Adios, property ladder

BREEDS modified

When a 53-year-old guy walking by, minding his own business, was speared by a falling shard of glass, well, you’d think enough was enough. After all, it was the fifth time in two years that sort of thing had happened with the same, soaring 65-storey building. But it took a pane of patio door glass exploding and falling on to morning commuter traffic three weeks ago for officials to react.

So now the City of Toronto has ordered protective scaffolding erected around the base of the condo-hotel edifice known as Shangri-La, so pedestrians are spared a hideous death. Meanwhile the building’s developer has been told to wrap all those tempered-glass balconies in protective netting, while condo owners have been banned from stepping out onto their own terraces.

Welcome to Misery Week, part 4.

And imagine how miserable you’d be had you just purchased unit 2105, a two-bed, two-bath condo listed for $1 million, or $925 per foot, with monthly strata fees of $635 and annual taxes just shy of $4,000. Suddenly your balcony would feel like the wrong side of a lobster trap. Not exactly the elegance you expected from a building names after a mythical Himalayan utopia full of happy, geriatric nymphs.

The Shangri-La killer balcony issue is a nice reminder of the misery that probably lies in the future of tens of thousands of people who have lately moved into soaring glass towers in Toronto, Calgary, Vancouver, Edmonton and Montreal. This could also be a pivotal factor in the troubled future of residential real estate, even if mortgage rates never increased or Boomers failed to ossify and bail out of their homes.

Here’s why.

Virtually all new condo towers thrown up in the past decade have used the window wall system of construction to separate the inside (where you live) from the outside. It’s cheap (as opposed to a masonry exterior), easy to install and quick. The downsides, however, are immense. Walls made out of windows suck at energy efficiency. They’re less durable and the seals always become permeable. Moisture inevitably finds its way in or around. Compared to punched windows (where openings in a brick or block wall are made), these exteriors are flimsy and over time prone to air and water leakage.

And this could be the silent killer of the housing market. No, not just condos. All housing.

Kesik  I know this because of Ted Kesik. He’s a professor of building science at the John H. Daniels Faculty of Architecture at the University of Toronto. Developers hate him. Condo salesguys would happily drive their Panameras and A7s over his toes. And all those horny little hipsters gobbling 500-square-foot units with great views of the next building from their floor-to-ceiling windows should first devour his work.

This week I was in touch with the prof.

“Most of these buildings are going to have serious problems in the next ten years,” he says. “First owners will get special assessments for $15,000 or $25,000 delivered to them, which they have to pay by law, to fix these air and water problems. But that’s only a bandaid solution for five or ten years. Then it all comes back.”

Eventually, says Kesik, all these glass condo buildings will have to be reskinned, which not only costs w-a-y more than the recaulking and sealing process, but requires they have to be evacuated. Even if done on a floor-by-floor basis, condo owners will have to move themselves and their stuff out for at least a month.

And this is the easy part. Worse is the financial hit.

“The best case scenario for these owners is that they would, over time, maybe get their money back,” the professor says. “But more likely, values will spiral lower since nobody wants to buy leaky units. So when people can’t sell, they’ll start to rent them out, and that’s when the spiral really begins. I tell my students these are the places their grandkids will be going to buy crack.”

And what will the impact be on society? How could something as ubiquitous as glass walls come to impact everybody?

“We’ve taken the prime portions of our cities and filled them with this typology, which will certainly lead us into this kind of spiral. This is where things start to get really ugly. I keep trying to tell people this, but the way euphoria works, they forget that somewhere in the future there’s a reef.”

And, of course, it’s not just about condos, but rather the property ladder.

“My Baby Boomer colleagues with houses think this doesn’t affect them,” Kesik told me. “But the simple fact is these young people in condos won’t be able to move up, because there’ll be no appreciation in their units as values fall. So, you know what I tell my friends? I tell them, if you’re ever gonna sell, then sell now. There won’t be a generation coming along to buy them out, and prices will collapse. In fact, this is something that is going to seriously affect two generations.”

Did I mention this was Misery Week?

Professor Kesik has written something to give your horny children. Seriously. Here it is.

And from now on, if you walk downtown, wear a hat.

213 comments ↓

#1 FK on 08.14.14 at 6:19 pm

Thanks again for another great article!

#2 totalinvestor.com on 08.14.14 at 6:26 pm

“..had you just purchased unit 2105, a two-bed, two-bath condo listed for $1 million, or $925 per foot, with monthly strata fees of $635 and annual taxes just shy of $4,000.”

Don’t they know that houses are less expensive on a per sq/ft basis? Plus you get the land.
Boxes in the sky are for suckers.

http://postimg.org/image/4odcmamqd/

#3 Mean Gene on 08.14.14 at 6:26 pm

Wear a hardhat and kevlar!!

#4 ILoveCharts on 08.14.14 at 6:26 pm

Proper coverage of this subject should include mention of the fact that the leaky condo crisis in Vancouver is not over. The high rises will be the next wave. Window wall will be the third.

#5 view on 08.14.14 at 6:27 pm

No tin foil hats please!!

#6 crowdedelevatorfartz on 08.14.14 at 6:31 pm

Living in a glass beehive………
Dont get stung.

#7 Randy on 08.14.14 at 6:32 pm

Great….I have crack in my Condo….

#8 -=jwk=- on 08.14.14 at 6:38 pm

Finally! someone , besides me, who gets it. Move up buyers use the gain from their condos to buy houses. Where else did you think it came from, the tooth fairy? If condos go down, so do houses. There are no separate condo and house markets!

Problem is, condos aren’t going down. $1000/sf will seem like a bargain in 5 years.

#9 Derek R on 08.14.14 at 6:38 pm

Here, once again, is a link to help anybody who isn’t sure who [email protected] is, or whether they should worry because they don’t have any lawn ornaments.

The GarthFAQ

#10 milennial1982 on 08.14.14 at 6:40 pm

First…now where’s my special badge??

#11 Count Flipalot on 08.14.14 at 6:42 pm

Always knew that most city condo neighborhoods were going to be the slums of the future, only a matter of time and decay. This is especially true for Raincouver.

#12 Don Derc on 08.14.14 at 6:45 pm

Wow…when I read “re-skinned” I thought of Vcr 1995 and the leaky condo crisis (nice name huh?). Generation Z inherits this mess too. How about a mobile home on an acre – complete with water well and wood to cut and burn? Either that or a cheap condo in Puerto Vallarta.

#13 Spock on 08.14.14 at 6:45 pm

Amazing that the regulators are not thinking long term on this.

Misery .. and paying for it in advance :-(

#14 Happy Renting on 08.14.14 at 6:46 pm

At least one MSM outlet (The Star? I forget) has quoted Professor Kesik and his predictions (I remember his crack line). When you look at how widespread the use of those glass walls is, I feel like we’re peering into a dystopian future (the post-condo apocalypse?) The concept of condo ownership never highlights the magnitude and likelihood of a special assessment. They happen, though, and if you’re already paycheque to paycheque to cover the cost of your glass shoebox, where will you get that extra money?

#15 LH on 08.14.14 at 6:46 pm

Houses of brick over houses of glass any day!

#16 Happy Renting on 08.14.14 at 6:46 pm

Oh, and all the dogs in that pic are cute, but the wrinkly, drooling beast on the far right is a total heart-stealer.

#17 mark on 08.14.14 at 6:50 pm

How long before Re/Max starts using this as a justification for rising detatched home values?

You know it will happen.

#18 Rainmaker on 08.14.14 at 6:52 pm

Garth,

Excellent article and another opportunity for Ted Kesik and yourself to inform others of the risks associated with condo ownership. I was not aware of the new paper Ted had written – looks like another must read for those considering condo ownership. Sadly though most will not even bother.

#19 Mocha on 08.14.14 at 7:01 pm

Did the man who was struck by the falling glass die?

#20 Cow Man on 08.14.14 at 7:02 pm

Sir garth:
If you want to know why Toronto lacks infrastructure, just look at the taxes paid on a $1 million condo. Now the MPAC assessment might be less than the list price. Just the same .4% tax on property is less than half as much of the rest of the Province. Many areas even within the GTA are paying 1%. How be Toronto pay its fair share of property taxes and carry the weight of the infrastructure it needs instead of saddling the rest of the Province to carry the cost?

#21 Lastline on 08.14.14 at 7:03 pm

“I tell my students these are the places their grandkids will be going to buy crack.”

And what did the A-hole realtor scumbag say about living in a rental apt. buildings with drug dealers living next door?

Haha, full circle coming your way. Bring your hard hats. It’ll be raining suckers.

#22 Dean on 08.14.14 at 7:04 pm

This has been every bit as entertaining as shark week.

#23 Dr. Subprime CHMC on 08.14.14 at 7:06 pm

One thing I don’t agree with the good proffessor about is the grandkids buying crack there. I’m sure that mankind being mankind will have developed a much more incidious and evil drug than crack by then.

People who paid that much for those places have more money than brains. They probably aren’t miserable because they can afford a steady supply of powder rather than the cheap crack or doctor prescribed happy pills.

#24 Ray Skunk on 08.14.14 at 7:09 pm

I’ve said it before, and I’ll say it again…

In twenty years Liberty Village will be the new St. Jamestown.

CityPlace may only just be saved from a reverse gentrification into the new Jane & Finch by virtue of the fact it’s next to prime tourist attractions.

#25 Dr. Subprime CHMC on 08.14.14 at 7:12 pm

One of the nainstream Toronto papers had an article about this a couple of years ago where they interviewed the proffessor and he said all of the same things right down to these condos would be the slums of the future where grandkids would by crack. I guess few took heed. Just thought I’d mention that seeing the msm does so little good reporting like that.

#26 Retired Boomer - WI on 08.14.14 at 7:14 pm

Wow! Buy a Condo get a 2 fer

1. No real expectation of appreciation!

2. Guaranteed, pricey repairs!!

Yes, only no money down here at “Miracles Happen” estates, and should you really ever make money on one of these then, say it with me now, “Miracles Happen”

film at 11…

#27 bill on 08.14.14 at 7:15 pm

those poor people.reckon there will be a law suit or two in the offing.

#28 LH on 08.14.14 at 7:15 pm

But seriously folks, the sky is not falling.
Bond yields trending down. SP500 trending up.
Downtown Toronto SFHs (M5T, M5R) trending up.
A lot of smart people have tried to fade these moves at their peril. Methinks we’re not even in the 5th inning of this bull market yet.

#29 ILoveCharts on 08.14.14 at 7:21 pm

For the Vancouver folks:
Leaky Condos are Back!
http://globalnews.ca/video/1207647/leaky-condos-are-back/

#30 Enthalpy on 08.14.14 at 7:29 pm

working in engineering consulting…the topic of these future ghettos in the sky come up frequently in our offices for years now.
The construction is all kinds of bad news. Stay far away unless you are only there for short term….when new.

#31 Smudgekin on 08.14.14 at 7:33 pm

Woefull walls:

Will it drive up prices for 70’s concrete like Manulife Centre?

