Common sense

On Saturday morning hundreds of people lined up in blackness before the sun rose to buy condos in outer-suburban Vancouver. Burnaby to be exact. This happened at the same time condo sales in Vancouver collapsed by 26.7% last month. In fact in the entire region last month only 676 condos changed hands. But on Saturday alone, in just one 35-storey building, 269 were sold.

How could this happen when the prospects for real estate are dimming fast in Van, especially for condos there and in Toronto?

Two factors jump out. The first is speculation. The people desperate to get into the sales centre were not actually snapping up apartments, but rather futures contracts. The first hunk of the new Station Square development won’t be finished for at least three years. The deposit was just 10%, with another 10% not fully due for more than a year. That takes the sting out of forking over $600 a square foot to live in Commuterville.

Second, the developers’ marketing was culturally targeted. The main thrust was to the Asian community through ethnic television, print and on the web. Without a doubt, a strong bias towards real estate remains among that group of people. Whether it pays big dividends by closing day in 2015 remains to be seen. Maybe so. But I highly doubt it. Whether it’s Burnaby or downtown Toronto, the economic fundamentals simply don’t support what happened on Saturday morning. It was a classic example of group-think. The poor judgement of crowds.

There’s no doubt the economy is slowing in a profound way. We have a deficit of demand across the world. After years of cheap money, debt binging and over-expansion, there’s now overcapacity, and the years ahead will be marked by deleveraging and more brakes on the velocity of money.

Simply put, families are more likely to dump money into paying off fat mortgages and LOCs in the years ahead than in buying cars and vacations. Their dollars won’t get recycled into new economic activity – so the cash has no velocity. In a nation where (as I told you on Friday) 52% of people would now be screwed if their paycheque was a week late, it’s hard to be optimistic about the masses. Or their decisions.

If things deteriorate, real estate will be in the crosshairs. Diversified and balanced, liquid portfolios will still perform, and can be rebalanced or retooled in a few minutes if the skies darken. Residential real estate on the other hand or, worse, a condos futures contract, can turn illiquid while it deteriorates in value. I sure hope Saturday’s pilgrims realized that. But doubt it.

Now I’d like you to meet Stan, whom I do not know. But he has written me, thus:

I’d like to share my story with you, Mr. Turner. Nothing more.

My name is Stan. I live in Vancouver, BC. I’m 30. I rent and plan on doing so for as far into the future as my eye can see. I carry no debt. Have enough diversified savings to last about 2 years if I happen to lose my $65K / year job. I’m the sole bread winner in my 3 member family, which may become 4-member family if my mother doesn’t find a job soon.

I keep hearing about boomerang kids and those that live in their parents’ basements into their 30s. To me, a fall back option such as this, would be a luxury. I face the possibility of housing “boomerang parents”. Each time the media mentions someone returning to someone else’s house, I cringe. Quite often there is no house to go back to.

Despite being told all my life that renting meant throwing money away, I could never bring myself to invest in a mortgage. Signing a contract that amounted to a promise to remain in good health and financially stable for 30+ years never made sense (regardless of the premise). Not knowing what the next year might bring, how could I commit to anything forcing such obligation?

My previous place of employment shared the building with a realtor firm. Their parking lot was always full of top of the line BMW’s and Porsche’s. My young friends were all starting families and jumping into mortgages at that point. They thought they could afford the $1 mil homes they were going for (while earning roughly less or as much as I did).

I used to go to the parking lot with my co-workers, point at the realtor section and say: “See these cars? They’re bought though fees and commissions you paid when you took out the mortgage. When you buy property, you purchase a BMW as a gift for somebody else.” My friends laughed, but they’re not laughing now… neither are they my friends anymore.

Yet with many of my, now underwater, former friends no change has taken place. They still occupy the properties, having missed out on the blessing of a faux recovery. Not everyone gets a second chance to get out of the market and they totally blew it. I still cannot understand what pushed most of them into “ownership”. I had no data, no projections when making my decisions, just a simple set of observations. The parking lot and my own clunker told me more about the state of the housing market than all of the mainstream economists, university professors, and TV newscasters combined.

There are those who think independently, and those who follow society. This is a time when common sense is no longer common. When the obvious is concealed, when parents fail the young and the goal of life’s become the pursuit of stuff.

Who among us would call Stan a failure? Other than everyone lined up in Burnaby’s darkness.

211 comments ↓

#1 Rainman on 10.21.12 at 7:39 pm

numero uno!

#2 Rainman on 10.21.12 at 7:49 pm

I can not believe how stupid these people are? I guess it’s good marketing and a targetted audience, or just pure greed??
they are doomed!

#3 Toronto guy on 10.21.12 at 7:51 pm

Hi Garth,
I registered for your Toronto presentation long ago but now I am under the impression that the doors will be open for anyone who just show up.
I am afraid that is going to be too crowded.
I usually don’t like following the crow and don’t want to be caught in a big one.
Is there going to be any Amazonian checking the registration at the door?
Thank you.

If you received a confirmation letter, you are in. Wear some Axe. — Garth

#4 Mic D'angelo on 10.21.12 at 7:59 pm

Stan your right. the followers are blind and can’t see that they are just following a real estate game that has been rigged by ultra low interest rates and the capital gains tax-free investment propaganda by real estate agents, banks, mortgage brokers etc. Every 5-7 years a recession usually corrected real estate prices but this real estate inflate game has been going for at least 16 years. People have to learn the hard way and it’s their long life lesson that will cost them big time.

#5 Not 1st on 10.21.12 at 8:02 pm

Garth, do you really think a group of people are that stupid to line up to buy condos in a clearly falling market that peaked 6 months ago?

Its really time to consider something else is going. I know you don’t subscribe to alternate theories but clearly there is an ex-pat link back to these asian countries bringing dubious off shore funds into the region. The reasons are multitude, illegal gains, laundering, off shoring funds, drugs etc.

But also, these ex-pats are in the know about something the main stream media are not. That is that economies in China and India hang by a thread and gov’ts are threatened by revolution if the economy ever sours. Better to protect half of your wealth in Canadian RE than have it in a country where price controls, confiscation and martial law could be around the corner.

There simply HAS to be another explanation that these people still buying being greater fools.

#6 OttawaLuke on 10.21.12 at 8:05 pm

I reserved two seats for Toronto but will not be able to attend now, how can I return these seats to the masses of eager blog dogs?

Sorry, too late. I know where you live. — Garth

#7 Karie on 10.21.12 at 8:07 pm

I don’t understand why Stan lost his old friendships. What do finances, buying or renting real estate have to do with friendship?

Joke, right? — Garth

#8 Mississauga on 10.21.12 at 8:08 pm

What I cannot understand is where all these people are moving from? No, not China/Hong Kong, but rather, they must already be living somewhere – in a rental? in their parents basements?

Does this mean there is a glut of rentals coming onto the market – ie. the very rentals others invested in as speculators that are now being freed up.

#9 FI Guy on 10.21.12 at 8:09 pm

From what I’ve been hearing in the biz from those funding these types of developments in GTA, these “sold outs” are still happening here over last couple months…for 2013/2014/2015 completion.

Lending / debt growth is still comparable to last year, but I have noticed a lot less refinancing activity, likely due to OSFI regulation implementation / pressure. From what I hear, HELOC utilization is now being tracked more astutely, attempting to identify credit risk on the balance sheet.

Nearly all new volume are high ratio res mtgs.

My expectation again is that CMHC will quickly accumulate more high ratio aggregate volume and less portfolio insured book (as the portfolio insurance is what is running off), especially as price growth stagnates, and this will undoubtedly show up in the financials and be newsworthy.

#10 Moose on 10.21.12 at 8:14 pm

Interesting article in the globe and mail. Stating we are not on for USA stly crash.

#11 Jounce on 10.21.12 at 8:15 pm

You can’t go home again… cause its rented out to some else.

For that matter you can’t go home again because mom & pop and Uncle Freddy (all busted boomer’s) need a place to crash while the 2nd Lesser Depression, which started in 2008, now glacially passes before us.

Doubling and tripling-up, like a Mexican tenement, will seem normal over the next decade in realty-distressed and over-crowded Damnedcouver.

#12 phinny on 10.21.12 at 8:26 pm

Heya Stan,

I remember even before I heard Garth on CBC four years ago, or so, I was talking to a fella who worked one of the Hostel Internationals, and we got talking Real Estate.

It wasn’t some quantitative analysis of incomes/mortgage ratees/ debt loads …etc, rather a comment by the Innkeeper, who said that the price of homes just didn’t make sense to him. That’s it. He just had a feelin’…

Turn’s out he, too, was right.

#13 smartalox on 10.21.12 at 8:27 pm

There’s a condo development being built near my office in South Vancouver. The sign proclaiming ‘Nearly 70% sold’ was erected by a company called ‘New Asia Realty’, which according to their website offers:

“a group of professionals that reaches beyond the borders of Canada… encourage hope for a brighter future… but only the Crown Jewels can make dreams come true”

I guess that calling the firm ‘New Asian realty’ would have been too obvious.

Still, I’m glad that I’m clearly not the target market anymore.

#14 T.O. Bubble Boy on 10.21.12 at 8:38 pm

Stan’s only fault is staying in Vancouver, where he’s stretched so thin. He’d be well off in New Brunswick.

The bears would eat him. — Garth

#15 gtrz4peace on 10.21.12 at 8:40 pm

Stan, most people just don’t like reality. Period.

For example, reality is that the tar sands are one of many ways humans are destroying the environment for future generations.
Yet people watch the barrage of commercials now being paid for and run on TV proclaiming BC’s super happening energy future as the capital of fracking (also environmentally harmful), oil tankers on the coast, etc

And they are effectively programmed. It does not matter that there is no such thing as “clean coal” or “fracking that does not hurt the environment” or that whistleblowers have already come forward that the Northern Gateway pipeline is flawed from the get-go.

It does not matter cause overall people do not like reality. We have found that in the case of Canadians, if they are told something they don’t like, they ignore it and then passively aggressively ignore you, as if that will make the issue not real anymore.

Same with real estate, and poor financial habits.

#16 so it begins... on 10.21.12 at 8:42 pm

Not 1st

your theory of illegal money wanting to invest in canada doesn’t hold water.

Why don’t they buy a resale condo? They can put down 100% not just 10% of their illegal money.

#17 T.O. Bubble Boy on 10.21.12 at 8:46 pm

Here’s the CTV News story on the condo lineup (Metrotown):

http://bc.ctvnews.ca/big-metrotown-condo-development-sells-out-1.1004146

“The rest of the development could take until 2020…”

… or forever.

#18 East Van on 10.21.12 at 9:01 pm

Live well and die poor.

#19 Cory on 10.21.12 at 9:03 pm

Hard to know what to believe but one thing is for sure…Waterloo is loaded up with places for sale. I can’t see the mcdonalds sign thru all the for sale signs

#20 Aussie Roy on 10.21.12 at 9:06 pm

Aussie Headlines

Cash is still king after the GFC scare

Portfolio liquidity remains a high priority among mum and dad investors five years after the global financial crisis decimated investment returns, experts say.

Liquidity – the ability to sell an asset such as shares and receive cash quickly – became a critical issue during the GFC when investors wanted to pull out money from investments such as hedge funds, mortgage and property funds and managed investment schemes.

The fear of assets being locked up, money lost or not guaranteed by the government during the height of the crisis sent mums and dads running to more “liquid” investments such as term deposits and cash.

Five years on, some of the investment vehicles with frozen assets have been wound up, while others have eased redemption restrictions.

Yet many financial advisers or brokers say liquidity remains front of mind for investors.

http://www.afr.com/p/personal_finance/portfolio/cash_is_still_king_after_the_gfc_hkhThjUWF4wcw5xSpFWn6K

Mortgage defaults rise

Research by global ratings agency Moody’s reveals that mortgage customers are increasingly defaulting on their payments – albeit at low official cash rates – as house prices slide and equity falls.

While the national 30-day delinquency rate remained steady at 1.8 per cent in the 12 months to May 2012, they have spiked sharply in vast swathes of mortgage belts across Australia.

Almost six home borrowers in 100 are 30 days or more behind on their mortgage payments in the nation’s worst-performing regions, and delinquencies are not expected to ease.

http://www.news.com.au/realestate/investing/mortgage-burden-unbearable-for-aussies/story-fndbarft-1226499423831

State Govt now RE spruiker

It was once the realm of Real Estate Agents to spruik that it was never a better time to buy, but with the residential construction sector in free fall, state politicians are picking up the pieces and taking over from where agents and bankrupt builders have failed.

