Sara is 51, lawyer, pushy. Makes $225,000 a year. Husband (about to retire on 24K a year pension), one bratty teenager, two new BMWs, rents a mini-mansion on Vancouver’s hot west side. Plans to buy soon. Assets: a hundred in RSPs (mutual funds) and three hundred in the orange guy’s shorts from the sale of their home. “We save nothing,” she told me, “and we are very risk averse.” Prognosis: Screwed.

Three years ago, when we had a financial crisis and no real estate frenzy, half of Canadians said in a survey they expected to be ‘fully retired’ by age 66. Today that’s collapsed to just 28%. In other words, two-thirds of people will be toiling they are 70 – lots of them because they have mortgage payments.

The phenomenally unhealthy obsession with housing led me to establish this pathetic blog, and every time I talk to a vacuous, bottomless reservoir of hormonal desires like Sara, I am renewed. So many people cannot see the immense risk that residential real estate now poses, especially in a market like Vancouver, Toronto or even Calgary. Hell, this hereticism of mine’s even seeping into the MSM.

Check out this comment in today’s Globe from academic George Athanassakos: “Canada is past the point of no return. What has propped up the housing market in Canada and delayed the correction is artificial demand from Asian investors. While it is not clear when this demand will dry up, it eventually will. Once it does, watch out.”

Too much of your net worth in real estate is a recipe for heartache. Investing in a bag of things is salvation. But this is a message many people simply don’t want to hear, especially those who make their livings from pumping houses. Like the Calgary realtor who just published this:

“Depravity has overtaken the Greater Fool with harder drugs required to keep the troops in line and to prevent a mutiny. Pornography, swearing, nastiness and insults are pervasive. The blog now appeals mostly to scum, trash, and vermin (the consensus is that his readers are all realtors). The lewd language and sexual obsession has attracted an undesirable crowd of the licentious and the wanton.”

There ya go. Read a blog with some contrarian financial thoughts and a healthy sperm count, and you turn into “scum, trash and vermin.” Is that a Calgary thing? A realtor hangup? Or just another confirmation that most of the people you’ll meet today are economically doomed, and lashing out? After all, this site does not exactly foment revolution. It just questions common wisdom that’s resulted in 72% of people saying they won’t be able to retire.

So many Canadians have so much invested in one single asset that the kind of talk taking place here is damn scary. Like Stephen Harper without a kitten. Or Iggy when his eyebrows meet.

Which brings me to the TFSA. As you may know, the prime minister has said he will double the amount you can invest in this sucker, to $10,000 a year, if he’s re-elected and when he balances the budget. That might be 2014, or never. We’ll see.

K. Why do I mention this?

Simply because people have been given a decent set of tools to rescue their families, and yet refuse to use them or to find out how. Regardless of the Harper promise, couples today can shelter $30,000 in assets within a tax-free account. Invested in stuff earning an average of 8%, that’s a $2,400 annually taxless gain. And yet a BMO survey shows only a third of us have a TFSA, and 90% of the money’s invested in crap earning less than the inflation rate.

Similarly, Sara has equity mutual funds in her meagre RRSP and yet has absolutely no idea (a) that CDIC doesn’t guarantee bank funds and (b) the capital gains she makes there will be treated as income later, doubling her tax bill. In fact, the vast majority of people don’t understand what a balanced portfolio is or how to avoid taxes through allocating assets within an RRSP or TFSA.

(For the record, TFSAs should contain rapidly-growing assets such as emerging market or small cap ETFs; RSPs or LIRAs should have your fixed-income, like bonds, which are taxed more; non-registered accounts should hold a wide diversity of tax-efficient assets like preferreds, allowing you to claim the dividend tax credit.)

Instead of learning this, we teach our virgin offspring how to buy a house with 95% financing, using a mortgage that will only rise in cost, at a time when real estate has never been more dear – and do it all in after-tax dollars, robbing them of any chance to diversify or hedge their lives against what comes next. Human sacrifices. HGTV-certified.

As the professor says, watch out.  This will not end well.

Unless you’re a scummy vermin. Then you rock.


#1 Ayn Rand on 04.10.11 at 10:11 pm

Interesting info from Calgary where housing prices have fallen in the past few years. Who is “Mike” that the fellow referred to on that site…one of our own?

Keep up the good work Garth….when is that next book coming out?

October. — Garth

#2 van isle on 04.10.11 at 10:12 pm

garth can you help me find 8% on a tfsa i am an unexperienced investor with 15 k in the bank and about to hand it over to one of the big 5 investors that ends with ..bc is this the right move i appologize for pleading ignorance but I put more trust in your opinion more than the pusher man. After all by reading your blog I have abstained from house lust and prefer to save what I make.

#3 Mr. Reality on 04.10.11 at 10:14 pm

The only thing more perverse than this blog is the fact that all those scumbag realtors have the power to manipulate people into making their most important financial decision of their lives on unfounded data and hype.

I never thought renting cheap and sitting on the sidelines could be so fun! Mr. R. is shorting the markets and buckled in the for the ride. Anyone want to join?

Just wait until the bad China news trickles through the markets. You aint seen nothing yet!

Mr. R.

#4 Another Albertan on 04.10.11 at 10:16 pm


Mike Fotiou.

Everyone else’s mileage may vary.

#5 Min in Mission on 04.10.11 at 10:18 pm

“scum, trash, and vermin”

And they said that I would never amount to anything!!

#6 wetcoaster on 04.10.11 at 10:19 pm

As posted to “Bob’s Board” :

Dear Bob,

Sounds to me like a real estate agent who took the 3 month course and skipped out the day of the section on “The Effects of Higher Interest Rates on Home Buyers”.

I suspect you were still a wee lad on mom’s nipple back when the last interest rate hikes from high price points occured in 1981. Please spare me the “this is not 19%” spiel, a couple of points off emergency bottom rates spells the end for real estate while you’re sucking in the sheep. Hope you have a back up career lined up, you’ll soon need it.

#7 tkid on 04.10.11 at 10:19 pm

“Risk adverse” and “save nothing” are contradictory terms; I’m risk adverse bordering on paranoia and I’ve been saving money since I was 16. The lawyer is really saying ‘she couldn’t bear to live a lesser life than the Jones for 20 years.’

#8 nonplused on 04.10.11 at 10:22 pm

Nice post Garth.

Got to admit, your advice is better than most, even if you don’t get everything 100% right.

I still don’t see rising taxes without some sort of revolt. Although you didn’t mention that today. And, to your point and not mine, the City of Calgary is threatening to raise property taxes 8% per year for the next 3 years, and of course they are being optimistic. But I don’t think it’ll work for long. There isn’t anything left out here to tax, and raising taxes won’t magically raise the amount of money from which there is to draw.

#9 Makes Cents on 04.10.11 at 10:27 pm

The real scummy vermin are the ones who post “first”

#10 Canayjun on 04.10.11 at 10:28 pm

People lash out when they are injured and don’t know what else to do.

#11 squidly77 on 04.10.11 at 10:30 pm

An embarrassment to all Calgary realtors.

For public complaints about the behaviour of CREB members e-mail here.

#12 S.B. on 04.10.11 at 10:30 pm

What no yellow tie?? According to that magazine, blue is now in vogue. Who knew ;)

Kelowna: so many red MLS dots in a tiny area of this city!

AND: the new canada…I dare ya to protest…we are the enemy today. Even five years ago I would have scoffed at this idea. A few bad apples. Just following orders.
I’d advise people to avoid Toronto as a place to live.
The new Mayor aka Boss Hogg is just a good ole boy who will support this kind of thuggery. Remember, they work for him now, not for us. But our taxes pay for it. It’s democracy, got it?
The new Canada:

Police sniper alarms Toronto activists

As a handful of OCAP members marched below, a heavily armed officer at 51 Division watched from above.

TORONTO – Was it an example of bringing lethal force to a peaceful protest or simply the police being properly prepared?

There are plenty of opinions.

With all of the social media chatter Wednesday about this sniper’s rifle photographed on a terrace at Toronto Police headquarters, you’d swear it had been fired at protesters.

This did not happen. In fact the gun, which in pictures is resting on the ground, was never supposed to be seen by the public

Toronto Police Chief Bill Blair has launched an inquiry into allegations that police officers tried to intimidate and bully a reporter covering the sentencing hearing of one of their own.

“He has initiated a chief’s complaint,” police spokesman Mark Pugash said Wednesday.

“A complaint doesn’t have to come forward for the chief to act.”

The controversy erupted at the Tuesday sentencing of Det. Christopher Higgins, who was handed 90 days in jail for breaking a prisoner’s arm in 2004.

#13 inglishmagor on 04.10.11 at 10:31 pm

I initially came you this site for the fun of watching the real estate Juggernaut with other people. I’m very thankful for your articles on RRSPs, TFSAs, and non-sheltered investments. I’d never given thought of each style of saving having a type of investment that gels with it the best. It’s something I’ve begun to straighten out in my own savings.

As a dumb ass I would love it if you dedicated an entire article to this fundamentally simple idea. If not, thanks for the info.

#14 mid-Ontario on 04.10.11 at 10:34 pm

“With industriousness and creativity, Turner has built a lucrative business on the fear of a housing crash, but is it sustainable? How many rain dances are you entitled to before the drought-stricken come at you with pitchforks? How many new brands of snake oil will you be able to sell to the same gullible person? How long can you blog 24-7 before you have to take a holiday? Besides, it’s dangerous to work on your laptop while riding a Harley, and he may not wish to tempt fate any longer. ” – Calgary Realtor

Quite poetic! A relation of some sort, I suspect.

Anyone who follows anything out there in the real world knows what is coming. I fear that your “slow melt” will be more like 1989 when RE crashed overnight. Simply stopped one day. I could list 15 solid reason why we should not be surprised by what is about to hit us.

With respect to the infamous Calgary realtor, I am not scum and I have never impersonated vermin.
However, if you think of one that cozies up to PM’s is trash, I may fit into that category. Even our leader who reportedly believes in “rain dances”, calls us “bullion lickers”.

You keep your RE. I’ll keep my PM’s and I will sleep very well!!

#15 HouseBuster on 04.10.11 at 10:38 pm

1. Making 225K and she only has that much saved up? No kidding, she spends everything.

2. Pornography? Where? Did I miss it?

#16 Signpost in the bushes on 04.10.11 at 10:41 pm

“More than anything else, our personal finances are dominated by the need to pay the mortgage on a residence whose purchase price is nearly always many times greater than our true means. The insatiability of the (“Affluenza”) Virus means that, as well as having mortgaged ourselves to the limit, we never seem to be content with what we have, although for many of us a less expensive home would be perfectly adequate to meet our needs. There is always a better house, whether in a more fashionable area or street therein; we constantly hanker to improve what we have, the conservatory (sun-room), the new kitchen or the sculpted garden; we may seek a second home and, on getting it, soon want a better one; even those who have more acquired homes than any individual could possibly need are liable to desire still more or better ones. We talk of “needing” these things, but really, we only want them.”

Oliver James from his 2007 book “AFFLUENZA” chapter 6

#17 HouseBuster on 04.10.11 at 10:42 pm

LOL @ the Vogue cover.

#18 DJH on 04.10.11 at 10:42 pm

From the first link in your blog: “What has propped up the housing market in Canada and delayed the correction is artificial demand from Asian investors.” George Athanassakos

This is something that objective analysis should be capable of verifying or denying – are large numbers of Asians purchasing real estate in Canada and driving up prices? If so, this investment, especially in Vancouver, is significantly responsible for relative high property values, and may end up preventing renters and others from getting their just rewards. Smart money will have followed the Asians into real estate. Of course, everything changes if the Asians change their buying habits. But that’s just another part of the guessing game.

#19 Jsan on 04.10.11 at 10:42 pm

Chinese investors? Huh, in the not so distant future they will have no desire to invest in Vancouver once their own MASSIVE property bubble collapses. I’m sure this video has been posted before, it is stunning to see.

Garth, you hit the nail on the head the other day about why in the world anyone would waste their time, money and effort investing in condos that are over priced, a pain in the arse to rent out and impossible to dump when the market turns. A REIT is a much better idea and you can bail on it at the click of a mouse.

“Why buying a REIT is more profitable than a condo ”


#20 Steveo on 04.10.11 at 10:45 pm

By far the best comment on the G & M article. Hilarious!

I am disgusted at the ignorance of this article. Would it not be safer to bet that the writer of the article is not omnipotent and in fact prices will rise further for quite some time? Or the writer has been endowed with great foresight and is the only person who has found the exact top of the housing market?

I work at Spadina and Front, in the densest condo area in Canada. Last month we helped sell 88 Units of a 300+ Pre Construction Development around $108 million to my calculations.

Our Clients come in with cash. Very few are Canadian, in fact a large percentage are overseas and I have never met them outside of an email and fintrac requirements.

There are 33 million people in Canada. Maybe 500,000 Millionaires. There are 100 million millionaires trying to come here and they all buy a condo. Harper opened the immigration floodgates last June. By the looks of this article Harper was right. Harper could not leave the growth of Canada up to the Citizens of this Country. We are inherently lazy with little risk appetite. The foreigners come here and create the factories and businesses and the jobs and he is only letting in immigrants with 300k-500k in a GIC. I meet them everyday.

