The sting

consequences

The nightmare scenario goes like this: a nation of house hornies spends four years Hoovering up all the real estate it can absorb at ever-higher prices. Wages and salaries flatline, but mortgage rates are cheap, so household debt explodes. Before long seven in ten families own property. This has never happened before.

Everyone says house prices will rise forever, but they don’t. They wobble and start to reverse. Saddled with fat mortgages and new fears, people trim spending, and punt that new flat screen. In an economy 60% comprised of consumer spending, the consequences sting.

And that brings us to this week: 900 jobs lost and 15 stores shuttered at Best Buy. Another 700 people on the street at Sears.

Why should anyone be surprised? Some things are so predictable.

And the real estate recoil has just begun. The newest numbers from Toronto’s forest of condo towers are just dreadful.

  • In the last three months of 2012 sales of new units crashed 47%, from the same period a year earlier.
  • There are now 18,366 brand new, never-lived-in, unsold condos for sale.
  • At the same time, 207 new projects containing 56,866 more units are currently under construction.

Supply is overwhelming demand, sales are falling off a cliff and inventory is stockpiling. How is this not a formula for lower prices in the months ahead?

In fact, it’s already happening as thousands of formerly virginal, first-time sellers meet Mr. Market.  A year ago there were 216,000 existing condos in the GTA and now there are 11,000 more. But sales are falling – by a significant 26%. That means more supply yet less demand, and prices are already cracking, down 3% in the last four months.

In fact a resale condo that was worth $400 a foot in 2011 when a lusty young couple bought it is now priced at $397. That sounds like nothing until you realize that buying a $400,000 unit in Toronto costs $10,000 in closing costs, while selling it takes $20,000 in commission. So, count a minimum loss of $30,000 on a unit often snapped with 5% down – which means the virgins lost 150% of their money and paid more to live there than a tenant would have.

That’s quite a shock when your mom (who gave you the down payment) told you it was a great investment.

There’s no question where this is taking us. I told you more than a year ago to expect asset deflation (real estate, cars, smart phones, gold) at the same time as price inflation (food, gas, daycare, insurance). This coincides with a societal redefinition of wealth – a shift from stuff, to liquidity.

Old school is thinking the best financial move is to buy a house and pay it off as fast as possible, trash the mortgage and let your equity grow. New school is knowing your equity will probably shrink and 3% home loans are stupid cheap. So better to invest in a balanced portfolio, make 10% and be diversified. Better still, rent a condo and let the landlord subsidize you, then stick the difference in your TFSA.

The days of routinely making big capital gains on houses are gone. In fact as the virgin sellers in godless Toronto are discovering, their ‘investments’ can turn illiquid fast. A year ago the sales-to-listing ratio for condos was 52.4%. Lately it’s 40%. Imagine that – pay more than the renter next door to live in an identical unit on which you have lost tens of thousands, and can’t sell. Now tell me why workers showing up at the Best Buy store in suburban Victoria Friday morning were shocked to find the doors locked.

Why should anyone be surprised?

274 comments ↓

#1 Derek R on 01.31.13 at 9:42 pm

And now for the comments…

#2 Randy on 01.31.13 at 9:42 pm

Garth….Our governments are a financial disaster….They refuse to spend less…If interest rates go up….won’t they raise taxes, fees and rates of all types ?

#3 not 1st on 01.31.13 at 9:44 pm

Garth, cars and smart phones have never been assets. They are consumables and depreciate the minute they are manufactured. These shouldn’t be lumped in with real estate because it has lasting residual value and can never be zero.

Maybe on your planet. — Garth

#4 Mike on 01.31.13 at 9:45 pm

OH my …. where will Canadians get their 6 feet wide LCD TVs now? Households only have 3 of them on average, must buy at least a couple more before the LOC gets shut down ! Act fast!!!

#5 First on 01.31.13 at 9:46 pm

FIIiIIIIRRSSSTTTT!!!!!

Not even close. Go away. — Garth

#6 Andrewski on 01.31.13 at 9:46 pm

“In Victoria BC gas prices jumped around .25/ litre today, while Best Buy shuttered all their Vancouver Island stores”.
Hang on kids, it’s going to be a bumpy ride!
Tip of the iceberg, some would say.

#7 Dr. Hoof Hearted on 01.31.13 at 9:47 pm

In the medal standing baby………

#8 Nonno Nicola on 01.31.13 at 9:48 pm

ohhh, this is bada newz, wat shoulda nonno do wit the new semi detache?

#9 elcid on 01.31.13 at 9:55 pm

Garth….Gold is not an asset, it is the only real money out there. Just ask the Germans, who just decided that they would ratherhave all their gold at home where they can have it in case the Euro collapes….once people figure out what all these central banks are doing to the currencies….wow\

Money is money. Gold is a commodity. And this is the first and last comment. — Garth

#10 minus40 on 01.31.13 at 9:57 pm

I assume that renters can now bargain hard on the monthly rate with that much surplus stock lying around sucking condo fees out of the owners every month.

Unsold condos are for sale, not rent. — Garth

#11 Humpty Dumpty on 01.31.13 at 9:59 pm

Perhaps her husband drove off in one of these with his GF…..

Mercedes-Benz 2013 Super Bowl Commercial (Extended Cut): “Soul

http://www.youtube.com/watch?v=oPNr0_6MnDo&feature=player_embedded

Then there’s getting burned!

#12 Bill Gable on 01.31.13 at 9:59 pm

Two words.

TAX HIKE.

#13 A. H. on 01.31.13 at 10:01 pm

Last Saturday, I walked to the local Metro grocery store here in London, ON and their already high dairy prices had jumped even higher. For example:

1 litre 2% – $3.65 (up $0.30)
2 litre 2% – $4.65 (up $0.30)
1 litre 10% coffee cream (name brand) – $3.95
1 litre 10% coffee cream (Metro brand) – $3.35 (up $0.56)

I walked out, walked home, got in the car and drove to Superstore. The whole time thinking, “I am single and can’t afford this – what about a family of four?”

The prices were up slightly at Superstore, too, but not as big of a jump. The inflation you warn us of has begun, Garth. I think the months ahead will be interesting indeed.

Thanks for all your sage advice. I would like to buy your book “Money Road” – can you tell me where it is carried?

#14 Dave on 01.31.13 at 10:04 pm

Grouping real estate and gold into the same asset class as cars and smart phones insults the intelligence of your readers.

Stuff is stuff. — Garth

#15 AK on 01.31.13 at 10:04 pm

.#5 First on 01.31.13 at 9:46 pm

“FIIiIIIIRRSSSTTTT!!!!!”

You are a day late and a dollar short, Loser.

#16 dosouth on 01.31.13 at 10:04 pm

I found a comment by Al Gore (VP) last night on Jon Stewart to be quite interesting.

Stocks on average were, in the past on average, held for 7 years. Now it is seven months. The NYSE board also rejected a flat out ban on a rule to be implemented that stated trades – buy and sell offers, would have to be held up for a “complete second” before being confirmed. This was in order to deal with the nano-second flash trading that is causing the crashes and false tops being seen in today’s stock market trading.

…..and I thought maybe I would invest in some long term blue chip stocks, we don’t really have a chance in the real world, I guess.

#17 Chris L. on 01.31.13 at 10:04 pm

Guelph RE goes up at 7%/year forever!

““Homes in Guelph have always had good resale value and that’s not going to change any time soon,” said Bisson, president of The Mortgage Centre and organizer of the Tuesday evening conference.

Bisson also said over the last 45 years, homes in Guelph have consistently increased in value by almost seven per cent a year. He said big price swings in Toronto and Vancouver skew all the averages and have lead some analysts to conclude Guelph’s record is a “bubble.”

“Good things happen in Guelph,” Bisson said. “That’s why that (annual price growth) number is not outrageous.”

http://www.guelphmercury.com/news/local/article/878334–guelph-residential-properties-will-continue-to-gain-value-guelph-real-estate-conference-hears

#18 Ann on 01.31.13 at 10:05 pm

real estate, cars, smart phones, gold) at the same time as price inflation (food, gas, daycare,
——————————————————————
Hey you brought it up lol

#19 hoser on 01.31.13 at 10:06 pm

Some homes in West Vancouver pay over $20,000/yr in property taxes. How are they going to hike more taxes?

#20 AK on 01.31.13 at 10:08 pm

#9 elcid on 01.31.13 at 9:55 pm

“Just ask the Germans, who just decided that they would ratherhave all their gold at home where they can have it in case the Euro collapes”

LMFAO. Yes, we will soon be walking around with nuggets in our pockets.

#21 elcid on 01.31.13 at 10:08 pm

If that is your understanding of money, i suggest you apply for Mark’s job…you would make the perfect central banker :)

When you can pay the rent with rocks, we’ll talk. — Garth

#22 Old Man on 01.31.13 at 10:15 pm

Once again Garth has hit the nail on the head, as the blood will flow on the streets of Toronto in the core with condos and this will spread Canada wide with panic selling. Now own an old car with 31K on the dial and had to spend $1700.00 last week for updates to bring my lover back into an investment mode, as she is a keeper; need not a new car, but good transportation, as could care less about a fancy car to say look at me.

#23 Dave on 01.31.13 at 10:17 pm

Stuff is not stuff…. Real Estate and Gold are investment vehicles that ALWAYS appreciate in value with a long time horizon. Cars and Smart Phones are quite simply depreciating assets. This is pretty basic stuff….

Anyways, move on – it’s clear to intelligent people that your statement is absurd.

Yes, real estate always goes up. You Italian? — Garth

#24 McLovin on 01.31.13 at 10:20 pm

For the Metalheads…

http://seekingalpha.com/article/1145981-when-the-gold-bugs-start-selling-look-out

#25 DreamingInTechnicolour on 01.31.13 at 10:25 pm

Reality Bites..

#26 r. from calgary on 01.31.13 at 10:30 pm

Both gained and lost with my balanced portfolio but whatever I invested in real estate never failed to make me very, very happy. Just sayin’…

#27 McLovin on 01.31.13 at 10:34 pm

“Both gained and lost with my balanced portfolio but whatever I invested in real estate never failed to make me very, very happy. Just sayin’…”

We have gone through an unprecedented rise in the value of homes in Canada in the last 10-15 years. Do you really think this appreciation will repeat itself?

#28 JSS on 01.31.13 at 10:35 pm

Best Buy closed because they can’t compete with the likes of Amazon. People just walk into Best Buy to do some window shopping, pick out the stuff they like, and buy online.

Flat screens? — Garth

#29 Mic D'angelo on 01.31.13 at 10:36 pm

You just made my point again Garth. Sears and Best Buy used store credit cards to boost their sales. You see what happens when a bunch of adults by age but with children’s brains get credit no matter what interest rate and terms. Line of credits, mortgages, vehicle loans, students loans, credit cards etc. all lead to the same road, money given to people who don’t understand the consequences.

#30 Smoking Man on 01.31.13 at 10:37 pm

DELETED

#31 Nurse PouletPetit on 01.31.13 at 10:39 pm

#22 Old Man:

I’m glad to see someone with some sense!

http://www.nytimes.com/2012/10/16/technology/blackberry-becomes-a-source-of-shame-for-users.html?_r=0

I know you wouldn’t do this to someone.

BUT, let me tell you, when housing prices start to go down, I WILL be laughing at all of the people who bought a house in the last two years. They looked down on me, but they’ll be singing a different tune really soon.

People need to stop living their lives based onn a timeline: go to college, get married by 26-28, buy a house, and have 3 kids by 35. Women are the worst when it comes to this. I have never felt any pressure to do things by a certain age so maybe that’s why I haven’t succumbed to the pressure for real estate.

People have it waay to good in this country! Maybe they should move to a less priviledged country for a while. Then renting might not seem so bad after all when they consider that they live better than 90% of the world.

Dr. Hoof: Are you picking up any more chicks with the new moniker? I’m trying a french nurse name…we’ll see how that goes.

#32 Nurse PouletPetit on 01.31.13 at 10:41 pm

Yes, real estate always goes up. You Italian? — Garth

From Woodbridge apparently…If it’s not expensive, there’s nothing to brag about.

#33 prairie person on 01.31.13 at 10:42 pm

Two weeks ago I was in Best Buy on a Monday afternoon. Big store. Clerks. No customers. Well, me and two others that I could see. I was going to ask the clerk if BB was going out of business but thought it might not be a kind thing to ask. If business is down 20% for three months in a row, most businesses are toast. Figure the cost of keeping the BB building open. The Uptown shopping mall is some sort of madness. I get the concept. I just think it’s crazy. It’s predicated on a lot of discretionary spending. RE is sopping up people’s income, groc are getting crazy expensive, cars cost what houses used to cost and jobs, public and private are being cut. UVic is going through a ten percent cut. That’s savage. Victoria isn’t Vancouver. It’s not all about HAM. The question is will houses owned by the Retiring Beyond The Mountains sell well enough that they can realize their dream and escape -40 and play golf all year? House sales freeze like the weather and there’s no one to buy the homes of the dearly departed. A large condo project has gone kerplunk and been bought out. Classy building. My neighbour put up a for sale sign a couple of weeks ago. Not even an lookiloos. Two years ago, it would have been gone in 48 hours. Maybe if the temp stays around -40, prairie people will snowshoe here, desperate to buy. I wouldn’t plan on it, though.

#34 T.C. on 01.31.13 at 10:42 pm

Wait till the worm really starts to turn:

http://househuntvictoria.blogspot.ca/

Big local news today (aside from Best Buy) is how Burger King franchises are popping up all over town. Nobody can afford the higher end stuff – those eateries are going bust. Suppose it’s all right if you like your food in a little plastic basket lined with wax paper… The brew pubs should survive – I hope. Lucky Lager is not a choice I want to make.

#35 jwkimba on 01.31.13 at 10:42 pm

top 30!

and to r. from calgary:NOW is the time to BUY! Go for it! You’ve always been right before …

#36 HAWK on 01.31.13 at 10:44 pm

#3 not 1st on 01.31.13 at 9:44 pm

Real estate does not have lasting value, ……..good quality “land” is as appreciating asset with lasting value, the building is a consumable just like the other assets you mentioned.

#37 Tim on 01.31.13 at 10:44 pm

Though it is unfortunate for those who lost their jobs, retail is only going to get more competitive. Amazon has a 20 percent advantage. Instead of giving tax credits for home rennos employing wrench bangers, the neo-cons should do something that would help us be more competitive in the future such as investing in R&D, eduction, providing tax credits for small firms, etc.

#38 Grammar Nazi on 01.31.13 at 10:45 pm

That lady can’t spell. Your vs. You’re. So sad.

#39 Buy Low Sell High on 01.31.13 at 10:45 pm

#22 Old Man

I too just purchased an old car, a 13 year old Japanese with only 34km’s on the clock and I just went through Drive Clean hell in Ontario last week!!

The Drive Clean rules changed in Ontario on January 1st and they are far more onerous to get a passing car!

I heard that BC scrapped this program which I found a bit odd for an environmentally sensitive province. Can any west coasters shed some light on this?

#40 Inglorious Investor on 01.31.13 at 10:48 pm

Supply and demand.

The real value of real estate is in the land. Demand goes up, but supply does not. A wise American writer once said to buy land because they aren’t making any more. Well, that’s not entirely true, but just about.

Condos. To paraphrase Duddy Kravitz’s זיידע: “A home without land is nothing.” OK, maybe it’s not ‘nothing’ but… Easy to increase supply. Some concrete, cheap glass and drywall. Very easy to overshoot demand. Prices fall. But supply remains.

