Sea change

“You know, I hate times like this.” John spat out the words, each one coated in disgust. “That’s three people today who have walked. Never happened before.” We’re hanging out in the back office of his real estate brokerage, looking at the harbour, yakking about the market. Things are not going well. Listings are growing mold. Buyers are balking. The three deals were lost for the same reason – sellers signed back higher than buyers thought reasonable. They got up and left.

Turns out John’s been in this gig for 25 years. Long enough to see markets turn on a dime, and leave change. Like now. “There’s always a period between a seller’s market and a buyer’s market when nobody’s happy. And not a damn thing I can do about it. The sellers are still deluded, thinking everybody’s crazy to get what they’ve got. The buyers know what’s coming, and smell blood. I hate times like this.”

How long does the hate go on? “Two years,” John says. “Maybe more.” The good news, at least in this market (I spent yesterday in Nova Scotia), is that the change is already on. Months have passed with the same story – every day there are twice as many price reductions and new listings across the entire province as there are solds.

Seasoned realtors like John will probably survive. Newbies like Mary Cleaver in Vancouver could be crushed. (You may recall I wrote about her on the weekend, and posted her infuriating video. She called me yesterday to ask for advice. This is progress.)

In fact, look at this killer graphic from the MSM yesterday. Could there be a clearer snapshot of what John’s saying? Listings surge. Sales crash. Prices are doomed.

Just hours after RBC economists made headlines claiming the only bubble in Toronto lives in Mayor Ford’s pants, another batch of experts said phooey.  Capital Economics is sticking with its prediction of a withering 25% dump for Canadian real estate values over the next two years – not a whole lot off the 32% correction which ate the US middle class.

Says Capital’s David Madani: “There is always a stand-off period at the end of a housing bubble, when prospective buyers refuse to meet the price of sellers, who refuse to drop the asking price. Eventually it begins to dawn on sellers that the market has shifted and, as they become more desperate, they eventually agree to lower their asking price. But until that happens, any stagnation in prices can be misinterpreted as a successful soft landing.”

That could have been Realtor John talking, of course, as a few houseflies pollinated the listings brochures racked on the wall behind him. The spitting match between vendors and purchasers in a weakening market always looks inconclusive. But there’s always one outcome. The buyers win.

Adds Madani: “The willingness of buyers to pay these historically high house prices now looks to be proving fragile against the increasingly disappointing macroeconomic backdrop. The housing bubble in Vancouver already appears to be deflating, with only Toronto defying the inevitable. Accordingly, we expect substantial declines in house prices over the next year or two.”

Just as this pathetic blog has been saying. Hell even RBC is expecting a price decline of up to 7% in the condo market, plus the cancellation or delay of projects. TD is calling for a 15% housing drop. And the rest of the world thinks it’s just so damn amusing when people in Saskatoon nod and tell each other, “it’s different here.”

Finally, as if any more evidence of excess is needed, here’s MPAC, the quasi-government body in charge of assessing five million properties in Ontario. As you may know, municipalities look to these guys to tell them how much the serfs have in real estate, so property taxes can be adjusted accordingly.

The latest report says Toronto prices increased on average 23% in the last three years, which is three times the inflation rate and five times income growth. This is for a region of six million people, which is twice the population of Alberta and equal to six Saskatchewans or Nova Scotias. Within that, some areas doubled.

Said an MPAC official: “The continuing strength is very positive, particularly when you look to the border. You always expect that the trend that occurs there occurs in Canada, but we’ve reversed that situation through prudent financing and not overbuilding.”

Why does ‘strength’ mean higher prices? How is it ‘very positive’ when the average family can no longer afford the average home and has terminally indebted itself trying? How does ‘prudent financing’ include 30-year mortgages, cash-back downpayments, zero-down financing and teaser rates?

Every single day the real estate industry lies to consumers, and media reports it. Sellers are lulled into believing the bull market’s eternal. Prices stay sticky even as demand wanes, until the point of surrender arrives. It always does. Then the pendulum swings wildly in the other direction. Where once everyone believed values would rise endlessly, suddenly they fear there’s no floor.

The veterans have seen it all before. The HGTV crowd hasn’t. One group will survive.

163 comments ↓

#1 TurnerNation on 07.25.12 at 7:07 pm

Early post!

Time zones. — Garth

#2 bonzo on 07.25.12 at 7:14 pm

First where it counts…now if the Chinese keeps devauling their currency, maaaybe the engine of the world keeps running through August…prolly not though. There’s a storm coming…

#3 gmc on 07.25.12 at 7:21 pm

think we are not in trouble as a country, we need to roll over our national dept, 56 % within the next two years.
cheers ,
http://www.financialsense.com/sites/default/files/users/u163/images/2012/0720/06-debt-summary.jpg

#4 Village Whisperer on 07.25.12 at 7:26 pm

What did Mary Cleaver have to say… and what pearls of wisdom did you impart?

#5 neta on 07.25.12 at 7:29 pm

Hm… Early indeed!
At least, I know that I am not the first one!
It iscomforting….

Good post Garth, thanks!

#6 Cory on 07.25.12 at 7:35 pm

Calgary is different. Many stupid people still buying up a storm. Not sure how they are getting mortgages other than the 3 month pre approval crowd. Condo building galore in a urban sprawl town. Shaky oil industry.

I’m throwing in the towel and not trying to figure it out anymore. Up is down it seems. TO and Van are only 2 markets out of many in the country. 2 does not make a crash or correction.

#7 pathcontrolmonk on 07.25.12 at 7:37 pm

Latest RE headline from The Vancouver Sun: “Pace of condo presales slows, but numbers remaining high in Metro Vancouver”.

Bad is good, slowness is speed, insolvency is wealth.

#8 -=jwk=- on 07.25.12 at 7:38 pm

I wish I had something constuctive to say so I could be first.

We are taking 2 years off the house hunt – just tired and gave up fighting.

#9 Johnny D on 07.25.12 at 7:39 pm

It is different in Saskatchewan… People have $70,000 trucks to pay off on top of everything else.

#10 polecat on 07.25.12 at 7:42 pm

Little nuts here in HRM ( Halifax Municipality for all) too Garth. Wages not supporting the cost of some of these homes. Ships or not, yet. Do not get it, well, I do, for all the reasons you have stated endlessly. I did buy but at 2.5 my income and she’s a bit of a fixer upper, should have her paid off about 4 years early on a 25 yr am. Highest taxes in country too. Bail out big companies yet kill our solar heating inititiative which would actually help the people, I hear Belize is nice, might be a retirement option. Thank’s for your words over the years, don’t like what the future is looking like in our country.

#11 T.O. Bubble Boy on 07.25.12 at 7:42 pm

For $1.13M, you too can own an “original” 1972 house in prime Lawrence Park:

http://mytour.advirtours.com/livetour/photo_album/201616

So “original” that not one inch has been upgraded in 40 years! Reminds me of all those West Vancouver selling for $1M+ that just say “Old Timer” on the listing.

Put this house in Oshawa (or, most places in Canada), and it sells for a fraction:
http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=12094951&PidKey=596052656

#12 Realistic realtor GTA on 07.25.12 at 7:42 pm

I see it here in Toronto. Sellers saying they Expect 10% more than the previous sale on the street otherwise they are not selling. Their next sentence says they need that money to live for retirement so they can’t sell for less. Sellers are now being greedy. My buyers have had it. If it is a multiple offer night don’t even bother showing it to them. We will see how long this impass lasts.

#13 TRT on 07.25.12 at 7:42 pm

G man…go to Milestones at Denman/Pacific and order some grilled Salmon…watch the Sun go down over English bay…very nice!! …nice also metaphorically speaking.

#14 Book of Eli on 07.25.12 at 7:42 pm

Toronto will be fine especially those smart enough to have bought a unique condo like the candy factory, chocolate factory or Toy factory.

Garth you speak of liquidity? The same liquidity that has these so called “investors” sell at their lows? Real estate is the only asset that has made money long term and everyone knows that.

Are you secretly working for a ETF manufacture? Do they pay you a trailer?

I’ve looked at an Andex chart and the truth is no one is ever invested for that long because they sell at the lows. Imagine an asset that wouldn’t let you do that?

Having a house represent 70% of your wealth isn’t bad because you have a place to live thats all that matters.

Thanks for proving every point I have ever made. I am in your debt. BTW, as an advisor I sell nothing and refuse commissions. — Garth

#15 TRT on 07.25.12 at 7:45 pm

Looks like Crsty Clarke picked a fight with the wrong ppl. Big Oil Boyz are going to lynch her with the BC Rail scandal thing!

#16 gokou3 on 07.25.12 at 7:46 pm

“There is always a stand-off period at the end of a housing bubble, when prospective buyers refuse to meet the price of sellers, who refuse to drop the asking price. Eventually it begins to dawn on sellers that the market has shifted and, as they become more desperate, they eventually agree to lower their asking price. But until that happens, any stagnation in prices can be misinterpreted as a successful soft landing.”

Priceless gem.

#17 Lurking Lola on 07.25.12 at 7:48 pm

Friends in Victoria are starting to list their houses. One couple has pulled theirs, since they couldn’t sell. If you can’t sell, your price is too high. It isn’t different here.

#18 deja view? on 07.25.12 at 7:48 pm

2 yrs?? It depends on how quickly you can forget.
I tried to sell a 35K 1st mortgage on a residential property in Nanaimo to an elderly rancher neighbour back in ’83.
I wanted to go boating. It was a 19%, 5 yr term.
His response.. “I don’t monkey with that stuff.”
Are you kidding me!
I guess he hadn’t yet gotten over the great depression.

#19 Timbo on 07.25.12 at 7:59 pm

great post Garth,

#7 pathcontrolmonk

Bad is good, slowness is speed, insolvency is wealth.

perfect! Can we print up some t-shirts and cards……

#20 Victoria Tea Party on 07.25.12 at 8:01 pm

#185 John (from Endorphins post)

Yes, that’s the end game, to co-ordinate.

That’s always the plan, that and One World Government and so on.

The problem (and this is actually a relief!) is that it won’t happen! It simply CAN’T!

Why?

Because these “leaders”, so-called, are not that at all. They’re idiots and, therefore, are out of ideas, and now out of time. They wear the mantles of power upon their sloping shoulders and they slouch to historic oblivion sure of only one thing. They know where they’re going to be lunching tomorrow with another stylish hi-priced hooker! Nooners until The Big Sunset, eh chaps?

WHEN THEY’RE NOT DOING LUNCH AND THE REST OF US

They spend their entires incompetent lives fixing their sights on their next elections so that they can stay on the gravy train, such that it is.

Remember, the way things are not turning out, there are no guarantees that this train can’t run off the tracks! Looks who’s driving it!

If these half-assed so-called representatives of the people, were so damned bright they would not have created then fallen headlong into this monetary/fiscal minefield they created in the first place!

REMEMBER YOU HISTORY

Remember August 1914; remember Sarajevo, the Marne, and the Somme, Verdun, Jutland, and Vimy Ridge.

The Guns of August indeed.

Well the booms you hear now are the world’s financial edifices, falling like dominos, one by one. When the dust settles, who’ll emerge to shovel together a new “Treaty of Versailles?”

Who’ll have been the enemy?

Who’ll have been the victor?

Who’ll give a damn?

It won’t matter!

Rubble City!

ONCE MORE WITH FEELING FROM ZONE TO ZONE

Just look at those well-turned out knobs who run the Eurozone, and then cast the eyes over to the implacable and sleazy Chinese Communists, then re-focus on the US so-called leadership. There, and to an elected man and woman at all levels of government there they are not ready to bring in the agonizing changes that are needed to refloat this beached beast of an economic disaster.

Why?

Because, in the US (and other trade-zones, too!) their mounting jobless hordes of constituents have been turned into welfare zombies, cackling, bitching and kvetching over how many food stamps they scored this month and how to get 12 year old cousin Freddy the Fruitcake onto disability insurance even though he just watches Batman TV reruns all day long then destroys the family cat.