If you do not buy property now in Toronto you and your kids will be priced out of the market for a generation or more. Stop complaining you do not have any money and get in the game now as a group, as an individual. However you can. This article is written by a fellow that makes 50k a year and can not count past a million. It is easier for him to complain than to try to understand what is happening.

There are no coincidences in markets. Things are the way the are for a reason. Seek out that reason.

#21 S.B. on 04.10.11 at 10:58 pm

Well it’s a step up from being on the cover of Blog Dog Monthly.

#22 S.B. on 04.10.11 at 10:59 pm

Wait, is that MissyBunny caressing the magazine??

#23 Abitibidoug on 04.10.11 at 11:00 pm

I agree with Housebuster, in posting #15. Quite frankly I also wonder how the hell someone making that kind of money couldn’t have built up a good portfolio by age 51. If high income earners can’t save up for retirement, it makes you wonder how more average, or below average income earners will manage to save and retire. So much for this future labour shortage some ill informed economists have beem predicting.

#24 LJ on 04.10.11 at 11:01 pm

This may sound a little cynical but Harper’s promises to give out all these freebies like doubling the TFSA contribution room AFTER the budget is balanced is like me saying that I will pay a million dollars to every person on the planet AFTER a comet comes and wipes out all known life on earth. Ain’t gonna happen, no matter how you cut it. At the rate we are going, we will have three or four elections between now and then no matter who wins this current rat race.

Just like he said that he would not touch income trusts and _______ (fill in the blank(s)).

Then again, this should help:

#25 Tim on 04.10.11 at 11:01 pm

“What has propped up the housing market in Canada and delayed the correction is artificial demand from Asian investors. While it is not clear when this demand will dry up, it eventually will. Once it does, watch out.”

Are Asians propping up demand in Vancouver like so many people here think, or are they not? Are there any numbers to support this?

#26 Tim on 04.10.11 at 11:10 pm

“As you may know, the prime minister has said he will double the amount you can invest in this sucker, to $10,000 a year, if he’s re-elected and when he balances the budget. That might be 2014, or never.”
I’d rather have Iggy at the helm than take a chance of having my TSFA double in 3-4 years. Regardless of who’s in power, they will likely eventually raise the contribution limits. Besides, how will Harper balance the budget if he’s spending an estimated 13-15 billion on mega prisons, even though crime has been trending lower. He’s spending 30 million on fighter jets, after he lied about the cost. He wants to cut corporate taxes further, guess who’s going to have to make up the slack? You and I…one more step to becoming more like our friends down south- a two-tired society, with the rich gaining more, and the middle class eroding

Under Harper’s watch, our surplus went from 13 billion, to a deficit of almost 40 billion..yes, this from a “Progressive Conservative” government- I mean a neo con, ultra right wing former Alliance member.

He teamed up with the Bloc and the NDP to defeat the Liberals in the last election, and now he is warning everyone how bad it will be if Iggy does the exact same thing Harper did in the last election! It says a lot about our country if he gets in again…

#27 Tim on 04.10.11 at 11:11 pm

Unseat Harper

#28 Sean on 04.10.11 at 11:13 pm

I would add to your comment that the TFSA’s should have the growth assets and the RSPs get the bonds. I think it depends on the investment goals. If you are saving for a down payment over the next five years, then preferreds or bonds could go into the TFSA, so the money will be there when you need it. The RRSP could have the equity and be geared for growth over a 30 year time horizon, and left alone over the short term.

Five years is an eternity. Plenty of time for gains. As for RSPs, the tax benefits of capital gains are lost if withdraw them as income. — Garth

#29 Victoria on 04.10.11 at 11:23 pm

I sent the article from the Academic to a dear friend in Ireland and this was his reply ….

the scenario painted in the article mirrors what happened before our bubbly burst in ireland….house prices doubled or more in the last 10 years……and there is no such thing as a soft landing, believe me….

#30 Rich Renter on 04.10.11 at 11:27 pm

Garth, As you know when the insults fly, it means your right. No it’s not a Calgary thing but like anywhere we also have our idiots. The photo of Calgary sums it all up for me, no Bow and at least 10 other skyscrapers missing :)

#31 Mr. Plow on 04.10.11 at 11:32 pm

#204 Cellar Dwellar from yesterday’s post

I call a truce, because you seem like a good guy.

All the best out in Van to you.

#32 tired vulture on 04.10.11 at 11:32 pm

I dont see any asian in Woodbridge and houses are selling faster than warmed bread!

#33 Mr. Plow on 04.10.11 at 11:34 pm

Squidly77 from yesterdays post….


That is getting so tiresome, watching you “accuse” someone of being a realtor because they don’t see things the same way as you.

How is your $25 oil coming? Or $150,000 real estate in Calgary?

Maybe try contributing something that gives you some credibility and relevance before throwing stones.

#34 Michelle on 04.10.11 at 11:38 pm

Thank you Garth. Your Vogue cover made me laugh out loud! A man of style :)

#35 Big Al (New) on 04.10.11 at 11:43 pm

I feel so dirty reading this, I had to put a Field and Stream cover on the iPad so my wife wouldn’t get suspicious.

#36 Tim on 04.10.11 at 11:44 pm

Signs Point to a Severe Housing Correction in Canada:

If it is sever in Canada in general, then it will be beyond belief in Vancouver lol!

#37 Agio on 04.10.11 at 11:46 pm

A realtor commenting on human morality and behaviour on the innernets no less is most amusing. The irony of it all.

Of course he’s a low-rent camel humping thesaurus abusing closet pron queen. ZOMG<LOL

#38 Tim on 04.10.11 at 11:46 pm

How long does it take to become a house pimper? Six weeks? What other career requires so much intellect and long and intensive training? lol!

#39 April on 04.10.11 at 11:48 pm

According to Garth, if my memory serves me correctly, there is no evidence to support the claims that Asians are propping up demand. Garth will correct me if I’m wrong.

#40 Tim on 04.10.11 at 11:49 pm

“The foreigners come here and create the factories and businesses and the jobs and he is only letting in immigrants with 300k-500k in a GIC. I meet them everyday.”

And they price us out of our own market. THanks to people like you and Harper, you have destroyed the traditional Canadian middle class buy whoring out our real estate to rich immigrant investors

#41 Utopia on 04.10.11 at 11:51 pm

That Truman material was hysterical. I could not stop laughing all the way through. Like Comedy Central except better because it has a vague ring of truth.

You know, I really have to hand it to those realtors when they can stop taking themselves so seriously and start posting the “tongue in cheek” stuff despite the dismal future they all face.

Any of you Dawgs know how many Canadian cities are experiencing outright price declines these days by the way?

Uh-hunh. Thought so. Maybe the comedy is falling a little flat as the real situation is coming to a boil for many of the actual victims of realtor spin and sales hype.

#42 SophieZombie on 04.10.11 at 11:55 pm

”Or Iggy when his eyebrows meet.”
Iggy’s eyebrows are having their own facebook page.
For a long time, they were more popular than Iggy himself or Harper. But that was before the steroid TFSA or the Family Party Pack.

#43 (low density) Sam on 04.11.11 at 12:10 am

We should do a meetup

> The lewd language and sexual obsession has
> attracted an undesirable crowd of the
> licentious and the wanton.”

I’d like to meet these … especially if they’re women.

#44 realpaul on 04.11.11 at 12:15 am

Now then, some people ( names remain anonymous) refuse to recognize this statement as fact…and yet..

““Canada is past the point of no return. What has propped up the housing market in Canada and delayed the correction is artificial demand from Asian investors”

…from the mouths of babes.

Now…having said that…I have been in and out of China and understand why everybody there wants out of that shithole for one reason or another ….ad nauseum. Steal money in China…bring it into Canada no questions asked…..done all the time. Whether your the child of a general or government official or the wife, cousin, brother or uncle of a corrupt bankster bleeding his accounts dry because there is no administrative oversight except the firing squad….you’ll want to come to Canada because we have no extradition laws with China…..swish swish…the moneys clean as a whistle as far as the government of Canada is concerned. OK everybody knows this story …but the ‘crowd control’ people in the government and media want to misdirect the facts…..because it’s rascist to talk about foriegn nationals buying property here….even though they have no rights and no citizenship criteria upon which to argue why they should be allowed to displace Canadians with the flood of money coming out of China. For some social engineering complacency to have created social policy towards non citizens is the antipathy of good governance. And BTW…it’s not rascist….it’s just stupid not to talk about it.

And on the subject of Mutual Funds…..don’t be too hard on these little darlings. You have to know how to invest in ‘muts’ for the sectors to work effectively in a diversified generic portfolio. I’ll give you one example…..I took one little amount ( 26K) for someone in 2004 and bought energy, nat res, pm’s , and cdn eq using my own formula to weight the mix. That portfolio is worth 82K today without touching the mix in under 7 years…for a nice 45% p/a return…..a no brainer I’d say….so it just depends on how well you invest….Hint hint…….macro macro macro……………..the rest is just noise.

#45 smartalox on 04.11.11 at 12:21 am

Sign of the times?

HGTV is now running ‘Til Debt do us Part – that show where that pleasant Welsh woman invades the home of a couple and helps them come to terms with their financial liabilities.

In tonight’s episode, a 30-ish couple learns that they either have to sell their $320k house (they’re 88k in debt, before home payments) and the house needs $20k in repairs. He won’t sell their motorcycles, she won’t get a part time job, to offset her spending – and they WON’T sell the house and rent an equivalent place (for less), instead.

Kudos to the HGTV programers, they know what their fans will watch!

P.S.: Garth what did you think of that ‘puff piece’ on ‘F’ in Saturday’s Globe and Mail? How he and the bankers forecast the slack in the housing markets?

#46 wetcoaster on 04.11.11 at 12:27 am


Are those daily or weekly the injections they give you at Spadina and Front ? Bary Bonds is still in denial too.

#47 a prairie dawg on 04.11.11 at 12:27 am

The scum, trash, and vermin (raticus realestaticus) will subside when the realwhores® stop infesting this site.

Funny thing is, the moral majority out of Calgary might actually drive more traffic here with their ‘sex orgy’ rhetoric. Don’t they know what the top searched items on the internet actually are? (it’s not real estate) lol

#48 Kevin on 04.11.11 at 12:27 am

From Mike Shedlock

Australian Home Sales Sink, Luxury Units Sell for Half Cost; New Home Loans at 10-Year Low; Australia Retailers in Deep Trouble; Party is Now Officially Over

#49 BrianT on 04.11.11 at 12:35 am

#20Steve-My guess from reading your post is that you are quite young-probably early twenties. That has advantages (recklessness) and disadvantages (lack of experience). My advice to you would be to borrow as much as you can and buy as many TO condos as you possibly can-you are too young to be cautious and even if it doesn’t work out you will have learned some lessons. Good luck.

#50 LH on 04.11.11 at 12:52 am

Cheers for #20 Steveo!

#51 Timing is Everything on 04.11.11 at 12:54 am

#26 Tim said – “…he’s [Harper] spending an estimated 13-15 billion on mega prisons, even though crime has been trending lower.

Ya, but ‘unreported’ crime is goin’ thru the roof. You can take ‘Stock’ (-well Day) in that.

#52 Nostradamus Le Mad Vlad on 04.11.11 at 1:03 am

“The phenomenally unhealthy obsession with housing led me to establish this pathetic blog, and every time I talk to a vacuous, bottomless reservoir of hormonal desires like Sara, I am renewed.” — Hotdamnsonovagun, doncha jes’ luv being part of this depraved whorehouse of a blog! BTW, no one is saved once they enter. Once yer in, yer hooked 4ever!

“Pornography, swearing, nastiness and insults are pervasive. The blog now appeals mostly to scum, trash, and vermin . . .” — At last, I have found my true calling in life. Living in the gutters of this world has opened my eyes, ears, throat and nose immensely! This may have something to do with the previous pic — Possibly this pic of an explosion in a galaxy far, far away goes with the preceding pic. Interesting write-up as well.
#22 S.B. — “Wait, is that MissyBunny caressing the magazine??”

Caressing Garth, which gives a strong nudge as to why he is the flavor of the month on the cover!
DJIA topped out? “Wall St’s DOW JONES index is back up where it was just a short while back. It has recovered.” But it’s all empty money, full of nothingness.

Charts US Tax and Spend, like the NDP here, and Euro rate rise — that will mess things up more.

Silver Sell stocks and buy physical. Too expensive for moi, and Icelanders At least those people are telling bankers and politicos to stuff their talk right up where the sun don’t shine.

Too Hot To Handle Fukushima reactors.

H1N1 To go alongside drug cartels and murders, add this to the mix.

Fresh Water If the US has none, they will take Canada’s. Maybe that is why Harper and Obama quietly removed the border.

14:01 clip Ron Paul. Interesting idea — use Geithner to impeach Obama.

Science – Nature What are the bees saying? Shit, we’ve had enough and we’re off?

Africa So that’s why everybody’s going there. Rare Earths.

China Trying to keep inflation under wraps is like trying to hang a picture on a wall with Jell-O.

‘Quake and Shake time in Nevada. Must be those brothels. Ontario as well? “If their be a great rumble around here, I think most of the Ontario peninsula would be in trouble.”

HAARP Drilling ship right around Tokyo.

