Spectator sports

It ain’t exactly the Super Bowl, but waiting for Canadian real estate to crash is now a US spectator sport. I mean, listen to this: “It is clear that the Canadian housing market has undergone a debt-fueled asset price inflation.” Such a statement is worthy of this pathetic blog (where it can be safely ignored, like John Baird), but it takes on a new import coming from a global investment site which (horrors) horny Asians might read.

In fact, the Canuckistan housing melt is big news. Last week Bloomberg was the first to pounce on documents released by the bank regulator in Ottawa throwing up alarm over Canadian subprimes, condo dangers and the exposure of lenders to meltdown. Then The Economist magazine estimated prices here could be too high by a riveting seventy per cent. Now the Wall Street Journal has jumped on the exposure Canada’s federal government has to excessive mortgage lending, in the wake of CMHC nearing its lending limit and the inevitability of a correction

“For years, Canadian bankers have argued that government backing of the country’s riskiest mortgages makes a U.S.-style housing and banking crisis unlikely,” the paper reported. “But as Canadian personal and mortgage borrowing continues to climb, international watchdogs have called on the government to better assess the risk that the high debt load now poses–not to the country’s banking system–but to government coffers.”

Hmmm. Lenders at risk. Government at risk. What else could possibly go wrong?

Well, according to Seeking Alpha, just about everything. In a two-parter cheerfully entitled, “Canadian Housing Market Collapse, the investment site compares and contrasts the American market and ours in terms of asset overvaluation. How this happened is irrelevant. The important thing to remember is that all assets eventually return to the mean which, for real estate, is usually determined by inflation.

US house prices, for example, tracked inflation fairly tightly until about 2000, when cheap rates and a distrust of stocks sent real estate ballistic. When the inevitable correction happened (deflation – returning prices to the mean) this asset class lost about a quarter of its total decline in the first year, three-quarters by the end of the second year and about 90% after three years. After five years now, it’s nearing the bottom. And in Canada we haven’t yet started.

Here house prices also grew along with the inflation rate until about the time Nortel crashed, and mortgage rates plopped. Then the surge began, lifting values close to 80%. Now a detached home in Toronto commands $750,000 and one in Vancouver is $1.1 million. The average Canadian house, for the first time, costs twice what Americans pay. Our personal debt surpasses theirs (another record) and Toronto has 300% more condo towers under construction than does New York.

So what happens next?

Says Alpha: “On average, housing prices will correct by about 25-30% across Canada, with some of the extremely overvalued markets (i.e.: Vancouver) declining more like 40% or more. If the Canadian housing market crash behaves like the USA one, expect most of the losses to occur in the first two years, and then slow down after that. Canadian banks will suffer, and may need a bailout. They are over-leveraged and over-exposed to housing market debt. I will not be surprised to see a Canadian banking crisis emerge in the next few years, and government bailouts to go with them.”

A Van house costing $800,000 today, we’re told, will eventually sell for $502,743, while the average $475,000 Toronto home will end up being $371,462. And this whole process will last as long as the American melt – something like five years.

Credible analysis? Actually it’s not far off the conclusions this oversexed blog reached in the sordid past, although a housing crash would end up being more F’s problem than that of the big banks, thanks to CHMC. But the big news here is that Canadian real estate is famous! In all the wrong ways! We’re screwed!

Imagine you’re in Guangdong, overseeing your industrial empire brimming with peasant labourers, feeling all horny about the west side of Vancouver, sipping tea and reading your Wall Street Journal and suddenly happen upon a story warning of Canadian collapse. This is how hot Asian money gets a cold.

Meanwhile, of course, mortgage rates are going up.

BMO killed off its 2.99 Special, now the Royal has raised rates on its four-year fixed by almost half a point, and bumped the fiver to 4.04%. The other banks will follow – just weeks ahead of the next federal budget expected to move again to deflate the gasbag before it ignites. Neither the feds nor Brother Carney at the BoC were happy with the mortgage war, the media slobbering it engendered nor the deluge of new borrowing.

I hope you’re ready. The second half could be a killer.

288 comments ↓

#1 NDtrader on 02.06.12 at 10:43 pm

first?

#2 Darren on 02.06.12 at 10:48 pm

We’re screwed

#3 grantmi on 02.06.12 at 10:48 pm

Holy Ship….

Fraser Valley Real Estate Tanking!!

http://www.fvreb.bc.ca/statistics/Package%20201201.pdf

#4 Josef on 02.06.12 at 10:50 pm

First!!! Oh YEAH BABY!!!!! Yeah!!!

#5 Mr. Lee on 02.06.12 at 10:51 pm

When reality sets in, it really sucks. This blog is hard on the fools that feverishly rushed in on real estate. Let us keep these people in our prayers as they will be facing some very hard years ahead.

#6 P & T S on 02.06.12 at 10:54 pm

If even a 15% correction will hurt, what will a 25-30% correction feel like? This is going to be a BIG fall in “perceived wealth” and it’s the perceived wealth that lubricates the wheels of discretionary spending. Less DS, then less taxation opportunity, loss of the chain of employment associated with DS, increases in demand on the Public purse (Social Security outgoings), at a time when a chunk of the workforce are preparing to call it a day and “retire in comfort”.

There’s going to be helluva lot of firmly zipped-up pocketbooks in the near future; maybe time to invest in Kraft / Purina Shares ? ? ?

#7 Van guy the REALTOR® on 02.06.12 at 10:55 pm

A $800,000 Vancouver home will be $502,000? That’s still half a million for a crack shack.

#8 2muchdebt on 02.06.12 at 10:56 pm

This will all end badly, we are no different than every other developed country. Australia is having their “correction” now its our turn…oh wait….ours is just a balloon, we are different.

#9 Josh on 02.06.12 at 10:57 pm

Soooo glad I got out of our overpriced condo in Coq, and now we are renting in Vic until like you said the prices of housing revert to the mean adjusted for inflation.

The sad thing is I know boomers who raised kids and now are having the very real possibility of being foreclosed on after losing a job and not finding something new. This is not going to be pretty. You may gloat over your neighbour losing his socks but you should pray for these people who got suckered in with the rest of them. Really, pray for them.

The 20 somethings like us but who get in over their heads well they are young, and can survive a bankruptcy right?

#10 P & T S on 02.06.12 at 10:58 pm

- Also great picture as usual! It’s not the idiot on the cellphone I worry about, but the flotilla of idiots who feel it’s OK to be texting on their Smartphones whilst driving – and what about the unfortunate victims of these crazies?

No wonder the Insurance Industry is doing so very well.

#11 Victor on 02.06.12 at 10:59 pm

Another article about TD’s interest rate hike on unsecured LOCs:

http://www.theglobeandmail.com/globe-investor/personal-finance/rob-carrick/customers-feel-the-pinch-as-banks-cut-risks/article2328581/

#12 Young Old Fart on 02.06.12 at 11:02 pm

#4 Josef on 02.06.12 at 10:50 pm
First!!! Oh YEAH BABY!!!!! Yeah!!!

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

Out by 7 minutes…….

#13 T.O. Bubble Boy on 02.06.12 at 11:03 pm

Seeking Alpha? Not exactly the most credible posters on that site… Many are about as accurate as a Flaherty economic forecast.

(but, in this case, maybe they’re right.)

#14 tkid on 02.06.12 at 11:05 pm

Program to watch courtesy of PBS’ Frontline: “The Card Game”.

I don’t know if Canucks are allowed to watch PBS’s videos, but this episode is also available on Itunes Canada for a toonie.

The program outlines some of the shenanigans the US banks got up to, and if things get bad up here, might come north of the border? The practices on overdraft fees were a real eye opener.

#15 mark on 02.06.12 at 11:07 pm

Garth: “all assets eventually return to the mean”

and they seldom, if ever stop at the mean

they usually overshoot and undershoot — to borrow the phrase from Soros

#16 Russell on 02.06.12 at 11:08 pm

Only one thing that goes up and never comes down is your age, that’s it. In Vancouver most people have just rented money for the last few years. Anyone in the second mortgage biz or a mic is going to learn what their broker should have told them when getting started, big markets tend to swing for the fences. Batter up!

#17 Joseph [Original] on 02.06.12 at 11:10 pm

This is not going to happen in Canada. I think it’s high time that we on this blog recognize that housing is the national religion of this ethnic-centric country. I don’t see any of this happening at all. Real estate is perceived as better than gold in Canada. In Canada’s ethnic groups, if you don’t own a house you are looked down upon, in some cases as worse than scum – a total loser. Garth’s renting mantra isn’t going to prosletyze a single second-or-third generation immigrant. House lust will continue, though at a more tapered pace.

#18 Steven Rowlandson on 02.06.12 at 11:11 pm

Garth when the real estate market bites the government in the back side who is going to ask Stephen Harper and his fellow travellers what its like to be financial geniuses?

#19 dutch4505 on 02.06.12 at 11:12 pm

Hopefully Canadians will continue to buy in Whatcom county. (located on border south of Vancouver) It sure is helping our economy.

Nephew is a banker in a city of 20,000 in Minnesota. In 2011 they only had two building permits for residential housing. This is one side effect of a weak housing market. Contruction workers laid off by the thousands.

My guess is that housing in Canada will wind down slowly, which will still be painful. Wondering when my brother in law in Port Moody BC will figure out that his 600,000 house which is 650 sq ft, will not reach one million in value within 5 years. Yes it will be painful.

#20 Smoking Man on 02.06.12 at 11:12 pm

The Rebuttal

#97 Smoking Man’s Spell Checker on 02.06.12 at 12:17 am
Yeah…. too big of a job…. I quit.

That was from yesterday. Ha Ha you’re an idiot…….

Garth ended his post with OMG. Is that a word? I think not, but we all know what it means Then we have LOL LMFAO etc etc.

I pose this to the Nazi Grammar Police, why are those words not singled out for retribution.?

I’ll tell you why, because most of you did not endure for 12 to 24 years with an authority figure (teacher) telling you OMG was bad, but spell speeling wrong and all hell brakes lose. (And I know the “brakes” is the wrong one and I don’t give a flying F). Have any of you pondered why the F word is branded so bad, it’s because the machine has no idea on how to define it in a dictionary, they’re suppose to be smart . So the literarti void of any creativity call it a bad word. Cop out I say. It’s a beautiful word can be used so many ways, every human I ever meet uses it, or will use it. Lets not shame the literarti and show it on TV.

This is but a small sample of your enslavement, I go out of my way not to grammatically speel well, (Garth Figured it out) to do so would be me indorsing a system, that’s sole purpose is to create obedient servants, and not Traders, buyers and sellers, deal makers and free people, after all I’m an educator, and a damn good one.

Look at the point I just made.

It’s too bad that many of you have had the cement already dry between your ears and I can’t save you.

You think you’re a success when the Gov’t takes 47% from you pay check. You have a diploma in your cube, and big student debt to go with it. In my eyes that makes you loser, when all the information you could possibly learn in school and then some is available free of charge on the web. And those University text books that cost a fortune, who’s shelf life expires in and around the day the semester is over, killing any resale value are sold to the greater fools by another smoking man. At leased my twin knows how to do it.

O ya I forgot you need the diploma to show you prospective master that you went to memorize regurgitate slave training and this is proof as you get on your hands and knees begging to be a slave.. While your parents praise and brag about you. LMFAO

Show of hands how many of you bought and sold something today and made a profit/loss.

That’s why Real Estate in the GTA will be hot for a long time………Lots of Diploma grad’s with stupid parents competing with each other. Financing the bubble.

After faking going broke, my kids have changed, they are hungry, they are use to a good life style and the only way to maintain it is to become a SMOKING MAN themselves.

Shit I do for my kids.

#21 Two-thirds on 02.06.12 at 11:14 pm

If F follows his previous behavior, he will give plenty of time for any potential new rules to take effect, thus juicing up the spring market one last time. It is doubtful he will make the measures “effective immediately.”

His goal would be to attempt to engineer a RE soft-landing.

Garth, do you have any insights about the date for the release of the budget?

I must make sure there is space on my calendar to read it from cover to cover. :)

#22 Throwstone on 02.06.12 at 11:14 pm

Good post G!

I speculate F will be the little prick this bubble needs.

He will not raise the debt ceiling for CMHC and creditors will be tighter than two coats of paint.

What ever happens afterwards is just collateral damage.

#23 JW on 02.06.12 at 11:15 pm

Van city has always felt different. You always hear “everyone wants to move here” It’s been 10 years now of the can’t lose attitude. Back in 2002, we bought a higher end one bed + den sexy kits condo of 770 squares almost 10 years ago. It seemed expensive at the time at 225k; sold it 18 months later to move overseas for 320k. The last I heard it was listed for about 550k. Wow. The entire city is has been on a real estate high for far too long. People have given up on calling a correction, and most that were leery and skeptical just eventually said… ” well, I guess it just IS different here”. To be honest, the correction NEEDS to be of large proportions, of about 40%, just to get back to the normalized 4-5 times income level.

Patiently waiting…. popcorn in hand ! Thanks Garth, I love sports !

#24 McLovin on 02.06.12 at 11:18 pm

While I agree with most of what was said by the SA article. I don’t see Canadian banks needing a bailout. Most of their mortgages are guaranteed by CHMC (re: you and me) they will take only a small hit.

#25 GC on 02.06.12 at 11:19 pm

This is not good. I know its coming, and I am a general contractor. We do renovations and build new homes. Either I have to change careers, or maybe start building rentals!? Any advice?

#26 Don on 02.06.12 at 11:25 pm

Just heard that a friend has put an offer on a east van house, near a well known needle park. The house built in 1919, but was refurbished….lol. The couple has to pay $17,000 out of pocket for CHMC as they are not putting down 20%. I guess people don’t read the news anymore, even is the news is biased it is still useful to see what the MSM is trying to discount. When you read the news think the opposite and do your due diligence.

These days an air head can enter University and come out a bubble head….sorry I mean an inflated balloon that is stretched beyond the realm of sustainability.

Paper doesn’t make you an educated person – experience does. I’m not warning people anymore – I’m too busy making POPcorn for the main feature.

I am well aware of the Vancouver mentality – and they will go down with the air balloon. Wonder if Sherry Cooper sold he house yet?

#27 John on 02.06.12 at 11:26 pm

Garth, you frequently point likr to trot out the phrase ‘ its different this time’ or something like that when people try and reason why realestate won’t go down, but really , without a loss of jobs and resulting foreclosures it really would have to be different here for realestate to go down, people do not voluntarily sell there homes for less then they paid unlesss they have to, in the us many couldn’t afford the resets on the exotic mrtgages and this started a collapse in prices and house construction that snowballed, without some event that results in people not being able to pay there mortgages it really would have to be different here for these doomsday predictions to come true.

#28 Don on 02.06.12 at 11:27 pm

The house in my last post has a ticket price of $700, 000.

You could built a mansion for that.

#29 John on 02.06.12 at 11:27 pm

Garth, you frequently point trot out the phrase ‘ its different this time’ or something like that when people try and reason why realestate won’t go down, but really , without a loss of jobs and resulting foreclosures it really would have to be different here for realestate to go down, people do not voluntarily sell there homes for less then they paid unless they have to, in the us many couldn’t afford the resets on the exotic mrtgages and this started a collapse in prices and house construction that snowballed, without some event that results in people not being able to pay their mortgages it really would have to be different here for these doomsday predictions to come true.

#30 shanks on 02.06.12 at 11:28 pm

Garth, what do you think of buying a piece of land in the hills between montreal and ottawa, no buildings on it, just land, for what seems to be cheap? could really use your advice on this one…

There’s a reason it’s cheap. — Garth

#31 DodgedBullet on 02.06.12 at 11:29 pm

Garth,

“…Then The Economist magazine estimated prices here could be too high by a riveting seventy per cent.”

70% really? I thought to mention as it seems like a typo.

Bests,

Ben.

#32 Sebee on 02.06.12 at 11:32 pm

I understand the numbers and forecasts. I heard it for so long I’m exhausted. Yes, it all makes sense. But the impact on employment would be so huge that it’s no wonder the Fed is doing all it can to keep it going or to deflate it slowly. When you consider the human collateral and mess they would have to deal with you can see why I believe they will stop at nothing to prevent the crash. Can anyone honestly say they haven’t done the job so far?

#33 P & T S on 02.06.12 at 11:37 pm

Menwhile back in the US of A, looks like Mr Obama may not be such a bad choice for re-election after all, considering the “principal opponents” in the Republican camp . . .

http://www.aljazeera.com/indepth/opinion/2012/02/20122164215194680.html

Nothing quite as nice as “welfare for the already well off” is there, and with this entrenched mindset it’s going to be “more of the same” which has led to all the current problems, rather than the necessary (but painful) change in thinking.

“Beam us up, Scotty!”

#34 Devore on 02.06.12 at 11:38 pm

Meanwhile, in Richmond and Vancouver West, the CNY (Chinese New Year) has been celebrated quietly. I guess the HAM stayed indoors and sipped ice wine, instead of blitzing open houses.

#35 Sherry on 02.06.12 at 11:39 pm

#7 Just as a RE bubble is illogical; corrections can be too. Who says a correction means housing returns to ground level right away? Humans being such emotional things, usually a severe swing in one direction (irrational price run-up) engenders a just a severe swing in the opposite before the “realistic” ground is found. Jung called this enantiodromia. Look for prices to swing too low for a few years; the US is the best example.