The South Australian State Government has launched the website – nobettertime.com.au to hard sell its new Housing Construction Grant indicating the state “has record low interest rates in a generation” and “the strongest rise in house prices in Australia.”

http://www.whocrashedtheeconomy.com/blog/2012/10/no-better-time-to-flog-a-dead-horse/

#21 S'toon dweller on 10.21.12 at 9:12 pm

Greg Zayadi of Anthem Properties Group said the buyers were people who will keep the condos for a long time.

That is well said. If prices drop like expected , they’ll be STUCK with them a long time.

#22 BigDaddy on 10.21.12 at 9:12 pm

Canada needs to bring in more foreigners to prop up our “strong” real estate economy.

#23 Old Man on 10.21.12 at 9:14 pm

I am a condo builder aka con, and on my last project put up sign that 80% were all sold out, so hurry or you will lose out on the bargain of a lifetime, as prices will be going up soon, and so will mine. The truth of this all is sold very few, but the medium is the message to bring the suckers into the fold – just my humour about it all.

#24 george on 10.21.12 at 9:22 pm

Financial crises: Have we learned nothing?

#25 a prairie dawg on 10.21.12 at 9:33 pm

#7 Karie

I don’t understand why Stan lost his old friendships. What do finances, buying or renting real estate have to do with friendship?

– — –

For the same reason a young guy at work doesn’t chit-chat with me about the stock market and the economy in general any more. (since the GFC of 2008)

People don’t like to be reminded of failures or missed opportunities.

#26 a prairie dawg on 10.21.12 at 9:41 pm

#13 smartalox

There’s a condo development being built near my office in South Vancouver. The sign proclaiming ‘Nearly 70% sold’ was erected by a company called ‘New Asia Realty’

– — –

Maybe New Asia Realty is just a subsidiary of a company called “Nearly 70% sold” lol

#27 Canadian Watchdog on 10.21.12 at 9:42 pm

All while OSFI and F is looking the other way as lenders pre-approve future mortgages when they know CMHC and Genworth’s insurance limit is almost breached. Unbelievable how nobody is talking about this.

#28 Smoking Man on 10.21.12 at 9:49 pm

Gartho,

I told you that sales are swelling from Victoria and moving east, first to Burnaby, and onward into Alberta and eventually to the 416 and beyond.

Prices set to SPIKE higher.

Jeez, if everyone would just listen to me we’d all be rich.

And what fun would that be?

No, it must be this way, only those tuned into the matchine and it’s messege win in the end. To the few, I salute you.

#29 Ex-Cowtown on 10.21.12 at 9:49 pm

#16 so it begins… on 10.21.12 at 8:42 pm

Not 1st

your theory of illegal money wanting to invest in canada doesn’t hold water.

Why don’t they buy a resale condo? They can put down 100% not just 10% of their illegal money.
+++++++++++++++++++++++++++++++++++

Maybe because they are thieves, not idiots.

Stupidest comment of the day. Congrats, cowboy. –Garth

#30 LJ on 10.21.12 at 9:50 pm

They should change the name of that Vancouver condo project from “Metrotown” to “Meltdown.”

#31 Timbo on 10.21.12 at 9:58 pm

http://www.reuters.com/article/2012/10/22/japan-economy-idUSL3E8LJ28A20121022

“Japan’s exports tumbled more than expected in the year to September, while manufacturers’ mood hit its lowest since early 2010 in a sign a row with China is further hurting the export-reliant economy grappling with the global slowdown.

The latest data reinforce concerns that the world’s third largest economy may slide back into recession as sales to China and Europe sag and demand at home led by rebuilding from last year’s earthquake loses momentum.”

Without strong, secure wage growth this is going to just get worse……

http://www.france24.com/en/20121020-tens-thousands-rally-london-against-austerity

“This is not a crisis that is going to sort itself out through cuts,” 19-year-old protester Jonathan told AFP. “We’ve had a double-dip recession now, and we are here today to show we are not going to stand it any longer.”

In Scotland’s biggest city Glasgow around 5,000 people took part in a separate protest while there was also a march in Belfast, Northern Ireland.

Class warfare on the march with a demand for a living wage. Something has to give……..

#32 2centsCdn on 10.21.12 at 9:59 pm

Has there ever been charges against fudged information or data given by the real estate industry? Until there is the industry can say anything they want to trick customers and the public into bad financial decisions. The seriousness of this and the long term damage it causes should not be ignored. I hate Gov’t red tape more than anyone ….. but the RE industry and their marketing machine is organized enough now that it can heavily negatively impact an entire country. There’s been rules to make the car industry clean up their advertised pricing and ethics act …. maybe its time to make the RE industry more accountable.

#33 Suede on 10.21.12 at 10:01 pm

Those that lined up and bought were happy because the mountains are snow capped as of this weekend. BPOE. Tsur Sommerville and Rennie paid the weatherman off to fix the forecast.

The question is how many RE brokerage houses bought blocks of this station square condo to re-sell later.

Aye Carumba.

#34 Bigrider on 10.21.12 at 10:07 pm

Garth says ” without a doubt , a strong bias towards real estate remains among that group of people” referring to Asians.

I’m surprised Garth that you finally concede this racial stereotype as a reality.

Permit me to say that the same bias towards real estate is overwhelming among the Italian community as well in Toronto. Dare I say the vast majority are also in construction?

Cultural, not racial. Are Italians a race? — Garth

#35 Patiently waiting on 10.21.12 at 10:10 pm

Do people really still believe the sales figures that builders provided to MSM? It is one of the oldest tricks in the book. Make something look like there is incredible demand for and further demand is created. Is there a non-partial third party that verify the builder’s sales stats? I think not. The room for fudging the numbers is too great for any builder to resist. Unfortunatley, there are next to zero repercussions for claiming false sales numbers. I have been to many sales centers off “Sold Out” buildings over the years and never have I been turned away because a building is really sold out. I am always told, “Ohhh it is your lucky day a buyer backed out, now there are two units for you to chose from.” The more you say you are willing to spend the number of available units magically go up. Don’t believe the hype people, ask yourself, who in their right mind would play $500 plus per square foot in this market?

Sadly it seems there are greaterfools who would.

#36 Timbo on 10.21.12 at 10:16 pm

http://www.bloomberg.com/news/2012-10-21/worst-carry-trades-show-central-banks-reaching-stimulus-limits.html

“In reducing its forecasts for 2012 and 2013, the Washington-based IMF said it now sees “alarmingly high” risks of a steeper global economic slowdown, with a one-in-six chance of growth slipping below 2 percent. ”

Cough, sputter, wobble……………..

http://www.theglobeandmail.com/report-on-business/economy/housing/dont-expect-canadas-housing-market-to-have-us-style-meltdown/article4627171/

“Mr. Carney is facing an unusually uneasy global economic environment. China’s potent economy is slowing. Europe’s debt crisis continues to fester. And while U.S. prospects are looking up – most notably in housing – the uncertainty surrounding the November election and the looming fiscal cliff have economists and investors on edge.

But it is the home front that is probably keeping Mr. Carney up at night. For the first time in five years, he has a major domestic problem to fret about – housing.”

The only thing keeping Carney up at night is the Goldman Sachs parties funded with taxpayer money….fretting is so 1990’s.

#37 Bo Xilai on 10.21.12 at 10:19 pm

Stan is wise beyond his years…

His BS radar is highly atuned.

#38 Phil Indablanque on 10.21.12 at 10:23 pm

I was reading the Council Briefs in the Peninsula News Review as I was waiting for my traditional with bacon … seems the town of Sidney BC is noticing a slight decrease in fees from building permits from last year to this.

“To date, the value of the permits (housing, commercial, institutional and demolitions) is just over $5 million. In 2011 over the same period, the total was $19.6 million.”

http://www.peninsulanewsreview.com/news/174991971.html

#39 Bill Gable on 10.21.12 at 10:28 pm

Stan, the MAN.

#40 Not 1st on 10.21.12 at 10:31 pm

Something about these sales just doesn’t add up. I mean there have been warnings of a RE cool off everywhere. Who would knowingly buy something thats going to be 25% lower in a year. And these aren’t house horny newlyweds with a nesting wife….these are speculators.

#41 Bigrider on 10.21.12 at 10:31 pm

Garth to Bigrider in # 34- ” cultural not racial. Are Italians a race”

LOL .. Ok Garth , allow me to adjust my statement. Let me say then that the ‘cultural’ bias of the Italian community towards real estate investing in the GTA is overwhelming.

They are ‘ALL’ in construction as well in one way or another, directly or indirectly.. LMAO

#42 Smoking Man on 10.21.12 at 10:32 pm

Bubble heads 18 hours in bed and no no hotties 105 fever in vegas missed my sat night. Damn sht happens. Up 3k black jack o well q cho haha hope these germs dont kill no one.

#43 Canadian Watchdog on 10.21.12 at 10:32 pm

Remember this? Telus’s Vancouver condos fly off the market

Then this? Hey Vancouver Sun, TELUS GARDEN CONDOS DID NOT SELL OUT

Now this… 5 Penthouses for sale at Telus Gardens

#44 Johnny O on 10.21.12 at 10:33 pm

Here’s an interesting article about people mortgaging their Vancouver home to the hilt to buy New York real Estate. I would be interested in what Mr. Turner has to say….could be the next column.
http://www.theglobeandmail.com/life/home-and-garden/real-estate/going-all-in-canucks-max-out-their-mortgage-to-buy-in-brooklyn/article4623131/

#45 oh oh on 10.21.12 at 10:44 pm

RE sell out at Station Square….. I personally know 2 of the fool’s, one is a 1st time buyer in school with a part time job figures he will be making a decent wage in 2 yrs and that they will go up 10% per yr, other is a couple who already own a home and bought as an investment as they had the downpayment saved up, says it’s a good investment cant go wrong. Sigh I can’t fathom looking that far into the future

#46 Smoking Man on 10.21.12 at 10:53 pm

#28

DELETED

#47 };-) aka DA on 10.21.12 at 10:55 pm

The price of shelter is going to revert to 2001 prices along with the cost of materials and labour used to build it. Ya right – and so is a loaf of bread, a quart of milk and YOUR wage.

#48 Canadian Watchdog on 10.21.12 at 11:01 pm

For those still having a hard time trying figure out what the hell is going on in this market, I present again the Nobel prize written working paper:

June 9, 2004 – Looting: The Economic Underworld of Bankruptcy for Profit Link

“Our theoretical analysis shows that an economic underground can come to life if firms have an incentive to go broke for profit at society’s expense (to loot) instead of to go for broke (to gamble on success). Bankruptcy for profit will occur if poor accounting, lax regulation, or low penalties for abuse give owners an incentive to pay themselves more than their firms are worth and then default on their debt obligations.”

Bankruptcy for profit occurs most commonly when a government guarantees a firm’s debt obligations. The most obvious such guarantee is deposit insurance, but governments also implicitly or explicitly guarantee the policies of insurance companies, the pension obligations of private firms, virtually all the obligations of large banks, student loans, mortgage finance of subsidized housing, and the general obligations of large or influential firms.”

“Unfortunately, firms covered by government guarantees are not the only ones that face severely distorted incentives. Looting can spread symbiotically to other markets, bringing to life a whole economic under- world with perverse incentives. The looters in the sector covered by the government guarantees will make trades with unaffiliated firms outside this sector, causing them to produce in a way that helps maximize the looters’ current extractions with no regard for future losses. Rather than looking for business partners who will honor their contracts, the looters look for partners [subprime buyers] who will sign contracts [pre-sales] that appear to have high current value if fulfilled but that will not-and could not-be honored.”

“This paper has shown how other people’s money, typically deposits in financial institutions or insurance funds, can profitably be looted, with the guarantor of the assets, typically the government and its taxpayers, left holding the bag. These opportunities for looting occur when the value of the take net of the cost of prosecution, M*, exceeds the expected value of the underlying institution, V*.

——-

As they say, it’s different here.

#49 Ex-Cowtown on 10.21.12 at 11:03 pm

#47 };-) aka DA on 10.21.12 at 10:55 pm

The price of shelter is going to revert to 2001 prices along with the cost of materials and labour used to build it. Ya right – and so is a loaf of bread, a quart of milk and YOUR wage.

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

A lot of people are making less than they did in 2001, so you are partially correct. Also cost of materials doesn’t determine selling price. The world does not work on a cost-plus 15% basis.

When your input costs exceed your selling price it’s called “losing money”. Nobody cares what it cost you. All they care about is what it’ll cost them. And with food and fuel costs climbing, it leaves less money for you.

#50 GTA Girl on 10.21.12 at 11:06 pm

Interesting article in next months Toronto Life on condo realtors/developers. I’ve read it twice and still can’t grasp if the article is fawning, or a biting satirical piece.

Many developers admitting that the reason condo sizes have become ridiculously tiny is not due to land or building cost. But due to marketing scheme to sell to foreign investors.

