Simple lives

CANADA

Hard to fathom, but not everyone who comes here loves me. Less than 1% of daily visitors leave a comment, and nine out of ten are worthy of publishing. But some people are plain nuts. Especially when they want to toss the Chinese.

Because of people like you I am starting to hate this country u giant bearded DELETED.

You would rather let your tiny marbles get entangled in yer beard and set on fire then admit your favorite new chinese boss with stolen money screwing up buying up our RE from under cash poor Canadians…….DELETED

That’s a sample. Not the worst. But the volume of posts from xenophobes and whackjobs is growing. I archive the comments so the RCMP has something to do after a drone, or a Prius, takes me out. For 2011 the single-spaced Word document ran to 137 pages. Last year it was 208 pages. So far this year (and it’s still November), it’s 226.

What irritates people the most about my magnetic personality and laser-like thoughts? Lately it’s been my refusal to believe anybody other than the deluded masses who live in this country is actually responsible for houses people can’t afford. Foreigners influence every market in varying ways, but there are no stats to prove Canada’s more unique than the US, or Vancouver more impacted by offshore money than Seattle or San Francisco.

In fact, the vast preponderance of sales in Toronto, Calgary, Montreal and Vancouver are made by locals to locals. When they stop buying houses with vast amounts of borrowed money, whatever the price, or quit believing past gains are a guarantee of future ones, values will decline. It has nothing to do with how many Asian people you see on the way to the beer store. Mostly, as I started delineating days ago, it’s about the economy and jobs.

If you feel like worrying, then worry about this.

Commodity prices are weak, and likely to stay that way. Bad news for a nation where resource sales are so key. Fracking and other techniques have increased US oil production to eight million barrels a day and started that country on the fast track to energy independence. Meanwhile last week’s nuke deal with Iran and its sweet little foreign minister have folks expecting a new flood of oil coming from there soon. So, crude at 93 bucks a barrel sure looks like it’ll be worth less. Hope you didn’t just win a bidding war for an OSB McMansion in Calgary.

Canada’s job creation machine is running dry. In fact, in the past five years I’ve never known as many 50-something, middle-management guys who have been sent home. Most will never work again.

Our manufacturing sector is shrinking monthly. We lost 30% of our fabricated exports during the financial crisis, and they haven’t come back. More people are building condos than working on factory floors – and we all know that will soon end.

In 2008 Canada has a big current account surplus – we sold more stuff to the world than we imported, building up national equity. Today it’s a deficit four times larger than the profit used to be, sitting at 3% of the GDP. Without big gains in resource sales – which will only follow a surge in global growth – no reason for improvement. And that, say economists, means the dollar is at risk.

BMO, Nesbitt, Goldman, Scotia, National Bank – they’re all warning in various degrees about a toppling of the loonie. Bay Street says 93 cents is probable. Goldman is calling for 88 cents. A weak economy, they argue, will certainly be reflected in a weak currency.

Despite four years of dirt-cheap loans, a real estate gasbag and consumer debt overshoot, there’s basically no inflation. Prices rose at an annualized rate of just 0.7% last month, far below the Bank of Canada’s target range. No inflation means no real economic growth, no upward pressure on prices and no real wage gains.

This is nightmare stuff for policy-makers: they made money cheap so people would consume goods, spur demand and create jobs. Instead folks gorged on loans to buy houses which soared in value, creating more even debt and a nation so mortgaged that people sit at home with no savings, investments or disposable income. Then, employees at Sears and Best Buy get whacked.

Two years ago I suggested you buy America and sell Canada. It was evident we were on the wrong path, while the US entered recovery. Those who followed this advice have seen their Phoenix houses jump 40% in value and their US equity ETFs flower 25% in eleven months. As things enter a worse phase here, it’s hard to imagine a more at-risk asset class than residential real estate.

Well, it wasn’t the Chinese who forced us to borrow so much. Or made tacky Vancouver bungalows average $1.1 million. It wasn’t immigrants who choked off oil demand. People from away were not responsible for creating a country of condo-builders where exporters once stood. They didn’t turn us into speculators, when we used to be savers. The Chinese (or Russians, or Iranians) are just surrogates for our own malevolent wants.

You want cheaper houses? Just keep at it, Canada.

244 comments ↓

#1 P-gizzle on 11.28.13 at 9:40 pm

If it really is the case that, “RBC says it now takes 84.2% of gross income to carry a house, which is $6,000 more than the average family actually nets”, and mortgage defaults are low, then something doesn’t add up.

It only makes sense if you look at real estate as a commodity, rather than a pursuit of Joe Average. In other words, demand/income levels of locals who want their own home do not dictate prices. Rather, speculators and investors set market prices. Prices will only “correct” when investors need to liquidate en masse, not when Boomers decide they need retirement.

If you walk through Coal Harbour in Vancouver, for example, it is half-empty, yet there are few condos for sale. Why? Because investors park their money there, just like they would in gold, or ETFs. These places are not even being rented.

Having said that, I agree with this blog. There’s enough media hype now about a collapsing Canadian real estate market that investors will pull out. They will make out like bandits, cleaning out Garth’s beloved hipsters.

#2 dave b on 11.28.13 at 9:41 pm

Primo! U rock GArth

#3 timmy on 11.28.13 at 9:48 pm

What irritates us most is your refusal to publish objective comments that aren’t aligned with your viewpoint. As an example, from the time you first warned of a market correction, prices have almost doubled in some areas.

Au contraire. Hundreds of your irritating comments have been posted. — Garth

#4 Victoria Real Estate Update on 11.28.13 at 9:49 pm

. . . . . .Percentage Price Decline From Peak (MLS HPI). . . . .
. . . . . . . . .Greater Victoria – Single Family Homes. . . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .0%. . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 0.5%. . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 1.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 2.0%. . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 2.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 3.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 3.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 4.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 4.5%. . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 5.5%. . . . . . . . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . .
– 6.0%. . . . . . . . . . . . . . . .*. . . . . . . . . . . . . . . . . . . . . . . .
– 6.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 7.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 7.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 8.0%. . . . . . . . . . . . . . . . . . . . . . . . . . *. . . . . . . . . . . . . .
– 8.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . *. . . . . . . . .
– 9.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
– 9.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-10.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .*. . . .
-10.5%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
-11.0%. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
——————————————————————————————
. . . . . . . . .10. . . . . . . 11. . . . . . . . 12. . . . . . . . 13. . . . . .

This is a 6-month price chart that was put together using MLS HPI data.

MLS HPI data is collected by real estate boards across Canada. Based on their home price index methodology, single family homes in Greater Victoria have declined 10% from peak.

Downward price pressure has been the name of the game in Victoria since 2010. There is simply no reason at all to think that house prices in Victoria will turn around and go higher any time soon.

In fact, all signs point to further price declines. It appears that incomes in Victoria peaked in 2008 (see 14th chart) (note that there is no data available for 2012 or 2013). As Garth has pointed out, incomes in Canada are stagnating.

As housing bubbles go through their inevitable major price corrections, incomes generally decrease as the economy takes a major hit from falling house prices. This was the case with incomes in the US during their housing crash. Incomes in the US are still lower than they were in 2008 (first chart). 2008 was the year that house prices in the US went from falling slowly to crashing. Don’t expect incomes in Victoria to shoot higher any time soon and spare Victoria’s housing market from the major price correction that has been in progress since 2010.

Victoria’s economy and house prices will take a huge hit as demand for BC bud continues to weaken. Less BC bud is being sold to Americans and the price has declined dramatically.

5-year mortgage rates have stopped falling. Declining interest rates had been providing an upward force against falling house prices, but that upward force has been eliminated. This will allow downward price pressure to become even more dominant.

Girls and guys, continue to sit on the sidelines and rent for now. If you wait for house prices to fall a lot more before buying, you will avoid much financial distress. Buying now would be buying near the peak of the bubble with maximum risk. Buying in the future, after house prices have fallen a lot more, would be buying with much less risk and a much higher potential for future price gains.

Until next time – Cheers!

#5 bobdog on 11.28.13 at 9:54 pm

If not for the criminal banking cartel, people would not be able to borrow 11 times their income to inflate home prices. The harper regeim is to blame. Everyone will pay eventually. I’m just happy I have a green card and soon a EU passport.

#6 raisemyrent on 11.28.13 at 9:58 pm

I love the experts that can contradict stats because “if you walk down the street, you see…”

no lights on THEREFORE empty THEREFORE investment THEREFORE foreigners

nice logic

#7 Smoking Man on 11.28.13 at 9:59 pm

A Dyslexic’s Crystal Ball as promised.

And as The Great Said. Up top we are getting killed in trade balance.

(Pisssst don’t tell anyone but there is a Global Currency war on right now, lower currency spur exports)

Canada is a wee Country by population with a huge expensive land mass to manage, we need a positive trade balance or we go back to fishing and trapping. How do we get there?

Lower the dollar, How do we do that?

Lower the Overnight Rate? How can we do that without pushing the housing market into bubble territory?

Talk the real estate market down, More Gov’t disincentives, yet unlikely with a federal election on the distant horizon. Have our friends at the IMF talk it down. If that don’t work?

Allow Garth to go on more MSM doing his thing.

Garth, expect to get tones of calls from MSM as directed from the machine, UCC says Lang and O’Leary. Wrong audience, now if you got on Dr OZ a real estate melt down the next day. House Horny Wives love that guy hang on every word.

But it won’t work in Toronto when one looks at the http://www.housepriceindex.ca/ and realizes that we have not had a hockey stick, just slow and steady gains. Pull up a chart on Edmonton and Calgary if you want to see what a hockey stick looks like back in 2008.
I will do a chart this week and post. You will all see.

Smoking Man will quit drinking and smoking and join a gym, OK let’s get real……

Every Board of Every fortune 500 company should have one unschooled, no obedience certificate, wacky crazy eyed dyslexic to give input on the big picture.

Will never happen in my life time, but if it did,
GO ALL IN LONG BABY…………….I’m good.

As illustrated on images and text I proudly plagiarized from the web on dyslexia.

If one researches Dyslexia you will understand what makes me SM.

Ironically a condition viewed by the schooled as a handy cap. Such Idiots.

The stock market, well seeing that I’m not getting paid for that info, screw you all, you just have to wait for my next drunken stupor for that free bee.

http://www.brw.com.au/p/leadership/success_tip_think_like_dyslexic_YbvFJfIIg47C01McJxFKTP

#8 P-gizzle on 11.28.13 at 9:59 pm

Stats of Canadians-to-Canadians sales are misleading. Lots of holding companies, dual citizens, etc. Even the agents in Vancouver will tell you there’s a lot of foreign money coming here, and elsewhere (including San Fran and Toronto). All one has to do is visit an open house.

I don’t see how it’s xenophobic to point this out.

Prove it. — Garth

#9 John on 11.28.13 at 10:00 pm

I visit this site every night. The reason I think a lot of people don’t comment is because without doubt you have more nut jobs commenting on here then one would think possible. It’s not worth the effort most times. But still enjoy your blog and some of the comments…

John

#10 [email protected] on 11.28.13 at 10:02 pm

There is no turning back. Prices of everything have shot up, and the new baseline is set. It’s just like the price of gas, do you think it will ever go down again? remember 90 cents a litre.

#11 Gary Forrest on 11.28.13 at 10:03 pm

I am moving across the street. I get to keep my friendly neighbourhood, and my kids won’t have their school / social life upended. I get a place roughly the same size, but with a different layout (Bungalow ) I follow your blog and it terrifies me. I would like to cash out, but the wife / kids will have none of it. We have to live somewhere, and renting isn’t really a viable option here in Oakville. My question therefore is, if mortgage rates are about to go up, how FAST do you think that will happen. Should I go fixed? Variable? Or Flex variable?

#12 bubu on 11.28.13 at 10:03 pm

#1 “If it really is the case that, “RBC says it now takes 84.2% of gross income to carry a house, which is $6,000 more than the average family actually nets”, and mortgage defaults are low, then something doesn’t add up.”

Is this assuming 20 or 25% down payment or 5%? I’m afraid is not 5% and I don’t think too many have 20-25% to follow RBC math.

#13 Tiger on 11.28.13 at 10:05 pm

Wow Garth , you make it so easy to understand !
My son asked me y are there so many more people getting killed , while crossing the street, just a sine of the times kid, watch your self!

#14 Kilt on 11.28.13 at 10:07 pm

It has to be foreigners buying up the houses. Your stats alone indicate that Canadians can’t afford houses, especially in places like Vancouver. There is no evidence to suggest the Chinese are buying up the properties because nobody keeps track. Of course if you live in these neighborhood you know who is buying them. My concern is that people born and raised in Canada have to compete with people who make their money in a very different financial and ethical environment. House prices aside, I see a growing split between the haves and have nots. The only thing keeping the have nots from complaining so much is the have wealthy parents with million dollar tear-downs.
Kilt

#15 Robert on 11.28.13 at 10:09 pm

Garth is it wise to have a U.S. Dollar account as part of my portfolio? Doing well otherwise.

#16 Montrealbubble on 11.28.13 at 10:11 pm

Garth, sometimes I wish you could understand french , so that you could comment on all the unbelievable things written about real estate in Québec.

Today’s best one: Nicolas Marceau, finance minister in Québec, blames the tightening of mortgage rules by Ottawa to explain in part this year province’s deficit, because he says ”it caused a slowdown in the real estate market”.

No comment!

#17 Ford Prefect on 11.28.13 at 10:13 pm

#9 John. Ditto

#18 Smoking Man on 11.28.13 at 10:14 pm

#8 P-gizzle on 11.28.13 at 9:59 pm
Stats of Canadians-to-Canadians sales are misleading. Lots of holding companies, dual citizens, etc. Even the agents in Vancouver will tell you there’s a lot of foreign money coming here, and elsewhere (including San Fran and Toronto). All one has to do is visit an open house.

I don’t see how it’s xenophobic to point this out.

Prove it. — Garth
…………………………………………………

I’m with Garth even though he delete the link to my blog, you’re such a moody goof Gartho.

It’s the herd. They are dumb, stupid and into show, it’s everything to them. the 20 to 30 are fueling this madness and it will continue till we see a hockey stick.
Then the tree huggers will discover a second job, delivering pizza, I did it once when I f-ed up.

The sweety mans schooled and dominant wives force the emasculated hubby to buy so she can have something on an bigger breasted rival. It’s what drives the market. My herdomitor says so.

Humans are simple and predictable.

Garth is 100% right on the above call.

#19 T.O. Bubble Boy on 11.28.13 at 10:19 pm

Two years ago I suggested you buy America and sell Canada. It was evident we were on the wrong path, while the US entered recovery. Those who followed this advice have seen their Phoenix houses jump 40% in value and their US equity ETFs flower 25% in eleven months.

Add in the USD/CAD gain, and a basic U.S. ETF like VTI is up about 37% YTD!
(28.3% YTD gain + 6.7% YTD currency gain)

#20 Freedom First on 11.28.13 at 10:20 pm

#4 Victoria Real Estate Update, I enjoy your posts, keep em coming, thanks!

Garth, I think you are loved by the people who count in your life:) . The ones who send you the hate mail, well, we all know what kind of world we live in: “Shoot The Messenger”. If the Drones/Connected People/System ever took you out, that is when I will leave Canada. Never knew that all of George Orwell’s books would fall short of the reality that is today. Thanks for all you do Garth……freedom first.

#21 Babblemaster on 11.28.13 at 10:22 pm

“Fracking and other techniques have increased US oil production to eight million barrels a day and started that country on the fast track to energy independence.” – Garth

—————————————————————

Shale rock fracking may not be the answer to maintaining the current economic model. The energy produced costs too much in terms of the energy expenditure and water required.

#22 TurnerNation on 11.28.13 at 10:24 pm

Tiresome. Posters here are continually trying to find a chink in Garth’s armour.

#23 Tiger on 11.28.13 at 10:25 pm

#9 you just said your a nut job! Are you dislectic!
Moron you latter!