#36 a prairie dawg on 02.06.12 at 11:44 pm

#20 Smoking Man

Garth ended his post with OMG. Is that a word?

– — –

No. It’s an acronym. You must have missed that school year. lol

#37 Junius on 02.06.12 at 11:47 pm

#17 Joseph [Original],

Why don’t you write something original? Same, same.

The end is here.

#38 Cato on 02.06.12 at 11:50 pm

As vilified as US short sellers were they were instrumental in finally popping the US housing bubble and waking up the financial world to obscene property valuations. Once the match was lit all hell broke loose and deleveraging began on a global scale.

Whats the first thing Canada did during this period? It removed 80B of risk off the big banks and onto the taxpayer. This was wholly unnecessary, a political decision that carried consequences. It changed the attitude towards risk of the banks.

We like our markets and economy heavily controlled and managed. We’ve created moral hazard on a scale worse than the US. The counter balance to moral hazard was short selling, we lack a similar mechanism in Canada.

What is about to happen in Canada is going to be a unique experience, perhaps only matched by our Australian cousins. In every other region of the world banks were punished for their toxicity & perceived risk. Sure, they required emergency bailouts but the bubble was halted by the banks inability to lend to new borrowers. If left to their own devices the banks would have kept the bubble going until the last sucker had finally bought a home, with even greater disastrous consequences.

Our banks will never be exposed to punishment by the markets, regardless of how bad their behavior. Moral hazard will keep the Canadian bubble going until the bitter end. I fear our banks will continue to lend until the last sucker has come through the door.

Here’s the truly frightening thought. We make comparisons to the US cycle thinking we are simply following a delayed version of it but the US bubble was cut short before it could grow to it natural conclusion. What if we’ve actually surpassed the point of US inflection and are now even more overvalued than the US ever was. Maybe we aren’t the US at all, maybe we are something worse.

#39 Shameless on 02.06.12 at 11:52 pm

I really think the missing item in all of Garth’s analysis is what will prompt the increase in supply. The average Canadian sitting on one of these overvalued homes has no reason to sell or move. Most Canadian’s are still affording their mortgage. Prices will continue to increase throughout 2012. As a realtor I see massive pent up demand and mortgage rates going up a little on fixed mortgages means little as the majority of the spring market has locked in on rates and grabbed the 10 year 3.8%. Folks don’t get sucked into the mother of all real estate propaganda on this website and in these publications, look around, talk to your neighbors check out the MLS. The housing market continues on and will through 2012. All of you on the sideline, expect to be there for at least another 2-3 years while prices continue to grow.

#40 Canadian Watchdog on 02.06.12 at 11:59 pm

WHY DEMAND WILL NOT LAST

Last year the market already sucked in the bulk of investors who at that time were undecided or waiting for a good mortgage deal. This was due to new rules effective March 18 2011. Remember at that time nobody assumed rates would be lower so this was a ‘now or never’ moment.

In the chart below you can see how the trend was broken in terms of number of mortgages issued that resulted in an eight year high above average. In technical analysis, when an organic trend is broken by this amount, implies some other factors are at play. This was the rush to beat the deadline.

http://i40.tinypic.com/zx8mbp.png

The next chart below is charted from The Bank of Canada’s monthly financial report that contains all residential mortgage credit (including MBS) held by chartered banks and other institutions. The chart is indexed on a percentage basis showing the relative yearly performance from Jan-Feb. Again we see the March peak reaching the second highest level in eight years followed by a winding down into the summer and rising again toward the end of the year. In contrary to a record number of monthly mortgages, the overall rate of growth did not exceed any year before 2008.

http://i39.tinypic.com/68g5sg.png

So even with record low rates we are seeing poor performance in terms of credit growth, including the fact that lenders have been streamlining low-income individuals. The market has now exhausted the bulk of undecided investors, fast track immigrants and self employed workers, which leaves one last question: Who else can carry the next boom when Canadian student loan debt now stands at $27,000?

You can lead a horse to liquidity, but you can’t make him borrow.

#41 Devore on 02.07.12 at 12:00 am

#17 Joseph [Original]

You’re completely missing the point, as usual. It. Doesn’t. Matter. What. People. Believe.

#42 Smoking Man on 02.07.12 at 12:02 am

#36 a prairie dawg on 02.06.12 at 11:44 pm

Please don’t tell me you are a cement head, I could not spell acronym, Hounest

#43 nonplused on 02.07.12 at 12:04 am

The second half is looking grim in more ways than just housing, Garth. Here in Alberta we a looking at another big swing south in the oil and gas industry. On the gas side, the Americans just keep producing more of it themselves with this shale gas thing, to the point where they are exporting it into Ontario now. Alberta’s (and BC’s) market share just keeps slipping, to the point where there will be shut-ins in Alberta this summer. It’s guaranteed.

Shut in gas that’s not selling for the low price of $2/mmbtu isn’t going to be doing the Alberta government any favours, and they are already in deficit.

Of course we still have oil, but without Keystone we can’t get it to market.

There is already a lot of talk in the corporate boardrooms in downtown Calgary that the cuts will be extreme in anything dry gas related. Shoot, we are only 3 years from the last big crash! These swings are getting too extreme.

What we need to do is turn Keystone around about 110 degrees and point it at the west coast. Also, the planned pipeline and LNG terminals need to be resized for at least 5 bcf/d. But even if we had the will to do it, it would take 5 years if we started now.

Looking at some of the other provinces, well in BC neither the gas nor the trees are even worth burning. In Saskatewan they have oil but again no market. Manitoba is all about Revenue Canada so they should be ok unless RevCan scales back tax collection owing to the fact that nobody has any money. In Ontario you have RIM on suicide watch. They’ve fallen behind and they can’t catch up, which in the tech world is a death sentence. They had a good product, but now that smartphones have gone consumer it’s all about flash and momentum, selling good products cheaply to businesses isn’t going to bring home the bacon anymore. Especially now that all the business users want the same experience their kids are having on their iPhones and Samsung Galaxies. Quebec Hydro is about to be backed into the province by the US efforts to use up some of their gas to make electricity themselves, and the Maritimes will suffer too now that Westjet won’t be chartering so many planes between Fredericton and Fort Mac.

Yep, it’s going to be an interesting year! Second half especially. Not as rapid and dramatic as 2008, but more long lasting. The second half of 2012 might last for 5 years!

And I didn’t even mention all the personal debt, which is going to be very hard to pay off now. Or the war on Iran, which is going to cause some serious inflation. Even here. On the bright side the war should save the US the cost of scraping the Enterprise in 2015, but I don’t know what good that will do us.

#44 Devil's Advocate on 02.07.12 at 12:04 am

#224 Form Man on 02.06.12 at 8:54 pm
#213 DA

that is very interesting. Given the title, I had no idea Mr. Keller’s book dealt with the Harper government’s intervention in the Canadian mortgage market in the autumn of 2008.

Hey don’t read it if you don’t want to Form Man. One last time the book is “SHIFT; How Top Real Estate Agents Handle Tough Times”. I challenge you, and all the blog dogs, to read that book and tell me it was not worth your while.

#228 Devore on 02.06.12 at 9:18 pm
How ridiculous of DA to say the CREA is a “just the facts ma’am” organization, and they don’t care if prices are falling or going up. They are a marketing organization for realtors(tm), which is all about perception and sentiment. Lower prices means fewer sales (as people, virtually none of whom need to buy, wait for even lower prices), and fewer sales at lower prices means fewer realtors making less money. This makes CREA very unhappy. Total value of sales (all sales added up) directly impacts CREA’s bottom line.
HPI is a farce. The market needs MORE information, not less. This is all about making up numbers to suit agenda. The only scientific thing about it is that at some point, someone plots this thing on a graph.

#232 TurnerNation on 02.06.12 at 9:47 pm
#131Devil’s Advocate on 02.06.12 at 9:48 am
Took the weekend off? The weekends, when working people look for a house? The weekend where lookie-lous drive around, call for questions?
The weekend off? My it must be dead out there!!!!!!

You two really do have a stereotypical misunderstanding of the business don’t you?

#45 Preciouss on 02.07.12 at 12:05 am

For me, it hit home at halftime, when Madonna was paraded on stage by the faux Roman Empire servants.

Lots of balls have been dropped.

History, as always, is destined to repeat.

#46 americanadian on 02.07.12 at 12:11 am

Canadian Housing will crash…no real surprise. What will be interesting will be the catalyst that finally pops the bubble.

In the U.S. on the other hand, the data continues to support the idea that the worst has passed.

http://www.calculatedriskblog.com/search?updated-max=2012-02-04T13:21:00-05:00&max-results=5

#47 Temenos on 02.07.12 at 12:14 am

200 million Chinese are urbanizing over the next 15 years. According to Shanghai’s Hurun Institute, half of China’s millionaires want to leave, of which 50% prefer Canada. 70% reductions in Vancouver Real Estate is absurd, as immigrants love Real Estate, and Vancouver is an immigrant city!

#48 Lorne on 02.07.12 at 12:16 am

Holy Ship….

Fraser Valley Real Estate Tanking!!

http://www.fvreb.bc.ca/statistics/Package%20201201.pdf

Nice they can use the word “benchmark” and then not fully explain what it means! Anybody?

#49 Sebee on 02.07.12 at 12:16 am

Australia is getting it done.

http://m.smh.com.au/business/property-crash-just-a-myth-20120201-1qtcz.html

Now what? I think we compare better to Australia not to US.

#50 Temenos on 02.07.12 at 12:16 am

@Garth – a million dollars for a house in Canada is considered cheap for an industrialist in Guangdong. A large condo in Shenzhen will cost a million dollars! You are mistaken if you think wealthy Chinese will be turned off by a real estate downturn in Vancouver, as it’s already considered cheap to begin with!

#51 Mister Obvious on 02.07.12 at 12:17 am

It’s amazing to me that anyone outside of Canada has shown even the slightest interest in the state of our residential real estate market. World gaze toward all things Canadian has been skimpy for decades.

I was in Taiwan twenty tears ago. A young schoolgirl heard that I spoke English and wanted a chance to practice some colloquial English with a native speaker. She assumed I was either American or British. I told her I was a Canadian and it meant absolutely nothing to her. She thought I was joking.

When President Bush was thanking all the countries who supported America during and after the 9/11 attacks he somehow managed to over skip Canada. The same Canada whose citizens gave sanctuary and comfort to thousands of Americans stranded for days in our airports due to the closure of US airspace.

Now the whole world wants to talk about our fascinating real estate bubble. Maybe things are different now.

#52 Carp on 02.07.12 at 12:18 am

SMan,

Honestly, I pay very little taxes per year. I’m a pirate and mercenary. Looking for adventure and loot.
Investment advise I like Garth’s from a conservative view but I have play money also. I think RE is going US style. If you are “big” investors, you want countries to feel the pain and drop the costs and get plenty of serfs. Canadians are far too smug and it’s time we pay the price. Example: Caterpillar asking for 50% reduction in salaries and locking up the plant in Ontario. http://www.thestar.com/business/article/1126643–caterpillar-likes-to-play-hardball-so-let-s-play-hardball

Note : “hell brakes lose.” should be “hell breaks loose.”

You got the “breaks” but not the loose in a phrase you focused on.

Keep smoking the good stuff and add the booze.

Carp

#53 Make Your Bed on 02.07.12 at 12:19 am

So basically what these publications are saying perfectly coincide with all information The American has provided for over a year. Very very fascinating and interesting……… The American, can you tell us what to expect in West Van in the next year?

#54 East Van on 02.07.12 at 12:21 am

http://seekingalpha.com/author/rodney-burley

The author quoted by Garth in “Seeking Alpha” does not seem to be an authority on anything:

Rodney Burley
ABOUT
Grasshoppa (aka Rodney Burley) is a Canadian engineer who lives in Southeast Asia working in the upstream oil & gas industry. He is a fairly active investor who’s always trying to learn more about the economy and investing.
SNAPSHOT
Description: Occasional investor. Trading frequency: Weekly
Interests: Bonds, Commodities, ETFs, Energy stocks, Gold, Options, REITs, Stocks – short

As opposed to you? — Garth

#55 Jody on 02.07.12 at 12:24 am

We are all doomed, doomed I say! I need a drink.

http://www.youtube.com/watch?v=Z0GFRcFm-aY

That property virgins hottie is still whoring it up for BMO, this time for home equity loans, oh the horror, will it never end? She should know better, real estate must not be doing so good.

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

http://www.youtube.com/watch?v=L2YF6jmG9I4&feature=related

#56 Foggy on 02.07.12 at 12:29 am

The main thing that will force people to stop the insanity will be inflation. We are seeing serious increases in food prices right now (5 –>15%), increases in electricity (6%), home heating oil is up 30% from last year and gas remains high. All these are well outside the 2% norm we think is current inflation and are staples in everyone’s daily life. The Canadian dollar is over-valued and due for a tumble. That will increase the price of everything that is imported. Under these stresses it is impossible for the banks to remain in a 3% lending mode and 1% in a savings interest mode. Regardless how F and C manipulate interest rates the banks will be forced to increae them significantly within a year.
And then a correction will truly start.

#57 East Van on 02.07.12 at 12:31 am

Garth, I admit that I am also an authority on nothing.

I do respect your respect your writing, and admire that fact that you would allow my comment to appear on your blog.

#58 Freedom 55 on 02.07.12 at 12:32 am

#20 Smoking Man on 02.06.12 at 11:12 pm

Show of hands how many of you bought and sold something today and made a profit/loss.

———————————————————-

I bought and sold THQI today, well actually bought late Friday and sold early today and made $3,400.00

#59 Temenos on 02.07.12 at 12:32 am

@41 – Devore.

What is the point then? Fact is immigrants from places like India and China prioritize a primary residence over TFSAs and RRIFs! Vancouver, being ground zero for immigration, will continue to welcome capital inflows.

#60 Morry on 02.07.12 at 12:33 am

Bring it on!!!

We are ready to pounce on the buying opportunities!

#61 Joseph [Original] on 02.07.12 at 12:35 am

>>> #41Devore on 02.07.12 at 12:00 am
#17 Joseph [Original]

You’re completely missing the point, as usual. It. Doesn’t. Matter. What. People. Believe.
<<<

Yes it does matter. Real.Estate.Prices.Stay.High.When.Immigrant.Dads.Purchase.Or.Provide.$100K+.DownPayments.For.Their.Kids.

#62 chubster on 02.07.12 at 12:36 am

guangdongers are having their own meltdown to contend with, though it is only a middle weight relative to what mao did. the vendor-financed export-a-rama contraption has crapped out for good. but hey, and this is where it gets interesting. check out what the reds have been doing about interest rates and housing speculation. compare to anywhere in the west. that takes some political will and it is why they’re going to come out of the mess someday way ahead. also, guess what the red govt has been encouraging its citizens to stock up on? eric sprott has all the details.

#63 Joseph [Original] on 02.07.12 at 12:40 am

>>>>>37Junius on 02.06.12 at 11:47 pm
#17 Joseph [Original],

Why don’t you write something original? Same, same.

The end is here.
<<<<<

Show me something different, different. Another financial expert calling for a collapse is not new either.

#64 Snowboid on 02.07.12 at 12:43 am

#39 Shameless on 02.06.12 at 11:52 pm…

All I could hear reading your post was…

http://www.youtube.com/watch?v=-b5aW08ivHU

#65 Don't Count on F on 02.07.12 at 12:43 am

You guys are so naive!

F isn’t going to solve a problem that he himself intentionally created.

It’s only “problematic” from a certain perspective.

#66 Smoking Man's Spell Checker on 02.07.12 at 12:48 am

Preciouss on 02.07.12 at 12:05 am

For me, it hit home at halftime, when Madonna was paraded on stage by the faux Roman Empire servants.

Lots of balls have been dropped.

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

I missed that. Did Madonna have a wardrobe malfunction too???

#67 Calgary Illusion on 02.07.12 at 12:57 am

#3 GrantMi

I had a look at the last graph in your link and I had to laugh at the double top formation. Perhaps real estate will behave like double tops in stocks…

#68 The Thing in the Basement on 02.07.12 at 1:03 am

36 P-Dawg – SCUBA, AIDS, NASCAR are acronyms. OMG
is an initialism.

At least AFAIK and IIRC. TTFN.

Smokin’ man – WTF??

#69 Ted23 on 02.07.12 at 1:03 am

I don’t know Garth, you have been calling for a FAIL each and every year for the past three years and still nothing. Many Canadian markets are experiencing sales volumes similar to last year’s. You are resigned to quoting others to support a position that has so far not materialized. I agree change is upon us but it will be slow and steady, an earlier prediction you were happy with, now you just want to sex it up as if the sky is falling and in danger of loosing credibility. I lived through the early nineties downturn and have the scars to prove it. This will end but it will not end badly for most. it will simply end. If in fact some people are screwed then they are screwed, Nothing you say here will change the outcome. Perhaps some insight as to how folks can handle their situations better as selling may not be an option for many, might be more helpful.

#70 Devil's Advocate on 02.07.12 at 1:06 am

Devore

Joseph is right, although caught on a moot point about immigrant dads providing for their kids, it absolutely does matter what people believe. Thoughts become plans and plans become reality. Whether you think you can or whether you think you can’t you are probably correct.

