Mea culpa

In Ontario the government will give first-time homebuyers a fat rebate on the land transfer tax the rest of us have to pay. Nationally, the feds will throw virgins a $750 tax credit to offset closing costs. In BC new buyers can get their entire land transfer bill wiped out by the province. Across the country, two property virgins can raid their RRSPs for $50,000 for a down payment, and get 15 years to repay. And everywhere, banks will lend boodles to young buyers with more hormones than money, thanks to CMHC shifting the risk from the lender to the taxpayer.

In short, virginity pays. Especially when you lose it.

But, apparently, so does poverty. At least n Vancouver. And that observation led me to write a piece recently on how one of the country’s biggest credit unions, Vancity, has a homebuying program aimed at people too poor to even pay market rent for an apartment.

Called ‘Springboard’ it gives folks with low incomes, no assets and no savings 100% financing to grab a piece of real estate. The loan comes in two parts – a 10-year, interest-free term loan, and a 10-year mortgage with interest-only payments. As such, not only does it skirt federal intentions to make mortgage borrowing tighter (lest we turn into Subprime North), but it might risk preying on those who are in social housing for a reason. After all, owning a house is not a right. Especially in delusional BC.

“A number of us here at Vancity read your blog post titled Different on March 17th with interest,” says spokesgal Amanda Brittain. “We feel that you may have been misinformed.”

Said I: be my guest, and correct me.

Said she: “One of the keys we want to get across is that the Springboard Home Ownership Program is not for everyone. Vancity is quite well known for its community building activities and the last thing we want to do is to get people into a borrowing situation that is beyond their ability to service that debt as that does not benefit the individual or the community.

“Also, I noticed that you used an interest rate of 6.15% in your blog to demonstrate how much someone might pay in the Springboard program. I’m assuming that you got that rate off of the info page on our website. I just wanted to point out that the rate of 6.15% is just an example used for demonstration purposes on the website. The actual rate, while higher than a conventional mortgage (this fact is clear on the website), is based on current rates.”

I further offered Vancity space on this site for a complete rebuttal of my post, which you can read in all its allegedly misinformed and cavalierly cowboy original huffy glory – here.

Here’s the official response. I should mention I am running this not because I am being sued but because Amanda is hot.

Response to the Greater Fool Blog

The Springboard Home Ownership Program is designed for very specific individuals who live in social housing.  These folks:
*         Pay their rent on time
*         Have verifiable income
*         Must complete a one-day homeownership readiness seminar.

The goal of the program is to move qualified people – who are often called the working poor – out of social housing. This has the joint benefit of letting the working poor invest in their own homes and freeing up subsidized housing units for people who need them (the current waiting list for social housing in BC is eight years).

The 100% financing offered in the Springboard program is based on what the individual family pays for rent. All housing payments are kept within what they currently pay. There are many families who can pay their rent and expenses within their current pay cheques but are unable to save for a down payment on a home. The Springboard program helps fill this gap.

Since the program began in 2006, there have been 20 mortgages funded through this program and only one foreclosure (due to a marriage breakdown). One of the key reasons for this success rate is because the payments are kept to within the amounts the families currently pay for rent.

In addition to the 20 funded mortgages, 220 people have received home readiness financial literacy training which leads to a stronger, more educated community.

Meanwhile it might be a cool idea for Vancity to include the following in its one-day homeownership course, because anyone without any money contemplating a house purchase at this time needs a refresher on how housing ate America.

  • Resale house sales in the US have just crashed again – down a stunning 9.6%
  • Four in ten of those sales were ‘distressed’ properties
  • House prices have just dropped the most in an entire year, off another 5%
  • Foreclosures are expected to climb 20% this year
  • One in four US families with a mortgage is underwater

So why are Canadian governments (and banks) desperate to entice so many of us – especially the dwindling virgins – into an asset that can clearly be so dangerous?

Because it’s easy. By making credit cheap and greasing real estate with incentives, the hope is young couples will deep throat enough debt to stimulate the economy, so bankrupt governments need not. In a country where housing accounts for 20% of the entire gross domestic product, what keeps them awake at night is the thought Canadians might actually learn something from the American experience.

That, and guys like me.

BTW, ask yourself: if real estate is sound, why are governments funding vids like this? Nah, didn’t think so.


#1 mab on 03.21.11 at 9:55 pm

great advice from
There are many reasons to not buy a home: [By the way, I also put this in the category of Advice I want to tell my daughters, including my other article: 10 reasons not to send your kids to college.]
A) Cash Gone. You have to write a big fat check for a downpayment. “But its an investment,” you might say to me. Historically this isn’t true. Housing returned 0.4% per year from from 1890 to 2004. And that’s just housing prices. It forgets all the other stuff I’m going to mention below. Suffice to say, when you write that check, you’re never going to see that money again. Because even when you sell the house later you’re just going to take that money and put it into another downpayment. So if you buy a $400,000 home, just say goodbye to $100,000 that you worked hard for. You can put a little sign on the front lawn: “$100,000 R.I.P.”
B) Closing costs. I forget what they were the last two times I bought a house. But it was about another 2-3% out the window. Lawyers, title insurance, moving costs, antidepressant medicine. It adds up. 2-3%.
C) Maintenance. No matter what, you’re going to fix things. Lots of things. In the lifespan of your house, everything is going to break. Thrice. Get down on your hands and knees and fix it! And then open up your checkbook again. Spend some more money. I rent. My dishwasher doesn’t work. I call the landlord and he fixes it. Or I buy a new one and deduct it from my rent. And some guy from Sears comes and installs it. I do nothing. The Sears repairman and my landlord work for me.
D) Taxes. There’s this myth that you can deduct mortgage payment interest from your taxes. Whatever. That’s a microscopic dot on your tax returns. Whats worse is the taxes you pay. So your kids can get a great education. Whatever.
E) You’re trapped. Lets spell out very clearly why the myth of homeownership became religion in the United States. Its because corporations didn’t want their employees to have many job choices. So they encouraged them to own homes. So they can’t move away and get new jobs. Job salaries is a function of supply and demand. If you can’t move, then your supply of jobs is low. You can’t argue the reverse, since new adults are always competing with you.
F) Ugly. Saying “my house is an investment” forgets the fact that a house has all the qualities of the ugliest type of investment:
Illiquidity. You can’t cash out whenever you want.
High leverage. You have to borrow a lot of money in most cases.
No diversification. For most people, a house is by far the largest part of their portfolio and greatly exceeds the 10% of net worth that any other investment should be.

#2 Cscl on 03.21.11 at 10:01 pm

I have three essays due this week and my finals are next week.
I’m on my way to getting my Bcomm, you’re always the highlight of my day. So many people tell me I’m crazy because I said house prices have to drop once Interest rates go up. Then I found your blog.

#3 walter safety on 03.21.11 at 10:06 pm

I recognize that from SNL.

#4 Matthew Cote on 03.21.11 at 10:09 pm


Sounds like a for profit-firm masquerading as an NGO.

We like to help people…and get rich.

Canada: Getting more American by the minute.

Have a great night,

#5 The Econoom on 03.21.11 at 10:10 pm

I almost regret this, as I’d never want to inflict an influx of doomers and gold bugs on this man’s blog, but for the sake of adding to the discussion I will just leave this here:

#6 bsallergy on 03.21.11 at 10:12 pm

Splat! Damn windshield! Do people not realize that homeownership is the new road to poverty. My late father did well with a 25 year fixed rate mortgage and inflation and this little bubble the $12k house he bought and that I inherited is worth north of $240 in bubblicious Winnipeg. Wouldn’t own a house if it wasn’t free. Can’t understand the idiots paying what they are for shacks around here.

For a perspective on why home ownership became the ne plus ultra.

#7 Jeremiah on 03.21.11 at 10:13 pm


#8 Bailing in BC on 03.21.11 at 10:14 pm


It would seem to me that one in twenty is a horrendous foreclosure rate. Vancity thinks of this as success?

#9 dd on 03.21.11 at 10:18 pm

Great review.

#10 Makes Cents on 03.21.11 at 10:20 pm

Could not open link to Vancity’s rebuttal. Even though I haven’t been able to read it yet, something tells me Amanda must be VERY hot.

#11 JJ on 03.21.11 at 10:24 pm


#12 fiendish Thingy on 03.21.11 at 10:26 pm

So, does that mean that after relocating to BC (hopefully this summer), and waiting a few years for prices to melt to a reasonably sane level, I could buy a house (as a first time Canadian home buyer, even though I’ve owned homes in the States) and still get a rebate on the land transfer tax? Who’d have thought I could regain my virginity just by crossing the border?