#41 HAWK on 01.31.13 at 10:49 pm

#9 elcid on 01.31.13 at 9:55 pm

Garth….Gold is not an asset, it is the only real money out there.

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

I concur, but unfortunately it will be a while before you see creeping appreciation. No matter….., sit tight, ……..investments should always be for the long haul anyway.

The major difficulty with gold is “paper gold” trading by the world’s power players today. That is why gold appreciation will be slow and gradual. If legislation mandated (as it should) that all trading be physical, then the appreciation would be sharp.

Won’t happen though.

#42 The sting — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 01.31.13 at 10:51 pm

[...] via The sting — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. [...]

#43 Dr. WAYNE on 01.31.13 at 10:52 pm

#5 First on 01.31.13 at 9:46 pm

FIIiIIIIRRSSSTTTT!!!!!

Not even close. Go away. — Garth

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

I would listen to the venerable one, because even the humungousness of your a$$holenesss is getting a bit trying … and characterizes you as a cretinous unfortunate …

#44 happy renter on 01.31.13 at 10:52 pm

You want more income than a 1% cashable gic.The symbol is pgp.The dividend is .1834 cents per share.If bought today for $100000 at $20.92 will give you $ 10520 income for a year gic will pay you $1200-$1500.Thanks big banks, your to generous.

#45 prairie person on 01.31.13 at 10:52 pm

Unsold condos are for sale, not rent. — Garth

That is the intent but I know of two condo projects where the builders haven’t been able to move any condos. They are all being rented. They’re still for sale but the owners need to get cash flow has meant they’ve had to negotiate the rent. No more in the driver’s seat. My landlord in my condo on the other side of the mountains apologized because he had to raise the rent ten dollars. New times. I think there may be a lot of for sale condos being rented for quite some time.

#46 salonist on 01.31.13 at 10:53 pm

it’s different here in oakville
a large sidewalk sign at a plaza just went up
pizza pizza is selling large pepperoni pizza, take out $7.95

#47 David on 01.31.13 at 10:54 pm

The realtor fliers that get stuffed into my mailbox seem fond of saying: ‘condo prices have stabilized’.

One did acknowledge that there is a lot of new supply coming but that it would have little to no effect on prices, which would continue to be buoyed by continued immigration.

Time to get a little more creative folks.

#48 White Rock Mom on 01.31.13 at 10:54 pm

When the German government wants all its gold in Germany you should stop and wonder why. Is something wrong? Are they paranoid? Should you be worried too? After all, if you aren’t paranoid you aren’t prepared.

But you are insane. — Garth

#49 Dom on 01.31.13 at 10:55 pm

The problem with best buy was people would go there to check out the product and then order it for less online. The big box stores are finished. To much overhead. Alot of retail space is coming to open up. Then you have stupid yorkdale expanding when people just walk around and buy nothing.

#50 Inglorious Investor on 01.31.13 at 11:01 pm

#22 Old Man on 01.31.13 at 10:15 pm

Old car. Smart. Depreciation is paid for. Only operating costs now.

But in your post you said your “old car” has 31K? That’s practically brand new! Or are you like my dear old Dad who puts only a few K per year on the odometer?

Wait a minute! … Dad?!

#51 ChickenLittle on 01.31.13 at 11:02 pm

Re: Dr Hoofey: Leafs fans are sheep:

That’s why I go see the Marlies…They do win from time to time.

I met Doug Gilmour a few months ago. He was hot for an older guy! I got a great picture with him. Now I`ve got my eyes on Steve Yzerman.

Smoking Man and Beach Girl are the same person.

#52 Toronto Real Estate Boy on 01.31.13 at 11:02 pm

You have the sales to listing ratio for toronto wrong! It is currently 19% for GTA and less for Toronto. Not the 40% you mentioned. That’s why you should have check out my graphs :) source: http://torontorealestateboy.ca/blog/2013/01/11/part-one-why-you-should-seriously-consider-selling-your-condo-now/chart-1c/

Source: Urbanation. — Garth

#53 Dr. Hoof Hearted on 01.31.13 at 11:03 pm

#31 Nurse PouletPetit on 01.31.13 at 10:39 pm

Dr. Hoof: Are you picking up any more chicks with the new moniker? I’m trying a french nurse name…we’ll see how that goes.

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

OMG……the demand is beyond the capacity of the GDP (not to be confused with commie NDP ).

It’s even better than the Trudeau days..where a few classic quotes by dead Greek philosophers (circa 100 BC)would guaranteed at least a home cooked meal and a back rub(…..what else goes on in other rooms in the abode is none of yer 4Q’n bizness)

#54 Country Girl on 01.31.13 at 11:06 pm

#17 Chris L. on 01.31.13 at 10:04 pm
Bisson is either dishonest or ignorant. House prices in Guelph and Kitchener decreased in the early 90′s and took years to recover.

#55 Bottoms_Up on 01.31.13 at 11:06 pm

#17 Chris L. on 01.31.13 at 10:04 pm
————————————————–
Guelph prices are astronomical. I pity the poor virginal souls buying today with 5% down.

#56 Old Man on 01.31.13 at 11:08 pm

#39 Buy Low Sell High – there will never be a problem with a drive clean check, as just give the guy $100 in cash and tell him to rig the system for you with a good report to be printed out.

#57 Inglorious Investor on 01.31.13 at 11:09 pm

#44 happy renter on 01.31.13 at 10:52 pm

PGP? 10.5% yield? Chicken feed. Try HNY, the natural gas futures ETF. Last distribution was at a yield of 14%. The one before that? 23%. And nat gas is near all time historic lows. Can the price drop further. I suppose, but it’s already below the marginal cost of production. So collect your divy and wait.

#58 Seriously? on 01.31.13 at 11:10 pm

The Aircare program in B.C.was, is and always will be a Boondoggle. It’s contract was up and has also fallen victim to the overwhelming number of newer, clean emission cars that inhabit the lower mainland.

Many times these programs are just another tax grab.

Welcome to the 1990′s.

Seriously

#59 Old Man on 01.31.13 at 11:16 pm

#50 Inglorious Investor – it matters not about the mileage on a car, as that is an illusion, but rather the age, as parts will fall apart that need attention. Kind of like a wife with low mileage, and she needs some repairs on occassion to keep her kicking.

#60 SHUBEDOBEDO on 01.31.13 at 11:18 pm

The pyramid is showing cracks and will soon collapse , shipping our manufacturing offshore has gutted the middle class . Thank you Free trade it worked well for us , all we hear since 08 is the economic recovery is underway , yes but where ? Not here thats for sure!

#61 Timing is Everything on 01.31.13 at 11:19 pm

#51 ChickenLittle – Smoking Man and Beach Girl are the same person.

Smoking Man is a cross-dresser? Who knew?

#62 Inglorious Investor on 01.31.13 at 11:22 pm

Wait, I think I’m supposed to say that I’m not an investment advisor and therefore I am not giving actual advice. It’s purely for information and entertainment purposes only. Invest at your risk. Past performance is no indication of future performance. We do not endorse any products or services mentioned on this blog. Prices and specifications may change at any time. The actual product may differ in appearance from the photo. © 2013.

#63 Smoking Man on 01.31.13 at 11:23 pm

Gartho you ride a Harley, yet your delete tells me your afraid of God.

Me I’m not, I played hockey growing up..

#64 Suede on 01.31.13 at 11:24 pm

Talk about inflation:

Ikea hot dogs went from 50 cents to 75 cents!!

Holy hyperstagflation batman…. Stay tuned, same bat channel, same bat time

#65 Inglorious Investor on 01.31.13 at 11:26 pm

#56 Old Man on 01.31.13 at 11:16 pm

lol

#66 Inglorious Investor on 01.31.13 at 11:31 pm

#48 White Rock Mom on 01.31.13 at 10:54 pm

“[…] if you aren’t paranoid you aren’t prepared.”

I like you.

#67 [email protected] on 01.31.13 at 11:33 pm

The jineter style society has arrived.

#68 Big Al New on 01.31.13 at 11:34 pm

Garth I really admire you discipline. Although I don’t always agree with everything you say I still whole heartedly appreciate the information you continue to provide.

#69 Smoking Man on 01.31.13 at 11:34 pm

DELETED

#70 squidly77 on 01.31.13 at 11:37 pm

First Best Buy, then Sears. Next up, HMV music stores, they have more employees than you may think, who buys CD,s anymore. Ayone, anyone at all.

What does your bathtub drain and the Alberta tar pits have in common ? It ain’t rocket science.

#71 NoOneOfConsequence on 01.31.13 at 11:38 pm

Re-#39 – buy low sell high-
“Shed some light on why aircare scrapped in BC..”

Pretty simple…the biggest polluters are poorly maintained commercial vehicles. The number of cars failing aircare plummeted here. New vehicles have super low emissions.
BUT…they didn’t scrap the fee…only the inspection part. Every year we still have to pay $26.00 for aircare. Now we all help pay for the higher cost of inspecting commercial vehicles.

#72 Timing is Everything on 01.31.13 at 11:38 pm

Condos are pseudo real estate. No dirt. It’s a sham.

#73 Inglorious Investor on 01.31.13 at 11:39 pm

#37 Tim on 01.31.13 at 10:44 pm

The new trend just developing in business seems to be this:

Consolidation—> Less Competition—> Higher prices—> More higher prices.

#74 Elmer on 01.31.13 at 11:39 pm

Who cares about a few hundred Best Buy jobs? The people making 32k/yr at BB or Sears aren’t the ones buying the 800k houses or even the 250k condos. The people making 6 figures on Bay street or in cushy government jobs are still employed.

#75 NoOneOfConsequence on 01.31.13 at 11:41 pm

I tried to pay for gas and a bag of chips with my 1 oz. silver maple leafs today. Unfortunately face value is only 5 bucks. It takes 10 ounces of silver to buy a tank of gas.
At least my gold maple leaf has a face value of $50.00…so I paid with that.
Hmmmm….gold and silver SUCK as money.

#76 happy renter on 01.31.13 at 11:42 pm

Thanks ,Inglorious Investor ,I’ll keep an eye on that etf for sure.Nice pick.

#77 Old Man on 01.31.13 at 11:42 pm

#61 Timing Is Everything – that is a bunch of utter nonsense, but on the other hand have heard rumours that the Smoking Man has been seen when he is drinking taking in a good Drag Queen show in Toronto from time to time; oh am just kidding.

#78 meslippery on 01.31.13 at 11:44 pm

Beach Girl
Good to here from you. How are you ? still have the dog?
Better friend than your old flame ?

Oh I know you like smoking man but while you where a
way he said he was Amanda Lang.

But I still love you.

#79 Basil Fawlty on 01.31.13 at 11:45 pm

“Stuff is stuff. — Garth”

Are you serious?

And correct. — Garth

#80 Finally on 01.31.13 at 11:45 pm

BB10 or iPhone5?

#81 Tyrell Pronghorn on 01.31.13 at 11:46 pm

#34 T.C. on 01.31.13 at 10:42 pm

Most guys I play hockey with like lucky for some reason.

I guess if it’s cold enough…….

#82 happy renter on 01.31.13 at 11:54 pm

What I find amuseing is a low income worker in the states can buy a nice house and the same worker in Canada can barely afford a run down bachelor apt.What gives ,crappy health care,bad weather and high taxes is what we get here.

#83 Inglorious Investor on 01.31.13 at 11:55 pm

#29 Mic D’angelo on 01.31.13 at 10:36 pm

OK, here’s the thing. Long ago the banks and government conspired to create a monetary system that could pyramid money for their benefit.

They claim they want to control inflation. True to a point, but the fact is, inflation is a necessary part of the system, as far as they are concerned. Bank profits come from inflation. Governments use inflation as a hidden tax, and as a way to magnify taxes on gains.

In order to keep the system/scam going, it requires an ever-expanding money supply. That’s why they sucker ignorant consumers into taking on more and more debt.

If the money supply would actually contract meaningfully, the game would be up and the system would collapse. The economy is over-leveraged and wants deflation, but they cannot allow that.

That’s why the Beard@TheFed continues to pump trillions into the banking system on the pretence that it’s for the economy. If he did not, it would unleash a deflationary chain reaction of defaults that would destroy the world’s financial system.

They were smart to tie QEinfinity to employment. They don’t want employment. They want high unemployment because depressed wages are helping to keep consumer prices low, even while the money supply explodes.

If the money they created ever got out, it would unleash inflation, the likes of which we’ve never seen. Then the great unwashed might start thirsting for some politicians’ blood. Thus, they are attempting to engineer a confiscation of the people’s firearms. They are getting ready in case the $h!† hits the fan.

You have few friends, don’t you? — Garth

#84 S on 01.31.13 at 11:57 pm

“So better to invest in a balanced portfolio, make 10% and be diversified.”

Man, those “balanced portfolios” pay better and better. It used to be 5%, more recently 7 and now 10. Some fantastic writing here for sure but perhaps slightly optimistic. Not everyone agrees, though: http://www.youtube.com/watch?v=GXxhkkXPfK8
For those in a hurry scroll to 26:02 in the vid. I don’t know which way things will go but it’s good to examine several expert opinions.

A simple portfolio of 60% in the Global Equity Index and 40% in Canadian Bond Index last year made 9.25%. — Garth

#85 not 1st on 01.31.13 at 11:59 pm

Gold is insurance to protect yourself from the tyranny of central banks, just like assault rifles.

#86 squidly77 on 02.01.13 at 12:00 am

RIMMS’s new BB10, too little to late, lights out.
It’s a Google DROID world now. Google is the worlds gateway to all that is information.

Googles company motto ‘Dont be evil’.
http://en.wikipedia.org/wiki/Don't_be_evil

#87 Cici on 02.01.13 at 12:03 am

Hmmm,

Well, if the showroom floors keep closing and there’s no where left to window shop, won’t that catch up with Amazon and translate into lost sales for them too?

The less you see it, the less you want it, the less you buy and the more you save.

#88 Inglorious Investor on 02.01.13 at 12:12 am

“You have few friends, don’t you? — Garth”

Will you be my friend?

Far too dangerous. — Garth

#89 Inglorious Investor on 02.01.13 at 12:14 am

“Far too dangerous. — Garth”

I know what you mean.

#90 Hurricane Sandy on 02.01.13 at 12:24 am

It is of interest on the value of homes in Canada especially when it comes from media coverage. I live in Alberta and it still amazes me on all the pro real estate in the papers on a daily basis i.e. Edmonton Journal, Calgary Herald. Most of the articles say according to the job creation, oil; blah, blah, blah, that house prices will continue to rise in Alberta in the foreseeable future and expect the trend to continue. That being said most of the articles are written by real estate boards and financial institutions. It is rare to get an article written from an economist on his views; maybe mainstream media wants nothing to do with an unbiased article. On that topic Alberta continues to have many issues facing 6 billion dollar deficit, most oil/gas stocks are at 52 wk lows or even 10 year lows. So AB is not the land of milk and honey at the moment. Also, two relatives one in Edmonton and Calgary have been unable to sell their homes and been on the market upwards of 6 months. I agree with Garth were in for retrenchment in real estate in the coming months and years.

#91 Max Jones on 02.01.13 at 12:28 am

Garth, thank you for the advice over the past 18 months. Right now I’m recently divorced, a net worth (after the divorce) of about a million, and renting a bungalow in Tsawwassen BC for less than a thousand a month. The owners, a former AC 767 driver (read “big pension” ) winters down in Costa Rica.

