The destroyers

cartoon-6001

A buddy is an electrician. “There are,” he told me. “more than one thousand guys in the union, in Toronto alone, who are sitting home.”

The main reason, of course, is the collapse of the homebuilding industry. It was crunched first by the abrupt demise of those insane 0/40 mortgages. That ended the steady stream of the young and the stupid willing to sign anything to get a house. Then came this annoying global financial collapse, and the end of cheap credit. Then, runaway unemployment which put a damper on buyer enthusiasm. Finally, deflation, as falling resale values made it clear buying a new house is not the ticket to equity, but maybe the road to ruin.

So, no new wires to string or panel boxes to mount. The trades have been nuked by all of this. And now it gets worse.

Hard to believe, but the same political leaders who tell us they’re pouring on the gas to get to recovery are actually standing on the brake. Here are three examples of how government is nicely screwing homeowners:

* Soon nobody in Ontario will be able to sell a house without first paying for a Green Audit. That will cost $300 to hire a guy in a yellow hardhat and cheap plastic safety glasses to walk through your house with a clipboard. He will write down what you already know, and what a decent home inspector would tell a buyer. Leaky windows, inefficient furnace, wasted hot water, whatever. An unfavourable report, naturally, will devalue your home and make it harder to sell. It will also tax you three bills.

* Soon the same evil province will take action which force all other holdouts to follow it, and merge its sales tax with the GST. As I have already detailed, this is the mother of all new taxes for the real estate industry. Suddenly there will be an extra 8% to pay on real estate commission, legal fees, moving costs, appraisal fees and every duct cleaning guy or lawn-cutter you ever hire.

Worse, the blended sales tax will apply to new homes priced at over $400,000. Buyers of houses up to a half million will get a partial rebate, but above $500,000, there will be a 13% levy slapped right on the purchase price. BTW, five large does not buy that much in Oakville or North Toronto or Ottawa. The result will be about $40,000 added to the cost of homes over $525,000 – and, you can bet, a lot fewer of them built.

* And then there is the idiot land transfer tax which was imposed on real estate transactions – all of them – in Toronto a year ago. All properties changing hands for $400,000 or less pay an extra 1% (on top of the provincial LTT), and the charge doubles for places over that threshold. On that same $525,000 house, this means tax of $13,200. Mix in the harmonized sales tax, and the price rises by more than $50,000 – or a full 10% of the property value.

Add the above to the reasons I detailed yesterday that real estate is entering into a multi-year recession.

This difficult event will destroy billions of dollars in personal wealth, idle many more Canadians, guarantee a long dark period and show what happens when we elect lawyers, not electricians.

108 comments ↓

#1 Ralph Cramdown on 03.28.09 at 11:09 pm

Realtors are all claiming that this will increase commissions, but I suspect they’ll have to eat it.

Re “five large does not buy that much in…” true, but being able to pay it still puts one at the upper end of the scale.

There’s rebates of the LTT for first time buyers. It’s debatable whether real estate should be a friction free asset which can be passed around like trading cards, but RE commissions still account for the majority of the difference, in any given resale, between what a seller’s willing to accept and what a buyer’s willing to pay. Likewise for marketing costs on all but the most expensive new builds. Now the industry which has always told us we should switch homes every six years, losing 5% of the total value (and a much greater percentage of our equity) every time is incensed that the Treasury wants a piece, too.

Want to avoid all this friction? Create a corporation to buy the house with, and sell the whole corporation when you sell. The real estate doesn’t change hands, so there’s no LTT or energy assessment. Doesn’t work for new construction, but if you build a new home for yourself, and live in it for a bit before selling, you can avoid a lot. Doesn’t work for the developers who want to pave over everything from Steeles Avenue to Sudbury? Oh well.

#2 Bob on 03.28.09 at 11:34 pm

Yup.

#3 Alex on 03.28.09 at 11:51 pm

I do not know about green audit, but the mandatory engineering audit of house would be helpful. If one of the former owners of the house made revision of the structural component of the house without obtaining building permit from the City, the purchaser might buing a serious and costly problem. The house inspections, which are not mandatory today and which are performed by unregulated “prefessionals” in the most cases will not detect changes. When skelston of the house is behind the drywall, such a detection of house structure illigal revision is not easy even for the experienced structural engineer. Technical package containing original drawings approved by the City must have been mandatory inclusion in the purchase and sell contract in order to enable the purchaser to trace illigal construction. With respect to the above, we are still living in the banana repablic…

#4 john on 03.28.09 at 11:55 pm

If $500,000 is the threshold that triggers the 13% hit it is probable most homes will deflate below this barometer. Things are somewhat clearer now as to what will happen in the real estate market.

Current value $500,000 home = $250,000 end of 2010
Current value $750,000 home = $350,000 end of 2010
Current value $1,000,000 home = $499,000 end of 2010

This will return housing to their historical norm and the common folk would be able to afford the common home.

#5 North Vancouver Citizen Jr. on 03.29.09 at 12:04 am

6 Points about “Mayday” plus the $50k tax on a $500k new home seem like a pretty big deal.

…..But have you contemplated that within the next 4 weeks Iran’s nuclear facility will be blown to smitherines by the Allies…North Korea will be bombed by both South Korea and Japan.

Wait there’s more…Chavez in Venezuela will meet an unexpected demise…and Cuba will be liberated by the Miami Private Armed Forces.

…Wait there’s even more brewing…Russia will reliberate Ukraine…while China reliberates Siberia away from Russia, ( you do know Siberia was once originally Chinese).

Finally, will Cape Bretons take any of this sitting down?

You heard it here first.

#6 $fromA$ia on 03.29.09 at 12:22 am

Uh Garth, who is responsible for introducing these taxes? Is this a collaborative agrrement with the Conservatives and the Liberals etc etc?

#7 Banklender on 03.29.09 at 12:23 am

A couple were referred to me to get a secured loan or line of credit for renovation. I was happy with the new business. So I started my routine questioning. How much is the market value of your home? $500K. Oh great I saw a big line of credit opportunity. How much is your mortgage balance? $480K. Oh oh. It turned out they took $20K from their credit cards as downpayment and now they want to borrow money to renovate “their” home. They are around 50 years old.
As a lender, I saw so many young couple bought a condo or townhouse with 0/40 or 5/40 mortgages. Some people lost their jobs already. How many people will be forced to walk away from “their” home? A lot if interest rate goes up even mildly.

#8 Alcone_Motorsports on 03.29.09 at 12:58 am

Yepper.

big Services + (bureaucratic waste + vested interest + mafia corruption) = big TAX

To reduce or cap the right hand side, you have to reduce at least one on the left hand side.

Now, if you’re a limp mild-mannered bunny rabbit and think government and crime are all under control so that you’re getting pretty good return on your taxes, you STILL better start reducing your collective expectation of getting everyone else to fund services to your wastefully spread-out suburban neighborhood.

#9 alexei on 03.29.09 at 1:29 am

doesn’t this mean a bonanza for current homeowners with resale homes & condos!

#10 WillsDad on 03.29.09 at 2:49 am

Canada is a joke. The level of taxation is astonishing, but what is more astonishing is Canadians will keep taking it up the gopher hole, even though the taxes they are paying are already more than adequate, except that they are paying for services to Quebecers, Manitobans, Inuit, etc. Meanwhile, Alberta blows up a hospital 10 years ago, and still hasnt managed to build a replacement, but when it’s done, it’ll cost a billion $$$. insanity.

Come to Korea to see how it’s done. The West hasn’t a clue about how Asians are kicking the crap out of them, but they need to get a clue quick. The city I live in is a bit larger than Edmonton. It has dozens of hospitals, no wait times, no appointments needed to see a doctor, extremelly affordable health care and cheap medicine. Oh, and glasses cost half as much, as do dentists.

Did I mention I make $50-$100/hr teaching English, with 0-4% tax? Meanwhile, back in Alberta, I was hired as a sub teacher, then my job was cut before I had even started in 2003 thanks to Klein cutbacks, then a year later they were begging for teachers. What a bunch of wankers…

#11 Jack the Lad on 03.29.09 at 5:37 am

Garth, a while ago you mentioned you should not buy assets that depreciate (houses, cars, computers, etc). Instead we shoudl rent or lease them.