Anyone care to venture a guess if these incentives will stay in place as the RE market declines?

Good on you Garth for giving Vancity a fair chance to explain themselves (give ’em enough rope…)

#13 Guy_in_Regina on 03.21.11 at 10:30 pm

Yeah Great. What do these people do when the furnace caves, or the roof needs new shingles, or the basement floods and sprouts black mould? People who can’t afford to buy homes can’t afford to maintain them. Repairs go undone and soon they are living in condemnable conditions.

Oh wait, I see they have to attend a one-day seminar…. nevermind then.. it’s all good.

#14 604genX on 03.21.11 at 10:33 pm

While I have no sympathy for NINJA loans, I must admit Vancity has been a great, socially responsible organization in this city. And when the crap hits the fan for those low income borrowers I’m pretty sure Vancity will do the honorable thing and let payments be adjusted etc. Now governance of Vancity is another matter, but the organization is generally a leader and managed by people who generally give-a-damn about their members (like me). And no, I’m not an employee there but when the Asset-Backed Commercial Paper thing blew up a few years ago Vancity took a leading role to sort out the mess and take care of its investors. I’ll always stand up to support them as a result.

#15 T.O. Bubble Boy on 03.21.11 at 10:34 pm

Back to Preferred Shares for a second…

Garth and/or any blog dogs – any thoughts on the buybacks announced by National Bank? (offering to buy back Series 21, 24, and 26)

If you take the “N” series (21) as an example, National Bank is offering to buy these back at $26.81 on April 11th. At the time of the offer in February, this was a 2-3% premium… but now, the “N” shares trade at $27.

So, unless I’m missing something, I can’t see any reason that someone would go for their offer vs. simply selling today at the closing price of $27.00?

#16 Not Fooled By Property Spruikers Hype on 03.21.11 at 10:36 pm

Home ownership continues to get further out of the reach of the average family / couple

Just look at here in Australia

1)1975 only 24% of average income was needed to service a typical Australian mortgage. This was with a prevailing interest rate of 10.38%,

2)By 1985 it was still steady at 24% of average income needed to service despite interest rates soaring to 13.5%,

3)By 1990 Interest rates went to 16% plus but you still only had to use 34% of average income to service a mortgage.

4)By 1995 you still only needed to use 29% of average income to service a mortgage even though interest rates were up to 10.5%,

5) By 2005 it had soared to 40% yet Interest Rates were just 7.5%,

6)Now in 2010 it takes a staggering 50% of average income to service a typical Australian mortgage despite interest rates being only 7.79%!!

Despite this REALTORS continue to say Australian property prices will double every 7-10 years? But they dont explain how will anyone pay for it?

Remember historically interest rates have averaged 10.11% over the past 30 years.

Just 3 years ago in 2008 it was 9.5%!!

A 7% interest rate is equal to paying a 22.5% rate in 1990 in comparative terms.

Think about that when house hunting. Property is no longer affordable & will fall shortly!

#17 honestweights on 03.21.11 at 10:36 pm

No matter what Canadian leadership tells me, I’ll still believe that debt is not a good thing. It’s like they’re telling Canadians to willingly enslave themselves. Come on Canada – if your dream is to own a house, your dream is too small.

#18 Wasted Opportunities on 03.21.11 at 10:39 pm

I thought real estate spruiking in Australia was shameless, but you folks have government officials appearing directly in the videos! Who will win the race to the bottom in housing madness of the resource economies?

#19 Timing is Everything on 03.21.11 at 10:41 pm

The rules can and will be changed at the stroke of a pen.
Get used to it. The BIG ONE will be tax deductible mortgages, of some sort or another. A 9.0 shaker on the RE/Tax scale. Nothing would surprise me at this point.

Garth? What do your spidy senses tell you? Ha!

Right after we all get ponies. — Garth

#20 TaxHaven on 03.21.11 at 10:43 pm

The REAL objective is to issue debt, because with so many government guarantees it’s a no-brainer.

This all ignores the fact that there is something unseemly about condemning people to a lifetime of paying, paying, paying a mortgage taken on at historical lows.

Then they die. Without “owning” the house.

#21 Debtisforever on 03.21.11 at 10:48 pm

mab #1:
“Ugly. Saying “my house is an investment” forgets the fact that a house has all the qualities of the ugliest type of investment.”

And in Vancouver, you can add “My house is ugly”. All I have to do is look at MLS and see what garbage I can buy for $1million bucks confirms this. Those houses are just plain ugly! Some I wouldn’t want to live in for FREE much less pay a million bucks of the government’s money for!

#22 Enlightened on 03.21.11 at 10:50 pm

This is sick!
I can’t believe the collusion between our elected officials and the r/e corporations.
Watching this stuff and knowing what has happened to my old home town of Vancouver really makes me want to opt out of society. Bloody hell……… I had to pretty much provide a blood test,pap smear and an oath of fealty to VanCity when I got my first mortgage – unconscionable to say the least..arghhhh
I logged in to thank everyone for their comments and feedback about my request for info but now I am just friggin disturbed…….where’s the liquor?

#23 Sasquatch on 03.21.11 at 10:57 pm

If you put on those nifty shades that turn everything black & white, revealing subliminal messages, you can see the puppeteer with a hand up each ones rear end.

Didn’t that Obama guy give like 4 or 8 grand to each property virgin to buy a house. Oh yeah, that’s right and then housing sales died after the deal was expired and housing dropped overnight by 4 or 8 grand.

Great to know parts of Canada are trying to be inovative before we all jump from the pan, to the fire.

Or have we already jumped into the fire?

#24 xindai shan on 03.21.11 at 10:58 pm

Excellent article on the TSX, the Canadian economy and housing market. Many of the housing bubble themes have long been covered by Garth.

This an excellent MSM article, presenting multiple points of view.

#25 Cellar Dwellar on 03.21.11 at 11:01 pm

Garth, Whats up with the “Amanda is Hot” quip and then no photo link?
Your a baaaad man.

Close your eyes. Go to your happy place. She’s there. — Garth

#26 Bruised on 03.21.11 at 11:03 pm

CTV want’s your questions for F…

“Do you have a question for Finance Minister Jim Flaherty about his budget? He’ll be on the show Wednesday! tweet us @ctvcanadaam”

#27 Timing is Everything on 03.21.11 at 11:07 pm

Right after we all get ponies. — Garth

I want a blue one…with a red mane and tail. It all sounds so nice.

So the The Smith Manoeuvre is about it?

Don’t go there. — Garth

#28 Morry on 03.21.11 at 11:08 pm

@mab #1

Makes no sense at all. My experience and those of all my relatives and my friends would say this to you: you are full of it.

#29 Mikey the Realtor on 03.21.11 at 11:08 pm

As mentioned by moi many times, government will keep housing infllated at all cost. There would have to be another 08 for a RE pullback, and according to the bearded fellow who runs this blog, that aint happening.

All you house horny fence sitters, its time to jump off and into the market or be priced out forever. DA and I just raised our commish to 6% due to the market being so strong.

#30 Ex-Cowtown on 03.21.11 at 11:09 pm

Don’t need an interest rate hike to kill the RE market. Rising food and crude oil costs will do that quite nicely.

And speaking of food and crude oil, have you seen the cost of Cheez Whiz? It’s a double whammy! All in one cheese-like food substance!

#31 NotAGreaterFool on 03.21.11 at 11:10 pm

Noticed Macleans magazine has an article on the CMHC as did today’s Globe and Mail. Glad to see it, as the CMHC has served as an enabler for the current real estate market place. This is a topic that has not got enough coverage. Wonder if any changes are coming?

#32 Mister Obvious on 03.21.11 at 11:11 pm

Just got this week’s MacLeans in the mail. A three page spread beginning on page 58: “A Mortage Monster” describes at some length the murky view of the CMHC’s books. Worth noting is this quote by Pierre Serre, vice-president of insurance products and business development…

I’m not exactly sure what low or poor credit is but I want to make clear that our mandate is not to get people into home ownership, our mandate is to provide the housing of choice. The last thing we want, as a government insurer, is to get people in a position where they can’t manage their debt”

We shall mark these words.

#33 dd on 03.21.11 at 11:16 pm

#22 Enlightened
…This is sick!,I can’t believe the collusion between our elected officials and the r/e corporations….

It has been going on since Christ was a carpenter.

#34 The InvestorsFriend (Shawn Allen) on 03.21.11 at 11:32 pm

If VanCity credit union has only approved 20 of these Spring Board mortgages since 2006 then I would suggest this is just a little loss leader that they use as Public Relations. They pretend to lend to poor people but really don’t. Unless you mean 5 per year.