My ex bought the old homestead off me with a whopping mortgage that will leave her in debt for the rest of her live. Good for her.

As for me, during the summer months I’ll hang out on my modest sailboat. Just 35′ of nothing special but the mooring fees cost more than the upkeep. The hardest transition in life was giving up my desktop computers for laptops and then tablets. Fortunately I’ve grown to like Win 8. MS actually has a winner here.

Now just where can I keep my home brewing setup? And where does a wine cellar fit on a small sailboat?
Oh, did I mention that I’ve being living with a cute Japanese gal, 15 years junior to me, for the past 6 months? It just keeps getting better!!

Ah yea just to be on topic, I buy a lot of Blu-Ray disks, about a hundred a year. Since HMV “bit the dust” I tried to get what I wanted from Best Buy / FutureShop but have now given up..These guys just don’t know what movies to stock. Not a clue. So Amazon.ca is getting my business these days.

#92 Basil Fawlty on 02.01.13 at 12:31 am

““Stuff is stuff. — Garth”

Are you serious?

And correct. — Garth”

The Chinese imported 720 tons of gold in 2012. It likely would have been more prudent to purchase cell phones.

I thought you would have found a new hobby when gold went over $1000, but you are still messing with our minds.

#93 marco on 02.01.13 at 12:33 am

After 15 years of increases, sure the re martket should correct a bit. A crash – never. When Toronto is all built up in the next few years and there is no more land to build, what will happen to supply and demand Garth. The next couple of years, as prices should corrrect, will presen the buying opportunity of a lifetime. And Garth knows it- especially for Toronto- Canada s most important and practical city. Home of immigrants forever.

Secondly if Garth u are correct and real estate goes down, the ramifications on the economy in Canada willbe horrific- as you pointed out with those store closure- and thats just the beginning. And thats why i rates will not increase because Harpers boys knows they f’ ed up. They have to save face. And Bernanke will “have their backs” as he has promised to keep 0 the new normal.

So Garth i am praying for RE prices to correct because as KRAMER says – its time to BUY BUY BUY

#94 Old Man on 02.01.13 at 12:40 am

#88 Inglorious Investor – I will be your friend, but you will have to pass the sniff test with my dog Gertrude, and if you pass will lick your hand, but if you fail she will attack you, so think about it.

#95 NorthOf49 on 02.01.13 at 12:42 am

New spec build in the spotty GTA, never lived in:

http://www.realtor.ca/propertyDetails.aspx?propertyId=12431773&PidKey=1197763481

July 2012 – $819,000
Sept 2012 – $719,000
Oct 2012 – $699,000
Jan 2013 – $684,900

Word on the street is that small builders building on spec are getting crushed by the combined forces of high build costs, too much inventory and new mortgage rules.

#96 Inglorious Investor on 02.01.13 at 12:49 am

#87 Cici on 02.01.13 at 12:03 am

“Well, if the showroom floors keep closing and there’s no where left to window shop, won’t that catch up with Amazon and translate into lost sales for them too?”

Holy cow, Cici! I just realized that Amazon is going to buy Best Buy! Maybe we should load up on BBY!

#97 Some unsold condos become rentable on 02.01.13 at 12:49 am

Re: “Unsold condos are for sale, not rent. — Garth”

Actually, I just rented a condo in a complex built by a developer who planned to sell all of the units. However, when the real estate market eased drastically in this city a year or two ago, the developer decided to rent out the remaining unsold units which, proportionally, represent a very large number of the units. In fact, I was told that between the developer’s rental units and individually owned units that are being rented out, 70% of the complex is being rented out. Sounds like it’s been quite a speculative market here.

#98 lol on 02.01.13 at 12:51 am

Smoking Man

#99 Victoria Real Estate Update on 02.01.13 at 12:51 am

Hello to all of you Victoria people that read this blog. I’m a Victoria girl and I am here to share what we know about the housing market in Victoria. We were close to buying a couple of years ago but decided against it after we started to seek information other than what was available from the mainstream media, realtors and the real estate board. Over the last 2-3 years, prices in Victoria have come down enough that we have saved a lot of money by renting. We are so glad that we didn’t buy. We know there are much lower prices on the way and we are happy to rent for now.

Canada is in a huge housing price bubble right now. It is at least as big as the US bubble was before it burst in 2006. The cities you hear about crashing the hardest in the US usually include Miami, Phoenix, cities in California and Las Vegas. These cities reached the biggest individual housing bubbles in that country just like Victoria and Vancouver are the most overvalued cities in Canada right now.

The real estate industry wants you to think that these extremely high prices are normal for Victoria but they are not. They want you to buy right now.

In 2005, David Lereah was the chief economist of the National Association of Realtors in the US. He had a similar message for the American public immediately before the crash started in 2006.

“The continuing shortages of housing inventory are driving the price gains. There is no evidence of bubbles popping.” – David Lereah, NAR’s chief economist, August 2005.

Many of our friends bought houses 2-3 years ago in Victoria and they now owe more on their mortgages than the value of their homes. They think we are smart for renting while prices come down. I can see how stressed out they are about this. Everyone told them it was a good time to buy and that house prices only go up.

We learned a lot about housing bubbles around the world, and there have been many in the last 5-6 years. Virtually every one of them has either corrected significantly or has started to deflate, like Canada. The US example is the best comparison for Canada for obvious reasons. All housing bubbles around the world were the result of lax lending standards that pushed prices to unsustainable levels. Naturally after prices get to be too high and the average family can no longer afford the average house, prices come back down.

House prices in Los Angeles increased a lot just like they did in Victoria. Los Angeles prices corrrected by almost 50%. Victoria will also see much lower prices.

This house is currently for sale in Los Angeles. At the peak of the US housing bubble, it was valued at $485,000. Its value came all the way down to $200,000. It definitely pays to rent instead of buying at bubble prices.

Girls and guys I know how it feels to want that house like nothing else in the whole world. It just doesn’t make any sense to buy at this particular time. Wait for lower prices, they are on the way. I’m glad that you have come to this blog seeking more information.

Tell your friends about this blog. I’m sure that Garth will be glad to have them here.

Until next time – cheers!

#100 ozy - let the pharaon harpon lone on 02.01.13 at 1:12 am

suck it up fellas, you can’t afford a kando but u dream at a house? then so something about it.

We slaves shall unite like 1 or leave the country – this will become the Famous Exodus of slaves from Cangipt, let the pharaon harpon lone, like the rime?
Start the social activism (bitch about your slave-like social status for a start) in your gang of neighbors\circles of chained amigos.

Comments?

#101 On the subject of "stuff" on 02.01.13 at 1:16 am

Regarding your recommendation to get out of “stuff” or real things and into financial assets

Bill Gross of PIMCO, in part, disagrees with you. He says: “Transition from financial to real assets if possible at the margin: buy something you can sink your teeth into – gold, other commodities, anything that can’t be reproduced as fast as credit.”

#102 Andrew on 02.01.13 at 1:23 am

“Stuff is stuff”
Why is Garth getting a hard ride on this?
Say a company goes bankrupt, the receiver adds up the assets, whatever the company owns is considered an asset even an old microwave counts. After the liquidation sale the proceeds are divided amongst the creditors.

#103 mathman on 02.01.13 at 1:24 am

If I had a $ for everyone I knew that was planning on unloading this spring, I wouldn’t be commenting on this blog. The spring market will be very interesting, boomers selling so they can eat and live, house horny couples looking to shack up and wanting to sell each of their 700 square foot pies in the sky, and move into a house.

It is not different here and the condo market will be decimated, when interest rates normalize, the SFH market will get crushed. According to reports this week, statistically my partner and I are in the 1%, but we don’t have an 800k plus mtg, yet thousands of folks do. Who will be able to keep up the payments when the eventual happens?

As always I hope I’m wrong for a number a reasons, but this is not going to end well. Financial illiteracy is epidemic in this country, the very people that the gov’t should be protecting, will be victims of gov’t policy. When rates are so low, it’s like the money is free, all fundamentals get thrown out the window.

#104 A Yank in (Parksville) BC on 02.01.13 at 1:34 am

Yesterday we had 3 Best Buys on Vancouver Island. Today we have none.

Lots of houses and condos for sale here.. if anyone’s interested.

#105 happy renter on 02.01.13 at 1:35 am

Hey Garth,can you explain to us whats going to happen with the world with all this printing money and countries devaluing their currencies?Is it wise for the U.S. to buy $40 billion of mortgage debt a month?Your an ex politician,what would you do to fix all this mess?

#106 earlybird on 02.01.13 at 1:42 am

People still think prices are going to double within a decade! I had a fellow mention that he was glad to buy at 450 000 because “they will say in 10 years, arent you glad you bought at a half a million when it will be worth a million” Are you fricken kidding me? Soooo much accomadation and incentive has been pumped at real estate in the last 10 years, my dog could of received a mortage! It has all been exhausted. We really are at the point of diminishing returns naturally, plus all the tightening of rules…it is impossible for monster gain in Real Estate going forward.

#107 Joe in van (livin in it) on 02.01.13 at 1:54 am

#91 max Jones, What are you on, you bitter twisted old man, save your personal rhetoric for for your FB page

#108 Joe in van (livin in it) on 02.01.13 at 1:56 am

#91 max Jones, What are you on, you bitter twisted old man, save your personal rhetoric for your FB page. Note to self don’t blog when pissed. Ladner bhoy

#109 Gunboat denier on 02.01.13 at 1:57 am

Derek R – you did it! Numero uno! Congrats! And so humble…..

#110 The Man From Nantucket on 02.01.13 at 1:58 am

Flat screens? — Garth

Yes. The new one I just hung on the den wall was an online purchase.

Better price, free shipping.

The suburban big-box store in its current form seems very inefficient. I heard talk that they were going to morph their model into smaller stores.

Regression?
We’ll see.

#111 Nostradamus Le Mad Vlad on 02.01.13 at 2:01 am

-
The licence plate — 572 WOO — lets the readers know the feeling of elation the (former) wife must have felt after cleaning him out! BTW, The Sting (Redford / Newman) was a great film.

“In an economy 60% comprised of consumer spending, the consequences sting. And that brings us to this week: 900 jobs lost and 15 stores shuttered at Best Buy. Another 700 people on the street at Sears.” — In a town which has only one or two industries, it would be time to shut up shop and make a new life elsewhere. If retail slumps in K-Town, the effects will be noticeable.
*
#2 Randy — “. . . won’t they raise taxes, fees and rates of all types ?”
– and –
#12 Bill Gable — “Two words. TAX HIKE.” — The question has been answered, so the only points remaining are: Will it be a fed. or provincial hikes (or both), and by how much?

#70 squidly77 — I use YouTube to play full albums. Cheaper and good selection.

#83 Inglorious Investor — “That’s why the Beard@TheFed continues to pump trillions into the banking system on the pretence that it’s for the economy.” — Like this? and this? 7:02 clip.
*
“Yes, real estate always goes up. You Italian? — Garth” Check this out; Coup d’etat in US? Plus 4:10 clip Nevada stops payment; 44:58 doc. Meltdown; Floating Gold Whale excrement; Shell Good profit and Mexican explosion in PeMex’s offices. Was it because of this? Ratbanks Incl. chart; Iran – China Oil trade booming; Gay Paree? Not with the lights out; Good headline Covers three aspects in one story; Jobs are evaporating in Silicon Valley, too; Oz’s economy Not too good; Eight Retailers and Best Buy is one; 0:31 clip Personally, I view this baby as a conspiracy theory; Debtors and DebtorsConfusing.
*
Ladies Interested? Pix are not pix, they are pencil drawings; Zombies Ummm, I’m not quite dead yet, sir; Zambia Almost full circle rainbow; Mad Monkeys No, this ain’t the US Fed; Laugh? The last the a person sees before being devoured; Ruff day at the office? No hair discrimination? Burden Many have harder lives than we do; GM Frankenfoods Long list; Further info. on who controls the western m$m; Exfoliating Soaps to be banned. Fracking is bad for water, but these are bad too; 4:42 clip Large glacier collapses, causing bumpy sea; MSG and Alzheimer’s Link found; Boneyard Where USAF jets go; Underground tour Jerusalem’s western wall.

#112 kilby on 02.01.13 at 2:29 am

Talk about inflation:

Ikea hot dogs went from 50 cents to 75 cents!!

Holy hyperstagflation batman…. Stay tuned, same bat channel, same bat time
——————————————————————

Costco’s are still $1.50 with drink way better way to get your RDA of fat and cholesterol. A lot of people go to both for cheap lunch….

#113 Mt pleasant on 02.01.13 at 2:39 am

I am on an e-mail list from a developer here in vancouver. I got an e-mail today saying they are having a sale on one of there units maybe the last one small building 27 units i think. Price slashed around 25k about 7%. I notice there are other units in the same building that have been for sale for months. I wonder what the other owners think about the sale price?

oh and buy low sell high i believe air care is scraped in 2014 Christy was trying to win votes.

#114 Piccaso on 02.01.13 at 2:51 am

Smoking Man
DELETED

——————————————————-

Love it

#115 Andrea on 02.01.13 at 3:17 am

Garth, I am really happy to report to you that in the last two weeks I have SAVINGS for the first time without any debt. I now see managing money as a life skill now. While to some this might seem trite, I can honestly tell you that when I first read your posts 18 months ago about real estate and RRSPs not being a “nest egg” and that Canadians were in serious personal financial debt, I felt this sense of doom, ignorance and urgency to become financially literate. I used my RRSP to go to school to improve my career path, sold my home successfully, and cleared up all debts. I have started a trickle of a residual income. I still feel like I know “nothing” when I read some of your posts but it’s getting better. This is the third time I have written you in 18 months. It has taken that long to do this. Kind regards and sincere gratitude.

#116 Freedom First on 02.01.13 at 3:20 am

Best Buy-store closures-layoffs, Sears-layoffs, Banks-layoffs announced-sorry-read this did not keep the link. Garth, bad enough that you have been reported in the media as one who is to blame for the now wobbling RE market, as per the links you supplied in past posts on your blog proving this to be true. Now, it only makes sense that you will also be blamed for the now happening layoffs in Canada for the reasons explained so clearly in today’s blog. Imagine, people ate up the bs printed by the RE industry, and the msm, and yet try to verbally assassinate Garth for writing the truth.

Thank you for your blog Garth Turner. Providing the sunshine of the truth, in a world which can often leave me jaded with the unethical antics of the dark side of humanity. And for you doing it so calmly and with the humor only appreciated by the aware, the honest, the balanced, diversified, and the liquid, who always reign supreme. The Champions, not the losers.

#117 dosouth on 02.01.13 at 3:28 am

#28 JSS on 01.31.13 at 10:35 pm

Best Buy closed because they can’t compete with the likes of Amazon. People just walk into Best Buy to do some window shopping, pick out the stuff they like, and buy online.

Flat screens? — Garth
________

Gotta say that last year I ordered a 32″ LCD from Future Shop on-line (on-line price only deal) and yes, it came by Canada Post – who would have thought….and it was in one piece.

#118 Richard and Zeus on 02.01.13 at 3:28 am

If the money they created ever got out, it would unleash inflation, the likes of which we’ve never seen. Then the great unwashed might start thirsting for some politicians’ blood. Thus, they are attempting to engineer a confiscation of the people’s firearms. They are getting ready in case the $h!† hits the fan.

