What to fear

‘You’ll like this one, Garth.’ Dougie wrote me yesterday, as I was engrossed in a new episode of Property Virgins. Sandra was in a tube top. It was exciting.

I was also digesting the latest news about houses, all pointing to the inescapable conclusion we are about as screwed as Sandra’s tasty young victims. Like, here’s the City of Saskatoon approving a program to give down payments to people who don’t have money so they can buy houses. But these are not poor people. Instead the target is families earning up to $75,000, who have sadly pissed away their earned income and therefore cannot purchase real estate. Of course, today a home is an entitlement, so they get public money.

Said a civic official: “We think there are a number of households out there that are in rental situations that will find it extremely difficult to fund the down payment.” The city is also vexed because its staff found that “many middle-income earners fund their down payment through borrowing from a bank or on a credit card at a much higher rate than what the city is offering.”

See what I mean? When people who spend all their money want a house, we create a social program to give them one. With 100% debt. Mortgage insured by taxpayers through CMHC. Down payment provided the same way. Tell me how this is different from US sub-prime loans which put people into houses that would later destroy them. And everybody else.

And speaking of the USA, two more things to know: American house prices just returned to 2003 levels. That means families who bought in the last seven years paid too much, lost money and have a one-in-three chance of being underwater. Houses are more affordable now than in 35 years. And still, people do not buy. This is what happens when booms turn to bust.

And remember Robert Shiller? He was the academic economist dude who forecast the dot-com crash and the US real estate collapse and is not considered a demi-god. He spoke in New York a day or two ago and said, “Canada looks to be headed for a big drop in home prices.” And where have you heard that before?

There’s more: a new report says falling house prices or rising interest rates would hit Canadian families hard, and pretty much tank BC. And both seem poised to happen. The forecast by TD economists is for VRMs to triple by the end of next year as the Bank of Canada raises its key rate by a factor of three, making the country’s most unaffordable real estate market into an Ozzie Jurock meat grinder. In fact, while the household savings rate in Alberta and Ontario is zero, in BC it’s actually negative.

But do the sheeple care? Nah, says Jon.

Garth, I’m living in Abbotsford, and I just can’t believe my eyes here.  Despite the destruction literally miles away in Lynden, WA where a comparable house is a quarter of the cost in Abby, people act like real estate is their saviour.  I don’t even understand what most people do for work here that they can live such a lifestyle.  People in BC are just completely ignorant to what is about to happen to them.

And there’s more. Now F himself has joined the chorus of people telling you what comes next: “The recent increase by a couple of the banks is exactly what we expected. We’re likely to see higher interest rates as we go forward because interest rates are still very low.”

Now, trust me, federal finance ministers never talk about this stuff. They don’t hint at the future direction of rates because (a) that’s the turf of the Bank of Canada, which is supposed to be divorced from government and (b) chatter like that moves markets and the dollar. So the fact F is doing this just a couple of weeks after he murdered 35-year mortgages speaks for itself. It’s the political equivalent of a screaming air raid siren in Kabul.

So, Dougie wrote me as I was thinking of such things. You might like this, he said. And I do.

There is one thing above all – more critical than rising rates, runaway debt or stupid politicians – that you must fear now. And this you cannot change. You can only run.

It’s human nature.

“My sister moved to Cape Coral, FL in 2005, bought a nice home for $305,000 and planned to stay for a very long time.

Fast forward to 2009, no end in sight for the real estate collapse, she eventually short sells the house for $99,000 and packs up and returns to Vancouver, BC and moves in to a rental house.  Original down payment plus 4 years of mortgage principle payments… evaporated.

Two weeks ago, she calls me.

Her: “What do you think the real estate market is going to do here in the next year or two?”
Me: “Probably drop and keep dropping”
Her: “Really?  How much do you think?”
Me: “No clue, but I imagine it will slide for many years and probably over-correct.  Maybe 30 or 40 percent or more, hard to say”
Her: “Hmm… I hate throwing my money away on rent”
Me: “You’re not throwing your money away on rent, you’re paying less than what you’d pay to own that house.  The owner is the one who will lose money, not you.  Why don’t you just save your money for a year and see what happens?”
Her: “But what if I buy a house and plan to live in it for many years and don’t care if the market goes down?”
Me: “Well, it’s your money I guess.”
Her: “Thanks!” (We hear what we want to hear)

A few days later, she drops her savings on a down payment for a $600,000 house that will probably be worth $400,000 (or less) in 2015.

House lust is an amazing thing.  It overpowers all reason.”

Do the world's dumbest people live in China?

“For mainland Chinese, Metro Vancouver is what Phoenix or Palm Springs is to Canadians right now… cheap.” — Global TV Vancouver


#1 Jas Girn on 02.09.11 at 11:30 pm

First! First! First! Hahahahahahaha!

#2 Wendy on 02.09.11 at 11:37 pm

OMG, could someone be any more stupid? Too funny!

#3 kc on 02.09.11 at 11:40 pm

Hey Garth, Global Vancouver was over the top tonight about these amazing “off shore buyers” (you can fill in the rest…) they took them helicopter flying over White Rock (an over priced beach area for those who are not aware of the area) and all these “buyers” were so impressed with the places that they magically bought millions worth of property… and the kicker is that these guys have no problems whats so ever getting the cash out of China…. BS meter is in full swing tonight…..

and you didn’t make a comment on the TSX being placed on bids from England…??? or the DOW being purchased from Germany…??? what is going on here?? any comments?


#4 Soylent Green is People on 02.09.11 at 11:42 pm

Oh it’s going to get so bad re housing. The last person I want in charge is Steve Harper who can’t even count or do simple math, let alone make any decent decisions over our lives.

snip snip: Harper’s neocon Reforma Tories lie about their fundraising bottom lines

A review of the fundraising of the federal parties indicates that, although the Conservatives do well at fundraising, they primarily do better with smaller donations from individuals.

Further, this broad-based approach to fundraising is higher cost.

Their big dollar numbers, while significant, is not as colossal as some observers think once costs are factored in. This situation is reversed for the Liberals.



#5 Medic on 02.09.11 at 11:42 pm

I noticed this from the financial literacy task force report that just came out.

“Of those Canadians who were planning to purchase a home, 48 percent had saved less than five percent of the cost of the home. Fifty-two percent of Canadians who were planning to purchase a home were not expecting to incur any costs other than the down payment;”

The second statement is hard to believe. Sometimes it’s very depressing to belong to the human race.

#6 Andrew Jackson on 02.09.11 at 11:44 pm

Yeah, it’s not often that government officials actually telegraph their policy intentions. I mean, when I was reading the Metro free newspaper this morning on the bus, one article in the “business” section was on F talking of higher rates. The Metro newspaper of all places, not some fancy financial journal. The message has gone to the masses . ….

#7 Bottoms_Up on 02.09.11 at 11:49 pm

What is it with people that can’t take (good) advice? I find with people like that you have to use reverse psychology.

Speaking of consumer sentiment, my buddy was going to buy in Milton, but thought he’d better hold off for a year. Interesting that there seems to be people definitely on the sidelines waiting….not sure if that’s bullish or bearish for the housing market…

#8 Ron on 02.09.11 at 11:54 pm

B.C. real estate is the biggest gas bag in North America…but don’t tell the locals. It’s insane how people here view real estate.

Renting and loving it.

#9 Fool me once... on 02.09.11 at 11:57 pm

Care to explain something I heard on the weekend. I had dinner with friends in the financial biz (one apparently knows you personally) who were talking about how F quietly bought back bad the bulk of bad mortgages, averting a catastrophe. Not wanting to sound silly I didn’t ask for an explanation.

The feds bought $125 billion in high-risk loans from the banks two years ago. We were all diverted at the time by the spectre of a neo-depression. — Garth

#10 nonplused on 02.10.11 at 12:00 am

Strange way to do avalanche control. Both the guy in the picture and F.

#11 Peter Pan on 02.10.11 at 12:00 am

“My sister moved to Cape Coral, FL in 2005, bought a nice home for $305,000 and planned to stay for a very long time.”

And after losing a ton of money she want to rinse and repeat the same story in Vancouver…

Stupid is as stupid does.

#12 HouseBuster on 02.10.11 at 12:01 am

#2 Wendy on 02.09.11 at 11:37 pm
OMG, could someone be any more stupid? Too funny!

Not stupid, ignorant.

#13 Peter Pan on 02.10.11 at 12:04 am

#3 KC… The Global story was probably planted by some Re/MAX agent who was looking for cheap publicity. He probably rented a helicopter for an hour and hired a couple of actors from Richmond.

The Global reporter obviously gobbled it up eagerly… “Great visuals!”

#14 dmc on 02.10.11 at 12:06 am

Be wary of anyone telling you they’ve got buyers lining up. Three months and 150k discount later, says otherwise.


#15 Western Canadian on 02.10.11 at 12:06 am

“Tell me how this is different from US sub-prime loans which put people into houses that would later destroy them. And everybody else.”

I’d say the main difference is that in the US the sub-prime loans we’re one of the catalysts for driving the market higher. Meanwhile here we are already at peak prices of this cycle, consequently this program will likely have a minimal impact on prices (though it will hurt a few dumb people who buy too high).

#16 Boombust on 02.10.11 at 12:07 am

That helicopter story was so Bernanke-ish. As we all know, it only takes helcopters full o’ moolah (in this case, Asian) to turn things around.

Global TV in Vancouver should be cited for yellow journalism. Such a disgrace.

#17 City Slicker on 02.10.11 at 12:08 am

Yeah the message about rates is getting out but whats stupid is this gives the market a spurt in buying – better get in while you can, not even thinking what this will do immediately to home equity.
Garth considering all things like Canadians personal debt being higher than US, emergency rates being kept down 2 years longer then the rest of the world, 70% already own, the 0/40 which the US didn’t even do, and many many at 5/35…..did I miss anything…..Like hell we’ll see 10-15% correction then a melt of 5%/year for many years….this is going to be down right ugly and nastly, worse than the US!! But I know you like to keep it conservative and stay away from the doom and gloom. But frick the writing is on the wall in big bold flourescent letters!

#18 Boombust on 02.10.11 at 12:08 am

“Yellow” journalism. Get it?

#19 Carlyle on 02.10.11 at 12:12 am


#20 Paolo on 02.10.11 at 12:17 am


Again, like watching a ‘train wreck’ unfold.

“Hold on Dorothy, we ain’t Kansas anymore”

We will be back to 2003 in a short time. Always worse than one can imagine or predict. If the woman above didn’t learn a lesson in Florida, wow! Anything is possible.

Hey you can always move to Toronto where things are always looking up:


#21 EJ on 02.10.11 at 12:17 am

So it’s not enough that housing is being artificially inflated through federal subsidiaries, but now it’s happening at the city-level too? Why don’t we just socialize the whole thing already? A free house for everybody and we’ll just raise taxes 10000% to compensate.

What is it with governments always troubleshooting the symptoms instead of the root cause of a problem? The only logical answer (not considering that they are complete idiots) would be that they’re benefiting somehow from the current imbalance in the system. But no, that can’t be the case, because that would imply they were corrupt and not acting in their constituent’s best interests!

#22 Carlyle on 02.10.11 at 12:19 am

So yesterday I called up the Festival Tower in Toronto, home of TIFF (toronto international film festival) and a huge condo … 1 bedroom 1700 a month the agent told me. I thanked her but said it cost too much and hung up.

1 hour later she calls me back. Apparently a unit “just opened up for 1600/mth”. I say it’s too much and hang up.

1 hour later i call her back. 1500 Max and i want parking.

im seeing the unit on Saturday … No guarantees I’ll get my price but my experiences looking for a condo rental are telling — condo owners and proper management companies are starting to feel the pressure. … They NEED to rent out their units and prices are negotiable.

Just thought I would share.

#23 BC Bring Cash on 02.10.11 at 12:22 am

Yes siree. Harpers sure worried about the poor old tax payer all right. He doesn’t want to burden the tax payers with funding political parties election campaigns. But the economist (by profession) has no problem buying or making huge commitments for eg. the economic action plan, g8, g20 security to the tune of only one billion $, fighter jets, rebuild the navy, build prison to house people for petty crimes for long sentences…. etc etc etc. The list is endless of his dreams to better our society and of course do this with borrowed money and ultimately higher and higher taxes. The taxes of course will not come from the elite or rich such as corporations. Instead he is aiming to destroy what ever is left of the middle class who blindly support him. Canada will some day wake up and see him for what he is. But for now he’s got his eye on your pay cheque.

#24 Kitchener1 on 02.10.11 at 12:30 am

#21 Carlyle

Thanks for keeping us updated regarding Toronto condo’s and their rents.

And this is before the 70 something thousand units come online. One thing you should always ask your agent when renting a condo– or buying for that matter is what the % of owner occupied units the building has.

The info is available in the status certificate. The higher the % of owners the better it is. I would guess that any decent RE agent would know those numbers even when renting.

#25 Can't Spell; Won't Stop Me on 02.10.11 at 12:32 am

Here’s how the Chinese are dealing with their real estate bubble: http://www.planbeconomics.com/2010/12/28/real-estate-bubble-in-china-container-homes-in-chengdu-18-sqm-only-6-rmb-rent-per-day/

China is behind the curve on their domestic inflation and housing bubble…but just wait ’till that bubble pops. Down comes commodities, the Canadian economy and Canadian housing with it.

Stay tuned.

#26 Steve on 02.10.11 at 12:38 am

Nice little recap of how this started:


I wonder how the narrative will play out in this country.

#27 mab on 02.10.11 at 12:51 am

reprinted from http://market-ticker.org/akcs-www?post=179487

When interest rates rise (which Bernake said they wouldn’t) what happens ?

So the 10 year Bond has gone from 2.33% to 3.7% in less than four months. 30 year mortgage money, no points, has gone from about 4% to just over 5% (no junk fees) in the same time.

This is an immediate 11% reduction in the implied value of every home in America, and it is exactly the opposite of what Bernanke said he was going to do.

Here’s the math; don’t believe me, get out your calculator and run it yourself.

$100,000 borrowed, 30 years, 4% interest rate = $475.83 P&I.

Same P&I, 30 years, 5% interest rate borrows only $89,007.56.

That’s an 11% loss of value and since 90% of the buyers purchase a payment in the housing market, not a price, this is an immediate 11% deflation in home values.

Now if I’m not supposed to “fight the Fed” then I should have believed that Bernanke’s policies were going to support home values. That they would keep mortgage rates low. And that the 4% 30 year money would become a benchmark for the intermediate term, allowing me to buy this coming spring.

This is what he stated he was not only capable of doing, but would do.

None of that happened. Instead, what occurred is that Bernanke has lost control of the long end of the curve even though he explicitly stated that he could control it prior to initiating QE2.

He was wrong. Again. The same thing happened during QE1. And yet you have had every fawner in the universe falling over themselves licking his shoes.

What they should be doing is kicking his ass from here to Toledo.

Of course that would require intellectual honesty. That you will not find among the media.

So what’s likely here? Well, pick one – if rates continue to back up, and they will if QE2 continues, housing will continue to get hosed. At 6% we’ll be looking at a housing value loss of an additional 20% from November’s numbers and of course if it keeps going…. The other alternative? Yank liquidity and watch the corporate leverage index come back to earth from it’s current level of 12.

“Earth”, incidentally, is somewhere between 2 and 4. You do the math on that one.

Housing recovery? Not a snowball’s chance in Hell so long as the money printing continues.

#28 Morry on 02.10.11 at 1:01 am

“A few days later, she drops her savings on a down payment for a $600,000 house that will probably be worth $400,000 (or less) in 2015.”

I see at worst the house being worth 500K. At worst. One thing to keep in mind. they are cranking out new millionaires in China at one a day! In India? — who knows.
Everyone who can are coming to Canada. Overseas folks ain’t going to Arizona or North Carolina or Tennessee. deal with it. look around and think for yourselves.

What is not accounted for by Mr. Turner, as far as i can tell, is the _increasing_ number of new home buyers from overseas who are driving up prices. With cash and real $$. In the USA where i have relatives i saw the fairy tale in action. Down there it was different and crazy. My gut instinct based on 69 yrs of observation. … no more than a 25% drop in the next year.
As for Schiller “2. Without oil, the country would be in trouble”

Well we have Oil and lots of it! Plus Natural Gas!

#29 AG Sage on 02.10.11 at 1:01 am

Not learning from your own experience, that’s something really special.

Dougie, no offense, but it’s a wonder your sister doesn’t regularly wander into traffic.

#30 Nostradamus Le Mad Vlad on 02.10.11 at 1:07 am

“Of course, today a home is an entitlement, so they get pubic money.”

There are now horny home buyers combined with pubic funny munny. What is the wurld coming two?!
#5 Medic — “Sometimes it’s very depressing to belong to the human race.”
#2 Wendy — “OMG, could someone be any more stupid?”

Put these two sentences together and it equates to Flaherty + Carney + Paulson + Geithner x sheeples are so daft and easily led down the garden path!

