Imagine a place where housing’s hopelessly unaffordable. Where it takes six or nine times an annual income to get a home. Where young people, despite their inexperience and lack of money, are dangerously pushed into piles of debt. Where folks are told there’s a shortage of land, in a country that’s mostly empty. Where government has purposefully inflated real estate. Where anyone can flip on TV and see what housing excess did to the middle class in Britain or America. But where everything thinks it’s different.
And it ain’t Canada.
Two weeks ago a home buyers strike emerged in Australia.
Interesting, because the country of 22 million is in the throes of a housing bubble just like ours. Prices have raged higher since the economic crisis three years ago, fueled by low rates (now higher), easier credit and a real estate-horny government. Weeks ago The Economist figured Australian houses are overvalued by a withering 56%. And Demographia ranks Sydney among the most expensive cities in the world (9.6 times income), right ahead of Vancouver (9.5).
Speculation is rampant. Investors have snapped up properties, but (like here) market rent won’t even cover the cost of carrying them. And the MSM is filled with opinion pieces and quotes from politicians and experts saying there is no bubble – just a robust market based on economic fundamentals. Hic.
But at least some people aren’t buying it. Like Paul, who reads this pathetic blog. He writes me:
I’m a Gen Y and of all my friends here in Australia very few have actually bought a house, what’s more these few only bought prior to the start of 2010. The majority of my friends however (including myself) rent, and of that majority none of them want to buy a house at the moment. The interesting thing is, go back to 2010 and most of this majority wanted to buy a house at that time, so sentiment has changed fairly quickly (at least for my generation).
It also mirrors what’s happening in the US. Surveys show that while 85% of Americans thought owning a home was a swell idea a few years ago (in Canada it’s now 90%, says RBC), that number has now plunged to 69%. Worse, among people under 30, six in ten want nothing to do with real estate.
So, a group called Prosper Australia, which usually lobbies for tax reform, has issued a call for all property virgins to remain whole. Stay away from house deals, it says, before “the flip into a falling market” which is says is imminent.
Here’s the media release:
“When the Great Australian Land Bubble bursts – just as land bubbles all around the world have – the freshest buyers are totally exposed. They face financial ruin as house prices fall below their debt. The crippling mortgage repayments become pointless. We cannot help those who have recently bought, but we can warn prospective buyers – particularly first-timers whose innocence and heavy borrowing leaves them uniquely exposed.
Residential properties are trading at between six and nine times earnings – depending on assumptions. Historically, they have fluctuated between two and a half and three times earnings. A buyers’ strike is the only rational response to current land prices. Frankly, prices are ridiculous. How anyone can pretend Australia has a land shortage beggars belief!
Some argue prices have arrived at a new and permanently high plateau, but the historical record shows reversion to the long term average – in every case without exception. I remind you there are 1.3 million Australians with negatively geared rental properties. They are diverting all rents and some personal income to meeting interest payment in the hope of capital gains. When only capital losses are expected, investors will flood the market and overwhelm demand. Buyers will step back, making it virtually impossible to sell at any price.
Do not underestimate the scale and significance of the transformation that is about to unfold. Price falls are imminent – protect yourself. Don’t Buy Now!”
So, does the movement has legs? Has it become a media darling? Or is it viral?
“As far as I know,” says Paul, “it has had very little or no attention in the mainstream media. Politically this movement has not had any mention, however the green party is beginning to talk about the housing affordability issue, so if it’s going to get mentioned it will probably start with the greens. As for the public consciousness I think once again it is too early to say, but it seems sentiment is really starting to change anyway.”
If you want to know more, here’s the Prosper Australia page, here’s the Facebook page, and here’s an online forum kicking the idea around.
As you browse this material, think of all the dewy-eyed, hormonal, brainwashed young bovines who stampede to every new home sales trailer in Milton or condo project in Burnaby, snapping up properties in less time than it takes to choose a flattering thong (I know). As this blog’s pointed out, the tiniest of real estate corrections is enough to throw tens of thousands of unsuspecting young homeowners into negative equity. Worse, a protracted housing slump (and it’s coming) would erase their savings, destroy their financial futures and saddle them with debt without the prospect of equity. In short, way worse than rent.
Let me leave you with a couple of facts that cropped up in the last two days – reminders of what a housing correction can look like.
- In the suburbs outside New York, it’s estimated housing values will recover – by 2020.
- It’s now believed US realtors have exaggerated sales of existing homes by up to 20%, meaning the current market is worse than that of the Great Depression.
- New home sales are the lowest ever. (Records have been kept for 50 years.)
- Las Vegas had one of the hottest real estate booms six years ago. A home that sold for $240,000 is today worth $80,000.
Go to your television sets. Now. Turn off HGTV. Rip it from the wall. Fling it into the street.
Stand there, and scream: ‘We’re mad as hell. We’re not gonna take it anymore. I’m on strike!’
Buyers, not sellers, set prices. Pass it on.
186 comments ↓
first !!!
Then why hasn’t Vancouver tanked? Or even corrected by ten percent?
Maybe the election will be the catalyst. If Canadians are stupid enough to vote in Harper again, the anti-democratic PM, who held up Parliament twice and is not being honest with Canadians about how he is spending their money, then things will really tank…
Maybe it will start with social media.
How ironic eh Garth?
You really were ahead of your time.
Receivership sale in Squamish BC! And so it begins, do you USA much?
I guess the 5/35 @ 2% could not wow ’em. Now what?
Brand new condos and townhouses in receivership:
http://www.coastalvillageliving.com
– And there is yet another new Squamish townhouse development down the road.
This cannot end well?
http://www.tantaluscrossing.com
– “The median detached house price in Squamish, at $425,000, is now 15% below than what it was three years ago. Since the first of the year, only 5 condos have sold through MLS in Squamish.”
http://www.thekey.com/Blog.php/spotlight-sea-to-sky
Beware of the Squamish Sasquatch! 8O
Note: you could try placating him with Sno-cones?
Garth is upping the ante…I like it.
It won’t happen here in Canada. We have plane loads of Chinese buying because the Canadian government is offering a visa waiver to all Chinese nationals. Now they are coming to buy real eastate. There are 48 million millionaires in China. They are all buying in Canada … and Australia. Canadians should start selling. The Greater Fools are coming out of country!
SPLAT! Damn was that a property virgin’s ass going through their brain hitting that windshield that doesn’t exist in Canada?
Hope we have a Harper selfservative majority government when the shit hits the fan. Really wonder how we’ll pay for those hot, overpriced, stealth, not really good at much, fighter jets. Guess we can kiss healthcare goodbye. Probably can kiss our incomes goodbye too.
Thanks for posting this. I hope young people get the message.
Somebody with more time than me needs to start up a new site-‘dontbuynow.ca’ get it out there, then let it rock n roll.
Good one Garth.
I’m on strike! (and have been for a while now)
Australia & Canada – both commodity based economies whose real estate markets will only tank after the RE market in China tanks.
Due to the disparity between the fundamentals and RE values in Vancouver, most people do not have any disposable income. I was trying to sell my used car and it is amazing how 7-8K dollars is unaffordable for most people and are looking at financing, despite “owning” a 700-800K home. This lack of incomes and debt also breeds more swindlers and charlatans.
A truly amazing study of mass RE delirium in Vancouver.
I wonder if Vancouver has the worst economic fundamentals compared to any other city.
The theory of cognitive dissonance proposes that people have a motivational drive to reduce dissonance. They do this by changing their attitudes, beliefs, and actions.[2] Dissonance is also reduced by justifying, blaming, and denying.
That pretty well defines the nation state called Canada. The government knows full well what is in store for the economy, and real-estate. Thus the election before the fall…..
The people in their heart of hearts know too but can not bring themselves to acknowledge the truth, so thus they remain deluded and for that matter defrauded.
Keep up the good work Garth…. Even though the truth hurts. You might save yet one more innocent from financial ruin….
Hello,
I would like to offer my help to “spread the word”. I have a “protesting” website where people can post their discontents. If we protest there (under category “housing”), we might show up as a visible group.
Garth, please remove if this is considered “spam”, and my apologies.
Regards
http://www.BeMeProtest.com
arit
Buy at 240k, sell at 80k? Wow.
Can the REIN help me calculate the ROI on that one?
No worries, I hear HGTV is sending Scott McGillivray down to Nevada on a humanitarian mission.
Basement suites for all Las Vegans…brilliant!
This story from down south…
Man jailed for taking 2 liars loans
Still no mortgage CEO’s in jail yet!
A few weeks ago, when the Justice Department decided not to prosecute Angelo Mozilo, the former chief executive of Countrywide, I wrote a column lamenting the fact that none of the big fish were likely to go to prison for their roles in the financial crisis.
Soon after that column ran, I received an e-mail from a man named Richard Engle, who informed me that I was wrong. There was, in fact, someone behind bars for what he’d supposedly done during the subprime bubble. It was his 48-year-old son, Charlie.
On Valentine’s Day, the elder Mr. Engle said, his son had entered a minimum-security prison in Beaver, W.Va., to begin serving a 21-month sentence for mortgage fraud. He then proceeded to tell me the tale of how federal agents nabbed his son — a tale he backed up with reams of documents and records that suggest, if nothing else, that when the federal government is truly motivated, there is no mountain it won’t move to prosecute someone it wants to nail. And it was definitely motivated to nail Charlie Engle.
http://www.nytimes.com/2011/03/26/business/26nocera.html?_r=1&emc=eta1
oh yeah…FIRST!
Hey Garth, you’re a stud! Sorry but I mean that in the most plutonic sense. I have been following you for a couple years now. I credit you with the bright future laying ahead for our young family. I am in construction and have heard the hype everyday for years now. We have been hoarding liquid assets and waiting. We rent a comfortable 3 bed in Victoria with plenty left to save and buy on the cheap. By the way 8% is easy if you have a clue what you’re doing! I realize I am in an industry with alot of downside but we are the lowest cost producer and are willing to fight through with our war chest of cash. I am willing to wait as long as it takes. This re market is likened to a junkie; it got another shot of financial heroine in 08 but this cannot continue. All the best to you and the other Blog Dogs!
Oops, my apologies, typed the wrong link for the protesting website…
http://www.bemecollective.com/protest/
Feel like a greater fool! (it’s my website LOL)
Sorry!
I assumed you were protesting yourself. — Garth
i think the Australian idea is great. I have been thinking for some time now about some sort of public action of a similar type. I don’t know enough people who would join me – they all own, but I hope someone with the wherewithal starts an action that publicizes “don’t buy now”. If it’s in the Lowermainland I’ll join. This madness has gone far enough. I recently heard of two couples with kids in Abbotsford and Burnaby who are about to declare bankruptcy… can’t keep up with the payments. Bought 3 yrs ago.
Tim #2. How do you know Van isn’t “tanking”? Don’t you know about those many units in towers all over the Lowermainland, including False Creek, that have been on the market for mths and haven’t sold even though the prices have been reduced?
For most folks housing comes down to either
a.) mobility and cash– having money left over at the end of the month and freedom to move if job or personal circumstances warrent
b.) live month to month and pray to the alter of Carney that he doesnt raise rates, or hope that fuel prices dont go past 1.50L or that property taxes dont rise, that your furnance/roof/fridge etc.. dont crap out on you. Then after you have saved your $, one of those end up crapping out and there goes your savings.
I used to be a home owner, now i rent and right now, i couldnt be happier.
