Jason’s almost 40 now, two kids, family income a little over $80,000. Normal guy. Sometimes he procrastinates, though. “Love your straight-up blog. But I wasn’t able to get tickets to your upcoming talk in Victoria,” he says, “because I waited too long.” (I’m there tomorrow night.)

“So I thought I’d email you a question,” he wrote me on the weekend. “ I’ve been reading about your generalized forecasts for the real estate market in Canada, and was wondering if you could offer your opinion on the situation here in Victoria, which many, including real estate brokers of debt consider to be a different, “special”, more protected market (climate, ocean, limited land, etc.) Like you say though, folks back east can’t sell their houses to make it over to the wet coast.”

How special is Victoria? Well, only 395 real estate deals of any kind went down in the region last month, which is the lowest number since they started keeping records 20 years ago. That’s a 50% decline from the same period last year. Oh, and in August, sales were also at the lowest level since 1990. That’s special.

But, happily for the real estate community, 11 of those deals in September were for houses priced over $1 million, which helped boost the average price to just a hair under $600,000, even as the median price slipped.

Well Jason already owns a house. Bought it six years ago for $280,000, and still owes $140,000. “But it’s very salable,” he says, “and I could sell it now for $510,000.”

Here’s his thing: “I want to move upmarket to the $650,000 range. I know it sounds nuts to those homeowners in Saskatchewan, Newfoundland etc. But those 650k properties will lose more value proportionally than our 510k house if the market tanks like you predict, making a move upmarket more affordable for us. We’ve seen this before. Likewise when the market was rocking those 650 houses were 750.”

So, he asks which option he should choice: “One, do we hold? Or, two, sell now (high), pay the mortgage pay-out penalty, go through the hassle of renting and wait to buy low, given your predicted market conditions until 2013?”

Well, Jason (I know you’ll be reading this), the first order of business is getting an accurate, realistic appraisal on your house. Has it really almost doubled in value in six years? How easy will it be to sell? Currently there are 4,323 properties on the market – enough to satisfy demand for the next 11 months. So if you list this week and it takes 10 months to find a buyer, what will it be worth then?

Second, if you’ve really scored a tax-free capital gain of $230,000 and can realize it by finding a greater fool buyer, why the hell wouldn’t you take it? That’s equal to your entire after-tax family income for the next four years. It’s like winning the lottery. Is this ever going to happen to you again?

Third, what are you smoking? If you bundle your entire windfall and throw it at a house costing $650,000, you’ll end up with a mortgage of $300,000 (instead of $140,000), and no liquid assets out of the former property. That makes you utterly undiversified and exposes you fully to any real estate correction in Victoria (where the realtors are also on drugs). So, buying now is a really lame idea – which you have figured out. Which brings us to renting.

Obviously, if you invested the $370,000 you might receive out of a property sale and got a 7% return (I’ve covered this ground a few times), your annual cash flow would be about $26,000 – or a third of what you currently earn. That should cover most of your rent, allowing you to sock away a large whack of your salary (seeing you no longer would have mortgage payments, property tax, insurance or maintenance to worry about). Rent for five years, and you could amass the better part of a hundred grand, which would give you a nestegg approaching half a million.

And with money like that comes choices.

Sure, you can choose to squander it buying an average Victoria house which will be worth less in a decade than it is now, but a guy who reads this blog can’t be that dumbass stupid. Let me use crayons:

  • Canadian real estate is where the USA market was in 2006.
  • Victoria could be the Phoenix of the north.
  • There is no caravan of Boomers in golf shirts coming over the mountains from Mississauga.
  • You live in one of the most unaffordable cities anywhere.
  • The economy is moribund.
  • Your big new mortgage will renew at higher rates.
  • Love liquidity, not a house.
  • If you really need real estate, move to Duncan. (I hear they now have the Internet.)
  • This will not end well.

If you come on Wednesday night, there’ll be a seat for you. I’m not finished abusing you yet.


#1 Kim on 10.11.10 at 9:11 pm

Hello Garth,
I am wondering what the “melt” looks like? If prices drop 10 to 15% in 2011 what do you estimate they will drop (melt) each year after that?

Impossible to tell yet. But look at the US. We might be lucky with negative 5% per year. — Garth

#2 TaxHaven on 10.11.10 at 9:16 pm

$80,000?? Who pays these guys? Must be an oxymoronic “government employee”…it IS Victoria, after all.

Victoria? Nearly as bad as Kelowna. Look at the big picture. Overpriced. Dependent on government spending & the auto-fueled tourist “industry”. Unaffordable real estate. Higher food & energy prices. No job growth whatsoever. Next-to-no industry to speak of.

If he can truly realise a gain of anywhere near that much, why NOT downsize to Duncan…? Closest thing to free money…

#3 Sherri on 10.11.10 at 9:26 pm

Why rent?
Do what Garth was recommending a little while back.

Sell Canada and BUY the USA.

You might not get title. You might get CDO’D up the tail pipe. You might not get title insurance. Your new property may be held up in the courts for years.
The original owner/bank might come and take it back.

But, what the hell hey Garth…let’s Vulch in the USA…All risk be damned.

Do you have any idea how moronic you sound? — Garth

#4 Jim Summers on 10.11.10 at 9:32 pm

I think the mistake is to move upmarket. Jason has half his mortgage paid off in only six years. He has already won the housing lottery; he has a mortgage he can afford. If he can make the small sacrifice of staying where he is; he can ignore whatever happens to Victoria housing prices.

And kiss away that capital gain? — Garth

#5 blase on 10.11.10 at 9:41 pm

Great post Garth. Clear as clear can be.

#6 Sherri on 10.11.10 at 9:53 pm

Do you have any idea how moronic your recomendation was?

Only if morons attempt it. — Garth

#7 mr mike on 10.11.10 at 9:54 pm

…but Garth, you gotta live somewhere and landlords suck.
I’m in the same boat here in Vic…bought 12 yrs ago.
I ain’t selling…why? Move to drunken?
No thanks, I’ll hang tight, even if it takes 10 yrs to rebound down here.
I dont really need the money and this is MY HOME after all.

#8 Bill Gable on 10.11.10 at 9:59 pm

I am sorry to come off like a Turner campaign worker here – but I would sleep a lot better at night, if we had Mr. Turner as our Finance Minister.

Today’s post is another gem.

It must be the air on those AC jets, that Mr. Turner is living on these days, as he travels this wondrous land, trying to talk sense with the Real Estate maroons, extant.
* With apologies to Bugs.

#9 Caron on 10.11.10 at 9:59 pm

Florida land.


#10 The Original Dave on 10.11.10 at 10:04 pm

G Man, posts like this guy’s are pretty funny. They know exactly how you feel about the situation, they just wish you’d say something different. This guy wants you to say, “sunshine, Victoria is different! You are special. Now get out there and gobble up $650,000 worth of house. And as far as my talk goes, you don’t need it…you’ll do great because you make excellent choices and you can work through it”.

If someone says they read your blog, they know how you feel. It’s not like he was asking about some remote town that has gotten hit hard and there’s been big price declines with sensible home price to household income ratios, he’s asking about Victoria. We all know the story there. Sometimes it’s better to tell people to go all in. The madness ends with the greatest fools taking the plunge.

If you’re thinking of buying in Victoria, then I wish I knew you in the early 1990’s as I would have been selling you all kinds of hockey cards that were going to be worth thousands of dollars 20 years later.

#11 Duke Jocic on 10.11.10 at 10:07 pm

I say sell the house and get liquid. If you’re going to buy a bigger house don’t do it. Opt for option number two: go to Vegas and bet it all on black on the roulette wheel. It’s either that or getting mauled by the negative equity bear. You choose.

#12 Rico on 10.11.10 at 10:08 pm

Garth you are truly amazing…I’ve never seen anyone write “moribund” with a crayon.

#13 openeye on 10.11.10 at 10:11 pm

I am in similar situation of Jason. If you keep the house and have some extra cash every month, What to do with the extra cash flow?….keep paying mortgage faster or use the extra cash flow to place it in something else?….what to do when you dont like the stock market/?

#14 mr mike on 10.11.10 at 10:11 pm

I meant Druncan…and no they don’t have internet yet.

#15 Frank from Calgary on 10.11.10 at 10:17 pm

I agree with Garth, if Jason can make such a wind fall then go for it. Rent a few years, appreciate some capital and then perhaps go in and buy a property with cash. No mortgage, no interest.
I see simular situations here in Calgary, and I go with the same advice. Sell if you can get a load of money, sit tight and invest, then go in when things bottom out.


#16 T.O. Bubble Boy on 10.11.10 at 10:31 pm

This guy should put the house on the market immediately, and hope that he gets a “low-ball” offer of 5% under his $510,000 (say $485,000) — maybe from some first-time buyer who thinks that anything under $500,000 is the cheapest property you’ll ever find in B.C. (since it’s different there, and house prices only go up).

Then, watch the fireworks in spring 2011 when every single seller hits the market at the same time, hoping to re-ignite the insanity of 2005-2010.

That $510,000 house will be valued at $450,000 or lower by this time next year.

#17 blase on 10.11.10 at 10:31 pm

Hey Sherri #3,

What’s moronic about suggesting buying assets at low prices? Are you actually suggesting that Garth should have been psychic and known what was not known by the mainstream media?

So tell us genius Sherri, some futurist news headlines that will be uncovered in 2011. We will check back with you then!

