How not to get ahead

Other than being shot (luckily she had bad aim), getting elected to Parliament was as close as I’ve come to losing my soul. Twice.

One day four years ago Conservative House Leader Jay Hill pulled me behind the gold curtains in the House of Commons. Naturally I expected to be mugged. However he said the prime minister had agreed to appoint me to the Parliamentary standing committee on Finance – but only if I was a good and loyal boy. “He expects you to be a team player,” Hill said. I smiled and wagged my tail.

A week later my office door opened and in walked a guy I had known as a big executive at one of major bank’s mortgage operations. This time his business card said AIG Canada, and he had come to lobby me. F and the boys had apparently agreed to allow more players into the mortgage insurance business, with the intent of loosening up the rules, allowing more flexibility for sub-prime borrowers and encouraging home ownership with a package that also included 40-year amortizations and 0% down payments.

It was late 2006, and the US real estate market was in its early stages of collapse. Not hard to tell why. Lax lending standards, no-money house purchases and easy credit had led to a price bubble and runaway speculation, which inevitably unraveled. I listened in fascination to the pitch, then decided not to be a team player.

Although I was able to force hearings into the proposed changes, stopping them was not in the cards. Within a few months, the Canadian federal government was catering to the real estate lobby, thereby helping to escalate prices and make houses less affordable by reducing standards. A few months after that, the prime minister dooced me.

Hallelujah. Thank you, brother Stephen! Another soul saved.

Anyway, I thought of all this when I heard this week that the country’s realtors have started a new blitz in Ottawa to serve their own interests at the expense of the rest of us. As you know, F is seriously considering changing mortgage rules. Barn door. Horse. This could result in minimum down payments being hiked from 5% to 10% in order to qualify for mortgage insurance, plus an end to those wealth-sucking 35-year amortizations.

We know a few bank CEOs (TD, BeeMo) have been suggesting this, because they get to see the shocking mortgage numbers on a weekly basis. They know the vast majority of new home loans being written are 5/35ers, and the mildest of real estate corrections will drown countless young couples in unrepayable, equityless debt. Not good for the banks, even with CMHC standing in the wings.

We also know spooky Mark Carney, head of the Bank of Canada, has been urging Ottawa to do the same thing. He’s apparently outraged to learn that, after he offered consumers unlimited crack cocaine in the form of emergency interest rates, they took it and flipped out. Now Canadians owe so much that the economy could be tanked for years as they try to pay it back rather than buy quads and drywall like they’re supposed to.

So, here come the realtors. CREA just sent this emergency communication to the troops:

Real estate agents and brokers are being urged to write their MPs immediately. Mortgage debt, they argue, ain’t like car loans or credit card debt. And buying a house is almost religious, “the foundation of household equity and a gateway to financial security.”

But here’s the real argument being made. Grab a tissue before you proceed.

“Additional changes to mortgage financing rules would raise the barrier to homeownership excessively and destabilize housing markets and the economy. In particular, we are concerned about the negative impact modifications to the allowable amortization period or minimum down payment requirements would have. These changes would create affordability problems, especially for first-time buyers. First-time buyers are the first link in a chain reaction of real estate activity. They allow existing home owners to change properties or rent.

“Creating burdensome barriers for first time buyers will seriously impact the rest of the market, including retirees looking to downsize. Further tightening of mortgage rules would have other far reaching consequences for the economy. It risks causing a home price correction, a drop in the net worth of Canadian households, lowered economic growth and reduced tax revenues. Consumer confidence would be damaged, labour mobility would be impeded, and unemployment would stay elevated.”

Yes, everything but the wholesale slaughter of puppies. In fact, the mere prospect of these changes may be why dead birds are raining down on the world. It’s a sign.

Well, good thing I slipped my hip waders over my taut, naked body before I started writing this piece, with all the crap that the above paras contain. In fact, it’s excessive credit, lazy lending rules and the sucking-in of guileless and hormonal property virgins hat has led to real estate inflation and swollen family debt. Aping the Yanks, we‘ve allowed homeowners to turn into speculators, places like Vancouver to become housing casinos, and shelter to slip beyond the grasp of the middle class.

So there’s a much stronger argument for saying a housing price correction is exactly what this country needs. The alternative is to let idiot politicians and wanking realtors continue to blow gas into the Hindenburg. Then, hello Detroit and Phoenix.

If you share this heretical view, then let F know. His email’s [email protected]

Don’t you dare tell him where you got that. I so hate getting into trouble.

298 comments ↓

#1 bsallergy on 01.05.11 at 11:05 pm

Flaherty won’t do it, tightening rules would preclude a selfservative majority.

#2 HouseBuster on 01.05.11 at 11:05 pm

They can’t stop 2003 prices from coming…only delay it.

#3 Mark on 01.05.11 at 11:09 pm

If the bankers are worried, they can raise spreads. Loans that default will go back to the CMHC, to be redeemed for cold hard cash.

Incidentally, this is why we will get yield curve steepening in Canada. Government will have to sell a ton of long-term debt to finance/bail out the CMHC, while the short end of the curve will be held relentlessly down by the BoC because the economy will, for lack of better words, blow goats.

Voila, once this is over, bank shareholders will basically own most of the real estate in Canada.

#4 AG Sage on 01.05.11 at 11:17 pm

It risks causing a home price correction

The real estate industry of Canada admits the market is due for a correction?

#5 Canayjun on 01.05.11 at 11:21 pm

So basically realtors and brokers want to stop a housing bubble deflation, on a housing bubble that they vehemently deny exists? Isn’t that kind of the definition of mental illness? They want to stop something from happening that they deny even exists. I now understand how insane it must have been for you being an MP.

So crazy realtors and brokers will approach an equally crazy MP to stop something from happening that doesn’t even exist?

#6 Priced Out in Toronto on 01.05.11 at 11:23 pm

Why do I get the feeling that the realtors have figured out that we’ve reached the flashpoint but just can’t come out and say it.
A strong breeze may blow this bubble.

Or maybe they’re smarter than all of us and are just getting ready to use whatever the government does as the excuse for when it blows up – so we all don’t just tar and feather them.

#7 JO on 01.05.11 at 11:27 pm

What we need to do is all write our MPs to explain:
1) The backbone of the Ponzi economy of the last 8-10 years has been the housing based massive credit explosion. Much of this debt is subsidized by savers and taxpayers.
2) Quite frankly, it is an outrage to have so many people (speculators) use gaurantees against my income and negative real rates (theft of my savings) to make the cost of my shelter rise excessively.
3) The economy has been an illusion of excessive consumer and housing debt, which in the end will serve only the economic rentier class – that is, the FIRE economy – RE, being parasitic entaties like the banks, have done extremely well skimming off commissions from the sale of the asset tied to the explosive and fraudulent credit issuance.
4) CMHC does not help Canadians realize the dream of home ownership. For the minority that got in the game early and are lucky enough to have paid off or almost paid off the home, they are saved,but eventually, the excessive, consumption focussed credit expansion stops and in fact usually goes into an era of contraction. This is what we are facing. After all, the rate of growth in debt has far exceeded income..it always comes to an end..it was fake to begin with. Higher unemployment, slow growth or recessions are inevitable as the societal credit card balance comes down.
5) How is lower housing prices bad for the economy ? Of course, it is not bad. Also, lower debt will make families stronger. The process of reducing the debt and re setting the fake Ponzi economy will be ugly.

Stop the fake, and fraudulent economy. It is designed to confiscate as much as possible from the working and middle classes through explosive credit issuance, high inflation and slow/steady debasement of the currency, in combination with an extremely complicated and high taxation system focussed on high levels of income taxes and minimal taxes on wealthy – those with much of their income from speculation (dividends, capital gains, interest) pay much less in tax and usually make use of specially designed vehicles such as trusts to minimize the tax paid.

Only the FIRE economy an government sector have benefitted and in the end, it will be primarily the senior management of the FIRE sectors that will laugh all the way to the bank.

Please contact your MP and Mr F to fight these scammers.
JO

#8 t f on 01.05.11 at 11:31 pm

Garth, I can’t find some posts in your archives.
For example you post about the new mortgages being offered.
and your post of financial advice within the last three weeks.
How can i access them.
Thanks

Insert three quarters in the slot on the left and hit return. — Garth

#9 Peter Pan on 01.05.11 at 11:31 pm

CREA – what a bunch of thoughtful professionals…
looking out for the little guy…
first time home buyers…

What a bunch of con men.

#10 librarykaren on 01.05.11 at 11:32 pm

Watching those pathetic Juniors lose tonight reminded me of the jobless recovery. It was a miracle that they lead by 3 and was inevitably unsustainable. It would seem the same must be true of the massive levels of debt this country is burdened by. Thanks for keeping a light burning.

#11 Publius Enigma on 01.05.11 at 11:33 pm

The prevailing tone is one of surprise.

I would argue forever that not only is this completely expected from the industry, it is merely the beginning.

The form letter idea is consistent with the as target audience as well. One can hear the faint sound of crayons being unboxed all over the country.

#12 obert on 01.05.11 at 11:34 pm

The bigger the bubble the louder the pop, and the sharper the price drop. The gov/banks hope to deflate the balloon in a controllable way, and the RE industry lobbies to blow it bigger.
We as a country may have a huge trouble now, but to continue being insane by propping the bubble we may suffer a catastrophy. How unpatriotic and selfish of the RE agents.

#13 Eric on 01.05.11 at 11:34 pm

I still feel dirty after seeing yesterdays blog picture.

#14 john m on 01.05.11 at 11:36 pm

WOW ! … Great post Garth! It makes me very angry what a bunch of disgusting power hungry incompetents have done to our country with no concern for the people they are supposed to be representing in good faith.

#15 Devil's Advocate on 01.05.11 at 11:38 pm

Ohhhhh… this is going to be in-ter-est-ing…

#16 David on 01.05.11 at 11:38 pm

But…but…this makes the real estate industry look self-serving and corrupt, putting their own interests ahead of those of the public they serve with wonderful, valueable service.

What planet is this?! Is this some kind of sick joke?!?

#17 LJ on 01.05.11 at 11:41 pm

Dear Jim:

A true man of vision would opt for changing the mortgage rules to something resembling true vision: 20/20.

20% down
20 year amortization

Historically, this worked.

Signed,
One of Steve’s constituents

PS: You need to up the limit on TFSA contributions!

#18 K on 01.05.11 at 11:46 pm

I love reading you what you write. Have you ever thought about writing a good romance book.;)

You mean this isn’t? — Garth

#19 UrbanCowboy on 01.05.11 at 11:47 pm

My question is what happens when the bubble keeps inflating if they don’t tighten up on rules and rates, would the inevitable pop just be harder and louder?

#20 Devil's Advocate on 01.05.11 at 11:49 pm

Garth either you have friends in high places…

That is a fictitious CREA Memo doctored to trap you…

Or

I am off the CREA mail list.

cause I haven’t seen that memo which isn’t dated or signed by the way?

High places. — Garth

#21 ALE on 01.05.11 at 11:50 pm

sent my email in support of changes

#22 squidly77 on 01.05.11 at 11:53 pm

Right on Garth, everyone needs to e-mail the finance minister and let their feelings be known, it only takes a minute.

The realtors through sheer greed will take this country along with its citizens down if allowed.

#23 Captain Jack on 01.05.11 at 11:59 pm

Garth: thank you for this post. The bastards need to be strung up from a tree. What the [email protected]&! Thank you for having a set big enough to tell them how you felt about their bullshit.
Bring on the RE regulation changes F as you need to make up for all the shit you’ ve created in our Canadian economy.

#24 Junius on 01.06.11 at 12:00 am

Great story Garth. Good for you for maintaining your credibility.

The F giveth and now the F taketh away. The Re industry in the release essentially confirms what Garth and others have been saying all along – access to cheap credit has caused the price increases. Surprise, Surprise.

The budget watch is now going to be very interesting. Is it the End of Days or does the slow melt continue?

#25 Another Albertan on 01.06.11 at 12:01 am

Garth,

You’ve written great editorial posts to start the year. Unfortunately, the peanut gallery has almost ruined the signal-to-noise radio of the comment section. It’s almost non-stop static as things have devolved into “full retard”.

People didn’t seem to understand how you gamed them when they were asked to vote on the most notable contributors. By casting their ballots, the readership simply elected new local “devils for the cause”. Those top elected officials didn’t slink away. Instead they rolled around like pigs in $h!t and gleefully increased their verbosity with full knowledge about how their words impact others.

http://www.youtube.com/watch?v=SgHITc1OL-c

Everyone else’s mileage may vary.

#26 Soylent Green is People on 01.06.11 at 12:02 am

Does the pending housing crash mean Ray Novak has to go back to living above Harper’s garage again?

http://www2.macleans.ca/2010/07/20/who-knows-what-harper-is-really-thinking-ray-novak/

Novak is one of the most intriguing players in Ottawa, as widely praised by those around the Harper government as he is little known to the public.

“If you were building a perfect little political aide, you would end up with Ray Novak,” says Jim Armour, a former Harper aide himself. “He’s perhaps a perfect combination of trusted loyalist, strategist, interpreter, and maybe even horse whisperer.”

What’s more is how integral he has become to the life and business of Stephen Harper.

“Ray is effectively the Prime Minister’s closest confidant,” enthuses one government official. “Not only as a member of his staff, but as a personal and intimate member of the Prime Minister’s life.”

For nearly four years while Harper was opposition leader, Novak, then with the title of executive assistant, lived in a small loft above the detached garage at Stornoway—the opposition leader’s official residence—eating meals with the family and growing close to Harper’s two young children.

This is the detail that has come to define an aide who, by some tellings, knows Harper better than all but the Prime Minister’s wife and mother.

“Ray was with him more than anybody else for years and years and years,” says Brodie, who served as Harper’s chief of staff for three years.

“They were literally hardly ever apart.”

As principal secretary, Novak travels with the Prime Minister abroad,

…oversees the speech writing department and coordinates the visits of other heads of state and dignitaries (for organizing the recent royal visit, the Queen made him a lieutenant of the Royal Victorian Order, an honour bestowed for service to Her Majesty).

During the G8 and G20 summits, he listened in on the leaders’ meetings and sat in on Harper’s bilateral discussions with individual leaders.

He toils, by one account, from about 5 a.m. to midnight.

He is willing and able to serve quietly, an important prerequisite for most prime ministers, especially one, such as Harper, who so values the control of information.

“Their relationship is close enough that the PM, I think, feels he can speak freely and as plainly as possible to Ray and have Ray understand exactly what he is driving at and to pass along his views to others as a result,” Brodie says. “That’s actually trickier than it sounds.

Because he understands the PM’s thinking very intimately, he understands the historic roots of the PM’s evolution of his thinking and evolution of his relationships and evolution of his political history in a way that lets him understand immediately what the PM’s talking about.”

http://www2.macleans.ca/2010/07/20/who-knows-what-harper-is-really-thinking-ray-novak/
.
.
.

#27 T.O. Bubble Boy on 01.06.11 at 12:15 am

“F” will not respond to your email — you will get a boilerplate response from his lackies, stating that they ‘appreciate your concern’.

But — an equal volume of CREA spam to MPs and emails from concerned citizens might do some good.

#28 Mean Gene on 01.06.11 at 12:16 am

Maybe the blog dogs should email their MP with a form letter supporting the mortgage changes, fight fire with fire.

Maybe The Honorable Mr Turner from Bunkerville can post something tomorrow?/

#29 Patz on 01.06.11 at 12:17 am

Well Garth, you can hop in your Hummer, flick the mud off your roach stompers and head for the bunker. When you get there fold up the blog and crack a Canadian. ‘Cause we don’t need your advice anymore; it’s all worked out, especially here in Van aka TBPOE.

How do I know? The Van Real Estate board told me so, just today as a matter of fact.
The last two years have been a bit of a rollercoaster for the real estate market. However, sales over the past six months have definitely shown a trend toward stability.

Damn! I jes love Koolaid!

#30 Devil's Advocate on 01.06.11 at 12:20 am

Well I had a feeling this was going to be a busy Spring. But now, given this little tidbit on top of the motivation rush to beat rising interest rates, it’s going to be a real hum dinger of a make hay day.

What better way for CREA to make this news hit the streets as early as possible than to leak it to Garth.

I’ve already distributed emails containing links to this latest blog to all my first time buyers urging them to buy now before the rules AND interest rates change on them and they find themselves priced out of the market forever.

#31 Burnt Norton on 01.06.11 at 12:20 am

#76 Calgary REality on 01.05.11 at 8:49 am

Vancouver built on river delta. River delta floods, liquidfaction sets in, Vancouver underwater and gone. Home owner loses everything is homeless and unemployed due to act of god. Renter moves to dry city to continue employment then renter laughs at Vancouver homeowner greater fool.
*********************************************

Ummm, I hate to say it but that post is even sillier than TBPOE’s.

#188 Mr. Plow on 01.05.11 at 7:19 pm

LOL. My thoughts exactly.

#209 Vancouver_bear on 01.05.11 at 9:03 pm

“It never seemed like a gang hub.” But it’s a gang hub now. And we don’t even have guns to protect our families….I have pitchfork…..but the guy with the gun will have a better chance.
Got guns? Welcome to BC the best place on METH!
*********************************************

Will the Vancouver bashers puhleeease sit down? Holy canoodle. Look, every multicultural port city has a drug and gang problem. In Vancouver, you’ll probably be fine if you stay away from pig farms, twitchy dudes on street corners, and after-hour cafes on Kingsway between 2-4 a.m. Get over it. It also doesn’t mean that property affordability in Vancouver should be the same as it is in Winnipeg.

Gang violence in Vancouver? I’m more afraid of being run over by an old lady in her new E550 with an N sticker on the back window, driving home from the Richmond night market wearing a Louis Vuitton sun visor.

#32 sotiri on 01.06.11 at 12:21 am

“It risks causing a home price correction,…”
Since when correcting something is a bad thing?????

“a drop in the net worth of Canadian households,”
Since when just living in a home make you richer???? Who is going to pay more $$$$$ for your home (so you can be rich)?- Canadians. Isn’t this a way to make Canadians poor????

“lowered economic growth”
Economic growth is lowered by forcing Canadians family to spend 70% of their income just to put a roof over their head.

“unemployment would stay elevated.” This is the only correct statement because many of you Realtors will not have a job, you should seriously start to find a real one.

#33 jack on 01.06.11 at 12:22 am

Thanks for the heads-up Garth. I sent an email to both the finance minister and my MP. Is it true that hand-written letters carry more weight in these situations?

#34 T.O. Bubble Boy on 01.06.11 at 12:27 am

I guess that realtors don’t realized that they’ve been replaced with an iPhone app?

http://mobilesyrup.com/2010/12/22/realtor-app-for-iphone-now-available-to-download/

#35 PeeGee on 01.06.11 at 12:31 am

This is another example of the greed and self-serving coming from the RE and mortgage brokerage industries. They want to continue collecting big pay from RE sales and will present white lies to continue their gravy train.

Thanks for sharing F’s email. I sent an email for tightening of mortgage qualifications.

#36 Jeff Smith on 01.06.11 at 12:33 am

>#2 HouseBuster on 01.05.11 at 11:05 pm
>They can’t stop 2003 prices from coming…only delay it.

true, but they can in fact delay it for years and years. They can probably delay a correction until 2021 for all we care. Just that the tax payer will have to foot the bills

#37 Jeff Smith on 01.06.11 at 12:37 am

>#13 Eric on 01.05.11 at 11:34 pm
>I still feel dirty after seeing yesterdays blog picture.

I heard you can get that in Toronto any time of day. It’s the capital city of the world for that kind of goods.

#38 Lore on 01.06.11 at 12:41 am

Compliments for an outstanding post. Raising the minimum is a recipe for STABILITY.

Now can we get on with that proposed $100K tax free personal investing account? :-D

#39 vapour trails on 01.06.11 at 12:41 am

You’ve got my vote.

#40 Paul on 01.06.11 at 12:43 am

#33 Jack

Yes they do. I know because i’m a letter carrier and I see all the happy faces when I walk up the drive. I’m sure Mr F smiles when he gets his mail too.

Oh by the way. You better hurry up as there’s a postal strike on the horizon.

#41 BC Bring Cash on 01.06.11 at 12:43 am

Garth thanks for peeling back the curtain just a wee bit. The fraud artists are all of a sudden concerned
about what is about to unfold. Their worried that their scam is about to be revealed, just as it has been in the U.S of my A.

#42 Junius on 01.06.11 at 12:45 am

#30 DA,

You said, “I’ve already distributed emails containing links to this latest blog to all my first time buyers urging them to buy now before the rules AND interest rates change.”

Where are you finding potential first time buyers? High School?

Considering we have 70% home ownership rates and over 10% real unemployment that leaves a pretty small group of potential greaterfools.

Why not just hand deliver?

#43 Jeff Smith on 01.06.11 at 12:45 am

The other day, while chatting at the water cooler with some coworkers. A newly hired, a young lady who also recently married her bf stopped by and started showing off her financial saviness to us; how she and hubby has recently bought a place. Gosh, I feel so little realizing my financial knowledge just can’t possibly stack up against this cool couple. Can’t go wrong with RE, always goes up, why pay someone else mortgages, yadayadayada! You have all seen these types of people, you know how it feels. Littleness financially incompetent you!

#44 realityguy on 01.06.11 at 12:48 am

US Canadians and American have long criticized the Chinese for their policies.

At least they act and act fast and get the job done. Look at the King of Ponderer’s -Barack, and F. They talk and talk and talk and nothing gets done.

#45 another TO guy waiting to buy on 01.06.11 at 12:50 am

hehe that is great, Devil’s Advocate piles on trying to shake loose the last few greater fools.

Uh, if 70% of Canadians own (historic high) and that’s been enabled by low down/long amortizations/historic low rates, is the CREA so cretinous to think there is really anyone out there they can still sucker into buying?

They remind me of those shifty dudes on the street corner in NYC tricking tourists out of their money with the shell game.

Only difference is those shifty dudes aren’t so creepy or smug. They know they’re con artists and wouldn’t deny it.

Hey Happy New Year Devil’s Advocate and all you other “professionals”; I can’t wait to see your business wither up for a few years and for house prices in Canada to slide back to about 3 to 1.

#46 nonplused on 01.06.11 at 12:52 am

Here is what I sent. If copying, make sure to do your own part about credentials.

