I, Candi

bush

Unwisely, Catherine reads this blog. Her realtor friend, Candi, does not. Days ago Cathy sent Candi a link to my post about Van real estate’s current dismal condition, and the woman I counseled to sell, take her million, invest it and lease back her old home.

“Thought you would enjoy this,” Cathy says, in sending me Candi’s response. “I work with this lady – she is very nice, but not sure where she is getting her info from.”

Indeed. I thought it worthwhile to share this with you, as it is so typical of the ‘logic’ many realtors use in convincing people they should plunge themselves into debt and obligation to buy a home. The argument the realtor proffers is a financial one, simply that it makes better investment logic to snap a Toronto house for $500,000 than it would to invest a similar amount.

Cathy asked me for a few comments. First, the letter.

Thank you for sharing the blog with me, Yes it appears that lady who sold her home for over a million and re-rented back the same home was smart, however depends on where she was living in Vancouver. My parents have only doubled their money in short time with no interest payments as they paid cash for their home.

Based on our discussion earlier, I decided to calculate what a home of 500k purchase price would be after 25 paid out. Purchase price 500k. Down: 100k Interest rate 3.5%. Amortization: 25 years. Monthly payments: $2,496. Property Tax: $156,250.00. Interest total paid out: $248,905.50

Payout amount: $748,905.50 (total of 300 payments) plus property taxes $156,250. So in 25 years you would of paid out for owning this home about 905,155.5 Based on the growth rate after 25 years would be $1,356,882.57. This means that you would conservatively made $451,727.07 Oh yes about repairs and upkeep; my neighbours had a similar home after 25 years it cost them 200,000 in upkeep costs but their home was valued 200k more.

So based on my analysis owning is more valuable; of course for discussion you would have to find funds of investment that would make you return more than 1,356,882.57? Of course excluding the cost of living in a home and enjoying it, raising a family etc. Lots of intrinsic value in owning!

This is my view point and analysis based on what I’ve seen in the last 25 years. I don’t think our government or banking institutions will suffer the same faith of the USA. Canada is a young country still and we keep getting 180 thousand immigrants coming into Toronto each year. All based on supply and demand. — Candi

Well, that sounds simple enough, right? Just buy a house, pay it off, live there for a quarter century and make $450,000. What could possibly go wrong?

Lots, actually. Including listening to a numerically-challenged, ill-informed, semi-literate salesperson. For starters, basing 25 years of mortgage payments in current rates, which we all know are near historic lows, is absurd. In order for the value of this property to swell for more than two decades (at her average rate of 4%) means both economic and income growth will be required. Growth begets inflation, and that brings higher interest rates. The historic norm for five-year mortgages has been 8%, not 3.5%. So, this is a fail.

Now how about the $451,000 profit after spending $900,000 on home ownership? Naturally the realtress ascribes zero value to the initial $100,000 down payment which, at 7% (the average return of the TSX over the past twenty years) would be worth $575,351 by the time the mortgage was paid off. And there’s the commission to sell the place, which would be necessary to realize the profit. That’s $68,000. Suddenly that profit isn’t.

How about the magic of turning $500,000 in Toronto real estate into $1.3 million in twenty-five years? Can anything even come close? Not investing in financial assets, Candi suggests, which means she probably never tried it. But $500,000 returning 7% for that period of time actually ends up being $2.86 million, which sure looks like $1.5 million more than the house – and plenty of money to handle some rent.

Wait, we forgot all those teeming masses of immigrants clogging the highway from the airport. “Canada is a young country still and we keep getting 180 thousand immigrants coming into Toronto each year,” says Candi. Actually all of Canada will receive 260,000 new residents this year, of which Toronto nets an average of 55,000 (according to the city). Last time I checked there was a new condo being built for every one of them.

Finally, Cathy, your pal says her parents “doubled their money in a short time” owning a house in Vancouver. Granted, Van has seen massive price inflation, and is now suffering the inevitable and painful trip back down. But the average house has taken nine years to double in value, and prices are now on their way back to 201o levels. I guess Candi’s folks own a grow op.

One of the few true statements in this letter: there’s intrinsic value in owning. Of course there is. It feels good. Endorphins swim in your vitreous fluid when you dream about it. Real estate is romanticized, idealized and lionized in our minds. It’s become the marker of achievement and social status, a surrogate for wealth. Cheap money and good house porn have brought us to this point, where a sweet realtor can not only make up numbers, but the facts justifying them.

If you lust for a house, Cathy, buy one. Just don’t call it an investment.

NOTE: Crazed digital mice attacked this blog Friday night causing premature posting and pictorial poverty. My apologies to those who were disappointed. Deal with it. — Garth

213 comments ↓

#1 NoName on 02.08.13 at 10:20 pm

Where is the picture?!

Serious technical issues tonight. Too bad. She was hot. — Garth

#2 Toronto Real Estate Boy on 02.08.13 at 10:24 pm

Realtors are desperate!

#3 COW MAN on 02.08.13 at 10:27 pm

Sir Garth:

Don’t lead us to believe only real estate promoters are numerically challenged. Have you ever seen Insurance Company Projections? Same sort of sales pitch. I fell for it. I am certain others have too.

#4 Snowboid on 02.08.13 at 10:29 pm

Kelowna RE laugh of the day…

They couldn’t sell it at $ 244,000, so the new strategy is to relist at $ 299,900. Same condo, same renos, same Dukes of Hazzi realtor!

http://www.realtor.ca/propertyDetails.aspx?propertyId=12815595&PidKey=-1562354547

#5 Grim Reaper/Crypt Speculator on 02.08.13 at 10:31 pm

Fiiirrssssttttt

#6 richard on 02.08.13 at 10:31 pm

For sure….first!

#7 Just checking on 02.08.13 at 10:32 pm

Garth, For second time this week, you’ve spelled “listing” instead of “listening”. (Must be all the real estate talk.)

#8 Mississauga on 02.08.13 at 10:33 pm

Last

#9 DJB on 02.08.13 at 10:33 pm

It really does not take much to pass the R/E course and pass yourself off as giving sound investment advice.

There are ads all over Craigslist to help you pass in 6 weeks.

#10 Doom on 02.08.13 at 10:34 pm

No photo tonight? : (

#11 Henry on 02.08.13 at 10:47 pm

@ #4 Snowboid

It’s pretty common for them to do that check out
http://vancouverpricedrop.wordpress.com/
for even better examples in the vancouver area.

#12 Sebee on 02.08.13 at 10:47 pm

New condo risk?

http://m.theglobeandmail.com/news/british-columbia/flooding-of-entire-vancouver-condo-building-results-in-mischief-charges/article7716946/?service=mobile

#13 rosie "moving forward" on 02.08.13 at 10:48 pm

For all of those moving forward on the home as a retirement nest egg. http://blogs.marketwatch.com/encore/2013/02/07/will-your-house-pay-for-your-retirement/

#14 Devore on 02.08.13 at 11:01 pm

#4 Snowboid

Hazzi, Hazzi, Hazzi… isn’t that the dude who counsels people to buy Kelowna real estate to flip for easy money?

#15 gladiator on 02.08.13 at 11:08 pm

AAARRRGGGHHHHH!!!! Where’s my pic fix? This post is like ice cream with no cherry on top… :(

#16 JSS on 02.08.13 at 11:16 pm

Where’s the hot chick picture? This sucks.

#17 Jack the Lad on 02.08.13 at 11:16 pm

“Candi”… former porn start turned realtor? Fitting in a way.

#18 a prairie dawg on 02.08.13 at 11:20 pm

@ #1

Agreed.

This blog is worth less, without pics.

And ‘eye candy’ had soooo many possibilities. ;)

#19 Warren Buffet on 02.08.13 at 11:24 pm

It makes no sense why anybody would put that much capital at risk in Scamcouver? The whole city has been speculated for fodder for years. But now when the momentum begins to dissipate some bull realtors say it’s a good time to buy? I don’t know who’s smoking what, but in all honesty now, Vancouver is poised for a severe collapse in housing prices.

#20 Warren Buffet on 02.08.13 at 11:26 pm

Watch the next video to gain some
perspectivehttp:

//www.youtube.com/watch?v=AVH8yVX3E1A

#21 Jay on 02.08.13 at 11:27 pm

Sure, it’s easy to break down numbers and say one is a better route than the other. However, these break downs rarely paint the entire picture.

That investment in a home, that monthly house payment is also providing a residence. Few people have 100K initial downpayment that they could choose to put into a home or into an investment. A house payment is a continued growth investment…it is money you have to pay out one way or another in a place to live. sure, you can find a place cheaper to rent than a house payment but not that much cheaper. Therefore, the amount you have to invest each month is either as part of your place to live in a house payment or the extra money you might have left over after paying rent. In my case, I have a house payment plus taxes of about $1700. I could probably rent a similar house for about the same as my house payment. Therefore, I don’t have extra funds that I could use to invest were I to rent. Yet I continue to build equity in my current home. Now, I could live in a smaller house or apartment and pay less but even then I might save about 500 per month but I would also have a less enjoyable lifestyle, live in a worse neighborhood or have to put up with paper thin walls and potentially loud neighbors. Therefore, try to see the big picture before you suggest home ownership is not a good investment.

#22 Money talks on 02.08.13 at 11:29 pm

Down she goes http://www.winnipegfreepress.com/business/canadian-press-newsalert-unemployment-rate-falls-to-70-in-january-21900-jobs-190360361.html

#23 Beach Girl on 02.08.13 at 11:31 pm

No pic?

Technical issues tonight. — Garth

#24 Min in Mission on 02.08.13 at 11:34 pm

Thank Heaven that my home is not an investment. We bought a house, well within our means, and never considered it as an ATM, or money machine.

It is a place where we live, have our hobbies, park the car/truck/etc. Where we barbeque, eat dinners, and all that stuff. We enjoy our place, and plan on staying here for a few more years.

Definitely not counting on it to “finance” anything. I have heard all kinds of stories about people making out huge on their houses. Just haven’t actually seen that many.

#25 Dr. WAYNE on 02.08.13 at 11:34 pm

#5 Grim Reaper/Crypt Speculator on 02.08.13 at 10:31 pm

Fiiirrssssttttt

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

Nope … 5th … don’t fret … you’re still an a$$hole, so rejoice.

#26 Dr. WAYNE on 02.08.13 at 11:35 pm

#6 richard on 02.08.13 at 10:31 pm

For sure….first!

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

NOPE … but ‘for sure’, you’re the ‘second’ a$$hole …

#27 jan on 02.08.13 at 11:42 pm

Do you know how to tell when a realturd is lying……thats right,,,their lips are moving !
Can you blame them.
I went to a recruiting session by Royal Lapage back in 2007 and the general manager Chris Simmons says over and over again” Our newest member realtor just made $60,000 comission on a single sale on the west side of Vancouver, $$60,000 he says over and over again and he pretty much kept on saying it till the end.

#28 OwlEyes on 02.08.13 at 11:50 pm

I know you accepted the immigration premise because there were enough other things wrong with the argument, but the idea of immigration to Toronto is passé. There are too many condos. This article is from a year ago…

http://www.theglobeandmail.com/news/politics/immigrant-drop-imperils-ontario-economy/article4197576/

#29 coastal on 02.08.13 at 11:54 pm

Sounds like some of the dumb ass agents we have to listen to in Victoria. One on the news tonight claims the condo explosion is going to be no problemo as long as you don’t want to flip and have a long term outlook. Yes, I want to live in a 500 Sq Ft box for a LONG time. It’s like every agent who puts their face out there is claiming 500 SqFt for $400,000 is reasonable, and well priced and is something you better get used to accepting cause markets are never going down 20%, or 30% or heaven forbid 50% as it did in the 80′s and 90′s…. cause price declines are bad for business
right ? Price declines don’t happen in the real world outside of some dumb blog I hang out on to pump my business for free, right ? But then they turn around and say out of the other side of their yaps that sellers are stuck in 2010 prices and refuse to lower. Well if agents keep saying publicly the market won’t correct/crash, then why would they lower the price ? Hypocritical idiots in spades.

#30 Jenson on 02.09.13 at 12:00 am

I’m a new reader here, so forgive my lack of awareness when it comes to past content. Despite searching, I can’t seem to find the article Garth references in the first paragraph of this post. Can anyone help?

