Crazy anxious

If you can stand in the cold all night and don’t need to pee, I’ve got a deal for you. But only if you can drop $600,000 in ten minutes. Then you can relieve yourself. Welcome to Jefferson Forest!

Ten nights ago, in the snow, a whack of horny, delusional people stood for as long as 30 hours in front of a sales trailer in the GTA hinterland known as Richmond Hill. There was nothing being given away. No prizes for the first in line. Once the doors opened and the crowd pushed inside, camaraderie in the deep freeze outside turned into desperate competition as the hooded, jacketed suitors pushed rudely around map tables and jostled for the right to occupy a chair and scribble their names on an offer to purchase.

What did they lust after? A new release of unbuilt houses selling on average for more than $700,000 on lots as skinny as 32 feet, in a distant suburb of Toronto. The event  was remarkable for the thronging, the pushing, the instant buying and the palpable desperation. “It was like everybody was crazy anxious when they got in,” one player told me. “Little women were bodychecking me to get a red dot stuck on a map square. Unbelievable.”

More remarkable was the fact anybody in the line could have booked a leisurely showing of an identical house already built, and on the market as a resale, in an earlier nearby phase of this development. And most incredible? This is rural Toronto, in a part of the country where untold thousands of new homes are under construction, where a giant supply of useless farmland is being dug up to house families who worry about food costs.

Some people suggest what happened at Jefferson Forest is proof there’s no housing correction, no bubble bursting, no reason for concern and further evidence this blog should be castrated and hung on a sharp stick. But I think not.

This actually reminds a ton of one winter evening in 1989 when I dove up to a sales trailer in a bleak, wind-whipped and blizzardy field in Mississauga. Standing amid the forest of little red stakes pounded into the frozen dirt were about five dozen young couples, shivering and waiting for their five minutes inside to buy a new house. As I interviewed a few of them (I was a swarthy hunk of a reporter at the time), the jerks in charge of the subdivision were busy hoisting a new banner on the wall behind us, jacking prices by $15,000. The crowd gasped, and pushed forward.

Five months later, the real estate bubble was pierced. A year later, the market was in tatters. It would take almost 15 years for the price of an average home to regain the pinnacle upon which it sat that night – when so many were desperate to buy.

This is what people do. They chase prices up. Crowds reach a common consensus that what happened in the last year, or the last 15 minutes, will now take place continuously. Most cannot conceive of danger, when surrounded by other people doing the same thing. It’s why there was a rush to buy Nortel or Bre-X stock, profitless dot-coms in 1999 or ugly houses in Richmond a year ago. The crowd comes to a collective decision, and then free will is lost. Almost always, the crowd gets it wrong.

It’s also why the greatest torrent of selling in modern times happened on March 9, 2009. That’s when millions of investors unloaded billions in financial assets in a wave that created its own panic. That Monday the Dow hit a 12-year low. The next day it rebounded 5.8%. A year later it was higher by 50%. The sellers had been pounded into sand. The buyers were handed opportunity.

What happened in Richmond Hill, with its unique frenzy, was a warning. A harbinger.

Remember it.

259 comments ↓

#1 Anna Adamson on 02.22.12 at 10:00 pm

Nuts. Absolutely nuts.

#2 jonathan on 02.22.12 at 10:03 pm

first

#3 Cookie Monster on 02.22.12 at 10:03 pm

Ugh, I’ve had to stop logging into facebook. My mid twenties peers who all caught the marriage bug six months ago have all fallen into the new house hysteria and are slobbering it all over FB. Im amazed how a ring road being built so people can just drive right around E-town is making people scramble to buy up all the new pre sales beside the highway because “prices will go nowhere but up!”

#4 Bojangles on 02.22.12 at 10:03 pm

Further evidence that if you’re inside a sales presentation centre, you’re probably and idiot.

#5 pathcontrolmonk on 02.22.12 at 10:05 pm

Recently, sellers in Vancouver have been taking their houses off the market as they are “waiting” for prices to go back up…

#6 torontorocks on 02.22.12 at 10:06 pm

uh, frist?

I get calls to buy NOW, Torontorocks, NOW. You missed 5% appreciation while sitting on the sidelines for the past year and there are no indications that prices are going to fall…so its about 10% that I’ll have lost.

I don’t want there to be a catastrophe. I do want some normalcy. I don’t do lines and I don’t do panic purchases but sometimes I sit here and think…I really missed this.

#7 Jamaican_Gal on 02.22.12 at 10:06 pm

Fiiirrst in line to buy a that? Wow!

Fiirrst!

#8 anon on 02.22.12 at 10:07 pm

Racist photograph.

Shame on you Garth Turner

Wha…? — Garth

#9 tired_of_idiots on 02.22.12 at 10:08 pm

Common sense has no place in this crowd. The only justification given for this continued frenzy is this continuing frenzy.

#10 Ayn Rand on 02.22.12 at 10:08 pm

I remember 1989 too well. Garth, when is your next book coming out….I am anxious to buy it – thought the ETA was October 2011???

#11 Dan on 02.22.12 at 10:09 pm

In 1989 December by luck I sold a house in the city to a speck/builder tore it down erected two semi’s they sat unsold for four years

#12 Tim on 02.22.12 at 10:10 pm

What is even more remarkable is that people would pay even half that amount of money to live in a suburb of Toronto. How long is that commute?

#13 Mr Buyer on 02.22.12 at 10:11 pm

What troubles me is the potential inference that if people simply do not sell then there will not be a crash. If people do not entertain lower offers for their homes then buyers will have to capitulate. The fact is that the need to buy and the need to sell are rarely of the same magnitude. Yes the need to buy can be artificially enhanced through various forms of manipulation such as a percieved lack of supply but rarely with respect to housing is the need to buy ever even close to the need to sell. Do not get trapped into a money pit requiring you to sell it. The bubble has topped. BUYER BEWARE. DO NOT BUY INTO A FALLING MARKET. BUYER BEWARE.

#14 Loon on 02.22.12 at 10:11 pm

So many Asians willing to get forked.

#15 truth hammer on 02.22.12 at 10:14 pm

Garth, as you posted the pictures I guess its fair game to comment that the buyers appear to be exclusively of one ethnicity. The one and only exception seems to be the harried sales person. Is this the lemming like herd mentality at work amongst a certain group? I have to ask….is the advertising and ‘news feed’ to that community the same as everywhere else?

But aside from that…there seems to be a nasty to and fro over the RRSP/ Dividends debate between the two newspapers we have in Canada ( pathetic isn’t it?) . In this article the writer asks us to believe that RRSP saving inclusion of Dividend equities is a good thing etc etc. But my question is…..if his calculation on taxes is correct…and the government clawas back the full amount of deferred taxes plus interest…….whats the point of an RRSP in the first place as in reality a net net savings account producing the same returns woul garner the same returns? Care to comment?

http://www.theglobeandmail.com/globe-investor/investor-education/investor-clinic/dividend-fans-rrsps-are-your-friend-not-your-enemy/article1962184/

Never put dividend-producing assets in an RRSP, unless you like paying more tax. — Garth

#16 Dean on 02.22.12 at 10:14 pm

Lools like a real classy bunch-jogging pants and all!!

#17 alex on 02.22.12 at 10:17 pm

I hate to tell you garth but the old saying is the trend is yor friend why are you fighting the trend looks like there is no way but for real estate to go up stop trying to keep things down when they are going up .. remeber the trend is your friend and its pointing up .. live and learn rookies..!!!

#18 Fun times on 02.22.12 at 10:21 pm

I’m not surprised at all. A 50′x150′ lot with a 2500 square foot house in working class East York (east of downtown) will cost you $1.5M. Getting a house for half that 20 minutes north of the city isn’t that unreasonable (in relative terms at least. Sure in absolute terms it’s assinine). The developments in Richmond Hill near Yonge are pricier as well since they’re close to the Go Train line that goes downtown. Ok I know the price is still stupid, but I’m just trying to give some context. Go to Markham and the price drops $100k. Go to Newmarket the price drops probably another $100k. Go to Uxbridge or Keswick and the price drops again and you’re probably about half the price of something on Yonge in Richmond Hill.

Anyone spending $700K in a few minutes needs help. — Garth

#19 Mr Buyer on 02.22.12 at 10:22 pm

I sometimes wonder if giving these outlier stories this kind of real estate on your blog does not in fact have the unintended effect of serving to propogate the bubble. This is happening for certain but I suspect with nowhere near the frequency it was happening scant months ago. It is not like the story will not get extreme coverage in the mainstream media. Is there data available reguarding the frequency of these events and if there has been a change in frequency. Every poor soul that buys in now is buying into consquences many magnitudes greater than those that bought into the bubble a year or two ago. People buying now are buying just as the top of the bubble passed. BUYER BEWARE. THE BUBBLE HAS TOPPED. NOW IS NOT THE TIME TO BE BUYING A HOUSE. DO NOT BE LEFT HOLDING THE BAG. BUYER BEWARE.

#20 I'm stupid on 02.22.12 at 10:23 pm

Just like sitting in on a time share. Everyone grouped together in one room, and bells or cheers going when some one buys one (real or fabricated). Its designed to make you feel like its a good deal, when you say Las Vegas real estate is bust circa (2006) the sales guy goes ape shit. They will learn the true meaning of risk.

#21 T.O. Bubble Boy on 02.22.12 at 10:25 pm

Good to see HAM doesn’t just stick to Markham!

So, this place is about 20-30 minutes drive north up Yonge St. from the nearest subway station… with all of this sprawl being built, soon the Brothers Ford will try to plan a subway extension for the couple hundred folks in these photos (cost: $20B).

#22 Suede on 02.22.12 at 10:27 pm

Some nice housing plans in that development. At least they’ll be close to Canada’s Wonderland.

Behemoth…now that’s a roller coaster.

I wonder if any of these people lining up were paid like the pre-sale of Sovereign in Burnaby’s Metrotown.

http://www.greaterfool.ca/2011/02/13/omnipotent/

#23 Sh on 02.22.12 at 10:33 pm

RE #8 anon
Don’t ya know, Garth, that you’re supposed to have a mix of at least 8 different ethnic groups in each photo otherwise you’re racist? Same logic applies to buying now–that unless you buy the prescribed granite counters ans SS fridge and buy a house/condo now you are being politically incorrect. Uchiyama Roshi called this guruppu boke–the blank-mindedness of the group, or “herd mentality.”

#24 Harold Svenson on 02.22.12 at 10:34 pm

Why are these new subdivisions always named after what used to be there before the earth moving equipment ripped it all out?

#25 Ret on 02.22.12 at 10:38 pm

The people marketing Fieldgate Homes are idiots and their sales contract should be terminated. They could have easily squeezed another $25-50,000 out of these rabid house horny folks. It’s a feeding frenzy in there!

I’d run over them for thousands for the granite and hardwood. The buyers won’t be able to flip these joints at those prices without the must haves, granite and hardwood. The builder can have his way with them. The buyers need to be worked over for at least another $30-50,000 in overpriced options.

RE, don’t you love it? The last bastion of brass knuckled capitalism.

#26 JSS on 02.22.12 at 10:38 pm

I think I may have an ear infection. I remember yesterday’s blog had some remedies listed.

Stop that. — Garth

#27 I'm stupid on 02.22.12 at 10:40 pm

#18 fun times

I know what your tring to say but it’s the wrong way to look at things. You can move to the north pole and live for free. Life will not be pleasant and that’s the point. It’s not about price it’s about price/quality of life. Current prices are making life horrible. What quality of life can a new buyer have when 60% of income goes to housing?

#28 ozy - Soon, they will be POORMOND-HILL-ians on 02.22.12 at 10:41 pm

Some people believe buying in RICH-MOND HILL will make them rich, o yeah, baby, Richmondians!

But very soon, they will be HOUSE-POOR-ians. I guess some generations never learn, rememember asian crisis decade ago?

Hong Kong stocks fall, with real-estate dropping

http://www.marketwatch.com/story/hong-kong-stocks-fall-with-real-estate-dropping-2012-02-22?link=MW_home_latest_news

#29 };-) aka DA on 02.22.12 at 10:47 pm

It is what it is. To say it isn’t, forecast what it will be or pontificate what it should be is demonstrative of angst and worry. It is what it is – deal with it.

#30 Condo Sucker on 02.22.12 at 10:48 pm

What strikes me when I look at these Jefferson Forest pictures is how young some people in there look, as if barely removed from their mid-20′s.

I actually fear for their souls, as they sign on for 30 years (or will it be 25, F?) of debt slavery.

#31 Uh Oh Canada on 02.22.12 at 10:52 pm

Wow! After reading this post I’ve come to believe that it’s the end of the world as we know it- and I feel fine.

#32 45north on 02.22.12 at 10:55 pm

Tim: How long is that commute?

Brother-in-law says that sometimes the 400 just stops. On those days it takes him hours to get home.

In Toronto that’s called ‘quality of life.’ It’s why God made satellite radio. — Garth

#33 Mr. Lee on 02.22.12 at 10:56 pm

Heard Mentality

As Jim Rogers says, ” when the masses flood to an asset, its time to short.”

Regression to the mean.

Enjoy the ride.

#34 Min in Mission on 02.22.12 at 11:01 pm

Good thing we are Canadian. We’re different here!!!

#35 Victor on 02.22.12 at 11:03 pm

#29 };-) aka DA on 02.22.12 at 10:47 pm

It is what it is. To say it isn’t, forecast what it will be or pontificate what it should be is demonstrative of angst and worry. It is what it is – deal with it.

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

The last item on this list might be of interest to you.

http://tinyurl.com/76lq4j9

#36 Al on 02.22.12 at 11:03 pm

“A swarthy hunk of a reporter then” – I always read your real estate columns in the Toronto Sun back then in the 80′s when you advised buying real estate and made a tidy sum of money taking your advise.

#37 Renting In The GTA on 02.22.12 at 11:09 pm

That is the exact area the wife and I sold our house…
We are now renting and waiting for the Market to cool down…

#38 Retired Boomer - WI on 02.22.12 at 11:09 pm

The run-up in Canadian RE has me double concerned for the recent run up in equity prices, while there has been no great news to support it, AND the continuing expansion of global money supplies….would you be a Bond buyer of Gov debt now ….. how about Canadian Bank stocks?

I can not determine what I’m smelling, but it isn’t dinner

Try corporate profitability. — Garth

#39 Canadian Watchdog on 02.22.12 at 11:10 pm

More TREB stats for the blog showing 2011 condo price gains by zones within the central, eastern and western parts of Toronto (excludes outer GTA). The annual average was calculated from the 12 month monthly price change (by zone). Data is for condo apartments only.

Zone – 2011 Average Percent Gain %

E01 2.8
E02 0.2
E03 1.4
E04 2.4
E05 1.5
E06 0.6
E07 1.7
E08 0.2
E09 0.3
E10 0.0
E11 1.8
W01 1.7
W02 0.4
W03 0.9
W04 0.9
W05 7.0
W06 1.2
W07 5.6
W08 2.1
W09 7.2
W10 1.5
C01 0.5
C02 3.2
C03 2.7
C04 8.0
C06 0.1
C07 0.1
C08 0.5
C09 6.5
C10 0.5
C11 3.1
C12 6.3
C13 0.7
C14 0.7
C15 2.3

Total Average For Toronto C.E.W. +2.0%

TREB Zone Map (Click To Zoom In) http://www.torontorealestateboard.com/buying/district_map/index.htm

Additional Charts: Trend-line is 12 month moving average.

