Wpg 11

335 square feet in the Peg, at $307 each.

It’s been a busy week for frothy media. Virtually all of the MSM carried stories in the past three days asking that incredulous question, ”Are we in a housing bubble?” Various economists were trotted out from the banks (that’s where the mortgages live) to knit their brows, acknowledge anomalous behaviour but remain nonplussed.

Meanwhile CREA’s latest numbers, and those referred to here from Cartel branches in Toronto, Calgary and Vancouver, show sales increases over last year of up to 100% and a price increase running at least twenty times the inflation rate. Some observers, bless their good hearts and large stones, had the courage to warn recent buyers with mortgages in the 2-3% range they could be in deep financial trouble before too long. But you know that. The reasons why have been beaten to death on this blog already.

In answer to the question du jour, the answer is a resounding, mais oui. The current situation shows every classic sign of bubblification. The only question is how long the Bank of Canada will allow it to keep building, and the consequences to the economy once it blows.

By the way, how do you know when you’re in a bubble?

  • When prices rocket by double-digit rates in the middle of a recession with rising unemployment, consumer price deflation and a contracting economy.
  • When the market fuel is emotion, desire, not value.
  • When prices hit an all-time high and yet 40% of Canadians expect them to keep on increasing – up from just 18% a year ago, says a poll conducted by Maritz Research.
  • When the number of people taking 35-year amortizations explodes higher. Overall, these loans have doubled as a percentage of all mortgages in two years but that does not tell the true story, since today 5/35 buyers constitute an absolute majority of new originations. Of course, 35-year borrowers pay off virtually no principle for years and years which makes this akin to renting money. No equity means no ability to withstand a market correction.
  • When some dink pays $103,000 for a 53-year-old bachelor apartment of 355 square feet in a questionable part of Winnipeg. Forget it. She will not be impressed.
  • When $186 billion in new mortgages is issued in a single year in Canada.
  • When everybody’s talking about real estate the way they used to about Nortel and day trading.
  • When condo marketing hypesters can say this, and get away with it: “Line ups and camping out for weeks will once again become commonplace as buyers rush in to invest in this next wave of development in Toronto.”
  • When the average price of resales homes rises by more than 20% in a single year. Any year. And sure as hell in a year when inflation’s less than 1%.
  • When pathetic 60-year-old Boomers are getting mortgages so they can buy trophy houses with stone veneer and three garages.
  • When misguided twentysomethings shoot it out in bidding wars. When unethical realtors allow them to.
  • And mostly whenever, wherever, you hear ‘buy now, or never.’


#1 Kevin in Winnipeg on 11.17.09 at 11:01 pm

Was the lamp included? I find it hard to believe someone would pay $103,000 for 335 sq-feet….in Winnipeg.
Do you know what the asking price was?

#2 WaitandSee on 11.17.09 at 11:01 pm

when ? ….that’s the question, I would pay for the answer…

by the way, thanks for the French expressions, I appreciate them :-)

a French in Vancouver.

#3 Not Garth on 11.17.09 at 11:01 pm

Exactomundo Garth.

Do you see CMHC responding to the sublte pressure coming out of MSM now? If so, what form could this take (ie. raising the miniumum down?)?

I predict Vancouver houses start to sit on the market for a while and that prices start to weaken this month.

This game is about to get interesting.

#4 Krazy Kanuk on 11.17.09 at 11:05 pm

OK….I pick never! :)

Seriously, I’m living temporarily in Vancouver (the epicenter of delusion), and I can’t wrap my head around the fact that if someone gave me $1 million, I could either:

1) buy a house here…and not a great one, only a good one.

2) buy $1 million worth of dividend stock funds, rent the house, put food on the table, and probably run a car. (I’m assuming a 3.6% yield…or $3k a month….for doing NOTHING!!)

And my friends call me Krazy.

#5 Dubble on 11.17.09 at 11:06 pm

Great post Garth. I am a lucky man for stumbling upon this blog roughly 6 months ago. I was about to take the plunge and purchase a home with my girlfriend, as everyone else I know has bought a home within the last year or so. Prices have skyrocketed in Saskatoon, if we compare what a home costed 5 years ago. I didn’t spend time researching the decision, even though it would be the biggest decision of my life. I felt the “now, or never” and I felt stung every time a friend moved into their new pad. I now feel sorry for them. If only more people would stumble upon this blog of yours…

#6 Investor on 11.17.09 at 11:08 pm

Well the best top would be if someone in CRA wrote a book like in the US. When I saw this book back in 2005 I knew US real estate was done.



#7 WaitandSee on 11.17.09 at 11:08 pm

#3 “Not Garth”
“I predict Vancouver houses start to sit on the market for a while and that prices start to weaken this month.”

I hope you’re right…

#8 Two-thirds on 11.17.09 at 11:28 pm

What is half a trillion dollars and growing?

“OTTAWA — With the country days away from watching its debt level cross the half-trillion mark, expectations are mounting that the federal government will release more specifics in next year’s budget about where it intends to roll back spending in an effort to stem growing budget shortfalls.”


#9 T.O. Bubble Boy on 11.17.09 at 11:31 pm

Major changes will not happen until:

A) After the next election (since Harper, Flaherty, Carney, and others have to keep the sheeple believing the house bubble is real to be able to claim that their smoke and mirrors ponzi scheme is working).

B) After the US raises their rates — not likely until 2nd half of 2010.

So, Garth will have probably 300 more blog posts before any of this starts to kick in.

#10 bill on 11.17.09 at 11:33 pm

I think NOT GARTH is right.Any day now in Van. We used get a ton of RE propaganda touting the latest condo sold in our neighbourhood [ KITS ] but that does seem to have dried up of late. Which is a pity as we do use those handy little notepads they give out.
Definitley ‘when’ not ‘if’ .

#11 Chris L. on 11.17.09 at 11:35 pm

The comments on the G&M website are priceless. It’s not even required to read the articles anymore. People are really taking it out on the media for the poopies they present. It’s refreshing.

#12 WB on 11.17.09 at 11:44 pm

“Be Fearful When Others Are Greedy and Greedy When Others Are Fearful” – Warren Buffett

#13 Tony on 11.17.09 at 11:55 pm

Looking to sell off my index funds after a good ride (I’m 100% in equity but 30 years old). Any advice on where to put my cash while waiting for the inevitable double-dip?

#14 ArunPillai on 11.18.09 at 12:08 am

See this recent GlobeandMail article http://bit.ly/interest_rates

#15 Terry on 11.18.09 at 12:14 am

The collapse has already happened. The modern day robber barons are just covering up the real problems so they can continue their theft of the money we have left and any future earnings. When all the stimulus and bailout money ends………….then you will see the scorched earth they left behind in their wake.

#16 dean on 11.18.09 at 12:15 am

Hi Garth
Could you please remove my image from the photo above, I am the one in the lampshade.

#17 smw on 11.18.09 at 12:32 am


“Vacancy rates rose to 4.4 per cent in Metro Vancouver in the third quarter of 2009, up from 2.4 per cent in fall 2008”.

#18 Soylent Green is People on 11.18.09 at 12:38 am

I got this and it made laugh…


I thought about your boomers’ sell off theory in real estate a couple years ago and realized it’s flawed.

So long as there’s immigration, population growth and offspring to inherit wealth, I think the market will be safe.

But then again the worlds going to end by 2012 so the movie says.
All the best,

#19 kitchener1 on 11.18.09 at 1:07 am

Interesting indeed.

When properties are way beyond posistive cash flow or even neutral cash flow it is not a good sign.

I wonder what the next 3-5 months will bring. One thing is for sure, prices cannot continue in this upward projectory for long. And what goes up fast also goes down fast.

Things to watch in the near term:
US dollar, if it starts to rally, even short term, watch for the BoC to take charge and raise rates slowly. At this pace, they cannot stand by idle until July.

If they don;t start to raise rates or signal they will, it will DESTROY the housing market when they do start.

Price of oil: we are at approx 1.00/L in GTA area give or take. It seems that this is the happy medium where drivers grin and bear it. If this approches 1.25-1.50, then it will kill GDP growth and this a very likely event.

If people start to lose the little confedience they have in this fake “recovery” its all over man, the next leg down will be more violent then last October

Stock Market indexs, we are losing steam in the markets. My prediction, the markets will drop to the 8500-9000 range and stay sideways for a while.
Liquidity crisis is in the making.

#20 Onemorething on 11.18.09 at 1:10 am

The Sky is not going to fall!

Just RE Prices! Huge!

Healthcare is a distraction, USD devalution distraction, H1N1….distraction!

and One more thing, you have two choices, rent now and stuff cash in your pockets OR get your tail kicked for a decade, forced to rent from the government when they take ownership of all of those insured properties (like the US) and pay back your debt to them (garnished wages).

