A fine fit

Hear Garth in Victoria
November 19. For a seat call (250) 475-3698


A year ago in Calgary there were 12,300 houses for sale, and just 1,500 buyers. The average house price was $405,000, on its way to $373,000 two months later. The price of a barrel of oil had crashed to fifty bucks. The 5-year mortgage rate was 5.75 and the cheapest variable rate, 4.75%

One year later the number of houses listed has dived by a third to 8,000, sales have risen 50% to 2,600 and crude is around $75, also up by half. Mortgage rates are at the lowest point in history, with the prime at 2.25%.

Apparently the combination of higher oil prices and vastly lower interest rates has done the trick. The average detached home price in Cowtown in the last 30 days has risen to $472,436. That’s 5.2 times the average family income of $90,700.

But what if you want to buy a slightly bigger home, one priced at, say, $1,600,000?

And so we begin just another day in the life of this blog…

Dear Garth: My husband and I are new to Calgary and are not in the real estate market here. I know you’ve had similar questions before as I’ve read them on your blog…but here it goes:

My husband and I make (conservatively) $500K/year (but my husband is in healthcare & may have a decline in revenue due to Alberta’s health cutbacks which is part of the reason he does not want to enter the market).  No debt, approx. $200K in cash (in one bank), approx. $140K in a corporation (money market), not to mention other investments & RRSPs (also mostly money market).

We are currently paying $1900 in rent for around 1000 square feet on a month to month lease. I have aging in-laws that want to join us in the city and would live with us AND we are planning to start a family.  So we’d like to purchase the kind of house we could plan to stay in for at least next 10 years ($1.6M+ in current market for an inner city with at least 4 bedrooms & 3.5 baths above grade).

The question becomes:

Do you believe that the bubble here in Calgary will burst as well OR is Calgary different b/c it’s based on oil and oil is expected to increase?  Also, is oil expected to increase?

I’m from a reasonable province that is slow & steady and believe the prices here are completely ridiculous – but here we are.   All the Calgarians I talk to speak as though Calgary is invincible.  I am always tempted to remind them of the 80s, but then am reminded that that’s what they have to believe b/c they are already in the market and we all know misery loves company.

But I am tempted to plug my nose and just drink the kool-aid… Feel free to offer any advice you have time/patience for.  I know we have to do something with the money as it’s just sitting there doing nothing… but what? Signed, ‘Anonymous’ (in case you use it on the blog).

Use it? How could I not use it? Only in Calgary would it seem normal to go from a 1,000-square-foot apartment to a $1.6 million yuppie palace. Fortunately, you and your hubs earn five and a half times the average family income in the city. Why be so cheap? Make it $2.5 mil.

Of course Calgary real estate’s in a bubble, since prices are not far off where they were when oil was twice the price it is today, topping out at $147 a barrel. Like just about everywhere in the country, valuations have been inflated beyond expected levels by cheapo mortgage money – a situation which will only become more extreme if Mark Carney carries on with low rates while oil recaptures triple-digit status. That should be good at add tens of thousands more.

The irony, of course, is that the greatest threat the economy faces is high energy costs. Oil at $147, not US subprime mortgages or greedy investment bankers on Wall Street, probably brought the global economy to its knees – and will again, especially once market interest rates are allowed to return.

But, hey, go and buy big. And follow through with the plan to stay ten years, because between now and then there will be some large surprises. Enjoy the $1.3 million mortgage, kids.

It’s amazing how well you’ve adapted to Alberta.


#1 Small Business on 11.12.09 at 9:50 pm

The filthy rich — Canada’s forgotten minority.

#2 Oil Amen on 11.12.09 at 10:02 pm

Welcome to Alberta!!! Screw it, buy the place!! You’ll be able to sell it for 2.6 million in a few years!! The people on this blog are nuts!! I just come here for a laugh!

#3 GregW., Oakville on 11.12.09 at 10:05 pm

Hi Garth, FYI

Barney Frank warns Bernanke that he might be forced to embrace a compromised version of Ron Paul’s ‘Audit the Fed’ bill; promises to “wall off” attempts to examine monetary policy

Aaron Dykes
November 12, 2009

#4 James on 11.12.09 at 10:09 pm

Garth, why do you always select out the emails where people claim to make such incredible amounts of money. It’s usually young professionals with family income of around $250k/yr, but today’s is a real step up. $500k/yr for a couple looking to start a family, asking for advice? This person clearly doesn’t need the advice it doesn’t matter what happens they will be more than fine, I suspect she just wants to show off.

#5 Nostradamus jr. on 11.12.09 at 10:11 pm

Here you have it folks…please tell me which two cities are way overpriced and which city is underpriced, underated, in a paradise, that Easterners who have never been to, love to bash…

MLS®: W1740580 For Sale: $1,569,000
Toronto…??? sq ft…new construction

MLS®: V780236 For Sale: $1,549,000
North Vancouver….4,900 sq ft…new construction

MLS®: C3398399 For Sale: $1,620,000
Calgary….3,500 sq ft…new construction

#6 Dan in Victoria on 11.12.09 at 10:14 pm

Wow,I just can’t imagine having that type of income.Ten grand a week.Well, I guess you’re okay with the 3.5x income rule.
Maybe you could start a bank with all that money laying around.
Enjoy it while you can,sometimes things come along that we can’t control.

#7 Pitaking on 11.12.09 at 10:55 pm

Retail sales in Calgary are the canary in the coal mine for this city and anyone in the industry knows they are in free fall. Christmas will be a painful experience for many retailers and I see a huge surge in layoffs in Jan/Feb. This bubble is in it’s last months, look out below in 2010.

#8 viamede on 11.12.09 at 11:12 pm

Pass the Grey Poupon!

#9 LS on 11.12.09 at 11:15 pm

Normally I wouldn’t doubt the authenticity of letters, but this seems a little implausible. A youngish (under 40 if they plan on starting a family biologically) couple making 250k each? One of them in the health, so public, sector? In BC only about 300 of the top health employees make over 250k, so having two in one family is pretty unlikely.
And if you’re making 500k, what the hell are you doing writing in to Garth asking for some free advice? Just hire a good financial advisor and don’t worry about it.

I have better things to do than fabricate correspondence. — Garth

#10 $fromA$ia on 11.12.09 at 11:28 pm

Garth, telling people what to do with their $$$…

…you might want to get liability insurance, seriously.

The market still has yet to do what your saying it’s going to do.

Go ahead shock me and post this :P

#11 Jake on 11.12.09 at 11:28 pm

The $500K/year salary is not crazy for a dual income couple where one spouse is in “healthcare.” There are quite a few specialists that make more than $500k/year on their own. I had a radiologist disclose to me last year that he makes just over $500K. I’m sure some opthamologists blow that out of the water. It’s no wonder Alberta Health care is facing a $1 Billion dollar shortfall. There definitely have to be some adjustments to salaries. It’s clear that the poster understands that. Good on her for recognizing that things can change even for the uppercrust of wage earners. My advice is to move into something more modest or keep renting. A 1.2 million dollar mortgage and kids may put you over the top. I say have the kids and cut the mortgage down $800K or so. Even the wealthy can create an awful ball and chain for themselves if they try hard enough.

ps. I will be a Dr. in a few years (give or take, depends on specialty). I plan on buying things with cash. Why don’t you just wait a few more years and do the same? Good luck anonymous.

#12 Keith in Calgary on 11.12.09 at 11:29 pm

There are also over 5,000 rentals available right now in Calgary……..which is where the vast majority of those missing real estate listings have ended up……looking for tenants.

#13 nota bene on 11.12.09 at 11:35 pm

Garth: an image you might get a kick out of … as totally disturbing as it may be, lol: http://www.chpc.biz/

#14 Watched Bubble Never Pops on 11.12.09 at 11:50 pm

And the unchecked hate posts begin on the $500K per year couple…

#15 Bogdan on 11.12.09 at 11:51 pm

#4 James – Garth, why do you always select out the emails where people claim to make such incredible amounts of money.

James, in order to sell one has to present the extremes… this is a press thing… high paid stupid anonymous or poor people moving into McMansions. I too believe that this cases make no sense to the average Joe that’s visiting the website, but hey, the show is going to be big and we need some entertainment… something to laugh about later on.

Otherwise I find Garth’s economic data/information as very useful and up-to-date, as he’s probably researching a lot and doing his homework before posting. As I said… I think the patients are just for entertainment.

#16 Kurt on 11.13.09 at 12:04 am

DO NOT BUY TOP END REAL ESTATE IN CALGARY RIGHT NOW. I’ve been here since ’85, I can give you a host of reasons why we’re at a peak and why your family in particular should *not* buy a high-end house right now, but I have to go to bed. Maybe I’ll find some time tomorrow.

