Weekend update

Amazing but (apparently) true stories from The Bubble That Ate VanTown.

We’re not making this up. Nobody can make this up.


What a million buys…

This 1926 home features hardwood floors, a large renovated kitchen, a bright two-bedroom basement suite, a white picket fence and a tree swing.

Sure, the yard is small, the view out the back is of a giant condo complex, the bedrooms are tiny – the master is only slightly more than 100 square feet – and it is just half a block off one of the city’s busiest thoroughfares. But those shortcomings were quickly forgiven by the dozens of prospective buyers who streamed through the first open house saying, “Honey, I love it” while trying to imagine life without closets.

Think you’d be interested? Too late.

Five days after that open house, seven agents lined up to make their offers. The asking price was $959,000, but because of the competition, the bidding war pushed the price higher. Only two bids came in at less than $1 million. In the end, the home sold for a staggering $1.142 million – more than $180,000 over the original price tag. — Source

Want more? Whispers from the Edge of the Rainforest.


Meanwhile, the doctor is now sober enough to be IN:

Garth: I currently am in the last year of my 5 year 4.15% mortgage. Mortgage is due September 2010 however, Scotia will allow me to renew six months in advance which means March 2010. Do you think I still have a good shot at getting in to renew in March before interest rates go up or should I start looking at maybe renewing now? Scotia’s “Special Rate” 5 year rate is 4.19% which is basically what I currently have and been able to easily make my weekly payments plus some.

While I have you I have another question regarding the housing market. I have really been considering cashing out on my home but having a wife and two kids under 5 makes it a little difficult to just pick up and move just because we can make some money.  I am 34, I have a detached 4 bedroom house in the Bloor West Village, purchased 4 years ago for just under 500, mortgage currently is about half of what I purchased for.  Had an agent come and give me a free evaluation and I have been told it could fetch somewhere around the 700 mark. So a 200ish profit in 4 years minus all the fees of course so still not bad.

So in the end after all that writing, my questions remains the same, when do you anticipate the BOC will increase the rates? Because once they do my guess is the whole real estate bubble is going to go bust, and it will be too late. — Doug in Toronto

Sell. Where else will you find $200K in tax-free capital gains in your lifetime? This market clearly will not survive many months of rising interest rates, and when they do start to sizzle you could see an imbalance between listings and demand materialize within a few days. Your ‘considerations’ – young kids and a possible minor adjustment on your mortgage (even a three-month penalty) pale in comparison to the potential gain to be collected.

Just make sure the agent isn’t lying to you (been known to happen). Get two more opinions, and list now. This weekend.

We are like the hoards of first time home buyers in Canada – we want a house.  For a year we were renting and torn between the hormonal decision to buy or to sensibly wait until the market corrects to vultch.  Anyway, hormones were victorious and we’ve recently bought in an older neighbourhood in Calgary :)  We’ve tried to follow some of your guidelines in selecting a house that is close to transportation, has a yard for a garden, isn’t a McMansion so bills are manageable and if my husband has his way, we will be buying a generator and solar panels.  This is a long term home for us (we’re 28 and 33) and have selected the neighbourhood for schools, parks, family nearby and the house itself is exactly what we wanted.  We’ve not got more than half out net worth in the home and we’ve put just about 50% down.  Now the question becomes – HELOC or traditional mortgage.  I’ve always been under the assumption that mortgages are a terribly expensive way to borrow money, so when we qualified for a HELOC, we thought that was the way to go.  My husband and I both believe that interest rates will rise and since our HELOC is prime + 1%, maybe it is best to lock into a fixed rate 5yr.  Our goal is to pay it off as quickly as possible, but we’re thinking about kids in the next few years so we’ll be on one income.  Any thoughts? — Morgan in Calgary

Obviously you’d have paid and financed less if you’d waited another year, but at least you have a 50% stake in your home. This means you’ll avoid the negative equity surprise which is awaiting too many young buyers.

A home equity line of credit at 3.25% is no bargain since that rate will be rising faster than conventional mortgages, for reasons which make bankers moan at night. Besides, you can construct a mortgage for yourselves which accomplishes the same, but better protects you from rate fluctuations. Just take out a conventional home loan and shorten the amortization, plus arrange to have weekly payments (the right kind). You can still lock in a rate, spread some of the interest pain out over future years, and yet pay off the principal fast.

Maybe even before your hormones run out.

Garth, I would like your thoughts on raw/farmland. The wife and I have a change to add to the 160 Ac we have now. This would bring the total to 260+/- Ac. It is going to cost us $1200/Ac to buy. This will increase our debt to over $200,000. There is oil lease revenue (4 Wells) with this land to add to 4 wells on the 160 Ac we have now. This would be around $16,000 revenue plus what we get from the land revenue. We are in our 40’s and both work full time in the food store/ oil industries in the western prairies. Would like your thoughts along with the blog hounds. — Doug on the Prairies

Well, cowboy, I think you should go for it.

The purchase price of $192,000 for 160 acres seems reasonable in your neck of the woods, but more importantly, the oil lease revenue will finance the whole thing. If you borrow 100% of the cost on a three-year term at 4%, the financing charges are just over $1,000 a month. And unlike raw farmland, financing should not be a problem if you can throw some binding leases on the banke’s desk.

Besides, this is a cool thing to do. Oil will be over $100 a barrel in the foreseeable future. Peak oil is a looming reality in our lifetime, so the prospects are nothing but sound for small producers. And unlike all the vulnerable, flaccid, dependent, urbanite weenies in this country, you have spurting crude!

I`m starting to tingle typing this. Mail my barrels to Box 9, Caledon Village Ontario.


#1 asp on 09.18.09 at 9:53 pm

Garth, you missed something in your advise to Doug. There are no woods in his neck of the prairies.

#2 Calgary_rip_off on 09.18.09 at 10:25 pm

Nice post Garth.

Your advice is kind to the person who just bought in Calgary. They probably paid $200K over what the place is worth. That’s what you get when you are inexperienced, young, and ignorant. It happens all the time in Calgary. Chances are these folks will be able to afford the payments, and hopefully Calgary doesnt go underwater. It’s anyone’s guess what will happen-although due to the prevailing mentality of buying at any cost, Calgary is unlikely to go under. I can just see people buying houses at $400K for 12% interest. It will definitely happen here. People will eat top ramen in calgary just to have a house. Its laughable that so many people are so stupid in Calgary.

#3 Not Garth on 09.18.09 at 10:57 pm


Vancouve sell/list is weakening perceptibly. The market appears to be slowing now. I don’t think buyers who buy in 2010 will buy at the peak. I think the peak is past. Past tense. In the rear view mirror. In BC cooling winds are traversing over the housing/condo markets NOW. Ah, refreshing.

#4 nonplused on 09.18.09 at 11:09 pm

$1200/acre with oil leases???? I got to spend more time looking at farmland, I’m in!

But wait. Around Calgary they want $600 for a bare 160 acres with one well producing $7000 a year in lease payments. What gives?

This property must be near Grand Prairie or in the dust bowl of Saskatewan. The land is cheap because it’ll net you about $10,000/y in hay. There is a reason the haven’t converted any of the vast tracts of forest 1 hour north of Edmonton running to the perma frost into farms. Nothing grows. Well, trees. But not fruit trees.