Along with Instagram worthy photos of developer sales people wearing the uniform of black leather, mini skirts and 6inch heels, is quoted statements that many condo sales are cash deals…I hope it’s declared sales. Federal laws have become quite nasty to any land developers dealing in non-declared cash/laundering.

Article also mentions the amounts of condos filled with empty units, owned by foreign unnamed people who’ve never even seen them.

Many such customers are Baltic & Russian investors. The developers remark how they’ve had to hire Russian speaking sales staff!

Nawwwwwwwwww I’m sure everything is legal.

But let’s say it all isn’t. Lets say, it’s a Ponzi scheme in some cowboy developers condos. Units traded sold like stocks, used to hide foreign money gotten by illegal means.

I pity the poor suckers who’ve bought into these slick condos. Poor SOB’s that actually want to live there! Live amongst empty deteriorating units. With a disorganized condo board that can’t get quorum, because no ones in the country. Units rented to squatter types. Bad construction. Maybe a deceitful management company who falsifies repair invoices, funnels maintenance fees then runs off at years end.

In a few years, when these monoliths show their structural failures, such as inferior concrete, bad footings, glass walls losing their seals, faulty plumbing and those damn leaks….no one will be able to get there money out of these hazardous money pits.

#51 squidly77 on 10.21.12 at 11:08 pm

Ultimately, the markets stop rising and people who have borrowed heavily find themselves overstretched. This is ‘distress’, which generates unexpected failures, followed by ‘revulsion’ or ‘discredit’.

Here’s where we’ll be soon:

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.

Buying into a falling market is the true definition of Delusion.

This wont end well.

#52 squidly77 on 10.21.12 at 11:09 pm

Housing market price crash is now dead ahead.

#53 Hugh Jasz on 10.21.12 at 11:17 pm

I was almost surprised that a suburban condo building would sell out, but then I remembered the story from a few blogs ago where someone apparently paid almost $700K for the dubious privilege of owning (owe-ning?) a Markham townhouse.

FML

#54 GTA Girl on 10.21.12 at 11:20 pm

Visited the new Four Seasons hotel/condo in Yorkville.

Someone should remind developers that plain white drywall is NOT the new Brazilian cherry wood.

Like the cheap looking Ritz Carleton, massive walls of plain white painted drywall has become the ‘in’ thing in Toronto.

I can’t believe builders have sold this cheap assed look as luxury. Visit any city in the world, and you’ll never seen minimalism, stark white empty vast areas, of overpriced 60’s era sofas/decor used in such a obnoxious way as they do in Toronto.

Even there very expensive restaurant is white stark, glass table tops and white leather office swivel chairs…

The spa? 15,000 sqft, of cold white enormous walls with cold tile and white leather benches to shiver while waiting for an attendant.

It’s equivalent to waiting in a doctors office with 15ft walls….or an asylum.

Cheap drywall, where if you touch it, leaves marks and dust…is not a luxury nor anything but a testament that your drywall contractor was able to buy that villa in Tuscany.

#55 TRT on 10.21.12 at 11:27 pm

#5 Not First

“Its really time to consider something else is going.”

You think?

There are a bunch of reasons.

Facts:

1) Interest rates WERE NOT the primary cause of the initial boom in RE. Something else caused the initial momentum and that momentum was carried forward by other factors. Interest rates ARE the primary reason RE stays at lofty levels (hence why F and C won’t budge).

2) RE was on a tear from 2002-2006 (before 40 yr amortz, emergency interest rates, MSM pumping, etc.).

3) Interest Rates for 5 year fixed mortgages were essentially the same in 1998 and 2003. Prime rate never went lower than 2002 levels until 2008/9. In 2002-2003, something had set off the RE market and it wasn’t interest rates. CMHC? maybe. But there is more to it.

4) In 2002-2003, the Temporary Foreign Worker program was introduced. Also around this time, Foreign students were encouraged en masse to study in Canada. Whether they leave after their visa expires is unknown as there are no exit controls. From experience, there are many undocumented Chinese living in Richmond and many undocumented Indians living in Surrey. Surrey is also becoming home to undocumented Latinos. Come to Bear Creek Park in the summer wearing a CBSA , watch most of the people scatter. Again, Exit controls will be in place in 2 years. The above migrants are in addition to the 280,000 permanent residents. And any foreigner can by RE in Canada ( a relative of an undocumented migrant).

5) Foreign money coming into the country. Densely populated countries like India/China naturally have very high land values. Incomes are very low but people who own land are very rich. Some of those migrants are in Canada now and are bringing their money over ‘hidden’ from the CRA as their past tax returns never mentioned foreign property.

6) I cannot buy land in India in China. But they can buy here. Therefore, Vancouver and Toronto are stores for money.

7) In 1986, RE in Vancouver and Toronto took off. Interest rates were high. CMHC did not change any rules. Direct correlation with Mulroney drastically increasing immigration numbers.

—> Why do immigrants choose Canada over Australia, USA, etc. Because you can easily bring your extended family over. Mom, Dad, Grandma, 25 year old brother, etc. Can’t do it anywhere else.

—-> Garth will not like this post. Banks/Big Business want a high influx of people and money coming in. Share values remain high as corporate profits rise, etc.

#56 THE CELIAC HUSBAND on 10.21.12 at 11:28 pm

Not sure how many of the posters/readers onhere are self employed trades, if anyone even.

BUT. Having just added up our renovation costs of the shack in Europe, I have tell you, if the economy tanks and some of you need work, there is tons here for able bodies.
Especially if you are willing to have a quick lunch onsite, not a two hour break…..

About to start some more renos on extra space in the house, the electrician won’t even call me back….that’s how busy he is.

#57 nonplused on 10.21.12 at 11:29 pm

I’ll call Stan a failure. He failed to drink the Coolaid. Bad Stan.

But he’s going to get it his own way if he thinks letting mom move in is a good idea. Remember how she was when you were young, Stan? She hasn’t changed. She’s moving in now because you are a meal ticket, same as your dad, same as you, same as everyone. Lock the door and don’t give her a key.

(Yes there are good moms, and maybe this one just fell on hard times, but seriously, who moves in with their kid and his family? You’d better be fu$king miracle grandma complete with housekeeping and child-care or forget it! Let him and his wife have their space and raise their kid. Don’t need mom around to mooch or be bossy, or even if she can keep her mouth shut, don’t need her cramping your style in the bedroom.)

So to be clear, mom can move in under the following conditions:

1. Real hardship.
2. She did the hockey mom thing, really cared and gave when you needed it.
3. She cooks
4. She cleans
5. She does laundry
6. She eliminates the need for child care
7. She respects your wife and gives her no grief
8. She’s almost deaf.

Miss on any point, especially #2, 7 & 8, and mom is on her own. This is why they have shelters.

#58 squidly77 on 10.21.12 at 11:32 pm

The average yearly earnings during the past 5 years in Calgary for a realtor stands at about $41,000. Porches and Bimmers ?

Maybe pre-2008 for Calgary realtors or pre-2012 everywhere else, now its more like realtor ramen and a well used Chevy.

#59 Common sense : The Retiring Boomer on 10.21.12 at 11:33 pm

[…] In the face of a dramatically slowing outer-suburban Vancouver housing market, an anomaly seems to have occurred. Home sales have collapsed 26% in September, with only 676 condos selling.  Yet this past Saturday 269 condos sold.  What is going on?  Garth Turner at the Greater Fool Blog explains how the marketer of one condo tower targets cultural groups more inclined to own real estate in the face of a declining market. So this anomaly does not explain a turnaround in sales in October but a highly targeted marketing campaign to cultural group of speculators. Continue Reading […]

#60 Freedom First on 10.21.12 at 11:33 pm

My favorite oxymoron=common sense. Love this blog! Even get a kick out of the idiot realter shills who post here. I would like to see Smoking Man get help though. He is a very sick man, and no offense SM, but you really do need help. Seriously.

#61 Devore on 10.21.12 at 11:33 pm

#47 };-) aka DA

Ya right – and so is a loaf of bread, a quart of milk and YOUR wage.

That would seriously suck for anyone who took out a mortgage post-2001. Not sure what your point is. Without a lifetime of fixed debt ahead of me, I’m perfectly fine with my wage going down, as long as so does my cost of living. I’m not excited by lots of 0’s in my bank account; much more interested in my purchasing power.

#62 Dr. WAYNE on 10.21.12 at 11:35 pm

#1 Rainman on 10.21.12 at 7:39 pm

numero uno!

NUMERO UNO ASSAHOLE …

#63 nonplused on 10.21.12 at 11:35 pm

I forgot point number 9:

9. She doesn’t say much. Knows how to bite her tounge.

#64 TRT on 10.21.12 at 11:37 pm

#27 Canadian Watchdog,

CMHC insurance limits will not be breached. It’s actually gonna fall over the next 12 months as 10% ($60 Billion)of the total of approx $600 Billion is being paid off.

So basically they can insure $60 Billion per year no problem…plenty.

Read their site.

#65 Davey Boy on 10.21.12 at 11:37 pm

Really encouraging to hear Stan’s story. Real estate is front and center on this blog, but the never ending pursuit of more and more stuff in general is sickening.

This is not the ramblings of a has not. I had the payed for house and fancy cars, 7 digit investments. I recently got divorced because I was sick of the consumerism and the emptiness I felt inside being surrounded by people looking for the next material fix.

There has to be more to life, something that brings people together rather than pits people against one another in this insatiable search to fill the emptiness that we feel inside…

#66 nonplused on 10.21.12 at 11:45 pm

And to be really, really clear about point #2, if you didn’t play hockey as a kid, or soccer, or piano, or baseball, or whatever, and even if you did play high school basket ball but mom (or dad) never came to watch, they stay at the shelter.

#67 $$$BPOE#1 on 10.21.12 at 11:46 pm

Everywhere in Vancouver it’s the same. Condo (insert name here) SOLD OUT. And this is considered a “bad market”. Long term trend solidly intact. There is so much overwhelming demand that City Council is looking at lane housing etc. Never looked better.

#68 $$$BPOE#1 on 10.21.12 at 11:47 pm

If Canadians don’t want to buy then savvy developers will market to people who will. It’s as simple as that.

#69 GTA Girl on 10.21.12 at 11:48 pm

Pure bull pucks.

http://www.bildblogs.ca/ontario-land-supply/

The Land Developer association is putting pressure to open white belt lands along the Oakridges Morraine for development. Because townhouses needs a chance to grow too!

The plan will be to also dip into the morraine, Rouge Valley and Niagara. They have municipalities in their pockets.

This is becoming insane. Farmland eaten up for semis/townhouses, in the middle of nowhere at least an hour (two if traffic) from Toronto.

For the start prices of $475k for a 1000 sqft town home.

Undermining the provinces Places To Grow Act, and feeding further sprawl.

A correction is badly needed. This makes no economic sense.

#70 Devore on 10.21.12 at 11:51 pm

This is what happens once the building “sells out”:

http://vancouver.en.craigslist.ca/bnc/reb/3354545981.html

Apparently, in real estate developer-speak, “sold out” does not mean what everyone else think it means.

#71 tkid on 10.21.12 at 11:52 pm

*Someone should remind developers that plain white drywall is NOT the new Brazilian cherry wood.*

It isn’t plain white drywall. It’s paint tinted to the exact shade of dried plaster, so if the painters miss a section, or if the bathroom above yours leaks, no one can tell the difference between the painted and non-painted sections.

#72 Fool me once... on 10.21.12 at 11:54 pm

#5 Not First

For those of us that believe in basic fundamentals that drive typical markets (includes Garth) it’s hard to understand what forces are impacting Vancouver’s market. Everything tells us that the RE market on the West Coast should head south, far south. But the reality is there IS something that we can’t base on historical patterns. Yes, if we use the regular laws that govern the RE market place then logic says the RE is drastically over valued. But there is something else happening here. Call it fear driven by questionable financial regulations in Asia or something else, but it is real and it is impacting the local market like nothing in the past.

#73 nonplused on 10.21.12 at 11:56 pm

Christ said: “Do unto others as you would have them do unto you.” And I believe in that. But unfortunately not everyone does. So the Corollary applies in some cases: “If someone has done something unto you, do likewise back.” That applies to both good and evil. You turn the other cheek only as a show of superior morals/force, to your lessers, to scold them. To your betters, you accept the instruction.

#74 Uki on 10.22.12 at 12:03 am

#62 Dr. WAYNE on 10.21.12 at 11:35 pm

#1 Rainman on 10.21.12 at 7:39 pm
numero uno!
NUMERO UNO ASSAHOLE …

Hey, Dr. WAYNE ( are you really doctor ? ) Do not insult anybody here. Try yourself to be “The First” and we will see how good you are…

#75 Ralph Cramdown on 10.22.12 at 12:05 am

The average yearly earnings during the past 5 years in Calgary for a realtor stands at about $41,000. Porches and Bimmers ?