#17 Joshua on 11.13.09 at 12:10 am

James number 4, did you say 250 grand like thats not much. If you make a 100 grand a year and you cant live comfortably…with kids, then you must have made some bad money expenses in your life. 250 grand is a whole lot of money to make per year, and many in Calgary and on this website could damn live well off of that. YOu really wouldnt have to worry about your mortgage payments because youd be making so much.

#18 nonplused on 11.13.09 at 12:45 am

$1.6 mil is pretty swank even for Calgary.

But a $1.3 mil mortgage? No wonder high income earners seldom have any money.

Also, the 3.5 times income rule doesn’t really apply over about $100 grand because the incremental tax rate is so high. if you make $30,000 a year you keep nearly all of it, but at $300,000 a year you only keep about $180,000, so the idea you can continue to mortgage at 30% of income goes kind of out the window. Especially if you want to get the fancy cars and golf membership that go with that income level.

And I got to keep saying it but it hasn’t seemed to sink in yet: High oil prices do not magically flow directly into the wallets of the average Albertan. Sure, it makes for more jobs, but they don’t magically start paying everybody twice as much. I would say that although Albertans tend to be fairly heavily invested in energy stocks (for those who aren’t still trying to bail out their mortgage), Ontarians probably collectively own a larger share of the patch than Albertans do. There are just so many more of them.

And the big production in Alberta is gas, not oil. Gas, in case anyone noticed, is in the toliet. And the new meme is that shale gas will keep it there indefinately.

#19 Einsam Solo on 11.13.09 at 12:57 am

I say “Anonymous” should get into the Calgary market by all means, especially for a paltry 1.6 million.

The inner city is very diverse and cultural. You will find people of many nationalities transacting exotic narcotics within walking distance.

Be sure to get a HELOC and buy a couple of BMW SUVs for when the kids need a lift down to the soccer center.

Calgary’s high altitude means the oxygen is thinner so you may find residents suffer from delusions. Like wanting to spend 1.6 million to live in the inner city.

It’s fine to remember Alberta in the 80s but not to worry, history never repeats itself.

#20 A kid from oversea on 11.13.09 at 1:00 am

Sorry, English is not my first language. Do you really mean to tell them to buy a big house in Calgary? What will happen to Calgary real estate when the interest rate goes up but the oil price stays high (3 digits for example)?

#21 TaxHaven on 11.13.09 at 1:15 am

$500K??? On what planet? Can we hear from some REAL, ordinary people about how THEY are coping with house prices?

#22 Nostradamus Le Mad Vlad on 11.13.09 at 1:26 am

A fine fit headline suits Flaherty – Madoff – Carney much better than a pair of designer boots.
Remember Credit Default Swaps? — Japan

These may end up becoming part of our future — a lottery and an inheritance — Tax
Briefly, I’ve spoken of this before — Endgames Begin.
Saint Al of the Gore is close to becoming a billionaire, so does anyone recall climate change? — Barmy
If the US Fed is to be given a new lease on life, maybe it can be run better! — Reformed US Fed
Re: Obama ceding sovereignty to either the Middle East sheikdoms or China — OPEC + China

#23 TheFirstRick on 11.13.09 at 1:28 am

$500K yearly income and only $200K is savings? No wonder they seek advice on the internet. C’mon Garth, start giving us some real life examples and nix the trolls.

#24 Monica on 11.13.09 at 1:33 am

Thanks for discussing a little bit about calgary. Maybe it different than the rest of the country, maybe it’s not, but it is worth discussing.

ALso, Garth: what is someplace good to park money right now for this kind of situation?

To comment #4 above: how is the reader showing off if they’re signing it Anonymous? there are people out there who make crap loads of money but they also gave up making money in order to be in school for at least 10+ years post high-school or have high risk jobs or work 7 days a week.

#25 Rob in busted bubbleland on 11.13.09 at 1:35 am

Making that kind of money and only renting, wow that’s what I call contrarian. Besides that they probably keep a ton of money in RSPs, wonder if they are aware the tax rates for RSP withdrawals are around 50%. Evenbody complains about how taxes will go higher not realizing that when you die half of your RSP will go to the government, hell the government doesn’t need to raise taxes only needs to wait till the baby boomers start kicking the bucket!

Maybe Garth that should be your next campaign, making Canadians aware of the tax consequences of keeping too much of your net-worth in RSPs. I mean once the bubble bursts what do you talk about?

#26 Ronaldo on 11.13.09 at 1:36 am

95% of the people in this country would love to have their problem. Get real.

#27 Men With Hats on 11.13.09 at 1:58 am

Nice apocryphal fairy tale . No one that, stupid has that kind of money .
Another dummy who likes to flaunt wealth ,and rub her wealth in the faces of peasants, in the middle of a depression .
May all your investments turn to shit .
Prrof positive money does not equate to class in any way .

#28 Nathan in Edmonton on 11.13.09 at 2:24 am

I really hope she works in the private sector.

#29 Grizzly on 11.13.09 at 2:36 am

“Anonymous” – You should consider looking at Rural Canada – there are lots of options, 1000’s of wonderful towns, good lifestyles and your health care skills would probably be valuable. Break the ties with the city, millions before you have, find out there is life after Calgary, Toronto and Vancouver. You’ll appreciate Calgary more when you go back to visit and shop or enjoy some city activities once in awhile.

#30 Calgary real estate on 11.13.09 at 2:59 am

Where are you getting these numbers from? 12,300 houses for sale? Is this for the year? Are the 1,500 for a 2 month period???? I don’t generally totally disagree with you Garth, but where are these numbers coming from?

Calgary real estate board, aka The Cartel. — Garth

#31 Jay Currie on 11.13.09 at 5:01 am

I say go nuts and find a rental at 3.5 K. Lock in a five year lease, pay 6 months rent in advance for a one month a year discount. You have the cash flow. 42K a year is still less than 10% of your before tax income and I have to bet you’ll be able to find a way of writing off a quarter of that.

In two years, by shorting the housing market but still living big, you should see something like a 20-40% increase in your buying power. That 1.6 m house becomes 1.3 or 900K. You have let the vendor take the loss.

You’ll enjoy your new and bigger place, your aging relative will too and, best of all, you should be able to get out of the winter hellhole Calgary becomes and spend some quality time on a beach somewhere.

#32 Nostradamus jr. on 11.13.09 at 6:36 am

Prediction Prediction Prediction

…This posting, never before made public, will earn Garth and this humble poster Nouriel Roubini level status.

The only entity that will CRASH will be the U.S. Dollar’s number #1 enemy.

Not the stock market, not Real Estate…..it will be GOLD.

Countries around the world who have been hording Gold as a hedge to the U.S. Dollar…are making the Mother of All Hedging errors.

The time is coming…and it will be soon…when all who have been hedging Gold, will resell their Gold…for food.

Nostradamus jr.

from Nostradamus jr.

#33 kw on 11.13.09 at 6:40 am

Re#3 concerning the Federal Reserve.
Should we not be concerned with our very own Bank of Canada? Why is there no chatter to audit Mark Carneys’ domain?

#34 David Bakody on 11.13.09 at 7:45 am

Family income of $500,000 + and no place to live even with a live in nanny (s) en route. ” And” y’all are ashamed of where you came from and your given name ….. sad!

#35 E.O. on 11.13.09 at 8:15 am

Here are the stats can figures of Assets and debts for family units by education level


Those of you who are shocked by this number I assume you are either a baby boomer who is now out of touch or from the country.

I would be interested if Garth knew what the average income level of his readers was. I bet it’s higher then the average because we have all generally opted out of the trap.

#36 Kurt on 11.13.09 at 9:04 am

@ # 20 A kid from overseas

Your english is quite good – congratulations! He is mocking them by advising them to do something very stupid. The cues that he is mocking them are subtle word choices that produce a condecending tone that isn’t immediately apparent unless you are used to hearing spoken english. I can reply with specific examples from the post if you are interested. I assume from the precision of the language in your post that you are studying the language – good luck with your studies!

#37 ALBERTAGUY on 11.13.09 at 9:08 am

So… current listings in Calgary

Active Single Family 2,921
New Listings Last 24 Hrs 39
Sold Last 30 Days 1,222
Avg Sale Price Last 30 Days $474,408
Med Sale Price last 30 Days $412,000

#38 miketheengineer on 11.13.09 at 9:27 am

Hey Garth et al:

Some thoughts for today.

Some Survival Stuff:


Les Stroud, Host of Survivor Man TV Show, has a book called “Survive!, The Ultimate Edition”

ISBN # 978-1-155468-637-7

In there is a whole wack of info on how to survive. Also, how to prepare a “survival bad day kit”. Included are checklist, and detailed information, with real life examples. There is also a DVD included. They may carry it at your local Walmart.

Also, I recieved the latest Stokes Seeds Catalog.


I ordered some seeds last year. This year I noticed that some “flowers” are edible. Wouldn’t it be comforting to know that you can eat your garden, or flowers if caught in a pinch?

Good luck guys.


