Bad ideas

She’s 38. He’s 45. The kid’s five. “I stumbled upon your blog today and read through the scenarios that you post for others to comment on,” Lisa says.  “I think I might need a reality check, so I’d appreciate it if you’d do me the honour.”

Lisa, Lisa. Are you sure?

The house in Halifax is worth $225,000, with $145K left on the mortgage. Recent renos dinged the LOC for forty grand, and they have $70,000 in combined RRSPs. “We do not budget our money wisely. We are learning but it’s been a steep learning curve for us as we kept our finances separate until about 2 years ago.  We do struggle with cash flow from time to time, although we certainly earn enough to meet our needs.”

“We are very interested in buying an investment property which we feel would add good diversification to our portfolio. We are considering borrowing against our home equity for a downpayment of 20%. Financially, I’m hesitant to make the plunge and I’m a little wary of doing so in particular because of our line of credit debt. However, we can still find lower-than-market priced properties in convenient areas of the city. The consolation is that if we find ourselves “over our heads” we could off-load the property quickly and at a profit. I’d appreciate your reality check and that of your readers. Thanks!”

Lisa adds that it’s different in Halifax (of course) due to the recent announcement Canada’s new war ships will be partially built there. While that’s cool, the province has troubles. The NDP premier recently warned of a ‘turbulent’ year, with growth barely eking above 1%, and the government’s desperation is showing as it tries to bail out jobs at failing mills. Of course, there’s also the highest HST in the nation (at least among provinces that matter).

But apart from that, nautical Lisa and her hubs have eighty thousand in equity, forty in debt and seventy in a tax shelter. That’s a net worth of $110,000 – which is hardly a success by the time you hit your forties. Of that, 73% is in one asset – their house. So how the heck can buying another house be ‘diversification’?

In fact, these misguided souls are proposing to suck off at least half of the equity they have to use for a downpayment on a seedy rental property. By the time it’s over, their debt will have ballooned and risk swollen, as they stuff even more eggs in one basket. Plus, with current rents in Halifax (like the rest of the country) it’s virtually impossible to buy a SFH and be cash-flow positive, even with dirt-cheap mortgage rates.

I mean, has this pathetic blog ever carried a more naive statement than this? – “If we find ourselves ‘over our heads’ we could off-load the property quickly and at a profit.”

This is what I wrote about yesterday. The Nortel moment. That point in time when people are blinded. Together. Wilfully. No longer can they see the risk surrounding them since they’re in a crowd.

Lisa, my little sailor, abandon ship. Nobody gets rich by taking on more debt with scant, if any, net income. The borrowed downpayment will be at floating rates against your home. The rental property will have 100% financing. Not only will the numbers not work, but you’re exposing yourself to interest rate, economic and market risk.

A batch of new navy tubs will do nothing for the HRM housing market but offset some of the gathering economic weakness. Real estate in the city will be impacted along with every other urban market in the inevitable correction. Nothing turns illiquid faster than residential real estate. And the little orgy of cheapo mortgage rates visited upon us this week by hungry bankers is only going to make the future worse – sucking in more victims like you.

Lisa, babe, if you don’t believe me, listen to this. Even the bank economists – at least those allowed out on day parole – are warning you off.

  • “I think it is fairly clear that home prices are overdone in certain urban areas. The map I’ve done says if we ever return to normal interest rates, home prices are 15 per cent too high,” says RBC’s Eric Lascelles said.
  • “If indebtedness continues to grow at its current pace, the household debt-to-income ratio will reach 160 per cent by 2013 – the level hit when U.S. households got into trouble,” says TD’s Diana Petramala.
  • “Corrections in housing do occur and they can occur suddenly, so while this is not a red alert, we are not flashing green, either,” says BMO’s Sherry Cooper. BTW Lisa, Sherry is selling her mansion in Toronto – bailing out – doing the opposite of you.

If you want to do something smart, pay off your non-deductible line of credit. If you’re hot to invest for an income stream, slap your extra income into a portfolio of preferred shares and REITs – the returns will be fatter and the taxes skinnier. But if you’re moist and horny to get another house, there’s nothing this over-sexed blog can do to help.

Lisa. It was an honour.

280 comments ↓

#1 TurnerNation on 01.13.12 at 10:12 pm

Over 300 comments yesterday on this under-sexed weblog!

Blog dogs know something’s up. In 2012, our financial overlords are playing for keeps. Country after country is falling. We are not next?

#2 mel in victoria on 01.13.12 at 10:16 pm

Seeing I’m first………Sell your non core gold. Will be cheaper in a month or so…..as will your silver…Good luck!!

#3 The truth on 01.13.12 at 10:19 pm

“The map I’ve done says if we ever return to normal interest rates, home prices are 15 per cent too high”

The key here is normal rates, which will not happen for a long time. I feel like the greater fool for selling my house 3 years ago, and having dumped $80,000 to my landlord in rent thus far.

I agree with you Garth but the correction is taking too damn long.

You mean you didn’t invest your house money to pay your rent? Or you sold because you were dumping your money in bank interest? Or you just like blaming others for your own decisions? — Garth

#4 Tams on 01.13.12 at 10:20 pm

First!

#5 Josef on 01.13.12 at 10:20 pm

First!!! Oh Yeah BABY!!!!! Had to hit the refresh button for an hour.

#6 Dan from Richmond Hill on 01.13.12 at 10:20 pm

It seems that soon there will be free money in Canada, so why not ?

#7 Tams on 01.13.12 at 10:22 pm

Ok – immaturity out of the way. *Nice note on Sherry from BMO… Seems very similar to Nortel – preaching that it’s not that bad… and yet getting out of the picture themselves… they’re hedging their bets… lol.

#8 abraxas on 01.13.12 at 10:25 pm

Garth, this infatuation with REITs on this blog is ridiculous. If the real estate in Canada craters as your rightfully predict the REITs will follow suit. It doesn’t matter that they don’t hold residential RE. Credit in Canada will dry up and no business that’s significantly leveraged will remain prosperous. Canadian REITs are every bit as dangerous as residential RE.

Want to make a killing in equities? Go long Vanguard VGK. P/E at 10, dividend yield at 5%. Once the panic over Europe peters out you are sitting on a lot of quality stocks bought at pathetically low prices. There is a reason why Buffet is shopping in Europe and not in Canada.

REITs are a good asset to have as part of the mix in a balanced portfolio, with strong cash flow and a track record of steady appreciation. They are not correlated with residential real estate, so your comment is utterly groundless. House prices in Canada can easily correct without any drying up of credit or significant impact on the rental stream from the large-scale office or retail projects (or rental apartment comlexes) REITs generally own. Your suggestion to go long on an individual equity shows you are no source of worthy advice. — Garth

#9 Ballingsford on 01.13.12 at 10:26 pm

I’m amazed at how some people think! No wonder Canadians are at record levels of indebtedness.

I would have thought an East-Coaster would have had more common sense. Unlike the West-Coast and Toronto.

#10 Bailing in BC on 01.13.12 at 10:28 pm

Hee hee “lower-than-market priced properties” Haa Haa, ha, Hee hee, Haaaaa haaa haa.

Oh Lisa, that was a good one.

Yes, there are lots of them. They are in convenient areas of the city. Tee hee

#11 TurnerNation on 01.13.12 at 10:28 pm

Josef, once again I show you how it is done. Watch and learn son. #1 is not just something done in the bathroom, it is a way of life for us blog dogs.

#12 Doom on 01.13.12 at 10:29 pm

#5 Josef on 01.13.12 at 10:20 pm

First!!! Oh Yeah BABY!!!!! Had to hit the refresh button for an hour.
——————————————————-

and yet you are #5. Use the money you save renting to buy yourself a life…..

#13 corey@kaye on 01.13.12 at 10:47 pm

Still, would like to know about a potential cash positive unit in HRM. Different than owning right?

#14 Fifty Percent Correction Predictor on 01.13.12 at 10:50 pm

Ground level reporting:

Just saw another For Sale sign poped up this morning. Added together, there are four (4) For Sale signs put up in two blocks of the street (Toronto) this week in the midst of dead winter.

This Spring is sure going to be interesting!
Can not wait to find out.

#15 jess on 01.13.12 at 10:54 pm

The how “Fraud Pays” Rational- why slow down these types of loans going through the company’s pipeline, because losses due to fraud were small compared to the money the lender was making from selling huge volumes of loans.

SUBPRIME MORTGAGE FORECLOSURES: May 12, 2000

MOUNTING DEFAULTS DRAINING HOME OWNERSHIP
By Alan M. White and Cathy Lesser Mansfield
May 12, 2000
MOUNTING DEFAULTS DRAINING HOME OWNERSHIP
By Alan M. White and Cathy Lesser Mansfield
http://facstaff.law.drake.edu/cathy.mansfield/subprime.html

Fraud and Folly: The Untold Story of General Electric’s Subprime Debacle
Friday 13 January 2012
by: Michael Hudson, iWatch News | Report

http://www.iwatchnews.org/2012/01/06/7802/fraud-and-folly-untold-story-general-electric-s-subprime-debacle

Last update: Dec. 12, 2011
Bailout Recipients

http://projects.propublica.org/bailout/list
Net Outstanding $243 B

#16 Onemorething on 01.13.12 at 11:08 pm

Lisa, my advice is go for it, why not jump in with every other lost soul. Halifax is yet to bubble so please help it along so it can compete with the rest of Canada.

#17 SteveO on 01.13.12 at 11:13 pm

Hey all
The banks are offering new 4 yr. term mortgages locked in at 2.99% ( 10% annual lump sum and 10 % overpayment allowed ).
Can’t see them doing this with my best interests in mind- no pun…
I’m currently at prime minus .65% which they aren’t offering anymore so I’m not overly tempted but it appears they are calling in the last few stragglers out there.
What say you?

#18 LJ on 01.13.12 at 11:20 pm

I love those “average household debt-to-income” figures they throw around.

There are lots of people out here not carrying ANY debt.

So, does that mean that the remainder are kindly hauling around an extra heavy debt load to make up for the prudent citizens?

#19 Randy on 01.13.12 at 11:21 pm

Garth….I’m enjoying your book Money Road….Wish you had written it earlier….I could have saved the money and time that I spent on the Canadian Securites Course….plus it’s explains the concepts in a understandable manner….so that someone like me with A.D.D. can understand…

#20 Bill Gable on 01.13.12 at 11:24 pm

“At least, those out on day parole”. They just about had to call the Ambuance I was laughing so hard.
Only classic. Bon mot, indeed.

#21 Mister Obvious on 01.13.12 at 11:25 pm

#1 TurnerNation

“Over 300 comments yesterday on this under-sexed weblog! Blog dogs know something’s up.”
——————

No question, comment volume is up lately. But what suprises me is that perhaps only a third of yesterday’s comments had much if anything to do with real estate. Maybe that itself is some kind of indicator.

Could it be that everything that can be said about the state of Canadian RE has already been said? Maybe now its just party time while the Titanic tilts downward.

#22 waiting on 01.13.12 at 11:27 pm

“We are very interested in buying an investment property which we feel would add good diversification to our portfolio.”

What portfolio?? You have mortgage debt, LOC debt, and $70,000 in RRSPs (accumulated in approx. half of your working years) assuming you’ll both work until age 65.

“We do not budget our money wisely. We are learning but it’s been a steep learning curve for us . We do struggle with cash flow from time to time, although we certainly earn enough to meet our needs.”

Re-read your own words. You know you are not managing your money wisely. Take some courses, buy some financial books or anything to educate yourself about personal finances before you take that leap into more debt.

#23 R on 01.13.12 at 11:32 pm

Key words from tonight’s post: suck off, moist & horny.

…and here I thought I was dull for cracking a lager and reading a RE blog.

#24 Devore on 01.13.12 at 11:41 pm

Way too much hay has been made from yesterday’s 2.99% mortgage product. While most stories mentioned “certain restrictions”, almost none went into any detail.

- 2.99% 5 year fixed.
- 5 years means 5.
- 25 year amortization.
- 20% down.
- No, really, it’s 5 years.
- Principal residence only.
- Great credit score required.
- Little to no non-mortgage debt load.
- Pre-payment limitations.
- Did I mention it’s 5 year term?

This lower rate does not help affordability, as defined by monthly payment. 2.99% 25 year mortgage has higher payment than 3.35% 30 year mortgage.

So mostly it’s marketing, a teaser to get people into the bank, and to get some existing 25 year mortgages to switch over. For 99% of first time buyers, this mortgage is irrelevant.

#25 Pickled Lenin on 01.13.12 at 11:52 pm

Comrades:

Join me in the Bolshevik Revolution (the sequel)…the last one went well..all mortgages were cancelled …your credit was good.

#26 Canadian Watchdog on 01.13.12 at 11:58 pm

“Royal LePage Predicts Further Home Price Appreciation Contrary to Recent Talk of Decline”

http://www.royallepage.ca/en/media/120112-house-price-survey-q4-2011-market-survey-forecast-real-estate-market-update.aspx?toolstips=1052&relatedcontent=1074

It’s one thing to refute a minority view, but to deny what everyone and their mother knows is an overpriced market is an abasement of oneself. It is times like this when a spectrum of true colors begins to show in a shadow market.

The top is in.

#27 zman on 01.14.12 at 12:00 am

garth,

i know you have been talking about a correction for some time but i dont see this happening in the gta until rates starts to move up and we know this is not happening.

Rates are but one factor. — Garth

#28 JO on 01.14.12 at 12:03 am

NDP Gov’t = Highest HST in nation + bailout of failing businesses at taxpayer expense. Stupid Dippers.

Heaven help this country if these clowns ever take the country…the makers get screwed by the takers.

And I am no CONservative fan either, but I’ll take a bad PC gov’t over a NS NDP or 90′s ONT NDP gov’t anyday.
JO

#29 ripa on 01.14.12 at 12:04 am

Twelve odd months of this site has acted as a giant ,cold temprence spoon. I do lust, just not over brick & fibro boxes. So Thank You & here’s a story from Down Under of chickens coming home to roost.

#30 ripa on 01.14.12 at 12:05 am

Sorry, here it is. Forgot to Ctrl V

http://www.heraldsun.com.au/news/more-news/landlords-feeling-the-pinch/story-fn7x8me2-1226243996889

#31 The Biotech Guy on 01.14.12 at 12:06 am

Thanks for another great post Garth !

My dilemma: Not being house-horny I would be happy to either hold or unload my paid off house. The trouble is, kid’s in grade 7, goes to high school soon.

Now, high schools in my zone are a joke. The high school I am thinking off is in upscale area and quite a distance from here. Need to move. Not much for rent in the target zone.

Technically I can afford the move into the zone, where ‘afford’ mean to be able to service new debt at todays prices and rates with some leeway.

Needless to say kids education is important. Done homework on schools. Have about a year to make a move. GTA. What do you suggest ?

#32 a prairie dawg on 01.14.12 at 12:07 am

“I’d appreciate your reality check and that of your readers. Thanks!”

- – -

Lisa,

Ballsy, but completely uninformed about “investing”.

Seek professional financial guidance*. Soon.

(*professional financial guidance is defined as: Not the nice lady at the bank. Not the realtor who lives down the block. Not the friends or relatives who brag about their “investments”, Not the adviser who sells you funds that make them a steady recurring commission –think mutual funds– . But do seek out someone who has a flat % fee with a non-commission based consulting service)

And cancel your HGTV subscription. It’s rotting your brain.

Real enough?

#33 nonplused on 01.14.12 at 12:09 am

A vigorous but not very satisfying post tonight Garth.

Oh well, you may have inadvertently saved Lisa’s marrriage! (No really, a 15% correction while they were carrying 2 houses most likely would have done the marriage in.)

#34 a prairie dawg on 01.14.12 at 12:17 am

PS, without doing the actual math…

The principal owing on your house, plus your LOC debt, would be close to what you’d receive after selling the house outright. (including realtor fees, lawyer fees, land title transfer fees, yadda, yadda)

Effectively that cancels out any equity you believe you have in the house.

In reality, you have a net worth of $70,000. That’s it.

And it’s not different there.

It’s never different there, no matter where there is…

#35 a prairie dawg on 01.14.12 at 12:21 am

#1 TurnerNation

Country after country is falling. We are not next?

- – -

No. But we’re on the waiting list…

#36 a prairie dawg on 01.14.12 at 12:23 am

#5 Josef

First!!! Oh Yeah BABY!!!!! Had to hit the refresh button for an hour.

- – -

Yeah, and you wasted an hour of your time and a ton of bandwidth to be 8 minutes too late.

Good job!

#37 a prairie dawg on 01.14.12 at 12:25 am

I was off by 40K, but they’re still screwed…

#38 Makaya on 01.14.12 at 12:38 am

#5 Josef

First!!! Oh Yeah BABY!!!!! Had to hit the refresh button for an hour.

- – -

Josef, you’re such a loser!

#39 frederoo on 01.14.12 at 12:41 am

When my house value drops 30%, I’ll have the right investment ratio. Thanks for the advice Garth.

Markets are set to fall. Will still have a roof.

#40 Canadian Watchdog on 01.14.12 at 12:49 am

If you’re wondering how real estate is performing for pension funds, here are the latest figures by StatsCan. Keep in mind these are nominal figures and not real ROIs.

http://www.statcan.gc.ca/daily-quotidien/110913/t110913c1-eng.htm
http://www.statcan.gc.ca/daily-quotidien/110913/t110913c2-eng.htm

I hope the RE bulls didn’t expect rates to stay low without some serious ramifications to the economy and consumer savings. This is only the beginning as inflation will start to creep back within following quarters due to a weaker Canadian dollar and sustained oil prices. If homeowners only knew what they were exchanging debt for in the coming decade—household debt wouldn’t have surpassed the point of no return.

But enough about housing, the next issue in 2012—Canadian bonds.

#41 a prairie dawg on 01.14.12 at 12:55 am

“Corrections in housing do occur and they can occur suddenly, so while this is not a red alert, we are not flashing green, either,”

- — -

Financial double-speak. A non-denial denial.

The Banking equivalent of:

Cover all possible scenarios to mitigate culpability or blame, in case we don’t know what will happen next.

Careful. Don’t spook the herd.

#42 BPOE on 01.14.12 at 12:56 am

This person certainly isn’t a part of the Winner’s circle. Winners don’t quit and the own it’s as simple as that. People should get familiar with this website. It proves time and time again with endless examples why owning a home has been the best thing to ever happen to people in Vancouver whereas for the renter – well you know what happened to them folks – walking around shellshocked and kicked to the curb. This is maybe the best PRO home owner site on the web

http://vreaa.wordpress.com/2012/01/13/im-leaving-there-is-no-scope-for-even-holding-the-line-in-vancouver-i-am-not-having-my-living-standards-degraded-incrementally-until-i-am-living-like-a-college-student-which-is-about-the/

#43 Waterloo Resident on 01.14.12 at 12:58 am

Hey, don’t worry, we all know of these NUT-BARS who are talking about how guys with an I.Q. not bigger than their shoe size can take a 2-week course in POWER or PROCESS Engineering and earn $2 Million a year in Fort McMurray ! RIGHT?