It’s like that everywhere, though $41k seems high. The barriers to entry are so low that in every big city, the bottom 3/4 of agents only do three or fewer (0!) deals a year. There’s still lots of gravy for the top 10%, and they get the newbies to babysit their open houses for them.

#76 Canadian Watchdog on 10.22.12 at 12:07 am

#64 TRT

I already calculated the $60B draw-down. Insurance-in-force is still growing at a surplus. Chart Homework helps.

#77 oh oh bpoe on 10.22.12 at 12:11 am

Hmm Mr BPOE 5 yrs later the Olympic Village still not sold out only 75%, yup you a dreamer

#78 Mr Buyer on 10.22.12 at 12:11 am

#28 Smoking Man on 10.21.12 at 9:49 pm
not going to happen. The collapse is on.

#79 Crash Calaway on 10.22.12 at 12:15 am

The problem is that the vast majority will always piss next to the well they have to drink from.
The only thing on the minds of those greedy condo buyers is getting a spot as close to the well at any cost.

#80 Mr Buyer on 10.22.12 at 12:41 am

I read something in a flier a long long time ago about the fine art of whistle blowing. It seems the first key point regarding effective whistle blowing is 100% anonymity. I mean right down to latex gloves and water for the postage stamps. The more serious the the matter (read money) the greater the precautions. This means not even the reporters know the whistle blower’s identity. The whistle blower must never tell another living soul ever. The facts of the case must be able to be proven, proof is essential. This proof must be presented briefly and to the point. Not rocket science so far. The outline regarding the way to get the assertions noticed and acted upon was the most interesting portion of the flier. Apparently the key element of a whistle blowing document is a lengthy cc list so that everyone contacted knows who else has received the document and there should be concerned elected officials included in the list along with opposition party elected officials and political leaders at many levels along with bureaucrats, and police again at many levels of government and the media. The media should include every form (TV, Radio, Print) and many different companies. It is easy to see a 100 person cc list being typed at the end of such a document. The document should inconspicuously be sent out at the same time for best effect (less time for spin). Whistle blowers must understand that they truly are taking their lives in their hands and should never minimize the risk.

#81 jan on 10.22.12 at 12:57 am

Garth, you always talk about 70% ownership in Canada.
What about all those who own 2,3,5,8 properties each?????
I know a lady in Vancouver who owns 4 SFH and several condos accross the lower mainland, and there are lots of those people around here, a lot????

#82 DON on 10.22.12 at 1:09 am

@ Stan
@ #4 Mic D’angelo

Yup…I remember back to 2005 when I told a relative that this feeding frenzy would not end well. Freedom 55’ers and the older ages everyone was building new houses every where in this small town. More older people than young…top heavy to say the least and the young couldn’t afford the 4 -5 bedroom homes that these retired folks were custom building.

Stay strong Stan… when things do finally revert back to the mean. You will be in a good position, credit worthy in a sea of individuals who declared personal bankruptcy. Marriages will become even more constrained like the 80’s. People have been accustomed to believe that even the impossible is possible without repercussions. Have Hollywood movies finally diluted people’s sense of reality. I find humility and commonsense are in short supply.

Hang in their Stan and enjoy your family and the hell with those fare weather friends. Hey I have two inlaws moving in with me – both wanted and will help out. Nothing wrong with having more family around. The trick is separate entrances and good sound construction. Your children can only benefit from the experience, but you have to invoke Robert’s Rules of Engagement.

Good Luck and think about leaving Van and going and have a happy life elsewhere. I am headed out also.

#83 Whitey on 10.22.12 at 1:44 am

Here’s a quick question. Does the Government of Canada reimburse soldiers if they are posted at another base for a loss when selling a home? For example, if I move to Halifax in 2010 and buy a home for $300k and then in 2015 have to move to Vancouver and sell my home, does the government make up any losses from the original value. Or if in 2015 that home is now worth $250k and that’s what I can sell it for based on a 2012-2013 crash, will the government top me up? I’m not the person in question here, but I know someone who seems to think that all losses are covered. To me that would be ridiculous, but I’ve seen many more ridiculous moves by government. If a home is bought for $300k and the market says it’s worth $300k, but due to a fast move, a person can only get $280k then I could see the government stepping in. However, if the market says that house is worth $250k then I don’t think they should reimburse the loss. I’d be interested to know the answer to that.

#84 Questioning Calgary stats on 10.22.12 at 1:50 am

For those of you who bought at the peak, don’t expect the housing market to magically rebound the way it did in 2009. This time there will be no dramatic, unprecedented, emergency intervention.

#85 Soylent Green is People on 10.22.12 at 1:51 am

FML

Lolololol

..

#86 broadway skytrain on 10.22.12 at 2:16 am

“outer-suburban Vancouver. Burnaby to be exact.”
——————————————————-

metrotown ? i consider outer suburb like steveston,cloverdale,anmore,hsb,abby,ladner or poco.

metrotown is the #1 mega urban zone in the area next to downtown peninsula/broadway – nothing comes close. boundary rd to metrotown skytrain is under 90seconds (not counting patterson stop time) so it;s pretty close to vancouver –

it;s WAY more asian than downtown.

rmd has lost it’s shine but bby remains very popular (and tsunami proof) with our newer , mostly Cantonese speaking friends

it also feels much like the type of huge urban clusters found round the biggest malls/train stations in tokyo (ie shinjuku) within a 30M metro – a real asian mega-urban feel that you don;t really get downtown.

basically i guess my point is that it is the hottest area in BC for tiny condos outside of downtown.

personally i avoid it religioulsy – not car friendly, then be prepared to walk miles thru the mall. yet i drive thru downtown every day – no prob.
what these suckers don’t know is brentwood mall (also within seconds of boundary road on skytrain) is a’comin down for a shiny new mall and a small forest of condo towers which are planned to be the tallest in BC – 70 stories . the shame of living in a 47 story bldg when 70 stories of (phallic?) status beckons to the north will be too much for many to take!

#87 broadway skytrain on 10.22.12 at 2:31 am

my friend had the MIL move in a whine back . she does not follow the rules!

1. Real hardship. – NOPE
2. She did the hockey mom thing, really cared and gave when you needed it. – DONT KNOW
3. She cooks – NO
4. She cleans -NO
5. She does laundry -NO
6. She eliminates the need for child care -N/A
7. She respects your wife and gives her no grief – HUGE NO
8. She’s almost deaf. – NOPE!

ALSO – cranks up the heat because ‘i shouldnt have to wear a sweater in my own home’ , thinks the whole house is hers, etc.etc.

#88 BillyBob on 10.22.12 at 5:25 am

Say there nonplused, do you have a few wee issues with your mother? It’s not obvious or anything.

#89 so it begins... on 10.22.12 at 6:21 am

# 27 Canadian Watchdog

it appears that they a few quarters left before hitting their limit

Will they not just raise the limit? Or find some creative accounting procedure.
They can’t stop.

#90 Dr. WAYNE on 10.22.12 at 6:58 am

#74 Uki on 10.22.12 at 12:03 am

Yes I really doctor. I come here for valuable information, not stupidity …

#91 T.O. Bubble Boy on 10.22.12 at 7:07 am

CMHC for sale?
http://www.theglobeandmail.com/report-on-business/economy/housing/flaherty-eyes-privatization-of-cmhc/article4627593/

So, all of these recent changes weren’t for the good of the economy, but to “pretty it up” to be sold?

Were all the recent articles in the MSM trashing CMHC’s Emili the robo-signer just someone trying to get the price down?

Watch for more anti-CMHC press (well deserved in most cases) as bidders line up.

#92 Ferrari on 10.22.12 at 7:15 am

Taking away the punch bowl … again

http://www.theglobeandmail.com/report-on-business/economy/housing/flaherty-eyes-privatization-of-cmhc/article4627593/

#93 Frank on 10.22.12 at 7:46 am

Interest rates will not rise for a long time to come. I wonder what the debt ratio will be like in another 6 months. Financial insanity all around us.

#94 TurnerNation on 10.22.12 at 7:55 am

After a decade of programming by the realtors and TNL@TB we’ll soon see fewer use – as in the USA’s case – of these nonsensical phrases:

Investment property
Investment condo
Property investor
Cash flow positive
Flip
Real estate investor
You are richer than you think
Banking can be this comfortable
Renting is throwing your money away
Renting is paying someone else’s mortgage
Hot spring market
Hot fall market
Sellers’ market
Balanced market
Priced out forever
Getting into the market
They.re not making any more land
Property ladder
Moving up
Trading up
Equity
Taking Equity out of your home

“In Soviet Russia, home take equity out of you!”.

#95 Pr on 10.22.12 at 7:58 am

Mansions made affordable by criminally lax lending standards, a bubble is a bubble is a bubble; and citing Stein’s Law: “If something cannot go on forever; it will stop.”

#96 Herb on 10.22.12 at 8:06 am

Smoked Man,

there are times I wish that the fingers on your keyboard would disobey messages received from your brain.

No, not when you’re laying on your “persona” as in #42, but when you think you have pearls of wisdom for us bubbleheads, as in your #28.

#97 live within your means on 10.22.12 at 8:19 am

My Mom lived with my DH & I for 4 years when she was about 79. She lived alone in the country & the plan was she’d return to her tiny home in the spring. After a mo. or 2 we realized that her macular degeneration had progressed to the stage that she shouldn’t be living on her own.

My DH’s only complaint was that he’d ask her what her preference was & she’d reply what ever is easiest. She enjoyed living w/us, especially socializing with friends & neighbours.

Unfortunately, it was taking a toll on me as I had to bathe her – which I didn’t really mind – but I’d find feces on the bathroom wall due to her sight. The original plan was that my sis & 2 brothers take her for weekends – rarely happened. After my sis & I decided that the time had arrived for her to go into a nursing home. When she did, we all took turns taking her to our homes each weekend.

My Mom was a fabulous lady. She sacrificed & worked her butt off for her 6 children.

#98 TurnerNation on 10.22.12 at 8:28 am

Today’s subject needs to read the book: “Where are the customers’ yachts”. And meet with Frugal Chad.

#99 a prairie dawg on 10.22.12 at 8:33 am

F doing his “Talk to the hand” impression.

http://www.theglobeandmail.com/report-on-business/economy/housing/flaherty-eyes-privatization-of-cmhc/article4627593/

The original:
http://www.youtube.com/watch?v=h8Fyf4R-nzI&feature=fvwp&NR=1

#100 Dmitri on 10.22.12 at 8:42 am

Way to go Stan! I guess common sense is so rare animal these days. But when you have no drop back option you must stick to it to survive. And with common sense handy you will be way ahead of your peers in the long run.

#101 Expat in NC on 10.22.12 at 8:43 am

This may have been posted, and my apologies if it has, but I think everyone (not just us on this blog) should read this article:

http://business.financialpost.com/2012/10/03/as-housing-market-slows-industry-scrambles-to-paint-positive-picture/

#102 20something on 10.22.12 at 9:14 am

I’m looking forward to your presentation tomorrow.

#103 Sam j on 10.22.12 at 9:19 am

Hi Garth; I have 2 questions.. Firstly, I will be at your presentation tomorrow, is it possible to purchase a signed copy of your book? Secondly, if my brother wants to come with me, is it possible. (I only have 1 seat reserved). I look forward to seeing your presentation tomorrow.

(1) No, but I am giving a bunch away. (2) How big is he? — Garth

#104 Eaglebay - Parksville on 10.22.12 at 9:24 am

#15 gtrz4peace on 10.21.12 at 8:40 pm

We don’t need eastern tree huggers in Western Canada.
Mind your own economy.

#105 Canadian Watchdog on 10.22.12 at 9:46 am

#91 T.O. Bubble Boy

CMHC for sale?

Read between the lines. CMHC is broke and looking for a bailout. It’s coming.

#106 };-) aka D.A. on 10.22.12 at 9:48 am

#49Ex-Cowtown on 10.21.12 at 11:03 pm

#47 };-) aka DA on 10.21.12 at 10:55 pm

The price of shelter is going to revert to 2001 prices along with the cost of materials and labour used to build it. Ya right – and so is a loaf of bread, a quart of milk and YOUR wage.

A lot of people are making less than they did in 2001, so you are partially correct. Also cost of materials doesn’t determine selling price. The world does not work on a cost-plus 15% basis.

When your input costs exceed your selling price it’s called “losing money”. Nobody cares what it cost you. All they care about is what it’ll cost them. And with food and fuel costs climbing, it leaves less money for you.

You are wrong. The world does work on a cost plus basis, or a contingency basis. In any event if there is no profit to be made soon the products and services will no longer be provided and supply dwindles, demand is higher relative to the them limited supply and prices rise to the point that a profit is once again afforded the remaining providers of the products and services. Soon those suppliers who left due to lack of profit return.