Toronto C.E.W. Average Condo Price http://i39.tinypic.com/33ylx86.png
Toronto C.E.W. Average Condo Sales http://i40.tinypic.com/35314k9.png
Toronto C.E.W. Average Condo Active Listings http://i39.tinypic.com/29z4n0i.png
Toronto C.E.W. Average Condo vs CPI Indices http://i42.tinypic.com/fz217a.png

BILD Toronto High Rise Condo Sales http://i39.tinypic.com/a1jz7s.png
BILD Outer GTA High Rise Condo Sales http://i42.tinypic.com/14aynhf.png

Time for a ‘Greater Fool Home Price Index’ Garth?

#40 shanks on 02.22.12 at 11:15 pm

#8 anon on 02.22.12 at 10:07 pm
he is referring to the asian dominance in the pictures… I guess anon has never been to Richmond Hill, its a lot like Richmond BC from what I hear. It is also known as China Town North, and with reason. There are commercial areas there where you will not find a sign in English (or French for that matter), and might even be hard pressed to find someone who can or will speak English :)

cheap lobster tho…

#41 sam.i.am on 02.22.12 at 11:23 pm

I’m glad Garth mentioned the history from 89. Remember what followed that time was a deep recession and terrible unemployment.

I remember well thinking in 1997 that the experts were all wrong and the us economy was fine…because everyone around me still had jobs. Then the shtf and slowly but surely someone here and another one there got laid off and stayed laid off. The markets tanked, wiping out wealth (for those who sold). It was very stressful. This is when the panic starts, and it will cause all kinds of behavioural changes, none of them good.

#42 cool on 02.22.12 at 11:23 pm

a new grad engineer , Im mentoring , bought a brand new semi for may be 350K in the middle of Alberta prairies.

Not being racist, but he is Chinese descent.I think it is very firmly believed in Chinese way of life that everyone must have properties- at any cost.

#43 Smoking Man on 02.22.12 at 11:23 pm

Garth when are you going to figure out the herd is dumb, but to go against it’s sentiment is even dumber.

Canada via education has produced the most compliant obedient memorize regurgitate, believe what’s on TV tax and bank slave class ever imaged.

If you’re a renter in the eyes of your peers you’re a loser. You’re not worthy. You’re scum of the earth. You are not one of us.

I have learned so much this week fking with my shrinks head while looking at her ass.

Ba hahahahahahah

Garth I thank you for editing and not even acknowledging some of my substance induced rants. And thanks for letting me keep posting even though you should have long banished me.

Like you I’m a creative and I think you sort of think that’s cool. But one will never know what the true boundaries are until one pushes them.

You can’t bend what you can’t offend

Yes I have knack for calling trends way in advance, but unfortunately the cost is true insanity.

RE is along way from tanking here. Sorry about

#44 sam.i.am on 02.22.12 at 11:23 pm

1997 should be 2007.

#45 Freedom first on 02.22.12 at 11:23 pm

Debt slavery. Somehow, a lot of people have gotten debt confused with wealth. Except for the wealthy people, of course.

#46 noodles 79 on 02.22.12 at 11:25 pm

Low interest rates and media hype have made the price of a property irrelivent. Todays buyer is so infatuated with the low monthly cost that the actual price doesnt matter.Todays buyer has no intention of paying a house off. Thats why we have these crazy prices, the market has gone so good for so long, that as long as they can hold on for a few months, there will be a sucker lining up to bail them out at a higher price. But eventually even the suckers get out their calculaters and realize that something smells bad.When things slow down and people cant sell as quikly as theyve been accustem to, it will dawn on them that their on the hook for some big bucks,thats when panic sets in and everybody starts unloading at the same time.And walla, the bubble bursts.

#47 Pound Puppy on 02.22.12 at 11:28 pm

I miss Smoking Man!

Follow the fluids. — Garth

#48 Clockbike on 02.22.12 at 11:34 pm

*cough*
http://www.youtube.com/watch?v=o3IrWk0hy6Q

#49 stage1dave on 02.22.12 at 11:41 pm

Oh boy…yesterday it was those damned habs fans, today it’s Bre-X & more 700K working-mans’ houses…on 32 ft lots? With purchase lineups…

I’m obviously insane; along with my GF. We’ve spent the last several years renting while the market (in Edmonton, anyway) gyrates nominally up & down & have enjoyed spending our money on stuff we need, want, or simply desire. Also, we’re able to take a few days off or leave the shop at 1pm on a friday because we’re simply tired of working.

All of which would be impossible should we decide to make the bank rich…

Guess I’ll resign myself to renting for a few more years, but the GF & I will console ourselves by spending all that money that didn’t go into a McMansion on fast cars, more toys, & wearing out our passports.

Life sure is tough when you don’t own a house…

#50 DML on 02.22.12 at 11:42 pm

From a Businessweek article a few years back:

“Soon after, the tulip market crashed utterly, spectacularly. It began in Haarlem, at a routine bulb auction when, for the first time, the greater fool refused to show up and pay. Within days, the panic had spread across the country. Despite the efforts of traders to prop up demand, the market for tulips evaporated. Flowers that had commanded 5,000 guilders a few weeks before now fetched one-hundredth that amount.”

#51 Smoking Man on 02.22.12 at 11:45 pm

I watched an episode of criminal minds tonight.

99% of the people watching it had no Idea that it goal was an effort to plant a subliminal message to be planted in the sub conscious part of the mind.

In a nut shell we had a guy running for office and a lone wolf out killing people on his behave.

Later down the road in the real world ( The Matrix) the machine will try and correlate the lone wolf and the political leader as the same story. Hum Ron Paul

You renters are no match vs the machine…

#52 renters rule on 02.22.12 at 11:45 pm

had another jump the shark RE moment today (or jump the couch if you are a tom cruise fan, not a fonzie/happy days fan!).

At my drycleaner’s in Van’s west end this morning dropping off shirts, the extremey nice man behind the counter (an overseas chinese fellow who has probably been in Canada 10+ plus years, who works his ass off, along with his wife, 6 days a week 12 hours a day) now proudly displays, taped to the cash register, his newly minted business card (with smiling photo) advertising his RE business! He is newly minted, working “part time” out of the Pacific Realty offices at Oakridge Mall….

:-o

complete madness

#53 NYCer on 02.22.12 at 11:48 pm

So I met with my landlord and her agent today to discuss extending my lease (already a year renting). They were shy to ask for an increase and I said no. I agreed to give them 6 months worth of cheques and they agreed if I wanted to leave, just give 2 months notice.

Interestingly enough, they were really frank about the mail I gave her since it was mailed to me. Her mortgage was about $1400-$1500 a month. That is basically what I pay for rent. So she also has to pay out of pocket the condo fees and property taxes which is at least $600/month etc. She also paid about $360k for the unit which from what I last saw, prices never changed for same units in my building in the last year. Her rate is about 2.25% and she asked if she should go fixed or not and what should she do with these property tax letters and mortgage letters lol. I’m renting from an idiot!

So by doing the math, she has a mortgage of over $310k! So scary!

#54 Canadian Watchdog on 02.22.12 at 11:49 pm

Correction on my post #39. The word ‘average’ only applies to price charts.

#55 John on 02.22.12 at 11:52 pm

Never put dividend-producing assets in an RRSP, unless you like paying more tax. — Garth
———————————————————
You won’t pay any more tax then any other investment in the RRSP, what it comes down to is what will give you the highest rate of return in that RRSP, but all gains are taxed the same in the end. I do understand that dividends are given preferential tax treatment in a non tax sheltered account but it doesn’t change my statement.

#56 Van guy on 02.23.12 at 12:04 am

The true reason why Canadians are horny as hell is because of one reason, money. I swear, people love real estate because they’ve made so much money in the last decade off of it. These people all want a piece of the pie. They get jealous of their friends because they’ve gained so much equity and flipped for so much money. It’s all about money, and always will be. Money changes people. I love money, and I’m sure you all do as well.

#57 Claudius Emperor on 02.23.12 at 12:07 am

And they lived happily ever after.
Amen.

#58 Spiltbongwater on 02.23.12 at 12:08 am

1. You are reading this comment
2. You realize that this is a dumb fact
4. You continue reading
5. You realize that I skipped 3
6. You’re checking to make sure
8.You’re smiling
9. You realize I skipped 7 and are checking again
10. You realize that this was a waste of your time

#59 man_sion on 02.23.12 at 12:10 am

I really do not understand why so many people get so much emotional and nuts on owning a house/condo whatever? In life, I will say except the human body our life temporarily attached to, we own nothing in this world. We are just short-trip passengers like our grand-grand parents ever did before…

If you don’t have a backyard as you may rent an apartment, don’t be bothered as you can always go to the big Parks an it is much larger than any backyards. And if you don’t load such big mortgage to buy the house, you always have the cash to go travel to enjoy the world as a temporary passenger in this world…

#60 Bottoms_Up on 02.23.12 at 12:14 am

#8 anon on 02.22.12 at 10:07 pm
——————————————-
I know eh? Garth really hates the whites. LOL

#61 harden on 02.23.12 at 12:17 am

#8 anon

“Racist photograph”
_______________________________________

What a loser. Your anonymous post befits your pitifully transparent remark. Are you hurting for listings?

#62 Bottoms_Up on 02.23.12 at 12:17 am

#51 Smoking Man on 02.22.12 at 11:45 pm
———————————————
I smell a fake…..

#63 Bottoms_Up on 02.23.12 at 12:18 am

#50 DML on 02.22.12 at 11:42 pm
—————————————-
ENOUGH with the 400 year old tulips already!!!

#64 guy from toronto on 02.23.12 at 12:18 am

#58 spiltbongwater

that was deep, man

#65 Bottoms_Up on 02.23.12 at 12:22 am

#40 shanks on 02.22.12 at 11:15 pm
—————————————
Huh? There are 3 pictures, all of people buying condos in Canada. I see different skin colours in the photos. Can’t make out the citizenship on their passports though.

#66 terces on 02.23.12 at 12:31 am

Alberta is so screwed. If you think there is overbuilding in the condo market in TO, you should see the overbuilding in the oil sands.

It is like all of these companies from Norway and France and China and around the world got the same idea at the same time to build new monster facilities to extract oil. The economy in Alberta is sooo dependent on the revenue from same – like crack cocaine on steroids.

Big problem thought, the existing pipelines are nearing capacity and they need more pipelines fast, like Northern Gateway and Keystone. Transcanada Pipeline and Enbridge are pushing ahead like it is no one’s business and have spent billions preparing for pipelines that they do not have approval for.

And the citizens of the world have decided they do not want this oil with such a high environmental cost spread around the world. People like Robert Redford and Hewlett of Hewlett and Packard and thousands of others have revolted against the pipelines.

Now this – remember Ted Turner, that guy who started and controls CNN? He doesn’t like it either, and he has a few billion to throw around, plus the power of the media.

Alberta, buckle your seat belt baby. You already know what booms and busts are like. This looks like the precursor to a big one.

Here is the CNN piece by Ted that is quite articulate.

(you may have to cut and paste to your browser)

http://www.cnn.com/2012/02/22/opinion/turner-keystone-pipeline/index.html

#67 Critical Mind on 02.23.12 at 12:32 am

Garth, you craft a wonderful contrast to the realtor blogs on this story, providing a strange but sober sense of balance.

A few more facts for those unfamiliar with the area:

-The development borders on the oak ridges moraine, where regional forest and kettle lakes abound, inventory is low, development is political, and demand from certain groups is unquenchable

-Commute is 10 minutes to Richmond Hill South (the tech capital), 25 to North York and 50 to Downtown

-Richmond Hill has the Highest average detached home price in the GTA at $886,000

#68 VicBC on 02.23.12 at 12:37 am

#17
I hate to tell you garth but the old saying is the trend is yor friend why are you fighting the trend looks like there is no way but for real estate to go up stop trying to keep things down when they are going up .. remeber the trend is your friend and its pointing up .. live and learn rookies..!!!

Yes a trend is your friend, but good luck selling hard assets near the top.

Lord Rothschild said, “The time to buy is when there’s blood running in the streets.” He added that the way he got rich was he “always sold too soon.”

John Templeton, the man who almost single-handedly pioneered the field of global investing, said the best bargains can only be found “at the point of maximum pessimism.”

Warren Buffett, the world’s most successful investor, says, “You want to be very fearful when others are greedy and very greedy when others are fearful.”

#69 T.O. Bubble Boy on 02.23.12 at 12:38 am

Even after a couple of hours, this one is still disturbing to me.

I’m shocked that these sheeple are lining up to blow $700k to live in a basic burbs house in places like Richmond Hill/Aurora and Milton.

The *average* GTA house is about $500k. i.e. these houses are 40% above the average… and are only “near something” because Yonge Street is the longest street in the world.

Don’t people live in these GTA burbs because it’s cheaper?

#70 johnny5z on 02.23.12 at 12:44 am

For $700,000 you can buy 4-5 decent homes in the Pheonix area, rent them out, and have them cash-flow before taxes. Phoenix’s “non-RE” economy is just fine. Or buy one house and invest in stocks that pay dividends or REITs – and earn $’s at preferred tax rates.

Beware the Minsky moment – the hangover lasts for years!

#71 Dan T on 02.23.12 at 12:48 am

No more asians …

http://www.youtube.com/watch?v=0YM9Ereg2Zo

#72 Bill Gable on 02.23.12 at 12:51 am

I cannot fathom how people will take less time on a purchase that will make them debt slaves for life, than they do choosing bananas, at Safeway.
Herd animals, indeed.

#73 Carpe Diem on 02.23.12 at 12:51 am

Smoking Man

“Garth when are you going to figure out the herd is dumb, but to go against it’s sentiment is even dumber.

Canada via education has produced the most compliant obedient memorize regurgitate, believe what’s on TV tax and bank slave class ever imaged.”

SM … I am surely with you.

My last week has been a rollercoaster but I think I will settle soon. I had you in my thoughts and sorry for picking on your writing!

My 6 year old kid’s school claims my kid may have ADHD. WFT?

I can sit with him for 10-20 mins on a topic about why people are black and white and about Africa, Europe and Persia.

I then make him run around and chase his bro, his sis and I can catch them all …

And talk about evolution, Africa and skin colour for at least 10 minutes and he’s focused.

He can sit and watch Dolphine Tail’s or read a science books for 10 years old. And then have really smart remarks.

But he thinks his 100 year old teacher sucks and she thinks he can’t pay attention for 1/2 hour.

Duh, boys at 6 have 6 minutes of attention before requiring monkey action – man the education system needs an overhaul ….

Anyhow … it ain’t about my kid’s abilities anymore, it’s about the idiots running Canada I’m starting to be pissed from education to the ecomony.

Arg!

