If I had a million dollars

HIPPIES modified

“My girl and I were casually making dinner,” says Matt, “listening to the CBC when the Barenakeladies ‘If I had a Million Dollars’ came on the radio and my girlfriend said ‘If I had a million dollars I could almost afford to buy a house.’ And when I laughed she got mad. Because she was serious, like seriously distraught.”

Obviously Matt has a death wish. He continues:

“I think if she could she would spend a million dollars on a house and be happy about it no matter where the markets go. Market forces are nothing when compared to the nesting instinct. There is too much emotion involved, it’s so much more than an investment, and the people selling houses know it. But for some reason they are allowed to push these emotionally dominating expensive boxes on us without a worry about all the debt we assume in the process. It would be like if drug addicts were investing in crack. Guess what?! They are going to buy, and the price doesn’t matter. Everything is too expensive because most people don’t really care about finance relative to what they want. Before she says yes to the dress, I have to say yes to the debt.”

Matt gets it. Real estate is Canada’s official religion, at least in those big cities where houses still trade at nosebleed levels. Politicians, the media, economists, the banks, your mom and (natch) the realtors all think it’s a cool thing when prices go up. Every real estate board report with bloated numbers is called positive news. When prices fall, it’s a disaster. What a fail.

BBoomers When you think about it, swelling houses most hurt the very people who keep the market alive – first-time buyers (now 49% of all sales). They hurt move-up families who need bigger homes and must assume more debt. They benefit only the people cashing out to downsize or rent. In other words, this is the country’s biggest-ever transfer of wealth. The Boomers (at least the smart ones) get the money. They kids get the debt. Plus all the risk.

A few days go the IMF got into the act, saying Canada’s housing market may have a soft landing, but only if the feds tighten the rules and if the nation can avoid an external shock. Of course, it’s too late. Given a federal election in less than a year, the guys in government lack the political will to act, while the opposition members are busy diddling each other. Sigh. And the external shocks are materializing – the collapse in oil revenues, plus the coming US rate increases.

Surely Matt’s GF can see that. If she looked. But like most people, she’s not.

One of the nastier boom-and-bust housing episodes took place in California, where dumbass politicians let the economy become far too real estate-dependent (but not as much as ours now is). When property values sank from inflated highs, so did state revenues. Bankruptcy loomed for a region with roughly as many citizens as Canada, and an economy to match.

Writing in the LA Times a few days ago, Michael Kingsley said a house is worth only what someone will pay for it. “That number has two components: one is the value of occupancy — that is, the privilege of living in the house, mowing the lawn, calling the plumber and so on. This should roughly equal what the house would rent for. The other component is the investment value — how much you think the price of the house will go up when you sell it.

  “Any investment value greater than zero (or zero plus inflation) is suspicious because it depends on the greater-fool theory. There is no physical reason why a house should become more valuable at all. It is not growing like a crop. It is not producing anything that you can turn around and sell, like a factory. It just sits there. It becomes more valuable because people believe that it will become more valuable. Worse, since the general assumption that it will become more valuable is already reflected in the price you paid, you need a buyer who believes that it will become more valuable even faster than the general consensus.”

Greater fool. Exactly. This has been my caution for several yers now, as people in 416 or Van or (more recently) Calgary pay ever-inflating prices for the same property based on the assumption it has inherent value and future buyers will shell out even more. It’s rank speculation. Like the idiots buying stock in a profitless Internet company, basing the inflated price on the belief the next guy will be hornier than you.

Doubt me? Then ask yourself: would you pay what you believe your house is worth today?

But you expect someone else to. And that’s the greater fool trap.

The big losers in the correction to come will be those who entered the market recently, who paid the most, put the largest amount of capital at risk, or assumed the fattest debt. They can only come out of this intact if they decide to sell before this event, and find that greater fool. Since our economy was wobbly and house-centric even before oil fell into the ditch and interest rates restore, there’s no reason to believe real estate will continue to ascend.

Matt’s babe may not get this. In a heartbeat she’d trade a mill for a house.

She’s the normal one. So, get ready.

227 comments ↓

#1 Grantmi on 11.30.14 at 1:40 pm

Not first. Stealing it back from all the First Idiot posters.

#2 Chris Derry on 11.30.14 at 1:47 pm

I think the biggest factor that has pushed housing prices higher by at least 100% in the last 20 years is the big drop in 5 year fixed rate mortgage, variable rates from 11%, 10%, 9% to 2.5% to 3.00% and the Bank of Canada, U.S. Federal Reserve cutting rates from 7%+ levels to 0.25% to 1.00%.

If this did not happen, in my opinion Canadian and U.S. housing would be hundreds of thousands of dollars cheaper.

For example, $800,000 houses in Toronto would be probably worth $450,000 to $500,000 and $500,000 houses would be worth $250,000 to $300,000.

Governments did help with RRSP rules and housing incentives but it is not the major factor that inflated Canadian and U.S housing prices.

#3 Mike in the OK on 11.30.14 at 2:01 pm

It will be interesting to watch the Calgary RE over the next quarter. I’m wondering if it will trigger a domino effect.

I’d love to own rentals but the numbers suck in Kelowna and Cowtown.

#4 Robert Agnew on 11.30.14 at 2:04 pm

The economy will drag along until at most 2024 – low interest rates have created a series of uncontrollable asset bubbles with the danger of Japanese style deflation. We are due for another crash – if the interest rate lever is permanently broke the central bankers have no way means to adjust the market – 1929 and 2008 will be a walk in the park – the next picnic will be a riot.

There is no reason for a crash, nor will central bankers allow it to occur. But the wealth disparity will probably increase along with interest rates. — Garth

#5 Derek R on 11.30.14 at 2:05 pm

Grant, Grant…

The idea is to do it without saying it.

#6 Rosholt on 11.30.14 at 2:10 pm

I asked an Arabian friend if Saudi needs $75 oil to sustain their spending. His reply:

“I think it’s $65”

There!

Is he an oil guy? Or a barista? — Garth

#7 Dominoes Lining Up on 11.30.14 at 2:34 pm

It’s always interesting to learn from places where all the emotions have dried up and real estate plummets with nothing to sustain it. We were pretty close to that after 1990 in Canada, with values dropping in ways that did not recover (nominally) until around 2005. The upcoming correction, whether it is a crash or just a severe and prolonged flatline with mounting losses due to inflation, will be much worse than the 1990s, in part due to the intergenerational impoverishment that Garth refers to and the length of this last bubble.

I remember around 2000 seeing properties for sale in Tumbler Ridge, B.C. The mining had collapsed, and you could get an apartment or townhouse for $10K or a nice bungalow for about $30K, formerly costing at least 10X as much. Tumbler Ridge recovered somewhat, but is now going through more layoffs in a new down cycle.

Now – look at this news about house price inflation (and probably a coming collapse) in Labrador:

http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/wabush-woes-labrador-mining-town-reels-from-a-china-slowdown/article21836552/

“At one point, Labrador West came to be known as Fort McMurray East, taking a cue from the Alberta boom town. Local hotels were perpetually booked and grocery stores could barely keep their shelves stocked.

As workers and opportunity seekers flooded in, housing got scarce. Duplexes that cost $25,000 in 2000 were going for more than $500,000. ”

…..and this seems oddly foretelling…..

“The community grew so fast, local officials travelled to Alberta to get tips from people in Fort McMurray on how to cope with rapid growth.”

“The once frantic housing market has softened with vacancy rates climbing. Landlords are cutting rent to entice tenants to stay and the average home price has dropped about 15 per cent since the boom times. A three-bedroom house that went for $450,000 in the heyday can now be bought for just under $400,000. But most aren’t selling, meaning prices are likely to fall farther. Residents talk about how families took on hefty mortgages to buy half-a-million-dollar homes and they will now be stuck with a property worth less than what is owed.”

Fort McMurray, Calgary – look east. Is this your future too?

#8 Grantmi on 11.30.14 at 2:41 pm

#5 Derek R on 11.30.14 at 2:05 pm

Grant, Grant…

The idea is to do it without saying it.

Yes! Yes! I know.

But the Firsters are so thick… you have to yell at them loud enough so they can hear it! lol

#9 Role on 11.30.14 at 2:46 pm

Matt do good. Matt find most of best learning forever to may be and possibly fine best and greatest place to have family. Big small little house all is good best and forced will be selling for most more of what other people,, even red coats think best monies wise will be! Gone days whem find only one house for two family. Sometime you gotta find best time buying AND sell!! Good on ya!!

That hurt my eyes. — Garth

#10 Nicolas on 11.30.14 at 2:47 pm

News from Montreal : exactly 0% of the population thinks real estate is a bad investment. Renting is silently regarded as dumb and immature. Talked about that over beers with friends last night. They’re not pushing me to buy, at least not openly, like they would if this was Vancouver. But nevertheless the general concensus is the same.

#11 VanDammeCouver on 11.30.14 at 2:49 pm

I never doubted your call on the housing market, to me I was convinced of your premise for a real estate correction since I started reading this pathetic blog about two years ago. It seems the timing of your call was off by a few years, but I don’t think it was your fault.

If you ask me, it seems like the government is responsible for meddling in home values and that they’ve delayed a much needed correction for years, hence the reason why this correction has been delayed by several years.

Does that make sense?

#12 Roman on 11.30.14 at 2:52 pm

Oil is in 60 handle and houses in Toronto still sold for a million. Amazing.

Interesting how stock market reacts: rates down across curve, commodities in the ditch, small cups -1.5%, oil -10% in couple of days, volatility indicators is firm into weekend… No Problem. Stocks go up.

Mania phase, anybody?

#13 Derek R on 11.30.14 at 2:52 pm

Well said, Garth. High house prices are definitely a Bad Thing. We should be looking at ways of stopping them from rising. One good way I’ve seen mentioned is to only allow the banks to lend some multiple of the annual rent that the house could earn instead of some multiple of the house-buyer’s annual wages. That should take the “investment value” out of the equation.

#14 takla on 11.30.14 at 2:55 pm

18% interest on a fixed 30 yr mortgage in the early 80’s.Oil glut followed by reduced world consumption crashed oil prices
Inflation was rampant{think current housing prices} the gov had to do something hense the amost 20% home mortgage.They say history repeats….your thoughts garth,are we repeating ?

#15 Mister Obvious on 11.30.14 at 2:57 pm

I’ve never quite understood the soft landing analogy. Is it something like this?…

A plane aloft is in trouble so it sets down gently on a nearby cloud. The pilot gets out and makes a few critical engine adjustments. After a short period the plane takes off destined for even higher clouds.

Or, is it more like this?…

A plane aloft is in trouble but thanks to the competence of the pilot it is able to return to the land elevation from which it started without experiencing a life crushing deceleration, otherwise known as a ‘crash’.

Scenario 1 is possible only in a cartoon. Scenario 2 is possible in reality but when that analogy is impressed upon the world of finance, the passengers are no better off than if there had been a crash.

If you buy at vastly inflated prices because ‘values always rise’, the prospect of a ‘soft landing’ (the realistic type) does not mitigate your ultimate pain.

Whether your sliver of equity evaporates over a period of several years or vanishes overnight in a puff of steam is of no consequence in the long run.

The term ‘soft landing’ is at best useless and at worst fraudulently misleading.

#16 Ole Doberman on 11.30.14 at 3:01 pm

Calgary is toast, the Germans are making gasoline out of…….water! Here have a read:

http://armstrongeconomics.com/2014/11/30/making-gasoline-from-water-yep/

Oil prices will be heading to $40 soon.

#17 Millenial on 11.30.14 at 3:15 pm

Hey Garth,

9 Barton Road in the Annex, 1 block northeast of Bathurst and Bloor, just sold for over 2 million dollars. Nice layout, surprisingly open feel, fronts onto a parkette, pretty good area. But, it’s semi-detached, has a parking pad out front (no garage), and absolutely zero privacy in the backyard. We’re screwed, seriously. TWO MILLION DOLLARS?

#18 Vancouver right? on 11.30.14 at 3:23 pm

Houses have value because they are shelter , land has value because you can’t create more if it. People need a place to live,the more people that want to live in an area the higher the price of the house. Vancouver has no more land to build on. There’s no where Togo, mountains ocean, border and an ALR. 40000 people move to van proper every year. It’s not greater fool theory it’s supply and demand

#19 80'sKid on 11.30.14 at 3:30 pm

“In other words, this is the country’s biggest-ever transfer of wealth. The Boomers (at least the smart ones) get the money. They kids get the debt. Plus all the risk.”

Yet according to boomers, millennial’s are extremely entitled and wan’t it all right now. We don’t want it all, just a roof and walls for a sane price.

#20 Rosholt on 11.30.14 at 3:43 pm

Is there anyone here old enough to relate what is going on with oil today to a similar situation in previous decades?

What dropped oil to under $50 before? And why did it shoot up to $120+ after that?

It can’t be a supply issue is it because I’ve read articles saying there’s enough oil for centuries to come.

#21 Tinfoil Hats on 11.30.14 at 3:47 pm

I have to laugh at all you Energy Economics Pros on here, especially #16. Was the Infowars.com server down?

Suncor’s All In Sustaining cash costs are roughly 35 to 40 dollars per bbl. Production is not getting cut, if anything it will increase. Exploration will be cut, which means there will be a supply crunch in a few years. If you are an exploration geologist i’d be worried. If you’re an equipment operator, you don’t need to hit the panic button quite yet.

I don’t think you’re going to see a major correction in Canadian housing any time soon, although I don’t see much growth either. If you’ve got any spare cash kicking around invest it in producing miners or oil cos that can easily weather this storm.

http://www.suncor.com/pdf/5422568_Suncor_English_Q2_2014_Report.pdf

#22 Entrepreneur on 11.30.14 at 4:20 pm

Houses should depreciate in value with age and “find a greater fool” to buy at high price seems to me like mean almost like the devil.

The basics needs of people are left behind (as we can see increases in living expenses, child poverty, the homeless, etc.). Once we leave that basic need we have a system that will crumble just like a house with a weak foundation.

Had an excellent teacher that said that to be a great leader one has to speak what you believe is the right path even if others do not. He also said most people are sheep.

#23 The Man on 11.30.14 at 4:27 pm

Now the ReMax serpent was more crafty than any of the wild animals. He said to the woman, “Did the Garth really say, ‘You must not eat from the homeownership tree in the garden’?”

The woman said to the serpent, “We may eat from the rental trees in the garden, but the Garth did say, ‘You must not eat from the homeownership tree that is in the middle of the garden, and you must not touch it, or you will be indebted.’”

“You will not certainly be indebted,” the Remax serpent said to the woman. “For the Garth knows that when you eat from it your eyes will be opened, and you will be like the Garth, knowing granite counter tops and stainless steel appliances.”

When the woman saw that the fruit of the homeownership tree was good for entertaining and in-law visits, and also desirable for gaining stature, she took some and ate it. She also gave some to her husband, who was with her, and he ate it. Then the eyes of both of them were opened, and they realized they were indebted; and could now only sew fig leaves together to make coverings for themselves, and not save for retirement.