The sad truth is that Process Engineering requires at the BARE MINIMUM a 4-year university degree and EXPERIENCE, and only then will you earn $70,000 per year in such a job in FMM, FORGET those crazy dreams of earning $300,000 +, you must be a meth-head to think otherwise.

#44 Ian on 01.14.12 at 1:02 am

Bolshevik Revolution! Very fitting for these times. Lets get in on!

#45 Brad on 01.14.12 at 1:05 am

Whats up with all these posters talking about sky high wage in Alberta’s oil patch?
Here is news for you all that skilled professionals in Alberta are not getting salaries any higher than anywhere else in the country (only $77,000 for a Mineral Process Engineer ):

http://fortmcmurray.kijiji.ca/c-jobs-other-Mineral-Process-Engineer-in-Training-W0QQAdIdZ331670779

#46 Ozy - For LISA on 01.14.12 at 1:06 am

Lisa, God bless your soul! If I ask you what you’ll love more on this life, you arenot going to say MONEY. Some people are better off sticking with their priorities so far in live, as those produced the life-long hapiness so far. If you want to diversify your conscience into placing a higher value on money, you have to want/desire it bad. Once that happen, you will seek knowledge badly, will not sleep, etc and when you’ll be like that, information will be brought your way, then opportunities. Carry the momentum if this is what you realy want, or otherwise said: be self-aware what is that you want !

#47 Ozy - For LISA on 01.14.12 at 1:08 am

Lisa, God bless your soul! If I ask you what you’ll love more on this life, you arenot going to say MONEY. Some people are better off sticking with their priorities so far in life, as those produced life-long hapiness so far.
But, if you want to diversify your conscience into placing a higher value on money, you have to start want/desire it bad. Once that happens, you will seek knowledge badly, will not sleep, etc and when you’ll be like that, information will be brought your way, then opportunities. Carry the momentum if this is what you realy want, or otherwise said: be self-aware what is that you want !

#48 Pickled Lenin on 01.14.12 at 1:21 am

I am making $200,000 week in Fort McMurray, just lying here(and no ….I don’t work for Gov’t).

Keep the Proletariat Revolution going while I work on my tan.

#49 Nostradamus Le Mad Vlad on 01.14.12 at 1:23 am

-
My wife sat down next to me as I was flipping channels.

She asked, “What’s on TV?”

“Dust.”

And then the fight started
*
My wife was hinting about what she wanted for our upcoming anniversary.

She said, “I want something shiny that goes from zero to 150 in about 3 seconds.”

I bought her a bathroom scale.

And then the fight started
*
#276 Smoking Man on 01.13.12 at 7:31 pm — Hey there SM, you write neat stuff!

#277 GregW, Oakville on 01.13.12 at 7:36 pm — Hi Greg. Read about the scanners a while back. Thing is, now the US govt. created the TSA and DHS a few years ago, they have so far managed to arrest zero terrorists, but have caused plenty of grief to US citizens.

The dictatorship / police state is happening right under our noses, and there isn’t anything anyone can do about it.

#295 neo on 01.13.12 at 8:36 pm — “Things take longer to develop than anticipated, and resolve faster than expected…” — That’s it in a nutshell. Doesn’t matter what xpurts say, or what anyone thinks or believes, when the time is right (when least expected), the rug will be pulled quicker than anyone can say Jack Sprat.
*
“Lisa, my little sailor, abandon ship. If you’re hot to invest for an income stream, slap your extra income into a portfolio of preferred shares and REITs – the returns will be fatter and the taxes skinnier.” — That’s all you need to know, Lisa. You could also put the monthly income cheques into DRIPs.

The new ships will come in handy when WW3 kicks off. All the politicos can be signed up to serve. They are of no use at all here.
*
Recovery? Someone is having a joke on us; Cyber Attacks; Crude up; Miners and Gold; Greece; UK Taxman Not playing fair; Polish drivers better than English? Insider trading, Brit. style; Ongoing fiscal crisis. It ain’t goin’ away; Retirees / Boomers Ten worst states in 2012, and ten best states to raise a family. What our ten worst / best provinces? China’s FX reserves decreased.

Inflation; McDonald’s Overpriced? US Greek moment; God and Silver Did the silver bubble burst? SS going to shrink, like CPP / OAS / GIS; Topping 408%; Retail Mattress; EU – US – Iran Oil; GS on gold; CDS are still around, and more; Mass Downgrade Plus the Eurozone countries have told the youth to pack up and go home (no work); 20 Economically free EU nations; Catastrophic Failure But TPTB would benefit.
*
onemorething — Curries of all types. Damn, they’re good with rice! US – Iran Looks like they’re going in, and Costing us; The Disunited Kingdom If Scotland separates, the blue comes off the Union Jack; Chinese herbs and medicines; Globalists down under; Russian weapons ship arrives in Syria, and China; Bring Back The Draft?

#50 Smoking Man on 01.14.12 at 1:29 am

Note to self………….

Never go to Woodbine Casino on friday 13th

Ouch………Just blew 10% of the annual Canadian wage.

Too boot bartender only serves one drink at a time…..

Dalton may you die a painfull death

#51 Fifty Percent Correction Predictor on 01.14.12 at 1:42 am

“THERE IS NO MEANS OF AVOIDING THE FINAL COLLAPSE OF A BOOM BROUGHT ABOUT BY CREDIT EXPANSION. THE ALTERNATIVE IS ONLY WHETHER THE CRISIS SHOULD COME SOONER AS A RESULT OF A VOLUNTARY ABANDONMENT OF FURTHER CREDIT EXPANSION, OR LATER AS A FINAL OR TOTAL CATASTROPHE OF THE CURRENCY SYSTEM INVOLVED”

Ludwig von Mises

Folks, we are so screwed!

#52 DonDWest on 01.14.12 at 1:54 am

Halifax? Not in a bubble? Say what?

Exhibit A: Mortgage a parking ticket

http://www.realtor.ca/propertyDetails.aspx?propertyId=10874505&PidKey=439107641

650K for a 1500 sq. ft. “heritage” bungalow. View the video, they show the same room over and over on the 1st floor, mostly because the 1st floor is actually just one room recently renovated/sectioned off to make it look like there are more rooms. Lots of flashy granite counter tops I see to sex it up. And yes, you’ve read the description correctly. For 650K, you don’t even get to keep the garage. That’s already been sold to a complete stranger. So for 650K you get a 60 year old 1500 sq. ft. bungalow and less than a foot away is your “neighbour” who will no doubt turn this garage into a parkade in the Halifax downtown area. I’m actually farmiliar with this street, you can’t park on the side on weekdays. So you’ve essentially surrendered the right to own a car if you wish to put yourself 650K in debt.

Exhibit B: Generic McMansion Oversized Particus

http://www.realtor.ca/propertyDetails.aspx?propertyId=10362003&PidKey=-1315672806

1.6 million for what is essentially the most bland looking house at that price tag I’ve ever seen. I’m convinced the architect didn’t have a creative bone in his/her body. Sure it’s a mamoth at 4000 sq. ft., but I’ve seen oversized McMansions like these that are a dime a dozen all throughout the continental United States. They usually don’t sell at 1.6 million; try 300k to 500k. In California you can find them for 180k.

Exhibit C: Witness the Bubble Poping at the Seams. . .

http://www.realtor.ca/propertyDetails.aspx?propertyId=11148223&PidKey=1715214229

Housing bubbles pop from top to bottom. Less than a few blocks away from Generic Particus; for the same 1.6 million you can find a REAL house worth 1.6 million. A timeless 19th century Dutch colonial mansion. And instead of granite and plastic; you get marble and ivory. Architecture that puts Generic Particus to shame. A sign of the Halifax bubble poping at the seams? Perhaps.

Make no mistake Lisa, Halifax is in a bubble like every other major urban Canadian city. It’s not as harsh as Vancouver or Toronto, but at least there they have real jobs. Unlike our 12 to 15 per hour jobs bailed out corporations that are run by complete idiots; supplemented by our government. I think the low interest rates have you a bit confused. . .

Yes, there are some mysteriously cheap places in what are seemingly acceptable areas. That is until you ask around why it’s so “cheap.” Usually you’ll discover there’s a murder next door or perhaps there was even a body in the very house that’s “for sale.” It is Halifax after all. . .

#53 Van guy blazin kush on 01.14.12 at 2:06 am

Poco!!!

I’ve finally come around to look up those 3 condo units listed @ 1185 The High St. How did you find out the original sale price on these units? I couldn’t pull these numbers up.

#54 TheRealTruth on 01.14.12 at 2:30 am

#3 The truth

The name is trademarked. Don’t post under my name!!

#55 BC Boy on 01.14.12 at 2:43 am

Rates are going down! B
Buy before it’s too late folks.
Is the author of this blog renting? NO!
Don’t believe me, ask.

#56 Renter from Vancouver on 01.14.12 at 3:35 am

Hey BPOE, love your empty statements. This is about Canada not Vancouver. In case you haven’t noticed, whilst isolated from any form of common sense, this mediocre city it is still part of a country.

I have a friend whose house in flashy Shaugnessy has languished on the market for several months. His “investment” home in Whistler is getting listed for $300K less than he originally paid for it 2 years before the Olympics. All the same blocks of houses for sale on Cambie and Granville are not going anywhere.

All the new condos coming on line like Kits 360 and the Broadway, have no lines of people jumping each other in line. The restaurant business is choking (at least the handful of good ones), car dealers have “sales” for all the top marques.

I rent, a $3m home for peanuts. The landlady spent $180K renovating it before I moved in. I signed a further 2 year lease and got a rent reduction.

I work in the US as there are no jobs of value here in Vancouver. The handful of colleagues I have here earn 40-50% of what I make on the base and 10% on my variable.

Lest year I took some of my commission check of $150K and invested it in a software business on the east coast, which I built up as part time with the other partners. We just sold it and I took $300K after tax.

This I will re-invest $150K in another business and put the original $150K in my very well managed investment portfolio, which incidentally pays my rent 1.5X over.

I have paid no interest, property tax, realturd fees or anyone else fees for this – I made 100% return after adding real value to the economy.

I have no debt whatsoever and my money works for me. I have all the benefits of living where I want. This year’s commission check, cahsflow from the businesses I invested in and other yields, will be around $500K, which will get re-invested in additional financial instruments and businesses.

I sleep like a baby at night as I could live at my (with wife and 2 kids) present quality of life for over 15 years if I were to stop working tomorrow.

I have an opportunity to take up a CEO job in the silicon valley this year. I can pack my bags, leave a goobye note on the kitchen table and head straight down at NO cost – None! I’m sorry about not contributing the realturd income fund in that case.

Furthermore, guess what… I just sold a friend’s house in Kits to a greater fool who over extended himself. I am not a realtor and did your job. I negotiated the deal for my friend, kicked the buying realtor’s teeth in the negotiation (got asking as valued by some RE/Moron) and all for fun. You should have seen the effor they went into trying to scare him away from firing them.

I only wanted a courtesy dinner as payment (not a formal arrangement, he offered after the matter) to prove to him you don’t need realtards for conveyancing after I learned that in the UK.

You just go ahead and tow that party line. I would fight for your right to do that – we are in an open society where people are entitled to speak their mind, and people are entitled to make their mind up.

If one party lies and the other is too dumb/naive/lazy/reckless to not do their due diligence/risk analysis then so be it.

I sincerely hope you have managed your finances so that when the tide goes out, you have a plan because out it will go as it did everywhere else in the world and many parts of Canada.

Good luck to you!

#57 oslec on 01.14.12 at 4:08 am

#41 Waterloo Resident
______________________
I have university degree and a ticket from that “2-week course” you mentioned.
Guess what?? I was making that amount back in 1993. Guess which job paid me that?? It definitely was not the degree, and it was not even in FMM. Also the people that operate the SAGD plants in northern Alberta definitely make over 150Gs.

So aths a pewrsone wiff un Ai-Kui duh sithze op mhy thews, i twhink i mhake disenthe maney….

#58 Keeping the Faith on 01.14.12 at 6:49 am

Lisa,

Thank you for your letter and don’t despair about some of the notes you may get on this site.

Your plan is sound.

You should buy the investment property with your husband, it’s a great way to diversify and start to put something away for your young child and leave him/her a good gift later on.

As #22 Devore mentions today, 2.99% is the best you’re ever going to get from BMO, so housing is the cheapest it’s ever going to be and #25 zman has alluded to the fact that because rates are the lowest in history, it’s a good time for housing. It’s the time to take advantage of these types of opportunities. 2012 will be like no other year in history for Canadian housing and it will be a result of the incredible affect these rates will have on people like you buying, meaning prices will once again, continue to go up. As Scotia Bank has said ( I must add that Scotia is one of Canada’s trusted 5 banks that did NOT make mistakes like US banks in 2008) “You’re Richer Than You Think”. Most people read this statement but don’t have the appetite for risk like you and your husband to take advantage of this richness. A lot of people I know your age would be happy to have your net worth and would love to buy an investment property. They’re just not as rich as they think.

Being a landlord isn’t as hard as people believe. I’m sure you’ve heard of people like you and I, that have a few investment properties and how did they learn to be a landlord, well they had to start somewhere. You and your hubby can learn how to ‘landlord’ … if that’s even a job.

Good luck Lisa and my advice would be to make sure you don’t wait too long. In some areas there has been a small dip in housing that will definitely turn around in the spring and with this interest rate announcement yesterday, probably sooner.

Just remember the first rule of real estate, location, location, location.

Make sure you come back in 12 months and tell us how it’s going. I’m looking forward to hearing your successes.

Bonne voyage!

#59 Timbo on 01.14.12 at 7:06 am

http://nfbpsh.blogspot.com/2012/01/australian-banks-pulling-plug-on.html

You know the party is over when banks are refusing so called safe validations on real estate. Australia is in for a world of hurt.

http://www.economonitor.com/blog/2012/01/europes-road-to-nowhere-part-2/?utm_source=rss&utm_medium=rss&utm_campaign=europes-road-to-nowhere-part-2

European sovereigns and banks need to find Euro 1.9 trillion to refinance maturing debt in 2012, equivalent to around Euro 7.5 billion each business day.

Italy requires Euro 113 billion in the first quarter and around Euro 300 billion over the full year, equivalent to around Euro 1.5 billion per business day. Italy, Spain, France, and Germany together will need to issue in excess of Euro 4.5 billion every working day of 2012.

There seems to be a Billion ways to say that this is not going to end well people…..

#60 gardener1 on 01.14.12 at 7:20 am

Canada is building new warships?

I don’t find this to be comforting good news.

New warships=new wars. Yes?

#61 Habbit on 01.14.12 at 7:37 am

# 39 Prairie Dog LOL I’m still laughing. Best lines in a long time. Thanks

#62 mark on 01.14.12 at 7:49 am

Good to see when all these first time buyers are interviewed about the BMO low rates, the first thing out of their mouth is, “i can now look in a higher price range.”

Sheesh.

#63 Young Old Fart on 01.14.12 at 7:49 am

#5 Josef on 01.13.12 at 10:20 pm
First!!! Oh Yeah BABY!!!!! Had to hit the refresh button for an hour.
===================================

Considering you finished in 5th….. That’s an hour you will never get back….. What a goof!

Who to believe…..who to believe….. I read a report from someone who apparently predicted the crashes of the 90′s and 2008 who states it will happen again this year and that we should bail on stocks…..

Garth says we should load up on stocks…. (the right ones, of course).

One thing is for sure…… Someone will be right!!

As for me, I am finishing my last RE deal here in South America before coming home. While numb nuts was hitting his refresh button for an hour last night, I was haggling the price on my last piece of commercial I wish to sell in this current rising market down here. My “facilitator” said 1.5 and I said 2mil. It will be 1.75 but that is moot. This bundle will be going into laddered GIC’s and REIT’s. Now I know Garth just snorted out his morning Amazon Yerba Mate tea, but the interest rates and taxes here are more favorable for that type of investment……

As to the topic posted, I continue to state the obvious….

You cannot fix stupid!

Oh, and #42 Ian? I had family murdered during the times you mention. You have no idea what you are asking for………

#64 House on 01.14.12 at 7:54 am

What about good old Sal Guatieri also of BMO quote housing is “a balloon not a bubble”.

#65 Newbie Investor on 01.14.12 at 8:43 am

Having dinner with two couples my wife and I know, I was shocked to hear both of them complaining that if they were to sell today they wouldn’t break even. You should have seen the despair in their eyes, the shock that yes even in Alberta housing is not always the golden nuget.
These are two of the many couples that have chastised me and my wife for renting! Even some of the sheeple are starting to see the error in their ways, you can see it in the whites of their eyes. This will not end well indeed! KEEP WRITING!

#66 Buyright on 01.14.12 at 8:46 am

From GARY SHILLING well respected economist

“If You Plan to Sell Your House, Second Home or Investment Houses Any Time Soon, Do So Yesterday”

http://www.businessinsider.com/gary-shilling-2012-themes-2012-1#if-you-plan-to-sell-your-house-second-home-or-investment-houses-any-time-soon-do-so-yesterday-12

3. Bet against commodities (Canada in the short term)

Not surprisingly, Shilling is bearish on commodities. “It’s a market not priced for realities,” he said.
Commodity bulls may call the slump in energy and agriculture prices a midcourse correction and contend that China’s continued growth will buoy these markets. Shilling said that line of thinking reminds him of Wile E. Coyote in the Road Runner cartoons, who doesn’t realize he’s run off a cliff until it’s too late.
“The fundamental argument for the commodity bubble, and it is a bubble because so many non-commodity users are involved, is that China is going to buy like there’s no end in sight and continue to do so,” Shilling said.
But a global recession and miserly U.S. consumers will take a toll on China’s economy. As China’s growth declines, Shilling said, so will its appetite for commodities.

#67 nsqt on 01.14.12 at 8:52 am

Glad to see reference to Nova Scotia in the blog…..Even more elated to see the comment about the new navy ships being built here…….I think that a lot of people here in NS are counting on this contract to “save” NS….once it gets up and running I can see a mini “frenzie” happening in the housing market not realizing they are setting them selves up……after all 30 years go by very fast….

#68 yorel on 01.14.12 at 9:13 am

Nova Scotia has an NDP government and they are still in trouble. Shocking!

