Suicide call

Those who stagger into this blog to learn when house prices will tumble are finally in luck. However  understand that pricing is just part of the real estate cycle. First, of course, we need foreplay. With me that normally involves personal lubricants, Strange Advance and jumper cables. But don’t judge me.

To get cheaper houses we must pass through a period of languid uncertainty, then declining sales –  often with rising prices (that would be now) – followed by even lower sales and tepid price reductions plus the first inklings in the minds of the masses that real estate is expensive and iffy. Often this comes with some hard news, like rising rates, federal spending cuts, stock market volatility, swelling energy and living costs, a new war, natural disasters, sovereign debt crises, US recession, or a tsunami and nuclear meltdown in an Asian country. Just picking random and crazy things out of my hat…

Shortly after some combination of the above, a few media articles appear expressing a contrarian view that real estate is screwed, while even some economists break the silent code and admit the emperor’s naked. Before you know it, sales slide again and all hell breaks loose. Young buyers stop camping out in bushes in front of sales trailers. Parents give up harassing and belittling their houseless loser children. Renters come out of the closet. Couples who bought with 5% down go into relationship counselling. HGTV stars look for work roofing.

We’re not there yet (and no two markets are the same). But we’re definitely on the path.

Like with that BMO Economics report yesterday, right?

In case you missed it, one of our big banks is now on record forecasting a fat drop in Vancouver, and a wake-up call for Toronto. BMO reminds that Vancouver has seen four crashes in the last thirty years, ranging from 15% to 30%, and since real estate’s soared by 188% in the last ten years, we are about due for the gasbag to rupture. How bad? No call on that. But if rates rise or HAM falters, think Biblical.

As for godless Toronto, houses have about doubled in a decade, now costing 6.7 times income (in 416, the multiple is eight). The last time this happened, the bank offers, prices took a 25% dump.

Of course, given the plethora of long-term risks now rampant in the world, plus household debt and the Boomers burn rate, my bet is these kinds of plops will form the dramatic first events in a long process of real estate angst. But, how is this not already evident? How can rational people believe in virgin birth, the House of Commons or endless price hikes?

Oh, one other sign the inevitable moves closer? Everybody you know’s in denial. And the rest are merely confused. Cue Kimberly:

Hello Garth: Firstly I just want to thank you for sharing your expertise with all of us insane Vancouverites rushing to jump off the cliff. Secondly I want to acknowledge that I do in fact know I am perhaps the greater fool to think you might actually have the time to respond to my personal e-mail. Nevertheless, it is my attempt at asking for help, perhaps you might call it a suicide call for help.

My husband and I (with two small children) are putting our home (townhouse) up for sale within the next month, in hopes to buy a larger house that will accommodate us. And we would like to stay in the same area. GASP! No more holidays for us.

According to your blogs we are going to kill ourselves. As I read more and more from you, I feel like we should still sell right now, but perhaps cram ourselves into an apartment and rent for a few months, until the bubble has burst! Yes it would be extremely challenging, having to pack and move twice, store everything, not knowing where we would be moving and when we
would be moving (children’s schooling etc). But seriously, sounds like it would make sense economically.

Any advice? And can you please let me know when exactly the bubble is going to burst, just a month is fine you don’t have to tell me the exact date. :o).  Sincerely, Kimberly

Kim, Kim. Babe, you already know the answer. If you jump into a larger house, likely taking on a  mortgage the size of Uzbekistan’s external debt, you may never recover. Sure, your mortgage rate will be 4% or less right now, but you’d better figure on 6% or higher upon renewal. And at that time there’s a damn good chance the place will be worth a fifth or a third less – wiping out the equity from your former house and leaving a gaping hole where your net worth used to be.

Why would you financially imperil your family, buying a house when one has never cost more, at a time of economic uncertainty, when rates will rise, your city’s unaffordable by galactic standards, a demographic tidal wave nears and real estate ownership is at saturation levels? Because you think it will go higher? Then, Kimmy, I have failed.

But if this is just about finding more space, what’s the problem? Sell your house to a horny Asian, invest the money, use the income to supplement your former occupancy costs and rent a $2 million house in Kits for two years.

So you move twice. So what? That could be worth hundreds of thousands once prices revert to their mean.

The bubble starts deflating this summer, Kim. The buying comes later. Keep your jeans on.

189 comments ↓

#1 MR Sheep on 06.07.11 at 9:03 pm

The finish is nearing

#2 Joe on 06.07.11 at 9:03 pm

I think we all know it’s starting. Still some bulls in denial running around, but it’s pretty clear now for anyone keeping a bookmark on MLS this spring.

$7,500 a month for a house in Kits?? Who pays that much for anything, rented or otherwise? The kitchen is eentsie-weentsie! “So I bought this awesome house for $2 million and now I’m renting it out. I’m an investor. Look at me. My name’s BPOE!”

I’ve heard rumblings among homeowner friends lately, “House prices go up…eventually.” “I go in for a second mortgage and I can’t believe they didn’t need proof of employment. They just gave us our budget and said ‘Go shopping.’ Until interest rates go up, then we’ll all lose everything (sarcastic humor).”

#3 Was Supermodel - Now Nun on 06.07.11 at 9:03 pm

First!!!

#4 Glasnevin on 06.07.11 at 9:04 pm

bubble bubble
toil and trouble
gunpowder, season and plot
remember june embers
afore the fire rages hot!

#5 Chuck D on 06.07.11 at 9:07 pm

The climate you describe for the bubble to burst – economic uncertainty coupled with media getting on board with real estate being over valued has happened for close to a year. All of the major papers and magazines have done pieces on this in the past year. Toronto Life cover from July 2010 said we were in a bubble. People have shrugged this off for whatever reason. Easy access to large amounts of capital and limited available housing has created an atmosphere in most parts of Toronto in which there is a competitive feeling among buyers. Like Kim I’d like to move up to a better house in a more suitable location but finding a decent house is the hardest part.

A house that I was sort of interested in that hit the market on Sunday (in Thornhill) was sold when I drove by on Monday. This was a house listed at 635 and needed atleast 70k to bring it into this decade. I’m still waiting on the sidelines to move up but seriously regret not buying a new place two or three years ago. Not blaming this site of course but I think maybe I should have listened to more than one source.

#6 Republic_of_Western_Canada on 06.07.11 at 9:07 pm

I don’t wanna pickle; I just wanna ride my motorcicle.

And I don’ wanna die – I just wanna ride my motorcy’

_______________________
“Thevininize me!”, she moaned…

#7 Qazmer on 06.07.11 at 9:10 pm

“HGTV stars look for work roofing”
Roofing has enough drug addicts who believe they know what their doing.

They should look for work as a human punching bag.
I’m sure people would go a little more in debt to take a shot at one of them.

#8 Hoof - Hearted on 06.07.11 at 9:12 pm

111111rrrrrzzzzzttttt

#9 Jonny on 06.07.11 at 9:18 pm

Garth, are housing prices in Vancouver really up as high as they say YOY, 21% in BMO, article. 10% in another, or is the number skewed because of the very high end market? I live in a condo, the price is up but not 21%, they are basically selling for the same price they did last year for a 3 year old building. I am thinking of dumping it, I am ahead and home warranty is running out. Thanks.

#10 Dr. WAYNE on 06.07.11 at 9:18 pm

#3 Was Supermodel – Now MORON …

#11 I pity the fool who drinks soy milk on 06.07.11 at 9:19 pm

Strange Advance!!! For a couple minutes I was a kid again with not a care in the world. I have never been nostalgic for my early teens until just now. You nearly made me cry.

#12 Bottoms_Up on 06.07.11 at 9:21 pm

Kim, if your townhouse mortgage is 3 x your family income (or less), don’t move. If the house you want to move up to will put you over 3x family income, don’t move.

A colleague of mine grew up (yes, I’m talking through teenage years until university) in China with 3 brothers and 1 bathroom in a 2 bedroom apartment.

Think about it, you likely have plenty of space.

#13 kc on 06.07.11 at 9:24 pm

http://www.globalnational.com/video/index.html

click on the Asia re influx …

have your gag bag handy, what a rehash of the HAM coming to save the world. Same guy who pulled off the helicopter stunt has opened a office in China to sell pre-sales … spare us (but in a strange part, watch his eye contact as if he believes his own story) LOL

#14 Lisa on 06.07.11 at 9:24 pm

Love your writing style…so funny.
Watched “The National” tonight and no word on the BMO bubble report…guess they don’t want to upset Canadian homeowners so close to bed time.

#15 Trailer Park Boys on 06.07.11 at 9:25 pm

Quote:

Those who stagger into this blog to learn when house prices will tumble are finally in luck. However understand that pricing is just part of the real estate cycle. First, of course, we need foreplay. With me that normally involves personal lubricants, Strange Advance and jumper cables. But don’t judge me.

======================================

Is this what Garth means?

He owns a trailer by Mr Lahey and has an option on another

http://www.youtube.com/watch?v=F4RdPBImnuE&feature=related

#16 The Original Dave on 06.07.11 at 9:32 pm

The climate you describe for the bubble to burst – economic uncertainty coupled with media getting on board with real estate being over valued has happened for close to a year. All of the major papers and magazines have done pieces on this in the past year. Toronto Life cover from July 2010 said we were in a bubble. People have shrugged this off for whatever reason. Easy access to large amounts of capital and limited available housing has created an atmosphere in most parts of Toronto in which there is a competitive feeling among buyers. Like Kim I’d like to move up to a better house in a more suitable location but finding a decent house is the hardest part.

A house that I was sort of interested in that hit the market on Sunday (in Thornhill) was sold when I drove by on Monday. This was a house listed at 635 and needed atleast 70k to bring it into this decade. I’m still waiting on the sidelines to move up but seriously regret not buying a new place two or three years ago. Not blaming this site of course but I think maybe I should have listened to more than one source.

————————————

Prices in Thornhill will go below prices of 2-3 years ago. You’re feeling priced out of the market – like you’ve missed out on a last chance purchase. It wasn’t an error in judgement using this blog as a source. Garth uses the big picture. Prices a few years back weren’t sustainable and prices today are obviously unsustainable. Just be patient. The rewards will be coming.

There is no asset….ever that surged in price, became unaffordable, and stayed that way.

#17 Vancouver_Bear on 06.07.11 at 9:41 pm

http://www.bclocalnews.com/surrey_area/cloverdalereporter/news/123405883.html

It’s coming:” The recent 2008-09 correction – a 13 per cent drop – was actually the mildest of the four.
The worst was 1981-82, when Vancouver home prices fell 36 per cent.”

It will be really different this time and much worse, thanks to prudent Canadian banks and stupid CMHC policies.

#18 Buford Wilson on 06.07.11 at 9:42 pm

Garth now that Harper has a majority, do you regret having been turfed?

When you follow your principles, regret is unknown. — Garth

#19 Vancouver_Bear on 06.07.11 at 9:42 pm

http://www.bclocalnews.com/surrey_area/cloverdalereporter/news/123405883.html

It’s coming:”The worst was 1981-82, when Vancouver home prices fell 36 per cent.” I bet nobody from the Vancouver RE pumping herd remembers that.

It will be really different this time and much worse, thanks to prudent Canadian banks and stupid CMHC policies.

#20 Jsan on 06.07.11 at 9:46 pm

Could this be the most fiscally retarded generation we have seen? Is it any wonder that they are rushing into ridiculously overpriced real estate with attitudes like this? Many of them will soon realize that the light at the end of the tunnel coming towards them at high speed is not the end of the tunnel.

“Your kid feels empowered by student debt: Study”

“When it comes to young adults aged 18 to 27, the more credit card and university loan debt they carry, the more they feel in control of their lives, and their self-esteem rises with their debt level.”

http://www.theglobeandmail.com/life/the-hot-button/your-kid-feels-empowered-by-student-debt-study/article2048860/

.

#21 Uncle MO on 06.07.11 at 9:46 pm

It looks like China is going through it’s own crisis.

http://www.planbeconomics.com/2011/06/07/stealth-bailouts-in-china-dylan-grice-comments/

And, as we all know, when China turns so does Canadian real estate, right?

#22 TurnerNation on 06.07.11 at 9:47 pm

Bread and circuses…

Quote: “Imagine “club-wielding protestors” sacking Washington strongholds next. Yes, we had previews of coming attractions in Wisconsin. The governor’s war against public unions. Yes, the American public is “Mad as Hell” concludes Tony Dokoupil in his Newsweek: feature: The “Days of Rage already seen overseas. In Spain last week protesters clashed with police, a violent demonstration against economic woes and austerity measures — much like those under review in Washington.” Our angry masses are a ticking time bomb.

Unfortunately, after the early broadcasts about Eqypt and Libya, cable news shifted back to the bizarre “reality TV” world of Trump, Palin and Romney. But off camera, the “Days of Rage” continued sweeping the Arab world, “exploding out of a volatile mix of high unemployment and large numbers of educated, ambitious people who feel their dreams have been denied — something with which an alarming number of Americans can identify.””

#23 kc on 06.07.11 at 9:48 pm

6 Republic_of_Western_Canada on 06.07.11 at 9:07 pm

I don’t wanna pickle; I just wanna ride my motorcicle.

And I don’ wanna die – I just wanna ride my motorcy’

You better go down and join the rest on the group “W” bench….

#24 Tim on 06.07.11 at 9:49 pm

Vancouver Home Prices could fall 21%

http://ca.finance.yahoo.com/news/Vancouver-home-prices-poised-capress-3105641674.html?x=0

Wouldn’t this just be the start of a longer decline?

