Race to the bottom

bottom

Maria & BF, 29, rent a condo and lust for a semi. “I want us to get a semi together in Toronto under $600,000 over the next year or two in a good area, like the Danforth, with transit, parks, schools, etc.,” she says. Maria claims this blog is “addictive and funny,” but apparently she doesn’t take me seriously (it’s a common affliction). “I am concerned about missing out on a few years of affordable interest rates, if we don’t buy now.”

We’ll come back to the young hormones in a moment. First let’s talk about those cheap rates.

For all intents and purposes, those 2.99% five-year deals are gone, quietly squished after F had a hissy fit and muttered bad things about a race to the bottom. Yes, yes, you can still get a five-year closed loan for as little as 2.74%, but for that you’ll have to deal with a company that also pumps septics and fixes lawnmowers.

Mainstream lenders are all north of 3% again, with BMO the cheapest at 3.09%, Scotia at 4.99% and TD, CIBC and Royal at 5.14%. Yikes! But these are ‘posted’ rates. There are in-branch specials, online discounts and four-year fixed loans still at 2.99%. Speaking of Scotia, the five-year there is now 3.19%, which means the bank heeded F’s rant, even thought CEO Rick Waugh did some tough talking to reporters.

“As a minister of finance, he’s obviously concerned about the well-being of the country. However, to price products for businesses — whether it be banks or manufacturers — is not what I would have expected,” he said. “I understand why the finance minister is concerned about the Canadian economy, but I just philosophically don’t think government should be setting product pricing.”

On one hand, Waugh has a point. If left to their own competitive devices, the bankers would compete viciously for a dwindling mortgage market with the lowest-possible rates. But, on the other hand, we have Maria. She believes debt is good, so long as it gets her what she wants.

The two of them make a combined $120,000 and have a hundred grand in savings (good), all in GICs and savings accounts (not good), “because both of us are plain vanilla and like things safe.” Despite that, they want a $600,000 semi, instead of the condo they now pay $1,475 for. So, does a $500,000 mortgage bother her, especially given the likelihood of mortgage rates being far higher when the first renewal arrives?

Nope. Not if she get the house. “I am also concerned about prices for houses never falling in Toronto, and prices for more affordable houses in good areas shooting through the roof (which is already happening with all semi-detached homes in the 416). I want us to settle down and have a place to call our own.” Aren’t twenty-somethings cute?

At the same time, Maria can see the market shows distress. One-bedroom condos in her complex average $325,000, with $500 in monthly fees. “There are 21 units listed for sale in our building alone right now,” she admits.

This is what cheap debt does. It builds immunity to risk. Maria and her squeeze are so risk-averse they keep their money in cadaverous GICs and comedic bank accounts, and yet think nothing of taking on a half-million in loans for half a house, at a cost which will only increase. Besides, what happens when they have a kid, drop one salary for a year, and add $1,500 a month for daycare?

It’s ironic without end that F was the guy who fathered 0% down and 40-year loans while telling everyone it was safe to buy, and now bullies banks into raising rates. More than anyone, he instilled in Maria a belief that no amount of debt is too much when it yields a house. So now that a credit bubble’s replacing the real estate gasbag, his legacy has blossomed. Houses people can’t afford. Debt they can’t repay.

Of course, the little pecker’s right to mash the bankers. Teaser-rate mortgages helped destroy the US housing market. Why should it be any different here? The economic cost of cheap loans is staggering.

Meanwhile Maria asks. “My question for you is, should we buy a house over the next one to three years? And if not, when do we know it’s time to buy?”

Buy when you can afford it. Buy when you understand the risk. Buy when you need a house.

Right now, lady, you’re zero for three.

201 comments ↓

#1 dave on 04.29.13 at 7:46 pm

First time I seen that shirt!

#2 TurnerNation on 04.29.13 at 7:50 pm

Finally a picture of Smoking man!

#3 Derek R on 04.29.13 at 7:53 pm

On the other hand, renting is Just Fine.

#4 GTA Girl on 04.29.13 at 7:55 pm

Poor Maria, she obviously cannot read.

I wouldn’t touch any semi-detached Danforth home. Bad wiring, leaky roof, crawl space mould basements, sewage lines a mess. Even if your unit’s previous owners did upkeep, it’s possible the owners on other side did diddly.

In the world of make believe Condos-For-Everyone, the BILD assoc & some of their loyal developers buddies are in Copenhagen this week. They are touring green buildings, low rise architecture & sustainable municipal initiatives.

10 years too late, of course.

Our favorite condo developers think a green logo & Tesla docking station in every parking space will continue to make them billions.

Anything of value they see on this trip, will be twisted turned & milked for maximum profit, or ego sopping publicity.

#5 Boombust on 04.29.13 at 7:56 pm

Maria and her BF read this blog?

Duh.

Something ain’t penetrating.

#6 David w on 04.29.13 at 7:58 pm

Race to the bottom is right. I was just watching property virgins and a guy bought a brand new 4000 square foot house in Atlanta for about $160k. Now that’s amazing! If we had the hear, life would be sweet cuz of the small mortgage and all the extra disposable income for living life.

#7 Alex on 04.29.13 at 7:59 pm

Garth, what is the average gain from ETFs for the last 5 years ? I will compare that stat to the fixed 5-years morgage. Risk management.

#8 mortgagebrokeron on 04.29.13 at 8:01 pm

touche!!!
These prices are tooooo high!!!

#9 Nemesis on 04.29.13 at 8:06 pm

LayeredSubtext… And a splendid background.

Another fine LeaderIllustration.

#10 TurnerNation on 04.29.13 at 8:12 pm

Local mort-gage broker’s sign today: 2.50% variable.

As this blog suggests people rarely stay longer than 5 years.
Within the past year, 30-40 some-things:

– 3 marriages, 3 SFHs purchased. One condo kept as rental.

– 2 divorces. One Semi sold. Other were renters.

#11 Tom Vu on 04.29.13 at 8:16 pm

DELETED

#12 Bill Gable on 04.29.13 at 8:21 pm

Once again, I would like to hope that we could introduce a class to High School students called “MONEY”.
Interest rates, the real word, and how debt is a four letter word.
This poor woman is so out of touch reality, she probably thinks that the Maple Leafs will win the Cup!

#13 Bidding wars debunked -GTA edition -today Peel region on 04.29.13 at 8:22 pm

Some of you might have already read my posts about the so called bidding wars in Toronto. Recently I had the curiosity to look outside T.O. to see what is going on with the so called bidding wars and sales ..so I looked at GTA

I will post here the stats and the maps for: York Region Durham Region Peel Region Halton Simcoe

The sales will be shown for the entire region but the heap maps will be just for one of them (one per day)

Here is the Peel region

http://recharts.blogspot.ca/2013/04/gta-burbs-bidding-wars-debunked-peel.html

and the regular T.O. heat map and “bidding wars”

http://recharts.blogspot.ca/2013/04/to-bidding-wars-debunked-april-29.html

PS: do the BB codes work here ? (ex [link=http://recharts.blogspot.ca/2013/04/gta-burbs-bidding-wars-debunked-peel.html]GTA bidding wars[/link]

#14 Smoking Man on 04.29.13 at 8:28 pm

#2 TurnerNation on 04.29.13 at 7:50 pm

Finally a picture of Smoking man
……………….

Not cool guys, who sent you that pic. Asking permission to post it would have been nice… O well…

I like what’s over my left shoulder… :)

#15 Mike T. on 04.29.13 at 8:29 pm

‘It’s ironic without end that F was the guy who fathered 0% down and 40-year loans while telling everyone it was safe to buy, and now bullies banks into raising rates’

ironic indeed

the two events happened 6 years apart

that’s like 40 lifetimes in todays insta-twitter-world

average canadians cannot make the link and see the behind the scenes policy manipulation that allowed all the profit in real estate to be taken for a generation

oh well, maybe it’s more fun to live like that….probly not but I’m going to try and see things more positively

#16 T.O. Bubble BOy on 04.29.13 at 8:30 pm

@ #10 TurnerNation on 04.29.13 at 8:12 pm
Within the past year, 30-40 some-things:
– 3 marriages, 3 SFHs purchased. One condo kept as rental.
– 2 divorces. One Semi sold. Other were renters.

Used to live in a semi… your observations made me think of one day that I was chatting with the neighbour, and he commented on living in a semi-detached place:

“When you get divorced, they only let you have half a house!”

#17 T.O. Bubble Boy on 04.29.13 at 8:31 pm

By the way – hope no one owned Extendicare shares today! (EXE down almost 30%)

#18 John on 04.29.13 at 8:36 pm

GTA girl is right, very few of the Danforth area homes have been maintained, repaired or even built correctly. So many are a mess. Have a look at the Toronto Police website statistics for crime. Thefts, b&e’s and school issues are rampant all over the divisions that surround it. Noisy bars, drunken losers going home at night….er..um you know what you’re right Maria, go ahead and buy…good luck!

#19 dave on 04.29.13 at 8:39 pm

Smoking man, so does this mean you like older, hog riding type men?

#20 prairie person on 04.29.13 at 8:40 pm

A few weeks ago, I was in the local TD branch. They had printed out 2.74 mortage offers at every teller’s station.
Today, when I was there, all those had been taken down. However, there are still lots of greater fools out there. I know someone who works at a bank pushing mortgages out the door. Making 300,000 a year on commission. A relative, 40s, he and his wife probably make 70k between them, had 60k down, bought a house nine months ago for around 450,000. 390,000 mortgage. Don’t know who financed it. I cringe. Gotta have that house. All that matters is can they make the payment.

#21 tigerbaby on 04.29.13 at 8:42 pm

> … introduce a class to High School students called “MONEY” …

isn’t the material already covered in math or home economics classes etc. I don’t see the need for a dedicated class for topics like interest rates and debts. besides do you really think teenagers will pay attention in this “MONEY” class?

#22 Ballingsford on 04.29.13 at 8:46 pm

Garth, I recognize that picture of you. You were interviewing for Amazons at the time a number of years ago! You’re still looking great!!! You haven’t aged a bit since then, except that your six packs are now more defined!!!

Where are you working out Tiger? What’s your secret???

#23 FTP - First Time Poster on 04.29.13 at 8:48 pm

Apparently, there is no CDN Housing Bubble.

http://www.businessinsider.com/no-canadian-housing-bubble-2013-4

bahahahahahaha – worst article for 2013

#24 Ball'n Chain... A House full of Treasures on 04.29.13 at 8:51 pm

“20 years ago we had Johnny Cash, Bob Hope, and Steve Jobs.

Now we have No Cash, No Hope and No Jobs

PLEASE

Don’t let Tom HOUSE die.”

Even with a market on Steroids in our “World Class” backwater, the “The American Dream Is Shifting Away From Home Ownership”

http://www.theatlanticcities.com/housing/2013/04/home-ownership-no-longer-essential-component-american-dream/5207/

#25 Freedom First on 04.29.13 at 8:56 pm

Maria, I will share the reason why people end up being old and poor. When you are young, don’t learn anything about anything, gather no knowledge, only operate “out of your mind” and just make stupid decisions. Maria, you and BF are at a major crossroad, whether you know it or not.

#26 Milionaire Machinist on 04.29.13 at 8:57 pm

#14: “I like what’s over my left shoulder… :)”
Oh, you mean that older, chubby GUY in the sleeveless shirt? Lol!!!

#27 Paully on 04.29.13 at 8:58 pm

Does anyone know if F sold any property recently, and thus profited from the giant gas-bag of RE that he created?

#28 Joejoe on 04.29.13 at 8:59 pm

#20… there are no bank employees pushing mortgages making 300k a year……. More like 30k at best….. Brokers make the big money…. Bank employees are amateurs

#29 erebus on 04.29.13 at 9:00 pm

Maria, why do u bother asking garth when you already know the answer to your question…. The time to buy is right now, for all the right reasons that you have in your head. So go ahead and do it. Just. Buy.

