Buy now, or never

The 'Sycamore' on paper. 36 feet never looked so wide.

One night last week, I’m told, 50 young couples were camped outside a sales trailer in the Toronto burb of Milton. It was unseasonably cold.  And uncommonly stupid.

The trailer belongs to mega-builder Mattamy Homes, which is in the business of giving first-time buyers ‘affordable’ houses with all the trimmings. The event was a new release of homes on lots ranging all the way from 34 feet wide to an elephantine 36 feet. Prices, $316,000 to $426,000.

The houses are not built, of course. Buying one is consequently a leap of faith – as buyers found out last year when area real estate values crashed and yet trapped couples were required to close on their new homes. Meanwhile within two miles of this trailer there’s a slew of homes for sale that actually do exist – resales, erected by the same builder. But ya know kids. New, new, new.

Why camp out, though? Why stay in the cold all night, just to be sleep-deprived and zonked when you make the biggest purchase of your life and walk into 35 years of debt?

Simply because we’ve entered a new phase of the bubble. The last one – or damn close to it. This is a moment I have seen before in previous booms, when the endgame is marked by one overwhelming sentiment: Buy now, or buy never.

This is a line being used increasingly by industry hucksters, builders and marketers. They breed fear in young hearts that prices will only continue to rise, shutting the timid out ‘forever.’ And these days they warn that coming interest rate increases will suddenly goose mortgage costs and disqualify those who now sleep on concrete to get a $400,000 home with $20,000 down. The terrifying thought is that soon it might take a hideous 10% or an unattainable 15% deposit to get a three-bedroom, three-bathroom, two-car garage, full-basement detached home with a paved drive and brick exterior.


But the evidence mounts that all the words spewed here and other places where caution breeds, are meaningless. Buyers will buy. Emotions will rule. The tide of hormones will prove too deep to damn. So stand back, and mind the spray.

And it ain’t just kids:

My wife and I, in our mid-40s, have never bought real estate, as a result of either being in the wrong place at the wrong time (essentially moving to insanely expensive areas where we were pretty much priced out from the moment we arrived–we lived in Silicon Valley during the boom, for instance), or being naïvely bearish on real estate (when we moved back to Vancouver in 1999 I was convinced the dot com bust was the beginning of a disastrous period for real estate, never mind everything else).

If we bought today, we’d be over 70 by the time a 25-year mortgage was paid off. We have about $200K to put down, and a household income about double the Vancouver median. The bank will rent us far more money than we would dare spend, but a property around about $700K would result in payments a little shy of 50% of net income, which is significantly less than other Vancouverites are paying. Yes, I know there’s a possibility that we’d lose the downpayment in the first couple of years if prices turn around. But any formerly rational person would, at this point, have to admit that in this city there’s starting to be a very strong possibility that we wouldn’t, and they won’t. Talk of “new paradigms” and “it’s different here” begin not to sound quite so insane, because there’s really no other solid explanation offered, except maybe grow-ops, which I don’t buy.

Yes, I know fundamentals are out of whack. But they have been for ages. Renting, at our age, has moved past tired to exasperating. Essentially, we either buy now or we never do. Don’t try to tell me that prices will fall 40% after the stupid Olympics; I’m no longer buying it. 5%? Yeah, maybe. So what. Thoughts?

See what I mean? Hopeless.

“We either buy now or we never do.”

When you hear those words, duck.


Following publication of this post, the Vancouver letter-writer, above, sent me this gracious response:

What does this mean, exactly? You pull one line from my email and make a smug comment. This is commentary? This is advice?

Listen, I’ve been waiting (and waiting and waiting, and waiting) to buy, in large part because of bear blogs like yours. I listened, OK? I paid attention. But where did it get me?

What do you suggest? I wait until 2029, when prices are more in line with incomes (if they are), and get a mortgage when I’m in my 60s?


For Garth's latest podcast, go here.


#1 nonplused on 09.22.09 at 10:01 pm

Well, those new mattamy homes are still cheaper than to TO average so I am not surprised they are selling. I have posted here before many times (but in the distant past in blog years) that I thought the path down was new home construction undercutting the price people want for existing stock. Short of a big change in the lending environment that is.

#2 [email protected] on 09.22.09 at 10:17 pm

I love “artists renditions”, I think I could fit a jumbo 747 or airbus a380 in that garage…

#3 catamaran guy on 09.22.09 at 10:17 pm

the sheeple are still mindlessly supporting their banker overlords.
this is society programming…get a job- get a spouse- get a big debt/house- start reproducing. Like we need more people on this planet!

me?(still not buying land yet).if I ever……..

#4 Shawn Allen on 09.22.09 at 10:17 pm

For those with the urge to buy, how about the following?

Buy half the house you can qualify for. Then pay it off as fast as reasonably possible.

A few years from now if house prices are (miraculously) up then they won’t be up too much because interest rates cannot be lower then they are now and so affordability means house prices cannot possibly jump much from here. But if they are up somewhat you have lots of equity in the place you bought and can trade up.

Under Garth’s scenario houses are lower in 1 year or 2 or 5 years or whatever. No big deal – whatever you lose on selling the house you buy now you will save twice that on the house you trade up to.

So maybe you should wait for a price drop but again if the urge to buy is too much, just buy an older smaller place or condo at half of what the you could actually “afford” to buy according to the banks.

There now, problem solved. You get to get on with life and own your own patch of dirt while not blowing your brains out even if house prices tank.

You’re Welcome!

#5 JET on 09.22.09 at 10:18 pm

The garage alone in that photo looks 36′ wide!

It’s madness out there.

#6 Ten to fifteen on 09.22.09 at 10:21 pm

“The terrifying thought is that soon it might take a hideous 10% or an unattainable 15% deposit”

Why would it jump to 10-15% down?

As long as CMHC keeps the 5% policy, and as far as I’m aware there’s no indication they’re raising it, the banks will lend it out, keeping house prices nice n’ fluffy.

#7 Cabin_Boy on 09.22.09 at 10:22 pm

One thing that I don’t understand….maybe somebody can shed some light on this?

I understand if one person on the block can’t pay his mortgage…too bad, so sad…he or she gets the boot. But what if half the block can’t pay? Or 80% of the block? The banks can’t take over all these homes, can they? And do what…sell them back to the same people that defaulted on them in the first place. Or maybe the banks/government (same thing) will just call a jubilee type of deal (with strings attached…can’t let the peons off the hook that easily). I think a lot of these new homebuyers are thinking this way….that we’re all in this together.

I tell ya…if my taxes ever go to bail out these reckless homeowners…I would happily help burn down the parliament building (no offense Garth…I’d make sure you weren’t inside).

#8 Jonas on 09.22.09 at 10:30 pm

Garth, this is starting to sound really tired. How long have you been calling for a correction/crash? I hate to tell you but it came and went and now we are at new highs. I think the couple from Vancouver are quite accurate with their assessment of the situation. This is the new norm… they should hold their noses and buy. Maybe it will correct 5-10% in the next 2 years – who cares? Where will it be in 25? higher, much. You and a few other blogs/bears have been singing this tune the better part of the decade and it just keeps going up.

#9 T.O. Bubble Boy on 09.22.09 at 10:34 pm

Garth – don’t forget the other scare tactics:

1) The HST is coming!!! (a valid point, but hardly a reason to jump into a buying new home)

2) Only a few homes left in the *exclusive* development they’re selling (that is exactly the same as the last 20 burbs that were built down the street)

3) Affordability is at an all-time high! (only if you take a 35-year amortitization, and only if you assume that your rate stays at 3% or less for the full 35 years)

Here’s the question I have: will there ever be an incentive for the banks to raise their lending standards?

I don’t think that Canada is quite at that ACORN level where we’re encouraging Pimps and Prostitutes to take out mortgages, and I don’t think that our banks offer Interest-only mortgages — but having virutally all first-time homebuyers with only 5% or 10% down is pretty much the same thing (especially when you consider that realtor fees alone would wipe out that 5% equity if the person needed to sell).

From what I can tell, one of the biggest factors causing the tidal wave of US foreclosures was the fact that so many “home owners” never owned even a fraction of their home. With no skin in the game (and some lax foreclosure rules that allow you to walk away more easily), even a small economic downturn was going to trigger quite a few foreclosures.

Anyway — my question here is: are there reasons that banks would decide to require 20% or 25% down again? (and, therefore, make home owners actually OWN some part of their house)

I guess one reason could be if the Mortgage Insurance entities can’t afford their writeoffs anymore, but are there any other factors?

Personally, I can’t see the market for these Mattamy-style “starter McMansions” drying up until the minimum mortgage standards are raised… pretty much anyone can find $15k to throw at one of these things.

#10 s33knges8 on 09.22.09 at 10:35 pm

We feel her pain – and are now in our lower 30s. Canada has become masterful at pulling rabbits out of their hat to save housing. We have been saving for years waiting for the right time to buy; so far the Gods have been against us. Put up the interest rates now – we are tired of waiting.

#11 Onemorething on 09.22.09 at 10:35 pm

Some people learn from their mistakes, others are destined to permanently make them.

Like this couple!

It took 30 years of loose spending and artificially low interest rates to get us here kiddies, THIS IS THE TOP OF RE, so when the great global reset kicks into high gear after all the BS is no longer palatable FOR ANYONE, not even the Ponzis, you better be flush!

It may actually unfold that RE will no longer be an investment worth noting for 10+ years as it swallows 50% of the buyers into foreclosure during.

As for this couple, it is clear from the message that they have given up on themselves and wish to live on hope even after the storm and future weather gives them every grain of evidence to hit the mother load.

Garth, the SHEEPLE are now asking for the Ponzi’s to pull their strings…what has happened?

#12 Basil Fawlty on 09.22.09 at 10:40 pm

Just as most reasonable people like Garth could not have anticipated the reduction of interest rates to below the rate of inflation, at the time. Reasonable people are presently not anticipating the maintaining of interest rates below market considering the amount of risk associated with massively increasing deficits and debt. Western governments will keep interest rates low through the printing of money to purchase their own debt paper. Bernanke is already doing this and Mark Carney has said he will implement Quantitative Easing to reduce the value of the CDN $. Given the nature of government, they will choose the path of least resistance and print, thereby keeping the economy alive. Of course, they would be just delaying, and magnifying, the eventual debt collapse, through inflation and possible hyperinflation. We are stuck between a rock and a hard place, inflate or die.
None of our underlying financial problems have been addressed. Rather, the fiancial insanity that created the current credit crisis, is being used to solve the problem. How incredibly stupid is that? Of course, I was wrong one other time.