#3 kc — “what is going on here?? any comments?”

Certainly. North America is flat broke, Europe is not far behind so they — as well as Chindia and Russia — are picking over our bones. Just a guess, but we’re snookered!

“We were all diverted at the time by the spectre of a neo-depression. — Garth” — Main word here is ‘diverted’, as that is what govts. all over do extremely well — divert and / or distract sheeple’s attention spans to something else (FFs and the like), do something really sneaky behind their backs and don’t give an ironclad reason for having done it.

That’s why they are politicians (schooled in the art of lying) and we’re not. Now F has passed the buck to us, yet he is still in charge of finance.
US Housing figures. Not great.

2:34 clip Astronomy. Does size matter?

Financial Crash Is this why 260 US Ambassadors have been called back home?

Tories Bankrolled by the city’s bigwigs.

GW Major food price increases in North and Central America. Plus this.

Iran’s Green Movement Party was set in motion by the CIA.

China’s economy is doing relatively well.

#31 Throwstone on 02.10.11 at 1:07 am

This is going to be worse than we think…how soon who knows?

Excellent work Garth!

Bloody Brillant!

#32 LH on 02.10.11 at 1:09 am

I have house lust. I quench that lust by owning a few in downtown T.O. (and rent them out, covering all expenses and paying the mortgage) I personally rent. There is no contradiction. Garth, do you rent or own? Or both!?

#33 Tim on 02.10.11 at 1:09 am

#4 Re Harper
The Conservatives- I mean Alliance neo-cons posing as conservatives have pissed away our surplus and racked up a 56 billion dollar deficit. Instead of showing any leadership and offering constructive solutions, they spend our money on attack ads trying to discredit the opposition. Harper has diminished the our international reputation and has created a massive housing bubble. He now wants to give corporate tax cuts at the expense of the middle class, despite the fact that most corporations have record amounts of cash and the middle class are being screwed. Let’s hope Canadians aren’t stupid enough to vote for him again…

#34 Morry on 02.10.11 at 1:13 am

People with cash love to hear of the looming 25% drop in Real Estate prices.

Mr Tuner: Why is Francisco Aquilini salivating at the prospect of BUYING the bulk of the unsold Condos in the Athletes’ Village.

Interested to hear your take on the deal?

Because he can get 25% off? — Garth

#35 US Investor on 02.10.11 at 1:17 am

When I moved to So Cal from Vancouver for work in 2006, I was shocked to find a place with higher real estate prices and even more peoe obsessing over the RE market. I mean everyone was totally engrossed, flip this leverage that look how smart I am. I thought moving out of Vancouver I would finally Fonda place where I could go to a dinner party without talking ad nauseum about the house that just sold down the street for 1.9.

Fast forward to 2011 post crash. No one, I mean no one talks about real estate. No one is flipping, selling, spinning, or smarting. There isn’t even an obscure blog populated by dogs pondering the return of prices, watching every monthly data post with laser beam eyes. It ain’t coming back, it is gone.

Anyone out there in Vancouver, or TO, or North Nowhere that is not heeding Garths advice, has a long and painful road ahead. And don’t think if you don’t have a house you are safe either, that bloated market is going to pull down all sorts of good things and good people, not just the fools.

#36 ottawa pete on 02.10.11 at 1:19 am

#26 Steve – Nice summary of the fraud.

#37 North van dude on 02.10.11 at 1:21 am

Aquilini is offering $200 million less than what the city paid. He is looking to buy a distressed product at a fire sale price.

#38 45north on 02.10.11 at 1:24 am

My sister moved to Cape Coral, FL in 2005, bought a nice home for $305,000

my brother-in-law bought a nice home in Cape Coral and then moved there

speaking of overhangs: here’s a piece from the US of A:


basically it says there is a big overhang of delinquent mortgages, so big that the banks cannot/will not foreclose!

here’s a quote from the cartoon, shot of a young couple showing off their new house, the husband says: the free money was great, but avoiding the house payments is steady and reliable

#39 Tre on 02.10.11 at 1:28 am

How she doesn’t learn from the first mistake (Florida) is beyond me. Remember she is from BC, which stands for beyond comprehension that settles it.

#40 Thar She Blows on 02.10.11 at 1:30 am

Hey, what’s sadder? A bunch of flippers and speculative buyers trying to time the RE markets rising in value, or a bunch of renters trying to time it’s fall in value? Where were you all in late 2008 when the wheels were falling off the US economy each day, and the job and labour markets here in Canada were already soft? There were seismic shifts in the stock market each day, and people truly afraid of where their next mortgage payment would come from…

I bought then, when prices in a post-bust Calgary were already at their lowest levels since the 2006 boom. Where were all of ya? Waiting for Garth to tell you sheeple that the time would come when the mother of all corrections would allow you to buy that castle in the greatest place on meth?

I bought really low, and you know what? My assessed value for my place has fallen $70,000 in the last two year. Sales prices in my area of Calgary have gone up since, but sales volumes have fallen. Do I care? No. Why should I? The amount I paid is still at least $50,000 less than the ridiculously lower assessed property value that the city has stated for my place.

Here’s the deal. Life’s all about timing. You missed your perfect opportunity. Better hope another comes along. If the world changes again, and the price of oil rises, the RE market in Calgary at least will make a roaring comeback. It’s all about timing.

#41 Don on 02.10.11 at 1:31 am

Nice Article Garth!

Was at lunch today and could hear the two 20 somethings gossiping about the housing market, jealously about friends with houses – hoping that some outright go under because they didn’t believe the stories of rich and fame. I believe one was a current home owner, and the other was getting ready to buy. Oh yah and the word on the street is… and I quote, “Can’t trust a realtor, and I wish he would stop sending us his business cards”

Yet they were both oblivious to the latest news. It seems that all the young professionals I know, “don’t follow the news”….Priceless yet sad especially when the info is at your finger tips.

I remember the 80’s, a mortgage was explained to me at a young age.

#42 Hoof- Hearted on 02.10.11 at 1:33 am

#221 Dawn in Calgary (from last post)

If 3rd party liability exists..good

However your link seems to imply VET services aka “poopsies” health care…which I am aware of exists..(which I don’t understand..just put the poor thing to sleep via watching CPAC channnel).

However, if poopsie is humping the cat (or any other inanimate object and knocks over a burning candle which starts a fire,…….well SOL policy kicks in.

#43 Carp on 02.10.11 at 1:45 am

That dude on the cliff looks like a Star Trek dude on a mission …

#44 Jacen on 02.10.11 at 1:57 am

… I don’t understand why people think all rich immigrants are coming to Canada. The same argument is made here (Australia), and having lived in ‘premiere’ cities in both countries, I can assure you that if these immigrants with unlimited funds are moving purely for ‘standard of living’ reasons, Vancouver has nothing on Melbourne or Sydney, other than skiing.

Vancouver is simply depressing, other than the 2-3 months of summer.

#45 Jeff Smith on 02.10.11 at 1:59 am

looks like he is about to do a WileE Coyote

#46 smartalox on 02.10.11 at 1:59 am

As a former owner of a 30-year old condo less than 10 blocks from South False Creek, I’m happy that we sold a year ago, before that huge glut of government-financed competitors went to market. And now with a 25 (some say 30%) drop in prices? Hoo boy. To add further insult to injury, the city is planning to build a shelter and addiction treatment centre two blocks from the old place, a building that will dominate the neighbourhood skyline… where the skyline is not already dominated by a 30 foot tall neon-lit tombstone erected as a city art project.

In other news, the BC government is looking to change the laws for strata corporations’ reporting requirements, to obligate stratas to report on DEPRECIATION of values or rates at which the properties in the strata. The intention is to help potential condo buyers get a better sense of the value of the property when considering a purchase.

talk about lighting a fuse….

#47 The Bigger They Are .....The Harder They Fall on 02.10.11 at 2:04 am

Garth – any thoughts on a practical way to short the Vancouver market? The CDS market worked in the U.S. (The Big Short), but not workable up here. Sold my place in Van City last year and wouldn’t mind also double dipping now on the way down.

#48 Jody on 02.10.11 at 2:09 am

60th, 60th, 60th!!!!! Hahahhhaha! RRSP pimps are out promoting their garbge. Anyone else on here use Questrade?

I think US nickels will be the next best thing


Of course if I happen to see Canadian coins with silver, I keep them.

Canadian coins

Composition: .925 Silver, .075 Copper (1858-1919)
Composition: .800 Silver, .200 Copper (1920-21)

Composition: .925 Silver, .075 Copper (1858-1919)
Composition: .800 Silver, .200 Copper (1920-67)
Composition: .500 Silver, .500 Copper (1967-68)

Composition: .925 Silver, .075 Copper (1870-1919)
Composition: .800 Silver, .200 Copper (1920-67)
Composition: .500 Silver, .500 Copper (1967-68)

Composition: .925 Silver, .075 Copper (1870-1919)
Composition: .800 Silver, .200 Copper (1920-67)

#49 Morry on 02.10.11 at 2:14 am

@North van dude @Garth.

Exactly! he is not losing his head over the looming spike in Mortgage Rates! He isn’t liquidating RE in anticipation of armageddon.

If you can’t hold onto what you bought on speculation (wrong reasons) you will be selling soon…. real soon. BUT there will be eager buyers at the 25% drop point.

#50 Jane on 02.10.11 at 2:17 am

I need more… Garth, please clarify a few points:

“American prices just returned to 2003 levels… Houses are more affordable now than in 35 years.” Is the difference due to today’s low interest rates?

“[Robert Shiller] spoke in New York a day or two ago and said, “Canada looks to be headed for a big drop in home prices.”. I’d like to hear/read the rest of what he said. Can you link your source please?

“…the household savings rate in Alberta and Ontario is zero, in BC it’s actually negative.”. How do we get negative zero savings?

“… federal finance ministers … chatter like that moves markets and the dollar”. What impact on the market and dollar have you or do you expect to see?

I need more…

#51 Jeff Smith on 02.10.11 at 2:20 am

I love it to have more Chinese money invested in Canada. I think we should keep this gas bag going as long as possible. And you are not helping Garth, really!

#52 Billy Bob on 02.10.11 at 2:20 am

Growing up in Canada, we were taught to feel shame for what we did to the native people. It was wrong that Europeans were dominant and they came in droves, completely displacing First Nations culture and taking over all the best areas. First Nation culture was devastated as a consequence.

I’m pretty sure that if it wasn’t a “visible minority” buying up our city and making real estate completely unaffordable for our children, politically correct Canadians would put a stop to it. The government should be making decisions that serve the best interests of our own Canadian children – not the best interests of wealthy realtors, developers, and foreigners.

#53 wetcoaster on 02.10.11 at 2:33 am

Looks like it should be renamed “Year of the Retard”. Helicopter Chinese spreading cash like fairy dust ? Global BCTV is the most disgusting media outlet in the country. An outlet for the libs/Remax/Lepage to keep spewing this ridiculous bullshit.

Over on Van Isle we have the Canadian version of Donald Trump who buys a property every month wether he needs one or not. Ever heard of dollar cost real estate averaging Garth ? I think this guy was like 8 years old in 1990 and has no idea what a real market correction is.

Check out #9


The only thing missing is Ozzie laying over Campbell’s lap barking like a dog that needs to be put out his misery.

#54 Wet Dreams on 02.10.11 at 2:37 am

History always repeats itself

Is like the movie back to the future….
– in the 80’s housing starts slowed
– developers got laid off
– then the lumber guys
– Interest rates rose to double digits


– I may sound like a heartless prick, just like garth but
I really don’t feel sorry if these greedy pricks all hording their little pieces of land, and in most cases multiple pieces of land, all sunk into the toilet and leave their lives in ruin. (its darwinism)

Hey here is the original definition of Mortgage

Mortgage: In the word mortgage, the mort- is from the Latin word mori (via old french mort) for death and -gage is from the sense of that word meaning a pledge to forfeit something of value if a debt is not repaid. So mortgage is literally a death pledge.

#55 wetcoaster on 02.10.11 at 2:48 am

You know what is hilarious, on the Global BCTV noon news today, they trotted out the local pumper Sarah Daniels and the host Randeen just happens to be selling her house. No word on wether she’s buying a new one, but the best part was she said she’s had it on the market for a couple of weeks and not one looker yet !

Of course Sarah gives the ole ” it takes longer to sell these days” while she pumped some POS estate home that needed a total make over that sold $40 grand over ask for $900 G.

Talk about two faced BS while they pumped run down apartments near the PNE for $250,000 tallking how there’s still great deals out there. What a joke of a TV station !

#56 Robert on 02.10.11 at 2:51 am

Watched the video and couldn’t help being repulsed by the realization that so many are pinning their hopes of winning the financial land lottery by selling the ground beneath our feet to foreigners. How much lower can we sink?

#57 Heinz Skitzvelvett on 02.10.11 at 2:55 am

Well Garth, it was a sad but cathartic day for me. Sorry this is so long, call it a down payment on future posts.

After a great deal of soul searching, I decided to begin the process of finding a new home base. Vancouver has been good to me for the past decade and a half, but it is no home, and I don’t like where it’s headed.

I can’t quantify to what extent property values have made many Vancouverites as uppity, emotionally-childish and avaricious as they seem to have become; suffice it to say that there’s a palpable tension in the city that I believe is only perceptible by those who have not been blinded by the real estate orgy.

I think the final straw was the news report last evening about the owner of a tony house on SW Marine who, despite a municipal order, went ahead and clear-cutted his backyard slope, allegedly to improve the view, and by extension, increase the already atmospheric value of his property (it’s one of those properties behind a gate with an intercom). I guess a $100,000 fine is a pittance if it means reselling for half a mil more.

The man’s neighbour was quoted as saying something to the effect of “this guy does what he wants, and to hell with the rest of us”. Vancouver circa 2011 in a nutshell.

No doubt, greed does wacky things to people, but it’s not solely confined to acts against nature like this, but in the little day-to-day interactions that once made Canada a hospitable, proud country.

I see it in the way a realtor carries him or herself, fashioning themselves as wannabe rockstars with their visages plastered across rotating billboards with equally tacky taglines.

I see it in the NIMBYism that occasionally breaks out when people oppose hospices or increased downtown building height, all in the name of personal gain (or fear of personal loss) but cloaked in a farcical concern for the heritage and beauty of how things are.

I see it in the expression-less faces of those behind wheels, on the sidewalks, in the news; those petrified by even the prospect of a small drop on the price of their most beloved asset.

I see it in the shockingly bad, discourteous, mobile-in-one-hand-burrito-in-the-other driving in the Lower Mainland, which to me has far less to do with any ethnicity as it does with the pace at which many of us choose to live our lives, or have it chosen for us by virtue of massive debt, keeping up with the Joneses, or just plain self-entitlement affluenza.

I see it in apathetic customer service, the result of people making minimum wage (which is the lowest in Canada and hasn’t moved an inch since I can remember) resigned to the fact that no matter what they do, no matter how hard they try at their job, they’ll be lifelong renters if they stay in BC.

It’s sad to have a beautiful part of the country and the world held hostage by such lust for wealth at virtually any cost.

So off I go to search for a part of the country where the orgiastic calls of bidding wars and wry smiles of realtors haven’t spoiled the hearts and minds of those who remember what a community is. I’m fortunate to be able to take my skills abroad without any drop in income, because I couldn’t fathom being in Vancouver when the big one hits (not the quake) and the mood REALLY sours.

Wish me luck, and here’s hoping after the correction we get back to what makes us who we once were.

#58 beaker on 02.10.11 at 3:15 am

Nice video. The chinese people being interviewed spoke very good english, very little accent from some of them. It makes me wonder if they were all locals.

#59 The American on 02.10.11 at 3:26 am

At #15: Western Canadian… Wow… I am speechless at your blind ignorance. You truly do believe what you wrote. I sure hope most Canadians are so snowed over by the propaganda the government and media have served them. If they are, than I sure as hell wouldn’t want a part of that.

#60 The American on 02.10.11 at 3:35 am

At #28: Morry, I hate to break the news to you, but more Chinese by far immigrate to the U.S. every year than to Canada. Also, the U.S. has more people across the globe immigrate here than all other countries the world combined. No, you deal with it.

Mark these words TODAY. And believe me when I say I know what I am talking about. Canada will have a 30% haircut in values, melting over the next 5-6 years. Vancouver will have 40%+ haircut GUARANTEED. I have nothing more to say. You truly have no idea what is about to ensue across Canada.

#61 Derek on 02.10.11 at 3:36 am

Take a look at Australian economist Steve Keen’s latest postingfor some great discussion of the current Australian house-price situation. Steve’s been warning Australians about Real Estate for almost as long as Garth has been warning Canadians. He’s not as fun to read as Garth because of the academic slant but his analysis is top notch. And the parallels with Canada are obvious.

#62 a prairie dawg on 02.10.11 at 3:43 am

It amounts to a low interest 5 year loan for the down payment. The city of Stoon guarantees 2/3 and Affinity Credit Union guarantees 1/3.