#39 dd on 11.13.09 at 9:49 am

“Do you believe that the bubble here in Calgary will burst as well OR is Calgary different b/c it’s based on oil and oil is expected to increase? Also, is oil expected to increase?”

The $90k in family income takes care of the oil and gas factor. However there are a lot of people here that do not participate in the oil and gas boom. $147 barrel of oil is not good for the country or Alberta. What is good? Predictable prices.

#40 dd on 11.13.09 at 9:51 am

It is hard to believe that house prices are so high. I know a handful of people that are layed off and they are not spending money.

Wow … who would be buying in this type of market?

#41 dd on 11.13.09 at 9:52 am

#2 Oil Amen

You might be right. However these are contrainians.

#42 Mr. D - Ottawa on 11.13.09 at 9:53 am

#9, #11

I see this happening myself firsthand. My brother specializes in Otolarygology and his wife is a dentist (both under 40). They earn somewhat more than $500K in Ontario. With a private practice as well working in a hospital, he gets paying clients coming from the U.S. too.

They are lucky to live in a city (Niagara area) with lower than average real estate prices and can easily afford the million dollar house they bought (nearly paid off now). They do have financial advisors and are investing a large portion of their income so they’ll have something to retire from. If you earn a lot you still have to save A LOT so you don’t retire poor.

Plus I think they got good value for their million (nearly new, 6 bedrooms, 5 bathrooms, nanny has her own suite with a second kitchen, 7000+ sq feet overlooking a ravine, and located in the city). The same house in Vancouver would probably sell for 3 million plus.

#43 Calgary_rip_off on 11.13.09 at 10:05 am

Garth this guy in Calgary is being ripped off badly on his rental.

Its funny the ignorance in this town. People actually believe their properties are worth this much. It will be really really funny when interest rates crush this whole city. And as a renter I can just sit back and watch….

#44 gordon on 11.13.09 at 10:15 am

Well sweetheart, if daddy warbucks makes 500 large a year, with only 8 months income banked over the years and your renting, hubby probably isn’t telling you everything. You’ve got bigger things to worry about. I don’t know about Alberta, but in BC you’ve gotta get your hands on communal property.

So buy and then say bye – and not the other way round

#45 viamede on 11.13.09 at 10:24 am

If you have that income and assets, are living frugally and being careful with your next step (which appears to be a doozy) then go out a pay for some professional advice (not commission based). Actually why not three different advisors. Sounds like they will need advice on financial and estate planning for years so why not start early finding someone who can help now and down the road as they seem a bit paralyzed.

#46 LS on 11.13.09 at 10:37 am

I have better things to do than fabricate correspondence. — Garth

I’m not saying you’re making up letters, that would be stupid. I’m saying people writing in are making them up. This is the internet after all, tons of people just like to stir some shit for fun.

#47 Toronto C9 Renter on 11.13.09 at 10:55 am

Really interesting post Garth — shows how even somebody with such a solid income is challenged to afford today’s home prices.

P.S. the comment about the negative impact of the evil healthcare policy changes is classic! Physician wage freezes – the horror! Our protaganists $500k income may not increase at the expected rate!

Doctors complaining they are poorly paid is one of life’s constants.

#48 Popeye on 11.13.09 at 10:57 am

It’s different in Toronto: population size, immigrant $

It’s different in Vancouver: olympics, weather, ocean

It’s different in Ottawa: government employees

It’s different in Montreal: lifestyle

It’s different in Kitchener: proximity to ?

It’s different in Saskatchewan: farming jobs

It’s different in Winnipeg: sorry, couldn’t think of anything to say about Winnipeg

It’s different in Calgary!!

#49 nibs on 11.13.09 at 10:58 am

Hey….what happened to my comments?

Here they are again…

Garth, you have said that boomers hold 80% of their net worth in their homes. Benjamin Tal suggests it is closer to 40%. Who is right? Can you give a source to support your 80% assertion or is this your gut feeling?


Ask Tal to support his. How many of your neighbours, friends and co-workers do you know who have 60% of their net worth in investible assets? — Garth

#50 Tony on 11.13.09 at 10:59 am


What are your feelings on Warren Buffet betting it all that the American economy will come back? Wouldn’t this be a boon for Canada as well?

#51 pbrasseur on 11.13.09 at 11:15 am

@ nibs #49

“Garth, you have said that boomers hold 80% of their net worth in their homes. Benjamin Tal suggests it is closer to 40%. Who is right? Can you give a source to support your 80% assertion or is this your gut feeling?”

My guess is the 40% refers to overall wealth:

“38.5% of Canadian wealth is tied up in home ownership”

As opposed to typical household wealth.

If that is true then the 40% is actually a huge and scary number which demonstrate how disproportionate the place of RE in the economy has become…

A Bank of Montreal survey of household wealth showed respondents indicated 82% of their net worth was in their homes. — Garth

#52 Bulls eye on 11.13.09 at 11:26 am

I need a few beers.

#53 JOHN on 11.13.09 at 11:29 am

I like how Garth doesnt answer the question of how can real estate go down in Alberta if Oil and natural gas rise. These oilsands projects are starting to come of the shelf in Ft.Mac. Why dont you answer this question. You have side swiped it a couple of times

Rising oil prices do not raise the incomes of every family in Calgary, Red Deer or Edmonton, while they jack gas prices and home heating costs eating into disposable income. House prices are dictated by supply and demand which in turn is predicated on the ability of people to afford homes, which is impacted by the cost of financing. Therefore interest rates have a far larger impact than oil prices. God-forsaken places like Fort Mac are the exception, but who wants to live there? — Garth

#54 OnlyTheBankersLaugh on 11.13.09 at 11:42 am

Garth, You said yesterday…

“Last winter I bought stocks and real estate. In the summer I sold property. Now I’m reaping, and waiting.”

So, maybe I am getting the years mixed up here as it was not specific but you mentioned that you are buying real estate. Are you going contrarian to your bubble forecast? Below is what you were saying last December. Am I missing something? Not that you need to share the gritty details as those are your business but it simply seemed contrary to your statements here about RE.

It is against this background – fears of economic Armageddon punctuated by cries of denial – that the new year dawns, and that I raise my voice once again. Eventually opportunity will return. Houses and stocks will get too cheap not to buy. Markets will rally. But that could be a long time coming, and events in the meantime might range from difficult to extreme.

This blog is a daily commentary on rolling history, punctuated with my observations on the journey, based on the best information available at the time. Last Spring when markets cratered, I said equities would lead the rebound and (of course) followed by own advice. Happily so. Houses did get cheap about that time, compared to the peak of 2008, so I followed my own advice again. Then they rebounded in value, so I sold some other property into a rising market. Those moves were all noted here, but I guess you were busy. — Garth

#55 jess on 11.13.09 at 11:53 am

thanks for that link on the ‘ghost’ city Ordos …but i had no idea what a prefecture level city was!

A prefecture-level city (地级市 Pinyin: d�j� sh�, literally “region-level city”) or prefecture-level municipality is an administrative division of the People’s Republic of China. Together with prefectures, leagues and autonomous prefectures, prefecture-level cities form the second level of the administrative structure, below provinces and above counties.

The first prefecture-level cities were created on November 5, 1983. Over the next 20 years, prefecture-level cities have come to replace the vast majority of Chinese prefectures. This process is still ongoing.

Prefecture-level cities are not “cities” in the strictest sense of the word, since they usually contain rural areas many times the size of their urban, built-up area. This is because the prefectures that prefecture-level cities have replaced are themselves large administrative units containing cities, towns, and farmland. As a result, prefecture-level cities nearly always contain counties, county-level cities, and other such subdivisions. To distinguish a “prefecture-level city” from its actual urban area (the traditional meaning of the word “city”), the term 市区 sh�qÅ«, or “urban area”, is used.


#56 Ken on 11.13.09 at 11:53 am

In my opinion putting that 500k trash thing out there is what is sick about our society.

#57 Jerk on 11.13.09 at 12:04 pm

Why do you have to be a jerk garth?
People ask you for advise and you make fun of them?
What wrong with you? Did you dad abuse you when you were a kid? Your mom didnt love you?
I mean come on man, I actually think we will have RE correction in Canada but reading your blog pisses me off.

I have a question for you, does being negative help you sleep at night? How fing negative can one person be?

#58 nibs on 11.13.09 at 12:06 pm

“A Bank of Montreal survey of household wealth showed respondents indicated 82% of their net worth was in their homes. — Garth”


Am I your mother? — Garth

#59 RJD on 11.13.09 at 12:09 pm

#2 Oil Amen – you might be right but do you know how much pleasure we will get if you aren’t. It will be priceless….

#60 jess on 11.13.09 at 12:14 pm

more precise data getting closer to actual

WASHINGTON – Swine flu is thought to have killed nearly 4,000 people in the United States, including more than 500 children, health officials said after a new counting method yielded an estimate six times higher than the last. The new system is based on more precise figures provided by 10 states, the Centers for Disease Control and Prevention (CDC) said. The previous estimated death toll from H1N1 was 672. While still imprecise, the new numbers provide “a bigger picture of what has been going on..