US Social Security If it wasn’t bankrupt before all these wars began, it sure soon will be. What of CPP / OAS / GIS?

Oz Home Sales and Two clips Gold is money. Is not. Is too!

#53 Kitchener1 on 04.11.11 at 1:13 am

Garth, you hit the nail on the head with this post.

The geezers will fight to work until they gasp their last bit of air.

Stupid-senile-dementia is kicking in.

So, boomers will be working hard into their 70’s and then what? the nursing home?

Really, i dont get these people, are they on crack?

We will be really screwed if that happens because that means that those jobs will not be filled by younger folks. Well, whose is going to be buying the boomers houses, stocks etc.. if they wont retire? Their kids will be living in their basements well into there 30’s cause they wont be able to support themselves with no jobs.

We should have mandatory retirement in Canada 65 and your done, out to pasture- glue factory, whatever but get out of the workforce.

And they all plan on working into their 70’s right now, thats without a real estate or stock market correction, what happens then? a minor correction or long term slump means they will be working into their 80’s? if RE tanks, or equity markets get hit hard.

#54 Your local martingale on 04.11.11 at 1:24 am

Hello Garth,

While your comments about over investment in real estate are spot on – that too many people have too much net worth riding on a single asset – I think you need to be a bit more consistent in your advice.

First, bonds do not necessarily rise with with declining stock markets. One of the biggest influences on both stock and bond markets are interest rates and both asset classes decline when rates rise. The 1987 crash was preceded by a sharp 1.5% rise in long term treasury rates which played no small part in the stock market crash. And if you look at the 1970s, both bonds and stocks proved awful in performance after inflation.

Second, the claim that stocks are ahead of themselves today is simply nonsense. There is no way you or anyone else could know that. In fact, I can tell you with great precision why no one knows if stocks are truly overvalued – even David Rosenberg doesn’t know (whose stock market predictions since early 2009, shall we charitably say, have been a bit off).

The reason for wide diversification is to take advantage of broad market efficiency. Diversification is simply the statement that the market is largely efficient and only compensates systematic risk. If you believe that the stock market is ahead of itself, you should not only be advertising a short position, but you should also be cautioning your readers on the stock market in general, unless they have found a brilliant active manager. Furthermore, if you believe in any sort of market efficiency, the stimulus has had no impact whatsoever, it’s a non-issue. Look up the Ricardian equivalence theorem as to why the stimulus has almost certainly had a zero effect. In fact, given the distortionary effect of taxation, the stimulus effect was probably negative and simply changed the composition of output.

Residential real estate is a mugs game because it is inefficient, loaded with market information asymmetries, has huge transaction costs, and has tremendous government distortion. Effectively, residential real estate requires taking on risk that is not compensated, hence houses are not an investment, they are a consumption asset. Furthermore, it is very hard to short houses to help cancel the effect of a possible speculative bubble.

So, Garth, be consistent. Either diversification works, reflecting market efficiency and the ultimate success of capitalism, or it does not, in which case it is possible to identify when the stock market is “ahead of itself” through casual observation. If that were the case, people would be no worse for wear if they stay invested in housing – they would just be trading one inefficiency for another.

#55 Isaac on 04.11.11 at 1:25 am

Garth, good article (as (almost) always) however I am a bit surprised of your contention regarding assets in TFSA.

As distributions in TFSA’s aren’t taxed, it makes sense to have TFSA-sheltered funds invested in income-yielding instruments – much like RRSP’s. TFSA and RRSP accounts aren’t much different in that respect.

Wouldn’t you agree that growth funds fit better in taxable accounts, along with investments in Canadian dividend-yielding companies (to take advantage of the dividend tax credit)?

#56 Crash on 04.11.11 at 1:30 am

In Vancouver Real Estate, when the “Asians” get involved (whether rumour or fact), it’s the ninth inning.

#57 Jane on 04.11.11 at 1:31 am

“scum, trash, and vermin” eh? If that is what we are, what does that make the Calgary realtor? Scared.

Love the cover, Garth!

#58 March of the Pigs on 04.11.11 at 2:02 am

undesirable crowd of the licentious and the wanton. HAHAHA awesome. You know someone has their panties tied in a not when…

#59 InvestX on 04.11.11 at 2:04 am

“Check out this comment in today’s Globe from academic George Athanassakos: “Canada is past the point of no return. What has propped up the housing market in Canada and delayed the correction is artificial demand from Asian investors. While it is not clear when this demand will dry up, it eventually will. Once it does, watch out.”

So even this academic supports the Asian investors theory?

#60 wes coast on 04.11.11 at 2:39 am

I prefer the title of vulture

#61 Ben on 04.11.11 at 2:45 am

At least our Balls aren’t hanging on the back Trucks,

#62 Daystar on 04.11.11 at 2:48 am

#20 Steveo on 04.10.11 at 10:45 pm

By far the best comment on the G & M article. Hilarious!

*I am disgusted at the ignorance of this article.* – Steveo

Im bored with the ignorance in comments like your own.

*Would it not be safer to bet that the writer of the article is not omnipotent and in fact prices will rise further for quite some time? – Steveo

Lets see if Steve offers any facts to back up his safe bet.

*Or the writer has been endowed with great foresight and is the only person who has found the exact top of the housing market?* – Steveo

Let me guess, Steve here is gonna endow us with his great foresight predicting the exact top of a housing market. Lets get ready folks!!

I work at Spadina and Front, in the densest condo area in Canada. Last month we helped sell 88 Units of a 300+ Pre Construction Development around $108 million to my calculations. – Steveo

That shouldnt make a guy bias, eh Steve! Hey, hes a RE pumper, a bonifide expert!!

*Our Clients come in with cash. Very few are Canadian, in fact a large percentage are overseas and I have never met them outside of an email and fintrac requirements.* – Steveo

Yeah, yeah, yeah, immigrants buy citizenships fast tracked ala Canadian immigration which requires $800,000 invested in Canada (GICs, buy RE) and another $800,000 in a bank account somewhere and lets hope its not leveraged on both ends… it usually is. Selling Canadian citizenship has no doubt helped Vancouver housing. So tell us, house pumper, something we dogs dont already know.

*There are 33 million people in Canada. Maybe 500,000 Millionaires.* – Steveo

A fair guess.

*There are 100 million millionaires trying to come here and they all buy a condo.* – Steveo

This guess is… not so fair. Your argument is falling to pieces right here, right now. Canada is a good nation, no bones about it. Lots of space, lots to do, but it doesnt offer the best of everything and I can assure you there arent 100 million citizenship applications to be here. We are lucky if we get 15 million visitor visas in Canada annually and the majority arent millionaires. I gotta wonder if Steveo here can count past 500,000.

*Harper opened the immigration floodgates last June. By the looks of this article Harper was right. Harper could not leave the growth of Canada up to the Citizens of this Country. We are inherently lazy with little risk appetite. The foreigners come here and create the factories and businesses and the jobs and he is only letting in immigrants with 300k-500k in a GIC. I meet them everyday.* – Steveo

Essentially, what you are saying in a nutshell is that the rest of us Canadians who were born here, inherited laziness because most wont buy 1,000 sq ft shacks for a mil in Vancouver, that it is only immigrants that work, take risks, create jobs (by buying $500,000 condos in Toronto and 1,000 sq ft shacks for a mil in Vancouver), and you base this one what… assumed monetary wealth. Status. Boring.

*If you do not buy property now in Toronto you and your kids will be priced out of the market for a generation or more.* – Steveo

These are most definitely the words of a hypocrite now.

*Or the writer has been endowed with great foresight and is the only person who has found the exact top of the housing market?* – Steveo

One who has proven to be quite high on himself to boot.

*Stop complaining you do not have any money and get in the game now as a group, as an individual. However you can.* – Steveo

We Canucks are inheritantly lazy and now we are a bunch of broke bitches who now must, according to Steveoès seer sage wisdom borrow as much as we can to buy a house cause valuations are going to rise for a nother decade because Steve says so. Apparently, Canada and Asia is recession proof cause weve got Steve Harper and Asia has capitalism and is therefore recession proof so things will not sour with RE for at least a decade, blah, blah, blah…

*This article is written by a fellow that makes 50k a year and can not count past a million.* – Steveo

I smell hypocracy and ignorance when I read this stuff and it truly is boring, Steve-o (who calls themselves Steveo, get another moniker, this one sucks and is toast anyway).

*It is easier for him to complain than to try to understand what is happening.* – Steveo

More ignorance and hypocracy. Its boring.

*There are no coincidences in markets. Things are the way the are for a reason. Seek out that reason.* – Steveo

When you learn to undestand the causal effects of interest rates, CMHC regs (i.e. credit policy from government, its been easy to borrow, in the future it wont be far from easy to service) and overdevelopment vs population growth (how do you spell oversupply) have on the valuations of RE in this nation and that we are not an island with a government that has done everything it can to create rapid asset inflation driven almost solely by credit without strong earnings to support it and just why that is so dangerous for any government to do this to their nation Steve, you will begin to have an inkling as to how presently ignorant you truly are.

Until then Steve oh, you represent with pious banality a hypocrite in boring fashion… a whining, complaining, rude, uppitant, naive and yes, most definitely ignorant hypocrite that is without a doubt on the worst half of boring reads. For both our sakes (I may be less than kind in the future), dont suffer me a rebuttal to explain exactly why that is.

#63 Painted Toenails on 04.11.11 at 2:53 am

Have heard it for several months (heck, actually two or more years!) now. Asian Investors. Chinese money.

My son’s friend from Uni told me her parents sold their house in Vancouver to Chinese buyers. I thought ‘ok’. First real sign that i could CONFIRM because I know them.

Today. The second.

Met a former colleague and her husband for a nice ‘welcome back to the Island’ bevvie. They’ve moved back after having been in Van for quite a few years. They renovate and sell houses in addition to their regular professional gigs. Not really flippers, just smart and savvy folks who know how to work hard.

Sold their Van house first day they had it on the market. 4 offers. All Chinese. Mainland, not Hong Kong. Almost 100 big ones over asking.

Confirms it for me. The bubble here in Vic popped almost a year ago. Vancouver is popping as we speak.

Risk adverse? Who isn’t? So why stay in residential Real Estate? Be conservative. Rent.

#64 Jas Girn on 04.11.11 at 3:04 am

So now, we followers of Garth are scum. Gee thanks. Better to be scum than an idiot.

BTW, Steveo must be BOB TRUMAN.

#65 KJ on 04.11.11 at 3:10 am

A sobering way to cure a housing addiction is to visit a cemetery. Think of the folks lying buried there. We hope, at rest…

Houses, stock portfolios, stacks of gold coins look at the dead with indifference. Will these things give us any comfort when we draw our last breath?

If the answer is yes, we are truly mad.

#66 VanLarry on 04.11.11 at 3:24 am

“Depravity has overtaken the Greater Fool with harder drugs required to keep the troops in line and to prevent a mutiny. Pornography, swearing, nastiness and insults are pervasive. The blog now appeals mostly to scum, trash, and vermin (the consensus is that his readers are all realtors). The lewd language and sexual obsession has attracted an undesirable crowd of the licentious and the wanton.”

I didn’t realize we’re all into leather now. Oh man, the things I learned!

#67 Aquarian on 04.11.11 at 3:37 am

I’m with rich renter! The insults
always fly when you’ve hit a nerve!
I’ve only got thanks for you Garth, you’ve helped me
overcome my pregnant hormones and stay away from RE. It’s easy once you’ve really got some issues to consider.

#68 Whistle punk on 04.11.11 at 3:54 am

People start throwing insults when they know damn well there is troubles they don’t want to admit it.

The real world will hit most people like a ton of bricks, ignorance is bliss.

Any way you slice it Canada is screwed look at the USA we are no different.

#69 Inflation on 04.11.11 at 4:59 am

#11 squidly77 “(Bob Truman) An embarrassment to all Calgary realtors.
For public complaints about the behaviour of CREB members e-mail here.

Complaint formally submitted to the CREB(R)

“Thanks for submitting your comments or problems. The information has been sent to the appropriate personnel to be addressed.

For immediate support, please contact us by phone at 403-263-0530.”

#70 TS on 04.11.11 at 6:09 am

Housing: Real insanity
From Canadian Business magazine, April 25, 2011

#71 Mortgage girl on 04.11.11 at 6:33 am

I think real estate agents are going to see a big change now that you can list your house on MLS for a flat fee and deal direct with buyers.

#72 Oasis on 04.11.11 at 6:49 am

interesting you quote the professor when you fell like it. how about his previous artile.

“I expect bond investors to wake up eventually, lick their wounds and then kick themselves for being so gullible as to believe the reported inflation statistics.”

