Monica’s confused. Feeling shut out of Toronto’s real estate market. At least for the little detached house she lusts for. So she came up with the perfect plan – buy one in Phoenix.

“You said it yourself,” she threw out in a phone call we had yesterday, “sell here, and buy there, in the States. How can I lose?”

Well, yeah, I did. It’s all about being a successful contrarian.

There’s no doubt Canadian real estate values are unsustainable, and daily this heretical blog spells out why. There’s also every reason to believe US house prices are depressed beyond reasonable levels. In fact, this is what real estate does, being the most emotional and hormonal of assets. It overshoots. Greater fools buy into rising markets (like here), whatever the premium. Equal fools sell into declining ones (like Coral Beach), whatever the pain.

So doesn’t it make sense to snatch up as many distressed Yankee properties as you can? Now with the loonie at par (after FX costs) is this the mother of real estate opportunity? Monica thinks so. But she’s only partly right in her strategy of buying a cheap house, renting it out, then selling it for a fat gain in two or three years.

First, this will not be quick. American real estate is still cratering in most markets. The best estimate now is that 2000-2 prices might be seen again by about 2020. So if you have ten years, jump in.

Second, if it were so damn easy to buy up houses, rent them out for positive cash flow and make pots of money, Americans would be doing just that. Are we smarter than they are? Or rubes? You get one guess.

Third, just because houses are cheap doesn’t mean low risk. You should figure on buying with cash, since financing is tough these days. Also plan on spending money on an agent, a lawyer, a cross-border tax guy and a property manager.

Fourth, forget Phoenix. Or much of Florida. This is scorched earth.

In fact, where you invest in the US (like Canada) makes all the difference.  Atlanta, Cleveland, Las Vegas and Detroit now have home prices below 2000 levels, with Phoenix about to join them. Property prices are down about 50% and set to soften even more. In Las Vegas, for example, there are 26,000 foreclosures.

But lower valuations are not the biggest concern for Canadian buyers with a long-term investment horizon. It’s the negative cash flow which will kill ya.

Buy a house for peanuts and rent it out to make money? In your dreams in places like Phoenix. There are literally thousands of rental units on the market (check out Craigslist and similar), with more being added daily – in a city with a serious water problem and a dried-up economy. For example, just look at the vacancy rate for apartments to get some flavour – it’s currently at 9.9%, which has landlords celebrating because it used to be 15%. And things will probably worsen again since 1,000 new units hit the market recently, the result of failed condo developments nobody wanted to buy. Of course, this vacancy rate does not even count the thousands of SFHs now put on the market by owners desperate for tenants.

So, is USA real estate a bad idea?

Absolutely not. Buying in Vancouver is a bad idea. A condo in downtown Toronto is a bad idea. Moving to Kelowna is a bad idea. Winnipeg is a bad idea. In fact, jumping into almost any property in advance of this summer’s interest rate hikes and in a market vexed by declining sales and lousy listings is a recipe for losses.

However, if you vacation in the States, then buying there could be brilliant. If you purchase a decent home, not some $50,000 unit in a half-empty building with a condo fee bomb awaiting, your chances of long-term profit are enhanced. If you invest in places with an economy, like Seattle or Boston, then your odds of breaking even on rent are much better. And if you ignore web sites aimed at Canadian suckers, like, you’ll probably live longer.

Yes, the US is cheap. Canada is not. There’s money to be made in the south. Lots to be lost here.

But an industry’s sprung up down there to satisfy the carnal desires of house-horny Canadians, pouring over the border with their fat loonies and pants swollen with equity. They know what they want. Cheap and fast.

And when did that ever last?


#1 Bolo on 05.08.11 at 10:04 pm

Another great post, Garth. First?

#2 raincouver on 05.08.11 at 10:05 pm

This is going to be epic.

#3 bromance on 05.08.11 at 10:09 pm

What ever you do, don’t become an absentee landlord. If you do, be prepared to find a good management company and be ready to keep a close eye on things. Its a minefield, and with prices still falling in many areas (like mine), it just about going to be impossible not to be taken to the cleaners. I run a family trust that has gone from $5M to 2.5M, and I’m not sure I could get that. I went to a tax sale last week and someone spent over a million dollars. I wish him luck.

#4 Calculon The Mighty on 05.08.11 at 10:12 pm


#5 Hoof - Hearted on 05.08.11 at 10:13 pm

Fiiiirrrrrrrsssssttttttt !

#6 Jim on 05.08.11 at 10:14 pm

When the Mainland Chinese figure out that the US is a better investment than Richmond or Vancouver’s Westside, those markets will vaporize. One caveat, I cant think of anywhere in the USA that would be more appealing culturally to a MC than Richmond or Vancouver because of our huge Asian population and lax immigration laws.

#7 jay on 05.08.11 at 10:16 pm

great website ty look foward to being able to buy when the correction happens

#8 squidly77 on 05.08.11 at 10:28 pm

There are some great deals to be had in Florida, I’m looking at one in Key Largo but the price keeps falling.

The time to buy will be when interest rates are actually rising, at every tick up, will be a price drop down.

#9 Tim on 05.08.11 at 10:33 pm

Sure, buy in Boston if you can spend half a million for a decent townhome. The problem with US real estate is that many of the desirable areas with a future are not cheap.

Besides, with the Perimeter “security” initiative, being secretly negotiated by Harper and the US, we’ll have that much more in common with our southern friends, sovereignty aside…

Because it’s cheap is no reason to buy anything. — Garth

#10 BPOE on 05.08.11 at 10:33 pm

Challenge still continues. Bring on those stories how renting in Vancouver over the last 10 years was a better decision than buying. Heck you coulda sold and made yourself anywhere from 600k to 1 million. That’s a heck of a lot of rent money. I’ve met the odd renter over the past 10 years that made a killing in junior mining stocks and rent a fabulous place overlooking the Bay with the profits generated but these persons are anomolies.

#11 The American on 05.08.11 at 10:35 pm

To everyone who reads this blog: I would like you to read the previous string of Garth’s. You will notice certain commonalities between BPOE, Joseph, and Oh! Canada. The commonalities include, but not limited to:
– The over usage of the words, “folks!”
– Ending a delusional train of though with the term, “Period.”
– Mutual ass licking between the three
– Unsound advise for future investment
– Not recognizing or acknowledging the fact that the market is in a bubble as values have exceedingly surpassed the point of sustainability

Methinks BPOE is Joseph is Oh! Canada. I find it incredibly interesting that in all strings of the past, nobody has agreed with BPOE. All of a sudden, we as readers witness not one, but two supporters of BPOE; both with similar writing styles and poor reasoning skills.

I’m just sayin’…

#12 Tim on 05.08.11 at 10:37 pm

20 Year Real Estate Bear Market Making its way to the US

Because America has offshored their manufacturing base and thereby decimated the middle class, many of the jobs, or new jobs are low wage jobs, which makes it difficult for people to buy real estate.

#13 BPOE on 05.08.11 at 10:42 pm

I’m a lying douche bag with crabs, anal

DELETED. Behave yourself. Mainland Chinese read this blog. — Garth

#14 squidly77 on 05.08.11 at 10:45 pm

Sure BPOE like you knew ahead of time that CMHC would remove price ceilings and you knew that the government would assault mortgage credit requirements extend amortizations to 40 years, allow losers with no money to buy homes and lastly you knew back in 2000 that the BOC would cut interest rates to 0.5% in 2008, gimme a break already. Your an idiot

#15 BPOE Grade 3 teacher on 05.08.11 at 10:47 pm

#12 The American

Yes but his grammar and spellink is purty goud

#16 Kevin on 05.08.11 at 10:54 pm

One article from CNN says that prices in Vegas and Phoenix may not recover until after 2032.
And these are nominal prices: Inflation-adjusted recovery will take even longer.

Investing in the US is not a bad idea as Garth has stated, but too many people are hoping for US housing to return to 2006 prices in just a few years. Not going to happen.

One guy I know at work has plunked all of his savings into 5 Phoenix homes, he is hoping to retire in 10 years with over a million in the bank from these houses. I emailed him the CNN link. He told me I am nuts. All I said was good luck.

#17 realpaul on 05.08.11 at 11:03 pm

Yup…Bens ( #8) got the right idea. Owning US property sucks if you’re Canadian. Consider the fate of this sap who thought he knew the drill and din’t..

I wrote the reporter and told him to buck up and stop printing stupid comments…..too many people from Canada’s backwaters believe what they read and get themselves into trouble.

1) You do NOT get 180 days ‘free’ in the US. The clock does not RESET every time you leave. Heres the fact….You are deemed in ‘substantial residence’ over a THREE YEAR period of time. You count the number of days your current rip has been…then add 50% of the previous years days…then…..take 1/3rd of the days from the prior year ( year three…are you still awake). You add that entire period of time together ( as they do at the new Customs & Immigration computers that are tied in to the Internal Revenue Service database which have logged you in and out) and if that entire period exceeds 180 days then you must have filed a global/asset tax return in the USA. Not having done so is a felony.

I have seen so many white haired snow birds who used to cross the border every year ( before the IRS/Customs Immigration tie up) being pulled out of line at the airport on their way to FLA or HI and denied entry….in some cases ( like the joker in the article) for five years or more. And what happens to your condo when you’ve been banned from entering the US? It’s not the same USA we knew in years gone by guys….get used to border crossings getting more onerous…not easier. Your government has just agreed to tighten security and information sharing with the yanks… it will get a lot worse for many.

Canadians are Mexicans , Guatemalans or Aghans as far as the US is concerned…there is no special dispensation for Canadians regarding residency requirements ONLY IN VISA APPS.

Even if you do buy and qualify….don’t even think of managing your property on remote……doing so is a felony….you don’t have a work permit or license to conduct business in the USA. Acoording to the fine man at CENTA…David Ingram…US/Can tax expert….you will be deported if you are cutting your own grass or painting the place you own…this to is against the law as you have no legal right to perform labour in the USA.

So Ben….you’re right…renting…enjoying and walking away is the right path to take. Buying only makes you a time share sucker…..because by living in the US without a greencard you are living on borrowed time befor your deported for ‘illegal entry’. Just ask all those snowbirds who’ve been locked out of their winter condo’s in Maui……or can’t because filing a tax return in the US would be very….well….not a good thing.

You are hysterical. — Garth

#18 BPOE on 05.08.11 at 11:15 pm

I am not dum or iganert folcks!