#74 NoName on 02.23.12 at 12:51 am

When in Rome, do like the Romans do.
But maybe that was why Rome collapsed…

Herd mentality is tendency to do what other people do, and why “we” do it.
http://goo.gl/2RhRd

Is the deal on? Study shows why herd mentality best mode for group buying sites
Researchers at the University of Toronto’s Rotman School of Management wanted to understand why group buying sites that have entered the market recently have enjoyed greater success than those operating a decade ago
“We think one of the reasons group-buying has been successful recently is because of the short time horizon,” says Rotman Prof. Ming Hu, who co-wrote the study with Prof. Mengze Shi and PhD student Jiahua Wu. “It allows for a herding effect.”
Knowing this it would suprise me that some of the people in line are paid to be there, if i am builder i would most definetly have few of them on a payroll…

http://goo.gl/m5Meo

#75 new-era on 02.23.12 at 1:10 am

Sure there’s a picture of 99% asian. But What I want to know is how many of them are canadian or landed immigrants.

And How many of those guys are actually from Mainland China with a bag full of cash.

One day when this thing is said and done. I can totally see Canada Real Estate on Myth Busters.
The Legion of HAM. I’m pretty sure its all a Myth conjured up by the banks and real estate agents.

#76 Party on Garth on 02.23.12 at 1:16 am

Garth

I demand you photo shop those photos to include a Ugandan, a Swedish albino, a flamingly gay man in cut off jean shorts , a person in a wheelchair, an aboriginal, a transgender person, and a dwarf.

How dare you present truthfull information. There is no place for that kind of honesty in Canada today. Try to consider the feelings of sensitive new-age guys (snags) like me and anon.

I also notice the majority of the people seemed to be in a certain age group. You ageist bastard. What do you have against people in their twenties?

My lip is trembling, my knees quivering, with sanctimonious outrage.

#77 Bottoms_Up on 02.23.12 at 1:16 am

#73 Carpe Diem on 02.23.12 at 12:51 am
——————————————–
lol, it’s been proven that people in general can only muster 20 minutes of pure attention. We’re talking top notch university students here.

Kinda makes you wonder how well that 4 hour long surgery goes inside you?

#78 Mel on 02.23.12 at 1:18 am

The day I ever find myself to stand in a freezing cold with other financially retarted folks, I am going to ask my husband to take me to the crazy house to get me checked out.

There are no longer any ‘ proper’ words for these people. They are sick!

#79 Poorgoisie on 02.23.12 at 1:24 am

I moved from Ottawa to Toronto for work and yep housing is pretty nuts here. I love to look at the condos on a Monday night around 8pm and seeing more than half the lights out (especially in mimico). Maybe people can’t pay their bills or perhaps they’re just good torontonians conserving power. What’s troubling to me about these pictures is it’s all 20 somethings buying new. I remember that Boom, Bust, Echo book saying RE would be safe because there would be enough echoes and immigrants to take over the boomers homes. I’m 30 and almost all my coworkers are in their late 50s early 60s and they all believe they can sell in the next 5 years and kick their feet up, all my friends close to my age that could bought new with 30+ year deals and both groups agree that I’m stupid for renting. Bottom line is, even if the boomers don’t all sell at the same time (which they will) at some point they will die and the market will be flooded, sadly most of the potential buyers will be underwater in Richmond hill and similar places. I think I’ll sign when the Dow hits below 9, I figure they’ll sell their portfolios first causing a good ol panic round the globe and then politicians and banks can blame a poor world economy on the collapse. I love this blog, way to go Garth.

#80 TurnerNation on 02.23.12 at 1:33 am

First, greetings from “BPOE”! Had a chance to drive by the East Hastings Zombie colony. Blocks upon blocks of other-worldy naifs. I figure, this city is so expensive they’ve just given up all hope.

I shudder to image how many millions in Justice, Social, and Medical resources are there used up each month.

#81 TurnerNation on 02.23.12 at 1:34 am

Shoulda sent in big-a-rider’s boys in to break up that mob!!

#82 Patiently Waiting on 02.23.12 at 1:35 am

Brings back memories of 1989 for me a well . . . in those days we were pre-selling 3 to 4 condos a day in October 89 (mostly to Chinese over in Hong Kong by night, and to locals by day). By March it was like someone turned off the taps – sales slowed to 1 to 2 condos per month, then 1 sale every month or two . . . It took three and a half years to sell out the remaing units in the building . . .

#83 Mr Buyer on 02.23.12 at 1:40 am

#73Carpe Diem on 02.23.12 at 12:51 am…I have to agree with the assertion about boys. The first word thrown out in the politically correct era was balance. No, it is rigid undifferentiated equality but the boys are getting trounced by the girls by most every metric in almost every scholastic setting (the girls are now even out pacing the boys in the sciences). As gentlemen we are to defer to our women but in this process we have abandoned our boys. The saying is women and children first not women are children. There are stark differences between boys and girls but we are asked to deny this and recatagorise these differences as medical or mental conditions. This does not wash well with me. The education system is dominated by women, well meaning as a whole, but increasingly intolerant of boys. Boys are markedly more difficult to manage as a whole and should be managed differently than girls. Now I understand that we are all individuals and all traits are presented in both genders but the fact remains there is an average difference in the characteristics found in students based upon gender that we are now asked to ignore proportedly for the greater good. Just try to think back to school. There are so many ways a teacher can have a negative impact upon a student’s life at school without coming any where near outright and obvious discrimination. There is a general intolerance and unwillingness to understand boys as a a whole and it is showing up in the grades they are recieving. This is where the pedulum reaches its apex of acceptability. We must stand up for our boys, as irritating as they can be from the perspective of classroom management. 15 or 20 minutes work, standing up and run around full bore for 5 to 10 minutes would solve 90% of boy based classroom management problems and their marks would likely go up as things at the beginning and ending of a learning session are remembered best (thus more beginnings and ending would be of great benefit). Maybe boys schools and girls schools are not as draconian as they once seemed. There is no need to go that far because teachers understand differentiated teaching and learning but they are unwilling to aknowledge the need for gender based differentiation.

#84 Critical Mind on 02.23.12 at 1:45 am

Bubble Boy, you’re getting much more land and square footage for the price. While I’m no fan of these small-lot, cookie-cutter, new-con projects, there are some very nice neighbourhoods in this area (i.e. take a drive through ‘Trailwood’ one afternoon and imagine what a comparable property would be downtown).

Depending on what you value, the quality of life is high in terms of nature, recreation and community. The prices are not cheap (see my post above) but you can get land, space and privacy if you want it.

…and I’m referring to RH, Aurora, King, etc… Milton is not in this league.

#85 Monster Cookie on 02.23.12 at 2:03 am

#3 Cookie Monster on 02.22.12 at 10:03 pm

HEY, GET YOUR OWN NAME!

I’m the Cookie Monster here, also know as
Blue Hammer
Blue Monster Lover of Cookies
and
Monster Cookie

Why don’t you take Count Dracula or something.

Garth??? Do something, you can’t allow this…. Name stealing? Come on!!!!

#86 Mr. Lee on 02.23.12 at 2:07 am

my brother who lives in Thornhill Woods asked me to go check out these homes… i told him i wasn’t interested…
GT, i’ve read you since last year… i was about to purchase a new home because i have the money (could easily afford a 800K-900K home)… but i did my research, READ,,, kept reading… and sold my home… am now renting and investing my money… i feel so much better and to be quite frank… i’m disgusted by home ownership… wife gave me a lot of gripe about not owning a home but i’m glad to say she understands why now.

#87 Milk Man on 02.23.12 at 2:09 am

Not that it’s a good deal, but what’s the difference between the same thing happening last year and the same frenzy now ?

#88 Nostradamus Le Mad Vlad on 02.23.12 at 2:10 am

-
“A harbinger. But only if you can drop $600,000 in ten minutes. Remember it. Then you can relieve your need to pee, everybody was crazy anxious when they got in. Little women were bodychecking me to get a red dot stuck on a map square. Unbelievable.”

Yes! There are still greater fools out there! Appreciate the east if it would transfer a few thousand would-be retirees out here to K-Town, to get things motoring again here!
*
#204 The Thing in the Basement on 02.22.12 at 11:04 pm — Noted, and agree slightly to disagree. The problems still exist (the bailout won’t work, just a stopgap), and sooner or later something will give.

Thx. for the feedback!
*
4:07 clip War and inflation, Gas US$6 / gal. in Florida (link in) and US$10.45 / gal. in UK; Further evidence of the east getting more of the west’s work; The Death of MERS; Walmart and Monsanto Links in. Walmart in US to start selling their trash with no labeling; Glass – Steagall Apparently it’s still alive. Links in; Derivatives Implosion “The DERIVATIVE implosion will make it happen over night.”; Hungary’s Frozen Funds Isn’t that where Soros comes from; Diversified How safe is your cash?

Citigroup Whistleblower; Backfiring Liquidity; Hugh Hendry; Buffett to write a cheque; Texas The poster Ben was in Texas, as far as I can remember; Consequences War on the US economy; Mfg. collapse; German problems; Renters Rule! Shilling; Taxing the Rich?
Population Shrinkage A bunch of countries, incl. chart.
*
Satellite pix Normally, storms don’t attract much attention. This one is 90 miles wide and underwater; Breaking Wind In Space NASA had nothing else to do, so they found this; Russia warns west against striking Iran; Iran First para. is good, but the article is interesting; US – NATO – UN killing Syrians continues; Obloodyhell Rising gas prices could cost him another term; 1:31 clip Taken from a cockpit of jets performing stunts; Impressing the ladies If this is a prerequisite, I’m going solo! Facebook is picky. Fortunately, I don’t FB or Tw; CFR and police state; The Future is Now The ‘net in 1969 (1:57 clip); 22-inch Man shortest in world? 0:51 clip From Russia With Love. A strangely sexual ad.

#89 Rachel - condo on 02.23.12 at 2:17 am

I bought an expensive condo 1brd+den under 800sqf, at 680$ per sqf (north toronto) will be ready in 2014-2015 and i am really afraid prices will drop and i will have arguments with my spouse which did not agree on buying it. my goal was to speculate it, sell for 10-15% more when ready or rent it, but it looks i’ll be cash negative even the builder locked in at 3.94 for 3 years once we get the title. will have to work 2 jobs, or occupy it (after divorce :))

SOS! Don’t do like me. Wake up fellow drunken sailors

#90 stage1dave on 02.23.12 at 2:40 am

This house-hornyness & credit binging in general got me thinking about something that was bothering me back in the 80′s…

Why is spending OTHER PEOPLE’S money (cash you don’t have) such a status symbol; compared to spending YOUR OWN money (cash you do have) which is apparently a social stigma?! The power of the herd indeed. We’ve turned into a population of loan junkies…adjudicating our societal worth by our respective credit limits.

Aside form the obvious benefits to the moneylenders (in the form of having an indebted & compliant working population, because they’re terrified of missing a payment) it’s also one hell of a cultural conditioning exercise. Anyone NOT in debt up to there eyeballs is some kind of weirdo…

Why do people want to hand over all this power over their own lives to these institutions & the life-forms within?

Never thought I’d be living in a world where my net worth as an individual was judged on the basis of how much I could borrow!

Good thing I don’t need to. But it totally sux that the taxpayers are on the hook for most of this housing gluttony. Even the financially responsible, non-involved ones.

Who might see their income prospects & lifestyles in general negatively impacted by an imploding government-sponsored, financial services-industry conducted housing-ponzi scheme project whose looming failure will be underwritten by the general population. Many of whom might be some of my present (or future) customers. Or probably, non-customers…

And that really pisses me off…

#91 not 1st on 02.23.12 at 3:16 am

Garth, if you can stand the mosquitos, you need to cruise through sask this summer on your bike and see whats going on here. It seems to be more than just cheap money – the place is making up for 30 years of no economic activity all at once.

In Regina, at least 2 Potash mines are a go, the global transportation hub is just getting rolling, a pasta plant is planned, a 32 story condo tower downtown, rail relocation and likely that new stadium to be started very soon.

#92 Gandalf on 02.23.12 at 3:24 am

I’ve lived in Vancouver my whole life, and lived in the downtown area for the past 3 years. I sold my house I built in 2001 for a pretty good profit and now rent.

One day I’ll build another home if I can find the right piece of land at the right price. I’m patient so no hurry.

I’ve been a money manager for almost 25 years now so I think I know a little about how markets work, whether it’s stocks, bonds, commodities, art, real estate, doesn’t really matter, they’re all the same. Driven by fear, greed and emotion!

Right now the cycle is cresting which is why there is so much disagreement in opinion between buyers, sellers, renters and owners. That’s what makes a market!

You can analyze the fundamentals to death as to why housing should go p or down but at the end of the day it’s all about supply and demand.

Funny thing is, I’ve been watching the storefronts in downtown Vancouver for the past three years and it’s interesting to see how long some units have had “For Lease” signs in the window? Some spaces are going on 3 years now but in the past few weeks I’ve notice more and more For Lease signs? Tonight I was driving into the city along Granville and was amazed at the number of for sale signs on residential properties then driving through downtown a large amount of For Lease signs on commercial properties! More so than usual that it caught my attention. It’s just an anecdotal observation but it appears to me that the number of businesses shutting down and the increase in vacant space does not bode well for jobs in the city and feels more like the canary in the coal mine?

I work on the North Shore and notice the same increase of For Lease signs? I don’t really care if the market goes up or down since I have all my funds invested in the financial markets so I’m just an observer but my gut is telling me something is up? or heading down?

My advice is don’t try and be a hero and try to catch the last 5% of a rising trend, especially with leverage or you’ll get your ass handed to you in a hurry!

The people in those pictures are like chickens running around with their heads cut off just about to die!

#93 OneMoreThing on 02.23.12 at 3:30 am

wow like cattle to the slaughterhouse!

Great view on US Housing!

What the dramatic declines in housing inventories could be signaling now!

http://www.ritholtz.com/blog/2012/02/75911/

This is why I see another 15-18% decline in the USA.

#94 tkid on 02.23.12 at 3:47 am

http://research.stlouisfed.org/fred2/series/AMBSL

#95 Sky on 02.23.12 at 3:51 am

# 73- Carpe Diem :”But he thinks his 100 year old teacher sucks and she thinks he can’t pay attention for 1/2 hour. ”
*************************************

A half hour for a 6 year old is endless. Time is relative. 1 day in the life of a 2 day old baby represents 50% of the
infant’s lifetime. Subjectively, this 1 day will feel the same as a 20 year timespan to someone who is 40 years old.

Remember the never-ending summers of your youth? Old Man Time gobbled them up.

@ Smoking Man : Now that you’re on the wagon does that mean I have to hit the bottle? Balance of nature and all that. Ever notice how if someone in your family or immediate social group loses weight… someone else in the same circle gains it?

In vino veritas doesn’t just mean that drinkers lose their inhibition and start blabbing what they REALLY think. Alcohol opens the 3rd eye. I suspect you miss that connection a lot when sober. There are other, better, and sober ways to get there. But it means some work in that direction. Good luck.