Well, pretending to lend to poor people and then not doing it is just dispicable. Especially if you do just a few and then gain brownie points with the leftist media. But it’s a heck of a lot smarter than actually lending to lots of poor people.

Sounds like VanCity is despicable but at least not stupid. Good PR guys.

#35 Thirty something on 03.21.11 at 11:33 pm

In 2000 I couldn’t get Vancity to take over my 7k student loan from RBC. The marketplace is so poisoned I guess they feel that they have to play dirty to compete. Sad, very sad.

#36 Patz on 03.21.11 at 11:36 pm

Hey Garth if you’d looked more like Sophia you might still be Minister of Revenue, but then you’d have to get a … well nevermind.

Even though she’s hot, no not Dorothy, that is one creepy vid. I kept seeing images of spiders and webs.

#37 Spazmogen on 03.21.11 at 11:36 pm

#27 Timing is Everything:

Garth seems to be against the SM. I have no idea why. Perhaps he will explain further another time. Ironically, he mentions a Tax Deductible Mortgage in Money Road, but is against the SM.

I’ve been doing it since March 2007 and it’s working for me. I wrote off $1600.00 in interest in 2010.

You need balls of steel to ride this puppy out.

An oil/energy etf, preferred shares and a small cap etf are working for me.

#38 randman on 03.21.11 at 11:36 pm

#22 Enlightened
…This is sick!,I can’t believe the collusion between our elected officials and the r/e corporations….”

It’s called Fascism!!!

#39 Vlastibor on 03.21.11 at 11:41 pm

Sorry to break it to you chumps, but chicks don’t dig renters. They want the stability and social status that comes with homeownership. When you’re lying on your deathbed, do you think you’ll regret that you bought a house in 2011 that temporarily lost a small percentage of its value before it rebounded? Or do you think you’ll regret instead that you never bought a house and therefore never met a girl (cause chicks don’t dig renters), never had any kids, never enjoyed life, rented a smelly flea-infested basement apartment, and are lying on your deathbed all alone with no family and no one who cares that you’re about to kick the bucket. There are some things in life more important than net worth. I have a HUGE mortgage (the max the bank would give me), neither of my cars (bimmer and benz) are even close to paid off, my RRSP and TFSA are far from maxed out, but guess what, I sleep with a smoking hot babe every night who lets me do things to her you wouldn’t believe. How some basement-renting loser with no house, no girlfriend/wife, and a junky old car could possibly think he’s better off than me just because he has no debt is baffling. I guess all that musty basement air makes people lose their sanity.

#40 TS on 03.21.11 at 11:41 pm

I should mention I am running this not because I am being sued but because Amanda is hot.

Garth you could at least linked her picture.

#41 45north on 03.21.11 at 11:43 pm

Sophia Aggelonitis:

I remember the summer of 67 tiling a floor at Mary Miles Meat Plant near Hamilton. We worked hard. I remember a German guy Tony, short but strong – you didn’t mess with Tony.

You know Sophia, I think you’re trying too hard to be nice. I mean after all you are just informing people about the tax system and as Minister of Revenue that is part of your job. The problem Sophia, is that the housing market is no longer the basis for prosperity. The people buying houses this year thinking that the “house” will be the basis for their prosperity are going to be disappointed. Very disappointed.

#42 Nostradamus Le Mad Vlad on 03.21.11 at 11:45 pm

“Mea culpa. In short, virginity pays. Especially when you lose it.” — Best leave that alone!

First para. pretty much tells a whole story in itself — all levels of govt. are screwed, so they will tighten the noose around our necks by increasing taxation of all sorts to greater heights, thus strangling the 5/35ers and other sheeples with millstones around them, toss them into deep rivers and cover the crime up after.
4:08 clip 4,000 ton fully loaded frigate next to Libya. Except it’s Chinese.

Spot the connection between these two reports. Add in fresh water and Bingo Bob’s Yer Uncle!

Someone tried to take out Merkel, while Russia and China have both chosen to stand by Gadaafi. Whether anyone likes it or not, this is Iraq #2, illegal and unjustified.

10:05 clip 1929’s Wall Street schmozzle.

Economies Slow Not surprising, as most of Asia is wiping the floor with the west, plus high food costs and oil.

Japan Not over by a long shot, and Depopulation via nuke meltdown.

Cyclical Events, not singular ones. The Cascadia ‘Quake, off the coast of Oregon in the 1700s is next on the list, possibly from Alaska through San Diego.

Manipulation Some like this site, others don’t but it’s not bad. Gives an alternate POV.

China Leading the way with safer thorium built nuke plants, plus The Great God Thor — Different.

Job Losses — Comparison between GD1 and now.

#43 S.B. on 03.21.11 at 11:46 pm

Title of Garth’s next book: [email protected]

(A gripping mystery-horror tale about a couple who was offered both a 1.5% GIC and a 4% fixed mortgage.
Who dunnit?)

#44 Tim on 03.21.11 at 11:47 pm

Harper Found in Contempt of Parliament

Let’s hope Iggy has the guts to call an election and get rid of this clown who has no respect for democracy

#45 Crash on 03.21.11 at 11:48 pm

Something I overheard recently: “People with big mortgages make the best employees.” Think about that.

#46 David on 03.21.11 at 11:59 pm

The truth wil set you free! CMHC is the exact same political, irresponsible, sunshine-and-bubble gum lie that Fannie Mae and Freddie Mac were.

And anyone who had to wait until reading today’s G&M, or Garth Turner’s blog (no offense, G) told them so is exactly why these empty suits kept fiddling while Rome burned.

But we’ve got really great free heatlh care, right? We’re still better than them, right?!

#47 Soylent Green is People on 03.22.11 at 12:00 am

This picture is giving me deja vu. Are you recycling pictures, or where have I seen this pic before.

I read somewhere nuns and priests invented their nunneries and monestaries so they as secretly gay people could have a relaxing place to hang out with each other, and they also made up some funny reason why they couldn’t get married to the opposite sex and make babies.


Committee report finds Harper’s Government in contempt, twice.

No government has ever been cited for contempt before.–committee-report-finds-government-in-contempt?bn=1

#48 BC Bring Cash on 03.22.11 at 12:02 am

Politics makes strange bed fellow’s for sure. How ever this is just more of the same. The Corporate agenda running main street politics is so obvious in OREA Dorothy Mason and Ont. Minister of Revenue Sophia Aggelonitis swapping spit in public is more of the same. For them to be on the same page on flogging over valued RE is quite something. Lets prey on more unsuspecting family’s. Lets put into debt an entire generation and make sure their situation is hopeless of ever repaying their debts. Lets make sure that their children will never inherit nothing but debt. Oh and why not make sure their grand children will inherit nothing as well. This is how the Elite are destroying what ever is remaining of the middle class. Unfortunately they are going to win.

#49 NorthOf49 on 03.22.11 at 12:04 am

Could they get any more repetitive in that propaganda video “….for the fourteenth time, you pay no HST on a resale home…”. Talk about desperation. Sophie is the MPP for my riding, I should pop by her office and tell her I was contemplating buying a home but her confusing video made me rethink it. Sure it would drive her nuts!

#50 Mr. Reality on 03.22.11 at 12:07 am

A little off topic but the next person that posts their post number is will get a cyber bitch slap from Mr. R.

I’m number 345, 687!


Hide the Decline

#51 Joycer on 03.22.11 at 12:10 am

So instead if paying rent and being able to move or walk away from any problems, they now pay the same amount as interest to the bank (isn’t that just renting it from VanCity instead?) and they are 100% liable for all of the debt they have assumed, taxes, maintenance, and would loose out on realtor and legal fees if they wanted to sell. Sounds like you had it right the first time Garth.

#52 Wilde_at_heart on 03.22.11 at 12:13 am

@Mikey: there is no such thing as ‘being priced out forever’. Think about it.

Secondly, the government in the late 80s suddenly hiked rates way higher than inflation and plenty of Canadians lost their shirts after buying at the top. What on Earth makes you think it won’t happen again? I’m guessing you’re just too young to remember.

As for the article: aren’t people in social housing because they can’t even afford market value rents? Yeah, it’s easy to pay on time when you’re paying what the rest of us paid in the 80s but I’m sure that one day seminar will teach them everything they need to know…

#53 Utopia on 03.22.11 at 12:19 am

Gee, what part of “Zero Down” lending in the city with the most inflated homes prices in all of North America did we not understand here?

Given the average length of tenure of the typical Canadian home owner I wonder if there would be many regrets amongst this group if real estate slipped by even a minor 10 percentage points in a correction?

