Good news, kids. No summer election. Jim Flaherty has a plan to pay down the $50 billion deficit (hold on to your wallets). And Re/Max says people are snorfling up million-dollar homes in T.O. like it’s 2007.

Almost enough to make you forget about our lost manufacturing sector, jobless engineers, bankrupt car companies, the Air Canada bailout, collective denial and, oh yeah, the pandemic. And did I mention record household debt, disintegrating boomers and peak oil? Whatever. Pass the buffalo chips.

Of course, this blog is all about me (as in, ‘you’), and our endless orgiastic relationship with real estate. So, let’s whisk off to the city where the pelicans go to die:

Hi Garth.  I’m sure you get tons of questions each week and here is my attempt at sticking my head in the lion’s mouth…

My husband and I are in our early 30s and for various reasons are not at the level of “financial security” as most others our age.  After waiting six years for a permanent teaching contract in Saskatoon, this is the first year we’ve had the security of full-time employment for him.  I work in the Administrative field and combined, we earn $98K/yr.  We have no kids.

We chose not to get into the real estate market a few years ago b/c we wanted to focus on paying off our Student Loans which we managed to do last April (four years early by the way).  We have no consumer debt (paid that off, too) or loans; have about $30K in RRSPs and $25K in the bank ($10K in a TFSA and $15K in cash).

As a result of choosing to pay off debt rather than obtain a mortgage, we have missed out on decent priced housing.  Saskatoon’s real estate doubled in 2007 and kept on climbing in 2008.  Currently, the average home is going for $280K and quite frankly, it doesn’t buy you very much.  We rent a 2BD for $875 and our other bills related to housing costs are less than $200.  A mortgage could easily be running us $1200+ not counting all the other costs of owning a home.

We are saving $25K per year for a downpayment, but when we will actually purchase, I don’t know.  It doesn’t “feel” right.  Not owning our own home has made us feel like “second class” citizens, but we refuse to not enjoy life just so we can say we live in a house.

I have a couple questions – what is your feeling about the Saskatoon housing market specifically?  Do you think we should keep renting until we can darn near pay cash for the house (8-12 yrs)?  What are some other options you see us taking advantage of so we are smart with our financial future?

Thanks for considering a reply. Sue.

Second class citizens? Are you serious? You’re watching w-a-y too much HGTV and reading too damn many Open House classifieds in the Star-Phoenix. Real estate can be a trap and a financial  sinkhole, just as easily as it can augment your wealth – like any other investment asset. If you buy high and sell low, it’s a disaster. If you buy higher and sell higher, you win – but only if you find a greater fool. Like a nice couple of thirtysomethings willing to dump all their savings, assume a massive debt and increase their monthly living costs – so they can join the herd and feel fulfilled.

Please. Gimme a break. There are lots of valid reasons for buying a house, but citizenship ain’t one of them. You buy to stabilize your housing costs, to build up equity over time and realize a capital gain, as a forced savings vehicle, as a convenient place to have a basement grow op or  maybe to raise a family. Buying for social status, or because all your friends are doing it, sucks.

Now, to Saskatoon. Yes, the market there played dramatic catch-up over the last couple of years, going from underpriced to overpriced. There was much talk of an oil boom, a potash boom, a biofuels boom and even a population boom (it wouldn’t take much), which pushed prices higher – unsustainably. The inescapable reality is a province with barely a million people cannot sustain a continuously rising market in the absence of surging commodity prices and rising family incomes.

Let’s also consider the weather. The current drought and withered crops could well presage the almost-immediate future, in which a changing climate brings desertification. This is a substantial threat hanging over much of western Canada, just as it is helping to forever destroy real estate in places like Phoenix. Something a couple in their 30s would want to dwell on, I’d say.

Anyway, should you buy? Sure, if you want no cash reserve and less disposable income. If you want to impress your friends and prove you’re not defective. If you can handle mortgage payments which will likely double when you renew in five years. If you think real estate values in the city will escalate, even though childless couples making twice the average income have  trouble buying. If you feel dumb saving $25,000 a year when your home-owning friends are eating KD. If you feel good about buying an asset at its highest point.

Then go ahead, by all means. Just stop writing me.


#1 kc on 06.16.09 at 11:04 pm

Hi Garth, did that package get to you? I sent it off long ago. thanks

Yes, thank you. Most interesting and I appreciate the info. — Garth

#2 bigpictureguy on 06.16.09 at 11:05 pm

Holy crapola the stupid questions just keep on pouring in! Are people daff?

Garth just tell them to BUY!!!! and make them feel better!

#3 Nostradamus Jr's Analyst on 06.16.09 at 11:15 pm

These “Dear Garth” letters are freaking hilarious.

When did you become a financial adviser to the huddled masses?

#4 Lance on 06.16.09 at 11:31 pm

Gosh, in a place like Saskatoon, buying a house for $300k is akin to burning your money. Do you honestly expect much of a price increase from a lofty price like that? Hardly! Resource-based economy, here today, gone tomorrow… forgettable winters (brrr!)… there are a whole lot of reasons for prices to come tumbling down and not many to keep them where they are let alone start to rise.

Definitely save your money, keep renting and in 3-5 years you’ll be so glad you did as friends and neighbours lament the tens of thousands in equity that has vanished as quickly as it arrived.

#5 hobbygirl on 06.16.09 at 11:51 pm

Garth, I would like to see your thoughts on other areas of Canada as well. RE has been very affordable here in Thunder Bay for a dozen years since the collapse of forestry industry. Are there problems with buying here, Now? We wouldn’t need financing by the way either.

For example 300G gets you a big newer McMansion on a good chunk of land which is way more than what we need or are looking for. Avg home price here hovers around 150.

You mentioned desertification in the prairies which makes our location at the head of the great lakes a great spot for future generations (global warming would give us a Floridian climate with the world’s largest body of fresh water – the most valuable of resources). The fact we are so isolated is a big plus protecting us from big city social problems. We have family in major centres from coast to coast and I wouldn’t wish to live in any of them from the stories they tell about costs of living to crime and everything in between. We are not all hunters with bushjackets, snowmobiles, trucks and big dogs by the way. Culture is where you look for it.

#6 squidly77 on 06.17.09 at 12:03 am

a very very small percentage of the people have participated in the housing bubble

in the case of calgary probably about 4% of calgarians joined in the crime fest

calgarys has had about 90,000 used home sales and about 45,000 new home sales over the past 4 years

4% of the calgarys population is about 45,000 people
if they each bought and sold only 1 home that would equal 2 transactions per sale or 90,000 sales (1 when they sell and 1 when they re-buy)

of course many of them bought and sold multiple homes

can 4% of the population trash the real estate market ?
absolutely they can

these greedy free loading fools have been dancing on the heads of hard working canadians and the government is allowing them to continue to….for now…. but hopefully not much longer

the longer the pestilence is allowed the thrive the deeper the recession will be

#7 squidly77 on 06.17.09 at 12:16 am

realtors do what realtors do
they can not help themselves as they are realtors

Halfway across the river, the frog suddenly felt a sharp sting in his back and, out of the corner of his eye, saw the scorpion remove his stinger from the frog’s back. A deadening numbness began to creep into his limbs.

“You fool!” croaked the frog, “Now we shall both die! Why on earth did you do that?”

The scorpion shrugged, and did a little jig on the drownings frog’s back.

“I could not help myself. It is my nature.”

Then they both sank into the muddy waters of the swiftly flowing river.

Self destruction – “Its my Nature”, said the Scorpion…

its like saying….why is winter cold

#8 rory on 06.17.09 at 12:21 am

GT you said: “as a convenient place to have a basement grow op or maybe to raise a family”

A little disappointed about the grow op mention even if in jest…kinda takes away the whole message …one does not need to mention it to be cool …also a sad commentary on our lives …cannot wait for my Doctor to be buzzed and operating…later.

