Not even close

Another condo project was cancelled last week in mid-town Toronto. No headlines here. The media did not even notice. Just a letter sent to the unhappy people who wanted to live there. Many of them, in reality, did not understand how lucky they were.

Two thousand miles away, the average price of a detached home in Burnaby took a plunge, according to last weekend’s paper. A nondescript detached home you’d drive by without noticing now sells for $705,000, which is $42,000 less than about a month ago. Yeah, that was an 8% decline in a few weeks.

In this Van burb, listings are up 24%. Sales are down 44%. Back in southern Ontario, listings have also exploded higher, while realtors are desperately trying to cling to the fiction that sales are flatlining and prices are stable. Of course, the trend line is clear. The market is in trouble.

As in Burnaby, so it is in Mississauga. The number of days on market has about doubled in the past year, which means homeowners – a great many of them first-time sellers – are learning the hard way that supply and demand has more of an impact on prices than squeezing hard and hoping.

Listings in the GTA area started to really rise in April and May, which means many sellers are just coming up to the 90-day mark for their listings. They are now being told that to have any chance of selling in the hotter autumn season, prices will have to be reduced. Thus, officials numbers for sales closing from November through to February will show average and median prices taking a haircut.

This, in turn, will set the backdrop for the Spring, 2009 market, which will be one of reduced activity, substantially lower house values and a worsening economy. That’s just a reality, now that bank profits are tumbling, commodity prices have turned hugely unstable, and both Canada and the United States are in the middle of regime change, or at least political upheaval.

Then, natch, we have the looming Oct. 15 death of the 0/40 generation, the immediate consequences of which are uncertain. But not good. Already new home sales have taken it on the chin. Huge Mattamy Homes – now the nation’s largest builder – has slashed prices by up to $50,000. At the same time some banks who shall remain nameless (like TD) have found ways of turning a cash-back mortgage into a zero-down loan, which only extends the miserable adjustment period a while longer.

Of course, opportunity will emerge from all of this. There will be a bottom. Prices will correct too far, and then profits will lie there for the courageous to scoop up.

But, we’re not there yet. In fact, we’re not even close. Remember, the US market started to tank in September of 2005 and now – the autumn of 2008 – foreclosures are growing, prices are falling and middle-class homeowners are being destroyed in even greater numbers.

There will be many siren calls of relief in the coming months from the real estate community. Heed not a one.


#1 Keith in Calgary on 08.27.08 at 9:49 am

Garth said…….”There will be many siren calls of relief in the coming months from the real estate community. Heed not a one.”

Nor should government heed those cals either………from both the REIC and consumers.

Let the ball drop where it may.

#2 lgre on 08.27.08 at 10:02 am

Mr Tal is now PREDICTING a housing decline and maybe as much as 20% in some areas, where is this guy’s credibility?

In the R.I.P blog #170, someone posted a youtube video were he was saying a 3-4% incline in RE prices and now he changed his tune. He wasted 50 minutes of my time.

#3 APCM on 08.27.08 at 10:18 am

Hi, would you be able to tell us which condo project in Toronto has been cancelled?

#4 Mike B formerly just Mike on 08.27.08 at 10:23 am

What mid town condo got slashed????

CIBC profit drops 91%…. nice that the posting from Ben Tal paints a rosy picture considering his company can barely make a profit and they call the BOC rookies.
Give us all a break!!

#5 Calgary rip off on 08.27.08 at 10:37 am


Check out mls for Hidden Valley Calgary NW today. All the ads have been pulled!!!! Are these houses now off the market or what? And Tuscany only the high listed mls houses are shown. What is going on? I find it hard to believe that all the 55 listings from yesterday in Hidden Valley sold.

#6 Calgary rip off on 08.27.08 at 10:40 am

Garth whats with the funny business on the mls site for Calgary today? Are the realtors lowering their prices or are all those houses in Calgary simply off the market? Very interesting.

#7 smwhite on 08.27.08 at 11:02 am

Just call it the Benji Tal flip-flop…

Tal is like a weatherman predicting YESTERDAYS weather, what a pompous ass this guy is, no wonder CIBC has gotten into as much bovine dung as they are.

Garth, I decided to go out and buy your book, even though I was pretty sure of its contents after being exposed to Schiller’s “Irrational Exuberance” and Peter Schiff’s “Crash Proof over the last few years, I’m two chapters in and it hasn’t disappointed.

#8 Bobby in Victoria on 08.27.08 at 11:04 am

Time to sit on your wallet, watch and and wait. Am in the market for a few rental properties but why buy this month when everything will be a lot cheaper in a few months.

#9 Mike B formerly just Mike on 08.27.08 at 11:17 am

Any idea which mid town condo was cancelled??

#10 Joanne on 08.27.08 at 11:30 am

The entire global economy will get a wake up call when this political upheaval has come to past. The major banks and lending institutions cannot take billions of dollars in loss and pretend the economy is sound. We are about to enter a time of facing consequences that many misjudged.( Buy now , Pay much much later or Never.) Many were seduced by artifically low interest rates and overly inflated housing values. If you believe the banks will take their write downs without trying to recoup these masive losses. Think again. Savings are at an all time low , while consumer and mortgage debt has exploded. High interest rates and inflation will be a reminder that loose lending and cheap money will impact us all. Just take a history lesson from the 1930’s or 1980’s. Unfortunately many have not lived through hard times, to understand what the global economy is about to face. History repeats itself. Live and learn.

#11 SOLD on 08.27.08 at 11:40 am

I just sold my house,
this is AWESOME!!!!!

#12 MBS-Economy on 08.27.08 at 12:26 pm

so which mid-town project was this?. I didn’t even hear anything about this. There’s a few homes in my area which has been on the market for over 2 months. They’re well prices but still no takers ….. I think the people who are buying now are losing $20,000 right off the bat.

#13 smwhite on 08.27.08 at 12:32 pm

Kind of funny with all those “experts” claiming that financials were a “buy” back in the spring…

Worst is over folks, we can now go back to watching reality television.

This one is for the Calgarians that think the turn around is 2009. You may have had more disposable income then anywhere else in Canada, but its been flushed down the toilet if you pumped it into RE, don’t worry, it will come back in 5 – 10.

#14 Djonic on 08.27.08 at 1:27 pm

Thank you so much for your information so easy to read and understand compare to other sources I have come across so far. English is not my native language and in most cases I read articles and can not get the essence of the read. This blog is fantastic as it resonates with my personal view and understanding. Thank you Garth
But I always leave the room for doubts and try to look at the subject from various angles.
Therefore I have a question boiling in my mind for quite some time now.
My family is facing pressure to get some room as 4 of us leave in 2 brm (900 sq/ft) apartment in Richmond, BC and it is getting tide with the plan we have in works at this point.
Mounting pressure comes from the developing situation with my parents in low planning to immigrate to Canada and leave with us for as they are coming from 3rd world country their finance situation is such that we have to berry the cost of leaving and medical expanses. With that in mind we where planning to get in to a co-op, but no chance. We are on the waiting for a year now.
I figured that I have to options:
1. Go and find 4 brm to rent
2. Close my yes and Buy house (dog house size wise) in Richmond
Now the question: Which option is more financially optimal in my situation?
If I select option 2, than following the information flow from this and some other sites I could quite possibly end up with loan that is way mach more then the market price of the house.
If option 1, then I have the freedom to make that move later but face the inconvenience of moving to a temporary place and managing the rent or sale of our condo unit.
I have no experience in such situations and on top no experience to buy sell/rent real-estate here in North America in times of decline. Please share your words of wisdom and experience in similar situation.
Thank you

#15 pbrasseur on 08.27.08 at 2:04 pm

Regime change in Canada?

Yeah right!

If I were you I wouldn’t book that limousine just yet ;)

#16 PUTW on 08.27.08 at 2:33 pm

Been watching the activity in RE for almost 4 years. I’ve saved up close to 120K working alone and living at home. I am almost 28 and single.

At least 3 times in the past 2 years I looked at homes and thought, “I better get into it now or else I may never”.
An RE agent, probably the only good one in 2006 dissuaded me from it and I thank him.

He also encouraged my family to sell their brampton home last year. But after the repairs, commission, and the purchase of a new home, our math showed us in a hole of 50k. My parents are aging so we decided to stick with it.

At 28 I find that finding a job that pays 50-60k (unless you’re a member of a protected militia) is next to impossible. While I know several people who make more than that, they are few and far in between. Most people I know are barely making 40-50K a year which seems to be the standard after 2-3 years of experience.

So when I saw some of my colleagues and friends buying 300k – 400k homes, I just wanted to know how they managed to save up so much money, and where exactly were these people finding the 70-80k jobs to fund these mortgages?

Having seen my immigrant parents work very hard to pay off just one house, I made it my goal to live at home and support them and move out only when I could put down 3/5-4/5 on a house.

But I am often tempted by RE agents to buy commercial property – a little shop in a plaza, a little food court shop in a mall and rent it out. What are the prospects for corrections in that arena? Any thoughts?

Than you.

#17 Ryan on 08.27.08 at 2:33 pm

Canada is in trouble. That is for sure.

But, when is someone in this country going to admit that the realtors are mostly to blame? It was THEM for a large part that starting purchasing condo after condo after house to “flip.” No one ever says anything though, they blame the average man who wanted to buy a house or condo, and live in it and now they are also going to lose big time. This is not all about shabby loans and the general population. This is about PROFESSIONALS who blatantly inflated the market in many cases.

I think it is time you started listing some of these people who provide a “service” by ripping off their clients.

#18 Mark on 08.27.08 at 2:56 pm

Right on the money Garth!!!

The real question is where is the next great boom? Obviously this bust will be even more devastating than the Dot Com bubble.

I’ll get some beaver hats ready and tulips, and Eric Lindros rookie cards. That should have me covered.


#19 Keith in Calgary on 08.27.08 at 3:21 pm


I love my in-laws.

But I will not sacrifice my personal financial future and credit rating to support them. If they could have given you $100,000 for a downpayment towards a house that may be another story, as it wouldbe their money that would be lost, but as you stated, it looks like that will not be the case.


#20 IN-TO on 08.27.08 at 3:26 pm

Mr. Garth Turner,

Which midtown condo project are you referring to? If it’s indeed the 1 Bloor East project as rumored, could you please provide a link with some facts or possibly some additional information?

This is certainly something new to ponder if true.

Relax. Not yet. — Garth

#21 lgre on 08.27.08 at 3:29 pm

smwhite – what do you think about Peter’s Crash Proof? looking to buy it

#22 SOLD on 08.27.08 at 3:35 pm

Ryan, go to a government website that shows the different average wages people make for each job there is in canada. Every province has a website like this I think for alberta. Average REALTOR MAKES under the poverty line. You think realtors are buying all these properties and inflating prices you are dreaming. It is simply a combination of everyone.

#23 grandeprairiegirl on 08.27.08 at 3:38 pm

The next big bubble – Food & Fuel.
Artificially created, genuine weather related ones. Take your pick.