#19 The American on 05.08.11 at 11:19 pm

At #18: Realpaul, the information you provided is incorrect. Can you please direct me where you received it?

#20 nonplused on 05.08.11 at 11:19 pm

I’ve only been around for some 40+ years, and concerned with investing for maybe 15. But I’ve read a lot of history as well. I don’t think it’s been this hard to invest a buck in a long time. Even during the Great Depression you could sit in cash and do just fine until the inflation kicked off, but by then there were plenty of good investments to be made at rock bottom prices. Gold has been one of the best investments for those who got in at the early 2000’s, but even that has to end sometime. Maybe not yet, but certainly nothing stays a bull for more than 20 years. There is Garth’s money road, and certainly it’s one of the best strategies around right now, but I think it has macro risks associated with it too.

Tough times indeed. And a house in Phoenix certainly isn’t the answer. There is nothing to say that a combination of no disposable income for golfing, high air fares, and a lack of water couldn’t turn Phoenix back to the desert in the next 10 years.

The fact is that any time governments have run up large debts, the economy eventually collapsed. The only exceptions are those governments currently dealing with large debts, and none of them look like they have good odds of avoiding a similar fate. Another possible example is the US after WWII, but the won the war and then colonized the world. They do not appear to be in a position to do that again, having already colonized the world, having no war to fight, and no money with which to fight one.

Maybe if Fukashima finally makes people realise you can’t store thousands of tons of spent nuclear fuel in a swimming pool forever, Yucatan Mountain might revitalize Phoenix as a recreational destination for horny nuclear disposal workers. But nothing else is on the horizon.

Then again, if the Japanese don’t figure out how to stop their spent fuel pools from launching thousands of tons of spent fuel into the ocean, there might not be anyone around to care. See the discussion about a possible “prompt criticality” at If this is what happened, and a chain reaction of nearby reactors becoming uninhabitable happens, 10 years from now all of Japan might be vacant with all souls having immigrated to the US. Who also has a lot of spent fuel in swimming pools.

What we know for sure now from Fukashima is that if a nuclear reactor is abandoned for even a few days, the area around it is permanently uninhabitable. This is not so with coal or natural gas. And there are designs that supposedly fail safe, including Thorium which might possibly produce less long lived products. But of course the Thorium thing is speculation because nobody is building one.

#21 BPOE on 05.08.11 at 11:28 pm

Responding @14 –

Sorry, Garth! My bad. I just smoked some seriously awesome weed, and pretty much anything I type is pretty funny to me right now. Also that big slice of peach pie I just had was wicked awesome!!! I’ll be good and sweet from now on (well, as best as I can be). Cheers to you and the BEST blog I’ve ever read.

#22 Jon B on 05.08.11 at 11:29 pm

Excellent post on a subject full of opportunity. I’ve got my guns drawn but not sure when to pull the trigger on a US property. Recent media suggests there are a good number of Canadians with a similar posture. I wonder how many of them will still have the same idea after the rates on their precious lines of credit head north later this year.

#23 Randis on 05.08.11 at 11:32 pm

#12 The American

lol wow good catch …

#24 raincouver on 05.08.11 at 11:33 pm

bpoe is a bank a good landlord?

#25 JSS on 05.08.11 at 11:35 pm

Garth, when to become an investor in Canadian property in AB? 2014?

#26 Dave in Victoria on 05.08.11 at 11:37 pm

Been interesting watching my sister look for rentals in Victoria. Many landlords are lowering rental rates and offering things like first month rent free.

She tells me of one landlord who had 50 plus people for his place this time last year. This year it’s pulling teeth to find a suitable tenant. This is the first time in my life that i’ve seen rent decreases.

One landlord blames excessive condo development that he claims has flooded the market.

Very interesting times.

#27 BrianT on 05.08.11 at 11:38 pm

#17Kevin-Whoever wrote that article neglected to factor in the likely energy costs circa 2032, not to mention the water situation. At this point, anyone expecting the return of suburban sprawl RE in the USA at some point in the future should show there numbers because it is extremely unlikely-what has happened re USA RE isn’t just the bursting of a bubble-the USA suburban sprawl economic model (one of the most important parts of the USA economic “system”) is likely finished permanently.

#28 skyrider on 05.08.11 at 11:47 pm

David Ingram link:

#18 Realpaul has some good points, take heed!

#29 LH on 05.08.11 at 11:52 pm

Vancouver is very expensive, thanks to its open immigration policies, relative proximity to PEK and PVG, and popularity among the nouveau riche Chinois.

Downtown Toronto houses, on the other hand, are still priced in the same league as Boston, San Francisco, et cetera, and signifcantly cheaper than Sydney, Melbourne, London, New York, etc. The center of the world it’s not, but I don’t think houses (not condos) in downtown Toronto are primed for a collapse either.

#30 BPOE on 05.09.11 at 12:02 am

American you made a UFD
Still waiting for you to acknowledge Vancouver was a better investment than renting over the past 10 years. Still waiting for your great rental stories showing how you were further financially ahead renting over buying in Vancouver over the past 10 years. You have been exposed for the total fraud you are. Provide the charts and FACTS proving renting was the way to go over the last 10 years in Vancouver. You can’t and you know it. How much is Garth paying you anyways to post. I could say the same thing about you. I post factual real world posts about Vancouver Real Estate and you and your posse come to shoot me down because you don’t like hearing the truth. You got a bee in your bonnet for some reason over people from around the world waking up and discovering Vancouver. You are further disturbed by the fact the world comes to Vancouver not Seatlle. The more I read your posts the more I’m convinced you are a bitter renter like many on this blog who missed out on the big move in Vancouver over the last decade. Here’s another idea to ponder in your negative thinking mind. If you bought a townhouse for $250k in 2006 and in 2011 it’s worth 700k and in 2013 it’s worth 500k you are still further ahead as an owner. Some people like to own you like to rent. You made a UFD UNRECOVERABLE FINANCIAL DECISION and still clueless in Seattle when it comes to understanding Vancouver Real Estate. The rest of your posts I quite enjoy reading
Not recognizing or acknowledging the fact that the market is in a bubble as values have exceedingly surpassed the point of sustainability

#31 The Phantom on 05.09.11 at 12:02 am

Evening All:

Something lighter and different this night…I had my first weekend free in quite some time and decided to get off base and walk around the city of Kingston proper…

While I was walking a few blocks away from downtown, a baby squirrel left the busy intersection he was waiting in (I couldn’t believe his good fortune that there was a long lull in traffic) and he scampered right up to my running shoes and skittered around a few minutes and was completely tame and unafraid…I could have petted him had I wanted to (but I didn’t). I stared in complete wonder for a few minutes before I went on my way…turned around and he was gone. Thought to myself “I’ve never seen ANYTHING like that before.”

I was walking back to base a few hours later and saw ANOTHER baby squirrel on the sidewalk adjacent to the La Salle Causeway…scrawnier and bonier than the first little guy but equally inquisitive (and nearly as cute) as the first one. There were two other soldiers there that were on the phone to the Humane Society IOT determine if something could be done for him and trying to prevent him from wandering on the busy road . This little guy was equally tame…equally curious and equally unafraid. Never happened before in my life and will probably never see something like that again either…

Now before people start taking me to task about sticking to the topics at hand, I’d like to point out that the story is merely a small digression from the toils of everyday life and the worries that line our face day in and day out and something light for a small change. I guess to try and provide some relevance and legitimacy, I could make an effort to tie it in somehow with Garth’s frequent references to squirrel recipes but I’m certain that some would say that I would be “nuts” to do that…

Have a great night everyone!!!
the Phantom

#32 poco on 05.09.11 at 12:16 am

#18 realpaul–just wondering if you’ve spoken to David Ingram lately??
that would be a pretty good trick because he’s DEAD

#33 BPOE on 05.09.11 at 12:17 am

I don’t remember saying any of the below. I have stated repeatedly that interest rates will not be rising
I love Vancouver. I believe Vancouver is going higher long term. I believe you are financially further ahead owning over the past few decades than renting. I believe there is investment interest in Vancouver from all over the world not just China. I believe most Canadians cannot afford Vancouver but other people from around the world can and will buy. I believe that deep down most people want to own a home. For this the American and his ilk verbally assault me and other users make up fake BPOE names as they made a UFD UNRECOVERABLE FINANCIAL DECISION. They chose to rent the past decade instead of buy Vancouver
squidly77 on 05.08.11 at 10:45 pm
Sure BPOE like you knew ahead of time that CMHC would remove price ceilings and you knew that the government would assault mortgage credit requirements extend amortizations to 40 years, allow losers with no money to buy homes and lastly you knew back in 2000 that the BOC would cut interest rates to 0.5% in 2008, gimme a break already. Your an idiot

#34 earlymidlifecrisis on 05.09.11 at 12:25 am

@12 the american. thanks for that. it’s been a depressing week. i needed a laugh.

#35 Nostradamus Le Mad Vlad on 05.09.11 at 12:31 am

“In fact, this is what real estate does, being the most emotional and hormonal of assets. It overshoots. Greater fools buy into rising markets.”

It never ceases to amaze that no one (Garth excepted) has ever bothered to suggest that possibly, holding off buying way beyond one’s means and investing income may be a better bet for the next five to 10 years or so, but this concept may be too difficult to comprehend.

So, back to reality in LaLaLaLand.
#217 jess on 05.08.11 at 9:06 pm — Thanks for the link. The better half (from Hong Kong) told me a while back there are still numerous and large centipedes / millipedes, etc., which chomp on one’s flesh at night.

Not something I care for!

#12 The American — Duly noted yesterday. Three laptops, three separate IP addresses and three monikers. Not that difficult to set up.

#13 Tim — Good post and link.
1:03 clip Tritium being released into the Mississippi. Combined with tornadoes and levees being flooded, this is a hard summer for those down south.

Bubbleishus and Pigs on Tax Money.

Destroying an administration’s credibility. It’s self-destruction, which Canada has already started.

Aging quickly from too much radiation.

Festering Forgery Fakes Ob/sama — one and the same.

Losing Pakistan while Benny Boy Bernanke drives the presses into the ground.

BDI Chart Scraping the bottom of the barrel.

Zombie Apocalypse and Nukes in America. FF?

Banana Gods “Those whom the gods wish to destroy . . .”

BoJ and inflation plus US and China inflation.

#36 Gord In Vancouver on 05.09.11 at 12:49 am

Absolutely not. Buying in Vancouver is a bad idea. A condo in downtown Toronto is a bad idea. Moving to Kelowna is a bad idea. Winnipeg is a bad idea. In fact, jumping into almost any property in advance of this summer’s interest rate hikes and in a market vexed by declining sales and lousy listings is a recipe for losses.

