Was it the faux line-up? The pimping by Global TV? The bargain appeal of $700 a square foot? Planeloads of condo-horny Mainland Chinese? Or is this pathetic blog now so full of crap it can’t see a real estate rally of historic proportions with no upside limit?
OMG. Is it different this time?
Beats me. I just come here for the babes. But it’s an interesting thing that’s happening across the country. In Halifax houses are selling like snowblowers – at a discount. In Toronto a SFH now costs a withering $755,000 with 17,000 new condos on tap, and yet sales have declined year-over-year for seven months. In Calgary prices are off their peak by 15% with condo owners having to take a 30% haircut from what they paid three years ago. And in Vancouver, well, it’s February of 2000 all over again, and Pets.com just launched its can’t-lose IPO. Yeah, baby, we’re on fire…
(Actually money-losing Pets.com attracted an instant $82.5 million from investors. Nine months later it was bankrupt.)
As you likely know by now, the condo tower in suburban Burnaby with the $700,000 units resplendent with laminate flooring (an upgrade), sold out on Saturday. Six hundred people lined up, snapping 202 units, with 2,600 more desperados on the waiting list. By the end of the day, there were units being offered on Craigslist by flippers. In fact, there’s a decent chance every single unit was purchased by a speculator. After all, with occupancy three years away (or never) this was a pure futures play.
So here’s the question: Is it really different this time?
More and more people obviously think so. This comment posted here yesterday encapsulated the sentiment that, well, we have crossed the threshold:
I think condo and house prices in BC (or at least in Victoria and Vancouver) are madness, but I’m wondering if there hasn’t been a fundamental shift in Canada in how we view housing– as a commodity, as an investment, not just a home. Yes, we’re overdue for a major correction in house prices, but I think our political ‘leaders’ are going to be doing their best to avoid one if possible, e.g. by keeping interest rates low. Perhaps things have changed permanently. After all, it’s psychology, not real value, that has driven house prices up to where they are now– perhaps there won’t be enough of a major shake-up to change that, and we will be stuck with high housing prices for the foreseeable future.
Hmmm. Real estate as a commodity and storehouse of value. An alternative to financial assets because it is real. Almost like money in its own right. Sitting on soil that cannot be replaced because it is of nature. Wrought by the hand of the Creator, not of man. Intrinsic value. Timeless and eternal. Standing soundly and assuredly outside of laws. Real wealth.
That, by the way, is exactly what the gold bugs think, too. And they are just as screwed up as the numb nobs who paid world class prices to buy a concrete box in Vancouver’s lousy imitation of soulless Mississauga.
If there is anything the US experience should have taught us (and most people have learned nothing ) it’s that real estate has no intrinsic value. As in Detroit, it can go to zero. As in southern Florida, average families can lose $113 billion in equity by doing nothing. House prices can fall steadily for five years, then fall again, just because there are no buyers. It can happen in retirement ghettos like Cape Coral, or upscale cities like Boston or Seattle. People with houses and mortgages can see values plunge precipitously while they are helpless victims. With a quarter of all Americans now underwater – and most were not subprime borrowers or McMansion gluttons – the average equity citizens have in their homes has plunged to just 2.6%.
So, no, real estate as a commodity is no more real than Nortel. And for many investors, it will have a similar outcome.
But will the government do its best to avoid a housing correction by, say, keeping the price of money at absurd levels?
Nah. Of course not. The little orgy-in-the-condo-tents we saw this weekend in BC is exactly why interest rates will be increasing. The last thing the economy needs is an asset bubble rife with speculation, fed by cheap money and the herd’s conviction that prices can only move in one direction. It’s madness like that that ensures the outcome is a hard landing.
There’s only one reason why house values change. It’s not Allah or the new paradigm. It’s not a shift from money to commodities. It ain’t nature or fate. It’s just what people want. And sadly, they’ve the conviction of weathervanes.
Now, the winds point them to greed. Soon enough it will point to fear.
Here’s a secret. Fear is safer.
277 comments ↓
me greedy… me 1st…
First!
WTF is wrong witht these people!~
Eskimo kisses!
From yesterday,Ex Pat @242
Form Man @ 253
Agree 110% with you.
DSMB @ 268 I don’t know the answer to the dew point question maybe some of the younger smart fellows could help us out.
I’d sure like to know.
Never too old to learn.
In BC, potential flippers (or anyone) can back out of a RE deal for up to a week.
The “sold out” sign isn’t necessarily true. They are merely “taking reservations”.
man…..it sure is lonely on our side of the fence. Best thing to do is stay the f#ck away from these blogs and forget about what’s going on out there. Let nature take its’ course.
The original buyers of the Olympic Village condos are suing to get their money back… what are the odds of the same thing happening here?
Sadly, the gold bugs probably have a stronger argument then the condo-flippers. There is in fact a limited supply of gold… and that can’t be said for condos.
Here is a book I suggest you read. The dictionary. Look up intrinsic. You will be enlightened as to what it means.
We’ve been waiting for this correction a long time. It keeps getting delayed. Despite the fact that there are bubble like conditions here, the employment situation and the economy is much better than the US. Thank God for commodities…
Sure there are speculators, but there are many young professionals who have bought in the last five to seven years who have jobs and will do everything to keep making mortgage payments, even if the rates rise by a few points. As much as I hope for a meltdown, I can’t see a massive correction.
Rental overload in Toronto! The Brand new (overpriced) Bell Lightbox (TIFF) Festival tower condos @ King/John.
So many units are offered for rent on kijij, craigslist, and MLS:
http://toronto.kijiji.ca/f-festival-housing-apartments-for-rent-W0QQCatIdZ37QQKeywordZfestivalQQisSearchFormZtrue
http://toronto.en.craigslist.ca/search/apa?query=festival&srchType=A&minAsk=&maxAsk=&bedrooms=&hasPic=1
http://tinyurl.com/6gcx8z8
http://www.miamiherald.com/2011/02/19/v-fullstory/2076031/the-curse-of-negative-home-equity.html
Negative Equity.
Something people in BC are going to lean about the hard way.
CHMC – http://press.princeton.edu/images/k9400.gif
We have a MSM that is lying to serve moneyed interests.
It is time to start paying attention.
Fear is a survival skill. Greed…nope.
Frances Bula, Vancouver commentator, on CBC – “This is a city where we’ve built our economy, and many of us have built our personal lives, on speculating on real estate. Even our own houses, we pay crazy prices for them, in the expectation that prices are going to rise, not because our incomes can in any way cover them.”
http://wp.me/pcq1o-1RK
Comment:
Almost every Vancouver RE purchase has a speculative component, even if it is most often coated in a veneer of wholesome innocence. The willingness of locals to borrow vast sums of money, and to use that money to bid up RE prices, has driven our bubble. As Bula implies (and as we have long argued) stratospheric prices would not have been paid by people who didn’t expect ongoing limitless price appreciation. This speculation, by all buyers, is a far, far more important engine to our bubble than other commonly touted phenomena, such as, for instance, foreign money.
See the VREAA ‘Spot The Speculator’ collection for numerous relevant examples.
Q: What happens to speculative demand when prices start dropping?
A: It evaporates.
Q: What happens to speculative holding when prices start dropping?
A: It becomes supply.
-vreaa
Hi Garth – your views on gold are well documented.
Could you comment on silver? Some think it is historically low.
Gold with a gland problem. — Garth
wHAT DID THAT chinese agent mean when he said , People are concerned about monetary product but here you are buying something. Real estate..
Sorry bud, that condo development is built on manetary product.
What kind of $hit are these people eating anyway.
$$$
Sunny Lee is my new idol, this man is fantastic with some great selling ability. Way to go Sunny!!
That is one awesome quote at the end of the clip:
“People don’t have a lot of confidence in those ‘monetary products’… but, with real estate, you’re buying ‘something’.”
I guess this guy doesn’t realize that real estate speculation was one of the main triggers for the U.S. economic crisis?
Or, that the ‘something’ you’re speculating on today has no actual value until you sell it?
I guess when the Chinese government has to put two-house limits on buyers in China to stop the speculation, that’s a pretty clear indication things are out of control… so, betting on “safe” Canadian Real Estate seems tame by comparison.
Prediction: by the time these condos are built, many of the buyers of this building will have moved back overseas to avoid backruptcy proceedings here.
Live in Bellingham, WA but work in Canada. Enjoy the blog. Canadians in general have no idea what is around the corner. This blog is right on the money. If you have a chance take a trip down to the US and ask the locals about real esate. A real eye opener.
Local radio station …KGMI has a real estate segment each Saturday. Yesterday they anounced an increase in pending sales including condo construction in Bellingham. The reason for the increase??? The USA economy..NO It is Canadians. The ratio is about 75% CDN and 25% US. Thank you Canada!
My only worry is that the upcoming adjustment in Canada will affect our border town.
I propose that we re-visit this three years from now, when the Sovereign is completed and is registered.
If Garth is right, these folks will be underwater.
But if he is wrong, then I think that a three year period of incorrect prognosticating will prove that you can’t be sure of something all the time, and that Canada is simply a desireable place to live. Will you finally admit that you were wrong all that time? Or will you continue to kick the can down the road and tell the readers here that in just six more months the crash will arrive?
I mean, jeez, you want to compare Vancouver to Detroit?
If you are wrong, then all the folks here who decided to rent instead of own their HOME will be pretty frustrated.
And I don’t even want to consider those who are on here because they cannot afford to buy, and instead of working a bit harder/smarter, choose to talk down real estate.
And Garth, you have been wrong about Gold too. Just pointing it out.
I’m glad it’s different where you are. — Garth
I understand the danger of viewing real estate as an investment strategy. I also understand how it would be difficult/impossible to sell a home if your mortgage is worth more than the value of your home. But if a house is viewed as a place to live, rather than a retirement plan, and if there is enough equity in your home, then it shouldn’t matter if house prices go down, because you can sell your home for less than you paid, but you can also buy a new home for less than you would have paid when you bought in the first place. I know I’m not responding to the topic of today’s post. It’s just a thought I wanted to express.
Then ensure this home represents a minority of your net worth. — Garth
It’s a goddamed TOWER…a box in the sky. Totally dependent on electricity and pumps for everything, from flushing toilets to lighting to the faucets to the elevators…and you pay not only a mortgage but condo fees…forever.
You own nothing REAL – no land. You have no claim on anything other than the developer’s and insurer’s goodwill and cash – if any – should problems arise. You’re unlikely to build any equity at all, as this blog has repeatedly said, in the years to come.
There’s a HOTEL underneath it? What’s the market going to be like for pricey hotels in the middle of suburbia in the next decade? Any guesses? What happens if that doesn’t work out?
One more thing. We live in Taiwan. We were here through the 1999 earthquake and we know what happens to the resale value of a damaged tower, and to the lives of those who live in them. The Lower Mainland is due for one someday.
I guess they think these are some kind of “investment”, or stake in the future. After all, prices will only go up, right? In Hong Kong, everyone lives in a highrise unit, after all…
But times are changing and the economic future will likely be somewhat poorer, more expensive, less mobile, less liquid and will demand flexibility.
So, there are easier ways to flush $260,000+.
And the blonde TV bunny says, “Oh, and that condo in Burnaby, it’s sold out.” But her tone is: “sorry suckas you lose again–you’re priced out forever.” 3 years? It can’t and won’t be anything but a messy swamp then–get it?–underwater. But the developer will probably say, “We’ve made a killing over the years we’ll just let people out of their contracts with only a small processing fee. And you probably believe in the tooth fairy too…
Yesterday Mister Obvious started a thread about the leaky condos and he had a lot of good points. It is an ongoing clusterf**que. But how much do people owe for the repairs?
A friend of mine had to cough up 10 large on the spot for her share of her condo’s repairs. She did what most, I suspect, did/will do: she took out a HELOC to pay for it. Bought a new flat screen with the left over bucks. No worries she opined, “the value just keeps going higher.” And of course that’s true, until it doesn’t.
“South Florida is working off of a totally new economic model than any of us have ever experienced in the past.” – Ron Shuffield, Realtor, March 2005
It’s never different this time.
A realtor for the Burnaby tower said that most buyers were Chinese. As my wife (also Chinese) noted, most Chinese are unsophisticated herd investors: they see a line-up as an irrefutable indicator of demand and they’ll jump on it. They don’t do much analysis and they don’t read non-mainstream websites that offer alternate points of view.
Right now they’re all still big believers in RE — there are realty offices in Chinese cities that specialize in selling RE in other, distant cities, and people regularly buy speculative properties sight unseen. And they’ll all be right together until they’re all wrong together.
ps. Garth this is the second time in recent days you’ve used the word ‘resplendent’. What’s going on?? :P
Now, the winds point them to greed. Soon enough it will point to fear.
weathervanes have no memory
My wife and I were merrily discussing the ‘hoax’ lineup at dinner tonight, as announced last Tuesday…saw the lineup myself…and are aghast (astonished?)that it sold, let alone “out”…soo soon! What are all these nimwits thinking?
You’re still wrong about gold Garth. Perhaps it’s a misunderstanding of the value of goods ala Adam Smith. A good is worth the net value of the raw materials that go into it, plus the value of the labour it takes to craft it. Gold mining is very energy and labour intensive, thus there will be a lower limit on the price of new supply.
On the other hand there is an upper limit too, as supply and demand respond to price. The demand for gold falls as its price rises, just like everything else. If China does actually plan to move 10% of their reserves to gold, that takes a lot less gold at $2000/ounce than it does at $200/ounce. So gold probably has one of the most linear demand curves around, and unlike oil, it is not inelastic. So I will agree whole heartedly it isn’t going to make anyone rich.
Central banks around the world still are the major holders of gold. Why? Because they can use it as a reserve. It is universally accepted at the C-Bank level. Probably always will be.
However, I will agree with you on the point that it will be a cold day in hell before it’s used by the common man for everyday transactions again. Not likely.
Both gold and housing can drop below the cost of new supply in the event of a bubble leading to oversupply or in the case of gold something that causes dishoarding, likely by the C-Banks. A similar situation might be dishoarding of foreclosed properties in real-estate. But sometime down the road both imbalances will be worked off.
I can see why you want to abuse gold bugs, especially the sort that think it’s going to $32,000 and ounce and all they have to do is burry a brick of it in the garden and soon they will be rich like Midas. That sort of thinking is delusional.
But what it probably will do is maintain its purchasing power. One ounce of gold today buys you about 14 barrels of oil. It takes a lot of diesel to make an ounce of gold. Therefore, it will probably always buy you about 14 barrels of oil. Not ever 28, so it won’t make you rich, but 14, so you’ll stay the same, within a certain range. Same with other things. Today an ounce of gold will buy you a decent suit or maybe 500 loaves of bread. It probably always will. Of course as with any commodity there can be significant short term volatility.
So I think if you are going to be the gold expert, show a little more balance. You are right to chastise those who advocate gold ownership as a means to gain a fortune, because that won’t work, but it is a good inflation hedge in uncertain times. Yes, it carries no return. But neither does much else right now when risk adjusted. Sure, it’s risky, especially over the short term. But so is cash these days. Should you have a big pile of gold in your home safe? No. That guy in the US that just had $750,000 of silver stolen from his home shows the risks there, and besides it isn’t suitable for barter. But 5-10% of your holdings in CEF or some other liquid fund isn’t going to hurt anyone. Or, if you want exposure to the miners instead, a little XGD will balance the portfolio.
But I certainly agree 5-10% is the maximum allocation most people who aren’t speculative traders should consider at any given time, and it isn’t going to make you rich. It’s volatility insurance. Doug Casey thinks the number is closer to 30% right now, but he also thinks the currency system is going down at some point. But even he doesn’t recommend betting the farm on it.