No, John, our glorious leaders have pancaked the world’s economic system down to this: a former global economic borderless economic monster into a gradually unfolding provincial, trade-protected series of fiefdoms, kingdoms, and millions of hectares of slums, that used to be called “suburbia.”

You give these seedy crooked little people too much credit.

And then there’s the LIBOR scandal!

#21 ANONYMOUS on 07.25.12 at 8:04 pm

Prepare for another financial mess similar to 2008.

Watch this video, I think what he says pretty much explains the Canadian housing bubble, and of how people are buying WAY TOO MUCH, way beyond what they can afford.

Listen to this guy ( former White House official David Walker ) , he says that people can live beyond their means for only so long, and we are near the END of that length of time.

“Austerity” is what happens to you when you are broke, and America / Canada is broke.

http://www.ino.com/blog/2012/07/the-new-economic-collapse-video-it-makes-uncomfortable-but-urgent-viewing/

#22 Nostradamus Le Mad Vlad on 07.25.12 at 8:11 pm


Sea change is an apt headline for today, esp. with the UK economy in a tailspin (see link) and the Olympics ain’t over. The tide rises and falls. It’s on the way out now.

Good on Ms. Cleaver for asking advice. At least she’s open to change.

“Just hours after RBC economists made headlines claiming the only bubble in Toronto lives in Mayor Ford’s pants . . .” — Is this the epitome of dickwad?
*
#182 Victoria Tea Party on 07.25.12 at 6:13 pm — “Therefore, southern Ontario could be largely an economic wasteland by this Christmas.”
— and —
#185 John on 07.25.12 at 6:46 pm — “You don’t think this isn’t going to a “coordinated” effort? I’d say it is. That’s the idea. That’s the game.”

Both of you are right. See first few links.
*
Global Food Crisis Closer than we realize; 3:30 clip 1947 govt. clip says Gold is good money. Nixon thought otherwise; UK economy in a tailspin, the the Olympics haven’t even finished yet; Audit the Fed is a go, and 0:24 clip “Think Treasury Bonds are safe? Check out the facial reaction of Barack Obama’s top economic adviser, Austan Goolsbee, sitting next to former FED Chairman Alan Greenspan as he extols the virtues of federal counterfeiting.” wrh.com. This would go with the Audit the Fed victory today; 8:03 clip America’s wealthy continue to outsource jobs. Recovery? Hardly, plus and One in Four earn less than US$10 / hr.; UK, like BC will be wiped out after the Olympics, so bring on a FF to turn sheeples’ attention away; AA&SG Politico talk; 3:37 clip Germany in a brouhaha; Hedging Delta Airlines; 2012 US Numbers Figuratively speaking; World’s Governing Elite Trashing the middle class; Geithner is transparent? Methinx not; EZone is doomed The Salvation Army could have done a much better job at running this than these goons, and Euro’s a dead loss (but who’s gonna profit?); Walmart slave drivers; BoA Getting out of banking?
*
1:21 clip “Take a look at Josée Landry and Michel Beauchamp’s gorgeous front yard kitchen garden in Drummondville, Quebec. The cucumbers, tomatoes, zucchinis, beets, onions, and brussels sprouts and other vegetables grown by the couple helped Beauchamp lose 75 pounds, and Landry 25. The only problem? It’s illegal.”; Sixth Century Map “So Palestine was on the maps in the 6th century AD.” wrh.com. Somewhat earlier than Israel; Vitamin D scores another victory; Spring Cleaning of the Aquarian Age. Good description; The Obomba Hoax Hope and change has become a complete illusion; 24:21 clip Anti-Assad hysteria (west’s propaganda) heats up; Dunce Award (well deserved), goes to Shrill O’Reilly. Credit where credit is due. Not many can win this prestigious award one year in a row; CFR Globalists These are the jackasses who should be hung, drawn and quartered; Oterrorism Danish politicos have it right.

#23 eviee1973 on 07.25.12 at 8:13 pm

Took a look on mls.ca last week for NS my home province, everyone is still asking higher pricing, not just HRM, other area’s such as my home town of Truro. Here in Clagary it is getting errie, quiet and busy. One of my co-workers a 50 something native Albertan, knows to be uneasy, with all the booms and busts he has seen over the years. Me I could care less, I do not have a mortgage, and drive a nine year old Civic.

In actuality, today in Nova Scotia (population one million), 23 properties sold, 24 more were listed and 26 had price changes – all reduced. — Garth

#24 brainsail on 07.25.12 at 8:22 pm

Sea Change…

” an Australian term which describes a form of human migration that involves individuals abandoning city living in favour of a perceived ‘easier life’ in rural coastal communities”

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

#25 Smoking Man on 07.25.12 at 8:23 pm

Gartho
you make a compelling argument, hell if all I did was read I would be with you on this. But I observe things.

I hope I’m wrong your right, bubble heads need a break.
Grown to like some of the shit heads on here, even robo poster LaughingCON.

I unload my last condo last year, its 5% below what I sold, two years ago I unloaded two other properties. Miss timed that one, they really went up, and 4 years ago the family cottage. Timing is everything.

I wanted to leave this winter waste land and move to the Islands. Wife was in till I had one property to go and then the realization we are’t taking the brats.

I was so close.

Now I know you are feeling good these days, you finally have pocket aces, and one on the flop. Did you thank F, Vindication and the taste of victory on your lips, your critics and enemies are avoiding you, or attacking you

Now 70% own properties, the 30% on here rejoicing .

10 things you don’t see or want to see.

1 Harpo needs another term.
2 The herd (owners) are stubborn and patient.
3 The MSM machine follows orders.
4 rates will be going to basement and stay their for 10 years .
5 The sigma of being a renting dweller. It’s un Canadian. only low life’s rent.
6 17% gain in GTA in 4 years is nothing, the markets that tanked in USA doubled in about 18 months.
7 Woman rule men in this country
8 Job market is strong
9 folks that always get burnt in bidding wars will jump on the first persived deal
10 and most important Smoking Man Said so.

Don’t be surprised that some loony decides to chase the turn and the river hoping for flush to crush your aces.

Just saying

#26 Foggy on 07.25.12 at 8:26 pm

You would have had to be an adult around 1986 to see and absorb what a real estate run-up and crash (1989) looks like. That would put you in the age bracket of 45 yrs or older. Hence the majority of greater fools who don’t believe prices will decline significantly are younger than that. If I’ve never seen it on my watch – then it never happened.
Personally I can’t wait for all those crappy 14 ft wide old semis in Riverdale/Leslieville/Upper Beachs/Annex/whatever fall back to price points where they should be. At least 40% off of current. They are tired, old, wonky starter homes that need work and money to make livable. Nothing else….

#27 Saskatoon-Living on 07.25.12 at 8:48 pm

Phew! Glad you said it Garth “And the rest of the world thinks it’s just so damn amusing when people in Saskatoon nod and tell each other, “it’s different here.”’. I hear it all the time from people here in SK, that our economy is sooooo strong and house prices have been lagging the rest of the country forever, that’s why hosuing prices won’t decline. Too many Saskatoonian’s drinking the kool-aid!!! On a side note, that dog has the best dreads I’ve ever seen!!

#28 neo on 07.25.12 at 8:48 pm

Speaking of sea change…

Q4 Consensus Earnings Expectations…

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2012/07-2/20120725_Q4.png

Now other than Garth. Who thinks this will be possible?

#29 DonDWest on 07.25.12 at 8:50 pm

Halifax is starting to remind me of Winnipeg:

http://www.realtor.ca/propertyDetails.aspx?propertyId=12193458&PidKey=-1245652354

Anyone who has been a long-time resident in the HRM area should cringe to see such a listing. I know for a fact that the said developer is a foreigner who is completely clueless! He’s trying to sell multiple 200K 400 sq. ft. shitter boxes in what is arguably the street with the highest crime rate and homicide rate in all of Canada.

This is the bad section of Gottingen St. folks. There’s nothing but graffiti and closed up shops all around. The shops are closed because they’ve been constantly looted. I’m confused how they managed to build this condo at all. A quick look in Google maps shows what 2116 Gottingen was before her construction. Yes, that’s right, there’s no lot so to speak. She was built on a mould of dirt and a small handicapped parking lot. I’m sure that’s safe? It’s safe, don’t worry. . .

If the building doesn’t kill you from structural collapse, and if you don’t kill yourself from debt, have no fear because someone else will do it for you. There have been three homicides the past year within walking distance of this condo.

To add further insult to injury, just who are your neighbours to your left? Why none other than the welfare office for the province. And believe me, in this case for once the government did their jobs, and built a building were their clients primarily reside.

Of course, to someone who hasn’t lived in Halifax they probably think they’re buying a cheap ticket to a trendy area in the downtown.

I can just see a realtor trying to sell this closet space for 200K, telling you this is the best deal in town because it’s affordable in the downtown core. What you don’t see is a bullet proof vest neatly tucked away behind that illusionary suit. Heck, I wouldn’t risk selling this for a million dollars; and you couldn’t convince me to buy it for a single dollar!

#30 live within your means on 07.25.12 at 9:00 pm

Garth – I hope you, Dorothy & Bandit enjoy your place for more than a day or so in our beautiful province. I loved last evening’s rain & thunderstorm – we really needed it.

#31 Hurly on 07.25.12 at 9:03 pm

Live in Victoria. Newly wed nearly dead. Mostly almost dead now. Newly wed cant afford to live here. Not many jobs that can support people on the rock, unless you move to Sooke and have an osb box with a 40 min commute on a twisty 2 lane rd. Watch new listing sheet from realtor everyday. Seems like every house between 600 to 1 mill are going 40 grand below an already reduced price. Also seeing a lot of new listings at the 999,000 price. Must be that new CMHC rule. Sick of preaching the coming crash and having every one say the same lame lines……only so much land
Great place to retire
Everyone from the prairies are going to retire here
Blah blah

I bought my first place in 2000 as a 20 year old. With 10% down and an interest rate of 7%
A huge mortgage at the time…paid 74,000…..lol
I thought a mortgage of 74,000 was HUGE.
Now I work with lots of twenty year olds that have bought doghouses and condos and are mortgaged on average about 350,000. Crazy I say. They wouldn’t listen. Feel bad about their coming life lesson.

#32 Debtor's Prison on 07.25.12 at 9:07 pm

Watch this video, I think what he says pretty much explains the Canadian housing bubble, and of how people are buying WAY TOO MUCH, way beyond what they can afford.

“Austerity” is what happens to you when you are broke, and America / Canada is broke.

http://www.ino.com/blog/2012/07/the-new-economic-collapse-video-it-makes-uncomfortable-but-urgent-viewing/

#33 Cash&Carry on 07.25.12 at 9:10 pm

Does any of this matter if people can still borrow like nuts?

#34 Nemesis on 07.25.12 at 9:11 pm

You had me at, “…spat out the words…”…

I positively swoon when you begin a new column in the active voice!

No fear, GT… I’m not wearing ‘chaps’ and as you well know, only AmaZons will do…

#35 Yes, I admit on 07.25.12 at 9:18 pm

I provoked Garth in the past with my postings…sorry Garth, I didn’t know (I just learned from yesterday’s comment) that you are a god. Sorry again, never again I will be mocking you. Now I know you are right for sure and bubble popping is just a matter of time (which I hope you control). Sorry again Garth.

Wash my feet and we’ll talk about it. — Garth

#36 East Van on 07.25.12 at 9:19 pm

Garth, some analysts say that student loan lending practices in the US are the new sub-prime debacle. If you combine unrepayable student debt with youth unemployment and economice malaise, what do you think the future holds for housing in the US?

