Badass

badass2

His nephew is a trainee at one of the Big Five banks.

“Customer in Surrey comes in for a $500k loan (last week),” says Robert, repeating what the boy banker told him. “The guy squeaks by on the qualification for the mortgage payment, but is $10,000 short on the 5% down.  Helpful personal banking loans officer suggests that he take out a 10k line of credit, give it to his father, so his father can give it back to him with a gift letter.  Voila, 5% down.  After all, you’re richer than you think.

“My nephew, needless to say,” adds Robert, “is rather disenchanted at the prospect of a future of cubicle dwelling at this upstanding institution.”

As I mentioned some days ago, house buyers needing 95% financing are not allowed to borrow the last 5%, or their loans won’t be eligible for CMHC mortgage insurance. So what the boy witnessed was illegal. And if the loans officer’s willing to do this in front of a moist little trainee, it makes you wonder if the practice is routine.

More importantly, is real estate in such a descent in poor Surrey (and elsewhere) that even bankers are going badass? “The people I work with are largely in shock,” says an IT guy toiling in the mortgage originations centre of another massive bank with a $145 billion home loans portfolio. “Business is now down by two-thirds and I bet half the people won’t be there by June.”

Safe bet. Big downsizings in store, and this will be one lonely year to be flogging mortgages.

Consider some of the news of the past twenty-four hours, if you doubt me.

Teranet tried as hard as it could to hide the bugs on its December numbers (“December home prices up 3/1% in 12 months,” its release headlined), but it didn’t work. Every market in Canada has fallen from historic highs with the exception of Hamilton and Quebec City. Vancouver prices are down 4.3%, which doesn’t sound like a lot until you realize it’s the third biggest monthly drop since the 2008-9 meltdown, the two others being August and September. Ouch.

Victoria is down 5%, Edmonton negative 11% and Calgary lower by 7.4%. Toronto has three declines in a row and this is the second-biggest tumble for the six largest markets since the depths of March, 2009.

But all this is piffle compared with new construction in the godless GTA. The latest RealNet numbers speak for themselves: Total monthly sales the second-lowest on record. Total sales in 2012 down by 18%. December sales an arresting 52.1% lower than the same month a year earlier. Inventory of unsold condos up 29% over late 2012.

Yes, prices are higher even as sales slag, due mainly to a 44% jump in the cost of new detached homes over the last four years as the number of available units shrivels. So, condos are flooding the GTA and new SFHs are relatively rare. Condo prices are starting to deteriorate along with sales while detached houses get more unaffordable and rare. This is not a happy market.

Now what do cheating bank loans officers, mass mortgage layoffs and lousy sales have in common? Falling demand – made all the more poignant since it’s taking place amid the lowest loan rates since Kevin O’Leary had hair.

It’s exactly this housing funk which has the Bank of Canada backstroking as it now surveys the real estate landscape. Its growth forecast has been cut and this is the big news: “While some modest withdrawal of monetary policy stimulus will likely be required over time consistent with achieving the 2% inflation target, the more muted inflation outlook and the beginnings of a more constructive evolution of imbalances in the household sector suggest that the timing of any such
withdrawal is less imminent than previously anticipated.”

Does this mean mortgage rates won’t increase for at least a year? Of course not. Most Canadians have locked in (once again) to fixed-rate loans, all of which are financed in the bond market, not tied to the central bank rate. Bond prices have only one direction in which to head as the US economy gains breath. So if the Bank of Canada never upped its rate again, seven in ten homeowners will face increases as their mortgages mature. In the US they called this ‘teaser rates’.

However, as riveting as this may be, it doesn’t matter. The evidence of a real estate reset is too compelling.

Expect a year of drama and contrasts. Sales drought in vast suburban 905 tracts while bidders fight in 416 urban micro-markets. Plunging prices in the Lower Mainland while a top forms in Cowtown. Depression in Edmonton and shock in the Peg. Summer bargains in Muskoka and condo illiquidity in Toronto. Greater Fools lulled by cheap money and cheaper bankers. Sellers who will never look back.

And one jaded kid.

Say, where did all the rebels and heroes go, anyway?

175 comments ↓

#1 TurnerNation on 01.23.13 at 10:05 pm

Just sat down to this scotch-fueled weblog. To those who doubted my Westjet puts…it fell apart.

#2 guelphstudent on 01.23.13 at 10:07 pm

At the same time Toronto (city of toronto) new high rise sales are down 43%, look at the graphs below, and compare how 2012 looks to 2008 and 2009 when we had a financial crisis

http://www.torontocondobubble.com/2013/01/torontos-new-high-rise-sales-down-43-in.html

#3 renters rule on 01.23.13 at 10:11 pm

yikes… is that a Garth mini-me?

:-o

#4 LH on 01.23.13 at 10:11 pm

pockets of C01 still moving with very little quality inventory near U of T St. George Campus

http://www.torontomls.net/PublicWeb/CL_CF.asp?link_no=46877121.175000&t=l&fm=F

(from TOSolds)

22 Brunswick Ave @ 1.425mm for example

Sorry blog dogs but most renters have been permanently priced out for certain “urban micro-markets” aka C01.

#5 nocte_volens on 01.23.13 at 10:13 pm

Is the U.S. economy really improving or is it just bottom bouncing? I think it is too early to tell for sure. I feel any growth in the economy is the result of $85 billion worth of purchases of treasuries and mortgage backed securities by the Federal Reserve. The road to prosperity is not paved with debt.

#6 jose on 01.23.13 at 10:15 pm

carney said today he’s postponing rate hikes. i wonder how much downward momentum the market has

He didn’t. — Garth

#7 Bryan Berndt on 01.23.13 at 10:15 pm

Garth what do you make of the fact that 90% of foreclosed homes are still being artificially kept off the US real estate market?

I’d say that number was fabricated 100% of the time. — Garth

#8 The real Kip on 01.23.13 at 10:16 pm

I thought the picture was you Garth, on a Harley, about 60-years ago!

#9 Lee on 01.23.13 at 10:16 pm

#1TurnerNation

“To those who doubted my Westjet puts…it fell apart.”

If no one felt differently than you, you’d have no market in which to play.

#10 Axxman on 01.23.13 at 10:17 pm

Word of distinction for 2013 – illiquidity

#11 Raj on 01.23.13 at 10:20 pm

“Falling demand – made all the more poignant since it’s taking place amid the lowest loan rates since Kevin O’Leary had hair.”

Hilarious :)

#12 TurnerNation on 01.23.13 at 10:23 pm

Oh, noticed this week how the local downtown mortgage storefront’s office third desk is now manned with a realtor! Sandwich board was a-splay, out front.

Desperate times.

#13 Lily joe on 01.23.13 at 10:23 pm

Garth- you are the hero and all the rebels who have refused the koolaid are on this blog!

#14 Smoking Man on 01.23.13 at 10:24 pm

LaughingCon

might I suggest Aubergine is a good paint colour for a dark basement with low ceiling

#15 The real Kip on 01.23.13 at 10:24 pm

On the last job at King St. West, they made me a movie star. Tim Horton’s wanted to do a commercial on how a crane operator gets coffee so they used my crane and the link below is The real Kip having a Tim’s in the crane. I spent 15-months there across the street from Brad J. Lamb’s office.

http://www.youtube.com/watch?v=ZD97NUR71j0

And I thought you were just a crotchety old, irritating, egocentric, cowboy dink. Never dreamed you were a double-double. Explains much. — Garth

#16 Paolo on 01.23.13 at 10:24 pm

What a mess!

#17 Smoking Man on 01.23.13 at 10:25 pm

Turner nation, can’t say I didn’t advise against that one.

#18 Innumeracy chick...No more on 01.23.13 at 10:28 pm

First time blogging ever! New to investing also as damage control necessary after my husband dumped money into his RRSP each month for 12 years then pulled it out at 30% loss in 08/09 plunge…so I’m learning to manage the finances now and doing okay…and need some help.

So far I did well in Bonds and sold, did well with bank stocks and sold, held on to XIC still holding, EFA still holding, did well in Resources and sold. Bought NYSE:ACN, and TSE:BCE, BCE-PB.TO, some mutual funds which are doing okay and holding. Now what do I buy/do? Any help would be much appreciated!

Garth since I stumbled onto this website I have never been so humoured and informed! Really enjoying it!

#19 Gord In Vancouver on 01.23.13 at 10:30 pm

More Vancouver Real Estate Desperation…

Vancouver Housing Bubble: Why Chinese Investors Will Return

http://www.huffingtonpost.ca/will-lin/vancouver-housing-chinese-investors-real-estate-bubble_b_2537829.html

#20 condopoor on 01.23.13 at 10:34 pm

I met O’Leary last year, shortly after he said in an article that he has no bad habits.

Man, that guy has a black black heart. He makes a good TV drama, though.

#21 Renting in Vic on 01.23.13 at 10:42 pm

If I lie on my health insurance application the insurance company will void it at the time I make a claim. Will be interesting if CMHC decides not to honour the bogus policies and leaves the bank on the hook. Proof will be hard but it might be there.

#22 GTA Girl on 01.23.13 at 10:44 pm

LH: Brunswick ave? A free standing home? Are you kidding me? In that pit of an area? Someone would have topay me to live there. The cement sidewalks turn white from all the university drunks throwing up.

You’d think a detached house off Bloor straight downtown would go for more than $1.4. Especially if weighted with the executive McMansions On the wrong side of Bayview were asking over $4mill.

And your little in-fill project posted was undervalued. The lots worth $500k

The market makes no sense. Factor in those 600sqft condos w/1 bedroom and a cubby hole w/shelf, listed as a den. Worthless

#23 condopoor on 01.23.13 at 10:47 pm

Another condo project with “guaranteed rent” and “38-40%” ROI. Plus, this one is stuffed with students.

I’m glad we’re learning.

http://www.sagecondos.ca/one-bedroom-den-suite-roi-proforma

#24 NFN_NLN on 01.23.13 at 10:47 pm

Garth, based on the “buy low; sell high” theory of investing, should we be selling off a portion of our stocks now? Since the “fiscal cliff” political theater my stocks have jumped considerably.

The “debt ceiling” talks are pushed off until May. If we sell now, can’t we buy back lower before May? Or are you expecting stocks not to pull back?

Sure. Sell stocks and never buy them again. Diversify. — Garth

#25 Smoking Man on 01.23.13 at 10:52 pm

jose on 01.23.13 at 10:15 pmcarney said today he’s postponing rate hikes. i wonder how much downward momentum the market has

He didn’t. — Garth
…………….

Matters not what he said, but what the heard thinks he said…

#26 Paul on 01.23.13 at 10:52 pm

“Say, where did all the rebels and heroes go, anyway?

http://rabble.ca/news/2013/01/january-28-lets-send-harper-message-he-cant-ignore#.UP8buey6zzF.facebook

#27 Foolish Fool on 01.23.13 at 10:54 pm

Lots of investors waiting on the sidelines…:
http://www.theglobeandmail.com/news/news-video/video-sellers-get-surprise-after-listing-home-100k-below-neighbours/article7573216/

#28 Shrit4brawns on 01.23.13 at 10:56 pm

Smoking Man,

Did you read the headlines on the GTA?

