Home prices set to rise by 3.5%”

Breaking news: “No housing bubble”

For the first time in 10 years, housing prices across Canada are going down, not up. It’s as I predicted some time ago here, and the logical result of a collapse in sales. Nationally, real estate deals are off by almost 20% and in some places, like Vancouver, it’s 40%. There’s more to come, especially in the wake of the mortgage bomb Jim Flaherty lobbed last week. As a result, everybody’s house will decline in value, whether you bought it last week or 40 years ago.

But this is not just about houses. Real estate is but one canary in the bottomless shaft.

As you may know, oil prices took the biggest tumble in 17 years on Monday because traders now think the US economy is in even worse shape than we all imagined. About 90 American banks are expected to fail in the near future, just as Indymac did on Friday. (People started lining up at 4 am on Monday outside Indymac branches, desperate to get cash out.) The Securities and Exchange Commission found it necessary to bring in a new emergency rule yesterday to prevent short selling in mortgage giants Fannie Mae and Freddie Mac, which are on their way towards a bailout by Washington.

GM is laying off 4,000 more people, all of them white-collar managers, and rumours persist the company won’t make it. The Bank of Canada warned the economy is slowing and inflation is rising, with the slowest growth in 17 years, which likely means Ottawa will be going into deficit next year. Oh yeah, and the Toronto stock market lost almost 400 points. Said my pal Sherry Cooper at Nesbitt Burns: “It’s about the financial crisis in the U.S., which has caused contagion worldwide.”

This will get worse. The housing market will dry up, job losses will mount, the stock market will decline, the economy will slip into recession and we’ll be paying handsomely for the real estate, credit and consumer binge that’s been upon us since Nine Eleven and the overblown collapse of interest rates.

It may not be politically sexy to tell you this. But I’m not going to lie to be popular. I’ve been a personal finance author, analyst and commentator for decades, and when I see a turd, I’ll call it one. Unlike Mr. Klump, I won’t try to polish it.

Canadians have never had this much debt, in mortgages, lines of credit, on credit cards, car loans or consumer loans. At the same time, the after-tax savings rate is zero. Eight-tenths of all the wealth is in housing, and I think you can tell which way that’s headed. Making it worse are the highest energy prices ever, which sap away family cash and will render this winter a tough one indeed.

There’s nobody to blame for this, but us. We watched too many episodes of “Flip this House,” bought too many plasma TVs, added too many granite counter tops, borrowed for too many vacations, let too many married kids buy houses when they had no money, listened to experts who were shameless self-dealers and voted for politicians who promised more, not less.

The American economy’s been hobbled. Must we follow?


#1 Mike.slob on 07.16.08 at 11:13 am

MLS data for June shows first decline in nine years!
It’s not true.
When I watched on MLS,properties in GTA are still higher with asking price from January/08 year between 5% and 15 %. It’s still remaining a good Sellers’ market.
“June Market More Balanced?” said TREB President Maureen O’Neill.
I don’t think so. Because today 80% of new listings in GTA are more expensive from April and May/08 about 10K- 30K…. Good decline in GTA?

The price decline was nation-wide. Individual markets vary. Sales in the GTA are off 18% and I guarantee prices will follow. Just wait. — Garth

#2 pbrasseur on 07.16.08 at 11:37 am

The strength of an economy is measured by its hability to recover from crisis by having some sectors taking over for those that are down.

For this I have much more confidence in the US economy than in ours (or the European economy). (in particular the weak $US attracts investements and boosts exports)

Canada has been riding on two things:

1 – Real estate
2 – Commodities and ressources

Commodities are going to stagnate (ar best since world demand will slow) while RE we all know where that’s going.

What other sectors do we have to pickup the slack? Answer: not much.

The west should still do ok but central and east may suffer a lot.

#3 Brian on 07.16.08 at 11:44 am

Please forgive what is probably a naïve question but I’m totally ignorant when it comes to economics. When a bank goes bust, like Indymac did, and people are lining up to get their cash out, what happens? Do all those people lose their cash?

I understand that this is what happened in the crash of the 1930s but surely that only happens when you have entire banking system failures, no?

I do understand that the FDIC (US) and CDIC here in Canada are there to insure deposits (to $100,000 for the CDIC) but surely just like any insurance, *everybody* can’t get paid out.

And if the FDIC did cover Indymac depositors, and the CDIC would do the same for a Canadian bank failure is there really any point to lining up outside the brick and mortar institutions when a failure happens?

#4 brazer on 07.16.08 at 11:46 am

“As you may know, oil prices took the biggest tumble in 17 years on Monday because traders now think the US economy is in even worse shape than we all imagined.”

another tumble today…….

#5 Mike.slob on 07.16.08 at 12:02 pm

Today,Toronto stock market TSX hit bottom 13,168 and one month ago was 15,154.

From Statistics Canada ,July 11/08:
In June, employment declined by 24,000 in Ontario, pushing the unemployment rate up 0.3 percentage points to 6.7%.
The unemployment rate in Canada edged up 0.1 percentage points to 6.2%.

“After 15th October, the new rules will likely contribute to the cooling of the housing market.”said TD Bank deputy chief economist Craig Alexander.
Sales in the GTA are off 18% and we can see still high inventory levels (+22%).

“June Market More Balanced?” said TREB President Maureen O’Neill.
I don’t think so. Because today 80% of new listings in GTA are more expensive from April and May/08 about 10K- 30K….and when the drop of prices will follow?

Sales in GTA are significantly lower than in the banner year that was 2007, but they are also returning to before 2004-2006 levels between 78,000 to 81,000 sales in 2008.
Toronto Area is experience 13.8-per-cent lower sales for the first six months.”
It’s still remaining a good Sellers’ market, when avg. prices still going up…..

About Residential ReSales in GTA in 2008:

Jan.2008 sales decreased 2.1%
Feb.2008 sales decreased 11.2%
Mar.2008 sales decreased 22.2%
Apr.2008 sales decreased 7.3%
May.2008 sales decreased 16%
Jun.2008 sales decreased 18%,avg.price up, and and a 22 per cent increase in inventory.

Residential ReSales in GTA from Jan. to June:

2008. 43,685 sales sales decreased 13.8%
2007. 50,648 sales
2006. 45,797 sales
2005. 44,771 sales
2004. 46,398 sales

Toronto building permits down 12.2% in June/08.

My Real Estate prediction for July 2008:
Sales volume in GTA will be down between
18% and 23%.

#6 Mark on 07.16.08 at 12:04 pm

Anyone think the Banks in Canada are going to get the same punishment as the US?

#7 brazer on 07.16.08 at 12:14 pm

#3 Brian

The US gov stepped in and took over IndyMac last Friday (IMB now renamed IndyMac Federal), thus US taxpayers will be on the hook from herein where that bank is concerned.

As for insurance, yes, $100K is insured, but based on how dire cirumstances are there is no guarantee how fast and how how much of that $$$ would get paid out hence folks lined up to get their savings out asap.

We are living in dangerous times…

#8 MAH on 07.16.08 at 12:16 pm

Mr Turner,

You are nothing but a market sapping liar! I read a few reviews of your books and realized how little credence people in your field give to your opinion. My prediction are that, Oil will continue to fall to about 120.00 per, just enough to keep gas prices higher, and just enough disincentive for the public to vote for your green shaft. Real estate will rebound spring of 09 and the TSX will recover when oil finds its new equilibrium by December this year. Inflation will also trend downward after December as oil prices decline. Its the Market stupid! Now stop your chicken little rantings, and start offering a balanced view of things. You did more damage to real estate with your big mouth than any policy change ever could. But thats what you Libs want. Enough failure in the economy to get your party elected. You all delight in each new market down turn. That, sir, is wishing the worst for Canadians so you can get your party elected. A dirty motive and a dirty attitude if you ask me! The more I see and hear from you Libs the sicker it all sounds!

#9 brazer on 07.16.08 at 12:27 pm

#8 MAH

“You did more damage to real estate with your big mouth than any policy change ever could.”

the idea that garth, through his interviews, blogging and book-writing has caused a collapse in the RE industry is an interesting one.

is it your view that he is responsible only for the bust in Canada, or also for the multi-trillion dollar collapse in the markets globally?

your clarification is appreciated.

#10 smwhite on 07.16.08 at 12:38 pm

– You did more damage to real estate with your big mouth than any policy change ever could. –

Looks like another that has hit “anger” on the kubler-ross model…

MAH, if ignorance is bliss your one happy sun of a gun.

You have the raisins to blame the short comings of the worlds economy on GARTH TURNER, are you for [email protected] real? I’ve been following this train wreck for the past five years, Garth’s opinions ecos the majority of contrarian investors world wide, not whinny pricks like yourself and your perpetual real estate fantasy.

Garth I never realized you had that much power but its the same sham that I’ve listened to since 2005 when real estate “experts” were raving to Dean Baker and Peter Schiff that if you keep up this “negativity” it will become a self fulfilling prophecy.


Now MAH get back to the herd… Moo Moo

#11 lgre on 07.16.08 at 12:42 pm

MAH – another person with an overpriced house who cant loose as much as 5% of its value…LOL

Haters everywhere

#12 Rob M on 07.16.08 at 12:44 pm

MAH – since when is being a market bear a criminal offence? or were you just paid by the Tories? your comments are weak at best.