#25 b on 06.07.11 at 9:52 pm

i am new to renting as i can’t afford to buy despite being on a teachers salary (laugh don’t attack). Looking to get in to liberty village Garth whats a resonable price for a 1 bedroom with parking. thanks great site

#26 Boycott on 06.07.11 at 9:54 pm

Spread the message….boycott home buying

http://www.facebook.com/pages/Canada-home-buyers-boycott-now/203937936304340

#27 chuck d on 06.07.11 at 9:59 pm

Original Dave – I appreciate the tone of your message. Some people get worked up about these things. I agree with you for the most part and that’s why I have continued to hold off. Thanks.

Here’s an ad I came across that I thought was interesting. Not sure what the deal really is but the agent looks very shady.

http://toronto.kijiji.ca/c-real-estate-houses-for-sale-UP-TO-24000-IN-GOVERNMENT-FUNDING-FOR-YOUR-BASEMENT-APARTMENT-W0QQAdIdZ273962128

#28 Kim on 06.07.11 at 10:02 pm

Kim, buy a king size bed instead.

#29 sol on 06.07.11 at 10:09 pm

Garth what happens to the Canadian economy when the correction actually happens. With every passing month it seems like the correction is going to be even bigger. CMHC is on the hook for most of the debt so it will absorb most of the defaults. Then I am not sure what is going to happen in terms of economic growth etc. don’t ask me to look at the American economy, since the banks here won’t need a bailout as they are already bailed out by CMHC.
I need some analysis from you. I need a forecast, from you, of the economic climate in Canada during and after the correction.

#30 Kim on 06.07.11 at 10:10 pm

The crown of contentment is seldom worn by Kings… so sleep in one instead and rent. (and then your ‘GASPS’ will only be the good ones).

#31 JohnnyBGood on 06.07.11 at 10:13 pm

#140 MM on 06.07.11 at 3:04 pm

There is a self-reinforcing aspect to rising house prices, but the prime factor is cheap money.

When money is readily available, it has less value, so people are willing––and even eager––to spend more of it, particularly on things that are in high demand. It’s in the high demand goods where bubbles can form.

Also, don’t forget that, generally, a house can only cost as much as a bank is willing to lend. So when you conflate eager borrowers, eager lenders, and low credit standards, you get…

On a macro scale, cheap money is the standard means by which fiscal and monetary authorities spur economic growth when the economy is depressed. And it usually works.

But it hasn’t worked in Japan for two decades. Doesn’t seem to be working in the US right now, either. At least not in housing. That’s because not even dirt cheap money can spur lenders to lend and borrowers to borrow when lenders fear default and/or borrowers just don’t want, or can’t take on, any more debt. But despite that, the central banks keep trying to stuff IOUs into people’s pockets.

In the US the cheap money is showing up in stocks, bonds, gold, and just about every other asset, except housing. In Canada, most of it seems to be going into housing. It’s usually not hard to pump up the housing market with cheap money because there has historically been pent up demand for houses.

But the fact that banks continue to reduce mortgage rates indicates that, even in Canada, the growth in demand for mortgage debt is declining faster than the growth in “supply”, despite what is happening with house prices, which keep going up because supply is falling faster than demand. (I put the word “supply” in quotes because when it comes to debt, the demand IS the supply.)

More and more evidence supports the notion that Canadians have reached or are close to debt saturation. Which of course means we’ve already taken on far too much for our own good. Again, to me it looks like the US circa 2005 or 2006.

BTW, Garth: I love “We Run” by Strange Advance, too. Yes, it’s part of my huge ’80s collection–and I don’t care who knows it :)

#32 Hoof - Hearted on 06.07.11 at 10:14 pm

Wikileaks: Speculators Helped Cause Oil Bubble

http://www.rollingstone.com/politics/blogs/taibblog/wikileaks-cables-show-speculators-behind-oil-bubble-20110526

Well, thanks to Wikileaks, we now know that when the Bush administration reached out to the Saudis in the summer of ’08 to ask them to increase oil production to lower prices, the Saudis responded by saying they were having a hard time finding buyers for their oil as it was, and instead asked the Bush administration to rein in Wall Street speculators.

According to the McClatchy report, the Wiki cables show that Saudi ministers repeatedly told Bush administration officials that increasing production might be counterproductive.

The cables show that at the height of the bubble, in May 2008, U.S. officials met in Riyadh with the Saudi assistant petroleum minister, Prince Abdulazziz bin Salman bin Abdulaziz al Saud, who told the U.S. he was “extremely worried” that high prices would destroy the demand for crude.

“Aramco is trying to sell more, but frankly there are no buyers,” he reportedly said, referring to the Saudi state oil company. “We are discounting buyers.”

The issue here, which I covered somewhat in Griftopia and in “The Great American Bubble Machine,” revolves around the influx of speculative money into the commodities markets. Because of various changes to the way commodities were traded — including a series of semi-secret exemptions handed out to commodities speculators, allowing companies like Goldman Sachs to popularize commodities speculation — there was, by the summer of 2008, a cascade of investor money pouring into commodities, mostly all betting on a rise of commodity prices. Much of this might have been due to money flowing out of mortgages and into the “safe” haven of commodities, with exploding energy prices being an unwelcome side effect. While there was less than $20 billion of speculative activity in commodities in the early 2000s, by 2008 that number had jumped up to well over $200 billion, with virtually all that money being “long” money, i.e. bets on a rise in prices. All of that new money turned into a battering ram pushing prices through the roof. We are seeing the same phenomenon this year.

================================

Ah the giant vampire squid strikes again

….Commodity suckers…sell

#33 Hoof - Hearted on 06.07.11 at 10:22 pm

Illicit Financial Flows from
Developing Countries: 2000-2009
Update with a Focus on Asia

http://www.gfip.org/storage/gfip/documents/reports/IFF2010/gfi_iff_update_report-web.pdf

“… trade mispricing which has been long recognized as a major conduit for capital flight. The underlying rationale is that residents can acquire foreign assets illicitly by overinvoicing imports and underinvoicing exports. In order to capture such illegal transactions, a developing country’s exports to the world (valued free-on-board, or exports f.o.b. in U.S. dollars) are compared to what the world reports as having imported
from that country, after adjusting for the cost of transportation and insurance. Similarly, a country’s imports from the world after adjusting for freight and insurance costs are compared to what the world reports as having exported to that country. In transferring money abroad, the importer declares a higher import value to the customs department than the value of goods recorded by the exporting partner country. Similarly, an exporter would understate the value of goods actually exported (in relation to the imports recorded in the importing partner country) and keep the balance of funds abroad. Therefore, discrepancies in partner country trade data implying overinvoicing of imports and/or underinvoicing of exports indicate the transfer of illicit capital abroad. The world figures for exports to and imports from a particular country are derived based on partner-country trade data reported to the IMF by its member countries for publication in its Direction of Trade Statistics (DOTS).”

#34 Min in Mission on 06.07.11 at 10:22 pm

@ 6 & @ 23
showing you age when you know that tune!! Have that album – on vinyl.

#35 Hoof - Hearted on 06.07.11 at 10:30 pm

If this doesn’t start a revolution…….

http://www.globalnews.ca/video/index.html?releasePID=s1TDc5JNkPpCy8pfSqI87RYo3uZyim7m

What an arrogant prick

#36 nonplused on 06.07.11 at 10:36 pm

Kim,

I sold my house in 2008 for over a 100% gain after reading Garth’s book (I think the website came along just after). The prices fell shortly thereafter and have rebounded, but remain below the peak. Where things are at now 3 years later to buy back the same house would pay about 1/3 of my rent so far, but not all of it by any stretch.

However, I’m renting nice digs (ok, it needs work, but I don’t have to do it) and still waiting. It has lots of room for my family and all our toys (3 car garage).

I have rather conservatively invested the proceeds of the sale, and while that’s paying me jack I have other long horizon money invested more like the GarthPlan ™ so all is well.

So, renting can be a reasonable option, even with a family.

Garth on #18,

I think I’ve been following my principles and I still have plenty of regrets. Not saying the principles are all that great. But it also helps to think through what you are getting into, which I didn’t always do.

To the post,

Maybe the housing market looses some steam this summer, but it’s been a long time in coming. At least 3 times as long as I thought, as I thought we would follow the US model, just with a delay. But that’s ok, we learned a lot renting about what to look for in a house, especially an older one, and what we actually want in terms of location, layout, and maintenance (3 acres groomed with trees scattered everywhere is too much, even with a 48 inch deck. And check out the highway/aircraft noise before you buy.)

Oh, and I got the Fukushima thing right days into it again, only to be ridiculed again, even after I got the Deepwater Horizon thing right. I work in a corporate think tank. All we do (and there are 20 of us) is read about stuff, talk about stuff, and build and deliver presentations about stuff, just so the corporate planners have numbers to put in their long term models. Although I am the biggest bear/freaked-out guy in the group.

#37 Tom from Mississauga on 06.07.11 at 10:38 pm

Strange Advance. I see your blog Garth is following Canadian content laws.

The smile was huge after TD head economist left meeting with F before budget, I knew there was no CMHC tightening right there. BMO downgrade housing. Maybe TD is next and that was the agreement they came to in the meeting.

#38 Burnt Norton on 06.07.11 at 10:55 pm

$7500??? Holy canoli. I almost choked on my brown rice BC roll.

We rent a $1.5M place in Van for under $3000. While I get the point that you can rent like a king with income from other investments, prospective renters in Vancouver need to know that there are better deals out there and that CL is not the best website for finding them.

#39 conficted on 06.07.11 at 10:59 pm

I would recommend the lady stay were she is, and them ssell and by in the neighbourhood she wants. Getting in and out of a house costs money. Renting sucks, your creating disruption for the children. It is really hard to find a decent place to rent with kids. What about the school what about their friends? Don’t sell and rent, you’ll regret it.

#40 Cato on 06.07.11 at 11:01 pm

The stars are finally coming into alignment, we may actually see a once in a lifetime opportunity if market is allowed to take its course without gov’t interference. Pretty big if.

The tone of BMO is the true harbinger of doom. Pricing isn’t just set by what house horny lemmings are willing to pay – the greatest influence is what a lender is willing to lend. When banks start viewing market as over valued tightening can’t be far behind. Infact if not for the CMHC I imagine many Canadian cities would be strict no go zones for loan officers. And thats the problem, if gov’t puts the brakes on CMHC risk we’ll see a violent unwinding because there is no way banks are lending at these levels without the taxpayer backstopping the loan. Look at the US, there are actually many potential buyers out there looking for homes who simply can’t get a loan.

Kimberley should sell, get comfortable for a year or two and prepare to get ruthless when the time comes. Being able to negotiate from a position of power with a banker eager to dump assets is better than any win in vegas. You just haven’t lived until you’ve had the opportunity to put the screws to a human worm and watched em squirm during a negotiation.

#41 45north on 06.07.11 at 11:06 pm

Sol: Garth what happens to the Canadian economy when the correction actually happens.

I have thought about that question a good deal.

First of all I don’t know but I am intrigued by the fact that in the US, the banks have tolerated huge delinquent rates in mortgages. They hold the mortgages on their books long after delinquency when it would seem that the banks ought to foreclose just to protect their own interests.

I am thinking that the Canadian won’t tolerate delinquency nearly to the same degree.

#42 Utopia on 06.07.11 at 11:18 pm

Terrific piece today, Garth. I enjoyed it so much I went back and read it two more times. It is ammunition. See, I can copy this one and hand it out to a few people I know who are stupidly stuck on the idea of buying now despite the fact reality is about to intrude on their sorry lives. You can hardly even argue with todays article. Too good, reality is about to bite.
===========

Since I am back in my cave with only my books and CBC Radio One maybe one of the Dawgs can tell me what kind of treatment Global gave to the BMO story tonight.

I am curious to know how they played Sal Guatieri’s remarks suggesting an impending 21% decline in property prices (his number is apparently an estimate based on the average of the last four R/E corrections).

Anyway, that story is big news. So it should also be news on Global too, right? Or will they pump sunshine and helicopters and Asian R/E investment potential with bags of cash in brown paper sacks instead?

I wonder…

#43 Nostradamus Le Mad Vlad on 06.07.11 at 11:19 pm


“Just picking random and crazy things out of my hat and all hell breaks loose.”

Ever thought of taking the blog to the numerous solar systems, quasars — spreading the message, as it were? I see a handsome business opportunity waiting — ADVERTISE IN SPACE!

“. . . think Biblical.” — About godless Toronto or voluptuous Vancouver? Heaven – Hell, all sorts of ideas come to mind!

“The bubble starts deflating this summer, Kim.” — Maybe so, but this damn summer hasn’t started yet. It should get going by November 2013.
*
#21 Uncle MO — “It looks like China is going through it’s own crisis.” — Could be a pre-planned crisis, cashing in all their US debt holdings, then taking down their own economy, killing either the Yuan or Remnibi thus leaving TROTW in a “Dazed and Confused” state. That will screw things up for a short while!
*
4:38 clip Tio Ten US corporations which don’t pay tax. I’m not one of them. Oil Beneath California What happens if the SAF has other ideas?

Links in. Things generallly happen in threes; two volcanoes (Mexico and Chile) have gone loopy, so where’s the third? Or is it ‘quake and shake time in the PNW? Try this. Pix of Chilean volcano.

China Not a conspiracy theory. Wants to build a 50 sq. mile self-sustaining city in the U.S., with the debts they hold, and China — Trade war with the EU?

Links in. The Toilet has been exposed by Hillary Clinton (of all people) as a set-up. Bosnia Pyramid built 10K years ago.

ECB is the lead domino, and may crash in on itself. Scapegoats Obama’s performance as Prez? Blame Japan and Europe! Mississouri (wasn’t that deliberate?) now threatens Nevada’s nuke plant. Eleven cent toll on public highway in the US? Yep, the elite are taking away our freedoms, bit by bit.