I think the currency system is in trouble, but the US dollar cannot collapse just yet because it’s still backed by both depleted and enriched uranium. A new kind of metal backed currency that says “accept it or die” on it instead of “this note is legal tender”.
This is the weighting I recommended in the book I wrote in the fall of 2008. Get with the program. — Garth
http://vancouver.en.craigslist.ca/bnc/reo/2224355942.html
Speculators already selling off….
I know a Chinese man who lost 450k in the tech bubble….nuff said. Thes are sheeple and nothing more.
Incredible. Monkeys can type! — Garth
“But if a house is viewed as a place to live, rather than a retirement plan …”
overpaying is overpaying, why make excuses to get yourself into a bad deal??
Was there a Caucasian person in that video besides the real estate agent?
The problems with BOSA condos is that the STRATA CORP – which is owned by the condo owners does not own the land or the parking facility. That’s a 99 year lease. In addition, the Commercial units do not pay any maintenance fees. So, all the condo owner owns is the box in the sky and nothing underneath – but they pay all of the maintenance fees. Granted 99 years is a long time but a few years ago they were selling townhouses in False Creek as the 99 year leases – they were a disaster because price you paid was just a pre-paid rent – you owned nothing. They are not selling those types any more; but, now they have found a new way to do the same thing. Read the DISCLOSURE STATEMENT.
Greetings:
There has been no “fundamental shift”. Bullshit!!! We have always had some who see their property as a home, some who see it as an investment and others who are speculators driven by greed. Some ethnic groups are more willing to gamble than others. Canada has always been this way, and always will be!!! IF one wants to accept that real estate does have intrinsic value, then only that which one owns the land will fit this description. A condo complex does not, and never will. In my SFD where I own the land, I can plant a garden, stack firewood, repair cars, build things, set up the swimming pool, have a barbecue, crank up the stereo, build a bunker, even take a piss outside if I choose to do so. Try these in your tower to the heavens!!!
“They have suffered a bank run”
South Korea suspends four banks for six months.
” Due to soured construction project loans”
http://www.bloomberg.com/news/2011-02-19/south-korea-suspends-for-savings-banks-for-six-months-in-liquidity-crunch.html
Been watching the events that have transpired in the middle east, egypt etc… and it made me think about something that could truly smash things up big time in the US.
What if people start to protest the unemployment numbers in the states? what if people are sick and tired of the FEDS BS and the budget etc, and start to demand changes…
over 40 million on food stamps and the U6 rate of greater than 20%…. I am sure there has to be some serious rumblings.
any thoughts?
Nah. Of course not. The little orgy-in-the-condo-tents we saw this weekend in BC is exactly why interest rates will be increasing. The last thing the economy needs is an asset bubble rife with speculation, fed by cheap money and the herd’s conviction that prices can only move in one direction. It’s madness like that that ensures the outcome is a hard landing.
………………………………………………………………………
Garth, you are wrong on this one. We’ve had an asset bubble for years. The government knows about it and has done everything in it’s power to keep it inflated and will continue to do so. They have doubled down and are all in. The only “unknown” is how bad he ending will be.
I am not wrong. Rates will rise. Monetary policy will tighten. Credit will be less available. The US lesson may be lost on most people, it is not to the BoC or Finance. — Garth
is the global news presenter single???…I would buy a condo for her in a second!
Make sure it has plastic floors and a fake fireplace. Van babes drool for them. — Garth
@17 Toronto Bubble boy:Prediction: “by the time these condos are built, many of the buyers of this building will have moved back overseas to avoid backruptcy proceedings here.”
Maybe that’s what will happen. Vancouver has been grumbling for quite some time that many of the newer ethnic communities are not integrating into the “Canadian melting pot” like previous generations of immigrants. Perhaps this type of thing will be the catalyst that sends them jumping like a flea off a wet dog’s back.
Figuring out Vancouver real estate is like figuring out Tim Horton’s…neither one makes any sense. Tim Horton’s products aren’t very good —the pastries have been shrunk in half, and they aren’t even fresh baked on premises anymore. Prices have gone up a lot, and the value-for-money isn’t nearly what it used to be. The constant line-ups are insane, and in some cases traffic snarls in front of stores are life threatening. Used Tim cups account for a good chunk of all the trash kicking around the gutters of any city.
Heck, even the THI stock IPO amounted to a fleecing of Canadian retail investors by the big U.S. institutions who got all the allocation and quickly flipped it out.
Yet, I expect to be absolutely pilloried for not being a real Canadian by loving Tim Hortons.
So if Tim Horton’s can become such a mindless cult, why not Vancouver real estate? With these mortgage rules, a $450,000 condo only takes about the same amount of cash down as a cup of coffee, at least for now.
Vancouver is not Detroit. Sovereign is not Pets.com. Chinese love RE and pay only cash. Many Chinese buy houses in Vancouver with $3 to $4 million dollars of cash in one single payment. That’s why the Chinese keep wining the bidding war. There is no financial leverage. How can RE in Vancouver crash? Impossible. So buy now or be priced out forever.
I sure hope that was sarcasm, Jimbo. — Garth
I love this headline “US economics: One big Ponzi scheme”
http://english.aljazeera.net/indepth/opinion/2011/02/2011218151257526294.html
These are people who have the firm belief that there is always a “Greaterfool” who will handsomely pay them their just reward. As Post #23 stated, these are very naive “herd” investors. Again, it is guaranteed to end badly.
The people who are making these purchases are not reading this blog, they believe that what happened in the US is isolated and could not possibly happen in Canada and the reason they believe these things is because the only news they ever hear regarding real estate is the main stream media and their non stop parade of real estate “experts, mortgage “professionals” and every other Tom, Dick and Harry who has a vested interest in pumping the product.
I remember watching news stories back 3 or 4 years ago showing condo developers in a Dubai mall selling brand new condos sight unseen to one person after another in a long line, all very naive looking “Investors”, proudly telling the camera that prices are going up 15-20,000 dollars/month. Again, we all know how that ended and we all know how this Vancouver/Canadian real estate fiasco will eventually end.
Why wait for a correction? I pay 1500 per month for a 3 bedroom older but well kept house that would cost me 3000 plus to ‘own’. Today’s definition of own: 95percent of my payment going to the bank as interest. 5 percent going to ‘equity’ that can evapourate overnight. I don’t care how long this correction takes, because I am free of the bs attitude that owning a house is the be all end all of middle class existance. Its just numbers. No emotion. Renting is half price for me and I don’t have to fix toilets. Leaves lots of time to read this blog.
“Was it the faux line-up? The pimping by Global TV? The bargain appeal of $700 a square foot? Planeloads of condo-horny Mainland Chinese? Or is this pathetic blog now so full of crap it can’t see a real estate rally of historic proportions with no upside limit?”
I think you finally hit the nail right on the head!
This pathetic blog now is so full of crap it can’t see a real estate rally of historic proportions with no upside limit?”
Suck it up dude, you have been wrong for so long, stop living in denial.
Of course. You’re right. This is a healthy market. What was I thinking? — Garth
Can we all just finally admit that Asians ARE driving this market. At least in BC. I mean just watch that video.
Another interesting end-is-nigh article on RE.
However, it was soiled with another put down of bullion lickers as follows:
“That, by the way, is exactly what the gold bugs think, too. And they are just as screwed up as the numb nobs who paid world class prices to buy a concrete box in Vancouver’s lousy imitation of soulless Mississauga.”
This is clearly a misguided statement to those who have made their fortune in PM’s and continue to expect a substantial increase in these very perilous times.
What is sweeping the mid-East is unprecedented in our lifetime and clearly imperils our lifestyle with the potential for oil shortages and very high energy prices; either of which will bring down RE in a hurry. However, oil and PM’s will rise in tandem.
As an aside, even last week, who would have ever thought that Gaddafi could be gone very soon. Not even on MS media radar last week.
Garth, stick to RE and crazy Canuck buyer stories.
Stop trashing PM’s at every turn. Accept that PM’s are liquid (very good) and move on with more RE melt stories.
Good luck to all as fires rage across North Africa and into the Middle East. Millions are not sleeping well tonight.
If your fears materialize it’ll take more than gold to buy your way into my Bunker — Garth
Crazy: I propose that we re-visit this three years from now
Patz pretty much has the same idea
How about five months? August 2011. That will give us a year of declining sales figures and if it’s a solid 12 months of declining sales figures then everybody’s gonna know. Everybody.
As for the Chinese investors, if I am not mistaken, China recently allowed their citizens to invest in foreign countries as a method of skimming off inflationary pressures domesticaly (cause God knows they won’t let their currency do that as that would require removal of currency controls)
If this is the case, then two thoughts come to mind. #1. Good on the developers. Milk this sucker for as long as you can. Bring that money home to Canada – we can use it.
#2). For the domestic consumer of property – you better realize this is just a matter of China exporting it’s inflation to Canada which will not end well. The more it inflates, the harder it will crash. If you can make money flippin to foreigners – go for it – but for the young’ns that want to buy and hold: you are signing your financial death warrant (for 7 years until your credit bureau resets)
Maybe ‘F’s’ next move needs to curb foreign speculators (unless he wants to milk them too)
“As my wife (also Chinese) noted, most Chinese are unsophisticated herd investors …”
I would say most people of any origin are unsophisticated herd investors … herding behavior is a instinct developed over millions of years of evolution.
Great info, and although I am not in this league, I do like reading the comments and opinions.
Nah, really I just come here for the babes!!!
Ahh yes the old pets.com, that was classic.
Say didnt that happen in BC? As in year 2000 BC? might as well have as no one remeber it anymore.
I posted a link on here a couple of days ago about a BoC press release in March of 2001, interest rate 5.25%, thats BoC rate baby.
the only thing you have to know if Blow off top.
Spin is spin, but the numbers dont lie, sales are down nationwide, wait it out until August, see what happens…
Re #35
What if people protest in the states? The majority of them are too ignorant to do so. Most of the senior financial officials in Obama’s cabinet were former heads of finance companies that they virtually destroyed, or they were advocating for financial deregulation. These people destroyed companies and caused tens of thousands of layoffs, yet they had the audacity to collect their bonuses and some even got severances despite having ruined their own companies. The folks at Goldman Sachs were betting against securities they sold clients! They also believe the tea party bullshit about less government, less taxes and more privitization. Well, how’s it working out so far folks? Fifty million of ya on food stamps, and many are still dumb enough to try and stop the health care initiative, despite the fact that almost a third of bankruptcies in the States stem from insufficient health care coverage.
–
“OMG. Is it different this time? Beats me. Be afraid.” — In the grand scheme of things, what could possibly go wrong?
Well, we could be whacked in the noggin with a 2×12 at full force. That will knock sense into some of us, but most will be shot forth from a cannon into the middle of next year, and not just with RE stuff — there’s a whole lotta shakin goin’ on thruout the world.
“Yeah, baby, we’re on fire…I just come here for the babes. Nine months later it was bankrupt.” — Babes are not one of the best overall financial strategies, but they are better than guys, that’s fer sure.
“. . . the government do its best to avoid a housing correction . . .” — Kweschun: If the govt. tries to keep moderate housing price increases / decreases, what will prop the govt. up when citizens start noticing the true figures (hidden + real unemployment, soaring food costs and other necessities), and then realize they’ve been had for several years now?
Simple fact is people will be as mad as hell, ain’t gonna take it anymore and plenty of them won’t care less. They will have nothing to gain or lose.
*
Iceland One and Iceland Two. Smart move by the people in charge. As one Middle Eastern politician said earlier Sunday, “Obama can go to hell”. How does one spell I-M-P-E-A-C-H-M-E-N-T?
Surveillance State In three or less years, we have gone from zero to drones taking pictures of us, just like the UK.
Sovereign Citizen Once something has been started and is in motion, it cannot be stopped entirely.
Eekonomeee Ummm, prices of precious metals are like a yo-yo in slow-motion.
Bahrain Seems the US is caught between a rock and a hard place. Plus — Bahrain Two “As Israel’s puppet states fall one by one to the outrage of the people, it is clear that US and Israeli planners have hit the panic button and are desperate to restart last year’s failed coup against Iran, if not spark an outright global war to distract the world from the growing awareness of Israel’s subversive activities in their nations.” wrh.com.
6:42 clip “UK to ask EU to condemn Gadaffi tomorrow. Something is afoot – this is strong language and condemnation.” Libya is considering shutting off oil exports.
GW is good for some, along with 9:20 clip Michael Crichton on GW. Plus 1923 — Same old, same old. How many of us were around then? GC – GW – CC All change!
2:55 clip FOX Lies! That was well-known anyway. All it needs is for a few hundred US troops to come home, and Wisconsin’s budget problem is solved. So why doesn’t the WH do it? The War on Terror is a facade — the only terrorists belong to govts., and the have the full backing of the m$m.
Koch Brothers behind effort to kill public unions in Wisconsin.
To all bloggers,
Browse the attached website, and take note of what mansions, etc are listed in such states as Florida, Arizona, even Washington, etc.
Hope RE prices in the Lower Mainland do not mirror the US prices.
Good luck to all the restless RE investors.
Oops,
Here’s the website
http://www.zillow.com
Fact, 70% of the population in north america own real estate. Fact, .8% of the same people own any kind of precious metals investment. Fact, The average percentage of financial assets invested in precious metals over the past 100 years is 26%. Fact, one is in a bubble and one is not. There is no correlation in cycle tops between the two. Fact, history shows that when real estate bottoms it correlates with a peak in interest rates and gold. Fact, interest rates must outpace inflation to signal a top in gold and a real return on fiat currency. Does anyone on here see interest rates outpacing inflation? In todays culture, facts don’t matter, only perception of reality does.
Vancouver real estate may be in bubblicious territory but this market really is different. Boat loads of rich Asians with their hot money burning a hole in their pocket.
Garth, your theories are correct, as long as the market you are talking about does not have Asian Hot Money. Have you taken this factor into consideration?
These Mainland Chinese all own factories in China that make ipods, iphones, smartphones, digital cameras, MP3 players, computers, laptops, bicycles, applicances, etc., so they have billions to spend on Vancouver real estate.
45 North, I agree more like 5 months but I said “in 3 years” because that’s when the building is due to be completed. The way things are going it wouldn’t surprise me at all if it didn’t even get built. I wonder how safe the deposits are. Can u spel bankruptcity?
200 units don’t sell out in a day. Usually most of the units are assigned before the sales centre even opens, after considerable marketing effort. The opening is for hype. Often times, blocks of assignments are purchased by real estate agents, to sell later. That way, the developer can pass the risk on to the agents.
Remember, no real estate exists yet, so no units are being ‘sold’. These are only assignment contracts.
In this light, the Craigslist job ad for people to line up, and the subsequent ad flipping assignments, fits this scenario.
#3 Dan – Hi Dan I googled “leaky condo dew point” and found several articles, most too involved for me, but this
one covers it at least partly on page 4
http://homepage.mac.com/planet10/bmw/sip-info/Fibreglass-info-New.pdf
As I remember it, the arguement was that thicker 2X6 walls have their dew point where mositure condenses
part way towards the interior, while for 2X4 walls it was
closer to – or on – the exterior. Just something I heard,
never researched it further.
To #19 – Crazy : quote “If you are wrong, then all the folks here who decided to rent instead of own their HOME will be pretty frustrated.”
Oh noes! God forbid i’d be renting!!! See what people like you fail to understand is that some of us are interested in what happens to real estate because of the knock on effect you idiots who are buying when prices are sky high – will have on the economy.
Some of us actually are HAPPY renting. We dont see renting as being a dirty word. I earn 140k a year. My monthly payments on my rent are FAR less than a mortgage would be, i invest the rest, and i have a LOT of assets that can be made liquid at a moments notice.