At least Garth is for the most part substantiating his analysis with some facts, unlike you [realtor? vested bull?] – I don’t agree with everything he says myself – but to blame him is hilarious.

To his credit, whether book- or even politically-motivated at all, he is one of the few to NOT drink the koolaid. If he has a soapbox, all the better for all of us.

You’ve missed the point that we’re long overdue for a ‘correction’. Give your head a shake.

If you’re not a paid Tory ‘PR person’, you should have sold off whatever garbage asset bubble you’re entrenched in…live with it and man up.

#13 Brent on 07.16.08 at 12:45 pm

braxer wake up and smell the coffee!!!
You honestly think a blog or a book is the catalyst that is bringing down real estate prices world wide?
Frig, I can’t believe someone could think so stupid!

#14 Kevin in Winnipeg on 07.16.08 at 12:48 pm

I am still waiting for some solutions from our fearless whistle blower.

What would Garth Turner do to fix the problem? Can’t do the “I told you so” bit forever.

#15 Brent on 07.16.08 at 12:48 pm

Sorry, I mean’t that post for MAH

#16 Mike.slob on 07.16.08 at 1:11 pm

Wow,Again angry seller or you can’t
“Flip your House,”…
“Real estate will rebound spring of 09”, what rebound?
In Toronto Area is still remaining a good Sellers’ market, when avg. prices still going up about 4% …..
You and Realtors did more damage to real estate with 10% increase of the prices in the last 6 years than any policy change ever could.
Its the Market stupid! Will see…
You are stupid MAH,because spring of 09 is too far,we have to see more statistics for next 8 months and just remainder bellow:

About Residential ReSales in GTA in 2008:

Jan.2008 sales decreased 2.1%
Feb.2008 sales decreased 11.2%
Mar.2008 sales decreased 22.2%
Apr.2008 sales decreased 7.3%
May.2008 sales decreased 16%
Jun.2008 sales decreased 18%,avg.price up, and
a 22 per cent increase in inventory.

My Real Estate prediction for July 2008:
Sales volume in GTA will be down between
18% and 23%.

#17 Jon B on 07.16.08 at 1:12 pm

A lot of ground covered in this post. Anyone want to take a stab at what will happen to the relationship between the US and Canadian dollar in the next 12 months?

#18 Joe Realtor on 07.16.08 at 1:13 pm

I wouldn’t put much stock in anything the TREB President says.

Last year while those of us in the field were trying to deal with what became known as “phantom” offers, she was in her office saying that they weren’t a problem, and that the existing “system allowed for appropriate transparency”. I suppose that would have been the case if there had been a “system”.

Not that phantom offers are happening as much now, but it speaks volumes as to her ability to spin.

#19 Viking on 07.16.08 at 1:17 pm

MAH, why are you getting so personal with the attack? You talk about balance… do you think the Real Estate board presents balanced viewpoints when they post their monthly numbers (i.e. in Vancouver with sales down 40% and listings up 30%+ they say ‘return to balanced market’). Aslo do you think newspapers also present a balanced perspective when real estate advertising is their cash cow?

Garth has one perspective. The other perspective can be found in any number of publications. Yes, the truth is likely somewhere in between.

As to who has done damage… I feel sorry for those people who have been buying at the peak of the market with zero down and a 40 year amortization. If pricing corrects 20-30% (typical in housing downturn) their financial position will be a mess that will take years to dig out from. Yes, Garth does have a large following but please his ego is large enough… to suggest that he is responsible for the impending collapse is more than a little humorous.

#20 Jord on 07.16.08 at 1:18 pm

@ MAH,

“Its the market stupid!” I think you missed your own point. To say that Garth’s book caused the turn around in the Canadian real estate market, while ignoring the fact that the market’s underlying fundamentals (ie average Canadian income vs mortgage cost) are way out of whack, is absurd! It sounds like someone is over-leveraged and is now desperately hoping the chickens won’t come home to roost.

#21 squidly77 on 07.16.08 at 1:32 pm

Mortgage insurers push to keep zero-down loans
sub-crime wont go away easy
the criminals can have their way
just dont ask me to back their loans..

takes 2 minutes to e-mail your mp
take the 2 minutes…mp e-mail addresses here

#22 Re-diculous on 07.16.08 at 1:33 pm

Me thinks MAH is heavily invested in real estate…just a guess mind you

#23 been there on 07.16.08 at 1:53 pm

Thanks for giving your readers a taste of reality. It has been a long time coming. The last 20 years or so have lulled a somewhat lazy populance into a financial never never land. Consumers have become so distanced from their financial lives. We have automatic deposits, bill payment etc that has taken away the respect for a dollar earned. This transfers over to the housing market when a consumer wants what they want and leaves it up to the bank or mortgage company to make it happen with as little hassel as possible, regardless of cost or risk. IMO when a person turns controll of their lives over to someone else due to laziness they are getting exactly what they deserve.

#24 Chincy on 07.16.08 at 1:58 pm


When you understand the dynamics of what is happening on a global stage, then perhaps you should comment, before then, it sounds like you are the chicken little…Mr.Turner is a realist…as they say, don’t kill the messenger. Good luck to you, sounds ike you need it.

#25 ron s on 07.16.08 at 2:01 pm

Mortgage insurers push to keep zero-down loans:

Private mortgage insurers are pushing for ways to keep no-money-down mortgages alive and are set to meet with Department of Finance officials in the next two weeks to discuss possible options, sources indicate.

The move comes after Ottawa cracked down on mortgage practices that allowed consumers to enter the housing market with no money down and amortize their loans over 40 years. New rules that come into effect on Oct. 15 would demand a 5% repayment and shorten the length of amortization from 40 years to 35 years……………………………………………….

#26 jrochest on 07.16.08 at 2:06 pm

Mike.slob — Prices in June are always higher than prices in January, because more houses sell in June than in January.

The significant decrease is in *year over year* prices: prices this June are lower than they were last June.

#27 Mike on 07.16.08 at 2:09 pm

It seems like the economy is headed in the wrong direction. I think Garth is a little bit of a chicken little but I also don’t see what there is to keep driving the housing market up so I tend to agree with him. I think there will be a slight correction of about 10% in the GTA.

#28 beagle on 07.16.08 at 2:11 pm

MAH, your giving Garth a lot of credit to think he and the liberals can influence anything. This problem is global in nature. It’s far far bigger than tiny Canada. We are just along for the ride. Your right it’s the Market stupid and it will decide things, but it is a global market! Leave the politics out of it.

#29 LoC on 07.16.08 at 2:15 pm

Are you in the Real Estate or Money lending business? Frankly, the only people I’ve heard opposing the theory of a downturn in RE have a vested interest.

#30 Mr. Bean on 07.16.08 at 2:18 pm

MAH – If Garth can swing the national housing market by publishing a book (as you say) then doesn’t that mean the market was being held up by psychology and not fundamental values?

I’m intrigued by your prediction of a housing market rebound in 2009. Could you expand a bit on what you think will cause the turn around? Pixie dust or a herd of unicorns might do it, but that’s about all I can think of.

#31 Sabb on 07.16.08 at 2:19 pm


I would suggest you re-read what you just wrote as I don’t think you see/want any balance either. Basically your accusing Mr. Turner of wrong doing, when in fact you offer no resolutions to anything.

In fact, after reading your post, I would think you’re good with high oil/gas prices to heat peoples homes, high residential costs through unsustainable residential housing prices, killing off the environment one upgrader at a time, and finally putting a positive spin on what everyone knows is crap.

Lets be honest MAH, the world, including Canada, is going through a economic whirlwind at the moment. I think since you blame Mr. Turner for the residential downfall that you have had some potential buyers quote him, or maybe you are noticing Mr. Turners name come up around the water cooler to much? Either way, he’s just one guy vs an army of analysts, econimists, and consultants who all say everythings going great, except he just shares a different point of view.

#32 Average Joe on 07.16.08 at 2:25 pm

#8 MAH

What a load of garbage. You’ve read “reviews” – how about actually reading the book and forming your own opinion?

And do you really think Garth and his book are the cause of the real estate decline? Because I’m willing to bet a large portion of the homeowners behind the 30,000+ current listings in Metro Vancouver (REBGV & FVREB) are unaware of Garth’s “chicken little rants” and/or his book.

Garth has nothing to do with the decline in the market … he’s just trying to give your “Average Joe” a fighting chance to make a smart decision before the s**t really hits the fan.

#33 Mike on 07.16.08 at 2:31 pm

MAH tell me something.. Are you living on mars or Pluto.
Do you not read the papers or see that bell weather stocks are at record lows. THE largest mortgage holder in the US is being assured it will be backstopped by the Fed. Do you honestly not believe that these are historic events. Look at the lineups at the defunct Indy Mac banks . If you think the real estate market is sound and being influenced by this ONE person and ONE website then why would the government cut off the 40 year amortizations and restrict other loan requirements.
How can you honestly write that Turner is making this all up for political gain. Buy yourself a clue .

#34 brazer on 07.16.08 at 2:43 pm

Panicking clients of failing bank storm branches

“It is possible for them to receive more in the future. It’s impossible at this point to say how much more. That depends on how much we can get from the sale of the bank and the sale of its assets,” Barr said.