But it’s still something the city has [u]{no}[/u] business doing with public money. [b]{GTFO}[/b] of the housing finance business.

[center]{end rant}[/center]

#63 The American on 02.10.11 at 3:44 am

Hey, I’m sorry for my spelling errors is my last couple posts. Its like I’m using phonics or something. I’m just really high tonight, eating Sugar Smacks, and watching some good ol’ Chelsea Lately!

#64 mostMiserablePlaceon Earth on 02.10.11 at 3:44 am

Here are some of the billion people from China, getting ready to move to THE BEST PLACE . You can see clearly they all have lots of money and will expect only the finest housing as they have become accustomed.
Only White Rock will be good enough.


#65 pessimisticprof on 02.10.11 at 3:53 am

Arghhhhh – too much like the AirCav assault scene from “Apocalypse Now” – did the realtor have the “Ride of the Valkyries” playing to scare the hell out of the inhabitants of Whiterock and prep them for the wave of Chinese investors about to descend on them? I can just see the realtor jumping out of the chopper onto Crescent Beach, taking a deep breath, and proclaiming “I love the smell of Chinese money in the morning! You know, one time we had an open house for 12 hours. When it was all over, I had 40 bids over asking. We didn’t have one from a Canadian, not one stinkin’ bid. The smell – you know that foreign money smell – the whole place. Smells like … a bubble!”

The horror, the horror ….

#66 kc on 02.10.11 at 4:22 am

Why aren’t the rich Chinese buying commercial properties in China, just like all the other smart monies there?

Shanghai residential property sales cool


#67 Jas Girn on 02.10.11 at 4:23 am

Hahahahaha, I know I am funny. I love Garth’s Posts. Real Estate is headed for a crash. I knew it the first time I came to Canada. I grew up in many countries, and the real estate costs here are ridiculous.

#68 betamax on 02.10.11 at 4:31 am

#34 Morry: “Why is Francisco Aquilini salivating at the prospect of BUYING the bulk of the unsold Condos in the Athletes’ Village.”

Because, as was made abundantly clear in the US, most developers never see a correction coming. They’ll keep chanting “This time it’s different” until the walls cave in.

#69 kc on 02.10.11 at 4:33 am

Might be hope for Alberta’s bubble to re-inflate…

PetroChina to invest $5.43b in Canadian gas project


funny how we don’t hear about this type of stuff on “global news” …. hmmmm sold out again and we have to endure another chapter of “lohan trainwreck”

#70 London Calling on 02.10.11 at 4:40 am

Do the world’s dumbest people live in China?
“For mainland Chinese, Metro Vancouver is what Phoenix or Palm Springs is to Canadians right now… cheap.””

Everyone, including the Chinese, has the right to lose their money and make bad investment decisions equally. It will be interesting to see the Chinese lose 10-25% of their investments over the next few years and watch them sell and leave Canada en masse.

“Any can be rich, but not everyone is smart enough to keep it.”

#71 debtified on 02.10.11 at 4:52 am

Wow, Garth, two great posts in a row. You’re on a roll!

The fact that I check your blog everyday shows that I share your views on almost everything. I say “almost everything” because some of your ideas do scare me – like using HELOC to invest in some circumstances. To me, given today’s precarious real estate and economic conditions (plus what seems to be an overheating equity market), under no circumstances should one borrow from real estate assets to invest in equity market because it is just like setting ones self up for a double whammy.

I do particularly admire your no-nonsense “tell-it-like-it is” approach. No sugar coating which, on the flip side, seems to have offended some of the more emotional readers. You should have a sign at the front page that says: Check your ego and emotions before you enter.

Anyway, about today’s post, the “Mortgage Flexibilities Support Program” in Saskatoon reminds me of the “American Dream Downpayment Program” in the US that Bush implemented in 2003. We all know what happened there a few short years later.

But then again, I can already hear somebody saying out there in the real world: It’s different here.

#72 SquareNinja on 02.10.11 at 4:58 am

Don’t pay your property taxes in Canada for a couple of years, and see if you can pass your real estate onto your children…

#73 Wet Dreams on 02.10.11 at 5:18 am

Mortgage: In the word mortgage, the mort- is from the Latin word mori (via old french mort) for death and -gage is from the sense of that word meaning a pledge to forfeit something of value if a debt is not repaid. So mortgage is literally a death pledge.

I guess in the olden days you would have to paid with your first born, or your wife

But Now-a-days its Society who has to pay with welfare for the rest of these peoples lives and endless social program all on the backs on the working class dogs who pay taxes.

#74 Devore on 02.10.11 at 5:36 am

#12 HouseBuster

Not stupid, ignorant.

failing to learn from your own experience, so recent and painful, is not ignorant. It’s just plain stupid. There’s no need to coddle these people.

#75 islander on 02.10.11 at 7:08 am

The Chinaman can have Vancouver.
You’d have to be nuts to pay $1.4M to live in Vancouver if you could have the same house for $300K in Phoenix.

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#77 Rifles on 02.10.11 at 7:59 am

“For mainland Chinese, Metro Vancouver is what Phoenix or Palm Springs is to Canadians right now… cheap.”

So why don’t the clever Chinese chaps buy in Phoenix then? Perhaps they’re worried they will be hounded by the local police and accused of being illegal Hispanic labourers. That aside they could do a hell of a lot better there.

#78 David B on 02.10.11 at 8:42 am

If you want to see why Hong Kong people may think Vancouver is a dream come true …. check this site out. Only very rich have cars so few people have cars and there is no public street parking. ($ is about 8-1)


#79 Stevie Why ? on 02.10.11 at 8:53 am

Garth and Dawwwwwgs:

Year End RRSP and TFSA accounts …… where would YOU put about 12 k ? Where does the “wise money” go ?

best regards,

Typical Canuck

#80 MrC on 02.10.11 at 8:53 am

Human nature seems to be wait for a trend to establish itself and then buy into it. Its why you get the buy high and sell low mentality in stocks, bonds etc as well.

Just follow penny stocks and read comments on bulletin boards like Stockhouse. Its funny. A company doubles in price and all of a sudden its going to the moon, even though its got high debt and little revenue.

#81 Harry on 02.10.11 at 9:04 am

Mortgage Flexibilities Support Program

Looks like the City of Saskatoon has been helping people enter the market for quite some time. Free downpayments.

I bought two investment properties in 2006 before Saskatoon boomed by dumb luck. I thought it was different in Saskatoon because of a strong economy and resources. Now I am starting to see that Saskatoon is only different because of programs like this to artificially support the housing market. For some, there is a rush to buy, me, I’m selling.

#82 Moneta on 02.10.11 at 9:13 am

Well we have Oil and lots of it! Plus Natural Gas!
Comments like this are proof that convincing is futile. People think what they want to think when they want to think it. It’s all about rationalizing.

We’ve had oil and gas forever, yet we have gone through wicked economic shocks. Imagine that.

#83 Moneta on 02.10.11 at 9:15 am

How she doesn’t learn from the first mistake (Florida) is beyond me. Remember she is from BC, which stands for beyond comprehension that settles it.
Obviously she has more money to lose.

#84 brainsail on 02.10.11 at 9:24 am

#50 Jane

“American prices just returned to 2003 levels… Houses are more affordable now than in 35 years.” Is the difference due to today’s low interest rates?

This article may help…


#85 Moneta on 02.10.11 at 9:28 am

Heinz Skitzvelvett on 02.10.11 at 2:55 am
I get you. I left Montreal for many of those reasons. Had to break some links.

Most people don’t seem to get how pervasive this bubble has been in every day life. Good for them… while it lasts that is.

#86 Fractional Reserve on 02.10.11 at 9:45 am

Marc Faber says new crisis on horizon once Fed support ends.


#87 DJ on 02.10.11 at 9:45 am


This ought to “adjust” those real estate numbers to a rosier picture.

I swear, nobody reads this blog!

#88 Gord In Vancouver on 02.10.11 at 9:47 am

“For mainland Chinese, Metro Vancouver is what Phoenix or Palm Springs is to Canadians right now… cheap.”

That was a pathetic Global BC pumpathon.

We can assume they did this to butter up their advertisers right before the Olympic Village price cuts are implemented later this month.

#89 Rawinder on 02.10.11 at 9:51 am


My favorite project is “Realistic Homes (Corner of 22nd Street and Avenue R) SOLD OUT”

#90 Fractional Reserve on 02.10.11 at 9:53 am

More Faber. He correctly calls the chief bankster Bernanke a liar. Faber states that inflation rates are much higher than Bernanke claims. Faber puts inflation at about 8% in the US.


#91 fancy_pants on 02.10.11 at 9:54 am

I hope a lot of homeowners burn and the pain is heavy when the hammer falls. I have been living below my means for a long time (slow pain) so fk em buggers who have lived beyond their means… hope they suffer HARD.

But I would give that up if any gov’t or bigwig official who had a hand in assisting the RE bubble would be stripped and flogged in public and then left to live on the streets.

#92 Moneta on 02.10.11 at 9:58 am

Marc Faber says new crisis on horizon once Fed support ends
That’s the thing… can they stop?

#93 Ex-Cowtown on 02.10.11 at 10:24 am

Thar she blows:

I’m glad that you bought my house in Calgary. Ecstatic actually. That’s what makes a market. Somebody thinking prices are going up, somebody else thinking they are going down. However, from the tone of your post, you must be new to town. I wasn’t. I saw things in Calgary real estate from the late 70’s on that would be making you reach for the Gravol. Calgary is a lot of things, but stable and predictable ain’t one of them.

I wish you many happy years in my old house, I really do.

Thanks for getting me out, though.

#94 Randman on 02.10.11 at 10:35 am

Let’s talk China!

Just arrived in Guangzhou….and let me tell you all
a little something….

This place is one beautiful vibrant city

kicks Vancouver’s ass…left ,right and sideways

Why anyone would move from here to raintown is beyond me…

I just might stay here and start a blog

Oh.. and BTW..the Chinese are buying HUGE
amounts of AU and AG…

Just saying….

#95 tired vulture on 02.10.11 at 10:41 am

#56 Robert: ….”Watched the video and couldn’t help being repulsed by the realization that so many are pinning their hopes of winning the financial land lottery by selling the ground beneath our feet to foreigners. How much lower can we sink?”


#96 The American on 02.10.11 at 10:47 am

AT #77: Rifles, Chinese don’t buy in Phoenix because they’re smart enough not to. Hell, only a fraction of Americans would consider those nasty places. Americans have no idea what the fascination Canadians have with places like Phoenix and areas of Florida. Is it only because these areas are cheap? If it is, I have news for you – They’re wastelands, for the most part, to most Americans. So, sure, you SHOULD get a good deal in an area in which most Americans would choose never to live.

In answer to your question, “So why don’t the clever Chinese chaps buy in Phoenix then? “: Many Chinese are seeking a Western-style lifestyle. The U.S. does not make it nearly as easy as Canada to immigrate to (yeah, we don’t allow anyone with $500,000 to just establish residency and become a citizen. That’s an interesting concept in which I hope never comes to the U.S.). The problem with this somewhat “open door” policy (as long as you have a half a million dollars LOL) is that when the going gets tough in China (and it is already starting to get tougher), the Chinese who have bought in Vancouver will abandoned their obligations there in order to take care of matters back home. Yes, I’ve already seen this happen. So, good luck, Vancouver! You’re going to need it.

#97 Paul on 02.10.11 at 10:47 am
#98 Paul on 02.10.11 at 10:49 am

Try this one. Click on Is RE dropping link.


#99 grantmi on 02.10.11 at 10:55 am

#77 Rifles on 02.10.11 at 7:59 am

“For mainland Chinese, Metro Vancouver is what Phoenix or Palm Springs is to Canadians right now… cheap.”

So why don’t the clever Chinese chaps buy in Phoenix then? Perhaps they’re worried they will be hounded by the local police and accused of being illegal Hispanic labourers. That aside they could do a hell of a lot better there.

Because the U.S. doesn’t just OPEN their doors to immigrants with a load of cash like we do!

There are two ways into Canada! The a rust bucket boat, or a bag full of cash… and say I’m going to open a business here.. and I want to buy a house!!


#100 TBay Convert on 02.10.11 at 10:58 am

What I don’t understand is if these buyers from mainland China find Vancouver soooooo cheap, would they not also find that Phoenix and Palm Springs that much cheaper? Am I missing something here? Do these asian buyers love rain? Please enlighten me.

#101 CREA Circle Jerk on 02.10.11 at 11:02 am

#52 Billy Bob said:

“I’m pretty sure that if it wasn’t a “visible minority” buying up our city and making real estate completely unaffordable for our children, politically correct Canadians would put a stop to it. The government should be making decisions that serve the best interests of our own Canadian children – not the best interests of wealthy realtors, developers, and foreigners.”

This government, just like all governments in the world, are beholden to special interests. The people who have H & F’s ear are the lobbyists of big corporations. In this case, the banking, real estate and other business interests endorse bringing in foreigners to prop up RE because it serves their financial interests. The government just like corporations don’t give 2 $hits about their constituents (the common people). Corporations view the world as one big market – they don’t give a damn about what’s good for people.

The sooner people realize that, the better they can come to accept that fact.

#102 eddy on 02.10.11 at 11:05 am

Between blowing up Real Estate bubbles and blowing up Canadian PATRIOTS in Afghanistan, Harper stiff finds time for GLOBALIZATION:


#103 AACI-Okanagan on 02.10.11 at 11:08 am

#40 Thar She Blows on 02.10.11 at 1:30 am

Hey, what’s sadder? A bunch of flippers and speculative buyers trying to time the RE markets rising in value, or a bunch of renters trying to time it’s fall in value?

I have yet to figure this out.

91 fancy_pants on 02.10.11 at 9:54 am

I hope a lot of homeowners burn and the pain is heavy when the hammer falls. I have been living below my means for a long time (slow pain) so fk em buggers who have lived beyond their means… hope they suffer HARD.

You are sad and bitter man.

#104 mn_op on 02.10.11 at 11:16 am

If you buy a house and economy turns topsy-turvy, you still have an option of stopping the mortgage payments. Banks wouldn’t care as they will be insured. So you get to stay free for a while and who knows, you might be able to keep the house. This cannot work with renting.

#105 Tom from Mississauga on 02.10.11 at 11:28 am

That is a weird “news” release. All local agents renting a copter and inviting Global along for the ride. Talking about what people on the other side of the world are going to do. Anyone who believes that, wow. But really, commission on 1 sale pays for it all. It’s going to pay off for them.

#106 Bottoms_Up on 02.10.11 at 11:39 am

#67 Jas Girn on 02.10.11 at 4:23 am
Didn’t you know everything is more expensive in Canada? We get hosed on everything, from car prices to clothes prices to gas prices to wireless prices. Why should real estate be any different?

#107 Junius on 02.10.11 at 11:41 am

#34 Morry,

The key to the Olympic Village deal for Aquilini is not the village. That is the carrot. They key are the concessions he is trying to get for the land around Rogers Arena on the other side. Other development proposals have included the open space West of the village to the Cambie bridge. However the City was not prepared to deal this land cheap or change it from its current zoning (good call IMO).

The land around the stadiums downtown North of Pacific is less valuable long term so it might work. Obviously he wants more density and other concessions.

#108 AACI-Okanagan on 02.10.11 at 11:52 am

Reading the posts in the blog just confirm what I have been saying, when buying real estate think long term. All the renters that are waiting for another drop in prices. will just create what they fear, another bubble, when then jump in and buy, and by that time, the Mrs and I should be ready to sell. Thanks!

#109 The InvestorsFriend (Shawn Allen) on 02.10.11 at 11:58 am

Statistics canada has a New House Price index.

Data for December show it still rising.

Any bets on where it will head by June?


#110 CrowdedElevatorFartz on 02.10.11 at 12:00 pm

@ #53 wetcoaster
The only thing WORSE than Global TV’s constant “boosting” is CKNW.
Main Stream Media ALL deserve the lost ratings they continually whine about.
Newspapers with thicker “pull Out” Real Estate sections
TV with 10 minute stories in prime time about “deals”
Radio giving “ozzie” an endless Podium as long as he advertisizes before and after his spiel.
Buy and Economist magazine and read Garth. Both have more insight than these, self important little shites

#111 Timing is Everything on 02.10.11 at 12:06 pm

“…the only thing we have to fear is fear itself”

Not my quote, but I heard it somewhere before. Ha! Garth, you know better…many opportunities ahead. Winners and Losers.

It’s never too late to make a better decision….

…except Dougie’s sister.

#112 A Voice of Reason on 02.10.11 at 12:06 pm

There is definitely an element of financial illiteracy that is hurting Canadians. If I had a nickel for every time someone told me that investing in stocks is “risky” (as if buying a home and leveraging one’s self by upwards of 95% is safe) I would be able to join all those foreign investors in Vancouver and buy myself a 1.2 million dollar house.
What also amazes me is that people trash the stock market (not worthy of providing a source of income and wealth gain etc. etc.) yet devote a good portion of their life working for and depending on paycheques from those very same companies they want no part of ownership in.

