Exiled in Ajax

NS realtor sells green homes only

New homes being built on an assembly line just outside of Toronto.

Hello Garth. I don’t know if you have time to respond to personal emails like this but I have been reading your “Greater Fool” website. I have not yet read your book but plan to as soon as I leave work today. My husband and I bought a 1250 square foot semi in Ajax, ON in 2003, we moved in in 2004. We moved to Ajax from East York because we could not afford to buy a house in Toronto even though we would have preferred to do so. We bought a small home because we didn’t want to buy more than we could afford even though we were now having to commute and still had childcare to pay for. We paid 191,000 for the house. I know that back in 2003 the market was very much in its upswing. I’m wondering you would assess that we paid too much for that house and if we decide to sell next year (when our five year mortgage comes up for renewal), if that would be a mistake?

I would appreciate any advice, guidance, thoughts that you have time to offer,


There is no correct answer to the questions, since this is your principal residence and it needs to be right for you – your space needs, location and financial reality. How far do you commute? If you have to drive back into the city every day, that’s a two-hour round trip in decent traffic, and three in bad weather. How much does that cost now, at $1.30 a litre? What’s your house like? Modern construction techniques – especially on lower-priced link homes – are appalling, and the life span of these places will be desperately short, before subflooring needs replacing within 30 years (most East York homes are in good shape after eighty).

I have no way of knowing if you paid too much, but at less than $200K, I seriously doubt it. As to selling, why delay? The market’s just starting its decline now, with listings rising and sales falling. Price levels will be next, and by this time next year we will be in the full flower of a widespread correction. What on earth are you waiting for? Sell now with a hefty deposit and a long close, then buy that home in the city at a reduced price and with far better long-term, prospects.

HI Garth,

We are in the process of selling two condos in Kingston, Ontario. I am also currently reading your latest book trying to gain some insight about whether to then buy, rent or live full-time in our RV. We are considering re-locating to Ottawa to be closer to family and because we really like this city. Any advice?


Good time to sell, bad time to buy. You’ll do much better next year than now, so rent. As for living in your RV, well, if chemical toilets and sleeping in a closet turns you on, knock yourself out.

The Ottawa market has yet to feel the sting of what’s coming, partly because price increases have been more moderate than the GTA, and partly because of a couple hundred thousand civil servants and the bubble economy the feds have created there. However, this is changing. The condo building I rent in – the city’s most upscale – has a supply of units for sale which cannot find buyers. BTW, my landlord, an investor, subsidizes me heavily, as do virtually all condo owners these days. Poor sops.

Mr. Turner,

I just enjoyed finishing your new book. After reading it I have an unanswered question regarding waterfront property in central Ontario (Bancroft, Muskoka) area. I have always wanted to purchase a property up there but have found the prices to be out of control. You referenced the Florida real estate taking a dive so would it be foolish to think it would not happen to Ontario’s cottage country? Going by the population pyramid in your book and your advice to homebuyers to purchase where the boomers are. Is it safe to say that these summer destinations will be immune to any real estate dive since boomers may move there after retirement? If it is not safe, what area of Ontario should i be looking at in order to get the most value for my cottage dollar?

Thanks for taking the time to read my e-mail.


One of the greatest myths perpetually perpetrated by the real estate industry is that cottages – especially in the orb of magnificent, world-class (gag) Toronto – are immune from market swings and will always climb in value. The reality is just 7% of the Canadian population own recreational properties, which means the other 93% do not.

Another reality is that a large number of these seasonal places are financed with money borrowed against the equity of urban residences. That means when city real estate starts to be pinched, financially stressed owners will dump the cottage before they part with their principal residence. Already sales levels in Muskoka, Collingwood, the Kawarthas are in decline. By this September prices will be in full retreat.