That makes sense.

But speaking of cars, everyone I’ve spoken to says leasing is more expensive ultimately than buying.

So how would leasing a new car make more economic sense than buying a car (assuming you can’t write off the taxes on the lease)?

#12 David Bakody on 03.29.09 at 6:18 am

Stick it to all those who had nothing …. I mean nothing to do with the demise of the World’s Economy. As for the the G-20 summit “What a Freaking Joke” we will have the worlds best and brightest “Farginy Isholes” gather for tea and crumpets while an estimated 35,000 or more stand in the streets to tell them they are a bunch of losers! All but one as Chancellor Angela Merkel has spoken up and said …. the fix ain’t going to happen from anything said here!

Another point Garth added to your words are water bills ….. here in NS a simple $35-40 water bill with HST and a host of other costs is now $150. We had money in the bank (Dartmouth surcharge for harbour clean up) and then along came Amalgamation …. Bingo! money gone to HRM, then a new bigger tax for everybody to make it fair …… don’t y’all love that word “Fair” kinda like ” Reform/Conservative” Accountability & Transparency

#13 Chris in England on 03.29.09 at 7:09 am

Here in the UK “they” introduced Home Information Packs (currently anywhere from $300 upwards) which contain all the stuff any buyer would equire about anyway, plus an Energy Performance Certificate which shows how efficient/green your house is. I fumed (not very green of me) while the inspector trailed around in my house ticking boxes on a chart. At the end he told me the result was “not very good” as it is an old house and seemed stunned when I gave him a piece of my mind about how much this was costing me in real money (not to mention possible loss of sales). He beat a hasty retreat and I stomped and ranted around my inefficient house.

I need not have worried though. House-buying has been conducted in a particular way for decades here and the sudden appearance of these HIPs has not made one iota of difference. Only a tiny percentage of buyers ever ask to see them. They continue to conduct their own due diligence and make up their own minds. It is purely a money spinner for the grasping government, who rake in 10% tax for every HIP that is paid for.

This is the future. Ever more checks and inspections on anything they can think of (except their own pet habits of course) an army of busybodies poking around in our lives and charging us for it, a portion of which will go to the government so they can think up more ways to restrict us.

This is why I am leaving England. Thankfully many of the idiocies I have been subjected to for years here have yet to arrive in Canada but arrive they will (I can see them coming). I may be wrong in thinking that out in the countryside with a few acres I can have a small kingdom and largely please myself within it. Red tape will no doubt come and find me every once in a while but not as often as it would if I was living in a town or city.

Been merrily packing up mountains of office clothes for the charity shop this morning (will I really need them for digging up potatoes?). Looking forward to my own personal climate change – UK to Canada.

#14 Mike B on 03.29.09 at 7:15 am

Yes I would speculate a mini boom in RE in Toronto in spite of these tax increaes. Some people buying will panic and jump all over in spite of the massive ticket price just to save some tax. I have seen people spend 50k more just to save 10 k in taxes and of course that 50 becomes 100 k in 15/20 years especially if interest rates go up, which they will . In T.O. the usual spring flood of homes is quite low rising a mere 2000 from 22000 a few weeks. In other words the realturds are fixing the market and tellinhgtheir listing clients to wait a year to list. Manipulators not realtors. As for prices. I have seen modest drops and some outright junk asking 600-850k and sometimes getting it. Will spring volume increase?

#15 [email protected] on 03.29.09 at 7:18 am

Isn’t this going to make the price of homes < 400k in the GTA go up? Anything near the GTA thats decent is just below the 400k mark, there will be more demand for these homes…forcing prices up…Unless all RE prices dramatically go down?

This increases the cost of buying any house in any price range. Did you not read the part about 8% more on commission and all other services? The net effect is a real estate downer. — Garth

#16 Herb on 03.29.09 at 7:56 am

Thanks for pointing out the real implications of McGuinty’s little harmonization, Garth. Just by following the news, I knew that this was not going to help anyone except a useless government. The “good hands” we’re supposed to be in in Ottawa and TO are interested only in our pockets. It is past time taxpayers built up a little rage and resistance.

Ralph Cramdown, bless you real good for your hint at #1. We should all check this out. Heck, creative accounting seems to work for everyone else, so we might as well have a go ourselves. The primary residence provisions of the Income Tax Act might be an obstacle, though. Any tax experts on this board?

#17 Grantmi on 03.29.09 at 8:01 am

NVC Jr.

Dude! Are you on crack?!?!? I’ve been following this board for a little while now… and I have no idea what you’re trying to communicate or even say!

IMH.. unless you’ve got something INTELLIGENT to communicated about the topic of this blog.. .. please go detox somewhere else.

#18 Grantmi on 03.29.09 at 8:09 am

#10 WillsDad – Did I mention I make $50-$100/hr teaching English, with 0-4% tax?

Well Will! Unless you’re eating Kimchi every meal… you better be making $50 – $100 a hour. (and which is it.. is it $50 or $100. Big difference)

http://www.eatyourkimchi.com/index.php?id=7363970262955129572

#19 Jack the Lad on 03.29.09 at 8:12 am

WillDad,

I’m an expat in Korea, too. I’m not in the ESL industry, though. Surprised to hear you’re making 50 to 100 per hour. I’ve heard most of the ESL teachers are making about 2.2 million Won per month, which is around maybe $1600 USD.

However, I agree 100 percent though on what you say….

Asia is the greatest place on earth… IF… you have money. Heck, even Jim Rogers packed up and moved over here!

But if you’re poor, you would not want to live in Asia.

I’ve seen how some of the locals live and it’s not pretty.

Forget Vancouver… Seoul is the next financial/leisure/trade capital of the Pacific Rim.

#20 ally ally oxycontin free on 03.29.09 at 8:51 am

#3 Alex on 03.28.09 at 11:51 pm

“I do not know about green audit, but the mandatory engineering audit of house would be helpful. If one of the former owners of the house made revision of the structural component of the house without obtaining building permit from the City, the purchaser might be buying a serious and costly problem.”

Darn good point … I wouldn’t buy anything without a thorough inspection by a certified building inspector.

Nothing stopping you from doing that, at your own expense. — Garth

#21 Andy T on 03.29.09 at 8:55 am

Finalcial sector – lost money (no tax for government) or I should say they ask for money.
Large oil corporation – not making much money due to oil price punch down to $40 (no Tax for government)
Auto industry – the worse industry sector, lost money and need money from government (no tax for government)
Large corporations – also don’t make money on this economy conditions (no tax again for government)
New build home Construction is going to stop, due to difficult to project financing (no tax for government)
Unemployment go up, personal tax go down (a lot less tax for government)
Death and tax is the only 2 sure things in your life! Tax dollar to keep government running is must. That’s why government eye on tapping on home owner’s equity. You have a house, so you are not poor. Pay me (tax collector) tax!!

#22 dotava on 03.29.09 at 9:02 am

#8 Alcone_Motorsports on 03.29.09 at 12:58 am

Good observation but order is opposite -> mafia corruption + vested interest + bureaucratic waste. If you like to have crime clean country – you have to clean justice system and clean policing. There is no brainer – when you see police officer fire-on emergency lights just to have free pass for STOP sign and/or RED light and additionally judges who are part of mafia (still have some honest ones – but as always wisdom stepping back in frond of stupidity – until tough time as we are entering now when smart people start to gather together and say “enough is enough”.

What we where part of

That is how any good idea gets destroyed – as they trying to shut up Garth.

BTW Garth as few bloggers mentioned I got similar impression that you are softening.

It’s my cuddly, feminine side. Now buzz off. — Garth

#23 ally ally oxycontin free on 03.29.09 at 9:03 am

Nothing stopping you from doing that, at your own expense. — Garth

$300 to verify structural integrity in the face of a potential $200K expenditure looks like good due diligence to me … Otherwise … selling realtor and former owner … “Geez, we NEVER had that problem up to now.”