To: The Honourable Mr. Jim Flaherty, Minister of Finance, Canada

Re: Mortgage Lending Practices in Canada

Dear Mr. Flaherty,

It is with great interest that I follow the discussion in the media and online the ongoing discussion regarding Canadian mortgage lending practices and proposed rule changes. And no doubt you receive large amounts of feedback from various interested parties. I would like to weigh in myself if you have time.

My background is originally in engineering, so I am mathematically inclined, but early in my career I migrated over to financial risk management, mostly in market and trading risk but also touching credit. I also have current background in financial modelling and forecasting in my current role, and take great interest in the subject.

I would like to suggest that current home lending practices in Canada are exposing the Canadian government to excessive financial risk through the CMHC. A majority of new originations are now of the 5% down, 35 year amortization type. While these loans enable home buyers maximum leverage when buying a home, allowing a larger purchase than they might in times past be able to finance, they leave the new buyers with very little resiliency. A job loss can be catastrophic for a mortgagee in any circumstance, but with so little equity many new home buyers will be left without money to cover real estate transaction costs should they be forced to sell.

As we are seeing in the international arena, there are a great many other financial troubles in the world today. Should any of these issues result in a reduction in liquidity in the Canadian house market, many new buyers could find themselves under water without considering transaction cost. If a domino affect occurs, there could be significant implications for the Canadian housing market and for CMHC liabilities to the banks. I would like to therefore suggest that you consider improving the resiliency of the Canadian home market through increased resiliency of the loans underwriting it to be your primary consideration in drafting any new legislation.

In the credit risk management business, resiliency means having assets worth more than you owe, which are significantly liquid. Since asset prices are beyond the ability of the government to legislate except accidentally, I suggest that lending standards need to be tightened, while giving consideration to those existing home owners who are already close to the wire.

The Canadian banks have been on record as suggesting that additional tightening is required from a legislative point of view. They are correct that the changes have to come from the government. If individual banks attempt to tighten standards, they face a devil’s dilemma; the lion’s share of the market will go to those banks who lend most recklessly.

Your move to have individuals qualified at the 5 year rate was a good one, in my opinion. With short term rates currently below long term rates, it builds some resiliency into the borrower’s finances should short term rates rise. However, I would also like to suggest a 10% minimum down payment, so that a new home owner who is forced to sell for whatever reason can pay both the CMHC fees and transaction costs assuming the house holds it’s value. (CMHC fees are normally lent back to the borrower in the mortgage, the borrower does not pay them out of pocket and also put 5% down. Realtors will normally require funds in trust before they list if the house is underwater, which most underwater home owners can not post.)

I also believe the 35 year amortization option, although less of a problem, artificially raises consumer expectations above their actual purchasing power. You could in this instance either move the amortization down, say to 30 years for a while and then 25 to allow the market to react, or qualify borrowers at the 25 year term similar to the new rule around interest rate qualification and allow 35 year amortizations as a payment option once qualified at 25 years.

Of course existing CMHC mortgages need to be grandfathered at their current terms, to allow current mortgage holders to refinance as their current mortgages expire. If you are crafty with it, perhaps there is a way to push those who can afford it towards more resilient terms at renewal, but for those who simply cannot afford anything else their existing terms may need to be extended.

I understand that many Canadian banks are now offering “collateralized” mortgages where the principle is well above the purchase price of the home. In the interest of free markets banks should be allowed to take whatever risks they deem appropriate, but in the interests of taxpayers the CMHC insurance should in no case exceed 90% of the purchase price, and in the interest of consumers RRSP assets must continue to be excluded and the ability to garnishee wages must be prohibited. The net non-RRSP assets of the borrower at the time of the agreement, stated in the agreement, should be the only security against these usurious loans.

Thank you for your valuable time.

Sincerely,

Name withheld from post
Number withheld from post
Email withheld from post

#47 another TO guy waiting to buy on 01.06.11 at 1:03 am

oops sorry Junius we overlapped comments!

#48 Gord In Vancouver on 01.06.11 at 1:04 am

Thank you for an update that would never be disclosed by the mainstream media. Your detective work saved us a lot of time :)

I used to perceive real estate speculators as scum and realtors/RE associations as innocent victims but am starting to change my views.

#49 Wildroseblogger on 01.06.11 at 1:04 am

Official Edmonton Stats out today ( http://www.ereb.com/MarketActivity/LatestMarketAnalysis.html) – If this does indeed become a trend (I’m not convinced of that yet, as there are so many factors that could provide a level of support) there will be some tears in E-town. Of course, the EREB continues to insult our intelligence “Homebuyers are watching housing prices slide and may attempt to catch the market at the bottom by delaying their purchase but the low point is only evident about three months after it is reached,” said Larry Westergard, President of the REALTORS® Association of Edmonton. “Home sales are still happening each day and by waiting, the wary buyer may miss the ideal home.”

I’m not sure of many things in today’s economy and RE market, but I do know this: House prices are not about to go shooting up at such a rapid pace as to price anyone out or make cautious buyer “miss the ideal home”. It’s my opinion that Edmonton and area is in for a correction of about 10-15% more in terms of median SFD price over the next 1-2 years. I readily admit the possibility that if mortgage rules stay static, employment remains strong, and interest rates stay the same or show minimal increases that the Edmonton market will find equilibrium within another 5% drop, and all of these “ifs” are indeed possible. However, short of a wildly unexpected turn of events, there is almost no chance of a rapid rise in RE prices. I would have a hard time even envisioning a scenario in which prices go up by more than 1-2%/year, which in itself is unlikely at this point. Thus, considering the price/rent ratios, and after factoring in things like property taxes, upkeep, and lost revenue from the capital a renter would need to put towards a home, there is no reason for buyers to be in any hurry. They can wait it out for years in my estimation, wait to see what happens with prices, and never have to worry about “missing the bottom.” The EREB is playing on the memories of 2007 to scare first time buyers into thinking they risk seeing massive month over month price hikes, but unfortunately for the EREB 2007 is a different era and won’t return in this decade. The sad thing is they know it, but would rather squeeze what they can out of gullible buyers than honor their “professional” fiduciary duties to their clients and tell them the truth. I’m no psychic and I don’t portend to know the nature of the crash, but the melt has arrived. Sit this one out, kids. If you have any doubts, just ask someone who bought in mid 2007- underwater isn’t just an American term.

#50 TaxHaven on 01.06.11 at 1:07 am

Ah, the “…negative impacts additional mortgage financing rule changes would have on HOMEBUYERS….”!

Hahahahahahahaha…!!! Bring it on.

There’s a BIG difference between true “homeBUYERS” and the government/CRA-beloved “homeRENTERS”…

#51 Devil's Advocate on 01.06.11 at 1:07 am

#34 T.O. Bubble Boy on 01.06.11 at 12:27 am
I guess that realtors don’t realized that they’ve been replaced with an iPhone app?
http://mobilesyrup.com/2010/12/22/realtor-app-for-iphone-now-available-to-download/

I, CREA and all the other REALTORS would like to say you are welcome. We hope you enjoy using our new iPhone public portal application which was created by us to give you, our valued customers, limited public access to the basic listing data on the MLS. If you would like the detailed information on any of those listing you view on this exciting new app please feel free to call one of our member REALTORS. ;-)

#42 Junius on 01.06.11 at 12:45 am

#30 DA,

You said, “I’ve already distributed emails containing links to this latest blog to all my first time buyers urging them to buy now before the rules AND interest rates change.”

Where are you finding potential first time buyers? High School?

Considering we have 70% home ownership rates and over 10% real unemployment that leaves a pretty small group of potential greaterfools.
Why not just hand deliver?

Actually Junius for quite some time now of all single family homes purchased 25% have been purchased by first time buyers. Of course, as you can well expect based on that stat the number is greater for strata properties. First time buyers are a very important part of the real estate business so yes CREA has reason to be concerned and so do you.

Now don’t get me wrong, I am actually an advocate of tightening the lending rules but it must be done with a reasonable degree of finesse for to do it in one fell swoop you can bet will have disastrous far reaching consequences.

#52 dark sad person on 01.06.11 at 1:08 am

We also know spooky Mark Carney, head of the Bank of Canada, has been urging Ottawa to do the same thing. He’s apparently outraged to learn that, after he offered consumers unlimited crack cocaine in the form of emergency interest rates, they took it and flipped out. Now Canadians owe so much that the economy could be tanked for years as they try to pay it back rather than buy quads and drywall like they’re supposed to.

In fact, it’s excessive credit, lazy lending rules and the sucking-in of guileless and hormonal property virgins hat has led to real estate inflation and swollen family debt. Aping the Yanks, we‘ve allowed homeowners to turn into speculators, places like Vancouver to become housing casinos, and shelter to slip beyond the grasp of the middle class.

The alternative is to let idiot politicians and wanking realtors continue to blow gas into the Hindenburg.

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

Mind if i paste that when i write to F?

Carney is apparently outraged-
Key word “apparently”

“Finance Minister Jim Fahlerity said he’s monitoring the situation and will take action if needed”

This is reassuring-
F’s been monitoring this sh-t show since the start and still thinks we’ll skate –
**********

Are We Too Dumb for Democracy? The Logic Behind Self-Delusion

The general idea is that it’s absolutely threatening to admit you’re wrong,” said Brendan Nyhan, the lead researcher of the Michigan study. The occurrence of backfire, he noted, is “a natural defense mechanism to avoid that cognitive dissonance.”

The conclusion made here is this: facts often do not determine our beliefs, but rather our beliefs (usually non-rational beliefs) determine the facts that we accept

Worst of all, they can lead us to uncritically accept bad information just because it reinforces our beliefs. This reinforcement makes us more confident we’re right, and even less likely to listen to any new information.

And then we vote.

http://www.alternet.org/story/149262/are_we_too_dumb_for_democracy_the_logic_behind_self-delusion

#53 patient in BC on 01.06.11 at 1:09 am

I just wrote to my MP and F. This is going way too far.

#54 honest weights on 01.06.11 at 1:09 am

Great post Garth. I’ve been living overseas for 15 years, watching this bubble from afar. Seeing one brother buy a 1 bathroom house in Ladner for about 1/2 mill and another brother see his North Van house rise from about 400k to about 2 mill (after serious renos). I would once and a while think about buying a house in the Vancouver area – only because it’s my hometown and to be around family. Buying at these prices you’d have to be the greatest fool indeed. Sorry Vancouver but you’re just not worth it.
Trying to create wealth by lowering interest rates is a short term ponzi scheme at best. Of course this equates to printing money. Wouldn’t it be nice if governments could print their way to prosperity. You can’t fool all the people all the time. I don’t wish this on my fellow Canadians but I can smell the reckoning day.
Great story about the lobbyists – thanks for sharing that Garth.

#55 Tim on 01.06.11 at 1:10 am

With home ownership near 70 percent, how many more first time buyers are there?

#56 Carp Coyote on 01.06.11 at 1:12 am

If you want to form an active group, go viral and bring more people to this site and spamming F, facebook is the way to go! You setup a Garth Turner or Greater Fool group in FB and people starting “liking you” and before you know it you have increased eyes on you.

#57 bill on 01.06.11 at 1:13 am

well f just got another scathing assessment of his abilities and the tories in general

#58 Kevin on 01.06.11 at 1:17 am

Looks like the business newsmaker of 2010 is going to be quite busy in 2011.
CREA has just played their hand, while the Big Banks and MC have already played their hands a couple of weeks ago.

So what does F do?

Keep serving shooters to the hammered customer and do nothing by way of mortgage tightening.

Stop serving shooters to the hammered customer.
( Effectively 10% down and 25 year amortization)

Try to ease the hammered customer into a slight hangover by giving watered down drinks. ( 8% down, 30 year amortization, a cap on equity withdrawal, maybe phased in)

To be a fly on F’s wall…

#59 Devil's Advocate on 01.06.11 at 1:17 am

#45 another TO guy waiting to buy on 01.06.11 at 12:50 am

Hey Happy New Year Devil’s Advocate and all you other “professionals”; I can’t wait to see your business wither up for a few years and for house prices in Canada to slide back to about 3 to 1.

Happy New Year to you too. I too can’t wait to see the real estate business wither up for a few years. I’ve been waiting for a few years already and I gotta tell ya I am growing very impatient. I’m wondering if it’s EVER going to happen.

Was speaking with a broker of expensive luxury items (let’s just leave it at that) who was mentioning things seem to be picking up quite a bit. I’m seeing much the same. Go figure eh? He was mentioning Canadians were bringing the items he sells across the boarder from the US in record numbers up until recently. Because of the improvements in the economy there there is no need to ship them up here for sale as there is a good market there now. Can you believe it? What’s going on? No seriously what’s going on?

Could it be that things are not as bad as you think they are?

Oh and on the first time buyer thing… like I mentioned to Junius better than 25% of those homes sold have been to first time buyers.

#60 bill on 01.06.11 at 1:18 am

da
you would have loved the old vancouver stock exchange plenty of guys just like you
slick oily floor though

#61 Jsan on 01.06.11 at 1:21 am

I agree that EVERYONE needs to write Flaherty about this. Get off your butts and send an email, it only takes a few minutes. I have written him, the prime minister, and many in the media regarding this. I have even had a couple of emails posted on a few of the more popular US financial websites pointing out the flaws in the supposedly “safe” and “sound” Canadian real estate market.

Point out the obvious in the letter. The best thing for a healthy economy is cheap, affordable housing. By cheap I don’t mean emergency level interest rates that give a false perception of affordability.

What is going to happen to our economy as interest rates rise? We are going to see an entire generation of spending power removed from the economy as families struggle with just paying their grossly inflated mortgages. After their mortgage payment, utilities, property Tax and miscellaneous house expenses, they will not have any or very little left over income to save for retirement, save for their children’s education, to invest, or most importantly, to spend in the retail sector to help drive our economy. This generation will be expected to support the coming wave of baby boomers who will be putting a huge financial burden on the Health Care system and Canada pension.

This is what happens to an economy that should be booming due to it’s China trade and skyrocketing commodity prices but that also has sky high housing prices.

http://www.dailytelegraph.com.au/news/sunday-telegraph/retailers-cry-poor-as-sales-drop-sharply/story-e6frewt0-1225973252299

#62 TaxHaven on 01.06.11 at 1:21 am

Thanks! You can only try…I sent this text to someone:

Dear —,

I would like to speak out against any loosening of mortgage financing arrangements. In fact I would like to see them tightened considerably.

If 10% downpayments are a “hardship”, what does that say about the sickly state of Canada’s economy? A mere 10%! Ideally, Canada should be moving toward 20, 30, or 50% down to create REAL equity for homeowners. Right now we have equity-less home”renters”.

As a prospective Canadian housebuyer in 2011, I resent having my hard-saved money compete with artificial, taxpayer-provided & taxpayer-subsidized cheap mortgages handed out freely to many who shold be RENTING.

#63 Dattaman on 01.06.11 at 1:23 am

Wouldn’t first time home buyers be better able to afford a first home when there is a pricing correction… maybe waiting for one will give them a chance to save up 10%…

Perhaps more signs that the turn is here… Calgary Real Estate board has released December sales numbers, sales are down as are prices by a couple of percentage points… a sign of more downward trend to come perhaps…

http://www.creb.com/public/documents/statistics/2010/package/res-stats-2010%20December.pdf

#64 Coho on 01.06.11 at 1:23 am

Good post, Garth.

People…yes, let CREA and the government tell you what you can and can’t afford. Of course the gov’t flip flops. One day it sells you the crack, and the next day it calls you a drug addict. It blows hot and cold. and its wisdom waxes and wanes, eh? Not too dependable is it?

And CREA? Well, it should write its own dictionary and start with the word “affordable”. A 500K house needing 70% of your income for 35 years (and that is if you don’t upgrade) to carry is “affordable” if you don’t need a down payment, but it is NOT affordable if you do need one. It appears the meaning of “affordable” and “qualifying” are interchangeable?

And first time buyers, upgrade you will because in 10 years the stainless steel and granite craze will reverse. Yes, that’s right, everyone will be jacked up for granite appliances and stainless steel countertops! Sure, you can redo the kitchen, but it would be such a mess, wouldn‘t it? Better to just buy another new house and tack an extra two hundred large onto your mortgage. And by the time you are 80 years old (retirement age in 2065), the house will be paid for and the bushes and trees in the neighbourhood will have grown in nicely.

#65 Haggis on 01.06.11 at 1:24 am

If there was genuine interest in moderating house prices and protecting the banking system it could be done at the stroke of a pen: Simply revert to 25 year amortization and float the down payment requirement between 10-25% (it goes up as rates drop).

However the objective is to moderate political outrage, maintain status quo, and to protect streams of income to key individuals.

Probably the only way to effect change is to oust every last incumbent. And that just won’t happen.

#66 Basil Fawlty on 01.06.11 at 1:25 am

One way or another the cheap money, debt bubble, fiesta will come to an end. We can have hard times now, or harder times later.
From John Embry at Kingworldnews today: “When asked about his themes for 2011 Embry stated, “Basically I think we are going to see more of the same. I mean I don’t see how you could possibly shut off the paper spigot without causing a depression, the likes of which would make the 30’s look like a picnic.”

#67 Devil's Advocate on 01.06.11 at 1:27 am

“Now don’t get me wrong, I am actually an advocate of tightening the lending rules but it (tightening lending rules) must be done with a reasonable degree of finesse for to do it in one fell swoop you can bet will have disastrous far reaching consequences.” – D.A.

But that’s what you all are hoping for right? You all are waiting with bated breath for a total annihilation. Sorry, I forgot who I was talking to. I for a moment thought YOU were the ones with the conscience. I thought YOU all had the best interests of the Canadian economy at heart.

#68 vreaa on 01.06.11 at 1:32 am

2010-2019 Prediction – Annual Update –
“The Vancouver RE Bubble is like a large festering carbuncle on a dinner guest’s nose – so clearly present yet publicly unmentionable.”

Not much new on RE -> ripe for a fall.
With some peripheral thoughts about stocks and commodities.

see:
http://wp.me/pcq1o-1FA

#69 Mike on 01.06.11 at 1:33 am

the end is nigh imo.

Price/Rent ratios on condos around Yonge/401 in Toronto are pushing 20:1+. This is ridic.

#70 Off-Gridder on 01.06.11 at 1:37 am

Forgive me if I missed the boat on this one…But Devil’s Advocate are you are realtor??

#71 VF on 01.06.11 at 1:40 am

I guess it highlights how worried they are about the RE market and fear that it is tumbling. It’s interesting…in France the media is starting to highlight the fact that people used to have 15 year mortgages 10 years ago and are worried now that the majority has moved to 25 years. And we just moved back to 35 years in Canada. Wow, we are in trouble. It’s all about bankers, Mark Carey and Jim Flaherty trying to avoid being blamed for the fiasco …but JF knows he will lose his job if he moves the mortgages further down…so it won’t happen. The thing is, the longer they wait, the worth it is…so hopefully JF will finally give in to reason.

#72 LG on 01.06.11 at 1:44 am

Such fun! Let’s just watch, listen and learn (maybe).

#73 Timing is Everything on 01.06.11 at 1:50 am

Oh, Are the rules changing….again? Luv it.

Hun, ya wanna nother sco-cone?

——————————————————————–

Garth, just thought I’d mention it bunker-boy…ya never know….

http://www.csis-scrs.gc.ca/index-eng.asp

#74 Phil on 01.06.11 at 1:51 am

Took your advice. Snarfed a six pack…bedded the wife…stuck a “For Sale” sign on the lawn…how come I don’t feel any better??

#75 Nostradamus Le Mad Vlad on 01.06.11 at 1:56 am


“. . . his business card said AIG Canada, and he had come to lobby me. F and the boys . . . with the intent of loosening up the rules, allowing more flexibility for sub-prime borrowers and encouraging home ownership with a package that also included 40-year amortizations and 0% down payments.”

More and more, C-F-H’s lies / deceptions are going to come back and hurt them, esp. at election time. They know how to take advantage of sheeples, then placate them with soothing, mindless whisper-sweet-nothings small-talk.

Excellent timing to post this blog!

“A few months after that, the prime minister dooced me. Hallelujah. Thank you, brother Stephen! Another soul saved.”

Exit stage left! Far more dangerous to be on the outside looking in and reporting their hijinks to subvert truth (m$m does that nicely).
*
#219 BigD on 01.05.11 at 10:25 pm — Possible we are getting very close to the motherlode of what’s actually happening here, and you cannot handle the reality that plenty here are way better posters than you.

Agree with DSP — quit whining or go back to your master Harper on the CPC site. That is where you belong, not here.

#224 S.B. — Good post and link.
*
Yuan World Bank taps Yuan. Plus — China has also invested heavily in Portugal, Greece and a few others.

Great reason for me to unscrew my head, then get it melted down and sell myself!

Oil As said earlier, oil may well reach US$150 / brl. quicker than anyone thinks, just in time for spring break.

Truth or Consequences Pic at lead is good, as is the rest of the story as is this pic and story.

Nine Energy alternatives. Getting rid of oil dependency would be a great start.

Heads Up! Now Bills S-510 and C-36 are in place, the US FDA is going after Vitamin C.

Lockheed Martin “Lockheed Martin is the single largest recipient of U.S. tax dollars.”

Panhandling Firefighter blames others (doesn’t understand self-responsibility) and Obama as senator and hypocritical prez.

Not So Fast “There are reasons to be suspicious of this figure.”

Is China spreading its wealth or debts to others?

#76 The Original Dave on 01.06.11 at 2:01 am

I EMAILED FLAHERTY.

now, lets get the wheels in motion. This blog is stronger than crea!!! (I feel like the doggy version of Mel Gibson in ‘Braveheart’….gonna go paint my face blue and white). We need to email our mp’s to support the rule changes. There’s enough bloggers on here to make an impact.

By tomorrow, hopefully we can have mp’s email/contact listed. I will contact my mp!

lets create the change we want in the world.

Tell them William Wallace sent you! woof woof

#77 Don on 01.06.11 at 2:04 am

I am a prospective homebuyer. I also used to live in Vancouver but moved away in 2002. Yah, could have bought back then and made a chunk of change if I had sold. Cheap credit was not around then. I knew I couldn’t stand living in RAINCOUVER 24×7 from the mid october till end of april. Try leaving Van during rush hour. One thing is for sure, Vancouverites are delusional, it is by far not the best place on the West Coast. (short memory spans in Vancouver)

I have friends who live in Van and do quite well but they have a certain degree of commonsense that prohibits them from diving into the shallow end of the pool.