“possible…” – some customers may not like that word when it comes to their life savings…

#35 squidly77 on 07.16.08 at 2:48 pm

vultur has morphed into mah
vultur has extensive real estate investments
vultur used to post on the albertabubble
vultur dosnt post their any more
vultur is mah

#36 Jon B on 07.16.08 at 2:55 pm

Jon B said
“A lot of ground covered in this post. Anyone want to take a stab at what will happen to the relationship between the US and Canadian dollar in the next 12 months?”

OK sorry for asking. I didn’t mean to take away the concentrated focus on the beating up of MAH.

#37 Mitchell Cardno on 07.16.08 at 3:00 pm

To #8, a few things:

First off, housing prices traditionally track inflation regardless of the market (why is now any different?) (

Secondly, the housing market in Canada is inflated. Stats Canada measures the new housing price index every month for every major city. ( – Page 14. The basis should be 127 if tracking a 2.2% inflation over 11 years.

Thirdly, you can look at the real estate stats for local cities, for Calgary, check out ( – Page 6. That’s a LOT of inventory… Calgary’s housing market took off in 2006 / 2007. If you are interested in why, check out the sales volume and lack of inventory ( – Page 6

Fourthly, CMHC introduced the 30 yr mortgage, 35 yr mortgage, 40 yr mortgage, along with 0 down in 2006. That flooded the market with additional buyers (as you can see in the creb stats). Majority (60%) of first time home buyers opted for 40 year mortgages ( What do you think happens to the pool of potential buyers when they no longer can opt for a 40 yr mortgage / 0 down?

Do you know how long it takes to pay off 10% of a 40 year mortgage at a 5% interest rate? 10 years! If someone’s house value drops by ten percent, they would have been paying $1600+ per month to gain no equity in the end (assuming a person had paid off the cmhc insurance in cash). Not to mention the fact that that person(s) had to pay property taxes (0.5% on assessed value in Calgary), along with upkeep / condo fee’s. More money just thrown away to the government. Why would anyone opt for these long term mortgages when it makes much more sense to rent and to save that money that would have otherwise been thrown away to the government / bank / city?

What do you think will happen in 3 more years when all those people who rushed into the market to buy a house now have to renew their mortgage and the interest rates are higher due to inflation along with housing prices have dropped? Would you be all that happy if you were one of those 40 yr 0 down people that are renewing their mortgage and now that your neighbour just sold his/her house for 10% less than what you had bought yours for? What would go through your mind if you looked at the balance sheet from the bank and realized that your mortgage obligation is higher than your neighbours selling price (or assessment)? What happens if you or your partner lost your job? What if you’ve felt cash strapped for the past couple of years because of your high mortgage payments? Wouldn’t you rather quit and restart? (Bankrupt). This is a very real possible scenario (not saying it would happen, just saying it’s possible).

There’s a lot of risk in purchasing a house during these times, and I personally would rather just sit on the side lines for a few years and see how bloody it can get. Afterall, I’m just waiting for the prices to correct to inflation, nothing unreasonable, but a far drop in some cities…

#38 Al on 07.16.08 at 3:13 pm

Hi all,

I’ve been in hibernation since last summer. So how did that whole subprime thing work out? Last I recall it was contained.

#39 pitte on 07.16.08 at 3:26 pm

I was wondering where Vultur had gone.

Welcome back Vultur (MAH)!

#40 brazer on 07.16.08 at 3:41 pm

welcome back al….it is possible that things are not going to be different here in canada.

#41 patriotz on 07.16.08 at 3:48 pm

“What would Garth Turner do to fix the problem?”

Same as what I’m doing. Don’t buy until prices come down to reasonable levels.

The problem is high prices and the fix for high prices is lower prices.

#42 brazer on 07.16.08 at 4:17 pm

FBI looking into IndyMac Bancorp.

“FBI Director Robert Mueller has said the investigations focus on accounting fraud, insider trading, and failure to disclose the value of mortgage-related securities and other investments. Losses homeowners and other borrowers are estimated at over $1 billion.”

crooks will pay for decimating homeowners…

#43 Toronto Bear on 07.16.08 at 4:56 pm

To Kevin in Winnipeg,

What’s your problem? Isn’t in enough that there is finally a politician willing to tell the truth and do his best to educate the public. He isn’t pretending to have a solution to the whole mess….in fact, I don’t think anybody is naive enough to suggest such a solution exists. It’s too late.

However, a step in the right direction would probably be to encourage individuals to save more of their earnings and take on less debt. At the same time, try to introduce regulations that make it harder to offer individuals the lure of easy money. Educational reforms in schools to teach children the basics of personal finance. There is no short term solution. Recessions, while “bad”, are a neccessary part of economics, which always undergoes cycles of growth followed by contraction. Contraction is a neccessary “evil” required to rid the system of excesses which are unavoidable due to individual human greed.

I think Garth has done an admirable job as he is the only “famous” person in the entire country who expresses a dissenting opinion. It’s probably a very risky thing he’s doing from a personal standpoint. He has provided people with the knowledge to make their own decisions, and for that you should all be thankful.

#44 David on 07.16.08 at 5:07 pm

Mah, optimism should have some basic grounding in reality. If you can possibly find reasons for optimism in high levels of corporate, government and consumer debt please share with all of us. Please for the edification of all of us here explain how high levels of mortgage debt in an environment of rising interest rates and energy costs will prove beneficial to middle class Canadians. Is it possible for you to envision affordable housing for middle class Canadians in line with local family incomes at reasonable rates of interest? Try 2015 maybe not 2009. Otherwise go out and bet your shirt and hope you do not lose your pants as well.

#45 Calgary on 07.16.08 at 5:25 pm

MAH, er, I mean vultur,
Believe me, I would make a lot of money in the
next few years in real estate if the market did well.
However, that does not mean I am delusional enough
to think it will miraculously go up. I mean why kid myself? What do you think is suddenly going to change
in less than a year, people are going to pull $ out of their
asses to save the day? Come on! Give your head a shake! I suppose you also believe the US problems are
going to turn around tomorrow as well? North America is just so damn immune to any financial hardship is that right? Garth is certainly only one of MANY that have said this was coming for a long time. You really need to
read more about markets and cycles because frankly,
your comments are dumb, dumb, dumb….
Please tell me you posted that just to get a rise out of people?….

#46 APCM on 07.16.08 at 6:31 pm

I’m looking forward to a correction in the market.
My husband and I have been trying to purchase a 2-bedroom condo in Toronto for 2 years now only to lose in bidding war after bidding war for places we don’t even like that much. We’ve put in 10 offers now. All were multiple offer situations. Many times we’ve wondered if there were really other offers. We hear the listing agents use terms like, “Another offer coming in tonight. Put in your best offer.” We’ve been in the same lobby with other couples madly signing up contracts at 10 pm at night while the listing agent smugly waits for the “best offer.” We’ve stood there feeling like pawns simply for being present as other couples rush to outbid us. We have a healthy downpayment ($200,000), good incomes and we feel we can’t afford anything in this city! We’re coming to realize it’s because we’re not interested in taking on a huge mortgage that we can’t afford anything. (At least I hope this is true)

I’ve also signed up for new condo mailing lists and have agents calling me all the time now pleading to come into their sales centre at a specific time (so I can get into a bidding war perhaps?). They assure me that at anywhere from $400 to $600 a square foot at preconstruction I’m getting a “bargain” and a “great investment.”

I hope condo prices come down. I can’t take much more of this.

#47 Mah's Brother on 07.16.08 at 6:41 pm

Okay guys, my brother Mah may have exaggerated a little bit but that is because he is little. The truth of the matter is that statistics are subjective in nature. Why does the CPI numbers changed often. Even after 2 quarters passing. Numbers are numbers. I would agree that we are no longer in a boom period and that we will probably mimic the US economy in some way or fashion,….but c’mon sales in housing are still very good. Yes the supply may be much higher…but like anything there will never be a zero demand…unless you’re an idiot for engaging in a zero down and having a 40 year mortgage… gotta be american if you made those decision. Americans are quite dumb….and it all comes down to having an idiotic finance board making their decision. Actually its those Jewish patrons who are benefiting and controlling prices…but that is another story…..Listen, the best way to save money…is keep your day job ..and live on the beach or collect welfare of some sort……actually bring back the squeejee kids….i wanna have tax free money.
Garth Turner does know somethings and also knows diddly…by the way how do you know garth turner is not mah????

Mah’s brother.

#48 Rick on 07.16.08 at 6:45 pm

#46 APCM

There needs to be a serious investigation into the real estate industry and the Mahs, Vulturs and OMG’s of this world need to be deported and or jailed.

Realtors have become manipulative scum bags in the same realm as the legal profession.

We can stop using them all, it is really that easy!!

#49 pete on 07.16.08 at 7:09 pm

prices in th GTA are falling not increasing. Inventory is at record levels and sales are dropping month after month after month. All you see is price reduced signs everywhere as homes are unable to sell. One friend of mine just bought a house which was asking $419000 and put in a bid of $380000 firm and got it. She’s put in many low bids and this one took it. Anyone thinking of buying simply put in a low bid and if you get it good…..if not just walk away. Remember if you don’t buy it no one will.