#69 Herb on 01.14.12 at 9:46 am

Found this link on the FB page of an American fellow member of a photography group:

http://agendadocumentary.com/trailer/

I am not facilitating further distribution. I am asking everyone to view it and ask who would push such propaganda, and for what purpose. Is it domestic partisan politics, or manipulation for strategic ends? What of the mentality of people who see it and actually believe it. And what does it tell us about whoever made and distributed the movie in the expectation that it would make converts to the ‘cause’?

The implications are frightening! And I need no steenking conspiracy theories to be frightened.

#70 Herb on 01.14.12 at 9:49 am

#58 Gardner 1,

naw, not built for new wars, but to replace ships pushing or pulling their best-before dates.

#71 Beach Girl on 01.14.12 at 10:06 am

Haven’t been here for a while. I have always owned rental properties. It is not that difficult. One needs a tough outer shell. And enough financial backing to weather out bad times.

However, since I have no mortgages, only LOC’s, which I pay interest on only, which is tax deductible, I am wondering when the BMO is offering 5 years fixed at 2.99, TD at 2.99 for 4 years fixed. (Not that I want any of these products) Does that mean the prime is coming down?

Well Garth the Guru, answer please.

And I want a version of your Amazons in the male form. I am entitled.

Dear Herb, the love life was going wonderful, till we went out for fish & chips. You lulled me into a false sense of security. Suggesting I had him hook, line and sinker.

I have not nailed down this Wiley Coyote.

#72 Beach Girl on 01.14.12 at 10:16 am

#316 Cookie Monster burnin’ Kus on 01.14.12 at 5:52 am

Guy1, calling your premise ridiculous was not mud-slinging at all, it was a logic bomb making the point that it’s pointless to argue against a religious position using reason and logic because by definition a religious position is irrational whose premise requires a leap of faith from the realm of reason and logic to the realm of the unreasonable, unknown, unknowable and supernatural.

I believe Jesus Christ was just crazy, could you imagine someone walking around today claiming to be the son of God? What would people think? Aren’t we all children of God? Why was Jesus the son of God and not us, why not everyone? Maybe Mary was a frisky vixen and lied to Joseph. And what a lie it was! First proof of if you’re going to tell a lie, make it a big one!

See, a lot of crazy questions that require a lot of crazy answers.

___

If I met a man who could turn water into wine, crazy or not, I’m on board. Forget the fish.

Stayed out too late, last night. Where’s Jesus?

#73 sam.i.am on 01.14.12 at 10:22 am

DonD: Halifax area is in a total bubble. But, the properties in your post are in locations where the prices have always been far above the mean. Anything on the Arm side of the CN rail line is in the stratosphere guaranteed. Any property with a pre-confederation water lot more so. South of Quinpool has always carried a premium with values going higher the farther south you go. This is common knowledge.

In HRM it takes two fulltime incomes bringing in a total of around 125k for a young family just to get by. I think Lisa’s situation is typical for families with young kids. Most disposable income goes into housing, food, transport, and child care leaving little for savings.

My own observation visiting Halifax last summer was that people have lost their financial minds. 400k houses the norm (mind you they are nice) and new cars in the driveway. The lulemon store had a lineup – I looked at the prices and walked out.

Don, Halifax is not a place to make money. If money is important to you, odds are you won’t find it there. Figure out a way to go where the money is and then come back when the time’s right.

#74 gmc on 01.14.12 at 10:40 am

Hey should those real estate dudes not be accountable, or are they just going to cry that they did not see it coming, many things are coming and the housing fiasco is one but a small nail in the coffin. MF global was an wake up call, just like 2008, remember Northern Rock, I do. The fact remains nothing was fixed!!!!!! The USA has to increase their dept limit again OUCH!!!! and Canada is going to be a victim to it’s neighbor folly.
Here is a famous quote that scares the pants off me.
CAN ANYBODY REFUTE THIS CLAIM

And the same thing applies in Canada to Canadian brokerages and Canadian stocks. The Canadian economy is intricately tied to the US. In fact, not many people are aware, but all that backs the Canadian dollar is the US dollar. The Canadian Government sold all its gold decades ago.

The entire monetary & financial system is headed for its final destination – total collapse… and 2008 was just the beginning.

“If you were lucky enough not to be a customer of MF Global … then you should view the MFG episode as a warning shot. You might not get another warning shot.” -Steven Saville, The Speculative Investor

One Last Bubble?

But, we’ve been predicting there are still a few more years left… not 10. But maybe two to three more years… or a little more. We believe the Federal Reserve and all western central banks will print enough money to get the system through for another few years… just enough for them to get out of office and retired to their Caribbean island villas before all the western fiat currencies enter hyperinflation.

And, we believe this will create one final bubble. The tech bubble is dead. The housing bubble is dead. And the bubble in government debt is in its death throes. What will be the final bubble? It will be in gold and silver mining stocks.

#75 eaglebay - Parksville on 01.14.12 at 10:45 am

#64 Buyright on 01.14.12 at 8:46 am
From GARY SHILLING well respected economist
As China’s growth declines, Shilling said, so will its appetite for commodities.
———-
Shilling has been wrong as much as he’s been right.
China is growing at only around 9%.
Wow, what a disaster. 1.3 billion people.

#76 Randy on 01.14.12 at 10:58 am

“Once China slows considerably over the next year, both these resource based countries (Canada and Australia) will finally see their real estate bubbles burst.” ?

#77 Josef vs Turnernation on 01.14.12 at 11:08 am

Josef – give up, your turnernation buddy has you beat. He has an app that refreshes automatically and then he swoops in. At least I hope he does, because if not he’s a bigger loser than even you. Garth, how about checking how many times our friend TurnerNation accessed your blog from the same IP before your latest post? I’ll bet my left nut that the refreshes are periodic and automated. Turnernation, get a life. No one is impressed with your infantile showboating over your D&D buddy Josef. And if you haven’t heard of D&D, you’ve proven half my point, though you do fall into the same category, albeit a generation or three separated.

#78 rower on 01.14.12 at 11:12 am

Wow, Garth, that was a nice and gentle lesson on finances you gave to Lisa (and others).

It is nice to see your soft side every now and then. It balances out your wonderfully wicked sense of humour.

#79 lawboy on 01.14.12 at 11:25 am

DonDWest

For 650K, you don’t even get to keep the garage. That’s already been sold to a complete stranger. So for 650K you get a 60 year old 1500 sq. ft. bungalow and less than a foot away is your “neighbour” who will no doubt turn this garage into a parkade in the Halifax downtown area.
……

No. That’s not what that notation on the mls listing means. It means that the garage was built partially on CN land that the homeowner did not own and hence could not sell to the purchaser. So the seller has recently purchased the land from CN so now s/he has clear title to the whole property, including the land under the garage. Likely the survey doesn’t reflect this yet and the seller wants to be clear that the land is all his/hers to sell.

#80 Devil's Advocate on 01.14.12 at 11:29 am

Some clues 4 U:

1. Buyers don’t buy in a buyer’ market because they fear prices might have yet further to fall. Buyers do buy in a seller’s market because they fear that if they do not they will be priced out of the market forever.

2. Seller don’t sell in a seller market because they fear prices might rise yet further. Seller’s do sell in a buyer’s market because they fear if they do not they might end up chasing the market down.

3. The good news is the commonality of both buyer and seller in their actions driven by fear and greed is never so prevalent as it is just before a market shift is about to take place.

4. A stable state of market equilibrium is but a fleeting moment of transition from one market condition to another.

5. Any who are actually in the market today looking to buy know well that single family residential listings, after you remove all that you simply would not consider for reasons other than price, are not so plentiful as they say.

#81 james - not all realtors alike on 01.14.12 at 11:38 am

Garth
i have been a real estate agent for approx. 23 years now and have been warning buyers for some 3 to 4 years that impending corrections are coming. It has affected my income, however luckiny investments since 1986 onward during the boom years were successful and I am cashed out mostly in the past three years. It’s hard to sit on cash but the shift will come like it did in 1989 to 1994 when prices dropped 30 percent in many cases.
I have asked people if they would rather pay 2 % mortgage rates or 14%
Then I tell people I would rather pay 25% interest rates and they look at me like I am nuts.
It is simple really, a house that sells for 1 million at 2% will only sell for $100,000.00 or so at 20% interest rates. People use their incomes and make buying assumptions based on affordability related to carry costs. The best example of this is investment properties. In the 1985 interest rates were 14% and investment properties were based on a 11 to 14 % return on investment and priced accordingly. Now those same assets are based at sub 6% ROI so the same property soars in value based on interest and perception alone.
When this economy shifts and all the lemmings are falling off the cliff so will all the assets values. And as everyone tries to dump their assets there will be a shortage of buyer, a credit crunch and a lot of fools losing everything they dreamed of.
This market has to correct – people with the aid of banks have used their respective homes as ATM’s for too long.

#82 Jamaican_Gal on 01.14.12 at 11:42 am

#5 Josef on 01.13.12 at 10:20 pm

“First!!! Oh Yeah BABY!!!!! Had to hit the refresh button for an hour.”

Wow! This pathetic, over-sexed blog has finally arrived. We now have our very own VIP…(Village Idiot Person).

#83 Deano on 01.14.12 at 11:51 am

#31 Biotech Guy

Research has shown that the quality of the teacher matters much more than the perceived quality of the school. If your kid is in the academic stream, 99% of all high schools will serve him/her just fine. In fact, having taught in a “core” high school before, you tend to find that the teachers of academic students in those schools go the extra mile (or ten!) with the academic students, as they’re grateful to teach responsive and respectful kids. Something to think about anyway.

#84 Devil's Advocate on 01.14.12 at 12:06 pm

RELIGION AND REAL ESTATE

While I know most off topic, I am exceedingly pleased with the exchange of thought between Cookie Monster burnin’ Kus and Guy1.

Could there be any simile between that debate and that of real estate? I think maybe so as one is founded on supposition and the other facts. Bringing Adam Smith into the equation was most certainly a climatic moment as that conversation approached economic analysis of the motivation behind human action.

And is the economic state of real estate not a consequence of human interaction and decision making?

Why we do what we do is fundamental to everything we might or might not do?

While Cookie Monster burnin’ Kus argument is more pragmatic that of Guy1 must also be considered for the sheer volume of those who adhere to the same dogma and thus have great influence over the markets. Each is poignantly demonstrative of two diametrically opposed approaches to real estate; that of emotion and that of logic.

So maybe that interchange between the two, proudly I boast prompted by me;-) is of value to the readers of this “pathetic” blog if they take time to contemplate it’s possible application to the discussion of what drives our markets for really is it that much different?

#85 GregW, Oakville on 01.14.12 at 12:08 pm

Hi Garth, This sounds interesting. Someone may be interested?

“The question of how much what we claim we know is the actual truth has been with us for time immemorial. The recognition that truth is “out there” and that path to it is either difficult or impossible marks most of human history.

There is a reason why monotheistic religions proclaimed God as the repository of all true knowledge. There is a reason why Plato’s cave is still seen as an apt illustration of the divide between those who know and those ( majority) who think they know. There is a reason why Freud’s notion of the unconscious – despite all the controversies surrounding psychoanalysis – was a crucial reminder to generations born after the age of Enlightenment that reason and scientific method does not encompass all that which is crucial to a deep understanding of who we are and why we behave the way we do.

Enter David Brooks; the New York Times columnist and the author of the recently published “The Social Animal”. The book offers offer a wide array of new scientific evidence which Brooks marshals in order to point out that human beings are by no means rational, calculating agents of their own self-interest. The intriguing question is how would we govern ourselves, how would our politics be affected, how would we change if we recognized the scientific truths increasingly revealed by neurology and other cognitive sciences? ”

BIG IDEAS airs on TVO every Saturday and Sunday at 5:00 pm. To download our podcast, please go to our website http://bigideas.tvo.org/

#86 City Slicker on 01.14.12 at 12:28 pm

Since Japan is best known for the “lost decade” does anyone know how the RE market performs there considering it’s ultra low interest rates for such a long period of time? Any anecdotal evidence to bring to the table?
Thx!

The residential market lost between 40% and 80% of its value, and never recovered. Low rates did not stimulate investment in the absence of economic growth. — Garth

#87 DonDWest on 01.14.12 at 12:33 pm

#73 sam.i.am

I’m well aware south of Quinpool has always been outrageous. Snobby old money from around the globe where traffic is a disaster because these little darlings don’t want too much noise; therefore we don’t build an adequade double lane main street.

What I’m trying to bring across with my “Halifax bubble” posts is that many of my friends believe they can flee high housing prices by nesting in Halifax. They honestly believe Halifax is the “new frontier,” lol. I know for a fact many of them read this blog. My point with the ridiculous South End prices is I’m trying to convey that Halifax has it’s “Richmond areas” too that subsequently rise the prices to silly levels all around the area. This results in the 400K for a North End, ghetto-hood, bungalow or semi you spoke about earlier.

And the sad truth of the matter is I highly doubt this couple lives in Halifax at the price stated of their current home. Even if they bought it 5-6 years ago. They lied about their geographic location for some reason or another; perhaps to save face, I don’t know. My guess is they live in either Sackville or Herring Cove. There are some adequate subdivisions in downtown Dartmouth that you could have had for that price five years ago; if they lucked out.

As for the average Haligonian household having too many cars; I couldn’t agree more. I often see 3-4 cars per lot. Usually they are “low end” sports cars such as civics, lancers, mustangs, etc., but with the cost of living in Halifax people shouldn’t be buying sports cars at all. My guess is these 3-4 cars per lot may actually be extended families. People in their 20′s can’t afford to move out of their parent’s home unless they want to live like a college student for life (and they all have tons of student loan debts). Seeing that our public transportation is horrid, they have to own a car to drive to their minimum wage jobs. Instead of paying off a mortgage or rent; they essentially pay off a car payment instead.

As for moving elsewhere in Canada, not really an option. I don’t have a college degree, so I would have to find a job the good old fashioned way the moment I move into another city. It’s very dangerous to move anywhere in Canada right now (mostly because of rent costs) unless you already have a job lined up.

#88 CoW Man on 01.14.12 at 12:35 pm

# 8 abraxas

Thank you for the tip on VGK. I think Garth must have mis-read your recommendation and did not recognize it as an ETF
https://personal.vanguard.com/us/funds/snapshot?FundId=0963&FundIntExt=INT

.19% MER and blue chip high dividend payouts. Great for TSFA as foreign dividends will not be taxed

Thank you. Tips like these make my day.

#89 Kris D. on 01.14.12 at 12:36 pm

Garth, 2 comments:
1. Isn’t this site moderated? How do posts about religion & other irrelevant topics make it thru?
2. Does your book come in e-book version? (Consider it – This Xmas had record sales for Kindle/Kobo e-readers)

1. I have a light touch when it comes to approving comments. Actually there is a connection between real estate and evangelical Christian wingnuts (I will address this when I finish my weapons training). 2. Yes, the next will be digital only. — Garth

#90 DonDWest on 01.14.12 at 12:39 pm

And btw, I hate to state the following, but Garth as far as Halifax goes, 70K in savings is a winner for a young family. Most people here do not have any savings so to speak. I once read the local paper where CIBC claimed 76% of it’s clients in Halifax were two paychecks or less away from overdraft.

People in the forties are not exactly ‘young,’ plus these folks have savings of 70K and LOC debt of 40K. If you net just $30,000 in liquid wealth at 40, you’re a failure. Having friends in the same boat means you need more friends. — Garth

#91 Herb on 01.14.12 at 12:48 pm

#71 Beach Girl,

I had noticed that you’ve been missing for a while and thought that it might have been because you were ‘in action’. You never reported on the heavy date, but it does sound like your heart flew away on wings of chicken. So what was the problem with the fish and chips?

Remember, good things take time. And leave poor Jesus alone. He’s not responsible for what was attributed to him by later writers.

#92 kilby on 01.14.12 at 1:04 pm

Was talking to a stock broker who is renting in Vancouver waiting for better times, we were talking about the new 2.99% 5 year mortgages. Another guy in the gym was a realtor, he said that the only ones going to be getting that rate were people with really good credit ratings and that a lot of people going for those would likely walk out with a rate somewhat higher…..

The realtor was also a renter, he pre bought a condo in Yaletown in 2004 in the mid $300′s, took possession in 2007, kept it 3 years and sold in 2010 for $560,000. The current owner is now trying to get out but can’t sell. This is the second realtor in two days I have talked to that is renting, says a lot.

#93 poco on 01.14.12 at 1:07 pm

Rental properties fare no better in a downward market

listed in July 2010–579.9k—now sits at 499k
http://www.realtor.ca/propertyDetails.aspx?propertyId=11124921&PidKey=-1560735774

was listed in Aug 2011–550k–dropped to 539k–529k–519k now at 500k
http://www.realtor.ca/propertyDetails.aspx?propertyId=11463492&PidKey=-668434055

beware dear Lisa

#94 popeye the sailer man on 01.14.12 at 1:19 pm

5/40 mortgages are starting to come due for renewal. This may explane the new lower rates so the banks can kick the can down the road and get the last of the fools in insured by chmc. In my 2006ish area listing have swelled. 2012 will be intresting!

#95 City Slicker on 01.14.12 at 1:35 pm

Since Japan is best known for the “lost decade” does anyone know how the RE market performs there considering it’s ultra low interest rates for such a long period of time? Any anecdotal evidence to bring to the table?
Thx!

The residential market lost between 40% and 80% of its value, and never recovered. Low rates did not stimulate investment in the absence of economic growth. — Garth
———————————————————-
Thanks for the straight answer Garth that makes sense. I tried to google but couldn’t find anything concrete on it.

#96 Westernman on 01.14.12 at 1:39 pm

Herbie@#90,
For god’s sake man, don’t encourage her to report on something like that… we’ve got pretty strong stomachs on this blog but that is just too much don’t you think?

#97 a prairie dawg on 01.14.12 at 1:43 pm

#58 Keeping the Faith

Stop being a Realtard© and pushing the sales during a bubble. You also don’t know jack about diversification either. Buying more property is not diversification, it’s concentration within 1 sector. You’re not helping Lisa at all. You’re part of the problem.

Scroll down to #81 to see what a Realtor with morals sounds like…

This is what your profession demands of you. And it’s also what you owe your clients.

#98 sam.i.am on 01.14.12 at 1:46 pm

I think DonD is keepin’ it real. A lot of late 30′s early 40′s got hit hard by the 1990 recession and delayed marriage, homes, kids, and savings till late 20s or early 30s. I did not get my first real job till age 28 and I am not atypical. It isn’t surprising to me at all that early 40 yr olds have low nominal savings. All the advice about saving x% of every pay is great, but when faced with un or underemployment while at the same time trying to build a life it’s pretty hard to get ahead of the curve.