Prices will fall.

Mark my words.

Your a bright and insightful fellow, but your not omnipotent.

NO ONE IS.

So, get off your high horse and go get a drink.

#29 MadMan on 01.23.13 at 10:57 pm

Speaking of B.C….

A Juristat Article: “Impaired driving in Canada, 2011″ was released on January 10, 2013 by Statistics Canada.

“Two-thirds of census metropolitan areas (CMAs) reported declines in their impaired driving rate over the past decade. The largest declines (50% and over) were reported in London and Windsor. However, impaired driving rates increased in a number of CMAs, most noticeably in St. John’s and Abbotsford–Mission where the rates more than doubled since 2001. Increases of 50% or more over the past decade were also reported in Kelowna, Victoria, Moncton and Vancouver. ”

Can anyone say “correlation”?

#30 The real Kip on 01.23.13 at 10:57 pm

“And I thought you were just a crotchety old, irritating, egocentric, cowboy dink. Never dreamed you were a double-double. Explains much. — Garth”

You sound like my ex-wife- do you know her?

#31 Bottoms_Up on 01.23.13 at 10:59 pm

Damn Garth, you made me laugh out loud with that pic. OMG.

#32 kreditanstalt on 01.23.13 at 11:00 pm

You do have an unshakeable faith in the alleged U.S. “recovery”, don’t you?

If the “great rotation” out of bonds and into stocks is REAL, why aren’t long bond yields rising? And why is stock volume near record lows?

The Fed and government there will flood the economy with counterfeit “money” before they allow yields to rise. It’s their worst nightmare. Only the banks, with their new prop-trading money, are putting it into stocks.

Consumer junk, retail, banks, tech…the famous POMO-inspired “dash-for-trash” is back.

But the public sure isn’t in it…

Not going to happen anytime soon.

#33 Inglorious Investor on 01.23.13 at 11:01 pm

Oh woe is Canada.

Our tar costs more, yet sells for much less. Alberta, lacking a pipe gets the shaft. Where it was once gushing with oil royalties and arrogance, it suddenly expects a deficit of as much as 6 bills.

And those frackin’ oil and gas drillers in the US might make things even more interesting going forward.

Canadian dollar too high for there to be enough of a spread for American companies who would really rather make it somewhere in the Lower 48 to stay in Canada. Caterpillars crawling to Indiana. Camaros driving to Detroit. Plus the US is undoing unions much more efficiently, while Canadian teachers throw hissy fits over extra curricular activities.

(I thought––silly me––that American wages were generally lower. But a look at the BLS and StatsCan data shows Yankees who work earn about the same as their Canuck counterparts, maybe more in some cases. Sure there are about 50 million in poverty, but as a percentage of the population that’s actually roughly within the trend going back decades.)

Real estate costs much more, on average, in Canada (I think). Plenty of places in the US with cheaper land? The South no longer needs slaves to be economically competitive. Robots and computers can work anywhere and they don’t complain about the duration of potty breaks.

Canadian consumers are tapped out. But Carney gives hope by announcing it’s still too soon to raise the overnight target rate. Mortgage rates may be set by the bond market, but one cannot deny the tight correlation between the overnight rate and mortgage rates (look it up).

So America does have its troubles, and arguably they are playing with monetary and fiscal fire. Anyone who thinks America sucks, well that may be true. But maybe what they will be sucking more and more going forward is Canadian prosperity.

#34 CalgaryRocks on 01.23.13 at 11:04 pm

Yes, prices are higher even as sales slag, due mainly to a 44% jump in the cost of new detached homes over the last four years as the number of available units shrivels. So, condos are flooding the GTA and new SFHs are relatively rare. Condo prices are starting to deteriorate along with sales while detached houses get more unaffordable and rare. This is not a happy market.

Lucky Smokin’ man seems happy in his GTA SFH.

If condos are overbuilt and prices go down, investment pools will pick up available inventory as soon as they can be cash flown on the rental market.

Maybe I’m wrong, that’s what I would do if I had that kind of money.

#35 jules on 01.23.13 at 11:05 pm

When I renew my mortgage, is the loan going to be amortized over 25 years max? I have 35 now.
Thanks,

#36 xyz on 01.23.13 at 11:07 pm

RE: #22

Apparently this condo project is exempt from tax on rental income…

#37 Deliverator on 01.23.13 at 11:11 pm

The analysts at Urban Futures disagree with you:
“Based on these data and projections, long-run trends look positive, pointing towards continued growth in Canada’s housing sector that will be fueled by a growing and changing population. The outlook for the mortgage industry would be the same, characterized by a growing—but changing—consumer base.”

http://www.urbanfutures.com/Charting_the_Future.html

The same guys who claim BC real estate is affordable. — Garth

#38 INTERESTING TIMES on 01.23.13 at 11:12 pm

TOO LATE the 50% RE Crash has started already in Canada. If you are HGTV Virgin who has not bought yet it is time for you to start low balling these realtards by 50%.

If you are an HGTV Virgin who bought with 5% down you got duped by your realtard, local bank slave master, broker and builder (Feel Sorry for You). I hope you bail out soon and save your family or you will be under water soon!!!!

The Facts are the Facts, read and learn all my virgins as TOUGH TIMES are coming for all.

* 70% of CDN living Pay Cheque to Pay Cheque. 80% have no pensions

* Carnival Carney today announced in not so many words on BNN that Canada’s Economy is tanking. Plus he is jumping ship off the Titanic called Canada and going to the UK. He came out and said I warned you HGTV Virgins, it is not my fault.

* CDN only creating low paying retail jobs now. Same problem in the rest of the world. Also many good jobs being lost everywhere globally still. NEGATIVE FEED BACK LOOP!

* Our Brothers & Sisters in Alberta are facing tough times as well. No one wants there expensive crude oil when you can get it cheaper elsewhere.

* Falling RE sales for over 8 months now. Next will be falling prices by 50%.

* Boomers in a lot of debt already, and some on hook for monster mortgages that they co-signed for there kiddies. Banksters will take them both down.

* Empty Condo’s all over the GTA, BC & Montreal etc. If not sold you will see HUGE Layoffs in the TRADES. This is already happening as I have friends in this industry. This industy employees approx 1.5 million in Canada. In next 6 months you will see about 500,000 of these folks unemployeed!!!! Sounds like what happened in the USA, Ireland, UK, Spain etc.

* Scum brokers still giving out 5% CHMC Mortgages until it is tapped out as they will soon be in the unemployment line.

* Bankers, Brokers, Builders & Realtards are in a full out panic. They know the gravy train is ending and will also lose there jobs.

* Brother H & F in the CON government are worried as well now. No more fairy dust to blow up Canadian’s Ass, telling them that Canada is an island.

* Globally many economies are still in a recession from 2008 i.e. Europe, US only a light bounce off the bottom etc. We have record unemployeed globally.

Like I said read and educate yourselfs my HGTV Virgins, read the articles below as TOUGH TIMES are coming for many.

Garth once again thank you for trying to save these HGTV Virgins from there own House Porn slaughter.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/world-jobs-growth-slowing-youths-suffering-the-most-report/article7617649/

http://www.businessinsider.com/blockbuster-closures-layoffs-2013-1
http://business.financialpost.com/2013/01/22/global-unemployment-to-hit-new-record-in-2013-report/
http://www.businessinsider.com/live-weapons-involved-china-japanlife-fire-attack-drills-tracers-japan-f-15s-2013-1

http://ca.reuters.com/article/businessNews/idCABRE90K0WN20130121

http://www.theglobeandmail.com/report-on-business/economy/housing/gta-condo-new-house-price-gap-soars-as-policies-distort-market-industry-group/article7659247/?utm_source=Shared+Article+Sent+to+User&utm_medium=E-mail:+Newsletters+/+E-Blasts

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/long-term-unemployment-part-time-work-still-high/article7664059/?utm_source=Shared+Article+Sent+to+User&utm_medium=E-mail:+Newsletters+/+E-Blasts

http://business.financialpost.com/2013/01/23/global-economic-slowdown-having-fiscal-impact-on-canada-harper-says/

http://business.financialpost.com/2013/01/23/toronto-housing-sales-plummet-50-in-a-year/

http://www.telegraph.co.uk/finance/financetopics/davos/9822372/Money-printing-amounts-to-theft-from-our-children.html

http://www.telegraph.co.uk/finance/economics/9822520/Double-blow-to-hopes-of-avoiding-triple-dip.html

http://www.telegraph.co.uk/finance/jobs/9821055/Record-numbers-in-work-as-UK-unemployment-falls-again.html

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/banks-are-raising-rates—for-those-who-cant-manage-their-debt/article7724326/

http://www.theglobeandmail.com/report-on-business/international-business/european-business/italys-biggest-bank-to-cut-roughly-1000-jobs-in-germany/article7720681/

http://www.theglobeandmail.com/report-on-business/international-business/european-business/britain-on-the-brink-of-losing-its-aaa-status-poll/article7685519/

http://www.theglobeandmail.com/report-on-business/top-business-stories/home-prices-slip-again-first-four-month-slide-since-recession/article7653624/comments/

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/why-the-bank-of-canada-is-keeping-close-tabs-on-the-oil-price-gap/article7652969/

NOW GET OUT THERE and start LOW BALLING these empty homes all over the MLS by 50% and get your revenge HGTV Virgins. Even the taxi Cab Driver and Shoe Shine Boy at the Airport knows that CDN RE will be worth 50% less in Canada. They saw what happened to the USA, Spain, Ireland, UK etc.

#39 Michael F on 01.23.13 at 11:19 pm

Why are Realtors banned from Pamplona’s ‘Running of the Bulls’.

Because they can’t see what’s coming.

#40 DJB on 01.23.13 at 11:22 pm

Kevin O’Leary’s white mortgage product is a harbinger of a market top. I bet his latest venture into the mortgage market will blow up just as well as his hedge funds.

How does he stay relevant, except on Dragons Den or Shark Tank?

#41 Canadian Watchdog on 01.23.13 at 11:23 pm

#19 Gord In Vancouver

Why Chinese Investors Will Return

The below chart depicts what happened the last time dumb money kept chasing higher home prices in East Asia. 

Hong Kong Real Estate History and Market Interventions 1980-2011 PDF

#42 AK on 01.23.13 at 11:24 pm

#23 NFN_NLN on 01.23.13 at 10:47 pm

“The “debt ceiling” talks are pushed off until May. If we sell now, can’t we buy back lower before May? Or are you expecting stocks not to pull back?”

Timing the market is a mug’s game. Good Luck to you.

#43 Mark on 01.23.13 at 11:25 pm

Mortgage spreads will increase for sure as banks realize that they can earn more profit from mortgages by investing less in the sector. After all, with the CMHC taking care of the defaults, there’s no reason whatsoever for the banks to ‘support’ the market with additional investment.