Monty Python Strikes Back! Elderberries!

Ten Min. clip The NWO Guide for Dummies.

Boiling Fat Don’t try this at home; he seems to have a special gift.

Coca Cola What the after effects are, and how the body reacts to it. However, in lieu of Coke, try Pomegranite juice.

#44 Trent Yawney on 06.07.11 at 11:22 pm

#31 JohnnyBGood

Awesome post.
thanks!

#45 a prairie dawg on 06.07.11 at 11:42 pm

@ #25 b

“resonable”

I’m going to go out on a limb and guess you’re not an English teacher…

#46 BPOE on 06.07.11 at 11:42 pm

WOW LOL thanks for the chuckle haven’t had a good laugh like that in awhile. Pretty convenient to paraphrase the article. The article talks about a drop IF interest rates go up. We all know this is never happening as the Conservative Government has stated ON RECORD “Our number 1 priority is the economy”. Let’s take your point of view. So what if it drops. Like I have been stating over and over nothing goes up in a straight line BUT over the LONG TERM Vancouver has consistently gone up. EVEN with those corrections mentioned it came ROARING BACK! With 1 billion customers from around this uncertain world looking for a place to park their millions, the buck has stopped and it stopped in Vancouver. Interest rates, CANADIAN family income, jobs etcetc don’t make a hoot of difference. Everyday I am proven correct as Vancouver SOARS. Look at the chart over 30 years. Overall did Vancouver SOAR or Falter? We all know what the TRUTH is now don’t we. One final note HAM will NEVER EVER EVER FALTER. The Conservative Government has given their guarantee for this not to happen. Stay tuned for more in the coming months as the PLAN is unveiled by the Government.
******************************************
In case you missed it, one of our big banks is now on record forecasting a fat drop in Vancouver, and a wake-up call for Toronto. BMO reminds that Vancouver has seen four crashes in the last thirty years, ranging from 15% to 30%, and since real estate’s soared by 188% in the last ten years, we are about due for the gasbag to rupture. How bad? No call on that. But if rates rise or HAM falters, think Biblical.

#47 Potato on 06.07.11 at 11:46 pm

Kim: there aren’t as many decent rentals in the townhouse/detached category as there are up for sale, but there are some, and you only need to find one.

@Joe #2: It is an outrageous sum at first brush. But if the house would sell for much over a million, it’s better to be renting it for $7.5k/mo. And I suspect that in this market, it would sell for much, much more than a million.

#48 BPOE on 06.07.11 at 11:47 pm

Yeah Bear and if you would of bought in the early 80’s or held through that correction you would be rich now instead of in the basement suite . The pro renters like you and Junius and the american mad a UFD Unrecoverable Financial Decision. You look short term instead of the big picture and paid BIG TIME
********************************************
Vancouver_Bear on 06.07.11 at 9:42 pm
http://www.bclocalnews.com/surrey_area/cloverdalereporter/news/123405883.html

It’s coming:”The worst was 1981-82, when Vancouver home prices fell 36 per cent.” I bet nobody from the Vancouver RE pumping herd remembers that.

It will be really different this time and much worse, thanks to prudent Canadian banks and stupid CMHC policies

#49 vatoDETH on 06.07.11 at 11:48 pm

Kim, Garth has been predicting a quick drop, followed by a slow melt down of prices. This is basically what happened to the USA. The prices in the USA have been dropping for how many years now?

Personally, I don’t want to spend too many years renting, because I could potentially be building equity. So this will be a bit of a balancing act.

I also want to buy when interest rates are extremely high, if they climb way up there. If they are really high that means I will easily afford a mortgage when they go back down. Extremely high interest rates only hold their rate for a brief period of time.

At this point I have no debt and I have toughed out the hardest part of renting during the Alberta boom. I will probably sit back and wait as long as possible at this point. Either when I find something very affordable or when things seem to be bouncing back from bottom. Probably a combination of both.

It’s been a long wait, thanks to low interest rates. I’m not complaining either… it’s just the way it is. I’ve been patient and I’m feeling a lot of relief!

#50 six-figure-renter on 06.08.11 at 12:15 am

Cam Good is a tool!

#51 Michelle on 06.08.11 at 12:18 am

God! I forgot how lame those ’80s music videos were :)

#52 Sunny on 06.08.11 at 12:31 am

Cam Goode and a bunch of non-english speaking Chinese women telling Global news that Vancouver is cheap and maybe we should move if we don’t want to pay these prices… WTF, is Global for real??
God forbid they should report on the BMO prediction of a market correction in Van

http://www.globalnews.ca/video/index.html?releasePID=s1TDc5JNkPpCy8pfSqI87RYo3uZyim7m

#53 Michelle on 06.08.11 at 12:34 am

@nonplused- “I work in a corporate think tank. All we do (and there are 20 of us) is read about stuff, talk about stuff, and build and deliver presentations about stuff, just so the corporate planners have numbers to put in their long term models.”

OMG nonplused! Your job sounds like so much fun! How does one get into that line of work? Do they ever hire medical doctors/microbiologists like me for those think tanks? I’m a world news junkie who loves analyzing the “big picture”.

#54 Will on 06.08.11 at 12:37 am

Only thing people should keep in mind is a housing downturn will reach far beyond the people who speculated in real estate, unemployment will be on the rise and a painful recession/depression will be in store.

I’m as happy to see real estate collapse as anyone, but I doubt many people will be smiling once its all over, unless perhaps you got lots of cash, a job and are renting.

#55 grantmi on 06.08.11 at 12:39 am

#3 Was Supermodel – Now Nun on 06.07.11 at 9:03 pm

First!!!

Idiot!!!

#56 grantmi on 06.08.11 at 12:41 am

#25 b on 06.07.11 at 9:52 pm

i am new to renting as i can’t afford to buy despite being on a teachers salary (laugh don’t attack).

Looking to get in to liberty village Garth whats a resonable price for a 1 bedroom with parking. thanks great site

Are u serious! You’re asking Garth the price of a rental unit in a specific building!

eh! Get an agent!

#57 Mean Gene on 06.08.11 at 1:04 am

Spend some money and get Garth’s book Money Road, it has some ideas concerning your predicament… no I am not a shill.

#58 Thetruth on 06.08.11 at 1:19 am

I don’t know whether the bubble will start deflating this summer…

Everyone talks about HAM…what about South Asian effect??

Driving in Surrey I see many new faces of the Temporary workers and students class of non-counted immigrants. They will be bringing their RE wealth and families here very soon. Large families living in million dollar monster homes…sigh (disclaimer: I’m of SA descent)

#59 Bill Gable on 06.08.11 at 1:27 am

Strange Advance – I just about fell over. Nice Hair. I actually used to play that stuff to the masses in another lifetime.
I got eviscerated for my comment on people buying food with Credit cards – yesterday – but thanks for being polite and nice about it – and many raised good points – like using credit cards for cash back. That I get – but when you use credit cards for small purchases, I just wonder how the cash flow is – just saying.

One political note. Think Mr. Turner had the best line of the year regarding how he felt being “Turfed” by Harper.

I’ll let you read it.

God, I wish Mr. Turner was PM, but if he was, we wouldn’t have this amazing truth telling blog. *And a killer Investment advisor.

So I guess it is a tradeoff.

Personally I think we are darn lucky Mr. Turner can find the time to do this.

Best writing anywhere – and a lot of smart people.

Thanks for everything – Mr. T and dawgs.

Oh, I remember 1980-81 – in Vancouver and what is here and starting, I sadly feel, will be far worse.

When I read earlier post about kids thinking debt makes them have status – it makes me wonder why they don’t explain what interest rates mean, and what the word INSOLVENT means to these boffins.

They have been loaning to anyone who could fog a mirror a few years ago – not anymore.

Even Gordon Gekko has sold out of La La land. If you have a place – sell and get out – or you will be swimming with millions of Americans, and Europeans, underwater.

How long can you hold your breath?

No ‘jingle mail’ in 9/10ths of Canada, amigo.

Whoops.

#60 daystar on 06.08.11 at 1:32 am

#36 nonplused on 06.07.11 at 10:36 pm

Fellow bear, gets freaked out at times, reads, talks, thinks, presents, sometimes wrong and has a conscience, humble, yup, can relate (sometimes), whats not to like? ;)

#31 JohnnyBGood on 06.07.11 at 10:13 pm

You nailed it

“Sure, your mortgage rate will be 4% or less right now, but you’d better figure on 6% or higher upon renewal.” – Garth

Thats a mouthful right there, Garth. Watching a 5 year term expire into 8% wouldn’t be everyone’s ideal dream. How many would try floating in that scenario hoping rates drop only to watch them climb higher?

Yup. Nightmare scenario. Buying a house at these nutty valuations… a buyer might want to price in that kind of risk, not to mention what an 8% scenario would do with equity and values, the supposed “logical” reason for buying a home.

#61 Jody on 06.08.11 at 1:39 am

“If this doesn’t start a revolution…….

http://www.globalnews.ca/video/index.html?releasePID=s1TDc5JNkPpCy8pfSqI87RYo3uZyim7m

What an arrogant prick”

You got that right, I can’t wait until he’s serving my dinner at the local steakhouse, and when the hell did millionaires become “middle class?” Have I been frozen for 5 months and been revived into an hyperinflationary future? Chinese business people will decide to do business and live in Vancouver before choosing Toyko, Sydney, LA, New York, London, Paris, Berlin, Moscow, hahahahahahaaha! What a farce.

#62 reality guy on 06.08.11 at 1:49 am

China’s Bailout plan

Oriental TARP: can this mean the end of HAM?

http://www.businessspectator.com.au/bs.nsf/Article/China-government-debt-financial-crisis-local-autho-pd20110608-HLTXP?OpenDocument&src=sph&src=rot

#63 JCH on 06.08.11 at 1:57 am

Re yesterday #9 Bill Gable, using credit cards to buy food, I do this all the time. I carry maybe $100 in cash, but anything over about $20 I charge. I pay the balance in full each month, am debt-free, exercise my credit score, and get Aeroplan miles for it. CC company hates me, I think.:) I hope that at least some of the people in your example do the same.

#64 vreaa on 06.08.11 at 2:37 am

A remarkably callous piece on the effects of foreign capital inflow into Vancouver on Global TV News:

Cam Good Offers Locals Little Sympathy – “If you don’t want to live in a city that beautiful, with that much demand, then maybe you should live somewhere else. Either you want to live there or you don’t.”

Transcript, stills and brief comment:

http://wp.me/pcq1o-2tY

#65 Gimli Son of Gloin on 06.08.11 at 2:55 am

U.K. Mortgage Cap Would Help Cure ‘Addiction to Inflation’
U.K. lenders should cap mortgages at 90 percent of the property’s value and no more than three-and-a- half times a household’s annual income to prevent another housing bubble, the Institute for Public Policy Research said.

http://www.bloomberg.com/news/2011-05-30/u-k-mortgages-should-be-capped-to-cure-addiction-to-inflation-.html

#66 Captain Jack on 06.08.11 at 2:56 am

We need to start posting links to RE news, indicating the coming decline, on asian websites. For example, google.china, google.hongkong, and any other popular chinese or asian real estate website to get the word out that this bubble is going to pop so then they stop pumping up prices to ridiculous levels here in canada. Is there anybody out there that knows this stuff well enough to do it for us?

#67 Imstupid on 06.08.11 at 5:17 am

Words to live by… Believe half of the good news and double the bad news.
Went to the bank today and spoke with friend about how things are going. She said their predicting softening of housing so I asked a question, in your 20 plus years of experience have you ever encountered a situation when things were flat? The response no, so I asked why would it be any different now? The response it won’t. My friend says that 90% of business now are LOC applications and RFL but majority are under water. Very few clients are coming in for tfsa or rsps. New mortgages are almost non existing and that bank is trying to force people into fixed rate to bump profit to make up shortfall from lack of new mortgages. New product cibc has is a cash back mortgage that generates savings within mortgage payment. That is for fixed rate mortgages.

#68 Mr Buyer on 06.08.11 at 6:24 am

I have seen some posts from a few scientists, what do you think about forming a political party and seizing power so as to increase our chances of navigating through the crucial next few decades (or do you think it is already to late and we should be thinking about insulating ourselves from what is coming).

#69 BoomerBoy on 06.08.11 at 6:34 am

Kimberley,

It’s really quite simple. Move to a bigger home when you can afford to. Sounds like you can’t right now. Stay put.

#70 Pr on 06.08.11 at 6:47 am

Garth the word is getting out now and people finally start to realize what’s going on. Also thanks to you. Seems to me that good old Abe Lincoln was right and it is coming down to his known saying:

“It is true that you may fool all of the people some of the time; you can even fool some of the people all of the time; but you can’t fool all of the people all of the time.”
We’re almost there now. Keep it up.

#71 Mike Rotch on 06.08.11 at 6:53 am

Bill Gable sez:
“They have been loaning to anyone who could fog a mirror a few years ago – not anymore.”

They still are.

If you saw the size of the unsecured line of credit one of the big banks just allowed me to open……The first thought that went through my head is “These guys have to be morons!”

If I were to actually max this thing, there’s no way I’m staying solvent for long!

Thankfully, I am disciplined, and I’m doing OK. (As in didn’t overbuy house, savings invested in liquid assets that pay, contributing to investment accts with every pay, debts shrinking slowly).

Reading this blog and MSM, it seems to me that i am in the minority.

I think Garth and others might have a point that banks are taking more risk to try to hit some target profit margin with new mortgages slowing.

That said, if banks are giving this much unsecured credit to reckless spendthrifts, they might find themselves in trouble in a few years.