#9 westcan on 06.17.09 at 12:38 am

Couldn’t agree with you more, Garth. I’m from Saskatchewan originally but presently live in Edmonton. I’ve got the opportunity to move back there with work and I’d really like to for family reasons but real estate is crazy there. Sadly, people there still have their heads in a bottle of saskaboom ether. This has been the province’s first boom cycle ever and therefore don’t realize when it’s actually over. Housing is overvalued and rentals are borderline obscene. There will be more than just a few caught with unmanageable mortgage payments…or 2 payments a month for the speculaters who are holding out for big money. Many want to “cash in” on the boom but they don’t realize that…..and I don’t mean any disrespect because I’m proud to be from there….that Saskatchewan is a great place to be from but not really the first choice for a place to move to….and no matter how hard you try to explain that, they will never understand that until they have lived somewhere else for awhile

#10 squidly77 on 06.17.09 at 12:53 am

a 5.5% interest rate on an average priced canadian home @ $306,000 generates about $16,830 a year in interest rates payable to the banks

a 13.5% interest rate on what was the averaged priced canadian home (7 yrs ago) @ $125,000 generates about $16,875 a year payable to the banks

can you see who the brunt of the joke is now ?

when rates rise and they will are you prepared ?
$306,000 mortgaged @ 12.5% = $38,250 payable yearly to canadian banks or $3,187 monthly

still want and lust to pay more for housing
better buy now and be priced in until foreclosure

and then have your credit destroyed when cheap housing is abundant….go ahead buy now

many greaterfools are !!

#11 . . . fried eggs and spam . . . on 06.17.09 at 1:02 am

“It doesn’t “feel” right.” — If it doesn’t feel right, then it isn’t.

Listen to one’s gut feelings, as they ARE right, whereas others’ thoughts, opinions, viewpoints, etc., go in one ear and straight out the other.

Wait until after the Olympics, then the market should have cratered. Rent = save. Buy = lose and be sheeple to boot.

If I was faced with your choice, it would be a no-brainer, especially if I had a good-paying job and tucking lolly away into a nice nest-egg.
Taking the opposite view of Garth’s (I figure it may happen too) —

Today’s cartoon — Commercial Real Estate will follow the entire way — — In the US, high-end homes are expected to lose 60% of their value.

As not many sheeple can afford them anyway, this figure may be generous!

De-dollarization is a very big word, which I don’t fully comprehend. Nevertheless, part of this is quite curious (follows). —

“. . . of the six-nation Shanghai Cooperation Organization (SCO). The alliance is comprised of Russia, China, Kazakhstan, Tajikistan, Kyrghyzstan and Uzbekistan, with observer status for Iran, India, Pakistan and Mongolia. It will be joined on Tuesday by Brazil for trade discussions among the BRIC nations (Brazil, Russia, India and China).”

Hmmm. China. The link I posted recently re: Nostradamus’ prophecies of WW3 between 2009 – 2012 didn’t specifically mention nukes. Hence —

No grocery stores / chains left in Detroit? Duzzent sound like a smart place to invest in! —

Merkel says no more borrowing before 2016, and only in normal times. Define ‘normal’! —

#12 squidly77 on 06.17.09 at 1:03 am

whoops forgot the link..

#13 Cody on 06.17.09 at 1:16 am

I often wonder why people are so willing to throw away a comfortable lifestyle. I suppose a personal sense of status through material wealth is a type of luxury, but I imagine it gets old fast… and then you can’t afford any other luxuries.

Tied to the television because that’s all you can afford, but it’s more entertaining than what there is to look at outside in Saskatoon.


#14 Mike (Authentic) on 06.17.09 at 1:36 am

Saskatchewan (what a weird name when typed out), IMO was the last place to boom and IMO was the money from Alberta going over to “speculate” after some missed out on the Alberta boom. Think of it as a water ripple effect.

Saskatchewan is indeed beautiful, the Prarie skies, farm fields and sunsets are magnificent. But it’s not a rich provience for making money, thus, house prices (pre 2006) are what they should be, undervalued vs the rest of the country because of the incomes there, not because houses sell for more in another prov.

I’d also like to say, WELL DONE for paying off your debts early and saving cash. Be patient, you are doing the right things and will be rewarded soon when the market again continues it fall in a month or two.

Then you won’t be second-citizens for not buying, but “smart home buyers” for waiting.


#15 BigAl (original) on 06.17.09 at 2:14 am

There is another aspect to the “disintegrating boomer” phenomena. Across the bedroom communities of the country – from Oakville, ON to Burnaby, BC to the established neighbourhoods of Calgary, to the Tuxedo area of Winnipeg, to Nepean and Kanata – in these areas tens or hundreds of thousands of boomers’ kids are about to inherit their parents’ homes and other investments over the next 10-15 years. A unique time in history, the generation that paid off their homes and have some investment are about to pass that down to their kids.

I see evidence of this amongst my friends and acquaintances. One friend needed $40K to buy equipment to start a landscaping company – he had no education, and quit almost every job he had, and no bank would touch him because of his credit rating. So, instead of having to work hard and save, his parents gave him the money, and now, 4 years later, he’s extremely well off – huge home, huge vehicles. Still gets into trouble with mortgage payments and loan payments and parents still bail him and his wife out every time.

Another fellow, no education, tried the military for 3 months – quit, tried other jobs – quit them quick, now has a job as a gov’t clerk, living extremely well in Mississauga – owns a big home, wife doesn’t work. Why? Her dad bought the place for them, so they only pay the utilities and taxes. When her parents pass, and his, they’ll get another few hundred grand in inheritance from the parents’ properties.

Another fellow, in London, ON could never hold down a job, community college dropout, so his dad uses him as a secretary of sorts. He gets to work out of his own home and faxes things back and forth to his dad. Again, no education, can’t work with others, but his dad is worth a lot and, of course, when his parents pass, he gets a third of his dad’s wealth (well over $1 Mil plus a house worth $500K).

These are just a few examples of a widespread phenomenon.

What we have existing and coming up is a society of a lot of people who have a lot of money, but who never had to do much to get it – have had to show no creativity, business acumen, ingenuity, competetiveness, or sweat. And, I think, this has been going on for the last 10 years or so, and has been fueling the extreme consumerism and bubbles we have been seeing. Sure there will still be lots of people like me who don’t have these family supports and inheritances to rely on, but that segment of society that do have these is significantly impacting the economy.

Sure I understand that their parents worked hard to give their kids a better life. But I would expect the parents to demand a bit more out of their kids for that better life. But that is not happening. It’s bailouts for bad performance at the micro family level.

I live in a one-bdrm basement apartment while saving some more for a down payment. It’s part of a nice house in a nice area of the GTA. The 4-bdrm upper 2 levels are rented for about $1600/mo plus all utilities to a single girl who finished university about a year ago. She’s got a very nice car. She doesn’t work. Her parents pay for the whole thing while she takes ‘some time’, at least a year she says, to decide what to do with her life. The parents live only a few blocks away. She says moving out of the house was the best decision she ever made. Sometimes I hear her mom yelling at her on her visits about her high Visa bill, and about getting a job. Oh….she did have a job, but was fired for some reason after 2 days. Doesn’t seem like a priority to her now.

There’s millions of people like this in the country, alongside those who aren’t doing so well. So why would the bubble’s end?

#16 Da HK Kid on 06.17.09 at 2:29 am

Ah, a couple who wish to avoid the perfect storm.

You are at this stage flying first class.

Affordable housing will be back in the next few years so sit on the fence for another 18-24 months and get another $50K in that account so when these homes shed 15-20% nominally and another 10% at negotiations as everyone needs to bail when no equity is left in these bubble centric homes — just swoop on in from the 1st class section and pay 50% down and $875/m mortgage.

Remember, when interest rates rise, and they will, the price of homes come down — via inflation!

Take that $280K home, watch it tank to $225K then maybe down to below $200K (inflation) and pay it off in 3 years.