Unfortunately through the next cycle prices have already been pushed up that they are not as likely to fall again as so to have the input costs and the whole process repeats itself. This is why prices are quick to go up but sticky to come down – because the world does indeed work on a cost plus basis even you do if you really think about it. What is your minimum wage?

#61Devore on 10.21.12 at 11:33 pm

#47 };-) aka DA

Ya right – and so is a loaf of bread, a quart of milk and YOUR wage.

That would seriously suck for anyone who took out a mortgage post-2001. Not sure what your point is. Without a lifetime of fixed debt ahead of me, I’m perfectly fine with my wage going down, as long as so does my cost of living. I’m not excited by lots of 0′s in my bank account; much more interested in my purchasing power.

Prices are going up. The only way to increase your purchasing power is to increase your value in the marketplace.

#107 Alex on 10.22.12 at 10:03 am

Hi Garth, what do you think about this?

“Flaherty eyes privatization of CMHC”

http://www.theglobeandmail.com/report-on-business/economy/housing/flaherty-eyes-privatization-of-cmhc/article4627593/

#108 };-) aka D.A. on 10.22.12 at 10:05 am

The cost of the things you need food and shelter are going up. The cost of things you want, big screen TVs, Hummers and Harleys etc., are going down.

#109 Just Park It on 10.22.12 at 10:16 am

Quoting Stan – “Signing a contract that amounted to a promise to remain in good health and financially stable for 30+ years never made sense ” – that actually makes me cringe –

Why on earth does anyone think when they get a mortgage they have to follow the terms of the mortgage – I originally signed a 25 year term (should actually have signed a 20 year) – and will have this bad boy paid off in a total of 12 years.

Simply paying acclerated weekly takes years off – a double down especially in the first 5 years makes a huge impact. We apply any tax return or company bonus to our yearly one time payment without penalty.

Of all my buddies – I am the only one who still carries a mortgage – I guess I can blame my trip to Fiji and a sailboat as reasons to not getting it done within 10 years. (Gotta live alittle too).

Use the 7 year rule – it can be done with some discipline.

#110 };-) aka D.A. on 10.22.12 at 10:16 am

You won’t be able to afford the things you want because you’ll be spending all your money on the things you need.

The things you want will continue going up in price because of the contant demand. The things you want will continue to come down in price because of the reduced demand due to people striving to make ends meet and barely being able to pay for the things they need.

#111 Bottoms_Up on 10.22.12 at 10:31 am

#108 };-) aka D.A. on 10.22.12 at 10:05 am
————————————–
Stuffed chicken breasts (from Prime) recently were selling 4/box. Now it’s 3/box, same price. Effectively a 33% price increase.

#112 Bottoms_Up on 10.22.12 at 10:38 am

#83 Whitey on 10.22.12 at 1:44 am
————————————-
Real estate agent fees and moving fees are covered. In terms of lost equity or whatever, no dice. Some departments (foreign affairs) have policies in place where they will rent out your home, or possibly pay for you to not be home, because you will be returning back to your home after your year or two of duty across seas.

#113 T.O. Bubble Boy on 10.22.12 at 10:49 am

Welcome to the new reality of $1.5M+ houses in Toronto: C2492744 –279 HILLSDALE AVE E Toronto, Ontario

A quick search of guava.ca tells the story:

January 25th, 2008 (new build): $1,349,000
December 3rd, 2008: $1,295,000

(I guess it took a year to sell in 2008?)

Then, this year:
September 22nd, 2012: $1,695,000
October 2nd, 2012: $1,595,000
October 22nd, 2012: $1,495,000

So, *IF* the seller somehow magically gets the asking price (ya, right), that would be a price gain of say $200,000 from 2008.

However, this ignores the costs:
(-$44,000) in land transfer tax on the purchase
(-$74,750) for the 5% realtor fees on the sale
(-$40,000) in property taxes — approx. $10k a year x 4 years

Right there, you’ve got about $160k in costs. Add in legal fees and other closing costs and you’ve made less than $40k over 4 years on your $1.3M investment. That’s a whopping 0.76% gain over 4 years!

AND — this assumes that you paid the $1.3M in CASH in December 2008!!!

Putting the $1.3M in the Orange Guy’s Shorts would have turned out better.

Putting $1.3M in the S&P 500 in December 2008 would be much better (up approximately 60% since then).

Gold is up 125%
Apple is up 600%
(yes, RIM is down 85% since Dec 2008, but no one would have put $1.3M in RIM, right?)

#114 T.O. Bubble Boy on 10.22.12 at 10:49 am

(to clarify: $40k gain on 1.295M = 0.76% per year for 4 years)

#115 David SHYU on 10.22.12 at 10:50 am

First post. I hope to be a visionary. Where is ur family safe? Who else do u put faith in but urself.What stops the treasury, as it prints $1=$1 of greaterfool’s credits. Is there a limit to the amount of money they print? Please welcome me to this community, see u tommorow, but could I hear your visionary responses ?

#116 Realtors are in an all out panic on 10.22.12 at 10:51 am

Let them build more condo’s and sell to the stupid and let the bubble get bigger. Every new condo I see going up i smile in knowing he bubble is getting bigger and the crash will be that much harder. Look around sales have stalled and prices are soon to follow. Canadians are beyond maxed out and the crash will hit even that much harder. Keeps building and keep buying. It’s going to be a nasty crash realtors, a nasty crash!

#117 Mark on 10.22.12 at 10:53 am

#111-Bottoms_up
How can that be, Garth and the government say there’s no inflation?

There is price inflation now, asset deflation pending. — Garth

#118 EIT on 10.22.12 at 10:57 am

Stan, you have to start reading up on the state of our world. You’re not going to get by with simple observation alone. Start with something like Currency Wars by Rickards. Eventually get around to Human Action by Mises. Don’t listen to the presstitutes, or the fabian blowhards, that’s all a given.

#119 DM in C on 10.22.12 at 10:59 am

Hey ya’ll — great investment deal in Calgary in Tuscany! Every one wants to live here!

Even if you put down 20%, you’ll still lose money! How, you ask? Well, the current renters have a lease and pay $1,500/month.

Lease isn’t up until August of 2013! So you get to lose money for 10 months, and deal with tenants for almost a year! What a great deal!

http://www.realtor.ca/propertyDetails.aspx?propertyId=12524653&PidKey=1963591191

#120 Daisy Mae on 10.22.12 at 11:04 am

http://bc.ctvnews.ca/big-metrotown-condo-development-sells-out-1.1004146

Hope they’re ‘earthquake proof’….

#121 Ralph Cramdown on 10.22.12 at 11:09 am

The cost of the things you need food and shelter are going up. The cost of things you want […] are going down.

Whatever. My great-great-grandfather only spent a nickel of every dollar of his income on food and shelter combined (and the food! The shelter!), so he had a lot of surplus to spend on things like 50″ TVs, smartphones and 300hp family sedans. My grandkids are going to be spending $1.05 on food and shelter for every $1 they earn, and their shelter is going to be a rented wet cardboard box in a pothole in the road, so no timeshares in Miami for them!

Are real estate commissions a thing you need, or a thing you want?

#122 Hawk on 10.22.12 at 11:14 am

#68 $$$BPOE#1 on 10.21.12 at 11:47 pm

If Canadians don’t want to buy then savvy developers will market to people who will. It’s as simple as that.

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

That’s the problem, it SHOULDN’T BE as simple as that.

Canadians own Canada (well supposedly), not foreigners and not developers. The Toronto downtown has already been ruined by unscrupulous builders and developers having overbuilt in that area.

Some of the buildings are so close to the Gardiner Expressway, it’s positively a hazard. I have no doubt at all that such people acquire their “permits” by bribing people in the government, under the table.

We the sheeple tolerate it instead of holding inquiries and throwing these criminals in prison……..so I suppose to be fair………we are also to blame, ……..since ultimately, freedom is not free.

#123 };-) aka D.A. on 10.22.12 at 11:24 am

#111Bottoms_Up on 10.22.12 at 10:31 am
#108 };-) aka D.A. on 10.22.12 at 10:05 am
————————————–
Stuffed chicken breasts (from Prime) recently were selling 4/box. Now it’s 3/box, same price. Effectively a 33% price increase.

Smart marketing on their part. If you think of it, typically consumer likely has need of 2 or 4 breasts at a time . This way they sell you two boxes instead of just one at the 33% increased price as either 3 is not enough or 1 left over that needs to be supplemented. Smart marketing.

#124 };-) aka D.A. on 10.22.12 at 11:29 am

Sorry for my terrible syntax. No time to proofread – haste makes waste. You know what I meant and it really does not matter anyway.

#125 Whitey on 10.22.12 at 11:33 am

Thanks Bottoms_Up. I fear for my bud then and people like him. It’s one thing to over pay for a house that you may live in forever, but when the home is a temporary pad in the middle of no where then that’s insanity.

#126 Form Man on 10.22.12 at 11:36 am

#104 Eaglebay

actually it would be a very good idea for Western Canada to pay attention to resource management…….or are you one of those idiots who believe exploiting resources quickly with no regard to anything but immediate greed is ‘manly'; and those proposing appropriate and careful management of the environment are ‘ effeminate’………..

#127 Deliverator on 10.22.12 at 11:39 am

your theory of illegal money wanting to invest in canada doesn’t hold water.

Why don’t they buy a resale condo? They can put down 100% not just 10% of their illegal money.

The explanation I’ve heard most is that they are only interested in new properties. A home that has been lived in has bad vibes. Feng Shuei and all that.

#128 Alberta Ed on 10.22.12 at 11:42 am

“The first hunk of the new Station Square development won’t be finished for at least three years.”

If ever. Hope all the money those speculators are putting down goes into an escrow account.

#129 Inglorious Investor on 10.22.12 at 11:50 am

If someone tells you to think for yourself, should you question that advice?

#130 };-) aka D.A. on 10.22.12 at 12:10 pm

Of course dropping the maximum amortization period allowed for a government-backed insured mortgage from 40 years in 2008 to 25 as of July 9 this year is going to slow the market down somewhat. Why do you think they did it in the first place? But let’s not forget that a 25 year amortization was not long ago the norm. The markets will adjust as they already have demonstrated they will with this October’s month to date volume gains making up for the losses in September which were due to a typical knee jerk reaction to the July policy change. That policy change brought demand forward to beat it resulting in a lean September. October is proving things are back to normal.

That CMHC allowed it to grow from 25 to 30 and then 35 and then 40 years is in part what caused that real estate bubble in 2007/08. Why do you think they allowed a longer amortization period to begin with? They just surprised to learn they gave the system a little too much gas then. Problem is there are more often than not no economic breaking tools available – all you can do is let off on the gas and wait for the friction to slow things down.

I am all for the government getting out of the mortgage insurance business. I doubt they will though as they deem it an effective monetary tool in their arsenal but one, I think, they have not yet mastered use of that they can beat the ability of the free market to more perfectly correct imbalances. It’s just that humans are an impatient species and seem hell bent on speeding thing up in which regard government is no less guilty as it mirrors the species it represents.

This is a return to norm not a departure from it.

#131 $$$BPOE#1 on 10.22.12 at 12:13 pm

Flaherty is done – onwards and upwards folks
When Finance Minister Jim Flaherty took steps to cool the housing market over the past four years, he largely did so via the Canada Mortgage and Housing Corp., the Crown corporation that dominates the mortgage insurance market.
Now he says his interventions in the housing market are at an end – and he would like to see the CMHC privatized in the next five to 10 years.

#132 Inglorious Investor on 10.22.12 at 12:19 pm

#55 TRT on 10.21.12 at 11:27 pm

That’s an interesting post, TRT. At the end of the day, it all comes down to supply and demand. The only question is, what is doing to affect same? According to you the primary driver of increased demand in Canadian housing has been immigration, not monetary policy, interest rates or fiscal policy.

People that I know in the RE business have most certainly identified immigration as a huger driver of demand lo this last decade, but in your comment, it’s almost as if you say other factors can be ignored.

Steve Keen, the evil genius economist from Down Under shows that acceleration in credit growth caused prices to rise in Australia (and presumably, elsewhere). Conversely, deceleration in credit growth causes prices to fall.

So, are you in effect saying, “it’s different here”? What about the US? Don’t they still have the highest rates of immigration in the world? Or does Canada have a higher per capita rate of immigration? To be honest, I don’t know ’cause I haven’t checked; I’m just asking. But what you say is certainly worth delving into further.

#133 maltesehamster on 10.22.12 at 12:30 pm

Garth, I have noted that you often refer to relatively safe, reliable and stable (i.e., a lack of constant buying and selling) investment strategies (e.g., preferred bank shares) – and of course, the focus of this blog is often the relatively flat economic reality that is taking hold.