#113 BCRenter on 02.10.11 at 12:18 pm

My wife and I rent and because of that we live in a place we couldn’t afford if we owned it. We live in a nice house overlooking the ocean in a very quiet forested area. A 5 min walk to an uncrowded beach we share with maybe 2 dozen other people on a hot sunny day. It’s a beautiful lifestyle and it only costs us $1500 a month in rent.

The landlord paid $460K in 2006 for the house. At that price the mortgage would be close to double the rent we are currently paying, sucking an extra $18K a year out of our cash flow.

I have always “wanted” to own but now I’m not interested because it doesn’t make much sense today. We are saving close to $18,000 a year by not owning, not to mention the $50K we would need to put down. I ask myself, how does buying make sense and I can’t come to any rational conclusion.

Now I just hope the owners can afford to continue to pay their share of the rent to cover the mortgage.

#114 Live Within Your Means on 02.10.11 at 12:22 pm

#181 Michelle on 02.09.11 at 4:49 pm

And FYI…”head cheese” is not made out of Canadian Cheddar


LOL. DH eats it when in France. Quite different from that which is offered here. His parents also eat ‘cold cuts’ with an aperitif. I find most too fatty now, tho I grew up eating them, along with European cheeses as my Dad was a 1st gen. Euro immigrant as were most of my high school girlfriends. We spend spend a lot on cheese, etc. as my hubby usually comes home at noon and has it with his baguette and always after his supper. I love cheese but eat very little. I have a small appetite.

Pardon my OT comment. I don’t know enough about investments and the financial markets to offer advice. We’ve been invested since ’98 but in MF’s as we didn’t know better. Had paid off our mtg., had money to invest and interviewed 3 people, all MF guys. Even took out a 30K investment loan yrs later. Experienced 3 downturns. Did not pull out, but have just ‘maybe’ broken even since then. Our MF guy used to come to our house 1 or 2 X/yr. Have now switched to a fee based, no commish FA.

#115 Ret on 02.10.11 at 12:30 pm

Does anyone have the clip of the Donald (Trump) that was on tv last night? Brilliant IMHO. Please post link if available.

#116 Ret on 02.10.11 at 12:47 pm

Found it. Here it is. Click on the second picture down in the text.


#117 Kitchener1 on 02.10.11 at 12:49 pm

The American

Dont bother trying to insert logic into the debate here.

We are at exactly were US was in 05-06. Exactly.

30% minimum.

My Theory is that it will a a “flash crash” 12-18 months max to hit bottom. In the US everyone was holding out hope. There will be no such hope for Canada, with interest rates rising, for years to come it will be a quick race to the bottom.

Have you seen the commodity charts? if these number remain, we will be pushing an easy 6% YoY inflation for food.

#118 Bulls eye on 02.10.11 at 12:50 pm

Here in Calgary a friend of mine does not have much options to list his house for sale as the realtor request a 10,000$ deposit before they even consider listing the home. 5% down combined with the cooling of the markets have put them in negative equity. They are very close at giving up paying the mortgage and will likely throw the keys back to the bank. Luckily they live in Alberta and can technically “walk away”.

#119 TheBestPlaceOnEarth on 02.10.11 at 12:50 pm

Shiller is a fool when it comes to Vancouver Real Estate. Years ago he stated “Vancouver is the bubbliest City in the world” Those who listened to him (In regards to Vancouver) were left on the corner now shell shocked as property values skyrocketed. China real estate is booming and profits are being moved to Vancouver. Even a broken clock is right twice so maybe if Shiller keeps whining he might see prices drop one day in Vancouver 5% before heading their projectory upward. Beware of Shiller and the Economist magazine both these fools have been dead wrong on Vancouver Real Estate. Do your own research and you will discover the truth. What does a “big drop” mean? What parts of Canada? Shiller should think before speaking on a market he is clueless about
And remember Robert Shiller? He was the academic economist dude who forecast the dot-com crash and the US real estate collapse and is not considered a demi-god. He spoke in New York a day or two ago and said, “Canada looks to be headed for a big drop in home prices.” And where have you heard that before?

The voice of dangerous delusion. — Garth

#120 Throwstone on 02.10.11 at 12:51 pm

#95–Tired Vulture..

What CAN we do about it?

Canada will be set to fracture off into many ethnic sub-groups in due time.

Whether they be asian canadian, indian canadian, italian canadian, polish canadian, french canadian, jewish canadian, jamaican canadian etc… The point I think your making is what about the CANADIAN CANADIANS?

Perhaps its better to divide us by class. Upper, middle and lower, there by avoiding any potentially political incorrectness.

However, keep in mind the Federal Government can expropriate your land at any given time. You do not own your land, as if to be soveriegn from Canada, or within Canada; unless of course you have a signed reserve treaty verifying your address to be void of expropriation by any means and any reason by the federal government.

Also you do not have rights to the oil, gas or minerals to be found in it; or a river/creek running through it. If they want to put a road through your house, they pay you fair market value and that’s it your out!

This applies to those foreign investors or new immigrants…and old immigrants too.

So if the culture of Canada is not defined by food or language; its a disposition. Its how we treat other people living within a common boundary, with respect to how well they respect the charter of rights and freedoms and the constitutional laws as a whole.

So i do not really think we are ‘selling out’ as you see it. Yet we do have alot of work to do building patriotism in Canada.

If the greatest display of patriotism towards ones country is to die in its defense of tyranny and evil. Take a close look at our patriots. The CANADIAN CANADIANS!


#121 tran, Calgary on 02.10.11 at 12:52 pm

Flaherty warns of even higher mortgage rates after this week’s jump


#122 Kevin in Winnipeg on 02.10.11 at 12:57 pm

WINNIPEG’S resale homes market produced one of the highest returns on investment in the country over the past 11 years.

Who could have predicted this 11 years ago!

There is no return on investment until a gain is crystallized, and we are about to go into reverse. — Garth

#123 Mike B on 02.10.11 at 1:00 pm

Any way you slice it.. Whatever way you swing .. Statistics do not lie. If you got to guava.ca there is one unmistakeable fact you get from the charts. Inventory is very low and yet prices are still high. Inventory is almost as low as 2010 at just over 2 months compared to 2008 at almost 8 months. Average prices are about 6% higher than they were in 2010 and around 20% higher than 2009.
More importantly these stats do not take into consideration the February or March numbers. Those should see a shrinking of stock and an increase in prices. Anything half decent is selling. I had a realtor I know relatively well call me this morning asking if I wanted to sell . He told me he thought he saw the last of insane multiple offers but the other day he said a house went for 100K over asking. Can this go on forever? Not likely but once these prices go up it does take a helluva long time for them to come down. And if they did not go down substantially in 2008-09 when the financial world was imploding I do find it hard to believe that things will drop by much when interest rates go up. Keep in mind that interest rates are extremely low and any increase will simply put the mortgages into decent low territory. Hell, I thought 7 percent was low when I had a mortgage years ago.
As for the Chinese seeing things we do not see. I take that with a grain of salt. They bring a vision of the world different than ours as they see yearly increases in the China GDP close to double digits so they are somewhat biased. However, they also see potential and the ever increasing need for commodities. Canada is commodity rich so they see some potential. But lets be clear, they are not speculating based on the video, they are buying for them to live and raise families.
In Toronto, developers have purchased every scrap of available land that once was farmland and just put it into the land bank and will be waiting for the next boom. When??? Ask the demographics guys.

#124 Comboy on 02.10.11 at 1:01 pm


Yes, I too am beginning to think Canadians are being dazzled by the cheap prices and know nothing else about buying in Phoenix. I was looking to buy down there (who wasn’t) and I just had a feeling it was too good to be true,
WHY aren’t Americans buying as much as we are in these particular areas, there is something to that…
buyer beware…
Also the climate really freaks me out, too hot is the other end of the spectrum and I get hot easily, true Canadian, I can’t see myself being happy in that heat.
Is there any areas in US that are cheap that are better?
I was thinking Florida or Cali although there are negatives to worry about with both. Cali kind of freaks me out because of their economy and earthquakes but love their milder climate…

#125 TheBestPlaceOnEarth on 02.10.11 at 1:10 pm

“For mainland Chinese, Metro Vancouver is what Phoenix or Palm Springs is to Canadians right now… cheap.” — Global TV Vancouver

You got it folks. You see some people use helicopters to check out listings Canadians can’t.
Aquilini is a genius and made a fortune in Vancouver real estate while fool shiller told everyone Vancouver the bubbliest City on earth. Who made money in Vancouver during the last few decades Aquilini or Shiller. Can you imagine if Aquilini listened to Shiller LMAO sure wouldn’t own the Canucks now if he did

#126 wetcoaster on 02.10.11 at 1:13 pm

“funny how we don’t hear about this type of stuff on “global news” ”


there are multiple stories we never hear on Global because it would effect the government and the developers and Global’s “good guy” image.

Did you see the investigative report last nightby CBC on the company wanting to build the casino next to BC Place ? Same ones who did business with “notoriusly corrupt First Nations Indian Bands” and their casinos. Time magazine blew the whistle on these guys and we are still involved with this deal.

According to CBC, Paragon has a guy on the board of directors who used to be the head dude of the BC Lottery commision who pressured the government to replace the roof on the dome or no casino. He also had a stake in a Paragong casino deal in Alberta.

Where’s Global on this and many other stories just like it ? Not allowed to report the truth of these shady back room deals that might blow the deal, yet the Libs still whine about Glen Clark ten years later. Two faced bastards.

Check out this story at 3:15 into the newscast, talk about shady ! “No comment” says the developer.


#127 TheBestPlaceOnEarth on 02.10.11 at 1:15 pm

Rich Chinese are financial geniouses as opposed to fool Shiller. The Chinese invest in Vancouver because it is the Best Place on Earth and viewed as a solid investment. It’s not just Chinese though, high net worth investors from all over the world are safeguarding their wealth in Vancouver. West Vancouver for example is a melting pot of Middle East Oil money. Please come visit us in the Best Place On Earth. Those with TRUE Wealth not academic klaptrap theories like (i don’t even want to mention his name anymore as it i sickening) are buying hand over fist.

#128 Kitchener1 on 02.10.11 at 1:19 pm

Just for all you folks who think the govt will not raise rates.

Exhibt A


Whats this, the most powerful Bank in the world, the US fed has lost control of the tail end of the 30 year yield.

30 year fixed rate is now at 5.5%– and thats the market -spot-price so to speak, no bank profit margin on that. looks like the housing market will not be recovering anytime soon down south.

Exhibt B


what, the ECB is “forced” to buy back bonds? they can’t control interest rates?? Who’d have thought?

But no worries Canada with its 33 million population and BoC will have the ability to control interest rates. LOL

and wait what this


press release from the BoC circa march 2001- 10 years ago, the BoC rate was 5.25%– remeber the good old days when we actually had an real economy that could support 5.25% right after the dot com crash no less.

think it can;t happen again?? Naw, rates will be never be that high again. Just for some perspective, Greece/ireland was imploding at the very mention of 6% bonds, back when in 2001 Canada- a stable country had a BoC rate of 5.25%. Crazy difference a decade makes right.

that right there is all you need to know about our “economic recovery”.

See, when rates do hit 5% again- thats BoC rate, what will happen to real estate? think 2013-2014-2015. Yup, easy 40% haircut.

#129 Mr. Plow on 02.10.11 at 1:20 pm

Hey Garth…

Do you have a link to that TD report you are referring to about the rates?


#130 Prof ANON on 02.10.11 at 1:25 pm

@ #124 Comboy

In California, areas of Sacremento are nice. Anything south of there is a waste of time in my opinion. Anything north is worth a look. Coastal Oregon is my favorite.

#131 SwampLily on 02.10.11 at 1:28 pm

If someone has $500K mortgage debt on a half-million dollar house, he or she is a “home owner.” Maybe people are confused by that, and we should change our terminology to “home buyer” and when it’s paid off, THEN you’re an “owner.” :D

Re: sister from Florida – is there no learning curve?

#132 Mister Obvious on 02.10.11 at 1:29 pm

It’s worth repeating Garth’s response to #122:

There is no return on investment until a gain is crystallized, and we are about to go into reverse.

That nicely sums it up for everyone, everywhere.

#133 Ex-Cowtown on 02.10.11 at 1:31 pm

Not sure what the fixation is with Phoenix. Big pile of dust dirt and sand. Nice there for an hour when the sun’s rising and another hour when it’s setting. Other than that it sux.

From what I see, not much difference from running out to your heated garage and jumping into your heated car to go to the heated mall in Winnipeg in winter vs. running from your A/C garage to your A/C car to the A/C mall in Phoenix.

Good friend of mine lost millions in there in the early 80’s. Other’s did the same over the past few years. Rinse Repeat.

To paraphrase Nancy Reagan “Just say No to Phoenix”

#134 David B on 02.10.11 at 1:35 pm

Hey Garth are you going to say ” I told you so”

Vancouver’s Olympic village plans deep-discount condo sale
VANCOUVER— From Thursday’s Globe and Mail
Published Thursday, Feb. 10, 2011 9:00AM EST
Last updated Thursday, Feb. 10, 2011 11:06AM EST

Couple to this Harper is giving Quebec a new fancy Arena

Holy Smokes what a day …..


Egypt’s Mubarak —– Gonzo


Now the sparks will fly ….. (in both countries)

#135 PODUNK BC on 02.10.11 at 1:42 pm

We are trying to bail out here in podunk BC. Market took a bit of a hit in this area in 2008 and has recovered little since. Lately there seems to be a buzz in the area and I have seen 5 realtor signs with SOLD on them in the past month. We are trying to take advantage of the situation and we put our house up for sale just short of 2 weeks ago. We have had a few showings and a potential buyer viewing the house for a second time today. We are keeping our fingers crossed we get a bite and can get the hell out of dodge.

#136 j shum on 02.10.11 at 1:46 pm

I make 60,000 as a programer. I will likely be single all my life so that will be income and I don’t see it increasing. I would qualify for that saskatoon lone. Let me tell you I don’t have a car, I rent and it is hard to save up the down payment. I am not pissing my money away. Even in the worst areas of town in winnipeg or for a house that is not decent shape, I believe you need to pay between 120-170. West end houses listing for 120,000. Decent areas are 200,000 which mean you need 40,000 for down payment. I don’t feel entitled to a house. I hate living in my leaky apartment. Why is the goverment getting involved in this. Or rather Why wouldn’t the government not get into to loan business if they can afford to. Nice way to make some money. I just wonder what will happen when and if the people can’t pay back the loans

#137 Kevin in Winnipeg on 02.10.11 at 1:51 pm

There is no return on investment until a gain is crystallized, and we are about to go into reverse. — Garth

The emotional involvement of having a home would stop most owners from realizing these gains.
Spring will be the turning point for Winnipeg if there is going to have a large correction. I really have my doubts though.

#138 Carpe Diem on 02.10.11 at 1:52 pm

Garth – that stung with your censorship of my comment yesterday – it may have been abit against what you stand for, but isn’t that what a blog is all about, if 99.9% agree – I ask what % percentage disagree but are blocked from expressing their views.

Again, the cheerleaders in the group are all gitty about the pending real estate implosion. This vortex will suck in every man, woman and child who bought into real estate. Well cheerleaders – remember the old saying “a country is as good as the people who live there” – so if we lay waste to the very fabric of our society – lets see how that all plays out.
That mad max films may not be so far fetched as we use to think it was – desperate people do desperate things!

The more I read here, the more I see very frustrated and bitter renters who missed out on the most profitable real estate run, so you can buy a house from a family who now lives in a cardboard box – nice mentality – so blast your hatred at me! I own, I can take it!

Garth, still appreciate your blog – though yesterday left a bitter taste in my mouth – open and fair discussion may not be exactly what is protrayed in here…to bad!!

Just don’t give me legal advice, and we will get along great. — Garth

#139 Bill Wheatley on 02.10.11 at 1:54 pm

I campaigned on fiscal responsibility, financial transparency and sustainable programs. Voter turnout was low, 20%, and I received about 5% of the votes.
I discovered the Mortgage Flexibility Program 2 weeks ago and thought the public should know.
At least loans are better than grants.

#140 kc on 02.10.11 at 1:56 pm

126 wetcoaster on 02.10.11 at 1:13 pm

and people slag CBC…. Is it any wonder why Bill Good left ctv?? he couldn’t read the BS that he couldn’t believe…. however, on NW he still walks the parrot line.

You wrapped it up nicely there… cheers

#141 Devore on 02.10.11 at 1:56 pm

There is no return on investment until a gain is crystallized, and we are about to go into reverse. — Garth

A point lost on all who proudly proclaim how much their house has appreciated. So your house is worth 50% more than 10 years ago.. and? Good for you, you want a pat on the back? Until you sell it and realize the gains, all you have is a more expensive house to insure and pay taxes on.

Even those who take equity out only do so to be able to lick granite with the Joneses, check themselves out in the stainless steel fridge, get new wheels, or take that well deserved vacation. With the attitudes average Canadians have to the stock market, the number who do anything useful with their equity must be statistically insignificant.