Then watch the second classes eat it!

For the regulars, here’s a classic 1951 Merry Melodies cartoon in full length – The Gambling Bug!

Thought it fitting to Garth’s new post!

The Dog could be any of the manipulators out there today and the cat, Joe/Jane Q Bubble Inflator!

#17 The Tallyman on 06.17.09 at 3:15 am

Dear Sue

Is a ticket for a ride on the Titanic really the yardstick you measure your worth by?

Good thing you got no kids, just think of the pressure you’d be piling on them.
Success by six or we drop you off in the sticks
Success by three or it’s back up in the tree with thee.

Pull the plug , deprogram yourself and if you really want to be patriotic by me a house too (a glass one)

#18 Nostradamus jr. on 06.17.09 at 5:02 am


Real Estate Rule #101

…Prices will remain relatively stable as long as Mortgage rates stay below 6% threshold.


Location, Location, Location

Toronto & Vancouver are safe compared to the Hinterlands and smaller towns.

Citizens congregate there for perceived Economy, Jobs and culture.

…Ontario is headed to become another Welfare Province, an overpopulated w/ a non competitive manufacturing economy, joining Quebec and the Atlantic Provinces.

Saskatoon, Regina, Calgary & E town are commodity centres and will remain boom and bust cities.

…But equal or better cities when compared to any local in Ontario.

Vancouver continues to attract Asian elite and wealthy.

Compared to major overpopulated and smog infested Asian cities, Vancouver is both a shangrila w/ridiculously in expensive RE prices.

BC hinterland is just that, essentially retirement & leisure habitats, but not attractive to these same Asians.

Asians are into making money…hence Vancouver is the Gateway, Funnel, in and out between North America and Asia and a future cultural boom centre as well.

…You hear it all first on this blog…

#19 David Bakody on 06.17.09 at 5:15 am

Hey Sue ….. sit back and enjoy life, if a child comes then look around for what you can afford and what you want for your child (s) fine schools good neighbourhood and a cloths line ….. hello perhaps you may even want to seek out your profession in another province or country …… enjoy the life …… it’s just that simple. and stay out of the candy store!

#20 Future Expatriate on 06.17.09 at 6:45 am

#3“These ‘Dear Garth’ letters are freaking hilarious.

When did you become a financial adviser to the huddled masses?”

Geez Garth, they sure are pooping their pants in terror over you, aren’t they?

You always know you’re on the right track when they get desperate enough to quit ignoring you and start flooding you with desperate shills.

#21 lgre on 06.17.09 at 7:35 am

“when your home-owning friends are eating KD”

This phenomanon is all around me, sad in fact as some even have kids, living pay cheque to pay cheque to own, one friend pays 3 times for ownership then what he was paying for he is out of a job..owned just under 2 years..short term buyers.

#22 prairiegopher on 06.17.09 at 8:04 am

#9 westcan

My wife and I are looking moving to the Edmonton this fall. What is the market like there? Are we better to buy right in Edmonton or somewhere like Leduc, Sherwood Park or ??. Thanks for your thoughts.

#23 Da HK Kid on 06.17.09 at 8:16 am

S&P 878 get ready if this resistance is broken!

#24 Kris on 06.17.09 at 8:33 am

Just got back from a superb weekend trip in SK to visit my family – if you’ve never visited the prairies, you’ll never realize how huge the sky is. My dad has finally dumped almost all of his real estate holdings – after sitting on the market for six months with no offers, last week he had two offers on his recreational property on Vancouver Island and two offers on his house in Saskatoon and he sold them both. Now he has loads of cash in the bank, still owns a primary residence in downtown Saskaton and spends the summers at his cottage in south-eastern SK where it costs about a hundred bucks a week to live.

Way to go pops! He’s a boomer who gets it.

#25 BoB on 06.17.09 at 8:34 am

Here comes that run away inflation that’s going to make rates skyrocket:

Though prices rose slightly in May, annually, they posted their largest decline in almost 60 years

Actually “skyrocketing” rates are a damper on “runaway” inflation. Both will not occur again simultaneously in this generation. — Garth

#26 pjwlk on 06.17.09 at 8:48 am

“Not owning our own home has made us feel like “second class” citizens”

I myself had this very feeling just yesterday when a co-worker asked me where I am living now. It seems that it’s really the judgment of the house-owning sheeple that make us feel this way and not really the fact that we don’t own a house.

Sue, your letter made me ponder the reasons and the validity of those feelings once again and also made me realize the main reason I come here.

Garth et al, I’ve come to realize that a good part of why I come here is to seek help from you and other like-minded people in warding off the “you need to own” demons that always seem to be lurking in the background. It’s truly amazing how deeply entrenched the “need to own” syndrome really is in most of us.

I’ve enjoyed reading the posts of a great number of you here and I wish to thank you all, even the naysayers, for your continuing contribution to site.

#27 Arkaday on 06.17.09 at 9:56 am

The Saskatoon market has been trending down. Properties have been sitting for a long time.

For a good take on the Saskatoon market check out

Its an active blog with weekly stats. Run by a realtor with integrity (a rare commodity).

#28 Greg W., Oakville on 06.17.09 at 9:58 am

Hi Garth, re: Toronto energy usage on the news today, and carbon & toxic footprints of stuff.

My wife heard some reporter this morning taking about how much ‘energy conservation’ has lowered Toronto’s electrical energy usage this year. The reporter spoke with Ontario Hydro to get the total electrical usage numbers and some guy that worked in Home-depot about the people looking to buy more energy efficient appliances.

Does this reporter do much thinking on his own, or is his job to make people feel good about reducing their personal energy use?

I’m sure there was ‘some’ electrical reduction from a thoughtful effort to save, by changing lights bulbs to CFC’s and buying less energy intensive appliances, etch.

But my guess is the largest reduction in electricity usage so far is because it hasn’t been very HOT outside yet! No need for fans and air conditioners.
And don’t forget about all the slow, closed and moved off shore industrial plants. They once used very large amounts of electrical power to make the stuff we all use and employed people here!

I wonder what the difference is between the carbon footprints of stuff made here verses offshore are? For example China uses lots of coal burning power plants to make the electricity used to make the stuff we all buy. And what is the added carbon footprint from shipping stuff large distances? And don’t forget the differences in air pollution and toxic waste controls.

Is the global web we have weaved for ourselves going to come back and bit our kids and us in a real and brutal way, and sooner than you might think?

One more thought;
What kind of carbon footprint does all the worlds’ armies and weapons production produce each year? Who is benefiting short term, and what is the real costs long term for humanity?

#29 Eduardo on 06.17.09 at 10:22 am

dd see my replies in part deux if you care.

#30 Dr. Doom on 06.17.09 at 10:43 am

I am a Saskatonian. Our real estate inflated by 150%+ over the course of 1.5 years (late 06-08). If you look at the current statistics, the prices haven’t dropped, and the sales are strong.

It is absolutely mind blowing. We are on the tail-end of the bubble wave here, but no one realizes it. Most people figure after a few months of recession, we will be right back into prosperous times. Funny, considering SK has suffered decades of a flat economy – which I have personally lived through. I even had to go to AB to get my first professional job.

My employer just laid off two professionals, and has indicated it has no intention of hiring anyone else. There is talk of salary freezes.

Not being a greater fool myself, I saved my money and rented. I figured I might pick something up in winter 09 – but that is not looking promising now. Maybe 2010.

#31 Jam on 06.17.09 at 10:53 am


I just got a variable rate since you advised it is a money saver as you just lock in when rates go up.
Do you think it is likely variable will go up soon since longer term rates just jumped?
I am so suprised that rates went up so soon, do you see them going back down?
Could Bonds effect interest rates independently from the government wanting rates to be low because of the economy?
I am regretting doing this as I was going to go Fixed.