With these in mind, two of my friends have created a free investment web site whose sole purpose is to report on dividend paying stocks and (more importantly from what I read here) ETFs, in particular the true return on investment (historical income as opposed to historical prices).

http://itsx.ca/home/about

Hopefully this is of value – I certainly find it both useful and unique – but of course we all know that the usefulness of most products is dictated by the level of marketing (e.g, 284 sqft condos).

Great blog – look forward to reading it every day!

#134 The real Kip on 10.22.12 at 12:35 pm

Stan should have got his mother to stand in line at the Burnaby condo! Dummy!

#135 Bottoms_Up on 10.22.12 at 12:38 pm

#8 Mississauga on 10.21.12 at 8:08 pm
—————————————–
It’s likely >80% speculators/investors, meaning that they probably already own a place, as well as one or two (or more) speculative/investment properties. As Garth says, it’s the equivalent of a future’s or option contract in the stock market.

What would be important to know is whether these people are sitting on empty real estate (no one living there, they’re just in it for the capital appreciation–which swallows up supply and increases prices) or are they all rented out? I’m seeing more and more empty houses listed on mls, I feel this is from people that have just sat on these properties and now feel it is the best time exit. It’s too bad this is the way it is, because prices would be lower if inventory wasn’t tied up by speculators.

#136 Ex-Cowtown on 10.22.12 at 12:45 pm

};-) aka D.A.:

Thinking the way you do makes my brain hurt:

According to you:

1. Down is up

2. Less money really means more money

3. Debt is wealth

I’ll stick to my own views of the world.

#137 Rainman on 10.22.12 at 12:51 pm

#1 Rainman on 10.21.12 at 7:39 pm
numero uno!
NUMERO UNO ASSAHOLE …

Hey, Dr. WAYNE ( are you really doctor ? ) Do not insult anybody here. Try yourself to be “The First” and we will see how good you are…

#74 Uki on 10.22.12 at 12:03 am

Yes I really doctor. I come here for valuable information, not stupidity …

Well Dr, Wayne, I haven’t heard one intelligent thing come from you? you’re probably a proctologist by the sounds of it?
In any case, I feel sorry for your patients. Listen to Uki and thanks Uki!

#138 Dontcallmeshirley on 10.22.12 at 12:57 pm

#9 FI Guy,

You sound like an “insider”.

Can you tell me where the renewal financing comes from for a mortgage that was securitized as a Cdn Mortgage Bond (ie CMB)?

Would it come from a new CMB issue or someplace else?

There’s “only” $20B of CMB’s issued annually.

Does the $20B cover both new mortgages and renewals?

#139 broadway skytrain on 10.22.12 at 1:00 pm

Or does Canada have a higher per capita rate of immigration? To be honest, I don’t know ’cause I haven’t checked; I’m just asking. But what you say is certainly worth delving into further.
———————————-
May 2010

The United States is home to about 1.6 million Chinese immigrants (including those born in Hong Kong), making them the fourth-largest immigrant group in the United States after Mexican, Filipino, and Indian immigrants.

canada- averaging well over 30,000 immigrants per year, totalling an average of 15% of all immigrants to Canada. This trend shows no sign of slowing down, with an all-time high of more than 40,000 reached in 2005.[11] –

assume 35k avg for the decade to 2010 =350k
inthe 80 and 90 ‘s with HK and taiwain waves -another 350k
leaving out many it seems to be over 700k immigrants from china to 2010

700k scaled to usa is 7M

7M vs 1.6M – 4.38 times higher incidence of the best educated, highest earning, most likely to be successful immigrant group in can than usa

#140 Lucky Sometimes on 10.22.12 at 1:00 pm

#15 gtrz4peace on 10.21.12 at 8:40 pm

—————————————————–
Oil and drugs have a common denominator, both are “bad” but demand keeps growing driven by the old adage of supply and demand. Drugs are a choice we can do without, but like it or not oil provides for lots of the stuff we use today.
We in the first world are addicted to energy with high expectations, do you think we can ever go back to the “good ole times”?
http://www.youtube.com/watch?v=gXCsRlpbqPM

#141 Bottoms_Up on 10.22.12 at 1:04 pm

#15 gtrz4peace on 10.21.12 at 8:40 pm
——————————————-
Your existence is environmentally harmful. But it is what it is.

Our society needs energy. The oil sands is an amazing resource that provides a benefit to Canada. You cannot deny this. Yes it is also harmful. So the question becomes ‘are the risks worth the rewards’?

#142 smartalox on 10.22.12 at 1:06 pm

@TRT #55:

The banks love immigration because it delivers hundreds of thousands of fresh customers every year, to be sold into debt service. Why not? Immigrate to this country, and get a job making more money that you’ve ever seen. With all that extra money, the nice lady at the bank tells you you’re richer than you think.

So you treat yourself to a widescreen HD TV and cell phone, each at an easy $25/week. Then, after watching that TV for a year or two, you start buying the things that you see advertised. Eventually that debt piles up, but the bank offers you a mortgage, so that you can take advantage of low interest rates, AND make an investment in your future.

It’s a good idea, right? Real estate always goes up, everyone says so. It’s how the little guy gets rich.

Selling the mortgage is key, because that’s how the banks securitize your debts. It cuts the risk for them, but doesn’t make it any easier on you.

Welocme to the Canadian dream.

#143 broadway skytrain on 10.22.12 at 1:06 pm

correction/addition ///

7M vs 1.6M – 4.38 times higher incidence of the best educated, highest earning, most likely to be successful immigrant group/// MOST RE HORNY!///in can than usa

and sources
http://en.wikipedia.org/wiki/Chinese_Canadian
http://www.migrationinformation.org/usfocus/display.cfm?ID=781

#144 Buy? Curious? on 10.22.12 at 1:07 pm

Ahaha! Smoking Man, gets, Deleted! I wonder why he thinks it’s important to be so controversial. Can’t he tone his drunk ramblings down to something less radical? These old hippies never learn to do they?

I personally don’t care who and from what country someone who buys a condo now. In a couple of years, you’re going see a whole lot of people moving in together and not like some MTV Reality Show of horny 20 somethings. It’s going to be multi-generational. Gym for the grand parents to do their physio, Party rooms for family pot lucks and security from those looking to be paid back.

#145 Vancouver_Bear on 10.22.12 at 1:07 pm

#55 TRT on 10.21.12 at 11:27 pm
If anything what you said is true, I understand why Americans see bigger terrorist threat from Canukistan than from Mexico. I applaud their efforts to build 15 feet fence around such uncontrolled mess our politicians are encouraging…..It will end bad no matter what spin you put on it.

#146 };-) aka D.A. on 10.22.12 at 1:09 pm

Are real estate commissions a thing you need, or a thing you want? – #121Ralph Cramdown on 10.22.12 at 11:09 am

As a REALTOR myself I like paying commissions no more than anyone else. Certainly real estate fees are not something I like to pay nor are dentist fees, or medical fees. But there are times I need those services for those things I cannot do myself. I know as a REALTOR I could not market my own home objectively without impeding its best prospect for a sale. It’s like the saying; a defendant who defends himself in court has a fool for a lawyer.

Some things, while not a need, I know I can do better with than without so I want them. Of course, as in most things, there is a cost/benefit analysis involved in determining if they are worth it and education which is generally prerequisit to being able to objectively evaluate that.

#147 Vancouver_Bear on 10.22.12 at 1:16 pm

#120 Daisy Mae on 10.22.12 at 11:04 am
That is not necessary, as the developer will get all the money prior to the Big One…..after the fact…..there will be very few if any suing the developer….lots of buildings here will collapse when it hits. Vancouver will become known for biggest mass graves in the world….Mark my words.

#148 Bottoms_Up on 10.22.12 at 1:16 pm

#76 Canadian Watchdog on 10.22.12 at 12:07 am
—————————————————
$60 billion/yr still covers over 170,000 sales at $350,000/sale.

#149 Inglorious Investor on 10.22.12 at 1:17 pm

#122 Hawk on 10.22.12 at 11:14 am

“Canadians own Canada (well supposedly)[…]”

Technically speaking, the Queen/Crown does. Canadian land “ownership” is called “fee simple” or “freehold.” Meaning you can own an estate in land, but you don’t actually have full, free-and-clear rights of ownership (allodial title) to the physical land. Only the Crown holds allodial title, and I believe it applies to all land in Canada.

It’s like when you buy shares in a company via a broker. You are the “beneficial owner” of the stocks but the broker is the actual owner of record. Possession is nine tenths of the law, as they say.

#150 Vancouver_Bear on 10.22.12 at 1:27 pm

};-) aka D.A…….. too many posts from you today…..I guess you have nothing else to do….this tells us how your business is going…no deals eh? Real day job would help to keep you out if trouble.

#151 };-) aka D.A. on 10.22.12 at 1:45 pm

Some things, while not a need, I know I can do better with than without so I want them. Of course, as in most things, there is a cost/benefit analysis involved in determining if they are worth it and education which is generally prerequisite to being able to objectively evaluate that.

For example, I thought I could fix a plumbing problem in our house myself only to learn I was wrong and that the plumber I eventually hired to do the job was cheaper in the long run than me screwing up and then having to hire someone to fix not just what was wrong but that which I screwed up as I endeavored to fix it.

Man calls a plumber to fix his hot water tank. Plumber says he’ll be there at 3:30 and that it is a minimum $100.00 for the service call. Plumber shows up promptly at 3:30 and investigates the problem, pulls out his rubber mallet and strikes the hot water tank, voila it works! Plumber presents homeowner with a $150.00 bill. Homeowner exclaims, “One hundred fifty bucks! You told me a service call was $100! Why $150.00 all you did was hit it with a rubber mallet?” Plumber replies “$100.00 for the service call and $50.00 for knowing exactly where to hit it with a rubber mallet.” Homeowner pays the bill.

#152 luke8929 on 10.22.12 at 1:51 pm

For Real Estate to rise Canadians need the ability to take on larger amounts of debt, where will that come from?
We already have

-Generational low rates small or no down payments and now deferred payments
=Both family members working or multiple working families working to purchase the home
-Mortgage helpers such as basement suites, lane houses, rented rooms etc
-Stagnant or falling wages,
-Dollar losing its purchasing power (inflation) which means more disposable income goes to everyday expenses and is not available to take on more debt.

Unless there is some untapped income streams which I am not aware of Canadians can’t take on more debt for housing. Prices cannot rise under those conditions.

#153 Humpty Dumpty on 10.22.12 at 2:09 pm

Most are lacking common sense #27 CW…

http://www.safehaven.com/article/27407/the-great-canadian-bank-bail-out?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+safehaven%2Fall-articles+%28Safehaven+-+Most+Recent+Articles%29&utm_content=My+Yahoo

#154 dv8 on 10.22.12 at 2:28 pm

#121 Ralph Cramdown on 10.22.12

Whatever. My great-great-grandfather only spent a nickel of every dollar of his income on food and shelter combined (and the food! The shelter!), so he had a lot of surplus to spend on things like 50″ TVs, smartphones and 300hp family sedans.

Ya right ,he had a smartphone ,300hp sedan 50 ” tv, doubt that since they didn’t have them then . and while we are talking about inflation /deflation ya things you need do cost more and things you want cost less .
An idiot i know purchased a 33″plasma screen about 13years ago for $8000 lol I just purchased one for my garage for $399 . You lack knowledge about inflation/deflation/stagflation

#155 Canadian Watchdog on 10.22.12 at 2:33 pm

#147 Bottoms_Up

“$60 billion/yr still covers over 170,000 sales at $350,000/sale.”

Net insurance-in-force is still growing. I don’t know how much more clear that can be.

#156 dosouth on 10.22.12 at 2:39 pm

#18-East Van

Well said….

#157 Stan on 10.22.12 at 2:58 pm

My appetite for risk (and credit) is zero. If I can save up for something, I do so. The time it takes to accumulate money allows me to contemplate whether the effort put into acquisition of funds is worth the payoff. It’s a great deterrent from impulse buying. Quite often I’ll start saving and in the end decide not to spend. I put the money into a rainy day fund instead.

Don’t know about you, but to me nothing’s more comforting than the notion of being able to last an extra month if things go bad.

The loss of purchasing power to price inflation doesn’t even scare me that much, because inflation typically indicates things chugging along well in the economy. New money makes it into the system and circulates fast enough for everyone to be happy (relatively speaking). Wages rise. Jobs are plentiful. When the deflation hits, that’s when the purchasing power of savings begins to rise. They get more valuable when needed the most. It’s like an inflatable boat that activates automatically the moment it touches water.

When it comes to friendships, I find it ironic that more people liked being around me while arguing I was wrong. The moment they began agreeing with my observations, that’s when they themselves chose to no longer associate with me. It’s their choice. Their well-being is not my responsibility.