The word trapped comes to mind as these lucky working-poor stiffs come to realize they won’t be going anywhere else for quite some time. We are pretty sure too that they won’t have the resources to cover the difference between the outstanding value and market prices following a correction.

I loved the following bit from the Vancity resonse:

“The goal of the program is to move qualified people – who are often called the working poor – out of social housing. This has the joint benefit of letting the working poor invest in their own homes and freeing up subsidized housing units for people who need them (the current waiting list for social housing in BC is eight years)””

Freeing up subsidized housing….? Is Vancity now an agency of the Provincial Government????

#54 OttawaMike on 03.22.11 at 12:20 am

A couple of things:
Heard from my mortgage broker pal regarding the new shorter am rules enacted as of March 18th. Divorces and other refi’s are now going on the market since the new rules prevent some from extracting over 80% of the property’s value. More inventory

#55 Devore on 03.22.11 at 12:22 am

Since the program began in 2006, there have been 20 mortgages funded through this program and only one foreclosure (due to a marriage breakdown).

It’s always those who have to sell, isn’t it? But that was just a fluke. I’m sure they’ll be back to buying houses in no time after that real life schooling.

#56 OttawaMike on 03.22.11 at 12:23 am

A couple of things:
Heard from my mortgage broker pal regarding the new shorter am rules enacted as of March 18th. Divorces and other refi’s are now going on the market since the new rules prevent some from extracting over 80% of the property’s value. More inventory coming down the pipeline.

Rumour has it that 400 million dollars will be shoveled into the Eco energy program revival with tomorrow’s budget. That’s good news for contractors and home owners.

#57 Love this Blog on 03.22.11 at 12:23 am

Guys, this is off-topic, but I need a response quickly. I am renting a house in Saskatchewan, no written lease agreement. The Landlady called tonight and said they are having a couple look at the house tomorrow, to possibly purchase!! I realize they are supposed to give me more notice to enter, etc. She told me not to worry, that “I would get my full 30 days notice” Since I live in a reasonably small town, rental units are NOT easy to come by.

Here is my main question: Can anyone tell me how much notice they have to LEGALLY give me, and provide a link?? I’m not interested in getting into a battle with them about moving out, but want everyday’s notice I’m entitled to to find a new place.

Thanks for any help you can provide!!

#58 HouseBuster on 03.22.11 at 12:24 am

This guy has been reading Garth’s blog:,XHB,ITB,EQR,KBH,MTH,HXM

#59 Eddie on 03.22.11 at 12:29 am

What should I do? I can buy half of this in Richmond BC:

Or for a little less get this place in West Palm Beach:

Who wants to live on a golf course in Florida anyways?

#60 OttawaMike on 03.22.11 at 12:30 am

Here’s an Ontario low income home buyer down payment grant:

#61 Lance on 03.22.11 at 12:39 am

The Springboard To Bankruptcy Program

#62 Love this Blog on 03.22.11 at 12:39 am

Can anyone provide me a link regarding how much notice a lnadlord has to give a tenant in Saskatchewan if they decide to list the house for sale??


#63 Love this Blog on 03.22.11 at 12:39 am

Sorry for the double post, the first one hadn’t shown up.

#64 Tony on 03.22.11 at 12:44 am

#15 T.O. Bubble Boy

This tells you the bank thinks interest rates will fall in the future.

#65 Crazy on 03.22.11 at 1:00 am

bsallergy said:

Splat! Damn windshield! Do people not realize that homeownership is the new road to poverty. My late father did well with a 25 year fixed rate mortgage and inflation and this little bubble the $12k house he bought and that I inherited is worth north of $240 in bubblicious Winnipeg. Wouldn’t own a house if it wasn’t free. Can’t understand the idiots paying what they are for shacks around here.

Easy for you to say. Nice that you inherited your father’s work. Now imagine he had rented… You would have NOTHING.

#66 Morry on 03.22.11 at 1:01 am

DD: If you have a hammer pound nails.

PS Garth not only is Amanda hot, so is VanCity! They both rock.

Just closed on a gvrd area town home. VanCity smoothing the way.

#67 Utopia on 03.22.11 at 1:04 am

#13 Guy_in_Regina

“Yeah Great. What do these people do when the furnace caves, or the roof needs new shingles, or the basement floods and sprouts black mould? People who can’t afford to buy homes can’t afford to maintain them. Repairs go undone and soon they are living in condemnable conditions”

You said it Regina Guy. The “what if’s” would boggle if we did not already have guidance from a similar country close to Canada (name not mentioned).

Down there the answers and solutions were varied. These included taking on second jobs if they were available, selling off family heirlooms and the second car, cancelling extra-curriculars for the kids, putting the pet down instead of trying to save “fluffy” after a bad event, leaning on Mom and Dad to help pick up the slack and 1001 other difficult choices to make ends meet, to pay the bills and to keep the house from being lost.

It is as bad a situation as one where a working family tries to qualify for more debt based on rental income from the basement suite. That is a recipe for disaster too. There are only about 10,000 things that can go wrong in that scenario.

So I agree with you. People who cannnot afford to own homes in the first place should not be encouraged to buy them. That carrot being dangled……well, it’s actually a noose.

#68 groundzeropat on 03.22.11 at 1:16 am

What Vancity is doing shows you the market is falling off. Home ownership is already at 73% and showing there is a lack of fresh meat going into the grinder. So Vancity is now getting people in social housing to enter: “The SpringBoard Program”. What’s next: “DumpsterDiver Program” for the Downtown East Side?

#69 Peter Pan on 03.22.11 at 1:29 am

Vancity is quite well known for its community building activities and the last thing we want to do is to get people into a borrowing situation that is beyond their ability to service that debt as that does not benefit the individual or the community.
“Community building” should not include extending to the social underclass enough financial rope so they can hang themselves.

#70 Alberta Born on 03.22.11 at 1:30 am

Anything to keep the debt flowing eh? DOn’t they realize what they are doing?
It just makes me sick to see here in my Home Town of EDMONTON AB how delusional everyone still is here. Prices have softened over last summer better buy now before they surge again!
A friend that goes to U of AB here told me in their real estate course that CONDO sales in EDMONTON were 1 BILLION Dollars in 2007! Now in 2010 they were $180 Million-down 80%! and prices are still close to 70% of what they were in 2007 and may go up? NOT! SO many empty listings all over the place! Kijiji alone has over 16,500 Ads in the housing section. Close to what they were in 2009 when oil plunged to $33 a barrel and several investors comitted suicide in ALberta as they put all there money into oil & speculative housing (common here in Edmn). We gotten billions of speculative investment from down south, Europe & the middle East & China of course. Now we are left with a massive glut of empty office space & towers, and whole condo complexes that are half empty or near empty.
A real problem in Edmonton & northern ALberta according to someone I know that works at a condo managment company is all the new condos built over the fast 4-5 years have up to a 50% rate of deliquent condo fee payers. Many are investors who bought 5-10 suites and can’r afford to pay the condo fees since they can’t rent them out do to the glut of them on the market!
What a nightmare!

#71 Groundhogday on 03.22.11 at 1:32 am

“So many reasons not to buy a home [insert meaningless list here]”

Only one reason to buy – if you like money.

Renters are mad people.

Prices will continue to rise as surely as there will be people talking about sales or inventory or oil or anything else but price.

#72 Bailing in BC on 03.22.11 at 1:41 am

Yay! We all get ponies!

Everyone? Or just the blog dogs?

#73 BrianT on 03.22.11 at 1:49 am

#19Timing-Possibly-the real surprise is why we don’t have this already in Canada-you know the banks would love it and they pretty well get what they want.

#74 Cato on 03.22.11 at 2:22 am

Throwing common sense lending practices out the window for purpose of social engineering will always end in tears. Aside from lowering risk to the lender saving a downpayment is in itself an exercise in fiscal discipline for the borrower. It might sound harsh but if someone doesn’t have the discipline, means or ability to plan ahead and save for home ownership they aren’t going to be a responsible credit risk in the long run.

Vancity seems to have conveniently forgotten there is more to home ownership then just making a monthly payment to the bank. A home is a depreciating asset and an income buffer is needed to protect from one off expenses like plumbing emergency, replacing the roof, taxes etc. Someone qualifying for social housing is typically barely keeping head above water and this act of socialism by a bank will probably crush those who can least afford it. At the end of the day a credit union is still a bank, regardless of what their shiny happy people marketing campaigns portray.

At a societal level the irresponsible behaviour of banks, governments, NGOs & non-profits under pathetic banner of helping the least fortunate acquire debt is exposing these groups to even greater risk. The blowback from this lending behaviour will tear at the social fabric of the country when things go sideways. Irelands implosion has destroyed its social safety net and they aren’t close to finding a bottom yet.