And – get this! If i’m bored of my view.. I can up and leave within a month! If the job market dries up in my city – i can go to another one without any major issues!
But i guess in your book im just “stuck” renting for my whole life?
I guess that’s the biggest problem here.. Canadians seem to have it bred into them that renting is somehow stupid and its somehow wasting money.. When in fact the complete opposite is true!
It’s about time they taught proper money mangement in schools. Then we wouldnt get idiots almost tipping the economy over because they’ve all bought into property or gold just because “everyone else was”.
As my teacher used to say to me when i was 6 – would you jump off a cliff just because everyone else was?
For the Americans it was “different here” until 2006, for the Japanese it was “different here” until 1989, for the Irish it was “different here” until 2007, for Dubai it was “different here” until 2009, in Hong Kong it was “different here” until 1997, … Britain … Spain … Argentina … etc., etc., etc.
Each one was “different”, each one had its own rationalization as to why the historical rules of valuation no longer applied.
Really, it just isn’t all that hard to figure out what happens next in Canada … Australia … Poland … China … etc., etc., etc.
Garth et all,
Here’s what I don’t understand. It’s no secret the developer is in business to be as profitable as possible, especially Bosa. The RE agents, same thing, sell for the highest price possible. Nothing wrong with this.
But, the strange thing is if there is so much pent up demand you can sellout in one day guess what? You’re priced WAY too low. Would either the developer or agent sell WAY too low? Highly unlikely.
Looks like a duck, sounds like a duck……….
RAINBIRD – very interesting comment. Is ther Disclosure Statement online anywhere? Or did you grab one from the launch?
Leased land plus paying the common area maintenance of the hotel component and/or the commercial space. Those condo buyers are totally screwed.
The Burnaby frenzy is consistent with the latter stage of a bubble about to burst. When everyone and his monkey is talking about buying gold, that’s when to sell.
#27 says: “A good is worth the net value of the raw materials that go into it, plus the value of the labour it takes to craft it.” — Absolute rubbish.
A good is worth what someone is willing to pay for it. Period.
I read this blog everyday religiously! Garth is spot-on about real estate. But in regards to gold, he is biased against it. Gold is not a way to make money, it is just a hedge against inflation. Only fools would think that it is an instrument of investment.
The financial markets on the other hand are drivers of investment. It is just too bad that it is difficult to trust them anymore. Next day, you could be wiped clean. And Garth, the financial market is a fool’s game as well. Just like you said, there is always someone else who will buy your investment when you cash out.
We are all rats in this game, taking as much from one another as possible. If only human beings learned to live a sustainable and simple life, a lot societal and financial problems would be eradicated.
#40 JamesBC
Chinese love RE and pay only cash.
—————————————-
You only see the cash… You do not see the 4 million dollar loan which was drawn on HSBC in Hong Kong the week before.
Where do you think all the massive lending by Chinese banks is going? Even if it’s an equity draw down of existing real estate, it’s still a loan. 65 Million apartments are sitting empty in Mainland China at the moment.
Does this sound like a sustainable model?
$700K for a condo… could I interest you in some swamp land down in Florida??
List and sell prices in January of Cityplace condos in Toronto for those interested.
http://www.condolivingdowntowntoronto.com/agent_files/pdffiles/Toronto-Real-Estate-LastMonthAt-CityPlace-s.pdf
Sunny Lee’s parade will soon be trashed by
Rene Day
SO getting sick of waiting for Vancouver to correct. I am super frustrated. I am a professional who makes over $100K myself and our family income is double the Vancouver average yet we still cannot afford a home in this city. There is something seriously wrong with this picture. I am beginning to think there is something to the “Mainland China” buying property here. -Who else can afford to own? Sh*tbox tear-down houses in East Vancouver sell for $700K. Who is qualifying for these homes?
hmmmm i notice everyone in line is Chinese…
maybe you paranoid types who think we are lying about the chinese and their incredibly scary influence on house prices here can stuff it..
ps..as they get richer and we get poorer there will only be more. Until now the average chinese have never known the concept of credit and guess what happens when that door opens? sadly they LOVE vancouver and will pay the chump change for our comparatively huge spaces and our generous social net.
@#32 RAINBIRD… I recall that there are other mixed-use buildings in Vancouver where the residential strata owners pay the utilities for the commercial units… and the developer collects the rent on the commercial units, but still includes some sort of expense for the utilities built into the rent. I also read that in one building, it costs each strata owner $40 per month more than it should. Isn’t that illegal or something?
@EVERYONE… Did y’all notice that Sunny Lee of Royal Pacific Realty today is the unlabelled ‘buyer’ from the Feb. 16th video? I’ll write out what he says in both videos:
Feb. 16th–
MSM: “Are you gonna live in this building, or are you just gonna flip it?”
Sunny: “Ahh… I have no idea right now because that’s uhh… that’s depends on how the economy goes and… that’s ahh because it’s completed three years later. Who knows, eh?”
Feb. 20th–
Sunny: “Comparing to a downtown Vancouver, we have uhhh… we have uhhh… I would say… uhh better traffic here… we have uhhh relatively bigger size of the units… ahm y’know we have a bigger shopping more… mall beside us.”
MSM: “Realtor Sunny Lee is waiting in line with more than a dozen clients. He’s convinced most of the prospective buyers here are betting on an even hotter real estate market in three years, when the building is expected to be finished.”
Sunny: “We are still remember the two years ago, the economic crisis… y’know people dzz… people don’t have a lot of confidence… under those uhhh monetary products… but as a real estate, you are buying something.”
So that sums it up. Global gave us the false impression that Sunny was a buyer a couple of days ago… but now let it out of the bag that he’s a Realturd. I don’t trust anything with the word, “royal” in it.
Sunny’s also wearing the same clothes in both clips… so it’s hard to say what kind of juxtapositioning Global did with these clips spaced a few days apart. Did Sunny Lee really line up for this entire time?!
Making another rental offer on a condo tomorrow at neo in Cityplace …. I’m finding that while there are LOTS of 1 bedrooms available for lease in downtown Toronto …. Almost NONE of the new buildings have parking (for rental units)
I asked my agent about this. She said that parking spaces cost an extra 35k or so when buying a downtown condo and speculators I mean investors who plan on renting out or flipping the unit almost never buy the parking spot on a 1 bedroom.
Also many new condos downtown don’t even offer parking on 1 bedroom units.
So if you are looking for a 1 bedroom in the core and you dont need parking. Then rejoice, there is a glut of them.
If you are a normal person like me that drives, then be very sad, as 1 bedrooms with parking in the core are hard to come by and you won’t be getting any deals if you do find one.
I am sure there will be a correction but after the 1,330,141,295 chinese people buy….so you have to wait until that time, if not this generation maybe the next, good luck waiting.
Here’s a secret. Fear is safer.~~Garth
Damn, you do a zinger ending well. Very nice.
off topic
somebody asked a couple days ago where the tomatoes in California come from. I counted in local Trader Joe’s today 8 kinds from Mexico (2 organic) and 2 from the US
Canada should do what they did in Australia…put a cap on foreign investment
Sold out means nothing.
When the BC Lions sell out at 33,000 or whatever the hell
the magic number is, guess what, it’s not sold out.
They could easily open up the upper levels and add another
30,000 seats.
Now we know that Sovereign is NOT sold out.
There will be a Phase TWO, I guarantee it.
Don’t even try to pretend that it’s any near sold out.
At least 20 to 30% of those contracts will be cancelled
after the 7-day cooling off period due to cold feet or
specuvestors who can’t get do the flip on Craigslist.
The remainder are probably naive suckers pulled in by
pretentious realtors and marketers.
This is no different than Ticketmaster presales for concert
tickets. Some people get a presale code earlier than others.
For that presale, a particular number of tickets is set aside.
You see it all the time. Some dumbass tries to flip Katy Perry
tickets after the first presale. I log in at the next presale
date and immediately find tickets.
I didn’t see one person in that video who wasn’t asian (Chinese). I think there’s a lot of credence to the fact the RE market is being propped up by Canada letting in immigrants with money. We allowed a record high number of immigrants last year (280,000) NOT including 200,000 international work visas + who knows how many who maneuvered within our borders undocumented (75,000+??).
My wife’s parents who live in a good area of Mississauga, and who track the RE market because they own 3 other rental properties, recently told me all the 3,400+ sq. ft. SF homes near the neighborhood sold out recently for $1.3M and up. They said not one person who bought in was caucasian Canadian; they were in fact mostly “economic immigrants”.
It’s too bad government panders to special interests by letting everybody in to appease the banking, corporate and real estate lobbies. What are we as a nation anymore? But corporations are borderless and only care about money, social cohesion and nation building be damned. Growing markets and making more money is the only thing that matters anymore. Shameful.
The actions at that Burnaby Condo complex could have been staged (actors) again reported by Global. They reported as sold out which is doubtful given many developers hold back units for later sale. Also one has the right to rescind a contract after 7 days so no true sell out until after 7 days.
One must must wonder though if real estate will ever crash in BC as so far no crash (despite the USA crashing so when will it crash? If America eventually comes out of its recession this will certainly be a buffer to any serious real estate crash in BC.
#49 tiger baby: “I would say most people of any origin are unsophisticated herd investors …”
Fair comment, and I was generalizing. However, until very recently, their culture valorized the collective over the individual, and the pressure to conform was immense — in some cases, lethal. My wife remembers Communist indoctrination in her childhood very well.
Everyone everywhere is susceptible to herd behaviour, but some cultures encourage it more than others. And even when culture changes, traces of the past linger.
Folks, it just continues to get better in the best place on earth. I’m not posting as much anymore because the headlines of Vancouver riches is being released everyday by a myriad of News outlets. Imagine if you had the opportunity to invest in Microsoft in the 1970’s. This is what Vancouver represents. A watershed moment for TRUE wealth. You see Garth is right for the most part on Canadian Real Estate. But Garth and no one I repeat no one is going to stop 1 billion Chinese from investing in Vancouver. People see the headlines, interest rates rising, US real estate in a free fall etcetcetc. Does not matter. Everyone wants in here. Bitter posters like the American and Junius want prices to fall because they missed the boat. The boat is leaving but still has some space. Jump aboard or be left behind like the American, clueless in Seattle. Shell shocked that little backwater Seattle is with all its big Corporate employers is slipping away and a shadow of a Real City, Not some Cheap Emerald but Solid Gold
So they were line up to make $400…
http://vancouver.en.craigslist.ca/bnc/apa/2224133573.html
Any body who is interested in an assignment please contact me.
I have 3 units ready for signing
2 one bedrooms
1 studio
“#37 mefirst on 02.21.11 at 12:34 am
is the global news presenter single???…I would buy a condo for her in a second!
Make sure it has plastic floors and a fake fireplace. Van babes drool for them. — Garth”
You make it sound like everything else is not fake. I was surprised when I first heard of brick veneer, plastic window frames, imitation stone walls and walkways, metal shingles, plastic decks, and on and on.
Most of my ‘wooden’ furniture is veneer or worse, plastic covered wood chips and glue. My sofa is real leather, but the next one may be leather scraps and glue stuck on fabric and stamped with a leather look pattern.
As for the newscaster, she does look nice. But without examining her closely in person, I don’t know if she is wearing a wig or if every facial feature is painted on or a surgeon made major alterations or there was extensive image editing before airing.
Sometimes I prefer the blue pill.
I come to this blog for entertainment. So babes are nice but if not babes, nothing repulsive please.
….So here’s the question: Is it really different this time?…
Not in Calgary.
….That, by the way, is exactly what the gold bugs think, too….
Those that forget history are doomed to repeat it. The Western World will be learning this lesson shortly.
#34 Dan in Victoria
….“They have suffered a bank run”…
There is a least four bank failures a week in the U.S.
#46 mid-Ontario
…Garth, stick to RE and crazy Canuck buyer stories…
Garth said a while ago that inflation will not effect North America. Eventhough the world is awash in paper money.
So don’t worry. He is right on everything.
Actually I said we were headed for asset deflation and price inflation. Try to get it right. — Garth
I’m a Chinese Canadian. First, thank you for this blog. I wish more people would read it. The problem in Vancouver is that it’s an Asian hotbed for over inflated dreams, and ego’s. One thing I noticed, is that almost all the buyers were speaking Mandarin. No longer the Cantonese society of old in Vancouver. These people are are from mainland China, and are often sent over to make the purchase. They don’t intend to live in them, they will rent or re-sell them. The problem is, they are being fed a bunch of BS in China that these prices are the lowest they will ever be, and you need to buy it now before you lose your freedom, kinda thing. It’s so screwed up. I’d love to post a flier I have that proves this point. It’s all in Chinese though. Some of these people are just pure greedy idiots, others are speculators, and others are investing money from criminal organizations in China. I mean, there are still some new condos in Richmond, all bought by Chinese around 3 or 4 years ago, and they are EMPTY.. what’s that tell you? I feel sorry for Canadians that you are being taken for a ride here and that your future is bleak. I would stand up to foreign buyers and say NO WAY! Of course they will call you racists if you are white. Since I am Chinese I usually can ridicule these types and get off without without being labeled racist. I am however labeled a sell out, to Chinese community. Whatever. I’m an independent soul. I am not fueled by greed, all I want is fairness for all. Keep up the great work on the blog! (One thing I want to say.. if you are stupid enough to pay condo fees over $100 a month, then you deserve to go bankrupt. What a scam!!)
Garth all I know is our brothers and sisters south of the border had their savings wiped out by prdedatory lending that fueled massive speculation and created a bubble. That’s what Vancouver looks like to me. Maybe the Chinese can afford a loss in values? Maybe these are wealthy Chinese. Real Estate is a perceived value. Until you have a solid offer from a buyer you don’t really know what it’s worth. We are very suspicious of appraisals these days. Most Lenders I deal with don’t trust them much. And I have seen some crazy appraisals before. One of my private guys looks at an appraisal then says “how fast can I dump this on the market? What is the that value? Then he will lend 60 percent of that. Private lenders don’t have the luxury of CMHC.
Sorry I made a mistake. It’s 80 percent of that :)
Did a little more research on the neo building I’m about to try to lease.
http://torontorealtyblog.com/2009/07/13/the-new-upscale-student-ghetto/
This condo lease hunting is harder than I thought it would be. :(
I’m not a gold bug by any stretch of the imagination, but Garth’s off-handed comparison between gold and real estate is bordering on the ridiculous.
1) I can sell a gold fund like Sprott Physical Gold in about 5 seconds. Can you sell a house that fast?
2) I don’t need leverage to purchase gold. The main reason people are at such risk in real estate is LEVERAGE.
3) The cost of buying and selling gold fund shares range between 10 and 20 dollars. How much does it cost to buy and sell real estate?
4) You can’t bring 2.5 billion Asians to Vancouver to buy real estate, but you can export gold directly to them to feed their insatiable appetite for the yellow metal.
5) Gold is priced in US dollars. Thus it is simply the inverse of Zimbabwe Ben’s printing press. When Ben stops printing it’ll be time to sell gold.
I’ve been investing in precious metals since May 2009 and I’ve taken enough profits to take out my original investment. So I will not be “screwed” even if the price of gold and silver go to zero because I don’t get greedy and I don’t use leverage.
“On the other hand there is an upper limit too, as supply and demand respond to price. The demand for gold falls as its price rises, just like everything else.”
Actually it doesn’t. It’s the damnest thing – as the price rises people become more interested in it and demand rises. That’s because people don’t consume gold, instead they use it as a store of wealth. The same applies to silver (the US mint just smashed it’s all-time monthly sales record of silver eagles in January), as well as other traditional stores of value.