#18 Dan in Victoria on 10.11.10 at 10:37 pm

I’ll sell you my house for 650,000 Jason.
Has everthing you need, back up Generator, Bunker, Large shop, suite, LOTS of parking……
Close to the ocean, walking trails near by…

And this is the living room, over here is the dining room… OH MY look at the sunshine it bathes these rooms.
Nice modern kitchen, look at the quality.
Notice anything???? yes thats right radiant hot water heat through out.
Look!!!! an updated bath room.See how the owner kept all the original look but its discretely modern.
Down the hallway we have all the bedrooms, large aern’t they?
Look at the view !!!!! Thats an eagle tree you can sit on the deck and see them.
Look at this yard its huge, yet oh so easy to maintain.

Honey… Honey….. HONEY WAKE UP!!!
Your dreaming again……

Oh crap dear I thought there was some one going to buy the joint.

#19 Timing is Everything on 10.11.10 at 10:44 pm

Well Jason already owns a house. Bought it six years ago for $280,000, and still owes $140,000. “But it’s very salable,” he says, “and I could sell it now for $510,000.”
Hmmm, He bought in 2004. His timing was off by 3 or 4 years…. I bought 2 acres on the Saanich Penninsula in 2001 for less than that, including a ‘very salable’ house. 15 minute commute to work. I suspect his wife wants to move (up). He should stay put or sell…TODAY….and move to Weyburn.

Moving to Duncan…Ha!…Garth, you obviously have not done the commute thingy over the Malahat. An hour (on a good day) twice a day, over the Malahat, if no traffic tie-ups/accidents. Gas costs, wear and tear on the car (depreciation), no easy access off the island (Airport/ferry), quality of life goes for crap. They don’t call it Drunkin’ Duncan for nothing.

If Jason and wife have stable work in Victoria, advise him and wife to learn to be appreciative with their current living space. Also advise Jason and wifey, not to get greedy.

I know the guy in the picture…He’s from Duncan.

#20 Min on 10.11.10 at 10:47 pm

“let me use crayons” — perfect

#21 Jim Summers on 10.11.10 at 10:48 pm

How much of a capital gain does it take before it is worth it to sell and rent? $230,000 may be enough, but maybe not for $100,000 or $50,000. If real estate isn’t your entire net worth, at some point you might as well stay put and ignore the potential capital gain.

#22 Willy H on 10.11.10 at 10:51 pm

Moving upmarket from $500K & pocket change to $650K property at market peak – can this be for real?

Yes, unfortunately it can. There will be property virgins and upmarket buyers the entire length of the downward trending curve. At each level of price decline they will assess their own level of affordability and take the plunge (if they can find a “greater fool” to voluntarily shackle themselves to their existing crack shack!).

These folks are not concerned with declining asset values, interest rates, high dollar and long-term unemployment. They are fixated on their new address and bragging rights at cocktail parties. The financial pain can be dealt with later, much much later. After all, everything we need is only a monthly payment away in a world of almost free money!

To make matters worse there are still folks who want to satiate their property desires with a quickie condo purchase. The want a rental property or worse yet a short-term flip to make them Canada’s newest slum-dog millionaire. Many are immigrants to Canada who have experienced 15 years of real estate appreciation and they just cannot fathom the inevitable decline. These folks make up what appears to be a bottomless pit of “greater fools”.

In yesterdays post you mentioned your predictions might be a tad “girly-man”. Yup! But who could have predicted the perfect storm currently brewing? The US economy has severe pneumonia and the CAD$ is on a double dose of Viagra in an economic monastery.

This is going to get real nasty!

#23 Tony on 10.11.10 at 10:53 pm

The last dozen times i heard someone say “you got to live somewhere” while visiting Yonge Street i saw those same dozen people begging for change. The surest way to have to work until you die of old age is to blurt out the phrase “you got to live somewhere”.

#24 BrianT on 10.11.10 at 10:56 pm

Jim Willie is predicting real legal scrapping in the US over the widespread financial fraud-he even thinks RICO will be a factor http://www.kitco.com/ind/willie/oct062010.html

#25 Mean Gene on 10.11.10 at 11:18 pm

Put the house on the market and see what happens… Nothing ventured, nothing gained.

#26 Dan in Victoria on 10.11.10 at 11:27 pm

Gee,back when my grand parents moved here it was called, “Rainbow Island”

My grandfather made his fortune digging for…….



#27 Jeff Smith on 10.11.10 at 11:29 pm

“but a guy who reads this blog can’t be that dumbass stupid”

That’s the best line I have ever heard.

#28 Tom on 10.11.10 at 11:34 pm

It’s amazing how many people with no financial savvy have lucked out on the recent real estate boom. Victoria has three industries: Government- which is declining, construction-which has almost come to a standstill, and low paying tourism jobs. Anyone who has to rely on a salary for the long term and who has a mortgage is going to go through a lot of stress. Many people left Vic back in the 90’s because there were no jobs. Many people from Van would like to get away from the traffic snarls and go to the Vic, but there are so few good paying jobs. When things start to slip there, they’ll really tank. Fasten your seatbelt…

#29 canuckfilly on 10.11.10 at 11:36 pm

Hey Garth Just got back from Alberta, Edmonton, bedroom communities and south thru Rt 2 back to God’s country (Ha Ha) and I definately got the impression from everyone I spoke to there right from Vegreville to Edmonton that ” they do not have any kind of recession”. Lg developments still working to put in all kinds of services and prices still elevated in these bedroom communities. Lots of hiring signs but they seem to be the lower end service , food jobs. No-one there thinks Canada is in for any kind of shock. How about some comments from you Edmontonions.
100 Million $ expansion forInterfor here in our town, and an old mill reopening close by. Interfor is a non union company so I assume they know what they are doing. No one here believes anything I say about your blog. They think only large centers will be hit with downturn in real estate values. I still agree with you, how can the next generation afford to buy these houses we dumped equity into, there will be a correction maybe not so bad in the small communities who already had lower real estate values.

#30 Timing is Everything on 10.12.10 at 12:12 am

Hey Garth, since you’re coming to abuse Jason…Here’s a little lite reading for you about the CRD (Future Population, Labour Force, Employment and Housing in the Capital Regional District) to 2038…It’s probably just a bunch of BS, but ya never know….I think the world ends in 2012…I keep forgetting the year. But some of this data may be useful. ;)


#31 Patz on 10.12.10 at 12:24 am

“If you come on Wednesday night, there’ll be a seat for you. I’m not finished abusing you yet.”

Garth, “The whip.”
Jason, “No, not the whip.”
Garth, “The whip!”
Jason, “No, anything but the whip.”
Garth, “Anything?”
Jason, “The whip, the whip.”

Ah, the joys and the pain of one’s own blog.
So many to abuse; so little time.

#32 Nostradamus Le Mad Vlad on 10.12.10 at 12:28 am

Main thing is — how long will Jason’s job hold up?

Any job can be replaced with a better, newer one. Check out what is happening to those folks age 50+ who have been laid off in the US, and don’t have a cat in hell’s chance of ever getting another job. No such things as safety or security exist.

Anyone can sit back, gloating about a nice home, great n’hood, etc., but what happens when the place he is working for sets up shop in Mexico or Costa Rica, because labor is cheap?

Y’all know what I would do — sell and rent. I’m not attached to anything — a home, comfy though it may be, is simply a home — four walls and a roof, nothing more.

Invest the net proceeds and let them grow for a nice retirement.
Links in. Whether true or not remains to be seen. If true, it will sure make things very interesting!

The Big One (not financial).

As said earlier, the quicker the Yen rises, the US$ goes in the opposite direction at the same speed.

#136 Evangeline on 10.11.10 at 8:48 pm — “ok so you can’t back up your statement with direct links … didn’t think you’d be able to”

Actually, there are plenty. See if these assist you, or try searching it for yourself. One focuses on all the European capitals.


#33 Chaos on 10.12.10 at 12:29 am

You know, a person aims for compassion and hits disgust.

“I can get $510,000 for it”

Well go get your money zombie, it’s in a pot waiting for you at the end of the rainbow.

#34 Patz on 10.12.10 at 12:32 am

I think the ones that are going to hurt the most in the reverses to come are those, like Jason, who knew better and did it anyway.
Gonna be a whole lotta folks kickin’ they own ass!

#35 Jacen on 10.12.10 at 12:38 am

I don’t get it. Why are people so against renting? I have never owned, and I love it. Something breaks? Not my problem. Property taxes increased? Not my problem. Got a job in a new country/city?
Not a problem.
If you do your homework, you’ll see that the average rent in Calgary (at least) is less than 50% of the monthly house costs when you put 10% down. Don’t trust Orange guy’s ‘rent vs. own’ calculators either.

People get too emotional about their investments, which is why bubbles are created in the first place.

And to openeye; scared of the stock market? Unless your trading on margin, at least you’re not going to get mauled on leveraged money you don’t actually own. High Yield preferreds are still a decent bargain, and there are still some unconverted income trusts that have a bright future.

#36 VancouverGoinUP on 10.12.10 at 12:43 am

•Canadian real estate is where the USA market was in 2006.
***Some places Yes but Not Victoria. Every Canadian double income boomer with cash wants to move here

•Victoria could be the Phoenix of the north.
***Speaking of smoking stuff we don’t get that much sun. LOL good luck getting a 2 bedroom condo one day in the future here for 30k like in Phoenix

•There is no caravan of Boomers in golf shirts coming over the mountains from Mississauga.
***Actually there is

•You live in one of the most unaffordable cities anywhere.
****For who? Canadians?