Anyone overweight in any asset class these days will be unhappy. — Garth

#73 BPOE on 04.11.11 at 7:02 am

Folks, Vancouver won’t be affected at all by any kind of a Chinese collapse. Folks, they all already live here, so no collapse in China would matter!!! Folks, they would never want to live elsewhere in another city, say Seattle, where the economy is better, there’s better weather, better healthcare, better food, better shopping, a shit tonne more people, better arts, better music scene, better infrastructure, better educational system, far more educated people with higher education degrees, and generally better quality of life. NO WAY! Instead, folks, the Chinese want to live HERE in Vancouver where you can be blissfully ignorant and devoid of any other culture or way of life outside of Vancouver! We don’t want any smart people here and instead we love to have the open door to lemming-like behavior. It is truly amazing to wake up every morning and realize I live here! I mean, where else can you pay a million dollars for jack shit? I feel so blessed to be ass-rogered by my creditors every waking minute of every day. Don’t be concerned with actual inventory numbers and the fact we have five times the inventory of a healthy and sustainable market. Any unsold spaces will simply be put into a “friends and family” pool to be handed out on an as-needed basis when they come to visit you… FOR FREE! That’s right, folks, here in Vancouver that’s what we’re going to do, or some shit like that I am for sure. I just felt something kick in my belly. Folks, we are also going to hand out these empty condos to the homeless, the whores, and the who-done-its! We believe in helping our lowly, self-loathing renter types out there. We give them hand outs – not a hand up! F*CK! That really hurt. What’s that?!?! Is that water running down my inner thigh? Folks, you really need to come here and check it out. We have the water, the mountains, fresh air, the Asian mafia, safe houses, crack on every corner, amazing trannies, crabs, stupid buyers (clearly), and lots of Asian food! Speaking of which, I thought I was just hungry all the time because all I get around here is Chinese food. Shit – I’m so hungry all the time, I could eat a baby’s ass through a park bench for about the past nine months. Man, that’s NASTY!!! I just felt another kick, punch, then left hook in my tummy! think I have to go drop a deuce of monumental proportions. Folks, once you get here, you’ll get it. Just turn on the T.V. while you’r in your hotel room (before you go out to look at our amazing real estate), and you’ll see for yourself that our media will tell you the same thin! We’re totally wicked awesome and we are edukated and smaart and bedder than everyone else and bigger than we really are and the fake statistiks are always fun two. Seriously, it feels like I’m stretching a gnat’s ass over a watermelon. This is killing me. For the love of god and all that is holy, someone please help me rid my body of this ailment from within. Deep breaths, deep, deep breaths. I’m trying to hold it together… Folks, people here don’t give a shit about the economy, or what a house costs, or jobs, or werking, or gedding smaarter in colledge. Folks, it is an anomoly you will never understa…. MY GOD! THAT ISN’T RIGHT! Did I just drop a new baby boy in the toilet? OMG!!! He looks just like that tranny midget wrestler who pulled that Mexican train on me and finished it all off wit a hot Carl on me last July. Ohhhhh Ramone. I sure miss you, Ramone. I guess that “minor” operation I had a few years back didn’t really take hold… That, or the doctors forgot to remove my wajina. It don’t matter to me. Imma take care of MY baby. Imma call him lil’ Butter Bean. That’s right – Butter Bean BPOE. I guess I should take him out of the toilet and I should somehow cut this cord. On second thought, I don’t really want lil’ Butter Bean… Maybe I should drop him off at that shelter over on Davie Street. I can’t have some ankle biter cramping my style. ‘Sides, I need to go sell a house or something. Folks, what should I do with lil’ Butter Bean? Any suggestions? I feel so confused now. Ummmmmmmmm, errrrrrrrrrrr, go CANADA!

#74 Guan-Di on 04.11.11 at 7:20 am

Hey, I may be scummy vermin and I may be trash, but I’m certainly not… wait was the other thing?

The promise of increasing the TFSA limit makes me laugh, not so much because of the whole “after we balance the budget” part (which admitedly is pretty funny), but the idea that the average Canadian family has put itself in a financial position where saving $20,000 a year is a possibility. I mean a lot of people COULD do it, but will simply choose not to. After all my significant other and I are the only people we know who have RESPs for their kids (friends, colleagues, family). Saving is just not in the mindset of the average Canadian anymore. I have friends who recently bought a house, their payments will be 30% more than what they were paying in rent the logic behind the move: “it’ll force us to save”. Yeah, sure, exactly the kind of people who will have the discipline to reign in their expenses and spending to cover the extra costs of ownership. I would laugh, I used to laugh… but it’s starting to move from the laughable to the pathetic.

#75 Moneta on 04.11.11 at 7:58 am

We should have mandatory retirement in Canada 65 and your done, out to pasture- glue factory, whatever but get out of the workforce
Frankly, I’m not too worried. People with skills will rise to the surface.

As soon as people get a a little too expensive, they get squeezed out. Look at the % of people in their 50s who are getting that treatment. And we have not even seen the shakeout in DB pensions yet!

#76 Moneta on 04.11.11 at 8:22 am

Last year while on a contract, I ended up in the middle of a boomer conversation about muni taxes.

They were pissed about the new recycling methods and how it was costing more. I told them to get used to it, muni taxes are going up no matter what. They looked at me as if I was a heretic. One asked me why I like paying taxes. I chuckled and explained that I did not like paying them, I was just being realistic. We’re building McMansions everywhere when we can’t even maintain what we have in the best of times! In case you have not noticed, the INFRASTRUCTURE ALL AROUND YOU IS CRUMBLING!

A couple of years ago in Montreal, when dropping off my daughter at school in the morning, it was surreal. Stepford Wives in their 80K+ SUVs, dropping off the kids at a run down 1950s full of mould and the air probably filled with traces of asbestos. That picture of reality was such a contrast to the nice glossy brochures they hand out when shopping for a car.

Which brings me back to a few years before that when they doubled school taxes (about 200$ to 400$) and on the front page of the paper there was an older boomer leaning on his 100K+ Mercedes complaining that he had to pay more school taxes when he had no children. He preferred giving his money to foreigners than investing in people that could help him in his old age.

Man do we have problems in this country.

This came out a couple of weeks ago in La Presse, and just made it in the G&M:

#77 SMOKING MAN on 04.11.11 at 8:24 am

The USA has hit bottom and a massive turn around in the economy is taking place, right now. My little WebCrawler’s and the little voice inside my head is screaming buy USA.

When the March data is released people will be shocked at this massive turnaround. A friend of mine owns a ford dealership in Buffalo, March was the best month he has had in 5 years, very little inventory left.

That will be good news for RE in Ontario. You will see slightly higher rates down the road but nice jobs and good wage growth. Crash, ha not going to happen, it’s different here, and it really is different here.

#78 Junius on 04.11.11 at 8:25 am

#73 BPOE (impressionist),

You are hilarious! I had to read beyond the first third of your posting to know it wasn’t the real BPOE.

thanks for the laugh.

#79 S.B. on 04.11.11 at 8:28 am

A peek into the future? Interesting twist:

Is This the Future?—(From the Jakarta Post
26 March 2011)

Day in the life of the US president in 2025

Dr. Kai-Alexander Schlevogt, Associate Professor
NUS Business School and former Associate at Harvard

The US president, Rosalinda Rodriguez,
daughter of illegal Mexican immigrants, visits
China to attend the A4 meeting. It is permanently
hosted in Shanghai, the largest city on

The clean air is purified and scented by giant
multifunction fragrance dispensers. The temperature
is adjusted through outside air conditioners.
A successor to the G8, the group of the world
most productive nations, A3, include China,
India, and Russia. The exclusive club was just
renamed A4 after the recent admission of the

The US president’s limousine, which was
manufactured in China after the entire auto
industry had left the US, enters the gates of
the 300-story Shangri-La Hotel.

The Chinese president recounts how he received
the Nobel Prize for brokering a Middle
East settlement.

The US is publicly reprimanded for secretly
trying to revive a nuclear program after the
UN, headquartered in HK, had forced it to
abandon its nuclear status.

The Chinese president finally turns off the microphone
of the US delegations, which claims
the program serves only civilian purposes.
A request for a pardon of the top 100 US war
criminals, who serve life sentences in the Singapore
detention center of the World Court of
Justice since the Iraq War is rejected.

(1) Jakarta Post, 26 March 2011

#80 Junius on 04.11.11 at 8:35 am

#25 Tim,

You asked, “Are Asians propping up demand in Vancouver like so many people here think, or are they not? Are there any numbers to support this?”

There are no hard numbers to support this. This is why it is so anecdotal and difficult to quantify.

Clearly there are lots of Asian buyers and some investors in Vancouver. That has been the case for decades so it is nothing new.

However there does appear to be a relative spike in Asian investors at the top end. My sources tell me there is a lot of concern in China these days that the gov’t is going to crack down on a number of things including capital leaving the country. It is likely we are seeing a surge as a result of money leaving China for safer havens in anticipation of this and a slow down in their economy.

If this is the case, like the Hong Kong surge in the 90s, it means that it is temporary and will not sustain the housing market. My view continues to be that the perception of a never ending supply of Asian investors is still more important than the reality. However there is an underlying reality that is used to stoke fears and sustain the current greed cycle.

We are now set for a perfect storm events in 2011 to blow the lid off of the market in Vancouver. The pool of greater fools is now exhausted. CMHC rules have tightened. Interest rates will rise. Debt levels are beyond the breaking point for most households. Our local economy has slowed and is perhaps slipping back into recession. Commodities will weaken. And China’s real estate market will burst in spectacular fashion.

It will be an interesting year.

#81 Moneta on 04.11.11 at 8:37 am

We’re building McMansions everywhere when we can’t even maintain what we have in the best of times! In case you have not noticed, the INFRASTRUCTURE ALL AROUND YOU IS CRUMBLING!
The irony is that this group included managers for infrastructure funds!!!!

#82 L Pearson on 04.11.11 at 8:37 am

#45 smartalox on 04.11.11 at 12:21 am

That pleasant ‘Welsh’ woman is from Jamaica. Great accent eh?

#83 S.B. on 04.11.11 at 8:55 am

Here’s a MLS map of Front & Spadina area in Toronto. Look at the massive shortage of condo inventory!! :roll:

Add to this the as-yet-unsold & unbuild condos in the area. Oh yes, there are many others in the pipeline.

#84 tiedattutu on 04.11.11 at 8:56 am

OMG. You’re gorgeous! At first, I didn’t even notice the hag, but at least she has good taste in eye candy.

#85 Nemesis on 04.11.11 at 9:16 am

“…scum, trash, and vermin… lewd language and sexual obsession… [an] undesirable crowd of the licentious and the wanton.” – BobTrumanRealtor™

No wonder it’s so much fun here! I’ll bet Truman doesn’t like motorcycles either.

I’ll leave the retort to another, more durable/poetic Bob…

“…Look out kid, you’re going to get hit
By users, cheaters, six-time losers hang around the theaters
Girl by the whirlpool looking for a new fool
Don’t follow leaders, watch the parking meters”…

Subterranean Homesick Blues

#86 Stevo on 04.11.11 at 9:18 am

What I posted (#20) was a comment on the Globe & Mail site – it was posted by someone else there. I thought it was hilarious. (and can’t believe how insane some people are)

#87 brainsail on 04.11.11 at 9:22 am

Countries with the Most Millionaire Households 2010

Canada 162,143

China 670,000

US 4,715,000

#88 The Phantom on 04.11.11 at 9:22 am

Good Day Garth:

I was somewhat dismayed by the comments that were attributed me by the Calgary RE agent. I could have done more justice possibly by remaining silent but feel compelled to reply that I have represented and defended the Principles, Interests and Values of this country for a number of years already and continue to do so. If, by reading this blog and perhaps subscribing to some of the opinions expressed herein makes me worthy of the adjectives “scum, trash, and vermin”, notwithstanding the fact that I have served my country through the profession of arms and defended the rights and freedoms of Canadians, including this individual who exercises his Freedom of Expression so capriciously, then I suppose that I will merely shake my head with dismay and charitably conclude with mt fellow blogger Jane (post #57) that this fellow is running scared.

The Phantom

#89 S.B. on 04.11.11 at 9:28 am

The Financial Post reports in its Saturday edition that real estate may be a “secret” tax shelter because few advisers make money recommending its purchase. The Post’s Jonathan Chevreau writes that a study by Chicago-based Ibbotson Associates found real estate investment trusts boost return, even when adjusted for risk, if a 10- to 20-per-cent weighting is added to traditional portfolio of stocks and bonds. Anything you do as a landlord can also be realized through individual REITS or exchange-traded funds holding baskets of them. Many REITs or ETFs are publicly traded, but investors can instead choose private real estate deals, which are less likely to move in tandem with stocks, says David Kaufman, president of Westcourt Capital, says, “I can’t think of a compelling reason why you’d own real estate if you could find a well-run REIT or why anyone would provide a private mortgage to the guy down the street when you can buy a well-run MIC.” MICs are mortgage investment corporations, which can be private or public ones like Timbercreek or Firm Capital. Payout may be 8 per cent a year, but MICs are less tax-effective than REITs because they spin out 100-per-cent income, taxed like interest or earned income.

© 2011 Canjex Publishing Ltd.

#90 Oasis on 04.11.11 at 9:36 am

Anyone overweight in any asset class these days will be unhappy. — Garth

i’ve been perfectly happy holding the bulk of my assets in gold and silver bullion the last 7 years.

on another note, the pathetic US lira can’t even muster an oversold bounce today. if anyone still has money in that sad currency, they can still diversify into Swedish and Norwegian currencies, along wth Euros and British pounds to protect themselves. and of course, commodities.

#91 sue on 04.11.11 at 9:37 am

This is something I’ve been wondering about. Is it wise to use a financial advisor from the States? I abs worship Peter Schiff and he makes a tonne of dough for clients. It’s Europacific I think. Any pitfalls?