#32 Nathan in Edmonton on 06.17.09 at 11:15 am

Sounds like Sue and her husband have done everything right; money in the banks and debts paid off; unforturaly they missed a great buying window. It’s a shame to think others their age that did everything wrong, except buy six-years ago, could sell, pay off all debt, and still come out ahead of them.

#33 Nostradamus jr. on 06.17.09 at 11:20 am


>>I agree that Vancouver is the stupidest market in the world.<<

…Toronto is priced equal to or higher than Vancouver.

Now that is real stupidity.

…lol, you are in trouble Eduardo if you listen to dd.

Bless him, dd is a nice guy and a hard worker… that is if you are attracted to heavily medicated, multiple personality types. He hangs out at the downtown Vancouver Library because it makes him feel like a Roman Gladiator…He told me so btw…Other times you can find him at various busy nearby intersections cleaning car windows.

“There but for the grace of g-d go I”.

#34 Kelly McMae on 06.17.09 at 11:23 am

96K a year and second class citizens? not at all. you’re free, enslaved to no-one. other than perhaps latent programming lingering in the back of your mind.

stay mobile, it’ll come in handy.

#35 My_View on 06.17.09 at 11:24 am

I sort of agree, however you can save all the money in the world but there in no $ luggage rack on top of the coffin. I know rates will be going up, but no one can predict what the rates will be in 5 years. For me if I had bought 8 years ago instead of renting my mortgage would have been 80% paid off by now. And the discounted variable would have been really nice, oh well. But of course only go in the hole if your mortgage is 25 years or less (mine 10, maybe 15 years tops) and you have at least a year supply of funds.

#36 Mike (Authentic) on 06.17.09 at 11:31 am

#18 Nostradamus jr. “Vancouver, blah, blah, boom, boom, we’re different”

Step right up folks, pick a winner, a winner everytime!

No winner this time?

You pay your money your takes your chances…!

Who wants to live in the City of Rain? 260+ days of rain a year, grey cloudy skies, heavy fog, dank nights, chilly winters, dirty streets, drugs, gangs… depressing.

I don’t know why Asians buy there, must be the same climate in Hong Kong.


#37 Missed the Boat in Wpg on 06.17.09 at 11:43 am

“He who hesitates is lost”

I see where she is coming from. I stayed out of the market because I thought houses were overpriced, expecting it to come down. Now, my friends who bought a year ago have $70,000+ equity in their house. Of course they complain about not having any money to do anything but hey, neither do I because I put all my money into investments and savings. Who is better off? Sooner or later I will need to put the saving and investments into a downpayment.
I sometimes wish I could turn off the “responsible” part of my brain. The greater fools in Wpg are not the fools after all.

#38 Calgary_rip_off on 06.17.09 at 11:55 am

Hi Garth.

Its funny that two people make a little bit more than one person makes. I make $90K a year working in Health Care. My job is great. My wife will start working next year(no point in her working now-child care).

Anyway, she fears being priced out forever in Calgary. She loses sleep over this. I dont. I figure Im doomed to no retirement if I buy into this bubble. Unlike the 3rd class citizens that own in bubble conditions, Im a first class citizen that happens to rent. I rent a $450K house for market value and get more house than I would buying.

Unless interest rates skyrocket, Calgary is done in my book, Id rather rent forever than augment the slime that have created this mess. I figure Ill work until the day I die.

#39 D from London, ON on 06.17.09 at 12:24 pm

#23 – Da HK Kid

I’ve seen you say before that if the S&P cracks 878 we are in for a sharp ride down in the markets. Why do you say that? Could you please give a little explanation for the slow kids in the back of the class, like me?

(Sorry if you did in a previous post, if you did I missed it).


#40 Tom Jeffries on 06.17.09 at 12:30 pm

There is no nobility in owning your own home. We have been sold the bill of goods that you ‘ain’t nobody ’til you have a mortgage’.


This is the same bushwah that told the ‘great unwashed’ that having an SUV to go and pick up groceries was an intelligent use of your AFTER TAX DOLLARS.

Every buck you get in your jeans is really $1.50 – because of the penurious taxes in Canada. It isn’t just a dollar.

The swiftly running currents in today’s economy make it really dicey to bet that you will be able to sell your manse, if and when you want to, for the price you want.
People are really skittish right now.

Take a deep breath and consider yourself smart to SAVE, be debt free and when something blows up – call the landlord.

#41 Vancouver_bear on 06.17.09 at 12:36 pm

#18 Nostradamus jr. on 06.17.09 at 5:02 am

Can you talk about anything else rather than telling us about wealthy fine china dolls coming to town? We heard it from you a million times. We all know that Vancouver RE will be saved by wealthy asians, hockey players, lawyers, doctors (add others to the list for your liking). Why they don’t go to Seattle, WA? How is it different from Vancouver?
Actually they would save themselves a fortune as there are tons of foreclosed homes at 1/3 of Vancouver RE price? Are they all stupid? BTW I see that port of Seattle will be a big gateway for imported/exported goods as taxes and fees are hell lower than in Vancouver port. I do not even remember when was the last time I flew from YVR anywhere….Seatac way better and cheaper even if take into account parking costs and driving there, so Vancouver will become next ecnomic burden for Canada few years down the road when the level of foreclosures will be at record highs.

#42 Lawrence on 06.17.09 at 12:38 pm


The issue is risk aversion and there are times to be wary and cautious for sure. But when you have reasonably secure jobs and you plan to eventually retire, the best investment over a period of 25-35 years is a house.

It is a forced savings plan, it grows tax free equity, and it allows you the resources to establish a retirement plan with many more options. You may even decide to sell your property and rent a smaller unit that fits your needs in retirement.

Real estate has cycles and it is always better to pick an entry point when interest rates are low and prices are reasonable. Over-heated markets correct and we have seen real declines in prices over the past 24 months in Calgary, Edmonton, and Saskatoon.

Will prices continue to fall? Probably not in these markets. I tried to pick up a house in Calgary in early spring and was surprised at how quickly houses were selling. I will bide my time to pick an entry point that matches my particular “risk-reward” analysis.

We all make the same calculated decision. Is there risk in not acting? Of course? You run the risk of missing the opportunity to accumulate equity that will serve you well in retirement.

I operate subsidized seniors apartments in Calgary and I can assure you that 99% of our clientele were renters all of their lives. They didn’t accumulate a nest egg for their retirement because for them, the risk in buying a home was too great.

Does this mean they made the right call? No they did not because if you owned a home in Calgary over a period of 40 years, you would now have at least $300,000 in equity, which would go a long ways to insuring a remarkably more enjoyable retirement.

Given the losses in the stock market, bank failures, fraudulent investment brokers, etc etc. a house also represents “real” and tangible safe asset that is an essential need. You will spend money for a roof regardless so you may as well see if you can own the roof instead of rent it.

Thirty years? For real? — Garth

#43 Mike B formerly just Mike on 06.17.09 at 12:45 pm

Real Estate if looked upon like anything in life should be based on income not desires or investment potential because unlike investments which are analyzed based upon performance Real Estate values are based upon what the last idiot paid for a similar house in the hood. With over 30,000 realtors in Toronto it is easy to see how prices have gotten so insane. Until interest rates jump MUCH higher, say close to 10%, there will still be people buying . Builders as well are contributors to this mess. I seriously doubt if there will be a significant double digit correction here in Toronto in the near future UNLESS rates rise massively … very possible but knowing the BOC not likely… A Global crisis of some kind may also add to this. As long as money is cheap people will spend like drunken sailors.
Look at Warren Buffett… still in the same modest Oaklahoma house he has had for decades. Even the ultra wealthy know that the best way to make money is with money not with RE . However if you are in the pool looking for merely a home you are swimming with people who are more than eager to bid up on houses.
If I am correct, a bidding night approach is not even allowed in some countries around the world. We are such chumps here in Canada.

#44 confused and a little crazed on 06.17.09 at 12:47 pm

37 # missed boat.