Windsor, Ontario is probably one of the few Canadian markets that’ll weather the storm because it’s already corrected heavily.

#37 Canuck Abroad on 05.09.11 at 12:55 am

What is this fascination with buying and letting out real estate as an “investment”? I really don’t get it. Monica, if you really want to participate in US real estate, invest in a REIT and avoid all the headaches of being a long-distance landlord.

If you plan to spend half of every year in the US then that is a whole other issue and your home is then not an investment. You may or may not get back what you spent on it, but you have the satisfaction of being able to tell your friends that you own a vacation home, if that’s important to you. Prices have fallen in the US but that doesn’t mean they are going to ricochet higher in the near term.

The other problem in the US which I am sure Garth will disagree with and call me “hysterical” like realpaul is that there are potentially big problems with title going on down there. Some foreclosures took place where the bank or servicer had no standing, and it’s a bit of a nightmare that I won’t go into here but if you really can’t be dissuaded from buying your little piece of heaven in the US, I would encourage you to visit Yves Smith’s blog Naked Capitalism and read all the posts on MERS. And make sure all your title documents are in order.

#38 poco on 05.09.11 at 12:59 am

#12 The American—–ya all the pumpers sound the same after a while –there have been others posting as 3 in the past –all pumping each other up —same as BPOE–all idiots–don’t see the big picture

i haven’t posted any of the many listings i’ve found that are now selling for less than the owner paid 2 and 3 years ago because i was afraid Smoking Man would send his off-spring out to the tri-cities to snap up a few of the bargains and would start driving the prices back up!!!!

For all of you on the west coast who still keep posting–if the downturn happens or when the downturn happens—i just shake my head when i read your posts, because it’s obvious you don’t have a clue about the housing market–watching too much Global TV i imagine
here in the tri-cities last week there were 92 price changes (guess which way they went)
included in those price drops and new listings–46 of them are now selling for less than or are priced within 15k of what the owner paid—that’s just this past week

what the heck–here’s one for Smoking Man –could be the buy of the week
foreclosure–rental property–situated above a deli/bakery–smell good 24hrs a day
new listings went up last week compared to previous weeks–we’ll see what happens this week–maybe it’s the late spring weather (still wet and cold)–this may just turn into 2008 all over again–time will tell

#39 Nick on 05.09.11 at 1:06 am

I live in Los Angeles, and prices in my desirable/in demand central neighborhood are still falling. Some guy driving a Range Rover is trying to flip the very bland house next door for close to 700k, and it been sitting there empty for months now. I’d say be careful, even in the sure-fire cities… Like Gath says, the good looking girl has left the dancehall, and for now real estate is a slow moving, unsexy thing at best.

#40 American Werewolf on 05.09.11 at 1:07 am

I can’t help thinking about investing in a rental down South lately–positive cash-flow would be guaranteed in my situation–but the bottom line is that liquidity is priceless. I just went through over 3 years of hell trying to sell a home I bought in 2004.

3 years on the market.

Can you imagine that? I watched that asset drop over 30%, while a steady stream of potential buyers became an occasional trickle that would come knocking every few months.

Sure…I made money in the end….not much. The rest of my friends had this mess eat up their lives, destroy their marriages, tear their families apart and one even ended up in a tent. I beat the odds in a game I wouldn’t play again (of course, I put 25% down, renovated all by myself and bought prior to the top at only 3X my income).

When you don’t have liquidity, you just have virtual wealth that depends on a steady paycheck and steady renters to keep. If you lose both, you lose it all. And keeping both while knowing the consequences can be the most stressful experience one can ever experience.

As long as this economy is in a flux, I don’t want a mortgage locking me anywhere. As long as things are up in the air, I don’t want to have to have a situation locking me into a job I hate that provides security in case the renters I hate come up short.

It would be impossible for me to relay the stress to Canadians that you feel when it all comes crumbling down around you (your job, home prices, your friend’s lives, etc). There was so much pain, fear and damaged caused by this crash. Now imagine being a middle class guy holding down a job, trying to sell a home in the middle of it.

Well, of course, anyone investing isn’t thinking of when theyll have to try and put it back on the market. Sure…your own local economy will always be hot, right? You own job will always be secure, right?

Look…if you are looking South you have to know up here ain’t all roses right now and things can get ugly. Just think about that. Why get rid of liquid assets if you think you are headed into a storm?

#41 realpaul on 05.09.11 at 1:42 am

Yup…hardy har har har…….and selling instead of buying gold on last weeks dip was the right thing to do? Asia opened with gold above $1500 today….woops……Oh lonesome me.

David died recently but his long established practice lives on.

#42 Aussie Roy on 05.09.11 at 3:17 am

Aussie Update – Short and sweet.

WA Australias largest mining state leads country in mortgage arrears.

Earthquakes, nuclear accidents, elections, rainstorms, and now Osama bin Laden. Is there anything that doesn’t affect the property market?

After four years covering the property beat, I’ve heard just about every justification, rationalisation and excuse imaginable to explain why the market behaves the way it does.

Which is why it’s only a matter of time before I hear mention of an impossibly ridiculous but seriously suggested link between the death of Osama bin Laden and the latest twitch in the property.

How about prices have gone beyond the levels supported by wages and now have to fall as mortgage holders get squeezed by interest rates and rising living costs. Nuh too simple, I suppose.

#43 Tony on 05.09.11 at 3:33 am

I would be buying American real estate for the sole reason of playing the US dollar long and the Canadian dollar short in the next 6 months to a year. I’m looking for a 15 to 20 percent drop in the value of the Canadian dollar vis-a-vis the US dollar over the near term.

#44 SquareNinja on 05.09.11 at 4:26 am

The Mainland Chinese really are driving up prices in Vancouver. Anecdotal evidence:

Beijing is also in a bubble, so Vancouver prices are reasonable AND you get that big backyard.

Anyone can buy in Canada, with no complicated tax issues or residency requirements.

#45 Oh! Canada on 05.09.11 at 6:34 am

#12 The American

Aside from long-winded rants desperately aimed at proving that Canada’s real estate market is exactly the same as the U.S., and brown-nosing the authour of this blog at every opportunity, I haven’t read a single thing that you’ve posted that many any sense at all.

To wit: “Not recognizing or acknowledging the fact that the market is in a bubble as values have exceedingly surpassed the point of sustainability.”

That is a hollow statement. It is empty, devoid of rationality. And simply false. Prices are not only sustainable they are still rising. Mortgage defaults are miniscule. The affordabilty index is in the normal range. Low listing inventories indicate no panic selling. Etc. etc.

Talking the market down doesn’t make it so.

#46 Canuck Abroad on 05.09.11 at 6:35 am

44/Tony – “I would be buying American real estate for the sole reason of playing the US dollar long and the Canadian dollar short in the next 6 months to a year. I’m looking for a 15 to 20 percent drop in the value of the Canadian dollar vis-a-vis the US dollar over the near term.”

You’re kidding right? You want to take a punt on currencies so you are going to buy a house to execute your trade? Seriously? Have you heard of the foreign exchange market? If that’s too risky for you there are currency ETFs that would let you take a position without too much leverage.

#47 Fractional Reserve on 05.09.11 at 7:42 am

It seems that a number of buyers in the Norseman Heights area of Etobicoke have not received the real estate memo spoken of on this blog. In the last week alone, I counted six homes that all sold within one week. One home went for almost $150k over asking.

My point proven. — Garth

#48 pjwlk on 05.09.11 at 7:43 am

My wife just spoke to our GTA Realtor friend yesterday who told her that they are seriously considering selling their North Toronto house and… wait for it… …renting for a few years! The two main reason? Real Estate is slow and a they have huge mountain of debt.

Our Realtor friend won’t speak to us much about these things because she feels she “always has to defend herself” but others who are more aware of their situation tell us that they are on the edge of the debt abyss just hanging on by their fingernails.

More of that to come I’m sure.

#49 S.B. on 05.09.11 at 7:54 am

You may call him at 1-800-SEL-LCAN or locally at
905-BUY-USA1. ;)

#50 alf on 05.09.11 at 8:38 am

#27 Dan in Victoria

The huge number of rental vacancies coincides perfectly with all of the college and university students leaving for the summer.

I have also been watching craigslist and used victoria over the last couple of months and the only significant price reductions I have come across are for summer sublets.

#51 refinow on 05.09.11 at 8:42 am

#37 wrote>>>

Windsor, Ontario is probably one of the few Canadian markets that’ll weather the storm because it’s already corrected heavily.

Are you kidding, Thats like saying Japan is going to weather storm becasue the tsunami has already hit…

Windsor is likely currently the hardest hit city in a all of Canada.

SMy son had a hockey tournament in April…I couldnt believe the condition of that city.

I would like to be the guy who is selling all the plywood that is being used to board up the windows in that town…

#52 Crazy on 05.09.11 at 8:45 am

Garth believes gold and oil will go to the moon.

Those words were spoken on January 30th, 2010, as I predicted a commodity boom. I was right. Sixteen months later, it’s time to take profits. — Garth

#53 David B on 05.09.11 at 8:46 am

As you were saying!

Home Market Takes a Tumble
Turnaround More Distant After 3% Drop, Steepest Quarterly Decline Since 2008

So when will it start in Canada? ….

#54 Drew on 05.09.11 at 8:56 am

I missed the window to reply to comments on the last blog (Spring)… It was my e-mail Garth used.

For the record, I still own a cheap investment property in the maritimes that is paying for itself (renting to family).

And if my situation had been different (stayed married / fully employed) I would have made money on the house…

But taking out 70K of the equity in 2006 to buy out the ex was a loos. If we’d been renting, no asset to split.
Taking out 40K in 2009 while making less was a personal choice to maintain my standard of living and consistency for the kids . I made a weak attemt to sell the house then, but had it over-priced.

If I had stayed a renter for the past 11 years, I would have saved a lot more, had a mixed portfolio, and could have adjusted to the life changes more efficiently.

I don’t regret buying, as I learned a lot. But I won’t do it again.

Real estate can be an investment, if done right, as Garth talks about. But too many people bite off more than they can chew, and become house poor and trapped.

The people who post here that Garth is full of it, are most likely either A)defensive suckers or B) those who’ve done it right and don’t understand how many suckers there are.