#72 bigrider on 06.08.11 at 6:54 am

Garth ,how about an update on your portfolio’s return this year.

Given where markets have fallen too it can’t be too good for your’s mine or anyone else’s especially the gold bugs.

#73 torontorocks on 06.08.11 at 7:18 am

I went for a drive in an area of south etobicoke in Toronto called Thorncrest Village I believe. beautiful area, old growth trees, almost secluded enclave. some old bungalows and two stories, mostly knocked down for the new style homes, large lots. anyways, $1.7MM for a house that was listed there (a rebuilt 2 years ago), on the market for a month.

even if prices fall by 25%, that’s still a hefty $1.3MM for an area that should never be worth $1.3MM.

so, in short, even with a 25% reduction, prices have hit a peak such that said reduction will mean to those that felt it was always a bubble we needed to avoid and therefore never bought. in other words, we’re fooked!

as I said earlier, the greater fools now appear to be us, those that didn’t do what others weren’t afraid to do, took a leap and said “eff it – its not like prices rose by 25% and now will fall by 25%. those houses are worth almost 200% more than what they were worth in 2002.

#74 Pr on 06.08.11 at 7:18 am

You are right about that one to: Second-Mortgage Misery
Nearly 40% Who Borrowed Against Homes Are Underwater.

http://online.wsj.com/article/SB10001424052702304906004576369844062260756.html?mod=rss_whats_news_us

#75 Ralph Cramdown on 06.08.11 at 7:20 am

Could this be the most fiscally retarded generation we have seen? Is it any wonder that they are rushing into ridiculously overpriced real estate with attitudes like this?

No, the demand for bad loans has always and everywhere been pretty much infinite. All regulation and control has to come on the supply side. When the “four Cs” of prudent lending are replaced by the automated underwriting systems, automated valuation systems and a CMHC guarantee, it’s predictable what happens.

#76 SMOKING MAN on 06.08.11 at 7:22 am

What If Greece Defaults and sends Huge Euro dollars to our Bond Market. Sending our fixed rate Mortgage Rates to The basement.

What If the US Dollar Tanks, Scaring the Chinese to unload US treasuries and buy up hard assets like CDN real estate and Bonds and commodity companies. At the same time Scaring Carney from ever contemplating a spike in the overnight rate in fact he may drop it, because of out soaring dollar.

What if their is no correction.

What no one cares about basement dwellers and bubble heads screaming from their rented balconies. FOWL. @#^&*((

It is a possibility. Pocket aces don’t always win kids.

#77 TurnerNation on 06.08.11 at 7:51 am

http://www.theglobeandmail.com/life/family-and-relationships/my-son-is-going-into-debt-for-his-girlfriend-what-do-i-do/article1669883/

“But lately some red flags have gone up. My son confided that he has accumulated a credit card debt of about $10,000, and that his girlfriend has nearly $30,000 in student loan debt. My son is working at a minimum-wage job and supporting her while she finishes her degree.

They live in a small apartment and in the last year they have acquired a dog and a cat – at her insistence. She is in major nesting mode: I know what’s next, and it wears diapers. During one recent visit they told me that they are looking at homes. It was all I could do not to throw a bucket of cold water at them”

#78 pessimist on 06.08.11 at 7:52 am

Kimberly,

I grew up as one of five active boys in a house that was 800 square feet in size. I say this not to invoke any pity toward me, but to emphasize my point.

The point is this – during my 18 years living in that house, not once in my life did I even think that the house was too small. While I know that it is dangerous to generalize upon one’s own experience, I am pretty sure that I was typical in this regard.

You and your husband want a bigger house. Your children could not possibly care less. At least be honest with yourself about it.

What they will care far more about is that if you are close to a playground or park where there will be plenty of room to run around. In that case, a small apartment is fine. An as Garth pointed out, there are plenty of large rentals around too.

Do whatever you think is best. But don’t blame it on the kids. I guarantee that they don’t care.

#79 TurnerNation on 06.08.11 at 7:55 am

Plenty of Van/GVA rentals found here:

http://vancouver.kijiji.ca/f-real-estate-house-rental-W0QQCatIdZ43

#80 TurnerNation on 06.08.11 at 8:00 am

I believe the smart money has fled from equities (volume has really dropped off in the past two years), leaving computers and retail schmoes to trade amongst themselves. Flash crash was a shot across the bow, a warning. Did you heed it? The markets are badly corrupted and broken, controlled by computers. Price discovery? What a quaint old idea, and about as relevent today as the Geneva Convention (destroyed by the West). The market takes no prisoners, either.

Flash Crash Revisited: NYSE Trading Volumes Plunge
By Tom Steinert-Threlkeld

Trading volumes in both derivative securities such as futures and options, as well as basic stocks, were more than 20 percent below year-ago levels in May for NYSE Euronext.

The biggest plunge: Trading in U.S. stocks, which dropped 45.5 percent from May 2010 levels, according to the operator of the New York Stock Exchange.

The culprit in all cases: Comparison to … May 2010, when volumes were inflated by the sudden drop and resurgence in trading across futures, equities and other markets by the Flash Crash of May 6.

Read more

#81 bigrider on 06.08.11 at 8:14 am

#73 Torontorocks.

I know that area. The prices are not up 200% from 2002, they are up approximately 100% or double for same comparable, never improved/renovated product .

Teardown and rebuilds are not the same for obvious reasons but you must factor in improvement costs.

Your argument for wishing to have taken the leap of faith is fine and warranted ,but the numbers you quote are exaggerrated

#82 Bottoms_Up on 06.08.11 at 8:17 am

#63 JCH on 06.08.11 at 1:57 am
————————————–
The CC company does not hate you. Every time you use their card, a portion of the sale goes directly to them. They are making money off you even if you pay your balance in full!

#83 Utopia on 06.08.11 at 8:21 am

So Kimberly wants advice.

She sees the warning signs. She has read the blog. She knows buying is suicidal and also that selling at the top is the smart thing to do.

But the poor thing is worried about moving twice or having to be crammed into a rental for a few months until the bubble bursts. A few months……Is she just kidding? Sweet, innocent and daft. But it is charming too.

Oh baby, if only all women were as dumb as you.

#84 GTA Girl on 06.08.11 at 8:31 am

I live in a affluent town north of Toronto. My subdivision is full of million dollar homes. Six are now on the market. All have the toys, granite/marble, steam showers, ensuites, finished basement bars, wine cellars, pools and cabanas a family of three could live in. All have languished on the market for over 6 weeks now. A year ago, any of them would have been sold in 2 days. Prices are starting to drop. A neighbor who bought 5 years ago for $1.2 is upset because one of the bigger homes for sale, on a court is now priced down to $1.3. The local real-estate diva who is known for a fast sale and shrewd pricing is pulling out all the stops to sell a house here. Many signs, champagne fueled open houses and balloons on road signs leading to the house. She’ll have to rent that elephant from the Bomanville zoo soon with a listing sign on it’s back……it’ll be the elephant in the room that no one wants to see. It’s happening.

#85 Daisy Mae on 06.08.11 at 8:32 am

Re Flaherty doesn’t see a double dip coming, A BLOGGER ON CBC:

“Just because he doesn’t see it, doesn’t mean it’s not coming. He and Harper didn’t see the last one coming either.

This time Jim should try using a stool.”

Rating 192
Agree 203
Disagree 11

#86 Utopia on 06.08.11 at 8:40 am

About my previous post:

I think what is bothering me about Kimberly is that she seems to think that buying a larger home in Vancouver at a time when it is (pound for pound) amongst the most expensive real estate in the world and certainly in a bubble, only requires that she sacrifice some holiday time.

Holidays for cripe’s sake. That is all she needs give up.

All this time I have just assumed that greed was behind the purchases that have driven prices parabolic. Now I know better.

Vancouverites have absolutely no perspective anymore. They can’t see the forest from the trees. Nor can they cannot see the danger lurking in the woods ahead. They really don’t have a sense that their financial life is under serious threat when this little party comes to an end. Maybe the outcome really will be biblical but even that won’t deter some greater fools.

Suddenly, Vancouverites strike me as stupid, grain-fed cattle, worried more about their next tasty meal than the certainty of ending up as a meal on someone else’s plate.

Rich in housing, impoverished in thinking. She will learn.

#87 First on 06.08.11 at 8:44 am

#76 SMOKING MAN

What if…..and that’s a big What if…
you got lost and trolled another blog and then everyone would not have to waste there finger muscle to scroll by your dumbass posts.
just what if.

#88 panopticon singularity on 06.08.11 at 8:45 am

1985 + strange advance = best. hyperlink. ever.

#89 This is wonderland on 06.08.11 at 8:47 am

#63 JCH

I do the exact same thing only with my Canadian Tire Master Card. Pay it off at the end of the month and the points really start adding up.

#90 This is wonderland on 06.08.11 at 9:04 am

#73 torontorocks

OK, but how much was the tear down purchased for and how much did it cost to build the new home…..or did they twitch their noise and it just appeared.

Don’t get me wrong I’m no real-estate genius…..LOL, I’m no Garth Turner. However your point seems mute.

#91 BPOE on 06.08.11 at 9:20 am

All of you doubters in the power and glory be aware. You are missing the boat to the promised land. If you would have bought three years ago, you would be basking in the sweet after glow and retiring on your unearned fortune. Speculate, everyone here is doing it.

If bought two years ago you would be well on your way to pina coladas at Trader Vic’s. Don’t think, just drink! You’ve got it made!

Bought a year ago no problem, you’re still a dyed -in-the-wool real estate tycoon. A day job? who needs a day job; we own real estate in VANCOUVER!

And if you have the sharps to BUY NOW in VAN you certainly have the gift of SIGHT to have obviously picked the last TWELVE 6-49 and LOTTO-MAX winning tickets. This is VANCOUVER. EVERYONE WINS HERE. Except those nasty Canucks. But let’s not go there.

#92 Pr on 06.08.11 at 9:31 am

#76 SMOKING MAN
…What if their is no correction. From the point of view of Realtors they feel one. Since 01 january this year to yesterday 07 juin their is 7% less Realtor in the province of Quebec! Yeah thats right 17 700 to 16 635 in 5 months!!!
http://lapresseaffaires.cyberpresse.ca/economie/immobilier/201106/08/01-4407047-courtage-immobilier-dur-dur-de-perdre-sa-licence.php?utm_categorieinterne=trafficdrivers&utm_contenuinterne=lapresseaffaires_LA5_nouvelles_98718_accueil_POS3

#93 Utopia on 06.08.11 at 9:33 am

#203 disciple on 06.07.11 at 10:34 pm

“And speaking of Germany, you would have to be a common fool to not realize that the E.coli tragedy was not a bio-terror operation. Probably some kind of test…”
================

A trial balloon perhaps? The notion that a brand new and previously unknown strain of E-Coli suddenly appearing out of the blue with killer efficiency is an accident is just naive. This was only to be expected.

Speaking of grain-fed cattle again, there is a cull coming for the human race. It won’t be personal. It will not respect borders or favour specific races. It will be broad-based and global. It will be designed to purge the weak, the sick, the elderly and those in the prime of their life who are most apt to rebuild the population following losses.

Nobody knows when it is coming or where it will strike first. It will almost certainly be deliberate though and nobody will be completely immune.

Just crazy talk perhaps? Think again.

Be sure to get your flu-shots.

#94 disciple on 06.08.11 at 9:34 am

#40 – Cato…

Awesome post! I soooo want to watch a human worm banker squirm…I want to live! I want to live!

#95 BrianT on 06.08.11 at 9:34 am

#83Utopia-To be fair to Kimberley a lot of very intelligent women get very stupid when it comes to houses. The higher areas of the brain get short circuited-for many men sex works the same way-Weiner, Schwarzenegger,Strauss-Kahn-these guys don’t seem brain damaged but they behave that way. Look-this huge house porn industry isn’t targeting men.

#96 disciple on 06.08.11 at 10:00 am

#82 Bottoms_Up…

I agree with you. CC companies and the concept of “credit” itself raises the price of everything. Most people are enticed by the “rewards” and don’t realize that they are shooting themselves in the foot at the very least.

But in reality, cash is no different than credit, they are essentially the same thing because banks create cash out of thin air just as they do with credit. The whole system is rigged and doomed to fail…

#97 kilby on 06.08.11 at 10:06 am

Interesting watching Cam Good on Global video. If you can’t afford to live in Vancouver maybe you should live somewhere else….What arrogance……

#98 Steven Rowlandson on 06.08.11 at 10:19 am

Garth given the magnitude of the multigenerational orgy of greed and speculative excess a 90% haircut is long overdue and might even be modest. The whole problem is a result of greed egged on by a program of economic and social experimentation that bent and busted all the rules and conventions to make extreme real estate prices possible but not sustainable.
Now the lions share of qualified buyers are in or if you like trapped and enslaved and all thats left are workers, youngsters and tradesmen who thanks to market forces don’t get paid jack sh.t and are quite incapable of buying a garden shed and the land to put it on let alone a proper house. This is why the world as real estate fanatics know it is going to come crashing down in flames. But then again people have to find out the hard way.

#99 Edmonton D.I.N.K. on 06.08.11 at 10:22 am

Garth, Love the Blog!

Had to share this link with you all….apparently realtors don’t know it all. (duh)
http://albertabubbleblog.blogspot.com/2011/06/you-cant-make-this-stuff-up.html

#100 Daisy Mae on 06.08.11 at 10:37 am

“How can rational people believe in virgin birth, the House of Commons or endless price hikes?”

Well, I don’t…believe in virgin birth or the House of Commons.

But what confuses me is WHY are we experiencing price hikes for consumer goods, other than real estate? We know consumer spending is slowing because of these price hikes.