#24 Mr. Frugal on 11.28.13 at 10:26 pm

Garth, I agree that it’s a good idea to invest in US Equities. But, isn’t it still a good idea to hold some Candian equities as well? After all, we want to be balanced and diversified.

Of course. Covered that ground previously. — Garth

#25 Scooby Doo on 11.28.13 at 10:27 pm

Commodity prices are weak, and likely to stay that way. Bad news for a nation where resource sales are so key. Fracking and other techniques have increased US oil production to eight million barrels a day and started that country on the fast track to energy independence.
———————————-
Wrong. Buy commodities. They protect against the headline inflation that is coming our way.
Output from fracking is diminishing quickly.
There will be significant energy and food inflation.

#26 East Van Cheapo on 11.28.13 at 10:31 pm

“Canada’s job creation machine is running dry. In fact, in the past five years I’ve never known as many 50-something, middle-management guys who have been sent home. Most will never work again.”

My father was one of those guys. Frankly, he’s never been happier or healthier in all the years that I’ve known him. Employment is over-rated. Thankfully, my parents are savers ;)

#27 robert_ on 11.28.13 at 10:32 pm

Things are not great folks, at least 3 real estates are calling me at home or dropping business cards. Always the same question: are you interested in selling or buying a home? I have no intention to sell, they are looking like telemarketers more and more.

#28 Smoking Man on 11.28.13 at 10:32 pm

#17 Ford Prefect on 11.28.13 at 10:13 pm
#9 John. Ditto

You’re so politely Canadian. Ditto?

Get it out of your system, say what you feel. Be a man

#29 Tiger on 11.28.13 at 10:33 pm

John, don’t think , this is the rite site for you!

#30 Condos crashing to the ground on 11.28.13 at 10:34 pm

Not only are condo’s crashing to the ground physically but also in prices and now in rents. Look for condos to lose 70% of there value over the next five years.

Weakening rental picture latest condo market worry

#31 Paul on 11.28.13 at 10:35 pm

5 bobdog on 11.28.13 at 9:54 pm

If not for the criminal banking cartel, people would not be able to borrow 11 times their income to inflate home prices. The harper regeim is to blame. Everyone will pay eventually. I’m just happy I have a green card and soon a EU passport

Please use it don’t, let the door hit you on ass on the way out

#32 P-gizzle on 11.28.13 at 10:35 pm

Assuming you requested proof of foreign investment, and not the “xenophobic” part of my last post….

http://blogs.vancouversun.com/2013/04/20/vancouver-planner-andy-yan-fights-to-prevent-a-zombie-city/

Although not “proof”, it is supportive and consistent with my experience. Impossible to prove if these stats aren’t kept (and it’s easy to see why the government wouldn’t care to keep them).

The occupancy estimates in Yan’s studies were based on electricity consumption of individual units.

Peace and love.

#33 Paul on 11.28.13 at 10:37 pm

#10 [email protected] on 11.28.13 at 10:02 pm

There is no turning back. Prices of everything have shot up, and the new baseline is set. It’s just like the price of gas, do you think it will ever go down again? remember 90 cents a litre

I remember 29 cents a gallon

#34 John on 11.28.13 at 10:42 pm

Soooo.. case in point.. two biggest nut jobs comment on my post. Awesome! Good to see they know who they are! And only one spelling mistake in both posts!
Maybe I misjudged? :)

#35 T.O. Bubble Boy on 11.28.13 at 10:42 pm

Tweets from Canadian Mortgage Trends:

“Mtg loan growth at the banks has lagged industry mtg growth, reflecting more stringent (B-20) underwriting standards”—BMO Capital Mkts

“This suggests that an increasing amount of industry mtgs are moving to non-OSFI regulated entities like credit unions”
—————————-
So, we’re in a race to the bottom? This “not a US-style crash” is quickly becoming a US-style crash.

Subprime anyone?

#36 Added Incentives on 11.28.13 at 10:45 pm

Bitcoin is at $1,200. Garth, Do you recommend for retirement?

#37 Smoking Man on 11.28.13 at 10:45 pm

#9 John on 11.28.13 at 10:00 pm
I visit this site every night. The reason I think a lot of people don’t comment is because without doubt you have more nut jobs commenting on here then one would think possible. It’s not worth the effort most times. But still enjoy your blog and some of the comments…

John
…………………………………………………………

They don’t comment cause they have no self confidence. They are Canadians. Teachers ripped there souls out.

When Garth is in better spirits and not PMS-ing he will occasionally allow a bi monthly link to my shit blog, and when that happens I get on average 1000 hits on the day usually 1 comment.

With no link only 100 hits.

Canadians are scared of being judged..They live in fear, and buy crazy expensive homes to fit it, and not be negatively judged. a nightmare to most.

Their need to fit in and avoid negative judgment…boarders insanity.

When I can get someone to say, Smoking Man you’er and asshole.

I feel I did a great public service for this country.

I made a weak man take a risk and talk.

#38 Bob Rice on 11.28.13 at 10:49 pm

@ #

“I’m just happy I have a green card and soon a EU passport.”

You think it’s better in Europe?? Have you read up on their economy? Have you visited?

I still don’t things are as bad as some of the doomsday folks are claiming… The GTA, for instance, has a very diversified economy despite the building boom…

#39 nancy on 11.28.13 at 10:55 pm

Garth, you got it wrong. I don’t blame the Chinese. I blame the Canadian Government for allowing the Chinese to inflate the price of Canadian real estate with ill-gotten gains, or income from foreign countries that is not subject to Canadian taxes that the locals have to pay to support social programs that the new immigrants enjoy. There is no racism here. Just deep frustration of our lax policies which tends to favor non-local buyers.

#40 Rantaplan on 11.28.13 at 10:55 pm

Renting vs owning a downtown 1-bedroom condo in Calgary right now? I evaluated both scenarios since my owner just increase my rent again, of course these numbers are approximate and I assume the condo doesn’t go up in value since we’re in an overpriced market. Do you think I missed anything?

OWNING:

– Property Cost: $350000
– Cashdown 20%: $70000
– Mortgage: $280000 @ 3.3%
– Mortgage payment: $1373
– Mortgage towards equity: $673 per month
– Mortgage towards interest: $700 per month (LOSS)
– Condo fees: $350 per month (LOSS)
– Insurance: $80 per month (LOSS)
– Property taxes: $160 per month (LOSS)
– SUM OF ALL LOSSES: $1290 per month
– Does not include special assessments, closing costs, realtor costs when reselling, mortgage insurance costs if applicable.

RENTING:

– Rent: $1650 (LOSS)
– Insurance: $15 (LOSS)
– Cashdown income (with TSX:FIE): $300 (INCOME)
– SUM OF ALL LOSSES: $1365

So basically, the differential between owning and renting is about $75 per month right now. Not even $1000 a year. I think it’s worth the extra $75 for not having to deal with fluctuating interest rates, or a drop in condo value.

What do you think?

You ascribed no value to $70,000 dumped into the down payment. Add $400 a month to the ownership loss. — Garth

#41 Piccaso on 11.28.13 at 10:57 pm

50 something and out of work coming up 9 months

#42 Rural Rick on 11.28.13 at 10:59 pm

A big thank you maestro from all your fans. Your teachings have freed us from servitude.
Can we start a trend to push comments to 2%. Just say thanks. Tell Garth what a righteous dude he is.
I do seriously owe you great bearded one. Your advice and analysis over more years than I care to remember has allowed me more independence than otherwise. And you made it a good read, funny as … yeah well.

Thanks to all the blog dogs who make it hot. You know who you are.

#43 Cici on 11.28.13 at 10:59 pm

#3 Timmy

To be fair Timmy, Garth’s warnings were based on fundamentals, and had it not been for quantitative easing in the States, and excessive printing of money in Canada and around the world, the gasbag would have deflated a long time ago.

By the time it does finally go pop, the gust of air will probably explosive, and all the smug ninnies gloating about their paper profits will be reduced to weeping ninnies crying over their lost fortunes.

But you go ahead and buy a house if that’s where you think great fortune awaits…oh, and get off this blog and go to mls.ca instead. You’ll have a lot more fun.

#44 Bob Rice on 11.28.13 at 11:02 pm

The CBC’s documentary on the condo market in toronto seems like proof enough that much of the high-rise condo sales activity is being driven by foreign purchase.

they interviewed broker who says he acted as the agent for investors that buy 30 to 40 units or more in a building without ever seeing it… then they rent them out…

I don’t think it’s racist to suggest that certain nationals are doing quite well and want to park their cash somewhere safe (i.e. Canada) and RE seems to be desirable asset to own..always has been always will be.

No doubt though that lots of dumb Cdn born folks are behind this bubble

#45 deafdumbandblind on 11.28.13 at 11:03 pm

Gartho…yer full of crap….the facts on foreign ownership were published in the Vancouer Sun recently….you chose to ignore an honest and widely recognized reporters audacity to compile and publish what you prefer to ignore. Was it that a Chinese reporter spilled the beans…are you the rascist here and not the ones you continually denegrate?

I read it. No facts. — Garth

#46 Smoking Man on 11.28.13 at 11:04 pm

#40 Rural Rick on 11.28.13 at 10:59 pm

Thanks to all the blog dogs who make it hot. You know who you are.

See that’s what I’m teaching rick, afraid to be judged.

You could have said ….Never mind don’t want to blush.

Ah man I have so much work to do to turn this country around..

#47 Nemesis on 11.28.13 at 11:05 pm

@TurnerNation/#22

That was sneaky!

Disambiguation:

http://tinyurl.com/l6y5q3m

#48 ILoveCharts on 11.28.13 at 11:05 pm

Same old. Same old. Garth trying to paint everyone who suggests that Chinese buyers are having a material impact on prices as being a racist or a xenophobe.

I love the Chinese people AND I think they are having a material impact on prices.

Come visit my next strata meeting. We have a Chinese interpreter. Although so much of the conversation is in Chinese, I am thinking we really need an English interpreter.

Are they Chinese, or Canadians? If they live with you, they don’t live in China. — Garth

#49 John on 11.28.13 at 11:05 pm

#37 Smoking Man

Hey, who knows maybe you are right, but my 2 cents I disagree. You look at a blog and either it’s of no interest (yours which I quickly checked out), or it’s interesting, Garth’s; but the comments are so out there you can’t be bothered participating in most cases.
In the end it’s a friggin’ blog and I am not going to lose sleep over it.
Have a good one!

John

#50 not 1st on 11.28.13 at 11:06 pm

Blog commenter need to realized Garth spent years in the House of Commons. He can’t be insulted, so save your angry typing and contribute something worthy.

#51 TnT on 11.28.13 at 11:06 pm

Well, it wasn’t the Chinese who forced us to borrow so much. Or made tacky Vancouver bungalows average $1.1 million. It wasn’t immigrants who choked off oil demand. People from away were not responsible for creating a country of condo-builders where exporters once stood. They didn’t turn us into speculators, when we used to be savers. The Chinese (or Russians, or Iranians) are just surrogates for our own malevolent wants.

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

We now live in a global community. This is different. I see firsthand the large communities being created with New Canadians in the GTA. This has an effect on local Real Estate. Current Canadians never had the needed birth rate to fill these sub-divisions.

To say the billions of dollars made offshore have not influenced our Real Estate is poppycock. Are we to think our boarders are a magical shield that deflects foreign investments?

There’s plenty of evidence that the whole condo market in Toronto is a commodities game dominated by foreign money. Is that not just a link in the Real Estate food chain that connects this whole system?

We all know there are no stats tracking foreign ownership but you speak with confidence that it’s not a factor. There’s no way to pin you down on specifics because you constantly deflect the conversation and turn people asking questions into xenophobes as noted by your choice of words in your comment:

“It has nothing to do with how many Asian people you see on the way to the beer store”.

Beer store?

Not park or library or school or grocery store or Art Gallery or etc….

That was telling. — Garth

#52 gogo on 11.28.13 at 11:07 pm

Why on Earth would a Chinese guy come and pay one million for a house in Van and not go and buy an island in Greece for the same amount. Tell me why?

#53 eddy on 11.28.13 at 11:08 pm

Sorry Garth but you asked for it-

The 80s called, they want their navy trench coat back

It was black. — Garth

#54 not 1st on 11.28.13 at 11:08 pm

#40 Rantaplan on 11.28.13 at 10:55 pm

You forgot to add in the piece of mind factor to having no debt. Its worth a lot more than you think.

#55 Smoking Man on 11.28.13 at 11:13 pm

#41 Piccaso on 11.28.13 at 10:57 pm
50 something and out of work coming up 9 months.

So are we to feel sorry for you? You have the university of google.

Find a need, find a supplier, fill the gap, when you get too busy , hire some grads, internship I hear they work for free.

Change the way you think man……

#56 Max Jones on 11.28.13 at 11:13 pm

I live south of Vancouver and have anecdotal knowledgeable of the local market. When I head into Richmond it becomes a bumper car rink dodging Porsches and Range Rovers with the occasional Lamborghini roaring past (they must hate the speed bumps at the airport when picking up grampa and grandma). There is money changing hands in a big way here.

I also notice that 1970s homes are sold, rented out “short term” for 6 months to a year, get torn down and replaced with a new house. Generally its a big improvement over the original. As for the new owners, pretty much not in my circle of friends – so could be anyone for all I know. But definitely not buyers who are stretching to make their mortgage payments.

#57 Regina Speculator on 11.28.13 at 11:14 pm

Hey Garth, enjoy your blog.

You rarely mention Saskatchewan.. much like the rest of the world. :P

I live in Regina.
Right now, if you want a starter 2 Bdr bungalow in Regina, you need to start looking at 229K-249K. Now I’m cheap, so I’m not buying right now and I think most Regina-ians are the same way. You see, even Regina has an affordability issue, however most people out here come up with the arguments “Everyone needs potash so Saskatchewan is immune to economic factors outside” and “Our prices have finally caught up with the rest of Canada”. The thing is, homes aren’t selling this year, but prices are going up for the most part (see below). Its almost as if everyone is delusional about making profit, because I see starter homes from the 40’s (needing 50K plus renos) posted for $350,000 in moderately decent areas like Cathedral or Lakeview. Then I see a brand new construction 2 story in Harbour Landing for $379,000 (no garage mind you). Now, it may be all about location, but Regina’s not that big. Why the disparity? I think someone needs to blow the lid off this so people can have a solid number to work with when going to sell their homes. We need to re-evaluate how the crackpots enter numbers for home valuations. That being said, my personal belief is that many folks are in a state of denial that their precious nest-egg “investment” isn’t worth what they had hoped and as a result, many of these homes are still on the market 6 months in (the brand-new ones in Harbour Landing included)

What are your thoughts? Is Regina any different than the rest of Canada? Or are we ready to play with the big kids? OR, are the people here just being pig headed until the Leader Post finally mentions we might have inflated our prices a bit too much?

At least we have a champion CFL team. Go Riders!

#58 T.O. Bubble Boy on 11.28.13 at 11:15 pm

@ #40 Rantaplan on 11.28.13 at 10:55 pm
…………………………
OWNING:

– Property Cost: $350000
– Cashdown 20%: $70000
– Mortgage: $280000 @ 3.3%
– Mortgage payment: $1373
– Mortgage towards equity: $673 per month
– Mortgage towards interest: $700 per month (LOSS)
– Condo fees: $350 per month (LOSS)
– Insurance: $80 per month (LOSS)
– Property taxes: $160 per month (LOSS)
– SUM OF ALL LOSSES: $1290 per month
– Does not include special assessments, closing costs, realtor costs when reselling, mortgage insurance costs if applicable.

RENTING:

– Rent: $1650 (LOSS)
– Insurance: $15 (LOSS)
– Cashdown income (with TSX:FIE): $300 (INCOME)
– SUM OF ALL LOSSES: $1365
………………

You ascribed no value to $70,000 dumped into the down payment. Add $400 a month to the ownership loss. — Garth

That’s what he was trying to do with the $300/month “cash down income” on the renting side.