I’ve got my own family to take care of. They appreciate what I do and to me it’s the only thing that matters.

#158 Canadian Watchdog on 10.22.12 at 3:23 pm

153 dv8 #121 Ralph Cramdown

Why not get some facts?

The Financial Post – Oct 5, 1940 New Cost of Living Index Said Much More Accurate

Use Bank of Canada’s Inflation Calculator to convert to 2012 dollars.

#159 TRT on 10.22.12 at 3:31 pm

#132 Inglorius Investor

Canada has the highest per capita immigration rate BY FAR in the world. Australia is 2nd.

Plus most lax laws on foreigners buying residential RE.

#160 AACI Okanagan on 10.22.12 at 3:48 pm

#47 };-) aka DA on 10.21.12 at 10:55 pm

The price of shelter is going to revert to 2001 prices along with the cost of materials and labour used to build it. Ya right – and so is a loaf of bread, a quart of milk and YOUR wage.
———————————————————–

We actually agree on something to a point. While materials are relatively the same costs as in 2008 , wages of construction workers are starting to fall downward and many (not all) contractors are taking less. So it is somewhat cheaper to build today than 4 years ago. Under current market conditions it ischeaper to buy than build. That is why you see very little ‘spec” building. You could spend $1,000,000 to build a house (land included) but will get that in this market. You would be lucky to get in the $800,000 to $850,00 range. Costs and value are not necessarily synonymous.

PS- you spend way to much time on here, which does not favour you.. just saying..

#161 jess on 10.22.12 at 3:49 pm

55 TRT

Tax agreements
Professor Baker
A New International Tax Order? Philip Baker
Banking Secrecy, Tax Evasion and the “Rubik Agreements” – A New International Tax Order? Università Bocconi, Milan, 17th February 2012.
The UK-Switzerland Tax Cooperation Agreement by Philip Baker University of London.
==
‘The scheme…used artificial transactions to generate tax relief from a property business that owns agricultural land,’

Although the land itself and the business owning it will exist, the transactions are not part of any genuine agricultural business. They are generated only to create an artificial loss that can be set off by users to reduce their tax bill.’
In a Twofold-type scheme, an individual could end up paying no tax at all, by investing around £100,000 yet claiming tax relief on £1 million.
This is achieved as each £100,000 is supplemented by a £900,000 loan taken out by the partnership. That money, after being paid to the farmer, is swiftly repaid to the bank.
The accountants find a way to artificially ‘write down’ the investment to become a loss on paper, even though there was no cash loss.
The original £100,000 goes to the advisers and banks in fees, but the partnership members claim they have made a loss of £1 million, which they set against their income. from the daily mail uk

Read more: http://www.dailymail.co.uk/news/article-2220787/Bradley-Wiggins-accused-signing-abusive-Cayman-Islands-tax-avoidance-scheme-Bill-Roache.html#ixzz2A2bAQRsP

#162 eagle eyes on 10.22.12 at 3:50 pm

I was recently told that the leading buyers in Arizona are Albertans, then British Columbians. Their Real Estate is being fuelled by North of the border Canadians. Where do you think these Canadians are getting financing? Since they can’t get financing from the States – they are pulling equity from their homes in Canada. If Canadian real estate prices falter, it will affect the States. I personally know a few families who have purchased in Nevada and Arizona with credit lines. They tell me that the rental incomes are better than in Canada and they have a positive cash flow from their investment. Works for now.

#163 };-) aka D.A. on 10.22.12 at 3:51 pm

#149Vancouver_Bear on 10.22.12 at 1:27 pm

};-) aka D.A…….. too many posts from you today…..I guess you have nothing else to do….this tells us how your business is going…no deals eh? Real day job would help to keep you out if trouble.

You are partially correct, my business is a little slower right now which is why I am at my desk drumming up more of it. 50% of this business is finding and cultivating leads. So I’m at my desk with two computer screens going, checking listings, researching data, on the phone talking to past clients and prospective new clients. If I don’t do that I will see it in my business activities 3 to 6 months from now. Took some time off in summer and now have to put more effort in to gain back the altitude I lost. Trust me it is not a consequence of the market conditions but rather my own lack of effort. And in between the calls I am making I do occasionally take a break to grab a coffee refill or check such things as what Garth’s Blog Dawgs have to say. };-)

What did you think, we all sat in open houses and waited for our next prospect to walk through the door?

#164 Dontcallmeshirley on 10.22.12 at 3:53 pm

For the more academically inclined, this is a great paper on CMHC, CMB and NHA MBS by KPMG.

If you want to know how mortgage funding works, this is the place to go:

http://www.twistfinancial.com/documents/Finalreportrelease.pdf

#165 jess on 10.22.12 at 3:53 pm

…”Wheatley just admitted that 45% of the UK mortgage loans at the “market’s peak” were liar’s loans and implied that it was the norm for such loans to be fraudulent. By 2006, roughly 40% of U.S. mortgage loans originated that year were liar’s loans and that rate had been growing massively, so it is likely that the percentage of liar’s loans made in the early months of 2007 was 45%. The equivalence of the British and U.S. fraud epidemics that drove their respective crises is striking – and generally ignored in both nations.”…

http://neweconomicperspectives.org/2012/10/the-city-of-london-continues-to-drive-the-criminogenic-regulatory-race-to-the-bottom.html#more-3535

#166 Albert on 10.22.12 at 3:57 pm

I just searched on realtor.ca for houses in Surrey and there are only a handful of homes for sell,

Where are all the houses in Surrey ??? are they all sold or ??

its very weird…

http://www.fotopu.com/fullsize/255516

#167 Rene on 10.22.12 at 4:04 pm

I like Stan. He can comment on your blog anytime.

That’s more than I can say for most people here.

#168 mikef on 10.22.12 at 4:16 pm

—-> Garth will not like this post. Banks/Big Business want a high influx of people and money coming in. Share values remain high as corporate profits rise, etc.

Garth may not like it, but that is the way money
works.
Infinite growth.
More debt,more money has to be made.
Business,government it is all the same.

I laugh when all the tree huggers say we can replace
70% of fossil fuel use with renewables?

How the heck is the economy going to pay its debts?

#169 Babblemaster on 10.22.12 at 4:16 pm

#41 Bigrider

Humans are classified into several different races. Why? Simply because biologists just love to classify organisms into different groups and humans are not excluded from this proclivity. However, the fact is, the differentiation, based on physical traits, between the “races” is somewhat fuzzy and has no taxonomic relevance. All humans belong to one race only and that is homo sapiens. This is also true of those that persistently make extreme and simplistic generalizations of one particular ethnic group in the city of Toronto.

#170 Market Mechanic on 10.22.12 at 4:28 pm

Hi Garth,

Actually, the judgement of crowds is very, very good. This is why you keep arguing for people to invest broadly in the stock and bond markets.

Real Estate has the unique problem in that I cannot take a position against the muppets lined up to buy shoe boxes in the sky. I can’t short them. The market has no way to communicate to them properly. And, worse, government gives them insurance through CMHC that is ostensibly below what a private mortgage insurance market would offer.

What you are seeing here is a lot of government distortion and subsidization, and people are acting accordingly. It is awful and potentially ruinous.

We must also remember that these people might not be so stupid after all. If we do see do see a big market correction, or even a slow motion financial wrecking ball over several years, there will be incredible pressure on government to help bail these people out (mortgage forgiveness, further government support, restructuring, more occupy movements – you bailed out the auto companies, why not poor Joe Blow homeowner? – etc.). Once the government commits to “helping” people buy homes, it is rational for people to suppose that the government might offer more help, perhaps huge wealth transfers, if things go bad. Collectively, people might be pricing in the chance of a big government bail-out, and that chance, even though small, can have a big effect on price (it’s insurance at zero marginal cost).

You were in government once, Garth. Tell us, how easy is it for politicians to ignore the pleas and begging of the base that got them elected?

(Disclosure: I don’t own residential real estate, but I do have a portfolio of stocks, bonds, and REITs that more than pays the rent on my larger box in the sky.)

#171 Scott on 10.22.12 at 4:49 pm

#165 Albert – I noticed the same thing. It happened over the weekend. The houses are still there, but they’re not showing up on the search results area. I have been keeping track of a few MLS#s, and I can still find them manually through the MLS# search form, but they no longer appear in the main map screen.

Very weird.

#172 Dontcallmeshirley on 10.22.12 at 5:15 pm

#162 };-) aka D.A.,

Please be more specific?

How many sell listings do you have today?

Roughly, how many active buyers are you showing too?

Specifics would go a long way to deflecting all the blawg dawgs chiding you about not being busy.

Tell’em you currently have 30+ sell listings and have been showing to 40+ qualified buyers. That’ll show’em who’s busy and who’s not!!!

#173 };-) aka D.A. on 10.22.12 at 5:22 pm

#159AACI Okanagan on 10.22.12 at 3:48 pm

New and resale always teeter tooter back and forth. New construction becomes too expensive due largely to busy trades pushing up their rates and then the demand shifts to resale – resale becomes too expensive as the trades drop their rates in order to get work drawing buyers from resale back to new builds. Right now I see us in a bit of a transition from resale back to new builds. SHIFT HAPPENS.

You are correct and we do agree that it is largely the labour component of construction which draws buyers to new from resale or scares them away from new back to resale.

On your other point, thanks for the heads up and check out my comment at #162.

#174 Hawk on 10.22.12 at 5:29 pm

#122 Hawk on 10.22.12 at 11:14 am

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

Agreed and that is wrong………not that I’m against the Queen at all :-) …….just that we should own our own land 100% ……as citizens of a free country should.

#175 jess on 10.22.12 at 5:33 pm

virtual faith

e-Voting Company Could Intercept and Change Ballots Without a TraceBy Gerry Bello and Bob Fitrakis, The Free Press | Report

The Columbus Dispatch reported on Sunday, October 21 that in Ohio, “The campaign of Republican Mitt Romney plans to station Election Day Task Force members to record the name of every voter who walks through the door and feed it to a ‘national command center’ database in Boston as part of an unprecedented high-tech get-out-the-vote effort.”

Sources at Smartech, the company responsible for stealing the election in Ohio in 2004, revealed to Free Press journalist Jill Simpson that the next man in the middle attack would be launched by Scytl from its US headquarters, a location in suburban Virginia that was formerly owned by its managing director, Hugh Gallagher, and seems to serve as his private home. We believe it was Hugh who watched from the windows as our investigators photographed the home.

Scytl is not the only election related business that has been run out of Mr. Gallagher’s seemingly crowded residence. Since 2004, some shell company called Election Training Inc. has called some part of Mr. Gallagher’s 5-bedroom home its headquarters. A phone records check on Election Training’s number yielded us something called Election Systems Acquisitions and Management, also at the same address, allegedly founded in 2002 but listing Scytl as its website. Scytl entered the US elections market on January 11, 2012, when it announced its acquisition of Tampa based SOE software. SOE software is election management software that specializes in internet voting and election results reporting in 900 jurisdictions in 26 states. What exactly Elections Systems Acquisitions and Management did for the decade preceding this event is at best obscure….
http://truth-out.org/news/item/12256-e-voting-company-could-intercept-and-change-ballots-without-a-trace

#176 Tony on 10.22.12 at 5:42 pm

Re: #161 eagle eyes on 10.22.12 at 3:50 pm

Problem is if there actually is a capital gain when they sell “America will eat them alive”. We all remember the tax change enacted by Ronald Reagan just before he left office. Something people who live outside of America should consider before buying.

#177 -=jwk=- on 10.22.12 at 5:42 pm

#64 TRT

CMHC hit 96% of their allowance in June 2012 a 2% gaon on Decmber. At that rate they run out of room in less than 18months.

And how did they stop the increase? “CMHC has reduced access to its portfolio insurance product which is expected to reduce volumes going forward to levels consistent with those experienced prior to the liquidity crisis.”

Like I have said before, people weren’t willing to PAY 1M per house, they were willing to BORROW 1M per house. It is the supply of money that gooses the market, not the supply of houses. And what happens when they can’t borrow anymore?

#178 Ralph Cramdown on 10.22.12 at 5:56 pm

#158 TRT

Canada has the highest per capita immigration rate BY FAR in the world.

It doesn’t bother you AT ALL that I can simply highlight a phrase from your unsourced assertion, right click, select “google search,” select an appropriate result from the first page, and confirm my feeling that you’re wrong? Granted, some of the results are a few years old, and I’m pretty sure that some of the highest net immigration countries have become net-emigrant since their busts…

#179 Ralph Cramdown on 10.22.12 at 5:59 pm

#165 Albert
I just searched on realtor.ca for houses in Surrey and there are only a handful of homes for sell,

Where are all the houses in Surrey ???

Try the commercial site at http://www.icx.ca/index.aspx because, as far as I can see, nearly everyone in Surrey is also running an unlicensed used car sales lot from their front lawns.