You have few friends, don’t you? — Garth

Wrong Garth……in Canada and the US…he has about 100 million friends. The US govt has about 4million guns. Im not too worried about them taking any away when they are outnumbered with ex-military veterans about 25-1

#119 Al Puttah on 02.01.13 at 3:28 am

Subprime on a new rampage in the USA.

Back to Victorville, Part Five: A $200,000 House for $850 Down
By Yasha Levine
https://www.nsfwcorp.com/dispatch/victorville-part-five

Forbes:
Meet The New Subprime: It Will Cost Us Billions
By Richard Finger
http://www.forbes.com/sites/richardfinger/2012/09/30/meet-the-new-subprime-it-will-cost-us-billions/

#120 S on 02.01.13 at 3:38 am

#84 S on 01.31.13 at 11:57 pm

“A simple portfolio of 60% in the Global Equity Index and 40% in Canadian Bond Index last year made 9.25%. — Garth”

Fair enough. And with benefit of hindsight one could pick FBIOX, ITB etc. Getting out of real estate ASAP – assuming one was stupid enough to get corralled into it in the last six or so years to begin with – is a nobrainer. Picking a winner for the future a little more tricky. If 10% return was a cake-walk half the people I know wouldn’t bother getting out of bed in the morning.

Sounds like you get your advice at the bank. — Garth

#121 Bloggers Daughter on 02.01.13 at 4:40 am

So my father recently (this past September) got me hooked onto reading Garth’s blog. To which I agree that housing prices have no where to go but down.

Back in 2009 my husband and I bought a 4 bdrm, 2000 sq ft sided home in Bradford for $350k. Last year we watched houses fly off the market at insane prices, and we thought to ourselves lets just put our house up and see what we could get for it. We sold in 9 days for $490k. We did, what Garth would probably have advised against but bought another home. We ended up with a 4 bdrm plus den, 2800 sq ft., fully bricked house for $400k (includes upgrades). We bought based on emotion, because as a mother I want a roof over my children’s head and some roots for them… i want a home, not a house. The only reason we ended up with a house so silly big is because it was the best price for a home on the market (new build, we paid $144/sq. ft after upgrades). Everything else is stupid expensive for crap these days.

But now to my rant about the government and why I believe Garth is onto something here!

Just today we received notice in the mail that, “all properties in the province of Ontario were subject to reassessment in 2012 as a result of the change to base year for current market values from January 2008 to January 2012.” What the f**k is this? I don’t know what our current property taxes are as we have not yet received the assessment, but on our house in Bradford it was assessed at $336k and we were paying $4500/yr. How are families to afford just regular fixed expenses?

We are a family of 4 (a 2.5 yr old and a 1 yr old). We make a decent living. We have NO household debt outside of our mortgage, not even car payments! Yet I still feel like we are being torn a new a$$hole from the government! And to top it off, I also got our enbridge notice that its going up $65/yr for the average family. I can’t imagine how families are doing it if they really are in as much debt as people say we Canadians are in.

God help us! Cause I think we all know the government isn’t!!!

#122 drydock on 02.01.13 at 4:46 am

# 63

I’m not only not afraid of God, i played hockey growing up in NDG in Montreal and i ride a Harley.

#123 Tony on 02.01.13 at 4:49 am

Bell Canada the most overpriced company on Earth will be next as the recession in Canada begins to dig deep.

#124 drydock on 02.01.13 at 4:53 am

Whats with all the cell phone bilge this episode?
I stopped using them 3 years ago,they are so ’90′s.
I have 2 left over, one i use as an alarm clock and the other for storing info and as a backup alarm clock.

#125 Canuck Abroad on 02.01.13 at 4:54 am

Until recently you said earning 7% on a balanced portfolio was reasonable. Now you are suddenly saying 10% is achievable. This is a jump of nearly 50%! I think this is an outrageous suggestion and you should back this up with some facts.

News flash for you: returns fluctuate. Last year was a double-digit one. Sounds like you missed it. — Garth

#126 Tony on 02.01.13 at 4:56 am

Re: #93 marco on 02.01.13 at 12:33 am

Toronto area houses will follow the Toronto condo prices and implode like California and San Diego did.

#127 Buy? Curious? on 02.01.13 at 5:29 am

Who’s to blame? Banks, politicians, realturds, your mother inlaw? Look, there are winners, like me, and then there are losers, the majority of you. Why do you think you’re poor or middle-class (the term is interchangeable these days)? It’s because those that play by the rules are the ones that get taken advantage of. I have a friend that went to court with a contractor and the contractor lied and lied, under oath, and my friend lost. If a bank is going to give you a mortgage for $800k, take it! If the gov’t going to give you a student loan to get a degree in Women Studies, do it! But remember, it’s not your fault if you can’t pay it back.

#128 Beach Girl on 02.01.13 at 5:38 am

meslippery on 01.31.13 at 11:44 pm

Beach Girl
Good to here from you. How are you ? still have the dog?
Better friend than your old flame ?

Oh I know you like smoking man but while you where a
way he said he was Amanda Lang.

But I still love you.
____

So happy you remember me. It has been wonderful. Fell in lust in Dubai. He is a plastic surgeon, not sturgeon. Getting a minor lift for free, WINK WINK. Ya, I will take one for the partee. Ultimate funny part is he thinks I want to look good for him. LOL. RIM sucks, I know young women who could make a better presentation. SAMSUNG will kick their ass. Loser central. And of course I am not Smokin Man. Though he is totally awesome, but I am much better. Even he knows that. I have better body parts. can’t wait for this SUMMER, will be epic, I will look great. I will be strutting this stuff.

#129 Beach Girl on 02.01.13 at 5:57 am

#188 Smoking Man on 01.31.13 at 10:30 pm

Beach chic, glad your posting.. Need You to relieve the pressure off me Garth he’s like a broken record, me been carrying this pathetic Blog. THE wife had bad news, hopefully nothing….

Damn, shit……
____

Hey bud, sorry for you and the Mrs. Actually I am a nice person. Maybe you might want to visit free of course. Am wealthy, kinda live large. I have a whole wing of my house I don’t use. 3 bedrooms and a private bathroom. Hopefully everything works out. Your friend. G.

#130 Devore on 02.01.13 at 6:01 am

#19 hoser

Some homes in West Vancouver pay over $20,000/yr in property taxes. How are they going to hike more taxes?

People who can afford to buy $2+ million houses have a problem with $20k?

#131 Beach Girl on 02.01.13 at 6:04 am

I am glad to be here. I will need you people in the next few weeks as I recover from elective surgery. Kinda like a Valentine present to me. Thanks to all, and Western Homo Man, we still love watching you stew in your own juices. Because that is all you can aspire to. Do you have Carpal Something Syndrome? Oh, if I say more I am gone.

#132 Pr on 02.01.13 at 6:29 am

Sales for Quebec province: -10% , not that much.

#133 Devore on 02.01.13 at 6:42 am

#39 Buy Low Sell High

I heard that BC scrapped this program which I found a bit odd for an environmentally sensitive province. Can any west coasters shed some light on this?

They said it’s done its job. So many new cars on the road now, no need for AirCare.

Never saw the point of this program anyway. With so many exemptions and loopholes (just drive around for a few minutes to see for yourself) only ones getting a fail are idiots who modded their cars and forgot to reset the computers before going in for the test. Basically, show up with a warm engine, pay the $50 tax, and you pass.

#134 Uh Oh Canada on 02.01.13 at 6:44 am

Garth- could retail companies be affected by the high cost of real estate too? I’m sure commercial real estate has gone up along with it’s residential counterpart. It looks like REITS dealing with retailers will see some decline.

#135 Devore on 02.01.13 at 6:45 am

#41 HAWK

The major difficulty with gold is “paper gold” trading by the world’s power players today. That is why gold appreciation will be slow and gradual. If legislation mandated (as it should) that all trading be physical, then the appreciation would be sharp.

The people who use commodities for, you know, making stuff, need to be able to predict their input costs and use futures contracts (ie paper) to lock in their prices.

#136 Devore on 02.01.13 at 6:55 am

#48 White Rock Mom

When the German government wants all its gold in Germany you should stop and wonder why. Is something wrong?

It’s their gold and they want it in Germany. Why wouldn’t they. I don’t understand why everyone’s making such a big deal of it.

Gold nuts have it all backwards, like real estate pumpers who cry about “government intervention” when accommodative policy is scaled back to normal levels, but were perfectly fine with emergency measures. The shocker was when Germany bought tonnes of the stuff, and was ok keeping it all in New York.

#137 buy hi on 02.01.13 at 7:49 am

Everything on Vancouver Island should be abandoned (re Best Buy/Future Shop pulling out of the Island) and they turn it into a North American prison island like G-Bay in Cuba. The US could pay a few billion to buy a stake in it.

Maybe a new Australia…frees up the real estate prisons are on. Its a useless money costing pile of dirt anyways.

#138 Nathan on 02.01.13 at 7:52 am

The EU gets an official house-price index from the central statistics agency as a tool for measuring economic growth:

http://blogs.wsj.com/brussels/2013/01/31/a-house-price-index-for-the-eu/?mod=WSJBlog&mod=brussels

#139 Jayesbee on 02.01.13 at 8:15 am

Garth, I own a condo in downtown Brampton. (Yea yea I know you just rolled your eyes) In any case, its a rental unit. 1br + den. Its rented to a great tenant who has been there for almost 2 years now. He works about 10 minutes away (he’s a teacher). My mortgage is also around 1200.. locked in for 5 (this year).. accelerated over 10. You say you dont need to pay it off right away because money’s cheap. Well for the past 3 years I have borrowed from the LOC, 10K, and used that to fund my RRSP. This year I did the same and then locked it in (dont worry both mine and my wife’s TFSA’s are maxed out). Now for the gluttony of Condo’s downtown.. how does that really affect me? There are very few condo’s in downtown Brampton and I dont think any are even under construction. I know my tenant isnt going to leave and buy downtown if there is a collapse. He left Mississauga because of the commute. Not to mention my 750sqft condo probably cost less than half of what those units go for Downtown. So as you have been saying with regards to micro-markets, sure he might get an opportunity to buy a unit in the same building (there are two units for sale @ approx 250k, same model) but even still, I dont think ill have any issues renting to another tenant.

#140 maxx on 02.01.13 at 8:20 am

Anyone see “Generation Jobless” last night on CBC?

Prognosis: negative. Points out that jobs are disappearing in great numbers and will continue to do so for decades to come.
Does not bode well for overpaid-for, long-term debt burdens that decline in value. These are permanently destructive to wealth.

#141 T.O. Bubble Boy on 02.01.13 at 8:29 am

@ #95 NorthOf49 on 02.01.13 at 12:42 am

New spec build in the spotty GTA, never lived in:

http://www.realtor.ca/propertyDetails.aspx?propertyId=12431773&PidKey=1197763481

____________________________

Ya – you can’t trust any builder who puts a McMansion in Hamilton and calls it Burlington. ;)

Sad part is, if you put that place in Lawrence Park, the 80×130 ft lot is more than triple the typical 25ft lot size, and that place now goes for $3M-$4M.

#142 Gypsy Kid on 02.01.13 at 8:32 am

Old Man, I hope you go in for regular maintenance because as your name suggests, you probably need more repairs then any “wife” out there. eeewwwww…old man.

#143 AK on 02.01.13 at 8:51 am

.#124 Tony on 02.01.13 at 4:49 am
“Bell Canada the most overpriced company on Earth will be next as the recession in Canada begins to dig deep.”

Go ahead and short it.

#144 AK on 02.01.13 at 8:54 am

#127 Tony on 02.01.13 at 4:56 am
“Toronto area houses will follow the Toronto condo prices and implode like California and San Diego did.”

Interesting. Las time I checked, San Diego is part of California. You should get your facts straight before you post.

#145 economictsunami on 02.01.13 at 9:08 am

I remember your interview on TVO from 2008 and recently posted a link. With enormous intervention from government stimulus and CB QE it would take awhile for the fog to lift.

“I told you more than a year ago to expect asset deflation (real estate, cars, smart phones, gold) at the same time as price inflation (food, gas, daycare, insurance).”

Unfortunately, you couldn’t be more correct. When Sherry (?) stated “a stopped clock is still correct twice a day” that statement should have given her great pause…

#146 MrC on 02.01.13 at 9:09 am

This is just a shift in retail jobs from two companies. Lets look at how many jobs the new firms (Target, Walmart expansion etc) have created. Also, some of these jobs will come back as Best Buy opens smaller stores like they said.

#147 futureexpatriate on 02.01.13 at 9:10 am

#48 Here, here, Garth!!! It’s long beyond time that paranoia is no longer regarded as something cute, funny, or at the most, pathetic, and instead recognized for the dangerous societal-destroying insanity it is.

Ditto the paranoia-merchants.

#148 Canuck Abroad on 02.01.13 at 9:17 am

News flash for you: returns fluctuate. Last year was a double-digit one. Sounds like you missed it. — Garth

Errr, no I did not, but that’s not the point. I did quite nicely, thanks for your interest. However, you are taking a single years double digit returns and projecting out long term and telling people they will double their money in seven years (yes, you did, a week or so ago, I can find it for you if you need).

Just because you (and everyone else) managed a double digit return in 2012 does not mean it is reasonable to expect the same for the next ten or seven or even five years.

I did not forecast returns, but used the most recent year as evidence liquid markets have performed well. A long-term investor in today’s environment should expect the 7% I often reference. Why are you having difficulty? — Garth

#149 Stoopid Idiot on 02.01.13 at 9:27 am

#3 Not 1st.

Garth, cars and smart phones have never been assets. They are consumables and depreciate the minute they are manufactured. These shouldn’t be lumped in with real estate because it has lasting residual value and can never be zero.

Maybe on your planet. — Garth

Money is money. Gold is a commodity. And this is the first and last comment. — Garth

Grouping real estate and gold into the same asset class as cars and smart phones insults the intelligence of your readers.

Stuff is stuff. — Garth

So Then, with this line of thought, Gold can be worth zero? Garth … your all over the place. Inflation is a symptom of an increase in the Money Supply M3 it’s not the cause

#20 AK

LMFAO. Yes, we will soon be walking around with nuggets in our pockets.

No…. soon or maybe already your walking around with nothing in your pocket… Lap Dog

When you can pay the rent with rocks, we’ll talk. — Garth

Garth lets talk… right now I pay the rent with sweat

#49 Dom

Don… do not go into retail

Be kind Garth….. The only ones up at this time zone would be the unemployed A$$ Clown….. Dr. WAYNE

#150 Axxman on 02.01.13 at 9:33 am

From a 1996 edition of Macleans: Edmonton-based Multitech Warehouse Direct closed its remaining 18 stores across the country after the Bank of Nova Scotia appointed a receiver to liquidate its inventory. The electronics chain had earlier closed more than 20 stores.

Oh the mid-90′s….when the good old days ever return?

#151 EIT on 02.01.13 at 9:35 am

Besides, buying gold/silver is an act of rebellion.

Remember this headline?
“Using Gold As Money Is Terrorism: U.S. Attorney Tompkins”

Conclusion: all gold bugs are terrorists at heart.

Is this helping to clarify things for anyone? lol

#152 The Man From Nantucket on 02.01.13 at 9:42 am

#122 Bloggers Daughter on 02.01.13 at 4:40 am

You seem very confused. On one hand you agree with Garth that now was not the time to buy large and distant-suburban.

On the other hand, you go and do exactly that……and then start having a bit of fear and remorse because you’re going to get walloped by the extra costs to service this larger pile of bricks and drywall.

I recently struggled with the same decision – to sell at the top, maybe for a gross “profit” of 60% ish.