#13 Calgary_rip_off on 09.22.09 at 10:52 pm

Hi Garth.

I had a good conversation with my wife today about why not to buy in Calgary right now:

1)Interest rates will go up.
2)If you dont have a big downpayment($15K) and need to take out the RSP from the bank to put more down, factor that into your monthly payment
3)Still can rent more house than the same $ for buying
4)Houses are double pre boom prices-that may not come down much, but if interest rates go up they will be forced down
5)Its smarter to buy a cheaper house on a much higher interest rate.

The couple above is correct. They may never end up owning. So what? Is the house part of their celestial dream when they are dead?

I have one good reason to own a house: So no dumb landlord is telling me what to do. No real other reason. If I dont want to mow the lawn, I dont have to(within reason). The city could always decide to take the land where the house is, so dont anyone figure its really theirs. And even if someone is on your property, illegally, this is Canada, even if you own a samurai sword and are ninja smooth.

#14 DrC on 09.22.09 at 10:54 pm

I watched my friend’s parents get kicked out of their house in ’87 after going into negative equity, and I lost $1000 in a savings and loans that I had saved from a paper-run. That’s a lot of money for a 15 year old. To truly understand this kind of thing one has to live it. And life is a harsh schoolmistress – you get the test first and then the lesson later.

#15 North Van Dude on 09.22.09 at 11:16 pm

WTF dude…you have $200k saved and you want to blow it all and then tack on $500k of debt some $700k shack or shoebox-in-the-sky?

We truly are at the end stage. Rational people are capitulating that 2+2 = 5, for no other reason than that renting is “exasperating”.

My experience is similar to yours- we sold our East Van ramschackle hut and moved to Europe for 3 years, and returned to Vancouver this March, to much higher prices. So what? We rent a house for a fraction of what it would cost to buy it (I imagine it would go for around $750).

If the reason you are exasperated is because your friends are telling you and your wife that you’re missing out, or you should really get it together and buy, well, I am here to tell you that you are likely the envy of friends. Because you actually have some money left over each month and can amass savings, while they are scraping to make those mortgage payments, taxes, repairs and renos. And they are lying awake at night terrified at the prospect of rising rates or job loss.

Hang on if you can. Or don’t. Without people pouring their life savings into grossly overpriced real estate, who would we have to bet against?

#16 Basil Fawlty on 09.22.09 at 11:20 pm

According to Paul Craig Roberts, Assistant Secretary of the Treasury under Ronald Reagan, there are now one million homeless school children in the US.

#17 Lance on 09.22.09 at 11:28 pm

“Don’t try to tell me that prices will fall 40% after the stupid Olympics”

How about 50%?

It’s a classic bubble. Hell, it was a classic bubble last peak and rightfully should have crashed… but an orgy of cheap money has inflated it even higher to one last destructive gasp. Look at all of the bubbles in history past… they all end in mania, everyone convinced that prices can only go higher… until, boom. We’ve read this script before.

Look out below.

#18 rp on 09.22.09 at 11:31 pm

We’ve just lived through a 30 year credit expansion. Who can blame these people for thinking the way they do? The world has passed them by. The great tragedy of bubblenomics is two-fold: we’ll get a big crash of course, but this comes on top of years of lost opportunities for people who were unwilling or unable to make a reckless leap. That’s life of course. You take chances either way.

#19 Dan in Victoria on 09.22.09 at 11:47 pm

Yeah, your track record speaks for itself.Why not Keep batting a hundred per cent.In your case go and buy,seems any rational person would not be happy still having to pay at seventy.You’ll have 25 plus years to work it out.Use some of the info on here maybe you can get it paid off sooner.But you’ll own a house nothing wrong with that…..You’re just a late bloomer……By the way who cares what other Vancouverites are doing or paying?That justifies it?

#20 Tony on 09.22.09 at 11:57 pm

Hopefully the bear market rally on Wall Street will end starting next week as present price per earning ratios don’t even justify a DOW level of 5,000 or about half of it’s present value. P/E ratios are presently above 25 on the S&P 500 index. The bear market rally has had one driving force. The US government and the US government alone buying stocks. The biggest sucker rally since 1933. When the market tanks next month the real estate markets in Canada will double dip and we’ll finally see those 25 percent drops in Toronto and the 50 percent drops in Vancouver.

#21 Kate on 09.23.09 at 12:17 am

Garth, you keep saying that in Canada, unlike US, you cannot walk away from the mortgage. So, what happens with your mortgage when you file for bankruptcy? Pls no more posts about me, I am just curious.

Then you walk. No credit. No credit cards. No car loan. No credit rating to let you rent. Try it. — Garth

#22 LivingAtHomeInVan on 09.23.09 at 12:26 am

I feel this guy’s pain. Personally, I went through the same thing. Silicon valley in the early 2000s, then back to crazy Vancouver a few years ago. Just seems impossible to buy anything without being in debt forever or ever having a life. I am a little bit more lucky though, still in my early 30s and single. So, I can afford to wait it out or move to a different city in Canada. For now, I am hiding at the parents’ until this craziness is over and investing as much money as I can in anything OTHER than real estate.

#23 Jim on 09.23.09 at 12:30 am

I strongly encourage the “buy now or buy never” mantra. I’m looking to poach a home tomorrow from the buyers of today.

The great thing about the RE market is that the time between busts is so long that the generation between busts (ie: in a boom) forgets that there ever was a bust. 1974? 1991? Who can remember that far back anyway?

Damn I can’t wait to “save” today’s buyers from their mortgage payments tomorrow! Buy faster and use 35-year amortized ARMs I say!

#24 Too Old Bob$ on 09.23.09 at 12:31 am

Wow! reading this brought back memories from 1981. I remember people saying ” you better buy now or you will never get the chance to buy again, you will be priced out.” Deja vus.

About a year later prices dropped 10% and some.

#25 Potato on 09.23.09 at 12:40 am

A sad story about the foolishness of youth to relate today: this comes to me 3rd- or 4th-hand, so bear that in mind.

A couple decided to get in on one of these brand-new subdivisions about 2 years ago; 5% down, 35- or 40-year mortgage. They got pregnant, and have had just over a year to enjoy their new house and baby when they decided to split (perhaps due in no small part to how tight they were financially with the new house).

They have no other savings, and have paid virtually nothing towards the principal in so short a time period. Selling would cost them all their equity and then some in closing costs/commissions, so they’ve “decided” (I’m unclear on the details due to the distant relation, so I don’t know if it was a conscious, rational decision, or if there were other financial troubles that were also underlying the breakup) to just default on the mortgage and walk away. They’re not even trying to rent it out and pay what they can.

Everyone down the gossip chain including me is shaking their heads at the irresponsibility of these two, but I also have to wonder how it is that when it costs ~7+% to unload a house that 5% (and 0%) downpayments ever came to be?

#26 off-gridder on 09.23.09 at 1:28 am

Hi Garth,

Read your blog constantly. Yes I’m addicted but it’s better than being addicted to real estate. I’m one of those 20-something hormone raging emotional-buyer kids. Except my boyfriend and I managed to control our RE lust despite always being told “houses will only go up” and “it’s the best investment you’ll ever make” by our parents. And “you’ll never see interest rates this low again, oh and here’s a pre-approval loan for $291,000 based on your first 2 weeks paycheck at your new job” (quote from mortgage broker 2006). We chickened out and didn’t buy the $235,000 new house in Springbrook, AB with the bubble tub and stainless steel appliances. Didn’t know about your blog back then. But we definately had a distrust for those RE agents. It all sounded too good to be true. We probably lost out on a modest guess of about $70,000 worth of makings at the RE peak. I’ve was raised off-grid since 1995 and the ammenities are what almost sucked me in. Too bad for the loss of cash, but at least we’re not in debt. We’ve since lost that good paying truck driving job and are on EI for the 8th month in Southern BC. But we did manage to purchase a 30ft travel trailer. But the tough part is finding a mobile home pad to park it on and set up our wood stove heat set-up. That’s the problem with these RE booms. The owner’s start power tripping and you can’t have dogs. You can’t smoke. You have to pay ridiculous rates to stay in their second vacation home so they can pay their ridiculous mortgage. So that’s why us hormone RE sucking kids are getting sucked into RE is the false sense of freedom. Sure landlord’s won’t have you buy the balls. But the tax man and the banks will.

#27 Gonza on 09.23.09 at 2:15 am

Letters like this only convince me more that this bubble is going to burst. When sensible people begin to join the bandwagon, the end is near. The reason this happens is that it is such an easier story to sell: “of course real-estate will continue to go up, look what it’s doing right now!”. By all indicators, real estate is exceedingly over-priced and this will correct. Bubbles tend to turn the moment sentiment peaks (remember dot-com?).

#28 jay on 09.23.09 at 2:27 am

With as much income as they state they have, you can rent just about anything that fulfills desires they have at that age ie. gardening, entertaining… There really is no need to buy a house for the first time in their situation unless they really want to learn how to be handy”men” going into their 50’s

#29 Onemorething on 09.23.09 at 2:42 am

Garth Et All,

You have to love this letter to MISH via a Canadian worried about RE and Mish’s comments on the RE bubble in the GWN (Great White North).

Looks like Garth-MISH camps have similar leadership!

#30 Brad on 09.23.09 at 2:47 am

I live in Vancouver, have been a long time bear and saved around 100k for a downpayment. I also don’t believe that there will be any significant correction in prices anymore.
The “affordability” products (subprime) and extremely low rates will keep pushing the prices higher. I realize that this is not sustainable. But I also came to the conclusion that the system is completely against people like me. Banks will keep making insane loans, because *the government will always protect them from any bad consequences*. Look at the data – the bubble has been successfully restarted. Will it crash? I am losing faith. If it crashes, then when? Timing *does* matter! I don’t have 150 years to live…
Unlike the couple in their 40s, I am not planning to buy in Vancouver anymore. Instead, I will be moving to a more sane place…

#31 NOBODY on 09.23.09 at 6:04 am

I don’t know about anybody else here but I’m getting tired of the repeats of Vancouver folks that want to buy Vancouver homes for $700K with 4200K down.
We get the point by now.
What Garth should offer us is BETTER INSIGHT into this market.
Yeah, yeah; don’t buy now, you’re a sucker. Prices will crash and you’re now a dummy stuck with negative equity.
You’ve said that last year that the recession would tailspin out of control and you advised readers here to go to your Xurbia website and buy survival items and canned squirrel meat to cope…
Did it happen?