Yes. It is not allowed. — Garth

#92 Victoria on 04.11.11 at 9:53 am

Here is another text message from my friend in Ireland.

u get into the zone thinking ur worth more than u really are because of ur real estate net worth and when the sky falls in u realise how silly we all were thinking we were millionaires…thats the way it was here..u think it can only go one way…well the bigger the bubble, the harder the landing…dont know much about the canada mkt but u have the rite idea nancy…..we had a few guys calling the end of the bubble and everyone laughed at them……

#93 tiedattutu on 04.11.11 at 9:59 am


Be careful of Schiff. In the FC his clients lost an obscene amount of money. True they have recovered, but be ready for volatility like you’ve never seen.

#94 Fuzzy on 04.11.11 at 10:21 am

So what does the CDIC guarantee in RRSP accounts?

#95 Mr. Plow on 04.11.11 at 10:22 am

#88 brainsail

Per capita might be more useful stat.

Since the overall population of the US and China dwarfs ours.

#96 Mr. Plow on 04.11.11 at 10:23 am

@ Junius…

I’m surprised you of all people would encourage any form of impersonating after your lengthy “fake Junius” user.

#97 S.B. on 04.11.11 at 10:24 am

Meanwhile, a few Km. away from Front & Spadina in Toronto we have a new building with 65 units for sale on MLS! With 15 more beside it.
Speckers and flippers.

This will not end well.

#98 Mr. Plow on 04.11.11 at 10:29 am

#11 squidly77

When you made your complaint did you use a real name so the realtor in question could face his accuser or did you hide behind your online name?

#99 Ex-Cowtown on 04.11.11 at 10:37 am

Just reviewed Bob Truman’s Calgary RE website. Utterly hilarious. Even funnier than than BPOE. Gotta love it when not-funny talentless people attempt to step up to the mike. It just makes me shiver with the impending embarrassment.

Anyway, the #’s speak for themselves; Calgary RE sales down 20% YOY. Dress it up anyway you want, but it is just ugly there and getting uglier. And $100+ oil won’t stop it, as Calgary and Alberta rely on Natural Gas prices. A $6 (as opposed to the present $3.50) natural gas price would do more to help out Alberta than $120 oil.

To put it in perspective, on a purely energy containing basis, oil should trade at 6X natural gas or $20. Usually though, the factor is 10X, so we could expect $35/bbl. The ratio now is closer to 32X. It shows how devastated the natural gas industry in in AB. We should be getting around $12/mcf for gas and we’re getting $3.50.

And that’s why Calgary RE will continue to crash.

#100 Mikey the Realtor on 04.11.11 at 10:44 am


You are right, sir. It is all great news and RE will become extremely profitable for most, not the pups though. Thanks for that bag you threw my way, the stuff is strong but the best I ever had.

#101 GregW, Oakville on 04.11.11 at 10:49 am

Hi Garth,

“Our lives begin to end the day we become silent about the things that matter.”
Martin Luther King Jr.

“First they ignore you. Then they laugh at you. Then they fight you. Then you win.” – Mahatma Gandhi

My good friend forwarded this on to me today.
“Peter Russell was one of my profs in Political Science at U of T, highly respected. This article in the Ottawa Citizen was sent to me today. And just today one of our canvassers, a woman from China said to me I came to Canada to escape a dictatorship and now I could be living in another one. That is why she is volunteering to elect a Liberal in Oakville riding. Pass it along.”

FYI; Lisa RaittMP for HarperPM said on thur., “she thinks the cameras should be taken out of the House of Commons.” When answering a question about the lack of civility in Parliament’s question period.

#102 carl on 04.11.11 at 10:50 am

watch out! When “they” cover their ass……

The game might be up and the “shorts” (no the orange type), in…..a la Paulson.

Linda McQuaig, The Trouble billionaires, 2010.

#103 Utopia on 04.11.11 at 10:50 am

More about the die-off of our bees and wild pollinators.

Some of you have already seen a portion of this story posted here. The whole story is online now. Comments are appreciated if you are as concerned about this issue as I am.

I think it is important that the folks who regulate agricultural chemicals hear from the public and understand we do care about the state of the planet and our food security.

Incredibly though, until now, and despite widespread warnings, the message is not getting through. Why?Because too few are objecting so it is not seen as a priority for regulators.

Here is the article:

#104 GregW, Oakville on 04.11.11 at 10:59 am

Hi Garth, FYI; G20 testimonials Tuesday

People are invited to come out to a public forum where they can hear testimonials of injuries and imprisonment suffered at the G20 Summit in Toronto.

The event, Is This What Democracy Looks Like?, is on Tuesday, April 12 at the Lourice Mediterranean Cuisine.

The forum is free, but people are asked for donations to help pay for legal costs of individuals facing court charges from the G20. The event is presented by the Halton Peace Network, along with other groups.

The forum starts at 7 p.m. The restaurant is located at 1289 Marlborough Court.–g20-testimonials-tuesday

#105 Joe on 04.11.11 at 11:02 am

#8 nonplused: “I still don’t see rising taxes without some sort of revolt.”

A revolt in Canada? Dream on! “What, they’re raising my taxes. Those lousy politicians, blah, blah, blah, complain, complain — oh, The Unit’s on. I haven’t seen this episode.” And life goes on.

#106 BPOE on 04.11.11 at 11:11 am

Folks, I’m just returning from the free clinic. It is official… Lil’ Butter Bean is indeed half human, coming from his father’s side, Ramone, of course. Imma have to find a job or somethin to support this lil’ bastard child. How long does it take for a kid to get old enough to fend for himself? Couldn’t take more than two, maybe three years. Hell, I see those kids in Mexico pulling out those packages of Chicklets gum at around 2 years old. No free rides around here, lil’ Butter Bean. I think he may be stupid or something because all he keeps saying is, “blugh goo goo cucucucu mmmmmmmmmmm ahhhhhhhhhhhh!
I don’t get it, really. Or, I could sell him on the Chinese black market. Thank goodness he has blonde hair and blue eyes! I’m sure he’ll bring somewhere around $25,000, a dinner at White Spot, and a carton of Marlborough Reds on the black market. Hmmmm. What to do? Options galore only complicate the matter even more. Not to mention the little bastard owes me for the reconstructive surgery I’m going to need on my giblets in my nether region. Folks, kids are expensive! But it don’t matter because I live in Vancouver where reality ceases to exist. I do what I want and when I want. Ugh! The insanity of parenthood. Fiddlesticks!

#107 Joe on 04.11.11 at 11:13 am

#73 BPOE poser: Um, dude, I don’t know about you anymore. Your first few posts were pretty darn funny, ie the crabs, but now they’re kind of weird.

#108 VICTORIA TEA PARTY on 04.11.11 at 11:23 am


The difference between Bob Truman and Garth, is that Mr. Truman has never had the privilege of sitting around the Cabinet table in Ottawa as a representative of ALL CANADIANS.

That gave Mr. Garth a world view of things the rest of us historian-wannabes (and real estate whackjobs) can only dream about achieving in our own experience.

What an opportuntiy that was for Garth; an opportunity that was never wasted. Instead it was invested in his blog, to some degree, and therefore became of benefit to those of us sitting on the margins, of whatever little world we occupy, desperately trying to figure out what the hell’s REALLY going on.

Our glorious blogger-leader may have miscalculated a few dates in Canadian real estate history, but he was bang-on in forecasting the events which have occurred, and in the trends that underlie those events through our current history.

We’re all familiar with Garth’s comments, literate and funny. Contrast those with Mr. Truman’s comments and you get a Tale of Two Bloggers, one focussed and useful the other fulminating and useless. Mr Truman:

“Depravity has overtaken the Greater Fool with harder drugs required to keep the troops in line and to prevent a mutiny. Pornography, swearing, nastiness and insults are pervasive. The blog now appeals mostly to scum, trash, and vermin(the consensus is that his readers are all realtors). The lewd language and sexual obsession has attracted an undesirable crowd of the licentious and the wanton. (Suddenly Garth’s readers have a craving for Chinese food).

With industriousness and creativity, Turner has built a lucrative business on the fear of a housing crash, but is it sustainable? How many rain dances are you entitled to before the drought-stricken come at you with pitchforks? How many new brands of snake oil will you be able to sell to the same gullible person? How long can you blog 24-7 before you have to take a holiday? Besides, it’s dangerous to work on your laptop while riding a Harley, and he may not wish to tempt fate any longer.”

For Mr. Truman, this reality. It’s dangerous work trying to make a living in one real estate market. All eggs in one basket.

Being young, you may need some of your older more viperous real esate buds and buddesses to tell you their real estate war stories from 1980 to 1982 in Calgary.

That real estate market was simply killed outright back then as Alberta was simultaneously smacked down by recession brought on by high interest rates and PM Trudeau’s ghastly National Energy Program where drilling rigs high-tailed it to Montana in droves.

Our family lived in Calgary then and saw that happen. The town became a property wasteland in very short order. It simply amazed me how, literally overnight, a real esate market could plunge into the abyss.

It was a shuddering experience because we owned two homes in that town and we got out only slightly scorched, a very hard lesson learned very, very quickly.

I don’t know if Calgarians are ready for a rinse and repeat, Mr. Truman, but it’s coming. Sure as shootin’.

Do you have the brass to survive that? It’ll take more than poor sentence structure to make that grade.

#109 GC in AB on 04.11.11 at 11:23 am

Hopefully this realtor gets reined in by his professional association. The last thing these “professionals” need is another moron speaking out on their behalf. The good news for Bob is that he may have a future as a thesaurus searcher. That paragraph probably took him about 3 hours, but with a bit more work I could see him losing his training wheels and becoming a true expert.

Ps. Bob, you really need to learn how to pick your fights. From one vermin to another, please don’t embarrass yourself in front of the whole country again.

#110 realist on 04.11.11 at 11:25 am

Housing corrections in Canada have always been associated with recessions. It appears that you can’t have one without the other.

Our government, no matter which party wins this election, will do everything in their power to prevent that from happening.

#111 GregW, Oakville on 04.11.11 at 11:41 am

Hi Garth, Iggy said this morning in Kingston he thinks electronic vote counting might be a good idea and we should look into it. Harper wants it too!!!

Has he seen this YouTube link to the sworn testimony of a computer programer in the USA regarding computer voting fraud he took part in inadvertantly. 9min.

Proof of voter fraud in the USA – from the horse’s mouth. 9min

We are all screwed if our votes are not on paper and counted by our neighbours hands!

#112 wetcoaster on 04.11.11 at 11:48 am

I get a howl out of these self serving mortgage brokers that try to justify that 5% down payments is nothing to worry about. They try to say they have been around for 20 years but fail to see the reality that they have only been used on a mass scale the last 5 years or so.

Previously going the CMHC route was akin to borrowing from Money Mart or Household Finance vaccum cleaner lenders and you must have had very bad credit AKA “have no business buying in the first place”.

Always a sign of a market top when the brokers grasp at mathematical default straws and fail to realize their business is built on emotion and greed. When there is no more easy money to be made, the emotions change.

Wake up time dudes, quit blaming those few in the media who have a brain and think independently.

#113 Moneta on 04.11.11 at 12:00 pm

Utopia on 04.11.11 at 10:50 am
More about the die-off of our bees and wild pollinators.
I care about the environment but IMO, it’s a lost cause.

Firstly, honey bees are not native to North America.

There is a simple reason why natives here in North America were not as “civilized” as in Europe, life was not as cushy. For example, domesticable animals were rare. That’s why our first Europeans settlerrs brought everything they needed to reproduce their quality of life here with complete disregard for the environment: horses, honey bees, fruit tree, etc.

Environmentally speaking, North America was dooned the day Europeans set foot here. So why is it surprising that we are having trouble with honey bees which should not even be here in the first place?

#114 GregW, Oakville on 04.11.11 at 12:04 pm

Hi Garth, FYI
Date: Mon. Apr. 11 2011 10:00 AM ET
Stephen Harper’s Conservatives misled Parliament when campaigning for $50 million to spend in one of their ministers’ ridings during the G8 Summit, says the auditor general in a report leaked to The Canadian Press.

#115 WINNIPEGER on 04.11.11 at 12:11 pm

Signs point to a severe housing correction in Canada

The resilience of the Canadian housing market has confounded experts. While other property markets around the world have plunged, real estate prices in this country continue to reach new heights.

If the Canadian housing market does falter, the impact on the economy will be profound. Consumer spending and housing investment will feel the pain, and the Canadian Mortgage and Housing Corp., which provides mortgage loan insurance, will face substantial losses.

Link already posted. — Garth

#116 Patz on 04.11.11 at 12:17 pm

Moneta, agreed we are somewhat, although existentially (gag me) not, off topic. Thanks for the link to the Wired article. If you’re interested this is the best book I’ve seen on the subject: How the Mind Works by Steven Pinker

#117 Rick in Japan on 04.11.11 at 12:20 pm

Hi Garth,

I’ve been to busy with my dissertation (and other issues that are related to March11th) to write much. . .but, still proud to be one of your ” scum, trash, and vermin”.

#118 Taiwan is not China on 04.11.11 at 12:29 pm

Can someone with time…please start a first-time buyers strike in Canada, just like in Australia ??? This is getting ridiculous and realtors are really getting annoying….Need to get the message out in facebook.