#180 Lebensaar on 10.22.12 at 6:16 pm

#168 Babblemaster:

Your assertion is really politically correct, you get a gold star! But, like it or not, we are animals and animals also have “races”. One example of this are resident versus transient orca populations in the Pacific Northwest. They belong to the same species but have totally different behaviour, food preferences, etc.

Trained professionals can easily tell the difference between a European, African or Asian skull. There are many physical differences between human populations, and these are based on genetics. Skin color and eye shape are only the tip of the iceberg. Genetically we can be separated into races quite nicely by our complement of HLA (MHC) immune receptors.

Mix the genetic differences with extreme cultural differences (you can’t argue that someone growing up in China has a different mind-set from someone growing up in Cameroon), and you get lots of diversity. You can stop thinking in large “colours” like white, black, yellow. There are many more “races”… in fact the human population in sub-Saharan Africa is much more diverse than anything found in other continents.

There’s a clear genetic difference between North and South Europeans. Take a Sicilian and a Norwegian at birth and bring them up in China, you will see differences.

These differences in the end could influence home speculation. I am not a racist but if you live in Vancouver, go tour one of the large casinos in the suburbs and tell me the clientele is representative of the population… you will see 90% Chinese. Vancouver RE is one big casino!

Garth I hope you don’t delete this.

Why would I? It’s hilarious. — Garth

#181 Smoking Man on 10.22.12 at 6:52 pm

You guys are so dumb responding to fake smoking man

No link, No Smoking Man

#182 CrowdedElevatorfartz on 10.22.12 at 6:58 pm

Ahhh YES BPOE to buy real estate.
Hmmmmm, Tell that to the City of Vancouver .

They assumed the Olympic Village mortgage of $740,000,000.00 and had Bob Rennie flog it. Out of aprox 700 condos Bob has sold aprox 550. Only 150 left to sell !
The City of Van is trumpeting the success of the project!
Trouble is…… with almost 75% of the units sold…. the city stil owes $430,000,000.00

can you say 50 cents on the dollar ?

#183 Victor on 10.22.12 at 7:00 pm

http://business.financialpost.com/2012/10/22/toronto-home-sales-showing-more-signs-of-slowdown/

Toronto builders offered more signs the housing market might be running out of steam and say it’s tough new lending rules that are impacting sales.

The Building Industry and Land Development Association said year to date there had been 26,392 home sold in the greater Toronto area. The number is almost a match for 2010 but down 23% from 2011 which was a record-breaking year.

September is a different story. The 2,070 new homes sold in the GTA last month was second-lowest total for September in 13 years.

“Changes to mortgage rules by the federal government and a tightening of lending for GTA projects by the banks have diminished consumer confidence and, ultimately, new home sales across the GTA,” said Bryan Tuckey, chief executive of BILD. “It is important to recognize that the industry launched fewer new projects over the summer, which resulted in fewer home sales in September.”

#184 Westernman on 10.22.12 at 7:01 pm

Form Man @ # 126,
As usual you misinterpret everything you hear so I will simplify it to a 10 year old level so you can understand – he’s saying we don’t need a bunch of liberal, socialist, eco-nazi easterners telling us what to do out here in the west.
Capish dunderhead?

#185 Babblemaster on 10.22.12 at 7:06 pm

#180 Lebansaar

My personal view on races has nothing to do with liking or disliking. Granted there are superficial differences between people of different regions. Whether you are looking at hair, skin, eyes, bone structure, etc., the differences are minor. Also, they are not even absolute or consistent within a so-called race. The fact is, we all have the same ancestry, if go back far enough. We can all interbreed and our offspring are perfectly fertile. To categorize our differences into racial groups is meaningless and useless. Not to mention dangerous.

BTW, scientists say it could have taken as little as as 10,000 years for black people to “evolve” into white people after migrating to northern Europe. As proof, think about Michael Jackson.

#186 TurnerNation on 10.22.12 at 7:10 pm

Blue Mountain, ON. Power of sale condo. The vacays and cottages are first to go.

http://chadtraynor.com/listings/listing_body.php?id=39517#jumpDescription

BEING SOLD POWER OF SALE NO REPS OR WARRANTIES MADE. PLEASE ATTACH SCHEDULE B TO ALL OFFERS WITH 48 HRS IRREV. DEPOSIT MUST BE CERTIFIED TO GOWLINGS. BUYERS TO VERIFY ALL APPLICABLE TAXES AND FEES

#187 TurnerNation on 10.22.12 at 7:13 pm

Geez another Collingwood power of sale (POS) from the same guy. Nice old house.

http://chadtraynor.com/listings/listing_body.php?id=39523#jumpDescription

BEING SOLD POS

#188 };-) aka D.A. on 10.22.12 at 7:18 pm

#172Dontcallmeshirley on 10.22.12 at 5:15 pm

There is a saying in the business; “Listers Last”.

It’s not about how many listings you have but how many motivated sellers listings you have. The rest of the business flows from that including a balanced lifestyle.

Right now I do not have enough quality listings of motivated sellers and I am busy finding new business which to replace the dead wood.

It’s a business. Not a game, not a charity… a business.

#189 debtful on 10.22.12 at 7:23 pm

This tells us lots. Like (a) half the people you know are insolvent, with more debts than assets. A disruption in cash flow is a disaster. (b) In a country where 70% own real estate you can see what mortgage debt has done.

How about the debt of our governments and the massive printing out of thin air just to pay the interest and the taxes they charge? The debasement of currencies and taxes on just about everything is a much bigger factor that impacts the individual’s purchasing power.

Why can’t you talk about that?

For what point? — Garth

#190 jess on 10.22.12 at 7:27 pm

tonight foreign policy debate = more drones

Sunday, Oct. 21, 2012

America should brace for cyber-war blowback

By WALTER PINCUS
The Washington Post.

see – the Shamoon computer virus

#191 Junius on 10.22.12 at 7:31 pm

#178 Ralph Cramdown,

Are you trying to confuse our friend TRT with facts again? Don’t you realize that polemic pumpsters don’t use facts because they spoil the game. He is way, way too trapped by his own dogmatic views to listen to reason.

#192 Junius on 10.22.12 at 7:33 pm

#177 =jwk=,

You said, “It is the supply of money that gooses the market, not the supply of houses. And what happens when they can’t borrow anymore?”

Exactly. Or worse still when the banks have to start calling on the insurance to pay for defaults. It is a house of cards ready to start falling over the next few years. TRT has no idea what he is talking about.

#193 TRT on 10.22.12 at 7:34 pm

#178 Ralph Cramdown said,

“It doesn’t bother you AT ALL that I can simply highlight a phrase from your unsourced assertion, right click, select “google search,” select an appropriate result from the first page, and confirm my feeling that you’re wrong?”

Put your money where your mouth is! I’m willing to bet $100,000 that I am correct. Bring a legal contract. Anytime. Anywhere.

I despise people like you who have vested interests. the lowest of the low.

Its telling that you tried picking holes in my posts rather than add something constructive.

#194 Junius on 10.22.12 at 7:37 pm

#162 eagle eyes,

You said, “I was recently told that the leading buyers in Arizona are Albertans, then British Columbians.”

Same for Palm Desert and Palms Springs. Just speaking to a friend that owns there and he says that some people think more than 50% of the current buyers are Canadian. Probably high but he says that the direct flights from Vancouver and Calgary are packed these days with lots of people looking to cash out into the sun.

#195 TRT on 10.22.12 at 7:38 pm

#182 Junius,

Junius is a Lawyer in Vancouver who’s firm serves recent immigrants. His colleagues actually work in immigration law.

Just search his past posts and you can figure it our for yourselves.

Man up Junius! If the above info is false, state your firm’s name. Put up or SU!

#196 Junius on 10.22.12 at 7:39 pm

#193 TRT,

You said, “I despise people like you who have vested interests. the lowest of the low.”

You are such a hypocrite. You post the same drivel day after day because you are a realtor trying to convince people the market remains hot when it is dropping. You feign to be objective but you clearly are not as you are never open to any arguments contrary to your opinion.

What do you think this is – Fox News?

#197 Junius on 10.22.12 at 7:42 pm

#182 CrowdedElevatorFartz,

I predicted the city would lose roughly $400 million on the Olympic village. Hard to say where it will all end up with all the costs but it will certainly end up north of $300 million at the current rate of sales.

#198 Canadian Watchdog on 10.22.12 at 7:44 pm

GTA NEW HOME SALES DOWN 90%

#199 Form Man on 10.22.12 at 7:50 pm

#184 westernman

I see by your post you are admitting you are firmly in the ‘idiot’ camp………….good for you !

#200 Snowboid on 10.22.12 at 7:58 pm

#162 eagle eyes on 10.22.12 at 3:50 pm…

Of the 20 odd Canadian buyers we met in Phoenix, from Ontario, BC and Alberta – all paid cash.

But you are right, if Canadians used HELOCs then they need to carefully watch the declining values of their Canadian RE.

#171 Scott on 10.22.12 at 4:49 pm…

On a Sunday cruise of open houses in Kelowna we saw at least 6 homes that have an MLS number, but don’t show up even though they appear to have been for sale for awhile.

#172 Dontcallmeshirley on 10.22.12 at 5:15 pm…

How about none!

#201 Canadian Watchdog on 10.22.12 at 8:02 pm

Correction on #194. -47%. My bad. Excel copy and paste slip.

New lending restrictions impact home sales

#202 eagle eyes on 10.22.12 at 8:22 pm

#176 Tony on 10.22.12 at 5:42 pm
Re: #161 eagle eyes on 10.22.12 at 3:50 pm

Problem is if there actually is a capital gain when they sell “America will eat them alive”. We all remember the tax change enacted by Ronald Reagan just before he left office. Something people who live outside of America should consider before buying.
______________________________

I wouldn’t worry about capital gains, which only applies when you sell at a profit. With the inevitable deflating RE market in Canada, Canadians will soon discover that selling RE in the States may be a problem.
*RE in Arizona = Illiquid

#203 TRT on 10.22.12 at 8:24 pm

#196 Junius

Have you ever asked yourself why you’ve been so wrong about RE the last 10 years? Just wishing something to be true doesn’t make it! ;)

#204 nonbeliever on 10.22.12 at 8:50 pm

I want to short all the closings come 2015!

#205 Herb on 10.22.12 at 9:10 pm

#195 TRT,

Newsflash for you: the fact that Junius is a lawyer has been known on this site for years. Your point is?

#206 TurnerNation on 10.22.12 at 9:14 pm

#198Canadian Watchdog

Within my small C01 MLS search area – ~Queen st. down to the Lake, bounded by ~Bathurst and ~University to the left/right, I see 50-80 new listings coming on-line, each day! Condos. Yet the TO Solds condo sales are showing little movement in this area. Realtors must be panicked.

#207 “I used to go to the parking lot with my co-workers, point at the realtor section and say: “See these cars? They’re bought though fees and commissions you paid when you took out the mortgage. When you buy property, you purchase a BMW as a gift f on 10.23.12 at 9:31 am

[…] Stan from Vancouver, as relayed by Garth Turner at greaterfool.ca 21 Oct 2012 Share: This entry was posted in 05. Where do Buyers get the money?, 11. Regrets about Investing […]

#208 Tom Vu on 10.23.12 at 2:49 pm

BPOE … I am KING of Real Estate!! I am KING … but we can rule TOGETHER! (I am nice guy). I buy ALL Vancouver Real Estate and sell for MILLIONS!! We are CHAMPIONS!!!

#209 furst on 10.23.12 at 6:56 pm

The big night – a poem by Furst Sitting in the ballroom, packed to the brim My heart is racing, waiting for the lights to dim A sea of faces, no one I know Time to let, a few words flow What will we hear about the state of our town? Some will cheer, Smoking Man will frown Time to let, the bearded one speak His message is wise, not for the meek So turn off your phones, now the show begins The Real estate horny will be shown their sins

#210 Andrew on 10.23.12 at 11:23 pm

Burnaby is not “Commuterville”. Not everyone in the Vancouver area works in downtown Vancouver you know. There are some fairly significant office developments in Burnaby (e.g. Telus headquarters).

Doesn’t change the fact that Burnaby condos are overpriced though.

#211 JC on 10.24.12 at 2:00 pm

I work near where the Station Square complex is / was. We use to go for lunch there and frequent a Thai place that sold a fair $8 lunch special. Then one day, BAM!, bunch of fences went up and a big board saying new condos would be coming in. Metrotown is a great place to go shopping and eat, but definitely not to live. Skytrain is nearby and there are often shady types hanging around at night. In addition, if people did some research, there’s tons of dilapidated social housing a block or two away. Overall, the ‘posh’ condos just don’t fit the area, and good luck to all the naive people buying boxes in the sky.