RE Owners, you know it’s coming!

And so am I with garbage bags full O cash!

#21 Mark on 11.18.09 at 1:18 am

Didn’t you hear Kevin, just like Vancouver you’re running out of land in Winnepeg!

(Yes that’s actually what people say here… Running out of land.)

#22 nonplused on 11.18.09 at 1:19 am

“Sell now, or never.”

Although my realtor is starting to float me some aggressively priced POS listings. Appearently, with money free, houses in need of attention are not finding a bid as free money is available to get a swanky one. The discount the bank is looking for is 250 on a mil, it seems. Isn’t this how the US correction started?

Why do I have a realtor? It’s a long standing relationship, and he’s trying to drum up business which one would expect.

#23 Christopher on 11.18.09 at 1:27 am

This whole housing thing is rubbing me the wrong way…I think I will go blow my savings on a trip around the world spend it all in other countries. It will be my way of helping out.

#24 Mark on 11.18.09 at 1:28 am

Sorry for double post.

Waitandsee; I’m not sure if Garth will answer so if I may take a stab at it.

I read an article a while back by a long time investment advisor, he had a young colleague during the tech boom who was extremely smart and had figured it out, he KNEW the market would crash when most people had no idea, he was way ahead of the curve. So he put his knowledge to use and tried to play the market, he put a bunch of his money into shorting some of the most vulnerable stocks. They expired, the market hadn’t collapsed, again he shorted, again the market went up, finally he sunk everything in in a last ditch effort on as long a time line as he could manage and they expired two weeks before the bust. He lost his shirt.

The moral is, you can tell when a commodity is undervalued or overvalued. Knowing that it’s under/over valued you can KNOW that it will eventually correct. Timing is impossible to predict however, except through blind luck. This by the way is Warren Buffet’s investment strategy and it seems to work for him.

#25 Nostradamus Le Mad Vlad on 11.18.09 at 1:28 am

“When the question du jour becomes the reincarnation of Bre-X / Nortel / Enron, etc. which leads to the current state of the soup du jour we’re wading in . . .”

Nnnyyyyeeeeaaahhhhh, what’s up doc? Everything looks pretty darned ravishing here. Wot’s happin’in over there?

There’s only the Honky Screw Tax + Rising Interest Rates arriving next July 1 (thanx Gordo / Jimbo / Groucho), plus lotsa goodies to make the world go square.

Got any shrinks to spare?
#109 Future Expatriate on 11.17.09 at 9:32 pm posted the first link before, I’m adding to it Cdn. soldiers are being outfitted for ‘domestic warfare’, and The Terminator wants to squash people. NWO tactics? — Arnie

I always figured Russia was part socialist. — Putin “The problem with Socialism is that eventually, you run out of other people’s money.” — Margaret Thatcher

In case you didn’t know, we all part of the new 500 million terrorist family!
Further to the elite — Background stuff

Trillions and trillions . . . and gold Le End
New stuff on Ukraine.

This is not a dentist’s drill.

#26 janet on 11.18.09 at 1:36 am

I believe I sent you that listing and no I did not buy it. I am an idiot but not that big an idiot. (sorry to call you that if you bought it). The 20 somethings I know who were looking are a condo are both in debt already and are one of many I believe who are sold on the idea that there is no apartments around so they must buy now and that it is cheaper than rent

#27 TheFirstRick on 11.18.09 at 1:54 am

C’mon Garth, those digs in the Peg came complete with a ‘heritage’ lamp, be fair.

#28 BAD on 11.18.09 at 2:08 am


“We participated in things that were clearly wrong and have reason to regret,” Blankfein, 55, said at a conference in New York hosted by the Directorship magazine. “We apologize.”

Blankfein Apologizes for Goldman Sachs Role in Crisis

Nah, apology accepted old buddy, let’s go for drinks, eh?

I wonder when and who will be apologizing here.

#29 Peter Pan on 11.18.09 at 2:22 am

I told a 30 something guy in my office that his generation was the “535 Generation”… can’t afford anything more than a 5% downpayment and 35 year amortization… He seemed sheepish about admitting I was right except for the fact he was able to get a 30 year amortization… Sheesh… I weep for this generation… They are royally screwed…

#30 Too Old Bob$ on 11.18.09 at 2:35 am

“By the way, how do you know when you’re in a bubble?”

. When the people who lend and control the money start talking about it. This is a hint that they think things have gotten out of hand. So a little information is sent to the MSM to distribute to the wanna be buyers that maybe we need to change our perspective, plus we will be doing you a favour. Question is, what will they do to stop the supply of cheap money and low interest rates. Well it’s quite obvious, just a matter of when they drop the ball and set off the chain reaction. When rates rise, then comes the next mini boom of buying, you know “get in while you can” of course this just creates more problems later on when it’s renewal time. Hopefully they have saved enough to justify an increase in payments or a large principle paydown.
Next question is how high do rates need to go?

#31 Emma on 11.18.09 at 2:38 am

re: the 40% of Canadians that expect prices to increase

I sure would love to know how many of the respondents just made a purchase and NEED the prices to go up!

#32 Mooo on 11.18.09 at 2:45 am

People are like cattle, they always follow the herd even if it’s straight to the slaughter house. The question isn’t when will this bubble burst, it’s when will people start using thier head and stop asking garth what to do next.

#33 The truth on 11.18.09 at 3:07 am

Majority owns homes. Minority don’t. Majority makes rules to ensure they keep rising in value. What better way to to have social stratification. The wealth gap between homeowners and renters widens as per the majority wish. This is what is called a democracy.

#34 The truth on 11.18.09 at 3:09 am

#3 Not garth

They will never raise the 5% down. Would cause extreme turbulence. Yo can take this to the bank and Im sure Garth would agree.

#35 confused and A little crazed on 11.18.09 at 3:26 am

Who is buying all those houses.maybe they are mortgaged so badly they need food banks


#36 Blobby on 11.18.09 at 4:27 am

To quote the great (?!?) Will Smith:

Tick tick tick tick BOO!M!

#37 latinlife on 11.18.09 at 5:13 am

GOLD Hits Another New High $1,147.53

#38 frank pasquale on 11.18.09 at 5:56 am

Comes with a gorgeous institutional bathroom too.


#39 an honest man on 11.18.09 at 6:28 am

Avg. price for the year to date is up 3.4% (see page 7 of the doc after the jump). Read about how activity skewed avg. price lower last year & how the rebound is skewing it higher this year — likewise skewing the year over year comparison. Heck, even BC has a ytd avg price change of less than 1%.

#40 NOBODY on 11.18.09 at 6:59 am

“When some dink pays $103,000 for a 53-year-old bachelor apartment of 355 square feet in a questionable part of Winnipeg. Forget it. She will not be impressed”.

Was probably in Trashcona, off Notre Dame & Keewatin…


We all know that sooner or later RE prices will correct down by as much as 30% nationally. My question is as follows:
What about areas such as Kingston, Ontario where speculation was absent and where prices went up – on average – at inflation levels for the past years?

Would Kingston RE resale prices collapse as well or… since there are mainly government jobs, the military, huge university, a magnet for retirees, tourism, very stable economy, no booms but just a normal development pace, etc?

Since Kingston had no RE speculation or idiotic price hikes such as Kelowna, is it safer to invest in RE there?

#41 David Bakody on 11.18.09 at 7:03 am

From this morning News:

Recession swells food bank use: report

The number of Canadians needing aid from food banks swelled in March to almost 800,000, an increase of almost 120,000 from the same month the previous year.

The year-over-year increase of 17. 6 per cent was the largest increase since 1997, said Food Banks Canada’s executive director, Katharine Schmidt.

I strongly suggest to ALL those greater fools that there is more than a strong probability this may a sign of their future. You have been told by the Christmas Ghost of the Future …. Interest Rates are going up, taxes are going up, Harper’s Sales Tax en route and jobs are going East! Your pal Steve was in the East (not NS/NFLD) selling technology and jobs that soon will be home grown not in Canada but India. So they buy the first one (whatever) then they build and sell for less. It’s called the Wall Mart philosophy.

#42 NOBODY on 11.18.09 at 7:04 am

… I forgot to mention that the unemployment rate in greater Kingston stands at 6.1% for October 2009, so very stable.
Compared to bubblelicious Calgary or Edmonton, both above EI rate of 7%, Kingston would be a nice option, where resale prices would be very stable in the long term, no?

#43 Repatriated Expat on 11.18.09 at 7:20 am

This housing bubble is going on becuase buying is still cheaper when compared to renting on a monthly basis in most cases.

That condo can be financed for about $450/month, and probably be rented for at least $500/month. Even if the sales price doesn’t go up, no big loss. Not a totally fair comparison, but easy to understand based on a monthy budget. Added bonus of a hedge against inflation.