To say the least Devil’s Advocate…I don’t need no stick”en realtor. I have a brain and can research all the best and bad practices about closing a deal and will have conditions, and will have a proper inspection as well a checking EVERYTHING OUT MYSELF even down to the water quality, cracks in foundation/roof/siding/electrical. IT IS NOT ROCKET SCIENCE!

Pretty soon they will put out a ‘How to be stupid for Dummies’ book.

I will wait patiently, adding to my down payment until the inevitable correction occurs. Oh yah I asked 5 month year old son, if he cares that we don’t live in a Mansion yet. Just as I thought, he has no opinion on the subject. I care more what I teach him/education than what I buy him.

At this point it is cheaper for me to cut the beams and build my own house (which was always the plan). Monkey see – Monkey do! and keeping up with good friends in the trades.

And as for the RE/ Professional debate: A professional person is one who is bound by ethics and puts the client first not a person who sells on deception or ignorance.

When I hear people at the water cooler exclaim, “Prices can only go up”, I laugh inside and then cry for them. To boot these are somewhat educated folks, some with recent degrees in finance. HE HE “can’t go wrong with real estate”, he he. People should remember to back up their assumptions with validated facts. I guess when I left University that was the last year they taught that.

And to all those who are insisting Garth pick a date for the collapse. It’s already happening, slowly and surely. The fact that this question is being posed, is strong evidence that it is already happening. It will be a slow process, Patience is a virtue! and so is common sense, which I fear is not so common anymore.

To the blog Dawgs thanks for the info leads.

Question to all: What happened to Vancovuer in the 80’s early 90’s when the Japanese economy tanked. Vancouver was left with a ton of sushi restaurants. And yes the gang problem in Vancouver has taken off 10 fold in Vancouver since the late 90’s. A good number of grow ops and meth houses in the GVRD. If they own the houses they won’t get a notice of inspection from their landlords.

If you have young male neighbor who owns the house next to you and claims to have a high profile or exciting job think again. They are in every neighborhood, especially the up scale ones where most people don’t suspect or would never warrant a police search.

#78 Crash Callaway on 01.06.11 at 2:05 am

Want to applaud Garth for shining the light on those creepy crawling bloodsuckers.
They have ruined this country and hide their greed behind a fictional painting they created called the dream of home ownership.

Their troop letter to ” F ” could be condensed into one line:
Please “F” don’t double cross us and eliminate the greater fools. If you do that we’ll have to get real jobs.

#79 Jane on 01.06.11 at 2:08 am

Thank you for an excellent post, Garth, and thank you for all the funny comments, dawgs, (except you de, you stink). Laughed out loud! #31 ain’t Richmond it’s own unique country!

I actually enjoyed the CREA letter as it shows their true colours and fears much more clearly than all the press releases. If the Feds can’t see the true need for a correction, they are more clueless than I thought.

Keep up the great advocacy for us average Canadians, Garth.

#80 Aussie Roy on 01.06.11 at 2:08 am

Do people seriously believe this..

“They find themselves priced out of the market forever”. – LOL Forever is a very long time.

So when fewer people can buy, what does that do to the supply / demand and prices. Some must be drinking their own kool aid. This rubbish is up there with house prices never go down, totally delusional.

These scare tatics above show just how low many are prepared to go. Lets email potental buyers and scare them into buying, nice, real F-ing nice. They claim many here are too pessimistic about housing, but are happy to play the “pessimistic” card when it suits them. “buy now or be priced out forever”, what a load of roo droppings.

Aussie Update

http://smh.domain.com.au/home-investor-centre/sales-for-new-homes-fall-a-notch-20110106-19gl7.html#comments

http://www.smh.com.au/business/building-approvals-hit-by-rate-rise-20110106-19gto.html

http://www.adelaidenow.com.au/news/south-australia/first-home-buyers-fall-by-45-per-cent-in-south-australia/story-e6frea83-1225981992300

Wages drive house values, easy credit and emotion drive prices. Which one is currently “out of wack”.

Cue BPOE and others.

#81 Canada's housing PONZI on 01.06.11 at 2:15 am

Canada’s housing is the BIGGEST PONZI IN THE WORLD. Do the CONservatives hate free markets? DA is a clueless self serving uneducated over paid realtor who wishes to continue living in his fantasy land. Canada’s housing is nothing but a PONZI and the realtors know it.

#82 Crash Callaway on 01.06.11 at 2:16 am

Should the F Troop plan fall on Flaherty’s deaf ears.
Another option for realtors is to have the Pope canonize “F” making him the patron saint of realtors.
That way he’s gotta protect them.

#83 JC on 01.06.11 at 2:22 am

This is an admission that @ 70% homeownership there are essentially no new buyers to support growing home prices.

Looks like Fs locusts have picked clean the once fertile valley of Greater Fools in the space of an average political term.

That’s ok… BBQ’d locust is good eatin’…. tastes like chicken!

#84 TheFirstRick on 01.06.11 at 2:23 am

Hey Garth, can you dig out my Realturd comments from a couple years ago with the comparative FEW who agreed with me and the many who slagged me?

Try to keep up folks, OK?

Oh, where’s that bastard ‘turd from Victoria?

#85 TheBestPlaceOnEarth on 01.06.11 at 2:26 am

This “cartoon” shows you what happened to America. Vancouver with it’s cash in hands investors will weather the upcoming storm. The rest of Canada has problems
http://www.youtube.com/watch?v=Kv2oCXbW4r0

#86 ted23 on 01.06.11 at 2:26 am

What a bunch of bitter old biddies on this blog. if you really want to see higher taxes, fees and government budgets implode then pray for the RE market to fall off the wall. The RE industry and all its players, Realtors, Home Owners, Bankers, Do It Centers, Doctors , dentist’s Flooring industry, Roofers, Appliance manufacturers Municipal employees are the economy. Most of you should try CUBA its more your style. Like or not most of you will be seriously affected if the worse case scenario happens. Its one reason most of those you criticize are walking afine line to save all your asse’s

#87 Jeff Smith on 01.06.11 at 2:28 am

So you think you are smart being a saver? Not so fast, debtors and realturds are living off your hard earned money.

http://ukhousebubble.blogspot.com/2011/01/uk-bank-savers-lose-350-billion-since.html

#88 Thetruth on 01.06.11 at 2:37 am

Previous topic #195

Garth says “I have warned you in the past about posting deliberately fraudulent numbers. So suck it up…”

If they’re that fraudulent, why censor them?? Let me take the ridicule… why, for a few kb of space?

Everytime I’ve tried to post facts and links, you censor them and of course people like Junius et al. will think I’m out to lunch. I would too.

And my comments aren’t derogatory towards anyone…but still censored.

#89 Thetruth on 01.06.11 at 2:42 am

#34 TO Bubble Boy

The realtor iphone app has arrived… a friend’s realtor was showing me.

He said that it doesn’t show all the properties that are on the REAL mls system… INTERESTING.

I guess the industry is trying to maintain its monopoly whatever ways it can… so what else is new in Canada??

#90 Gerry B on 01.06.11 at 2:45 am

It’s amusing how the proposed changes could simultaneously “create affordability problems” and risk “causing a home price correction”. In normal usage, reducing the price of something makes it more affordable, not less affordable.

#91 April on 01.06.11 at 2:45 am

Surely F has enough intelligence to see thru that bit of pathetic CREA rhetoric. Whoever wrote that should be ashamed of themselves and those who support such a stand. They pretend to be concerned about the FTB and the seniors but obviously only care about their own interests. The real estate industry in the most corrupt in the world as told to me by a friend, who left the industry for that very reason, shortly after taking the course.

#92 Tiffa on 01.06.11 at 2:55 am

As I’m playing serious catch-up, have never owned property (I like to move around), and often struggle to make sense of bigger picture economics, I’d love if someone could explain this to me:

A ways back (this summer) I viewed a property as a bit of a looky-loo. This was a really cute but in need of repair SFH, foreclosed on, that had sold to the “owners” for about $430,000, and now two years later was listed as a court-ordered sale at $349,000.

The home was two weeks away from the end of the foreclosure period, with no offers. I got to talking with the realtor, who casually told me the following: the home had been appraised at $320,000. The bank was not going to be accepting offers less than 95% of that sum, because CMHC had agreed to purchase the house for the appraised value should no better offer come along.

This is mind boggling to me. What good does it do the CMHC to own a house that is now sitting empty, rotting through a rainy BC winter (it needed a new roof) and unoccupied? Does this imply that CMHC is holding this property as capital with the belief that it will increase in value? Does this not mess with real property values, if the home wasn’t allowed to sell for what someone was willing to actually pay?

I can’t make sense of it. Let alone wondering how it actually played out… is there not some strange conflict of interest, if CMHC buys a house for $320,000 that they recently insured for $430,000? Are the previous homeowners on the hook to CMHC for any loss, or difference that would have been payed to the bank as an insurance claim, as they would be if someone else had bought the place?

If I feel that realtors are shifty, I feel it doubly so about the CMHC… or am I missing something?

#93 kitchener1 on 01.06.11 at 2:57 am

What a farce

CREA trying to take on the powerful bank lobby.

The CREA clowns are all smoking the BC bud or they never got the memo.

Banks have the MOST POWERFULL LOBBY IN THE CANADIAN GOVT.!!!

They get what they want.

Look at it from a stragedy viewpoint:

F and crew brought in 0/40, allowed fools to buy mulitple properties with CMHC insurance, then changed the rules to 5/35.

From 06-2010, there polices were the SOLE reason many people purchased homes along with the BoC (not so independant decsion to keep rates low).

Pretty much everybody that was going to take advantage already has. Might as well change the rules now.

Point number 2

If CMHC blows sky high or even needs ANY sort of govt bailout, Harper/F and the whole Conservative party is finished for a decade at least. No more minority govt, sorry. Try telling the Canadian people that we cant afford funding raises to healthcare/CPP’s/cultural etc.. because we needed to bailout CMHC.

The libs had a scandal back in Quebec were the standard operating procedure was to grease palms and they have yet to recover from that scandal politically. That will be pocket change compared to even a mild bailout of CMHC.

People have to understand the Canadian govt at this point cannot even buy back there MBS/bonds– we dont have the money!!

Dont worry, what ever happens, F and crew will have run the projections forwards and backwards and sideways a hundred times on a hundred diff models.

Its already in the cards:

Carney has mentioned it more then once
F has mentioned in numerous times
Harper the PM of Canada mentioned it during his Christmas address.
It will be mentioned again this month
ITS A DONE DEAL.

Conservatives DO NOT BACKPEDAL on issues like this, its just not in their DNA. They rather make a mistake then look weak. Its how they operate– rember when they suspended Parliment?

For better or worse its coming down

#94 Utopia on 01.06.11 at 2:57 am

“Gee, psychoanalysis. But where did I diss F? — Garth”
———————————————————

Dunno Garth. Could it be the drag queen entitled “F”

About the psychoanalysis, well that was over the top and you are right. I have my bad days too when I write like crap. But what would be the point of being here if I could not get on your nerves like so many of the other whack-dawgs here.

In retrospect by the way I think “F” probably got a good laugh out of your picture and post yesterday. It was pretty hysterical. I hear most everyone on the hill reads your daily blog (not to mock you, it’s news to some).

And they have a good sense of humour too!

#95 Jeff Smith on 01.06.11 at 2:58 am

Honestly Garth, all this attempt by FCH to roll back the policies they have implemented 0/40 at 0i. Well it’s a little too late. The cows have left the barn long ago, and they ain’t coming back. You can almost hear the scream: “The barn gate! Shut the gate! shut the gate! Somebody! Oh my god!”. Lips services, that’s about all it is. How do you roll back all those condos across the GTA and townhouses in Milton. You can’t ! They might as well just let it be. Might as well watch the scene unfolds. Might not need to go the movie theatres for a while.

#96 Jeff Smith on 01.06.11 at 2:59 am

Geez, the photo. Seems the kid made it onto Madame Lafarge’s list.

#97 Rachelle on 01.06.11 at 3:07 am

Nice memo Garth…

#98 Partof which park? on 01.06.11 at 3:07 am

Within a few months, the Canadian federal government was catering to the real estate lobby, thereby helping to escalate prices and make houses less affordable by reducing standards. A few months after that, the prime minister dooced me.

At least the committee didn’t invade your home in a confused, illegal, desperate, anonymous attempt to intimidate you into silence. Supposedly protecting mortgage banksters and the mortgage cartel through a fishing trip of indeterminate purpose, in a most paranoid and unsubstantiated manner.

In fact, the RE cartel couldn’t care less about political spectrum. And even though they’ll try anything with anyone, they never forced people to swallow the consumerist hook. They didn’t force those people to get a license who wanted to opt out of RE mortages and stay out of debt by renting. They did not create legal impediments and orders in council directly against those who wanted to have the choice of staying clear of debt and protect their well-being.

In contrast to the Lie-berals, which launched the worst, most repugnant, abusive, divisive, and wholly politically based assault against the people of Canada ever seen. That of Bill C-68 headed by the gun-grabbing looney-tunes Alan Rock.

Consumers collectively had the right of choice in housing. They now have the right to be nailed to the wall for greed and be seared by bonfires for vanity, taking the parasites and diseases that are the RE cartel and their ilk with them.

5/35 or 10/20 or 60/20 (as was urged pre-NEP) or other qualifications are merely addressing symptoms. Ten percent prime, with lifelong indentured servitude for overbuying would be more direct and far more appropriate. A graduated house-buyer’s tax to supplement CMHC would be nice too.

#99 Kelvinator on 01.06.11 at 3:09 am

What a bunch of self-serving wankers, afraid of a healthy correction that might make it hard for them to make the lease payment on the Mercedes for a few months. Nothing can stop the natural cycles of demographics, commodities or real estate.
Get over it CRA.
Grow some nads C & F.

#100 Utopia on 01.06.11 at 3:15 am

For Nostradamus le Mad Vlad.

Awhile back you were talking about financial collapse and I lost my temper with you. You likely recall it. Anyway, the idea of it being a real possibility was getting under my skin and I kept thinking about it.

Finally I blogged the topic.

You can read the results for yourself (No, it is not about us).

http://www.rickackerman.com/2011/01/imagining-the-unimaginable/

#101 Wise Guys on 01.06.11 at 3:17 am

My email has been sent!

Hopefully more of us will equally send emails. You know the Real Estate Associations and all their agents will be doing so.

Our politicians need to enact tighter policies period!

#102 Carp Coyote on 01.06.11 at 3:23 am

RE:Vancouver crime

I’ve personally seen TWO shootings (blood and all) in Yaletown (Vancouver) and on a family friendly street I saw some cristal meth and whatever drugs being sold … I called the cops, they cracked down, and it came back, I called the cops, they cracked down and I sold … and move to a nice town like ottawa where our school system rock!

Vancouver can fool themselves but BC=narco province

#103 Burnt Norton on 01.06.11 at 3:27 am

All this talk about unsustainably rampant greed reminds me of Pizza The Hutt from the Mel Brooks’ classic Spaceballs.

http://movieclips.com/tWvp-spaceballs-movie-pizza-the-hut-threatens-lone-starr/

(from the movie) News reporter: On a sadder note, Pizza the Hutt was found dead earlier today in the back seat of his stretched limo. Evidently, the notorious gangster became locked in his car and ate himself to death.

Dear F.

As a proud Canadian, I trust that you are also a fan of John Candy (RIP). As such, I humbly request that you do us all a big favour and rent Spaceballs this weekend. Learn from Pizza the Hutt’s greedy, short-sighted ways. See how his insatiable quest for universal domination results in his imprisonment within his own luxury vehicle, wherein he is left with no other option than to cannibalize himself. Know that, if you seek to unlearn the destructive ways of the dark side, and if you act with courage, wisdom and grace, that you alone may be able to spare the good Canadian people from sharing this most cruel and ironic fate.

May the schwartz be with you.

Yours truly,

BN

#104 smartalox on 01.06.11 at 3:31 am

Dear _______, MP

I recently learned of an organized letter-writing campaign initiated and conducted by members of the Canadian Real Estate Association (CREA) its members, freinds and families, with the intention to appeal to the Finance Minister to prevent changes that would increase minimum down payments and reduce the maximum amortization periods for Canadian mortgages.

The CREA believes that such changes would reduce affordabilty for potential homeowners, and may lead to ‘price corrections’ (their term) in major Canadian housing markets.

I do NOT agree with the CREA’s position. Home affordability (as defined by my monthly mortgage payment) is defined by three things: interest rates, amortization periods, and price. As an individual consumer, I have little influence over how interest rates are set and maintained.

As a worker, the maximum amortization period I could consider in good conscience is limited by the number of years that I am prepared to work, before retirement – so, as I am 36 years old now, I’d have to work without pause, job loss or illness until age 71 to pay off a 35 year mortgage.

House prices go up and down with supply and demand, and are currently at all-time highs, but the amount borrowed for a mortgage is constant over the term of the loan.

For affordability to improve, I believe that the amount borrowed for a mortgage must decrease. This can only happen if the sizes of mortgages decrease in the future, either by increasing the amount required for a down payment, or by reducing consumer demand for houses, and therefore, house prices.

Otherwise, consumers like myself will decline to participate in the Canadian housing market altogether. If I can rent a home for less per month than the cost of interest on a mortgage, it would be foolish of me to buy a home with a mortgage financed by a Canadian bank.

#105 IsoKulli on 01.06.11 at 4:31 am

#45 said:
Uh, if 70% of Canadians own (historic high) and that’s been enabled by low down/long amortizations/historic low rates, is the CREA so cretinous to think there is really anyone out there they can still sucker into buying?

if they relax the ammortization period to 50 years, then institute multi-generational mortgages of 75 years and up, I am sure 100% homeownership is achievable.

#106 Paully on 01.06.11 at 6:28 am

“…labour mobility would be impeded…”

How can lower cost housing impede labour mobility? Wow, these guys have serious economic comprehension issues!

#107 Calgary REality on 01.06.11 at 6:54 am

Is there nothing the CREA won’t do for the benefit of themselves? If prices go down, it will make things MORE AFFORDABLE for first time buyers who will be able to pay their mortgages off faster and move up sooner = more $ to go around for all in the economy (realtors inc).

By keeping the RE Bubble going, no one wins.

#108 Calgary REality on 01.06.11 at 6:55 am

BTW – I should add, I’m all in favor of higher down payments and shorter mortgage terms.

It will only make the total debt less for home owners and bring down prices for buyers. (Sellers will win too as move up homes will be cheaper too).

#109 X on 01.06.11 at 8:42 am

Hilarious. Perhaps CREA cold lobby the banks next and remind them how financially limiting it is on the economhy to have to repay your mortgage and perhaps the banks could forgive all outstanding mortgage debts.

I am sure that they get it, and am sure that F will truly see how self serving the CREA really is.

Changing mortgage rules seems like a smarter approach rather than increasing rates more than necessary to cool the housing market, as that would also have a greater effect on the overall economy.

#110 Alliston on 01.06.11 at 8:46 am

My biggest problem with RE sans the pump – is the the high price of commissions to buy/sell. Gotta be the only asset class i know priced like this. Why so high?

#111 House on 01.06.11 at 8:48 am

How does this affect the Banks, aside from loss of new business? Isn’t CMHC (the taxpayer) on the hook for all this? Perhaps you could outline the affects on CMHC when the market drops. For example how much a ten percent drop in house prices would cost taxpayers and how much of the mortgage market would be effected by reduction of affordability and thus lead to defaults.

#112 somecatchphrase on 01.06.11 at 8:50 am

The CREA memo is making basically the same arguments that Garth has been making on this blog for the past several years.

The only difference is the tone and valence. The way I read it, it’s almost like an indirect admission that RE bears have been correct all along. It’s almost like an admission of defeat or guilt.

It reminds me of a cheezy A&E documentary I watched about homicide detectives.

The detective being interviewed said that most suspects will begin their confession with an indirect or oblique admission of guilt, which ultimately results in a full confession.

Others will begin their confession by constructing a hypothetical scenario. The suspect will ultimately admit that they themselves are the protagonist in this hypothetical scenario.

#113 bullion.bunny on 01.06.11 at 8:52 am

Although I was able to force hearings into the proposed changes, stopping them was not in the cards. Within a few months, the Canadian federal government was catering to the real estate lobby, thereby helping to escalate prices and make houses less affordable by reducing standards. A few months after that, the prime minister dooced me.

Hallelujah. Thank you, brother Stephen! Another soul saved.

If this is in fact the case then what you are saying is government no longer represents the people but the entrenched interests. Thank you for confirming what I already knew. I will save this blog entry for future use.

No, not ‘government.’ Just this one. — Garth

#114 Randy on 01.06.11 at 8:55 am

To #20 Devil’s Advocate

http://omdreb.on.ca/political/rules.php

I guess you are off the mail list…

#115 Moneta on 01.06.11 at 9:08 am

That’s probably why Greenspan refused to pop asset values… he prefered to let the market fall on its own sword.

This thing is a moving train.

#116 Lonely Limey on 01.06.11 at 9:35 am

A sign of things to come.

“Around 2.6million Britons used cash taken out on a credit card to pay their mortgage or rent last year.”

http://tinyurl.com/23nlutj

#117 Willa on 01.06.11 at 9:42 am

I wrote F.

That was fun.

And yes, Mom, I was very polite. This is Canada, after all.

#118 T.O. Bubble Boy on 01.06.11 at 9:44 am

@ #105 IsoKulli:

Why stop at 100% home ownership?

Every Canadian deserves at least 3 properties:
– A shiny new burbs McMansion
– A trendy urban condo
– A wonderful recreation property by a lake

Let’s hit 300% home ownership!!! GO CANADA GO!

#119 bullion.bunny on 01.06.11 at 10:04 am

So there’s a much stronger argument for saying a housing price correction is exactly what this country needs. The alternative is to let idiot politicians and wanking realtors continue to blow gas into the Hindenburg. Then, hello Detroit and Phoenix.

You know as well as I do that this will continue until it collapses. In collapse all the players will be exposed for what they are; then hopefully people will learn from this mess and the system can restart. Lets get this over with.

#120 dd on 01.06.11 at 10:12 am

This just in:

Fed Governor Hoenig shocked many observers yesterday when he stated, “The gold standard is a very legitimate monetary system…We’re not going to have fewer crises necessarily. You will have a longer period of price stability or price level stability, but I don’t know that you’ll have lower unemployment, I don’t know that you’ll have fewer bank failures.”