Hi Garth,

I read your book and am very quickly becoming addicted to this site. I live in Regina, where real estate has shot up like a roman candle. I sold my home a few months ago, and we made a tidy profit. I am watching this whole situation with disbelief. The media and realtors continue to tell everyone we are in a boom. Yet, except for a few more restaurants nothing has changed here. My wife and I plan to move to Edmonton area, but with their market blossoming, I don’t think we will be buying too quick. Am I wrong on my perception of what may be happening here. What are you seeing and hearing at your end? Is Saskatchewan turning into the mega powerhouse as everyone thinks? Your thoughts please and maybe some words of advise. Thanks and keep up the good work.


Regina and Saskatoon are flukes. Prices were unbelievably low by the standards of most Canadian cities, so when oil money sloshed in from Alberta, and as the potash business took off on the back of a global agricultural crisis, the reaction was predictable. The rush higher in prices represents a catch-up phase for these prairie cities, and most of the gains will hold. I’m glad you sold and made some money, so don’t blow it now.

Edmonton’s market has retreated substantially over the last year, and is now a haven for buyers. If you shop hard and bargain even harder, you should be able to translate a middle-of-the-road Regina house into a starter home in the Albertan capital. If you are smarter, you’ll buy in one of the communities which ring it, and where prices have plunked back to earth.

Addicted to this site? You could do worse.


#1 Brent on 05.18.08 at 11:44 am

I wouldn’t be buying in Edmonton or surrounding area now. The meltdown has just started and with listings growing daily (15,000 today) prices will only continue their decent.

#2 Brent on 05.18.08 at 11:50 am


An environmental quagmire

#3 Marg on 05.18.08 at 2:59 pm

Once again Garth, I find you are way off base.
As a real estate broker in the Collingwood area, you may think I want to perpetuate some myth however, the reality is that we want to advise our clients well. Let’s look at facts:

From Jan1 to May 18th this year, there have been 503 residential sales in our area compared to 533 at this time last year. When you factor in the huge amount of new home inventory that is not captured in those stats and, was not available a year ago, our sales numbers are actually up! Our average sale price has also climbed by 6.3% since last May.

You reference areas like ours as being recreational in nature which proves to me that you do not have a true understanding of our marketplace. Our market is driven by new full-time residents moving into the area who are looking for a lifestyle change. Retirees, entreprenuers, employees; they’re all getting off the Toronto smog train. These are not week-end warriors but rather, new residents putting down full-time stakes. Our population is projected to grow by some 70% over the next few years and if you follow the Places To Grow initiatives, you would know that Simcoe Country is the second fastest growing region in North America. Yes, in North America. On top of that, for your fellow considering waterfront, he should know that the sector showing the strongest price appreciation in our area are properties valued at over $1,000,000 dollars.

I would suggest your readers are better advised to read David Foots “Boom, Bust and Echo” which presented a far more realistic forecast based on solid demographics.

His book is twelve years old. I hope your clients are given more timely advice. BTW, the high-end resort properties at Blue Mountain, I hear, are going begging. — Garth

#4 vultur on 05.18.08 at 3:34 pm

For once I agree with Darth. This Collingwood broker is really reaching with her rosy picture comments. I also hear that there is a lot of weakness in the Collingwood market due to rampant speculation on leisure properties.

Call me crazy, but 533 to 503 is a 5.6% drop in sales anyway you slice it. I’m not suggesting that’s a sales crash, but the numbers don’t lie.

#5 Suzukimum on 05.18.08 at 4:04 pm

“The Ottawa market has yet to feel the sting of what’s coming, partly because price increases have been more moderate than the GTA, and partly because of a couple hundred thousand civil servants and the bubble economy the feds have created there. However, this is changing. The condo building I rent in – the city’s most upscale – has a supply of units for sale which cannot find buyers. BTW, my landlord, an investor, subsidizes me heavily, as do virtually all condo owners these days.”

Mr. Turner,

Like other major cities, the condo market in Ottawa is feeling the effects of down turn first. I have noticed that about 90% of the houses listed here in the Kanata and Stittsville are sold within 21 days. The RE market here seems to be “strong” and “stable” as most RE agents will tell us. In your view, how bad will the sting be on the Ottawa RE market considering the government is the main employer here? How far do you expect the prices of SFH and townhouses to fall?