#30 Dorf on 04.29.13 at 9:00 pm

The reason girls demand to buy instead of rent is the perception that no wealth is being created in their favor should the relationship end (in a renting situation). In the “buying” situation, they perceive that after 3 or 4 years with Bobo, she can turf the dude and walk away with a healthy downpayment on a place of her own, and not have to deal with what anybody else thinks. She doesn’t want to hear Garth’s sabotage of her only plan to get ahead in life. She also doesn’t want to *la-la-la-la-la-la-la* hear Garth say anything about there being no lump sum cash payout for her when she terminates the charade…..er, relationship. That will simply not do. Make it happen.

Shame on you Garth, for not telling people what they want to hear, and smashing all their dreams of endless free money and fairy tale windfalls.

No wonder all the girls cheated off me in Math class.

#31 Christopher Lackey on 04.29.13 at 9:03 pm

Garth, can I ask you a question? Why do you tell people not to invest in individual stocks unless they have seven figures? What different rules of logic and risk apply to four or five figures that don’t apply to seven? Can stocks be part of a balanced and diversified portfolios if investors understand the risk that come with them?

Coca Cola up 18% in the last three months

Diversification reduces risk. You need lots of money to achieve that if buying equities. Index ETFs are vastly superior for most people. — Garth

#32 PokerCat on 04.29.13 at 9:04 pm

@ tigerbaby “isn’t the material already covered in math or home economics classes etc. I don’t see the need for a dedicated class for topics like interest rates and debts. besides do you really think teenagers will pay attention in this “MONEY” class?”

I think a dedicated class in high school covering basic personal finance is far more useful to the majority of teenagers than calculus…most of us will never use calculus.

#33 Coho on 04.29.13 at 9:04 pm

Someone should tell Maria that house prices go down when interest rates go up. So if it is the low interest rate she wants to get in on, then she’s getting in on a house that she’ll pay 100K to 200K more today than she will when rates go up. Monthly carrying costs would probably be similar, but the amount owed on the mortgage would be much less, thus fluctuations in interest rates over the years would have less impact. And if they’re both currently squirrelling away savings every month, then why not remain perched and patient for a more opportune time to buy.

Don’t listen to the in-laws. So many people are ridiculously extrapolating previous house price increases into the future. House prices are generally 5 or 6 times more than they were in the 80’s so they think that in another 25 years they’ll be worth 6x more. This while the middle class is being gutted. This with decreasing job security. This while lifetime jobs are vanishing and people are changing jobs/careers every few years if they can even find another.

#34 Smoking Man on 04.29.13 at 9:04 pm

#19 dave on 04.29.13 at 8:39 pm

Smoking man, so does this mean you like older, hog riding type men
Ha ha

………….

Damn dyslexia, got it backwards again, ment right shoulder….

The blonde darn it…..

#35 Hammertime on 04.29.13 at 9:09 pm

Five reasons I’m not worried about a Canadian housing bubble:

http://www.thereformedbroker.com/2013/04/29/five-reasons-im-not-worried-about-a-canadian-housing-bubble/

Exactly what I’d expect from him. — Garth

#36 Julia on 04.29.13 at 9:17 pm

#4 GTA Girl on 04.29.13 at 7:55 pm
Not to mention termites, lead pipes, low water pressure and poor air quality.

#37 R. Olausen on 04.29.13 at 9:24 pm

I would like to thank Flaherty and Carney for my 35 year mortgage. It was the best idea they ever had. It’s all good. Thanks Mr. Turner for your platform and I will give you a tip.Do not bet against Alberta.

#38 tigerbaby on 04.29.13 at 9:24 pm

> … a dedicated class in high school covering basic personal finance is far more useful to the majority of teenagers than calculus …

I’m worried that these teenagers will have no money to manage in the future if we allocate more resources to these type of classes instead of science and engineering …

perhaps CMHC insurance requirement should have an exam component on personal finance? :-O

#39 Randy Randerson on 04.29.13 at 9:26 pm

Jesus Christ! Why are there so many dumb 20 somethings out there. I wish I could just smack her on the head to wake her up.

Or I could just play devil’s advocate and tell her to jump into RE, head first. Who cares about spending her next 40 years and youth paying off for a house. She’ll be 60’s by then and hopefully dementia will take hold and she won’t have to worry about retirement.

#40 John on 04.29.13 at 9:27 pm

DELETED

#41 Bottoms_Up on 04.29.13 at 9:28 pm

120k salary = historical mortgage of max 420k (better if 360k).

100k downpayment.

Means they can buy a place for 460-520k. Nothing more.

#42 Julia on 04.29.13 at 9:30 pm

#18 John on 04.29.13 at 8:36 pm
Oh you’re right. I forgot about the car and house break ins — we stopped locking the car doors to save on replacing windows. And my house was broken into with a boulder through the back door while we were asleep inside.

#43 gladiator on 04.29.13 at 9:31 pm

@14 Smoking Man:

careful with left-right, my friend.
I am 99.999% sure you meant you like what’s over your RIGHT shoulder, not your left one. From your previous posts, I can pretty confidently say you like babes, not boiz.

#44 blok existentialist on 04.29.13 at 9:35 pm

#24, your statistical information on the new American attitude towards renting (really interesting) makes me wonder if the U.S. government is yet making any shifts in taxation.
I keep wondering how Canada’s government, particularly municipalities in charge of hands-on infrastructure, will respond as more and more Canadians rent … either by choice or through economic necessity.
Just what will happen with less and less money coming from property taxes for schools, sewage/water services/upgrades and so on?
I have seen nothing on this blog other than a loose assumption or two that the unlucky remaining homeowners will somehow end up paying the whole shot. And they likely will. At first.
But that’s not Canadian democracy in this century … won’t we all eventually get smacked with higher taxes for the services that we all use? I don’t find it hard to picture a new tax for renters being worked over in a political backroom somewhere at this very minute. Nuh, (bad word in Carrier dialect) maybe it’s been ready to go for two years.
Or will all public services eventually change to pay-as-you-go (e.g., your kids go to public school, you pay)?

#45 Bottoms_Up on 04.29.13 at 9:37 pm

#6 David w on 04.29.13 at 7:58 pm
—————————————
You’re forgetting that that homeowner in Atlanta pays probably $6000/yr in property tax…and probably has to budget $10,000/yr for health care costs…..and dodge people with guns wherever they go….

#46 Uwinsome on 04.29.13 at 9:42 pm

I’m listening to the Leader’s Debate for BC…

We are so screwed!

#47 Good Authority on 04.29.13 at 9:46 pm

“More than anyone, he instilled in Maria a belief that no amount of debt is too much when it yields a house. ” Garth
—————————–
A little unfair given the rest of the story.

#48 None on 04.29.13 at 9:52 pm

Did you just refer to Canada’s finance minister as a ‘little pecker”?

#49 Nodebt on 04.29.13 at 9:58 pm

Hey Maria, why don’t you ask your parents what they think of you getting a 500k mortgage? My parents would of told me I was a dumb f..k!!

#50 MB on 04.29.13 at 9:59 pm

Garth,
Just because Canadian banks and REITs are fundamentally (and financially) safe even during a national housing crisis doesn’t mean their stocks are safe.
Markets are fundamentally driven in the long term but emotionally driven in the short term, so their stock could be volatile just because people THINK they are at risk.

#51 D.D. Corkum on 04.29.13 at 10:02 pm

“Garth, what is the average gain from ETFs for the last 5 years ? ”

—-

Dumb question. Not a single person would invest in an equally weighted basket of “all ETFs”.

#52 Mister Obvious on 04.29.13 at 10:02 pm

Its a constant source of amazement to me how many people queue up to hear Garth’s advice but are loathe to act upon it.

On the other hand, millions love the pope but quietly choose to ignore him as well.

#53 Mister Obvious on 04.29.13 at 10:04 pm

#48 None

“Did you just refer to Canada’s finance minister as a ‘little pecker”?”
————————-

It’s a term of endearment.

#54 Craig on 04.29.13 at 10:05 pm

It seems to me, in reading this blog that the only ones screaming SELL are the ones that rent. The only ones predicting a housing crash are renters…trying to convince themselves that the have done the right thing.

70% of Canadians own homes….that’s a lot of stupid people. And the other 25% are saving up for one, leaving 5% RENTERS.

The renters don’t share with you the horror stories of renting – scumbag landlords – moving every year whether you like it or not – crap houses that the landlord refuses to fix – their stock market losses when the market crashes, etc. etc.

We just hear the rosy stuff, kinda makes one wonder.

During 9/11 how’d you do in the market or 2008…during those periods my house remained the same or increased in value….while markets crashed.

If you guys are right, why isn’t everyone selling or a large % selling. Where are the huge increase in listings? I don’t see it so are you guys just that much smarter than the rest of Canada?

Or are you wrong?

You’ve been beating this drum for some time now.

Rates keep dropping and my house keeps going up.

What the renters fail to mention is the rent they’re paying is to a SMART homeowner who has YOU paying off his mortgage.

For the last 5 years my house has gone up an average of $25K per year. ($125K)

If you’re renting you’ve paid (lost) roughly $25k per year. ($125K)

My numbers are facts whereas as your numbers are just predictions that may never happen. Folks here also said rates would take off in 2013…then 2014…now the latest is 2015.

Hmmmmmmmmmmmm

If rates stay the same or drop, my house price is staying the same or going up.

Pure logic

The only facts you ever present are Vancouver…”look what happened there…blah blah blah.” Vancouver was a huge fraud, based on Asian money. You watch. It is not a reflection of the rest of Canada like some here are trying to portray it as.

You can own a home AND invest in the market. Win win. It doesn’t have to be one or the other.

#55 AK on 04.29.13 at 10:05 pm

#14 Smoking Man on 04.29.13 at 8:28 pm
“I like what’s over my left shoulder… :)”
——————————————————————–
That’s the first thing I noticed. Yum…

#56 k on 04.29.13 at 10:09 pm

Hey Smoking Man. I hope you mean you like whats over your RIGHT shoulder unless you like the dude on the otherside ! Just Sayin’ Its all about perspective !
Remember if the person is facing you as apparently You are things are reversed ! Keep Smokin’

#57 Dean Mason on 04.29.13 at 10:13 pm

A $325,000 condo that has a $500 a month in condo fees is $6,000 a year.The $6,000/$325,000=1.846% per year.If you had $325,000 in mutual funds with a 1.846% MER people complain and scream but because it’s a condo people accept it.

Property taxes are probably another $3,000 a year in Toronto so $9,000/$325,000=2.769% per year.This is like you depositing money in a 5 year GIC and paying the financial institution 2.769% per year instead of receiving 2.769% per year but it’s your deposit not the financial institution’s deposit.

This is how people can got 40 year amortization mortgages with little to no money down and then be surprised that it was a bad financial decision when they can’t afford the house or condo anymore.Do people think anymore about what their doing.

They make decisions based on what other people are saying and doing.The herd mentality is alive and well.It does not matter what it is, people will find a way to mess up their financial situations if they do not make decisions for themselves based on numbers,facts and reality.

#58 Craig on 04.29.13 at 10:15 pm

#44 blok existentialist

I keep wondering how Canada’s government, particularly municipalities in charge of hands-on infrastructure, will respond as more and more Canadians rent … either by choice or through economic necessity.
Just what will happen with less and less money coming from property taxes for schools, sewage/water services/upgrades and so on?

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

Who do you think the renters are renting from……let me help you…HOMEOWNERS…who pay all the taxes you’re referring too…while you renters pay them.

Renters seem to think they’re renting from some fictitious clan of imaginary beings that don’t pay taxes, etc.

I’m really starting to think the renters are totally confused and worried that they are the ones that have made the serious mistake.

I own a home, RRSP’s, TFSA’s and cash accounts and I’m doing just fine.

To the folks that keep trashing Canada and say the US is so cheap to shop, so cheap to own a home, then get outta here and move south.

Ask your US RE agent if the home comes with Kevlar vests and BP glass.

Happy hunting….I mean hunted.

#59 Ball'n Chain... A House full of Treasures on 04.29.13 at 10:16 pm

#44 Property owner gets taxed and taxes are part of landlord’s overhead. So the applicable property tax is passed on to the tenant as part of the rent .

As taxes increase so will rents. Otherwise there is the good old poll tax

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

#60 45north on 04.29.13 at 10:17 pm

Buy when you can afford it. Buy when you understand the risk. Buy when you need a house.