#142 Abitibidoug on 02.10.11 at 2:09 pm

In response to post #100 by TBay Convert, I wonder the exact same thing. All this money piling into expensive markets like Vancouver, and meanwhile Garth said about in the United States: Houses are more affordable now than in 35 years. And still, people do not buy.

To illustrate my being puzzled, imagine a feedback control like a governor on an engine. When load increases and the speed drops, it opens the throttle more to increase the amount of fuel, which produces more power, and that pulls the speed back up. If the speed goes too high, it closes the throttle, which cuts the power, and the speed drops. Why don’t markets (for real estate, stocks, etc.) behave like that? Shouldn’t there be a buying frenzy in places like Phoenix, to take advantage of the lower prices, and a selling frenzy in places like Vancouver so people can lock in their gains? One of life’s strange paradoxes.

#143 Victoria on 02.10.11 at 2:13 pm

Why don’t rich Asians ever come to Victoria?????

#144 Alex on 02.10.11 at 2:17 pm

#133 Ex-Cowtown: I suppose we all have different opinions. I was in Phoenix/Scottsdale just this January. Climbed Camelback Mountain (like the Grouse Grind, but prettier, with better views and right in the middle of the city), rode our bicycles without being impacted by rain/snow/cold, bought beer at a third of the price it is here, looked at homes that are a third of the price they are here, watched gorgeous desert sunsets every night, lay in the sun just soaking up the warmth, etc. Lost so much of the Vancouver rust. Did not have time for the bazillions of events that take place in a city that size (sports, entertainment, art, culture), but there’s always next time.

#145 Live Within Your Means on 02.10.11 at 2:22 pm

#121 tran, Calgary on 02.10.11 at 12:52 pm
Flaherty warns of even higher mortgage rates after this week’s jump



F & H created it with 0/40 down and now they are all over the news pretending that they are protecting consumers. Sh*it, they were the ones who wanted to deregulate the banks, etc. before they got into power. Talk about sleezy, lying, hypocritical b’tards.

#146 TheBestPlaceOnEarth on 02.10.11 at 2:24 pm

Anybody seen my meds…damn it! Shiller, did you hide my meds again?

#147 Live Within Your Means on 02.10.11 at 2:39 pm

Has anyone noticed how this govt. is spending our tax $$$$$$$$$$$$$$$$ day, eve, middle of night, on multiple tv channels, telling we Cdns how this govt. is protecting children’s health and advising adults about how their savings are protected by the banks, etc.

I’d really like to find out how much F & H are spending on advertising programs that have existed before they came into power. Unfortunately, we’d probably have to wait a couple of years before the PMO would OK such stats.

#148 poco on 02.10.11 at 2:39 pm

#119 Best place–not that i take anything you say as fact but the one statement in post 119 struck home
“Do your own research and you will discover the truth!”

exactly what i do—-a little research everyone can do

i took 20 random mls numbers from the west end condo market in Vancouver (not west side–the downtown area)–random prices-low 200k up to 900k
took these mls numbers to my realtor and sat down and got the scoop on all 20 listings –guess what

the Vancouver market that’s hot—-well it’s not
7 listings were recent listings no price changes
4 listings listed last summer –no changes
1 listing from july–10k up in nov.
6 listings from the spring of 2010–numerous price drops and still on the market
the most surprising was that 2 listings were selling for less than the owners paid

so yes,please do some research–it ain’t hot everywhere

#149 Maxamillion on 02.10.11 at 2:41 pm

# 115 Ret

Piers Morgan interviews Donald Trump


#150 Heloguy on 02.10.11 at 3:03 pm

Throwstone wrote: “Also you do not have rights to the oil, gas or minerals to be found in it”.

In Alberta if the land was owned prior to Alberta becoming a province (1905), and the property has remained in the same family ie: passed down, then you do own the oil, gas, and minerals found therein.

#151 The InvestorsFriend on 02.10.11 at 3:05 pm

Number 132 Mr. Obvious says:

It’s worth repeating Garth’s response to #122:

There is no return on investment until a gain is crystallized…

Why repeat one of the dumbest and most often repeated investment claims that there is?

Are you telling me that someone sitting on Berkshire Hathaway shares that have risen from about $14 in 1965 to a recent $140,000 (a cool 1 million percent) has not made a gain just because they still hold?

Are you telling me that Warren Buffett actually has not made a $50 billion gain since he has not crystalized?

Gains are measured by market prices. You don’t have to crystalise for it to be a gain.

If you crystalise you do lock it in ( less any taxes) and then what? put it back in the market?

It’s dumb advice and is usually spouted by people who are jealous of those with big gains. Which they like to call “paper” gains.

This is just a comment on that dumb advice. As far as houses yes I think the gains (which are real) will shrink.

#152 jess on 02.10.11 at 3:18 pm

steve : watch Mr. Black recap on the s&loan fraud
read about the Texas model and “what held in portfolio”
meant….good history on how and why they deregulated.



61 Derek
…and they called Morgan Kelly an egghead in Ireland and we all know the result

and now look at this headline…
IMF boss calls for global currency
Dominique Strauss-Kahn, head of the International Monetary Fund, thinks a new world currency would calm economic instability

International policymakers have become increasingly concerned about the threat of currency wars as struggling governments try to hold down their own exchange rates as they clamber out of recession.

Strauss-Kahn admitted that there were formidable hurdles to achieving a greater role for SDRs, but he warned that without urgent action, the simmering conflicts in the international financial system could tip the world back into chaos.

“Global imbalances are back, with issues that worried us before the crisis—large and volatile capital flows, exchange-rate pressures, rapidly growing excess reserves – on the front-burner once again. Left unresolved, these problems could even sow the seeds of the next crisis,” he said.

China, which holds much of its $2.85 trillion mountain of reserves in US Treasury bonds, has repeatedly expressed unease about the value of the dollar, while American politicians have complained that Beijing gains an unfair advantage by keeping its own currency cheap.

#153 jess on 02.10.11 at 3:21 pm

A damning report on the International Monetary Fund’s failings in the run-up to the global financial crisis has blamed “groupthink” and “intellectual capture” for the inability of the Washington-based organisation to spot Britain’s looming banking crash.

The body set up to monitor the IMF’s performance said risks were downplayed, light-touch regulation lauded and overconfidence displayed in the resilience of banks in the City and on Wall Street that proved to be vulnerable when the mood turned sour in the summer of 2007.

In a 50-page assessment peppered with harsh criticism, the IMF’s independent evaluation office (IEO) said few clear warnings had been provided about the risks and vulnerabilities of the global financial system in the years from 2004 to 2007. It highlighted a health check on the UK in 2006 that said banks were in good shape, praised City regulation and expressed few concerns about the mortgage market….

#154 pijar on 02.10.11 at 3:28 pm

Money talks BS walks.
There is a reason for everything in life and makes sense even if not understood by masses. There is always a reason for a certain price level. Vancouver is and will be most expensive in Canada as demand is always upheld by domestic buyers form Ontario and Alberta. If the price drops Albertans, Ontarians, Chinese buy… everybody buys! – prices go back up. Last I checked White Rock was not as expensive as Vancouver. As RE is local those who buy don’t care about those who cannot afford it they buy cause they CAN at the price level THEY see as reasonable not someone who rents a basement suite and goes on this blog complaining. Move to China start making cheap crap for Walmart and make enough money to buy a house in Vancouver. There is your solution! Generalizing is always faulty.

#155 Still renting, hope to buy some day on 02.10.11 at 3:30 pm

in response to #138 Carpe Diem’s comment below

Not all renters are frustrated and bitter. Just like not all owners are greedy, arrogant and self-satisfied.

Garth’s blog is a warning to those who believe that real estate “always goes up”. This current boom cycle is at least five years past its due date. Anyone who is not involved in pumping RE for their own reasons (smug homeowners, RE agents, banks etc) can see that. Unfortunately if 70% of Canadians are homeowners, that becomes the dominant theme…”look at me, I am so smart flipping houses, I make more doing this than from my job!”.

If mortgages had remained capped at 25/25 houses the bubble wouldn’t have formed and houses would be worth a small fraction of the ridiculous levels they have now risen to.

Unsustainable. I agree with Kitchener 1, we are in for a 30-40% haircut for sure. That doesn’t make me bitter…it just reflects long terms housing affordability metrics.

“….The more I read here, the more I see very frustrated and bitter renters who missed out on the most profitable real estate run, so you can buy a house from a family who now lives in a cardboard box – nice mentality – so blast your hatred at me! I own, I can take it!…”

#156 Heinz Skitzvelvett on 02.10.11 at 3:38 pm

@Carpe Diem: “The more I read here, the more I see very frustrated and bitter renters who missed out on the most profitable real estate run”

At least in my case, I’m not bitter at all about renting, and very happy to see some people selling and locking in potentially life-changing profits.

What bothers me is the manner with which governments have rigged the game to keep the economy going; we saw it in Sask. this week. Housing has become the new casino to many government sin need of revenue.

This game does not end well, even for those who have been prudent, be it renters who refused to pay a steep premium on the largest purchase of their lives, or homeowners who stayed within their means and left a few bullets in the barrel when interest rates rise.

It’s very much like medical premiums and the cost of reckless behaviour on the cost of health care. We’re all free to smoke and drink as little or much as we want, eat as little or much fried food or refined sugar as we want, etc. But in the end, everyone pays for your diabetes, your lung disease, your quadruple bypass.

When the CMHC goes on life support and people start blaming the government for keeping the trough open too long, you can rest assured that not long after you’ll see a taxpayer-led bailout.

#157 ian on 02.10.11 at 3:39 pm

Watch this series.

First the Europeans come to N.A. and wipe out the natives Indians and the environment and now the Chinese are coming over to finish the job by first buying us out and then wiping us out.

This is happening right before our eyes and yet we sit around and do nothing.

As for our Gov’t, they don’t produce anything but more laws and regulation because they have nothing else to do. They are the welfare bums. We are the collateral damage.

How much more of this crap are we going to take.


Enjoy the series!

Xenophobia. — Garth

#158 Jan Etter on 02.10.11 at 3:42 pm

#50 Jane on 02.10.11 at 2:17 am
“…”[Robert Shiller] spoke in New York a day or two ago and said, “Canada looks to be headed for a big drop in home prices.”. I’d like to hear/read the rest of what he said. Can you link your source please?

“…the household savings rate in Alberta and Ontario is zero, in BC it’s actually negative.”. How do we get negative zero savings?”


Somebody posted this yesterday, but to save you the trouble of rereading the whole comments section here it is:


Re household savings rate, the report here http://www.td.com/economics/special/db0211_householddebt.pdf, also posted yesterday by someone I believe, on page 2 cites B.C.s savings rate as negative, which means B.C.ers spend more than they make.

#159 wetcoaster on 02.10.11 at 3:42 pm

“Why don’t rich Asians ever come to Victoria?????”

Maybe cause there’s no one over here to launder the money ? God knows there’s enough dirt between Victoria and Port Hardy they could start a new country.

#160 Reasonable88 on 02.10.11 at 3:43 pm

Great , now the Mainland Chinese are going to buy up all of the good deals in White Rock, so when I retire later in life it will no longer be affordable. We may laugh at them thinking they are buying into a falling market, but in the long term the sheer number of buyers will boost prices
to unheard heights in White Rock for the next five years
or more.

#161 Bulls eye on 02.10.11 at 3:46 pm

On the subject of Winnipeg housing gains…they have some of the Highest property taxes around. Please include that in your equation.

#162 Adam in Montreal on 02.10.11 at 3:47 pm

#138 Carpe Diem on 02.10.11 at 1:52 pm

“The more I read here, the more I see very frustrated and bitter renters who missed out on the most profitable real estate run, so you can buy a house from a family who now lives in a cardboard box – nice mentality – so blast your hatred at me! I own, I can take it!”

What makes you think we want to buy houses. I think few renters here write about how they feel left out. Many (myself included) make it very obvious that we are in fact happy not to have the additional (and often unbudgeted-for) expenses and time commitments that come with home ownership. Quite simply, I prefer the freedom that renting brings, along with the fact that I can afford a home closer to the city centre with all of its amenities. I laugh at my house-poor friends who are commuting for 90+ minutes EACH WAY, 5 days a week! Gawd – that’s 15 hours each week spent in a damned car getting to work. WHAT A WASTE OF TIME AND LIFE.

And I still say that the “myth” of financial security through home ownership has been just that. The current crop of boomers is not where the real estate and investment industries told they would be today. Instead, almost 50% of their homes are still heavily mortgaged at this late stage of life — many of them have 2nd mortgages. All of this to pay for the lifestyle that comes with the “keeping up with the Joneses” home in suburbia. As they begin to ponder how close retirement is, they still owe a lot on their mortgages, and we are entering a period when home prices will fall. How angry and frutstrated they must be.

For me, I don’t take any pleasure from seeing people suffer financially. My point is that Garth’s blog and the comments that follow confirm that I’ve made the right decision and to be honest, I’m totally sick of home owners not understanding why I would choose to rent when I earn over $100K per year.

#163 jess on 02.10.11 at 3:50 pm

Investment Act who are they kidding?????? Maybe they should read treasure island before they make a decision on that takeover merger of technology

The latest heist has been explained to me by the former tax inspector, now a Private Eye journalist, Richard Brooks and current senior tax staff who can’t be named. Here’s how it works.

At the moment tax law ensures that companies based here, with branches in other countries, don’t get taxed twice on the same money. They have to pay only the difference between our rate and that of the other country. If, for example, Dirty Oil plc pays 10% corporation tax on its profits in Oblivia, then shifts the money over here, it should pay a further 18% in the UK, to match our rate of 28%. But under the new proposals, companies will pay nothing at all in this country on money made by their foreign branches.

Foreign means anywhere. If these proposals go ahead, the UK will be only the second country in the world to allow money that has passed through tax havens to remain untaxed when it gets here. The other is Switzerland. The exemption applies solely to “large and medium companies”: it is not available for smaller firms. The government says it expects “large financial services companies to make the greatest use of the exemption regime”. The main beneficiaries, in other words, will be the banks.

But that’s not the end of it. While big business will be exempt from tax on its foreign branch earnings, it will, amazingly, still be able to claim the expense of funding its foreign branches against tax it pays in the UK. No other country does this. The new measures will, as we already know, accompany a rapid reduction in the official rate of corporation tax: from 28% to 24% by 2014. This, a Treasury minister has boasted, will be the lowest rate “of any major western economy”. By the time this government is done, we’ll be lucky if the banks and corporations pay anything at all. In the Sunday Telegraph, David Cameron said: “What I want is tax revenue from the banks into the exchequer, so we can help rebuild this economy.” He’s doing just the opposite.

These measures will drain not only wealth but also jobs from the UK. The new legislation will create a powerful incentive to shift business out of this country and into nations with lower corporate tax rates. Any UK business that doesn’t outsource its staff or funnel its earnings through a tax haven will find itself with an extra competitive disadvantage. The new rules also threaten to degrade the tax base everywhere, as companies with headquarters in other countries will demand similar measures from their own governments.

So how did this happen? You don’t have to look far to find out. Almost all the members of the seven committees the government set up “to provide strategic oversight of the development of corporate tax policy” are corporate executives. Among them are representatives of Vodafone, Tesco, BP, British American Tobacco and several of the major banks: HSBC, Santander, Standard Chartered, Citigroup, Schroders, RBS and Barclays.

I used to think of such processes as regulatory capture: government agencies being taken over by the companies they were supposed to restrain. But I’ve just read Nicholas Shaxson’s Treasure Islands – perhaps the most important book published in the UK so far this year – and now I’m not so sure. Shaxson shows how the world’s tax havens have not, as the OECD claims, been eliminated, but legitimised; how the City of London is itself a giant tax haven, which passes much of its business through its subsidiary havens in British dependencies, overseas territories and former colonies; how its operations mesh with and are often indistinguishable from the laundering of the proceeds of crime; and how the Corporation of the City of London in effect dictates to the government, while remaining exempt from democratic control. If Hosni Mubarak has passed his alleged $70bn through British banks, the Egyptians won’t see a piastre of it….

#164 Torquemada on 02.10.11 at 3:59 pm

The Saskatoon program is far from unique.


#165 somejerk on 02.10.11 at 4:04 pm

#11 Peter Pan

Not stupid , insane…

Insanity: doing the same thing over and over again and expecting different results.

#166 BrianT on 02.10.11 at 4:06 pm

#142Abitibi-I hate to break the news to you, but the average American at this point is flat busted (broke). Yes, the housing is cheap, but the money simply isn’t there to buy the house for cash or the credit is screwed or the job is kaput, which is why the % of renters is increasing. The MSM has done an excellent job convincing the morons that the USA is in a magical recovery, but nothing could be further from reality.