The expanded bank profitability and a general asset rotation should be very good for the TSX. After 2-3 years of stagnation, its time for a good leg up.

#44 NotaGreaterFool on 01.23.13 at 11:27 pm

Garth – Any insight ot thoughts on the upcoming budget by F?

I’ll ask him. — Garth

#45 DJB on 01.23.13 at 11:27 pm

#19 Vancouver Housing Bubble: Why Chinese Investors Will Return

Did you notice that the article was written by the CEO of Rize Alliance Properties?

#46 jan on 01.23.13 at 11:28 pm

Our Vancouver real estate gurus say, the chinese buyers will return, the chinese buyers will return,the chinese buyers will return…

I wonder if there are screwed up countries out there such as canada in this world, o well, as long as the chinese return

#47 Mark on 01.23.13 at 11:28 pm

“If I lie on my health insurance application the insurance company will void it at the time I make a claim. Will be interesting if CMHC decides not to honour the bogus policies and leaves the bank on the hook. Proof will be hard but it might be there.”

If the CMHC takes a hard line with the banks, the banks simply stop renewing loans. And the market crashes to all-cash valuations — pushing hundreds of billions worth of insurance claims onto CMHC.

CMHC, not the banks, are in a corner here. Unless the government is willing to abrogate the rule of law to over-rule CMHC’s legal obligations on mortgages it has insured.

#48 jan on 01.23.13 at 11:29 pm

Oh almost forgot, Bollywood is coming to Van city, that should also help prop up r.e prices here they say.

#49 a prairie dawg on 01.23.13 at 11:43 pm

#34 jules

When I renew my mortgage, is the loan going to be amortized over 25 years max? I have 35 now.
Thanks,

– — –

Each Bank, or Credit Union, or Toronto jewelry dealer, will probably approach it slightly different.

I’d be inquiring with them now, before the crowd.

Or sell. Now.

#50 NAGA on 01.23.13 at 11:47 pm

Rates are staying put for a longer while.

Cdn economy stangant 2% growth = no real growth given rate of inflation – in fact real growth leaning to negative.

Bond tranders should get ready for having to deal with factors that will not let them dictate as they did in Europe when Govt debt roll over during 2013 – so they will not influence interest rate direction.

Reality is that western nations and Japan will continue to stagnate as will RE prices in canada – no implosion coming – “soft landing” is most likely scenario – with significant fewer sales going forward as individuals reset thier balance sheet.

There is still time for taking advantage of the spread bewteen interest rates and return on a diversified portfolio by leveraging accumulated equity in RE for those smarter fools that invested in RE when it was the right time to do so.

Garth your thesis on RE is going off the rails – but you are too stubborn to admit it. Your kiss of death was MacLeans buying it and other media reporters/publishers trying to be contrarians. Too bad your powers of persuasion did not work on Harper….

#51 EIT on 01.23.13 at 11:47 pm

“even bankers are going badass?”

BAHAHAHAHAHAHAHAHAHAHA

#52 Wake up on 01.23.13 at 11:50 pm

I hear so many stories of chinese buying condos everywhere as an investment. I though it wasn’t true, until someone at work told me they went to buy a condo in Montreal for his daughter (before being priced out forever?) and at the same time a chinese was buying two units in the same building. Then I figured it out, I go to the casino once a year and everytime I am surprised that a a lot of gamblers are chinese. I guess gambling there or in real estate, where is the difference. I have two friends with houses on the market for months and no offers except from lowballers, the market is really turning around fast. I also hear all the time that the rise in real estate price in Montreal is to close the gap with GTA, lol, people dont realize that in Montreal we make a lot less and we are taxed a lot more than GTA.

#53 45north on 01.23.13 at 11:54 pm

Renting in Vic: if CMHC decides not to honour the bogus policies and leaves the bank on the hook.

doesn’t sound so hard, what if CMHC demands to see the line of credit of the mortgagee (the guy). what if CMHC demands to see them for the branch, for all the branches in the City? How hard does the bank want to push this – does it want to see its financial officers in court?

Inglorious Investor: Plus the US is undoing unions much more efficiently, while Canadian teachers throw hissy fits over extra curricular activities.

I’m thinking Ontario teachers throwing hissy fits. They pushed it about as far as they could.

#54 a prairie dawg on 01.23.13 at 11:55 pm

“My nephew, needless to say,” adds Robert, “is rather disenchanted at the prospect of a future of cubicle dwelling at this upstanding institution.”

– — –

Robert,
tell your nephew to watch the movie “Office Space.”

That should give him some insight.

#55 coastal on 01.24.13 at 12:01 am

Between your tale tonite Garth, and mine of CMHC not verifying secondary incomes for someone who is about to be laid off in a month (which will be two months before they even get possession), it’s clear to me we have signs of rampant mortgage fraud going on here as the sales slow and the banks need sales to keep their jobs.

Don’t waste your breath on telling the Victoria house pumpers anything about the bond market, cause they clearly don’t understand how the world works. Fuzzy math is in full flight as they preach about paying down over-leveraged mortgages on a devaluating asset. Have you seen the shit that is for sale in Victoria for even $500K – $600K ? Its utter trash in need of major 100K facelifts. Can’t wait for the spring when the buyers go AWOL in droves and the pumpers see reality. It aint pretty.

#56 CalgaryRocks on 01.24.13 at 12:10 am

#34 jules on 01.23.13 at 11:05 pm
When I renew my mortgage, is the loan going to be amortized over 25 years max? I have 35 now

Nope, it continues as usual.

#57 Just Me on 01.24.13 at 12:14 am

Support staff behind the scenes at the banks are scared also. Not because business is bad, but because there is a big push to send jobs offshore.

This ain’t gonna be pretty.

#58 T.O. Bubble Boy on 01.24.13 at 12:16 am

$1.4M skinny McMansion near Yonge&Lawrence sells in days (in the snow and -15C temperatures)… who is buying in such a rush?

#59 DJM on 01.24.13 at 12:16 am

@ #26 Foolish Fool

That house in the news story which was listed at $299K sold for $420K. So instead of listing it at a reasonable price of $450K in the first place, they generated all kinds of publicity and the agent got to put a checkmark in the “sold above asking” box. Ridiculous.

#60 Fodork on 01.24.13 at 12:21 am

For the record- when RE crashes, govt will step in to stabilize banks and underwater homeowners. Lots of collateral damage will happen in the process. In the end moneywise taxpayers will be victims while lenders will get off easy and underwater mortgages will be written down or fixed for 25 year amortizations. That pattern has already happened in the US.
All of us here with better financial sense will be left wondering years from what the best financial move would have been in 2012-2013.

#61 bctown on 01.24.13 at 12:32 am

Great article Garth!, I’m trying to talk my best friend to not buy that house for 450k in Surrey now, and am diversifying our portfolio to etf and reit…it is hard without a good adviser, can you help?

#62 Grim Reaper/Crypt Speculator on 01.24.13 at 12:51 am

I let everyone ahead of me be Fiirsszzztttt…as I see Dr Wanker maintain his looozzerr status (see below )

#63 Freedom First on 01.24.13 at 12:56 am

People can’t come up with 5% down to buy a house, so they lie and cheat to do it. People buy brand new cars with zero down. People borrow against the equity in their house (Heloc) to buy cars, boats, vacations, etc. People have mortgages, helocs, lines of credit, AND credit card debt. And on and on it goes, with many more examples than this to illustrate a point. Many, many people in Canada, have lived, or are living in insanity, and insane behavior has become so normalized, the majority of people do not even know that their thinking is insane. However, in Canada, as well as in the U.S., Europe, Japan, etc., either people will change their insane behavior, or, change will be forced upon you, in the form of “consequences”. When it happens, own it.

#64 Twooping on 01.24.13 at 1:12 am

There’s a Langley condo developer that’s also promoting the circumvention of the min down payment. Their flyer says: “Borrow the $10,000 from your favourite uncle and pay him back when you get the first-time home buyer’s grant”

What a reputable industry.

#65 Gregor Samsa on 01.24.13 at 1:15 am

#32 Inglorious Investor

Good post.

If Obama rejects Keystone XL (and I believe there is a high chance he will), you can kiss Alberta goodnight. NDP should re-take BC and there goes the Northern Gateway to China. Meanwhile the largest (only) buyer of Alberta oil, the U.S., is ramping their own production and cutting their oil use down by investing in new technologies. All this won’t shutter the oilsands, but it will end the constant growth. And the way things are set up now, Alberta requires that constant growth to maintain it’s economy (i.e. it’s not sustainable).

The ultimate irony is that it might force Alberta to actually consider selling their oil to Eastern Canada (oh the horror!).

So a faltering Alberta, record high home prices, record high personal debt, record high government debts, bloated public sector wages, losing manufacturing, losing real jobs, high dollar, losing tourism, losing exports… hmmmm….

#66 prairie person on 01.24.13 at 1:17 am

Between Fulford Harbour and the North End of St. Mary Lake on Salt Spring Island, there are 38 for sale signs.
Not unusual in high summer but exeptional at this time year. Jumping the gun maybe, want to get a sale before the usual spring listings occur. However, on the islands, it is not unusual for houses to be on the market for two years. This isn’t high speed buying and selling. Last I heard, prices were down twenty percent.Although, looking at ReMax’s sales booklet, you wouldn’t know it. Doesn’t look like distressed pricing. Maybe, though, behind the initial asks there is a lot of flexibility. Two houses nearby have been taken off the market.

#67 bubu on 01.24.13 at 1:29 am

Yes, but Calgary and Edmonton will be safe:)

Look here: http://www.theglobeandmail.com/news/national/premier-redford-to-outline-albertas-financial-woes-in-tv-speech-thursday/article7721986/

#68 A Yank in (Parksville) BC on 01.24.13 at 1:39 am

It may only be anecdotal evidence, but I overheard a prominent local Realtor say the other day that in his 23 years in the business here locally, he’s never seen things anywhere near as slow as they have been the last few months. He also said that his clients with houses for sale here locally are mostly in deep denial about what they’ll get for their homes.