#50 Valachi papers on 07.16.08 at 7:47 pm

One reason for the pernicious over-pricing of housing was probably Mafia (organized crime) involvement. Money-laundering, and its specialty of terrorizing innocent people, and simple profiteering like all other financial institutions are the probable mechanisms.

As others have previously posted here, the strong and convincing B.C. Bud industry was probably a big driver in Vancouver price run-ups. But other, organized crime of the older Ontario variety has probably infiltrated both financial organizations and the construction industry (a typical target) now in Alberta. The Banksters have probably long since been infiltrated by mob influences from back east.

Eliminating the outrageously inflated present prices of housing would go a long way to limiting the profits and cash available to illegal organizations.

#51 David on 07.16.08 at 7:51 pm

Reading posts from people like APCM shows how distorted the condo market has become. With a $200K down payment and decent incomes, this couple might as well keep the powder real dry for the real collapse.Hold fast for a first rate condo or house once the rout begins in earnest. Missing out on over priced garbage is not so bad. When business totally dries up those real estate experts will decide it is time to talk with you. If you feel the need to hold off til 2015 when the correction has run its full course then you can live rent free. Why overpay on a second or third tier condo for that matter?

#52 GenXer on 07.16.08 at 7:52 pm

Jon B ,

Thank god for question worth responding to!

It would seem that with the current financial crisis, the US is interested in supporting the FED no matter what the costs. If 300 US banks do fail (as predicted) and the US housing market continues to slide, Fannie Mae and Freddy Mac will pull billions (if not over a trillion) dollars of funds out of the fed.

The only way to cover off this massive loss is to expand the money supply (print money), forcing another reduction in the US currency.

That isn’t to say that the Canadian dollar will fair much better. If oil continues to slide, our government may be forced to make the same play to get the stalling central economy back on track.

I predict the Canadian dollar to remain strong for the next several years, perhaps above parity over the next two years, then sliding back down as the Government makes agressive moves to make producers more competitive.

#53 arit on 07.16.08 at 7:52 pm


Bravo!!! Well said!!!

Hold on! Patience, bite the bullet. You are not alone. There are thousands like you. We are all waiting at the borderlines, cash in hand.
Let the dust clear first. Get your popcorn and watch the blood on the streets. Pat yourself on the shoulder and hug your husband.
Later… we might all together discuss here how to actually purchase. I feel very secure that your 200K will get you something much better than a lousy 2bdr shoebox.

Best regards,


#54 Calgary rip off on 07.16.08 at 8:09 pm


Is there any way you can contact Mario T. at the Calgary Herald or Ed Jensen of the realtors board in Calgary and ask them to stop spreading propaganda?

Many people here think its still an excellent time to buy. Its truly baffling and confusing the amount of people here who think real estate is affordable in Calgary. Just how bad do you think Calgary will get Garth? Most of the homes have only dropped around $70,000. That’s still way overpriced for what they are. Some of these homes should only be worth $250,000 for what they offer tangibly. I am stumped as to when and if that will happen, because it is taking a bit of time to get back to reality here in Calgary.

Please correct the rampant bulls here in Calgary Garth, they have no washroom to use.


#55 Westcoaster on 07.16.08 at 9:12 pm

Quoting MAH “You did more damage to real estate with your big mouth than any policy change ever could.”
I think the real estate industry has done much more damage to the Canadian people than Mr. Turner might theoretically have done ( and I do, in fact, disagree with your submission). The RE industry has contributed in what I believe is a very sinister fashion to the unrealistic inflation of the price of housing, to the point where they have convinced people (often by scaring them into thinking that the house they are looking at will be even more unaffordable in weeks/months) to buy well beyond their means.
Out of all of this I hope there is some reining in of the RE industry who have duped us with their 7/6 or 6/5 or whatever for long enough.

#56 David on 07.16.08 at 9:19 pm

There are probably thousands of homes and third tier condos in Calgary that are soon to be virtually value less. Remember the dot bomb stocks that got devalued 50% then drifted to zero?
Even at zero these stocks were no bargain. A far outlying McMansion around Calgary is no bargain even at a Loonie. Reality has arrived.

#57 My_view on 07.16.08 at 9:26 pm

USA is in really bad shape. Been watching Stat TV. news reports from the states. People living in parking lots that are starting to resemble refugee camps. What Canadian banks/financial shops, if any, could be compared to Indy Mac? i.e.: Ing, Presidents Choice, Canadian Tire etc…

#58 squidly77 on 07.16.08 at 9:26 pm

calgary ripoff said

“Is there any way you can contact Mario T. at the Calgary Herald or Ed Jensen of the realtors board in Calgary and ask them to stop spreading propaganda?”

realtors are clowns are clowns
moto guzzie has a boss

how ever

have no fear..the pain lays ahead for house gamblers

the financial pasting that they will recieve will be their just reward..and a pasting they will get

it will be a pasting so harsh that they may not recover for 20 yrs

a fool and his money are easily parted

#59 islander on 07.16.08 at 9:59 pm

…There’s nobody to blame for this, but us….

Amen to that, Garth. Truer words were never spoken.

Rick, Squiggly, your pathological need to blame a third party for your misfortune is a classifiable mental illness. Seek professional help.

#60 Future Expatriate on 07.16.08 at 10:20 pm

To Jon B. #17:

I think the Loonie will continue to hold its own against the US dollar’s crash and burn for two reasons:

1. The Loonie is backed with more gold and natural resource wealth than the USD.

2. The worthless fiat USD is backed by not a single ounce of remaining gold, but by the world’s largest, most powerful, most worn out and most overextended military on the planet enforcing the US Empire petrodollar against all non-nuclear power challengers, and not a single thing more.

#61 Future Expatriate on 07.16.08 at 10:22 pm

To Mah’s brother:

You said your brother is little… how little, eleven years old?

#62 Roger on 07.16.08 at 10:34 pm


I have been collecting and analyzing CMHC and Victoria Real Estate Board statistics for several years. I have prepared a large collection of graphs and charts at my Victoria RE Stats Gallery:

Readers might find them interesting.

Condos, townhouses and single family homes (SFH) have all seen sales drop considerably from last year. Inventory is at multi-year highs in all categories. Average and median condo prices have been dropping for months. Greater Victoria house average and median prices have fallen in the last two months and the centre of Victoria, in particular, has had significant house price decreases as shown here:

Denial still runs deep among many home owners, sellers and the local real estate industry. By the end of the summer continued price erosion will result in denial turning into anger. The downturn has finally arrived.

Garth – Keep up the good work. In a few years working families will once again be able to buy a home in this area without raiding their RRSPs, borrowing from their parents and mortgaging their soul for 40 years of high payments.

#63 squidly77 on 07.16.08 at 10:48 pm

islander..whats up with you
i have owned my home since 1997
whos bitter ?..not me
as far as mental health is concerned..look in the mirror
as more people take more pastings as the months go on
insults like yours will be common place

much to my amusement..

#64 squidly77 on 07.16.08 at 11:03 pm

the truth to you vultur
never mind the circus
disregard the shim sham men
dont look at the side show

the truth !

alberta is in the tank..its done

#65 patriotz on 07.16.08 at 11:12 pm

“Is there any way you can contact Mario T. at the Calgary Herald or Ed Jensen of the realtors board in Calgary and ask them to stop spreading propaganda?”

That’s like asking McDonalds to stop making hamburgers. It’s what they do for a living.

#66 GrandePrairiegirl on 07.16.08 at 11:29 pm

#56 My-View, I think CIBC sounds the shakiest so far in Canada from what I’ve read. To date I believe their ‘writedowns’ are at $6.7 billion with more to come per latest stories. And why do they call it writedowns, wouldn’t writeoff be more accurate?
#48 Rick, you’re correct in your assessment of realtors at least the majority of them. For what they do I feel the fees are outrageous. I didn’t use one selling my first home 13 years ago and sold in 37 days with a slow/balanced market. A solid well presented home which is reasonably priced is not that difficult to move.
On another note first home ever purchased the mortgage rates at the time were 12.25% and if I remember right it was around 1988 or 1989. This was after the oil went from boom to bust and drilling came to a grinding halt. However I had the downpayment and longest term available was 25 years. No 30,35 or 40 years. Should mortgage interest rise again to 10% or better then I really will feel for all those who took 0/40.

#67 squidly77 on 07.17.08 at 12:12 am

damn..this is getting interesting now
by hook or crook

#68 Lance on 07.17.08 at 12:33 am

Canadian dollar should be able to hold its current value against the US dollar for the next year or two. The US Fed won’t touch interest rates until next year as they are caught between a rock and a hard place: Inflation is shooting up, but they can’t raise rates because it would trigger a systemic financial failure… something which may occur anyhow but perhaps at a more manageable rate.

What happens after that is anyone’s guess. Depends somewhat on how badly our manufacturing sector is beat up (if it even exists after this storm blows over) and how far commodity prices drop due to declining global demand.

To Future Expatriate:
The US actually has way way more gold reserves than Canada.

To those who bought a house 3-4 years ago or more, hold on to them. After the bubble bursts and the market settles down to a more rational price, your home value will then make an excellent hedge against inflation… and if you bought 3-4 years ago, the price will just return to around where it should be from your original purchase price anyhow. The paper gains in the last few years were just illusionary anyhow. That $200,000 Calgary home bought in 2003 that jumped to $450,000 is only worth $250,000 anyhow.