Used to be that buying a house actually required more skin than renting. Now it’s the other way around.

#44 Piccaso on 11.18.09 at 8:04 am

We got the Peg beat, you can have this charmer for $750,000 in bubblicious Alberta.


#45 Munch on 11.18.09 at 8:14 am

It’s only a bubble JUST before it bursts!

Any time before then, it’s rastionalised away as “normal” – then someone opens the trapdoor!

#46 Al on 11.18.09 at 8:34 am

“Various economists were trotted out from the banks (that’s where the mortgages live) to knit their brows, acknowledge anomalous behaviour but remain nonplussed.”

And yet when the downturn arrives, they’ll still claim no one could have seen this coming.

#47 buying a house on 11.18.09 at 8:45 am

Prerequisite: watch The Price is Right.

Yes it might be a fun game show but you can learn a whole lot from it. Save you a lot of $$$ too.
Learn how to valuate. Forget interest rate, forget how much you saved up, how much it will go up/down. If you put a right price on an asset the rest will follow.

#48 Weeping in Windsor on 11.18.09 at 8:49 am

#38 frank pasquale
“Comes with a gorgeous institutional bathroom too.”

and did you notice—“Architecture–None”
in that MLS listing?

Well DUH!!!

#49 tf on 11.18.09 at 9:16 am

Garth, you forgot “when people line up to buy in front of condo developments” in your list. People were lined up in the cold this Monday morning before 8 a.m. at the ICE condo development on York St. just across from the Air Canada Centre in Toronto.

#50 North Van Dude on 11.18.09 at 9:18 am

@33 The Truth “Majority owns homes. Minority don’t.”

Correction- majority own mortgages, not homes. What you see when you look at many home “owners” is not wealth, but the illusion of wealth.

The elites certainly do look after themselves, but the elites are not overstretched debtors calling themselves homeowners.

I don’t think this is a grand design to enslave Canadians mortgage holders, but I do think no “leader” knows or wants to know how to get out of this predicament. So it will be left to the so-called natural forces of the market.

#51 Red Tory Tea Girl on 11.18.09 at 9:19 am

That’s such a shame. I had been holding up Winnipeg as a paragon of big-city real estate sanity for so long now. Maybe it’s just one greater fool with a subscription to the Vancouver Sun.

#52 Devil's Advocate on 11.18.09 at 9:22 am

The indications of the weak state of the economy may not be as gregarious as those which purport the contrary but they are still there plain to see;

1. The dry cleaner I was at yesterday upon the door of which is posted “Due to current economic conditions we have reduced our prices by 15%”.
2. Rising vacancy rates acknowledged by landlords who once bragged of the return on their real estate investment who are now willing to rent for less than their carrying costs in order to reduce the bleeding.
3. Minimal vehicle inventories on dealer lots in an effort to reduce unnecessary overhead caused by carrying needless product that sits collecting dust.
4. EI offices which are too busy dealing with new claims to follow up on the mandatory job search efforts of tenured recipients.
5. Food banks having a difficult time keeping up with the demand.

But these and others are mere whispers compared to the battle cry of the great SPIN machine which tells us the contrary. Just as in any debate gone bad, he who yells loudest usually has the least defendable proposition.

#53 Down by the River on 11.18.09 at 9:25 am


It’s like what Keynes said decades ago: the markets can remain irrational longer than you can remain solvent.

John Paulson famously made billions betting against housing a couple of years ago. What you don’t hear about is all the money he lost continually on those same bets until that point.

#54 X on 11.18.09 at 9:33 am

#2 When the ‘when’ happens, you won’t need to ask.

#55 Toronto C9 Renter on 11.18.09 at 9:40 am

Hey #52 Dev/Adv…

Just one question — what is the address of your dry cleaner??? – thx

#56 Mike (authentic) on 11.18.09 at 9:45 am

$300,000 loss…


Sold for $1m 14 months ago.

Who says Calgary RE is going up?


#57 tjmikey on 11.18.09 at 9:45 am

Seems like Denmark is the model….

The little country tops every list.

Lucky for me I’m a dual.

#58 Sid on 11.18.09 at 9:47 am

RE markets are completely unpredictable. You can guess the general pattern they will follow, but NOBODY has a crystal ball allowing them to predict WHEN a boom or bust will happen. Case in point, June 2007 in Edmonton. After a crazy run-up which saw prices double in just a year, sales simply stopped for no apparent reason. Throughout the next year the market crashed even in periods where interest rates stayed low and oil prices rised to insane levels. During that spring many people talked of bubbles and the market being insane, but most were surprised with how quickly the crash came, how abrupt and without warning. Only buy what you can truly afford, picture a scenerio where interests rates go to 6% or where your spouse loses a job or your tenant in the basement suite stops paying rent and refuses to leave.

#59 pjwlk on 11.18.09 at 9:48 am

My wife and I went out last night with an RE agent to look at a prospective house rental. Older home, 100′ x 300′ lot with the second floor already rented out. Gas & water is included the RE agent said but you pay for the hydro. (There’s separate meters for each).

“Central air?” I asked. “Yes” she responded. “Who’s meter is the air conditioning charged to?” I inquired. …After a long pause, she said “the AC runs on gas and that’s included…”. I couldn’t help but laugh. “I’ve got to see this” I said smirking and off I went to look at the AC unit outside.

Needless to say it was electric and I was to pay for the entire house… Yeah, I think not… lol

#60 Norton72 on 11.18.09 at 9:50 am

#40 Nobody
Notre Dame and Keewatin is not Trashcona(read TRANScona). They are in an undesirable area called the West End.

#61 Joshua on 11.18.09 at 9:57 am

“Various economists were trotted out from the banks (that’s where the mortgages live) to knit their brows, acknowledge anomalous behaviour but remain nonplussed.”

Either I’m not really understanding what you are trying to convey in this sentence (a definite possibility) or you are not using “nonplussed” in the way I would expect.

#62 Grantmi on 11.18.09 at 9:59 am

#32 Mooo on 11.18.09 at 2:45 am
People are like cattle, they always follow the herd even if it’s straight to the slaughter house.

Mooooovvveee Overrrrrrrrr!!!! Need to salt lick some of that cheap yummy money!!


#63 The VULTURE on 11.18.09 at 10:00 am


“Sick houses blamed on ‘toxic’ drywall
Nosebleeds, breathing problems linked to Chinese building material shipped to B.C., Prairies
(Chris Montgomery, Vancouver Province; Canwest News Service)

Homeowners from several communities in B.C.’s Lower Mainland have joined the flood of callers to a U.S. consumer group investigating Chinese drywall that has allegedly begun to sicken North Americans.

Thomas Martin, president of America’s Watchdog, says that in the past two weeks about a dozen Lower Mainland callers have all reported experiencing the same nose bleeds, breathing problems and allergy-type symptoms that have affected homeowners across the U.S.

Continued exposure could result in severe health problems, the group says.

“This type of drywall was produced with materials that emit toxic hydrogen sulphide gas and other sulphide gases,” says a copy of one home-inspection report obtained by Canwest News Service on an affected Florida home where Chinese drywall was installed.

“These sulphide gases are also alleged to cause serious health conditions and illnesses, such as shortness of breath, dizziness, headaches, fatigue, insomnia, eye irritations and respiratory difficulties.”

“It’s scary, it’s a nightmare. We think we are looking at the worst case of sick houses in U.S. history,” Martin said.

“I’d liken it to the problems you find in a meth house (where an illegal lab has been operating),” he said. “If you have had any experience with a meth house, you know it will have to be bulldozed.”

The U.S. Consumer Product Safety Commission said last week it was investigating complaints about the Chinese-made drywall.

All houses affected have shown a common symptom — blackened, scorched wiring behind switch plates and wall plugs. That, coupled with homeowner health symptoms, has allowed research to proceed, Martin said.

The drywall in question was imported from China between 2001 and 2007. According to Martin’s research, at least 929,000 square metres were imported through Vancouver between 2001 and 2006, all bound for Canadian destinations.

So far, research shows some appears to have landed on the Prairies, some in Toronto, he said.

One possibility is that the Chinese drywall was made using gypsum that was first used in slurry containing carcinogens to de-sulphur coal.

Chemicals remaining in the wallboard are sufficiently toxic that as few as three sheets of drywall may be enough to contaminate a home to the point it may require bulldozing, Martin says.

The difficulty for inspectors is that walls may have been built with drywall from as many as four sources — so simply pulling one clean sample is no guarantee of safety.”


14 And deceiveth them that dwell on the earth by the means of those miracles which he had power to do in the sight of the beast; saying to them that dwell on the earth, that they should make an image to the beast, which had the wound by a sword, and did live.