•The economy is moribund.
****Best Economy in Canada period

•Your big new mortgage will renew at higher rates.
****I disagree. Any and I mean any politician that supports raising rates will be booted out of office

•Love liquidity, not a house.
***Love both, your home is like a dog It Loves You

•If you really need real estate, move to Duncan. (I hear they now have the Internet.)
****Duncan is cheap cheap cheap

•This will not end well.
****Golden riches await you at the border of BC

Get out of America now!!! Pension collapse coming. Do yourself a favour and glaze over the 30 second commercial to see whats really going on


#37 mel on 10.12.10 at 1:13 am

I think the guy gave you a lot of ” cheap crap”. First of all, his big capital gain on his house is just that, ” big talk”.

Secondly, a guy that knows what this blog is all about, may I remind him, ” overpriced houses that will POP!”. Is asking questions, including buying a bigger house and bigger mortgage. What the fellow should do? I tell you what, ” go and buy the biggest house that you can buy”. Hurry, don’t wait! Go and join the rest of the fools in this crazy world of housing insanity.

#38 dark sad person on 10.12.10 at 1:39 am

Canadian housing will not collapse, but it will decline. The loonie is considered a commodity currency and will rise against the US dollar for that reason, as well as the interest rate differential and the economic morass in America. There is no correlation between our currency and house prices. — Garth


Those two reasons are also a driver of negative Currency change “if”
Commodities drop in demand and price and-
if Currency/Bond traders start doubting the integrity of resources/industry output/trade balance/employment and taxpayers/debtors ability to service public and private debt obligations-and–
if there is a wicked downdraft in the world stock markets-i think the USD will kick the CAD’s ass big time-in a flight to safety competition–

I also doubt rates will go much higher-i suspect lower as house prices head south and borrowing/lending starts drying up–not that it will do any good-except for the banks to borrow at zero-but that’s how the fools think/wish-they can rejuvenate lending and spending–

#39 Bobby on 10.12.10 at 2:18 am

I live in Victoria and near where I live there are a lot of houses in the 600k to 950k range that aren’t moving.

Just because some realtor says your house is worth something, remember it is only worth what someone is willing to pay. And looking at these houses, they aren’t worth what their realtor says, even the new realtor in the case of the relisting.

It’s getting ugly out there.

#40 Mel on 10.12.10 at 5:01 am

A nice little analysis of the US foreclosure crisis. Scary stuff.


#41 luketheduke on 10.12.10 at 5:26 am

Garth,what’s will all the bear pictures?Is it a subliminal image so that all the people that disagree with you change their mind?

#42 Bill ( Peterborough) on 10.12.10 at 5:28 am

Re # 4 Jim Summers

I think the mistake is to move upmarket. Jason has half his mortgage paid off in only six years. He has already won the housing lottery; he has a mortgage he can afford. If he can make the small sacrifice of staying where he is; he can ignore whatever happens to Victoria housing prices.

And kiss away that capital gain? — Garth

I agree with you Jim.

It looks like Jason did not overpay for his home to begin with. Getting further into debt would be insane.

As far as selling and investing the money, I’m with
TheBigLebowski: I would only invest in a rope or guilotine manufacturer.

There is alot of unrest in the U.S. these days. People are starting to get angry / pissed off at what has happened.

Friends bought in Florida and Arizona about 6 months back. They are not feeling that nieghbourly love anymore.

Hard for alot of our nieghbours to the south to grasp the idea that they will never have the same lifestyles they had before.


Food for thought:

A while back a chinese friend of mine , who also has ties with our government ( in regards to economic
relations with China) ran a proposal by me.

Our Canadian government would lend me up to $1,000,000.00 to open a viable business in China on the condition that I would have to export the product back to Canada.

The Canadian government would also guarantee 90% of my loan to the bank, if i failed in my venture.

Makes you wonder ?

#43 David B on 10.12.10 at 5:46 am

It appears one bank TD is about to start a new mortgage game. Any thoughs people?


#44 Bill ( Peterborough) on 10.12.10 at 5:47 am

Re #136 Evangeline ( response to Nostradamus…)

((Sure. Just about anyone in Congress, Joe Biden (an admitted zionist) or anyone in DC can give you the heads up.))

ok so you can’t back up your statement with direct links … didn’t think you’d be able to

Maybe this will help you out, plus many more informative statements of this site;

The U.S . has been known to start wars with other countries when their economy was in the dumps, also to serve the hidden agendas of another country.


#45 Bill ( Peterborough) on 10.12.10 at 6:26 am

Rev# 92 Skip ( yesterday)

Nobody has a right to a house. Grow up. — Garth

They do if they work for it.

Unfortunatley our puppet governments have again served the best interests of big business / banking cabals, as well as themselves, instead of the people of the country.

Shame that owning a house will be a dream for alot of people, do to the fact that our governments sold us out.

Banks qualifying people who should have been qualified in the first place.

MLS/ most realtors for manipulating clients into bidding wars on overpriced properties, creating a delusional feedy frenzy further escalating the prices of real estate.

Good paying jobs going to 2’nd/3’rd world countries, more minimum wage jobs being created, taxes going through the roof, governments increasing their size…

Even when the market does correct most people will not be able to buy a home.

Again it should be your right to own an “Affordable Home”, if you work towards it.

Unfortunatley the spin doctors are telling you go with the flow, invest in one of the governments/ banks/ stockmarket ponzie schemes.

No different than a good con game. Find your mark ( joe public) , hang the carrot in front of him (easy money for overpriced home) leads to becoming a slave to debt the rest of your life.


Find your mark ( liquid joe public) convince him to invest in one of our ponzie schemes in the stockmarkets(hanging the carrot in front of them) then crash the market , wiping them out financially.

Think it is not possible. how do you think the depression was greated over here.

Boy the Rothchilds are pretty good at what they do.

Shelter is a right. A house is a privilege. A SFH is a luxury. — Garth

#46 Moneta on 10.12.10 at 7:06 am

Are you actually suggesting that Garth should have been psychic and known what was not known by the mainstream media?
If you truly understand what is going on in the US, you knew something like this or another black swam was in the cards.

We know they packaged MBSs into CDOs. We know they mark to make beleive and have barely written off anything. When you stretch the alstic too far it goes flying or it breaks.

There is risk out there and when Garth says you can make 7% risk free, you,ve got to understand what it menas. It’s only risk free if you truly understand what you are buying and know when to get the hell out of dodge.

Actually I did not, and would not, use the words “risk-free.” Everything has risk, including GICs and having kids. It’s all about mitigation of risk. — Garth

#47 Moneta on 10.12.10 at 7:15 am

“you got to live somewhere”.
Yup. And it’s GOT to be an 600K abode on a 80K income of course.

#48 McSteve on 10.12.10 at 7:34 am

That guy’s never been in the army. Maybe the Michigan militia…

#49 Got A Watch on 10.12.10 at 7:56 am

Reading the comments here it seems the Blawg Dawgs are pretty much on top of the ‘ForeclosureGate’ issue, and are way ahead of the MSM or most members of the public, who think from MSM reports this is just about the ‘robo-signers’ and won’t be much of a problem.

I’d say this and the spectre of European senor Bond haircuts are the 2 largest systemic risks right now to the global financial system.

Even Banks who had nothing to do with creating or selling the creative financial papers (aka pretty colored papers that look like they are actually sound) are at risk. Every major Bank has financial ties to many other Banks in the global financial system in a myriad of ways. If one part of the system fails, others won’t be able to just stand alone and shrug it off.

As was pointed out in the previous thread, most of the West’s largest Banks were directly involved at the outset, when the funny papers were printed, and continue to be directly involved. All large Banks have holdings that tie them to their fellow Banks, whether those be in Bond Funds, stocks, and any other “asset” you can name, like derivatives. All will face higher costs and less liquidity, may see trapped capital in “assets” that nobody wants to touch now, and will have less opportunity to be involved in any kind of banking activity that used to be routine and unquestioned.

This all points to lower profits for all, and big losses for some. Some Banks will fail and/or be bailed out by national Governments, think Ireland. Tighter credit, less appetite for risk (like that loan to a business that they would have made last year but won’t next) which will crimp global economic activity. All this notwithstanding the ‘currency wars’ and ‘trade wars’ and ‘capital controls’ and ‘sovereign default’ issues which are going to be ongoing at the same time.

A perfect storm for Banksters, even Canadian Banks. I doubt our Banks will be put out of business by this, but they will be affected in our brave new inter-connected world of today. Blame the internet.

The Blogs are always way out ahead of the MSM, both in reporting the latest related news, and covering the implications of the news.

For those who are wondering what all the fuss is about, here are some links to the leading edge of the Blogosphere:

4closureFraud Blog dedicated coverage for about a year now.

Just the Tip of the Iceberg by Reggie Middleton, forensic balance sheet analyst par excellence – he details the $ cost for individual Banks – it spells “systemic risk”.

