Issues

issues1

Hear Garth
Toronto – Sunday 2:30 pm, ‘Word on the Street’
Queen’s Park. Just show up.
Winnipeg – Tuesday 7pm. Financial Seminar
Reserve a seat here.

If this blog’s a microcosm of Canada, the country has issues. Upwardly mobile young brats taunt old Boomer farts. Alberta property lords dump on fragile Ontarians. Delusional Lower Mainlanders seek approval for their craven excesses. Bewildered Haligonians wonder what the hell everyone else is smoking.

Without much doubt, we’re in a transitional economy, trekking from near disaster a year ago to a destination unknown. Housing is up. Stocks have gained 35% since the Spring. Money is still on sale.

But at the same time, credit card debt has exploded. Unemployment’s up, not down. And, as I mentioned recently, two-thirds of people say they’d be screwed if one paycheque was one week late. In short, the bulls may be suffering from premature elation. Because consumer spending accounts for 60% of the economy, we ain’t there yet.

But I’ll have more to say on this tomorrow afternoon in Toronto and Tuesday night in Winnipeg.

Meanwhile, here’s a little follow-up to recent posts.

From the brat kid in Toronto making $200K a year with his girlfriend:

Thanks for posting a response to my email in your blog. It’s pretty funny seeing all the comments from your readers, and while some are extremely helpful and constructive, a lot or just jealous haters. Why would I make up a situation to get free advice? If they really must know, I am in the financial services industry and my fiancee is an optometrist (she’s actually only 25 since she skipped a grade, that’ll make your readers cringe even more). Seriously though, where do we get a place for $300K? We want something in the city or at least close to transit/highways but I guess we can’t have it all.

From some obvious smart guy in Burnaby:

You are doing a fine service to the citizens of this great nation. Because of you, I finally convinced my father to list his ‘box in the sky’ today.  We bought for $416,000 in 2005 in Burnaby, BC.  We listed it for $505,000 today.  Can you imagine, half a million dollars in Burnaby for a place with NO LAND!! We are hoping for a greater fool.

My fingers are crossed and am hoping that we can pay off the mortgage, pay the agents, pay the bank, and walk away…. AND NEVER LOOK BACK.

It was your insight that convinced me that I had to get my father out of the market.  Thank you Garth.  I will let you know when it sells! –Aggressively Listed in Burnaby

From the 40ish dink in Vancouver who didn’t like my advice:

After reading this and your repeated, completely out-of-context use of my “buy now or never” line, I have to wonder if you treated your constituents like this. I sincerely hope not.

The issue remains. You don’t offer much that is concrete, and persist in calling people fools, while encouraging others to do so as well.

You seem to skirt the issues, assuming only greed and speculation. I am not greedy, and I don’t think prices will go up. The only real question is, will they go down significantly? It’s looking increasingly “foolish,” at least here in Vancouver, to wager money, never mind your future, on this possibility.

From a guy some place in the country:

Garth, thanks so much for your voice of sanity.  I just bought your “Greater Fool” book and can’t wait to devour it! Question: Are mortgages in Canada “recourse” or “non-recourse”?  If house prices nose-dive, can home debtors just send the keys in and walk away, or will they have to declare bankruptcy?  One thing that is killing California is that housing loans are non-recourse, so people are just walking away, especially the $0 down crowd.  Could the same scenario play-out in Canada? Thanks and looking forward to your next post!

The answer tomorrow.

83 comments ↓

#1 David Bakody on 09.25.09 at 9:03 pm

Well y’all must have heard by now ” Danya vu all over again” ….. Invade/ bomb Iran due to weapons of mass destruction or what? Economic sanctions even that will trigger higher oil prices ….oops did I mention higher oil prices, now what will that do a host of day to day staples of life? And just in time for Christmas and a long cold winter!

#2 Bast on 09.25.09 at 9:19 pm

Why We Should Listen to Historians Instead of Economists…one of the most cogently argued explanations of why this mess is not going to get any better:

http://tinyurl.com/ycw8eja

#3 blobby on 09.25.09 at 9:26 pm

“If house prices nose-dive, can home debtors just send the keys in and walk away, or will they have to declare bankruptcy?”

In Canada you cant walk away.. If you dont declare bankrupcy – they’ll come after you – usually 10 years down the line expecting payment for the difference between what THEY sold it for and what YOU owed them (plus 10 years interest)… Sure you can go bankrupt then (but after 10 years you might actually have savings!)

I’m new to this country – and even i know that! You need to do your research before buying a home – most people dont.

#4 jimmy on 09.25.09 at 9:58 pm

To the 40ish dink in Vancouver:

Read the blog! Prices will go down. Garth ain’t exactly making it hard to see where he stands on that. But as you said; ‘you ain’t buying it’. So go throw your money away on over priced R/E and stop asking questions of people who don’t tell you what you want to hear. Maybe a Remax Agent’ll has some advice you’d like to hear.

#5 TJ on 09.25.09 at 10:14 pm

I talked with a dear friend in Halifax. She and her husband sold a four bedroom home right on St. Margaret’s Bay -175 feet of waterfront, for $260,000.
$260 K in Vancouver, is a dumpster with no wheels.

Point is – with this country being so HUGE, the disparities are stark.

The JOB situation is going to be the new driver.
Still too many people have to leave little tenacious Nova Scotia, and work, ‘away’.

The valuations here in Vancouver brought much laughter and incredulity.

“And I suppose everyone drives a Beamer, too…”

Pretty much.

#6 Jsan on 09.25.09 at 10:18 pm

It really is amazing Garth how you seem to be the one lone “Sane” person in the media. Just like during the US housing Bubble, only a handful (or less) of people were sounding the alarm about the imminent housing crash while 95% of the rest of the media including the chairman of the Federal Reserve insisted that housing was fine and that there was no Bubble and would be no Bubble.

In Canada, the only side I ever hear is the “Rah Rah Real Estate” side driven by the snake Oil salesman better known as Realtors and Real Estate industry. You get non stop quotes in the Globe And Mail and other top media outlets and the only opinions on housing they ever seem to print are from the real estate industry, banks or mortgage companies. Geee, and we wonder why almost every last article on housing always has some sort of positive spin on it?

Garth, it is too bad you are not in politics as we need someone with good financial common sense in office. Do the politicians in power like Falherty care for one minute that people are getting themselves way over their heads in debt that will most likely crush them in the future? NO, all they care about is keeping the debt game going which gives the false impression that the economy is doing well when the reality is it is getting sicker and sicker as debt levels rise higher and higher.

