Protection

protection1

You know the market’s in trouble when houses get the same treatment as flat screen TVs. But this is exactly what desperate realtors are reduced to these days. The so-called Buyer Protection Plan is sweeping through the Vancouver real estate biz, with about a hundred agents so far signed up.

You buy a sexed-up, web-smart TV at Best Buy and then find it cheaper at Costco? No probs, says BB. We’ll refund the difference.

You’re scared to buy a million-dollar fixer-upper in a Van hood because houses are falling? No worries, say the realtors. We’ll protect you. Sort of.

The bold idea: if the house you buy today is worth less in a year (almost a 100% certainty in most of the Lower Mainland) then up to 5% of the purchase price is refunded. For this to happen you need (a) a realtor offering the plan, (b) a seller willing to put 5% of the purchase price into a trust account for a full year and pay a lawyer to do so, (d) a premium payment of $299 and (c) statistical evidence of a price drop – not in the value of that house, but in average prices as determined  by the real estate board.

So, it’s useless. Every house is unique. A buyer might only benefit if the home were appraised independently in a year, but that could easily (and legally) be challenged by the seller before funds were handed over. And a limit of five per cent? Pshaw. If I were buying in Van these days I’d want something closer to 20% – and no buyer alive is going to put $300,000 into a non-performing trust account upon unloading a $1.5 million house.

But the Buyer Protection Plan does serve one useful purpose. It screams loud and clear: Buyers beware! This market blows!

Despite assertions to the contrary, Canadian real estate is on exactly the path I anticipated. Sales have dropped 15% nationally and the traditional April rebound has been limp. In Toronto new condo sales have collapsed 55% and construction has fallen 73%. Now we have the latest numbers on how homebuilders are doing across the country. Not good.

Housing starts were 25% lower last month than the same time a year ago, even though mortgage rates are a tad lower. No surprise that condos led the decline, or that Ontario and BC are wobbling the most. The massive overbuilding which has gone on for the past decade, paving over all that useless farmland around major cities, is coming to an abrupt end. So now we have to worry about jobs.

In a few days we’ll get the latest employment numbers. The last ones were, as economist Doug Porter put it, “about as ugly as it gets.” But there’s more ugly to come. Our house horniness has allowed a huge whack of the economy to become dependent on real estate – sales, construction and financing. The Canadian unemployment rate, at 7.2%, is now just  hair under that of the US, which has been falling steadily. As the Yanks found out four years ago, people worried about their jobs don’t buy houses.

The mortgage brokers’ association economist (Will Dunning) has already gone on record as forecasting 190,000 jobs will be lost in that business alone, thanks to the F-induced housing meltdown. Add to that all those guys who spent the last decade drawing overtime pay erecting towers full of little concrete boxes.

In the condo epicentre, the godless GTA, construction crumbled 8% just from March to April. Last spring there were 4,716 new starts, and last month only 1,259. How can you call a 70% erosion anything other than a crash?

Says Dunning: “We’re going to see a significant impact as housing starts continue to move downward.”

Says BMO economist Sal Guatieri: “Housing has been a tailwind for the Canadian economy for most of the past decade, now it’s becoming a headwind.”

None of this should surprise you, yet try getting your mother-in-law to understand why you rent, or explaining to the boys at work why you’re selling your house. Most people remain in a fog. When it lifts, too late.

I spoke today with an air force officer being redeployed to Ottawa. It took him and his wife a full year to sell their house close to the last posting in southern Ontario. They dropped a bundle. “Never again,” he said (even though the government picks up the tab for any real estate losses). “When guys ask me now where in the city we bought, I just tell ‘em the area. I’m not going to argue about leasing.” Real soldiers don’t rent. Or admit it.

You want a buyer protection plan? Keep reading this pathetic blog. Woof.

142 comments ↓

#1 Mr Happy!! on 05.08.13 at 8:50 pm

not gonna say it…

#2 Smoking Man on 05.08.13 at 8:50 pm

1-1+1

#3 tulameen on 05.08.13 at 8:51 pm

FINALLY 1ST :)

#4 Randy on 05.08.13 at 8:51 pm

Leafs…Wake Up…

#5 Kelly on 05.08.13 at 8:54 pm

Thankfully, I sold my van west tear down in March. No buyer protection plan!

#6 TurnerNation on 05.08.13 at 8:54 pm

Reasonably this weblog could create a ‘1-900-LO-RIDER’ advice line, at $5.99/min + PST GST HST.

Whereupon our forum host would talk to the following topical questions:

Hypothetical people and their hypothetical investments.
Real Estate.
The wild road ahead.
Guy talk.

However the following topics would be verboten:

The Leafs.
Animal Husbandry.
Matters of the Heart.

#7 brian on 05.08.13 at 8:54 pm

Finally sanity prevails

#8 AK on 05.08.13 at 8:58 pm

Another U.S. Hedge Fund Manager gloomy on Canadian Banks.

Haven’t these guys heard of CMHC?

Eisman Is Gloomy on Canadian Housing

Gloomy on Canadian Housing

#9 Craig on 05.08.13 at 8:58 pm

Renting is easier said then done. Not much out there, which creates a whole different dilemma.

#10 Lilyflor on 05.08.13 at 8:59 pm

Buyer protection plan, lets see how many greater fools fall for that. Necessity mother of invention, or should I say desperation

#11 ReCharts on 05.08.13 at 9:03 pm

http://recharts.blogspot.ca/2013/05/to-bidding-wars-debunked-may-08.html

http://recharts.blogspot.ca/2013/05/gta-bidding-wars-debunked-may-08_8.html

And some scary numbers for active listings above and under 1mil:

DanforthBeaches 267
0-1000000 262
>1000000 5
DownTown 390
0-1000000 197
>1000000 193
NorthEast 578
0-1000000 501
>1000000 77
NorthWest 391
0-1000000 383
>1000000 8
NorthYork 950
0-1000000 373
>1000000 577
SouthEast 520
0-1000000 493
>1000000 27
SouthWest 588
0-1000000 493
>1000000 95
Grand Total 3684

The maps of the areas used above can be seen here
http://recharts.blogspot.ca/2013/04/april-sales-stats-preview.html

#12 Patient in Richmond on 05.08.13 at 9:05 pm

to all people who claim to be first or who actually are first and have to announce this i must say : ” you have no life ”

cheers

#13 wednesday thoughts on 05.08.13 at 9:08 pm

HI Garth,
Saw another house. Buyer just really wants to sell but upon a third showing decided it wasn’t for us. Even with the reduced price, it’s just too expensive and not ideal. The realtor who is lovely nicely reminded us that we shouldn’t expect to get what we want for our house either. Honesty is valuable. Two other houses that we looked at sold this week with price drops. Amazing how many high end homes are on the market right now. I really thought we might buy a house today… but just couldn’t pull the trigger. My gut tells me to wait this out. Keep emotion out of the game. Thanks Garth for all your posts daily, keeping us grounded. On another front, we just put another chunk of change in the market and made another $2500 is the last couple of days. It’s really amazing watching the investment account go up. This blog is keeping me focused on building up the investment account, goal is to hit $1 million in the next few years.. and then I feel like the future is really bright. This along with a paid for house and some commercial investments makes retirement look appealing and earlier then we thought. Now we just have to continue to control those urges to live in a snow flake neighbourhood with more desirable homes and schools. My mantra… be happy with what you have. Repeat over and over.

#14 EastVan on 05.08.13 at 9:10 pm

The Georgia Straight Newspaper once known for its political journalism now devotes 10 to 15 percent of its ink to advertising new condos. In addtion it has a Real Estate column (last week advocating property transfer tax decreases), and an Urban Living section (last week telling readers how “hip” they would be if they bought a new condo at a development being advertised on the opposite page).

Sad really.

#15 Small Town Steve on 05.08.13 at 9:10 pm

On the bright side the stock market is going bats&$t bullish!!

#16 Halifax Observer on 05.08.13 at 9:12 pm

The government does not cover all RE losses for military members. The current rule is 80% of the loss, up to a total of $12,000. If markets have been deemed “depressed,” more can be recuperated but I have heard that the process is an ordeal and can take years…….kind of like making good on this price guarantee the realtors are throwing around.

I was recently posted to Halifax and decided to lease despite the “huge gains” the realtors claimed the shipbuilding contract would bring. As that procurement continues to fall apart, I am becoming more and more proud of my lease. I am one of the highest paid members in the forces so it really floors people when I tell them I am a lowly renter. I try to avoid discussing my feelings on RE because I have actually brought a couple of my coworkers to tears. It is a very emotional asset and the amount of denial surrounding the coming RE storm is truly astounding.