#6 Marg on 05.18.08 at 5:21 pm

Hi Garth
The high-end units at Blue are indeed going begging and they have been long before the sub-prime and/or dollar crisis hit. They are condo-hotel units which are a completely separate entity from the main street real estate market. Would you compare time share sales to condo sales? It would be like comparing car sales to horse sales.

#7 vultur on 05.18.08 at 9:08 pm

Sure Margggg, b/c those timeshare/fractional ownership suites will eventually get dumped on the market in Stinson-esque fashion and end up flooding the mls with additional discounted product.

You wear that broker label as a badge of honour whereas you should be wearing it as a shield.

#8 Anonymous on 05.19.08 at 12:46 am

Huge real estate problems in Alberta. Oil and NatGas are both at record highs and yet real estate prices are coming down. Edmonton overbuilt big time. There will be layoffs in the residential construction sector over the next two years.

And construction has been the biggest driver of employment for Edmonton (although people don’t want to acknowledge this fact).

#9 Dom-GTA on 05.19.08 at 9:24 am


Construction fueled jobs and gains is exactly part of the problem. Not only is inventory increasing but as builders slow production and construction workers are laid off this will be an increased issue. In California there was an article that indicated 1/3rd of all jobs are construction related.

First think about the construction workers, and the go all the way down the pipe to see what the additional effect is. Even the strippers and bars will feel the pinch as disposable income dry’s up.. :-)

Good luck!

#10 $fromaSia on 05.19.08 at 10:07 am

Garth, if we really want to see a real correction then why doesn’t the government go after all the suite income of landlord home owners. Out here in Vancouver theres almost two suites paying for each mortgage. It’s really a huge facter in Vancouvers high real estate market. Suites are a necessity now for affordability which is wrong if it’s not taxed properly. I was hoping that the Canada home senses would discover that so many families would be living under one house hold and be able to recocnise loose ends here.

This would be a complete reversal of what happened when zero down and 40 year morts were introduced.

This situation is why working professionals are priced out and cab drivers with suites are priced in.

Truley pathetic….

#11 $fromaSia on 05.19.08 at 10:10 am

Answer to #8.

A big part of Canada’s economic engine runs on immigrants not fuel.

Vancouverites aren’t having babbies and immigrants bring cash.

#12 vultur on 05.19.08 at 12:03 pm

^you’re nuts!

Average prices for sfh in Calgary go from $250,000 to $450,000 in 3 years and have now leveled off and you consider that to be huge problems?

The city is BOOMING- jobs, jobs, jobs- and will continue to do so for the foreseeable future.

#13 lor on 05.19.08 at 12:45 pm

it is interesting to see what is happening to the alberta real estate market as it will eventually arrive in saskatchewan. the wages havent increased anything to speak of yet it costs more to live in saskbush than alberta. and now the market is flooded with listings in the numbers havent seen in 16 years. and approx. 1/2 are empty or renter occupied. you can sense the desperation of the speculators trying to pull out of this market as quick as they drove prices up.

#14 Another Albertan on 05.19.08 at 2:32 pm

Another random, anecdotal Edmonton+Calgary data point:

After swapping info with other consultants and polling a few business owners, we’re all noticing a significant increase in the number of clients that are no longer paying their bills by the standard net-30 contracted terms. Many invoices are stretching up to and past 60 days before payment is being received. The late payments are not limited to a specific sector or size of business- it’s essentially across-the-board. The general trend is that this started in the Dec/Jan time frame and became more noticeable starting in Feb. Just about everyone noted that some of their “best” (immediate payment, never been overdue, etc) customers are now taking up to the full 30.

We’ll continue to watch this.

#15 Brent on 05.19.08 at 5:29 pm

vultur your living in the past and hoping.