15 And he had power to give life unto the image of the beast, that the image of the beast should both speak, and cause that as many as would not worship the image of the beast should be killed.

16 And he causeth all, both small and great, rich and poor, free and bond, to receive a mark in their right hand, or in their foreheads:

17 And that no man might buy or sell, save he that had the mark, or the name of the beast, or the number of his name.

18 Here is wisdom. Let him that hath understanding count the number of the beast: for it is the number of a man; and his number is Six hundred threescore and six.

“But know this, that in the last days perilous times will come: For men will be lovers of themselves, lovers of money, boasters, proud, blasphemers, disobedient to parents, unthankful, unholy, unloving, unforgiving, slanderers, without self-control, brutal, despises of good, traitors, headstrong, haughty, lovers of pleasure rather than lovers of God, traitors, headstrong, haughty, lovers of pleasure rather than lovers of God, having a form of godliness but denying its power. And from such people turn away!” 2 Timothy 3:1-5

#64 kenken on 11.18.09 at 10:10 am

#33 The Truth

homeowners? majority are not homeowners…they are mortgage owners …banks own the home!!

nothing will happen at govt level which is politically harakiri!… they wont up the 5% threshold at CMHC nor will the opposition parties rally for it! Once a political party is strong enough, they can make that move!
CMHC is a time-bomb … Dont ever forget Fannie and Freddy further south!

#65 Andrew la Fleur on 11.18.09 at 10:14 am

Thanks for the link love. Somehow I feel validated that after years of condo blogging I’ve finally gotten dissed by the #1 Real Estate Bear north of the 49th! I knew it was inevitable :)

But seriously, if you want to grab a coffee next time you are downtown, let me know. It’s on me.

#66 $fromA$ia on 11.18.09 at 10:45 am

Statistics Canada said that inflation rose 0.1 per cent in October from a year earlier, the first annual increase in five months. The consumer price index was negative over that time because of record gasoline prices during mid-2008.

Food was a main driver of higher inflation, although less so than a few months ago. Food prices were 2.3 per cent higher in October than 12 months earlier. -TSX Market News.

My wifes really mad. Cost of food is going up more like 2% per month. What the hell is with StatsCan!?!

Never mind Zombie banks were talking zombie Canadians walking everywhere pimped or preyed on by RE agents, Mortgage brokers and the like.

Oooo, the Fat turd. It’s all because of you! This is hardly Conservative nor is it Canadian.

#67 char on 11.18.09 at 10:47 am

Why this obsession with interest rates ? Nowhere else in the world did the latest RE bubble pop because of a rate hike. Tulip bulbs didn’t crash because of interest rates.

A bubble bursts when people stop buying. Mass hysteria ends for the same reason it began , which is who the hell knows.

Get a grip. House buying continues solely because people (even those who don’t have any money) can afford it, because of all-time low rates. When they change, all changes. — Garth

#68 Bill on 11.18.09 at 10:49 am

People only hear about the trashy parts of Winnipeg.
Take a stroll through the residential suburbs of Tuxedo, Wellington Crescent, and River Heights. Unquestionably, some of the most beautiful neighbourhoods in Canada. Tree lined streets galore. And yes, I have spent time in T.O.,Van, Calgary, and Edmonton.

#69 Grantmi on 11.18.09 at 10:55 am

It’s HERE!!!!


October inflation rate rebounds

Last Updated: Wednesday, November 18, 2009

CBC News

Canada’s annual inflation rate ended a string of four months in negative territory as it hit 0.1 per cent for October, Statistics Canada said Wednesday.

Higher year-over-year prices were seen for food, household operations, furnishings and equipment, and recreation, education and reading, Statistics Canada said.

Full Art – http://bit.ly/3KkCLy

#70 jmcanuck on 11.18.09 at 11:13 am

Another reason why this bubble will end in a bang.

Police confirm drug lab in upscale home


#71 vreaa on 11.18.09 at 11:17 am

Krazy Kanuck & his Vancouver RE Kalkulations:
As home prices inflate to stratospheric levels, the utility of the sale price of many homes would cause a percentage of owners to ‘cash in’ – sell, move/rent, and live comfortably on the proceeds. (As one owner planning on selling and leaving Vancouver told vreaa, “I’ll never have to work another winter”.) The flip side of this is that many potential buyers are now sitting on their hands, as they are aware of the utility of the money that they save by doing so. This position is expressed very well by poster Krazy Kanuck (#4), who has the added advantage of “living temporarily” in Vancouver, which probably gives him useful perspective.
I’ve taken the liberty of posting his anecdote at the Vancouver RE Anecdote Archive, as reflecting an important aspect of sentiment and behaviour relating to the Vancouver RE market at present.

#72 Devil's Advocate on 11.18.09 at 11:26 am

#55 Toronto C9 Renter

Mission Park Cleaners in Kelowna… Mission Park Mall on Lakeshore Drive next to Starbucks… wait a minute EVERYTHING is next to a Starbucks.

#73 KK on 11.18.09 at 11:36 am

#67 char
Why this obsession with interest rates ? Nowhere else in the world did the latest RE bubble pop because of a rate hike.

How did you think the US subprime mortgage crisis started?

#74 Devil's Advocate on 11.18.09 at 11:37 am

#55 Toronto C9 Renter
Still charged me the old $12.00 to dryclean pants. TWLVE BUCKS to dryclean PANTS! Like all the other sleezy marketing what is advertized is not always what is delivered. A SPIN-off of todays economy.

Last time I have those old Rayon Plaid Golf Pants Drycleaned… I’m goin’ out to buy a New Machine Washable Spandex Pair.

#75 Fred Barker on 11.18.09 at 11:42 am

Thanks for the link

Read the user reviews of this book over the last 4 years and then fast forward 4 years and replace US with Canada
The user reviews themselves would make a book


#76 PeckedToDeathByDucks on 11.18.09 at 11:50 am

@Mark’s #24: good observation and cautionary tail. Bitter experience has taught me to avoid the temptation of anticpitating market turns. This can be very costly since the pendulum usually swings way beyond where reasonable thought expects it to go.

Two news items today:
– James Bullar (Fed) says quantitative easing should capture investor’s attention rather than interest rate rise.
In other words, rates will stay at 0 because they absolutely cannot be raised due to the debt. They will twiddle with this money creation and monetization until the cows come home.
– Canada Housing Trust is selling $1.475-billion of fixed rate bonds maturing in 2020. Rate: 3.75%
along with a minimum $1 Billion floating rate issue.

When??? – don’t hold your breath
They can never shut off the paperprestidigitizer.

#77 DaBull on 11.18.09 at 11:51 am

For those who want to know about the residential mortgage market but were afraid to ask.



Homeowner equity:

•48%: The average loan-to-value of Canadian mortgages.
•$130,300: The average mortgage balance in Canada.
•80%: The ratio of mortgage holders with over 20% equity. (This is a somewhat reassuring statistic for people who fear a bursting real estate bubble.)
•1%: Approximate percentage of Canadians mortgage holders whose home is worth less than their mortgage


I put little stock in most things Mr. Dunning turns out, especially for a mortgage industry association. The key question this does not answer is the relative weight of new originations which are 5/35. Looking at the entire mortgage pool is next to meaningless. — Garth

#78 CTM on 11.18.09 at 12:02 pm


I live in Cowtown, and it’s full of empty holes where “amazing!” condos were gonna be.

Eden Group = “Receivership!”

#79 Bottom Feeder on 11.18.09 at 12:06 pm

Just sold my Calgary rental property for $465 K which I bought for $240 K in 2002 using a down payment of 70 K. I was going to use the money to build a retirement home but find the construction costs are 200 to 250 dollars per square ft. Garth, to you think the constrution costs will fall at the same rate as RE in general?

#80 PeckedToDeathByDucks on 11.18.09 at 12:07 pm

“I intend to take serious steps to reduce America’s long-term deficit – because debt-driven growth cannot fuel America’s long-term prosperity,”…..President Obama yesterday

U.S. National Debt which today topped the $12-trillion mark yesterday.

When? asks Wen.
Hu’s your daddy.

#81 nonplused on 11.18.09 at 12:14 pm

Hey look at this:


But don’t worry, job losses in Canada won’t hurt the real estate market because things are different here.

“Sell now or be priced in forever.”