Where do you find a $300 structural engineer? I’ll take a case. — Garth

#24 ally ally oxycontin free on 03.29.09 at 9:11 am

#7 Banklender on 03.29.09 at 12:23 am

Sounds to me like you’re departing from the O’Flairity credo:

“Spend, Spend, Spend … Lend, Lend, Lend…”

… w/o mentioning the potential for high writeoff bad loan provisions.

#25 Da HK Kid on 03.29.09 at 9:17 am

Welcome to an era of Grey Market Economy. I need my plumbing fixed, you need 6 cases of beer correct.

#26 ally ally oxycontin free on 03.29.09 at 9:23 am

Great Little Fixer-Upper for you Garth

Near a public beach, [ perpetual “ya canna swim here warnings” ] in ‘sound structural shape with
excellent cross ventilation both summer /winter, near a former Hells Angels clubhouse, with a potential sub-let of the basement[s] in the outdoor two-holer.’

http://www.greaterfool.ca/wp-content/uploads/2009/03/foreclosure1.jpg

#27 David Bakody on 03.29.09 at 9:28 am

We are in a spring heat wave until after supper time, so a trip to Wolfville sounds good. Noticed a record number of open houses advertised which was not the case last year. I am not sure why all the listings in the Valley but there have been some high tech layoffs along with others, so I would suspect these homes required the #1 wage earner to cover the mortgage and of course most of the industry is farming and a little fishing ….. I can only imagine just how sad it is in the areas mentioned.

Garth and others…. first I will apologize for what I must say. We continue to hear from Flaherty and whole bunch of overpaid paid Economist (put Harper at the top of that list) that no one saw this coming! OMG “No One” hello with all these highly paid people and educators they did not see this ( no money down, no job, pay for closing costs with plastic for a 40 yr mortgages) coupled with leased cars with inflated residual values providing lower costs is and always will be a no brain-er ….. so to all those who now believe these same people will fix the world with infrastructure projects (heck kids are too busy/lazy even to cut the grass) and politically friendly non accountable, no tendered contracts and re-mortgaging to people with no jobs ( or same job less money and benefits) is going to fix the world is just amazing. What a bunch of overpaid people who still continue to beat the same drum to insure their jobs.

Just heard once again on the Radio ( Smart economist) Canada’s Banks are solid and the best in the world ….. hello will the banks feed people will the create jobs while they secure all the money people have in their savings accounts? Or will they continue to loan money without proven assets on the premise the taxpayers of future generations will pay for it. In any rate what do I know, I am just an retire man who was happy living in a 1200 sq ft home with a stay at home mother with two children and now I have a little jingle in my pocket and in the bank and still drive used cars.

#28 scott on 03.29.09 at 9:40 am

Last year DoNutinDalton introduced a bill requiring young drivers to have another restriction put on them.The youngsters got themselves organized on utube facebook or whatever,DoNuthin soon changed his tune.anyone rember?

#29 ally ally oxycontin free on 03.29.09 at 9:44 am

Where do you find a $300 structural engineer? I’ll take a case. — Garth

Heck Garth, I can get an excellent two-fer, named Sparky and Dave, who worked for us back in ’85, under a city-approved building modification. [ MVA changed upward significantly under re-assessment ] Sparky is working under contract to a major electrical firm and Dave always responds to the call.

They’ve always been efficient in breaking the project down to the fundamentals, labour & materials lists, and suggested progress payments.

#30 bobs your uncle on 03.29.09 at 9:51 am

Green audit? More parasites dipping into your pocket.

#31 dd on 03.29.09 at 9:52 am

#5 North Vancouver Citizen Jr.

…..But have you contemplated that within the next 4 weeks … Chavez…Russia…

Wow all, we have another Edgar Casey on our hands. Please tell us more O mighty one.

#32 DJB on 03.29.09 at 9:55 am

A few words on your criticism of the ‘Green Audits’:

First of all, when it comes to the cost, half is covered by the Ontario government, who will send homeowners a cheque in the mail for $150 within weeks of the first audit. So really the out-of-pocket cost is $150, which is really a drop in the bucket when it comes to the total costs involved in a real-estate transactions (compare it to the thousands of dollars in Realtor commissions, land transfer taxes, legal fees, etc.)

On top of that, getting the audit and making energy improvement renovations makes financial sense. The average homeowner who conducts an audit and makes the recommended upgrades goes from paying $2000 in energy costs to $1400; or $700 in savings per year! With interest rates being so low, even if you have to borrow to do the renos, the monthly energy savings will in all likelihood cover the payments on the loan. In addition, the audit allows Ontario homeowner to qualify for up to $10,000 in grants, making the energy saving renovations even more affordable (www.homeenergyontario.ca).

The fact is that improving the energy use in our houses is one of the biggest and most direct ways we can reduce our carbon emissions. A policy of mandatory Green audits will eventually cause people to focus on the energy efficiency of their homes. Instead of a new granite countertop, they will maybe get a new furnace – lowering both energy costs and greenhouse gas emissions. Homeowners will have to seriously think about making the “right” kinds of upgrades, knowing that potential buyers will clearly have the efficiency information they need to properly evaluate their house.

And what if you have already have an energy efficient house? Well, that now becomes a great selling feature that will allow sellers to differentiate their house from all others.

Ultimately as a policy tool, the Green Audit is brilliant. It’s a relatively cheap information-based tool that gives an incentive to homeowners to do something they will benefit from, but are generally too dense to figure out on their own. If people were rational, cost-minimizers, getting an energy audit would be a no-brainer, so the mandatory audits are simply a great way to push (but not force) us to do something we should be doing anyway.

#33 dd on 03.29.09 at 9:58 am

#10 WillsDad

“Meanwhile, Alberta blows up a hospital 10 years ago, and still hasnt managed to build a replacement, but when it’s done, it’ll cost a billion $$$. insanity.”

Ya, bet when the first one was built people balked at that price too in 18XX.

#34 dd on 03.29.09 at 10:00 am

#11 Jack the Lad

Buy a 2nd hand car with cash. It is easy and simple.

#35 dd on 03.29.09 at 10:11 am

#27 David Bakody

“We continue to hear from Flaherty and whole bunch of overpaid paid Economist (put Harper at the top of that list) that no one saw this coming!”

They were running an election since the minority was elected. Why do you think Harper called an early election … they saw the mess south of the boarder moving north.

#36 Got A Watch on 03.29.09 at 10:32 am

There will be two directions for the Ontario economy in the future:

– out – leave, move to a lower tax jurisdiction

– down – go underground, pay no taxes

Or a combination of the above.

I recommend a full consumer spending strike/tax revolt.

Pay cash for everything, pay no taxes on that transaction.
Structure your whole life to minimize taxes in everything
Buy as little as possible that you have to pay taxes on – groceries, gas, a few other necessities
Cut back on everything else non-essential that sends tax dollars to governments.

Starve the beast. Just say no to Government, in every case.

Do not vote Liberal in the next Provincial election. Trust no politician, they are all taxpayer defrauding scum.

#37 Arun Pillai on 03.29.09 at 10:40 am

Hi Garth

Did you see this recent article yet?

Houses In Major Metropolitan Ontario City Selling For $25,000

Written By Ken Norquay – Chief Investment Strategist CastleMoore Inc | Saturday, 28 March 2009 07:10

Real estate fever – really?

We hear you can buy a house in Windsor Ontario for $25,000 to $30,000. We hear that 40% of Windsor’s houses that were sold last month sold for under $100,000. It seems that there is a small part of Canada that has the same depressed house prices as our American cousins. Pierre Elliott Trudeau was right: when the America sneezes, Canada catches a cold. March 2009 sees America suffering from real estate pneumonia and Canadian just now getting the sniffles. Will Torontonians or Calgarians be able to buy houses for under $100,000 some day?

The very thought of such a steep drop in house prices sends chills through the bones of Canadian home owners – especially those with big mortgages. “Yes, it happened in the USA, but it could never happen here. And the Windsor situation is the exception, not the rule!”