The comparison looks fairly accurate, except being way too optimistic in several areas:
– It assumes condo fees are fixed (ha!)
– It assumes property taxes are fixed (ha!)
– It assumes mortgage rate is fixed (ha!)
– It assumes insurance costs are fixed (ha!)
– As noted, it ignores costs of selling… a major factor for condos, as most don’t live in one more than 5 years.

#59 KommyKim on 11.28.13 at 11:16 pm

I agree with you Garth. Canadians created this mess. It’s because the average smuck only looks at what the monthly payment will be. It is reflected in the Ads you see; the monthly or weekly payment is in 100pt font and the cash price in 8pt font. Whether it’s a house, car, or sofa, people just look at the payments.

#60 Regina Speculator on 11.28.13 at 11:16 pm

Here is the info I was speaking of courtesy of the local Regina Realtor cartel:

From: The Association of Regina Realtors website

For Week Ending November 16, 2013
In reviewing the weekly report card, sellers appear pretty confident with the current layout, as evidenced by higher year-over-year new listing counts. And despite firm sales being down this week, buyers, too, have proven to be ready to make purchases. Even though the median sales price is at its lowest level of the year, it is still above the October 2012 price. At 5.6 months of supply, the balance between buyer and seller activity is stable and healthy.

In the Regina region, for the week ending November 16:

New Listings increased 30.6% to 111
Firm Sales decreased 3.4% to 56
Inventory increased 34.1% to 1,691
For the month of October:

Median Sales Price increased 1.6% to $292,250
Days on Market increased 2.7% to 38
Percent of Current List Price Received decreased 0.3% to 96.6%
Months Supply of Inventory increased 36.6% to 5.6

#61 Cici on 11.28.13 at 11:20 pm

Everyone whining about the Chinese; please watch The Condo Game (free online CBC documentary).

There you will learn that it is not your average immigrant who works hard and comes to this country to build, produce and contribute that is skewing prices skyward.

Financial “consortiums,” some foreign (but wait, don’t jump on the Chinese yet…the documentary mentions big money coming in from Russia and Dubai), and some domestic, have been buying up whole buildings and to drive prices out, then selling them to US at inflated prices for “lack of demand.”

So there you go, if there were no SUCKER Canadians buying overinflated real estate at SUCKER prices, foreign and domestic speculators wouldn’t waste their time speculating. There are other ways to launder money, after all…

It all comes down to personal responsibility. Rent if you don’t want to buy at overvalued crap at unreasonable prices, and if you don’t want to rent, go somewhere else where job prospects are better and prices are cheaper. It’s all just simple logic.

#62 Smoking Man on 11.28.13 at 11:25 pm

#49 John on 11.28.13 at 11:05 pm
#37 Smoking Man

Hey, who knows maybe you are right, but my 2 cents I disagree. You look at a blog and either it’s of no interest (yours which I quickly checked out), or it’s interesting, Garth’s; but the comments are so out there you can’t be bothered participating in most cases.
In the end it’s a friggin’ blog and I am not going to lose sleep over it.
Have a good one!

John
……………………………………………….

See John that’s a cop out….

I can feel you have something more to say, but conditioning and schooling has immobilized your mind. You are frighten to take a risk and really speak your mind.

I understand I know the animals that did this to you.

I won’t judge you for running away.

#63 FTP - First Time Poster on 11.28.13 at 11:26 pm

Correct on all counts except the following Garth:

Fracking and other techniques have increased US oil production to eight million barrels a day and started that country on the fast track to energy independence.

The US will NEVER have energy independence. The decline rates of shale oil wells are typically 90% after the first year. They have to punch more holes closer together to achieve NEAR the same rates, however, those costs increase the overall recovery rate, but at a cost of multiples.

Shale oil is nothing new – Shell has been playing with it since the late 60’s and up until SAGD technology was utilized, the recovery rate from say 1970-2010 was a paltry 400,000 barrels. In another 5-10yrs, the recovery rate of shale oil in the Bakken will be so low, it will be uneconomical – hence the reason for never ending wars.

#64 Bottoms_Up on 11.28.13 at 11:29 pm

I once asked a native born Chinese dude in my lab where Chinese people looking to emigrate wanted to go. Canada was about last on the list (I believe he mentioned London, New York, San Fran, California, some EU cities etc.). Thus, if immigrants are responsible for driving prices higher here, then the same effect should be seen elsewhere.

#65 Cici on 11.28.13 at 11:32 pm

#10 [email protected]

I remember far below that – like 49 cents a litre. Believe that was about 25 years ago though…still, I think we were around 70 cents a litre 11 years ago.

But no, inflation just isn’t high enough according to our government and banking bigwigs.

#66 ILoveCharts on 11.28.13 at 11:35 pm

Re:
Are they Chinese, or Canadians? If they live with you, they don’t live in China. — Garth

They are a mixed bag I’m sure. Some students, PR, Canadian Citizens and Chinese Citizens. I met a realtor in the elevator the other day – she was selling a unit that a mom had bought for her son to go to school here. Lots of cars in the garage (the ones with the Chinese charms hanging off the rear-view mirror,) don’t seem to ever move.

And that gets to the point. It doesn’t matter what the status of these people is. What matters is where the money comes from. And the money in this building originated in Mainland China. Price to income (if you are only counting income earned in Canada,) is a worthless indicator in this building.

I’m not mad at these people. They are doing the same thing I would do. However, trying to pretend they don’t exist isn’t going to help anything.

#67 TnT on 11.28.13 at 11:35 pm

#52 gogo

Because there’s a supportive government, banking system and community in BC where the investor can feel confident that his money will not be confiscated and will have a real opportunity to flourish and get a head start as a Canadian….

#68 Cici on 11.28.13 at 11:37 pm

#20 Freedom First

He should just take them out with his Hummer…Nothing like a good pre-emptive strike.

#69 BigBlockPower on 11.28.13 at 11:40 pm

Garth,

Thanks again for all the great free advice. We read your blog everyday at work…lol. We have reduced our total debt by 66% and hope to be debt free by June. TFSA’s growing – both of them. We also rent :)

i have a question for you.

Although we have a metals position of more than 10% of our portfolio (more like 30%), do you think producing Canadian natural resource sector companies (with no debt) will be a good long-term investment?

#70 Bottoms_Up on 11.28.13 at 11:41 pm

#33 Paul on 11.28.13 at 10:37 pm
—————————————
I wrote down on a scrap piece of paper the average price of gas in fall 2010 was ~$1.05. It’s gone up 20% in 3 years.

#71 Canadian Watchdog on 11.28.13 at 11:47 pm

Ok one question:  Why are there MLS listing websites for Vancouver properties in Shanghai? VanFun.com

Shanghai Headquarters Address:
No. 33 Hua Yuan Shi Qiao Road, Pudong, Shanghai
Citigroup Building Room 703
Postal Code: 200120
Tel 021 -68953977

Or Hong Kong..  Realtyoffshore.com

17 / F Best-o-Best Comm. Centre,
No. 32-36 Ferry St., Kowloon
HONG KONG

tel.: +852 8170 0413

Moscow too? http://www.canada.antula.ru

Russia, Moscow
+7-916-134-36-30
+7-903-125-43-31
Skype: antula-moscow
Mail: [email protected]

Anyone?

#72 not 1st on 11.28.13 at 11:51 pm

#63 FTP – First Time Poster on 11.28.13 at 11:26 pm

The US will NEVER have energy independence.

—–
I suggest you take another look but this time factor their real oil reserves including Alaska plus the growth of renewables and the new auto fuel standards coming in 2016, electric cars and ethanol.

Oil sub $50 within 5 years.

#73 Nebbio on 11.28.13 at 11:52 pm

#66 Antidotal evidence like “I met a realtor in the elevator the other day” is hardly the kind of hard statistical evidence I would want to be betting my hard earned money on.

#74 recharts on 11.28.13 at 11:54 pm

Are they Chinese, or Canadians? If they live with you, they don’t live in China. — Garth

I don’t want to believe that you are not able to make a difference between inclinations inherited via ethnicity and inclinations inherited via citizenship or residence.
Also when you need a translator that tells you to what degree those guys are ‘canadians’ even if they live in this country.

If you are not able to make that difference they you have wasted your time in this country.
There is things that people born here will probably lose (ex burka, dagger, turban etc) but there is things that they will never lose because it is a cultural inheritance, perception etc, call it what you want.

That is one side of the story. So yes some people’s inclination to speculate and to make money at any social cost is real. People from some communities are more individualistic and independent than people from other communities. Working the land together in big families evolved in working together to pay a house and sell it later. Some ethnic groups are more numerous than others ..THAT IS A FACT. In some cultures a numerous extended family is also a fact while in others it is not.
Here are numbers
http://www.toronto.ca/toronto_facts/diversity.htm
http://en.wikipedia.org/wiki/Chinese_Canadian#List_of_Canadian_census_subdivisions_with_Chinese_populations_higher_than_the_national_average

So those being the numbers we have statistically speaking it is more probable that a certain group will have a higher influence on the RE market, especially if their cultural perception is that the house is an important asset, a must have. Some will not even consider you human if you don’t drive a german car and you don’t have a house :))

Since you like numbers I invite you to check which GTA area had the highest price appreciation and what ethnic group is dominant in that area

The other part of the story was confirmed to us by the Condo King who was selling these condos to …investors in batches of 5-10-15 etc. That is a factor. Statistically speaking the chances are higher that those investors belong to a specific ethnic group.

However I think that your reaction is late. So is your censored rears’. The issue is over, it is done and can not be undone. They do not invest anymore, that is a sure fact. They are not imbeciles and they see the clouds gathering on Canada’s sky.

That “prove it” of yours is very unfair. You like us to believe that because we can not prove it with numbers it doesn’t actually happen. How is your tactic different that CREA’s. We can hardly prove that they are fudging the numbers because there is no other source than CREA and their local puppies in every city or area.

Do you prove all your speculations regarding the american recovery?
Do you have numbers to support that? Why are you so inclined to ignore numbers who seem to indicate the contrary? Do you bother to “prove it”?

“When you need a translator that tells you to what degree those guys are ‘canadians’ even if they live in this country.” My wife’s family came from Poland in the 1930s. The old folks never learned English. Guess they wouldn’t have been white enough for you. — Garth

#75 Basil Fawlty on 11.28.13 at 11:55 pm

Many analysts say that fracking is not sustainable, as an oil production method. This is due to the high energy inputs required, water pollution and the high well depletion rate. Depletion rates average 50% the first year.
My Chinese friends in Vancouver are very familiar with the hot money entering this town, although they say it is slowing down. They tell me about it from time to time and it is rather obvious to residents on the Westside. I see them at the Driving Range all the time and the parking lot is full of choice vehicles.
I have lived here 50 years and the new Asian money is easy to see. People want a safe haven, so they park some money in Canada. It’s not complicated…

Nor is it driving the entire real estate market. That is pure myth and yellow peril. — Garth

#76 recharts on 11.28.13 at 11:58 pm

One more thing, since we talk about numbers: are the RE agents all hit by the mad cow’s disease? Why are they using tons of 8888888 in the asking price for any property? I am sure that number 8 is an Icelandic lucky number isn’t it

#77 Alero01 on 11.29.13 at 12:03 am

#9. John – You took the words right out of my mouth.

Garth, please keep up the good work. Your words are appreciated and I learn a great deal by visiting your website. Like John, I’m absolutely stunned by how many less than intellectually-admirable people leave comments here but I do continue to visit on a daily basis. You have created a great blog!

#78 Cici on 11.29.13 at 12:06 am

#71 Canadian Watchdog

Breaking news, there are Canadian realty listings in many other countries too, even Eastern Europe. I even found listings on Romanian sites a couple of years ago.

I think it comes down to consortiums buying up the buildings, advertising half of the units abroad to steal cash from petty speculators (who will be saddled with the losses), and only selling a quarter to half of the building to Canadians (to create a lack of supply and drive demand and prices, since people always want they think they might ever be able to have) = they double or triple their profits and leave us (and the petty small-time speculators) with all of the losses.
Oh yeah, and then working and contributing Canadians who have immigrated here from other countries get saddled with all the blame.
Nice Canada, nice.

#79 Cici on 11.29.13 at 12:07 am

oops, meant “even IN Eastern Europe” :-)

#80 Okotokian on 11.29.13 at 12:08 am

In thegloveandmail today

The report illustrates the potential implications of these factors in one worrisome chain of events: “In one possible scenario, the Toronto rental market may no longer absorb supply as it comes on-stream, resulting in lower rents and increasing cash outflows for landlords, who then decide to sell, at first in a trickle and then in a thunderous herd.

#81 coastal on 11.29.13 at 12:08 am

Watching GlobalBC and Chris Galius pump the comparison of what you can buy in France versus Vancouver for $22 million is the worst piece of crap I have ever seen on Global. Who gives a rats ass in the first place, and secondly the places were all old mansion/castles that cost thousands to maintain and heat. Of course they forgot to mention France is on the verge of major financial pain but that would mean reporting reality.

Worst part was reading friends on Facebook agreeing with the comparison. What did you say about how stupid Canadians are when it comes to houses and money?

#82 recharts on 11.29.13 at 12:11 am

“When you need a translator that tells you to what degree those guys are ‘canadians’ even if they live in this country.” My wife’s family came from Poland in the 1930s. The old folks never learned English. Guess they wouldn’t have been white enough for you. — Garth

Do not divert the topic.
It was your comment that since they spoke chinese and they lived in Canada they were Canadians. I argued with that logic that you used in that reply. The fact that someone eats, pays rent or a mortgage here does not make him a different person with different mentality.

The guy did say that they were polish or serbians or whatever. And yes Poland was never a source of dubious capital for a simple reasons: there was not much of that at the source
Not the same thing can be said about the subject of our topic or ..for instance about Mafia money laundered in Quebec or Ontario

I heard that on TV, of course, by your standards can not be proved, not yet, so it does not exist, right ??

#83 Hh on 11.29.13 at 12:12 am

The US. Travel down 1.5 % this long weekend YoY and Walmart sales expected to be worse since 2009.

Some recovery

#84 recharts on 11.29.13 at 12:14 am

The guy did say =The guy didn’t say

#85 harboursnug on 11.29.13 at 12:16 am

#49 John on 11.28.13 at 11:05 pm

SM has a blog? lol

He spends 24 hours a day on here, so much for his blog.

#86 WinnipegGuy on 11.29.13 at 12:24 am

Déjà vu! I feel as if I have read this post before. Glitch in the Matrix?

#87 John in Mtl on 11.29.13 at 12:31 am

You want HAM foreign money to stop coming to Canada?
Then stop buying all that cheap junk made in China at those
big box stores…

#88 John in Mtl on 11.29.13 at 12:32 am

“Two years ago I suggested you buy America and sell Canada. It was evident we were on the wrong path, while the US entered recovery.”

The US pensions shit storm is coming, so are muni defaults & bankruptcies – there is no real recovery in the USA, only make-beleive to keep bleeding the sheeple. Canada will eventually follow in the same path, thanks to gov’t like Harper’s conservatives.

Have a nice long read all about it here: http://www.theautomaticearth.com/nicole-foss-where-the-rubber-meets-the-road-in-america/

Nicole is the princess of death. — Garth

#89 Obvious Truth on 11.29.13 at 12:33 am

If we really have all these foreigners speculating in the condo market doesn’t it make it even more dangerous?

They don’t need it as a place to live.
If it’s not going up they dump.
They are the first to stop buying and move on.
They probably won’t like a depreciating dollar.
Low C$ leads to inflation and higher rates.
Investors know what higher rates mean.
Markets imply sellers/buyers, winners/losers.

#90 John in Mtl on 11.29.13 at 12:39 am

@ #63 FTP – First Time Poster on 11.28.13 at 11:26 pm

“Fracking and other techniques have increased US oil production to eight million barrels a day and started that country on the fast track to energy independence.”

Hehe, they need a lot more than 8M BPD to run their economy… more like 20

@#75 Basil Fawlty on 11.28.13 at 11:55 pm

Many analysts say that fracking is not sustainable, as an oil production method. This is due to the high energy inputs required, water pollution and the high well depletion rate. Depletion rates average 50% the first year.