#69 Calgary rip off on 07.17.08 at 12:43 am

Hey David,

Fellow Calgarian, when do you think this will happen with the overpriced housing crashing? I think many people will be negatively affected, unfortunately. I look at the mls stats daily and it seems that house prices havent decreased that much. For example the northwest area has only gone down around $70,000. When are these overinflated homes going to worth their true value, for example around $225,000 in Tuscany and $200,000 in Hidden Valley? Im looking forward to this happening! Any input?

#70 Rick on 07.17.08 at 12:44 am

58 islander on 07.16.08 at 9:59 pm …There’s nobody to blame for this, but us….

Amen to that, Garth. Truer words were never spoken.

Rick, Squiggly, your pathological need to blame a third party for your misfortune is a classifiable mental illness. Seek professional help.
What the hell are you talking about? I sold my property in Van last November and am sitting on what will be a FULL payment on a house in about two years. If I didn’t have a conscience I would gloat like some of the realty vermin do. The real estate industry has screwed over too many people, irrationally hyped the market and inflated prices MORE than low interest rates and low unemployment has. Realtors / agents are *supposed* to act in the interest of thier clients, not victimize them like the entire MLS ponzi scheme does. Lets talk about phantom offers for a while? You don’t have a problem with this? Fraud and breach of trust at the worst level!! THIS is what I object too. It bothers me that familys are worked like dogs, relationships and children suffer for this entirely manipulated and unneccessary “market.” This is why I “blame” realtors and will continue to do so. To assume my position means I somehow “missed the boat” indicates your need for professional help a heck of a lot more than I do. Why don’t you go lie on a realtors couch? They’ll tell you everything you want to hear!!

#71 hyperswift98 on 07.17.08 at 12:58 am

A memo to APCM

As someone who’s parents owns a house in Leslieville in East Toronto my recommendation is clear, listen to Garth Turner, dont buy a condo now especially if the cost exceed your $200,000 in savings.

The best strategy is to rent an apartment and sit this housing bubble out because when it implodes real estate values could drop %40-50% and it may trap a lot of people who bought houses and condos in the $300-400,000+ range and if the economy slides into a serious recession, and many homeowners lose their jobs, they will be underwater (mortgage worth more than the value of the house) and desperate to sell without losing too much money.

In the part of the City of Toronto that I live in the TREB indicated that in 2007 house prices in Leslieville rose 38% the highest in the Metro area. Our house was asessed at $350,000 that year but in the past during the 1991 recession it was worth between $182-225,000. The next door neighbour paid a whopping $476,000 for the house and i am pretty sure that a good chunk of it is debt financed( maybe a 40 year mortgage, but I am not sure about that?) Prices have already dropped 11% in my area and if the global credit crisis hits us this fall, prices will drop further.

According to Garth Turner and other economic analyst, Canadian have personal debts of $1.1 trillion dollars most tied up in mortgages, credit card debt, car loans etc. What is even more unsettling is that real wages in canada have not grown in the last 15 years. The average income of Canadians is around $34-35,000. The manufacturing sector is being decimated by the high dollar and cheap imports(a loss of over 125,000 jobs). Most of the jobs have been in the service sector, but in Ontario 30% of the workforce have full time jobs while 70% have part time jobs that do not pay well. This is forcing people to work two jobs to make ends meet. Add to this the high cost of fuel for transportation, a rising cost of energy production for cities and industry and increasing prices for food is a clear indication of stagflation. There is also a growing concern about the ability of existing homeowners to pay for higher municipal taxes and utilities out of savings or retirement income?It will take more dollars to buy basic necessities for daily living

Since you and your husband are gainfully employed and have substantial savings in the bank, the best strategy is to build that nest egg by cutting back on any unnecessary spending. It may mean fewer car trips to work, fewer outings to the restaurant, shopping at lower priced supermarkets, stockpiling on non perishable goods( canned goods, bottled water…etc)
I am not asking you to go into a survivalist mode, but If you wish to buy your condo outright and have maybe $10,000+ left over in the bank, these strategies may help you get there.

If you have read Garth Turners other books Canada 2020 or After the Boom 2015 (Im not sure of the exact tittles) it will take at least 5-7 years for the real estate bubble to correct itself when the forclosures, bankruptcies run its course. By that time real estate prices could be 50% lower and married couples and families with equity can literally buy the house they want. Anyways i hope this information is helpfull and good luck in you quest to find the condominium that you want!

#72 EssGee on 07.17.08 at 1:12 am

Mah’s Brother – #47
“Actually its those Jewish patrons who are benefiting and controlling prices…but that is another story”

First of all, learn how to spell.
Second, learn how to put together a proper sentence.
Third, grab a gun and kill yourself and your brother while you’re at it.

Contrary to what you might think, there is no secret society of Jews pulling the strings in the economy.

You came on the board to defend/rationalize your brother’s views and instead made you both look like complete retards. Congratulations!

#73 Blacksheep on 07.17.08 at 2:35 am

Real estate prices are droping globaly, what makes vancouver special, limited non ALR land?

I call B.S.

Bubbles[and this is just another one] are based on emotion & greed, once sheeple, on mass
realize prices are out to lunch,that they have been tricked, they will just stop buying, causing prices to drop like razor sharp knifes, you know the rest.

Got to love the laws of SUPPLY vs DEMAND


the Realtors, Brokers & Builders have finacial intrest in keeping the truth hidden as long as possible, a smart Realtor would be helping people shelter home equity,
by getting out ASAP, then selling them a home in two years when prices have corrected 20-40%.

People need to search the net for whats going on globaly, once you do, you will run screaming for the exits.


P.S, i just sold my personal home, took a 55k hit on a 460k home to make it happen, but im out and sleep good at night.

#74 Mike.slob on 07.17.08 at 3:34 am

“There is no bubble in the Canadian housing sector,” Minister Jim Flaherty told reporters after speaking to roughly 400 people at a Calgary Chamber of Commerce event.

“That’s not been our concern. Our concern has been a tendency for longer amortization periods, like 40 years, and for purchasers putting very little money down. We’ve seen nothing in Canada like the U.S. subprime situation.” For sure in Canada is different bubble than US, as 1985 in Calgary was bad crash and no subprime situation….

#75 Central Banker on 07.17.08 at 5:19 am

Garth Turner said: “There’s nobody to blame for this, but us”. –If I could add to that, what about the Bank of Canada in all this, keeping interest rates artificially low for an extremely long period of time, and mortgage lenders allowing borrowers to enter the housing market when they can’t afford the subsequent payments!!!! David Dodge had to ‘retire’ as BOC govenor, because he knew what kind of a mess he was creating for us!!!! He wanted out.

Thanks Garth for telling it like is!!!!

#76 patriotz on 07.17.08 at 8:02 am

“your home value will then make an excellent hedge against inflation…”

Historically, house prices haven’t gone up because the cost of living has gone up. They have gone up because household incomes have gone up.

If consumer prices continue to rise and wages do not keep up, house prices must fall. A house will only sell for what someone can pay for it.

The US is now seeing the highest consumer price inflation in decades. How are house prices doing?

#77 $fromaSia on 07.17.08 at 9:37 am

V716919 Vancouver Garth, this is the classic flip this house.

$419k reno’d now $689k now dropped to $629K.

Lot is 25ft wide house is way small.

Check out all those upgrade pictures on realty link!!!

#78 mattbg on 07.17.08 at 9:47 am

One thing I’m a bit worried about is that the US situation makes the Canadian one look tame, and I think it’s easy to be misled into comfort.

Sort of like how the GM Hummer made the Ford Expedition look civilized, the very poor financial standing of my Canadian households looks pretty good compared to what’s taking place to the south… but when have we ever been detached from the US?

#79 Lawrence on 07.17.08 at 11:25 am

Housing markets continue to behave as they always have. After a bullish six year run, there is a slow down. Considering the conflagration down south, it is remarkable that our currency, our financial institutions, our real estate market, our rate of inflation, and our quality of life continue to stand up to the pressures that are occuring to the US economy.

Here is the latest information from Royal Lepage. If Garth can justify himself with a rise in listings, yippee. 2007 was a very bullish year so a slow down and a mild correction indicates a healthy market. Does this mean a 40 percent correction as Garth hopes, no.

As a M.P., I find Garth bent on negativity, despite the myriad of good news. He chose to leave the conservative government and sit in the opposition so he clearly has issues. He likes to be negative I guess.

Home prices will rise 3.5%, Royal LePage says

Globe and Mail Update

July 17, 2008 at 7:40 AM EDT

Average Canadian house prices are losing steam but are still set to rise 3.5 per cent by the end of this year, following a “solid” second quarter, real estate brokerage Royal LePage Real Estate Services says.

However the number of sales will slip about 11.5 per cent from 2007’s record levels, the Toronto firm said Thursday.

The survey of 17 cities showed that on a national basis, the average price of a bungalow climbed by 5.6 per cent to $351,587, while standard two-story houses rose 5.2 per cent to an average of $418,943, Royal LePage said.

The survey is a little more upbeat than one released two days ago by the Canadian Real Estate Association. It showed that in June, the average price of a resale home fell by 0.4 per cent from a year earlier, marking the first national, year-over-year monthly drop since January 1999.