Better insight please.

#32 NOBODY on 09.23.09 at 6:05 am

oops… I meant $400K down. Typo.

#33 Mike (Authentic) on 09.23.09 at 6:35 am

Topic “Talk of “new paradigms” and “it’s different here” begin not to sound quite so insane, because there’s really no other solid explanation offered”

Well, here is something to think about. London, UK is one of the top “World class cities”; Vancouver, as nice as it is, is just not. New York is, Los Angeles is, Tokyo is.

“World-class business cities are those where strategic and tactical decisions are made on everything from new plant investment to developing new markets and products. They’re the cities others watch and react to.”

Prices in London have fallen more than in Vancouver. Prices in New York, LA, Tokyo have all fallen more than Vancouver.

Is Vancouver different? Yes, it is not a world class city.

Is it immune? No.


#34 Don't Believe the Hype on 09.23.09 at 7:06 am

I love the artist’s rendering of a house and lot that is far from reality. How do they get away with that?

#35 Onemorething on 09.23.09 at 7:18 am

Btw, the rule of thumb for affordability is the following in North America pre High Tech Bubble and RE Bubble;

$Rental/month x 12 months x 10 years = $ Valuation

eg. $2000/m x 12 x 10 = $240,000

So if you take the currently valued $1.2M property in TO or West Van the rental should be $10,000/m.

Quite simply if the going rental for these properties range on the high side $5000-$6000/month they are still over valued by 40-50% from an affordability point of view.

Now, this is a simple gauge but he’s another calculation based on a 3800sqft big lot 2 storey 4 bedroom triple garage in West Ottawa which rents for $2800/m and is currently listing for $445,000.

Rental shows affordability at $336,000, the difference is around 25% to high side of owning.

Cities such as West Vancouver or The Beaches in TO are big bubbles destinations. Ottawa is moderately overpriced but only rode the wave.

This is what I base my first tee shot on!

My fairway shot is based on Geography and Salaries Index.

My approach shot based on cost of living, property taxes to offset salaries.

My chip shot based on the immediate neighborhood, schools and conveniences.

My putt based on final gut feeling and condition of the home!

This is how I’ve always purchased and made a bucket of money on RE over the years. I sold before the crash!

I do believe this time we will move back not to affordable times pre-high tech but at least back to 2003 prices which for high bubble regions will shave off 30-40% of current.

This will not happen overnight. This will happen over a 3-5 year period of continuing unemployment, prompted by a retest of previous lows mapped to higher interest rates, decade long double digit U3 unemployment and 35% of the workforce (still working) working part time OR taking 20% min haircuts in salary.

#36 Don't Believe the Hype on 09.23.09 at 7:22 am

Check this out – sound financial advice from the G&M. Put all your money into paying off your mortgage and you’ll get a guaranteed return!


#37 Herb on 09.23.09 at 7:23 am

The universe is unfolding as it is manipulated …

Clips from Carney’s “One on One” interview with Mansbridge on “The National” last night. Drift: the (paper) recovery is going well. (And why shouldn’t it? The Harper Government has bought the financial sector’s tarnished assets, leaving the latter with pretty books and handsome profits.)

The real economy? Well, it is going to take a while to get that recovery into a “sustainable” mode, with jobs being created somehow by someone sometime to get consumers consuming again. (Carney was kind of short on specifics here, but dutifully optimistic.)

So there we have it: the private sector establishment has hauled itself out of its self-created financial swamp by our bootstraps, and the devil take the hindmost, or rather, optimistic prophecies should be self-fulfilling in due course.

Of course there are no conspiracies. The universe is merely unfolding as it is manipulated. Just don’t ask who is running this – or any country – for whose benefit.

Might as well buy that Mattamy chipboard palace in Milton and “Come Home to the Good Life” for a while. Maybe someone will relieve you of that tarnished asset in a few years too.

#38 Nostradamus jr. on 09.23.09 at 7:55 am

You want insight?
Here is insight…

If all taxes are gonna rise and interest rates are gonna rise…you best be owning or renting downtown, near mass transit.

If Asia’s gonna control the world, u wanna live nearest them in North America with a mass transit set up.

Hmmm, looking at a map i see Vancouver is a little bit closer to Asia than is Toronto.

Nostradamus jr.

#39 MrC on 09.23.09 at 8:19 am

Wish I had been in the line camping out for one of these beauties.

Think of the benefits
– It would only take an hour on the GO Train to get to my job in downtown Toronto
– I’d have more free time on the weekends as cutting the grass wouldn’t take too long
– I’d have a nice big house. Maybe this is a negative as the time I save cutting grass would be spent cleaning up inside
– I get to drive everywhere. No walking for me
– And last but not least, the picture shows that my brand new house will be fully surrounded by large mature trees!!!!!

#40 dontcallmeshirley on 09.23.09 at 8:39 am


Enlighten us on why the government could not, or would not, expand the money supply. Doing so is not unprecedented and does not lead to armageddon.

#41 David Bakody on 09.23.09 at 8:42 am

40+ years old money in the bank a good job (s) and have lived a good life with no major problems ….. oh the thought of continuing on the same path for years for years ….how depressing is that. Hello people? Are you daff? $ 200K will just pay all the closing costs and items (stuff) y’all need/want to move into house …. then comes LOC and upkeep and sleepless nights and health problems …. and the list goes on.

For what it is worth the rich and powerful are no longer buying mega supper yachts, they are renting them via a 1/12th or 1/8th plan to share expenses and unload in 8 years …. so what does that say. It tells me only fools buy overpriced homes and take on the full financial responsibility.

#42 lgre on 09.23.09 at 8:56 am

Coming from someone who has owned one of these Mattamy shacks in Milton, All I can say is RUN and dont look back. The construction of these houses are garbage, shingles falling off from a little wind, poor plumbing system, drywall thin as cardboard, foundations cracking multiple times, very poor insulation and the list goes on. The material used is the cheapest material that could be had.

The arrogance is also sickening, they act like selling you a Mattamy is done as a favour to you. They bought Milton and monopolized the town with their crap shacks.

#43 steven rowlandson on 09.23.09 at 8:57 am

What can I say other than Canadians have to find out the hard way.

Aechylus once said “whom the gods would destroy, they first make mad”. ( Mad as in crazy, insane or super stupid enough to make a fatal error)


#44 J Walker on 09.23.09 at 9:02 am

Nostradamus jr. wrote:

“If Asia’s gonna control the world, u wanna live nearest them in North America with a mass transit set up.”

So your point is that Asians are not going to invest in Toronto because it is far away? Uh-huh.

Not sure if you’ve been to Toronto, but attracting people from different cultures, and by extension their money has never been an issue.

I’m sure I just blew your mind.

btw, good luck with that mass transit link to Hong Kong. Soon Vancouverites will be crying because daddy in Ontario won’t build them a shiny new bridge to Hong Kong. Well I for one think you deserve it no matter the cost! BC is the “BEST PLACE ON EARTH”.

#45 Andrew on 09.23.09 at 9:06 am

I wouldn’t touch these Mattamy houses with a ten foot pole. Why are they worth a third of a million dollars?

They’re located in the middle of nowhere. A house in the old town of Milton (you know, the city of 10,000 or so hidden deep inside almost 100,000 people of suburbs, consisting overwhelmingly of Mattamy “Widelot” (R) Homes, might be worth something. A house on the fringes of Toronto’s urban area might be worth something. These are neither.

Land costs? You really think a 35×80 foot sliver of land, on the fringes of Milton, which is nowhere near running out of land, is actually worth anything? Is it the building itself? They’re so poorly built they’ll be tear-downs in 15 years.

In essense these are not terribly valuable assets, yet are pawned off by developers as being worth a barrel’o’cash, which the bank will give you for pennies on the dollar (as long as you pay those pennies every month for the rest of your life). Why? Because they can, mostly. People will buy them.

These are depreciating assets with little land value, no different than say a condo in Toronto’s Cityplace development (vertical sprawl, more or less). Yet house-mania sets in, and off you go. At least you can probably find a tenant at Cityplace to cover most of your costs.

#46 Live Within Your Means on 09.23.09 at 9:08 am

Well, so far on our street, that $319,900 house hasn’t sold since it was renovated & put on the market in May. Every Sunday they had a 2 hour OH and lately they’ve been holding one on Sat. & Sunday. They haven’t reduced the price. It was purchased over a year ago for $100K (quick sale) less than the current asking price. It was then renovated cheaply & IMO not well. One of the owners has 11 rental properties. He’s mostly into digging foundations (lots of heavy duty equipment) & plowing for the city. The other is retired and does most of the reno work. The RE agent promotes the 5% down and current low interest rates but dismisses rates going up. Typical.

I’m just waiting until the owners have to start heating the house again (2nd highest in the country IIRC) in addition to our high tax assessments. Maybe they think by reducing the price it’ll give the impression that the house is worth less than what’s it worth.

I guess the current owners appealed the valuation on the house. Just checked and in ’08 it was valued at $258K, but in ’09 it was valued at $207. (no doubt before reno) as they only started to do reno early this spring). The elderly seniors who owned the house before questioned, but never appealed the tax assessment valuation. BTW, this property is not in a major Cdn. city.

#47 Nostradamus jr. on 09.23.09 at 9:09 am

…Mish is wrong…

Overseas posting? Better negotiate some financial assistance

Singapore: $1.89-million (U.S.)

Milan: $1.64-million

Florence: $1.61-million

Shanghai: $1.38-million

Bucharest: $1.37-million

Hamilton, Bermuda: $1.35-million

Rome: $1.26-million

Dublin: $1.13-million

North America’s 10 most expensive markets(in U.S. dollars)

La Jolla, Calif. $2.12-million (U.S.)