#75 Jane on 03.22.11 at 2:28 am

Okay, first off, the ladies are wearing each other’s outfit, and second, could they repeat themselves any more times? Dumbing it down for the innocent/ignorant masses.

#76 Eve on 03.22.11 at 2:36 am

I live in Vancouver. I am 27 year old. I have no debts, no cars, no credit cards. I rent. I have steady job with regular paychecks. I save a bit every month. I have 57.5K in my debit account. (I have not yet decided what to do with my savings – I can’t make an educated decision, I can’t afford a good financial planner, but I am learning from this blog and from other peoples mistakes). I travel the world every year. I eat healthy food, have a drink in the pub and spare a change for homeless guy. My friends with mortgagees and leases won’t invite me to spend a weekend with them in Whistler – they think I can’t afford it. They think I am poor. Am I, Garth?

#77 AxeHead on 03.22.11 at 2:41 am


I feel like puking on the ministers shiny white pearls, and down the front of of the real estate cretin’s chest, between the nice white shirt folds.

P. S. Cretin – A Person that is: brainless, stupid, child-like, and full of pointless information that makes no sense and appeals only to other cretins.

#78 Debt's Dark Embrace on 03.22.11 at 3:05 am

I have said it over and over again here on this blog, the powers that be will do everything and anything to prevent or minimize housing deflation. If the bubble pops or deflates, we are toast with a capital T, just like the USA.

#79 Brian on 03.22.11 at 3:34 am

It’s so funny to see see comments like “Morey” #28.
Him and all his relatives say that Garth is “full of it”, but yet they still come visit this blog just to check up what everyone else is saying….looks like some people are shakin in the booties. I’m loving this blog more and more everyday. Keep up the good work Garth.

#80 Michael Castanaveras on 03.22.11 at 4:10 am

20 mortgages funded? That’s chump change. The requirements are so tight that no-one can qualify. This is a non-issue.

C’mon Garth, are you going to pull a Geraldo next and discover the treasure in Al Capone’s vault?

#81 T.O. Bubble Boy on 03.22.11 at 7:22 am

@ #63 Tony:

This tells you the bank thinks interest rates will fall in the future.

This may be true, but the real reason that National Bank is buying back approx. $500M in Preferred Shares is because they need to get their capital ratios up to meet the Basel III limits by 2013.

And – again – when the buyback was announced, they were in fact offering a premium of +2.5% over the current share price to buy the shares… the issue for National Bank is that the shares have risen in the past 2-3 weeks, and their offer is now below the current share price!

I’m wondering if they will increase the offer, or just hope that people already signed up to sell the shares back?

#82 S-J on 03.22.11 at 7:30 am

Goodness, how many times did they have to tell people that the “HST does not apply to resale homes” in the video? It’s like the commercials they play twice, back to back, just in case you didn’t get it, or weren’t paying attention. Repeat, repeat and repeat again.

#83 T.O. Bubble Boy on 03.22.11 at 7:32 am

Amanda B?

#84 David B on 03.22.11 at 7:52 am

Wow ….. move to Ontario everybody …..move now!

Soon homes will be for free ….keep up the good work Garth you got both governments on the run ……

And the really good news is: prices are not reflected by these free wheeling programs in fact contractors and financial institutions could charge less! … that would never happen eh?

#85 Rob now in Nova Scotia on 03.22.11 at 8:00 am

Garth, I can actually understand VanCity’s proposal. Take the upper end of those on social assistance and give them a chance to own a home, build some equity and use the vacant apartment for someone way more needy. It is almost as socialistic as communism but if property values never go down, this would work out well. I wonder what Vancity will do when the property values go down.

#86 john m on 03.22.11 at 8:35 am

CMHC’s accountability reminds me of “H’s”–> “all things are good because we say they are!”…..I would sure like to see some figures.

#87 Sean on 03.22.11 at 8:42 am

1 foreclosure out of 20 mortgages issued.

Isn’t that a 5% foreclosure rate. More than 10X what the government is telling us is the official foreclosure rate from the big banks and CMHC.

I think the bean counters and decision makers at VanCity need to rethink what they are doing. Or, they are extremely desperate for business.

#88 Jas` on 03.22.11 at 8:45 am

It should be called the Springboard to Stupidity Program. How is it of any help to a person if they do not really have much equity in this supposedly “affordable housing” scheme. Even if they had equity, real estate is still a crappy investment. A house is a place to live, not a place to invest. If you really want to invest in your house, then replace the plumbing and the toilet with pure platinum or gold and adorn the walls with diamonds. That would raise the price a bit, if you can sell it. Oh my, such an abundance of fools in our society.

The era of deflation is soon and a lot of people will be crying over lower housing values. It’s going to be sad and pathetic.

Btw, why can’t we just build simple, small houses to live in. All these stupid government rules are just making life hard for everyone. Because of this, poor people have to live in crummy bachelor apartments. The biggest country in the world is inhabited by so many people that live in tiny rat-holes. Such a pathetic state of affairs. My ex lived in a bachelor apartment in Toronto and she was paying 1250 a month. This was in 2007. The place was so tiny and the bed was a pull-down from the wall. What a disgrace. $1250 a month in Mexico or the Philippines enables you to live in a spacious apartment or house with all your living expenses and health insurance covered by that money. Ridiculous. Vancouver is a just a rat-hole like Toronto. Sorry for the expression, but I lived in Toronto for 5 years and that’s how I felt.

#89 theletterM on 03.22.11 at 9:00 am

Everything’s fine.

Enjoy the taxpayer-funded high-def “Economic Action Plan” infomercials and drink more of Flaherty’s “Financial Punch” Koolaid.

Don’t question the Harper Government®. They are the only moral authority fit to govern.

Say it with me…”Greed is Good, Greed is Good…”

#90 Dodged-A-Bullit-in Alberta on 03.22.11 at 9:08 am

Greetings: A disturbing article, but not surprising that this will not get widespread attention. It is much like the death toll from auto accidents, large numbers spread out across Canada, not noteworthy, however a plane crash, bus accident, train incident garners headlines. Who will link financial distress to boomer suicide?? Does Ottawa have the numbers for these people living below the poverty line?? Do the provinces?? Municipalities?? Are we so tied up in our own confined world that we give a rats’ ass about others?? I wonder if todays’ budget talks about Canadian poverty? Certainly a lot of TV pleas to assist impoverished people of third world countries. The Anne Murray commercial, makes me want to puke!! Mike Holmes can stuff it!–experts-worry-suicide-will-rise-among-baby-boomers

#91 let me get this straight on 03.22.11 at 9:12 am

Hey I invested 2:11 and watched that video.

Wait a minute, is there HST on a resale home? I can’t remember. Did they mention it?

When the government needs to sit down with the RE association and some actors to try to sell houses you know it’s time to stand back and watch the train wreck.

#92 Paul on 03.22.11 at 9:48 am

I suppose if one can afford a million+ house in Van this wouldn’t matter much…

#93 The InvestorsFriend (Shawn Allen) on 03.22.11 at 9:58 am

Number 44 Crash said:

Something I overheard recently: “People with big mortgages make the best employees.” Think about that.

Yes, that is true.

The more you are paid and the more you owe and the more difficult it is to find an equivalent job, the more power your boss has.

An apparent tactic in government and large corporations is to pay people enough so that they are very beholden to the company. They could not find an equivalent job easily. Plus they have responsibilites and a mortgage.

No possible way can they cay “Take this job abd shove it”. No matter what the abuse.

Instead the boss can abuse people mentally for years and get away with. Even quitting and suing for damages is not really an option for most of you. You would still need another high paying job.

With a huge mortgage, this is the life you sign onto.

When I got a mortgage in 1995 I refused to go much above 1 times our combined income. I scrambled to come up with 25% downpayment to avoid CMHC fees.

My choices in life are much broader as a result. I am not nearly so beholden to my bosses as most people are. That feels good.

#94 The American on 03.22.11 at 10:36 am

Question – In Canada, how long have realturds and the media been saying, “BUY NOW! OR, BE PRICED OUT FOREVER!!!”???? I’m curious…

#95 Herb on 03.22.11 at 10:39 am

Here is a modest proposal to cut the Gordian knot of how we are governed –

But “… who needs evidence and expertise when you have ideology?”

#96 chris on 03.22.11 at 10:44 am

I wonder how much the Liberal government paid their consultant friend for this untendered ad?

#97 Fair Pensions on 03.22.11 at 10:50 am

Hey I like that girl in the HST video. she is the same one BC Pensions used in my favorite video called Paycheque for Life.