There will never again be a gold standard. Stop wasting my blog real estate. — Garth

#121 tony w on 01.06.11 at 10:17 am

Had a meeting this week with senior mortgage administration managers of one of the Sched A banks this week – guess what?

Average mortgage amount approved in 2010 in GTA was $375,000, mostly with 5% down and 35 year amortization – whew!!

Exactly as I have been reporting – a fact the industry is trying to conceal. This is why Canadians who believe ‘it’s different here’ are delusional. Or purposefully misled. — Garth

#122 Charles on 01.06.11 at 10:28 am

Hi Garth,

I trust you know what wanking means.

I understand it’s a technical term. — Garth

#123 pbrasseur on 01.06.11 at 10:28 am

Either way, no matter what the government does, the era of cheap money will end sooner or later.

And when it does the Canadian real estate market is going to take long deep dive.

The longer the wait the worse it get as our economy gets structurally adjusted to easy money and other investments are neglected.

#124 Keith in Calgary on 01.06.11 at 10:35 am

I REALTORS (TM) were truly concerned about the affordability of housing for Canadians, they would reduce their criminally egregious and unwarranted commission from the standard 7/3% (around $16,000 based on the average house price) down to a flat $500 per REALTOR (TM)……because that is truly all those assholes are worth.

Caps and (TM) logo added for sarcasm of the world’s most unprofessional profession.

#125 bullion.bunny on 01.06.11 at 10:43 am

No, not ‘government.’ Just this one. — Garth

I think you are making an over optimistic assumption. Most government entities are only interested in “feathering their own nests”. Look at all the low interest loans and services these people get after they leave the halls of power. That said, as much as I disagreed with the Chretien government on various issues. I will admit “John” had the balls to keep Canada out of the war, hold the banks at bay (as limited an effort it was) and pay down some of the national debt (even if it was an accounting gimmick).

What ‘low interest loans and services’? — Garth

#126 El Rojo on 01.06.11 at 10:43 am

Mr. Flaherty,
I strongly urge you to return some sanity into the financial side of the housing market. The present guidelines are allowing far to many young and inexperienced Canadians to become involved far beyond their means. Better to correct soon whilst they still have the earning power to eventually recover. Returning the system to a minimum down payment requirement of 10% with a 25 year amortization would be one of your greater accomplishments and may well encourage forgiveness from millions of Canadians who are disappointed
with your current policies.

Thanks for reading.

#127 bullion.bunny on 01.06.11 at 10:52 am

Exactly as I have been reporting – a fact the industry is trying to conceal. This is why Canadians who believe ‘it’s different here’ are delusional. Or purposefully misled. — Garth

Yes, classic positive feedback loop. It always blows up in the end. Disable the waste gate valve on your turbo charged car, incredible performance for about two weeks. After which the engine seizes or better yet, blows up……real good!

#128 Mary on 01.06.11 at 10:54 am

.#20 Devil’s Advocate:

I read your comment regarding the validity of the document and thought, I wonder if I can find this online somewhere else…

http://www.teamfisher.com/tighter-mortgage-rules-would-have-far-reaching-consequences-for-economy-crea/

Turns out a realtor from Saskatoon has also heard of this.

#129 (low density) Sam on 01.06.11 at 11:00 am

real estate agents huh?

I’m just getting out my copy of “American Beauty”

Annette Benning smashing herself in the face & having sex with that other guy.

FUN FUN FUN.

#130 Marty on 01.06.11 at 11:01 am

In CREA’s “Call To Action”, in this self-serving tripe in order to keep the bubble sky high, one on token it’s as if they see permanent rising home prices as an unstoppable force of nature, and by tightening lending rules, those poor new aspiring homeowners-to-be would be denied that because all of a sudden lending can’t keep pace. However, in another sentence it seems like they finally admit there is a bubble when they say “It risks causing a home price correction”.

Can’t they add two and two together and realize that falling house prices may remove some those “burdensome barriers” to first time buyers? While I agree a deflating housing bubble will have a negative effect on consumer spending and employment in the short term (see this primer for an excellent explanation: http://financialinsights.wordpress.com/2010/10/05/primer-6-the-great-connection/), in the long run it would bring back sustainable and affordable house prices.

You got to love how in CREA and any real estate board’s eyes, how they’re very selective in deeming what government actions are “government interference” in the market. I guess the “crack cocaine” in artificially low interest rates, and the CMHC backstopping risky loans (thus creating a moral hazard for the banks) are deemed “free market”, while tightening mortgage rules back to what they were historically is now deemed “government interference”.

On another note, I don’t think Royal Le Page got the memo from CREA. By looking at a recent report where in spite of dropping sales in the new year, they expect rising prices (the laws of supply and demand need not apply): http://www.cbc.ca/money/story/2011/01/06/money-lepage-survey.html

#131 AACI-Okanagan on 01.06.11 at 11:04 am

Good REITs have nothing to do with residential properties, and own top-quality commercial real estate with assured cash flow. — Garth

Garth, I am a long time reader and supporter. I have to call you on this one, commercial real estate goes hand in hand with the residential market, it usually lags behind but make no mistake about it, the residential real estate market does have an impact. It doesn’t matter if your REIT’s are equity, mortgage or hyprid invested it is just a matter of time before they start to drop.

All assets rise and fall in value, which is why active management is a must these days. Having said that, good REITS gained 1% last year, with a yield of more than 6%. If you buy well-managed companies owning Class A office buildings in busy locations, I have no doubt the impact of of a residential real estate correction will not be felt for some time. — Garth

#132 Mike on 01.06.11 at 11:11 am

Exactly the reason why there might not be a real estate correction . . . “the mildest of real estate corrections will drown countless young couples in unrepayable, equityless debt. Not good for the banks, even with CMHC standing in the wings.” — Garth.

That been said, take note, the U.S. Fed is presently trying very hard to generate higher home prices (via inflationary policy) to save the U.S. consumers and banks. Resulting inflationary pressure may force Canada’s central bank to tighten monetary policy.

#133 Devil's Advocate on 01.06.11 at 11:13 am

#62 TaxHaven on 01.06.11 at 1:21 am

Thanks! You can only try…I sent this text to someone:
Dear —,
I would like to speak out against any loosening of mortgage financing arrangements. In fact I would like to see them tightened considerably.

Nobody said anything about any further loosening of mortgage financing arrangements. What is being discussed is CREAs objection to tightening of them at this time. Not that I disagree with the idea of tightening them myself.

This is exactly the mob mentality that takes place on these blogs. It’s like the someone tells someone something who tells another and then they another and by the time the story gets back to the original teller it is completely different.

Sheesh…

#77 Don on 01.06.11 at 2:04 am
A professional person is one who is bound by ethics and puts the client first not a person who sells on deception or ignorance.

If only it were that simple.

#80 Aussie Roy on 01.06.11 at 2:08 am

Do people seriously believe this..
“They find themselves priced out of the market forever”. – LOL Forever is a very long time.

Apparently… yes.

#81 Canada’s housing PONZI on 01.06.11 at 2:15 am

Canada’s housing is the BIGGEST PONZI IN THE WORLD. Do the CONservatives hate free markets? DA is a clueless self serving uneducated over paid realtor who wishes to continue living in his fantasy land. Canada’s housing is nothing but a PONZI and the realtors know it.

“Stop telling lies about me and I will stop telling the truth about you.” – G. Gekko

#92 Tiffa on 01.06.11 at 2:55 am

The bank was not going to be accepting offers less than 95% of that sum, because CMHC had agreed to purchase the house for the appraised value should no better offer come along.

Didn’t we discuss this… oh why bother? Yes indeed the country will still need REALTORS to educate the mis and uninformed of which there are plenty

#121 tony w on 01.06.11 at 10:17 am

Had a meeting this week with senior mortgage administration managers of one of the Sched A banks this week – guess what?

Average mortgage amount approved in 2010 in GTA was $375,000, mostly with 5% down and 35 year amortization – whew!!

Exactly as I have been reporting – a fact the industry is trying to conceal. This is why Canadians who believe ‘it’s different here’ are delusional. Or purposefully misled. — Garth

That is of the 75% (rounded) who actually take out a mortgage to finance as 25% (rounded) buy cash. Of those who do finance half are high ratio and half conventional. Numbers may vary from local to local. So if you run the aggregate numbers Garth it still doesn’t support your contention that the average down payment in Canada is just 7.0% as I recall.

#134 hobbygirl on 01.06.11 at 11:17 am

The catastrophic combination of deception by the powers that be and catered interests of the MSM is just so depressing. People are literally buying it and on their way to mass slaughter.

I just remembered to take my Cymbalta after seeing that Lepage ‘report’ today. So sad…

#135 AxeHead on 01.06.11 at 11:18 am

Royal Lepage has leaked breaking news to CBC this morning (broadcast this AM in brave fashion) that housing in Canada is expected to rise over 3% average across the country and over 5% in Calgary.

It seems these unbiased experts have prediced an end to real estate slide in Canada. Of particular note is that there is nothing (acutally there is never) any FACTS to back up their predictions. Why doesn’t anybody, including CBC ask the following:

1 – WHAT are your facts to substantiate your predictions?

2 – WHAT research have you done to support your claims?

3 – HOW can your research be considered unbiased since your motives will likely skew the results?

#136 Daisy Mae on 01.06.11 at 11:23 am

“If you share this heretical view, then let F know. His email’s [email protected].”

I did just that.

#137 Cash is King on 01.06.11 at 11:27 am

I send emails…they send Cash.

I wonder who will win?

#138 Utopia on 01.06.11 at 11:28 am

#30 Devil’s Advocate panicked as reality finally sank into his thick skull that the R/E party in Canada was indeed over. Then in a fit of defiance and disrespect for all Canadians wrote the following just to prove that he really is a RealTurd (R) and does not give a damn out about anything except pumping the bubble for his own benefit just so he could earn one more fat commission before it all comes apart at the seams……..

“I’ve already distributed emails containing links to this latest blog to all my first time buyers urging them to buy now before the rules AND interest rates change on them and they find themselves priced out of the market forever”——Devils Advocate

…..Yeah, good one Devil. Where we are at now though means that prices of homes will run inverse to interest rate increases. “Nobody is going to be priced out forever”.

What happened to the value system that you kept bragging about and your high level of “so-called” professionalism.

Oh wait..let me guess. You didn’t write the above. It was your twin, the Evil Devil that did that,….right?

#139 Anotherlowlyrenter on 01.06.11 at 11:33 am

Great post – you just sparked this apolitical person to actually send an email – thanks

#140 Stevermt on 01.06.11 at 11:34 am

#16 David, David
What planet are you living on??
The real estate industry is behaving like every other industry or corportaion on THIS planet.
They are protecting their own interests, of course. Don’t You?
What company anywhere truthfully puts the public’s interests ahead of their bottom line?
Only the government should be putting the public’s interests first because they are public servants…but sadly even they do not always do that..so there you go.
Every one should just abandon the real estate industry and go back to the basics of marketing themselves..
This blog is all about protecting our own interests..no one is a victim.

#141 wetcoaster on 01.06.11 at 11:36 am

Disgusting… and these scum wonder why they are compared with slimy used car salesmen. Keep “the dream” alive ? Which dream ? The one with a ball and chain attached for 35 years ? Just keep the sheep lined up for the kill, the party is not allowed to ever end. Pathetic !

Now we know the reason behind the timing of the CMT bash job on you Garth. The whole industry is a putrid pile of sleaze. All you have to do is read “The Big Short” , now we have a Canadian version in full flight about to crash to earth.

#142 gentleInvestor on 01.06.11 at 11:36 am

The volatility on this blog is jacking up big time, and if volatility is a measure of anything then something big is gonna happen soon.

How dare you confuse volatility with arousal? — Garth

#143 T.O. Bubble Boy on 01.06.11 at 11:37 am

*** THIS JUST IN ***

Realtors say house prices will go up!

http://www.montrealgazette.com/business/Home+prices+expected+rise+further/4068717/story.html

(why is this in the “business” section, and not “classifieds”?)

#144 BDG-YYC - on 01.06.11 at 11:42 am

Of course CREA is quite technically correct in their asserttions and pretty much all of the consequences they lay out are likely outcomes of the changes being proposed. Naturally, if you begin to reverse the fundamental conditions that fostered the excesses you can rightly expect those segments that were artificially stimulated to back off.

CREA is simply playing the F.U.D. card … in thier interest and in the interest of those they serve … who are REALTORS. They have little duty to anyone else.

Now … after what has been a windfall decade for CREA and all sectors housing related they naturally want to keep the party going or at least keep the band playing even if the bar must close. The pricing run up and the resulting boost in RE commissions has in many areas doubled or tripled revenue for this sector over the past decade. A 6&3% commission on a $200K home was $9,000 less than a decade ago and now that same home turning at $500K would produce better than $20,000. Even if it were possible to sustain price levels a substantial reduction in volumes alone would have a disastrous effect on these revenues. 30% reductions in volumes alone takes 30% of revenues off the table … combine this with a 30% price reduction and … YIKES … a former dollar of revenue becomes $0.49. Something far less extreme would still be disastrous.

Residential Finance, RE, and construction account for roughly a third of the economy. Beyond this there is consideration of the income that has been injected into the other parts of the consumer economy via the “ATM” phenomenon that has accompanied the windfall cash in by homeowners and a stalling or reversal of this pattern would bode very badly for our 70% consumer based economy.

Sadly … all of this is unsustainable … and as it ends all that has been borrowed from the future to pay for this wild party will have to be paid back one way or the other. No choice. No way to avoid it.

This is going to leave one hell of a mark. We have an epidemc of debt and excess that is about to run its course. The discussions around “what should be done about it” is really quite moot on a general basis. It is all personal now – individual consequence – individual action there is no solution at large.

Its pretty clear that while many of the soon to be victims don’t yet realize how sick they really are the news is out … the deniers are being denied … and well … what to do is pretty clear.

Nothing to do now but estimate the casualties, order the body bags, and watch the party rage on ’til the fights break out and the cops arrive.

Listen … hear the sirens ?

#145 Calgary REality on 01.06.11 at 11:43 am

First, let it be known I have little love for Realtors who spin, pump and frump for their own ends and do an injustice for their clients. In fact, I’d say we could do fine without Realtors.

But I have to applaud “Devil’s Advocate” for coming on here and voicing his opinions as a realtor, that does take balls.

#146 Junius on 01.06.11 at 11:45 am

#67 DA,

You said, “You all are waiting with bated breath for a total annihilation. Sorry, I forgot who I was talking to. I for a moment thought YOU were the ones with the conscience. I thought YOU all had the best interests of the Canadian economy at heart.”

Oh, please. You know better. For every doomer here there are a dozen or more people who are very concerned in the Canadian economy and do not want to see it crumble.

Our fundamental belief is that the current economy is based on a ponzi scheme of excess credit and easy money that must and will come to an end – one way or another. Otherwise the long term pain will be greater and the prospects for real recovery further away.

It is not about Real Estate. It is about how government policy became about cheap credit and excessive risk for the average Canadian. Inflated Real Estate is just a manifestation of the underlying policies. So is the damage that has and will be done to the middle and lower income classes. It is the political and economic issue of our times.

What most of us realize is that this is simply unsustainable and has been for a long time. Better to get it over with and move on then keep throwing fuel on the bonfire of debt.

The only question is whether our government is smart enough or more likely is moral enough to start making the appropriate changes to bring the excesses down. I am betting no based on previous behaviour but hope I am wrong.

#147 eddy on 01.06.11 at 11:45 am

It’s called theft. There will be a uptick in prices as people try to beat the new regulations. But after that prices will drop a bit.

#148 Devil's Advocate on 01.06.11 at 11:47 am

#137 Utopia on 01.06.11 at 11:28 am

Dang… if only there truly was a sarcasm font. These peoples sense of humour is about as flat as piss on a plate.

#149 T.O. Bubble Boy on 01.06.11 at 11:48 am

Toronto/GTA December and full-year 2010 stats are in:

http://www.torontorealestateboard.com/consumer_info/market_news/index.htm

I wonder why the -21% year-over-year drop in sales didn’t make the headline?
(or the +37% increase in days-on-market)

#150 Junius on 01.06.11 at 11:48 am

#143 T.O. Bubble boy,

You asked, “(why is this in the “business” section, and not “classifieds”?)”

Because this is what they get for all their other advertising. Advertising disguised as Editorial. The Journalism of our times.

#151 Utopia on 01.06.11 at 11:51 am

#74 Phil on 01.06.11 at 1:51 am
Took your advice. Snarfed a six pack…bedded the wife…stuck a “For Sale” sign on the lawn…how come I don’t feel any better??

You did it in the wrong order.

#152 Renting in Sherwood Park (formerly Edmonton) on 01.06.11 at 11:52 am

Devil’s Advocate i understand you are defending your profession as most would do of their own. And of course some of the comments here are harsh on both sides of the table but explain to me this.

I had told you a couple of days ago that i would have to pay $13,000 commission for the sale of my home. Can you tell me what things the selling realtor and buying realtor does behind the scenes that make the $6,500 worth my cost?

Now i know that there are brokerage fees as well. What are they? Is it per transaction? Does ReMax for example take $1,000 of the $6,500?

My buying realtor will come out for a so-called free evaluation which of course is part of the $6,500. Then he writes the mls ad, takes pictures, places the ad, puts a lock box on my door, may or may not have an open house, may or may not show my house (why would he or she since there is a lock box for the buying realtor), writes up counter offers, delivers and picks up written offers.

I calculate about 1 hour for the ad, 1 hour for the pics, 1 hour to drop off a lock box, assume 10 hours for an open house although most agents i talk to don’t do this or get one of their “other” agents to show the home, the other stuff maybe 5 hours. That’s 18 hours + 2 hours for photocopying, paperwork, etc. $6,500 / 20 hours = $325 /hr.

The buying realtor searches the mls system for homes. He or she probably drives people to show houses more than anything and let’s say 20 to 30 houses = 30 hours conservatively. Of course this varies but if the buyer generally knows what they want, i’d assume 30 houses is plenty so let’s say 35 hours so $185 / hr for the buying realtor.

Are my facts straight with the above? Correct me if i’m wrong.

Thanks.

#153 eddy on 01.06.11 at 11:53 am

It’s a casino and the house keeps changing the rules. But I agree with CREA, leave it alone. He set the rules, if he wants to tweak it should be gradual. Ultimately the team KandaHarper is making it up as they go along- the amateur hour Puppet Show

#154 Devil's Advocate on 01.06.11 at 11:57 am

#143 T.O. Bubble Boy on 01.06.11 at 11:37 am

That’s what happens when you leak such news as potentially tighter mortgage rules. People react so as to preserve their own best interests. The brought forward demand will push prices up before the traditional spring market as frantic first time buyers bid against one another for the scarce few offerings that are on the market before the flood of listings that bloom in spring.

That email I sent out to first time buyers warning them to buy before the change in the rules…. I sent one out, shortly there-after, one to my sellers telling them to get ready for an early start this year. By being the “early birds” I can assure them a nice succulent worm (greater fool) to dine upon. Come late spring – not so much. ;-)

These are the market manipulation methods we spend the whole of our three week correspondence course learning. ;-)

#155 T.O. Bubble Boy on 01.06.11 at 11:59 am

Should we be surprised that the TREB (Toronto Real Estate Board) didn’t report that December was DOWN from November on a “Seasonally Adjusted” basis?

(November -13%, December -21%)

#156 Herb on 01.06.11 at 12:00 pm

No, not ‘government.’ Just this one. — Garth

C’mon, Garth, all governments stroke their power base. And that base is not the sheeple that elected it.

#157 Fractional Reserve on 01.06.11 at 12:01 pm

Having read this blog almost since its inception, I can summarize Garth’s position by stating that debt, if it is consumer debt is always, always, always bad. Investment debt must be entered into carefully and can make you money but it too must not be excessive and eventually the profits it earns must be crystallized. Further, owning a home is fine if you have no debt and it does not constitute the bulk of your net worth (under 40% according to Garth). Your assets need to be liquid and easily converted to cash if the SHTF and you need to get into risk free money to ride out the storms of life/markets. Bottom line, Garth is saying the house gains of the past 10 years have been fueled by ultra low emergency rates and are illusory as our neighbours south of us found out. Is this a good summary captain Garth?

Aye-aye. — Garth

#158 AACI-Okanagan on 01.06.11 at 12:02 pm

“Royal Lepage has leaked breaking news to CBC this morning (broadcast this AM in brave fashion) that housing in Canada is expected to rise over 3% average across the country and over 5% in Calgary.

It seems these unbiased experts have prediced an end to real estate slide in Canada. Of particular note is that there is nothing (acutally there is never) any FACTS to back up their predictions. Why doesn’t anybody, including CBC ask the following:”

This is all hype, realtors are in a panic mode and need to stir business. Have you ever heard a news break from Royal Lepage or Remax, etc, say it is not a good time to buy?

“All assets rise and fall in value, which is why active management is a must these days. Having said that, good REITS gained 1% last year, with a yield of more than 6%. If you buy well-managed companies owning Class A office buildings in busy locations, I have no doubt the impact of of a residential real estate correction will not be felt for some time. — Garth”

Garth it all depends what your measuring stick is in regards to “some time”. Many REIT are US based and that is the last place I would want to invest my money. The Canadian REIT are mostly holding properties, and are being purchased today, if the real estate market continues to drop, so will your return.

#159 Junius on 01.06.11 at 12:06 pm

Official Vancouver stats on 2010 price gains now out from the REBGV:

Detached benchmark $797,868 +4% YOY
Apartment benchmark $387,115 +1.2% YOY

Congrats Vancouver. Your home price gained less than most mutual funds and your apartments less than a GIC.

And this was in a year when we had a hot Spring market in anticipation of CMHC rule changes. Spring 2011 is looking very interesting.

#160 DM in C on 01.06.11 at 12:11 pm

#86 Ted23

There’s been a lot of nonsense spewed on this blog over the last couple of years, but this takes the cake,

“The RE industry and all its players, Realtors, Home Owners, Bankers, Do It Centers, Doctors , dentist’s Flooring industry, Roofers, Appliance manufacturers Municipal employees are the economy. ”

Let me guess, grade 9 edumacation and getting paid to hammer nails? My goodness, what an asinine comment.

#161 Nostradamus jr. on 01.06.11 at 12:12 pm

Double Plus for Vancouverites

…R E Prices to keep rising plus Canadian Loonie Appreciating.

Why you ask?