#71 Nmh on 02.07.12 at 1:16 am

I just laughed at this article
As the writer tries to rebutt amd argue against the bubble

http://truecondos.com/toronto-condo-bubble-about-to-burst

Haha

#72 City Slicker on 02.07.12 at 1:17 am

That’s right folks, jack up the interest rates on the indebted and let the games begin.
Typical New World Order fashion.

#73 Devore on 02.07.12 at 1:21 am

#44 Devil’s Advocate

You two really do have a stereotypical misunderstanding of the business don’t you?

Keep educating us there, buddy, with your War & Peace diatribes about nothing.

#74 Tim on 02.07.12 at 1:21 am

I agree with you about housing tanking here, even though it has taken an abnormally long time to do so, but I don’t think the banks are in trouble. They are some of the most widely held blue chip securities in Canada, and if you think so, then shouldn’t you, as a financial salesman be pointing this out? Are the big Canadian Banks in trouble Garth?

#75 City Slicker on 02.07.12 at 1:22 am

And just hand me my tin foil hat. But don’t tell me I didn’t tell you so.

#76 Phoeey on 02.07.12 at 1:24 am

What is this nonsense I keep reading about an Australian house price crash?
I live in Sydney and have seen no reduction in prices to speak of. I want there to be a massive crash, but right now it’s not happening.

#77 Devore on 02.07.12 at 1:27 am

#69 Devil’s Advocate

it absolutely does matter what people believe. Thoughts become plans and plans become reality. Whether you think you can or whether you think you can’t you are probably correct.

Americans kept believing for another 2 years after the peak passed. Some, still believe. Reality has a habit of manifesting despite best efforts.

#78 Tony on 02.07.12 at 1:34 am

RE: #3 grantmi on 02.06.12 at 10:48 pm

The trend line seems to cut through around $250,000.00. A long way down. Looks like around a 65 to 70 percent price decline over the next few years. Toronto area houses should drop just under 50 percent. Canadians will watch their taxes go sky-high in the future.

#79 Preciousss on 02.07.12 at 1:36 am

“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.” – Ludwig von Mises

#80 ex bc boy on 02.07.12 at 1:39 am

haellalyah or whatever- I dont want to see people suffer-but do your homework and save money! Lets see-zero downpayment or whatever-new everything,credit lines, credit cards,mom and dad and i… this that and the other!!-all with no money. I live debt free and I feel great! Could stand to create more money though.

Oh, I dont want a pipeline to commie china either. Or to the usa for that matter and I hope obama wins and tanks the economy. I hear that they dont need as much oil. Yea baby- I want housing to drop in AB by about 15%-I’m not greedy… ok make that 20%.

#81 Nostradamus Le Mad Vlad on 02.07.12 at 1:40 am

-
“I hope you’re ready. The second half could be a killer. Hmmm. Lenders at risk. Government at risk. What else could possibly go wrong?” — Somebody could unplug the bathtub and let all the water out. Then we’re sunk.

“I will not be surprised to see a Canadian banking crisis emerge in the next few years, and government bailouts to go with them.” — Courtesy of taxpayers (us), with higher taxes, less skilled and technical jobs to share between us. A wonderful solution!

However, it leads to another question: Where do credit unions stand in the wake of a bank bailout?

“So what happens next? Well, according to Seeking Alpha, just about everything.” — Guess it’s Tulip Time when TSHTF.
*
“Hedonics. Damn, that’s what we’ve being missing.” — Isn’t Hedonics a byproduct of voodooism, witchcraft and the last vestiges of men’s brains combined in a blender?
*
Chinese deflation and currency depreciation coming (so is xmas); 22:52 clip “Consolidate Your Holdings and Save Your Money”; Unemployment at 22.5% ShadowStats; Gold and Silver or state currencies made from tungsten and lead; Drilling in Antarctica; China – EU trade war; Build-Ur-Burgers Aahhh, life without them; China – Germany The NWO and The Fourth Reich — an interesting combo; Cdn. Debt Clock plus others.

Steve Keen Neoclassical economics; Can Money buy freedom? Diversified incomes streams, yes; Seeking Alpha The report + chart; Penny Mining Stocks Good investments of TFSAs? Downcast Bonds, Upbeat Dow or Grumpy Old Men III; Signs with a nice chart in; Danger Ahead; Seagate Far to good bet; China’s hard landing updated; Krugman One paragraph; Canadian Pacific Overhaul time? Commercial Aircraft of the future look very streamlined; Sarkozy Large budget for a small man; Plunge in gas usage.
*
5:54 clip West gunning for Putin (scared of something?); Monsanto are first in one category; B-52s Not the group. Have the bombers been put on alert? 0:43 clip Sahara snow; Superbug Pneumonia Quite effective; Skydiving from the edge of space; Philippines ‘Quake and Shake time; OccuFLY at LAX; Rare Ferrari sold for 20 mln. pounds +, and Lamborghini Driver pleads stupidity; 3:54 clip Obama on why he deserves a second term (to put more drones up), and Okiller “The CIA’s drone campaign in Pakistan has killed dozens of civilians who had gone to help rescue victims or were attending funerals, an investigation by the Bureau for the Sunday Times has revealed.”

#82 Junius on 02.07.12 at 1:55 am

#63 Joseph [original]

It wouldn’t matter I showed you. If it contradicted your beliefs you would reject it.

#83 Junius on 02.07.12 at 2:02 am

#69 DA,

You as well? It is a tautological argument. Either their beliefs don’t matter because they won’t qualify as credit contracts or their beliefs will change with the facts. Either way those who cling to the belief of ever rising prices will diminish in Canada as they have in the US and elsewhere.

#84 Junius on 02.07.12 at 2:11 am

#49 Seebe,

Australia is getting what done? The article you posted is from a typical spruilker. Australia has a long way to go down.

False bottom calls went on for years in the US. Beware the bear trap of an early call to a market bottom.

#85 eagle eyes on 02.07.12 at 2:13 am

Boy, if I had a crystal ball like you guys I’d be rich! From 50% of Asians wanting to come to Canada, to a crash and burn US scenario, I sit and wonder which is correct. If only I’d known that Vancouver real estate would go up so much in the last 10 years. (sigh)

A house in Vancouver priced at $800,000.00 will drop to $502,743? First of all, where do you find a home in Vancouver for $800,000 anyways? I sold my home in kitsilano 10 years ago for under $500,000. Today, it’s worth close to $2m. So a 40% drop means that shitbox post war bung on a small lot would still be worth $1.2m? Most homes in Richmond are worth over $1m, so even a 40% drop will bring it only to $600,000. These homes 10 years ago were only worth $280,000!!!

Maybe I am too stupid to understand any of this.

#86 1drs on 02.07.12 at 2:14 am

First thing to note here is that other countries are rarely exposed to the same media propaganda as we are. The thing that isn’t missed by the foreign media is the rising unemployment and the rising debt and our governments appetite for “austerity” . This is a toxic combination that will surely cause more grief than any of us can handle. For most working Canadians are only 3 months away from bankruptcy. No savings to speak of and plenty of debt. Unfortunately job layoffs beget more job layoffs and a vicious cycle begins to take the economy apart .This is a disaster that will crush the average Canadian . And what is our fearless Harperite government planning on doing about what they surely know is coming? They will cut the only pension that most Canadians will get. I hope that most Canadians realize that the Harperites knew what was coming and did worse than nothing . They brought in measures that made the bubble worse than it was. Liar loans, 0/40 mortgages and continued “emergency” interest rates have put us all in a very bad situation. Our only hope is a resurgent America but its unlikely that our friends to the south will rebuild their economy fast enough to make any real difference here.
We are doomed and the responsible party for this disaster is us. We voted for these clowns, although I can honestly say that I have never voted Conservative in my life, and they are using their majority to skin us alive.

#87 a prairie dawg on 02.07.12 at 2:24 am

#68 The Thing in the Basement

OMG is an initialism.

“Is that even a word…” :)

#88 Gord In Vancouver on 02.07.12 at 2:26 am

Thanks again, Garth!

#89 OneMoreThing on 02.07.12 at 2:30 am

Well Garth at least the MSM is talking about it now. Only has one way to go. I call a 25% national decline anyhow, 40% in TO, 50% in VAN.

#47 Temenos on 02.07.12 at 12:14 am

200 million Chinese are urbanizing over the next 15 years. According to Shanghai’s Hurun Institute, half of China’s millionaires want to leave, of which 50% prefer Canada. 70% reductions in Vancouver Real Estate is absurd, as immigrants love Real Estate, and Vancouver is an immigrant city!

Chinese suffering from RE pain in the homeland for the first time since the asian financial crisis of 1997 are taking note that RE anywhere is not a safe bet.

If you know anything about chinese culture you would already know that the money always returns home during crisis. 200m urban chinese of which a handfull who can actually afford to make the move to Canada and/or have already suffered some RE jitters are not going to find Canada safe by any means.

#90 Rafinator on 02.07.12 at 2:33 am

Well here is an interesting article showing the bubble in the Canadian/Vancouver Bubble

http://www.cashmoneyinvesting.com/article/2012/02/what-creates-real-estate-bubble

#91 BPOE on 02.07.12 at 2:36 am

Who is this contributor to Seeking Alpha? If you believe him then you should do what I said along time ago. Short the banks if your negative on housing. Don’t waste time with a diversified portfolio. But just remember this Vancouver is BULLETPROOF
******************************************
Says Alpha: “On average, housing prices will correct by about 25-30% across Canada, with some of the extremely overvalued markets (i.e.: Vancouver) declining more like 40% or more. If the Canadian housing market crash behaves like the USA one, expect most of the losses to occur in the first two years, and then slow down after that. Canadian banks will suffer, and may need a bailout. They are over-leveraged and over-exposed to housing market debt. I will not be surprised to see a Canadian banking crisis emerge in the next few years, and government bailouts to go with them.”

#92 BPOE on 02.07.12 at 2:39 am

In your dreams.
Not even a remote possibility of this happening
*****************************************
A Van house costing $800,000 today, we’re told, will eventually sell for $502,743, while the average $475,000 Toronto home will end up being $371,462. And this whole process will last as long as the American melt – something like five years.

#93 Smart Blonde on 02.07.12 at 2:41 am

It’s interesting reading the pumpers (realtors, mtg brokers etc.) and the others that lack common sense. It doesn’t take too many brain cells to realize that the housing market is about to burst. I was about 12 years old when my dad handed over the keys to our house in the early 80’s. Don’t forget the housing market in Vancouver dropped 50% in a 6 month span, thanks to high unemployment and interest rates above 20%. It may not be that abrupt this time round, but having lived through it myself, I am feeling quite confident that we made the right decision by selling our house, socking the money away, and currently renting a nice townhouse in West Vancouver for $3150 a month that is valued at 1.1 million with a $700 a month strata fee (or as the American’s call it an H.O.A). The owner is definitely not covering the cost of the taxes, mortgage and fees if they have a minimum down payment on our place.

#50 Temenos, you can get a nice place in Shenzhen for the $300,000 mark, but that is besides the point. Only 7% of the sales in the lower mainland are to foreigners. The media has pumped the market with the sheep in our society that believe the junk on any of the news channels, or papers for that matter. With the vast amount of educated Canadian young people, do they not do their research? It is the largest investment they will ever make. Our kids will do well and get into the market when they finish University after the collapse of our real estate. In the mean time, we educate them so they make rational decisions, not follow the crowd.

The average household income in British Columbia is $83,000. per year and the average price of a house is now 1.1 million. That $83,000 per year is before you send the 30 – 40% to the government, so you are left with a lot less. Does that not put it into perspective? Sadly, I’m thinking it doesn’t.

#94 BPOE on 02.07.12 at 2:47 am

So do tell with Canada’s banks poised to fail, unsecured credit line rates going up and homes to sell for 500k instead of 800k. Do you think Canadians would get a loan in this kind of environment. Not a chance. F will take care of everything. Genius Tsur Sommerville has it figured out

#95 Mark on 02.07.12 at 2:50 am

“While I agree with most of what was said by the SA article. I don’t see Canadian banks needing a bailout. Most of their mortgages are guaranteed by CHMC (re: you and me) they will take only a small hit.”

Absolutely. And banks will take full advantage of that eventually by cutting new lending to the market to zero. Houses will deflate. Bank shareholders will be able to use their dividends to buy them up for cheap.

#96 shanks on 02.07.12 at 3:08 am

#42 Smoking Man on 02.07.12 at 12:02 am
#36 a prairie dawg on 02.06.12 at 11:44 pm

Please don’t tell me you are a cement head, I could not spell acronym, Hounest

Ah Smoking Man, you are truly an enigma wrapped in a conundrum, surrounded by a question!

#97 The Dude on 02.07.12 at 3:20 am

This blog needs more Smoking Man. How do I become a Smoking Man?

#98 betamax on 02.07.12 at 4:20 am

#68 TTITB: “SCUBA, AIDS, NASCAR are acronyms. OMG is an initialism.”

But pedantry is always pedantry.

#99 betamax on 02.07.12 at 4:22 am

Love today’s pic. Reminds me of this one:

http://www.flickr.com/photos/24705785@N04/2552453390/

#100 live within your means on 02.07.12 at 5:29 am

Learned the other day my niece & her fiance put in an offer on a place in the Plateau area of Mtl. They currently rent in the area and like it. Two more Greater Fools? Tried to talk to my niece when I saw her at Xmas, but got the typical response. She’ll be 28 this mo., fiance is 45 – yep – you read it right – & has a 15 yr old daughter from a previous marriage who stays with them every 2nd weekend, IIRC in a 1 br apt. Niece only works part time, if that, and is pregnant – on purpose. Her parents have enough financial worries of their own & will likely have to sell this year. Her Mom holds her tongue but told her she is doing everything ass backwards. To think that my niece had top grades & was just shy of getting her Masters – she didn’t finish her thesis – is such a big disappointment to all us. Pardon my rant.

The place they put a bid on is:

http://passerelle.centris.ca/redirect.aspx?CodeDest=SUTTON&NoMLS=MT8620827&Lang=E

Obviously the description was written by someone who is French. You’d think that the firm would have corrected the poorly written English version, etc.

I have a few concerns:

1) “The buyer inspector shall be approve by the vendor.”

This sounds highly suspicious to me.

2) “Municipal evaluation is for the co-property by the municipal and school taxes belong to this unit only. ”

What the hell does ‘school taxes belong to this unit only’ mean. Could it just be a bad translation?

3) “This is not an offer or promise to sell that could bind the seller to the buyer, but an invitation to submit promises to purchase.”

My take is that if the sellers can’t find a place within a certain time frame, they can renege on their offer. Is this common in Mtl/PQ.

4) “Co-ownership fees: 12$, Common expenses/Rental: 444$ ”

No ideea what the $12 fee is and assume the $444. is a monthly condo/strata fee? Sounds v. high to me but considering the bldg was constructed in 1920 maybe this is typical.

I noted that no room dimensions were given. Weird!!.

Niece & fiance have an agent. He recently inherited $100K. I have not been in contact with her since Xmas & will not initiate one, except send her a B’day card which says: What’s a birthday card without a little money in it? & on the inside – Now You know!. :-)

#101 Mel on 02.07.12 at 5:53 am

It’s too late! Nothing can reverse the damage that has been done by the irresponsible CMHC, Banks, Government, and let’s not forget all those house horny Canadians.

It made me sick everytime I heard how our Banks are safer. How we are better in managing our debt levels.
All that crap! We will soon find out how truly we are different from all those other countries who got themselves into debt trap.

The longer house bubble will stay in place, the bigger the eventual correction. Who knows, we could surpass the U.S.

#102 TOC on 02.07.12 at 5:55 am

http://realestate.yourmoney.ca/2012/02/sub-prime-mortgage-risk.html

for those who don’t believe Garth, other writer’s are sounding the same warning…..

#103 Beach Girl on 02.07.12 at 6:51 am

Went to my pharmacist today. A very nice Chinese man. I take supplements cause I envision myself as a health freak at times. Not always.

I asked him, if the gov’t raises the retirement age to 67 will drugs no longer be available free of charge at 65. He said no. Drugs will still be available because that is provincial not federal.

Does anyone know if this is correct. I haven’t reached 55 yet, but I will be coming out swinging, if they F*** me over. Worked forever, employed people. I want what is do to me.

#104 Kip on 02.07.12 at 6:58 am

“A Van house costing $800,000 today, we’re told, will eventually sell for $502,743, while the average $475,000 Toronto home will end up being $371,462.”

So, the criminal overseers of the US sub-prime land fill site are now pointing their bent finger at us? Perfect!

I don’t know about BC but by the numbers above, an average 100k correction in GTA would not trigger chaos on the level they have seen in the US. Why? Because Canadians would have to declare bankruptcy and a 100k loss is not enough.

Even if the above does come to pass, which remains to be seen, we’ll deal with it and stop taking advice from the Americans. Have you learned nothing?

#105 Timbo on 02.07.12 at 7:06 am

http://www.cnbc.com/id/46287001

http://www.canadianbusiness.com/article/69216–eurozone-recession-fears-stoked-by-surprise-0-4-per-cent-fall-in-december-retail-sales

China and Europe are going to have a say when it comes to commodity and oil prices.

Thank god Canadian’s have over-valued properties to fall back on. Heloc’s for all when unemployment rises.

#106 Bill on 02.07.12 at 7:30 am

“the investment site compares and contrasts the American market and ours in terms of asset overvaluation. How this happened is irrelevant.”

It’s NOT irrelevant…not by a long shot.

It really IS about separating the population from their money, security, and retirement.