#96 Uh Oh Canada on 02.23.12 at 6:58 am

The ones wearing the jogging pants are the fake buyers.

#97 Steven Rowlandson on 02.23.12 at 7:26 am

#1 Anna Adamson on 02.22.12 at 10:00 pm
Nuts. Absolutely nuts.

I absolutely concurr with Anna.
All those home buyers will rue the day they lined up to sign their lives away. Never have so many paid so much for so little and went into extreme debt to do it.

#98 truth hammer on 02.23.12 at 7:26 am

OK..fair comment on the RRSP/Dividend debacle. What are the options for growth inside the RRSP and…………if a person was to sell dividend equities and switch to bonds before the RRSP draw down would that be a valid strategy to mitigate tax on withdrawals? I ask because the compound effect on bonds brings zero net yield in real terms

#99 blase on 02.23.12 at 7:36 am

$584,000 in Regina:
http://www.realtor.ca/propertyDetails.aspx?propertyId=11589801&PidKey=936786784

$309,000 in London, Ont:
http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=11549873&PidKey=-1243179305

Twice the price, plus interest on the Regina place is another $300,000 over the life of the mortgage. So, you can have 3 London houses for the price of 1 house in Regina if you pay cash for the London place. Boy, life must be preeettty good in Regina. Pretty, Pretty good.

#100 mark on 02.23.12 at 7:40 am

Garth,

it’s been quite a few posts since you wrote about your preferred type of ETFs (reit, preferred, corp bond, ext)

Are still on the same page of income from private equity (div, preferred, corp bonds)? Or have you been considering common equities and commodities?

thanks

#101 Bigrider on 02.23.12 at 7:43 am

#12 Tim- If you are going to live in any suburb of T.O you will want to live in Thornhill or Richmond hill for sure. Right up the natural centre of the GTA.

Anyway Garth, thanks for mentioning this mania that occurred in North Richmond Hill (really King City). My wife got caught in the drive back along Yonge St along the blockage of people along side the road and that is why I told you about it.

#102 Have we forgotten so quickly? on 02.23.12 at 8:00 am

http://www.youtube.com/watch?v=ezUPSuZhVP8&feature=related

#103 maxx on 02.23.12 at 8:03 am

#17 alex on 02.22.12 at 10:17 pm

The trend WAS your friend.

#104 neo on 02.23.12 at 8:08 am

It’s been 1989 since 2006. Markets remain irrational longer than you can remain solvent comes to mind.

#105 Bigrider on 02.23.12 at 8:08 am

#69 T.O Bubble Boy.

I have always respected your posts so please no offense to you but you really have to get out of the downtown core once in a while. People don’t buy in burbs just because it is cheaper.

Richmond Hill enjoys the highest average detached house prices in the GTA. Look it up. We have just surpassed Thornhill just south of us with that distinction. You do get more house here than in T.O proper. The 3300 sq foot home next to me just sold for 1.3 mill.

It is not to far of a commute, up the natural centre of the city and will naturally, at some point, be serviced by a subway. We have public transit along Yonge St of which I can walk to.

Now the area featured in today’s post , well it’s a stretch to call it Richmond Hill as it is just south of King City. The commute from there to Yonge and hwy 7 on a good day is 15 minutes. Anything near Yonge, Hwy7 and 407 cross is very dear in resale value and as dear as most anything in the city.

#106 Thomas on 02.23.12 at 8:11 am

The line up will be just as long at the food bank in a few years when rates go up!

#107 Bigrider on 02.23.12 at 8:19 am

#84 Mr Lee- “Thornhill Woods”

The builders I know really pulled the wool over the eyes of all the buyers in “Thornhill Woods’. A concrete and treeless jungle that is Vaughan proper and more specifically Concord.

By calling it Thornhill Woods, they got away with charging 150k on average more than had it been properly delineated by name/ location.

People swallowed that one hook ,line and sinker. I still remember the laughs and ongoing jokes about that at the builder functions.

#108 I am from Malaysia on 02.23.12 at 8:32 am

People, check this out. Is it really this bad? http://thestar.com.my/news/story.asp?file=/2012/2/23/nation/10788631&sec=nation

#109 Gypsy Kid on 02.23.12 at 8:34 am

“These people” who are lining up to buy homes in Richmond Hill are asians, probably mostly Chinese as the pictures illustrate.
Think, Chinatown is along Hwy 7. They have everything they need in RH. They dont care about the “downtown” TO amenities. They are in their own downtown.

Stereotype much? — Garth

#110 MarcFromOttawa on 02.23.12 at 8:45 am

A bit of bull (s***?) to balance the bear.

http://www.forexpros.com/analysis/are-fears-of-imminent-drop-in-canadian-housing-prices-overblown%20-114532

#111 fancy_pants on 02.23.12 at 8:45 am

#10 Ayn Rand on 02.22.12 at 10:08 pm
when is your next book coming out….I am anxious to buy it

crazy anxious?
If you can stand in the cold all night and don’t need to pee, he’s got a deal for you!

#112 fancy_pants on 02.23.12 at 8:59 am

Anyone spending $700K in a few minutes needs help. — Garth

Especially when the asset is not deliverable for a couple years and it is at the height of it’s value now. NUTS!
There are cheaper alternatives for an adrenaline rush.

RE is the next Bre-X. Eventually prices reflect value.

#113 Incubus on 02.23.12 at 9:13 am

Herd mentality

“The efficient markets theory does explain the behavior of asset prices in a typical market, but when price change begins to feedback on itself, behavioral finance is the only theory that explains this phenomenon. There is often a precipitating factor causing the break with the normal pattern and releasing the tether from fundamental valuations. During the Great Housing Bubble, the primary precipitating factor was the lowering of interest rates. The precipitating factor simply acts as a catalyst to get prices moving. Once a directional bias is in place, then price-to-price feedback can take over. The perception of fundamental valuation is based solely on the expectation of future price increases, and the asset is always perceived to be undervalued. There are often brave and foolhardy attempts to justify these valuations and provide a rationalization for irrational behavior. Many witnessing the event assume the “smart money” must know something, and there is a widespread belief prices could not rise so much without a good reason. Herd mentality takes over.”

#114 Jamaican_Gal on 02.23.12 at 9:15 am

” I think I may have an ear infection. I remember yesterday’s blog had some remedies listed.

Stop that. — Garth”

Better nip that vein of chatter in the bud, Garth. Next thing you know this blog will be overrun with bush healers, and people offering advice on how to get rid of fungal toe infections and such!

See what happened with the Firsters….;-)

#115 Foggy on 02.23.12 at 9:24 am

How many of these “buyers” will actually live in these homes? And yes, a certain demographic group dominates this particular lineup. And also in new condominium releases. And the statistic on buyer speculation on those is approx 80%? Very sad…

#116 jess on 02.23.12 at 9:26 am

Foreclosures on jumbo loans are up 579 percent since 2008, greater than any other form of loan, according to a report last month by Lender Processing Services, Inc.
Beverly Hills Strategic defaults
http://ochousingnews.com/news/high-end-loan-owners-strategically-defaulting-in-large-numbers

http://www.ktnv.com/news/local/139765553.html
10% drop y/y for six years, 2/3 underwater

Chicago hosting the G8 and NATO summits May 19-20 and May 20-21
riot gear stocks
Wednesday, February 22, 2012
Chicago city officials have agreed to a $6.2 million settlement with the more than 800 protesters who were wrongfully arrested or detained in 2003 while demonstrating against the U.S. invasion of Iraq. Wrongful to arrest or detain them without first giving them a chance to disperse and leave the area. The learned lessons purchasing leather nose guards with mpact absorbing foam for the horses , face shields for 3,000 and aerial surveillance tech.

#117 Sp on 02.23.12 at 9:30 am

#79

“What’s troubling to me about these pictures is it’s all 20 somethings buying new.”

These are 35-45 year old people. It is not a bubble if you don’t buy with debt.

#118 Jamaican_Gal on 02.23.12 at 9:36 am

#8 anon

Garth, my man, I will send you a pic of me and you can Photo shop it inwith today’s picture. That will put an end to that silly kind of talk.

SM, I love the rebel in you. I hope you find the proper balance that will keep you in concert with the universe.

#119 };-) aka DA on 02.23.12 at 9:41 am

#35Victor on 02.22.12 at 11:03 pm
#29 };-) aka DA on 02.22.12 at 10:47 pm

It is what it is. To say it isn’t, forecast what it will be or pontificate what it should be is demonstrative of angst and worry. It is what it is – deal with it.

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

The last item on this list might be of interest to you.

http://tinyurl.com/76lq4j9

I guess I was not clear in my unintentional use of “Business Jargon”. Let me paraphrase by quoting as the wise Smoking Man said at post #43 on 02.22.12 at 11:23 pm

“…when are you going to figure out the herd is dumb, but to go against its sentiment is even dumber.”

You cannot think two thoughts at precisely the same time. You can quickly alternate between the two thoughts but you cannot think both at the same time. Similarly you cannot be in a healthy state of mind and an unhealthy one, you cannot be optimistic and pessimistic, you cannot fight the herd and profit from it.

If you want to eat you must hunt. The game will not come to you. If you wait for it to do so you will starve.

#120 CrowdedElevatorfartz on 02.23.12 at 10:12 am

In Vancouver I see “For Lease” sign everywhere. Perhaps the people in the photos have pulled up and moved to Toronto because the prices here are so ludacris ?

#121 peter on 02.23.12 at 10:13 am

well, this just make me feel like buying a house before I get prie out! Definetely no a buble burst in canada. No way.

#122 disciple on 02.23.12 at 10:13 am

#73 Carpe Diem… it has been vaccinations that have caused so many problems for our kids. Don’t continue to be frustrated, and instead, get educated. Start here:

http://www.vaccinationcouncil.org/2012/02/21/obstetrician-dr-nancy-banks-on-infant-sacrifice-a-k-a-vaccination/

http://www.vaccinationcouncil.org/2012/02/18/the-deadly-impossibility-of-herd-immunity-through-vaccination-by-dr-russell-blaylock/

There is a war for your mind and against our glorious future. We must always fight the urge to conform (culture). That is their greatest weapon. Escape it.

#123 Keith in Calgary on 02.23.12 at 10:17 am

“Those who fail to learn from history are doomed to repeat it”

#124 };-) aka DA on 02.23.12 at 10:21 am

You need not kill to eat. You can help others who are not so adept at the pursuit and acquisition of their own game that they will gladly share with you a commission as reward for your having done so.

#125 Sky on 02.23.12 at 10:26 am

Jamaican_Gal- Bush healers ? Get real. Millions of people have no choice but to turn to holistic (alternative) medicine when allopathic ( conventional) medicine fails them.

Tell me how well allopathic medicine does with the long,long laundry list of autoimmune disorders like Hep C, Lupus, MS, Rheumatoid Arthritis etc. And what about the masses who suffer from various bowel and GI complaints? Most are simply clumped together and told they have IBS. Doesn’t everyone know someone these days who suffers from irritable bowel syndrome ?

I’m a huge fan of INTEGRATIVE medicine. It combines the best of both worlds. And, yes, I’m one of the ones who was struck down over 20 yrs ago with a virus that triggered an ugly autoimmune response. Allopathic medicine did NOTHING for me.

Won’t get into the symptoms other than to say I basically spent 5 yrs on the couch. During that time ( pre-internet) I read everything I could get my hands on in an attempt to find a cure. My kitchen counter looked like a health food store.

Nothing worked. Until…one day… one of the clerks in the health food store suggested I try ****. You’ll never in your wildest dreams guess the name of that herb. No, it’s not some exotic Chinese or Ayurvedic medicinal herb. And it worked. Took it for one month and never looked back.

Funny thing is, I hadn’t thought about that herb for many years and decided to do some research on the net. And what do you know? Big Pharma is busy isolating the compounds for use in autoimmune disorders and it also shows promise in reversing type 2 diabetes in mice.

So don’t knock the ” bush healers” until you yourself have been put into a position where allopathic fails you utterly.

BTW – With the incremental introduction of Agenda 21′s Codex Alimentarius, it’s becoming increasingly difficult to access even common herbs. Try finding Calamus root.

The herb that healed me is a common enough and safe root which is also becoming hard to get. Only 1 health food store in Kelowna still carries it. I’m stockpiling while I can. In case disaster strikes again.

#126 Stevenson on 02.23.12 at 10:31 am

No need to prove my point that some chinese are more well off then you think. They have the money to purchase outright but with rates this low and 10-15% down. Well worth the gamble. Vancouver is getting too expensive and the floodgates will be flowing to Toronto now. I believe Richmond hill is a completely different city and they only need to pay a single land transfer tax. Whereas Toronto needs to pay two.

#127 Herb on 02.23.12 at 10:32 am

Economics isn’t dismal, it’s grand. To-day, on the same page of The Ottawa Citizen, there are two interesting articles. The first, by leftist pariah Jim Stanford, implies that free trade has not worked and does not work for Canada:

http://www.ottawacitizen.com/opinion/free+market+hasn+delivered/6192543/story.html

Obviously the “right” response will be that Canadian workers are lazy louts who must be flogged – or at least starved – until their productivity improves.

The second, by conservative paragon Andrew Coyne, points out that government deficit spending does not stimulate the economy:

http://www.ottawacitizen.com/business/Faith+power+government+spending+persists/6195030/story.html

So where does the money go, Guido?

#128 The American on 02.23.12 at 10:38 am

Ahhhhh yes. These photos Garth provided remind me so much of my experience buying my first condo in Seattle on presale back in 2003. I was just a dumb kid at that time, having moved here from the Big D (that’s Dallas, TX for anyone unfamiliar with the vernacular). Here I was at 26 years old and moving to a new metro that was only 3.4MM people, nearly half the size of the Dallas metro at 6.4MM. I didn’t know what to expect, other than I had heard living expenses were “more.” Boy was I ever in for a shock.

That same year, condo towers were popping up all over downtown, and lines that wrapped TWICE around a block were not uncommon. I figured I needed to be in on the action too as I was often told “renting is throwing money down the drain.” What did I know? Hell, I was 26 years old, right? I showed up at a presales event and waited patiently for them to open the doors. I ended up buying an 887 square foot condo (1 bedroom, 1.5 bathroom) on the 9th floor in a downtown neighborhood for $335,000. I thought even then this was an insane thing to do, but prices only go up in real estate, right? Well, the next four years the prices did in fact continue upward at an alarming rate. Because this was a presale, the tower had not yet been built. It was scheduled for completion in May of 2005, and they did complete it right on target. I moved in in utter disbelief that I just bought a tiny condo in Seattle for the same price of a palatial pad with a swimming pool in Dallas, TX would have cost me.