Still, like the CREA, Royal LePage found prices fell in Alberta, with the tag on an average Edmonton bungalow, for instance, plunging 14.5 per cent to $320,000, while that on an average Calgary two-story dropped 6 per cent to $437,744.

The firm attributed this to a “surge in inventory” in “Alberta’s white-hot market.”

Next door in commodity-fuelled Saskatchewan, by contrast, prices continued to soar, with the average two-story in Saskatoon leaping 27.2 per cent to $388,000 and the average Regina bungalow up 36.7 per cent to $278,850.

Gains in the big three, Toronto, Montreal and Ottawa, were more modest. Ottawa bungalows, for instance, were up an average 4.3 per cent to $316,167, two-story houses in Toronto rose an average of 5.6 per cent to $564,228 and an average of 4.8 per cent to $336,443 in Montreal, Royal LePage said.

“We have been pleasantly surprised that strong fundamentals, such as enduringly positive employment numbers and reasonable mortgage rates, have countered increasingly pessimistic consumer sentiment, based primarily on the American housing recession,” Phil Soper, the firm’s president and chief executive officer, said in a news release.

“After several years characterized by a persistent shortage of listings, home buyers have felt the pressure of bidding wars and take-it-or-leave-it counter offers ease during 2008; home sellers have had to come to grips with the longer time it is taking to sell properties, but can take comfort in a market that continues to support reasonable price increases. Our research indicates that all markets will continue to perform well, albeit at a tempered pace.”

#80 Lawrence on 07.17.08 at 11:35 am

Garth would have us believe that we are facing a catastrophic emulation of the US economy. It seems that the numbers don’t support this attribution. The economy is chugging along and our crime rate is falling too. Garth, c’mon. It is really bad out there right? The sky is falling right?

Crime statistics

Canada’s national crime rate, based on data reported by police, declined for the third consecutive year in 2007, continuing the downward trend in police-reported crime since the rate peaked in 1991.

The 7% drop in the national crime rate was driven mainly by decreases in counterfeiting and high-volume property offences such as theft $5,000 and under, break-ins and motor vehicle thefts.

Following two years of increases in most serious violent offences, police reported fewer homicides, attempted murders, sexual assaults and robberies in 2007.

Police-reported crime rates were down in all provinces and territories, except Newfoundland and Labrador, the Northwest Territories and the Yukon.

After rising in 2006, the overall crime rate among youth aged 12 to 17 declined slightly in 2007. While non-violent offences committed by youth fell, youth violent crime remained stable.

Crime rates continue to be highest in Western Canada and the territories. Among the provinces, Saskatchewan once again reported the highest overall crime rate as well as the highest violent crime rate.

Violent crime: Decline in most serious offences

Police reported 594 homicides, down slightly from 606 in 2006. The homicide rate fell for the second year in a row, continuing a long-term decline that began in the mid-1970s.

In 2007, there were almost 30,000 robberies. While the robbery rate declined 5% from 2006, it has remained relatively stable since 2000. Robbery committed with a firearm declined 12% from the previous year to its lowest point in more than 30 years.

#81 Keith in Calgary on 07.17.08 at 11:58 am

Check out this NYT interactive inflation chart……showing you where money gets spent and what the increases have been like.

Look at housing.

#82 Keith in Calgary on 07.17.08 at 11:59 am

Look at this interactive inflation chart from the NYT.

look at the RE component of this chart.

#83 brazer on 07.17.08 at 12:18 pm

St. Thomas truck plant cutting 720 jobs

“The president of the St. Thomas Chamber of Commerce called the layoffs “devastating” news for the town, a manufacturing-dependent community south of London, Ont.

Bob Hammersley said there is “no way to understate how much impact 720 relatively high-paying positions have in a community.”

Each one of those jobs, he said, “can spin to touch at least seven others that sell vehicles, that sell groceries right down to the neighbourhood gas station.”

#84 Mike.slob on 07.17.08 at 12:34 pm

Income levels do not support the current house prices in Canada. Also this tragedy of increased prices is still “Hot” in Brampton,Burlington,Georgetown,

#85 sss on 07.17.08 at 12:39 pm

Just want to be today on the evil’s side, by bringing some good news, which are not desirable here on this blog:

Don’t beat me!!!

#86 Roger on 07.17.08 at 1:11 pm

I sent you a post last night with several links to my Victoria Real Estate Stats Gallery. It never showed up and might be trapped in your spam filter. I think you and the readers will find the graphs interesting. Condos in Victoria are in trouble and houses in the centre of Victoria have had big price drops. Both are shown in the graphs which use CMHC and VREB data.

Keep up the good work. The media is finally catching on and doing interviews with folks like yourself instead of RE shills.

#87 Roger on 07.17.08 at 1:12 pm

Here is the link to the Victoria RE Stats Gallery.

#88 Roger on 07.17.08 at 1:13 pm

Here is the link to the Victoria RE Stats Gallery.


#89 Insider on 07.17.08 at 1:26 pm


I am familiar with design and construction quality of the high rise condos. Developers contracted the lowest fee engineers who agree with unrealistic dead lines. Engineers in turn hired unlicensed newcomers from India, Pakistan, Egypt, Iraq, Syria, China etc. for $15-$20 per hour to design towers skeleton for strength and stability.
The most time consuming and complex task in the building structural design is earthquake resistance. The probability of earthquake in Toronto is relatively low (but not nil): 2% in the next 50 years or 100% in the next 2500 years. Guess on which task engineers cut the corners to stay in the business…
Building departments normally do not ask for engineering calculation to verify adequacy of design. Their review is normally superficial, however there are exceptions.

Factor in the fact that construction quality and trades coordination are far below design quality. Ongoing construction inspection is not required by the Ontario Building Code, only “general conformance with design” review.

Your last statement was “I hope condo prices come down. “.
I keep fingers crossed that condos themselves do not come down.

Leaking condos is just visible tip of the iceberg…

#90 timbo on 07.17.08 at 1:46 pm

Tim in Calgary
I read the book Garth and watched over the past year in calgary what is slowly unfolding. My family has cleared most of our debt and thank god we did, I was just given notice of my layoff. I am in residential construction and as a gasfitter for 14 years I am witnessing an almost total shutdown in new construction of single family homes. We were doing 16-20 rough-in starts 6 months ago, per week and now we have 2, with 4 builders and this covers Calgary all the way to Canmore. All condo projects that we work with have stopped or are only roughing in and putting up exteriors to clean up the construction site. Trades from all area’s I have talked to are experiencing the same shock.
Oil is the pinky, Financing is index, and skyrocketing prices of supplies is the middle finger is to blame, I am told. They did not mention the r/e prices (probably vested interest)
The funny thing is most people are in denial, with the Calgary herald-(paper)-calling their thinking process This effect almost has me thinking about taking psychology.

So since you cannot get on TV and tell the truth, because people usually shoot the messenger…what can you do? How about after taking power again enact an immediate 25 year mortgage rule. Nop that will destroy the economy and piss off everyone over the affordability of that type of payment structure…. Instead of just pointing fingers and laughing at others misery we must adjust to the fact of 3-5 years of hard times ahead.

One thing I ask that you personally think about is a mandatory economics course in grade 10. This could show base economics but mostly ponzi schemes and what overextension of credit can do. This might help the kids growing up the think twice when this happens again, and it will. History always repeats a generation down the line after the lesson learned is forgotten.

What’s happening will get the liberals in power as long as you can show Harper brought on the speculation bubble, (in Canada) and crushed savings with inflation indebting new homeowners with crushing 40year underwater mortgages. Just an idea.

#91 smwhite on 07.17.08 at 1:52 pm

– Home prices will rise 3.5%, Royal LePage says –

So the first time in 10 years homes won’t keep pace with inflation or the 4% – 5% the RE industry has been claiming they’ve gain since 1980…

#74 Patriotz

– If consumer prices continue to rise and wages do not keep up, house prices must fall. A house will only sell for what someone can pay for it. –

The Canadian RE bulls are really having problems understanding that simple but fundamental concept. The US RE bulls are getting schooled in this aspect as the pendulum swings the other way.

The government produces reports on CPI, core CPI and GDP to reflect the standard 3% that businesses use to dictate their yearly “salary adjustments”. Something has to give, either quickly rising salaries(not a chance) or house prices settling at affordable and sustainable levels.

Anyone hear today that Coke Inc. had reported loses in excess of 3 billion dollars stating they will rise prices after labor day…

Another tiny signal that things aren’t rosey and fluffy.

If you get a chance read Bernake’s speak to congress, he’s finally admitted the hit shit the fan. That’s good for Canada(and the world) right?

#92 smwhite on 07.17.08 at 2:00 pm

I borrowed this from the ROB article on the 3.5% rise in prices… Mike H comments on my buddy David “The Liar” Lereah, I’ve posted a similar quotes from him before to state the obvious spin doctoring…

August 2005: “There is virtually no risk of a national housing price bubble based on the fundamental demand for housing and predictable economic factors”

April 3, 2006: NAR: “We can expect a historically strong housing market moving forward, earmarked by generally balanced conditions across the country and fairly stable levels of home sales with some month-to-month fluctuations.”

June 27, 2006: NAR: “Right now we are on course for a soft-landing in housing.”