The market will price out most people very soon, all these small changes (CMHC 40-35-30 y mortgage, qualifying at 5 year rate, no cmhc for non principle residents etc..) have not taken a huge effect yet because rates have stayed low.
tell me about the housing market again when rates hit 8%, and yes, they will hit 8% at some point, thats when i will be buying.
scab = greater fool
:)
With the upcoming federal election does it make any difference what party to vote for regarding the fact that we are in a financial crisis? And doing something about it?
“Investors have snapped up properties, but (like here) market rent won’t even cover the cost of carrying them.”
A friend just told me today about the newly built condo that he bought last year (pre-sale) as an investment. It is being covered by the rent. It’s in downtown Toronto.
Does it pay him a return on his invested capital or just cover expenses? — Garth
“Buyers, not sellers, set prices.”
No, they DON’T.
Not in this economy.
Not with a worthless fiat currency, a central bank counterfeiting REAL money and value daily to abort market-determined interest rates and CMHC removing all risk for lenders…
Not with our massively over-regulated economy. Not with a plethora of zoning laws, property tax-desperate governments, building codes, land-use restrictions, prevailing wage laws, HST and sundry economic meddling restricting the ability to build…
You don’t een NEED the pumping real estate industry or HGTV.
You just need TONS of borrowed/printed “money” at artificially tempting rates, an government-created housing shortage and a public not afraid of losing their jobs.
Then the sellers have the edge…
Nice rant. But in the real world, buyers set prices. — Garth
Nice rant. But in the real world, buyers set prices. — Garth
Point is, this ISN’T the real world…
The fact that sentiment is so low regarding owning real estate in the US is an extremely bullish sign, so I’m not sure what Garth’s point is with these articles.
Garth considers himself a financial expert (which maybe he is) but if so he should clearly know that markets typically do the opposite of what sentiment would suggest.
In 2009 they polled DOW investors and literally 100% we’re negative, this turned out to be the bottom.
Right now for those who are interested the sentiment is something like 80% positive.
Pretty ominous indicator if you ask me, may pick up some 6 month vix puts this week for insurance on my gains this year (which blow Garth’s 8% out of the water btw… and yes they are risk adjusted returns Garth, would you like the Sharpe and Treynor ratios?)
Residential real estate is a 100% consumer-fed market. Sentiment is all that matters. Stocks are dominated by institutional interests, and consumer sentiment only shows retail investors know squat. — Garth
It pisses me off royally that I would be mortgage free if not for the greedy, monopolistic home builders in Calgary.
Put it this way, I know a certain owner of a home builder that has over 100 mil, don’t you think SOME of that could go to making houses more affordable in this god forsaken city? Hell no, greed, greed. .. Gone are the days of building your own house on the cheap, no they want you in deep debt for the rest of your life. Oh yeah, also with a shit small yard that the kids can’t even run around in. And they just keep buying!!
Get the F out while you still can!
Aha! The Aussie youth (-or thirtysomething) is mobilizing. And here in Canuckistan, I’m still pulling the Cassandra-thing (in the most non-transsexual way possible) and warning anyone who would listen that the real estate sky is falling.. No one is paying attention.
Here’s an example.
I’m working with a guy who is losing 800 bucks a month in equity on his Edmonton townhouse, and he told me only last Thursday that renting is for losers…
He’s 50 with no savings and no equity in a townhouse he bought ten years ago because he borrowed against it- with maxxed out credit cards and HELOCs, and he’s telling me that renting is for…
Aaah! I feel like I’m taking crazy pills (!!!) I think, instead of a passionate diatribe on the dangers of real estate, instead of lending out Garth’s book, instead of pointing to the website, instead of trying to convince people how intensely insane this all is, I’m going to simply tell them:
EAT SNACKY SMORES.
first, maybe not. But all in all RE will be going higher as banks keep dropping rates, Carney holds rate hikes and governments all over Canada start giving out incentives to new buyers. But have no fear, jesus loves you all regardless if you rent or own.
I’m still counting on the pups for their votes for PM, I promise to replace C with Garth at the BoC if I win.
VOTE MIKEY!!!
Why doesn’t someone just start up the
“Bubble Pricing” campaign again?
That really seemed upset the RE industry last time it started.
Response to #2 Tim:
We can’t elect Ignatief – his eye brows are too big
WOW…. after 20 minutes of googlin’ Australia’s mortgage market I came up with this.
The cheapest mortgage rate is a variable @ 6.83%, fixed are higher. Going to 9.5% by 2013.
http://www.yourmortgage.com.au/top-products/default.aspx
There is no Government mortgage insurance, only private. Genworth, PMI and few others. http://www.mortgageinsuranceaustralia.com.au/
The rental vacancy rate is under 2% in most major centers.
This report on the future of Aussie real estate market. Average price increase in the next 3 years is average 20%.
http://xdmin.qbelmi.com.au/Uploads/Documents/34b5259a-8905-4945-904d-3fdada46670c.pdf
A “buyers strike” will accomplish exactly the same as the “earth hour” and other such nonsense. Just like bringing demand forward ends in tears, so does damning up demand. Once the strike is over, demand spikes. Raising awareness itself is a good goal, but the idea of a strike is does nothing.
http://www.theglobeandmail.com/globe-investor/investment-ideas/features/taking-stock/market-rally-or-false-spring-derivatives-could-hold-the-answer/article1958724/
This is exactly the behaviour that we have not fixed since 2008 disaster and yet the “best and brightest” bankers with their deserving bonuses continue to pass through the packaged risk in other creative forms to all lowly hacks and it will blow again. And no bankers will go to jail but will have “earned” great bonuses.
I am simply amazed as I watch this continue to unfold. Still higher RE prices and the behaviour of F, H & C to keep this thing pumped up and pushing higher which has worked quite well for these past several years. Emergency rates of 0% for years with nowhere to go for further stimulus, recovery in terms of “equivalent jobs” still far off (yes, even in Canada) and yet MSM still pumps real estate with rising income projections. No bond ogres demanding higher rates after net negative returns in the USA. When will ogre bondholders demand anything for their money? There must be more than US as a place of safe harbour when US debt is almost unpayable unless it’s inflated away very, very carefully. Of course, they can carefully do it with war arsenal and silicon valley/garage inventor entrepreneurial spirit behind them. As they say, don’t bet against the USA.
@#2 Tim
Have you ever considered that it’s the social left that its more likely to inflate a housing bubble. They would love to make owning a house a right for every one.
#2 Tim
“Then why hasn’t Vancouver tanked? Or even corrected by ten percent?”
———————————————————-
Vancouver is in the mania stage right now.
You know a good mania by the kinds of sales taking place. Like, for example, the shack near Lacarno that sold for over two million dollars last week. That means the end is nigh and when the rubber band snaps back it is going to break more than just necks.
I can hear the wailing and gnashing of teeth already. Lucky for most of the politicians out campaigning now the real estate correction (tragedy?) about to unfold will happen after the election rather that before one was called.
I’ve been on strike so long I’ve basically given up owning a house in this city (Vancouver). Things look bad, the media keeps hyping on about these mainland chinese coming over and buying up every overpriced property on the market (well, not quite, says the lonely realtor who’s been hanging around my building for the past 3 weekends). Screw this! I say! Who cares about owning a house anyway? I have a place to live and savings in the bank, so who cares. (Of course the inlaws think I’m a big loser for not buying, but who will be a bigger loser when rates go up and no one can afford that $800k mortgage anymore?)
Oddly enough, the house horny virgins who buy now and lose their 5% downpayment may not be the worst hit in the meltdown. They have only a few actual $$ at risk and can declare bankrupcy and still be young enough to recover from it with few ill effects other than a massive amount of hard gained experience.
The middle-aged late-boomers to oldest gen-X’ers will get creamed the most as they will be the ones with the most real $$ on the table when it goes south and the fewest years left to recover. They may not have to declare bankruptcy, but losing large chunks of your own money is far more painful than losing large chunks of the banks money.
Time will not heal all wounds.
#2 Tim
Take a chill pill. Vancouver is not the only lofty Canadian market.
And the political thread is in yesterday’s blog.
#4 S.B.
“Since the first of the year, only 5 condos have sold through MLS in Squamish.”
——————————————————–
Holy Macaroni! Are they having their own depression in Squamish now or what. It was never really the most attractive of communities in which to live but those numbers are a disaster. I am guessing one hell of a price correction is in the cards for that city over the next few years.
Australia first than Canada’s turn.
The sad fact is that those low interest rates and long amortization schedules could of provided our society and those that bought a firm and solid foundation. Instead the human instincts of greed and envy took over. Those that could of used the benefit were herded and will be slaughtered or at the very best be debt slaves for a very long time. Too bad that good opportunity was twisted into a few pockets. Some people won big time in a monetary sense. We all lose in the long run.
F could of reacted a lot sooner than he did. Save some people the pain but who cares about them we need to look good on the world stage. Round 2 the knockout punch will be delivered when interest rates rise. For now it seems that other than speculators the gig is up in Canada. The last 8 years will be shown to be an illusion created by debt financing and psychology. That illusion called the wealth effect. It has moved on to the stock market for now.
Another great blog Garth. Thanks!
Basement suites for all Las Vegans…brilliant!
—————————–
I think you mean Lost Wagians. Las Vegans don’t eat meat. And live in communes .
Speaking of reverting to the mean; I guess we are going back to rich land barron’s who own all the land and the rest of us who sharecrop the land.
Clearly, Garth you’re getting desperate having to look offshore to find a real estate ready to burst cause Canada’s is just not co-operating with your predictions.
Australia’s woes are due to the unfortunate Japanese disaster.
No, I don’t work for Re-Max or sell real estate.
I do appreciate your take on our Canadian government’s bad antics. I’d vote for you in my riding in a NY second.
Been on strike for a while too. Too bad about the billionaire scabs from China. They just keep busing them in.
To:#11 Al on 03.27.11 at 10:42 pm
Australia & Canada – both commodity based economies whose real estate markets will only tank after the RE market in China tanks.
Do you really believe that Al? Or are you just hoping?
The price run up is over. Has been for quite a while. Time to go the other way now.
To:#23 InvestX on 03.27.11 at 11:21 pm
“Investors have snapped up properties, but (like here) market rent won’t even cover the cost of carrying them.”
A friend just told me today about the newly built condo that he bought last year (pre-sale) as an investment. It is being covered by the rent. It’s in downtown Toronto.
Does it pay him a return on his invested capital or just cover expenses? — Garth
It is not build and occupied yet if he bought it last year as a pre sale. They do not throw them up that quick.
My house is merely a place to live. Fortunately I purchased when the prices were at the “historic” affordable levels. Plus, it is nearly paid for. Regardless, it is still just a “place to live”. I feel sorry for those that are forced to sell now, and even more remorse for those that are purchasing now!!
The difficulty is that houses are an emotional decision, yet they are inanimate, and expensive, objects.
Haters gotta hate.
–
A home buyer’s strike, coupled with a fed-up taxpayer’s strike would go a long way in getting rid of these dumbass dimwits, who promise the earth, only to flat-out lie a day later.
“Strike! Hic.” — Overly imbibed a little? Go lie down on a fiery ant’s nest Garth, and see what you can dig up!
*
Interesting 50K mfg. jobs lost every month since 2001. Wonder if 9-11, an inside pre-planned job, had anything to do with it?
Tsunami of Inflation via Japan.
Freak Out, one of Frank Zappa’s first albums, is not the same as this stock market freak out. St. Louis Fed chart in.
The Toilet The NWO al-Qaeda paid rebels without a clue are taking control of Libyan oilfields. Libya Yet another reason for this illegal and unjustified invasion.
4:17 clip Hubble shots of Deep Space 25. The gods must be laughing hysterically at the mess we’ve put ourselves in.