Then the man and his wife heard the sound of the Garth as he was walking in the garden in the cool of the day, and they hid from the Garth among the trees of the garden. But the Garth called to the man, “Where are you?”

He answered, “I heard you in the garden, and I was afraid because I was indebted; so I hid.” And he said, “Who told you that you were indebted? Have you eaten from the homeownership tree that I commanded you not to eat from?”

The man said, “The woman you put here with me—she gave me some fruit from the homeownership tree, and I ate it.” Then the Garth said to the woman, “What is this you have done? The woman said, “The Remax serpent deceived me, and I ate.”

And the Garth said, “The man has now become like one of the indebted, knowing zero down and forty years. He must not be allowed to reach out his hand and take also from the tree of life and eat, live and retire early”

#24 Herf on 11.30.14 at 4:40 pm

“Before she says yes to the dress, I have to say yes to the debt.”

Matt, consider the following words of wisdom spoken to my oldest brother’s (presumably all male) class of RCMP recruits during basic training in Regina back in the 50’s: (I’ll paraphrase – the drill sergeant used another word for male anatomy):

‘Use your ding-dong for a compass and you’ll really lose your sense of direction.’

Words to live by. Wise brother and wise drill sergeant.

#25 Mr. Frugal on 11.30.14 at 4:41 pm

Run Matt run!!!

#26 JimH on 11.30.14 at 4:49 pm

#15 Mister Obvious
You make a very valid point!
It seems to me that valuations “correct” in various ways:
1. Through price
2. Through time

Is a correction that is accomplished 10% through price and 90% through time a “soft landing”?

Is a correction that is composed 40% through price and 60% through time a “hard landing”?

Is a tooth extraction “hard” when accomplished in 30 seconds and “soft” when it takes an hour?

You’re right; “soft landing” is a rather useless and misleading term.

#27 Leaving Cowtown on 11.30.14 at 5:03 pm

Our home on the south side of Calgary got its offer the day before the oil price drop.

We were debating with ourselves whether to renegotiate in sympathy if the buyers were hesitant but our broker says they are true believers, not to worry, and even though we signed after oil hit the fan things are fine, they even gave us our desired closing date so we can spend Christmas and New Years at home which we will love. We’ll take a long vacation with inlaws in Hawaii then settle somewhere east, still not sure, by March.

Its hard to say ‘thank you greater fools, since the buyers are so gung ho on things, even told our realtor we were lowballing some other houses they had looked at.

Oh, and our realtor told us, he’s closing up shop in 2015, moving to Toronto to take some classes. Apparently he has been renting for two years himself.

#28 stop lying on 11.30.14 at 5:11 pm

The first half of next year should still be up in Toronto and Vancouver, people will want to lock into good rates before they go up.

After that who knows, could be the beginning of a downward trend.

#29 Tom from Mississauga on 11.30.14 at 5:22 pm

OPEC needs blah, blah, blah price for oil. Who cares!

What price does Canada need to keep oil by rail from disappearing completely or to maintain equalization payments? When will the media ask questions that actually matter again?

#30 waiting on the westcoast on 11.30.14 at 5:28 pm

#2 Chris Derry & #11 VanDammeCouver – re: gov’t created housing mess…

While the government had involvement through programs and interest rate guidance, it is still the consumer who preferred to view their debt as the monthly payment (ability to service it) rather than whether it made economic sense to take it on.

I looked at rents relative to housing value and concluded that it was too expensive for a number of years. It has surprised me that it could keep going higher and higher but it did. If I was a trader and was investing in the market on a momentum play that would be one thing. But for the average Canadian, this balloon will be the unwinding of a lot of false wealth and will hinder the economy for a long while.

I think we need to blame ourselves far more than the government. At the end of the day, it is everyone’s individual responsibility for making good decisions that matter.

#31 waiting on the westcoast on 11.30.14 at 5:43 pm

#18 Vancouver, right? It’s supply and demand…

If that is the case rents should be on par. The fact that they are not shows the market is overvalued.

#32 Happy Renting on 11.30.14 at 5:47 pm

Matt, even in this day and age a million bucks is a lot of money. Can you paint a picture that your girlfriend will understand? If you invested the million in Garth’s balanced and diversified portfolio, with an average 7% annual return, theoretically you could withdraw 3.5% a year (reinvest the other half to keep pace with inflation), and with the $35,000 a year you could live inexpensively in Canada or backpack the world. You could nap until noon, then watch the office drones drag themselves back to the office after lunch while you sun yourselves on a park bench and relax all day (or on a beach somewhere in the world.) EVERY DAY. Does your girlfriend hate her job yet? A million bucks buys you a lot of freedom.

(Obviously if you were to implement something like this you’d probably want more money if you were to never work another day in your life… But with a million you could afford to do something fun that pays a meagre wage versus something soul-crushing but pays more.)

You mentioned your girlfriend saying yes to the dress. My advice to all guys is to marry a woman who is happy to have an inexpensive wedding, despite being able to afford more. Yellow flag if she wants to spend a lot of your savings on that one day. Red flag if she wants to go into debt for it.

#33 Renter's Revenge! on 11.30.14 at 5:52 pm

@23 The Man:

I think I just had a religious experience reading that!

#34 Retired Boomer - WI on 11.30.14 at 5:58 pm

“Before she says yes to the dress…. I have to say yes to the debt.

Well, Matt, at least we know her price.
Seriously, Matt run, Matt, RUN!!!

A million dollar home will never be satisfactory to this one.
Rent, don’t buy. That advice fits both a place to live, as well as someone to live with.

#35 Jimmy on 11.30.14 at 5:58 pm

Grantme is fuuuurrrst!

Our new leader :)

Hail Grantme.

#36 Mr. Frugal on 11.30.14 at 6:04 pm

#20 Rosholt on 11.30.14 at 3:43 pm
Is there anyone here old enough to relate what is going on with oil today to a similar situation in previous decades?

What dropped oil to under $50 before? And why did it shoot up to $120+ after that?

It can’t be a supply issue is it because I’ve read articles saying there’s enough oil for centuries to come.

———————————————————————————

My bet is that the price of oil is being manipulated by the futures market and the U.S. hedge funds in particular. Earlier this year, they thought that the supply would be interrupted by the situation with Russia or ISIS. So, they were buying up oil futures like crazy. There was no interruption in the supply. So, oil prices started dropping. Then these same guys started shorting oil like crazy. I can’t believe that the supply of oil has changed enough to drive prices to $120 and back to $60. That’s absurd. At some point the price will reflect reality. In the mean time, we are all at the mercy of the Wall Street casino.

#37 Doug in London on 11.30.14 at 6:17 pm

“Before she says yes to the dress, I have to say yes to the debt.”
————————————————————–
It looks to me like Matt should say forget it and they part company, unless he really has a death wish or is a masochist. Buying in todays environment, especially for young people, is financial suicide unless you are buying in a much cheaper place like Windsor.

#38 Ronaldo on 11.30.14 at 6:20 pm

#18 Vancouver right? on 11.30.14 at 3:23 pm

”Houses have value because they are shelter , land has value because you can’t create more if it.”

These guys found a way to create it.

http://www.youtube.com/watch?v=x9efqubjHSQ

#39 RealistvsExtremist on 11.30.14 at 6:39 pm

Still paying 40% more for gas than across the line in Vancouver. Aint low oil prices great !! Oh wait…..

#40 Freedom First on 11.30.14 at 6:43 pm

Perfectly stated Garth. Poor Matt. But don’t anyone get me wrong, as I know couples where the shoe is on the other foot and it is the man that is house horny to the nth degree. I say nothing face to face with any 1 asset worshipers any more, as, if I do not have to argue with insanity in my own mind, why on earth would I argue with insanity coming from someone elses mind? Their minds are un-balanced. No exception. Balance, Liquidity, Diversity and being debt free, with cash, cash flow and income streams works for me. Been working for decades. No buts. No excuses. No exception. I never aimed for being neither rich, nor bankrupted and possibly living in poverty, or working until my last dying breath. However, I am very very content how things have worked out for me and I feel truly blessed. As always, my freedom first.

#41 ozy - Save the talk after the fact on 11.30.14 at 6:51 pm

Save the talk after the fact. Why you need to preach a disaster like EVERYDAY? Why not preach once a year, then 10 years later, say: I told you so!!!

Morals: Talk is CHEAP. Houses are EXPENSIVE. :)

#42 RealistvsExtremist on 11.30.14 at 6:51 pm

Suncor’s All In Sustaining cash costs are roughly 35 to 40 dollars per bbl. Production is not getting cut, if anything it will increase. Exploration will be cut, which means there will be a supply crunch in a few years. If you are an exploration geologist i’d be worried. If you’re an equipment operator, you don’t need to hit the panic button quite yet.
++++++++++++++++++++++++++++++

So explain this “supply crunch” when in a few years every car is averaging 50 mpg? Gas prices are either manipulated, taxed to death or both (Canada). The price is kept up for profit and tax revenue. Because they know that “in a few years” they will not be making the kind of money they used to on 10 mpg.

#43 ozy - to #32 Happy Renting on 11.30.14 at 6:54 pm

AMIGO, A RED FLAG IS THAT YOU ARE THINKING OF MARRYING A WOMAN! hahaha

Why not keep them as GFs and upgrade every JUNE!!! hahaha, maaaan, you didn’t think of this?

#32 Happy Renting on 11.30.14 at 5:47 pm
Matt, even in this day and age a million bucks is a lot of money. Can you paint a picture that your girlfriend will understand? If you invested the million in Garth’s balanced and diversified portfolio, with an average 7% annual return, theoretically you could withdraw 3.5% a year (reinvest the other half to keep pace with inflation), and with the $35,000 a year you could live inexpensively in Canada or backpack the world. You could nap until noon, then watch the office drones drag themselves back to the office after lunch while you sun yourselves on a park bench and relax all day (or on a beach somewhere in the world.) EVERY DAY. Does your girlfriend hate her job yet? A million bucks buys you a lot of freedom.

(Obviously if you were to implement something like this you’d probably want more money if you were to never work another day in your life… But with a million you could afford to do something fun that pays a meagre wage versus something soul-crushing but pays more.)

You mentioned your girlfriend saying yes to the dress. My advice to all guys is to marry a woman who is happy to have an inexpensive wedding, despite being able to afford more. Yellow flag if she wants to spend a lot of your savings on that one day. Red flag if she wants to go into debt for it.

#44 Van Isle Renter on 11.30.14 at 7:12 pm

GT says: “Doubt me? Then ask yourself: would you pay what you believe your house is worth today?”

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

That’s only part of the issue….. the greater question is :

“Would you be able to afford to buy your house today and still have the same lifestyle you presently enjoy??”

My guess is that 99% would say…. NO!.

BiG Red Flag!!!!!

#45 Faithful Reader on 11.30.14 at 7:19 pm

Thought this was interesting

http://www.kijiji.ca/v-house-for-sale/markham-york-region/will-you-sell-us-your-home-for-half-price/1036226020?enableSearchNavigationFlag=true

#46 Karl hungus on 11.30.14 at 7:21 pm

Loading up on Edmonton real estate.

#47 Londoner on 11.30.14 at 7:21 pm

“There is no physical reason why a house should become more valuable at all.”

Is this guy serious?

Properties in urban areas increase in value relative to jobs, salaries, proximity to work/services, supply & demand. Either that or every person living in any city in the world is wrong.

#48 epr on 11.30.14 at 7:24 pm

Well got beaten to on the Labrador West article in Saturday’s Globe and Mail. There appears not to be any mention of this in any Atlantic Canadian media. My employer who supplies to a mining contactor likely has been hit with a 2 million a year decrease in revenue as a result.

#49 Suburbanguy on 11.30.14 at 7:49 pm

Garth,
You said the P/E ratio of U.S stocks was not in nosebleed territory. –Only 19.
By the only proper measurement of the P/E ratio, the Shiller cyclically adjusted P/E ratio, it is currently at 27.15 and has only been higher during the tech boom of 2000 and Black Tuesday in 1929. It was at about the same level in late 2008.
Even at the depths of the crash in 2009, it was not as low as it had been during previous corrections.

http://www.multpl.com/shiller-pe/

#50 The Real Estate Agent on 11.30.14 at 7:53 pm

Oil hitting $64 tonight – Garth is been right about everything except real estate – LOL!

Don’t you see Garth the Harper government let you go cause flooding Canada with foreign money was all part of the master plan once RE aided the 2008 recovery.

Immigration and rich HAM will keep a floor under the RE market! Genius that Harper, genius I tell ya. It’s why they don’t provide numbers on that.

#51 Carly in Cabbagetown on 11.30.14 at 7:53 pm

Garth, you can be forgiven for pointing out once again the tendency of some younger women to yearn for houses. We have all known women like that. But have you been noticing what older women are doing and talking about and how that may be very disruptive of the housing status quo? Some really interesting things are happening!

First some background. I have worked for years in agencies as well on boards and community groups providing services and connections among urban women and their families in Toronto and Montreal and Vancouver. I feel very plugged in to the realities of these women, mostly aged 50-70.

Question:

If 20 and 30-something women are, as you suggest, besotted with getting a house, what do you think their older sisters, aunts and mothers, often divorced, separated and widowed, are often talking about?

Answer:

Alternative housing, group living and getting out of the current real estate market – forever.

Two of the centres I am involved with have just had housing strategy and discussion groups start up since August just to share ideas and help women make plans together. This is growing across the country. Women in their 50s up and also younger who are alone, maybe with kids, know the economic and social challenges they will face and many are starting to look at alternatives now.

This is quite separate from the whole idea of intentional communities, communes and ecovillages etc…, though it may join up in some areas in the future. This is a new cohort of women (there are some men and by no means would this idea exclude men or couples) looking to get out of the housing rat race and enjoy life with friends close by, but never too close to restrict your privacy.

These women are driven by the cost and loneliness of urban life where on most streets people in Toronto know almost nothing of their neighbours, and if they live in a condo it is even lonelier.

Clear directions? It is early, but there are strong trends of many women looking to establish group housing (with private quarters) in downtown areas and in the country or small rural communities. No one wants to be in the suburbs from what I hear but that too could change if people there want to. (You can already see multigenerational suburban homes in places like Brampton, so there is a precedent for bigger living arrangements)

What might this mean? Right now Statscan shows that up to about 31.5% of senior women over 65 live alone. Women know and expect this and they don’t necessarily want this, nor do they all want to find a (new) partner though that is always possible.

http://www12.statcan.gc.ca/census-recensement/2011/as-sa/98-312-x/98-312-x2011003_4-eng.pdf

Not everyone will do this, of course. But group living and collective housing has a lot of attractions for women 50+, even younger if they have sole custody and care of kids.

Some think this type of opting out of conventional housing has the potential to take away 5-10% of the housing buyer’s market in the years ahead, perhaps more if frustrated millennials start to follow suit.

You correctly point out, Garth, that many baby boomers will be forced to liquidate real estate to survive. That number could be substantially bigger when you consider others simply choosing to dump a house and live in one of these arrangements. Add to this the other younger people frustrated with lousy job prospects and impossible real estate prices, and I think quite a few will simply say “why not?” In a cohousing arrangement, if you lose your job or get sick and cannot work, you don’t automatically put your shelter in jeopardy. In an uncertain economy, this alone can be very attractive.