#69 Nostradamus Le Mad Vlad on 01.24.13 at 1:54 am

-
“. . . is real estate in such a descent in poor Surrey (and elsewhere) that even bankers are going badass?” — Seems masters have trained their slaves well. Bygone days, or ancient Rome all over again.
*
#222 Smoking Man on 01.23.13 at 9:29 pm — “Sorry Vlad, no offence intended ” — None taken! Besides, when the left coast is submerged after the mega ‘quake, the Okanagan will be prime sea front property. Then we’ll be the proper Left Coast!
*
Soros and Obomba Chinese cities across US? Plus 8:20 clip / song Is the hammer from the Hammer and Sickle, or the USSA? Currency War China, US, Japan and probably others; The State-Owned Bank of North Dakota; Losing Money Lotteries are a tax on the poor, so this is beyond stupid; Merkel – Cameron ‘Twill be interesting if Brits. vote to leave the EU; Lloyds Bank Axed 38K + jobs; HSBC buys lotsa silver; EUSSR Becoming clear why the UK should leave the Euro.
*
1:23 clip Huge triangle shaped UFO caught by ISS; Catalan Sovereignty; Burger King Billions and billions dumped! Facebook Freezer Curious as to why FB would move a section to the top of Sweden; Mutt is Man’s Best Friend; Fake Babies See headline. Better yet, Farm babies out to those who can afford them; Neocons = Trotskyism; 2:10 clip — Pentagon “Wow! I guess we are running out of men!” wrh.com; Anonymous calls for civil war. Killing someone isn’t very civil; Banxters and Stuff Why the hell anyone would want to ‘save’ this garbage dump of a planet is beyond me; Globesity Is there nothing the globalists won’t poison us with to feed themselves?

#70 Vamanos Pest on 01.24.13 at 1:54 am

#46 Mark
Banks will simply stop renewing loans? Are you unaware of how banks make money? Or are you suggesting that out of spite, banks will simply stop trying to make money? Simply not going to happen.

And the CMHC’s legal obligations? The comment you were responding to was in regard to CMHC insurance that was fraudulently obtained. Fraud is against the law. And your counter argument is…wait for it…THE LAW?!

Get a clue man, you’re embarrassing yourself.

#71 Soylent Green is People on 01.24.13 at 1:58 am

Any second Obama will ok the keystone pipeline

I hope #idlenomore shoves it right up his half white azz

And Harper s phat azz
And bibi s azz

Christ I hate Canada so much since Harper ruined it

O

#72 Scully on 01.24.13 at 2:37 am

This week in Vancouver there has been an increase of sellers looking to rent thier homes, condos, etc. Ask any of them why and they will all say that with such low mortgage rates they can afford to rent out and wait for the market to return. An uneasy standoff brewing? Who will flinch first – buyers or sellers? To quote Clint Eastwood, “Do you feel lucky punk? Well…do ya?”

#73 Buy? Curious? on 01.24.13 at 4:08 am

Garth, I saw a buddy of mine yesterday. We were catching up and he told me the good news. He’s getting engaged. I congratulated and asked him if I was invited to the wedding and sadly he said “no”. It was nothing personally because he, like so many others know I’m great at parties, especially if there’s a kareoke machine (Britney Spears’ Piece of Me always win over the wives. It’s all in the hips.). He was having a small ceremony so they could save up and and buy a bigger place. They’re currently living in a condo in Lonelyville, Singletown, aka Liberty Village *barf*. Considering that their combine incomes, at at best, is $120k and they’re still serving student loans (how is that Arts Degree Diploma looking on your wall?), they’re going to have to move out to Oshawa or something just as rural.

Any suggestions as what I can give them for a wedding/house warming present even if I’m not going to the wedding or ever visiting anything east of Pape station?

http://www.youtube.com/watch?v=u4FF6MpcsRw

#74 BC Boy on 01.24.13 at 4:55 am

Check this out: Crazy
Vancouver housing market 2nd least affordable on planet

http://ca.finance.yahoo.com/blogs/insight/vancouver-housing-market-2nd-least-affordable-planet-144442460.html

#75 Rob aka Captian and Mrs slow on 01.24.13 at 5:17 am

@ Innumeracy chick…No more

Please please I beg you start learning about investing, no one should lose big time. So run don’t walk to Amazon.ca and order a copy of Millionaire Teacher by Andrew Hallam. He espouses Garth’s way of investing ETF rebalanced once a year. I’ve given away almost 10
copies and everyone raves about it

@ NFN_NLN agree with Garth buying and selling is a good way to lose money. If you want to own individual stocks than I highly recomend The Dividend Guy Blog book, 15 bucks from Amazon, short and very well written

Rob

#76 MrC on 01.24.13 at 8:36 am

And I read in The Toronto Star yesterday that bidding wars are back on condos and everything is fine.

Then it’s obviously true. — Garth

#77 Mr Happy!! on 01.24.13 at 8:41 am

“Say, where did all the rebels and heroes go, anyway?”

Mexico!

and not a single “first!”….. Nice!

#78 TurnerNation on 01.24.13 at 9:09 am

Kip for Mayor!?

And this. As metioned CIBC raised my unsecured LOC’s rate, already, from 6% to almost 9%, so I’ll not use it. My credit report is perfect, no lates, no misses, no new credit for some time now.

“Globe says TD increases Visa rates for some borrowers

2013-01-24 08:04 ET – In the News

The Globe and Mail reports in its Thursday edition that Bank of Canada left its trendsetting overnight rate alone on Wednesday and made it clear borrowing costs will not increase any time soon. The Globe’s Rob Carrick writes that news, however, presents a false picture of what is happening with the rates some people pay when they borrow money. Selectively and quietly, the big banks have been cranking rates higher for credit line and credit card customers with a less than sterling record in managing their debts. It is all part of a growing trend to tie the interest rates charged on loans more closely to the client’s credit history. Toronto-Dominion Bank is just now sending letters to customers of its Emerald low-rate Visa card that announce higher and lower rates for some, and no changes for others. (This is a card for people who regularly carry a balance and want to avoid the usual credit card rate of 19.99 per cent.) On its website, TD says the new range for the Emerald low-rate card will range from prime plus 1.5 percentage points to prime plus 12.75 points, compared with prime plus 1.75 to prime plus 9.75 now. The bank says the changes were made on what it calls a “risk-based” approach”
© 2013 Canjex Publishing Ltd.”

#79 live within your means on 01.24.13 at 9:22 am

#75 Robert Hiscock on 01.24.13 at 7:01 am
Here in Halifax, having my morning coffee and plugging MLS numbers into viewpoint.ca. Just found out why my landlord is so bad at dealing with issues in his building; he is also a contractor who has a lot of skin in the game in the suburbs. I wonder will this building change hands this year?
……………….
Gfriend has rented in Clayton Park for 20+ yrs. Divorced eons ago. & brought up 2 boys. Few years ago her building (3 floor walkup) was sold and new owner(s) were going to redo each apt. Never happened. She pays $600+. Co. finally provided new stove, but she paid for some modifications on her own. She’ll be 70 this year but you’d never no it – so active, travels & has oodles of friends. I’m really worried, as she had an emergency op. 1 month ago & will see an Onc. tomorrow. I met my hubby thru her. Pardon my OT msg.

P

#80 live within your means on 01.24.13 at 9:25 am

Oops – meant to say ‘know’ it instead of ‘no’. Time for me to take a nap.

#81 TurnerNation on 01.24.13 at 9:32 am

Kanada stands no chance.
We will be Global Low Wage Zone, Prefecture #2; Min wage $10, skilled $15-20/hr. What North American Union?

Ford Bringing Jobs Back To The U.S. At Its Fusion Plant

Workers at the Flat Rock plant celebrated last September when Ford executives came to regain control of the plant. (Ford)
Ford’s new Fusion sedan, chosen as AOL Autos Car of the Year for 2012, is not only the style-king of the current flock of mid-sized sedans, but an example of how companies are bringing jobs back to the U.S. after previously flocking to cheaper-wage countries like Mexico.

Production of the new Fusion, built in Hermosillo, Mexico, for the past six years is moving in a few months to Flat Rock, Mich., to a plant jointly owned by Ford and Mazda. Because Ford plans to build so many vehicles at the plant, it took over 100% of the production lines and hired an additional 1,200 workers at the facility, which is about 25 miles south of Detroit. Ford also builds the Mustang at the plant, and plans to move the next generation design of the Taurus and Lincoln MKS sedans there as well.

http://m.autos.aol.com/article/ford-bringing-jobs-back-to-the-u-s-at-its-fusion-plant/?

#82 The real Kip on 01.24.13 at 9:34 am

“#70 Soylent Green is People on 01.24.13 at 1:58 am
Any second Obama will ok the keystone pipeline

I hope #idlenomore shoves it right up his half white azz”

Racist hate, an ugly human trait!

#83 Jeff in Moose Jaw on 01.24.13 at 9:40 am

Only the banks know how many gift letters are being used, then add co-signing as well – I believe it’s a lot – lot of papers and a lot of signatures.

#84 robert james on 01.24.13 at 9:41 am

I predict that Tattoo removal will be huge industry in years to come.. I don`t know ,, maybe some of these goofs are looking for the Hastings and Main look ,but I have a feeling it will not be that cool when their mental age matures..

#85 Dr. WAYNE on 01.24.13 at 10:06 am

#77 Mr Happy!! on 01.24.13 at 8:41 am

DELETED

#86 The real Kip on 01.24.13 at 10:11 am

“#78 TurnerNation on 01.24.13 at 9:09 am

Kip for Mayor!?”

As your new mayor I will bulldoze every $5 crack shack in GTA and replace it with a beautiful glass condo and the casino is already pre-approved. I will also tear down the Gardiner after we spend 600-million dollars fixing it!

You’re gonna like it!

#87 hangfire on 01.24.13 at 10:19 am

And you thought the Truth Hammer was stretching the facts for political gain…….not a bit……truth can be laid out and accounted for…..it’s the fog of propaganda from the civic serbant and leftis unions that Canadians have to worry about……them first ….you last….whats Canadian about that?

http://fullcomment.nationalpost.com/2013/01/23/jesse-kline-alberta-pays-the-price-of-overcompensated-public-employees/

#88 Huuk on 01.24.13 at 10:26 am

Your view on the GTA is 100% accurate in my opinion.

SFH in the 416 that have not been converted into McMansions are in very high demand. Those original detached post-war houses are a virgins wet dream. No price correction in 2013 on those 30 – 100 year old homes.

Generic 3-10 year old condos are in a lot of trouble in the next 4 quarters. Price cuts across the board on the new supply of glass and concrete skyboxes are driving ‘used’ condos down. The MSM is going to need to do more than just 1 article a day on how great condo living is to try to bail out the builders of 416 condos…the blood is the in water waiting for the sharks to arrive.

#89 Grantmi on 01.24.13 at 10:53 am

#47 jan on 01.23.13 at 11:29 pm
Oh almost forgot, Bollywood is coming to Van city, that should also help prop up r.e prices here they say.

I,m sure that will add 1 home sale to the surrey numbers.

#90 cramar on 01.24.13 at 10:57 am

And speaking of Kevin O’Leary, a couple of days ago he and Amanda were discussing the report that Van RE is the second most expensive in the world in relation to income behind Hong Kong. Kevin said both were caused by HAM. Must be true of O’Leary says so!

————–
#24 SM

“Matters not what he said, but what the heard thinks he said…”

Brilliantly witty play on words… that is assuming that you didn’t just misspell ‘herd’.

#91 DM in C on 01.24.13 at 11:12 am

I get a kick out of hearing the house prices in Halifax. We bought our first home there in ’99 — a bungalow. For $75k. They go for about $200k now. My parents have a post war 1 1/2 story up in the far North end they paid $175k for 7 years ago. Would go for about $350k now.