#31 Rainman on 02.09.13 at 12:03 am

Dr. Wayne, you are actually an a$$hole!!! but you know what, you make me laugh… I know some on this blog won’t like that, but it’s the truth…
Everyone has there place and Dr. Wayne has found his…

#32 Tyrell Pronghorn on 02.09.13 at 12:11 am

This is my view point and analysis based on what I’ve seen in the last 25 years. I don’t think our government or banking institutions will suffer the same faith of the USA. Canada is a young country still and we keep getting 180 thousand immigrants coming into Toronto each year. All based on supply and demand. — Candi

Garth’s typo or Candi’s, or merely a golden Freudian slip – will suffer the same faith – enough said…. pixies, fairy dust, and bearded white dudes hurling thunder bolts at quivering naysayers.

#33 popados on 02.09.13 at 12:19 am

garth posted candi yesterday,di’s twin sister.i’am still looking at the second picture.

#34 jan on 02.09.13 at 12:21 am

Are Canadians inteligent people,well, thats debateable.
Why do people ask realtors for advice on real estate.
That’s like asking a drug dealer for advice about drugs. Does not the simple concept of conflict of interest sink in with cunacks??????
And why does our pu%$y government turn a blind eye on this immoral orgy?????????????????????

#35 Snowboid on 02.09.13 at 12:24 am

#14 Devore on 02.08.13 at 11:01 pm…

Yes, the same fast-talking, fast-driving realtors. The new ad on MLS states the owner paid $ 345,000 for it in 2010!

If so, they are hooped – it’s assessed at $ 205,000 – and I suspect they won’t get much more than that even with the renos (we’ve been through the place).

Not to mention it’s facing Gordon on Bernard and Gordon is soon to replace Ellis as the truck route out of the north end industrial area.

Who knows, maybe they are expecting a market surge now that the snow is starting to melt!

#36 juno on 02.09.13 at 12:31 am

Yeah that was the past. Who really Cares!!!

Looking at the present and the future and ask yourself this

1) is interest rates going to stay low for the next 5 /10 years. Look at the fixed long term rates, they are at 7%. That should give you an indication on where they are headed

2) Is the prices still going to go up. If YES by how much
Or is it going down , If YES how much might they correct

3) Can you buy a house at minimum down payment and have the house substain itself. When I bought my first two houses in Van city me and buddy both got the 9000 dollar grant. We paid 46,000 for each house, but we can rent upstairs for 500 buck and downstairs for 300. So we actually made several hundred per house from rent. (1980′s)

4) Growth can we continue growth? Looking around, in Van City, I can see lots of businesses closing down. I also see construction winding down too. I believe the construction industry takes about 17% ++ of our GDP. If that shuts down, that can be a potential of 17% of the work force into unemployment onto of the 7+ now.

So don’t invest in the past, look to the future, cause the game today is certainly alot different that a few years ago

#37 "House Owner" no more on 02.09.13 at 12:34 am

I think it is the way of life that is forcing people in the place where they simply dont have time or energy to think and research about options available. If you are working for publicly traded company you will quickly understand what does it mean to have bad month or god forbid bad quarter. Everyone is threatening everyone’s livelihood and twelve hour days become norm. So, after the day is over people need some feeling of hope and realestate cartel has readily provided badly needed light at the end of the tunnel. Let me be clear that I am not justifying any of this!
Masses are intoxicated with realestate message not realizing that they are part of biggest ponzi scheme ever. It is just too bad that people are so abused and tired that just a few will have enough of grit or luck to get out in time.
On the bright side alternatives do exist if you get out in time. If you dont know what to do once you are out of realestate ponzi scheme pay someone that you trust and have them invest your money for you. After all they are working hard in securing better future for yourself.

#38 Dr. WAYNE on 02.09.13 at 12:39 am

#32 Rainman on 02.09.13 at 12:03 am

Dr. Wayne, you are actually an a$$hole!!! but you know what, you make me laugh… I know some on this blog won’t like that, but it’s the truth…
Everyone has there place and Dr. Wayne has found his…

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

Flattery will get you everywhere …

#39 Smoking Man on 02.09.13 at 12:46 am

Florida definitely on the mend, real estate….. How is the snow dogs..
I have a flip flop blister….. Ahhhhhhh… And can’t get hung over here. Cause haven’t stopped drinking…..

Non fans enjoy the break of less posting…

Did you know Obama forgave second mortgages here. Wasn’t published

Lady wend I said watch bbry if it goes horizontal for 2days go huge on Friday, I did up 26 precent…. And the kids are trading in iPhone for black berry… This puppy is going to 40 still time…..

#40 Seriously? on 02.09.13 at 12:47 am

DELETED

#41 Rainman on 02.09.13 at 12:51 am

Juno, you are Italian right… I can tell, my last neighbor was… well a couple of them.. one was a hair dresser and has a few houses… like you said, well somewhat… hard to be cash positive buying and then renting these days… These old guys are my buddies.. 40 years my superior, but good dudes!! yes had some wine, but what the hell…. I’m sure they would think SM is a wanker…

#42 Uki on 02.09.13 at 1:00 am

” #32 Rainman on 02.09.13 at 12:03 am
Dr. Wayne, you are actually an a$$hole!!! but you know what, you make me laugh… I know some on this blog won’t like that, but it’s the truth…
Everyone has there place and Dr. Wayne has found his…”

I was going to say the same, so I totally agree with you, Rainman.

#43 mark on 02.09.13 at 1:16 am

This real estate clown in Australia wants criminal charges for poor real estate journalism, I guess he thought no one would go back and look at his own work.

http://tasmanianrealestatetrouble.blogspot.com.au/2013/02/the-rush.html

#44 Nostradamus Le Mad Vlad on 02.09.13 at 1:52 am

-
“Technical issues tonight. — Garth” Read: A blizzard of snowflakes. Positively balmy here. For those who miss a hot chick pic, this can suffice. Further, this is funny, but read the headline to believe it.
*
#191 jess on 02.08.13 at 9:41 pm — “Honduras revives the idea of the charter city – free-market enclaves where corporations can operate virtually under their own rules.”

Interesting. A few days ago, a link said that Honduras was essentially broke, they had nothing to back their debt up against. Trying to shift their bills / burdens to the taxpayer?
*
Boeing Another Dome Petroleum or Nortel in the making? Banxters and the NWO “Look what Private Central Banking did to Greece. Public property being sold for pennies on the dollar and food riots in the streets. That is the future of America unless we rid ourselves of this ‘rule by debt’ model of economics.” wrh.com; Deflation Questions on it; Politicos Taxpayers are used to being trampled on and tossed aside; Brothel If it pays enough to eat, that’s fine! Nuke Power If it doesn’t work, soak the taxpayers.Rich South, Poor North At least in the job market; Rock Solid House built on sand; Terminal Capitalism; Migrant Money Lots of it; Remain Calm! All is well. Charts show the proof; Year of the Water Snake Bad for stocks? Selling Weapons US and China competitors; Surging Oil Exports by the US, but Declining Oil Consumption So who is right? CFR and Treasury Dept. Closely linked; Meatpackers WH sutting them down? China currency manipulation.
*
9-11 Don’t get to close to the truth; Three year old girl passes MENSA test; Hitchcock’s dark side, as if his films weren’t enough; New Lamborghini Neat design; Scaffolding Resembles the shape of the western economies; Evidently, there are numerous ways we are currently playing Russian Roulette; Aaron Swartz This is getting interesting; More on Fox News Try to keep a straight face while reading the headline; Diet Sodas Stick with the regular; David Cameron Orwellian speak gone mad. Suicide training? Space Truckin’ Lotsa places to ship the loonies off to; Fracking Livestock They’re falling ill (not the frackers, the livestock); Beer Powering machines and good to swig; China – Japan Hidden side; Two Pix 1967 – 2007. Af’stan before and after; Govt. granted unlimited supply of prescription meds., while ignoring the natural ones; The New Water Barons (TPTB) Would this have anything to do with fracking? US Civil War II has begun.

#45 bob on 02.09.13 at 2:03 am

I love these math type posts….

#46 Clarifying Assumptions of the Argument on 02.09.13 at 2:17 am

Garth,

I agree with all of your logic. The only issue I have pertains to the assertion:

“But $500,000 returning 7% for that period of time actually ends up being $2.86 million, which sure looks like $1.5 million more than the house….”

This is absolutely sound reasoning, but it glosses over the fact that, according to this example, the money available for investing is only $100K. The potential investor has $100K to invest, not the $500K assumed current value of the prospective home. The leverage inherent in the purchasing of real estate is the thing that excites potential investors; it’s also the factor that screws them when the market reverts to the mean. But the point I’m underscoring is that the true comparison is between leveraging $100K by investing in real estate or deploying the same $100K into some other market such as equities (ETFs, preferreds, etc.). The potential investor would not be starting off with $500K, but only $100K.

#47 Richard and Zeus on 02.09.13 at 2:49 am

Guess I will have to look at my wife tonight.

#48 Freedom First on 02.09.13 at 3:06 am

I am amazed at the number of people who have no savings, no pension plans at work, are 1 or 2 pay cheques away from financial hardship, and want to buy, or have bought RE. Nobody should have all of their money in one asset, ever. This is foolish. If you argue this fact, you are a fool. No exception.

#49 Roy on 02.09.13 at 3:20 am

After 8 months, Vancouver is trending with Miami in terms of degree of collapse from the HPI peak.

http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/02/its-been-8-months-since-peak-how-does.html

#50 John Prine on 02.09.13 at 3:23 am

1. We have owned several houses, are renting now but
will be buying another in the next year because we
like owning, never considered it an investment, just
what we are comfortable with.
2. Victoria new condo market is dead.

3. Real estate licensing course is NOT as easy as a lot
here seem to think it is.

#51 dan on 02.09.13 at 4:26 am

A good video, https://www.youtube.com/watch?v=ti6nPCDnPi8&feature=youtube_gdata_player

#52 JuliaS on 02.09.13 at 4:53 am

#25 Min in Mission

My home? Just like yours:

It is a place where we live, have our hobbies, park the car/truck/etc. Where we barbeque, eat dinners, and all that stuff. We enjoy our place, and plan on staying here for a few more years.

… and by the way, we don’t own it. We rent.

#53 kansai92 on 02.09.13 at 5:10 am

With a name like Candi, why wouldn’t you buy from her?
Does she do any Diana Arvatescu-like poses?

#54 Asse on 02.09.13 at 5:24 am

Weather in Toronto was challenging yesterday. Saw way too many accidents. I guess we’ve been spoiled for a while.
Also witnessed people at their best. Apparently lots of good people willing to go out of their way and help others stuck/shovelling. Some neighbors, some strangers. That’s priceless.

#55 Phooey on 02.09.13 at 5:43 am

“Toronto nets an average of 55,000 (according to the city). Last time I checked there was a new condo being built for every one of them.”

Nonsense. If 55,000 people come, and 55,000 condo are built, this DOES NOT mean that one condo is being built for each immigrant. The existing population dwarfs the immigrants. The existing population will use most of these condos for themselves.
I heard that Canadians are generous people, but building a condo and giving it to an immigrant is a bit much to expect.

We have no sense of humour either, apparently. — Garth

#56 Buy? Curious? on 02.09.13 at 6:42 am

Technical difficulties? What? I love the juxtaposition the picture is with the content of the blog. It would “click” in my head when I figured it out. Now, my day is ruined. RUINED! I guess I’ll look at the Party Photos in the Globe and Mail of Toronto elites partying hard at the “Party of the Week”. They give me this warm feeling inside, without the bloating and gas.

http://www.theglobeandmail.com/life/fashion-and-beauty/party-photos-of-the-week-canadian-film-centres-25th/article8402825/

#57 VanLarry on 02.09.13 at 7:52 am

RE: “#31 Jenson on 02.09.13 at 12:00 am”

The one posted just 2 days ago. Titled “The harbinger”.

#58 Julia on 02.09.13 at 8:18 am

#21 Jay on 02.08.13 at 11:27 pm

Ok Jay, now add on heat, hydro, insurance, repairs, maintenance, appliances and all the other accoutrements you need to buy for the house on a continuous basis, and subtract the part of the $1700 that actually goes towards paying off the equity in your mortgage. Last step, consider the scenario of the value of the house actually decreasing. Now compare to renting.

#59 Eaglebay - Parksville on 02.09.13 at 8:21 am

#24 Beach Girl on 02.08.13 at 11:31 pm
No pic?

Technical issues tonight. — Garth
_______________

Wardrobe malfunction?

#60 JustTryingToProtectEquity on 02.09.13 at 8:51 am

#20 Jay

Mr. Turner owns a home. My guess is he owns a cottage too. Nobody on this blog is saying it’s bad to own a home. What we are saying is, it is important to diversify.