“Now that the Robo-Signing scandals have achieved full notoriety through the media, it is time to address the real issues facing investors in bank stocks. I also believe that the media is staring at the wrong target. Each major media outlet is copying what is popular or what the next outlet broke as a story versus where the true economic risks actually lie…The Japanese tried to hide massive NPAs in its banking system after a credit fueled bubble burst by sweeping them under a rug for political reasons. Here’s a newsflash – it didn’t work, it hasn’t worked for 20 years, and despite that Japan is embarking on QE v3.3 because it simply doesn’t believe that it is not working. Here are the steps the US is consciously taking it its bid to enter a 20 year deflationary spiral like Japan…”

Naked Capitalism one of my top favorite economics Blogs, Yves Smith has been all over Bank misdeeds for years, many posts like today’s excellent “Lender Processing Services Has a Very Bad Day: Federal Bankruptcy Trustee Joins Litigation Against LPS on Behalf of All Chapter 13 Trustees in the US”

Market Ticker Blog where Karl has been on top of this for 3 years now, he predicted the MBS market would blow up based on fraud, and guess what, he was entirely correct: see today’s “The MERS edifice wavers”, and many, many past posts.

Cut through the MSM fog, to the bottom line, which is showing a big loss going forward.

#50 Moneta on 10.12.10 at 8:17 am

Actually I did not, and would not, use the words “risk-free.” Everything has risk, including GICs and having kids. It’s all about mitigation of risk. — Garth
Come on Garth. Don’t change your tune. This is from you own home page:

•Investing in stocks, bonds with zero risk. Tax shelters that are too good to last.

Maybe you don’t realize how much you downplay your use of little risk.

Wrong. You cherry-picked that statement from a promo for my current book regarding a section dealing with an insurance product called segregated funds. Bad girl. — Garth

#51 Bill ( Peterborough) on 10.12.10 at 8:27 am

Shelter is a right. A house is a privilege. A SFH is a luxury. — Garth


Dam shame Garth. It was not always so, for the people who worked , saved towards getting a home, and raising a family, enjoying life.

That will be a dream for alot of hard working people; through the fault of our inept/ greedy individualistic politicians who sold us out, to the So-called Elite.

#52 China Housing Bubble on 10.12.10 at 8:36 am

I guess they won’t be running off to buy all that Vancouver real estate with their own bubble in hand. The realtors will have to look for another reason why Vancouver is “different”.


China’s Housing Bubble May Pop In The Next 6-12 Months-S&P
By: Nathaniel Crawford Monday, October 11, 2010 7:54 PM

#53 BrianT on 10.12.10 at 8:46 am

Denninger has a good summary of the US today http://market-ticker.org/

#54 drdolittle on 10.12.10 at 8:58 am

Ever consider coming to the states Garth? Business travel could put you speaking in Florida this January when all of Canada is covered in snow with only more snow for the next three months.
PS any thoughts on US gov going the way of Argentina and sharing everyone’s 401k’s “fairly” ie confiscation?

#55 Tom from Mississauga on 10.12.10 at 8:59 am

Hi Garth
First time I disagree with yah. If inventory is already 11 months the property is not realistically going to move any time soon. Same as million $ house off Lakeshore through Oakville, Burlington (you should drive down it, holy for sale signs). Better bet is to go get 100,000 HELOC drop 20,000 into TFSA and wipe out income tax with RRSP, start a RESP for the kids, next year repeat, at less than 3%. Right? I mean, do what you can actually do. It’s getting to that time.

#56 brunt on 10.12.10 at 9:00 am


Renting gets a bad rap. Sure there are dumpy rentals, but then again there are dumpy owned houses too.

We are renting now. Actually, we are renting in two places, but that’s another story altogether. Both places are great, far, FAR cheaper than owning. Nice places in good neighbourhoods. Take the time to look around. That is, after you list your house.

As to whether or not to sell something, there is a simple question that I ask myself. “Self”, says me, “would you buy that exact item at today’s prices?”. If “yes”, then it is a clear hold. If “maybe”, then you have to think some more. If “no way in heck”, then why do you still own it?

So ask yourself that – would you buy your own house at today’s price? I think not only would you not, but you would be shaking your head at anyone who would consider the possibility.

Another point, as Garth has mentioned several times, you have to worry about not having all your eggs in one basket.

Let’s just say that your house is realistically worth $500K for a minute. You state that you have a mortgage balance of $140K. Let’s assume that you have some savings, and we’ll assume that you are a good little squirrel and have $100K set aside.

Now your net worth is $460K (equal to $100K + $500K – $140K). And you have$500K in a house.

That means that you have 109% of your net worth ($500K / $460K * 100%) in a single asset. This alone is reason enough to consider rebalancing your portfolio – that is, selling your house and either buying a cheaper one or renting and investing the rest. But it’s also an asset that if the US is any indication is likely to depreciate significantly in the next few years.

So the above assumes that you have also saved up $100K. If you haven’t, then it’s even worse.

And if you trade up houses, it will be worse still.

Leverage (borrowing money to invest) works great on the way up. It will kill you financially on the way down. And, contrary to what “they” say, real estate can and does go down. You can pretty well bank on it.

#57 Cats and Hogs on 10.12.10 at 9:39 am

Anyone know where the lecture on October 14th in Kelowna will be taking place? TIA

#58 Evangeline on 10.12.10 at 9:40 am


I just checked your first link to “Jewish Week” and read that “Israeli Finance Minister Yuval Steinitz called Monday for a naval blockade of Iran within two to six months, saying sanctions have failed to convince the Islamic republic to abandon its nuclear weapons program. ” Later in the article, was a call for a timetable and deadlines.

If you think that the above is as you stated a “neocon” calling for Iran to be “nuked” I pity you. Overheated and exaggerated rhetoric on your part might add a lot of noise to the situation in the middle east, but it doesn’t add any signal.

#59 Derek on 10.12.10 at 10:03 am

@48 McSteve

That guy’s never been in the army. Maybe the Michigan militia…

Army? Nah. Barmy. You just can’t see the B.

#60 Dumfukanuk on 10.12.10 at 10:15 am

Okay, folks, we need to clarify some things here. In the U.S., when a home closes (mortgage or no mortgage), it is ALWAYS prudent to obtain title insurance and a CLEAR TITLE before closing. If you are indeed planning on receiving a mortgage on a property you wish you buy, no bank no where will provide you that loan without Title Insurance AND a CLEAR TITLE.

“Title Insurance in the U.S. is indemnity insurance against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage liens. Title insurance is principally a product developed and sold in the United States as a result of the comparative deficiency of the US land records laws. It is meant to protect an owner’s or a lender’s financial interest in real property against loss due to title defects, liens or other matters. It will defend against a lawsuit attacking the title as it is insured, or reimburse the insured for the actual monetary loss incurred, up to the dollar amount of insurance provided by the policy.

The owner’s policy assures a purchaser that the title to the property is vested in that purchaser and that it is free from all defects, liens and encumbrances except those which are listed as exceptions in the policy or are excluded from the scope of the policy’s coverage. It also covers losses and damages suffered if the title is unmarketable[6] The policy also provides coverage for loss if there is no right of access to the land. Although these are the basic coverages, expanded forms of residential owner’s policies exist that cover additional items of loss.[7]
The liability limit of the owner’s policy is typically the purchase price paid for the property. As with other types of insurance, coverages can also be added or deleted with an endorsement. There are many forms of standard endorsements to cover a variety of common issues. The premium for the policy may be paid by the seller or buyer as the parties agree; usually there is a custom in a particular state or county on this matter which is reflected in most local real estate contracts. Consumers should inquire about the cost of title insurance before signing a real estate contract which provide that they pay for title charges. A real estate attorney, broker, escrow officer (in the western states), or loan officer can provide detailed information to the consumer as to the price of title search and insurance before the real estate contract is signed. Title insurance coverage lasts as long as the insured retains an interest in the land insured and typically no additional premium is paid after the policy is issued.”

#61 Basil Fawlty on 10.12.10 at 10:25 am

In thinking about the current mortgage backed securities crisis in the US and the credit default swaps that provided insurance for these sub-prime backed “investments”, I am reminded of what my old man often said. “You can’t make candy of out of horseshit”
Like Garth says. “This will not end well”.

#62 Dumfukanuk on 10.12.10 at 10:32 am

AT #43: DavidB, HOLY sh*tballs! TD is actually coming out with a plan to allow people to tap into their equity at 125%?!?!??! That is insanity – PURE INSANITY. I can say this about the banks in the U.S. is they may be dumb, sure, but they wouldn’t EVER have done something as stupid as this, especially knowing the market is actually retracting in Canada. In the U.S., sure the banks were giving away home equity lines of credit at about 125% of a home’s value, but that was ONLY when times were good. This was a primary contributing factor to Americans overextending themselves in the U.S., which became more problematic to pay back the 1st mortgage and the HELOC.

TD clearly understands the market is on the downturn now, and NOW they are coming out with these kinds of “standards?!?!” That is, quite simply, the dumbest thing I’ve EVER hear or read in my life. Yeah, we’re f*cking different for sure.

#63 David B on 10.12.10 at 10:50 am

All appears well in the Asian money front so sayeth the US …. and Wall Street has an even bigger pay day on the salary and benifit front. What’s up? who knows, could there just be so much money out there that their is just simply hard places to stash it. Those that have the know it all to park it in good green healthy fields get the big coin in return. It seems like yesterday being a good citizen was getting engineering degree and saving the world, to-day those BA and MBA boys and girls with really good smarts are getting the serious coin.

Talking with a builder this morning at Tims ….housing starts are slow …. real slow and there are signs of in fighting in the Real Estate world, something to do with good ode RE agents not happy with part timers getting a brake on service fees.