IMF — Infernal Mother F(&^%&&*(s Adios, American taxpayers.
‘HAARP and ‘Quake “They who caused Mayanmar’s mayhem have planned National Level Exercise 2011 for mid-May. At its core is a catastrophic U.S. earthquake.” Plus Setup for a False Flag? The USS Enterprise. If one happens on one side of the world, the other can take place quietly, with no one knowing (or not paying attention). 1:13 clip Everett, Wash. ‘Quake time here soon?
Stress Tests for Ireland. Interesting to note the first vote by the Irish people, they rejected the EU overtures so Sarkozy, in his dictatorial wisdom, forced them to redo it, thus putting them at the mercy of the IMF.
Impeachment North American govts., fed., prov. and state should be impeached and tossed out. Unfortunately, ain’t gonna happen any time soon.
1:25:01 clip Rise and fall of the US$, and Riots In a place near you.
My vote will go to the ones who are against killing others (in Afghanistan, Libya or anywhere).
Having said that, I hope Mr. Harper’s Conservatives get another minority, just so he can deal with the aftermath and face the citizens marching towards Parliament Hill, when Canada’s economy and real estate market, just like the rest of the world, blows up shortly due to his party’s corporate and banking bailouts, stimulus spending and their resulting massive deficit.
#2 Tim: “Then why hasn’t Vancouver tanked? Or even corrected by ten percent?”
Because buyers believe high appreciation will continue, which becomes self-reinforcing until a price ceiling is hit and the bubble pops. The market started to correct until interest rates were lowered to nothing and fools focused on monthly costs jumped back in.
At some point the audience will get its money’s worth. No good tragedy ends without that tragic joy of self destruction. Or something like that.
#4 S.B.: “Receivership sale in Squamish BC! And so it begins…”
Historically, housing bubble prices collapse inwards, as volume and then prices fall first in the ex-urbs and suburbs before slowly making their way into the urban center.
Sales have also tanked in Langley and Abbotsford, so perhaps this is the year that the Vancouver crash truly begins. I have my popcorn ready.
A very timely article! Yes, Get Up is running two campaigns, one to end negative gearing and another calling for a First Home Buyers strike. The FHB strike is already at Number 1 position in the Get Up table and the campaign to end NG is not far behind. You can find full details on how to join in and vote for these campaigns at the link below on the Australian Property Forum:
http://australianpropertyforum.com/topic/8506527
If these campaigns work as planned, house prices will surely fall to sensible levels whereby decent hardworking Australian families can once again afford a home. If we take out the bottom rung (FHBs) then the whole pyramid scheme that is Australian property will collapse! So don’t accept this talk of FHBs being priced out. Do something about it. Get on board, join in the discussion at AustralianPropertyForum.com, and get your votes in to the Get Up campaign right now! Priced out? Not for much longer if we all stand together!
Max Carnage.
AustralianPropertyForum.com
Our generation is getting screwed we have 2 options:
1. Buy in become debt slaves for the next quarter century.
2. Throw money away on rent and build no equity.
Guess I can keep praying for a correction and dream about buying a house at 2.5 times income. Oh what a dream.
Sometimes you don’t even need a strike, just wait for the idiots to build themselves into oblivion.
http://tasmanianrealestatetrouble.blogspot.com/2011/03/construction.html
And listings are at their highest point in Australia since 2008 and here’s some more fun, buyers waiting for the bottom to fall out completely on the Gold Coast
http://www.youtube.com/watch?v=DGCZ-_4Xs4E
Welcome to Australia!!
http://nfbpsh.blogspot.com/2011/01/home-ownership-getting-tougher.html
In 1975 only 24% of average income was needed to service a typical Australian mortgage. This was with a prevailing interest rate of 10.38%———
By 1985 it was still steady at 24% of average income needed to service despite interest rates soaring to 13.5%——–
By 1990 Interest rates went to 16% plus but you still only had to use 34% of average income to service a mortgage.——–
By 1995 you needed to use 29% of average income to service a mortgage (10.5% Interest rate)——–
By 2005 it had soared to 40% (7.3% Interest Rate)——-
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??? ——–How will anyone pay for it? —–
Historically interest rates have averaged 10.11% over the past 30% —- 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 7 will fall shortly!!!
Yes and that recovery in the USA is going swimmingly….
“It is also time to get real. The fact is, we are now in a housing market depression. Almost every economic recovery in this nation’s history has been started part and parcel with a recovery in the housing industry. That is not happening at this time. Just the opposite, Housing is disintegrating into the Great Housing Depression. Check out these numbers: First of all, housing prices have fallen 26 percent since their peak a few years ago, the largest price decline ever in our nation, worse than what occurred during the Great Depression of the 1930’s. We just learned this week that New Home Sales fell 17 percent month over month in February 2011 versus January 2011. The gross number of New Home Sales in February 2011 annualizes to 250,000, which is the worst on record, ever. This number is less than half the number of sales in 1963, which saw 560,000 New Home sales – but with 120 million fewer people then than now live in the U.S. Think about that. February’s number is abysmal. Families dependent upon the Housing Industry are headed for economic ruination. The construction industry is going to see a ton of small builders go belly up. When we consider the February 250,000 sales figure, we need to understand that 700,000 annual sales is normal for a healthy economy. Up to this point, the worst sales year ever still had 323,000 New Home sales. This February’s figure is dreadful. Banks have tightened lending standards, making it so difficult to qualify for a mortgage that a third of all sales are now 100 percent cash deals. In other words, a third of all sales are occurring without a bank. Collateral values are sinking. Short sales are rising. Foreclosures are a predominant percentage of current sales. This is a spiraling black hole of coming economic devastation, a contagion that will spread throughout the entire economy (except of course the protected Wall Street folks, who get to enjoy the Fed’s fraud on America, taking all the liquidity the Fed can print and trading markets with the printed cash for self-gain, a corruption right up there with Nero fiddling while Rome burned). Existing Home Sales were no better, falling 10 percent in February, with prices plunging on existing homes that get sold. All the above will contribute toward significant increases in the value of precious metals as folks flock to a financial instrument that has no counterparty, is real and physical, and not subject to corporate mismanagement.”
http://www.gold-eagle.com/editorials_08/mchugh032411.html
#26Western-What you are missing is that broke, unemployed persons do not usually have buying a house as priority number one. The USA MSM has effectively distorted the reality of what is actually happening at the median level of the population. The official unemployment rate is a farce-the actual workforce is shrinking even as the population grows.
dear mr gard,
there aint no real estate correction goin on in the near future, til rates hike alot higher. in addition my cousin just got an open variable closed mortgage at 2.35% for his condo downtown toronto 500k.
http://www.hsbc.ca/1/2/en/home/home
if anyone thinks otherwise then you are the greater fools around:
property 500k
25k down
475k at 2.35% =1800$ +500$maintnance
total 2300$ a month
http://www.hsbc.ca/1/2/en/home/home
so ladies and gents, there is is still alot of money to be made in real estate market.
thank you
p.s.: i love the blog but nothing happening anytime soon
Young kids in Sydney have definitely tuned out of housing lately. They are more interested in traveling with the advantage of the strong Aussie dollar or going to music festivals and getting off their chops.
cute website!
“Oops, my apologies, typed the wrong link for the protesting website…
http://www.bemecollective.com/protest/
Feel like a greater fool! (it’s my website LOL)
Sorry!”
Harper was given a rock star’s welcome in Burnaby today. That did not warm my heart much.
But the PM is a crafty fellow. He complains bitterly about this unnecessary election foisted upon him by the vile coalition of socialists, centralists and separatists but he secretly relishes the opportunity to shoot for a majority. If he gets one, then bully for him. If not, the likely outcome is another Conservative minority. At that point he can convincingly blame the entire waste of effort on everyone else and still come out smelling like a rose.
In any event, from a conservative point of view, now is a great time to get an election over with since some nasty economic realities are likely coming home to roost in the fall. I don’t care for the man much, but really, he must have quite a set of knackers to be managing a straight face at the moment.
Great to see the Aussie reference today Garth. Of course some here in the RE sector claim this to be very irresponsible action, claiming that many of those on strike will never be able to buy a home (you know, buy now or be priced out forever because houses can only ever go up). Of course none of them stop and think that this was thinking in just about every other bubbled market until they are faced with reality. Houses are shelter, prices are influenced by emotion and credit but value is driven by wages (rental return).
Aussie Update
KAVANAGH-PUTLAND INDEX: AN UPDATE (Aussie Shiller)
http://thedepression.org.au/?p=5665
Auction clearance rates continue to fall.
http://smh.domain.com.au/real-estate-news/hammer-time-for-powerhouse-inner-west-20110325-1ca0m.html
Nice to see a link to your site today on several NON delusional house sites in Oz.
http://www.bubblepedia.net.au/tiki-index.php (Garth does Australia)
I remember when things were looking like this recession was going to be a quick and painless one (at least the owner of the company I worked for thought it would). However, being one of the faithful that flocks to this website to take in point after point after point of why this is going to be a long and painful correction I vividly recall one of my former co-workers and his words about buying.
‘Dude, buy a house now, interest rates are so low.’
‘I know, and that is why I won’t get into it now.’
I have not directly asked him how things are financially but last I think I was able to glean things were not that good. I know he was trying to come up with ways of to buy out his family members that helped them buy their current house.
There is one thing I am thankful for, my wife has not bothered me about not owning a house. We talk about it but she is aware of how much we are saving.
What I always find interesting is the argument of how much more money we will have if we buy now (at highly inflated rates) but I have to always ask how much will interest payments suck out of me when I have to sell. This is all based on assumptions that I can still live in Calgary and sell when prices will be advantageous to me.
This will be a very sad point in time worldwide and I know Canada will not be an exception to this.
InvestX: “A friend just told me today about the newly built condo that he bought last year (pre-sale) as an investment. It is being covered by the rent. It’s in downtown Toronto.”
Does it pay him a return on his invested capital or just cover expenses? — Garth
Even if it just covers expenses (monthly mortgage payments/insurance/property taxes, etc), someone else is paying for the investment, which is pretty good. I would love it if someone was paying for my equity (stock) purchases.
all the smug Canadians better hope the correction comes soon here. We don’t want to be lagging the U.S too much. The U.S is in the gutter. Slowly but surely, personal debt levels will fall, savings will rise, and there will be a general improvement in their economy. With that I’d imagine would bring higher interest rates in the U.S. Higher rates would strengthen the USD.
What happens if there’s strength in the U.S but Canada is in the gutter? This is what I’m expecting. What will it do to our importing costs when the rest of the world is in recovery mode but we’re still binging?
We face a tough situation. Higher rates right now clobbers the housing market, but this long delay in our necessary correction like the rest of the world is going through will probably hurt our currency a few years down the road.
Pick your poison.
HALLELUJAH! You are preachin’ to the choir!
I live in Sydney (previously in Canada) and let me tell you it is outrageous how expensive real estate is here (although rents are very high too). Absolutely incredible. A 1-bedroom that would go for, say (a still high-priced), $260,000 in the GTA would be about $440,000 here, or more and not as close to the downtown at that price as it would be in Toronto.
Houses (except those in the Sydney equivalents of Oshawa, Newmarket and Burlington) are few and far between under $700,000 and most you’d want to live in are in excess of $800,000, with many more than a million (and those are without a spectacular view or proximity to a beach — just average 3-bedroom terrace houses).
I make good money here and I for one won’t be throwing it away on real estate either… so sign me up for the buyer’s strike.
