the red hot BC mining district, BC hydro has just announced they are putting a new power line in the Northwest corridor, for resource development,such as the biggest underdeveloped Copper project in Canada….. think Copper Fox
and also
Nova Gold
Seabridge
Pretium
COPPER FOX _ biggest deposit in Canada and considered a strategic Copper /Gold/Silver/Moly/rhenium asset, huge mineral resource
I got in Copper Fox last year At 20 cents, it is now $2.68 and is heading to $10 at the end of this month when they announce their new resource estimate.
Got my Tax free account filled and RRSP and cash account, I am a RENTER, but will outright own BC real estate in 2015, MORTGAGE FREE.
WHY WOULD YOU NOT!!!!!!!
cheers gmc

#169 Live Under Your Means on 04.07.11 at 6:18 pm

#165 stealth on 04.07.11 at 4:56 pm
Mr. Harper is promising to up the TFSA contributions to 10K / year.

What do you think chance of this are?

Zilch

#170 bigrider on 04.07.11 at 6:25 pm

House at yonge and Lawrence, east side, 2 years new ,on a 30 foot frontage lot. Lot purchased for 700k house built for around 400k construction cost just sold for 1.9million and yes my source extremely reliable, the most reliable actually.

As much as it pains me to say it, this house humper has made out like an absolute thief!!

This cannot continue.

#171 Toronto is prices falling hard on 04.07.11 at 6:26 pm

poco on 04.07.11 at 1:09 pm%70 Tim–that foreclosure you posted is actually in Pt Coq.–has been on the market since Feb–still no takers
you asked “is it finally starting to happen?

as i’ve said many times before, it’s been happening since last spring here in the tri-cities– price drops galore– tons of places listed for less than the owners paid 2 and 3 years ago–here’s a few of the listings i received this week
#108-285 Newport–bought Mar 08 –289k (that’s 3 years ago) listed dec10 for 319–dropped to 299k now listed at 285k
#204-2228 welcher–bought sept 09 –317.9k now listed at 281.4k
#209-1438 Parkway Blvd–bought nov 06–294k(5 years ago)–listed for over 2 years at 329.9k and just sold for 285k
#2002-2959 Glen Dr–bought sept 09–699.9–just listed 679k
open up your eyes people, do some research–look up these addresses on the realtor map –see how many properties are for sale in the same complex–write down some of the mls#s and contact the listing agent or any realtor -get the real scoop on the properties-original price– price changes –don’t rely on these goofy numbers you hear on MSM or read in the local rags–by the time you figure it out the market will have tanked and started back up again
———————————————————-

This is happening all over Canada. My BIL sister a RE agent lost her home after going bankrupt. Yes it’s true a realtor gone bankrupt. She was new to the game 2-3 years and bought a home 2-3 years ago and could not sell it for break-even. Since she put nothing down she just walked away and went bankrupt. She lived in Brampton and yes that city has been in the drumps for years but the reality is the RE is very sick and going down for the count. She now is out of the realtor “profession” . Those who are buying now will lose it all. Very few uneducated people left to buy.

#172 Live Under Your Means on 04.07.11 at 6:32 pm

It amazes me how many posters want Garth to provide/comment on specific investments in which they should invest.

#173 realist on 04.07.11 at 6:34 pm

Timely if brief article today from BNN regarding REITS:

http://www.bnn.ca/News/2011/4/7/Picking-winners-in-a-strong-REIT-market.aspx

#174 Live Under Your Means on 04.07.11 at 6:40 pm

OT – Do any of the you know how long a car battery should last? Are most of them from China now?

#175 Nicky Bouts on 04.07.11 at 6:52 pm

Garth,
I just read “What Smoke”, have a question about Net worth. When it comes to real estate in net worth. Do you count the fair value of your home on the asset side, and remaining mortgage on the liabilities side? Or just the equity on green side and remaining mortgage on the red side (meaning new young buyers immediately have a net worth of 100s of g’s in the red)?

Thanks!

True asset value in positive column, mortgage and exit penalties in negative one. — Garth

#176 Cellar Dwellar on 04.07.11 at 6:55 pm

I have friends in Vancouver that brag that their houses are worth over a million bucks.