#24 Calgary rip off on 08.27.08 at 3:45 pm


Nice income at age 28. I make around $80,000 and Im 36. That still isnt enough to buy much in Calgary. Interestingly, today in Calgary, I have checked several times today, including in Sooke, B.C. and Calgary, and most areas in Calgary, unlike Sooke, are showing DRASTICALLY decreased numbers of homes available. In Hidden Valley, listings decreased IN ONE day from 52 to only one house. So either all the sellers pulled their homes, they are reupdating their website, or there is funny business going on to manipulate the market. I believe there is funny business going on. Its been like this in Calgary since Ive been here, almost two years. Even before the listings were pulled, its hard to buy a place here. Now its impossible. PUTW if you are just young and not knocked up, and have no husband, dont worry about buying, buying is an obligation. Better to rent and then if it sucks you can tell your landlord see ya. At least you arent stuck paying for an overpriced shack like here in Calgary.

#25 Fiscally conservative but vote Green on 08.27.08 at 3:48 pm

How can people “afford” such expensive homes when just out of university?
They can’t!
They can make the monthly payments -and that’s all that they look at. I’ve seen that happen. I saved up my 25% down and bought what I could afford. Others got married, bought a new upscale monster auto, a monster home, new furnature etc etc. Then you watch a baby come along and the finances are strained – and events like this; and the loss of a job; will gut them.
Oh well – it worked for a long time.
Surely this is just a bit of bad luck!?

#26 squidly77 on 08.27.08 at 4:01 pm

tal gets mished

#27 jrochest on 08.27.08 at 4:01 pm

Djonic —

In your situation I’d rent something larger — a house, perhaps?

#28 smwhite on 08.27.08 at 4:05 pm


Don’t write that cheque for commercial real estate just yet…

At least Tal’s(or my new name for him, Tool) counter part, Jeff Reubin, he is being a little more realistic, even if its being the bad cop.

So if the BOC has been following the Federal Reserve with rates, this isn’t a promising sign for Canada in 2009, rates up 2%?

Just an observation, thoughts?

#29 Brian on 08.27.08 at 4:10 pm

True Value of Housing.

Rent: $1000 * 10 * 12

House Price: $120,000

#30 Rob on 08.27.08 at 4:27 pm

#2 lgre

Just the stating the facts, so don’t shoot the messenger … Tal stated anywhere up to 20% decline ‘out west’ which I think included Sask over the next 18 mths with Ontario posting a 5% decline [he cleverly didn’t factor in a recession into that number yet as we weren’t yet in one, at least officially, which as a economist observing ‘facts’ you can expect him not to.]

#7 smwhite is pretty close here when he says Tal is predicting yesterday’s weather. It’s more like selectively predicting tomorrow’s weather based on today’s numbers — specious at best.

Economists who get ink and a following of any size are generally horse asses.

Yet I still enjoy how folks flip out like Tal’s analysis is direct insult to their intelligence — let it slide folks. If you’re right, you’re right, be content with that and wait it out.

#31 No Fool.... on 08.27.08 at 4:29 pm

Um, that Lindros rookie card won’t get you too far….hahah.

Djonic, my advice is rent.
You should be able to find an affordable place to rent. The risk is absolutely minimal. No roof/shingle changes, no appliance/heater/hot water tank issues, and sometimes no maintenance either.
Seeing what’s going on in BC, I’d wait at least a year and see what trends continue.

One thing is for sure, when things do bottom, prices usually stay stagnant (the same) for a while. It’s not like they’ll bottom very quickly and we’ll then see another HUGE, QUICK spike. We know that investing/RE sentiment is usually slow to change from one side to another. It’s happening on the way down, and it’ll happen on the way up too. The only difference is, all those people that default on loans will never be able to buy a house ever again…..thus the buyers pool will shrink, thereby decreasing any chance of stupidity after a bottom too.

#32 dotava on 08.27.08 at 4:38 pm

Let’s face it “hangover” is in front of us. We have few options – pretend that we didn’t “party” so much, ignore reality and try to beet economic laws (last time work for short time just to climb higher on rollercoaster), or get back to reality and choose one of two options (unfortunately only left) – make “the” rid long and less painful (will be painful anyway) or have it short (giving economy chance to recover faster). BTW – don’t like either :-(

#33 dotava on 08.27.08 at 5:11 pm

#16 PUTW on 08.27.08 at 2:33 pm

Can you please find me the bungalow with at list one room (but most important is to have one – 6′ garage – bit bigger is GOOD – to park my bike) and if is possible to have door to get in/out and that is not over 2M – 1.999.999 – I am willing to pay.
Guys – if you’d like to find where fish start to “smell bad” – go figure… :-)
anyway – Garth U where half way to make good move (unfortunately didn’t happened) – keep doing good job

#34 dotava on 08.27.08 at 5:16 pm

What I meant – keep Ur blog we need education here. Education is miracle – kids start to respect parents and vice-verca what bringing us to appreciate our neighborhoods. Everything after that can just work for us ORDINARY PEOPLE.

#35 Crikey on 08.27.08 at 5:34 pm

I’m very bearish on RE at present (understatement!), but this astounds even me:

“The median sales price of California homes sold in July was 40.3% below year-ago levels as bargain-hunters snapped up distressed housing in large numbers, skewing the state’s housing market toward cheaper houses, the California Association of Realtors reports.

Median sales prices in the state — which peaked at just under $600,000 late last summer — fell from $587,560 in July 2007 to $350,760 in July 2008, a staggering decline that translates into prices falling by $4,500 per week.”

Be sure to check out the comments section, too.

#36 Calgary Rip Off on 08.27.08 at 5:40 pm

The latest bs from the mafia at the Calgary Herald and Mario T.:

“In 2008, the (Calgary) market is making a predictable (albeit soft) correction resulting in slightly more affordable housing compared to recent years passed,” says the report. “It was economically impossible for the market to continue at the pace at which it was heading and now finds itself adjusting to market realities. This adjustment period, as the market searches for its new foundation from which to build, should continue into 2009 when the provincial economy is poised for another growth spurt.”

It should list how they have arrested(that is the key word) by pulling all the homes in which they were fishing for greater fools and now not much of anything is left on the market in Calgary.

This is probably in anticipation of the problems come October 15th when reality sets in and the realtors actually have to do something like real work rather than posturing and driving around in fancy vehicles while the working class suffers silently waiting to acquire a home for their family.

#37 dotava on 08.27.08 at 5:48 pm

4 Mr. Djonic

Germans build $1M in pure concrete & bricks (mentioned in past) not cardboard box-es. NO HURRICANE can destroy – here we are talking about “condo” in Van (no land – NOTHING) if (hopefully not) flood/fire destroy it – what U have (even not place to pot Ur tailor). Lies can last for some time BUT …

#38 3rdman on 08.27.08 at 6:03 pm

Spain anybody..?

#39 dotava on 08.27.08 at 6:08 pm

#30 Rob on 08.27.08 at 4:27 pm

get real – R U playing stupid or …

who know to do the jab – let him do it. Incompetent or dirty (eitherway).

You are a tad weird, by the way. — Garth

#40 dotava on 08.27.08 at 6:12 pm

#25 Fiscally conservative but vote Green on 08.27.08 at 3:48

what is expensive & Y not to let our kids be better than we R? They should be – that is only way to prosperity and that we “old” guys don’t have to work until we die.

#41 dotava on 08.27.08 at 6:25 pm

You are a tad weird, by the way. — Garth

TNX Garth – what U R doing here is great – I have those lessens on U – back home in former YU – living and working around the world – broth to CAN – unfortunately on lies. Anyway – U R THE MAN – Ur book is excellent (I am not editor to talk about repeating – but someone mentioned – THAT IS THE WAY TO TEACH/LEARN).
Simple – I like SMART PEOPLE (easier to deal with). One more time CONGRATULATION (even U never was a part of my favorite party – but looks U will be). :-)

#42 lgre on 08.27.08 at 6:25 pm

Rob – you obviously didn’t read my post just skimmed it, then you want to try to correct my post again and see if you read something new this time.

#43 TruthorTalk on 08.27.08 at 6:27 pm

It’s all a vicious circle – US banks aren’t lending. And what will happen to banks willingness to lend in Canada, if property prices are declining?

#44 Jim_s on 08.27.08 at 6:48 pm

You are a tad weird, by the way. — Garth

All realtors are.


#45 Rob on 08.27.08 at 6:52 pm

#39 dotava – not really sure what you’re saying here.

if you’re going to insult people, at least have a point and drive it home, geez

#46 jrochest on 08.27.08 at 6:56 pm

Gee, Dotava sounds like a Eastern European version of the guy who posts as SATV, Thumsup and Browntown on the Vancouver Condo Info blog…

#47 rant in Calgary on 08.27.08 at 7:14 pm

Like this Garth?
Both Articles from Weds. Calgary Herald. (#13)

Nationally, CBRE is expecting a 40 per cent decline in investment transactions in 2008 compared with last year, but Kwong said Calgary’s drop will be about only 10 per cent.
“I always tell investors this. If you really take 2006 and 2007 out of the picture over the last 20 years, we’ve had very strong growth in Alberta,” he said. “It’s only the last two years that have skewed things and made it ultra hyper crazy. We’re going back to 2005 levels which was a pretty good year. So it’s not doom and gloom. And no one ever thought we could maintain the pace of 2006 and 2007.”

Does he mean 2005 sales levels, price levels or both?
Are they contradicting themselves in the same article?

Then in another Article.

CALGARY – Edmonton tops Calgary as the best place to invest in the residential real estate market, according to a report by the Real Estate Investment Network.
“If there were no strong economic fundamentals supporting the market, it would be a good thing to be afraid,” said the report. “However, when you study the long-term strength you will be able to relax and not let those from outside the country take up all of the good deals and look like geniuses five years from now.”
Sure all the Americans are going to take their R.E. profits and invest in Canada and BRICA will find Canadian Real Estate a bargain?

#48 dotava on 08.27.08 at 7:34 pm

#46 jrochest on 08.27.08 at 6:56 pm

Hi BDY – can you at list tell me how far U vent from Ur House (that they didn’t have to get U back – Firefighters are excelent guys and I don’t feel sorry to pay them) maybe one day I will get lost 2.
God Help U.

#49 dotava on 08.27.08 at 7:37 pm

#45 Rob on 08.27.08 at 6:52 pm

Sorry Rob – that wasn’t my intention. If U feel that way – I don’t know how to open Ur eyes. Garth – make the book – they attach him to trying to make money – ridiculous – lets get real here.