I did not, largely because I have a good home, well located, I can make the payments and keep up with the other bills, and I just really didn’t feel like moving.

Rest assured though, that if I did sell, I would not be rushing back into buy in this market…….

Rent is roughly equal to my mortgage payment on the 6 years ago purchase price. Rent is about 2/3 of the mortgage payment at today’s price/rate and includes tases and maintenance. By my reckoning, this means most of my new neighbours are financial retards! :)

#153 TBay Man on 02.01.13 at 10:00 am

So if the economy consists of 60% consumer spending, and the continuing real estate mess will decrease consumer spending, we certainly cannot expect our Canadian equities to do well in the next few years. I really doubt a balanced portfolio will yield 10% if Canadian equity is looking so bleak.

A diversified portfolio will have a minority Canadian equity holding. That’s why it’s diversified. Last year the TSX made 4.8% and the S&P 13%, and yet 80% of Canadian investors have only domestic holdings. You reap what you sow. — Garth

#154 Bigrider on 02.01.13 at 10:02 am

#23 Dave- Garth replies “Yes real estate always goes up. You Italian? ”

#93 Marco- No reply from Garth but Marco you are DEFINITELY Italian, no doubt about it.

And of course there is our loving Nonno at #8 with his semi detached ‘investment’ property.

So glad our host is getting better at spotting the posters from the land of tomato sauce and spaghetti..LOL

#155 Dupcheck on 02.01.13 at 10:29 am

Ones country is where their home/house is. The Gov should not raise property taxes if they still want us to keep our homes. By keeping our homes we are subsidizing the Gov and helping the economy. Otherwise people will consider their options. A big chunk of Canadians have double citizenship’s, if our Gov does not know how to keep us here it will be their loss.

#156 AK on 02.01.13 at 10:37 am

#150 Stoopid Idiot on 02.01.13 at 9:27 am

“No…. soon or maybe already your walking around with nothing in your pocket.”

You are correct. I keep my money where it belongs. “INVESTED”. Smarta$$!!!

#157 Holy Crap Wheres the Tylenol on 02.01.13 at 10:37 am

Déjà vu
One of my employees mentioned to me that he wanted acquire an investment property in Toronto last year. I mentioned to him that the word on the street was something bad was coming in real estate. At the time I myself was not cognizant of the ramifications of the information that an associate of mine provided. Over the last 10 months its quite obvious what was going to occur. My associate as well as Garth were both correct in their prophecy. Needless to say my employee investor being a snappy twenty-eight year old and his wife said they were going to purchase anyway. They had done this before and made some money. He said I could always rent it out and still make money. I told them there were better places to put your cash and invest. I am however an old guy and don’t know anything, boy that sure makes me feel bad as I have been running a successful company for over thirty years. No layoffs in that entire period. I don’t think he understands that at my age some of us have the hubris to make risky investments as we can afford some risk. But I digress again what do I know. My employee comes to me last week and mentions he and his house horny wife are extremely concerned about their investment in this condo, as they have sunk some serious cash into the venture. Apparently it is to be completed in 2013 and they are now hearing the rumbles on the television about a crash. They don not believe that they can sell it at a profit and in fact have been told they will probably take a big hit. I said what happened to renting it out? He said they have been doing some calculations and apparently the going rate in his particular area will not cover the mortgage and condo fees. What could I tell him? Nothing! I said there is a web blog you could read for some insight (The Greater Fool) but I don’t think you are going to like what you see in it (The Truth). I have a feeling that the money they made in the last venture will be used to try to float this sinking ship until she heaves belly up.

#158 Eaglebay - Parksville on 02.01.13 at 10:45 am

#104 A Yank in (Parksville) BC on 02.01.13 at 1:34 am

Yesterday there was 5 Future Shops on Vancouver Island, today there are 5.

As for houses and condos in Oceanside there aren’t that many for sale. Less than last year so far and prices are quite reasonable. And somehow they sell albeit slowly.

Many jobs created with the construction of Canadian Tire, Quality Foods, Save On, Health Center, small subdivisions and more. Very busy area with traffic everywhere.
Go out and look around.

#159 Toronto_CA on 02.01.13 at 10:47 am

http://theeconomicanalyst.com/content/whats-next-toronto-housing-market

“It’s difficult at this point to see where the turnaround in the condo sector will come from in the short term.”

I kind of agree. As Garth put so brilliantly in this post, things don’t look good for condos in Toronto in the coming future. Supply is exploding and will continue to build, interest rates on mortgages aren’t going to get any lower (although at least they won’t get higher), and demand will fall as word of mouth on condos as an investment is trashed from declining prices, insane greed stories (Trump Tower), not to mention glass balcony explosions and “special” assessments.

#160 rosie "moving forward" on 02.01.13 at 10:49 am

Anyone doubting the tenacity of America need only look at #111 Nostro… Boneyard pics. I can only see America moving forward. As for F. maybe some of the gas escaping from his housing bubble has found something else to inflate.

#161 LSC on 02.01.13 at 10:51 am

The unaffordability of house in BC seems to be the issue. Negative savings and 80+ % of take home to cover housing. It is interesting that 6 of the 15 BB/Future Shop closings are in BC.

#162 Eaglebay - Parksville on 02.01.13 at 10:56 am

#114 Mt pleasant on 02.01.13 at 2:39 am

Air Care only applied to the Lower Mainland. With over 95% of vehicles passing easily it became a cash grab and useless except for commercial vehicles. Therefore it will be eliminated.
Typical tree hugger, everything Clarke does is to get votes. Isn’t she a politician?
Maybe Mr Dick will do better?

#163 hangfire on 02.01.13 at 11:10 am

The fact is that the announcements coming out of Obama land regarding an end to the depression and an improvement in housing and unemployment are all lies…plain and simple.

http://urbansurvival.com/week.htm

The liberal reelection propaganda campaign is still in full swing..and if your getting the noise from the CBC that everything is rosy……keeerist your stupid.

So why are interest rates never going to come down you ask? Its because the government(s) have become so addicted to the new debt that they literally can’t afford to wean themselves off or repay debt at even marginally higher rates……here in the US a 1/4 point increase would result in hundreds of billions of dollars in lost ‘revenue’ that would have to be allocated to debt repayment on the ledger.

Look for massive tax grabs to continue as we saw in January…globally as the folks in Davos have agreed that ‘revenue’ has to increase. Hey you voted for this dummy…..now live with it.

People dependant on give aways will continue to vote liberal….that means only one thing…more debt…zero rates…and higher taxes.

#164 syfon on 02.01.13 at 11:10 am

Did you check the prices of palladium lately?
Classic cause of supply and demand.
What about platinum?
What happened when costs to get a metal out of a ground cost more than a metal.
Metal stays in a ground.
Production costs going up along with exploration in addition to few new discoveries will spell higher metal prices.

This is not precious metal blog, why bother

#165 Denise on 02.01.13 at 11:17 am

#138 buy hi: Ah, another jealous, arrogant BC mainlander likely living in disgusting, rain-central Vancouver – so envious of we lucky people that live on beautiful Vancouver Island.
You may be a troll, just trying to get a reaction; I gave you one, happy? Now go away.

#166 Eaglebay - Parksville on 02.01.13 at 11:20 am

#141 maxx on 02.01.13 at 8:20 am

CBC, ha, ha, ha…
The B stands for brainwashing.
There are too many people like you in this country, that’s part of the problem.
Don’t bet against Canada.

#167 Money talks on 02.01.13 at 11:23 am

Unsold condos are for sale, not rent. — Garth

We have had a different experience here in Winnipeg. First noticed after we sold our home last spring (private sale via kijiji) and looked to rent a house while we anticipated the market “softening”. We found many homes were up for both sale and for rent which led us to having to learn what our rights were as renters with school aged children whom we didn’t want to uproot mid-year.

One agent in particular, whom I suspect may be the actual owner, has these up for sale & rent: http://winnipeg.kijiji.ca/c-PostersOtherAds-W0QQUserIdZ14448198

#168 Spiltbongwater on 02.01.13 at 11:24 am

Love the picture. Dave is better to leave his wife Nikki. She doesn’t know your from you’re. Is that the kind of woman you want to raise your kids Dave?

#169 Jeff in Moose Jaw on 02.01.13 at 11:33 am

Amazing stuff Garth, the amount of condos in the system is shocking.
All of this debt is during the period of near zero interest rate policy.
This can’t end well. Canadians and most of the world can’t afford higher interest rates.

#170 Leo on 02.01.13 at 11:35 am

#23 Dave

“Yes, real estate always goes up. You Italian? — Garth”

Please give us some respect here, Garth.

#171 Devil's Paralegal on 02.01.13 at 11:37 am

#122

Where’s the new house (sorry, home)? Please don’t tell us it’s Barrie…

You purchased a 2800 square foot house for four people, because you’re a mother and want a roof over your children’s head, whatever. Each of your family member’s occupies almost the same space an entire family did a generation ago. Bradford has about zero density. So does Newmarket (or whatever great place your children now get to put down roots). Property tax is sky-high in places like those because there is no industry, and because everyone the whole “community” consists of expensive-to-service, needlessly large McMansions.

You should not purchase a house if you do not understand how property taxes are calculated and levied. If your house in Bradford was assessed at $336K and you thought property tax was too high, why did you choose to buy an even bigger house? Did you think that assessed value never changes?

To answer your question about families affording just “regular” fixed expenses, they think very carefully about taking them on. They run sensitivity tests, and make sure that those fixed expenses are not only affordable now, but in the future.

By the way, your house is not “fully bricked.” It is brick clad.

#172 Dr. Hoof Hearted on 02.01.13 at 11:37 am

#138 buy hi on 02.01.13 at 7:49 am

Everything on Vancouver Island should be abandoned (re Best Buy/Future Shop pulling out of the Island) and they turn it into a North American prison island like G-Bay in Cuba. The US could pay a few billion to buy a stake in it.

Maybe a new Australia…frees up the real estate prisons are on. Its a useless money costing pile of dirt anyways.

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

Yeah, the Island of entitlement

They moved the BC capital from New Westminster to Victoria. Dumb move. The crew of the S.S. Minnow could invade and take over.

Half the population is senile and thinks that Queen Victoria is still alive. The other half Works for Gov’t. Only purpose they have is to absorb Tsunamis and produce the odd Pamela Anderson.

#173 Ozy - slaves of Cangipt on 02.01.13 at 11:46 am

suck it up fellas, you can’t afford a kando but u dream at a house? then Do something about it.

We slaves shall unite like 1 or leave the country – this will become the Famous Exodus of slaves from Cangipt, let the pharaon harpon lone, like the rime?
Start the social activism (bitch about your slave-like social status for a start) in your gang of neighbors\circles of chained amigos.

Comments?

#174 Not 1st on 02.01.13 at 11:52 am

Garth re: domestic holdings….probably because of the extreme tax advantages. Also it’s easier to know what a company is up to when it’s in your own backyard. Plus the TSX is the best regulated market exchange in the world.

#175 Silver on 02.01.13 at 11:53 am

sold in vancouver… Packing… what a job… sheesh…
feb. 28th done…
profit realized…
smart commie…
Date on a property for 18th of February.. will tell me where I land.
Could get real lucky poaching far down…
Non refundable kicked in now…
seem like nice people who bought and wish them well…
i believe they can afford to ride the wave…

Green Acres keeps going throw my mind…
for all you people my age…

Silver

#176 The American on 02.01.13 at 11:55 am

Wow, so roughly 75,000 unsold units in Toronto alone, a city that is 1/5 the size of Manhattan. Let’s see how this pans out… In Miami, Boca Raton, New York City, San Francisco, Los Angeles, Seattle, Chicago, Dallas, Houston, Boston, Phoenix, and Sqn Diego, if you took all of these city’s condos they had unsold when the market collapsed, it still wouldn’t equal the number of unsold condos in Toronto. Right. Prudent and sound lending/banking practices is not what comes to kind when I think of the Canadian banking system.

#177 Doug in London on 02.01.13 at 12:11 pm

900 jobs lost and 15 stores shuttered at Best Buy. Another 700 people on the street at Sears. Add to that, did anyone else other than maxx (post #141) see “Generation Jobless” on Doczone Thursday night? Given that none of the above suggests strong consumer spending to help the economy recover, I wonder how the real estate gurus, namely Brad Lamb and Sherry Cooper, figure house and condo prices will keep going up? I wonder if they’ve even connected the dots to see what’s going on like Garth has.

#178 Doug in London on 02.01.13 at 12:18 pm

@The American, post #176 who said : Prudent and sound lending/banking practices is not what comes to kind when I think of the Canadian banking system.

You’re quite right. And now the punch line, most Canadians think our banking system is one of if not the best run in the world. Events that unfold in the coming years will test that assumption for how true it is.

#179 InvestX on 02.01.13 at 12:21 pm

“When you can pay the rent with rocks, we’ll talk. — Garth”

Gee, I wonder if precious metals can be converted to cash (like with ETF’s, preferreds, stocks, etc.)

Of course, which proves what I said. It isn’t money. — Garth

#180 The American on 02.01.13 at 12:25 pm

Toronto condo market = ramblings of decline, circa Aug 2013
Toronto condo market = blood bath, circa Aug. 2014
Toronto condo market = financial ruin, circa Aug. 2015
Toronto condo market = unfathomable losses, monetarily, emotionally, families in ruin, circa Aug. 2016

#181 cramar on 02.01.13 at 12:32 pm

#70 squidly77 on 01.31.13 at 11:37 pm

First Best Buy, then Sears. Next up, HMV music stores, they have more employees than you may think, who buys CD,s anymore. Ayone, anyone at all.

Actually I almost always buy CDs. Our older vehicles have CD players only, and I have CD players in home. I like hard copies and can always rip to mp3 when needed.

—————–

Speaking to the gold is (not is) money debate, it IS money in Utah!
http://www.huffingtonpost.com/2012/04/20/utah-gold-silver-currency_n_1440171.html

Utah? Seriously? — Garth

#182 Tony on 02.01.13 at 12:33 pm

Soon we’ll get the Canadian jobs report for January. How many jobs will Canada lose?

http://brighterlife.ca/2012/12/17/is-the-canadian-economy-in-trouble-in-2013/#comment-31619

#183 Denise on 02.01.13 at 12:37 pm

#173 Dr. Hoof Hearted: Another angry, bitter mainlander. Better get back on your meds.

#184 Niro Nero on 02.01.13 at 12:44 pm

‘Yes, real estate always goes up. You Italian? — Garth’

Hey Garth, I appreciate your blog posts, they are genuinely informative and in addition, the poignant humor always makes me chuckle…but I would never have painted you a racist. What a stupid generalization and irregardless of the message you were attempting to convey in your rebuttal, referring to one’s skin color or ethnic background is racism.

Let’s see if you Harley riding tight cheeks can man up enough to apologize for such a stupid slip.

I know you’re special, but since when are Italians a race? — Garth

#185 Beach Girl on 02.01.13 at 1:08 pm

DELETED

#186 Timing is Everything on 02.01.13 at 1:08 pm

Speaking to the gold is (not is) money debate, it IS money in Utah!
Utah? Seriously? — Garth

It started in low… then it started to grow. – Dr. Suess.

#187 Herb on 02.01.13 at 1:14 pm

#122 Blogger’s Daughter,

you don’t need derision along with the beating you are about to get, but there is an easy way to calculate the current assessed value (CAV) of your property.