#64 JeffinPickering on 10.12.10 at 11:08 am

Jason is in a bit of pickle.
On the one hand, he paid off 1/2 his mortgage in 6 years….not sure how he did that on a family income of $80K and 2 kids. With help?
If he can pay the balance remaining in a similar fashion, he has some hope of maybe being able to then save and grow enough to live past 65.

On the other hand, as has been said, he will never ever again have this once in a lifetime shot at a capital gain that large. That money can do some serious leg work for him in the 6 years he would otherwise be paying his mortgage off.

So, really like where you are? or stomach a few years of renting for the sake of your golden years?

#65 freedom_2008 on 10.12.10 at 11:35 am

Hi Jason,

We brought a 1000ft house in victoria Mt. Tolmie area (near Uvic) in 2004, paid $315k, replaced the roof and sold last Oct at the height of the bidding war (total 6 offers) for $480k. The new owner moved in and spent another $30k finished the basement with 2 bedroom suite.

There is now a house a bit bigger (2000ft including finished basement suite) on next street for sale, had 3 price drop already in 6 weeks, standing at $560K, no taker.

What I am trying to say is, what make your thinking that your $280K house can fetch $510K in this market now, repair? reno? addition?

If you like, put it up on-line for a test (we sold ours that way, on usedvictoria and craiglists) to see if you get much interest.

If, regardless how much your house can get now, you still really “need” a bigger house and/or in town, no-brainer, sell now and rent and buy later, as Garth suggested, minus the 7% part if you want to buy in next year or two.

But I would agree with other locals, unless you have business or family nearby, we wouldn’t live in duncan even it is free. Money cannot buy everything, happiness is one of the few, hey boy.

#66 Bill ( Peterborough) is a FRAUD on 10.12.10 at 12:37 pm

A woman’s work is never done

– don’t you have a famil…oh wait..,even if you did they’re not talking to you for the pure evil of squandering a glorious fall long weekend ranting

Poor Poor delusional old billy willy – too much mercury in those bass??

One of your hallowed authors is Texe Marrs and this is his story in case you missed it on the last go round:

Meanwhile…in a rat infested flea trap we find an intrepid author laboriously slugging away with his wife…Wow! a book deal!! and an advance…they can finally buy a house!…How to name your pet isn’t a smash…nor is a guide to a career in the armed forces…the young authors have skill at sales AND writing and publishers notice…a series of books follow with decent income but this is Texas and we all know decent ain’t big enough for Texas…the young and ambitious couple are tired of toil and see things happening around them like…L Ron… Jim and Tammy Faye…Jimmy Swaggart…all are lighting up the popularity and money charts…all with things that just aren’t honest…then they are seduced…FF>> to 1987…Dark Secrets of The New Age…CACHING!!!!…more books follow and ring the till…the author notices the MSMverse…enter Alex Jones…enter the internet…enter sales bonanza…enter the icing on the cake Andrew Hitchcock (his publisher is Texe Marrs)…

You’re like someone who’s last in the pyramid scheme and is in such denial…

Bill you’ve been had, sold and taken buy another… the people you read have taken your money and it’s time to fess up…

By the way, I’m ME no one else – you’re just a sad DSP fingerpuppet and your opinion is suspect.

#67 Ghost of Tom Joad on 10.12.10 at 12:56 pm

Have software contractor friend who did work in Victoria for BC gov’t. After economic downturn, all contractors were laid off. That was a year or so ago and since then none have been re-hired.

Fortunately for him, he recently landed a contract in Saskatchewan.

You have to go where the jobs are. Hard to do if you owe 1/2 million on mortgage in Vancouver or Victoria and no greater fools are willing to buy your house.

#68 Ottawa S. on 10.12.10 at 12:59 pm

“Love liquidity, not a house.”

“Love liquidity, not a house.”

“Love liquidity, not a house.”

“Love liquidity, not a house.”

I need to pound that into my brain while I continue going to house viewings. Darn emotions.

#69 Patz on 10.12.10 at 1:01 pm

Another blog hound here posted this link a little while ago, sorry I forget who.

It’s a quote from a Phoenix RE broker giving 21 reasons to “bank on the Phoenix real estate market.”

“There is no downturn in the Phoenix market. There has been a return to pre-boom activity levels. Assuredly this return was caused by sticker-shock, but that is hardly a permanent affliction. The Phoenix area will continue to grow rapidly for another 35 years.”


He wrote this on July 21st, 2006. The market had turned. In fact it was about where Vancouver and Victoria are now. Interestingly the first comment in response to his post was both skeptical and rational.

But that’s not the end of the story. Our boy in Phoenix is nothing if not eternally optimistic. Now he’s pumping *low–priced* real estate as a great investment for making rental income.

Current quote:
“I’ve been talking about low-priced condos lately, but don’t get the idea that single-family homes are selling for a king’s ransom. Just the opposite is true. If you’re willing to drive to some of the near-in suburbs, you can pick up a newer single-family home for less than $100,000.”
Have a look at some of these homes too. Definitely not crack shacks. http://www.bloodhoundrealty.com/

But of course like the Phoenix broker, reason will not prevail among greater fools, denial will.

#70 Agio on 10.12.10 at 1:37 pm

# 29 Hiya cancukfilly, Edmontonian here. I’ve read this blog since its inception yet never commented due to its anti-western hate filled speak. I’ve even bought on of Mr. Turners books (massively discounted at Chapters n worth every penny given the huge discount)
Okay, all kidding aside (except the book discount), from what I can see people in Alberta across the board have for so long been deprived of high house prices that they’ve all went nuts, particularly in Edmonton where prices literally exploded in early 2007 creating a false shortage given the massive influx of people into the province. This false shortage lasted about 6 months until a minority of Edmontonians woke up and realized there was a shortage of SFD’s and promptly listed them so they could do what all Edmontonians aspire to-move to Kelowna.
For a brief time, approximately 6-8 months these SFD’s sold hard and fast with prices escalating accordingly. Many being bought and flipped quickly by people that actually knew how to buy and flip which they did to those who were desperate and to those who had watched ‘Flip this House’ on HGTV and figured they too could cash in which further escalated prices.
Then, the rest of Edmonton woke up and promptly flooded the market with their homes because their friends sung about how much they had made and how lovely Kelowna was year round. Keep in mind that also at this time oil and gas were going gangbusters with oil certainly headed to $300 a barrel and everyone was a millionaire with their cheap HELOC’s maxed and their swelling portfolios of stocks and futures n such which of course would only continue going up so no need to sell and take any profit. Adding was fun, paper profits look so cool on paper and of course given that the upside on houses was limitless, debt was covered by the house itself so they piled on more and life was good and there were no downsides.
Around mid 2008 while the frenzy was still on-albeit less frenzied in Edmonton proper, people were forcing themselves to buy in the outlying regions which of course jacked those prices up. That houses in Edmonton were not selling as quickly given they were ridiculously overpriced and many were ghost listings was of no concern. People had to buy before all houses went to a million plus. Even in Beaumont and Morinville.
Now along came the ‘minor market correction’ of late 2008, oil dropped like a stone and all those paper millionaires got a spankin but many still had decent jobs and their marvelously valuable house or three, maxed to the nuts but the rates on em were low. Throughout 2009 houses did start trending downwards and have as has been mentioned here continue to do so and jobs weren’t as plentiful nor, as many from other provinces had realized, not all jobs in Alberta paid 100k a year. It’s called a boom and a bust.
Today people in Alberta are in denial and though it is often fun to think of people in Van or the GTA as delusional, they have nothing on most Albertans. Keep in mind house prices in and around Edmonton sucked for many many years compared to Ontario ,most of British Columbia , even Calgary and we aren’t about to let reality interfere with our fabulously valuable ‘real estate investments’ which is what we call our homes now. People are for the most part a sprained ankle away from goin broke and it seems to me that no place in Alberta will be immune from the housing correction which is happening now regardless what people like to think. Albertans view it as a phase much like smoking pot or something and feel we are immune because we have the oil sands and lots of natural gas all the time remaining blissfully ignorant to the fact that simply because resources may go up it doesn’t mean everything else will except the cost of living here.
We Albertans have acted in this play before canuckfilly and we screwed the pooch then, vowing it to never happen again yet we’ve managed to screw it again only this time much harder and much deeper.
The average Albertan is awash in debt, the province is in deficit, we have enormous infrastructure challenges and as our dollar continues to soar our non-renewable resources are not what they were and all of that is going to hurt Albertans a great deal in the next few years. Other than that things are good.

#71 TheBigLebowski on 10.12.10 at 1:50 pm

#3 Sherri-Do what Garth was recommending a little while back.

Sell Canada and BUY the USA.

Yes I was screaming at the time that this was like going from tickling a sleeping lion to grabbing his jewels with a pair of vice grips. Don’t forget that a person now has to pass through multiple naked body scanners, random strip searches if you have a tan, and general harassment, just to get to your property down south. And this is only the beginning of the patriot act slave nation being created. No thanks, I’d rather pay 30k for a place in Belize and live where you will be left alone without army road blocks and boarder patrol check points 400 miles from the Mexican border. Don’t forget mandatory vaccines are on the way in the U.S with the new health bill because the government cares so much about you . Its not a place I would dare want to live 10 years from now . But most people now adays worship authority and love to do as they are told without ever asking questions, so maybe the U.S would be a good fit you take advice on this blog as gospel even when 50% of the time its wrong.