#37 Toon Town Boomer on 07.25.12 at 9:22 pm

And the rest of the world thinks it’s just so damn amusing when people in Saskatoon nod and tell each other, “it’s different here

Well Said!
So wake up Saskatoon buyers your getting riped off paying those ridiculously high home prices.

#38 X on 07.25.12 at 9:28 pm

re #15 – I hope you bought your condo in the candy or chocolate factory, then when you retire with 70% of your net worth in your property, you will be able to eat your home when you run out of money.

#39 woper_holic on 07.25.12 at 9:29 pm

Garth wrote:
Every single day the real estate industry lies to consumers, and media reports it.

——————————————————————–

Sounds a lot like the cancer and disease research industry. Scammers galore out there and there’s one born every minute as P.T. Barnum use to say.

#40 Took Garth's advice and bought in the States...you should too! on 07.25.12 at 9:47 pm

I’m in Whistler for a month vacation, its a vacation from my vacation, anyway talking with a lady at the pool who just bought a place in 2008 and paid $440,000 for a two bedroom condo. The very first thing she says is “I realize I will never get my money out of it, it rents for no where near what I need to cover the mortgage.”. When I heard that I thought you should put it up for sale, before its too late. Even in Whistler people are going to eat it.

#41 Investx on 07.25.12 at 9:48 pm

Great post.
The edge of the cliff is scary.

#42 Paully on 07.25.12 at 9:49 pm

With the crazy prices that SFH in Willowdale have been getting, I am still surprised that more people aren’t running screaming for the exits.

#43 PoorgEoisie on 07.25.12 at 10:05 pm

Good ol gottigen. After Halifax I moved to Ottawa, I lived in vanier a few times and a stint in lower town (the so called bad parts) now I live in TO off lansdowne and can honestly say that it is never as bad as people think… Unless it’s on gottigen.

#44 viorelli on 07.25.12 at 10:09 pm

A good friend of mine (retired oral surgeon), sold most of his holdings in vancouver with the exception of 1 bachelor suite condo in Lynn Valley (he is an addicted hiker). Properties sold: 1 house in Oakridge area = 2.3 mil, commercial building in Burnaby = 1.7 mil, and commercial residential mix type in east vancouver where he had his clinic (had 8 residential units and 3 commercial) = 3.5 mil. He says the returns are too low, commercial occupancy is in danger, and market will decline significantly. He purchased a 2008 built commercial residential mixed with 5 commercails (fully leased), and 26 residential, in centarl Phoenix for 2.2 mil after long negotiations. The monthly gross return before taxes (CRA and Arizona State), insurance, and property taxes / utilities is $ 47.000, he says he clears 18.000. In vancouver the return on 2.2 would be around 4.000, so its a no brainer that cash is moving offshore fast. Furthermore, one unit is kept vacant for him as he is in Phoenix 6 months and 6 in vancouver. Smart ones had already cashed out this winter, the market is pretty much toast in Vancouver and the island

#45 Al on 07.25.12 at 10:15 pm

The CBC news in Calgary led with a story about how hot million plus homes are. Sure for the elite there has been a few good years of bonuses. Now average people are admitting a small decline might happen but surely not like Vancouver or Toronto.
Read on BNN today that the oil sands operators are doing a much better job at lowering labour costs and pacing out construction.
Oil companies are not reporting profits with natural gas prices dismal and oil shaky. Every week someone else is let go. I am glad I have been banking my cash, when the boom so fragile it can bust. With the US production way up there is now talk of another Bakken find in the NWT.
I just might bring my cash to BC sooner than I thought. Calgary is sunny but the locals are not going to be happy with a bust world.

#46 Onemorething on 07.25.12 at 10:23 pm

The Money always returns home!

Asian RE money entering Canada was never the issue to drive the market, the bid ups and raising the bar on prices were. They overspent and now will take whatever they can a leave.

Westerners never went through the Asian financial crisis so few when fishing rarely if ever will cut bait in time.

Latest transactions shape the market to the upside and down!

#47 Smoking Man on 07.25.12 at 10:27 pm

#13 Realistic realtor GTA on 07.25.12 at 7:42 pm
I see it here in Toronto. Sellers saying they Expect 10% more than the previous sale on the street otherwise they are not selling. Their next sentence says they need that money to live for retirement so they can’t sell for less. Sellers are now being greedy. My buyers have had it. If it is a multiple offer night don’t even bother showing it to them. We will see how long this impass lasts.
……………………………………………………………

Nope
Your a bubble head pretending to be a Realtor
kind of like me:)

A Genius pretending to be an idiot.

#48 John on 07.25.12 at 10:28 pm

There are no veterans of this situation.

Further, 2008 contained the phrase “yes we can”. Public sentiment is much much different than back then. Could Obama be given a Nobel Peace Prize today? Some people are vocal about the obviously changed paradigm. Most aren’t saying anything. But everyone is aware of the “being in extra innings” feeling.

On a more practical note, comparing the “2008 crash that ate the US middle class” to the dynamics of today isn’t accurate. The 2008 crash to now includes QE and massive money printing. Hell, the Federal Reserve could buy office funiture, Greek bonds..whatever…and spit out dollars.

That makes 2008 a “psuedo crash”. Even so, real estate tanked 32% in the US. That’s with massive injections of liquidity…and don’t forget food stamps. Without those? The government couldn’t hide the effects of their speculative partners ( banks-corporations). It would be clear that the dirty 30’s style is back. Food stamps hide that.

What about Canada? That depends in large part on commodities ( let’s pretend debt can go forward 15 more years)…China has even built a ghost city in Angola
(oil base), emblematic of their “endless growth strategy”…a copy of the banking cartel-western government model. There might be an upper limit on ghost city construction. Maybe even a “bit of a dip” due to Europe? China not exporting, or not exporting near as much. How does that impact the world economy? Housing?

And all the rest…

Present a guy who says he’s a veteran of Canadian real estate, applying his “assessment” of things to today, and
you’re definitely talking to someone who isn’t considering the above factors. The above realities.

There are no veterans of today’s real eatate reality…or more accurately…today’s global reality.

#49 This is Wonderland on 07.25.12 at 10:30 pm

Garth – She called me yesterday to ask for advice. This is progress.

—————————————————————-

Really? You’re going to leave us hanging like that. AAUGH!

#50 BigAl (Original) on 07.25.12 at 10:33 pm

I would have thought that everything that can be said about a housing bubble would apply to corporate earnings and the stock market as well. But the U.S. example shows that the two can diverge.
Was this divergence caused by the money people saved defaulting on mortgages and saying “buzz off” to all their creditors (since their credit rating is ruined anyways) in the U.S., which then allowed them to run out and buy iphones and new cars and spend wildly in all other sectors of the economy? That might make sense assuming that those doing this spending are the fortunate employed Americans, and the high unemployment rate is caused by increased offshoring of American jobs.

But there is that other nagging factor which is government stimulus and Fed easing on a massive unprecedented scale. Equities apologists will dismiss this entirely, calling it a non-factor, and never wanting to discuss this meaningfully. In this sense they don’t sound, to me, any different than the realtors or their shady number-pumping friends in CREA and similar organizations that refuse to address the housing bubble.

#51 Smoking Man on 07.25.12 at 10:33 pm

#37 Yes, I admit on 07.25.12 at 9:18 pm
I provoked Garth in the past with my postings…sorry Garth, I didn’t know (I just learned from yesterday’s comment) that you are a god. Sorry again, never again I will be mocking you. Now I know you are right for sure and bubble popping is just a matter of time (which I hope you control). Sorry again Garth.

Wash my feet and we’ll talk about it. — Garth
………………………………………………..

yes into the wine:)

Hero worshp OMG “Yes I Admit it”

Why do people on here lack self esteem.

I would have more respect for you if you said or your name was “Yes I admit it I Rock” everyone else sucks.

So much work to do with you bubble heads

#52 Wpg Murder Capital on 07.25.12 at 10:36 pm

Look how hot the market is in wpg.

Asking $385,900 sold for $3,900,000 (obviously a typo), but you get the picture.

http://comfree.com/2-storey-for-sale-eaglemere-manitoba-344684

#53 Smoking Man on 07.25.12 at 10:39 pm

Where is beach girl, she finally get a man?

#54 Canadian Watchdog on 07.25.12 at 10:48 pm

TREB Average and Median Prices By Area/District. Q1/Q2

https://docs.google.com/open?id=0ByrPFSoPLahJMlBjaVhndUcxRDg

This data was compiled electronically so if you wish to confirm the numbers refer to TREB’s regional reports here. http://www.torontorealestateboard.com/market_news/market_watch/index.htm

——————–

As a side note: here’s an example of how average prices are being boosted by properties not even built.

Unionville up 51% Q/Q: http://postimage.org/image/6lq6qcohn/

Pre-Cons: http://www.buzzbuzzhome.com/listview/43.86913699999999/-79.30917199999999/list?loc=Unionville%2C%20Markham%2C%20ON%2C%20Canada&zoom=13

As they say: “The best place to hide something is to put it in plain sight.”

#55 Took Garth's advice and bought in the States...you should too! on 07.25.12 at 11:03 pm

Also at the pool another fellow I met was from Montreal, Guy, was his name.

He bought a distressed 153 unit condo complex in Clearwater, FL, right on the beach. He owns many comercial buildings in Canada right now.

He put a investor group together and bought the entire complex in Florida for just over 3 million.

I asked him if he would buy anthing in Canada right now his answer … not a chance, his very words ” we’re entering a deflationary real estate market here” Just confirms what I knew. I saw this in the States, remember its downturn is now in its 7th year…Canada’s turn is coming.

#56 coastal on 07.25.12 at 11:06 pm

“Every single day the real estate industry lies to consumers, and media reports it. Sellers are lulled into believing the bull market’s eternal. ”

You got that right Garth, I’ve read more realtor bullshit in the Victoria media and house blogs that would overflow V-town’s antiquated sewage system. Oh right,speaking of, the new sewage system will add about $800 plus to the average property owner, and when rapid transit comes on the heels of that it, you can double that. Can’t forget to toss in the new bridge predictable cost overruns too.

But have no fear Garth, the agents “in the know” say all the buyers are well off government and military types. Funny how those two groups who have had zero wage increases in years are the ones labeled as “well off”. Makes one want to go buy a condo spec cause no one loses on condos in Victoria, right ?

#57 Mr Buyer on 07.25.12 at 11:06 pm

I would like to say that while the end and crashing of a bubble looks like past cycles a little bit. That is the extent of it as it is an entirely different beast and nobody selling real estate or making future assessments has seen this in Canada before and they will never see it again. On top of that most of them may not live long enough to see it come to an end. I suspect that America will not fully recover for decades (barring unforeseen technical innovations). Japan has had a host of false starts or bottoms that quickly passed only to see the slide downwards continue. WE HAVE NEVER BEFORE SEEN WHAT IS COMING. Our cousins to the south understand all to well but we refuse to believe we are anything like them (and maybe we are not). Bubbles, on the other hand, are incredibly simple life forms with very rudimentary and predictable life cycles. Each species of bubbles are for the most part identical to one another. The only unknown here is government intervention. There still remains the possibility that the government turns the taps back on for a period in an attempt to bring about the fabled soft landing but that will simply result in a bear trap followed by the return to the march downward. The horrendous level of propaganda surely must be approaching criminality. It seems every dogma resorts to flat out propaganda at some point or another. Are we to simply shrug our shoulders and nod knowingly to one another and allow so called suckers to be duped on such scale? That is just the way it is? This coming period of time is a huge opportunity to institute needed changes and bring accountability to the fore. This dispersion of responsibility has left absolutely everyone feeling relieved of said responsibility. Surely there are laws on the books put in place long ago to deal with snake oil salesmen of the time. The right politician saying the right things with true intent and following it up with action could secure decades of rule at this juncture. We are soon sliding into ‘it can not get much worse territory” which is a horror for those devastated by it but also is fertile ground for big change. All the best to everyone.