Beverly Hills: $1.98-million

Greenwich, Conn: $1.52-million

Palo Alto, Calif.: $1.49-million

Santa Monica, Calif.: $1.46-million

San Francisco: $1.36-million

Boston: $1.34-million

Newport Beach, Calif: $1.3-million

Palos Verdes, Calif.: $1.24-million

Vancouver, B.C.: $1.17-million

Nostradamus jr.

#48 your_missing_the_point_AND_the_peak on 09.23.09 at 9:15 am

What are all you renters going to do when you retire and your income slides? Owning a home outright during your retirement years is a de-facto requirement for security in your old age. With a paid off home, you have drastically reduced living expenses (i.e. you can start lobbying your councillor about property taxes.. imagine the freedom), and can survive off a mix of CPP, OAS and your retirement nest egg.

If you DON’T own in old age, you are in deep doo doo. At 70+, do you really expect to be able to hold down a $100K+-equivalent income to pay a mortgage? No. You’ve been priced out forever and will burn your savings on rent at an unimaginable multiple of the cost of ownership.

This is when old people have to suck it up, and move back in with the kids and be a burden till death.

CPP was not designed to have you rent out luxury townhomes during old age. Wake up.

#49 chibidani on 09.23.09 at 9:22 am

I was just discussing with my husband the “buy now before you’re priced out forever” concept, even before you posted this. Our problem with that slogan is: if we’re ALL “priced out forever”, who is going to buy the houses that go on sale in a year, or 5? Sure, there’s outside investors, and people who actually have a lot of money, but if the general population can’t buy, it seems like we will eventually hit a true downturn in real estate.

I’m saving my money for that day.

#50 eyesopen on 09.23.09 at 9:23 am

You guys should not forget that, in Canada, the banks etc… are currently not the lenders for mortgages & HELOC’s.

Haven’t we understood by now?

It is literally public funds that is funding our RE bomb.


#51 Gord In Vancouver on 09.23.09 at 9:23 am

#8 Jonas

Garth, this is starting to sound really tired. How long have you been calling for a correction/crash? I hate to tell you but it came and went and now we are at new highs. I think the couple from Vancouver are quite accurate with their assessment of the situation. This is the new norm… they should hold their noses and buy.

You’re entitled to your opinion and I give you credit for posting a bull sentiment on what is usually a bear board. Vancouver’s market; however, never really had an opportunity to correct. Just when prices started to normalize, the Bank of Canada brought in historically low interest rates.

We’ll get a realistic view of Vancouver’s real estate market once the federal government stops extending EI benefits, interest rates increase (please refer to any of Garth’s recent posts), and the HST is implemented.

#52 Grantmi on 09.23.09 at 9:28 am

Wow! Marc Faber.. is now talking about the collapse of the US economy within 10 years!!

#53 Signal Loss on 09.23.09 at 9:34 am

@Nostradamus jr. “If Asia’s gonna control the world…”

lol you are amusing. Don’t you mean “if the big asian societies successfully navigate the huge economic, industrial and social tsumnamis coming towards them without imploding into chaos, and then somehow manage to evolve into heterogeneous open societies geared for the innovation required to be leaders” then they might take an interest in our placid backwater?

please be serious.

#54 smw on 09.23.09 at 9:42 am

How about all those experts that over esitimated the retail gains, by 1.3% and close to a drop of $430,000,0000 in taxable spending for the month of July?

Keep listening to the cheerleading economist, they have stopped being “economists” and have become more “cheerleader”.

To the talking heads, note, there isn’t such a thing as a JOBLESS RECOVERY, get real…

#55 michael on 09.23.09 at 10:16 am

To the Vancouver letter-writer, above:

I was in the same boat as you in 2003. Waiting and waiting and waiting for Garth’s predictions that the baby boomers would flock to cheaper housing and homes in the burbs (where I want to live) would drop in price.

From 2003 – 2007 I watched myself be able to afford less and less of a house while I diligently saved up a sizeable downpayment. The price of homes increased faster in that timeframe than my investments so every year I lost ground by renting. So I bought in 2007 before I was priced out of the market. Yes, it dipped down in price in 08/09, but its on the rise again and I think by year end the house will be worth more than I paid for it in 2007. And now I am 2 years closer to having my mortgage paid off.

I think people should only rent if they can’t afford to buy a house. It sounds like you can afford one, so I would buy.

#56 Northeast Canuck on 09.23.09 at 10:25 am

The poster is right when they say that everyone in Vancouver believes that property prices will keep going up. I have just returned to this city after over a decade away and cannot believe how blinkered people are here. They really do believe that it is different here, and have any number of excuses for why it is different, rich asians etc. And it is really scary when you see properties selling for hundreds of thousands over asking, when you are sitting here waiting for the crash before buying.

They’re all wrong of course. And I tell them that, but no one believes me. They’re all nuts. The reason being that most people cannot see beyond the end of their noses and they believe what they read in the newspapers. My wife used to believe me but she’s been drinking the Kool-Aid here (love that Canadian-ism) for a little while now and I know that its going to get harder and harder to put off a purchase the longer this bubble goes on. Of course, the longer the bubble lasts, the more you lose if you give in and jump in as the poster has done. The riskier it gets. That $200k is gone.

#57 Nathan in Edmonton on 09.23.09 at 10:27 am

This guy should take a 35-year mortgage, cheaper monthy payments; he’ll be 80 when it’s paid off. Might have two or three mortgage free years before he kicks it, but at least he’ll have lived the dream of debt-slave…umm, I mean homeowner.

#58 Gregor Samsa on 09.23.09 at 10:36 am

Welcome to bubble world. Companies lose money, and their stocks rise. People get laid off, and the economy recovers. Debt goes up and taxes go down. And housing prices will rise forever and ever!

Let these bubbleheads buy their houses Garth. Let them go off with the herd and be happy. They obviously want to own a house more then anything else in the world (and that’s a good thing because their house will soon be the center pin of their entire lives, draining their time, money, and energy). Maybe they will learn a lesson from it. I think it’s a lesson that Canadians need to learn.

#59 Peter Wiener on 09.23.09 at 10:41 am

# 8 Jonas

How old are you and how many economic cycles have you been through? Obviously none OR perhaps you don’t understand economics nor mathematics.


Your presumption is that people pay an AFFORDABLE mortgage off and are ABLE to save a nest egg. Pretty hard to do when your mortgage costs cause you to take out a HELOC to pay for your lifestyle / problems because your mortgage payment is too high. Ergo, very important to NOT PAY TOO MUCH for the house in the first place – the reason prudent people are currently renting.

Oh, and buy the way, let me guess – you bought your house a long time ago when house prices reflected more closely your earnings power. Ya, just as I thought Mr. Smug.

#60 Foggy on 09.23.09 at 10:42 am

I wish someone had taken a picture of these people in the line up. I’m really curious as to what their demographic is. And “wide lot” is a cruel trick considering they are only 80 feet deep. Makes for a very small square footage lot. Get used to waving to your neighbours as you see each other constantly from any window in your home.

#61 Peter Wiener on 09.23.09 at 10:53 am

To Garth

Why do you bother? This letter writer is a dolt who is obviously starting to obsess, if not panic, about buying a house. Let him!

The sooner these fools buy and the higher they pay, the greater will be the reward for those patient and informed.

However, I must say that the very shrill tone to the RE market, especially in Toronto and Vancouver indicates to me the verge of capitulation on the upside by many.

A flurry of heated deals at record prices and no conditions should now ensue , followed by some downside by Spring I would think.

Patience is a virtue here.

#62 Dawn in Calgary on 09.23.09 at 10:56 am

#17 – Garth’s response
Then you walk. No credit. No credit cards. No car loan. No credit rating to let you rent. Try it. — Garth

We did in fact do that in 2001 — poor house purchase, no equity, no LOC. Couldn’t afford to fix what went wrong, couldn’t sell as is.

Six months after bankruptcy we had a car loan (paid off), and a credit card (secured), and never have once had a problem with finding a nice place to rent. It’s only scary if you’ve never done it. Wouldn’t want to do it again, but as most experiences go, makes you wiser in the long run.

#63 miketheengineer on 09.23.09 at 10:56 am

Garth et al:

I own a Mattamy home, purchased about 10 years ago. I noticed the neighbour’s home, had severe “shingle” issues. Some missing, others peeling up, from the top to bottom of the roof. And their home is a year younger than mine. You have to question the materials. Other issues on our street, include: rotted out garage doors. They are basically dust particles with some glue mixed in. Any moisture, and they disintegrate. I guess to keep costs down and profits up they skimped a bit on the materials.

So much for the 25 year shingle warranty.

I am too scared to look at my roof.

#64 jussupow on 09.23.09 at 10:58 am

Dear mid-40s. Garth definitely does not suggest you wait until 2029. That would be silly. What Garth asks is wait 5 year until prime would triple which shall result in substantial savings. 5 years and you may able to realize your dream. Just five years….

#65 Dawn in Calgary on 09.23.09 at 10:59 am

Sorry, meant #21 — from Kate.

Also, Kate, if you’re really worried, I can talk you through it from one who’s been there — feel free to contact me.

#66 My_View on 09.23.09 at 11:05 am

Hmm, how much should Mattamy be charging for those homes in Milton then? 100k? Yeah right not going to happen. 200k? If so, I will take 2 please, make that 3. 300k, not too bad. So 315K -430K for a DETACHED 3bd, 3bath home is just about right. I have also lived in Milton and it was a Mattamy home, I liked it. I will take new construction over old any day of the week. No I don’t work for Mattamy and I have built new homes and renovated old ones. So from personal experience new is so much better. We can get into building materials and building codes of yester-year and today but that’s a whole other discussion.

If the predicted correction is for 10-20% (lets say the average price is 400K). 40-80K is not so bad unless you have to sell the next day (speculators). I wont kid you, its still a kick in da nuts, I don’t like to loose a single buck on anything. But for most people they will carry on and will ride it out knowing the valuation or even higher values will return. People that buy new cars don’t loose sleep knowing after 5 years the car is worth nothing. But the car served a purpose for those 5 years didn’t it?

#67 PeckedToDeathByDucks on 09.23.09 at 11:22 am

@ Grantmi…..thanks for posting that Faber link. I have always respected his realistic, long term, financial analysis keeping in mind that he, like everyone, talks his own book.