#72 Debtfree on 10.12.10 at 2:27 pm

For the first time since the inception of the U.N. canada has not won a seat on the security council and harpo and gang are blaming iggy that neocon spin is the funniest thing I’ve heard in years . The uae has also booted us out and refused landing or air space use to elmer’s kid. They will most likely try to blame the bloc ,ndp ,libs or maybe the greens for that one . This gov. fed and prov. (B.C.) is morally bankrupt ie .. I recently bought school supplies for some of my grandkids When I did I had to pay HST (harpo’s stupid tax) . These guy’s that would tax school supplies are the kind of idiots that would eat their own seed grain. Looks good on you harpo no seat for you. Maybe next time the seat comes around we’ll have a leader instead of a follower . Our cons are looking more like tea party north.

#73 Bill ( Peterborough) on 10.12.10 at 2:35 pm

Re #66 clown who cannot come up with their own monicker.

By the way, I’m ME no one else – you’re just a sad DSP fingerpuppet and your opinion is suspect.


I appreciate your idiotic ramble.

It could mean one of 3 things:

A) The facts which I am posting are hitting sore spots with certain groups of people.


B) You truly are retarded and are being coached by the other imbecile from London. ( in which case keep posting, someday you might post something intelligent)


C) You and JM in London are one and the same. In that case seek phsychiatrict help, it’s covered under OHIP.

All the best.


#74 Prof ANON on 10.12.10 at 2:36 pm

@ #51 Bill (Peterborough)

Shelter is a right. A house is a privilege. A SFH is a luxury. — Garth


Dam shame Garth. It was not always so, for the people who worked , saved towards getting a home, and raising a family, enjoying life….Bill


I disagree Bill. Throughout history only a small minority of people who worked and saved were able to become property owners and “enjoy life” while raising a family. There may have been a decade or so scattered within various pieces of western history where there was a homogenized middle class living the life you describe, but it was (is) by no means the norm. For the most part, “it was better back when” is a mythology.

#75 VICTORIA TEA PARTY on 10.12.10 at 2:43 pm


Garth’s view of Victoria’s real estate ennui is right on; amusing, but right!

Usually at the start of each month, when the latest real estate stats are published, we get the usual annoying media blather from industry “reps” about how “very special” this region is for people wanting in on the local West Coast “lifestyle” (with the proviso that they don’t mind paying way too much for way. BTW the “lifestyle” nonsense is another giant costly ripoff!).

Didn’t hear so much of that smarminess this month, though; instead another old canard was trotted out: Victoria is STILL a destination for baby boomers looking for real estate opportunities!

We can’t claim the Chinese as customers, a Vancouver coup apparently, so it’s whatever boomers are on the last boat to Swartz Bay that’ll be targets of the RE creatures!


–To potential buyers, be retired, married and each of you have rated-to-inflation public sector pensions and a good $800-Gs clear and free, and no debts.

Then rent a pad for six months and, when you find the place of your dreams, become relentless vultures. Your real estate agent is a dope and won’t care. But the vendor will feel screwed ten ways to Sunday! You’ll find lots of “product” and angst. Park your conscience on the beach. You won’t need it. Besides it may wash out on the next ebb tide!

Once you’ve moved in you’ll probably find breaking into this society difficult because a lot of the locals will look at you askance and hope you either clear outta Dodge right now or, being the most recent arrival, “please pull up the drawbridge.”

If you ever are accepted, a timely topic of discussion will be real estate, natch, and how “my house is better than your house…” This could get hurtful. So be prepared to shell out for more renos!

–On the other side of the coin, if you are a wage slave, moving here requires great caution.

There are various levels of wage slavery in this town. The public sector pays fairly well but, after all paycheque deductions, you will be left gasping when it comes time to pay principle/interest/taxes. And taxes are about to rocket straight up starting next year and for interminable years after that.

The other wage slave category encompasses those poor souls who come here for any old private sector job, exclusive of the “professions”, and I mean ALL of them!

Most people will experience low pay, long hours, no job security and little chance of buying RE. Instead you’ll be gouged, to some degree, by landlords. Read the fine print!

So, if you live somewhere in Canada’s vast interior, visit and stay a while, but let reality sink in while you’re here so that you don’t get burnt. Because you will if you don’t take care of your issues first.

I’ll be watching with interest the local response to your presentation, Garth. Have a good show.

#76 Bill ( Peterborough) is a FRAUD on 10.12.10 at 2:57 pm

#73 Bill ( Peterborough) on 10.12.10 at 2:35 pm

You’re the one offside here.

All I do is call fowl at the anti-semmite message you spread cloaked in “fact”.

and now the truth is out the imbicel resorts to calling me someone I’m not…


#77 Bill ( Peterborough) on 10.12.10 at 3:08 pm

#74 Prof ANON

I disagree Bill. Throughout history only a small minority of people who worked and saved were able to become property owners and “enjoy life” while raising a family. There may have been a decade or so scattered within various pieces of western history where there was a homogenized middle class living the life you describe, but it was (is) by no means the norm. For the most part, “it was better back when” is a mythology.


Interesting. My father raised a family of 4 kids on a railroader’s salary. His father came to this country as an immigrant, shoe cobbler by trade. He raised 4 kids as well, each giving them $5,000.00 when they got married in the late 1950’s, early 1960’s.( my grandmother cleaned homes)

All the kids I knew when growing up had parents who owned homes…

We are taking North America here.

Back then people were not taxed to death, there was less government, and your dollar went alot further allowing you to actually reap what you sowed.

There was still alot of opportunity back then to acquire a home, raise a family and enjoy life. And the average person who worked, put away their money, all on a decent middle class paycheck, could achieve this.

Most of the immigrants who came to this country after WWII seen opportunities here than perhaps they could not have from their original country of birth.

On the other hand I have seen people who have been here for many generations and have nothing, frowning upon immigrants, calling them DPs ( displaced immigrants), blaming them for their own problems.

#78 TheBigLebowski on 10.12.10 at 3:17 pm

#76 Bill ( Peterborough) is a FRAUD

I am in contact with the public education system on a daily basis. Over the past few years the curriculum has begun to really push family planning. According to U.N documents and their main mandate of population control, this comes as no surprise to me. But now that I have encountered you on this blog, I am beginning to think family planning is being pushed because of twits like you populating the world. Bill(P) has always been on point, I can vouch for that. Please don’t help justify the family planning agenda with your meaningless attacks.

#79 Bill ( Peterborough) on 10.12.10 at 3:20 pm

Re # 76 clown you can’t think of their own monicker.

All I do is call fowl at the anti-semmite message you spread cloaked in “fact”.


Try reading the following link, DELETED

This has gone far enough. I’m shutting it down. — Garth

#80 pbrasseur on 10.12.10 at 3:20 pm

There is no correlation between our currency and house prices. — Garth

Humm… I wouldn’t be so sure about that.

First since housing apparently makes up for about 20% of our economy a housing recession could hurt badly. Investment would go down, including foreign investment which supports our currency. This would also seriously affect income for all levels of government which would make overall debt problem more apparent (righ now to the world we appear in good shape and reassuring), that also would not help foreign investment.

Second the Bank of Canada has laready exchanged a vast amount of its reserves in treasury bonds against mortgages (insured by CMHC). If these assets were to decline sharply it would affect directly the reserves that back our currency. There are no free lunches, I just can’t believe that the BoC can do something like that without consequences.

Third, the real estate bubble itself is a product of inflationnary monetary policies, the BoC prints money to feed easy credit and the real estate boom. Inflationnary policies lead to … inflation and that is probably what we will get, in other words by printing so much money and creating so much debt our policy makers have diluted the value of our currency, sooner or later the market will acknowledge that.

There is a link between RE and the value of our currency. Commodity speculators may help hide that fact for a while, but I wouldn’t hold my breath!

#81 Nostradamus Le Mad Vlad on 10.12.10 at 3:21 pm

#44 Bill (Peterborough) — Thanks for the backup links, Bill. Very interesting. Good talking with you this a.m. If the odds remain good, then next year at your place in Oct. for a couple of weeks?

The one thing that may change all that is in the next six months, all the US biz. / mortgage people have been told to shape up and be prepared by the onslaught of foreclosures and small- to medium banking collapses in the US. Commercial RE is getting walloped too, which will continue to increase to a rising crescendo for the grand finale.

The overall effect may have a downer on the Cdn. economy, as we are closely tied to the US. But until it starts playing out, the trip is still ON!

#54 drdolittle — “. . . US gov going the way of Argentina and sharing everyone’s 401k’s “fairly” ie confiscation?”

Typical Obama, Karl Marx and others’ move. Without telling anyone (as Clinton did with the Social Security system, by transferring all of it to pay the deficit off), Obama is doing the same with private pensions.

Trade their 401K’s for T-Bills, let the economy die off completely and then the once-proud US becomes a welfare state, building a huge military with no one to run it.

#58 Evangeline — It is your freedom of choice to choose to ignore the reality of life, to refuse to look beyond your eyelids and to not see the forest for the trees.

I am not a shrink, psychologist or psychoanalyst, so I cannot help you. Life will teach you otherwise, as life is the greatest teacher.

For a more detailed outlook, check out #44 Bill (Peterborough’s) 11-min. clip. That may shed a little more light.

#82 Evangeline on 10.12.10 at 3:22 pm

((These guy’s that would tax school supplies are the kind of idiots that would eat their own seed grain.))

seeing as the TEA (Taxed Enough Already) Parties are all about smaller government and less tax, your rant sliming them seems a bit misguided.