@ #31 Ben
Yes. The Newsreader.
here is a cartoon about UK banking-
http://www.youtube.com/watch?v=Y-LjL2yyVZo&feature=player_embedded
#46 – you need to take physical delivery of some sector ETFs, so if TSHTF, you can barter them with Garth for shelter in his bunker.
Greater Fools indeed Garth.
This silly ass country imports them to prop up the real estate market to the disadvantage of working natural born young adult canadians. Politicos and banksters are traitors and enemies of the people.
The only way to restore sanity is to remove the cause and protection for the insanity and crime. Followed up by a reversal of long standing law and policy.
The only proper way to get new home buyers and new canadians is to make them in canada from canadian men and women. All imports must be banned and exports of those who disagree encouraged.
Steven
#35 kc
Been watching the events that have transpired in the middle east, egypt etc… and it made me think about something that could truly smash things up big time in the US.
What if people start to protest the unemployment numbers in the states? what if people are sick and tired of the FEDS BS and the budget etc, and start to demand changes…
any thoughts?
==================
On Saturday 68,000 people in Wisconsin protested a bill that would eliminate most of public employees’ collective bargaining rights.
http://huff.to/fGVL3j
[…] This post was mentioned on Twitter by Bill Stenson, Pece Petrovski. Pece Petrovski said: Be afraid — Greater Fool – The Troubled Future of Real Estate#comments http://t.co/FuUUaKm […]
Need I watch again to see and here of those 1000’s of Senior Boomers who have sold their homes across Canada and have flocked to buy in Vancouver for long a happy retiremen? I did not here or see one did you?
A couple of questions:
1) Are all these foreign buyers paying cash for these properties, or does Canada allow them to qualify for CMHC insured mortgages?
2) If they are so keen on North American real estate, why are they not buying down south, where prices make a lot more sense from an investor’s point of view? Are the buying qualifications different across the border? (this one for “The American”).
Thanks.
#96 and 97 Robert Dudeck
Bang on!
I just want Garth to lighten up on bashing PM’s.
I very much appreciate the RE info despite the continued look on my friends’ faces when I try to talk to them about concerns discussed in depth here.
Another leg up today in PM’s.
Garth. You’re a nice man, but you should really stop talking about Gold.
Harvest your gains. — Garth
@ #95 Carlyle:
Just stay away from CityPlace, and you should be ok (unless you are a 22-yr-old ne grad who likes crowded elevators).
Maybe consider a slightly older building – then you can also get more square footage.
The building won’t be complete for another 3 years? That’s a HUGE gamble.
Yikes!
I just watched that clip…”With Real Estate, you’re buying something…”
Also, the RE agent quoted at the end of the clip made it sound like the ‘economic crisis’ of 2008 is behind us.
Last night I was at a wedding reception in the Brampton. Started to talk about RE. Yes, according to the guests, Canada is different than the USA for various reasons I won’t get into.
Time will tell.
It is amazing to me just how fast virtually everyone has forgotten 2008.
Even the Dow is less than 2,000 off of its high.
And yet, nothing has changed with regards to repairing the problems that caused 2008 in the 1st place.
I suspect that eventually – we will repeat 2008 however the end result will be extremely ugly.
Of course we just don’t know when but I suspect in the near future…
Garth many people would be surprised to learn that Whitby Ontario has the highest per household income in the province which was recently estimated at $110269 per household beating out places like Oakville(mid 80’s), Mississauga(mid 90’s), and Richmond Hill(100K). Guess what is happening in one of Ontario’s wealthiest cities? Inventory is rising, prices are falling, and closures are few and far between. Here is an example of an MLS listing in Brooklin (the better part of Whitby) that was originally listed for $469K, than reduced to 449K, than 429K, and now $409K. Here is a description of this home:
Remarks For Clients: Brooklin-Designer Showpiece! Over 2800 Sq.Ft. Stunning Dbl Dr Entry W/Full Size Inserts Opens To Huge Foyer W/18’Ceiling & Spiral Staircase W/Upgraded Stylish Rod Iron Railings, Great Curb Appeal-Landscaped Front & Fenced Backyard. Designer Kit W/Upgraded Stainless Steel Appl & Centre Island, Modified Floor Plan-4th Bdrm Used As Entert/Media Rm-Can Easily Be Converted Back (Seller Will Convert Back),Gorgeous Dark Hrdwd Floors, Extras: Mn Fl Library/Office & Mn Fl Laundry, Walk To Schools & Parks W/Dir Access To Garage-9’Ceilings On Mn Fl, Freshly Painted. Inc: S/S Microwave, D/W,Gas Stove & Fridge, Front Load Washer & Dryer,C/Air,C/Vac,Elf’s,All Win Cov, 2 Gdo’s & Remotes. 30 Days/TBA.
With price drops like that one has to wonder if $389 is next for this home. Latin…Fragilis Venalicium
#92 Chen,
Thanks for the post. One of my best friends is Chinese Canadian. He is a professional and very well known in the community. He is just hating what is going on the same as you are.
First of all, you can see from the pumpers above that they love to USE the Chinese community to scare the rest of the population into buying. This type of fear mongering just breeds resentment and racism. The portrayal of every Chinese person as a walking suitcase of cash ready to buy anything for sale is manipulative fiction.
Secondly, there is clearly massive manipulation going on within the Chinese community as well. Thanks for pointing this out. For some reason people assume that Chinese Mainlanders are economically sophisticated and must know something they don’t. Nothing could be further from the truth.
This cannot end well for anyone involved. It strains race relations in Vancouver and will do considerable damage to the economy for a generation. So stupid. So sad.
Something strange going on here. Everyone buying was Asian as some blog dogs pointed out.
#92 Chen, thanks for your honest post!
How do you spell ‘money laundering’?
Alot of people are putting money into RE as they are still scared to invest in the equity markets, after the big crash. They either have no clue or are too afraid to invest in equities, despite the tremendous returns the past year or so.
To them, RE is safe and only rises in value.
RE sentiment will turn, media will focus on ads from mutual fund companies, or investment companies, instead of builders. Equities will be pumped, RE will lose favour.
I can remember when everyone though Nortel could only go up too, computers, internet, and anything related were the only way we would do business, the future would only grow with any related company or supplier. Well, computers/internet are the way to do business, but public sentiment about it was blown way out of proportion. A house is just a house, not the end all of investment products.
Alot of money will be lost in RE in the near future.
Its not immigration that is fueling RE.
Just because all the people in line are asian, does by no means equal that they are all immigrants. They might have been born here for all we know, or have lived here for years and years.
This whole fallacy about the “rich asians” is a joke. Yes there are a couple of rich asians in China, but the vast majority is poor, as in dirt poor.
Google FOXXCON, its the largest manufacturing company in the world with over 1 million employees and see what they pay there staff.
Whats fueling RE is cheap money, lax lending standards. Unsavy speculators, buying with 5% CMHC mortgages.
Funny thing is that in the commodity markets, Comex increase margin requirements on various commodities when the price goes up, they have done so on silver,gold,cotton,rice etc.. in the last few months.
What would happen if CHMC did the same, brings the margin up too 10 or 15 or 20% down. We all know it would be game over. Well, if your commodity requires a 95% leverage to sell, its not a robust market.
A salutory lesson from my fellow Brits on the perils of buying in another country believing prices can only go up.
“Seven years ago she went with a million and now it’s worth a quarter”
http://tinyurl.com/642ezox
G&M reporting yesterday about a possible DOUBLE dip in the US housing market!!!!
http://bit.ly/dN1haz
But it’s different here!!!
Move Along!! Nothing to see here!!!
#104 David B.
Come on David, keep up with the times, the retiring Canadians are simply being outbid by the Mainland Chinese, they are now priced out of the BC RE market forever and will have to suffer through their retirement in Saskatchewan. And won’t those Mainland Chinese who are not currently biding up prices and buying BC RE be pissed when they get priced out forever by whatever the next delusional excuse the MSM trots out starts outbiding them… Moon Men from Mars is my guess, bringing all their Marsian Moon Money…
i think when the units go down in price most will just walk away and the taxpayer (cmhc) will pay
It would be naive to assume that ALL of the Burnaby presale buyers (sold out project) are stinking rich Asians who want to shelter their cash from homeland authorities.
I could be wrong but don’t be surprised if many in the lineup are emulators who are aspiring to be like their affluent ethnic counterparts.
Generally speaking, mainland Chinese immigrants struggle in the job market because of their foreign credentials, language skills, and visible minority status. This explains why many of them resort to condo flipping, gambling, and other risky ventures.
Very interesting article in Vanity Fair Magazine about the Irish crash: http://www.vanityfair.com/business/features/2011/03/michael-lewis-ireland-201103 . Amazing how the academic who predicted the crash was vilified before it happened.
http://www.theglobeandmail.com/news/national/british-columbia/reluctant-condo-buyers-sued-for-backing-out-of-village-purchases/article1914780/
Garth,
Do you think land will correct as much as houses?
(Alberta for instance)
When are you coming out with another book?
I will pretty much buy any book you write…
The average employment income of a Chinese workers is about 5000 USD per year, and yet waves of Chinese are buying multi-million dollar houses in Vancouver.
ERGO, one must conclude that the Chinese are qualifying for these mortgages vis-a-vis the CMHC and Canadian Banks ;0)
Okay, just kidding.
I liken the phenomena of home-owners believing that the housing bubble is not a bubble to some of my very dear, hippy-pinko friends that believe in homeopathy.
Homeopathy, fundamentally, is about diluting poisons to infinitesimal (re – nothing) amounts, but believing that the poison imprints themselves into the bonding structure of H20…. blah, blah, blah… and thereby making you healthy.
Okay, so it is a hole wheelbarrow of steaming bullcrap.
But, despite half-a-lifetime of science and schooling, I can no more convince someone who has drank the homeopathic kool-aid of its silliness, as I can convince my myriad of recently-become homeowners friends of their folly.
People who bought in believe there is no bubble. Rather, they think they’ve caught some privileged rocket to the moon… of… uhm… wealth and stuff.
They believe what they believe, and all of the attempts at convincing them otherwise is wasted breath. Hell, if it wasn’t the Chinese, the mountains or sound banking fundamentals, they’d come up with something to justify…. a bubble.
But, as science (and chemistry) rolls its collective eyes at the absurdity of the pseudo-sciences, so a pragmatic economist or investor recognizes a bubble when they see it.
You can’t convince a retard there’s no housing bubble, if that retard owns a house. But, if you save just one retard… well, he’s probably convinced someone else in this world, some retard-in-waiting to become a full-fledged retard, with a huge, stinking, wheelbarrow of a mortgage.
At #20: Dutch 4505, that is pretty funny actually. WHY would Canadians care to buy in Bellingham, WA? I mean, it is basically on the border. Why wouldn’t they just buy in Canada? I didn’t think Canadians wanted anything to do with the U.S., only if the property is dirt-cheap (a.k.a. Phoenix and Florida). Makes one wonder why. Bellingham, WA is not a cheap place to buy, nor is it an expensive place to buy. Its about average. Can you tell me how that development called “Marin” is going up in Blaine? That was a Canadian developer that tried to put up some condos out on the spit, and now that development is belly up, right?
#109 Oasis
“Harvest your gains. — Garth”
Fundamentals are still very strong. This is the 3rd inning.
#109 Oasis
Silver is in extreme backwardation. This mean the physi price is greater than the forward price. Investors want the metal today and are not willing to wait. Very bullish.
A 3 year wait for a condo to be built in BC. Eighteen month wait for a home in Hamilton or Oakville to be built.
So why are we paying people to sit on EI for up to a year?
And to all my Ontario friends, happy Family Day. We can all sit around and contemplate a future with abysmal productivity and no manufacturing jobs. Party on!
Thanks Dalton. Muh! Even if no one else loves ya, the civil servants, municipal and union workers will always be there for you. That double and triple time is so sweet!
#20 Dutch4505 wrote…
“I Live in Bellingham, WA……. Yesterday they [Local radio station KGMI] anounced an increase in pending sales including condo construction in Bellingham. The reason for the increase…. The USA economy?..NO It is Canadians. The ratio is about 75% CDN and 25% US.
Thank you Canada”!
———————————————————-
You are welcome Dutch. We really love you guys.
It is what it is and it will be what it will be.
You are all speculating… no different than they… not in the least. They in their bet you in your hold which in itself a gamble.
You think yourselves better than they? Think again. You’re not even in the game.
You think you will fair better than they? Only time will tell. So far, it is they who appear to be leading. They who appear to be “making it happen”.
Ya pays yer money and ya takes yer chance in the BIG GAME of life.
Enjoy the ride. We are all headed to the same destination.
“In Halifax houses are selling like snowblowers – at a discount.”
Garth, do you have a reference for this statement? Debating listing my condo in Halifax.
Thanks,
John
On the newscast for this the only Caucasians in the entire cast were the ‘sellers’ … ‘all’ the supposed buyers were Chinese. Either they are the smartest group, or the ‘silliest’ group … which is it Garth????
You have to ask? — Garth
This out of Europe this wkend …
“A separate euro-zone official confirmed there has been a consensus among other euro-zone members that Portugal will need help ever since Ireland sought a bailout in December and added a bailout would increase pressure on Germany to agree to boost the lending capacity of the European Financial Stability Facility, the euro zone’s main bailout fund”
This is quantitative easing Euro style. Print baby print.
Just an update. Last week, I wrote a letter of complaint to Global TV regarding its slanted coverage of the local greater Vancouver real estate market. I submitted that letter to this blog, where it was published as reader response #1 of last Thursday I believe. Other blog writers and readers saw that letter and republished it.
I just wanted to let you all know that Global has yet to respond to me, either to that letter or to my complaint the previous week in regards to the TV spot chronicling that helicopter flyover of White Rock.
IMO, neither of these two non-events qualified as “news,” and Global merely covered them (at length and all gushy, might I add) to pump/pimp real estate for one of its primary advertisers – the real estate industry. That some of the people in the Burnaby condo lineup were paid, and that Global portrayed the helicopter trip as being something it wasn’t would certainly appear to add fuel to the fire.
But as I said, Global has yet to respond. However, the CRTC HAS responded to the letter of complaint I submitted to it. To quote that CRTC reply, “Given the concerns you have raised, I have asked the CBSC (the Canadian Broadcast Standards Council)to pursue this matter with CHAN-TV on your behalf.”
I followed up myself with the CBSC this morning, contacting that organization directly to reinforce my original complaint. I’m, of course, EXTREMELY interested to see what it has to say on the matter. Maybe it blows me off, but maybe, MAYBE it doesn’t.
I’ll keep you all posted. If we can’t trust mainstream media news outlets to give us UNBIASED coverage of the news – and by that I mean REAL news, not pump jobs – then something’s got to give.
Actually I said we were headed for asset deflation and price inflation. Try to get it right. — Garth
Good boy Garth, hedge your statements.
No hedge. Just what’s coming. Gas goes to $2 a litre, houses fall 20%. I hope you’re ready. — Garth
#20 Dutch4505
Some of my comments did not print. Not sure why. Here is the balance of my thoughts on your market though.
It is my contention that the bleeding in the US real estate situation could be stopped fairly abruptly through a combination of influences.
1) Foreign investment, particularly that from Asia.
2) Canadian buyers willing to pick up some of the slack.
3) An acknowledgement that US rents now make investment property there a viable proposition.
4) Some mild and persistent inflation pressures to begin take up the slack lost in the deflation of home values.
5) Your own domestic investors again participating more fully in the business of landlording and buying up surplus properties.
6) Stabilation of the market with rental returns as the key to ending the decline of home price values.
The confluence of these factors and others will eventually bring a return to market stability. I do not worry about the overhang of properties as these will be mopped up quickly once investors again return to the scene.
I also believe that the worst of the market correction is already behind us for many regions of the US and that good quality investment properties are now an asset class that should be considered seriously for a portfolio, particularly as there are very clear signs of inflation on the horizon.