Love U All (even Islander – RE ;-) just joking)

#50 squidly77 on 08.27.08 at 7:40 pm

no mls listings in calgary..i think its an attempt by the evil creb of massive market that would be amusing and would give us all something to talk about
calgarys very own conspiracy perpetrated by the cities most loved realtor (i know who i would blame)

nope still 14,000 calgary homes on the mls plus another 3,000 or so private listings

lets have some fun here
13,000 mls
3,000 private
10,000 new construction
26,000 housing units for sale
so 1,000,000 people divided by 26,000 =1 house for sale
per 38 women child baby

when you look at it like that
you can plainly see that the calgary market has indeed crashed already

calgary is in worse shape then phoenix
why dont some other people do it for your own city and post the results here

nice thing about numbers..they dont lie complain or whine

#51 dotava on 08.27.08 at 7:47 pm

just to add to my 2¢

#46 jrochest on 08.27.08 at 6:56 pm
did U ever in Ur life live in different system (if U didn’t whit what U R comparing) – if U did – U must know that in former YU – education was for free not to mentioned health care (dental include). That U don’t thing is the best – check the documentary of Mike Moore “Sicko”.
BTW – Chile was much better (before Pinoche), as Costarica now.

#52 dotava on 08.27.08 at 7:48 pm

shoot where I am cumming from LOL

#53 Jeff Reubin on 08.27.08 at 7:57 pm

smwhite wrote

“So if the BOC has been following the Federal Reserve with rates, this isn’t a promising sign for Canada in 2009, rates up 2%? ”

Yep, but that’s after a 2% rate cut this year to keep the old Eastern Canada economy rolling.

#54 dotava on 08.27.08 at 7:57 pm

#44 Jim_s on 08.27.08 at 6:48 pm

Sorry Jim to disappointing U – never-ever still anything from anybody (even dime from my grandma). Check the move “inside Man” (somebody will say that I work for holliwod – beeeep – wrong).

#55 jrochest on 08.27.08 at 8:05 pm

RE — Dotava’s posts #46 and #51

Hey! I know! It’s BORAT!

#56 mike on 08.27.08 at 8:27 pm

Two things… Canadians are fiscally tied to the US … We all know and agree… The yanks know that they are nowhere near done on subprime AND the US financial stocks,, jp morgan and lehman and freddie/fannie and about 50 other “small” guys are teetering. Just go to yahoo ” worst is yet to come”
TWO Realtors here in Toronto still say and believe not here. We are cheap on the world scale they argue. Until the 24,000 of them collectively get a clue and see the big bad picture looming then buyers here will keep being fooled into buying. Keep in mind ,,, less sales … Less commission… Lower prices… Less commission … Whether they are buyers agents or sellers agents their income depends on sales So why in gods name would they suggest to any buyer to wait ….. A conflict of interest. Best advice is to wait it out and see how this all unfolds IMO

#57 squidly77 on 08.27.08 at 8:36 pm

never have there been more houses for sale in calgary
its an all time high..consider my last post
the calgary herald ran this article (advertisement) today
is this for real
trying harder and harder to find buyers for his distressed

i no longer purchase newspapers as they are irrelevant
you can not tell fact from fiction or as in this case fact from an advertisement

#58 Calgary rip off on 08.27.08 at 8:38 pm

Hey Squid.

Mentioned about the mls non listings to my wife tonight, 51 vanished overnight in Hidden Valley alone and she said they are probably redoing the listings. It doesnt make sense. If you drive in the areas where there are signs for sale, those houses are NOT on mls. So what exactly is the plan here CREB? Help the clients in Calgary with the signs, but the actual internet listing for your home for sale is not allowed because it may skew the statistics? It looks like this, and its very interesting that only the pricey houses are now listed. In Cochrane the listings show the dumpy duplexs first and then one mid range($350K) followed by more overpriced garbage. I wonder what Ed Jensen’s comment is on all this? Looks like a bunch of realtors got fired according to the mls. That may be a good thing as there were a bunch of people driving around in overpriced vehicles listed as realtors on their hummers. Maybe they can go persuade people to buy bean burritos at Taco Bell, as they probably paid their mortgage off, they are just working for their overpriced toys.

#59 smwhite on 08.27.08 at 8:43 pm

#21, Igre

Best book(Sorry Garth haven’t finished yours yet :) ) I’ve read in a long time, especially when Schiff details how GDP and CPI are calculated.

Highly recommended, you’ll love the section on CPI and my favorite GDP(Natural disasters are our economic friends).

#60 smwhite on 08.27.08 at 8:47 pm

#53 Jeff Reubin

Rolling backwards?

PS Sorry I spelled your name wrong, Mr. Rubin, had a case of the dotava’s… :)

#61 Bailing in B.C. on 08.27.08 at 9:04 pm

Squidly77 #50

“What a great idea for fun!” I thought to myself… and then I did the math

Small town B.C. population 16,000

Just in the last few days the mls has come back with “your search has returned over 500 listings. Please refine your search”

16,000/510=1 listing per 31 people

This does not include For sale by owner, or new construction (of which there is a lot)

We’re screwed, right?

#62 piccaso on 08.27.08 at 9:04 pm

dotava your a fake, your a middle class white boy sitting in your parent’s basement.

#63 dotava on 08.27.08 at 9:08 pm

#55 jrochest on 08.27.08 at 8:05 pm

bas a mogo cachke a couups a tourod. (sorry 4 misspelling – guys PLS help me here that I don’t have to call second man in charge in MS).

Travel a bit – U will see how ordinary people are close.

#64 dotava on 08.27.08 at 9:29 pm

Guys if your strength is spelling – not gone help.

Nji-How – start 2 learn (I tried 8 years ago and get “slapped” and even today ;-) I am not sure did I “misspelled” or Paul did his part. (LOL – on me)

#65 dotava on 08.27.08 at 9:32 pm

Sorry Garth – but


#66 dotava on 08.27.08 at 9:44 pm

#62 piccaso on 08.27.08 at 9:04 pm


#67 jrochest on 08.27.08 at 9:45 pm

Garth, or other moderator, could you please turf the troll?

You don’t need to post this — just get rid of the dotava thing? It’s incomprehensible and it can probably keep this up all night…

#68 Schmoey on 08.27.08 at 9:51 pm

The manupulation of statistics in Calgary is disgusting. This is the only “profession” with no code of ethics and no responsibility enforcement whatsoever. When scandals like Enron and Arthur Andersen affected so many lives and people saw their life savings evaporate overnight, at least somebody was held responsible. I haven’t heard anybody be prosecuted for illegal practices in the Real estate industry, yet.

#69 Rick on 08.27.08 at 9:56 pm

Dotava – you have earned the ass**** of the year award, be proud. I suspect a realtor with too much time on his hands, saturated with bitterness. Kinda like what the Scientologists do to the online critics. Get a life Dotava, you are the greatest fool.

#70 Mario on 08.27.08 at 10:17 pm

From the Globe & Mail…

Ugly. Horrific. Troubling. These are just a few of the adjectives one could use to describe yesterday’s batch of U.S. economic reports.

Here’s another one: hopeful.

Before we explain why, let’s make it clear that we are by no means predicting an imminent rebound for the broken U.S. economy, which is grappling with a credit crisis and housing slump of epic dimensions. What we are saying is that Uncle Sam may be close to hitting rock bottom, which is a necessary condition for recovery.

Let’s start with the Conference Board’s consumer confidence index.

In August, confidence rose for a second consecutive month, to a better-than-expected 56.9 from 51.9 in July. While such a reading is hardly indicative of unbridled optimism, it’s clear that consumers are at least feeling less miserable than they were a couple of months ago.

In particular, the expectations index – which measures consumers’ attitudes about the future – showed a hefty jump, rising to a six-month high of 52.8 from 42.7 in July, lifted by lower gasoline prices.

Lynn Franco, director of the Conference Board’s consumer research centre, said the survey results depict an economy that “remains stuck in neutral, but may be showing signs of improvement by early next year.”

There was also some encouraging – or at least less discouraging – data on the housing front. First, new home sales rose 2.4 per cent in July from June, to a seasonally adjusted annual rate of 515,000 units. While the jump was largely because of a downward revision in the June figure, the number of unsold new homes on the market fell 5.2 per cent, which indicates that builders are reducing their inventories by slashing prices and scaling back construction.

At current sales rates, it would take 10.1 months to clear the existing backlog of homes on the market, down from 10.7 months in June and 10.8 months in May. That’s still an awful lot of unsold homes – a five- or six-month supply is considered healthy – but the trend is in the right direction.

“If this continues, inventory will shrink rapidly, setting the scene for stabilization and then recovery,” said Ian Shepherdson, chief U.S. economist for High Frequency Economics.

A second shot of optimism came from the S&P/Case-Shiller home price index of 20 U.S. cities. The index fell just 0.5 per cent in June from May, marking the fourth consecutive month that prices have declined at a slower pace. What’s more, nine metropolitan areas – including Boston, Chicago and New York – reported a gain, up from seven in May.

“While there is no national turnaround in residential real estate prices, it is possible that we are seeing some regions struggling to come back, which has resulted in some moderation in price declines at the national level,” said David Blitzer, chairman of the index committee at Standard & Poor’s.

It will be many months yet – perhaps a year or more – before the housing market stabilizes and consumers start to feel appreciably better. But it’s starting to feel more and more like we’re near the bottom.

#71 piccaso on 08.27.08 at 10:20 pm

My wife’s cousin from Geneva visited us in July this year. We told her about the home prices here. She told us that a home in Switzerland can’t be sold for a profit until you’ve owned it for 10 years, then you can ask what you like. She said the Swiss government doesn’t want investors/speculators coming in and driving up the prices, so as their own people can’t afford a home.

#72 Marcus Aurelius on 08.27.08 at 10:44 pm

There are two things that portend bad news for the efficacy of this most excellent aggregation of like-minded real estate observers:

1. the new and annoying invasion by posters who are illierate and suffer from severe ADDH. Go away and leave those interested in the real estate bubble alone. Please.

2. The worrying nonsense in Garth’s “day job” columns about Stephane Dion. Mr. Dion is the product of several generations of Liberal Party inbreeding, producing a perfectly ineffective albino mumbler-child, worthy only of pity for his completely hilarious sense of entitlement, self-importance and lack of “skills” (pace Napoleon Dynamite) passed on through the incestuous couplings of his brother and sister Liberals. A sad hillbilly child, without the slightest chance of any impact on the world whatsoever. Apart from another Conservative Minority, we should only have sympathy for the eventual quick passing of this defective little boy at the hands of knives already out, and sharpened.

Garth – you need to at least stop writing about this spastic child Dion (even if you need to show support as part of the lowest common denominator of rigid party discipline – you know, the discipline best shown by your new party in bringing Canada so many good years of Folly and Corruption). Your real estate co-religionists are worried – very worried – that your otherwise solid summary of overblown real estate markets will be fatally tainted by this grand mal seizure of support for a cretin. Stretches the messenger’s credibility a tad,no? Be a Roman – speak true, please.

#73 Mario on 08.27.08 at 10:48 pm

Dotava is Squidly when he’s sober.

#74 Calgary rip off on 08.27.08 at 10:49 pm

Is that Mario T. from the Herald on here?

Hi Mario, any wisdom about investing in Calgary’s mls?

#75 Brent on 08.27.08 at 11:29 pm

Here’s a fun game… Go on Comfree Edmonton and see how many pages you can find without a “price reduced”
listing…. Pretty tough. Get used to those 2 words

#76 y3maxx on 08.27.08 at 11:38 pm

To all you sky is falling, headless chickens….