I happily lived in that small condo from May of 2005 as I watched the value on it soar into oblivion. In 2007, I began to get nervous as even the values then seemed impossible. My condo I bought on presale in 2003 for $335,000, closed on it in 2005, and was was now living in had swelled to an estimated market value of $630,000. So, I decided it was time to GTFO (get the f*ck out) of the market and sell. I listed the condo in May of 2007, two years almost to the day after I had moved into it. Listed it for $670,000. Two months later, I accepted an offer on it for $655,000 and sold it. That’s a 95.5% appreciation in only a couple of years. Insanity indeed. Thankfully, I was spared having to pay any kind of capital gains tax on the proceeds I had “earned.” I did, however, end up spending about 10% to close the deal (6% to agency/realturd fees, 2% city excise tax, 2% toward closing costs and misc items). That was a cool $254,500 in my pocket to gladly walk away from what I knew in my heart of hearts was now a falling asset value. Not too bad for some 30 year old punk like myself at the time.

Needless to say, I KNEW I had done the right thing. My father had given me the advice to get out of the market as he had lived through three booms and busts in his lifetime, and he recognized this for what it was. I reluctantly took his advice and listened to my elder. Little did I know just how right he was. Apparently I had sold just 2 days after the official “peak of market” statistics indicate.

The woman who bought it was some global manager at Microsoft, and now we’re actually good friends. Unfortunately for her, the real market value of her condo today shows to be worth $405,000, just 4 1/2 years later. You see, the condo started losing value practically the day I sod it to her. It has been a hard-hitting market against values since then for 4 1/2 years. These aren’t easy matters that flush themselves out in a matter of months or even a year or two. It takes years to resolve markets that were this out of touch, when frenzies were out of control and people acted like lemmings. Unfortunately for her, she’s lost 38% of the value of her home… so far in such a short amount of time. Who knows where it will end, although there is evidence in the last several quarters that prices have flatlined here. So, it appears that prices actually DO eventually return to the mean. Looking back on the trending line, from 2005 to 2012, the condo is worth about $70,000 more today than what I had closed on it for in 2005, or about 20% higher in value. Seems a bit high still, but I had also purchased it prior to the height of the frenzy.

Looking at this photo, it certainly takes me back 9 years ago to a time when the world was my oyster and nothing could harm me. I’ve matured in those 9 years since having moved to Seattle, and today I realize just how fragile everything is around me, including the delicacy of an economy so hinged on housing lust. People, do the right thing while you can. Even if you’d be under water, you NEED to sell ASAP and get out of the market. Your loss will only continue to compound as the housing-based economy and passtime begins to unwind.

#129 T.O. Bubble Boy on 02.23.12 at 10:39 am

@#105 Bigrider

I have always respected your posts so please no offense to you but you really have to get out of the downtown core once in a while. People don’t buy in burbs just because it is cheaper.

Richmond Hill enjoys the highest average detached house prices in the GTA. Look it up. We have just surpassed Thornhill just south of us with that distinction. You do get more house here than in T.O proper. The 3300 sq foot home next to me just sold for 1.3 mill.

It is not to far of a commute, up the natural centre of the city and will naturally, at some point, be serviced by a subway. We have public transit along Yonge St of which I can walk to.

While I agree that the Yonge/HWY 7 area is still in high demand, and population growth in the GTA shows that the burbs are where people choose to live, your point on Richmond Hill having the highest detached house prices re-confirms my thoughts on this.

Here’s my point: even if pockets of Richmond Hill, Thornhill, Aurora, etc. are “the new Oakville” (i.e. where the richer families of the GTA live), this new development with the silly lineups is essentially a commodity — North Toronto has built tens of thousands of similar houses in the exact same area over the past 10-20 years… and there is NO reason that these should be priced 40% higher than the average GTA house.

From what I’ve noticed, there are 2 types of developments in the GTA that get lineups:
1) Condo developments downtown
2) Cheaper house developments in places like Milton and even Brampton.

If we’re seeing these lineups to pay $700k for what appears to be a pretty standard development project in North Toronto, this tells me that the insanity has spread to the entire GTA, and we’re pretty much at the climax of this cheap debt ponzi scheme.

With “normal” mortgage rates of say 6-7% instead of sub-3%, what would the price of these places be? Do all of these buyers have incomes that can support a $600k+ mortgage?

#130 househornyhousewife on 02.23.12 at 10:44 am

Garth,

So what are you telling us here ? That a large majority of people are idiots who will blindly follow the latest trend ? Well duh ! They’re over eighteen so who cares ?

As long as my tax dollars don’t have to be used to save their sorry asses in the future .. that’s my one and only concern. Otherwise, they can spend millions to purchase an igloo in the spring for all I care.

Personally I think this is pathetic and irresponsible people like that deserve what’s coming. No sympathy from my end .. nothing but sheer apathy.

HHHW

#131 Daisy Mae on 02.23.12 at 10:56 am

#40 SHANKS: “……its a lot like Richmond BC from what I hear. It is also known as China Town North, and with reason. There are commercial areas there where you will not find a sign in English (or French for that matter), and might even be hard pressed to find someone who can or will speak English :)”

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

I avoid Richmond, BC — actually feel unwelcome.

#132 lawboy on 02.23.12 at 11:02 am

Flyer in my mailbox today from a local realturd, announcing the sale of 300 Gladstone in West end TO. It’s a plain semi, kind of ugly from the outside actually, seemed to be seeping a little bit into the ground, across the street from the Cadbury chocolate factory parking lot, and a stone’s throw from Dufferin Mall. You get the picture. List $669,000 Sale EIGHT FIFTY FIVE. *shakes head*

#133 truth hammer on 02.23.12 at 11:05 am

BC government sets zero down as policy…….so what risk does the buyer take with no skin in the game? This is all taxpayer money set alight .

http://www.vancouversun.com/business/First+time+buyer+bonus+will+make+bigger+difference+suburbs/6194441/story.html

What next?

#134 GuyInBurnaby on 02.23.12 at 11:16 am

I hope BC condo buyers will maintain the same level of passion after the new strata changes:
http://www.westerninvestor.com/index.php/news/bc/725-strata-changes-could-shock-some-owners

#135 disciple on 02.23.12 at 11:16 am

DELETED

#136 Gypsy Kid on 02.23.12 at 11:19 am

Garth, what I was trying to say in my previous post was that people keep saying RH is middle of nowhere. I’m saying that for the Chinese community, it is somewhere…it’s near Chinatown. That’s where they want to be. Not every one wants to live at Yonge/Lawrence.
To many Asians, living in RH is what they strive for…are they paying too much? EVERYONE is paying too much nowadays whether they are buying here or there…

#137 Q on 02.23.12 at 11:23 am

I too remember 1989 well and the ensuing carnage that followed, although it would seem almost everyone else has forgotten. This time methinks the carnage will be even worse.

#138 Preciousss on 02.23.12 at 11:26 am

I live by the following mantra and it has served me very well:

“Mohammed does not go to the mountain. The mountain comes to Mohammed”.

#139 Buddy on 02.23.12 at 11:34 am

Dude you have such a tenuous grip on reality it is a border line mental health issue. You accept and publish views consistent with your doom scenario but omit that which you deem not in line with your little book world. Have you massively shorted some home builders stock? Typical Canknucklehead, 2-faced BS. Grow a pair loser.

#140 NoName on 02.23.12 at 11:42 am

In USA rich are waking away from million dollars houses
http://goo.gl/jdedG
while home prices at at lowest point in more than 10 years
http://goo.gl/Wv1ku
while in Canada Barry Fenton, President & CEO of Lanterra Developments, tells BNN macro-level analysts are wrong about a housing and condo bubble in Toronto…
http://goo.gl/HLCkF
while BOC The is warning saying Canadians could “experience a significant shock if house prices were to reverse”.
http://goo.gl/7xu8x

#141 Martin on 02.23.12 at 11:45 am

#15 truth hammer
“whats the point of an RRSP in the first place as in reality a net net savings account producing the same returns woul garner the same returns?”

Not exactly. In a non-registered account you have to pay taxes on your returns (interest or dividends) each year. In an RRSP you can reinvest 100% of your returns and compound the interest. After a few years this will make a difference.

As Garth said, you should keep Canadian dividend-producing assets out of your RRSP if you have a large enough portfolio. Non-Canadian dividends don’t get the same tax credit, so they have a place in an RRSP.

#142 Mike on 02.23.12 at 11:48 am

I wonder how many of those ppl are legit buyers or if they are being paid to be there. I’ve heard many stories in Calgary of people being paid at ‘events’ like this to try and create some false hype.

#66 terces – You’re high off your ass if you think anything is going to happen to the Oil Sands. 2 words.. China & India. Ted Turner, Robert Redford and HP can cry all they want over them, but the fact is, there are about 6.9Billion people on this earth that are salivating over this oil and any oil they can get their hands on to fuel their lives. Back in 2009 when the Global economy tanked and Oil dropped to $30 / barrell, do you know what happened in Fort McMurray? Things slowed down to a nearly manageable pace where you could actually think a little bit, and since then it’s steadily increased more and more, and will continue to. It doesn’t matter if the new pipelines are built yet… They WILL be built. Why? B/c the oilsands are fueling Canada and the world. Fort McMurray is about the only place in Canada with sky-high house prices that are nearly justified. Why? Simple supply and demand. There are no houses or land to supply the worlds largest construction project.

#143 Otto Doppelganger on 02.23.12 at 11:50 am

The subprime fiasco continues:
http://bit.ly/zwxot0

#144 Jimmy on 02.23.12 at 12:03 pm

DELETED

#145 Condo Sucker on 02.23.12 at 12:23 pm

So I open up my mailbox today and what do I see? This week’s Maclean’s with a cover story of the “Real Estate Crisis” with a caricature of a suburban house burning in flames.

Garth’s message is now officially mainstream. Very mainstream. One poster said it best about how as quickly as the herd follows a trend upwards as quickly they will follow it down too.

#146 HHR on 02.23.12 at 12:24 pm

How many Asians does it take to buy the whole Canada? There are 2.5 billion or so of them in total. I looks like as long as the Gov allows them to invest here the bubble will keep getting bigger. Jobs went to Asia, they made are making the money and now buying us out until we become so poor that we would have to look for another continent. Ahhh the new era slaves, the times have changed and so have the types of slaves. Us!

Did you just crawl out of 1934? – Garth

#147 Mel Rossmo on 02.23.12 at 12:26 pm

Vancouver and Toronto RE = bRE-x

#148 Van guy on 02.23.12 at 12:38 pm

#89 Rachel – condo on 02.23.12 at 2:17 am
__________________________________

Garth hates people like you. Speckers and flippers like you drive the market out of reach for lower income families. You just took on huge risk. If I were you, I would try to sell it now as an assignment sale. Some developers have it in the contract where you cannot sell it before completion. You might find a greater fool now as the spring rush is just around the corner. In Van there will be no rush, you still might have time to dig yourself out.

Good luck

#149 GTA Girl on 02.23.12 at 12:42 pm

Bigrider; don’t forget Vellore Woods in Woodbridge. Originally it was supposed to mimic Kleinburg village… Instead it became monster homes (some with roman pillars!) on tiny lots with backyards so tiny you could reach over the back fence from your patio.

One fenced off area full of protected forest….heritage lot. Sprawl, a packed strip mall. Streets with no sidewalks, and crowded driveways.

And you can hear people screaming on the Wonderland roller coaster across the 400. A mess, and future ghetto all for start price of $600k.

#150 JIM on 02.23.12 at 12:43 pm

DELETED

#151 Kilby on 02.23.12 at 12:50 pm

I was speaking to an owner of a condo in our Vancouver complex (we lease) about how slow the units in his tower were selling, about 30% in over a year, occupancy is about 20%.

They bought pre-construction in 2006 for $540,000, the asking prices have been dropped to $489,000 and are still not selling.

#152 45north on 02.23.12 at 1:05 pm

herd mentality: you know when an electron moves from one orbit to another it does so instantaneously with no intermediate state. The housing market is like that: the market is moving up, the market is moving down, there is no intermediate state. Well except that the housing market in Vancouver is moving down but in Toronto it’s moving up. This situation won’t last.

#153 AG Sage on 02.23.12 at 1:06 pm

>#108 I am from Malaysia on 02.23.12 at 8:32 am

“According to the sale and purchase agreement, the company would buy back the land from us with a return of 60%, 80% or 100% within two to five years,” Chin told a press conference at the Selangor MCA Public Service and Complaints Department yesterday.

That really sounds like it was a scam from the very beginning. How can anyone promise returns like that and be legit?

#154 Snowboid on 02.23.12 at 1:07 pm

Speaking of frenzies, BC real estate is about to take off with the $10K tax credit for first time new home buyers.

Of course, seniors like us are ecstatic that we can get a $1K tax credit towards renos – I think we may just get back into the market.

But wait, what’s this – increased fees and rate hikes for everything? Selling off what’s left of the provincial assets (ie. taxpayer owned), stealing $ 2.1 billion from ICBC and Hydro at the same time rates are increasing to cover ‘shortfalls’?

Wow, guess it’s another 2 years of renting, or longer!

I’d rather stick with the Professors’ teachings than risk everything for a piece of RE in BC.

#155 Q on 02.23.12 at 1:17 pm

Oh…and Garth, stop ragging about the coming collapse in Vancouver. After all they have a large industrial base….no, sorry that’s Ontario and Quebec, they have none..but they have an enormous agricultural industry….oops, sorry again, that’s the prairies…..well, they are the financial heartland of Canada….again, sorry that would be Ontario…..there’s the fisheries and forestry…oops, forgot they destroyed those….oh well, they DO have rain, some tourism, lots of debt, granola, birkenstocks and lots of realtors and homeless…….so real estate can only increase in value there….

#156 Form Man on 02.23.12 at 1:18 pm

#119 DA

Actually, since early times, smart hunters have let game come to them.
Staking out watering holes and salt licks allowed one to rest and enjoy the day, while achieving a high success rate.
Less smart hunters would tire out from all the fruitless ‘hunting’ and often starve.

#157 Uncle Scrooge on 02.23.12 at 1:21 pm

Here is an article on CNBC about NYC. Their ghost inventory is about to put the scare into property owners.

New York Housing Market Could Still Collapse: Analyst

http://www.cnbc.com/id/46310822

#158 Big Al New on 02.23.12 at 1:22 pm

Where have I seen this before….”People were purchasing bulbs at higher and higher prices, intending to re-sell them for a profit. However, such a scheme could not last unless someone was ultimately willing to pay such high prices and take possession of the bulbs. In February 1637, tulip traders could no longer find new buyers willing to pay increasingly inflated prices for their bulbs. As this realization set in, the demand for tulips collapsed, and prices plummeted—the speculative bubble burst.” History like Karma is a Bitch.

#159 reasonfirst on 02.23.12 at 1:41 pm

#119 };-) aka DA on 02.23.12 at 9:41 am
Smoking Man said at post #43 on 02.22.12 at 11:23 pm

“…when are you going to figure out the herd is dumb, but to go against its sentiment is even dumber.”

I am a firm believer in negatives of the herd-mentality but I read this and I thought it must have some value as herds have successfully been around for eons.

I was channel surfing the other night and ended up watching a cheesy re-enactment of the Buffalo Jump (http://en.wikipedia.org/wiki/Buffalo_jump) and a light bulb went on. The herd under natural circumstances (e.g. wildebeasts on the serengeti) survive as a whole but herds that are “herded”…well, look-out below.