#55 maxx on 05.09.11 at 8:57 am

RE: #14 BPOE-

Thank you Garth.

#56 C on 05.09.11 at 9:16 am


So what if real estate has gone up over the past 10 years. I bought a condo in 2006 and sold in a year ago. Things changed in 2008-2009. That was the pricking of the global debt bubble.

The thing is Canada has ramped up debt since the collapse and things are going to get a nasty when we decide to catch up to the rest of the world in unwinding our debt.

Look forward that’s what you have to do when you invest. Where is Canadian real estate going. If you have done well over the past 10-20 years in Canadian real estate, that should tell you something. Find an asset class that may have been lagging for the past 10-20 years and is universally unloved. Think gold back in 2001.

The Canadian real estate market today is the equivalent to the Nasdaq in March 2000.

#57 Wondering on 05.09.11 at 9:19 am

I find it strange that people aren’t selling in this market. This seems like a perfect time for old people (or others) to cash out of the market but it isn’t really happening in Toronto. There is such a dearth of listings that buyers are falling over themselves to buy anything decent. I went to two open houses this past weekend and while I was in the first house there were atleast 20 other people looking. In the second house the agent had to act like a nightclub doorman. When I finally got in there were about 20 people inside looking around the house. These houses were both in the Bridlewood area of northwest Scarborough. A nice area but not by any stretch a hot area.

I’m going to hold off buying because I feel like I’d be overpaying if I bought a ‘move up’ home right now and I think both houses are primed to sell for more than asking.

Here is the second home:

I looked at a home in the same area the week before and it sold for 550 within a week. It was owned by two old people and it needed a significant amount of work.

I guess people don’t want to sell because they think they will then have to buy in a equally hot market. I guess they don’t consider the renting option (as I also don’t) for what ever reason.

#58 The American on 05.09.11 at 9:22 am

Here we go again! BPOE has a hard on for me. Man, you really must have an unhealthy obsession with me and lie awake at night thinking about me in your studio apartment on the second floor in downtown Vancouver. I have made a point that prices are beyond sustainable, especially in Vancouver. Everyone knows it, including yourself. Evidence? You are sounding more and more desperate as each day passes.

You, BPOE, decided to twist/spin it (as usual) and make it into a rent vs. purchase mathematical exercise over a cherry-picked time span of only the past 10 years. Frankly, I owe you NOTHING, and you will be getting nothing from me. I don’t feed such ignorance, delusion, and stupidity. You do not possess the ability to process what I would provide you anyway. BPOE, food for thought… When the market DOES collapse in Vancouver (and values are INDEED retracting now) and people have not sold who may have bought only three years ago, they’re going to lose their shirts. You know, I know it, and the entire blog knows it. Why did you only pick a time span that is over 10 year ago, which would obviously serve your purpose? Hell, you should have just went ahead and made it 40 years for that matter to support your case even more if you want to cherry-pick. After all, the average Canadian does not own his/her home for the length of 10 years. Not even close. You’re a fool. Plain and simple. Now, will you take your ball and go home, please? Nobody respects you on this blog because most people here have cognitive thinking abilities. You’re an angry little man with little to nothing to offer. We on the blog are only amused by such horrific advise and delusional “case studies” you provide. That, BPOE, makes you a muse for our moderate pleasure. Do you understand that? It isn’t a good thing. Also, PLEASE go back and learn better writing skills. Of course, mine are not perfect, but they are at the very least understandable. Thank you, and good luck to you.

#59 Bottoms_Up on 05.09.11 at 9:36 am

$25-45k SFHs recently sold in a Phoenix suburb.

#60 The American on 05.09.11 at 9:44 am

At #31: BPOE, first, Garth pays me nothing. I have never corresponded with Garth, nor would he care enough to correspond with me. FALSE CLAIM #1

You claim I’ve been exposed as a “fraud.” I have not been exposed as such, I am not such, and you have not proven such. FALSE CLAIM #2

You claim you post actual “facts” about Vancouver real estate. That, BPOE, you do not. Perhaps this is where you are either delusional or a sociopath. You have posted SEVERAL false claims on this matter, of which you have been proven to be lying about by not only me, but other bloggers too. FALSE CLAIM #3

You claim I have a “posse” that comes to “shoot [you] down.” FALSE CLAIM #4 You do just fine on your own having respondents recognize your ignorance and post directly to you.

You claim you believe I am a “bitter renter.” I am not a renter of any kind. I own multiple properties for investment and three homes across the U.S. I bought when the TIMING permitted it and the markets were at or near bottom, making the properties a good buy. FALSE CLAIM #5 If I were a renter, however, the unwarranted hatred you have for them is almost sickening. There are a plethora of reasons people may choose to rent, none of which are YOUR business whatsoever. Renters are not second class citizens and there is absolutely ZERO shame in it.

You claim “[I] made an unrecoverable financial decision” intimating I had purchased real estate in Seattle. However, in the very same train of thought you claim “[I] like to rent.” So, which is it? I honestly think you’re ill. Really, I do. FALSE CLAIM #6

One last note to prove your ignorance and delusion. The world does not go to Vancouver. Vancouver’s population proves that in itself. It is TINY by any city’s standards. The world does not even go to Seattle. The “world” goes to the likes of New York City, Paris, London, LA, Tokyo, Hong Kong, San Francisco, Sao Paulo, and Amsterdam. The fact that Seattle’s infrastructure, highways, roads, signage, shopping, restaurants, businesses, and so on are all exceedingly better than Vancouver’s in most every way imaginable is proof enough. However, the fact the Seattle metro is 64% larger than all of Vancouver’s, and Seattle is still experiencing a larger percentage of influx in population growth than Vancouver is proof enough the “world” chooses Seattle, not Vancouver. Again, if you want to make this a Seattle-vs.-Vancouver discussion, you may want to reconsider. I guess once again, you’ve been proven wrong.

#61 Tony on 05.09.11 at 9:51 am

Re: #37 Gord In Vancouver
Interest rates in Canada are falling GIC’s are paying less so is the 30 year bond. Rates will continue to decline for the rest of this year.

False. — Garth

#62 The American on 05.09.11 at 9:57 am

AT #31 and at #46: BPOE and Oh! Canada, thank you for proving my earlier point that you are both one in the same. BPOE in post #31 intimated that Garth is paying me to blog on this site. #46 makes a false claim that I am “brown-nosing the authour of this blog at every opportunity.” Actually, would please point out where I’ve ever addressed Garth?

I’d also like to point out that both BPOE and Oh! Canada are obviously pissed about the comment I made earlier to BPOE, “Not recognizing or acknowledging the fact that the market is in a bubble as values have exceedingly surpassed the point of sustainability.”

Is this your new tactic, BPOE, Joseph, and Oh! Canada? You are all one in the same, and it is more evident than ever. BPOE, you’re not even a good liar as I was easily able to spot you miles away, trying to pose as someone else. You’re a muse.

#63 Daystar on 05.09.11 at 10:10 am

#46 Oh! Canada on 05.09.11 at 6:34 am

So what you are saying, if I’m not mistaken, is that nationally housing is an sustainable “affordable” market with room for growth? You base that on low listings, is that it? Is that all?

Please enlighten… are interest rates going to get cheaper? Are term lengths going to get longer? Will monthly payments on debt suddently drop? Variable rates will go back to zero? Cause that is what it will take to create a more “affordable” temporarily “sustainable” RE market with room for value upside (until rates go up that is…).

Please enlighten and tell us where all the cash buyers are coming from and please spare us the millionaire chinese story, there simply aren’t enough of them to save us from ourselves. There aren’t enough millionaire’s in Canada to save us from ourselves, its just how it is.

The reason why listings have shrunken and home values continues to climb in the face of falling sales is the combination of 2 factors, so listen up and learn something before being accused of knowing next to nothing. (your grammar is good and you can form paragraphs, so you have a shot at this, I’m rootin’ for ya’).

The first is that there is an affluent wealthy percentage of home buyers that pay cash for their homes. There is an inventory of high end homes in Canada which makes it easier for millionaires to list, knowing that if their home sells, they can buy a replacement quickly. All it takes is cash which millionaire. Home values have been moving skyward in this nation because high end homes have been moving in Canada, especially so in cities like Vancouver/Toronto which lift home prices up overall.

The second reason why there are so few listings in Canada is because middle to lower end homeowners in Canada are feeling the effects of unaffordability. They really can’t, if you have caught on to what the effects of overvalued homes do, afford to buy whats listed on the market. Not only can they not afford to buy at current valuations, because listings are low in middle to low end homes buyers buying such homes have a problem selling because there are so few listings to choose from to buy, in case their own house/condo sells so they don’t list first, then buy. This isn’t a case of supply/demand here as some would be led to believe, but a case of unafforability and replacement uncertainty generating fewer listings.

It doesn’t take a genius to guess what happens next (telling, since you haven’t clued in). Interest rates rise, prompting listings by speculators and owners of more than one property. This prompts sellers of properties lived in by their owners who want to move or relocate but listings don’t sell. Why? Unaffordability. Time rolls on, sellers drop prices to try to move their homes and may have to continue to drop prices until “affordability” is reached. If rate increases rise faster than price drops, the entire market collapses in Canada just like the U.S. market did in 05′ (that was the beginning of their nightmare, Interest rates rising from .5% in January to 6.25% by June of 05′ causing 2 million bankrupcies that same year in the U.S., easily proved with links, but I’ve run out of time)and God help us all.

#64 Totalchaos on 05.09.11 at 10:47 am

To Poco:

I really enjoy your posts as I live not far from you. It is tiresome listening to those people blowing smoke. Knowing someone else out there sees the danger is grounding – especially when driving by the new batch of chip board condos being built on Shaunessy. Those places scare me.

Has any one noticed the pre-sale trailer on 8th and McBride in New West? It’s as dead as a door nail. I’mwondering if it will even get built

#65 mario on 05.09.11 at 10:49 am

I don’t trust you anymore. You said last year that house prices will tank by the end of the year and in the spring will be much lower. Now I see houses selling like crazy in Richmond Hill and North York for 80000 more than asking price in a bidding war. And guess who is buying? Chinese 100%. They don’t even speak English.
I know because I’ve been participated in a lot of these deals. Chinese got our jobs and now our houses. I don’t see and end to this unless we nuke them. I am disgusted about this and I am moving south.
What do you have to say about this?