“”What $1 Million Buys In Homes Worldwide””

#77 squidly77 on 08.27.08 at 11:45 pm

i can see that theres a new multi named poster here
probably the same demented narcissistic one we chased off the alberta blogs last weak he has but one intent on his agenda

#78 y3maxx on 08.28.08 at 12:38 am

Repost…This one has some logic to it…..

“Prices in Alberta, and probably Canada, will come back at least to the median price before 40 year and zero down came in in 2006. These instruments came in because prices detached from what people could afford to pay. Probably wont go below that in Alberta, but other places possibly. China and India are so ass backwards in so many ways, and do not have enough fresh water to sustain their population and growth. They will collapse again under their own weight. So, the big “oil is going up and will run out because of increased demand in CHindia” argument is moot. That leaves North America the best place to live/own anything. Dubai might also be good if you can afford it.”

#79 browntown on 08.28.08 at 12:57 am

hey garth! let me know when government can send land making machine to vancouver! 30000 more immigrants coming this year and ran out of land ten years ago! too much fuel building for next leg up! interest rates to low thanks to econ mishaps in cowtown and bill bariko town! thanks nutsters!

#80 Mario on 08.28.08 at 1:43 am

Calgary rip off said…

“I dont want to be paying someone else’s mortgage in Calgary that has less education than I do and makes less money per year than I do.”

Then he turns around and says…

“So get off your high horse. ”

I’m doing a story about arrogant jerks with three degrees who are walking proof that you don’t have to be intelligent to be educated.

#81 Mike.Slob on 08.28.08 at 1:56 am

Next 10 days are very,very important:

Aug/29 -CAD Quarterly GDP (2Q)
Sep/3 -CAD Bank of Canada Rate Decision
Sep/4 -Monthly Report of Sales August/08-TREB
Sep/5 – CAD Unemployment Rate (AUG)
– CAD Net Change in Employment (AUG)
Sep/8 -CAD Building Permits (MoM) (JUL)
Sep/9 -CAD Housing Starts (AUG)

For New homebuyers in 2008 new discovery:
Instead of “you’re richer than you think” in reality is
“you’re poorer than you think”.

#82 squidly77 on 08.28.08 at 2:56 am

REIN..its time to expose this con

#83 Bailing in B.C. on 08.28.08 at 3:03 am


Thank you for your link to Chris Martenson’s crashcourse. I’ve just finished it and it really clarified some of the things that I’ve had a hazy knowledge of for some time. Truely scary and well worth the visit.

#84 squidly77 on 08.28.08 at 3:21 am

calgarians read all the comments on my last postre-post it..and let it begin

#85 islander on 08.28.08 at 3:39 am

Shmooey, look, the real estate industry is regulated. Like all regulation enacted in the name of protecting consumers, it completely fails to address the legitimate concerns of consumers but it succeeds in driving up costs. About which consumers like you and Squiggly spend your every waking hour complaining.

If you have allegations of “illegal practices” by a realtor, don’t bother with the local board, contact the Real Estate Association in your province. The provincial associations are the regulators. Better yet, contact the RCMP and submit a complaint. Otherwise, cram your impotent whining.

#86 Schmoey on 08.28.08 at 9:20 am

Islander, we get it. You are an honest realtor. Yeah right!

#87 Call_A_Spade_A_Spade on 08.28.08 at 9:24 am

#16 PUTW

Good for you. You have your head on straight and great parents that promotes hard work and that there’s no free lunch.

I personally would stay away from anything RE related, even commercial. As this economy rolls over, there will be a lot of businesses closing, big ones, medium ones and small ones, who knows.

All you need to do is do some research on the REITS, which are commercial real estate stocks and public companies. They’ve been tanking (I know because I’ve been shorting them), commercial RE debt are one of the next shoes to drop or they are already dropping, just like sub-prime to houses, there’s a whole whack of commercial RE defaulting.

Stay put, save your money and let the deals come to you. I think it will overshoot to the down side, just like it overshoots the up side. I believe its going to go down a lot farther than anyone thinks, it always does. It’s human. Greed takes it too far on the up side and fear will crush everyone on the down side.

#88 Calgary rip off on 08.28.08 at 10:06 am


How’s the time at the Herald, jerk(I bet you are some doofus here that is a speculator ho)? YOU are the one who is arrogant by posting that crap in the Herald, trying to delude people by your crappy articles. I hope your houses hit the floor. That will probably happen through no effort on my part.

Its easy to say the educated arent intelligent when you dont have any education. Why dont you go to university for nine years, then evaluate this please? By the evidence of not being able to read your statistics and evaluate them correctly in your own articles, your own intelligence or lack thereof is showing. I and many others could submit better articles in the Herald than you.

This is of course assuming that you are indeed the Mario T. of the Herald which is doubtful. Anyway, whoever you are, STFU, your banter grows tiresome. Go back to serving burritos please at Taco Bell with your realtor friends.

#89 dotava on 08.28.08 at 10:21 am

#86 Schmoey on 08.28.08 at 9:20 am

“Islander, we get it. You are an honest realtor. Yeah right!”

Have some (unfortunately not that many) and I feel sorry for those – they will pay 4 bad ones.

#90 Marco on 08.28.08 at 10:38 am

After a historic boom and hyperbolic rise of the prices one would expect a correction. During a boom it always looks like the times have changed and the new rules are applied. Inevitably, some cheer-leaders will continue to jump around by inertia.
Will the rule of “revert to mean” show up its sobering face again?
How come the affordability is not relevant any more?
How come that the median family income (in Ontario) went down in real terms in the past 7-years, and house prices went up – by xx% ? Why? Because of new times or because of historically low interest rate and credit bubble?
All possible ways of pumping up the house prices have been exhausted recently, and the value has very much gone.

#91 Housing Bear on 08.28.08 at 10:50 am

Calgary Rip Off:

I agree with your substantive positions, but couldn’t we be a bit more civil to our opponents?


#92 POL-CAN on 08.28.08 at 11:00 am

#83 Bailing in B.C.

Glad you found it informative. Most of us do not realize just how bad the current economic crisis is and that it is a GLOBAL problem. This crisis just might be worse then the great depression itself. From my research it seems that the write-downs in the USA are only at 25 % to date meaning that there is a long way to go and that a lot more blood must flow. DEFLATION is here.

Here is another good link:

And as to who is responsible for the crisis:

Also…. For anyone interested in a bit of recent history about how the IMF, global corporations, and corruption almost destroyed a south american country please see:

Question everything. Do your own research. Avoid MSM or at least read/listen to sources from around the world for balance. I tend to frequent a few sites…. For political and economic views my favorites are (although there are many many others):

Happy reading…. Be carefull… Knowlege is addictive :)

#93 Calgary rip off on 08.28.08 at 11:38 am

Housing Bear:

I believe that Mario T. has done substantial damage to many people’s lives possibly by his inaccurate slant on his statistics when he reports in the Calgary Herald. He needs severe correction promptly, as the take in his articles is always pro real estate, irregardless of what is happening. This is highly unethical and harmful to people who trust his articles. If it were up to many people he would have been fired long ago. Why bother reporting if the agenda is obvious? I dont believe it is necessary to be civil to persons whose end agenda is evil.

#94 Djonic on 08.28.08 at 11:40 am

#19 Keith in Calgary
So you would step in to this market provided you had the money from you in lows and that is OK with the current trend, I was confused when I sow your comment.
I am leaning towards rent myself, but many people keep telling me that this might be a step back and some other arguments about rental income from our condo during Olympics. Therefore I vent and post my question in this blog hoping to get more input. That was an indicator to me that for someone if that is not your money then it is OK to buy in Richmond or Vancouver for the price of today sort of “not sure if that trend is applicable to GRVD” and could try to speculate. I am not comfortable to do that even if the money would be given from any of my relatives as we never had such amount on our hands and I am at my upper 30es.
Thank you anyway

#95 Keith in Calgary on 08.28.08 at 11:44 am


If you complain to CREA or CREB it is all kept quiet and done behind closed doors.

Why is that ?

Realtors have a problem……..a huge credibility problem in the eyes of educated people.

It is so bad that in California they are not allowed to even say certain things anymore (stuff that should not even be said anyways) things like “we have 3 other competing offers on this house” just to name one example.

Someone once complained here about car salesman, of which I am one, well, when car salesman ruin our countries economy, and families finances with their rampant speculation and outright fraudulent lies, they’ll have that right…….but until then…..heh.

#96 Glen on 08.28.08 at 11:44 am

This pending real estate collapse( actually not pending anymore…rather just starting) reminds me of a verse from “The Doors”:

“This is the end… only friend…the end….”

For many….my only friend financially has been real estate……

#97 smwhite on 08.28.08 at 11:46 am

#78 y3maxx

There you go, using that logic, but when you quote “PROBABLY wont go below that in Alberta, but other places possibly”, probably is a “weasel word” and that statement is of someone’s personal opinion, not fact.

Why will we not have another early 80’s scenario in Alberta? I don’t see any difference in the fundamentals.

I am of the opinion that if the US Congress continues to deny the use of “dirty” oil for their government agencies, including blocking their own oil shale from being developed, you can continue to expect less housing demand in the province of Alberta.

PS If you don’t want pissing matches then don’t start off your “arguments or points” by name calling, a la post #76.

#85 Islander, the stock market and banking industries are all regulated, that didn’t stop them from passing around worthless mortgage backed paper to their customers.

#98 Djonic on 08.28.08 at 12:05 pm

To #37 dotava
It was my soar point when we came to Canada and rented a basement…..but after 9 years it is what it is and everyone leaves in wooden houses even some wealthy people, on top of that I love Canada especially in comparison with my home county where I had brick mansion with 2 acres that our family of 8 had to sell for US split in 3 and leave that country just because we where not on board with majority of religious groups in our motherland. So thank you for you input but kind of irrelevant at this point to me.

#99 Djonic on 08.28.08 at 12:16 pm

to #31 No Fool….
That is what I have decided to do! Thank you for your input.

#100 Richmond Renter on 08.28.08 at 12:27 pm

To DeJonic,

Quite frankly, I don’t care if you buy an over-flated, over-priced and overly-expensive house in Richmond or not. But….If you buy, make sure you buy something nice. That way, I can swoop down in a year or two from now and buy it from you at 1/2 the price of what you paid.

But…If you wait, and if everyone else waited, then we’d have a chance a getting this bubble to pop a bit faster than it’s happening right now.

I get sick and tired of stupid people, running out and listening to the MSM, buying, listening to the cramp like “there’s a shortage of land” “rich asians will save us” “the olympics are coming” paleeeezzzz!

Oh, and I have one other question for you. Why would a new immigrant, with a choice of where he wanted to work and live, with pretty much NO money, move to one of the most expensive cities in Canada????

Whatever your choice, you’ll get what you deserve.

#101 smwhite on 08.28.08 at 12:40 pm

#93 Calgary Rip Off

Those “articles” are all coming from one news source, Can West Global, which as far as I’m concerned, has become the laughing stock, its the equivalent of Fox News in Canada. I haven’t seen any other media outlet push housing as much as they have. Ozzie J is their RE poster boy, I haven’t seen CTV or CBC pump hot air like they do. They are also the innovators of the real estate advertisement posing as an actual news article.