And they keep pestering us to move back. Why would we, with taxes twice as high, and housing just as expensive as Calgary, with no jobs and lower wages.

Halifax is delusional.

#92 refinow on 01.24.13 at 11:13 am

Is it cheating ?

It really depends on where your moral compass lies and what the future of real estate brings.

Did the Bank loans officer cheat in getting the down-payment arranged?

After all it is not against the rules to lender to a fully qualifying parent a line of credit.

Maybe it is wrong to tell the client exactly how to beat the “system”. But the sentence of “fraud” will only be determined on the future performance of the investment.

The buyer of the house will not see a problem with this action if the value of his purchase appreciates and he makes money.

Realy no different then the NINJA mortgages in the US that were happening before 2008… If someone gave you the means to purchase a home that increased in value by $150,000 or $200,000, why would you ever complain?? Even the Bank’s accepted this type of mortgage business in their portfolio.

I wonder if the buyer of the house will feel that this was ok if the value of his $500,000 purchase drops by a $100,000 over the next 2 years.

I bet he will be first in line on how he was victimized, and how it was the Bank’s fault that allowed him to buy that house that lost him so much money.

SO where is your moral compass pointing these days?

#93 Hoof - Hearted on 01.24.13 at 11:17 am

#84 robert james on 01.24.13 at 9:41 am

I predict that Tattoo removal will be huge industry in years to come.. I don`t know ,, maybe some of these goofs are looking for the Hastings and Main look ,but I have a feeling it will not be that cool when their mental age matures..

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

Yeah I hear that’s Dr Wankers specialty, tattoos in braille for the optically challenged.

Other than that, some of these goofs have so many tattoos they may as well fill in the few spots where
their natural skin colours exist and match the tattoo.

The SF 49ers QB Kaepernick is kinda of a shocker..QBs tended to be one of few athletes with no visible tattoos..changing of the guard ?

#94 Toronto_CA on 01.24.13 at 11:32 am

I have a friend who complained at lunch yesterday about how her RRSP was only earning 3%. So she announced that she had gone in with her boyfriend (all of 22 years old but with rich parents) to go 50/50 on a pre-construction GTA condo, 2 bed + den, ready in 3-4 years. But she got a “GREAT DEAL” ! $40k discount on the price! And she only had to put 20% down (her half was 10%) and the other 5% went to realtor fees.

After choking on my food, I tried to get her to see the GIANT risk of buying a condo future in a city where condos are not selling. How in 4 years mortgage rates will be higher so that no one will buy that unless the price comes way down…and of course if she took her 10% and bought some real ETFs and got dividends she’d probably get 5% on her money. And then could buy a property (she rents now) that is already built in a few years time when she’s ready.

She was saying how she couldn’t actually live in it if they didn’t sell it because the kitchen was terrible and the layout was bad. But her boyfriends parents have done so well in the last 10 years buying Toronto condos and selling them that this was going to do better than her RRSP…

This is happening NOW in the current market…I love my friend but sometimes people just need to do stupid things and find out the hard way what happens when you’re greedy and don’t think about risk.

#95 The American on 01.24.13 at 11:35 am

At #32: Inglorious Investor: Finally, someone on this blog understands that Americans aren’t working for $14/hour in factory jobs. Americans, in general, actually earn more than Canadians in most areas, and significantly more than Canadians in a handful of others. Americans are taxed less, save more, and even have less credit card debt than Canadians. You’re right, Canadians are simply tapped out. I honestly believe any kind of a rate increase in Canada would be devastating for families

#96 DM in C on 01.24.13 at 11:41 am

Two years ago, the Herald would never have covered this story. The RE people are going to have to counter, fast. Watch for a ‘Sales are up” story VERY quickly. I bet this gets buried asap.

http://www.calgaryherald.com/business/Calgary+housing+market+seriously+unaffordable/7865443/story.html

#97 Old Man on 01.24.13 at 12:02 pm

#95 The American – no kidding; kindly tell me more!

#98 Mr Buyer on 01.24.13 at 12:16 pm

#71 Scully on 01.24.13 at 2:37 am
An uneasy standoff brewing?.
……………………………………………………….
Another Real Estate Pumper. There will be no stand off. There will simply be no buyers at all. Get ready to service that monstrous mortgage for the entirety of its term.

#99 Mr Buyer on 01.24.13 at 12:36 pm

#49 NAGA on 01.23.13 at 11:47 pm
Reality is that western nations and Japan
………………………………………………………………
Another real estate pumper. So I am guessing that in your reality Japan had a soft landing? 21 straight years of property price decline continuing to this day. My parking lot is worth about $500 less this year than last. That is an increased loss over last year’s for no apparent reason. The real whopper was after a CRASH of something like 30 percent 18 months after the 20 year ago peak. That is when the in-laws picked it up only to be pummeled another 10 or 12 percent off peak over the past decade or so. Can you imagine that reality, a 30% decline being the stage for their bear trap. Nice reality. The in-laws never had a mortgage on it but there are tons of people that do have properties they are just now getting close to paying off. This is a disaster that is upon us.

#100 Mark on 01.24.13 at 12:39 pm

“Banks will simply stop renewing loans? Are you unaware of how banks make money? Or are you suggesting that out of spite, banks will simply stop trying to make money? Simply not going to happen.”

I am perfectly aware of how banks make money. They borrow for cheaper than they lend. But they don’t *have* to lend if they don’t see a worthy opportunity. If the CMHC starts jerking the banks around on the insurance claims, the banks can simply stop the process of borrowing and lending to residential RE credits. There are lots of other things, such as government bonds, corporate bonds, equities, etc., that they can invest their capital in. Residential RE is not the only investment outlet the banks have available for their funds.

Banks can actually improve their profitability by reducing their lending because, in an environment of scarce credit, the lenders will be forced to bid up the price of credit. This is known as spread-expansion, which can really help the bottom line of the banks. Once banks discover this works as a self-reinforcing feedback loop, there’s no telling how much credit they might restrain from the market to increase their profitability. This, IMHO, is the real danger of the adjustable rate mortgages rather than fully-amortizing long-term debt.

#101 Mark on 01.24.13 at 12:40 pm

edit: “Banks can actually improve their profitability by reducing their lending because, in an environment of scarce credit, the borrowers will be forced to bid up the price of credit.”

#102 Mr Buyer on 01.24.13 at 12:44 pm

#46 Mark on 01.23.13 at 11:28 pm
CMHC, not the banks, are in a corner here.
………………………………………………………….
I am in no way a legal beagle but I am guessing Fraud is fraud and negligence and lack of due diligence are all valid reasons to relieve the Canadian taxpayers of the burden of backing these loans. It is really quite a head scratcher. Taxpayers money being used to back house price inflation so the very same tax payers are back stopping the institutions charging people for the privilege of borrowing ever increasing sums of money for shelter. I could not write a more contorted bunch of non-sense if I tried (well maybe I could at least rival it)

#103 Mark on 01.24.13 at 12:58 pm

“I am in no way a legal beagle but I am guessing Fraud is fraud and negligence and lack of due diligence are all valid reasons to relieve the Canadian taxpayers of the burden of backing these loans. It is really quite a head scratcher. Taxpayers money being used to back house price inflation so the very same tax payers are back stopping the institutions charging people for the privilege of borrowing ever increasing sums of money for shelter. I could not write a more contorted bunch of non-sense if I tried (well maybe I could at least rival it)”

Its quite a disgusting situation, isn’t it, that government funds have been used to facilitate an off-balance-sheet guarantee of the price of an asset class, residential mortgages, that ordinarily would be subject to market forces.

Especially since the guarantees are in fact propping up the market against which additional guarantees are predicated.

Ever heard the story of the guy who was buying a small-cap mining stock, plowing his life savings into it, only to be told that he was essentially the only buyer of the stock and there were no other buyers?

Guess what happened there? Once the guy exhausted his life savings into the stock, the price collapsed because the other buyers had dissappeared.

Nearly 100% of the new loan issuance into the Canadian RE mortgage market was sponsored/guaranteed by the CMHC over the past 3-4 years. CMHC was this proverbial ‘only buyer’. The $600B CMHC limit has been effectively hit. Now we’re going to see some *real* price discovery on what the houses are worth, and trust me, its *not* going to be pretty. Things are falling off a cliff as we speak.

#104 dosouth on 01.24.13 at 12:58 pm

11 million to bring Bollywood awards to B.C. Try putting the funds into childcare, senior care, healthcare – heck the homeless, which some of us will soon be.

Not even trying to camouflage buying votes for the May election with our tax dollars! This is why Christie Clark wanted to get rid of our auditor. The report on this bruhaha should be good bathroom reading for the liberals in opposition. Pathetic wasted of tax payers funds, period.

#105 CalgaryRocks on 01.24.13 at 12:59 pm

#95 The American on 01.24.13 at 11:35 am
At #32: Inglorious Investor: Finally, someone on this blog understands that Americans aren’t working for $14/hour in factory jobs.

Yes 14$ is way too much. Some in the service industry get paid 2$+tips.

The US loves their slaves. Whether it’s foreign professionals working ungodly hours on visas where they are slave to their employer or Mexicans working illegally to send money home.

Even regular Americans are so afraid for their jobs they’ll work 24/7 since that is what is expected. Right to work states are right to work for less and there’s not a darn thing you can do about it.

In some cities you can’t even walk after dark. (Or even before, really).

Going to see a movie? Better figure out where you’ll be less likely to be used for target practice when the local maniac blasts through the doors in full military gear.

Should little Johnny get a bullet proof vest for his first day of school?

Chicken and milk are cheaper. But they’re also full of hormones and other chemicals not allowed in the DEVELOPED world. Make sure you don’t lapse on that health insurance.

Yeah buddy, you’re doing great. There’s nothing left to fix in your country, so I guess that’s why you’re here. To let us know how to fix our problems. Tell us, oh great ‘The American’. We can’t wait.

#106 Bottoms_Up on 01.24.13 at 1:08 pm

#87 hangfire on 01.24.13 at 10:19 am
——————————————-
From the link you posted:

“Governments need the ability to attract talented people who are passionate about what they do.”

Agreed.

“However, it should not be forgotten that every dime the unions are able to squeeze out of the government comes from hard-working people in the private sector, who are producing goods and services that benefit society, rather than rules and regulations, which are largely of benefit to no one.”

Can you please explain how rules and regulations are largely of benefit to no one? Did you see the implosion of the US economy due to lack of regulation of the banking industry? Should landlords and tenants not have rules or protection? Should doctors be allowed to post your health information on facebook? Should teachers be allowed to date students and discriminate? Do you enjoy drinking clean tap water? There should be no caps on pollution?!??

Stop posting such nonsense.

#107 coastal on 01.24.13 at 1:10 pm

Fannie Mae raised mortgage rates a smidgen this morning…and the pumpers say it won’t happen here. A smidgen here and there over a year and we are up a point or two. Funny how the real world works when your head isn’t half way up your ass cause you own a house, you can see things for what they really are, completely over-valued and ripe for one nasty correction.