You are correct about the 80%, but my friend is looking forward to a much fatter cheque. — Garth

#17 Mister Obvious on 05.08.13 at 9:13 pm

Next bold idea: Should the average price in your area fall in one year’s time you will be refunded double the difference in air miles (some restrictions apply, must be over 60, offer not valid in Vancouver, Toronto or outlying areas.)

(BTW, That’s one disturbing picture tonight)

#18 thiscountryisgoing down the toilet on 05.08.13 at 9:14 pm

Buyer Protection…….from the realturds…….using the sellers money…..Bwahahahahahahaahahahaa oh christ…I pooped my shorts.

Here’s a quote from Adam Smith……1722 I believe in his immortal work..The Wealth of Nations…….

“To widen the market and to narrow the competition, is always the interest of the dealers…The proposal of any new law or regulation of commerce which comes from this order, ought always to be listened to with great precaution, and ought never to be adopted till after having been long and carefully examined, not only with the most scrupulous, but with the most suspicious attention. It comes from an order of men, whose interest is never exactly the same with that of the public, who have generally an interest to deceive and even oppress the public, and who accordingly have, upon many occasions, both deceived and oppressed it.

The Wealth Of Nations, Book I, Chapter XI, Conclusion of the Chapter, p.267, para. 10.”

Caveat Emptor buyers………beware of sleazy promises made by sleazy desperate people.

#19 An Importation in Quebec on 05.08.13 at 9:18 pm

I find April really was a rebound. Or a dead cat bounce? Pick your choice: a) mortgage people found a back door to the punch bowl, like a zero-down-cash-back in disguise of something legal; b) Garden Gnome is getting willfully blind; or c) both.

#20 Dog on 05.08.13 at 9:24 pm

The Canadian unemployment rate, at 7.2%, is now just hair under that of the US, which has been falling steadily. ————————–
Yet the US labour participation rate is falling too! Worse since the 90’s. this seems to be accurate measure.

#21 Halifax Observer on 05.08.13 at 9:29 pm

One more note to pass on Garth. I was speaking to a former conservative MP two weeks ago and RE came up. He claims to know you well and respects your views on most things (he was two beers in otherwise he may have held back more on the praise). His exact words on the future for Halifax Real Estate were, “The recent buyers in this city are going to take a $hit-kicking if they have to sell in the next few years.” Well said.

#22 My on 05.08.13 at 9:32 pm

I’m a military member and have several friends who are. One bought a condo in Victoria last year (despite my suggestions that they may want to reconsider) because they believed real estate was far more intelligent than renting in the market or the military housing offered. Sure enough – he was posted three months ago and the condo hasn’t sold. It’s incredibly difficult
To be sympathetic when there is no surprise as to what to happen. And why should the Canadian government pay out military member who bought housing in inflated communities? There’s a difference between selling in the military definition of a “depressed” community and
Normalization.

#23 sue on 05.08.13 at 9:37 pm

Just watched House Hunters (US) with a couple spending 130K on a 2000SF house. I then started watching Love it or List Vancouver…wow, what a difference. They looked at a dated tiny bungalow for 1.3 million. LOL The guy was saying “The prices can only go up in this area…” Foggy thinking for sure.

#24 Happity on 05.08.13 at 9:41 pm

The snp 500 stock market is what’s in trouble.

It’s breaking all sorts of metrics compared to previous highs. The fundamentals or performance of most of these companies is no better than fraccin in Pennsylvania. The only major buyers are central banks, and those safe for grandma retirement funds.

By the end of this year, there will be more than a correction, and the greater fools will come to know a pain far greater than buying real estate in the last few years.

#25 wednesday thoughts on 05.08.13 at 9:42 pm

lots of vendor take back loans out there also.

#26 sanddancer on 05.08.13 at 9:54 pm

22 sue on 05.08.13 at 9:37 pm
Just watched House Hunters (US) with a couple spending 130K on a 2000SF house. I then started watching Love it or List Vancouver…wow, what a difference. They looked at a dated tiny bungalow for 1.3 million. LOL The guy was saying “The prices can only go up in this area…” Foggy thinking for sure.

FYI…the “guy” on this show is a actor not a realtor, he took his real estate liscence once he got the part !!!…I kid you not.

#27 Tom Vu on 05.08.13 at 10:04 pm

#11 Patient in Richmond on 05.08.13 at 9:05 pm

to all people who claim to be first or who actually are first and have to announce this i must say : ” you have no life ”

cheers

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

If live in Richmond…Landlord nutzi sez “no basement suite for you” !

Otherwise ..need scuba gear…

Bottoms up ! yours

#28 TurnerNation on 05.08.13 at 10:07 pm

Oh boy is that Bandit’s nemesis, Blackie?

Seeking alpha with zero hedge: I will begin buying long term puts on this ETF in the coming weeks. Should be good for a point of downside.

http://stockcharts.com/h-sc/ui?s=EWJ&p=D&yr=1&mn=0&dy=0&id=p46034027512

#29 AK on 05.08.13 at 10:12 pm

Another Hedge Fund Manager is gloomy on Canadian Housing.

Eisman Is Gloomy on Canadian Housing

Gloomy on Canadian Housing

#30 Happity on 05.08.13 at 10:12 pm

Central Banks Load Up on Equities

http://www.bloomberg.com/news/2013-04-24/central-banks-load-up-on-equities-as-low-rates-kill-bond-yields.html

#31 Marquis de Sale on 05.08.13 at 10:13 pm

Is there anyway the government can take away worker’s cottages like they want to take away worker’s DB pensions? I just read “Cottage Ponzi” where the authors state that since public roads lead to the cottages, they should be able to own them from the unionized workers. Are they simply envious jealousites?

#32 Canadian Watchdog on 05.08.13 at 10:14 pm

Central banks don’t buy stocks. — Garth

LOL.. Yes they do.

Bank of Japan. PDF (ETF Stocks)

Bank Of Israel To Double Down On Equities

As for the Bank of Canada.

Bank of Canada Act.

18. The Bank may

(g) for the purposes of conducting monetary policy or promoting the stability of the Canadian financial system,
(i) buy and sell from or to any person securities and any other financial instruments — other than instruments that evidence an ownership interest or right in or to an entity — that comply with the policy established by the Governor under subsection 18.1(1), and

(ii) if the Governor is of the opinion that there is a severe and unusual stress on a financial market or the financial system, buy and sell from or to any person any securities and any other financial instruments, to the extent determined necessary by the Governor;

That should explain everything in a nutshell. You can follow the Bank of Canada's daily securities interventions on this page. And you all thought the TSX was going up from investors buying. Pffft.

I misspoke. However I am not aware of the BoC purchasing equities. — Garth

#33 Saint Herb on 05.08.13 at 10:15 pm

The developer who bought my houses/land 1.5 years ago in Vaughan just put it for sale again. Not sure if developer is worried about a correction or just trying to make some quick easy money. What do you guys think?

He would make money at his asking price, but it is peanuts compared to what he would make if he built and sold the houses he has planned and approved at current prices.

Does anyone know the cost/SqFt of new (higher end) construction townhouses? I’m trying to estimate what his cost of construction is. He mentioned to me once that they were going to be big and full of granite, marble and wood.

#34 Just Say No on 05.08.13 at 10:18 pm

I sold in 2002 and the house tripled in value since? So why don’t we compensate sellers for the gains the buyer gets while we are at it? Nobody should ever lose……it’s different this time……caution: do not touch real estate for at least a year…..all together now stand back….avoid it at all cost….let the losers of losers play this game…….

#35 Goddess of Kamchak on 05.08.13 at 10:19 pm

These days I don’t know what’s worse: the buyer protection plan ads or the robot Christie Clark for premier ads. I’m totally pvr-ing everything here on out!

#36 Vlad's Your Uncle on 05.08.13 at 10:22 pm

“Central banks don’t buy stocks.”

You got to be kidding. Have you never heard of the “Plunge Protection Team” in the U.S. whose official name is “Working Group on Financial Markets”? It is made up of the Treasury, the FED, the SEC and the CFTC. They intervene in markets to protect from crashes. The truth is the U.S. stock market is kept afloat by massive FED purchases in the bond market and purchases by the “Plunge Protection Team”. The whole thing is a house of cards. A Ponzi scheme on a massive scale.

#37 B on 05.08.13 at 10:23 pm

Awesome post tonight, Garth. Really enjoyed it.