#102 Keith in Calgary on 08.28.08 at 1:13 pm


My point was it is not “your” money that you are going to lose. So them does it matter ?

Would I put my money into this RE market….no way !!

If your in-laws insist on buying, make them pay…..but educate them on the market risks of course.

If I were you I’d rent. And spend the next 3 -6 months educating them on the RE market here.

#103 WetCoaster on 08.28.08 at 1:25 pm

smwhite, #93

Spot on. You are a breath of fresh air in this miasma of idiocy. Thanks for your posts.

#104 Djonic on 08.28.08 at 1:48 pm

To #100 Richmond Renter,
Answer to your question – simple, because I was fortunate to be hired in 1999 by Company situated in BC, Richmond YVR area. They relocated my family here and I am happy since than. I am not discouraged by the possibility of a hardship we might face in this province and doing all we can to be prepared by continuing education and carrier development. My household income is 120000 and we are proud of that. So we enjoy what we do and what we achieve but not always with what we own/possess (our condo i.e.)
I was following RE market development since 2000 and sow how many of my colleagues Canadian got better living conditions and still financially sound I hope….
I was under impression that market should burst in 2004-2005 but it did not happened and that somewhat weakened my strong opinion about BC RE specifics.
So I started my research to be prepared for our lifetime decision. The need for larger place is inevitable and many opinions state that with long term it is financially reasonable I am about to collect all experienced people opinion/input to make my own decision.
I am not implying in my writing that I am buyer nor renter. I am researching this difficult subject the only thing I am convinced about that time is on my side at the moment and I will not rush with what ever my decisions to be.
Thank you.

#105 kabloona on 08.28.08 at 1:59 pm

smwhite: you’re bang on with the CanWest Global propaganda machine…..

The Sun = The Province = The Times Colonist = suitable for lining the bottom of the parrot cage.

The gospel according to the Aspers….at least back East there’s The (red) Star and the Mop n’ Pail widely available. You get more accurate reporting in anonymous blog posts, IMHO.


#106 brazer on 08.28.08 at 2:02 pm

Zoom shutdown strands airline passengers

Aug 28, 2008 01:25 PM

MONTREAL–Ottawa-based Zoom Airlines confirms it has suspended all operations.

Hundreds of Zoom Airlines passengers were stranded in Canada and Britain after the small Canadian airline stopped operations unexpectedly.

Zoom says the economic downturn and the unprecedented rise in the price of aviation fuel has made it impossible to continue.

It has begun insolvency proceedings in both Canadian and U.K. courts.

Zoom employed 450 people in Canada and 260 in the United Kingdom before the shutdown.

#107 brazer on 08.28.08 at 2:17 pm

Harper doesn’t rule out recession

“Prime Minister Stephen Harper, who is expected to call an election as early as next week, did not rule out the possibility the Canadian economy may have slipped into recession but said Thursday that if so it would only be in a technical sense.”

technical = real = maybe = ?

#108 SOLD on 08.28.08 at 2:34 pm

wow, squiddly77 takes this way to serious. As per his comment “I can see someone posting under multiple names”

This means you are cyber stalking. You are checking IP addresses of people.

You are sick.

I will post under as many different names as I want. There is nothing wrong with this.

Your comment proves you have gone off the deep end and have lost your credibility.

You have made thousands of posts. Everyone knows your opinions.

I checked your comments, your far to many, endless comments, as you asked in a previous post.

You are not saving any one.

You see yourself as a savior. A hero to the masses.

You are self important and enjoy being “famous”.

You may be a hero to your children, but that is all.

Please stop cyber stalking me.

You have gone to far, everyone has been beaten over the head with your ideas.

We get it ok.

“Its over”

“It has crashed”

We get it.

No one needs your “help” any more, since it is here.

You win.

You got what you wanted, a CRASH.


We know you are.

#109 David on 08.28.08 at 2:45 pm

Bungalows in Burnaby for $705K sound pretty scary. Prices like that take an eternity to correct to historical levels and it is doubtful the fire sale signs will be coming out anytime soon. Those calling for a quick and shallow bottom are deluded. People that over extended are very unlikely to realise actual losses and will most likely wait things out until the price crash becomes too obvious to ignore. The easy credit of the bubble era will not be there for any potential buyers and rising interest rates will mean buying a whole lot less house for the dollar even for the credit qualified. Even in inflation adjusted dollars a modest starter home should be priced at about $75-$90 for livable space. The cost structure of many of the homes on the market quite simply can not work and no amount of mainstream media hype or real estate hacks calling false bottoms will change anything. The market imbalances are structural at this point and the only option is now structural changes away from spec investing to value purchasing.

#110 squidly77 on 08.28.08 at 3:00 pm

sold..thanks your my inspiration
i know when the specs and realtors start throwing around the insults i have found your soft pink under belly
try finding some links to use to defend your precious so very precious so very very precious bubble
people like me are going to thoroughly enjoy watching it ketchup on my burger.. got it!

#111 Calgary_rip_off on 08.28.08 at 3:01 pm


A person can also tell by syntax and word order and tone as well if a person is posting under different aliases. It does not necessitate an IP address finder as you assume. It could be common sense.

It is not sick to make a loud and clear explanation about why not to buy in Calgary’s market. In fact, for the naive and new homebuyer, caution is a good thing.

Perhaps Garth as well as Squidly have helped to save someone’s privilege to buy a home in more affordable times, when these individuals can in fact make an adequate income to not only sustain their house in addition to their family. Nothing evil about that.

#112 crashing yuppy on 08.28.08 at 3:33 pm

Dear Sold and Sqidly,

Play nice boys, time will tell,

My money’s on Squdly

#113 y3maxx on 08.28.08 at 3:41 pm

Interesting tid bits…

Sask, Alberta & BC should secede from Canada.

It’s a manufacturing recession in Ontario & Quebec…will that cause a Western Canadian recession?

Mortgage Interest rates rising substantially above 6% will cause further recessionary problems.

#114 y3maxx on 08.28.08 at 3:42 pm

Garth Turner is a sensasionalist.

…I know, I did a toronto sun realestate interview with him about 25 years ago.

Wow. What compelling evidence. — Garth

#115 David on 08.28.08 at 3:59 pm

Sold, you have things so wrong. Totally wrong on all counts. Having actually lived in Alberta during the bust of the 80’s, the nincompoops from the banking/financial sector frequently trotted out the Nuremberg defense arguments. No one was responsible, they were unaware of what was happening and they were just following orders. If you wish to hear real crap, clean your ears and listen to some of the forthcoming nonsense which will be rife with Nuremberg defense arguments and stop ranting about Squiggly. It is impossible for any rational individual to take glee in the collective penitence of paying for this idiotic real estate bubble.
Maybe trot out some imbecile supply and demand arguments?
Population growth and new household formation were at all time lows during this period. Family income growth was weak, especially with respect to males. New housing starts and condo developments hit record peaks in 2006 and rents barely outpaced inflation. Factor in a negative savings rate among Canadian families and a flat lined rental market. And don’t forget all the easy credit. The Mother of all bubbles!!
In retrospect it is easy to see how grossly misaligned housing market fundamentals were in fact.
Right now, virtually all the Canadian too big to fail banks are heavily exposed in the mortgage markets and CMHC is most unlikely exposed to some enormous financial risks that could easily obliterate its capital base.

#116 if you don't like it on 08.28.08 at 5:57 pm

So how long will prices drop, anyone care to take a stab at that prediction??

All those people that have to take the time saving for the min. 5% down, when they finally save enough, lets say 2-3 years will housing go up again because people are buying again?

And when is the next time prices will raise again?

What should the average price of a home when the average wage is $100,000 in a household?

These are the real questions that I would like answered.

Thanks in advance to anyone that provides these answers!

#117 smwhite on 08.28.08 at 6:03 pm

#107 brazer

Thanks for that, haven’t had the time to troll for news today, and this just proves my point about the Tory’s wanting to get that election on the go ASAP.

Don’t ya love it, the USA are in a recession, but back in the spring because it hadn’t been two quarters of negative growth, it “technically” wasn’t a recession so the serfs were told not to worry.

Now were technically in a recession but don’t worry, it doesn’t feel like one…

Harper should fly his ass down to Oshawa and Windsor and tell CAW workers that will be filling up coffee at Tim’s just that, its not a “real recession”. Your 60K+ a year job that has been replaced with a minimum wage job should suffice.

I’ll give him a pat on the back for at least coming out with it, but I hope people are starting to see what’s on the horizon, and more importantly, why there is so much talk of an election before October 15th.

Garth, is anyone in the Liberal party listening to you, honestly, the economy and housing issue although would alienate you for a bit but any party that had have come out in the spring and said, “It’s the economy, Stupid” would have built up some real credibility. If its the #1 issue in the USA (80% of their citizens think so) it will be an issue in Canada. People aren’t going to give one sweet patooty about the economy if they can’t put food on the table or pay for their HD television. :)

Looks like the Newfs got themselves some of the “clean oil”… Good for them!

Quick speculators, get your asses out east as the masses move to the rock.

#118 Mike B formerly just Mike on 08.28.08 at 6:13 pm


Can we please divulge the condo that was cancelled??
Others looking to buy in Toronto can you please post your thoughts as to what the state of the market is at present from your observations or experiences?

#119 SOLD on 08.28.08 at 7:05 pm

Squidlly #110

“I have found your soft pink underbelly”

That just sounds disgusting. You sound like a serial Killer.

You are a bully. Pure and simple.

As stated by me above, I sold my house, and look forward to prices coming back to earth.

I agree it is a bubble, simply by the classic definition of what a bubble is. You dont have to go ape shit like you do on and on about this to “get it”.

The truth is, YOU provide no service or help whatsoever to any one, besides your admitted advice to your own children not to buy, which was, good advice.

All you do, all day long, over and over and over and over and over and over and over again, is post on GARTH TURNERS BLOG, or GLORIAS ALBERTA BUBBLE BLOG, you post endless link to loads of great research of which you did none, like say RADLEY77.

You post endless HATE FILLED COMMENTS toward all kinds of people

You post immature pointless links to youtube videos of the hindenburg or titanic.

Why, if you are so wise, do you live in Rundle in Calgary. I grew up in NE Calgary, I know it is not considered to be a good area. Poor area to own real estate in. Why didnt you take your own advanced real estate advice that you link to so profusly, see this all coming, and use some leverage from your current home you have owned for ten years as a deposit on a home in say Royal Oak. You missed the chance to pocket an easy quarter million. Not many people who make money like you say you do CHOOSE to live in a “lower class” area.

Anyway, this blog is about real estate.

Calgary Rip off #111,

Squid is portraying himself as a savior and a saint and a guy who is generally knowledgeable about real estate, all on the back of everyone elses hard work and research. Garth owns this site, GARTH wrote the book, MISH writes his own blog, Peter shciffe wrote a great book, GLORIA runs/owns the Alberta bubble blog, Bob truman runs his blog, squid is just running around shouting at everyone picking fights, insulting people and acting like a raving lunatic.