#5 nonplused on 09.18.09 at 11:09 pm

Sorry that was $600,000 for 160 acres.

#6 Patsan on 09.18.09 at 11:25 pm

To Morgan in Calgary:
Go for HELOC now and try to negotiate a better rate, say prime or prime minus something. Get banks compete on you.

Inside your HELOC you can do the following:
1. Fix any part of your debt for any period available at any time you want.
2. Build a ladder of fixed mortgages.
3. Leave a part of your debt unfixed (say on prime) that you can pay off at any time without penalties.
4. You can lock a mortgage rate for 120 days and keep doing it on weeks preceding BoC regular meetings. You can do it for each of you if HELOC is joint. (I am locking for my spouse and myself for 1 and 5 years respectively).
If rate goes up, you can fix a part of you debt during 120 period.
If rate stays or goes down, just keep locking.
5. You can do combination of aforementioned, it just requires few minutes of monitoring every day.

In the end, once your house is paid off, you might want to set HELOC for investment purposes. Following the advice, it will save you appraisal fee and hassle with opening HELOC.

Good luck!

#7 cons and pros on 09.18.09 at 11:50 pm

Regarding oil, you might want to check out Harry Dent’s blog and author of the Great Depression Ahead.

He predicts oil to only be bullish for the rest of this year. After that, oil is going to tank…


#8 kc on 09.19.09 at 1:07 am

In the last day’s posts I noticed the (In, De… stag… flation) debate going on once again. I did read one poster who actualy hit the nail on the head when (s)he said that one of the key contibuating factors is the “Velocity of Money” that controls these primary situations. In case no one read what I posted a few days back John Mauldin wrote a great article explaining how velocity works in money, and credit.

Deflation, Falling Velocity of Money Ensures Printing Presses Will Keep Running


care to comment on velocity and how it is explained in this Garth? what are your thoughts?


#9 Glenn on 09.19.09 at 4:14 am

Hows that old song go? If the illusion is real, let it give you a ride.

#10 Dan on 09.19.09 at 7:16 am

Not too familiar with HELOCs but I had thought that a HELOC could be called in at short notice whereas a mortgage can not be called in. Anyone less ignorant care to comment? If (when) banks run short of capital, they’re probably going to come looking for ready sources of money.

A HELOC is normally a secured loan, not a demand loan. — Garth

#11 The Vulture on 09.19.09 at 7:36 am


“It’s All About Me, all for me, all because of me, always been about me and granite counter tops, steel appliances, on and on sings the bard’s prophetic song…”

“Know also this, that, in the last days, shall come dangerous and terrible times . Men shall be lovers of themselves and of money, covetous, haughty, proud, arrogant, abusive, blasphemers, disobedient to parents, ungrateful, profane, in-human, implacable, slanderous, licentious, brutal, in-human, wicked, Without affection, without peace, slanderers, incontinent, unmerciful, without kindness, Traitors, stubborn, puffed up, and lovers of pleasures more than of God: Having an appearance indeed of godliness, but denying the power thereof. Stay clear of them. For of these sort are they who creep into houses, and lead captive silly women laden with sins, and driven by desires ($$$$$, SEX, $$$) of many kinds: Ever learning, and never attaining to the knowledge of the truth. Now as Jannes and Mambres resisted Moses, so these men also resist the truth, men corrupted and perverted in mind they falsify the faith. But they shall proceed no farther; for their stupidity will be plain for all to see.” (Timothy 3,3)

And those whom have foolishly enslaved themselves to a lifetime of serfdom, debt and pain all to the idol of real estate worship and not a place of shelter, a home, a place to live in…May one gain a certain wisdom and your eyes become open to how you have been so deceived…..before it is too late…

#12 NOBODY on 09.19.09 at 8:24 am

I love when Garth gives advice.

Then again, once in a while he comes back with a “mea culpa” such as his “I sucked” post earlier this week.

Google ‘satire’. — Garth

#13 DaleFromCalgary on 09.19.09 at 8:31 am

“There is oil lease revenue (4 Wells) with this land to add to 4 wells on the 160 Ac we have now. ”

I’m confused about this. Mineral rights are separate from the land title and farmers selling land know enough to strip the oil rights out from the land sale, unless you got lucky and found a very stupid vendor. My mineral rights are on land I do not own.

If the wells are only paying $16,000 a year, they must be very low-volume stripper wells, or else the lease holder is paying a ridiculously low royalty. If it is the latter, Doug should join a freeholder’s association (Google it).

Or are you talking surface rights (the right of a minerals owner to access the land to extract them). This doesn’t seem right either, as $16,000 a year seems high for surface rights.

Either way, it seems one heck of a deal. You could even buy the land just to separate out the mineral rights, sell the land, hang on to the rights, and sit back and collect the royalty cheques.

Doug, can you specify if your wells are freehold and why the land owner is selling the rights?

#14 DG on 09.19.09 at 8:34 am

Interested to hear your thoughts on SW Ontario farmland, Garth. Spoke to a guy near Windsor who just did a deal with one of the solar companies. They are leasing one acre from him for the greater of $12k / year or 5% of the energy generated from the panels. The catch is they aren’t allowed to lease a larger amount of land without jumping through lots of regulatory hoops. Still, seems like with land in these parts going for around $2k / acre, that doesn’t seem too bad at all.

#15 miketheengineer on 09.19.09 at 8:41 am

Garth et al:

With the wealth of this country. We should all be living in McMansions.

The deficit is ballooning. Unemployment is sky high. Tax revenue is going down with a big splash.

Yet no one in the government has lost their jobs.

Why? Reduce all government employees by 5% till this mess is over. Then rehire what is needed.

Otherwise, everyone is going to suffer big time by: exessive taxes taken off their pay checks, to pay for a ballooning deficit. The average Joe is now broke. Food banks are going empty. The situation is CRITICAL.

Imagine the McMansion you could afford if the government took less taxes off your paycheck?

A reduction in government employees should have started already. Why it has not, blows my mind. What are they doing in Ottawa, Ontario and across the country. What is a balanced budget? When less money comes in, ie taxes base revenue, you cut to balance.

Now is the time to cut….NOW.

#16 T.O. Bubble Boy on 09.19.09 at 9:13 am

@ miketheengineer:

I think you’re missing a few things in your plan to simply fire government employees and solve all problems:

– You fire thousands of people, they all get EI Benefits paid by the government (i.e. more tax spending).

– You fire thousands of people, you lose the ~40% of their paycheck that comes back as tax revenue.

– You fire thousands of people, you have more mortgage writeoffs, and the banks get more Flaherty bailouts.

– You fire thousands of people, those food banks you mention will be even more empty.

If what you really mean is: cut wasteful spending, I’m pretty sure everyone could agree to that.

Getting rid of “automatic” raises (voted on by the members themselves) at all levels of government would be a start — no raises for 2-3 years in a row, and you’ve got your 5% savings. Same thing goes for all unions and any organization where everyone expects an automatic raise every year regardless of company performance / individual performance / general economic conditions.

#17 Live Within Your Means on 09.19.09 at 10:05 am

#16 T.O. Bubble Boy on 09.19.09 at 9:13 am

Agree, especially your last 2 paras.