When I reply,” Then sell it and you’d be a millionaire”
They’re incredulous response is , ‘But,but, I’d just have to buy a more expensive house”. “Then rent for a year or two”, is my reply. But it never gets anywhere.

I love it at home, and by home I mean living in my parent’s basement. Laundry is always done and it is cheap cheap cheap. It’s a little ackward bringing my super hot girlfriend over, her name is Carolmel and she works on the east side of downtown.

They are so immature and dumb my friends, going out and making their own way in life, living in their super nice homes and driving their nice cars when they could be still living in their parent’s basement, with a hot girlfriend who only costs $75 a night.

#177 Nostradamus Le Mad Vlad on 04.07.11 at 7:14 pm

-
#88 Live Under Your Means — Great cartoon and accurate. Torpedo The Truth Tour — that’s all politicos are good for — Baffle us with bullshit!

#124 Ferris Bueller — Terrific! Another dinglebell like me! See following 3:06 clip, and cheers!
*
Usually, I arise at the crack of supper, snooze for a few hours then go back to sleep. It is a tiring job, but someone has to do it.

However, this means I miss several exciting happenings during the day, so: “We don’t need a ‘collapse’ to have consequences. Why does everyone talk in extremes? — Garth”

Are we nearly there yet? Tell us Massa Garth! We can handle the truth here!

Worms are good for gardens, but suck in computers. Two days ago, one found its way into the OS I have, and last night the PC shut down.

Still, $106 later, I am worm- and virus-free.
*
3:06 clip A zany and brief look at the way life really is.

I Am Der Walrus Three from the Fab Four, the last somewhat Monty Python-esque.

Soros + Food Supply “He who controls the food — controls the world.”

Second Chart is partly interesting.

#178 VICTORIA TEA PARTY on 04.07.11 at 7:22 pm

RATES RISING. THE FIX IS IN. VICTORIA DELUSION CONTINUES!

WE begin in the Eurozone. This from BBC:

Eurozone interest rates have been raised to 1.25% from the record low of 1%. Interest rates had been held at 1% for just under two years following the financial crisis and global recession.

ECB (central bank) president Jean-Claude Trichet said that the rate rise was in response to the risk of accelerating inflation, and added that rates were still very low.

He called the decision a “balancing act”, amid concern the move worsens debt problems for Portugal and others.

“The hike is unwelcome for peripheral countries, but arguably the core member states were in need of this move already some time ago,” said Mr Trichet in a nod to the differing economic fortunes of the eurozone members.

The Bank of England may take a similar path, but when is anyone’s guess. The Bank held rates at the historic low of 0.5% yet again.

DAY OF RECKONING; IT’S OUT THERE

So the Eurocrats, with the UK waiting in the wings, are doing what they have no choice but to do. Why? Because their costly and useless stimulus projects of the last three years have created a fiscal/monetary debt monster that they now realise must be brought to heel or else.

The “or else” is widespread economic disintegration stretched over a period of several years. It’ll either be deflation or some kind of inflation. It won’t matter. It’ll be all bad for everyone.

Meanwhile Portugal becomes the latest candidate for a “bail-out” from the broke and busted EU machine, joining Greece and Ireland with Spain and others sure to follow.

In the US there’s the spectre of a shut-down federal government. A good idea, I think. It won’t go on too long but should hasten the US day of reckoning, another good thing. So it’s looking positive for a change, out there!

VICTORIA DELUSION

Meanwhile in the deluded Victoria real estate market we look at one of the newest condo projects for sale in delightful Fairfield, a lower middle class neighbourhood with pretentions to Victoria’s ultimate residential destinations, Oak Bay, Bear Mountain, North Saanich, certain parts of outlying Sooke.

“Fairfield Rise” is situated close to everything desirable in Fairfield.

Here’s the delusion; the prices!! They are something else in this eight condo unit building:

–How about 433 square feet on the second floor of this four storey complex for only $489,900.00;

–How about 710 square feet on the third floor for $559,900.00;

–Or, this irresistable fourth floor penthouse, one of two, at 856 square feet for ONLY $599,900.00?