As you point out so well, it is not the real asset you own, but how you spend your time that matters in this life. We have so well barred the doors to entry in housing for the younger generations (like your cartoon suggests) that many will rightly say no to all that, choosing instead a quality of life and more community.

This may only nibble around the edges of our housing reality, I agree ……for now.

But it could really contribute to taking the steam out of the market, especially if it drops only slowly. Certain areas will become even more attractive to live in, while typical suburbs may hollow out more dramatically. Many more boomers than expected may be dumping their existing properties.

There has been lots of media and news/discussion on this kind of idea.

http://www.thebarrieexaminer.com/2013/01/07/new-concept-in-works-to-provide-housing-for-seniors

http://www.cbc.ca/thesundayedition/shows/2013/08/11/baba-yaga/

http://www.cohousing.ca/

http://canadianseniorcohousing.com/?page_id=743

http://www.planetfriendly.net/community.html

http://www.wholevillage.org/

http://torontoecohousingcommunity.ca/

And here’s an interesting video talk, from Vancouver, about what co-housing can mean and why it is so appealing to many.

https://cityhallwatch.wordpress.com/2012/12/03/cohousing-lecture-by-architect-charles-durrett-nov-19-2012/

Garth, this has some potential to be a change-making, even disruptive force in our housing market across Canada. We suggest you keep it on your radar.

#52 Tinfoil Hats on 11.30.14 at 7:59 pm

#42: A supply crunch happens when reserves and inventories dwindle and the explorers haven’t replaced the stuff they’ve mined or pumped out of the ground. Prius driving hippies don’t even factor into this equation.

#53 bdy sktrn on 11.30.14 at 8:23 pm

boards and community groups providing services and connections among urban women
—————————-
ah, i don’t think these types were ever driving any type of RE market. most buyers are not needing ‘community services’

don’t forget the golden rule about sleeping with co-owners.

they will not be missed, or have any impact at all.

#54 bdy sktrn on 11.30.14 at 8:23 pm

and gooooooooooo ticats – looking bad so far!

#55 bdy sktrn on 11.30.14 at 8:25 pm

Total yards through one qtr ;Calgary, 106, Hamilton, 4.

ouch

#56 Smoking Man on 11.30.14 at 8:28 pm

Commoditys getting crushed on the futers market… Ouch for Cowtown..

Who cares about football…

#57 Grantmi on 11.30.14 at 8:40 pm

Holy Snikies… The Swiss reject Gold Standard Referendum.

Gold plunging $38.00 over seas.

The outcome was never in doubt. Gold is dead money. — Garth

#58 Sockeyemoon on 11.30.14 at 8:41 pm

I grew up in West Point Grey near UBC. I remember some of my classmates were kids of fisherman, bakers. My grade three teacher lived down from our school within walking distance.
Any house in that area near Jericho is at least two million. The average teacher makes less than 70k / yr. To purchase a home near the school would take somewhere near 30 X annual income.

So how does this work? In the future all teachers will have to commute from Abbotsford. What about that nice lady at the bank? She will need to live about an hour and half from where she is lending all that money to all the uber wealthy who want to buy these places.

Simply not sustainable.

#59 Frustrated Kiwi on 11.30.14 at 8:41 pm

Local news site has a commentator PROVING that buying beats renting:
http://www.interest.co.nz/property/73140/accountant-matthew-gilligan-challenges-idea-residential-property-ownership-not-good-l
Of course, he’s using capital growth rates of 7.5%–9% “which have been valid long terms trends in Auckland for at least 30 years” – so of course we can expect them to continue. Move along, nothing to see here.

#60 Van Isle Renter on 11.30.14 at 8:51 pm

#47 Londoner on 11.30.14 at 7:21 pm
“There is no physical reason why a house should become more valuable at all.”

Is this guy serious?

Properties in urban areas increase in value relative to jobs, salaries, proximity to work/services, supply & demand. Either that or every person living in any city in the world is wrong.

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

Two words for you:

DEEE TROIT

#61 Carly in Cabbagetown on 11.30.14 at 8:52 pm

#53 bdy sktrn

boards and community groups providing services and connections among urban women
—————————-
ah, i don’t think these types were ever driving any type of RE market. most buyers are not needing ‘community services’

——————————————————————

You might want to revisit your comments. Some of the women’s and community groups I refer to are based in neighbourhoods where house prices average over one million, and many of the board members are advocates for alternative housing are from very wealthy and well connected families, connected to private schools and social clubs across the city.

(It would be funny and ironic if perhaps the truth is that some young women pressure their partners to get into housing, while it is crotchety older dudes who pressure their partners to stay in those old shacks too long to preserve their ‘independence’ – read isolation – when cohousing options provide much more community engagement at a lower price, are better than retirement homes, and even provide something that can be inherited later by the kids)

#62 economictsunami on 11.30.14 at 8:56 pm

Some possible outcomes from falli ng oil prices:

The petrodollar jet stream has petered out: http://tgam.ca/EGac

Cheap Oil A Boon For The Economy? Think Again:

http://www.theautomaticearth.com/cheap-oil-a-boon-for-the-economy-think-again/
The veneer on the ‘recovery’ narrative is wearing rather thin.
Student loans, cars, Tech and the oil industry, along with equities (and until recently) commodities had outsized benefits from the Fed’s QE programs.

Sure their might be residual consumption spill over from gas prices but again, nothing sustainably lasting…

Post-Thanksgiving Spending Tumbles 11% as Shoppers Stay Home:

http://www.bloomberg.com/news/2014-11-30/u-s-consumers-reduce-spending-by-11-over-thanksgiving-weekend.html

#63 Mark on 11.30.14 at 8:56 pm

“Suncor’s All In Sustaining cash costs are roughly 35 to 40 dollars per bbl. Production is not getting cut, if anything it will increase. “

You’re right. Suncor will continue to produce as much as they can, as will all the other oilsands producers. However, most of the “cost” of the oilsands is up-front, ie: in the capital intensive facilities that are needed to make a project happen. And without sustained $100/barrel oil, very few, if any of the projects will get the go-ahead. Not unless labour rates and other expenses are pushed down dramatically.

The relatively few people required for production from existing facilities is nothing compared to the armies of camp workers, design engineers, procurement people, etc., needed to get a new project off the ground and to the point where it can produce even the first barrel of oil.

Most of the facts appear to point to a slowing worldwide economy, not anything happening on the supply side of oil, as being the cause of the recent price drops. Claims of US energy independence are extremely exaggerated (they still import 8-10 million barrels per day and zero chance of shale filling that gap much further, especially without a >$100 price environment). Claims of Saudis being irresponsible are likewise exaggerated.

#64 Mark on 11.30.14 at 8:58 pm

“There is no physical reason why a house should become more valuable at all.””

Exactly. Unless one has actually made improvements in excess of the natural deterioration that a property would be expected to have over time.

#65 Mark on 11.30.14 at 9:00 pm

“So how does this work? In the future all teachers will have to commute from Abbotsford. What about that nice lady at the bank? She will need to live about an hour and half from where she is lending all that money to all the uber wealthy who want to buy these places.”

Renting is still remarkably affordable in the bubbly areas in Canada, which indicates that what we’re seeing is not an explosion of legitimate demand, but rather, simply a bubble in credit against a particular asset class.

It is pretty obvious that the people who are buying the houses these days are not the ‘uber wealthy’. In fact, far from it, they’re quite poor. And will be a heck of a lot poorer as the flush is applied to the RE market.

#66 sotiri on 11.30.14 at 9:06 pm

#38 Ronaldo on 11.30.14 at 6:20 pm
”Houses have value because they are shelter , land has value because you can’t create more if it.”

Ronaldo do you think in US the houses are not shelter?? Do you think they can create more of the land???
Then why their houses are twice as big as in Canada and half the price?
Oh yea we Canadians are special and “we are richer than we think” that’s why.

#67 West Coast on 11.30.14 at 9:08 pm

Thanks #51 Carly in Cabbagetown for your links and observations around co-housing. Whether or not alternative forms of housing would have a substantial impact on our real estate market or not, learning about the concept of ‘co-housing’ can help people understand what they really want in terms of a home and community. We know a physical house (whether owned or rented) does not create a ‘home’ any more than a group of houses creates a ‘community’. No one needs to spend outrageous amounts and go into life long debt to have a wonderful home and a great community (even those of us living in Vancouver!).

#68 Harbour on 11.30.14 at 9:08 pm

Oil at $40 Possible as Market Transforms Caracas to Iran

http://finance.yahoo.com/news/oil-40-possible-market-transforms-210100351.html

#69 bubu on 11.30.14 at 9:11 pm

Smoking Man, why do you think Cowtown will be affected? I think the prices will not increase maybe during this time but they will not come down…

#70 devore on 11.30.14 at 9:13 pm

#16 Ole Doberman

Calgary is toast, the Germans are making gasoline out of…….water!

Wow! Do they use cold fusion to power those machines? I think I will subscribe to their newsletter.

#71 Ronaldo on 11.30.14 at 9:23 pm

#62 Sotiri – your response should have been directed to #18 Vancouver right? on 11.30.14 at 3:23 pm
who made that comment:

”Houses have value because they are shelter , land has value because you can’t create more if it.”

My comment was in response to the phrase by Vancouver right? that ”land has value because you can’t create more if it.”

The video link was to show that you can create more land if you need to but at a cost of course. Anyway, we’ve been listening to realtors for the past 40 years telling us that the reason for high house prices is because there’s nowhere to build in Vancouver anymore. Last time I look skyward I saw no shortage of building space.

#72 waiting on 11.30.14 at 9:24 pm

Interesting article on real estate in Fort McMurray – Kind of dated though – it’s a few weeks old …

http://www.theglobeandmail.com/report-on-business/economy/housing/the-real-estate-beat/in-alberta-fort-mcmurrays-top-end-real-estate-market-slips/article21278599/

I just checked MLS and it shows about 950 listings in Fort Mac.

#73 Linda on 11.30.14 at 9:39 pm

#30 – Right on brother – it is past time people took responsibility for their actions & stopped blaming it on the government, their parents, their significant other et al. Unless you can show me an undoctored video of your being forced to sign mortgage papers at gunpoint the debt you are in was your choice. If you didn’t say no because you didn’t want to deal with the fallout then that was your choice too.

Regarding housing, like anything else its value is what the buyer perceives it to be. That having been said, some places always command a premium because of where they are situated. I would not want to try to purchase a home now, because the prices are too high & the quality of what is being sold is simply not worth it in my mind. Hopefully the market will adjust so that home ownership isn’t just for the financially well endowed. Owning your own place should be something one can celebrate, not a source of financial despair & anxiety.

#74 TurnerNation on 11.30.14 at 9:58 pm

Chancellor Rebalancer…moving lots from from TSX income fund into more Treasury Blondes fund this week. Middling workplace RRSP.

Spending more time than ever with my realtress (who btw is looking for a move back into corporate world.)
No BRA required I note.

#75 Piccaso on 11.30.14 at 10:02 pm

#72 waiting

I went to Cold Lake, it was the most disgusting place on earth, I’m sure Fort Mac is worse.

#76 Mike in Calgary on 11.30.14 at 10:03 pm

Parents bought the house I was raised in in 1964 for $17,000 and sold 2 years ago for about $675,000.00. Most people would compare this kind of return with Google or Microsoft stock, but the reality is that inflation was the major factor. If you had a next door neighbour who was bragging about having balanced his budget because he no longer needed to borrow money to make his minimal visa payments, would you ever lend that guy your lawn mower? That’s our federal government, and the only way left for them to pay off our dept is with inflation. Other than antique watches or books, real estate I is the only true investment left to us in the long run.

#77 Nomad on 11.30.14 at 10:06 pm

Oil just hit 64$.

I wonder if HR departments in Calgary have started taking down job postings. Wish a site tracked job postings per company.

Some news are bound to pop up about hiring freezes.

#78 young & foolish on 11.30.14 at 10:06 pm

“There is no physical reason why a house should become more valuable at all” …. Correct, but only if you could say the inverse about money.

#79 NotAGreaterFool on 11.30.14 at 10:16 pm

You have three urban centres (Toronto, Vancouver, Calgary) shooting over their weight in terms of house price by almost all measurements. There 3 are so many deviations away from the normal, I just can’t see a mild 10% or 15% reverse. Since it is the frothiest here, this is where the most steam will come out with prices soaring down.

All other places in Canada, have less to drop as their relative appreciations less extreme.

If a 15% correction overall (all paces in Canada) is the outcome, you better believe there will be some markets that get hit more (30%) and some less (5%).

This is my 2 cents.

Also, ‘soft landing’ is phrase adopted by the Feds and the Economist to convey confidence and calm in the market. It is a communication /marketing tactic. I don’t have any record of a ‘soft landing’ in Canada real estate. DO you have an example?

#80 young & foolish on 11.30.14 at 10:17 pm

In most places where people want to live (today it seems to be urban centres), shelter will remain relatively expensive. Demand pushes up prices beyond reasonable valuation (as compared to rents). The obvious solution … is to rent. But renting and owning do not ‘feel’ the same, and there’s the rub. We are still an ownership society, despite all the noise about sharing.

#81 Cato the Elder on 11.30.14 at 10:23 pm

The most tragic thing about all this is that it really wouldn’t matter what price commodities went to if we had a strong, vibrant, market economy.

Instead, we have a top down, centrally managed bureaucratic nightmare that doesn’t allow capital to freely flow to where it is needed.

This means that price shocks in sensitive areas like Oil will be very difficult to weather. All that money that is sunk in those associated industries can’t flow out very quickly because it took so damn long just to get it there. All kinds of approvals were needed for regulations to environmental protections to tax rules. The list goes on.

We need free markets. In a free market system, this would be a minor blip. Sure, some people would lose their jobs – this is inevitable. But there would be such a deep pool of high paying jobs available that it would take no time at all for them to find a new one.

We need to get rid of ‘redistribution of wealth’ – things like transfer payments are abhorrent. It creates a situation of dependency, is immoral (theft), and doesn’t allow poorly managed provinces to make the necessary changes they need to.

We need low or no taxes, low or no regulations, small limited government, and a government that CLEARLY understands it’s purpose: protection of civil liberties, property rights, enforcement of contractual obligations, impartiality of judiciary, and defending people from the non-consensual force of others.

Protecting people from themselves is impossible, and yet governments the world over continue to try it! Stop the madness! Let freedom reign!

https://www.youtube.com/watch?v=bFxvy9XyUtg

#82 Goolin on 11.30.14 at 10:27 pm

#9 Role on 11.30.14 at 2:46 pm

Either that rant came straight off google translate, or the poster’s parents blew his primary school educational budget on real estate….

#83 sotiri on 11.30.14 at 10:31 pm

Ronaldo my apology that was to be directed to #18

#84 Thomas on 11.30.14 at 10:52 pm

Loving these gas prices down south – paid $0.65/L today!