Another observation… how many women (or men) have had a kid and gone back to work ahead of the 1 yr ei allotment? I know of several and it’s always about the money. Tells me those families really NEED two incomes.

If you have less than 50K at age 40, how do you expect to finance a 25-year retirement starting two decades later? ‘Hi there. Can I get you a buggy?’ — Garth

#99 TurnerNation on 01.14.12 at 1:46 pm

Crazy thing I heard this week:

“But renting is just throwing your money away” (when talking about over priced Toronto condos).

And, a receptionist getting a 50k 1yr low interest rate on credit card and using money for home renos.

#100 Junius on 01.14.12 at 1:49 pm

#69 Herb,

That fear mongering video is one of many produced by the christian right in the US. It demonstrates their consistent approach of branding everything that is bad in society to progressives and their social changes. It brands them as naive and the “useful idiots” of a darker more sinister movement of godless socialism (the Devil).

This is very standard stuff in the reactionary Right of the US. Note the intro from Reagan is at least 40 years old.

The reason for these productions is clear. People who seek simple solutions to complex problems break the world down into bite size pieces they can easily digest. They create simple paradigms and label everything so that it fits neatly into a mental box. If something doesn’t fit they just ram it in with a “noble” lie. Then they sell it with what works best usually Fear or Greed. In this case, Fear.

#101 Omni Chaparala on 01.14.12 at 1:57 pm

A picture is worth a 1000 words and this picture is a worth 2000. What a silly idea. :)

#102 poco on 01.14.12 at 1:58 pm

#53Van guy blazin kush on 01.14.12 at 2:06 am
Poco!!!
I’ve finally come around to look up those 3 condo units listed @ 1185 The High St. How did you find out the original sale price on these units? I couldn’t pull these numbers up.
____________________________________________

Ask a guy like:
#81james – not all realtors alike

if the listing agent won’t tell you –go on to the next–like i said bullsh*t the bullsh*ters

#103 Beach Girl on 01.14.12 at 2:01 pm

#90 Herb on 01.14.12 at 12:48 pm

#71 Beach Girl,

I had noticed that you’ve been missing for a while and thought that it might have been because you were ‘in action’. You never reported on the heavy date, but it does sound like your heart flew away on wings of chicken. So what was the problem with the fish and chips?

Remember, good things take time. And leave poor Jesus alone. He’s not responsible for what was attributed to him by later writers.

___

Herb, I value your advice, since you are unattainable.

Actually, The man in question is too much of a gentleman, if you get my drift. Yes, the snow is shoveled religiously, he converses via telephone with 1 of the idiots. But alas, this is moving too slowly for me. Advice?

Yes, chicken wings every Wednesday, fish & chips on Friday. I would love to reciprocate, but he probably only wants a pot roast.

#104 Beach Girl on 01.14.12 at 2:03 pm

Herb

Have never had a relationship based on food?

#105 Pat on 01.14.12 at 2:06 pm

For a metro area with many apartment/condo buildings, it’s very easy to notice the bubble by comparing the rent and sale prices of these units, since one find identical ones.

For Halifax, there is an abundant supply of condos in the downtown area that go for $350 to +$500K for 2b/2b units. Add to this condo fees, and so on… At the same time, similar units in the very same area rent for $1,100 to $1,500 with all utilities included.

#106 a prairie dawg on 01.14.12 at 2:09 pm

#71 Beach Girl

I am wondering when the BMO is offering 5 years fixed at 2.99, TD at 2.99 for 4 years fixed. (Not that I want any of these products) Does that mean the prime is coming down?

- — -

Those dropping fixed rates are a direct result of the run on Canadian Government bonds. There was a big rally on them as foreigner investors sought safe haven. Rising bond prices push the yield down, which correlates to lower fixed mortgage rates.

Just remember this:

Bond yields influence fixed mortgage rates.
The Prime rate influences variable mortgage rates.

And they don’t necessarily do the same thing at the same time. The Prime rate is determined by Central Bank policy.

#107 TheRealTruth on 01.14.12 at 2:14 pm

This blog is crazy!! Just like the RE market in Vancouver and Toronto… Gov policies have, and continue to, distort the market tremendously.

Garth, if Gov and their policies were returned to the ‘historical average’ or ‘mean’, house prices would fall 50%!

Forecasting only a 15% initial decline makes it seem that the gov CAN do things in the future to keep the market propped up indefinitely. Otherwise, why would anyone invest in RE including multi-family rentals?

#108 Pat on 01.14.12 at 2:31 pm

More about Halifax.

A lot of the houses in the metro area are old and require a lot of maintenance (and high heating costs). In the summers the city is bustling with renovations – every other house seems to be painted, re-roofed, re-windowed, re-sided or something else. It never ends.

Regarding the shipyard contract – how naive can people possibly be? During a recent visit, whenever the conversation turned to real estate, I’d hear a comment how the prices will go up because of the ships. Yet nobody seems to have an idea how many and what jobs the contract will bring.

Regarding the shiny cars on the streets, it also always makes me wonder. When I compare the incomes, the RE prices, the hosing costs (price, maintenance, heating, tax deductions…), the income and sales taxes, and the prices of every thing else – cars, electronics, food, cell phones, books, you name it, between Halifax and any mid-size US town – where do Haligonians find money for this lifestyle?

#109 Devil's Advocate on 01.14.12 at 2:41 pm

#106TheRealTruth on 01.14.12 at 2:14 pm
This blog is crazy!! Just like the RE market in Vancouver and Toronto… Gov policies have, and continue to, distort the market tremendously.

Garth, if Gov and their policies were returned to the ‘historical average’ or ‘mean’, house prices would fall 50%!

Forecasting only a 15% initial decline makes it seem that the gov CAN do things in the future to keep the market propped up indefinitely. Otherwise, why would anyone invest in RE including multi-family rentals?

Could not the same be said of population growth considering in all of man’s existence (with all due respect to the ladies who without of course it would not have been possible nor tollerable). The last 100 years has seen his numbers increase from 1bil to 7bil? Maybe there is another clue in there?

#110 Pat on 01.14.12 at 2:46 pm

If you have less than 50K at age 40, how do you expect to finance a 25-year retirement starting two decades later?
— Garth

When in their 50′s and early 60′s, the kids will be raised and at the same time their earnings are expected to be highest. The retirement should not start at 60. What’s wrong with working when you are healthy?

#111 Timing is Everything on 01.14.12 at 2:46 pm

#50 Smoking Man…FYI

Any month that starts on a Sunday will have a Friday the 13th…

friggatriskaidekaphobia

http://tinyurl.com/7tlm6kr

#112 Corban on 01.14.12 at 2:48 pm

@Waterloo Resident

My power engineer roommate from my days at SAIT is making just shy of a quarter million a year (week in, week out). I bet he could probably hit 300k if he worked all the overtime available. Not bad for 16 months of school.

#113 Ronaldo on 01.14.12 at 2:50 pm

#81 James – “It is simple really, a house that sells for 1 million at 2% will only sell for $100,000.00 or so at 20% interest rates.”

Great post. Your right James, its not that complicated is it?

#114 Herb on 01.14.12 at 2:55 pm

Beach Girl #102/103,

have never had a relationship based on food. The only role food has played in my relationships (before marriage!) was as a sort of preliminary to closer encounters. If I read you correctly, the closer encounters have failed to materialize.

Obviously the man has some interest in you or he would not lavish chicken wings and fish-and-chips on you. Do try the pot roast. If nothing happens after that, consider the possibility that this cat is a closet metrosexual, not a mere gentleman. I mean, even gentlemen have been known to fall into lust.

You may have to resort to seduction to find out for sure. And I’m not unattainable; I am not free by any means, but I’m reasonable.

#115 Oh Canada on 01.14.12 at 2:56 pm

The S&P just downgraded another 9 Euro countries, the USA is in the dumps, Australia has cracked…
You honestly think Canada is immune to the world’s debt problems? The bubble here will just continue to inflate?
Your living on borrowed time. Wake up Canada!

#116 Ronaldo on 01.14.12 at 3:04 pm

#86 City Slicker – this link is very informative on the Japan housing bubble.
http://en.wikipedia.org/wiki/Japanese_asset_price_bubble

Regarding previous post about RBC CEO selling shares. He was exercising his options for a nice 24% gain. Record shows he still has 679,416 shs. I personally dumped my RBC shares in January of last year at $53.60. Still exposed via ETF’s and other funds but felt that with the current situation in the housing market, was a good time to sell and take profits.

#117 maxx on 01.14.12 at 3:06 pm

#1 TurnerNation on 01.13.12 at 10:12 pm

Quite right.

Why else would banks now open shop on Sundays? Why, so all of the ripe little kitchen table weekend RE discussions and tête á têtes result in piling on more debt. Debt is sooo yummy and profitable to chop-licking banksters. Every single cent that can be creatively sucked from your account will be.

RE has morphed from obsession into a national illness. It is a virtual virus.

#118 Devil's Advocate on 01.14.12 at 3:08 pm

#96a prairie dawg on 01.14.12 at 1:43 pm

Might not somewhere in between the opinion of # 58 Keeping the Faith and that of #81 james – not all realtors alike, be the correct path a “professional” REALTOR® should take as neither are necessarily wrong nor right as ultimately it is the client’s own decision. A “professional” REALTOR® should offer information that their client can come to an informed decision that is best for them. There are some other aspects to this Lisa’s proposal which are best addressed by an accountant or lawyer and/or financial planner. So at this stage it would be premature and irresponsible for any single person to say with any certainty what might be best for Lisa. Ultimately she must make that decision herself but if she is wise she will seek a wide and diverse counsel before doing so.

I can certainly understand though and appreciate where your biases lay. and given that suggest that while you are not necessarily wrong and have every right to express your opinion all three of you are playing the forecasting game which could just as well prove wrong as right.

Lisa, only fools rush in.

#119 TurnerNation on 01.14.12 at 3:14 pm

Some good news for smoking man. And the Ford regime is 100% behind expoiting some of society’s fringes for a buck – gambling addicts, drunk gambling addicts, and so on.
And, Ont Premier Dolton McGuilty just rasied booze prices again. The ‘mob’ (government) runs the booze racket.

Toronto Casino on the Way?
Toronto/Am640 News
1/13/2012

The Ontario Lottery and Gaming corporation is is pushing for a casino in downtown Toronto that would be their most lucrative gaming site.

They’re hoping that with the province looking for new sources of revenue that this might be an ideal time.

The Mayor and Councillor Doug Ford both support the idea if the public is behind it.

While it’s only speculation, the chair of the city’s economic development committee Councillor Michael Thompson says the city owned CNE or Ontario Place have long been considered potential sites for a casino.

#120 poco on 01.14.12 at 3:16 pm

for those that think the buyers who took out 40year mortgages 5 years ago are screwed you better do some math–with these lower rates if they qualify for 25 year term their payment will be less than they are paying now on a 40 year amm—
5.8% on 200k-40yr–compare with 3% on 200k–25yr
do the math

#121 Cato on 01.14.12 at 3:29 pm

For Lisa and others its never too late but its going to be hard. Rate of return in all asset classes will be marginal. The easy money was made riding last wave of economic expansion, its going to be a long time until we see another.

Government spending doesn’t create economic growth, it simply robs growth from one sector to give to another. I highly doubt spending commitments made over the next 30 years will be honored anyways. Witness how quickly the liberals killed the Cormorant helicopter contract. Most of the existing fleet isn’t even operational due lack of manpower. In time of war it would take far longer to train new recruits & promote leadership than build ships. Makes you wonder what the purpose of building out a fleet which will sit idle. If we don’t intend to man the fleet then the whole exercise just becomes a make work project on backs of others.

Lisa has one choice. Make saving a priority. Sit down with a financial planner and make hard choices (avoid the drones working at the big banks). It starts with picking a realistic retirement age based on working as long as possible. Pick a realistic retirement number – for most its minimum $1.5-2M. Factor in a 4-5% investment rate of return for the foreseeable future. Come up with the savings rate needed to reach retirement number. Save yourself before its too late.

#122 Herb on 01.14.12 at 3:36 pm

#99 Junius,

I traced the link to the Tea Party of Wetumpka Alabama, which bills itself as “a vibrant arm of a much larger nationwide grassroots movement …” and no doubt got the link from there. If this really is what the Tea Party is all about, look out. They will wag the Republican dog quite successfully and skew US politics even more. How can Americans fight a party that merely shouts from the rooftops what they pay lip service to? How do you convert political Zombies to reality? And how do you stop this brain-eating madness from spreading to Canada?

#123 a prairie dawg on 01.14.12 at 3:43 pm

#110 Pat

When in their 50′s and early 60′s, the kids will be raised and at the same time their earnings are expected to be highest. The retirement should not start at 60. What’s wrong with working when you are healthy?

- — -

Simply this:

Waiting until you’re 50 to start saving for your future is a HUGE gamble for anyone, because you cannot guarantee that you’ll still have your health at that age, much less beyond it.

And assuming your livelihood will still be there 20 years later is a big risk too.

Illness, physical limitations, outsourcing, layoffs, relationship breakups, economic inflation, and many other factors can develop that you can’t predict 10-20 years in advance.

If you’re going to have kids, you should start planning for your retirement needs and/or their educational expenses, shortly after they’re born.

The longer you wait on either one, then the more risk you assume.

#124 TurnerNation on 01.14.12 at 3:51 pm

#21Mister Obvious on 01.13.12 at 11:25 pm

That’s right. We are fiddling while Rome burns. Blog dogs know what is coming, and we’ve already prepared. Nothing to do now but make small talk.

We come here to focus on the importants: bikes, babes, and balanced portfolios.

(Disclosure: cager here).

If there’s one thing learned from Nonna Nicola, it’s that land is important. All those $600/sq foot rat-boxes in the sky will suffer.

I’m expecting the stocka marcata bottoming in March. Will move $5k into TFSA at that time.

#125 a prairie dawg on 01.14.12 at 3:52 pm

#118 Devil’s Advocate

A “professional” REALTOR® should offer information that their client can come to an informed decision that is best for them.

- — -

That is exactly what I was alluding to. Ethics.

#126 TurnerNation on 01.14.12 at 3:53 pm

p.s until the US 20yr bond Etf symbol TLT sinks back to 100 or below (currently, trading at 2008 crash highs – $120+) we ain’t bottomed.

#127 jess on 01.14.12 at 4:01 pm

Why would one be envious of bid rigging or fraud. Look back at the many examples, e.g. insurance industry. Guidelines were put in place back in 1998 as a result of this known practice. Where was the compliance?

http://www.jud.ct.gov/external/supapp/Cases/AROcr/CR286/286CR70.pdf

http://www.ag.ny.gov/media_center/2004/oct/oct14a_04.html

Insurance lawyer Eric D. Gerst book Vulture Culture

http://articles.latimes.com/1997/oct/17/business/fi-43588

#128 45north on 01.14.12 at 4:13 pm

James – not all realtors alike: When this economy shifts and all the lemmings are falling off the cliff so will asset values. And as everyone tries to dump them there will be a shortage of buyers, a credit crunch and a lot of fools losing everything they dreamed of.

In the movie Glengarry Glen Ross, the reason why the salesmen sit there and put up with Blake (played by Alex Baldwin) is because they have to. James I think you would be out the door.

http://www.imdb.com/title/tt0104348/

#129 Mister Obvious on 01.14.12 at 4:21 pm

My oath! Such a poverty of imagination we have here. Lisa and her hubby’s best idea for diversification is the purchase of yet another money pit.

Then they seek Garth Turner’s blessing. It gives new meaning to the phrase “not too clear on the concept”.

Why not ask the Pope how he feels about pre-marital sex and birth control? And be sure to remind his holiness that it’s different where you live.

No wonder Garth is accused of making things up. These financial basket cases defy belief.

#130 Pat on 01.14.12 at 4:26 pm

123 a prairie dawg on 01.14.12 at 3:43 pm

“Waiting until you’re 50 to start saving for your future is a HUGE gamble for anyone…”

I agree (except for the word “huge”).

I’m just pointing out that there’s an opportunity. And statistically – considering average lifetime earnings and commitments (educational expenses, paying off the house, raising kids) – that’s the most likely outcome.

Now, establishing good or bad habits is another issue.

#131 brainsail on 01.14.12 at 4:27 pm

I believe that the new BMO and TD offerings are indications of constructive changes to the mortgage industry in Canada. A baby step to the future world of less than 30 – 40 year amortizations and minimum 20% down payments. Closer to what is known in the US as a conventional mortgage except for the 5 year reset.

I remember about 10 years ago, we changed our 25 year US mortgage to a 15 year mortgage to take advantage of the lower interest rates. Our goal was to shorten the length of the loan and reduce the monthly payments. We met this goal after a long and anal six week approval process.

With two incomes our mortgage payments could not exceed 32% of our net income. Net income was calculated by gross income minus ALL expenses. This included; utility bills, satellite TV, security alarm, pest control, property taxes, house insurance, car payments and insurance, any other payments, credit card payments, estimated groceries, income taxes, all payroll deductions including 401K contibutions, etc. Plus, a half a day house inspection.

So, today in the US, conventional mortgages are very difficult to secure but they are less risky for the banks and healthier for home owners. The Canadian banks have made a baby step towards a more secure world. If only they could offer a fixed interest rate.

#132 TurnerNation on 01.14.12 at 4:32 pm

Mind control example: a smaller major bank is opening a new downtown Toronto branch.

The windows are plastered with pictures of smiling, vaguely ethnic, people – the any-men/women of banking I guess.

Sign slogans include: We’re working on building a branch for you!
And stuff like: We look forward to meeting you.

Really? More accurately the signs should read:

- Despite record quartely profits we need another location. There’s never enough profit.
- Our executive bonuses are driven by quarterly profits’ this branch will only help.
- We will raise your banking fees almost every year, guaranteed.
- “A sale on every phone call” is how we teach our reps to deal with you. Low performing reps will be canned.

Feels so good inside, doesn’t it? We are but sheep led to slaughter.

#133 Kris on 01.14.12 at 4:35 pm

Garth, you predicted higher rates in 2012 but the banks have gone the other way. Isn’t it likely the market stays heated for another year or so, before a widespread correction begins?

Do you know the difference between the bond market and monetary policy? — Garth

#134 Tony on 01.14.12 at 4:41 pm

Re: #8 abraxas on 01.13.12 at 10:25 pm

The world stock markets will likely fall between 50 and 80 percent over the next 3 to 5 years. The German market or DAX is the most overvalued of all the stock markets worldwide. You short the DAX you don’t do something stupid like play things from the long side when all there is, is downside and no upside.

Opinion without logic is wind. — Garth

#135 TurnerNation on 01.14.12 at 4:50 pm

Another Blogosphere revolution!
InvestorsFiend’s reign of error on this blog is finally ended?