#18 David on 09.19.09 at 10:19 am

4 wells on 160 Ac? 40 Acre spacing, that’s probably heavy oil, or shallow NG. I’m guessing SE Alberta to SW Sask?

I assume you mean your getting $16,000 per year for SURFACE ACCESS, so sorry Garth, he doesn’t get any of that crude. Plus, the wells will probably drain their reserves in the next 3-7 years, at which point the payments will stop.

You should see if you can figure out what type of wells they are, how long they’ve been producing, and what the current plans are. You could contact the ERCB in Alberta. They may not give you the info.

Either way, don’t buy on the basis of that $16 K a year lasting a long time, unless they happen to be oil sands insitu wells.

#19 jess on 09.19.09 at 10:31 am

What is predatory equity?

Predatory equity is a real estate investment scheme that operates as follows:

1) The real estate firm identifies municipalities with underutilized real estate assets.

2) The firm obtains equity from both private and public sources by promising a high return on investment (ROI). This equity is then typically leveraged with bank loans at values ranging from 60% to 80%. The returns are commonly referred to within the industry as opportunistic, an annual ROI > 13%. It should be noted that the annual ROI for the US stock market, when averaged over the past 90 years, is 10%; for the US bond market, 7%.

3) After purchasing the property, the firm works to raise rental income. The firm and its partners often see income go down during the first few years due to expenditures on capital improvements. Capital improvements are frequently used as a public relations tool to defend the firm’s actions in the community.

4) Rental units are recaptured from the local rent control ordinance and raised to fair market value using a two-pronged strategy. First, the firm engages in litigation against the local municipality and pertinent ordinances governing tenant-landlord relations in an effort to weaken their regulatory authority. Second, aggressive tactics are used to encourage pre-existing tenants to voluntarily vacate their units. Under a California law known as Costa-Hawkins, voluntarily vacated units may be brought to fair market value. Target turnover rates the first year for pre-existing tenants generally range from 20% to 30%, with a target of 10% for each year thereafter.

5) The firm and its partners sell the portfolio in five to ten years time after achieving a substantial increase on the annual rental income for the portfolio by replacing low-income tenants with tenants capable of paying significantly higher rents. This increase in rental income translates directly into profit margin on the initial investment according to a standard cap rate calculation. The firm may also profit on the front end of the scheme through acquisition fees charged at the time the properties are acquired on behalf of investors.

It is very important to note here that Page Mill’s business plan may differ from this model on one significant point. Rather than replacing tenants that have voluntarily vacated their units with tenants capable of paying higher rents, Page Mill may intend to demolish existing buildings or attempt to meet the threshold vacancy rate required for condominium conversions. A comparison of Page Mill’s portfolio wide vacancy rate of 24% with the 5-6% currently typical for the rest of the Bay Area rental housing market suggests this may indeed be the case. With 25% of all housing units in East Palo Alto under their ownership, Page Mill can easily meet the city wide threshold vacancy rate of 4.1% required for condo conversions under the local ordinance.

For more information on this topic, please see Gretchen Morgenson’s May 9, 2008, New York Time’s article on predatory equity. Unfortunately, predatory equity schemes have become common practice across the country in recent years.

What kinds of tactics are being used to recapture rental units?

As noted above, rental units are recaptured from the local rent control ordinance using a combination of litigation against the local rent control ordinance and a variety of aggressive tactics with pre-existing tenants.

On the litigation front, the company’s strategy is again two-fold. Page Mill has argued that rent increases allowed under East Palo Alto’s Rent Stabilization Ordinance (RSO) in previous years can be banked if prior owners did not exercise an increase in a given year. Second, Page Mill has distributed its holdings into a large number of shell LLCs in an attempt to qualify for an exemption in the RSO that applies to owners of four or fewer units.

The aggressive tactics used to encourage pre-existing tenants to voluntarily vacate their rental units include rent increases in excess of the allowable increase set by the City’s RSO, premature pay or quit notices, lease terminations, lease non-renewals, insistence on substantive changes in terms of existing leases, excessive late fees, unheeded maintenance requests, etc. Together, these tactics constitute a pattern of systemic harassment designed to replace low-income tenants with tenants capable of paying significantly higher rents.

#20 My_view on 09.19.09 at 10:37 am

Doug in T.O.,
Congrats on the house. BWV is a great area, hell I even tried to get in that area but was priced out. I lived/rented @ Gilmour & Annette for over a decade. From the sounds of your 4 bd detached home, 700k or higher sounds quite right for that area. 200k is a very nice chunk of change, but have you considered where your family will live after the sale? Buying back in that neighbourhood will be tough and you probably/most likely won’t be able to find a similar home for less. To rent a half decent place is easily anything north of 1500/mth considering the size of your family and wanting to stay in the same area. So maybe consider another part of the city or even out of the city where you really can stretch your moula. But you will give up a great neighbourhood walking distance to everything and just a short hop skip & a jump to the hub of the city (TTC), great schools and of course it’s BWV. But then again there are the tax free gains. My opinion, I would stay put, cause I love the area…..

#21 $fromA$ia "Garths Nugget Boy" on 09.19.09 at 11:05 am

Those like me who expected a correction for about 3 years now are tired of banging their heads against the wall.

Garth you might want to try a different angle then writing the same ol’ same ol’.

Yes, RE will correct.

All I care about is when, by how much and waht roll interest rates and upcomming inflation will play in the next 3 years.

I would be refreshing and interesting for readers here to see you post a personal hypothesis of the next 3 years and how RE prices, rate hikes and upcomming inflation will play on overal prices in RE.


We’re waiting…

#22 Dawn in Calgary on 09.19.09 at 12:06 pm

Scare-mongering to digest with my Corn Pops this lovely Saturday morning:


Still not too late to buy a home

But you’ve missed the lowest prices

By Marty Hope, Calgary Herald September 19, 2009

What’s going to happen to housing affordability?

Let’s just say that if you haven’t bought by now, it’s very possible you might have missed the bottom of the market.

For something like 24 months, builders have been cutting prices and offering other incentives, while lenders have been holding mortgage rates down at historically low levels.

At the same time, the federal government was dangling its own ownership incentives to first-time buyers.

But now the worm is turning. Builders are already announcing price hikes due in part to rising materials costs. There are also suggestions mortgage rates might begin to move up –nothing serious, but an increase, nonetheless.


#23 Basil Fawlty on 09.19.09 at 12:19 pm

The website financialsense.com has been running a series on the inflation/deflation debate over a few weeks. Foreign central banks are losing interest in US Treasury bills due to the massive increases in US quantitative easing. This is witnessed by the falling US dollar and indicates inflation.

#24 Savy#1 on 09.19.09 at 12:38 pm

Doug in Toronto…is this anything like your home?


Don’t see how these 80 to 90 year old homes are worth the asking price…yes, being close to the subway is nice…cause you won’t have a car because there is nowhere to park the car. SELL, take the money and run…BWV is not a place for young families….too expensive.

To others…
be very careful with the RE agents in BWV…they conveniently forget to mention a few things…there has been a lot of renovation work done in the BWV area (fluff and flips, decks, additions, dropped basement floors etc.) trying to make these old relics feel like a modern home…make sure any construction work was done to current building codes and done with building permits or else…who knows what you are getting….perhaps a bigger liability than just the mortgage.