When you say, “Yet I continue to build equity in my current home.” You may or may nor be right, depending on when and where you bought it.

I’ve told this story before, so many of the regulars on here are tired of hearing it. My wife and I bought our house in the High Park-Bloor West Village area (Toronto), in 1996. We paid $325K for it. Eighteen months before we bought it, it was listed for $580K.

That’s a difference of $255K. In eighteen months!

And we know many, many neighbours who fared much better than us. When the market turns downward, it’s not fun trying to sell a home.

Imagine what the previous owners could have done with the $255K had they sold at the peak?

If you bought a house in 1989, at the peak of that market, the value in your home immediately plummeted. You did not see peak value again until 2002.

Because we bought at the bottom of the market, we were not strapped for cash. We paid off our mortgage in two years! Living mortgage free, we were able to top up our RRSPs, our TFSAs and our RESPs for our children. We were able to go on the occasional vacation.

We sold our house last spring for three times what we bought it for, $975K.

Our intention is to build a home in the country.

The young couples who have bought in Vancouver or Victoria, in the last three or four years, aren’t building equity in their homes, nor are the ones that have bought in Toronto in the last two years. They are either losing equity (in the case of British Columbia) or about to lose equity (in the case of Toronto). Lots of equity.

It is never prudent to put all your equity into one investment.

That’s what Mr. Turner is trying to tell people.

#61 TurnerNation on 02.09.13 at 9:08 am

If real estate is an investment why must you monthly shovel cash into it?

“In Soviet Kanada, you pay ‘investment’”

#62 maxx on 02.09.13 at 9:42 am

Do not be afraid to low-ball….and I mean low-ball.

Declining and unstable job markets, record-levels of indebtedness in all economic and age strata, seniors with inadequate incomes who are cannibalizing their savings whilst acquiring debt by borrowing ever more to make ends meet, and continuing sales and price declines.

RE markets are most definitely deflating like a flaccid party balloon.

The party’s over.

#63 Andrewski on 02.09.13 at 10:18 am

Read this for a chuckle!

http://www.royallepage.ca/en/media/130108-house-price-survey-q4-2012-market-survey-forecast-real-estate-market-update.aspx?toolstips=1052&relatedcontent=1074

#64 Regan on 02.09.13 at 10:24 am

#47 Clarifying Assumptions of the Argument – yes I can’t tell if it’s the math or the assumptions that bother me. As the realtor says… if you leverage an investment into an assets that increases in value by 4% over the long-term, you will make money. Well, yes that’s true, but you’re assuming oh so much. And Garth’s reply, that investing at 7% makes more money. Also, true but with a lot of assumptions too. It’s the risk… the assumptions… and your personal circumstance that completely alters the math, to say nothing of the future, which is bound to be different from the past. People, don’t be afraid to run their own (specific, tangible) math to make decisions instead of relying on these mass generalizations. The one takeaway from I really get from reading Garth is 1) don’t listen to anyone about investments, including him and 2) learn math and the logic to use it in your life.

#65 hangfire on 02.09.13 at 10:50 am

DELETED

#66 Steven Rowlandson on 02.09.13 at 10:56 am

What can a $1200 rent payment buy you? The trouble is a $1200 a month rent or mortgage payment is unaffordable and is like 2 or 3 weeks pay before taxes.
What species are the real estate cultists? What world do they live on?

#67 IM in C on 02.09.13 at 11:05 am

Both Candi and Garth are making one absolutely ludicrous assumption: namely that both of them are capable of looking 25 – 50 years in the future, that what is trending today will continue on forever

Not so. Rates are adjustable, as are returns and taxes. But one needs to make certain assumptions to determine the best path ahead. It’s called planning. Fate rarely just happens. — Garth

#68 Astroboy on 02.09.13 at 11:22 am

I currently rent a 1-bedroom basement in Vancouver West, and drive across most of it everyday as I go to school in UBC. I knew Vancouver prices didn’t make sense, but driving around from one appt to the next this past week, I was quite surprised at the number of for sale signs popping up everywhere. At every block, there is at least 1, on some blocks there are 4-5 houses for sale. I’ve lived in many cities in different countries and its clear to me that there’s a disproportionately large number of people trying to sell their houses in what is supposed to be one of the most affluent parts of greater Vancouver. To all who have been prudent – continue to be patient – this played out exactly the same way in Japan, SE Asia, Iceland, USA, Spain, France when their housing bubbles burst. And nobody was making any more land in any of those countries either.

Please keep up the good work Mr Turner in telling the truth and educating more people financially.

#69 Goldfinger on 02.09.13 at 11:28 am

Typical response by an idiot realtor. It’s amazing how delusional they are thinking their numbers actually make sense and sending an email to a potential client trying to sell them the idea is the icing on the cake.

And why is it that every realtor says something about “immigration” and how great it is for the market? Why are their immigration numbers completely wrong every time? And to top it off realtors try to make people believe that every immigrant is coming here with $2 million in cash ready to blow it all on R/E ? Meanwhile the majority are ending up at the Tim Hortons drive thru passing coffee and donuts to you.

#70 Sebee on 02.09.13 at 11:39 am

Snow storm is really cutting into comments volume!

#71 claudius emperor on 02.09.13 at 11:42 am

# 47 you are like the devil reading the bible.

The argument was 500 k was that:
if invested in real estate the house ‘would’ be worth 1.4 mil in 25 years (based on agent projection) while if invested in the stock market it would be worth 2.9 (based on historical TXS returns) hence a difference of 1.5 mil.

There was a SEPARATE converstation of how much of these 1.4 mil would be profit, this is where the 100 k downpayments comes into the picture.

Capishe?

#72 Geo on 02.09.13 at 12:03 pm

#48 Richard and Zeus on 02.09.13 at 2:49 am
Guess I will have to look at my wife tonight.
—————————————————————–
I have some *On second thought I won’t say it lol

#73 Alain Savard on 02.09.13 at 12:05 pm

If you lust for a house, Cathy, buy one. Just don’t call it an investment. Garth.

Amen. That’s all there is to it. Cars are not investments and that doesn’t stop us from buying them. It is the same with real estate in 2013, except that 10 years from now a house may only be worth what you pay for it today as opposed to a car that will be worth nothing.

So if you can commit to staying put for 10 years and don’t mind the risk of making nothing then go for it. But watch out if life forces you to bail halfway through. You could end up taking a pretty cold bath.

#74 Dr. WAYNE on 02.09.13 at 12:11 pm

#35 jan on 02.09.13 at 12:21 am

And why does our pu%$y government turn a blind eye on this immoral orgy?????????????????????

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

And since when is an orgy ‘immoral’ … sheeesh …

#75 Gypsy Kid on 02.09.13 at 12:14 pm

#61
we bought our first home in 1996 as well…bottom of the market. we moved since then, twice but wow! that was the year to buy a home!

#76 furst on 02.09.13 at 12:20 pm

#61 JustTryingToProtectEquity

You Sir, have taken the concept of feigned humility to a whole new level. Artfully done, ol’ chap!

#77 Bottoms_Up on 02.09.13 at 12:32 pm

In 9 months I’ve seen the asking price of a house in Gatineau drop slightly over 20%.

The largest purchase of most people’s lives, and we have to rely on people like Candi to guide us through it and ensure we aren’t making a mistake, that we aren’t over-paying.

Had the house I followed been wanted by a set of buyers 9 months ago, with Candi as their agent, they would have paid $100,000 more than they needed to.

That’s why there should be some type of regulation of agents.

Seriously, buyer beware. Everyone can buy the same car +/- $1000; everyone can buy the same appliance +/- $100. But houses? Bend over and lose $100,000 if you’re not on the ball.

#78 Dr. WAYNE's Doctor on 02.09.13 at 12:36 pm

#32 Rainman on 02.09.13 at 12:03 am

Searching for a$$holes is the first stage of the treatment that we prescribe to our patients.

#79 brainsail on 02.09.13 at 12:45 pm

Very interesting…

“Country pricing’ a cause of Canada-U.S. price gaps”

“Manufacturers can’t justify the major markups for Canadians, expert says”

http://www.cbc.ca/news/canada/story/2013/02/07/marketplace-country-pricing.html

#80 Mithan on 02.09.13 at 12:51 pm

I know a lot of people hooked on those “$239k mortgages for $1200″. They go buy something and before they know it, their total payments balloon from $1200 to $1600 once you factor in Property Taxes and/or condo fees, but hey, they can now say they are “not throwing away their money”.

Then they start running up the credit card debt to maintain their lifestyle they used to have before that….

I still maintain 2013 will be a good year in Canada and certainly Saskatchewan.

I also still maintain that 2014 or 2015 will start a decade of consumer retrenchment, where people quickly realize the folly of the last 15 years needs to be payed for.

#81 Chickenlittle on 02.09.13 at 1:00 pm

Garth,, you should do a post on mortgage insurance. I was watching Marketplace last night and there are a lot of people getting ripped off. One woman’s husband died, and the bank denied her insurance claim. I for one would like to know more about it.

If everyone is chirping about eye candy, why not put Steve Yzerman’s picture on here? He is still EXTREMELY hot! Do one for the ladies. The fireman was cool, but that was last month.

Candi? Hey, my name is Bambi, but you don’t see me showing my feathers off online.
___
Dr. Wayne, you are actually an a$$hole!!! but you know what, you make me laugh… I know some on this blog won’t like that, but it’s the truth…
Everyone has there place and Dr. Wayne has found his…

===================
Yes, this is true. this blog is like a bar minus the hot guys, foosball table, and beer. The same people show up, you get to know them; some of them are funny, some annoying, and once in a while you get thrown out (deleted). And there’s always that one drunk guy (SM) or chick (Beach Girl) that is infamous.

Of those who visit daily, an average of 1% leave a comment. What does that say about you? — Garth

#82 Ronaldo on 02.09.13 at 1:08 pm

Love the new pic Garth. Is that Dr. Wayne looking over the fence?

#83 Drill Baby Drill on 02.09.13 at 1:16 pm

Alberta as I have posted on this pathetic blog a few times in the past will implode at a more rapid rate than Van. or T.O. in Q3 & Q4 of 2013. However once the dilbit transportation problem resolves itself Alberta will climb out at a much faster rate than Va. or T.O. That is why I have loved working here in Cowtown over the past 35+ yrs.

#84 JustTryingToProtectEquity on 02.09.13 at 1:20 pm

#77 Furst

You may be right. Maybe a little. But it’s the only story I have and, given the general messaging of this blog, I think the story is a good one. A great one! I’m so happy we bought and sold when we did! I’m the best!

Is that better?

#85 EIT on 02.09.13 at 1:38 pm

I’ll be honest, I just wanted to hear Garth call a 12 year old girl a …. nutbar.

http://www.youtube.com/watch?feature=player_embedded&v=Bx5Sc3vWefE#!

Not exactly. I’ll save that for whoever programmed her. — Garth

#86 Andrewski on 02.09.13 at 2:02 pm

Another case of sheeple acting like lemmings:

http://askross.ca/2013/02/semi-detached-for-580000-in-the-suburbs/

#87 Humpty Dumpty on 02.09.13 at 2:04 pm

Others are worried about the monetary system too. “I think the biggest danger is … a currency war,” hedge fund icon George Soros, chairman of Soros Fund Management, tells CNBC.

http://www.moneynews.com/FinanceNews/Rickards-monetary-system-collapse/2013/02/06/id/489253?s=al&promo_code=125B7-1

That must be green mens cousin.. Go canukle heads go..

#88 Ralph Cramdown on 02.09.13 at 2:05 pm

#74 Alain Savard — Cars are not investments and that doesn’t stop us from buying them. It is the same with real estate in 2013, except that 10 years from now a house may only be worth what you pay for it today as opposed to a car that will be worth nothing.

Classic. This is OK advice for people who are financially independent. For most Canadians who aren’t, buying a house that doesn’t appreciate by at least inflation plus a bit will SERIOUSLY reduce their standard of living in retirement.

The real estate industry said it was a great investment all the way up. Once the roller coaster gets to the top. it’s all “don’t think of it as an investment.” Anyone who takes this advice had better have a plan to have the property paid off AND to have saved and invested enough to fund their retirement by the time they quit working. Most people don’t seem to be able to save enough to accomplish this.

P.S. That ten year old car that I’m driving is saving me hundreds of dollars a month versus a new one, and that’s worth something. Figures; realtors always seem to look at the cash flow when it would be more appropriate to look at the balance sheet, and to look at the balance sheet in situations where it would be more appropriate to concentrate on the cash flow.