#108 Tom from Mississuga on 01.24.13 at 1:12 pm

A falling CAD and a recovering US economy = oh oh at the gas station this spring.

#109 Bottoms_Up on 01.24.13 at 1:13 pm

#78 TurnerNation on 01.24.13 at 9:09 am
——————————————
Are credit card rates being increased because the risk is shifting off government and taxpayers and back onto the credit card companies?

#110 give it time on 01.24.13 at 1:22 pm

Just looking at the new listings popping up in the GTA and noticed com-free signs in my neighbours yard. I see a busy spring of listings… noticed another power of sale in a neighborhood close by. I recall walking by those homes with nice cars sitting in the driveway.. who knew the banks seem to be repossessing more and more homes.

#111 AK on 01.24.13 at 1:30 pm

#109 Tom from Mississuga on 01.24.13 at 1:12 pm
“A falling CAD and a recovering US economy = oh oh at the gas station this spring.”

Also, the BOC will be trying to prop up the useless Loonie by raising interest rates. :-)

#112 Mark on 01.24.13 at 1:31 pm

“Are credit card rates being increased because the risk is shifting off government and taxpayers and back onto the credit card companies?”

No, the government/taxpayers don’t guarantee credit cards. However, additional risk is perceived in that particular market due to household balance sheet deterioration, which is why the rates are rising.

Same reason why mortgage rates will rise independant of any BoC moves to change the overnight policy rate target. Investors just see more risk to lending against a particular asset class. With the CMHC $600B cap hit, any incremental credit to the housing sector will be at full subprime rates, while even the cost of existing CMHC-backed credit will be going up.

Many uninformed observers are looking for the BoC rate to go up in the next year or two. I think they will be quite dissappointed. Still won’t keep the mortgage rates at their ultra-low levels though. Risk is coming back, in a huge way.

#113 gladiator on 01.24.13 at 1:46 pm

@106 CalgaryRocks: so true about food in the US! Dairy cattle is given growth hormones (banned in Canada); I once ordered chicken paella in the US, and it tasted like medications… No idea how I didn’t notice it in the 4 years I lived there, but after Canadian food, the US one is carp. Of course, food in Germany beats the hell out of CA and US food quality and taste wise, but that’s another story.

#114 CalgaryRocks on 01.24.13 at 1:46 pm

Can you please explain how rules and regulations are largely of benefit to no one? Did you see the implosion of the US economy due to lack of regulation of the banking industry?

Regulations were there. Nobody enforced them.

For example, it’s always been illegal to lie on your mortgage application.

A related example. Do you think the banksters told their customers that the mortgage backed securities they were buying were based on such things as waitresses stating 150K/year as their income?

#115 Mark on 01.24.13 at 1:47 pm

There is no quantitative easing in Canada. — Garth

How is the government going to fund a tsunami of CMHC insurance claims with a substantially shrunk tax base when 10% of Canada’s GDP in construction and RE/finance activity dissappears? Seems to me that some form of QE will be required, along with a decrease in BoC policy rate targets (ie: ZIRP).

#116 Westcdn on 01.24.13 at 2:00 pm

Real estate prices are coming off the highs in my neighbourhood. My net worth is at risk. I admit my tolerance for risk is high when it comes to saving. I preferred buying individual company shares but would never let any one position exceed 5% of my total holdings. The strategy was to be right more times than wrong with my picks – then ride the winners and sell the losers. The 2008 meltdown was an epiphany and I will be forever grateful to Quantitative Easing for saving my bacon. After that near death experience, I have been lowering my risk profile. Given my age, I have to be more careful of big losses. That means capital preservation with steady income is now my primary objective with capital growth being secondary. It is in my DNA to speculate so I will always have some high risk money out there.
I found this article regarding a simple investment plan based on EFT’s. From what I can gather, Garth has been on this subject much longer. IMHO, take the veteran’s advice first but it is a good talking point. http://andrewhallam.com/2011/01/where-did-my-money-go/
As much as I have reservations about bonds/fixed income and the strategy duplicates the financial advisor’s standard plan, the idea has merit with me. It is a radical departure from my previous behaviour so it will take time for me to adopt (particularly since it violates my 5% rule).
I also enjoy this broker’s stories – he is good and has insight plus I like his style.
http:/ibankcoin.com/flyblog/category/fly-story/

#117 Old Man on 01.24.13 at 2:11 pm

#106 CalgaryRocks – I tend to agree with you :).

#118 Suede on 01.24.13 at 2:36 pm

#74 Smoking Man on 01.23.13 at 12:37 am
Here is a thought, why don’t you write one yourself.

– I have 2 in the works. One is a picture book for the 1%. On the front cover will be a sexually suggestive photo. Sex sells.

JCVD: “SUEDE,Any good suggestions for other books besides Garth’s latest?

There’s not to many books out there that give a Canadian angle but some i’ve read and continually reference:

The Intelligent Investor
Security Analysis
Mass Psychology by James Dines
The Wolf of Wall Street (a book about swindling and small cap companies – going to be a Leo DiCaprio movie soon)

whatever you read, always remember to continually ask yourself, “What is their angle, and what is their benefit to telling you this information”

#119 Patiently Waiting on 01.24.13 at 2:38 pm

There is no quantitative easing in Canada. — Garth

Garth, can you expand on this statement. Why wouldn’t the Canadian Government embark on a QE of it’s own … seems everyone else is doing it, as currency debasement is the new normal globally … if they did what would be the consequence …?

#120 Old Man on 01.24.13 at 2:39 pm

I want to thank you all for not telling me what to do with my old car with 31K on the dial. Well there were a few problems as was holding back the cash, but on a startup smelling gas it had to go in this morning. Yep, my friend has a 6 bay shop, and is honest, so he drove me home.

I know mechanics, so called me this morning and said you were right about the brake sensor going, and have good news, as the gas smell is just a leak. Now can fix, but the rest will go in time, and since I use to work for GM can get a special deal on an assembly package; said do it to save me some money.

Then he said those old tires need to be replaced, and said I know as was next on my list, as will be going to Green & Ross next month. He laughed as said can beat them with a special deal, and said do it. This is going to cost me over $2000.00, and keep the car overnight, and bring it to me in the morning.

I should have given this car away to a young person for free, and leased something cheap, but a car is like a wife in marriage that needs attention, and no matter what she will always be a keeper. I hope you all enjoy my story.

#121 Smoking Man on 01.24.13 at 2:41 pm

#90 cramar on 01.24.13 at 10:57 am

I never miss speel by accident, kodos for catching it:)

#122 Herb on 01.24.13 at 2:59 pm

#107 Bottoms_Up,

if hangfire stopped “posting such nonsense” as at #87, he’d have no reason to be here.

#123 jose on 01.24.13 at 3:03 pm

Smoking Man on 01.23.13 – amen, the currency trading herd crashed the Cdn 2/3 of a cent as a result :)

#124 Holy Crap Wheres the Tylenol on 01.24.13 at 3:12 pm

#1 TurnerNation on 01.23.13 at 10:05 pm

Just sat down to this scotch-fueled weblog. To those who doubted my Westjet puts…it fell apart.

Airline stock always makes me feel ill. Did they at least give you any peanuts? I’m heavy into one right now called RIMM. Holy Crap this flight is a freaking nightmare they take off, they touchdown but never land, then they start a leisurely accent back towards the heavens and you have a euphoric epiphany just as they hit cruising speed, then next thing you know bam! And the worst thing is I don’t even get any peanuts!

Will be drinking heavily in the near future for sure, thank god for the uisge beatha.
I recommend the 25 to 40 year old Laphroaig, it has a strong peaty, smokey flavor. Better save some of that cash for the 40 year old drink!

#125 Canadian Watchdog on 01.24.13 at 3:14 pm

There is no quantitative easing in Canada. — Garth

Yes there is.

#126 Holy Crap Wheres the Tylenol on 01.24.13 at 3:26 pm

Well What do you know America still has it! This puts Lamborghini, Bugatti and Koenigsegg to shame. It is made in Texas, who said Americas car industry is dead. I want one of these to cruise around in. USA,USA,USA!!!

http://www.youtube.com/watch?v=74gthT8v1ds&feature=player_embedded#!

#127 house burden on 01.24.13 at 3:29 pm

Its pretty clear to me who has been buying the last 6-10 months. Most of the houses which were sold in the past 6-10 months has been knocked down and rebuilt or rebuilding. Almost all of them remain unsold and have been sitting or take off the market and used as a rental unit.

Mabey there is some truth with asian buyers / investors, most were bought by east india builders and constructed by east Indan workers (and built fast). Wonder what the work quality of these units are.

#128 Timing is Everything on 01.24.13 at 3:31 pm

#68 Nosty

Just 4 U…

http://tinyurl.com/854vubp

#129 house burden on 01.24.13 at 3:33 pm

113 Mark on 01.24.13 at 1:31 pm

“Are credit card rates being increased because the risk is shifting off government and taxpayers and back onto the credit card companies?”

No, the government/taxpayers don’t guarantee credit cards. However, additional risk is perceived in that particular market due to household balance sheet deterioration, which is why the rates are rising.
================================

Mabey government should get their fingers in this pie hole and create another agency which will allow people to borrow at ultra low rates forking the bill to the taxpayers.

Hey isn’t that Obama’s plan is to tax the working class to subsidize the lazy people who want the good things in life but doesn’t want to work for it.

#130 dave b on 01.24.13 at 3:39 pm

#57 T.O. Bubble Boy on 01.24.13 at 12:16 am
$1.4M skinny McMansion near Yonge&Lawrence sells in days (in the snow and -15C temperatures)… who is buying in such a rush?

Please let us know

#131 hangfire on 01.24.13 at 3:44 pm

I listened to 4 fairly high placed bond guys yesterday all saying the the bond market was a huge bubble….and that wouldn’t touch a US treaury with a ten foot pole…..can the Obamatrons continue to pile on more debt buying their own paper forever? That’s when the crap is going to hit the fan on rates.

#107..BU…..you’re drinking too much of the unions bathwater……To say that the world is going to fall apart without a bunch of lazy incompetant overpaid troughsuckers in legacy contracts with full benefits at the helm is really the best example of wrong headed selfish entitlement thinking you could name. Thank you for pointing directly at the ugly face of union elitism and privelage.

#132 Hoof - Hearted on 01.24.13 at 3:45 pm

FYI:

http://www.theglobeandmail.com/life/home-and-garden/real-estate/kerrisdale-condo-knocked-down-100000/article7573684/?cmpid=rss1

2105 WEST 42 ND AVE., NO. 212, VANCOUVER

ASKING PRICE $458,800

SELLING PRICE $424,000

PREVIOUS SELLING PRICES :
$420,000 (2007);
$206,738 (1995)

TAXES $1,727 (2012)

DAYS ON THE MARKET 19

CO-OP AGENT Keith Roy, Macdonald Realty Ltd.