#82 Jim on 11.18.09 at 12:22 pm

Vancouver City Council Endorses hi Density Development Plan

Yes, the boobs who brought us Olympic Village which we will be paying for through increased taxes have now in their infinite wisdom caved in to greedy developers and will approve another 7000 units for an already over crowded downtown. The downtown is starting to look like Hong Kong or Shanghai. People complain they can hear their neighbors in the hi rise adjacent to them. It is noisy and ugly. Vancouver School district enrollment is declining because families are leaving Vancouver because they can’t afford to live there. Businesses are being forced out to the burbs because it is too expensive to locate downtown, yet the transit system is set up to bring people from the burbs to downtown. The city councilors, who should be sued for their mismanagement of Olympic Village, have approved this without having more park space or more transit infrastructure. Downtown is going to be one big mess of lego land shoddy built, tiny boxes in the sky. Thanks for ruining Vancouver city council. They say they are for density, but many of them live in less dense neighborhoods.

#83 RJD on 11.18.09 at 12:30 pm

Mark #24

I agree with you that the timing is the tough one…BUT…we are not all playing the market looking for the big win. I, personally, am sitting on the sidelines renting a decent place in Victoria in a nice neighbourhood that I can’t afford to buy in. So waiting for the timing is no problem. If it never comes my life will still be decent and I won’t have lost my shirt.

PS – a year flies by so fast now that it seems like nothing.


#84 miketheengineer on 11.18.09 at 12:33 pm

Hey Nostradamus #25

I liked the Ukraine article that you posted.

Ukrainian President Viktor Yushchenko has issued emergency quarantine orders for nine of the country’s regions and ordered the deployment of mobile military hospitals. He announced that the nation had been simultaneously hit with two different seasonal flu strains plus H1N1 — and then hinted that all three might have recombined into the deadly new Ukrainian super flu.

Have you stocked up yet?

Are you prepared?

Garth has his bunker!

What are you doing?

This “Ukraine Super FLU” makes H1N1 sound like a joke.

#85 nonplused on 11.18.09 at 12:35 pm

Oh goody! 0.25% is here to stay until 2012.


Since the world is ending in 2012 anyway, I guess it’s forever! Whee!

These guys obviously do not see a recovery in the works any time soon. 2012 will become 2022.

#86 Al on 11.18.09 at 12:56 pm

#77 DaBull

From the provided link:
“Data used in this report was obtained from various sources, including an online survey of
2,000 Canadians. About one-half of the sample (928 Canadians) were home owners
with mortgages and the remainder were renters, home owners without mortgages, or
others who live with their families and are not responsible for mortgage payments or
rents. The survey was conducted for CAAMP by Maritz (a national public opinion and
market research firm) during October.”

This study is a public opinion piece with a small non-randomly sampling. 3 of the 4 data points provided rely on people’s ability to estimate what their houses are worth. I see why Garth doesn’t put much weight on Dunning’s work.

#87 char on 11.18.09 at 1:06 pm

The US RE crash began in 2005. The majority (over 60 %) of ARMS were issued in 2006, and the reset point kicked in therafter. Thus the crash predated the subprime “crisis”. Do you believe borrowers and lenders would take these risks if they thought the asset class would decline ?

A social mood of optimism that RE would always rise predated subprimes.

Interesting that people are so desparate for a rational “reason” that they will mentally rewrite even very recent history.

#88 BAD on 11.18.09 at 1:50 pm

When realtors teach MBA students…

Business students at the University of Alberta are learning about the intricacies of real estate development and investment in a course created by the Alberta Real Estate Foundation, with Alberta Realtors providing hands-on industry experience.

Alberta Realtors turn to teaching

#89 Downsized and Delighted on 11.18.09 at 1:55 pm

No bidding war here: http://www.sportbusiness.com/news/170984/nfl-stadium-built-for-55m-is-sold-for 583000

Maybe Detroit isn’t like Toronto after all Garth?

#90 steven rowlandson on 11.18.09 at 2:06 pm

335 square feet in the Peg, at $307 each.
Unbelieveable Garth! I live in a space that big and it only costs me $428.50 a month heat and hydro included. I rent the apartment and its a 1950s special.
Its not much but its better than a card board box and cheaper than buying a house. When you get priced out of a market look for opertunity in something valuable and out of favor and underpriced before the masses catch on and jump in.


#91 Ultraman on 11.18.09 at 2:10 pm

#68 Bill,

I’ve been to Winnipeg a couple times, in the summer, and I was very surprised how beautiful it is. Trees everywhere and so much green space. I’m hoping to be able to do run the June marathon again.

#92 Chris L. on 11.18.09 at 2:16 pm

“I put little stock in most things Mr. Dunning turns out, especially for a mortgage industry association. The key question this does not answer is the relative weight of new originations which are 5/35. Looking at the entire mortgage pool is next to meaningless. — Garth”

Garth is right, it doesn’t point out the bubble aspect which is the new stuff originated in the last few years. What are these figures anyway? Clearly thew could put these out, but instead they mislead by lumping all home owners with some debt even if it’s small and likely very prudent people with small HELOC’s as well. Lumping the entire population together wont and cant show how the bubble is forming, it is a full section of buying habits over 25 years and not the bubble territory which we all know is what actually produces the detrimental aspects and not loans originated 5 or more years ago. Caught up the numbers RE industry, we want to know.

#93 Duane on 11.18.09 at 2:18 pm

I think the biggest indicator you are in a housing bubble is when median prices are 9-10x median income, when the long-run norm is 3-4x. Prices always return to their norm. And I don’t see incomes shooting up 5x any time soon.

#94 jess on 11.18.09 at 3:13 pm

” Majority makes rules to ensure they keep rising in value. ”

And i might add that just because the majority says so does not make it sane.

Wait a sec! that is until the taxes per year rise too much then you start hearing the whining like:
why should i pay for that school tax … close schools down save money! … i don’t have kids
why should i pay for that road infrastructure and pay for that pollution … i don’t own a car

Whines turn into screams as the monthly costs of ownership squeeze up continues.
Soon this so called majority of owners splits into short term owner vs long term owner .
Whereby the short term rent the house next to yours and of course don’t have the same degree of love for the place and soon the neighbours you thought you knew must move. Higher rent and utilities squeeze them out. Soon the cozy little house next door has a yearly replacement of new faces. That paper wealth sure comes with a premium.

And in truth, MONEY rules since 1% own all the wealth. Therefore, both the renters and owner’s are perhaps less controlled by “democratic” principles than by ‘oligopolistas.’

#95 Soju on 11.18.09 at 3:29 pm

When the number of people taking 35-year amortizations explodes higher. Overall, these loans have doubled as a percentage of all mortgages in two years but that does not tell the true story, since today 5/35 buyers constitute an absolute majority of new originations. Of course, 35-year borrowers pay off virtually no principle for years and years which makes this akin to renting money. No equity means no ability to withstand a market correction.

Actually each payment consists of interest and equity starting from your very first payment.

Second, as more and more individuals start using a 35 year amortization instead of a 25 year one the more prices go up. If people in Asian have 100 year mortages and still manage to do good what’s so special about the 35 year mortgage. Imagine what prices will be when we have a 50 year mortgage. As prices move up banks will need to increase amortization periods in order to do business. And so the cylce continues… RE will be in fewer hands and the amount of renters will increase.

#96 Calgary_rip_off on 11.18.09 at 3:29 pm

#33 “The Truth” :Majority owns homes. Minority don’t. Majority makes rules to ensure they keep rising in value. What better way to to have social stratification. The wealth gap between homeowners and renters widens as per the majority wish. This is what is called a democracy

Your thinking is flawed. It assumes that all variables work together seamlessly. Economics dont work this way. Eventually there is a point at which current market values arent supported because no one can afford to support them. Neighbourhoods dont operate in a separatist society. Mortgages are influenced by the country’s economy. Interest rates are currently artificially low so as to sustain the climate. If other countries currency values change this may affect interest rates indirectly which will directly affect mortgage renewals. Foreclosures may happen and prices of market value will be driven down as interest rates rise. If interest rates do not increase, prices of necessities likely will, possible inflation and stagnation of wages. This will drive down the ability again to support current market values. Assumptions about who the “majority” are are blind assumptions. You assume that the “majority” is happy to pay the current asinine prices for housing. And who exactly are these people? Just as wanting a house crash doesnt make it happen, wanting to sustain false market values wont happen either. Last point: You assume that owners are more “socially stratified” than renters/non home owners. That is illogical. Most owners in Calgary bought before the boom and would be priced out in today’s market, which is strongly supported by the rise in complaints about property taxes in Calgary. It is likely that most renters today paying their landlord have more education and income than the landlord. So it looks like the wealthy are being forced to sustain people with less money and less education. That’s ok, but there is another word for that: Socialism. Unless the majority votes for the NDP or the liberal party in Calgary, I dont see how that is acceptable(they dont-they vote phony conservatives). The majority of these homeowners who also voted for the PC’s now get to watch as their chosen party implodes along with everything tied to it: Mortgages, interest rates, health care funding, the list goes on.

“The Truth”: Please think a little before you make statements. As a homeowner you are obviously being supported by someone else’s hard work and education and then have the nerve to talk about “social stratification”.