#7 Harold on 09.25.09 at 10:22 pm

Again with the people who just have to have a place in a big city and then in the ‘right’ neighbourhood. What happens if you buy a cheaper place in a not so right neighbourhood? Is this all about one upmanship? Toronto or Vancouver have to be the only places I know where people brag about the neighbourhood they live in, e.g. the annex or the beach.

I’ve lived in a small town most of my life and wouldn’t trade it for triple the income in the urban jungle.

Another thing people rag on about when talking about ‘desirable’ neighbourhoods is the access to shopping, theater, entertainment, restaurants etc. In my brief experience with city living, lasting less than one year, I found that while I had access to all these things, I couldn’t afford any of them as I was blowing too much of my income on mortgage payments and property taxes. So I moved back to a small town and have never looked back.

#8 cox on 09.25.09 at 10:33 pm

from what I understand, cali mortgages are non-recourse…. until you refinance. almost all refi’s force the loan to become recourse. A lot of people are getting shafted by this fine print as they will now be on the hook if they can’t keep up with the new payments.

non-recourse loans aren’t killing california, it is already dead.
I have no problem with people walking away from a non-recourse loan. It was a business decision entered into by two willing parties. Maybe the bank should have considered lending standards when it made the loan.

#9 Joseph on 09.25.09 at 10:40 pm

I do think you are being hard on the guy from Vancouver. He genuinely seems to be a seeker; he just wants to know what he should do. I never discerned anything else from his questions but inquisitiveness. He’s in his 40’s, made the mistake of not buying in Vancouver 10 years ago, and is now paying the price for it. He’s aged and is still renting. What do you tell him? Nobody can figure out where the economy is really going – inflation, deflation, interest rates, currency crises, etc.. All these factors would play a role in the decision making process in terms of buying or not buying. Being in your 40’s and still renting is a real drag, but I wouldn’t dare venture a guess for him to follow. As one of my colleagues put it once, “At this point, my advice is as valuable or as worthless as everybody else’s”. You are in a difficult place, Mr. Vancouver. I hope you find the right way out.

#10 Best place on meth (aka NJ's Analyst) on 09.25.09 at 11:01 pm

You can’t walk away from your mortgage in Canada, which makes the decision to take out a 35 year mortgage at the top of the market all the more dangerous.

I’m going to sit back and watch the carnage, but don’t expect me to bail out these assholes with my tax dollars.

#11 Onemorething on 09.25.09 at 11:09 pm

All those owning RE (with less than 30% ownership) or thinking of buying, you are untouchable, go for it! I JUST DARE YOU!

Read this one kiddies, real facts, future direction of RE. Boomer or Brat, you will both loose.

http://pragcap.com/housing-more-trouble-ahead

btw lets just stop the ridiculous argument that Canada is different, it will follow not only the US down (finally) but will hold you to every freakin’ debt you owe for life!

CANADA, THE ONLY COUNTRY IN THE WORLD NOT TO SUFFER ANY CORRECTION TO DATE!

At least you can “Screw The Banks” in the US by walking away.

That with huge unemployment (for a decade) decreased pay, higher taxes! If you are in the financial services industry look forward to being ostracized and forced to apply that Engineering degree with a 60% haircut!

Oh yeah, your CV spells out black sheep dealings in Financial Services and you have no practical Engineering experience. Sorry, I have more qualified candidates! Bye Bye!

#12 s33knges8 on 09.25.09 at 11:11 pm

Portland and Seattle prices doubled in 10y between ’90 and ’00 – that is 7.02 percent compounding per year for 10 years. A Vancouver house was $350k in ’90 and around $400k in ’00 (if it followed Seattle and Portland, then it should have been $700k). If Vancouver housing prices followed a 3% inflation rate, then that $350k house in ’90 should be $632k in ’10. It looks like we have just overshot the $700k mark again with more than a year to go to reach our 2010 milestone. Does this imply that we are only 11% ($70k) out of sync with where we should be in Vancouver? Garth, do you think we should buy given the lower interest rates?

#13 Gord In Vancouver on 09.25.09 at 11:16 pm

The answer tomorrow.
_____________________________

Now you’ve made me feel like a kid before Christmas !

It’s good to see that at least some segments of the mainstream media are starting to pay attention to Canada’s “forgotten” people:

http://www.globeinvestor.com/servlet/story/RTGAM.20090925.wcover0925/GIStory/

#14 Jim on 09.25.09 at 11:49 pm

Busts make individuals wealthy. Not booms or big salaries (unless you’re a bank CEO) as many people believe from the media.

Soon after graduating from university with no money, a job and a little more than $40K in student loans, my wife and I were lucky enough to experience the 90s RE bust, 2000-2002 tech stock bust and the 2008 financial crisis stock bust.

I would be lying if I told you that we bought at the bottom of every bust. My crystal ball isn’t that good. But you don’t need to be very good (or smart if I’m any example) when you’re buying in a crashing/fearful market. It’s like shooting fish in a barrel – after the water has run out.

We purchased the appropriate asset at what we deemed was a reasonable price (ie. buying RE when RE was falling, buying stock when stock prices were falling). We bought rental RE in the late 90s, we bought Berkshire Hathaway after it went from $2700 per class B to $1400 during the tech meltdown and in the last stock market bust we filled up our RRSP, TFSA and non-registered accounts with (gasp) retail stocks that got utterly decimated (eg. Fossil, The Buckle and American Eagle).

So now, 10 years after graduating university, we’re millionaires in our 30s and live mortgage-free. It didn’t take intelligence (I failed 2nd year university), nor did it take the advice of a financial planner (we don’t use one) or crystal ball (mine never works).

Busts create wealth. Not booms. What are we doing now? We’re waiting (again) for the next asset bust. Maybe it will be RE (RE looks ripe and jucy – like a zit just before it pops). Maybe it will be stock. Whatever happens, we’ll be ready.

#15 Darren on 09.25.09 at 11:50 pm

Hey Garth,

Toronto, Queen’s Park, Sunday, 2:30pm, you say just show up. Inside? Outside? would like to come. But you do know it’s football season right?

#16 TheFirstRick on 09.26.09 at 12:24 am

I’m under the impression this blog photo is of a first time home buyer, visiting Grandma, hoping for a substantial downpayment and then reacting to the answer. Then again, I do have a creative imagination.

#17 Torquemada on 09.26.09 at 1:15 am

In Canada you cant walk away…I’m new to this country – and even i know that! You need to do your research before buying a home – most people dont.

Ummm…sorry to tell you this but you’re wrong…at least partially. But since you are new to this country I’ll cut you some slack. In this country, our Constitution sets out that property rights are a provincial matter.

You can’t make a blanket statement about the entire country. I practice law in Alberta and I can tell you that with some exceptions, one CAN walk away from one’s principal residence in this province.