Well u got to put in perspective…if you put ypur $$$ in commodities in 2006 and took it out in 2008 you’d be laughing ..the stocks increases ranged from 40- 100 % increase

they will be boooms and busts.

Admittedly Winnipeg is still half of Van even now but Hindsight is 20/20…can’t change the past.

learn from it…you will be other opportunities to gain equity…luck favours those most prepared

#45 mikewasanengineer on 06.17.09 at 12:52 pm

Nostradamus jr.

Thanks for your feedback….I would love to join the Canadian Military. Great idea. Only problem, I am a Cancer Survivor. Apparently, you have to be healthy for those positions, or they don’t really want you. So I can’t go that route.


Thanks for the words of encouragement. I will say a prayer for you this evening.

It is very challenging out there right now.

Which Province is best to check out. By Mid July, I may drive to either (1) Calgary, (2) Edmonton, (3) Fort Mac, and attempt to sell my services there. I checked out Sask., but it didn’t seem too promising. Not sure about Manitoba either.

Any feedback on those areas, or would I be wasting my time?

#46 lgre on 06.17.09 at 1:07 pm

“Now, my friends who bought a year ago have $70,000+ equity in their house”

whats your point, its all relevant..all the houses around your friends have increased as, unless they plan to sell and put the money in a briefcase, then move under a makes no difference. Just as they went up $70k they can come down just as easly.

#47 Shaun on 06.17.09 at 1:12 pm

@#37, I wouldn’t say you missed the boat. The boat in WPG is just idling.

I’ve been keeping an eye on the house prices in WPG for the last year and haven’t noticed the prices coming down, although it seems as though there aren’t as many people over bidding.

Also, it seems as though salaries in WPG are pretty good compared to the cost of living here. I work for a company who has offices all accross Canada and I noticed that those working in cities like Vancouver and Calgary only make about 10% more than I do (for the same position), yet houses in their area are about 150% of WPG.

It’s such a dilema…. do I purchase this summer (where I can very comfortably afford the mortgage payments — and will be able to afford a spike in interest rates 5 years from now), or do I park my money in case the shit hits the fan…

Garth, is your probability of the ‘shit hiting the fan’ still at 20%?

#48 hagbard on 06.17.09 at 1:23 pm

Hey, anyone know where I get get historical (ten year) stats on housing prices for Essex County? I’ve searched google and gotten nowhere. I’d like to see if prices in this area have increased, remained stable or decreased over the ten year period.

#49 Calgary_rip_off on 06.17.09 at 1:44 pm

Garth check out this rent to own in Calgary:

I viewed this house Sherwood Parade in 2007 when I first moved to Calgary. Sheldon the dude running the outfit said he would give me the down payment, but “to not worry about the interest rate on the downpayment, just flip the house in a year or so,” and look, he still hasnt sold it. Funny. The house has an adjoined floor plan, one main room, its like a labyrinth or something. No wonder it hasnt sold. In a normal market that house would be $200K, not a half million. Who are these people that think 1)people have the money, 2)houses like this are worth that much? What kinds of drugs are the realtors and media on in Calgary anyway? Its a prairie city, not New York City?

#50 cowgirl kiss on 06.17.09 at 1:46 pm

Hey you thirtysomethings. I am a fiftysomething who is noting a phenomenon in single boomers. Now, I don’t mean down on their luck boomers. These are business owners and professionals (OK, so it could be the same thing …). We are selling our big homes – don’t need the space – and are living – gasp – in shared accommodation. Why? Because it is less lonely, we have flexibility if we want to travel, the benefit of a yard and it makes sense when renting is cheaper and house prices are volatile.

Just imagine how weird it feels when someone asks where you are living and you sound like you are in college again. You know what the response is? They think it is smart and hey good for you! They know that we have $$$ in the bank when it is time to buy and we are biding our time.

You know, I think we really really overestimate how much other people think about our lives. Most people are just worried about their own. How much time do you really spend worrying about other people’s day to day finances -other than ego -based interest in the Jones’ stuff?

We all care too much about what other people think. Let’s all celebrate those who are going to the beat of their own drummers. And as someone said on this site a few months ago: ” Enjoy your summer. Really.”

#51 lgre on 06.17.09 at 2:01 pm

Housing Bubble, what’s the trouble now?

#52 BBC on 06.17.09 at 2:07 pm

Jam – there is never any harm in pre-approving for a fixed rate. If you pre-approve you are guarranteed that rate for at least 90 days!!! I would get pre-approval ASAP!

#53 Barb the proof reader on 06.17.09 at 2:26 pm

‘warding off the “you need to own” demons that always seem to be lurking in the background’

pjwlk @ 26,

It’s a constant battle to block out co-influencing. The oversimplified, or often distorted messages, about home ownership, need to be taken with a grain of salt, some stamina and reflection. On the one hand we need society’s influencing messages, it’s part of life. But on the other hand, it can really get distorted and usually gets over-simplified when it’s ground up and fed to masses.

Owning a home is only good ‘if’, on balance, it makes more sense to own than it does to not own.

“Timing” seems to be a new kid on the block for some. It’s just not sexy (lol) for some because they don’t have the patience.

#54 dd on 06.17.09 at 2:34 pm

#49 Calgary_rip_off

… houses like this are worth that much?…

They might be today. Maybe there is still lot of income out there to blow on a house. However, it will not be worth that much in the future. Remember what is going up: taxes, fuel, food, and interest rates. The more these prices go up the less will be able to afford these kind of prices.

#55 Barb the proof reader on 06.17.09 at 2:51 pm

hagbard @ 48,

There are some great RE agents in that area who are very helpful. Personally we’ve found over the past ten years the prices did go up slowly and got wa-aay overpriced. Some still are.

But it just depends on your area, Wheatley for example is a town, nicely located and near a lake and where there are still starter homes on a big lot under $70,000.

#56 Nostradamus jr. on 06.17.09 at 3:07 pm

Random factoids

…You can now buy physical gold from a vending machine in Germany and from any Post Office in Switzerland.

…Iran is imploding because it is broke.

…Brazil, Russia and China are in deep talks to initiate a new currency…because the U.S. has bankrupted them….Euro countries didn’t bother attending, they were bankrupted by the U.S. last year.

…Nouriel Roubini predicts Oil will crash.

Makes for good “Reality” tv this summer.

…Vancouver Bear and Mike (authentic)…are you guys twins?

#57 Samantha on 06.17.09 at 3:24 pm

#45 Mike(stillanengineergoshdarnit) –

Here is a link for Manitoba Hydro (home page >> Careers >> Future Opportunities. On the right side of the page there is a heading “Related Info” and a list of professional designations, with Professional Engineers listed.

and on this link is Manitoba Hydro career info, benefits, etc., with an online registry:

I have not worked for them, however, I do know someone who did for many years in Jenpeg. He flew in and out (can’t remember the rotation but it was excellent) and lived in a rural community (he could have lived in Winnipeg). He and his family did very well with this lifestyle and he always spoke highly of Manitoba Hydro as an employer (benefits and wages).

I hope this helps and don’t give up. I (and a few others) lost a long term career that paid well, benefits, etc. due to some very nasty corporate politics. It was a devastating experience and for a while I was pretty bitter and cynical. But, through a friend I started working 1 day a week for a retail store for minimum wage. The owner of that store liked my work ethic and he offered me a job at his much larger import/wholesale operation. I traded an attaché case and power suits for jeans and a sweatshirt, and you know what Mike? The time I spent working for him and his wife were the happiest days in my employed life. And, as a bonus he taught me so much about business – knowledge that no University course could impart. I also ended up earning more than my previous job due to commission.

The axiom is true: when a door closes, a window opens.

Good luck

#58 landlord on 06.17.09 at 3:36 pm

great advice garth keep up the good work!

#59 Nalini Sharma Fan Club on 06.17.09 at 3:41 pm

#42 True, buying a house is a forced savings plan. But really, if that is your best investment over a 30 year period, then you really need to take some time and re-assess your financial situation, and/or fire your financial advisor.