Right now, lady, you’re zero for three.

Maria cannot afford it, she has no idea about the risk, no idea. Here’s Jim Cramer “no idea” at the end he talks about 7 million Americans losing their homes. They actually did:
http://www.youtube.com/watch?v=TaKnDMv6ceg

I want us to get a semi together in Toronto under $600,000 over the next year or two in a good area, like the Danforth,

with a $500,000 mortgage! Maria you cannot afford a 10% drop. You will fold like a tent.

#61 Smoking Man on 04.29.13 at 10:18 pm

#43 gladiator on 04.29.13 at 9:31 pm@

14 Smoking Man:careful with left-right, my friend.I am 99.999% sure you meant you like what’s over your RIGHT shoulder, not your left one. From your previous posts, I can pretty confidently say you like babes, not boiz.

…………

That is 100 present correct, but If I was on the other team.. I would have no problem sharing that info.

If fact I like hanging out with gays….. Most fun, creative and real people you will ever meet…. No wall, they say it like it is.

I respect them emensly for that…….

I despise people that bash gays and lesbians….

#62 Calgary Car Guy on 04.29.13 at 10:18 pm

Posts about women like #30 from Dorf today and from DonDWest from a few days ago are a bit over the top and humorous to a point. However, I must say they have a certain ring of truth for me. I don’t “dislike” women but now, at 55 and divorced they sure scare the crap out of me, lol. Reading this great blog for the last 3 or 4 years hasn’t helped either. Who really wants to buy?-the woman. Who lusts after granite and stainless? The woman. I read posts from guy after guy lamenting how their wife or GF is on them all the time to buy,buy,buy. Women, again generally speaking, just seem to be far more materialistic than guys. Gotta “look good” you know. I guess I’ll probably get flamed for this post but, whatever–I calls ‘em as I see’s em.

#63 YYC on 04.29.13 at 10:22 pm

That picture is hilarious…!!!

#64 Timbo on 04.29.13 at 10:22 pm

http://afl.org/index.php/Download-document/847-Temporary-Foreign-Workers.html

“But the untold story is that much of the new job
growth is overshadowed by the arrival of thousands
of Temporary Foreign Workers every year. During the recession, Calgary lost 5,000 jobs but saw the arrival of 8,888 new Temporary Foreign Workers. The Harper government approved 9,155 work permits for Temporary Foreign Workers while 50,900 Calgarians were unemployed.”

ouch…this is not going away anytime soon…….

http://www.fasken.com/bell-canada-in-10-year-45-billion-outsourcing-contract-with-cgi/

“Represented Bell Canada in a 10-year IS/IT outsourcing contract entered into with CGI, then reported to have a value of $4.5 billion and to be the largest outsourcing contract awarded in Canada ”

Now that is going to help R/E prices….isn’t it?…

#65 angel on 04.29.13 at 10:27 pm

The war on savers ,CBC news is talking conspiracy garbage them tinfoil hat dummies
http://www.cbc.ca/news/world/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html

#66 AisA on 04.29.13 at 10:27 pm

#21 tigerbaby on 04.29.13 at 8:42 pm
“do you really think teenagers will pay attention in this “MONEY” class?”

I would bet dollars to doughnuts it would be the only class they are interested in.

As far as I can tell, the problem with teenagers today is not that they think they will live forever as a generation or two ago. The problem with “problem” teenagers is that most of them don’t believe they will live to see 30.

Have you seen what “Adults” are spending 500,000 dollars on lately?

#67 Ballingsford on 04.29.13 at 10:31 pm

Maria, heed Garth’s words. Unfortunately, its easier said than done with the younger generation now.
You are a bit of a princess to have the thoughts you are having with having 120 g’s a year between u & the bf and only 100 grand in saving and want to get a home for $600, 000 and you’ll not be able to call your own for about 30 years. You will own a mortgage, not a home. You’ll be a superstar to your friends while you worry about how u r going to pay the bills, let alone the food.

If I may borrow a qoute from John Crosby and edit the name for your bf to use “Buy me a tequila Maria and lay down beside me.”

A house does not make a home!

#68 Okotokian on 04.29.13 at 10:36 pm

Smoking Man,

That dude’s not blonde.

Tonight, you’ve proved that you’re ;
1. dyslexic
2. Colorblind
3. Attracted to dudes on hogs
4. Stupid

#69 angel on 04.29.13 at 10:43 pm

Boeing to lay off 700 engineers . Tomorrow I bye boeing Shares easy 4-6%
http://www.bizjournals.com/seattle/news/2013/04/18/boeing-to-lay-off-700-engineers-in-2013.html?ana=e_abd&u=slyE44urV4bo6o4GHwHIqylywCD&page=all

#70 Stupid Canucks on 04.29.13 at 10:46 pm

Bottoms_up: This financially illiterate person Garth has made a case in point for should not be buying anything north of 3x at the most their annual income by California marginal tax standards, which, btw, allows for 100% tax deductibility of the underlying mortgage interest expense. This would mean a home price, and not a mortgage, of not more than $360,000. That’s why they are where they are now and renting for whatever they are renting now. If mortgage rates were anywhere near historical longrun averages, Maria wouldn’t even be halucinating in her wettest dreams of buying a place that’s twice more expensive she and her milquetoast of a boyfriend could ever afford.

#71 Toronto CA on 04.29.13 at 10:58 pm

#45 Bottoms_Up on 04.29.13 at 9:37 pm

Really? You sounds so backwater Canadian in that response it is pretty pathetic. You know people get shot in Toronto? I live downtown and work/live near the Eaton Center where a young kid got hit in crossfire in the food court on a Saturday afternoon last year. A month later at a block party leaving 2 dead and 22 injured. And media across the world asked what the hell is going on with Toronto?

We’re not immune to people stereotyping about gun violence. Atlanta is not a dangerous city to live in or work in. It is not Somalia as you think it is by stating that the guy who lives there is constantly dodging bullets on his way to work.

As for health care, this is all over the place and anecdotal. I do know that the hospitals I’ve had to use in Toronto for lithotripsy (St Mike’s) was extremely dirty, urine stinking (even outside of the kidneystone clinic) and my ‘emergency surgery’ had a 60 day wait list. Was this free? Well I paid a hell of a lot more personal and consumption than any of my family in the USA with my level of income I can say that.

I’d also likely be covered by an employer plan, as a healthy non-smoker with no pre-existing conditions my premiums would likely be pretty low, $200 a month or so. I have seen some of the new hospitals there as my sister had 2 babies in Austin Texas. They were immaculate and beautiful. Texas has no State Inome Tax by the way. Just Federal.

Truth is that Canadians are very gauged, and the price of real estate relative to rents and incomes and to the USA house prices needs to come back into line. The sooner the better.

#72 DJB on 04.29.13 at 11:00 pm

The race to the bottom would not be so drastic if the banks could not securitize and sell the mortgages courtesy of CMHC. If they had to keep the mortgages on the books the rates would not be so cheap.

#73 Lactose the Intolerant on 04.29.13 at 11:08 pm

Corruption coming to light. From Australia: http://tinyurl.com/btcumzl and from the U.S.A: http://tinyurl.com/cd3ezpq. I wonder what will be written about Canada when the tide goes out?

#74 Shortlilpecker on 04.29.13 at 11:10 pm

The biggest short interest as a percentage of a bank’s total shares outstanding belongs to National Bank of Canada. The bank also saw the biggest increase in shorts over the most recent 30-day period for which there are comparable figures.

The short interest jumped from 4.7 million shares on March 15 to 8.9 million shares on April 15. That’s 5.5 per cent of the bank’s shares outstanding.

And this could sum up our stock and bond markets worldwide, the mad rush to chase yield:

“This is what cheap debt does. It builds immunity to risk.”

#75 George on 04.29.13 at 11:13 pm

Excellent article and video by the CBC. The video (link) which is in this article was broadcast on this evening’s CBC National News.

“Quietly, without much public fuss or discussion, a new ruling class has risen in the richer nations.

These men and women are unelected and tend to shun the publicity hogged by the politicians with whom they co-exist.”

http://www.cbc.ca/news/world/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html

#76 Smoking Man's Old Man on 04.29.13 at 11:19 pm

I wonder if I should spoil it for Maria and BF and tell them how the fairy tale ends….

#77 NotAGreaterFool on 04.29.13 at 11:28 pm

Check out on CBC The ‘monarchs of money’ and the war on savers. Interesting series.

http://www.cbc.ca/news/business/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html

#78 Elmsley on 04.29.13 at 11:31 pm

Hey G, what are your comments on this whole QE?

#79 Craig on 04.29.13 at 11:35 pm

You would need to be seriously deluded to “lust” after a Semi. Wow.

Has she ever lived in one? It’s all good until a new neighbour moves in with 3 brats who stomp up and down the stairs next door and everything in your house shakes and when you ask them to stop for at least one hour they shrug because they don’t actually speak English.

Good luck with that.

#80 Uh Oh Canada on 04.29.13 at 11:40 pm

Garth- quick suggestion: Perhaps you can gather a few blogdogs (who are wannabe journalists) from each province to update us on the upcoming real estate meltdown. It would be interesting to know some details on the bloodbath to come, including some vulture stories.

#81 KG on 04.29.13 at 11:52 pm

#35
Exactly what I’d expect from him. — Garth
——————–
Garth, you have serious competition. I had a better laugh reading that link than your post today.

#82 in mississauga on 04.29.13 at 11:53 pm

Hi Garth,

What are your comments on this?

http://www.cbc.ca/news/world/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html

#83 Moosey on 04.29.13 at 11:53 pm

Garth,

I would be interested in your thoughts on this…

http://www.cbc.ca/news/world/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html

#84 Envee on 04.29.13 at 11:58 pm

Garth, you did a disservice to this housing market. If it’s not for your glorious blog, half the readers here would’ve bought a condo, townhouse, semi or detached and the housing market would have crashed by now.

#85 ARTLUKM on 04.30.13 at 12:00 am

@Bottoms_Up #45

I don’t know what the exact tax rates are in Atlanta and the surrounding suburbs, but a 4000 sq ft house in the GTA would carry more than $6000 in property tax, so your point is moot when it comes to property taxes… There is still a huge savings on the purchase price.

Worried about gangs/thugs in Atlanta?… Well you have a point there, but there are many other places in the US now where prices are similar and crime is no more of an issue than it is here.

As for health care, are we talking about $10k for one person or $10k for a family of four? I didn’t see the TV show, but if it’s a guy living with his gf, then $10k would buy a much better health care package than what we all get in canada. If it’s $10k for a family of four, then that might be a fairly normal plan, albeit probably still better than what we get. Keep in mind that in most states people are paying less taxes too. Furthermore, in order to afford a $700k 4000 sq ft house in the GTA, one has to have a pretty high income. At the VERY least $123,000, no? Well, have a look at what a family in that income level is paying for health care in Canada:

http://www.fraserinstitute.org/uploadedFiles/fraser-ca/Content/research-news/research/articles/how-much-do-we-really-pay-ff010111.pdf

Unfortunately Canada’s economy is kind of a black hole for a lot of money… Between the credit bubble, the various corporate oligopolies, and the bloated civil service, there’s a lot of money being thrown down the rat hole.

#86 scott on 04.30.13 at 12:01 am

Questions for the Blog Dogs:

We’re 33, married with a 2 year old. Live in Winnipeg. Combined income of $130k. We’ve been renting all our adult lives and saving – while waiting for the market to crash. We have $160k in savings ($70k in RRSPs; $90k in TSFA, ETFs, stocks, bonds).

We’re buying (I know right, stupid). I’ve just decided that I’m not going to wait until I’m 40 and my daughter is 9 to be in a home. The Winnipeg rental market is non-existent for people who value not getting stabbed. Looking to buy a renovated bungalow in a nice area (Island Lakes) for around $400,000.
We’re putting $50,000 in RRSPs so we can avoid paying CMHC and take advantage of the Home Buyers Plan.

Questions:

1. Do I put down a good chunk from my other savings (90k), reduce the mortgage amount and try to pay it off in 15 years. If so, how much should I put down?