Glad to hear your market is improving because of Canadian buyers entering your market. All the best.
The source of at least some of that “hot Asian money”?
http://www.vancouversun.com/news/Chinese+government+official+flees+Canada+with+report/4319698/story.html
If this is true, ths dude should be immediately snared and sent unceremoniously back home on the first flight, along with any other crooks who’ve arrived here with ill-gotten gains.
“CMHC new immigrant mortgage policies state that newcomers with permanent resident status have access to all mortgage loan insurance products. Non-residents can insure up to 90% of their financing for the purchase of a single, owner-occupied residence. There are no additional fees, and no required minimum period of residency. Even if current credit history is not available, CMHC will consider alternative credit information when granting coverage.”
The link:
http://www.consolidatedebtnow.ca/wordpress/mortgages/new-immigrant-mortgages/
Permanent residents also get full access to student loans which would account for the huge increases in university/college student enrollments.
At #107: S-J, I am happy to respond to your question. First, I should probably lay to rest any delusion that foreigners are not purchasing in the U.S. They’re purchasing here about 4:1 as opposed to Canada, in fact. I think Canadians believe that because they see so many “foreign” (a.k.a. Chinese and/or Asian) buyers there, they naturally assume that they aren’t buying in the U.S.
Preceding the housing collapse in the U.S., the U.S. was flooded with Russian, French, German, and British buyers. Of course, Asian buyers were flooding in too. These were typically second homes, and not primary residences unless they were working toward becoming citizens.
Now that that’s out of the way, that ratio is definitely askew when you consider the U.S. is roughly 10 times the size of Canada. The Chinese and/or Asian buyers are not buying here in the same percentages because the U.S. does not provide citizenship or legal residency for investors offering $500,000 or more. Canada does provide that for foreign buyers, making purchasing property there more attractive for now. As Garth has pointed out often, the U.S. makes sense for investors right now in many areas because prices are so low. We have those investors still pouring in, but typically for secondary residences, not for primary residences.
Additionally, lending standards in the U.S. have tightened immensely over the past 5 years, both for primary and secondary homes. They’ve tightened so much, that even well-qualified buyers are finding it difficult to obtain financing. If you are buying a home in the U.S. now, you will generally need to put 20% down (not in ALL cases, but certainly now in most). The standard in Canada is currently much lower, allowing people people to pay as little as 0% down, and I believe the average in Canada right now is about 7% down making it easier to get in on the goods (this is very similar to how lending was in the U.S. pre-crash). Money, albeit still “cheap” in the U.S., is actually more expensive than it is in Canada too. So, once you qualify for the loan here, it is going to cost you more here than in Canada. I’m not sure about interest-only loans in Canada, but in speaking with my Canadian friends, they have told me that the interest-only loans are effectively the stated or advertised rate. In the U.S. now, the advertised interest-only rates are published, but you must generally qualify and additional of minimum of 2 points higher than the published rate. This is to ensure the buyer can afford a potentially much higher payment if/when the interst-only loan resets 3, 5, or 7 years down the road. Interest-only loans are still permitted, but they are indeed much more difficult to obtain and qualify, and these now require some of the highest credit scores. Previously, these interest-only loans were some of the loosest standards.
I hope this information helps.
Carlyle,
When my husband and I sold our house and started the search for a rental in Oakville in 2009, it became a discouraging task. All I could think was “We have to be out of here by the end of June and we are going to be homeless!” Even at times I started regretting our decision, thinking about all the things we were giving up.
Luckily my husband helped me keep me focused. He said to me: “This will be the first time in your adult life that you will be completely debt free.” That of course didn’t hit me until the deal closed and everything was paid off. What a feeling.
And we got rid of so much stuff that we had accumulated over the years that we didn’t need or want. I look back now and think that our house had actually been a 4000 square foot storage unit for all the stuff that we never used.
We eventually found a nice home that suited our needs well (even managed to get in a couple of days before the house closed), and after two years we are so relieved and happy that we made the leap of faith.
Now we see the glut of “affluenza” (love that term!) all around us everywhere and we are finally off that treadmill. And we have a really great life.
You and your wife will get there too. You will find a place – maybe broaden your search a bit because there are some great areas of downtown Toronto that have easy access to the TTC routes. If you had to consider a place with no parking but could get a permit for street parking (which is very inexpensive) that would not be the end of the world since homeowners in many areas of Toronto only have street parking as an option. We are a bit spoiled in the burbs with our two-car garages.
I know it’s discouraging right now Carlyle, but try be open minded about your options and keep your eyes on the prize. See it as an adventure. Change is not easy as you break away from the rest of the sheeple!
Good luck finding a place…
>With a quarter of all Americans now underwater – and most were not subprime borrowers or McMansion gluttons – the average equity citizens have in their homes has plunged to just 2.6%.
That’s a pretty steep number given that 32% of American households have 100% equity, i.e. no mortgage.
house equity over time chart from barry ritholtz’s blog
Do you mean more narrowly American households *with* mortgages?
The majority of households either have no mortgage or they rent. This mess was the result of financial dicking around by a mere 33-35% of households.
“…Sitting on soil that cannot be replaced because it is of nature. Wrought by the hand of the Creator, not of man. Intrinsic value. Timeless and eternal. ”
Garth’s reference to the Creator is well-grounded because the housing situation (and by extension the economy) is a moral issue.
Here’s a relevant paragraph I have borrowed The Interim, a Canadian newsletter that deals with pesky moral issues.
The following paragraph describes the US — but more readily applies to to Canada with our sanctimonious better-than-thou attitudes plus those insipid human-rights tribunals visited upon us by well-meaning, social engineering Liberals.
“Today, the textures of life in America are approaching the surreal – the hyper-decadence; few & fewer people doing truly productive work; the celebrity worship; the political-correctness in journalistic, intellectual, literary and artistic spheres; and so forth.”
This was a description of a people that has lost its way.
Just like Canadians.
And while Garth makes fun of the Lord at his risk, he is unabashedly anti-bullshit & practical and that’s why we love him. Well, that plus the pictures.
That, by the way, is exactly what the gold bugs think, too. And they are just as screwed up as the numb nobs who paid world class prices to buy a concrete box in Vancouver’s lousy imitation of soulless Mississauga.
Garth,
DEFINE A GOLD BUG?
I THINK YOUR STARTING TO PISS OFF EVEN YOUR LOYAL READERS.
$$$
Look, you can borrow to buy RE but its allot less likely in the case of Gold. You were talking $500 gold and also $2000 gold.
Take a brake from your blog and reflect.
Harvest gold profits now. Sell down to my long-standing recommended weighting of 5-10%. If you don’t you’re a gambler, not an investor. — Garth
@ #49 tiger baby
Most ‘investors’ are nothing more than gamblers.
Roll them bones. Ha!
Hey, I got a hot stock tip for ya. Or, ‘invest’ in this sector or that. Flailing (mostly) losers.
Get ye to a casino. Even the investors on this miserable blog doling out their ‘hot tips’ have the investing sophistication of a small soap dish.
Hey, I’m a fraidy cat…but I haven’t been hit by any cars either. Survival. ;)
Fee based financial adviser(planner)…Do tell.
Hun, dya mind, sno-cone please. love ya.
Be afraid: Oil and Silver up 5% overnight. Pain at the gas pumps! They will squeeze us and our food supply (delivered by trucks).
Almost live charts:
http://finviz.com/forex.ashx
#87 BPOE: What about the shitty weather 10 months out of twelve and the corrupt insurance monopoly? Do those things make you smile over your morning java? Perhaps you love getting soaked, in cold air for 9+ of those months, and, unlike all other homosapiens, don’t have cells that need the sun’s rays to function properly.
(p.s. I’ve stopped at 2 only because pulling the other astonishing and life draining factors of living there isn’t really necessary and I have a desire to run outside and let the sun hit my face, winter air and all)
#119 – Lonely Limey, thanks for the great link on “Costa Too Much”…..
;-)
Reminded me of an episode of “Selling Houses Abroad” with Andrew Winter:
A middle aged British lady was trying to shift her tired old Spanish villa. Andrew gave her a lot of good advice and background information, spruced up the place and they got it on the market – but the upshot was she refused to budge on price, despite the absolute proof he provided to her that her place was overpriced and Spain was – even then – seriously overbuilt.
She probably still owns that place…..
>#74 chris on 02.21.11 at 2:34 am
>SO getting sick of waiting for Vancouver to correct. I am super
Please learn from the U.S. Don’t jump in too soon when it starts to correct. Please. Talk about frustrating to watch.
>#70 Peter Pan on 02.21.11 at 2:04 am
>#40 JamesBC
>You only see the cash… You do not see the 4 million dollar loan which was drawn on HSBC in Hong Kong the week before.
Worse than that. I have a bad feeling half of them are pooling from 25 associates and relatives a back home. For their sake, let’s hope it’s 100% HSBC. But given that mortgages are a relatively new concept in China, I really suspect not.
The Canadians are sniffing around disasterous REO’s here in Maui County.
One guy asked me if we are going to buy, and I put down by Diet Coke and said “Not in this Century”. He thought I was drunk. “Why – look at the deals…” he sputtered. “Yes, and look at the power bills, ants, you can’t do anything without hiring an American – etc. – rent and when something goes wrong – I make a phone call”.
He thought I was nuts.
Let him worry about it – pass the ice.
#97 Carlyle
That’s CityPlace. The condos there are almost all 1 bedroom and 1 bedroom+den, low price for investors and young people, so you can expect a certain demographic there.
#115 Junius
Of course they’re not. They’re simply momentum investors, the stupidest kind there is, who always pile in en masse when something is nearing the top, and sell when it’s clearly on the way down.
Also remember the FX factor; the Chinese who bought several years ago using their US-dollar pegged currency, must look like absolute geniuses having quadrupled and quintupled their money in this time.
Chen’s post is a breath of fresh air – of course much of the current madness in Vancouver is a direct result of the investment of money from China – this is pretty obvious.
What will be interesting is what will happen if sentiment in China ever shifts away from dreams of gold in Vancouver real estate. Plenty of investors will be able to dump inventory and simply walk away and head out of country never to be seen again. This is a great setup if you’re on the positive end of it – real estate goes up, you keep the cash; real estate goes down, you walk away and forget about it.
That’s the 50+% meltdown scenario, I think.
#88 Patient
So if dude got paid $1,100 to wait in line and then picks up another $1,200 for selling on Craigslist… $2,300 for standing in line… not bad for three days standing in line…
Harvest your gains. — Garth
______________________________________
i’ll harvest my gains, when governments stop printing money and US interest rates reach 20%.
is that coming any time soon?
Gord in Vancouver – Post #123..
Insightful comments, Gord. The closest city to the small town where I live is Las Vegas. Not that long ago, real estate used to be a “can’t lose” proposition there, too, also for a multitude of good reasons: fastest growing city in the U.S., 300+ days of sunshine, retirement haven, no state income tax, endless entertainment options, Asians love it, etc. etc. Didn’t work out.
#144 No crystal ball…
http://www.youtube.com/watch?v=MvgN5gCuLac
There will be no return to fundamentals in BC as long as it is a leading exporter of marijuana/North American drug hub. 84k average household income? 13X annual salary? It would certainly appear that we’re heading over the cliff. However, when the single largest industry is not factored in, the analysis is skewed.
Of course there is cheap money, speculation, and foreign investment. However, what truly is “different here” is that the property ladders first rung is not being set soley by the economic realities faced by traditional first time buyers. That demand is being amped by the tens of thousands of growers throughout the province, who when buying homes to manufacture weed, don’t have to worry about the monthly mortgage payment.
On the rungs above, everybody so far has gotten a free ride; pretty much a winning lottery ticket. Working people trying to reach the first rung have gotten screwed.
And the problem gets worse. At least it used to be “kinda” illegal in this province to grow weed. Now Health Canada has mandated it. The licenses issued to grow pot for “medicinal use only” has jumped from 900 to 12000, in the past two years.
Im not saying that a correction is unlikely. The variables you point out in your blog are certainly in play here. But 20% or so doesnt really cut it. We’d still be way overpriced. Im just saying that util the integrity of the first rung is restored somehow, we wont get back to true fundamentals.
#109 Oasis
Silver is in extreme backwardation. This mean the physi price is greater than the forward price. Investors want the metal today and are not willing to wait. Very bullish.
________________________________________
the only one who doens’t see that is Garth. 3rd inning? who knows. only one thing for sure, we’re not even close to a top.
oil will be trading $120+ soon. gold will be well over $2000. that’s the new reality.
Now I understand. It’s different this time. — Garth
For those who want to see California homes (where the weather really IS better) with price history and photos.
http://www.doctorhousingbubble.com/home-equity-loans-in-california-over-600-billion-pasadena-short-sale-pasadena-real-estate-auction/
#157 Guan-Di
“So if dude got paid $1,100 to wait in line and then picks up another $1,200 for selling on Craigslist… $2,300 for standing in line… not bad for three days standing in line…”
Well, it beats wasting several years on this blog for free, that’s for sure. But then is so much easier complaining day in and day out, on a blog, than go out there and actually do something usefull and profitable.
Now, who is that “greater fool” again?
#72 Carlyle on 02.21.11 at 2:13 am
Facinating, almost all sold below list at Cityplace! Huge oversupply in this area, and Concord is building three new towers as we speak, at Cityplace Toronto. Beside these, several other developments are planned like the Library Condos:
http://www.condo-living-west.com/tobuzz/2010/05/toronto-library-district/
Demand, meet Supply!
And to think, it costs at least $600/mo in taxes and condo fees to live in one of these 550sq foot rat-boxes in the sky.
#147 $froma$ia-The mother of all Bubbles
“I THINK YOUR STARTING TO PISS OFF EVEN YOUR LOYAL READERS.”
Thinking same thing, definitely questions Garth’s credibility as an astute economic student/follower. I personally don’t think gold is an end all be all type of investment but a good trade for what is happening in this world.
Gold has a place. Being obsessive and emotional about it, causing an overweighting is just dumb. But, you will see. — Garth
I live on the west-side of Vancouver – almost all the neighbours are Chinese – and I can tell you they are not all rich even though they live in $2M houses. The individuals next to me (from Mainland China) rent out every square inch in their house to tourists from China that come on holiday (or perhaps condo buying sprees). They also sell Amway and host wierd Amway parties complete with songs and games. A surprising number of the big homes are almost completely empty except for Hello Kitty kitchen mats and lawn chairs in from of big screen TVs – it seems a lot of immigrants come here expecting to make money on real estate and nothing else – when the music stops there will be plenty of hurt to go around.
Honey I shrunk the rat-boxes! 388 sq feet?
A 466sq foot 1 bedroom? :o :x
Greedy, greedy builders.
————-
The Presale Toronto Library District Floor Plans
There are a few featured Library District Toronto condo floorplans that have been released online at the marketing website that includes a studio and one bath plan called the Dickens which is 388 square feet in size and located on the 2nd to 7th floors. The Tolstoy is 403 sq ft and features a second to 29th floor locale with a balcony and 1 bathroom plus sleeping alcove. The presale Toronto Library District floor plan Rand is a 1bed and 1bath unit of 466 square feet on the 8th to 29th levels but no outdoor living space. It is however an end unit. Also presented at the Fort York Library District condominiums is the Mowat layout that is 492 sq ft and features 1 bed and 1 bath with a spacious outdoor balcony. The Dumas layout at the Fort York Library District floor plans is 493 sq ft in size while the Christie is 503 sqft, and the Proust is 505 sq feet all within the 8th to 29th floors of the Fort York Toronto high-rise condo tower by Context. The Homer Library District floorplan is a 515 square foot Toronto condo layout and the Hugo is 558 square footage but on the second to seventh levels
http://www.condo-living-west.com/tobuzz/2010/05/toronto-library-district/
Forget the Chinese. Canadians have been getting rich selling houses to Canadians. This debt-fueled ponzi scheme was fun for a while. I hope people will learn from their mistakes.