#85 Retired Boomer - WI on 11.30.14 at 10:55 pm

#81 Cato The Elder

Great idea. Lets stop unemployment insurance, aid to families, aids to cities, no highly taxes, no student loans no CMHC, no Bank deposit insurance, trash Old Age Pensions, forget subsidized Healthcare.

Wait! There’s more! No Mounites,. no regional police, no transit, no GO Trains, no aids to schools, no small business development, no public pensions.

wow! Paradise he says! Except, it would be a hell on earth, or maybe Mexico. Civilization is what WE have asked our government to do for us, with our money!
Want less, VOTE!!

#86 Gas prices are still too high on 11.30.14 at 10:56 pm

Why are gas prices so high still?? 64$/bbl, it should be minimum .90$ no?? Hell its still 1.14 in the GTA!

#87 #44 Taylor Reed - Hamilton Tiger Cats on 11.30.14 at 11:00 pm

Umm, I’m just gonna quietly leave the stadium now. Please don’t follow me. I’ll mail in my uniform and jockstrap, coach.

Garth, after this I’m gonna need a new job :(

I hear anyone can get into real estate. Any recommendations for me? Fort Mac? Toronto? Maybe CREA’s head office in charge of broker discipline?

I’ll be home in a few days. Going by bus.

#88 Hans Petrobeer on 11.30.14 at 11:10 pm

#16 Ole Doberman on 11.30.14 at 3:01 pm

I am sure the Germans could make gasoline out of beer if they had to….the only question is whether it would conform to the Bavarian Purity Act (Reinheitsgebot if you want to impress your friends).

#89 crowdedelevatorfartz on 11.30.14 at 11:11 pm

@#75 Picasso
“I’m sure Fort Mac is worse….”
++++++++++++++++++++++++++++++++++++
Yup.
Create an abtsract painting with a sickly yellow horizon and a grey black landscape all cover with grey dust. Now paint people with sickly yellow complexions and hollow sunken eyes.
Voila!
A masterpiece you can name “Hades Frozen Over” that you can sell to the National Gallery in Ottaweird for 10 million dollars.
Dont believe me?
They paid over 1.8 million for this in 1989….

http://www.google.ca/url?sa=t&rct=j&q=&esrc=s&frm=1&source=web&cd=1&cad=rja&uact=8&ved=0CB0QFjAA&url=http%3A%2F%2Fen.wikipedia.org%2Fwiki%2FVoice_of_Fire&ei=ttt7VNvzI8OJiwKRkIDAAg&usg=AFQjCNHul8B1eE76Aq2Var9j-XHJr4EE0A

#90 Lillooet, BC on 11.30.14 at 11:11 pm

I have no sympathy at all for Matt and his GF.

No one is forcing them to live in a city with average house prices near a million. Too many of the young folks in Canada are self-brainwashed: “I must live in a big city, I cannot live in a small town!” Small towns are not even in the conversation. When asked why you wouldn’t live in a small town, the answer is: we want to be close to movie theatres, we want to be close to shopping, we want to be close to restaurants and transit.

Matt is 100% correct. If they buy a house in the big city, they will be in a prison of their own making: debt-serfs for life. No sympathy.

#91 Rosholt on 11.30.14 at 11:11 pm

Gas is still 1.199 in parts of the Fraser Valley

#92 Rosholt on 11.30.14 at 11:13 pm

What is the Brent Crude ticker for google finance?

#93 Mark on 11.30.14 at 11:14 pm

“I wonder if HR departments in Calgary have started taking down job postings.

I doubt it. The job postings will likely remain high, simply so the bosses have a good stock of resumes they can wave at their existing staff and tell them how lucky they are to have jobs. If anything, job postings may very well accelerate as firms race to replace high-priced staff with lower-priced staff.

If oil and gas’ downturn/collapse follows that of what happened in the high-tech sector, it is likely that the HR clerks will actually be screaming “labour shortages” when they’re overwhelmed with resumes from qualified workers.

“You have three urban centres (Toronto, Vancouver, Calgary) shooting over their weight in terms of house price by almost all measurements. There 3 are so many deviations away from the normal, I just can’t see a mild 10% or 15% reverse. Since it is the frothiest here, this is where the most steam will come out with prices soaring down. “

Agree 100% with the concept, although I’d suggest the bubble valuations also extend to Edmonton, Saskatoon/Regina and Winnipeg as well. But the housing bubble’s collapse probably will be a non-event in Fredericton.

#94 Inglorious Investor on 11.30.14 at 11:14 pm

“Michael Kingsley said a house is worth only what someone will pay for it.”

Yeah, like any other marketable good. How insightful.

——————-

“There is no physical reason why a house should become more valuable at all.”

It ain’t the house, it’s the land. And there IS a physical reason: supply and demand. Wherever people cluster into communities, land will have value. Because land and structures take much time and resources to develop and build, buyers have to pay the cost plus a profit. If land is developed with a lag to population growth, property values will rise.

——————-

“It is not growing like a crop. It is not producing anything that you can turn around and sell, like a factory. It just sits there.”

It provides the most basic and important of human needs: shelter. At this point he should have just shut up, but he continues.

——————-

“It becomes more valuable because people believe that it will become more valuable.”

True, but this is rooted in reality, not just belief. When housing prices go mental like now, things go out of balance, but the reality does not change. Except under specific circumstances, given the choice and the wherewithal, most people will choose a house over a MUR unit, but even the MUR unit is still a home/shelter.

——————

“Worse, since the general assumption that it will become more valuable is already reflected in the price you paid, you need a buyer who believes that it will become more valuable even faster than the general consensus.”

Not necessarily true, and other than the “faster than the general consensus” part”, Kinglsey described what is just a normal market for a good that is expected to at least retain its inflation-adjusted (real) value over time.

Kingsley may be a good wordsmith and talking head, but his opinion on housing is apparently built on shoddy foundations.

#95 OttawaMike on 11.30.14 at 11:18 pm

#85 Retired Boomer – WI on 11.30.14 at 10:55 pm

No not less police and jails. Neocons love that type of govt. spending.

#96 Helen on 11.30.14 at 11:22 pm

Matt, you don’t have to “run” or “say yes to the debt”. It sounds like the first time you two have discussed housing/finance? Reading this blog together is a great way to learn about each other’s financial values and sensibilities. Is she open to new ideas? Give her time and information BE NICE. Can she be persuaded by fact? If not, that’s who she is and it will never change. You can then run or say yes being fully informed.

#97 Bob Marely on 11.30.14 at 11:22 pm

“No woman no cry”.

#98 JacqueShellacque on 11.30.14 at 11:23 pm

I don’t believe Matt’s story at all. He’s under 65, and was listening to CBC radio?

#99 Terrier on 11.30.14 at 11:45 pm

I ordered my pizza this past Friday evening. The delivery guy showed up on my door 15 minutes later. It usually takes 30-45 minutes so I asked him how come he got here so fast? It’s deadly slow, he replied. People have no more money for pizza I guess … it’s getting tough. He added, 90% of orders are paid with credit cards and folks leave very little or not tip at all. My boss said if things don’t improve in the next 2-3 months we’ll be closing the joint. I felt bad. I took the pizza and slipped 10 bucks into his pocket. Don’t worry, things will get better I said. He shook his head and said, I don’t think so man … I have a feeling it will get much worse.

#100 Inglorious Investor on 11.30.14 at 11:48 pm

Prior to the 2008 financial crisis, I expected that at some point the rise in Canadian home prices would result in a big correction due to over indebtedness and lax lending standards crashing head on with a severe recession and or higher rates. Like the early ’90s.

When the crisis hit and prices swooned I thought: “This is it.” I remember: realtors were panicking and lower pricing expectations were becoming entrenched. Then govs and central banks pulled out all the stops to reflate the system and flood the world with cheap credit. It worked. I remember one house’s For Sale sign declaring: “What recession?” That was just about after we hit the bottom of the correction and it’s been up, way up, since.

Given the amount of money now pumped into the system, I have commented on this blog that, barring a major downturn in the economy, housing may just be reflecting future general inflation, like we saw in the late ’60s and ’70s.

In this case, perhaps an obvious correction was not to be. Rather, perhaps housing prices would lag in real terms as prices in the rest of the economy caught up. So no real appreciation, but most people would be oblivious because the reality would be hidden in roughly stable nominal prices.

Now, it seems much of the world may be heading into a hyperinflationary overreaction to deflation. Japan is committing seppuku, China is slowing, and Brussels would rather starve half the population of the Continent and sacrifice their young on the alter of the euro before giving in to reality and giving up the insane notion that printing currency units stimulates anything except maybe riots.

We could be on the verge of a mass emigration from Europe. I am already seeing the early signs. Where will these young people with no hope but big dreams go? They will come once again to the “New World”. So whereas before we saw an influx of Asians, Middle Easterners, and Eastern Europeans coming to our shores in the 2000s, get ready for the Italians, the Spanish, the French and maybe even the Germans, and so on. If so, this could prop up another leg in Canada’s housing market as supply continues to lag demand, at least in select markets, like Toronto.

Can Canada’s housing market dodge another bullet and continue to confound the pundits? The stars are aligning for Canada to increasingly become a beacon of hope for the world’s displaced peoples. Climate change (which if it’s warming is good for Canada). Economic stagnation. Political turmoil. Heck, maybe even the Americans will start coming here in droves looking for fresh water. We’ll see…

What a drama queen. — Garth

#101 tkid on 12.01.14 at 12:09 am

Watching the Grey Cup with family at a local bar. Pizza, wings, beer. Place has good food, good beer, good prices. This time last year the place was packed. Tonight the place was empty after 20:30.

There is no way that in 1 year that many people bought overpriced houses in Niagara Falls so no one can afford a beer in the local pub on game night, but I can’t explain it otherwise. It’s like someone flicked off the go-out switch.

#102 Rosholt on 12.01.14 at 12:30 am

I was at my local video rental store and the guy there was telling me how dead it was lately. I told him things will pick up but he didn’t think so.

It’s looking grim I think.

Between him and my Arabian friend, all indicators point to trouble.

#103 Fed-up on 12.01.14 at 12:30 am

#86 Gas prices are still too high on 11.30.14 at 10:56 pm

Why are gas prices so high still?? 64$/bbl, it should be minimum .90$ no?? Hell its still 1.14 in the GTA!

—————————————————————————–

Because Canada is country full of crooks and fraudsters. Governments at all levels and oil companies have ZERO credibility in the Great White Hoax.

Believe it.

P.S. When oil was $140 per barrel and the the dollar had dipped down under 78 cents 6 years ago, the GTA was paying $1.37 per litre. Oil currently under $65 and dollar around 88 cents. How much are we over paying? Do the math folks, I say at least 30 cents per litre.

#104 Sheane Wallace on 12.01.14 at 12:30 am

Gold is dead money. — Garth

I thought gold is no money. Dead money is still something.

Your money invested in gold is dead. Five year return: zero. — Garth

#105 Sheane Wallace on 12.01.14 at 12:31 am

#101 Inglorious Investor

correct on inflation.

Dead wrong on Canadian prospects. There are much nicer and cheaper place to go to.

#106 Cato the Elder on 12.01.14 at 12:36 am

re: #85 Retired

Almost everything you mentioned are programs in terrible shape. Everytime the government gets involved in something, the price goes up and the quality goes down. There is no reason any service or good with a consumer demand would not be provided by the marketplace, as long as there were no governmental restrictions.

Everything the government does creates a disconnect between risk and reward – it either disproportionately rewards those who risk little (government graft) or harms those who risk a lot (successful entrepreneurs). We must restore this back to it’s proper balance – when we recognize that successful, profitable businesses are like that because they have helped society, we will get back on the right track again.

Unemployment insurance is abused – many people sit on it for as long as possible. This disincentivizes work and makes the productive of society less willing to contribute.

Cities should work their way out of their debt, not have their poor behaviour subsidized (and prolonged). Instead, when they know they can get bailed out, they continue to make things worse. Look at Detroit!

Student loans have burdened huge numbers of young people with debt for absolutely no valuable return – they are graduating with no jobs. Student loans have also massively run up the price of tuition, which is another great example of what happens when government gets involved (higher prices, lower quality).

CMHC has created moral hazard in which banks pass the risk of loans onto taxpayers, and prices have been run up sky high there as well – burdening almost everyone with unsustainable debt levels.

Bank insurance has been a horrible idea since the beginning – again, banks pass the risk onto tax payers that will bail them out. They should be forced, through their own diligent research, to ensure adequate reserves are on hand for depositors withdrawals. If a bank fails, let it. Bank clients need to be more vigilant about where they keep their money.

NO ONE can argue that our healthcare system is wonderful. It’s falling apart. Long wait times, dilapidated structures, outdated machinery. I volunteered at one for a year when I was considering becoming a doctor (in one of the richest cities in Canada) and I couldn’t believe the condition it was in. It’s politically impossible to advocate a free market system because people think of the US (but the US does not have a market system, it has a crony-capitalist/corporatist system). But we could have a two tier system like Switzerland does.

3 reasons why it would be better than what we have: 1.Canadians that travel abroad, such as to the US, for care could instead spend their money here
2.It would reduce lineups and strain on public resources
3.Those that REALLY need free healthcare (the poor) would receive treatment faster due to the reduction in lineup wait times

How anyone could argue that a two tier system is ‘unfair’ is beyond me. Who says a rich person would be the only one to use it? I am a part of the middle class and have many relatives that saved their money in order to get surgeries (knee, etc.) in the US because they didn’t want to wait 2 years. WE NEED TO START TALKING ABOUT THIS AND STOP TREATING IT LIKE DOGMA.

Don’t get me started on the GO Train. One of the worst managed train systems, outdated, slow, pretty much any argument can be made against it. Go to Europe – see how wonderful their transit systems are. They allow competition on their rail lines – that’s why it’s so good. Don’t like train company 1? Go with train company 2!

And pensions? They’re all a pipedream. All of them are based on the fantastical notion that future returns are going to be the same as decades past – it’s all paper based projections. There’s almost nothing tangible backing them up, except for some of the few ‘hard’ assets they possess like toll roads. The only reason for the irrational confidence our politicians have is in their ability to tax endlessly to make up shortfalls – but they don’t realize there is a limit to that which the private sector can bear.

Look, this is ALL VERY SIMPLE. I’m not saying ‘abolish everything – destroy it all’ – I’m saying ‘LEGALIZE COMPETITION’. Remove all the barriers the government has placed on private companies competing with these government agencies. If an entrepreneur sees an opportunity to provide a good or service better, let them take the opportunity to do it!

How can anyone argue with that? Quit criminalizing improvement! Quit making it illegal to help your fellow man! Unless man’s creative energies! Let freedom reign!

#107 Frustrated Kiwi on 12.01.14 at 12:46 am

#80 young & foolish
>Demand pushes up prices beyond reasonable valuation (as compared to rents).

This is not normal or to be expected. In a normal market a landlord can expect a reasonable rate of return for his capital investment that is based on rents. Currently, in many markets, landlords are subsidizing renters because they expect capital increases. Just think through the long term of that equation and you’ll see how unsustainable it is. There’s good evidence that in the very long run house prices track incomes:
https://hotelivory.wordpress.com/2010/08/29/a-very-long-view-on-house-prices/
Of course, “the market can stay irrational for longer than you can stay solvent.”