#58 Mr Buyer on 07.25.12 at 11:11 pm

#53 Smoking Man on 07.25.12 at 10:33 pm

yes into the wine:)

Hero worshp OMG “Yes I Admit it”

Why do people on here lack self esteem.

I would have more respect for you if you said or your name was “Yes I admit it I Rock” everyone else sucks.

So much work to do with you bubble heads
………………………………………………………..
Hey Smoking man, did you hear the news. TO is on fire man. You called it alright.

#59 Mr Buyer on 07.25.12 at 11:12 pm

#53 Smoking Man on 07.25.12 at 10:33 pm
……………………………………………………….
Hey man I am going all in with a 10 high, how about you?

#60 Mr Buyer on 07.25.12 at 11:15 pm

#53 Smoking Man on 07.25.12 at 10:33 pm
……………………………………………..
Didn’t I read somewhere in Hoyle’s that like a 10 high in hearts beats out a 10 high in clubs or am I just reading to much into things?
Did I mention that TO is on fire?

#61 Mr Buyer on 07.25.12 at 11:16 pm

Math, we don’t need no stinking math (or spelling, or grammar or anything)

#62 Mr Buyer on 07.25.12 at 11:21 pm

I have been trying to plow my way through a basic review of math and I can not keep my eyes open (and I have done the material in the past). There has to be a better way to learn and teach this critical body of knowledge. Videos are a quantum leap forward but they are putting me to sleep as well, just a little slower. I WILL PLOW MY WAY THROUGH, I WILL PLOW MY WAY THROUGH, i will plow my way through, i wizzzzzzzzzzzzzzzzzzzz…

#63 Mr Buyer on 07.25.12 at 11:36 pm

To infinity and beyond…what is that? there is nothing beyond infinity. it is infinity, it is infinite not unlike the rise in value of Canadian houses. Houses last an infinite amount of time and rise both steadily and sharply over that infinite period of time. Even if a shoddy builder constructs a house that lasts slightly less than the prescribed infinite amount of time, the infinite rise in the value of the property the house sits on will offset the loss in value due to the house falling down. I should point out in passing that the infinite rise in house prices does logically bring with it an infinite rise in interest payments to banking entities as nobody has an infinite supply of money and thus are obligated to borrow money to buy a house (apparently houses are luxury items in Canada despite the -40 degree weather purported to hit the country from time to time but these reports are from green types and have been largely discounted by ring studies carried out on wall studs of infinitely old houses presently being sold for infinite profits). In any event the infinite rise in costs associated with interest payments can be passed along to future buyers for an infinite period of time.

#64 BigAl (Original) on 07.25.12 at 11:43 pm

Record Dividends Great for Investors? Think Again

-Rising dividends can just be a way of keeping shareholders quiet when they might otherwise become unhappy about the way a company is performing.

-The pay of CEOs and senior managers is often linked to the share price, and the only real way of getting that up in the short-term is to lift the dividend.

-Rising dividends may well indicate that companies are not investing in the future. They should be creating new products and tackling new markets.

“It suggests that many managers have looked at the prospects for their business and decided not to spend any money on new shops, factories or warehouses. And that tells us that this depression will drag on and on, because it is only once companies start investing strongly again that the economy will genuinely recover. “

#65 Grim Reaper/Crypt Speculator on 07.25.12 at 11:51 pm

It is different in Saskacartoon

When I was one year old….I saw my dog running away…..I am now 14 and can still see it running

If that isn’t BPOE what is

#66 Grim Reaper/Crypt Speculator on 07.25.12 at 11:59 pm

Wash my feet and we’ll talk about it. — Garth

Smoking Man : That’s a polite way of saying kiss my @ss

#67 thinker on 07.26.12 at 12:00 am

Garth, your graph is missing the most important line. In spite of listings raising and sales dropping, PRICES in that whole time series have been RAISING, except for that small dip in the GFC. Don’t think you can show that graph and have an “aha” moment my friend. In fact, it shows the opposite of what you are trying to get across. STALE markets don’t result in crashing prices.

Let’s do our homework please before we recycle these graphs. You are excellent at bringing the personal stories, you don’t want to end up like that fool Ben Radioux who has posted nothing but graphs for years and try to claim he knows the market to only bow his head in shame. His blog is dead. Not sure why he even has a voice.

#68 Nostradamus Le Mad Vlad on 07.26.12 at 12:32 am


#48 Onemorething — “The Money always returns home!” — Is that ever true, esp. with a link in the second para., which says that out of the top 15 cities in the world, Toronto is #15 while Vancouver doesn’t get a mention.
*
Ford and Pepsi Profits sink; New Jobs A tax break had something to do with this; Osborne Wonder if the same method could be used for H and F? UK slump longest recorded; Pound tanks; Weimar time? Exit Spain? Old King Obomba Killing coal so he can bring his green projects in; IMF and China Says China has managed a soft landing; Japan Record trade deficits; Big US companies outsourcing profits; 14:24 audio clip Disaster economics; 35:16 clip The Four Musketeers? Not quite; Gorging on too much debt; To buy or not to buy – That is the question.

Food Price Surge while bank acts. wither; Blnrs. may win Estate tax stuff; US$31 trillion held in offshore accts.; 30:43 clip Debt supercycle; RE Most Expensive Cities Toronto is 15th, Vancouver doesn’t even rate; Garth Different view on rates; Robert Shiller’s Bubbles; Trimming Bank Fees.
*
66 Things gown in containers; ObummerCare All US citizens to receive an implanted chip by 2013? Exercise Just looking at Madonna tires me; Bacon Pudding Yes! At least one country (plus me) appreciates the savory, nutritionally-charged crunchiness of fried bacon; CIA, Drugs and Assassins Blackwater covers the whole gamut; Obomba’s Six Pointed Plan for global war, along with the UN and Agenda 21; Exorcist-in-ttraining So far, three exorcisms per day. Links in; Singapore Futuristic building.

#69 Pat on 07.26.12 at 12:41 am

#32 live within your means:
“Garth – I hope you, Dorothy & Bandit enjoy…”

Who is Bandit? Garth’s son?

#70 where do you get this stuff from? on 07.26.12 at 12:42 am

Just hours after RBC economists made headlines claiming the only bubble in Toronto lives in Mayor Ford’s pants

Pure gold Garth.

#71 eagle eyes on 07.26.12 at 12:55 am

That is the most disgusting picture ever. I can’t even look at it without cringing.

#72 kiki on 07.26.12 at 1:04 am

In the past 3 years I’ve lived in Vancouver, Yellowknife, and Saskatoon; and have many friends in Calgary. They ALL repeat their mantra of “it’s different here”. *sigh*

#73 Questioning Calgary stats on 07.26.12 at 4:30 am

#6 Cory

Are you aware of the recent mortgage rule changes? There are more on the way.

Fewer mortgages and less money per mortgage means lower house prices for Calgary.

House prices in Calgary will drop dramatically over the next 1 to 2 years.

Back in 2008-2009, Calgary house prices crashed about 20% within a year. The crash would have continued if it wasn’t for a massive, unprecedented intervention by the government. Interest rates were dropped down to emergency levels as well.

This time there will be no intervention to stop the crash in the Calgary RE market.

CALGARY BUYERS BEWARE!!

Do not buy a house right now. Wait for prices to drop a lot over the next 1 to 2 years. You will thank yourself.

#74 Devore on 07.26.12 at 5:06 am

Back from the Best Place On Earth(tm), ie Kelowna, well, Penticton actually, way nicer beaches and wineries, from my annual sun pilgrimage, and pretty much same story as last year. (Although I would have had no problem finding accommodations on the spot, unlike last year when everything was booked solid.) Whatever you’re looking for, condo, SFH, mansion, waterfront, secluded, central, retail, commercial, farm, land, orchard, vineyard, winery, it’s all for sale, lots of it, and probably has been for a year or more, so bring your offer.

For sale signs sprouting everywhere, some so old they’re barely readable.

But that’s all common knowledge (right?) and not that exciting. What is interesting though, is that on top of the stupendous official inventory in OK-Mainline, there are for sale by owner signs in quantities I have not seen anywhere, not even close. Well, I’m sure they’re all just testing the waters and won’t be giving it away.

#75 Devore on 07.26.12 at 5:37 am

The spitting match between vendors and purchasers in a weakening market always looks inconclusive. But there’s always one outcome. The buyers win.

It ends this way, because buyers have what sellers want: money. Whether it’s bread, cars, doohickeys or houses, money is the most marketeable and liquid commodity that is always in demand. At all times it is buyers that hold the hammer, although they do seem to forget it sometimes.

#76 Stupesing in Cabbagetown on 07.26.12 at 6:50 am

#8 Timing. I agree with you. Those angry young men with guns were little boys when the Mike Harris government cut their mothers’ welfare payments by 25% and cut after school programs, music programs, sports programs and subsidized daycare. Today we are experiencing the consequences of those cuts. It’s a much scarier Toronto and it costs a lot more taxpayer money to put an adult in jail than to put a kid in baseball.

#77 notsofoggy on 07.26.12 at 7:05 am

Garth – sounds like you may be down on the south shore of our beautiful province…. any plans to have a little RE forum while here?? Lunenburg perhaps?

I am traveling incognito. Dressed as a realtor. — Garth

#78 MarcFromOttawa on 07.26.12 at 7:44 am

Does the Rasta dog in the picture belong to those laid back RBC economists?

#79 jess on 07.26.12 at 7:48 am

23 ANONYMOUS
david walker from the OCC … where was his agency regulatory oversight ?

…”The PSI report is also critical of the role played by HSBC’s regulator, the Office of the Comptroller of the Currency (OCC). The regulator failed to use either formal or informal enforcement actions to compel improvements in HSBC’s compliance program, despite mounting evidence of HSBC’s failings.

In addition to the Senate, HSBC is under investigation by the U.S. Department of Justice, NY County District Attorney’s Office, Office of Foreign Assets Control, Federal Reserve, Office of the Comptroller of the Currency and the Internal Revenue Service, according to an SEC filing. According to one report, HSBC may be facing a fine of up to $1 billion.”

http://www.globalwitness.org/library/%E2%80%9Cworld%E2%80%99s-favorite-bank%E2%80%9D-hsbc-%E2%80%9Cleft-us-vulnerable-dirty-money%E2%80%9D

#80 Steven Rowlandson on 07.26.12 at 8:25 am

There can be no soft landing for Canada’s real estate market as wage rates are not high enough to allow a working man to live in Canada. Based on the existing average house prices wage rates would have to be between $50 and $ 60 per hour and 2000 hours per year for a working man to safely buy a home and live at the same time. Canada’s real estate market has a very big drop from high heights coming and there will be no soft landing for real estate cultists and their fellow travellers . The false gods of government and the market have over played their hand and will be found wanting and the same goes for their followers.

#81 just learning on 07.26.12 at 8:52 am

Can anybody here point to some evidence of decreasing prices in Greater Montreal? Is it just Vancouver crashing…? (it should not be “different” anywhere, but we all like some stats, some evidence)

Thank you all. Great post again Garth. The “killer graphic” was what I loved the most.

#82 Luc on 07.26.12 at 8:56 am

In Ottawa prices have gown up 24% in last 6 years according to a study by Impact (don’t know them). So the city of Ottawa will increase property taxes according to the increased value of your home proportionally (whatever they want I guess).

Check it out at…

http://www.cfra.com/?cat=1&nid=87590

If prices go down, will they cut our property taxes?

Do you think this whole price valuation is a tax grab?

#83 bigrider on 07.26.12 at 8:58 am

REAL ESTATE IS GOD !!!

FINANCIAL MARKETS ARE EVIL !!!!!

Brad Lamb is our financial saviour.

Garth is the great temptor in the garden of Eden.