It’s true that in some provinces, one cannot just walk away. However in all provinces, the cost involved in going after someone who probably doesn’t have attacheable assets, makes it very unlikely that a bank would ever come after you.

Then there’s the added issue that a bank may not even suffer a loss. I’m going to assume that anyone underwater is likely to have a CMHC insured loan. In this case, the bank is going to make an insurance claim from CMHC.

In this situation, CMHC would likely have a claim against someone who walks away from his/her mortgage (I’d have to see the insurance contract to determine whether the insurer has this right). But CMHC is probably even less likely to come after you than a bank.

So yes, do your research before buying a home. Hopefully you are a better researcher than Blobby though.

#18 InvestX on 09.26.09 at 1:48 am

In Canada, mortgages are recourse, which may partly explain why there will likely be a correction and not a crash like in the US.

#19 InvestX on 09.26.09 at 2:14 am

Ford to slash Canadian operations: CAW
Sept 25, 2009

Ford Canada intends to slash its Canadian manufacturing presence from 13 per cent to eight per cent of total North American production despite requests from its union to the contrary, the Canadian Auto Workers says

http://www.wheels.ca/article/782136

#20 Peter on 09.26.09 at 2:27 am

We are not JEALOUS, we are just thinking if you both are that SMART and as you are in the financial industry (means you do read economic news, pumped up reports from the banks and so called analysts and economists on BNN, bloomberg and CNBC), you must be very much FINANCIALLY SOUND and NUMBER SENSE than a normal joe or john who works at a plant….What I dont understand is that you are 26 and your gf is 25, both has high education and high wages (as you claimed), why would you still ask for an advice to buy a house or not (If you both can pay off a $ 500,000 in literally 4 or 5 years, assume you already took a 50 % tax cut) !!

#21 The Vulture on 09.26.09 at 7:59 am

Sweet Vindication For Garth

Garth Knows Best!

Time To Pay Attention to Garth if you have not already been doing so…

Here is an excerpt from the Globe and Mail today:

“The ‘peanuts’ offer

Will Jones counts himself among Canada’s part-time unwilling.

When he landed a well paying job at TransAlta Corp. in early 2008, running the electricity company’s computer systems, one of the first things Mr. Jones did was buy a house.

He wanted to live the homeowner’s dream, so he plunked down mid-six figures on a full-sized house in Calgary, which he helped finance with a salary that paid him a comfortable $120,000 a year.

It didn’t last long. Things took a turn in February when the slowing economy humbled energy prices and TransAlta, like many companies, began to slash costs. As one of the newest additions to the company, Mr. Jones, 57, was among the first to go.

Immediately, he began looking for work, but found little in the form of full-time opportunities. Instead, Mr. Jones was forced to pick up a few days of work each week to try to make ends meet.

“When you’re unemployed, people can catch you at nickels and dimes,” he said. “They know it when they have got a guy who’s probably worth a fortune, but he’s unemployed and he’s got a mortgage. So they offer him peanuts. And you take it because you’re scared. And because three days a week is better than no days a week.”

In June, unable to keep up with his mortgage payments, Mr. Jones sold the home in a hurry, in a slumping real estate market. The sale came at a considerable loss, forcing him to absorb tens of thousands of dollars on the mortgage. He now continues to make monthly payments, albeit smaller ones than before, on a home he doesn’t live in. “I was falling so far behind that they were going to take it anyway,” he said. ”

Thanks Garth for saving my backside many times over…I have been listening and reading your works for a number of years now and spreading your message to everyone that I know. I also have introduced a number of influential and not so influencial business people to your website blog and have given many copies of your books away as gifts to help others understand the real deal and not mass media pablum. Keep up the awesome work.

#22 DaleFromCalgary on 09.26.09 at 8:50 am

During the lost decade of the 1980s, many Calgarians walked away from their houses or sold them to dollar-dealers. I don’t recall too many people being nailed for their other assets by the lenders, but there were a lot of lenders who suddenly found themselves in the rental property business. Generally the people who walked away had everything tied up in the house and were unemployed or minimum wage, so there was no point in chasing them.

If a few people default, the lenders will come down hard. If a flood of people default, the lenders can’t handle the overload so people get away with light sanctions or none at all. If you move to another province, the lender is not going to fight a long-distance legal battle.

It may, however, destroy your credit rating. This might not be so bad, because it will force you to live within your means and pay cash for everything or go without. Just like your grandparents used to do.

#23 Tony on 09.26.09 at 9:14 am

The US government didn’t buy stocks on Friday. Maybe they’re seeing how low the market indexes will drop before they start buying stocks again. The DOW is at least 60 percent overpriced right now making this the biggest sucker rally ever even topping 1933. Price per earning ratios could fall from 26 to 7 when the market tanks again. When the stock market double dips housing will soon follow.

#24 $fromA$ia "Garths Nugget Boy" on 09.26.09 at 9:49 am

Well, looks like the 90% of the population that still has jobs is still buying houses where needed, regardless of the times. Mortgage lending is still a big joke, everybody can play. Whats the point buying a home in a price war with a bunch of financialy illiterate idiots and a wreckless government desperately holding on to power.

Garth, you think we are in a deflationary environment???

Look at homes inreasing in values, it’s not deflationary.

Look at the medium coffee from Tim Hortons. Canadians beleive that they are different from the Americans, they are told their banks are different. They are told their country is different.

It’s not see Cheep money will end with massive inflation. Money hoarders who profited from RE slales will be floodig the economy with mney when they realise that inflation will be higher than their 5-7% bonds or even to the extreme when 20% interest at the banks doesn’t keep up with inflation.

Am I nuts? Big tickets items (home) with no fundamentals.

I get it the banks are FUND ing the Mentals!

#25 Blobby on 09.26.09 at 9:50 am

@#9 Joseph :

You seem to be under the delussion that you HAVE to own property?

#26 David Bakody on 09.26.09 at 10:41 am

#23 Tony on 09.26.09 at 9:14 am

Bang on Tony bye …… perhaps all dat dair bailout money and friendly spending moolah just might of had something to do with the rise ….. so now their hopping by unveiling what they have know about for some time (Iran & the bomb) would light a fire under the public and justify high oil prices again driving up commodities? who knows? No problem all those greater fools can just ask for a big raise and the boss will say: Sounds good to me why didn’t you ask sooner
hahahahahahahahahahahahahahahahahahahahahahah

#27 rory on 09.26.09 at 10:42 am

Okay, now I have issues …the MSM now officially deserves it …nice guy but hero … WTF? …does anyone know how ridiculously easy and safe what he did …no one was at risk here…all he did was apply his knowledge across to someone else…heroes risk their lives ….jeez.

I guess any press is good press but this is got to be embarrassing for the guy….if not it should be.