The Action: This two-bedroom suite was on the market at $524,800 for over a year. But once the price was lowered to $458,800 last fall, agent Keith Roy saw an opportunity to negotiate an even better deal for his homebuying clients, who had already seen 20 other properties in Vancouver and Burnaby.

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

Latest price 2012 = near 2007 year old price.

#133 Tony on 01.24.13 at 3:51 pm

We witnessed the Canadian dollar fall around one cent on the news about Canadian interest rates. How bad will the jobs figures be for January? Very poor and GDP of course negative and negative for every month this year meaning a recession by July that really will never end for a long, long time. Me thinks the Bank Of Canada rate will touch down to zero probably this year. America is toast, cooked and done headed back into the recession/depression they never emerged from. Expect interest rates to plunge in America as they can only snow job the public for so long.

#134 Holy Crap Wheres the Tylenol on 01.24.13 at 3:58 pm

Oops, time to dump my oil sands shares. Australia, Australia, Australia, Australia, we love you!
http://www.youtube.com/watch?v=_f_p0CgPeyA

Big oil hit perhaps, the middle east will be changing their shorts!
http://www.adelaidenow.com.au/news/south-australia/trillion-shale-oil-find-surrounding-coober-pedy-can-fuel-australia/story-e6frea83-1226560401043

#135 Snowboid on 01.24.13 at 4:23 pm

#106 CalgaryRocks on 01.24.13 at 12:59 pm…

We have several Canadian friends here in Phoenix (Scottsdale, actually) who work in the ‘high’ tech field, they and the other 50,000 odd Canadians that work and live here full-time enjoy salaries that are much better than Canada.

They have full medical courtesy of their companys’ plans – and although some, including our friends, lost money on real estate – it is recovering far faster than predicted. Our friends have bought two investment properties here in the last year alone.

Minimum wage, I admit is lower than BC, $ 6 this year for service workers that get tips – but not $ 2 as you mention.

The 35-50% savings on almost everything makes up for it.

Basically every point you make can be countered with similar issues in Canada – with the exception of guns – although in almost three winters here we have only seen one civilian ‘carrying’ a weapon.

However, Canada has its’ share of crazy killers – how about Willy Pickton, and Clifford Olson – etc etc.

Big city crime – downtown areas are often unsafe whether Phoenix, Seattle, Vancouver, Edmonton or Toronto.

Funny thing, we feel safer here than in Kelowna. The area we live in of about 12,000 people has a crime rate 1/8 that of Kelowna per capita. We have never felt unsafe attending concerts or events in downtown Phoenix, can’t say the same for Vancouver.

The MSM blows issues out of proportion whether in Canada or the US.

We go to movies about three times a month ($ 6.50 for seniors at a multiplex with ‘recliners’ and food delivery to your seat) and we don’t fear anything except the ‘mega-butter’ popcorn.

Food safety? You think Canada is better – you need to re-evaluate your thinking. In any case, organic foods here are less expensive than non-organic in Canada.

The dairy products at our grocer (Frys/Krogers) has been hormone free since 2007. Chicken is hormone free by federal law.

I am a Canadian through and through, but tire of unwarranted ‘slagging’ of the US.

Do I agree with everything down here? Of course not, but I worry more for the direction Canada is moving in. Especially when posters such as you perpetuate the ‘fear’ mentality in attempting to make a point.

There is many times more problems to be fixed in Canada first before you can start complaining about our US neighbours.

#136 sciencemonkey on 01.24.13 at 4:34 pm

Regarding people saying it’s impossible to time the markets: I don’t know how to time buying more ETF shares.

Mid last year I bought some CPD in a regular account, some XIC in my TFSA, and a little ZDV in my RRSP. Now CPD is at the same price (but the point with that is dividends), XIC is up over 9%, and ZDV is up over 8%, not including dividends. All blind luck on my part.

I will hold onto everything as is, because I wouldn’t know how to time selling it.

My dilemma is I now have about $2000 more savings added to both the TFSA and the RRSP. How do I know when it’s a good time to buy more ETF shares?

This is the painful aspect of ETFs for those starting out like me. I wish there was a non-fee way of incremental monthly buying, like what is available with mutual funds. I think the commission-free ETF program from iTRADE looks good, I should consider switching to them.

#137 Smoking Man on 01.24.13 at 4:35 pm

Sr issac nuton discovers gravity, he watches an apple fall.

Sr Smoking Man net worth up 26 precent watching an apple fall.

Going to invest in a new monitor to track apple, seams its fallen below the viewable range of my screen, lol… Love life…. I should stop smoking

#138 Inglorious Investor on 01.24.13 at 4:52 pm

Quantitative Easing.

The purchase and sale of government securities, for the purpose of influencing money supply/interest rates, has always been a function of central banks.

The purpose of QE is to essentially take over a debt market or create a market where it would otherwise not exist at the present time.

#139 bill on 01.24.13 at 4:59 pm

”Regulations were there. Nobody enforced them”
My recollection is that all the regulations that were put in place after the lesson of the great depression of the thirties were systematically removed at the behest of the bankers . I think you could fairly say it started with bill clinton’s administration and subsequent administrations did their little bits as well. [democrat and republican. wall street got the best government campaign money can buy...for them anyway].

#140 CalgaryRocks on 01.24.13 at 5:15 pm

I am a Canadian through and through, but tire of unwarranted ‘slagging’ of the US.

Do I agree with everything down here? Of course not, but I worry more for the direction Canada is moving in. Especially when posters such as you perpetuate the ‘fear’ mentality in attempting to make a point.

There is many times more problems to be fixed in Canada first before you can start complaining about our US neighbours

Of course a lot of what I said was tongue in cheek. I love the US, I lived there for years and never got shot at once. (Even in Florida)

The 2$ minimum wage is a federal law for service staff that make tips. It can be googled.

The H1B program has been abused by American companies to import IT staff from third world countries and displace American workers rather than train them on new skills.

The H1B staff can be abused (work hours and pay) for at least 7 years and there’s nothing that they can do as they are stuck there until their green card is approved.

They get paid less than market over that time since the skills they learn, can’t be used to get a job somewhere else.

60% leave the company for much higher pay once they get their green card.

Mexicans do actual work that nobody else wants to do. What American will pedicure my Florida yard on a Sunday morning. In fact, I often wished they took Sunday off, those crazy Mexicans. Naturalizing them would mean this work doesn’t get done. So, the US doesn’t allow it.

Health issues are a major cause of bankruptcy in the US for people that HAVE JOBS and have worked hard all of their life.

Etc, etc… And the point is, before coming here and telling us how to run our country, and how much better Americans are with credit cards (LOL), The American should help solve his own country issues.

#141 Form Man on 01.24.13 at 5:15 pm

#141 bill

some regulations were removed ( Glass-Steagall), and some were ignored………and we all know how that worked out……..

#142 Mark on 01.24.13 at 5:28 pm

“Me thinks the Bank Of Canada rate will touch down to zero probably this year. “

I agree. Won’t help homeowners though. Notice how the chartered banks are being especially vocal in urging people to lock in at ~3% these days rather than take the floating rate? They’re not doing that to be charitable, that’s for sure.

The BoC will not lower its rate. Dream on. — Garth

#143 :) :( Ying Yang on 01.24.13 at 5:29 pm

Sugest we all purchase Smoking Man shares, excellent return rate 26% plus all hallucinogens one can stuff into your trench coat. Go Aqualung!

#144 Herb on 01.24.13 at 5:54 pm

#134 hangfire,

you’re Truth Hammering again!

#145 HD on 01.24.13 at 6:05 pm

#138 sciencemonkey on 01.24.13 at 4:34 pm

Regarding people saying it’s impossible to time the markets: I don’t know how to time buying more ETF shares.
Mid last year I bought some CPD in a regular account, some XIC in my TFSA, and a little ZDV in my RRSP. Now CPD is at the same price (but the point with that is dividends), XIC is up over 9%, and ZDV is up over 8%, not including dividends. All blind luck on my part.
I will hold onto everything as is, because I wouldn’t know how to time selling it.
My dilemma is I now have about $2000 more savings added to both the TFSA and the RRSP. How do I know when it’s a good time to buy more ETF shares?
This is the painful aspect of ETFs for those starting out like me. I wish there was a non-fee way of incremental monthly buying, like what is available with mutual funds. I think the commission-free ETF program from iTRADE looks good, I should consider switching to them.

——————————————————————-

You are not supposed to time the market with your ETFs. You should figure out what asset allocation suit your needs/situation and rebalance.

This technic will enable you to ‘buy low and sell high’ without having to time the market – Passive Investment.

A previous poster suggested the book Millionaire Teacher by Andrew Hallam. Excellent read. Check it out if you want to learn more about passive investment.

Another great place for info is this site: http://canadiancouchpotato.com/model-portfolios/

Check out their model portfolio for some ideas.

Finally, I strongly recommend you to use a spreadsheet to manage all your accounts (RRSP, TFSA and Non-registered).

You can download this already made spreadsheet and it will work out the allocation for you. All you need to do is to rebalance based on your allocation target:

http://canadiancouchpotato.com/2012/03/15/a-spreadsheet-to-manage-multiple-accounts/

Good luck!

Best,

HD

#146 JD on 01.24.13 at 6:08 pm

Why Realtors Love to mess with numbers
http://www2.macleans.ca/tag/housing-market/

#147 mark on 01.24.13 at 6:13 pm

Canadian market on the ropes.

http://www.macrobusiness.com.au/2013/01/canadian-housing-market-on-the-ropes/

Oh and I’ve noticed the realtors are out posting about how rates won’t be rising.

#148 Good authority on 01.24.13 at 6:19 pm

That is one scary post Garth. I hope your near future posts are a little easier on my nerves.

I really don,t like to witness wide spread angst among my fellow Canadians. I sense this will be a Spring for RE not seen for some time.

#149 Ogopogo on 01.24.13 at 6:23 pm

Yet another reason NOT to buy a condo:

“Flooding of entire Vancouver condo building results in mischief charges”

My deluxe RENTAL unit is at the top my low-rise, so I’d be fine, but vandals have run through the stairwells recently and knocked 4 handrails right off the wall. Thank Zoroaster I don’t have to attend strata meetings!

#150 Innumeracy chick...No more on 01.24.13 at 6:25 pm

@ Rob
Thanks for recommending some books. I will definately read them. I am happy to say I have recovered all loses from 08/09. Just lucky I guess! I was smart enough to buy during the euro crisis/market dip. Now I need a new plan…Wish I sold my house last year :( fortunately I have a small mortgage and a basement apartment (just incase). I already see the house prices dropping in Mississauga and houses sitting for longer. I think the prices will drop to the 2006/2007 prices hopefully not much lower. Yikes My first house bought in 2001 for 242 000
now listed at 485 000. Too bad I didn’t just stay there. Hindsight LOL

#151 TS on 01.24.13 at 6:29 pm

BoC keeps rate no change = lower rate

got it?!