Can we help you pack? — Garth

#66 Charlie Sheen on 05.09.11 at 10:51 am

Just got a notice from TD visa and BMO mastercard. They are increasing the charges for yearly fee and overdraft. I dont use either for any card but looks like something is up. Why would they raise the fees suddenly?…
me thinks Harper’s mothers day gift to the banks.

#67 Vic_guy on 05.09.11 at 11:13 am

@27 Dave in Victoria
I have > 5 colleagues that have been struggling to rent their suites out in good to excellent areas of Victoria (Gordon Head, James Bay, etc).

They’ve been in this situation at various times during the winter = not tied to students.
One in Oak Bay has pulled his rental as he couldn’t find a suitable tenant. He is waiting until next September.

I don’t know if any dropped their prices, but the absence of renters and lack of rental income has been a bit of a conversation @ work.
Anecdotal only, ymmv, etc.

Most of them secured renters after a couple months.

#68 BrianT on 05.09.11 at 11:23 am

Latest MSM news re the USA real estate collapse (it is getting worse)

#69 vreaa on 05.09.11 at 11:35 am

Landlord Mentality – “I expect my tenants to subsidize my speculative bet on Vancouver RE prices”

#70 Oh! Canada on 05.09.11 at 11:37 am

#64 Daystar

Man you are some long-winded my friend. Think twitter.

Disprove my facts:

1. Affordabity index – normal
2. Listing inventory low.
3. Immigration high.
4. Employment numbers expanding
5. Inflation muted
6. Residential mortgae default rates at 0.45%
7. GDP – growing
8. Wage growth matching inflation
9. Low interet rates
10. House porn is the real deal

#71 BrianT on 05.09.11 at 11:44 am

What a Shock! The guy’s kidneys got him years ago-say it isn’t so!

#72 Jeannie on 05.09.11 at 11:47 am

#29 Skyrider. Thanks for the info. on this 3-part video,
I’ve forwarded it friends in the U.S. and Mexico.

#73 CarolMel on 05.09.11 at 11:51 am

@#12 The American
No, they are three distinct people. All three of them were over detailing my Harley in the nude for Mother’s Day. Sweet boys. Not one and the same.

You sound like my kind of girl. — Garth

#74 Cato on 05.09.11 at 11:53 am

US is still showing signs of severe correction, which is shocking considering intervention efforts by uncle sam.

From an income perspective there are better ways for canadians to make a buck then US investment properties, especially if its being financed using canadian debt (which many seem to be doing). Properties that mix personal use/investment probably have potential – areas where you wouldn’t mind living a month or two out of the year and command high rental premiums. My choice would be Hawaii but just haven’t seen blood in the water when it comes to anything near the water. Probably just have to wait until boomers turn into geezers and put trophy properties on the market en masse. One thing boomers need to consider buying personal use investment properties – my generation is screwed financially so might not be a great resale market 15-20 years down the road.

#75 MikeT on 05.09.11 at 11:54 am

BPOE, Joseph, and Oh! Canada… His name is leeeeegion!

#76 SMOKING MAN on 05.09.11 at 12:07 pm

Garth your main premise on a collapse of Canadian RE is that rates will surely go up.

I don’t believe that to be the case. In fact with Bond Yields are coming back down and the Canadian Dollar that just does not want to die will have Carneys nuts in a knot for a while.

Perhaps Mid 2012 before any action on rates with more weight to the downside.

It is one of many factors. Debt is probably more significant. — Garth

#77 BPOE Grade 3 teacher on 05.09.11 at 12:13 pm

Yes…BPOE is an idiot savant

Back in 1911, he predicted the Great Depression(to the exact second, ……WW 11(to the exact hour) and the Titanic sinking (exact latitude and longitude and depth) and that Charlie Sheen would end up hosting the resurrected Gong Show…..(or was that being the entire Gong Show ?)

Mind you, BPOE took a short position on all these events and made a killing as well as being Charlie’s spiritual advisor.

I think BPOE is simply being an intellectual philanthropist,….sharing his unique gifts.

I think the rest of you are jealous.

#78 new_era on 05.09.11 at 12:18 pm

#67 Charlie Sheen on 05.09.11 at 10:51 am

Just got a notice from TD visa and BMO mastercard. They are increasing the charges for yearly fee and overdraft. I dont use either for any card but looks like something is up. Why would they raise the fees suddenly?…
me thinks Harper’s mothers day gift to the banks.

It very simple because the Bank has to make money, and they realize most people living in canada are high risk. So they adjust it accordingly by raise rates of overdraft and probably loans which they are responsible for not CMHC.

Meaning they actually care about who they are lending to. Because they are responsible it the loan is defaulted.

Hey my banks have reduce my lending rates (not that I need it) they also put me in a preferred customer account, reducing my monthly charges and given a higher interest rate, HIGHER THAN MONTHLY GIC’s (what a joke). That because I told them I was going to move if they didn’t do anything.

I know it still a joke Garth, and inflation is higher than what I get , but its only a part of my portfolio and I am pretty diverse, I fear for the world and how unstable everything currently is.

#79 Paul on 05.09.11 at 12:23 pm

Relax. It’s all good.

#80 Hoof - Hearted on 05.09.11 at 12:28 pm

#18 realpaul

My (Canadian)family dispensed with their Point Roberts property aka US property a few years ago. The tax hit was quite high.

IF Bin Laden is actually dead….expect another 9/11 type of terrorist attack in the near future….and THEN even more ramped up homeland security which in my view turns US into a bad place to invest.

With US economy tanking, the usual mind candy solution is to bait a war to revive the economy and deflect public attention.

The US is a failed empire and all that goes with it.

#81 Sea Wave on 05.09.11 at 12:29 pm

Stop the presses: CREA is once again “forecasting” future house price gains based on recent unsustainable blips and trends:

“The national trade association said the average national resale price will gain four per cent by the end of the year because of high prices in Vancouver. In its last forecast – made in early February – CREA said the price would advance 1.3 per cent … Forecasting has proven difficult for the association – in November it said sales would fall by 9 per cent. In the same forecast, it said the national average price would pull back slightly in 2011. ”

You too can be a clever “Forecaster”, kids! Amaze your friends with your ability to foresee future events! Just pick 2 recent data points, connect the dots, and then extend that line months … or even years … into the future!

Man, neoclassical economists are truly the masters of forecasting the past. CREA is so undeniably terrible at “forecasting” that no self-respecting news organization should give such communiqués any ink whatsoever, and yet there it is, time after time.

However, I suppose such inane drivel serves the useful purpose of enabling those who have already decided to buy into this bubbly market with the means of further rationalizing their emotionally-driven decision.

I hereby forecast that the ever-dwindling subset of greater fools will trumpet CREAs latest prediction as further “proof” that house prices will only go up.

#82 Boombust on 05.09.11 at 12:33 pm

“Has any one noticed the pre-sale trailer on 8th and McBride in New West? It’s as dead as a door nail. I’m wondering if it will even get built…”

How about the empty lots on Burke Mt. or the new developments on Glen near Coquitlam Centre?

It goes on and on…

#83 Another Albertan on 05.09.11 at 12:35 pm

The bitchiness in the comments section is almost at an all-time high. It’s been this way for a couple of weeks. This corresponds to what market indicator? A toppy bull-bear tug of war at a possible inflection point?

Everyone else’s mileage may vary.

#84 Devore on 05.09.11 at 12:55 pm

#70 vreaa

vreaa, the landlord comments on that article are pure gold. While railing against supposed renter entitlements, they define entitlement themselves. No one, but no one, “deserves” a return on their investment. If they’ve paid too much for their “investment” relative to the yield (rents, which are easily available to all on Craigslist), and are not willing (or unable) to sell to capture their capital gains (hahaha!) it is not the renters responsibility to bail them out.

Despite rent controls allowing annual rent increases of 2% over rate of inflation, and no cap on rent increases between tenants, rents have gone nowhere in Vancouver. And that has nothing to do with rent controls or entitlements.

All the recent investors (last 5ish years at least) have bet and speculated on price appreciation, knowing they will get peanuts in rent. Now the bitter realities of being a landlord with terrible (or even negative) cashflow are coming home to roost, and of course they blame and slander their customers, the renters.

#85 Dr. WAYNE on 05.09.11 at 12:56 pm

Jeeezz … some of the comments are akin to a stenographer taking notes in a mental institution round table … some of you get a grip.

#86 debtified on 05.09.11 at 1:04 pm

I wonder if there’s a bookie that would take bets for or against RE.

#87 confused and a little crazed on 05.09.11 at 1:15 pm

i juust sold most of my commodity

let’s see if the continued Housing correction causes a flash crash by the end of the year.

anyways there are still some other stocks I considering of buying …going long

how are your stock portfolios doing?

I just ignoring bPOE. it the same story…nothing new really and he posts too much here I do not have time to read it all

#88 realpaul on 05.09.11 at 1:16 pm

Think you’re making money holding real estate? Think again sucker.

“For example, if you had $100 in 1937, it would only take until 1958 for its purchasing power to be cut roughly in half. That’s 21-years.

Then again, from 1958 until 1976, the US dollar lost about half its purchasing power – this time in a shade more than 18-years.

Wanna go again? From 1976 to 1987 – a mere 11-years this time – the Dollar lost about half its purchasing power again.

And again? From 1987 to this year the dollar has lost almost half its purchasing power once again. But you see what’s changed? The length of time it has taken has actually increased a bit — to 24 years.”

The ‘increased value’ is a mugs game of smoke and mirroes designed by your government that has to raise taxes because of out of control spending. So……’re a millionaire …right…..another tax hike coming?

None of this is scary to a civil servant on a defined benefit package indexed to inflation and no medical insurance premiums to pay for life. Canadians are crazy to keep putting up with this stranglehold of socialist legacy nonsense. How can 90% of the population be asked to support a growing group of effete parasites that are sucking an ever greater portion of the tax revenue to pay for their outrageous luxury while seniors starve and kids go hungry?

#89 confused and a little crazed on 05.09.11 at 1:25 pm

62 # tony

intetest rates falll?

no i dis agree ..they haven’t

#90 debtified on 05.09.11 at 1:29 pm

BPOE vs. The American

I am not sure who to feel sorry for: The idiot or the one arguing with that idiot.

I agree with Garth, BPOE is Mr. C. Although, I have a little suspicion that it may be Mr. H or Mr. F.

#91 April on 05.09.11 at 1:32 pm

Boombust #83

Yes, I live just up the hill from that area. Also a presale at 6th St and 5th Ave, or is it Belmont? advertising 1.9% rate. Last time I looked nothing had started though the fence surrounding the lot is now up. There’s 17 for sale condos within two blocks of my area and some have been on the market for over 4mths. 5 have sold in recent weeks.