For all the nay-sayers out there. If you so strongly believe that housing prices will continue to rise, then why buy just one house, buy 5 or 10…and sell them in the future and reap your percieved profits.

The rest of us have a little more patience, and will wait for rates to rise, for the HST to kick in, for more layoffs or until you can’t get a tenant to keep up with your payments….

#60 dgd on 06.17.09 at 3:51 pm

#37 missed the boat Winnipeg

Yes you did.

Winnipeg is a no brainer.

1% vacancy rate

cheap real estate

Has been catching up with all that money floating around

It will never be a Vancouver…….but it will cash flow not like Vancouver. OVERPRICED!

#61 VOODOO on 06.17.09 at 3:56 pm

“My husband and I are in our early 30s and for various reasons are not at the level of “financial security” as most others our age.”

“We have no consumer debt (paid that off, too) or loans; have about $30K in RRSPs and $25K in the bank ($10K in a TFSA and $15K in cash)……We are saving $25K per year for a downpayment”
How do you reconcile these two statements (you must have very well-to-do friends)? You have $55,000 in cash (and you are growing it at $25,000/yr). I’m sure others in their 30’s do not have this “financial security”, and indeed many have consumer/student debts well over $100,000, and illiquid equity in a house.

Look to the future: in 3 years you’ll have $130,000, in 5 years $180,000 and 10 years $305,000 (assuming zero growth in your savings). Likely in 10 years you could have well over $500,000 if you increase your contributions and manage your money properly. You could pay cash for your house at that time (but would you want to if that $500,000 would not appreciate, or even depreciate, if put into a house?). Thus, it stands that your biggest risk at the moment is the impending inflation eroding your savings (wealth redistribution due to unexpected inflation):

“The main winners are young, middle income
households, who are major holders of
fi xed-rate mortgage debt, and the government,
since inflation reduces the real burden of their
debt for both groups. The losers are high-income
households and middle-aged, middle-income
households that hold long-term bonds and non-indexed
pension wealth.”

As Garth has said before, deflation is the current/impending environment and the reverse of this statement is true.

Good luck with your future!!

#62 Dave on 06.17.09 at 4:03 pm

There’s millions of people like this in the country, alongside those who aren’t doing so well. So why would the bubble’s end?


because there are many more millions that aren’t like that. It’s the herd that determines what happens. When the shift from “real estate always goes up” to “oh my god, my house is going down”, even the “well-off” people you mention will lose asset value

#63 CM on 06.17.09 at 4:09 pm

I met up with some old friends last week. One of their daughters and her husband are in a very similar situation to the couple in the above letter. Her mother said that they were thinking about buying a house in late summer/fall this year.

I gave them your website address. I’d hate to see them get stuck somewhere with a large debt and an inability to move.

#64 David Bakody on 06.17.09 at 4:11 pm

#37 Missed the Boat in Wpg on 06.17.09 at 11:43 am

Working your buns off Sir/Madame for nothing is not fun and downright depressing and cuts years off your life ….. having savings and saving money is the direct opposite …. you Sir/Madame have the choice to take a month or two off for a nice vacation and still finish the year in the black …..guess you missed that part where Garth and others said having no savings while being house proud when an financial emergency strikes could be deadly!

#65 smw on 06.17.09 at 4:23 pm

#42 Lawrence

I operate subsidized seniors apartments in Calgary and I can assure you that 99% of our clientele were renters all of their lives. They didn’t accumulate a nest egg for their retirement because for them, the risk in buying a home was too great.

I guess back then too you actually needed to bring something to the table to buy a home, to show the bank you were serious about the risk you were taking on, like money.

If you didn’t have $, you had to rent. Today, all you have to do is sign a mortgage and your guaranteed prosperity for life.

Its a can’t loose proposition, sound familiar?

#66 Nostradamus jr. on 06.17.09 at 4:33 pm

and I see “Summer Reality Tv” has already begun in Eastern Canada.

Civic Strike slated for Toronto

5 school stabbings in Toronto

Youth rioting in Montreal

…Sad really…

#67 somecatchphrase on 06.17.09 at 4:45 pm

America’s tax dollars at work –

“100 Questionable Stimulus Projects”

#68 Dean on 06.17.09 at 5:00 pm

I always see the 3.5 x Income thrown about and it made me think a little. We look a lot at historical figures when looking at house prices. But a generation ago, dual income families were not the norm as they seem to be now. I think we’ve made up for some of the increase in home prices with this, which makes sense.

However, what difference could this make in today’s market?

1. It’s unlikely we’ll be able to do this again unless we take up polygamy. Or put the kids to work. Neither of these seem likely.

2. Dual incomes are twice as likely to experience job losses in a downturn. So we’re doubly exposed to the downside.

#69 Dan in Victoria on 06.17.09 at 5:01 pm

Sue,sounds like you are on the right track.I’m impressed.Don’t worry about your friends and their smoke and mirrors tricks,math wins every time period.Do a simple spread sheet,I just did this on a lunch napkin.Starting age 32.#1 your smarter than you friends.House cost 280k.30k down payment.25 year mortgage @4.2% on 250k.Total interest 153k.Property taxes 1500/year?=37500.Total cost=250k+30k down +153k mortgage interest+37500 property taxes=470,500.Finish age 57 years old 8 years to retire.#2 You and Hubby.House 280k in 2009 dollars.Save 10 years 25k/year at 3% compounding=300k or so.Rent for 10 years at 875/month=105k.Total cost 280k+105k for rent=385k less the extra accumulated interest of 20k=365k.Finish age 42 years old,23 years to retirement.Difference 105k.I know this is FLAWED,house prices will change,interest rates will change,circumstances will change,house maintenance, etc.etc.etc.Do some proper financial planning with a pro.I just wanted to make you think harder.Remember real estate goes in cycles,What part of the cycle do you want to buy at?Good luck.

#70 Two-thirds on 06.17.09 at 5:08 pm

Frustrating day at work today Garth, so I had this thought:

“Being smart is no smart way of being in good terms with fools”

Someone please plug me back in the Matrix…


#71 . . . fried eggs and spam . . . on 06.17.09 at 5:23 pm

#56 Nostradamus jr. at 3:07 pm — “…Iran is imploding because it is broke.”

Another side to this is ‘destabilization’, which is what the CIA / Mossad / controlled western media are very good at doing.

With all the oil and natural gas wealth shared with Russia and China, I would be more inclined to focus on the destabilization side — look at the Bombay bombings, which were so nicely passed on to Pakistan, yet Pakistan had nothing to do with it.
Through the looking glass, life is confusingly strange and just plain dumb, said hairy The Flying Wombat.

The link I posted last night about a possible trade war between China and the US — has the possibility of new countries taking part. —

I guess it didn’t help much that Airbus received 55 orders, Boeing two. Well, manufacturing on this continent has now been flushed down the latrine!
All the square blocks are now falling nicely into circles, and it’s working.

Big Parma – White House – Ottawa all take care of each other, all the while feeding us horsefeathers and poop.

And we believe them? Not me! Not ever! Two links, separate issues. — \/
Ohh yes. La eek-onn-aum-ee sux, and the greenback will probably be replaced by something that works. — \/
BTW, an interesting quote in the business section of the KDC this morning:

“There’s also compelling value in Canadian equities, especially in large capital companies that have no debt in consumer staples, utilities, telecom, energy, base metals and technology.”

At least there is something else to invest in, rather than sinking real estate values!

#72 Vancouver_bear on 06.17.09 at 5:25 pm

#56 Nostradamus jr. on 06.17.09 at 3:07 pm

…Vancouver Bear and Mike (authentic)…are you guys twins?


We are 3 different persons. LOL.

I suspect you are realtor promoting buying in Hongcouver.