#38 BC bring cash on 05.08.13 at 10:24 pm

#2 Smoking Man.
Like your Kindergarten math. 1-1+1 must mean you are declaring to be 1st. Your brilliant.

#39 cramar on 05.08.13 at 10:28 pm

What a hair under $1,000,000 buys you in:

Vancouver, BC

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=13087873&PidKey=-158166100

Toronto, ON

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=13078736&PidKey=-1484052848

Leamington, ON

http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=12626314&PidKey=-1701413500

#40 Tom Vu on 05.08.13 at 10:30 pm

Much glad Maple Syrup laughs lost (choke choke choke).

I have copy of Don Cherry’s contract…

If Maple Laughs go into next round…Cherry must wear French Maids outfit….that is terrible thought to meditate on…..even for most godless area of Canada.

#41 Patiently Waiting on 05.08.13 at 10:32 pm

When realtors are offering a ‘nice bottle of wine’ to attract crowd into an Open House, or when a seller is offering $10,000 towards home upgrades after 2 price reduction of over $40K in a traditionally hot neighborhood in Ottawa during a busy spring season, THAT is a sign of a slowdown.

Buyers, Beware!!

#42 f on 05.08.13 at 10:34 pm

#26 that was a good 1

#43 What about CMHC? on 05.08.13 at 10:40 pm

Great post!

BB, FS, WM and Costco usually never carry the same model. All protections are fake.

#44 f on 05.08.13 at 10:53 pm

# 37 cramar the 1 in Vancouver is on a very busy road

#45 Sacola on 05.08.13 at 11:04 pm

U.S. unemployment is much higher than is being reported since their participation rate is falling. Food Stamp usage is also at a record high in the U.S.. I still would rather keep my money in individual blue-chip CDN stocks. The U.S. $ is the most overvalued currency in the industrialized world.

DOW year-to-date, +16.2%. TSX year-to-date +2.2%. Yes, good thinking. — Garth

#46 Snowboid on 05.08.13 at 11:05 pm

Based on past experience, whether it is a ‘guaranteed sales plan’ or a ‘buyer protection plan’ the RE company and its’ supporting board will have an ‘out’.

I can almost guarantee that the seller, and maybe the buyer, will lose out in the end.

#47 Smoking Man on 05.08.13 at 11:06 pm

Muslims fastest growing religion, throw in youth under employment, simple goals that were a given to the boomers…. Too youth, a dream..

Machine, you better address this and get the kids on side, pay them darn it, otherwise your kids will pay your debt…..

#48 FTP - First Time Poster on 05.08.13 at 11:07 pm

I noticed the shiny lil red trophy in the top right corner Garth – nice job! I hope you realize that you weren’t voted due to financial advice, real estate advice or any other type of advice. Those votes were cast as a vote for your honesty and integrity – something very few people have these days.

#49 Confused on 05.08.13 at 11:08 pm

“(i) buy and sell from or to any person securities and any other financial instruments — other than instruments that evidence an ownership interest or right in or to an entity — that comply with the policy established by the Governor under subsection 18.1(1), and”

Isn’t the defenition of a share evidence of an ownership or right to an entity and an entity for instance a corportion? So to me that reads that they are not allowed to buy shares. Is that the wrong interpretation? To me other than are key words there.

#50 Steve White on 05.08.13 at 11:34 pm

I read a report recently discussing the stages of wealth in a society…

1) you are poor and you know it
2) you are richer, but still think you are poor
3) you are rich and you know it (probably 1980’s US)
4) you are poor, but still think you are rich

that debt bubble makes sense

#51 Tom Vu on 05.08.13 at 11:53 pm

#38 BC bring cash on 05.08.13 at 10:24 pm

#2 Smoking Man.
Like your Kindergarten math. 1-1+1 must mean you are declaring to be 1st. Your brilliant.

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

Hold on

1-1+1 could = 1-(1+1) = 1-2 = -1

Thus = less than zero

#52 Tom from Mississauga on 05.08.13 at 11:54 pm

So hopefully a bad job # this week. The CAD is hurting my big S&P500 run up. Gee, I didn’t know I was so selfish.

#53 Vangrrl on 05.08.13 at 11:55 pm

I rent in an east Van hood that is half gentrified and slumified. It’s bizarre. Some mornings as I walk my dog the ladies of the night are just stumbling home (they say hi, they like my dog) and as we return an hour or so later the yuppie parents are dropping their kids off at the school down the street. There are car and house break ins pretty regularly, cops patrol daily. Great area for restaurants though and very central. A house two blocks away (fixed up quite nicely) has been for sale for about a month, price drop from 1.09 mill to 998K. Good luck with that. This delusion has got to end soon.
I just shake my head, but I like renting here.

#54 Real Estate Tsunami on 05.09.13 at 12:21 am

# 50 Steve,
brilliant, but you forgot

5) You’re richer than you think!

#55 Real Estate Tsunami on 05.09.13 at 12:25 am

The BoC is either buying shares or not.
Should not be too hard to find out.
Get your bloodhounds on it.

#56 Sgip on 05.09.13 at 12:55 am

Harper and Baird on wrong side of history…

……

When The Guardian reported early today that renowned physicist Stephen Hawking had pulled out of a conference in Israel later this month to protest apartheid Israel,

… it made headlines around the world.

http://electronicintifada.net/blogs/ali-abunimah/stephen-hawking-confirms-he-pulled-out-israel-conference-due-boycott-not-health

.
.

#57 Julie on 05.09.13 at 1:04 am

http://armstrongeconomics.com/2013/05/08/ecb-admits-depositors-will-bailout-the-banks/

ECB will steal money from depositors. But it can’t happen in Kanada…..it’s different here…..

#58 cynically on 05.09.13 at 2:00 am

#45 – sacola – I’m surprised you have any money to put into Cdn stocks with your intention just expressed. You don’t think the Cdn $ is not overvalued?

#59 Buy? Curious? on 05.09.13 at 2:38 am

Garth, there’s no gawdamn accountability anywhere! Did you see Jeff Skilling, Enron, get out of jail 10 years early for his massive fraud? If anyone buys into this Buyer Protection program deserves what they get. Like those broads who get illegal plastic surgery or dudes that try to kayak across the ocean, they’re not victims. They’re mormons!

http://www.youtube.com/watch?v=FKFs72E479M

#60 Buy? Curious? on 05.09.13 at 2:42 am

Aw, sheet! I ment to say morons, not mormons. People who wear full body underwear to protect them from Satan are not stupid.

http://www.youtube.com/watch?v=tu4y7x9LRyY

#61 Mick on 05.09.13 at 3:19 am

Two neighbours across the street from me trying to sell their houses and covertly being in competition with each other. both WAY overpriced, like 100k by my estimates.
Been 4 months and I’ve seen a total of one buyer visit between the two of them. When will people figure out their houses aren’t worth what they want them to be?

#62 The real Kip on 05.09.13 at 3:40 am

“Add to that all those guys who spent the last decade drawing overtime pay erecting towers full of little concrete boxes”

Hey, don’t beat up on our overtime, it’s double time for me. I see the world in a different light when overtime starts, with a happy face :)

#63 Humpty Dumpty on 05.09.13 at 4:14 am

Looks like the godless EU has a Buyers Protection Plan of its own in place….

Asmussen clarifies EU Parliament: savers must bleed for bank rescue

http://translate.google.com/translate?sl=de&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&eotf=1&u=http%3A%2F%2Fdeutsche-wirtschafts-nachrichten.de%2F2013%2F05%2F08%2Fasmussen-klaert-eu-parlament-auf-sparer-muessen-bei-bankenrettung-bluten%2F

UK out of EU within six years – Nigel Farage
http://www.youtube.com/watch?v=zaUYDeVtG0Q

Oh ya, if your heading to south of France in the near future you may want to read this too….

Plant Reproductive Material Law, and it attempts to put the government in charge of virtually all plants and seeds. Home gardeners who grow their own plants from non-regulated seeds would be considered criminals under this law.

http://www.naturalnews.com/040214_seeds_European_Commission_registration.html#ixzz2SmOtEm00

If you plan to visit the French speaking southern side of Belgium, consider getting a berka.
You to get yourself in trouble for saying the wrong thing…

Six Belgian senators introduced a draft resolution in the Belgian Parliament that would make “Islamophobia” a crime punishable by fines and imprisonment. A person would be guilty if he “considers Islam to be violent, threatening or supportive of terrorism…” or “considers Islam to be a political ideology, used for political and military purposes to establish it hegemony.” If passed, the law would pose a devastating blow to the exercise of free speech in Belgium.

http://www.gatestoneinstitute.org/3692/belgium-erasing-christianity

So much for democracy and The Rule of Law eh G…

#64 drydock on 05.09.13 at 5:04 am

“BPOE BPOE where art thou BPOE.”