…Because the Western Provinces is a World Safe Location, have all the Natural Resources to survive and have but 12.5 million citizens.

Vancouver is the Capital and its Gateway.

Nostradamus jr.

#162 Junius on 01.06.11 at 12:18 pm

#144 BDG-YYC,

You said, “Of course CREA is quite technically correct in their asserttions and pretty much all of the consequences they lay out are likely outcomes of the changes being proposed. Naturally, if you begin to reverse the fundamental conditions that fostered the excesses you can rightly expect those segments that were artificially stimulated to back off.”

Clearly you are correct. This is why the original decision by F should have been NOT to stimulate the Real Estate business. The problem with artificial stimulation like this is that it creates a “new normal” which then becomes entrenched in the economy. Soon it has its own lobby and interest group who need to sustain it in order to maintain their position.

I do work in 2 industries that have tax credit incentives. When the credits first came out they created a mini boom and a stimulus for the entrepreneurs in the business. However it didn’t take long for the incentives to increase wages and expectations in the industry and eventually limit the impact of those incentives.

Likewise the rush into Real Estate by people over the past decade based on an expectation of easy money has lead to a problem of too many realtors chasing too few deals now that the market is cooling.

These distortions are unsustainable, inefficient and worst of all hurt people as correcting them is painful – as we will soon see.

#163 Dunand on 01.06.11 at 12:19 pm

I see a lot of similarities between those dead birds stories and the flock of real estate fools. Read and just replace :
“fireworks” => “low rates”.
“blackbirds” => “first time buyers”
“central Arkansas” => “Toronto, Vancouver, Calgary, you name it”

“BEEBE, Ark. – Celebratory fireworks likely sent thousands of discombobulated blackbirds into such a tizzy that they crashed into homes, cars and each other before plummeting to their deaths in central Arkansas, scientists say. Still, officials acknowledge it’s unlikely they’ll ever pinpoint a cause with certainty.”

http://www.therecord.com/news/article/308813–fireworks-may-have-sparked-bird-frenzy-deaths

#164 Devil's Advocate on 01.06.11 at 12:23 pm

#142 gentleInvestor on 01.06.11 at 11:36 am

The volatility on this blog is jacking up big time, and if volatility is a measure of anything then something big is gonna happen soon.

How dare you confuse volatility with arousal? — Garth

You got it gentleInvestor, such is it as this most recent of posts along the vein…

#141 wetcoaster on 01.06.11 at 11:36 am

Disgusting… and these scum wonder why they are compared with slimy used car salesmen. Keep “the dream” alive ? Which dream ? The one with a ball and chain attached for 35 years ? Just keep the sheep lined up for the kill, the party is not allowed to ever end. Pathetic !

Now we know the reason behind the timing of the CMT bash job on you Garth. The whole industry is a putrid pile of sleaze. All you have to do is read “The Big Short” , now we have a Canadian version in full flight about to crash to earth.

Such vile, bitter, resentful anger. How can they live with themselves. Their lives must be so dark and disgusting a living Hell (and do I know Hell or what? Opps the Boss says to get back to work). So yes they must be ready to revolt. Who wouldn’t be living such a deep, dark, dank misguided life of self imposed servitude. Problem is when they finally do take control of their lives they’re going to be blown away with the responsibilities of being a grown-up.

It’s a game! Just a game. If you are loosing it’s because you aren’t playing the game right. Cheating is a part of the game… Cheating is a calculated risk. Cheating is a most fundamental function of the economy. The economy is the game. Read my lips cheating is an economic fundamental… without cheating you have no economy for cheating is the essence of economic fundamentals. You all do it, some just not very well. You know that which is why you don’t do it, because the penalties for being caught are too costly. Guy cheats at an old western bar poker game and gets caught he gets his knackers shot off.

Read some books on the economics of crime. All they are is an exaggerated example of all economics. It’s the Pareto effect; there’s only so much to go around. If you can’t compete you are not going get much of it. That is why you fools NEED the economy to continue along. If the economy fails it is not the have not’s who will prosper from it. Those who will prosper from it are those who know how to best play the game when it gets real competitive. It’s a consequence of the Pareto effect thing; pick your poison… let the economy grow so there is more for you to share in or be prepared to have less than you already do as those who are masters at the game take it from you. ;-)

#165 eddy on 01.06.11 at 12:24 pm

I agree with the many comments here to end the ‘fake and fraudulent’ economy. Perhaps Canada should declare it’s independence from England and it’s parasitic monarchy, which is the root of ALL the banking problems.

#166 doctore on 01.06.11 at 12:28 pm

Note how with real estate and homes the word “DREAM” is used so much. We are told of the “American Dream” or the above letter from CREA telling of the “DREAM of home ownership”. So in other words a obtaining something that is wonderous and out of reach, and by doing so makes one feel happy and secure. So basically do anything possible (ie. lower lending standers or accumulation of debt) so that DREAM is realized. Problem is as Garth has shown, this DREAM is going to turn into a nighmare!

#167 Devil's Advocate on 01.06.11 at 12:34 pm

We are really no different than any other species on this planet. Survival of the fittest… it’s just as simple as that. Oh sure we like to pretend we have more compassion if we can afford it. But put someones back up against the wall and all but the most basic of survival instincts kicks in. Why do you think Garth has a bunker and a Hummer with a gun rack? Survival of the fittest is what it ultimately comes down to. The basics of ensuring the perpetuation of the species is a part of that but that is your own not the other guys. Sorry, it’s just that simple. Don’t try tell me otherwise. This isn’t a real situation… this is “F”ing Disneyland. You wait maybe it will come. Garth must suspect maybe so because he’s building for it and if and when that day comes the pups and poodles are more likely to be greeted by the muzzle of a shotgun than a warm hand shake.

So cry about your lots in life all you want. Only one person going to help you out and that is you. Pick yourself up off the floor, dust yourself off and learn to play the game. (and where exactly is that “serious” font?)

#168 Devil's Advocate on 01.06.11 at 12:44 pm

#157 Fractional Reserve on 01.06.11 at 12:01 pm
Having read this blog almost since its inception, I can summarize Garth’s position by stating that debt, if it is consumer debt is always, always, always bad. Investment debt must be entered into carefully and can make you money but it too must not be excessive and eventually the profits it earns must be crystallized. Further, owning a home is fine if you have no debt and it does not constitute the bulk of your net worth (under 40% according to Garth). Your assets need to be liquid and easily converted to cash if the SHTF and you need to get into risk free money to ride out the storms of life/markets. Bottom line, Garth is saying the house gains of the past 10 years have been fueled by ultra low emergency rates and are illusory as our neighbours south of us found out. Is this a good summary captain Garth?

Aye-aye. — Garth

RIGHT ON! Good summation. Simple as that those are wise words by which to play the game.

Now I gotta get back to work, I’m sitting with a full house aces high at a table with a lot of action on it and I think that greater fool across the table from me is about ready to fold – but not before I bump another bet from him. ;-)

#169 refinow on 01.06.11 at 12:47 pm

For those emailing Flaherty, lets hope he is not just forwarding your emails to REV CAN audit department. I don’t think I would put my neck out like that.

It is so easy to chastise Flaherity and say yes bring on the changes, but do you have any idea what the removal of the 5% down purchases will do to what little purchase demand there is left.

It will be blamed for being the pin that burst the bubble, so at least we get to throw Flahery under the bus, and say it was all his fault.

Do nothing, the ever growing bubble will burst….
Cut back lending policies, the bubble is pricked with a pin..

Damned if we do, damned if we don’t.

Any one know where I can buy some kool aid ???

#170 bullion.bunny on 01.06.11 at 12:58 pm

What ‘low interest loans and services’? — Garth

So glad you asked………..

How about this one?

I need a Hotel “John”

http://jeanchretien.libertyca.net/html/0083.html

or maybe this one…..I need a vineyard..NICE

http://www.cbc.ca/canada/montreal/story/2008/08/30/gagliano-farm.html

Oh what about this one…..nudge nudge wink wink. I need a 350k loan in a white paper envelope. Yeah Baby Yeah!

http://network.nationalpost.com/np/blogs/francis/archive/2007/11/15/brian-mulroney-and-cash-galore.aspx

I’m Jacques Parizeau I need a car and driver for 15 years after I’m finished in politics.

http://business.highbeam.com/4341/article-1G1-18062346/expremiers-ticket-ride

Or how about Paul Martin and Canada Steam ship lines…..smells bad

http://www.economist.com/node/2412166

My money is my money, your money is also my money…..

http://www.cbc.ca/canada/story/2010/05/24/mp-expenses-ns.html

Or we could discuss Ontario Premier David Peterson, selling his families electronics company to a number of land developers. That was a nice one.

Better yet we could discuss Sheila Copps and all her dirty laundry with the Hamilton Harbor Commission.

This one is for Roy…..don’t want to make him feel unwelcome……

I need to fly first class, I’m better than you.

http://www.brisbanetimes.com.au/national/property-barons-gave-airline-freebies-to-labor-minister-20100902-14rpj.html

Yes, it’s a dirty business, but someone has to fill their pockets.

A collection of largely unrelated and wildly disparate actions, laced together as conspiracy. I was in government for nine years, and received no low interest loans or services. There are far more special considerations enjoyed daily by current and former private sector executives. — Garth

#171 Devil's Advocate on 01.06.11 at 12:59 pm

Ya I know, I hear ya now.. “Royal Flush, Straight Flush and Four of a Kind beat a Full House”. But they aren’t nearly so metaphorical as Full “HOUSE”. ;-)

#172 Calgary REality on 01.06.11 at 1:03 pm

Garth, here is one for you:

Can you smell the despiration in the air??

Buying frenzy to push up house prices

Toronto Sun – 1 hour ago
House prices are on the way up across much of the country with buyers expected to flood the market early on in the year, according to a new study.

Royal LePage expects house prices to gain 3% this year to reach an average of $348,600. The number of transactions, however, is expected to drop 2%, and as much as 60% of this year’s sales volume will likely be squeezed into the beginning of the year, it said.

http://www.torontosun.com/money/2011/01/06/16782356.html

#173 CrowdedElevatorFartz on 01.06.11 at 1:07 pm

@#31………………….
Gang violence in Vancouver? I’m more afraid of being run over by an old lady in her new E550 with an N sticker on the back window, driving home from the Richmond night market wearing a Louis Vuitton sun visor.
………………………………………………………..
Hilarious but true.

#174 wetcoaster on 01.06.11 at 1:19 pm

Does this Lamb condo pumper have ties to the Sun ? Looks like it. Work them sheep into a frenzy dammit ! The whole real estate/media system is like the pimp/whore syndrome. One can’t survive without the other.

#175 (low density) Sam on 01.06.11 at 1:22 pm

#144 BDG-YYC – on 01.06.11 at 11:42 am

CREA is simply playing the F.U.D. card … in thier interest and in the interest of those they serve … who are REALTORS. They have little duty to anyone else.
________________________
organizations that license “professionals” also have some legal duty to the public.

so of course, since RE “professionals” are really not, their trade organization doesn’t need to give a rat’s ass about the public.

#176 David B on 01.06.11 at 1:26 pm

http://www.usdebtclock.org/world-debt-clock.html

Nothing in politics happens by accident, Harper & Co know that should we have a heavy fall in Real Estate opposed to a mild one we could still survive better than the USA. Note the % GDP ratio for Canada vs the USA ….. bottom line … too close for comfort.

King Steve knows all this and more but must spend more to ensure a poltical victory.

Canada’s debt re-passed the $500-billion mark at 4:55:46 AM on December 2, 2009.

http://www.theglobeandmail.com/news/politics/more-cabinet-ministers-mean-more-money-and-more-votes/article1859547/

So tell me do you really think “F” cares about those who will not be able to afford their homes in a year or two?

#177 Painted Toenails on 01.06.11 at 1:48 pm

Smart like a Fox. The only way to beat the hidden information contained within the MLS system/real estate industry as it currently works. Just saw a ‘new listing’ with asking price of $120,000 LESS than it was listed at 10 months ago. Yes. One hundred and twenty thousand. No mention anywhere in the listing that it is a relist.

This is why nobody trusts the ‘system’. You have to be smart like a fox to know what is really going on.

The Times Colonist said yesterday that real estate prices had gone up in Vic last year. Really? Have they? Maybe. Maybe not.

But they sure won’t this year.

Hold steady. Fingers on the trigger. Don’t be fooled by red herrings. The time to shoot will come.

#178 GregW, Oakville on 01.06.11 at 1:54 pm

Hi #1bsallergy,
& #2 HouseBuster,
& #3 Mark,
You are all probably correct.
Might we the people all be screwed. It doesn’t look like it will end well.
Is there still some hope? I hope so.
Is hope just a myth?

Something to think about;
‘Believe in myth avoid the discomfort of thought’.

#179 prairie gal on 01.06.11 at 1:55 pm

I’m surprised that the economics weenies on this board have not communicated to F the obvious benefit of lower home prices as a competitive advantage for Canadian industry (non-real estate related). Furthermore, the less a household has to spend on shelter, the more disposable income they have for consuming, saving for retirement and investing.

#180 Mister Obvious on 01.06.11 at 1:57 pm

I no longer care in the slightest if house prices or listings go up, down or sideways. I’m out of that business and invested elsewhere. To be honest, I believe house prices will now sag for years, but as I’ve said before, there is no one ‘out there’ that cares what ‘I believe’ any more than I care how things might turn out.

I’ve decided that what’s most important to me is the entertainment value of the Canadian housing market madness. I’m now settling in to enjoy ‘the best show on earth’. That’s why I read this blog. Garth is a most entertaining writer and its great fun to be a spectator when you have no skin in the game. I’ll bet there’s a fair number of other dawgs who feel the same.

#181 bullion.bunny on 01.06.11 at 1:59 pm

A collection of largely unrelated and wildly disparate actions, laced together as conspiracy. I was in government for nine years, and received no low interest loans or services. There are far more special considerations enjoyed daily by current and former private sector executives. — Garth

I’m sorry you feel this way, just because you did not have your nose in the troff does not mean others do not. There is no conspiracy about the facts, these people did take advantage of their positions in power. Yes you are correct private sector executives do have their fingers in the cookie jar in a big way. I cannot argue with that as i have seen this first hand. The only difference being that these are private companies and not funded by the tax payer. What I find interesting is that you condone questionable behavior by public officials that have taken oath’s to protect the public and its interests. You should read public oath’s some times. You may find many public officials in conflict of interest.
I read them all the time, it’s interesting to see how all these people overreach when it comes to money and power.

P.S. In public companies the only oath is to company and profit, that’s why it’s call private. I suspect you already know this.

#182 realpaul on 01.06.11 at 2:00 pm

Now that the idea of merit based pay has been put on the table lets expnad it to include every civil service department and entity that receives government funding,

http://fullcomment.nationalpost.com/2011/01/06/kelly-mcparland-what-we-need-is-merit-pay-for-politicians/

No more carrying these unionized parasites on the backs of starving children and seniors. Take the tax boot off the neck of the taxpayer and let this countries citizenry flourish instead of having it languish as a police state enforcing a thinly veiled dictatorship of the elite.

One more ‘civil servants eat babies’ posts and you are outta here. — Garth

#183 Aussie Roy on 01.06.11 at 2:01 pm

DA, you a bit slow today?.

If only it were that simple.

#80 Aussie Roy on 01.06.11 at 2:08 am

Do people seriously believe this..
“They find themselves priced out of the market forever”. – LOL Forever is a very long time.

Didnt you write?

I’ve already distributed emails containing links to this latest blog to all my first time buyers urging them to buy now before the rules AND interest rates change on them and they find themselves priced out of the market forever.

Nice scare campaign (priced out forever – hey). I’m surprised you didnt include, houses only ever go up.

#184 bullion.bunny on 01.06.11 at 2:01 pm

Sorry mistake…….should read

P.S. In private companies the only oath is to company and profit, that’s why it’s call “private”. I suspect you already know this.

#185 “It’s a great time to buy a house” -Royal LePage; Canadians opinion on the economy sours | Financial Insights on 01.06.11 at 2:04 pm

[…] at the prospect of a necessary tightening in mortgage lending standards.   Garth Turner recently highlighted a CREA memo calling the minions to […]

#186 dark sad person on 01.06.11 at 2:04 pm

#170 bullion.bunny on 01.06.11 at 12:58 pm

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

You missed the lowest blow of all-

When Brian and Mila had the yard sale at the end and tried to sell the furniture out of 24 Sussex-

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

More surfacing problems in Euro land has roiled the Currency Markets again-

Irish CDS spike to 620 after the Swiss CB says no more Irish debt accepted as collateral-

Greek 10yr bonds rates spike to 12.6%

Bond holders will take a writedown?

Bondholders should have been whacked long ago-including here and including our world envy Bank bond and shareholders-

Is it all over now-baby blue?

The Vigilantes smell blood-
It’s coming through a hole in the air-

http://www.telegraph.co.uk/finance/financetopics/financialcrisis/8242275/EU-plans-for-bondholder-haircuts-unsettles-debt-markets.html

#187 Popeye the sailer man on 01.06.11 at 2:04 pm

Form letters and signing lists carry less weight to an MP than a single person writing a letter.
I was on a constituency panel for David Anderson some time ago, so my details may be a bit fuzzy but look for my general idea.

I found they track every letter that came in, replied and took action on each and had a 90%+ completion rate. Now most got a “thanks for our interest” letter, or did not get an answer they were looking for, but some did. Each letter was counted by subject and counted as Pro or Con on a subject. At the time the gun registry was on the table and they received a modest number of letters on that. Also the Government was reducing the RRSP limits and they got just a few (under 100) letters on that even though he was the finance minister. It was explained to me that a single letter can count upwards of 1,000 people because very few take the time to right, so a single letter prompted without any sign of organizing factors like a form letter, carries much more weight.

So if you are sending a letter to “F” take your time, write a good one, don’t say you got the idea to write from any blog, maybe mail it in even no stamp required. And lets not send it in all at once lets spread this out over the month or more. One letter can equal 10-100 or more form letters when it comes to an MP trying to figure out what the constituency want and think.

Garth can you confirm this, or add any more details?

#188 bullion.bunny on 01.06.11 at 2:04 pm

I was in government for nine years, and received no low interest loans or services.

Yes, I know this. You are one of the few that has displayed a very high degree of both principle and honor. This is the exception and not the rule. You already know this and don’t need me to explain it to you!

#189 T2 on 01.06.11 at 2:05 pm

I just sold my townhome in the Fraser Valley of B.C. for $40K less than I paid for it 2.5 years ago. The townhome was on the market 5 months and had one, that’s right one offer despite dropping the asking price 3 times and by $20K. It’s a nice place 5yrs. old, 2000sqft. desirable location etc. In some regions the correction started months ago, in May of 2010 the same townhomes were selling for $20K more than my final sale price. I’m glad I made a pile on my first home because if I were a first time homebuyer, I’d be in debt with nothing to show for it. So many people are going to be screwed and it is going to get ugly if the wankers in Ottawa don’t handle this right (which thay haven’t yet).

#190 BigAl (Original) on 01.06.11 at 2:07 pm

So let me get this straight. Most everyone on here is OK with the big boys being able to go high leverage with their “investments”, even with no skin in the game, but when the average joe is given 5/35, or 5/25, you tut-tut this. You scream on blogs, write extensive detailed letters to your politicians.
Yet, you do nothing about the big banks, wall street, etc.
Things will always be the same.
Talk about hypocrites.

#191 Chris in Langley on 01.06.11 at 2:08 pm

Can anyone refresh my memory please…who won the greatest fool contest for 2010? It’s seems the 2011 contest is well under way with the villiage idiot from Kelowna charging hard to take a commanding lead.

Notice the villiage idiot consistently uses the lowest form of wit…”sarcasm.” He wonders why people don’t get his sarcasm. It’s because the vast majority of people that read this blog aren’t that low.
Constant use of sarcasm is a sign of desperation.

#192 RickOShea on 01.06.11 at 2:09 pm

Holy crap batman – this blog is getting to be a lot like wikileaks…

So Garth – better watch out for the take down…

It will likely start with Miss Bunny and/or the Rambo-esq girl inviting you to stay at their place next time you’re doing a presentation in their town… be afraid – be _very_ afraid. That or go out in a blaze of glory.

MissyBunny = cardiac arrest. — Garth

#193 BC Bring Cash on 01.06.11 at 2:27 pm

re#42 nonplused

Nice rant. Couldn’t agree with you more. Its too bad that our voices will fall on F’s deaf ears. He does not represent his constituents but only the lobbyists that pound on his door. Some democracy. Harper claims to have a mandate to govern with a minority vote. How about listening to the other 70% who did not vote CONservative. F will listen to the banking industry if what they are telling us is what they truly want. In other words stiffen mortgage qualification requirements. It may happen because even though mortgages are no risk banks, they are worried about a mass default on unsecured loans and even secured lines of credit backed by financed homes that are under water. I believe that the banks are very worried and want turn down money spigot a bit. It may be too late and what we are about to witness is a financial crisis in Canada. I hope I’m wrong. Time will tell. If it does happen these events through out history move very quickly.

#194 bee foot on 01.06.11 at 2:36 pm

This post is pretty political, but I still applause you for speaking up. I don’t necessary agree with Mr Harper and his team are doing, I blame the political system more than Mr Harper. The system is not working. We voted Liberal, we voted PC, we voted NDP, once they are in office, they are all the same to me. There are a few things I want the system to change:
– want to be able to recall a politician from office with enough support from the voters
– want to ban MP from crossing the floor, at least, as Garth pointed in the past, the person need to go back to the voter if he/she wants to cross the floor
– want to see proportional representation introduced in the system

#195 Devil's Advocate on 01.06.11 at 2:37 pm

#160 DM in C on 01.06.11 at 12:11 pm

#86 Ted23

There’s been a lot of nonsense spewed on this blog over the last couple of years, but this takes the cake,
“The RE industry and all its players, Realtors, Home Owners, Bankers, Do It Centers, Doctors , dentist’s Flooring industry, Roofers, Appliance manufacturers Municipal employees are the economy. ”

Let me guess, grade 9 edumacation and getting paid to hammer nails? My goodness, what an asinine comment.

I think DM you are quite mistaken in which direction you point that accusing finger. If get my drift. Hint; look in a mirror.

#169 refinow on 01.06.11 at 12:47 pm

For those emailing Flaherty, lets hope he is not just forwarding your emails to REV CAN audit department. I don’t think I would put my neck out like that.