#32 TEMPORARY® Foreign Prime Minister on 08.14.14 at 7:35 pm

“…….I tell my students these are the places their grandkids will be going to buy crack……”
=========================

….would you like bobbleheads with your crack?

#33 Arch-e-tec on 08.14.14 at 7:36 pm

Personally, I think this will add some character to Vancouver and Toronto

http://www.theatlantic.com/infocus/2014/04/squatters-in-venezuelas-45-story-tower-of-david/100721/

#34 Sean on 08.14.14 at 7:37 pm

Wow! Really enjoying misery week, Garth.

On the basis of price alone, the market is ridiculous, and destined to collapse. When you add in these additional elements of misery… it is just beyond comprehension what people are doing to themselves.

#35 eddy on 08.14.14 at 7:37 pm

Everything Ted says about condos construction, and inevitable special assessments is 100% true.
Impact on freehold values? I disagree. The demand for freehold will be higher as people see the obvious benefits of land ownership, and they will pay a premium.

#36 Victoria Real Estate Update on 08.14.14 at 7:37 pm

Single Family Home Sales Totals
. . . .(January through July). . . .
. . . . . .Greater Victoria. . . . . . .
. . . . . . . . . . . . . . . . . . . . . . . .
2007…*********************
2014…*****
2013…***
2012…***
2011…**
2010…********
2009…*************
2008…************
2006…****************
. . . . . . . . . . . . . . . . . . . . . . . .
. . . .-40%. . . . . . . . . . . . . . . 0%

This chart compares single family home sales totals (January through July) of recent years to 2007’s (January through July) total, which was (at best) average for Greater Victoria.

SFH sales so far this year are well below Victoria’s long-term average. This has been the case since 2010, the year that sales cratered in Victoria. 2010 was also the year that Victoria’s price decline began.

Let’s put SFH sales totals from recent years into perspective:

2012 = worst year (lowest SFH sales total) on record for Greater Victoria
2013 = second worst year
2011 = third worst year
2010 = fourth worst year

2014 is on track to have the fourth lowest SFH sales total in Victoria’s history.

There simply can be no significant, sustained price recovery in Victoria when sales totals are this low. Low sales is probably the most obvious sign of an extremely weak and unhealthy housing market.

Over the last 3 or 4 years, the general direction of prices in Victoria has been down, although it hasn’t been uncommon for prices to (temporarily) increase slightly during the spring/summer market. This has a lot to do with a higher than normal proportion of recently renovated,/well-maintained house sales skewing the price data during these months.

Weeks ago, I posted a chart that showed house prices in May 2014 were at the lowest level since August 2007 (except April 2014, when prices were slightly lower). That chart was put together using data from Brookfield’s house price index.

The story this summer in Victoria has been continued slow sales with many sellers pulling their listings in frustration. Perhaps these sellers don’t realize that Victoria’s housing bubble is deflating and that if prices declined (from 2010 to 2014) in a heavily stimulated environment of falling interest rates, then prices will most certainly continue to decline now that interest rates have hit bottom and have only one direction in which to move – higher.

Many of these greedy, frustrated sellers will end up selling at much lower prices in the future.

This is how it played out in the US as prices began to fall in many bubbly cities in 2006.. Many frustrated sellers made the decision to pull their listings and wait for higher prices. We all know that prices continued to fall and many of these greedy sellers ended up paying a heavy price. Many were financially ruined as a result of their greed and lack of research.

It’s a classic buyer-seller battle in Victoria’s property market right now. Slow sales points to an extremely weak and unhealthy market. Sales would need to improve dramatically before Victoria’s housing market could be considered healthy again. Without a major market intervention (such as in 2009), sales will likely not improve much and prices will continue to fall. Sellers will eventually give in to the demands of buyers and buyers will win.

Girls and guys, wait for lower prices. Renting for now is a no-brainer. Buyers set the price. No potential buyer has to buy, but there are plenty of sellers who have to sell. If you hold off from buying for now, it will help force sellers to lower their expectations, which will push prices down.

Make sure you mention Garth’s blog to your friends who may be thinking about buying right now. Garth provides a lot of valuable information on his blog. I usually post a comment on Thursdays, for anyone who may be interested in reading what I write.

Until next time – Cheers!

#37 Jack on 08.14.14 at 7:39 pm

However I’d point out that many of the glass towers in Vancouver were built much more than 10 years ago. Over 20 years ago some of them, and this pending crisis hasn’t happened.

#38 the jaguar on 08.14.14 at 7:40 pm

I will be interested to read Kesiks presentation later this evening in depth but it would be interesting to know if certain areas of the country would be more prone to glass tower issues given the differences in local climate. The prairies (Calgary) can still get pretty cold temperatures, -40 is not unheard of, and would be interesting to know how humidity, rain, etc. affect this method of construction as well.
Glass towers are pretty, but we are living in Canada after all. Glass doesn’t scream insulation to me.

#39 Realties.ca » Adios, property ladder on 08.14.14 at 7:41 pm

[…] Source: http://www.greaterfool.ca/2014/08/14/adios-property-ladder/ […]

#40 Omg on 08.14.14 at 7:43 pm

LEAKY CONDOS – the tax payer will pay

Unfortunately the government will step in to help with the cost of fixing these things. After all they are being built to government code and inspected by government inspectors.

Tough luck Ontario and BC tax payer. Of course the developers by then will be long gone.

#41 Catalyst on 08.14.14 at 7:45 pm

More thrilling than shark week or bond week. I can’t wait to see what you have in mind for the finale.

#42 JuliaS on 08.14.14 at 7:49 pm

Vancouver is hosting the infamous computer graphics expo this week – Siggraph 2014. The tickets are typically very pricey, but there is a variety of industry discounts for professionals and students.

This year there is an “unemployed” discount. I find that hilarious.

#43 eat pie on 08.14.14 at 7:50 pm

Shangri la uses a curtainwall system which most ici buildings use. Its actually quite robust.with a 50-80 life span. Window wall is used in nearly all residential highrises due to its much lower cost will be plagued with problems almost immediately upon installation. The Kia of facades.

Shangri-La’s problem is tempered glass, inatead of laminate, in the balconies. Yes, its curtain wall construction is well-engineered. But it cheaped out on glass. — Garth

#44 TEMPORARY® Foreign Prime Minister on 08.14.14 at 7:51 pm

In all seriousness, another excellent informative post from Garth.

Ever think about diversifying a bit? Given this is a financial blog, how about doing future gigs on:

– cellphone ‘plans’ (more like unilateral contracts), and the various ways the Wireless Cartel screw consumers with billing practices, roaming rates, data rates, penalties, etc., and how to avoid them.

– banking and credit card fees and the various ways the Big Five and Visa/Mastercard Cartel screw consumers with billing practices, penalties, backbilling interest, etc.

– personal credit ratings, the facts vs myth regarding the effect of multiple credit inquiries, the two main rating agencies, how to get a free copy of your own credit history,

– how do survive identity theft, and, better yet, what to do to prevent it.

#45 SWL1976 on 08.14.14 at 7:51 pm

Ahhh here we go…. Perfect example of I want it now now now and who cares about the future it’s ony xxx$ per month.

I think this artical speaks volumes about not only the condo market but society in gerneral right now. It’s sad that so many people will lose their shirts and wake up one day soon with a tiny box in the sky hangover, but all the information is out there for those who care to look for it. Society seems to have no moral compass right now and there is a plethora of reasons as to why… One only has to look at our own federal government to see all of the lies, deceit, and finger pointing, and it’s easy to realize how society and the gerneral population has truely lost lost their way

There are many beacons of hope though… Lots of people are now starting to see the bigger picture. Too little too late? We will soon see, all we can do is play our part as there is a lot of negative momentum in the system and it is going to take more than the minority to shift that momentum in a positive direction

No matter how it unfolds we all have a front row seat, everyone has a part to play their part…

Nano-fibers and nano-technology have become a very real part of everyone’s life through arial spraying…

We were not given the choice in this matter, all the information is out there for those who care to look

#46 Ray Skunk on 08.14.14 at 7:53 pm

#37 Jack

Even though they’re glass construction, I would guess that condos built 20 years ago were built to a damn sight better standard than what’s been thrown up in the past 10 years during the developer’s feeding frenzy.

In addition, the more extreme temperatures experienced in Toronto and Montreal (think of all that freeze/thaw for four months of the year) will take its toll a lot more than in relatively mild Vancouver.

Back to the decline of the condo, here’s an interesting read for those who haven’t seen it before:

http://www.thegridto.com/life/real-estate/is-cityplace-torontos-next-ghetto/

#47 JG on 08.14.14 at 7:54 pm

I couldn’t agree more with you and your friend Ted.

They are disasters waiting to happen, in more than 1 way.

#48 Snowboid on 08.14.14 at 7:55 pm

Thank you oh wise professor for this blog entry, it reinforces our conclusions that renting a condo is far preferable to ownership, and far less risky.

The unit we rent initially cost about $ 350 a sq. ft. which I considered a ‘ripoff’ but $ 925 a sq. ft. is unbelievable.

There are condos in our area in NW Phoenix, nice ones but low-rise – $ 100 a sq. ft!

#49 Guy on 08.14.14 at 7:57 pm

Good day Garth:

It isn’t total misery. Mike Holmes grand children will be doing TV shows in thirty five years from now.

#50 eat pie on 08.14.14 at 7:59 pm

The exploding glass balcony issue is completely separate and easily fixed with a beefing of the building code to include heat strengthened glass.

#51 Corban on 08.14.14 at 7:59 pm

A buddy of mine lives in one of these glass suites in Van. Awesome views, cheap/subsidized rent, and he always lets me crash there when I visit. Have to love these wealthy, socialist, RE investors who look after the common man like that.

#52 Bobby on 08.14.14 at 8:00 pm

Maybe this is what our friend Devils Advocate was referring to;

The shift has hit the fan.

#53 Hamish 42 on 08.14.14 at 8:02 pm

I drove to downtown TO a few times this summer and realized what a complete disaster is brewing with the condos. I mean building with a material that is not solid but rather a slowly flowing liquid such as glass as the complete outer surface, what could possibly go wrong???
When the buyers simply cannot sell these units, the effect on the TO economy will be severe, likely 3-5 years away..
Have told my kids not to buy one, no matter what the price.

#54 Suede on 08.14.14 at 8:02 pm

We should have opposite day when instead of reason 192 not to buy a condo, there is a reason and location to actually buy one lol.

Reasons to buy so far:
House horny
Granite counters
All your friends are doing it
Your parents tell you to do it
In suite laundry

Reasons not to:
Every blog post for the last 4 years

#55 Suede on 08.14.14 at 8:05 pm

… And falling windows. Sheeeeeeet

Remember that profs (engineers) use importance factors in their risk analysis of so ten years could be longer depending..

#56 A Yank in BC on 08.14.14 at 8:11 pm

Just imagine how entertaining it will be when they have to start imploding these things. Should be quite a sight.