In his book, Beyond the Bull, Ken Norquay points out that the human animal uses the most primitive bestial parts of his brain when dealing with money matters. We use our herd instinct to do what everyone else does just when we should be thinking independently. We use our “deer-in-the-headlights” fear instinct to “fight, flight or freeze” when we should be calmly executing our pre-determined investment plan. And now we wonder what instincts homeowners will apply to the current decline in house prices.

So far, Canadian realtors are acting like ostriches with their heads in the sand. They are in denial. “What’s happening south of the border cannot happen here.” And who can blame them? Their job is to help Canadians buy and sell their houses. Realtors do best in rising markets. When house prices go up, they do well. Commissions are good, mortgage brokerage fees are good, and the customers are happy. In times like these, it’s easy to find sellers but more difficult to find buyers. It’s no wonder Canadian realtors don’t want to face the reality of this downturn. They prefer the scramble of speculative activity associated with rising prices.
What about Canadian homeowners? What should they be thinking?

If they were getting a cold, they’d take zinc and vitamin C and get plenty of sleep. But what should you do if you think the price of your house might drop under $100,000? Sell it and rent? Scale down: sell your big house, buy a smaller house? Ride out the storm? What should you do if you are at risk of losing your job and not being able to afford your mortgage payments? Tricky, isn’t it? What is the intelligent thing to do?

For guidance in this question, we encourage you to objectively assess your position as a homeowner and mortgagor. Did you buy a too-big house because you wanted more exposure to a red-hot rising real estate market? Did you take a too-big mortgage because you wanted to leverage your exposure to rising house prices? Now that prices are not going up, are these “too big” decisions still valid? If house prices are going down, maybe you should have a “too small” house. Or maybe you should have only a small mortgage. If the times have changed, we should change with them.

For further guidance, look at the stock market. Most of today’s buy and hold investors have noticed that the 10-year rate of return on equity mutual funds is negative. They are wishing they had sold out 10 years ago. Or even one year ago! But they believed the mutual funds salesman’s line: “Stocks go up over the long term.”

Could that be happening in real estate now?

This is not a good time for speculation in Canadian real estate. Check in with your common sense: are you stretched out in a “too big” real estate situation? What will happen to you if Windsor prices spread to other areas of Canada?

#38 char on 03.29.09 at 10:41 am

Everyone please just read this :

http://www.geocities.com/zacherle_hoag/tball

Re the green audit : an example of the theory of man made global warming used to increase bureaucracy, grab taxes, and impoverish us.

I’ll admit I love pissing people off, but seriously, it seems a kind of religion has replaced science. At least listen to the global warming dissenters BEFORE deciding they’re all a bunch of evil oil company shills.

Happy Earth Day.

#39 JET on 03.29.09 at 10:49 am

This means from now until next summer when the harm on ization takes effect, there will be a mad rush by homeowners who comtemplated waiting, to try and sell, sell, sell (to save the extra tax on the comission, home staging, lawyer’s fee, moving expenses, etc.), leading to even more inventory than what had already been expected.

There is less of an effect on buyers because they typically don’t have to pay a commission which is the biggest component to a transaction, so there’s no real rush to buy.

More inventory, suppressed sales, lower prices.

Just my 13 cents…

#40 Hagbard on 03.29.09 at 10:52 am

I’m waiting for Libertopia myself. Wish me luck.

#41 LS on 03.29.09 at 10:53 am

@Jack the Lad

Luckily with cars you have a choice. The other way to avoid depreciation is to buy a car that has mostly depreciated as much as it is going to. Anything about 10 years old should do, and if you get a long-running car model from a reliable brand, you won’t even spend much on maintenance.
Kind of ridiculous how people will spend 15-20k on a new car when a perfectly good, reliable equivalent can be had for 1500-2000.

#42 North Vancouver Citizen Jr. on 03.29.09 at 10:53 am

Will China rule the world?…or will the U.S. nationalize all foreign debt?

>>
U.S. Foreign held Treasury debt…$3.0769 trillion

And about one-fifth of China’s currency reserves were tied up in Fannie and Freddie debt last fall when the two mortgage firms were placed under government conservatorship, The Washington Post reported.
<<

…To my expat friends in Seoul…Korea, Japan, Indonesia, Malaysia, Philipines and China lack enough raw materials for their manufacturing and highly populated economies.

Thinking, contemplating, thinking…..makes sense…as someone on this site has previously mentioned…..Vancouver will become the next Financial/Trade/Leisure capital of North America.

#43 electrician boy on 03.29.09 at 11:05 am

Since you just started with the electricians: They deserve what they have….I know very well this field.Ask the top idiots from 353 and you’ll see how upset they are since they killed the cow they were milking.

#44 Chris in England on 03.29.09 at 11:21 am

Da HK Kid #25:

“Welcome to an era of Grey Market Economy. I need my plumbing fixed, you need 6 cases of beer correct.”

Is how I am hoping to proceed, except I am likely to drink the beer.

#45 WillsDad on 03.29.09 at 11:29 am

#18 Grant Mi,

The rate of pay is dependent on the job. I teach at a university, also teach government employees, and teach privately. The rate of pay varies, as does the tax.

Don’t be mislead by cost of groceries. True it is higher, but considering tax is not really part of the equation, nor is a mortgage, anyone can save over $10,000 a year. I will save 50 G this year.

#19 Jack the Lad: I put in my time in hagwons. Now I reap the rewards of being established with experience here. Also get nearly 6 months paid vacation from my university.

#46 Bottoms_Up on 03.29.09 at 11:30 am

The S.H.(i)T. (single harmonized tax).

Ontarians need to organize. March in the streets. Hold protests. Until we do our voices will go unheard.

#47 Chris in England on 03.29.09 at 11:41 am

Back to the official line that “no-one saw this coming”, here’s an interesting snippet from a column in one of yesterday’s UK national papers, written by a political journalist called Peter Oborne. Can’t find it online anywhere so I am reproducing it here.

====================================
A sinister plot to protect the pension pot?

I believe I have stumbled across one of the most remarkable stories of the entire credit crunch. At the end of 2006, the Bank of England pension fund made a sudden and very extraordinary decision. It sold all the equities in its portfolio and invested them in index-linked gilts – even thouh it realised that such a move would increase the annual cost of the pension fund by some £45 million.

Looking back, this was a brilliantly farsighted decision because shares have since fallen in value by almost 50%. It seems clear the Bank of England fund managers understood the nature of the looming economic crisis well before anyone else. At the time, they said their decision was based on concerns about “unsustainable” positions in credit markets and the consequences of a possible credit crunch.

When I put this story to a Bank press officer yesterday, it was dismissed as ‘absolute nonsense’. But I remain confident of my sources. Indeed, the move from equities to gilts raises a very awkward question: did the Bank of England foresee what was coming as early as 2006 – yet did little about the impending crash, apart from protect its staff’s own pension fund?

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

#48 JET on 03.29.09 at 11:43 am

My previous comment is about resale houses.

With new houses, there may be an increase in sales leading up to next summer because buyers will be tempted to “get in” before the tax kicks in. But then again, the buyers who are most affected are the “move up” buyers, many of whom will have to sell their current houses first.

First time buyers are not affected and won’t/shouldn’t be tempted.

After next summer, who in their right minds would buy a new house over 400k, especially in Toronto?

#49 Bottoms_Up on 03.29.09 at 11:45 am

Recently, somewhere near Toronto:

A contractor phoned up a future client and asked if he could perform the work immediately, instead of months in the future. In exchange, the contractor dropped the quoted price by 50%! A sign of the times….

#50 jess on 03.29.09 at 12:19 pm

what took so long?

“Tax competition leads to low tax rates and increased prosperity.” said one think tank

… back In 2001, when the Organisation for Economic Co-operation and Development, (OECD) the world’s most powerful think-tank, was intent on stamping down on “harmful tax competition”,

http://www.guardian.co.uk/business/2009/mar/29/tax-havens

#51 Just a Carpenter on 03.29.09 at 12:28 pm

How many of the trades persons out of work really took the time to properly learn their trade? Have to say that it is a relief to see things slow to the point where I no longer have to beg and plead for someone to show up never mind worry about the level of their competence. For those looking to have something built, repaired or renovated, once again you can get a quality product at a reasonable price. The competetion for us in the trades will be fierce but I say bring it on!