Isn’t it supposed to be based on what the market will bear?

#101 disciple on 06.08.11 at 10:50 am

#100 Daisy Mae…

You raise a very important question. I don’t pretend to have all the answers but one thing is for certain IMHO. Those with the economic power in our society want the rest of us to do with less, so that they can have more. What this means is that inflation will occur in consumer goods and deflation in asset values. It is the perfect storm. At all levels of government, the impetus moving forward will be to take as much from you as possible in the form of:

Fees, Interest, Taxes, Insurance, and Fines (FITIF)

so that eventually they can swoop in and take it for cheap. Of course, there are numerous other parallel nefarious plans, but let’s chew our food before swallowing, so to speak…

#102 Trailer Park Boys on 06.08.11 at 10:57 am

You people weren’t stupid enough to register your guns and pay HST on the ammo were you ?

#103 Bruce on 06.08.11 at 10:59 am

From yesterday #194 Bottoms_Up

Your argument holds no weight. Why? Because virtually anyone, rich or poor can get a cashback credit card. I had one as an unemployed student with loans. That’s actually a big part of the problem – people who can’t pay their bills get card after card and keep maxing them out. It is ridiculously easy to get a credit card no matter how much you make.

The only people being taken advantage of are idiots who can’t manage their finaces. I’m ok with that because a fool and his money are soon parted – if that money goes to me then I won’t say no.

#104 reality guy on 06.08.11 at 10:59 am

Sol: Garth what happens to the Canadian economy when the correction actually happens.

=============================
Look around the world.

1. Greece broke as hell, high unemployment. Devalued currency, high inflation, interest rates at 16% and higher

2. Japan, several generations of nothingness, caused by the Asian Contagent, which was also cause by real estate collapse

3. US, Just starting, broke as hell, just pinked slipped 110,000 government jobs. No longer being bailed out by Asia

4. Spain, Italy etc and in deep doo doo and the beauty is they are getting bailed out by Germany

I feel when Canada goes, (like most bubble),

1. first it will start with several chink in it’s armour. Nibble in the out skirts

2. Then it will start to spread. (mainstream media will be able to contain and hide the facts). You think Global is bad, you should watch the Chinese news station. I think their on Viagra.

3. Eventually the train will slow and the weak will get weeded out. They will be broke and have to foreclose.

4. Confindance will be question and building will slow. Resulting in unemployment

5. China engines will grind to a halt, as the other countries devalue and deflate and no long wants china’s crap. Because the realize the difference between needs and wants

6. As real estate starts to devalue, so do their credit limits and lines of credit. (Now the banks will have to call the loans). Fear of deflations

7. Credit starts to freeze up. Less money can be lent, Houses starts its spiral.

It goes from Agile, to waterfall, to iterative to spin.
With each iteration spin at a faster and faster rate.

Eventually we will see huge unemployment (12 to 20%)
Broke government as CMHC debt becomes Government Debt, becomes tax payers problem.

Canadian Currency will become weak against the USA which will start its weak and long recovery.

Interest rates heading towards 10 to 20 percent as credit freezes and becomes hard to obtain.

#105 Devore on 06.08.11 at 11:33 am

#100 Daisy Mae

Isn’t it supposed to be based on what the market will bear?

Do you enjoy answering your own questions? ;)

#106 An Cat Dubh on 06.08.11 at 11:34 am

Here is Nicole Foss being interviewed by economist Max Keiser. Nicole says home prices in Canada will drop 90%. While I do not agree with that (The drop will happen but not so extreme in large cities, maybe small retirement communities), she does bring up some good points about how strong the Canadian banks really are.
http://www.youtube.com/watch?v=_acwahNKjNU

#107 bill on 06.08.11 at 11:49 am

that ‘strange advance’ was a bit of a jolt.
a mate of mine ,under the lash of hunger, was briefly employed to play bass for these guys.
we ragged him unmercifully… we thought we were way cooler.
even in our golden years we could still crush these guys with a wall of sound.

#108 vyw on 06.08.11 at 12:03 pm

There are a number of places for rent in Vancouver these days ie 2Bdroom condo for $1200 – $1500 a month.

But there’s one issue that housing pundits may wish to consider and that is the the intergenerational shift in assets to the Boomer generation from their parents. Check out the demographic pyramids on David Foot’s website: http://www.footwork.com/pyramids.asp. The big chunk of people between the ages of 45-65 in 2011 are the boomers. They stand to inherit the assets (homes) of their parents. Some of these properties go on the market but some will be retained.

Check out this CMHC report http://www.cmhc-schl.gc.ca/odpub/pdf/62761.pdf?fr=1307547192578
on housing affordability – it’s dated but Figure #3 is instructive. Older Canadians every census have higher proportional rates of home ownership; the younger generation has lower rates of home ownership.

Maybe the boomers will just stay put like their parents – these seniors are living in their $900K homes (bought for $25K in the 1960’s) instead of cashing out, but so many do just that. Maybe more Boomers will live in their homes rent-free/mortgage-free in their senior years.

The impact on the housing market? Less supply (at least of quality SFH), and possibly higher prices.

#109 Cookie Monster on 06.08.11 at 12:09 pm

#68 Mr Buyer on 06.08.11 at 6:24 am

Great idea, but since most engineers and scientists are honest intelligent people, it’ll never work!

Honest people have no interest in performing for the media and lying for a living. It just does not jive with their character, hence rarely will one ever pursue politics at any time.

This is why the key to good government is small government. A small tumor is better than a large one.

#110 robert james on 06.08.11 at 12:14 pm

#100 Daisy Mae Yeah,,Virgin birth is sort of a tough one,,kind of like walking on water.. #97 Kilby Regarding Cam Good… I don`t think that is arrogance,,I think it is border line inciting hatred… I think it might be an idea for the VREB to slap this azz clown as he is getting downright embarrassing for Vancouver

#111 daystar on 06.08.11 at 12:21 pm

#40 Cato on 06.07.11 at 11:01 pm

Most definitely, as you say, there will be a tightening of credit. In reality, with tighter CMHC regs, its already happened. What also follows if housing doesn’t drop fast enough and as the loonie allows, is a hike in rates. Rate hikes will surely deflate the housing market on their own, but can’t come until the loonie drops so tighter credit and lower energy prices have to come first (how I see it anyway).

http://www.cbc.ca/news/business/story/2011/05/30/f-carney-interest-rates.html

For me, its a currency issue as to why rates can’t rise just yet. Correct the currency issue meaning:

1) U.S. dollar gains strength, won’t happen until their housing market finds a bottom and financial institutions can handle higher rates.

2) Energy prices fall (and one could include metals into this equation) and I think they will, giving Carney some currency wriggle room for a rate hike but only at the expense of a world wide slowdown.

Energy prices have to come down and when they do, the Canadian dollar will come down. As the Canadian dollar comes down, inflation will rise and inflation will have to be deflated somewhere beyond the deflationary effect of lower energy prices…. and that somewhere will be housing.

#112 RoninBC on 06.08.11 at 12:23 pm

BPOE is right. If any of you think Vancouver will be truly affordable you’ve got your heads in the sand. The average Vancouver home would have to drop at least 50% to even approach affordability. A 20- 30 % drop, big friggin deal!

Vancouver will always be different. Consistently voted amongst the most liveable city on the planet.

Keep on dreaming ancouver renters. You waited too long!

#113 Jim on 06.08.11 at 12:25 pm

63 JCH
Re yesterday #9 Bill Gable, using credit cards to buy food, I do this all the time. I carry maybe $100 in cash, but anything over about $20 I charge. I pay the balance in full each month, am debt-free, exercise my credit score, and get Aeroplan miles for it. CC company hates me, I think.:) I hope that at least some of the people in your example do the same.

**************************************

Are you kidding? If you are using an Aeroplan Infinite Visa but don’t pay interest your cc company still loves you! They collect almost 3% on every purchase you make.

#114 Jim on 06.08.11 at 12:45 pm

Gotta love the home owners whose principle residence is 100% of their net worth, that come here to taunt those of us (also home owners) that are convinced real estate will fall.
Fear is palpable in their comments.

#115 Bolo on 06.08.11 at 12:48 pm

# 90 This is Wonderland.

Mute. LOL
You surely mean moot…. I hope.

#116 Mr Buyer on 06.08.11 at 12:50 pm

I think a few well placed laws will allow the retention of much of what is good and useful about money while protecting our communities and countries from the narcotic like potential money has. We used to sell bottles of cocaine in drug stores (mostly in the US a long time ago. I think in Canada as well) literally over the counter. We forced the drug store owners (in the US but I am guessing Canada as well) to stop selling it due to the nation wide negative impact it was having upon our country. This is the first time in this generation that the banks have brought us to the edge of night but it is the second time (in my limited awareness. I must admit I have always thought of economics and finances as being a confidence trick that had at the very least margins much too large on many graphs when speaking of correlations) that the same modus operandi was employed (5% gets you in) with the result being the great depression. I will get a home at an appropriate price only to find myself living in a wasteland with little or no opportunities for our children. We are the second largest country in the world with a tiny population and we can not have reasonable prices. Even with 3% arable land we are set (it can be much more than that if that is an accurate figure, I have seen high intensity land use in other countries). If Canada can not live well independently than no one can. The last time I could find solid stats on electrical production in Ontario (the early days of the net) the province was producing much more than it was consuming. We can choose another path. Is this productive and good for the future of our country and its people. This massive shake up coming in the form of the deflation of this bubble could be a golden opportunity to take it apart so it can not be rolled out again 50 years from now and dropped in the laps of our grandchildren. What is the vision for our future, as well as the way forward through the bottle neck we are approaching. What are our priorities in the face of coming challenges.

#117 BrianT on 06.08.11 at 12:51 pm

Anyone that has a wife eager to get you into debt should read this one-the SWAT team was called in to kick ass because this woman didn’t pay her student loan on time. Canada isn’t at the US level in this regard, but things are changing here also-eventually we could see the outright criminalization of small time debt default http://www.dailymail.co.uk/news/article-2001010/SWAT-team-launch-dawn-raid-family-home-collect-womans-unpaid-student-loans.html?ito=feeds-newsxml

#118 BPOE on 06.08.11 at 12:51 pm

You got it right. Take a scenario where 5 year mortgage is 9% and housing drops (renters dream) 50%. So now that west side bungalow costs $750k. Is the Canadian renter going to qualify for a big loan at 9%? Of course not. But the international investor will pick this house up with cash long before the above scenario ever takes hold. junius, the american, vancouver bear are all clueless in seattle when it comes to vancouver. They don’t get it. Never have never will and that’s why they rent and moan about unaffordable prices. These posters are all bitter renters who wish they bought and dream of higher interest rates and houses dropping in price for a loan they STILL won’t qualify for. I don’t trust any of the american banker criminal friends insights. They are criminals and part of the whole problem in the US
*******************************************
RoninBC on 06.08.11 at 12:23 pm
BPOE is right. If any of you think Vancouver will be truly affordable you’ve got your heads in the sand. The average Vancouver home would have to drop at least 50% to even approach affordability. A 20- 30 % drop, big friggin deal!

Vancouver will always be different. Consistently voted amongst the most liveable city on the planet.

Keep on dreaming ancouver renters. You waited too long!
.

#119 bob on 06.08.11 at 1:00 pm

Kimberly, if you need to work more to afford a bigger house, then you are sacrificing the time you would spend with your kids to get more space. Like what #78 pessimist said, the kids won’t even care about the space. I grew up in a 1000 sf bungalow with three siblings and 2 parents and there were plenty of space. I think your kids will rather you spend more time with them.

#120 BigAl (Original) on 06.08.11 at 1:09 pm

The single city where prices are out of whack severely, after Vancouver, is Ottawa.

If a nation-wide across the board correction is coming, Ottawa would get hit worst than Toronto. There is no way the houses in Kanata, Stittsville, Orleans, Bells Corners, etc are worth what they’re going for – Toronto prices in Ottawa.

#121 Aussie Roy on 06.08.11 at 1:12 pm

Aussie Update

Bank Boss Questions negative gearing for housing.

http://www.theage.com.au/business/bank-boss-questions-gearing-20110602-1fit2.html#poll

As we have one last search for greater fools.

Banks offer larger mortgages.
http://www.smh.com.au/business/banks-offer-bigger-loans-to-homebuyers-20110603-1fjvn.html

It works, a tempid increase in mortgage demand off a 20 year low.

http://www.smh.com.au/business/home-loans-rise-most-in-25-months-20110608-1frxj.html

The house that no one will buy.

“This is Australia’s most heavily discounted property: 1350 Wynnum Road, Tingalpa.

This modest post-war home in Brisbane’s eastern suburbs has been on the market for 200 days, having dropped its asking price by 43 per cent.

When it was first listed in November 2010, the deceased estate was advertised at $700,000. That has been steadily reduced to $400,000.”

http://smh.domain.com.au/real-estate-news/the-home-that-no-one-will-buy-20110604-1fmid.html

Its a buyers market.

http://au.pfinance.yahoo.com/b/peter-boehm/1864/how-to-buy-property-in-a-falling-market

#122 Devore on 06.08.11 at 1:23 pm

I’m also with everyone who thinks getting more space “for the children” makes a poor excuse to buy a bigger house. A bigger house is not only more expensive to buy (duh) but also to maintain and live in. Heating, lighting, landscaping, repairs, renovations, all cost more as well. A bigger house is more likely to have expensive amenities and fancier gadgets that break down.

Your kids certainly won’t mind or care. Whatever they grow up with is normal for them. But they will remember the times you spent (or did not spend) with them, and the things you did together. This is something you should pay attention to, because when you are old, your overpriced, overleveraged, oversized money-sucking house is the only asset you have, and CPP/OAS doesn’t even cover your food bill, you will find out whether you made the right choices.