#57 Tonto on 08.14.14 at 8:14 pm

#24 Ray Skunk

A prime tourist attraction in Toronto ? LOL
WTF are you talking about ?

#58 Vancouverite on 08.14.14 at 8:18 pm

#37 Jack on 08.14.14 at 7:39 pm
However I’d point out that many of the glass towers in Vancouver were built much more than 10 years ago. Over 20 years ago some of them, and this pending crisis hasn’t happened.
—————————————–
With the increasing prices in Vancouver, so people forget about leaky condos a few years back (eg. 2008):

http://www.cbc.ca/news/canada/british-columbia/leaks-concern-owners-at-2-vancouver-condominium-towers-1.764238

Leaks concern owners at 2 Vancouver condominium towers

The owners of condominium units at a downtown Vancouver tower developed by the Concord Pacific Group have had to pay millions for repairs because the building leaked, CBC News has learned.

A second condominium tower developed by Concord Pacific has also had to have millions of dollars in repairs done because of leaks.

Colin Fox, who owns a 2,400-square-foot unit in Governor’s Tower at 388 Drake St., said Tuesday that all of the building’s windows, exterior walls and bricks have been replaced.

#59 Singaporean Investor on 08.14.14 at 8:24 pm

Condo owners own the land beneath the building, it’s just shared with other condo owners based on the sqft of one’s unit/total sqft of all the owners, just like stock ownership, you only own a tiny percentage of the entire company

#60 Vermithrax on 08.14.14 at 8:30 pm

I’ve said it here a million times: These condos are designed to be the future old age homes of the Boomers. Sell them to hispters for a ton of cash, then 15 years later sell them your house for another ton of cash and move into their condo for 1/5 what they paid for it. It’ll be a massive housing switch with the Millenials getting screwed on both ends. Just watch–in a decade one of these crumbling syructure will begin boasting standby nurses, physicians, and respite.

#61 I'm stupid on 08.14.14 at 8:39 pm

I’m not surprised… I was at the Shangri-La about 6months ago, having a drink in the lobby. I walked over the glass koi pond in the lobby when it began to leak. The employees soon arrived with 50 towels to try and soak up all the water. 5 star my ass, the place looks like they put lipstick on a pig.

#62 Bob Rice on 08.14.14 at 8:42 pm

http://www.cbc.ca/doczone/episodes/the-condo-game

#63 Herf on 08.14.14 at 8:42 pm

Garth,

You’ve got a typo in your blurb:

“Meanwhile the building’s developer has been told to warp all those tempered-glass balconies in protective netting, . . .”

Word “warp” presumably should be “wrap”?

Also, price ($925) per footage should be per square foot (not per foot)?

I previously posted links to a couple of the following stories within the past couple of months or so. There’s a follow-up story about the Ottawa situation, concerning the fate of one of the condo owners, a senior. I only glanced at the headline, but doesn’t sound good for the fellow. Here are the links. Sorry, I’m too lazy and tired to post them using HTML. I’m not very competent with HTML and find posting even the simplest link very tedious. (Guess I need more practice).

http://www.thestar.com/news/gta/2014/02/19/degrading_condo_windows_expected_to_trigger_major_wave_of_replacements.html

http://ottawacitizen.com/opinion/letters/another-side-to-story

http://ottawacitizen.com/news/local-news/hugh-adami-15-3m-repair-estimate-leaves-owners-of-ottawa-high-rise-condo-in-shock

I recall seeing the video of you being interviewed on Vancouver’s Howe Street program and you commenting about your concerns for the “slums of the future”. I think the above articles give a hint of what’s in store.

#64 jess on 08.14.14 at 8:43 pm

study “the” types

the professor should meet the tax detective
How to Cheat on Your Taxes
By David Cay Johnston / April 8, 2014 6:20 AM ED..
http://www.newsweek.com/2014/04/18/how-cheat-your-taxes-248101.html

or Take and Rake
3/5/14 at 10:23 PM
http://www.newsweek.com/authors/david-cay-johnston
=========
tax residency
Tax haven film world premiere at Toronto International Film Festival
We have just heard that Harold Crook’s (The Corporation, Surviving Progress) new film, entitled The Price We Pay, is to receive its world première on 5th September 2014 at the Toronto International Film Festival (TIFF).

Featuring TJN’s director John Christensen and senior adviser Jim Henry, plus many other specialists on offshore financial flows, The Price We Pay is described as “an incendiary documentary about the dark history and dire present-day reality of big-business tax avoidance”. View the trailer here.
http://vimeo.com/103132639

…”Currently, startup visas are issued to immigrants who are accepted into a certified tech accelerator, such as Communitech’s Hyperdrive program. Startup visas are also issued to immigrants who have commitments from angel investors or venture capitalists in Canada.

…”The tech sector is competing globally for talent,” Braid said. “So anything we can do as a federal government to expedite the immigration processes to meet employment requirements of our tech sector will only reap positive returns.” (the record)

It only had 13 employees !
The service was acquired by Facebook in April 2012 for approximately US$1 billion in cash and stock
http://www.businessinsider.com/instagram-employees-and-investors-2012-4?op=1

#65 takla on 08.14.14 at 8:44 pm

Anyone stepping up to buy these condo’s{concrete or woodframe} are setting themselves up for mucho misery.Unless you haven’t noticed ,Canada’s climate is not desert,hence the need for superior construction technics to ensure warm,leak free buildings.On the wet coast we are also in a earthquake zone so buildings have to be constructed with this threat in mind.
Leaky condo’s were the rage from the late 90’s on.made a ton of coin refurbishing these buildings at the owners expence and of course once labled leaky condo the cost to rebuild soars as unrelated parts have to be upgraded to building code at time of construction,that means all doors,windows ,slideing balcony doors ect have to come out and be replaced.
Sourced a ton of freebee aluminum windows and doors for free on the last one as every aluminum door and window was replaced with vinyl framed units.
Rumor was each condo owned had to visite the [email protected] for additional mortgage funds of approx. 60-80 tho per unit,lots of angry uninformed owners!

#66 Bob Rice on 08.14.14 at 8:49 pm

A cousin of mine who is an engineer, was visiting from Italy last summer.. Took him to downtown T.O. One thingnhe pointed out almost immediately is the poor quality of material used in the construction of condos… given that Italy has structures that has standing 2500 years later, I’d say he knows what he’s talking about… He also mentioned that in many other cities across the world, architectural standards are far better…

#67 Alberta Ed on 08.14.14 at 8:53 pm

Golly, I can’t wait to see Kesik’s concerns reported in the G&M. Oh… I guess I will.

#68 Herf on 08.14.14 at 9:00 pm

“. . . wear a hard hat”?

I think you better carry a Roman Legionnaire’s combat shield. I don’t think a hard hat is going to save your life from a (what, 20lb? 30lb? 40lb?) sheet of glass falling from 20, 30 or more stories above.

#69 Ronaldo on 08.14.14 at 9:02 pm

The following, if implemented, would have dire consequences for anyone who has purchased condos for rental purposes in Toronto.

http://www.building.ca/news/rent-control-condo-collapse/1003156219/?&er=NA

#70 Kilby on 08.14.14 at 9:03 pm

#37 Jack on 08.14.14 at 7:39 pm
However I’d point out that many of the glass towers in Vancouver were built much more than 10 years ago. Over 20 years ago some of them, and this pending crisis hasn’t happened.

Sheraton Wall Centre had to have ALL it’s windows replaced a few years ago……

#71 Ed Harms on 08.14.14 at 9:05 pm

Curtain wall systems have been around since the 50’s….all are engineered to code but from time to time (especially in residential units) poor construction oversight allows deficient installations…big deal.

Better record than GM vehicles at least.

#72 Fartweezel on 08.14.14 at 9:06 pm

Garth: Keeping it real in a world of bs.

#73 Don't Forget the Leaky Condos on 08.14.14 at 9:09 pm

Great post Garth. Your story echoes the great leaky condo crisis that plagued Vancouver in the 90s. Most condos were built in a “California” style with little or no overhangs, face-sealed which meant that caulking was the only protection from rain infiltration, poor flashing, thin stucco, and generally poor standards which were common in the building boom after Expo 86. Many buildings on the west side of Vancouver faced million dollar plus engineering costs per building which were, of course, paid by strata owners. These were for the most part, 4-storey wood frame buildings. People paid their special assessments and lucky for them, they were saved by the recent property price boom. What’s different today is there will be no property boom to bail everyone out from their poorly constructed condos. The professor could be right, they may be the slums of the future. Scary thought.

#74 Herf on 08.14.14 at 9:13 pm

A question that occurred to me is, in the event a pane of condo tower glass falls and kills or injures someone below, who is liable, the condo strata or the condo developer (I’m assuming they’re two different parties in most or all cases)?

#75 Mike S on 08.14.14 at 9:18 pm

“How long before Re/Max starts using this as a justification for rising detatched home values?”

Already happening, just ask your REALTOR(R)

Truth is that even without the property lader, and even if you don’t take into account many detached owners, “invest” in condos, detached houses (at least in GTA/Vancouver) are simply overpriced

#76 Sheane Wallace on 08.14.14 at 9:20 pm

Our friend Mark (the talk) Carney does it again:
https://ca.finance.yahoo.com/news/bank-englands-carney-wrong-foots-015607472.html

surprise, surprise.

#77 Victor V on 08.14.14 at 9:22 pm

Shangri-La ordered to ban guests from balconies, construct falling-glass barriers over sidewalks
http://www.thestar.com/news/gta/2014/08/12/shangrila_ordered_to_ban_guests_from_balconies_construct_fallingglass_barriers_over_sidewalks.html

Glass replacement on Shangri-La balconies could begin within weeks
http://globalnews.ca/news/1505093/glass-replacement-on-shangri-la-balconies-could-begin-within-weeks/

The city orders the Shangri-La Hotel to protect all of us from its falling balcony glass
http://www.torontolife.com/informer/toronto-real-estate/2014/08/12/city-orders-shangri-la-hotel-protect-us-falling-balcony-glass/

#78 Sheane Wallace on 08.14.14 at 9:23 pm

falling glass are almost daily occurrence in the last 4 years in down town To.

the cost to build such a condo is 15 % of the sale price, the rest is land cost, marketing, profit.

The builders are old Canadian money -privately held companies with connections.

#79 Porsche on 08.14.14 at 9:29 pm

Monthly strata fees of $635

That’s a pretty nice car

#80 Anson on 08.14.14 at 9:32 pm

Moral of the story?
Don’t expect to make money in real estate any time soon..(next decade) ..in real terms anyway..
Hey I may not be as ancient as Garth and have not lived through a real estate market correction but I can tell you from what I read in history books it’s not difficult to predict the outcome.
A big part of being young and growing up is learning from past mistakes, however financial mistakes of this magnitude will unfortunatly wreak havoc on their future balance sheet..I mean you only have so many prime working years in your lifetime so a mistake this big WILL seriosly put a dent in your future lifestyle.