From today’s G&M:

“Hot: Deepak Obhrai .

The Alberta Tory MP is being hailed a hero after helping a woman this week on a flight from Ottawa to Calgary.

The woman became ill, and a concerned flight crew asked if anyone had insulin.

Mr. Obhrai, a diabetic who carries an insulin kit, helped the woman, who he described as “disoriented.”

Using his kit, he took a blood sample, determined that her sugar levels were low and then asked the flight attendants to give her orange juice.

That stabilized her, he said, and she was able to walk off the plane.”

#28 Boombust on 09.26.09 at 10:44 am

“We bought for $416,000 in 2005 in Burnaby, BC. We listed it for $505,000 today.

Good luck with that!

With the number of condo tower completions coming online in Metro Vancouver added to the ghost towers already standing, you’ll be hard pressed to fetch that price.

Looks ike YOU were The Greater Fool. Sorry chum.

#29 jess on 09.26.09 at 12:05 pm

retraining programs stalled and overwhelmed?
http://news.therecord.com/News/Local/article/603874

#30 John Warnock on 09.26.09 at 12:12 pm

RE: Today’s photo
In 1994 I gave up renting bought an older (1910) house in Regina, which had been empty for a year, and it was being held by a finance corporation. An elderly couple had owned the house clear title. Their son came to them and asked them to put up the house as collateral in support of his business. They did so. The business failed, they lost their house and were forced to move into an apartment in a provincial government supported seniors home.

I hope she and her dog held to that “No!”.

P.S. I got the house for $30,000. I am not kidding. And well constructed with B.C.’s Douglas fir.

#31 Justin on 09.26.09 at 12:30 pm

Without much doubt, we’re in a transitional economy, trekking from near disaster a year ago to a destination unknown. – Spain appears headed toward Depression. “economy to contract for the next three years, with a peak to trough loss of over 11pc of GDP.”

Housing is up. – Irrational exuberance for some and a desperate gamble for others.

Stocks have gained 35% since the Spring. – Pure speculation based on the new, but temporary “Dollar Carry Trade”

Money is still on sale. – Well two options are coming like a Locomotive. 1. Monetize into hyperinflation or 2. Raise interest rates and create great depression deux.

#32 Nostradamus jr. on 09.26.09 at 12:38 pm

It isn’t called Vangrouvy for nothin.

…Where the world’s Grouvy, Elite, Cultured and Wealthy, gather and live, safe from the rest of the world as it dithers and slithers into oblivion.

Nostradamus jr.

#33 Men With Hats on 09.26.09 at 12:50 pm

No one gives a rats fat ass how much dough you make junior .
You came here to gloat and tell the world what a smooth operator you are .
One thing is certain . You do not have seniority at your co.and the jobless rate is still climbing .

#34 Ulsterman on 09.26.09 at 12:52 pm

Although i’m a bear, i’m surprised at the absolute certainty with which many “bears” state their opinions. You are correct – the fundamentals are all wrong, but as Joseph mentioned earlier, if you are in your 40’s and didn’t buy 5 or 10 years ago in Vancouver then you are kicking yourself.

Many made the mistake of latching on real-estate bear blogs and have watched the prices just soar.

Condos off Commercial Drive in Vancouver have increased 100-200% since i considered buying in 2001-02. I was planning to buy one to live in and a couple to rent out. I choked when they jumped about 20% in 6 months and assumed they were overpriced. Now look at them.

I don’t think there is much REAL upside to prices, but i’m not convinced there will be a correction in Vancouver exceeding 20%. That still won’t help most people.

Also, i’m skeptical that most renters save the difference between their hypothetical mortgage payment and their current rent. For MOST people i’m convinced it just gets spent much in the same way that a small annual pay rise gets absorded into daily spending. The forced saving aspect of a mortgage with a final date for the loan being paid off is a very attractive discipline in this temting, consumer-orientated world.

There’s too much congratulatory back slapping going on on this board, as if the renters were all financial sages and the owners all morons. I’m just not so sure that’s the case.

#35 kc on 09.26.09 at 1:15 pm

“20 Peter on 09.26.09 at 2:27 am We are not JEALOUS, we are just thinking if you both are that SMART and as you are in the financial industry (means you do read economic news, pumped up reports from the banks and so called analysts and economists on BNN, bloomberg and CNBC), you must be very much FINANCIALLY SOUND and NUMBER SENSE than a normal joe or john who works at a plant….What I dont understand is that you are 26 and your gf is 25, both has high education and high wages (as you claimed), why would you still ask for an advice to buy a house or not (If you both can pay off a $ 500,000 in literally 4 or 5 years, assume you already took a 50 % tax cut) !!”

Face it … these 2 are “book smart” and know NOTHING about the real world. they think they are immune to the world as they hold these higher paying jobs fresh out of school and the gravy train will last forever. They no NO adversity of life sheltered under the apron flaps of home. When life throws them a curve ball and hits them in the nards they will cry the blues … oh poor us we lost everything… come on, take your lumps it will make you stronger in the long run and give you some real street smarts about the real world.

go out and buy that mansion in the sky is all i can say. if you were so “smart” you wouldn’t need to ask in here… should we buy 700K money pit to look the part of success>>????

cry me a river.

cheers

#36 Evangeline on 09.26.09 at 2:25 pm

((With the number of condo tower completions coming online in Metro Vancouver added to the ghost towers already standing, you’ll be hard pressed to fetch that price.

Looks ike YOU were The Greater Fool. Sorry chum.
))

if the economy were based on the currency of meanspiritedness you’d undoubtedly be wealthy

thing is, at it’s deepest level, I actually do think there is a direct connection between genuine and lasting economic prosperity and the operation of good human qualities in society

far as I can tell Garth’s jibes are pointed but they are not gratuitously mean

#37 $fromA$ia "Garths Nugget Boy" on 09.26.09 at 2:28 pm

#34 Ulsterman-

“you are in your 40’s and didn’t buy 5 or 10 years ago in Vancouver then you are kicking yourself.”

Uh, excuse me but markets are cyclical, Real Estate included.

Conservatives medalled with the lending practices and eligibility. Everybody and there dog is a Real Estate Player now… We’re in a bubble, buddy.

3 Things can happen

1.) Inflation justifying high home prices.

2.) Housing correction through raised rates.

3.) Most likely 1&2 to the likes of -35%.

The time of reconning will be after 2010 Olympics and 1-3 years down the road when inflation comes from all this printed money. BTW, me thinks inflation is already here, just that the Governmant masks their findings and skews/ spins the numbers.