Bye the bye congrats on the award thingy on upper right of page.

#65 Aussie Roy on 05.09.13 at 5:18 am

Aussie Update

As the economy continues to deteriorate, today’s slash to 2.75 per cent is the lowest setting ever announced by the Reserve Bank after it started setting rates in 1990. It is also the lowest cash rate in 53 years. It could be seen as a tipping point.

Even with interest rates at record lows, the confidence to borrow for a huge mortgage required at today’s mind-boggling prices is close to non-existent.

Figures from the Australian Bureau of Statistics (ABS) Australian National Accounts show interest payable on dwellings as a percentage of household net income stood at 5.7 per cent in the last quarter of 2012. Record levels of household debt means it’s still noticeably higher than in 1989 when interest rates where in-excess of 17 per cent.

http://www.whocrashedtheeconomy.com/blog/2013/05/lower-than-emergency-lows/

http://au.finance.yahoo.com/news/interest-rates-not-emergency-gfc-064455316.html

#66 economictsunami on 05.09.13 at 6:14 am

It makes one wonder, what the present state of the RE market would look like, if Flaherty had just left well enough alone.

Like any addict, you must let them hit bottom but Jimmy the Fixer decided to go the interventionist route.

He failed to see: It took decades of credit induced/ debt filled spending & lending; now it’s time to work it off. In a consumption based economy we became credit/ debt impaired; with little reasoned thought given to our future.

Consumers were all ginned up on debt and the “solution” presented to more strongly spike the punchbowl.

Without other real income sources, the outcome could have only lead to a longer/stronger hangover…

#67 b on 05.09.13 at 7:49 am

Y-O-Y sales consistent in Ottawa after a bit of a slow start this year. Home prices are solidly higher while condos a bit lower y-o-y. The large inventory increase over the past few years is due to developers now listing new build on MLS, according to as local realtor.

http://www.hometeamottawa.com/stats.asp

#68 Sacola on 05.09.13 at 7:52 am

#58

I do not think the CDN $ is overvalued, I think the U.S. $ is overvalued based on trade and budget defecits. I think the Loonie will goto $1.10-1.15.

@ Garth,

The only U.S. stocks I would buy, and do own( 2 of them), earn majority of their revenue outside of the U.S. dollar.

As you would most likely agree, the bulk of returns in the stock markets are made over the long haul. That said, if one was to purchase the DJIA in May of 2004 when it cost $1.40CDN to buy a Greenback, and sold the index today, ones returns would be 7%, or much less than 1% annually.

I find it irrelivant what the index does in a year. And, as we all know, an index can trade contrary to the economy for a period of time before it corrects.

Canada is, and will be, the better country to keep ones investment monies in.

#69 Buy? Curious? on 05.09.13 at 7:54 am

On the lack of accountability theme, here is an article in the Star (I can’t read that paper anymore without laughing) about some fraudster that gets less than a slap on the wrist. It’s more like a job administered by a hand.

http://www.thestar.com/news/crime/2013/05/06/brampton_tax_preparer_gets_house_arrest_10k_fine_over_fraud_scheme.html

And here’s a documentary on those nasty mortgage brokers.

http://www.thestar.com/news/crime/2013/05/06/brampton_tax_preparer_gets_house_arrest_10k_fine_over_fraud_scheme.html

And marijuana is illegal?

#70 Tony on 05.09.13 at 8:14 am

Re: #8 AK on 05.08.13 at 8:58 pm

I guess you’ve never heard of credit drying up dryer than the Sahara Desert which is what will happen to the Canadian banks. I’m looking for around an 80 percent pullback in share prices with at least half of that being the market indexes falling from overvaluation.

#71 AK on 05.09.13 at 8:27 am

#68 Sacola on 05.09.13 at 7:52 am
“I think the Loonie will goto $1.10-1.15.”
——————————————————————–

I wish you Good Luck with that.

#72 jess on 05.09.13 at 8:40 am

Mr Carney dec 2012

http://www.bankofcanada.ca/2012/12/speeches/guidance/

so even if inflation rises –interest rates could stay low depending on output

http://www.bankofcanada.ca/wp-content/uploads/2010/03/mpr230409.pdf

#73 down and out on 05.09.13 at 8:54 am

#37 Cramar you are giving away our secrets down here good thing you did not mention why it is known has the sun parlor of Canada . Many GTA transplants believe they have found Shangri-La.

#74 Randis on 05.09.13 at 9:12 am

Garth great post as usual thanks for all your insight.

I just want to make sure I understand it correctly …

In paragraph 4 you say for this tedious plan to work we need “(b) a seller willing to put 5% of the purchase price into a trust account for a full year and pay a lawyer to do so” …

Then in paragraph 5 you mention “If I were buying in Van these days I’d want something closer to 20% – and no buyer alive is going to put $300,000 into a non-performing trust account upon unloading a $1.5 million house.” … Just want to make sure do you mean no SELLER alive is willing to put aside the money?

Is it me being dumb not understand something right or its just a typo? Thanks again Garth

#75 Achtung baby on 05.09.13 at 9:15 am

#12 Patient in Richmond … let us guess … are you a mental patient in Richmond? Is your name really AK-hole or Wayne-hole?

#76 Crash Calaway on 05.09.13 at 9:34 am

#4 Randy
“Leafs wake up!”

Don’t worry the Leafs will play the Canadians in the next round… but it’s going to be on the golf course!

#77 Canadian Watchdog on 05.09.13 at 9:35 am

#69 Buy? Curious?

about some fraudster that gets less than a slap on the wrist.

It's about risk versus reward as discussed in Akerloff and Romer's working paper, Looting. What are the consenquences of defrauding home buyers, falsifying income documents, etc., in exchange for $10K, $20K, $30K or whatever commision is it? Below are some recent RECO convinctions charged against realtors and brokers' fraudulent actions.

HOMELIFE PLUS REAL ESTATE LTD.

Date of Decision: 2013/04/05
Detail: On April 5, 2013, Mohammad Reza Ghazvini pled guilty to one (1) count of furnishing false documents in relation to a trade in real estate. Mohammad Reza Ghazvini was fined $5,000.

Date of Decision: 2013/03/15
Detail: On March 15, 2013, Mohammad Reza Ghazvini, on behalf of Homelife Plus Real Estate Ltd., pled guilty to one (1) count of failing to disburse trust funds as soon as practicable, after having received a request for a disbursement in the form of a court order. Homelife Plus Real Estate Ltd. was fined $3,000.

SARAZEN REALTY LTD

Date of Decision: 2013/03/18
Detail: On March 18, 2013, Ali Sleiman pled guilty to one (1) count of failing to comply with a written request for information in respect of a complaint filed against him. Mr. Sleiman was placed on one (1) year probation, ordered to pay $421,000 in restitution, and fined $10,000.

RE/MAX LEGEND REAL ESTATE INC.

Date of Decision: 2013/03/18
Detail: On March 18, 2013, Darrel Falconi pled guilty to one (1) count of failing to notify the Registrar, in writing, within five (5) days of a change to information that he previously provided on an application for registration. Mr. Falconi was fined $2,000.

OLIVIA SZCZEPOCKI-NATHALE

On March 11, 2013, Olivia Szczepocki-Nathale, pled guilty to one (1) count of performing the functions of a broker or salesperson while not registered as a broker or salesperson under the Act. Ms. Szczepocki-Nathale was fined $1,500.

GOLDEN LAND REALTY INC.

Date of Decision: 2013/01/21
Detail: On January 21, 2013, Yuen Huang Chiu, on behalf of Golden Land Realty Inc., pled guilty to one (1) count of obstructing an inspector conducting an inspection. Golden Land Realty Inc., was fined $5,000.

—–

Any similar level of action charged in the financial world would cost at minimum, tens of thousands of dollars in fines, not one or a few week's paycheck.

#78 drydock on 05.09.13 at 9:36 am

#51

1-1+1=1
1+1-1=1

You can’t just insert brackets because that changes the order of operations.What’s in the brackets has to be solved first which gives a different answer.

#79 Buy Low Sell High on 05.09.13 at 9:51 am

Penney Henney, Steve, Ronaldo:

I just wanted to clarify my comment from yesterday as I don’t think I did a good job of explaining what actually transpired in this particular case.