#160 Mixed Bag on 02.23.12 at 1:42 pm

“where a giant supply of useless farmland is being dug up to house families who worry about food costs”

Garth, with regularity I am impressed by your writing. This one line is not only written well, but makes me think on it. And think even more. There’s the irony of the statement. There’s using the word “useless” to describe “farmland” that is so sad, leading one to wonder how and why that came to be.

#161 hhr on 02.23.12 at 2:12 pm

Forget about farm land. Scientists now are making artificially grown meat in labs. Now that is something to worry about.

#162 };-) aka DA on 02.23.12 at 2:20 pm

#156Form Man on 02.23.12 at 1:18 pm

I never said, nor meant to imply that you need not have talent to be a successful hunter. That is precisely how I earn a living; using my talents as a successful hunter to help those who are not so capable themselves in that arena where I forage.

Your suggestion that “smart hunters have let game come to them” is really quite descriptive of but one component of my well thought out plan designed to achieve the result my principle is after.

So you see, again we agree.

#163 MikeB on 02.23.12 at 2:24 pm

Let’s be clear about this. I am no real estate pounder BUT reality is reality. As we get more and more immigrants coming into the city they actually desire a place to live that isn’t 500 sf of condo junk. Who can blame them. They cannot find a single decent home south of the 401 for under 700K so what do they do. It is obvious. Now add to this group the 30 somethings who own cars and can work anywhere there is access to a highway and voila you get a surge in interest in decent “affordable” homes.
10 years ago your parents would have easily been heard to say ..”are you nuts buying a place for 500 grand… you will never get your money out” Where is that logic today. With cheap money comes debtors PERIOD. Better to be in debt for a home with real land than air in the sky. I have been reading this blog for some 4 years or so and do believe that a correction is in the offing EVENTUALLY. BUT until interest rates spike or a whole pile of people die and leave tons of housing vacant in and around the city I simply don’t see prices abating. So here it is… rather than people waiting for prices to drop in areas that they desire or buying a tiny condo for a family of 3 or 4 they do what many people a generation before us did… they move farther away from the core. My mother did and all of her brothers and sisters. It is all based upon affordability and lifestyle. I know alot of people who live outside the city and only commute in for a meeting or on odd occasions …. the rest of the time they work at home. So Garth has some rethinking to do. EVERYONE ELSE cannot be WRONG ALL THE TIME CAN THEY???

#164 pbrasseur on 02.23.12 at 2:35 pm

@ The American #128

Interesting story! Thankl.

And I notice it happened not in the epicentre of the US RE debacle, but in Seattle, a prosperous city with an actual economy….

BC you’re in for one hell of a ride!!!!

#165 GTA Girl on 02.23.12 at 2:40 pm

TorontoBubbleBoy, BigRider;

I agree with both. Especially that there seems to be hype in certain specific areas in price gaps. Developers preying/targeting on consumer type. Perhaps in RichmondHill the project was hyped to Chinese newspapers, with price point set higher.

In Woodbridge we have a townhouse new builds on Langstaff/Kipling. They were marketed to Italo Cdn young professionals. Filled with upgrades. They are asking…$750k for resales. Units originally sold for $650 2 yrs ago. It makes no sense, especially in context that a older home in a better location in central Woodbridge can be purchased for $550k+. But will have its own full driveway, large treed lot, garage…yes, it will need renovation. But to buy a freehold new built townhouse for nearly $800k is insane!

Nothing makes sense. It’s based on image, prestige. All which will be washed away when the new shine gets rubbed off in a few years.

King City has three new developments opening. 65ft fronts (uncertain depth, but I doubt more than 150ft). Starting price…$1.6 mil. No amenities, no parks, schools, transit…..nothing. Too far to walk to anything, country roads.

#166 Dimitry on 02.23.12 at 2:43 pm

Try to search MLS listings for Southern Oakville in range between 1 mill. and up . You’ll be amazed how many houses awaiting new owners.

#167 };-) aka DA on 02.23.12 at 2:43 pm

#156Form Man on 02.23.12 at 1:18 pm

Oh and one more thing Form Man; I think we must both agree Fieldgate Homes, one of the subjects of this Garth’s most recent blog, has done a mighty fine job of letting the game come to them. A “salt licks” by any other name…

#168 realist on 02.23.12 at 2:43 pm

What you dont see is the majority of those asians are HIRED ham’s pumping the development. the ones that buy are the ones that got suckered.

#169 TRT on 02.23.12 at 2:44 pm

Garth,

you allow posts like #150 to be posted that have racist undertones yet you have deleted/censored many of my posts in the past that talked about undocumented population growth. Why?

You worried that the growth in temp workers/ international students/expired illegals here will affect the bottom line of banks, telecoms, etc aka domestic equities? Better to leave it under the table and allow posts like #150 to be freely posted.

That post slipped through, and has been deleted. — Garth

#170 Houman on 02.23.12 at 2:45 pm

Interesting post Garth,
I made a comment few days back about this and you deleted my post only to write about it yourself!

These houses all sold in few hours as I told you. 45 foot lot by 89 2500 sqf sold for 820. Considering closing fees, blinds, appliances and etc these buyers will be at 860 and that is with no upgrades.

The same house on the market with appliances, shutters, air conditioning and .. can be bought for 730 and it is not selling!

Try and explain that to me!

#171 Mister Obvious on 02.23.12 at 2:53 pm

I sometimes listen to the CBC Radio’s “Early Edition” in Vancouver (with host Rick Cluff). Rick seems a smart enough guy who is not afraid to ask pointed questions of guests.

This morning they had an economist on from UBC to give her opinions of the recent “austerity budget” brought just down by the BC Liberal government.

That went fine until Rick played a clip of a young person describing the $10,000 tax break for ‘first time buyers of new housing’ as a cynical and meaningless gesture from a desperate government trying to inject a little upside into a very dismal budget.

The economist’s had no response. She claimed no expertise whatsoever regarding the issuance of tax breaks to potential home owners and how that might have any effect on the economy positive or negative. No Comment. Tippy-toe.

I wish the CBC had called Garth. Fat Chance.

#172 penpal on 02.23.12 at 2:56 pm

I find it amusing that people who have had no real investment experience nor success long term and eschew risk are suddenly ‘to be listened to’ in the field of investing because they happened to buy a house a few years back.

I also find it amusing that the people who bought said houses did so at the urging of realturds who by definition of holding their slimy jobs show prima facie evidence of having been not financially successful in their own lives.

The blind leading the blind.

Everyone gets what is coming to them.

#173 Westerman on 02.23.12 at 2:57 pm

Regarding several posts commenting about brainwashed Canadian sheeple and politically correct, social -engineered schools and so forth I would like to take this opportunity to point out that lots of very intelligent, far-sighted people at the time this poison called liberalism was just getting it’s tentacles around the country repeatedly warned about the disaster that would envelope the country if this mental disease called liberalism was allowed to run unchecked…
They were called various names like racists, homophobes, xenophobes, misogynists etc., etc., etc., and shouted down by the shrill screams of the socialists ( liberals ).
IF, and that is a BIG IF, we ever get this country running on logic, common sense and reason again maybe people will learn from the past and liberalism will be buried and read it’s last rights – but knowing Canada and it’s population of people like Herb and Form Man … I doubt it …

#174 City Slicker on 02.23.12 at 3:12 pm

“Brace for Debt Shock” – BOC’s latest warning 1 hour ago:

http://business.financialpost.com/2012/02/23/brace-for-debt-shock-bank-of-canada-warns/

I still don’t think it’s sinking into the general public, after seeing this latest GTA idiocy.

#175 Lostinthewilderness on 02.23.12 at 3:12 pm

Don’t have to stand in line to buy these.Could even cover the purchase with your credit card for some of them.
Make way for the Canadian sheep,soon to be surprised when the clippers come out.There will ne mutton and wool all over the forest.

http://money.cnn.com/galleries/2012/real_estate/1201/gallery.bank-owned-homes/index.html

#176 City Slicker on 02.23.12 at 3:15 pm

I spoke with a RE developer yesterday in Calgary. Pitching me a 2500 sq foot home for $539K.
Was playing Columbo, you know stupid, and told her I was confused hearing there is a massive debt bubble in Canada. Her response was the correction is over, because this same house was $800K in 2008. Not sure what to make of the convo.

#177 Victor on 02.23.12 at 3:19 pm

Carney warning about household debt, again.

http://www.theglobeandmail.com/report-on-business/economy/bank-of-canada-issues-fresh-warning-on-debt/article2347476/

http://ca.finance.yahoo.com/news/bank-canada-worries-potential-debt-153834782.html

#178 spaceman on 02.23.12 at 3:19 pm

#15 truth hammer

the writer of this story need to go back to school, or study tax laws, what he fails to realize, is the money you get back from defferring tax, if invested, will also be taxed. think about it, put it into your RRSP? you will pay tax on it later, invest outside, still pay tax, unless it is invested in the TFSA. Which goes to prove the TFSA is still better than the RRSP.

How about putting dividend stocks in your TFSA? that makes sense, pay no tax.

#179 Junius on 02.23.12 at 3:22 pm

#160 Mixed bag,

You beat me to it. I haven’t had time to post but I thought that line was brilliant. One of Garth’s best – IMO.

We started most of our communities around the best farmland in the country and then paved over it. Future generations will think we were idiots for this fact alone.

#180 SRV on 02.23.12 at 3:25 pm

Re: Mar 9/09

“The buyers were handed opportunity”… seems to imply some kind of natural market move only the informed pro’s could understand…lol!

I guess the announcement (that week) that The Fed was about to dump $1.25 Trillion in liquidity through the 5 largest banks, ensuring rock bottom interest rates and rising equities (what were the chances investment banks might just buy a few stocks at rock bottom prices with that windfall… and their spankin’ new Holding Co designation giving them unlimited loans at zero interest) for the foreseeable future, was just a coincidence.

And of course, since I’m not a “Pro,” I sold most of my stocks… and bought Gold at $900, along with several miners!

#181 Canadian Watchdog on 02.23.12 at 3:28 pm

#133 truth hammer

Young man with two skilled jobs who can’t afford more then $15,000 says it all.

#182 mac on 02.23.12 at 3:29 pm

It seems odd that one cannot discuss the phenomenon seen both in Vancouver and now apparently Toronto of massive uptake of new real estate by Asians. If your point is something other than the idea that these purchasers are local immigrants caught up in the real estate frenzy, you’re subject to a personal attack.

Too bad because we are caught in unusual times where money is moving from the old world to the new in a variety of legal and illegal ways and may end up prolonging or suspending the real estate market and possibly causing a dislocation in the market (as is currently the case in Vancouver). It would be better to learn something about the nature of this money without the launch of idiotic personal attacks.

#183 BigAl on 02.23.12 at 3:32 pm

I was there. The picture with the guy in a toque signing, he was the first in line. Interesting note, the day after the JF opening, the Copper Hills development in Newmarket sold 10 lots.

#184 Roy on 02.23.12 at 3:38 pm

Garth wondered if you would comment or please post on Canada’s long-term social outlook and how this might be influencing the market today.

Considering in this post with what appears to be a mad rush of Asians in a panic to nail down their asset. This is central to their mindset – success at all cost or risk humiliation to the family. Consider the rampant overbuilding in many areas across the country particularly in small condos. Consider that Lower Mainland BC is strongly Asian. These are not only large scale economic but social forces as well which point to future trends.

Comment on: Is Canada being turned into China West? If so, we could see endless numbers of foreigners easily swamping the original population all over, as happened to the natives when white man came to America. Is Canada simply becoming a new fascist regime, of the corporatations for the corporations? If so what is the long-term prognosis regarding RE if endless numbers of people are willing to come here just to carve out an existence because much of the rest of the World is in much worse shape? Canada is resource rich, land rich, but population very very small like Australia.

Comment on do you see Canada becoming the new slave state, if potentially in years ahead RE would collapse and they would use the purposely overbuilt condo market as the new housing for the corporate slave citizens?

Please comment or post on those in higher circles have a plan for Canada, and that plan is playing out right before our eyes. Our borders are going, our sovereignty is fading rapidly. If you follow Agenda 21, the long-term “plan” for the World is that ultimately that no one will own RE at all.

Thanks.

#185 Junius on 02.23.12 at 3:39 pm

Garth,

#135 disciple’s post reads,

“Those who supplied children for paedophilia to Prince Philip were invited into the heroin trafficking ring.”

The Queen and her husband are trafficking children and heroin? I am no monarchist but what is this doing on this blog?

The comment has been deleted. Disciple is on a short lease. — Garth

#186 Canadian Watchdog on 02.23.12 at 3:43 pm

Chart: GTA Home Sales By Price Range As a Percent Of Total Sales.

http://i42.tinypic.com/x1n70g.png

#187 Joseph R on 02.23.12 at 3:43 pm

Victor on 02.23.12 at 3:19 pm

Carney warning about household debt, again.

http://www.theglobeandmail.com/report-on-business/economy/bank-of-canada-issues-fresh-warning-on-debt/article2347476/

http://ca.finance.yahoo.com/news/bank-canada-worries-potential-debt-153834782.html

It is called: “Let’s try to deflate the bubble SLOWLY..”

#188 Lee on 02.23.12 at 3:54 pm

I can’t hear someone say sheeple without thinking of this,

http://xkcd.com/1013/

#189 D-dawg on 02.23.12 at 4:01 pm

#88 Nostradamus Le Mad Vlad

Does anybody actually read his posts? Talk about useless.

The rants are akin to the Mummar Gaddafi speaches to the UN. Nobody really gives a flying purple….

#190 Form Man on 02.23.12 at 4:09 pm

#173 westerman

what happened to the ‘n’ in your name ?

I am pleased to report that I agree with you. You are correct to doubt that neo-conservatism will ever overthrow liberalism in Canada.

#191 Derek R on 02.23.12 at 4:14 pm

#154 Snowboid on 02.23.12 at 1:07 pm wrote:
Speaking of frenzies, BC real estate is about to take off with the $10K tax credit for first time new home buyers.

Of course, seniors like us are ecstatic that we can get a $1K tax credit towards renos – I think we may just get back into the market.

That stupid tax credit should be called the new home sellers subsidy because it won’t be the first time buyers who end up with the cash: it’ll be the construction industry. Think about it.

Without the tax credit the First Time Buyer can afford $500K and so pays $500K to the Developer for a house. Then the FTB claims nothing on his tax return. End result is that the FTB is down $500K while the Developer is up $500K.

With the tax credit the FTB can afford $510K and so pays $510K to the developer for a house. Then the FTB claims $10K on his tax return. End result is that the FTB is down $500K while the Developer is up $510K.

So the FTB may claim the tax back but who really got the money?

At least the senior gets to keep the benefit of the $1K for renos. The FTB just gets the same house that they would have bought anyway.

But I have to agree with your points about selling off what’s left of the provincial assets. To pay for this sort of crap? It’s criminal.

#192 Form Man on 02.23.12 at 4:15 pm

#167 DA

How about doing some research for us DA ?

The Tuscany Villas project in West Kelowna ( a photo of which was posted on this blog a few months ago with its 50% off signs ), was supposedly sold out in one day.
I just drove by there and the sales office has sandwich board signs out directing buyers to the 50% off condos………..months after ‘selling out’………wtf?