#167 bill on 02.10.11 at 4:08 pm

mr aquilini is so rich it just doesnt matter.
eventually re will go back up but not for a very long time. his children [equally rich] can afford to wait.
however all the rest of the folks who bought the ”o down 35 to pay ” are screwed.
they will run out of money and buyers.

but go ahead old son buy now see what happens.
report back here on how its going , eh?

#168 BrianT on 02.10.11 at 4:20 pm

#124Com-IMO Phoenix is done. Miami has a shot at recovery down the line as the foreign money will help a lot.

#169 Victor on 02.10.11 at 4:26 pm

#138 Carpe Diem on 02.10.11 at 1:52 pm

The more I read here, the more I see very frustrated and bitter renters who missed out on the most profitable real estate run, so you can buy a house from a family who now lives in a cardboard box – nice mentality – so blast your hatred at me! I own, I can take it!


You are sadly making assumptions that are without basis. Here’s my story as someone who is a renter at present:

1) Purchased a home in Toronto in 2001 when the market was quiet for $730K.
2) 8 years later, sold the home in 2009 for $1.2M.
3) Took care of the mortgage debt, paid off credit cards, line of credit, etc.
4) Became totally debt free.
5) Started renting immediately; a nice 2 bedroom in central Toronto for $1500/month.
6) Been steadily investing in dividend paying stocks, preferred shares, agricultural commodities, precious metals and most recently real return bonds.
7) Been enjoying double digit gains in my portfolio in the last years based on my investment decisions.

I’ve now got money in the bank, am happily married, stress-free, have a good job making $80K/year; and I have holdings which are increasing inside my TFSA, RRSP and non-registered brokerage account every year.

When the time is right, I will probably look at buying real estate, but there is nothing forcing the issue. My wife and I are happy to wait it out for the next 3-5 years for an opportunity.

#170 BrianT on 02.10.11 at 4:33 pm

#151Investor-you statement could be accurate for homes owned solely by men. For most women, the more valuable a house becomes the more difficult it will be to lock in the gain as the perceived loss of status will work against it. The house will be easier to part with AFTER all the equity has been lost. The Cape Coral example sounds ludicrous at first glance but it is all too common.

#171 betamax on 02.10.11 at 4:34 pm

#127 TheBestPlaceOnEarth: “Rich Chinese are financial geniouses [sic] as opposed to fool Shiller.”

Yes, the fact that Shiller called other bubbles successfully is meaningless. It’s different here this time.

“Those with TRUE Wealth not academic klaptrap theories like (i don’t even want to mention his name anymore as it i sickening)…blah blah blah.

If you’re sickened by the mention of someone’s name merely because they have a different opinion, then you’re seriously messed up.

Some here have thought your posts to be extended satire, because no one could be so consistently asinine. Apparently they were wrong.

#172 CrowdedElevatorFartz on 02.10.11 at 4:35 pm

Easy there BestPlaceOnErf.
You were typing so fast on that last post you almost slipped back into Pidgeon Engrish

#173 Chris in Langley on 02.10.11 at 4:47 pm

Strange…the topic is heavy into the real estate industry and how they operate, and yet complete silence from “Sybil” in Kelowna.

#174 TakingResponsibility on 02.10.11 at 4:47 pm

Okay, okay, I’m trying to think my way through this “foreign” thingy.

We, Canadian Canadians (umm, white people?), do not think much of “foreign” immigrants (umm, not white people?) who buy real estate at inflated prices?
No wait – it is foreign immigrants who inflate prices. That’s what it is. Ah ha, now I understand the hostility.

And, of course, we Canadian Canadians are intelligent and know ‘the markets’ – unlike those foreign immigrants who are buying real estate – an asset that will deflate. Ah ha, now I understand – who wants to be dumb – like them.

On the other hand….

We, Canadian Canadians, (in Alberta, at least) love ‘foreign’ firms who ‘invest’ in oil and gas extraction. Now those are intelligent and knowledgeable ‘foreigners’. Worthy of praise. Invest in resource extraction. Export product. Low cost. Highly valued product.
And, we Canadian Canadians are eager for the jobs. Heck ya’. Of course, only we Canadian Canadians are ‘able’ to handle these grunt jobs so ‘foreign’ extraction firms should leave ‘foreign’ workers home. As long as foreign workers stay home, we Canadian Canadians will happily work for foreign firms and happily live in the waste land. Really, we really don’t mind that foreign firms use and pollute our drinking supply, etc.
Why? Because we want them to make a huge profit – we ‘invest’ in energy. Heck yaaaa’

Did I get it right? Alas…, I fear I may be a typical Canadian Canadian – unable to think myself out of a paper bag. : (

#175 Mikey the Realtor on 02.10.11 at 4:51 pm

Shiller knows diddly, got it wrong in 08 and will get it wrong once again. It’s just a matter of time before other provinces follow suit with free money thrown at renters.

Government intervention is not over by a long shot, they will raise rates and will figure out how to keep the party going, this way everyone wins, except for renters waiting for the sky to fall.

#176 S.W. Ontario on 02.10.11 at 4:54 pm

No the Dumbest People Don’t live In China…they’re parents like us who are willing to co-sign a mortgage so their son won’t throw away his money on renting. Well, that what the Baby Boombers were brain washed to believe. Renting was throwing your money away !
So a small Condo was bought.

Our son’s condo was bought in the middle of 2008 at .76% below prime with no down payment .Plans for work in the city didn’t pan out after University and he now has a 1 hour drive to work.
In order to save gas and the long commute he wanted to move closer to to where he works and rent the Condo and keep on paying the morgage.

I had finally woke up to what was going on in the US and wanted it sold, but couldn’t get my son to listen or his Dad.
So I wrote on this blog to Garth and asked him for advice, on what to do.
He was kind enough to answer . Garth told me , renting it was a blank- blank idea.
Our son still wouldn’t listen and insisted I call the RBC Bank who held his mortgage and talk to a mortgage specialist. RBC said; our son could take over the morgage with only his name on it, with the same rate and the same terms but he would have to come up with the 5% down. Well that was the end of the debate.

Where were you Garth when we were dumb enough to barely notice what a mess the US was in and think everything was fine here in “Canada’s Magical Kingdom” and no money down and below prime interest rates were some kind of gift from God ?

Did you notice how many headlines Canada’s Bailout made ? ? ?

I found Michael Ruppert and the “Collapse Network” after I watched his “Collapse” movie at the beginning of last Nov.( that scared the” hibbey- jibbey’s ” out of me ) I started paying a great deal of attention to what was really taking place all over the globe and the housing market mess in the US.
I didn’t find Garth until I stumbled on to his books on a site where I was getting Canadian news. From reading one of his books I found this great site, where he tries his darnest to get us Canadians onto the right road.

After reading Garth’s write up today I would be freaking out if our son was still on his “I want to rent my Condo” idea !
I was really late finding your site Garth, but I am so gald I finally did find it ! Love those pictures and your crazy sense of humour ! Keep up the good work, your getting through to at least some of us !

d with
Our son is selling the Condo and we are paddling like crazy to get it ready to be on the market as soon as possible, before this March 18th deadline and hoping like hell some buyer is going to be stupid enough to give him at least what he paid for it.
I would not even bring the information Garth is giving out here up with any neighbour or freind as I am afraid it seems to look like it is the Magical Canadian Kingdom to most people and we are immune to Global events and BUBBLES.

#177 EJ on 02.10.11 at 4:57 pm

I read a fascinating article the other day describing the altered behaviour of certain animals infected with a specific parasite or fungus. These parasites would cause the host to perform tasks they would never otherwise do, usually resulting in the host’s demise and the parasite being reinserted in the top of their life-cycle chain.

I wonder if such an infection occurs in people, causing them to have an inescapable desire to hand over all of their money to the banks through irrational investment decisions, while at the same time causing a numbing, anesthetic effect that results in them being happy and oblivious to the obvious harm they are causing themselves. Some sort of “banker bug”, perhaps.

That “bestplaceonearth” guy seems to have a pretty severe, late stage infection, and might be a possible medical test study to see if this hypothesis is true.

#178 Ex-Cowtown on 02.10.11 at 5:00 pm

Throwstone wrote: “Also you do not have rights to the oil, gas or minerals to be found in it”.

In Alberta if the land was owned prior to Alberta becoming a province (1905), and the property has remained in the same family ie: passed down, then you do own the oil, gas, and minerals found therein.


Close but no cigar. Your granpappy would have had to acquire the mineral rights at the same time he bought the surface rights. Two separate titles, two separate pieces of personal property. He could then sell them to whoever he wanted to or passed them down. Tons of oil companies own the freehold mineral rights that they purchased from individuals.

#179 Ex-Cowtown on 02.10.11 at 5:08 pm

#151 investorsfriend

“Gains are measured by market prices. You don’t have to crystalise for it to be a gain.”


Huh? This makes no sense. It’s like saying the Oilers are up by two goals in the first period therefore they’ve already won the game.

Using your logic, CRA should be taxing you just for being up.

Or in Vegas, if you’re sitting at the table and your up by $10K it means you’ve won. You still can blow it all back and walk out empty handed or worse.

Even Warren Buffet could lose it all and end up down (however remote and unlikely that is).

No, until you cash out you’ve livin’ a dream. Garth is 100% correct.

#180 Devore on 02.10.11 at 5:08 pm

#151 The InvestorsFriend

It’s dumb advice and is usually spouted by people who are jealous of those with big gains. Which they like to call “paper” gains.

Real investors (take note) set realistic goals, which they evaluate periodically, and exit their position when they are reached (or cut their losses). This disciplined approach removes emotions from the investing process. You will not maximize your gains (although market timing is the ultimate in risky speculation strategies), but you will always make money by locking in profits. A 20% gain on a transaction is very significant. Take your money, and look for another 20% opportunity.

#181 Edmontonian Guy on 02.10.11 at 5:15 pm

Just came back from doing some banking at my usual bank. The person a have dealt with has worked at the bank for about 6 years. She says it is the deadest February they have ever seen. Unless 90% of all the people that have been buying RRSPs are doing it online-she told me. I haven’t seen it actually so slow in any month little alone a February. February is usually the busiest month of the year.
Will be interesting for me to see sales figures from MLS STATS, may mean the real estate market here in Edmonton has really hit a wall now that it is common knowledge prices have gone down to 2006 levels. I think people are realizing housing is a poor investment now. I hear though the savings rates in ALberta are sill at ZERO!

#182 It's Time on 02.10.11 at 5:32 pm

Are the Chinese dumb ????… Good Question….

Maybe they are…only time will tell.

Personally i would suggest them to buy Ashton Kutcher’s pad for 2.6 million instead of throwing millions in a Vancouver dump.


#183 wetcoaster on 02.10.11 at 5:39 pm

“Shiller knows diddly, got it wrong in 08 and will get it wrong once again. It’s just a matter of time before other provinces follow suit with free money thrown at renters.”

You are as delusional as Murbarak. You might as well say “just wait til September”. Where did your sidekick DA go ? Probably muzzled or fired for disclosing what we already knew, that a 3 month course does not make a genius.

#184 Slice on 02.10.11 at 5:55 pm

Looks like Global News has morphed into GlobalREMAX.

#185 Mister Obvious on 02.10.11 at 6:03 pm

“Are you telling me that someone sitting on Berkshire Hathaway shares that have risen from about $14 in 1965 to a recent $140,000 (a cool 1 million percent) has not made a gain just because they still hold?”


#186 The American on 02.10.11 at 6:08 pm

AT #124: Comboy, I couldn’t agree with you more. Americans NEVER wanted Phoenix. The only Americans buying there were buying because they had jobs there. It was relatively inexpensive to employ people and set up businesses. After all, the area is so dry and hot that business knew they could establish themselves there very quickly and inexpensively. Labor came for the jobs, and labor was on the cheap as it was also inexpensive to buy a home. What I am saying is people bought there, yes, but only because it sustained their family life, but it was probably not their first pick LOL. People did not buy there for vacation homes. Well, a few did because it was so cheap, but they soon realized it SUCKS.

If you want something affordable that would suit your lifestyle and will allow you to actually enjoy the outdoors, there are plenty of options. First, though, let me address California. Earthquakes come with the territory, but they really aren’t that big of a deal. The economy is not really that bad at all. It is going through some adjustments, no doubt, but it is getting better. In fact, it is still the 13th largest economy in the world, making that single state’s economy larger than most country’s economies. What happened in California is misapropriation of tax dollars; hence the state is in dire need of capital to continue operating many of its b.s. programs and absurd salaries/perks it was paying to government employees. Those programs are naturally getting nixed, and the state will indeed eventually return to profitability. Also, I’m not sure if many of you know, but a state can NOT go bankrupt – by law, it is impossible. I have no concerns there. Much of what is reported to you is hype anyway (trust me, it is).

So, if you like California, I say go for it. I’m not sure what your budget is, but there are some great buys to be had throughout the state along the coast, including Long Beach, San Diego, and up North along the coast. I would avoid all together Palm Desert. Yes, it is seductive, but the summers are unbearable. These areas I’ve mentioned will obviously not be the ridiculously low price points of Phoenix, but they have all come way down in value over the past 5-6 years. Also, you can actually enjoy yourself there.

If you are more of a “mountain and river” kind of person, can I suggest to you Bend, Oregon? First, I need to say that pictures do not do it justice at all. It is one of the cutest towns I know, and the recreational activities is second to none, including great snow skiing, kayaking, hiking, biking, rock climbing, sailing, etc. The people are terrific, the area is very safe, low property taxes (about 1% of assessed value each year), liberal politics in general, and the food/wine is sublime. It is high desert, but the setting is stunning, and the climate is amazing. Not too hot, not too cold, and it has real seasons. Houses there have taken about a 40% haircut. A nice 1 bedroom condo in downtown can be had there now for about $250,000. It had been at one time a sleepy little town until Californians discovered it a decade ago. From that point on, it has grown tremendously and the infrastructure is great. Or, if you’re more of a “city” person, Portland is tremendous. Without question, their downtown is strikingly handsome and incredibly clean with great infrastructure and public transportation. Again, the food is amazing, shopping is terrific, and very safe, and its “edgy.” However, Portland does get its fair share of the rain. If you get a chance, watch the show Portlandia on IFC. It is hilarious and really demonstrates the multi-faceted walks of life there. Actually, here’s a link from the first episode…


If you want a great buy in a safe area with a nice art scene and a relaxed feeling, you should consider Sarasota. Yes, yes, I know this is Florida, but not all places are bad in Florida. Sarasota is more for the retirement-minded folks, so I’m not sure if that is what you’re seeking (I don’t know your age). If you want a more vibrant feel and amazing night life, terrific weather, and gorgeous people, Miami and South Beach is your scene. Prices have been back on the rise there, but deals are still many to be had.

By the way, my Chinese friends, Michael and Evelyn, are headed to Vancouver today to help their parents move here to Seattle. Their parents sold their house and are ready to move to a place that has, how did they put it again… oh yes, “soul and character.” They’ve had it with delusional buyers, crappy shopping, uninformed people and politics, and minimal infrastructure. Their words – not mine (although I don’t disagree with them). If you see a big, black, brand new 2011 Porsche Cayenne with 25″ black rims
and bright yellow ceramic brakes, please wave at them!

#187 Hoof - Hearted on 02.10.11 at 6:12 pm

There is enough mind candy in BC that allows people to have a false sense of security.

The visuals of construction give the appearance all is well.

STOOPID 25-30 year old tradesmen with a $30,0000 high end PU truck running around, not seeing the writing on the wall that there is far too much construction…a major glut that already exists is simply being added to.

#188 morry on 02.10.11 at 6:14 pm

#60 The American “I hate to break the news to you, but more Chinese by far immigrate to the U.S. every year than to Canada. … No, you deal with it.”

Don’t have an aneurysm over it. I didn’t mean to imply that there weren’t lots of Chinese immigrants to the USA . I am well aware that there are lots. But as a region with 3 million the number of new immigrants to this area has a big impact, esp. when they come to buy homes.
But they aint going to the wasteland of middle america i know that. NYC and LA andSF and Sea. sure. But Phoenix? no!

“Mark these words TODAY. And believe me when I say I know what I am talking about. Canada will have a 30% haircut in values”

I agree! and we are seeing the 25-30% drop starting today, now, at the Athletes’ Village … condos are on the block at 25% -30% off. The barber is in his chair!

Don’t agree on the 40% No way! But if it came it would suit me just fine. ;-) I have never been crazy about spikes in house prices. I am living in mine until i die.

PS We have helped our relatives in the Phoenix area, so that they could hold on to their home. They will do fine.

Happy in Lotus Land

PPS Bill- I am going to be buying a condo. it will be at the price that “A Barber” can afford. I know what the costs are on a sq foot basis that the developers paid. BEFORE profit taking. I will be taking that off the price in 3-4 months. Oh and I will be sure to let you know what we buy and at what price.

@ Heinz: good post! I agree 100%

#189 Hoof - Hearted on 02.10.11 at 6:21 pm

#181 It’s Time

Are the Chinese dumb ????… Good Question….