You got that right! Fracking is not a viable alternative for many reasons and besides, it leaves a great toxic trail in its path. Coal and nat gas are the big thing these days… but again, nobody cares that burning coal contributes to screwing up the planet’s air and climate systems.

Let us all kneel and pray to the almighty dollar.

#91 Bob on 11.29.13 at 12:39 am

Sure if the Cdn $ falls, you may boost exports. But, the purchasing power of Canadians will drop and the price of real estate for foreigners also becomes a better deal possibly causing this gasbag to inflate further. Be careful what you wish for

#92 John in Mtl on 11.29.13 at 12:40 am

“Nicole is the princess of death. — Garth”

Maybe so but you cannot deny what she reports.

#93 Jimmy on 11.29.13 at 12:40 am

A couple of reports I read recently regarding today’s topic:

http://www.cnbc.com/id/101225345

http://www.cnbc.com/id/101225781

#94 Canadian Watchdog on 11.29.13 at 12:44 am

#78 Cici

I agree. And part of that capital inflow is coming from corporations being setup in Canada to buy property on behalf of global investors. Chart Yet the banks say it's all being driven by pre-approvals. Pffft.

Not to mention, some latest estimates by a national statistics agency say that up to 30% of residential sales are private and not recorded on MLS. Scutlebutt is: StatsCan is mulling a new home price index cause the IMF says Canada needs to adopt better standards for home price tracking. Hmmm…

You heard it here first.

#95 Bob on 11.29.13 at 12:47 am

The Canadian Gov’t should mildly raise interest rates. Not enough to upset a fragile economy (only .25) but enough to signal to future indebted homeowners to pause and think.

A $.93 is not going to restore our manufacturing base.

#96 FormerSaskie on 11.29.13 at 12:52 am

Where would we get balanced information if you didn’t produce this blog for us Garth? Thankyou.

My question tonight is which areas of the Canadian economy do you think will remain/become sucessful over the next 5 or so years. We seem to have lost our momentum.

#97 takla on 11.29.13 at 12:52 am

F and his gov. parasitic banker buddies are well on their way to exterminateing their hosts,their basically running a big ol’ farming operation on the unsuspecting masses by manipulateing bank interest rates,holding them low[planting},let them slowly rise{grow }then spike them to very high levels as they withhold credit causing widespread defaults{harvesting of proceeds},,,rinse and repeat.This is not new But this time will be different as I believe the banking cartel will over harvest making future fleeceing of the people unattainable.Once we go thru the next default faze the recouvery,if there is one will take ten yrs or more,lets hope the consumers of this country {middle class}have a long memory.

#98 raisemyrent on 11.29.13 at 1:00 am

Sorry, Smoking Man has a blog?!
Hahaha

#99 Canadian Watchdog on 11.29.13 at 1:11 am

Correction on #94. Chart data is for private businesses (non-financial corporations and unincorporated businesses). I said corporations.

#100 lookoutbelow on 11.29.13 at 1:12 am

“Foreigners influence every market in varying ways, but there are no stats to prove Canada’s more unique than the US, or Vancouver more impacted by offshore money than Seattle or San Francisco.”

I agree foreigners influence the market but to what extent? In my local market Richmond BC which is probably the epicenter, no-one is likely to admit knowing let alone publish actual data! Can you imagine the uproar if someone did?

I mean this is Canada, a country built by immigrants whether they be white, black, brown or yellow or green. This is who we are.

Here is my two bits:

To me the issue is not how many foreigners own real estate but how many are actually using the mansions or condos as their shelter. We have lived here for almost 30 years (yes we are immigrants) and we have seen Richmond actually transformed to a predominantly Chinese city when we look at the business signage, real estate for sale signs, most retail staff, you name it…..

I am actually OK with all this as long as people that own local real estate, live here, work here, pay taxes here, and use the social services available to all taxpayers.

What I do object to is people, whover they may be, using real estate as a futures contract! These people should be taxed at 100% of the Capital Gain!

#101 Corban on 11.29.13 at 1:13 am

Wow, I’m first generation born in Canada, and my wife is fresh off the boat Chinese. To that comment I say go f yourself. My tiny marbles and I are quite happy with my chinese “boss”; she makes me quite happy.

#102 ozy - LOONIE BALLOONY on 11.29.13 at 1:16 am

LOONIE BALLOONY, IT WILL be at o.75 US $ in 5 years and Canadian RE will be 20% more expensive by then

write it down. I am talking about smart houses in smart places deserved by smart people only

the rest…no comment…when shit had value anyway…

#103 Capital One on 11.29.13 at 1:31 am

#9 John

I agree with your sentiment.

Smoking Man – I rarely read your ramblings. Try to shorten things up.
Tiger – whiskey tango foxtrot? I wish I had an “ignore”
option.
Garth – good posts this week.

#104 Tony on 11.29.13 at 1:40 am

Re: #15 Robert on 11.28.13 at 10:09 pm

America will likely never taper and actually increase quantitative easing by buying more bonds every month. Looking at the long term debt in Canada and America and the decision should be easy. Convert all America dollars to Canadian. Oil will likely fall to the low 70 dollar U.S. area but oil production overseas will probably be curtailed to drive prices back upwards.

#105 AngryMan127 on 11.29.13 at 1:42 am

I understand that you don’t want to become the conduit for anti-Chinese sentiment in this country but it’s not the 1900s…we are 30 million in a world where BILLIONS would choose immigrate to Canada. Our country’s culture is worth preserving.

The speed and scale of immigration and capital movement are historically unprecedented and federal policy encourages this.

Ian Young, a Hong Kong based journalist suggested that “75 per cent of high-end Metro Vancouver homes in one recent year were sold to Mainland Chinese”

http://blogs.vancouversun.com/2013/11/24/in-hong-kong-vancouver-real-estate-is-big-news-for-the-same-reason/

Please consider visiting Vancouver next time you come to BC.

#106 Basil Fawlty on 11.29.13 at 1:45 am

“Nor is it driving the entire real estate market. That is pure myth and yellow peril. — Garth”

You are correct, Sir!

#107 wanting waiting on 11.29.13 at 1:51 am

Those xenophobes you refer to are not far off the truth that our politicians refuse to address.

I was in a spitting match with Richmond council a few years ago about the complete lack of proper english signage in their ‘asian’ malls that are setup for the investment class imigrants from mainland china (it used to be for hong kong folks before that) anyway, the mayor and councillors saw no issue with it eventhough a petition was brought forward. They simply told us not to bother shopping there.

As for the large sums pouring into our country for real estste speculation, have you ever thought of how much taxes they pay to accumulate that money in their country? 0.5% How would Canadians like that kind of tax rate?

#108 willworkforpickles on 11.29.13 at 1:52 am

Mortgage rates will surely begin to edge up as sure as you can say – up your NASDAQ- .
Cheaper oil will have the gold miners singing too.

#109 Jay on 11.29.13 at 1:53 am

I’ve never understood how a growing economy doesn’t directly improve commodity prices — Sure, people aren’t hedging their bets with gold, but those super profitable businesses should be going out and buying things made of plastic, steel, and wood, so demand should be up, shouldn’t it? Investment tends to be the smallest part of a market.

#110 wallflower on 11.29.13 at 1:56 am

zombie city solution = double the property taxes for non residents – the property transfer tax is useless instrument – one-time; annual property taxes is recurring – Canadian snowbirds owning in Florida have to pay a whole lot more than their American neighbours; makes sense to them or they wouldn’t be buying there; so why shouldn’t we be charging non-residents here? it puts a break on some of the speculation buying and generates a lot more cash for the residents to enjoy expanded services/facilities

#111 Waterloo Resident on 11.29.13 at 2:05 am

If you are invested in stocks, you might want to dial back for the next 4 weeks. Things are a bit over-bought.

#112 Spectacle on 11.29.13 at 2:05 am

Thank You so much Garth!

Didn’t realize the overt flack You take in bringing us the blog. Appreciated by many….

I guess #57 bottoms_Up gets post of the night! My own experiences over the years living/visiting in many countries. Cuba has Russian and Chinese communities all out on their own district. Sadly, Europe is in pre-up-in-flames mode.

I assume others than myself, have Garthist insights through the day. You provide another tool to reflect on the work we all must do for ourselves to construct security and enjoyment in our life.

Thanks

#113 Tony on 11.29.13 at 2:07 am

Re: #94 Canadian Watchdog on 11.29.13 at 12:44 am

From what i’ve read it’s first time buyers.

#114 wilbur on 11.29.13 at 2:26 am

For me it is very sad, that Canadian’s are not educated enough to understand our housing situation has been nothing but bad news… Our countries Real Estate market reporters, are allowed to report numbers that are not true… Leaving uneducated newbies feel buy now or for ever be locked out…
Even myself, I have had to sit my kids down and explain why it is not a good time to buy when they watch everyone and their dog buy…
How do you know, the real estate won’t continue to rise, is the question I was asked…
I sat in a car for 2 hours driving and explained to my daughter, why not to buy…
Good thing we were doing a road trip to Seattle from Vancouver…
She gets it now…
It is sad that this will end badly for many newbie home owners…
Anyone that takes pride in this is truly, out to lunch…
Many Canadian’s are going to lose their shirts and wish they had someone talk to them, like I did my daughter…

#115 Shabbythecat on 11.29.13 at 2:30 am

Bill Gable… Where did you get this stat from?

“How about this for a number?
In 5 years, 3700 Broadcasters have been cut lose.

That’s just ONE industry getting eviscerated. No jobs – none on the horizon = no money, nada”

#116 Tom from Mississauga on 11.29.13 at 2:32 am

Ah Garth, I just Google searched the image of Iran’s sweet little foreign minister. I thought she’d be hot? I ended up puking. Put that on your 227th page!

#117 wallflower on 11.29.13 at 2:32 am

#93 Jimmy on 11.29.13 at 12:40 am

Glanced at your posted report links. Struck by how “I have seen this playbook before.”
This is all unfolding just like the ~1989Japan situation. I was in Waikiki in a hotel for two weeks and whenever the tv was on, all broadcasters were talking the same stuff… There was palpable hysteria in the air. Hhhhhmm. Maybe the next ground zero will be China after all. Not real estate in Halifax. Not 60% youth unemployment in Spain… It’ll be China.

#118 Tom from Mississauga on 11.29.13 at 2:39 am

BTW, to your post’s point, my friend from Laval is in Mississauga looking for work. There is absolutely none in Montreal at all.

#119 rerecharts on 11.29.13 at 2:47 am

#82, #82 I concur

I admire Garth’s tenacity at finding amusing and useful things to say each day.
But I got very turned off by his extreme biased use of “prove it” to discredit very reasonable comments.

I believe Chinese are very real factor in affecting real estates prices in Vancouver and then Toronto; most significant principal component in stat term, and no I don’t have ready numerical proof.

All I can say is look at evidences on the side.
Look at the many RE advertisements targeted to Chinese; developers and agents won’t throw money away just to be fair and equitable to all ethnic groups.

Sure local Canadian speculation is also very very important to causing the price explosion.
But Garth should not so almost impolitely blush away valid comments.
His attempt at diverting the topic is downright very distasteful.

#120 Vancouver Dude on 11.29.13 at 2:57 am

All i know is that if you drive by any west side Vancouver school at recess time, 90% of the kids are asian, come 3 PM the Range Rovers, Mercs, Beamers etc are lined up for blocks waiting to pick up the kids, Garth you don’t live here to see whos buying Vancouver the majority are foreigners

#121 Hollywood on 11.29.13 at 3:05 am

#66 ILoveCharts

“And that gets to the point. It doesn’t matter what the status of these people is. What matters is where the money comes from. And the money in this building originated in Mainland China. Price to income (if you are only counting income earned in Canada,) is a worthless indicator in this building.”

I agree totally with your comments. In fact you are the only one to mention it in a straightforward truthful manner. The point being, you can be a Canadian resident but where is that money coming from to buy that house/land. If the money is coming from a source overseas then basically if is from a non-Canadian source. The same can be said for Saskatchewan farmland which has been under scrutiny over the last few years i.e. you need to be a resident which is required but the funds are coming elsewhere (outside the country).

#122 Regretful on 11.29.13 at 3:11 am

Interesting observations but grounded too much in statistics than reality. One has to get out from behind the computer and get on the ground walking. Once you walk through neighbourhoods one might come to a different conclusion than whats being posted. The statistics posted in regards to average family incomes and cost of homes make no sense from a mathematical perspective. Time for one more double bourbon. Rent cheque due this weekend

#123 Isee on 11.29.13 at 3:20 am

Are they Chinese, or Canadians? If they live with you, they don’t live in China. — Garth

Here in lies the problem with people like you garth. You conveniently throw out any identity that is uniquely Canadian. People coming here (who were born and raised somewhere else) and can barely speak the language are never going to viewed as ‘canadian’, and i can assure you they don’t see themselves as canadian either.

My wife is from japan and has perm residency here. She does not identify herself as canadian. She, and all the japanese people i have talked to who weren’t born in canada but are living here, identify themselves as japanese who LIVE in canada.

Work is another great example. Take a chinese person who was born and raised outside of canada and has recently moved to this country. Next take a canadian who was born and raised here but has chinese ancestry. I can assure there is a difference in attitudes, beliefs, thought patterns and their ability to fit in and get along. This same experience applies to all the RUSSIANS at my work. If they aren’t born and raised here they act, think and behave as if they are Russian, not Canadian.

Seriously just answer the following…. if you or I were to move to china tomorrow and score permanent residency there would you suddenly see yourself as Chinese? Would you expect all the people in china to immediately start viewing you as a Chinese person even though your grasp of the language would be at beginner level? Would you come back to Canada for a visit and expect your friends and relatives in Canada to now view as a Chinese person?

#124 Frustrated Kiwi on 11.29.13 at 3:30 am

We have the same meme here on Asian buying. See
http://snoopingkiwi.com/2013/07/asian-child-buys-house-to-annoy-white-people-in-auckland/
(a spoof)
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10848593
(a real article)
The frustrating thing is that there appear to be no stats kept (although one company has just started surveying realtors on this). I believe both the UK and the US keep stats on this – would seem to be common sense. One thing that seems clear is that foreign buying increases market risk – as they can withdraw the money more easily than residents.

#125 Barry Lainof on 11.29.13 at 3:41 am

“To be fair Timmy, Garth’s warnings were based on fundamentals, and had it not been for quantitative easing in the States, and excessive printing of money in Canada and around the world, the gasbag would have deflated a long time ago.”

Garth would never make excuses like the ones listed above. That would make him sound like a gold bug, conspiracies and all that nonsense. Garth has shown too much integrity to take the easy way out of mistiming a real estate correction. Sheesh, everybody makes mistakes.

And to criticize his positive outlook for the USA is equally unfair. After all, the world has never seen such debt, so many young people without jobs worldwide, so many once great cities bankrupt or on their way to insolvency – where else would hedge funds, banks and state owned corporations put their investors money (and collect big fat bonuses) but into the world’s reserve currency hegemon “the U S of A” and it’s real estate, stock and bond markets. I’m sure that is long term investment money – not “hot” money, that could be withdrawn if confidence in the well run and stable US government ever wanes.

Be kind to Garth is the meme. He’s just another guy with an opinion, that is sometimes right and sometimes wrong.

#126 SmallTownTokenBrown on 11.29.13 at 3:55 am

If we disregard foreign capital completely, there is still the issue of financially illiterate 45 year old’s – working for 16 bucks an hour – buying $450,000 homes so they can achieve the Canadian version of the ‘American Dream’.

I work in an environment (and industry) with a very large immigrant workforce and the financial planning of some of these guys and gals is atrocious. And yes, there are idiot Canadians but a lot of the workers that have been born in Canada or been here a while understand that it’s not utopia money land here (think how most of the world thinks Friends is a good representation of life in NYC).