#193 Waterloo Resident on 02.23.12 at 4:19 pm

its all BORROWED MONEY, so who cares?

If prices for these homes goes down, just declare bankruptcy and WALK AWAY from your debt, its as simple as that.

And believe me, if prices of houses crash, I guarantee you that 95% of these people WILL declare personal bankruptcy and WALK AWAY from their mortgages, 100% sure of that !

#194 raider on 02.23.12 at 4:29 pm

Hey the cookie monster is featured on Bloomberg:
http://www.bloomberg.com/news/2012-02-23/bank-of-canada-says-home-price-decline-may-cause-consumer-spending-shock-.html
If even they admit it, it’ll be nasty…

#195 Tiny Bottoms on 02.23.12 at 4:30 pm

Bank of Canada worries about potential for debt shock

Noteable BOC + Flaherty Quotes from article

“It isn’t necessary for everyone to have the most expensive house they can possibly buy.””

“experience a significant shock if house prices were to reverse”.

“The evidence indicates that a significant share of borrowed funds from home-equity extraction was used to finance consumption and home renovation in Canada from 1999 to 2010″

“Such indebtedness constitutes an important source of risk to household spending, since it makes households more vulnerable to a potential decline in house prices”

“…since rising house prices can facilitate the accumulation of debt. Households could therefore experience a significant shock if house prices were to reverse”

http://ca.finance.yahoo.com/news/bank-canada-worries-potential-debt-153834782.html

#196 jess on 02.23.12 at 4:35 pm

unaware ? fake election calls ..oh the robo did it

http://news.nationalpost.com/2012/02/22/racknine-inc-fraudulent-election-calls-traced/

Transcript of a bogus call sent to a voter in Guelph on federal election day, May 2, 2011.

“This is an automated message from Elections Canada. Due to a projected increase in voter turnout, your poll location has been changed. Your new voting location is at the Old Quebec Street Mall, at 55 Wyndham Street North. Once again, your new poll location is at the Old Quebec Street Mall, at 55 Wyndham Street North. If you have any questions, please call our hotline at 1-800-443-4456. We apologize for any inconvenience this may cause. (French version recorded in another woman’s voice follows.)”

#197 Smoking Man on 02.23.12 at 4:41 pm

#85 Monster Cookie on 02.23.12 at 2:03 am
To get rid of an imposter come out with a scathing racist post. It worked for me.

#73 Carpe Diem on 02.23.12 at 12:51 am
Your kid is lucky to have you as a parent, you are recognizing early how much destruction these parasites called teachers can do.
Difference between the president of the Bank and the guy sweeping his floors is self esteem and an I can do attitude, if your kid happens to get the wrong teacher at a critical point in life, might I suggest curling as a sport, just to get them ready for adult hood.

#198 Debt-Ridden on 02.23.12 at 4:43 pm

MSM can’t deny reality any more:

Debt-ridden Canadians may find their financial security built on a house of cards: Bank of Canada.

http://www.moneyville.ca/article/1135680–debt-ridden-canadians-may-find-their-financial-security-built-on-a-house-of-cards-bank-of-canada?bn=1

#199 jess on 02.23.12 at 4:46 pm

So Companies haven’t been enforcing the law?

Two hundred fourteen workers were fired in December and January, as a result of a so-called silent raid, in which the Immigration and Customs Enforcement (ICE) arm of the Department of Homeland Security (DHS) inspected the company’s records to find workers who don’t have legal immigration status. ICE then demanded that the company fire them, because it said they lacked legal immigration status.

Over a thousand janitors lost jobs in Minneapolis,
2,000 sewing machine operators lost jobs in Los Angeles and many more lost jobs across the country.
=
Since the Immigration Reform and Control Act of 1986, employers have been prohibited from hiring undocumented workers and workers themselves have been forbidden to hold jobs.

To keep track of immigration status, for a quarter-century all workers in the US have had to declare their immigration status on I-9 forms when they get hired. Now, the Obama administration has made the inspection of those forms and the firing of workers who can’t show legal immigration status a centerpiece of its immigration enforcement strategy.

#200 Smoking Man on 02.23.12 at 4:47 pm

#173 Westerman on 02.23.12 at 2:57 pm
You are one dumb hick.

Do you not realize fuelling the left , right Paradyn only helps the shadow forces controlling the machine further in slave you.

#201 raider on 02.23.12 at 4:48 pm

Btw. #175 & #174: No wipe-out for the sheep please ;) Some sheep should still service savy investors the 7.6% yield on this one: http://claymoreinvestments.ca/etf/fund/fie.a

The REITs held may survive the hit as foreclosed/defaulted families need to live somewhere; however, the financials may be hit harder.

#202 Crazy Bank of Canada on 02.23.12 at 4:55 pm

“[Bank of Canada] notes that despite the equally steep increase in home prices, affordability has remained relatively constant due to rising incomes and falling interest rates.”

What say ye of this, Garth?

#203 Blacksheep on 02.23.12 at 4:55 pm

SM via DA # 119,

“…when are you going to figure out the herd is dumb, but to go against its sentiment is even dumber.”
——————————————————
Gretzky, “The Great One”

“He could consistently ANTICIPATE where the puck
was GOING TO BE and execute the right move at the RIGHT TIME”.

http://en.wikipedia.org/wiki/Wayne_Gretzky

Not challenging the trend is a given. I believe the
real skill lies in seeing the coming shift, before it happens, and more importantly, when it will occur.

Prescient names that come to mind: Peter Schiff,
Kyle Bass, and now our own Garth T.
——————————————————
DA,

“The game will not come to you. If you wait for
it to do so you will starve”.
——————————————————
Disagree.
Once positioned correctly, the “Game” will
most definitely, come to me.

Example: Watering hole, at dawn?

When Canadian RE and the economy was booming
in 2007, how many made the contrarian move,
to invest in PM holdings, before any crisis occurred?

Chasing…..the trend, puck or Game, is folly.

take care,
Blacksheep

#204 Alberta Ed on 02.23.12 at 5:21 pm

Someone should put up a Blued and Tattooed parlour out front of Jefferson Forest so the hapless buyers could get the full package.

#205 Uh Oh Canada on 02.23.12 at 5:26 pm

Just came from BMO because I needed RRSPs. (I know, I know, but I’d rather do this than pay stinking taxes!) Anyhoo, TNL@TB, or the nice young man told me that the Bank of Canada has decided to leave the current interest rates as is until 2014!

See Garth, I told you so! Even though you’ve lost 1% credibility, I still believe you at least 99% of the time.

Just for the record, there is no such policy. The bank guy should be outed. — Garth

#206 Ralph Cramdown on 02.23.12 at 5:29 pm

Considering closing fees, blinds, appliances and etc these buyers will be at 860 and that is with no upgrades.

The same house on the market with appliances, shutters, air conditioning and .. can be bought for 730 and it is not selling!

I wish I could dig up the source, but in the last few months I read an article about an airhead who was shopping for a condo, deciding between new and resale, and decided she’d “rather have a tub that hadn’t been used by anyone else.” Maybe it was a realtor plant shilling for new condos, because it’s hard to believe otherwise.

#207 TRT on 02.23.12 at 5:46 pm

#193 Waterloo

be careful of what you post in case you have to walk…

but bang on.

#208 Critical Mind on 02.23.12 at 5:52 pm

#182 Mac, fair point.

Clearly the pictures speak for themselves, but I do not feel there is a secret to the money. Many of these people are colleagues and friends, and it has been hard-won through generations of scrimping, saving, haggling, investing, and living far less indulgent lifestyles.

You can browse through the local bookstores and find more copies of Napoleon Hill… or Robert Kiyosaki… than anything else…

It permeates the education system with an obsessive drive to enroll your infant child into the hottest ‘Montessori’ school…

It can be seen in the ironic line-ups on any clublink golf course at the 2:00pm ‘discount’ tee-time…

And it is all played out in large scale through Niall Ferguson’s concept of ‘Chimerica’.

This is the dominant money culture.

The beating heart of economic determinism playing itself out in your backyard.

Those wishing for some sort of reversion to the past to justify their assessment of asset prices, have simply been wasting their time.

Those among us that notice, have been capitalizing for some time, and will continue to do so.

#209 Westernman on 02.23.12 at 6:01 pm

Form Man @ # 190,
Eventually as the population of producers becomes smaller and smaller in proportion to the population of useless eaters the liberal holy grail of “take from the productive and distribute to the useless and non-productive” will cause it’s own collapse…
The productive won’t carry you and your ilk forever…

#210 Westernman on 02.23.12 at 6:02 pm

Smoking Man @ # 200,
At least I am sober and can spell…which has you beat 99% of the time…

#211 isabel on 02.23.12 at 6:26 pm

in case anyone needs more proof
http://ca.news.yahoo.com/boc-says-canadians-increasingly-vulnerable-due-rise-home-155811667.html
.

#212 SRE on 02.23.12 at 6:28 pm

http://www.theglobeandmail.com/globe-investor/investment-ideas/george-athanassakos/canadas-housing-bubble-this-time-is-not-different/article2347630/

PS where did all the ron paul nuts dissappearto? Think they’re in line in the photo above…

#213 Form Man on 02.23.12 at 6:29 pm

#209 westernman

glad to see you found your ‘n’. you lost that a few days back…….

actually I believe the Liberals are right now hatching a plot to overthrow the Harper regime. Apparently they are considering voter suppression, contempt of parliament, closure, illegal accounting (to circumvent voting rules) vote buying…………..wait, sorry………..I have my political parties mixed up……which one is the anti-democratic totalitarian one ?

#214 mark on 02.23.12 at 6:30 pm

Everybody’s looking at you

http://www.macrobusiness.com.au/2012/02/canadian-bubble-trouble-leith-van-onselen/

#215 arctodus on 02.23.12 at 6:34 pm

This blog has really headed south as Garth has “shepherded” the doomers to the side. Sorry guys but predicting a real estate crash ain’t doomerism…it is a forgone conclusion.

What I shake my head at is how badly ya’ll miss the entire friggin boat as to what is actually happening in the world.

The world economic system is in full scale contraction…and it will not stop until we are back at levels more reminescent of Europe in 1000 BC.

The EROEI ratios of energy extraction are now so low that the world economic engine is seizing up for lack of real value.

Massive paper money infusions have not and will not help. The rise of totalitarian regimes (in the USA and elsewheres) will not help. The occurrence of worldwide wars will not bolster any economies.

I suspect that already life expectancies in the states are in free fall as people fall off the insurance, employment, entitlement bandwagons….objective unemployment rates are already far beyong 1930 great depression levels (we are at approx 33% listed unemployment levels).

Canada is now entering the worldwide fall as the export markets collapse for energy. Regional prices needed for tar sand expansion (for example) are in excess of 85.00 dollars per barrel. True regional prices paid by petroleum refiners are only 65.00 per barrel. We do not have to worry about the enviromental inpacts of pipeline developements….those line will never be built…the system is now contracting so hard that I doubt the project will even exist in 25 years.

Yeah yeah I know doom doom doom…blah blah blah…..

Just the facts Maam actually…..

We are screw.. and are to stupid to even know it.

Living standards are starting to fall in this country even as we speak …but it ain’t covered on CBC, CTV and it never will be.

Thanks for reminding us why doomers are tedious. And wrong. — Garth

#216 Sebee on 02.23.12 at 6:43 pm

#145 condo sucker

Which Mclean’s issue? Whitney on the cover?

#217 Sebee on 02.23.12 at 6:44 pm

#145 condo sucker

Which Mclean’s issue?

#218 Steven Rowlandson on 02.23.12 at 6:47 pm

Westernman has made a good point. With out a large number of producers creating wealth and paying taxes there must be a limit to what the non productive can get from the system with out a serious problem or an out right collapes of the system from either default or hyperinflation.
The current system that depends on cheating, poor lending standards and a ZIRP is obviously unsustainable.

#219 Smoking Man on 02.23.12 at 6:49 pm

210 Westernman on 02.23.12 at 6:02 pm
I don’t mind personal insults, I thrive on them.

But this left right thing only divides the massess so the machine can crush you while your screaming at each other.
as far a spelling I can chose not too. Not indorsing system that makes tax farm slaves,

No counter on the sober comment. Your right

#220 Smoking Man on 02.23.12 at 6:53 pm

#203 Blacksheep on 02.23.12 at 4:55 pm

obviously you don’t day trade.

#221 };-) aka DA on 02.23.12 at 6:53 pm

Form Man:

To the best of my knowledge it did sell out. There is only one 2 bedroom, 1,247 sq. ft. unit currently for sale on MLS offered at $275,000 by someone who did buy from the developer.

#203 Blacksheep

As they say; “Even a broken clock is right twice a day”.

And in any event you still have to get to where the target is going to eventually be. The game is not going to come to you unless you position yourself accordingly. Gretzky did not sit on his ass and wait for the puck and I really do doubt that his uncanny ability to anticipate where the puck was going to be I would venture to suggest there were many a time he had to alter his moves. As he is also quoted, “You miss 100% of the shots you don’t take”, I suspect he took the shots and made the moves that he might capitalize on his talent. He did miss a shot or two in his career you know.

If you are never failing you are not trying hard enough.

#222 Bigrider on 02.23.12 at 6:54 pm

Garth, I can’t see what could possibly be wrong with my posts about Don Campbell and REIN but it is your blog.

The censoring is disappointing however.

He can speak for himself. — Garth

#223 Bigrider on 02.23.12 at 6:58 pm

T.O Bubble BOy.

All your comments in response to my post I agree with.

My only challenge to you or to others is this pervasive notion that living in T.O proper is somehow better and more expensive and that choosing to live in the near burbs is one made for reasons of lower cost only. Some of us do not need to be in the city or prefer not to be.

#224 bill on 02.23.12 at 7:00 pm

Westernman on 02.23.12 at 6:01 pm

this ones on me….

http://www.youtube.com/watch?v=-eN-ScHMdC0

#225 Bigrider on 02.23.12 at 7:00 pm

GTA Girl.

I know all about that development in King City. Prices on those lots up something like 300k in a year. Middle of nowhere big ugly monsters with few upgrades. Builders making out like bandits.

#226 };-) aka DA on 02.23.12 at 7:02 pm

#203 Blacksheep

My point is; while this one might run into overtime, the game ain’t over and Schiff, Bass and Turner have not triumphed quite yet. Had they shut up a few years ago they most assuredly would have succeeded predicting the future to then but now three and four years later they harp on yet more when quite possibly they’ve been given all they will get.

#227 cto on 02.23.12 at 7:03 pm

Garth

I don’t mean this to be offensive to any Asians, but looking at the 2nd photo and i notice that nearly all are east asian.

Why are they soooo confident that housing is such a “can’t loose” proposition, especially with it so clear of what loms ahead!?

#228 Bigrider on 02.23.12 at 7:05 pm

Heads up to all.

New development to open at Hwy 48 and Steeles, treasure hill builder ,90 units ,2000 registered buyers.