No, they are not dumb…it is simply a relativity game

Obviously in a cost versus benefit analysis, they are caught between the 2 scenarios

Post Hong Kong(1997) their business oppportunities have continued, but their mistrust of the Chinses Gov’t has not diminished.

In other words, they prostitute themselves, taking advantage of cheap costs of doing business, feudal-like exploitation of poor fellow countrymen.(ie making widgets for Wal Mart)

They are basically engaging in an exit strategy,…..whereby for the sake of a Cathay Pacific flight (maybe even economy class) they can bail at a moments notice with a citizenship and assets already expatriated into what they consider politically stable countries.

#190 john m on 02.10.11 at 6:24 pm

Until we have a government in Canada that is for all the people and the best interests of the country our future will continue to head in the same direction…. every disastrous scheme implemented by our present government has been for popularity and votes without any accountability for their actions. Anyone who thinks this crew of sheeple in Ottawa will pull us out of this i.m.o. is hallucinating. The present housing bubble and the pending hardships for so many was not caused by the recession- they created it! Just imagine how things would be if they had listened to Garth!

#191 The American on 02.10.11 at 6:45 pm

At #187: morry, I agree the Chinese have a big impact on the market in Vancouver. And they ain’t buying in other Canadian cities, really except for Toronto (minimal there, though). As for the haircut Vancouver is going to take, I guaranteed a 40%+ drop in prices. At that rate, I am being conservative. When the Chinese realize the woes of their own country, the assets they hold in Canada will be the first they let go. Whether they just walk away and return back home and default, or if they sell. Either way, it is going to be huge for Vancouver. But, the Chinese aside, Vancouver will take that 40%+ haircut even if China weren’t in the crapper. The ratios aren’t sustainable with income. The world over has proven this is what is real and what is viable. If the ratio is off, then the market value is off, and a correction will certainly happen. That’s a promise, and you can hold me to it.

#192 Jessica6 on 02.10.11 at 6:53 pm

Can’t fix stupid.

That’s all I have to say.

#193 Mikey the Realtor on 02.10.11 at 7:00 pm

“You are as delusional as Murbarak. You might as well say “just wait til September”. Where did your sidekick DA go ? Probably muzzled or fired for disclosing what we already knew, that a 3 month course does not make a genius.”

Good day! I believe that DA has 2 clients that he is closing on today, I will be seeing him later on for drinks to celebrate his payday, I will surely let him know that you and others are missing him on the blog. Until then, take care and dont hurt yourself thinking.

#194 No crystal ball... on 02.10.11 at 7:00 pm

Carpe Diem,

I agree with Still Renting, Heinz S., Adam and Victor. Like them I am not a bitter renter. On the contrary – I feel quite empowered by our choice to get our money out of real estate and watch it increase in smart investments.

I think doing this has taught me a lot about what is really important – quality of life. Bricks and mortar do not define that. So many people define their happiness by their address and all the HGTV spoils of life, and some are willing to take their life to the brink of financial disaster to get it. This is the kind of craziness that breaks up marriages and families and ruins lives. Garth’s posts are trying to educate people to avoid the train wreck.

If you own a home with little debt and you are happy Carpe Diem, then that is all that matters. But you must know that not all of us lowly renters are maliciously waiting for the housing downturn to financially decimate over-burdened home owners.

Like you, we are just doing what works for us.

#195 Dawn in Calgary on 02.10.11 at 7:03 pm

“yet complete silence from “Sybil” in Kelowna.”

He said yesterday with his {:-/} moniker that he was done, out, kaput. He’s probably just waiting to put a new nickname in use — if he hasn’t already. Maybe he’s morry — morry’s new. Sorry morry.

Ah, we’ll be able to tell when he returns, no matter what alias he uses.

The silence truly is golden, though.

#196 john m on 02.10.11 at 7:17 pm

Hmmmmm i wonder how much real estate “H” and “F” have acquired in the “bustling economy” they created? :-) ?After all they have proclaimed to the world “things are different here” and encouraged Canadians to take advantage of low interest rates….i would sure like to ask them :-)

#197 Edmontonian Guy on 02.10.11 at 7:19 pm

In the rental debate going on here.
I LOVE renting! The price here in edmonton is close to $100,000 less for a house now that it was in 2007. I sold early 2008. I’ve rented since. I not only saved from losing $100,000, but invested the $300,000 from the house & rent which is as CHEAP as owning a house with NO MORTGAGE! For those of you who may have a mortgage we’ve seen it all before, even if you only have a 3% mortgage, we’ve lost another 10% in values the last 7 month in EDmonton!
Rent, be free-enjoy life

#198 Edmontonian Guy on 02.10.11 at 7:25 pm

#192 Mikey the Realtor

Are you in a condo or house that has an upside down mortgage already? How much did you pay for your place, and how much is it worth today. I sense bitterness. You want things to be as you wish them to be, not as they are going?

#199 OttawaMike on 02.10.11 at 7:28 pm

I’m surprised there is not more discussion here regarding the Saskatoon first time buyers assistance program.
I have mentioned these incentives here before for a prediction as to what the provinces and feds will do to keep this balloon afloat.
1982-1983 the feds implemented the ChOSP plan where first timers got $3000 towards a down payment. I can almost guarantee we will see something similar within the next 2-3 years. That was a 5-10% down in some markets.

Hope for correction all you want blog dogs. I have thrown in the towel and am with the CREA. Their forecasts on housing sales have been spot on for since 2008 unlike the predictions from Greaterfool.ca
I’m not saying I disagree with the general bubble sentiment around here, just that this thing is not going to blow up like everybody predicts. Any so called slow melt in prices will be glacially slow and the guys in charge will use our money to keep the zeppelin afloat.

#200 Dodged-A-Bullit-in Alberta on 02.10.11 at 7:31 pm

Greetings: Lots of comments about why foreign investors are not buying real estate in Arizona or Florida. It is because ” we ARE different in Canada, ie Vancouver”. One word should suffice—water!!!

#201 Bill Grable on 02.10.11 at 7:45 pm

Something to think about.


Haven’t you noticed the huge increase in Casinos, on-line gaming, Government backed wagering, and the tacit belief that this is not contrary to the public’s best interest?

A generation ago – gambling was considered a Vice.

Right or wrong, I think that Governments have become hooked on the easy $Billions that suckers pump into Casinos.

Casinos in Vancouver have become even more dicey -(*pardon the pun). That, for another post.

OK – layer the acceptance of gambling on the ‘thinking that Real Estate is an easy road to riches, because it never goes down’, mindset.
(*I win the mangled syntax award for that sentence – but I think you get my meaning).

It all adds up to something – nasty.

There ain’t no free lunch, Jack.

#202 West Coast on 02.10.11 at 7:59 pm

Does anyone else see this as a very ordinary way of fleecing the middle class and not a lot else?

#203 EJ on 02.10.11 at 8:08 pm

There’s been a barrage of RE pumper articles from the usual gang of idiots over the past few days.

Reeks of the typically pathetic damage control tactic they use whenever some bad market news manages to get by the filters of their paid flunkies in the MSM. “Quick! Smother it with dozens of feel-good RE advertisements over the next week to make people forget it was ever printed!”

I’m sure some editor over at the Financial Post got some angry phone calls, chastising them for allowing that Robert Shiller article to be printed. It’s great to see that article got so many pumpers all riled up and agitated. Their reactions are identical to what occurred in the USA during the beginnings of their crash.

#204 David on 02.10.11 at 8:14 pm

#200 Bill – And with all this gambling revenue the government still can’t deliver services or find money to invest in infrastructure. In the land of Greater Fools, life as a politician is good.

#205 Nostradamus Le Mad Vlad on 02.10.11 at 8:19 pm

A Gentleman’s Fairy Tale

Once upon a time, a Prince asked a beautiful Princess . . . “Will you marry me?”

The Princess said “I wouldn’t ever marry a worthless sack of shit like you!”

The Prince replied, “I would rather live in a pirrahna-filled moat than sleep with an old hag like you!”

“Stuff you!”

“Stuff you too!”

So the Prince lived happily ever after and rode motorbikes, went fishing and hunting, played golf and dated women half his age, drank beer and whisky, had tons of money in the bank, left the toilet seat up and farted whenever he wanted.

That is why men are men, and women aren’t.

The End
#69 kc — See #157 Ian’s post. China is not only expanding through companies, they are buying US / Cdn. companies up and spreading their tentacles all over.

#79 Stevie Why ? — FWIW, I would put the $12K into a TFSA — junior mines, rare earths, lithium, uranium, etc. and all with DRIPs — any leftovers into RRSPs.

#134 David B — Can anyone smell the stench of an upcoming election? Harper hands out freebies to Quebec (which taxpayers paid for) in the hopes of getting a majority.

If a person totally fixates his life on obtaining something, chances are the more he wants it, the less he will get it.

Iggy picks up 28 seats and wipes out Harper’s 19-seat gain? Still a minority govt., but Harper is finished, and so is this country.

#157 ian — Unfortunately you are right.

#199 Dodged-A-Bullit-in Alberta — “One word should suffice—water!!!”

Quite right, and this would be a good reason for the very last link about the border being removed last Friday.
Good Question Where is the answer?

Kleptocrats Not the Borg or Romulans, but they seem just as nasty.

Good Stock Market — bad times a’coming; and Negative Divergence.

Note the heading “Dwindling Public Spending”; folks and companies who are broke cannot spend what they haven’t got.

‘Net Stuff Seems Ma Bell, Shaw and others are getting mixed-up in their words of wisdom.

Ugly One and #28 Morry — “Well we have Oil and lots of it! Plus Natural Gas!” Ugly Two. These go in tandem, but peak oil may just be govt. doublespeak to have a new war somewhere or, as Morry .alludes to, take over Canada for our natural resources.

Say, didn’t Harper – Obama just sign a new deal last Friday, disbanding the non-existent border between the two countries, when most were tuned in to what was happening in Egypt? That’s what the CIA and others groups do so well — distract and divert our attention away from The Real McCoy.

#206 ballingsford on 02.10.11 at 8:27 pm

I’m happy renting for the time being, and if anyone asks, I tell them I’m happy with that and I have money to spend and save! So far, no one has looked down on me for being a renter. If they did though, I probably wouldn’t care.

#207 jess on 02.10.11 at 8:32 pm

what to fear
..being in this data base

For years, the underground firm International Pharmaceuticals supplied athletes around the world with the latest performance-enhancing drugs, helping it attain cult status in the doping scene and make millions. Now investigators have raided the firm’s headquarters in a German village. Its customers apparently included a number of top athletes whose identities could now be revealed.
Steroids in the Provinces
Demise of a Legendary Doping Empire
By Cathrin Gilbert

#208 TheBestPlaceOnEarth on 02.10.11 at 8:40 pm

Multiple bid offers just on a plot. Looking great folks
As Pattison always says Vancouver just keeps getting better and better. These plots are RED HOT so no low ball offers. Imagine eternity overlooking spectacular Vancouver. I’m getting my bid in. You should as well, these plots worth a fortune in the future!!

VANCOUVER — Fancy being buried in Vancouver’s historic Mountain View Cemetery — one of the only two “green” cemeteries in Canada — in a casket with all the trimmings?
Then get ready to submit a sealed bid for the privilege and hope it’s high enough to get you admitted.

Read more: http://www.vancouversun.com/Dying+Vancouver+cemetery+seek+bids+burial+spots/4261327/story.html#ixzz1DbaGj2wE

#209 john m on 02.10.11 at 8:41 pm

#201 West Coast on 02.10.11 at 7:59 pm

Does anyone else see this as a very ordinary way of fleecing the middle class and not a lot else?<<<<<<< of course and in the beginning of a recession after blowing a 13 billion surplus before it happened what greater way is there than drawing every last nickel out of every believer to create the impression Canada is different and create a housing boom and a false economy and last but by far not least….make the average public think the government is acting in their best interests……the dream of home ownership satisfied with the stroke of a pen :-)….ah yes sheeple you have been had…….billions of tiny savings turned to dust and a lifetime of crisis for so many……all for the illusion they knew what they were doing and the votes!

#210 The American on 02.10.11 at 8:43 pm

At #166: BrianT, many Americans are broke. Many are still fine. And many are doing better than before. No doubt. But, if Americans are contributing to monthly savings of 7% on average, while Canadians are contributing a NEGATIVE 2% on average, where would that leave the Canadian people? Worse than broke? And to think the Canadian real estate downfall really hasn’t taken place yet. Where will this leave Canadians then? Just a thought…

#211 TheBestPlaceOnEarth on 02.10.11 at 8:43 pm

The American
250K for a condo in backwater Oregon. Total ripoff. Home of turnstile skiing. 25k is all a condo is worth there. Way better deals on the Coast of Oregon for those kindof bucks

#212 ballingsford on 02.10.11 at 8:54 pm

#198 OttawaMike on
You might be spot on. However, I think the CMHC factor should be discontinued. The banks would surely change their lending practices if their loans weren’t covered by us taxpayers.

Enough already!!!

#213 Treb Makes An Error. On Purpose? on 02.10.11 at 9:01 pm

Quote from TREB on Jan #’s: “Greater Toronto REALTORS® reported 4,337 transactions through the TorontoMLS® system in January 2011. This result was 13 per cent lower than the record result reported in January 2010.”.

Jan 2007 – 5173
Jan 2008 – 5075
Jan 2009 – 2670
Jan 2010 – 4986
Jan 2011 – 4337

Record result in Jan 2010? Not quite.

#214 Throwstone on 02.10.11 at 9:03 pm

Live within your means!!

Advertising and other such propoganda media! Is the most expensive self serving bill the federal government has.

Think they spend about $50 million a year!

Are we slowly realizing that there is TOOOOOO MUCH GOVERNMENT IN THIS COUNTRY!

#215 HouseBuster on 02.10.11 at 9:05 pm

The video – so why don’t they just buy in Phoenix or Palm Springs? LMAO

#216 Blobby on 02.10.11 at 9:06 pm

Front page of todays vancouver sun is a story about how people in BC are the most screwed in canada when it comes to debt.

BUT the story concludes – because of the “gains” everyones made on their properties – it’s not so bad at all, and is actually quite postive.

Then it goes on to list the properties which have gone up the most in value since 2006 – condos/townhouses or houses.


#217 Blobby on 02.10.11 at 9:07 pm

if proof were actually needed of how desperate the local vancouver media is to pump property at the moment:


#218 Ayn Rand on 02.10.11 at 9:10 pm

My CIBC rep called yesterday, on Monday she got me a 90 day guarantee on a 3.59% 5 year fixed mortgage rate – I renew in May. I was hoping for 3.5%, got that rate offered in the fall, but would have paid $1200 in interest and disbursement fees to close early (with FirstLine Trust).

Due to previous postings on this site, I was alot more proactive alot earlier before renewal time. I was willing to give up my 0.85 below prime (now at 2.15) if I could get the 3.5%. I am very pleased.


#219 HouseBuster on 02.10.11 at 9:11 pm

#58 beaker on 02.10.11 at 3:15 am
Nice video. The chinese people being interviewed spoke very good english, very little accent from some of them. It makes me wonder if they were all locals.
Where do you live? China?

#220 Hoof Hearted on 02.10.11 at 9:24 pm

#200 Bill Grable on 02.10.11 at 7:45 pm

Something to think about.



City of Richmond had a public meeting about expanded gambling(had an existing rinky dinky one floor maybe 15,000 sq.ft casino (no slots)………and the overwhelming majority of citizens , mainly Asian, said NO.

One speaker made a very good point…
The money gambled is redirected from funds that could otherwise be discretionary income to support OTHER local businesses.

At the time, our Council ( early 2000’s ) voted NO.

However, in about 6 months they did a complete 180 degree turn and allowed the RiverRock casino to be built..orders of magnitude larger than the old casino.

In public documents, the City gets a cut of the casinos PROFITS…approx. 10% .

The City has received, on average, $12 Million annually, which implies the RiverRock is making $120 Million annually in profit.

The slimier thing is that when the River Rock opened (approx. 2004), was the same year, within months, of taking on the Olympic Oval, which cost approx. $200 Million.

In addition, our local First Nations Band hissy fits and legal action ended up with them being given Title to the crown land the casino is built on, and the RiverRock is now their tenant.

City documents show the Oval is funded $5 Million a year for the next 10 years from Casino funds.

Casino funds have no covenants, expenditure is sole discretion of the given Local Gov’t Council

So, my premise is, vested interests worked the levers of the casino revenue to fuel the Oval’s construction.

The City of Richmond was subsidizing the Oval to the tune of $ 1.5 million annually, but documents now show this will be ratcheted to $3 Million annually.

As it stands, this Oval white elephant , artificially inseminated by casino funds…is being marketed as a rec center for hi density development.

BTW, if you try to walk around the Oval..you will be refused admission, you either buy a day pass at $10…or monthly membership of $60 for adults..

Gambling has far more peripheral consequences than just a tax on poor.

#221 Hoof Hearted on 02.10.11 at 9:26 pm

Re Olympic Village

To be marketed as Village on False Creek

30% discounts

Dive in head first folks….