In the ideal world we could all have pensions like the one described in a video series from BC Pensions. Where your pension becomes a “Guaranteed paycheque for the rest of your life”. This works for me “you stop working but the cheques keep coming… guaranteed”.

The video series was particularly offensive and and insult to taxpayers. They have since taken it down and only a few remnants remain.

#98 Traveling Renter on 03.22.11 at 10:53 am

We have created a society of “having” rather than “being”. The government, religion, big business and the media have all supported and promoted a belief system that makes people “want” and therefore greed becomes the major motivation for the masses.

In the last 60 years, people have been educated more by the media than any other source and now we have a society that doesn’t know what they don’t know and believes what the media says without questioning or researching further. They then make big life decisions based on this “education” and we end up in periods of moral correction like the one in the US and what is starting to happen here in Canada. I hope housing prices drop over 50%. It is the true “education” for the greedy and is long overdue. There is no enlightenment without suffering.

Crashes will come and go. Wealth will come and go and your life is all what you make of it.

Choose to live a life of experience rather than accumulation and you will never fall into the traps that make you take on huge amounts of debt to for shelter.

#99 SK on 03.22.11 at 11:05 am

To Love This Blog:

Here is the information for SK you need to know:

#100 Worked for you I guess on 03.22.11 at 11:07 am

Hey 92 The InvestorsFriend (Shawn Allen), “…When I got a mortgage in 1995 I refused to go much above 1 times our combined income. I scrambled to come up with 25% downpayment to avoid CMHC fees…”

That sounds like a great plan.

Any idea where I can buy a house for about $80K?

Oh, what’s that you say, your income is about double the average because you’re so clever….okay, where can I get a house for $160K?

No point rubbing it in that you bought in an entirely different time. This doesn’t help anyone now pal.

#101 Abitibidoug on 03.22.11 at 11:09 am

It looks to me like the government is just delaying the inevitable correction by suckering in a few more first time buyers.

Yes, the points brought out in posts #44 and #92 are quite right. If you make the choice to have a big mortgage an employer has power over you, not a good situation to be in. It seems a lot of people don’t understand that until it’s too late.

#102 Enlightened on 03.22.11 at 11:13 am

If they can’t get you coming……….they will get you going:

#103 Ex-Cowtown on 03.22.11 at 11:18 am

Rising Price; Dropping Volume – Danger sign

GT blathers on about this incessantly. So I looked it up. He’s correct. It’s a technical trader signal that the market is running out of steam and that a correction is likely. Think of it this way:

A normal market is like water running through a garden hose with really rubbery walls so that it can expand a bit like a balloon. There’s also a nozzle on it so that it is choked back a bit .

The choke back represents the time lag that it takes to buy a house, and the ballooning walls represent the herd mentality, house horny lemmings who take time to change their minds as to whether they will buy or not. Remember, the process of buying/selling is not instantaneous, so changes at the wall tap take some time to work their way through the system).

In a bubbly market, it goes through like a fire hose which is constantly being turned up, increasing volume (# of sales), increasing pressure (price). The rubber walls of the hose (pent up demand) expand to accommodate the building pressure.

Somebody comes along and slowly turns off the water. For the first while, the rubber walls in the hose keeps the pressure going (pent up demand pushes prices higher), but the water volume starts to drops off as there is no new water coming in, only the stuff in the ballooned out walls.

It’s all about momentum; for a few moments the momentum keeps pushing the price higher even though the next round of demand isn’t there. Then it crashes.


#104 Dodged-A-Bullit-in Alberta on 03.22.11 at 11:43 am

Greetings: # 94 [Herb]

I read the G&M article you linked above. My opinion, another A-hole with vested interests, feeding at the public trough and trying to justify his existance, supported by Canadians who actually “work” for a living. I had a call last night from a survey organization here in Alberta, wanted me to answer questions about the provincial government and the Alberta economy. After a couple of min, I told the girl that her requested answers of: not at all, somewhat, quite a bit, very concerned; were bullshit and I hung up. Surprising she called back seconds later, thinking we were accidently cut off. My second reply was not as tactful as the first. Of course, I am blaming this blog for creating my rotten attitude to this nonsense. I recall a bumper sticker with an upraised middle finger, captioned “Analyze This”. An election call cannot come soon enough for me!!

#105 SM on 03.22.11 at 11:47 am

#56 (love this blog):
consult a lawyer for your situation. they can advice you for free accordingly as laws for every province are different.

#106 tran, Calgary on 03.22.11 at 11:56 am

Why I Am Never Going to Own a Home Again

#107 Live Within Your Means on 03.22.11 at 12:03 pm

#94 Herb on 03.22.11 at 10:39 am
Here is a modest proposal to cut the Gordian knot of how we are governed –

But “… who needs evidence and expertise when you have ideology?”

Thanks Herb – good article.

#108 realpaul on 03.22.11 at 12:11 pm

Wasn’t it the ‘ninja’ variety loans when US buyers had no down and no job the headline news ‘du jour’ for the Cdn press when the media decided that bad loans were the cause of the US real estate collapese? Now its being touted as socially responsible by the friendly flakes at the Van Shitty Credit ? How the worm turns when the local media gets advertising dollars in the door. Where are the holier than thou comments from the lickspittle commentary pukes?

Misdirection seems to work…Vancouver gets a blow job from GreenSpeak. Given the fact that the planet was far warner millions of years ago thatn today…pray tell what the f**k does human development have on ‘climate change’. Hey GreenDips…….the climate has been changing for billions of years …….get used to it.

From where I sit in London..the existence of Vancouver and the plaintive bleating for recognition seems rather pathetic in the bigger scheme of things.

#109 Jamie Groulx on 03.22.11 at 12:37 pm

Interesting article in the sun, of all places, concerning the city of Calgary property tax grab:

#110 Dodged-A-Bullit-in Alberta on 03.22.11 at 1:12 pm

Greetings: # 96[Traveling Renter]

Your comments on how the sheeple buy whatever story is current is correct. I have been surfing the web today for info on crash of US military jet. No where has anyone posted possibility that a “surface to air” missle or anti -aircraft fire created the “equipment malfunction”. My viewing of the photos, if one can trust the photos, on the web tell me that jet did not crash from a high altitude, consistant with reports that the crew bailed out at high altitude. Wreckage is too compact. If the a/c had indeed had a problem, at high altitude, I am certain the crew would have pointed it out to the ocean before ejecting. First casuality of war being truth eh!!

#111 Lettuce on 03.22.11 at 1:14 pm

i used to work for Vancity. Never again. Their
“we are so ethical” refrain is ridiculous… and now look at them offering mortgages to look good, to those who cannot afford them. Better advise would be to help them move to a more affordable community.

#112 TS on 03.22.11 at 1:35 pm

Gluskin Sheff cited this fact in there newsletter today.
But of course it is different in Canada…
Actually sounds very familiar and will become the standard for most average Canadian working folks.
This is what we H,F and C and there big friends like and promote it is called productivity. Just a consequence, no big deal for those calling the shots.

U.S. real average weekly earnings are down in each of the past four months (and five of the past six), and at a -4% annual rate. So the problem is that even though the labour market is getting marginally better, wages are not keeping up with prices, which means a big squeeze on real income and spending. The incremental stimulus for the U.S. consumer ends this quarter. Big problem for the consumer discretionary group. Also consider that in the past six months, 90% of the wage gains incurred by the household sector has been absorbed by the food and energy bill.

#113 Mikey the Realtor on 03.22.11 at 1:41 pm–disappointing-retail-picture-could-slow-interest-rate-hikes

Rates will be staying low for a while longer folks, expect another 2 years of low rates at the bare minimum. C has dropped the bomb, while F is handing out free money to buyers. What a wonderful world!

#114 MP on 03.22.11 at 2:19 pm

A Vancouver man is speaking out about how Scotiabank charged him $25,000 to pay out his mortgage early — nine months after telling him the fee would be half that much.

“It totally doesn’t make sense to me,” said Mohsen Movahed. “I learned that dealing with banks in Canada it could be very dangerous. Everything is against the customers. You should have a huge knowledge.”

#115 Devore on 03.22.11 at 2:27 pm

#77 Debt’s Dark Embrace

I have said it over and over again here on this blog, the powers that be will do everything and anything to prevent or minimize housing deflation. If the bubble pops or deflates, we are toast with a capital T, just like the USA.

And having thrown the kitchen sink at it, when it falls anyways they will have nothing politically viable left.

#116 AG Sage on 03.22.11 at 2:29 pm

>#34 The InvestorsFriend (Shawn Allen) on 03.21.11 at 11:32 pm

Since DA has been absent I’ll play Devil’s advocate.