#123 torontorocks on 06.08.11 at 1:39 pm

#73 and #81, obviously the Gods of Real Estate didn’t come down and magically make a $1.7MM house appear where there was none before. there was a house there, great land, locale, that was torn down and built up.

I’ve asked my real estate agent to find out the price history of that listing. Either way, $1.7MM seems rather high to me. Not a moot point.

#124 Bottoms_Up on 06.08.11 at 1:45 pm

#103 Bruce on 06.08.11 at 10:59 am
—————————————
Ok if it’s true that people with horrible credit scores existing on welfare can still get a credit card, then by using your credit card you are still in effect ‘stealing’ money from those that pay with cash. I like to pay with cash because I know I can afford to buy. However, I use credit for a lot of purchases now because I don’t like missing out on the 3% cash back. Why should I be punished by paying with cash? Cash purchases should be given a 3% discount at the till. It’s a crazy world we live in.

#125 bigrider on 06.08.11 at 1:59 pm

I want RE to decline so bad I can taste it.

I don’t care what happens to the broader economy.

I hope that my fully paid for house one day is worth a dollar, this way I can live on the bridle path for 40 dollars. Much in the same way I hope for declining prices for other necessities I need like gas, food and clothing, I hope for declining prices in shelter.

So sick of people who completely mis calculate the investment value of their principle residence and the rose coloured glasses they tend to view through.

#126 bigrider on 06.08.11 at 2:03 pm

I got a friend who wants to sell his home in the burbs to take his “150k profit’ and buy a home thats bigger with a swimming pool and bigger yard.

I told him that he would be about 100k behind because that other home has experienced a 250k increase during same period of time as his.

Of course, dumb look on his face, could not see the stupidity in his thinking.

#127 Jason Baxevanidis on 06.08.11 at 2:38 pm

UPDATE from Vancouver, Lower Mainland aka the land of Unicorns.

FORECLOSURE : In pockets of lower mainland where the prices didn’t go up as much as expected, investors are walking away from properties. (Coquitlam & Fraser Valley)

PRICE DROPS: Outside of the uber hot locations prices are ‘unchanged’ or dropping. EG. Prices in Cloverdale subdivisions are down 25% from 2-years ago.

#128 bigrider on 06.08.11 at 2:38 pm

Rona, Lowes and home depot.

The official Red Light districts of T.O

#129 bigrider on 06.08.11 at 2:41 pm

Somebody help me out.

Why do women insist on Wolfe and Viking stoves and refrigerators in their kitchens.

They do not cook or cool any better then other models costing 15 times less.

For heaven sake, these women don’t even cook !!

#130 g2thaBLA on 06.08.11 at 2:47 pm

Garth, where did the photo go with the burger? and why didn’t you use a double-down?

#131 disciple on 06.08.11 at 2:49 pm

Ben Rabidoux of the Economic Analyst website today quoted Shawn Allen’s (The Investor’s Friend) comments on this blog with regard to using Lines of Credit to pay for monthly biggies like mortgage, car loan, credit card bills, etc…

I am surprised that Ben Rabidoux was not more aware of this…I guess he has never had to do such a ghastly thing…

I suspect this happens more often than people realize. My bank online allows me to pay for anything directly from my line of credit, just with a few simple clicks of a mouse. I can transfer funds from my line of credit to my chequing account. It is not a HELOC, it is an unsecured line of credit running to 20,000 buckaroos if I wanted to.

It is easy to see how this can get any homeowner in a heap of trouble very quickly…one bank in particular last year threatened to charge any client a fee if they DID NOT use the LOC for any 30 day time period…

#132 Harry Cho on 06.08.11 at 3:04 pm

SMOKING MAN now I no u are an idiot.

“Scaring the Chinese to unload US treasuries and buy up hard assets like CDN real estate”. LMFAO

We the dumb a** Canadian people are being manipulated to believe by our TAX farm slave masters that we have land scarcity problem in Canada. LOL

They are selling us 40X80 foot shoe box houses in T.O. for 600K +.

The truth is that Canada has virtually unlimited and untapped land resources.

I can buy as many acres of land as I want 10 miles outside the hell hole of T.O. suburbia for $5-10K an acre.

But this deal of lifetime won’t last long if the Chinese are as stupid as Canadians. LMAO

#133 torontorocks on 06.08.11 at 3:19 pm

ok so I confirmed that in 2007, the house was sold for $800,000, so #73, I stand corrected that between 2007 and today, including knockdown and rebuild, the house has doubled.

so is the new reality for that area, sans a price decrease, $1MM or so? or are we talking pre-2007 prices? I mean, the house has already been reduced once to $1.5MM, now back up to $1.7MM and originally listed at $1.9MM.

#134 Nostradamus Le Mad Vlad on 06.08.11 at 3:42 pm


#100 Daisy Mae — “Isn’t it supposed to be based on what the market will bear?”

Currently, the market is in the House of Commons, walking on water while experiencing multiple virgin births — check back in three or four decades’ time, to see how all this played out!

#101 disciple — “Those with the economic power in our society want the rest of us to do with less, so that they can have more.” — Hence the worldwide economic takedown, and this dances nicely with #104 reality guy — “With each iteration spin at a faster and faster rate.” Time is racing on, we’re all getting older and, sooner or later, we’ll hear sheeples say thing like, “Why didn’t anyone tell us this was going to happen? Why weren’t we warned? Who is responsible for this?” See #101 disciple’s post.

At some point, inflation rears its ugly head (just as bad as stag- and deflation), which is now riding tandem with all the wars. This brings #111 daystar — “. . . inflation will rise and inflation will have to be deflated . . .” — Inflation. We are becoming lost in a maze of finances! Keep in mind that hyperinflation is a political act, not a financial one.

#109 Cookie Monster — “Honest people have no interest in performing for the media and lying for a living.” — Which explains why none of us would ever be an honest-to-goodness clean politico — we would never get elected!

#135 Live Under Your Means on 06.08.11 at 3:42 pm

How low can a PM pander – asking people to vote on Facebook/Twitter for the name of his latest kitten. And, I just heard that he’ll go to Boston for the Canucks/Bruins game – no doubt at great Cdn taxpayer’s expense considering his entourage all all the security, etc. I wonder how much his PR machine is actually costing Canadians. We’ll probably never know, because the docs will be blacked out, due to ‘national security’!!!!

#136 Hooh - Hearted on 06.08.11 at 3:47 pm

This is really disgusting ..seriously

http://www.globaltvbc.com/Vancouver+city+councillor+tweets+about+lavish+lobster+dinner+swag+raises/4907558/story.html

Vision Vancouver city councillor Heather Deal is raising eyebrows and taking heat from anti-poverty groups after posting a series of photo tweets from a taxpayer-funded dinner in Halifax.

Deal is on the east coast for the Federation of Canadian Municipalities meeting with over 2,000 Canadian politicians. On Monday, she attended a homelessness conference, but before the conference began, she shared several photos of a lavish Sunday night dinner and bragged about the “great swag” on twitter.

Registration for the event is $829, plus the cost of flights, meals and accommodations.

========

What time was the revolution ?

#137 BPOE on 06.08.11 at 3:48 pm

Australia is overpriced and has been for many a year. Doesn’t have the World Class appeal of Vancouver
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Aussie Roy on 06.08.11 at 1:12 pm
Aussie Update

Bank Boss Questions negative gearing for housing.

http://www.theage.com.au/business/bank-boss-questions-gearing-20110602-1fit2.html#poll

As we have one last search for greater fools.

Banks offer larger mortgages.
http://www.smh.com.au/business/banks-offer-bigger-loans-to-homebuyers-20110603-1fjvn.html

It works, a tempid increase in mortgage demand off a 20 year low.

http://www.smh.com.au/business/home-loans-rise-most-in-25-months-20110608-1frxj.html

The house that no one will buy.

“This is Australia’s most heavily discounted property: 1350 Wynnum Road, Tingalpa.

This modest post-war home in Brisbane’s eastern suburbs has been on the market for 200 days, having dropped its asking price by 43 per cent.

When it was first listed in November 2010, the deceased estate was advertised at $700,000. That has been steadily reduced to $400,000.”

http://smh.domain.com.au/real-estate-news/the-home-that-no-one-will-buy-20110604-1fmid.html

Its a buyers market.

http://au.pfinance.yahoo.com/b/peter-boehm/1864/how-to-buy-property-in-a-falling-market
.

#138 Soper Eats Babies on 06.08.11 at 3:50 pm

Finance Minister F a key leading indicator:

August 15, 2008
Canada’s Flaherty sees no recession this year
http://uk.reuters.com/article/2008/08/15/canada-economy-flaherty-idUKN1548920620080815
In an interview with Business News Network television in Toronto, Flaherty was asked if he expected the economy to slip into an official recession as of the second quarter. “I don’t anticipate that over the course of the year that that will be the situation,” he answered.

June 7, 2011
Canada sees little chance of N. America recession
http://www.reuters.com/article/2011/06/07/canada-economy-flaherty-idUSN0718843520110607
There is little chance that the current North American economic slowdown will turn into another recession, Canadian Finance Minister Jim Flaherty said on Tuesday.
“I do not think the risk is great,” Flaherty told reporters at an economic conference in Montreal.

#139 The Original Dave on 06.08.11 at 4:12 pm

Hey G, I feel like I want you to watch this as I always respect Bob Hoye’s opinion. To me, he’s one of the best.

http://talkdigitalnetwork.com/2011/06/time-careful-markets/?utm_source=weeklyrecap&utm_medium=email&utm_campaign=Weekly%2BRecap

#140 From Mississauga with Love on 06.08.11 at 4:20 pm

Just to confirm to you more observations from the GTA, this time in Mississauga. What I am seeing is that places that are priced below $500K are seeing multiple offers. Between $500-$650K, it waits depending on the house.
One thing is for sure, Anything $700K and above is simply not moving (at least for 2 months now). There was a house in the Heartland area that was priced very stupidly by the real estate agent at $780K over 6 months ago. Right now it’s $699K (and i believe it will still drop). It has started here in Mississauga, but not everyone’s admitting it. The higher-priced house owners still cannot see it. But it’s here for sure.
On that note, I am getting more flyers on my door advertising financing with 0% down, no income, no credit etc… Who said we don’t have poor lending standards here?
Garth says it will be a relatively small flash correction followed by a melt. I agree about the melt, but every chart of every bubble shows the same characteristic:
1. It falls down in much shorter time than it went up
2. It falls down below what it should settle to before it settles to the mean.

THe latest US crash shows that.
It’s no different here for sure. In fact, I am now convinced Canadians are dumber than Americans by a far shot: we had not only the whole world as an example, but our direct neighbors to the south and we still did it. We are stupid, that’s for sure (or most of us at least)!

#141 this is wonderland on 06.08.11 at 4:27 pm

#115 Bolo

Or is it “Mooo Point”

http://www.youtube.com/watch?v=4ifdqEmlx-I

#142 Devore on 06.08.11 at 4:35 pm

#127 Jason Baxevanidis

FORECLOSURE : In pockets of lower mainland where the prices didn’t go up as much as expected, investors are walking away from properties. (Coquitlam & Fraser Valley)

PRICE DROPS: Outside of the uber hot locations prices are ‘unchanged’ or dropping. EG. Prices in Cloverdale subdivisions are down 25% from 2-years ago.

As Poco, myself and others have been reporting for months, once you look past the Greater Vancouver average, things are much less rosy. Even in hot areas, if you do not have the right address, or the right kind of lot, or the right kind of house, your property has not appreciated nearly as much as you might be lead to believe. In fact, undesirable SFH, townhouses and condos, are not exactly flying off the shelf anywhere in lower mainland.

#143 VICTORIA TEA PARTY on 06.08.11 at 4:42 pm

HIGHER OIL PRICES HERE TO STAY

The signal out of OPEC’s big meeting in Austria, this date, indicates that consumers are going to get taken to the cleaners forever, throughout the industrial world.

The inability of members to agree to new higher production quotas, and thus future lower oil prices, sets the high oil price “scenario” in stone.

It won’t matter if Mr. and Mrs. America have to push their Pintos down their nearest freeways to Disney Florida or wherever, in order to save a buck or two. The bottom line is that oil prices are now officially dictated by the emerging world, and not the US.

Blogger, and energy industry expert Jeff Rubin says Middle Eastern countries, including so-called swing producer Saudia Arabia, are sequestering supplies for their own people. He also reports that Russia is the producer of last resort but there is no indication that it will spring more supply soon.

And the Daily Reckoning’s Addison Wiggin says additional “spare capacity” is close to extinct ANYWHERE.

Right now, the US oil price is about $15.00 a barrel cheaper than the true world oil price of more than $120.00. That comes about because of full storage tanks in the US brought about by Canadian oil exports and a lack-lustre gasoline and oil market in the states. It could be only a matter of time that China finds that oil and buys it.

The cost of moving about in this country will get more expensive and that will only speed-up our declining real estate market.

What’ll happen to all of those monster and leased pickup trucks purchased by recently-former property virgins?

We’ll find out shortly.

#144 Scalgary on 06.08.11 at 4:50 pm

Wow,

Scary article about US defaulting…

http://business.financialpost.com/2011/06/08/republican-mainstream-flirts-with-brief-u-s-default/

Political gamesmanship. There will be no default. — Garth

#145 this is wonderland on 06.08.11 at 4:55 pm

93 Utopia

Nobody knows when it is coming or where it will strike first. It will almost certainly be deliberate though and nobody will be completely immune.
Just crazy talk perhaps? Think again.
Be sure to get your flu-shots.
—————————————————————
Yes but what if this killer, is being delivered through the Flue Shot… Wow, mind blowing!