While still imprecise, the new numbers provide “a bigger picture of what has been going on in the first six months of the pandemic,” Anne Schuchat, director of the CDC’s National Center for Immunization and Respiratory Diseases, told a press conference.

She said previous estimates were based on “laboratory confirmed cases of hospitalization and death, potentially giving an incomplete picture of the story of this pandemic.”

According to the new estimates, the total deaths since the swine flu virus first appeared in April total about 3,900, the CDC said, noting that figures were rounded to the nearest 10. The CDC also posted the new set of figures on its website.

The new swine-flu death toll for children under 18 years of age is 540, four times higher than the previous estimate.

Still considered the tip of the iceberg compared to the real, full extent of the swine-flu pandemic, the new estimates are based on more precise data provided by hospitals in 10 US states, Schuchat said.

Those figures were extrapolated to the national level, she added.

The CDC cautioned that methodology was “not a predictive tool and cannot be used to forecast the number of cases, hospitalizations and deaths that will occur going forward over the course of the pandemic because they are based on actual surveillance data.”

Schuchat said the estimated range of all H1N1 fatalities in the United States from April to mid-October was 2,500-6,100, with the mid-level range at 3,900.

Broken down by age group, the range was 300-800 deaths for children up to 17 years of age (mid-level range 540); 1,900-4,600 for ages 18-64 (2,920), and 300-700 for people above 65 years of age (440).

In all, 22 million Americans were infected by the swine flu virus during the period studied, with 98,000 hospitalized, according to the new CDC estimates.

Schuchat also said that 41.6 million doses of the H1N1 vaccine were made available Thursday for distribution around the country.

#61 rory on 11.13.09 at 12:20 pm

Devil A from yesterday

Interesting about you not retiring in Kelowna …ty for your comment.

#62 BAD on 11.13.09 at 12:23 pm

One just has to love this expression:

P.S. It’s always a good time to buy a home, given the right reason!

Working with investors and astute buyers

The remaining question is: what the right reason could be?

This reminds me of an old joke. Let me apply it to the real estate here:

A guy I met tells me, “I have invested in RE and in a few years it made me a millionaire.”
“Wow! That’s great!” I go.
“Not really,” he says, “I was a billionaire before that.”

#63 I Got Gold on 11.13.09 at 12:33 pm

Nostradamus jr. aka PaperBug!

Hit the print button now, so you can have something to feed yourself when the stock market and Real Estate crash.

#64 Oil Watch on 11.13.09 at 12:44 pm

Before oil rockets to triple digits again it will plummet and this will devastate Alberta

#65 Genghis on 11.13.09 at 12:46 pm

Junk bonds are back, stronger than ever.


Asset prices have re-inflated to the point where another meltdown looks inevitable.

#66 Two-thirds on 11.13.09 at 1:09 pm

Although I am baffled that someone would seriously entertain that purchase under the current environment, their stated income is $500K.

On that basis, purchasing a $1,600K coffin is only 3.2 times income, which according to many of the b-dogs and some experts, is “affordable.”

So *technically*, their target home is affordable to them.

And we all know technically correct is the best kind of correct, right, Prof. Farnsworth?


#67 BigAl (Original) on 11.13.09 at 1:22 pm

The $500K salary is the norm in certain specialties. An acquaintance is a radiologist and earns that himself. He also gets a $6000/yr bonus for spending on ‘learning materials’ – he uses it as his restaurant budget for when we go out.

A kicker: He works at a teaching hospital that is near a university with a medical school (not the university’s hospital – that’s separate). So, sometimes they get special cases from around the region. A couple of years the radiologists complained to the government that they should get more than say a radiologist at a rural hospital. Cha ching! One month bonus pay a year – that’s a $50K bonus.

Don’t fall for the “oh, but they have to have so much schooling” bit either. The medical associations are one of the biggest government lobbies, artificially keeping the number of med school seats low. This profession has mastered that. There is simply no reason for that. Raise the number of seats in med school and solve your doctor shortage in 4 years.

The only thing hard about med school is getting in – then you’re in the club. Residency? How many of you out there believe the myths? Sure some specialties might require shift work, but lots of jobs do. And don’t forget that during residency they still earn a decent salary: 60 to 90K.

It all comes down to a numbers game for this profession. Unless governments and universities increase med school seats, you will see a doctor shortage forever.

#68 Elle on 11.13.09 at 1:22 pm

# 38 Miketheengineer

At the mention of the Stokes Seed Catalogue ….my heart rate dropped to normal…….thanks Mike. Not too sure about Les Stroud’s antics, but being self sufficient will
always come in handy.


#69 Kate on 11.13.09 at 1:41 pm

Huge Turnaround Predicted For BC Real Estate
The B.C. Real Estate Association says sales will rise 20 per cent in 2009, and the average price of a home in the province will hit a record $463,200. Growth is expected to continue into 2010.

Tune into News1130 for the very latest on this story, or visit News1130.com

Listen to Reaon Ford and Dianne Newman on the News1130 Morning Show weekdays 5:30am to 9:00am.

#70 nonplused on 11.13.09 at 1:45 pm

Denninger hits the nail on the head today:


If you were ondering why the economy seems so hard to understand today, it’s simple. It is being run by a bunch of criminals who don’t follow any rules at all. Thus, expect continued bankruptcy on main street and continued enrichment on Wall Street until somebody puts a stop to it or the economy completely implodes.

I’m betting on outcome 2 as all the politicians are all bought and paid for, so they aren’t going to do anything but hand over more TARP money to the banks and buy more bad assests off the bank balance sheets and onto the Fed.

#71 OnlyTheBankersLaugh on 11.13.09 at 2:10 pm

“Those moves were all noted here, but I guess you were busy. — Garth”

No need to get nasty, Garth. I did miss many blogs. It was an observation which has you, much more often than not, suggesting that RE is in a bubble. I did not do a pHd thesis review of your blog as I only looked on in past 2 weeks and read back select blogs. I guess I thought that your belief in overvaluation of RE in a bubble was larger than 10% mini correction but I live to learn another day. Job and young family to attend to or else I may have read much more with further interest. Good material. Ciao.

Miss a day, court disaster. — Garth

#72 Jim on 11.13.09 at 2:10 pm

BC Home Sales Surge:

#73 Jim on 11.13.09 at 2:16 pm

Calgary is close to the mountains and there are many jobs there. Can you think of any other reason anyone would live there?

#74 jake on 11.13.09 at 2:29 pm

thank god someone like Garth has the guts to call it like it is in this crazy market. thanks garth for getting people to wake up to the impending implosion of the market. it’s just nuts out there. you are a lone voice in an insane world

#75 DaleFromCalgary on 11.13.09 at 2:36 pm

“I have aging in-laws that want to join us in the city and would live with us AND we are planning to start a family. So we’d like to purchase the kind of house we could plan to stay in for at least next 10 years ($1.6M+ in current market for an inner city with at least 4 bedrooms & 3.5 baths above grade).”

It would be cheaper and better to buy two houses side-by-side in the suburbs at $400,000 each, and put the in-laws next to you. Then when they finally shuffle off this mortal coil, rent or sell the house.

Why would you want to raise kids in the inner city? Calgary is not as bad as other big cities but even so the kids will be exposed to hookers on patrol, alcoholics pushing shopping carts around looking for empty bottles, and noisy parties every night.

Also, $500,000 and only $340,000 or so saved? Geez, I only make $100,000 and have $1,000,000 in investments plus my bungalow paid for since 1997.

#76 AM on 11.13.09 at 2:39 pm

#49 nibs – From Benjamin Tal:
“I would call what Canadians are doing passive savings or homemade savings,” says Mr. Tal, adding one of the reasons the savings rate in Canada has not been rising is people are pouring more money into their home than into investments.”

I thought people were cashing in their equity for cars and big screens…so which is it?

I think Ben’s statement alone is supect. Anyone who has bought in the last 5 years (particularly new buyers) cant afford to pour any money into their home.

#69 – Kate

Just another sign that it’s about to go into hard reverse.

#77 (IHNM, WMM) I Have No Money, Where's My McMansion? on 11.13.09 at 3:11 pm

When are you coming to Calgary? If you do, you will need to book McMahon Stadium which holds 30,000 – even that might not be enough.

#78 Barb the proof reader on 11.13.09 at 3:22 pm

Garth, if I read your sentence correctly:

"...the greatest threat the economy faces is high energy costs. Oil at $147...probably brought the global economy to its knees – and will again, especially once market interest rates are allowed to return"

Then I suppose that next summer will begin the new wild ride into the fall.