#81 Sheane Wallace on 08.14.14 at 9:34 pm

#8 -=jwk=

when loaf of bread is 15 bucks?

#82 Inglorious Investor on 08.14.14 at 9:39 pm

Singaporean Investor on 08.14.14 at 8:24 pm

“Condo owners own the land beneath the building, it’s just shared with other condo owners […] just like stock ownership, you only own a tiny percentage of the entire company”

Owners of quality stocks share the profits (dividends). Owners of condos share the costs.

Do you also think that time shares are good investments?

Don’t be so fee simple minded.

#83 Ray Skunk on 08.14.14 at 9:44 pm

#57

I’m talking about the eastern reaches of CityPlace being across the street from the Rogers Centre/CN Tower/Aquarium/Roundhouse.

Of course this doesn’t make it immune from slum transformation; I think the CP developments west of Spadina are ripe to become tomorrow’s crackdens.

#84 Cha Ching on 08.14.14 at 9:45 pm

Why should I listen to Professor Kesik again?

How much money has he made investing in real estate?

Exactly.

#85 Mike S on 08.14.14 at 9:48 pm

“The demand for freehold will be higher as people see the obvious benefits of land ownership, and they will pay a premium.”

maybe only true for strategic areas like a downtown. owning a land in a suburb and spending hours in traffic is just a bad deal.

Also you need to remember that the debt for such a detached house is twice as much and work mobility greatly reduced

#86 gladiator on 08.14.14 at 9:51 pm

Yeah, Garth,
yore/your/you’re right, in 10 years it’ll be a mess, but NOW we are all w-r-o-n-g. Real Estate keeps going up and I look like an ID 10 T-er (ID10T) at parties with my friends who happily put 5% down and bought houses in Maple and elsewhere in the GTA.
Well, honestly, they are happy I am wrong (and not hiding it) and I am happy I know I will be proven right (and will be hiding my schadenfreude feelings, because it’s not nice to smile when people hit a financial brick wall at full speed).
Meanwhile, I keep renting a 3 br apt for 1,230$ per month in TO, saving around 27% of my pre-tax pay and enjoying life as well. Balance and liquidity. You never understand it until you experience it. Ahhhhh… Life’s good…. Garth, if we ever meet, some good drinks are on me.

#87 Inglorious Investor on 08.14.14 at 9:55 pm

# 66 Bob Rice on 08.14.14 at 8:49 pm

“[…] Italy has structures that has standing 2500 years later, […]”

The Ancient Romans invented concrete. They even had concrete that could set under water. With the decline and fall of Rome, the knowledge of concrete was lost. It was not until about 1500 years after the fall of Rome that we once again began to build using concrete.

If you go to the Colosseum and look up at the barrel vaulted roofs of the concentric corridors that lead to the stands you can still see the impressions in the concrete made by the wooden forms.

Today, a lot of Italian low rise buildings are made with concrete and hollow clay blocks called forati, which are cemented together with mortar.

#88 april on 08.14.14 at 9:59 pm

#46 – The leaky condos started been built in the early 80s so no they were not better built .

#89 Inglorious Investor on 08.14.14 at 10:02 pm

So with this particular Shangri-La I suppose the accelerated aging process occurs once you ENTER, not once you leave?

#90 Doug in London on 08.14.14 at 10:08 pm

What? With the outrageous prices these condo units sell for, the building should be able to withstand a direct strike with an atomic bomb!

#91 Doug in London on 08.14.14 at 10:16 pm

@gladiator, post #86:
So these fools don’t hide it when you are proven “wrong” you say? When that little known and much less understood thing called reality hits home I wouldn’t be at all shy to break into a fit of hysterical laughter saying “I told you so!!!!” when they hit that financial brick wall at full speed. I would rub it right into their foolish faces.

#92 Keith on 08.14.14 at 10:20 pm

@ #40 Omg – During the leaky condo crisis in B.C., there was no taxpayer bailout. The government did subsidise a cut in the interest rate on funds borrowed to pay special assessments related to leaky condos.

Developers usually establish a numbered company that magically dissolves shortly after the last unit is sold. The owner will be on the hook for construction deficiencies that show up many years later. It’s a festival of money for leaky condo engineers, builders and others who feast on poor design and construction at the expense of the consumer …. again.

#93 Bob Rice on 08.14.14 at 10:30 pm

@#87 Inglorious Investor:

If I am not mistaken did they (the Romans) not mix lava rock with the cement mix thereby making the mixture and structure that much more stable/stronger?

#94 coastal on 08.14.14 at 10:36 pm

I’M waiting for all the 80’s and 90’s leakers that will have to get ripped to the studs for the second time. There is no way they get all the mold out the first time around. I rented a high end Victoria condo a dozen years ago for about six months. Didn’t know it had been a leaker that was recently “fixed” til after I moved in. Since the bedroom was so small and my bed cut off access to the sliding glass deck door, I rarely got a chance to open it but always had good air flow from the main deck window which was around the corner. When I went to clean the window when I moved, I pulled back the curtain to see a mass amount of black mold like I have never seen all along the bottom of the sill and up the side and along the frame. Clearly the mold and seal job was substandard as I would imagine many other leaker “fixes” are. Once the mold is in there, good fricking luck getting rid of it.

#95 Musty Basement Dweller on 08.14.14 at 10:36 pm

It seems clear with this many issues that flippers will eventually see the light and start to bail. And down goes the property ladder.

I think the other issue on the list that we don’t talk about much is what happens when the single family dwelling “investors” realize they are getting peanuts or less for their investment?

I am referring to the many people who own multiple dwellings here on the west coast because real estate has been on such a tear. And i am not talking about rich investors. Many average Joes like me who own multiple houses on credit. (but I own none).

Many of them may not be that smart but eventually they will realize things will not always stay as they have been, and the ponzi scenario has topped out.

#96 Mister Obvious on 08.14.14 at 10:36 pm

#40 Omg

“Unfortunately the government will step in to help with the cost of fixing these things. After all they are being built to government code and inspected by government inspectors.”
————————-

Doubtful.

When you pay for a development permit you are also paying up front for all required inspections.

You further sign and explicitly agree to hold the inspectors free from liability should they fail to detect any construction deficiencies.

And when you think about it, how else could it be?

#97 Linda Mulligan on 08.14.14 at 10:46 pm

For the kind of $ that are being laid out, these condos s/b state of the art indestructible at the very least. Plus, where the heck are the regulators/building inspectors etc? Government regulations s/b altered to forbid this kind of construction from being done in the first place, in the interests of public safety if for no other reason.

#98 devore on 08.14.14 at 11:07 pm

I know people balk at the cost of condo fees in Toronto, but I have always been saying, as high as they are, they are still too low. They only cover, at best, planned and routine maintenance. The way these towers are constructed, with substandard materials and barely meeting minimum code (assuming they’re even properly inspected), a slew of emergency work will be needed on every subsystem. One of the dirty secrets in Vancouver is failing sprinkler plumbing. Engineers and inspectors are aware of the issues, and all the upcoming maintenance reports required by law are going to include these kinds of things.

Condo fees in Vancouver are generally lower, but the situation for future owners is even worse. The new maintenance schedule reports are only scratching the surface.

#99 Andrew Woburn on 08.14.14 at 11:13 pm

97 Linda Mulligan on 08.14.14 at 10:46 pm
Government regulations s/b altered to forbid this kind of construction from being done in the first place, in the interests of public safety if for no other reason.
========================

Not happening. It’s way cheaper to control the MSM through advertising and governments through political donations.

#100 Happy Renting on 08.14.14 at 11:14 pm

#91 Doug in London on 08.14.14 at 10:16 pm
@gladiator, post #86:

Not if he wants to keep getting invited to parties.

When TSHTF the whole economy will shudder, so even without a real estate noose around your neck you’ll likely still feel some ill effects. Your best bet is to keep your mouth shut and try to blend in with the terminally screwed. No one needs to know that you have money they could (theoretically) borrow.

#101 Jon on 08.14.14 at 11:14 pm

Wall center in vancouver started a 6.5 million dollar window replacement of all the light coloured glass due to high air conditioning costs this cost 50% paid by developer the strata covers the other half of the cost. It started in 2013.

#102 Dr. Subprime CHMC on 08.14.14 at 11:23 pm

#30 Enthalpy on 08.14.14 at 7:29 pm

What about ICF construction? I don’t know how high you can go with it but I’ve seen it to 6 or 8 stories. What about for sfh construction, ICF I mean?

#103 JimH on 08.14.14 at 11:37 pm

#56 A Yank in BC
“Just imagine how entertaining it will be when they have to start imploding these things. Should be quite a sight.”
===================================
‘They’ may not have to! Looks like these fishbowls might just implode all by themselves! Maybe there’s some ulta-fine print in the agreement a’ la Mission Impossible:
“This Condo, if you choose to accept it, will self-destruct in 15 years.”

#104 Roxy on 08.14.14 at 11:39 pm

I work at King and Bay. Every morning I walk under the Trump Tower hoping for glass to fall and hit me so I don’t have to go and suffer my miserable job.

It never does.

#105 Unknown Marketer on 08.14.14 at 11:45 pm

The GarthFAQ

Awesome… a blog to explain Garthism’s if that ain’t arriving I don’t know what is.. :)

LMAO :)

#106 realtors, mortgage brokers and developers on 08.14.14 at 11:46 pm

Looks like Garth hit another nerve with these pathological liars. These people are so transparent when they post here it’s just to obvious. If everything was so well why are these liars here posting the majority of posts everyday? The answer is also obvious.

#107 JimH on 08.14.14 at 11:48 pm

#84 Cha Ching
“Why should I listen to Professor Kesik again?
How much money has he made investing in real estate?

Exactly.”
====================================
OMG! Not again! You really are serious, aren’t you! Here I thought you were just another failed stand-up comic.

#108 Dr. Subprime CHMC on 08.14.14 at 11:54 pm

It all reminds me of the lawyer that used to impress articling students by running and jumping into the window of the office tower which he would bounce off of until one time he didn’t. The window broke and he fell however many stories to his death. Every piece of glass has a weak spot. Even more so when it has impurities like the cheap Chinese glass that has been used in many of these condos.

I thought the lawyer story was bull but there are Toronto newspaper archive articles that verify it really happened. Makes me wonder why you would buy a window wall box in the sky then have a party with drunken freinds to celebrate your new home who might fall into the window wall or worse yet have a child who might crash it to it playing. When the kid doesn’t fall through the first few times they might gain the same false confidence of the lawyer.

It’s a horrifying thought.

Anyone with any window that isn’t a single pane knows that eventually the seals fail. Then the argon leaks out and the slight insulating value is gone not to mention how badly they will fog up and retain moisture between the panes. Maybe they should be spelled pain.

#109 KommyKim on 08.14.14 at 11:54 pm

RE #19 Mocha on 08.14.14 at 7:01 pm
Did the man who was struck by the falling glass die?