October 25, 2006: NAR: “The worst is behind us, as far as a market correction”

December 4, 2006: NAR: “Its important to focus on where the housing market is now, it appears to be stabilizing, and comparisons with an unsustainable boom mask the fact that home sales remain historically high”

February 15, 2007: NAR: “At least the bottom appears to have already occurred. It looks like figures will be improving”

June 6, 2007: NAR: “Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year.”

October 10, 2007: NAR: “The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels”

December 10, 2007: “Although there could be some minor slippage in the first quarter, existing-home sales should hold in a narrow range before trending up.”
Anyone notice something very interesting happening with oil/gold, even as oil continues to drop gold is treading higher, probably closer to that 10/1 ratio from the late 80’s…

#93 jrochest on 07.17.08 at 2:41 pm

Lawrence —

You know, I don’t think any of the comments here have mentioned crime rates — with the exception of ‘shadow bidding’.

So why are you talking about them?

#94 Rob M on 07.17.08 at 2:44 pm


Monkeys are also projected to fly out of my butt at year’s end too. Royal Lepage can paint whatever rosy picture they’d like to see it seems [and have] but where is any iota of analysis behind it?:

“Average Canadian house prices are losing steam but are still set to rise 3.5 per cent by the end of this year”

This is just more Maureen O’Neill , RE-speak garbage.

I’m all for opposing view points to discuss and sharpen my views, but your stuff is weak. The blog is getting muddied by ‘because I say so’ arguments from pseudo-agents like you just trying to ‘balance’ the bear take on this things. Newsflash: it ain’t workin’, the media are finally on the trail.

If that’s the best you have, then we really are in for a world of hurt.

#95 smwhite on 07.17.08 at 2:46 pm


– One thing I ask that you personally think about is a mandatory economics course in grade 10. –

How are the banks and big business going to make easy money if we education our youth about the intricacies of basic finance?

#96 smwhite on 07.17.08 at 3:38 pm

…probably closer to that 10/1 ratio from the late 80’s…

My bad, meant 70s!

#97 Chuck D on 07.17.08 at 3:46 pm

Lawrence – Garth hasn’t talked about a 40% decrease. He does talk about a 15% decrease being likely (as do a lot of other rational people). The article you posted is b.s. real estate machine propaganda. Totally useless and not based on facts. If Royal Lepage wants to buy my house for 3.5% more than it’s worth right now in a year from now, they’re welcome to have it.

As far as I have read Garth hasn’t mentioned the crime rate so your inclusion of the crime rate article is puzzling. In fact, I think that Garth telling people to stop insulating themselves in the distant suburbs speaks to a view that things are not as scary as the media would have us believe.

#98 Another Albertan on 07.17.08 at 4:50 pm

Insider – I call BS.

The liability implications of “cutting corners” are absolutely massive for any engineer who stamps and signs drawings. And I am unaware of any engineering firms (at least in western Canada) paying immigrants such a low rate. I will not disagree that there are a lot of new Canadians working at design firms and I will not disagree some are not getting “fair market value” compared to someone with proper registration and credentials. Even if they are professionally-designated in their home countries and are not registered here, a Professional Engineer _MUST_ check and endorse their work. The buck stops at that point. IT IS THE LAW IN EVERY JURISDICTION IN CANADA.

The fact that any design is stamped and signed means that a P.Eng. is backing up the validity of the design. Documentation of calculations and derivations are an artifact of the design process. How do you think the $100-Billion of projects in Northern Alberta are being put together? Alberta-registered Professional Engineers endorsing work done in-province AND by teams of foreigners off-shore. As long as the local regulations are being met and there is a locally-registered individual taking responsibility, it doesn’t matter who or where the calculations took place and for how much.

Anyone (and ESPECIALLY another engineer) checking an endorsed document without first informing the signing party is making a serious breach of ethics. Specifically, if another engineer is asked to check another professional’s work without informing the first professional, the checking member can be charged with unprofessional conduct.

In addition, every provincial licensing body will enforce that an engineer’s first duty is to the public and to safety. Any firm willfully breaching its duty will be censured in very severe manners. This is what self-regulating professions do in order to maintain credibility. All findings are a matter of public record.

Stated for the record, I am a Professional Engineer and am also a Responsible Member for a permitted engineering and consulting firm.

#99 EJ on 07.17.08 at 4:55 pm

Ever notice how the industry reports medians when it’s convenient, and averages when it’s not? Average price is an almost useless statistic for potential buyers since a few really high priced houses can skew the numbers.

eg. Take 10 new listings, 8 of them at $200k each, one at $2M and one at $5M that sell in a one month period.

Average sale price: $860k
Median sale price: $200k

These numbers get even more skewed when the lower priced houses stop selling (which is what you see when sales drop, inventory shoots way up, and “average” price goes up). Extending the example, imagine that 20% of new buyers can’t get mortgages since the 0/40 is gone. These buyers would be in the bottom segment of the market, so two of the $200k houses don’t sell. At the end of the month:

Listings: Up 20% (assuming 10 new listings each month)
Sales: Down 20%
Average sale price: $1.025M
Median sale price: $200k

So everything is looking great because the average price is up, right? Think again.

#100 Future Expatriate on 07.17.08 at 5:00 pm

To Lance #66:

If you believe what the US government reports as its gold reserves as accurate, I have a lovely 1913 1 bath 2 bedroom character home in downtown Victoria to sell you… for a mere $2.5 million! Water views! Five suites! Crown molding!

#101 EssGee on 07.17.08 at 5:04 pm

GTA Resale Housing Prices Up, Sales Down

Looks like this might be the last month that they’re able to use the term “Prices Up” in their headlines.
Sure, prices are up compared to 2007 but if you compare this to previous months, the pace appears to be quickly decelerating.

Compare these numbers from the last 4 TREB mid-month reports.

April 17 Report
April GTA prices up 7% over April 2007

May 20 Report
May GTA prices up 6% over May 2007

June 18th Report
June GTA Prices up 4% over June 2007

July 17th Report
July GTA Prices up 1% over July 2007

In my opinion, next step is negative growth. AKA – price decline. Keep in mind that full month July numbers are also going to be hit with the new zero/40 mortgage restrictions and that YOY inventory in the GTA is up 25%.

#102 David on 07.17.08 at 5:15 pm

Canadians have almost no influence on the value of the Loonie against the US Greenback. Our entrepreneurs and exporters have to adapt or die. When I hear things like get out of US dollars it makes no sense. Our principal export customers are Americans and they pay us with US dollars and to date no one in Canada has found a way to currency arbitrage the bulk of our international trade.
When I read reports that Flaherty is saying no housing bubble existed in Canada, I ask myself if this government is totally dishonest or completely oblivious, with neither scenario being very comforting. Our banks are well capitalised until the bubble bursts, but since there was no bubble in the first place, our banks will continue to be stable and well capitalised. Flaherty’s arguments stretch the credulity index. This government is really asking to get hauled behind the wood shed by angry voters and the discipline will be quite unpleasant.

#103 WaitingInToronto on 07.17.08 at 6:04 pm

Price increases down to 1% in GTA, with sales volume continuing well below last year’s levels.

Just a matter of time until our prices are down as well… wonder how Maureen O’Neill will try to spin that one.

#104 Mike B formerly just Mike on 07.17.08 at 6:36 pm

Re Toronto prices.. Like many I am waiting for significant drops in prices in Toronto. Just got an email from a realtor who sells in central Toronto area and she felt the market was quite good. She sold 3 house in two weeks and two went over asking. I, on the other hand have seen many houses sit vacant and unsold for weeks and weeks. Not sure what she is talking about but I do feel things here will drop in the coming six – eight months

#105 Peter on 07.17.08 at 6:41 pm

What a piece of joke …ROYAL LEPAGE and REB is rn by bunch of real estate pumpers that they want people to feed in their hard earn money to these guys to they can get a great vacation or buy a nicer car or live in a bigger house, they always claim prices are UP, can they tell us the truth..?? IS prices down really matters to them ? How about give it a 1 % down or 2 % down once in a month or once a year, does a lie sounds better than to put it this way instead..Just like you are in a stock market, you cant guarantee the stock market will go UP & UP every second, every trading day and hope or pray it will go UP & UP & UP..suddenly, it needs to correct and it needs to DOWN DOWN DOWN to offset the heat…if the heat does not get cool down, it will goes back STEP 1 very easily..!!! I will anticipate a 25 – 30% drop in house prices across GTA or some suburb area REAL soon !!!

#106 liverless on 07.17.08 at 9:16 pm

What the bears are clearly forgetting is how ‘conservative’ Canadians are. It doesn’t matter whether we give out 40 year mortgages or 0-down payments, nor does it matter if we load up on debt levels that are just as absurd as our southern neighbors, or that we are taking out mortgages that will eat up 70% of our income. What is important is that we are doing so conservatively. And with Canadian lenders that are lending to Canadian citizens, how can the result be anything but conservative, regardless of what the risk might be.

Clearly, there is no such thing as a risky lending standard, so long at that practice is done conservatively. This myth is as silly as those that think that a house could ever be ‘overvalued’. What nonsense!

#107 $fromaSia on 07.17.08 at 9:55 pm

Liverless, your above post is most sickening.#100

Sarcasm or Not, Canadian’s get shafted regardless. We take it all sitting down always.