#16 vultur on 05.19.08 at 7:58 pm

That’s a very enlightening statement Brent. Remind us again of your permanent living status- back of a van is it?

Someone not stable enough to possess a permanent address is probably not qualified to offer opinions on the real estate market. That’s just a guess.

#17 Shaj on 05.19.08 at 8:22 pm

For those interested, I found this in the weekend Post Real Estate section. The B.S. machine continues…..This is textbook, right down to the Polzler quotes.


For best value, head to the suburbs
Newbies can also go for long-term mortgages

John Morrissy, Canwest News Service
Published: Saturday, May 17, 2008

According to a Re/Max survey, “first-time buyers remain steadfast in their determination to purchase a home.”
First-time buyers lured by 40-year mortgages and low or no down payments are supporting a housing market challenged by higher home prices and tight inventory levels, real estate firm Re/Max said in a recent report.

Even if it means sacrifices such as purchasing a smaller property, taking longer to pay it off or living in a less-than-ideal location, first-time buyers “remain steadfast in their determination to purchase a home,” the report stated.

“Innovative financing” is now the key to home ownership in today’s environment, the report said, with longer amortization periods being used by 62% of first-time buyers. Low or no down payments were popular with 38% of surveyed buyers, it added.

While that may conjure comparisons with loose lending standards in the American subprime-ravaged housing market, Michael Polzler, Re/ Max’s Ontario-Atlantic regional director, said mortgage qualifications remain tougher in Canada.

“If the client is perceived of being a risk in Canada, it’s much harder to get this type of financing,” he said. “A 40-year mortgage allows them to jump into the game and capitalize on home-price gains.”

Adrian Mastracci, a Vancouver-based portfolio manager with KCM Wealth Management, referred to such mortgages as the “Freedom 95” plan, in reference to the Freedom 55 retirement plan once popularized by London Life.

“The banks will love you because you’re going to be paying for life,” Mr. Mastracci says. If people don’t speed up repayments on such debt, they will find themselves paying it off well into their senior years, he adds.

“With a 40-year mortgage, you’re not buying, you’re just leasing long-term,” and will spend the first 30 years making mostly interest payments.

Nevertheless, Mr. Polzler says, such measures let younger buyers to get a toehold in a real estate market that’s been on a seven-year bull run and is only now easing slightly. The Canadian Real Estate Association recently reported sales fell 7.1% in the first quarter.

Inventories “remain one of the foremost concerns facing purchasers across the country,” the report said, and represents an obstacle to entry in three quarters of the markets surveyed.

This is keeping prices on a rising trajectory and forcing new buyers to look at alternatives like smaller condominiums outside out the downtown core, Mr. Polzler says.

The best values continue to be found in the suburbs, the report said, adding condos in new developments and conversions of rental buildings offer the next-best alternative.

#18 Shaj on 05.19.08 at 8:36 pm

I should add that I’m glad they included the quotes from Mastracci. Balances things out a little and maybe makes people think twice before taking such a mortgage on.

#19 harbottle on 05.19.08 at 10:37 pm

drop of 7.1% in a quarter is “easing slightly”? haha love the spin.

#20 Keith in Calgary on 05.20.08 at 12:21 pm

Let’s see…….14,500 +/- listings in the greater Calgary area……and about 1,800 a month average combined unit sales over the last 6 months……that’s 8 months of inventory for sale, with new listings growing each and every day and holes being dug in downtown Calgary for 200+ unit high rise condos…….another 10K or so to be competed in 12-18 months.

Yep…….things are booming all right. RE as an investment (when all it is supposed to be is shelter) is literally exploding right before our eyes.

BOOM !!!

#21 Peter on 05.20.08 at 5:08 pm

These Remax and R.Lepage boys are the real PUMPER of real Estate in Canada (they asked you to buy buy buy but not sell sell sell, i never recalled any article saying they ask people to sell their homes) …With Genworth & CMHC & our govt fired the FLAME UP and you will see where is the GREASE coming from and Where is the BUBBLE coming from…!!! CONSEQUENCES …Remembered this word !!!