#84 Luc on 07.26.12 at 8:59 am

made an error on Ottawa study it’s in the last 4 years for a 6% increase

#85 Tom from Mississauga on 07.26.12 at 9:06 am

Well even if the seller gets the buyer to go at their price they still have to get financed. I’d come down 7% to get more showings and 4% more to meet my buyer and now have conditional sale. Hopefully THIS one can get financing. By the way, at Square One there are no showings taking place at all. Nothing. My agent took a call from a listing he has there when we meet last night. Holy shouting match.

#86 Theguyfromthecorner on 07.26.12 at 9:11 am

Here from the La Presse newspaper in Montreal. The fear of over contruction of condos building in Montreal is now a reality….
http://affaires.lapresse.ca/economie/immobilier/201207/26/01-4559537-condos-risque-de-surconstruction-a-montreal.php

Yeap, it is everywhere…..

#87 Lee on 07.26.12 at 9:18 am

RBC economists made headlines claiming the only bubble in Toronto lives in Mayor Ford’s pants.

LoL, you wake me up.

#88 Sparky on 07.26.12 at 9:28 am

#25 – eviee1973

Took a look on mls.ca last week for NS my home province, everyone is still asking higher pricing, not just HRM, other area’s such as my home town of Truro. Here in Clagary it is getting errie, quiet and busy. One of my co-workers a 50 something native Albertan, knows to be uneasy, with all the booms and busts he has seen over the years. Me I could care less, I do not have a mortgage, and drive a nine year old Civic.

In actuality, today in Nova Scotia (population one million), 23 properties sold, 24 more were listed and 26 had price changes – all reduced. — Garth

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

MLS was down most of the day yesterday for NS. The numbers are usually much worse then that.
Typically:
– 50 to 125 new (or repeat) listings
– 30 to 50 sold
– 50 to 100 price changes

Almost ALL price changes are reductions. One or two are increases. The increases ONLY seem to be by developers??? Any insight on why the developers are increasing their pricing? I assume they are trying to prop up the market? Gareth?

#89 Kenny Banya on 07.26.12 at 9:30 am

Can the bubble hurry up and bust already?!

I am looking at beloved daily “homes sold” email summary for my neighborhood… let’s see what to do we have today… ?

– 4 br by the waterfront, $1.25m, standard
– ugly house with the basement under the bedroom (extremely unhealthy) $800k
– 900 sq ft micro-house in “name” area, $700k
– small run-down semi, $650k
– generic crappy reno, $36k over asking

etc etc

Number of houses sold for under half a million: zero

I realize it is going to take a while for sellers to get the picture, and there are a few encouraging signs here (e.g. some of these houses have been on the market for months, indicating a lack of enthusiasm to say the least).

But god, another 2+ years of this…?

#90 In Garth Not God We Trust on 07.26.12 at 9:33 am

#84 Big Rider

REAL ESTATE IS GOD !!!

“FINANCIAL MARKETS ARE EVIL !!!!!
Brad Lamb is our financial saviour.
Garth is the great temptor in the garden of Eden.”

If I was you Big Rider I would be on the look out for a lightning bolt hitting you after these blasphemous words! You are playing with fire cowboy and I think a humble prostration before the all knowing, all wise, all seeing, financial prognosticator without equal, former parliamentarian and minister of national revenues, financial tea leaf reader extraordinaire, denouncer of parliamentarian peckerheads and peckerettes, lone voice of reason crying out in thr financial HELOC infested wasteland of Canada, the ALMIGHTY GARTH is in order. Good luck!

#91 Timbo on 07.26.12 at 9:50 am

http://thestockmarketwatch.com/news.aspx?articleid=530255#.UBFHwfX-WHM

“In the week ending July 21, the advance figure for seasonally adjusted initial claims was 353,000, a decrease of 35,000 from the previous week’s revised figure of 388,000. (Revised up from 386,000). The 4-week moving average was 367,250, a decrease of 8,750 from the previous week’s revised average of 376,000.”

Yahoo!, I see light at the end of the tunnel.
Lets go shopping………

http://www.bloomberg.com/news/2012-07-26/u-s-durable-goods-orders-rose-1-6-in-june-on-aircraft-demand.html

“Orders for non-defense capital goods excluding aircraft dropped 1.4 percent after a 2.7 percent rise in the prior month. The median projection in the Bloomberg survey called for a 0.1 percent increase.

Demand for computers and communications equipment slumped 4.9 percent last month, while orders for machinery dropped 1.1 percent. ”

cough,sputter………..

#92 The American on 07.26.12 at 9:57 am

“Capital Economics is sticking with its prediction of a withering 25% dump for Canadian real estate values over the next two years – not a whole lot off the 32% correction which ate the US middle class.”

My question is what is Capital Economics prediction for Canadian real estate over the next 5-6 years. Their prediction is a 25% price correction over the next two years. Have the delved deeper/longer in their predictions?

#93 Stanley on 07.26.12 at 10:02 am

Garth,

Would like to ask you a simple question? In this rough period, how can I generate 5% return every year?

Stanley

Pay attention. Income-producing assets have been detailed here often. — Garth

#94 John on 07.26.12 at 10:35 am

Kenny Banya wrote:

I realize it is going to take a while for sellers to get the picture, and there are a few encouraging signs here (e.g. some of these houses have been on the market for months, indicating a lack of enthusiasm to say the least).

But god, another 2+ years of this…?”
——–

The bigger problem with your question is the box…the one you’re putting the real estate bubble in.

China: Manufacturing
U.S.: Services
Emerging markets: Current and uncertain growth source
Europe: Underwater
Reactivity of “markets”: War-conflict as a distraction

Add it all up…how do you feel about commodities?

How do commodity dynamics impact real estate in Toronto?

And that’s not even mentioning the formerly “doomer” topics of debt, derivatives, interest rate manipulation and phony precious metals pricing.

Maybe you need to study on your own for a while…to avoid being manipulated by sources, groups or individuals that want to hide the context.

Lots of info out there.

#95 The Crunge on 07.26.12 at 10:44 am

ETFs! ETFs! ETFs! Name a few money makers now!!! I’ve been looking at GAS:TSX. It’s a natural gas ETF duhhh. Thoughts on that.

#96 Steve on 07.26.12 at 10:46 am

23% is three times the inflation rate?

Where are these unofficial statistics coming from? This would mean that the inflation rate is over 7%

Over three years. — Garth

#97 torontorocks on 07.26.12 at 10:49 am

#95 Stanley – its not hard. Listen, I’m probably averaging an annualized payout of about 8-9% pre tax on my ETF’s, and these are a combination of fixed income, reits, index and am now moving into some sector specific ones. the overall portfolio is down 5%, that’s all yet I’m still spinning off pretty good pre-tax coin. go to ishares.com and see. there are a few that I’m in XRE, CBO, CYH, XIN, XSP. check it out.

#98 The American on 07.26.12 at 10:50 am

Greater Vancouver has a population of 2,313,000 and a city population of 603,000, with listings at about 18,200.

Only 140 miles to the Sough lies Seattle. Greater Seattle has a population of 3,500,000 and a city population of 621,000, with listings of about 6,500.

So, here is Seattle with a similar setting, relatively close in proximity to Vancouver, with a metro population that is 51% larger than Vancouver’s, and a city population that is 3% higher than Vancouver’s. Seattle’s Gross Metropolitan Product exceeds $242 BILLION. The Seattle GMP is roughly the same as Israel and Hong Kong (yep, it is true), and larger than many other entire country’s GMPs, including Portugal, Chile, Egypt, The Philippines, Ireland, Czech Republic, Romania, Peru, Qatar, Ukraine, New Zealand, Hungary, Vietnam, Bangladesh, Morocco, Puerto Rico, Slovakia, Cuba, Oman, Sudan, Ecuador, Croatia, Azerbaijan, Luxembourg, Belarus, Sri Lanka, Syria, and the Dominican Republic.

Vancouver’s GMP is $95 Billion, or Seattle’s is over 2.5 times the size of Vancouver’s.

The GMP for a city, combined with its population, and GDP/GMP per capita is often a good indicator of long-term strength and sustainability in real estate values. Now, you do the math. Its a crash, not a soft landing, for Vancouver.

#99 IM in C on 07.26.12 at 10:57 am

#12 TO Bubble boy

Like they say -location location!
Having said that, it appears from the pictures that the house is vacant, yet some things are left behind, such as pictures, lawn furnature and washer dryer. When looking at listings , I always look for stuff like that. Probably a forclosure. Could be something else. Do your due diligence! Oh, and check out the yearly prperty tax, almost $7000/ year

#100 Canadian Watchdog on 07.26.12 at 11:06 am

Continuation from post #56

Markham, district of Unionville median home prices up 51% q/q: Pre-construction area

Mississuaga, district of Creditview median home homes price up 18% q/q: Pre-construction area

Newmarket, district of Stonehaven median home prices up 29.8% q/q: Pre-construction area

Richmond Hill, district of Langstaff median home prices up 44% q/q: Pre-construction area

Brampton South median home prices up 28% q/q: Pre-construction area

You want to know what’s been driving prices aside from bidding wars, there it is, future sales pulled forward into current statistics.

#101 bigrider on 07.26.12 at 11:23 am

#95 Stanley- “How to generate 5% a year.”

Start booking sports bets with your friends and associates, just make sure you take an equal amount of bets on both teams playing and charge a 10% vig on losing bets.

Presto, 5% , not only per year, but per game!

#102 bigrider on 07.26.12 at 11:33 am

Stanley-” How to generate 5% a year”

Option two Stanley is to invest your money in a colon cleansing/hydration machine.

5% a month is the norm on average. Do your own DD on this one for sure as some of the requirements of success here will require some rather unpleasant inputs from you the investor, but nonetheless a viable investment option.

#103 Interesting Times on 07.26.12 at 11:35 am

Toronto West End:
Absolutely Gorgeous Bright & Spacious 3 Bedroom Detached Home Located In A Convenient High Demand Neighbourhood With A Huge Frontage. Thousands Spent On Upgrades.

June 6: $479,000
June 15: $469,000
June 26: $465,000
July 12: $455,000
July 20: $449,000
July 16: $435,000

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12045392&PidKey=224772889

Oh, by the way, did they mention that it backs onto Highway 427??

#104 mousey on 07.26.12 at 11:39 am

Garth,
Can you please comment on the Stockton interview. The fellow sure seemed to know what he was talking about, but it was all USA focussed. Your thoughts?

#105 neo on 07.26.12 at 11:49 am

#94The American

The problem is they first came out with that 25% decline comment two years ago. So technically it has already been two years.

#106 Aussie Roy on 07.26.12 at 11:49 am

A Chat with Mish

“A key geopolitical risk in the long-term is that China cannot continue at its expected rate of growth. For years, the mantra has been “China, China, China,” and many thought China could maintain its 8% to 10% per year growth going forward. That’s not going to happen”.

“I agree with Michael Pettis at China Financial Markets, that China is more likely to see 2% growth than 8% or even 6% growth over the next decade”.

“For example, a Chinese slow-down towards consumption would increase the value of the renminbi, would decrease their exports, would help the balance of trade between China and the United States and Europe, and would put intense pressure on commodity prices. In turn, asset prices and currencies of the commodity producing countries, like Australia, Brazil, and Canada will come under heavy pressure”.

http://globaleconomicanalysis.blogspot.com.au/2012/07/is-global-trade-about-to-collapse-where.html

#107 MoneyMyHoney on 07.26.12 at 11:52 am

Says Capital’s David Madani: “There is always a….withering 25% dump …….”

David Madani said the same (15% to 25% correction) in early 2011 (Jan. or Feb.). Instead the prices went up. This is a person who forgot to take into consideration the ill effects of cheap $$s and what it can do to the economy. Now, he is recycling his 1.5 year old prediction.

Please let David Madani know that the correction, in the 2 year span that he is talking about, will be much greater than the measly 25% he is recycling. Again, as we go past May 2013, the phase will be accelerated and the results may be comparable to noroviruses causing viral gastroenteritis in humans.