#52 Herb on 03.29.09 at 1:13 pm

Just ran across this ad on facebook:

“2009 Canadaian Tax Credit
Find out more information on how you can get your Tax Credit Cheque from the government.”

No, I didn’t make this up. We are in good hands with a government giving us access to CANADAIAN Tax Credits. Do the Canadaians know about this?

#53 Alcone_Motorsports on 03.29.09 at 1:26 pm

#11 Jack the Lad

With a substantially deflating new product like autos, the cost per arbitrary utility unit (AUU) over the long lifespan of a purchased modern vehicle will be much less than the leased cost of the same AUU.

Leasing a vehicle made sense in the past for a heavily used commercial vehicle that you made money with, and when you needed to spread your startup capital around to buy other things too, like tools; and when the leasing company took care of time-consuming maintenance. Even then, if the vehicle was really heavily used to the point it was worn out in 3 years, it was cheaper to buy it outright because the leasing company would not give you any residual credit for it.

Even though lease rates nowadays may be less than in the past, capital cost for the same vehicle is now much lower. So the same cost/benefit scenario applies now as before.

For housing on the other hand, capital costs nowadays are crazy expensive compared to the AUU you’d get for the same rented property either over the short-term or long-term. It’s the exact opposite situation than for cars. So it’s better to lease (i.e. rent). It wasn’t always this way. Maybe a half century ago or more renting a house over the long term was a lot more expensive. But not today.

#54 Martin on 03.29.09 at 1:31 pm

Bring on the personal wealth destruction in the Billions. When average incomes can’t support living in cities like Vancouver, Toronto, Milton, Oakville etc something needs to change. Either wages need to increase by 2, 3 or 4 times or prices need to drop. As a country that wants to encourage home ownership, but ignores the level of servitude that entails all while our Quality of Life erodes a fundamental shift if what we as citizens seek out for our lives is required. A two income household with it’s 60 hr workweeks may pay that 400K mortgage. but these people sacrifice their families in the process. This reset may just encourage us all to realize that it’s not where you live, what you drive, or the balance of our portfolios that gives a true value to ‘Net Worth’. Net Worth should be redefined with a heavy weight on the relationships we build between our families, neighbors, communities, and world.

#55 rory on 03.29.09 at 1:37 pm

Hi all …

RE: Recourse and non-recourse mortgages here and in the US.

Does anyone know what the $$ effect will be to RE’s bottom line based on the differences of who is ultimately responsible for the mortgage debt?

My thinking is that in Canada we will have more bankruptcies per capita because we just cannot walk away without serious consequences, hence the bankruptcy option.

Also, I think, we will have fewer resale homes on the market (again per capita), which in turn should make the drop to the bottom less severe than in the US hence the $$ drop will be less than the US and not as prolonged…IMO

Does anyone have any thoughts on this, as my comments are just speculation? Also, which system is better for a country?

#56 $fromA$ia on 03.29.09 at 1:38 pm

North Van JR. , your nuts. Your welcome to speculate but don’t flat out tell us it’s going to happen.

You heard it first here. Suck it!

#57 Alcone_Motorsports on 03.29.09 at 1:44 pm

#13 Chris in England

Then stay away from the B.C. Lower Mainland. There’s enough governmental red tape there to choke a proverbial horse.

Case in point – the mandatory ICBC vehicle inspection ‘service’.

(Curiously, there is an isolated enclave on Vancouver Island in and around Sydney, that used to be known as the ‘tweed curtain’. It was far more properly British than the U.K. is. That stemmed from the days when British navy-supported settlements on the Island were the west coast beachhead for the Empire on the new continent. The culture never changed much.)

#58 Basil Fawlty on 03.29.09 at 2:18 pm

Some very enjoyable financial television with Jimmy Rodgers on Fox, and Max Keiser on French TV facing off against a French economist. At least there are some honest people not afraid to call out the clowns in charge.
http://www.youtube.com/watch?v=nsnsdgPEDR8&NR=1
http://www.youtube.com/watch?v=3GxIUhd1pAk&feature=related

#59 conan on 03.29.09 at 3:20 pm

I remember how the construction economy disintegrated in the early 1990’s. All trades get affected and you will see a serious downward trend on hourly rates.

Worse though is how this plays through the industry.
High skilled trades turn contractor and hire unskilled labor to do medium skill trades. The medium skill trades turn contactor and hire illegal labor to do low skilled trades. The low skilled trade are forced to work under the table or become unemployed.

#60 David Bakody on 03.29.09 at 3:32 pm

Garth …. will you please ask one of your old friends in Ottawa and take our poor excuse for a PM aside and sit him down and tell him ” It is better to keep your mouth shut and let everyone think you are a fool than to open it and remove all doubt”

Hello, Mr. Harper went on Fox news and agreed with Obama and back tracked on his grandstand speech with Stockwell Day ” We stand with you” routine. Bush and Chaney just Xed him out of republican retirement job.

Mr. Harper just said that he will not raise taxes after the recession to pay for the countries debt. Read my lips no new taxes ….. hello what is same hill is Ontario’s new HST? and more to come if not a combined tax grab even before the final number hit.

Where does Mr. Harper think 2-3 million high paid jobs are going to come from, plus all those new people who will have graduated from schools, universities and new Canadians with talent already in job market line up.

Back from Wolfville and there are many store closures on front street …. it appears people are driving to the new Wall Mart in Dartmouth or stopping before they come home, lots of for sale signs and price drops.

#61 john on 03.29.09 at 3:48 pm

Honestly it couldn’t have happened to a better province. Seriously I hope you enjoy it Ontario. You’ve been screwing up this country for so long it’s about time you guys eat your own dog food.

#62 Grantmi on 03.29.09 at 4:03 pm

This will also be the situation this year for BC Lower Mainland homes!!

http://i42.tinypic.com/ws1kea.jpg

#63 ally ally oxycontin free on 03.29.09 at 4:11 pm

#52 Herb on 03.29.09 at 1:13 pm

Do NOTclick on that file … It is linked to a dot exe file … which if clicked … will execute any and all Canadaians who click on it …

On second thought, you might be OK because you’re a Canadian, aren’t you?

#64 Grumpydawgs on 03.29.09 at 4:15 pm

Lets not forget about all the current direct and indirect taxes the government skims off the top in the new house development process. The DCC’s as they’re called have been experiancing a wildy escalating bracket creep for the entire bubble period. development Costs and Certificates raise the price of a new home over 25% for water & sewer hook ups , electrical, inspections, apllication fees etc etc. This extra $50 grand plus plus is gouging if you consider that the average homebuyer gives the government $125 THOUSAND before any of the additional taxes are piled on. It’s an out right ripoff and an excuse by a government which simply can’t control it’s own spend. The government is going to be forced to accept program rollbacks, salary rollbacks, perk rollbacks etc etc at some point. It’s either that or we will end up paying 100% of our income directly to the government and getting a ration card back in return.

Isn’t Cuba a very popular place for Ontario Ploticians? They must be taking lessons. But is seem like the Canadian population should be taking some lessons to …from history, from Thomas Jefferson who said

“When the people fear their government, there is tyranny; when the government fears the people, there is liberty.
Thomas Jefferson

It is time for real revolution”

#65 Jon B on 03.29.09 at 4:42 pm

The land transfer tax is an evil tax on mobility.

#66 ally ally oxycontin free on 03.29.09 at 4:47 pm

THE INTELLIGENT INVESTOR, MARCH 28, 2009

The Fight Over Who Will Guard Your Nest Egg

http://s.wsj.net/public/resources/images/MI-AV838_INVEST_DV_20090327210819.jpg

ring … ring…. ring…

“How much would you like to commit to our care?”