Or demanding of Garth that he hand over the email and IP addresses of the Pups and Poodles and occasional Devilish poster. ;-) But I fear not because I always leave something on the table just in case they want to audit me. It is so gratifying to have them write you a cheque when they though it would be you them.

#183 Aussie Roy on 01.06.11 at 2:01 pm

DA, you a bit slow today?.

If only it were that simple.

#80 Aussie Roy on 01.06.11 at 2:08 am

Do people seriously believe this..

“They find themselves priced out of the market forever”. – LOL Forever is a very long time.
Didnt you write?

I’ve already distributed emails containing links to this latest blog to all my first time buyers urging them to buy now before the rules AND interest rates change on them and they find themselves priced out of the market forever.

Nice scare campaign (priced out forever – hey). I’m surprised you didnt include, houses only ever go up.

Like I said the sense of humor around these blogs is as flat as piss on a plate.

#191 Chris in Langley on 01.06.11 at 2:08 pm

Can anyone refresh my memory please…who won the greatest fool contest for 2010? It’s seems the 2011 contest is well under way with the villiage idiot from Kelowna charging hard to take a commanding lead.
Notice the villiage idiot consistently uses the lowest form of wit…”sarcasm.” He wonders why people don’t get his sarcasm. It’s because the vast majority of people that read this blog aren’t that low.

Constant use of sarcasm is a sign of desperation.

Yes name calling is a sign of such higher intelligence. “Pups and poodles” is and endearing pet name ;-). “Village Idiot” boo hoo, that’s just plain mean, boo hoo woe is me.

#196 GregW, Oakville on 01.06.11 at 2:41 pm

Hi #20 Devil’s Advocate, I can’t resist. re: High places.
Don’t forget the other direction. Some might say more down to earth? I’ve been here a few times and much more, just for fun of course.
http://photography.nationalgeographic.com/photography/enlarge/ellisons-cave-photography.html

#197 bullion.bunny on 01.06.11 at 2:47 pm

#182 realpaul on 01.06.11 at 2:00 pm

One more ‘civil servants eat babies’ posts and you are outta here. — Garth

Realpaul, you have to get over this “hate on” you have for civil servants. It’s getting kind of ……old. The civil servants we have are the finest men and women anyone could ask for. They are here to help you in every way possible to the highest level and I’m not being sarcastic! Your job is to ask the hard questions of all these fine men and women. Just have a look at the criminal code, it’s full of protections for the individual! Try and find this anywhere else including the U.S of A.
Those who do not exercise their rights have none.
Your job is to be responsible and always ask the “right” questions. It’s more powerful than you can ever imagine.

Listen to this, it will put everything in perspective.

http://www.creditorsincommerce.com/

#198 bullion.bunny on 01.06.11 at 2:49 pm

MissyBunny = cardiac arrest. — Garth

Garth, get over it…….she is not that hot. I’ve seen tighter bunnies in my day.

#199 TorontoMortgageBroker on 01.06.11 at 2:57 pm

Garth,

I am a Mortgage Broker in Toronto and recently liquidated all my properties in anticipation of the bubble burst. I came out on top on all of them but did extremely well on a property I purchased last year for $237K and sold this year, to A GREATER FOOL for $274K. Kudo’s to you for the insight.

I am curious to know when you expect F & C to implement the new mortgage changes? When do you expect rates to rise? When do you think the bubble will burst and what investment tools should I keep my money in until the market begins to recover? I was thinking of purchasing properties in Florida.

#200 David on 01.06.11 at 2:58 pm

#140 Stevermt One minute, you’re a socialist, decrying high pay….now, you can’t recognioze blatant, juvenile-level sarcasm for what it is, and want to argue with me over the idea that everyone is out for themsleves.

Are you on meds for something, or just super childish?

#201 kitchener1 on 01.06.11 at 3:07 pm

121 tony w on 01.06.11 at 10:17 am

375k @ 35y with 5% down is very very close to the numbers that my mortgage pals have been telling me.

CREA and RE pumpers have this all wrong.

CMHC can no longer migate risk, that ship sailed in 08 and 09. All they can do now is somehow try to migate the fallout.

In terms of first time home buyers. Its basic economics 101

prices will have to adjust to were ever the buyers can afford it.

5/35 brought prices up as with the min. downpayment, the first time buyer can now purchase a home for 400k were as in the past, they were limited to 200-250K range.

The job of the govt is to be responsible with tax payers dollars.

#202 Herb on 01.06.11 at 3:08 pm

One more ‘civil servants eat babies’ posts and you are outta here. — Garth</blockquote

C'mon, realpaul, you can't resist a challenge like that! Take up the gauntlet and DO IT!

#203 BigAl (Original) on 01.06.11 at 3:09 pm

With 20 and 30-somethings being handed 6-figure jobs with little or no experience on silver platters in a supposed “bad economy”, with the continuing massive growth in immigration, with 90% of the workforce still working, with that uniquely Canadian identity willing to spend 50-80% of income on home ownership (even if it means 2-income families taking on multiple jobs), expect the RE frenzy to continue.

#204 Herb on 01.06.11 at 3:09 pm

(Sorry about the messed up HTML in my previous.)

#205 Junius on 01.06.11 at 3:12 pm

#190 BigAl (original),

Skewering the Banksters on this Blog has been a blood sport for more than a year. If you missed these posts you must be new.

I, for one, put them at the head of the line of people responsible for this mess. Their bought politicians are right after them. Never have so few, caused so much pain to so many in the name of greed.

Feel better?

#206 Edmontonian on 01.06.11 at 3:19 pm

Here in Edmonton it’s front page new on the “sun” that Real Estate Priceson SFHs are up 9% in the Tax man’s audit for the city which was done early in the summer. It’s unfortunate that they leave the story there. WHy not include the rest of the facts? The average price of SFH and and condos overall ending 2010 is DOWN 10% from the previous year! Many developers including additions of granite, hardwood & second parking stalls to get a slightly pbetter price,and people were looking at the monthly payment in the earlier part of the year, and that was that. Sales have slumped this last part of the year though-even though interest rates have remained at the same overall lows! Near 6,000 SFHs and 1800 condos listed with MLS, not including the other 20,000 or so sitting empty trying to be rented on Craigslist & Kijiji!

#207 dark sad person on 01.06.11 at 3:22 pm

#194 bee foot on 01.06.11 at 2:36 pm

***********
I agree with all the points you made-
Those things all do need to happen
And yes-we have no chance of change with any of the corrupted/duped clueless fools that pollute our Parliament-

There is no way that any rule changes/laws/ethics/morals will be instilled into our Government until the People have control of the Money Supply and that Money Supply must be locked to something tangible-something rare-something that Governments cannot increase the supply of-in order to bribe/buy votes from a completely dumbed down Society-such as we have-

With a locked supply of Money “everything” you ask for above will happen-

The Free Market and (the locking mechanism) will force it-

#208 kitchener1 on 01.06.11 at 3:31 pm

Just a quick glance at mls.ca shows me that in the

GTA (brampton, Miss, Toronto, Ajax, Whitby there are approx 580 new listings since Jan 1 up to 400k.

Add another 370 new listings in the same area when going up to 1 million.

So in the first 4 days of 2011 (MLS.ca is usually behind by at least 2 days) there are 950 new listings in the GTA with prices up too 1 million $.

Wow, just wait till Feb/March/June/August.

Only thing that kept prices in check has been lack of listings, now if we get a glut of listings and a buyers strike, and some new mortgage rules, 2011 will be a very interesting year

#209 Vancouver_Bear on 01.06.11 at 3:44 pm

Realtu*ds crapped their pants….Ha-ha-ha.
Guys, get in a poggey line while it’s still possible.

Bring the parity in prices as the loonie shot past the parity with greenback! – http://www.torontosun.com/money/2011/01/06/16781961.html

#210 Vancouver_Bear on 01.06.11 at 3:48 pm

30 Devil’s Advocate on 01.06.11 at 12:20 am

No this realturds will not learn anything….if FTB are priced out who will buy then? Right….NOBODY.
Think about it then post.

#211 Drake on 01.06.11 at 4:02 pm

I’m beyond caring. BTW, the reason those birds are falling from the sky is the release of gas from along the Mississippi fault line. Bye bye middle America.

#212 Mark on 01.06.11 at 4:11 pm

“With 20 and 30-somethings being handed 6-figure jobs with little or no experience on silver platters ”

That’s extremely rare, and you know it. Most 20-somethings and low-30-somethings can’t even find jobs because there hasn’t been any hiring in the past decade.

#213 Hell in a Hand Basket on 01.06.11 at 4:13 pm

Thanks non-plused for putting that up. I used it with changes to e-mail both my MP and F.

Hopefully DA is right about people wanting to get in under the wire, because I will have my place for sale next month. Waiting for that greater fool.

#214 Two-thirds on 01.06.11 at 4:18 pm

#49 Wildroseblogger on 01.06.11 at 1:04 am

The following article gives reason to speculate that if the 2.5% SFH decline rate continues, in six months, home values could drop by 15%!

http://edmonton.ctv.ca/servlet/an/local/CTVNews/20110105/edm_housing_110105/20110105/?hub=EdmontonHome

And to add insult to injury, property value assessments have risen by an average 9% YOY – with taxes to follow

It’s tough to be a RE bull in Edmonton these days.

#215 GregW, Oakville on 01.06.11 at 4:24 pm

Hi Garth, fyi link to article
(Might there be some “forshadowing” for Canada here?)

Irish Leaders Castigated As Greatest Traitors Of All Time
http://www.infowars.com/irish-leaders-castigated-as-greatest-traitors-of-all-time/

“Government has recently passed the harshest budget in the history of the State with further austerity promised for the next three years and perhaps for decades”

“The words ‘treason’, ‘traitors’, and ‘treachery’ are being increasingly used not only by ordinary citizens but also by certain politicians, economists, business leaders, and celebrities. ‘Economic treason’ was a term used by the leader of the Labour Party to describe Cowen and Lenihan’s blanket guarantee to the banks. And, incredibly, even the country’s ostensibly non-partisan police association, the GRA, accused the government of ‘treachery’ and denounced it as a ‘government of national sabotage’….”

“The banksters were frantic. As the property bubble was beginning to burst, their main rival, Anglo Irish Bank, was in serious trouble and the huge loss of liquidity could bring down the country’s entire financial system. Like Anglo Irish, AIB and BOI also had massive exposure to the developers and all were in danger of imminent collapse. The banksters implored the Government to do something, immediately, before the money markets opened the following morning.

Having received such stark news from the banksters, Cowen and Lenihan knew they had to move quickly and decisively. They would have to act, and be seen to act, without bias and without favouring any special interest groups. Their first duty was to ensure the welfare of the nation as a whole and to safeguard the financial interests of all the Irish people.

But in this they failed utterly. One special interest group, the banksters, prevailed spectacularly over the interests of the Irish people. How did the banksters manage to wield such inordinate influence over crucial governmental policy?

A key disturbing fact about this meeting was never commented upon in the mainstream media….”

“For those who haven’t heard of the Bilderbergers, they are a brotherhood of unelected international banksters, corporatists, politicians, and others who meet secretly every year to formulate and manipulate world policy in finance, economics, trade, and any other area that they can control for their own selfish, globalist interests….”

“Looking forward, there will soon be a new government in Ireland. It is now time for the Irish people to take a firm stand. In the coming election campaign they must warn incoming government hopefuls that there HAS to be radical change. The criminal pledges of an outgoing government of traitors MUST be dismantled and consigned to the trash can, along with their authors. The people will not stand for more of the same old bullshit gombeen politics; they are in no mood for mealy-mouthedness or ineffectual tinkering with a failed system. They demand nothing less than clear, decisive, and even ruthless change. They demand leaders of integrity, innovation, and courage. And they demand a decent living for themselves, their children, and future generations yet unborn. There can be no going back!

Actions that should be taken as a matter of urgency:…”

#216 HouseBuster on 01.06.11 at 4:32 pm

#202 BigAl (Original)
There’s no way a 20 or 30 something gets a $100,000 /year job with little or no experience. In fact, getting a $100,000/year a job is hard to find period.

#217 UrbanCowboy on 01.06.11 at 4:33 pm

Keep “the dream” alive ?
————————————————
Very similar to George Bush’s comments about American’s owning homes a few years prior to the crash…..

#218 HouseBuster on 01.06.11 at 4:36 pm

198 bullion.bunny on 01.06.11 at 2:49 pm
MissyBunny = cardiac arrest. — Garth

Garth, get over it…….she is not that hot. I’ve seen tighter bunnies in my day.
———————————————-

Wanna show us?

#219 GregW, Oakville on 01.06.11 at 4:37 pm

Hi Garth, fyi article for some thought. Some might enjoy it.

A Nation Of Truth-Rejecters
http://www.infowars.com/a-nation-of-truth-rejecters/

“A bedrock principle of Natural Law (the Law upon which Western Civilization rests) is the primacy of truth. Without a desire for, and appreciation of, truth, society cannot sustain itself. Lies, deceit, duplicity, etc., are more than moral evils; they are the bane of freedom and liberty. Take away truth, and one is left without honor, justice, or decency. Truth is the cement that holds the bricks and stones of a sane and civilized society together. Remove the former and the latter will crumble.

Truth also demands…”

#220 inVancouver on 01.06.11 at 4:37 pm

The debt crunch is showing more signs in the news.

“annualized net writeoff rate at Glacier Credit Card Trust (made up entirely of Canadian Tire credit card receivables) soared to 8.17% in November 2010 compared with only 6.83% in October 2010”

http://www.nationalpost.com/todays-paper/Canadian+Tire+credit+card+writeoffs+soar/4066961/story.html

#221 Nostradamus jr. on 01.06.11 at 4:38 pm

Food Riots in Algeria.

..Just the begining folks….the Safety of our Western Provinces will become more evident over time w/ other World Starvation Events.

Nostradamus jr.

#222 Devore on 01.06.11 at 4:41 pm

#145 Calgary REality

But I have to applaud “Devil’s Advocate” for coming on here and voicing his opinions as a realtor, that does take balls.

Until he posts his name, all it takes is an ego.

#223 Mr. plow on 01.06.11 at 4:56 pm

#46 nonplused…

Well done, but…

Do you think anyone would read that long of an email, let alone F? I mean what happened to the lost art of concise writing?

#224 boomer62 on 01.06.11 at 5:01 pm

Similar trend in the 2010 numbers for Barrie and District
(i.e. volume was down 5% YOY and price was up 7% YOY, total residential market value was $1.2 Billion)
Presently, almost 5 months of backlog.

http://creastats.crea.ca/barr/

Would others post their respective real estate board stats for 2010?

#225 Renting in Sherwood Park (formerly Edmonton) on 01.06.11 at 5:03 pm

I guess the lack of Devil’s Advocate response to my post #152 means realtors do in fact range in being paid between $185/hr and $325/hr.

#226 Livingthedream on 01.06.11 at 5:05 pm

Really doesn’t make a hell of a lot of difference at this point what “F” does.Most of the Canadian middle class is so deeply in debt that there will be no escape. Seems the intended objective of the world wide economic system is to have that 70% figure ( or more) of the working people so deeply in debt there is no escape in their lifetime. Planned inflation and leveraged debt.Hence the new Surfdom. Who’s paying the bank write offs and bailouts of bad debt.We are through our high income tax, sales tax, property tax, fuel tax and a myriad of service charges at all levels of Government.Being in debt to pay for your over inflated Mc Mansion, 3 SUV’s and 6 widesreens is how they “got” you on the treadmill.All with inflated dollars , mostly from inflated property mortgaged to the max.
With millions of people on the public payroll working for too many levels of government they won’t let you go.Don’t pay your income tax , property tax or GST/HST( if you have a business) for one quarter and see how fast the tax man is on your ass.
Welcome to the 21 Century Surfdom.They own it all, and the man lets you use it while you work your ass off for the rest of your miserable life making your payments.
Sell your McMansion fast as you can to some anxious immigration applicant, downsize the SUV, fire the poolman ,lawn care guy and cutback on the wife’s botox treatments. Thats the only way you can beat it! Can’t tax what you haven’t got or don’t use.
Current destination ,”Feudalism”where the government and financial institutions grant you the “right” to use their assets( as long as you pay the fee).Surfdom 21st Century. That could be a new RE fim logo ?

#227 Alex on 01.06.11 at 5:08 pm

http://www.torontolife.com/daily/informer/from-print-edition-informer/2010/07/06/bubble-trouble/3/

“One of the loudest pessimists (to some, a realist) is Garth Turner, the incendiary author, financial advisor, lecturer and former Conservative MP. “Every young couple with $10,000 to put down felt it was their God-given right to own granite countertops,” he says. “And that’s just nuts.” Turner’s new book, Money Road: Tools for the Wild Ride Ahead, includes dire warnings of a bubble. For starters, there’s the uncertainty of the economy and the possibility that we’re in a jobless recovery. Then factor in the HST for new buildings, which Turner predicts will be the first in multi-year tax increases. “We’ve allowed real estate to be a vastly, absurdly, delusionally overvalued asset,” he says.”

Incendiary = hot. — Garth

#228 Sam on 01.06.11 at 5:15 pm

Huh… only 1% dip in Toronto sales volume.. or are they making it confusing.. ?

http://www.torontorealestateboard.com/consumer_info/market_news/news2011/pdf/nr_market_watch_1210.pdf

#229 Stevermt on 01.06.11 at 5:19 pm

#181 bullion.bunny
good comment about corporate execs having their paws in the cookie jar too.

#230 edmonton mortgage broker on 01.06.11 at 5:21 pm

mortgage business in edmonton is dead and has been for months. listings are sitting on the market for ages. you’ll have to price aggressively to even get anyone to come by for a showing. if 10 down and 25 yr am gets passed, it’s game over. i’ve already found another line of work thats far more lucrative. mortgage brokering has been good to me for the 9 years i’ve been involved in it. who do we work for? ourselves of course. if a client is dumb enough to go for broke and stretch for a 0/40 mortgage, i might try to talk them out of it, but i wouldn’t try too hard, and i’m as honest as they come. after all, if i told all my clients what i believed of this bubble of a market, how would i feed my family. take that for what it is…

gonna be a plenty of realturd and mortgage broker in the soup lines soon

#231 Pr on 01.06.11 at 5:40 pm

Hi M Harper
Please change the rules for the mortgage to 20% cash minimum and maximum 25 years amortization.
The past politics 0 cash 40 years amortization or the 5% cash 35 years is a serious problem for the family who needs a roof over their heads. Put back interest rate to the historical norm. The prices of real estate as double, triple quadruple since the year 2000, it’s unacceptable. Theirs no question that you are working hard, the question is…who you are working for! Its time, with 150% average indebtedness of your average Canadian citizen, to step in, and act responsibly.
Thank you.
M Harper electronique mail:
http://pm.gc.ca/fra/contact.asp?pageId=30&featureId=10

#232 Stevermt on 01.06.11 at 5:45 pm

The RE industry , if we can call it that, are just lobbying the government just like the Big Banks, big OIL, big Pharma, big Insurance, and so on, to keep their gravy train going..
the big players lobby hard and usually win. Money and influence win. The smaller people don’t have that voice or power.
The most at fault are the Banksters , whose insatiable appetite to increase debt(money), has resulted in this bubble…They will keep inflating bubbles forever.

#233 UrbanCowboy on 01.06.11 at 5:48 pm

#202 BigAl (Original) on 01.06.11 at 3:09 pmWith 20 and 30-somethings being handed 6-figure jobs with little or no experience on silver platters in a supposed “bad economy”, with the continuing massive growth in immigration, with 90% of the workforce still working, with that uniquely Canadian identity willing to spend 50-80% of income on home ownership (even if it means 2-income families taking on multiple jobs), expect the RE frenzy to continue.
———————————————————-
I don’t know where you people get these delusions, those in the 100K range are manager postions, and how many do you know that are in their 20’s – 30’s with little experience holding management postions??! How many people do you know that will move into a management position in their entire working career? I can see that happening only when the mass exodus of baby boomers retiring begins and is at its peak.

#234 Devore on 01.06.11 at 5:55 pm

#190 BigAl (Original)

So let me get this straight. Most everyone on here is OK with the big boys being able to go high leverage with their “investments”, even with no skin in the game

Huh? Of course, with their own money, you’re allowed to do whatever you like. With tax payer guaranteed money, not so much maybe?

#235 Mark on 01.06.11 at 5:59 pm

Everything is based on expanding credit…even the great China miracle. Without ever increasing credit (money creation) the merry-go-round stops. The attached article is worth a read and explains how Wall Street/Central Bankers are quietly blowing up the bubble again (of course with the best of intentions!!!).

Keep those morons spending!

http://www.counterpunch.org/whitney01062011.html

#236 HouseBuster on 01.06.11 at 6:08 pm

#228 edmonton mortgage broker – what line of work did you find?

#237 Vancouver_Bear on 01.06.11 at 6:11 pm

#161 Nostradamus jr. on 01.06.11 at 12:12 pm

Vancouver is a capital of what? It’s a weed and gang capital.
If AB decides to keep their oil to themselves….then Vancouver will be screwed…you can not fuel your car with weed….right? Or may be you can…depends on what you smoke.

#238 Joe on 01.06.11 at 6:26 pm

Hey Garth….Phil Soper says you’re wrong ??

http://money.canoe.ca/money/business/canada/archives/2011/01/20110106-093306.html

#239 edmonton mortgage broker on 01.06.11 at 6:29 pm

#235 HouseBuster –it’s still real estate related. i’m “helping” local sellers unload their real estate without involving a realturd, to qualified buyers in this crappy market. it’s somewhat complicated (if it were easy, everybody would be doing it) and makes use of my skills in financing and marketing.

believe it or not, you can make money in an up or down real estate market. you just have to be creative and think outside the box and look at the skill sets you possess and maximize them.

#240 edmonton mortgage broker on 01.06.11 at 6:30 pm

#235 HouseBuster—and if that gig doesn’t pan out, i was thinking of becoming a civil servant :P

#241 GregW, Oakville on 01.06.11 at 6:34 pm

Hi Garth, I see vaccines are in the news again today.
Glade we still have a choice, for now.
Are you giving truly informed consent when/if you take the shots?