#73 Two-thirds on 06.17.09 at 5:36 pm

# 42:

“It is a forced savings plan, it grows tax free equity”

Please explain to us how paying property taxes while paying a mortgage (and afterward) equals tax-free equity growth.

Come selling time, yes, under specific conditions. But overall, the equity built over time is not tax-free.

Unless of course, the above does not apply to the galactic coordinates in your example.

#74 tjmikey on 06.17.09 at 6:03 pm

Dear Penthouse,

Oops… wrong blog,

Sorry Garth

#75 Da HK Kid on 06.17.09 at 6:21 pm

S&P 878 is a major downside resistance level if broken will be in a position to retest the old market lows.

24 days ago the S&P closed at 888. That’s a richly priced PE of 31. Let’s assume that earnings recover to $48. That’s still a richly priced PE of 18.5. A bear market bottom might sport a PE of 10-12 but let’s be generous and use 15.

15*$28.51 would put the S&P 500 at 382!
Let’s be more generous and use an earnings estimate of $48.
15*$48 would put the S&P 500 at 720!

Those expecting still higher earnings need to consider the Effect of Household Deleveraging on Housing, Consumption and the Stock Market.

No matter how you slice and dice things, fundamentally the stock market is very pricey.

#76 Mike B on 06.17.09 at 6:50 pm

Those statistically minded will know that while house prices everywhere have risen those prices are way beyond the salaries we take home. The prices have not kept in step with our salaries… It really took off around 9/11 when Greenspan dropped interest rates to low levels for too long and banks/ brokers needed to do something with all that free dough … all the credit worthy people had homes so who was left…well you know the rest. Point is that the major centres in Canada saw the rapid rise BUT none of the decline. Our conservative-ish banks kept all the rabble out of home ownership so there is little chance for ANY correction, something I would surely love of course. Only high interest rates and massive umemployment will lead to markedly lower prices. There is so much access to cheap money that even if an “owner” is in trouble they can refi with a single call. Much as it pains me I would say that those friends of ours who took the leap and bought their 1.3 mill dreamhouse will likley make out like bandits in a few years in spite of being in huge debt. Toronto may very well go the New York route and prices a mere few years ago will be gone forever…maybe the realturds are right after all…. Just depressing to see an endless trend towards ever higher prices … I have so many friends I grew up with that cannot even buy a home in the area they grew up in. Cruel but true

#77 David on 06.17.09 at 7:36 pm

Personally, I think 80% year over year home price spikes in Saskatoon for the past two years should be viewed as a red flag. My buddy and his wife helped their young daughter get a modest home there for about $240K. The nice parents advanced the newlyweds $65K, plus spent another $35K renovating the house and garage and built a rental suite. They get highly agitated with me when I mention words like housing bubble. I attribute some of the agitation being caused by me questioning their basic sanity by them spending a month sweating their butts off renovating a house that would have probably cost $90K pre-bubble.
As for Pegger’s comments, I think one has to look at fundamental and not relative home values, so as not to distort the optics. Winnipeg is cheaper than Calgary, does that justify home prices doubling in 4 years in Winnipeg? What if I said that Grand Forks North Dakota has US exchange adjusted home prices 40% lower than Winnipeg? We are we live.
I am not Sue, but best bet is to keep the powder dry. Buy season tickets for the Blades, eat out occasionally at some of dinery’s in Saskatoon and take in some of the University City’s cultural events. That sure beats Kraft Dinner.

#78 MenWithHats on 06.17.09 at 8:13 pm

Might I suggest a prize for the dumbest question of the week,month, year ?
You can’t make this stuff up .
People. God love ’em !

#79 smw on 06.17.09 at 8:16 pm

#66 Nostradamus jr.

How are the gang wars in Marijuana Land ding dong?

You know, boomers are going to flood to the eastern shores of the Atlantic Ocean, Nova Scotia and New Brunswick real estate is 1/3 of the price, which is good for all those people THAT WERE planning on retiring in wine country and other pretty parts of BC. Those retirement funds say they can’t afford to live in the lap of luxury, a la Shangri La like yourself.

I predict that, an out-flux of residents from BC, to the east coast, where they also have fishing and forestry as their primary industries, and cottage country at a 1/4 of the price.

You heard it here first, and unlike your insane ramblings, this makes sense.

#80 taxpayer like you on 06.17.09 at 8:19 pm

Mike (authentic) you’ve said:

“I’m in favour of increased mortgage rates as well, it will bring the prices of homes down to historic levels and
make people SAVE for change on a larger down

and also

“we had a master bedroom in our last house 38′ long and 30′ wide. It had a ensuite, walk-in closet…”

Sorry Mike, I cant connect the dots. You want lower prices, but also seem to have had your share of the “kool-
aid” as well. Can you fill in the blanks? Thanks.

#81 smw on 06.17.09 at 8:35 pm

Garth, guess what they’re doing in the land of chocolate?

#82 kc on 06.17.09 at 9:13 pm

This is a MUST READ for all these people who are asking “should I buy a house Garth?” It is a no nonsence BUDGET approach of real numbers in plain english in US dollars mind you, HOWEVER, …

“Today I want to follow that same approach with a slightly different spin. We’re going to put faces on some of the seemingly abstract numbers that are floating around out there. In doing so, we’ll get a telling look into what regular ol’ U.S. citizens are experiencing right now. Let’s call them “Mr. and Mrs. Median.”

What I think will become painfully obvious is that housing remains largely overpriced … people remain tremendously unprepared for personal hardships … and the road to substantial economic recovery will likely be long and arduous.”

this is worth the read.

The Great Unwinding of Credit Will Continue, So Make Absolutely Sure You’re Prepared!

#83 NorthVanDude on 06.17.09 at 9:16 pm

Mike B
“Our conservative-ish banks kept all the rabble out of home ownership so there is little chance for ANY correction, something I would surely love of course. Only high interest rates and massive unemployment will lead to markedly lower prices.”

Kept the rabble out? what do you call someone who cannot save anything, zero, nada, zilch- and gets a 40 year mortgage? is that your standard for weeding out the rabble?

Only high interest rates and massive unemployment? well, get ready for both.

#84 CalgaryRocks on 06.17.09 at 9:25 pm

#79 smw on 06.17.09 at 8:16 pm #66 Nostradamus jr.

How are the gang wars in Marijuana Land ding dong?

You know, boomers are going to flood to the eastern shores of the Atlantic Ocean, Nova Scotia and New Brunswick real estate

I doubt that boomers will want to get their hip replacements frozen in Atlantic Canada. They much prefer warm weather and sun and I bet they will only go south for the winter because they will miss their kids and grand-kids so they’ll want to be around the rest of the year.

#85 Barb the proof reader on 06.17.09 at 9:32 pm

70 Two-thirds Frustrating day at work..had this thought
“Being smart is no smart way of being in good terms with fools”
Someone please plug me back in the Matrix



Try some tonic with a bit of Dylan, Clapton, Harrison, Petty, Young, McGuinn (1st to sing, of The Byrds)

Lyrics are great to follow along with whilst listening to this song, the lyrics make it, so maybe open two windows to fully enjoy..

The full lyrics are here:×2947152

Great listening found here:
The most poetic song ever…

#86 . . . fried eggs and spam . . . on 06.17.09 at 9:54 pm

A Midsummer’s Night’s Conspiracies Theorist’s Dreamsters Revealed In McHappy Land. Or something like that.

Check the headings, one from the most recent post I submitted — — and this one, then total the figures up — (to “protect” the G7 banking [screwed up] system).

US$27.9 trillion owed (to whom and with what?), their manufacturing capability now hovering around zip, all of it being shouldered by taxpayers — plenty of whom have lost their jobs / homes — is a lotta moolah.

But we’re Kannnahduh and we’re different, and NO ONE gets to pay any bills off here! Free mortgages in abundance!
For the PAN-dem-IC Bubble-And-Squeak Show, please see —

Also, — “The Alexander Haig – Henry Kissinger depopulation policy March 10, 1981

“There is a single theme behind all our work – we must reduce population levels,” said Thomas Ferguson, the Latin American case officer for the State Department’s Office of Population Affairs (OPA).