#22 Brent on 05.20.08 at 7:01 pm

vulture, to funny bud.
The pyramid game is over, you didn’t know?

#23 leatherdale on 05.20.08 at 9:44 pm

everybody get your head out of the sand and smell the coffee!


#24 My_View on 05.21.08 at 10:08 am

Hey Linda,

Nice of you to join. Love your sun columns and show. Keep up the good work.

#25 vultur on 05.21.08 at 12:12 pm

Brent, what do you know of pyramids- you live in a tent!

No one here (or anywhere) will take your opinions on the housing market seriously until you acquire a permanent address. If we’re looking for the best roadside motels in central florida we know who to call on.

#26 Anonymous on 05.21.08 at 12:49 pm

So Linda, I am not sure I understand your post…are you agreeing with what is being said on this blog, or do you think it will not get so bad?

Great column (The Sun) by the way, read it daily.

#27 SMWhite on 05.21.08 at 3:18 pm

As for the Leatherdale article in the Sun, I guess it comes down to whether or not those in the area of reporting and commenting on finance in the media want any credibility or not in the next decade.

Do you keep plugging RE to garnish more advertising revenue for media or do you do your job as a reporter and serve in the interest of thr truth?

I don’t feel bad for the RE industry, they’ll have to get used to only wheel barrows full of cash instead of the dump truck loads they’ve been collecting the past 8 – 10 years.

#28 My_View on 05.21.08 at 4:04 pm


Garth Turner as a guest on your show anytime soon?

#29 Michael on 05.21.08 at 4:47 pm

Glad to hear that the Saskatchewan market is sound. After much waffling back and forth, I finally decided to buy a small condo in Saskatoon as the realtor says that over the next year and a half this unit will likely net between $100,000 and $150,000 depending on how fast the market continues to rise. Even if the worst case scenario happens and I only make $100,000 minus expenses on the unit, I will still be a very happy man. Keep on booming Saskatchewan, me and my friends who have similar investments are counting on you out East. :)

#30 Brent on 05.21.08 at 6:14 pm

No vulture I’m back at home in this DUMP they call Edmonhole for the moment, hopefully it’s a short friggen moment!

#31 lor on 05.21.08 at 11:22 pm

so michael what real estate agency in saskabush do you work for? do you honestly think if you say the things you are saying they will come true? or do you think people are dumb enough to believe the hype? any way if you are seriously going to buy into the so called booming sask market why wouldnt you do your homework to see that the market is now flooded with listings and a lot of those are empty condos that arent moving. my guess is you are an investor already in that market and you have resorted to hype and propaganda to try and drum up interest in the sinking ship that is sask real estate. any educated buyer would spot your sales pitch a mile away.

#32 wealthy renter on 05.21.08 at 11:31 pm

“So Linda, I am not sure I understand your post…are you agreeing with what is being said on this blog, or do you think it will not get so bad?”

I have been googling Toronto real estate articles for years, and Leatherdale has done a significant number of columns on the subject over that time. In one article, she was questioning a buyer who bought an investment condo where I used to live in Bronte, a part of Oakville.

She is white bread, non-committal on whether there is a bubble in Toronto. The articles are always like the one in the link – housing is going to stabilize and probably not drop, but shop around and be careful not to get too extended…blah blah blah. Take a position!

I suspect she is in the bubble camp, but at the very least, definitely not an industry shill.

I still hate the Toronto Sun. :)

#33 EssGee on 05.22.08 at 12:03 am

Michael…worst case scenario is loosing your entire down payment and being in the hole $100,000.
I love how people take investment advice and accept economic forecasts from realtors. Here’s some food for thought: to become a realtor in Canada, you don’t even need a highschool education.

#34 vultur on 05.22.08 at 12:07 am

Glad to hear you’ve come home to roost Brent. You must find some appeal for the comfortable surroundings of our tolerant and accepting culture, don’t you?