2. Given Garth’s predictions on interest rates in 5 years, should I lock in on a 5 year fixed (2.89%) or a 10 year fixed (3.69%)

3. Any other advice???

I would really appreciate your help guys. I’ve been reading this site since the beginning.

#87 Small Town Steve on 04.30.13 at 12:02 am

#31 Christopher Lackey on 04.29.13 at 9:03 pm
Garth, can I ask you a question? Why do you tell people not to invest in individual stocks unless they have seven figures? What different rules of logic and risk apply to four or five figures that don’t apply to seven? Can stocks be part of a balanced and diversified portfolios if investors understand the risk that come with them?
———————————————–

If you have enough money invested in ETF’s that you could take that same money and buy all the individual stocks weighted to duplicate those ETF’s it would make sense to do so simply because you would save money on the MER. This would especially be true if you had free stock trades or at least extremely cheap stock trades. The downside being rebalancing would be much MORE of a pain in the ass.

#88 Burnt Norton on 04.30.13 at 12:11 am

#48 None on 04.29.13 at 9:52 pm

http://en.m.wikipedia.org/wiki/Small_penis_rule

#89 Blacksheep on 04.30.13 at 12:28 am

Vlad, SM, Grantmi, Holy Crap Wheres The Tylenol on 04.29.13,

“It appears that they like to distract from the root of the blog and feel free to rant.”
———————————————-
Many having endured a lifetime of indoctrination, lack the coping mechanisms to separate themselves from the matrix and subconsciously consider the ‘system’ as part of their very being: education, religion, patriotism, etc. Those whom benefit from the system status quo, will block out reason, even when it is obvious atrocities have occurred.

Others are unwilling to entertain any conspiracy at all because even if one concludes the majority of them to be false, it takes only a single beyond reasonable doubt truth, to shine an unflattering light on the whole system.

A man accused of a dozen killings, need only be convicted of a single one, to be considered a murder.

Post what you like Vlad, others are free to skip it.

#90 Matt on 04.30.13 at 12:57 am

Genuinely curious – why is it assumed that rates will increase significantly in the near to medium term?

10 year rates are extremely low and the spread between fixed and variable is smaller than ever. That would seem to indicate that even the banks are betting rates won’t significantly increase for a long time, if ever.

#91 Jack on 04.30.13 at 1:14 am

Poker cat and bill gable….agreed, we need a mandatory course in high school regarding finances. Our current policy seems to enjoy keeping us Canadians ignorant so the banks can benefit. If we know less than we have less money and have to work longer…the government could care less. Pr–ks.

#92 Point Grey on 04.30.13 at 1:17 am

Disappointing to see the focus yet again to be Toronto centric. This blog is about the troubled future of real estate and rarely is there mention of the second most expensive city in the world-Vancouver’s west side.

#93 vic_guy on 04.30.13 at 1:19 am

@ 45 bottoms_up
Looks more like 2k per year for taxes, but whatever helps you sleep @ night.
ttp://www.sandieassad.com/agents/assads/taxes.htm

#94 David McDonald on 04.30.13 at 1:34 am

Business Insider has an article on five reasons not to fear a housing bubble in Canada. I’m a little skeptical of the first three :
http://www.businessinsider.com/no-canadian-housing-bubble-2013-4

Most Canadians can’t add fractions! When teaching baby statistics I often try to throw in some basic life skills like compound interest or even percentages. In my opinion a basic stats class the teaches common sense can be one of the most useful courses on campus.

It’s a hard sell however. Most people in a stats class are forced to take it as a part of their program.The teacher is in the position of a bus driver taking people where they don’t want to go.

#95 Half Full on 04.30.13 at 1:36 am

Check out CBC’s three part article called “Power Shift” speaking to the Central Bankers and how they are impacting the common folk. I would love to listen to a conversation between them and you, Garth!

#96 Debtfree on 04.30.13 at 2:11 am

@48 none . He’s being generous . In my world he’s a micro pecker at best or micro parrot much like Vic tows the party line . And we thought atlas shrugged . There’s not enough guts on the back bench to make a package of wieners .

#97 Van local on 04.30.13 at 2:24 am

Just watched the national on CBC and watched a very interesting report from Neil MacDonald. Quantatative easing, carney, ECB, and Bernakie (sp) policy. A brief look inside that secret world most know nothing about. What these people are up to affects all of us. Definitely worth watching!

#98 rico on 04.30.13 at 2:46 am

#19 dave on 04.29.13 at 8:39 pm
Smoking man, so does this mean you like older, hog riding type men?

Nope… It means his head is on backwards.

#99 gman on 04.30.13 at 2:54 am

#30. You are 100% right.Why not ask Bobo to get a co-habitation agreement with his squeeze and then see if she still wants to buy a house.If Bobo pays 75% of the mortgage,he gets 75% of the sale if they split up.Better yet he can buy the house in his name and charge her rent.I have heard of horror stories where the Bobo owned the house and the squeeze was giving him $400 a month for expenses.After 4 years the squeeze walked away with 60000 big ones,all in the name of love…ha,ha ,ha!!!!!

#100 nubbers on 04.30.13 at 3:16 am

@35, reading the comments on your link, it is depressing that so many Canadians seem to be taking a tongue-in-cheek article at face value of the headline. Surely point 4 makes the author’s intentions glaringly obvious:

‘Canada’s housing supply is mostly igloos, which will eventually melt, thus preventing massive overstock in the market place.’

#101 Notta Sheeple on 04.30.13 at 3:28 am

Lots of Maria’s living in my rental building, or more correctly, leaving my rental building. I meet them in the elevator everyday, happily espousing the virtues of soon-to-be condo ownership.

Turn my elevator sideways, and you have a one-car railroad to the gas chambers.

#102 Buy? Curious? on 04.30.13 at 4:04 am

Just found out a buddy of mine is moving back in with his parents, with his wife and 3 kids.

Things are going to get harder before they become easier.

http://www.youtube.com/watch?v=Uiiyqz72XPs

#103 Yellow Rox Rock on 04.30.13 at 4:23 am

The Banksters were on “The National” tonight Garth. I just thought you’d like to know.

The Banksters!

#104 The R on 04.30.13 at 5:36 am

Garth,
Please don’t ever think your talent is being wasted on this anything but sad blog..

I’ve kinda given up trying to make sense of this whole banking situion we’re in.

Fixed rates have been crippen down for years in canada…to be locked in at anything over a year just means you’ve got money to burn but no time of your own. how much lower can they possibly go ?
I’m thinking something like 2% for 25 years.

And now my outside mailbox is being bombarded with flyer like junkmail offering 0 % interest and 1% upfront till 2014. And not just a bit of money from some flybynight sounding company but Visa & Mastercard trying to throw 20 G @ me.

Makes me think only an idiot would actually waste a whole year or 2 of their life(70+ years ?.) Trying to save for a down payment on something nice and fun. Just add 1% to the price and buy now and enjoy while your still young(er) than then. (if its a dwelling you might even make a fast buck)-invest it & you’d most likely hit the top tax bracket eduction or not.

Local credit union is giving mortgages to people without checking the application- all you need is over 20 percent down & a pulse and boom ,get your friend to say (write) they pay you for whatever you currently wish you had a job doing. But if you need CHMC insurance then they put away the rubber stamp.

does any of make sense anymore ?

#105 Raven on 04.30.13 at 6:31 am

Subprime Not Sublime

Every single subprime lender in the US has gone bankrupt! Now the largest subprime lender in the world is …..The Canadian Government. If the banks refuses you a loan or mortgage, and CMHC permits the loan according to their underwriting standards….then it’s subprime.

At the height of mortgage madness in the US houses were 5 times the average income. In Canada we are over 7.4 times average income. That translates into being almost 50% more.

We have our National Housing Act, Mortgage Backed Securities, MBS. The US had Colatoralized Debt Obligations, that pooled these obviously overrated triple A securities, and sold them to get their ratios to more lendable levels. CMHC described these securities as, ” high ratio homeowner units approved to address less serviced and/or to serve specific government priorities”
Approval rates went from 33% to 42% from 2007 to 2008. Ninety percent of all mortgage growth since 2007 has been accounted for in Mortgage Backed Securities.

Collective bank profit stood at 7.33 billion in the first quarter. Why doesn’t the Fed ask for some of these “bailouts” be repaid to the taxpayers? These bailouts amounted to 114 billion in 2009 when three banks were literally insolvent, CIBC, BMO, and ScotiaBank. Government support exceeded their total market value!
Surely, these MBS show an increase in value since they were “given to the banks”?

This high risk policy prevents creative destruction from fully playing out and distorts market fundamentals. Secured loans from financial institutions (having 20% down, not requiring CMHC) may become an issue if our RE drops as much as the US RE market (32% , we can only hope this is the only amount it falls) then will people keep paying on such underwater mortgages?
Bank Capitol reserves may be tested in such a scenario.

“The laws of competition may be hard for the individual, it is best for the race, because it ensures survival of the fittest in every department” Andrew Carnegie

#106 EIT on 04.30.13 at 6:34 am

F is in the business of insuring financial suicide. It’s the Maya ritual of sacrifice to keep society going.

#107 PokerCat on 04.30.13 at 6:49 am

@tigerbaby “I’m worried that these teenagers will have no money to manage in the future if we allocate more resources to these type of classes instead of science and engineering …”

Yes, I agree to this, I merely used calculus as a personal example. I was required to take it for university admissions, and never needed it again. You can offer the course as an elective, most kids would think it a ‘bird’ course (what do kids call easy classes these days?). There are plenty of courses offered that are far less useful than personal finance.

‘perhaps CMHC insurance requirement should have an exam component on personal finance? :-O’

Love this idea. Like a prenatal course, but for mortgages, brillant!

#108 Craig on 04.30.13 at 7:02 am

The UK didn’t suffer a meltdown in housing in 2008 and onward, yet that graph shows them with an even higher debt ratio than Canada and everyone else.

What’s up with dat?

Spain’s housing market imploded, years ago, yet their ratio was and still is, better than most on the list.

http://www.greaterfool.ca/2013/04/18/the-perfect-canadian/

Fun with numbers.

UK housing prices definitely did crumble post-2009. — Garth

#109 PokerCat on 04.30.13 at 7:21 am

@scott

Questions:

“1. Do I put down a good chunk from my other savings (90k), reduce the mortgage amount and try to pay it off in 15 years. If so, how much should I put down?”

You haven’t given us all the information needed. My advice to you is to learn how mortgages work, it’s worth your while. Go find a mortgage calculator (every bank website has one) and play around with it. Start with a basic 25 year amortization with a monthly payment, then try a biweekly payment with the same payment (cut in half). You’ll see your amortization cut to about 17 years. Then reduce your principle by $90K and leave everything the same and see how many years you have left. (I can give you the answers myself but I’d spoil the fun).

“2. Given Garth’s predictions on interest rates in 5 years, should I lock in on a 5 year fixed (2.89%) or a 10 year fixed (3.69%)”

Again, not enough information here. If this is your first mortgage, you’ll likely be steered to a five year. I’m not opposed to a 10 year at these levels, but it depends on your situation, and the terms of the mortgage. *Hint* look at all mortgage terms and see which is the tastiest…(cough-cough *one year*)

“3. Any other advice???”

Stop asking for financial advice on your biggest financial decision in the comments section of any internet site? You’ll get really crappy advice ;)

As opposed to the bank? — Garth

#110 bigrider on 04.30.13 at 7:25 am

Although buying a house at this point in the GTA , or worse a condo, is probably a bad idea long term in that you are tying up a lot of capital, whether borrowed or your own and suffering lost opportunity cost, this ‘fabled ‘correction in RE prices this blog has been bleeting about for years I believe is not going to happen.

I have had to change my mind as I believed it to be so. Being wrong is bad, staying wrong is much , much worse.