1. Very simply put, a house was on the market for almost 3 years in Toronto’s briskest real estate environment ever and obviously the market said to the owner “your price is too high!”

2. The agent who represented the buyer when it sold last week had previously represented the seller in 2011 when it could not fetch a price of $828k. Now, the market has only softened so how could this agent not have told his buyer client to whom he owes a fiduciary duty “Hey, Mr. Buyer, you know I couln’t sell this house 12 months ago when I had it listed for $828k but I think it’s a good idea for you to pay $940k for it today!” Reprehensible, to say the least!!

Condo Crash was right; this house was in need of major renovations and was a walk in, walk out, get back in the car. Of course the sale prices fixes all ills and deficiencies. This house should have sold for $800k!!

This buyer is going to find out when he moves in that the house had been for sale for a long time and maybe will consider recourse on his agent.

#80 NOTTOSURE on 05.09.13 at 10:06 am

Garth a question for you ? How much value is in a 2000 a month pension worth as far as value to your rule of 9o this is based at age 55. thanks.Is there a way to calculate this in to real dollars so I have a better idea where I stand for your formula

My formula does not fold unrealized pension payments into net worth. Nor should you. — Garth

I can realize the pension in two months as I will be 55 ,I just don’t know how I would calulate it into my net worth if I pull it as income.

#81 Ronaldo on 05.09.13 at 10:20 am

Who wudda knew. Even the dutch got caught up in the lust for cheap money. I thought Canada was bad at 165%. Try 250% for the Dutch.

http://www.marketwatch.com/story/stodgy-netherlands-is-nation-thatll-blow-up-euro-2013-05-08

#82 Holy Crap Wheres The Tylenol on 05.09.13 at 10:29 am

#51 Tom Vu on 05.08.13 at 11:53 pm
#38 BC bring cash on 05.08.13 at 10:24 pm

#2 Smoking Man.
Like your Kindergarten math. 1-1+1 must mean you are declaring to be 1st. Your brilliant.

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

Hold on

1-1+1 could = 1-(1+1) = 1-2 = -1

Thus = less than zero

Or have you considered that 1+1=0??????
1+1
=1 + sqrt1
=1 + sqrt [(-1)(-1)]
=1 + sqrt (-1) sqrt(-1)
=1 + i X i
=1 + (-1)
=1 – 1
=0

Do the math!!!

#83 bruce on 05.09.13 at 10:29 am

Walking away from a mortgage is easier than you think in Canada. As a Trustee I help many walk away from homes.
Believe it or not its easier in Canada than the US. By the time a home goes into power of sale and by the time they come after you takes about 3 years or more. The myth is that its more difficult in Canada. That is completely false.
Debt is a huge problem and its getting worse every day. Business is booming as I personally see thousands of foreclosures every day now.

#84 Holy Crap Wheres The Tylenol on 05.09.13 at 10:47 am

Sitting here in my particular section of Oakville one would not know that devastation is about to befall the home owners. One by one old homes bought and sold, next day a bulldozer comes in and then construction starts. Within two months a McMansion is born! Interesting times for sure. I am cognizant of the fact that even Oakville is not immune to this coming storm, however money flows here like there is no tomorrow!

#85 Screwed on 05.09.13 at 11:10 am

The US employment is NOT improving. Americans work less hours collectively than 33 years ago. There are no more jobs to be cut and many have given up trying to find meaningful work paying a fair wage. Instead temp work is on the rise which allows employers to negate on Obama care.

Garth, I don’t know what your agenda is but your bias toward the Canadian economy and your praise for the US economy makes me wonder what koolaid you’ve been served lately.

Whatever it is, stop drinking it.

#86 Canadian Watchdog on 05.09.13 at 11:11 am

Video: Concerns over potential bubble in Canada's housing market

"Moody's investor services even predicts that house prices could fall over 40% causing a severe economic shock."

#87 TS on 05.09.13 at 11:17 am

Like it or not, Aussie has lower its rate.
Will BOC higher its rate? they want to kill themself?

#88 Timbo on 05.09.13 at 11:21 am

http://www.cnbc.com/id/100723726

“The increase in inventories could reinforce the view that the pace of economic growth picked up in the first three months of the year, bolstered by businesses restocking their shelves.

In March, inventories of cars rose 1.2 percent, as did stocks of machinery.

Sales by wholesalers, however, unexpectedly fell in March, down 1.6 percent. It was the biggest drop in four years and confounded economists’ expectations for a 0.1 percent increase.”

Unexpected to Confounded…..print Ben they are chasing their tails….

http://www.just-style.com/news/another-fatal-fire-at-apparel-factory_id117789.aspx

The factory was closed when the fire took place, a different security guard said, adding that the fire might have originated in the factory’s storehouse, where electrical works were taking place.

On Tung Hai’s Facebook page, it said that customers include Primark, Penney’s Stores, Agora, E.Leclerc, Peacocks, New Look, AWG Mode Center, Fox Flag, NV Carodel, Point Zero, Members Only Clothing, NKD Vertrebs, Inditex and QS Stores.

Canada’s Point Zero just did a facepalm……

#89 Tom Vu on 05.09.13 at 11:28 am

#53 Vangrrl on 05.08.13 at 11:55 pm

I rent in an east Van hood that is half gentrified and slumified.
==============================
Love the logo, actually copyrighted !

E
VAN
S
T

East Van is the Beverly Hills for Surrey

#90 Skiffy on 05.09.13 at 12:06 pm

I recently found a new rental after looking for over 8 months(wanted a specific area). If rental units are so high in demand, why is no one building new rental buildings?

Will half the failed condo projects be sold off to REITs and switched into rental housing after everything is said and done? I’ve read that the last dedicated rental buildings in Toronto were built back in the 80’s or 90’s.

#91 Dr. Hoof - Hearted on 05.09.13 at 12:16 pm

#63 Humpty Dumpty on 05.09.13 at 4:14 am

Re the Food regulation issue.

Quote:

Plant Reproductive Material Law, and it attempts to put the government in charge of virtually all plants and seeds. Home gardeners who grow their own plants from non-regulated seeds would be considered criminals under this law.
=====

People better wake up, the noose is tightening. I’ll post some other links today .

As I stated before…people should think of themselves as being herded like animals.(aka hi – density = cage/pen)

” Food ” is used as a weapon.

Control food options = control people.

This can range from witholding of food to forcing GMO’s on people.

More Later

#92 Dr. Hoof - Hearted on 05.09.13 at 12:25 pm

Comparison of GMO and non-GMO corn – the real statistics will astound you!

http://www.thetruthseeker.co.uk/?p=70495

QUOTE:

GMO corn: nutritionally void

The nutrition statistics for GMO corn are bone chilling. Here is what the report indicates:

• Organic corn has 14 ppm of manganese. GMO corn has only 2 ppm.
• Real corn has 7 times more manganese!
• Organic corn has 6130 ppm of calcium. GMO is stripped down to 14 ppm.
• Real corn has 437 times more calcium!
• Organic corn has 113 ppm of magnesium. GMO corn is vacant, with only 2 ppm.
• Real corn has 56 times more magnesium!

GMO corn contains alarming glyphosate levels

The amount of formaldehyde and glyphosate in GMO corn is unbelievable. To break it down, American EPA standards allow glyphosate in water of up to .7ppm. European tests indicate that animals begin experiencing liver damage at .0001 ppm of glyphosate in water. Putting these two statistics together, America’s water levels contain glyphosate that is 7,000 times greater than the amount required for animal liver damage!

GMO corn takes that statistic up yet another notch. GMO corn contains 13 ppm of glyphosate, or the equivalent of 130,000 times more toxicity than EPA water standards!

The formaldehyde level of GMO corn is unspeakable

In a similar study on GMO corn, Dr. Huber found out that animals avoid GMO corn at all costs. When given a choice between both GMO and non GMO varieties of corn, animals always go for the real organic corn. Huber also found out that .97ppm of formaldehyde is toxic to animals. The GMO corn he tried to give the animals contained 200 times that amount!

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

My understanding is that some of these GMO’s “pest resistance” (selling point) is based on low uptake …or low content …..of key minerals as outlined above.

Hence the consumer becomes deficient in them and leading to numerous health problems.

YET…companies like Monsanto are fighting tooth and nail to fight disclosure and liability.

#93 Devore on 05.09.13 at 12:38 pm

#43 What about CMHC?

BB, FS, WM and Costco usually never carry the same model. All protections are fake.