And if “Anonymous” buys now, and judging from Calgary’s history, her $1.6 million home purchase will nosedive down to anywhere from $1.1m to $1.4m by this time next year. [I live in the inner city surrounded by the homes she desires (although I keep my humble old bungalow) so I’m well aware over the past 30 years of what she’s talking about.] And judging from my doctor friends, and doctor neighbours, they are not worried about their Alberta incomes — that’s just a scare-mongering game Alberta politicos play to try to herd the sheep — the doctors will continue to earn enough no matter what else happens, so she can set that ‘worry’ aside.. they are very in demand).

I would tell “Anonymous” to find an immediately “ideal” home for sale right now — but — step in and offer to lease it from the seller for a year. Some seller’s here are scared. And some sellers still think that the market is going to correct in a year or so, so that would be her target landlord.. the one who has her ideal location and would be willing to take it off the market and wait for a year while she pays their bills.

The worst that could happen is that the seller puts it up for sale again in a year. If the price is higher then we were all wrong. But if the inevitable does happen, then she can offer him the lower price or go looking for her ideal home at a new lower price one year later. Moving twice? Not a big deal for young people.

BTW I have a neighbour (I don’t know him – just to talk to him and we all know what he’s up to) .. he owns quite a few.. he takes down good old bungalows and builds big-time high quality homes in the immediate blocks. He used to try to tell everyone he was building his dream home so he got away with murder on the first one, but everyone’s caught on to him now. And I think the market caught him – maybe has him a bit stuck? Not sure. His best new big place he built is complete, but for most of this year it’s sat idle and empty and no sale sign. My guess is he’s decided that waiting it out will cost him less than selling. It is by all reports at the top end of quality — 2 years ago he said it would be appraised at $2.8m — so why is it sitting empty? Why is no for sale sign or anything?

Is he not the ideal target to approach and see what’s going on and if he’d snatch a chance to “buy some time” for a year if someone approached him to lease the house? I’m also guessing the house will sell eventually some day, for closer to $2m or less, like even this lady’s $1.6m the way things are going as he may have not put in all the pricey amenities.

Anyway, food for thought, approach, barter and VULTCH some Calgary seller to rent or lease their property instead for a year, or two. Doesn’t hurt to try.

#79 Vancouver_Bear on 11.13.09 at 3:34 pm

#69 Kate on 11.13.09 at 1:41 pm

The cartel forgot to mention in their report that wages have just started the race to the bottom. All of the big employers in BC, such as BC Hydro, TELUS, EA, KODAK have wage freeze…and cutting jobs or have hire freeze….good luck paying for that 400k shack with mold, rats, bed bugs and cockroaches…..This will end even worse then everybody thinks.

#80 Barb the proof reader on 11.13.09 at 3:48 pm

“Rising oil prices do not raise the incomes of every family in Calgary”
— Garth

Correct. And what is it called.. uh, “quality” of living standard? .. anyway, in the last couple of years my inner city Calgary Property Tax has skyrocketed, my heating and electrical and city bills and everything else including groceries have increased dramatically, the GST cut has actually COST me money, and we’ve found ourselves taking our normally tight budget even tighter still. Sheesh. Is this what it’s going to be like for the next 15 years? And with “boom & bust Calgary” the way it is, my hubby loses as many clients as he gains when in turn they get laid off in bad times or feel the squeeze too.

So I agree, rising oil prices only help oil and related industry people and others of wealth and higher income — but they actually end up hurting the rest of us here, so most ordinary Calgarians do not look forward to increased oil prices.

(uh, except, come the future, years down the road, the day hub and I sell — sure hope that will be during a ‘boom’ for our sake :)

#81 highway61 on 11.13.09 at 3:56 pm

10% correction of Calgary’s real estate market already happened during the first three months of 2009.
Inflated or not, current prices are here to stay, most probably at the expanse of tax payer. Seeing that I failed to bother to vote, I do not feel that I have right to complain now.

#82 Ronaldo on 11.13.09 at 4:12 pm

Garth, we keep hearing that there is this trillion dollars that is sitting on the sidelines waiting to come back into the market. I presume the bulk of this money belongs to the majority of those people who bailed out of the markets last fall. Now, if the majority of the people (the herd) are still sitting nervously on the sidelines in Money Market Funds or Savings Accounts, who has been buying to cause the market to get to where it is now. I personally bailed out at the beginning of June when the market hit 10,500 as I could not see it going much higher and the risks too great to hang in there. My son was braver, he got out at 11,500. We also hear that the financial institutions missed out on the greatest bear market rally ever at around 50% from its bottom in early March. So, if the little guys like myself were out of the market who was driving the market? Was it the 5% who control around 95% of the wealth and these are the same dudes who are sitting back and waiting for the herd (the other 95% who control the other 5%) to get sucked back in so that they can capture their 50% gain? I think that when the Big Boyz get tired of waiting for the herd to move they are going to decide to cash in and all hell could break loose. Look for 8500 on the TSE in the near future is my guess. What do you think because what is going on right now makes no sense to me and why I am currently 100% out of this casino game? As for the housing market, welcome back to the early 80’s.

#83 highway61 on 11.13.09 at 4:27 pm

Taking advantage of current low interest rate will reduce the real value of one`s debt for 5-10 % (first three years of being a home owner). Debt`s value will than decrease for additional 25-30 % during the inevitable inflation period. And we can also count on government that will be willing to do virtually anything to prevent RE numbers from going down. In terms of real value, all this amounts to about four times more than the 10% correction (that might, or might not occur) will bring. While I am not familiar with particulars of RE market in the rest of the country, when it comes to Calgary my advice is that those who are planing to buy a home should bite the bullet now (with possible four months wait, just for the case that the last winter`s scare repeats itself).

#84 jess on 11.13.09 at 4:29 pm

memory lane

it would seem back then that the deposit rate was low

[Recorded by Electronic Apparatus]
Thursday, October 30, 1997
Mr. John McCallum (Senior Vice-President and Chief Economist, Royal Bank; Canadian Bankers’ Association): Thank you. I guess that was good timing.
Good morning, Madam Chair, committee members. It’s a pleasure for me to be here.
I hope you have had this document with my name on it, “Canadian Credit Markets”, distributed, because I will speaking to that. I know you don’t like long speeches from economists, so I will definitely limit myself to five minutes.
What I’ve been asked to do is to give you a brief macro-overview of credit in Canada. I guess a good place to begin is with this table you have, showing the statistics for credit.
Total credit extended in Canada as of June 1997 is $1 trillion and $98 billion. It took me a while to get my head around a number that big. It’s not $1 billion, it’s $1,098 billion. We start with that and we look and we see it’s grown this year to date by 6.4%.
I would like to make two points about that. First, ultimately it’s the Bank of Canada or the central bank that determines overall growth in credit. If you ask yourself if it’s too fast or too slow, I would say 6.4% is about right. It’s a sort of goldilocks thing. You don’t want it too fast, you don’t want it too slow; you want it just right. If it’s too slow, you starve people of credit. If it’s too fast, you get into terrible problems such as real estate bubbles, and ultimately everybody loses from that. We in Canada experienced that in the 1990s. Japan experienced it with a vengeance and is still suffering from it. Thailand, Malaysia, and others are suffering from it as we speak. So you want a moderate growth of credit, not too fast, not too slow.
If you look next to the components of credit—and I should say also, banks account for just under half of that $1 trillion; just under half of total credit. Total credit breaks down into two parts, households and business. Let me begin with households.
Households are important. They are the people, if you like. Economically, household consumer spending counts for about 60% of our GDP. We have $500 billion in household credit, of which banks are $300 billion. The bank component has been growing by 9.6% over the past year to June, the total by 5.7%.
You further break household credit down into consumer credit, which is personal loans and credit cards, and that is $135 billion, or $94 billion by banks. The largest part of it is residential mortgages of $365 billion, of which $200 billion is banks. Banks have been growing mortgages by about 9%.
• 0920

What determines growth in consumer credit? Basically, it’s growth in consumer spending, which itself depends on income growth and interest rates.
Are consumers in Canada too much in debt? Debt is very high relative to income, as our charts show, but the burden of servicing that debt is not particularly high because interest rates are low.
Residential mortgages, what determines that? Well, basically it follows residential construction, which itself is determined by interest rates, consumer incomes, and so on.

#85 Devil's Advocate on 11.13.09 at 4:29 pm

#61 rory on 11.13.09 at 12:20 pm “Devil A from yesterday.. Interesting about you not retiring in Kelowna …ty for your comment.”

Wife figured out that 6 months a year in Mexico would cost roughly one third what six months would here. So then it became 8 months there and 4 here and then figured well hell why not 12 there with a smattering of one month visits here? Works for me.

#86 Grey on 11.13.09 at 4:37 pm

Well, mainstream articles that agree with what Garth’s been saying are starting. Unfortunately they’re still pretty tucked away from the ‘home page’ stories online.

1) ING DIRECT – Mortgage lender warns of housing bubble


Followed by a day later…..