#89 bill on 02.09.13 at 2:05 pm

the picture was worth the wait Garth..
masterful topiary effort. inspirational even.

#90 think again on 02.09.13 at 2:08 pm

What about the future value of your $100K in 25 year?

#91 Tony on 02.09.13 at 2:10 pm

Re: #51 John Prine on 02.09.13 at 3:23

Most real estate agents i’ve met are just one brick short of retarded. You don’t want to ask them questions outside the realm of real estate or they’ll just have a perplexed look on their faces.

#92 Real-e-horny on 02.09.13 at 2:20 pm

So Garth,

Are you still making predictions? When does all this madness.
Which year do you think will be the one where it finally makes sense to buy.

This Canadian real estate market seems to have long legs and so far the realtors are right. Buy or be priced out…. They said…. And now…. We are “Priced out”!!!

Thanks

#93 INTERESTING TIMES on 02.09.13 at 2:52 pm

The 50% RE Crash has arrived. Horrible Jobs Numbers, Housing start numbers and deficit numbers Kill Canada this Week. Debt Slaves better get prepared or you will get wiped out fast. Soon we will see who is swimming naked in Canada in full debt!!!!

A very hard landing is coming for many, make sure you protect yourself!!! Big Negative Feedback Loop coming to Canada’s Economy Soon. Look at LINKS below and learn my HGTV Virgins!!!!

HGTV Virgins get out there and start low balling these realtors by 50 percent. Don’t waste your time going to open houses when you could just sit on the MLS and low ball these used car salespeople by email. Get out there and get your revenge. Show them that you are not as stupid as the show portrays you!

- Europe already in recession/depression, Japan and US right behind them with anemic growth.

- Jobs being lost everywhere and the Canadian economy is slowing down. Watch and read the news in the business section and learn about the layoffs happening every day my virgins. Educate yourself!

- Austerity starting already in Canada. Many in government jobs will be bye, bye. Federal gov’t firing 20,000 alone in Canada. All gov’t jobs under attack.

- Manufacturing jobs have moved to Asia and back to the US. Canadians can’t compete with the New America where the factory worker now makes $12.00 to $15.00 an hour, with no benefits and new Union Breaking Laws in many States. The New US can now buy a nice home for $100,000K-$200,000K. You are so screwed in Canada! Latest Victim our we lost 22,000 jobs, Housing starts down 19%.

- Big Bad Alberta is in big danger now. They cannot compete now in the global marketplace with their overpriced Oil and are losing money on every sale now. They are being taken to the cleaners. Not good for our economy. I guess this is why President Harper & CON government have started throwing a lot of money back into Ontario Car Plants. I guess they realized there mistakes that you can’t only have a 1 trick pony called Alberta Oil but need a diversified economy. Poor management on their end and more job losses to come.

- 70% of CDN living pay cheque to pay cheque and have no savings and over 70% have no pensions

- 60% of boomers 60 years and older entering retirement in a lot of debt. Also, a lot of these boomer fools co-signed for their kids $800,000 Mc Mansions. The banksters will wipe the floor clean with both the kids and parents after this 50% RE Crash when they both lose their homes!

- Empty condos being built everywhere and will be going for 50% off soon. HGTV Virgins will be crushed!!! Many HGTV Virgins are going bankrupt at Trump Towers, what happened to RE only goes up? Many in the Construction Trades will be soon unemployed. They have already started calling begging for any kind of work. I feel sorry for them as it will be tough times for them and their families. The only thing Canada had for the last 10 years was construction jobs and now these jobs will be going bye, bye as well. At the same time over the last 10 years all our good manufacturing jobs were going over seas.

- Empty homes all over the MLS, can you say power of sales have started, soon 50% off will be coming to Canada

- For lease signs everywhere in business districts and commercial areas, I guess business has moved out of Canada

- Canadians are 164% in debt! More than the US, Ireland, Spain, and UK when they had there RE Crash.
- Over 8 months of dropping RE sales. Next thing to drop will be prices by 50%.

- Over 70% of mortgages in Canada are 5% or 0 down CHMC mortgages. Can you say high risk and backed by the taxpayer. When this baby blows up kiss your social services good bye. This is what the in action plan looks like. We supported our banks with free taxpayer dollars to give out loans to people with no money creating a RE Ponzi scheme 10 times bigger than the US, Spain, Ireland etc. Even Brother Carney is bailing out of Canada and going to the UK after his poor policies of 1% rates have enslaved Canadians with unrepayable debt at record levels “What a Rock Star”. See you later fools he will be saying.

- And remember a home is only worth what a buyer will pay.

- The realtards, brokers, banksters and builders are in full out panic mode. They have already enslaved 70% of Canadians with RE Debt and there is no more FREE Money to give to the other 30% HGTV Virgins.

The 50% crash is here my virgins. Get out there and start low balling as the time is now for your revenge. Don’t sign up for bank slavery like the other 70% of the HGTV Virgins in Canada. They are screwed for life now as they were sold the Kool-Aid by the RE industry!

Get out there and start Low Balling by 50% as you have the Power Now.

Too Read Globe & Mail Articles for free delete your browsing history and read 10 articles for free each time.

http://www.theglobeandmail.com/news/national/alberta-mulling-options-in-wake-of-new-financial-reality/article8423464/

http://www.theglobeandmail.com/report-on-business/economy/jobs-downturn-mirrors-slump-in-housing-and-trade/article8417420/

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/housing-data-a-bad-omen-for-canadas-economy/article8393998/

http://www.theglobeandmail.com/report-on-business/economy/jobs/canada-sees-biggest-jobs-decline-in-half-a-year/article8374406/

http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-home-builders-scale-back/article8374432/

http://business.financialpost.com/2013/02/09/canadas-cheap-car-loans-has-eerie-trappings-of-housing-crisis/

http://business.financialpost.com/2013/02/08/canadas-economy-sheds-21900-in-first-drop-in-6-months/
http://business.financialpost.com/2013/02/07/retirement-savings-challenge-young-people/

http://business.financialpost.com/2013/02/08/housing-starts-plunge-revealing-weaker-than-expected-market/

http://www.thestar.com/business/personal_finance/2013/02/07/worried_about_your_pension_if_your_company_goes_bust.html

#94 Mike on 02.09.13 at 3:03 pm

I used my imagination for the picture.

I imagined ‘realtor spring’ as a holiday.

I saw a semi-provacatively dressed woman in a Santa-like suit taking your presents out from under your tree. This holiday would obviously fall sometime during the 3-4 week period after Christmas. It is sort of a metaphor for what happened to people who took the plunge during this drug fuelled buying orgy.

Mr Turner’s picture is pretty good too.

#95 TurnerNation on 02.09.13 at 3:11 pm

If this weblog is too loud, you are too old!

#96 HAWK on 02.09.13 at 3:14 pm

#66 hangfire on 02.09.13 at 10:50 am

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

It’s what happens when you have Big Government, grow bigger in any land. But people have been indoctrinated to believe that government will be there to look after them.

Look south of the border, after 4 years of ever increasing debts they want even MOAR state intervention.

Self fulfilling prophecy.

#97 Dr. WAYNE on 02.09.13 at 3:18 pm

#83 Ronaldo on 02.09.13 at 1:08 pm

Love the new pic Garth. Is that Dr. Wayne looking over the fence?

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

No, unfortunately, but the topiary is a brilliant metaphorical image representative of our real estate industry.

#98 Old Man on 02.09.13 at 3:23 pm

#74 #89 – agree that a car is a depreciating asset, but once you buy new with a national sale and take the hit for the balance it can become a gem somewhat over time. Keep the annual mileage down; have it rust proofed when new; do regular maintenance; and the insurance rates will go down in time.

A car in a general sense is a terrible investment, and lots of parts will fail due to age alone, but for basic transportation it might become a financial winner for many years. Buying a new car every 3 to 5 years is at a great book loss, as one rolls over the high depreciation all too much as a write off. Then there is the debate to buy vs leasing lol.

#99 Dr. Hoof Hearted on 02.09.13 at 3:27 pm

STILL DELETED

#100 prairie person on 02.09.13 at 3:58 pm

The focus on this blog has been real estate prices with some attention to earnings but the earnings statements have usually been general. It feels, at times, as if these are simply abstract numbers and so have little personal impact. Last night, I bought a TV. Talked to the salesman. Dollar volume is one quarter of what their stores are doing in Alta, Sask and Man. There were more staff than customers (two couples). Before I asked, he offered to knock a big chunk off the price, gave me a discount on another product and a free cable. I expect they will be out of business by this spring. This cascades. Add up the businesses closing on Vancouver Island and the number of staff losing their jobs. These unemployed have little chance of getting hired. They need to move east. They won’t be paying rent, buying groceries, clothes, entertainment. The people planning on paying for their mortgage by renting are going to see less demand as renters lose jobs and move away. Anyone on the edge re finances (mortgage) is being moved closer to the tipping point.
Renters who can’t pay the rent aren’t an asset.

#101 LP on 02.09.13 at 4:01 pm

#98Dr. WAYNE on 02.09.13 at 3:18 pm
#83 Ronaldo on 02.09.13 at 1:08 pm

No, unfortunately, but the topiary is a brilliant metaphorical image representative of our real estate industry.
**********************************
Aw, I thought it was about hedge fun.

#102 Chickenlittle on 02.09.13 at 4:16 pm

Of those who visit daily, an average of 1% leave a comment. What does that say about you? — Garth

It means I find you irresistable…You’re my older man crush. You, Paul Coffey, and Steve Yzerman…

I love an athletic man.

Besides, at least I can string together a complete sentence.

I’m probably not the only one anyways…I’ve always suspected that Hoof Hearted fellow has something for you too…

#103 Old Man on 02.09.13 at 4:18 pm

I was sleeping a bit, and the other night took a look on mls at certain small city centers within the area called South Western Ontario; not Windsor or Chatham, as they have come back a bit, as was looking at buys when the big crash came about 2009 for an income property. There are properties in areas that are fully renovated selling now at 1997 prices, so this was a surprise to me; perhaps a bad sign of things to come.

#104 EIT on 02.09.13 at 4:30 pm

The generation that makes the mistakes, should suffer the consequences. Wouldn’t you agree? Actually, i’m starting to get it! F everybody else (elfin styles), and just do right by me. Awww yes, the Virtue of Selfishness. So Garth, stop helping people, its cutting in on my bottom-line dollar.

#105 EIT on 02.09.13 at 4:34 pm

Not exactly. I’ll save that for whoever programmed her. — Garth

Ah yes, little know fact, but one must reach the age of suffrage to be labelled a nutbar.

#106 TurnerNation on 02.09.13 at 4:50 pm

US real estate to the moon last year. Chart of hard stats.

http://news.investors.com/business-inside-real-estate/020713-643584-sunbelt-housing-markets-show-strong-recovery.htm

Sun Belt Housing Markets Heat Up As Prices Go Higher

By Vance Cariaga, Investor’s Business Daily
Posted 02/07/2013 04:00 PM ET

Many of the gains enjoyed by Sun Belt cities — including Phoenix, which led the way with a nearly 30% year-over-year rise in its median home price in 2012 — are due to the inevitable rebound that happens after a market collapses.

#107 NorthOf49 on 02.09.13 at 5:09 pm

This dude, at one time, was a student rights hero at my alma mater. Now he’s just a dick with a $490,000 mortgage and no job.

http://www.thespec.com/news/local/article/883926–spending-scandal-silent-sam

dick

#108 Old Man on 02.09.13 at 5:19 pm

#105 EIT – you protest too much, as have made many mistakes in my life, and this all becomes a learning process to move on. Do you think that I have not lost money in my life because I hesitated to hoop a good deal? Anyone who says he or she wins all, is a liar as in the investment world we all make mistakes. You might be jesting like a joker, as Garth is providing solid advice, so let it be.

#109 Herb on 02.09.13 at 5:26 pm

#86 EIT,

Harper has found his next Director of Communications!

#110 Herb on 02.09.13 at 5:36 pm

Garth to hangfire at #116 yesterday:

DELETED. You are done here.

So how come we have the same old, same old at #66 to-day?

Not any more. — Garth

#111 salonist on 02.09.13 at 5:39 pm

reminds me of an ad i used to see in calgary.
rotten roberts dead flowers
jilted by your lover?
fired by your boss?
there you go sm, a new business venture for the boys.

