Zero

House market 'hits the top' says LePage. Click here.

Three times in the last three years the feds have tried to repair the damage. Despite my bleatings in Parliament, the Harper Tories embraced subprime mortgage lending in 2006, paving the way for government-insured zero-down mortgages and 40-year amortizations. Within 18 months, these monsters accounted for two-thirds of all new borrowings, and laid the unstable foundation for the country’s greatest housing bubble.

F, of course, wanted none of my lip. His bill was pushed into law, even as the American real estate market started into a cascade which five years later still seeks a bottom. In early 2008, seeing the damage to affordability, the rise of house porn and the idiocy of F’s actions, I started this blog.

That autumn F relented, banning zero-down mortgages (at least the ability of CMHC to back them), and shortened mortgages to 35 years. Then the financial crisis hit, Canada adopted emergency interest rates, and six months later the real estate blaze rekindled. Piddling on the inferno, the little firefighter damped down home equity loans, moistened speculators and made it slipperier to get 95% financing if you had no money. More bubble. So 100 days ago, 35-year ams were killed and the maximum insurable home loan became just 30 years in length.

Since then, as I’ve told you, house prices in Vancouver and Toronto have swollen like a dead hippo. Whereas the US housing market collapsed when the average house cost about 5 times the average income, in 416 it’s now eight times and in Vanity it’s twelve.

The average downpayment in Canada has dropped from 12% a decade ago to just 7% today. And, as you know, mortgage debt at over $1 trillion is unprecedented. The only reason real estate values have risen massively is because of an equally massive increase in borrowing. And for that you can thank the minister of zero. He’s the guy who let all this out of the box.

Hell, you can even blame him for Mark Fidgett, which seems unnecessarily cruel.

Mr. Fidgett is a loud & proud member of the financial underclass which specializes in pillaging virgins. Once F (the original) legitimized zero-down mortgages by having taxpayers backstop house loans made to people with no money, people like Mark just had to exist. They effectively tell everyone that a lack of savings, investments, down payments or cash is no barrier to home ownership. And by offering no-money-down financing, they appeal (big surprise) to people with no money.

Now you may think 0% down loans are illegal. Wrong. You can put a minimal payment on your credit card, borrow it from your house horny MIL, or get one of those cash-back mortgages from a big bank. In each instance, you buy a house without money, and behind many of those creepy deals is a piece of work like Mr. Fidgett. The kicker is, even though you actually borrowed 100% of the money to move into a house you can’t afford, Canada Mortgage and Housing Corp. will protect the lender against default. And with what’s coming, expect lots.

See? F is still at work. He recently raised CHMC’s liability limit to match the federal debt – about $600 billion. And most of that portfolio is composed of high-ratio, high-risk loans.

But back to Fidgett. Watch the vid above. The guy actually makes the case that buying a house with no money at all is better than with a down payment – even one as weenie as 5%. He bases this on Cirque du Soleil logic that in five years from now, when interest rates rocket “to 4 and a half per cent” (in your dreams), “the zero down guy is actually a more stable scenario than the high ratio guy.” Why? Because he has a higher interest rate off the bat.

Of course, neglected is the fact the zero-down buyer also has made $65,000 in mortgage payments and earned just $15,000 equity on a $250,000 loan – which means zero dollars after paying commission to sell the place. And that’s assuming higher rates (a certainty) have not forced house prices lower – in which case the borrower is screwed. But Mark’s okay. Thank goodness.

Canadian subprime lending lives on. Each day it devours more young. That people like Mr. Fidgett rise to fill a need is no surprise.

That your country created it? No surprise there either.

217 comments ↓

#1 Dan on 07.06.11 at 9:00 pm

Think the mortgage terms will start to affect prices pretty soon, already seeing it on two story homes in Calgary.

#2 Medic on 07.06.11 at 9:07 pm

That guy said he was going to comment on GT and yet he didn’t. What’s with the T-shirt also?

#3 cata on 07.06.11 at 9:07 pm

Garth, I just lost 4:50 minutes of my life!….first????

#4 Small Steps on 07.06.11 at 9:08 pm

Brutal. The video gives me flashbacks of when the gym teacher taught our science class in high school. The information communicated is about as useful.

#5 Sasquatch on 07.06.11 at 9:08 pm

There are adds for these type of zero down, bad credit, no money housing possession all about town. Ride a bus in Calgary, and just look up to see it.

#6 Get real on 07.06.11 at 9:13 pm

What twisted logic!
People who believe this deserves what is coming to them.

#7 Smoking Man on 07.06.11 at 9:13 pm

So Bubble Heads…………….. Life is not fair is it……….

You guys said last fall and winter

“Run hide sell sell sell because this spring we are going to see listings explode, prices come crashing down etc etc…….,

Ba hahahahahahahahahah

Is it not sad that a drunk, who can’t spell and has the grammar skills of a 5 year old can consistently out predicted you guys.

Ahhhhhhhhhhhh

From the Toronto real estate board

Read it an grass hoppers.

July 6, 2011 — Greater Toronto REALTORS® reported 10,230 home sales through the TorontoMLS® system in June 2011 – up 21 per cent compared to June 2010. This number represented the third best June result on record behind 2007 and 2009. The number of transactions during the first six months of 2011 amounted to 48,189 – down by 4.5 per cent compared to the first half of 2010.

http://www.torontorealestateboard.com/consumer_info/market_news/mw2011/mw1106.pdf

#8 LH on 07.06.11 at 9:19 pm

The answer is simple: avoid the suburbs/exurbs and avoid the cheap developments favored by the flippers and the entry-level, 5% downpayment homebuyer!