#97 r on 11.18.09 at 3:57 pm

“Yes, the boobs who brought us Olympic Village which we will be paying for through increased taxes have now in their infinite wisdom caved in to greedy developers and will approve another 7000 units for an already over crowded downtown”

technically that is a different set of boobs from the set of boobs who are responsible for the Olympic Village.

#98 Down by the River on 11.18.09 at 4:15 pm

@#67 char on 11.18.09 at 10:47 am
Why this obsession with interest rates ? Nowhere else in the world did the latest RE bubble pop because of a rate hike. Tulip bulbs didn’t crash because of interest rates.

The last RE bubble may not have popped due to a central bank rate hike, but one of the factors was a spike in the LIBOR – to pretty much the same effect.

And also, as per the title of this blog, bubbles pop when there’s no greater fool to sell to at an inflated price.

#99 Grantmi on 11.18.09 at 4:18 pm

#82 Jim on 11.18.09 at 12:22 pm

Jim! Don’t forget the new BackLane suites being tested too. You don’t think they’ll make that a long term decision as well.

I agree! I work part time DT Vancouver… and it’s a nut house with all the residential building going on. But were are the businesses. They ARE moving out to burbs. What they’re doing with transit … is LINKING DT to the burbs. Not the other way around. LOL

Move Along!! Nothing to See here!

#100 Soju on 11.18.09 at 4:31 pm

The interest rates are low because the dollar is so high! By the way, when I moved to vancouver over 15 years ago the interest rate was 7% and the market was still strong back then. It’s not the inerest rate that matters the most when buying… It’s the deposit. So renters will just have to save for a longer period of time or go for the 35 year amortization.

#101 Vancouver_Bear on 11.18.09 at 4:43 pm

It’s different here…. record unemployment, record number of ppl feed from food banks or starve ’cause they can’t afford food…..and yet the RE prices conquer new highes…..
I saw on the news a guy from food bank in New York….he was saying that it looks like depression! What that gives that it’s coming to us, it won’t stay in US only.
Not that much time left for this party to continue…
Here is the story from rosy Victoria, where everything is fine according to mobster RE Cartel:

#102 Vancouver_Bear on 11.18.09 at 4:49 pm

Drinking water quality in Vancouver and North Nostri lalaland sucks:


Turbidity levels above 1 NTU prompt increased disinfection levels as a safety precaution and may prompt Metro Vancouver to change the operation of the system to maintain water quality. People with compromised immune systems should always use drinking water that has been boiled or treated to the same level as boiling.

Hongncouver has turbidity level of 5.5…..Coquitlam has 0.34, so the water in Hongcouver is more then 10 times crappier!!!!!
Now I understand how our Nostri makes his predictions… after smoking crack and drinking this water you will see wonderful things….

#103 nonplused on 11.18.09 at 4:54 pm



#104 omg on 11.18.09 at 5:13 pm

Somebody help me with this. I assume that when the bubble bursts, the mortgages that default are fully insured by the CMHC (taxpayer)? That would explain why corporate lenders (banks) do not seem overly concerned?

#105 Grey on 11.18.09 at 5:15 pm

Interest rate cuts?? COME ON.

I give up.


#106 Chincy on 11.18.09 at 5:21 pm

One of the dumbest comments I have seen on here…and there have been alot.

#107 Vancouver_Bear on 11.18.09 at 5:25 pm

#43 Repatriated Expat on 11.18.09 at 7:20 am

Please tell me where it is that buying is cheaper??? I am renting a beautiful condo for 1100/month….same unit would cost me at least 1700 just mortgage without condo fees, taxes and utilities…
What did you have for Math at school …..D minus?

#108 BAD on 11.18.09 at 5:27 pm

Just before the bubble burst in UK there was talk about 100 year mortgages…

SOARING house prices, rising interest rates – how to get a foot on the property ladder when the cost is way beyond the traditional two-and-a-half-times-a-salary ceiling?

Are 100-year mortgages on the way?

When #95, #100 and others bring up the longer amortization periods including the (in)famous 100 year and ‘generational mortgage’ examples…

…time to stock up on necessities at the bunker.

#109 Jim on 11.18.09 at 5:38 pm

Banks cut mortgage rates

Garth, I guess we will have to wait a long time for rates to rise, given this and the fact that the Fed didn’t raise rates


#110 Soju on 11.18.09 at 5:40 pm

I wonder how many people lining up for the food banks still buy cigarettes and liquor? Oh those habits that the sheeple have!

#111 Soju on 11.18.09 at 5:46 pm

Chincy, I think you just exposed your lack of knowledge!

#112 BAD on 11.18.09 at 5:47 pm

When one reads this…

Mr. Flaherty repeated on Wednesday that he hopes a return to economic growth will result in a balanced budget but, if necessary, he will curb spending.

“We have to, quite frankly, manage expectations,” he said.

Flaherty says economy has not recovered

and this…

As a result of the sector’s strong performance, CREA increased its forecast for sales in 2009 by 6.6% to 460,200 units. For 2010, the national industry group said sales would rise 7% to 492,300 units.

The average home price also reached new highs in October, climbing to $341,079, up 20.7% from a year ago.

Homes sales hit record high; outlook upgraded

in the same newspaper two days apart.

#113 jess on 11.18.09 at 5:50 pm

96 – calgary rip off

.. how come the “wealthy” like to hide their money in ‘offshore places’ is this socialism for the rich.

#114 BD on 11.18.09 at 5:56 pm


If you think drinkng water in Vancouver is bad check out the market ticker blog and follow the link to recent pictures of pollution and its effects in China!

Another blog-calculated risk makes a valid point that the only housing statistic that affects the economy is new home sales as they are the only one growing the economy. Resales only grow the leech economy, i.e. jobs that add cost but no value like lawyers, bankers, commision salespeople and retail stores etc. Other than a small amount of taxes and a few upgrades or repairs a good case could be made that resales are a drain on the economy with huge amounts of money spent on something of essentially little value like a new versus used car. After all reselling something does not create real jobs.

#115 Mike on 11.18.09 at 6:02 pm

Interest rates aren’t going to be allowed to rise …. if rates are raised the fiat money; credit; monnetization supporting the entire system will collapse into deflationary depression. Alternatively, raising interest rates will do little to contain non-demand inflation. Look at near zero interest rates, price of gold and real estate …. what are they telling us – inflation. Bottom line – house prices aren’t coming down, even if rates increase. Welcome in the new world.

#116 Vancouver_Bear on 11.18.09 at 6:33 pm

#100 Soju on 11.18.09 at 4:31 pm

Good for you that you own your shack….as for me I like travel and rent and you are chained to your shack. Ha-ha-ha.
Don’t treat renters as a second class citizens as you you do in whateve country you came from.

#117 Vancouver_Bear on 11.18.09 at 6:41 pm

#100 Soju on 11.18.09 at 4:31 pm

Moreover you don’t own your shack, it is actually your shack owns you…..
Winter….clean the driveway from snow, Fall…..raking leaves and preparing for winter, summer…..trim the trees and mow your lawn. You work for it all your life, you trade years of your life for what? How many weekends/holidays you spent making up your shack instead of enjoing life?

#118 john m on 11.18.09 at 6:47 pm

Great post Garth………amazing where these so called incentive programs have taken us ……..pride , the comfort and independence of having your own home are one thing………but in this price explosion i can not for the life of me understand how anyone can justify committing their future and a very large proportion of their income for many years for the satisfaction of being doomed to live in some of these pieces of crap for eternity and feel any sense of pride of ownership?

#119 Vancouver_Bear on 11.18.09 at 6:48 pm

#114 BD on 11.18.09 at 5:56 pm

According to Nostradumba$$ we are golden here with lots of crystal clear drinking water….and that is simply not true. Water in china may be polluted heavier, BUT it’s not crystal clear here either!

#120 wetdog221 on 11.18.09 at 7:03 pm

No offense intended to those who chose to live somewhere exposed skin pretty much freezes on contact with outside air for at least 2 months of the year, but you’d have to pay me a minimum of 110K to live in WinterPeg.

#121 RJD on 11.18.09 at 7:03 pm

#100 Soju

“So renters will just have to save for a longer period of time or go for the 35 year amortization.”

1. If renters have to wait longer then…ta da…demand will drop. That’s how markets work.

2. If they go for 35, they will have less to spend and less to borrow over most of their entire working life which also means demand will drop as they will have built up less equity to upgrade (as many do) or simply spend on other things.

#115 Mike

“Interest rates aren’t going to be allowed to rise ”

Ever heard of the bond market and how this affects fixed mortgage rates? Who is not going to allow this?