RET…
I can’t believe you pride yourself on being grossly overpaid at the expense of taxpayers!…
Your time will come. I will feel no sympathy for you during your upcoming strikes!…
#143American-The simple truth is that the only USA real estate markets that will eventually pull through this are those that are attractive to foreign money or the top 15% of Americans. 85% of the USA population has been losing steadily and will continue to lose unless current trends change dramatically-they simply don’t have the finances to support the overall real estate market.
Garth that sucker bullion just hit $34 an .oz and climbing. So why do you see precious metals declining when the world is in turmoil and the governments paying zip interest and printing like corrupt madmen?
I`m thinking I want more oil, commodities and PM`s .
That spokesknob sounds just like one of our blog dawg; Nosty Jr. You know the guy in the video who says people want to come to canada, which means bc, and of course that means Vancouver. I wonder if that spokesknob actually is a regular patron of this blog.
Gotta love that realty-urd Sunny Lee in that video. Thanks to guy like him, we have sold out at the Sovereign, I hope its only sold to mainland Chinese who are rich and wealthy and not like our cash poor canucks peers. Gotta love the money flowing back into Canada from all those years our manufacturing base, hence cash was flowing out of canada. It’s gone and now comes back on as direct investment. I love it. Hope this realty mania will continue indefinitely.
By the way, who owns Global TV anyway?
Economist Magazine Votes Vancouver THE BEST! Where’s Seattle LOL
Vancouver topped the list of the world’s most livable cities for the fifth straight year, while Melbourne claimed second place from Vienna and Australian and Canadian cities dominated the list’s top 10 spots.
In the annual survey by The Economist Intelligence Unit, the Canadian West Coast city and 2010 Winter Olympics host scored 98 per cent on a combination of stability, health care, culture and environment, education, and infrastructure -a score unchanged from last year.
See, this dude can easily purchase plenty of condos & SFH in either Vancouver or Toronto. Such foreign direct investment (FDI) into Canada can easily keep realty economy going for a long long time.
http://www.google.com/hostednews/afp/article/ALeqM5iwLbtyfORBRk6XJxIbzfrYlQSabw?docId=CNG.92c9a858b01aeeaf0f0e874dd3241370.561
http://www.winnipegfreepress.com/canada/breakingnews/chinese-official-accused-of-embezzling-14m-flees-to-canada-reports-116582668.html
Carlyle: try this place nearby, it’s 100% rentals:
http://www.leasefifty.com
>”Nah. Of course not. The little orgy-in-the-condo-tents we saw this weekend in BC is exactly why interest rates will be increasing. The last thing the economy needs is an asset bubble rife with speculation, fed by cheap money and the herd’s conviction that prices can only move in one direction. It’s madness like that that ensures the outcome is a hard landing.” – Garth
I am afraid it’s a little late now, it already is a bubble rife with speculation.
I wonder if it ever be possible to simply watch this spectacle unravel with awe and fascination rather than with bitterness and hostility.
The plot thickens, guaranteeing with ever increasing certainty a spectacular ending! I like where I sit – renting with no debt.
dear Garth,
gold IS money, everything else is credit. The intrinsic value of gold has never been zero. My gold has increased in fiat currency value around %18.5 per year average over the last 8 years, my silver %82 in one year. this is only the beginning, fiat currency holders will be wiped out. you are wrong, sounds like sour grapes to me. you missed the boat sunshine.
Gold is not money and never again will be considered currency. When you can buy at any Loblaws or Petro-Can with a wafer, I’ll eat it. — Garth
Garth,
can you eductate us on the Canadian laws/rules/rationale that allow foreigners to buy RE in Canada and not live here ?
I have been told that foreigners seeking “status” in Canada buy ppty here in order to “qualify”. But that they have no intention of living here. instead it is done to gain access to our health care system. urban myth perhaps ?
thxs
Gold has a place. Being obsessive and emotional about it, causing an overweighting is just dumb. But, you will see. — Garth
__________________________________________
one day you’ll be right. just not one day soon…
@ #39 mefirst
Yeah , Vancouver gals are as “real” as the faux floors and fireplaces. A nip here and a tuck there and voila! A Faux body to go with the personality
#176 BPOE
I guess housing affordability is not a dimension in the livability matrix. At least rents are still reasonable, for renters that is, not for investors. Enjoy your negative cash flow in the most livable city on earth!
Garth, as far as offering the glib response of “I see…it’s different this time” as an adequate, entirely sarcastic final word on the topic of gold, I’d offer this caution:
Gold was the historic store of value throughout history whenever humans, in their infinite wisdom, took things over the brink and blew the system of the day to smithereens.
It has only been the past 35ish years, an atypical period of relatively well-behaved financial controls (relatively…the important caveat!), that gold has not been called on to provide anyone comfort. Of course, 35 years is plenty long enough to become the only “reality” for people who measure all things financial in 90-day increments, and the ‘Black Swan’ knowledge is gradually expunged from the records.
So, Garth, it just might be that perhaps you are exactly right! That it is NO DIFFERENT this time, that it is exactly the same as it is every other time….that gold will be called on to provide the store of value it always has, and save the day for the relatively few brave, smart or lucky ones, just as it always has.
Pieces of metal. Get a grip. I’d rather have a farm or an oil well. Better still, lots of real money to buy food and fuel. — Garth
“Silver is in extreme backwardation. This mean the physi price is greater than the forward price. Investors want the metal today and are not willing to wait. Very bullish.”
DD
Stop trying to explain things to the sheeple!
They’ll never understand till it’s too late!
Not even family will get it till…they get it!
The world is about to change on the scale of a magnetic pole shift….oh well! no one lives forever
R
Its funny, they are selling leasehold properties at a premium.
You may think 75 or 50 years is a long time, but it really isn’t. Just think, for the time you plan a family and watch them grow until graduation its about 25 / 30 years
Then you only have 20 years on the leasehold left. At that point, who would buy your house because in a couple of years your is basically worthless.
Basically once the years degrade, the price will go down exponentially. until there’s a point (15 or 20 years ) which it would become worthless
“Harvest gold profits now. Sell down to my long-standing recommended weighting of 5-10%. If you don’t you’re a gambler, not an investor. — Garth”
Garth…Agreed
Take some money off the table …for we will have an inevitable correction
But keep a solid core of physical on hand
A correction could be severe in paper money terms
but will bounce back in short time…unless you own
paper gold vehicles …in which case there may be a disconnect with the physical price
There is also no guarantee you’ll be able to buy back your physical if it corrects violently down
The dealer premiums will increase …just watch
The aha moment of Vancouver Real Estate. Millions pouring in folks and no one can stop the taps. Vancouver bears got it all wrong; they look at things like higher inflation, higher interest rates, the market gone up too fast, what’s happening South of the border. The bears blinked and missed out. So many parts of the world are unstable. The reality of the situation is people in other countries want their money to be safe. Due to the countries they are living in their money could be confiscated or rendered useless on a moments notice. This is why money is pouring in to Vancouver. Because It’s Safe, It’s a Solid Investment and It’s the Best. The money ain’t flowing to Seattle folks where prices are hammered down 30% and counting and still alot farther to fall in that overpriced rain barrel. Vancouver on the other hand is just getting started. Hurry it’s selling fast!!!!!!!
#45 wes_coast and #63 Blobby
TOTALLY agree re: meh, could not care less about owning (have in Van in the past, it was no big whoop). Reality is, unless you “need” to own, or can’t stand the social “stigma”, renting is far superior to owning. Costs half as much or even less, is simpler, less stressful, no $ shocks EVER, can literally move on a month’s notice. I would even go further as to say, renting in a rental dedicated building is the only way to go (if that type of appt unit can meet your needs). Living in a dedicated rental unit building, that is managed professionally, is about as simple and stress-free as it gets. :-)
#121 Guan-Di
“Moon Men from Mars is my guess, bringing all their Marsian Moon Money”…. HAHAHAHA TOO FREAKIN FUNNY, thanks for that!
#166 lockstep- you think its a good trade. The question then becomes do you really think people are going to want to exchange it for depreciating currencies at this time?
172 Macrath- asking the right questions, just not asking the right person. Try reading up on Eric Sprott and John Embry of Sprott asset Management, Rob McCewen former ceo of Goldcorp, John Hathaway of Touquville funds etc.
The thing about false advice is eventually the market where the advice is given will shine a light on how bad that advice was. $2000 and $50 may be the numbers where people finally start realizing they’ve been lied to.
162 Oasis- you are correct, except its not really the new reality , its the same old reality that has been hidden to most people but is finally coming into view , even to the most dedicated 6pm news watchers and CNBCer’s
Harvest gold profits now. Sell down to my long-standing recommended weighting of 5-10%. If you don’t you’re a gambler, not an investor. — Garth
I would replace the word gambler with realist. I was mocked and attacked for saying years ago That i was fully diversified by owning both gold and silver. I stand by that. Markets will show who is right and who isn’t. A gambler to me is someone who puts faith is government inflation numbers and economic stats. I just wonder when the 50 and 2000 numbers are achieved what the excuses will be.
I can understand Garth saying Gold gains should be harvested. It makes sense to take some profits.
What I don’t understand is why he thinks it’s ok to have 33% of your net worth in RE right now, but PM should apparently get no more than 10% weight. That seems backwards to me… surely real estate is in more of a bubble territory than precious metals, even if I agree the latter is in a bubble, which I don’t.
Back to the point… Why does a house get a 33% weighting today when rates are rising, first time buyers have already bought in, debt to income is the highest ever, and price to income also the highest ever?
Those facts, as you’ve pointed out many times, show an inevitable fall for Canadian home values. Yet, no facts have been presented for gold’s inevitable decline.
Try living in a nugget, dude. — Garth
#133 Devil’s Advocate: “It is what it is and it will be what it will be.”
That’s not me posting inane tautologies like some whacked-out maharishi. That’s obviously some nut job.
I said I’m done. I’m gone like a boomer’s retirement fund. }:-(>
Done, down the road. You won’t have me to kick around any more. Taking my toys and going home.
Sayonara. Gone like Gaddafi. Finito Benito.
@ #177 Jeff Smith:
I’m going to play detective for the Chinese Government… I’ll take my clues from that Google article you posted and today’s video clip:
Clue #1: fled to Canada with his wife and two daughters
Clue #2: has $14M on him
Clue #3: Sunny Lee (the realtor in the video clip) just bought 12 condos in this Burnaby condo project
hmmm…. maybe they should be asking Sunny who his “buyers” are?
But of course I’ll keep lurking, ready to jump in whenever some imposter imposts me. }:-(>
#185 New Era
It’s not worthless. On paper, the value would decline until it basically falls to its rental value through to the end of the lease. In reality, leases are renewed, but the property is inherently more risky due to the uncertainty the renewal, and the conditions and expenses of such. It should always sell at a major discount vs a comparable freehold.
“Try living in a nugget, dude. — Garth”
Careful, that’s dangerously close to what an RE bull would say. i.e. “you have to live somewhere, dude! ”
Respectfully, you missed my point. What I meant was… How about renting and saving Garth. How about a fellow who would rather save 500k first? Then take 10% of that for a down payment on a house. Invest the other 450k.
I’m not living in a nugget doing it that way sir.
Nor am I overweight in any sector doing it that way.
lots of real money to buy food and fuel. — Garth
Exactly, my friend. Gald to see you come around.
Shame on you france .
http://www.nationalpost.com/Libyan+fighter+jets+land+Malta/4320632/story.html
Garth,
What is the business model that will keep this business afloat in the future? I guess they will have to rely on places ‘that are different’.
http://www.thechronicleherald.ca/Business/1228467.html
Wow!
Your NOT a gold expert too Garth. Please dont spread yourself to thin. I respect your blog on Real estate, but you cant possibly know about precious metals as well.
Actually real estate’s a hobby. Investing is my profession. And yours? (I have ruled out spelling.) — Garth
Number 181 Graham Kerfoot says:
“fiat currency holders will be wiped out.”
In case this is true, let’s think about which investments are fiat currency.
Cash in your wallet, safe or matress is fiat currency investment. Bank deposits and GICs are fiat currency. Bonds of all sorts are fiat currency investments. Bonds promise to pay you so many dollars poer year but make no promises what that dollar will buy.
It would be long term bonds that would be wiped out to the biggest extent if the value of fiat currency fell (meaning we get big inflation).
Strangely the yield available on long-term bonds is near record lows. This means that the people buying long-term bonds apparently don’t fear inflation. Time will tell if they are right.
And so what investments are NOT fiat currency?
Clearly gold and silver is not.
But also a house is not fiat currency, nor is land. Nor are stocks. Nor are cows. A stock represents a share of ownership in a corporation that tends to hold mostly real assets and tends to have the ability to sell goods at a profit.
So anyhow, just wanted to point out what is a fiat currency investment and what is not just in case you agree with the idea that fiat currency investments will be wiped out.
At #171: BrianT, that’s a ridiculously funny notion and typically a misinformed (as usual) Canadian sentiment.
Re:The Big Lebowski
Try reading up on Eric Sprott and John Embry of Sprott asset Management, Rob McCewen former ceo of Goldcorp, John Hathaway of Touquville funds etc.
What do you think those guys are selling? Where do you think their interests lies…you?
Like I said, it’s a good time to be in gold but there will be a time to get out.
Why do you think Garth has this blog for?
Take everything with a grain of salt.
I have been in Gold and silver for 8 yrs. now. I treat it as a trade. It was an asset class that was very under appreciated then and am waiting to see how everything pans out but there will be a time to get out, it is not a buy and hold proposition for me.
For those watching the markets… commodities are going thru the roof.
Oil-gold-silver-cotton-rice
if these ramps up do not subside soon, we will double dip and 08 will look like kids play.
Garth knows and understands the ramifications.
the BoC crew is probely starring at their bloomberg terminals with jaws dropped to the floor.
If these ramp ups stay, they will be rising rates .5 basis points at meetings.
“Try living in a nugget, dude.” — Garth
Well… strictly speaking, it is possible…
http://tinyurl.com/4k8sjqr
@ 176 BPOE:
You’re seriously stuck on the Seattle/Vancouver deal, aren’t you? Vancouver’s okay, but it doesn’t light a candle to Seattle. I could give a rat’s ass about those stupid lists anyway, and so could most people. We cling to that list because we believe it is what will substantiate our prices, but it won’t in the long term. You should do some digging, and you’ll find who makes those lists are those willing to shell out the cash to be “#1.” I live in North Vancouver and would move to Seattle in a second if I could figure out the process and how to get work there. I’ve read a lot of comments like mine over the past couple week, so what the hell does that say about Vancouver? Vancouver just tries way too hard, and it is always trying to compare itself to the likes of Seattle. If Vancouver would just drop the superficial spin and get over itself and embrace what makes it special it would stand on its own. I like it here, but Seattle is nicer IMO. I know you direct your comments to The American, but he/she is right and did not seem to slam Vancouver, but you do. I haven’t seen him/her say anything for a while about Vancouver/Seattle, but you seem to keep going at it. You really have missed his/her point that even in a bigger, better economy and city, that prices have fallen. So, what makes Vancouver immune? I can feel it trending down right now here, and I anticipate it will continue. Seems The American must have hit a nerve with you and you’re sweating! Keep it up “American!” HAHAHAHAHAHAHAHAHA.