#83 Bill ( Peterborough) on 10.12.10 at 3:42 pm

Re # 76 clown who can’t think of her own monicker

Another great author: GARY ALLEN

None Dare Call It Conspiracy, Gary Allen states,

“One major reason for the historical blackout on the role of the international bankers in political history is the Rothschilds were Jewish… DELETED

Enough of this crap. — Garth

#84 Bill ( Peterborough) is a FRAUD on 10.12.10 at 3:52 pm

#78 TheBigLebowski on 10.12.10 at 3:17 pm

Being “on point” of a fraudulent argument = Fraud 8)

and can you imagine the doomers accusing me of non-original thought on name choice 8)

#85 Bill ( Peterborough) on 10.12.10 at 3:54 pm

This has gone far enough. I’m shutting it down. — Garth


Garth, not trying to provoke anybody here, But at the same token won’t let some clown call me an anti-semite, without a rebutal.

#86 Amanda Byrne Jungen on 10.12.10 at 3:56 pm

Wow! I may just be fanning the fire posting a comment, but I want to thank Garth for his advice. I’m the wife of “Jason”. His advice, direct and quite humorous, has given us some food for thought.
To clarify, we are not trying to get “bragging rights” about a big or fancy house or comparing it to any neighbours. We are not interested in a large or showy house. Our interest in moving is to find a larger lot on which to grow more of our own food and a more rural space for our children to grow up. Given Garth’s advice we are considering renting in the area and waiting things out. We won’t be moving to Duncan, as Jason’s job is here and believe it or not is quite secure (and no he doesn’t work for the government). Our families are also here and having our children grow up near them is important to us.
Thanks Garth for helping me to see other options.

#87 Debtfree on 10.12.10 at 4:06 pm

@#82 the tea bag analogy of the neocons imho is valid as they are one sided and bigoted ie not supporting and signing of the U.N declaration on aboriginal rights( shameful) . As for tea baggers north they want the religious rights votes but don’t think for a second that they will stop taxing the crap out of us . They just need to find people as dumb or dumber than them so they can get a majority . They will say or say they will do anything to get that majority .

#88 Sherri on 10.12.10 at 4:11 pm

Look Garth,

More moronic comments on CNBC today r.e. Buy US RE.


#89 Alan on 10.12.10 at 4:24 pm

My prediction for this time next year:

Real estate prices in most desirable Canadian cities will be the same or slightly lower but not significantly lower than today.

Garth’s new Gold blog and book will be: Fools Gold, how to avoid the next great bubble.

Care to wager? — Garth

#90 Herbie on 10.12.10 at 4:27 pm


They are plotting for a small crowd at Mt. Royal College in Calgary. Email and voice mail for tickets have so far failed to garner tickets…or even a response for that matter….any other phone numbers to try??

I spoke with the organizers today, who were overwhelmed with the response and believe the event is full. I hope to have confirmation within a few hours. I am sure they will respond to you shortly. — Garth

#91 jess on 10.12.10 at 4:32 pm

Hacking the votes

Startling testimony offered by the U. of Michigan computer science professor whose team penetrated D.C.’s ‘pilot program’ server for what was to have been a live election beginning in just days…Startling testimony offered by the U. of Michigan computer science professor whose team penetrated D.C.’s ‘pilot program’ server for what was to have been a live election beginning in just days…
New report: British high street banks have accepted millions of pounds in deposits from corrupt Nigerian politicians, raising serious questions about their commitment to tackling financial crime. Based on court documents, this report shows how Barclays, NatWest, RBS, HSBC and UBS all facilitated Nigerian corruption

Global Witness welcomes the United Kingdom’s recent announcement that Sudan will be a top priority for its presidency of the UN Security Council in November, and calls on it to make oil governance a theme of its presidency. There is no other single issue in Sudan which has such a large impact on whether the country’s future is war or peace.

A recent visit by a Sudanese trade delegation to London led to significant concerns among activists that business interests might be prioritized over human rights in the government’s diplomatic efforts in Sudan. “It is in the interests of all parties involved, including donors and investors, to ensure that an equitable oil deal is put in place before the referendum takes place,” said Wilkins. “Without it, genuine economic and political stability in Sudan will be impossible and a return to war all too inevitable.” In the 22 year civil war between north and south Sudan which lasted until 2005, two million people died and four in five southerners had to flee their homes.

#92 Vancouver_bear on 10.12.10 at 4:38 pm

Looks like the business for realturds is really in the toilet now. They never used yahoo mail before for advertising….now they do, they even help clueless kids – http://img85.imageshack.us/f/yahoomail.jpg/

#93 Victor on 10.12.10 at 5:19 pm

Garth, can you please explain what this means? I haven’t heard of this kind of mortgage product before.


#94 Evangeline on 10.12.10 at 6:03 pm

((#58 Evangeline — It is your freedom of choice to choose to ignore the reality of life, to refuse to look beyond your eyelids and to not see the forest for the trees.))

what a hoot … seems you’re doing a real good job of ignoring the vile rhetoric of Ahamadinejad meanwhile posting greatly exaggerated claims that “neocons” are threatening to “nuke Iran” — a claim you can’t back up with a single link to a prominent or influential “neocon” who has called for such an action.

#95 BrianT on 10.12.10 at 6:05 pm

A view of the future from the Globe and Mail http://www.theglobeandmail.com/news/national/a-radical-pessimists-guide-to-the-next-10-years/article1750609/page1/

#96 herbie on 10.12.10 at 6:13 pm

just connected with MRC – sounds like they are backlogged responding to ticket requests. I will be there..

#97 S.B. on 10.12.10 at 6:16 pm

Does Garth arrive at his events in a streched Hummer limo that bears licence plate BUY USA ? :P

I can see it now: the Hummer door opens and the press leap into position. Slowly, one cowboy booted foot slides out the door and touches the ground. Flashbulbs erupt: “That’s one small step for Garth, one giant leap for homeowners” trumpet next-day headlines.

Whisked inside past thousands of screaming Garth fans, he grabs the mic and belts out the first chorus that everybody is waiting to hear: “Heloooo Toronto. Your real estate is overpriced and is going down down down. We’re goin’ down down down down.”
The Boss would be proud.

By now the crowd is on its feet, begging for more. Flickers of light are seen all over as people inhale…deeply and snap pictures with their I-phones (the light is from the phones, what were you thinking?).

Some days this blog scares the crap out of me. — Garth

#98 dark sad person on 10.12.10 at 6:22 pm

Flaherty Says Canada to Erase Budget Deficit by 2015

Oct. 12 (Bloomberg) — Canadian Finance Minister Jim Flaherty today said the country will become the first in the Group of Seven to balance its budget by 2015, even as the government made more cautious revenue projections and accounted for new stimulus measures it announced last month.

In an update today of his March 4 fiscal plan, Flaherty projected a surplus in the fiscal year that begins April 1, 2015. The projection includes the cost of additional stimulus measures and a dimming outlook for growth that raises the cumulative deficit through 2014-15 to C$165.2 billion ($163.4 billion), C$6.8 billion more than earlier forecast.

The budget update didn’t contain any new spending or tax measures. The governing Conservatives are relying on higher employment insurance premiums, coupled with spending restraints on defense and operating expenses, to help the country lower its deficit.

The budget update increased the forecast for 2010 economic growth, which is based on the average forecasts from private economists, and reduced the outlook for 2011. Growth this year is projected to be 3 percent, up from the earlier 2.6 percent forecast, while 2011 growth was cut to 2.5 percent from 3.2 percent.

Flaherty on Sept. 30 scaled back plans to withdraw stimulus by limiting proposed increases to payroll taxes amid signs of a slowing recovery



Wow–we’ll be the first G7 to show “surpluses”

We’ll do it by “further stimulus” because of “scaled back” plans to end it–

We’ll also have “dimming growth”
Blames the US people for not spending enough–

Tax increases will be “limited”

We’ll charge higher UI premiums to the few people left working-but “scaled back” of course-

We’ll cut military expenditures-by fighting the war less expensively–

We’ll raise the trade growth projections going into elections-but cut them more later-

His last action plan “worked” but-only needs a bit more “time” for us slower ones-to realize how it actually did save-not only us-but the whole world-which must be why Portugal was able to steal our prestigious seat at the UNSC-

Who are these “private economists” he “listens” to-

#99 miketheengineer on 10.12.10 at 6:42 pm

Hey Nostradamus le mad dude:

I was checking the “Web Bot” web site, for updates on the Nov. 8 Tipping Point. Went to:


And you know what, it is now gone….no more web site. But it was there on Sunday….

Thought you might find that bit of info of use. Then again maybe not.

Sorry Garth, I know we are only to talk RE, but this could be an important indicator of future trends in Internet censorship.

#100 Dan in Victoria on 10.12.10 at 6:44 pm

Amanda @ 87
My place is close to what you describe, not rural but big lots.
About growing food.
Deer, and more deer. They mow down everthing that is green and tasty.
We have a large buck that scares the hell out of the wife some mornings.
They are not afraid of anything. We had one on the back porch years ago had to slap its butt to get it to move.
Your prize veggies will be gone just when they are ready.

#101 Bill ( Peterborough) on 10.12.10 at 6:54 pm

Some days this blog scares the crap out of me. — Garth


What will really scare the crap out of you is when the Elite will come after you for allowing us to try and show the rest what is really going on out there. Maybe dig up some skeletons , slander you and drag you through the courts eventually taking all your materialistic wealth.