Nothing to get. The bank rate will not decline, unless we have a depression. That’ll be fun. — Garth

#152 Franco on 01.24.13 at 6:47 pm

@ Vamanos Pest
I left a reply to your comment on the “Advisors” piece the other day. Check it out.

#153 Scully on 01.24.13 at 6:52 pm

@ Mr Buyer #99
Another Real Estate Pumper. There will be no stand off. There will simply be no buyers at all. Get ready to service that monstrous mortgage for the entirety of its term
_____________________________
I hope you are right. I’m no pumper – just jaded by so much delusion. It is amazing what people want for their properties.

#154 Sparky55 on 01.24.13 at 6:55 pm

Anyone experiencing issues posting?

#155 Sparky55 on 01.24.13 at 7:02 pm

@75 Robert

Here in Halifax,…
People are refusing to sell, it appears. Sometimes a slight drop in price, often times an increase even when the home has sat for hundreds of days.
…………
The bulk of the houses that have increased are new houses. The builders are playing games and increasing the prices every so often in groups. The bulk of the houses owned by individuals are slowly being reduced, usually $5,000-10,000 at a time though price drops and re-listings. Many new listings right now are previously listed houses that were taken off the market and now being put back on for the spring. Very few of these have been increased, but there are a few, and sometimes they are drastic, like a few hundred thousand to 800 thousand…

Builder increasing prices after on the market for going on 2 years unsold:
http://www.viewpoint.ca/property/cutsheet/41289208?no-nav=1&no-footer=1

Builder increasing the price after being on the market for almost 3 years (not huge increases, like some). I like the opening: “Builder will donate $250.00 towards Feed Nova Scotia”:
http://www.viewpoint.ca/property/cutsheet/41238957?no-nav=1&no-footer=1

Here’s a privately owned property that went from $349,000 to $65,000
http://www.viewpoint.ca/property/cutsheet/50233212?no-nav=1&no-footer=1

Here’s a privately owned one that went from $695,000 to $599,000 today:
http://www.viewpoint.ca/property/cutsheet/00243345?no-nav=1&no-footer=1

This is the best one – privately owned – was for sale in 2010 for ~$800,000. Now they want $2.5Million. Also not water front like stated – there is other property on the water front:
http://www.viewpoint.ca/property/cutsheet/40729337?no-nav=1&no-footer=1

#156 Innumeracy chick...No more on 01.24.13 at 7:05 pm

Food for thought! Multi-billion dollar market=Organic Foods. No evidence to back it up?

#157 Sparky55 on 01.24.13 at 7:05 pm

#75 Robert Hiscock on 01.24.13 at 7:01 am

Here in Halifax,
People are refusing to sell, it appears. Sometimes a slight drop in price, often times an increase even when the home has sat for hundreds of days.
———————————————-
The bulk of the houses that have increased are new houses. The builders are playing games and increasing the prices every so often in groups. The bulk of the houses owned by individuals are slowly being reduced, usually $5,000-10,000 at a time though price drops and re-listings. Many new listings right now are previously listed houses that were taken off the market and now being put back on for the spring. Very few of these have been increased, but there are a few, and sometimes they are drastic, like a few hundred thousand to 800 thousand…

Builder increasing prices after on the market for going on 2 years unsold – Pid: 41289208

Builder increasing the price after being on the market for almost 3 years (not huge increases, like some). I like the opening: “Builder will donate $250.00 towards Feed Nova Scotia” – Pid: 41238957

Here’s a privately owned property that went from $349,000 to $65,000
Pid: 50233212

Here’s a privately owned one that went from $695,000 to $599,000 today – Pid: 00243345

This is the best one – privately owned – was for sale in 2010 for ~$800,000. Now they want $2.5Million. Also not water front like stated – there is other property on the water front – Pid: 40729337

#158 Sparky55 on 01.24.13 at 7:06 pm

Hey Garth,

Your Blog does not like links from viewpoint.ca cut sheets!

#159 CalgaryRocks on 01.24.13 at 7:09 pm

Nothing to get. The bank rate will not decline, unless we have a depression. That’ll be fun. — Garth

I hope no depression. We had to throw out all of our emergency squirrel meat spices that we’ve been saving since ’08

#160 Bo Boka on 01.24.13 at 7:30 pm

#32Inglorious Investor
Well said. Everything in Canada is more expensive. But we have free health care (or do we?). So not to worry.

#161 Hoof - Hearted on 01.24.13 at 7:48 pm

#140 Smoking Man on 01.24.13 at 4:35 pm

Sr issac nuton discovers gravity, he watches an apple fall.

Sr Smoking Man net worth up 26 precent watching an apple fall.

Going to invest in a new monitor to track apple, seams its fallen below the viewable range of my screen, lol… Love life…. I should stop smoking

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

Pssstt Moses…here’s a tip…short your Commodore 64 /abacus stock

Pssstt “Net worth” and (inter)net value are diiferent

#162 TurnerNation on 01.24.13 at 7:55 pm

Today’s XIU.TO volume is 6x higher than normal. About 10 million of it is from crosses.
Better hope this is big money buying. I suspect otherwise.

#163 AK on 01.24.13 at 7:59 pm

#148 HD on 01.24.13 at 6:05 pm
“Now CPD is at the same price (but the point with that is dividends)”

You should switch your ‘CPD’ with ‘XPF’.

XPF is diversified across Nort America and pays a 5.08% dividend.

#164 TurnerNation on 01.24.13 at 8:19 pm

#86The real Kip

The video was a little bit anti climactic. I was expecting the crane via its hook to hoist the coffee up! Instead you used a rope by hand :-)

#165 TurnerNation on 01.24.13 at 8:20 pm

Oh yeah, National Bank is offering a GIC which pays 5% in its 5th year. To me this means in five years’ time rates must be a spread above 5%? What are they thinking.

#166 Nostradamus Le Mad Vlad on 01.24.13 at 8:23 pm

-
#131 Timing is Everything — You have exposed my dirty little secret! Bloody hilarious clip!

#140 Smoking Man — “Sr Smoking Man net worth up 26 precent watching an apple fall.” — Nice call. Apple has record profits yet its share price is exiting via the drain. What gives? Samsung, Google or MSoft making better products?
*
The Withdrawal Method “More than $114 billion exited the biggest U.S. banks this month, and nobody’s quite sure why.” and Resignation; GS Saving Wall St. from its own bloated ego; Rationing Silver Cdn. mint, that is; Spanish Unemployment New high, esp. among youth; Big Cities in NAmerica have become gang-infested war zones.
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2:07 clip He chose the wrong girl; The Rise of Bolshevik America, Soros, Obomba and Kerry want Soros’ (not Obomba’s) vision for the world, and Obomba opposed to gun ban exception (Agenda 21); 4:34 clip Bill Maher on the 2nd amendment and Police State USA; 2:59 clip 2003 — bad medicine linked to school shootings; Airtight Gardening Compared to the economy, this is complicated; 3:28 clip Warrant? We don’t need no stinkin’ warrant; 1:04 clip Piers Morgan takes ill after a flu vaccination shot (could be his ego couldn’t handle it); Two Faced Dronebama For kids, it’s a rough start to life, and Child Deaths A very good reason which the m$m ignores; Melting Antarctica Horrific, just awful, This was the high temp. for the day and NASA’s mini maunder; 30 Depop. Quotes Let’s turf the elite! Plus Here today, gone tomorrow Take a flu shot and die. Don’t take one and die anyway; ‘Net Neutrality France exploring the idea of ending it.

#167 CrowdedElevatorfartz on 01.24.13 at 8:27 pm

@#6 The Real Kip

No , that photo is of BPOE…….. yesterday after a sale fell through….. :)

#168 sciencemonkey on 01.24.13 at 8:39 pm

@148 HD Thanks, I will work with that sheet. Doesn’t seem to work well in my old office 2003 with compatability upgrade, so I’ll try it on my work laptop. The principle of buying to balance makes sense.

—-
I want to echo people’s sentiments about Toronto’s houses. I live in Eglinton-Lawrence neighborhood, and it’s a mix of 3-story walkups (where I rent), nice bungalows, and skinny Mcstrosities built on old bungalow lots. But man, when I compare that to what you see in the more downtown areas, god those houses look just terrible. Why even mention a $100,000 price reduction on a $800,000 shack? It doesn’t even scratch the absurdity of the price.

Sigh, I wish I could afford a little 900 sq foot bungalow somewhere within a reasonable distance of where I work. Like john (who seems to have disappeared with his semi-coherent but thought provoking posts) once said, this environment is toxic to young hard-working people. Texas is sounding nice…

#169 AK on 01.24.13 at 8:50 pm

#167 TurnerNation on 01.24.13 at 8:20 pm

“Oh yeah, National Bank is offering a GIC which pays 5% in its 5th year. To me this means in five years’ time rates must be a spread above 5%? What are they thinking.”

It will be a lot sooner than 5 years. :-)

#170 Smoking Man on 01.24.13 at 9:05 pm

You can chirp me all you want, all I have ever done on this pathetic Blog has been to be myself, no agenda call it like I see it, and share my bets on the market, sorry I’m always right, and rather than say holly, your good. You choose to chirp.. I’m cool with it, one day maybe you will learn. Damb stupid Canadians.

From the master……….

#171 Innumeracy chick...No more on 01.24.13 at 9:16 pm

More food for thought stumbled across these stocks

HAIN, STKL,UNFI,WFM

Any comments?

#172 The American on 01.24.13 at 9:46 pm

At #106: Calgary Rocks, again, you’re an ill-informed Canadian. First, only in a handful of states can an American earn $2/hour + tips. What you fail to state or understand is that that person, by law, must be GUARANTEED to earn MINIMUM FEDERAL WAGE once the tips are included. If that person does not make minimum federal wage standards, the employer must make up the difference. Of course, however, I’ve never in my entire life known any person in the service industry to earn only minimum wage. I know waiters here in Seattle who earn near-six figure wages. Still, bottom line, is American overall earn more than Canadians in nearly every job category. Americans have lower taxes. Americans pay less for most goods (by the way, your milk scenario is full of shit. you can’t put growth hormones or the like in these products in the U.S., and it has been this way for years. Educate yourself), Americans save more, and have less credit card debt. Do the math. Canada is screwed, and it is sad to think how families will fare.

#173 The American on 01.24.13 at 9:53 pm

At #138: AMEN! Thank you. You totally get it. It does seem to me that many Canadians live in a bubble of fear, though, and many are totally clueless as to what is fact vs. fiction in the U.S.

#174 Herb on 01.24.13 at 9:56 pm

#172 Smoking Man,

THE chirper on this blog is you, mostly with nonsense. You should know that proclaiming your own greatness is pathetic. Give us reason and we’ll gladly do it for you.

#175 meslippery on 01.24.13 at 11:10 pm

loan rates since Kevin O’Leary had hair.

I get it but life would be prefect if Amanda Lang
ruled the world.