208 lockstep- true but these people have also been right for the past decade, just look at their fund performance which i also hold. Your in the biggest bull market in history, taking profits now would be disappointing. We are entering stage 2 of a 3 or 4 stage market, the public isn’t even aware of it yet. .8% of the public own anything in this venue, there is a long way to go as i think you know.
At #190: BPOE, I’d actually like to point out a very interesting phenomenon has been noticeably happening over the past 8 weeks. Chinese buyers in particular have been showing up in the show rooms of Seattle, including 1521 Second Avenue, Olive 8, Escala, and Four Seasons. Would you like to know where most of these people have been coming from? VANCOUVER!!! That’s what a 30% price reduction in Seattle will do to the Vancouver Market.
I have to say, though, this whole 30% price drop is interesting because this isn’t new news whatsoever. This has been going on for over 3 years. Is this just news getting to you, BPOE? If that’s the case, you should consider a different occupation. Its your JOB to know these things. Why all of a sudden are you pointing this out? We’ll yell it from the roof tops if you’d like. WE HAVE HAD A 30% PRICE REDUCTION. That’s not a bad thing. We also have more jobs, larger population, better infrastructure, higher paying jobs, a more educated city BY FAR than Vancouver, a more diversified job market too. So, come one and COME ALL and buy in the AWESOME city of Seattle :-) See, we’ll happily accept Asian investors. It is starting to sound like they’re getting the memo that Vancouver is tapped out, so they’re looking South. Good luck!
#207American-At least you are consistent in your lack of comprehension-Canadians are generally far more positive on USA real estate than Americans. The reason for this is that the average Canadian is not busted at this point.
Dear Garth,
using my goldmoney account i can purchase goods and make payments in GOLD , bypassing the banking system altogether. Living in the uk i assume loblaws is some kind of store, no problem, i just transfer some gold into cash, into my bank account and use my debit card, easy.
Gold is not going up, it is paper money going down. rice, cotton, corn etc are not changing, the currency used to buy everything is being debased, gold is the guard dog, the canary in the coal mine, it is reasserting its self and giving out a warning, ignore at your peril.
Todays shocking events in Libya are a crime and a travesty. It is simply incredible and unacceptable that the regime has reacted so strongly and is now attacking protesters with tanks, strafing people by jet and using live fire against those protesting at street level.
These are crimes that will need to be addressed in time. There can be no shelter or refuge for those who have participated in the massacres today though. Mr Gadaffi himself must be put on trial.
It is now essential that that more than just words of condemnation be contemplated and spoken to bring the heavy handed force against civialians to an end.
I think we can all agree that the international community is now challenged to act in unison and to stand behind long established principles regarding human rights.
Clearly, the government of Mr Gadaffi is threatened and acting in an outrageous way by using heavy weapons of war against unarmed protesters. The establishment of a no-fly zone is just a first step in bringing some international pressure on that country.
We should not be shrinking violets when it comes to expressing our disgust with the actions that the Libyan Army and Air Force have undertaken today.
This violence against the citizens must end quickly and must be ended without reservation. Intervention therefore may be required.
#158Oasis-for whatever reason, many persons cannot understand that paper (or actually digital) money has a potentially unlimited supply. Likewise, the reason for this incredible accumulation of debt worldwide is not widely understood-the Ponzi nature of the economy somehow eludes most. IMO eventually most will see the writing on the wall but at that point it will be far too late.
@143 – The American.
Thanks for your reply. I can see that the stricter lending standards would make a difference. My brother in the UK has also said that the down payments have increased there and generally trying to obtain a mortgage, even if you are well qualified is becoming more difficult and is slowing the market. Here in Canada, even the 5% down is questionable, as some banks have offered cash back equivalents to this deposit.
Slightly off topic, but I was reading something about the repeal of the Glass-Steagall Act in 1999. How much impact, if any, did that have on the financial/housing crisis?
So almost every one of those buyers in the video was Asian, probably chinese…. this either will validate that the chinese are the smartest or dumbest people on earth….guess we have to wait to see how this one plays out!! lol
“I understand the danger of viewing real estate as an investment strategy. I also understand how it would be difficult/impossible to sell a home if your mortgage is worth more than the value of your home. But if a house is viewed as a place to live, rather than a retirement plan, and if there is enough equity in your home, then it shouldn’t matter if house prices go down, because you can sell your home for less than you paid, but you can also buy a new home for less than you would have paid when you bought in the first place. I know I’m not responding to the topic of today’s post. It’s just a thought I wanted to express.”
Then ensure this home represents a minority of your net worth. — Garth
_____________________________________________
Actually, as I understand it, the issue is not whether or not your home represents a minority of your net worth at any given time, but rather whether or not you will have enough other investments/money set aside for what you deem to be a comfortable retirement. The two are not necessarily synonymous.
“#212 TheBigLebowski on 02.21.11 at 6:25 pm
208 lockstep- true but these people have also been right for the past decade, just look at their fund performance which i also hold. Your in the biggest bull market in history, taking profits now would be disappointing. We are entering stage 2 of a 3 or 4 stage market, the public isn’t even aware of it yet. .8% of the public own anything in this venue, there is a long way to go as i think you know.”
I don’t disagree. That Is why I was questioning Garth’s stance.
However if you think we will be bartering for goods and services with gold you got another thing comin…
Garth is correct…do not convert everything into gold and silver…diversification is key.
Buy some Swiss Franks or even Canadian dollars god forbid.
I follow those guys very carefully as well, just know what they do for a living and take their advise to guide you in your positions and not change your life.
Have you met Doug Casey? I used to go to the Gold show in Pan Pacific in early 2000 when there were only 10 of us in the audience …lol …that is where I met Doug Casey. I distinctly remember that he says there is so much gold underwater (ocean) that it eventually kill gold’s allure as a scarce resource.. (Check out NUS.to) So far they are the first to drill for gold and copper underwater.
For now I will wait until stage 3 of gold bull market….EUPHORIA just like line up in Metrotown this weekend.
cheers.
Dear Garth,
I agree, I can’t use gold at Loblaws, can you spend Canadian dollars in Italy? of course not, so what do you do? exactly; thats it, switch to the required currency.
Carlyle, starting looking at places outside of the downtown core. Anywhere with reliable TTC service should be on your list.
#113 Zimmer – I totally agree with you, the problem I guess is that, in Canada, it was seemingly such a blip.
With respect to RE, I certainly clearly remember properties in my neighbourhood, on the WEST SIDE OF VANCOUVER, Arbutus area, NOT selling and when they sold it was $500,000 LESS than they do now. (This was early 2009.) I remember friends worrying about getting rid of their condo. . .
———————————————–
It is amazing to me just how fast virtually everyone has forgotten 2008.
Even the Dow is less than 2,000 off of its high.
And yet, nothing has changed with regards to repairing the problems that caused 2008 in the 1st place.
I suspect that eventually – we will repeat 2008 however the end result will be extremely ugly.
Of course we just don’t know when but I suspect in the near future…
Thanks for the advice S.B. and No Crystal Ball.
We actually did make a (lease) offer on a unit at Neo in CityPlace today.
I realize CityPlace has abit of a bad rap, but in terms of monthly affordability we couldn’t find anything better. Unit is a 1br + den (approx 630 sq ft which is HUGE for most 1br condo’s in the core) , and includes parking at 1450 a month. Pool, gym, and a Sobey’s at the base are also pretty decent features.
Almost all the condo’s I saw in the “core” of Toronto (condo’s south of bloor, east of Spadina and west of jarvis) parking was an extra 150 – if available at all.
You could of course go further out to Bathurst or north of Bloor, but we needed to be in the core for work reasons.
Definitely a younger building, (from talking to realtors alot of the clientelle renting many of the new CityPlace condo’s are 20 somethings … the building I’ll be leasing in at 4K Spadina, has an astounding 70 percent renter occupancy, and half the owners are overseas investors.
I have no idea what this is going to mean for future rental prices in the CityPlace area as there are at least 3 or 4 new buildings about to be completed, with another 3 or 4 on the way … all I can think is that there is going to be WAYYYY more units for rent than there are renters … although units with parking (which most don’t have) and units that are in the walkable core east of spadina, will still demand a premium.
S.B. you are right by the way about the CityPlace January sales versus listings I linked earlier on (will link again for those that missed it: http://www.condolivingdowntowntoronto.com/agent_files/pdffiles/Toronto-Real-Estate-LastMonthAt-CityPlace-s.pdf … almost all the prices are below list, many significantly so. Doesn’t bode too well for the condo market that’s for sure.
As for me and my wife I think we’re happy. At 1450 a month + 30 or so for hydro, we will be paying almost 300 dollars less than we pay on our mortgage + utilities now.
Even better with the profit we made on the sale of our home we will be almost out of debt freeing up close to 500 dollars a month in cash flow that was servicing that debt. Not only that, the savings in gas and no more 407 bill will add up to ANOTHER 700 dollars a month.
So about 1500 dollars a month 18000 a year, freed up which isn’t too shabby considering our home in Milton was only earning us 6k a year in equity.
Yeah I’m happy. =)
Why do you suddenly need to be “in the core” after living in Milton? You could lease a whole house in Milton now for what you are paying for 630 sf in the beehive by the RR tracks. — Garth
All these gold freaks, I’m with Garth, gold is pointless, cant eat it, drink it or stay alive with it. A gun holds more valve then gold. A gun can be used to feed and very easily used to steal your gold.
If gold goes to 2500 who cares it’s the small thinks that matter, water, food, mortgage payments etc, I know you can make money pumping useless gold but if your caught holding gold when the bubble pops your no different then a greater fool. So don’t put all you eggs in one basket. 10% enough
Garth>gold
Garth>recession
I should also say that that 6k a year in equity our Milton home earned was by no means secure since a drop in housing prices could wipe it all out.
OIL: be afraid pt II,
It’s up mega in tonight’s session so far, after already rising 5%+ in a 1/2 day session today:
http://finviz.com/futures_charts.ashx?t=CL&p=m5
Be afraid? It should be more like ‘get in or be priced out forever’. Van is the new Monaco, sorry pups but reality does stink.
We have been getting bombarded with clients in the last week or so, I apologize for the lack of posts coming from my end but when duty calls we must attend. I do hope that it slows a bit as I am planning on taking my sweetie to Bora Bora, now I just have to figure out how to distract my wife for that week, any suggestions?
#180 (debtified)
“I wonder if it ever be possible to simply watch this spectacle unravel with awe and fascination rather than with bitterness and hostility.”
It all falls under the heading of good old fashioned boffo entertainment now. I started off caring, even worrying, about my fellow Canadians. I have now come to realize those of my countrymen who would be wiped out by a real estate collapse are simply too dense to pound sand down a rat hole. There is no advice one can offer willfully ignorant people who refuse to examine history. I’ll admit though, Garth makes a noble effort in that regard.
Oh bollocks
“Vancouver voted the best city in the world to live in”
http://tinyurl.com/6gvz2n4
#223 Mickey,
You said, “Van is the new Monaco, sorry pups but reality does stink.”
Fat chance. Have you been to Monaco? It is 15-20 minutes by train from Nice. House prices in Nice are substantially less than Monaco. However the view of the Meditereanean is just as good.
Monaco is a tax haven. Vancouver is not. Give it up.
#192 TheBigLebowski
I`ve been listening to the what`s real money debate for a year now. Fiat is only good in your default country. If you have to leave town better to have universal money (gold ,silver ,precious stones) . All the tin-pot dictators know what real money is. That`s what they load on the cargo plane and they leave the debased paper behind.
F would not think twice to devalue our paper by 50% or more if the SHTF. He certainly debased our income trust paper quite nicely on a whim.
For the bunker dwellers…a source of food:
http://kawarthaecologicalgrowers.com
I guess those hippies come in handy sometimes ;)
“beehive”…please Garth the polite term is Rat-box (in the sky) ;)
Could you folks be a little kinder to those of us who live in the greater area of BC. This province does not end at Hope! The rest of us outside the Lower Mainland (and Okanagan have painfully endured rising prices caused by the dumb-butts in those places. A handful of them dumb-butts came to our small-lacking-in-services-town and dropped stupid amounts of money on overpriced properties and now everyone thinks their property is worth that amount. Oddly enough, there are oodles of properties that have been for sale for years, three to five (and even 6-7) not uncommon. There just aren’t enough dumb-butts to buy them all. And at least half a dozen (or more) of those same properties are now up for sale again? Not a single one of the relists has sold even though some had major renos and are now listed at less than they were before hand! It’s about time those of us who live in these small towns with few services get to pay what these properties are worth…here. I’d say based on the looooong listing times that those days are comin’.
Lotsa good posts today, incl.:
#113 Zimmer — “And yet, nothing has changed . . .” and “. . . in the near future…”
Nothing has changed, so the more things change, the more they stay the same — human nature, we get into our own comfort zones and then a major shake-up comes along. Accordingly, ‘in the near future’ is a very good and calculated guess.
#116 ballingsford — “How do you spell ‘money laundering’?”
C-A-R-N-E-Y, H-A-R-P-E-R and F-L-A-H-E-R-T-Y driving Canada into the ground while feeding us BS via their m$m. The withdrawal of money is deflation, while jacking up prices of essentials is inflation which leads to stagflation.
#140 Zenith — “Who cares that pets.com pulled in $80m and went bust 9 months later?”
One guess would be the investors that placed their hard-earned moolah there, much like Dome Petroleum, Enron, World.com and others.
Possibly you have money to burn. I don’t.
*
Who is ultimately responsible for all the uprisings in the ME?
We promise to tell the truth, the oily truth — BP.
Virginia Coins Ramping up production.
Silver Derivatives A big ‘what-if’ question.
Harperoda Showing his true colors.
#226 – Mikey: Do you know when the most tech stocks changed hands for the highest-ever prices? The days before the crash. Everyone sobered up one just two hours…isn’t that funny? One minute they’re buying rounds for strangers, the next they’re having their stomachs pumped. Weird!
So I’m glad you are being so bombarded with clients….hope you buy ’em a drink at closing.
PS – to call what you do your ‘duty’? Please…it’s more like your ‘doody’.
Lets take a look at the author of the Best City in the world article.
http://ca.linkedin.com/in/jeffleevansun
Why do you suddenly need to be “in the core” after living in Milton? You could lease a whole house in Milton now for what you are paying for 630 sf in the beehive by the RR tracks. — Garth
Garth the decision to live in the core is not really mine as I drive to Leslie and 16th everyday. The issue is more my spouse … she is a Registered Nurse, but she does not have her license.
She will be trying to transfer back to a downtown hospital and it would be beneficial to us if she is within walking distance so we don’t have to fork out 110 extra for a Metropass. Work aside, the fact that she doesn’t drive means that being in the core gives her alot mobility than the burbs.
Trying to teach her to drive but it’s been brutal, even with classes she is the opposite of a “natural”.
Greetings: # 216 [Utopia] Re: Libya
Don’t ever let yourself be deluded that this can’t happen here. We have already seen how Canadian authorities react to protesters [G20} etc. Watch closely the events in Winsconson. This blog today is captioned “Be Afraid” , could encompass much more than RE. Ottawa is already allowing high tech drones to keep an eye on us. Remember, power corrupts, Canada is no exception!!! It is NOT different here.
miley the realtor is a figment of his own imagination like DA the AWOL make-believe agent.
Victoria sales are down 50% YOY with a mere few days left. Looks like the beginning of the end is nigh. 2008 all over again but worse.
Milton was a mistake on our part, we lived downtown for 10 years before moving … we thought we could successfully transition to suburban life (she would get her license, working at a non unionized community hospital would be just as good as the unionized downtown one’s).
At the time I also worked in Milton so it made sense to move here, along with the idea that we would make money on the house (because housing prices always go up right?! or at least that’s what we believed when buying in Jan 2009).