#136 Canadian Watchdog on 01.14.12 at 4:51 pm

For anyone on this very narrow blog who is willing to listen to ‘factual’ deflationary points on the global economy—watch the following conference that was held in Texas last year. Special guest is hedge fund manager Kyle Bass who parses the BS/lies from reality.

And yes, this is a mortgage conference as even the RE elites must now resort to opinions of multi-billion money/pension managers who are not working in the interest of government and banks.

http://www.youtube.com/watch?v=D2gvMtDVI0A

“This very narrow blog.” Nobody makes you come here. Your point is stronger when uncloaked in bile. — Garth

#137 Tony on 01.14.12 at 4:53 pm

Re: #24 Devore on 01.13.12 at 11:41 pm

The sane people with a mortgage that just don’t have the nerve or brains to sell their house are all in variable rate mortgages. For the life of me why would anyone take out a 5 year mortgage when rates will only fall?

#138 Raging Ranter on 01.14.12 at 4:58 pm

Lower-than-market priced properties……

Such a statement defies logic. It contains a contradiction that instantly defines itself out of existence. Yet there it is. I need to go lie down.

#139 Timbo on 01.14.12 at 5:33 pm

People in the forties are not exactly ‘young,’ plus these folks have savings of 70K and LOC debt of 40K. If you net just $30,000 in liquid wealth at 40, you’re a failure. Having friends in the same boat means you need more friends. — Garth

So all divorced people are failures?! I will have to tell that to some of my friends who have been taken to the cleaners…. tsk.tsk…. :(

Divorced, 40-year-olds with 30K… what else would you call them? — Garth

#140 Keeping the Faith on 01.14.12 at 5:37 pm

#96 prairee puppie

WAKE UP! common man, do you not know sarcasm when you see it?!?!

What Lisa needs is a kick in the teeth, maybe it will knock some financial sense into her, she’s SOOOOOOO far gone to come to Garth with this story she has no hope.

If you’ve seen any of my posts before you would know, I’m not a friend of realtors, stevenson, DA or another other synonym there is for their kind.

I rent and will spend the rest of my life renting if the RE market keeps this disposition, which it won’t. I invest a very healthy amount of my income into a couch potato style portfolio that pays me every month.

Wake up buddy and don’t blame me for someone as ‘clued out’ as Lisa. Her ignorance and those like her are the reason for our RE problems.

“Bonne voyage” … all the way to the bottom of the RE ladder.

#141 These pretzels are making me thirsty on 01.14.12 at 5:37 pm

http://vreaa.wordpress.com/2012/01/14/vancouver-offices-spammed-by-weird-foreclosure-faxes/

Clearly a WTF moment…….

#142 The Thing in the Basement on 01.14.12 at 5:51 pm

112 Corban – SAIT is a fine school which turns out “technologists” and “technicians” with diplomas as opposed to engineering degrees (this may have changed with more programs). Here is the “power Engineering
Technology” diploma program link.

http://sait.ca/cometosait/academic/diplomas/apet.shtml

While I’ve heard of other techs making great wages in the oil sands, I find $250K a bit of a stretch, unless he is some form a contractor and paying out on other items.

#143 Puzni on 01.14.12 at 5:52 pm

Mortgage rates at lowest rates in history :

http://www.cbc.ca/news/business/story/2012/01/13/f-mortgage-rates-record-low.html

I wonder if this is the peak before decline

#144 TurnerNation on 01.14.12 at 6:09 pm

117maxx on 01.14.12 at 3:06 pm

I had misfortune of calling my bank regarding an online banking issue. Near end of call the TNL@TB call centre began peppering me with questions: I notice you have a line of credit, have you considered an increase?
Upon hearing No she continued How about other debt or mortgages, we can offer a debt consolidation loan.

They wanted to throw money (debt) at me!
Remember, a sale attempt must be made on every call.

#145 Guy1 on 01.14.12 at 6:14 pm

Garth, I truly apologise for the length of my commentary, but I will let you be the judge as you have been regarding the value of a submission, and about my attempt to delve deeper into the underlying philosophical causes of our collective obsession with housing and debt. I also hope that you will forgive me for some of my commentary on religion given that it’s a subject that I realise many will question (and in certain cases perhaps very rightfully so). In response to a few comments on today’s blog… There are some literal aspects of the bible that many Christians take figuratively. It’s not the specifics of the narrative as much as the morality of the overall message that counts. And, true, there are seeming contradictions in the scriptures as well as what many would interpret as fables, but there is also a deep goodness in them that I think does, indeed, warrant more attention in our society, and especially in the context of the underlying drivers of the current real estate paradigm. We have lost our way as a country and as a people fighting for wood or brick boxes better known as homes, fighting to carry an enormous debt load only to then be legally beholden to some faceless institution that does not have our best interests at heart, and falling into a sociocultural construction that ever so slickly removes the more subjective but emotionally and spiritually full-filling aspects of life in exchange for a fixation on marble countertops, steel appliances, etc. We live in an age whereby some of the basic values of our forefathers have been thrown out in exchange for the quick and superficial property fix via the vice of credit/debt. My wife and I have lived in 19 different locations in the world. I have dined with Royalty (my uncle taught Prince Andrew), and by contrast, lived for one Thoreauian winter in an uninsulated 10X10 cabin at -40C fighting to simply keep alive. And, everywhere we’ve been, however large or small the house, whatever the conditions, it has been the people who have made the place. We live in/rent a mansion in Victoria at the moment – we feel nothing here – it’s empty/soulless and we can’t wait to get back to our cottage where we have neighbours and family who care about us… a place that is real… a place where I can get my hands dirty… hauling lumber instead of pushing paper in this rat race. I have been fortunate to have visited literally hundreds of communities across Canada as a researcher. I’ve driven across every province other than Newfoundland, and would argue that it’s the religious ones that seem to have the right mix of low crime, affordable property, low debt, intact families, salt of the earth values, etc. My own family has been in awe of Caronport, Saskatchewan – a hidden jewel in the prairies. I’ve also discovered that there’s a correlation between a secularism that tends to be associated with urban culture (whether this culture is located in the city or country) and high property prices on the one hand, and religiosity and more affordable housing options on the other. Indeed, the particular values that we hold or do not hold shape our communities and how we interpret housing. For example, I must have met dozens of realtors on PEI, a number of them who were typically corrupt, but surprisingly, some who were deeply moral, however contradictory this may seem given the cut-throat nature of the business. If you look very carefully at the housing stock and property players on PEI, you will see that values, culture and religiosity… have bearing on price. I met six realtors from different firms who were consciously manipulating what they were selling relative to their own values and the values their clients were offering, but not in any standard way… the realtors were skilfully, sometimes consciously, sometimes not, keeping a certain percentage of their listings (beautiful homes for an affordable price) for those who really wanted to be on PEI (and respected the values of the community) whilst selling/showing the other equally nice but more expensive homes set off in another spot to the ‘come from aways’ (the visitors who have no interest in forming deeper ties to the community). I privately asked one realtor “why?”, and he responded with a smile/laughter saying ‘oh, things are a bit different here’ eluding to how Islanders differentiate themselves from a certain i.e., fast-moving and house hungry city slicker. We had rented a car from Ontario, and one neighbour even told us to hide our plates! On one level, I thought this kind of segregation and prejudice was unethical, but then we started seeing what PEI was trying to preserve… When we did finally purchase a house on PEI (one of several we’ve purchased and sold), our neighbour to our surprise baked cupcakes for us and placed them on our front door with a note saying “welcome to the community”. She then came over and asked us if we needed anything even offering her house!! saying that we could borrow her house for a few days while we unpacked our boxes!! She left saying ‘God bless’ a saying that people don’t commonly use where I come from unless they are in church. Perhaps, such people are ‘God fearing’ but whether you believe in God or not, can you not see the value in the kinds of statements that are written in scripture that could lead people to acts of kindness and good will? The statements are infinitely valuable (and financially valuable at that if we look at matters from a full-cost accounting perspective), as can the statements by Adam Smith, taken literally, be infinitely dehumanising. I am an evidence-based analyst – the truth is based on what my senses can detect and what scientific corroboration proves. But, I’m also someone who values the practicalities and real outcomes produced by people of faith. When I say I’m a Christian, I don’t mean that I’m a bible thumper but rather that I embrace many of the sayings in scripture as I’ve witnessed first hand how they translate to good behaviour that is becoming increasingly rare in Canada. If Canada was a nation committed to the morality inherent in many elements of scripture, I would argue that real estate would revert to a value proportional to its functional use and not ironically become the new religion it is today. Our definition of what is financially valuable would be balanced in the context of what was truly just and right for each other.

To believe is fulfilling. To paragraph is divine. — Garth

#146 McLovin on 01.14.12 at 6:19 pm

Hey DA,

How’s the 6 years of inventory looking like in K-town? I wonder if Kelowna will actually be worse than Vegas or Miami? I mean those places actually have jobs and are not an ugly town with no central planning (HWY 97 going through town) beside a lake.

50% top to bottom minimum.

But of course you will tell me otherwise.

#147 Van guy blazin kush on 01.14.12 at 6:27 pm

Poco,

Ask a guy like:
#81james – not all realtors alike

if the listing agent won’t tell you –go on to the next–like i said bullsh*t the bullsh*ters
————————————————————-
Poco,

I don’t ask realtors. I use realtor tools to research to see with my own eyes. Even realtors can’t see the sale Price of a home sold directly from the developer. I can see ever sale made on MLS. So I’m not going to ask a realtor. I’m not to convinced that those High st condos were bought at those prices you posted. Sorry dude, I need proof.

I can confirm that all properties that Garth has posted, have had the correct sale info. Anyone in this blog can say whatever, but back it up. Sorry poco, but you posted listings that were sold originally by the developer and not by MLS. James the realtor can say what he wants too. Back it up though.

#148 Westernman on 01.14.12 at 6:38 pm

Guy1,
Yeah, you bible-thumpers do tend tend to be long winded and wordy.
When I got to the line where you descrined Caronport, Sask. as a ” hidden jewel ” in the prairies – well, I realized you were a comedian as well as a amatuar preacher.
I’ve been to ” Caronport, the hidden jewel of the prairies ” many times and let me assure you it is the same falling down dump hole in the ground as all the rest of these ” rustic ” small prairie villages.
A couple of tool sheds, a dog house and three dozen inbred functionally retarded ” villagers… ” jewel of the prairies ” my rosy red behind.
I think there is something in the crushing, unrelenting isolation of these ” prairie jewels ” that drive people right out of their minds…

#149 Last on 01.14.12 at 6:47 pm

DON’T DO IT!!!!!!!!

Just got off the phone with my sister in law and she did the exact same thing with a triplex (including the LOC downpayment), and what a nightmare, the minute the deal closed the inspector showed up with a landury list of upgrades, the old owner had all that grandfathered in. Then they had the tenant from hell, only 3 months (lost) to get rid of him. Now the boiler needs replacing, but wait the tenants just gave notice and so another 2 months rent lost, plus fixing the place up.

I tried to warn them but they viewed a cash flow negative place as an investment.

I just sent her an email asking what there exit strategy was, really meaning get out and chalk it up to experience, about 50 grand worth!!!!

#150 Herb on 01.14.12 at 6:47 pm

“To believe is fulfilling. To paragraph is divine. — Garth”

My hat’s off to you again. And I thought I had seen all your squelches.

#151 Last on 01.14.12 at 7:04 pm

Nostradamus Le Mad Vlad => u have way way too much time on your hands, time to get a job, other than commenting here

#152 Devil's Advocate on 01.14.12 at 7:33 pm

#145 McLovin on 01.14.12 at 6:19 pm

I would be very surprised if your prediction came to true. That being said I really don’t care one way or the other as I am veritably “IN” the market in so many ways and not trying to predict when to get in or out that in-as-much I am well diversified. Consequently I am confident it will work out to my advantage either way. If you haven’t clued in yet to this riddle it really is quite simple; I get paid for helping people buy and/or sell and there are always people buying and/or selling regardless of price or supply.

On the matter of your distaste for Kelowna; oh all right then… you are right – it is a god forsaken land that you should avoid at all costs. ;-)

#153 Canadian Watchdog on 01.14.12 at 7:44 pm

“This very narrow blog.” Nobody makes you come here. Your point is stronger when uncloaked in bile. — Garth

If it isn’t narrow, then please allow me to continue uncloaked.

No. — Garth

#154 Van guy blazin kush on 01.14.12 at 7:45 pm

#150 Last on 01.14.12 at 7:04 pm
Nostradamus Le Mad Vlad => u have way way too much time on your hands, time to get a job, other than commenting here
———————————————————–
When you believe the world is coming to an end, why bother working?

#155 BPOE on 01.14.12 at 7:45 pm

The American has a long history of being wrong. The other day due to lack of memory he questioned when he has been wrong. His posts contain a long list of opinions. But when he tries to present facts they are just plain wrong. HST is the big hold back on new homes in BPOE. This issue has not been resolved except in the Americans mind
**************************************
The American on 01.04.12 at 9:36 am
This is hilarious. This map is a heat map showing TAXABLE values, based on assessments from LAST OCTOBER. WEll, as Garth pointed out, the crumble in BC has already begun. This means Vancouverites are going to get hurt in their property tax bills as they are paying more than their properties’ values are worth. 47thBPOE stated this is a “work of art.” I seriously think he must be sick. Anyone who doesn’t understand this means Canadians are directly getting hurt must be the greatest fool of all. By the way, HST issues would have sorted themselves out of the market by now. The tax was in place for less than two months. The buyers would have come back to the market. As we’ve been saying, this is a letigimate crumble that isn’t going to end.

#156 Arrow the the Knee on 01.14.12 at 7:47 pm

DELETED

#157 Oh Canada on 01.14.12 at 7:50 pm

112 Corban on 01.14.12 at 2:48 pm
@Waterloo Resident

My power engineer roommate from my days at SAIT is making just shy of a quarter million a year (week in, week out). I bet he could probably hit 300k if he worked all the overtime available. Not bad for 16 months of school.
——————————————————–

BULLSHITE

#158 palebird on 01.14.12 at 7:55 pm

Guy1,

Yeah I know Caronport my grandparents lived down the highway a bit. Full of biblethumpers. PEI is one of the most backwards places I have ever been to in the western world. All I got to say about that. Have a nice life.

#159 InvestorsFriend (Shawn Allen) on 01.14.12 at 7:57 pm

INVESTORSFRIEND Back By Popular demand?

Nope. Still DELETED. — Garth

#160 Westernman on 01.14.12 at 8:08 pm

Last,
Leave Nostradamus alone, he comes up with all kinds of interesting stuff.
If you don’t like the blog you can always head for the exits…you know where they are.

#161 a prairie dawg on 01.14.12 at 8:15 pm

#140 Keeping the Faith

My bad. Thought you were a RE pumper.

I was in a mood… lol

#162 TheRealTruth on 01.14.12 at 8:20 pm

#152 Canadian watchdog

No. You can’t post that here. Do you really want to destroy Bank profits, dividends, share value?? This is an altruistic blog. ;-)

It’s about respect. — Garth

#163 TheRealTruth on 01.14.12 at 8:31 pm

#120 poco,

This blog is about how artistically you express yourself in written English. Math? What’s that?…you must be a Realtor! Lol

#164 Canadian Watchdog on 01.14.12 at 8:32 pm

I’m upset I didn’t get DELETED, rather you left one line to prove the obvious.

In case you are scared, it was only public information that everyone should see.

The info is welcome. Lose the attitude. — Garth

#165 Steven Rowlandson on 01.14.12 at 8:39 pm

I think the best strategy is to cut debt, build cash reserves and cut spending to the minimum.
As for the cult of real estate values you will be hurt if you worship real estate values and follow the crowd into unreasonable debt slavery. Being out of debt is a step along the path to financial power.

#166 Renters Revenge on 01.14.12 at 8:56 pm

“If Canada was a nation committed to the morality inherent in many elements of scripture, I would argue that real estate would revert to a value proportional to its functional use and not ironically become the new religion it is today.”

Really? Like the morality in Numbers 31?

#167 The Patient on 01.14.12 at 9:15 pm

Warning: Video of Max Keiser on Canadian real estate market in 2012.

Keiser is a character. He was a Wall Street stock broker. Now he’s a pundit for Russian, Iranian and Al-Jazeera media. And here he talks about our alleged bubble, the one that keeps growing…

http://www.youtube.com/watch?v=pGW7gsgRtjY

#168 Devil's Advocate on 01.14.12 at 9:16 pm

#146 Van guy blazin kush

Either you are a REALTOR or have granted access which means you are an industry insider or you have hacked someones log in ID and password.

It would be interesting to know which to add credibility to your own claim. If you don’t disclose we can figure it out from there.

#169 Daisy Mae on 01.14.12 at 9:17 pm

#144 WESTERNMAN “A couple of tool sheds, a dog house and three dozen inbred functionally retarded ” villagers… ” jewel of the prairies ” my rosy red behind.
I think there is something in the crushing, unrelenting isolation of these ” prairie jewels ” that drive people right out of their minds…”

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

GUY1 was nauseating.

#170 Onemorething on 01.14.12 at 9:18 pm

#151 Devil’s Advocate on 01.14.12 at 7:33 pm

#145 McLovin on 01.14.12 at 6:19 pm

I would be very surprised if your prediction came to true. That being said I really don’t care one way or the other as I am veritably “IN” the market in so many ways and not trying to predict when to get in or out that in-as-much I am well diversified. Consequently I am confident it will work out to my advantage either way. If you haven’t clued in yet to this riddle it really is quite simple; I get paid for helping people buy and/or sell and there are always people buying and/or selling regardless of price or supply.

This is a statement I agree with!

However, I fear that the 98% of RE Agents are going to struggle justifying their existance in this sell off! They will be late to the sell, look at any way to cut selling costs and that starts with RE fees!

As for DA, you’ve been around for a while, it shows! Boomers especially will look to you to make the clean transaction and offer advice to price appropriately.

I’ll be buying privately without RE intervention, done it many times! I used to split the difference with the seller but now I’ll offer 25%!

#171 Devil's Advocate on 01.14.12 at 9:18 pm

#165 Renters Revenge on 01.14.12 at 8:56 pm

“If Canada was a nation committed to the morality inherent in many elements of scripture, I would argue that real estate would revert to a value proportional to its functional use and not ironically become the new religion it is today.”

Really? Like the morality in Numbers 31?

Or 666?

#172 Daisy Mae on 01.14.12 at 9:31 pm

palebird on 01.14.12 at 7:55 pm
Guy1,

Yeah I know Caronport my grandparents lived down the highway a bit. Full of biblethumpers. PEI is one of the most backwards places I have ever been to in the western world. All I got to say about that. Have a nice life.