I guess my ultimate point is squid is

Shut the fuc$ up. You lost your credibility man.

#120 JO on 08.28.08 at 7:25 pm

Crash Proof book is not Schiff owns/runs a large brokerage spcializing in foreign stocks. He basically says USD will go down to nothing in a hyperinfation so we should all own foreign stocks that pay dividends..I have spent years (it is my one of my two hobbies – along with soccer) researching and reading up on financial crisises and have read many boom and bust books (yes, i have read Garth’s After the Boom back in 96 or so…good read). In my opinion, people should look at forecasts from all angles before deciding…and it is very important to look at people who disagree with the forecast you most favour. I have to say, if anyone is interested in reading some good books about the economic situation and possible future 3-5 years, I would recommend: 1) Mobs, Messiahs, and Markets 2)Empire of Debt, 3) Gold-Once and Future Money by Natahn Smith, 4) Financial Armaggedon by Michael Pantzer (despite tabloid type is well researched and of the best in my opinion). For more bullish views, I think 1) The Future For Investors, and 2) The Silk Road to Riches are good starting points. I suggest always cross checking “facts” from any financial books from other sources (IMF site, St.Louis Fed Reserve site, economic research consultant sites (RGE Monitor, and contrarian bank economists or strategists). One last word for all buy the dip ..ers. Of course the market will eventually come back..but consider the underlying forces at one can time the market well but given how cheap rent is in many markets right now (and do not focus only on the actual cost of rent..consider the fact your net worth is not dropping which is probably going to be as much a true cost as the actual monthly rent), it would make sense to wait until 2012 if you can. Cheers to all.

#121 No Fool.... on 08.28.08 at 7:53 pm

Extrapolating stats for the remainder of AUG 2008, it looks like the average price of a SFH will be down almost ~10% Year-Over-Year (down ~14% from their peak) and sales will be down ~15%, while the number of listings on MLS ONLY will be up ~25%+. I’d talk about the median price YoY, but the numbers being reported by CREB are entirely fraudulent.

#122 Calgary Blog Bunny on 08.28.08 at 9:15 pm

re: #108 Cyber stalking

squidly is just a harmless nut. He’s a product of over-exposure to groupthink. We’ve had to watch his antics for years in Calgary. We don’t think he’s dangerous, though.

#123 LaLonde_was_the_NEP_criminal on 08.28.08 at 9:38 pm

#71 piccaso – Switzerland’s land prices exploded a couple decades ago from a ‘home-grown’ screwup. A decision by the CH federal government to implement a kind of social security stipulated that investments coming from the proceeds of premiums or wage deductions could only be made in Switzerland. So, all the money piled into CH real estate. Now, very few can afford to buy property. Widely-stated statistics were that 97% of the population of Zurich are renters by necessity – and that was when interest rates there were already the lowest in the world.

Very little building could take place in Geneva proper – only occasional renovations and rebuilding of obsolete blocks of condos/apartments would be possible, except for distant suburbs.
So, real estate is very stable and dear, even though large numbers of non-Swiss people live and own in Geneva. The Swiss in general have a system that exploits non-residents to pull cash into the system from outside and to protect itself from exploitation. I believe the 10-year rule is just another aspect of that.

#124 Shifty on 08.28.08 at 9:52 pm

107 Brazer
I’ve been anticipating the start of a recession dialog. Been through a few and it isn’t pretty. Yes, housing prices fall but what also follows is job instability, high interest rates and inflation – only the brave would get into RE. under those conditions. Any other thoughts/positions/stratagies regarding a pending recession?

#125 Jim_s on 08.28.08 at 10:25 pm

Realtots are the only ones posting under multiple names. Why would a normal dude want to? What would that prove?

Realtots need to, because the world is turning against them and their innane BS propaganda. They need to post under more names to “make it look” like there is support for rising prices and ‘solid economic fundamentals’. Their catch phrases sounds like a friggin’ side show, if you ask me.


#126 what is the truth on 08.28.08 at 11:02 pm

Again I ask, why am I getting no responses.

So how long will prices drop, anyone care to take a stab at that prediction??

All those people that have to take the time saving for the min. 5% down, when they finally save enough, lets say 2-3 years will housing go up again because people are buying again?

And when is the next time prices will raise again?

What should the average price of a home when the average wage is $100,000 in a household?

These are the real questions that I would like answered.

Thanks in advance to anyone that provides these answers!

#127 brazer on 08.28.08 at 11:03 pm

Big Ontario auto parts firm lays off hundreds

“Linamar Corp. of Guelph, Ont., confirmed Tuesday that it is trimming 400 to 500 more people from its 12,000-strong workforce in tough times for the North American auto and construction-equipment industries.”

#128 squidly77 on 08.28.08 at 11:19 pm

housing cycles
just for you SOLD
youre in denial
boy o boy your insults are getting pretty nasty
whats a matter dont you want to take responsibility for your own decisions ?
all you wish to do is to keep pumping and pumping real estate prices so that more and more canadians will be over there head in debt and support the likes of you
well i have some wont find many supporters on blogs like these
try posting on realtor will feel far less threatened
most albertabubble bloggers know who you are..a loathsome little troll

#129 squidly77 on 08.29.08 at 12:09 am

hey sold..your precious bubble is imploding in calgary
the specs and realtors are bailing
thats $160,000 below the average price

#130 prairiegopher on 08.29.08 at 12:44 am

Hi Garth,
My wife and I are going to be leaving Regina for sunny Alberta. Our choices are Red Deer or Sylvan Lake. As you know, Sylvan Lake is the recreational centre while Red Deer has more services, stores, etc. Which would you think would be the better investment and why?? Anyone else is welcome to share their views, but please keep it informative and useful. Thanks.

#131 kabloona on 08.29.08 at 12:46 am

#126, there are too many variables to answer the question “should I buy?”….so I have to say, it depends!

I suspect prices will bottom out somewhere around 2010, but no rush to buy as prices will bounce along the bottom for awhile. Should you buy? Well, only if you have a large DP, you can handle the monthly payments, your job is stable, etc., etc.. Do your homework….those are calculations only *you* can make, no-one can decide for you.

I bought my first detached house in early 1996, pretty much a bottom in the TO market at the time and the papers were full of economists saying: “RE is a lifestyle choice, not an investment…only buy if it improves the way you live vs. renting”. I’m paraphrasing, of course, but that was the common thinking in newspaper articles.

So, as a contrarian investor, you might want to wait until the MSM says not to buy a house – and HGTV is clear of all flipper and RE pumping programming….and then it’s safe to buy!

Just my $0.02…..your mileage may vary……


#132 SOLD on 08.29.08 at 1:22 am

ok, ya sucked me in again haha this is fun. I love making you look like a total fool.

A) I NOW do not own any real estate, couldnt care less what happens to prices. Im going to rent. Thanks for the advice YOU SAVED ME!

B) I admited it was a bubble. This is obvious.

C) thanks for the links, remember how I said you are immature because you post links to stupid pictures and youtube videos- thanks for proving my point.

D)Thanks for the link to housing cycles. I already knew that. Its pretty obvious too, because everything goes in cycles. YING YANG, UP followed by DOWN, back followed by forth, etc etc…what is happening now is totally predicatable and normal, and GOOD.

E)I have never owned more than one house at one time.

A side note, please learn how and when to use “their” and “there” and “they’re”.

F)$160,000 below the average price….who cares, lots of properties are $160,000 below the average price. Whats your f-ing point?

G)not a “specuvestor” or realtor. Im just a person, who you pissed off with your endless natering and many pointless posts, links and fighting with BT and many many others. I used to like what you had to say, but it just got repetitive, and frankly, boring.
Not to mention extremely disrespectful to all kinds of people, and races of people and different types of jobs people had. Like, who the f*ck made you the judge and Jury dude? BTW you dont threaten me at all.
Dont respond to this, you will just bring yourself down more.

Squidly77= COMMUNIST

#133 David on 08.29.08 at 1:53 am

If You Dont Like It, the crash is just starting in Canada. Real estate crashes are not like dot bomb crashes where there an investor can find something like a quick exit price on losses. Some markets will have an large excess supply or much crappy obsolete housing stock or foreclosures which will help to further depress house prices. I suspect the housing market will perform very much like the Toronto Maple Leafs hockey team and making the playoffs. Much talk about moving up in the standings while consistently losing.
The scope and magnitude of the bubble would suggest a long and protracted secular decline. Sellers won’t wish to sell at a true realisable loss and potential buyers will not have the initial equity requirements or qualified family incomes. This scenario is playing out in LA county right now with whopping declines in the 30% plus area and no signs of easy deliverance.
The real bottom of the trough will most likely occur in 2015 when all fundamental indicators are finally in concordance.

#134 smwhite on 08.29.08 at 2:05 am

#119 SOLD

You said:

Shut the fuc$ up. You lost your credibility man.

SOLD, your not doing yourself any favors either with that kind of lip, but I’m glad you liked Schiff’s book, it speaks the truth about asinine and useless statistics governments throw at the peons to make them feel “secure”. I was lucky enough to walk into it when it came out, and Schiff was a step ahead of the MSM in the states, all “predictions” came true, very similar to Mr. Turner’s crystal ball at this time.

#126 What is the truth, I’ve answered some of these in previous posts but I’ll throw a line your way…

Look at this chart from a very reputable realtor(and no realtors don’t deserve the capital R) in Ottawa and factor in that if you don’t manage a 3% return your not even with inflation, especially if you expecting to at least keep pace with inflation.

I personally believe Ottawa is one of the more conservative markets because of government, although the hi-tech sector, with the downturn in the global economy is taking a bit of a beating. In fact Kanata, where Nortel and Alcatel as well as lots of other tech shops are located, housing in that section of the city was reported at 0% returns YOY the past spring, one of the five cities in the country that didn’t have any gains, Windsor was the countries RE dog.

I see that 0% as -3%, factoring in inflation, agreed?

Garth has touched on this many a time, but I’ll answer your $100K household income question first. The gauge is some say is 1/3 or your salary should be for housing expenses or your home should be priced approximately 3 to 3.5 time yours salary to be sustainable.

The 3.5 number would suffice for “pricier” cities. Even 4 wouldn’t be insane at this point although we have nothing equivalent to Manhattan in Canada.

You would pay 7x your household income to live in the average Vancouver bungalow if I’m not mistaken.

I hate to ride the cliche but RE is local and some markets are out of control, expect bigger drops in the condo market where there is more speculation, I see a minimum drop of 10% for SFH over the next five years ON AVERAGE across the country and 25% for the condo market. Places like Toronto, Vancouver, Calgary and the other two prairie provinces that have had anal leakage from Alberta to have close to double that, 15 – 20% SFH and 40 – 50% for condos in these fluffy markets.

FYI the average Canadian household income is 70K, the average home is 330K. That would mean that housing would have to drop approximately 25% to move back in line with the fundamentals.