FIVE CONTINUOUS MINUTES OF GROSS TELEPHONE PROFANITY! ….

http://online.wsj.com/article/SB123819596242261401.html?mod=article-outset-box

#67 Grumpydawgs on 03.29.09 at 4:58 pm

#54 Martin, do you remember Pierre Trudeau’s “7 per cent solution”? To me it really explains the rationale behind the Canadian Governments constant ratcheting down of the citizens standard of living. The policy was designed by Mr’s Trudeau and Lalonde to keep a standard number of persons unemployed to keep the wage demands down . They also stopped the development of apprencticeship and trade schools programs to support cheap trade immigration rather than educate Canadians who were more prone to join trade unions and demand higher wages. This served to keep the wage demand standard of living increases to a bare minimum.

As a bonus , the very socialist Mr. Trudeau designed a top heavy bureaucracy to administer the deficit programs needed to support the deepening of despair he created by destroying ambition and replacing it with dependance. Quite Machiavellian when you think about it. But Mr. Trudeau was all about manipulation and wild scheming.

if you wonder why Canadians are always dead last when it comes to comparing standard of living numbers to every other Western developed country then look no further than your governments determination to keep you down by imposing an agregious tax regime and drachonian social engineering.

#68 ally ally oxycontin free on 03.29.09 at 5:00 pm

Get Chur Carbon Credits HYAR ….

http://online.wsj.com/article/SB123820702967163561.html

Auction Details Omitted From Emissions Bill

House legislators have decided to leave out details on a key aspect of a draft greenhouse gas bill — the percentage of carbon dioxide credits auctioned off versus given to industry.

N.B. This schemehas received the highest endorsement of Bernard L. Madoff

#69 ally ally oxycontin free on 03.29.09 at 5:10 pm

That Fixer-Upper of yours, though smallish, is looking better and better Garth!

http://online.wsj.com/video/as-kb-home-loss-shrinks-what-ahead-for-housing/6CC442A6-5E44-49B0-916B-5640AC8CD07F.html

#70 dotava on 03.29.09 at 5:14 pm

#23 ally ally oxycontin free on 03.29.09 at 9:03 am

You are right on this one – better invest in good engineer & lawyer than in useless-pathetic realturd.

#71 Future Expatriate on 03.29.09 at 5:15 pm

I’d give more credit to accountants and finance “geniuses” than lawyers elected to politics for this debacle.

Sometimes lawyers get the big picture; pencil pushers NEVER get it, and are only rewarded when they increase the bottom line, even if it is by merely cutting off functional body parts.

#72 go green on 03.29.09 at 5:33 pm

12 David Bakody on 03.29.09 at 6:18

Another point Garth added to your words are water bills ….. here in NS a simple $35-40 water bill with HST and a host of other costs is now $150. We had money in the bank (Dartmouth surcharge for harbour clean up) and then along came Amalgamation …. Bingo! money gone to HRM, then a new bigger tax for everybody to make it fair …… don’t y’all love that word “Fair” kinda like ” Reform/Conservative” Accountability & Transparency

Hi David – It wasn’t only Dartmouth who paid into the Harbour Cleanup. I moved down to Halifax in ’76 and we had a surcharge on our water bill back then for the Harbour Cleanup. But Halifax chose to use it to augment their taxes rather than saving it in a separate account.

BTW, our last bill for 91 days was $16.93, basic meter charge of #37., Environmental Protection $34.46 & Wastwater Mgmt. of $13.47 for a total of $101.86.

Although I was peed off that both Dartmouth & Halifax were screwed for so many years, I don’t think that $30.+ per month for water is a lot. I know in Mtl./Laval their water bill is included in their taxes, but that’s no incentive to conserve on water. My sis has an outdoor pool and my B&SIL have a large kiddies pool. Both use a greater amount of water than we do, based on what I have observed.

Not sure if I hit the submit button before as I hate this new wide screen laptop and apparently, according to my DH, my hand must be hitting the touch pad. The touchpad is so much larger than my previous laptop.

#73 Investx on 03.29.09 at 5:36 pm

North Vancouver Citizen Jr.

“…..But have you contemplated that within the next 4 weeks Iran’s nuclear facility will be blown to smitherines by the Allies…North Korea will be bombed by both South Korea and Japan.

Wait there’s more…”

…NVC, when you’re wrong… can you leave this blog? …Thanks. ….

#74 go green on 03.29.09 at 5:42 pm

I was watching one of those ‘old’ Buy Me programs this am while on the PC. I believe the RE agent said that if one didn’t declare a fault with the house the seller could be held accountable for 20, yep 20 years. I know we in NS have to declare problems or be held accountable – but for how many years I have no idea. If this is truly the case, why is new home construction only warranted for 5 years? And, I’ve also heard that so many of the 5 year warranties are worth the paper they’re written on.

Comments please.

#75 go green on 03.29.09 at 5:54 pm

BTW, we have a land transfer tax of 1.5% tax in our Halifax Regional Municipality. I can’t recall when it came into force, but it was awhile ago, IIRC

#76 go green on 03.29.09 at 6:05 pm

#13 Chris in England on 03.29.09 at 7:09 am

Hi Chris – I live in Nova Scotia. A family from the UK moved to our south shore last year and bought a large acreage. He does some freelance writing and is published occassionally in our Chronicle Herald. His articles are quite amusing & his reasons for imigrating sound similar to yours. The next time I see an article in the CH I’ll post it on Garth’s blog. Unfortunately, the CH doesn’t seem to have an archive beyond 7 days.

#77 . . . fried eggs and spam . . . on 03.29.09 at 6:07 pm

Would this help to cure the world’s ills? Russia calls for a return to the gold standard. — http://tinyurl.com/dlyc78

#78 Sun Yat-sen suit on 03.29.09 at 7:05 pm

With car you never win unless it is antique restoration project. It is not just a factor of depreciation on a new car. Parking, insurance, fuel, maintenance plus theft (more likely) still apply to depreciated vehicle.

One less apparent advantage to leasing: if you are unfortunate to be in an accident the leasing company takes the hit on the residual.

#79 dbg on 03.29.09 at 7:12 pm

#45 Willsdad

Yes….. if you count only your contact hours you might make $50 – $100 an hour.

But you are not giving a clear picture of Korea or Asia.
Koreans medical system is not that great. And drugs are only cheap if you are on medical.
As for glasses there cheap because they manufacture them there.
Vegetables and protein are expensive and if you asked any Korean they would give there left arm to move to Canada. Life is good for you as an expat but it’s not so great for joe average drinking Shochu and eating Kimchi everyday.
I’ve met many dudes like you in my 7 years in Asia. Life is good enjoy yours but don’t think your life is anything like the locals. It’s a grind everyday for them all through Asia.
Enjoy your tenure.

Cheers,

#80 Jake on 03.29.09 at 7:13 pm

#38 Char,
Great post. We are witnessing the birth of another religion. Don’t let anyone tell you that the debate on global warming (or climate change if that is the official title) is over. Now, I know Al Gore is an expert on all things science, but shouldn’t we at least question what he has to gain through all of this. Here is an article detailing John Coleman’s views on global warming. Now he does not have the credentials (experience in politics/corporate America/friend of Leonardo Dicaprio) nor the experience with weather that Gore has (does he have any?), but we should at least hear him out. Oh yeah, he is the founder of the Weather Network.

http://www.climatechangefraud.com/content/view/3345/218/

You can tell me to go back to the stone age now Garth.

#81 Jake on 03.29.09 at 7:18 pm

This may be a better link to that article

http://www.good.is/?p=14864

#82 Grumpydawgs on 03.29.09 at 7:23 pm

Why wouldn’t a Brit want to move to Canada, he gets 75% richer just converting his British Pounds to our Canadian Peso. This country is full of average shmucks who get to take advantage of our crappy exchange regime. Thanks ottawa for devaluing the Canadian Standard of Living.

One BP = $1.75 CDN , what a joke.

#83 dotava on 03.29.09 at 7:35 pm

#30 bobs your uncle on 03.29.09 at 9:51 am

What’s wrong with smaller heating/cooling bills?!?