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

Guy1 is nauseating. (Yeah, I know I’m repeating myself…)

#173 abraxas on 01.14.12 at 9:40 pm

> Your suggestion to go long on an individual equity shows you are no source of worthy advice. — Garth

Vanguard’s VGK is a Europe wide ETF. Hardly a “individual equity”. I’m not saying this should be all that one owns. But it’s a much better entry point than Canadian REITs.

#174 Van guy blazin kush on 01.14.12 at 9:45 pm

DA,

Figure it out then

#175 ripa on 01.14.12 at 9:49 pm

Sheeple. It’s never their fault. I don’t know if I should laugh or cry at this:
http://www.theage.com.au/business/banks-face-home-loan-suit-20120114-1q0pt.html

#176 TurnerNation on 01.14.12 at 9:52 pm

Whistler again!

Realtor quote from recent weekly news paper (Pique, on Dec 29th):

“…we are seeing some very inexpensive pricing, back to where it was in 2000. There’s some remarkable deals out there, how long it will last for, we don’t know”.

I’ll tell you for how long it will last: a long time. Article also states majority of Whistler buyers are from Lower Mainland. Wanna bet they are leveraging bubble equity from their crackshacks and injecting it into Whistler’s pricey vacation homes?
A house of cards?

#177 Guy1 on 01.14.12 at 10:32 pm

I was speaking out of personal experience about Caronport, SK and PEI. You can have your thoughts or experiences about the place (coming from your paradigmatic space) and I can have mine. As to the uncultured/uncivilised tone by which some here choose to communicate, you are entitled to say what you want but may I suggest that you would have greater credibility if you offered some more thoughtful analysis. It would also make for a more interesting and worthwhile read for the rest of us. This is Mr. Turner’s blog and not the gutter. Can we not be just a little bit more respectful in how we respond to each other’s differences?

#178 Kris on 01.14.12 at 10:36 pm

#133 Kris
Do you know the difference between the bond market and monetary policy? — Garth
——————————————————————

I realize fixed vs. var rates are driven by the bond market & BofC respectively. But this is just semantics to the borrower. End result, 5yr fixed at 2.99% EASES the debt burden – while you hoped for modest rate increases in 2012 to induce frugality in the average family.
My question is simple – Doesn’t the banks’ move to cut fixed rates go against the trend you foresaw for 2012?

#179 Smoking Man on 01.14.12 at 10:37 pm

119 TurnerNation on 01.14.12 at 3:14 pm

It is good news but not what you think.
OLG is a slime sucking parasite they have there machines riged at a 75% pay out. In other words you can’t posably win.

If OLG opens a casino in TO, Then Senica in Niagara, who machines are at about 90, will want to compete, so the algos will be set to about 95. Love compitition.

I play Poker, Cards and Crap, but my wife loves the slots

Still the only place to play, plus all the free booze. and when I go there it’s always the centre suite.

#180 vreaa on 01.14.12 at 10:42 pm

Bob and Doug McKenzie Discuss Canadian RE…
With Nephew Mike

http://wp.me/pcq1o-3xX

#181 Smoking Man on 01.14.12 at 10:45 pm

#175 TurnerNation on 01.14.12 at 9:52 pm

Ok man you know the media spins, you know the sheep via school are dumb.

Have you ever thought about exployting your knollage for profit.

Forgive the spelling im wasted again

#182 Waterloo Resident on 01.14.12 at 10:57 pm

#112 Corban:
You said (“My power engineer roommate from my days at SAIT is making just shy of a quarter million a year (week in, week out). I bet he could probably hit 300k if he worked all the overtime available. Not bad for 16 months of school.”)

My advice to you: STOP SMOKING CRACK ! its rotting your brain !

Here’s proof that you are so full of it:

http://www.skilledworkers.com/employer/job_view.php?id=50872&utm_source=Indeed&utm_medium=organic&utm_campaign=Indeed

Job Number: 6151709
Title: Second-class power engineer (Must Have Journeyman Red Seal Certificate) (NOC: 7351)
Terms of Employment: Permanent, Full Time, Shift, Overtime, Weekend, Day, Night, Evening
Salary: $31.60 Hourly for 40 hours per week, Other Benefits, As per collective agreement
Location: High River, Alberta (2 vacancies )

Lets do the math here: $31.60/hr X 40hrs/week X 50weeks/yr = $63,000 per year

#183 Mr Buyer on 01.14.12 at 11:02 pm

#144Guy1…To my mind secularism is not the source of our troubles but rather subverted government. As a reseacher you could appreciate the likelyhood that the percentage of christian souls lost in this RE bubble are proportional to their numbers in the larger society. To me God gave me a mind and I am expected to use it. My early catholic training is still with me and prevents me from saying there is no God (I fear I will awake after death in a large movie theater with every soul present watching my life and they repeatedly replay the part at which I say there is no God). My struggle with God’s existance is irrelavent to God as a supreme being. It is my duty to use the gifts apportioned to me from what ever source. Live as if this gift of life is all there is and do onto others as I would have them do onto myself.

#184 Smoking Man on 01.14.12 at 11:06 pm

My website http://www.Keysme.org has gone insane

Just shy of Million downloads no CSIS , and still no CIA contact re a dycription algo. $$$$$$$$$$$$$$$

Obviously they are stupid.

#185 Westernman on 01.14.12 at 11:11 pm

Guy1@#176,
Sir, I am also speaking from personal on-the -ground experience in ref. to Caronport, Sask. I’m not sure if my space is paradigmatic and uncultured or not but that doesn’t change the facts in regard to Caronport. As for thoughtful analysis… I looked a landfill the other day and declared it was a dump in about 3 seconds. Same with Caronport. You can’t shine a dog turd,Sir.
I’m also not particularly concerned how ” interesting ” or not the others find me either, I’m first and foremost interested in truth telling… not whether aunt Edna finds me politically correct enough or not.
If the discourse from me offends you I suggest you confine your activities to quilting bees, scripture meetings and sunday suppers with grandma. You are dealing with the the public here and your fragile feelings are not a concern to me.

#186 Smoking Man on 01.14.12 at 11:23 pm

Make that
http://www.keysme.org

To druck right now

#187 45north on 01.14.12 at 11:50 pm

Mr Buyer: I fear I will awake after death in a large movie theater with every soul present watching my life and they repeatedly replay the part at which I say there is no God

here is my favourite parody of Adolph Hitler:
http://www.youtube.com/watch?v=0b04pKO_698

these parodies are my idea of a large movie theatre with every soul present watching Hitler’s life and replaying the most mocking and humiliating parts

“I swear there ain’t no heaven but I pray there ain’t no hell”

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

#188 Don on 01.15.12 at 12:07 am

****#97 sam.i.am on 01.14.12 at 1:46 pm I think DonD is keepin’ it real. A lot of late 30′s early 40′s got hit hard by the 1990 recession and delayed marriage, homes, kids, and savings till late 20s or early 30s. I did not get my first real job till age 28 and I am not atypical. It isn’t surprising to me at all that early 40 yr olds have low nominal savings. All the advice about saving x% of every pay is great, but when faced with un or underemployment while at the same time trying to build a life it’s pretty hard to get ahead of the curve.

Another observation… how many women (or men) have had a kid and gone back to work ahead of the 1 yr ei allotment? I know of several and it’s always about the money. Tells me those families really NEED two incomes.

If you have less than 50K at age 40, how do you expect to finance a 25-year retirement starting two decades later? ‘Hi there. Can I get you a buggy?’ — Garth***

I’m not surprised either, I have a lot of friends few recieved good paying jobs until 29 – 32 and were the first to go when layoffs hits in 2001. Weren’t to many long term jobs available as in a previous generation – not complaining just stating the obvious, Forestry jobs were decimated by than, fishing, gov not hiring etc. To answer your question about retirement Garth. Who’s retiring – perform a task that get’s you money in your retirement. There used to be a time when people didn’t really retire. I never want to retire – slow down yes – retirement looks to be very boring. All of those friends, I spoke of either have trades or degrees. Plan now to do something that you enjoy and make money at head in that direction.

#189 Ozy - Read the Comments on below article (dont' waste the time with the article) on 01.15.12 at 12:10 am

READ THE COMMENTS and prepare accordingly, and do a good deed and share those COMMENTS with your buddies and neighbours of all nationalities (unless you hate them, which is bad jojo and bad karma). You will be an HERO in 2012 and years to come.

Is real estate overheated? The bubble discussion rages on
http://business.financialpost.com/2012/01/13/is-real-estate-overheated-the-bubble-debate-rages-on/

#190 Andrew on 01.15.12 at 12:39 am

Hello Garth and fellow readers,

My wife bought a condo before I knew her, we have since married and need to move into a larger space. She bought in 2005 for $232,580 and the realtor says we should list for $339,000 (2 br, 1 ba in N.Van, BC).

My delusional wife seems to think we will have $106,420 to pitch into a larger space. Anyone who can run numbers knows this is not the case. I ran all the numbers I know, I actually calculated a $50,540 loss. With lost investment income of 6% on that of $25,993.47 the real loss is $75993.47.

Numbers are below, Garth and / or fellow readers, am I off here, missing something or correct?

Sale Price 232580
GST 5% 11629
Legal Fees 2000
Land / Transfer Tax 1500

TOTAL PURCHASE PRICE = 247709

Selling Price 339000
Mortgage remaining 182000
Profit 157000

Less

Realtor Fees 6% 20340
Legal Fees 2000
Payments 7 years 115500
Property Tax 7 years 14700
Downpayment 20000
Strata Fees 7 years 35000

TOTAL COSTS 207540

Loss 50540

50540 x .06% x 7years 75993.47

Investment loss 25453.47

Rent 7 years $1200 100800

Am I even close?

Thanks everyone, keep it up Garth.

Andrew

#191 Valkyrie on 01.15.12 at 12:46 am

Palebird

“PEI is one of the most backwards places I have ever been to in the western world.”

ha ha wow, that gave me a real chuckle, and I have lived on a couple of remote west coast islands…but if you want a nice feed of cod tongues and clams, P.E.I. is the place to be.

#192 Nostradamus Le Mad Vlad on 01.15.12 at 12:50 am

-
The inescapably vast influence of McCain’s Frozen Beef Pie has long been known by the elite as the driving force, the V24 engine that keeps our planet running smoothly.

But that’s for further investigation and discussion in the next lifecycle. The Birth of WallyJesus.
*
#185 Smoking Man — The first part of your link — “IN TODAY’S WORLD EVERYTHING we transmit via the world wide web is monitored.”

Well pointed out. We’re monitored, because we’re rebels nd really don’t give a fat rat’s ass about the establishment. They are just a bunch of kafuffling dickheads.
*
5:23 clip Substantial amount missing from the US Fed. They are bailing out the EU — check there; Poor Don’t ever become that way. Hey, that’s why money is being withdrawn from the system — to leave us poor; Yesterday, it was Pharmaggedon. Today, it’s Armageddon (shortly); 8:07 clip US Fed officials joked about housing in 2006; Home 4Closures may rise 25% this year; Six Weeks Foreigners sell US$85 bln. in US Treasuries (all of this seems to be coming together); 22 Signs that the world is on the verge of a fiscal blip.

Eleven min. clip Six principles of globalism (NWO, etc.); Sarkozy Serves that SOB right; Merkel A fine way to piss one’s citizens off; Fiscal Bombs being dropped all over Europe, and One Winner; John Mauldin Is this the end of Europe? Ummm, not quite; ZH and Paul Krugman agree on something; Good News – Bad News.
*
12:43 clip — NAU / SPP “However, far from being a new arrangement, what this accord represents is only the latest in a chain of usurpations of national sovereignty.”, Agenda 21 and Agenda 21 riot; 3:51 clip Headline says what kind of a barbarian Cheney is; Destabilization It’s a joke about Iran’s WMD. They don’t have any, and aren’t building any. Check the other ‘I’ country out instead; China – Iran – Russia would consider any attack on Syria and / or Iran as an attack on themselves; UK Military Similar to the Hitler Youth Corps; Gadaafi’s Ghost He’s still around (not physically).

Monsanto Biopiracy charges in India; Romney’s lead shrinks, and Obomba to cut something? The Elite Quite nasty to themselves.

#193 The Botech Guy on 01.15.12 at 12:59 am

#83 Deano

Thanks for your comments. I agree good teacher is a key, but why would then one high school be ranked #1 in province while another ranked #1500 ? (say by Fraser Institute, university enrollments etc).

My theory is you have statistically better chance of finding great teacher, responsible kids and good parents in higher ranked schools, whatever the metrics. These are just odds on good influences and inspiration.

By all accounts the kid is bright, don’t want to screw it up by being bearish on real estate.

There is more to buying a house than economic calculation. Unlike Lisa in this particular post I am not trying to diversify anything in my portfolio.

Can one be rational and still buy into a McMansion ?

#194 sam.i.am on 01.15.12 at 1:12 am

BTW, Alexander Keith’s now on Tap at at the local Budweiser Brewery. A Local beer store carries product, label says brewed in St Louis. Sacrilege. Sell out.

#195 Guy1 on 01.15.12 at 1:19 am

Mr Buyer… I agree subverted government is a concern. Regarding the percentage of Christian souls lost in this RE bubble…, I suspect it would require some form of multivariate analysis using more recent data than i.e., http://atlas.nrcan.gc.ca/site/english/maps/peopleandsociety/religion), with a cross-referencing of real estate values cited i.e., on http://www.realtor.ca and/or some site that identifies recently sold properties in order to get an idea of who will be affected… you raise an intriguing point leading to several questions which I think we can throw out for people to chew on… Who will be most affected by a correction, where are they exactly located in Canada, what is their socioeconomic, political, cultural, and religious backgrounds, and how will Canada’s regional, provincial and federal power dynamics change as a consequence of a correction… Garth has given us some ideas… referring to the risks facing babyboomers and house-crazed hormone filled newbies. But, if the correction is substantial, with a major shift in personal finances, who exactly will be the winners and losers? Will recent immigrants be most affected or not, the younger population, or will babyboomers be substantially more hit? What would our class and social structures look like at the tail end of the correction? Will Garth suddenly become PM? :.)

#196 poco on 01.15.12 at 1:25 am

#146Van guy blazin kush on 01.14.12 at 6:27 pm
Poco,
Ask a guy like:
#81james – not all realtors alike
if the listing agent won’t tell you –go on to the next–like i said bullsh*t the bullsh*ters
————————————————————-
Poco,
I don’t ask realtors. I use realtor tools to research to see with my own eyes. Even realtors can’t see the sale Price of a home sold directly from the developer. I can see ever sale made on MLS. So I’m not going to ask a realtor. I’m not to convinced that those High st condos were bought at those prices you posted. Sorry dude, I need proof.

I can confirm that all properties that Garth has posted, have had the correct sale info. Anyone in this blog can say whatever, but back it up. Sorry poco, but you posted listings that were sold originally by the developer and not by MLS. James the realtor can say what he wants too. Back it up though.
____________________________________________
sorry Van guy but i do talk to realtors and i talk to them all the time-a few times a week at least–you could be missing out on some pretty good information by treating them like the plague—no matter what you think there are some pretty good ones around

don’t really care if you can’t confirm the sale prices of what i posted for those condos–i know they’re corrrect (i have paper work)which is the only thing that matters to me— if you use your head a little, there are other ways to confirm the pricing–though i don’t think you’ll figure it out
PS: if you have access to all this information you should be telling us all about the Vancouver market–like new listings– price changes–sales–how many losing on their purchase (underwater)–that’s why you’re here isn’t it?–come on, let the dawgs know that the Van market isn’t as hot as everyone says and hasn’t been for quite awhile

just for you Van Guy–tell us about this one– i’ve been tracking it for a long long time–Citadel area–tell us how long has it been listed–price changes –are the sellers underwater–the usual stuff
http://www.realtor.ca/propertyDetails.aspx?propertyId=11380176&PidKey=-1494361954

#197 Trailer Park Boys on 01.15.12 at 1:36 am

We think we are related to Smokink Man ( aka Stephen Harper)….

Is there anyway to scrub our DNA in the car wash ?, (unless he wins the lottery SVP?)

#198 Van guy blazin kush on 01.15.12 at 1:42 am

Richmond is the “Flipper” Capital of BC

10491 Sceptre Cr
Bought Feb 11 $1,000,000
Listed Oct 11 $1,138,000 reduced to $1,078,000

8291 Fairfax Pl
Bought Feb 11 $1,240,000
Listed Dec 11 1,398,000

4311 Tucker Ave
Bought Jul 11 $2,250,000
Listed Nov 11 2,580,000

And the list goes on……..

All these flippers are Chinese, but not sure if they’re mainlanders.

#199 poco on 01.15.12 at 1:43 am

#162TheRealTruth on 01.14.12 at 8:31 pm
#120 poco,
This blog is about how artistically you express yourself in written English. Math? What’s that?…you must be a Realtor! Lol
____________________________________________
artistically express yourself in written English–how’s this
no one laughs with a friggin idiot

#200 ab on 01.15.12 at 2:10 am

ab, here, from a couple of articles back.

I got a final offer on the property which I accepted, @$495,000. Had listed @ $525,000, comparatively well priced for the area, in August. They countered at $470,000, and we went back and forth a couple of times. Their second – to – last counter was at $487,000. I thought very long and hard… and maybe somewhat foolishly did not accept and countered at $497,000. They came back with $492,000. I did a final offer @ $495,000 and it was accepted. I also sold my oversized dining table within the same hour and, after all that, felt a floating sense of relief and energy. So thanks, everyone, for your points of view and feedback. I’m a fool, but feeling a little wiser now.

Thank you, once again, for that. That’s priceless.

#201 debtified on 01.15.12 at 2:10 am

#158 InvestorsFriend (Shawn Allen) on 01.14.12 at 7:57 pm

INVESTORSFRIEND Back By Popular demand?

Nope. Still DELETED. — Garth
***********************************************

Thank you, Garth.

#202 Trailer Park Boys on 01.15.12 at 2:13 am

Garth and his staff of 911 have been working TOO hard

We think we should pass the hat and send him and his staff of 911 nubile nymphs to a locale of their choice.

We have made a fortune following his advice(…..at least next months strata fees.)

As long as it doesn’t cost more than $50….do err…!!!

#203 poco on 01.15.12 at 2:14 am

Van Guy—open up your eyes –this could easily be High St.

http://vreaa.wordpress.com/

#204 Malarkey on 01.15.12 at 3:09 am

@andrew…. Your numbers add up. But the past is the past. that calculation doesn’t factor in her enjoyment of having her own place, not having to move because or land lord decisions. Maybe she didn’t enjoy the experience? but if she has been happy with the past and her original decision, those sunk costs are nuetraled out from her enjoyment. If her money was invested during the recession in 2008 she could of freaked out and taken a loss and held her money in the bank losing value based on inflation.