F is doing to Canada exactly what he and his goons did to Ontario.

Do you REALLY believe that Harper and his Thugs orchestrated this mess by accident?

How this happened is VERY relevant.

If people don’t understand how the Harper Thugs are intentionally screwing Canadians over the screwing will continue.

#107 House on 02.07.12 at 8:08 am

Hmm and no mention of the loss of construction jobs and real estate agents.

#108 Bond junkie on 02.07.12 at 8:14 am

Nothing but fear mongering of the highest order, shame on you Garth.

I didn’t write those articles. Did you complain to Bloomberg, The Economist and the Wall Street Journal. I didn’t think so. — Garth

#109 bigrider on 02.07.12 at 8:37 am

I am in the process of fixing my basement. Going to take a couple of months. Won’t list until it’s done.

My question is : Is it too late to sell ?

#110 Shane on 02.07.12 at 8:50 am

Garth, do you belive will tank 25-30%? I’m still going by your estimate of 15% and then a slow decline for 5 years.

Shane

#111 Danforth on 02.07.12 at 8:55 am

Hi everyone,

My mortgage is up for renewal in April. My thinking is to lock in the rate, rather than going variable. (I’ve got a hold on a 3.34 five year fixer).

thoughts ?

#112 TurnerNation on 02.07.12 at 8:56 am

Interest rates in today’s news:

– Australia unexpectedly kept interest rates unchanged as two cuts late last year help the economy weather Europe’s debt crisis, sending the nation’s currency soaring to a six-month high.

– India’s government predicted the weakest economic expansion this year since 2009, adding pressure on the central bank to reduce interest rates.

#113 Sebee on 02.07.12 at 8:59 am

Check out TheStar.com

It just keeps going up Garth. Looks like sellers will do just fine this spring.

#114 maxx on 02.07.12 at 9:09 am

#18 Steven Rowlandson on 02.06.12 at 11:11 pm

Garth when the real estate market bites the government in the back side who is going to ask Stephen Harper and his fellow travellers what its like to be financial geniuses?

I’ll field that one: most of the rest of the globe. However, in diplomatic circles, it will consist mainly of discreet tongue in cheek, knowing looks with frequent, peri and post-mortem , “hush-hush” tête-à-têtes on the periphery of “G” meetings. The fallout will be highly entertaining and open for all to view.

#115 Herb on 02.07.12 at 9:16 am

In other economic news …

“The myth of Tory economic performance”

http://www.theglobeandmail.com/news/politics/lawrence-martin/the-myth-of-tory-economic-performance/article2328652/

#116 Joseph [Original] on 02.07.12 at 9:45 am

>>>>>#82 Junius on 02.07.12 at 1:55 am
#63 Joseph [original]

It wouldn’t matter I showed you. If it contradicted your beliefs you would reject it. <<<<<

I'm not trying to be difficult. I joined this blog three years ago because I thought Garth was correct and continued to believe a significant real estate correction would occur until two years ago. Then I started to look around and saw that real estate continued to be purchased by second-third generation immigrants with the help of their first generation parents who were chipping in ridiculous amounts for downpayments. Their mindset with respect to housing didn't budge. Now that real estate prices have climbed for ten years in a row, even they admit things will need to cool down, but talk of a collapse is likely to prove exaggerated.

#117 AM on 02.07.12 at 9:53 am

#115 Herb on 02.07.12 at 9:16 am
In other economic news …

“The myth of Tory economic performance”