When I first came to Ottawa I was offered a condo for $85K in 1997 and being young and foolish denied it(rent was $800), the owner just wanted out after paying $125K in 1988 and watching her second property continue to slide. Simalar is listed at 170K. Wish I had that one back, actually anyone that bought anything in 96-97 couldn’t do any wrong.

One more thing, these crappy condos are shelter as is a SFH and the over built condo market will put downward pressure on SFH prices in this new bear/buyers RE market.

Buy or rent, you need shelter, its what you do with the money you save if you rent that counts, the best time to have credit, is when everyone else has none, don’t be too anxious to buy right away but if your buying today, expect to hold for close to ten years…

Half the population of Canada is boomers, most own houses, most will retire in 5 – 10, this is another factor that I’m not sure of yet, what effect will have they have on the market, it won’t be positive as the extract equity out or downsize. The smaller 20 – 30 crowd can’t afford 330K for a home, yet, but thanks to that 40 year mortgage they can have it all today at just the cost of their freedom.

Best of luck!

#135 jrochest on 08.29.08 at 2:30 am

‘SOLD’ and whoever else he is said:

“wow, squiddly77 takes this way to serious. As per his comment “I can see someone posting under multiple names”

This means you are cyber stalking. You are checking IP addresses of people.”

No, using whois or looking at the header of a post isn’t “cyberstalking”, it’s moderately intelligent due diligence.

You can post under multiple screen names if you like, but the only person who needs multiple sock puppets is a troll or an ax-grinder. Pointing out what you’re up to isn’t evil; it’s common sense.

Sqiddly may be obsessed, but he’s honestly obsessed — he always posts under the same ID.

#136 Future Expatriate on 08.29.08 at 6:34 am

RE: #114

What the heck is a “sensasionalist”???

Is that anything like a sensationalist?

#137 Keith in Calgary on 08.29.08 at 8:44 am

SOLD said….”Squidly77= COMMUNIST”

ROFL !!!

That is the same thing as a liberal calling a conservative a NAZI, when he is losing the argument. “Godwin’s Law” is what it is called. Basically it amounts to a total loss of credibility on the part of the person using it. That is you.

Looks like you’ve invented a new angle on the same law.


Squidly is not what you say….but rather a well thought out conservative person who can see the BS for what it really is…….he posts on other boards where I have read him for years and can vouch for the fact that he is not socialist or anything else, in any way shape or form.

For a true definition of communist….just look down south of the border at the “messiah”…….B. Hussein Obama……..

#138 Call_A_Spade_A_Spade on 08.29.08 at 9:44 am

#126 what is the truth

I’ll take a stab at your questions but please don’t take it personally if I make general statements, they’re not made towards you specifically.

The problem with humans is we all want to know definitive answers to everything. Life, money, marriage, blah blah blah. The problem is, life is unpredictable and therefore RE markets, stock markets and basically everything else is unpredictable. And therefore we can only make ‘educated’ guess and play on the side of probabilities.

So, my answer is I don’t know with 100% the answers to your questions. No one knows 100%. If I did, I wouldn’t be in this blog, I’d be on my 100 ft yacht or driving around in my Austin Martin in the south of France.

But, after ‘educating’ myself with books, blogs, internet etc. and studying bubbles, economic phases, inflation, credit creation, I’ve come to my ‘educated’ conclusion that the probability of a housing crash in Canada is upon us. I would guess it’s a 90% probability.

Why not 100%? Because there are too many variables and factors.

For example. In 2005, I told my friends that housing is going to go down all based on what I saw in the US and I grouped North America as one market. Well, housing did peak in the US in 2005 but not in Canada. My conclusion at the time was correct, however the one factor that I couldn’t factor in for Canada was the 30 then 35 then 40 year mortgages and the 0% down. Therefore the market in Canada went higher because of this unpredictable event.

So, as much as you’d like to know the answers to your specific questions, I’d like to know also. But I don’t and neither does anyone because no one knows what the government, banks, realtors etc. are going to do. Maybe the government will have stimulus packages like the US. Who knows what kind of crazy things governments will come up with.

My bet is that it’s over, after 0% down and 40 year mortgages, there’s not much left.

History shows that the time it takes a RE market to rise is the same amount of time it takes to fall. I think they call this the bell curve. Prices usually go back to where it is before the rise in adjusted inflation values but usually overshoot the down side. Historical affordable house prices is approximately 3 times a family’s pretax income (I think, someone can verify) and I think we’ve reached 4 times which is crazy.

Anyways, I like yourself, am curious as to what will happen. But I am just going to sit back and watch and you’ll probably know its a bottom in RE when no one will talk about it anymore at dinner parties. And this blog will probably be boring (no offense to Garth) because then it will be obvious that its a crash and there will be less of a debate.

Then we’ll move on to the next bubble: commodities and precious metals. Which I believe is not a bubble YET because its not a dinner conversation YET.


#139 Calgary Blog Bunny on 08.29.08 at 10:43 am

“Realtots are the only ones posting under multiple names. Why would a normal dude want to? What would that prove?”

Jim_S, you are the mother of all cyber stalkers! Squidly did post under multiple names on Bob Truman’s blog. He even admits it.

#140 smwhite on 08.29.08 at 10:44 am

#137 Keith in Calgary

I’m wondering how long until squid starts getting called “unpatriotic”?

In #138 Call a Spade said:

– Then we’ll move on to the next bubble: commodities and precious metals. Which I believe is not a bubble YET because its not a dinner conversation YET. –

BINGO! The news is only starting to come out on RE, 2 years of nothing in the stock market, next spring when the average Joe is looking to protect his retirement savings, will they run to precious metals and agriculture to stop the bleeding?

I too figured Canada to follow the USA market 2006, but didn’t factor in that dirty 35 – 40 mortgage, biggest economic mistake in Canadian history, and I’m not being a “sensationalist”. It will ruin many young families.

#113 y3maxx said:

– Sask, Alberta & BC should secede from Canada. –

Now who’s being a “sensasionalist”, or as we like to call it on planet earth, sensationalist.

Let me guess, “Let the Eastern Bastards Freeze in the Dark”. You didn’t hear a peep out of the auto industry when they were funding the west during their boom in the 50’s and 60’s. A country is a partnership of differing regions, you comment speaks volumes of your intelligence and your integrity.

So does the fact you “brag” about writing for the “SUN” news. Such a well regarded piece of literature.

Lest we forget, without the auto industry, there is no need for the “dirty oil”. If you haven’t noticed, our biggest trade partner is slowing down on consumption of EVERYTHING, that’s bad for ALL Canadian industries, not just manufacturing.

Your Kung Fu is some pretty weak shit.

#141 crashing yuppy on 08.29.08 at 10:56 am

Could this board be less about the personal feud between Squid and SOLD and more about the issues of RE.

C’mon guys nobody cares anymore

#142 TorontoBull on 08.29.08 at 11:05 am

Great post…

#143 y3maxx on 08.29.08 at 11:12 am

Answer to question…how low will prices drop from a peak/bubble scenario.

…+- 25 / 30%….since we are going back to conventional financing, that is the amount needed for downpayment.

Just an avge….other factors come into play…

hope that helps

#144 lgre on 08.29.08 at 11:15 am

“I have found your soft pink underbelly”

That just sounds disgusting. You sound like a serial Killer.

You are a bully. Pure and simple.

I think this is the most amusing thing I heard so far, LOL…I cant stop laughing..LOL

#145 Calgary rip off on 08.29.08 at 11:27 am

Prarie Gopher:

Red Deer and Sylvan Lake are very nice areas. From a house buying perspective, Sylvan Lake is probably a better investment: 1)You are right on a beautiful lake, unlike many lakes in Alberta, this one has clear water at the shores, and is nice to swim in. It therefore will likely remain a nice resort area in the future and will have good property values not to mention intrinsic value and feel good ownership. 2)The area is beautiful, has trees, and is not swamped with population.

As far as real estate investing goes:
The only real certainty about anything is death. There is no certainty regarding real estate. However what is certain is mortality. Everyone dies eventually. Therefore what is important is what chooses to do with the time one has.

That being said, in reference to basic needs, there is therefore no pressure to buy something ridiculously priced. It appears that it will be a long time coming before things get back to normal in Calgary, if that ever happens. Any prospective homebuyers considering Calgary, I wouldnt waste my time, check back in two years.

#146 No Fool.... on 08.29.08 at 11:48 am

From the CREB webiste:

“While we are preparing the month end statistics the home page statistics are temporarily unavailable.”

Preparing means cooking, cuz the last time I checked, spreadsheets worked pretty damn quickly.

There’s something massive stewing here in Calgary, folks. Massively BAD I mean.

#147 squidly77 on 08.29.08 at 11:57 am

real estate collapse..bring it on
to all the money lovers and pumpers out there
to all the ones looking for a free ride and free money
to all those wanting granite counters and wide screen tvs
triple car garages and ss appliances
to all those who can only insult and call people pointless names
your gonna get what you deserve..financially pasted
for the rest of us out there who are sick of the property pimps..who are sick of shows like flip this house
and the continual pumping of the msm
who dont want to watch there kids get married one day a sign into a life of financial serfdom the next
remember where we live
the best place to live in the entire world
this boom is going bust
dont let losing spec buyers discourage your participation in contributing to this or any blog
they are just bullies who need your money

#148 Mike.Slob on 08.29.08 at 12:45 pm

138 Call_A_Spade_A_Spade on 08.29.08 at 9:44 am

“Who knows what kind of crazy things governments and banks will come up with.
My bet is that it’s over, after 0% down and 40 year mortgages, there’s not much left”.

Now you can see that CMHC accsepting 35 years mortgage with payment only of interest.
TD Bank has cash-back mortgage what is Zero-down.
Still you have private insurances will going with 40 years mortgages.
So banks and insurances did everthing but what if
the Goverment next step will be that mortgage interest and house insurance is tax deductible as US?
Anyway the next two years RE Market in Canada will going down. General Trend in RE World Market is that we can see price correction between 10% to 25%.

Big Factors in 2008/2009:
Canadian GDP is very poor.
Interst Rate will going up at least 1.25% to Sept/09
Current RE Sales in Canada are down 13% and will going down at least 5% more in 2009.
Canadian Unemployment Rate from current 6.1% will be
at least 6.7% in 2009.