Sorta speaks for itself, non?
Consider: British Airways asked its workers to work four weeks for free. Air Canada asked the CPC to bail them out again, so technically they are “insolvent”. Marry them with PanAm, Aloha Airlines and many others to create an already-failed industry.

Then wave a magic wand to manifest a brand-new airport hub at Detroit! After all, retailers and grocers are leaving in droves, median home prices are US$6,000 (they can double up as free B&B’s) — city council needs all the help it can get!
Ever given a thought why NAFTA was created in the first place? This might be one answer. —
The Brown Shirts of The Third Reich have reincarnated into The Fourth Reich, and are taking hold in the US military. —

#87 George on 06.17.09 at 10:01 pm

Here are Saskatoon stats for the last 5 years
In 1998 an average house would have cost you 100k. 10 years later that same house may have tripled.

I don’t think Saskatoon RE was underpriced pre 06 like Garth said. It was a balanced market then. Builders sold good homes, buyers bought affordable homes and sellers could actually sell homes. Now you have some questionable buildings going up, most buyers are overpaying and many sellers are still hoping to sell but can’t with such high listings.

When Phoenix was considered underpriced in the early 2000’s, the term they coined was “the catch up effect”.

I am not a bitter renter or spec buy/seller. I bought our as others would say, renting from the bank pre boom.

#88 dgd on 06.17.09 at 10:10 pm

#77 David Bakody – “Winnipeg is cheaper than Calgary, does that justify home prices doubling in 4 years in Winnipeg? What if I said that Grand Forks North Dakota has US exchange adjusted home prices 40% lower than Winnipeg? We are we live.”

Shouldn’t real estate be treated like a stock. What’s the PE ratio or what’s the cap rate. What’s the trade volume or what is the vacancy rate.

Winnipeg is still under priced. A condo in Vancouver basically tripled in 6 years. So, what about the peg.

1% vacancy rate

average home is about 200k

average income is lower than Vancouver

I think David you are a real estate hater like Garth. Do as I say but don’t do as do.

Garth your book is wrong and therefore you are as well. People have lost money in the last few months because of your ill advice. Just like the book …….what was it called ……..The Strategy.

Just my opinion.

Your book maybe right in the long run over the next few years……….but your rhetoric to this point has hurt a few families.

But I guess what can you expect from an English major eh?


#89 Pink Monkey on 06.17.09 at 10:45 pm

Nostradamus Jr

Really enjoy the reactions you get to your comments. It’s good to see their blood boiling. They wouldn’t insult you if you weren’t making an impact.

Mike(authentic) you are such a weenie.

#90 EJ on 06.17.09 at 10:54 pm

#88 dgd:

Treating housing like some symbol on the stock ticker has helped cause the economic problems we’re seeing today. First in the US, then everywhere else in the world following. People who are too blind to see the ramifications of their own selfish greed. People who want their free ride without hard work and at the expense of someone else. Then when everything falls apart and these people get caught at ground zero, we always hear them crying for the bailout, nobody could see this coming, and how it wasn’t their fault.

There’s only one main reason that Winnipeg has traditionally been cheaper than other major cities: it’s simply less desirable. Location, location, location. And wpg ain’t got it. Seriously, given a choice of locales to live in all over the country, are you really going to pay top dollar for 80 degree temperature swings in a high crime, high tax, low opportunity welfare province? The only advantage Manitoba ever had was affordability, and now the specs have helped destroy that attraction too.

#91 Mike (Authentic) on 06.18.09 at 4:53 am

#80 taxpayer like you said: “Sorry Mike, I cant connect the dots. You want lower prices, but also seem to have had your share of the “kool-
aid” as well. Can you fill in the blanks? Thanks.”

Both of my replies are taken out of context, but they do point to the same end. Affordable homes for everyone is most important on all levels; from sub $250k to $1m and over. And people should be encouraged to save money and not take on massive debts. There is no such thing as a “good debt”. A starter home should be priced affordable like a starter home should, a $1m home should be $1m of value. Yes, we bought and sold 2 homes in 8 years living in Calgary; not exactly a flipper profile.

#56 Nostradamus jr. said: “…Vancouver Bear and Mike (authentic)…are you guys twins?”

No. But I’ve heard 1 in 7 people in the world are related.

Speaking of BC, what exactly is the “good” industry there anymore? Wood? Fishing? Produce? or is it all just Tourism and Retail now? Is it just foreign money keeping Vancouver afloat?

Many of our friends I know who live in BC (vancouver, Victoria, Nanaimo) have actually lost their jobs in the past 6 months and are still looking for work.

BC is extremely beautiful IMO, just not “the leader” provience in Canada right now. My money would be on Alberta.


#92 pjwlk on 06.18.09 at 7:19 am

#28 Greg W., Oakville: Yeah I agree, going green my ass…

I’m told the Ford Plant in Oakville uses 30 Megawatt Hours (Million watts hours) of Power per day during regular production. One black-out week (layoff) would save approximately 150 Megawatt hours of power! They’ve had 3 black-out weeks so far saving 450 Megawatt hours!

On average a house in Canada uses about 25 killowatt hours per day. 450 MwHrs is enough to power 18,000 houses for a full 24 hours.

#93 D from London, ON on 06.18.09 at 7:58 am

# 75 Da HK Kid

Thank you for your answer.

So housing prices are inflated, the stock market is inflated, and the gov’t is pusing cash out the doors at breakneck speed to keep these bubbles inflated…we’re f***ed.

#94 smw on 06.18.09 at 11:01 am

#84 CalgaryRocks

You can buy ocean front property, with acreage, for anywhere from 150K to 250K on the North Shore of NB or PEI, a little bit more for south shore NS. Sure the Annapolis Valley is simalar.

You can then spend 100K to easily get yourself into a spot in Florida or Arizona, if you have to get away from the bitter cold, which the east coast isn’t anything like Winnipeg or Ottawa winters.

In fact, the temperatures over the past couple of decades on the east coast have been steadily rising and besides late December to the first of March, the temp is the same as BC.

So you can still plunk a hunk of cash into a dividend paying investment, like an oil and/or gas trust, and have your real estate diversified.

I’m not saying BC isn’t a beautiful place, but there are lots of other places you can live for a fraction of the price if your retired.

But your right on the temp, its about 5 – 7 degrees on average colder through the months of December to March, and Nova Scotia gets about as much rain as BC.

Must be an ocean thing…

#95 Soylent Green is People on 06.18.09 at 11:17 am

#79 smw on 06.17.09 at 8:16 pm

How are the gang wars in Marijuana Land ding dong?

So true, I would be scared to live there.

Young mother shot to death had links to gang

#96 Tony on 06.18.09 at 9:07 pm

Saskatoon of all cities in Canada may fall the most. Followed by Winnipeg and then Vancouver. There is basically no net emmigration to Saskatoon. I’d say it would take about 15 to 20 years to see the same price you would pay this year for a house there. When something goes up for no reason at all in the world it always falls and Saskatoon will fall very, very hard. I’ll guess a 45 percent drop over the next 4 years.

#97 Cameroni on 06.20.09 at 8:28 am

What happened here in Saskatoon is that after many, many years of property values remaining low relative to other regions of the country prices suddenly exploded. Property owners here got drunk on their new found wealth and the hangover has barely begun.

A friend of mine has very recently bought a 280k resort property near Saskatoon and would not be dissauded. “It’s an excellent investment” he told me. OKee Dokee. Then he dipped into his equity and bought 3 new cars and some holidays abroad. In the end he has about 15% total equity remaining and two monster mortgages and lines of credit.

My point is that there still seems to be a consensus here that Saskatchewan is somehow different than the rest of Canada so the buying continues and housing prices have only dropped marginally. So far anyway.

Lets see what the future brings.