I’ve used PP several times before, works just fine. Price match, plus 5% of the difference. The thing with Costco might be true, as they usually buy a shipment of whatever they can find cheap, so you always take your chances there, but they do have an outstanding return policy, which many people abuse to the extreme.

#94 MvA on 05.09.13 at 12:51 pm

I rarely comment but this bothers me. Here is your grade 7 algebra lesson for the day:

re # 51: 1-1+1 could = 1-(1+1) = 1-2 = -1

Don’t you remember BEDMAS? Order of operations… Smoking man is right.

re # 82: =1 + sqrt (-1) sqrt(-1) […] =0

You can’t take the square root of a negative. Duh.

No wonder people in this country have trouble understanding personal finance…

#95 jess on 05.09.13 at 12:58 pm

canadian watchdog

yeah, the lemon market or as mr. w. black calls accounting control frauds.

===============
http://www.bloomberg.com/news/2011-07-08/caterpillar-accused-of-demoting-tax-whistleblower.html
===================

Sean McKessy, a former Caterpillar executive, was appointed to head up a new SEC whistleblower office in August 2011.

http://www.corpwatch.org/article.php?id=15837
Monday, 06 May 2013 12:09
By Whistleblower Defense League, The Brooklyn Rail | Statement
http://truth-out.org/speakout/item/16200-a-letter-to-attorney-general-holder

#96 AK on 05.09.13 at 1:13 pm

#70 Tony on 05.09.13 at 8:14 am
“I guess you’ve never heard of credit drying up dryer than the Sahara Desert which is what will happen to the Canadian banks. I’m looking for around an 80 percent pullback in share prices with at least half of that being the market indexes falling from overvaluation.”
——————————————————————–
Hey Tony,

LOL!!!

Have a good day, Bud…

#97 AK on 05.09.13 at 1:18 pm

#75 Achtung baby on 05.09.13 at 9:15 am
#12 Patient in Richmond … let us guess … are you a mental patient in Richmond? Is your name really AK-hole or Wayne-hole?
——————————————————————–
Deal with it. And get a life.

#98 Craig on 05.09.13 at 1:37 pm

You folks that sit here day in and day out, praying that the housing market will crash, really need to get a grip. All these stories you dig up, video’s etc., are a dime a dozen on the internet.

If housing collapses 40% and you cheer, well I have news for you, everything else in Canada will collapse along with it.

Stock markets, employment, retail, etc., etc.

I am 10 times more concerned about a market crash that a housing crash, especially in the US. Their markets are a fabricated illusion, of immense proportions and when a catalyst comes along, watch out below!

The US feds are holding $4.3 Trillion in shares. What happens when they have to liquidate?

A stampede, computer selling, like we’ve never witnessed and 2008 will look like a speed bump.

At least home owners own something real….of value versus paper stocks that may end up worthless.

I will have a roof over my head but can renters say that if their landlords are forced to liquidate and they are punted to the curb with 5 days notice. They’ll have no where to live and their accounts will have been decimated.

Message to the renters; Be very careful what you wish for as nothing ever works out as exactly planned and sometimes things totally backfire.

Homeless and broke is not a nice combo.

My house may drop but so will stocks but I can say with complete confidence that my house will stabilize and head back up in value in due time. You cannot say that about all the stocks you hold. Some may never survive a meltdown as witnessed in 9/11 and again in 2008.

I’m not saying buy now, that would be foolish, as a pull back is imminent but I would also be very careful about selling and where you put that cash.

Good luck

#99 Patient in Richmond on 05.09.13 at 1:53 pm

#97 Ak

Yes i am a mental patient ,how did you know .I am impressed by your maturity .

Achtung ? Wusste gar nicht dass du auch noch Deutsch sprichts

#100 EB on 05.09.13 at 2:00 pm

“=1 + sqrt [(-1)(-1)]”
“=1 + sqrt (-1) sqrt(-1)”

Nope. sqrt(7 x 15) =/= sqrt (7) x sqrt(15)

#101 jess on 05.09.13 at 2:01 pm

===========
Pulp fiction: Asda’s ‘made in Italy’ tomato puree hails from China
Self-styled ‘tomato king’ appeals against sentence for fraudulently passing off Chinese tomato puree as Italian

http://www.guardian.co.uk/world/2013/feb/27/asda-italy-tomato-puree-china

#102 EB on 05.09.13 at 2:02 pm

Nuts, yes it does. Shouldn’t have tried to to that fast before a meeting…

#103 jess on 05.09.13 at 2:08 pm

..”Canadian companies have the option to use either U.S. accounting rules or International Financial Reporting Standards (IFRS), with roughly 20% of the S&P/TSX 60 choosing the American standards. With the switch from old Canadian rules to IFRS occurring just two years ago, there have already been some second thoughts, which raises the spectre of standards shopping. Encana, for instance, switched to using U.S. rules after just one year with IFRS..”

http://www.advisor.ca/news/industry-news/mfda-issues-6-million-fine-116363

MFDA issues $6 million fine

Advisor.ca ‎- 2 hours ago
MFDA uncovers one of largest frauds in its history and hands down $6-million fine

#104 Frank le skank on 05.09.13 at 2:18 pm

#98 Craig on 05.09.13 at 1:37 pm
Craig’s right, take your money out of equities, buy as many homes as the bank will allow and shut down this website. His convincing arguments have shown me the light, thanks Craig!

#105 bill on 05.09.13 at 2:28 pm

CVO?

#106 AK on 05.09.13 at 3:01 pm

#104 Frank le skank on 05.09.13 at 2:18 pm
#98 Craig on 05.09.13 at 1:37 pm
“Craig’s right, take your money out of equities, buy as many homes as the bank will allow and shut down this website. His convincing arguments have shown me the light, thanks Craig!”
——————————————————————-
LOL… I would rather listen to Peter Schiff. :-)

#107 Tom Vu on 05.09.13 at 3:19 pm

#94 MvA on 05.09.13 at 12:51 pm

#82 Holy Crap Wheres The Tylenol on 05.09.13 at 10:29 am
================================

Here enjoy!!!

\frac{1}{1+x^2}=\frac{1}{2} \left(\frac{1}{1-ix}+\frac{1}{1+ix} \right) \ .

And since

\int \frac{dx}{1+ax}=\frac{1}{a}\ln(1+ax)+C \ ,

\begin{align} \cos x\cdot \cos y & = \frac{(e^{ix}+e^{-ix})}{2} \cdot \frac{(e^{iy}+e^{-iy})}{2} \\ & = \frac{1}{2}\cdot \frac{e^{i(x+y)}+e^{i(x-y)}+e^{i(-x+y)}+e^{i(-x-y)}}{2} \\ & = \frac{1}{2} \bigg[ \underbrace{ \frac{e^{i(x+y)} + e^{-i(x+y)}}{2} }_{\cos(x+y)} + \underbrace{ \frac{e^{i(x-y)} + e^{-i(x-y)}}{2} }_{\cos(x-y)} \bigg] \ . \end{align}

#108 brainsail on 05.09.13 at 3:24 pm

Exciting day here in Austin. Traffic is grid locked. President Obama is giving a speech at my wife’s workplace later this afternoon. He is starting a new initiative focused on new job creation for the middle class. Maybe it will be on the news up there this evening. Look for the blonde with a crimson top.

#109 sciencemonkey on 05.09.13 at 3:28 pm

@98 Craig, it makes sense that things will be bad for everyone if there is a huge RE crash. I’d much rather be an employed renter than unemployed. However, beyond that, I find that the timing of the 2002 run-up has left real estate unaffordable for my generation.

What path would you recommend for a 22-30 yr old gen-Y, in a large Canadian city, who has finished school and started working? Should she purchase real estate at an income multiple of 6-10x?

If you don’t mind me asking, what year and at what income multiple did you buy your house?

#110 Canadian Watchdog on 05.09.13 at 3:30 pm

#103 jess

MFDA uncovers one of largest frauds in its history and hands down $6-million fine

But when it's Canada largest mortgage fraud in history, the RCMP says, "There just aren't enough police officers to investigate these crimes" Link

Slap on the hand — sweep it under the rug — hey look! — home prices are up!

Only in Canada.

#111 Tom Vu on 05.09.13 at 3:31 pm

#101 jess on 05.09.13 at 2:01 pm

===========
Pulp fiction: Asda’s ‘made in Italy’ tomato puree hails from China
Self-styled ‘tomato king’ appeals against sentence for fraudulently passing off Chinese tomato puree as Italian

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

I truth be known…we are making Italians too…MSG dependant strain that also not drag knuckles on ground.