Mercury, when did it start to become safe to infect oneself with any of it at all??? Lots of info can still be found on the web for now, but you must look first before you can still say you are making an informed choice. Just because a person in a white coat tells you to take the shot isn’t necessarily in your own best interest. If you give the shot to a fish, you’d be told its not safe to eat due to the amount of mercury you just added! Why/how is it ok to inject it into your blood stream??? And the fact it has mercury is hidden on the label, its ‘thimerosal’ on the label, which is 49% ethyl mercury! Even the so-called mercury free vaccine still have some.
(Just how much is in the shot? See last link. Label at ~2:22, what does that mean ~4:57 – 7min)

I’ve decide to not get the shots. Lots of vitamin D and hand washing is my choice now.
I even removed my silver tooth fillings. I feel much better. (I don’t drink fluoridated water anymore either.)

Take a look first, and decide for yourself.

How Mercury Destroys the Brain – University of Calgary 4-1/2min
http://www.youtube.com/watch?v=BtFsy0rQsak

Smoking teeth = poison gas
http://iaomt.org/videos/ 8-1/2min

National Vaccine information center
http://www.nvic.org/

Government Scientists Hide Vaccine/Autism Link 7-1/2min
http://www.youtube.com/watch?v=rE8kmifM6HU

Whats in the Vaccine Shots 11min
http://www.youtube.com/watch?v=hwgjODMU2FY

In Lies We Trust Part 1 of 16 (it’s 16 parts put worth the time)
http://www.youtube.com/watch?v=8df9-oADP_c&feature=related

Mercury, Autism and the Global Vaccine Agenda 1:32min
(Just how much mercury?, at ~4:57 to ~7min. The rest is informative!)
http://www.youtube.com/watch?v=yg6acKwdnqM&playnext=1&list=PLD4B2BB571AFCCF9F&index=83

Decide for yourself. But make sure you are informed first.

#242 Mike B on 01.06.11 at 6:49 pm

Dear Mr Harper

When is your first solo album coming out on iTunes? I will put it in my folder with Vincent Price Monster Mash and Lucy in the Sky with Diamonds sung by that velvet throated thespian Bill Shatner. Aren’t we all so proud to be Canadian?

#243 garth fan on 01.06.11 at 6:51 pm

#172:

saw the same article in the toronto star recently:

http://www.moneyville.ca/article/917037–canadian-housing-prices-set-to-rise-in-2011

is this article author-less, or is it my imagination?

i guess it’s not surprising no one wants to own up to actually penning this fraudulent, propagandized tripe.

also, the embedded (and only) “royal lepage” link is deviously clever–even Bernaysian.

#244 Devil's Advocate on 01.06.11 at 6:56 pm

#209 Vancouver_Bear on 01.06.11 at 3:48 pm

30 Devil’s Advocate on 01.06.11 at 12:20 am
No this realturds will not learn anything….if FTB are priced out who will buy then? Right….NOBODY.
Think about it then post.

Oh I understand that VERY well. Just because First Time Buyers currently represent better than 25% of the market does not mean that can’t change. Certainly if they do change the mortgage rules it will and in a hurry. But Bear, do you understand how quickly that will negatively multiply through the economy… Whether we need it or not a too rapid correction is not a good thing. But most concerning is that First Time Buyers are a very big influence on the economy… more so than most any other I would suggest. Those downsizing generally are buying for cash and disposing of furniture and appliances. First Time Buyers are patronizing a whole lot of business in their purchase. It’s not just the REALTOR who earns money off a First Time Buyer.

#221 Devore on 01.06.11 at 4:41 pm

#145 Calgary REality
But I have to applaud “Devil’s Advocate” for coming on here and voicing his opinions as a realtor, that does take balls.

Until he posts his name, all it takes is an ego.

You can trust that I shall remain an anonymous contributor.

And no in anonymity it takes no balls what-so-ever… a bit of a thick skin at times and a heap of patience. Hey what can I say… I am but a humble servant of the people. ;-)

#224 Renting in Sherwood Park (formerly Edmonton) on 01.06.11 at 5:03 pm

I guess the lack of Devil’s Advocate response to my post #152 means realtors do in fact range in being paid between $185/hr and $325/hr.

#152 Renting in Sherwood Park (formerly Edmonton) on 01.06.11 at 11:52 am

Devil’s Advocate i understand you are defending your profession as most would do of their own. And of course some of the comments here are harsh on both sides of the table but explain to me this.

I had told you a couple of days ago that i would have to pay $13,000 commission for the sale of my home. Can you tell me what things the selling realtor and buying realtor does behind the scenes that make the $6,500 worth my cost?

Now i know that there are brokerage fees as well. What are they? Is it per transaction? Does ReMax for example take $1,000 of the $6,500?

My buying realtor will come out for a so-called free evaluation which of course is part of the $6,500. Then he writes the mls ad, takes pictures, places the ad, puts a lock box on my door, may or may not have an open house, may or may not show my house (why would he or she since there is a lock box for the buying realtor), writes up counter offers, delivers and picks up written offers.

I calculate about 1 hour for the ad, 1 hour for the pics, 1 hour to drop off a lock box, assume 10 hours for an open house although most agents i talk to don’t do this or get one of their “other” agents to show the home, the other stuff maybe 5 hours. That’s 18 hours + 2 hours for photocopying, paperwork, etc. $6,500 / 20 hours = $325 /hr.

The buying realtor searches the mls system for homes. He or she probably drives people to show houses more than anything and let’s say 20 to 30 houses = 30 hours conservatively. Of course this varies but if the buyer generally knows what they want, i’d assume 30 houses is plenty so let’s say 35 hours so $185 / hr for the buying realtor.

Are my facts straight with the above? Correct me if i’m wrong.

Thanks.

Sorry didn’t see your post to me. I do have a life, believe it or not.

I really don’t have enough time to address that rather involved line of questioning as it is not nearly so simple as you think. There are REALTORS who do very well and there are those who do very poorly. For what it’s worth the average REALTOR earns about $30,000 taxable as I recall. Do they work 100 hours, 1,000 hours or 5,000 hours on average in a year to do it I don’t know all I know is what I do. I’m paid well but I am worth it. ;-) If I wasn’t they wouldn’t pay me what they do. Simple as that.

What you can look forward to is reduced costs in the future as there are some changes taking place which will ensure it. None the least of those changes is upfront contingency fees. These fees will be deducted from the commission due at completion on a successful sale. For those not so well let’s just say the successfull buyers and sellers will no longer be subsidizing the hobbies of the unsuccessful.

#146 Junius on 01.06.11 at 11:45 am

#67 DA,

You said, “You all are waiting with bated breath for a total annihilation. Sorry, I forgot who I was talking to. I for a moment thought YOU were the ones with the conscience. I thought YOU all had the best interests of the Canadian economy at heart.”
Oh, please. You know better. For every doomer here there are a dozen or more people who are very concerned in the Canadian economy and do not want to see it crumble.

Our fundamental belief is that the current economy is based on a ponzi scheme of excess credit and easy money that must and will come to an end – one way or another. Otherwise the long term pain will be greater and the prospects for real recovery further away.
It is not about Real Estate. It is about how government policy became about cheap credit and excessive risk for the average Canadian. Inflated Real Estate is just a manifestation of the underlying policies. So is the damage that has and will be done to the middle and lower income classes. It is the political and economic issue of our times.
What most of us realize is that this is simply unsustainable and has been for a long time. Better to get it over with and move on then keep throwing fuel on the bonfire of debt.

The only question is whether our government is smart enough or more likely is moral enough to start making the appropriate changes to bring the excesses down. I am betting no based on previous behaviour but hope I am wrong.

Came across your post when reviewing the one above… Ya know Junius we almost have a consensus of opinion between you and I here. Now if you would actually admit that it’s not all REALTORS fault we would really be making some headway.

#245 Steven Rowlandson on 01.06.11 at 6:57 pm

Garth unless the government is corrupt I don’t see why the government needs to cater to anybody. If special interests think they can give orders to the government and get away with it then there is only 2 places to send the usurpers and corrupters.
1. The chain gang.
Or
2. A place in front of a firing squad.
Any other way and you have the world as you know it.

Steven

#246 Chris in Langley on 01.06.11 at 7:09 pm

I love it!

I never even mentioned his name, and yet he answered to “the villiage idiot from Kelowna.”

Tells us more about your 50 something wife and how she looks like that early 20’s chick in battle gear from a couple weeks back!

#247 Junius on 01.06.11 at 7:20 pm

#243 DA,

You said, “Now if you would actually admit that it’s not all REALTORS fault we would really be making some headway.”

When did I ever say it was the fault of REALTORS (or the lower case kind)?

I don’t put the blame on bank workers, mortgage brokers or realtors. Some of my best friends are realtors (even a few that are delusional). My mother is a realtor! However I have no time for the “greaterfool baiters” like our pal Mickey here.

I do blame the Banking cartel, the heads of the Financial services industry, the Re mafia and, of course, our politicians.

I am not a “few bad apples” kind of thinker. I believe Bush and Cheney should have fried for Abu Ghraib and that leadership comes with responsibility.

Wonder if we will ever have any.

#248 CrowdedElevatorFartz on 01.06.11 at 7:22 pm

@#220
Nosty….
When the headlines read “Food Riots in Alberta”
Then I’ll take notice.
Sorry , but Algeria is just a tad too far off my radar to matter.

#249 Devore on 01.06.11 at 7:28 pm

#244 Steven Rowlandson

Garth unless the government is corrupt I don’t see why the government needs to cater to anybody.

The government needs to cater to the people they represent. Unfortunately, for the federal government that means everyone, and we know that is impossible, so they cater to those who scream the loudest.

#250 realpaul on 01.06.11 at 7:48 pm

Oh Oh….another ‘obscenely negative’ factoid I’ll call….”Your lender, realwhore and mortgage broker ar misleading you with flim flam math points they know you don’t understand.

The real whore , mortgage broker and banker all know that when you’ve got your little honey beside you with a pen in your horny hand that you don’t understand wht the hell a ‘payment ratio’ is. They count on the primal respones that you’re going to man up and buy the little lady a nest to swaddle…..and thats when they screw you both. Here you go….hold your pecker…it’s ugly.

Scenario:

1) Loan amount of $400,000.00 amortized over thirty years at 6% interest rate. The interest rate of 6% is only true if you pay off the loan in the first year, or you take the mortgage for the entire thirty years and the interest rate never changes and no additional money is added to the mortgage.

But remember you are paying over 30 years. The amortization schedule allows the mortgage companies to front load the interest so they can earn approx 80% interest every month on your mortgage payment in the first 5 years. The mortgage company want you to think they are charging you just a little interest !

Compare Mortgage payment Ratios over a five year period:
For example: Loan amount $400,000.00 term 30 years interest rate 6% monthly payment $2379.29.

. Total principle paid over a 5 year period divided by total payments paid. This amount went to pay down your loan

Total principle paid / Total payment x 100 = Percent,
$28551 / 142755 x 100 = (20%).

Total interest paid over a 5 year period divided by total payments made over the 5 year period your lender’s profit.

Total interest paid / total payments x 100 = Percent.
114204 / 142755 x 100 = (80.0 %)
Your lender’s profit 80% of your mortgage payment every single month

2) Mortgage Interest Calculations
Mortgage Amount $400,000.00
Interest Rate 6.00%
Term 360 Months Monthly payment $2,379.29

You are going to pay $856,544.00 for a $400,000.00 house.
You will have to earn $1,427,574.00 Gross Income if you are in a 40% tax bracket
You will have to earn almost one and a half million dollars in gross income to payoff a $400,000 house !

The Cost of Borrowing Money.
Payment ratios are more important than the interest rate. Payment ratios defines how much of your mortgage payment is going to interest to pay the lender, and how much of your mortgage payment is going to principle to pay down your loan balance.

The banks have over played the “fixed” interest rates. Remember, they are constantly changing and every time the interest rate is different at your renewal time it will affect your payment for the next term; higher rates – you will pay more…
The banks just wants you think you are paying a little interest. They don’t want you to know the payment ratios, and more importantly the REAL COST OF BORROWING THEIR MONEY.

Still feeling that ‘stiffy’? ‘Cause if you signed up for a 5/35 its much much worse than you can imagine. Good thing that math wasn’t your strong point when you signed that offer the sleaze ball real-tard put in front of you. Dumb is good…’cause you don’t want to think about him getting his money in 30 days when its going to take you 35 years to get yours. That would be ‘obscenely depressing’.

#251 Nostradamus Le Mad Vlad on 01.06.11 at 7:51 pm


#232 GregW, Oakville on 01.06.11 at 1:17 pm — Anytime Greg. You are correct, ‘tho — our Civil Liberties and rights are being eroded even as we read Garth’s blogs and comments.

This is why a change in govt. is necessary; it won’t help us fiscally, but it will give Cdns. renewed hope to take charge of our own country, because right, we’re being sucker-punched into a corner.
*
Holy sheep shit, comments are already in the 200’s and it’s only lunchtime here. But first, we zoom now to a crief but britical updayt of the worldwide equonomee. No verbals are necessary!
*
#52 dark sad person — “F’s been monitoring this sh-t show since the start and still thinks we’ll skate -”

Somewhat disagree, as C-F-H are working in collusion with Bernanke, Paulson (GS), Geithner etc.; they already know we’re finished as a first-world authority and are waiting for events to unfold, hiding behind the misleading headlines of the controlled m$m.

The one event Cdns. can prevent is a majority CPC govt. That, above all, is the one needle in the haystack we can use to our advantage. The CPC may receive a smaller minority, but at least they won’t have total power. That would be disastrous.

#58 Kevin — “CREA has just played their hand, while the Big Banks and MC have already played their hands a couple of weeks ago.”

That’s how to keep the masses brain dead and off balance. If all these announcements came out within two or three days of each other, people would make a connection.

But these announcements are staggered so that sheeple have forgotten what was said a few weeks ago, and thus can’t connect one with the other; this is why minority govts. exist.

#66 Basil Fawlty — “. . . see how you could possibly shut off the paper spigot without causing a depression, the likes of which would make the 30’s look like a picnic.”

An apt description, the only major difference now is there are a helluva lot more people in the world than there were then.

#100 Utopia — No trouble. It’s better known as “Handbags At Dawn” or “Bridge Under Troubled Waters.” Good link as well and I’ve joined his e-mail list.

#118 T.O. Bubble Boy — “Let’s hit 300% home ownership!!! GO CANADA GO!”

Well, we were 3-0 up against the pesky Russkies and they won 5-3, so we may just as well lose The Full Monty here!

#121 tony w — “Or purposefully misled. — Garth”

CREA and C-H-F are masquerading as politicos. Underneath, they are lying, stealing slimeballs. Anyone else care to add to this description?

#165 eddy — Correct, but how many will ever know it? The ‘royal’ family (inbreeding) is one aspect of the elite, but the western cycle has almost finished now — that’s why they are scrambling to set themselves up nicely.

#176 David B — “. . . “F” cares about those who will not be able to afford their homes in a year or two?”

C-H-F don’t give a fat rat’s ass one way or the other, which is why the CPC must be stopped at all costs from getting a majority.

See #165 Eddy’s post — it is a fraudulent and viral economy we’re in.

#210 Drake — “BTW, the reason those birds are falling from the sky is the release of gas from along the Mississippi fault line. Bye bye middle America.”

Indeed. What if the SAF and NMF dance in tandem? That is an excellent choice for depopulation! No more SS to pay, empty ‘burbs gone — efficiency of the highest order!

#220 Nostradamus jr. — “Food Riots in Algeria.”

Well underway, but increasing world wide.

#252 Mr. Plow on 01.06.11 at 8:01 pm

#229 edmonton mortgage broker…

I love how you paint yourself as so honorable dolling out 0/40 mortgages cause you have to feed your family. And then out the other side of your mouth you call realtors – realturds.

Guess what? You are no less honorable than they are. At least man up and admit that you made money off of these buyers. There is nothing wrong with it, you didn’t force a pen into their hands to sign, they are grown ups they are responsible for themselves.

But please, don’t act like you are any better than a realtor in this case.

Pot Kettle Black

#253 smw on 01.06.11 at 8:03 pm

How about another $75 billion to the banks to keep this real estate bubble going? Funny they(banks) are pushing for changes after the cheque has been cashed.

F preaching free markets and telling the banks they should be regulating temsleves after giving them a big hand out to help propel RE GDP(20%);he also manipulated an already socialist housing policy to garnish votes.

Capitalism AND democracy in action…

#254 commission salesman on 01.06.11 at 8:10 pm

#224 Renting in Sherwood Park (formerly Edmonton)

Don’t know DA and not involved in the real estate game but I’m intimate with commission sales. Your numbers may be correct; the part I think you are missing is unless there is a sale, all the time and money spent by the agent on a deal is lost. Commission sales people accept that risk in return for a greater reward when a deal is completed. We think we are doing a pretty good job if we get 25% of the construction projects we work on (wood window supply) so the fact is that one sale in four has to also compensate for the three lost ones.

#255 dd on 01.06.11 at 8:10 pm

.#161 Nostradamus jr.

…R E Prices to keep rising plus Canadian Loonie Appreciating….

But not the 50% increase that you predicted in a year.

#256 Cookie Monster on 01.06.11 at 8:12 pm

From the article posted by Greg in Oakville.
http://www.infowars.com/a-nation-of-truth-rejecters/

“Truth demands the virtue of honesty, because honesty requires that information be objectively analyzed and studied; it requires that personal prejudices and proclivities be set aside; it requires that humility replace pride, which allows one’s opinions and conduct to change in the face of truth.”

Garth, I think this is why you refuse to acknowledge the significance of gold as money. You’re not open to objective reconsideration of your long held views of the current FIAT system, you fail to see it’s faults, you have drank the ultimate cool-aid in the grand scheme of things! Money.

A gold standard is about honesty. Nothing else. Anyone who advocates against a gold standard is by default an advocate for economic dishonesty. Money is the lifeblood of economics via the division of labour, global trade would be greatly simplified with a sound money system, dilution of this vital life blood will eventually kill the anemic patient, our current economy by rendering it weak are primed for a strong autocratic leader. Hello Hitler!

#257 dark sad person on 01.06.11 at 8:13 pm

Informed sources in New York last night were suggesting that the main ‘smoking gun’ in the stolen Bank of America files in Wikileaks’ possession is “the creation of fraudulent loans ready for repackaging on a massive scale”. During the US housing bubble, most top banking firms either repackaged or sold on sub-prime loans for slicing into deliberately indecipherable credit swaps. But very few have been fingered for knowingly doctoring loan forms – and to date nobody has been charged with falsification as a company policy…where the evidence consists of an electronic record.

Julian Assange is a control-freak and nascent megalomaniac, but he is also a very sharp cookie. Rumours are circulating around the edges of his Barmy Army that the self-styled Messiah has been biding his time, aiming to hit Bank of America with a cast-iron charge just when CEO Brian Moynihan least needs it.

http://hat4uk.wordpress.com/2011/01/05/wikileaks-missile-to-show-fraudulent-boa-loans-on-massive-scale/

**************
I normally don’t put much stock in “informed sources” but considering what’s surfaced in the last few days-any doomer even guessing the depth of corruption in these scum run Banks-will probably be considered an optimist when it’s all finally laid bare-

So-will they pull the same sort of Swaparama with the Fed like they just did with FNM where in the end BOA paid 1 cent on the $ and the US Taxpayers paid 99 cents?
But the American people were too zoned out on their favorite pass time-living free in a foreclosed houses watching reality TV and munching triple Cheezeburgers courtesy of SNAP to understand-yet another Bank bailout happened-right under their noses-

#258 robert James on 01.06.11 at 8:20 pm

OMREB have put the Dec. 2010 numbers out for the central Okanagan. Average price Dec 2010 was $462,527 Medium price was $418,750 At the peak of the market in April 2008 the average price was $552,830.87 and the Medium price was $494,500… It looks like a great time to buy.. May I suggest giving DA a call and buy something before you are priced out forever!! http://www.omreb.com/files/12%20-%20CO%20Statistics%20December%202010.pdf

#259 BDG-YYC - on 01.06.11 at 8:22 pm

#220 Nostradamus jr. on 01.06.11 at 4:38 pm
Food Riots in Algeria.

..Just the begining folks….the Safety of our Western Provinces will become more evident over time w/ other World Starvation Events.

Interestingly … about 2/3 of the Oil that Ontario and Quebec import from offshore comes from …. ta-daaaa … ALGERIA ! Good thing its not a big deal as they only import … ta-daaaa … about 2/3 of thier oil consumption from offshore. Yup Ontario about 50% and Quebec 90%. Nice stable Algeria ….

#260 Sail1 on 01.06.11 at 8:25 pm

I guess the vultures can fly south to Florida, if the article happens to be correct on their survey.

A new survey says Canada’s real estate market is heading into a stronger-than-expected year that will likely see home prices steadily rise, while overall transactions moderate.

http://www.moneyville.ca/article/917037–canadian-housing-prices-set-to-rise-in-2011

#261 Leanne on 01.06.11 at 8:26 pm

Did anyone see this today?

Package of 58 Flint, Michigan houses for sale on eBay – http://goo.gl/AKbNu

eBay link: http://goo.gl/jfLqT

Vultures beware.

#262 robert James on 01.06.11 at 8:28 pm

Sorry,, those prices were for residential houses.. Cheers!!

#263 Junius on 01.06.11 at 8:28 pm

#145 Calgary Re,

You said, “I have to applaud “Devil’s Advocate” for coming on here and voicing his opinions as a realtor, that does take balls.”

And here I thought we should be applauding his outdoorsy lifestyle combined with his improving Ipad skills.

#264 jess on 01.06.11 at 8:33 pm

Are these advisors paid by salary or by consulting fee

David Wolf, will join the Bank of Canada
as Adviser on 1 June 2009.
=====================
In an address last month on behalf of a deputy governor, Bank of Canada advisor David Wolf dismissed talk of a housing bubble in Canada as “premature,” warning that calls for higher interest rates now in an effort to temper real-estate markets would be akin to “dousing” the economic recovery with cold water.
===========================
This was 2008
“It may just be a matter of time before the Canadian housing market tanks like the U.S. market did, Merrill Lynch Canada economist David Wolf said, warning that Canadian households are now nearly as overextended as households in the U.S., and even more so than those in Britain, prior to the bursting of the housing market bubbles in those countries.”
============================
Recent house price increases do not appear to be out of line with the underlying supply-demand fundamentals,” David Wolf, an advisor to the governor, Mark Carney, said in prepared remarks.