#111 Morgan on 04.30.13 at 7:27 am

Friends of mine just bought for $600K in the Danforth. A small semi, but they like the school. The mortgage is a whopper in my eyes, but really 4x their income so… you know what? it won’t kill them but it’s a long, tiring road, which is what some of the older people are trying to warn Maria about. You don’t really understand how long 25 years is until you’ve measured that out twice in your own mortality.
My friends are in their 40s, so they’ll be paid off just before retirement. That will make saving for retirement rather miserable in my eyes. What scares me the most is that with sums so large you can’t switch gears and pay down the principal if you know a rate increase is coming. So Maria – I suggest you do an exercise. Calculate the rate you think you can manage on a 15 year amortization. Budget and buy based on that amount. It will give you some leeway and some protection from risk. By the way, put aside that amount in savings every month while you’re looking, so you can really know what it feels like to be house poor. That’s what the next 15 years will be. It won’t kill you, but it will get to you after a while. Also, there are plenty of rental units on the Danforth, why don’t you try living in one for a year and make sure you like the area?
#54 – I don’t think anyone here is screaming sell, except in cases where it’s really obvious. Even Garth doesn’t advise it in every case. More often, you hear ‘don’t buy’ because that’s almost always true, ‘sell now’ is def. appropriate for people struggling with their debt or thinking of retiring. But for many people, selling a house is like trying to unload a stock that carries a $30K broker’s fee – you really want to time that sale right!
#62 – you are probably assuming that every commenter here is male unless otherwise stated. And you notice materialism in females because you expect it to be so. Misogyny creates biases like that in people.

#112 Bottoms_Up on 04.30.13 at 7:43 am

#93 vic_guy on 04.30.13 at 1:19 am
—————————————-
It’s good to know you trust a realtor’s website calculator, that clearly states the amounts are for illustrative purposes only.

#113 Mr. Frugal on 04.30.13 at 7:54 am

Maria, this is a really, really bad plan! For starters, $120K may seem like alot now but maintaining a house costs alot more than you think. Add a couple of kids to the mix and it’s a recipe for disaster. If you want to keep working, you’ll have to pay a small fortune in day care. If you stay at home to look after them, you’ll have a huge drop in household income. Once they get older the costs of food, clothing and other expenses will skyrocket. I’ve got two kids in the middle teens and it’s really, really expensive. The only way to own property and raise a family is to get out of Toronto and commute!

#114 I am in C on 04.30.13 at 8:16 am

Today’s real estate pumping infomercial from the Toronto Star. At least it wasn’t written bu Susan Pigg

http://www.thestar.com/business/personal_finance/2013/04/30/the_pros_and_cons_of_using_a_mortgage_broker.html

#115 David w on 04.30.13 at 8:34 am

#45 bottoms up

Good point. Property taxes suck as would having to pay for healthcare.

#116 vic_guy on 04.30.13 at 8:56 am

@ 112 bottoms_up : it is an estimate.
Here, Zillow says $1324 on $350 k house in Atlanta.
http://www.zillow.com/homedetails/522-Harold-Ave-NE-Atlanta-GA-30307/14478583_zpid/

Try : http://bit.ly/ZTveJI

#117 thiscountryis going down the toilet on 04.30.13 at 8:59 am

Yesterday I asked the question “Has the Canadian population been deliberatley dumbed down with low standards of living, shocking prices and general poverty because poor people are easier to manipulate”?

Heres something from a Phillipine paper you might enjoy…

“Only A few days before the elections, the Quezon City government exempted squatters in the National Government Center near the Batasang Pambansa from paying real estate taxes on their homes and stores. The government lots will be sold to them at very minimal prices. How lucky can squatters get. That is why Quezon City is called the paradise of squatters. And that is why squatters congregate there.

The Quezon City government’s move is obviously a vote-getting ploy because squatters are voters (attention: Comelec), and squatters vote like herds of cattle. They vote for whoever buys their votes or whomever their leaders tell them to vote for.

I am happy for the really poor squatters who would benefit although I don’t agree with rewarding lawbreakers, which squatters are. But what about the law-abiding lot owners whose properties have been squatted upon but continue to pay real estate taxes to the Quezon City government? Not only that, the city assessor regularly increases the valuation, and therefore the realty taxes, of these lots. The lazy assessor bases his valuations on maps, without going to the actual sites to see the conditions there. If he does, he would see that many of the sites on which he imposed high taxes are overrun by squatters.

Now…if this doesn’t smell like Canadian politics I don’t know……are we taking lessons in crowd control from the Phlips?

#118 vic_guy on 04.30.13 at 9:02 am

@ 114 David w : it is an estimate.
Here, Zillow says $1324 on $350 k house in Atlanta.
http://www.zillow.com/homedetails/522-Harold-Ave-NE-Atlanta-GA-30307/14478583_zpid/

Try : http://bit.ly/ZTveJI

Property taxes do suck, but they are not 6k/year on houses < 200 k in Atlanta. But, do your own research so that facts can be discussed, try the one above :-)

#119 Shawn on 04.30.13 at 9:12 am

CBC, Neil MacDonald, and Central Bankers

The part of the CBC show that stood out for me was how smug and condescending Mark Carney was.

He kept using Neil’s name as a passive aggressive way of showing his superiority.

“Neil”, it’s all about you is it?

It doesn’t feel like a party “Neil”.

The other interesting thing is he mentioned that thousands would lose their homes if interest rates were allowed to go to normal levels.

It truly is scary that central bankers have seen fit to manipulate world interest rates. How very arrogant!

Thumbing your nose at market forces or resisting a tide tends to end badly.

I am not sure if the currency system could exist without a central bank but if so it might be a good idea. Let the dollar go where it may. And why should central banks be manipulating interest rates?

#120 Ann on 04.30.13 at 9:35 am

re-
#45 bottoms up

Good point. Property taxes suck as would having to pay for healthcare.
———————————————————————Typical Canadian our health care is free lol

#121 jess on 04.30.13 at 9:38 am

The Bhopal Survivors’ Movement Study

who brings justice the uneducated or the intellectuals?

http://infochangeindia.org/environment/bhopal-survivors-movement/the-bhopal-movement-as-a-school.html

#122 blok existentialist on 04.30.13 at 9:40 am

I do think renting is the smart response to the current market. But I continue to wonder about the future. Renters have no commitment to their community. Homeowners do.
I see a lot of people on this site trashing the natural instinct of young couples to ‘nest’ and raise a chick or two. Not everyone wants granite counters or a big-ass lifestyle. Not these days. All most want is stability.
What’s sad is to see young couples willing to mortgage their LIVES to achieve home ownership.

#123 Frank on 04.30.13 at 9:46 am

#54 Craig on 04.29.13 at 10:05 pm
You have an over simplistic point of view. This isn’t renters vs buyers, no matter how much MSM makes it seem that way. I’ve been a renter since 1998 and your portrayal of renting are the worst case scenarios. Guess what? home ownership isn’t always a walk in the park either. You sound very insecure with the fact that you own a home and it sounds like you have a lot to lose if the premise of this website actually materializes. If being over aggressive and having a condescending attitude towards renters provides mental relief, good for you! The problem with that approach is that you might not be able to handle reality when it finally happens. Good luck with your sanity.

FYI – if you don’t actually sell your house, you don’t make any profit!

#124 ss on 04.30.13 at 9:59 am

#45
Do not forget in US, property tax & state tax can be written off on federal income tax return. And I lived in Atlanta before, and you will be surprise only in 40% of the Southern part it is bad, elsewhere of the city is much better and safer than GTA.

#125 sciencemonkey on 04.30.13 at 10:33 am

@121: Renters may or may not have a commitment to their community. However, in the current market, the community is flipping a giant F U to anyone earning a “middle class” salary who wants to buy and be part of it. As John said a while ago on this blog, gen Y professionals are coming into an environment toxic to them.

#126 City that smells like it sounds on 04.30.13 at 10:53 am

#58 Craig on 04.29.13 at 10:15 pm

Good thing you come here to spout your rhetoric Craig. Clearly you aren’t worried about your “investment”. ;)

#127 Rational Optimist on 04.30.13 at 10:59 am

Scott- at 33, you should probably have more than 160k saved if you net (is it net?) 130k. But that’s still not bad!

Is some of the 90k non-registered? I’m presuming so. I’m not saying to do this, but consider it: put 35% down, or close to it. Thankfully, we can no longer get HELOCs for 80% of value, but you can get 65%. Consider getting a readvanceable mortgage and using the line of credit to purchase back the non-registered investments you sold (and more, obviously) to make the down payment. You were going to own those investments anyway, may as well purchase them with OPM and reduce your non-deductible debt. Remember: non-deductible interest bad, deductible interest less bad.

#128 Daisy Mae on 04.30.13 at 11:08 am

Hi,

http://cbc.sh/2RhoXzg

Neil Macdonald: The illusion of growth

Everyone is free to moan about central bank policy which they can neither control nor influence. Or, they can structure their lives, as people always have, to adapt to and profit from, current circumstances. — Garth

#129 TnT on 04.30.13 at 11:39 am

blok existentialist on 04.30.13 at 9:40 am

Renters have no commitment to their community. Homeowners do.
**********

WoW! what total BS!!!

As a renter with a family we are very well connected to our community. The banks did a great job at brainwashing people.

**********

I see a lot of people on this site trashing the natural instinct of young couples to ‘nest’ and raise a chick or two. Not everyone wants granite counters or a big-ass lifestyle. Not these days. All most want is stability.
***********

Again.. total BS!

Renting is more stable than owning. Flexibility of renting makes a family more secure and stable than being tied down with owning.

Brainwashed!

#130 Not from around here on 04.30.13 at 11:46 am

Its amazing the banks demand the government stays out of the “their business” on setting mortgage prices, yet this whole thing only works with CHMC (i.e. the taxpayer) backstopping the risk………

Would the pricing of mortgages stay the same without CHMC and risk pushed back onto the banks……

#131 Ogopogo on 04.30.13 at 11:47 am

#31 Christopher Lackey on 04.29.13 at 9:03 pm
Garth, can I ask you a question? Why do you tell people not to invest in individual stocks unless they have seven figures? What different rules of logic and risk apply to four or five figures that don’t apply to seven? Can stocks be part of a balanced and diversified portfolios if investors understand the risk that come with them?

Coca Cola up 18% in the last three months

Diversification reduces risk. You need lots of money to achieve that if buying equities. Index ETFs are vastly superior for most people. — Garth

Garth is right. ETFs are also free at some brokerages, such as Questrade. That means you can rebalance for free by buying ETFs that have fallen in value to bring them up to par with your desired allocation.

#132 worried_boomer on 04.30.13 at 11:50 am

#65, #77 … Power shifts to savers:http://www.cbc.ca/news/business/story/2013/04/26/f-rfa-macdonald-power-shift-savers.html
___________________________________________

This article just reveals what really cause the banksters to tremble: for them a huge debt is not a problem, they can handle it somehow as long as act coordinately. The major fear for them is the crowd incapable to take more debt. They will do whatever it takes to prolong that low interest “nightmare without end” or they will invent something else to lure people into borrowing, economy is, after all, just a tool for them and not a free market instance anymore.

#133 AACI Home-Dog on 04.30.13 at 11:53 am

#86, Scott
If you must buy, I say mortgage to the max, variable rate for 1 year or so (watch the rates; when they rise, lock in for 5 years). Continue to invest the $90k; keep it liquid; it should get more than 3% return. If rates are way higher at the end of the 5 year term (2019 or so ?) then reconsider paying it down. You may even be able to pay it off by then !
good luck…

#134 Bottoms_Up on 04.30.13 at 12:05 pm

#119 Ann on 04.30.13 at 9:35 am
—————————————-
Typical “someone that can’t read” — inferring something from nothing.

Where did I state that health care in Canada is free?

And, when was the last time you heard of a Canadian having to mortgage their house to pay for healthcare? Or, stitchng their own wound because they couldn’t afford to pay the insurance deductible?

#135 Wilbur on 04.30.13 at 12:10 pm

http://richmondbcrealestates.com/?p=909#more-909

The prices in Richmond,BC continue to decline and listings skyrocket.

Ground zero in Vancouver, the rest will follow suit…

#136 Bottoms_Up on 04.30.13 at 12:13 pm

#117 vic_guy on 04.30.13 at 9:02 am
—————————————–
You’re forgetting that a $200k Atlanta house use to sell for $500k. It would be interesting to see a chart of taxes paid on that house over the years. My number of $6000 was obviously invented, but generated some discussion so I’m happy.