#119 Kevin in Winnipeg on 04.11.11 at 12:33 pm

The Canadian public school system should be embarrassed by it’s lack of an investment and money management curriculum. Why is that? Money and investing are such a huge part of daily life.

It would be in the Government’s best interest to have well educated investors. Young people are not going to learn it at home because of the generational lack of knowledge being passed down from parents.

#120 Stevo on 04.11.11 at 1:00 pm

#121 Utopia on 04.11.11 at 1:04 pm

#114 Moneta

You seem to have overlooked the fact that wild pollinators and Bumblebees are also in steep decline.

That should concern you as these insects are instrumental in the continuity of the web of biodiversity. Without them, a multitude of wild flowering plants and trees are also at risk.

Seriously Moneta, you are much more of a fatalist than I might have suspected.

#122 realpaul on 04.11.11 at 1:20 pm

Intrest rates could quadruple in the next year says Brit bank advisor. Reason…… control the rampant inflation that no one in the CDN political scene wants to acknowledge due to the constant campaign by two power mad camps.

The fact is that debt has soared along with the wild printing of debased currency ( Canada as guilty as the US on this front having had a ten year paper printing M3 spree of 14% p/a) and it has to be paid back.

A majority vote for either side will result in a whole lot of truth coming out. Harpers been pandering for his dream majority and has run up a tab the size of which has never been seen. Iggy has promises to keep when he gets back into office. The Libs have been starving since the glory days of gluttony and want to make up lost ground. None of these people have any thought of whats going to happen on ‘Main St” when the whip comes down.

#123 Samson on 04.11.11 at 1:22 pm

Garth’s message isn’t for everybody folks.

But it is for some people, especially young couples who are about to make decisions that could influence their economic future for many years to come.

The real value Garth offers young couples is a difference of opinion from the status quo. That doesn’t necessarily make it right or wrong.

And that doesn’t even matter. What matters most is – his opinion is different.

Young couples don’t have to do what Garth says. But it might be a good idea to listen to what he’s saying, along with a diverse selection of opinions from other people. Yes, even the house “pumpers.”

The real danger is groupthink, the favorite of lemmings. And you know what happens to them. So – let’s hear some more heresy, please.

And it seems pointless to argue with others whose interests are deeply vested in the status quo. Let’s remember the words of Upton Sinclair:

“It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

#124 Junius on 04.11.11 at 1:26 pm

#111 realist,

You said, “Our government, no matter which party wins this election, will do everything in their power to prevent that from happening.”

You should change your name to deluded optimist. Our gov’t has thrown everything they had a housing for the past 5 years or more. They are pretty much out of bullets.

Look at what happened in the US, UK, Spain, Ireland and now in Australia. You think there gov’ts didn’t try to keep the housing market afloat?

We are having an election now because Harper knows what is coming. If he doesn’t get a majority now he never will. Everybody but the general public knows what lies ahead. You are just kidding yourself if you think they can keep propping this up forever.

#125 new_era on 04.11.11 at 1:27 pm

Man who wants to live in Winter-pig (Winnipeg)

I worked there for a year. Its not a place I would retire in, instead I viewed it as a “LIFE SENTENCE” like a siberian prison camp.

Man its an harsh environment.

#126 Junius on 04.11.11 at 1:31 pm

#98 Mr. Plow,

Fair enough. Hopefully he will choose a different name in the future that clearly identifies who he is mimicking.

#127 maxx on 04.11.11 at 1:32 pm

“Depravity has overtaken the Greater Fool with harder drugs required to keep the troops in line and to prevent a mutiny. Pornography, swearing, nastiness and insults are pervasive. The blog now appeals mostly to scum, trash, and vermin (the consensus is that his readers are all realtors). The lewd language and sexual obsession has attracted an undesirable crowd of the licentious and the wanton.”

I have a realtor diploma but do not practice. I’ve seen first-hand what many realtors are truly like. One told me that getting a sales commission was like a drug-induced high.
This flailing, wholesale attempt at tarring all of the blogs participants is transparent, weak and beyond bible-bashing. No doubt whatsoever who the real addict is….it will be very interesting to witness how much worse the invective becomes when (not if) things worsen.
This excellent (though sometimes colorful) blog and others like it are leaking waaay too much common sense, logic and perspicacity into the ether and those who USED TO have the “upper hand” are getting mighty ticked off. They don’t like it at all when the masses begin to come to their senses….even banks are beginning to act on the increasing risk.

#128 Alone With Everyone on 04.11.11 at 1:44 pm

I live in Edmonton and have to keep my damn mouth shut when the subject of RE comes up. I am literally the only person in this city that thinks we are due for a correction. All I hear is ” Wait till the next oil boom, prices are gonna go through the roof! “. I am starting to lose faith. Could I get any opinions from Garth or fellow Albertans on whether or not a potential oil boom will cause RE to go nuts? I’m having a hard time backing up my opinions. Am I nuts?

#129 Todd on 04.11.11 at 1:47 pm

“There are 100 million millionaires trying to come here and they all buy a condo.”

There is so much wrong with this sentence, it’s comical.

1. there are nowhere near this amount of millionaires in china. There are roughly 875,000 with net worth of over 1m. BUT there are only about 50,000 worth over 14m. That’s the thing about communism. It doesn’t work well if a significant percentage of the population makes many times more than everyone else. That breeds lebolution.

2. Millionaires don’t buy up condos in the suburbs. They but things they think will make them richer. If they start to feel the top of their earnings potential had been reached, they’ll move on. This is far less dictated by people out of market than people who live here. Once their sentiment changes, they’ll pull out en masse.

3. Look at the stats on immigration. Canada is extremely small potatoes when looking at immigration stats of developed countries. people in vancouver and toronto think we have tons of immigration as a whole because there are already established visible minority communities in those cities.

I’ve said it before and I’ll say it again. I love human nature.

#130 Bench Warmer on 04.11.11 at 1:50 pm

Went to the grand opening of the new show homes in the community of Mahogany, in SE Calgary, on the weekend. The warm weather brought a few tire kickers out. A lot of desperate looking sales staff and unimpressed potential buyers.
Prices for the 2700 sq ft plus ,estate show homes were over $800 000. Could explain why the biggest crowds were around the ice cream cart and the guy twisting up ballon animals for the kids. I wanted to get him to make me one that looked like the show home, but I’m sure he would have been taken out back and shot for that. Like I said the sales people looked hungry and desperate, like they hadn’t eaten in weeks. Its over here in Calgary. Its sad, but its all down hill from here .
To all those undesirable, scum, trash and vermin, sitting it out on the sidelines, you have nothing to lose and everything to gain the longer you wait.

#131 Junius on 04.11.11 at 2:02 pm

Re: the GEORGE ATHANASSAKOS article in the Globe and Mail.

I am pretty shocked by the comments to the article. Pleasantly shocked but shocked all the same.

Almost universally people are saying the same things as people post on this Blog daily. There seems to be a growing awareness among Canadians. What a surprise.

Garth – looks like your good work has spread beyond the borders of this Blog.

Truman – looks like your days are numbered.

#132 BigAl (Original) on 04.11.11 at 2:11 pm

CMHC Summary From Wikipedia:

Recent developments
In 2001 GE Capital was permitted to join CMHC in the Canadian mortgage insurance industry to provide competition in the marketplace.

GE Capital began insuring Canadian mortgages and issuing NHA-MBS (Mortgage Backed Securities insured by the Government of Canada).

In 2002, total outstanding mortgage debt in Canada was $467 billion. These mortgages were on the whole issued to households with good credit, and to people with proper downpayments. CMHC insured a small portion of this debt.

In 2003, CMHC decided to remove the price ceilings limitations. That is, it would insure any mortgage regardless of the cost of the home.

In 2007, after years of lobbying, the now defunct AIG found new hope with the newly elected Conservative government.

AIG was now permitted to insure high risk Canadian mortgages.
CMHC was also permitted to issue mortgage backed securities and exchange these on the open market.
At the same time, the Conservative government launched a radical policy that allowed CMHC, AIG & GE to insure 35 year amortizations that were coupled with 0% down payments. A few months, but before 2008 — this was expanded to 40 year amortizations.
Thanks to Canada economic stimulus package of 2007 the mortgage market radically changed. Historically high home prices continued to gain steam. High risk borrowers flooded the real estate market.

Throughout 2007, the average Canadian home buyer who took out a mortgage had only 6% equity in their home. The 6% equity is or equals the national average downpayment for all mortgages including home buyers who traded up to more expensive homes.

In 2008, Canadian home prices started to dip as affordability became the worst on record in many cities.

CMHC publicly admitted that it was ordered to approve as many high risk borrowers as possible to prop up the housing market and keep credit flowing.
In 2008 some 42% of all high risk applications were approved, a 33% increase over 2007.
Between the beginning of 2007 and 2009 Canadian Banks increased their total mortgage credit outstanding listed on their books by only 0.01% — possibly the smallest amount of change in post WWII history.

Mortgage Securitization has accounted for 90.5% of all growth in total Canadian mortgage credit outstanding since 2007.

The Canadian mortgage securitizaton market has grown from

100 billion in 2006
130 billion in 2007
to 295 billion by mid-June 2009
CHMC plans to expand securitization of debt to 370 billion by the end of 2009 as per the Government of Canada request.

[edit] Current issues
All Canadian mortgage securities are traded on an open exchange and insured by the Government of Canada.

Currently the securities outstanding are as of 2008-2009 roughly

TD Group : 59 billion
CIBC : 51 billion
BNS : 32 billion
RBC : 45 billion
BMO : 27 billion
Many individuals in 2009 are being granted 500K CAD – 800K CAD mortgages for their first home purchase if their household income ranges from 110K CAD – 170K CAD.[citation needed]

CMHC indicates in its plan that it will insure $813 billion via a combination of mortgage insurance and mortgage-backed securities (MBS) by the end of 2009.

According to CHMC figures from 2008 and 2007 it is clear that CMHC has drastically exceeded their planned figures.[citation needed] It is expected that 812 billion is more than likely to be a minimum target.

At these rates of progression the Government of Canada will in effect be insuring well over $500 billion in securitized mortgages and lines of credit by the end of 2010. The Canadian Government will also have issued over $600 billion in outstanding mortgage insurance.[citation needed]

#133 Taiwan is not China on 04.11.11 at 2:14 pm

#129 Alone With Everyone

Not just you,but many many more are in the same boat…. tell them that not everyone works in oil and last when the oil boomed Edmonton and Calgary actually crashed (late 2007 and early 2008). Its not the oil, but the combination of excess inward migration and lack of housing caused the 2006-2007 boom. Now there aren’t enough migration and also there are plenty of empty houses. So stay where you are and watch the fun un-fold.

#134 bubble watcher on 04.11.11 at 2:25 pm

Talk about horny house love check out the guy getting it on with a garage.
What is the chance of getting non-biased advice from our big banks about real estate?

#135 smartalox on 04.11.11 at 2:45 pm

@ L Pearson: I stand corrected. I thought that I’d read somewhere that she was Welsh.

The point was more that it was the first time I’d seen the show on HGTV, and I feel that it will become very popular there!

#136 Alberta Ed on 04.11.11 at 2:49 pm

Well, scummy ‘biker’ vermin, anyway. Let’s be accurate here. Time to get the ‘Glide back on the road.

#137 Kate on 04.11.11 at 2:52 pm

Sara should read Bill Bonners article on financial escape velocity.

#138 Toon Town Boomer on 04.11.11 at 2:56 pm

“Scum, trash and vermin” Look what they are saying about me Garth and it’s all because of you. Thank you, Thank you! That’s me & so lucky to be morgage free. I think the realturds are getting a bit touchy because buyers are no longer on a buying spree.
Ah Gee!

#139 Two-thirds on 04.11.11 at 3:20 pm

From the IMF today:

The good:

“The International Monetary Fund boosted its expectations for Canadian economic growth this year as it warned the world is facing new threats from surging oil prices, Mideast turmoil, higher inflation in China and Europe’s debt woes.

In a new economic forecast Monday, the organization raised its projection for Canadian growth of 2.8 per cent for 2011, up from an earlier forecast for 2.3 per cent.

The Canadian economy grew 3.1 per cent in 2010.”

The bad:

“The IMF also lowered its expectations for Canada for 2012 to 2.6 per cent compared with 2.7 per cent in an earlier forecast. The report suggested the risks in Canada for 2011 are tilted to the downside.

“The main domestic risk being deterioration of housing markets and household balance sheets,” the IMF said.

“Key external risks are lower-than-expected activity in the United States and renewed sovereign strains in Europe.””

The ugly:

“”New downside risks are building on account of commodity prices, notably oil, and relatedly, geopolitical uncertainty as well as overheating and booming asset markets in emerging market economies,” the IMF said.”

#140 Mr. Reality on 04.11.11 at 3:29 pm

Countries with the Most Millionaire Households 2010

Canada 162,143

China 670,000

US 4,715,000

So why aren’t all those millionaire Americans coming up to Canada to buy houses? Oh i forgot, they already experienced how crappy realestate investing can be. The Chinese havn’t figured that out yet!

Mr. R.

#141 Moneta on 04.11.11 at 3:31 pm

Seriously Moneta, you are much more of a fatalist than I might have suspected.