#84 lgre on 03.29.09 at 8:08 pm

“After next summer, who in their right minds would buy a new house over 400k, especially in Toronto?”

a sucker is born every minute, that’s who.

#85 North Vancouver Citizen Jr. on 03.29.09 at 8:13 pm

There’s more folks

…..Those National strikes spreading across Europe will hit Ontario, sooner than later….so better get your own farm and cold storage bunker.

Strikes will never hit Vancouver, we’re different.

You heard it here second….after Garth of course.

#86 Irene on 03.29.09 at 9:09 pm

Sorry, I am not taking your advice. Its not very good advice; Do not vote Liberal in the next Provincial election. Trust no politician, they are all taxpayer defrauding scum.

The liberals took BC out of a bankrupt state by the NDP. I know, I ‘ve lived there for the past 40 years. The only part that made any sense is trust no polititian especially the current tories, They also took the mulroney Tories out of the deficit. Sounds to me like they are doing all right. It seems they know what to do to fix problems and yes it might mean making cuts but that’s what it takes in the end my friend. Paying more taxes with no solution isn’t the answer.

#87 . . . fried eggs and spam . . . on 03.29.09 at 9:55 pm

#79 Jake at 7:13 pm — “#38 Char, Great post.”

FWIW, check out the lack of sunspot activity and what is happening because of it. The earth is presently going through a cooling cycle.– http://tinyurl.com/6yqoy4 and http://tinyurl.com/yw5k76 and http://tinyurl.com/5cgp7e

The theory of GW / C is just that — a theory — which cannot be proven or disproven one way or the other.
——
#84 North Vancouver Citizen Jr. at 8:13 pm — “. . . strikes spreading across Europe will hit Ontario, sooner than later . . .”

Not only Ont. but will end up covering the continent, leading to sporadic violence, growing into riots as sheeple come to the realization that they have lost almost everything they worked for, so take the frustrations out on the govt., who then send in troops to quell the uprising.

A societal breakdown may happen. Is this what Flanagan, Harper and others had up their sleeve all along?

#88 Too Old Bob$ on 03.29.09 at 10:06 pm

Sorry Garth. This should have been located in “The destroyers” section. Not sure what happened.

“That ended the steady stream of the young and the stupid willing to sign anything to get a house”

Ha he he!! gotta love how you make a point. Did you use the word stupid to replace the “old” person here, or anyone else that the “young” doesn’t refer to. lol. Anyways, it doesn’t matter, I agree. Regardless, young, old, male, female, who cares. I can’t figure out why people thought (still think) a house is a must need investment. It’s like, I need one now and will do anything to get one. Geez! where’s the patience. Gimme, gimme now, I can’t wait.
Of course the Lenders and 0/40, 5/25, doesn’t help neither. These tatics just help put bait on the hook. Where’s that bait now. Oops! cost too much, must remove bait and just go back to hook. Dam! still too much, ok, remove hook too.

What ever happened to earning and saving, then eventually justifying your purchase. I guess those days are gone. Some of these young people and their purchases. What ever happened to their parents giving them advice on some of their actions. Oh wait! some of these same parents did the same, if not worse. So much for the teachings of the young.

Let me relate a story.
My Father in law. Semi retired Doctor. 43 years of service. Only works from computer now. Does online ECG’s, cause his brain is still very active.
Builds a brand new house. 1650 sq. ft. Upstairs, one bedroom, library room, kitchen, dining, living. Finishes basement for Office and 2 bedrooms(for family visits), hobby room. Beautiful back yard for gardening and little dogs to run around. No neighbour’s in the back yard. Open space looking over a old abandoned ski hill with lots of hiking, skiing paths. Blah blah. Very beautiful house, well setup. Reason, his retirement dream.

He says to me one day “Too Old Bob$, this is my retirement dream that I have wanted all my life”. 43 years of working, saving, scrimping, living low and living within their means. Paid cash. About $450000 at the time. First new house, all others were used. I looked at him and I could see it on his face. A very proud man. One last chance to treat himself to something nice before the ending. 4 beautiful daughters and 12 grand kids. Life has treated him well.

I looked around and noticed there were other houses beside his and around the cresent. More beautiful homes. Some were nicer and alot bigger. We went out to the front of the house and chatted a bit. I noticed the garage door open about 2 houses over. Out comes a BMW. Guy gets out to wash it. Here comes 2 kids. I’m guessing 5 and 11 years old. Here comes the wife, about 35 or so. I looked at their house and it was a hell of alot bigger and nicer looking than the Doc’s, but so what. I said to him, “Doc! this is your dream house, yet those two over there have the same if not more and look at their age”. I felt bad after I realised what I said. He looks at them, then at me, shrugs his shoulders and says” Lets go look at the Green House”.
This has been on my mind for about 5 years now and still bothers me. Actually it kinda pisses me off, but then really who cares.
Now the old Doc. has had a bit of a scare lately health wise. Needed a son in law (not me) to look over his estate. To put it simple, he could have spent a hell of alot more if he wanted, could have built that house and a few more with it, but still had that “old school” spend it wisely syndrome in him.
Yep! a proud man with a simple plan on how to live at the game of life.

#89 Jelly on 03.29.09 at 10:20 pm

WillsDad,

Where do you live?
How the hell are you only paying 0-4% tax?
I am about to pack up and move to wherever you
are living, this getting pillaged by the government
sucks, I hate giving the bastards all that money and
then they just increase our taxes and take away more services year after year.
It as if they just tell themselves, “Let’s just see how much they will allow us to screw them over before they yelp, oh wait, they are Canadian they can’t be bothered to make a stink if we screw them over”. (same goes for Americans, same apathy and feeling like we as individuals can’t make any changes)
I have a lot of respect for European countries like France, they have their shit together. Piss off the French farmers and they’ll shut down the roads across the whole country. I have to respect it, that is pure strength and very admirable.
Man, I am still dreaming about that 4% tax, total heaven…

#90 bobs your uncle on 03.29.09 at 10:33 pm

It is strange with one of the coldest winters seen in 40 years, snow storms in England, highways closed in California, -42 two weeks ago in southern Alberta, record sowfall in Vancouver, we still hear the Eurotards spouting off about global warming.

Next, they will say global warming causes global cooling!

Meds time! — Garth

#91 GrandePrairiegirl on 03.29.09 at 10:37 pm

#84 NVC Jr.
Not to worry. Civilian reserve units are being trained up for a whole new range of duties. Including “CIVILIAN CONTAINMENT AND SECURITY”.
Interesting phrase wouldn’t you say.
There will be regional units developed for the Atlantic,Quebec,Ontario and the West.
Read it here,

http://www.globalresearch.ca/index.php?context=va&aid=12644

#92 Jeremy on 03.29.09 at 11:16 pm

I am a troop of the government and i would never turn a gun on a canadian citizen for protesting the government (except maybe if my life was in danger) i’d rather put my gun down and walk away the govt can kiss my ass. I don’t work for the prime minister i work for the canadian tax payer

#93 TS on 03.29.09 at 11:28 pm

The average wage in Korea is approximately $2,830 US per month.

http://toshuo.com/2007/salary-stagnation-the-reason-taiwans-middle-class-suffers/

As far as personal income taxes go in South Korea….the truth is that they are very high…

“Personal income tax rates may range anywhere from 8% to 35%. There is also an overall state income tax rate of 10% for all wage earners and the local government has the power to adjust the tax rate down to 5% and up to 15%. Although personal income tax rates in Korea are high, corporate tax rates are relatively low. (These numbers were collected in 2007 and are subject to change). ”

http://www.justlanded.com/english/South-Korea/South-Korea-Guide/Jobs/Taxation-of-your-income

Based on the information I found on the web, the posting “#10 WillsDad on 03.29.09 at 2:49 am” does not appear to be factually correct.

Personal income taxes in South Korea are actually very high. Perhaps the poster is getting some special tax exemption as an English teacher, but this does not look like it applies to regular wage earners in South Korea.