No:
“Last September, a 53-year-old man suffered minor injuries when he was struck by falling shards, one of five such incidents at the building since it opened two years ago.”
Ref: http://www.thestar.com/news/gta/2014/08/12/shangrila_ordered_to_ban_guests_from_balconies_construct_fallingglass_barriers_over_sidewalks.html

#110 Richard on 08.14.14 at 11:57 pm

The glass walls are called “curtain wall” in the industry. And about 5 or 10 years ago most of the manufacturing of it moved to Chinese companies. They’re built and shipped as complete units ( panels).

They’re expensive and have a untested lifespan. Repairs are not really an option. You have to replace the entire panel.

#111 Capt. Obvious on 08.15.14 at 12:05 am

I don’t think these glass skinned buildings would withstand a Sharknado. And definitely not Sharknado 2, the second one.

Also, the world needs more Professor Kesiks.

#112 Spectacle on 08.15.14 at 12:25 am

Wow Garth, you are on fire ! Amazing blog & thanks!

Re last night:
#162 Bottoms_Up on 08.14.14 at 1:40 pm
#115 Spectacle on 08.14.14 at 12:42 am
——————————————
Congratulations, but please keep in mind that Garth’s advice is essentially ‘buyer beware’, and he also recommends against certain kinds of real estate (condos).

You really need to analyze your own life factors…… Just something to keep in mind.

Yes, thank you. This evenings blog is something I deal with occupation wise . Only even barely consider residential property again once it “flat lines” as you noted.

Pardon my cryptic writing if it wasn’t clear: I understand the CONDO ownership situation in western Canada, is a HUGE MISTAKE at this time. Appreciate your advice very, very much.

Re:
#87 Inglorious Investor on 08.14.14 at 9:55 pm
# 66 Bob Rice on 08.14.14 at 8:49 pm

“[…] Italy has structures that has standing 2500 years later, […]”

The Ancient Romans invented concrete…..With the decline and fall of Rome, the knowledge of concrete was lost……

Actually concrete may have been used far earlier than the Romans ! If you’d like, Youtube the Bosnian pyramids , fascinating video documentaries of the 30,000 year old Bosnian pyramids ( wasn’t called that 30,000 years ago, I am certain).

History can repeat itself……

Regards all.

#113 Joe2.0 on 08.15.14 at 12:26 am

The windows are the killer you can see.
MOLD can be your worst nightmare, a silent killer lurking in side buildings and houses all over the city.

It can be Deadly, it often starts with asthma or another respiratory condition and it can cause your auto immune system to short circuit.

Tired, headaches, strange taste in mouth, sneezing, itcy eyes all can be a warning of the silent killer.

If you suspect your home has an issue bring in an inspector with a mold detector device.

Thank me later:)

#114 Carpe Diem on 08.15.14 at 12:30 am

#37 Jack on 08.14.14 at 7:39 pm

However I’d point out that many of the glass towers in Vancouver were built much more than 10 years ago. Over 20 years ago some of them, and this pending crisis hasn’t happened.

——-

2002-2008 – I can’t remember the exact years.

I lived in Yaletown for over 10 years and I saw a few buildings having issues and scaffolding. A buddy of mine lived in one and there were plenty of folks that had to sell since they couldn’t pay for renos.

—–

My in-laws vultched a condo in Richmond, BC due to the same reason. Owner couldn’t pay the repairs and prices of the place were depressed. My in-laws bought low, rented the place to their son and sold high once the place was fixed up and prices came back!

#115 Spectacle on 08.15.14 at 12:39 am

Thank You G.

Just had to support the details provided by ;#98 Devore

#98 devore on 08.14.14 at 11:07 pm
I know people balk at the cost of condo fees in Toronto, but I have always been saying, as high as they are, they are still too low. They only cover, at best, planned and routine maintenance. The way these towers are constructed, with substandard materials and barely meeting minimum code (assuming they’re even properly inspected), a slew of emergency work will be needed on every subsystem. One of the dirty secrets in Vancouver is failing sprinkler plumbing. Engineers and inspectors are aware of the issues, and all the upcoming maintenance reports required by law are going to include these kinds of things.

Condo fees in Vancouver are generally lower, but the situation for future owners is even worse. The new maintenance schedule reports are only scratching the surface.

My reply: very correct . In Vancouver, older buildings “grandfathered” in/out in relation to HUGE $ costs/upgrades are coming.
– older buildings will need sprinklers added
– older buildings will need alarm panels in all areas and in each unit
– fire escapes,
– fire and safety refuge areas will need to be built along with stairwells out of parkades, bike rooms

I had a nice discussion with a warranty gentleman about the old/new Olympic town home site . See pic of Garth’s blog last night. He said the sexy new sewage treatment system had leaks! Yikes! Seems heating a building with a hot steaming pile of human poop is , well, not so good! He could smell it in the lobby and hallways….ick.

Regards

#116 waiting on the west coast on 08.15.14 at 12:50 am

#93 Bob Rice – yes – it was just recently discovered that the concrete the Romans created was far more durable (even in tidal pools) than anything we have been using since due to some properties of the volcanic ash being added to the regular concrete mixture.

Garth – kind of PATHETIC® like this blog but i am really enjoying each o post during “Misery Week”.

#117 east van on 08.15.14 at 1:05 am

THIS IS INSANE!!!

http://www.vancouversun.com/business/affordability/UDI/FortisBC+Index+Four+people+four+incomes+house/10119158/story.html

#118 Lurcher on 08.15.14 at 1:07 am

What will this do to west side Vancouver property values:

http://www.news1130.com/2014/08/14/cp-rail-starts-clearing-arbutus-corridor/

#119 Fed-up on 08.15.14 at 1:09 am

Well not to worry blog dogs, most of the houses built in the past 30 years are piles of shit too and have gotten progressively worse. A carpenter with 25 years experience spent about 2 hours with me the other day telling me about nightmare plumbing, shoddy electrical work, styrofoam framing and back up sewage disasters in newer homes just waiting to happen.

What an amazing group of charlatans this entire condo/housing scam is.

#120 Inglorious Investor on 08.15.14 at 1:11 am

# 93 Bob Rice on 08.14.14 at 10:30 pm

“If I am not mistaken did they (the Romans) not mix lava rock with the cement mix thereby making the mixture and structure that much more stable/stronger?”

Yes, they added a volcanic sand called pozzolan to the mixture, which was an improvement over earlier types of concrete. One thing the Romans didn’t do was make reinforced concrete (concrete with embedded rebar). This means that Roman concrete should have had excellent compressive strength, but little tensile strength. Yet they were able to built a structure as magnificent as the Pantheon, with its massive dome, coffered ceiling and oculus (the large hole in the top of the dome). If you’ve ever seen the Pantheon in person, it’s awesome in the true sense of that word.

#121 Bill Gable on 08.15.14 at 2:32 am

>Off topic – pardon me, Mr. Turner – but I could not resist-

“Pope Francis Squeezes Into a Kia for South Korea Visit”

Link: http://tinyurl.com/lffwc92

#122 Bill Gable on 08.15.14 at 2:45 am

On Topic – we RENT in a very high end Tower, in Vancouver’s West End.

It is less than 15 years old, and had to be repiped 3 years in.

Today, we find out that the SPRINKLER system and the fire alarm systems are failing. (*The middle of the night alarms – oh joy – and man were the Firefighters PO’d at the concierge on the 4th occasion in 6 weeks).

The owner, who lives in an Asian Country – will be getting a bill for around $37,000.

They are about to start slamming up a HUGE Condo/ Retail monstrosity at one end of the Burrard Bridge.

It is going to create traffic chaos. It will be filled with 500 square foot GLASSY Condos. Big retail. Big bucks.

It will be, I predict, ‘the jump the shark moment’ in Vancouver’s property collapse.

Man, this is going to be a mess.

#123 Exurban on 08.15.14 at 3:23 am

#70 Kilby

Sheraton Wall Centre had to have ALL it’s windows replaced a few years ago……

I eleive it wasn’t all of them, but just the clear-colored upper floors. That one’s a complicated story.

Vancouver Wall Centre in $7M window fix

That said, the great majority of Lower Mainland condos are junk and will indeed be the slums of the future. Hell, some of them are slums now. I’ve had to spend some time in Washington State over the past two years and I’m convinced that building standards there are superior to here.

#124 Joe on 08.15.14 at 6:59 am

In BC the govt setup a special fund to help out homeowners in financial distress due to the leaky condo situation and that’s pretty much solved it for them. Sounds like Ontario will have to come up with a similar program.

#125 Sebee on 08.15.14 at 7:32 am

What about those gold bank building windows? They seem to last.

#126 The real Kip on 08.15.14 at 7:52 am

The glass on the exterior is called a curtain wall and you are correct, it’s used because it’s cheap.

I used to work for the company that built the structure at Shangri-la but they didn’t like my ‘talk back’ attitude so I quit but I did work briefly on the Shangri-la project and did top it off in December 2011. I hated that building but did take some pics from the crane elevation at 700 feet. Shangri-la like you’ve never seen it. It was super cold that day.

http://s265.photobucket.com/user/kipgardiner/media/CityPlace/Shangri-La/Shangri-la14.jpg.html

#127 Gab on 08.15.14 at 8:19 am

From a business perspective condos are the greatest invention. It’s something you never really own. The people behind it keep raking it in well after it’s done. You are powerless against the managements and their deep pockets. The list goes on and on. It’s such a good idea that now we have stacked “town houses”. When owning a condo forget the term “your castle”. I’m still waiting for the day that they build one the size of a prison cell and call it luxury living.

#128 Smoking Man on 08.15.14 at 8:40 am

I love the smell of money in the morning….

I told you dogs, today’s job numbers would be good and to sell USDCAD….

cha ching aling…. Ya….

#129 Hoser on 08.15.14 at 9:06 am

>>I mean building with a material that is not solid but rather a slowly flowing liquid such as glass as the complete outer surface, what could possibly go wrong???

Urban legend. Glass does not flow.
I still wouldn’t build a wall with it though.

#130 Hyundai Driver on 08.15.14 at 9:06 am

@87 Inglorious Investor

Survivor bias. We only *see* the Roman concrete which lasted 2000 years.

Still, point is valid. A lot can be learned from that stuff.

#131 crowdedelevatorfartz on 08.15.14 at 9:11 am

@#101 Jon
“Wall center in vancouver started a 6.5 million dollar window replacement of all the light coloured glass due to high air conditioning costs this cost 50% paid by developer the strata covers the other half of the cost. It started in 2013…..”
++++++++++++++++++++++++++++++++++++
WRONG.

During the original Wall Center constuction The developer tried to pull a fast one with the city planners. He wanted tinted windows, the city demanded clear glass. He started building the tower with tinted glass.
He got caught.
Lawsuit.
Developer lost.
Developer pumps money into getting new city “clouncil” elected.
Developer reapplies to city planners to install “original tinted windows” which ( surprise surprise) he still has sitting around after 10 years of storage fees.
And politicians wonder why the general public view them as something lower than a urinal puck.