If you want more information on municipal taxes in the state of Georgia, here it is:

http://www.gmanet.com/Assets/PDF/handbook/revenues.pdf

“Municipalities are required to tax tangible real and personal property at 40 percent of the fair
market value. As an exception to this rule, municipalities that were allowed to assess properties
at a value greater than 40 percent in 1971 may continue to assess at that value.”

#137 VanPerfecto on 04.30.13 at 12:18 pm

Why the media blackout on Cyprus?
Many renters have commitment to their community. Due to lack of equity renters need to ensure they invest in a balanced portfolio. Maximize you RRSP contribution and use your refund to buy toys or top up your TFSA

#138 45north on 04.30.13 at 12:22 pm

Raven: Collective bank profit stood at 7.33 billion in the first quarter. Why doesn’t the Fed ask for some of these “bailouts” be repaid to the taxpayers? These bailouts amounted to 114 billion in 2009 when three banks were literally insolvent, CIBC, BMO, and ScotiaBank.

the Fed? you mean the Canadian Federal Government, the Fed means the US Federal Reserve.

Secured loans from financial institutions (having 20% down, not requiring CMHC) may become an issue if our RE drops as much as the US RE market (32% , we can only hope this is the only amount it falls) then will people keep paying on such underwater mortgages?

I figure that Canadian RE will fall by 30% which is why I passed up a deal on an interrupted renovation. “will people keep paying on such underwater mortgages?”

you know they won’t

[email protected]

#139 Canadian Watchdog on 04.30.13 at 12:27 pm

Results for Craigslist rental offer prices. Prices are based on 9,254 listing observations for the month of Apr ’12 and Apr ’13.

Median YoY %

1 Bedroom – $1,450 – 20.8% y/y
2 Bedroom – $1,795 – 14.0% y/y

#140 Robert on 04.30.13 at 12:28 pm

Number 114 David W

#45 bottoms up

Good point. Property taxes suck as would having to pay for healthcare.

Do you live in your own world? You think people in Canada don’t pay property taxes? Also free health care? Hey sucker do you see how high our taxes are?

#141 Deliverator on 04.30.13 at 12:33 pm

Neil Macdonald at the CBC understands that a war on savers has been going on.

It’s actually been a war against deflation. And thank goodness somebody’s fighting it. — Garth

#142 Post Haste on 04.30.13 at 12:37 pm

Most in here appear to be renters and happy with it! Me, well I rented for nearly 7 years and had my a$$ handed to me with the bs I dealt with over those years. My experiences were tales of disbelief – a fridge that was held with duct tape, neighbours who partied only at 4am – bugs that darted for the cupboards when I turned the lights on, issues with hot water and letters advising I couldn’t open my window for a few minutes in the winter time … and the list went on – figured on terms of $980.00 per month / over 7 years I spent an incredible $82,320.00 while saving zilch!

We now own a home – and within our 12th year we will have this puppy paid off – and funny thing – we are actually saving also – renting I was depressed as hell, a black cloud followed me everywhere – now, at least I can see some rays of sun!! Owning is not for everyone – but it makes for a hellovah arguement for it!

And a final note – not everyone carries a mortgage for the full term – most of my buddies are mortgage free after 7 years – I took the long route!

Great job Garth!

#143 Old Man on 04.30.13 at 12:39 pm

I sold some stuff last year, and parked some cash in the money market rolling over every 30 days until I could find something to buy, buy got lazy and sat back too long. Oh what a difference it can make ignoring the dividend tax credit which is a hard credit against tax payable, so do not park cash, or you will lose the gift, and never leave cash sitting around in a bank account or a GIC; not to mention parking in a money market account too long, as it will cost you in the end :(

#144 Old Man on 04.30.13 at 12:59 pm

Now on my tax return that do all myself had about 15 boxes to struggle with, more or less, and ignored box 42, as that is just a return of capital. Now why did my dividend tax credits go south? I parked cash too long, so became a greater fool by not paying attention to the gift, and in the end got hooped a bit this year.

#145 Josh in Calgary on 04.30.13 at 1:10 pm

#31 Christopher Lackey,
To further Garth’s point, it’s all about the Management Expense Ratio (MER). The same reason that ETFs beat Mutual funds is the same reason they beat individual stocks. For example, XIU is a common ETF that just holds the top companies on the TSX. It has a MER of 0.18%. Now half of its holdings are in the top 10 companies so let’s say you would be happy just buying those companies instead (banks, major energy, railroads, etc.). You would have to pay $20 per trade times 10 for a total of $200. Divide that by 0.0018 to get $111,111. So you would have to be investing over that amount to beat the ETFs MER. And that’s just for the one ETF. A good portfolio should have at least 5 or 6 ETFs (to get your fixed incomes, preferreds, Canada, US, International). That’s why unless you’re investing over one Million you should stick to ETFs.

#146 Canadian Watchdog on 04.30.13 at 1:12 pm

It’s actually been a war against deflation. And thank goodness somebody’s fighting it. — Garth

Unconventional monetary policy only works until it doesn't Garth. Chart

Deflation is the cure, not the problem.

Then you have no idea what deflation is. — Garth

#147 Sebee on 04.30.13 at 1:29 pm

From a CNNFN article:

The Fed, he said, is creating the same problems that led to the financial crisis in 2008 by keeping rates near zero. “They are creating massive fraud,” Roubini said during a panel at the Milken Institute Global Conference in Los Angeles, Calif. Monday.

He pointed to the junk bond market as one example of a bubble.

“At some point, there’s a levitational problem,” said Roubini.

When gravity sets in, Roubini says there will not be a recession but a depression.

With slowing global growth, it’s impossible to keep stocks and bonds at these valuations. “The global growth scare would imply that commodity prices should be lower, bond yields should be lower, and equities should be lower,” he said.

#148 Canadian Watchdog on 04.30.13 at 1:41 pm

Mark Carney unveils Canada's new foreclosure notice.

#149 Ogopogo on 04.30.13 at 1:43 pm

#140 Post Haste on 04.30.13 at 12:37 pm
Most in here appear to be renters and happy with it! Me, well I rented for nearly 7 years and had my a$$ handed to me with the bs I dealt with over those years. My experiences were tales of disbelief – a fridge that was held with duct tape, neighbours who partied only at 4am – bugs that darted for the cupboards when I turned the lights on, issues with hot water and letters advising I couldn’t open my window for a few minutes in the winter time … and the list went on – figured on terms of $980.00 per month / over 7 years I spent an incredible $82,320.00 while saving zilch!

You’ve unknowingly revealed the root cause of your financial problem: investment innumeracy. “Saving zilch” is precisely the issue here, as you should have been investing the money you saved while renting crappy apartments.

The second solution would have been to rent a better place. I’m no genius and yet I rent the most luxurious unit in my low-rise condo building (used to be the show unit) and save close to $1,000 per month doing so (rent vs. buy calculator). No cockroaches here, no loud neighbours, no hassle, no fear. And best of all, I get to watch the Kelowna real estate market collapse from the safe comfort of my landlord-subsidized rental.

Renting sure sucks, doesn’t it?

#150 Van guy on 04.30.13 at 1:46 pm

#17 T.O. Bubble Boy on 04.29.13 at 8:31 pm
By the way – hope no one owned Extendicare shares today! (EXE down almost 30%)

Exe surges before it tanked! What bs!!!

#151 Craig on 04.30.13 at 1:53 pm

122 Frank

I’ve been a renter since 1998 …

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

So if your rent is $1,500 a month over 15 years, you’ve paid your landlord $270,000.

(at a $1000 a month that’s still $180,000)

Man that is a lot of AFTER tax dollars. I hope you’ve invested wisely because that $1500 a month would have paid for your house by now which at that rate would be worth around $500K tax free. No capital gains on a house….keep that in mind.

For me, no I’m not worried one bit, nor an I insecure. I have no mortgage and I have my investments. What I’m prodding you folks for is a sound argument that convinces me and many others that read here, to sell, then rent, then wait a few years and buy back in at a lower price.

garth and you folks have made some great points but it based on the economy moving up 3% plus and interest rates going up.

Right now, IMO, I don’t see either happening.

Yeah there will be a pull back in house prices, there always is after a significant run, no different than the stock market or gold or anything else that hits record highs.

====================================
#140 Post Haste

Smart move congrats.

Landlords want your money, not you and certainly not your complaints.

#152 Piccaso on 04.30.13 at 1:54 pm

Please give yourselves a collective tug Canada… what other than the possibility of a higher paying job would draw anyone to Canada? The highest prices of goods and services in North America?… maybe the wonderful weather for 2 or 3 months a year?… or the highest taxes in the G20? Oh, go ahead and tell me it is the “free healthcare”… 60% of the government’s revenue (your taxes) goes to pay for that overstuffed and overpaid operation.

#153 Old Man on 04.30.13 at 1:55 pm

Now if you think Caesar has problems with his Reform Government, as he is nothing but a ring master within a third rate circus who has no clue. I say send him to the clowns for a better act, and all Canadians would clap for him, as that is where his real talent lies, and he can play a piano for us all to have a laugh.

I love old women, as they are pounding on my door with a petition to stop the carpet laying, as they are from the 1960’s, as do not like the colour, and want it to stop; yep they were all part of the revolution so many years ago. I said too late for me, but will sign, and they said we knew you would, and will get some baked cookies parked at my door in a few days.

#154 frank le skank on 04.30.13 at 2:04 pm

Rent vs buy…. who gives a f#$k? There’s no big conspiracy in the world of renters to annihilate home owners. The fact is that there are opportune times to buy or sell and some people choose to take advantage of that. If you buy a house to live in and remain within the healthy financial parameters required to reduce risk, the fluctuating market should not scare you. If you fell for the Brad Lamb marketing scam that told you interest rates will never rise, housing prices will always rise and your financial stability relies on that hypothetical situation that has never happened in history, please direct your anger towards yourself and not renters. All the pros and cons described for renters can also apply to homeowners. Homeowners have rodent and bug problems, drainage problems, appliance failure, noisy neighbours and so on. If you need granite, crown moulding, hardwood, top of the line appliances, you can rent luxury accommodations that will satisfy your needs. There is no argument that proves buying is better than renting or visa versa, its personal preference and sometimes a necessity. If renting is not your thing, you don’t have to be an asshole about it.

#155 Loopback on 04.30.13 at 2:07 pm

U.S. Homeownership rate drops to 15-year low
Source: Reuters

#156 Dupcheck on 04.30.13 at 2:09 pm

What makes her think that by making 120K combined she will be able to afford a 600K house and carry on with the same lifestyle? Just wondering!

#157 patientlywaiting on 04.30.13 at 2:29 pm

Garth:

In 2007 about the time I started to read your blog I could buy a bungalow in the east end for approx. $300,000. Today, in 2013 similar bungalow is close to $500,000.
When do you think the price will go back to $300,000. I’m tired of waiting and would appreciate your comment.

This blog did not exist in 2007. — Garth

#158 jess on 04.30.13 at 2:43 pm

structures

http://www.thesun.co.uk/sol/homepage/news/money/4908225/Npower-avoids-paying-108m-tax-by-funnelling-funds-to-Malta.html

#159 jess on 04.30.13 at 2:46 pm

Half Full

OECD controversy
The OECD has been criticised by several civil society groups and developing countries. The main criticism has been the narrowness of the OECD because of its limited membership to a select few rich nations.[41] In 1997–1998, the draft Multilateral Agreement on Investment was heavily criticized by several non-governmental organisations and developing countries. Many critics argued that the agreement would threaten protection of human rights, labor and environmental standards, and the least developed countries. A particular concern was that the MAI would result in a ‘race to the bottom’ among countries willing to lower their labor and environmental standards to attract foreign investment. Also the OECD’s actions against competitive tax practices has raised criticism. The primary objection is the sanctity of tax policy as a matter of sovereign entitlement.[28]

==
..”hesitant recovery high joblessness, unprecedented volatility of financial markets and public debts that have reached levels never experienced before make us think twice when defining the necessary policy responses in the long run…..”

oecd how is life?
http://www.keepeek.com/Digital-Asset-Management/oecd/economics/how-s-life_9789264121164-en

#160 jess on 04.30.13 at 2:58 pm

craig
new stimulus
“First, a £3.5bn capital spend over the next three years on shared equity loans to allow homebuyers an equity loan worth up to 20% of the value of a new build house.