#108 Sheane Wallace on 12.01.14 at 1:09 am

Your money invested in gold is dead. Five year return: zero. — Garth
…………………………
How about 15?

As I don’t own gold but few miners I am not worried about it.
Look energy, is another story.
Commodities would have it’s revenge.

As I have said I am heavily invested in stocks for now and I believe DOW will hit 20 k soon as well as the Ca dollar will sink.

As for gold it would be a truly fascinating story some day, soon.

#109 Godth on 12.01.14 at 1:20 am

#23 The Man

hahaha OK, that was well done.

#110 Entrepreneur on 12.01.14 at 1:22 am

Know a jeweler very well and he said it is getting scary out here. When younger if he needed some money he would go market them but now that is not happening.

Another person who is in the costume business sees a sharp decline in customers. She said online is the competition.

Co-living might be the answer just to survive.

#111 No way on 12.01.14 at 1:27 am

#103 Rosholt on 12.01.14 at 12:30 am

I was at my local video rental store and the guy there was telling me how dead it was lately. I told him things will pick up but he didn’t think so.
It’s looking grim I think.

Between him and my Arabian friend, all indicators point to trouble.
————
It’s called Netflix

#112 M on 12.01.14 at 1:39 am

Garth,,in your answer to Agnew at #4 you said:

“There is no reason for a crash, nor will central bankers allow it to occur. But the wealth disparity will probably increase along with interest rates. — Garth”

Since when “central bankers” allowed anything ? They are pygmies against the grand forces of market. They may be able to kick a can down the road (based on the credulity of the herd) but no more.

Remember, the superb expression of economic control was applied in communism. It took 80 years, gulags and tanks to keep it going but in the end it did collapse. Unfortunately that economic experience is not studied. Had it been, it should give you pause because since 1998 LCTM bail out, is welcome to the central planning with “chocolate flavor”. Olympia and York bail out in the 90s was along the same vein.
The “new think” in which the piper gets IOUs indefinitely based on “central planning” of the interest rates will be utterly destroyed, just like in the good ol’ commie times.
..and these morons have no gulags, a few crappy tanks and debt galore. Fortunately the “new ideology” – actually old and tested in eastern europe will be crushed in the next few years. At a horrendous price.

“central bankers” can’t allow or dis allow anything. except their own delusions of grandeur. Believe me..it will be quite a show to watch.

Mr Market is an absolute force.

#113 Munch on 12.01.14 at 1:45 am

First?????

#114 The Most Delusional Man In the World (Oh wait Cato has that covered) on 12.01.14 at 1:49 am

“We need to get rid of ‘redistribution of wealth’ – things like transfer payments are abhorrent. It creates a situation of dependency, is immoral (theft), and doesn’t allow poorly managed provinces to make the necessary changes they need to.”

I see where you’re going here. The Ontario government is a mess and doesn’t deserve these transfer payments right? Agreed, Okay then when should Ontario expect the cheque from the rest of the provinces that benefitted from this system since it’s inception and Ontario carried everyone else up until recently?

I agree with the whole idea of houses going up so rediculously making no sense. My parents paid $13,000 for a brand new one in 1961. Similar houses in the same nieghbourhood are asking $545,000 now. How does that make sense? Perhaps people figure that given they’ve paid two and a half to three times the purchase price due to mortgage intrest that the buyer should compensate them for that? About the only thing I can come up with given that the houses are deteriorating from the day they are finished being built. Obviously that’s nonsense though because even that would only be $39,000 at the most. Could it be the most base human trait, greed?

Oh and Warren Buffet and we have a Batman taking a Hockey Stick right to the groin of that Subprime CHMC 900 Billion (that doesn’t exist) while it’s getting a prostate exam. Oh Oh Oh and UFO. Wait….anal probe, UFO, CHMC, Batman- wow this is all starting to add up now isn’t it?

#115 JimH on 12.01.14 at 2:03 am

Cato the Elder

Quick question; Are you out on a weekend pass, or did you manage to knaw your way out of those pesky restraints again?

#116 TheRealTruth on 12.01.14 at 2:13 am

Cato:

The corps that limit free markets in Canada have infiltrated political office. No free markets in many industries:

1) Canadian Dairy Cartel
2) Canadian Poultry Cartel
3) Domestic Airlines insulated from foreign companies.
4) Telecom and vertical integration.
5) Oil/Gas stations vertical integration.
6) Media monopoly coming..
7) BC Liquor store licenses worth $1 Million +
8) BC ICBC license to sell auto insurance $1 Million +
9) Vancouver Taxi Mafia plate value $1 Million plus
10) Basement suite income not taxed…hmmm why not?

The list goes on and on….

Not a free market anymore. Politicians only appear to be standing for the public.

#117 winterpeg on 12.01.14 at 2:18 am

Thanks #51 Carly Cabbage town.
Many of my female friends (especially those without children) are talking about such living arrangements now, and strategies for such. Will keep it on my radar. Not that it would be Utopia. Group living has it’s challenges. But so does the isolation of single house life. I agree that my demographic (50+) are contemplating unloading their houses, but looking for an arrangement that is is like a community and is supportive. I hope a chapter starts up in Winterpeg.

#118 Kris on 12.01.14 at 2:22 am

#9 Role on 11.30.14 at 2:46 pm
Matt do good. Matt find most of best learning forever to may be and possibly fine best and greatest place to have family. Big small little house all is good best and forced will be selling for most more of what other people,, even red coats think best monies wise will be! Gone days whem find only one house for two family. Sometime you gotta find best time buying AND sell!! Good on ya!!

That hurt my eyes. — Garth

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

That hurt my brain…hahahahahhahahahahahaha//lol

#119 BigM on 12.01.14 at 3:15 am

@100 Terrier
@102 tkid
@103 rosholt

I usually try to listen to the guys with their feet in the street.
Quite often they are right, and the eggheads in the ivory towers… aren’t.

#120 RealistvsExtremist on 12.01.14 at 3:45 am

#85 Retired Boomer – WI on 11.30.14 at 10:55 pm
#81 Cato The Elder

Great idea. Lets stop unemployment insurance, aid to families, aids to cities, no highly taxes, no student loans no CMHC, no Bank deposit insurance, trash Old Age Pensions, forget subsidized Healthcare.

Wait! There’s more! No Mounites,. no regional police, no transit, no GO Trains, no aids to schools, no small business development, no public pensions.

wow! Paradise he says! Except, it would be a hell on earth, or maybe Mexico. Civilization is what WE have asked our government to do for us, with our money!
Want less, VOTE!!
++++++++++++++++++++++++++++++++++

Yes because Stazi’s and Communism work so much better. Oh wait !!

And yes….let’s vote in another dictator because our “fake” democracy also works so well.

#121 juno on 12.01.14 at 4:24 am

Banks are about to report and the future will be cost cutting

http://www.theglobeandmail.com/report-on-business/after-a-record-run-of-profits-canadas-big-six-banks-brace-for-shift/article21839571/

Interesting oil down therefore will be looking at cost cutting or handing out pink slip. The banks are about to do the same. If Real estate takes a hit that would be three major sections hits.

Welcome back 1980s.
Its going to be a title wave which hits us

#122 Rexx Rock on 12.01.14 at 7:36 am

Interest rates will normalize to 0.25 % from 1% prime rate.House prices should come down if we see higher job losses due to lower oil prices.Its the big guys calling the shots and they decide the future so don’t sweat the small stuff.

If the BoC is forced to lower rates we will be entering into one mama of a recession and you can kiss my predictions of a modest housing correction goodbye. Things will be far worse. — Garth

#123 Mr. Frugal on 12.01.14 at 8:33 am

#32 Happy Renting

You sir, have it all figured out. Plop $1M into a balanced portfolio and get out of the rat race. Makes a lot more sense than buying an overpriced dump in Toronto and spending the rest of your life working trying to keep up with the rest of the sheeple.

#124 crowdedelevatorfartz on 12.01.14 at 9:22 am

@#115 JimH

re Cato the Escapee

Good one.

#125 Cat Mandoo on 12.01.14 at 9:26 am

Oils dive means no rate increases…maybe even more stimulus as national budgets crater around the world. Look forward to higher prices….sorry Garth.

As I’ve said often, higher mortgage rates are not needed for lower housing values. — Garth

#126 Detalumis on 12.01.14 at 9:29 am

#61 Carly don’t get your knickers in a knot. You seriously believe society women are interested in living in cohousing, really. They hang out in Palm Beach in the winter and when they get really, really old they hire a paid companion to travel with them. Of course it’s all about women who aren’t independent financially, emotionally or both. There are plenty who are.

Your comment about men wanting to stay in moldering houses is telling. Maybe men are more resilient, they can live on their own without getting depressed. You just don’t get that. If I had an interest in living with a bunch of other old ladies for “companionship” I would join a convent.

Oh the joys of being an introvert, we don’t need anybody around us to be happy. I could easily live in a “lonely” urban condo, I would pick one with a bunch of young people that made a lot of noise, they don’t complain about everything under the sun, like if my doggie is 20.4 pounds instead of 20. Being able to live a solitary life perfectly fine is not something you would understand, most women can’t do it.

#127 Polozified on 12.01.14 at 9:48 am

#23 The Man on 11.30.14 at 4:27 pm

Amen!

#128 Lily on 12.01.14 at 9:52 am

Garth, I kept giving you the benefit of doubt, but it can’t be a coincident that the majority of your portrayed greater fools are either girlfriends, wives, mothers or mother-in-laws…go figure!

So tell me about him. — Garth

#129 Funny that on 12.01.14 at 10:06 am

#57 Grantmi on 11.30.14 at 8:40 pm
Holy Snikies… The Swiss reject Gold Standard Referendum.

Gold plunging $38.00 over seas.
++++++++++++++++++++++++++
What’s the price over land?

#130 Holy Crap Wheres The Tylenol on 12.01.14 at 10:10 am

Matt’s babe may not get this. In a heartbeat she’d trade a mill for a house.

She’s the normal one. So, get ready.
______________________________________________

You did fail to mention where Matt & GF where located, so I can only surmise in a larger metro area. What most hipsters want is the pie in the sky downtown. Move out a couple of county’s over and the prices drop off like flies on a cold day. They can have the home for reasonable dollars but now you have the commute? Oh yes sorry now you may not have the ability to line up at Starbucks for you $10 cappuccino, latte frappe moga $hit as the nearest Starbucks is 10 miles away. You can’t have both so compromise people, home or downtown?

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

#131 Holy Crap Wheres The Tylenol on 12.01.14 at 10:15 am

Starting to see cracks in the RE out here in beautiful downtown Oakville. Hipsters here can’t afford the home, trips, private school, BMW’s & Porches, and Starbucks!
Just waiting to see the foreclosure signs coming! Last sailboats out of the harbor sad day, now I have to go the Caribbean and rent a sailboat.

#132 TorontoBull on 12.01.14 at 10:15 am

@97
“No woman no cry”.
“No man no problem!”

#133 Hoser on 12.01.14 at 10:16 am

Matt,
You want to marry someone who is already in debt and thinks nothing of plunking down a million bucks for a house?

She is mindlessly following the life script that says you have to buy a house. If you marry her you are also mindlessly following the script.

Stay single, debt free and enjoy life.

#134 Smoking Man on 12.01.14 at 10:20 am

#69 bubu on 11.30.14 at 9:11 pm
Smoking Man, why do you think Cowtown will be affected? I think the prices will not increase maybe during this time but they will not come down.
………

Truth is I don’t know that market and should not say anything about it..

But oil prices are headed lower..or will stay at this level till excess supply is used up..but with all the new found oil fields and geo political presser to hurt Russia.

Cowtown will be affected, by how much, I have no idea.

#135 Holy Crap Wheres The Tylenol on 12.01.14 at 10:26 am

#190 Smoking Man on 11.30.14 at 2:32 am
is communism.
#176 Gigi on 11.29.14 at 9:27 pm
Dear Pete
You have no idea how much you can love another person until you have kids. It is the most intense love you can ever imagine. But, pay your debts first and you will be fine!
……………………………………………………….. ……..
Ya sweet Heart, and if God takes one of your kids away. What then… I’m going to kill god when I get up there.
Wasn’t my kid, but I inspired him..
God better hope I live for ever… Cause his ass is mine first chance I get
____________________________________________

Holy Crap smoking Man what the hell are you drinking? A lot of anger there buddy. Get a handle on it. I thought you were a full blow atheist? Atheists have concluded that God does not exist. These people represent a special category that God describes as, “The fool has said in his heart, There is no God” (Psa. 14:1). This scripture is repeated in Psalm 53:1. God calls atheists “fools.” You are not even an agnostic Smoking Man.
You my freind have to be a beliver as you keep talking about God. So get good with your god and chill out dude!

#136 Marlene from Victoria on 12.01.14 at 10:32 am

Detalumis (post #126)

I would not be so quick to judge. You sound like you might be a realtor afraid of losing business, LOL!

I am also a boomer female and think Carly is merely pointing out some things that women know are obvious.

Did you know that we are about 51% of the population (and much more so in ages over 50) and that we outlive you routinely by 5-15 years, usually having taken control of all household financial decisions well before that esp. in the case of aging and infirm men?

Wake up and smell the herbal tea, men :)

Housing decisions in the senior years will likely be made without you or in spite of you.

I know a friend who was able to get a doctor’s recommendation with no trouble for her husband to be put into care. He died within a year there (no, it was not deliberate) and she has now sold their place and moved into co-housing, something that he always resisted. She misses him, but is totally happy in her new living arrangement, with caring friends and a staff person who does shopping and errands for everyone, plus health care on demand if it is needed as she gets older. Plus there are couples and men there, and dating is not a problem if she feels like it, inside or outside the co-housing strata.

Women are naturally more socially attuned and connected than men, don’t deny it. We want houses in our youth to build connections, and as we get older we realize those same houses can get in the way of connections. It does “take a village to be fully human” as a speaker at a conference I attended at Royal Roads spoke about.

http://cstudies.royalroads.ca/courses/PEHL3989-Y14.htm

The conference was packed!! There have been two spillover sessions already since then in Victoria, and we filled two school classes. (If this is any additional sign of what might happen to Victoria real estate, watch out below!) Most attendees were women. Most were not poor like you suggest, but they did a show of hands and almost everyone was a homeowner.

We humans can be so dense sometimes. Most people say they want to buy a house to have their own place and become part of a community.

The community part, the connections with others, is the part that really matters. Women seem to know that most.

Why wouldn’t smart women and men start thinking instead of STARTING with the idea of community, and letting the housing take care of itself?

To borrow your words

YOU just don’t get that.

So don’t get YOUR knickers in a twist detalumis, you wouldn’t want to get your truck’s undercarriage all bent out of shape.

#137 Daisy Mae on 12.01.14 at 10:36 am

#11 VanDammeCouver: “Does that make sense?”

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

More sense than #9 Role….. :-)

#138 gut check on 12.01.14 at 10:41 am

It’s a tricky argument to make, though, isn’t it? I mean it’s tough to try to insist that “Matt’s babe” is the ‘normal’ one in that she’d happily plop down $1 million for a house and then turn right around and say house prices are going to drop.