Oh, and not to detract from Garth’s excellent advice re investing properly, but even the most risk averse person can get 6.5% interest on a bank deposit here… and the yields on rental housing for investors are lower than that (and, as mentioned in the article, an enourmous number of ‘investors’ are losing money each and every month, but they think it’s okay because they can apply the loss against their income tax, so they’re really only losing 70% of every dollar they lose. But, personally, I think 70% of the hundreds of dollars they lose each month (not to mention the opportunity cost of investing it properly) is still a heck of a lot to lose.
When will people learn?
Garth, in the first few lines, I knew where you were talking about. It is so bad here in Sydney that my Canadian partner and I think Toronto looks cheap, even at inflated prices.
I live in the only part of Sydney supposedly still booming according to the MSM, and everyone I know is wanting to cash out. Every third house in my street has been on sale in the last 12 months and my entire building of 14 apartments has turned over 10 in the last 2 years.
Having said that, my mate from work is selling and the agents are telling him that buyers are cagey and willing to hold out.
If another fresh faced idiot at work tells me that they have to get into the market or be locked out forever, I’ll lose the ability to smile and walk away …
I sold my house in sydney for usd$910k 15mths ago and have never been happier. Renting after paying off debts including credit cards and got the capital gain in the bank @ 6.5% interest p.a. on call.
I have zero worries about RE and its a blessing!!!! Happy to rent as long as i want. I see the light now. Its all a scam between the RE institutions, govt, MSM and the banks.
I know this smacks of paranoia but is it possible that this government is inflating the bubble on purpose in order to create a crisis? See http://www.marketwatch.com/story/new-civil-war-erupts-led-by-super-rich-gop-2011-03-22
RE permabulls plot to keep this (first home owners boycott campaign) off Wikipedia. Why are they worried?. Eveyone knows there is no house price bubble in Australia. LOL
Interesting article title
“Left wing political group orchestrating home buyers strike.”
http://www.somersoft.com/forums/showthread.php?t=69876
Left wing political group orchestrating home buyers strike…
Hi Guys,
Thought I’d draw this to everyones attention, the Leftie group GetUp! has finally had enough of renting so they are attempting to bring down property prices through an organized property boycott.
http://suggest.getup.org.au/forums/6…-buyers-strike
Also they tried to add their campaign to this page but I’ve removed it, does anyone know more about Wikipedia rules to stop this being added (its blatant self promotion of their own cause and not relevent to the page but not sure which Wikipedia rules this breaks?)
http://en.wikipedia.org/wiki/Australian_property_bubble
http://en.wikipedia.org/w/index.php?…action=history
Hopefully this crap doesn’t hit the newspapers but knowing The Age in Melbourne it will probably be front page next week…
Click on link below article headline and read some of the comments.
All goods (services)are worth what the next buyer will pay for it. Buyers set prices going up and when going down. Any new perceived fact (real or false) will change the next buyers offer. Who determines the next price of land in northern Japan? The seller or the buyer. The next price is determined by the next REACTIVE buyers.
When the gov’s fiat currency dies, (average life span of 40 yrs) (present international fiat created by Nixon in 1971) fiat credit will cease to exit. This fact will influence the next buyers offering. Sellers beware.
N.B. Our present international currency has reached its Past Due date. Fiat currency holders beware.
As far as explaining the insanity in Australia, you only need 2 words: Negative Gearing
Something like 15%-20% of all taxpayers in Australia now claim rental income! (it was 13.5% in 2007)
But – the percentage of landlords claiming rental losses is 70 percent!
http://www.ibtimes.com/articles/44304/20100820/australia-real-estate-bubble-landlord.htm
Sounds a bit like the hoards of Americans buying “investment properties” in Florida/Arizona before the crash, or all of the basement suites in Vancouver right now – don’t ya think?
http://www.theredpin.com/blog/canada/canada-mortgages/are-you-ready-to-purchase
“The key is to be prepared, and team up with trustworthy professionals.” Trustworthy indeed, wow.
#41 Utopia on 03.28.11 at 12:12 am, Squamish only is about ~1/2 hour drive north of Vancouver.
This Squamish RE crisis is too close for comfort for Vancoverites, I bet. Is Squmish a RE tremor, ahead of the “Big One” in Van?
Every once in awhile I veer off the topic of real estate and go to the realm of one of this sites other theme categories which Garth has labelled “The Road Ahead”.
Today is one of those days and so I just want to touch on a topic that is so important we can no longer ignore it anymore. This issue has ramifications that suggest the eventual collapse of society itself and hopefully Garth will permit me to post this message today.
Let me explain.
In the latter part of the 1800’s a novel new chemical was developed and it was called DDT. This synthetic chemicals true calling and use was not realized though until sometime around the Second world war when a Swiss chemist named Paul Hermann Meuller first discovered it’s properties as an effective insecticide. He won the Nobel prize for his efforts.
The chemical found widespread use in agriculture and for decades was one of the major means of pest control on crops. But our birds of prey were dying off in America as a result and there were strong suspicions that agricultural chemicals were to blame.
Evidence slowly mounted over a period of years to prove that the thin crumbly shells of eggs layed by Eagles and other raptors highest up on the food chain were the result of DDT contamination. A decade of environmental activism armed with a growing body of scientific studies led to significant political pressures before the chemical was finally (and permanently) banned from use in the United States.
And just in the nick of time too. The Peregrine Falcon, as a result of DDT poisoning that was accumulating in the birds bodies, had come within a feather of joining the list of extinct birds in North America. In California, the numbers of Peregrines known to exist barely exceeded 10 nesting pairs in the year of the ban. The American Eagle itself was on the endangered list and a long list of predator raptors were close to joining the chorus of the condemned. The year was 1972.
Flash forward to today. The new enemy is also an insecticide. This time it has a much more ominous overtone though because this time the ultimate victim at the top of the food chain is you and I and the endgame and outcome may well suggest a collapse of society itself.
No, we will not be poisoned directly by this chemical but we could face serious food shortages and the loss of critical crops that will spell the end of the good times as we now know them. I only wish this was a joke. Most of you likely have no idea how close we already are to a cataclysmic failure of agricultural production brought on by the misuse of these chemicals. Judge for yourselves and read on.
The name of this chemical is a little more complicated this time around and the victims are not nearly so warm and cuddly to most people but the outcome of its use could potentially prove to be lethal to all. Commercially, this product is called Clothianidin. It is known as a neonicotinoid to farm guys and gals and it specializes in killing bugs on crops.
The victims unfortunately, mere insects to most people, are also the primary commercial means of pollination for food production around the globe and are responsible for more than 30% of all the foods we eat. I am talking about bees of course. And they are dying off in such staggering numbers each and every year all around the world that the global food chain is now seriously compromised.
Just two months back we received the results in Saskatchewan for the winter mortality of the year 2009/2010 and the outcomes were not good. Better than in the last few years but still dismal. Over 20% of all bee colonies had not survived over-wintering. We did well. On Vancouver Island almost 70% of all hive colonies failed to survive until spring. The Maritimes posted similarly dismal results.
As some of you will recall, I have mentioned in the past that I typically keep one or two hives as a hobbyist in order to supply my own needs for honey. I know a few beekeepers as a result and the news they are giving me is not positive.
One fellow in particular has just this past week informed me he was no longer keeping bees for honey production. He related that he had suffered a near complete and total loss of all his hives two years ago. I was shocked because I knew he was a serious full time beekeeper with hundreds of hives.
This guy loved his work. He related how the end came about as all but a dozen of his hives were dead when he opened them up for the spring season and that it was over. He was wiped out. The business finished. There was no way he had the extra resources on hand to buy packaged bees out of Australia or New Zealand at 140 dollars per colony to repopulate hundreds of dead hives.
Being a stand up kind of guy he is not prepared to blame Bayer Crop sciences (the patent holder) for his losses either. He knows his bees died off suspiciously and suspects neonicotinoid pesticides which are used extensively on prairie canola fields are the root cause that weakened his colonies and allowed mites and other infection to overcome his bees but he is just not prepared to go on the record that Clothianidin is the cause.
He is just not certain and says point blank he does not know what the problem is. That is the consensus amongst the beekeepers I talked to who are also reluctant to point fingers without hard data. It does not help that this group has no federal or provincial representation with any muscle to back them up or help fund solutions to their problems.
Others are not so shy though. They are blaming Bayer directly and demanding research to back up the claims that bees are being decimated by the extreme toxicity of this new insecticide.
My friend does not think it a coincidence that the advent of the widespread use of Clothianidin on Canola crops and the collapse of his honey bee population were linked in time. His practices had not changed over the many, many years he was in business but something in the environment did. But what?
The problem seems to be that this new class of insecticides are just too good. Too affordable and effective too. That is cold comfort to beekeepers across the country and around the globe who are now the casualties of this new chemical regime and who are folding up their operations as the extremely high losses of colonies renders their business insolvent.
They simply cannot sustain regular bee population declines of 30, 40 and 50 percent annually and still remain viable. No bees means no honey. No honey means no beekeepers. No beekeepers means no bee business and that therefore spells disaster for crops dependant on the industry for pollination.
What few people realize or even consider is that most beekeeping operations are small family run businesses where the trade is passed on from father to son. These are not deep-pocketed multinational farm corporations. Just one small push and they are all gone. Just like that in a blink of an eye. Crisis time. And now that time is here.
Crops like canola, berries, nuts and almost all fruits and vegetables that people depend upon for basic sustenance and food variety could virtually disappear from store shelves in our lifetimes. No, I am not kidding.
The question I have to ask is this; will we as a population have sufficient time to mobilize our resources and efforts to prevent a global food calamity before it is too late or will we just collectively wither as the beekeeping industry falls apart before our very eyes? Time is very short now and this is about to turn into a crisis for the entire planet.
Nor does it help that the vast majority of beekeepers in this country are in their mid to late Fifties either or that few newcomers want to enter the business due to its problems and risks. Most of these older guys and gals are headed for retirement already. And nobody is coming up behind them with the capital to sustain the regular losses and stick with the business. So now the professionals themselves are headed for extinction and that is the nut of the problem. The industry itself is at risk.
And now so are we as a human population as the day of the bee becomes the day of the Dodo and true food scarcity becomes a reality. The good times we know of when fields of swollen crops were covering the prairies could soon just become another of the memories of days gone by.
Just the good old days. Like the days when we still had bees to pollinate crops and help feed the billions who populate this world of ours. Like the days when there were still beekeepers and professional custodians of the insect world.
Like the days before chemical solutions to farming damned us all in the same way DDT nearly damned the Peregrine and American Eagle to footnotes in an Audubon textbook.
Some headlines just don’t come out right.
Three cheers for the editors at the Vancouver Province!
“May urgers voters to make istory by electing a Green”
Read more: http://www.theprovince.com/news/urgers+voters+make+istory+electing+Green/4513584/story.html#ixzz1HtguVUAo
my goodness, even CNBC sees the end of the dollar as world’s reserve currency… http://www.cnbc.com/id/42250806
Being on strike by yourself was getting lonely. I hope lots of people come over to this side if they believe they have any power at all. Reading & blogging, and now doing something for change. Ya!
Thanks Garth
#36 Stefan on 03.27.11 at 11:58 pm
@#2 Tim
Have you ever considered that it’s the social left that its more likely to inflate a housing bubble. They would love to make owning a house a right for every one.
Stefan, Have you considered that we are already making houses “accessible but certainly not affordable” to all Canadians through CMHC and every support program imaginable including long term “emergency” rates? Is this not already socialist enough? Ant and grasshopper story comes to mind but grasshoppers will survive with further support when/if this thing comes tumbling down. Government intervention by Harper has been extreme.