He mentions his respect for the Reserve Bank of India, yet today it was announced that they accepted a 4.3 Billion loan from the World Bank.

His categorizing of Bernanke as a “criminal” is noteworthy.
He says that the next fiscal crisis is inevitable and will bring down the entire world capitalistic system. The only question is how exponential this process gets and how long it will take.

IMO the stock market rally has been driven by speculation with near free money supplied to the financiers through the paperprestidigitizer. That machine is smoking and there is no will or know-how to shut it down.

What is the paperprestidigitizer?…here is a picture of it in action.

#68 My_View on 09.23.09 at 11:25 am

Pretty good piece, IMHO!

The argument is riddled with unproven assumptions. Paying off debt is always a good idea, but counting on real estate inflation is not. — Garth

#69 Roial1 on 09.23.09 at 11:32 am

#31 NOBODY on 09.23.09 at 6:04 am

You’ve said that last year that the recession would tailspin out of control and you advised readers here to go to your Xurbia website and buy survival items and canned squirrel meat to cope…
Did it happen?

NO! ——–Not YET!

With emphasis falling heavily on the YET.

If you’re going to take our time, be truthful. I did not say the recession would go out of control, putting the odds of a deflationary spiral at 20%. My belief in personal preparedness, meanwhile, is just that. It’s called insurance, dude. You have it on you car, your house and your life. So why not your physical needs? Feel free to be naked. We’ll watch and see how it turns out. — Garth

#70 bigpictureguy on 09.23.09 at 11:33 am

#61 Peter Wiener on 09.23.09 at 10:53 am

Right on bro!

#71 your_missing_the_point_AND_the_peak on 09.23.09 at 11:35 am

#59 Peter Weiner – with all due respect, your comments always start off OK, and then run off the rails with ad hominem nonsense.

AFFORDABILITY is a major issue. But how are you to judge that? Guys like you don’t lament the lost wages and the dislocation of discouraged workers that experience hell during a jobless recovery. They never get back on the train, but you don’t seem to care about them. No, you seem to be a hard-nosed fella, and the unemployed should stop raiding your war chest via taxes.

So why do you think that those that remain employed will not reap the rewards of increasing wages on the inflation that will occur as North American currency slides? Sure, initially the inflation play will benefit well positioned investors in commodities, forex and perhaps even goldbugs. But eventually a jobless recovery is a recovery no matter what–and the debt-slaves will get raises and their debt-burden will be reduced over time. All of sudden, their mortgages are affordable even in the context of rising rates.

The government has no vested interest in slamming the remaining productive workforce into a deflationary 2×4. The sidelined workers can suffer and die–but those needed to produce GDP are precious enough to save from doom.

Any market correction at this point will be muted compared to last-year’s meltdown and confidence will continue to rise. And as we saw last winter, without the Dow Jones below 7500, Canadians will not flog their homes. The big money pump is managed and managed well. I don’t agree on moral grounds with a lot of it, but I don’t think Bernanke, Paulson, Geitner, Summers are a bunch of idiots. Nor do I think Carney and Volcker are second-tier idiots either.

This train-wreck will have tons of lipstick on it, but it will keep pushing on. None of us can stop it, or outsmart it.

#72 just a guy on 09.23.09 at 11:45 am

The argument is riddled with unproven assumptions. Paying off debt is always a good idea, but counting on real estate inflation is not. — Garth

Exactly. I thought it was very misleading to repeatedly refer to paying off your mortgage as a “risk free” return. Try calculating the return under a scenario where a house loses 10% of its value and the homeowner bears 100% of the risk of first loss.

On the flip side, the author’s example of a 4% mortgage rate implying a $4 savings for a $100 prepayment was misleading (if you pretend that real estate stagnates or always appreciates). In the early years, it would be considerably more than that, depending on the terms of the mortgage. Towards the end…not so much.

My_view, I like your posts a lot (I think this blog needs more reasoned balance from the posters) but I thought that was a poor article. Pay down debt? of course. But there’s no guaranteed return on it.

The tax-free argument was also weak, unless the author has never heard of a TFSA or RRSP.

#73 Dan in Victoria on 09.23.09 at 11:48 am

Update comment,Like I said buy NOW,That’s what you want, so do it.The early bird gets the worm.The second mouse to the trap gets the cheese.

#74 Jmack on 09.23.09 at 12:17 pm

Once everyone sees it rain everyday for the whole Olympics without one snowflake anywhere, they will fall in love with the city and prices will shoot up again…(shoot up is fitting for Vancouver isn’t it)….the Olympic hangover will last for years. House in Hawaii/Arizona…or a box in Vancouver…tough choice

#75 Jake on 09.23.09 at 12:30 pm

#48 said,
“This is when old people have to suck it up, and move back in with the kids and be a burden till death.”

A sad testament to the moral state of our society when the people who sacrificed 20+ years of their lives to raise us are seen as a burden if they require anything back in their old age. I can’t help but admire the East Indians and the Asians in my neighbourhood who are honored to take their parents into their homes in their old age. Comments such as yours are reflective of the attitude of entitlement that is furthering the mess our society is currently in.

BTW, how much of an inheritance are your parents leaving you? I’m sure you have figured that out by now.

#76 Genghis on 09.23.09 at 12:30 pm

The author of the letter predicts at worse a 5% correction post-2010. He says he is in his mid-40s, so I guess he was not living in Vancouver in the 80 and early 90s. Had he been living there he might have remembered some pretty nasty price corrections In the worst one prices dropped around 30% in nominal terms (which was around 50% in real terms) over a period of about 5 years. It happened before so why could it not happen again?

A 200K down-payment sounds like a lot of money. However a 40% correction would put him deeply under water.

The author also predicts that if his home goes down in value it will only be for the first few years. I suggest he have a look at what happened in Toronto in the 90s and those that bought at the market peak. It basically took at decade to recover in real-terms.

The worst thing about being under-water is that you are stuck in your house. You need to come up with cash in order to sell it. If (for whatever reason) you need to move and you don’t have the cash and don’t qualify to re-refinance the only other option is to walk, with consequences described by Garth in reply to post above.

#77 GregW.,Oakville on 09.23.09 at 12:43 pm

Hi Garth, Have you seen this idea, 10min video on YouTube?

‘Solution Ideas to the Economy, War, and the Environment’

At first I thought it was put together by an anarchist.
It sound almost to simple?. May or may not be painful in the short term, but long term…
Just imagine/something to think about.

Of course others may have thoughts of how to encourage the governments and leaders to act in the best interests of ‘the people’, short and long term?

#78 Calgary Rip off on 09.23.09 at 12:43 pm

Missing the point and the peak:

You assume that people will actually retire. That’s a delusion of the last 100 years. People did that before 1900 and they’d probably end up dead. That’s how it is again. All this crap about vacations and retirements. Live for now, cause its the present. You cant predict the future. It may never come. Prepare, learn and get ready for it, but dont assume you will ever retire.

If you buy a house:
1)You may or may not pay it off
2)The city could take it if they want
3)It could burn down(a hassle with insurance)
4)Interest rates could skyrocket and you foreclose

Bottom line dude: Stay healthy, injury free, dont waste your off time doing booze or strange drugs, exercise, stay healthy mentally. That’s all you have for sure is choices. Retirement is a delusion.

#79 Peter Wiener on 09.23.09 at 12:44 pm

# 71

“None of us can stop it or outsmart it”
Speak for yourself.

“…but I don’t think Bernancke, Paulson, Geithner, Summers are a bunch of idiots.”
Idiots; no, corrupt; absolutely.

Don’t even know where to start with you if these are your perceptions, so I won’t bother.

#80 Chaostrology on 09.23.09 at 12:47 pm

Forrest Gump nailed it!


“And that’s all I have to say about that.”

Dumb, dumb, dumb, dumb,dumb,dumb.

#81 Calgary Rip off on 09.23.09 at 12:50 pm

Garth: Here’s the latest from the Calgary Herald and Mario crackpot Toneguzzi:

Designed to illustrate how the median of $400K is ok for a prairie city and people should be going gangbusters to buy all these “bargains”

Looking forward to the coming months when and if interest rates skyrocket. Mario may be out of a job.

#82 Men With Hats on 09.23.09 at 1:00 pm

I don’t queue for anything . Never mind the opportunity to be fleeced by a bunch of gangsters .
Pressed cardboard houses . What a concept .

#83 lgre on 09.23.09 at 1:02 pm

#48 your_missing_the_point_AND_the_peak on 09.23.09 at 9:15 am

your argument shows that you are very green when it comes to making/savings/investing money. It all comes down to how you handle your money..90% of the Canadian population would not have a dime to their name if they didnt own property when they retired, you are right on that..but dont confuse that with EVERYONE.

Saving in RE is a very harsh way of saving your money, include the expenses over the years , and I can almost guarantee you that most would be in the negatives. Not to mention the negative effect your life takes on being burdened with TOO much debt, as most have picked up in the last few years.

I’m not againts owning as I’ve owned before and will own again, just not in the near future.

#84 lgre on 09.23.09 at 1:13 pm

#66 My_View on 09.23.09 at 11:05 am
“We can get into building materials and building codes of yester-year and today but that’s a whole other discussion.”

it is?? crap material is crap material, regardless if it’s today or back in the ancient Egyptian days. The whole point is, if prices are in the sky then the material used should be reasonable. I’m not surprised that Builders and big corporations run over the general public, when you got people justifying their every move.

#85 van house hunter on 09.23.09 at 1:14 pm

I have purchased and sold two properties in the last 7 years. Both properties were poor decisions not financially (I profitted on both sales) but in respect to the quality of life. I had a condo hated the neighbours and corrupt strata and the b.s. strata fees (btw it was a leaky condo and when there was a leak in my pipes they made a hole in my bathroom, fixed it and left the hole for me to fix out of my pocket!) Purchased a duplex with a pathetic loser scum of the earth jerk next door. I’m a single mother and had to mow the lawn of the entire property while the ogre just smoked his cigarettes and living in his dead mothers house for free. Owning a house is not paradise, I had many sleepless nites and new ulcers and probably shortened my lifespan. Also took away too much time from my child. Sure my bank account grew but at the expense of no vacations, only purchasing sale items, feeling guilty I wasn’t paying off the mortgage fast enough for a crappy house in a crappy neighbourhood. Is this what you as a 40 something year old want to do until the day you’re buried??