If Matt’s babe is normal and there’s no tightening of lending in sight then you’ve pretty much made a strong case for why prices will remain constant.

Add in foreign money looking for real assets worldwide and it seems to me that there would be no way that prices will come down, at least not in the bigger cities.

I do see softening where I am even though we’ve got a few reasons why builders and investors have kept the market very strong. However the fundamentals as you’ve set forth argue against softening prices.

Matt’s right – it’s like crack. And people will beg borrow and steal to ‘afford’ it for a while yet.

#139 Marlene from Victoria on 12.01.14 at 10:44 am

Detalumis (post #126)

P.S. Take a look at this article. (scroll down a bit)

http://canadianseniorcohousing.com/

The Harbourside co-housing complex has just

SOLD OUT before construction, and they now have a

WAITING LIST for future co-housing spots.

How does that sound, when nearby Victoria houses and strata units are languishing for months on the market?

Exactly! This is a new and powerful trend in housing choice. Watch for it to gain traction.

#140 Inglorious Investor on 12.01.14 at 10:46 am

# 106 Sheane Wallace on 12.01.14 at 12:31 am

“Dead wrong on Canadian prospects. There are much nicer and cheaper place to go to.”

True, but there have always been nicer and cheaper places to live. That didn’t stop numerous waves of inflation from occurring before.

Historically, greater numbers of people have immigrated to the lower 48, but the US is increasingly becoming a less attractive place to live and do business. And Canada may increasingly be perceived as an island of (relative) stability in a growing socioeconomic storm. Wait…

#141 Inglorious Investor on 12.01.14 at 10:49 am

“What a drama queen. — Garth”

I prefer dramatis persona.

#142 Inglorious Investor on 12.01.14 at 10:51 am

Uhh… that should have been “numerous waves of immigration” not “inflation.” Or how about “an inflation in immigration.”

#143 Grantmi on 12.01.14 at 10:57 am

#111 No way on 12.01.14 at 1:27 am

#103 Rosholt on 12.01.14 at 12:30 am

I was at my local video rental store and the guy there was telling me how dead it was lately. I told him things will pick up but he didn’t think so.
It’s looking grim I think.

Between him and my Arabian friend, all indicators point to trouble.
————
It’s called Netflix

Yea… if you like 5 year old product. (Other than House of Cards, and you can eat that in one weekend. Than what… 20 year old episodes of Sponge Bob?)

#144 joblo on 12.01.14 at 11:11 am

Black Friday U.S. retail sales -11% vs. Last year.
Cyber Monday will see?
US recovery Hah!

Many analysts, perhaps even more experienced than you, believe retailers cut prices so much in advance of last Friday that sales were brought forward. — Garth

#145 Cato the Elder on 12.01.14 at 11:17 am

Re: #114 Delusional

You are suggesting the continuation of a failed policy simply because others had to suffer under it at one point. That is stupid.

Two wrongs don’t make a right. An eye for an eye makes the whole world blind.

If a policy is creating poor outcomes, it should be stopped. There should be no attempts to ‘save face’ by politicians that can’t grasp reality.

Transfer payments are POOR POLICY. Provinces that receive them become dependent and formulate spending plans around them. Their economy WEAKENS as they no longer have to provide for themselves. This weakens the country as a whole.

Not only that, but why should more productive provinces be forced to subsidize the extravagence of others’? This, again, makes no sense – nor is it moral to steal from one to give to another. You can not ‘multiply’ wealth by dividing it.

Just because Alberta has a lot of oil does not mean it has to be the richest province. Value added jobs like refining it create a lot more wealth than just the raw commodity. Unfortunately, the stupid policies of Eastern provinces have destroyed industrial capacity – THIS IS WHY we are suffering. Too many regulations and taxes.

Get rid of the transfer payments, and provinces like Ontario will be forced to start paring down the monstrous bureaucracy that has destroyed industry.

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

Re: #115 JimH

I notice that I receive a lot of ad hominem attacks around here, yet no one refutes my points. They all spout off widely held beliefs but don’t actually research anything I’ve said.

All the things I list on this site are substantiated in FACT. If you spent the time and opened your mind you would realize that it was in fact the case. This would most likely expose you to some degree of discomfort as you had to rearrange preheld beliefs – which is probably why people would rather insult me than spend any actual time delving into issues.

This is why we can’t get anywhere as a society. Cognitive dissonance is a very dangerous reality of the human psyche.

**********

Re: #116 RealTruth

You’ve got it nailed on the head. We have a ‘crony-capitalist’ system more akin to a soft fascism than anything free market/pure capitalist.

Now, in case anyone hasn’t noticed, they’re starting to attack civil liberties. The last tenet holding up a complete fascist police state. And you know why? Big business DOESN’T LIKE COMPETITION. They want to limit your free speech so you can’t criticize them, or offer up newer and better products!

Don’t you people get it yet?

FREE MARKETS are the best thing for you! More competition=lower prices. More competition=more competition FOR YOUR LABOR=higher wages!

It’s scary how close we are. We are literally on the precipice and no one is concerned. The US is rapidly devolving, having set the precedent as well as passing legislation that allows: assassination of US citizens, ‘free speech’ zones, indefinite detention, imprisoning whistle blowers, torture, etc.

Now it’s starting to come up here.

You friggin’ people need to wake up. Quit trusting your government so damn much. ‘Your’ guy isn’t going to fix it, he’s going to hold hands with ‘the other guy’ and team up to destroy the country together. This isn’t a ‘right vs left’ thing, that’s how they confuse us. It’s a ‘totalitarian statist vs freedom’ thing. They’ve been doing it for years.

A true patriot defends his COUNTRY from his GOVERNMENT.

#146 More Irrelevant Sexist Female Remarks on 12.01.14 at 11:18 am

#136 Marlene from Victoria

Marlene and women like her are the real reason most older guys want to stay clear of seniors homes and the likes!!!

#147 bill on 12.01.14 at 11:26 am

I see others think that ‘cato the elder’ is abusing his computer privileges at the ‘facility’….again.
‘cato the elder’: dont you think you should let the other patients have a bit of computer time?
it would be nice to get a break dont you think?

#148 Inglorious Investor on 12.01.14 at 11:29 am

Bleak Friday?

“Many analysts, […] believe retailers cut prices so much in advance of last Friday that sales were brought forward. — Garth”

Could be. However, from what I’ve seen occurring throughout society in general is we’ve been pulling sales forward increasingly for the last three+ decades.

Pretty soon our unborn great grandchildren will have buy stuff today to keep the economy going.

#149 bdy sktrn on 12.01.14 at 11:32 am

An eye for an eye makes the whole world blind.
————————
as much as the world seems to want to believe this it;s simply wrong.

An eye for an eye makes the attackers blind (the victims have already been blinded.)

should be ‘2 eyes and 3 boots to the head’ for an eye.

#150 Marlene from Victoria on 12.01.14 at 11:36 am

(post #146)

Marlene and women like her are the real reason most older guys want to stay clear of seniors homes and the likes!!!
————

Most older guys won’t make it to a seniors home, sorry to be the bearer of bad news.

Co-housing is NOT just about seniors homes, that’s the point. It certainly appeals to seniors, but is about a way of life that is possible for many ages.

I find most seniors homes appalling, frankly. And if someone is too ill from whatever, they will likely end up there and NOT in co-housing.

It’s a totally different atmosphere inside the communal living spaces of a co-housing location. People cook together, take care of gardens together, take care of kids and grandkids together.

Compare that to living isolated in a particleboard shack somewhere in Surrey or the like. No contest.

BTW, you called your post “More Irrelevant Sexist Female Remarks”.

Don’t you really mean:

“this blog is for men only and women are not welcome and if they dare show up with contrasting opinions they will be shamed as sexist and irrelevant – because I say so!!!!”

Now go back in the corner and play with your GI Joe. The world is bigger than your little woman-hating ideology.

Good men all know that. Thankfully, there are many of them.

#151 Cato the Elder on 12.01.14 at 12:00 pm

Re: #149 bdy

Then the attacker’s family gets involved, claiming that he was wronged, and they attack the other person’s family, and now you have a blood feud.

The problem with what you’re saying is the assumption that people behave rationally – they don’t. Have you ever watched the TV show ‘Cops’? How often do the criminals justify what they’re doing, or lie, even when there’s evidence right in front of them? It happens all the time. People justify their behaviours, regardless of right or wrong. A blood feud can quickly get out of hand with both sides lashing out, with innocent people getting hurt in the fray.

The palestine/israel thing has been going on for millenia because one side can’t simply ‘save face’ and say enough is enough.

You’re absolutely 100% wrong on this.

I’m not saying justice shouldn’t be served. But what I’m saying is if a poor policy is implemented, you STOP IMPLEMENTING IT. You don’t justify it’s continuing existence because OTHER people had to suffer under it! What preposterous lunacy.

#152 More irrelevant sexist remarks on 12.01.14 at 12:01 pm

Men are correct when they would rather be dead than give up their rights to some self appointed matriarch.

#153 Cato the Elder on 12.01.14 at 12:01 pm

Re: #147 Bill

Another ad hominem attacker. Why don’t you refute my points with substantiated facts?

You can’t.

I’m sorry that the realities of the world, when brought to your attention, challenge your mental faculties.

#154 Mark on 12.01.14 at 12:02 pm

“Black Friday U.S. retail sales -11% vs. Last year.
Cyber Monday will see?
US recovery Hah!”

Yeah the rate hike imminent crowd is hilariously comical, aren’t they? US recovery my a**. Numbers like this tell us that recession is far more likely the cause of the drop in oil and other markets as of late.

Where are the retail sales going? “So far, holiday shoppers have spent $22.7 billion online this season, up 15 percent from a year earlier, according to ComScore Inc. That includes more than $1.5 billion on Black Friday.” (Bloomberg) — Garth

#155 Debunking Cato, Vol.1 Issue 3 on 12.01.14 at 12:06 pm

#145 Cato the Elder

“Just because Alberta has a lot of oil does not mean it has to be the richest province. Value added jobs like refining it create a lot more wealth than just the raw commodity. Unfortunately, the stupid policies of Eastern provinces have destroyed industrial capacity – THIS IS WHY we are suffering. Too many regulations and taxes.”

I’m surprised at a statement like this from someone knowledgeable in economics.

Oil refining is a commodity business. The crude oil input is traded in cash and futures markets, as are the outputs of gasoline and distillate fuels. There’s no patented magic to building a refinery, the world has lots of capacity, and so — as basic economic theory would predict — margins are usually low.

Except in certain situations: Margins are high in North America right now because the US bans the export of crude oil but not the export of refined petroleum products. Given the current glut of crude in North America and the resulting spread between Brent and WTI, refineries have recently seen above average spreads between crude and refined product.

Anybody who can rustle up $10 billion and a site (preferably tidewater; maybe you can figure out why) can bet on these margins continuing. Hop to it, Cato.

#156 Bytor the Snow Dog on 12.01.14 at 12:11 pm

Marlene at 150, et al:

“Co-housing” is female speak for “I need someone to support me because my child support/alimony ran out/ husband died and I can’t do it on my own”.

Happy to help.

#157 Bytor the Snow Dog on 12.01.14 at 12:14 pm

And Garth, two articles in a row about house horny women and the “men” who tolerate them?

Careful, soon they’ll start calling you “misogynist”.

#158 Holy Crap Wheres The Tylenol on 12.01.14 at 12:14 pm

#140 Inglorious Investor on 12.01.14 at 10:46 am
# 106 Sheane Wallace on 12.01.14 at 12:31 am
“Dead wrong on Canadian prospects. There are much nicer and cheaper place to go to.”
True, but there have always been nicer and cheaper places to live. That didn’t stop numerous waves of inflation from occurring before.
Historically, greater numbers of people have immigrated to the lower 48, but the US is increasingly becoming a less attractive place to live and do business. And Canada may increasingly be perceived as an island of (relative) stability in a growing socioeconomic storm. Wait…
_____________________________________________

USA definitely a low cost place to live in based on North America Standards, however and here is the codicil. You must have astoundingly great health coverage! Otherwise you are pooched!
When I was discharged from the USAF we were covered for anything for a short period, thank god as I had an emergency appendectomy in my twenties. Cost, nothing! My neighbour had the same thing occur without proper coverage, cost…………….his home. It bankrupt him.
The secret to living in America is coverage, coverage, coverage, and that is where you can spend some serious cash!

#159 Doug in London on 12.01.14 at 12:16 pm

@#Rosholt, post #20
Every now and then there are mismatches between demand and supply for oil. Oil prices dropped in the 1990s (after the scare of the Gulf war in 1991) because the world economy was still recovering from the recession. It dropped to $11 in 1998 because of a drop in consumption due to the Asian Flu of 1997, and probably it was worsened by speculators who were burned. Into the 2000s consumption increased by 1) an improving world economy, 2)increasing demand from emerging market countries like China and India, and 3) because of cheaper fuel prices a lot of people were buying bigger SUVs and trucks. Lets try to stay at least partly connected with reality, did these buyers really think fuel prices would stay low forever? The final reason is that conventional oil production, where you just drill a hole in the ground and it comes gushing out, peaked in 2005. No wonder oil prices kept going up until peaking at $147/barrel in 2008.

Then the world economy reacted to these high prices. There were potential problems beforehand, like the sub prime mortgages, and the high oil prices were like the push that sends a delicately balanced rock over the cliff and the financial crisis occurred. In the immediate aftermath oil dropped as low as $40/barrel, partly because of demand dropping and mostly due to speculators panicking. It was an amazing time to buy energy stocks or funds. Since that big drop, it came back to a more stable equilibrium, but also by that time more unconventional supplies have been coming on stream, mainly fracking but also more production from the Alberta Oil Sands and farther offshore oil rigs like the ones off Newfoundland. Now there is a temporary over supply. The Saudis aren’t cutting production, hoping the low prices will weed out higher cost producers. When that happens, the price will recover somewhat. That’s why I think it’s a good time to buy big oil companies or XEG.

Do we really have enough oil for centuries? If you just look at what’s in the ground, divided by present consumption, we probably have a one hundred year supply. Keep in mind though, that not all oil reserves are created equal. A lot of that stuff in the ground now is harder to access and will require higher prices to get it out in the future. Some analysts think this boom of fracking in the United States is a short term thing like the 1849 or Klondike Gold Rush. By the middle of next decade the more easily produced oil will be gone, production will go down and prices back up. Meanwhile a lot more people in China, India, or other emerging markets will want to own cars and be more like us in the affluent countries. I wouldn’t worry at all about low oil prices in the long term. If you want to worry about something, worry about the effects of all that extra carbon dioxide going into the atmosphere from burning all that oil.

#160 Holy Crap Wheres The Tylenol on 12.01.14 at 12:17 pm

#155 Bytor the Snow Dog on 12.01.14 at 12:11 pm

A real RUSH fan, one of the best handles Ive seen!

#161 GeorgeSoonToBeRetired on 12.01.14 at 12:26 pm

Hey guys, #146,152 and #156,157

Why all the hate against women?