http://www.theglobeandmail.com/news/politics/lawrence-martin/the-myth-of-tory-economic-performance/article2328652/
.
~~~~~~~~~~~~~~~~~~~~~~~
Read the comments to this article…why doesn’t the MSM challange this idiot government’s lies.

#118 Devil's Advocate on 02.07.12 at 9:57 am

#73Devore on 02.07.12 at 1:21 am
#44 Devil’s Advocate

You two really do have a stereotypical misunderstanding of the business don’t you?

Keep educating us there, buddy, with your War & Peace diatribes about nothing.

That is the intent of my participation here Devore. But I understand how you and others might think by my brand that mine is a more self-serving purpose.
Do yourself a great favour and read the book I mentioned written by Gary Keller “SHIFT…”

#77Devore on 02.07.12 at 1:27 am
#69 Devil’s Advocate

it absolutely does matter what people believe. Thoughts become plans and plans become reality. Whether you think you can or whether you think you can’t you are probably correct.

Americans kept believing for another 2 years after the peak passed. Some, still believe. Reality has a habit of manifesting despite best efforts.

You are dealing in averages Devore. I don’t deal in averages. Are you just average?

#83Junius on 02.07.12 at 2:02 am
#69 DA,

You as well? It is a tautological argument. Either their beliefs don’t matter because they won’t qualify as credit contracts or their beliefs will change with the facts. Either way those who cling to the belief of ever rising prices will diminish in Canada as they have in the US and elsewhere.

How can you be so sure. But you keep “clinging” to your own beliefs Junius and we will see who “diminishes” and who prospers.

May I offer you a suggestion – don’t waste too much time being afraid of the future at the expense of missing those opportunities the present has to offer. You know what they say about “worrying” – 90% of what you worry about never comes to fruition.

If you aren’t making mistakes you aren’t trying hard enough.

“The reason why worry kills more people than work is that more people worry than work.” – Robert Frost quotes

#119 fancy_pants on 02.07.12 at 10:00 am

if the second half even smells like the half time show we are done

#120 Devil's Advocate on 02.07.12 at 10:02 am

#116Joseph [Original] on 02.07.12 at 9:45 am

Welcome to the dark side };-) – although I’d say it is you who is now enlightened.

Now set about making something of it for yourself. To reiterate that cliché old saying – zig when others zag and zag when they zig.

#121 CrowdedElevatorfartz on 02.07.12 at 10:06 am

@ BPOE
Ooooooooo that smellllllllllll. That smell that surrounds youuuuuuuuuuuuuuuuu.

#122 Sebee on 02.07.12 at 10:07 am

#108 Bond junkie

They say crash, media say growth. Truth is probably somewhere in the middle.

#123 John saccy on 02.07.12 at 10:10 am

Danforth.. 3.34% fixed is a good rate comparing with historic rates. The ponzi ZIRP followed by Ben Bernanke and Carney will eventually increase rapidly. Lock it in.

#124 DUI on Money Road on 02.07.12 at 10:12 am

#51 Mister Obvious on 02.07.12 at 12:17 am
———————————————-
You’re right, in the big picture Canada is a needle in the proverbial very large haystack. My Chinese friends tell me that the USA, Britain, Australia are the top picks for immigration.

To put it in perspective, 400 million Chinese have been lifted out of poverty over the past decade or two (reference: the Economist). This is 12x the Canadian population.

The Economist is now dedicating a weekly section just to China as they see the influence of their emerging power will be very important on the world stage.

Canada? Not so much. We’re lucky if we get an article written on us once/month, and even then it’s usually about our oil in relation to the USA or Asia, or about our unique, bubbly, housing market.

#125 DUI on Money Road on 02.07.12 at 10:14 am

#111 Danforth on 02.07.12 at 8:55 am
——————————————
Lock ‘er in! I recently had a variable +0.4%, which means currently I would be at a rate of 3.4%.

For you to lock in under this amount for 5 years is likely a very prudent thing to do.

#126 Junius on 02.07.12 at 10:19 am

#94 BPOE,

You said, ” F will take care of everything.”.

You really do believe in leprechauns.

#127 Deano on 02.07.12 at 10:22 am

My friend just got some money out of a TD/CT bank machine. Before it would give him his 20 bucks it made him answer the question, “do you want to increase your credit limit by 9000 dollars”.

I think that this is a problem.

#128 Junius on 02.07.12 at 10:28 am

#116 Joseph [Original],

The problem with the immigrants and their children will keep buying no matter what argument is that it has never held up in other locations. This premise suggests that our immigrant class is different from that in the US.

The fact is that many of these groups ranging from Italians to Chinese focus on Real Estate when they come to Canada is a function of history and not genetics. It is likely they will make up a higher proportion of greaterfools as a result. However they are too smart not to see the trends and figure out what is happening.

#129 Ronaldo on 02.07.12 at 10:38 am

#111 Danforth – that is a very good rate but with some shopping around you could do a bit better. Son just locked in with a portable mtg with BNS at 2.79 for 3 yrs. Even at 3.34 on say 250m mortgage that only represents about 700/mo. interest expense. There is a better chance rates will rise from here. It depends on each individuals situation. In my sons case, on a 250m mortgage it represents around $580/mo interest cost. With everything else it is still lower than rent and he can take the mortgage with him if he sells and relocates in a few years plus its only 1/17th of his family income. He is living well within his means, has a fully finished home (new in 2006) in a nice area near Red Deer.

#130 D on 02.07.12 at 10:44 am

“So what happens next?” – Garth

I’ll tell you exactly what happens next, Canadians (like us) move out of Canada by getting a US work permit and move into the USA, removing a dump truck load of loonies from the Canadian economy and buying a house in the USA for less than 1/2 it cost in Canada.

Thanks Canada for all the fish, might be back in a few years, might not.

#131 45north on 02.07.12 at 10:45 am

Cato: What is about to happen in Canada is going to be unique

that’s my feeling, Vancouver has reached the tipping point, the rest of BC follows. The battle for the GTA has commenced. In January there were 4500 sales, to continue the momentum in February there has to be 6000 and in March there has to be 8000. I sense fear.

Speaking of fear: Vegas Rental Market Is In Trouble
http://patrick.net/forum/?p=1208481
This is what happens when the banks dump their shadow inventory.

BigRider: Is it too late to sell ?

no but the market is not going to wait for you to do the reno

#132 Devil's Advocate on 02.07.12 at 10:50 am

In Kelowna over the years the East Indian community has made significant inroads to dominate our agricultural industry. What cultural differences do you think it is that equips them so well to do that? I have heard that when an East Indian person meets another they ask “How is your family?” where it is the natural inclination of North Americans to ask “How are you?”. East Indian families regale in many members living under one roof: North Americans? – not so much. Might be a hint there…

I think I need to learn more about these Eastern societies as they certainly are a growing force not necessarily because of their strengths so much as our weaknesses.

#133 worried realtors on 02.07.12 at 10:51 am

Yup the crash is here. You uneducated realtors can kick and scream but economic reality is going to hit hard. The fact is you realtors wouldn’t be here if the housing market was doing well. Look out below its going to be a nasty crash. BTW American realtors said immigrants would keep buying……with what money morons? Housing went up only by cheap easy credit which is now going bye bye.

#134 worried realtors on 02.07.12 at 10:54 am

Btw a housing downturn / crash is becoming common knowledge. Sorry realtors goto the globe and the star and cry there.

#135 disciple on 02.07.12 at 10:54 am

#116 Joseph [Original]…. don’t let your greed take hold. It is better to be two years too early than two days too late. You and I know as sure as the ground you stand on that RE will falter. Stop doubting and proceed with your life, without thinking of buying an asset that you either cannot afford, or that will slash your equity, until such a time that you can afford it or afford to slash your equity. Then you won’t treat it as a speculative play, or even as an investment, but as a place to live.

But if you can’t shake the doubt and greed and house lust, then do as Garth says, and I’m paraphrasing, “Go ahead and buy, and tell us how it turns out”…

Either way, whether you choose to be wise, or you choose to be a Prodigal Son, you will likely return here and I’m confident that this blog will still embrace you with open arms…

#136 The American on 02.07.12 at 11:00 am

#72ndBPOE, I’m smoking this….

http://www.huffingtonpost.ca/2012/02/06/canada-economic-growth-g7_n_1257937.html

Not looking good for Cnada, long term.

#137 Sebee on 02.07.12 at 11:00 am

I didn’t write those articles. Did you complain to Bloomberg, The Economist and the Wall Street Journal. I didn’t think so. — Garth
__________________________________________

It doesn’t make those articles or opinion pieces correct. There are always two sides to the story, and I can easily find info to on the interweb to support any view. Everyone has a voice here, right or wrong.

Boy do I wish this insanity would finish. Reality is the horny have had one heck of an orgy – lucky I’m not a envious type. And it seems to be in everyone’s interest to keep the orgy going. And they will use all the tools they can to keep it going. You compare to US Garth, but you forget to mention that US situtation is one heck of a motivator to keep things going in this much smaller market.

Why would the government slit it’s own throat, kill the market, put people out of work, crush the banks or CMHC, destroy all that tax income? Chocolate mountains or not – where is the catalist that starts the dominos? You can’t tip this scale – too much weight on one side of the scale.

#138 Ronaldo on 02.07.12 at 11:00 am

#85 Eagle Eyes – none of those houses are “worth” what is being asked for them. The house is only worth what it costs to build plus a reasonable profit. The balance is an illusion. On a recent trip from Edmonton to Vancouver, I was sitting next to a developer from Edmonton and we discussed the increase in housing prices since 2005 and in particular the extreme increase in value between 05 and 07. His response was “super profits”. He said it was quite common to make 100,000 or more per unit. He was building residential condos. And that is straight from the horses mouth. In an area around Red Deer, developers have land tied up for residential for the next 20 years. They pretty much determine the lot values and have a lot of room to move. The building costs have not changed that much in that time I am told. As the developer said, when things were really hot, framers were getting $10 s.f. so everyone was on the bandwagon. When things get tough as they are now, you can see these costs reduce considerably as they did back in the early 80’s when prices crashed and lots of tradespeople out of work. Time has a way of getting things back to normal again as it will once more. Just need to be patient.

#139 Devil's Advocate on 02.07.12 at 11:03 am

#127Deano on 02.07.12 at 10:22 am
My friend just got some money out of a TD/CT bank machine. Before it would give him his 20 bucks it made him answer the question, “do you want to increase your credit limit by 9000 dollars”.

I think that this is a problem.

No, the problem would be; if your friend were to try to to withdraw money from his account at the ATM and it said instead upon the screen “You don’t have any money in your account…. loser. Get lost!” and then did not return the card as the bank no longer wanted to do business with him.

#140 GTAGirl on 02.07.12 at 11:05 am

Someone commented about what will happen with loss of construction jobs… I live in Vaughan, Ontario, where the main source of jobs is home construction related. A housing bubble pop will decimate this city.

Glossy GTA Homes magazine came with today’s Globe. Full of new build homes throughout Kitchener, Hamilton, Bradford and King City.

Seems an enormous push to sell new subdivisions in the on e scenic King City – horse country. Developers advertising 60ft wide lots with homes ( no square footage given) all starting at $1.3 million. This is robbery. Empty fields developed with tight subdivision builder homes, surrounding area has no decent roads, schools or amenities. A cash grab from the spoiled Woodbridge Princess’s trying to re-create Real Housewives of New Jersey and live in McMansions just north of their parents.

Very sad when you examine these same developers who are building almost exact homes in areas of Kitchener and asking $350k+,while King City starts $1.3million, for identical home.

Buyer beware? Nope. It’s all an illusion.

#141 Houman on 02.07.12 at 11:05 am

I hear all this and yest houses in north york are selling 15% over asking, 10+ offers and bidding wars.

I am tempted to sell my house, I will have 400k. Is there such thing as risk FREE investment? Please advice.

If RE crashes here so will the banks and TSX so what is safe?

#142 The Thing in the Basement on 02.07.12 at 11:06 am

87 P-Dawg – Apparently so. But I had to google “acronym” and also found “initialism” which I had not heard of before. It is the noun, rather than the act (ex terrorism).

#143 truth hammer on 02.07.12 at 11:12 am

Two points have to be made

a) surprisingly the writer doesn’t seem to understand the differance between US and CDN banks. CDN banks are not one penny at risk on the bulk of any outstanding mortgages. The CHMC has outsourced the risk 100% by way of pasting ‘insurance’ paper against all possible fallout.

b) banks have not played exactly as advertised…although they are tightening LOCs ..the LOCS they have increased rates on are not real estate related…..up from prime + 3.%% to Prime + 6.75% on non real estae unsecured while leaving HELOC’s at Prime + 1. As far as the banks are concerned its all free money as long as the HELOCS are tied into the first mort.

c) Banks are the first secured creditor in the event of any default……thay can’t lose either way.

CDN banks are not at risk in any way nor should the collateralized debt obs become subject to default and risk any bailouts……shame on Seeking Alpha for not doing their DD on this side of the border.

d) personal debt stats in Canada were less than half that in the US at the start of the run up in prices per inflation in 2001. This is a ‘misery loves company’ POV from an American policy pervue.

Lets not look for blame except where it should be placed …..this was a federal government initiative and they got stupid greedy. Its was a great cash cow for treasury when the downturn hit……as usual the feds got addicted to the deluge of cash and couldn’t tear their hands out of the cookie jar. Don’t blame this on the banks….the culprits are all in Ottawa. Had the market been left to it’s own devices we would have cycled past this mess and be moving on by now.

#144 Devil's Advocate on 02.07.12 at 11:19 am

#133worried realtors on 02.07.12 at 10:51 am

Please explain. Without explanation yours is but a childish tantrum exhibiting your yet unsatisfied want directed at those you use as scapegoat for your own failing in taking the adult initiative in obtaining it for yourself.

#145 disciple on 02.07.12 at 11:21 am

A lot of you still believe the old myth that a political party does whatever it can to stay in power. But what does that mean? Nothing, it is pure nonsense. You don’t honestly believe that it is Harper and his gang of non-elected appointees that decide fiscal policy and who gets what pile of money? Do you?

No no no no, it’s all a game. Whether it would be Harper, Layton, Martin, Trudeau, or my cousin Vinny, the same path to debt slavery would have been followed. Quit blaming these puppets and you might spend your time more wisely getting to the heart of the evil…

As astonishing as it seems, there are people reading this blog that still do not understand that the media lies to them on a daily basis, and they question: Why doesn’t the media cover the lies of the gov’t? It is ignorance on a grand scale, but we are slowly but surely bridging this gap…

You are fatally wrong if you think you live in a free country, with free speech, and freedom of assembly. First, they send the dogs, the militarized police, and then a fate even worse than those dogs await you, the lawyers and judges of the ill-named justice system (they even still wear stupid white wigs in some countries) just for amusement. As if they didn’t have enough fun laughing at you as you sit in their lair awaiting whatever fate they have decided to mete out for the highest corporate bid.

Once you are caught up in their legal system, that’s it, you’re cooked, whether you are innocent, blameless, without liability or not, it doesn’t matter. It’s a stage for their amusement, and by corollary, your amusement, but for you it is a form of mind control. Stirring up hate, prejudice, division, and chaos, while they get paid for their acting services…

Think of some of the most popular movies you remember, virtually all of them feature a court (where games are played) and lawyers and judges batting some poor character around like a little ball. Yes, it’s a game, for amusement.

Tennis, is an ancient game. Various forms of this game are relics of our forgotten past. Our court systems are relics also of some forgotten form of this amusement for your real rulers, you can discern the etymology of the game from many of the terms they use in the courts everyday…both tennis and law, that is… Love.

#146 Rich Renter on 02.07.12 at 11:21 am

With home (bank) ownership at 70%, why does CMHC exist?

#147 Form Man on 02.07.12 at 11:39 am

#44 DA

you have some serious reading comprehension issues my friend. Mr. Keller’s book makes no mention of Mr. Flaherty’s mortgage interventions in 2008………..you sure you read the book ?
I remind you once again……….literacy courses are available in the evenings and weekends……even for realtors……..

#148 disciple on 02.07.12 at 11:47 am

Often, Hollywood will release a movie that just under the surface reveals the true nature of the Matrix. Almost as if they are being forced to present the fine print as part of a legal obligation, so that they can then proceed with their nefarious plans. “In Time” is one of the latest examples of what I’m talking about. In it, the lesson is that even being immortal does not guarantee that you will have enough time (money). The “Bee Movie”, pokes fun at the very system they have established, but they are laughing at you because you just don’t get it… and you never will, so they think, so why not laugh about it through cartoon characters? Yes, why not?

It is revolting to my sense of humanity to have to watch this play out. I’m doing what little I can do to help you to see that virtually all of your movements, preoccupations, and pursuits today were simply orchestrated for you out of the amusement of those that rule you from afar. The ancients referred to them by various names: The Gods on Olympus, the spirits of the four elements, the stars, the planets, the ancestors who live on the clouds, Allah, the Elohim, the Watchers, etc…

I rather boringly call them your real rulers. Because I am not amused. I don’t expect you to comprehend it all at once, it probably takes a lifetime if not many re-incarnated lifetimes to discern a glimpse of the truth, but hopefully you may begin to apprehend it. A lot of you think it is spiritual nonsense, but believe me, it is nothing of the sort, it is a return to reality from fantasy land and not the other way around.

If you didn’t have to run the rat race today, if you didn’t have to constantly look at the time, if you didn’t have to worry about the cost of anything, what would you do with your time? If you have never thought about this, then you have been lost a long time and it is time to find yourself again…Come back, the world was made for children.

#149 Abitibi Doug on 02.07.12 at 11:55 am

@Joseph, post #17:
Between what you said, and looking at my old Kodachrome slides from 1988 and 1989 last night I am on a nostalgia trip to that time period. It’s complete with music from that period, seeing pictures of the oil spill from the Exxon Valdez, talk of cold nuclear fission, and when the Hydro Quebec power grid collapsed in March, 1989. And yes, in 1988 and 1989 there was talk the real estate boom would continue because of all that money coming from Hong Kong before it was reposessed by China in 1997, and last but not least because of course it’s different here in Canada.

#150 Timing is Everything on 02.07.12 at 11:56 am

#49 Sebee – I think we compare better to Australia not to US.

Agreed.

#151 Timing is Everything on 02.07.12 at 11:59 am

#238 Peterfromcalgary – “Today I googled “is the future going to be worse then the past”. Garth your site is number 2 on that google search.”

That’s because this is a doomer site…Except for times it isn’t.

#152 Stevenson on 02.07.12 at 12:00 pm

The last time we warned that RE was overpriced and people should not get in and buyer s should sell quickly. What happened? That’s right tools I mean fools. It continued to ski rocket… 15% in a year?

I have no idea where you see these slow downs. I still have been witnessing bidding wars shooting prices over market value. You need to know where to buy. I have multiple rental properties over canada and in one of them I can bring in 2400 a month with multiple tenants legally inside. I bought the place for less then 100k. Rent doesn’t cover mortgages and carrying costs? Don’t think you’ve been around southwestern ontario.

If you choose to be cheap with your investing and purchase properties in low demand areas then you don’t deserve to be wealthy anyways. The fool next door that bought a few years ago does.

#153 Devil's Advocate on 02.07.12 at 12:02 pm

#138Ronaldo on 02.07.12 at 11:00 am

What about the lot upon which the house sits? Is that not worth something and often most? That a property has a house built upon it is not necessarily that representative of that properties highest and best use. Maybe you’ll want to think that post through once more giving some consideration to the old tried and true real estate adage “location, location, location”.

#154 Van guy on 02.07.12 at 12:07 pm

#39 Shameless on 02.06.12 at 11:52 pm
& BPOE

——————————————————–
If real estate is not in trouble, why are you even here? Aren’t you guys busy with your clients buying homes? Whatever you guys say here will not change anyone’s mind. When Richmond had over 2000 listings last month, and selling only 160, isn’t that a sign of a correction? You guys think people here are stupid? Well get to work and start pumping those virgins hard!

#155 eaglebay - Parksville on 02.07.12 at 12:08 pm