You willingly bought it in an arms-length transaction, therefore the price you paid is its assessed value. You can plug that into your municipality’s Property Tax Calculator (on the municipal website) and behold the property tax due. You may or may not get an assessment notice, but your first tax bill will show the CAV that will determine your tax.

If the stated CAV is less than your purchase price, congratulate yourself. If it is higher than that, you have grounds and proof for a Request for Reconsideration. In any case, kick yourself for not having considered the actual costs of ownership before leaping in.

#188 Beach Girl on 02.01.13 at 1:14 pm

DELETED

#189 jess on 02.01.13 at 1:15 pm

twainville is no dollywood
a money pit becomes an open pit
http://www.therecord.com/news/canada/article/879361–shania-twain-centre-literally-becomes-10-million-money-pit-of-taxpayer-dollars

#190 Canadian Watchdog on 02.01.13 at 1:18 pm

Everyone is focused on condos while the majority of leverage is in detached homes. A household who puts down 40% on a $800k SFH is more levered then a household who put down 5% on a 350K condo. Look at levered dollars borrowed relative to one’s income, not what percent they put down. This table explains who’s really levered in this market.

#191 Blacksheep on 02.01.13 at 1:19 pm

White Rock Mom # 48,

“When the German government wants all its gold in Germany you should stop and wonder why. Is something wrong? Are they paranoid? Should you be worried too? After all, if you aren’t paranoid you aren’t prepared.”

“But you are insane. — Garth”
———————————————————
WRM, Garth is of course, the wrong person to pose this question to.

Should you be worried? No. A modicum of paranoia is healthy. Should you be labelled ‘Insane’ or ‘dangerous’ (fut-expat #148) for just asking the questions?

No. This is the ‘system’ attempting to self moderate. Some have difficulty, thinking independently. Others are biased, do to their benefiting from said ‘system’.

Should you be noticing these type events taking place to get a feel for trends, big picture? Of course.
To paraphrase: “Actions, speak louder than words”

take care
Blacksheep

#192 EIT on 02.01.13 at 1:23 pm

Government takes away the freedom of letting people choose how to buy and sell goods using legal tender laws.

Personal freedom is inversely proportional to government power/control. If you don’t agree, your definitions are off.

Typical gold nut. Conspiratorial, anti-establishment, suspicious, whiff of anarchy. It has nothing to do with investing. — Garth

#193 Dr. Hoof Hearted on 02.01.13 at 1:49 pm

Dr Wayne’s self exam:

http://media.beta.photobucket.com/user/da_4runner/media/Bush%20Funny%20Pics/bush_headupass.gif.html?filtersterm=head%20up%20your%20ass&filtersprimary=images&sort=1&o=30

#194 Beach Girl on 02.01.13 at 2:01 pm

I really don’t know what I am doing wrong? OK, I am sorry, for what?

Start by refraining from calling people dick wads. — Garth

#195 Kevin on 02.01.13 at 2:01 pm

Garth, a few graphs for you

Why the housing market in Canada is on shaky foundations.

Here is average house price and income growth for the top 1%, top 10%, bottom 90% and all income earners from 1982 to 2010
http://3.bp.blogspot.com/-tOSIZM_ed-s/UQv1SQx-mUI/AAAAAAAAFQE/x5_y7CoP-d0/s1600/Canada+Average+House+Price+and+Income+Growth,+1982+-+2010.jpg

Average Canadian House Price as a Multiple of top 1% and 10% income earners

http://2.bp.blogspot.com/-HPPMysM278U/UQvzwe8UuUI/AAAAAAAAFP0/CWYGL7ieDec/s1600/Average+Canadian+House+Price+as+a+Multiple+of+Income.jpg

Average Canadian House Price as a Multiple of bottome 90% income earners and all income earners
http://4.bp.blogspot.com/-6GZv_nh_g4U/UQv0TgZyMdI/AAAAAAAAFP8/iSRHLb6rX88/s1600/Average+Canadian+House+Price+as+a+Multiple+of+Income+low+income.jpg

We all know the foundation of the housing market is the first time buyer who uses their savings plus a loan to buy a home. That is why the above graph shows that Canada’s housing market is on shaky ground.

Now the above graph does not imply that 90% of all income earners today are in trouble because many of these income earners bought a home way before the housing boom. The graph implies that 90% of all future income earners who plan to buy a home will face financial difficulty unless they have significant savings ( I doubt it), they will need to take on massive mortgages just to enter into the housing market. Think about it, 90% of all future Canadian income earners would have to pay near 12 times annual income ( gross) for an average house. This is at a time when over 70% all young families need both people to work just to make ends meet. To think that the near future housing market is on firm ground is wishful thinking.

#196 Beach Girl on 02.01.13 at 2:05 pm

I think I am a nice person. I might see the world differently than some. Nothing wrong with that. Ask Clayton Ruby. He got me off my last charge. I’m OK.

#197 dosouth on 02.01.13 at 2:11 pm

#138 buy hi on 02.01.13 at 7:49 am

Everything on Vancouver Island should be abandoned (re Best Buy/Future Shop pulling out of the Island) and they turn it into a North American prison island like G-Bay in Cuba. The US could pay a few billion to buy a stake in it.
___________

Must have meant Newfoundland…

#198 Beach Girl on 02.01.13 at 2:13 pm

No criminal record here. So I meet some rich stupid people. Shit happens. My poor aweful offspring went to school with Christine and her husband Jim Flarety’s [sic] children. He has triplets, and one is disabled. He pushed for increased funding for disabled young people, as on of his children is not so functional. Did you not have that job? I respect what he did. Though it was so obvious. Sad to see him blown up like a puffer fish. Actually like the man. As politicians go. This won’t get through Garth the Guru.

#199 Timing is Everything on 02.01.13 at 2:22 pm

‘Credit Supernova!’

“They say that time is money.* What they don’t say is that money may be running out of time.” – William H. Gross

http://tinyurl.com/aou4dce

http://tinyurl.com/aehmb8p

#200 juno on 02.01.13 at 2:24 pm

CAmeron Muir thinks your wrong Garth. He’s estimate gains gains gains. Its sad to see this cluesless F^%K is running BCREA. If he’s the economist thats suppose to know it all, running the show. Just how screw are we?

http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/housingforecast_.pdf

Just note this guy said 12% gain in real estate prices last year. He’ was dead wrong, and we actually seen losses. (Not sure what the figures are but add the losses to the miss gains and he’s problaby about 15% OFF THE MARK!

Take last january’s sale figure and put them up to this january sale figure and your going to see huge huge differences. He’s probably about 60% off + the 5.7% estimate gains he’s predicting. clost to 66% off his target estimate. He’ can play with the figures all he wants and probably predicting against the december 2012 figures. But the guys a Lunatic. And should not be allow to promote propaganda in the position he holds.

Hey isn’t this insider trading or the same as Nortel fudging up this books to make things look rosy?

http://www.bcrea.bc.ca/docs/economics-forecasts-and-presentations/housingforecast_.pdf

#201 Beach Girl on 02.01.13 at 2:25 pm

Anyway, Clayton likes elephants. I prefer Polar Bears. And donate to them. I threaten the aweful offspring that there inheritance will be spent on bear food. They wish it was me. LOL.

I find it humourous that the Ford brothers come across as Hillbillies. When they are a very rich family. Nice side show. Of course he doesn’t buy pens and paper on the citys’ dime. He is a millionaire. Check his companies in the States.

Great gig. He made the small man like him more, when the GIANTS came after him and lost. You think that was not engineered.

#202 Humpty Dumpty on 02.01.13 at 2:33 pm

If so then the legitimate question is: how much time does money/credit have left and what are the investment consequences between now and then? Well, first I will admit that my supernova metaphor is more instructive than literal. The end of the global monetary system is not nigh. But the entropic characterization is most illustrative

Bill Gross

http://www.pimco.com/EN/Insights/Pages/Credit-Supernova.aspx

People, you better pay attention to the bearded one rather than argue with the oralce….

Or your gonna get stung…

#203 Name on 02.01.13 at 2:38 pm

#3 not 1st on 01.31.13 at 9:44 pm:

maybe never $0, but $300 could be
http://www.businessinsider.com/houses-for-1-dollar-2010-12?op=1

#204 Niro Nero on 02.01.13 at 2:46 pm

‘I know you’re special, but since when are Italians a race? — Garth’

I agree with your statement. No debating, in particular the ‘special’ part. However, where did I ever mention the Italian ‘race’? Skin color and ethnic background a race they make not. Please leave the racism out of your journalistic endeavors…you pasty white assed Canadian farm boy…

D’oh! Did I just ‘think’ that one last line out loud? Sorry!

My ass is nicely bronzed. — Garth

#205 Babblemaster on 02.01.13 at 2:53 pm

Surely, inflation can’t be as bad as most everyone says. According to Statistics Canada, in 2012, the annual average increase in consumer prices was 1.5%.

Strange. We all know the government doesn’t lie, but my personal experience tells me that it was much higher. Car and House insurance alone went up more than 8%. My rent went up beyond the guidelines by 3.4%. My Bell bill in Jan., for three services, went up more than 5%. Etc. What’s going on?

#206 Holy Crap Wheres the Tylenol on 02.01.13 at 3:02 pm

This lusty young couple are part of the sheeple generation. Better watch out for the dogs!

Harmlessly passing your time in the grassland away
Only dimly aware of a certain unease in the air
You better watch out
There may be dogs about
I’ve looked over Jordan and I have seen
Things are not what they seem.

What do you get for pretending the danger’s not real
Meek and obedient you follow the leader
Down well trodden corridors into the valley of steel
What a surprise!
A look of terminal shock in your eyes
Now things are really what they seem
No, this is no bad dream.

The Lord is my shepherd, I shall not want
He makes me down to lie
Through pastures green he leadeth me the silent waters by
With bright knives he releaseth my soul
He maketh me to hang on hooks in high places
He converteth me to lamb cutlets
For lo,m he hath great power and great hunger
When cometh the day we lowly ones
Through quiet reflection and great dedication
Master the art of karate
Lo, we shall rise up
And then we’ll make the bugger’s eyes water.

Bleeding and babbling we fell on his neck with a scream
Wave upon wave of demented avengers
March cheerfully out of obscurity into the dream.

Have you heard the news?
The dogs are dead!
You better stay home
And do as you’re told
Get out of the road if you want to grow old.

I am getting cynical!
Credit to Pink Floyd for the lyrics!

#207 dontcallmeshirley on 02.01.13 at 3:08 pm

#121 S,

“Picking a winner for the future a little more tricky. If 10% return was a cake-walk half the people I know wouldn’t bother getting out of bed in the morning.”

————

The 9.25% Garth quotes is mostly unrealized capital gain. You can’t live on non-cash gains.

Half of those people you still have to get out of bed.

It would be interesting to segment that 9.25% into cash and non-cash components. Cash was probably 3.5%???

Your dumbest comment ever. Congratulations. — Garth

#208 hangfire on 02.01.13 at 3:09 pm

Just a quick point on auto’s as assets…..if you talk to any dealership/salesman on a lot selling new cars they will tell you that 97% of all transactions are leased….nobody buys anymore….low rates have allowed the BMW’s of the world to jack up ‘values’ in exactly the same way as real estate has been artifically inflated on the back of the cheap monthly pmt calculation….a rise in rates would also kill the auto market….no more cheapo pmts…thats why.

Open up a brokerage acct…..not a bank acct silly….a real account…for sophisticated investors….they do not accept auto ownership as a net asset…..thats where real money lives…..that has to tell you something about auto iron as an asset class.

#209 Oceanside on 02.01.13 at 3:10 pm

As for houses and condos in Oceanside there aren’t that many for sale. Less than last year so far and prices are quite reasonable. And somehow they sell albeit slowly.
——————————————————————–
In all of Oceanside, Nanoose, Parksville, Errington, Qualicum etc..There are 870 active residential listings as of today.

#210 EIT on 02.01.13 at 3:13 pm

Government takes away the freedom of letting people choose how to buy and sell goods using legal tender laws.

Personal freedom is inversely proportional to government power/control. If you don’t agree, your definitions are off.

Typical gold nut. Conspiratorial, anti-establishment, suspicious, whiff of anarchy. It has nothing to do with investing. — Garth

——————————————————-

Let’s break this down, lol

Typical gold nut – haven’t been on this for long, but looks like i’ve just graduated

Conspiracy – common taboo word. is called corruption when exposed.

Anti-establishment – one morning, my mom woke up and walked out her front door only to find a tank sitting there. Her reaction was “What is th…? O! Son of a Gun”. Yup, it was martial law. That story just sticks with you. Besides, being anti-establishment is all the rage for my generation, I only justify it more… eloquently.

Suspicious – Yes, i’m a skeptic, its how I don’t kill people with my work. Bleeds over from work. (no pun)

Whiff of anarchy – Anarchy is a theoretical concept, that can’t exist, unless heaven on earth has come (i guess, maybe, ironic though lol).

has nothing to do with investing – whatever.

Don’t worry Garth, i’m still young, i’m sure i’ll turn around eventually….

#211 hangfire on 02.01.13 at 3:18 pm

RE #185….Garth..I’m surprised at you….everything that a liberal disagrees with in Canada can be responded to as knee jerk racism…you know that…..you didn’t read enough of the politically correct TO Star this am….or get your mantra from the CBC. Didn’t you get to that anti Cowboy and Indian masquerade night club downtown rally the other night…….apparently not…or you would know that everything that isn’t politically correct is racist in Canada.

Don’t you dare start telling the truth dude…..I’ll be upset…..and maybe start calling you a racist too….why not..it works for the overwrought liberals.

#212 kreditanstalt on 02.01.13 at 3:18 pm

You do keep poking us gold bugs. But we forgive you because you won’t admit that gold is the only real money. Every other currency transaction is nothing more than the exchange of debt: only gold settles a debt for good.

A little more patience…until the masses realise that the inflation they see showing up in prices has a monetary cause.

The few people who “bought” gold near the highs will have to wait a little longer than expected to reap the benefits. That’s all.

#213 DodgedBullet on 02.01.13 at 3:21 pm

The blog dogs are turning!

I like it when you talk real estate, Garth.

I made 20ish% on some investments last year… pure luck re. the timing.

That was thanks to you.

Not sure what to do with the capital now (pulled it out recently).

#214 Smoking Man on 02.01.13 at 3:28 pm

What a hungover….. Good morning everyone

#215 coastal on 02.01.13 at 3:32 pm

Victoria prices and sales tanking, the beginning of the end.

#216 martin9999 on 02.01.13 at 3:42 pm

Yes, real estate always goes up. You Italian? — Garth

——–
good one, made my day after loosing some money

#217 Dr. Hoof-Hearted on 02.01.13 at 3:53 pm

Obamacare :

IRS: CHEAPEST OBAMACARE PLAN WILL BE $20,000 PER FAMILY

http://www.republicbroadcasting.org/index.php?cmd=news.article&articleID=4785

QUOTE

In a final regulation issued Wednesday, the Internal Revenue Service (IRS) assumed that under Obamacare the cheapest health insurance plan available in 2016 for a family will cost $20,000 for the year.

Under Obamacare, Americans will be required to buy health insurance or pay a penalty to the IRS.

The IRS’s assumption that the cheapest plan for a family will cost $20,000 per year is found in examples the IRS gives to help people understand how to calculate the penalty they will need to pay the government if they do not buy a mandated health plan.

QUOTE:

For those wondering how clear the IRS’s clarifications of this new “penalty” rule are, here is one of the actual examples the IRS gives:

“Example 3. Family without minimum essential coverage.