#38 Patiently Waiting on 09.26.09 at 2:33 pm

Ulsterman,

Let’s say you have buy a 30 year-old East Van condo for $300K on a 35 year amortization. What do you have at the end of 35 years? A 65 year-old condo. Yuck. That’s worse than nothing.

#39 Makeorbreak on 09.26.09 at 2:33 pm

A look at tunnel living:

http://www.thesun.co.uk/sol/homepage/features/2651937/The-people-living-in-drains-below-Las-Vegas.html

#40 CalgaryRocks on 09.26.09 at 2:41 pm

#23 Tony on 09.26.09 at 9:14 am

The US government didn’t buy stocks on Friday. Maybe they’re seeing how low the market indexes will drop before they start buying stocks again. The DOW is at least 60 percent overpriced right now making this the biggest sucker rally ever even topping 1933. Price per earning ratios could fall from 26 to 7 when the market tanks again. When the stock market double dips housing will soon follow.

It’s a great time for morons like Jeff to invest their house money in the stock market. Go ahead Jeff, tell us what you’re buying, shorting, whatever, we’ll see how you did 1 year from now.

#41 Gord In Vancouver on 09.26.09 at 2:50 pm

#34 Ulsterman

I agree with most of your sentiments but few people ever capitalize on all the “coulda, woulda, shoulda” opportunities that pop up in their lifetimes. How many smart people bought or held onto shares of Microsoft in the spring of 1986 or Walmart in the mid 70’s?

For now, Vancouver (also Kelowna/Victoria) real estate is also one of the above but hardly anyone knew ahead of time that interest rates would be slashed to record low levels, nothing down/40 year mortgages would be introduced in 2006, and that the asset would become a trading tool of speculators.

I don’t think there is much REAL upside to prices, but i’m not convinced there will be a correction in Vancouver exceeding 20%. That still won’t help most people.
______________________

By now, most people have given up on predicting what Vancouver’s downside will be but, IMHO, those who wait won’t kick themselves the way 2000/2001 sideline sitters did. If Vancouver’s job market doesn’t improve and the fed. govt. doesn’t extend EI benefits, we’ll have an entirely new ball game.

#42 Makeorbreak on 09.26.09 at 3:06 pm

Is there such a thing as a ‘jobless recovery’?

http://www.theglobeandmail.com/report-on-business/crash-and-recovery/the-perils-of-a-jobless-recovery/article1302330/

#43 Leave it to Canadian Beaver on 09.26.09 at 3:13 pm

Harold #7 please keep your wisdom a secret.

Never understood the Mega City concept.

Don’t cities attract rats?

I’m lucky to be living far far away from a Big Smoke.

Took what I liked from Garth’s pages, chucked the rest

and saved a pile of dough on a nice shack.

Cheers

#44 Fred on 09.26.09 at 3:26 pm

“Could the same scenario play-out in Canada? ”

I’d say the situation is perfect foe Alberta. With a bankruptcy exemption of $40K per owner, effectively in a household of 2 people with substantial debts, a sinking house value, Albertans could use bankruptcy to cover their butts if prices drop significantly. Banks holding the mortgages on the sinking RE would be hung out to dry.

And before the flames start Bankruptcy Exemptions are provincial. Ont as an example provides nothing in the way of an exemption for a primary residence. (BC=9K to 12K, NFLD=10K)

#45 Joseph on 09.26.09 at 3:56 pm

With respect to Blobby #9’s comment,

“You seem to be under the delusion that you HAVE to own property?”,

Ulsterman #25’s comment answered the question for me. I would add that once a person pays off his house, his only rent from that point forward are the property taxes and the occasional upkeep (new roof, furnace, etc. ).

#46 Peter Wiener on 09.26.09 at 4:04 pm

#9 Joseph

So what conditions extant tell the guy to do is wait. When you don’t know what’s next as per your posting, how can you prudently counsel someone otherwise?

# 25 Blobby

Exactly! Where does it say that you must buy now or at all. These are arbritrary time boundaries people place on themselves (eg., “buy now or never”) are used to force a decision they either don’t want to or can’t make. It is ridiculous and almost certainly the wrong thing to do.

#47 Peter Wiener on 09.26.09 at 4:19 pm

#34 Ulsterman

Your post makes me laugh. You talk as if there is no HISTORICAL PRECEDENT for a crash in Vancouver RE or for Canada in general. Also, if eating Kraft dinner for the first 20 years is required to have a place that you are RENTING from the bank and the city anyway is your idea of living, you can have it. Housing is way, way too large of an expense for most Vancouverites to not to affect their QUALITY OF LIFE one way or another, in the short term or long term. (Think about ALL of the implications of too high realty prices.)

It is PRECISELY people like this mid-40’s couple that buy at the top as they only review the run-up in prices as the applicable history and discount the fundamentals that long term price action works on. Classic bubble mentality!

Their desire to purchase in Vancouver now is exactly the reason buying a place in Vancouver is to be avoided.

#48 Peter Wiener on 09.26.09 at 4:28 pm

#32 Nostradomus Jr.

So what are you doing living there?

#49 ted on 09.26.09 at 4:53 pm

ulsterman good post. I am a bear. I don’t think I am smart for not buying(well when it was affordable I was in no position to) I just don’t think I am stupid to buy now. Of course I am not sure as you pointed out the insanity in Vancouver has been going on for a decade now.

#50 ted on 09.26.09 at 4:56 pm

AS for the kid who thinks we are all haters to elaborate on what #20 Peter says. I agree with him and would like to add. You are either lying or not sincere. Either way you are here to be a bragart. It adds nothing to the real debate about affordability.

#51 Live Within Your Means on 09.26.09 at 5:38 pm

#27 rory on 09.26.09 at 10:42 am

In today’s world everyone is called a ‘hero. How must that term really diminish the real heroes of those that gave their lives in the 1st & 2nd WW’s.

#52 jess on 09.26.09 at 5:50 pm

nouveau poor

“This month, the Guardian revealed the Caribbean tax haven was forced to ask the Foreign Office permission to borrow £278m from banks to repair huge deficits. The FCO refused, advising the island’s authorities to impose property or payroll taxes. Talks are continuing over a £30m emergency loan package. If the money does not arrive soon, the island’s government admits it will not be able to pay its civil servants.

Anthony Travers, chairman of the Cayman Islands Financial Services Association and its stock exchange, argued: “The move from an indirect to a direct system of taxation is a seismic shift which has not been thought through and which is not justified on the facts.”

The territory is the capital of the world’s hedge fund industry, which has assets of $2.3tn (£1.4tn) parked in the island according to figures last year, and it is the world’s fifth biggest banking centre. Its GDP places it as the world’s 12th richest jurisdiction, despite a population of only 51,900.