When are you sheeple ever going to realize that it doesn’t matter which party you vote for in this stupid country? The promises never get deliver other than more and more wasteful spending so that you morons will remain subservient to the power that be.
This whole housing debacle is not any different. The goal has always been and will always be to keep you in perpetual debt publicly, privately and transfer what little of your wealth over to the maestros. Housing boom and bust is the same in equity and bond markets, it is all a controlled event, engineered and created by design as away to transfer your honest hard earned labour over. When the banks decides as a group to rein in the loans watch what happens.
I see why Garth uses the sexual innuendos in his blog, financial matter always seem to be a bore to the sheep, using sexual references will capture some of the sheeps attention but most will not heed to Mr. Turner’s warnings, they never do until they’re caught with their pants down.
Utopia….From friday….
“I think you are mixing apples and oranges though. My remarks were related to the broad actions of Government at the macro level whereas your concern is with “personal” indebtedness of individuals.”
Utopia,
I do not share your opinion of this governments broader macro economic approach. I feel most of the governments seemingly good ‘economic decisions’ are more a matter of good fortune, than any revolutionary policies. I don’t not hold to any politcal stripe, but take for example the previous governments denial of Canadian bank mergers. Perhaps if this was allowed as the current government lobbied for; the exposure to the U.S. subprime market would have been greater.
This government entered into the financial crises in far better shape than the PIGS, yet we do not find ourselves as the second ‘c’ in the BRIC acronym, do we?
Our dollar has faired well only because of U.S. instability and our commodity ‘bank’, not any particular government policy.
I don’t see losing a seat at the UN security council-(to portugal albeit) as being a sound move, as I’m sure your well aware of the economic benefits, a seat at that table can provide.
Further, the G20 summit came at a heavy cost to Canadians, without any major receprical benefit economically.
I am of the opinion that this government’s macro economic policy has yet to transpire into anything signifigant for average canadians. Success by this measure should be found in the correlations between Macro economic policy and micro economic benefit.
I just do not see this happening.
However, I do agree with you that each Canadian has to maintain fiscal responsibility. Although idle threats by the BoC to raise rates, Constant media campaigns regarding our Economic health and vitality have encouraged the ongoing debt parade by Canadians. Heck, one might even say these debts helped the government remain in power. But not much else.
Utopia…I encourage you to take a much closer look, and scrutinize this government, judge by a higher standard.
We are not thriving.
We are surviving through debt.
Hello Garth.
I’ve been on a home buying strike ever since 1983.
I’ve been avoiding feminists and homos like the plague also and that’s a good thing. All in all that makes me a good person and in the eyes of the politically correct an enemy of canada as they know it. Well to hell with them. What really counts is sound fiscal and moral policy and in recent decades such things are not always popular. My advice to people would be do not submit to bad fiscal and moral policy and practices.
Walk the straight and narrow path and don’t do anything that you can not afford at the worst of times and do not do anything that would offend God.
This is not a time to make foolish mistakes.
Steven
Wow. When I read comments like #86 I can see this blog has gone from pathetic to degenerate, and it’s probably time to buy a house.
#74 Aussie Roy,
dang those Lefties – there they go trying to mess with pure and proper capitalim again!
#86 Steven Rowlandson
Are you for real?
If so, and forgive me for saying it out loud, you sound like a prick.
That is all.
randman: talking about the FBI: And it was definitely motivated to nail Charlie Engle.
Mr. Nordlander persuaded his superiors to send an attractive female undercover agent, Ellen Burrows, to meet Mr. Engle and see if she could get him to say something incriminating.
and the case went to a jury! What a waste of time!
To Throwstone at #85….
Many thanks for your response. You have made some good points that I do agree with and I was happy you were not swearing at me today (!). I am on my way out but will get back to you this evening.
Cheers
In other, apparently unrelated, news…
[BBC] – Euro economists expect Greek default
“Greece is likely to default on its sovereign debt, according to the majority of respondents to a BBC World Service survey of European economists.
http://tinyurl.com/4ut9kez
[BBC] – Carrier HMS Ark Royal put up for auction on MoD website
“Proposals for it include turning it into a commercial heliport, a base for security personnel during the London Olympics, or a school and nightclub.”
http://tinyurl.com/4ly6uyt
would you look at that, Angela Merkel problems in Germany, Ireland debt problems, Portugal debt problems, Spain next, US troops in Afghanistan, Iraq, and now Lybia, unrest throughout the middle east in Bahrain, Yemen, Syria, Egypt, Tunisia, …
and what does the USDollar do… goes down yet again today. what a joke..
http://charts.insidestocks.com/chart.asp?sym=DXM1&data=A&jav=adv&vol=Y&divd=Y&evnt=adv&grid=Y&code=BSTK&org=stk&fix=
#78 S.B.responding to #41 Utopia…….
“Squamish only is about ~1/2 hour drive north of Vancouver”
———————————————————-
For sure. I know the area well.
The Ex and I used to travel through there almost every weekend fom home to visit relatives in the Okanagan. We would always take the old Duffy Lake Route and four by four it through the hills. Long before it was even paved.
My favourite pit stop was the Macdonalds at Squamish.
That is some amazing country and we marvelled at the sight of Anderson Lake from the the thin wedge of dirt path that clung across the top of the mountains. Makes me homesick actually.
I am a prairie guy now though. Life is good here too.
kitchener1 said: pray that Mark Carney doesn’t raise rates
we already know his thinking:
Low rates today do not necessarily mean low rates tomorrow. Risk reversals when they happen can be fierce: the greater the complacency, the more brutal the reckoning.
http://mcaf.ee/9f182
Get Real on 03.27.11 at 10:42 pm
Due to the disparity between the fundamentals and RE values in Vancouver, most people do not have any disposable income. I was trying to sell my used car and it is amazing how 7-8K dollars is unaffordable….
+++++++++++++++++++++++++++++++++
Good point. When people have to come up with even a modest amount of cash (real money) it’s surprising how few are able to. But they all seem to have the amazing ability to come up with massive amounts of debt.
Being able to borrow $$$ is not the same as having $$$.
New condo tower to launch at Yonge and Davisville, west side just north, sometime in May. $600.00 a square foot to start and around $35000.00 to $40,000.00 a parking spot. No underground walk to subway in case you were wondering.
Yes I know the builder and yes, some have already been put on hold by insiders as demand for them is insane.
So much for RE meltdown Garth.
I am so frustrated. I want this f&^%in nonsense with RE speculating to stop !!
There is a paucity of patience on this blog. — Garth
Cowboy: It pisses me off royally that I would be mortgage free if not for the greedy, monopolistic home builders in Calgary.
well cowboy the reason that you have a mortgage is because you signed it. That puts you in bed with the greedy monopolistic home builders and the bank.
I had a serious talk with my daughter last night. I told her to rent.
#23 InvestX
We’ll see how long that’s true as interest rates catch up to normal.
Just saw a CNN banner that said that 13% of all US homes are vacant. Pretty staggering number…..
Canadian companies are worried about competing globally because of a strong dollar. We should also get concerned about how we compete when our workers require such a high percentage of their wage just to keep a roof over their heads.
#26 – Not sure I understand your comment re buying 6mo VIX puts to protect your outsized gains and profit from a reversal created by overly bullish sentiment. Wouldn’t you expect equity vol to rise in a collapsing market led by real money et al reaching for SPX puts? Either you meant SPX or in my view you are a little confused.
79 Utopia Thumbs up
86 Steven Thumbs down
#86
‘Feminists and homos…” ?
Really? REALLY?
You’re a tool.
Back to RE (Calgary) — house on our street sold in under 3 weeks, 2 houses around the corner sitting at lower prices, on the market for almost a year.
Buyers will pay for value – those stale dated listings are homes that were neglected, unfinished and overpriced. Yet a year later, refuse to lower the price. But a new listing at a still higher price sells in three weeks.
I’m on strike too, and will be for the foreseeable future.
@ False Facade
41 million millionaires in China? I this for real? Please show me your source.
Garth, I enjoy your blog and looking forward to each posting.
Based on February data CMHC estimates 182k new starts in Canada, yet US starts are now estimated at 250k for 2011. US housing collapse, Canadian housing bubble…I wonder which number will move first and the most, relative to the other.
The differential between Canadian prices and US prices can not be maintained. This alone will seriously impair our competitiveness, companies will out source / locate to regions where salaries can support the housing prices and still maintain their margins.
On a political note…300mil for the election. Final result no significant change, new minority. Ignatieff – will be tossed by liberals for yet another defeat. Harper will be replaced eventually for not being able to win a majority. Layton will resign on health issues. 100 mil each to replace… at least we get something for our money.
Keep up the great work….
The exhilaration of vindication is coming Garth.
Carney’s weekend speech, the text of which is on the BofC site, makes very, very clear what he thinks needs to happen next.
Folks, the overnight interest rate is going up to “fix” what Carney believes is broken.
Do yourselves a favour and read his speech. There’s much in the actual text not repeated in the media stories. Great stuff.
>#100 kilby on 03.28.11 at 11:14 am
Just saw a CNN banner that said that 13% of all US homes are vacant. Pretty staggering number…..
Yeah, imagine that overhang and overbuilding on that scale. And somehow, people think egregious limits on developers causes bubbles.
Right on Garth – the mantra chant buyers set prices in the real world. Still don’t like you much but great post.
#79 Utopia on 03.28.11 at 8:50 am
Great post about the bees. I’ve read/watched programs about this subject and am concerned too. I have noticed a decrease in the bee pop in my garden.
Herb on 03.28.11 at 10:15 am#74 Aussie Roy,
dang those Lefties – there they go trying to mess with pure and proper capitalim again!
G’Day Herb, yeah pity they dont realise the RE sector down here isnt capitalism, its government approved taxpayer funded ponzi finance scheme.
Aussie update
Nice interview with Prof Steve Keen, of course the mortgage brokers say “no bubble here” just a decline in certain sectors – WTF. OH and dont forget the shortage of 200 thousand houses – LOL.
http://www.brokernews.com.au/tv/the-big-story-is-the-bubble-set-to-burst/82509
#48 TS
So how does he know how much he’ll rent it for? Him and the dozens other “investors” in the building. I sure hope he did not just listen to the nice lady at the sales centre.
Hi #32 wes_coast, My wife also said something to me last night as we were watching the news.
Maybe a bit on the visual image thing within reason couldn’t hurt any and a bit of teeth whitening? (just saying).
I don’t want to wake up in a “Harper government” again, and he has a makeup person, as I recall.
I know this nice dentist in Oakville at the Hopedale mall main floor, that might be able to assist quickly with whitening as he passed through, possible? (I have know idea whom he voted for. But as a Professional it shouldn’t mater anyway.)
Image & first visual impression is what the people see before paying much attention to content, if they are paying attention much at all, unfortunately.
Hey, is that a brown shirt H and his gang have on under there suits??
FYI Caution, corporate mass media filters are often off.
http://www.cpac.ca
There is a paucity of patience on this blog. — Garth
——–
Many “savers” here are just as greedy as the “spendthrifts” and they don’t see it.
Mine!
http://www.youtube.com/watch?v=Wb2Of4UEULk
I want it now!
http://www.youtube.com/watch?v=TRTkCHE1sS4
I want it all and I want it now!
http://www.youtube.com/watch?v=MStoUfrsCig
Hi #79 Utopia, Thanks for that very important news.
My vote is looking hard at the options. But Not H!
Garth to Bigrider – ” There is a paucity of patience on this blog”
Agreed. Always been a weakness of mine. Seems to be as well for many others here.