I think she did great ( if she hurrys up and sells…. and you guys will now have a solid downpament on your next place ( which if in north van could be 15% less come this time next year ) . hope that explanation makes sense.

#205 Malarkey on 01.15.12 at 3:20 am

Guy1 the problem with those communities is they are exclusive. Isn’t Christianity about living amongst the world and not hiding from reality? The people you talk about in your stories are living in a bubble. Full of judgment and finger pointing.

What would the grany think of you if you were a tattooed man driving by her house on a loud Harley Davidson and bought in as her neighbor? You would think she would still bring over fresh baking if she was a follower of Jesus?

Sounds like the mansion in Victoria is a great place to turn the empty community into a connected community thought your values and Christian faith. why run and hide in a small town when you can make a difference where you are right now?

#206 Devore on 01.15.12 at 3:39 am

#74 gmc

CAN ANYBODY REFUTE THIS CLAIM

And the same thing applies in Canada to Canadian brokerages and Canadian stocks. The Canadian economy is intricately tied to the US. In fact, not many people are aware, but all that backs the Canadian dollar is the US dollar.

Bank of Canada financial statement as of November 2011:

http://www.bankofcanada.ca/wp-content/uploads/2011/12/statement_financial_position_301111.pdf

US dollars held: $0

Canadian dollar is backed by Government of Canada bills and treasuries.

Or maybe they’re lying? Refute away.

#207 bcpaul on 01.15.12 at 3:48 am

#184 Westernman

I looked a landfill the other day and declared it was a dump in about 3 seconds. Same with Caronport. You can’t shine a dog turd,Sir.

Your comments hold the same value.

#208 Devore on 01.15.12 at 3:50 am

#86 City Slicker

Since Japan is best known for the “lost decade” does anyone know how the RE market performs there considering it’s ultra low interest rates for such a long period of time?

You mean the “lost two decades”. Real estate is still down, and still trending down.

#209 Canuck Abroad on 01.15.12 at 4:17 am

189 / Andrew – I think you are comparing apples and oranges and watermelons. No need to run all the numbers you know.

Apple: If all you want to work out is how much cash you will have to “pitch into another space”, take your sales proceeds, less selling costs, less outstanding mortgage amount and that is the amount of cash you will have left over for a new place. Done.

Orange: At this point the price paid is a sunk cost. All the buying costs happened in the past and won’t affect the cash you will have left over from the sale.

Watermelon: The rent you would have paid instead of owning is only relevant if you want to know whether you would have been better off to rent than own seven years ago. It has no bearing on cash proceeds from sale.

Listing price = 339k
Mortgage outstanding = -182k
Realtor and legal = -22k

Cash proceeds assuming you get 100% of list = 135k

Note this has nothing to do with “profit” which is a separate thing altogether and a much lower number.

#210 Canuck Abroad on 01.15.12 at 4:31 am

89 / Andrew – Just because you will have money left over to “pitch into another place” doesn’t mean you should actually buy another place in this market. Bank your cash proceeds. Call Garth or the advisor of your choice to help you with the rent versus buy calculation on your next place and take it from there.

#211 Canuck Abroad on 01.15.12 at 4:41 am

89 / Andrew – The result will almost certainly be “you should rent”. Once you get this extremely obvious answer from your advisor, then you should invest the cash somewhere other than real estate. But don’t leave it in the orange guys shorts for several years. You might want to get some outside help with that as well.

#212 Waterloo Resident on 01.15.12 at 7:44 am

#187 DON:

Thanks for telling it as it is. You’ve hit the nail on the head with your observations there, men and the people of my age have gone through exactly all of that here in Southern Ontario during the same time-frame as what you have described.

Now we seem to be entering another recession and the jobs are going away / government not-hiring, etc. all over again.

#213 Keeping the Faith on 01.15.12 at 8:21 am

#189 Andrew

You’re on the right track but you’re mixing RE ownership vs. renting costs with investment returns/losses.
I didn’t run the numbers for you but from an overview it appears your error starts when you calculate 7 years of payments to the mortgage and add it to costs.

You do have to pay to live with a roof over your head.
To fix the errors:
a) separate the cost of ownership (house x7 years) and compare to opportunity cost of renting. That will give you what you overpaid or underpaid monthly to live in the condo for 7 years.

b) Then you can compare the opportunity cost of the 20K downpayment for 7 years vs. ROI for if it were in the market at 6%
c) add b) to the monthly surplus of investments if renting was cheaper the owning, assuming you invested the difference in rent from a). This will be a future value of annuity calculation

Quick take on it is that you probably still made money over the 7 years, your return was probably not too bad either, all relative but I would guess 4-5% annually.

The real question is, what do you do with the money? downpayment for RE or invest in a portfolio that pays you every month and rent?
Without question at this point in time, rent is the better financial move in 2012.

Hope this helps although I realize it’s probably not the easiest explanation to follow.

Good luck explaining to the wife

#214 Finanzkrise on 01.15.12 at 8:47 am

Realtors still seem to be pulling the underpricing trick to trigger a bidding war, and it appears to be working still in some sought after real estate pockets (“Casa Loma area home goes for $425000 over asking”):

http://www.theglobeandmail.com/life/home-and-garden/real-estate/done-deals/casa-loma-area-home-goes-425000-over-asking/article2299689/

A curious ad banner was tied to that article from TREB regarding a BRA (Buyer’s Representation Agreement):

http://www.brafirst.com/

As expected, a somewhat deceptive approach is used to present information on that site. Hopefully the BRA does not become a ubiquitous practice or a mandatory step when engaging a buyer’s realtor…

#215 NotAGreaterFool on 01.15.12 at 10:20 am

With BMO lowering rates and other banks following with similar products, I gotta think they are throwing in F and C face and challenging them, if not telling them to step in and put preventative controls in place come budget time in March. Interesting times….speaking of which, this is just nuts…home says for $400K over list price:

http://www.theglobeandmail.com/life/home-and-garden/real-estate/done-deals/casa-loma-area-home-goes-425000-over-asking/article2299689/

#216 Herb on 01.15.12 at 10:22 am

“Divorced, 40-year-olds with 30K… what else would you call them? — Garth”

“Survivors”, depending on circumstances we know nothing about.

#217 unbalanced on 01.15.12 at 11:00 am

To # 199 AB Good for you. Congrats. Thanks for keeping us posted.

#218 Van guy blazin kush on 01.15.12 at 11:14 am

#202 poco on 01.15.12 at 2:14 am
Van Guy—open up your eyes –this could easily be High St.

http://vreaa.wordpress.com/
————————————————————-
I have 20/15 laser eye sight. I believe what I see. I don’t listen to people I don’t know. Sorry bud, this ” could” be The High St, but like I said, “proof” dude.

You still didn’t answer me regarding the original sale price of these units.

#219 Snowboid on 01.15.12 at 11:39 am

#199 ab on 01.15.12 at 2:10 am…

Good for you, it is a wonderful feeling – and you are no fool.

#220 John Prine on 01.15.12 at 11:58 am

Victoria and Victoria West.
546 active listings.
Last 7 days, 17 completed sales…Hot Market.

#221 Randy on 01.15.12 at 12:02 pm

Austerity is coming to Ontario after the Drummond Commission Report…McGuinty wants to call the Program….”Rae Days, Part 2″….

#222 Van guy blazin kush on 01.15.12 at 12:10 pm

Poco,

U did answer. I apologize for that. Too much kush this weekend.

Here we go sir, 1149 Bennet dr

Listed 07-dec-11 Exp 07-mar-12
Original price $374,800
Now $364,8000
Total DOM 39

This TH has been active on the mls since 98.
This is what the owner paid when they bought 04-Jan-08.
List price $395,000
Sold $394,000

Let’s take a look at this one you posted about.
1221 Prairie ave
Listed 8-oct-06 $489,000

Sold $460,000 28-oct-06

Listed 7-jul-10 $579,900
Terminated after 138 DOM

Listed 23-nov-10 $560,000
Expired

Listed 11-sept-11 $549,9000
Reduced $519,000
Reduced $519,000
Reduced again currently $499,000
Expires 30-Jan-12

Anything else sir? 

#223 poco on 01.15.12 at 12:18 pm

#215Van guy blazin kush on 01.15.12 at 11:14 am
You still didn’t answer me regarding the original sale price of these units.
____________________________________________

i see you can read but don’t comprehend very well—you figure out how to do it–i already know !!!!!
as the old saying goes “does the Bay tell Sears their business”

#224 GregW, Oakville on 01.15.12 at 12:19 pm

Hi Nastra, Have you heard about this 12 page paper?
Medical journal openly questions science, ethics of HPV vaccinations.
“Human papillomavirus (HPV) vaccine policy and evidence-based medicine: Are they at odds?”
For Abstract: http://sanevax.org/human-papillomavirus-hpv-vaccine-policy-and-evidence-based-medicine-are-they-at-odds/
(difficulty accessing entire paper ask corresponding author via, [email protected] )

#225 Van guy blazin kush on 01.15.12 at 12:34 pm

Poco,

I told u I missed your post because Ive been hitting the kush all weekend!!!! I’ve served you your info. I’ll serve anyone else that needs my services unlike DA!!!

I don’t have time to regularly research the Tri-cities. But I’m glad to service anyone potentially looking to buy. Actually, this info I can provide is to prevent a person in becoming a greaterfool. After looking at your homes posted, looks like poco pricing is back to 2007 levels.

Back to my kush now!!

That’s enough of these puerile ‘kush’ references. — Garth

#226 Van guy blazin kush on 01.15.12 at 12:39 pm

Poco,

One more thing regarding Bennet dr.
These owners are not underwater anymore. They’re already foreclosed! Hahaha

#227 Canadian Watchdog on 01.15.12 at 1:15 pm

#8 abraxas

Many REITs will not perform in an overpriced and speculative market as higher inventories will create more competition for lower rent. Keep in mind REITs will be charging higher rent this year (Ontario 2012 3.1%) to keep FFO at par with higher expenses (utilities). Commercial REITs will be more vulnerable then residential as many businesses will start going bankrupt and corporations downsize operating outlets. Watch for declining occupancy rates later this year.

Looking at Canadian REITs price performance is misconceiving due to a greater inflow of foreign investments starting in April 2011. This is nothing but froth that is likely to flow out once the housing market turns, because this time, investors know there won’t be a coordinated $1 trillion global stimulus package for Canadian businesses to benefit from.

If you’ve been in REITs, this is the time to bag in your chips.

This is the worst possible advice, full of groundless conjecture and false assumptions. I will be addressing the REITs-versus-real estate situation, and what investors can expect going forward, in a few hours. — Garth

#228 Junius on 01.15.12 at 1:32 pm

#188 Ozy,

Thanks for the post. You are right that the comments are more interesting than the article. Clearly public sentiment is changing.

My favourite quote was from the person who noted,
“asking a real estate agent to call a market top is like asking a monkey to predict banana futures.”

#229 Westernman on 01.15.12 at 1:41 pm

bcpaul @ # 206,
” your comments hold the same value ”
Obviously you’ve never been to Caronport, Sask.

#230 jess on 01.15.12 at 1:54 pm

westernman – I think you might like this chapter.

Chapter 13: The Socialist Challenge
http://www.historyisaweapon.com/defcon1/socchal13.html

Maxx
FDR had to act because of mass discontent
http://neweconomicperspectives.blogspot.com/massive—and organized—popular discontent based mainly in working class and small farmer organizations”
===========
The Barcelona Mass Rent Strike of 1931
“The Practice of Direct Action: The Barcelona Rent Strike of 1931″ by Nick Rider, in the anthology For Anarchism, edited by D. Goodway, 1989.
http://workersolidarity.org/?p=180

=
The not so roaring 20′s.
I guess they didn’t know about geometric substitution

Chapter 15: Self-Help in Hard Times
When La Guardia asked Secretary of Agriculture William Jardine to investigate the high price of meat, the Secretary sent him a pamphlet on how to use meat economically. La Guardia wrote back:
I asked for help and you send me a bulletin. The people of New York City cannot feed their children on Department bulletins.. .. Your bulletins . .. are of no use to the tenement dwellers of this great city. The housewives of New York have been trained by hard experience on the economical use of meat. What we want is the help of your department on the meat profiteers who are keeping the hard-working people of this city from obtaining proper nourishment.

http://www.historyisaweapon.com/defcon1/zinnselhel15.html

#231 Okanagan Renter on 01.15.12 at 2:02 pm

#224 Canadian Watchdog

If you’ve been in REITs, this is the time to bag in your chips.

This is the worst possible advice, full of groundless conjecture and false assumptions. I will be addressing the REITs-versus-real estate situation, and what investors can expect going forward, in a few hours. — Garth

Garth, pls. remember to address the issue of RRSPs at some stage. I know of course that you cover this in Money Road, but you may have new insight for 2012. Like someone else posted earlier, I too have 30K or so that I was thinking of dropping into RRSPs but have held off on your recent mention of getting taxed twice on my money. Thanks in advance!

#232 Westernman on 01.15.12 at 2:07 pm

Jess@#228,
Regarding chapter 13 – that’s a lot of reading…can you boil it down for me so I can make a rude, flippant comment in response. I have better things to do with my time than indoctrinate myself on left-wing counter- culture fruitcake propaganda…
Thanks in advance…

#233 Macrath on 01.15.12 at 2:18 pm

REITs-versus-real estate situation, and what investors can expect going forward, in a few hours. — Garth
—————————————————————————–

Riocan REIT owns Niagara Square. It has to be 60% vacant ,yet they built a new building also vacant and for lease, in a region that is rife with empty real-estate of all descriptions.
XRE is 25% Riocan, took my profits, still own a managed fund which includes REITs sans Riocan.

Must be a lot of money flowing in to build and maintain perpetually empty buildings. Financial magic ?

#234 Timing is Everything on 01.15.12 at 2:18 pm

“What Canada needs is not more prisons, but less criminals” said a police officer and Liberal delegate.

Liberal Convention 2012: Federal Grits Vote To Legalize Marijuana – PuffingtonPost

http://tinyurl.com/7x8d9eh

#235 Westernman on 01.15.12 at 2:33 pm

Timing is Everything@#232,
Hate to break this to you Jose, but what the federal liberals vote on at their convention has about as much impact as an unmade bed. Hard to imagine anything more irrelavant than the Canadian Liberal Party.
On a side note, why not just make everything legal and we could do away with prisons altogether.
I’ll bet the Liberal ( communist ) party of Canada would think that’s a swell idea…

#236 Westernman on 01.15.12 at 2:37 pm

Besides having better things to do with my time, I’m late for a meeting at the Rainbow Club.

#237 Canadian Watchdog on 01.15.12 at 2:44 pm

#231 Macrath

Must be a lot of money flowing in to build and maintain perpetually empty buildings. Financial magic?

Didn’t you know China’s ‘just keep building’ policy is the new stimulus?

I thought this was a ‘narrow blog.’ If you apologize you can stay, and be broadened. — Garth

#238 Westernman on 01.15.12 at 2:52 pm

#234,
I now have imposters posing as me, I have arrived as a significant part of this blog… how sweet it is!

#239 vreaa on 01.15.12 at 2:53 pm

“A friend from Kelowna phoned me wanting to borrow some serious money ($50K). It is time for them to refinance their mortgage; Kelowna prices have collapsed since they bought 4 years ago; they paid $450k a house which is now worth $370k; to refinance at these new rates the bank said they have to bring up their equity to positive status.”

http://wp.me/pcq1o-3yh

#240 Raging Ranter on 01.15.12 at 2:55 pm

@#74 GMC, the USD has not backed the C$ since Breton Woods fell apart in 1971. Back then, the C$ and all other member currencies were pegged to the USD, which in turn was pegged to gold. Nothing of the sort has existed since.

#241 Junius on 01.15.12 at 2:58 pm

That said, I do get most of my advice from my pet monkey.

His name is Junius Jr.

#242 Timing is Everything on 01.15.12 at 3:07 pm

#233 Westernman “I’ll bet the Liberal ( communist ) party of Canada would think that’s a swell idea…”

Get your facts straight. There already is a Communist Party of Canada…

http://www.parti-communiste.ca/

Who’s Jose?
——————————————————–
Van guy blazin kush might have to change his business model.

#243 R2D2 on 01.15.12 at 3:15 pm

#233Westernman on 01.15.12 at 2:33 pm

http://www.youtube.com/watch?v=g5R1mTyYMuU

So ye be frum the Tom Flanagan ( Studs Lonergan ) skuul of “ya can say anythin’ so long’s it sounds feasible.”

#244 R2D2 on 01.15.12 at 3:19 pm

I thought this was a ‘narrow blog.’ If you apologize you can stay, and be broadened. — Garth

I thought there were to be no free lunches or double-downs Garth.

#245 InvestorsFriend (Shawn Allen) on 01.15.12 at 3:32 pm

INVESTORSFRIEND PETITION – Garth you will see, my fans, groupies and friends will mount a massive petition for my return! Right fans? … fans?… hello… hello

Crickets, dude. — Garth

#246 Don on 01.15.12 at 3:34 pm

#211 Waterloo Resident

Thank you – try to tell it as it is.

I have no reason to bias the discussion. I still rent because it is cheaper at this point in time. Yes I could have bought 7-10 years ago and made a profit if I flipped but lending standards were a lot stricter then and the jobs were not that stable. Now it is definitely cheaper to rent. I rent with an ocean view, nice but not that I care. When I first moved in there were only two apartments for rent now little over a year later – there are at least 20 +. Two bedrooms going for $1800 mth. Month after month more people leaving, lack of entry level jobs, lower university attendance and the online studies allowing students to stay at home (smart). Have a friend who is 30 and his wife (realtor) who are about to purchase a house. I want to warn them (especially him) but she is an expert (barely two years now). They were teenagers when this started and sure people made money flipping back then but now! I will remain liquid for the time being as I don’t want to be tied down to one geographic location. Solution all realtors should have to take an economics course and not one offered by a realtor estate company.

I will need to move soon – and have been checking out the listings for rent – Over 500 houses to rent – over 4000 listing and it seems every home owner is desperate to rent their basements out for average $1200. I called a couple of condo’s for rent and the landlords all seem to be young. I won’t do the basement thing, not a chance, especially when full condo’s are going for cheaper and now you can get a whole house for $1400 – 1800 +. Oh yah this is a gov town. I feel no shame for renting as I am watching the fundamentals and human nature. The “experts” are more like cheerleaders. Some people who own houses are using them like ATM machines buying BMW’s like they are going out of style.