“(i) In 2016, Taxpayers H and J are married and file a joint return. H and J have three children: K, age 21, L, age 15, and M, age 10. No member of the family has minimum essential coverage for any month in 2016. H and J’s household income is $120,000. H and J’s applicable filing threshold is $24,000. The annual national average bronze plan premium for a family of 5 (2 adults, 3 children) is $20,000.

“(ii) For each month in 2016, under paragraphs (b)(2)(ii) and (b)(2)(iii) of this section, the applicable dollar amount is $2,780 (($695 x 3 adults) + (($695/2) x 2 children)). Under paragraph (b)(2)(i) of this section, the flat dollar amount is $2,085 (the lesser of $2,780 and $2,085 ($695 x 3)). Under paragraph (b)(3) of this section, the excess income amount is $2,400 (($120,000 – $24,000) x 0.025). Therefore, under paragraph (b)(1) of this section, the monthly penalty amount is $200 (the greater of $173.75 ($2,085/12) or $200 ($2,400/12)).

“(iii) The sum of the monthly penalty amounts is $2,400 ($200 x 12). The sum of the monthly national average bronze plan premiums is $20,000 ($20,000/12 x 12). Therefore, under paragraph (a) of this section, the shared responsibility payment imposed on H and J for 2016 is $2,400 (the lesser of $2,400 or $20,000).”

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

For those that follow this, Obamacare is simply another $$$$ shakedown of taxpayers, with the IRS acting as the muscle.

In essence….an average family must submit an EXTRA $20,000 in what is essentially another tax.

Or more to the point,….more people going to jail and/ or asset forfeiture.

#218 :):( Ying Yang on 02.01.13 at 4:06 pm

#215 Smoking Man on 02.01.13 at 3:28 pm
What a hungover….. Good morning everyone

Yes it is oh smoker of thy Devine Herbs.
Apparently it is morning right now in Sydney, that must have been one hell of a night drinking. Next invite all of us :)

#219 Dona Collins on 02.01.13 at 4:11 pm

Despite the housing crash, I can’t help but wonder why real estate developers think it’s a good idea to continue building high-end condos and townhouses. Some of them cost more than the average house. One developer I’m familiar with built a very large community for 50+ and it was less than 30% sold by the time people could start moving in. Driving by, it’s still pretty empty. What a waste of money.

#220 Inglorious Investor on 02.01.13 at 4:23 pm

We are going to have to revise the definition of insanity to something like: Doing the same thing over and over, but on a bigger and bigger scale.

David Kemper, the CEO of Commerce Bancshares, and Past President of the Federal Advisory Council of the Federal Reserve just penned this op ed piece that one could easily mistake as the scribblings of a long-time resident of Bedlam.

Mr. Kemper wants the Fed to increase its balance sheet from the ludicrous $3 trillion that it is today to, wait for it… $30 trillion!

Some snippets from his monetarily maniacal missive:

Kemper: The Fed, […] will be turning over $90 billion in 2012 profits to the U.S. Treasury, a much-needed contribution that will put a sizable dent in our nation’s current $1 trillion federal deficit.

Even if you agree $90 billion is “sizable”, it’s a pittance compared to the actual debt and promises.

———

Kemper: The [Fed] earned more than twice Apple’s after-tax earnings last year,[…]

He’s actually comparing the central bank of the United States to Apple in order to make his case. Talk about comparing apples to orangutans.

———-

Kemper: Now, some people might question the Fed’s exceptional results and point out that it has an unfair advantage in that it has a monopoly on manufacturing the U.S. dollar.

Gee, I wonder how profitable I could be if I was allowed to print my own money.

————

Kemper: […] we as a society seem to have no stomach for trying to reduce our soaring deficit and our accelerating entitlement programs.

Right, if you can’t swim, why just frolic near the shore when you can easily drown yourself further out?

———-

Kemper: Why not expand the Fed balance sheet exponentially, from its current $3 trillion to $33 trillion? […] thus wiping out most of our federal deficit while avoiding actually having to do anything about current government spending.

I will never pay for lunch again. According to Kemper, I don’t have to.

———-

Kemper: I am the first to admit that the Fed will have to buy all $15 trillion or so of our current U.S. debt, as well as most of our agency and some corporate debt, in order to reach an additional $30 trillion.

Why stop there? Why not buy EVERYONE’s national debt and just fix the whole world in one fell swoop?

———-
Kemper: This is […] consistent with current monetary policy.

Yeah, like driving at 60 kph is consistent with driving at 260 kph, as long as you are heading in the same direction.

————–

Kemper: Would you, the American taxpayer, rather owe money to your benevolent rich uncle (the Fed) who is trying to get you a job, or to your no-good brother-in-law (you know who) who is out to steal your business and all your intellectual property?

Yeah, would you rather owe your in-law $100 or your uncle a grand? Does he believe the American people are really that stupid?

Mr. American, are your countrymen really that stupid? Also, did he just call America’s foreign creditors “no-good brothers-in-law.”

————–

Kemper: Would $30 trillion in extra buying power be inflationary when our entire current GDP is only about $15 trillion? Maybe, maybe not—but we need a game-changer here.

Kind of like changing from Monopoly to Ouija?

————

Should we maybe consider that Kemper likes his proposal because he’s CEO of a bank? You know, the guys the Fed works for and who they gave trillions of dollars to save their asses?

Sorry, but when so-called ‘respectable’ people like bank presidents talk like this, you know it’s game over. All that is left now is the realization of same.

The entire op-ed piece was some kind joke, right? Is it April 1 already?

Do not copy-and-paste like this again. Use a link, and source it. — Garth

#221 Bloggers Daughter on 02.01.13 at 4:24 pm

# 172

First off, no I’m not in Barrie. Where we chose to move is closer to family and happier about the move. Second, I obviously didn’t make myself clear when I said that I wanted a home instead of a house. When I mentioned this it was because we were contemplating renting until the market came down a bit before buying something, but with renting I don’t feel that it becomes your “home” as you don’t put in those personal touches such as painting or landscaping, or getting to know your neighbors because you figure that you’re just moving in a year or two so why bother to get to know them. I never in any way meant that I need a large house in order to call it a home. Again, only reason we ended up in a house this size was because it really was the best price/sqft.

When I put this up on the blog it was out of anger towards the government and the situation that they have put so many Canadian families in. I understand that taxes are higher in smaller areas because there isn’t a bunch of companies there footing the bill for new roads, sewers, etc. And I understand that prices for things go up. What bothers me and upsets me about the the assessment notice is what it will do to so many families. The goverment dropped interest rates so low to entice people to go out and spend money on big ticket items such as houses and cars and they did. And in doing so it has put people into a lot of debt. And now they’ve just gone and are having everyone reassessed because house prices have gone up so dramatically, and its not likely that once they come back down that they’re going to do another reassessment of the situation.

If I have offended you in any way with my comments, then I apologize. I used us as an example because that’s what I had. Again, I’m upset for families. I’m upset in the way that this government/media/RE has encouraged people to go out and spend so much and has left so many families on the edge financially. I have friends, and friends with children that have recently bought, have condos to sell, put offers in with no conditions, etc. and all this motivated from RE, banks, media, all saying that this is just the cost of living, and that this is what is costs if you want to own a home. You can probably guess that with what I’m saying, myself and a lot of friends are in our late 20′s/early 30′s, and I’m not afraid to say it ~ inexperienced. And you can call people idiots or whatever other name in the book that you so choose to call them, but many people just don’t know, especially if they haven’t seen ups/downs in the market. Please don’t get me wrong, I don’t think that we have done things perfectly. If I were to look back on the last 5 yrs of being a home owner would we have done things differently… probably.

#222 Van guy on 02.01.13 at 4:26 pm

Garth,

I don’t think Van west will see the 30% decline this spring as you predicted. I have access to sales data and those killer deals 3 months ago are pretty much gone.

Average price in Van is back up again so the hpi is actually a more stable measurement. Sales are very slow but sellers are being hard asses. I guess it’s just another waiting game.

You think the Frankenumber actually means something? That’s so cute. — Garth

#223 Inglorious Investor on 02.01.13 at 4:28 pm

Do not copy-and-paste like this again. Use a link, and source it. — Garth

It’s actually only snippets of the article. How could I comment on specific sections with a link? But I understand. Thanks for posting it. If this is genuine people need to know.

#224 Inglorious Investor on 02.01.13 at 4:35 pm

#94 Old Man on 02.01.13 at 12:40 am

Thanks, Old Man.

To be honest, I’m not much for dogs, but I find they usually really like me. Kids too. I’m not sure what that says about me. Not sure I want to know either.

#225 Bottoms_Up on 02.01.13 at 4:43 pm

#153 The Man From Nantucket on 02.01.13 at 9:42 am
——————————————–
In some cases the available houses for rent aren’t the nicest crop in the field (I’ve seen great locations but mouldy basements, 50 yr old windows etc.). Sure, renting is ‘cheaper’ than owning, but it’s all relative, and the extra costs of owning might just make sense in certain areas, specific cases, and especially if you get a decent place in which to live.

#226 Bottoms_Up on 02.01.13 at 4:46 pm

#218 Dr. Hoof-Hearted on 02.01.13 at 3:53 pm
———————————————–
Nice spin.

Obamacare ensures that individuals that CAN’T get access to insurance HAVE that access, and that insurance companies can’t discriminate based on ‘pre-existing’ conditions. Americans not losing their houses because of a big medical bill seems like a decent proposition don’t you think?

#227 Spiltbongwater on 02.01.13 at 4:50 pm

My ass is nicely bronzed. — Garth

How about the tan lines?

#228 Old Man on 02.01.13 at 5:07 pm

Smoking Man – was sorry to hear about your wife, and here is hoping that all will become a positive outcome, so stay strong.

#229 Old Man on 02.01.13 at 5:12 pm

#225 Inglorious Investor – you have just said it all, and time for you to look for a puppy, and go to a shelter for a rescue, as when all is said and done, it might change your life forever. A dog becomes a faithful family member and much to learn, as you will never regret the experience – think about it.

#230 sciencemonkey on 02.01.13 at 5:27 pm

@222 Bloggers Daughter:
I saw a program once about engineering disasters, like bridges or nuclear plant cooling towers collapsing. It made the point that a disaster occurs only when multiple things go wrong, like poor quality concrete, unprecedented winds, etc.

I see the current predicament being caused by a combination of immoral and stupid actions. The gov is immoral for screwing around with interest rates and amortizations. They knew people are stupid/short-sighted and would take the bait. Please don’t whine about how you aren’t responsible for your predicament. (PS: 2800 sq ft is a lot of house to clean, damn!)

End result? Immoral gov has allowed the imprudent to price the prudent out of the market.

Garth, I’ve seen your comment that a house is not a right. I would tend to agree. However, we do have a right to reasonably priced houses. I am very cynical in seeing the gov act completely against my interests in this regard.

Speaking of obamacare, if one gets insurance from their employer, will there still be copays?

#231 The Prophet Elijah on 02.01.13 at 5:37 pm

#193 EIT on 02.01.13 at 1:23 pm Government takes away the freedom of letting people choose how to buy and sell goods using legal tender laws.

Personal freedom is inversely proportional to government power/control. If you don’t agree, your definitions are off.

Typical gold nut. Conspiratorial, anti-establishment, suspicious, whiff of anarchy. It has nothing to do with investing. — Garth
———————————————————-
I think it does (investing) when you look around and see epic global debt. And it’s you Garth that keeps beating home income vs debt when it comes to inflated RE. I think BraveGarth has great potential to be a metal head, no?

#232 Van guy on 02.01.13 at 5:37 pm

You think the Frankenumber actually means something? That’s so cute. — Garth

I have watched the average price And it’s not as accurate as the hpi. Hpi is down 6% since June and avg price is now up. We all know what’s up here. But going through all these sales, I don’t think others fear what we fear or they’d be getting a better price in this market. Last year we all thought was the year, but will it be this year in 2013? As bearish as I am, we need to convert bulls to bears to see this market really turn on a dime.

#233 45north on 02.01.13 at 5:37 pm

bloggers daughter: We did, what Garth would probably have advised against but bought another home. We ended up with a 4 bdrm plus den, 2800 sq ft.

since you talk tough, I’ll talk tough

Devil’s Paralegal: Where’s the new house – Barrie?

it’s somewhere like Barrie which means that you are 100% dependent on car transportation. There are no buses, no trolley cars and no subway lines. You’re in a brand new subdivision which means there are no older people around who own their houses outright so a 10% decline in prices will put a lot of your neighbours underwater. By the time you figure that the complexion of your neighbourhood has changed you can sell only if you agree to lose your equity.

and that’s tough

#234 Beach Girl on 02.01.13 at 5:48 pm

I made 18,000 this month doing nothing. Don’t care, only care for my Polar Bears. Thank you Garth for letting me into this elitist site. There are 1% out there, ya, I am one. The rest was a bunch of Hillbilly bikers who walked to there own death. The Banditos, I call them the Vanditos. Loserville. All from the Kitchener area. Do you have to be retarded to live in that vacinity. Let SAMSUNG rape you. Who the hell goes to that area of Ontario. I am shocked and stunned that people even live there.

#235 dontcallmeshirley on 02.01.13 at 6:05 pm

Your dumbest comment ever. Congratulations. — Garth

If you say so.

The 9.25% return you quoted is meaningless without knowing how much of it was pocketed as cash.

People can’t pay their rent with either unrealized capital gains or gold right?

#236 fish on 02.01.13 at 6:05 pm

There is so much debt in USA and Canada and interest rates so low for so long that there is no longer an exit strategy. As soon as interest rates begin to increase…

Central banks are around the world have been printing like crazy for years, buying liar loans, trying to reduce unemployment, and most recently with Japan trying to export more.

Prices will continue to increase. More printing will lead to faster price increases. If you think the stock market will save you, name one high inflation economy event in the last 100 years where the stock market beat price inflation.

Zimbabwe has the best performing stock market this past decade, but purchasing power was crushed for those who had their money in it. hah

#237 Babblemaster on 02.01.13 at 6:13 pm

#74 Elmer

“The people making 6 figures on Bay street or in cushy government jobs are still employed.”

———————————————————–

Actually, some people in the Ontario government have been fired. I was one of them back in May 2012. I took early retirement with a decent pension and severance package. I relaxed for awhile and then got myself a contract consulting job in IT in the “private sector.” I’m happy because I’m collecting a nice pension and also earning more money than I did before. Did the government save money? You may find this interesting. To do the work I was doing, they’ve hired a contracting consultant. Brilliant! His per diem cost is nearly twice what mine was. My experience and this story are not unique. Regardless, McGuinty, can make the triumphant claim that he has reduced civil service wages. That’s after he’s wasted more than 200 million on the cancelled gas plants. Politicians are such #$%@. Too bad the public doesn’t see through them.

#238 Old Man on 02.01.13 at 6:27 pm

#235 Beach Girl – know KW well, and am shocked by it all as thought only the German folk lived there with the Amish and the Mennonites who are good people. Now will shock you, as the bad guys all retire in Guelph, as know a few things.

#239 HAWK on 02.01.13 at 6:30 pm

Number 136 – Devcore

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

Agreed, but that’s a small part of the Paper Gold market, anyway they can alway buy a call or put option.

#240 zeeman1 on 02.01.13 at 6:31 pm

So… As I make it out after today’s posts…

Beachgirl’s a hooker who just got saved by Clayton Ruby?

On some nice meds, are we Beachgirl?