Money talks.

See link.

#132 crowdedelevatorfartz on 08.15.14 at 9:12 am

oops, forgot link.

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=3&cad=rja&uact=8&ved=0CCgQFjAC&url=http%3A%2F%2Fwww.theglobeandmail.com%2Fnews%2Fbritish-columbia%2Fvancouver-planning-department-shatters-previous-council-decision%2Farticle7616538%2F&ei=QQXuU9iTIYr3oASC9IGoAQ&usg=AFQjCNFnfFrhlotPw-0X3rjW-N8LKAat0Q

#133 james on 08.15.14 at 9:13 am

Revised number is 40k jobs created.

#134 Big Ed on 08.15.14 at 9:16 am

#35 eddy on 08.14.14 at 7:37 pm
Everything Ted says about condos construction, and inevitable special assessments is 100% true.
Impact on freehold values? I disagree. The demand for freehold will be higher as people see the obvious benefits of land ownership, and they will pay a premium.
+++++++++++++++++++++++++++++++++++

BINGO! Eddy you’ve hit the nail on the head.
Like I’ve always said, two Eds are better than one.
Big Ed

#135 Big Ed on 08.15.14 at 9:18 am

#128 Smoking Man on 08.15.14 at 8:40 am
I love the smell of money in the morning….

I told you dogs, today’s job numbers would be good and to sell USDCAD….
===============================

Good call. I was closer on the job numbers but you had the balls to make the bet.
Big Ed

#136 TorontoBull on 08.15.14 at 9:23 am

@128
things not so good in 416…

#137 Shawn on 08.15.14 at 9:28 am

Condo Collapse?

With prices refusing to collapses we are now predicting the structures to collapse?

Nobody remotely suggested that. The issue is the likely failure over time of the window wall systems, and the concurrent impact on valuations. — Garth

#138 a prairie dog on 08.15.14 at 9:31 am

Should have called it Shardgri-La or Shardkil-La.

#139 Aiden on 08.15.14 at 9:32 am

http://www.theglobeandmail.com/report-on-business/economy/housing/winners-and-losers-in-canadas-housing-market/article20071229/

The bottom line is price will grow however slow it may be in the future. Ignore the noise.

#140 Ray Skunk on 08.15.14 at 9:49 am

200 jobs gained revised to 42,000 jobs gained?

Absolute, pure, undiluted, investment-grade horseshit.

Oh Harper you plastic-haired cheeky rascal.

#141 Ray Skunk on 08.15.14 at 9:54 am

#104 Roxy

I work at King and Bay. Every morning I walk under the Trump Tower hoping for glass to fall and hit me so I don’t have to go and suffer my miserable job.

It never does.

———————————————————

Given the shenanigans performed by the extremely reputable development team behind this project, I’d expect the whole effing thing to collapse.

#142 Italians love real estate on 08.15.14 at 10:00 am

Quote ” the best investment on earth is dirt ”

Timothy G. Sinclair

#143 epeacecraft on 08.15.14 at 10:12 am

#43 eat pie

This point needs to be reinforced: the curtain wall system used by commercial buildings (and older condos) is much more robust and weather-resistant, albeit expensive than the window wall system that is currently eating up condominiums.

Window walls are sealed using caulking and taping, and easily dry out and cause leaks. Curtain walls, on the other hand are anchored using metal plates.

Of course, there can always be badly installed curtain walls. (*cough* Shangri-La *cough*)

#144 NoName on 08.15.14 at 10:15 am

we should not be worried about falling apart condos, osb fumes, crooked wals, sinking foundations, Adam Smith’s invisible hand will take care of it soon. If invisible hand of free market fails, government will regulate SHIFT out of it… Liability is funny thing.

#145 };-) aka Devil's Advocate on 08.15.14 at 10:28 am

#134 Big Ed on 08.15.14 at 9:16 am

#35 eddy on 08.14.14 at 7:37 pm

Impact on freehold values? I disagree. The demand for freehold will be higher as people see the obvious benefits of land ownership, and they will pay a premium.

+++++++++++++++++++++++++++++++++++

BINGO! Eddy you’ve hit the nail on the head.

Now your getting close to understanding. The BIG question is; will you be there then? Generally speaking, in our lifetimes under this economic model, land values are not going down. Serfdom awaits those who refuse to understand that.

Unfortunately, in most, the fear of failure far outweighs the desire for success. So they continue doing what they have been doing and get the results they should expect.

People who chose not to buy houses from people like you are not serfs. At least try to appear credible. — Garth

#146 Toronto_CA on 08.15.14 at 10:34 am

The wild swing in the jobs number was completely unexpected; although still not good news for full time workers, at least it wasn’t quite the jobocalypse the first report was.
Stats Canada has become a joke.

#147 Tony on 08.15.14 at 10:35 am

Re: #142 Italians love real estate on 08.15.14 at 10:00 am

It used to be pinball machines and real estate.

#148 Rapier Wit on 08.15.14 at 10:37 am

I love it when the realities of RE “investment” hit the hard, cold light of day. Whilst I wish this couple nothing but the best of luck, it seems that Garth’s wisdom is playing out in the real world.

http://business.financialpost.com/2014/08/14/real-estate-family-finance/

#149 Tony on 08.15.14 at 10:37 am

Re: #140 Ray Skunk on 08.15.14 at 9:49 am

A lot of summer jobs for the students yet 99 percent of students today are too lazy to even work a summer job. Something doesn’t add up.

#150 OttawaMike on 08.15.14 at 10:40 am

#126 The real Kip on 08.15.14 at 7:52 am
Nice photos crane man. I don’t see your harness or lanyard out there on the catwalk though.

MOL will fry you if they see your slide show.

#151 Rational Optimist on 08.15.14 at 10:41 am

121 Bill Gable on 08.15.14 at 2:32 am

“Pope Francis Squeezes Into a Kia for South Korea Visit”

So the car is now holy crap…

#152 Holy Crap Wheres The Tylenol on 08.15.14 at 10:46 am

The most liklye reason for the glass failure is because it is cheap glass from Asia. The building code requires glass to be tempered and heat soaked if it is a certain distance away from the balcony slab edge, otherwise it is just tempered. If the glass would have been heat soaked, it would have been quickly discovered that the glass was no good. The heat soaking takes the glass to a higher temperature than just tempering, but they are separate processes. Normally, less than 1 in 1000 pieces of glass break in the heat soaking process and it really only adds a minimal amount of additional cost to the project. To have the amount of breakage that they have been having in their testing tells me that all the balcony glass on the building is absolute garbage and dangerous to people on the balconies and on the street below ! That’s what happens when developers and/or builders cheap out. Have fun condo owners, you got what you paid for. Or did you?

#153 Bottoms_Up on 08.15.14 at 10:50 am

#186 Crowdedelevatorfartz on 08.14.14 at 5:36 pm
—————————————————–
While I would prefer to defer the pension argument to experts, they are telling us that if they match or beat 4.1% per year then the fund is solvent. The records they refer to go back 10 yrs, and on average they beat that amount by 2%.

Would that not be a fact that applies to long-term solvency?

There are other considerations too such as growing employment and increasing contributions. Of course there are a lot of factors out of the control of these entities such as death rate, economic growth/decline etc. but that is always the case. As humans we do the best we can with what we’ve got. To date they are doing pretty darn good.

#154 Holy Crap Wheres The Tylenol on 08.15.14 at 10:50 am

#140 Ray Skunk on 08.15.14 at 9:49 am
200 jobs gained revised to 42,000 jobs gained?
Absolute, pure, undiluted, investment-grade horseshit.
Oh Harper you plastic-haired cheeky rascal.
__________________________________________
Well at least its better than poor old Smoking Mans forcast “I’m going with +14900 jobs Friday..”
2.81 times better to be exact.
Perhaps there was a large increase of the number of horse pooky handlers out there to account for all of these new jobs?

#155 };-) aka Devil's Advocate on 08.15.14 at 10:51 am

#142 Italians love real estate on 08.15.14 at 10:00 am
Quote ” the best investment on earth is dirt ”

Timothy G. Sinclair

BINGO! Money means squat if you don’t have a place to park your butt, grow food, draw water and provide shelter against the elements. It’s the land that is the be all and end all to everything. Financial investments could not exist if the companies you invested in did not have a place from which to do commerce. Bought or rented EVERYONE needs dirt to survive.

The things you want are becoming more affordable. The cost of things you NEED, all of which stem from dirt, are getting LESS AFFORDABLE for the growing population of serfs on this planet.

MONEY means nothing at the end of the day. Freedom is EVERYTHING. You can be a slave to money as if that is your focus rest assured you will never have enough.

The wealthy don’t work for money, they work for the challenge – they find their “voice” and success naturally follows.

What is “voice”? It’s the convergence of something you do well, that you are passionate about, that fulfills a need, which people will pay you for. Get there are you are unstoppable… you cannot be contained because you are the container.

People call me narcissistic. That may be so. I am in an AWESOME place, mentally and physically, and proud of it. Others can be too. My “trolling” is an intended wakeup call to that end. It’s not about the money it’s about life!

So what does that all have to do with “dirt”? I think it’s obvious if you just look around and take in what happens on it.

#156 Bottoms_Up on 08.15.14 at 10:55 am

#142 Italians love real estate on 08.15.14 at 10:00 am
——————————————————
Back when gold was booming and this blog was filled with doomers, there was an article on that rich old dude (Warren Buffet) that exclaimed he would rather own all the farm land in the USA, than all the gold in the world (that would fit inside a baseball diamond). I believe at the time they were ‘worth’ the same amount.

#157 jess on 08.15.14 at 11:09 am

Sheane Wallace

Analysts at Citigroup called Carney a “policy chameleon”
well what are they called ?

Citigroup pays $7b in fines for subprime sales – Fraud – NZ …
http://www.nzherald.co.nz/fraud/news/video.cfm?c_id=213&gallery...
Jul 15, 2014 – US banking giant Citigroup has been fined $7 billion to settle a federal investigation into risky subprime mortgages, the type that helped bring ..

#158 Bobby on 08.15.14 at 11:14 am

For #145 DA,

May I suggest that someone who is stuck paying for a depreciating asset, a condo, is really the one destined to be a serf. I’ll bet all of those who bought into leaky condos with their endless assessments aren’t feeling that good now about their ownership experience.

Or, how about many of the condos I’m looking at in Kelowna. Many are priced well below what the owners originally paid but they still cannot be unloaded. Do you think they feel like feudal landowners or serfs? As the one agent said to me, they just want out.

As you said in one of your endless posts, volumes are up but prices haven’t moved.

Like I have always said, you should get out more. You believe your own hype!

#159 how do you do? on 08.15.14 at 11:15 am

apparently, the canadian jobs market is booming.

Corrected Statscan report finds 42,000 jobs added in July, not 200

#160 Daisy Mae on 08.15.14 at 11:16 am

#72 Fartweezel: “Garth: Keeping it real in a world of bs.”