Despite its huge wealth, the overseas territory is strongly resisting pressure to levy taxes to escape a black hole caused by the cost of a large public infrastructure programme and dwindling licence fees from the financial institutions.

“I have canvassed senior business players in Cayman and they have indicated that at the first sign of a payroll tax they will have to consider their options,” said Travers. “I believe this will inevitably lead to job losses and it will affect both the highly paid and more junior members of staff and lead not to a revenue increase, but a decrease.”
Difficulties in the Caymans come at the same time as Switzerland has been taken off the OECD’s “grey list” for signing its 12th information-sharing agreement with another country. Switzerland was promoted to the “white list” as G20 world leaders in Pittsburgh vowed to deploy sanctions against countries not complying with OECD tax protocols. There are 22 tax havens on its grey list.

In two weeks, the task of assessing how each country complies with anti-tax evasion measures will begin, with each OECD country being subjected to a peer review. Further pressure on the UK’s tax havens is likely to come next week at a meeting of Commonwealth finance ministers.
guardian uk

#53 Makeorbreak on 09.26.09 at 6:20 pm

Where real estate is still hot: your plot in the cemetary…

http://online.wsj.com/article/SB20001424052970203278404574420942782020938.html

#54 Jonathan on 09.26.09 at 6:21 pm

#18 InvestX

“In Canada, mortgages are recourse, which may partly explain why there will likely be a correction and not a crash like in the US.”

So if stocks were recourse that would stop them from crashing in price? If cars were recourse, would that stop them from crashing in price?

Prices crash because they get too high and b) require ever increasing growth in debt to support the price growth.

Check and Check.

Recourse would in fact make matters worse, as noone is going to jump in to buy a home in a deflating market knowing that if the market continues to deflate, they can’t just walk away.

Most of the people in the United States who are not foreclosing bought after the bubble exploded and thought they were picking up a good deal.

#55 Jonathan on 09.26.09 at 6:28 pm

I noticed TV commercials for Concord CityPlace condos in downtown Toronto. For those who don’t know, this is probably the largest condo project in the history of Canada (like ten plus condos).

For almost a decade they haven’t done any advertising. Now this. Makes you wonder if they are freaking out over all the completions coming up this winter.

Also noted that they are putting in an 8 acre park. I thought they had plans to continue to build on this land. I either had this wrong or they are pulling out of the condo construction early.

#56 David Bakody on 09.26.09 at 6:29 pm

Do not know what the rest of Canada looks like but here in Nova Scotia having made a couple or so trips to the country side I have noticed far more For Sale signs than ever before. Kids have left town or country to seek employment and the older people are moving upstairs or into senior homes leaving just about everything behind.

#57 Live Within Your Means on 09.26.09 at 6:35 pm

Supper is almost ready. Just want to say that I seem to recall in the early 80’s listening to the radio late at night in my bedroom in my small 1 bedroom apt about the price of Vancouver RE. It might have been Jack Webster talking. I initially couldn’t believe the cost. But I had visited an old g’friend in Vcr. not too many years before, thinking I might move there. Back then I saw how over priced RE was in comparison to Mtl. and I didn’t think the quality of life much better.

#58 Jonathan on 09.26.09 at 6:41 pm

So this rich brat from yesterday works in the financial services industry but can’t make any financial sense. Well he must be the CEO with an economics degree with that track record. But seriously, c’mon. Optometry and financial services for newbie graduates doesn’t average 200K, it’s more like 55K & 65K. Afterall you don’t have any experience to use to command much. I’m just so use to people coming in here and bragging using inflated salaries. It makes these statistical improbabilities like these young guys even more improbable.

#59 Blobby on 09.26.09 at 7:08 pm

@Joseph : “Ulsterman #25’s comment answered the question for me. I would add that once a person pays off his house, his only rent from that point forward are the property taxes and the occasional upkeep (new roof, furnace, etc. ).”

… However, it’s taken you until your retirement to pay it off, maybe you had to take retirement late to be able to finish paying it.. Subsequently you have no savings no nothing going into retirement… And So you have to sell the house you’ve been scrimping and saving for all these years to pay for your retirement.. And are now back to renting again.

Then you factor in that house prices rarely over 25/30 years perform better than inflation, the amount of interest you’ve paid on your loan, repair costs, taxes, yadda yadda.. and realise that you’ve LOST money on your “investment”..

And the person who’s been having the easy life renting his entire life, saving/investing into a well diversified portfolio (instead of putting all his money into property), is in the same position as you are… BUT he’s got more money to his name, and he’s been able to AFFORD to :

A) move around see the world
B) have a fun life spending his money on FUN things and not having to worry about paying off his mortgage.

But yet Canadians (especially it seems in BC) seem to think that unless you own a house – then you’re poor!

People dont seem to be able to think these things through…

#60 jess on 09.26.09 at 7:09 pm

Overspending on Debit Cards Is a Boon for Banks Sign Published: September 8, 2009

In fact, banks now make more covering overdrafts than they do on penalty fees from credit cards.

But because consumers use debit cards far more often than credit cards, a cascade of fees can be set off quickly, often for people who are least able to afford it. Some banks further increase their revenue by manipulating the order of a customer’s transactions in a way that causes more of them to incur overdraft fees.

“Banks will let you overspend on your debit card in a way that is much, much more expensive than almost any credit card,” said Eric Halperin, director of the Washington office of the Center for Responsible Lending

According to a 2008 F.D.I.C. study, 41 percent of United States banks have automated overdraft programs; among large banks, the figure was 77 percent. Banks now cover two overdrafts for every one they reject.

In all, $27 billion in fee income flows from covering overdrafts from debit card purchases, A.T.M. transactions, checks and automatic payments for bills like utilities; an additional $11.5 billion arrives from bounced checks and other instances in which banks refuse to pay overdrafts, Mr. Moebs said.
http://www.nytimes.com/2009/09/09/your-money/credit-and-debit-cards/09debit.html?_r=1

http://www.pbs.org/wgbh/pages/frontline/creditcards/

#61 jess on 09.26.09 at 7:16 pm

Is silence consent?

As the recession in Europe deepens, the ever-present threat of fraud grows stronger. The Ernst & Young 2009 European fraud survey reflects the views of over 2,200 individuals – from the shop floor to the boardroom – in major companies in 22 countries across Europe.

Their insights show that there is an alarmingly high tolerance of unethical business behaviour within organizations. The survey reveals that many employees would tolerate unethical behavior, including bribery by their company, in order to survive the current economic storm. Indeed, senior management are even more likely than rank and file to condone activities such as cash bribes and financial statement fraud.

The research also suggests that employees expect regulators to do more to protect them from wayward management and to ensure their business leaders are compelled to conduct business in an ethical manner.