I have said many times on this sight I don’t relate to any generation but I do relate to like-minded folks across all generations. Garth mentioned before that the beauty of this weblog is that people have an opportunity to share the unbiased truth on their regions. Now I just use the mainstream media to see what the corporations and govs are spouting out as I am interested in tracking their lies and bias. Will help me the next time the herd changes direction towards another cliff. Will travel safely behind taking advantage of their mis-steps.

Potential landlords will be receiving reduced quotes from me, just about every single building in this city (victoria) has multiple rental vacancies for a number of reason, lack of sufficient entry level jobs, lower uni enrollment, older generation moving on, and of course people buying houses..

Now I will no longer warn people, I will sit and wait. They are all big boys and girls and if they don’t care about their futures why should I.

For Vancouver, I lived their for ten years, truly has a new york attitude for a city in the bush. In 2001 on 4th ave in Van (trendy area) could get a one bedroom condo for $169K now Over 500K. Of course sooner or later all condo’s are covered in tarps as they leak. Had a friend who’s grandmother had to fork out 50K to fix the leaks and her condo wasn’t affected.

To all young people out there – do your research and don’t become a greater fool or a slave. You being targeted due to your lack of knowledge. When the boomers bought they paid what 60 -80K and most could make 17-20 dollars an average back then, forestry, fishing, gov, now you are making the same wages to start but your house is 400K plus.

Yah I’ve seem this movie before.

#247 Bill Gable on 01.15.12 at 3:36 pm

“In what’s believed to be a first for B.C., a judge has ordered a condominium owner to sell her suite due to an avalanche of complaints from other owners.

The strata council for a building on in the Vancouver suburb of Surrey took an owner to court after hundreds of complaints had been made about her and her 20-year-old son.

The concerns about Rose Jordison and her son Jordy included excessive noise, abusive language, uttering threats and harassment and took place over several years.

Jordison, who moved into her suite in 2006, was fined $20,000 by the strata council over the course of several years but failed to clean up her act, so the council took her to court.

“In some ways this was the death of a thousand cuts because they’re individually just juvenile,” said Philip Dougan, a lawyer for the strata council. “But over the course of time, (there have been) hundreds and hundreds of times where you’ve been intimidated or sworn at . . . We just couldn’t believe what we were hearing.

“So we wanted it to be sure that this wasn’t a couple of people who had it in for Rose.”

Dougan said he believes it’s the first time in B.C. a strata owner has been ordered to sell a unit over complaints of bylaw infractions.

“There are so many situations just like this one. In our office we call them the strata nazis, the troublemaker in any given building who is just making life miserable for everyone,” said Dougan. “We think this could be a tremendous precedent for stratas to be able to deal with that type of person.”

Dougan said more than half of B.C. residents – about 2.5 million people – currently live in strata buildings.

> Good News for strata owners. After having lived a nightmare in our Condo – we sold, because we knew that the market was done, but equally because the stress of dealing with a cretin on Council was making me physically ill.

http://tinyurl.com/6typwbs

#248 Canadian Watchdog on 01.15.12 at 3:39 pm

I thought this was a ‘narrow blog.’ If you apologize you can stay, and be broadened. — Garth

How could it possibly be narrow when it attracts everyone from first-post Olympic blog sprinters, investors, conspiracy theorists, stock traders, horny home buyers, goldbugs, wealthy couples, Ctrl-C/Ctrl-V economists, mom & dad + kids, chart fabricators, financial advisers and more.

It was a sarcastic remark. My finger was hurting from scrolling up and down the page.

#249 Van guy blazin kush on 01.15.12 at 3:39 pm

#226 bob’s my uncle on 01.15.12 at 1:38 pm
That’s enough of these puerile ‘kush’ references. — Garth

geezz, junkie agents, what is happening to this ‘pathetic blog’
—————————————————————–

I’m not a realtor. And just because I use medicinal marijuana, does not mean I’m a junkie. You guys don’t understand what people like me live through.

Tell us. — Garth

#250 FTP - First Time Poster on 01.15.12 at 3:46 pm

#181 Waterloo Resident

I work in the O&G industry and don’t know of a single 2nd Class Power Eng that makes $63K/yr unless they’re running the locomotive at Ft. Edmonton Park. Corban isn’t smoking anything – I too know guys that pull down that much. Young guys working in Ft. Mac can easily clear $200K without much o/t. Someone who wants to bury themselves in it to get ahead can make $250K no problem.

Your source you cite is probably taking the median wage and even that is low.

#251 ab on 01.15.12 at 4:07 pm

@#214 unbalanced on 01.15.12 at 11:00 am

“To # 199 AB Good for you. Congrats. Thanks for keeping us posted.” – Thank you. Signing papers today.

@#216 Snowboid on 01.15.12 at 11:39 am
“#199 ab on 01.15.12 at 2:10 am…

Good for you, it is a wonderful feeling – and you are no fool.” – It is a great feeling, indeed. I have been a fool, but am learning. Feeling a lot lighter now in spirit.

#252 Dorf on 01.15.12 at 4:10 pm

“If we find ourselves ‘over our heads’ we could off-load the property quickly and at a profit.”

Ha ha ha ha ha ha ha ha. I wish all my investments had this guarantee, where can I get one ?

Lots of people I know, have taken a long time to sell, in the neighborhood of years not months, have spent lots of money in maintenance and repairs, especially from tenants who pay the high rent and think it comes with the licence to phuck the place, and then sell at a loss just to dump it.

Garth, I’ll take a dozen of these income producing, no maintenance, easy to keep rented, guaranteed to sell quickly and at a profit properties, please equip each one with renters who pay the rent in full, on time, and do not wreck the place and stay until the mortgage is paid off and are happy to make me wealthy.

Are they ready yet ? I’m waiting….

If you can’t provide them right now, then I’ll just take an ounce of what Lisa is smoking.

#253 jess on 01.15.12 at 4:10 pm

230 Westernman

Thankyou for clearing that up! I didn’t realize that past events were either right / left or wingding. I long to belong in your group.

Lifton: “The language of the totalist environment is characterized by the thought-terminating cliché. The most far-reaching and complex of human problems are compressed into brief, highly reductive, definitive-sounding phrases, easily memorized and easily expressed. These become the start and finish of any ideological analysis… Totalist language, then, is repetitiously centered on all-encompassing jargon, prematurely abstract, highly categorical, relentlessly judging, and to anyone but its most devoted advocate, deadly dull: in Lionel Trilling’s phrase, ‘the language of nonthought.’…”
http://www.rickross.com/reference/esp/esp11.html#Loading the Language

#254 Dorothy on 01.15.12 at 4:11 pm

#229 – Okanagan Renter
If you are currently in a very high tax bracket, and anticipate being in a much lower tax bracket following retirement, then RRSP’s are a good place to put your money. Ditto if you work for an employer who will match your RRSP contributions, because the match alone gives you an effective 100% interest rate.

However, if you are currently in one of the lower tax brackets, and anticipate being in the same or higher tax bracket following retirement, then RRSP investing is not for you.

One final thought, if your $35.000 was in the form of a gift, or an inheritance, and not subject to tax, then you should not put it into an RRSP because it will become taxable when you withdraw it. You don’t want to wind up paying tax on money that was originally tax free.

#255 Westernman on 01.15.12 at 4:30 pm

Jess@#244,
This Lifton guy is wrong: a lot of cliche’s are not thought-terminating but a time saving,compact,thought vehicals to allow people to exspress themselves accurately and without wasting a lot of time needlessly pontificating.
So they allow someone to make a point without wasting all day doing it.
This is a valuable and useful thing for people who have constructive and important things to do – I know, I know… that is hard for someone like you to believe but yes, some of us actually do things, Jess, like have jobs etc.
Unlike you, of course, who have nothing better to do than peruse communist literature whist lounging in your parents basement and smoking dope…

#256 bigrider on 01.15.12 at 4:39 pm

It would be great Garth to see you give a missive on why your views regarding global debt and the risks of sovereign defaults do not seem to be as dire as some of the high profile people who are warning so strongly.( Kyle Bass, Eric Sprott, Roubini, J Rogers, etc etc.

Why do you feel the world is not on the precipous of a deflationary collapse of biblical proportions.

#257 DM @ YYJ on 01.15.12 at 4:40 pm

@ Waterloo Resident #181.
From a distance it may be difficult to understand local market factors. To compare a Southern Alberta Meat Packing Plant to an oil patch camp job is a reach. Being skeptical is valuable, but be aware that sometimes things that seem crazy are true, like 150k/year for a camp electrician near Ft. Mc.

#258 Oh Canada on 01.15.12 at 4:54 pm

CANADA HIGHEST PUBLIC DEBT NATION

http://campaign.r20.constantcontact.com/render?llr=orkbnrcab&v=001rxOp_4aBK0ogRt3C1V0C62drE58RIdyCBuTJolSsOb8zRyzrlVfqR4jdEbedyt-mf3ITVOFTzrBBLlBqwIL6V2tY27yr9jZQ2bXxcIpwalY%3D

#259 DonDWest on 01.15.12 at 5:00 pm

“To all young people out there – do your research and don’t become a greater fool or a slave. You being targeted due to your lack of knowledge. When the boomers bought they paid what 60 -80K and most could make 17-20 dollars an average back then, forestry, fishing, gov, now you are making the same wages to start but your house is 400K plus.

Yah I’ve seem this movie before.”

That’s what I’ve been saying all along, but I’ve been called a whiner for bringing it up. If I had to pay now what the boomers paid then I’d already be retired at age 30. . .

#260 Westernman on 01.15.12 at 5:17 pm

DonDWest,
Marvelous post…it has your signiture of a whining hopeless victim all over it.
Remember the bridge option… there’s no reason for you to continue this cold and empty life….

Counseling suicide over the Internet is a criminal offence. Does Mr. Harper know you borrowed the PMO iPad? — Garth

#261 Westernman on 01.15.12 at 5:22 pm

Garth,
What’s a PMO iPad?

Conservative bladder protection. — Garth

#262 Junius on 01.15.12 at 5:30 pm

#239 Imposter,

I am with Westernman and somehow gettting imposters. Yet another example of how desperate the realtor trolls on this Blog have become. Fascinating. Probably BPOE who is still delusionally thinking this is all about the HST.

Just to be clear, i don’t blame realtors for our current state. That I leave to our politicians and the banksters. However the pumpers like BPOE and others that come here do deserve to be called out.

#263 bigrider on 01.15.12 at 5:45 pm

Suggested reading for all including Garth.

Book title “This time is different” by Carmen Reinhart and
Kenneth Rogoff.

After reading it , a 60% allocation to cash may not be too high but maybe to low after all.

Read it. If you’re already wealthy, cash is fine. The other 99% need to invest. — Garth

#264 jess on 01.15.12 at 5:56 pm

westernman

I didn’t know i was such a multi- tasker in that while i may not have a have a pot to piss in, i can be smoking the pot at the same time.

#265 Onemorething on 01.15.12 at 6:00 pm

Since Japan is best known for the “lost decade” does anyone know how the RE market performs there considering it’s ultra low interest rates for such a long period of time? Any anecdotal evidence to bring to the table?
Thx!

The residential market lost between 40% and 80% of its value, and never recovered. Low rates did not stimulate investment in the absence of economic growth. — Garth

Yup and now they want to double their sales tax rate by 2015! This is exactly how you fail as consumers retrench, your currency goes sky high and exports fail further!

Japan is a poster child for the USA and essentially the ROW (Rest Of World).

#266 Kaganovich on 01.15.12 at 6:02 pm

230 Westernman wrote “I have better things to do with my time than indoctrinate myself on left-wing counter- culture fruitcake propaganda…”

Really? What ‘better things’ do you do? Ad hominem arguing and the relentless voicing of baseless assumptions and stereotypes seem to be what you do based on what I see from your comments. What else do you do with your time when it isn’t spent doing the above?

#267 TurnerNation on 01.15.12 at 6:12 pm

A look at a few crazy Toronto sales – semi detached junkers that cost 1/2 million+.

http://www.thegridto.com/life/real-estate/houses-that-were-loved-and-left/

108 Springhurst Ave.
Neighbourhood Parkdale
List price $499,900 | Sold price $600,000
Last sold price $400,000 (2006)
The skinny Split into two apartments, this 3,090-square-foot house is kinda perfect for a buyer looking for an income property that could one day be a single-family home. There’s some cosmetic wear and tear (and very ugly bathroom tiling), but also updated wiring, 10-foot ceilings, leaded windows and fireplaces. It’s also within earshot of the GO.

#268 Westernman on 01.15.12 at 6:34 pm

Kaganovitch@#264,
What else do i do with my time?
I like to work on top secret projects in my sub-terranian laboratory…

#269 Van guy on 01.15.12 at 6:35 pm

Garth,

Chronic arthritis and sleeping disorders. As displayed by this blog, I’m probably going to get insulted for my disabilities.

Just wondered. — Garth

#270 Okanagan Renter on 01.15.12 at 6:43 pm

#252 Dorothy, that’s the conventional wisdom I’ve subscribed to up to now. But Garth appears to suggest that there may be better alternatives to RRSPs as a whole.

I can’t disclose the source of my discretionary investment cash because it may “out” my identity to friends and family who read this blog (assuming they haven’t figure it out from my previous posts extolling the virtues of my fab rented condo), but your point about not investing non-taxed revenue into RRSPs makes sound financial sense of course. I pity the newlyweds who invested most of the cash proceeds from their wedding presents into RRSPs just as TFSAs kicked in.

#271 Timing is Everything on 01.15.12 at 6:47 pm

Westernman, FYI

Counselling or aiding suicide

241. Every one who

(a) counsels a person to commit suicide, or

(b) aids or abets a person to commit suicide,

whether suicide ensues or not, is guilty of an indictable offence and liable to imprisonment for a term not exceeding fourteen years.

R.S., 1985, c. C-46, s. 241;
R.S., 1985, c. 27 (1st Supp.), s. 7.

http://laws-lois.justice.gc.ca/eng/acts/C-46/page-110.html#h-79

#272 Herb on 01.15.12 at 7:25 pm

Westernmoron as a Prime Ministerial Operative! This country is so screwed.

#273 Guy1 on 01.15.12 at 7:45 pm

Re. #204 Malarkey on 01.15.12 at 3:20 am

It’s funny that you brought up the example that you did… as one of my former neighbours in PEI has a son with Tattoos and a motorcycle. :.) There is an unusual mix of modernity and traditional values on PEI – more than perhaps many people realise. But, I do take your points. There is an issue of exclusivity in certain seemingly idyllic areas of Canada. I wouldn’t want people to be under the illusion that every spot i.e., on PEI is the same – as with everywhere, you have to do your research which includes meeting your neighbours before purchasing property(ies) to avoid any unexpected surprises. Although, these days, as Garth suggests, there are much better investments. And, while I’m in Victoria, you’re absolutely right… reaching out to people here is as important as any other place… thanks for the reminder.

#274 Guy1 on 01.15.12 at 8:41 pm

Re. #267 Van guy on 01.15.12 at 6:35 pm

Unfortunately, there are many disabilities that go unrecognised or are misdiagnosed in society, but there are more people with dignity and compassion than not who will understand or will come to understand suffering however it’s manifested.

#275 Guy1 on 01.15.12 at 9:50 pm

I have a suggestion and perhaps it can turn into a national obsession. I think it’s fine to blow off steam from time to time or even to swear if it’s in context… if it’s humorous and meant with no true ill-intent. But, I’ve been sensing something much more questionable happening in recent years on blogs, commentary sections, etc. Sooo… With respect to how we talk to one another in the context of blogs and such, perhaps we should be raising the bar higher… in so far as that which most normal people consider respectful behaviour is at risk of being indirectly censored by more questionable commentary the extreme of which can be potentially dangerous… there is the risk that we could be indirectly normalising abnormal behaviour that has the potential of disrupting or harming other lives. Some people are emotionally tough and others less so. I am from a family of loving and courageous soldiers, hardened but highly, highly professional businessman, and compassionate healthcare workers. It is in this latter context that I invite everyone to read the following as a way of better identifying what is healthy and what is clearly unhealthy behaviour with regards to blogging and any other form of communication: http://en.wikipedia.org/wiki/Psychopathy The art of writing isn’t simply an art, but rather a means of addressing one’s fellow human beings. How we speak to each other counts, and in reading the latter website, I think we will be in a better position to identify and address problematic behaviours.

#276 disciple on 01.16.12 at 11:36 am

Guy1… I have to be honest, and don’t take this the wrong way, you’re probably a nice guy… to your inner circle of family and friends anyway, but you thoroughly irritate me. It’s not so much your cleverly veiled hatred for anyone not like you, but it’s your pretentious assumption that anyone with any critical reading skills on this blog would actually believe anything further you write after all the logical blunders you have made thus far. And the list is growing with each post.

Therefore, I kindly and gently ask that you strongly consider your redundant repose of stating obvious moral platitudes that everyone knows whether they were brought up Catholic or not while you’re ahead. Yes, the world is changing, but you’re centuries behind, my friend. We don’t need what you’re selling. I’m sorry. You define your worth through the artificial and empty construct that is your culture. Big mistake. In all your exotic travels, yet you remain lost. The blind leading the blind. What you are truly seeking, is ritual. I’m surprised that you haven’t realized this. Unless of course, you’re lying about something, or many things…

#277 disciple on 01.16.12 at 11:45 am

To continue with my deconstruction of Guy1… you come from a family of institutional warmongerers and murderers (soldiers), legal thieves (hardened professional businessmen), and women who trade money for “compassionate care” (medical mafia). I am not insulting any of these noble professions, but… can you not see what you are doing? If someone does not emanate from such an exemplary line of DNA such as yours, does it make them any less worthy? Does any of the above matter? To anyone? And if so, how so? Like I said, you continue to irritate me.

#278 zeeman1 on 01.16.12 at 5:02 pm

#27 zman.

Get a new name if you’re gonna ask dumb questions.

#279 Guy1 on 01.17.12 at 6:35 am

#278 disciple on 01.16.12 at 11:36 am

You make a lot of suppositions about what I say and who I am. There is no lack of logic in what I have presented but rather your own interpretation of what I have said has led you to believe that what I’ve written is illogical. You seem to value deductive reasoning as your method of containing my arguments… when there are many qualitative researchers who value the very human tendency towards seemingly inconsistent praxis – prefering to see the value in the whole message rather than mechanistically lining up its individual parts. And, indeed, a seasoned and tolerant ethnographer would have given me the benefit of the doubt and asked more questions concerning context rather than just simply venting steam… Your arguments might be stronger and reach more people if you left your negative emotions out of the conversation… emotions that at their extreme end lead to what I was referring to in #277.

#280 BMO – Left Hand Stop; Right Hand Go | Vancouver Real Estate Anecdote Archive on 01.17.12 at 10:12 am

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