#86 My_view on 09.23.09 at 1:18 pm

I think it’s time you do a piece on condos/strata. My opinion, this is the catalyst for this crazy R/E market. Look back 20-25 years ago. It was suburbia madness, not that things have not changed, but now they build town-homes, stacked towns or hell even condo towers in the burbs. 25 years ago, it was semi or detached and very few town homes. So why are a lot of people pissed and especially on this blog? Because when they start to even consider buying a home, what are they left with? CONDOS, no you cant have a home like the one you grew up in, front porch, backyard, garage/drive way/parking spot/white picket fence/ Sparky the wonder dog and SPACE (sqftage). Walk in to a condo office in any metropolis city, you want a parking spot? 20k please, storage locker? 10k please, the list goes on and the price tags are out of this world. Lets not forget the strata fees, and by the way the fee doesn’t cover hydro but you get this state of the art facilities which won’t need no up keep or replacing in 25 years. COUGHING! I know governments love condos because look at all the taxes they collect for a small piece of land. So that’s maybe why people are camping out in Milton? DETACHED homes are dinosaurs…..

#87 marnic on 09.23.09 at 1:18 pm

OK then, I’ll take never.

#88 TheComingDepression on 09.23.09 at 1:30 pm

Stupid Canadians, we are deep in debt. Per person we equal 28,000, the US is only at 22,000. We will double that public debt within a few years. Check this out and let it load..
Iran public debt is less than a $1000 per person.

#89 smw on 09.23.09 at 1:46 pm

Peter Wiener is on today!

Larry Summers was deeply involved with revoking the core portions of the Glass Stegal, you know the act brought in during the Great Depression to segrigate investment and commercial banking institutions, so they wouldn’t be able to become “to big to fail”.

So he’s either got his head so far up his ass he’s eating his own dung and believing it or he’s corrupt.

Conspiracy to blow up the worlds financial system or just egos so big that they believed today we’re above what happened in between 1929 – 1933?

#90 PeckedToDeathByDucks on 09.23.09 at 1:55 pm

“The Committee will maintain the target range for the federal funds rate at 0 to 1/4 percent and continues to anticipate that economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period”

To provide support we will continue to crank the paperprestidigitizer until it goes up in flames as we are hearing no complaints from those that are collecting 28.8% on credit debt and those speculating in commodities and stocks. Of course, our dollar will see continuous devaluation which will drive the former investments even higher in price.
The good news is that we will be paying our debts with cheaper paper and our companies will be more competitive. The rest of the countries have agreed to just grin and bear it as their politicans are feeling no pain, as it ever was.

#91 Subversive on 09.23.09 at 1:56 pm

Garth, the guy is right. You offer nothing but smug sarcasm instead of advice. If you’re going to post the guy’s e-mail, the least you could do is offer some real advice.

Also, the cacophony of vultures who post here frothing at the thought of other people’s misery really is disgusting. Stop wishing ill on your neighbours, you mean hearted jacktards. There have to be better things you can do with your time than brag about how smart you are with an anonymous username.

An anon name like yours? BTW, my advice on this blog comes at the same inflated price as my sarcasm. So, bite me. — Garth

#92 hal smith on 09.23.09 at 2:12 pm

It has been said that in politics perception is reality. What we have going on today is that “agreement ” is reality. There are soooo many people that agree that real estate will go up forever and buy now or forever be locked out that they have created a new “reality”. And the government is on board because if this thing crashes we a royally screwed and may go into a depression so they will keep interest rates as low as possible for as long as possible. I believe that they will use quantitative easing and print money and buy their own bonds thru a third party or offshore entity or some such underhanded method because they have to keep the loonie in the 80 to 85 cent range as well for us to be competitive globally. Garth will disagree because he is too honest and virtuous to consider such things but I believe the government will do ANYTHING to keep the bubble inflated, interest rates down, and the dollar in the 85 cent range. I hope I’m wrong.

You are wrong. As I have pointed out several times, the government is helpless to control rates so long as it is issuing massive amounts of new debt. If it were to buy its own new bond issues, the dollar would migrate to 40 cents, and you’d find out what a depression is all about. — Garth

#93 Samantha on 09.23.09 at 2:13 pm

I think the wind is starting to shift and pick up speed.

The first article with part quote below makes me wonder. Interest rate increase letter from yesterday, yet “banks are steadily scaling back usage of government backstops as they are able to borrow more cheaply on their own”.

Here’s the quote and link to the full article:

“Bank of Canada scales back emergency lending”

“Holders of most corporate paper can now easily sell in the open market after a big rally in many corporate bonds, while banks are steadily scaling back usage of government backstops as they are able to borrow more cheaply on their own.”

And looking South:

“Fed to slow mortgage program”

#94 Internal Exile on 09.23.09 at 2:13 pm

If you think Vancouver is going to figure out what’s going on an time soon, you’re going to be disappointed. I’ve never lived in a place that’s so isolated and provincial, yet sees itself as the epitome of hip and savvy. It’s a place where people compare their city, with a straight face, to Paris and New York. The irony is that it’s precisely this complete lack of any clue that has kept the bubble going while the entire rest of the world has either popped or is deflating.

#95 andthen on 09.23.09 at 2:16 pm

Conspiracy? Conspiracy to try to keep the western world on top.
All the jobs have been shiped over sea, so unless they fabricate wealth in NA we are doomed.
Money ran out so they played the credit and inflate game.
No money? Give them all hundreds of thousands of dollars.
They spent it all on goods from China? Yes all the money we printed is now in China
Hey we can all sell the same apple to each other and raise the value 10% every sale that should work as as well as this housing plan.

I am starting to think the plan is to destroy the US dollar then start over.
The third world has become the creditor of the western world, and that credit is running dry.

#96 dd on 09.23.09 at 2:20 pm

#78 Calgary Rip off

“Retirement is a delusion.”

That is being conservative.

#97 Peter Wiener on 09.23.09 at 2:22 pm

I’ve come to the conclusion that it is utterly pointless to discuss the Canadian housing market with any adult that is seriously interested in purchasing now.


1. They have all their rationalizations already thought out and therefore they don’y need my input, or;

2. If they are looking at the math and actually analysizing a transaction and still have an interest in buying currently after that analysis, I can’t help them because they have no sense, or;

3. It is an emotional or need purchase and one cannot speak to another’s needs, emotoinal or otherwise, or;

4. Their impatience overrules any common sense counterargument.

I’ve learned my lesson after the dot com bubble where people just would not listen re selling Nortel and others. I let them lose their money after they started doubting my sanity early in 2000. Guess who was right and why? Same scene today in Canadian RE, IMHO.

#98 JHO on 09.23.09 at 2:25 pm

i’ve been reading this blog forever and still don’t get a lot of the posts people leave behind or letters they submit.

i don’t understand why people think putting 20-25% down on a house is unreasonable – our parents all did it, and many like my pop are sitting on mortgage free assets. prices wouldn’t be where they’re at if all the f’n retards out there would stop paying them. sure my dad tells me to buy, but with 25% down, no other debt, and extra cash reserves in case of emergency. wtf ever happened to the concept “if you can’t afford it, then you shouldn’t buy it”. sure, you can indulge in a great dinner or nice pair of shoes every now and again when you really shouldn’t, but not a 35 yr mortgage, c’mon! and don’t blame the banks either, if you haven’t realized that they are the oldest drug pushers in existence than it’s time for an economics lesson. low interest rates are the cocaine and crack of our generation – it’s still up to to use common sense to prevent a credit addiction.

and people talking like renting is so f’n terrible – take a look at the world around you (50% of the pop. lives on $2/day, a DAY), as if living in a 1 or 2 rented BR is the end of the world. we live in van, in an old 60’s 3 story walk-up right across from Kits beach (1000/month), have a relatively nice & new car to drive, take budget getaways routinely to whistler, banff, jasper, ontario to visit the fams and still have 4K+ savings/disposable income a month and the freedom to come and go as we please (combined 140k income) – now compare a 35 year 750k mortgage (what we’ve been approved for and WELL below the avg. cost of a decent house around here) and re-jig our lifestyle and take out all the fun stuff except paying off perpetual debt. i’m so sick and tired of acquaintances of ours being so f’n smug saying they “own” their house – they own nothing, they rent their place from the bank, except if they can’t pay the bank isn’t as forgiving as my landlord i suspect.

i have lots of good friends who are now very successful who grew up in rented apartments and houses with their parents. it’s just a place to hang your hat and rest your head people, get over it.

#99 Nostradamus jr. on 09.23.09 at 2:27 pm

#88 TheComingDepression…& J Mack

“”Stupid Canadians, we are deep in debt. Per person we equal 28,000, the US is only at 22,000. We will double that public debt within a few years.

Iran public debt is less than a $1000 per person.””

…Only the sophisticated and wealthy can afford Vancouver.

The rest of you should move to Iran or Arizona.

Nostradamus jr.

#100 your_missing_the_point_AND_the_peak on 09.23.09 at 2:27 pm

#75, Jake: I hear what you’re saying on moralistic grounds. However, there was a time when reasonably prudent second gen. grandparents could afford their financial independence (at least own their home) and the kids could paddle their own canoe too.

On the sacrifice of raising kids; many people have children in the same fashion that they buy homes, and upscale vehicles.. they’re “living the life”. Children don’t ask to be born you know. That a parent should expect something from their children in return is folly at best, and malicious abuse in many cases.

#78, Calgary Rip-off: I actually agree wholeheartedly. “Retirement” as marketed in finance sections of our major dailys, is a late 20th century anomaly that serves mostly to sell mutual funds. The real end game here is “work or die”. The salves for old age are intended to keep you at the Home Depot check-out for the rest of your life; not to create snowbirds.
However, as the anomaly of early age retirement did once exist (and longevity such as it is, 65 would now be early in my books), it was only possible because people owned their homes outright, saved a nest egg, and could supplement with CPP and pensions etc… That’s STILL the only way, however it’s getting harder and harder to achieve.