For the most part, Canadian born or been-here-a-while- Canadians in the same income bracket are renting and living within their means and have already experienced the mistake of running up a small credit card to $2000 as the first error in financial judgement, not diving headfirst into 100’s of k’s of debt and buying a home because it’s what they think is the norm.

I’m a minority myself and my father is an immigrant, this isn’t a result of selective confirmation bias. I’d say very few NEW immigrants understand that a $30,000 new car and a $400,000 home are not wise purchases to be making your second year in Canada and first year making just over 38k with a wife working minimum wage. Most of my coworkers (immigrant or not) think I’m just a contrarian when I say these houses are overvalued and they have been told by everyone in western society that “House prices never go down”.

Maybe it’s just me, but I cannot believe how many people who are new to this country are buying $400,000 homes and think it’s normal to go that deep in debt 20 years from retirement.

Also, I don’t think there is anything xenophobic or racist about raising the question of how much foreign capital has a role in our housing market.

Many countries left and right track and have strict rules about foreign ownership for a multitude of reasons. Canada should do the same.

#127 Jane 24 on 11.29.13 at 4:29 am

Hi Garth

I have literally just returned home to England from a business trip to Hong Kong. Most of the Hong Kongese I talked too have family in Van or TO but said that such family members were either back home or coming home. When I asked why, the answer was that the original 1980s and 1990s Hong Kong immigrants in Canada now feel over run with mainland Chinese in both Van and TO.

The Hong Kongese are very astute people, they also feel that it is time to get their money out of Canada. Current new fav places for RE investment are Singapore and Taiwan. Closer to home.

Big article in the China Morning Post also on the fading phenomenon of ‘astronaut children.’ This is what mainland Chinese call the concept of leaving university age children alone in Canada in a big house while the rest of the family work tax-free in China. Article said that the parents are finally waking up to the psychological damage and family break-up results of such practice. If you only have one chid, then really why is he or she in Canada? Plus many now feel that future opportunities are better China than Canada.

You can learn a lot reading newspapers as you travel.

#128 juno on 11.29.13 at 4:31 am

#51 TnT on 11.28.13 at 11:06 pm

Well, it wasn’t the Chinese who forced us to borrow so much. Or made tacky Vancouver bungalows average $1.1 million. It
=======================

No freakin way. Don’t blame the chinese. Its your own government who got us to borrow like heck

Low interest rates.
40+ year loans
No Credit checks
CMHC – backing up the “HIGH RISK LOANS”
Close to Zero percent returns for savers

They lend the money we keep on buying chinese “SLAVE LABOUR” crap.

And the worst thing is the government doesn’t have the Balls to restraint our the average person’s debt addiction

#129 juno on 11.29.13 at 4:39 am

Don’t forget the high cost of housing and business rental rates doesn’t entice New startup businesses.

#130 cynically on 11.29.13 at 4:40 am

Re the Offshore RE argument: It may not be driving the market today but it sure was the catalyst that started it at the time of the Hong Kong crisis and as the mainland Chinese business people began to prosper they too saw Vancouver as a good, safe place in which to invest. After all this city had the second or third largest Chinese background population in N. America after SF and NY, both which had much higher RE prices than Vancouver due to their far greater business interests and a government less willing to allow entry for their own reasons while Canada was very accepting of immigration with money. The business investment has probably been very good for Vancouver and the country but Vancouver citizens have paid the price of the resulting high RE prices. You had to live here to see what occurred and you didn’t but you are right about the results from the average Vancouverite chasing these insanely higher prices. However it is totally unfair on your part to label everyone who points out what they’ve seen, heard or read on the subject as xenophobic or racist but I guess as a former politician this is being politically correct.

#131 Cougar on 11.29.13 at 4:52 am

Garth, I come here to read your blog every night because I love you!

#132 Buy? Curious? on 11.29.13 at 5:21 am

Garth, I first want to thank you for letting me be part of the 1%. Here I thought I was bringing the quality of comments down because of my immaturity, when all this time you’re getting hate mail from crazier people. I’m glad to hear you’re forwarding those emails on to the RCMP. Very NSA-ish of you.

As for your post, there’s a reason why these people don’t have any proof of Chinese buying up everything in sight. Who’s crazy enough to do that type research/poll? You’d be called a racist 2 seconds after you read the title. It’s the same reason cops don’t keep racial stats of those commiting crimes. Look at the Toronto Star. Ever read their crime reports? “Suspect was 5ft 8 wearing a puffy jacket and sandals.” Yeah, I’ll keep my eyes peeled. I’m pro-Immigration, anti-Religion and would encourage more people to come over. These houses aren’t going to buy themselves. And do I give a rat’s ass if some Iranian couple buy my parents’ place for $100k over asking?

As for the fracking reference, that’s great to hear how you care about future generations. Fracking wrecks the water table for hundreds of miles. I’m sure most ‘Mericans don’t worry about that.

http://www.youtube.com/watch?v=dZe1AeH0Qz8

#133 skeptic on 11.29.13 at 5:36 am

Garth, you love to point out all the instances where you were right by cherry picking US ETF’s that have offered superior returns. How about acknowledging some of your mistakes as well? Like being wrong on the Canadian housing market for 5 years straight or dismissing bitcoins even though they have outperformed your US ETF by multiples?

I did not mention any American ETFs. Real estate is in trouble. Bitcoins are a joke. — Garth

#134 Harry Wilson on 11.29.13 at 5:45 am

Since it’s Thank You, Garth day, I would also like to offer my thanks to you, Mr. Turner, not for what you’ve done for the wealthy, or the middle class, but for the ‘other one percent’ (bottom), the lowly transit rider.

Up until the late nineties, there used to be one whackadoodle on every bus. It was such a given that they would be there, sitting opposite the driver, that I started to believe that the bus companies were actually hiring these guys.

Since the rise of the internet, however, the slope-headed mouth-breathers are spending their time in website comment sections, and riding a bus has actually become an even more pleasant and stress-free experience.

Imagine, a conservative estimate of five comments per single-spaced page, not directed at some poor slob just going home from work, means that so far this year, you alone are responsible for a more pleasant bus ride for 1,124 people (and we still have the Christmas season to go).

Thank you for ‘taking one for the team’, Mr. Turner.

#135 Harry Wilson on 11.29.13 at 5:55 am

Erratum:

Make that 1,130 people.

It’s late, and I didn’t use a pencil.

G’night.

#136 Oh how things never change... on 11.29.13 at 6:07 am

Canadians are as ignorant then as they are today. Nothing has been learned….

When things don’t make sense, it is human nature to create fantasies that allow us to explain these mysteries in simplified terms. In the case of house prices, it is best explained by some kind of foreign “outside force” like “Asians, Russians, Iranians” etc etc. Within that little bubble, every zenophobic and idiotic feeling is logical.

The same nonsense was expressed in 1983, 1989 and now in the present.

Examples below… you could publish these verbatim today and people would agree.

“A study released in January by the [Ontario] ministry of housing says many people believe Asian immigrants and investors are responsible for the higher prices.

-Toronto Star, March 4th 1989

“Asian investors who are driving up housing prices in Canada’s big cities are provoking an angry, anti-immigration attitude among Canadians, a top economist says…the response of the general public is bewilderment and increasing irritation.”.”

-Toronto Star, January 25th 1989

And yet today it’s “different”… right?

#137 Future Expatriate on 11.29.13 at 6:44 am

Re: #13…. anyone, how many years of Canadian schooling does it take to learn to spell the word “sign” and “yourself”?

I think the problems are not just debt and real estate.

#138 Smelly Ghost of History on 11.29.13 at 7:42 am

#14 writes: “My concern is that people born and raised in Canada have to compete with people who make their money in a very different financial and ethical environment.”

You mean… Kind of like Native Canadians’ concerns with “immigrants” in the 18th and 19th centuries?

or just a recurring delusion?

#139 Brian Romanchuk on 11.29.13 at 7:49 am

I don’t want to be morbid, but a Kia may be more likely than a Prius. This blog has been pretty harsh to those poor Kia owners.

They can read? — Garth

#140 mark on 11.29.13 at 8:02 am

I’ve certainly never heard O’Leary be this strident on Canada being in a bubble before.

Rent. Don’t buy, he says.

http://www.cbc.ca/player/News/Business/ID/2420941862/

#141 economictsunami on 11.29.13 at 8:15 am

If & when the Fed tapers, in order to show they have confidence in the recovery of the American economy, what other CB(s) will take it’s place in order to make up for the perceived liquidity short fall?

Perhaps all of them.

The Fed Must Inflate:

http://mises.org/daily/6597/The-Fed-Must-Inflate

After all, it has always quiet simply been a confidence game, in the end…

#142 Bob Loblaw on 11.29.13 at 8:22 am

@ 136 Future Expatriate – you nailed it, sister/brother……and you can’t fix stupid.

#143 torontorocks on 11.29.13 at 8:28 am

There was an excellent article I believe in the last 8-12 months on the Celtic Tiger and the associated real estate boom. Vanity Fair? Esquire? Can’t recall. Great article – as they said, they weren’t creating anything just a higher and higher price as one sold to the other. Until the music stopped. I know for a fact for the 7th goddamn year in a row my Bank is facing ‘headwinds’ despite the quarter on quarter profits these cheap bastards make. Meaning my salary hasn’t gone nowhere near 5pc per year. And I don’t believe any poster here that says he’s 7 figures unless I see his T4 showing 7 figures steady, not one-time, not bonussed or packaged out. Its like me saying I got a johnson the size of a plantain…which I do, but can I prove on the internets?

#144 torontorocks on 11.29.13 at 8:29 am

Sorry – the article may have been 4-10 months ago.

#145 torontorocks on 11.29.13 at 9:03 am

I don’t know when it was published. Just google Irelan Property Boom and see Canada/Toronto/Vancouver in there.

#146 Mike on 11.29.13 at 9:07 am

“Bay Street says 93 cents is probable. Goldman is calling for 88 cents . . . there’s basically no inflation.”

A weaker currency is inflationary – presently 7%.
12% with Goldman forecast

Don’t confuse forex moves with CPI. — Garth

#147 Catalyst on 11.29.13 at 9:33 am

The reason we (HAM believers) cannot ‘prove it’ is because you are looking for “X% of buyers are foreign buyers, reports XYZ agency” – this stat doesn’t exist so you should go by more ‘boots on the ground’ feedback. Alot of realtors, my uncle in BC is one says that most of his clients are overseas asian. ‘The condo game’ doc by CBC featured a realtor who has many clients who buy 4-5 properties sight unseen, dont bother to rent them out.

I was reading some CNN housing related articles and guess what, they are complaining about HAM in california and LA too.

Stop looking for proof that doesnt exist and look at the proof that does exist. It’s real and its in your blindspot.

I have provided numbers previously showing over 90% of Van and Victoria buyers are Canadian residents, the vast preponderance of whom already lived in BC. Like I said, worry about the stuff that actually matters. — Garth

#148 Basil Fawlty on 11.29.13 at 9:37 am

“A weaker currency is inflationary – presently 7%.
12% with Goldman forecast

Don’t confuse forex moves with CPI. — Garth”

Where is the confusion, or are we missing something?

There is such a thing as Currency Induced Cost Push Inflation.

#149 Tdot Res on 11.29.13 at 9:41 am

You quote stats saying that on average, >100% of net income is required to service housing needs with confidence and yet call for credible numbers supporting HAM?

Thanks for the proof :)

#150 Paul at "No Pension Will Travel" on 11.29.13 at 9:43 am

Thought you might enjoy this one: “9 jaw-dropping French castles for the price of 1 Vancouver tear down” http://www.vancitybuzz.com/2013/11/9-jaw-dropping-french-chateaus-for-the-price-of-1-vancouver-tear-down/

#151 recharts on 11.29.13 at 9:44 am

Work is another great example. Take a chinese person who was born and raised outside of canada and has recently moved to this country. Next take a canadian who was born and raised here but has chinese ancestry. I can assure there is a difference in attitudes, beliefs, thought patterns and their ability to fit in and get along. This same experience applies to all the RUSSIANS at my work. If they aren’t born and raised here they act, think and behave as if they are Russian, not Canadian.

I am an immigrant myself and I can give you first hand details and relate direct experience about this. Short story: it is naive to believe that someone who left his country and landed here will be changed by a piece of paper (passport,visa etc).
We change and depending on education and personality we add some canadian flavour (more or less) to our personality.
And yes I can certainly confirm the above. As someone subtly suggested above, there is even differences between HK chinese and mainland chinese. And they don’t love each others.

Another question for the author of this blog: how many open houses have you visited recently? How many chinese did you see there? According with the stats that I posted you above there is other asian ethnic groups that, statistically speaking, should show up if all this is just random.
But guess what!! IT IS NOT. Indians and filipinos are among the most numerous ethnic groups in GTA. As far as I remember I BARELY SAW ANY OF THESE PEOPLE THERE BUT PLENTY OF THE OTHERS.

The top 5 mother tongue languages in 2006 were:
Chinese (420,000);
Italian (195,000);
Punjabi (138,000);
Tagalog/Pilipino (114,000);
Portuguese (113,000).

Italians and Portuguese are already in RE but on the other side of the business: they build they don’t buy.

Anyway, I am not sure that they can complain of racism, just look at what they did and they will do with the japanese businesses in China since the islands psychological and political war started between these two countries.
So it is legal for chinese to burn down foreign businesses in their country but we can not stand up when they buy homes here right?

I am not saying that one crime justifies another one, but your attitude reminds me a little abotu this:

http://momontherange.com/wp-content/uploads/2012/12/Head-in-sand.jpg

The problem of some ethnic groups speculating on the RE market more than others is real and it is related to cultural differences, you might deny that but it is a fact.

I still can’t figure out why you chose to minimize this problem. I can only speculate that long time ago you learned that a politician and a business man never shows what he really thinks. Also being born and educated in Canada makes you more polite, many times more politically correct and for these two reasons less inclined to speak the truth when this hurts people you have to deal with.

You have a problem. Go find anotehr place to vent. — Garth

#152 fixie guy on 11.29.13 at 9:52 am

It’s the other 35-40% causing the problems:

http://www.biv.com/article/20131127/BIV0111/131129941/overseas-buyers-dominate-vancouver-retail-real-estate-purchases

#153 :):(Ying Yang on 11.29.13 at 10:11 am

#105 AngryMan127 on 11.29.13 at 1:42 am

I understand that you don’t want to become the conduit for anti-Chinese sentiment in this country but it’s not the 1900s…we are 30 million in a world where BILLIONS would choose immigrate to Canada. Our country’s culture is worth preserving.
The speed and scale of immigration and capital movement are historically unprecedented and federal policy encourages this.
Ian Young, a Hong Kong based journalist suggested that “75 per cent of high-end Metro Vancouver homes in one recent year were sold to Mainland Chinese”

http://blogs.vancouversun.com/2013/11/24/in-hong-kong-vancouver-real-estate-is-big-news-for-the-same-reason/

Please consider visiting Vancouver next time you come to BC.

———————————————————-

Being of Asian decent I can tell you that there are quite a lot of Mainlanders and ex Hong Kong immigrants that have come here without actually leaving home in a word. Mostly older ones. They come here with baggage, old rules, old thought process, narrow minded in some ways about how their new place of residence should be transformed. Many of them refuse to even learn English or french. My parents moved here from Hong Kong with myself and my older brother to start a new life. I was 4 years old when I came here. The first thing my parents did was to learn about Canada and embrace it. They learned the language and embraced the “Tim Horton” way of life here. I played hockey, they took me to baseball games, we went camping. My father was so proud to become a Canadian citizen and wore a little Canadian flag pin for many years. These were all things that some mainlanders can never do back in Asia! My parents said we have left behind our old ways to start new. We will not forget the old ways but you can not live in the past and you must live for the future. I am about as Canadian as most of my non-Asian friends and so is my brother. As the old Molson beer commercial goes “I am Canadian”
My brother lives and works in Hong Kong but it is strictly for the wages, he does not really care for the life style over there and is only 5-7 years from retiring somewhere here in North America. Yes he owns a property in Vancouver but he gave it to our parents to live in for as long as they want. He intends to retire around 38 or 40. When he retires he figures to be sitting with around $5.5M liquid although right now only some of it is in investments.
So in a nutshell this culture is worth preserving and I believe it should be mandatory with new immigrants that they learn about it before even setting foot in our soil. We love it here!