Oh the stench..

#108 REAL ESTATE: When Markets are in NEUTRAL…prior to the C-O-L-L-A-P-S-E From Greater Fool blog | on 07.26.12 at 12:20 pm

[…] realtors like John will probably survive. Newbies like Mary Cleaver in Vancouver could be crushed. (You may recall I wrote about her on the weekend, and posted her infuriating […]

#109 If you don't buy it...No one will on 07.26.12 at 12:23 pm

Interesting Times on 07.26.12 at 11:35 am Toronto West End:
Absolutely Gorgeous Bright & Spacious 3 Bedroom Detached Home Located In A Convenient High Demand Neighbourhood With A Huge Frontage. Thousands Spent On Upgrades.

June 6: $479,000
June 15: $469,000
June 26: $465,000
July 12: $455,000
July 20: $449,000
July 16: $435,000

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12045392&PidKey=224772889

Oh, by the way, did they mention that it backs onto Highway 427??
———————————————————-

This house just lost $44,000.00 in under two months as the GTA housing crash picks up speed. Seller are on the brink of going bankrupt and need to sell. If buyes continue to wait they could pick this house up next year for $200-225K easy. By then it could be a Power of Sale . Imagine the price drop next month?

#110 zeeman1 on 07.26.12 at 12:24 pm

#78 Stupesing in Cabbagetown.

Harris didn’t cut after school programs, the Teachers did as a means of protest against only having education budgets raised by a few hundred million/year during the Harris years.

Amazing how 8 years of caving in to all of their financial demands didn’t bring those programs back, isn’t it?

#111 Uni on 07.26.12 at 12:49 pm

That graph is missing a year

#112 DogBreederExpert on 07.26.12 at 1:01 pm

That wonderful animal depicted at the top of today’s blog is a Hungarian Puli:

http://www.infopuli.com/

#113 jess on 07.26.12 at 1:02 pm

those X capitalists seem to be transforming into _____ ? e.g. “the king of capital,” sandy weil (http://www.amazon.com/King-Capital-Sandy-Making-Citigroup/dp/0471477486)

Sandy Weill’s surprising conversion
July 25 – Richard Beales and Breakingviews columnists discuss how the Citigroup architect’s new belief in Glass-Steagall reflects calls for bank breakups across the political spectrum.Video

rhymes

Nicknamed “Sunshine Charley”, Mitchell was elected president of National City Bank (now Citibank) in 1921, and in 1929 was appointed chairman. Also in 1921, he was elected president of National City Company, which became the largest security issuing entity in the world. Under his leadership, the bank expanded rapidly and by 1930 had 100 branches in 23 countries outside the United States. His salesmen sold millions of shares in the bank totaling $650 million, much of which would be lost in the Crash of 1929. Indeed, while the Federal Reserve Bank was attempting to curb speculation earlier in 1929, Mitchell flaunted a $25 million advance to traders.

Mitchell remained chairman until 1933, when he was arrested and indicted for tax evasion by then Assistant U.S. Attorney Thomas E. Dewey.[1][2] Defended by attorney Max Steuer, he was found not guilty of all criminal charges, but the government won a million-dollar civil settlement against him. In 1933, the Senate’s Pecora Commission investigated Mitchell as its first witness for his part in tens of millions dollars in losses, excessive pay and tax avoidance. In November 1929, Senator Carter Glass said of him, “Mitchell more than any 50 men is responsible for this stock crash.”[3]
wiki
http://blogs.reuters.com/breakingviews/2012/06/11/citi-looks-too-accident-prone-to-make-it-to-300/
Citigroup
By Martin Hutchinson

#114 R on 07.26.12 at 1:24 pm

Oh what busy men the REPO men will be. Check out the used websites . Only the start of this shit fling

#115 truth hammer on 07.26.12 at 1:27 pm

Canadians may have woken up to the fact that things aren’t positive when they opened up their most recent mutual fund or retirement statements……….timeberrrrrrrrr in the last quarter…….apparently a lot of people are realizing that they aren’t as rich as they thought.

Affordability as pimped by the media is entirely unaffordable…at any rate…….newbies may be math challenged but any moron has the ability of seeing a sure death blow coming in the guise of sticker shock when in the context of super small condo’s asking astronomical prices……SFH’s are totally out of reach.

Local conditions have changed….such as in Vancouver…once again you can fire a cannon down Robson Street an not hit anyone……the biggest anchors have pulled the plug and left only a few fools to shore up the crumbling exteriors.

More companies are leaving Vancouver…..so who is left to maintain the facade?

http://www.vancouversun.com/business/2035/Microsoft+lays+Vancouver+employees+cuts+major+projects/6993838/story.html

I find it funny that the Christie Clark government in BC is only now answering the anger of the citizens over the grotesque compensation of the fat cat civil servants…….politics eh?

Vancouver has based all it’s financial projections of tax revenue from real estate increases both in value and units in the pipe………they will sell of the viaduct land to developers to try and keep the raises coming in for the greasy insiders……..but with commerical revenues falling like a stone…and the government pulling back……where will the buyers and speculators come from?

Yaletown alone lost it’s 3 largest employers in the past 2 months.

#116 nufio on 07.26.12 at 1:28 pm

sorry for repeating the question… currently i have everything in my rrsp going to money market… is there a fund that you guys recommend that might give higher returns (> 0)…. its not really possible to divert rrsp funds into bank preferrds is it?

Sheesh. Get some help. — Garth

#117 Devore on 07.26.12 at 1:54 pm

#84 Luc

If prices go down, will they cut our property taxes?

Do you think this whole price valuation is a tax grab?

This is not how property taxes work. If city budgets and expenses remained the same year to year, and everyone’s property values went to 20%, your property tax rate would go down about 17%, while your property taxes would remain the same.

The city has a budget. It must get its money. If the budget goes up, so will property taxes, regardless of property prices, even if the property tax rate is going down.

You can see this in action wherever prices are crazy. For example, in Vancouver property owners have been happy to see their tax rates go up only slightly, but quickly become unhappy once they see the actual dollar amount. Apparently, it’s ok for house prices to double, but not ok for taxes to do the same.

The only way to reduce your property tax is to cut city budgets year over year, increase city revenues other than property taxes (second major source of revenues are fees from developers and assorted development permits), or to get your house reassessed lower than your neighbors, since this tax depends on relative value of properties.

#118 deja view? on 07.26.12 at 2:01 pm

Sea Change…
” an Australian term which describes a form of human migration that involves individuals abandoning city living in favour of a perceived ‘easier life’ in rural coastal communities”
…………………………………..

I once moved from the coast into a pocket of backwoods BC to experience a simpler bucolic lifestyle.
I soon discovered I had moved on to the set of Deliverence.
So I quickly beat a path back to civilization where people still value teeth and can form a sentence.

#119 Nefertiti on 07.26.12 at 2:03 pm

#88 Theguyfromthecorner

I saw this too; finally, some backs are starting to call it out, there is a bubble.

Also saw this one: Laval is a large suburban city just north of Montreal, and as the Mtl market gets more and more unaffordable, people are throwing their lust at Laval and other suburbs that are also getting more and more expensive.

The news? Chomedey (that’s just one neighborhood of Laval), has 5500 condos sitting on the market! How many get sold in an average year? 750.

That means it’s got 7 YEARS of overstock!!!

And then you’ve got this real estate marketing dude that says, “Oh, no problem there, since there’s no speculation everything’s fine”. Yeah right. Oh, and they’re also starting to build this huge project in the same area: six buildings, 940 condos, no 50-60% presale necessary to start building, they just have this much confidence in their project.

This is going to hurt.

http://affaires.lapresse.ca/economie/immobilier/201207/26/01-4559540-les-condos-se-multiplient-aussi-a-laval.php?utm_categorieinterne=trafficdrivers&utm_contenuinterne=lapresseaffaires_LA5_nouvelles_98718_accueil_POS19

#120 HD on 07.26.12 at 2:47 pm

#120 Nefertiti on 07.26.12 at 2:03 pm

My brother and good friend just bought their 1st condo in Laval (Vimont & Auteuil).

I referred them to Garth’s blog and tried to talk them out of it to no avail.

We shall see…

Best,

HD

#121 EdmontonJim on 07.26.12 at 3:12 pm

I don’t think viewing higher prices as ‘strength’ can be anything but a willful manipulation of attitudes.

I think it comes from the fact that the financial game has become so complicated, that we have no idea what’s going on, but we see one of the scores going up, so somebody is obviously winning, and since we don’t actually know the rules, we hope it’s us.

Here’s a spoiler: It’s not.

#122 nufio on 07.26.12 at 3:16 pm

Sheesh. Get some help. — Garth

———————————————-
Dont really trust investment advisors.. just want the name of some funds that I can investigate myself. Just moved here from the US. My 401k in the US is all in individual stocks. I cant seem to get that option here in canada.

#123 Elizabeth on 07.26.12 at 3:24 pm

Thoughts on this article Garth?

Title: Canada House Prices Set To Collapse 25 Per Cent In Long Term: Capital Economics

http://www.huffingtonpost.ca/2012/07/25/canada-house-prices-bubble_n_1703765.html?utm_hp_ref=canada

#124 new-era on 07.26.12 at 3:31 pm

There is a government price and the normal price.

Whenever government intervenes cost usually goes up because competition goes out the door.

I remember buying a office chair from a government distributor. The government price was 849 dollars, but to normal sales that chair only cost 189 dollars. WTF.

Well I think we are seeing this in the real estate market, money is cheap due to government intervention. Loans are given out freely like flyers of the 24 hour news flyer. This drives demand with the same amount of supplies. Therefore driving up prices artificially.

Just listening to this debate, where this young and cluesless girl basically is saying everyone should be given a free education by the government without cost.

Look girl government(tax payers) already paid for 13 years of education. How many more years should they supply, another 50 until they are retired student? Is there no limit.
http://www.youtube.com/watch?feature=player_embedded&v=g3hc6LoAlu0

#125 CalgaryRocks on 07.26.12 at 3:34 pm

#123 nufio on 07.26.12 at 3:16 pm
Sheesh. Get some help. — Garth

———————————————-
Dont really trust investment advisors.. just want the name of some funds that I can investigate myself. Just moved here from the US. My 401k in the US is all in individual stocks. I cant seem to get that option here in canada.

InteractiveBrokers is the best for DIY but they don’t have RRSPs. Which is too bad because they not only have a free API but they even support FIX for completely automating your trades.

Anyhow, for RRSPs and TFSAa I use Questrader and it’s OK. You can trade almost anything including preferreds.

#126 Blacksheep on 07.26.12 at 3:38 pm

Daystar, oops I mean, Disciple # 193,

The credibility podium you preach from has a rotten foundation. You daily remind us that every actor/ politician/public figure is the same person or a double agent, with nefarious intent. I assume you’re just yank’in chains in an attempt to discredit, the conspiracy minded, or do you actually believe this crap?

You emotionally responded to my comment, based on a ballsy post by A. Werewolf and now I’m supposed to take you seriously? Respect is hard earned and easily lost. If you are actually seeking feedback, drop the nonsense talking points and join the adult conversation.

take care
Blacksheep

#127 Canned Goods and Buckshot on 07.26.12 at 3:50 pm

#119 Deja View

Please expand and detail your experience. When and Where. Examples? Motivations?

#128 EdmontonJim on 07.26.12 at 4:04 pm

#84 Luc
If prices go down, will they cut our property taxes?

Do you think this whole price valuation is a tax grab?

______

Property taxes are an interesting animal, but in the end they are an okay system, but somewhat complicated.

Our most basic laws of land ownership are that only the Crown can own land absolutely. In Alberta for example, the province has the right to issue titles which give the right to a person or company to occupy and improve that land as they see fit, and there is an implicit agreement that the government will not arbitrarily recind that right.