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

It’s amazing what we learn…..thank you, Garth!

#161 Geek on 08.15.14 at 11:17 am

For those interested here is a very interesting documentary by CBC, ‘The Condo Game’.
http://www.cbc.ca/doczone/episodes/the-condo-game

#162 Smoking Man on 08.15.14 at 11:25 am

#154 Holy Crap Wheres The Tylenol on 08.15.14 at 10:50 am200 jobs gained revised to 42,000 jobs gained?
Absolute, pure, undiluted, investment-grade horseshit.
Oh Harper you plastic-haired cheeky rascal.
__________________________________________
Well at least its better than poor old Smoking Mans forcast “I’m going with +14900 jobs Friday..”
2.81 times better to be exact.
Perhaps there was a large increase of the number of horse pooky handlers out there to account for all of these new jobs?

Ha, sold 40 contracts USDCAD @ 1.0932 got out at camel toe 1.0871

Do the math…. So I underestimated my windfall…

Ha….. On my way to the falLS … $$$$$ :)
.

#163 };-) aka Devil's Advocate on 08.15.14 at 11:32 am

People who chose not to buy houses from people like you are not serfs. At least try to appear credible. — Garth

No, not literally… not yet anyway. But, I’m sure we would all agree that there is a widening gap between the haves and the have nots. The wider that gap becomes the more feudal our society becomes and a part of that feudalism is the increasing apparent serfdom of the have nots.

Money is transitory, dirt is forever for without it we have nothing and from it grows all wealth.

#164 Randis on 08.15.14 at 11:33 am

Garth, you and Prof Kesik definitely need bodyguards to protect against realtors and developers and condo salesguys, for revealing more and more ugly truth of the crooked industry of real estate everyday.

#165 Retired Boomer - WI on 08.15.14 at 11:34 am

DIRT has value, always has had value. The LOCATION of said DIRT dictates its present value.

It is the so-called ‘improvements’ on the DIRT that are the most over-priced in some Canadian, and American locales.

Cheap DIRT? Detroit, especially south of 8 mile rd. Cleveland, Buffalo, Milwaukee older city hoods.
Who wants to live / work / farm there? A few…

Expensive DIRT? Suburban Chicago, NYC, Toronto, San Francisco

supply, demand, proximity.

What was that the Realtor said… location, location, location.

What was a good buy a generation ago…. not necessarily now, or a generation from now.

Buy wisely

#166 Crowdedelevatorfartz on 08.15.14 at 11:35 am

@#153 Bottoms up
“Would that not be a fact that applies to long-term solvency?”

Not according to the Auditor General in the previous link I posted……………..

#167 Gregor Samsa on 08.15.14 at 11:36 am

RE: Today’s revised job numbers. Harper will do anything and everything to keep the party going until 2015. If you think Statscan willingly did this revision without any government influence, I have a house to sell you…

Bad economic data will be massaged out of the statistics, going forward. Look for big drops in the labour force participation rate to cover up for this.

#168 Suede on 08.15.14 at 11:38 am

42,000 jobs.

Good call Smokie. Though USDCAD hasn’t sold off 100 pips yet. Maybe it was built in already.

few more months of this in the latter half of the year and we can talk rate hikes in mid 2015.

#169 Hot Albertan Money on 08.15.14 at 11:39 am

Guess I’ll be scratching Toronto off my ‘places to visit’ list…I look terrible in a hard hat

#170 dosouth on 08.15.14 at 11:44 am

Just when you thought you could at least try to almost believe statistics you could research and rely on…..

The Harper government ruins that too. As an investor who now could ever rely on any statistics coming out of StatsCan – except the markets, go figure.

These hyper inflated numbers are not even laughable, just scary manipulation.

#171 };-) aka Devil's Advocate on 08.15.14 at 11:48 am

#158Bobby on 08.15.14 at 11:14 am
For #145 DA,
May I suggest that someone who is stuck paying for a depreciating asset, a condo, is really the one destined to be a serf. I’ll bet all of those who bought into leaky condos with their endless assessments aren’t feeling that good now about their ownership experience.
Or, how about many of the condos I’m looking at in Kelowna. Many are priced well below what the owners originally paid but they still cannot be unloaded. Do you think they feel like feudal landowners or serfs? As the one agent said to me, they just want out.
As you said in one of your endless posts, volumes are up but prices haven’t moved.
Like I have always said, you should get out more. You believe your own hype!

I’m not such a fan of condominiums or anything strata for that matter.

That said there are people who want them for who the concept works. I’ve helped a few clients source out the right condo property this year and I can tell you they are not down in price.

As far as people “just wanting out” of their condo; I’d like to know who for the information I’m getting is many considering selling are holding on to their condos because they expect further price increases between now and the 2015 Spring market. I think they are right and have advised clients to do the same.

Price always follows volumes up or down. “Follows” not leads. Volumes are up dramatically and that will pull prices up. Simple supply and demand. Inventories (supply) are down, demand is up. Simple Econ 101.

As far as my endless posts about volumes and prices how about Garth’s six years worth of predicting that the this is not going to end well. I make no predictions other than that “price follows volume UP or DOWN” which it does as you can see from history and will see in the future. It’s simple science (as much as economics is being more a social science).

#172 Iconoclast on 08.15.14 at 11:50 am

#126 The real Kip

Real Kip has real interesting photos!
I always wondered how they get cranes up and down.

#173 TurnerNation on 08.15.14 at 11:50 am

Why buy when you can hang there. Park Side Drive band lights the lobby lounge up every other week. Pre-drinking is a recommendation, given their prices.
ProTip: best value is a free-pour double of Collingwood whisky for $12. Bowls of crisps – and vapidity – is always free, natch.

#174 45north on 08.15.14 at 11:52 am

Most of these buildings are going to have serious problems in the next ten years

which is a bigger problem than Gross Rent Multiple. If the buildings are fundamentally solid construction, provide high quality of housing for decades then Gross Rent Multiple is a small problem.

And what will the impact be on society? How could something as ubiquitous as glass walls come to impact everybody?

two questions which Ted Kesik answers

the CBC documentary “The Condo Game” pointed out that the Ontario Municipal Board (OMB) has a pivotal role in approving these condos – overruling and frustrating elected Council.

This is a disaster! Since the Second World War, Toronto real estate has been an okay investment. I’m not aware of any large-scale loss. Garth can make the point about a balanced portfolio but overall Toronto real estate has been an okay investment. Large-scale depreciation of condos will be reflected in Toronto society as a whole. When owners refuse to live in their own condos then the whole structure changes. And not in a good way.

#175 45north on 08.15.14 at 11:56 am

the condos should be expropriated right now. Owners will be compensated from sales over the next 20 years.

#176 45north on 08.15.14 at 11:58 am

I meant confiscated not expropriated

#177 Future Expatriate on 08.15.14 at 12:13 pm

And…. all double-paned windows will have to be replaced in ten years too as the seals go worthless. All. Planned obsolescence by the window industry. So much for the smug comments about the “superiority” of ugly lightless warrens, caves, and prisons. Oh, but the “little woman” feels safe.

I’ll gladly take anyone’s glass walled home off their hands… I won’t be around more than 10 years to worry about it. And in the meantime, I die happy and free from SAD and a life under fluorescent lighting.

#178 Condo crash in Toronto on 08.15.14 at 12:17 pm

I won’t touch Toronto’s over valued condo’s unless they crashed by 70% or more to reflect their true value and risk. Cheaply built shoe boxes in the sky proves people with no money will buy anything with no money down creating a monster bubble.

#179 };-) aka Devil's Advocate on 08.15.14 at 12:27 pm

DELETED

#180 Son of Ponzi on 08.15.14 at 12:30 pm

Stats Can checked their numbers.

Turns out, they forgot to count the Temporary Foreign Workers.

#181 Fed-up on 08.15.14 at 12:50 pm

#128 Smoking Man on 08.15.14 at 8:40 am

I love the smell of money in the morning….

I told you dogs, today’s job numbers would be good and to sell USDCAD….

cha ching aling…. Ya….
=================================================

Cha ching/good job numbers my Italian ass. The numbers are just more massaged by Harper propaganda bullshit and anyone with 2 brain cells can figure that out.

This country is proving to be beyond corrupt and pathetic.

#182 Tony on 08.15.14 at 1:01 pm

Best comment I could find for the Canadian jobs report “revision”

Sadly, Stats Canada was once judged to be the most trusted government agency for reporting numbers (worldwide!). They now appear to be, most alarmingly, no better than the kijjiji roaming Harpo minions. Was this a planned error to show the world the kijjiji gaff was no big deal? Were the numbers initially correct and the Agency was directed to rethink assumptions and create a revision?

#183 Sheane Wallace on 08.15.14 at 1:03 pm

More lies

https://ca.finance.yahoo.com/news/corrected-statscan-report-shows-42-000-jobs-created-123537851.html

#184 Inglorious Investor on 08.15.14 at 1:29 pm

#130 Hyundai Driver on 08.15.14 at 9:06 am

“Survivor bias. We only *see* the Roman concrete which lasted 2000 years.”

Point taken. However, keep in mind that had it not been for countless wars, earthquakes, floods, volcanic eruptions, and the actual looting of the ruins to use the materials for new buildings during the Middle Ages, there would be far more Roman structures still in good order today.

Just a few examples:
• Indoor plumbing systems at Pompeii are still functional, though they are not actually used.
• Many Roman roads and bridges throughout Europe are still in use today.
• The Cloaca Maxima, Rome’s main sewer in ancient times, is still functional and in use today.

#185 Financial Freedom at 40 on 08.15.14 at 1:41 pm

— GASP — CHOKE — HACK HACK —

So if DA is recasting his rants as supporting ‘dirt’, then maybe there’s hope for a constructive dialogue after all.

Different plots of land, for different purposes, zoning and development evolving as needs evolve, has been a solid investment over my adult lifetime so far. With careful evaluation, and fortuitously timed moves in & out, I feel confident that may continue. Have recently taken many of my chips off the housing table in a number of areas and categories though, and placed my bets on other things. May bet again, not sure when, many attractive opportunities in other things.

Plan your dirt game, just avoid coastal areas if your going long, as our government ‘stands up for Canadian jobs’ and ignores climate change. Or else wear some knee high waders along with the hat.

#186 };-) aka Devil's Advocate on 08.15.14 at 1:45 pm

Always follow the market, never lead. The very best you can do is be at the very leading edge of the market not ahead of it. She’s an untamable wildcat and will bite you in the face when you least expect it. Enjoy the ride she takes you on. You can’t fight it nor can you disembark.

#187 straight six on 08.15.14 at 2:20 pm

and when they’re all out of warranty..

Coming to HG this fall.. Extreme Highrise Renos!
Episode 1: DIY balcony & window wall replacement.

#188 Bottoms_Up on 08.15.14 at 2:26 pm

#152 Holy Crap Wheres The Tylenol on 08.15.14 at 10:46 am
———————————————–
Why doesn’t someone start a list of developers that have built condos recently that are already dropping glass? That way the informed consumer can boycott them.