#92 Dave in Victoria on 05.09.11 at 1:35 pm

#51 alf on 05.09.11 at 8:38 am

Yeah, there is a normal exodus, but the word from long term landlords who were renting at the same time last year is that things have changed. It seems to me just watching during the last 12 months that more apartments are vacant than normal. Just an observation. It seems that suites which were $1200 are now going for $1050 to $1100? and many are inclusive of utilities.

#68 Vic_guy on 05.09.11 at 11:13 am

Interesting man. It’s strange to see in this town. I’m used to the opposite seeing not enough good rentals, but something is different right now. I imagine gov’t hiring freezes and construction slow down has contributed some? I’ve noticed just driving around the seemingly increased number of vacancies even in the winter.

#93 Sea Wave on 05.09.11 at 1:57 pm

#85 Devore

Great post – my feelings exactly – such comments are very telling regarding the current “social mood” of Vancouver-based home-owning “investors” – emerging bitterness and scapegoating as the tide turns (and thanks to VREAA for your service – love the site).

The Sauder School of Business at UBC tracks market rents in Vancouver – they’ve been falling versus historical norms for about 10 years, indicating oversupply. No surprises there with everyone and their dog requiring an “income suite” to make their mortgage payment.

Here’s the site:

Rents steadily falling versus historical norms:

Vacancy rate up sharply since 2008:

As an aside, their data shows that the immigration rate in Vancouver throughout the 2000s was much less than it was in the 1990s … disproving the popular misconception that population growth has been “responsible” for the last decade’s sharply rising house prices:

Bubbles are fueled by stories – stories that are just-plausible enough to warrant retelling and justify behavior, regardless of actual facts.

#94 Bill Grable on 05.09.11 at 1:57 pm

This says it all: From Globe and Mail –

“Vancouver is a city with no visible means of support”.

“The affordability ratio has rocketed upward so quickly that it is now the steepest on the continent: more than double the Canadian average and more onerous than in places like New York and San Francisco. No wonder Vancouver is at the top of the media’s suddenly urgent bubble watch, not just in Canada but also in the United States; outlets ranging from Reuters to Businessweek have reported on a housing market they suspect is ripe for the kind of downfall the Americans are only too familiar with.

If “buyers from China” answers the “who” question about Vancouver’s unique real-estate market, the follow-up question—“Where is this leading?”—is harder to answer. The torrid affair between eastern Asia and Vancouver real estate, now in its third decade, is actually a love triangle from which each party derives very different things. When wealthy Chinese immigrants buy property in Vancouver—and they utterly dominate the top end of the market—they’re actually buying a form of insurance.

What the federal and provincial governments get out of these newly minted Canadians turns out to be a modern form of the infamous head tax that was imposed on Chinese migrants in the 19th century. And what Vancouver gets is an economy that boasts a lot of froth, and not much substance”.


#95 Hoof Hearted on 05.09.11 at 2:00 pm

Canadian politicians have realized the civil service is an entity to be reckoned with, and especially at the Provincial and Federal levels.

Why?…too many professional Polticians at Federal and Provincial level with equally gold – plated pensions. Profesional courtesy.

However, given Canada swallowed the same Global Kool-Aid…the same consequnces.

A breaking point will be reached whereby the Gov’t will have no choice but to shave off the gold back down to cast iron..

The Ontario Teachers Pension Fund , almost its own world gov’t….. is already seeing unfunded liabilities it never anticipated, so WTF is Gov’t going to do?

#96 Alex on 05.09.11 at 2:01 pm

BPOE: First of all, you have to understand that by regaling us with your continuing and completely unfounded reasoning (i.e. Vancouver real estate has been a good investment for the past decade, ergo folks, it will continue to be so forever), you are doing precisely what realtors and the realtor-backed mainstream media consistently do – make outlandish claims based on the inflation of one of the biggest, fattest, greediest, most burst-worthy bubbles of any asset class in our history. That prices all around Vancouver are dropping only adds to its pop-ability.

Secondly, dude, though I live in the Vancouver suburbs, this is not the BPOE. It’s the PPOE (Priciest Place on Earth) and the RPOE (Rainiest Place of Earth) and the MDPOE (Most Delusional Place on Earth). Though it certainly has its charms, when you’re mired in rain for eight months straight – like right now – and you’re paying such incredibly high prices for real estate, food, gas, clothes, and basically every other essential item that exists, the tag Best Place on Earth seems slightly misplaced.

And finally, BPOE, who are you? What are you? How do you benefit from trying to push this thing even higher than it already is? Why do you seemingly want everyone to buy in? Out of the goodness of your heart? And why, oh why, must you begin every post with “Folks”?

I’ll help you get started by telling you a bit about me. I sold my house last year because I was able to get nearly three times what I paid for it, and saw that it’s only downhill from here. I now spend some of my leisure hours writing letters of complaint to editors and the CRTC, and opinion pieces to battle scums like Cam Good. I’m not sure why I feel compelled to do this. I guess I just hate liars.

But that’s me. What about you?

#97 LSC on 05.09.11 at 2:05 pm

This story on BNN:

High debt levels and rising interest rates will dampen Canadian auto sales in the coming years, according to a new report from TD Economics.

Unlike consumers in the United States who have been paring back on their debt levels in the wake of the financial crisis, Canadians have continually taken on greater debt loads—mostly for housing, but to a lesser extent to finance consumption.

The authors project that Canadians will gradually pull back on high debt levels as interest rates rise, and this will have a negative impact on the country’s auto market.

“Any unanticipated spike in interest rates or weakness in job markets has the potential to lead to a significant medium-term correction in Canadian auto sales,” the authors said.

If they anticipate a slowing in the auto sector I imagine this can be transferred to any significant purchase, including housing….

A blog fan…

#98 chris on 05.09.11 at 2:13 pm

Garth continues to forget 1 very important point about Vancouver, its called China.
Had it not been for this giant dragon,his predictions would have come true years ago. Case closed.
Get over it Garth, its not gonna crash here, as much as i would like it to. May God help Canada,Amen.

You will see. Amen. — Garth

#99 CrowdedElevatorFartz on 05.09.11 at 2:24 pm

Sorry folks BPOE just passed out! Not sure if it was excitement or lack of oxygen. Butt either way he’s been a naughty boy and deserves to be punished. I’ll splash some “water” on his face to revive him then its off to the showers we go……..

#100 westopia on 05.09.11 at 2:35 pm

So much for the commodity sell-off. Silver back up to $38 today. WINNING!

#101 Julian on 05.09.11 at 2:42 pm

I still don’t know why Bank of Canada keep the lowest interest rate unchanged. Do you think they will hike the rate this time on May 31th? I don’t think so. It looks to me Mr. Harper wants the house price sky rock to push away many buyers.

#102 Jon in Cowtown on 05.09.11 at 2:59 pm

All other things aside, know of any places in the States where real estate is appreciating? I can’t but then I have to admit that I haven’t made it a study. Even bastions like Seattle have apparently tanked by 30%. My point being, do we know that the market has bottomed out? I would argue not. If you don’t know definitively whether the market has bottomed, don’t buy a thing. The climb back up is likely to start slow and gradual. Far better to buy a place at $160 – 170K when it bottomed at $150K then to buy it at $250K with a further $100K to fall. Don’t worry we’ll all know when the market starts coming back again.

Calgary is filled with bargain hunters who rushed down to Phoenix to pick up a $600K golf course holiday home for $295K. That was last year, now it’s worth even less and to add insult to injury, their strata fees just doubled as Phase 2 and 3 never got built. You don’t want to loose the guard at the gate. Think of all those Americans who just lost their homes and how happy they will be to see you.

#103 Mike on 05.09.11 at 3:03 pm

Source is… Got to Full Charts… very scary and perhaps the beginning up a top in the market. Read the charts and see…. lowest inventory and days on market the highest median and average price. Supply and demand I guess. Would not venture into this market and hope to make any profit in five years. Too risky and just too expensive to say the least. Gotta buy outside the city where you can have a beautiful life without ANY compromises and still have dough in your pocket after you pay the mortgage or have none at all.

#104 realpaul on 05.09.11 at 3:03 pm

LWC #98….the CDN auto industry deserves a kick in the nutz..just like all the other intrest rate vultures who jacked up the unit prices to reflect the leverage between ‘value and monthly payment’. Car prices have doubled…why…….is it because they go faster?

No….its because no one buys cars anymore…they lease them by the month… hasn’t mattered to consumers what anything cost…its all monthly payments….the lower the intrest rate…the higher the ‘value’……convoluted nonsense.

But the government has the same problem with real estate ‘VALUES’…….THEY WORRY ABOUT ‘DEFLATION’ ….why …because if ‘values’ go do their tax revenue projections.

Do you think these parasites give a shit about how much debt the average person has been wheedled into carrying……..not a bit.

The ‘deflation’ that so worry’s the government also worry’s the car makers… will make their fat profits disappear.

How are the increases to the unfunded civic pension fund shortfalls going to be closed unless they keep pumping up real estate values and debt…….the higher ‘values’ generate higher tax revenues. Without the Liberals plan to bleed the taxpayer to afford the luxury lifestyle of civil servants and newcomers this country will get back to basics…..and they sure as hell don’t want that.

Vancouver in a bubble? They’re just getting that now? But still they subsidize foriegn investors to displace the local buyers? Madness. Let China sort out its own problems…why should Canada be the political exit for the disgruntled masses of that country?

#105 Mr. Plow on 05.09.11 at 3:05 pm

#66 mario

Someone who is going to vote with his feet. Well done, you don’t like it in Canada go live somewhere else.

#106 Hoof - Hearted on 05.09.11 at 3:06 pm

Re: BC

look….at History

There was a major boom bust in the late 1970’s 1980’s
Then it was a major recession in the early 1980’s.

The Gov’t held Expo 86….which IMHO was a vector to attract Asian investment knowing full well that nervous Hong Kong residents were looking for somewhere to park their $$$. Li Kai Shing literally got EXPO lands for free. He effectively “blessed” BC to his countrymen

Then the flood of offshore money happened.

Once Mainland China showed post 1997 that it was effectively business as usual…this faux economy created more wealth and demand to BC ….which by then was effectively a safe haven via substantial ass kissing.

Basically the BC economy was the wild west again…anything goes…look at all the crime, etc.grow-opps…gangs…its getting to be a big YAWWWNNNN.