The point is this: Waiting to buy a house at 50+ is madness due to the massive odds against being able to earn a mortgage-qualifying income into your 70s. Even after a CORRECTION that is, what, 10% at best?? Can you expect people to be bearish on something you can live in for most of your life, and happens to function somewhat as a store of wealth also?

#83 Igre: Thanks for the vote of confidence. I’m not talking about EVERYONE. I am talking about most people, with average means, with necessarily average ambitions and potential, and with limited time on the horizon to secure a future. Sure, some of you, like perhaps this Weiner fellow, are unconscionably well-to-do and can watch as vast swathes of people make inopportune decisions on a TRADING basis.

However, most people have no other way to be secure. Most people have no time to pore over the business section every day, to hedge against inflation, to play commodities, to sit across the table from a suited Blackmont advisor that allocates your wealth to the best growth opportunities around. Come on, give me a break! This kind of alternative to real estate is exactly what most people here are bandying about, and are so clueless as to how the majority live, or can afford to live.

I’ll say it again, wake up!

#101 Evangeline on 09.23.09 at 2:42 pm


((My wife used to believe me but she’s been drinking the Kool-Aid here (love that Canadian-ism))

a Canadianism?

As far as I know the phrase “drinking the Kool-Aid” is based on the huge mass suicide instigated by Jim Jones in Guyana

From Wikipedia: “Given that reasoning, Jones and several members argued that the group should commit “revolutionary suicide” by drinking cyanide-laced grape flavored Flavor Aid (often misidentified as Kool-Aid) along with a sedative.”

#102 David Bakody on 09.23.09 at 2:43 pm

TD boosts 2010 forecast to 3.8% growth

On the second thought go to the TD Bank a buy a million dollar home or two ….then sell it next year making a cool $380K each ….. good job our economy was indeed strong as the Canadian Shield and their were no homes lost, no jobs lost and people even made more money on their savings ……..or did it happen along with years of savings gonzo and people working longer hours for less money and more big business profit. What does all this have to do with homes …..everything?

#103 betamax on 09.23.09 at 2:43 pm

YMTPATP: “What are all you renters going to do when you retire and your income slides?”

Anyone priced out in a big city can rent, save, retire to a small town, and then buy a much cheaper place for cash.

#104 Barb .. a reader in Calgary on 09.23.09 at 2:44 pm

It happened in 1982 — The house I own now was for sale all that year. By all accounts (from all my immediate neighbours), the owner had smugly turned down a cash offer $10,000 below his asking price.
Later, when it still had not sold, he put it on auction. It auctioned off at 30% less than his asking price.

#105 Industrial Guy on 09.23.09 at 2:59 pm

Ford to close its St. Thomas auto plant.
Come to St Thomas. Lots of very cheap houses. You can live in the epicentre of Canada’s collapsing manufacturing sector.
There may be no jobs, but it’s a nice quiet town. St. Thomas is also close to centres of high unemployment like London, Chatham, Sarnia and Windsor.

There is no housing bubble out in the SW of Ontario. Freefall is more accurate.

#106 Kash is King on 09.23.09 at 3:00 pm

Hey Garth, or anyone else know about this?

Looks like a new Global Financial system?

It’s chartered through the UN… Charter Control#10-60847.

It encourages visitors to explore every part of the site. The two videos are quite remarkable and very inspiring.

Oddly, only Canada & US seem to be the only ones not signed up?

#107 likemostofus on 09.23.09 at 3:15 pm

According to the CBC: Canadian real estate a world ‘bargain’: survey

You’re right. When we compare Edmonton to Shanghai, Milan or Dubai, we are affordable. (Ever wonder why?) — Garth

#108 Kash is King on 09.23.09 at 3:45 pm

Imagine how many lives could be saved if something so common and everyday turned out to be a cure for cancer?

Please assess to the best of your own abilities…. do your own due diligence.

Maybe some media-type here could pick up on this & check it out with some explorative journalism?

Sorry Garth, off topic I know…. but…

#109 GregW., Oakville on 09.23.09 at 3:47 pm

Hi #106 Kash is King,

‘Oddly, only Canada & US seem to be the only ones not signed up?’

I took a quick look at your link given, under ‘stucture’
Canada and USA are included in region 1.
(Not sure about the signed up part? Maybe the NAFT or the SPP has signed us up already?)

#110 BAD on 09.23.09 at 3:48 pm

To paraphrase Keynes:

“The RE market can stay irrational longer than you can stay rational”

#111 OttawaMike on 09.23.09 at 4:12 pm

#107 likemostofus on 09.23.09 at 3:15 pm
Re:CBC puff piece by Coldwell Banker

Read the comments section under that story, very entertaining stuff. Sounds like stuff torn right out of

#112 Jeff Smith on 09.23.09 at 4:20 pm

Honestly! I almost fall on the floor laughing every time Garth put one of these stories up.

An anatomy of a joke is like this.
1) The joke storyline to prep the listener for the final laugh which is the
2) Punch Line

The current real estate situation is a mirror of a joke.

1) The lemmings, the press and the realturds, and the money printing machines prep us the listeners and we listen attentively. We (hopefully) on this blog can recognize a joke so we listen attentively/eagerly. Then….
2) The friggin bubble burst and then… (aka punch line)


Get it???

#113 nota bene on 09.23.09 at 4:38 pm

Oops, was too slow to post the “Canadian real estate a world ‘bargain’” link above link. Someone beat me to it. Also looks like they’re comparing Canadian homes in CDN$ to homes in US$ for other countries.

And did normal media scrutiny catch that? — Garth

#114 Dawn in Calgary on 09.23.09 at 4:54 pm

#98 JHO

HEAR HEAR. What she/he said!

#115 blobby on 09.23.09 at 4:57 pm

@ Subversive : “Stop wishing ill on your neighbours, you mean hearted jacktards.”

Why do i get the impression you’re one of those people who braggs at parties about how much “profit” they’ve made from real estate?

#116 blobby on 09.23.09 at 5:00 pm

Quote : “Once everyone sees it rain everyday for the whole Olympics without one snowflake anywhere”

Actually what would be MORE interesting is if it snows a LOT like it did this year.. but (just like this year) the council will be too inept to plough/salt the roads… That’ll be interesting when the whole world is watching us.

#117 Let's be realistic! on 09.23.09 at 5:06 pm

RE: #57 Nathan in Edmonton on 09.23.09 at 10:27 am
People keep saying this ‘debt slave’ thing in regards to a mortgage and I just don’t get it.

I left the nest at 18, and since then (for 13 years) I paid montly rent. I never missed a payment. I estimate I spent $80,000 on rent. So was I a ‘rent slave’? (*disclosure* I just bought a house) If I’m a renter where’s this magical fairy that will allow me to not make my rent payment? I could have just as easily bought a $50-60,000 condo (ok, with a co-signer). All of a sudden I’m a slave to debt? WTF! What is the difference between your money going to a greasy landlord or into the hands of a greasy banker?

People gotta live somewhere, and a mortgage is a vehicle whereby you’re essentially paying ‘rent’ to the bank. If you make a good real estate purchase, chances are in the end you’ll likely own the asset.

So let’s call a spade a spade. Currently there are some real estate bubble markets in Canada (some western cities, some major cities). There are also personal circumstances (inheritances, living in a rural area or smaller town i.e. St. Thomas, no other options besides renting (shitty credit rating or you live in a bubble city) or buying (have you looked at the cost and selection of rentals in Ottawa!?!)) that should help indictate your action toward real estate.

If I had a stable job (school teacher or banker, for example) in St. Thomas, hell ya I’d buy real estate!

If I was a government employee in Calgary or Vancouver, hell no I wouldn’t buy real estate! If I was the CEO of Encana, hell ya I’d buy real estate!

If I got a $250,000 inheritance, hell ya I’d buy real estate (but not in some markets).

If I lived in a city where rents were comparable to buying, hell ya I’d buy real estate (read: Ottawa).

If I had to take on more than 3.5x family income to buy what I wanted/needed, hell no I wouldn’t buy real estate.

So I think Garth’s message is lost on some people sometimes because in fact at any moment in time there will be good and bad real estate purchases; it’s all a matter of circumstance and the local market.

Previous bloggers have asked Garth to be more specific, perhaps tease apart different markets. I think this would be useful for many of his followers. He’s given good investment and real estate advice for over a decade that has proven to be accurate; however, I don’t think someone in Montreal should expect their house value to lose 30% over the next few years; especially if they didn’t ‘overpay’ in the first place. Someone in Vancouver? Well, that’s Garth’s call.

Garth let’s talk local economies!!

#118 Kash is King on 09.23.09 at 5:30 pm

#108 Greg, thanks… I stand corrected.

#119 Peter on 09.23.09 at 5:36 pm

…. 50 young couples were camped outside a sales trailer in the Toronto burb of Milton.

50 young pederastus !!!!

#120 Jon B on 09.23.09 at 5:57 pm

Oh come on Garth, throw this guy a bone.

#121 Kash is King on 09.23.09 at 6:01 pm

In reference to the UN Global financial system I linked above.. the site states that the OITC is the largest single holder of gold and platinum in the world. Now I know I never heard that before, so that is interesting.

It seems like maybe it dovetails with this very interesting piece by Bix Weir, and the very interesting (just by it’s very existence) of the Road to Roota comic (yes that’s right) on the Boston Federal Reserve’s website. The comic was even updated in 2007.

I wonder if Atlas is shrugging right now? Like right now?

#122 greyhound on 09.23.09 at 6:23 pm

Is it just me, or does it seem that folks have been getting a bit grumpier here over the past few weeks? Growing impatience for the promised turnaround?

Keynes’ remark that the market can stay irrational longer than you can stay solvent comes to mind.

#123 Onemorething on 09.23.09 at 7:05 pm

#104 Barb TPR,

Yup, and its going to happen again but in a way that will be different as Canadians (unlike the yanks who have taken the RE blows already), even when faced with the inevitable downturn will continue to shrug off the worst by exhausting every means available to keep that home.

Credit cards will help pay off this and that and when those are done, LOC’s will take over until debt is beyond comprehension and the bank takes the home.

It’s exactly what governments are doing with their spending and keeping artificially low rates in our faces.

I believe this situation may over rotate so badly that the banks that own mortgages sell them off to the private industry and new business in created in the rental industry.