#146 bigrider on 06.08.11 at 5:07 pm

Garth, you censored two of my comments and removed a sentence in another, what gives?

Some subtle sexual inuendo is all it was…in keeping with the spirit of some of your commentary I believe.

No?

No. There was nothing subtle about your remarks. — Garth

#147 poco on 06.08.11 at 5:08 pm

#127Jasen Baxevanidis
UPDATE from Vancouver, Lower Mainland aka the land of Unicorns.
FORECLOSURE : In pockets of lower mainland where the prices didn’t go up as much as expected, investors are walking away from properties. (Coquitlam & Fraser Valley)
PRICE DROPS: Outside of the uber hot locations prices are ‘unchanged’ or dropping. EG. Prices in Cloverdale subdivisions are down 25% from 2-years ago.
______________________________________________
yup–you’re so right –lots of foreclosures now and many more to come in the near future–here’s a few that may be on someones vulture list
v880478–102-2334 Marpole-Pt coq–condo
bought apr07–207k–now lised at 134.9k
—————————————————————
v886442–1202-555 Delestre- Coq–condo
bought june08-374.4k–now listed at 308.9k
—————————————————————
v883258–42-2495 Davies-Pt Coq–townhouse
bought aug08–379.9–listed apr11 at 368k -now 349.9k
————————————————————–
v888432–1149 Bennet–Pt Coq.–townhouse
bought jan08–394k– listed jun10 at429.9k now 375k
—————————————————————
with so many owners in the tri cities that jumped into the market in the last 2 to 3 years, who now find themselves at or near negative equity levels, i think the foreclosure rate may just skyrocket from current levels
as i’ve said in the past condos are pretty much toast–
townhouse prices are dropping as summer approaches–don’t follow the sfh much anymore so no comment

a couple of TH complexes i have been following have had several price drops recently–it seems it’s becoming neighbour against neighbour again like 2008
one drops their price, the others follow–this appears to be especially true after an open house (which are far and few between) no interest– price comes down–the others usually follow —more and more realizing that “what goes up must come down”

#148 maxx on 06.08.11 at 5:12 pm

#31-JohnnyBGood

“But the fact that banks continue to reduce mortgage rates indicates that, even in Canada, the growth in demand for mortgage debt is declining faster than the growth in “supply”, despite what is happening with house prices, which keep going up because supply is falling faster than demand. (I put the word “supply” in quotes because when it comes to debt, the demand IS the supply.)”

Yes indeed! We were in to see our bank today and a mortgage advisor we know confirmed that the recent teaser reductions in mortgage interest were designed precisely to try to gain market share as there are now fewer sales. The advisor also confirmed substantial refinancing activity due to people having taken on too much mortgage! The palaces are turning into prisons…..

#149 bigrider on 06.08.11 at 5:13 pm

With all due respect Garth.

Again on the censorship of two of my comments and the removal of a key word referring to a particular group of women..why? I have seen much worse posted and far more vulgarity for sure than my comments.

I think most would have found it humourous.

I didn’t. You have more to add than that. — Garth

#150 TS on 06.08.11 at 5:29 pm

To :#120 BigAl (Original) on 06.08.11 at 1:09 pm

H and F want to reduce the Federal workforce. The “wealth affect” will become the “keep my job affect”.

#151 Bruce on 06.08.11 at 5:36 pm

#46 BPOE

According to you, about 1/6 of people on this earth are millionaires, and 100% of those millionaires want to buy property in Vancouver.

Good to know …

#152 Live Under Your Means on 06.08.11 at 5:37 pm

#138 Soper Eats Babies on 06.08.11 at 3:50 pm
Finance Minister F a key leading indicator:

August 15, 2008
Canada’s Flaherty sees no recession this year
http://uk.reuters.com/article/2008/08/15/canada-economy-flaherty-idUKN1548920620080815
In an interview with Business News Network television in Toronto, Flaherty was asked if he expected the economy to slip into an official recession as of the second quarter. “I don’t anticipate that over the course of the year that that will be the situation,” he answered.

June 7, 2011
Canada sees little chance of N. America recession
http://www.reuters.com/article/2011/06/07/canada-economy-flaherty-idUSN0718843520110607
There is little chance that the current North American economic slowdown will turn into another recession, Canadian Finance Minister Jim Flaherty said on Tuesday.
“I do not think the risk is great,” Flaherty told reporters at an economic conference in Montreal.

…………….

LOL – what more can I say. He & Stevie said there was no recession in 2008 and when Flim Flam was Fin Min under Harris he lied also.

#153 Devore on 06.08.11 at 5:47 pm

#140 From Mississauga with Love

You are likely to see the same thing as in previous downturns in TO and elsewhere, if you only look at the average: prices are going up. But in fact, prices are going down. Buyers are getting more for their money: bigger house, better location, better house. Crap sits on the market, and sellers who “won’t give their house away” take theirs off the market. Look at metrics such as price sold per sqft, price sold vs assessment, price sold vs asking price.

Asking prices are irrelevant. Listings just show you what hasn’t sold.

#154 Vancouver_Bear on 06.08.11 at 5:48 pm

#46 BPOE on 06.07.11 at 11:42 pm

If nothing of canadian nature matters in Vancouver may be it’s time to take some pitch forks and baseball bats and kick some foreing infestor arses….so they would know who is the owner here….Too bad that we are not allowed to own fireamrs :(

#155 SMOKING MAN on 06.08.11 at 5:59 pm

Garth do a book on the MIND OF A BUBBLE HEAD.

Chapters to Include:

1) Afraid of risk.
2) Wishful thinking in investment decisions.
3) Jealousy and vindictiveness.
4) Focused on fundamentals and not anticipating the mind of the herd.
5) Impatient
6) Wall papering and painting tips of moms basement.
7) Pretending to Love the friends with granet and hardwood, secretly despising them.
8) To committed to internal belief system.
9) Why Grammar and spelling is more important that becoming a Gazilionare.
10) Renting and having weird, wack job nabours is so cool……

#156 Devore on 06.08.11 at 6:02 pm

#147 poco

more and more realizing that “what goes up must come down”

A lesson learned too late by those who have to sell. Not everyone can take their house off the market and hunker down.

#157 Vancouver_Bear on 06.08.11 at 6:03 pm

#35 Hoof – Hearted on 06.07.11 at 10:30 pm

That arrogant guy deserves to be publically castrated.

#158 Bruce on 06.08.11 at 6:08 pm

#124 Bottoms_Up

I am not stealing any more than you would be if you bought an item at a sale and I bought the same thing at regular price. I am doing nothing even close to resembling stealing.

I’m taking advantage of an opportunity that is given to me and anybody else that cares to use half a brain and keep their credit score up. Rich or poor doesn’t matter, good credit can be maintained either way.

I make more money because I took advantage of opportunities to get an education. Have I stolen from the non-educated?

Take responsibility for your own actions. Control what you can control and don’t blame yours or other people’s crappy situations on people whose biggest crime is being financially prudent.

#159 randman on 06.08.11 at 6:13 pm

Great read from Doug Casey on the future …of everything!

http://www.caseyresearch.com/editorial.php?page=articles/our-economic-future-best-worst-case&ppref=GLD411ED0611A

“The most sensible plan for the next 20 years is to plan to survive. The days of “He who dies with the most toys wins,” and of two whole generations living way above their means, are over.

20 years isn’t forever. Think of it like a bear market, when the best thing to do is take your chips off the table, grab some books and retire to the beach for a year – except that this is going to be a lot longer and more serious. Nonetheless, I expect my fundamental optimism to get through it undamaged, as should yours.

For one thing, the long-term trend is favorable. Mankind has risen from subsistence and living in caves as little as 12,000 years ago, to reaching for the stars today – and the rate of progress has been accelerating. Why should that stop now?”

#160 Vancouver_Bear on 06.08.11 at 6:15 pm

#48 BPOE on 06.07.11 at 11:47 pm

In 1980 I was still in diapers, so could not get a mortgage. Or infants nowdays qualify as well? Great country!!! Fog a mirror get a loan from the most prudent and conservative banks in the Galaxy….Canadian banks!!!

#161 Prof ANON on 06.08.11 at 6:18 pm

@117 Brian T

They got the story wrong. It wasn’t about student loans and it wasn’t a SWAT team. Sorry folks, the US isn’t breaking down doors to pursue student loan payments.

http://www.politico.com/news/stories/0611/56530.html

#162 Vancouver_Bear on 06.08.11 at 6:30 pm

http://www.google.ca/search?q=chinese+are+buying+up+real+estate

They are buying everything……WE ARE DOOMED.
You don’t have to be genious to figure out that it’s the same story all over the world….BUT IT’S DIFFERENT THIS TIME AND IN {put name of your city here}. BECAUSE EVERYBODY WANT TO MOVE TO {name of your city}.

#163 randman on 06.08.11 at 6:31 pm

#111 Daystar

“1) U.S. dollar gains strength, won’t happen until their housing market finds a bottom and financial institutions can handle higher rates.”

This is what most people don’t get

For the last 10 years gold has been rising against ALL currencies ….but really gold isn’t rising in price….currencies are losing value against gold

If the US$ “rises” as you think then it will only rise within a closed system of falling currencies”

Look at graphs of Gold vs “anything else” Oil,house prices, car prices, Dow …

a lightbulb might go on!!!

#164 Mr Buyer on 06.08.11 at 6:37 pm

109 Cookie Monster We are approaching perilous times. We are approaching limits that restrict the large room for error we had in the past. We need accurate assessments of what is to come and a way forward based upon our understanding. Divide and conquer is an old strategy. As an individual family I can try to maximize our chances whatever the terrain. It is just that a proactive approach even at this juncture may make for a much safer country in the tough times ahead. I am guessing that surprisingly small adjustments would be required given the power to implement them. Treating people with disrespect by lying to them and blaming them for the exploitation of their darker nature could be one of the first things to go. I am wondering if the massive rate of population growth is the real and present danger that I suspect it is. If so it is time to think things through and take action. United we stand and divided we fall.

#165 Increasing that 1% on 06.08.11 at 6:38 pm

bigrider beez bad, he in trubble

Though, he was kind of on a roll there, but what about Hoof?! I need some consistency ! Breath in..and out..
====================
Re: Utopia, at 83 and 86
If you keep insulting people who are you going to have for your audience?

#166 Vancouver_Bear on 06.08.11 at 6:42 pm

#66 Captain Jack on 06.08.11 at 2:56 am

Let’s all start doing it….google translate will help translate from English to any language. you can even listen to the translation…..in most languages. Let’s start scaring those infestors off canadian territory.

#167 45north on 06.08.11 at 6:48 pm

maxx: We were in to see our bank today and a mortgage advisor we know confirmed that the recent teaser reductions in mortgage interest were designed precisely to try to gain market share as there are now fewer sales.

which confirms what Vancity Girl said a few days ago:

Was talking to my friend who is a mortgage advisor at RBC. He said the mortgage market has completely dried up. Which is why RBC lowered their rates. It’s too competitive and nobody is taking out loans.

so if you want to know the “context” it’s the banks have the best information and they’re scared

#168 Cato on 06.08.11 at 6:59 pm

#111 daystar – I think there is an alternate scenerio.

The US is in dire straights, most don’t recognize just how bad the situation really is. Its been a long time in coming but the end game is finally here. Currencies have on average a 40 year lifespan before crisis, the current iteration of the USD is on year 42. Many other fiat currencies followed the US fiat model at same time so this pandemic is no accident – they all suffer from the same disease. They are all headed towards collapse and we are headed to a new world fiat system.

The US has no choice but to continue monetizing debt and debase the dollar. The Fed is actually pleased with results thus far, the weakened dollar has been seen to increase US competitiveness. The US has been repatriating manufacturing jobs not from the likes of China, but from countries like Canada. You can bet US policy makers fully intend more of the same. In order for the US to return to sound monetary policy it will need to cut, and cut deep. Congress is squabbling over 50B in proposed cuts – to return to sound money they would need to cut over 1 trillion. Its political suicide and its not going to happen, expect more of the same as Obama takes another run at the white house.

Unfortunately a side effect of debt monetization is commodities inflation. The fed unwittingly sparked unrest around the globe. The various OPEC regimes had to make expensive commitments to their citizens quell unrest. They now need high oil prices to honor these commitments, and will set outputs accordingly. Inflation has become a feedback loop – higher input costs from one side of the globe feeds into higher output costs on the other. Our farmers face rising fuel & fertilizer costs, OPEC citizens face rising food costs. The culprit to this calamity is unsustainable deficit spending by world gov’ts and at top of the heap is the US.

The USD is being driven in a downward trajectory and while we might see pauses and mini-corrections in commodities there is an overall, long term trend at play that has large implications for Canada. Some aspects of the Canadian economy are benefiting from US monetary policy, but the most politically influential areas of the economy are not. Carney has tools at his disposal to directly intervene and peg the CAD, I strongly suspect we’ll see political influence for him to do so. Direct intervention will carry a high long term cost, but it will save manufacturing jobs in near term and politically thats all that counts.

Bond markets would punish intervention – they will demand repayment for the devaluation in the form of interest rate hikes. Debt servicing costs for ordinary Canadians will rise and implication for housing market would be dire. Canadians would no longer be buffered by strong currency from the inflationary bite seen elsewhere in the world. Cost of living would outpace wage growth and living standards fall. Canadians will find themselves much poorer and wealth effect will evaporate quickly.

Canadian manufacturing needs to learn to compete on productivity, not currency but there is no way politicians will step back and let markets take their course. Canadians need to wake up to fact the world has changed, we can’t tag along on US coat tails any longer. We need to learn to compete on our own merits or suffer the consequences. Unfortunately the US is going to go from being our largest customer to our largest competitor and 70+ years of dangerous socialistic policies have left the country ill-equiped to compete on the world stage. This is one of the many rude awakenings Canadians will be in for during next 10 years.