#154 recharts on 11.29.13 at 10:18 am

Some shitty recent bidding wars (TO SFH )

http://img404.imageshack.us/img404/4409/g9a.png

#155 FullOfFear on 11.29.13 at 10:31 am

“Commodity prices are weak, and likely to stay that way. Bad news for a nation where resource sales are so key …Canada’s job creation machine is running dry … Our manufacturing sector is shrinking monthly … the dollar is at risk” …

And you make fun off and ridicule doomers?!

The post is accurate. — Garth

#156 T.O. Bubble Boy on 11.29.13 at 10:34 am

@ #111 Waterloo Resident on 11.29.13 at 2:05 am
If you are invested in stocks, you might want to dial back for the next 4 weeks. Things are a bit over-bought.

——————————–

What exactly is an investment in “stocks”? Much like real estate, there are a thousand different markets that make up the overall stock market.

I agree that many equity markets are running a bit above traditional fundamentals, but certain sectors and certain global regions are still cheap.

Definitely a good time for re-balancing… I like referencing tools like this free one from morningstar to get an overall sector/sub-sector feel:
http://www.morningstar.com/market-valuation/market-fair-value-graph.aspx

#157 quebec economist on 11.29.13 at 10:39 am

Here in quebec we make it illegal to buy a house if you are wearing a hijab or if you eat with chopsticks. Immigrants must speak better french then our none québecois prime minister (whats up with that, isnt required that the PM be from quebec, good thing we have Trudeau and Mulcair? Sorry garth you warn’t born under the right star…that is why Charest won PC way back when) We are hopelessly outdated, yet our housing market is way over valued. See Québec City, hostile to any immigrant (speaking of the weather of course) except the Francais (who cry and walk with baguettes under their arms( and happen to like winter)). The prices of houses are sky high… and the renting market undersupplied…
So leave the chinese alone!
I would like to be included in your Word doc. so will write something harsh next time….

#158 quebec economist on 11.29.13 at 10:41 am

or was it kim campbell (RE# 147?)

#159 Grantmi on 11.29.13 at 10:57 am

#45 deafdumbandblind on 11.28.13 at 11:03 pm

Gartho…yer full of crap….the facts on foreign ownership were published in the Vancouer Sun recently….you chose to ignore an honest and widely recognized reporters audacity to compile and publish what you prefer to ignore.

Was it that a Chinese reporter spilled the beans…are you the rascist here and not the ones you continually denegrate [sic]?

I read it. No facts. — Garth

http://bit.ly/China_Eats_Vancouver_Realestate

#160 Smoking Man's Spell Checker on 11.29.13 at 10:58 am

So much to do, so little time. It was easier when he had his meds properly titrated.

#161 Grantmi on 11.29.13 at 11:07 am

Figures!

Carney is going to fix the UK problem.. but he bailed on Canada before he fixed ours!! (How Canadian!)

Carney’s Housing Alarm Bell Nudges BOE Toward Stimulus Exit – Bloomberg http://bloom.bg/1ex7IYg

#162 Angie on 11.29.13 at 11:08 am

If people would just live in houses they could actually afford, we wouldn’t be in trouble. By “actually afford”, I mean that all housing costs (mortgage, insurance, hydro, etc.) eats up less than 35% of income.

I think that alot of people are much to proud to live in a small house. I mean what would their friends think of them if they didn’t have a huge home…. I see it all the time, my friends buying huge homes for a family of 3 or 4. They end up having more shitters than they do asses.

#163 Daisy Mae on 11.29.13 at 11:09 am

“Canada’s job creation machine is running dry. In fact, in the past five years I’ve never known as many 50-something, middle-management guys who have been sent home. Most will never work again.”

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

I remember when Brenda Mines in the Okanagan closed. Who wants to hire a 55-year-old trucker?

#164 Toronto_CA on 11.29.13 at 11:18 am

Nice 3rd quarter GDP growth numbers. I’m suspicious of them, but they’re pretty impressive.

#165 greyhound on 11.29.13 at 11:25 am

fool.com says it well,
Question: “He was tired of throwing his money away renting, so he bought a house.”

Answer: “He knows a mortgage is renting money from a bank, right?”

#166 Shawn on 11.29.13 at 11:36 am

Irrational Home Buyers

95% of home buyers are ruining it for the rest of us.

#167 Daisy Mae on 11.29.13 at 11:45 am

#1 P-gizzle: “…investors will pull out. They will make out like bandits…”

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

Well, these investors are still responsible for monthly strata fees, utilities — there are minimal costs such as ‘delivery’ to the unit — property taxes, all the while watching the value of their units drop and scrambling for buyers.

#168 Yo on 11.29.13 at 11:58 am

Great piece. I often shake my head (I am chinese canadian) about how people think the “foreigners” are jacking up prices. In the GTA, mainland chinese pretty much only buy in places like Markham, Richmond Hill and areas in North York generally. They do not pay $700K for a semi-house 15 foot dump in River dale or $1M for a small 3 bedroom in Leaside. They don’t like small or old houses. They don’t buy in $1M old victorians in parkdale where the local schools are not that good. Its just the way it is. The general market has been driven by just cheap financing, which the mainland chinese have also indirectly taken advantage as well. Everyone is in on it, that is why Canadian debt levels are at nose bleed levels.

#169 Daisy Mae on 11.29.13 at 11:59 am

#22 TurnerNation: “Tiresome. Posters here are continually trying to find a chink in Garth’s armour.”

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

It’s all they’ve got.

#170 45north on 11.29.13 at 12:12 pm

SmallTownTokenBrown: Also, I don’t think there is anything xenophobic or racist about raising the question of how much foreign capital has a role in our housing market.

me neither

small town is Peterborough?

wallflower: Maybe the next ground zero will be China after all. Not real estate in Halifax. Not 60% youth unemployment in Spain… It’ll be China.

well for sure it would have the biggest impact. I mean if real estate in Halifax took a dive it wouldn’t be the first time. 60% youth unemployment in Spain – I don’t think it’s 60% more like 30%.

Isee: I liked your post. I don’t completely agree but I would say more face to face.

Frustrated Kiwi: One thing that seems clear is that foreign buying increases market risk – as they can withdraw the money more easily than residents.

that’s the main point, foreign money can move in or out very fast. Coming in it boosts housing prices but going out it would be devastating.

Jane 24: I have literally just returned home to England from a business trip to Hong Kong.

home to England? you must be very well travelled. thanks for your post

mark: I’ve certainly never heard O’Leary be this strident on Canada being in a bubble before.

good link

#171 Snowboid on 11.29.13 at 12:24 pm

#136 Oh how things never change… on 11.29.13 at 6:07 am…

Good post!

I’d take it a step further – some folks on this blog won’t be happy until the immigration rules are revised backwards to 1923 or 1885 (1897,1892,1900,1903).

Many of them have a warped sense of Canadas’ importance – they need to travel the world to see how insignificant we really are.

How easy it is to blame others for our own stupidity!

#172 Nemesis on 11.29.13 at 12:29 pm

@TorontoRocks/#143…

“I got a johnson the size of a plantain…”…

Have you checked your plantain for ‘freckles’ lately?

[ABC] – NT banana disease spreads further

…”The fungal disease Banana Freckle has spread to two more locations in the Northern Territory, according to the Department of Primary Industry.

Two new eradication zones have been declared around properties in Humpty Doo and Acacia Hills, south of Darwin.”…

http://www.abc.net.au/news/2013-11-13/banana-disease-spreads/5089100

[NoteToSelf: HumptyDoo? CrikeyBruce! Do they all have Plantain-Sized ‘bananas’ DownUnder? Bloody Aussies.]

#173 rosie "moving forward" in the knowledge that, "this won't end well" on 11.29.13 at 12:30 pm

Maybe this guy has something to do with the yellow peril fear marketing used for various nefarious ends. http://blogs.vancouversun.com/2013/11/24/in-hong-kong-vancouver-real-estate-is-big-news-for-the-same-reason/

Posted 14 times so far. Vancouver’s disenfranchised love it. — Garth

#174 onpar on 11.29.13 at 12:31 pm

Garth,
Would you recommend any cash holdings be moved into US dollars then?

#175 not 1st on 11.29.13 at 12:52 pm

I am not sure about foreign money buying RE, but I am sure that many Canadians of East Indian and Asian descent like big expensive homes.

Status and rank in society is a much bigger thing in those cultures than here in Canada and the only way to show it is to go overboard on a house and then show all your friends and relatives as they come through. Much more exciting than showing people some ETF holdings.

Superstition and luck/gambling/good fortune also factor into a lot of their decisions.

#176 Son of Ponzi on 11.29.13 at 12:54 pm

# 127
great post.
Exactly my experience, too.

#177 happity on 11.29.13 at 1:00 pm

Yup, debt is the name of the game. Throughout history it has conquered peoples and nations, but this was never taught in history class.

So how was N America built? Take New York city in 1925, it was the center of the world and was realized with out taxes and debt. The people didn’t have debt either.

So how really did debt come about today, taking advanced nations to 2nd and eventually 3rd world status?

Are the people really to blame, or are they too busy with second?

#178 Nemesis on 11.29.13 at 1:08 pm

@Nebbio/#73…

“Antidotal [sic] evidence like “I met a realtor in the elevator the other day”…”…

Generally speaking, “antidotal evidence” is something you ask your pharmacist* for after being trapped in an elevator with a Realtor™…

[*Some natural remedies sourced from 中医 [TCM] dispensaries have also proven effective at alleviating the symptoms of chronic REES (Realtor™ ElevatorEntrapment Syndrome).]

#179 bill on 11.29.13 at 1:12 pm

great Blog today Garth.
Xenophobes: instead of your constant bleating about your new neighbours why dont you get into a conversation with them ?
get their kids to translate if their English is not up to the incredibly high standards of your own grasp of the anglo/norman tongue.. [as if]
it will do you good.

#180 Incubus on 11.29.13 at 1:20 pm

“But some people are plain nuts.”

It is a fact of life, 15% of the population have an IQ less than 85.

IQ Range Classification
70-80 Borderline deficiency
50-69 Moron
20-49 Imbecile
below 20 Idiot

http://www.iqcomparisonsite.com/iqbasics.aspx

#181 Butch on 11.29.13 at 1:25 pm

Risk fee?

http://www.bloomberg.com/news/2013-11-29/canada-to-impose-risk-fee-on-canada-housing-agency-insurance.html

#182 rosie "moving forward" in the knowledge that, "this won't end well" on 11.29.13 at 1:38 pm

On Bitcoins:

http://images.wikia.com/onlyonetv/images/c/c2/Buttcoins.gif

But seriously:

http://www.economist.com/news/technology-quarterly/21590766-virtual-currency-it-mathematically-elegant-increasingly-popular-and-highly

#183 Fed-up on 11.29.13 at 1:40 pm

Wow pretty heated debate today. Here are my 2 cents on the subject.

The Chinese and, to a lesser extent, Russians, people of the Middle East, Eastern Europe ect, have taken advantage of the practically non-existent Canadian laws and restrictions on foreign investment in regards to its own real estate and in some cases dumping huge amounts of “questionably” earned money into Canada. This, at the very least, has impacted the prices in some high demand areas of our major cities. It is a problem and it may be far too late to address it as it has gone on for far too long.

Is it the only reason why we are so deeply screwed? No of course not. But it cannot just be discounted as an insignificant “non issue” when someone comes along from another nation that isn’t concerned of price/earning ratios and sets the norm for that neighborhood by seriously over-paying for real estate thus helping to create a feeding frenzy and assists a “buy now or buy never” mentality for the rest of the fish that live here.

BTW, I sold my home in October and the family has yet to move here from China (and quite possibly,may not). They made me an offer (represented by an agent who almost exclusively makes his living with foreign investors), that I could not refuse and made little sense, even in our market. I’m sure anyone shopping in my area will feel the impact of my sale. Jackpot for sellers, agony for buyers.

Did you just say you’re a hypocrite? — Garth

#184 spaceman on 11.29.13 at 1:45 pm

#4 Victoria Real Estate Update

“Stay on the side lines and rent”

Only if you are buying as and investment, I bought a home for my family (Victoria) 1 year ago. And estate sale fixer upper for 15% below market. My mortgage is $1750 a month, to rent this would be $2000, or more. And now, nobody tells me what to do. I am actually saving money.

Garth says our crash will be in the range of 15%, well we are already seeing that in Victoria, and what of Quesnel, Kamloops, Salmon Arm, they have been depressed for years.

Now, everyone is once again “timing the market” I say the deals are there, and they are now, yes the market will proabably correct some more, but not with interest rates this low. Hasn’t happened yet, its been 3 going on 4 years. Nothing has has any affect, and we are now due for a correction, (my crystal ball is a little cloudy today…. come back tommorow…) keep renting and waiting and hoping, but a house is just a place to live. Decide for your self if its right for you.

#185 brainsail on 11.29.13 at 2:02 pm

“Bitcoin worth $9M buried in garbage dump”

http://money.cnn.com/2013/11/29/news/bitcoin-haul-landfill/index.html

#186 Canadian Watchdog on 11.29.13 at 2:07 pm

Here's F's latest gimmick.

Canada to Impose ‘Risk Fee’ on Canada Housing Agency Insurance

The Canadian government will impose a “risk fee” starting Jan. 1 on mortgage insurance provided by the federal housing agency to compensate taxpayers for potential losses in the housing market.

Canada Mortgage & Housing Corp. said the fee to the government will be “3.25 percent of premiums written and 10 basis points on new portfolio insurance written,” according to a financial report released today for the three months ended Sept. 30.

What a farce. This is similar to what the government imposed on Genworth last year: whereas the government would charge a higher premium for taking on more risk, in exchange, the government will give back Genworth's collateral held in the Government Guarantee Fund. In other words, F returned Genworth's posted collateral to help pay a higher premium. Since legislation was passed in Q2 2012, Genworth's mortgage portfolio has increased from $294B to $309B.

In CMHC's case, they'll likely increase the premium and provide funding (since it has now declined) to help pay for it.

This will have absolutely zero effect on new mortgage insurance. Until there are laws, not guidelines, set forth regarding fraud, transparency and liabilities (like Dodd Frank), nothing will change. It's all political posturing to look prudent before the public.

#187 recharts on 11.29.13 at 2:08 pm

#168 Yo on 11.29.13 at 11:58 am
Great piece. I often shake my head (I am chinese canadian) about how people think the “foreigners” are jacking up prices. In the GTA, mainland chinese pretty much only buy in places like Markham, Richmond Hill and areas in North York generally. They do not pay $700K for a semi-house 15 foot dump in River dale or $1M for a small 3 bedroom in Leaside. They don’t like small or old houses. They don’t buy in $1M old victorians in parkdale where the local schools are not that good. Its just the way it is. The general market has been driven by just cheap financing, which the mainland chinese have also indirectly taken advantage as well. Everyone is in on it, that is why Canadian debt levels are at nose bleed levels.

FYI, Markham and Rich.Hill have the highest price increases in the last 6 months
The nuts who buy those ruins in downtown are speculators and young people who refuse to buy condos because they have no future and who want to live near DT.
The downton semis are mostly bought for the value of the land. If you plan to completely renovate after a while or immediately you might actually get a good return for that money. That segment used to be affordable 6 months ago in term of prices but not in terms of what you get for that money if you need to live in that place. It will soon reach the bottom price level for SFHs and it will probably top at around 800K. I am talking here about the c2-c3 and e2-e3 districts where the houses are run down but the land is worth the money because of its proximity to DT.