#90
45NORTH
Yeah…I wonder if the same witch hunt is coming to
Canada?
All you speculators and mortgage fudgers…beware of being approached by an attractive woman!
WHAT SURPRISE?
So Americans were hot to buy when houses were at the peak and fear to buy at 50% to 70% lower? This is no surprise.
Most people are wired to buy high and sell low.
Those few of us that are confident enough to go against the tide (bought stocks in Spring 2009 – refusing to buy a house in 2011 in Canada, looking to the U.S. if we need a retirement place there) will share the spoils.
Thank goodness for all the sheeple that drive prices up too high and then down too low providing these opportunities to those few of us who can think for ourselves! Their whining about lost investments becomes tiring however.
New condo tower to launch at Yonge and Davisville, west side just north, sometime in May. $600.00 a square foot to start and around $35000.00 to $40,000.00 a parking spot. No underground walk to subway in case you were wondering
Yes I know the sales person and from what I understand sales have been very “weak” . New and re-sales continue to be weak as buyers dry up. Garth is right and realtors do not want people to understand that BUYERS set the prices not the seller.
#86 Steven Rowlandson- I guess you don’t vote then cause no candidate/party would meet your high standards of ‘sound fiscal and moral policy’.
“As this blog’s pointed out, the tiniest of real estate corrections is enough to throw tens of thousands of unsuspecting young homeowners into negative equity. Worse, a protracted housing slump (and it’s coming) would erase their savings, destroy their financial futures and saddle them with debt without the prospect of equity. In short, way worse than rent.”
Visiting with a friend this weekend and this is what she said:
My foundation crumbled in and it cost: $20,000 to fix
Then My furnace went: $5,000 to fix
Original Mortgage: $210,000
Current Owing: 180,000
Current assessed value: 160,000
Equity gone, Savings gone- I’d say the bubble has burst and I’m sure there are many similar stories as yet untold.
Oh yeah, and she found out that the place is 10 years older than she was originally told…she looked around my rental and asked “How much is the rent?-oh i”m sooo jealous?” (not kidding)
#61 martin – “open variable closed mortgage” at 2.35% hmmm, interesting sounds like a teaser rate to me, but our banks are different than down south, so it can’t be… did he get the 2% cash back as well… :)
including ~+400 in taxes every month? so he’s in at about $2700… sadly about 353 properties for rent downtown right now, majority on the lower end of 2k/mth….
(But he must be doing well for himself making close to 108K/yr (house cost should be 30% of your income)… I commend him, better than your average bear)
I think it looks like some hurt headed his way if he calculates based on a closed 5yr rate or 7yr rate offered (both by HSBC)
5yr @5.440- 2661.15 + 580 + 440 = ~3500 (3% increase per year, ps if its a new condo, those fees are usually a teaser as well)
7yr @6.300- 2915.05 + 620 + 440 ~4000k a month
or even ~3500 at 8%… (considering previous Australian reference of rates going to +9% down-under)
about a 30% salary increase needed by year 5…
but things wont change… different up here…
Garth, I know you’ve given up warning the peeps, just had to work out this scenario over lunch, makes the bagged lunch go down just a little easier…
Moneta: Elmo in Grouchland: it’s Michael Ignatieff!
Loonie makes gains against greenback after hints of interest rate hike
Monday March 28, 2011, 12:20 pm
By Sunny Freeman, The Canadian Press
TORONTO – The Canadian dollar made strides against the U.S. greenback Monday after Canada’s central banker warned on the weekend of inflationary concerns, suggesting that interest rates may not be on hold much past this spring’s federal election.
The loonie gained 0.67 of a cent to 102.53 cents US although the U.S. dollar remained well-supported by signs the Federal Reserve may also raise interest rates sooner than anticipated.
The loonie’s rise came even as commodity prices backed off. Oil prices fell 69 cents to US$104.71 a barrel on the New York Mercantile Exchange. The April gold contract fell $3.40 to US$1,422.80 an ounce on the Nymex, while the May copper contract lost seven cents to $4.35 a pound.
Over the weekend, Bank of Canada governor Mark Carney told a meeting of Western Hemisphere finance ministers that sustained growth in emerging economies means high commodity prices are expected to stick around for a long time.
“Everything else being equal, higher commodity prices usually necessitate higher policy rates,” he said.
Bob Tebbutt, vice-president of Peregrine Financial Group Canada Inc., noted that it is odd that the loonie is much stronger despite a rising U.S. dollar and weaker commodity prices.
“Possibly strong because of the governor of the Bank of Canada stating that the commodity price boom will continue for an extended period and is urging his counterparts in other countries to move quickly on raising interest rates to counter the rise in commodity prices,” he said.
“This is being thought as an indication that he is ready to raise rates in Canada again.”
Meanwhile, a federal election was called for May 2. Traders don’t expect the federal election to have an effect on the market or the loonie. For one thing, polls show the Conservatives have a very good chance of forming the next government.
The next scheduled announcement on interest rates from the Bank of Canada is April 12 and the central bank isn’t expected to move on raising the rate from the current one per cent. Another announcement is schedule for May 31, after the election.
Meanwhile, the Canadian dollar could also find lift on Thursday when Statistics Canada releases gross domestic product figures for January. Economists expect the economy grew by 0.5 per cent, the same as the previous month. Such a move would be the fourth straight month of accelerating activity.
On Tuesday, Ontario Finance Minister Dwight Duncan will deliver that province’s budget.
The Canadian dollar edged up 0.3 per cent last week despite a slight, late-week dip.
–
#2 Tim and #32 wes_coast — “We can’t elect Ignatief – his eye brows are too big”
Like this?
#56 Brad — “2. Throw money away on rent and build no equity.”
Respectfully disagree, as any extra money, from not paying maintenance fees / costs, mtge. expenses can be used to open TFSAs, then follow Garth’s and Warren Buffet’s advice — Buy low (five cents per share or thereabouts), sell high (between $8-$15 per share), put tax-free gains into a non-registered account with monthly payouts.
#75 Seller Beware — “N.B. Our present international currency has reached its Past Due date. Fiat currency holders beware.”
Everything runs its’ course, including fiat currencies. Time for new ideas when NAmerica defaults, Helicopter Ben and compadres fly off to greener pastures?
Gold and Silver may play a role, but until central banks lose their grip on power, which they will, we have to live with fiat currencies until then.
*
Obama Via Soros and TPTB, boomers’ retirements are in the dumpster. So much for ‘Change is Good’.
Fukushima May be about to blow up, and Meltdown.
Sure … a strike. Alwalys works.
#82 Scare Crow (yesterday)
Get back to your day job cleaning toilets with your tongue!
Maxamillion – I wouldn’t dare take away your mom’s only source of income buddy!! – she’s gotta support you while you still live in her basement –
(lol…that was way to easy – Sorry Garth, but I had to meet the challenge)
#86 Steven Rowlandson
When you post crap like that you kind of ruin your opportunity to be heard and to be taken seriously.
#97 bigrider
…So much for RE meltdown Garth.
I am so frustrated. I want this f&^%in nonsense with RE speculating to stop !!…
Stop crying. Put your money down already.
Now who was it that that said. Increased stock on market with less buyers then a slow melt in prices with rising default rates. ????
http://news.domain.com.au/domain/home-investor-centre/soaring-stock-nears-record-high-20110328-1cckv.html
http://www.couriermail.com.au/property/values-dip-as-first-home-buyers-lost/story-e6frequ6-1226029377101
http://www.news.com.au/money/property/shock-rise-in-mortgage-default-cases/story-e6frfmd0-1226029350473
But it can all be fixed if the banks could just get some more risk free $$ to lend..
http://macrobusiness.com.au/2011/03/covered-bonds-exposure-draft-released/
Remarks by Mark Carney
Governor of the Bank of Canada
Inter-American Development Bank
Calgary, Alberta
26 March 2011
The Paradigm Shifts: Global Imbalances, Policy, and Latin America
========================
Five country delegation of civil society organizations are at the IDB Annual Meeting of Governors in Calgary, Canada to monitor implementation of reforms that were agreed a year ago in exchange for a $70 Billion capital increase. Reform areas of critical focus include social and environmental safeguards, climate strategy, and results management.
=======================
The IDB is the main source of multilateral financing and expertise for sustainable economic, social and institutional development in Latin America and the Caribbean
==================
In the midst of a spiral of financial panic that reversed the flow of about $1 trillion in investment to developing countries and deflated market capitalization of the largest U.S. financial giants by 85%, G-20 leaders convened an emergency meeting in Washington in November 2008. The stated objective of the G-20 meeting was to agree on a multilateral blueprint for cooperation to end the market free fall caused by bank collapse and a global credit freeze. The publicly funded IFIs, particularly the IMF, were viewed as critical players because governance flaws at these institutions contributed to the crisis, but also as the source for emergency credit in replacing the ailing private sector.
The multilateral development banks (MDBs) have used the impact of the financial crisis to boost lending volume and defend these higher lending levels as the new status quo. In hot pursuit of the IMF to capitalize on the pool of global stimulus resources, this opportunism has resulted in the first simultaneous MDB global capital increase (GCI) process in history, involving the six principle public and private sector multilateral development banks. At tension with their fundamental counter-cyclical function, MDBs relevance and reward are inherently tied to lending volume. A MDB’s share of the regional debt and investment markets are core performance indicators. The relationship between lending volume and effective, sustainable development is much less clear.
At the heart of the G-20 agenda are proposed reforms to the international financial architecture that would correct the failure of national and global financial systems to alert, self-regulate or remedy the causes of the financial crisis. A good deal of the correction lies with the IFIs, which failed to forecast the crisis and in the case of the IDB, engaged in the speculative practices that triggered it. Emerging economies whose banks were not nearly as leveraged have not failed to point out the developed country origins of the financial crisis. In part due to the revived dependence on IFI lending, developing countries have been more careful in questioning the role of the IFIs as an effective proponent of change for failing to forecast the implications of blatantly excessive risk taking and benefiting from the same dysfunctional credit rating system.”
” Nice rant. But in the real world, buyers set prices. — Garth
” Point is, this ISN’T the real world… -TaxHeaven”
In the Real world, everyone has their own reality, but that would require people to fling that TV, and start think for themselves, and never let anyone do their thiking for them.
Canadian MORTGAGES IN ARREARS
New figures for Canadian mortgages in arrears came out on Friday. This is for 90 days in arrears.
http://www.cba.ca/contents/files/statistics/stat_mortgage_db050_en.pdf
They have creeped higher in the past two months but remain under a half percent.
One wonders at what point Canadian Banks are going to really get it in arrears from their customers.
If RE was doing as well as it was a few yrs ago realtors wouldn’t have any need to post on a blog such as this trying to influence people in their favour.
My change of address, Garth.
Forget about thinking of all the dewy-eyed, hormonal, brainwashed young bovines who stampede to every new home sale. Instead, think about all the cross-eyed, angry, brainwashed, poor, old gnus who have been wrong about the real estate downturn all these years! Mind boggling!
Some people want the madness to end and we call them impatient. I like to call them by a simplier term.
Wrong.
113 GregW, Oakville –
“larger cultural problem” don’t ya just love that answer
Half the mercury in the atmosphere over the entire US originates in China. It, too, is 5,000 miles away. A week after a nuclear weapons test in China, iodine 131 could be detected in the thyroid glands of deer in Colorado, although it could not be detected in the air or in nearby vegetation.(2)
2. Rosenthal E. Radiation, “Once Free, Can Follow Tricky Path,” The New York Times, March 21, 2011.
=======================
nuclear or coal pick your poison
On Dec. 22, 2008, a dike broke at a 40-acre waste-retention pond near the Kingston, Tenn., facility, sending more than 1 billion gallons of toxic fly ash sludge into nearby homes and waterways and covering nearly 300 acres. It was the largest such spill in the United States.