#149 Rasputin on 08.29.08 at 12:50 pm

Attn: What is the truth…I’ll bite and give my opinions for what they are worth. 1) House prices will drop for 5 or so years, if not 10 (a la Japan). Look at the price chart of the bubble. The slide side of any bubble chart tends to mirror the upslope side. Arguably the bubble started in 2001. We should see a quick drop of 40 % or so over 2 years and then a slow grind of 2-3% down per year over the next 4 years or so. Prices will probably overshoot on the downside. Bubble areas (you know who you are) will fare the worst. You will know when it’s over when all your coffee buddies are talking about what a crappy investment real estate is. The wannabe investors have to be wiped out. I’m not just saying that to be mean. It’s just the way of the world. Any idiot can make money in a boom. The world is full of people who mistake a boom for IQ. Tech, real estate or whatever. What separates the winning 10% from the rest is the ability to sell and keep their profit. I know lots of people who “made” a mill on Nortel and lost more than that on the way down. Pigs get slaughtered every time.
2) A rough price guide is 3x average family income. I don’t think there is a city in Canada (maybe Fort Mac) where the AFI is 100K. In Calgary it’s closer to $80k. So a “fair” price here might be 240k. Generally Real Estate is considered to be a good investment when it yields 10% on rental income. Which means a house that rents for $1500 a month would sell for 1500x12x10= $180000. Obviously we are no where near that in Calgary for example. A home buyer who is not an investor will not go wrong buying somewhere between those 2 numbers. Do the math for your own city. Again this is all my opinion and it’s free so who can complain! I believe the next few years are going to be very chaotic but the opportunities on the other side will be fantastic. Best of luck to you all.

#150 Dawn in Calgary on 08.29.08 at 12:54 pm


From the CREB webiste:

“While we are preparing the month end statistics the home page statistics are temporarily unavailable.”

Preparing means cooking, cuz the last time I checked, spreadsheets worked pretty damn quickly.

There’s something massive stewing here in Calgary, folks. Massively BAD I mean.


I agree. I’ve been watching that site and between the manipulations of the MLS listings and the failure to fall under $400k for a median price — something’s brewing. We should prepare a counter-offensive.

#151 squidly77 on 08.29.08 at 1:07 pm

never before in the entire history of Canada have so many Canadians tried to sell there home at the same time
its a massive panic exodus..sadly no ones interested in buying..a new record

#152 Keith in Calgary on 08.29.08 at 1:28 pm

Dawn in Calgary……

I have been harping on that for months now. Funny you should mention it.

Every single month for the last 8 months the average price from CREB has dropped dramatically below the previous months final figure right after the month end…….only to slowly come back a bit at the end of the month.

Now being in sales and understanding how you cook the books, “IN MY OPINION” this means that they are probably taking all the high sales numbers for the current and “following” month, and using them TO REPORT for current month. Pushing next months high numbers into thE CURRENT month. We did this in the car bizz all the time to get our bonuses from the manufacturer.

#153 No Fool.... on 08.29.08 at 1:30 pm

Dawn #151,
I think the entire RE sector here in Calgary is getting together this weekend to try and figure out what possible way there is to put a positive spin on the numbers that are developing. I’ve seen some pretty terrible sales figures for SFH forming for AUG 2008 (I posted them earlier) and I know for a fact that the Condo market is nosediving in every respect.

I don’t know if you’re a homeowner or not, but if you are, I hope it’s a home and not an investment. Calgary is really going to have a rough fall in the Fall 2008. Layoffs are abound. It’s going to be a friggid winter here and people are leaving the province in droves.

Personally, I’m a renter (moved here at the peak), am debt-free and am at a stable job where I’m desperately needed. And though I don’t want the average joe to get burned, I’ve personally seen too much stupidity here. I’m 29, make $85K a year, save 40+% of my take home, and am really scared to see what many of my friends who make the same or less and who have multi-$100K mortgages are going to do when the crap starts hitting the fan. Heck, the government is clearly depressing inflation stats too. Gas isn’t a luxury in Canada, it’s a necessity. It went up 10% over night last night. Please. Something’s gotta give.

#154 No Fool.... on 08.29.08 at 1:36 pm

Also, there’s talk on here that the lending plans (0/40 mortgages) have been the bain of the housing market and lead everyone to buy.

I don’t completely believe that.
I think that the two main reasons that housing has gone nuts is:
1) Consumer confidence has been at an all-time high of a ride as the Canadian economy has just gone ballistic in the last 10 yrs due to increasing (speculative) demand of resources world wide. People with secure jobs feel they can spend beyond their means and then catch up later.
2) Historically low interest rates have actually been the key driver in all this. 0/40’s wouldn’t be possible without ridiculously low interest rates.
3) Both governments and the BoC have done a terrible job of curbing REAL inflation during the past 10 years. When the economies good, you crank up the interest rates to moderate a boom… don’t lower it. Why? Cuz when the economy goes bad, you can’t lower your interest rates any more to help out.

This country has been mismanaged like a plague since the 1970’s.

#155 No Fool.... on 08.29.08 at 1:37 pm

The 3rd one was a bonus….

#156 The Tallyman on 08.29.08 at 1:42 pm

Mommy there’s a Bogeyman under my bed!

Yes… he’s called the Money Lender and he’s coming
for all the idiots who bought overpriced Albatross housing.
Not to mention the credit debt on all the Homer Simpson toys.

Looks like a lot of bubbled wrapped, baby on board, gotta wear a helmet,
Mommy lets call in a grief counselor morons
are going to be moving back into
Mom & dad’s basement….. very soon!

Feel sorry for the starry eyed mannequins,
but the sad part is that they still cover their ears and refuse to face facts.

Mommy… Garth, Squidly, and all those other mean people are scaring me!
Make them stop. I don’t like ghost stories!!!
(Story continues… after diaper change)

Well kids, just go on MLS and see the increasing amount of listings that boldly state major reductions in their price. This is early WARNING.
See the trend?
These are the ones with enough sense to cut loses
and swim to shore
before the herd panics, jumps in too and nobody gets out.

Geez…. Maybe they should bring out a Braille version of MLS for those to blind to see the writing on the wall.
But hey… we’re all in this together so it must be OK…
ya right!
And as the boat sank they were heard to say:
“everything must be alright, they’re still serving drinks”

To all the moms & dads out there,
when the sad sacks saunter home…
Make em go to their rooms and stay there till they learn the Value of a dollar!

To Garth, Squidly and all the other whistle blowers my thanks.
You helped wake me up.

Some need only a single whisper to awaken while others need to banged along side the head repeatedly.
Keep sounding that alarm. It might not be pleasing to the ear but the truth seldom is.

#157 Dawn in Calgary on 08.29.08 at 2:27 pm

I don’t know if you’re a homeowner or not, but if you are, I hope it’s a home and not an investment.


I am not, as we moved here in 2006 and I refused to buy these pressboard crap houses. We do ok, paid off vehicles, I make $90k, hubby makes $40k. Might leave Cowtown anyway as have a potential job offer in California.

#158 anonymous on 08.29.08 at 2:33 pm

Dot-coms, Housing, Oil.

I avoided the dot-com stocks. And never got burned.

I bought a house in 03 and sold this spring for a huge profit.

I regret not getting into oil, but thankful that I didn’t get burned.

My point is not to fear bubbles, but to recognize them, profit off them (if you are smart enough), and get out close to the top when the trend breaks.

#159 CalgaryRocks on 08.29.08 at 2:48 pm

Which means a house that rents for $1500 a month would sell for 1500×12×10= $180000.

That’s 1x income in our family and we’re just 2 average professionals. I’ll take 2 houses at that price!

#160 Jim_s on 08.29.08 at 3:19 pm

That’s 1x income in our family and we’re just 2 average professionals. I’ll take 2 houses at that price!

That was average price a few years ago…. what’s so absurd about expecting prices to revert back to those levels?

In other words, what has fundamentally changed in Calgary to cause prices to be where they are today, aside from
1) easy credit
2) Global RE bubble
3) Oil bubble
4) Speculation / migration?

My point is all of the above 4 points are rapidly undergoing correction, and it is these 4 points that caused the absurd run in prices, IMO.


#161 Calgary rip off on 08.29.08 at 4:00 pm


Home ownership is NOT about building wealth. Its about getting a decent place to live in. Fine if you build the value of your money while living in it. Building money by just investing in real estate is risky.

#162 No Fool.... on 08.29.08 at 4:33 pm

Dawn, moving to Cali…nice.

Ya, I moved here in 2006 too. My woman and I have exactly the same household income. We resisted the crappy partical board temptations too (they do actually make homes flimsier out here than they do out East).

I was reading an article saying that Cali’s prices are off 40% on average. That’s insanity. What a great time to swoop in and buy something nice and cosy.

I’m a mountain guy, but I like the beach too. Maybe I’ll follow the footsteps of many family members and give the U.S. a shot too. Working visas are a pain for those not US-endowed though. Crap. Ah, who needs work!

#163 Calgary Blog Bunny on 08.29.08 at 4:45 pm

Re #148

Jim_S…You’re pretty emotional over this. Does the “S” stand for “suicide bomber” or “stalker”?

#164 bill on 08.29.08 at 6:00 pm

here’s a personal story for those interested.

my partner and i listed our downtown condo in the spring, and got over our asking price (a greater fool bought it?) – closing was last week…got the check from the lawyer, and got our equity banked.

we’re renting a 2 bedroom apt now for $1,500/month all in. it’s absolutely pleasing to not be paying property taxes, maintenance fees, utilities, etc.

we have no debt, good savings, and gross income of $170K between us.

we plan to buy, but no urgency on that one as we save more each month towards our “dream house”.

in 2-5 years, we’ll pick up that house for 70 cents on the dollar.

nothing in life is guaranteed…but i’ve lived through a couple of booms and busts, and this one walks like a duck folks.

for those who have heeded garth’s advice, good on you.

for those that have not, you will have to bear responsibility for that decision in coming years should he be proven correct.

this will only get worse….much worse.

#165 Jeannie on 08.29.08 at 7:07 pm

I don’t recall ever sensing so much angst, fear, bitternes and sarcasm on Garth’s websites.

Perhaps giving people a site to express these feelings and frustrations is a safety outlet for some.

As one who has both lost and gained during the great Alberta booms and busts, we finally just upped sticks and left for warmer climes…. the last Greater Fool (?) made us an offer we couldn’t refuse.
Not gloating, just feeling very relived and lucky that we read Garth’s book in time.

#166 Zebedee on 08.29.08 at 10:50 pm

Some REALLY interesting posts here vis a vis the Calgary market. Keith and Dawn, thanks for your insights. I wonder if you’re right…something BIG going down in the Calgary market. Although not as if it is totally unexpected.

#167 Another Albertan on 08.29.08 at 11:47 pm

I was out tonight with some friends who are executives at commercial real estate firms. They both reported that three “smaller” (i.e. – they are local to Calgary and have portfolios of buildings under 10 to 12 storeys, strip malls, etc) commercial real estate owners have defaulted on bank payments in the last two months and that the banks have taken over those properties. They would not elaborate on details other than one comment that “It is almost unheard of that a commercial owner defaults in Calgary. It’s been at least 10 years. And now we’ve had 3 in a short period of time.”

Another unrelated comment was that “Calgary companies looking for space have signed leases with ridiculous conditions over the last 2 years. They have more money than brains.”

#168 urbantoronto-ite on 09.03.08 at 5:12 pm

Hey Garth, which “mid-town” Toronto condo was cancelled? By “mid-town,” do you mean Yonge and St Clair/Eglinton area or Yonge and Bloor?

#169 Mike on 09.03.08 at 5:28 pm

Don’t believe this. There are plenty of reasons for a condo to be cancelled other than marker conditions. The real estate market, and in particular the condo market, is still a very lucrative opportunity for savvy investors.