#189 Mark on 08.15.14 at 2:29 pm

http://business.financialpost.com/2014/08/14/real-estate-family-finance/

Interesting article. Makes you wonder how many other Canadians are in the same boat, with 100% real estate portfolios, thinking such is going to sustain them in retirement. I personally know a few.

#190 Bigrider on 08.15.14 at 2:39 pm

#142 Italians love real estate

“La terra e sempre la terra”

Yes, I know that primitive, immigrant, ancient type of thinking all too well.

Yes indeed, it has worked out far and beyond what any of them could have possibly imagined in their wildest of dreams.

No way ,no how you going to change the thinking. It dies when all the generations witnessing it, dies.

They turned abject poverty and the dirt under their fingernails, into wealth unimaginable.

#191 The real Kip on 08.15.14 at 2:47 pm

#150 OttawaMike on 08.15.14 at 10:40 am
#126 The real Kip on 08.15.14 at 7:52 am
“Nice photos crane man. I don’t see your harness or lanyard out there on the catwalk though.

MOL will fry you if they see your slide show.”

No need to tie off inside the catwalks. MOL can view as they wish.

#192 Vamanos Pest on 08.15.14 at 3:00 pm

#145 Devil’s Advocate

“So they continue what they have been doing and get the results they should expect.”

You mean the double digit returns my portfolio has been generating for 5 years now?

#193 Holy Crap wheres The Tylenol on 08.15.14 at 3:23 pm

#188 Bottoms_Up on 08.15.14 at 2:26 pm

#152 Holy Crap Wheres The Tylenol on 08.15.14 at 10:46 am
———————————————–
Why doesn’t someone start a list of developers that have built condos recently that are already dropping glass? That way the informed consumer can boycott them.
_____________________________________________

Agree, but I am sure the lineup would be quite long and the developers would line up the lawyers like a start position at a NASCAR event.
P.S. How are you going to get the dumb ones who buy these places to listen to the voice of reason?

#194 Holy Crap wheres The Tylenol on 08.15.14 at 3:29 pm

#162 Smoking Man on 08.15.14 at 11:25 am
#154 Holy Crap Wheres The Tylenol on 08.15.14 at 10:50 am200 jobs gained revised to 42,000 jobs gained?
Absolute, pure, undiluted, investment-grade horseshit.
Oh Harper you plastic-haired cheeky rascal.
__________________________________________
Well at least its better than poor old Smoking Mans forcast “I’m going with +14900 jobs Friday..”
2.81 times better to be exact. Perhaps there was a large increase of the number of horse pooky handlers out there to account for all of these new jobs?

Ha, sold 40 contracts USDCAD @ 1.0932 got out at camel toe 1.0871
Do the math…. So I underestimated my windfall…
Ha….. On my way to the falLS … $$$$$ :)

___________________________________________
Good job Smoking Man. However I never comented on your USDCAD, read slowly my friend, read slowly. Have fun at fails, wherever that is?????? :)

#195 Holy Crap wheres The Tylenol on 08.15.14 at 3:32 pm

Dear Smoking Man, just got it or figured it out. Falls as in The Niagara Falls not Fails!
Geesssh old bean brush up on the native language, you are from here? Are you?

#196 Singaporean Investor on 08.15.14 at 3:34 pm

Don’t be stupid.. Inglorious Investor

It costs money to live, if you hate paying for things just die and burn your body into ashes

#197 Smoking Man on 08.15.14 at 3:45 pm

#195 Holy Crap wheres The Tylenol on 08.15.14 at 3:32 pmGeesssh old bean brush up on the native language, you are from here? Are you?
……

That 100% Garth fault, I wrote, ” going to the falls, (the word used to describe female dogs) was edited out. The great Garth screwed up the edit.

The word should be allowed.. As we are all dogs, and the B word should not be considered offensive.. In dog speak.

#198 GS on 08.15.14 at 3:49 pm

I spotted this interesting drop in sales (Aug 1-7 YoY) in Calgary. If it’s not just an anomaly or outlier, then I’m curious what it says about the state of things:
http://calgaryrealestatereview.com/2014/08/08/august-1-7-2014-calgary-real-estate-market-update/

#199 Inglorious Investor on 08.15.14 at 4:01 pm

196 Singaporean Investor on 08.15.14 at 3:34 pm

“It costs money to live, if you hate paying for things just die and burn your body into ashes”

How can I burn my body into ashes AFTER I’m dead. Is the air up in your condo a bit too thin perhaps?

#200 Inglorious Investor on 08.15.14 at 4:26 pm

#112 Spectacle on 08.15.14 at 12:25 am

Actually concrete may have been used far earlier than the Romans ! If you’d like, Youtube the […] the 30,000 year old Bosnian pyramids”

Yes, there were many types of ‘concrete’ that were used by other civilizations, including the Greeks. However, probably none of them were as good as the high-quality Roman caementicium.

(Perhaps the technology was given to them by ancient aliens––who of course would have used concrete to build advanced structures on their home planet. Wait a minute! Romulus! Could it be?…)

#201 Mark on 08.15.14 at 4:43 pm

“I spotted this interesting drop in sales (Aug 1-7 YoY) in Calgary. If it’s not just an anomaly or outlier, then I’m curious what it says about the state of things:
http://calgaryrealestatereview.com/2014/08/08/august-1-7-2014-calgary-real-estate-market-update/

Great link, I just wanted to say. I’ve been crucified on the various blogs and message boards for saying that Calgary RE, on identical properties, has been in decline for the past year. Yet your numbers prove exactly that.

So much for the RFD trolls who constantly were claiming that the Calgary RE market was on fire (they must not live in Calgary — I do most of the time!). YoY average price actually dropped by $8k, and paying over list is comparatively rare now.

#202 Van Isle Renter on 08.15.14 at 5:27 pm

RE: Concrete as a building material.

The reason Roman concrete structures still stand today is BECAUSE there is no rebar in them. The steel in rebar rusts, expanding in volume approximately 6-10X. This causes the concrete to expand, crack and fall away. Salt makes it far worse. All you need to do is look Montreal’s overpasses strung up with chicken wire to catch bits and pieces to see the effect. Leaky Vancouver condos won’t be far behind.

Romans built with what they had. Luckily for us, they had no rebar.

#203 Tony on 08.15.14 at 5:31 pm

Re: #194 Holy Crap wheres The Tylenol on 08.15.14 at 3:29 pm

Read the comments here:

http://www.theglobeandmail.com/report-on-business/economy/statscan-revised-jobs-report/article20073220/

When the average simpleton knows this was a bogus revision this more or less means Canada is doomed.

#204 robert james on 08.15.14 at 5:52 pm

And now for some Okanagan sleeze.. http://www.castanet.net/edition/news-story-121055-1044-.htm#121055

#205 Doug in London on 08.15.14 at 6:42 pm

@Happy Renting, post #100:
When TSHTF the whole economy will shudder, so even without a real estate noose around your neck you’ll likely still feel some ill effects. Your best bet is to keep your mouth shut and try to blend in with the terminally screwed. No one needs to know that you have money they could (theoretically) borrow.
————————————————————-
True, and also being a renter if the economy really gets that bad I can pack up and leave. To where? On the high speed Highway 402 I can be in The States in just over an hour, more only if traffic is backed up at the Bluewater Bridge. I keep reading here on this blog that the economy is picking up there. I’ll meet new friends there, who aren’t in financial ruin from buying overpriced condos, to invite me to parties.

#206 straight six on 08.15.14 at 7:56 pm

RE madness vs madness.. save-your-money!
You can still get a nice house in the land of kevlar for half the price of a TO condo.

#207 Prairie Girl on 08.15.14 at 11:45 pm

To: Derek R.
THANK-YOU for the GarthFAQ link! What a FANTASTIC job you’ve done! Cheers to you!

#208 nonplused on 08.16.14 at 1:23 am

#11 Happy Renting on 08.15.14 at 6:17 pm
Well… Maybe they swing with each other.

#209 nonplused on 08.16.14 at 1:26 am

#11 Happy Renting on 08.15.14 at 6:17 pm
Well… Maybe they swing with each other.

Well you aren’t number 11 any more. In fact I can’t find you.

Garth, stop editing your comments. If it’s not you, fire that amazon assistant.

#210 Crossbordershopper on 08.16.14 at 7:58 am

Dirt is value.
sure, but why is the dirt over hear worth 100 times what it is over there?, even in Canada, you can buy an acre for 75 bucks in new brunswick. Dirt isnt really worth anything if you think about it. It is about the utility of the dirt to make you money. If the farmer doesnt make any money growing food and selling it he is wasting his time. Taxes are low, its the only thing he knows, 3rd generation etc, but when a developer gives him 2 million for his piece a dirt so others can live in townies on it. He saids to himself thats a lot of corn and sells. Our best farmland in the niagara region is being paved over. more and more every day. Why because in Mexico you can grow stuff far cheaper than here.
Dirt is a cost of doing business, go to where the cheap sweat shops are, bangladesh, india, china, vietnam, cambodia. No environment laws, no labour laws,
Technology changing, companies now are biotech, technology etc, a lot less land needed to have the same utility as 1000 employees in big factories needed in the past.
Southern Ontario is really screwed up, distorted real estate pricing has made us unproductive, overleveraged, not willing to move as much for opportunity. Kids have become their parents, not independent at all. The 50 families, goverment and banks and insurance companies who control Canada will still be ok. Let all the serfs say a prayer for them every day.
In Ferguson Missouri, the cops suppostly shot an unarmed black kid for no reason. And the guy on the subway in Toronto last year had 7 bullets into him for no reason. Why are the cops in Canada the only ones with the guns? restrict competition, canada does it in every other aspect especially business.

#211 Ted1914 on 08.16.14 at 11:10 pm

I see that the lawyer who went through the window in Toronto has his own Wikipedia biography.

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

#212 Happy Renting on 08.17.14 at 12:44 am

#209 nonplused on 08.16.14 at 1:26 am
#11 Happy Renting on 08.15.14 at 6:17 pm
Well… Maybe they swing with each other.

Well you aren’t number 11 any more. In fact I can’t find you.

Garth, stop editing your comments. If it’s not you, fire that amazon assistant.

—-

That #11 comment was made on the post following this one. I’ll admit, I thought it might be over the line, but if one of the rules is not to buy RE with someone you’re not sleeping with, I figured swinging might be that foursome’s excuse for piling into a house together when there are so many glaring pitfalls to that arrangement.

#213 crowdedelevatorfartz on 08.17.14 at 2:05 pm

@#211 Ted1914

Hmmmm, 1993? Wow! Time ‘flies”.
Well, I see Gary Hoy was a Lawyer AND an Engineer.
One wonders two things about his unfortunate(but completely predictable) demise.
1. What exactly DID he learn after years of university?
2. What was he thinking as he fell 23 floors to the pavement?