All come with “rich wood finished cabinet finishes (!)”, steel, granite, balconies (barbeque installed) on-site parking and so on.

The project took a while to build and is apparently earthquake something or other, and sound-proofed (to muffle the screams of the new resdents once their mortgage rates double?!).

This building seems to be going into a near saturated market whose prices look unstable and have, in some neighbourhoods, begun to slowly turn south.

A bellwether project it is at this time. Good luck to all involved.

#179 S.B. on 04.07.11 at 7:38 pm

Cool full sized electric motorbike:

http://brammo.com/store/empulse6/

(Cager here)

Still, there’s no replacement for displacement!!

#180 Markey on 04.07.11 at 7:48 pm

I’ve seen this movie before too.

In the late 80′s I inherited some money after the death of my mother. My life partner and the father of my baby talked me into putting a down payment on a house so the money “wouldn’t be wasted”. Unfortunately, he soon after developed a cocaine addiction that left us financially devastated.

When we bought our family home in 1990 it cost around $160 thousand. When the bank took it from us two years later the value had dropped by over $30 thousand.

Lessons learned: Never become financially entangled with someone who has nothing to lose when you have everything to lose; be prepared, if you have a child, to raise that child as a single parent (with no financial, practical or moral support) and; if you buy at the top of a housing bubble, be prepared to watch your “investment” tank.

#181 Two-thirds on 04.07.11 at 7:50 pm

Some light entertainment, courtesy of MoneySense:

Canada’s 2011 “Best places to live”

http://list.moneysense.ca/rankings/best-places-to-live/2011/Default.aspx?sc1=0&d1=a&sp2=1&eh=ch

Top spot this year?

Ottawa-Gatineau

#182 SMOKING MAN on 04.07.11 at 7:58 pm

This is how a super brain see things. Bubble heads you may get your wish but this is what needs to happen.

Right now Hosni Harper is backed by Canada’s billionaires and elite, they have an agenda as they always do, it’s call we want more!!!. Now if Iggi forms the next Gov’t with the NDP and Block, you can bet your bottom dollar that it will be short lived, the men from behind the curtains will sabotage the economy, the BOC will spike rates like no tomorrow, Iggi has now idea of the power he is up against. Now if Hosni Harpo, get a minority and no deal with the rest for power, same old for a while.

Watch and learn little grasshoppers……………

#183 Dodged-A-Bullit-in Alberta on 04.07.11 at 8:05 pm

Greetings: #173 [Live under your means]

If you install a new battery in a vehicle and ensure the charging system is properly maintained, do not let the battery go dead in the winter, and freeze; you should be well able to get 5 years from it. One of the things that will crater a battery is overcharging, and heat. I am not sure where batteries are made, however I get mine from Canadian Tire and they stand by their warranty.

#184 walter safety on 04.07.11 at 8:09 pm

Last time I checked there was no uniform standards nor could there be for valuing commercial real estate .Of course there are formulas to guess at value but nothing in place to avoid scammers overvaluing properties(or smart sellers and managers) after all its just an opinion.So enjoy your REIT’s

#185 a prairie dawg on 04.07.11 at 8:25 pm

There goes 50% of this years RE demand…

http://ca.finance.yahoo.com/news/More-half-young-adults-capress-3474012092.html?x=0

#186 Ex-Cowtown on 04.07.11 at 8:25 pm

SMOKING MAN on 04.07.11 at 7:58 pm

This is how a super brain see things….

===================================

This is how a blogger opens when they are pneumocephalic.

Kind of like Maggie Thatcher said ” If you have to tell them you’re a lady… you aren’t”

#187 T.O. Bubble Boy on 04.07.11 at 8:30 pm

#135 T.O. Bubble Boy is a TROLL

Seriously… whoever you are???

I can understand the BPOE trolling, but I think I post here about 1/4 as much as that RE pumper!

#188 Makes Cents on 04.07.11 at 8:32 pm

#74 Blobby Thank you for that, I laughed so hard. Garth….. is July 09 your anniversary?

#189 doctore on 04.07.11 at 8:34 pm

HARPER doubles the amount to put into TFSA’s to $10k!!!!