2) Lebour: HST will raise cost of living, buying homes


#87 Alberta Boom on 11.13.09 at 4:50 pm

Yes, I know how it is to be in her shoes.
The wife and I together make 680K a year and we are currently renting a condo for 1200/month. We are waiting for the bubble to burst.

#88 BAD on 11.13.09 at 4:54 pm

Calgary RE market:

Some perpetrator will get a mortgage, keep the money, and let the banks go after the straw buyer once the payments stop.

Others fraudulently inflate the house price a few months later and find another straw buyer to purchase it at the higher price and pocket the increase.

“Sometimes it is flipped several times between different straw buyers and eventually they will be sold to innocent parties out there in the public,” said Ruzycki.

Downturn helps unmask mortgage fraud in Alberta

Buyers beware?

#89 Ronaldo on 11.13.09 at 4:59 pm

#86 Alberta Boom

And it will be one helluva bang

#90 Alberta Boom on 11.13.09 at 5:02 pm

Reply to Jim #73
“Calgary is close to the mountains and there are many jobs there. Can you think of any other reason anyone would live there?”

Yes Jim, there are many reasons for living in Calgary:
1- Farmers
2- Ranchers
3- Professional cowboys
4- Professional cowgirls
5- Hog farms
6- Chicken farms
7- Riggers
8- Mountains
9- Snow
10- Rodeo

#91 anonymous on 11.13.09 at 5:05 pm

Who said we only have 300K for down payment? I did write “not to mention other investments & RRSPs (also mostly money market)” (RRSPs maxed out, house in our home town, & more).

Beyond that, we’ve only been out of school 2.5 & >1 year respectively so, yes: we’ve saved a huge chunk of the money we’ve earned so far – do you want to hate me for that, too?

If you and your readers don’t like the money we make – what am I supposed to do with that exactly?
I’m only 28 years old by the way. Hate me more? (#75 – i was still in highschool in 1997 so congratulations)

I asked you the questions not b/c we don’t have financial advisors, but b/c you have a blog about finance, investments, real estate, etc and nobody is sure what’s going to happen.

But since you and your readers and you, Garth, love to make assumptions and judgments with no real advice, I’ll move on.

make all the short handed comments you want. i’m done here.

Personally I think you’re nuts to buy a $1.6 million house at the peak of a real estate cycle. But I guess that wasn’t the answer you wanted. You might also want to grow some hide. You’ll need it. — Garth

#92 Nostradamus Le Mad Vlad on 11.13.09 at 5:08 pm

#32 Nostradamus jr. — “. . . it will be GOLD. . . . The time is coming…and it will be soon…when all who have been hedging Gold, will resell their Gold…for food.”

Goes with the link I posted a while back, which stated that China (and now Russia) are buying 200 + tonnes of gold.

When the time is ripe, they (and a whole lot of others) will flood the market with said gold, and depress prices.

The IMF has the right to buy bullion at US$42.20 oz., so who runs / controls the IMF? Which leads to . . .

#63 I Got Gold — “. . . when the stock market and Real Estate crash.”

Not just going to be RE and stock markets which sink with the west.

The whole cycle is changing, and there’s gonna be a whole lot more that tanks with them. Sure glad I’m getting on!

#74 jake — “. . . people to wake up to the impending implosion of the market.”

Spot on! Plenty of consumer durables in the west are increasing in price (to put more and more into debt, thus becoming controlled sheeple).

When all the marbles are in place, pull the rug out from beneath their feet and watch all these houses of cards — including boomers, who haven’t bothered to put any aside for a semi-decent retirement — go crying to the feds. or provinces for their own bailouts.

But they will be broke as well.

#93 BAD on 11.13.09 at 5:31 pm

It seems that it is different here after all…

Canadians are slaves to credit: survey

#94 JOHN on 11.13.09 at 5:40 pm


It does create jobs and with that it creates in migration, with that creates demand for housing with that reduces inventory, with that hous eprices rise and offsets the rise in interest rates. If you thought house prices were expensive now just wait till next year. And no it doesnt only affect Ft.MAc it affects all Albertans

Sorry, cowboy, but you’re horse is pointed the wrong way. Rising house prices do not offset rising interest rates because financing increases always diminish real estate valuations as affordability drops. Maybe Fort Mac is different. Any place where a $35,000 mobile home costs $500,000 deserves its own planet. — Garth

#95 CalgaryRocks on 11.13.09 at 6:04 pm

Calgary is close to the mountains and there are many jobs there. Can you think of any other reason anyone would live there?

Low taxes
No Liberal or NDP turds
Higher wages
Low housing costs for those of us that bought before the boom. My sfh cost less than a cheap TO condo and it’s just as central
Half the property taxes
Best ski resorts in our backyard
Tons of outdoor activities
Short plane ride to vacation property in Nevada, AZ, or CA.
Short drive to BC

Just off the top of my head

#96 gary on 11.13.09 at 6:13 pm

# 82 Ronaldo,search high frequency trading. the large institutions just trade back between themselves it’s a brilliant strategy if you have the software.The rise in the markets can currently be corolated to the drop in the US dollar.The question all investors need to know is why are they destroying the dollar ? stay on the sidelines there will be be plenty of buying oppurtunities in the months ahead

#97 Barb the proof reader on 11.13.09 at 6:18 pm

The other problem with Alberta is that our ‘boom time’ blips ironically create poor service. At this point of time retail outlets still have not recovered from the vacuum of service personnel as 2 years ago they couldn’t staff due to the rapid pace — and now they can’t staff due to workers retreating back to their own provinces. One day Alberta will learn about a little secret called “planning ahead and actually being “conservative”.

#98 GregW., Oakville on 11.13.09 at 6:31 pm

Hi Garth, FYI, author of very well reviewed “Lords of Finance: The Bankers Who Broke the World”,
this weekend on TVO

The recent — and for still many – a still ongoing recession has made some of us wish we knew more about economic history After all, how many news stories, interviews, and panel discussions about this economic turmoil used the ominous phrase ”the worst recession since the 1930’s “

This weekend’s BIG IDEAS guest speaker is Liquat Ahmed, the author of very well reviewed “Lords of Finance: The Bankers Who Broke the World” . Called “magisterial “by New York Times, the book is an economic history of post-WWI world which culminated in the Great Depression.

In this talk, Liquat Ahmed who knows economic from inside out having worked at the World Bank as well as an advisor to many hedge funds also offers comparisons between then and now basically as way of answering the question of whether we have learned the right lessons from the previous crisis.

If you have missed last Monday’s Agenda with Steve Paikin, you might be interested in a discussion about the difference between good politicians and great leaders. This link will take you there http://bit.ly/2sCg1C

You might be also interested in these two new Flying Solo videos with James Laxer who recalls growing up in Communist family at a time when the Communist party in Canada operated underground http://bit.ly/121o40 http://bit.ly/1FM03h

BIG IDEAS airs on TVOntario every Saturday and Sunday at 5:00 pm. To download our podcast, please go to our website at http://www.tvo.org/bigideas.

If you miss the weekend broadcasts, you can also listen to BIG IDEAS podcasts via iTunes.

Don’t hesitate to share this e-mail with friends who you suspect might be interested in BIG IDEAS lectures.

#99 Watched Bubble Never Pops on 11.13.09 at 6:40 pm

I love all the unchecked hate from the minimum wage posters. LOL

#100 if you don't like it on 11.13.09 at 6:55 pm

I live in Calgary and I am wondering what’s wrong with a $380,000 home?

Why does the poster need a 1.6 million dollar home? Why do you need to live downtown? Do you really want to raise kinds in the inner city? I wouldn’t.

I live in a townhouse and am fine raising kids in that place. Aging parents, send them to a home and get a smaller house.

#101 john m on 11.13.09 at 7:00 pm

Ah yes the Alberta “get rich quick province”……….no rent controls..when its booming you could live better in ontario for minimum wage :-)…………..very little innovative ideas just a province living off of a God given natural resource……….the only future for advance is oil production when the demand dies so does Alberta………typical example of having all your cards in one basket……….anyone who feels secure in that environment defies any aspect of common sense :-)

#102 Emma on 11.13.09 at 7:03 pm

For those that think that letter was a poor example…to me, the point was – rich or poor, all first time homebuyers are getting in over their heads.

If rates average at 8% they’ll pay about $4 million for that $1.6M house. Also, is the $500K income sustainable over 25 years? Mat leave in Ontario is just over $400 per week (unless you have a union that tops you up).

A quick check of the CanLII system returned 797 links related to Power of Sale in Ontario during 2009 so far. Granted they aren’t all cases but the few I looked at were downright scary – tale after tale of properties sold leaving amounts to be paid by the defaulted and now property-less former owners and after the court case, they are often liable for the costs of the proceedings also.

p.s. apologies for the Ontario focus but I don’t know if POS is as common in Alberta – I think it’s more likely to be a foreclosure there.