Eric Schaeffer, director of the Environmental Integrity Project, said there are nearly 100 similar surface impoundment ponds at power plants nationwide. An analysis of industry-reported data collected by EPA shows that many of those “wet dumps” are larger, older and contain significantly higher levels of toxic metals than the one in Kingston, Schaeffer said.
Thursday, July 30, 2009
Kingston coal ash spill Not only did its officials ignore warnings about dam safety, but the Tennessee Valley Authority also tried to bury a study revealing the cause of the massive coal ash spill last December 22 near Knoxville. Things had deteriorated so badly at the TVA that its leader, CEO and President Tom Kilgore, admitted to lawmakers at a congressional hearing that the nation’s largest utility has a “larger cultural problem” it needs to address.
============================
government /industry coalitions
EPA’s decision was rooted in the recommendations of a government-industry coalition (the Coal Combustion Products Partnership) that included the American Coal Ash Association and the Utility Solid Waste Activities Group.
What do you do with the left over goo?
fly ash, bottom ash and boiler slag, in materials for wallboard, road surfaces, golf course fill, concrete and other applications. waste dumpsites that were identified in a February report.
@ #79 Utopia
VERY interesting read. I knew about Sudden Hive Collaspe syndrome but I didnt know about that it might be linked to insecticides.
Chinas’ farmers are pollinating BY HAND because it’s beleived all the pollution has wiped out the bee population.
If you think a 4 dollar loaf of bread at Safeway is ridiculous wait till its $10 a loaf.
scary times ahead
Isn’t good to see our tax dollars going to such a noble cause?
Check out this objective from the Toronto Affordable Housing office:
$4 million in home ownership assistance loans to help 395 new home buyers.
Not bad $101,000 each home buyer. What a generous City Toronto is.
http://www.toronto.ca/legdocs/mmis/2011/ah/bgrd/backgroundfile-35730.pdf
@ # 86 Steven( Harper ?)
Wow ! A religious bigot. How unusual.
@#91 Utopia
Aaaaa the Duffey Lake road. A great drive. I spent 3 weeks about 15 years ago driving from Vancouver up to the Artic Circle ( Inuvik etc.) and all back down through BC. We finished our trip by travelling back to Van via the Duffey Lake rd. Some of the best scenery of the whole trip. Fraser Canyon desert to high alpine to rain forest in Squamish. All in a few hours. Best “bang for the buck” in Canada.
I highly recommend it to anyone except # 86. Your an idiot!
Just wanted to share a story out of T.O….a friend put her co-owned house on the market in Leslieville last week…2 flats in an old house, but nice enough. It sold within 24 hours in a bidding war for $18 grand over list. I was surpirsed this is still happening! Wanting her own place, she then ran out and almost bought the first house she saw…thinking everything is going fast….but was held back by her agent who suggested patience (nice agent!!). I’m gently enxcouraging her to relax and rent for a while, but since everyone’s an expert and she sold for a good price, this is falling on deaf ears. I hate to see her buy into a soon-to-be-falling market, but am tired of trying to enlighten people who think I’m an idiot for renting and waiting for the elusive market correction. A buyer’s strike is a great idea!
TS on 03.28.11
To:#23 InvestX on 03.27.11
“A friend just told me today about the newly built condo that he bought last year (pre-sale) as an investment. It is being covered by the rent. It’s in downtown Toronto.
Does it pay him a return on his invested capital or just cover expenses? — Garth
It is not build and occupied yet if he bought it last year as a pre sale. They do not throw them up that quick.”
Maybe I’m not using the word “pre-sale” correctly? But he purchased it last year based on floor plans as it was being built (something Garth warns against, undertsandably). He got possession a couple weeks ago and set up a tenant.
#19 April–so true —many condos throughout the lower mainland have been listed for many months–price drops and still no takers–i would have to say Coquitlam and Port Moody have to be the worst of the newer highrises
all those poor souls who bought those “hyped up” pre-sales have lost their shirt–prices aren’t coming back anytime soon to what they paid
here are a couple of recent homeowners who took a big loss with the sale of their property–i doubt they’ll be getting into the market in the near future
#309-1185 The high St–bought june 09 -369.9k–sold 289k
#2507-400 Capilano–bought dec 08–358.9k–sold 315k
#105 mike–i think False Facade meant there were 48 million “renminbi” millionaires in China considering there are roughly 10 million millionaires on the entire globe (US$)
Garth’s last line gets it exactly right.
And you econo-nincomp00ps get it exactly wrong.
Buyers (as a whole) – by the act of not buying – affect demand (given a stable supply); thus, they can push prices up or down.
Sitting in your parents’ basement blogging about it while all your friends get in bidding wars for million-dollar rat-houses in Vancouver is about as effective as shouting at the moon to turn green.
No wonder we get the governments we do.
How much do Canadian really make. Is it enough to justify current home prices……
http://www.financialpost.com/personal-finance/taxes/much+Canadians+make/4497362/story.html
45north on 03.28.11 at 1:23 pm
—-
Come to think of it, I thought the eyebrows looked familiar!
BC has now one more beauty to attract riches from Mianland China…….it’s radiation. From now on glowing with radiation houses will be selling at 10 times higher price then in February 2011. Sarcasm off….
So far it’s no danger….but radiation has one bad ability….it is getting accumulated by your body. Remember – any amount of ionizing radiation is bad, there is no safe level.
http://www.news1130.com/news/local/article/204124–radiation-from-japan-reaches-bc
http://www.notapennydown.com/blog/we-dont-lend-to-ninjas-but-do-we-lend-zero-down-canada/
Great article by Smith explaining the Euro problems. It relates to the Cdn political scene-people aren’t being realistic about the situation-when Harper, Iggy and Carney are done with their current gigs, where are they going and who will they be serving? It won’t be Habitat For Humanity-contrary to MSM B/S, massive, bloated government (which is what all parties in Canada promise) is the goal of those at the top of the global pyramid. I understand this goes against everything the sheep are told 24/7 but I haven’t seen any logical arguments refuting this thesis http://www.oftwominds.com/blog.html
Garth, what is your take on this new income splitting legislation Harper is talking about? Is it for real or are they just trying to secure the vote of wealthy 1 income families?
Some offer. It’s 5 years away. (And would cost less than one new fighter jet a year) — Garth
don’t gloat ont/que you’ll be sniffing it in 4 to five days .
http://www.bclocalnews.com/vancouver_island_south/victorianews/news/118457744.html
We’ll see how long long it takes for the overly indebted to get seriously cranky and and inflict their misery on the rest of us. Better start getting used to the idea of paying your neighbors mortgage. For lovers of big government this is a wet dream, just imagine the bureaucracy that can be created to bail out the multitude of “underprivileged” homeowners. I’d be willing to bet at some point within next 5 years someone will try to slip a mortgage deduction scheme under the door in exchange for an across the board tax hike. Of course if you don’t have a mortgage you’ll still get the free gift of an income tax hike. Be sure to thank your neighbor properly as he drives by in the obnoxious Escalade to the vacation home you sensibly didn’t buy.
Anyone who attaches any credibility to Harper’s “Family Tax Cut” truly must have the brains of a gnat.
And that’s just what Harper is banking on, or he would not have come out with it as a platform plank.
Moneta,
don’t forget to watch CTV Ottawa at 6 tonight. They’re starting a series on our non-existant commuting problems.
As the japan Nuke Crisis continues, radiation is starting to reach the lower mainland. Now plutonium is detected also.
Those who bought better hope it doesn’t get worst or persist for a long period of time or get into the food chain.
I know its far away and the Experts says the little amount of radiation should not effect us. But hell yeah, they use to say that about smoking. Why risk your families health when you don’t have to.
Just like the problem with heavy metals and the fraser valley.
For any fool who would buy now while the situation is still looming, they are idiots because if the situation gets out of hand, you cannot pack up a house and property and move it. You mind as well wait until the situation is totally under control.
#146 Vancouver_bear
I like to see the people who says the radiation level are not a problem have their families drink a liter of rainwater with that much radiation each day. For 5 to 10 years
I bet you none of them will take that chance. They are probably drinking bottle water right now
the dutch banksters
…have to give their bonuses back …it seems the people are very angry over bailouts..
Richard Wachman in Amsterdam The Observer, Sunday 27 March 2011.
#137Jess-All this Japan nuclear mess does is shift more economic power, long-term, to China. Anyone that actually believes this incident will cause China to slow its nuclear power program is clueless. We can have a “green” energy system but the overall standard of living would be far lower than this one, and this one is already very bad at the global median. The whole thing is pretty ridiculous-you have North Americans worried about radiation and they have a cell phone taped to their skull for hours on end (often as they cross a busy intersection in the middle of Toronto-they don’t look left or right as no car can cross the imaginary line).
#139SAD-No-this is the noble use for TO tax dollars http://www.torontosun.com/news/torontoandgta/2011/03/26/17763041.html?comments_page=1&id=17763041#/news/torontoandgta/2011/03/25/pf-17758561.html
Lots of open houses in the hood where I live. A lot have been on sale for awhile, as their MLS picture shows a nice green lawn with leaves on the trees. A lot also have more recent pictures with snow on the ground.
At any rate, they don’t seem to be moving. I have also seen $50 grand reductions after listing for a few weeks.
It’s not going to end well. The spring market will definitely be flat or worse.
Looks like the market is really weak. Homes in my area seem to be sitting on the market for months. The funny part is some people have reduced their asking prices while some crazies increased them. No joke One townhome has been sitting for 8 weeks is asking $325K while the same exact townhome came on the market 2 weeks ago for $399K and both continue to collect dust in this buyers strike. The housing market is really going to fall hard. It’s obvious now.
Herb on 03.28.11 at 5:30 pm
Moneta,
don’t forget to watch CTV Ottawa at 6 tonight. They’re starting a series on our non-existant commuting problems
———–
Since I work on the private side, I don’t get stuck in the traffic japm created by the civil servants.
;)
Great rant by Kunstler today-he isn’t the only one nauseated by the Mannequin’s continual MAKE NO MISTAKE nonsense http://kunstler.com/blog/2011/03/make-no-mistake.html#more
Utopia: Over 20% of all bee colonies had not survived over-wintering. We did well. On Vancouver Island almost 70% of all hive colonies failed to survive until spring. The Maritimes posted similarly dismal results.
good post
The following link shows U.S. home prices nominally and inflation-adjusted.
http://www.theatlantic.com/business/archive/2011/03/chart-of-the-day-home-prices-since-1890/72980/
Monday, March 28, 2011
Only Lying Lenders Made “Liar’s” Loans
By William K. Black
http://neweconomicperspectives.blogspot.com/
Why can’t the economic crash be like a band aid and rip it off fast so we can get it over with and let the recovery begin.
The one bright spot in my world is I’am not a sucker that got talked into the buying realestate.
Just a matter of time I can sit back and watch the people I know fall like dominos when they can’t afford to pay their mortage payments.
BrianT
will Japan have to “nationalize” this company who is going to pay the insurance bills etc.? 300b. is mega coin.
Herb on 03.28.11 at 5:30 pm
———-
I juste watched today’s report. They’re complaining about 30 minutes! I lived on Nun’s Island in Montreal for a couple of years and it took about 25 minutes door to door and that was close!