I can’t believe some people get into bidding wars on these dinosaurs. In the spring of 2007, we had an agent show us a home where the newly built deck encroached upon the neighbor’s property….the agent had the nerve to say that the neighbor’s don’t mind…yeah right…put it on paper pal! Why in the world would I bid on that! Face it, the BWV lot’s we just too small…and that was 80 years ago..post WW1. Watch out for old buried fuel oil tanks and coal burning furnances with asbestos in BWV.

#25 Keith in Calgary on 09.19.09 at 1:10 pm

#22 Dawn in Calgary……

I sent Marty Hope an e-mail as a result of that article, asking him why he didn’t allow comments in his “news” articles anymore, and suggesting that facts, logic and reason posted in a comments section would only piss off Canwest’s last remaining advertiser of note, the REIC, for whom he actually worked. Told him he had a lack of journalistic ethics and was writing advertising copy, not news. Doubt he’ll have the cojones to even reply.

Great cartoon BTW Garth………almost spit my coffee out all over my keyboard I was laughing so hard.

Those folks who bought here in Calgary are truly greater fools. The guy succumbed to the honey trap and as a result they will lose 6 figures large when the shit hits the fan again.

#26 Men With Hats on 09.19.09 at 1:11 pm

Doug is NOT an oil producer of any kind .I don’t care if he has one hundred wells on property he controls .
He may get right-of-way money (surface rights) from an oil co. but that is the extent of it .
Alberta has not given out mineral rights since 1910 .
Oil could go to a zillion dollars a barrel and it wouldn’t count for two thirds of five eighths of FA to Doug .
Average right-of-way payment is $1200.00,per annum .
Payments do not increase with the cost of a barrel of
oil .
It is a repidly depleteing asset .
Thought you’d know this Garth .

I did not suggest he had an accelerating payment schedule, just better loan collateral. — Garth

#27 X on 09.19.09 at 1:40 pm

2020 until US home prices reach peak again…


#28 Jmack on 09.19.09 at 2:45 pm


Or a million for a lot in deep cove?


#29 Schroedinger's Bull on 09.19.09 at 2:58 pm

If they have 4 oil wells with separate surface leases, it isn’t crazy to expect 4 x $4000/annum lease rental revenue. Seems fairly in line with what I’d expect, especially if they were negotiated or amended 2-4 years ago.

#30 Schroedinger's Bull on 09.19.09 at 3:01 pm

David, I should also mention that surface lease rentals continue after the crude stops flowing…they are usually payable until the well is reclaimed, and I know from personal experience that wells are rarely reclaimed until it’s necessary…

#31 Not Garth on 09.19.09 at 3:27 pm


Vancouver slowing. Markedly.

#32 DaleFromCalgary on 09.19.09 at 3:47 pm

“Average right-of-way payment is $1200.00,per annum .
Payments do not increase with the cost of a barrel of
oil . It is a repidly depleteing asset .
Thought you’d know this Garth .
I did not suggest he had an accelerating payment schedule, just better loan collateral. — Garth”

I’d still like to hear from Doug, but the more I think about it, the more I’m convinced he has confused surface rights with mineral rights. Surface rights are not collateral for anything, and should not be relied on for income. They last only as long as the oil company needs access to the site and are not connected to royalties paid for the oil. It doesn’t matter if there are 1,000 barrels or 1,000,000,000 barrels under that land, the surface rights rent stays the same.

I own mineral rights and no one in their right mind would be selling them with the land today. They are a separate title and even a stripper well would bring in more than $16,000 a year. My average well, drilled in tight sands in central Alberta, is $22,000 per month in gross royalties, although of course that is not the netback. (And I am a small investor; the Seven Sisters probably wouldn’t bother with such wells.) Whether to buy the farmland or not is a separate decision and should not be based on rental income.

Land homesteaded before 1910 in western Canada included mineral rights except coal which went to the Crown or the CPR (now Encana). Petroleum wasn’t worth anything in those days. Until oil was discovered in 1947 in Alberta, it didn’t matter if the mineral rights were included with the land at time of sale. After that, mineral rights started to be separated out on freehold land (as opposed to Crown land owned by the government). When oil was $10 per barrel in the 1980s, you could still buy mineral rights cheap but once it started to climb up, everyone held on and now they are only leased as a rule.

#33 rory on 09.19.09 at 4:45 pm

#97 Public vs Private from yesterday, you said:

“In contrast, those public sector tortoises count on their “decent” salaries, pensions and perks, and relative job security to get them through the boom and bust years, and to get them “slowly” to the same point down the road that that hare is heading for – financial independence.”

Ever hear of compounding (going parabolic, I really think so) …that is where your logic takes you …nothing ever goes back to the mean in gov’t …so what your really saying is we are creating a bubble in gov’t salaries and pensions to be paid for by the same private workforce you scoff at ….hmmm …already gov’t workers make 7 to 40% more then equivalent private sectors jobs and that was back in 2006.


As to Mikey, no we should not reduce the size of gov’t …we should just slash all gov’t salaries and pensions by 20% …cheap and fixes a multitude of problems…hey if the G employees don’t like it they can get a job in the private sector …anyone want to guess how many takers there will be.

BTW, PvsP …I too always laugh when I read statements like yours.

#34 Repatriated Expat on 09.19.09 at 4:57 pm

Re #15 Mike the eng

Listening to Michael Campbells radio show yesterday on CKNW, he made a comment about how in the 70’s there were more civil servants working for the Department of Fisheries than there were fishermen.

Today it’s the Defence Department, again apparently more civil cervants than solidiers.

http://www.cknw.com/other/audiovault.html , Sat Sept 19th 8:30 to 9 am.

#35 rory on 09.19.09 at 5:19 pm

The high cost of Gov’t…

“Compensation increases are why spending goes up every year with no perceptible increase in services. If these compensation packages were bench-marked to the private sector they would actually fall substantially. The CFIB estimates compensation costs would fall 19% in education and almost 25% in healthcare.”


Did you catch that …compensation up but no increase in service which means increased taxes for the same performance….maybe my 20% cut idea was too low?

And a real novel idea …benchmarking and benchmarking to the people that pay them …wow talk about rocket science …NOT.

#36 taxpayer like you on 09.19.09 at 5:48 pm

31 Not Garth

Your link shows 5 days of activity. you cant draw any
conclusion over that short a time.

#37 Rob in NVan on 09.19.09 at 6:49 pm

‘worth checking out:


Scroll down to “welcome to Kanada” for a humorous and enlightening commentary on the CMHC vs. govt. of Canada accounting practices and the potentially nefarious goals of Mark Carney . . .

“His idea is to lever up all the lower and middle-class people in the country into overvalued real-estate and then orchestrate a massive margin call, leaving them penniless and dependent on the state for occupation of their homes”.

Be sure to check out the associated “comments” for a Garth Turner name-drop.

#38 Gregor Samsa on 09.19.09 at 7:17 pm

Working for the public sector has become a racket. This is evidenced by the the fact that you MUST know someone on the inside to get in. It’s like the mafia, corrupt to the core, and once you are in, you are in for life.

Here is what you get in the private sector today: bare bones benefits, basic dental, health etc. Often you still pay premiums for the benefits plus 2 or 3 weeks vacation. If you are lucky, you will get an RRSP matching program where the company will kick in a bit of money to YOUR retirement fund. No pension. You work 40+ hours a week, every week.