You make the rest of us men look bad.

You certainly do not speak for me and the women I care about in my life.

#162 TurnerNation on 12.01.14 at 12:26 pm

Hit the exits boys. Even Dollarama imo.

#163 Cato the Elder on 12.01.14 at 12:32 pm

Re: #155 Debunking

Iran imports refined gasoline. Why? It requires a lot of expertise to refine gasoline, and they don’t have the capacity. In spite of all their oil abundance, they have to export it and import refined gasoline. The nation’s that buy their raw oil, and sell them gasoline, make a lot of money without having to produce commodities.

Of course refineries require raw inputs. And those raw inputs can command a good price. But let’s use another example.

How useful is a piece of iron? Not very. But take that iron and use it to make a kitchen knife, or an automobile, or a light fixture, and now you have a useable product.

Japan is the third largest economy in the world. Yet, Japan imports almost all of their raw materials. They create so much value with what they DO with the raw materials that they can command this power on the international marketplace.

There is NO REASON we can’t do the same thing here. In fact, we can do MUCH MORE because the additional costs of complying with international bodies, or trade barriers, don’t exist between provinces. We can use our own raw materials to create finished product.

But we aren’t doing that very much today. Why? Governments have made manufacturing and industry cost prohibitive. It is cheaper to ship our raw materials abroad and have them shipped back already finished. This is madness.

#164 SWL1976 on 12.01.14 at 12:43 pm

#121 juno

Welcome back 1980s.
Its going to be a title wave which hits us

———————————————————-

I believe you mean tidal wave. But, yes, with the exception of 30+ more years of cooked books and the same policies and theories that didn’t work then, and will not work now. We are in for one hell of a ride while this system with a hollowed out middle class collapses in on itself.

I find a lot of people have a hard time digesting this or understanding it, but like it or not reality is about here. I don’t like to generalize, but boomers have a hard time with the facts these days as they have lived a life in prosperous times and have been spoon fed lies by the media and political leaders. I understand it is hard to one day wake up and realize what you thought was real is only a false belief, and the democratic system that was once honored the world over, one that has served you well, has been HIJACKED.

No one knows how exactly all of this is going to unfold, but to those who think we can just keep on keeping on are in for a big surprise. We’re much closer to a totalitarian police state than we are to a free world utopia, best understand that. I prefer the latter and am not a doomer, but I have been paying attention to the warning signs. Most have not, young and old alike. Too many distractions? Humping real estate? Watching bad TV? Who knows? The stage has been set

I wish I knew of some solutions, but I don’t. I know a good start would be…

Cato for PM

Thanks Garth for all you have done while an elected official and even now with allowing us to all share our thoughts and ideas on this pathetic blog

#165 bill on 12.01.14 at 12:43 pm

#153 Cato the Elder on 12.01.14 at 12:01 pm
your curious mixture of humdrum fact and bizarre fantasies is scarcely worth the effort to refute.
I fear it would just encourage you to ‘enlighten us ‘ all the more.
you remind me of the disciple or whatever his/her/its name was.long and thankfully gone.
no doubt your work here is about finished?or will you continue to churn the blogosphere with your bizzare precepts?
tell me ‘cato the elder’
do you advocate starving your slaves when they become sick and unable to work?or should you sell them right away ?

#166 Luc on 12.01.14 at 12:48 pm

New report by ManuLife about people’s expectations on retirement debt free… http://www.ctvnews.ca/business/some-canadians-struggling-to-stay-debt-free-in-retirement-manulife-1.2126864

#167 Luc on 12.01.14 at 12:54 pm

Is the price of food too high? Something is wrong in Ottawa when 50,000 people visit the food bank per month… http://ottawa.ctvnews.ca/more-people-in-ontario-are-using-food-banks-1.2127052

#168 Pre-Retiree on 12.01.14 at 1:00 pm

Matt needs to think about this future relationship very carefully. No matter how truly he may love her, the relationship eventually will die due to money trouble. You really need to be on the same page with your spouse about money or else all fails. And that becomes even more acute once children come into the picture.
And this advice is from a woman:
Matt needs to sit down, do the numbers rationally together with his GF, and if the message does not seem to go though, he needs to think twice….

#169 Marlene Is A Troll on 12.01.14 at 1:11 pm

#150 Marlene from Victoria

Most older guys won’t make it to a seniors home, sorry to be the bearer of bad news.

———————————————————–

Wow, that’s pretty insensitive. I wonder how you got to be such a man hater.

#170 Debunking Cato, Vol.1 Issue 4 on 12.01.14 at 1:23 pm

#163 Cato the Elder on 12.01.14 at 12:32 pm

“Iran imports refined gasoline. Why? It requires a lot of expertise to refine gasoline, and they don’t have the capacity. In spite of all their oil abundance, they have to export it and import refined gasoline. The nation’s that buy their raw oil, and sell them gasoline, make a lot of money without having to produce commodities.”

Iran has approximately enough refining capacity for its domestic needs, produces more refined product than it consumes, and exports more refined petroleum products than it imports.

Sources:
https://www.cia.gov/library/publications/the-world-factbook/geos/ir.html
http://en.wikipedia.org/wiki/List_of_oil_refineries

Do you just make this stuff up, or are you repeating misinformation from elsewhere? What happened to the checker and re-checker of facts? Is that a different Cato?

#171 GTAHouseHunter on 12.01.14 at 1:25 pm

My Mortgage Agent responded after I let him know that I will rather wait:
Thanks and I understand but to be honest people have been waiting for the market to cool down for over 10yrs and things just keep going up. I just sold my house I purchased for $550K 3 years ago and sold for over $700K so just be warned that the housing market keeps on climbing and waiting too long may mean never purchasing.
I think I would rather never purchase then as it seems after all calculation that I am being subsidized by the owner. The owner intends to make money if he is able to sell it a higher price than what be bought at, but taxed as it would not be his primary residence.

#172 Cato the Elder on 12.01.14 at 1:29 pm

Re: #167 Luc

But official statistics only have inflation pegged at a little over 1%!

All those people who can’t afford food must not have got the memo. Food prices have barely budged!

Those numbers they put next to food at the grocery store, as well as the shrinking package sizes, are just silly tricks your eyes are playing on you.

The ‘representatives’ (funny eh?) of the people get paid exorbitant amounts and have gold plated pensions derived from theft (taxes). They are millionaires after serving one or two terms.

You think the suffering of the common people has any resonance with them?

#173 Cato the Elder on 12.01.14 at 1:37 pm

Re: #165 bill

Again, you resort to attacking me instead of providing viable solutions to our problems.

No, I don’t endorse slavery. Slavery is depriving someone of their present life and liberty and is not commensurate with libertarian ideals.

The basis of society is self-ownership – you own your life. Depriving it’s past is theft, depriving it’s present is slavery, depriving it’s future is murder.

See, it’s very easy to build a society based on libertarian ideals. It becomes increasingly difficult to justify all the contradictions and hypocrisy that an interventionist society has. That’s why we’re inundated on a daily basis with nonsense like ‘arming the rebels in Syria’ then a day later ‘we need to attack ISIS!’.

Where we go wrong, is in compromising it away. I am a RESOLUTE defender of free market capitalism and individual rights. I will NEVER back down. I KNOW that it is the most humanitarian, most fair, and most wealth providing system for the most number of people ever devised by man.

Collectivism is evil and has been the basis for all the dictatorships ever created whereby one group of people were considered more important than others.

We don’t get rights as a group, we get rights through our creator as individuals.

Watch this to understand my philosophy. Debunk it if you wish, I would like to see where you feel there are flaws. But will the flaws be in the philosophy, or in your own thinking? We’ve been misled for so long with contradictory policies that it’s hard to distinguish the difference. But once you do, it’s wonderful.

https://www.youtube.com/watch?v=8GazZBvHhgQ

#174 Mike S on 12.01.14 at 1:42 pm

“If the BoC is forced to lower rates we will be entering into one mama of a recession and you can kiss my predictions of a modest housing correction goodbye. Things will be far worse. — Garth”

Bearish today?

No. I don’t see lower rates. — Garth

#175 Fred Smith on 12.01.14 at 1:43 pm

You had me at greater fool. No need to sell so hard by using a short term drop in volatile oil prices. That is just what comodities do from time to time.

#176 Snowboid on 12.01.14 at 1:46 pm

#116 TheRealTruth on 12.01.14 at 2:13 am…

Sounds like we need conservative provincial and federal governments to come in and straighten this out…

Oh, wait a minute…

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

#144 joblo on 12.01.14 at 11:11 am…

The wise professors’ response is correct, we saw it first hand, our purchases were made a couple of weeks ago at BF pricing. Both in store and online.

#177 JimH on 12.01.14 at 1:47 pm

Cato the Elder:
For the love of turkey gravy stop your whining about as hominem attacks!

After all, it was you who referrered to Paul Krugman as an “idiot”!

It is you who constantly refers to all and sundry who fail to agree with your vacuous and pretentious nonsense as “pitiful”, “stupid”, or worse.

Cato, you are the most arrogant, doctrinaire, ideologically blinded, reguritator of internet tripe ever to spew onto this blog.

As for refutation of your nonsense, I and others have posted URLs and links that you fail to acknowledge.

http://azizonomics.com/2013/06/01/the-trouble-with-shadowstats/
http://www.economywatch.com/features/why-yuan-wont-replace-dollar-global-currency.26-03.html
http://gold-standard.procon.org/
http://pragcap.com/
http://pragcap.com/understanding-inside-money-and-outside-money

Take a sabatical.

#178 Victor V on 12.01.14 at 1:50 pm

Many homeowners struggle to balance retirement, debt repayment: survey

http://www.theglobeandmail.com/globe-investor/personal-finance/retirement-rrsps/many-homeowners-struggling-to-balance-retirement-debt-repayment-survey/article21841941/

Close to 20 per cent of homeowners in a new survey say they anticipate having to leverage the value of their home equity to supplement their retirement income.

The online poll conducted for Manulife Bank of Canada indicates that 81 per cent of respondents said being debt-free at retirement is a top goal, but just over half were confident of reaching that goal.

#179 Cato the Elder on 12.01.14 at 1:51 pm

Re: #170 debunking

https://en.wikipedia.org/wiki/National_Iranian_Oil_Refining_and_Distribution_Company#Fuel_imports

Even in spite of this, the point I was making CAN NOT BE REFUTED:

Why is Iran importing ANY gasoline at all? Why can’t the refine ALL OF IT domestically?

The same reasons we have here: too much government. Too many taxes. Too many regulations.

There’s no reason we can’t refine all our own oil. There’s no reason we can’t build our own products.

Instead, we ship it abroad, where the REAL money is made: turning raw goods into finished products.

What a shame.

#180 Marlene from Victoria on 12.01.14 at 2:32 pm

#169 Marlene is a Troll (Detalumis alter ego)

#150 Marlene from Victoria

Most older guys won’t make it to a seniors home, sorry to be the bearer of bad news.

———————————————————–

Wow, that’s pretty insensitive. I wonder how you got to be such a man hater.

___________________________________________

Wow, you are not just a sexist GOOF but math challenged as well.

Men are on average the older person in a marriage.

Men live shorter lifespans on average than women, who are the majority of their partners.

Men who grow infirm are much likelier to be taken care of by their caring younger spouses at home rather than sent to a home.

Men are therefore likelier to die at home before their spouses, and also before their spouses themselves might need to go into a senior home.

Therefore: Most older men will not be in seniors homes.

Duhhhhhh.

Go buy some gold, it suits your intellect.

#181 BillyBob on 12.01.14 at 2:44 pm

Cato,

Just give it a rest will you? The simple truth is, pedantry is boring. You lose any chance at winning some imaginary argument you’re having on the internet – of all things – when people nod off in the first of your eighteen paragraphs.

For awhile it was amusing – the earnestly naive always are. Then it just gets tiring.

We get it. You’re a frustrated millennial saying the same thing over and over. Time to start your own blog.

#182 Vancouver right? on 12.01.14 at 2:45 pm

It’s been a good day for the yellow metal heads, even the sun shines on a dogs ass once in awhile

#183 Marlene is still a Troll on 12.01.14 at 2:47 pm

#180 Marlene from Victoria

Marlene,

I think it’s time for your meds!!!

#184 Rational Optimist on 12.01.14 at 2:47 pm

179 Cato the Elder on 12.01.14 at 1:51 pm

“Why is Iran importing ANY gasoline at all? Why can’t the refine ALL OF IT domestically?

The same reasons we have here: too much government. Too many taxes. Too many regulations.”

(The Islamic Republic of) Iran is a theocracy ruled by the “Leader of the Revolution,” both the highest political and religious authority in the country. In case you were wondering, he is not elected, democratically or otherwise. I tend to agree with you that it has too much government, since it has laws against “spreading corruption on earth” and occasionally sentences foreigners in absentia for “blasphemy,” sometimes to death. Even more frequently does it imprison its own citizens for crimes along these lines. Definitely it has too many regulations, including laws against adultery and homosexual sex, and punishments for same that including flogging and stoning.

I’m not so sure you can make quite as strong a case that Canada has too many regulations, at least in comparison with that.

#185 Snowboid on 12.01.14 at 2:49 pm

#86 Gas prices are still too high on 11.30.14 at 10:56 pm…

Just filled up the beast at our local Glendale AZ fuel stop – premium at .79 CAD a litre. In Kelowna at our usual station it’s still $ 1.359 a litre.

Even accounting for taxes, there is some serious gouging of Canadians.

Is it any wonder the US folks have extra spending money with their gas prices so low!

#186 Debunking Cato, Vol.1 Issue 5 on 12.01.14 at 2:57 pm

#179 Cato the Elder on 12.01.14 at 1:51 pm

“Why is Iran importing ANY gasoline at all? Why can’t the refine ALL OF IT domestically?”

I’m quite sure that if Iranian government or business leadership decided it wanted to be a regional power in oil refining, it could do so.

Iran manufactures televisions, cars and ballistic missiles, and is working on building and launching satellites. That’s a level of technological sophistication where many societies quite rightly say “if the other guy wants to sink capital into a smelly refinery that employs comparatively few people and occasionally blows up, and sell me the output at a low markup, let him.”

This level of economic understanding is two centuries old, and I shouldn’t have to explain it to you.

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

#187 Mike S on 12.01.14 at 3:15 pm

“No. I don’t see lower rates. — Garth”

Be it as it may for the rates, but did you ever see a “soft landing” or “modest correction” for housing or any other asset bubble?

#188 -=jwk=- on 12.01.14 at 3:16 pm

@ #18

Well that sounds just like Los Angeles, which is surrounded by mountains, has no land left and massive immigration. LA only dropped ~ 30-40%. Are you prepared for that in Van?

Housing demand is irrelevant, all that matters is supply of easy money. Nothing else matters, not location, not interest rates and not demand. Free money trumps all.

#189 Jonathan on 12.01.14 at 3:20 pm

While everyone is thinking about oil, here’s something I didn’t think of in terms of the impact of climate change. Air travel will get more expensive and annoying.

http://www.theweathernetwork.com/insider-insights/articles/rising-temperatures-due-to-global-warming-may-make-air-travel-even-harder/40731/

(Warning to deniers: this report is based on the work of actual scientists, therefore the Austrian illuminati were not consulted so it is probably pure garbage so don’t waste your time reading it. May the force be with you.)