20 years ago, I took the bus to college and university from the burbs to downtown Montreal. It took between 1 to 1.5 hours one way. Today, from my house to the U of O, it would be 30 minutes. Same distance.
In Montreal, if I left the office at 5pm, I was home around 6pm. When my husband leaves the office at 5pm, he’s home around 5:30pm. Same distance.
For the voters on strike.
“Just because you do not take an interest in politics
doesn’t mean politics won’t take an interest in you.
– Attributed to Pericles, ca 430 BC”
As unpleasant as it may be. Vote and let them know what you expect of them.
#79 Utopia on 03.28.11 at 8:50 am, there are more problems. Do you think the neo-CONs will protect our border from these food invaders? Not a chance! Power to the corps.
————–
The U.S. has just given the green light to plant genetically modified alfalfa. It’s the first time a genetically modified perennial will be widely planted in North America.
Carstairs organic farmer Kris Vester is worried about the prospect of such alfalfa being planted in the U.S. this year.
Although it is not allowed in Canada, Vester says that doesn’t mean it won’t wind up in Canadian farmer’s fields, blown across the border or carried by bees.
If that happens crops and animals on his land could no longer be certified organic, said Vester.
“You are going to end up with genetic contamination of your organic crop. And organic certification demands that you do not have any genetically modified genes in the genetic crop. So it could actually result in an organic farmer losing his organic status,” he said.
“It may result in us having to stop using alfalfa and there is no other crop that could replace that.”
Monsanto disputes GMO concerns
http://www.cbc.ca/news/canada/calgary/story/2011/03/28/calgary-gmo-alfalfa-alberta.html
–
#152 Herb — “. . . must have the brains of a gnat.”
I disagree, as gnats are living things, but Harper is a deadpan zombie running on autopilot, akin to this!
#157 BrianT — “All this Japan nuclear mess does is shift more economic power, long-term, to China.”
While sucking the west dry, so why was HAARP involved? That is the west’s creation. Are TPTB hastening the west’s demise? Good post.
*
1:59 clip Lieberman backs me up; as said earlier, Syria is next, and here is the forthcoming ‘justification’ for invading Syria. But first, false riots must be started by the CIA and Mossad.
NASA About time this was corrected.
Collapse of Globalization Figured it was just getting underway.
Official This depression is worse than GD1.
Six recent Studies link mercury to autism.
Falling We’re past The Tipping Point. Is a large bank going under? “Guess who pays for it!” wrh.com. Umm, sheeples / taxpayers?
Chernobyl More than 25 years on, still a threat to Ukraine.
Obama doesn’t have to sell anything to anyone, as the illegal Libyan war is going ahead anyway but it may be an excellent starting point for US citizens to get angry at the WH, and So why are they there?
Gold Further evidence on hiding it, and Gold and Guns Heading back to the Wild West days!
Default As said earlier, NAmerica will probably default on its’ obligations, maybe switch to a new currency, etc.
Unpaid Jobs? No minimum wage needed!
Consumer Spending up in US due to higher food and energy costs.
Blogging Is Good and truthful; the m$m isn’t.
Erdogan calls it correctly.
#168 Moneta,
Unsurprisingly, it depends on where you live and how you commute.
I lived in Glabar Park and worked downtown in the ‘80s. It took me one hour by bus since there was no express service within the city. Some colleagues made it from Orleans and Kanata on express buses in 20 minutes. My solution was to commute by bike between April and October (half an hour each way).
You must have missed the two ladies who complained about 1 hour 15 minutes and 1 hour 30 minutes respectively. The CTV Ottawa site is running a poll on commuting times tonight. Last I checked, half of the respondents made it within 30 minutes, half in over 30 minutes (13% reported one hour or more).
Besides, why are we preparing to spend $2.5 B on Light Rail Transit if there is no problem commuting?
Moneta,
re your snark at #161, just how much “private side” do you think there would be in Ottawa if there were no government and public service?
The Royal Navy no longer needs Ottawa lumber, which is just as well since the useful trees were harvested a long time ago.
to #139 SAD re the Toronto Affordable Housing office:
$4 million in home ownership assistance loans to help 395 new home buyers.
*************************
Bust out your calculator, it’s $10,126 per person not $101,000
Still too much of course, but not as absurd.
Herb on 03.28.11 at 8:41 pm
#168 Moneta,
Unsurprisingly, it depends on where you live and how you commute.
———
Exactly. We all make our choices. I call it arbitrage. I changed my life to get out of traffic.
And my clients are in Montreal. Sometimes I take the Via train to downtown Montreal and nearly get there faster than a friend of mine in Baie d’Urfé. LOL!
Besides, why are we preparing to spend $2.5 B on Light Rail Transit if there is no problem commuting?
———
I’m not saying there is no commuting problem in Ottawa. What I am saying is that in Ottawa it is quite feasible to get a very nice house, not too expensive, with a decent commute… unlike anything in Montreal.
The thing about this commuting issue is that no matter how many roads we build and how much we spend, the commute time always stays the same because a huge amount of people will tolerate 60 minute commutes. Every time we improve the commute, people just keep on moving farther out in the boondocks and still have a 60 minute commute. Then they complain.
So I just play the arbitrage game. Life is too short to wait for others to improve your life.
Thank you to all who wrote comments regarding my post on the bees today. I did use some strong language and that was no accident. There is a crisis underway in the insect world right now it it affects many of these tiny creatures so this really goes well beyond being just a bee issue.
The problem is that there are no advocates for the wild pollinators that are also in decline. Nobody restocks them when their populations dwindle and few even notice their passing to comment on the problem.
A connection has been made by researchers into the cause and effect of agricultural chemicals and the Colony Collpase Disorder that is wiping out bees in the United States and in many other countries. More research is required though before governments can be lobbied to remove certain chemicals from the market.
We are already on borrowed time though.
This is not an issue like global warming for example that suggests serious trouble at some distant time in the future. The problem with the widespread losses of pollinators across the globe is an event that is happening today and it is therefore an urgent concern.
In Saskatchewan there is no acknowledgment that we even have Colony Collapse Disorder despite the fact that losses have been in the double digits and even exceeding 35% for several years now. What we do have is hives that are under tremendous stress from “mites” and some insist that we can overcome the issue from a management perspective alone.
Not everyone agrees. Bees have always had their fair share of disease and infestations. This is different though and suggests that Bee immune systems are being compromised so that they are unable to adequately fight off attackers.
The historical average for over-wintering colony losses rarely exceeded 15% not so long ago and was typically only at 10%. That is a number any good beekeeper can recover from and surrmount.
The extremely high mortality rates we now see are trying the whole industry though and making some operations simply non-economic. Plenty of guys just want to sell and get out altogether. It is not worth it anymore. Does that not give anyone else cause for concern?
This is a wake up call to everyone therefore and it is not an understatement to suggest the global food chain is now at risk. We will almost certainly see widespread starvation in the world over the coming decades if solutions cannot be found quickly to the ongoing bee disaster and if governments do not act to intervene in what is shaping up to be a worldwide calamity in the insect world.
That may mean pulling certain chemicals off the market altogether. So far the message is not getting through in Ottawa where Clothianidin was just approved for use on potatoes in this country.
Here is a link to an article called “Lament for the Honeybee” written by a fellow called Larry Powell out of Manitoba. He covers the topic well.
http://www.onearth.org/taxonomy/term/1898
And here is a 15 minute piece that was done by 60 minutes last year. In it a beekeeper is interveiwed who discusses how he is effectively being put out of business by the bee die-off.
And this is I think the greatest threat of all. Bees may well survive into the future but if there are not people out there placing hives where they are required as the growing seasons change and keeping our bees alive and healthy then we will be looking at much lower crop yields in the future.
That is a signal that a disaster lies ahead with damning repercussions for people everywhere and it is not an exaggeration to suggest that this is truly one of the single biggest threats that the world now faces.
The title of the show is “What’s Wrong With the Bees”?
http://www.cbsnews.com/video/watch/?id=4835946n
Housing is Australia is being driven by huge growth in the Resource sector, which Australia is the one largest exporters for several minerals
Unlike the U.S, Australia’s finance sector has much more regulation. The bubble that was created in the US from Subprime lending and derivatives/speculation (For which I cant believe you haven’t sent any of those scum bags to prison for) can in no way be compared to Australia. Finance for property since GFC has been closed to impossible for anyone that has less than perfect credit or income. Also most major cities in Australia have seen negative growth over recent times. Anyway i’m no expert but i think your article is a load of sh*%
@Jonno, #178 states: ‘Australia’s finance sector has much more regulation. The bubble that was created in the US from Subprime lending and derivatives/speculation (For which I cant believe you haven’t sent any of those scum bags to prison for) can in no way be compared to Australia. Finance for property since GFC has been closed to impossible for anyone that has less than perfect credit or income.’
——————————
Yet, at least two of the big Aussie banks have recently moved back to lending 95 or even 97% of the value of the property, while another is exempting people from paying for mortgage insurance. Oh, and this at a time when something like 4 out of every 10 dollars they lend first has to be borrowed from international creditors and their mortgage books represent roughly half of all lending. How does any of this make Australian banks and regulators sound so smart? The banks are desperately trying to stoke mortgage lending to maintain their profits at the same time people are finding they are having trouble (thanks in part to rising interest rates) affording their homes and auction clearance rates are falling (oh, and house prices are under pressure or falling in several states, such as WA, Tassie and the southeast of Queensland).
I live in Sydney and the prices here are ridiculous. Despite earning a decent wage >A$150k p.a, I cannot bring myself to paying for a sh*thole one bedroom unit that would typically go for in excess of A$400k. Yes, I can “afford” it, but am I getting value for money? Absolutely not.
#179
QFT!
Thanks Garth for giving this some coverage. I’ve been saying for a while now that Vancouver = Melbourne and Sydney.
Same same.
Garth and everyone else,
just want to share my story: I read this blog occasionally and started first just before the financial meltdown, as far as I remember the blog has been in panic mode then already, prime was above normal and the five year about where it stands today, give or take. Because it was around Q3/2008 I was able to secure a variable mortgage at -0.6% prime, not the best but a week later these deals were more like +0.4%.
Due to the extreme low prime and ambitious repayment I am now already at 75% of my initial principal while house prices in my area have soared at least 5% a year.
Canadian mortgages are insured, the insane 40years 0%, cashback and themlikes are gone and many baby boomers just take houses off the market if the market does cater to their expectations. New housing starts are -20% this year and we’ve seen +13% more immigrants last year, population is growing. No one anticipate a sharp increase in prime and economy is slowly regaining momentum. I would think a soft landing is very likely, but a steep correction or even a crash? A little far stretched.
[…] called Prosper Australia to stay out of the housing market. Read all about it on Canada’s own Greater Fool blog, or check out the Prosper Australia […]
Yes, Get Up is running two campaigns, one to end negative gearing and another calling for a First Home Buyers strike. The FHB strike is already at Number 1 position in the Get Up table and the campaign to end NG is not far behind. You can find full details on how to join in and vote for these campaigns at the link below on the Zetaboards Australian Property Forum:
http://www.australianpropertyforum.com/topic/8506527
If these campaigns work as planned, house prices will surely fall to sensible levels whereby decent hardworking Australian families can once again afford a home. If we take out the bottom rung (FHBs) then the whole pyramid scheme that is Australian property will collapse! So don’t accept this talk of FHBs being priced out. Do something about it. Get on board, join in the discussion at AustralianPropertyForum.com, and get your votes in to the Get Up campaign right now! Priced out? Not for much longer if we all stand together!
Max Carnage.
Australian Property Blogs