In exchange for this, the government reserves the right to charge rent for that land. In Alberta (and I think all other provinces), the right to collect this rent is invested in municipalities by law.

So the municipalities are landlords, of a sort. As with any landlord, they rationally want to charge as much rent as they can, while still maintaining a low vacancy rate.

Under ordinary circumstances, the value of a property is proportional to the rent it can command under ordinary circumstances, so it’s natural that tax rates follow a flat rate as well.

Also consider this, that because real-estate can be bought and sold as easily as any commodity or stock, the natural rental rate should be exactly equal to the natural profit margin (or the rate of return expected on capital)

But this is where everything comes full circle. By classical economics, the distribution of the wealth falls into three categories: Rent, profit, and wages, or, in this case, rent and profit. If one is increases, then the other two are diminished. And since rent and profit will always move together, an increase in rent will decrease wages, which decreases the income of people who don’t have capital or land.

All of this is basically to say that increasing land values must necessarily decrease wages, but that increasing tax rates on property, may in fact serve to depress land values, which should increase wages. Of course it also drives away capitalists, which isn’t really a good thing.

In short, higher property taxes are generally a good tool for maintaining an equal distribution of wealth, but it also make a city less desireable to people seeking profits. Or in other words, it will raise the median but lower the average.

Also, when poor people are tricked into buying property they can’t afford, it all falls apart.

#129 harden on 07.26.12 at 4:15 pm

check out this Vancouver joke: MLS# V963569

first listed July 22nd at $968,000

that didn’t attract attention, so they raised the price today, to $988,000

Realtor assures greater fools “don’t get fooled by outside” ….. house is “very ideal” LOL!

#130 Bottoms_Up on 07.26.12 at 4:20 pm

Since when did CMHC start charging premiums on 80% LTV? I thought 20% down meant free and clear of insurance charges?

http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_005.cfm

#131 jess on 07.26.12 at 4:27 pm

An unexciting truth may be eclipsed by a thrilling lie.
Aldous Huxley

============================
The National Treasury Management Agency (NTMA) has launched the first sale of long-term Irish Government bonds in nearly two years.The bonds are on offer for terms of up to eight years, until 4.30pm this afternoon.
-sell the following bonds at the prices stated here for cash:

* 5.5% Treasury Bond 2017: €98.27 per €100 nominal (Yield) 5.90%

* 5.0% Treasury Bond 2020: €93.03 per €100 nominal (Yield) 6.10%

http://www.irishexaminer.com/breakingnews/ireland/ntma-launches-first-long-term-government-bond-sale-since-2010-560688.html

=======
extra inventory =social housing

NAMA is also working in strategic partnership with
Government and the State Sector at all levels, as a
consequence of which significant development proposals are being progressed in relation to social housing and the provision of healthcare services. We have, for example, identified over 3,100 residential properties as being available and potentially suitable for social housing. To date, over 2,000 of the units have been assessed and demand has been confirmed for over 1,000 houses and apartments. The process of making these available to Local Authorities and Housing Bodies is now underway.
This is a substantial undertaking involving NAMA, the
Department for the Environment, Community and Local
Government, the Housing Agency, Local Authorities,
approved housing bodies, the property owners, financial institutions, receivers and other relevant parties.

#132 Chris on 07.26.12 at 4:54 pm

Despite what the MSM says, prices have been stagnant in Saskatoon for about 18 months now. I know b/c we first tried to sell our house in Jan of 2011, finally sold in summer of ’11, and similar houses are selling for the same amount this summer of ’12.

#133 Ronaldo on 07.26.12 at 4:57 pm

More lies from the real estate industry (USA)

http://www.zerohedge.com/news/no-housing-recovery-these-three-charts

#134 Chris on 07.26.12 at 5:05 pm

The picture was changed?

Deal with it. — Garth

#135 Ronaldo on 07.26.12 at 5:06 pm

#123 Nufio – you may want to check the following out.

http://www.tdcanadatrust.com/products-services/investing/mutual-funds/td-eseries-funds.jsp?tab=what-is-it

Would need to open trading account with TD. There is no cost to purchase or sell. Short holding period. Very low MER’s. They are the TD E-Series funds. A good place to start for the DIY imho. Good luck in your search.

#136 Harlee on 07.26.12 at 5:07 pm

No one really has to worry about the financial health of BC. Come May of 2013 Adrian Dix will win the election. He’ll don his Superman suit and bring great prosperity to the province :Global companies just flocking to Vancouver,high-paying manufacturing jobs for eveyone,lower taxes for the middle class…
Oh yeah..Right. Dix is an NDPee’er.
Oh dear :(

#137 Timbo on 07.26.12 at 5:13 pm

http://www.kansascity.com/2012/07/14/3721992/long-spending-spree-is-bad-memory.html#storylink=cpy

“City officials stirred things up further last month when they hired Merrill Lynch to study a possible sale of North Kansas City Hospital, founded in 1958. That move upset many of the town’s 4,200 residents and blindsided hospital officials, who have since sued to stop any sale.”

auctioning off beds will be next……………

http://www.economonitor.com/blog/2012/07/the-man-who-invented-too-big-to-fail-banks-finally-recants-will-obama-or-romney-follow/?utm_source=rss&utm_medium=rss&utm_campaign=the-man-who-invented-too-big-to-fail-banks-finally-recants-will-obama-or-romney-follow

“Sandy Weill has finally seen the light. It’s a bit late in the day, but, hey, he’s already cashed in. You and I and millions of others in the United States and elsewhere around the world are still paying the price.”

Yup, hypocrisy has spoken……

#138 cramar on 07.26.12 at 5:54 pm

#100 The American on 07.26.12 at 10:50 am

—————

The coup de gras would be to show the average selling price of a SFH in Seattle vs. Vancouver.

#139 Bigrider on 07.26.12 at 6:17 pm

More high rise condos recommended as part on the Ontario place revitalization plan.

Politicians and their thirst for tax revenues.

Toronto the laughable city of condos and Brad Lamb wannabes .

Some ‘ world class’ city

#140 mid-Ontario on 07.26.12 at 6:46 pm

I loved the dog picture!
What happened to the dog picture?

Neighbor’s house still for sale despite 3 open houses.
Figure they will hold price into the Fall.

The number of For Sale street sales signs down substantially. They were removed from visible market, not sold. We too are entering a new stage in mid-Ontario.

Cottages dead for a year. Now we will see what happens to RE residential. Prices still 40% of TO RE but wages average 30-40% less too. RE average still way too high for family income.

#141 neo on 07.26.12 at 6:51 pm

For the record, who said corporate profits would turtle along with the economy in the second half of the year and is being proven correct?

O ya….

Me….

http://uk.reuters.com/article/2012/07/26/sp-earnings-idUKL2E8IQ52A20120726

#142 Derek R on 07.26.12 at 6:52 pm

#135 Chris on 07.26.12 at 5:05 pm wrote:
The picture was changed?

I thought it was pretty special too. But fear not. Here it is…

http://9gag.com/gag/992799

#143 Canadian Watchdog on 07.26.12 at 7:09 pm

Presenting the one crucial chart that RBC Economics forgot to post in their no condo bubble report. http://postimage.org/image/o13cv3lkl/

#144 Derek R on 07.26.12 at 7:09 pm

#129 EdmontonJim on 07.26.12 at 4:04 pm wrote a pretty neat analysis. I agreed with all of it except this bit.

Of course it also drives away capitalists, which isn’t really a good thing.

In short, higher property taxes are generally a good tool for maintaining an equal distribution of wealth, but it also make a city less desirable to people seeking profits.

I would say that higher property taxes drive away rentiers (AKA bad capitalists) but attract entrepreneurs (AKA good capitalists). The rentiers get hit hard because land prices stay lower and they have to pay a lot of their rental income in tax but entrepreneurs don’t mind the higher property taxes because they are balanced by lower land prices and lower non-property taxes. In other words, property taxes create a more business-friendly environment.

So higher profits are a definite possibility and therefore it’s likely that both the median and the average income will rise.

#145 Snowboid on 07.26.12 at 7:23 pm

#137 Harlee on 07.26.12 at 5:07 pm…

The thing is the NDP or Conservatives couldn’t possibly be worse than the last 11 years under the ‘Liberal’ crew that sold off the assets of the province to their ‘buddies’.

These were assets the citizens of the province owned – at least we can hope some of the losses can be recovered under another party.

BTW, manufacturing jobs left when the ‘Liberals’ shortly after they took power – coincidence or conspiracy? Or did they just agree to export our resources raw to satisfy the 1% that directs them?

Even as recent as a month ago, re-opening mines announced they are sending the raw materials out-of-country for processing – what gives?

What you should be worrying about is the freaking mess the ‘Liberals’ left to for a future government to fix.

The ‘Liberals’ don’t want another term, isn’t that obvious with who they put in charge – plus the number leaving the sinking ship to ‘spend more time with their families’?

#146 Nostradamus Le Mad Vlad on 07.26.12 at 7:23 pm


#198 Bill Gable on 07.26.12 at 5:06 pm — Excellent post, Bill. You have seen between the lines, and know what’s coming. WW3 is part of it. This should be added to the present post.

#136 Harlee — “He’ll don his Superman suit and bring great prosperity to the province . . . — Hmmm. Do I larf or barf?
*
Sooner or Later? Depends on how things go with Syria, SArabia and Iran. If slow, then the plug is pulled on the economy; 4:11 clip Lobbyist just proved he is owned and paid for by the big banks; Greece Do you know where your privates are? 5:51 clip Extremism rearing forth in EZone; Remember MF Global? Nasty little worms, eh? Audit the Fed will be killed by Obummer and the Dems.; Gold, Silver and Libor Manipulated? Superstorm? If it does, it will screw the economy up something bad.
*
Pentagon’s 30K bunker buster bomb “The US is planning to use Nukes, and this is just a cover story.” wrh.com; 1:15 clip “Armed citizen at Palms Internet Cafe: Two bad guys shot and no innocent lives lost. Disarmed audience at Colorado movie theater, 12 innocent dead, fifty wounded, and a call for a gun ban, even though one was already in effect at the time. Any questions?” wrh.com and Connection between SSRIs and mass murders; 1:02 clip Avoid airports. Trains, Boats and Hovercrafts are better; Pentagon Of course there was no photographic evidence of ObL. He crossed over well before, which leads to today’s wrh.com THOUGHT FOR THE DAY! —“The war in Iraq was conceived by 25 neoconservatives, most of them Jewish, who are pushing President Bush to change the course of history.” — Ari Shavit, Ha’aretz News Service (Israel) April 5, 2003; 7:59 clip Who is behind the war in Syria (and Libya / Iraq, etc.); Iran – Israel About right, as there is no reason for Iran to attack Israel; Skype – Twitter – FB One and the same — turning info. over to govts.

#147 Snowboid on 07.26.12 at 7:31 pm

#125 new-era on 07.26.12 at 3:31 pm…

Your example of pricing is close, but no cigar I’m afraid.

There is a government price, but that is one that the private sector charges when government buys something from them, and it is usually more than you and I can pay for the same item.

Why? Part gouging by the private sector (because it is taxpayers’ money), part having to cover the additional cost of selling to government (RFPs, etc) and the length of time payments would crawl through the bureaucracy.

But I do agree that goverment encouraged inexpensive loans which sent the prices of RE up.

#148 Daisy Mae on 07.26.12 at 7:38 pm

#116 Truth Hammer: “Canadians may have woken up to the fact that things aren’t positive when they opened up their most recent mutual fund or retirement statements……….timeberrrrrrrrr in the last quarter…….”

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

Wow! I continue to celebrate the day Garth saved me from Investors Group and mutuals! LOL

#149 Daisy Mae on 07.26.12 at 7:51 pm

#123 Nufio: “Dont really trust investment advisors.. just want the name of some funds that I can investigate myself….”