Anyway, going back to the topic, your guys are still driving the prices up here in To no matter where they buy. I guess that is the topic here.
As a matter of fact the central area of Toronto C9-14 is experiencing decreasing in prices. The sell in bigger numbers but discounted. This is still driving the avg price up and it is going to scare the shit out of F but the sellers are selling 15-20 percents under the price they wanted when they listed 6 months ago.
So in reality the areas where the prices are being driven up are the areas you just mentioned, c2-c3 and e2-e3
http://www.torontorealestateboard.com/buying/district_map/

That would be 50% of the contribution if we consider the 4 areas as being quasi equal.

And yes not 1st quoted below hit the nail, that is exactly what I wanted to say.
It is not as much foreign money (this should not increase our debt levels) as is the cultural perception of a house and what it means for that community

#175 not 1st on 11.29.13 at 12:52 pm
I am not sure about foreign money buying RE, but I am sure that many Canadians of East Indian and Asian descent like big expensive homes.

Status and rank in society is a much bigger thing in those cultures than here in Canada and the only way to show it is to go overboard on a house and then show all your friends and relatives as they come through. Much more exciting than showing people some ETF holdings.

Superstition and luck/gambling/good fortune also factor into a lot of their decisions.

#188 Fed-up on 11.29.13 at 2:13 pm

Did you just say you’re a hypocrite? — Garth
————————————————————————–

By getting out of what I believe is near the top of the market? No, that would make me a capitalist I guess. How long was I supposed to keep saying “no” to insane offers regardless of where they came from? I would not label you the same way for chosing to rent and not own in this current market.

Like I said, foreign buyers is just one of our problems. The other factors that are probably far more significant, are very well known to this blog thanks to your efforts.

#189 here we go again on 11.29.13 at 2:14 pm

How Wall Street Has Turned Housing Into a Dangerous Get-Rich-Quick Scheme—Again

http://www.motherjones.com/politics/2013/11/wall-street-buying-foreclosed-homes

#190 Ralph Cramdown on 11.29.13 at 2:27 pm

Did you just say you’re a hypocrite? — Garth

I don’t think so. Everybody does what they think is economically best for them, including foreign investors who want something safe from inflation and/or confiscation, builders/realtors/banks who build and sell as long as there’s perceived demand, young people who think that the market could run away from them leaving them lifetime renters, the guy who takes an offer he’d be a fool to turn down, and the Coal Harbour flower shop owner who figures he can’t lose.

We end up with years of building more houses than new household formation, too many people building stores of wealth and not enough building generators of wealth, and lobbying at all levels of government to keep the party going.

#191 recharts on 11.29.13 at 2:28 pm

So who can translate this in human language:

Canada Mortgage & Housing Corp. said the fee to the government will be “3.25 percent of premiums written and 10 basis points on new portfolio insurance written,” according to a financial report released today for the three months ended Sept. 30.

Does this mean that the banks will charge more for their mortgages and the charge will be passed on to the borrower?
From what I understand this will apply to uninsured mortgages

Portfolio insurance refers to coverage on mortgages with a down payment greater than 20 percent. Financial institutions often buy such insurance in bulk so they can repackage home loans as securities for investors.

#181 Butch on 11.29.13 at 1:25 pm
Risk fee?

http://www.bloomberg.com/news/2013-11-29/canada-to-impose-risk-fee-on-canada-housing-agency-insurance.html

#192 truthisnotappreciated on 11.29.13 at 2:35 pm

The ‘truth’ you refute and insist is non existent was posted on this blog days ago after having been printed finally in the Vancouver Sun. An investigative ( prize winning and internationally renowned) reporter from the South China Morning Post collected the many studies that have been done by a great many organizations….but you chose to delete every referance to the facts.

His poorly-researched and factless article has been linked here many times. You liked it because it reinforced your prejudice. As journalism, it was crap. — Garth

#193 stage1dave on 11.29.13 at 2:55 pm

Interesting…tho’ I must be missing some of those wackjob posts you alluded to…guess I should hang out here more consistently!

(Btw, I’d worry more about the Prius; those damned drones don’t seem to be able to hit anything other than “suspected militants”, the odd expatriate US citizen, & innocent bystanders)

Having lived & worked all over NA, I became convinced years ago that locals everywhere are always blaming changes they don’t like on someone else…& it’s usually someone who ain’t like them…different colour, different language, different customs, different whatever…it’s all their fault! Blaming ML Chinese for the runup of Canadian house values in particular is on par with the common American invective directed at Mexicans for stealing their jobs. BS!

I’m also not going to go on a bank-bashing binge here…I do have some work to perform today. As much as I’d like to blame the big 5 & their ancillaries for this mess, it’s still a PERSONAL CHOICE to borrow money. None of us are certain as to what tomorrow may bring (perhaps drone strikes & a Prius?) so it’s rational to be prudent…or perhaps a bit of fear over the unknown would induce some? Apparently not…if you wanna give stuff away, lots of people will show up & take it.

(I will say that a touch of market interference on the govt’s part might have mitigated this potential time bomb…like “directing” the flow of cheap money into resources/industries/ by way of tax incentives or W/O’s for investors…y’know, like making stuff/jobs/etc) That might have blunted some of the excess…& perhaps steered some of this cheap money in a more intelligent direction. Obviously, that wasn’t what the powers-that-be wanted accomplished, however.

Having lived thru a couple “recession ala’ depressions”, guess I’m prudent enuff (or scared enuff) to just not borrow a whole bunch…so’s the wife, so we get along pretty good. We’ll keep renting until the monthly can be looked after by a few days wages…we both refuse to work simply to make payments…on anything!

Now all I gotta do is figure out who to blame because I didn’t get enuff work done this month…that should tie up the rest of the day!

#194 is nouriel right? on 11.29.13 at 3:00 pm

Canada is on the list

http://www.businessinsider.com/nouriel-roubini-warns-of-housing-bubbles-2013-11

#195 Steven on 11.29.13 at 3:08 pm

Yes indeed if you have a low pay rate economy trying to support excessive government ,excessive real estate prices and excessive debt levels it is a sure bet that collapse is unavoidable. It is merely a question of when, not if. The most expensive part of the economy will fall the hardest as will the parts that have the biggest debt levels. I will tell you super debtors where you went wrong. When interest rates fell to insignificant levels you used it as an oppertunity to contract more debt instead of using it as a chance to pay down debt and then follow a pay as you go policy with out further borrowing.
Also with big ticket items low interest rates encouraged price inflation and extreme levels of mortgage debt.
Debt and prices that are way out of line in respect to single incomes earned by skilled and unskilled labor.
The result is a massive soon to be obvious debt crisis, unemployment and demographic problems. There is too little income support for the economy as people have come to know it. The dream world of the seniors , boomers and those sucked into that dream world is based on delusions of granduer, marxism and speculative excesses. It is the same lunatic thinking that introduced Bitcoin which is a currency consisting of encrypted ones and zeroes in a computer and then hyping the idea and currency untill its market price rivals the short side manipulated price of gold. Believe it or not there is talk of Bitcoin hitting $5,000. This is insanity. Expecting men who earn 15 to 25 thousand dollars a year to buy homes that cost $250,000 to $390,000 is also insanity. These prices are insane and should not be paid. They are at least 500% above the maximum price a working man can pay based on market wage rates. That is why things are coming to a stop. Living any where near a job and starting a family is a luxury working men can not afford….

Get set to kiss your greed and debt driven dream world good bye.

There is no crash coming. Period. — Garth

#196 waiting wanting on 11.29.13 at 3:11 pm

There was a good article in the WSJ a few years ago that mentioned the thousands of communist china party members wanted for fleeing their country with billions of $. I simply said they should com to BC and ON to look for them.

The problem in Canada now is that our political class think the same way as those wanted CCPMs, which is to make as much money from corp. kickbacks as fast as they can.

#197 happity on 11.29.13 at 3:14 pm

“A new tyranny is thus born, invisible and often virtual, which unilaterally and relentlessly imposes its own laws and rules… The thirst for power and possessions knows no limits. In this system, which tends to devour everything which stands in the way of increased profits, whatever is fragile, like the environment, is defenseless before the interests of a deified market, which becomes the only rule.” Jorge Mario Bergoglio, Francis

#198 :):(Ying Yang on 11.29.13 at 3:20 pm

Smoking Man have fun at Seneca tonight, play hard drink hard, smoke hard. Oh and listen to your Geezer Rock on the headphones. Just kidding man, I like some of the old stuff its OK. We are just getting into Montreal now. My brother needs to go to the hotel and do some patch-up coding for some else s screw-up back in Hong Kong. I can’t believe they texted him its like 2:30AM in morning over there. I guess they never sleep. You are correct he was going to hit the Baccarat table after dinner. Apparently they have some new style of Baccarat here, then hes going to do some big and small. Me, I’m going to drink some and relax, I had to drive out here today!
Oh yes I wanted to tell you he just got back from a Bit coin conference in Asia. HKMA still keep the HKD pegged to the USD and try to alleviate problems that creates. Unless they’re depegging anytime soon (and they’ll have bigger problems than that), they’re definitely not going to try to regulate any other currencies. Bit coins can not be controlled by the USA and he says this will definitely undermine the value of the USD if HKMA and other countries embrace its use. He said get ready to start dumping USD in the near future.

#199 Time bandit on 11.29.13 at 3:24 pm

Good start.

The government’s ‘risk fee’ on mortgage insurance provided by the federal housing agency aims to compensate taxpayers for potential losses in the housing market

http://xn--thecanadiangovernmentwillimposeariskfeestartingjan-e605ayb.1onmortgageinsuranceprovidedbythefederalhousingagencytocompens/

#200 Montellano on 11.29.13 at 3:34 pm

There is a 2 bed bungalow selling for $950K in Lakeshore & Kipling area of Toronto.. MLS: W2790214

At first I thought it was a typo but these goofs are apparently for real (!?).. the listing says its an up and coming area.. I have lived here for 10 years and its a piece of crap area.. thats what it is.. so No, Spaceman, the house is not just a place to live.. not in this crazy market. How can anyone make a decision if a house is right for them when even Ritchie Rich wouldnt throw away a million dollars to sit on a porch and watch the GO train zoom by every 30 minutes… unless he was hanging around Rob Ford the night before..

Oh, yes, your down the street neighbour is a home depot distribution center.. guess how long it will take that forklift operator to pile a million bucks in forced savings (aka a mortgage).. so the right choice for him is to live in Hamilton or Grimsby and commute instead of being able to afford a 2 bedroom dump in an “up & coming” neighbourhood which doesn’t even have a starbucks (although one is clearly misrepresented in Ads for minto town-condos which are coming 2014 – BUY NOW the ad says… we are almost out of fools!)

The problem, my dear fools (sorry Garth not sure if I am allowed to use the term), is that we have no appreciation for the effort it actually takes to earn that 1 dollar in crisp physical cash.

The way I see it – we are reaching a point of lethargic generational oblivion to our collective financial responsibility.

Your parents left you some money or maybe even a house. Its worth half a mil now (based on averages) so if you want to upgrade to a bigger place that costs cool $900K than yes its super easy.. get a $400K mortgage that’s cheaper than any condo rent and kick back, relax and enjoy the lullaby knowing that you outsmarted us all.. But as you drive around that in that forklift ask yourself this – what are you going to leave to your kids??

To Garth’s point its not the Chinese or Martians.
It’s the idiots from Toronto and Vancouver…

#201 shanks on 11.29.13 at 3:37 pm

hey Nosty, SM et al who care
found this on the front page of RT
http://rt.com/usa/dhs-canada-depression-richardson-495/
had to do a bit of digging but found it on cbc too (burried in the local toronto news)
http://www.cbc.ca/news/canada/toronto/canadian-woman-refused-u-s-entry-because-of-depression-1.2444960

just how deep does the rabbit hole go? all the way to the bottom! see the red glow? dont worry about the greenish hue, thats just cores 1 2 and 3.

seems like this kind of thing (sharing of private medical records) should be front page here in kaniduh, seeing as it affects almost all of us directly or indirectly (1 in 5 affected)… for all those who want to say what the hell does this have to do with real estate, it is just another example of all that our beloved and publicly funded media doesnt tell us.

#202 Seeing it from both sides on 11.29.13 at 3:59 pm

#52 Gogo
Why on Earth would a Chinese guy come and pay one million for a house in Van and not go and buy an island in Greece for the same amount. Tell me why?
————-
Because we need our roast pork (char siu) and a chinatown; we do not like remote, far-flung, uninhabited places. And we like new and/or big homes. New is very important to us.

#203 Nemesis on 11.29.13 at 3:59 pm

Trapped in an elevator with a Realtor? Then just feign dysphonia and crack on with Today’sZenForSaltyDogz…

FirstUp, cue Beavis&Butthead snickering at British PM Cameron’s ExhortatoryEntreaties to President Xi Jinping: “Bigger! Stronger! Deeper!”…

[ChinaDaily] – UK wants no limit to relations

…”There should be no limit to the cooperation that China and Britain are looking to, British Prime Minister David Cameron told China Daily on Thursday.

Cameron, who will begin a three-day visit to China on Dec 2, said in a face-to-face interview that he sees this visit as the start of a bigger, stronger and deeper relationship between the two nations…

…Cameron also noted that Chinese people in Britain make an immense contribution to the society. “If you look at all the figures, the Chinese community in Britain has one of the lowest unemployment rates, the lowest crime rates and one of the highest rates of educational attainment. They make a major contribution to our country and are extraordinarily welcome,” he said.”…

http://usa.chinadaily.com.cn/world/2013-11/30/content_17141920.htm

Well! If he’s really serious about all that, then PM Cameron would be well advised to match President Xi Jinping Baijiu for Baijiu once the StateBanqueting gets started in earnest, as:

[UK Independent] – Couples that drink together, stay together

…“Our results indicate that it is the difference between the couple’s drinking habits, rather than the drinking itself, that leads to marital dissatisfaction, separation and divorce,” said Kenneth Leonard, PhD, RIA director and lead author of the study.”…

http://www.independent.co.uk/news/science/couples-that-drink-together-stay-together-8970424.html

Fortunately for PM Cameron, when the BeijingBanqueting has concluded he can look forward to returning to his SpiffyRather! PublicHousing… unlike the EastEnders BarrowBoys who’ve apparently fallen on HardTimes:

[NewStatesman] – How much would Del Boy’s flat be worth these days?: If art imitated life more faithfully, no one in Eastenders could afford to live in Albert Square.

…”Perhaps nothing highlights quite how ridiculous the market’s got, though, as Eastenders. The exact location of the fictitious Walford is kept deliberately vague, but on the tube map it’s somewhere near Bow, where you won’t find a three-bed Victorian house for less than £700,000. Albert Square itself is based on Fassett Square, a couple of miles west in Dalston, where you’re talking closer to £1 million. Think about that. The houses on show in the ultimate exercise in televised miserablism are conceivably worth a million pounds.”…

http://www.newstatesman.com/jonn-elledge/2013/11/how-much-would-del-boys-flat-be-worth-these-days

#204 Ralph Cramdown on 11.29.13 at 4:05 pm

Funnies:

I was reading a summary of a mortgage broker’s convention. What’s new?

“Bridgewater Bank: Has now changed its focus from prime lending to alternative lending. […] DUCA [an Ontario credit union] has a whole new lending matrix (with strong pricing for 580-609 beacons with TDS up to 49%).”

Hmm, sounds junky. But who is Bridgewater Bank? Oh, they’re a Canadian Schedule 1 bank wholly owned by the Alberta Motor Association, a ‘nonprofit.’ Maybe their tow truck drivers will do home repos, too? This is getting weird.

#205 Seeing it from both sides on 11.29.13 at 4:20 pm

This is the real reason why Vancouver real estate is so resilient :) We are a resourceful bunch.

http://www.theglobeandmail.com/life/home-and-garden/real-estate/in-high-cost-vancouver-the-trick-is-getting-strangers-to-pay-the-rent/article15676047/

#206 enthalpy on 11.29.13 at 4:36 pm

Im totally with Garth on all this. But what will happen to your blog when this plays out? What will we all do?

#207 aprilNewwest on 11.29.13 at 4:45 pm

#184 spaceman. According to OECD the Canadian housing market is “overvalued by 60%”.