Here is what you get in the government today: a gold plated pension, 100% funded, gold plated benefits – the best dental, health, vision, drug, etc coverage you can get. 3 to 5 weeks vacation. On top of this vacation you get things like paid volunteer days, fridays off, sick leave, stress leave, walk the dog leave, I don’t feel like working today leave. You get the very best equipment. A government office a friend of mine works in recently had their 2 year old 22″ LCD monitors replaced with 24″ LCD monitors. The kicker is that all they do is surf the web all day.

Oh and lets not forget the pay! Not even including the benefits you get a base salary that is over and above what the private sector counterparts make. Six figure salaries in the government are very common. Engineers that work for the government get something called an “engineering bonus” of several thousand dollars a year just for gracing the government with their presence. I guess nobody told the government that private sector engineering jobs hardly exist anymore. If you travel with the government you stay at the best hotels, and get crazy allowances and bonuses just for traveling! And they travel a LOT. Conferences, training, you name it.

And with your high benefits and salary, will you work hard? Hardly. At the offices I know of, they could have a 50% staff reduction and still not be as busy as my private sector office. Yet people are still being hired! One rumor that was passed on to me is that managers are padding the numbers so that if cuts come down, only the newbies get the axe.

It makes me sick.

You might wonder why none of this comes out publicly, why there are no whistle blowers. Greed and fear are the biggest factors. It is made clear that whistle blowers would “lose it all” – the easy job, the pension, the benefits. Also, any attacks prompt a circle the wagons response from management and the unions. Denials abound. I wonder how large Canada’s deficit will have to get before we see a single one of these leeches lose their job…

#39 new name = new gig on 09.19.09 at 7:50 pm

Garth I apoligize for my past I have been converted. After reading the Georgia Strait real estate listings this week and thinking when have I ever seen 1,000,000 dollars for a house in mount pleasant area and mounting debt …..new taxes and mother in laws in China being blamed for the real estate bubble there. Well, I think the we have hit the ceiling. Inflation….BS…watch the downward spiral. Deflation coupled with increasing rates for the next few years….yuck. Yes, it can be done a deflationary cycle with escalating rates…… lower home prices will feed off each other and the asians will scramble to find a market for their Walmart goods. Severe contraction ahead as well as higher rates and cash is king – businesses/govt’s are starved of it. If you’re a public employee expect severe cuts to the govt payroll and services. If you build houses…..start building an Ark….you’ll need it for the 3 year to 5 year Tsunami on new construction.

good luck

#40 prairie gal on 09.19.09 at 9:37 pm

I have to chime in here. I am a public servant in Saskatchewan and I can assure everyone that my wage is nowhere near six figures and I am at the third-highest level for in-scope employees, albeit at the starting wage for said level. Folks at my level can expect to top out at $80 k. I have an engineering degree and a law degree and my background is fully utilized in my position. There is nothing ‘gold plated’ about the working conditions. I am often expected to come in on the weekends and find myself at the office (along with my superiors) until 7 pm or later. No overtime pay for that, by the way. Its just part of serving the public on priority issues.

Fridays off are UNPAID so paycheques are based on 76 hour pay periods = less money in the bank.

We work our a$$es off. There is a ton of work to do. No we don’t have to chase down clients or schmooze for more work – that leaves more time for more, you know, actual WORK.

This is not a complaint. The only gripe I have is that all our progress (I work in policy) can go up in smoke when the opposition gets elected and decides they want to do it THEIR way. But such is life in government. Inefficiency is a product of the political process, not the (powerless) public servants.

#41 Arthur Kurwa on 09.19.09 at 10:03 pm

That home in Vancouver for a million. I can’t believe it. I lived in Vancouver. It’s nice, but not that nice. Once you move there, you quickly lose your ‘tourist goggles’ and start living in a city. You soon see the bumper in front of you and forget gastown and the mountains. Only a few places in this world are dropping down a million….Vancouver is not one of them IMHO.

#42 Shawn Allen on 09.19.09 at 10:20 pm

Garth says house prices will fall when interest rates rise. We can all agree on that but it seems that interest rates are staying low for a while.



CMHC has for some years been allowing people to buy houses that they really can’t afford. Many people are on a tight budget to make their mortage. (Or an impossible budget) If one spouse loses their job it’s often game over, the house needs to be sold, possibly by foreclosure. (Well, maybe they hang on with EI and credit cards for a while… but that is temporary)

So let’s keep a close eye on mortage delinquency rates:

As I posted recently in Canada the 90 day delinquecies at end of June were only 0.43%, so hardly any.


In the U.S for that same June 2009 residential loans were a staggering 8.84% delinquent. Now this is 30 days delinquent so naturally giher than the 90 day figure for Canada. But consider a year earlier they were “only” 4.45% . In June 2007 they were at 2.32% delinquent.


So the point is, delinquencies rise very rapidly with unemployment.

Canada’s unemployment problem is not that old. Give it another few months for the EI to run out and for room on the old line of credit and credit card to run out.

Then watch these homes pour onto the market and the prices fall. Especially if there are bank foreclosures. They will drop the price to sell fast.

The thing is, in the U.S. the house prices droped a LOT despite low interest rates. They dropped in large part due to foreclosures and unemployment.

Could that happen here? Is it inevitable? Keep an eye on those delinquency stats.

#43 Apologist on 09.19.09 at 11:11 pm

Sorry Rory, I don’t think that PSP ever spoke about creating a bubble in public sector compsensation packages . Nor is the creation of a bubble the logical conclusion of his statement.

Hey Rory, sounds like the public sector is the gravy train. Better get on board. Maybe you can be the recruiter at university campuses, letting all those grads know that they will make half of what their private sector counterparts make at the start, and it will take them 5-10 years just to catch-up.

Gee, if I remember correctly, all those newly minted lawyers, engineers, planners were all fighting over those prestigious public sector jobs. That’s right, they were shunning all those Bay Street six figure salaries so they can make half as much working for the feds or provinces.

Lol. You are too funny.

Anways, here is another little tidbit of information from the trenches that will ubsdoubtedly get your blood boiling. Even when the feds or provinces announce cuts, there are never really any substantive cuts. If they announce a 5% cut, the cuts are made through attrition and the elimination of positions that have been on hold, waiting for the “right” candidate.

And by the way, public sector compensation packages will be trimmed (eg. reduced benefits for spouses), but they will never be trimmed to the extent you would like. You can cry unfair all you want, but it is what it is, so climb aboard.

If you aren’t a taker on that offer, you enjoy the private sector. Its not like the private sector never needs taxpayer funding to protect its jobs and uncompetitive sectors. Its not like GM or Air Canada has needed government assistance. I guess its because all those private sector employees were working so hard…

#44 Greg ... on 09.20.09 at 1:04 am

Parkinson had something to say about work in government departments that, from experience, seems to be quite true.

The more staff (or especially hierarchical layers) there are in the place the less actual work seems to get done, bulk of time spent on internally generated process rather than any genuine output of interest to either politicians or the public.

For anyone who works in government (or not) Parkinson is a must read.


#45 Mel Eager on 09.20.09 at 7:51 am

Re: Million Dollar Shack

Man, having been lucky enough to be a long time owner, or inherit property in one of the Canadian Bubble Zones is akin to winning the lottery.