#100 live within your means on 02.07.12 at 5:29 am
“Obviously the description was written by someone who is French. You’d think that the firm would have corrected the poorly written English version, etc.”
———-
I understand the description. Easy to figure out.
Now, let see you write the description in French.
Picky, picky.

#156 Van guy on 02.07.12 at 12:10 pm

Take a look at yesterday’s numbers for Van. How can a person up talk these stats.

Dailies

Vancouver East & West*
New Listings – 98
Back On Market Listings – 2
Price Changes – 30
Sold Listings – 27

Vancouver All Areas*
New Listings – 315
Back On Market Listings – 5
Price Changes – 81
Sold Listings – 113

*Attached & Detached – Date: 2012/02/06 Time: 18:02 Pacific YatterMatters.com: Courtesy REBGV. Data believed to be accurate but is not guaranteed.

#157 Patiently Waiting on 02.07.12 at 12:11 pm

RE will not crash yet but will eventually when everyone who has borrowd between 2008-2011 will feel the load of it when they go for a renewal and if unemployment grows then the crash will hasten. A lot of asians and south asians will have their children helping them pay their mortgages. This debt will have an impact on their education and family harmony.

#158 GTAGirl on 02.07.12 at 12:12 pm

Sebee seems unable to grasp core economic rules. Bubbles are unsustainable. The more they grow the harsher the economic fallout. Even if a government refuses to react to squash a bubble, other factors will bring about a fall.

Job losses, unemployment, inflation and nervous debt ridden taxpayers are all able to crash the market on their own. The difference is you may not read about it in our country’s national papers.

And I gag every time someone says people won’t sell homes even if their underwater. Perhaps some won’t. But if job losses continue, ANYONE will sell at a great loss just to survive.

#159 Devil's Advocate on 02.07.12 at 12:13 pm

#137Sebee on 02.07.12 at 11:00 am makes a good point. I myself would be the first to admit that todays prices, by most apparent logical measure, are too high. But that does not mean they will topple or even capitulate in the least. There are many variables to the real estate pricing equation and not so many beyond our control.

I remember all too clearly thinking the same thoughts as most who frequent this place when my wife and I were starting out. We thought then that we would never be afforded the opportunity to own and while the numbers plugged into the equation back then were different the equation itself was much the same. A little tweek here, a little tweek there by many a player not just ourselves and we and the market moved closer to our dream.

Similarly today there seems to be too many obsticles the biggest of which is impatience. Time heals all.

#160 DUI on Money Road on 02.07.12 at 12:18 pm

#127 Deano on 02.07.12 at 10:22 am
————————————–
Or how about what happened to me. In the process of closing out my TD LOC (because of the large rate increase they stuck me with) and when opening up a new LOC at a different bank (with a much better interest rate) I get approved for 4x the amount I asked for. WTF?

#161 Herb on 02.07.12 at 12:22 pm

“…why doesn’t the MSM challange this idiot government’s lies.” – #117 AM

Because the MSM are owned by owners who have an interest in supporting the government that supports them, as well as the advertisers that make the media profitable. It is simply a case of corporations greasing their own skids. In the case of the CBC, the public broadcaster has to tread carefully if it wants to be kept in business in a meaningful manner.

The MSM will rediscover journalism as soon as the government acts against corporate interests, which is highly unlikely.

#162 disciple on 02.07.12 at 12:22 pm

Roger Revelle – Originator of the CO2 Global Warming Theory Admits It Was Wrong Before He Died:

http://www.kickthemallout.com/article.php/Video-Revelle_Admits_CO2_Theory_Wrong

The article mentions Maurice Strong. I just did some research… Here are some fascinating links on the mysterious Canadian born Maurice Strong. He started out in the oil business, went on to champion Global Warming and One-World Government. Deals with Adnan Khashoggi (leading arms dealer) and Democrats/Republicans paved his way to possibly become a future UN Secretary General:

http://www.afn.org/~govern/strong.html

#163 Preciousss on 02.07.12 at 12:28 pm

Ronaldo,

The fact discovery and decision making process becomes increasingly difficult as one is gets it “straight from the horse’s mouth” and fresh from the pig’s ass.

It becomes a balancing act based upon our perceived knowledge, our emotions, and our particular biases.

I chose to plug my ears and listen with my eyes.

#164 Deano on 02.07.12 at 12:32 pm

#139 Devil’s Advocate

If you can’t see that this is an issue….you are part of the problem. Cheap and easy credit is bad. We know this. We can see empirical evidence of what it can do.

Maybe I should read some of your other posts, I have the impression you’re only picking up what you dropped, not what anyone else is putting down. You dig?

no….

#165 highway61 on 02.07.12 at 12:32 pm

investing advice/market prognisis from “seeking alpha”? are you guys serious?

unreasonable or not, high home prices are here to stay (after years of price increases 5% “correction”, and that iseem to be the most likely scenario, does not bear any weight).

#166 bigrider on 02.07.12 at 12:33 pm

Well, just got back from the barber . GTA FYI.

The chair next to me, could not help over hearing the conversation:

Barber, all of 25 years of age I’m guessing says “ya ,my buddy has two condos in the downtown core rented out. Got the loans insured through some kind of insurance plan his mortgage broker came up with..he’s laughing !”

Kid in the chair getting his haircut says ” ya, I got one too, King st west, I bought it three years ago, it’s up 100k and the renter has paid down alot of my mortgage”

I guess this to be equivalent to the RE advice to buy now from the cab drivers.

Our fate is sealed.

#167 raider on 02.07.12 at 12:46 pm

#128 & #116 “The problem with the immigrants and their children will keep buying no matter what argument is that it has never held up in other locations. This premise suggests that our immigrant class is different from that in the US.”
I would not put the blame on immigrants in general. I’m one myself, however, Germans seem to be under-represent for quite a while. Access to capital for stupid real-estate ventures is far less trivial for immigrants than for the average Canadian.
Many people I know from my background currently scrape their heads how to survive the consequential damage from the collapse (entitlement benefits, health-care, …), how to even profit from a Canadian house-horniness, and some even think bailing and emigrating to Switzerland.
It seems you need to be living in the HGTV fishbowl for a while to make such stupid decisions. Not everyone coming to this great country will automatically buy a house.

Given the scale of the projection Canada may become Ireland 2.0, especially because the liabilities are already on the public balance sheet (CMHC).
If Mr F. needs to step in big time the borrowing cost for the Canadian government will go up down the road. Besides rising fixed-mortgage rates that are determined in the bond market, a very pervert thing has emerged for Ireland out of such a constellation. Since the bond-yields are that high, Irish banks prefer to buy Irish sovereigns for the yield and the government can clear the bond auctions. The Irish govt. happily borrows their ass away while the interest rate payments grow in their budget. At the same time they impose austerity on the normal population.

I think many readers of this blog may underestimate what Garth really means by rising taxes and, potentially, cutting entitlement benefits.


Btw:
“Imagine you’re in Guangdong, overseeing your industrial empire brimming with peasant labourers, feeling all horny about the west side of Vancouver, sipping tea and reading your Wall Street Journal and suddenly happen upon a story warning of Canadian collapse. This is how hot Asian money gets a cold.”

Garth that line is awesome. How long did you work on that one?

#168 VICTORIA TEA PARTY on 02.07.12 at 12:49 pm

#43 nonplused

Agree, unfortunately, with your well-written concerns.

In sum, then, Canada’s long status as some other power’s colonial mascot, servant, or whatever, now bubbles back to the surface, following our brief hiatis in the “driver’s seat” of sovereign economic “control.”

Thanks to the US natural gas fracking circus ongoing in the Bakken (check out CNBC’s doc about life in Williston ND — it looks like early days at Fort Mac) and other areas of that broken and busted country we now fully realize how much power we have when we do NOT have RESERVE CURRENCY STATUS.

Zip.

That is why Mr. Harper, is in China, trying to juice up more trade for our extractive resources in return for what, more crappy Chinese-made stuff? Oh, well, I hope for more than that.

OBJECT LESSON FOR CANADA’S BAND OF ZOMBIE PROTESTORS

Something all of Canada’s know-it-all unemployable environmental freaks out there who oppose the Northern Gateway and XL pipeline proposals, listen up you turkeys.

Without those and similar projects you won’t be doing any more of your favourite past-times, guzzling lattees and partaking of your community “activisms” as you beaver on to create your own form of “Sustainable Utopia”, that is government-mandated rationing of everything, especially free thoughts, for the rest of us rubes.

Read “nonplused”, you castaways.

This is what Canada will be like if we are forced to sequester our nonrenewables because of some environmentalist fantasy about “bad” pipelines, “good” white-coloured bears, and a bunch of so-called “oppressed” First Nations who will be victims, alright, but not of the “nasty” corporations but of the “sustainable” American environmental lobby and their useful idiot Canadian serfs, the aforementioned community so-called activists.

Canada will always be hewers of wood and drawers of water because that is what we do. Sure, we dabble in IT and other fancies but we always fail in those areas, because that’s what the Yanks do best.

There’s nothing wrong with what have been “fated” to do as long as we have markets to sell to and income returning so that we can use that money to find something ELSE we COULD be good at doing.

But for these treacherous fifth columnists to try and sabotage our future every which way and at the behest of their American masters is the worst sort of economic sedition.

Shame.

#169 BPOE on 02.07.12 at 12:50 pm

Folks, here’s what’s happening. Vancouver is HOT. Only a small fraction of people less than 1% are negative on real estate with The American leading the pack. There’s a reason it has gone up for over a decade, a reason interest rates are low and a reason why people want to buy. You can’t stop people from buying it’s in the very core of their nature

#170 Hicksville Alberta on 02.07.12 at 12:54 pm

What an ironic (moronic) world that H, F & C are bringing to this country.

On the one hand we are importing immigrants at record levels to colonize the country, some of which contribute little to the economy, other than to pump up real estate prices mainly in the cities, financed by CMHC guarantees, thereby driving up real estate prices by extraordinary amounts and marginalizing many existing citizens.

At the same time we have H out trying to export our national resources as fast as he can to sustain the effective colonization.

Is this it? Or perhaps i have misread what really appears to be going on?

Anyway, just a bit of food for thought.

#171 Throwstone on 02.07.12 at 1:05 pm

#137 Sebee…

Pull your head out of your ass.

There is no “scales”…economics is a muddled science at best.

It is by design, engineered, and when the design is flawed or engineered poorly the real world applications and outcomes will inevitably be revealed…flawed.

You can’t magically stop the ‘experiment’ before the whole thing blows up.

You don’t have to be a Mensa winner to see that the model is flawed.

Our largest trading partner went to its knee’s with a blow delivered from a housing crash; caused by low interest rates and no oversight or regulation of lending practices/standards in the mortgage industry and the subsequent financials involved in the creation of so much debt. Ninja loans, liar loans, ABCP etc. etc.

So…..show us Sebee with hard data, facts, tables, charts, graphs, references of any kind how real estate will continue to increase in price?…

If you can not provide said evidence…put your head back where it came from and take a look around.

You will get a good look at what your full of.

#172 down and out on 02.07.12 at 1:09 pm

I am glad this blog gave a little background on the new way of juggling the numbers for housing sales yesterday.Reading this mornings paper business section one would think all was” rosy” in the sales percentage for the GTA and west coast. Thanks Garth for the heads up on the new number shuffling methods .You think a major paper would challege the facts instead of just relying the numbers like a trained parrot.

We train only squirrels on this blog. — Garth

#173 Kilby on 02.07.12 at 1:12 pm

Richmond, completed residential sales for first week in February (7 days)

2008 90 sold
2009 33 sold
2010 92 sold
2011 125 sold
2012 51 sold.

Clearly down a huge amount percentage wise.

#174 Throwstone on 02.07.12 at 1:24 pm

#166 Big Rider…

Was thinking the same thing myself. about the taxi cab real estate advice.

People get a mortgage from….

“harold the jewellery buyer”

http://www.mortgagebrokernews.ca/news/gold-buying-broker-raises-concerns/106842/

Comical. Really.

#175 bigrider on 02.07.12 at 1:28 pm

#140 GTA Girl.

You and I travel in very similar circle I’m sure. We probably would even recognize each other at least by face only or familiarity, if we were ever to meet.

#176 waiting on 02.07.12 at 1:30 pm

To #111 Dan,
lock in, 3.34 for 5 years will look amazing in a couple of years. (Be prepared for a huge jump when you go to renew it in 5 years though – do some calculations now and figure out what your payments will be at a few higher rates like, 5, 6 and 7% – be prepared for a shock.) While you’re at it. Look at what waiting a year or two will cost you, and what house prices might look like at 15% cheaper. Also figure in how much more downpayment you could save in the next two years.

#177 Alex n Calgary on 02.07.12 at 1:41 pm

House prices are way about inflation and the mean, there is clearly created a culture of house ownership at a young age. The Drywall company I do IT for in Calgary is in dire market times, no more massive profits from housing booms, they’re mostly incompetent hillbillies who pre-boom were 2 people in a van, but with massive building profits have a shiny building, with a waterfall and pictures of themselves everywhere.

The Lawfirm I work at tells me foreclosures are still running high, especially people who bought in 2007. One person loses a job, and its over! I can’t tell you how many mid 20’s people I’ve met on their SECOND houses, first one still owned and rented out, second one is an Acreage, cause you know, they deserve their retirement property at the age of 26.

Same story over and over, shes a legal secretary, hes a drywaller, or roofer, or flooring guy, or well checker, no real education, fast trade jobs, fast money. When the correction happens, even a minor stagnation in the housing industry, all these monkies who’ve been gorging off house construction profits, will lose their jobs, then their houses. Crap, all these law firms I work at all they do all day are property deals! They’re toast too, might have to do real work for a living.

I’m so sick of seeing these 24yr old guys, demanding any price they want to do hardwood flooring, their own superduty diesel truck and trailer, contractors, “building” their own houses, I own 3 hours says 28yr old, but my job is super secure… I’m a CAPTAIN of industry!

Everyone wants to make an easy 200k profit on housing, honestly why work for a living? thats for SUCKERS, why goto university? those people are idiots, 18$ an hr and I just buy a house or two, BOOM retired at 35, damn I’m clever….

Also Alberta is self sufficiant and needs to break away from the worthless rest of Canada! Oh its not oil and gas, its because this province is SO smart with its money….That sure isn’t what the head of finance at the city of Calgary told my lady who works there, he said even a minor drop in property tax revenue and its major major cutback time, MINOR DROP.

About time people learned to live in their means and the world isn’t a free ride, work for a living….

#178 Vancouver_Bear on 02.07.12 at 1:50 pm

#70Devil’s Advocate on 02.07.12 at 1:06 am

You are right real economy, good paying jobs don’t matter anymore, only beleifs still support this bubbly RE market. To me it means the end is here.

#179 kim on 02.07.12 at 1:53 pm

The RE market must be doing poorly since We have so many desperate realtors on this blog. Garth it seems your facts have hit a nerve with realtors who simple can not handle the truth. This housing downturn , balloon or bubble is going to bankrupt and ruin many. It’s already getting ugly out there as many realtors are out of work as sales fall.

#180 Vancouver_Bear on 02.07.12 at 1:54 pm

#169BPOE on 02.07.12 at 12:50 pm

BLAH BLAH BLAH….

did you try reading what you typed….talk to a doctor.

#181 Kevin on 02.07.12 at 1:56 pm

Condo boom ‘alive and kicking’
http://business.financialpost.com/2012/02/07/condo-market-still-smoking/

Residential building permits for 2011 totaled up at 200,248 units.

Canadian population at the end of Q4 in 2010 was 34,254,344
Canadian population at the end of Q4 in 2011 was
34,605,346

Population grew by 351,000 people which means Canada has issued 1 building permit for every 1.74 increase in the population. No overbuilding in Canada!

Building permits give us a glimpse of what will coming down the pipeline for housing starts. These units may not come online until 1,2 or even 3 years down the road. But permits for 2011 show us the building boom in residential units continues to outstrip household formation. Except for 2009, this has happened every year in Canada for the last decade.

This construction boom has help inflate our job market in the FIRE and construction industries as employment in these industries is as a percentage of total employment is near 13%.
http://tinyurl.com/6pp3xd4

And since FIRE + Construction pulled more than their weight to get Canada out of the recession, these two sectors are now flying high, they now have a 27% share of total GDP.
http://tinyurl.com/6pp3xd4

And of course this has saddled Canadians with massive debts. Household debt by the end of Jan 2012 is now over $1.6 trillion
http://tinyurl.com/82yoctx

Household debt to personal disposable income was at 153% in the third quarter of 2011. And expected to higher.
http://tinyurl.com/6svyz7h

And household debt to GDP was at 94% in the third quarter of 2011. Expected to go higher. US peaked at 98% and now at 88%.
http://tinyurl.com/7dl33dg

Good thing the Feds are “watching the housing market closely” cause we would hate to see overbuilding, inflated job markets related to housing and over indebted consumers.

#182 Trev16 on 02.07.12 at 2:00 pm

Garth

Hi, I enjoyed your blog today with all the doom and gloom from different sources. However I was surprised to see that you did not post your standard line “that our Canadian banks are different” and are “safe”.

Also I had to laugh at post 130 (D) as he thinks a move to the US will be positive. Clearly he is unaware of what is going on behind the scenes in the US. Wouldn’t it be great if people actually could source out info other than the propaganda fed to us by MSM?

Cheers,

Trev16

#183 Timing is Everything on 02.07.12 at 2:08 pm

Spectator sports…

#23 JW – popcorn in hand !
#26 Don – I’m too busy making POPcorn

Goes great with sno-cones.
———————————————————
Hunkered and bunkered ; locked and loaded.
When in doubt-> Ask the exterminator…

http://tinyurl.com/7cwkkgy
———————————————————-
It’s never too late to make a better decision.

#184 Van guy on 02.07.12 at 2:21 pm

BPOE,

You said,

“You can’t stop people from buying it’s in the very core of their nature”
—————————————————————-
Most have realized that buying now is stupid. Look at sales and rising listings!! Your comments are retarded and you have nothing to back it up except for BPOE. You are obviously here because you are immature and like to stir the pot. Post something that can back up your idiotic comments.

#185 Bill Gable on 02.07.12 at 2:23 pm

This blog has been hijacked by BPOE and frankly, I have better things to do with my time than read this deluded stuff.
How about just one post, BPOE, or better, go try and sell a leaky, mould filled, bung to some sucker, here in the dumbest City on Earth.

Vancouver’s Real Estate IQ is BPOE’s shoe size.

#186 Canadian Watchdog on 02.07.12 at 2:27 pm

#159 Devil’s Advocate

“But that does not mean they will topple or even capitulate in the least. There are many variables to the real estate pricing equation and not so many beyond our control.”

What variables? Show us instead of being so elusive.

#187 Sebee on 02.07.12 at 2:30 pm

#158 GTAGirl

An economist I am not. Just a regular Joe trying to make sense of all this partial data and opinion that’s thrown our way.

It seems that there is clearly a firm united front to do whatever is needed to stop or delay this bubble from failing. Bought time is quite valuable in this equation. This united front seemes to be containing all the variables you outlined quite well.

#188 a prairie dawg on 02.07.12 at 2:40 pm

We train only squirrels on this blog. — Garth

– — –

It’s hip to be squirrel.

http://www.youtube.com/watch?v=LB5YkmjalDg&ob=av3e

#189 a prairie dawg on 02.07.12 at 2:48 pm

#142 The Thing in the Basement

Apparently so. But I had to google “acronym” and also found “initialism” which I had not heard of before. It is the noun, rather than the act.

– — –

Well, you learn something new here every day.
I have never heard that term used before. (ie:spoken)

#190 Work & Tumbel on 02.07.12 at 2:52 pm

Illusion.

Thats a nice BMW.
Your home is just gorgeus.
You went south with the kids. (5star)
Is that a real TAG.
Are you a member there? (golf)

Remember it takes most popular couples 80 hours a week, to make the payments on an Illusion.

I am not sure I feel sorry for what they are about to experience . (Humble pie may be good for some )

#191 bigrider on 02.07.12 at 3:19 pm

Ok I get it Garth, no fart jokes but it is a true story.

#192 Silver on 02.07.12 at 3:22 pm

What makes people think that if the mortgage industry collapsed … that the tax payers would or could afford to bail out the CMHC taxpayer guaranteed profits to the banks for their foolish greed…
and where would the underwater taxpayers find this money… as the price dropped…
… and why would they submit to that.
I put 30% down, 5% ability to pay on the loan, 20 years, and a cost of no more than 3 years average wages…. why should I suffer a financial loss for people who can’t meet basic real financial requirements… on overvalued property.