#112 Dr. Hoof Hearted on 02.09.13 at 6:13 pm

#100 Dr. Hoof Hearted on 02.09.13 at 3:27 pm

STILL DELETED

======================================
How the Firsssszzttttt to be ” STILL DELETED”

#113 a prairie dawg on 02.09.13 at 6:23 pm

‘Canadians should be angry’

Not just about digital mice, but large Fe(de)ral rats.

http://www.huffingtonpost.ca/2013/02/09/canada-transparency_n_2653301.html?1360436990&utm_hp_ref=canada

#114 Beach Girl on 02.09.13 at 6:31 pm

WELL, I like that pic. Someone should franchise that topiary artwork and put it on Dragons Den. I would buy lots. I wish to mount all of them, the hedges, I mean. No, the Dragons. So love it when they diss the totally uniformed on life. Worth another glass of wine. HAHA. Such hotties. I really like that show.

Garth and SM, lets invest in some really hunky people who garden, not just the herb.

The one before was better, pic wise. Too funny.

Mortgage insurance is for the mentally challenged. So is Real Estate commission, for that matter. I digress.

My father, who had a Queen’s degree, and my mother who spoke 5 languages, always said, your chance of receiving insurance of any kind is like getting rectal cancer. Now, I know I will get in shit for that. Double entendre. SORRY.

_____

Chickensomething (he/she wrote this)

Yes, this is true. this blog is like a bar minus the hot guys, foosball table, and beer. The same people show up, you get to know them; some of them are funny, some annoying, and once in a while you get thrown out (deleted). And there’s always that one drunk guy (SM) or chick (Beach Girl) that is infamous.

Of those who visit daily, an average of 1% leave a comment. What does that say about you? — Garth

____

It says he/she is a wanna be. How sad. You are what you are. Suffice it to say. Sorry darling. SM and Beach Girl certainly do not need approval from the great unwashed.

#115 Rand man on 02.09.13 at 6:31 pm

On fiat money and Cental banks…

No bankers are not your friends…

“Central Bankers do not work for you or me.

They are not your friends.

They are not trying to protect your interests or to promote full employment or to control inflation or to preserve the purchasing power of your money any further than it serves their interests to do so.

Central Bankers only care about perpetuating the profit streams they have arranged for their respective cartels.

Their loyalty is only to money and to each other, not to their depositors.

Everything else is just very sophisticated propaganda.

We are living through a pandemic of corruption engendered by the universal use of fiat currency.

And yes, a fiat currency regime is a conspiracy.”

http://www.321gold.com/editorials/karn/karn020913.html

Those bullion-pumping web sites hate central bankers, because they have defeated economic collapse, used stimulus to rekindle economic growth, and are on the way to making fools of those who think currency as we know it will not always be society’s bloodstream. — Garth

#116 Dr. Hoof Hearted on 02.09.13 at 6:32 pm

#103 Chickenlittle on 02.09.13 at 4:16 pm

==========

Uh…no……you are confusing me with Dr Wanker.

#117 Rand man on 02.09.13 at 6:33 pm

Turnip nation

“Many of the gains enjoyed by Sun Belt cities — including Phoenix, which led the way with a nearly 30% year-over-year rise in its median home price in 2012 — are due to the inevitable rebound that happens after a market collapses.”

It’s called a dead cat bounce…

Hardly. Those who bought Phoenix or Miami or Vegas at 70% off will not regret it. — Garth

#118 Beach Girl on 02.09.13 at 6:53 pm

#103 Chickenlittle on 02.09.13 at 4:16 pm

Of those who visit daily, an average of 1% leave a comment. What does that say about you? — Garth

It means I find you irresistable…You’re my older man crush. You, Paul Coffey, and Steve Yzerman…

I love an athletic man.

Besides, at least I can string together a complete sentence.

I’m probably not the only one anyways…I’ve always suspected that Hoof Hearted fellow has something for you too…

___

Well, I understand how you think you can address a mans’ basic interest. You learn that in grade eight, unless you are slow. They like that too, the slow part.

You probably can. It does not even require that much finesse.

Stringing a sentence together. A bit improbable. You are just anther bimbo at the bar calling all the unattainable men to your attention. Sweetheart, hard to say, but you are never going to be in the BIG Boy leagues, unless you are a BIG girl (No dummy not in size) OMG. BG.

#119 Real_Professional on 02.09.13 at 7:07 pm

Best blog ever

#120 AK on 02.09.13 at 7:18 pm

Is that Smoking Man in the picture??

#121 chickenlittle on assignment on 02.09.13 at 7:36 pm

My goodness, no one can take a joke on a Saturday night…sheesh!

#122 jess on 02.09.13 at 7:46 pm

The Culture?

http://www.mountainx.com/article/3462/The-big-deal-Linamar-will-bring-almost-400-jobs-to-Asheville

http://www.therecord.com/news/business/article/883659–linamar-s-ambitious-growth-plans-hinge-on-finding-skilled-workers-chief-executive-says

Hasenfratz said at an interview in Bloomberg’s Toronto office:

..”We’re working to train our own, but they’re hard to find and hire on the outside.We need more involvement from governments, but I don’t know how you change the culture to get people interested in these areas…We’re working to train our own, but they’re hard to find and hire on the outside,” she said…The bigger risk to us to meet our plans is our ability to find and develop the people we need.

nytimes article
…high-tech workers: more than nine million people have degrees in a science, technology, engineering or math field, but only about three million have a job in one..”
http://www.nytimes.com/2013/02/08/opinion/americas-genius-glut.html?smid=tw-share&_r=2&

#123 Canuckistan on 02.09.13 at 8:01 pm

The realtor should be sued in a court of law for misleading investors into a Ponzi scheme. Just talk to the owners of the Trump in Toronto. They’ll give her an earful or two about realturd’s investment profit projections.

#124 DreamingInTechnicolour on 02.09.13 at 8:11 pm

If someone buys a place with CMHC insurance on a 25 year mortgage and e.g. then sells it 5 years after the purchase -How come a refund is not issued by CMHC issued for credit of the 20 years that the CMHC insurance is no longer required by the lender (homebuyer with less than 25% down) who was forced to pay for it ?

#125 GLK on 02.09.13 at 8:14 pm

No apology needed Garth.
Love that picture.

#126 Snowboid on 02.09.13 at 8:14 pm

Inspirational advice from a Kelowna Realtor.

http://www.youtube.com/watch?feature=player_embedded&v=s5_yzJ97nN4

Promoting the beauty of Kelowna and its’ wonderful, big trees in the middle of winter defeats the purpose.

But the comment about going into a house and finding someone in bed, then in the shower, priceless!

Don’t forget, you can make $ 200 by doing their work for them as well!

#127 Old Man on 02.09.13 at 8:18 pm

#103 #119 – I just laugh at you all as Garth Turner has a wife, and he is off the page, as he knows better and am sure out of ego he will share some of these sordid comments with his wife, or will he?

#128 Ralph Cramdown on 02.09.13 at 8:26 pm

#116 Rand man

Look, if you want to explain any goldbug theories to all of us, maybe you could explain how holding gold is going to help you in the event of a hyperinflationary collapse. Because the way I see it, if society collapses completely, it’ll be guns that get things done, not gold. If it gets that bad, you’ll need guns. And if you’ve got guns, you won’t need gold.

Maybe you believe that society will collapse to where the masses are starving, but anarchy won’t break out, honourable men with the foresight to have hoarded gold will trade honourably amongst themselves and the rest will starve?

Maybe you believe that men with guns AND gold will trade honourably with each other and enforce some sort of frontier justice, and the rest will starve?

I just don’t quite understand how you think gold is going to help you if it gets as bad as you think it’s going to get. Help me understand.

#129 Coho on 02.09.13 at 8:27 pm

Garth, you must be aware that there is one, two, or perhaps a few people posting under many different monikers, not to mention the incredible amount of sock puppetry going on. She/he/they are watering down your blog if not undermining it with toxic tit for tat one liner posts at each other. Why do you put up with such obvious deliberate disruption on your blog?

#130 Grim Reaper/Crypt Speculator on 02.09.13 at 8:41 pm

Dr Wanker: Plumber/Proctologist

http://www.youtube.com/watch?v=nC4xIfgk2rk

“We attack the problem from either end “

#131 EIT on 02.09.13 at 8:57 pm

#109 Old Man on 02.09.13 at 5:19 pm

By “mistakes” I was referring to future generations being burdened with sovereign debt, unless somebody can explain to me that this is not happening down.

As for Garth’s advice, I never doubt it. In fact, I use it myself (well some of it). I may have come across as a gold-nut or conspiracy-theorist, but that’s just the sensational content I choose to post. In fact, more than half the rubbish I put up here are attempts to drag the counter arguments out of Garth (he has already spared this audience from my more ill conceived comments). I’m not gonna waste my time praising Garth, I’m going to challenge his views. I just hope he doesn’t hate me lol.

The one thing I’m certain of is that it’s a nasty world, act accordingly. Otherwise my mind is open, I hardly care if it appears that way.

#110 Herb on 02.09.13 at 5:26

How many times is this girl going to be brainwashed?

#132 EIT on 02.09.13 at 8:59 pm

*happening now

#133 Ralph Cramdown on 02.09.13 at 9:41 pm

#129 EIT — By “mistakes” I was referring to future generations being burdened with sovereign debt, unless somebody can explain to me that this is not happening [now.]

If they consider it a bearable burden, they’ll bear it. If they don’t, they won’t, either by defaulting or by emigrating. For contemporary examples, you can look at Iceland (refused to nationalize failed banks, told foreign creditors to take a hike, economy recovering nicely), Ireland and Latvia (massive emigration of working age population).

#134 Canadian Watchdog on 02.09.13 at 9:49 pm

#124 jess

Linamar went all the way to the Philippines to find machinists, millwrights, electricians, engineers and accountants just like Tim Hortons went all the way to Mexico to find skilled coffeemaker workers.

#135 Jarnail on 02.09.13 at 10:02 pm

You know Garth, I see everyday house price in Vancouver is down, way down. Too many people think hold the real estate because next few years the price go up. But I don’t know how price can go up? Most all, majority of homes in Vancouver are all 10 years old plus. I just checked the average price anywhere in Vancouver is close to million to own. I think this is where people are very stupid to think they can get that much money for old homes. Not just my opinion but look at how many east indians have moved to Surrey where you pay the same tax and own a much bigger home. Vancouver is garbage.

#136 Dan from Richmond Hill on 02.09.13 at 10:15 pm

http://zancorhomes.com/zero-is-on-now-zero-mortgage-zero-condo-fees-its-the-zero-xpression-event/

“Buying a new home is one of the largest purchases anyone will make. We want to take some of the financial burden off of our purchasers to help them reach their goal of buying their dream home,” said Fabrizio Cortellucci, President of Zancor Homes.

Grazie, signore Fabrizio -:)!

#137 Chickenlittle on 02.09.13 at 10:25 pm

Of those who visit daily, an average of 1% leave a comment. What does that say about you? — Garth

It means I am finally part of that mythical 1%…even if it is only the 1% who comment on your blog…

And Garth, I really don’t mean anything by my silly comment about you being my older-man crush. It just didn’t translate well in writing is all. I don’t think your wife will feel threatened by a chicken…at least I hope not!
I enjoy everyone on this blog, and my comment was not to insult any of you, but just a poke in the ribs so to speak. It is nice to be somewhere where we all believe something in common: that RE prices are too high and they will correct.
So forgive my cheap chicanery, and keep up the good work Garth. I actually HAVE learned something from this blog. It keeps me up when I should be doing my homework.

#138 POOR TO MAN on 02.09.13 at 10:37 pm

Police track source of fake property press release

http://www.scmp.com/news/hong-kong/article/1146302/police-track-source-fake-property-press-release

Police are investigating the source of a document purporting to be an official press release saying that the government would announce new measures to rein in the property market.

The Secretariat Press Office referred the matter to police in a bid to ease fears among internet users after the document was widely circulated last week.

The force said that the commercial crime bureau was investigating.

Anyone who accesses a computer with criminal or dishonest intent is liable to a jail term of up to five years under the Crimes Ordinance.

Internet users had speculated that a press conference was to be jointly held yesterday by Financial Secretary John Tsang Chun-wah and the Monetary Authority to announce the new measures.

Rumours have been swirling since last week on online forum Discuss Hong Kong and through messaging tool WhatsApp.

Some suggested that the buyer stamp duty – introduced in October at a rate of 15 per cent of the property price for non-local buyers – would be increased further, to 30 per cent.

Some cited “internal information” that the government planned to offer 10,000 long-term pre-sale contracts for flats under the Home Ownership Scheme in the first quarter.