Also unbreakable arms so not have speech impediment.

#112 elchavo on 05.09.13 at 3:33 pm

one hundred and tenth !!!!

#113 Craig on 05.09.13 at 3:52 pm

#104 Frank le skank on 05.09.13 at 2:18 pm #98 Craig on 05.09.13 at 1:37 pm
Craig’s right, take your money out of equities, buy as many homes as the bank will allow and shut down this website. His convincing arguments have shown me the light, thanks Craig!

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

Comprehensions obviously not your strength.

Can I get a blueberry muffin with that medium coffee please.

#114 jess on 05.09.13 at 3:54 pm

Robert MacLean is a former air marshal fired for an act of whistleblowing very interesting

7 years and still going….

http://truth-out.org/news/item/16283-homeland-insecurity-seven-years-untold-dollars-to-silence-one-man
http://whowhatwhy.com/2013/02/21/the-saga-of-barrett-brown/

’leak-focused’
http://wikileaks.org/the-gifiles.html

#115 Craig on 05.09.13 at 4:02 pm

#109 sciencemonkey

What path would you recommend for a 22-30 yr old gen-Y, in a large Canadian city, who has finished school and started working? Should she purchase real estate at an income multiple of 6-10x?

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

Like I said in my post;

I’m not saying buy now, that would be foolish, as a pull back is imminent…..

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

As I said, I would wait. I expect a pullback of 15% and if the others are right and its greater than you win and the multiples become far more manageable.

My kids are in that age range and that’s exactly what they’re doing…It’d be terrible for any young person to buy now and lose 15% or more…maybe even far more, if Garth and others are right.

Wait a year and watch the area you are interested in. Set up a spreadsheet and track the houses.

#116 Calgary Rip Off on 05.09.13 at 4:04 pm

@#60 Mormonism has many different sects. After Joseph Smith was killed in Liberty Jail his son was the logical successor but Brigham Young declared himself the successor. The Smiths stayed behind in Missouri and the RLDS church which still operates today was there. There are also the Strangites in Wisconsin. And of course the Utah Mormons. The curious thing is the inconsistencies with early Brigham Young Mormonism which involved “blood atonement” and polygamy neither of which have anything to do with Mormonism. Apparently Young didnt understand the english language in reading their own scriptures. If a person reads the Book of Alma(in the Book of Mormon)it states clearly that a person is to have one wife, not two, not three, so anyone thinks that underwear and funky polygamy have anything to do with Mormonism in its pure form are deluded and should examine the books for themselves because polgamy in early Utah was just an excuse for early settlers to populate the place and get a different booty call in a different bed every night which has nothing to do with Mormonism or Christianity.

As a sidebar, there was nothing mentioned about Calgary here, which apparently continues its rip off prices.

#117 Dr. Hoof - Hearted on 05.09.13 at 4:22 pm

29 Shocking Facts That Prove That College Education In America Is A Giant Money Making Scam

http://endoftheamericandream.com/archives/29-shocking-facts-that-prove-that-college-education-in-america-is-a-giant-money-making-scam

Here’s a few:

#1 In 1993, the average student loan debt burden at graduation was $9,320. Today it is $28,720.

#3 Young households are being hit particularly hard by student loan debt. In America today, 40 percent of all households that are led by someone under the age of 35 are paying off student loan debt. Back in 1989, that figure was below 20 percent.

#4 According to the Consumer Finance Protection Bureau, Americans owe more than a trillion dollars on their student loans.

#15 At most U.S. colleges and universities, the quality of the education that you will receive is very poor. Just check out some numbers about the quality of college education in the United States from an article that appeared in USA Today….

-”After two years in college, 45% of students showed no significant gains in learning; after four years, 36% showed little change.”

-”Students also spent 50% less time studying compared with students a few decades ago”

-”35% of students report spending five or fewer hours per week studying alone.”

-”50% said they never took a class in a typical semester where they wrote more than 20 pages”

-”32% never took a course in a typical semester where they read more than 40 pages per week.”

#21 If you think that you will be able to “beat the odds” and land the job of your dreams once you graduate from college, perhaps you should consider these numbers….

-In the United States today, approximately 365,000 cashiers have college degrees.

-In the United States today, 317,000 waiters and waitresses have college degrees.

-In the United States today, there are more than 100,000 janitors that have college degrees.

#17 Federal statistics reveal that only 36 percent of the full-time students who began college in 2001 received a bachelor’s degree within four years.

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

Many claim the Education bubble may exceed the RE bubble.

#118 Dr. Hoof - Hearted on 05.09.13 at 4:46 pm

From whispersfromtheedgeoftherainforest.blogspot

http://whispersfromtheedgeoftherainforest.blogspot.ca/2013/05/turning-off-taps.html

To bring about that “soft landing”, the Post notes the Federal Government:

has attempted to curb CMHC’s growth and reduce taxpayers’ exposure by making it prohibitively difficult to obtain an insured mortgage backed by the federal government. For one, amortization terms were trimmed from a high of 40 years to a 25-year maximum. Furthermore, Ottawa capped the amount it is willing to backstop at $600-billion in an attempt to curb the amount of bulk insurance in CMHC’s portfolio. It is noteworthy that, according to CMHC’s annual report released Monday, it reported that it is insuring less mortgages in dollar terms, roughly $566-billion, in 2012, than it has in recent years.

Having reined in its lending activities, Ottawa also moved to tighten control and oversight of CMHC “to ensure its commercial activities are managed in a manner that promotes the stability of the financial system.” Mr. Flaherty criticized the extent to which CMHC’s commercial functions had commandeered its lending capacity and core functions, most notably CMHC’s willingness to provide default insurance on conventional mortgage loans with more than a 20% down payment, which is not required by law because they are considered low-ratio mortgages.

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

Well if all they (CMHC) have left is ” $34 BILLION” …..maybe they should wind it down faster…they may need that cushion.

One reason AIG went down was they were collecting premiums and doing well…till they had to start paying out claims.

#119 Derek on 05.09.13 at 4:47 pm

Hi Garth. Would love to hear your opinion on Saskatchewan. Is the the market there supported by the real mineral wealth? Or is it the same problem as everywhere else? Will Sask have a more modest correction? I’m moving, and willing to rent but not if the crash is 10+ years out.

#120 drydock on 05.09.13 at 4:59 pm

Smoking Man used the real number system to express himself.
To try and refute him people are injecting () or i , which changes the order of operations on one hand and introduces imaginary numbers on the other.
Smoking Mans 1-1+1 is elegantly correct.

#121 aprilNewwest on 05.09.13 at 5:39 pm

#98 – There’s so many holes in your argument.

#122 jess on 05.09.13 at 5:42 pm

Washington, D.C., April 23, 2013 — The Securities and Exchange Commission today announced that investors in a fraudulent investment scheme that offered foreign investors a path to citizenship will get their money back promptly thanks to the SEC’s recent court action. A federal district court judge has ordered the return of all investors’ principal investment in the fraudulent securities offering.

Just two months ago, the SEC charged Anshoo R. Sethi and two companies he created in Chicago to sell more than $147 million in securities to purportedly finance the construction of a hotel and conference center near O’Hare Airport. The SEC alleged that Sethi and his companies misled Chinese investors about both the purported investment opportunity and the prospect of gaining legal U.S. residency through the EB-5 Immigrant Investor Pilot Program.
http://www.sec.gov/news/press/2013/2013-70.htm

#123 Tom Vu on 05.09.13 at 5:50 pm

#120 drydock on 05.09.13 at 4:59 pm

Smoking Man used the real number system to express himself.
To try and refute him people are injecting () or i , which changes the order of operations on one hand and introduces imaginary numbers on the other.
Smoking Mans 1-1+1 is elegantly correct.

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

OMG….. S & M fan club

OK….send fan mail to PO Box 1-1+1 Camel Toe Lane, Slot Machine # 1-1+1.

Not to worry , Most Postal Workers have advanced Math degrees.

#124 Scott on 05.09.13 at 5:51 pm

Hey Garth,

The April numbers are out in Winnipeg: they’re down 7% year-over-year from April 2012. March was down 22% from last year.

Predictably, the Honest Abe’s over at the Realtor Association are labelling this a “market rebound”.

#125 AK on 05.09.13 at 6:03 pm

#98 Craig on 05.09.13 at 1:37 pm
“I am 10 times more concerned about a market crash that a housing crash, especially in the US. Their markets are a fabricated illusion, of immense proportions and when a catalyst comes along, watch out below!