Other key findings:

Our survey respondents believe the likelihood of fraud and corruption is set to rise further still. 55% of the respondents expect corporate fraud to increase over the next few years.
Corporate responses to the downturn can create new opportunities for fraudsters if staff redundancies open gaps in financial controls. 36% of our respondents believe that normal policies and procedures are likely to be overlooked as staff redundancies are made.
The trend of consolidation during an economic downturn can also disrupt ongoing efforts by corporates to prevent fraud. Almost half of our respondents believe that the differing standards of behavior that are held by two merging companies poses a major challenge to anti-fraud efforts.

http://www.ey.com/GL/en/Services/Advisory/Fraud-Investigation-and-Dispute-Services/European-fraud-survey-2009–Is-integrity-a-casualty-of-the-downturn

#62 Keith in Calgary on 09.26.09 at 7:26 pm

#42 Make or Break…..

That was a great article. I for one believe that the term “jobless recovery” is a political phrase designed by the governments economic advisors who created it to blow smoke up our collective asses when things don’t get better.

You cannot have an economic recovery with an aditional 500K people out of work in Canada and no job creation.

#63 Vladman Across The Water on 09.26.09 at 7:53 pm

Greetings to one and all from The Vladster in the bowels of Maple Laugh Gardens, where sea anenomes, pizzas with broccolli, fresh fruit and anchovies are happily playing Australian Rules Football.

Stifingly hot in the world now, and evolving into molten lava.

Some may recall that a few years ago, Sadaam was going to ditch the US$ and switch to (either) the Euro, Ruble or Yuan; dubya and others would have none of that and hence, Iraq was illegally invaded, Sadaam toasted and the US completely destroyed a once-beautiful country.

Fast forward Iran. The only difference this time is that a few days ago, Iran publicly invited the IAEA, the UN and a few others to inspect their facilities and, from what I gather, the IAEA will have actual control over building their second nuke power plant.

No reason for another illegal invasion, right? WRONG!

A few days ago, Iran dumped the US$ and went via the Euro, which now gives others — Japan (which had already started moving away from the US), Russia, China and plenty of other countries reason to ditch the dollar and use other alternatives, mostly the Euro.

Apparently, for reasons unknown to moi, the US$ may rise over the next while as commodities, stocks, etc. go the other way; then, all change.

Either the WH will take a protectionism and nationalization stance, or an unexpected war will start somewhere.

Three guesses as to the location, and the first two don’t count, but figure out who is goading the US and there is your answer.

Chances are good that a few years from now, the planet will have changed somewhat from what it is now.

Toronto — great place for a holiday, but all things considered, I’d rather be in the Okanagan, so we’ll be back in a couple of weeks or less.

Prost!

#64 john m on 09.26.09 at 8:11 pm

” I am in the financial services industry and my fiancee is an optometrist (she’s actually only 25 since she skipped a grade, that’ll make your readers cringe even more)”??????????????——–cringe?..are you shitting me?…there are more unemployed optometrists than there are carpenters……..and you work in the financial services field …….hmmmmm now wow theres a big paying job……….as “shania twain says in one of her songs”——–you don’t impress me much :-)

#65 Grantmi on 09.26.09 at 8:17 pm

Interest note in Today’s Van Sun.

Shifts in lending policies.

No more OVERTIME can be included in your yearly income. AND for rental income when calculating how much a home-buyer could borrow is now reduced to 50%-70% from 80% of the rental income due to the current higher risk to default.

Gary Siegle – Invis (Vancouver Sun – Sept. 26/09)

#66 Grantmi on 09.26.09 at 8:19 pm

Sorry! The link – http://tinyurl.com/no-more-overtime

#67 Dan in Victoria on 09.26.09 at 8:21 pm

Post# 35 KC yeah pretty much what I thought “book smart”and a braggart.A few little real life lessons would do a lot of people a world of good.Some cases in point,Years ago our neighbours house caught on fire at night.I was the first one on the scene and was pounding on the door trying to wake them up just as i was getting set to kick the door down the neighbour opened it up,out now, i said your house is on fire.She looked at me like i was an idiot,for about five seconds. My other neighbour went by me like a frieght train ran up stairs and grabbed the two kids,and was back out, in he went grabbed hubby and out the door with him.I was in the garage pushing his boat and truck outside before it really got going.Burned my back and arms.Now all the neighbours were there,you know what? None of them did a thing, stood around all slack jawed.What should we do? Oh call the fire dept.Call 911,The other neighbour and i managed to get a couple of hoses going and sprayed it,till the fire dept arrived. My wife took the family into our house.
Another one from a few years ago,my buddy and i had driven into Ucluelet from Toquart bay to get some beer and fish ice.On the way back we came around a corner and there were some cars stopped with people looking and pointing down the bank,we slowed down and looked.A fully loaded logging truck had gone off the road and down into the trees.Where’s the driver was the first thing we said.All we got was some blank looks.Out of the truck we went running and down to the truck,running on top of the load we got to the cab and dropped down through the window,no driver.Oh Oh so we were scrambling around looking under the truck and the load when a guy yells to us.Its okay i’m out.He had been walking back up the road when one of the crummies stopped and picked him up.
My point is,theres a lot of talk,I have this job, i have this in the bank,but when it comes to the crunch,the people who have some experiences and common sense with lifes lessons are going be better off.They will know how to adapt to thier enviroment.

#68 artisuseless on 09.26.09 at 8:23 pm

I agree with #58 Jonathan.

Either this kid is lying (possible) or a beneficiary of nepotism (equally possible). Having the right relatives or friends-of-family can usually lead to several rungs higher up the corporate ladder than the average under-30. No, I’m not jealous, or even a hater.

Just old enough to have seen enough in life that parents don’t do their kids any favours when they don’t raise them to be fully independent in this culture, and old enough to know just how persistent a bad economy can be. Financial services is hardly ‘recession proof’, particularly in the GTA.

This economic crisis is only starting and if you don’t understand that, then your future in finance (unless you are a beneficiary of nepotism) may be more limited than you think. But you seem to be able to afford the big house, and that the big bucks are just starting to roll in, so why not go for it? Why read this blog at all except to brag?

But I really do think it is pathetic to earn six figures whilst mooching off of mummy and daddy because anything less than a straight transition from their nice house to a comparable one of one’s own would be just tooo hard and degrading.

#69 Grantmi on 09.26.09 at 8:25 pm

Spain!!! The first to blink!!! (But this won’t happen in the USA and Canada!!!!)

**********************

Spain Increases Taxes to Tame Deficit Amid Recession

By Emma Ross-Thomas

Sept. 26 (Bloomberg) — Spain will raise value-added tax and levies on savings as the government seeks 11 billion euros ($16.2 billion) to tame one of the euro region’s largest budget deficits even as the economy is still mired in recession.