#222 kc on 02.10.11 at 9:31 pm

#216 Blobby on 02.10.11 at 9:06 pm

BUT the story concludes – because of the “gains” everyones made on their properties – it’s not so bad at all, and is actually quite postive.

Unless you bought in the olympic village…. driving home from work this afternoon and the news said that rennie (new marketer and condo king) was blowing the 400 unsold condos at or near 50% off sale… ??? no idea if true till i watch news tonight…. however if true… uhhhgg vancouver condo prices just started a nose dive…..

#223 OttawaMike on 02.10.11 at 9:31 pm

Here are 10 metropolitan areas in the US where house prices rose an average of 20% since 2005:

We will have similar areas in Canada that will continue to rise no matter what.

While I find it particularly annoying that most pundits claim no Canadian housing bubble, I also find it concerning that Garth has held steadfast to his predictions without any adjustments or what ifs.

Still an entertaining website but not gonna play out the way your crystal ball(s) says it Garth.

I have given my reasons for my position. Do you have any? — Garth

#224 Milhous Plumbers on 02.10.11 at 9:32 pm

Just want to point out there are still plenty delusional Americans. Mainly those living in pockets where RE hasn’t been hit hard. Try informing them the middle class has been decimated by the bubble and they won’t hear of it. So there’s plenty of it down there still.

#225 pablo on 02.10.11 at 9:43 pm

Canadian Banks are just as Insolvent as American Banks

Interesting opinions.

#226 OttawaMike on 02.10.11 at 9:46 pm

I have given my reasons for my position. Do you have any? — Garth
1) Govt intervention, mortgage interest rate relief, home buyers assistance programs
2)Canadian economy picking up steam, increased consumer confidence, remissions from the record priced commodities we sell back into our economy
3)this will temper any price collapse and lead to a flat decade once inflation is accounted for. (your slow melt)

I still believe your philosophy about managing debt and be beholden to nobody.

I really hope you are not going to unfriend me from Facebook now??

There will be no government intervention to prop up the housing market. That’s a fantasy. Consumer confidence will not improve while taxes and rates rise, unless we have a flood of jobs. From where? If you want to stay my friend, stop making stuff up. — Garth

#227 Onemorething on 02.10.11 at 9:47 pm

You know what I really enjoyed about reading this blog topic and responses today?


The Chinese dont care right now about freehold land as much as they care about getting their cash out of the mainland however I will stick with the fact when the SH&T hits the fan, the money always comes back home!

#228 Heinz Skitzvelvett on 02.10.11 at 9:52 pm

Please Garth, make this the topic of a future post…it begs mention, but for all the wrong reasons:

This encapsulates just about everything that’s wrong with Vancouver’s property market.

Dissect away. How about I start – the icon of the house with the ‘death eyes’ is unintentionally funny.

#229 John on 02.10.11 at 10:02 pm

MUST READ – Eye Opener regarding oil prices and Canadian losses.

Do our financial experts and politicians knows this??


#230 Hoof Hearted on 02.10.11 at 10:08 pm

Me: “You’re not throwing your money away on rent, you’re paying less than what you’d pay to own that house.


Why is this so hard to understand:

Yes….rent does not imply ownership

However, ownership does not make sense under the current house – horny environment

If I can use a power tool that costs say $1000, for a solid year, that is more cost effective than renting it for say $20/day for 365 days.

If I only need it for say 3 days…RENT

#231 Dan in Victoria on 02.10.11 at 10:34 pm

Mad Vlad @ 205 I was wondering if anyone else picked up on that agreement.
I guess Canada is now a place for the americans to store natural resources.

#232 Timing is Everything on 02.10.11 at 10:38 pm

#218 Ayn Rand

I gave up my P -.75 for a five year fixed @ 3.39% with Firstline.

#233 JC on 02.10.11 at 10:42 pm

I think what people don’t quite connect is that IF the economy improves then investors will have a sustained appetite for risk which means that bond yields will soar (exit out of bonds and into equities) which means the average monthly nut then becomes unaffordable. Real estate valuations tank because credit contracts. This is the BEST CASE SCENARIO for Canada’s economy.

If the economy doesn’t improve significantly then people balloon up bond values (low yields) and interest rates don’t advance but high unemployment will weigh in on historic rates of home ownership at historic valuations. Also, taxes will go up across the board to stem the tide of red ink on muni/provincial/federal balance sheets. Real estate tanks because of monthly cash flow considerations irregardless of easy credit (which the average Canadian has maxed out on anyways). This is the LIKELY SCENARIO.

If people can only fathom that @ 70% homeownership and record high prices the next 7-10 yrs of homebuyers have already bought (demand pulled forward) they will see that there is only one direction for real estate to go.

Why do you think there’s a new article everyday in the G&M to the contrary? Does the TRUTH really need to be re-hashed and re-gurgitated on a day-to-day basis???

#234 Hoof Hearted on 02.10.11 at 10:59 pm

#208 TheBestPlaceOnEarth

Re Cemeteries:

The Facts are wrong…..
I had a relative pass away Unexpectedly in 2000,casket burial in Mountain View. Connections with the funeral home…

How will the define Green Burial ?

The greenest I ever heard(ie low enviro impact), were some native tribes that leave the deceased up in the trees for the critters to recycle.

#235 EJ on 02.10.11 at 11:00 pm

OttawaMike, I checked out that link of places where RE went up 20% in the past 6 years. Have you looked at any examples in these cities?

Longview, TX:


Bismarck, ND:


Williamsport, PA:

Goofy javascript website I was at, so I couldn’t get an usable HTML address for the listing, but this one is $225k for 2495sqft, 4 bedrooms, 2.5 bathrooms built in 1965. Nice looking place (959 COUNTRY CLUB DRIVE Williamsport, PA 17701)

Long story short, even after 20% increases, those prices are a far cry from the junk you get in Canada for the same amount. There’s still value there.

Look at the crap you get here for similar prices:

Ottawa ($360k?! Not if you put a gun to my head..):

Winnipeg (I know the area this one’s in, and you couldn’t PAY me to live here):

Something in a livable area in Winnipeg, even if it is a snout-house ($416k!! SCAMmel, Rd indeed…):

Saskatoon ($385k):

Get the point? Those places in the US could double in price and still look like a deal compared to Canada.

#236 Hoof Hearted on 02.10.11 at 11:01 pm


Tonites news ……

Mubarak refuses to step down till Sept at earliest
Military sides with the citizens

Gonna get ugly…..

#237 The American on 02.10.11 at 11:07 pm

At #200: Dodged-A-Bullet-In-Albert… Are you trying to say that Florida doesn’t have water? LOL Also, Vancouver may have water, but so do soooooooooooooooooo many other cities in North American and throughout the globe. So, really, Vancouver is no different, right? Un-friggin-believable…

#238 Timing is Everything on 02.10.11 at 11:09 pm

#210 The American said – “Where will this leave Canadians then? Just a thought…”

Just above Americans…Same as always…..

…..We’re the pink one, at the top.

#239 Brass Balls on 02.10.11 at 11:12 pm

#227 onemorething

So you go through this blog looking for DA comments? And you make a point of telling us there weren’t any? You lead a very interesting life.

I would bet DA is busy with clients. The market is suddenly hot. Can’t wait for him to get back and aggravate you, though. :-)

#240 Timing is Everything on 02.10.11 at 11:14 pm

#206 ballingsford

Good points. And even more so….Good attitude.
In the future, if you decide to buy, when the timing is right, I am confident, you will do well, Grasshopper.

#241 DW on 02.10.11 at 11:15 pm

Out of interest I am curious what everyone’s paying for hydro. I’m currently at $ 55/month which is what I used to pay for 3 months a few years back.

Now aside from the PR calling for a 46% increase over 5-years some reports are coming out of hydro prices QUADRUPLING in 2012.

While I understand the need to pay for Eleanor Clitheroe a thrifty pension of just $ 25,000 (per month) after getting fired from her 2.2 million/year job I can’t see how this is going to be anything but bad for the rest of us!

–> http://www.windsorstar.com/technology/McGuinty+plans+will+doom+Ontario/4208900/story.html
-> http://h1ripoff.blogspot.com
-> http://www.lfpress.com/comment/letters/home.html?p=41439&x=letters&l_publish_date=&s_publish_date=&s_keywords=&s_topic=Hydro&s_letter_type=Letter%20to%20Editor&s_topic=Hydro&s_letter_status=Active&s=letters


#242 The American on 02.10.11 at 11:16 pm

At #211: AnalrightplaceforCanada, and your comments are EXACTLY why you clearly have no idea what you’re talking about. Additionally, you’ve completely missed the point of why Bend, Oregon is awesome… The WEATHER and the recreation. You’re comparing oranges to a-holes. Oh wait, I wouldn’t want you to compare yourself to an orange… I’m sure you’re much greener. Well, clearly you’re green, otherwise you would understand nobody believes a word you write, yet you keep on trying. Also, you would be about as bad of an “agent” I could imagine as you don’t operate using cognitive thinking skills. You’re a lemming and a user of consumer naivety.

#243 VanCity Girl on 02.10.11 at 11:16 pm

Vancouver Athlete’s Village condos just lost 30% of their value…uh oh…it starting…………

#244 The American on 02.10.11 at 11:22 pm

At #225: Tell us all something we don’t already know LOL Americans and senior analysts have been proclaiming this for over 18 months now. Why now is this just news in Canada? Someone help me understand, please?!?!?

#245 Bottoms_Up on 02.10.11 at 11:22 pm

#233 JC on 02.10.11 at 10:42 pm
it’s “regardless”, not “irregardless”. The ‘ir’ likely comes from ‘irrespective’.

However, because so many people are using the word ‘irregardless’ it may actually become an acceptable usage for the meaning ‘regardless’.

#246 Bottoms_Up on 02.10.11 at 11:24 pm

#227 Onemorething on 02.10.11 at 9:47 pm
Isn’t D.A. now H.S.?

#247 Bottoms_Up on 02.10.11 at 11:28 pm

#58 beaker on 02.10.11 at 3:15 am
I work with people from mainland China. Their english is very good.

#248 Hoof Hearted on 02.11.11 at 12:08 am

68 betamax on 02.10.11 at 4:31 am

#34 Morry: “Why is Francisco Aquilini salivating at the prospect of BUYING the bulk of the unsold Condos in the Athletes’ Village.”

Because, as was made abundantly clear in the US, most developers never see a correction coming. They’ll keep chanting “This time it’s different” until the walls cave in


The OV receiver said they will/should fire sale the condos.

IMHO, Aquilini offer was probably a good cop bad cop ruse. Why would a developer take on a dead dog, these condos are over a year old.

It was used as a straw man so that the COV could act good cop and take charge.

The saddest SOB’s must be the ones who bought OV condos already.

Global news is doing an Olympic anniversary tour, newscast from the economic destruction .

Whistler businesses are tanking, their Council put in paid parking that are keeping customers away.

#249 Islander on 02.11.11 at 6:26 am

How do we know Brass Balls isn’t D.A.? Or MikeytheRealtor?
I mean, do realtors know when a competitor is closing two deals that day? That seems unlikely. Maybe MikeyRealtor is D.A.’s broker.
In any event, D.A./Mikey/Brass/BestPlace/}:} is just trying to make a living like the rest of us.
What do you do when a relative or friend starts bragging about the money he makes or how good looking his wife is? You just roll your eyes, right.
Let him spew. It’s entertainment.

#250 Steven Rowlandson on 02.11.11 at 10:37 am

Garth we need a new law!
Only Canadian natural born citizens can legally invest in or buy canadian real estate or businesses. Canada for Canadians!


#251 smartalox on 02.11.11 at 1:56 pm

Garth, I’d be intersted to hear your thought on this: the US government as declared teh Fanny Mae and Freddie Mac ‘business model’ (government backed mortgage insurance) to be “dead”.


The Canadian equivalent is CMHC, right? Is the CMHC model as flawed? Are the same factors present here that may render CMHC’s business model ‘Dead’ too? In your opnion, what could be the fallout from an action such as this?

#252 smartalox on 02.11.11 at 2:00 pm

Re: US declares Fany Mae and Freddie Mac Dead:

Is this an example of a ‘black swan’ event? A game changer, an increase in mortgage costs that will have a negative effect on the markets, completely unexpected – but upon reflection – inevitable?

#253 pijar on 02.11.11 at 2:03 pm


Do you realize that you are paying the mortgages for the places you rent? Whatever the interest rate? The people who own the house you rent end up with a paid off mortgage you have nothing. Even if the price is 25% less than when the prices were historically the highest the owner did not loose anything.

Just as an example house bought at 150K raise in value100% to 300K and looses 25% of 300K so 75K. Overall gain is still 75K!!! That is some savings no one is counting.
Rents will not fall if there is low vacancy rates. In Edmonton Dec 2010 vacancy rate was 4.2% this means 95.8% of available units is rented! Do you understand this statistic???

The renter pays for the entire mortgage, insurance, maintenance. I would rather have the rental property or when sold a pile of money you the renter GAVE AWAY! THANK YOU!!!

#254 The InvestorsFriend on 02.11.11 at 6:44 pm

Doug porter and a co-author at Bank of Montreal said the following today in their weekly FOCUS newsletter.

“While debt has risen famously to 148% of
disposable income (and likely rose again in Q4), financial assets have rebounded to 420% of disposable income. We estimate they jumped again to 430% in Q4,
near the record high of 445% reached in 2000Q3, just before the tech wreck began. It is true that the resulting ratio of net financial assets to income (likely 280% in Q4) is below prefinancial crisis highs, but it has moved back above the 20- year average, suggesting Canadian household finances are
far from beyond repair.”

What this means is that the average household does have debts of 1.5 times income but also has assets of over 4 times income.

So the average household has a net worth of 2.5 times net income.

Generally speking young people have negtive net worths in their 20’s but it will be strongly positive in their 70’s.

If you are 50 and have a zero or negative net worth then you are below average (But I suspect you already knew that, and in so many ways too…)

Better get a move on…

#255 Iceman on 02.11.11 at 7:05 pm

I just LOVE the spin that the receiver for the Olympic Village put on the sale of half of theunits, at prices roughly 30% lower than before:

“The pricing of the 2011 marketing launch is not intended to represent a ‘fire sale’ or drastic discount from actual market value in order to accelerate sales,” the document says. “The pricing will reflect realistic current market values.”

…excuse me while I go throw-up…

#256 comfortably numb on 02.11.11 at 7:23 pm

@253 pijar

you are hilarious. My landlord who bought in 2008 just sold…for the same amount she paid in 2008. On top of that she was putting a thousand a month additional towards her monthly mortgage. Add in the property purchase tax, city utilities, annual property tax, insurance and commission to sell and it cost her many many thousands to get out. Yeah I envy her alright!! In terms of vacancy rates why dont you do what I do daily and get on Craigslist and follow vacancies. Everyone and their uncle has been buying condos and houses for rental purposes and right now they are sitting empty. In the tri-cities area of Vancouver you can literally watch from month to month as empy units drop their asking price to get tenants. I hate to disappoint you but the tide has turned to favour those that rent. If you follow this blog at all you realize that those of us here that rent do so by choice not because they cant afford to buy.

#257 Hoof Hearted on 02.11.11 at 7:48 pm

Development of Vancouver’s Olympic Village trapped in vicious, hollow circle


London Drugs, the Urban Fare grocery store, and a Mark James brew pub were supposed to be part of the Village’s attractions.

Those spaces remain vacant and the receivers were warned that “if occupancy levels remained near the low levels, the major proposed tenants had advised the receiver that opening for business in their proposed location would not be feasible.”

And, if the large stores don’t come in, neither will the smaller ones, they noted.

As a result, the plan recommends renting out up to 127 of the higher-end condos (though none valued at over $1-million) even though Vancouver, which is on the hook for the $740-million owing on the project, is likely to see a loss. Not because the rents will be low. They won’t be.

But, because of a complicated situation inherited from the previous private developers who didn’t apply to stratify the units by the required deadline, the city will have to pay HST on the value of any condo that gets rented out. It would take 20 months of renting to recover that.

Do what they do in NYC.

Take out insurance, and ooops..why the FD get called?



” Besides figuring out future sales and rentals, the receivers have also had to deal with current problems – all of which are adding up to more bills for the city.

When the cold snap hit in December and the project’s unusual capillary-mat system didn’t function properly, the receiver had to arrange to have electric heaters delivered to some units as well as get the existing system repaired.

The heat also had to be turned up to a minimal level in some of the empty apartments in order to prevent the cold from permeating the occupied units. The receiver has had to hire extra security to make sure that the high number of vacant buildings and units are protected “.

FYI… the Olympic Village had a high LEEDS rating and was deemed ” green” . Whats green about sitting unSOLD, ……emitting lord knows how much GHG while empty… and incurring so much extra cost?

#258 prollywrong on 02.11.11 at 8:19 pm

shout out to the folks posting their experiences from the US of A:

#35 US Investor
The American (from previous threads)

your perspectives are valued.