Kudos to the Sellers who realize these once in a lifetime opportunities and are selling their shacks. In our example above, the shack seller (assuming he is not just a bubble head flipper) is now a millionaire, a true millionaire, with cash in hand! Set for life…..

I remember as a little kid, my perception of what a million dollar house looked like, it was a Mansion, on a huge lot, with a 4 car garage with sports cars inside, with a limosine out front, with butlers, garderners, cooks and maids and such.

I still believe this. If I am ever fortunate enough to be able to afford to spend $1 Million on a home, I better be getting a mansion for it!!!!


#46 Joesph on 09.20.09 at 8:27 am

Amazing. I live in Vancouver, didnt know that madness had taken over. Oh well, only a few more weeks now before “Swine Flu” hits and the madness will be over.

Can’t wait to see what Brad Lamb has to say the day after.

#47 robert on 09.20.09 at 8:44 am

#37 Rob in NVan

Whether this can be dismissed as typical “conspiracy theory” will be debated ad nauseum. However people overburdened with debt are, in my view, unlikely revolutionaries. Is it any accident that debt serfdom is on the rise? The true revolutionary in today’s society is one who eschews debt and overconsumption. Governments the world over know this and are predictably trying to re-ignite animal spirits through various misguided reflationary policies and media psy-ops. Can we borrow our way to prosperity? There is no record of such efforts ever succeeding in the past: see Tulip Mania, South Sea Bubble, 19th century canal and railroad bubbles, wildcat banking bubbles, GD1 (1873-1895); 1920’s Florida land bubble, housing bubble, tech stock (radio) bubble, GD2; 1970’s commodity bubble, 2000 internet/tech bubble; current housing bubble, stock/commodity echo-bubble. Don’t forget some of the nasty wars that punctuated these various manias. Do we ever learn?

#48 Barb .. a reader in Calgary on 09.20.09 at 9:35 am

#40 prairie gal “I am a public servant”

prairie gal, my sister-in-law and niece work for them too. Their salaries, benefits, etc. seem pretty ordinary. Good, but ordinary.

The sister-in-law took retirement after 35 yrs. at the top of her range (she worked very hard, too) at 60 her pension is not gold-plated and they live an ordinary life. The last time we compared salary about 20 yrs ago, she had gone up through their system for 15 years but was making pretty much exactly what I made in the private sector in an office job I’d just started.

I had a different (now “ex”) sister-in-law who had also worked for the gov. for about five years, but she felt her government income was too low plus other complaints. She had always wanted More, More, More, Faster, Faster, Faster,. So she moved on to the Private sector where she’s been for over 30 years. Private sector gave her the glamour, prestige and income she craved, (which, by the way, is one reason why that one’s an “EX” sister-in-law now).

So PvP’s comparison struck me as being so true as those two gals Public vs Private fit perfectly the “tortoise vs hare”.

#49 Live Within Your Means on 09.20.09 at 10:44 am

I was a silly servant as well – unionized, but we did not have the option to strike. Our agreements always lagged 2-3 years late. By the time a settlement was reached – between 2- 3% increase, it had already been eaten by inflation. Sometimes we’d get something in a lump sum, but then we had to pay more tax on it. We also had to take a 3% deduction on our wages and unpaid days off. Managers (non-unionized) got the ‘anticipated’ wage increases immediately, while unionized ones waited for 2-3 years. Yes, we made higher wages, at that time in comparison to the private sector, but, as Prairie Gal said, it was darn frustrating when a new govt. came in and many of the policies changed. Also frustrating to work with/under those with whom the Peter Principle applied.

I also take offence with #38 Gregor Samsa on 09.19.09 at 7:17 pm

“Here is what you get in the government today: a gold plated pension, 100% funded, gold plated benefits – the best dental, health, vision, drug, etc coverage you can get. 3 to 5 weeks vacation. On top of this vacation you get things like paid volunteer days, fridays off, sick leave, stress leave, walk the dog leave, I don’t feel like working today leave.”

I paid into my pension & AFAIR, the govt matched my contribution. I did not have the best dental plan & I contributed to it. Actually went to a Dental School for work as my dental plan only covered so much. My eye care plan paid for a bi-annual checkup & $100. towards glasses bi-annually. If you have any idea what glasses cost today, you’ll know that’s a laugh & I don’t buy ‘designer’ ones, but I do need bi/tri focals. Yes, I pay $5. per prescription only. Many large private companies offer the same plans.

We didn’t get Fridays off or volunteer days off. We worked extra time each day so we could have 1 day off every 3rd week. Yes we rec’d better vac. leave than many private sector jobs. Most European countries provide far better vac. leave than Canada. Do we always have to strive for the lowest common denominator. You sound like a very angry person. Maybe you’d be happier living in Malaysia or a similar country

#50 Jan Etter on 09.20.09 at 11:07 am

#33 Rory, #38 Gregor Samsa

With regard to the theory that slashing all government workers and pay/benefits is the magical solution, this does not account for the distinction between unionized and non-unionized employees, professional vs. non-professional, salaried vs. contract workers, senior management vs. front line, federal vs. provincial vs. municipal depending on the location in Canada etc. Many are paid more than their private sector counterparts, others are paid less, and in some cases significantly less, than their private sector counterparts. I’d be interested to see if there is a study that compares employees based on these distinctions.

In some cases like public sector CEOs and certain professionals whether or not to cut those salaries is in broader economic terms not nearly as important as whether or not measures to regulate the private sector salaries of the equivalent positions to reasonable levels relative to the average worker (like in Japan):



#51 taxpayer like you on 09.20.09 at 12:32 pm

I feel I have to weigh in on the public v private debate. Quickly reviewing, it seems we have been comparing public sector union v. private sector union employment. I
am in small business. When hiring somebody, I explain it
this way:

– This is not union
– This is not government
– This is not oil patch
– This is not Vancouver

Any of the above counts for at least 20% in pay/benefits.
To make up for it, I try to be flexible for doctor appts
etc., give a christmas bonus, ASK if you can work
overtime, ask for volunteers for any out-of-town jobs (I’m usually stampeded with volunteers for a road trip)
and generally try to be a good guy to work for.

Now somebody mentioned they dont feel their pension is
gold plated. Well, from my standpoint it is, simply
because it will be there, in a certain amount, at a certain
time. It’s backed by some level of government (ie the taxpayer), and I already pay for half of it!

And I’m tired of the tortoise v. hare analogy. The only
reason to go into business is to do better than what you
could as an employee (private or public). There is no
even-ing out at the end of the day. Granted there are risks in business, but if you survive the first few years, you should finish well ahead of the average employee.
Otherwise you are doing it wrong.

#52 Elle on 09.20.09 at 12:43 pm


Either I need to get a life….. or is this blog a little slow this weekend? So glad to find some of you here, I keep havin a look…..48,……49…. Are we just too busy to comment, not interested or Garth are you not checking us out fast enough? And Garth, you know you had me at “Buy a generator. Now.”, but those last two paragraphs in your introduction have a definite sexual tone that really doesn’t go well with bacon & eggs & coffee on a sunny Autumn morn! Just call me cranky!!