Like I said, I used to be a control freak (still am in many areas) until I did everything right and my son was born with a disability. If you think children change your life, imagine a disabled one.

I’m not aware of all the species that are in decline but we’ve screwed up the environment so badly, I don’t know where we should start. I was trying hard to be good until one day I realized that working out made me eat more and would problably make me live longer. Not good for the environment, not with our Western lifestyle anyway.

So to forget about my shortcomings, I now focus on the real estate bubble. The mass delusion is quite entertaining.

#142 Moneta on 04.11.11 at 3:35 pm

I’m having a hard time backing up my opinions. Am I nuts?
How often have you seen people with a total lack of self discipline stay on top of the world forever?

#143 Junius on 04.11.11 at 4:05 pm

Being from the west coast, it has been very obvious to me that a real estate bubble has been brewing for a long time now. When, it goes off, nobody knows, but the fact that foreigners are waiting with baited breath should tell us something.

Having said that, I don’t believe that the bursting of the bubble will be related to short term rate movements by the Bank of Canada. It will be something unforseen.

#144 E-Town =''= on 04.11.11 at 4:15 pm

I’ll be interested to see what Bob-a-loo has to say to my post on his blog (if he posts it at all). I just don’t believe he has the right angle on things. I mean, how can things look so sunny to realtors? I understand that bad news is never wanted and when such things threaten to take away your means of survival a person might cling to every last thread of hope and glimmer of a wish that they may twist the truth of the facts to suit their own needs…deep breath*
But like Grandpa said… you can wish in one hand and crap in the other… see which one gets full first!!

My post if you want to share…
Hey Bob. Lets hear some of your predictions shall
Pull out your crystal ball and blow some sunshine
up our butts so you can sell some houses! I’d like
to see how correct you are. Lets take the stats that
both you and Garth use (being the same) and be realistic here.
Look at the price trend…
Now look at the listing numbers…volume,sold,pending.
Now use a realistic starting point and not a
convenient 3 year stretch when $#!7 hit the fan for
almost everyone. Go back a few years to the start.
Factor in a dwindling resource of new home buyers
and suckers being born, interest rates rising,
household debt in this country and the inflationary
woes that are soon to come. Is there a stat for
how much equity Canadians have left in their
houses upon which they can use to keep them
afloat during the next turbulent times? I think it’s
almost tapped out and in my unedumucated
opnion… all that has kept your market gasping for
air is Cheap Credit. Cheap credit and greed.

I don’t predict a doomsday bust of people running
screaming to the hills but I do see a slide back to
normalcy in which a new race of house slaves
emerge shackled to their mortgages in poorly built
houses that need fixed, kids that need braces and
uni-tuition, 1.40/liter fuel, higher taxes and less
than inspiring wage increases.
Have a heart Bob… don’t sell to anyone unless
they can come up with 25% down and have
followed Garths blog for a month. Unless you’re too

#145 bigrider on 04.11.11 at 4:28 pm

Who on this blog is Italian ? Smoking man maybe?? Mikey the Realwhore??

Italians humping RE like always, but let me tell you, some of them getting a bit scared too.

#146 Coho on 04.11.11 at 4:35 pm

The “Good Old Days”. Was there ever such a thing?

Was there a time when friends, family and neighbours got together to build a house for each other over a week or a few weekends and that was that? And if there was any money left owing for land or building material it was paid off in a few months or few years?

Was there a time when shelter, was just that, shelter, which did not command 50 percent or more of one’s monthly toil to service?

Was there a time when people weren’t slaves to their house?

Was there a time when people knew their neighbours better than they do their bankers?

Was there a time when seniors did not worry about becoming millionaires in order to survive in a system designed to keep them from being just that, in real terms? And didn’t they live with their kids in their golden years? Wasn’t there much less fear back in the day?

Was there a time when kids spent more time playing outside than inside? Were they as fat and developing childhood onset diabetes to the degree that they are now?

Was there a time when people fed themselves and their kids more nutritious food? Was their a time when they HAD TIME to cook wholesome food and not resort to prepared food lacking nutrients but not chemicals?

Was there a time when the statement people made was through their values, morals and integrity rather than where they live, what they drive, and how big their house is?

Are they joking or serious? Candidates running for Prime Minister of our “democracy” calling for the introduction of tamper friendly electronic voting machines. Realtors of all people, calling other groups, such as the posters on this blog, scum and vermin because they choose to buck the tide rather than give up, turn, and be swept downstream over a waterfall like the vast majority.

Welcome to the 21st century and the “advancement” of the human race complete with wars, unprecedented nuclear disasters, financial crises, oil spills, extreme weather, including floods. It seems we’re well on our way to becoming blinded self-centered puff balls not much different than oversize beach balls being swept along in a raging river…downstream and soon, over the edge.

What do you think, Mr. Calgary Realtor?

#147 OttawaMike on 04.11.11 at 4:38 pm

Patz and Moneta,
Here is another read that relates to that cognitive thread yesterday on this real estate, motorcycle, vermincelli, free will, scum blog:
A Toronto author and a tough slog to read through but rewarding.

Mmmm….Pond Scum. Our future food source after the bee die off.

#148 Moneta on 04.11.11 at 4:56 pm

OttawaMike and Patz

I see chaos as determinism our brains can’t grasp because we tend to think linearly and the system is dynamic.

#149 AG Sage on 04.11.11 at 5:31 pm

“The lewd language and sexual obsession has attracted an undesirable crowd of the licentious and the wanton.”

I’m scratching Bob off my next party list.

#150 Live Under Your Means on 04.11.11 at 5:44 pm

#76 Moneta on 04.11.11 at 8:22 am

Man do we have problems in this country.

This came out a couple of weeks ago in La Presse, and just made it in the G&M:


Thanks Moneta for your post. I am so upset that the majority of Canadians are unaware of what is happening in Canada. Where I live, our paper relies on the Cdn Press, etc., for most of its national news coverage. I have tried to make many aware that there are other news sources on the net, but they’re just not interested. I have a BIL who was a red tory but now has turned into a Harper neocon. My sis (his wife) and a bro who lives with them do not agree with him. Lots of tension in their house at times.

#151 Mr. Plow on 04.11.11 at 6:04 pm

#130 Alone With Everyone

I am from Edmonton. I don’t act like I know more than I do on the matter, but all I am hearing from my brother and brother in law, who are both electricians in Fort Mac. Is that they need workers there right now, and they will need another 5000 over the next 18 months. They have been up there for months and this need existed long before the Japan quake the $100 oil

I don’t know if that will cause the housing market to “boom’ per se, but I do see it being a postive possibly outweighing all the negative.

Take it for what it is worth.

#152 Moneta on 04.11.11 at 6:10 pm

In understand,

We have a cousin who grew up in Montreal and moved to Calgary to work in the oil patch a decade ago and man has he changed.

Geography has a big influence on world views it seems!

#153 Steven Rowlandson on 04.11.11 at 6:12 pm

Hello Garth.
I just did my taxes today and also had a visit with my brother who also is a York region police officer.
It is his opinion that the markets and commodity prices are controlled by the powers that be. So great is his faith in government and the corperations that constitute the powers that be. This pro establishment attitude is wicked with continuity bias and slavish submission to alleged betters at the expense of the individual and personal and financial freedom.
My gut tells me that there is something very wrong going on and that I must do my own thinking and not be swayed by any one especially when it come to financial matters.


#154 Rob on 04.11.11 at 6:24 pm

#130 Alone with Everyone…

You are not alone. I do feel your pain trying to live in this McMansion obsessed city though. I work in an upper middle class wage blue collar job and I know how much my peers make. I know for a fact there are many numbers of just getting by people looking rich in Riverbend, Windermere, Sherwhite Park and every other
suburb you can name.
A slight rise in interest rates and the end of 35 year mortgages will allow the transient young worker (the only people that move here) to spend
no more than $400 000 ish for an average house.
That being said I know many who are firmly convinced these young workers will somehow be able to come up with much, much more AND service all the debt they took out the last time ” it’s different this time” happened.

The debt bird will come home to roost, that is a guarantee….

#155 Vancouver Couple in 50′s; 100K in RRSPs; 300K in cash from the sale of their home; Plan to buy soon – “We save nothing, and we are very risk averse.” | Vancouver Real Estate Anecdote Archive on 04.11.11 at 6:24 pm

[…] extracted from Garth Turner’s headline article at 10 Apr 2011 – “Sara is 51, lawyer, pushy. Makes $225,000 a year. Husband (about to retire on 24K a year […]

#156 Alex on 04.11.11 at 6:47 pm

Regarding the Globe and Mail piece today: It’s already spurred nearly 900 reader comments. 900. Wow. Don’t know that I’ve ever seen that many comments for a housing-related piece.

I submitted a comment yesterday just after the piece was posted, of course agreeing with it and saying it’s about time we saw the truth from the mainstream media. My comment thus far has a score of 137. And 21 sub-comments. Mind boggling.

The tide she is a-turning.

#157 Moneta on 04.11.11 at 6:57 pm

Live Under Your Means on 04.11.11 at 5:44 pm
Moneta on 04.11.11 at 6:10 pm

I understand,

We have a cousin who grew up in Montreal and moved to Calgary to work in the oil patch a decade ago and man has he changed.

Geography has a big influence on world views it seems!

#158 S.B. on 04.11.11 at 6:58 pm

This anecdote was posted today on another fourm (think: flag deals)

“Over the weekend, my wife and I went to a Mattamy Homes Grand Opening at Port Union/Lawrence in Toronto. It was CRAZY!! Here’s what I wrote to another forum member on the money forums:

We went to that grand opening and it was crazy. People were waiting in line since the day before and slept there overnight. The first batch they released was sold out in less than 4 hours and they was over 200 people waiting to get in the door. We were 35 on the list. We did get in and there was only two townhomes left. We were standing around a table of 5 other buyers. We asked our questions and thought hard about it for 5-10 minutes, then they brought more people inside and said “all sold”. I was not 100% sure about buying as the prices were very expensive. To make matters worse, they came with no appliances. Not even an air conditioner, washer dryer, stove, fridge, etc. I thought that was really crappy. Also, there was extra closing costs associated with a new build, like driveway, tree planting, hydro, gas and water hook ups, etc all passed to the buyer. Then there is no fence, deck or finished basement, no curtains, etc. This does not even include upgrades, such as what you suggested or a fireplace, which we really wanted would cost extra. The only deal they would give, was your choice of $5000 of the price or $5000 in upgrades, you choose. We’re looking at When we left, adding about $30k to the price to get the appliances, fireplace, finished basement and fence.
The cheapest townhome 1385 SQ Feet with all those costs have been over $430,000-450,000 with closing costs!! They said come back tomorrow when they release the next batch and they were raising the prices.. There are only a total of like 100 homes available. We walked out.

The psycology of the people there was crazy. People were buying these places without asking these questions of extra costs.. all immagrants or visible manority.. in some cases, we notices familes of 4 people buying one house. So four incomes supporting a half million dollar purchase price on the detached. It’s funny, they had like the parents, two sisters, and they each had 4 kids total, with husbands..all buying one house. My god could you imagine the cars on the street and driveway cluttering from that one family..and there were quite a few doing this.”

#159 SMOKING MAN on 04.11.11 at 7:07 pm

147 bigrider on 04.11.11 at 4:28 pm

Smoking Man is not Italian and am I scared nope not a chance, the RE cow still has alot more milk….

I am getting my son to sell his condo to buy this.

I will kick in a few bucks and partner with him, thats how you make money grasshopper

Brings in over 100k a year carring costs if fully financed 30K

You do the math,

#160 Ronaldo on 04.11.11 at 7:10 pm Beware the fraudsters

#161 Rural Rick on 04.11.11 at 7:36 pm

I always have trouble with self description but scum, trash, and vermin probably covers it. Thanks Garth for all the pain averted and wisdom imparted.

#162 Victoria on 04.11.11 at 7:37 pm


#163 Nostradamus Le Mad Vlad on 04.11.11 at 8:11 pm

#103 and #113 GregW, Oakville — “FYI; Lisa RaittMP for HarperPM said on thur., ‘she thinks the cameras should be taken out of the House of Commons.’ When answering a question about the lack of civility in Parliament’s question period. We are all screwed if our votes are not on paper and counted by our neighbours hands!”

Hi Greg. Seems the control freak of a PM is, as usual, behaving in a dictatorial manner toward his lackeys. I guess he says good morning or grunts at them!

dubya stole two elections based on electronic voting. Hand-counting, although longer, is a better way of voting.
Three ‘quake faults join underneath Tokyo. HAARP and the boat, berthed just out of Tokyo may have something to do with this.

Interesting that Brown, now retired, apologizes to Brits. for something he knew all along. Debt Armageddon Hmmm. The WH may be on to something here!

Vancouver Radiation levels are high.

Iceland Let the banxters pay for the lawsuit. After all, it was their combined greed that started the ball rolling. Payback (karma) is a bitch! Plus Equity Valuations More bubble territory.

Education No doubt the same applies to school systems here as well.

Radiation Another warning, not from the m$m. 1:51 clip Remote controlled helicopters and vehicles cleaning Fukushima.

Conflict of Interest? Judge Bush holding court against Bush re: 9-11. This is gonna be a lotta fun!