And second, in what Osborne called a first for the UK, a new Mortgage Guarantee designed to allow lenders to provide more mortgages to all those without a large deposit…

==================
UK house prices rise at twice Euro average
By Simon Lambert
UPDATED: 16:26 GMT, 31 August 2007

Source: Halifax/European Central Bank, House prices to March 2007

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-1613567/UK-house-prices-rise-at-twice-Euro-average.html#ixzz2RyUB6eBg

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-1613567/UK-house-prices-rise-at-twice-Euro-average.html#ixzz2RyUB6eBg
Follow us: @MailOnline on Twitter | DailyMail on Facebook

Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-1613567/UK-house-prices-rise-at-twice-Euro-average.html#ixzz2RyTyYvM0
Follow us: @MailOnline on Twitter | DailyMail on Facebook

This would use the government’s balance sheet to back £130bn worth of higher loan-to-value mortgages

http://www.building.co.uk/news/osborne-announces-major-new-housing-stimulus/5052149.article

#161 scott on 04.30.13 at 3:00 pm

I just wanted to say thanks to #109 PokerCat, #125 Rational Optimist and #131 AACI Home-Dog for the excellent advice (and of course, Garth for all the invaluable advice from this blog). Definitely lots to think about.

As for buying, I’ve been trying to follow Garth’s 10 rules. So far, I’ve put bids on 3 houses and 2 of the 3 were rejected because sellers refused the home inspection. In terms of timing the purchase, Winnipeg had its worst March since 1995. I’m waiting to see what the April numbers say and hope it puts an even bigger chill on the market. I’ve gotta say, the decision to buy now (within the next 3 months) is bittersweet because I’ve been waiting for so long for a correction.
I think I might hang on and wait it out till July-August. I doubt the market cools substantially (i.e. more than 1-3%) in that time frame but who knows.

I’m not buying a place as an investment whatsoever. I’m basically going in, knowing that in 3 years it could be down 15-20%. Its basically the premium I’ve attached to getting my daughter into a nice area with great schools. The plan is to live there for 15 years, possibly forever, and so these losses wouldn’t be realized anytime soon. Am I nuts?

Thanks again for taking the time to provide advice on my situation.

#162 Tom Vu on 04.30.13 at 3:19 pm

High frequency trading computer is down for a few milliseconds.

Will be up and running soon.

Suckers.

#163 Dorf on 04.30.13 at 3:37 pm

#99 – gman…

“You are 100% right.Why not ask Bobo to get a co-habitation agreement with his squeeze and then see if she still wants to buy a house.If Bobo pays 75% of the mortgage,he gets 75% of the sale if they split up.Better yet he can buy the house in his name and charge her rent.I have heard of horror stories where the Bobo owned the house and the squeeze was giving him $400 a month for expenses.After 4 years the squeeze walked away with 60000 big ones,all in the name of love…ha,ha ,ha!!!!!”

Excellent ! A thinker among us !

My friends are all doing that, charging her rent instead of splitting the mortgage. It’s the new way to live.

I have been advertising on personals for about 2 years now, for a woman with a B+ in math and some kind of life and a personality.

No luck – EVERY WOMAN I meet, on the first date, immediately talks about wanting to buy a house. I always get a very negative response when I explain the housing market, economy, etc.

———————————————————
The clincher is when I say buying another house is financial suicide right now, and is at least 5 years away at the earliest.
————————————————————–

What ? No second date ?

What about the fact that I am of athletic build, big and strong, totally debt free, net worth about $75k all owned, make $70k – $80k a year, most women say I am very handsome, and I am a very good person ?

What about all those things you just said about “I am such a nice man”, “I am very sweet”, ” I am such a good listener”, “I am so funny”, etc. etc…

————————————————————-
All she really heard is….. NO DAMN HOUSE !!!!!!!

————————————————————-

Apparently, 5 years is way too long to “love” a guy on the proposition that MAYBE he will buy a house.

And I have not yet met a woman with a B+ in math, they always skip over that part and come to the date anyway.

#164 Devore on 04.30.13 at 3:46 pm

#83 Moosey

Lots of people posting this story.

He scoffs at the suggestion that “the party” will end at some point. “I am not sure we are having a party right now,” he says. “It doesn’t feel like a party.”

That’s incredibly disingenuous. The reference to “a party” is obviously allegorical, not literal, referring to low interest rates and an orgy of borrowing. Oh sorry, was that another analogy? It sure doesn’t feel like an orgy to me.

How 1984 of him. He should take some pointers from his new BoE staffers, who stated it rather plainly: savers need to stop moaning and start spending.

#165 Suede on 04.30.13 at 3:54 pm

Apple – $100B

US Gov’t – 0

More after the first intermission

#166 vic_guy on 04.30.13 at 3:55 pm

@ bottoms_up :

Maybe you’ve not used Zillow before ?
Click the link … all the tax info is there.
Yes, it was freaking pricey while the value was higher :
But…it is not today…and the original discussion was about a*160k* house bought recently.
Here is the tax info if you can’t find it (pretty easy though – click Zillow link, scroll down)

2011 $1,324 $115,872
2010 $1,134 $116,000
2009 $5,130 $116,000
2008 $5,130 $116,000
2007 $5,231 $116,000
2006 $1,248 $116,000
2005 $1,103 $109,440

Today/since 2010(2011) taxes on a real, not fictitiously created as a straw man, 160k house are

Hint : http://www.zillow.com/homedetails/1634-Ponce-De-Leon-Ave-NE-UNIT-305-Atlanta-GA-30307/54450273_zpid/

Year Property taxes Tax assessment
fewer
2011 $491 $81,760
2010 $346 $81,760
2009 $2,169 $81,760
2008 $2,169 $81,760
2007 $2,283 $83,400
2006 $351 $83,400
2005 $334 $81,440

I have zero interest in Atlanta, but *real* discussion requires *real* data. Maybe the 6k/year property tax on $160k house exists, but you’ve shown no evidence.

My searches show about $500/year on $160k.
Your hypothesis only needs to be falsified once to be invalid. So…where are the super high taxes (I agree 6k is $$$) on houses that are low ? valued ? (low by Canadian standards) ?

#167 Craig on 04.30.13 at 3:56 pm

“” All she really heard is….. NO DAMN HOUSE !!!!!!! “”

They used to be happy with a ring !!!!!!

gezzz, the good old days

#168 L on 04.30.13 at 3:59 pm

#161 Dorf

It’s not the house. It’s you. The economy is in the crapper right now. Maybe the woman is going on the date for a free drink, meal, or she needs a ride to the restaurant (gas is really expensive these days)

#169 Nemesis on 04.30.13 at 4:05 pm

…”to adapt to and profit from, current circumstances.” — Garth

In the overall schema of LateModernity… who among us could argue convincingly against such pragmatic advice [and its implied individual modal adaptations, firmly grounded as they are in evolutionary psychology and economic RealPolitik]?

Well… besides AngryCarpenters and their RiffRaffRagTagRabble…

[36] For what shall it profit a man, if he gain the whole world, and suffer the loss of his soul?

#170 Devore on 04.30.13 at 4:06 pm

#114 David w

Good point. Property taxes suck as would having to pay for healthcare.

“Property taxes suck”? Are you 12? Who speaks like that.

Nothing is free. If you believe you are getting some kind of a deal with lower taxes and “free” healthcare in Canada, you simply haven’t done the math. You’re paying for it in other ways or at another time. Wages between Americans and Canadians are comparable. Time to start paying attention.

#171 Ray on 04.30.13 at 4:08 pm

#137 Canadian Watchdog on 04.30.13 at 12:27 pm
Has the increase been included into inflation calculation?

#172 Humtpy Dumpty on 04.30.13 at 4:08 pm

#144 Canadian Watchdog on 04.30.13 at 1:12 pm

Dude, you should take a look at this before you reciprocate with the wise one…

http://armstrongeconomics.com/2013/04/30/inflation-v-deflation-reality-check/#respond

The prophet is correct… Be very concerned of deflation

#173 Devore on 04.30.13 at 4:21 pm

#121 blok existentialist

Renters have no commitment to their community. Homeowners do

Huh?

Renters have easily as much stake in having a nice place to live as home owners. How many home owners give a crap about their neighbors, or even know who they are?

There is nothing magical about home ownership that suddenly makes you care about your community. You either do, or you do not. Ownership status has nothing to do with it. A renter who does not care about his community will not become a home owner who bakes cookies for his elderly neighbors and organizes block parties.

If by some chance you are referring to the upkeep of the property vis-a-vis “pride of ownership”, property maintenance of rentals is the responsibility of the owner, so that shows you how much those owners care about the community they own in when a rental is run down. Their care does not extend beyond their nose.

#174 Smoking Man on 04.30.13 at 4:28 pm

Go Apple…….. :)

#175 tony bologny on 04.30.13 at 4:33 pm

Macro Collapse Pushes S&P 500 To New All-Time Nominal High And Close
“Horrible” PMI, no problem; just add it to the list of macro data that has missed significantly in recent weeks. Bloomberg’s US Macro index has utterly collapse in recent weeks – now at its worst level in 7 months but apparently if good is good, bad is better, and totally shitty is absolutely awesome.

#176 Devore on 04.30.13 at 4:39 pm

Everyone is free to moan about central bank policy which they can neither control nor influence. Or, they can structure their lives, as people always have, to adapt to and profit from, current circumstances. — Garth

This is the crux of the dispute between gold bugs and doomers and “everyone else”. A regular person, and definitely a professional investor such as yourself Garth, has to at the end of the day put food on the table. They have to prosper in and profit in TODAY’S environment, not the one they wish they had or one that “should be”, regardless of their personal beliefs or allegiance to any given economic model. Hey, I’m all over gold money and end to central banks and private money and Austrian economics and all that jazz, but here’s my problem, it ain’t happening, and I have bills that need paying, today, not the post-apocalyptic utopia of tomorrow.

#177 Canadian Watchdog on 04.30.13 at 4:53 pm

#169 Ray

Has the increase been included into inflation calculation?

Prices I track from Craigslist are rental offers only, not prices paid. However since you asked: as of March, StatsCan revised its CPI basket from 2009 to 2011 expenditures. As it turns out, rent is now weighted less in the CPI basket since it's now based on 2011 expenditures, a time when consumers were borrowing and spending like crazy on everything else.

This is why CPI lags and is always behind the curve by measuring what consumers were doing two years ago, not today. Ohh but the brilliant PHDs at StatsCan and the Bank of Canada say no, it's accurate, your rent as a percent of income is going lower.

#178 jess on 04.30.13 at 4:57 pm

john doe summons

http://www.irs.gov/irm/part25/irm_25-005-007.html

The IRS wants Wells to hand over data on U.S. taxpayers with accounts at Canadian Imperial Bank of Commerce FirstCaribbean International Bank (FCIB)

http://www.forbes.com/sites/robertwood/2013/04/30/wells-fargo-hit-with-irs-summons-for-tax-haven-account-data/

#179 Old Man on 04.30.13 at 4:57 pm

#172 Smoking Man – there is a gal that hangs out at Southside Johnny’s in Etobicoke called Apple where you hang out, who is known that wants a bite, so when you say go Apple, do tell us all?

#180 Tom Vu on 04.30.13 at 5:00 pm

Everyone is free to moan about central bank policy which they can neither control nor influence. Or, they can structure their lives, as people always have, to adapt to and profit from, current circumstances. — Garth

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

Translation:
Pitchforks and torches on sale in Aisle 21
…OR bend over and assume the position.

#181 rosie "moving forward" on 04.30.13 at 5:11 pm

For the many of you quoting the cbc on banking, you might want to try to work for them. http://www.huffingtonpost.ca/marni-soupcoff/cbc-caucasian-ad-job-posting_b_3185940.html?utm_hp_ref=canada

So look in the mirror and ask yourself if you might fit the requirements. P.S. The cbc hates banks. Communists hate banks, therefore the cbc is a communist front.

#182 Devore on 04.30.13 at 5:20 pm

#169 Ray

Has the increase been included into inflation calculation?