Give us more of a peek into “The Dream” ………you know, when we actually see housing start to be affordable again ………….A lot of great people on this blog do have housing that they just love, terrific, but so many of us have sold and are waiting and stressing………we’d really like to be stacking that pile of wood in our own backyard and digging a garden etc, …. and definately NOT still renting!

well that’s me for today…

#53 Jmack on 09.20.09 at 1:11 pm

Don’t hate on the fellow worker for having better than yourself. If you don’t like your situation then change it. the only person that cares about your real situation is you, and your family, So rather than hate on the guy who has an extra week vacation, or a pension plan, go and get it for yourself. “It takes all kinds”

Average time off

Italy 42, France 37, Germany 35, Brazil 34, Britain 28, Canada 26, Japan 25, USA 13.

#54 rubberduckie on 09.20.09 at 1:33 pm

As a Vancouverite, I feel almost embarrassed to have our grotesquely high real estate prices trotted out for all to see!

#55 Marina on 09.20.09 at 1:47 pm

About those over $1 mln house in Van – some people buy house to destroy it , then to build a new house on this land and to sale this property for higher price. I know family who makes this kind of business; they just built a house which cost them about $ 150k only, the land is located on Bathurst&Lawrance area in Toronto. Estimated gain when they sell this house is $ 200k. It will be on sale pretty soon.
So those who bought the Van house may not be greater fools as the RE bubble can rise for another 2-3 years easily.

#56 TJ on 09.20.09 at 2:31 pm

Gluskin Sheff’s David Rosenberg is NOT buying this stock market – remember, bear market rallies “are to be rented; never owned…”

Imagine that six months after the depressed lows we have a situation where:

• The trailing price-earnings ratio on operating EPS is 26.5x. At the October 2007 highs, it was 18.8x. In addition, when the S&P 500 is trading north of a 26x P/E multiple on trailing operating earnings, history shows that at these high valuation levels, the market declines in the coming year 60% of the time.
• The trailing price-earnings ratio on reported EPS is 184.2x. At the October 2007 highs, it was 23.4x. In fact, just prior to the October 1987 crash, the P/E ratio was 20.3x (not intended to scare anyone).
• The price-to-dividend ratio is 53x, where it was at the 2007 highs. Again, the market is trading as it if were at a peak for the cycle, not any longer near a trough. Once again, and we don’t intend to sound alarmist, the price-to-dividend ratio just prior to the 1987 crash was 12x, and at the time, the S&P 500 was viewed in many circles to be at an extended extreme.

Bullish analysts like to dismiss the actual earnings because they are “depressed” and include too many writeoffs, which of course will never occur again. Fine, on one-year forward (operating) earning estimates, the P/E ratio is now 15.7x, the highest it has been in nearly five years. At the peak of the S&P 500 in the last cycle — October 2007 — the forward P/E was 14.3x, and the highest it ever got in the last cycle was 15.4x. So hello? In just six short months, we have managed to take the multiple above the peak of the last cycle when the economic expansion was five years old, not five weeks old (and we may be a tad charitable on that assessment). As an aside, the forward multiple on the eve of the 1987 stock market collapse was 14x and one of the explanations for the steep correction was that equities were so overvalued and overbought that it was vulnerable to any shock (in that case, it came out of the U.S. dollar market). It certainly was not the economy because that sharp 30% slide took place even with an economy that was humming along at a 4.5% clip.

In other words, valuation may not be the best timing device, but it still matters. If the S&P 500 was in a 700-750 range, de facto pricing in zero to 1% real GDP growth, we would certainly be interested in boosting our allocations towards equities. But at 1,060 and over 4.0% GDP growth effectively being discounted, we will be spectators as opposed to participants, understanding that the key to success is to NOT buy at the peaks. So the strategy is to sit on the sidelines, be selective in our equity choices, and wait for the correction to come or for the fundamentals to catch up with this overvalued, overbought, overextended market. Remember, the reason why the tortoise won the race was because the hare got tired.

One more thing, when people look back at this period, they are very likely going to ask themselves why it was that they never paid attention to the volume data, which, like the bond and money market, never confirmed the veracity of this very flashy bear market rally. We reiterate, Japan enjoyed four of these 50% power surges in the context of a market that is still down over 70% from its highs of two decades ago. So remember, rallies in a bear market are to be rented; never owned. For those that never took the opportunity to get out at the lows today have this glorious chance to do so at much better prices, but the question is whether greed has overtaken their long-term resolve, especially now that Gordon Gekko is making a return to the big screen.

“Breakfast With Dave”

#57 Coho on 09.20.09 at 3:34 pm

#38 Gregor Samsa,

During boom times when many private sector jobs come with all the bells and whistles, gov’t jobs don’t look as good as they do during economic hard times such as now. But now, as things are getting lean, there is grumbling coming from some employed in the private sector.

Granted there are wasteful practices in any situation where there seems to be an unlimited supply of capital either from shareholders to big corporations and banks or from the taxpayer to the public sector.

I wish people wouldn’t begrudge others getting reasonable compensation for their toil because we all know the vast amount of exploitation that goes on in this world to the degree that over half the world’s people don’t have access to enough food, medicine, decent shelter, or clean water to drink.

Common folk are just wage earners. I don’t understand such sour grapes from one working stiff who pereceives the other as better off. Aren’t we splitting hairs? What about the obscene amounts of money the uber rich have and never seem to have enough while others are deprived of the very basics for reasonable comfort? Perhaps our focus should be on them.

As things continue to degenerate, your neighbour who works or DID work for the gov’t will be just as bad off as you and everyone else in the neighbourhood.

#58 Marina on 09.20.09 at 3:59 pm

Freind of freind from Vancouver said what is going on in RE market over there. Many chineese coming from Chine just to buy properties and then they leave. One chineese woman- realtor mentioned that one wealthy chineese bought more than 30 (!) houses at one time when he came to Van. He is going to rent out all of them though one company. Moreover, charter flights have been orginized lately directly from China to USA for RE investors – chineese come and buy properties in states and leave. Many of them. Many of them have really big money these days.

#59 rory on 09.20.09 at 5:28 pm

#50 Jan Etter…

Who cares who does what …20% for every Tom, Sick & Sally …you a bureaucrat ‘cuz you sure can muddy a stream in a hurry.

#57 Coho

Did you read what #51 TLU said …so let us pretend that any Gov’t department had to run like a private business.

Coho, you get to play the owner. That is you have your money in this game…so to keep it you need to make a profit. If you do not then you lose and become poorer…easy right.

So tell me …would you run your little slice of heaven like it is run now or would you change a few things like salaries, # of employees, pensions, rail against taxes, and gov’t paperwork.

Remember it is your business, your money so you can pay yourself whatever you want.

Let us all not go to where you cannot compare what the gov’t does to what privates does. Yes, we can …just pretend the value of what you do can be marketed and sold …so again if you had to make a profit could you…oh and your revenue just shrank by 25% (recession you know)…so again …what would you do?

P.S. – people like ‘Taxpayer Like You’ has tough decisions to make …to G employees – it is just another day….not bitter …just trying to get people heads out of their ass.

P.S.2 – just thinking …this is not an inter generational issue it is going to be a issue of gov’ts vs the rest. At the end of the day it needs to be the privately employed citizens that at the very least have parity with the civil service…at the very least …just look at any country that is not true …Congo, Niger and literally tens and tens more …gov’t and civil service well looked after …citizens dirt poor, homeless, unsafe, unsanitary …read the book “Planet of Slums” to see for yourself.