There was also speculation about a ban on mortgages for anyone who already owned two homes.

The “new policies” were in a document that mimicked the wording of a genuine press release issued last year, which detailed the government’s measures to curb the property market. The only information changed was the dates and tax rates.

“A press release circulating on the internet saying that the government would take further measures to address the overheated property market is fraudulent,” stated an official press release.

“[The government] strongly condemns those involved in forging the press release for spreading a malicious message to disrupt market order.”

Acting Chief Executive Carrie Lam Cheng Yuet-ngor said: “The public must be very careful now, because the property market is heated.”

The Estate Agents Authority said dealers issuing misleading or fake market information could face disciplinary action.

———————————————————-

manipulation?

#139 Old Man on 02.09.13 at 10:43 pm

#119 Beach Girl

DELETED

#140 a prairie dawg on 02.10.13 at 12:15 am

#126 DreamingInTechnicolour

If someone buys a place with CMHC insurance on a 25 year mortgage and e.g. then sells it 5 years after the purchase -How come a refund is not issued by CMHC issued for credit of the 20 years that the CMHC insurance is no longer required by the lender (homebuyer with less than 25% down) who was forced to pay for it ?

- — -

You don’t pay insurance premiums for all 25 years. Once you have more than 20% equity, you can usually renew without the insurance.

And if you sell, you cease to be a risk, and the policy is not needed anymore.

#141 Nostradamus Le Mad Vlad on 02.10.13 at 12:24 am

-
Saw pix tonight from Boston and Manhattan. The snow storm looks brutal.
*
Budget Cuts do impact different areas from all areas of life; US Fed still bailing out the EZone via QE to infinity;
Dell How times change; Hong Kong Two sides to every story; Samsung Dried fish exporter to start; Mark Carney A possible reason why he jumped ship; United Van Lines People moving; Oh dear Sanctions against Iran are having unintended consequences; Egypt and Greece Both facing revolutions — hunger revolutions.
*
Botox – Guinness Down a pint and get Botox’d for free; 8:12 clip Weird computer code found; Whale of a time upside down; 130 Years On Light bulb still shining; Nuke hype Obomba cutting nukes by a third? Ten Points “But the elite networks have no intention of answering the most obvious questions. Why? Because the follow-up agenda of gun control is all important, and the official Sandy Hook scenario must stand, in order to forward that agenda.” (China); Iran DC and Tel Aviv targeting Iran for no reason at all (well, they do have a public central bank and some gold); The Cost of War Incl. brain injuries and amputations / new artificial limbs; 6:31 clip Cops gone berserk; Similarities (links in) between dubya and Hitler; Returning Drones Satisfaction guaranteed or money back! But Iran producing drones for other countries; 2:17 clip Honesty is the best policy; Gun control? No thanks; Raining Spiders in Brazil, six hundred feet of popsicles in the north east . . .; Pretty but Dangerous “Beneath its pretty pink appearance, Messier 106 is harboring a monster black hole that is hungrily gobbling up matter at the galaxy’s centre.”;; NDEs Each has their own view, but the great thing about ‘death’ is that each proves the reality of the continuation of life, no matter what path they are on.

#142 a prairie dawg on 02.10.13 at 12:37 am

For those who think the appearance of wealth is good enough.

When you’re already over-leveraged on real estate, you might as well have a new over-leveraged car in the driveway too.

Success through debt payments. lol

http://business.financialpost.com/2013/02/09/canadas-cheap-car-loans-has-eerie-trappings-of-housing-crisis/

#143 Westcdn on 02.10.13 at 1:29 am

It is my time to breach the subject of Public service pensions as they are guaranteed by the taxpayers of Canada. This article about bureaucratic waste ($) in the Alberta Health Authority has sent me over the top. http://www.calgaryherald.com/opinion/op-ed/Corbella+Forget+doctors+Redford+should+target+execs/7940766/story.html
The maximum defined benefit payable under Canadian Law is $2,646.67 per year of service. http://www.humanresourceslegislativeupdate.com/pension-and-benefits/2012-pension-and-retirement-savings-limits-announced/
If a member retires after 35 years of service, the maximum pension payable from the plan would be $92,633. Let’s assume a person was a plan that paid 2% for each year of service based on an average of the last 5 years of salary/wages.
Then the person would be entitled to 70% of his 5 year average. In order to obtain the max $92,633 pension payment, the person’s 5 year average would have been $132,333.
I say that pension benefit under a DB plan limit should be ENFORCED and the person stop contributing to the plan after $132,333 is exceeded. Currently, when a person earns more than $132,333, an employer (or taxpayer) will simply pay earned pension benefits over $92,633 from operating revenue as an employment obligation. BS, I say and I apply the same mentality to DC pension plans.
So anyone paid more than $132,333 and a member of a DB pension plan, start saving and planning like the majority of us. Further to annoy me was this article about was the recent court decision about Private pension plans in a corporate bankruptcy. If the plan is underfunded at the time of bankruptcy, the employees will lose pension benefits.
http://pensionpulse.blogspot.ca/2013/02/placing-creditors-ahead-of-pensioners.html
I think enforcing pension benefit limits would eliminate fat cat leeches in both private and public pension plan and reduce pension plan solvency issues. I have no mercy for people earning more than $100,000 and can’t manage their own future.
I also found this article on creativity by John Cleese. I agree than anal retentive people will stifle creative because it undermines or challenges their authority and position. http://www.thereformedbroker.com/2013/02/09/john-cleese-how-to-stamp-out-creativity/

#144 HAWK on 02.10.13 at 3:03 am

#130 Ralph Cramdown on 02.09.13 at 8:26 pm

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

Agreed, gold cannot help anyone in the event of total societal collapse, although even at such a time, it would store value far better than fiat, which would be immediately useful, once order was re-established.

The purpose of including a certain amount of precious metals in one’s portfolio is to serve as a hedge against periods of high inflation, when fiat money loses value rapidly. It has happened in past history and may well happen again.

What is certain is that in over 8,000 years of human history, gold has consistently served the two most important functions that money should serve i.e. a medium of exchange and a store of value.

The difference between gold and fiat is that the latter’s value as a means of payment is only due to it’s backing by some government regime or the other. In contrast, the former has intrinsic strength inasmuch as people accept it worldwide voluntarily and have done so since the days of the Sumerians and the Egyptians.

No one today will accept Zimbabwean dollars (that may once have had value) but if a citizen of Zimbabwe had gold to trade, he/she would be able to purchase goods and services.

Finally, the purpose of this post is not to advocate PM’s as investments, to the exclusion of all others, as that would be completely against the all important principle of diversification, but a reasonable allocation within a balanced portfolio say 10-20% is a good idea for the times we live in.

#145 Beach Girl on 02.10.13 at 4:35 am

DELETED

#146 Canuck Abroad on 02.10.13 at 5:33 am

Off topic but maybe a few locals could weigh in?

Why are we selling heavy oil to America for $35 less than Venezuela charges?
http://www.nakedcapitalism.com/2013/02/koch-brothers-driving-keystone-xl-pipeline-from-canada-to-cut-out-venezuelan-oil.html

And there has been talk in the news about getting the oil to New Brunswick to ship it from there, which seems better than selling it to the Americans too cheaply. Feasible?

Finally, why not build a dedicated shipping port in Northern Manitoba or southern Nunavut and ship the oil from there? Would be expensive, but how might it compare to the cost of building Keystone PLUS all the lost revenue from shipping oil to America at a bargain price, versus somewhere else that would pay more?

#147 Arshes76 on 02.10.13 at 6:05 am

#126DreamingInTechnicolour on 02.09.13 at 8:11 pm
If someone buys a place with CMHC insurance on a 25 year mortgage and e.g. then sells it 5 years after the purchase -How come a refund is not issued by CMHC issued for credit of the 20 years that the CMHC insurance is no longer required by the lender (homebuyer with less than 25% down) who was forced to pay for it ?
—————————————————————–When you purchase the CMHC insurance, your not paying a montly fee, you are paying a one time fee for the coverage of that mortgage, that insurance applies regardless of how long you have that mortgage or how many years you have the house. (Refiancing rules may be different)

#148 live within your means on 02.10.13 at 6:19 am

#89 Ralph Cramdown on 02.09.13 at 2:05 pm

P.S. That ten year old car that I’m driving is saving me hundreds of dollars a month versus a new one, and that’s worth something.
……………………..

Mine is a 13 yr. old Accord, fully loaded. Bought it used about 10 yrs. ago. for a little over $17K IIRC. It has <140K on it now, get it rust checked every year & have shelled out next to nothing on it. Hubby has a used, but fairly new Camry. He barters his IT skills for rust check & mechanical work on both cars. We stopped buying new cars many years ago. They depreciate thousands as soon as they are driven off the lot.

#149 rosie "moving forward" on 02.10.13 at 6:36 am

Addendum to #13

For those out there that are richer than they think. Moving forward on the retirement nest egg, or is it eggs? http://business.financialpost.com/2013/02/09/living-bigger-in-retirement/

#150 Richard andvZeus on 02.10.13 at 6:48 am

I’ll be honest, I just wanted to hear Garth call a 12 year old girl a …. nutbar.

http://www.youtube.com/watch?feature=player_embedded&v=Bx5Sc3vWefE#!

Not exactly. I’ll save that for whoever programmed her. — Garth

And home schooled……because she was not programmed at public school obviously.

#151 Richard and Zeus on 02.10.13 at 6:57 am

#123 skeptacular on 02.09.13 at 7:41 pm
Those bullion-pumping web sites hate central bankers, because they have defeated economic collapse, used stimulus to rekindle economic growth, and are on the way to making fools of those who think currency as we know it will not always be society’s bloodstream. — Garth

Okay……..everyone besides banks and AIG raise your hands if YOU recieved a stimulus check with money created out of nothing but keyboard strokes. Anyone? Anyone at all?

Yeah……that’s what I thought. Right Zeus? Bark !! Good dog.

#152 Asse on 02.10.13 at 6:58 am

Chickenlittle, you do have a way with words kid;)

#153 jwkimba on 02.10.13 at 9:00 am

@JAY #21
“it is money you have to pay out one way or another in a place to live. sure, you can find a place cheaper to rent than a house payment but not that much cheaper”

Actually nowadays a LOT cheaper. Like half.

#154 jwkimba on 02.10.13 at 9:01 am

#126 DreamingInTechnicolour

If someone buys a place with CMHC insurance on a 25 year mortgage and e.g. then sells it 5 years after the purchase -How come a refund is not issued by CMHC issued for credit of the 20 years that the CMHC insurance is no longer required by the lender (homebuyer with less than 25% down) who was forced to pay for it ?

- — -

You don’t pay insurance premiums for all 25 years. Once you have more than 20% equity, you can usually renew without the insurance.

And if you sell, you cease to be a risk, and the policy is not needed anymore.
——————–

Not true in Canada, the premium is paid in full, up front, no refunds. in the USA it is paid monthly and when at 20% can be dropped. Not here.

#155 claudius emperor on 02.10.13 at 10:03 am

Those bullion-pumping web sites hate central bankers, because they have defeated economic collapse, used stimulus to rekindle economic growth, and are on the way to making fools of those who think currency as we know it will not always be society’s bloodstream. — Garth
———————————————
A very dangerous statement.
This makes this blog from now on a PM blog.

If someone insists on this blog being objective now we have to listen to the PM supportes side.
It won’t be pretty but again it is required to have a real objective view of the problem.

Everyone can slam real estate now. It took guts few years ago.

Not many people can advocate for PM now. This will change in few years.

No it won’t. This is not a gold blog and and I will not be publishing the crap that anyone can find on a thousand metal-maniacal sites. — Garth

#156 The Man From Nantucket on 02.10.13 at 10:04 am

#126 DreamingInTechnicolour on 02.09.13 at 8:11 pm
……………..-How come a refund is not issued by CMHC issued for credit of the 20 years that the CMHC insurance is no longer required by the lender……

I dunno. One more question that every buyer should ask their banker, but probably few even deign to think about.

Think of it like a “stupid tax”.

#157 claudius emperor on 02.10.13 at 10:04 am

Hope people will remember this piece of propaganda and will reference it in the years to come.

#158 Alain Savard on 02.10.13 at 10:05 am

#89 Ralph Cramdown

You said: Classic. This is OK advice for people who are financially independent. For most Canadians who aren’t, buying a house that doesn’t appreciate by at least inflation plus a bit will SERIOUSLY reduce their standard of living in retirement.