The US feds are holding $4.3 Trillion in shares. What happens when they have to liquidate?

A stampede, computer selling, like we’ve never witnessed and 2008 will look like a speed bump.”
——————————————————————–
Hey Craig,

Sorry to burst your bubble, but the S&P 500 is trading @ 14X earnings.

Bear Markets and crashes do not happen when the PE is @ 14X.

Also, could you please provode a link that shows where the US feds are holding $4.3 Trillion in shares?

#126 craig on 05.09.13 at 6:18 pm

Hey Craig,

Sorry to burst your bubble, but the S&P 500 is trading @ 14X earnings.

Bear Markets and crashes do not happen when the PE is @ 14X.

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

HAHAHAHAHAHAHAAHAHAHA

OK

Tooo funny

Spark up another one

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

Also, could you please provode a link that shows where the US feds are holding $4.3 Trillion in shares?

Go back and read an old post of mine or just try to pay attention, going forward.

#127 jess on 05.09.13 at 6:24 pm

if the g8 were kids

http://www.oxfam.org.uk/get-involved/campaign-with-us/our-campaigns/if?intcmp=hp_204_horiz_if_G8_2013-05-01#whatIF

#128 TurnerNation on 05.09.13 at 6:31 pm

Canadian Tire to create REIT

2013-05-09 09:08 ET – News Release

Mr. Stephen Wetmore reports
CANADIAN TIRE CORPORATION “ON OFFENCE”; ANNOUNCES ITS INTENTION TO CREATE A $3.5 BILLION REAL ESTATE INVESTMENT TRUST WITH INITIAL PUBLIC OFFERING LATER THIS YEAR; APPOINTS ALLAN MACDONALD AS NEW HEAD OF CANADIAN TIRE RETAIL; REPORTS POSITIVE Q1 EARNINGS WITH DILUTED EARNINGS PER SHARE UP 3.3%
Canadian Tire Corp. Ltd. intends to create a real estate investment trust to surface the value of billions of dollars of owned property, appoint a new leader for Canadian Tire Retail and release overall positive first quarter earnings.
Real estate investment trust
The company today announced its intention to create a high-quality REIT that would:
•Surface the value of Canadian Tire’s real estate holdings;
•Create a stand-alone vehicle for Canadian Tire’s real estate, which will support continued real estate investment;
•Provide Canadian Tire with increased financial flexibility to pursue new opportunities to invest in and grow its business.

#129 Freedom First on 05.09.13 at 6:31 pm

#98 Craig

You are financially illiterate. Extremely sad to read your post.

#130 TurnerNation on 05.09.13 at 6:31 pm

Perplexed by Canada’s Jobs Data? You’re Not Alone

http://blogs.wsj.com/canadarealtime/
Don Curren

Canada’s key jobs report – the monthly labor force survey – is notoriously volatile, and some economists question its reliability.

Ahead of the April installment of the survey, due out Friday morning, we take a look at what’s caused some recent consternation over the data — and how economy watchers can deal with the perplexing report.

The confusion has been intense over the last while, as the jobs numbers have flip-flopped on a monthly basis between mammoth gains and elephantine losses.

#131 Dr. Hoof - Hearted on 05.09.13 at 6:43 pm

The Price Of Copper And 11 Other Recession Indicators That Are Flashing Red

http://www.thetruthseeker.co.uk/?p=70621

#6 NYSE margin debt peaked right before the recession that began in 2002, it peaked right before the financial crisis of 2008, and it is peaking again.

#7 The S&P 500 usually mirrors the performance of Chinese stocks very closely. That is why it is so alarming that Chinese stocks peaked months ago. Will the S&P 500 soon follow?

#8 The economic data coming out of the Chinese economy lately has been mostly terrible…

For starters, China’s recent economic data, as massaged as it is to the upside, is downright awful. China’s PMI numbers were the worst in two years. Staffing levels in the Chinese service sector decreased for the first time since January 2009 (remember that year).

China’s LEI also shows no sign of recovery. If anything, it indicates China is heading towards an economic slowdown on par with that of 2008. And if you account for the rampant debt fueling China’s economy you could easily argue that China is posting 0% GDP growth today.

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

Lots of Q.E. $$$$ floating around as bait…. seeking Greater Fools…

#132 jess on 05.09.13 at 7:02 pm

http://www.guardian.co.uk/politics/blog/2013/may/09/tax-whistleblowers-principle-money

100 of UK’s richest people concealing billions in offshore tax havensGlobal investigation gets under way as HM Revenue and Customs acts on leaked data
http://www.guardian.co.uk/politics/2013/may/09/100-richest-uk-billions-offshore-tax-havens?INTCMP=ILCNETTXT3487

http://ukuncutlegalaction.org.uk/
the missing billions
Dave Hartnett – HMRC’s chief tax man – met Goldman Sachs’ top brass in late 2010 and, with a handshake, agreed that the banking giant would be let off paying up to £20 million in tax. We believe that £20 million was money owed to the public purse and could pay for vital public services and welfare, which is why we are taking legal action to have the deal declared unlawful.

http://www.guardian.co.uk/politics/2013/may/02/tax-chief-bank-goldman-sachs?INTCMP=ILCNETTXT3487

#133 Roy on 05.09.13 at 7:58 pm

So the industry is offering buyer’s insurance. A plan hatched up by a mortgage broker, backed by realtors, and divied up according to figures the realty board comes up with. Ya, that’s not a recipe for more trouble. Wonder if some realty boards or even realtors might get sued when the fault lines get broken, prices drop more than some will admit. Bring on some class action lawsuits, suspend some licenses.

A market created from manipulation breeds more of it. The RE industry reeks of desperation.

190,000 job lost- if you place that in US terms that would be almost 2 million (US economy 10X bigger). Given 1 job lost affects multiple others, this translates into a Canadian style housing market crash at least on par with what was seen in the US. By their own admission.

And then you got homeowners like in Canadian Watchdog’s video who are basically living in fantasy land that believe Canada is rock solid. Even when evidence clearly shows the youngest generation has more-or-less been eliminated from the market.

#134 Ronaldo on 05.09.13 at 8:11 pm

#79 Buy Low Sell High –

It may be that you will discover that the house did not really sell.

#135 blase on 05.09.13 at 8:18 pm

#98 Craig

Must be nice to be smarter than Warren Buffett. What hedge fund do you manage?

#136 Ronaldo on 05.09.13 at 8:25 pm

#80 NOTTOSURE –

Possibly this link would be of interest to you in this regard. You should be able to go to your H.R. personnel and ask them to provide you with the commuted value of your pension when you turn 55. They would have to be in touch with the holder of the plan. Often they don’t like to do this as it involves work but I believe you are entitled to know this. Otherwise, how else can you decide what is your best option.

http://www.milliondollarjourney.com/pension-basics-the-commuted-value.htm

#137 espressobob on 05.09.13 at 8:50 pm

#98 Craig

You worry too much! Market ‘crashes’ are actually rare events. Investors mitigate risk through diversification, balance, & profit taking. No biggy.

Signing ones life away for real estate entails ‘concentration’ risk. Good luck with that.

#138 Tony on 05.09.13 at 8:59 pm

Re: #98 Craig on 05.09.13 at 1:37 pm

Simple right now the only buyer of U.S. stocks is the Fed and when it comes time to sell no one on Earth will buy any of the Fed’s holdings. Meanwhile the CNBC puppet show continues every Monday to Friday. The America public is well aware of what’s going on and the FED will be dead in the water when they try to unload shares with no buyers.

#139 bill on 05.09.13 at 9:01 pm

Craig
are you,by chance,an out of work realtor ?
you really sound like someone who has lost money in real estate and is consequently embittered with his lot and seeks to ameliorate this somehow by posting here.

#140 cynically on 05.09.13 at 9:19 pm

Re #68 Sacola – So it’s you versus TD Bank on where the loonie is going by yearend. You and #85 Screwed are both letting your patriotism dictate your monetary decisions for your future life and it is through your ignorance of financial systems and economies and how they are working that is causing this to happen. There is nothing wrong with loving your country but you shouldn’t let that same love entirely shape your future living conditions. Smarten up!

#141 Sectio8 on 05.09.13 at 11:32 pm

Excellent post! There is a new reason that we are in a housing bubble. When F has to ban 30/35 year mortgages from banks willing to take on the risk!

#142 White Rock Mom on 05.10.13 at 12:01 am

Van Girl, these seller are delusional! Has anyone ever made a decision to buy something because it went on sale for 1% off. I have seen some price drops of 10% and I don’t think it is enough.