#190 Smoking Man on 12.01.14 at 3:42 pm

#135 Holy Crap Wheres The Tylenol on 12.01.14 at 10:26 am

I have a vage remembrance of even writing that…happens everytime I hang out with JD..
That Shit makes me aggressive. You’ll see the difference in the various chapters in my book.

You can clearly tell the difference between , Jack written and wine written..

Sure Garth has a tone in his deleted post archives.

#191 None on 12.01.14 at 3:44 pm

#139 Cato the Elder on 11.29.14 at 2:05 pm

Your son isn’t retarded

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

Hey asshat, watch your mouth.

#192 None on 12.01.14 at 3:55 pm

Hey Cato, are you per chance, an engineer by trade?

#193 Sponge on 12.01.14 at 3:59 pm

Time to buy XEG? …hmmmm (looks into crystal ball)

#194 NoName on 12.01.14 at 4:04 pm

#173 Cato the Elder on 12.01.14 at 1:37 pm

everything works well in theory, if we consider that world is a free market, than everything else is far superior to the libertarianism that you promote, because i dint know any libertarian society in existence, or ever heard of one yet.
and keep in mind that i in my life experienced and l lived thru following social structures

dictatorship
oppressive government
civil disobedience
aggression
civil war
crony capitalism
(who know what is next)

so, plz stop beating a dead horse, and accept the fact that only open and connected society is as free as it can get free, everything else is just _________ (insert proper word).

p.s. we are getting privacy fence soon, so we can enjoy our misery privately. (sarcasm)

#195 bdy sktrn on 12.01.14 at 4:07 pm

#189 Jonathan
——————–
did you even read it?

you are beyond belief!

#196 None on 12.01.14 at 4:08 pm

#179 Cato the Elder on 12.01.14 at 1:51 pm
Even in spite of this, the point I was making CAN NOT BE REFUTED:

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

Cato, you really devalue your posts when you have to resort to shouting. Seriously, what do you do for a living? I’m really curious given your free-market views.

#197 Paul on 12.01.14 at 4:11 pm

#180 Marlene from Victoria
Go Buy some gold
————————————————————-
That was a low blow!

#198 RealistvsExtremist on 12.01.14 at 4:18 pm

Vancouver’s zombie condo’s are now spreading to houses.

http://www.theprovince.com/business/Vancouver+rental+home+supply+dries+with+video/10417103/story.html

Nope….no HAM here.

Denial is not a rivier in Egypt.

#199 Holy Crap wheres The Tylenol on 12.01.14 at 4:20 pm

Told you all where to put your investment stocks in!

http://www.msn.com/en-us/news/us/us-sees-highest-black-friday-gun-sales-in-recorded-history/ar-BBgcQj7

#200 Blacksheep on 12.01.14 at 4:22 pm

Cato the bitter,

Most here recognize the system, as deeply flawed, but your doing your movement a disservice by mixing 70% truths with, 20% unrealistic idealisms and 10 % exaggerations, that are viewed as lies.

Your arguing with the very people you need to align with, if you truly desire systemic change.

Try a little tenderness.

https://www.youtube.com/watch?v=TXmLjbTBcdU

#201 Blacksheep on 12.01.14 at 4:28 pm

“Men live shorter lifespans on average than women, who are the majority of their partners.”
——————————————
Ya…I got a theory, on what shortens these men’s lives.

#202 RealistvsExtremist on 12.01.14 at 4:33 pm

#189 Jonathan on 12.01.14 at 3:20 pm

http://www.theweathernetwork.com/insider-insights/articles/rising-temperatures-due-to-global-warming-may-make-air-travel-even-harder/40731/

(Warning to deniers: this report is based on the work of actual scientists, therefore the Austrian illuminati were not consulted so it is probably pure garbage so don’t waste your time reading it. May the force be with you.)
+++++++++++++++++++++++++++++++++++

AHHHH….the irony to “truthers” like Johnny boy from the FOUNDER of The Weather Network

http://uscentrist.org/platform/positions/environment/context-environment/john_coleman/the-amazing-story-behind-the-global-warming-scam

BOTH SIDES have “peer reviewed” science. And the same types of “peer reviewed science” gave women thalidomide, said there were NO WMDs in Iraq and said Aspartame was safe right? There’s Yoda wisdom for you.

You must “UN-Learn” what you have learned about phony GHG global warming.

https://www.youtube.com/watch?v=BQ4yd2W50No&index=2&list=PL_mEH1XR_aVEKcu4x9mnb4Lq8V0q3qhAs

It’s just a question of whose “peer reviewed” science you believe. I personally do not believe anything that has the word “govt” attached to it.

#203 RealistvsExtremist on 12.01.14 at 4:34 pm

Sorry…..they said there “were” WMDs in Iraq….which there were not.

#204 Bottoms_Up on 12.01.14 at 4:35 pm

The long-long term trend for housing shows it moves only with (wage?) inflation (obviously a departure from that trend over the past 14 years in Canada).

A million bucks….that represents 30 years of full-time work at $20/hr. When your career earnings equal cost of your house you know trouble is up.

#205 RealistvsExtremist on 12.01.14 at 4:35 pm

#201 Blacksheep on 12.01.14 at 4:28 pm
“Men live shorter lifespans on average than women, who are the majority of their partners.”
——————————————
Ya…I got a theory, on what shortens these men’s lives.

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

My wife resembles that comment…..

#206 Cato the Elder on 12.01.14 at 4:36 pm

Re: # 186

The Iranian government could put 100% of it’s efforts into manufacturing something and it still wouldn’t even come close in terms of price or quality to private manufacturers.

The reason is simple – private manufacturers have to give customers more of what they want or they go bankrupt. Governments don’t have to cater to consumer demand because they receive tax revenues even when they are selling a crappy product.

This has been known for hundreds of years and we seem determined to regress back into the dark ages of complete government control. Smith was right, Keynes was wrong.

The greatest lesson in history is paradoxically that men do not learn from the lessons of history.

Socialism does not work. It won’t work once you get your special candidate in charge. It will never work.

Freedom is what has given us all we have to be thankful for. It uplifted more people out of poverty in 300 years than 5000 years of socialist dictators ever did.

#207 Retired Boomer - WI on 12.01.14 at 4:44 pm

#107 Cato The Elder

I tend to agree in part with your post:

Unemployment Insurance, should be limited to 13 weeks full, another 13 weeks at 70% of full EI, then cut depending on EI rate.

Student Loans:
1. Academically “qualified”
2. Their is ‘room’ for new loans based on repayment of old ones.
3. Rare floats with the market.

Yes, by definition “government” interferes with the free market. One HAS to set up some rules to live under. Do we need ALL the rules thus far crafted? NO!! They tend not to repeal “old archaic rules.”

In the US our rule makers worked a whole 135 days last year, which I believe is not a hell of a lot especially for their salaries. Maybe Canadians do better, I do not know.

Yes, there are a lot of programs, boards, and lobbyists who could be trimmed, if not eliminated. We do NOT practice zero based budgeting here, which I believe is a problem and leads to abuse and waste. Having worked for the FEDS for 25 years I can tell you firsthand, no program needs the same amount of money year after year to accomplish things. Some years you need quite a bit less, other years a bit more. The demands of lawmakers set your agendas in part as well as formerly passed enabling legislation.

Always though to decide whose OX gets gored in any fiscal situation. When the nation faces the kinds of long term deficits as we do currently, EVERYTHING should be under review.

#208 MIAB on 12.01.14 at 4:47 pm

#180 Marlene from Victoria

Men live shorter lifespans on average than women, who are the majority of their partners.

Men have shorter lifespans because they are over-worked trying to pay for a $1M house.

#209 Mike S on 12.01.14 at 4:49 pm

“Nope….no HAM here.

Denial is not a rivier in Egypt.”

I heard it is going to be the year of a sheep next year. Do you think the sheep will finally get fleeced in Vancouver?

#210 Herb on 12.01.14 at 4:52 pm

#107Cato,

your “free market” is the green curtain behind which the Great Wizard of Business operates his “crony-capitalist/corporatist system”.

There is no such thing as your ideal free market except in the self-serving corporate/Right Wing ideology you preach. Heck, we were close in the 19th Century, but grew out of it.

#211 Peter The Great on 12.01.14 at 5:00 pm

#20 Rosholt
The answer to your question “RUSSIA”
It’s plan B aimed to undermine Russia in the hope to shift the strategic balance of power for US/EU etc. Its a geopolitical play. How it ends depends on the back room deals made. It’s a clear reminder of the complete manipulation of markets worldwide. I’m no tin foil hatter, this is common sense. A strong Russia means there is no plan A and we can all be thankful for that.

#212 Retired Boomer - WI on 12.01.14 at 5:04 pm

#107 Cato The Elkder

Increasing private sector competition for services government provides SHOULD by all means be encouraged!

It least to more choice, more competition, lower prices.

Take Beer & Liquor. Here in WI we brew beer. A case under $20 At a bar typical bottle of beer $2 mixed drink $2.50 – $3 depending on what you ordered. Neighboring state has stature controlled booze prices nearly double!

That is one example auto insurance is another. Some states do NOT mandate coverage, you buy what you want to buy, others mandator coverage. NY state mandates coverage and minimums. Prices THREE TIMES here for identical coverages. (moved from NY to WI). I’m sure your provincial differences are similar.

A patchwork of rules and regulations, but in general, less is better when we are talking government regulations.

#213 Doug in London on 12.01.14 at 5:13 pm

@Sponge, post #193:
Yes, it is a good time to scoop up some XEG. If it goes down in price then scoop up even more! Buying XEG while it is on sale is a much better deal then selling yourself out to slavery paying the mortgage on a grossly overpriced $1 million house. I almost forgot to mention, HSE pays a yield of 5% at its present price.

@MIAB, post #204: Yes, you are right. They are not only overworked but also grossly overstressed.

#214 Holy Crap Wheres The Tylenol on 12.01.14 at 5:22 pm

#192 None on 12.01.14 at 3:55 pm

Hey Cato, are you per chance, an engineer by trade?
_______________________________________________

Oh God please no, please say hes not an engineer, please say hes not an engineer, please say hes not an engineer.
If he is then I have to hand in my Iron ring!

#215 Marlene from Victoria on 12.01.14 at 5:24 pm

#201 Blacksheep

“Men live shorter lifespans on average than women, who are the majority of their partners.”
——————————————
Ya…I got a theory, on what shortens these men’s lives.

Nope, you and Detalumis and all his aliases are wrong again.

http://www.health.harvard.edu/newsletters/harvard_mens_health_watch/2010/july/marriage-and-mens-health

http://www.bbc.com/capital/specials/protection-now/spotted/married-men-live-longer-study-shows_a-1-41.html

(Of course, Harvard University and the CDC are probably not on your conspiracy/doomer reading list, so they don’t count with you, I would guess. Try reading them s-l-o-w-l-y. )

#216 Holy Crap Wheres The Tylenol on 12.01.14 at 5:25 pm

The only good Cato I knew was this one! Not the same spelling mind you!

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

#217 Derek R on 12.01.14 at 6:08 pm

#215 Marlene from Victoria on 12.01.14 at 5:24 pm wrote:
Nope, you and Detalumis and all his aliases are wrong again.

Detalumis is a woman. She’s been contributing for some time. If you read some of her comments from previous posts, you will see that. Even her comment today implies that she’s a woman. She talked about living in a convent.

#218 NoName on 12.01.14 at 6:25 pm

does this song describes you Marlene from Victoria?

https://www.youtube.com/watch?v=mp7qWfDANrU

You gotta know how to treat me like a lady
Even when I’m acting crazy
Tell me everything’s alright

lyrics
(http://www.azlyrics.com/lyrics/meghantrainor/dearfuturehusband.html)

#219 Holy Crap Wheres The Tylenol on 12.01.14 at 6:41 pm

#201 Blacksheep on 12.01.14 at 4:28 pm
“Men live shorter lifespans on average than women, who are the majority of their partners.”
——————————————
Ya…I got a theory, on what shortens these men’s lives.
—————————————-
That is the greatest news I’ve heard in a long time. Perhaps I can finally get some rest blah blab blah blab blah. I love my wife and all but holy crap I don’t think I want to live forever.
Perhaps I’ll get to even go out guns a blazing with my boots on!

#220 80'sKid6$4 on 12.01.14 at 6:45 pm

#90 Lillooet, BC
I’d love to live in a small town, only thing stopping me is that annoying little detail of finding employment there.

#221 Blacksheep on 12.01.14 at 6:51 pm

Miss Marlene,

“Nope, you and Detalumis and all his aliases are wrong again.”
————————————————
Your reading comprehension skills appear weak, let me help.

Never debated whether married men, have shorter or longer life expectancies than unmarried men. Never debated whether men do, or do not expire sooner than women.

I simply stated, I had a theory on what shortens these married men’s lives, because the do of course, live statically shorter lives, than their female partners.

But thanks for the response and irrelevant links.

#222 jess on 12.01.14 at 6:59 pm

north sea oil

http://www.thisismoney.co.uk/money/markets/article-2854075/Reduce-burden-ll-pay-cost-closing-wells-Taxpayer-facing-20bn-bill-oil-price-plunges.html

#223 wha tha? on 12.01.14 at 7:18 pm

#9 Role on 11.30.14 at 2:46 pm

Perhaps someone was already into the Grey Cup par-tay spirit?
can SM can interpret for the rest of us?

“Friends don’t let friends drunk comment on blogs.”

#224 Whipster on 12.01.14 at 10:58 pm

Forget having a million…what if you have 6 million? What a bargain just down the road from a coal port…gotta love bc realtors!

https://www.ecorealtyinc.ca/bc-real-estate-listings/tsawwassen/mls-V1095011/604-5055-Springs-Blvd-Tsawwassen-V4M0A5?id=261390122

#225 TheRealTruth on 12.02.14 at 5:00 am

Cato:

Don’t let the negative comments here phase you. Most on this blog are too far gone to be rescued..

Waiting 6 years for a housing crash? Really? And no discussion of restricted land use policies and concentrated immigration? Really?

#226 Observation Post: GTA on 12.02.14 at 11:51 am

#61 Carly in Cabbagetown
#53 bdy sktrn

boards and community groups providing services and connections among urban women
—————————-
ah, i don’t think these types were ever driving any type of RE market. most buyers are not needing ‘community services’

——————————————————————

You might want to revisit your comments. Some of the women’s and community groups I refer to are based in neighbourhoods where house prices average over one million, and many of the board members are advocates for alternative housing are from very wealthy and well connected families, connected to private schools and social clubs across the city.

Go Carly! You’re right on the money to note that new housing models for aging will likely start at the top with the moneyed elite who have the resources to shape them to their liking. Community services doesn’t not necessarily mean welfare for the poor; they refer to services based in the community, that is all. In any case, demographic forces have even great power than ’emergency’ low interest rates/CMHC guarantees (which have been bad enough) to reform the prices in the housing market.