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

Really? You want others to do the grunt work…then you’ll go from there? Doesn’t work that way. You’re going to have to do your OWN ‘investigation’…..and eventually you’ll have to trust someone.

#150 Hoof-Hearted on 07.26.12 at 8:06 pm

What happened to the Dog …did these people eat it?

#151 Daisy Mae on 07.26.12 at 8:09 pm

#146 Snowboid: “What you should be worrying about is the freaking mess the ‘Liberals’ left to for a future government to fix.

The ‘Liberals’ don’t want another term, isn’t that obvious with who they put in charge – plus the number leaving the sinking ship to ‘spend more time with their families’?”

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

Tell me about it! We don’t want the NDP. I’m personally tired of swinging from right to left. Where are the PROVINCIAL Conservatives? They must come to the foreground and make their presence known!

#152 Herb on 07.26.12 at 8:20 pm

Edmonton Jim and Derek R,

have you considered the possibility that there is no reason or rationale to property taxes beyond municipal politicians trying to meet municipal budgets while protecting their bases of support? Any additional effects you might impugne have nothing to do with how property taxes are set.

#153 DonDWest on 07.26.12 at 8:20 pm

#145 Derek R

Yes, you got it right. The biggest cost for anyone starting a business in Canada today is renting or buying a commercial building. It’s not the taxes, but you can forgive EdmontonJim for typically being right of center in this regard.

An increase in property taxes would be a net gain for the entrepreneur because it would cost him less wholesale to get a commercial building.

I’m mildly confused why decreasing real estate costs would put pressure on wages. If anything, people would be willing to work for less because they can actually afford a roof over their heads.

Today we have “civil servants” asking for 50 an hour because they feel they need that salary to live in major Canadian city. Sadly, so far they’re right, let’s change this as soon as possible. Down with real estate!

#154 The American on 07.26.12 at 8:35 pm

At #139: Cramer, this I can provide you for all homes in Seattle, but it includes both SFH and Condos. Pay attention to the median prices and the average prices quoted here.

Parcing out SFH data would drive the following figures higher. The average list price in Seattle is currently $670,510. The median sales price is currently $385,000, up $45,000 since April this year, and up 13.2% year over year. At peak in 2007, Seattle’s median home price was $440,000. The average price per square foot in Seattle is $337, up 6.3% year over year.

Median price in Seattle for a 1 bedroom is $255,000 (up 9.2% year over year), 2 bedrooms at $343,000 (up 8.9% year over year), 3 bedrooms at $412,000 (up 10.5% year over year), and 4 bedrooms at $500,000 (up 16% year over year).

Because Canada does not have a system in place to provide immediate transparency to consumers, I cannot find this data for Vancouver very easily. Anyone else out there who may have access to it (who is NOT a realturd)?

#155 a prairie dawg on 07.26.12 at 8:50 pm

Chivalry lives. (at least in the third world)

He gave his Mom the store bought life jacket and made one for himself. Just hope he’s good with knot tying. lol

#156 Grim Reaper/Crypt Speculator on 07.26.12 at 8:51 pm

Re Civil Servants

Man…..I think I’ll go jump off cliff…..(and my pay scale and benefits are based on production )

Even when I come calling..they still b*tch …b*tch whine whine about their entitlements ……even with their heads up their @ss.

PS….I usually reap during either their 60 days of banked sick leave and/or 10 weeks of holidays.

The ones that really tick me off see Freedom 55 till about 56

#157 brainsail on 07.26.12 at 9:35 pm

Sea change…

“We are embarked on a generational sea change in Canadian politics. The only constant in all of this is Stephen Harper.

From that sea change, a new cast of political characters will emerge. One of them, or someone else farther down the line, will rise to challenge the new Conservative juggernaut.

The search for that person will dominate federal politics for years to come.”

http://elections.firedoglake.com/2011/05/03/political-sea-change-in-canada-two-parties-lose-big-on-monday-ndp-seats-nearly-triple/

#158 Derek R on 07.26.12 at 9:48 pm

#153 Herb on 07.26.12 at 8:20 pm asked
have you considered the possibility that there is no reason or rationale to property taxes beyond municipal politicians trying to meet municipal budgets while protecting their bases of support? Any additional effects you might impugne have nothing to do with how property taxes are set.

I think you’re dead right, Herb. The vast majority of municipal politicians haven’t got a clue. They’re just doing it to please their immediate supporters.

But this is a case of “unintended consequences”. It doesn’t matter in the slightest what the politicians’ intentions might be. If they try cover municipal spending with higher sales taxes or payroll taxes the local business environment becomes much worse than if they try to cover it with higher property taxes.

If you want a practical example of this, it’s very instructive to read up on the history of municipal taxation in Detroit which over the course of the 20th century went from a property-taxing entrepreneur-friendly environment to a payroll-taxing rentier-friendly environment to an industrial wasteland.

http://www.masongaffney.org/essays/Whats_the_Matter_with_Michigan.pdf has the lowdown.

#159 daystar on 07.26.12 at 9:53 pm

#107 neo on 07.26.12 at 11:49 am

I really don’t see any major declines over the next year or so myself. Major declines in the 25%+ range need a hike in interest rates, I would think at least, nationally. 10 to 15% is in the cards though and I’m basing it solely on valuations that are coming off their zenith peak, the effects of tighter regs and old fashioned common sense. (btw, thats based on media numbers. Real numbers could be lower) My feeling is that Bernanke is shooting straight when he suggests 2014 is the year the feds exit the bond markets and we should see a rise in interest rates beginning then which would impact rates here and drive values down accordingly as U.S. lenders find higher yields at home driving up yields in Canada accordingly.

If anyone has followed what Mark Carney has said recently about rate hikes in Canada, he’s saying that we could be the first out of the gate with higher rates. I think there’s some truth to that based on Canada’s gross public debt to GDP (currently 109%) and recent grumblings from bond ratings agencies concerning Canada. Net debt would be more accurate to go by, but its impossible to establish how valid these numbers are federally with what the government gives the public in terms of information. Maybe someone else can find more accurate information, but I can’t. What I can say is that gross public debt has grown by over 40% in a mere 4 years and that kind of credit growth publically is staggering. To put it in context, that places us within the top five fastest growing indebted nations in the world that haven’t declared bankrupcy. (The U.S., Japan maybe, Zimbabwe, Jamaica maybe, who else who hasn’t declared bankrupcy already like Greece or Iceland, I can’t think of any others. Ireland maybe) At some point, risk will get priced in and it could happen before Bernanke exits a low interest rate policy. Either way, I don’t see serious rate movement until 2015 but it will happen as gross public debt continues to rise. BoC rates at 4.5% plus and growing would not surprise me by 2015. Add a 3% spread by the time it hits our chartered banks and yeah… 8% is not unfathomable by the time its retail, certainly considering the impacts of the explosion of gross public debt in Canada.

If there are buyers who are thinking of getting into this market right now, I would like to remind them that its not so much what rates are today that they should be concerned with, but where rates are 5 years from now. Grab a mortgage calculator and crunch the numbers. There’s too much risk attributed to outstanding mortgage after 5 years with rates being an unknown to buy into a market at these zenith valuations unless…. a two income family can float the mortgage on either income at 4% over 10 years.

A ten year mortgage makes sense in some cases where this market is at assuming its at 4%. (Garth, your friend who asked you for a realtor referral, a 10 year mortage could save her if she could convert without penalty) If people are “super stuck” with “throwing their rent money away” when they could be “owning” (all that debt), y’know, if prestige and status is worth that much to them (even though its all out on loan, nice phisod), then go for a 10 year mortgage. 5 year mortgages in most markets of the big six cities in Canada (make that 12) make absolutely no sense until valuations come down say… 20% and I don’t think the market will shrink that much until rates rise (save BC, thats another story) but rising rates change the whole metric right, so…

I worked it out not long ago. A mortgage at 8% (after 5 years of a 25 year amortization) is double the monthly payment compared to a mortgage at 3.11%. You can get 3.11% presumably still, but where will the mortgage be 5 years from now and how much outstanding will you still have on your mortgage? Can buyers pass a true stress test at 8% with 20 years left? Can they handle double the monthly? (readers, feel free to challenge me on this, I want you to see it for yourselves) Maybe 1 in 10 or more wouldn’t be able to make payments with rates that high in the overall market (don’t just take my word for it, Mark Carney has said 1 in 10 are at risk right now) and that should tell us something as to how vulnerable Canada truly is. Add unemployment from slowing construction and financials alone and…

A 10 year mortgage on the other hand at 4% gives a greater percentage of buyers a great deal more time to lower the outstanding mortgage to something that won’t get them into trouble even at some of today’s bloated prices. Its the only kind of advice I could give to buyers who “must get in or else” as though they have guns to their heads. You know, “we must own to live the dream” mentality. Go long with 10 years at or around 4% or reset this crazy reality, build equity and wait it out. Yeah, waiters might have to move twice over a few years, big whoop. Otherwise, most will buy into a falling market. New buyers will get hosed on equity if they are forced to sell and they could very much so face huge debt service if rates are above normal when it comes time to renew and I’m convinced that above normal rates are where Canada is headed. 1 in 10 or more are in serious trouble at 8% with terms at less than 10 years and it could be as much as 1 in 3 recent buyers who have entered this market since 07′, 08’… at or near peak prices (within 20% of peak).

I hope I’m wrong, I don’t wish high rates on on anyone but… when I see the appetite governments have for debt and the inevidable risk that gets priced in and the prospects of U.S. feds allowing the bond markets to self regulate, thats what I see coming for Canada. Think readers for a moment, about what doubled monthly payments on debt would do to current valuations never mind current and continued tighter regulations coming. If readers haven’t thought of the very real consequences of above normal rates from a buyers perspective, they are seeing only what they want to see or not thinking at all and thats how people go broke.

#160 Mr Buyer on 07.26.12 at 11:07 pm

#54 Wpg Murder Capital on 07.25.12 at 10:36 pm
Look how hot the market is in wpg.

Asking $385,900 sold for $3,900,000 (obviously a typo), but you get the picture.
………………………………………………………………
Actually it is not a typo. Two bidders got into a bidding war but the second bidder qualified for the largely unknown new government bubble expansion soft landing program. The program only requires a commitment to get helocs as often as possible and buy stuff with the money and in exchange for that you can get a 400 year loan at .000000007% with a one time $3,500,000 bubble top homebuyer’s grant (the grant requires a written promise to vote for the party in power for the duration of the loan or your life, which ever is longer)

#161 Harlee on 07.26.12 at 11:50 pm

Snowboid
Just because I was being sarcastic about the BC NDP winning the next provincial election doesn’t mean that I believe reelecting the Liberals is a wise alternative either.These days in BC,when it comes to party politics, the BC’ers are between a hard place and a hard place. Not much “choice” at all. But…but…you can see the mountains from your bathroom window ! That’s worth something…!

#162 disciple on 07.27.12 at 12:02 pm

#127 Blacksheep… Firstly, I am not daystar. That’s a semi-insult to daystar, a highly intelligent and eloquent commentator who I believe has conceded is a founder of TheTyee.ca…

Secondly, where did I say “EVERY” politician is an actor? I know you’re struggling with this, but it is just a core group and a handful of associated families who have infiltrated us using the oldest trick in the book: a disguise. We are closer than ever but I doubt we will positively identify the real rulers anytime soon. They have regrouped and are re-arranging their ranks…example: Murdoch just resigned as Director. It’s a game, and whether you know it or not, you are involved. We are pawns, some of us, though, are leaving the chessboard. Join me…

#163 Steven Rowlandson on 07.27.12 at 3:49 pm

http://yourmoney.ca/Video/?bclid=34593259001&bctid=1757866952001

They do love to put lipstick on a pig don’t they? A 25% drop in prices won’t make house and condo prices more affordable. Real estate would be expensive even with a 90% drop and such a drop would be required before real estate would even come close to being affordable.
When you put lipstick on a pig you still have a pig.