#103 Margaret on 11.13.09 at 7:11 pm

LS #9: “Normally I wouldn’t doubt the authenticity of letters, but this seems a little implausible…”

“I have better things to do than fabricate correspondence. — Garth”

I think what LS meant was the writer of the letter fabricated the story. Income that high per year and not knowing what to do with it, or how to find out what to do with it, seems a little odd. But stranger things have been happening lately…

#104 CalgaryRocks on 11.13.09 at 7:20 pm

But since you and your readers and you, Garth, love to make assumptions and judgments with no real advice, I’ll move on.

make all the short handed comments you want. i’m done here.

You’re way too sensitive. Anyways, if you make 500K 2 years out of school you should be the one giving advice not the other way around.

If you could lower yourself to living in a 500K house, you may be able to pay cash for one and then not have any house payments for the rest of your life. But I’m not sure what your friends will think. I mean 500K. Gag.

Anyways, that’s what I did, when 3 months out of school I was making 1 Million$/year conservatively. lol.

#105 Vancouver_Bear on 11.13.09 at 7:24 pm

News from financial and trade crappital.

Less cops more gangs:


Beware of owelympix scam:


#106 Vancouver_Bear on 11.13.09 at 7:30 pm

#93 BAD on 11.13.09 at 5:31 pm

This is a disaster in the making.

#107 Grantmi on 11.13.09 at 8:06 pm

#92 Nostradamus Le Mad Vlad on 11.13.09 at 5:08 pm

The IMF has the right to buy bullion at US$42.20 oz., so who runs / controls the IMF? Which leads to . . .

Link please!!!!!

#108 rory on 11.13.09 at 8:19 pm

The system is broken …while I say congrats to the two making $500K in less than 3 years out of school …the problem is that it is crazy stupid …maybe in 10 or 20 years.

No wonder the system cannot afford itself, esp. the healthcare system …where is the incentive to build a business and work hard forever …at 500K per year these 2 will be retired and laughing when they should just be getting started with bigger earnings, better contributions.

To pay just these two people we need the total taxes of what, like 50 of us and that is just for them, forget police, fire, highways, nurses, civil servants and on and on…we all have far to fall as we cannot afforded our lifestyle nor our medical establishment …IMO.

Hello Mexico.

#109 eddy on 11.13.09 at 8:22 pm


audit the fed? LOL the US government gave away all it’s authority on a silver platter to the money masters, at Jekyll Island . Paul should know better- Abolish the fed!

the Eusace Mullins book ‘ the secrets of the federal reserve’ tells the story. That was the book that Ezra Pound (20th century literary Giant) wanted to write.

#110 Barb the proof reader on 11.13.09 at 8:28 pm


Besides your superb sense of humour and great tactical insights, one of the more interesting things about your blog is how your political foes still show up in droves to try and knock you down and obfuscate your words.

I guess they are still afraid of you. It always amuses me that they think they can pose “incognito” to needlessly bash your every word. Oh well, keeps their hands busy I guess.

#111 Seilfworcehtsa on 11.13.09 at 8:28 pm

#91 Anonymous

While you did not get the advice that you so obviously wanted you certainly got the advice that you need. Property values do crater and present conditions would indicate that we are on the precipice. How big a drop?…perhaps 20-40% with a very long road to recovery. Thank God that you can afford a decent place to live. A little patience might save you from a decision that you might later regret. And a little appreciation for some excellent advice is in order.

#112 Dan in Victoria on 11.13.09 at 8:35 pm

Post #91 Anonymous.Are you/hubby in health care to help people or for the money?Connect the dots from there.

#113 Margaret on 11.13.09 at 8:36 pm

I did not realize Ms. Anonymous #91 wrote a follow-up to her original e-mail. So they’re real people, but seem to have a lot of growing up to do, indeed. Good luck to you, it’s only all beginning…

#114 john m on 11.13.09 at 9:06 pm

104 CalgaryRocks on 11.13.09 at 7:20 pm ……………your so pathetically full of shit your humorous ………..:-)

#115 Calgary_rip_off on 11.13.09 at 9:06 pm

John M #101 post. The best post in months. Yes Alberta is nice, but it is run off of oil and gas, and nothing else.

#100 “If you dont like it”
What is wrong with a $380K condo is that its worth $110K. That is what is wrong. Welcome to the land of ignorant pseudo conservatives.

I have an idea for conservatives, either pay taxes that do something-healthcare, child care, good EI, social services, or dont tax at all!!! Why should I pay for any of the representatives that I didnt even vote for? This conservative party is a waste of time and money. And the wild rose is even worse. Time to get a party in that will reverse the ignorance so prevalent in this province. However, what is likely next election is that the fools that vote in Alberta will likely vote for the same party that pissed them off. Isnt that the definition of insanity?

That dude that makes $500K, one of them in healthcare must be slurping hard on the board.

#116 CalgaryRocks on 11.13.09 at 9:40 pm

104 CalgaryRocks on 11.13.09 at 7:20 pm ……………your so pathetically full of shit your humorous ………..:-)

That was sarcasm. Not suprised that it flew right over your head. I’ll put **sarcasm on** tags next time so that, you get it.

#117 GB on 11.13.09 at 9:52 pm

HEY #99,

I don’t think people “hate” the people. But honestly, that post was outrageous and one has to wonder about a guy willing to spew out numbers like that on a blog site. I’m almost certain it had very little to do with a desire for “advice”. Much more to do with a giddy 28 year old whose pretty proud of himself.

Hey kid….you make huge chunks of cash in exchange for relatively limited skills….enjoy while you can.

And by the way….I’d buy the 1.6 million dollar home. With any degree of budgetary vigilance, you would have it paid off in 5 years anway.

I hear Turks and Caico’s is also for sale….

#118 Lance on 11.13.09 at 10:06 pm

The biggest risk with having a house that valuable is if the sh*t hits the fan, you’ll never be able to sell it and that house will be a boat anchor wrapped around your feet that will drag you and your money down to the bottom of the ocean.
Even with the juicy income, that’s a huge risk to be taking with your money. If things turn sour, and there are sure than enough reasons why it might, you’re dead meat.

#119 Kelly McMae on 11.13.09 at 10:08 pm

Wow. Seem to be a lot of haters around these parts. Must indicate that Garth is ruffling feathers and people banking on perpetual stupidity are worried that the peasant may become educated.

Either that or Federal Conservatives are bored in the face of no opposition and have decided to stop by in order to kick tar sand in Garth’s face.

Nonetheless, I too would like to hear more stories from the average Canadian who’s steeping in debt, mired in decreasing wages, or puzzling at the enormous tab they’ve racked up acquiring a “higher” education.

#120 Kurt on 11.13.09 at 10:25 pm

@ #91 anonymous – Your question was “Do you believe that the bubble here in Calgary will burst as well OR is Calgary different b/c it’s based on oil and oil is expected to increase? Also, is oil expected to increase?” Calgary is different, but not that way. Oil and gas causes *volatility*, not structurally high prices. Land shortage causes structurally high prices, as with Vancouver hemmed in with mountains on one side, the border on the other, and the agricultural land reserve taking much of the rest. Even Toronto has the lake on one side. Calgary is surrounded by gobs of land suitable for development. For the current price spike to occur, growth had to exceed the capacity of the land development pipeline. That capacity issue is just now being resolved. In your market segment, the volatility is driven by exercise of stock options by management, professional staff and executives. Most vested options were exercised during the run up in the price oil a year or so ago, so that pool of investment capital is low. In addition, the completion of the northern part of the ring road is taking some ot the load off other other routes, taking some of the price pressure off of the core. As fringe development kicks in, this effect will increase. In summary, we’re very near a peak for your segment, and you’ll be able to get much more for your money if you can hang on for a couple of years. I’d be glad to write more and give more detail, but only if you are going to read it. If you want to see more, ask. I read this blog every day, so I’ll see your request.

#121 Sukh on 11.13.09 at 10:34 pm

from past posts, it seems like many sheeple post here…yes on both sides of the real estate debate. I presented a case in past posts whereby real estate values will remain stable or increase. Please read them if you want an unbiased view. Because of the predominantly one-sided view of the future of real estate on this blog, I will post no more on this site. Who are the real sheeple avoiding reality? Last i checked,facts state that real estate prices continue to rise. Good Luck wishing as your life passes by.

#122 Dan in Victoria on 11.13.09 at 10:45 pm

I always liked this doctor,I wonder what he got a year?http://www.youtube.com/watch?v=bPmVhyHBRAM

#123 paul c on 11.13.09 at 11:00 pm

I can’t believe people actually think garth makes up these emails. That’s sad!

BTW Alberta is a awesome province with hugh potentialfor everyone

#124 Cory on 11.13.09 at 11:10 pm

“$500K yearly income and only $200K is savings? No wonder they seek advice on the internet. ”

I thought the same thing. I live in Calg and people are very arrogant that they think the market is invincible. But let me tell you as one who has worked in the management level of the O&G world with 20 years behind me, I make good money but I cannot afford todays market IF I was just starting out. We have owned, but sold into the madness and now watch our rent drop.
I find the 500k hard to believe, honestly. However, real estate here was dropping at $140 oil.