Oh wait ,not until the deficit is supposedly conqured.

http://www.news1130.com/news/national/article/209112–don-t-bank-on-harper-s-tfsa-promise-political-scientist

#190 a prairie dawg on 04.07.11 at 8:35 pm

Correction, 50% of the younger crowd that is…

#191 Utopia on 04.07.11 at 8:39 pm

#181 SMOKING MAN on 04.07.11 at 7:58 pm

“This is how a super brain see things. Bubble heads you may get your wish but this is what needs to happen……..Watch and learn little grasshoppers”

——————————————————-

Superbrain Eh?

More like an arrogant windbag. This site is great because for the most part there is reasonable discourse and plenty of interesting commentary from the many hundreds of people who post here regularly.

What makes you so special that you can insult the community with all your thin wisdom Smoking Man and then offer nothing that even makes sense?

Maybe you need a rest.

#192 Nostradamus Le Mad Vlad on 04.07.11 at 8:42 pm

-
#181 SMOKING MAN — Great post. TPTB have chosen the leaders they want for some time now.
*
Radiation is good for us. Here’s the proof.

Links The link between the war machine and big biz. What if one or both were eliminated?

3:19 clip Mike Reagan, RR’s son talks of Obama doing to the US what happened to the USSR (broke).

Russia bans seafood from Japan, and 12:05 clip Inside Fukushima.

More BS “The Elite’s Main Stream Media has already started to marginalize and control the growing Freedom Movement.”

Utah Precious metals as legal tender. Gold Two “Gold is worth what it always has been. The FRN/AKA U.S.Dollar is dying before our very eyes!” Gold Ownership “FDR’s original executive order presented in full. Yesterday was the 78th anniversary of FDR’s decree.”

CBS “And if you can’t trust the news organization that told you to buy Bear Sterns the week before it collapsed, who can you trust?!?” wrh.com and 7:39 clip Evidently Portugal has defaulted (or taken the bailout), and the US, along with a host of others, follows over the cliff just behind. Insider Trading History of the present financial slop. Wal Mart Rising Chinese prices.

BP The maintenance was (conveniently) delayed.

False Flags “I wonder if a “terror attack” (reg trademark White House) by Libyan “Al Qaeda” (reg trademark Tel Aviv) [a.k.a. The Toilet] will be the propaganda device used to sell the American people on the “need” to keep Qaddafi in power.” wrh.com.

Basic computer instructions. This what might have happened to me yesterday.

Dictatorship Yet another little tin god.

Three min. clip Madeleine Albright (remember her?) confronted on a couple of issues.

FF time Utah. ‘Quakes, nukes or both? May go with this.

#193 CrowdedElevatorFartz on 04.07.11 at 8:43 pm

Hahahahah BPOE you sly little manboy.
Your imitating #25 Cellar Dwellar on #175 Cellar Dwellar arent you.
Haahahahaha BPOE your soooo smart, BUT your not as funny as the BPOE who has crabs.
No BPOE postings today but suddenly a “mock” Cellar Dwellar pops up?
hahahahahaahha

Dont worry BPOE ……as #25 Cellar Dwellar said earlier.
INTEREST RATES GOING UP UP UP!
pssst that ride in the Richmond Elevator elevator still stands you frightened little manboy. Just close you eyes and breathe DEEEEEEEEEEEP

#194 realist on 04.07.11 at 9:03 pm

@American: According to RealNet Canada Inc., there were 20,349 new high-rise condominium suites sold in the GTA in 2010, accounting for 55% of all new home sales for the year.

Compared to SFH, condos are affordable. No reason to believe that the market can’t absorb another 17,000 this year. Excluding Mexico City, Toronto is the fourth largest city in North America.

P.S. It is estimated that there are over 30,000 people moving to the GTA every MONTH, and a rental vacancy rate around 2%.

#195 House flipping gone bad on 04.07.11 at 9:06 pm

Here is an update on flipping Toronto RE going bad

House at yonge and Lawrence, east side, 2 years new ,on a 30 foot frontage lot. Lot purchased for 700k house built for around 450k-construction cost just sold as a power of sale for 925K and yes my source extremely reliable, the most reliable actually.