#241 marco on 02.01.13 at 6:32 pm

yes Italians are a race- the best race. The race that built this country;s construction industry and gave it some type of cuisine. Like my jewish lawyer always said “Canadians didn’t know what food was until the Italians came.” And the same goes for construction.
remember the Romans are the only successful race to conquer and over take Britain . Sorry I forgot William the Conquerer.

#242 Westernman on 02.01.13 at 6:48 pm

Beach Girl @ # 132,
I hear Wal-Mart is having a two-for-one sale on 55 gallon barrels of Botox…
When you get done you’ll look like Jerry Jones in drag…

#243 NoName on 02.01.13 at 6:54 pm

It’s not a gold where money is. it is driver-less car…

“Because people consistently underestimate the implications of a change in technology—are you listening, Kodak, Blockbuster, Borders, Sears, etc.?”

http://goo.gl/0q0op

#244 MarcFromOttawa on 02.01.13 at 7:00 pm

John Exter’s inverse pyramid:

http://paperempire.net/exters-pyramid/

#245 Smoking Man on 02.01.13 at 7:03 pm

Old Man Wife is fine,

I made it all up, I do that when I get looped. Should hear some of the stories I was telling people at the bar……. Especially the Ladies:)

#246 Nostradamus Le Mad Vlad on 02.01.13 at 7:03 pm

#152 EIT — “Is this helping to clarify things for anyone?” — It certainly does, as it removes some of the burdens of being a conspiracy theorist. so thanks!

#215 Smoking Man o– “What a hungover….. Good morning everyone” — And good morning to you, SMan ‘tho I see your post came in at 3:28 pm. Must have been a smashing night!

#218 Dr. Hoof-Hearted — “For those that follow this, Obamacare is simply another $$$$ shakedown of taxpayers, with the IRS acting as the muscle.”

Yep. Another tax or put ‘em in the slammer. Maybe if Vancouver Island is turned into a giant holding cell, the prisoners can live there!

#238 Babblemaster — “Politicians are such #$%@. Too bad the public doesn’t see through them.” — It’s good to hear from someone who worked with and for them. and you’re correct — they are an overpaid bunch of moneygrabbing jackasses.
*
A nice selection of eclectic posts today!

#247 Quebec is Great on 02.01.13 at 7:09 pm

#238 BabbleMaster ….

Good Post, but I disagree with one point – most of the public CAN see through them, however, there are no better options to choose from.

#248 Dr. Hoof Hearted on 02.01.13 at 7:44 pm

#227 Bottoms_Up on 02.01.13 at 4:46 pm

#218 Dr. Hoof-Hearted on 02.01.13 at 3:53 pm
———————————————–
Nice spin.

Obamacare ensures that individuals that CAN’T get access to insurance HAVE that access, and that insurance companies can’t discriminate based on ‘pre-existing’ conditions. Americans not losing their houses because of a big medical bill seems like a decent proposition don’t you think?

====================================
Dear Buttocks _up

Please refer to post # 194 above and click on link

Do you seriously buy your spiel?

Why is the IRS involved ? Hint hint.

No pay or no can pay…? Bye Bye house etc . and welcome to the poor house. Rename it “f l U.S.h” Its called communism

================================
Bonus Spin

LIGHTS OUT – FRANCE TO FORCE SHOPS AND OFFICES TO GO DARK OVERNIGHT

http://www.republicbroadcasting.org/index.php?cmd=news.article&articleID=4783

Shops and offices throughout France will be forced to turn off their lights overnight in a bid to fight light pollution, the country’s environment ministry has announced.

Under the new law, which comes into effect on 1 July, lights in shop window displays will be turned off at 1am. Interior lights in offices and other non-residential buildings will have to be switched off an hour after the last employee leaves. Local councils will be able to make exceptions for Christmas and other special occasions, and in certain tourist or cultural areas.

The move, announced on Wednesday, is expected to save 250,000 tonnes of CO2 – enough energy to power 750,000 French households for a year.

The French ecology minister, Delphine Batho, said she hoped the law would change attitudes in France and help the country become a pioneer in reducing light pollution.

==========

Leftie Wing Nuts…..watch the crime rate soar

#249 Grim Reaper/Crypt Speculator on 02.01.13 at 7:48 pm

My ass is nicely bronzed. — Garth

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

And for the rest of you….

Remember ALL your asses are eventually mine !

#250 Nonno Nicola on 02.01.13 at 8:02 pm

Nonno Nicola is bak a for anoter lesson, ima 72 yers old and work in da construct, the yunga kids today are a lazy no wanna work just talk on the cella phone.

if realestate go down then you cana blame the yunga kids, they needa to work and paya da mortgage.

gartha i need to giva you some consigliere, to many pepole coming here who taka to mucha farmaci, now we hava dis lady beache a girl, she no talka like lady but ….. making da webasite looka bad. somating hasa to be done, plez

#251 Derek R on 02.01.13 at 8:07 pm

#242 marco on 02.01.13 at 6:32 pm wrote
remember the Romans are the only successful race to conquer and over take Britain . Sorry I forgot William the Conquerer.

You also forgot the Angles, the Saxons, the Vikings and the Gaels.

#252 Nostradamus Le Mad Vlad on 02.01.13 at 8:29 pm

-
Iran whoopsie Oh dear, this will not reflect well; 8.5 mln. Americans left work force during Obama’s first term; Who Is In Charge? They are sure doing a lousy job; FBook Sharp drop in profits; Obomba’s Climate Plan and the economy; Iceland Not only have they jailed banxters. they also booted the FBI out; 6:01 clip “A Bernanke critic from within the Fed speaks.”; 68,300% Wonga vs. Easy Finance Club; 9:23 clip Gold manipulation, Yuan and other; Two min. clip EZone mess a prelude for what’s coming; Invented Excuse to steal Africa’s riches; <a href="Invented Excuse to steal Africa’s riches;
“>Barclays and Qatar under investigation; Gas Spike Again; Gold Run? Permanent Temp. Workforce is rising; Going Dutch Holland’s fourth-largest bank nationalized.
*
3:06 clip Wyoming and Arizona ignoring gun laws; Big Pharma Suicides and homicides, and US Military “A veteran called into my talk radio show not long ago and confirmed that because our soldiers are having difficulty adjusting to the reality that they are fighting wars of conquest, not of defense, that US Army doctors were handing out SSRI anti-depressants “like they were M&Ms”. SSRIs have a well-documented history of causing extreme acts of violence, including suicides.” wrh.com; 7:03 clip Sandy Hook stuff, and “Information surfaces that Sandy Hook witness Gene Rosen is FEMA!” wrh.com; 9:48 clip See headline for further explanation; Java Quite screwed, and Apple Rotten core; Johnson & Johnson Toxic hip implants; Obomba’s Drones and the children killed by them (compared to Sandy Hook).

#253 Ballingsford on 02.01.13 at 8:31 pm

#64 Suede said: Talk about inflation:

Ikea hot dogs went from 50 cents to 75 cents!!

Holy hyperstagflation batman…. Stay tuned, same bat channel, same bat time

——————————————————————

#113 Kilby said: Costco’s are still $1.50 with drink way better way to get your RDA of fat and cholesterol. A lot of people go to both for cheap lunch….

*******
IKEA has the better hot dog, it’s made from Pork whereas Costco has the beef one. Pork weenies always taste better!

That’s not the point though I guess! Food inflation is rampant! Now the gourmet meal at IKEA for 2 dogs and a drink is going to probably cost me $2.25.

I’m taking that increase out of the tip!

#254 HAWK on 02.01.13 at 8:32 pm

@161 – I can only see America moving forward.

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

Me too………..moving forward to bankruptcy LOL.

(Not that we’re any better North of the Border)

#255 HAWK on 02.01.13 at 8:37 pm

#177 The American on 02.01.13 at 11:55 am

Wow, so roughly 75,000 unsold units in Toronto alone, a city that is 1/5 the size of Manhattan

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

Manhattan’s population is upwards of 12.5 million, really? Gee it’s getting kinda crowded there eh?

#256 ann on 02.01.13 at 8:42 pm

Garth the italian remark was unfair…imagine the word
black,chinese,indian,etc instead of Italian….
heads would roll..

How is it unfair saying Italians like real estate? They practically run the Canadian house-building business. Get a life. I have not hear you comment on the people speaking of ‘HAM’ on this blog.– Garth

#257 45north on 02.01.13 at 8:46 pm

blogger’s daughter said that they moved to be closer to family

thanks for the info, that makes quite a difference

[email protected]

#258 Purple on 02.01.13 at 8:46 pm

Reporters are lazy! They seem to always to the same sources so they can do their jobs. These “reports” are pathetic.

http://www.huffingtonpost.ca/2013/01/31/bc-real-estate-rebound_n_2590994.html

http://bc.ctvnews.ca/b-c-s-stagnant-real-estate-market-to-see-boost-in-2013-1.1136587

http://www.vancouversun.com/business/real-estate/Real+Estate+Association+takes+optimistic+view+home/7895145/story.html

#259 a prairie dawg on 02.01.13 at 8:50 pm

I also made a 10% gain from Jan/12 to Jan/13 in a defined contribution pension plan, and I don’t even deal with Garth yet. (I’m not quite retired)

More exposure to equities is where most of that gain came from. It also helps when the fixed income component made some money too.

Stop listening to the nice lady at the bank and the mutual fund salespeople. They’re more worried about a residual commission than your well being.

#260 eddy on 02.01.13 at 9:06 pm

Of course inflation is built into the system, making the scam know as Market Value Assessment a tax on inflation. The inflation calculators on the internet
http://www.westegg.com/inflation/
are a joke.

Here’s one real life example-
I found an old rock concert ticket stub
(Grand Funk Railroad, Maple Leaf Gardens, Oct 9, no year indicated but it was 1971, color red)
price $ 6.60 , today that might be around $100..
so it’s up about X15 but that’s very low compared to real estate comparisons from 1971

#261 Grim Reaper/Crypt Speculator on 02.01.13 at 9:15 pm

#242 marco on 02.01.13 at 6:32 pm wrote
remember the Romans are the only successful race to conquer and over take Britain . Sorry I forgot William the Conquerer.

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

Don’t forget the French !!!

http://www.youtube.com/watch?v=A8yjNbcKkNY

#262 Derek R on 02.01.13 at 9:25 pm

#249 Dr. Hoof Hearted on 02.01.13 at 7:44 pm wrote:
Shops and offices throughout France will be forced to turn off their lights overnight in a bid to fight light pollution, the country’s environment ministry has announced.
==========
Leftie Wing Nuts…..watch the crime rate soar

Nope, watch it drop through the floor. The UK Conservative government did this when it was fighting the miners during the early 1970s. Result was that night time street crime all but disappeared. Criminals are scared of the dark. Who would have thought it?

So this is a great way of cutting crime and government spending in one fell swoop.

#263 HAWK on 02.01.13 at 9:30 pm

#238 Babblemaster on 02.01.13 at 6:13 pm

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

The bloated and overpaid public sector, isn’t so because of a few IT consultants but because of lots of cops, firemen, and host of other people that make paychecks way out of proportion to what any free market would bear for their services and skill sets.

#264 Eaglebay - Parksville on 02.01.13 at 9:46 pm

#210 Oceanside on 02.01.13 at 3:10 pm
“In all of Oceanside, Nanoose, Parksville, Errington, Qualicum etc..There are 870 active residential listings as of today.”

Not bad for a population of over 40,000.
What’s keeping you in Oceanside anyway?
You’ll fit right in on the Mainland. Watch your heart now.

#265 InvestX on 02.01.13 at 9:48 pm

Gee, I wonder if precious metals can be converted to cash (like with ETF’s, preferreds, stocks, etc.)

Of course, which proves what I said. It isn’t money. — Garth”

So what’s the difference? Can you pay rent with a preferred share?

Of course not. Neither one are money. And this is too stupid to continue. — Garth

#266 Eaglebay - Parksville on 02.01.13 at 10:02 pm

#254 Ballingsford on 02.01.13 at 8:31 pm

Pork is dirty and fat.
Beef anytime and the dogs at Costco are bigger.

#267 Eaglebay - Parksville on 02.01.13 at 10:08 pm

#261 Grim Reaper/Crypt Speculator on 02.01.13 at 9:15 pm
#242 marco on 02.01.13 at 6:32 pm wrote
remember the Romans are the only successful race to conquer and over take Britain . Sorry I forgot William the Conquerer.

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

Don’t forget the French !!!
__________________________

Where do you think the Vikings, aka Normans, came from?

#268 Claire on 02.01.13 at 11:11 pm

Garth, I’ve been reading your blog for years, and I admire your critique and wisdom I really do. But I am terribly sorry that you’ve been wrong on one key critical area to an imminent housing collapse in Canada. It’s called interest rates. The American economy is not improving and neither is the demand for Canadian goods and services, nor has the manufacturing sector seen major swings. Our economy is in the same climate as that of Japan for the last two decades that has not seen an interest rate increase. Moreover when you say that the vast majority of Canadian households will be in negative equity positions on their balance sheets within months, you are proclaiming that everyone that owns a home in Canada is willing to sell in a downward market should their mortgages be in default. I want to know where it is that you find this data on negative equity positions on balance sheets for average Canadian homeowners. Because in order to make a statistically significant statement on Mortgage debt on the brink of financial ruin, you must have hard concrete data to re-affirm the supposition in order for that to be a both valid and true statement.

You may admire the blog but you falter in reading it. I’ve presented much evidence of a US rebound – slow, but definitely augmenting – while we stumble in the opposite direction. If rates are slow to rise here, it will not be a good outcome. As for me saying, “the vast majority of Canadian households will be in negative equity positions on their balance sheets within months,” you just made that up. — Garth

#269 Beach Girl on 02.02.13 at 2:47 am

OK. I am leaving. I am not respected on this site.

It’s the other way around. May I get the door for you? — Garth

#270 The American on 02.02.13 at 10:11 am

At#256: Hawk, New York City’s metro population is 18,900,000 people, and the CSA is over 22,000,000. Yes, it is crowded, and still “The World’s City” by far.

#271 Beach Girl on 02.02.13 at 10:51 am

I am going to buy some lawn ornaments that are short and name all 7 of them Garth. And, of course I would expect you to get the door, for me. And you actually know me. And this won’t get through. Beach Wonderful Girl.

Statues in my honour. How thoughtful. — Garth

#272 ann on 02.02.13 at 2:36 pm

Garth,I’m new to this blog…What is ham?and I do have a life out in Willowdale. Home of the original
McMansions.

#273 jess on 02.03.13 at 3:31 pm

dr. hoofy
comment on the leftie wing nuts of France and light saving idea …well what about the uk righty tighties

should gilts be renamed guilts

Charity tax avoiders: Scam bosses could trouser £7.7MILLION while good causes receive just £135,000
Despite giving just 8p to unnamed good causes out of every £100 raised, the Cup Trust has asked HM Revenue and Customs for £46million in Gift Aid

lest us not forget the all the all those institutions that accepted bonus scandals,rate rigging, mis-selling, money laundering, are those left wing or right wing or perhaps they feed on both.

#274 James Perly on 02.04.13 at 8:34 pm

Best Buy closed because they can’t compete with the likes of Amazon. People just walk into Best Buy to do some window shopping, pick out the stuff they like, and buy online.

Flat screens? — Garth

Yes Garth, flat screens too, even more so, how do you get those things home? I ordered a 55inch from Dell and it was delivered within a week and at an amazing price. Has worked well for over a year now.