Those who are really stung as described above will likely never buy a home again as they are saddled with debt for 10 years or more and when they try to buy anything, it will have to be with cash or under strict loan requirements.

Huuum, what do I see in your credit rating file Mr. X????

I used to think Canadians were a smart people, one’s well educated and adaptable. Worldly and responsible, alas they are just like those south of the border but WORSE, were given the future and ignored it.

It’s getting harder and harder everyday to be a proud Canuck!

#124 golden on 09.23.09 at 7:25 pm

Housing priced in gold.

RE is down by 2/3rds priced in gold since 2005

Hows that for purchasing [email protected]!

#125 EW on 09.23.09 at 7:46 pm

I suggested to my brother-in-law that he sell his house in San Diego back in March 2007. He like many others thought the prices would never fall as San Diego had the best weather, a great retirement community, a vibrant Asian community. California is like the entire Canadian market!

His house hit a value of just over $ 700,000 – now it’s at $ 300,000 and dropping. No worries though as he gets 3 military pensions and owns many properties (all paid for) in Asia. He’s ok – but as per a report I read in 1998! (11 years ago), it won’t be over until about 50% of all US mortgage holders have negative equity.

The situation in California, Florida, Michigan, Nevada, Arizona and other US states should flash a major warning just how quickly and how far prices drop. This isn’t the first bubble – many people have lost everything in past bubbles from the Florida RE bust in the mid 20s, to the Texas and Alberta bust as oil prices crashed in the 1980s. Tulips, pet rocks and houses.

FHAs don’t hit for another 30 months, CMBS (commercial RE) doesn’t get deadly serious until the 2014 – 2017 time frame yet it’s already making headlines. Option-ARMS and Alta-As are just starting and won’t peak until 2011. Prime, near-PRIME and Jumbos are in a world of hurt and it’s just getting going as job loses mount and people make strategic decisions to foreclose. How about all the “shadow inventory” – heck, banks don’t want the property back! Wave after wave after wave for many more years – perhaps an entire decade. Think Toronto or Vancouver is more important than California or the USofA?

Basically, the low end (sub-prime) warm-up is over and it’s all moving upscale. IMO, his house will end up at BELOW $ 150,000, currently $ 300,000 and down from $ 700,000 in mid-2007. I told him to expect a 60 – 90% drop back in March 2007 so he’s now within my target price range. Btw, many of the excuses were the same as what I heard in California and variation on the ones I heard for the tech bubble prior to it’s collapse. It’s always fun to see people work so hard to justify insane prices at the top of a bubble.

It’s no different up here in Canada. When it’s all over many people’s heads will be spinning at just how fast and how far values will have dropped.


#126 FTHB (forget that house buying) on 09.23.09 at 7:50 pm

.#108 Kash is King on 09.23.09 at 3:45 pm
RE: baking soda as cure for cancer

Not going to happen. Sure, maybe some cancers respond to baking soda. Cancer is way too diverse to be treated with one therapy (I’ve spoken with experts in the field, and I asked them where is cancer therapy going to be in 50 years? Their answer: “specialized treatment specific for the type of cancer you have”). Cancer is way too diverse to have a ‘magic bullet’. (i.e. it can be caused by mutations in tumour suppressor genes, oncogenes, by retroviruses, by chronic inflammation/irritation, by reactive oxygen species, by chemicals that form DNA adducts and the list goes on!!)

If it’s too good to be true, it likely is.

#127 Kash is King on 09.23.09 at 8:26 pm

#126 FTHB,

I certainly won’t pretend to be an expert, so here’s a link to Dr. Simoncini’s site Cancer is a Fungus

#128 Calgary_rip_off on 09.23.09 at 8:31 pm

Hey Garth,

Your nostradamus jr. reader suggested Iran or Arizona. May I suggest Katy, Texas? Texas is a great state for real estate!!!! You actually get a decent house for the right price. Check out these listings:

That $110K house in Calgary would likely be $400K in Calgary. This is why homebuyers here are so clueless.

#129 Basil Fawlty on 09.23.09 at 9:45 pm

“You are wrong. As I have pointed out several times, the government is helpless to control rates so long as it is issuing massive amounts of new debt. If it were to buy its own new bond issues, the dollar would migrate to 40 cents, and you’d find out what a depression is all about. — Garth”
Maybe Canada will not do this Garth, however it is effectively happening right now in the USA. Do you acknowledge this?

No it is not. You do not understand QE. — Garth

#130 FTHB (forget that house buying) on 09.23.09 at 9:49 pm

#127 Kash is King on 09.23.09 at 8:26 pm
Funny that he’s selling a book eh?

How about these links for ya:
(Oh, I guess candida has ready access to the pancreas eh?)
(hmmm, inflammation and viral infections don’t quite sound like candida do they?)
(is yeast a genetic mutation? I don’t think so!)
(no mention of yeast here…guess they were just blind?)

And all these references were peer reviewed by experts and by individuals that are NOT selling books for a profit…

#131 taxpayer like you on 09.23.09 at 9:50 pm

128 CRO

So why arent you living in Texas? (just askin’)

Garth/72 Guy re My view @68

Please read “smoke and mirrors” which explores this
arguement in detail (the whole book as I recall but I’ve lent my copy and havent got it back) and basically concludes that under most circumstances the pay mortage down beats the RRSP.

72 Guy – the TFSA only works for the first $5K.

#132 dave99 on 09.23.09 at 11:57 pm

#100 your_missing_the_point_AND_the_peak

You are a moron. The worst kind – who thinks he (I presume you are a he?), knows what he is talking about and presumes to lecture others with his poorly thoughtout and histrionic rubbish.

And what is with your name anyway? Isn’t “missing the peak” EXACTLY what everyone wants? To avoid buying at the peak?

No-one on this blog is saying don’t buy a home. We’re only saying don’t buy it at the peak. And don’t buy it under the misguided assumption that residential real estate is the “best” investment. When in truth it is anything but.

Truly. Your posts are the classic preachings of a man with his eyes willfully and tightly shut, and scornful at what these other people (eyes open) are talking about.

#133 Brad on 09.24.09 at 12:01 am


That website is a joke and the organization is a scam.

#134 absinthe on 09.24.09 at 12:58 am

@Kash is King: I have researched in this area. This is a hoax.
Without getting too far into it, I’ll confirm that there are indeed a whole bunch of different sorts of cancers brought about in different ways. Interesting fact: our bodies are built to slowly run down and age, and when our cells reach the end of their number of copies, cancer is a likely result. You can’t aim baking soda at evolution, unfortuantely.

#135 Investor on 09.24.09 at 2:16 pm

That comparison is so outlandish as most people outside of North America don’t live in homes, they live in apartments, so they are comparing apples to oranges.

#136 David Bakody on 09.24.09 at 3:33 pm

Garth has posted properties on this site that sold for twice and almost three times the amount of what I am posting here. There are more and I have show others before ….. so can anyone tell me why anyone in their right mind believing owning a home is everything would pay that kind of money knowing homes like this are available in Canada that are not that far from Mortgageville Canada, think this home is only about 1 1/2 hrs from Halifax …..

#137 David Bakody on 09.24.09 at 4:01 pm

#117 Let’s be realistic! on 09.23.09 at 5:06 pm

Sir/Madame …. of course Garth is talking about area’s of concern those being in the extreme bubble area. Please understand it was just such area’s that set the ball on fire in the US of A, California Florida and Arizona and it snowballed to area’s that could ill afford it being one horse manufacturing areas. So I think Garth is preparing us for the loss of real property values in Vancouver/BC, Calgary & Toronto GTA.

Garth ( I do not speak for him) has never said that those who live within their means and can afford to buy a home and seek out a well priced home to live in should not buy but should stick to their guns and not be influenced by greedy RE agents or bankers. In the ideal world 25% down (eliminating CMHC charges) and using and understanding a VRM and applying the good ode 40% rule for maximum debt to wage ratio is good practice. The fact you could have and did not ask your family for financial support once you left the nest is good ….dam good matter of fact so if you can now find a condo within the guidelines above go for it …. hello yesterday’s numbers mean nothing … years will be much different so be prepared, know the market investigate well and educate yourself and then leap. Bon Chance good luck ….and enjoy life.

#138 leaside_girl on 09.24.09 at 6:14 pm

Well i understand them. We are keep waiting and waiting for the buble to burst. Gess what. All of our friends are cashing in on the forst house and bought a second bigger in the last 2 years. Kids are going to private schools, vacations summer and winter and so on .
Yes I am jelous. I am keep waiting for the burst to say ha I was smart to wait but at the end my familly will rent and live in the rented apartment for ever. I am sorry but I think you are wrong and not buying in thelast two or three years was our worst mistake.

#139 [email protected] on 09.24.09 at 6:53 pm

Not sure if was ever mentioned on this blog but Mattamy in Milton is facing a lot of angry owners who were recently hit with an additional $7888 closing cost fee due to an increased city development charge that the city had informed Mattamy of since 2008 and now plan to pass the charge onto the homeowners in closing fees.

I guess Mattamy had hoped the city would not impose these charges as they claim Halton has one of the most expensive development charges in North America.

Actually I think other developers are in the same boat but are they passing along the bill to new homeowners in this manner or are they upfront about it or including it in the price?

#140 Basil Fawlty on 09.24.09 at 8:06 pm

“No it is not. You do not understand QE. — Garth”
The attached article by Rodrigue Tremblay professor emeritus of economics at the University of Montreal, discusses QE and it is rather simple. The Fed prints money and lends it to client banks, right now at close to zero interest. Some of this money is invested by the banks in Treasury Bills, because they pay higher interest and the banks pocket the spread. There is much more to the story as his article well explains.

#141 Jason Jackson on 09.25.09 at 5:22 am

A survey by the California Association of Realtors found that sales of California real estate have actually increased from the end of 2008 to the beginning of 2009. Survey respondents indicated that attractive prices and low mortgage rates were the leading factors motivating them to buy. The glut of bank-owned properties on the market has kept California’s housing inventory stocked, giving buyers many options. First-timers are leading the market spurred on by record low interest rates and the greatest affordability. Using the internet and area papers, you can soon get an idea of the market worth for different types of homes in the area. Identifying the right market & finding the best property holds the key to success. In fact there is a tool through which you can research, compare & identify best places to invest. Look into for more information.