You probably already have had a couple calls on some of the blogs content. After all you are in the MAIN STREAM.

I tend to stand firm on what I believe in, regardless of the consequence’s ,where some bend like the willow.

Time will tell Garth.

Any more anti-Semitic ravings and you are gone forever. — Garth

#102 Dan on 10.12.10 at 6:59 pm

S.B #97

Another sad realtor as sales in Toronto continue it’s crash. word is sales are down yet again for October. Realtors are going broke and many will need to find new work as the housing crash goes from bad to worse. Word from a friend tells me a few realtors are throwing in the towel as many have not sold anything for the past 6-12 months. Realtors are running scared and last months propaganda is proof.


Realtor……………….The month of September was great as sales in Toronto have dropped 23%…….Wait a second that not good. I’ll spin it anyway. Yes Sales are down 23% so things are picking up.

Realtor#2 …….Do you think those idiot greater fools bought it?

#103 Nostradamus Le Mad Vlad on 10.12.10 at 7:13 pm

For #54 drdolittle re: pensions — further evidence, and this.

One world currency again, this time from 420 banxsters.

Nostradamus Jr. was right — the US is taking the world down with it (at least the west).

Bond Crash preparation, and Higher cost of living.

Good news for bloggers, bad news for various govts. thruout the world.

Vaccines — Just say NO!

Why should the US be so concerned? Just one country helping another.

Pensions — Don’t count on the feds. or provinces for a nice retirement.

Repeat after me: GREED IS GOOD!

April Fools! Seriously, when wuz the last time we were hit by an hemmorhoid (sorry, asteroid)?

Sun Tzu’s long war theory is not a theory, but bang on.

Fraudulent Frauds Poison mortgages, etc.

Hmmm. “A mainstay of the global warming cult is that human caused global warming would lead to more severe hurricanes and other destructive storms. The actual trend has been fewer and fewer storms. The dire warnings of what would happen if we did not do as the climate cult told us to do have not materialized.” wrh.com.

Why the US is in Pakistan.

#104 NOBODY on 10.12.10 at 7:14 pm

Squidly77 has reached a new low. In his newest post today he calls his readers down:

“So listings go up, sales go down, and prices stay the same or slightly rise. Jackasses like you think, well, that must mean no crash”.

Isn’t the guy plain sad?

#105 Bill ( Peterborough) is a FRAUD on 10.12.10 at 7:15 pm

Well, Well, struck a nerve with the whole last issue which usually means…Truth struck a nerve and has set the wondering free…

K! Let’s try something different!


#106 BrianT on 10.12.10 at 7:17 pm

The Democrats in the US are pushing hard to seize private pension accounts (401Ks)-it doesn’t mean the same will happen to RRSPs but the likelihood obviously increases-should be factored into any financial planning IMO http://current.com/news/92720286_government-prepares-to-seize-private-pensions.htm

That ‘report’ is so ripe I can smell it from here. — Garth

#107 S.B. on 10.12.10 at 7:22 pm

I seem to remember reading Garth’s Toronto Sun columns when I was kid with a weekend paper route.
I read ’em all: Dunford, Max Haines, Blachford, Worthington.


It’s funny how things turn out – here we are reading his columns online almost 25 year later.

#108 Bill ( Peterborough) is a FRAUD on 10.12.10 at 7:56 pm


Sorry G-man!

Needed to balance the doomers…it’s where the message of that type of belief system leads that bugs but I get it…

#109 Duke on 10.12.10 at 7:57 pm

More pumping and less dumping. Or so they say over at the Toronto Star. Guess what, prices are up over the last year in the GTA. Time to throw a party!


#110 Timing is Everything on 10.12.10 at 8:11 pm

#100 Dan in Victoria

Deer fence – 6 feet high – Ever met my dog, “Buzz-saw”

No more deer problem.

#111 Bill ( Peterborough) on 10.12.10 at 8:34 pm

Any more anti-Semitic ravings and you are gone forever. — Garth

Do even know what that means. Try to really think about it for a minute.

Try to grow a backbone and stand erect for a change,
instead of cowaring everytime you get a phone call from the so called chosen ones.

Funny how you

DELETED. You’re history. — Garth

#112 Taxpayer like everyone else on 10.12.10 at 8:38 pm

62 Dumfuka – from the article:

“A homeowner can’t simply call the bank and access the
extra money they were approved for, however. The deal
is dependent on values rising, and in each instance the
bank said it would need to inspect the home.

‘Part of our credit approval includes an assessment of
the current value of the property – an appraisal of the
property – to ensure the existing value can support the
increased borrowing,” said spokesperson Kelly Hechler.’

#113 Investx on 10.12.10 at 8:44 pm

Shelter is a right. A house is a privilege. A SFH is a luxury. — Garth

Well said.

#114 BAD on 10.12.10 at 9:03 pm

More seniors spending golden years in bankruptcy

And that has happened with skyrocketing housing prices which presumably helped the seniors financially in their golden years. I wonder how those statistics are going to look like when housing prices are in decline.

Interesting times ahead, interesting indeed.

#115 Behavioral Finance on 10.12.10 at 9:47 pm


Anybody referencing to msnbc.com has very little credibility in my opinion from the start.

#116 Coho on 10.12.10 at 10:30 pm

Bill (Peterborough),

Your nemisis was baiting you…pushing your buttons and you let your emotions get the better of you. He wasn’t worth acknowledging.

I posted the other day about the labellers and name callers. His posts are juvenile and emotionless. There is no passion. He was just doing his “job” and ultimately hit a home by you being run off this blog.

There are many situations that have been set up to be complicated and without solution by design for the sole purpose to stir up emotions in people and cause conflict between them. And the orchestrators sit back and laugh. Don’t buy in. Try to keep your cool.. Your blogs read much better that way! :)

#117 Defrauded2 on 10.12.10 at 11:59 pm

Despite the international dimensions of fraud within the global economy, there is plenty of “local” fraud that has occurred here within Canada, and is likely occurring still. This is true especially in the financial services sector, closely connected with the mortgage and real-estate industries. Using “Big Name” talent as spokespersons, (e.g. athletes/celebrities) along with corporate and media talking heads who almost always hedge and “qualify” their remarks about the nature of the economic recovery, they promote untruths to the extreme.

Agencies like FISCO and OSC are toothless and ineffective at best, and perhaps complicit in protecting the status quo. These and other agencies like them, are the agencies that have monitored companies like “Millionaire Mortgage” and other similar real-estate and insurance-investment companies who have fleeced many seniors and others out of their lifelong savings. ( The principles flee/escape the sinking ship when discovered, and then restart under new names and the fraud continues )
The real-estate and financial services industry has worsened the state of the national economy because it has willfully failed it’s responsibly to ensure due diligence has been done in service of their consumer-clients and who pushed the uninformed into homes they could not afford, on the grounds that RE always appreciates. How many sales people have said “ They don’t make any more land….Better buy while you still can”. The baby boomers are just finding out now by just how much they have been mislead by, or should I say by how they have been “Defrauded”.

#118 Jacen on 10.13.10 at 12:08 am

Wow. People scare me on this blog. When I see the crap that most posters provide links to, I reminisce about the ‘good old days’ when journalism was a profession, not random thoughts trotted out as the truth, so that people here can post with a knowing wink that they and only they know ‘the truth’ (but you can too! check out this Youtube vid. It explains everything).

Give me a break. Everyone’s 100% correct after the fact, but nobody here was made millionaires from their incredible foresight (or billionaires; John Paulson?).

And those good old days? I’m only 30. At least when G&M or someone reported something, I could cast a critical eye on it and come to some sort of conclusion; now, every pundit and their dog can link any story to their pet cause like it’s god’s truth (gold, socialism, cooking squirrels, or their favourite Senfield ep).

Just because it’s on the net, doesn’t make it true. Entropy and emotion explains more in today’s world than backward looking empiricism or behind-the-scenes manipulation.

After today, I almost done reading comments. Get real people.

#119 warren on 10.13.10 at 6:32 am

Hi Garth . what timing Just had the subject toos removed yesterday from my town-home sale. this is leaving me with aprox 225000 dollars… now what do we do with the money while we wait??? I was going to buy a small home only increasing my mortgage 50000 but after reading the articals I think I just might be in the right place at the right time..I am one of the ill prepared boomers who turn 60 in a couple of years I work in health care and don’t expect a windfall pension. I have little in savings but no DEBT . Have a mastercard but paid off monthly balance . wife works part time.. Any thoughts.. We are game to rent . but what to do with the money???? Will watch for a reply ..found out about the web site from chatting to a guy I met yesterday while waiting conformation of the sale.. Timing timing .. Tks Warren

#120 Agio on 10.13.10 at 12:59 pm

#118 Jacen, couldn’t agree with you more on much you wrote. If I may suggest, do what I’ve been doing since this blogs inception. Read Garth Turners opinions (in their entirety) and do your own research and avoid the links in comments like the plague. This site is no different from any other. People selectively edit or parse a lot of what Turner says. It validates their own beliefs which they feel the need to further validate with bs from fred the wonder dummy’s blog on the innernets about the world ending in 2012 or provide a cornucopia of meaningless bullshit after the fact stats or pop off if they figure they’ve ‘caught’ him contradicting himself.
While I don’t agree with everything Turner writes I feel he makes some good common sense points-provided you read everything he writes. Besides he’s ornery and makes me laugh.
Go with God.