#169 Live Under Your Means on 06.08.11 at 7:05 pm

OT – Here on the east cost we have had the worst spring that I remember since moving here in ’76. In the last few weeks we have been inundated with pollen and the garbage that maples produce. If I had my way I’d get rid of the old Maples out front. My car is a total mess. Even a sponge couldn’t remove the stains, etc. I read the other day not to use dish detergent to remove it – not sure that’s correct. Out back pollen from trees/shrubs and needles from four 80-100 ft Hemlock trees near our back deck cover everything. And the Hemlocks shed their needles twice a summer. I have a love/hate feeling for them. Worry that 1 day during a h’cain our house will be destroyed by them. During Juan we, and many neighbours, lost quite a few old trees but the Hemlocks survived. When we moved her 21+ yrs ago, DH carved our initials inside a heart on one of the Hemlocks. Can’t see the initials but the heart outline has at least tripled in size. :-)

#170 Derek on 06.08.11 at 7:11 pm

#100 Daisy Mae on 06.08.11 at 10:37 am wrote:
But what confuses me is WHY are we experiencing price hikes for consumer goods, other than real estate? We know consumer spending is slowing because of these price hikes.

Why indeed. Basically it’s because everybody in the economy needs more pennies to put towards paying off debt whether they are traders or wage slaves. Traders can get more pennies by increasing their prices or reducing their costs. At the moment it’s easiest for them to increase prices. Wage slaves can get more pennies by obtaining a wage increase or reducing their spending. At the moment it’s easiest for them to reduce spending (but expect more strikes, labour unrest and unemployment over the next few years as they try to increase wages).

So how do those two urges interact to cause price hikes? Well, traders and wage slaves both spend their pennies on two kinds of items: needs and wants. When they have to cut back, they can’t cut back on needs but they can cut back on wants. So they don’t buy so much real-estate or so many Disneyland trips but they do buy more or less the same amount of food and gas. Meanwhile all the traders try to increase price of their goods. The traders selling food and gas succeed because people still need food and gas. But the traders selling real-estate and Disneyland trips don’t succeed in raising prices because people don’t need those items the way that they need food and gas.

Hence the rise in the prices of essentials outstrips the rise in the price of luxuries. In fact as things get worse the supply of luxuries (and the price) will fall. And the only way to reverse that is to reduce the average person’s debt.

#171 Daystar on 06.08.11 at 7:17 pm

#138 Soper Eats Babies on 06.08.11 at 3:50 pm

Right you are. Sez it all. F & H couldn’t smell a non flush toilet downwind if they tried.

#172 Nostradamus Le Mad Vlad on 06.08.11 at 7:23 pm


Yakking about nothing in particular, there was an interesting article in the KDC today, about ‘Net bilking.

This is an idea by ISP’s — Telus, Bell, Rogers, Shaw and others — to bill ‘net users based on time used, which will increase their profits substantially.

Take a gander at this site, if you’re interested in stopping the gouging.
*
Govt. lies? Depression, economy in poor shape — the masses are finally awakening! How Do I Rip Thee Off? Let me count the ways . . . Inflation, and how to protect one’s wealth against it; Derivatives More cash is needed to clear derivatives, but money is being withdrawn from the world — TPTB. Scenarios / outcomes? 2:14 clip Waiters, waitresses and bartenders seeing more of their wages go to govt. (socialism?); Cycle Change West handing itself over to the east?; Bitcoin Currency “The Ponzi-scheme bankers know full well that a popularly adopted alternative currency system will draw people and resources away from the central bank, which is already on the verge of collapse and cannot survive a run on deposits.” wrh.com.; Death by Debt “Just as the design of the General Electric Reactors doomed them to melt-down, the design of private-central banking is one that must sooner or later destroy itself after transferring ownership of the real wealth of the planet into the pockets of the private bankers who enslave the world with paper-and-ink chains.” wrh.com.

Daily Job Cuts “McDonald’s may be hiring, but here are the companies who are laying people off!” wrh.com. NAmerica is being turned into a service-based economy, with mfg. / industrial / trades etc. being outsourced and offshored; Greece When Greece defaults, the fat lady is singing; Facebook for Foreclosures, along with a plethora of links about different things; 1:18 audio clip No pix (except lead), but possible reason why Dylan Ratinger was fired from MSNBC. Funny? Yep! Middle Class wipe out. No TV or m$m coverage, just figures. Can be applied here as well. IMF’s billions will hand Egypt’s riches to the west, then China and Russia take it right back and hand it back to Egypt. Simple, eh? Wealth Preservation A good grounding.

Hot Radioactive levels in Seattle, which attach to lung tissue; OPEC, like NAmerica is like a junkie suffering withdrawal symptoms. Police State Headline says what needs to be said, but there is other good stuff. Disarming Citizens Mass killings of sheeple? Monsanto, Monsanto; wherefore art thou, Monsanto? The Rethuglokrats? Anarchy NAmerica — It’s here and now!

GB (Global Burping) Trees, it iturns out, are the main source of GW (Global Windbags). NOT! Kannaduhh “Guns don’t kill. Police do!” wrh.com. Suicides Japan’s suicide rate hits two-year high in May.

France Bank run? Obama + Greece “Obama promises bailout for Greece. No mention of California, Illinois, Detroit or American homeowners.” QE3 Like Xmas, it’s coming and Benny and the Jobs He may have correctly guessed.

#173 maxx on 06.08.11 at 7:25 pm

#67 Imstupid-

“New mortgages are almost non existing and that bank is trying to force people into fixed rate to bump profit to make up shortfall from lack of new mortgages. New product cibc has is a cash back mortgage that generates savings within mortgage payment. That is for fixed rate mortgages.”

Creative debt peddling should be legislated illegal. It benefits too few and tempts far too many. Most of those who are tempted are just the people whose jobs are disappearing, never to return.

The first wave of government downsizing has had a significant effect on mortgage slowdown. Wait ’till the next wave comes along.

#174 45north on 06.08.11 at 7:54 pm

Cato: Bond markets would punish intervention – they will demand repayment for the devaluation in the form of interest rate hikes. Debt servicing costs for ordinary Canadians will rise and implication for housing market would be dire.

if I understand, the US will continue to devalue its own currency, if Canada follows then the bond market will demand higher interest rates? Is that what you are saying? If Canada maintains a high dollar (relative to the US) then Canadian manufacturing will be gone

so the choice is keep Canadian manufacturing but then the housing market tanks?

#175 Daisy Mae on 06.08.11 at 7:54 pm

#100 Daisy Mae

“Isn’t it supposed to be based on what the market will bear?”

“Do you enjoy answering your own questions?”

I dunno…maybe when we resort to buying powdered milk and look for 365 ways to cook hamburger….the prices will come down? LOL

#176 Markey on 06.08.11 at 8:00 pm

#108 vyw – According to this Morningstar article, “A 2010 poll from Investors Group found that 56% of Canadians do not consider paying off a mortgage as a deciding factor when retiring. Furthermore, only 56% retire debt-free, down from 61% a year ago, according to a recent survey from RBC.” Apparently, the senior parents of retiring boomers are not sitting on piles of money as you suggest. See http://cawidgets.morningstar.ca/ArticleTemplate/ArticleGL.aspx?id=383558

#177 Bottoms_Up on 06.08.11 at 8:43 pm

#158 Bruce on 06.08.11 at 6:08 pm
—————————————
I never meant to explicitly say you were stealing. My point is the system is set up to force us to use credit cards in order to not ‘lose’, or get ‘stolen’ from.

Credit card companies exist…they take 3% from each transaction….stores therefore have to increase their prices in order to compensate for the fee they pay the credit card companies….credit card companies reimburse a portion of their earnings to their customers…thus effectively penalizing those that pay with cash.

Why should anyone be penalized when they pay with cash?

#178 Bottoms_Up on 06.08.11 at 8:51 pm

#135 Live Under Your Means on 06.08.11 at 3:42 pm
———————————-
They did a quick pan-out of where he is sitting at the game. I counted at least 9 security personnel (the two closest were wearing Nucks jerseys). He also took the .gov jet to the game. So all in all he probably paid around $2000 for his tickets, and it probably is costing the taxpayer tens of thousands for the security and jet.

#179 Seeker on 06.08.11 at 8:56 pm

I don’t understand the rationale of needing a bigger house. Take a look at the couple who live in a 320 foot square house and rethink the whole idea of living space – http://www.chatelaine.com/en/blog/post/28342–could-you-raise-your-family-in-320-square-feet

#180 Calgary Car Guy on 06.08.11 at 9:16 pm

I’m starting to think the Canucks were in a bubble, too LOL. Yeah,yeah I know the Flames are golfing. Go Bruins!

#181 disciple on 06.08.11 at 9:52 pm

#164 Mr. Buyer…

I can empathize with your comments about the future. To get a glimpse of it, we have to critically analyze the present. Most of the fear-mongering being perpetrated against the common man are fabrications. Examples:

Man-made climate change (Mother Earth has done quite fine without us and will continue to if need be).
Population (You could fit the entire world’s population into the State of Texas with over an acre for each average family of four)
Food Distribution (we produce close to double what we need, so where do you think it gets wasted along the way?)
Peak Oil (Crude is a-biotic, meaning it is NOT a fossil fuel, and there is plenty of it wherever it is formed within the Earth, but we shouldn’t be waste-burning it in our Hummers…ahem….it’s too beautiful a moleculer compound for that)
Pollution (only a handful of multinationals are responsible and not you or I)
Rise of cancer, alzheimers, viral outbreaks etc…(the medical mafia cured all diseases in domesticated livestock many decades ago-why then haven’t they done it for their “human” livestock)

So…my consistent message on this blog would also speak to your concerns; that is, most of what you have been brainwashed with by your trusted leaders in education, science, and politics is WRONG. These people are not ill-meaning, they have just been paid either directly or indirectly to repeat what they have been taught, so don’t blame them.

In other words, fear not, in time all things shall be revealed by the light of truth, and those whose hearts are open and not cold, will receive it.

#182 BrianT on 06.08.11 at 10:28 pm

#181Disciple-Peak oil has nothing to do with the origin of the product-you could have a gazillion barrels of abiotic oil 25 miles beneath the bottom of the Gulf of Mexico-it ain’t getting to your local filling station nice and cheap like you need it.

#183 Dark Sad Monster Bunny on 06.09.11 at 12:30 am

181 Disciple

“You could fit the entire world’s population into the State
of Texas with over an acre for each average family of
four”

Incorrect. Family of 40. Or ten texas’. Take your pick

#184 disciple on 06.09.11 at 8:49 am

Hey BrianT – I think you may want to reconsider your notion that Peak Oil has NOTHING to do with its origin. I understand your point about distribution monopoly, but you probably don’t know that crude is constantly being formed as we speak – proof: Pennsylvania oil fields bled dry shortly after turn of the century somehow mysteriously filled up again decades later. You see, crude oozes up to depths where we can suck it out. There are other examples as well…look it up.

#185 disciple on 06.09.11 at 8:54 am

If you still don’t believe me, consider that we have sucked out of the ground more crude in terms of carbon atoms than was contained in all of the life that has existed on the planet, so obviously it is not biological in origin. If you do a little research beyond your MSM and school system mind-controlling you will find hydrocarbons exist on other planets as well in extreme abundance.

The Myth of Scarcity is the LIE behind most flawed economic theories, including that of housing.

#186 disciple on 06.09.11 at 9:53 am

The one thing that I fear is becoming scarce around the world is fresh drinking water. During my travels in Asia, the one constant factor most villagers I spoke with remarked to me was about the dwindling rivers and waterfalls and streams. Even in the major cities, the abrupt and uncertain nature of the fresh water supplies was a key concern.

For this reason, many years ago, I envisioned that one day Canada would be invaded for its 25% supply of the world’s fresh water, and it’s China that mostly needs it. Perhaps Vancouver is the first point of entry?

#187 Jason Baxevanidis on 06.09.11 at 11:57 am

Vancouver is magic. Seriously!

Proof? The never ending real estate bull market that defies economic logic.

Screw real estate! I’m going to invest in a Unicorn farm. It’s going to be huge!

#188 vyw on 06.09.11 at 12:00 pm

#176 thanks for the article, Markey
some good advice:
So is praying for substantial inheritances from their elderly parents, says Berton. “It’s amazing how many people bank on [inheritances] to save them,” he says. “I tell people not to count on it. There may not be that much money and sometimes it goes to the church or charities.”

And there are boomers who will be facing retirement with debt. Some believe that the boomers will scale down, sell their homes but with the bust generation, there will be few buyers and too much supply. I don’t think we’ve factored in the intergenerational shift in assets from the boomer’s parents over the next 20 years. It’s huge – and from a generation of savers who grew up during the Depression and War years. Boomers win again? Well, I agree that we certainly don’t deserve it.

#189 Vancouver_Bear on 06.09.11 at 2:16 pm

#118 BPOE on 06.08.11 at 12:51 pm

I can feel your pain…..your business Mr. Realturdo dried up and finished. What is so special about this city? YOU GOT IT RIGHT RIGHT IT’S NOTHING oh wait….it’s the never ending rain.
Majority of the world’s population have a very vague idea where the Vancraphole is located. Where is your freind DA? I guess he can’t even find $$$ to pay for the internet these days, so will you soon. Just a side note I have a littled side business selling some cheap stuff just for fun. Business have dried up, even during recession of 2008 it was better….ppl in Vancouver ran out of cash and I don’t take credit cards.