welfare bums… with granite countertops who could only buy because someone guaranteed the deal with my potential taxable income base.
Silver

#193 Sebee on 02.07.12 at 3:28 pm

#171 Throwstone

Symbolism – look it up. As in scales of justice. I used it as scales of economic balance.

As for data, let’s be realistic. You’re using historical data to support your point, why shouldn’t I for my argument.

Has this cycle earned the High Score on all fronts in this real estate game of Ms. Pac Man?

Has it defied experts and economists since 2005?

Did it survie the biggest US recession(depression/great recession) with flying colours?

Do all parties involved recognise the economic contribution, job creation that comes with it?

Are all parties afraid of the US scenario?

If you answered “yes” to all – thank you for being my data sample.

I’m not on the side of this bubble. I’m quite indifferent. But how can you sit here and type into your screen and not recognize the incredible lengths to which all parties in this real estate orgy have gone? Do you doubt their ability to change rules and react quickly to maintain these house values within reason? Must I remind you they print the money you use to value these houses?

I’m no economist, but it’s clear to me it will take a serious act of devine intervention to stop this train. Even the US mess barely made a dent. CMHC will get an increase, maybe with some new mild restrictions. Interest rates will stay low in this new reality to make people stop saving and buy, buy, buy – anything. Oil prices are hardly going to move – which means dollar will be strong.

If you were a “betting man” and you were asked to place a bet – without being forced to buy or sell RE – what would your bet be? Do you bet against 10 years of data and clear signals those in charge of this game have no intent to throw in the towel?

#194 Daisy Mae on 02.07.12 at 3:31 pm

#41Devore on 02.07.12 at 12:00 am
#17 Joseph [Original]

“You’re completely missing the point, as usual. It. Doesn’t. Matter. What. People. Believe.”

**********

I was going to tell Joseph the same thing, but thought “what’s the point…”

#195 Devil's Advocate on 02.07.12 at 3:33 pm

#147Form Man on 02.07.12 at 11:39 am
#44 DA

you have some serious reading comprehension issues my friend. Mr. Keller’s book makes no mention of Mr. Flaherty’s mortgage interventions in 2008………..you sure you read the book ?
I remind you once again……….literacy courses are available in the evenings and weekends……even for realtors……..

No Form Man it is you who has the reading comprehension issues.

I never said that book discussed in any way Mr. Flaherty’s mortgage interventions . I merely suggested that if you read the book you will gain a deeper understanding of how the real estate market works which will help you in your own business immensely.

Do as you will.

#196 Devil's Advocate on 02.07.12 at 3:38 pm

#186Canadian Watchdog on 02.07.12 at 2:27 pm
#159 Devil’s Advocate

“But that does not mean they will topple or even capitulate in the least. There are many variables to the real estate pricing equation and not so many beyond our control.”

What variables? Show us instead of being so elusive.

Anything and everything from government intervention to a new age of enlightenment HTF am I supposed to know… nobody knows what the future holds in store and that in itself is the BIGGEST variable of all. Other than you seem hell bent on argueing for nothing more than arguements sake.

#197 Devil's Advocate on 02.07.12 at 3:42 pm

#186 Canadian Watchdog

Of one thing you can be sure though. The general sentiment represented here is not nearly so prevalent out there. Out there they tend to have optimism and hope and are willing to take up the task of averting failure, albeit a tendency to address it at the last minute. But you just sit back and watch it unfold as the rest of us steer this ship.

#198 Londoner ON on 02.07.12 at 3:42 pm

Here in London Ontario job loses are happening already. Within 6 months we had Ford and Caterpillar close their plants. More than 1000 good direct jobs gone. Lets not even talk about the indirect ones. Other US companies are following suite elsewhere in the country. Adding the EU worries here of lazy Greeks going bankrupt, and we have a good spark to start a downfall in the economy, and probably effect the housing market.

#199 Devil's Advocate on 02.07.12 at 3:44 pm

ya, ya no “e” in arguing or argument.

#200 Devore on 02.07.12 at 3:51 pm

#174 Throwstone

Pawn shop hawking mortgages “raises concerns”. Classic.

#201 Temenos on 02.07.12 at 3:53 pm

@93 – Smart Blonde.

Note, if you want a new build in a good area of Shenzhen – i.e. Futian, you are looking at 35,000+ per square meter. If you want a decent 3 bedroom, you are looking at 150 square meters. You do the math. The houses being sold on the Westside are CHEAP in comparison. And best of all, you actually OWN the land, as opposed to lease from the government.

Also, not that i doubt 7%, but I would love to know where you get the numbers regarding purchases in Vancouver?

#202 Temenos on 02.07.12 at 3:57 pm

@89 – Onemorething.

Actually, Chinese are largely buy and hold investors when it comes to land. My Chinese father in law owns half a dozen properties in Mainland China, and has no plans to sell. Rental yields are still positive, including mine in Xi’an, and as I said, 200 million more are urbanizing. The current problems in China is entirely government policy related, as I am sure you already know.

#203 Daisy Mae on 02.07.12 at 4:02 pm

TOC on 02.07.12 at 5:55 am
http://realestate.yourmoney.ca/2012/02/sub-prime-mortgage-risk.html

“for those who don’t believe Garth, other writer’s are sounding the same warning…..”

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

Of course! Garth spends his days trying to save us from ourselves…and keeping abreast of all things financial.

#204 BPOE on 02.07.12 at 4:04 pm

It’s important to actually read the links you post American. This is fantastic news for Canada.********************************************
The American on 02.07.12 at 11:00 am
#72ndBPOE, I’m smoking this….

http://www.huffingtonpost.ca/2012/02/06/canada-economic-growth-g7_n_1257937.html

Not looking good for Cnada, long term.
.

#205 Harlee on 02.07.12 at 4:08 pm

#149 Abitibi Doug
If you’re getting nostalgiac for the 1980s now,give it another 20 years and see what that era will look like in 2032. It’s funny how time works. I collect Canadian postcards from 1910 to the early 1970s. Some of the cards from the late 1950s and early 1960s actually look almost as old as the cards from the 1920s. A 1962 Buick Roadmaster convertible on an advertising card might as well be a 1929 Model A coupe. Although the fashions and styles change though, the problems of the world and the fears and greed of people pretty much stays the same. That’s what they call “progress”,eh ?

#206 Daisy Mae on 02.07.12 at 4:16 pm

Seeking Alpha
From Wikipedia, the free encyclopedia

Seeking Alpha is a leading investment website, read by over 5 million monthly unique users and by over 45% of U.S. financial professionals, according to Erdos & Morgan 2010. The company’s core product is investment opinion & analysis covering over 5,000 public companies and ETFs. Investment articles are written by over 4,000 contributing authors including portfolio managers, C-level executives, and industry experts who submit articles to the company’s editorial team. Seeking Alpha’s editorial team publishes about 25% of investment articles which are submitted. Over 60% of the articles published on Seeking Alpha’s website are exclusives and contributors are paid for their work. In 2007, Seeking Alpha was the recipient of Forbes’ Best of the Web Award [2] and Kiplinger’s Award for Most Informative Website. It was also recommended on Fox News by Liz MacDonald as a top investment website the same year.

So much for the doubters…..

#207 Junius on 02.07.12 at 4:20 pm

#181 Kevin,

Excellent links. Thanks for posting. Collectively they tell a good story about what is happening.

As the FIRE + Construction sector loss momentum so will the overall economy. This is the pattern we saw in the US and other countries.

#208 Daisy Mae on 02.07.12 at 4:24 pm

#105 BILL: “It’s NOT irrelevant…not by a long shot.”

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

I agree. It started with stupid, dangerous decisions by this dumb-ass government….and now it’s their responsibility to get us out of it. If it’s even possible. I don’t think it is. We’re ‘screwed’.

#209 robert james on 02.07.12 at 4:24 pm

The stats are out for the Okangan… Jan. 11 average price $437,328…. Jan 12 average price $415,358 a drop of 5.02 percent.. I bet it is a good time to buy.. LOL http://www.omreb.com/files/01%20-%20CO%20Statistics%20January%202012.pdf

#210 GTAGirl on 02.07.12 at 4:31 pm

Big rider; yes no doubt we probably do know each other or travel in similar circles. As you’ve seen in last few months it’s been the old boys who’ve started back pedaling and cutting back. They’ve seen this before. And will wait for opportunities.

It’s the Idiot-sons who are pushing ahead, doubling down.

The condo project in North Oakville called ‘Rain’ (appropriate because it’s in a desolate soggy field next to the highway) has a new marketing gimmick …..

Condo dog wash stations! So you can wash your dog before heading back to your condo after a walk in the…. ( hold your breath…) the RAIN!

Um yeah…

#211 GTAGirl on 02.07.12 at 4:36 pm

Seebee;

I do disagree. Homes cannot continue to increase. Not if indicators of failing economy are true. Along with inflation. The few homes being touted as multiple offers and over asking, are not the norm. GTA pockets are dying. Inventory sitting. This will affect entire market.

But it will be condo market that will first fail.

#212 Junius on 02.07.12 at 4:37 pm

#162 Disciple,

More of your “no global warming” nonsense. To repeat – there are no qualified or legitimate scientists who do not believe in climate change and that it is more likely man made. None.

If you didn’t catch the WSJ debate last week here is an article that sums it up nicely:

http://www.guardian.co.uk/environment/2012/feb/01/wall-street-journal-climate-change

It amazes me that people can believe in fictional omniscient beings and other nonsense controlling their lives and the Universe but cannot see the plain facts in front of them.

#213 Daisy Mae on 02.07.12 at 4:38 pm

#182 TREV: “…I was surprised to see that you did not post your standard line “that our Canadian banks are different” and are “safe”.”

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

When has Garth ever said that?

#214 Form Man on 02.07.12 at 4:39 pm

#195 DA

Desperately weaving and trying to elude. Once again I trapped you DA. No worries, run off little rabbit…….more games are ahead.

#215 Junius on 02.07.12 at 4:41 pm

#204 BPOE,

How is the Canadian economy “fantastic news”? You are so blinded that you are dumb.

The changes in the CMHC rules in 2008 re-fuelled the bubble and sent it up for a few years. The increases in spending in the FIRE + Construction industry propelled things forward for a few years. Now they are unwinding and it is impacting the economy. As this process continues we will near or enter recession this year. Then it will continue into 2013 on a downward spiral in Real Estate and many other industries.

#216 John Prine on 02.07.12 at 4:46 pm

Does anybody else just skip the really long posts? They seem to detract from the forum. or maybe just non diagnosed attention deficit…………

#217 Canadian Watchdog on 02.07.12 at 4:47 pm

#197 Devil’s Advocate

“Out there they tend to have optimism and hope and are willing to take up the task of averting failure, albeit a tendency to address it at the last minute”

Who’s they? WTF are you talking about?

#218 zeeman1 on 02.07.12 at 5:02 pm

# 86 1drs.

I don’t have the energy at the moment to tear apart your argument, but you really convinced me that everything would be A OK if a Liberal government was in charge instead of the Harper Conservatives.

#219 Sebee on 02.07.12 at 5:03 pm

#211 GTAGirl

Who said anything about growth? The gang have clearly outlined their goal – to level off pricing and perhaps see a small price decrease going forward as rates inch up slightly.

They are not setting unrealistic goals of 15% annual growth for eternity. Their goal and the tools they control plus their determination to keep the values around where they are now should not be taken lightly. That’s all I’m trying to say.

#220 Abitibi Doug on 02.07.12 at 5:05 pm

There’s an excellent article in The Globe, Business Section on Feb. 2 on the U.S. housing market. I’ll share with you all a clip from this article:

The housing market is susceptible to the same manias and panics that plague other investments. When the going is good, people become intoxicated by the relentless rise in home prices and imagine it will continue forever. But when things go badly, houses are seen as little more than an illiquid asset at risk of a capital loss.
For America, panic has turned to despair. this is consistent with a bottoming of the market. In surveys, Americans now concede that it is a good time to buy a home, but have no intention of doing so themselves (my addition: what the hell are you waiting for, they’re cheap now!). This despair will eventually evolve into cautious optimism, but a psychological change of that magnitude takes time.

My addition: sums it up very well. I think you know what stage in this game Canada is at.

#221 Uh Oh Canada on 02.07.12 at 5:13 pm

Just a local update from my Quebec hood. It seems that the “absent pin” has appeared in the form of major job losses. It seems like everyone around me has either lost their job or has been down sized.

When there is no work thanks to a weak local and global economy, nothing can stop the house prices from spiraling down wards- not even rich immigrants.

#222 Miko on 02.07.12 at 5:21 pm

does this guy really believe this?

http://watch.bnn.ca/#clip614869

#223 jess on 02.07.12 at 5:34 pm

The tri-party repo taskforce was set up in September 2009 in response to regulatory concerns that the market could become a source of systemic risk.
Ya think?
Questions and Answers about the Financial Crisis*
Prepared for the U.S. Financial Crisis Inquiry Commission
Gary Gorton
Yale and NBER
February 20, 2010
…”The problem is structural. The explanation for the
crisis lies in the structure of private transaction securities that are created by banks.
=
compliance data base
http://accelus.thomsonreuters.com/solutions/regulatory-intelligence/compliance-complete/

#224 Westernman on 02.07.12 at 5:34 pm

Shameless 2 #39,
As a Realtor you see pent up demand and continued rising prices…what a suprise!
And as a hammer the hammer see’s everything as a nail…

#225 live within your means on 02.07.12 at 5:37 pm

#155 eaglebay – Parksville on 02.07.12 at 12:08 pm
#100 live within your means on 02.07.12 at 5:29 am
“Obviously the description was written by someone who is French. You’d think that the firm would have corrected the poorly written English version, etc.”
———-
I understand the description. Easy to figure out.
Now, let see you write the description in French.
Picky, picky.

………………

Eaglebay – I haven’t written in French, other than a card or an email message, in 25 years. I happen to live in an English environment and am married to a man from France who only knew how to say Oui ou Non when he came here to be with me 27 yrs ago. I speak French with all of his family/friends in France and in Montreal. My niece is totally bilingual & her fiance is from France. I grew up in Mtl. and lived and worked in Brussels.

You seem to imply that I’m stupid or anti-French. I’m just surprised that Sutton Realtors, who obviously work in a bilingual market, would allow this advert to go through as is. Not professional at all IMHO.

Plus, you didn’t address any of my questions.

You presume too much.

#226 harden on 02.07.12 at 5:38 pm

the new House Price Index is ‘explained’ here

http://www.realtylink.org/statistics/buyers_hpi_explained.cfm

So far as I can tell, the HPI won’t move much at the best (and worst) of times – it has been crafted to create the illusion of stable prices in any market – up, down, or sideways. Which is a win-win.. where F n’ Realtors are concerned?

That is exactly what I suggested it would be designed to accomplish. — Garth

#227 Trev16 on 02.07.12 at 5:41 pm

#213—Daisey Mae

Over the past couple of months when I posted something in regards to the US banks being technically bankrupt because of their derivative positions and in response to Zerohedge articles on Canadian Banks…..Garth has said our banks are different, etc.

Correction. I said the Zerohedge guy had his facts wrong. — Garth

#228 Form Man on 02.07.12 at 5:47 pm

#219 Sebee

who is the ‘gang’ ?

#209 Robert James

DA is going to have to work hard to shine up these numbers. The housing market in Kelowna continues to decline………

#229 Keith in Calgary on 02.07.12 at 5:48 pm

They should have called it the “CALCULATED YEARLY AVERAGE” index…….

Or “CYA”………

#230 Van guy on 02.07.12 at 5:56 pm

#93 Smart Blonde on 02.07.12 at 2:41 am
———————————————————–

You said “7% of lower mainland sales are from foreigners”

You sound like poco. Where did you get these numbers? There are no records of this in real estate.

#231 Devil's Advocate on 02.07.12 at 6:05 pm

#214Form Man on 02.07.12 at 4:39 pm
#195 DA

Desperately weaving and trying to elude. Once again I trapped you DA. No worries, run off little rabbit…….more games are ahead.

Seriously… now you are starting to creep me out. Read the book Dude… If you cannot read you can download an audiobook version of it off iTunes. If you cannot afford either just let me know as I always keep a stack to give to clients and will gladly share one with you with no such obligation on your part.

217Canadian Watchdog on 02.07.12 at 4:47 pm
#197 Devil’s Advocate

“Out there they tend to have optimism and hope and are willing to take up the task of averting failure, albeit a tendency to address it at the last minute”

Who’s they? WTF are you talking about?

Those who do not participate on this blog.

#228Form Man on 02.07.12 at 5:47 pm
#219 Sebee

who is the ‘gang’ ?

#209 Robert James

DA is going to have to work hard to shine up these numbers. The housing market in Kelowna continues to decline………

Actually our office numbers for January are in and we are up wayyyyyy up.

#232 Sebee on 02.07.12 at 6:05 pm

#228 Form Man

Who is the ‘gang’?

All the parties that have an interest to keep it going. Government, Bank of Canada, CMHC, CREA, etc. etc. All the rule makers and money printers in this game.

Who are we?
Minnows.

#233 zeeman1 on 02.07.12 at 6:10 pm

#212 Junius.

The Scientific Method is practiced across all fields of science and can easily be used to debunk your religious belief in AGW.

“More of your “no global warming” nonsense. To repeat – there are no qualified or legitimate scientists who do not believe in climate change and that it is more likely man made. None.”

Only an idiot would believe something so patently false as your above statement. What does that make you?

#234 Smart Blonde on 02.07.12 at 6:21 pm

#202 Temenos
Good Question on the stats. I believe I initially read it on a stats Canada site, but I just spent 30 minutes trying to locate it for you. If I find it I will definitely post it. Here are a couple links that say it is more like .7 or .8 %. Maybe that is for all of Canada, and the Vancouver area is 7%, not certain.

http://www.canequity.com/blog/2011-06-foreign-buyers-account-for-small-percentage-of-home-transactions-in-bc/

http://www.royalpacific.ca/market-news-and-statistics/how-many-vancouver-buyers-are-foreign-buyer.php

Anyhow, as I said the Media in all forms has a way of convincing people, young, old and foreign. I just think it is really sad that they are allowed to manipulate the weak as they do. We are taught in school (high school and college) to look at both sides when coming up with an opinion, but with real estate so many people don’t do this, but base their buying on emotion and/or poor information rather than fact.

I have been following Garth for about 4 years, and his source of information, along with some of the bloggers encourages us to think. We can’t believe everything we see or hear!

#235 OkanaganInvestor on 02.07.12 at 6:28 pm

#209 robert james on 02.07.12 at 4:24 pm
The stats are out for the Okangan… Jan. 11 average price $437,328…. Jan 12 average price $415,358 a drop of 5.02 percent.. I bet it is a good time to buy.. LOL http://www.omreb.com/files/01%20-%20CO%20Statistics%20January%202012.pdf

Hard times are here, if you look at the peak residential average house price of $553,000 for the Central Okanagan in April, 2008 and peak median price of $498,000.
That is a drop of 25% for the average house price from April, 2008 and 19% for the median house price from May, 2008.

#236 eaglebay - Parksville on 02.07.12 at 6:31 pm

#198 Londoner ON on 02.07.12 at 3:42 pm
“Here in London Ontario job loses are happening already. Within 6 months we had Ford and Caterpillar close their plants.”

Not to worry.
Walmart will spend $750 millions and create 14,000 new jobs in Canada in the coming year.
These are skilled, good paying jobs. Be mobile.

#237 eaglebay - Parksville on 02.07.12 at 6:42 pm

#212 Junius on 02.07.12 at 4:37 pm
#162 Disciple,
“More of your “no global warming” nonsense. To repeat – there are no qualified or legitimate scientists who do not believe in climate change and that it is more likely man made. None.”
———-
Humm, and the earth is flat, right?
The climate has been changing for billions of years.
Ask the dinosaurs.

#238 Form Man on 02.07.12 at 6:50 pm

#232 Sebee

but surely you jest ? the manipulation you speak of would hardly meet the definition of ‘free market’……which your ‘gang’ pledges allegiance to…….?

# 231 DA

Luckily for me I am not a starving realtor, so your book is of little interest to me.
Glad to hear your office is going against trend, but this blog is actually about the Canadian housing market generally………not about the narrow little world a single deluded relator in Kelowna might inhabit. And good job attempting to change the channel, but the numbers for the Okanagan are bleak to say the least. No movement yet in that MOI…….

#239 GTAGirl on 02.07.12 at 6:51 pm

Seebee; your refer to the ‘gang”, all who benefit from a unsustainable pyramid of housing sales.

This is why I said to you that a failure won’t be written about in national papers. This doesn’t mean it is not happening.

Cheap money can be dangled for only so long. And though the ‘gang’ wants to see prices level off, and moderate increases…it really isn’t for the ‘gang’ to decide.

Job losses, stalling economy and people’s fear of their future is a factor that cannot be controlled. No matter how many sound bites, skewed statistics and glossy sales brochures.

#240 Brad on 02.07.12 at 6:52 pm

What’s a “Superbowl” anyway. Is that like our Grey Cup?

#241 Devil's Advocate on 02.07.12 at 7:13 pm

#238Form Man on 02.07.12 at 6:50 pm