#94 TS on 03.29.09 at 11:31 pm

bobs your uncle on 03.29.09 at 10:33 pm

Your posting would seem to indicate a misunderstanding about the impacts of global warming. Scientists have long stated that the major impact of overall global warming will be climate change with many hot, dry areas becoming even more so, and wet areas becoming even wetter. The frequency and severity of storms is also increasing. No scientist has ever stated that the effect of overall global warming will be an increase in temperature in every region of the globe.

#95 TS on 03.29.09 at 11:33 pm

#88 Jelly on 03.29.09 at 10:20 pm

Don’t go running off to South Korea Jelly! The posting was factually incorrect. Personal income tax rates in South Korea are actually very high ranging from 8% to 35% with an additional 10% state tax.

#96 TS on 03.29.09 at 11:47 pm

Some insight on the quality of universal health care in South Korea….

“Using OECD Health Data 2005, we evaluated the performance of the healthcare system of the 30 industrialized countries. The evaluation focused on three dimensions that have remained central to healthcare debates internationally for years: access, cost and outcomes. Although South Korea has successfully implemented its universal health insurance scheme in a very short period of time and possesses highly advanced medical technologies, we found that South Koreans incurred more out-of-pocket expenditures on healthcare. Health outcomes were of relatively low quality compared with those of other OECD countries, but compared relatively well with the four countries (Greece, New Zealand, Portugal and Spain) with similar per capita gross domestic product (GDP).”

http://www.longwoods.com/product.php?productid=18882&cat=527&page=1

Again….the posting claiming excellent health care in South Korea does not appear to be factually correct.

For those of you who would like to learn more about South Korea’s implementation of universal health care this link takes you to a South Korean university paper
on the subject (some bias in it perhaps, but none-the-less interesting).

http://www.appam.org/conferences/international/singapore2009/sessions/downloads/1091.doc

Here is a PowerPoint presentation from the University of Toronto on the subject….

http://www.utoronto.ca/ai/canada-korea/papers/BongMinYang.H-Policy0501.ppt#381,29,Health-Industry Policy

User fees are high at 44%, so people in South Korea pay quite a bit ‘out of pocket’ for coverage.

Again, the posting by WillsDad seems to be factually incorrect and based on opinion, not fact.

#97 Iam on 03.30.09 at 12:19 am

Green Audits?…. yep!! right up there with Emission testing. Just how deep do these Chuckle heads think our pockets are, those of us who still have jobs?

#98 Jboy on 03.30.09 at 1:32 am

North Vancouver Citizen Jr. has got to be the biggest troll (or Van. Real Estate Agent) on here. Never a strike in Vancouver? Gimme a break! Who can forget the long Vancouver municipal strike of 2007???

#99 Tony on 03.30.09 at 2:33 am

With stupid moves like this from the government Ontario will stay mired in recession for the next millennium. While the rest of the world tries to rescue the housing industry Ontario, Canada seeks to destroy it.

#100 Future Expatriate on 03.30.09 at 4:58 am

#89- Could you be any more ignorant? The arctic ice cap melting has been causing corkscrewing jetstreams for decades now, causing unusual hotter than normal weather when the jetstream is coming up from the south and much cooler than normal weather when coming down from due north. The jetstream usually circulates around a “continent” of permanent ice at the north pole. When that continent no longer exists, you’re going to get nutty weather via corkscrewing (or, if you prefer, sidewinding) jetstreams.

Add to that the extra and warmer melt water in the oceans making for more violent storms.

The correct term is climate change; and it is very real, whatever the cause. Scientists have already determined that the end result of warming is an ice age as the planets’ feedback mechanism overcorrects. Certainly a “little” ice age in Europe as Greenland icemelt changes and even ends the warm Atlantic current that makes Europe warmer than it would be otherwise.

Wake up. Read something other than crapola written by Big Oil. Think.

#101 Herb on 03.30.09 at 7:23 am

#59 conan on 03.29.09 at 3:20 pm

There is a large sub-division still being built west of Ottawa by one of Canada’s largest builders. The squeeze is on contractors and sub-contractors to reduce their price per sq ft to keep working, and they are being forced to accommodate changes and undo design errors at no cost.

There are around 70 crews working on the site. Most of them speak Spanish.

#102 Third Chimp on 03.30.09 at 8:17 am

The ignorance of science on display here is almost complete. You didn’t know the theories of solid state physics are not perfected yet did you ? So obviously it can’t be producing useful results. Please immediately stop using all electronics made since 1960, since there is continuing debate about precisely how it works. Every day, your life depends on numerous scientific theories that are not perfect, but good enough to make computers, medicines and energy systems. But if the same scientific thinking predicts (with overwhelming agreement) drastic climate changes if we keep spewing long-buried carbon into the atmosphere – suddenly we lose “faith”. Believe only the answers that are convenient – nice strategy ! I am becoming pessimistic that modern technology is in any way sustainable because most people have no friggin idea why it works (not the devices – the process !)
Are humans smarter than yeast ? Well, the petri dish is looking kinda scummy lately, wouldn’t you say ? Not too many areas left that those yeasts haven’t covered with their own kind …. I wonder what happens after the yeast have run out of growth medium ?

#103 bobs your uncle on 03.30.09 at 10:32 am

#99 Expat, Yes, I knew someone would say global cooling is a result of global warming. Thanks for proving my point.

#104 Future Expatriate on 03.30.09 at 6:25 pm

#102- And thanks for proving it’s not possible for any human being to be more ignorant than you are.

Or a Big Oil whore, in that case it would make you not merely ignorant but devoid of morality as well.

#105 monika auger on 03.31.09 at 6:29 am

dear Garth, love your book, and enjoy your writing, I have a question for you, its 345am in Vancouver and I’m trying to decide if I should take a buyout, I work for Air Canada 51yrs old I’d get a early pension taking higher amount 2100$ and buyout 1333$ a month for 3 yrs still kind of enjoy the job (on a work share for a year) or wait to see what will happen with the new contract this one ends June/09.When I read about the auto buyouts makes me wonder ? Thank you for your great insight and taking the time to inform and educate us across the board. Monika

You company is going down – look at the overnight news. Get out. — Garth

#106 bobs your uncle on 03.31.09 at 8:27 am

# 103 Expat,

Why do you call yourself expat? Worried about being deported? Have you noticed it is getting warmer in north america the last few weeks?

Proof of global warming I guess. Most people call it spring in BC.

#107 Future Expatriate on 03.31.09 at 3:58 pm

#105- Uh, no. Full name is FUTURE Expatriate TO Canada FROM Amerika.

Despite all my best efforts, no qualifications to be deported from the US yet, most unfortunately.

#108 Sandatola on 04.01.09 at 12:10 pm

#32 DJB – very well-written post.

And here I thought that Garth recognized climate change as a legitimate threat, socially and economically. Yet on this post, entitled “The Destroyers”, he says the Green Audit tells you what you already know. When I had the eco-energy audit done on my house, I learned that the air leaks in my century home added up to a 1.78 square foot hole to the outdoors (not uncommon in older homes). I got an itemized list of the nooks and crannies where the leaks were the worst, and have since patched them up for a few bucks. The guy who performed the audit was as knowledgeable as any tradesperson I’ve had out to the house.

The end result? Lower CO2 emissions from heating the outdoors needlessly, and the cost of the audit quickly recouped in heating and cooling savings along with some govermnent rebates. Who loses under this mandatory scheme? Homeowners who don’t make minimal incremental investments to shore up the efficiency of their homes during the time they own it. I might add that government grants more than offset the taxes you pay on any investment in new windows, furnace, insulation, etc.

It’s ironic that in the same post that Garth talks about electricians sitting home idle, he fails to mention the enormous opportunity those same tradespeople have to fill the void that will exist for auditors when the Green Audits are signed into law. They’d be perfect for it! Instead he derides home energy auditors as “guy(s) in a yellow hardhat and cheap plastic safety glasses…(who) will write down what you already know, and what a decent home inspector would tell a buyer.” Funny, of the two guys I’ve met who do this work, one was a former mechanical engineer, and the other, a building inspector. Expertise worth paying for, IMO.

On the HST and the LTT, I agree with Garth that they are wealth-destroyers for real estate.