As it turns out, after moving to Milton, I was laid off then got a new job far from Milton, and she found out quickly that community hospitals are a much tougher racket in terms of treatment, salary, training opportunities and benefits, compared with the unionized downtown one’s.
#226Recession-your misunderstanding is very common-for whatever reason, an investment in gold is often linked to guns by outside observers-I would assume that your need for firearms has not drastically increased during this gold bull run, but you still link the two because your authority figures have told you to.
#229 Mikey the Realtor on 02.21.11 at 7:30 pm
Be afraid? It should be more like ‘get in or be priced out forever’. Van is the new Monaco, sorry pups but reality does stink.
———————————————————
It doesn’t rain 24-7 in Monaco.
it’s eerie how similar Canada is to the States, lemmings (I used to love that game you had all these helpless animals just marching forward towards the cliff and you had to try your best to help them. Too bad they always ended up falling off the cliff). Game over
But it is different .., here .., and now.., the economic “crisis” and the U.S. meltdown occurred concurrently that is not the case here right now anyway. With prices just beginning to correct it would take another economic “crisis” with bailouts and headlines etc. to be the same as what transpired south of 49th. Garth predicted less of a correction 20% I recall, and a slow melt, hard to believe right now that if prices noticeably correct that there will not be another buying frenzy. The years of crazy prices I believe have created a “demand-bubble” of pent up would- be buyers, while some idiots continue to pay these insane prices there is a group of holdouts and I believe they are a majority, they wait it out on the sidelines.
English speaking Western hemisphere is a property owning democracy its why people came here it is why governments have historically promoted/pushed property ownership, it may be a failed experiment/policy but it continues and it is what people want.
at #214: BrianT, the operative words in your statement are “at this point.”. Sadly so, Canadians will understand what it means to be “busted” as you put it. Also, check your facts. Although many Americans have endured hard times, it is not the “average” case. You can’t just speak complete mistruths all the time without being called on it. As I said earlier, good luck! BTW, Canadians aren’t hardly making a dent in the real estate markets here. Your country is 1/10 the size of our’s. MAYBE 3% of your population has even considered purchasing here. That is being incredibly generous. That’s about 1.1MM people. That doesn’t make a dent in it. Your overly inflated sense of self-importance to our market is comical.
I have to do a photo shoot of a castle in Tuscany this weekend, from bungalows in G-town to Medieval castles in Tuscany how life has changed. I liked the 2 days of snow but that was enough for me for one winter thank you very much.
#225 Carlyle on 02.21.11 at 7:16 pm wrote:
I realize CityPlace has abit of a bad rap, but in terms of monthly affordability we couldn’t find anything better.
Doesn’t matter whether it’s the best possible deal or not. What counts is that it’s a huge improvement over the deal you had, owning in Milton. And there’s nothing to stop you from keeping a lookout for something better, even after you sign the lease.
So you’re doing great, man! Hope that your wife realizes that too.
When do I get to do a photo shoot of the bunker? Come on Garth the blog dogs all want to have a peek. I won’t charge you very much
http://www.facebook.com/album.php?aid=282983&id=506114230&l=4fad7f9a76
I do good work have a look.
Hey! No damn hippies on this blog. Shoo. — Garth
#182 Hovering on 02.21.11 at 4:35 pm
Garth,
can you eductate us on the Canadian laws/rules/rationale that allow foreigners to buy RE in Canada and not live here ?
I have been told that foreigners seeking “status” in Canada buy ppty here in order to “qualify”. But that they have no intention of living here. instead it is done to gain access to our health care system. urban myth perhaps ?
thxs
Well going from a good friend of mine, here is what he told me. He has a friend from Djibouti he couldnt get permanent status here. He bought an apartment for 120k in Quebec. I guess if you buy property they give residence easier and he lives in Djibouti. He claims taxes and income from the rent and he has flown back into Canada when he has needed surgery.
Garth, must say I have followed you for years – my colleague had me hooked on you about 7 years ago (on and off as you closed your site down). Wish you would have been PM. Do you do financial advise as well? (Lol other then your Blog) Do you think RE is going to have a high correction in Ottawa as well and if so your predicted 30%?
the military tools adapted to civilian model
PR “operatives” fake document”, as well as creating “fake insider personas
By Brad Friedman on 2/18/2011 8:04pm
As first reported by ThinkProgress when they originally broke the news of the Chamber Plot last week, key elements of the Team Themis plan included the use of both planting a “fake document”, as well as creating “fake insider personas” at both VelvetRevolution.us’ StopTheChamber.com campaign and the separate US Chamber Watch campaign run by Change to Win (CtW), a union-backed coalition also fighting against the Chamber’s positions and tactics.
Here’s a key portion from Team Themis’ 11/29/10 “Information Operations Recommendation” [PDF], created for the U.S. Chamber and H&W, explaining how they hoped to “discredit” and “embarrass” US Chamber Watch “and those associated with it” with “information operations” [emphasis added]:
“untraceable mass document leaking.”
http://wikileaks.ch/IMG/pdf/WikiLeaks_Response_v6.pdf
http://www.guardian.co.uk/technology/2011/feb/20/wikileaks-baer-tax-avoidance-hbgary?INTCMP=SRCH
–
Bankrupt? Not! “This means that any negative asset being held by the Fed is transferred to the US Treasury, i.e., to the American people, to keep the Fed’s balance sheet positive. This includes all the fraudulent mortgage-backed securities which Wall Street was forced to buy back from defrauded investors and which were dumped on the American taxpayer under the name “toxic assets.” wrh.com.
Ireland Pick on someone when they are down for convenient targets.
Globalists This seems accurate in order to topple a govt. Whether successful or not remains to be seen.
Puppets or Muppets. They are the same with different names — Bilderberg Group, NWO, the elite. etc.
To Serve And Protect (the criminals) “It’s so unusual that police actually stop a crime, that the Spokane WA police department felt that they needed to issue a special news release to announce it!”
Who’s Next? ” guess the Iran bashing isn’t working!” wrh.com.
Housing Nightmare What do parents tell their kids? Big banks will have lawsuits flying at them from every direction.
Herbicides Monsanto + Dow = Lady Luck and the devil.
Obama For a Nobel Peace Prize winner, he is sure headed in the opposite direction.
FEMA Camps? “Federal Preservation” my ASCII! If they are adding land, it is to modernize the facility for eventual use!” wrh.com.
Double Standards Do as I say, not as I do — Obama.
12:40 clip Predictions, prophecies . . . Johan Galtung. Not religious, realistic.
Checkmate China builds a nuke-powered carrier, the US must build one to counter it.
Open Borders Tomorrow (Tuesday) “According to Ha’Aretz, Iran’s training ships are already through the Suez canal, which means Israel has missed its chance to start a war to retake the Sinai and continue the starvation blockade of Gaza. The blockade is broken,. Gaza is free from those would would hold them slaves.” wrh.com. Also — North Korea nuke test.
WW3 is a combination of an economic war (already started — rich vs. middle and poor), then the military moves in.
Obushma Common Perimeter – NAU – SPP. Border-free in this sun-drenched police state of a continent! Plus Globalist Blitzkreig.
Carlyle: We actually did make a (lease) offer on a unit at Neo in CityPlace today.
you’ve done exactly the right thing
save money on gas 407 fees, close to work (you said Leslie and 16th, I don’t understand, do you mean that your wife works downtown and you work in Markham?)
#25645north you’ve done exactly the right thing
save money on gas 407 fees, close to work (you said Leslie and 16th, I don’t understand, do you mean that your wife works downtown and you work in Markham?)
—
I work in Markham and my wife actually works in a community hospital in Oakville but will transfer back to her old job at a downtown hospital when we move.
I calculated the mileage … From Milton I put on 200km per day onto the car (or 140km the days she is off) + 21 – 24 dollars 407 fees.
From Toronto my mileage will change to 60km/day …. it’s a big difference compared to what I’m doing right now.
——————
#250 Derek Doesn’t matter whether it’s the best possible deal or not. What counts is that it’s a huge improvement over the deal you had, owning in Milton.
—-
Yeah … I’m pretty thankful that I was able to ‘get out’ of the market in time with a decent enough profit to get out of debt. Never realized how trapped I felt in Milton until the weight of home ownership was lifted ….
I will surely vote for Harpie and team next time. I suddenly realize I actually like these bubbles inflating and inflating. Why ? I am a spectator. Nothing wrong with being and observer from a safety vantage point? No harm. Believe me, if we can keep this bubble going longer and longer it will generate lots of rewards, rewards for the spectator, not the speculator. hahahaha! Thanks Harpie/Carnie/Flahertie! Yeah ! Bubble!
>#255 Nostradamus Le Mad Vlad on 02.21.11 at 9:40 pm
–
>Bankrupt? Not! “This means that any negative asset
>being held by the Fed is transferred to the US
>Treasury, i.e., to the American people, to keep the
>Fed’s balance sheet positive. This includes all the
>fraudulent mortgage-backed securities which Wall
>Street was forced to buy back from defrauded
>investors and which were dumped on the American
>taxpayer under the name “toxic assets.” wrh.com.
I thought all these toxic assets were already sold and eating/digested by foreign countries such as Iceland,Germany,Norway,Ireland,China,Canada,Britain etc. Meaning they the yanks, sold crafted some shits and sold it for cash. So they got to keep the cash in form of enhanced economic activies and free houses(realty). Those foreign countries got to keep worthless papers (those mortagetized securities). Alan Greenspan will go down as a financial genius in history books.
>#251 Mike Turner on 02.21.11 at 9:17 pm
>When do I get to do a photo shoot of the bunker?
>Come on Garth the blog dogs all want to have a peek.
>I won’t charge you very much
I thought Garth’s bunker is casa loma in downtown toronto? You can go have photoshoot anytime.
I don’t think anyone who has traveled anywhere worth seeing would agree that Vancouver is fairly priced or even close to the ‘best place on earth’. Its a fugly city in a beautiful setting. The best thing about Vancouver is getting out of it to see the surroundings. The people are generally phoney and try WAY too hard. Too many gangsta wanna-bes and dirty money. Its so illegitimate.
Why anyone would waste their life struggling to survive in that shithole is beyond me. Its so not worth it. The hype and hubris is so overboard too. The city is just depressing. People are angry and mean and barely keeping above water – its palpable. No wonder they constantly have to advertise and hype the place. Once people come to their senses it will be a collective ‘oh shit’ moment and the rest of the world will look on as the great exodus begins.
I live in Regina – another shithole – they hype it here too but there is real growth here in terms of resource development. I’m totally planning to make my money and get the hell out asap. Out of this country, that is. Canaduh is circling the drain. The immigrants can have it. This place sucks.
What do you think? The realturd star in this video (Sunny Lee), can pull off another one of those reality TV idol show or not? Remember William Hung a few years back? How about we have Sunny Lee going on American Idol and do his usual pitch of selling Vancouver Real Estate? Imagine the agasted Amer Idol judge trying to… shut him up with their RE nightmare experience. Sunny Lee – “Yeah but its different here in Vancouver, best place in the world to live, prices always going up”. LOL So then Sunny Lee will become a famous celebrity.
…so the spenders exit (mr. ceo) and enter the outsourced Arrears Managers with a nice 7 year contract …life is a carousel
bank of scotland
Management Certus
How BoSi paid a heavy price for its Irish property gambles
20 February 2011
http://www.sbpost.ie/news/ireland/how-bosi-paid-a-heavy-price-for-its-irish-property-gambles-54633.html
Cetrus, a new company with a seven-year contract to manage BoSi’s outstanding loans.
Established in 2010, Certus offers a broad range of customer and portfolio management services for banking organisations across Ireland
Did anyone else notice that most of the buyers sitting down at the table in this video were asians? It is really truth, money are just flying over to Canada from china!
81 Pat on 02.21.11 at 3:21 am
off topic
somebody asked a couple days ago where the tomatoes in California come from. I counted in local Trader Joe’s today 8 kinds from Mexico (2 organic) and 2 from the US
thanks.
Gosh! She makes me hungry, you know that pretty girl in the video at time 0:35 second. Yummy!
@223 tkid:
“reliable TTC service”…
BWWAAAAAHHHHAAAAHHHHAAAAHHHHAAAAAA!!!
That is the best joke I’ve ever heard!!! LMAO
(using TTC for 5 years now and am familiar with its service reliability)
>#267 MikeT on 02.21.11 at 10:58 pm
>(using TTC for 5 years now and am familiar with its
>service reliability)
Put it this way. Price of gas is about to shoot if situation in Libya is any indication. Gas companies look for any reason/excuses to jack the rates. I guess I better buy up some TTC tokens next week just in case I can no longer afford gas.
David. #211. From the Lowermainland, BC
I second your comments. To the American. Go man Go! I agree with you both re Vancouver and the smugness here in the Lowermainland is revolting.
At #269: Thanks for the comments. I usually find that smugness is merely a manifestation of insecurity and longing to be like another due to a lack of confidence and an inferiority complex. So, I actually find it flattering when I here the smug attitude come through.
#261 @Prairie Gal
“I’m totally planning to make my money and get the hell out asap. Out of this country, that is. Canaduh is circling the drain. The immigrants can have it. This place sucks.”
I hear you — we have never had so many move here before, intent on simply pillaging the system. Sadly, the Canadian experiment may have peaked… about 10 years ago.. Van has become unliveable. There are many places here where you are not wanted if you are not overseas Chinese…….No good head office companies left here, not many really good, high paying jobs… and as you allude to, all the stuck up attitude from the leased beemer driving, over leverged condo dwellers…. many people have already bailed, many will continue to bail on this city…. it most definitely is NOT a place to raise kids…
So prairie gal, question for you, where you headed? Just curious ;-)
it’s their money, you think you are smarter
Speaking of F*E*A*R*
We have this Guy In Australia to KEEP the FEAR alive!!
http://nfbpsh.blogspot.com/2011/02/who-believes-this-garbage.html
But he pulls the crowds in? … Go Figure?
@269: April, RIGHT ON!
Glad I liquidated my stock related assets in 2007. Gold and silver have rocketed since then and I will be able to pay off my fixed interest rate investments with inflated commodity price/investments. Hi Ho Silver!!!!!
#261 Angry Gal (formerly Prairie Gal)
“I live in Regina – another shithole – they hype it here too but there is real growth here in terms of resource development. I’m totally planning to make my money and get the hell out asap. Out of this country, that is. Canaduh is circling the drain. The immigrants can have it. This place sucks”.
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I highly recommend Africa just for the peace of mind Prairie Gal. What is so fascinating about it is how much time slows down once you get there.
There is less of everything that tends to consume us spiritually and mentally over here. Strip away all the hype and the technology and the demands placed on us every single day and breathe easy for a change.
I often relate to people how greetings there are so different. I mean, it takes several minutes of handshakes and hellos before a conversation even starts.
At first it is maddening because over here we are all just so used to a quick hello laced with the attitude of the moment. Then we need to rush get down to business, no time man, no time for anything like chit-chat. Not so there where socializing and living in the moment is much more valued. Business can wait.
Ethiopia where I lived for quite some time was absolutely fantastic. You live well on 500 dollars a month and there are few worries that eat away at you everyday.
No phones ringing at all hours, televisions are scarce, few computers or faxes to interrupt your thinking and plenty of time to engage with people every day. Take away most of the technology and step back in time for awhile.
Your spirit definately gets a much needed rest.
PS: I like Regina. I used to live there. The place has gone crazy the last few years though. Does it seem to be getting a bit dangerous lately too?
MikeT, *shrugs*, but Carlyle is searching in far too small an area.
Wow, if that video doesn’t remind me of people lining up to buy gold at $800 per ounce (more like $2300 in today’s dollars) 31 years ago then I don’t know what does. Deja vu!