Coquihalla Highway(from BC Metro area to Kelowna) basically was job creator and funnelled those that cashed out with HAM $$$$ to then Premier BillBennetts home riding.

Now it all comes to pass…..Kelowna(Phoenix North) land pimps bascically cashed in with a short term bom dependent on HAM $$$’s fueling the exodus.

Now these Kelowna parties are meeting the grim reaper or trying to downsize…but the brick wall is being .
The Okanagan is a very depressing looking place to be about 8 months of the year….welcome to Phoenix North

#107 SMOKING MAN on 05.09.11 at 3:10 pm

39 poco on 05.09.11 at 12:59 am

Dude I don’t know squat about BC market nor do I care.
If fact weather the market crashes or goes throught the roof, makes no difference to me, Ga Zillionaire here.

I would like a Crash for my kids, we are in the GTA, and one might come but NOT this year!!!!!!! Cow still has pleanty of milk……

Foot note, London GRB Re prices have shoot back up.

You can’t use the USA as an example of things to come here, 80% of the wealth is in 10% of the hands.

Power has done such a fantastic job black holeing all the money that, they need a revolution before a new game off monoply can be started.

#108 CREA speaks the truth on 05.09.11 at 3:26 pm

“B.C. pushes up Canada’s home sales forecast” –

The real BC statistics:

1. “The British Columbia Real Estate Association (BCREA) represents 11 member real estate boards and their approximately 18,000 REALTORS®” –

2. for 2010 – “REALTORS® helped their clients sell 74,640 homes on the Multiple Listing Service® (MLS®) in 2010, a 12 per cent decline from 2009.” –

3. for 2009 – “REALTORS® helped their clients sell 85,028 homes on the Multiple Listing Service® (MLS®) last year, a 23 per cent decline from 2008.” –

Individual data for 2011:

4. Real Estate Board of Greater Vancouver:
The Real Estate Board of Greater Vancouver (REBGV) reports that residential property sales of detached, attached and apartment properties in Greater Vancouver reached 3,225 in April 2011, an 8.2 per cent decrease compared to the 3,512 sales in April 2010 and a 21 per cent decline compared to the 4,080 sales in March 2011. –…pril&year=2011

5. Vancouver Island Real Estate Board:
354 sales total in Apr. 2011 compared to 409 in Apr.2010 and 384 in March 2011 – 13% decrease –…es_summary.pdf

6. Victoria Real Estate Board:
“A total of 574 homes and other properties sold in April through the Victoria Real Estate Board’s Multiple listing Service® (MLS®), down from the 622 sales in March. There were 756 sales in April of last year.” –…tatistics.html

7. Okanagan Mainline Real Estate Board – covered already a few pages ago but still for completeness:
“Overall unit sales during April dropped 32.35% compared to 2010 (to 297 from 439) and slipped 12.64% over the previous month (340 in March 2011)” –…%20Release.pdf

8. South Okanagan Real Estate Board – no statistics available , but 13 open houses in the whole territory.
And this is the list of all the brokerages to call to see how the brisk sales are going –…Brokerages.pdf

9. Fraser Valley Real Estate Board:
The Fraser Valley Real Estate Board processed 1,516 property sales on its Multiple Listing Service (MLS®) in April, a decrease of 15 per cent compared to 1,793 sold during April of last year, and a decrease of 17 per cent compared to March’s 1,818 sales. –

10. Chilliwack and District Real Estate Board:
187 total sales compared to 233 for April 2010 and 188 for March 2011 – and

The remaining of the BC – the info and the stats appear to be nonexistent for a free “public” access.

Suggesting e-mails to:
[email protected] – author of the article
Gary Morse – [email protected] – CREA president
Wayne Moen – [email protected] – CREA President-Elect
Laura Leyser – [email protected] – CREA Vice President
Georges Pahud – [email protected] – CREA Immediate Past President
Pierre Beauchamp – [email protected] – CREA Chief Executive Officer
Moss Moloney – [email protected] – CREA Regional Director (BC and Yukon)

#109 The Other David on 05.09.11 at 3:32 pm

Globe and Mail survey

#110 Young Old Fart on 05.09.11 at 3:52 pm

#32 The Phantom on 05.09.11 at 12:02 am
Evening All:
Something lighter and different this night…I had my first weekend free in quite some time and decided to get off base and walk around the city of Kingston proper…
While I was walking a few blocks away from downtown, a baby squirrel …..


#111 Justin on 05.09.11 at 4:16 pm

ROI on Homes is Zilch
Over Past 35 Years

Even though the real rate of return of the U.S. national house price index was 1.3% from 1975 to 2009, the real rate of return on a typical home was below zero (–0.575%) over that period. That’s assuming a 2.5% annual depreciation rate, a 1.5% property-tax rate, a 7% mortgage interest rate, and a 25% marginal income tax rate, according to Wenli Li and Fang Yang, writing in the Federal Reserve Bank of Philadelphia Business Review and quoted in Monthly Labor Review. “The case for trying to achieve a nation of homeowners needs to be rethought,” the authors say.

#112 Live Under Your Means on 05.09.11 at 4:38 pm

#74 CarolMel on 05.09.11 at 11:51 am
@#12 The American
No, they are three distinct people. All three of them were over detailing my Harley in the nude for Mother’s Day. Sweet boys. Not one and the same.


Hope my hubby didn’t scare you. :-)


#113 Live Under Your Means on 05.09.11 at 5:03 pm

#32 The Phantom on 05.09.11 at 12:02 am

I love nature. Not sure if I mentioned it, but the other day a young groundhog came to our patio door (Euro type) on our upper deck. Put his front paws and nose against the door and looked at me. Called hubby and he took off. We call him Willy McCarthy Jr. after his Dad as he’s half the size as former ones.

BTW, we have little red squirrels here. The most territorial.

#114 poco on 05.09.11 at 5:10 pm

#65-Totalchaos–thanks–i just try to bring a little “truism”of what’s happening in our corner of the housing world. Lots of properties selling and listed for what owners paid back in 08 –many sellers failing to lower their prices and end up sitting with no interest in their properties
i’ve found a couple of properties that have been listed since last spring (condos) and have had 5mls #s and 15 price changes downward (no bull)-the owners dropping their price 2k to 3k at a time–still sitting and now at what they paid for them–i asume these sellers cannot take a loss no matter what—these examples are not cherry picking–it’s going on all over the tri-cities and i can only asume it’s happening in New West–Maple Ridge– Pitt Meadows etc…..
it started with condos last spring and has slowly entered the TH listings this spring–downward trend–SFH sales appear to still be strong, price wise, so we’ll see if this holds for the summer

if you haven’t seen the new Westwood Townhouse complex being built at Westwood and Kingsway in poco (mosaic) it’s a definite must see
their motto is “think tall not small”–that says it all–but the real selling point must be the closeness to the railway tracks and the railway crossing at the intersection.

i still can’t figure out how all those commuters are going to drive out of their complex using a single road that leads to a much travelled main road (and no traffic light)and driving to downtown Vancouver in the 30 minutes as the Mosaic add states it takes–oh they forgot to mention the helicopter
check it out –it’s worth a good laugh—go into the showhomes –stand in the middle of the living room and see if you can touch both walls at the same time–my arms were a little too short!!!!
ps: these were selling like hotcakes before xmas -they still might be but they’ll look similiar to the Leaning Tower of Pisa in a couple of years

#115 Live Under Your Means on 05.09.11 at 5:19 pm

#67 Charlie Sheen on 05.09.11 at 10:51 am

Just got a notice from TD visa and BMO mastercard.

Hubby got a call from TD Visa today offering another program. He was nice but said NO as we pay it off at the end of the month and, actually, rarely use it.

#116 Hoof - Hearted on 05.09.11 at 5:21 pm


Tri Cities was “Richmond / Vancouver West Side ” lite

HAM money forced an exodus to where it was cheaper yet local

The swing was so distorted that in the 1990’s Tri City area SFH were worth more then Richmond homes…around the time of long defunct Street Of Dreams.

Tri Cities is basically Kelowna WEST or Phoenix North…but at least not Surrey.

#117 [email protected] on 05.09.11 at 5:27 pm

gas tomorrow is hitting 1.40 across GTA. That is up 40% in 1 year!!!!!!!!!

Must suck more than ever to live in Milton – G. Fools

#118 Industrial Guy on 05.09.11 at 5:33 pm

The CIBC says the Canadian economy is creating more and better jobs …. well here’s the report. It’s odd. Last month ….. of the 53,000 new jobs created, over 40,000 were part time.

#119 poco on 05.09.11 at 5:36 pm

#108 Smoking Man
Dude I don’t know squat about BC market nor do I care.
If fact weather the market crashes or goes throught the roof, makes no difference to me, Ga Zillionaire here.
I would like a Crash for my kids, we are in the GTA, and one might come but NOT this year!!!!!!! Cow still has pleanty of milk……
wasn’t trying to “slight” you but in one of your previous posts you mentioned you wanted your kids out of the house and were going to send them out west–i may have interpreted wrong–my apologies–(i didn’t take you too seriously in kicking your kids out anyways)but there are some great deals out here by the way and they will get better as time goes on

PS: went to vegas a week ago–tried your way of going all in–guess what–it didn’t work!!!!

#120 Nostradamus Le Mad Vlad on 05.09.11 at 5:56 pm

4:40 clip Tchaikovsky, The Tortured Ponce. A study on The Art of Lumberjacks 2:27 clip.
Thought Of The Day

“I am free, no matter what rules surround me. If I find them tolerable, I tolerate them; if I find them too obnoxious, I break them. I am free because I know that I alone am morally responsible for everything I do. — Professor Bernardo de la Paz, “The Moon is a Harsh Mistress”, by Robert Heinlien” (
2:14 clip Humor. Obama holds a job review, with each American citizen.

Obama Neocon fear, rather than change, is the latest desperate ploy for re-election, and Market Rigged? Ask govts. WH Panics Orders patsies (m$m) to tell people they don’t want to see pix of ObL.

Fukushima “Today (yesterday) is / was the 8th. There was most probably a fire yesterday, as well as a huge increase in released radiation today…”; Fukushima radiation fallout exposed, and North America fallout.

CC influences Wi-Fi “Just when you thought “climate change” articles couldn’t get any more ridiculous…”
0:20 clip Why do docs want this ad banned? Pro-vaccine (so they are being paid extra to vaccinate everything in sight).