Since we are discussing a pool of poor people. Why would you expect more than 5 per year to qualify? To buy a house. In Vancouver. I don’t think I would qualify to buy a house in Vancouver and I’m in the top 5% of earners. If they are executing this program correctly, they would have a lot of overhead in overseeing it and tracking these clients. That extra expense is probably not covered by the gain on these mortgages but coming out of the general budget.

#117 HouseBuster on 03.22.11 at 2:33 pm

@58 Eddie – WoW!

#118 theletterM on 03.22.11 at 2:59 pm

Median home price in USA at lowest level since 2002:

Median home price in Canada at highest level EVER:

$156,110(USD) vs. $365,192(CAD)

That’s more than DOUBLE! Canada’s future is America’s past.

#119 TorontoMarc on 03.22.11 at 3:03 pm

The chick on the left of the vid is a post-op tranny right?

#120 Dorf on 03.22.11 at 3:09 pm

“The 100% financing offered in the Springboard program is based on what the individual family pays for rent. All housing payments are kept within what they currently pay.”

If the payments on these houses are kept to within what they paid for rent, how do they come up with money for house maintenance and repairs ?

Nobody pays upkeep on a rental….nor do they have to do the work themselves. Then there are property taxes…

Are these people being led into something that will eventually be detrimental to them ?

My guess is that the banks are carrying lots of shit properties that are costing them money, and all they are looking to do is shift the cost to somebody else.

Get somebody else paying the bills whether they keep the house or not. Delude them with the dream of owning the place, and get them carrying all of the costs.

#121 Devore on 03.22.11 at 3:12 pm

#100 Enlightened

“I am financially in trouble. I just want to sell the property.”

Expect more of these stories should RE prices ever stop rising, or, god forbid, fall. The hardship cases are always the ones who HAVE TO sell, and as time goes on there will be more and more of them.

“There are no rules. There is no regulation — and banks can do whatever they want,” said Beaumier. “Banks are already protected for the interest rate situation. The penalty is redundant and is hardly justified.”

Au contraire! There ARE rules and regulations! Those are it. Allowed and approved by bank regulators in Ottawa. IRD on the remainder of the mortgage term, or 3 months interest, whichever is greater. This is the banks’ protection for “the interest rate situation”. They’re not a charity, why should they be expected to take a loss on your loan? You’re breaking the contract, the contract has an escape clause: IRD. No one complains about “unfairness” as long as it’s in their favour and they’re the ones making money hand over fist. Only when the shoe is on the other foot.

#122 Ronaldo on 03.22.11 at 3:16 pm

I used to think that credit unions had more scruples than the other larger lending institutions but am beginning to think that they are no better.

It’s strictly the bottom line they are concerned with and to let on like they really are trying to do great things by letting people with no money get into one of the most expensive assets is absolutely mind boggling.

These are supposed to be smart people. Are they so greed ridden to realize that the only reason that property prices are where they are today are because of the absolutely ridiculously low interest rates and policies that this gov’t brought in back in early 09 which created the massive real estate bubble that we are in today, particularly in the lower mainland.

Are they going to show these same “poor” soles any sympathy when interest rates start to climb once again and property prices crash and find that even at “interest only”, they can’t come up with the payments.

Then what? Do you then run to the government for subsidies to help these people out so that you can avoid foreclosing on them? After all, you wouln’t want to do that since you are so concerned for their welfare right? Or do the taxpayers via CMHC pick up the tabe once again? When does this nonsense stop?

#123 poco on 03.22.11 at 3:31 pm

#111–Mikey the Realtor
“rates will stay low for a while longer folks, expect another 2 years of low rates at the bare minimum”

that’s the best news i’ve heard in a long time–rates staying low –whoopie–just think what your dollar will buy you in two years after watching the RE market go down– down– down
hell, instead of buying one property, all of us on the sidelines will be debating whether to buy 2 or 3 extra rental properties
projecting where some of these properties will finally sell for over the next few years is going to be — well “vulturism”
come on Mikey you’re not watching the market very well–you could be buying these great properties and flipping them for a fortune–here’s a couple you might consider scooping up
mls#v866797 listed aug10-828.8k–now at 764.8k
mls #v871867 listed feb11–989k–now at 918.8k
mls#v867187 listed jul10–548.8k–now at 479k
mls#v860910 listed feb10–399.8k–now at 299k
i wonder how many of these are underwater?? come on Mikey, tell us, please
and Mikey remember –RE only goes up–right????

#124 LS on 03.22.11 at 3:32 pm

I have on friend who told me that her and her boyfriend live the “LOC” lifestyle.

Since she got her degree in her 30s, and has been divorced once, she has very little saved, if anything.

However she travels 2-3 times a year, at least one of these trips to Europe.

I guess once you get used to the idea, living your life on credit is easy.

At least she’s managed not to buy a condo. Small miracles.

I have another friend, never married, single and no children and is in her mid 40s. She has no pension, little savings. By Cdn standards, has made good money over the years. Likely $100k plus take home for the last 5 – 10. She, herself, needs a serious austerity plan, if she’s going to retire before 75.

In my experience, people who are good with their money are the exception, not the norm. It’s quite frightening how poor most are with their finances.

#125 Mister Obvious on 03.22.11 at 3:50 pm

From time to time in the last year or so I’ve offered field reports regarding the astonishing number of condos under construction in the Greater Vancouver area. Until recently, I’d always thought this was mostly due to the ‘momentum’ of projects that were too far along to put the brakes on.

Today I had occasion to drive from Vancouver to New Westminster and back (by two different routes) and was astounded by how many new projects that have begun in the last month or so. These are locations that were, until very recently, derelict hotels, strip malls, low grossing gas stations and rows of rundown houses built in the 1920’s. I counted at least six brand new large excavations and lots of presale signage.

Now, I’m a pretty much a RE bear like most posters at this blog but I can’t deny that the condo construction business is simply booming in Vancouver and its environs. There is no other word for it. There are so many drab, depressing little concrete mouse traps coming on line. It’s really getting interesting now.

#126 Tiffa on 03.22.11 at 3:57 pm

Too late for today, Love This Blog, but here:

#127 BrianT on 03.22.11 at 3:59 pm

#122LS-I understand your point, but IMHO you aren’t being realistic here-if your friend is able to do her job at 75 yrs old (as you state) she will be ahead of 95% of people her age. IMO the mutual fund industry and the MSM has successfully brainwashed the public into actually believing they are going to live in perfect health forever, all logical evidence to the contrary.

#128 Hoof-Hearted on 03.22.11 at 4:01 pm

Local Gov’ts are a joke.

They seem to feel it’s their entrenched right to jack up Property taxes beyond the cost of living, taxpayers own wage increases etc.

The compounding factor of this is even more insidious.

I am not saying what is happening is Wisconsin is right….but in Canada, it may occur simply via default.

#129 BrianT on 03.22.11 at 4:05 pm

#110TS-It is actually weaker than you say-most of the new jobs being created in the USA are in the guv or pseudoguv sector-small and medium business is being wiped out. Obviously the ponzi runs out eventually as there is no real capital to support the guv and pseudoguv sectors.

#130 Larry T. on 03.22.11 at 4:07 pm

What about Vancouver’s Olympic Village Garth? The bubble has already burst there with the 45% reductions last month and the law suits now being taken. Is this nightmare a microcosm of what is to come in the rest of Vancouver & Canada’s real estate market?

#131 fu_ming_xia on 03.22.11 at 4:08 pm

I just emailed Sophia Aggelonitis for that pathetic waste of tax payer dollars, and how she’s whored out herself to the Real Estate industry. What a joke. You know who’s hands are in her pockets.

email her at the addresses below.
[email protected]
[email protected]

Speak up, Speak out!


#132 Hoof-Hearted on 03.22.11 at 4:15 pm

The fellow in the picture appears to be Italian.

Thus, he looks about 35 , probably owns 3-4 homes, paid off of course. Most Italians claim to be plumbers…ask John Gotti

The lady is probably a realtor from Toronto, not sure what his name is, probably a WASP and has Mike Holmes on speed dial.

#133 Vancouver_Bear on 03.22.11 at 4:52 pm

#112 MP on 03.22.11 at 2:19 pm

We will hear more and more about cases like the one described in CBC story….when rates go up and mortgage ownership becomes unaffordable. Banks win again, despite that they are financed with our hard earned tax dollars through CMHC. Stupid utterly stupid!

#134 on 03.22.11 at 5:07 pm

Well, I think in this blog there are a lot of people waiting for Real State to crash and they hope this to happen. I really dont care if house prices go up or down, my last payment is in 3 years, however I think prices will stay the way they are for long time. Houses are selling quickly in GTA. It is ok to accept Canada is different!