#208 T.O. Bubble Boy on 11.29.13 at 5:06 pm

Funny that CMHC would call something a “Risk Fee” if the assets aren’t risky:

http://online.wsj.com/article/BT-CO-20131129-707716.html?dsk=y

Why not call it a “service fee” or something?

#209 Westernman on 11.29.13 at 5:09 pm

Regina Speculator,
The reason Regina and Sask. in general is rarely mentioned is because no one cares and nothing the city and/or the province does or does not do matters…
That includes your bush league football team…
Hope that clears that up for you – now be a good Canadian and get out there and buy that half million dollar 1940’s bungalow in Regina – hahahahaha

#210 Police officers only smoke Medical Marijuana on 11.29.13 at 5:10 pm

@#202 shanks on 11.29.13 at 3:37 pm

“just another example of all that our beloved and publicly funded media doesnt tell us”

Yep, CBC is the wartime ministry of propaganda, but RT is garbage too. If you see it on TV, that means its safe, and usually far from the truth. We don’t have a ‘media’.
Sandy Hook?
“we cant go back.. we don’t have a teacher”

#211 Victor V on 11.29.13 at 5:32 pm

Speculation of rate cut snuffed out as economy shows new spark http://natpo.st/18NXnag

#212 Ralph Cramdown on 11.29.13 at 5:41 pm

#191 recharts — “So who can translate this in human language:

Canada Mortgage & Housing Corp. said the fee to the government will be “3.25 percent of premiums written […]

Easy. Jim Flaherty needs to ‘almost’ balance the budget by the next election, by any means necessary. Sell off real estate in Grosvenor Square. Or exact tribute from a wholly owned subsidiary of the government of Canada… kinda like tacking a dollar from the left pocket and putting it in the right pocket, and saying you’re a dollar richer.

#213 Shawn on 11.29.13 at 5:43 pm

INFLATION WHAT INFLATION?

Have those who bleat about high inflation tried shopping at Costco?

Bargains galore there.

A stand-out example: A 17 cubic foot standard white refrigerator by Frigidaire. $419. With tax (just 5% in Alberta) that’s $440.

So you can earn a Fridge by working 44 hours at $10 per hour. Or 22 hours at $20 per hour. Or 11 hours at $40 per hour. Or in less than a day at $80 per hour. (Not so uncommon in Alberta.).

That excludes income tax, but the point is most people could earn that Fridge even after income tax and EI and CPP in less than a week’s work.

A Refrigerator is a marvel of technology that has only been around for about 100 years and was relatively uncommon prior to WW II.

In 1952, a Coldspot Refrigerator was $329

http://www.thepeoplehistory.com/50selectrical.html

Wages then were in the $1.00 per hour range for many. (Less for some).

So, in 1952 it took 330 hours to earn a Fridge. That’s about 8 weeks.

That is MASSIVE deflation in that product.

Real inflation is measured as the increase in the hours of work needed to buy things.

#214 rosie "moving forward" in the knowledge that, "this won't end well" on 11.29.13 at 5:45 pm

#207 enthalpy

If the bloggers here are anything like the bloggers on the Housing bubble blog we will do the following:

Gloat, I told you so we become an auto response.
Blame everyone and every institution.
Provide tons of evidence of corruption.
Speculate on a bottom.
Lot’s of anecdotal info about family and co-workers losing everything.
Try to outguess the PTB on remediations.
Criticize said remediations as too little or too much.
Deny a rebound is starting. (many years down the road)
Brag about being a renter.
Brag about low ball vulture type deals.
Brag about cheap used big boy toys, pickups, boats, R.V.’s etc.
Wring hands over the fall of the Canadian way of life.
Speculate on the next government, fed or provincial.
Many observations concerning low retail traffic.
A marked pick up on xenophobic, racist comments.
Frantic pleas to buy gold, bit coins, silver etc. Frantic pleas to sell the above.
Drift off topic.

That should keep this blogosphere orbiting to infinity and beyond.

#215 Ralph Cramdown on 11.29.13 at 5:50 pm

#195 Steven — “When interest rates fell to insignificant levels you used it as an oppertunity to contract more debt instead of using it as a chance to pay down debt […]”

Uh, yeah.

The central bank lowers rates when it wants people to borrow more and save less, and vice versa. That’s the whole point, and basic economics. People rent or buy more of anything (except Veblen goods) when its cheaper, and less when expensive. Money should be different?

#216 condopoor on 11.29.13 at 5:56 pm

I hate to see so many of you horribly uninformed. I posted once about this already, but walking around Vancouver you certainly do see a lot of Asians. For some reason, many people don’t know basic Canadian history, including the fact that many of these families have been here for generations. We forced them to work, make massive sacrifices for our country, amongst many other inhumane atrocities. I learned that in Grade 6 – why didn’t you? Stereotyping is an ignorant mindset that embarrasses the rest of us.

#217 Ralph Cramdown on 11.29.13 at 6:04 pm

#214 Shawn

The fridge example is good, but not as funny as some:

https://mises.org/store/Product.aspx?ProductId=262

Courtesy of the Mises Institute, bastion of Austrian economics, a book entitled “What Has the Government Done to Our Money?” Originally $10, now $5.

Oh inflation, where is thy sting?

#218 Alberta Ed on 11.29.13 at 6:18 pm

Wow, over 500 pages of verbal abuse from xenophobes and whackjobs in a mere three years. Pretty impressive; I never did nearly that well as an editor and columnist. Please include some of the more ingenious comments in an appendix in your next book.

#219 James on 11.29.13 at 6:46 pm

It’s all good guys. Nothing to be scared about Canadian or HAM-wanna-be-canadians

“The average equity in the homeowner loan portfolio was steady at 45 per cent.”

http://m.theglobeandmail.com/report-on-business/canada-mortgage-insurer-sees-less-risk-despite-bubble-fears/article15680080/?service=mobile&cmpid=rss1&click=dlvr.it

#220 rosie "moving forward" in the knowledge that, "this won't end well" on 11.29.13 at 6:47 pm

Consider yourselves warned. http://www.theguardian.com/business/2013/nov/29/mark-carney-bank-of-england-home-buyer-warning

#221 Son of Ponzi on 11.29.13 at 6:57 pm

Is Refrigerator a line item in the CPI.
Or is it grouped with “machines that keep beer cool”?

#222 Cici on 11.29.13 at 7:05 pm

#114 Shawn

The only problem here Shawn (and all others celebrating the low prices of appliances) is this: Today’s appliances (and clothes and other poorly-manufactured goods, including mattresses and on and on and on) are not built to last.

Fridges from the 70s are still functioning in the kitchens of those who have held on to them. In the worst-case scenario, repairs are cheap. Old washing machines and stoves were also built to last. So that fridge that only costs $400 may seem like a great deal, but don’t forget that it is built to break down soon after the 1-year limited warranty expires.

The same applies to everything else mentioned, including clothing like shoes and sweaters. I’m lucky to get a year out of expensive leather shoes, whereas the shoes of the past would give me at least 7 years of good wear. Not to mention sweaters and pants and socks and underwear, which fall apart within months of purchase.

We are suckered in majorly and spend way more on cheap purchases that lead to repurchases and more purchases and repurchases. Everything is pretty much disposable these days.

#223 James on 11.29.13 at 7:06 pm

The consensus for rates to normalize seems to be in the very very distant future. Ie 6-7%

http://ca.news.yahoo.com/analysis-surfing-central-banks-benign-qe-trap-065454895–sector.html?.tsrc=yahoo

#224 M I K E on 11.29.13 at 8:19 pm

Garth

Are you talking short term or long term for Oil?

Warren Buffett just invested in Suncor & Exxon Mobil.
What’s your thoughts on his move and outlook?

#225 Nemesis on 11.29.13 at 8:35 pm

@Rosie/#215…

You omitted Ribaldry…

Speaking of which, it’s HighTime our MaganimousHost obliged with another LizHurley LeaderIllustration…

Even Ralph would agree that her ‘appliances’ have thus far resisted deflationary tendencies.

In other news The70’sAreCalling… perhaps PM Cameron could coax DeborahHarry to join his entourage… I’m quite certain that President Xi would approve… ParallelLinesAnyone?

http://youtu.be/Jxpe1oSp_sg

#226 Nemesis on 11.29.13 at 8:38 pm

BonusZen:

http://youtu.be/w6pg18bJt-A

#227 Shawn on 11.29.13 at 8:46 pm

WHO YOU GONNA ASK?

Warren Buffett just invested in Suncor & Exxon Mobil.

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

What more do you need to know?

You need Garth (or anyone else) to opine on Buffett’s moves?

In his February 2012 letter Warren Buffett wrote that for all the Gold in the world (then worth $9.6 trillion and equivalent to a cube 68 feet per side) you could purchase ALL the farmland in the U.S (400 million acres) and 16 Exxon Mobiles and have a trillion dollars left for walking around money left over.

He thought it was obvious that the 16 Exxon Mobils with farmland and a trillion cash was the better investment compared to shiny metal that throws off no dividend.

Warren usually gives no hints what he will buy, in this case a hint was given a year in advance.

#228 bob Rice on 11.29.13 at 9:02 pm

Cdn economy recovering and doing quiet well…

http://business.financialpost.com/2013/11/29/canadas-economy-beats-forecasts-with-fastest-growth-in-2-years/

#229 Son of Ponzi on 11.29.13 at 9:02 pm

Unless you have the kind of dough that Warren B. has, don’t follow his advise.
He’s a market maker, everyone else is just a taker.

#230 Daisy Mae on 11.29.13 at 9:19 pm

#76 recharts: “One more thing, since we talk about numbers: are the RE agents all hit by the mad cow’s disease? Why are they using tons of 8888888 in the asking price for any property? I am sure that number 8 is an Icelandic lucky number isn’t it…”

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

It is silly, isn’t it? The Chinese, apparently, believe ‘8’ is a lucky number — the reason escapes me. They are attracted to house numbers with ‘8’s’ (example: 5838 Smith Avenue).

Adding ‘8’s’ to the asking price is ridiculous — it’s just a damnned asking price.

#231 truthisnotappreciated on 11.29.13 at 9:25 pm

RE 192

“His poorly-researched and factless article has been linked here many times. You liked it because it reinforced your prejudice. As journalism, it was crap. — Garth”

G….the reporter sited a variety of studies from a variety of organizations….objectively reporting all the information available….thats what reporters do. By calling the guy a crank is to call every reporter who disagrees with you a hack……thats a little paranoid don’t u think? Is every major study sited bad because it doesn’t agree with your POV? What would be behind all those organizations that would make them lie about such a simple and easily understandable feature?

G…even the Chonese government has complained about the outflow of illegal money from China to Canada……Dude even King Canute couldn’t dispute the facts as you seem to think you can do by your continual denials.

Where did I call him a crank? Just a useless piece devoid of facts. — Garth

#232 Daisy Mae on 11.29.13 at 9:33 pm

#105 Angry Man 123: “Our country’s culture is worth preserving…”

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

This is a touchy subject. But I agree. “When in Rome…”

#233 Bill Gable on 11.29.13 at 9:37 pm

This just blew my mind:

Canada’s housing agency said on Friday it has set aside less money to cover bad mortgages as the economy improves, even though concerns about a housing bubble persist.
The Canada Mortgage and Housing Corp (CMHC) said provisions for claims dropped by C$19 million to C$895 million during the third quarter and were down C$101 million for the first nine months of the year as expectations for bad loans fell.
“We have seen improvement in the economic indicators that underlie all of that, so for example, unemployment has improved and home price inflation, which obviously influences the severity of claims, has improved as well,” Brian Naish, CMHC’s chief financial officer, said on a conference call.

Link: http://tinyurl.com/mbfnmda

#234 Shawn on 11.29.13 at 9:38 pm

Say What?

Unless you have the kind of dough that Warren B. has, don’t follow his advise.

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

That leaves Carlos Slim and Bill Gates and (if they act together) the Sam Walton heirs…

In the game of investing I feel SO GOOD when I look at my competition (and I am not talking about Warren here).

#235 Daisy Mae on 11.29.13 at 9:40 pm

#107 Wanting: “I was in a spitting match with Richmond council a few years ago about the complete lack of proper english signage in their ‘asian’ malls that are setup for the investment class imigrants from mainland china (it used to be for hong kong folks before that) anyway, the mayor and councillors saw no issue with it even though a petition was brought forward. They simply told us not to bother shopping there.”

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

Our two official languages in Canada are English and French. We’re entitled to English in Richmond.

#236 Daisy Mae on 11.29.13 at 9:49 pm

#120 Vancouver Dude: “All i know is that if you drive by any west side Vancouver school at recess time, 90% of the kids are asian, come 3 PM the Range Rovers, Mercs, Beamers etc are lined up for blocks waiting to pick up the kids, Garth you don’t live here to see whos buying Vancouver the majority are foreigners…”

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

Metrotown in Burnaby? Majority are Asians. I was born/raised in Vancouver. There were few Asians then. These people are immigrants.

#237 aprilNewwest on 11.29.13 at 9:51 pm

#232 – truthisnotappreciated. Yes “…that’s what reporters do”… to often report without checking out their stories.

#238 Daisy Mae on 11.29.13 at 9:59 pm

#152 Ying Yang: “So in a nutshell this culture is worth preserving and I believe it should be mandatory with new immigrants that they learn about it before even setting foot in our soil. We love it here!”

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

Bravo.

#239 Dean on 11.29.13 at 10:56 pm

I am a Chinese immigrant, I am also the victim of this ridiculous housing price!

This is my story: I immigrated to Canada from Mainland China in 2001 , I landed a very good pay IT job after initial 2 years struggling, because of my prudence, I missed this cycle of real estate boom. By the time I decided to buy, the house price is already too expensive.

Instead of complaining foreign hot money, this is what I did. I sold my Toronto condo and moved to Florida on TN working visa.

The house here is 40% off compare to the peak price, and auto insurance is less $100 dollar a month.

Thank you Garth for speaking up! I will buy you a drink if you come to my town.

#240 BCD on 11.29.13 at 11:51 pm

@215

If the bloggers here are anything like the bloggers on the Housing bubble blog we will do the following:

Gloat, I told you so we become an auto response.
Blame everyone and every institution.
Provide tons of evidence of corruption.
Speculate on a bottom.
Lot’s of anecdotal info about family and co-workers losing everything.
Try to outguess the PTB on remediations.
Criticize said remediations as too little or too much.
Deny a rebound is starting. (many years down the road)
Brag about being a renter.
Brag about low ball vulture type deals.

Blah. . .blah. . .blah. . .etc.

_________________

Sounds like you have dreamed long and hard about the orgy of pain and misery that a bubble burst would cause. Your description reads like a schizophrenic delusion of grandeur. . .revelling in things that will never be. . .you must be one of those poor ladies with a dozen cats, sleeping in a crappy rental suite agonizing over why your friend Suzie married the football star and bought a home with a white picket fence. She has a great career and wonderful paid for silicone implants and you are destined to a life of KD dinners and cat pee smells. Sucks to be you.

#241 mac on 11.30.13 at 1:28 pm

Garth,

Can you get on and finally call Diane Francis a racist? Because she said as much about hot money coming into Canada as any commenter has said here. Your Achilles heel is your stubbornness.

I have little professional respect for Ms. Francis. — Garth

#242 Entrepreneur on 11.30.13 at 8:52 pm

#223 Cici “everything is disposable these days”

Even cars. They don’t last that long. Pay a high price for them but they fall apart in a short period. Never understood that computer on them; when it goes the car shuts down. Dumb & frustrating. The guys don’t like this nonsense and find it a annoying. These mechanic, old guys
like a vehicle that a person can work on them without taking it in to a shop.

Read on the internet that Jamie Baille of the Conservatives is speaking of a tax-free zone for small business in Nova Scotia. Everyone and everywhere should get on this. Music to my ears.

Maybe we will finally get some good quality products come back like when I was young.

#127 Jane 24 Did I read that right “family work tax-free in China”? If so, how lucky. Canadians are taxed to death.