#196 Worried realtors on 04.07.11 at 9:09 pm

Greaterfool has not seen so many out of work realtors posting fake sales/bidding wars as sales in the GTA fall again for the 10th straight month in a row. Why didn’t realtors post bidding wars and sales during the good times? Well they were busy selling and making money where now they are not selling anything. Proof? 10 straight months of falling sales.

#197 McLovin on 04.07.11 at 9:34 pm

Garth, How do you find a good property before it goes on MLS.

Shane

You don’t. The Realtors sell the undervalued ones to their brothers before it hits the MLS. You can guess who loses.

#198 (low density) Sam on 04.07.11 at 9:37 pm

#171 Live Under Your Means on 04.07.11 at 6:32 pm

It amazes me how many posters want Garth to provide/comment on specific investments in which they should invest.
_________
And the exact hour and second to buy, the exact hour and second to sell

which broker to use

the astrological sign of the (free) financial planner to use

#199 Landlord on 04.07.11 at 9:50 pm

#175 Cellar Dwellar

That was funny

#200 optimisticAmateur on 04.07.11 at 10:05 pm

Hi Garth,

Interesting post, I actually posted a similiar argument on my blog

However I believe quality dividend paying companies offer better long term reward potential. After all don’t businesses have to do better than real estate in the long run for us to afford rents and mortgages.

#201 Oasis on 04.07.11 at 10:12 pm

what a shocking surprise..

US dollar sinking again tonight, along with bond prices,

while gold and oil continue higher.

must be because of “deflation” lol…

#202 SAD on 04.07.11 at 10:21 pm

The new condo market in Toronto has many syndicates of purchasers from India, Israel and China. They even started property management. In some buildings these ownership groups own 60%. These people are taking the long view ( like ten years or longer) and are helping to replace the existing aging rental stock. The run in the late 80′s had a large amount of British and Germans. They have deep pockets and patience. Of course we have our local speculators whom are in for short term profits and will run for the hills as the market changes. Life goes on but sometimes history repeats itself.

#203 Utopia on 04.07.11 at 10:24 pm

#191 Nostradamus Le Mad Vlad to SMOKING MAN —

“Great post. TPTB have chosen the leaders they want for some time now”

———————————————————

Are you just trying to be irritating full time now?

#204 Cellar Dwellar on 04.07.11 at 10:31 pm

ahahahahhaa #175 BPOE is plagerizing “mock”BPOE !
Classic! Cant beat em join em, eh my little “Richmond Rodent”?
BPOE – Barely Passed Oral Engrish

and so sorry, Mortgage paid off 5 years ago, keep the computer in my basement entertainment room as the kids upstairs wont leave me alone. hence the “cellar dwellar” moniker.
But keep dreaming the impossible dream my little “monkey see monkey do”
How are the “nether regions”? Still itchy?

INTEREST RATES GOIN UP UP UP !
bwahahahahahahahahahaahhaahahahaha

#205 trolls are winning! on 04.07.11 at 10:50 pm

hehe this is getting juicy.

troll(s) are spoofing BPOE, T.O. Bubble Boy, Cellar Dweller and others?

Keep it coming, crab-boy!

Some much needed comic relief in these distressed times.

(rimshot). I’ll be here all week…..try the veal!

#206 Islander on 04.07.11 at 11:12 pm

Re VICTORIA DELUSION #177

You must be new to Victoria

#207 The American on 04.08.11 at 10:25 am

At #193: Realist, holy shit balls. This is pointless. Do you realize if your statistics are true that is the SURE TELL way of KNOWING you’re officially in a severely HUGE bubble? Trust me, I’ve lived it!

You claim: “Excluding Mexico City, Toronto is the fourth largest city in North America.” Actually, it is the FIFTH largest CITY PROPER, behind Mexico City, New York City, Los Angeles, Chicago, then Toronto. Also, that’s only if you consider city proper. This isn’t a truly accurate depiction of metroplexes as several U.S. cities/metroplexes are significantly larger than Toronto’s aggregated metroplex population of 5,1130,000. Hell, Houston, Dallas, and Atlanta surpass that.

Anyway again, yo