#135 The InvestorsFriend on 03.22.11 at 5:58 pm

Number 98 – Worked for you I guess did not like that I pointed out that I bought a house for 1 times my income in 1995.

He makes a good point that house prices may not allow that now. I could have qualified for a house at twice my income but I chose not to.

The point that was make by myself at 92 and Crash at 44 was that if you buy a house with a honkin’ great mortgage you are a slave to your boss. He can abuse you at will because you need your job desparately to pay that mortgage. You can hardly afford a day off let alone 4 months to find a new job if you tell the boss to shove it.

So you might want to rent. If houses are unafforable the market must correct. Be patient.

Otherwise take that big mortgage and prepare to be an abused wage slave for the next 30 years or so.

Oh, and since you apparently work for me, where’s that coffee I asked you for? and make sure it has two cream and one sugar this time!!!

#136 pjwlk on 03.22.11 at 6:11 pm

#29 Mikey the Realtor “DA and I just raised our commish to 6% due to the market being so strong”.

Good luck with that fella. I just learned today that my brother-in-law sold his 3600 sq. ft. house and paid only 3% commission. 0.5% to list on MLS and 2.5% for the buyer’s agent.

Better get with the plan Mikey before you find yourself on the unemployment line…

#137 Kitchener1 on 03.22.11 at 6:22 pm



Can;t wait to see what kind of handouts the parties will give to the old boomers.

First party to raise CPP/GIS/OAS by $300 a month is getting a majority.

#138 jounetsu on 03.22.11 at 6:31 pm

well I just ordered your book, hopefully it will help with the waffling I’ve been doing with some cash I have that isn’t doing anything for me at the moment… we’ll see…

on another note… you amuse me

#139 Nostradamus Le Mad Vlad on 03.22.11 at 7:10 pm

Stunningly beeyootifull day today, sunny — almost thong time dans l’Okanagan, plus lotsa good posts.
Fukushima “You Get 3,500,000 the Normal Dose. You Call That Safe? And What Media Have Reported This? None!” Except Garth’s blog.

9:40 clip FEMA, in their own words — the NMF.

Facts ‘n’ Figures on water and stuff in the world.

Tectonic Nuke War Incl. unexpected ‘quakes.

Mythical Recovery “Poll: Nearly One-Third of Homeowners Underwater on Mortgages” (The Hill).

Connection between oil price shock and recession. Chart and link in.

Four Day Week coming soon to Texas (then state after state)?

Curious how wrong things happen at right times for wrong reasons. Nothing to do with RE, economics or war.

#140 Kits on 03.22.11 at 7:24 pm

#29 Mikey the Realtor and #134 pjwlk

what are you retards talking about? …. I just sold a house … 7% on first $100k and 2.5% on the rest …. buyer and seller had an agent

#141 john m on 03.22.11 at 7:27 pm

An example of why we are where we are today . So much for reducing our debt>>>>>>>Canada’s government may be in good financial shape compared to Greece or Portgual, or other nations that have faced tough markets for borrowing, but it’s taking no chances with the possibility that one day it will need money and the markets will be closed. In Tuesday’s budget, the government said it’s planning to borrow an extra $35-billion to ensure it has cash on hand……………..This is beyond belief to me!! We already know what happened to the surplus “H” and company inherited before the recession!

#142 Foster Dulles' paunch on 03.22.11 at 7:55 pm

I overheard an RBC snotty @ a Tim’s today.. He’s getting married but forget getting a house its some kind of realtor trick. Should add the bank to the trick.

#143 Nostradamus Le Mad Vlad on 03.22.11 at 8:26 pm

Blanketing The Planet Seems this nuke stuff is affecting more than Japan, and Radiation “Of course, the only ones with the equipment to test seawater for radioactivity after Hiroshima and Nagasaki were American weapons scientists, and they would never lie, right?”

Map pf world’s nuke sites, First Japan, now UK? ‘Quake Shake What could happen to Tokyo.

Dogs of War Costs are piling up up, but what the hell! North and Central America are already broke! Eat yer heart out, Caligula! Obama, Prince of Darkness.

4:43 clip US — Divide and Conquer. Or is that Harper? Is there a connection there?

Squeezing in all the wrong places, and US Housing Prices.

China, Russia and Brazil call for ceasefire in Libya.

Oz A great write-up, sans RE.

Strange Stuff One and Strange Stuff Two.

#144 jess on 03.22.11 at 8:38 pm

MR. Black said: the easiest way to rob a bank is own one. I am certain there are more…

Former Bank President and Senior Loan Officer Indicted in Multi-Million-Dollar Fraud Conspiracy


Press Release: Governments should name banks that took corrupt money from Gaddafi, Mubarak and Ben Ali Global Witness
Mar 20 – A clear message must be sent to banks that doing business with corrupt dictators is unacceptable: first, those banks holding dirty money should be publicly named and then regulators need to devise a new system which stops banks from taking suspect funds in the first place.

Some $32 billion has been frozen by the US, $3.2 billion by the UK, and other countries such as Switzerland, South Africa, Japan and Austria have frozen funds connected with North African despots. This has been hailed by governments as an achievement, but it actually highlights the catastrophic failure of the anti-money laundering laws that are supposed to have kept dirty money out of the financial system in the first place.

Corrupt rulers control billions of dollars stashed in bank accounts, despite earning far more modest official salaries. By accepting this money, banks are propping up brutal regimes by allowing them to pay off political cronies, rig elections and terrorise their people.

Failed Stockbridge Bank Allegedly Fleeced Before Being Seized By Feds

#145 Timing is Everything on 03.22.11 at 8:39 pm

#41 Nostradamus Le Mad Vlad

You may find this one, shall we say, interesting… Ha!

#146 Timing is Everything on 03.22.11 at 8:59 pm

#44 Crash

Gotta agree. I’d be a great employee with a big ‘gun to my head’ too. Haaa!

#147 Timing is Everything on 03.22.11 at 10:01 pm

#96 Traveling Renter

I’d rather have a sno-cone than be one.

#148 Chris no longer in England on 03.23.11 at 10:34 am

Just got back from a 10 day visit to the old country. I am now catching up with what’s been happening on this blog and also itching to see what new listings have made their way onto the mls while I’ve been away. I have so far read the entry featuring poor old Chad in Vancouver, with his $200,000, cheap apartment and crappy car who cannot get a girlfriend. My suggestion to him for finding a girlfriend is to email what he sent to Garth to every girl in Vancouver – that should help (or not – as they all descend in a pack trying to prise cash out of his pockets).

I also noted Garth’s comment about golf clubs in the US going broke. I noticed a big drive (sorry, bad pun) myself while in England – big banners swathed across the gates of golf clubs touting for new members and offering deals. Clearly, people are cutting out what they consider to be unnecessary luxuries, particularly as the price of fuel has rocketed, and their priority is just to get to work in the first place. Petrol (gas to you) is selling at an average of £136.9 a litre, which is about $8 per gallon – higher than I’ve ever known it, and these were city/urban prices. In rural areas it will be higher as there is less opportunity to shop around.

People I spoke to are spending less and staying at home more. This means less spent in the leisure industry and more jobs will be squeezed. It’s an interesting contrast to here, as it seems people in the UK are more alive to the dips and troughs and react to them immediately (oh shit!) and when they are tossed around in the swell they don’t shrink from admitting it. Maybe it’s because we are used to being shafted by the government and big business, and so take a pretty pessimistic view of what we will be “allowed” to keep, rather than assuming it is our right to have it in the first place. I won’t comment about Canadians and the whole spoilt entitled thing they are always accused of, as I haven’t been here long enough to cast those particular stones, but if it’s true, there’s a big shock in store, made more difficult because the longer Canada manages to lurch along the harder it will be when things eventually fail.

And yes, I still get incredulous responses when I say my house is rented (almost as though I have fallen in that person’s estimation). Well, as a foreigner I don’t feel the disapproval as much as a Canadian would, but I do feel it, so for everyone else out there I do sympathise. In the end, you have to act according to what you feel is right for you, and just let everyone else get on with it. As I have already sold everything I owned, I can attest to what a marvellous feeling it is not to be tied to anything and to know that whatever happens I can roll with the punches. Good luck to all. Now, back to the old blog entries.

#149 somejerk on 03.23.11 at 4:16 pm

T.O. Bubble Boy – haven’t seen any of your great RE postings so had to add one ;)

remember this one from last year… (I believe it was a rodent infested lot for ~1.1)… getting van-groovey frothy here, the fight for the best place on earth is beginning… face-lifts are 700k now…