1:49 clip Debt ceiling raised 100 times since 1940. Inflationary Depression. Housing Crash Not slowing down, speeding up. Florida Sux (oil). Britain’s Richest keep getting richer.

Domestic Spying on the rise. Probably here as well, and Creeping Tyranny.

#121 Mr. Plow on 05.09.11 at 6:00 pm

#63 The American

“you’re a muse”

A muse is a source of inspiration. Care to choose a different word?

#122 grantmi on 05.09.11 at 6:02 pm

#101 westopia on 05.09.11 at 2:35 pm

So much for the commodity sell-off. Silver back up to $38 today. WINNING!

Not so fast Westopia boy!!

Though silver rebounded by 1% on Friday following its biggest one-day drop in three decades, it looks like the bull run may be over. As “It’s going to be a long time before silver can find a bottom to turn higher again.” Dennis Gartman, publisher of the Gartman Lette, told Reuters. “When you have this kind of damage, it will take several weeks or maybe several months for people to be taken out, and for confidence to be rebuilt.”

#123 Mr. Plow on 05.09.11 at 6:02 pm

First the obsession with Devil’s Advocate. Now BPOE.


The man is entitled to his opinion.

If you want to have a pissing contest with an anonymous person I hear such services are available for hire by the hour in most big cities. Google it and see what comes up.

#124 Live Under Your Means on 05.09.11 at 6:08 pm

DH just spent the last hour + doing up a spreadsheet to determine how much we’ll save by having installed an ETS system downstairs. Plan on putting in a smaller one upstairs this fall. Within 2+ mos. we estimate we’ve already saved about $600 on energy costs. Granted, since we put in one, I do laundry, run the dishwasher, etc. & we have put in programmable thermostats in every room. I’ll update the spreadsheet and we’ll see how much we’ve saved over time.

The last several years we mostly heated the house with the wood stove downstairs, but the cost of wood has risen greatly over that time. It’s messy and requires quite a bit of work. During the winter when I’m a bit chilly in the early eve I sometimes make a fire in the upstairs fireplace (insert).

#125 jess on 05.09.11 at 6:34 pm

brain T
..,President of Pakistan said that years ago …but then the usa gives 1.5? billion worth of aid /year
besides Mr. Bin Laden’s own organization has confirmed his death.
However, the Iranian president was told to step down by the highest religious leader. And how about that Sister Nora from Penn. taking on the other golden gods.
btw…i have rented the same place for twenty years my rent increased 8/year (from 750. -910.)

#126 S.B. on 05.09.11 at 6:39 pm

Hi Garth, still posting links on Facebook? FYI an article

Facebook is influencing what news gets read online as people use the Internet’s most popular hangout to share and recommend content.

Facebook was responsible for 3 per cent of traffic to the 21 news sites that allowed data to be tracked, according to the study’s co-author, Amy Mitchell. Five of the sites studied got 6 per cent to 8 per cent of their readers from Facebook.

The referrals typically came from links posted by friends on Facebook’s social-networking site or from the ubiquitous “like” buttons, which Facebook encourages other websites to place alongside their content

*Click here to Like this post! Be the first of your friends.

#127 Junius on 05.09.11 at 6:52 pm

To the American and others Re: BPOE,

Let’s not forget that we need BPOE on this blog. Otherwise it would be impossible to explain to people of Canada and the world how delusional people in Vancouver are. BPOE may be an exaggeration of how many people here feel and think but he is not far off.

As Re values fall in the coming months think of him when you think of the general attitude in Vancouver and how hard people here are going to take it. Not pretty.

#128 Romeo Jordan on 05.09.11 at 6:54 pm

#129 Junius on 05.09.11 at 6:57 pm

#77 Smoking Man,

You said, “Garth your main premise on a collapse of Canadian RE is that rates will surely go up. I don’t believe that to be the case.”

You seem to forget that most of the mortgages people are entering into are 30 or 35 years. Are you suggesting that rates are not going up during the term of these mortgages?

Even if they don’t go up for a year or two they could still be up for 80-90% of the contract term or more. It is not a matter of “if” they will go up it is “when” and “how quickly.”

#130 Kevin in Winnipeg on 05.09.11 at 7:06 pm

Sales decreased 13% in Winnipeg because of flooding?? That’s some good spin.

#131 Victor on 05.09.11 at 7:10 pm

Garth, you’re quoted in today’s post:

Sal Guatieri, senior economist with Bank of Montreal, says there is a “world of difference” between the Canadian and U.S. housing market.

“All things come to an end. At some point, the U.S. market has to bottom. Prices cannot fall forever,” Mr. Guatieri said. “Canadian house prices also cannot continue to rise, at least in some regions, faster than incomes forever.”

For now, strong job growth and low unemployment rates continue to help the Canadian market, he says. But we also benefit from a market not as overburdened by supply.

Canada Mortgage and Housing Corp. released statistics that show construction in Canada continues to slow. It said 179,000 homes were constructed on a seasonally adjusted annualized basis in April.

“That’s more in line with our demographic needs. There is little evidence of overbuilding in Canada’s housing market,” Mr. Guatieri said.

Business author Garth Turner said the intent of the housing industry is to foster an idea that the market is immune to any sort of collapse by using Vancouver sales to boost national statistics. “This mythology of an immune Canadian marketplace is just that: a myth,” he said.

#132 Junius on 05.09.11 at 7:27 pm

#118 Industrial Guy,

Sad to see Garth’s pal Benny Tal loosing credibility again. Very weak article – IMO. Good catch on your part.

#133 Victor on 05.09.11 at 7:30 pm

Interesting new service being offered by TB Bank.


From: EasyWeb
Topic: Important Message
Subject: New improvements to EasyWeb: secure messaging, Visa Cheque ordering and Mortgage payment deferral.

Effective April 25, 2011 there will be new and improved changes to EasyWeb. Features include:

– The EasyWeb Messages box on the Personal Financial Summary/Business Financial Summary pages will be renamed to “Your Communications.”
– You can now order cheques through EasyWeb for your Visa accounts.
– If you have a single mortgage, you will now have the option for “Payment Vacation” with the ability to request a temporary deferment from your monthly mortgage payments.

#134 jess on 05.09.11 at 7:36 pm

one down mre to go

…”As leader of this multi-national criminal enterprise, whose members included nationals of Uzbekistan, Moldova, and the United States, Askarkhodjaev arranged for the recruitment and exploitation of dozens of workers from Jamaica, the Dominican Republic, the Philippines, and elsewhere, many of whom were recruited with false promises concerning the terms, conditions, and nature of their employment. Once in the United States, the workers were held in overcrowded apartments and compelled into service and hospitality jobs in as many as 14 states. Members of the criminal enterprise withheld much of the victims’ earnings and threatened them with deportation and financial penalties if they refused to comply with the defendants’ demands.
“The defendant directed a criminal organization that, out of pure greed, exploited the hopes and dreams of scores of foreign workers, degrading them through threats and deceit,” said Assistant Attorney General for the Civil Rights Division Thomas E. Perez. “The Department of Justice will continue to vigorously prosecute these cases and dismantle criminal networks that prey on vulnerable victims.”

“This case was the first in the country in which forced labor trafficking was charged as part of a Racketeer Influenced and Corrupt Organizations Act, or RICO, conspiracy,” said U.S. Attorney for the Western District of Missouri Beth Phillips. “Hundreds of illegal aliens working in 14 states were victims of modern-day slavery, including employees at hotels in the Kansas City, Mo., area and in Branson, Mo.”


Marketing Company Executive Pleads Guilty to Perjury in Connection with Investigation of Spongetech Delivery Systems, Inc.

Defendant Lied Repeatedly During Sworn Testimony Before Securities and Exchange Commission

“Trust me”
Reidenbach counseled the client to place nearly $40,000 in real estate proceeds into a law firm account controlled by Reidenbach and then concealed those proceeds from the bankruptcy court. The indictment also alleges that Reidenbach falsely represented that he had agreed to receive only $1,500 for representing the client in the bankruptcy proceeding. The original indictment, filed December 9, 2010, charged Reidenbach and co-defendant Herbert P. Henderson, another attorney in Lancaster, with conspiracy to commit bankruptcy fraud and concealing assets in bankruptcy by concealing more than $51,000 of clients’ real estate sales proceeds from the bankruptcy court.

#135 Tim on 05.09.11 at 7:44 pm

#136 shane on 05.09.11 at 7:45 pm

Garth, what is your best prediction for the housing market to correct % wise in the markham area for 2011.


#137 ottawa pete on 05.09.11 at 7:48 pm

A question:

I heard today that BoA did not call some $500M Maple 5 year bonds (as is standard practice, but not required) and as a result they rolled over at a much lower variable rate leaving bond holders holding the bag instead of cash. Why would BoA do this and what implications does it have for mortgages if any?

#138 The American on 05.09.11 at 7:57 pm

At #127: Junius, excellent point! I agree with you. Point taken and registered!

#139 CrowdedElevatorFartz on 05.09.11 at 8:00 pm

I have sad news folks.
BPOE succumbed to his “injuries”.
Suffice it to say he had a smile on his face when he “went”.
A moment of silence please…..

Thank you, Now , please realize.
ANYONE , from this time forward who claims to be BPOE is a LIAR !
BPOE is DEAD (sniff,sniff).
I’m getting teary eyed and I’m not sure if it’s my own excretions or if I actually am gonna miss the little tadpole…..
Make no mistake. BPOE is GONE. Any new BPOE’s are FAKES , CHARLATANS, and plagerists.
A POX on any BPOE’s !!!!!!
Boo Hoo. Off to the empty elevator I go……..

#140 The American on 05.09.11 at 8:03 pm

At #121: Mr. Plow. You are correct in your definition of the word “muse.” However, it also means, when used as a noun, “archaic or in a state of abstraction.” This is the context in which I intended. Perhaps you are correct. I will hereby replace it with the word “idiot.”

#141 S.B. on 05.09.11 at 8:38 pm

Another ex-Goldman heavyweight set to take over a central bank…we are done for. The enemy has taken over.

PARIS — The high-level politicking over who will be the next president of the European Central Bank moved closer to resolution on Tuesday. But it is not yet a done deal.

President Nicolas Sarkozy of France said he would support a respected Italian monetary official, Mario Draghi,

He was then vice chairman and managing director of Goldman Sachs International and a member of the firm-wide management committee (2002–2005).

#142 BrianT on 05.09.11 at 9:06 pm

#122Grant-Why are you listening to Dennis Gartman’s opinion on anything?