#265 Vancouver_Bear on 01.06.11 at 8:39 pm

#220 Nostradamus jr. on 01.06.11 at 4:38 pm
Update your geography DB or use google for god’s sake….Algeria is not in North or even South America. I do not see any affect on North or South America. On Contrary the situation with cholera in Haiti can affect us if it goes uncontrolled and spreads here….No one will be safe even on north shore.

#266 boomer62 on 01.06.11 at 8:56 pm

Garth,
Here’s a photo for tomorrow’s post.

http://www.funny-games.biz/pictures/1258-sponge-bob-boobies.html

Cheers

#267 Peter Schiff Fan on 01.06.11 at 8:59 pm

Garth…please ban GregW, Oakville……..he’s an idiot!

Thanks for your daily blog. I’m currently renting and battling friends and family on staying as a renter. Your blog is my daily salvation from this lunacy.

Cheers

#268 Daisy Mae on 01.06.11 at 9:15 pm

RE Sales in the Okanagan are down 34-37% over 2009….

#269 GP girl on 01.06.11 at 9:21 pm

I think it’s started.
MLS site number of property listings top of the search page.
Jan. 3rd = 163,714
Jan. 4th = 164,047
Jan. 5th = 165,438
Jan. 6th = 166,736

Last two days are 1344 avg each day. If that pace continues that’d be around 320,000 properties by the end of April.

#270 Nostradamus Le Mad Vlad on 01.06.11 at 9:25 pm


15:13 clip ‘Tenshun — FF time! Things are heating up.

Elites Again While we’re sinking, they are openly showing their plans.

The Toilet is still a fairytale. See prior link, put two and two together, add a few good Muslims to blame and bingo!

Unemployment “Now that the Holiday scamming shopping season is over, all those temporary retail workers are being let go. Many permanent permanent workers are getting pink slips.” wrh.com.

Utah “Since its inception in 1913, the Federal Reserve Note (“U.S. Dollar”) has lost 96% of its value through a steady (and sinisterly mis-reported) inflation.”

3:48 clip Chain store closings. As usual, no m$m coverage at all.

Joke Of The Day “In other news, Al Gore emerged from hiding to denounce the damage to the Earth’s magnetic poles caused by blogging, in particular the website wrh.com which draws so much traffic from around the word that the signals racing along the wires across the globe is shifting the Earth’s magnetic poles, which in turn accelerates global warming, killer bees, chemtrails, HAARP, and waxy yellow buildup in the corners of your kitchen floors!” wrh.com. There is more, best left unsaid!

WH sellout to BP BP get off almost scot-free.

Civil Unrest in UK.

Baltic Dry Index “Now that Christmas is over, the indicators for 2011 plunge!” wrh.com.

Eurozone “Telegraph columnist Roger Bootle tells Robert Miller why the eurozone faces a ‘rolling debt crisis’ for years to come and why a break-up is now ‘more likely than not’.”

45:37 clip “F. William Engdahl has gone on the record exposing the Wikileaks fraud. Wikileaks is being used to shut down and/or a control the internet.” Courtesy Soros – CIA – zionists, who set WL up in the first place.

5:34 clip “The last official act of any government is to loot the nation.” wrh.com. Banxters get US$90 bln.; workers laid off.

GC failed, so now it;s “End Democracy” time, a.k.a. a New World Order of which C-H-F are up to their eyes in it.

Pic Of The Day GW again.

Double Eclipse Far out, toots!

#271 jess on 01.06.11 at 9:30 pm

Re re method madness

The popular deals are known as “re-remic,” which stands for resecuritization of real-estate mortgage …

http://blogs.reuters.com/felix-salmon/2010/12/16/rating-structured-bonds-is-impossible/

A $30bn re-Remic rating ‘error’ from S&P. Posted by Tracy Alloway on Dec 16 09:20.

http://www.propublica.org/thetrade/item/the-trade-credit-rating-agencies-standard-and-poors/

=========

Here’s the problem: Credit rating companies have long contended that their conclusions are protected by the First Amendment, much as if their ratings were as irrelevant to the markets as, say, your average financial column. Dodd-Frank tried to change that, designating the agencies “experts,” just like lawyers or accountants, when their ratings were included in S.E.C. documents for certain kinds of offerings. That would make them liable for material errors and omissions in their ratings.

But the agencies revolted. They refused to allow their ratings to be used in offering circulars, freezing up the markets. Panicked, the S.E.C. immediately suspended the rule for six months, pending more study. Then in late November, the SEC extended the delay indefinitely [5].

============

Implementing the Dodd-Frank Wall Street Reform and Consumer Protection Act — Dates to be Determined
The following activities are being deferred due to budget uncertainty. Additional information will be provided upon adoption of a 2011 FY budget.

http://www.sec.gov/spotlight/dodd-frank/dates_to_be_determined.shtml

#272 Devil's Advocate on 01.06.11 at 9:46 pm

#245 commission salesman on 01.06.11 at 8:10 pm
#224 Renting in Sherwood Park (formerly Edmonton)

Don’t know DA and not involved in the real estate game but I’m intimate with commission sales. Your numbers may be correct; the part I think you are missing is unless there is a sale, all the time and money spent by the agent on a deal is lost. Commission sales people accept that risk in return for a greater reward when a deal is completed. We think we are doing a pretty good job if we get 25% of the construction projects we work on (wood window supply) so the fact is that one sale in four has to also compensate for the three lost ones.

And how are you compensated for all the hard work you put into the jobs you did not get? You charge higher fees to those customers you do get. Is that fair? Of course it is not.

What I do is I don’t go after the crap that will waste my time. I don’t take listings which will never sell. I don’t take on clients who are going to demand too much of my time that I neglect my other clients. I am paid well for what I do by virtue of doing a better job and charging the same as my less apt competitors.

Soon we will have contingency and that will level the playing field all the way around. In the interim I am making hay while the sun shines so to speak. Hey, my clients get better service I get paid well and I don’t have to bend over any greater fools in the process. Beautiful world…

#273 McLovin on 01.06.11 at 9:54 pm

Average price Dec 2010 was $462,527 Medium price was $418,750 At the peak of the market in April 2008 the average price was $552,830.87 and the Medium price was $494,500.

Wow DA, maybe things are as bad as we think?
I’d say a 15% drop from the high is pretty bad especially considering the market is no bid and dropping fast.

Funny these numbers look quite different than the ones you posted a while back.

Kelowna is ground zero for the crash. In fact, I wonder how many other places in Canada are down this much?

#274 Devil's Advocate on 01.06.11 at 9:57 pm

#254 Junius on 01.06.11 at 8:28 pm
#145 Calgary Re,

You said, “I have to applaud “Devil’s Advocate” for coming on here and voicing his opinions as a realtor, that does take balls.”

And here I thought we should be applauding his outdoorsy lifestyle combined with his improving Ipad skills.

That too… I’ll take whatever I can get.

#275 Joe Q. on 01.06.11 at 9:59 pm

#242 garth fan on 01.06.11 at 6:51 pm: “saw the same article in the toronto star recently: http://www.moneyville.ca/article/917037–canadian-housing-prices-set-to-rise-in-2011 is this article author-less, or is it my imagination?”

It is a press release from Royal LePage, most likely. Actually, if you read the details about this “survey”, it’s actually a survey of Royal LePage agents!

#276 GregW, Oakville on 01.06.11 at 10:10 pm

Hi #257 Peter Schiff Fan, re: Your blog is my daily salvation from this lunacy.
Glade to here you enjoy Garth’s blog as many do.
You may recall PM H tried to shut him down at one piont. I even recall some have refered to him as you have to me. If you find no value in my posts just skip them. ;)

#277 bullion.bunny on 01.06.11 at 10:14 pm

Baltic Dry Index in free fall……..$1544, One more down day and look out below…

http://stockcharts.com/h-sc/ui?s=$bdi

#278 Dale in TO on 01.06.11 at 10:19 pm

‘risks causing a housing correction’

Dahhhhhhh …. tat I saw a putty tat!!!

At one time I thought I might become a realtor but I wasn’t stupid enough!

=====================================
#255 jess

Are these advisors paid by salary or by consulting fee

David Wolf, will join the Bank of Canada
as Adviser on 1 June 2009.

=====================================

Economist definition …. a person that talks out of both sides of their mouth with one foot still firmly planted inside.

Fricking boneheads!

#279 Utopia on 01.06.11 at 10:27 pm

#179 prairie gal

I’m surprised that the economics weenies on this board have not communicated to F the obvious benefit of lower home prices as a competitive advantage for Canadian industry.
———————————————————

Its “Wieners” dear. Please us the official title and capitalize it. Mister Wiener is also ok.

#280 throwstone on 01.06.11 at 10:31 pm

Recently met some friends of friends, young folks too 23,24, 26 to be exact all just bought houses!

One dude bought 2!

When is re/max going to start recruiting the clients right out of highschool?

Pathetic.

#281 GregW, Oakville on 01.06.11 at 10:38 pm

Hi Garth, fyi article

Leaked document: EPA knowingly approved bee-killing pesticide
http://www.infowars.com/leaked-document-epa-knowingly-approved-bee-killing-pesticide/

(No bees we all have alot less choice and food, and what else is being allowed on and in our food?)

#282 Utopia on 01.06.11 at 10:46 pm

.#148 Devil’s Advocate

“Dang… if only there truly was a sarcasm font. These peoples sense of humour is about as flat as piss on a plate”
———————————————————

Sorry about that Devil. I did think you were serious at first but knowing you a bit better lately I accept you were just trying to wind up the dawgs a bit.

#283 S.B. on 01.06.11 at 10:53 pm

Anyone who emails F will end up on the No-Fly List… :(

#284 GregW, Oakville on 01.06.11 at 11:02 pm

Hi Garth, fyi article
First it gets in the plants, the food we eat. Then released in pollen and nectar to kill pests and it seems bees. What else is being allowed to get into our food?
Loose the bees and loose types and quanty of food for us all!!! What are they thinking or are they?

Leaked document: EPA knowingly approved bee-killing pesticide
http://www.infowars.com/leaked-document-epa-knowingly-approved-bee-killing-pesticide/

#285 Casey Serin on 01.06.11 at 11:06 pm

You can never go wrong on real estate. Listen to the experts in the paper and on TV. The pretty cougar RE agent with too much botox and fake tits told me so.

CS

http://www.caseypedia.com/wiki/Casey_Serin
http://en.wikipedia.org/wiki/Casey_Serin

#286 throwstone on 01.06.11 at 11:16 pm

Hey Garth,

Your right about that power to tax statement you made awhile back.

Do you think the Government will tax lottery winnings?

#287 dark sad person on 01.06.11 at 11:22 pm

#269 jess on 01.06.11 at 9:30 pm

But the agencies revolted. They refused to allow their ratings to be used in offering circulars, freezing up the markets. Panicked, the S.E.C. immediately suspended the rule for six months, pending more study. Then in late November, the SEC extended the delay indefinitely [5].

****************
Certainly can’t shine a light on Government sponsored Rating Agencies-they’re a proven wing of GS et al and their track record proves they’re a completely useless data point for Investors and for maintaining integrity and trust in the Paper and Corporate Market-

http://2.bp.blogspot.com/_nSTO-vZpSgc/S3CYs-asdrI/AAAAAAAAH0k/NVwMD2p30QQ/s1600-h/eneron.png

http://2.bp.blogspot.com/_nSTO-vZpSgc/Rme_DHvw2jI/AAAAAAAAAz8/lDcBhPMv85E/s1600-h/MBIA-1.png

#288 Wildroseblogger on 01.06.11 at 11:31 pm

#213 Two-Thirds

According to the article you reference, the average price dropped 2.5% year over year, not month over month. However, numbers directly off the EREB actually show median house price (which I believe to be a more accurate indicator of the market) dropping 3.9% year over year, AND 3.9% month over month (Median price Dec 2009- 350.5k, Nov 2010 350k, Dec 2010 336K). Don’t expect price depreciation of this rate to turn into a trend, though. I’d say there is a small but remote possibility of Edmonton falling by 15% by the summer. Maybe that much over the next two years if it even goes that low. Edmonton’s median price is already down about 15% from peak in 2007; I think you’ll see serious resistance starting around 300k median price if not before, which means a further decline of about 11% from where it is today. However, as I’ve said above, just because we see a floor appear sometime in 2011-2012 doesn’t mean we’re about to ride the Sine curve up again. We’re probably in for a prolonged period of price melt, or at the very least a bottom followed by prolonged price stability.

What’s really funny, and maybe just a result of some new-years web maintenance (then again, maybe not), the Edmonton housing stats for each month of 2010 are no longer available on the EREB website. You can still get 2009’s, and in the quarterly reports you can get average and median prices for all residential types combined going back to the 1960’s, but you can no longer find anywhere on there site stats for SFH’s for the past 12 months, which used to be standard on their sidebar. I had to use Google archives to dig the info up. I guess no one wanted to admit median prices took a 3.9% dive in a month.

#289 realpaul on 01.06.11 at 11:32 pm

#252 smw….75 billion seems to be the magic number on P Hill these days. The latest was the 75 billion in ‘reserves’ that was posted this am….the press….fuckwits that they are totally missed it or……doesn’t want to print what they know their biggest advertiser wouldn’t want the general public to know.

A 75 billion increase in US reserves means that our friends down at the BOC have just sold short the $C in exchange for US cash to push the rising $C down. Because the USD is in freefall any losses have to be picked up by the taxpayer.

I know Garth doesn’t want me outing the civic servants for reasons of his own….. so I’ll just say “Thanks” to the BOC for loading my kids up with more debt.

Wanna guess how many $C your government has pissed down the hole to keep your dollar in the toilet? Why don’t you look it up? If figures in the half trillion area are an unhappy place for you …then don’t go there.

While we’re on the topic of productivity….why is the government trying to stop our industries from re-tooling? I mean….do you like woring for the lowest wages in the G7?

And BTW with all the angry responses I’ve had for outing the various pigs in our society…this is the first time the subject of merit based pay has raised such an ugly reaction. Out here in Van-Poo-Ver ( I call it that because we still pour 800 liters of raw sewage effluent into the ‘pristine waters of English Bay everyday despite Federal government sanctions agianst the practice) the subject of merit pay for teachers was brought forward and the airwaves lit up with wave after wave of hatred for any who dared speak out….Interesting…..not.

#290 realpaul on 01.06.11 at 11:35 pm

sorry thats ‘800 MILLION LITERS’ a day.

#291 Devil's Advocate on 01.06.11 at 11:41 pm

#271 McLovin on 01.06.11 at 9:54 pm

Average price Dec 2010 was $462,527 Medium price was $418,750 At the peak of the market in April 2008 the average price was $552,830.87 and the Medium price was $494,500.

Wow DA, maybe things are as bad as we think?
I’d say a 15% drop from the high is pretty bad especially considering the market is no bid and dropping fast.

Funny these numbers look quite different than the ones you posted a while back.

Kelowna is ground zero for the crash. In fact, I wonder how many other places in Canada are down this much?

My numbers are real. They were pulled directly from the MLS. They are not some regurgitated numbers presented any manner but their purest. I would gladly sit down with Garth and pull them from the MLS with him as witness to the integrity of them.

I have reviewed these numbers and I do not dispute them but they do vary from mine for one reason or another. I will check it again as that is my business. I do that on a regular basis (every friggin day). You can believe me or some interpretation of those presented. Again I will verify both. But as I recall my numbers were annual not month over month.

And WTF… you all don’t accept anything that does not suit your agenda anyway, so frig it… go find your own friggin numbers.

I could give a rats what you believe or misinterpret really isn’t going to affect my life one iota. Your mileage may differ.

Oh bother I must prove you wrong

April 2008 the Average Price of the 270 Single Family Homes sold in Central Okanagan Divison was $596,875 for the month (does not include condos).

December 2010 the Average Price of the 96 Single Family Homes sold in Central Okanagan Divison was $513,487 for the month (does not include condos).

I can not access medians from this point in the system without exporting them to an Excel Spreadsheet and doing the calculation and that would be a manipulation you would not accept.

As for those above numbers they do suggest you are grossly misinformed in addition to the fact that to compare a “peak” month at the “peak” of the market to a “trough” month (April against December) at the “trough” of the market (2008 against 2010) is a gross error in itself. Your logic there-in sucks as fatally flawed. A year over year comparison is what you ought to be comparing if not at least similar months.

Of course I can well appreciate and understand that you will think I just pulled those numbers out of my ass. Were that the case I most certainly would have fabricated some numbers which better supported one or another of my long standing arguments don’t you think. Those are the numbers straight from the Okanagan Mailine Real Estate Board Matrix MLS System. Believe it or not – your choice.

Now really, WTF would I care what you people believe or not. I have said repeatedly we work with what the market gives us we can’t influence it that is Mark and “F”s job not mine.

#292 richard kovacs on 01.06.11 at 11:56 pm

Great posts Garth. Today I heard on the radio that Vancouver property prices will hold steady this year and increase by 3 per cent lol. A realtor I spoke to recently said as long as 1000 people keep moving to the lower mainland each week prices will continue to rise. I guess that’s the realtors new excuse now the olympics are long gong ! Cheers.

#293 Utopia on 01.07.11 at 12:20 am

Nostradmus Le Mad Vlad

“#100 Utopia — No trouble. It’s better known as “Handbags At Dawn” or “Bridge Under Troubled Waters.” Good link as well and I’ve joined his e-mail list”.
———————————————————

You liked my article! You just made my day. You might need to explain what “handbags at dawn” means though. That is a new one to me.

Now, regarding todays news from Garth. I think that CREA actually has a few good points. In fact, at this stage of the game just about any action by the Government would be enough to tip the balance in favour of a major housing correction. While I agree the insanity must stop I would never want to be party to any decision that craters the markets. This is a time for extreme caution by those in power when formulating changes to new policies.

As Garth sagely pointed out the other day, even a sneeze in this market will put thousands of young buyers into negative equity.

What I see as a major problem is that the Government (and Flaherty in this case) keeps telegraphing their intentions to the public. This kind of communication always has the same effect. Prospective buyers worry that they are going to miss out on the last big opportunity to get into a home at low interest rates and therefore demand is brought forward.

I can only assume this is being done deliberately. These guys do not make their remarks by accident. Interviews are commonly scripted in advance. MP’s are coached by their staff before media interviews on what to say and what not to say. Flaherty knows well the impact of his words on less sophisticated buyers.

Naturally, more demand will be brought forward if the message gets amplified over the coming days. The bubble will only build further. This is a risky game to play especially given the disaster it has wrought on the US as that market collapsed.

It seems to me that in fairness, any policy decisions should be introduced in the budget and made effective immediately. They must take care though not to spook the markets in advance or be so severe as to bring on a sharp correction or we could have a crash on our hands.

Anyone who can engineer a slow managed deflation at this stage without triggering a bust must be sheer genius.

#294 Rust Belt Buster on 01.07.11 at 1:39 am

“Hallelujah. Thank you, brother Stephen! ”

It is so refreshing to see someone who is thankful of their salvation. Tis’ far better to be a shunned black sheep than forever an ass for the taking.

Which begs the question. I wonder what happened to the now Minister without portfolio, The Right Huggable John Baird. Any bets on whether he choked, or spit?

#295 nonplused on 01.07.11 at 1:48 am

“There will never again be a gold standard. Stop wasting my blog real estate. — Garth”
Never say never. Unless of course you are saying never so you can say “never say never”.

But I agree, no gold standard is likely. Settlements between governments may someday take place in gold and other materials, but there will not be convertibility for the masses.

However, I am hopeful that after the financial crisis is finally over (3 innings done, 6 to go), 2 things will be clearly pressed on the minds of the next generation and my own (no hope for the boomers, they fried their brains in the 60’s):

1. Even in a fiat money system, the correct rate of inflation in prices is zero. Don’t really care how you hedonically adjust it because zero is zero. The money supply can increase with economic growth, but it must also decrease with economic contraction and inflation must be zero. Even 2% inflation targeting has been ruinous. The only inflation rate that can work long term is zero. Negative is no good, but positive is even worse.

2. Governments can not run systemic deficits. Governments must be pay as you go. Systemic deficits are a fraud, and the money will never be paid back in real terms. It can’t. If the government really had “the power to tax”, why not do it now and avoid the borrowing costs. The fact is the government does not have “the power to tax” beyond the population’s willingness to submit to taxes, and the wherewithal of the population to actually pay the tax. “The full faith and credit” of a government is really the “full faith and credit” of the population, and I don’t know about the circles you run in but I don’t trust any of the guys I know.

To paraphrase the Ecclesiastics, Never lend to someone stronger than you. If you do, count it as a loss.

#296 GregW, Oakville on 01.07.11 at 3:17 am

Hi #281 S.B., Don’t worry about that. email F anyway.
Besides if that can get you on that list, your already there by posting here anyway ;) Do not be afraid F is only human to. Maybe he’ll even read it? But I’m pritty sure someone keeps track of the number of emails they get regarding stuff, and if they get lots…
They may even have some formula that indicated for every email they get there are probly x more votes thinking the same thing, so your email counts for more than just one, in there eyes anyway. So write!

#297 Vancouver_Bear on 01.07.11 at 4:20 pm

#31 Burnt Norton on 01.06.11 at 12:20 am

May be you right….every muticultiral city has gang and drug problem.
But…….. only stupid Vancouver has such a stupid RE prices on such a pathetic crack shacks….together with gangs carrying real guns everywhere. So why the stupid prices on pathetic crack shacks you ask? Because ppl in Vancouver are delusional and smoke too much weed produced by the gangs with guns.

#298 edmonton mortgage broker on 01.07.11 at 6:50 pm

#251 Mr. Plow on 01.06.11 at 8:01 pm

I love how you paint yourself as so honorable dolling out 0/40 mortgages cause you have to feed your family. And then out the other side of your mouth you call realtors – realturds.

Guess what? You are no less honorable than they are. At least man up and admit that you made money off of these buyers. There is nothing wrong with it, you didn’t force a pen into their hands to sign, they are grown ups they are responsible for themselves.

But please, don’t act like you are any better than a realtor in this case.

Pot Kettle Black

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

who said anything about me being any better than a realturd? yes i despise them, but it doesn’t mean i can’t work with them.

and i did just “man” up and state i made money off these idiot buyers. and lots of it.

you really need to learn how to read buddy. i’m not trying to sugarcoat the mortgage industry. we’re drug dealers, but drug dealers gotta feed their little drug dealer Jrs too, and pay for that porsche in my garage.

there, feel better? when the kettle is calling itself black, it’s pointless to point out it’s black. Mr Plow? more like Captain Obvious. LOL