Value-added tax will rise to 18 percent from 16 percent, and the reduced rate will climb one percentage point to 8 percent on July 1, 2010, Finance Minister Elena Salgado said. The central government’s deficit will be 5.4 percent next year, tighter than a 5.7 percent estimate in June, and the overall deficit will be 8.1 percent, compared with a previous forecast of 8.4 percent.

Tax on income from savings will also increase, to 19 percent on the first 6,000 euros and 21 percent for the rest, and a 400-euro annual rebate for all taxpayers will be scrapped. Of the planned 11 billion euros, 6.5 billion euros will be raised in 2010.

http://tinyurl.com/Spain-in-Deep-Doo-Doo

#70 Joseph on 09.26.09 at 8:48 pm

B[email protected]: ” However, it’s taken you until your retirement to pay it off, maybe you had to take retirement late to be able to finish paying it.. Subsequently you have no savings no nothing going into retirement…”

Nope, I purchased a small bungalow in Ottawa in 1990 and paid it off quickly …

#71 artisuseless on 09.26.09 at 8:56 pm

Seriously, to answer the question:

Seriously though, where do we get a place for $300K? We want something in the city or at least close to transit/highways but I guess we can’t have it all.

My friend bought around Main & Danforth about two years ago for around 300K. And there’s always just staying on top of new listings and being the first in on an offer – get a good buyers’ agent.

However, it really, really wouldn’t kill you to rent for a year or two once married, and keep saving for a bigger downpayment. Heck, if there is a serious crash (I can remember the one in BC in the early 80s and in Ontario in the early 90s and yes, in both cases, prices CRASHED) by the time it happens you could have a place for cash.

If you don’t think prices could possibly drop by all that much, just take a look at California, Las Vegas or Florida since 2006.

There are some very beautiful condos you could rent that have never had any one live in them. Owned by wannabe Donald Trumps who are renting them out for less than their carrying costs, expecting appreciation to make up the difference.

In the meantime, you could rent right down town, in the thick of everything. Heck, you can even rent an entire house for far less than it would cost to own one these days.
And then decide whether you end up loving it or hating it. I’ve seen far too many people commit to purchasing in a neighbourhood they later loathe or a house that looked great that turned out to have all kinds of annoyances, but feel stuck.
Again, it’s your life and your money but I made a lot of good decisions in my life by learning from other people’s mistakes instead of having to make my own, and that being independent of one’s parents is when the real growing up takes place.

#72 Alex on 09.26.09 at 9:29 pm

Here, we go :
Spain Increases Taxes to Tame Deficit Amid Recession
link on bloomberg
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZTrMS7L5dpE

#73 casanova on 09.26.09 at 9:58 pm

Garth,
When are you going to post about the main reason prices will never come down in vancouver, that is small scale grow ups.
Do people know that one in 4 houses in average in Vancouver is used as a grow up?
A small basement grow up you can easly get 10 to 20k a month and even if you get caught, the maximum punishment if at all is a small fine?
Grow up industry in BC is estimated to be around 6 billion USD.
So, buy a house in Vancouver and start that plantation, it is the best morgage helper. There is always a reason behind things…

#74 45north on 09.26.09 at 10:50 pm

Evangeline: Fair was she to behold, that maiden of seventeen summers. Black were her eyes as the berry that grows on the thorn by the wayside, Black, yet how softly they gleamed beneath the brown shade of her tresses! Longfellow

far as I can tell Garth’s jibes are pointed but they are not gratuitously mean they’re not

#75 InvestX on 09.26.09 at 10:54 pm

54 Jonathan

“Recourse would in fact make matters worse, as noone is going to jump in to buy a home in a deflating market knowing that if the market continues to deflate, they can’t just walk away.”

Making it easy to walk away, makes defaulting more likely, dropping home prices faster… like we’ve seen in the US.

#76 Blobby on 09.26.09 at 11:12 pm

@70 Joseph: We’re not talking about you buying 20 years ago are we? Sheesh.. Nice way to make an argument though – completely change the topic. Well done, very intelligent of you.

#77 Blobby on 09.26.09 at 11:14 pm

“Do people know that one in 4 houses in average in Vancouver is used as a grow up?”

Do people know that 80% of statistics are made up?

#78 Jim on 09.27.09 at 12:27 am

You haters should get a life. Maybe the young couple just gets paid very well and that’s the start and the end of that particular story (although the charges of naivete, nepotism, lying about their incomes, etc. along with ‘but I’m not a hater’ are amusing).

Just b/c you say you’re not a hater or that you’re not jealous doesn’t make it so. QQ moar. You can look that one up.

#79 april on 09.27.09 at 1:11 am

Garth I have read you book, A Greater Fool, a great read, and I’ve since sold my apt – bought 2 yrs ago – and I’m renting for awhile hoping Vancouver area prices will drop a bit. Supposedly we’ve had a bit of a correction already but things have started moving again though I’m not sure prices are moving up. When do you think this area will see a further decline in prices?
Thanks
April

#80 Future Expatriate on 09.27.09 at 6:49 am

#73 – How lucky for the people in BC that California is about to legalize pot to survive.

60% drop in real estate values, anyone?

#81 Joseph on 09.27.09 at 2:06 pm

Blobby #76 stated “@70 Joseph: We’re not talking about you buying 20 years ago are we? Sheesh.. Nice way to make an argument though – completely change the topic. Well done, very intelligent of you.”

Nothing has changed in 20 years. In 1990, I purchased my bungalow in Ottawa with a 5 year mortgage rate pegged at 12.25% (OUCH!). Today this same house purchased at 2,3,or 4% interest rates will have exactly the same mortgage payment that I paid 19 years ago (while salaries have gone up). It’s still about discipline and priorities. If you make paying down your mortgage debt to be priority #1, and have the good fortune to keep your job (and preferably your wife too) for 6 or 7 years, you can considerably tame the mortgage beast. My recent battle has been to decide whether to sell the house and move up, or just stay where I am, which is a much better dilemma to be in than not having a starter home at all, and be renting some place ad infinitum, and now trying to decide whether to take my hard earned downpayment cash and enter the housing market at a time when the economy is bleeding.

#82 Peter on 09.27.09 at 2:50 pm

# 35 – kc..thanks for the comment, I totally agreed with what you said…as these young brats are often brainwashed by the media, executives from higher level, the “THINK BIG” theory & higher education covers it all…I saw too much of these people that are booksmart and facebooksmart out there and this is what our society is gearing towards to…

#83 Blobby on 09.27.09 at 8:45 pm

@81 : Joseph (again)

Point You