Laser Gun No more shells from the US Navy?

Humanitarian Oil “This war against Libya can only be characterized as naked, military aggression against a country rich with oil. The citizens of Libya are expendable, in the eyes of the US and NATO; the only thing that matters is conquest of Libya’s oil.”

Squeezing Blood From A Stone Taxpayers, on both sides of the non-existent border, have nothing left to be taxed.

Too big not to fail IMF and assorted junk. IMF More small talk baloney.

Donations Passing over one’s old stuff.

Six shot in Detroit, no ambulances available.

Taxpayers USR850 mln. pensions — guess who pays? China lashes out at US hypocrisy, double-standards.

5:06 clip Gold and silver game changer?

Pentagon Spend like there is no tomorrow!

#164 Hoof Hearted on 04.11.11 at 8:23 pm

Yeah, I also ponder the future of Italians.

Y’know facial hair, chest hair , before puberty…and that’s just the women.

I guess this fools the lenders/CMHC into thinking they are not minors, and why many of them have 2-3 houses before High School Graduation.

We won’t even get into the “buono” genetic ability to mix cement in any required ratios to perfection….but that may explain the continual 3 ft X 6 ft patch jobs in the basement cement floors.

#165 ballingsford on 04.11.11 at 8:23 pm

Isn’t it Odd!!!

Isn’t is odd that the PMO said they wanted to release the G20 report but the Auditor General didn’t want to release it until after the election.

Isn’t it odd that the PMO made that statement after the AG issued that statement. The PMO said they would release the report but they couldn’t because of the AG’s desire to not release it during the election.

Isn’t it odd that the AG might have been pressured into making that statement.

Isn’t it odd that the amendments to the report could have been changes to the wording instead of the meat of the report. Like changing ‘should’ to ‘would’. We’ll find out later after the election, and as a bonus, we’ll get a true picture of our Country’s financial stability.

Isn’t it odd that most of the lawn signs in my neighborhood are supporting the liberals instead of the John Baird Conservatives.

I for one will hold my nose and vote for the Libs in this election.

Isn’t it odd that a voter in a democratic society can only take too much!?!?!?! You all know what I’m talking about; no need to list them all.

Our bubble is the next to burst!

Don’t blame Ignatieff when it happens!

#166 S.B. on 04.11.11 at 8:33 pm

Latest smoke blowing report from downtown Toronto condos. Ignore all the red dots on MLS. I posted some links today.
Greater Fools needed: condos now at 600/sq foot when same condos sold for 450/sq foot only three years ago…

“February was a solid month for sales – 6300 units as reported by the Toronto Real Estate Board. Sales were 14% lower than Feb. of 2010 (a record) but consistent with numbers recorded for February sales in 2008, 2007, and 2006. It is hard to understand why some experts keep calling for price corrections when ‘active listings’ are equal to last year at this time, and ‘new listings’ in February were down by 9% from February of 2010. If prices are to decline, the only statistics worth tracking are the number of ‘power of sales’ and ‘mortgage arrears’. Why? Prices only decline when people are forced to sell. Otherwise if people don’t get their selling price, they just take their property off the market. Currently both statistics are about 50% of the levels recorded in the last price correction in 1989. Experts also point to the change in amortization rules this month on CMHC insured mortgages from 35 to 30 years as having a big drag on the market going forward. While theoretically this makes sense, the reality is that most buyers right now are NOT concerned about this change. We are seeing very few deals that require a 35 year amortization; and there are a lot of buyers (pent up demand) waiting for the summer market and hoping to see an increase in the supply of listings! The end result will be a strong summer market with prices remaining at current levels.

The condo market continues to outpace the overall market in terms of sales. Downtown, condo sales in February matched those of last year. The sale-to-listing ratio (a key indicator of price trends) was just over 40% in February this year versus 55% last year. A balanced market is 35%. While there are more condo listings this year, there are also more buyers. The Etobicoke Waterfront condo market continues to underperform the Downtown market.

Preliminary numbers for March suggest overall sales of 9500 units – about 9% lower than in 2010. For the Downtown condo market, we expect sales for March to be 15% higher than in 2010!

In this report we looked at sales at Maple Leaf Square, and in particular 65 Bremner. While the building has only been occupied for a year, there is lots of interest about prices, given its prime location. The first unit we tracked was 554 sf one bedroom without locker and parking. A unit sold in November for $340,000 and the identical unit sold in January for $352,000. The $12,000 difference can be traced to a 30 floor differential of $400 per floor. A lesson: never pay a $1,000 per floor premium for new construction, $250-500 is more the norm. This particular unit is selling at just over $600/sf. There are also two more identical units, for sale, as we write on lower floors at $355,000 and $358,000 which seems a touch high! The second unit we looked at was slightly smaller, at 490 sf, also a one bedroom without parking and locker. There were three sales of this unit, starting in October and ending in mid-March, starting at $290,000 and ending at $318,000. Prices are certainly rising in this building at almost 15% annually, which tells you that this is an ‘in demand’ condo building. Expect to pay in excess of $600/sf.”

#167 HouseBuster on 04.11.11 at 8:36 pm

It is soooo over.

2003 prices are on the way. And that’s just for starters.

Then we’ll bounce a bit and head back to 1998 prices.

#168 Grasshopper on 04.11.11 at 8:39 pm

Dear smoking man, stay away from the weed your numbers are naive. Tax man taketh from the top and tennants taketh from the bottom, banker taketh from the middle, and contractors and utilities taketh profits from the side. There will be ZERO principal paid down and unless you are funding with variable 30K doesn’t even cover interest let alone principal. The landlord wants to sell as he knows the market is a top and interest rates are going up. If you are lucky enough to make a profit it will also push you into a higher tax bracket. Many many hidden costs especially tax and legal that you also need to consider. Tenants even those with long term contracts are a dime a dozen, those that are good tennants that pay their bills, look after your property, and don’t do damage are harder to find.

#169 Going bankrupt on 04.11.11 at 9:06 pm

Looks like the slow down in RE is causing some people to go bankrupt. I’ve heard two different stories of a couple of families going bankrupt and losing their homes as they walk away from theit debts. One family was a REALTOR and no that is no joke. This ex-realtor was new to the game 2-3 years and bought 2-3 years ago. Funny how the realtor could not sell the home for more money ( I thought RE always goes up?) . The second was a co-worker who lost their home since the wife lost her job six months ago and our working hours have been reduced over the last few weeks with talks of lay-offs now due to Japan and parts problems. The globe and mail has a good artical on Canadians and debt. Look for continued drop in sales and falling prices. Second half of the year maybe a repeat of 2008.

#170 K on 04.11.11 at 9:09 pm

Garth, I sold my house a year ago and started reading your blog shortly there after. I sold because the costs of maintaining the house were burying me alive. Anyway, you were the one consistent person talking about this bubble thing. Now it seems that the whole world is speaking about it. I had intended on purchasing a condo this year but have decided to hold off. I want to thank you for the eye opening information that you have provided.

#171 Worried realtors.... As BUYERS STRIKE GROWS on 04.11.11 at 9:15 pm

Is it any wonder we see many realtors who post their propaganda on this blg since RE sales are down for the last ten months in a row. Join the growing BUYERS STRIKE and together we can make it 11 months in a row of FALLING SALES.

#172 Einsam Solo on 04.11.11 at 9:36 pm

“The lewd language and sexual obsession”

Salesman Bob doesn’t get your writing style since he prefers books with more pictures than words.

#173 Cellar Dwellar on 04.11.11 at 9:50 pm

@ #33 Mr Plow.
No worries, keep us on our “toes”.

#174 Cellar Dwellar on 04.11.11 at 10:03 pm

@ #108 BPOE
Sell Butter Bean for the $25k.
Get the”operation” .
Call Ramone.
Put the rest of the cash in Vancouver Real Estate because YOU CANT LOSE ! :)

#175 The American on 04.11.11 at 10:03 pm

At #142: Mr. Reality, you have a very good point. The U.S. has 30 times the millionaires as Canada, and 3 times as many than Canada on a per-capita basis. Keep in mind this is AFTER the U.S. economic collapse in real estate (it was significantly more prior to that because it was all on paper in real estate assets for many). Your point is spot-on. Americans in general don’t want nor have ever wanted property in Canada, plain and simple. I don’t know how else to put it gently. Real estate is not necessarily a terrible investment. It is only terrible when it is at levels of unsustainable affordability. We all need shelter, but not at ANY cost.

#176 TomOfMilton on 04.11.11 at 10:06 pm

#62 daystar’s Stevo commentary


But I was snickering some

#177 Ronaldo on 04.11.11 at 10:18 pm


Article written on January 30, 2006 by Fiona Anderson, Vancouver Sun. At this time Vancouver was ranked the most unaffordable place in Canada and 15th worst in the world. At the time the affordability index was 6.6. What is it now? 12 plus? So, if 6.6 was considered to be severely unaffordable, what would we class 12 or so to be?

When a house (1920’s model) with a listing price of $26,000 in February of 1972 is supposedly worth 1.2 million today, something is seriously out of whack. An average wage back then would have been around $800/mo. with interest rates around 9.5 – 10%. Assuming a 20,000 mortgage, mortgage would have been around $200/mo. or 25% of one persons wage.

Today, that same house at 1.2 million and assuming a 1 million mortgage at 2% (1/5th the rate in 1972), would require a payment of roughly $2000/mo. or 40% of the salary for one person today. (similar job now paying $5000/mo). If we use say a 5% rate (half that of 1972), the payment would consume most of the persons wage if not all of it (after tax).

If we take the same ratio of 2.5 as in 1972, this house should be selling for around $150,000 with an interest rate of 10%. At 5%, $300,000 and at 2.5%, $600.000 and at 1.25%, $1,200,000.

However, since two income families are pretty much the norm nowadays and have been for some time now, it only makes sense that the affordability factor is greater and that a higher ratio would make sense.

What has happened though is because of the two incomes, this resulted in higher home prices so that the $26,000 starter house back in 72 rose accordingly.

So if we say take a $100,000 combined family income and a 2.5 ratio, this same house today at 10% interest rate should sell for around $300,000. At 5%, $600.000 and at 2.5%, $1.2 million.

Of course this ratio would be greater depending on the combined income of the couple. The above deals basically with an average family income based on 1972.

So, what should happen to the price of that $1.2 million 1920’s starter home when rates go back up to 5%? Is it not reasonalbe to conclude that it could quite easily go back down to $600.000. If, lucky only to $700,000. IMO still too high.

We know that banks were offering “prime minus” mortgages back in the early to mid 2000’s and that certainly contributed to the rise in house prices especially here in Alberta. I know for a fact that a condo purchased in the summer of 2005 for $149,000 sold exactly one year later for $249,000. I know that a starter house purchased in Calgary in spring of 06 for $245,000 sold for $339,000 exactly one year later 2007 (the peak). Today, same would list for around $320,000. 4 years later.

So what can we expect will happen to that $1.2 million starter house price in Vancouver once its discovered that the Asian influence is only an illusion created by the realtors and the media talking heads that support them and once interest rates start to rise once again.

My guess would be minus $30,000 for every quarter point interest rate rise following at least a 10% immediate drop in prices by end of summer.

It’s a sad thing to see when young couples (professionals) each earning large salaries are not able to afford even a basic starter home that one average wage earner (grade 12 graduate) back in 1972 was able to purchase with 1/4 of his salary. I speak from experience. These are facts. What in God’s green earth has happened? Maybe it is time to do as the Aussies are doing. Go on strike.

#178 Prufrock on 04.11.11 at 10:24 pm

Jus’ for the record:
–Bear baiting
–Bated breath (as in abated).

#179 JGBellHimself on 04.11.11 at 10:42 pm

Garth, if THAT woman is depraved, you and we are really deprived. And, what you say about her being married is truly despicable.

If Sara is another one of our pushy attorney opponents, we, for one, are an “open door” she can push up against, anytime.

However, we do draw the line at whips and handcuffs – for us, but not for her.

Your not publishing this would be obscene, too.

#180 Ronaldo on 04.11.11 at 10:43 pm

#38 Tim – does this answer your question?

#181 brainsail on 04.11.11 at 11:07 pm

#177 The American

Also, to be noted is that the US had an increase of household millionaires of 15% YOY vs. Canada’s 5%. This may be an indication that the bubble has already burst in Canada.

#182 Dark Sad Monster Bunny on 04.12.11 at 12:08 am

177 American/183 brainsail – the numbers arrived at in
the 2009 World wealth report (individuals, not including
primary residence) are very comparable for the US and
Canada on a per capita basis.

So there seems to be a lot of conflicting data.

What was the point that was trying to be made? That Americans dont want property in Canada? Maybe not now, but they did in oh 2004-2005ish. Places like Victoria benefitted, as did many more remote
recreational properties. It was crazy. They should have been buying in 1998-1999 when it was dirt cheap.
I dont see the relationship with the millionaire numbers.

#183 Lorne on 04.12.11 at 12:27 am

#121 Kevin in Winnipeg
Sure, financial education is a good idea….now what are you going to take away? You just can’t keep adding things for schools to teach when there already isn’t enough time to get through everything that is expected at the moment!

#184 Bill Grable on 04.12.11 at 4:39 pm

Vancouver home prices up 10 per cent, prices about triple national average