Gov’ts have the guns and the power.

#60 rory on 09.20.09 at 6:00 pm

Just received this from a friend …

http://discuss.50plus.com/ipb/lofiversion/index.php?t22916.html and http://vancouver.en.craigslist.ca/van/rnr/1373111303.html

You think the boomers and the others Gen’s had a fight on the other day …this should cement the fact that I think all Canadians want to keep costs contained somewhat …I think this would not qualify.

#61 Future Expatriate on 09.20.09 at 6:33 pm

#58- Yes, right, rich Chinese are going to Vancouver in droves and buying up everything in sight… especially when they can buy DOUBLE THE PROPERTIES in San Francisco, Hollywood, or San Diego for the same amount of money… or quadruple if they limit themselves to short sales and foreclosures.

Yep… Chinese are going to the most expensive real estate market on earth… sure they are.

#62 ottawa pete on 09.20.09 at 7:09 pm

And so it begins….

Next door neighbour has defaulted – sheriff’s eviction notice posted to the front door – conveniently in both official languages…they moved out a month ago or so – Jingle Mail?

#63 mikef on 09.20.09 at 8:31 pm

Well said No#60 Future Expatriate.
Not to mention better weather,lower taxes and government hassle.

#64 dd on 09.20.09 at 8:44 pm

.#174 Eduardo

“#165 dd – Your income is where you’re wrong”

If you use average avg income you should use averge house price then. I am using median wages compared to median house prices. This makes a difference. So my numbers are not overstated. Futhermore these numbers do not factor in the unemployed. Avg or Median will have dropped.

#65 dd on 09.20.09 at 8:51 pm

#174 Eduardo on 09.17.09 at 10:25 pm

By your calculations …

(average) family income is 98k compared to average house price in Calgary (August 2009) @ $454,000 = 4.6x.

Again you must compared apples to apples … not averages to median

#66 dd on 09.20.09 at 9:31 pm

#55 Marina

..So those who bought the Van house may not be greater fools as the RE bubble can rise for another 2-3 years easily…

Speculation is never easy. There is more downside risk than upside potential at this point. When everyone wants to buy real estate … it is time to sell.

#67 Coho on 09.20.09 at 9:40 pm

#59 rory,

You’ve made some good points. My last comment in my previous post alluded to the fact that there will be belt tightening everywhere and we’ll all basically be hand to mouth as the global economy continues to unravel.

I don’t think public employees will have gold plated pensions…they like many others may not have one at all because the country will be bankrupt.

I agree that gov’t could be run much more efficiently and make much better use of the money it collects. But, with big government we get a big bureaucracy and money gets chipped away at going through many departments before it gets to the place where it is needed.

Many people I know work for the local municipality. They gave me an example where the municipality came in way under budget and they felt good about it, but the policy among the high ups was to spend it all because if they didn’t, then the amount they saved would be held back by the provincial government the following year, whether they needed it or not.

I think the whole culture in gov’t must change, but we all know how tightly onto the status quo our policy makers are holding onto. Indeed the bureaucrats/politicos will keep in place come hell or high water their perks and pensions, but the gov’t “grunts” will be suffering too. Don’t worry, there’ll be plenty of misery for everyone except the top 1%.

You want guaranteed income in the future, then become a cop/paramilitary. The gov will be hiring lots of these to protect the politicians and few remaining wealthy from the outraged and disenfranchised majority, especially when the facade of democracy is no longer needed.

#68 Jan Etter on 09.20.09 at 9:56 pm

#59 Rory – What seems muddy in your mind is my attempt to point out what I thought is obvious – that you can’t lump all public sector employers together and paint them with the same broad brush. Having worked in both the public and private sectors, I can speak from personal experience how much extravagance, waste and outrageous compensation there was in the private sector employers I worked for and with, as compared to the public sector employers I have worked for.

#69 FTHB (forget that house buying) on 09.20.09 at 10:30 pm

.#57 Coho on 09.20.09 at 3:34 pm
well said, keep spreading this message.

#70 FTHB (forget that house buying) on 09.20.09 at 10:37 pm

Here’s a similar house for 25% the cost of the Vancouver home (but this one is in Ottawa)

#71 Eduardo on 09.20.09 at 10:51 pm

dd – You’re using a Calgary house price to an Alberta average. Please compare apples to apples. Average Alberta house price is WAY less than the average Calgary price.

#72 rory on 09.21.09 at 2:16 am

#66 Coho …

Hi five dude or dudess …

#67 Jan Etter

Jan, why can’t I lump everyone together …everyone gets to suffer equally …seriously I do not understand why you have to group …if you are concerned about the lower level earners the tax code will minimize their hurt.

As to the private sector being as wasteful …agree 100% …the point being the marketplace (in a world where the big G in not interfering) will regulate the private side …who regulates the G side …so should the gov’t lead by example or follow.

P.S. – the govt mandates what the minimum wage is and a lot of Canadians work at that wage …does anyone know of any examples of where a govt employee, part time, student, etc, works at the min wage …I say none…please someone tell me that I am wrong.

#73 rory on 09.21.09 at 2:29 am

#69 FTHB (forget that house buying)

The link goes to a Realtor that has B.Eng behind his name …what is a B.Eng anyway …is it an engineer that could not get to be a P.Eng (so failed) …and why would I buy a home from a guy that has this designation…is it a mark that he actually knows something …does this mean this is the only gig he could get or it pays more then a B.Eng or does it mean exactly nothing as in another meaningless pseudo professional designation in the field of RE…look at me I am a B.Eng selling RE …too funny.

#74 FTHB (forget that house buying) on 09.21.09 at 7:44 am

Rory, you liked that B.Eng, here’s one with a Ph.D.! (shows you were the $$ is to be made eh?)



#75 Gerard on 09.21.09 at 8:30 am

Your market reminds me so much of Australia it is scary.

Safe Banks, Natural resource exporter and property prices that have for the most part held up.

I think all Canadians should watch Australia and visa versa

#76 dd on 09.21.09 at 8:50 am

#70 Eduardo

That is what I was doing … looking at Calgary house prices. Please reread my org email before you start your next feedback.

#77 Investor on 09.21.09 at 12:40 pm

Peak oil will only happen if there is no technological breakthrough. Judging by history there should be a break through.

Supplies are brimming on both sides of the Atlantic. U.S. distillate fuel inventories, which include heating oil and jet fuel, are the highest since 1983 at 167.8 million barrels, according to the Energy Department. U.S. gasoline supplies are 2.2 percent greater than they were in late May, the start of the peak-demand summer driving season, at 207.7 million barrels.

Gasoil stockpiles, the European equivalent of heating oil, near Europe’s refining hub of Rotterdam reached a record 3.03 million tons (23 million barrels) on Sept. 10, according to PJK International BV of Oosterhout, the Netherlands.

More than 60 million barrels of fuel is stored on tankers offshore, according to the IEA.

#78 Bill-Muskoka (NAM) on 09.21.09 at 12:59 pm

Shades of Forrest Gump ‘Stupid is as stupid does!’ Is that the new catch phrase for Vancouverites?