High Taxes, Highly paid cabinet, blah, blah, blah.

Sorry, Garth you may be a different breed or a mutation of politation for the better.

I don’t know yet.

I do like your efforts, I hope more Canadians back you for rationalism and plain realism.

#108 $fromaSia on 07.17.08 at 9:58 pm

Sorry, Last sentence should read,

“I do like your efforts, I hope more Canadians back you for YOUR rationalism and plain realism TO OUR ECONOMIC IN GENERAL.”

#109 Edmonton Appraiser on 07.17.08 at 11:01 pm

Since last June we’ve seen in Edmonton;

SFH dropped 14% to 22%
Condos dropped 20% on average

SFH dropped about 1.7% in the last 3 months (spring market which typically see gains).

We’re seeing listing price reductions of 12.5%

Not uncommon for people who bought last spring to have a good $60-$70k drop in equity (across all segments of housing)

#110 Calgary rip off on 07.18.08 at 12:25 am

Timbo in Calgary:

Great heads up from a builders perspective.

This whole housing mess really sucks. Im in health care, Im a renter, make almost $100,000 a year, and I am truly PISSED that the real estate industry has manipulated so many and there are people such as myself who are waiting to buy(although some may argue that it was the people themselves who got themselves into these ridiculous mortgages, which while partly true I dont see how it is bad for someone to want to own a home), and others who bought during the boom and will have to either wait it out or…panic. The situation truly sucks because layoffs of working people will hurt the economy in Calgary when people leave and house prices will plummet. Hopefully this doesnt happen because then I might be out of a job too, if people start leaving there will be less people having heart attacks in the middle of the night and the health region might decide to cut back on staff.

I really wish that Mario at Calgary Herald, Ed Jensen would produce facts rather than blatantly lying. Its so unbelievable and unethical Im completely dumbfounded. They are both…BASTARDS!!!!!

What those schemers called realtors should be doing is telling the public to wait to buy. Pretty soon prices will drop and another boom will occur, maybe.

#111 Central Banker on 07.18.08 at 2:16 am

Hey Future Expat #94, Thanks for telling Lance #66 how it is!!! Wow if he believes that the U.S. has all that gold, then David Dodge was the greatest thing for Canada since sliced bread!!!!

I love fiat currency :)

Central Banker

#112 spinning Calgary on 07.18.08 at 2:18 am

I found the Herald article interesting.

Calgary Herald Wednesday July 16, 2008
Calgary Business

The headline read.

“Anyone expecting a continued decline in average price will be surprised and disappointed” (Gregory Klump, Real Estate Association Economist)

What would surprise me is some integrity.

I can just see Ed Jensen (CREB) and Mario (Herald reporter) meeting at the Calgary Real Estate Board trying to spin the next article….How can we convince “fools”, everything is just fine in the Calgary Real Estate Market?
How about:
Year over year sales down. (Can’t use that)
Year over year average sale price down. (No, not that)
Inventory is up. (Can’t use that anymore, the “balanced market” thing is not working).
Year to date average sale is down. (Can’t use that)
Hey… From January 2008 to now the prices are still up 1.1 percent. (I know we predicted an increase of 3-7% but one percent is still up)
In April 2008 single family home sales were 1363 and May 2008, they were 1368 a month over month increase of 5 homes.
And June single family home sales were1439 a month over month increased of 76.
( stats

The actual article goes on to say:

Despite the decline in sales for the first six months of this year, “on a month-over- month basis, sales have increased in Calgary in the last two months,” said Gregory Klump
Calgary Herald July 16, 2008

Up to July 15, 2008 sales are at 1383. (down so far)

#113 Peter on 07.18.08 at 3:18 am

Many houses are UNSOLD in the GTA area too, it just a matter of time to get these BAD news to feed in the system, I would say like in 2-3 months, we will be seeing a whole NEW LANDSCAPE OF HORROR FROM REALTORS AND MORTGAGE BROKERS AND BANKERS, Choir with the BANK..(which they would like to PUMP PUMP the market and build UP their BLOODY GUARD to suppress any BAD news in the market)..and MISERABLE (from the buyers where they are seeing their house price keep dropping plus risky mortgages and all sorts of lending products in place plus rising food, gas, energy and property tax and from the leveragers who leverage their home and buy few or dozen condo units that wont be built until 2009 or 2010 and see prices jumping off the cliff and what they can do is to cut themselves in pieces like a double edge SWORD where his or her arm can live in one condo unit and his or her leg can live in another unit in NEGATIVE equity)….

#114 Future Expatriate on 07.18.08 at 7:52 am

Reply to #96:

David, c’mon, it’s EASY. Demand payment for all goods and services in Canadian Gold bullion Maple Leaf coins. .999 will do.

It’s the way of the future, BELIEVE ME. Beat the rush and the crowds…

…and the riots.

#115 APCM on 07.18.08 at 10:30 am

I have to say I’m starting to feel very lucky that we were outbid for all those condos in Toronto. My husband and I initially walked because we don’t like being put in emotional situations (such as multiple-offer bidding wars) We walked every time, but because the other buyers saw us there I am sure they increased their price while we just left ours at asking, maybe 5 grand over and went home. We later learned these places went for way over asking.
I think my husband and I have decided to wait to buy for now. We have been sort of distancing ourselves from looking at listings already the past couple of months.

We actually have a real estate broker (independent) for a neighbour and he told us back in 2006 to wait for the, as he calls it, “hard landing” and every time we look at a place, he shakes his head and says “too expensive, just wait,” but we bid anyway because we’re afraid prices will keep going up and up! But he’s always told us prices will come down. In 2006 he said by 2008 we’ll be able to get a 2-bedroom for $250 in Toronto. (maybe he’s off by a couple of years?? I hope)
He also thinks much like the early ’90s a lot of the planned preconstruction projects won’t get built.

Thanks for all the comments and suggestions re: my story above.

#116 Jose on 07.19.08 at 1:55 am

What gloom and doom, the world will end in 2012, Aliens will form a new world colony and hail Garth as thier new leader. Your book is a joke, but I enjoyed your Real Estate and Financial TV show. There’s a real panic in the real estate market right now. We all need a place to live where we work? So everyone is holding off on buying a house so when prices tumble 50-75%, the markiet will take off again. Canada can’t handle a US style housing market crash, the economy will go into a depression. This will not happen, we will experience a market correction, however prices will continue to increase 3-8% YOY.

#117 Bruce on 07.20.08 at 3:22 am

Jose, I’m glad you can predict the future with such glee and optimism. You really think this wild party we’ve experienced over the past ten years is going to continue? You honestly believe there isn’t any “crisis”, therefore, no need for us to be concerned? And please tell me, oh most wise one, how deeply-indebted Canadians are going to continue prospering in an economy that favours the wealthy few over the working many. You sir, have shit for brains.

Sometimes, I think our government is more ridiculous than the administration in the US. The only difference is that they are not attacking a country’s sovereignty, but they are attacking Canadian pockets. I have never heard of any high tax breaks for low income people, but tax breaks for high income corporations are the norm(!).

The silly part is how the McGuilty government thinks giving those with kids a free check for $50 is going to help the economy… I still don’t see high level health care, quality education, or affordable housing! Anyone who has a ounce of common sense and intuition can see that Canada is going right down the tubes.

Contrary to what most people believe, we’re the 51st state. And you can thank the gods of globalization and free-trade for finishing us off. Out of a job yet, Jose? Then keep on buying more made-in-China junk…

#118 EJ on 07.20.08 at 3:33 am

Jose: Got any numbers, facts, or even reasons to base your claim on? Maybe you should read up on what’s happening in the rest of the world. Hint: it’s not good news.

#119 David on 07.20.08 at 6:08 am

Jose, you are writing pure nonsense, simply put.
Yes all of us do need a place to live and work and the places where we live at must bear some relationship to family earnings.
If Garth’s book is a JOKE as you believe, then feel free disprove ANY or ALL of the major arguments and contentions. Since you spent $19.99 already, it should not take you long to disprove his crappie book with your brilliant mind. Your rigourous Jesuit of style argumentation should easily expose Garth Turner as nothing more than a mountebank.
Yes, Canada CAN actually handle a housing crash, because it is happening very soon.
Should prices correct by 50%-75% fine. All the better for Canadian middle class families. How Canadians deal with the crash is of more importance than timing differences with the USA market.
Apparently real estate cowboys have a lot of trouble with basic arithmetic. Stagnant or declining family incomes can not sustain double digit annual increases in housing prices. Financing these escalating home prices with a negative savings rate and zippo down sounds very shaky.
Yes there is lots of panic in the real estate industry, most of it self created and please do not ask taxpayers for a bailout. Be a good real estate cowboy and bite hard on a bullet.

#120 Benji on 07.21.08 at 4:13 am

I have a question for everyone about rental property ownership. I purchased a property approximately 1 year ago that is cash flow positive…returning 1% after all costs are factored in.

If my property is earning money at the price that I paid for it, is there really any sense in selling it? Why would it drop in value when it is more than paying for itself at the price that I paid for it?

Thanks for your insights.

#121 NOT LIVING IN THE PAST on 07.29.08 at 11:33 pm

Politics and pumping real estate balloons
to get votes , only gives other political parties
the keys. We need old school conservatives .
Please go back to school new conservatives .