And if there is inflation, bond yiilds will go up so investors get a real return and BOC is mandated to intervene with a higher overnight rate. With interest sensitive investments such as highly leveraged real estate, it is very likely the interest rate effect will significantly outweigh the inflationary effect.

#122 Soju on 11.18.09 at 7:28 pm

Lots of responses… To the guy running for the bunker, since your renting your place… Will you rent the bunker or get a mortgage.

To the guy happy about travelling while he rents… I actually own several places and it doesn’t matter to me that I have several mortgages because I’m not the one paying for them… You are!

And to the last person RJD… Once people stop buying places becauses their not affordable… Then come the landlord increasing rent because renters have nowhere else to go!

Darn reality certainly stinks!

#123 Cory on 11.18.09 at 7:34 pm

When realtors teach MBA students…

Business students at the University of Alberta are learning about the intricacies of real estate development and investment in a course created by the Alberta Real Estate Foundation, with Alberta Realtors providing hands-on industry experience.”

This is awful but unfortunately tech schools today are full of instructors of this low a caliber.

I was shocked the banks lowered their long term rates but then bond prices have been up lately.

We must be near the end, even I am starting to question if things will ever change for the worse even though logically they should. That’s the problem, logic dies not exist in politics. All of the latest fake and artificially supported real estate market is for vote getting and hunger for power. Plain and simple.

#124 rory on 11.18.09 at 7:46 pm

#96 Calgary_rip_off …you have mentioned socialism a few times in the last few posts like it is the saviour of everything …Glenn Beck, like him or hate him he offers a perspective, (I am neutral) and he has a new book called “How to stop small minds and big government – arguing with idiots” …it is a USA book thru and thru but even socialists should read it…in a nutshell it is that big G is bad regardless of your faith or party affiliation.

He also has some very good points and a lot of common sense agruments.

Some Socialism Quotations for socialists …

Socialism is a philosophy of failure, the creed of ignorance, and the gospel of envy, its inherent virtue is the equal sharing of misery.
Winston Churchill

The inherent vice of capitalism is the unequal sharing of blessings; the inherent virtue of socialism is the equal sharing of miseries.
Winston Churchill

Democracy is the road to socialism.
Karl Marx

As with the Christian religion, the worst advertisement for Socialism is its adherents.
George Orwell

Democracy and socialism have nothing in common but one word, equality. But notice the difference: while democracy seeks equality in liberty, socialism seeks equality in restraint and servitude.
Alexis de Tocqueville

Socialism is the same as Communism, only better English.
George Bernard Shaw

To cure the British disease with socialism was like trying to cure leukaemia with leeches.
Margaret Thatcher

When one makes a Revolution, one cannot mark time; one must always go forward – or go back. He who now talks about the “freedom of the press” goes backward, and halts our headlong course towards Socialism.
Vladimir Lenin

The goal of socialism is communism.
Vladimir Lenin

#125 curious to know on 11.18.09 at 7:47 pm

How about that for helium?

Banks cut fixed-rate mortgages –


#126 EB on 11.18.09 at 8:02 pm

“….and that is simply not true. Water in china may be polluted heavier, BUT it’s not crystal clear here either!”

That’s a bit silly – turbidity is up because of the rain. Such is real life with a reservoir system. There are lots of things to complain about here, but we’re hardly in bad shape with respect to the ordinary quality of our water.

Even in The Big One, with the normal system nonfunctional, most Vancouverites with a little sense and a bottle of bleach will be able to get all the drinking water they need.

#127 X on 11.18.09 at 8:09 pm

Incredible photos of pollution in China.


Leaves little wonder as to why they can afford to produce everything for cheaper.

#128 BD on 11.18.09 at 8:12 pm

#119 Vancouver_Bear

N. jr I find humerous in his delusions.

Did you actually go over to Karls site and check out those pictures? I suspect you would start questioning real quick why half our food comes from there. My personal favorite is the one of the factory pipe dumping thousands of gallons o sewage a few hunred yards above the cities water intake pipe. I always thought the days of abandoning deformed children to die was a hundred years or so in the past but it appears to be a common practice over there today as there looks to be a high percentage of deforities due to pollution.

Sorry I have never been able to make the link thing work, probably because I don’t have word on this machine.

#129 homeless on 11.18.09 at 8:14 pm


you said in your previous posts that Bank of Canada is powerless when it comes to mortgage rate and bond market sets the price for mortgage rates. Are you suggesting now that BoC actually controls the rate and Mark Carney is not powerless.

I made myself clear. — Garth

#130 eddy on 11.18.09 at 8:23 pm

It would help if our prime minister would at least acknowledge the bubble.

What’s he doing in India? visiting our jobs? paying his Bell bill? recruiting employees for Revenue Canada?

#131 Raffy P on 11.18.09 at 8:35 pm

Dear Garth,

I am one of your loyal followers. In the US they have the Case-Shiller Housing index, which shows how house prices changed since the year 2000 (base year). It has information by key cities and states. Is there an equivalent report here in Canada?

Thanks and more power to your blog.


#132 Who dun it on 11.18.09 at 8:42 pm

#59 pjwlk on 11.18.09 at 9:48 am
How could you tell the AC was electric and not gas? Thanks.

#133 jess on 11.18.09 at 8:45 pm

harper is in india to sell uranium!

#134 jess on 11.18.09 at 8:58 pm


“the cost of housing compared to the income people are bringing in.”

The stats show that over the past three years, more than 6 percent of Oregonians reported that they ate less for financial reasons.

And Oregon State University research says the real number is actually worse.

And yet, according to federal officials and the state, Oregon has one of the most-effective food stamp programs in the country.

So, why does the state rank second-worst, behind only Mississippi, in terms of ‘very low food security’?

Kevin Concannon is the U.S. undersecretary of food and nutrition services.

He, and other federal officials, point the finger at high unemployment.

Kevin Concannon: “That is one of the variables that puts people at risk, and makes it difficult, and makes it much more likely that you’ll be food insecure – or hungry.”

But researchers say while unemployment is a factor, the state has had high hunger rates even during boom times.

Mark Edwards is a sociology professor at OSU.

Mark Edwards: “Even ten years ago, we found that Oregon had high hunger rates, even among people who were working – and had full-time, year-round jobs. So there’s something else going on in Oregon that I suspect has to do with the cost of housing compared to the income people are bringing in.”

The USDA report says 17 million Americans cut back their eating because of finances. In Oregon, that number can be roughly estimated to be about 200,000 people.

#135 Nostradamus Le Mad Vlad on 11.18.09 at 9:08 pm

#84 miketheengineer — Hi Mike. Did a little more digging and came up with the following.

This link has a rolling bar of ever-increasing and decreasing things on the planet, along with Ukraine 1; Chemtrails and H1N1
Another take on oil. “Apparently, there’s a global oil scam making Bernie Madoff look like a petty thief.”
Local currencies are making headway in various parts of the world. This could be one of the reasons for the previous link — Funny Money
Big Brother draws ever closer. 4:25 clip.

The Bovine Excrement Meter exploded over Neptune earlier today (anyone notice the brown-out?). Poor babies. Maps explain it better.

#136 Dollars-'R'-Us on 11.18.09 at 9:09 pm

I wonder what the monetary policymakers (we know who they are) who, in pre-internet years enjoyed the one-way flow of information and opinion through the puppet media, are coping now that folks can actually *question* their policies in real time!

#137 Dan in Victoria on 11.18.09 at 9:22 pm

Post#122 Soju, Here in Victoria rental suites and house vacancys are starting to creep up,meaning prices will reflect this.Check out Craigslist Victoria.And to the South see what our neighbours are starting to experience.

#138 Taxpayer like you on 11.18.09 at 9:23 pm

79 Bottom Feeder. Just think about it, you’ll figure it out.
Also, would you consider buying an existing house for

82 – Jim. Google “Vancouverism”. Keep the bigger picture in mind.


I think this was attribued to Thomas Jefferson (but who cares)

“A government big enough to give you everything you want is strong enough to take everything you have”

You just always have to be aware of that, no matter which way you vote.

#139 $fromA$ia on 11.18.09 at 9:24 pm


We need more thread pictures of hot chicks, keep em’ comming.

#140 Virgil on 11.18.09 at 9:58 pm

Canada’s housing bubble could soon burst: Merrill Lynch

Canadian households are nearing the financial tipping point that Americans reached two years ago, which plunged their housing market into the deepest recession since the Great Depression, a senior Bay Street economist warned Wednesday.


#141 Gord In Vancouver on 11.18.09 at 9:59 pm

#100 Soju

Vancouver real estate bulls are in serious trouble if your comments are indicative of their sentiments.