I believe this is exactly what Garth is saying. In many Canadian cities, buying a home has become a luxury that only financially independent people can afford to gamble on. For everyone else, it is like playing russian roulette.

#159 Stoopid Idiot on 02.10.13 at 10:47 am

#130 Ralph Cramdown

Ralphy my boy…. Gold is nothing more than a store of value and will never be worth zero. Money or Currencies are nothing more than a medium of exchange. All Fiat Currencies through out all recorded history have returned to their intrinsic value of zero. You are right as to say and I’ll paraphrase… you can’t eat gold… or silver for that matter (hey but you could eat lead). So in the event that one should go thru some sort of monitory event such as a credit crunch, LIBOR Freeze, Called Note, Death, Loss of Employment, Illness and so on, one could use tomorrows food at todays prices. Well Ralph, we all know on this Blog that the better part of Canadians have little to no savings or investments or pension’s. I think at that point emergency funds short of a credit card is the norm… hand to mouth is were we are to date and that bodes bad for a debt based fiat monetary system like ours…. I have lead as we all are tapped out even at these easy rates… As far as rates going up… no time soon. I would excluded the cheap show of 10 bases points because of improved economic indexes’…. Bull@$#&… But not to worry. I’m sure by now you have disregarded the store of value

#160 Snowboid on 02.10.13 at 11:11 am

Buyer Survey Astonishing…

http://www.youtube.com/watch?v=RJZ9WNCEThQ

Your Sunday chuckles brought to you by our almost favourite pumpers in the Okanagan, the Kriegs!

#161 Ralph Cramdown on 02.10.13 at 11:15 am

If someone buys a place with CMHC insurance on a 25 year mortgage and e.g. then sells it 5 years after the purchase -How come a refund is not issued by CMHC

Most of the risk is in the first few years anyway. Who defaults when they’ve built up 20% equity and they could just sell instead? It’s all priced in, and if you want refundable mortgage insurance, you’d be paying more up front. Remember, MI is only mandatory for people who don’t feel the need to save 20%.

Look at US PMI rates here http://www.hsh.com/calc-pmionly.html
$500k property with $25k down and a 30 year fixed rate mortgage? PMI will cost you $400 per month, which would add to 4.8% of the purchase price over five years.

I’m no cheerleader for CMHC’s behaviour, but this is basic theory of running an insurance company.

#162 Country Girl on 02.10.13 at 11:20 am

#40 Smoking Man on 02.09.13 at 12:46 am
“Did you know Obama forgave second mortgages here. Wasn’t published”

Yes, heard this on TV news in Florida in November. Many second mortgages (mostly in the form of HELOC) were forgiven so that these homeowners would be able to keep first mortgage payments up-to-date. It was also reported that a new slew of foreclosures were in progress.

#163 Wes Mantooth on 02.10.13 at 12:11 pm

Explain to me how real estate prices dont go up with inflation? This would be quite the economy….

Look around. — Garth

#164 Poochman on 02.10.13 at 12:17 pm

The Realtor is wrong “Now how about the $451,000 profit after spending $900,000 on home ownership?” She forgetting to mention that as a Canadian we have to service our mortgage debt with after tax income. The true cost of owning that $500K home over 25 years will be closer to $2,000,000!!!!

#165 walltiger on 02.10.13 at 12:20 pm

hawk

all your arguments are well written, hope you continue to share your ideas here.

#166 jess on 02.10.13 at 12:23 pm

desperate – lease option back “straw deal”

http://www.mfi-miami.com/2013/02/another-mfi-miami-client-spanks-gop-sugar-mama-linda-orlans-and-fannie-mae/

#167 jess on 02.10.13 at 12:26 pm

136 Canadian Watchdog

…. kwaterloo should rename itself quantum valley?

#168 happy renter on 02.10.13 at 12:32 pm

One of my co-worker bought a house here in a Victoria suburb in 2010.They paid $456,000 plus $16000 in property transfer tax and chmc fees.There assement came in at $396 000 for this year and now houses sell at least $15000 below assement value.Its sad that this happening to good ,hard working famillies which was peretrated by goverment and big banks.

#169 Drill Baby Drill on 02.10.13 at 12:33 pm

#147
The reason the USA is paying more for the Venezuelan oil is that Venezuela has many more options for exporting because it has a sea port. Alberta only has rail, truck and pipelines to the USA exclusively. The conversion of the TCPL gas line to oil is essential that way the St. John NB Irving refinery can ship our oil to multiple markets.
Building a sea port in the arctic is problematic due to year round access and the ecoterrorists will have a field day.

#170 polecat on 02.10.13 at 12:46 pm

#147 Bang on. Why can’t this Country get our stuff together? Refine it here, sell it cheaper locally then ship out the rest at profit. Wouldn’t this help our economy if energy is lower. I know I would have a few more bucks to spend locally, or heaven forbid invest or pay down debt. Here in N.S. we’re getting crucified by oil and electricity. Ironic given our economy and high taxes. Someday there wont be anything left to squeeze from this stone, already losing our young paople in droves and I don’t blame them.

#171 Westcdn on 02.10.13 at 1:17 pm

This speech by Dr. Carson, with Obama to the side, dealt with political correctness, dumbing down of education, the tax code and health care. He makes Obama squirm with some of his comments. It takes the good doctor about 3 minutes to warm up and then he starts to roll. http://www.youtube.com/watch?v=PFb6NU1giRA&feature=player_embedded

#172 Dr. Hoof Hearted on 02.10.13 at 1:36 pm

#172 Westcdn on 02.10.13 at 1:17 pm

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

Just finished watching it….excellent speech.

However, I think it is about 30 years too late.

#173 Ogopogo on 02.10.13 at 1:39 pm

#161 Snowboid

Thanks for posting that hilarious video. The father-son comic realtor routine is deliciously ironic too, given the Okanagan’s moribund economy and listings glut. The delusion is intoxicating (literally; it looks like the dad snorted a few lines of blow before the video).

Did anyone see the “Dwight Christmas” episode of The Office? The Krieg dad looks like Belsnickel, the jolly Pennsylvania Dutch version of Santa!

#174 Dr. Hoof Hearted on 02.10.13 at 1:47 pm

Re Alberta:

What will likely happen is what happened to BC and our NorthEast Coal development in the 1980′s.

Mega project, huge infrastructure build up. Japan was the main customer.

However, Japan had also “encouraged” other suppliers in other countries.

The market tanked…and Japan started demanding price cuts. Eventually, everything went flussshhh . Tumbler Ridge homes were sold off for $25,000…..

Re Alberta…I see far too much capacity and infrastructure being ramped up all over…..like now in the US. Oversupply and Demand will drop hence prices. Major problems , and we will see companies fold.

The whole thing is a major set up for future carpetbagging

#175 Grim Reaper/Crypt Speculator on 02.10.13 at 2:04 pm

Dr Wanker:

Wants 100 of these.(Don’t ask why)

http://www.liveleak.com/view?i=921_1360459783

#176 HAWK on 02.10.13 at 2:43 pm

#166 walltiger on 02.10.13 at 12:20 pm –

Thanks Walltiger. I believe we (in N. America) live in difficult times today, with somewhat more uncertainty than our predecessors faced, as our societies become less competitive in manufacturing and more service focused.

Thus choosing better investments also becomes more challenging. On the flip side, we have more access to information via the Internet, than past generations.

#177 Canadian Watchdog on 02.10.13 at 3:02 pm

#162 Ralph Cramdown

Most of the risk is in the first few years anyway. Who defaults when they’ve built up 20% equity and they could just sell instead?

Equity based on what? Principal or principal plus home appreciation? CMHC includes home appreciation as equity, which is why their >80% LTV portfolio dropped from 43% to 25% in one year! Link That's what CMHC means when they say homeowners added 'extra payments.'

#178 TurnerNation on 02.10.13 at 3:10 pm

Anyone using the term “Fiat Money”, I ignore.

We used dollars and cents. Another day another dalla Always have.
As did your parents, grand parents, great grandparents,
great-great, great great great, greatgreatgreatgreat, greatgreatgreatgreatgreatgreatgreatgreatgreatgreat …
well you get the idea.
You will go broke watching real people making real money. If you don’t kow how to make money, earn a return on capital, then you may be either stupid or lazy. So buy rocks.

It should be noted Jesus threw the money changes out of the temple. Maybe he was a metalhead. And look what happened to Him. ;-)

#179 TurnerNation on 02.10.13 at 3:24 pm

Read a magazine interview, 20-something says Stock Market is very risky and you must know lots about it.

Ok then. Look at this S&P chart since 1930. Pick a spot on the chart, anywhere, as an entry point.
Now look at today’s price. Tell me, have you made or lost money? Verrrry risky eh. Dividends, too.

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2013/01/20130116_SPX.jpg

(Ps I don’t visit this site only found it via google search. And why go seeking alpha when I have my own.)

#180 TurnerNation on 02.10.13 at 3:37 pm

Drill baby drill. I don’t usually side with the hard right, but any city or town which blocks the pipeline should have their own natural gas supply turned off. Because, you know, pipelines are like dangerous and stuff.

Go chop some wood, scuttle some coal as it’ll be a long cold winter. Progress. We need it.

#181 Snowboid on 02.10.13 at 3:41 pm

#174 Ogopogo on 02.10.13 at 1:39 pm …

I agree there seems to be some sort of intoxication involved, when he head back in April will have to search out an open house to see if they are like that in person.

Of course, reading the actual report is a bit more sobering than the raw excitement of the Kriegs, and seems to use the words conservative, prudent, etc in describing polled future buyers.

Also interesting in that almost 40% plan to spend less than $ 250K on their purchases.

Overall the report indicates a high rate of delusion, at least the version REMAX has published!

http://www.remax-western.ca/news/remax-canadian-homebuying-trends-report-2013-2014

#182 Ralph Cramdown on 02.10.13 at 3:43 pm

#160 Stoopid Idiot — Gold is nothing more than a store of value and will never be worth zero. Money or Currencies are nothing more than a medium of exchange. All Fiat Currencies through out all recorded history have returned to their intrinsic value of zero.

This is all true, and it’s all irrelevant, unless your name is Ri¢hie Ri¢h or Scrooge McDuck. In the real world, people of means do NOT have most of their assets in swimming pools full of slowly depreciating $100 bills. I don’t want my value “stored” — I want it out there working its ass off for me.

This http://krugman.blogs.nytimes.com/2012/12/08/rise-of-the-robots/ is the most interesting and profound chart I’ve seen in a long, long time. Increasingly, the spoils are going to the investors. So invest!

On the other hand, anyone can google up a long term inflation adjusted gold price chart and discover that gold has indeed lost half of its value and more in the recent past. Did it recover? Yes, eventually. So if you’ve saved up for your great-granddaughter’s dowry, gold will likely hold its value… ish. But if you might need the value before you die, there’s no guarantees. The best time to buy gold is when nobody’s talking about it.

#183 Smoking Man on 02.10.13 at 4:12 pm

Ah ha 176 posts on a weekend when everyone home. Sorry for being wasted in margarita ville…….

Wizzed through some posts….. Man you guys kill me.

BORRING…….

#184 claudius emperor on 02.10.13 at 4:21 pm

Those bullion-pumping web sites hate central bankers, because they have defeated economic collapse, used stimulus to rekindle economic growth, and are on the way to making fools of those who think currency as we know it will not always be society’s bloodstream. — Garth
—————————
Garth, on first read I thought that you are being sarcastic.

Money printing is sort of stealing, more money chase the same amount of goods. If they can contract that money supply I would apploud them, I think they would not be able to. Hence the inevitable inflation.

What stikes me the number of trully wacko idiots advocating for PMs. you are correct, it is very hard to beleive these idiots.

But if you listen to Geroge Soros, Jim Rogers, Eric Sprott it is entirely different story, these are men that know what they are talking about.

I agree that is idiocy to expect complete currency collapse, it won’t happen. But the inflation can bite.
As I said I have very little in PMs. But every time I read statements like the one above I start wondering whether I am making a mistake by not allocating more in PM. For now getting my dividends is very sweet as John D Rockefeller once said.

Worry more about deflation. — Garth

#185 jess on 02.10.13 at 4:28 pm

creepy easy

http://www.guardian.co.uk/world/2013/feb/10/software-tracks-social-media-defence

Watchdog accused of ‘burying’ own report
In an ironic turn, the watchdog responsible for safeguarding access to public information has been accused of “sinisterly” trying to bury its own report.

…”because private entities are exempt from the Freedom of Information Act, he added.