No, because inflation takes into account only prices, not fantasy wishes. You know what you find on Craigslist? Properties that haven’t rented. If you want to know about real rents, look at CMHC data or the Sauder School of Business rental index.

#183 Dr. Hoof-Hearted on 04.30.13 at 5:52 pm

The Russian billionaire who made $1.4-billion on Facebook just bet big on Apple

http://business.financialpost.com/2013/04/30/the-russian-billionaire-who-made-1-4-billion-on-facebook-just-bet-big-on-apple/?__lsa=3f6c-00b0

Alisher Usmanov, the Russian billionaire who made a more than 10-fold return from his investment in Facebook Inc., said he recently spent about US$100 million buying Apple Inc. shares in anticipation they will rise.
iPhone 6 coming in June 2014: Misek

QUOTE:

A larger screen, new colours, a faster processor and a better camera will make it worth the wait, says Jefferies analyst Peter Misek. Read more

“I believe in the future of this company even after Steve Jobs,” Usmanov, 59, said in an interview at Bloomberg’s Moscow offices, referring to Apple’s late co-founder. “When the company lost US$100 billion of its market value, it was a good time to buy its shares, as the capitalization should rebound.”

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

Apple-heads….load up ….the pump and dump is a- coming.

Suckers….

#184 jess on 04.30.13 at 6:28 pm

The outstanding balance in undisputed unpaid taxes was $29 billion at 31 March 2012. Each year, the Agency writes off a certain amount of debt that it considers uncollectible. In 2011–12, it wrote off $2.8 billion.

http://www.oag-bvg.gc.ca/internet/English/parl_oag_201304_03_e_38188.html#hd3a

#185 Mukhtiar on 04.30.13 at 6:35 pm

Garth, I cannot believe how naive and gullible some people are still in Vancouver. When listings day on market show that the same home hasn’t sold in 323 days and that’s after it was taken off the market back in 2011. I think we all know where prices are headed in as you say the mouldy city. And there is absolutely nothing here financially to support the valuations. It’s all made up values. No one in Vancouver can support the gains it has seen in housing over the past 10 years. It is simply unsustainable and stupid to think you can have young people graduating college and university and affording themselves million dollar bull doze jobs in a city that has no real industry/prospects/ or incomes!

#186 Mukhtiar on 04.30.13 at 6:37 pm

What industry exists in Vancouver other than real estate transactions? Tourism? With a high dollar?

#187 Morgan on 04.30.13 at 6:55 pm

The macho bull$$*& on this blog is too much some days. I would be hard pressed to agree to a second date with anyone who spent the first one ‘explaining’ the ‘market, economy, etc.’ to me. Next time you go on a date, record yourself and listen to it afterward. It might give you some perspective.
Why does it never occur to men to support better pay for women’s work? That way we’d have an equal chance to whine about the gold-digging men who come out of the woodwork for our riches, and how we can sidestep the obligations of common-law marriage by making them pay us rent instead of co-ownership. Or why don’t the renting men decide to find wealthy, home-owning single women? Or wait, there aren’t many, are there? Maybe that should change? But no, the blog dogs here prefer traditional marriage roles… followed by very modern divorces.

Ouch. — Garth

#188 Dr. Hoof - Hearted on 04.30.13 at 7:10 pm

#185 Mukhtiar on 04.30.13 at 6:37 pm

What industry exists in Vancouver other than real estate transactions? Tourism? With a high dollar?

==================================
CALIFORNIA BILL COULD SHUT DOWN SMALL RESTAURANTS

http://www.republicbroadcasting.org/index.php?cmd=news.article&articleID=5172

The State of California has one of the worst proposals of any legislature in the country this year with a new bill that would force every restaurant and food service business in the state to commission an expensive “risk assessment” test for every menu item.

Such a test could cost thousands of dollars for every food item sold. This outrageous and cost prohibitive testing would certainly cause all but the biggest chain restaurants to go out of business almost instantly.

In another exercise in nanny-statism, California’s State Senate Democrats want this “risk assessment” conducted to determine whether food being sold “contributes significantly to a significant public health epidemic.”

The bill, Senate Bill 747, is an addition to the current health and safety codes and is currently set for a hearing on April 17. It was written and introduced by Sen. Mark DeSauliner (D, Concord).

The introduction of the bill clearly says that the law would require the food service companies to pay the state for the testing in order to fill state coffers. It notes that without the assessment, the state would have the right to shut an offending restaurant down.

etc.

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

The future is US versus Twin Vampire Squids….Banksters and Big Brother

#189 Darklan on 04.30.13 at 7:57 pm

@#186 Morgan
Thank you Morgan for stating my sentiment so politely. I would also like to add that you should look in the mirror and ask what do you have to offer an intelligent woman with great education (including a Math major among others), emotional depth greater than a teaspoon and great physical fitness?
Maybe that’s why its easy to hide behind stereotypes….

#190 Daisy Mae on 04.30.13 at 8:06 pm

“Everyone is free to moan about central bank policy which they can neither control nor influence. Or, they can structure their lives, as people always have, to adapt to and profit from, current circumstances. — Garth”

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

True. The situation is what it is. Unfortunately. We just have to pick up the pieces and move forward. Damn shame…

#191 Craig on 04.30.13 at 8:23 pm

The US debt is so enormous, most of us can’t even comprehend it. The common number thrown out there is $15 Trillion but that is simply an accounting privilege, in reality the number is around $100 Trillion.

Insane!

$100,000,000,000,000.00

Now do the math on the debt with an increase of just 1% of Interest…then 2%…then 4%….

Now you see why rates are going to remain status quo under Obama….for at least 3 more years.

#192 -=jwk=- on 04.30.13 at 10:59 pm

Would anyone who bought a house more than ten years ago (ie Craig) please STFU. If Maria buys a 600k semi with income of 130k/yr she will NOT have any money to invest. None. She will own one highly leveraged asset representing 100% of her net work. With today’s prices you can’t have a home and a retirement fund. Pick one. The smart people are picking retirement fund.

Again, if you have owned a home for 15 years, GOOD FOR YOU, but that doesn’t help anyone considering buying a home TODAY

We used a professional landlord and rent a really nice side split on 50x120foot lot for $1500/mo. Or we could by the exact same house, by the same builder, at the same time, around the corner for 649k. We’ll rent, thanks. When we sold our condo we bought two houses in Florida that pays our rent anyway….

#193 Zack on 04.30.13 at 11:11 pm

Maria is successful: she saved $100,000 while paying high rent. She is careful with her money: no risky investments there. She has modest goals: working until she’s 30 before buying half of an old house in a good neighbourhood.

Because the current home-owners demand ridiculously high prices, she becomes cute, house lustful, and doesn’t need a house anyway.

Garth, you should be ashamed of yourself for your lack of respect for those that are the “good guys” in the midst of all the foolishness.

#194 gman on 05.01.13 at 12:16 am

#162 Dorf
Cost of co-habitation agreement can be had for under $700 if you shop around .Your lawyer draws out the paperwork and then your squeeze goes to another lawyer to explain the bad news to her and witness her signature.

#195 Freebird on 05.01.13 at 12:21 am

#189 Darklan
——————–
@#186 Morgan
Thank you Morgan for stating my sentiment so politely. I would also like to add that you should look in the mirror and ask what do you have to offer an intelligent woman with great education (including a Math major among others), emotional depth greater than a teaspoon and great physical fitness?
Maybe that’s why its easy to hide behind stereotypes….
——————
So true. Most of the more over the top comments I just scan and ignore as they’re not worth the life energy to engage them. I will say even my husband (who is secure enough to not hide behind such back country comments) responded to one comment by saying, “if all it takes to impress a woman you’ve just met is Cole Haan shoes, Rolex watch and some brand name suit – and how would she know unless you told her – you get what you pay for.” Most of our women friends are educated, intelligent and very well paid. There are gold diggers, spend thrifts, and clueless in both genders. We’ve known two women whose exes went after them for alimony and half of a house they didn’t help buy in the first place. No, they weren’t successful.

#196 gman on 05.01.13 at 11:24 am

@195 Freebird
If most of your women friends are “educated ,intelligent and very well paid,”they can put down half the down payment on a house and split the expenses.
I know women who owned properties make their new husbands sign prenups.We are talking about middle aged people here who have been through marriages before and usually have kids to support.People also don’t want to get screwed out of their private and government pensions as the “gold diggers” go after these too.
Someone once told me “you don’t know how good your spouse is until you divorce them”In other words if they didn’t try to screw you ,you know they were a good person.
Your husband is probably quietly laughing inside reading all the comments here.

#197 lee on 05.01.13 at 1:20 pm

The $363,202 NW number is for households. The median is about half that number. I think 97 was looking for individual numbers. I don’t know how to link you to the article but it’s the July 30, 2012 entry on the Stats Chat website citing an Environics Analytics report.

#198 Soylent Green is People on 05.01.13 at 3:29 pm

PLEASE REMEMBER THE FOLLOWING

The money Stephen Harper and Cashmere Tony Clement have lost is 3+ BILLION

—> UP TO 2009

Since 2009….. —> well easily they have “lost”

FIVE BILLION SINCE THEN !!

http://t.co/DOdeeWjy4s

But this is about more than $3.1 billion, and Ferguson’s half-assed reportage is part of the reason why it’s about more. Although, for the record, it’s worth noting that we’ve wandered down this road before. Sheila Fraser’s parting shot as Auditor-General was a devastating expose of how then-Industry Minister Tony Clement had diverted $50 million away from a border security fund to create a slush fund out of which his constituency office doled out “infrastructure” money to communities in his own riding for important projects like gazebos and sidewalks.

……………..

#199 Dorf on 05.01.13 at 9:46 pm

I passed out drunk on a bus stop bench, and $3B fell out of my pocket and I lost it. Crap !! I hate when that happens !

Seriously, if you made $8/hr at a convenience store and you were $2 short on your cash, you’d be fired.

What a shameless lack of accountability.

#200 Dorf on 05.01.13 at 11:34 pm

“The macho bull$$*& on this blog is too much some days. ”

– It’s almost as bad as the angry man-haters that make long-jump conclusions based on their own biases and resentment, more interested in a heated argument than an intelligent debate.
Make a compelling argument or a point, would you please ?

– My experiences are fact, and I don’t like the experiences I have had, any more than you do. I am not concerned with “how it reflects on all women in general” and neither should you.
Most rapists, murderers, and child molesters are men. I’m not defending them, and they do not at all reflect on me in the least. I do not take offence to you denigrating them.

– I am sorry you all take my statements so personally, I don’t think any of it relates to any of you, does it ?

“Most of the more over the top comments I just scan and ignore as they’re not worth the life energy to engage them.”

– Ha ha, I don’t believe you ! I think you seek them out and give them special attention, maybe you like to tell everybody how they should think, according to you ?

“I will say even my husband (who is secure enough to not hide behind such back country comments) responded to one comment by saying, “if all it takes to impress a woman you’ve just met is Cole Haan shoes, Rolex watch and some brand name suit – and how would she know unless you told her – you get what you pay for.”

– You have trained him well, he thinks just like you ! I bet he doesn’t disagree with you on anything, and he jumps to the same wild conclusions in addition to forming whatever opinion that you do. Terrific !

I wear a cotton shirt, denim jeans and Vans running shoes. My work does not require that I wear a suit and I never wear a watch, I don’t even own one. All my dates are dutch and we find our own way there. I drive my used pickup, and nobody knows I have anything but what they see. The last thing I want to be seen as is a wallet with a penis. I do not try to impress anybody with my finances, so they never know either way. They just want someone who will help them buy a house. Anybody.

From all your comments, I have learned that all women are intelligent, well educated, and well paid, in addition to being of generally good character and pure of spirit.
Just like all men, right ?

“We’ve known two women whose exes went after them for alimony and half of a house they didn’t help buy in the first place. No, they weren’t successful.”

Your sense of fairness to both genders is compelling. You rage in your defence of a woman who “takes her half and splits” but if Sir Penis does it, he’s rightfully denied, and you gleefully revel in that fact.

You see how hard it is for me to find an intelligent woman ?

#201 Dorf on 05.02.13 at 1:05 am

#196 – I echo.

gman got me started, don’t blame me…

I was caught in this trap, like an innocent lamb.