#142 Calgary_rip_off on 11.18.09 at 10:02 pm


If you dont like socialism, leave Canada. As a dual citizen I grow tired of the Canadians who are American wanna bes. I agree with Marx who said that democracy is the road to socialism. Look at Calgary: In many cases more educated and harder working and more financially wealthy renters supporting home owners with less education and less earning power. Think it’s not so? Go ask what the pre 2005 mortgage owner is paying. It’s less than my rent!!! Some would say that’s the owners entitlement. Yes it is. It’s also my right to say that those same people would be living in some apartment dump if they hadnt bought pre 2005, maybe in Forest Lawn somewhere.

I suggest you go marry an American and go live in that hellhole that they call a country down south. You can have your democracy. I lived there long enough.

I’ll happily provide my taxes to help support needy Canadians when they need it. What I dont want to do is pay for top officials salaries that do nothing. Such as the Progressive Conservative Party(ie. pseudo-American joke party). If I see you in the hospital where I work, having a heart attack you can be convinced that you will get the best care anywhere-delivered promptly and helping you to stay alive. So I put my money where my mouth is and help Canadians to stay alive. I paid for 9 years of University education and now my fellow Canadians benefit directly from my work and effort, which I am happy to do. Please refrain from comparing to the United States unless you are an American. I dont want to hear about it, because unless you are an American, you have no idea. You think you know. You dont.

Jess: My money goes towards my rent and saving up to buy when of the crap shacks in Calgary when interest rates rise or I get enough cash to blow it on one of these overrated holes in the wall on the prairie. I dont have excess income to blow on offshore accounts as you state or anything else for that matter. Why would I be wasting my time on this blog if I were that rich? I wouldnt be living in Calgary or any of those places where real estate is a rip off that’s for certain, contributing to an economy which has been screwed over by pseudo-conservative values and has made Alberta a Canadian embarassment.

Rory, if socialism is so bad, why does Canada for the most part operate so smoothly, and why is Scandinavia such a great place? It must be because people helping other people is what a civilization is about. If you have more power, intelligence, strength, whatever, you are OBLIGATED to help your fellow person. This isnt fascism where the state tells you to give up your stuff completely. You pay taxes which in faith you give to help others out, not pay for the prime ministers salary when he does nothing. I suppose you may wish to go to the USA and pay taxes which go to fight a stupid war and provide no health insurance. How lame.

Maybe you conservative dudes should go live in Texas for a while. Sure the real estate is cheap there. Im sure you would appreciate the mind set of not getting help when you need it. That’s what capitalism is all about. One guy loses his cash and the other gets it. Doesnt work.

#143 Boombust on 11.18.09 at 10:13 pm

“It would help if our prime minister would at least acknowledge the bubble.”

The man is a complete, utter waste of skin.

A real bore, too.

#144 Piccaso on 11.18.09 at 10:49 pm

“I think the biggest indicator you are in a housing bubble is when median prices are 9-10x median income, when the long-run norm is 3-4x. Prices always return to their norm. And I don’t see incomes shooting up 5x any time soon.”
I’m Inc’d and contract, I make less per hour now then I did 2 years ago. If I even wanted the same per hour (not more) I’d be sitting because someone els will work for less. My income has gone down, not up!

#145 pjwlk on 11.18.09 at 10:51 pm

#132 Who dun it asked: “How could you tell the AC was electric and not gas?”

Two reasons a) there was no gas line hooked up to the condenser unit outside, and b) there was a 20 amp electrical wire hooked up to it.

Believe it or not there actually is a natural gas powered AC units that works on the same (absorption) principal as the old gas/kerosene refrigerators. (http://www.gasairconditioning.org/robur_cycle.htm)

The plant I work in actually used to use high pressure steam for their absorption AC units back in the 60’s. I’ve never seen anything other than electric for residential use here in Canada though, hence the laughter…

#146 Devils Advocate on 11.18.09 at 10:55 pm

#135 Nostradamus Le Mad Vlad


#147 Devils Advocate on 11.18.09 at 10:58 pm

#59 pjwlk on 11.18.09 at 9:48 am “How could you tell the AC was electric and not gas? Thanks.”

Electricity makes your extremities buzz – at light load, beyond that you real aren’t gonna care, and gas smells like a Fart.

#148 Taxpayer like you on 11.18.09 at 11:04 pm

Rip-off – another quote, from Margeret Thatcher

‘The trouble with socialism is that eventually you run out
of other people’s money’?

Again, no aboslute measurement here, no line in the sand. It is, like Jefferson’s quote, something you must be aware of, and decide how far you are comfortable taking it.

#149 rory on 11.19.09 at 1:39 am

#142 Calgary_rip_off

Grasshopper …I know a way to quell the anger ..lose the dual citizenship …if you do not then you are a fraud … pick please.

Nine years of university education + in healthcare, and not making $400K plus …loser in comparison to other posters …now I get the anger.

Socialism is a one way street to become the “nanny state”…besides I am Canadian – thru & thru …unlike you…can you tell I feel dual citizens are just hedging their bets.

P.S. – Sweden loves you & and they love Americans…I think?

#150 rory on 11.19.09 at 1:46 am

#142 Calgary_rip_off you said:

“If you have more power, intelligence, strength, whatever, you are OBLIGATED to help your fellow person.”

Cannot disagree …but what in the heck has this got to do with Government. Make US do it or should we have a society in that we WANT to do it …your vision makes us prostitutes beholding to the pimp masters – the big, bad G.

#151 Vancouver_bear on 11.19.09 at 1:55 am

#122 Soju on 11.18.09 at 7:28 pm

You are funny man, come to your renters and tell them you are increasing rent 20%….and immediately you will be the one paying several mortgages.
Rental market will see rents declining as wages are already stagnant….vacancy rates going up in Vancouver, on contrary bank rates will go up and your shacks will stay empty which will force you to decrese your rent and pay the difference yourself to minimize bleeding, the worst is yet to come and that will start just after five circle circus is over!

#152 Evangeline on 11.19.09 at 10:24 am

rory and taxpayer like you

here’s another good one …

Of all tyrannies a tyranny sincerely exercised for the good of its victims may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies, The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated; but those who torment us for own good will torment us without end, for they do so with the approval of their own conscience. — C.S. Lewis

#153 The Garth Turner Effect | TrueCondos.com - The Best Source for Toronto Condos on 11.19.09 at 10:29 am

[…] Turner posted a link to TrueCondos.com from his very popular blog: Greater Fool. Garth is probably Canada’s best known ‘Bear’ when it comes to real estate and […]

#154 Confused on 11.19.09 at 11:39 am

Hi Garth,
I started following your blog last year after purchasing your book greaterfool.I read your posts every single day.My husband and I make about 120,000.00 yearly.We both have very secure government jobs.My husband will have a great pension(company)at the end.We have 3 kids which two are in high school soon to go to university.We sold our house last year when the market hit its low in March for 60 000 less than what we could have gotten today.My husband as his second job builds on the side.We have accumulated a decent down payment.We are in a one year lease paying 2300 a month for a 2500 sq ft townhouse.We are about to give an offer on a lot because we just don’t know what to do because everything so far has gone the wrong way.The rent is killing us with our cash flow.The house we want to build would cost us approximately 720,000.If you were to buy that house now they are selling for 820,000.Now we could get a 10 year mortgage for 5.5(amortized for 25 years,if we wait we might pay more for interest.We have worked harder than anyone I know amongst our peers to get ahead.We have moved our kids from house to house every 4 years or so just trying to build equity.If prices fall the house we build could drop to approx.660,000 at 20% decrease or down to 580,000 (30%)but at least our money meanwhile won’t be going down the tube paying rent and we’ll have a low interest mortgage.If prices just stabilize and only go down 10% it doesn’t affect us.We would need a 300,000 mortgage.We do have other investments but this is how much of a mortgage would be needed.I am so scared we always seem to time everything wrong,we just keep chasing our tail and not getting ahead even though we work so darn hard.I really respect your opinion.Thank you for taking the time to answer this.

#155 Soju on 11.19.09 at 12:30 pm

Gord in Vancouver… Unless you know what my strategy is, your comments is useless.

Vancouver Bear… Who said I was increasing my rents. Actually, I only increase the rent on new tenants not existing ones.

#156 Vancouver_bear on 11.20.09 at 3:42 am

#155 Soju on 11.19.09 at 12:30 pm

good for you that you are not increasing rents, but prepare to hold them fixed for the next 5-7 years or even lower them when 5 circle circus leaves the town.

#157 The Garth Turner Effect | Real Estate Toronto Canada on 11.20.09 at 2:47 pm

[…] Turner posted a link to TrueCondos.com from his very popular blog: Greater Fool. Garth is probably Canada’s best known ‘Bear’ when it comes to real estate and […]

#158 Charles on 11.26.09 at 4:02 pm

So when you do think the Canadian market will recover? Sooner than Las Vegas? After?