Watchdog accused of ‘burying’ own report – Telegraphwww.telegraph.co.uk › TechnologyYou +1′d this publicly. Undo
Sep 28, 2011 – In an ironic turn, the watchdog responsible for safeguarding access to public information has been accused of “sinisterly” trying to bury its own report. … Internet Eyes, a website which allows the public to view commercial CCTV cameras … The Information Commissioner’s Office (ICO), which oversees data
==============

https://www.eff.org/issues/do-not-track
http://news.cnet.com/8301-1009_3-9995207-83.html

#186 claudius emperor on 02.10.13 at 4:36 pm

Worry more about deflation. — Garth
————————————-

It won’t happen. It would be sweet but it won’t happen.

A tenet of this blog is a decline in real estate asset values, which is clearly happening in many markets. This is deflation. As you know, it decimated the US economy, and resulted in extraordinary measures by the Fed to combat it. Open your eyes. — Garth

#187 a prairie dawg on 02.10.13 at 4:36 pm

#155 jwkimba

- — -

I stand corrected.

#188 Canadian Watchdog on 02.10.13 at 4:57 pm

#183 Ralph Cramdown

I don’t want my value “stored” — I want it out there working its ass off for me.

Check out Venezuela's bolívars working its ass off for investors. Only now it's worth 32% less as of Friday's close.

Welcome to Currency Wars, were the once unthinkable happens.

#189 Ronaldo on 02.10.13 at 5:25 pm

#169 Happy Renter -

”One of my co-worker bought a house here in a Victoria suburb in 2010.They paid $456,000 plus $16000 in property transfer tax and chmc fees.There assement came in at $396 000 for this year and now houses sell at least $15000 below assement value.Its sad that this happening to good ,hard working famillies which was peretrated by goverment and big banks.”

A friend bought a small place on Saltspring in 08 for about $350m and he put $150m in renos. Just got his assessment, $290m……probably wishes he had rented.

#190 WHAT? on 02.10.13 at 5:45 pm

Hmmm…Interesting..so much for all that web site security you invested in. Maybe you should look at some 29C3 videos and learn about this stuff. Anyway back to reality…

“[Province of] Ontario Could Become Next Greece”
“In Worse Position Than California on Every Measure of Debt”
– National Post, January 31

There was no security breach. Server issues. — Garth

#191 WHAT? on 02.10.13 at 5:51 pm

Those bullion-pumping web sites hate central bankers, because they have defeated economic collapse, used stimulus to rekindle economic growth, and are on the way to making fools of those who think currency as we know it will not always be society’s bloodstream. — Garth

Hmmm….Interesting, lets see. Japan goes bonkers and starts printing unlimited, Venezuela devalues 46%, Korea starts talking about currency wars. Yes I agree U.S. dollar will strengthen but purchasing power will continue to diminish. Gold will win in the end, just to piss you off………

Not in my lifetime. I win. — Garth

#192 Canadian Watchdog on 02.10.13 at 6:05 pm

As you know, it decimated the US economy, and resulted in extraordinary measures by the Fed to combat it. Open your eyes. — Garth

They didn't fix anything, instead, they bought a little time and turned bond vigilantes in FX vigilantes.

Stop distorting a simple statement when it is offered. My words are correct. — Garth

#193 Furst on 02.10.13 at 6:35 pm

#85 JustTryingToProtectEquity on 02.09.13 at 1:20 pm

You may be right. Maybe a little. But it’s the only story I have and, given the general messaging of this blog, I think the story is a good one. A great one! I’m so happy we bought and sold when we did! I’m the best!
Is that better?
__________________________
Haha, yes much better! Say it like it is and be proud my man!

#194 Nancy on 02.10.13 at 6:54 pm

It’s a beautiful day in Vancouver. The sun is shining and there is some spring warmth in the air. It almost feels like summer. I actually saw two people wearing shorts. It’s definitely too warm for a jacket.

#195 JustTryingToProtectEquity on 02.10.13 at 7:26 pm

#195 Furst

I also think it’s important to let people know that it’s not just renters that are frequenting this blog. While we recently sold our house in Toronto, and are renting in the same neighbourhood, we still own another home.

I think Mr. Turner’s main message of diversification is often lost. He’s never said that it’s silly to own a home. He’s said that it’s dangerous to rely entirely on home ownership as your sole means of equity growth. Buying at the peak of any market could crush you.

Housing markets do correct and, judging from what’s happening in Vancouver and Victoria, and now in many parts of the GTA, it would appear that the slow melt is upon us.

#196 claudius emperor on 02.10.13 at 7:45 pm

A tenet of this blog is a decline in real estate asset values, which is clearly happening in many markets. This is deflation. As you know, it decimated the US economy, and resulted in extraordinary measures by the Fed to combat it. Open your eyes. — Garth
————————————————
Agree.
However it (the house prices bubble) could be seen as part of a bigger credit supercycle bubble.
The reason for it – the constant money expansion thru credit and the outsourcing of the western economies.
That is the bubble I warry about. As there is no fix for it untill the 2 very reasons for it’s existence are addressed. And they will not be addressed.

House prices will decline for a while. But how are going to cope with the world wide inflation of daily necessities – food, gas, drugs, health care, tuition fees?

So the overall topic is: inflation of real necessities, deflation of credit derivatives. I am sincerely hoping that the dollar as an ellastic currency that balances the forces of inflation and deflation won’t break.

If it does…

#197 Good authority on 02.10.13 at 7:46 pm

#172 Polecat
“Here in N.S. we’re getting crucified by oil and electricity. Ironic given our economy and high taxes. Someday there wont be anything left to squeeze from this stone, already losing our young people in droves and I don’t blame them.”
————————————————-
They sure are not heading to Ontario.
That excuse for a premier has now left the building leaving the highest hydro rates, useless windmills in every riding but those of the liberals and a debt load that is literally sinking what was once a great Province.

Your kids may pass thru Ontario but they are not staying. Sad…very sad.

#198 claudius emperor on 02.10.13 at 7:56 pm

were not these central bankers the same that did not see the housing bubble in first place? to be precise they actually caused it with the prolonged near zero interest rates.

#199 claudius emperor on 02.10.13 at 7:58 pm

the whole feeling the last few years looks like the controlled sinking of titanic: the band plays while the ship is sinking.

it does not help to know that China is net buyer of pms.

#200 claudius emperor on 02.10.13 at 8:04 pm

Big Ben did not see the housing bubble while I did.
Paul Krugman does not see inflation while I do.
And these are academics, professors some with Nobel prices in economy..

Makes me feel really smart.

#201 Ralph Cramdown on 02.10.13 at 8:11 pm

#190 Canadian Watchdog — Check out Venezuela’s bolívars working its ass off for investors. Only now it’s worth 32% less as of Friday’s close. Welcome to Currency Wars, were the once unthinkable happens.

I must be missing your point. In the 12 months immediately preceding devaluation, Venezuela’s main stock index went from 136 to 494. Now take off 32% and you’re down to 336 in constant Bolivars. Inflation there is running about 20% a year and the market returned 250% real. You’d rather be in gold?

Sometimes, in a dinghy race in a littoral area with strong currents and an unfavourable wind, the best thing you can do is discreetly drop your anchor (which isn’t against the rules) and go nowhere while the rest of the fleet temporarily sails backwards. The S&P 500 total return in the 12 months to Friday was 15.6%; the TSX was 6.4%. I don’t think this is one of those times.

#202 Sockeyemoon on 02.10.13 at 8:31 pm

#196 Nancy
It’s a beautiful day in Vancouver. The sun is shining and there is some spring warmth in the air. It almost feels like summer. I actually saw two people wearing shorts. It’s definitely too warm for a jacket.
—–
Maybe, with their high mortgage payments, they can’t afford pants!

#203 Devore on 02.10.13 at 9:00 pm

#126 DreamingInTechnicolour

How come a refund is not issued by CMHC issued for credit of the 20 years that the CMHC insurance is no longer required by the lender (homebuyer with less than 25% down) who was forced to pay for it ?

The risk is front-loaded.

And no one was “forced” to do anything. No one owes you a house of free money if you can’t even be arsed to save up 25% of the purchase price.

#204 Smoking Man on 02.10.13 at 9:06 pm

Never coming back to Canada, more white trash down here than I have ever seen in my life, gave out tones of loot. They got a good story to tell me they get paid….. The story’s I have heard. PRICELESS….

#205 Nostradamus Le Mad Vlad on 02.10.13 at 9:13 pm

-
A trooly magnificent day here, almost bikini weather (plus an increase in temps.).
*
Thought For The Day! (wrh.com) — “Every effort has been made by the Federal Reserve Board to conceal its powers, but the truth is that the Federal Reserve System has usurped the government. It controls everything in Congress and it controls all our foreign relations. It makes and breaks governments at will.” — Louis McFadden, Chairman of the House Committee on Banking and Currency
*
More Spending Cuts Leading to forced starvation? Daily Paul “The comments section is being flooded with trolls trying to ridicule the idea of state-issued currency, ignoring the fact that that is the system this nation was founded on. Methinks the money-junkies are in a panic that people around the world are seeing not only their scam, but how their scam inevitably leads to wars.” wrh.com; Short Clip Adversaries ramp up defense spending, Pentagon cuts; Snoop Doggy Dog EU super spies can cover pretty much everything; Few clips, all less than a minute Venezuela (possibly Argentina) hitting the skids; US imposes new sanctions on TROTW.
*
Google Helping authoritarian govts.; Russia (links in) More buster-bunny bombs; Social Media Software tracking people; 0:39 clip “And they call global warming skeptics “Flat Earthers.” and Pix Snow (like common sense) is a thing of the past — Gal of the Oracles; US Supreme Court 75 year old farmer vs. Monsanto; Obomba’sCare “But, but…you have to understand: Some companies ARE MUCH MORE EQUAL THAN OTHERS, when it comes to Obamacare waivers!!!” – Official White House Souse wrh.com; UK and France Horseshit scandal; Ammo Shortage Is there one?

#206 T.J. BONES on 02.10.13 at 9:29 pm

Sir Garth: I can’t decide if the picture is an ” invitation ” or an ” insult” ?

#207 Rather Concerned on 02.10.13 at 10:01 pm

#180 and #182 TURNER NATION:

#180: Go back far enough with your ” greatgreatgreat..” and you will arrive at gold.

#182: I’m incredibly disappointed to see you write something like that. Up until now, I have always respected your posts. Why such open contempt and hostility for people who don’t share your opinion? Are you going to sink to the level of pundit now?

#208 HAWK on 02.10.13 at 10:26 pm

#198 claudius emperor on 02.10.13 at 7:45 pm

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

Agreed about declining house prices and the fact that asset deflation may well extend to other real assets, at-least in the near term.

However, have you considered the possibility that the stock & financial markets of the world may also be “over-valued”?

The DOW is close to the highest it’s ever been and fundamental real growth of the economy is hardly super strong. The TSX is pretty high too.

Real estate might not be the only thing due for a correction.

#209 TurnerNation on 02.10.13 at 10:44 pm

#209 Rather Concerned

Thank god. I was afraid some would take offence to my Jesus comment.
Do you full your car with gas? Stop at once! Those dang pipelines again.
Practice what you preach. Shed some Luddite on the situation.

#210 TurnerNation on 02.10.13 at 10:49 pm

Bye, Candi.

#211 EIT on 02.11.13 at 9:27 am

#135 Ralph Cramdown on 02.09.13 at 9:41 pm

So we get to pick between the frying pan and the fire? And all I want is some bacon!

#212 Wes Mantooth on 02.11.13 at 11:38 am

“Explain to me how real estate prices dont go up with inflation? This would be quite the economy….

Look around. — Garth”

Deflationary pressure then… Housing is a significant component of inflation… Therefore, under a inflation targeting central bank you will see interest rate cuts in response to the low levels of inflation… So interest rates arent going to be pin that pops the bubble… in fact, they are going to start working to prop up consumer spending…

There is no free lunch…

Your advice is sound in response to the scenario you see ahead… Troubling though because it pretty much means we are headed for a terrible time for the Canadian economy and it suggests now is a very poor time to invest in the TSX.

The TSX has been an under-performer for some time already. This is why diversification is key to investors. Sadly, 70% of Canadians have 100% of their wealth in domestic assets. Big mistake. — Garth

#213 Captain Critical on 02.11.13 at 3:03 pm

McMansions aren’t made of particle board, they’re made of Oriented Strand Board (OSB) aka “chip board”. Get your act together fella.

Not the old ones. — Garth