Prices are being by builder accordingly

#229 Westernman on 02.23.12 at 7:09 pm

Form Man @ # 213,
Yeah, you are mixed up about which political party is the anti-democratic totalitarian one so I’ll help you out … that would be the liberals ( Socialists ) and the NDP ( pure marxism ) …
Simple, isn’t it? If you need any further help I’ll be glad to continue your education in Reality 101.
I consider it public service work… helping the intellectually underpriviledged so to speak…

#230 noname on 02.23.12 at 7:26 pm

“[Bank of Canada] notes that despite the equally steep increase in home prices, affordability has remained relatively constant due to rising incomes and falling interest rates.”

^^ what are they smoking over there at the BoC?

#231 Herb on 02.23.12 at 7:31 pm

Westernmoron,

your #228 certainly shows the breadth of your political wisdom, all the way from “A” to “B”.

You’re welcome.

#232 Maya on 02.23.12 at 7:32 pm

Feng Shui effects the property assessment value in Richmond, it reminds me the UBC senior care home project.
richmondreview.com/news/139907213.html

#233 Nostradamus Le Mad Vlad on 02.23.12 at 8:03 pm

#76 Party on Garth — “I also notice the majority of the people seemed to be in a certain age group. You ageist bastard. What do you have against people in their twenties?” — Nothing. They are just making the same mistakes we did a generation ago. Some of us old farts are still making mistakes. Nothing wrong with that.

#112 fancy_pants and #147 Mel Rossmo — “Vancouver and Toronto RE = bRE-x” — Correct. Ended well for Bre-X holders, no?

#154 Snowboid — “Speaking of frenzies . . .” — Interesting that Campbell dumped the HST on to us with one announcement (leaving next April Fool’s Day), most people were livid that a politico had betrayed us, so we put up our own frenzy and got him booted.

Now they are trying to placate us by giving us back our own money, and expecting us to take on further debt and we’ll be al happy and satisfied again. Not a chance in hell!

#172 penpal — “The blind leading the blind. Everyone gets what is coming to them.” — Accurate and very true.

#189 D-dawg — It is possible that you have never heard of, or realize what a scroll button is for. If not, I recommend checking your owner’s manual. That will help enormously. Beyond that, a few years of good psychotherapy should do wonders, so get help ASAP.

#214 arctodus — “Living standards are starting to fall in this country even as we speak …but it ain’t covered on CBC, CTV and it never will be.

“Thanks for reminding us why doomers are tedious. And wrong. — Garth”

Arctodus does have a valid point, Garth. Outwardly, people appear to be doing okay, but looks can deceive. What goes on behind closed doors is another matter entirely, incl. finances.

#234 Leith on 02.23.12 at 8:07 pm

Hello Garth

I don’t usually promote my own work on this site. However, I have written a detailed article on the Canadian Housing Bubble / CMHC, which you and your readers would probably find interesting:

http://bit.ly/xXLRmE

Keep up the good work.

Leith

#235 Form Man on 02.23.12 at 8:09 pm

#228 westernman

Well you may have found your long lost ‘n’, but you were unable to find any reading comprehension skills. Honestly I wonder how you have made it this far in life. There must be some kind woman guiding you along…….

#236 Smoking Man on 02.23.12 at 8:10 pm

#212 SRE on 02.23.12 at 6:28 pm

Don’t you realize the machine is putting out those negative RE stories to scare some inventory on the market. Before the spring rush…

once they get it up Gloomy Re stories will fade, if they see pressure and prices actuly falling, they will blow real estae sunshine.

Carney might even blow a -.025 kiss

#237 Snowboid on 02.23.12 at 8:11 pm

#134 GuyInBurnaby on 02.23.12 at 11:16 am…

For small stratas the depreciation report can be onerous and expensive, but in the end it benefits all buyers who will easily be able to judge the financial shape (contingency) of a strata.

Given that most older condos may require major work, this in itself could lower selling prices another 10-15%.

If you are buying make sure you now add the copy of the depreciation report on the list of ‘Subject Tos’.

#238 JRoss on 02.23.12 at 8:13 pm

DA,

“As he is also quoted, “You miss 100% of the shots you don’t take”, I suspect he took the shots and made the moves that he might capitalize on his talent. He did miss a shot or two in his career you know.”

Great quote DA, because throwing a puck the net and hoping for a bounce is exactly the type of strategy people should employ with their life’s savings.

Give your head a shake. Seriously.

#239 Smoking Man on 02.23.12 at 8:19 pm

#118 Jamaican_Gal on 02.23.12 at 9:36 am

Heck with the concert,

I once took a tour of the universe with an angle I met at the million dollar saloon.

Tour lasted for about 8 min, then the damn peramedics revived me.

What was cool, the angles name was becky, who would name such a godes becky.

When we got to the centre of the universe, U had a talk with who I tought was god. But it was only that crazy little voice in my head.

Good trip though

#240 truth hammer on 02.23.12 at 8:32 pm

Carney admits that Canadians are in a pickle…..but predicts smooth sailing ahead for housing prices. “This is so good……it’ll just have to be forever….sighhhhhh!!

http://www.theglobeandmail.com/report-on-business/economy/central-bank-targets-home-equity-credit-lines/article2347476/

These duplicitous curmugeons can’t admit to having created a ten year program that has run consumers into a nightmare of personal debt…..they take no responsibility whatsoever….typical

btw…..house prices only go up……until they don’t. What was that Trotsky said…..”while it was happening it seemed like it would never end….and when it was over we wondered how it had lasted so long”.

Someone else said ” Only those inside the bubble can’t see it”.

#241 Lee on 02.23.12 at 8:43 pm

#226 cto on 02.23.12 at 7:03 pm

Cto I have a good friend who is Australian but of Indian descent so she’s a bit of a cultural grab bag.

One thing she said that struck me is that her mother lives in Montreal and she was amazed at how insular some groups of immigrants/cultures can be. Many come to Canada and associate largely with people of their own heritage (maybe not a huge surprise).

People in groups tend to do whatever their support network validates them for doing. If everyone around you pats you on the back and tells you how great it is that you are going to get into the property market, using the hundred canned phrases we hear here everyday (get in now!), then it starts to seem like a pretty good idea.

Then you start to become emotionally attached to the idea, so it doens’t matter if they jack the prices 20% on sale day, I want that damn house!

If you start looking for it you’ll see it quite a bit, all your friends get married around the same time, kids the same time, houses the same time. They all start wearing 50/50 hats with the stickers on them…

#242 Fiat Smoke on 02.23.12 at 8:54 pm

#229 noname on 02.23.12 at 7:26 pm

“[Bank of Canada] notes that despite the equally steep increase in home prices, affordability has remained relatively constant due to rising incomes and falling interest rates.”

^^ what are they smoking over there at the BoC?

Fiat currency.

The good stuff.

#243 Patiently Waiting on 02.23.12 at 9:05 pm

. . . I have a sense that the Wile E. Coyote moment nears for these economically illiterate home buyers. Soon the “it’s different here, real estate only goes up” attitude will be rudely acquainted with the “Economics of Gravity 101″. But as long as they refuse to look down and see that they’ve missed the bend in the road, I guess things will look good for a little longer . . .

http://www.bing.com/images/search?q=wyle+e+coyote+pictures&view=detail&id=27FC9DB4D90600879D1C5C571E1C8B742C4159C8&first=91&FORM=IDFRIR

#244 Condo Sucker on 02.23.12 at 9:05 pm

#215 Sebee

The Maclean’s issue I was referencing with the cover story of a Cdn Real Estate crisis is the current issue, dated March 5. The one with Whitney on the cover was last issue, dated February 27.

#245 NotAGreaterFool on 02.23.12 at 9:18 pm

Canada’s housing bubble: This time is not different

http://www.theglobeandmail.com/globe-investor/investment-ideas/george-athanassakos/canadas-housing-bubble-this-time-is-not-different/article2347630/

Mass media are getting with the program as are economists not employed by Banks

#246 Nostradamus Le Mad Vlad on 02.23.12 at 9:21 pm

-
Chart Seems quite interesting; Greece’s Gold The IMF took Libya’s as well, and Confiscated Gold going to banks; Greece Didn’t TPTB say Greece was going to be destroyed? Plus Insolvent EZone banks; Euro banks take hit on Greece; Documented dubya, US Fed and Euro banks in US$15 tri. fraud. Is this the same US$15 tri. that’s gone missing from the economy? And 10:57 clip US$15 tri. fraud exposed in UK House of Lords; US$47 mln. “Why were the executives who did this stock price inflation at Fannie Mae not tried and convicted of their crimes?!” wrh.com; 2:39 clip West’s sanctions against Iran are meaningless, as Chindia needs the oil more; Pillaging Incl. the deliberate takedown of Greece.
*
4:20 clip 2012 election rigged. It’s not over yet — wait for Jeb Bush to appear; Syria “Please remember: Syria is not the prize here, but rather Iran, with which it has a mutual defense pact. Should Syria be invaded by massive numbers of outside forces, Iran is treaty-bound to send in troops; and this would be the “justification” for an attack against Iran.” wrh.com; Monsanto Robo signing approvals, and USDA approved “But don’t you DARE grow your own food in your back yard, slave!” — Official White Horse Souse (wrh.com); US Troops “This has far less to do with “terrorists” than it does with which countries get access to these countries’ wealth in oil, natural gas, and mineral resources.” wrh.com; RIP Peak Oil “In other words, “Peak Oil”, like “Human Caused Global Warming” was a hoax to scare people support for certain political agendas they otherwise would not have wasted time with. And this article does not mention Russia’s extensive research into the true abiotic origins of oil.” wrh.com, but Oil Shock?

Headline here is awarded the Bovine Excrometer Medal; Iran Tucker Carlson: “I do think Iran deserves to be annihilated, I think they’re lunatics, I think they are evil“; 4:04 clip ACTA uproar.

#247 Timbo on 02.23.12 at 9:38 pm

http://www.theglobeandmail.com/report-on-business/video/video-us-gas-prices-soar/article2347203/

what ? the recession is over… thank god high fuel prices will help out the consumer and spur on growth,,,

#248 Across the Pond on 02.23.12 at 9:53 pm

#134 GuyInBurnaby on 02.23.12 at 11:16 am…

Unlikely to make any significant difference. There is the option to vote out of the need of having one done is 75% of the owners are in agreement. I can’t imagine too many strata owners are going to vote for the extra expense, and possible damage that a depreciation report can cause.

The only way I see this making a difference is if a whole bunch of stratas start accepting these, and they become a sizable amount for banks to start shunning approving mortgages for stratas that have voted to not conduct appreciation reports.

The biggest change in the SPA since it’s introduction was the change to stop new stratas restricting rental restriction bylaws.

#249 Spouseofmac on 02.23.12 at 10:07 pm

Asians are buying up Canadian cities, particularly Vancouver. Not 1934 or a stereotype. Merely an observation based on reality.
Political correctness has made Caucasian bears blind. Meanwhile, Asian bulls just continue to buy, buy, buy….

#250 Snowboid on 02.23.12 at 11:03 pm

#248 Across the Pond on 02.23.12 at 9:53 pm…

If a medium to large strata votes to opt out (they have to redo the vote every eighteen months) that would put up big, big red flags that they are hiding something.

#251 Habbit on 02.23.12 at 11:19 pm

#178 spaceman Losses cannot be written off in registered accounts. Taxes can go up impacting RRSP’s. Changes can be made to TFSA and dividend tax credit at any time. When the government starts looking for $ nothing is safe. OAS at 67? Tax capital gains on primary residences? It could get interesting.

#252 Doofus on 02.24.12 at 2:35 am

I’ve got some nice tulips!

#253 Poorgoisie on 02.24.12 at 4:27 am

I know, I’m on about demographics again but hear me out… Between 1980 and 1985 RE shot up like crazy, was it because the world realized how amazing Ontario place is? Or could it be that the largest portion of our population hit house buying age? By 1989 most of the boomers had homes and thus the market cooled. Interestingly the 25 year amortization period also arises in these early/mid 80s and here we sit 25 years (plus a couple) wondering why? Why give away 30-40 year mortgages with no money down? Either the banks saw their monthly income about to dip or they just really wanted to help us “live the dream”. Of course there was some risk involved but Fannie/Freddie/CHMC would take care of that. There is no hidden agenda people, no Asian take over scheme, they are Canadian and they have been told the same things we all have: own and win, rent and lose. The cheap money didn’t come about because the bank wanted to help us, they just saw the end of the line. No liberal conspiracy, no right wing conspiracy just people looking to improve/maintain the bottom line and hope to come up a patch before it blew up in their face(or at least leave someone else in charge when it did). We gotta think long term people! Plus build a time machine… Of course if we did have access to a time machine one of you would have gone back and killed Al Gore’s mom thus preventing the Internet and this post. But this post is still here and so by back to the future/bill and Ted rules none of you succeeded and we can conclude that time travel shall never be possible and/or Al Gore’s mom is a ninja….night

#254 earlymidlifecrisis on 02.24.12 at 10:37 am

I can grasp the financial benefits of renting, but it ends there for me. The landlady has broken her word a 2nd time now (could easily be #3 but will let the 1st one slide as a possible miscommunication) I will shout it from the rooftops here- I WANT A HOME! I want to be allowed to use the yard, have a dog, control the heat, not have a landlady say one thing and do another. Ive only been here since Nov and now have to move again. 2nd shit hole in a row now. But, cannot tolerate people with no integrity. Oh how i miss being a homeowner. I know- hungry people make poor shoppers. The next rental must be good lest i snap and buy too early.

Guess who is to blame for your poor choice? — Garth

#255 Uh Oh Canada on 02.24.12 at 12:24 pm

Check this out: Trying to get a business loan from a big bank that shall remain unknown. (BMO) Run a successful business with no deficits and am trying to buy big equipment before the Spring. Can be approved for a commercial loan at 9%. Huh? So I can get a mortgage on a home purchase at 3.25% interest, but 9% interest for a business loan?!

Yes, that is why our economy will tank.

PS- I’m gonna use my TFSA instead. Thanks for letting me rant on your blog, Garth.

#256 D-dawg on 02.24.12 at 5:45 pm

#233 Nostradamus Le Mad Vlad

Don’t your worry, NLMV, I scroll right by those loquacious, irrelevant, passages. My musing was to understand whether others on this blog do the same.

Funny thing about psychotherapy; those who reccomend it are often the ones in most need of it.

…and my advice to you: don’t try so hard.

#257 Webcanto on 02.24.12 at 6:04 pm

Not everyone’s white trash who has to show off money they don’t have. ASIAN IMMIGRANTS WORK CRAP JOBS, SAVE EVERY PENNY THEY HAVE, INVEST, AND DEAL IN CASH.

#258 NoName on 02.24.12 at 7:32 pm

I dont think that we need rate increase to send RE down… they are just catalysis to speed up process…
interesting charts shows how fuel price affect gdp and personal income
gasoline price vs gdp,
http://goo.gl/t6IHc
and disposable income vs gas prices
http://goo.gl/ZYnrV

#259 Sue on 02.26.12 at 5:20 am

The buyers looks like they just arrived from China!