Oh all right then. Clearly I can’t fool you and your fellow Blog Dawgs. The market IS in the toilet. Why else would I have so much time to post my SPIN here. I thought I might be able to make a difference and convince you that things are better that you might buy something and then they might and then they might and then they might and so on. I was hoping it might SPIN around to me that I might get that so desperately needed deal to keep the wolves from my door.

My wife has left me that Amazonian slut… for a rank and file government employee of all things. She say’s she wants to retire – eventually. She took our house and left me the camper but took the truck. My BMW 5 series while equipped with a peppy motor doesn’t have a big enough trunk and I can’t trade it in becaue I still owe 42 of the 48 lease payments still.

You win Form Man, my life sucks… my kids won’t return my telephone calls until my lawyer pays releases the payments I owe them from borrowing against their savings to keep my business afloat. But my lawyer keeps taking what I owe him first.

You win Form Man I’m fed up and can not go on. This market is killing me as I watch prices fall faster than my sellers are willing to accept.

#242 maxx on 02.07.12 at 7:22 pm

#143 truth hammer on 02.07.12 at 11:12 am
” …..this was a federal government initiative and they got stupid greedy. Its was a great cash cow for treasury when the downturn hit……as usual the feds got addicted to the deluge of cash and couldn’t tear their hands out of the cookie jar. Don’t blame this on the banks….the culprits are all in Ottawa. Had the market been left to it’s own devices we would have cycled past this mess and be moving on by now.”

Bullseye, and well put. Although I loathe banks, they can and will endeavor to make cash by any means allowed them by government. Furthermore, it strikes me that there is a pan-institutional, deep-seated, seething hatred of savers. The Saturday Globe’s piece on savers simply strengthened my resolve to save even more. Give up saving? Never! I’ll increase spending when rates rise and not before.

#243 Harlee on 02.07.12 at 7:25 pm

#240 Brad
Ha ha ,that’s a good one. You said (or asked it) perfectly. Four downs – so slow and boring ….”Yawn”

#244 poco on 02.07.12 at 7:29 pm

#230Van guy the REALTOR® on 02.07.12 at 5:56 pm
#93 Smart Blonde on 02.07.12 at 2:41 am
———————————————————–
You said “7% of lower mainland sales are from foreigners”
You sound like poco. Where did you get these numbers? There are no records of this in real estate.
____________________________________________

come on now –where oh where have i stated that Mr realtor—you loose badly on a few facts in previous posts and you try to “dis” me thru the back door–shows a lot to me of what you’re made of –you want to argue housing — i’m all for it–i’m well prepared for my corner of the woods–are you?

PS: do a little research on what Smart Blonde said, she may be right–disprove her if you can thru links, etc.–don’t just jump all over her as you usually do with something that you disagree with—which is most of the time

#245 The Original Dave on 02.07.12 at 7:29 pm

the only mania I’ve ever caught in was the hockey card mania in the early 1990’s. They all look the same. People that are loading up on on real estate in Canada, it doesn’t matter if your house is in “mint” condition.

#246 Sebee on 02.07.12 at 7:36 pm

#238 Form Man

Yes, the gang always does everything according to free market. As they have clearly done over past 10 years.

#239 GTAGirl

They will write about it – IF it happens. But they won’t help to publish “unhelpful” information which could contribute to unsettle. Why would they? It’s self distructive. I don’t think things work that away anymore. Propaganda changes minds and shapes ideas. And all of it – media, news, marketing, this blog, can be considered a form of propaganda because there is usually an agenda in place.

#247 CrowdedElevatorfartz on 02.07.12 at 8:08 pm

Last?

#248 Nostradamus Le Mad Vlad on 02.07.12 at 8:13 pm

-
Men are like bank accounts. Without a lot of money, they don’t generate much interest. Or How Men Really Speak
*
CDS Trigger Merkozy is the gun; Crimes Against Capitalism The US Fed is one, and the Fed Resumes printing; Financial sanctions Iran scoffaws at them, and Iran “Iran attacked no other country in over 200 years. It threatens none now. It’s neighbors know it. So do Washington and Israel.”; Greece “The people of Greece are sending a message to the world that they will not pay for the financial mistakes of corporations and the criminality of the bankers. We need to listen to them.” wrh.com; EMU Breakup Drafted by the French; Shrinking Workforce, as there are a greater number of wars to take part in.
*
1:10 clip Thousands of Syrians welcome Russian FM. Libyans would have done the same; 2:29 clip Russia prepared to use force defending Syria and Iran, and Syria’s Benghazi Moment Except for Russia, China, Iraq and Iran; CC Venice freezes! Bovine Excrometer “President Obama invokes the NDAA, which authorizes the use of military force, and issues an executive order declaring the ‘threat’ of Iran a National Emergency.”; Violent Extremists Compared to the TSA or DHS? DHS defends globalism, not America; UK and US Brothers in hypocrisy; Computer Viruses Facebook and WW3, and Virus infecting virus; Monsanto Protected by the top guns, so the game is rigged.

#249 grantmi on 02.07.12 at 8:15 pm

#236 eaglebay – Parksville on 02.07.12 at 6:31 pm

Not to worry.
Wal~mart will spend $750 millions and create 14,000 new jobs in Canada in the coming year.
These are skilled, good paying jobs. Be mobile.

You’re not serious are you?? Skilled jobs at Wal~Mart!!!

http://www.peopleofwalmart.com/51260

#250 MP on 02.07.12 at 8:21 pm

Haven’t heard about a cyber attack on the GreaterFool blog in awhile. What gives? Security too tight these days or have they given up?

Hosted on Uranus. — Garth

#251 MP on 02.07.12 at 8:22 pm

@Canadian Watchdog

I much prefer to read your posts when they aren’t arguing with DA. Who reads DA’s posts anyway? Stick to the charts, facts and informative analysis.

#252 bcpaul on 02.07.12 at 8:23 pm

Banks are trying to recover loses: My nice prime+1 LOC is now over 9%.

Friend’s $400,000 house bought in 2008 (0 down 40 year), been empty for over a year now and listed for $330,000 — bank repo (divorce). How much of these kinds of losses can CMHC withstand without going bankrupt?

Another friend’s granite and stainless mansion in Kelowna w/12′ ceilings has lost $500,000 since 2008 — can’t sell this one either.

#253 Mister Obvious on 02.07.12 at 8:23 pm

#216 John Prine

“Does anybody else just skip the really long posts?”
———————–

A very long post with no paragraph breaks is generally best left unread. There are two huge benefits:

1) Valuable time is conserved

2) You are spared from trying to decipher the meaning behind lengthy half-baked ramblings.

#254 MP on 02.07.12 at 8:24 pm

I miss Moneta. Did she get banned or something? And how about Mr. Plow? Those were the days…

#255 grantmi on 02.07.12 at 8:31 pm

#222 Miko on 02.07.12 at 5:21 pm

does this guy really believe this?

http://watch.bnn.ca/#clip614869

this Sean Fleming guy is an idiot!!

“We have NO IDEA whose buying our units!!”

What a Mucking Foron!!

#256 Form Man on 02.07.12 at 8:36 pm

#239 GTA Girl

I agree.

#257 Daisy Mae on 02.07.12 at 8:41 pm

216John Prine on 02.07.12 at 4:46 pm
“Does anybody else just skip the really long posts? They seem to detract from the forum. or maybe just non diagnosed attention deficit……”

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

Yes…it’s right up there with wordy resumes and essays. Keep it short and to the point, sez I. LOL

(is that an acromyn?)

#258 Al on 02.07.12 at 8:41 pm

The millionaire in Guangdong will only find out if he reads about it in the China Post.

#259 Daisy Mae on 02.07.12 at 8:42 pm

Sorry….’acronym’.

#260 pathrik M on 02.07.12 at 8:51 pm

A really interesting prediction below from Chris Cook – a British oil market expert. I don’t know whether the prediction will materialize but his argument is solid. If the price of oil were to fall like it did in 2008 then house prices would likely fall very precipitously in tandem especially in Western Canada. Global commodity busts are never pretty for Canada, especially in the West. It would be pretty ugly in Alberta if oil prices and house prices plunged at the same time.

http://oilprice.com/Energy/Oil-Prices/Why-Oil-Prices-Are-About-to-Collapse.html

#261 Preciousss on 02.07.12 at 9:07 pm

It is all stated right here:

“There is no means of avoiding a final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as the final and total catastrophe of the currency involved.” – Ludwig von Mises

Currency debauchment by design. USA then Europe then Australia then Canada then China then the whole damn world………….

Debauchment is the defining motivation of a fiat currency system.

High real estate price is but a mere symptom of the above.

Your money is losing value folks. Plain and simple.

#262 Form Man on 02.07.12 at 9:11 pm

#237 eaglebay

The earth’s climate has indeed been warming and cooling for billions of years. The dinosaurs became extinct after existing for about 250 million of those years. Humans have been around for a few million years at the most, and likely will be extinct within the next few hundred years. Apparently the dinosaurs were much better at adapting than humans are………of course the humans are cursed with a particularly stupid mindset, repeatedly ignoring facts in order to trumpet narrow ideology.
And people talk about things ‘going the way of the dinosaurs’…….if we could only be so lucky

#263 Form Man on 02.07.12 at 9:18 pm

#246 Sebee

your name isn’t Jim Flaherty by any chance ?

#264 MarcFromOttawa on 02.07.12 at 9:26 pm

#254 MP

I miss Got A Watch

I remember his posts from Mish’s blog.

#265 DM in C on 02.07.12 at 9:28 pm

One of Calgary Herald’s most commented story today on the fact that “Poll shows Calgarians not likely to buy homes this year” has already been taken down by the paper. Guess the advertisers aren’t happy about that one.

http://www.calgaryherald.com/business/real-estate/Poll+shows+Calgarians+likely+homes+this+year+Will/6113128/story.html

#266 jess on 02.07.12 at 9:40 pm

Subtitle: Cover story
Written by Bruce Livesey
Issue Date: February 2012
The offshore banking nightmare
http://www.canadianlawyermag.com/4031/the-offshore-banking-nightmare.html
According to evidence gathered by a U.S. Senate subcommittee, the Swiss financial services company UBS had accumulated about $6 billion from wealthy Canadians that had not been reported to tax authorities.

In 2009, then-minister of National Revenue Jean-Pierre Blackburn, said that 106 wealthy people had used RBC Dominion Securities Inc., the brokerage house of the Royal Bank of Canada, to set up offshore accounts in the European principality of Liechtenstein. As much as $100 million was sitting in these accounts. An investigation by CRA discovered that at least three RBC Dominion Securities advisers had helped people hide this money…”etc etc

=

Julius Baer expects to deliver client data in U.S. probe
http://www.reuters.com/article/2012/02/06/us-juliusbaer-ustax-idUSTRE8150NB20120206

#267 The Thing in the Basement on 02.07.12 at 9:42 pm

98 Betamax – “But pedantry is always pedantry.”

Dammit I had to look that up too….

#268 Canadian Watchdog on 02.07.12 at 9:43 pm

#251 MP

Yes I’ve realized DA is just a ranting poet who ended up in RE somehow.

Speaking of charts…this bell curve is ready to go exponential—negative. http://i42.tinypic.com/2ezh3ya.png

#269 Daisy Mae on 02.07.12 at 9:48 pm

A new low…

Global TV tells us tonight that the Conservative government condones torture. How about that? Passed in 2010….

#270 jess on 02.07.12 at 9:49 pm

life is a contact sport

92% of U.S. small business owners surveyed agree that U.S. multinational corporations’ use of accounting loopholes to shift their U.S. profits to their offshore subsidiaries to avoid taxes is a problem.
81 percent of small business owners favor hedge fund managers paying taxes at the ordinary income tax rate, which currently tops out at 35 percent, rather than the 15 percent capital gains rate they pay now.

And much more. A most important piece of research. The summary is here; the full report is here. Hat tip: Nicole Tichon.

http://mainstreetalliance.org/wp-content/uploads/2012/02/release-poll-taxes.pdf

=

Seven of the 16 foreign oil companies decided to pull out, and their fields were taken over by state-run companies. But the others stayed on and, as a result, state revenues increased by $870m (£563m) in 2011.

Second, and possibly even more impressively, the government managed a dramatic increase in direct tax receipts. In fact, this has been even more important in revenue terms than oil receipts. Direct taxes (mainly corporation taxes) increased from around 35% of total taxes in 2006 to more than 40% in 2011. This was largely because of better enforcement, since the nexus between big business and the public tax administration was broken.

Third, these increased government revenues were put to good use in infrastructure investment and social spending. Ecuador now has the highest proportion of public investment to GDP (10%) in Latin America and the Caribbean. In addition, social spending has doubled since 2006. This has enabled real progress towards the constitutional goals of free education at all levels, and access to free healthcare for all citizens. Significant increases in public housing have followed the constitution’s affirmation of the right of all citizens to dignified housing with proper amenities.
http://www.guardian.co.uk/commentisfree/cifamerica/2012/jan/19/ecuador-radical-exciting-place

#271 AprilNewwest on 02.07.12 at 9:57 pm

Daisy Mae #259- John Prine
Yes, I too skip long posts.

#272 disciple on 02.07.12 at 10:08 pm

#212 Junius… No, I did not miss that article, and I also did not miss the original WSJ article. Irrelevant, anyway. I see that you did not read what I offered. Too bad for you.

As soon as the rare-earth battery revolutionizes transport, energy infrastructure, and global balance of power, the silly and pseudo-scientific cash-grab known as AGW/Climate Change will be shelved alongside equally juvenile political plays such as Malthusian overpopulation, social Darwinism, acid rain, global cooling, ozone depletion, and vaccines. I could name others but I don’t want to confuse too many people all at once. (You have to read disciple slowly and with some tea).

Okay, I couldn’t resist. here are some other “facts” that will soon be tossed into the history landfill: dinosaurs, particle-wave duality, cancer research (vitamin B17 cures most forms of cancer), continental drift, speed of light constant, dark matter/dark energy, the phenomenal run of Stephen Hawking and Richard Dawkins, central banking and money itself… Good riddance.

#273 GeoKall on 02.07.12 at 10:09 pm

It’s different here. Houses in Newmarket are selling like hot cakes. Within a week of a listing the house is sold. I agree with what you are saying, but how do you explain this market?

#274 Throwstone on 02.07.12 at 10:20 pm

#193 sebee…

Has this cycle earned the High Score on all fronts in this real estate game of Ms. Pac Man?—NO ….i dont think so ….unless your definition of high score is unaffordable housing and poor economic policy.

Has it defied experts and economists since 2005?…NO…I would say Garth is an expert and was’nt defied and Jim Flaherty and Steven Harper are no economists.

Did it survie the biggest US recession(depression/great recession) with flying colours?…NO

Do all parties involved recognise the economic contribution, job creation that comes with it?….NO I don’t think so….

Are all parties afraid of the US scenario?…NO or clearly they would not have orchestrated such an imminent disaster…

If you answered “yes” to all – thank you for being my data sample.

I have answered “no” to all ….

Now its great that you take the position that all parties involved will do whatever they can to keep this party going….O.K. sure….thats great….it will still be over soon….one way or another…the party will end…

Do you think flaherty will raise the debt ceiling?

#275 Junius on 02.07.12 at 10:28 pm

#272 Disciple,

Thanks for proving my point. I always suspected dinosaurs and continental drift were conspiracies.

When does the mother ship arrive to beam us up?

#276 eaglebay - Parksville on 02.07.12 at 10:29 pm

#249 grantmi on 02.07.12 at 8:15 pm

Construction jobs, dummy.

#277 Mississauga GTA on 02.07.12 at 11:14 pm

Mississauga… Not to many listings in my area and the few there are seem to take a long time to sell and quite a few price drops. Also the regular realtors are MIA… Seem to be in hiding. One realtor told me recently that a house will sell if you wait long enough??? In my experience… It will.. 1. With a significant price drop and 2. To some desperate person who is house desperate… Granite, expensive appliances. Just saw someone take a million from the bank and another 600k in a vendor take back loan… Seems like a win win for the seller… Still have some crazy people in the GTA. I’m just waiting for the price drop…. Fingers crossed as I really think its just out of control in the GTA.

#278 Don on 02.07.12 at 11:27 pm

#202 Temenos

Your comments about the industrialists in china provides no facts and no context. When China’s housing bubble bursts (hasn’t that already started ?) all those industrialist will have to down size etc etc etc. Paper gains will be lost – and who exactly will be buying their goods. More protectionism in on the way for most countries. China doesn’t exist in their own vacuum. Look at all the vacant restaurants in Vancouver and Victoria and tell me that people aren’t worried about their finances. Look at the decrease in attendance at Whistler. And empty vacant immigrant owned properties in van will also have an affect on bringing down real estate. I guess you only cherry pick information and most likely have a vested interest in vancouver real estate. Oh and if the US pushes the war button china is on the other side of the equation which will most certainly shut down most immigration for a while. All this could happen and more, your best case scenario isn’t even relevant at the moment. You are living with the belief that the world’s economic crisis will get much better before it get’s worse. I guess they don’t teach critical thinking anymore.

In the 1980’s it was the immigrants from Japan that were going to save Vancouver house values – most went back home – i know cause I had a lot of Japanese friends at the time. China has a demographics problem and the one child per family has put an increasing burden on that one child to support their relatives. I highly doubt their are 200 million chineese industrialist.

Provide proof and we can talk – you must be an english major.

#279 disciple on 02.07.12 at 11:30 pm

#275 Junius on 02.07.12 at 10:28 pm… “I always suspected dinosaurs and continental drift were conspiracies.”

No, you didn’t. But thanks to disciple, you don’t have an excuse anymore. And you have no point except that a lot of people who depend on their livelihood to profess belief in a theory… mostly profess belief in that theory… How convenient.

#280 Sebee on 02.07.12 at 11:34 pm

#263 Form Man

Don’t blow my cover please.

#274 Throwstone

Yes, I believe he will raise it, with some mild changes perhaps like Garth pointed out. Why wouldn’t he? They’ve done everything to prop RE up. Why stop now?

Of course there are a few weeks left before the budget. If it is already really as bad as is being reported perhaps he won’t need to raise it. Or the raise will be more symbolic but not really utilized as the debt diet begins.

#281 Don on 02.07.12 at 11:57 pm

I should add to my last recent post…

With Vancouver House prices at an all time affordable level, and desire to own is high, and prices are set to increase even more. Don’t those rich immigrants from lands far away know that house prices in Vancouver are increasing on a daily basis and they too will be “priced out forever” if they don’t act today? Somebody should tell them! I could be wrong but Vancouver real estate has no current saving grace. It’s been getting worse, not better and as we all know downward momentum is hard to stop and upward is hard to maintain, things don’t look fairy tale anymore. I wish it were somewhat the opposite for the sake of our economy. We need the delusional partying to come to a stop.

#282 grantmi on 02.08.12 at 12:28 am

#276 eaglebay – Parksville on 02.07.12 at 10:29 pm

#249 grantmi on 02.07.12 at 8:15 pm

Construction jobs, dummy.

Then say that dipstick!

#283 Roial1 on 02.08.12 at 12:36 am

#168VICTORIA TEA PARTY on 02.07.12 at 12:49 pm

But for these treacherous fifth columnists to try and sabotage our future every which way and at the behest of their American masters is the worst sort of economic sedition.

Shame.

Yup! just like you selling out to the “U.S.” oil interests.

By any hand, did you know that WE are the ONLY oil producing nation that pays world price for OUR oil products.

Of coarse any protest is to be beaten down by you and your sellout kind.

There is “sell out” and there is “sell out.” it realy only depends on who to who dosen’t it?

#284 basically.nobody on 02.08.12 at 5:19 am

So what if you buy a house for 450k and a couple years later its worth 350k. It’s a 100k. You going to kill yourself over a measly 100k??? How much is your F350 or your Toyota Camry worth after a few years??? You ppl worrying about worrying … paralyzed with fear.

How about shift your thinking! Focus on MAKING MORE MONEY and QUIT BORROWING!!!

Yes – cdn re is overpriced and re brokers are greedy liars. But if you want to buy a house, offer what you can afford to pay! if they accept, great!

Yes – wealth mgmt firms are trying to sell you a product… that 6% is something special. if you think that’s great, then sign up.

Yes – everyone is out to make a buck off you. Grow some balls and start thinking for yourself.

…. And for the love, if you don’t have the money for something, don’t buy it.

#285 D on 02.08.12 at 5:33 am

#269Daisy Mae on 02.07.12 at 9:48 pm
A new low… Global TV tells us tonight that the Conservative government condones torture. How about that? Passed in 2010….”

We read that in the UK here and I was profoundly ashamed to be Canadian at that moment.

#286 TurnerNation on 02.08.12 at 9:23 am

241Devil’s Advocate on 02.07.12 at 7:13 pm

I thought you drove a 3 series ;-p
Nice to see you have seen the light.

p.s. anything with a 3 in it is a ‘chicks’ car: BMW 3, Mazda 3….

#287 TurnerNation on 02.08.12 at 9:26 am

#250 MP on 02.07.12 at 8:21 pm

Those cyber attacks bore the fingerprints and hallmarks of Al-Harper gang. They have embraced social media, alright. Sraping facebook photos and banning non-believers from rallies. I bet they keep a list of blog dogs and emails addresses.

#288 Daisy Mae on 02.08.12 at 11:24 am

#285 D: “We read that in the UK here and I was profoundly ashamed to be Canadian at that moment.”

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

Yes, we know it happens. We’re not that naive. But the Cons actually passed legislation in 2010 making torture ‘legal’.