As well, when Encana, the largest NG producer in North America, announces a 99% drop in earnings, we gots problems!. Add to this the little known fact that the Provincial regulatory board, ERCB, has frozen/stopped ALL!! Sour gas/oil applications due to losing a legal battle to a group of landowners (thanks guys), and you have the makings of a real disaster coming, especially when stupid consumers are bidding up houses AGAIN. When most of the drilling and development projects going on ARE sour related commodities, and then you freeze all applications, it’s called a guillotine and it has dropped.

Expect a stellar year in 2010? forget it….for awhile. Interest rate hikes, property tax hikes among all municipalities increasing taxes and fees already, I am baffled at how people can make it here these days…..honestly, I wish I knew how they did it.

#125 Soylent Green is People on 11.14.09 at 12:41 am

#119 Kelly McMae on 11.13.09 at 10:08 pm

Re hearing stories of average Canadians deep in debt…
Check out t.v. show called “Till Debt. Do Us Part”, it’s FANTASTIC, SHOCKING, will leave you in shock to see what people do to their families.

The financial counsellor is doing 50% financial counselling and 50% relationship rescue (guys non-stop taking cash out of the bank machines and ignoring their debt. e.g. won’t take it seriously or work out a plan while their wives let the “man of the house” be in charge only to find out they are being dragged down like the Titanic. SURPRISE! S U R P R I S E!

This one husband admitted to his wife he didn’t want to get out of debt. because he thought she would just leave him as soon as their debt. was all paid off, so he saw no point.





#121 Sukh on 11.13.09 at 10:34 pm

I’m sorry Carrie, Larry can’t hear you without your mic on.



#126 nonplused on 11.14.09 at 12:47 am

#30 Calgary real estate

Just go on Realtor.ca. You have to zoom in pretty close before it can display the listings, and it has the capability to show 500 at a time!

The realturds new plan is to not put signs on listed properties. So it doesn’t look like Remax is running for mayor anymore but there is still a lot of inventory.

This weekend I was driving around a bit and there were 2 open house signs on every major corner. I thought maybe “open house” was running for mayor this time around instead of Remax. It extended from Springbank right through Coach Hill, which is when I hit Bow Trail and major thoroughfares from there. No open house signs on Glenmore yet.

#73 Jim

Oh come now Jim, if we ever get it finished, Calgary is going to be a really nice city. For now it’s mostly a construction zone.

#82 Ronaldo

The concept of “money on the sidelines” is a myth. Nobody has a hundy under the mattress in cash.

If you put the money in the bank, they lend it out plus 10 times more. If you put it in money market funds, it gets lent to the government or short term business loans. If you put it in a GIC it has the same effect as a deposit. If you put it in government bonds it gets spent. If you put it in corporate bonds it finances the various undertakings of the cooperation.

There is no money on the sidelines. In order to buy something like stocks, would be investors have to sell something like money markets, and then that market goes looking for funds and rates rise.

#101 john m

Calgary doesn’t need rent controls because we have lots of school teachers who go to “get rich in real estate” seminars and buy condos to rent out. Renting in Calgary is still cheaper than owning even at 2.25%. We had a bunch of renters displaced as some owners turned their multifamily units “condo”, but that’s dried up now. And rents are falling across the board, most dramatically for downtown office space and commercial properties, but residential is already in the “first month free” stage.

#107 Grantmi

Good call. N. le Mad and N. Jr. are trolls. I am not even sure why they continue to post as they do not add to the conversation. The IMF was set up with a large grant of gold originally to capitalize the loans they were to make, and the US Fed currently carries its gold at $42.20 on its balance sheet. These 2 unrelated facts do not lead to the IMF being able to purchase gold at $42.20. Otherwise they could make a killing selling gold to India for $1040 (like the just did) and then just buying it back at $42.20. Not going to happen.

#127 Calgary_rip_off on 11.14.09 at 12:51 am

Sukh: You need to go take a dump. Calgary prices are double what they are worth. Please invite your friends to purchase overpriced shack crap on a bald @ssed prairie. It’s all yours. Enjoy. Sheep are idiots who do things blindly. That doesnt happen on this blog. People here arent like most of the idiots in Alberta.

#128 CalgaryRocks on 11.14.09 at 9:19 am

Expect a stellar year in 2010? forget it….for awhile. Interest rate hikes, property tax hikes among all municipalities increasing taxes and fees already, I am baffled at how people can make it here these days…..honestly, I wish I knew how they did it.

Since you’re in management I’m going to go ahead and assume that you are an expert Excel user. LOL

I suggest that you open it up an compare income/expenses in Calgary versus other cities like TO & Vancouver. You will quickly figure out how much more you get for your money here.

#129 Keith in Calgary on 11.14.09 at 12:22 pm

#125 Nonplused……..

“The realturds new plan is to not put signs on listed properties. ”

True dat……..they don’t want the truth to be self evident.

#130 Cory on 11.14.09 at 12:23 pm

Ok, so TO and Van are even more overpriced than Calgary. What’s your point? Calgary is expensive and moreso by the year. Oh, other than my rent dropping while I watch property taxes and fees consistently rise…..

You are obviously in the invincible camp that is so prevalent here. There is no point in debating with you since love is blind and it would be a complete waste of my time.

#131 ALBERTAGUY on 11.14.09 at 12:31 pm

OK blogpeople – quize time

say you have a property worth 1.5M with a 800k HELOC at 3.5% for 3 years. Your costs are around 50k per year including interest, insurance, maintenance and taxes.

say some oil company is williing to pay you 70k per year for 3 years to rent the place for one of their expat execs just back from saudi

with oil heading towards $100 and knowing cowtown runs on the black stuff do you rent it out put it on the market for sale?

#132 conan on 11.14.09 at 1:10 pm

RE : Quize time

Yo, do you live in the house still? cause if you don’t and the house is currently vacant its no Brainer.

RE: Mr and Mrs $mith

Based on your investments that you outlined I would put more money into short term bonds, but choose your fund wisely. Money market was last years easy place to be ,but this years stupid place to be.

People in your position need several (different) financial advisors.

1) accountant
2) Bank person
3) stock broker person
4) life insurance person

Try to learn the products that everyone has because all have somthing unique to help you along.

Too bad everyone reacted with a “let them eat cake attitude”.

Maybe it is time to start selling pitch forks and torches on E bay.

#133 ARP on 11.14.09 at 2:07 pm

The 500k combined salary is entirely accurate.

The doctor is most likely a hospital based specialist under the alternate relationship plan (ARP), meaning he/she receives a salary from the government and paid for clinic space.

However, most ARP docs do not spend their entire income and instead shield it in their professional corporations where it is taxed at a flat rate of 14%.

These two should see an accountant to minimize their tax burden. They should most likely spend her employment income and save his professional income to minimize their tax.

#134 X on 11.14.09 at 2:57 pm

Umm….regardless of how much you both make, or how much you both have to put down as a down payment, as you are both educated, if you feel this is the top of the market does it really make sense to buy at the top, if you don’t feel this is the top-then buy, and if you really love the house and plan on staying there 30 years (or a long time) then buy…

#135 CalgaryRocks on 11.14.09 at 7:24 pm

#129 Cory on 11.14.09 at 12:23 pm
Oh, other than my rent dropping while I watch property taxes and fees consistently rise…..

Ok well, the fact is that my property taxes have gone up much less than 40$/month in the past 5 years while my mortgage has remained constant at less than 1K of which more than 60% now goes to the principal. This is still half what I would pay in TO, Vancouver, Ottawa etc…

So yeah, obviously that leaves a lot of money for saving for a rainy day as well as spending.

And if you don’t want to buy RE then there are plenty of affordable rentals, as you have mentioned.

#136 Frugalistas on 11.15.09 at 9:02 pm

Health professionals should not be disclosing their salaries in such a public forum. It is very unprofessional. Though it seems like they were asking for your help, just reading your blog Garth tells them not to buy. As far as getting financial help, they have all the tools to get help.

Really, it sounds like these professionals were being a little unprofessional in disclosing their professions and their salaries.

#137 T.O. Bubble Boy on 11.16.09 at 5:47 pm

It’s obvious – the only real answer here is: GO ALL IN!
Throwing 100% of the savings ($200k) at property in a boom/bust city would at least be exciting.

$1.6M house
$200k down
$1.4M mortgage

@ 2.25% / 35-yr = $4800/month (
@ 5% / 25-yr =$8100/month
@ 8% / 25-yr = $10,700/month

Good luck raising those kids and caring for the parents when you’re down to 1 income and trying to pay $10k a month just to keep that roof over your head.

Possibly the most ridiculous part: CMHC would be insuring this mortgage! How on earth is a $500k/year household the type of buyer that CMHC is supposed to be helping “get into the market”???