Houses (not condos) in Toronto districts C01 and C02 are the only thing I would consider. Prices are too high for the vast majority of the subprime class. Transfer taxes are too onerous for the flippers. Furthermore, the banks I’ve dealt with demand healthy 20-35% downpayments on houses in this area. When the stuff hits the fan again, high quality, positively carrying assets in these districts should outperform.

#9 garrulous squirrel on 07.06.11 at 9:20 pm

USD 360 Billion in shady loans has ‘disappeared ‘ from Chinese banks. Any wonder why the Van ( Rat ) Couver real estate market has gone wild?

http://money.msn.com/top-stocks/post.aspx?post=ac207e22-7c8a-4367-8b74-2329ff9a6d7a

#10 Kevin on 07.06.11 at 9:22 pm

Next round of mortgage tightening should be to get rid of cash back, 0 down and free down payment mortgages. Replacing the price ceiling CMHC removed in 2003 would be another good step.

#11 HappyToRentInStoon on 07.06.11 at 9:22 pm

Anyone stupid enough to believe Mr Fidgett’s ridiculous logic deserves everything they will surely get.

#12 cata on 07.06.11 at 9:24 pm

A 250,000 mortgage????…. what are you buying? A parking spot in Toronto??

#13 chris on 07.06.11 at 9:25 pm

I agree with Garth’s fundamental analysis of our canadian r.e being in a bubble but what about Vancouver. I used to thing that 2006 prices were already insane and look at it now,holly fu%&.Not to mention the endless talk on how very beautiful place this is,blah,blah,blah, it just never seems to end regardless how high prices go . Don’t even get me started on the whole world wanting to move here.
In closing mr: Turner as much as bubbly this place is i will believe it when is see it.

#14 MikeT on 07.06.11 at 9:26 pm

We are positioning ourselves quite well for a nice crash, and the numbers say it will be more spectacular than in the States. The realists that I know are quite pessimistic and grumpy these days. They are some of the best professionals in Canadian finance that I have ever met, and if they are pessimistic, it’s a sign that I have to be afraid of what’s coming… Me thinks the pop corn will be damp and the sno cone will be bitter, cause the crash will bite me in the arse too, even though I got no debt.
In Prozac we trust :)

#15 Raincouver on 07.06.11 at 9:27 pm

Can’t wait to see who was buying Vancouver, and how many Helocs were used to buy beamers and benz. I see so many people in expensive cars, with no job and wonder how these people afford all this shit.

#16 End of the Line on 07.06.11 at 9:33 pm

zero down, zero commitment….zero future.

#17 xyz on 07.06.11 at 9:35 pm

Not surprisingly the Rent Vs. Buy Link on that site does not appear to work :/

#18 bsallergy on 07.06.11 at 9:35 pm

My country didn’t create this Garth. A bunch of selfservatives in search of a majority did. The harpercrites can yammer on and on about fiscal prurience our minister of funanddance is more concerned with ruining the future of our country. So politicians listen up, to get a mojority wrap yourself in the flag, defend our balanced budget, kill programs that are good for people or good for the environment, show up at military bases or be photographed with soldiers as often as possible, piss away billions on defence to defend our way of live, be perfectly clear and say god bless Canada as often as you can. Will be a hell of a mess and hope I can vultch successfully when the dust clears.

#19 rightiswrong on 07.06.11 at 9:41 pm

Interesting that by putting 5% down, one ends up with a 250K mortgage just like the no money down scenario. The payment for the 5% should be 1203. Though with his twisted logic, that would just strengthen his argument.

No doubt he voted self-servative…

#20 squidly77 on 07.06.11 at 9:42 pm

O.K. the guy in video is a nut job. It’s now better to buy with zero down? What ever. He must have just stumbled in from Terra Incognita.

The huge population of Nut jobs involved in the real estate industry is truly staggering, it overwhelms.

#21 Pete in Barrie on 07.06.11 at 9:44 pm

That video makes no sense at all and could only appeal to someone with absolutely no math skills.

I finally remorgaged the farm and bought one of Garth’s books (Money Road). Something to read on my flight next week to Florida where I am looking at buying a cheap condo in Clearwater. Anyone with any negative insights into buying there right now. I am interested in reading any concerns people have.

#22 wes_coast on 07.06.11 at 9:44 pm

The bigger story here is that we have all become an extension of the levers that exist in Keynesian style economics. F pulls a lever and we (save those who are smart enough to read this blog) respond. The western world was founded on people that didn’t wait for a government to hinder or save us. We were savvy, had the pulse on risk and new how to ride it properly to create sustainable growth. What happened to us? We really let HGTV and CIBC commercials reprogram us into mindless robots that just respond with ‘X’ when ‘Z’ stimulus is applied by our experts in government or banking? Whatever happens to housing: we need to regain what we’ve lost. Individuality. Inginuity. Humility. Business Saavy. If we don’t it will just be another crisis next time and we’ll be doomed to repeat the failures until we get it right.

#23 inexsucks on 07.06.11 at 9:47 pm

A guy who just got locked up behind bars for 5 years will be better off than I will when he gets out….

#24 squidly77 on 07.06.11 at 9:52 pm

My adopted daughter lives in Miami, I am down there twice yearly. A word of caution for you to consider. Squatters that are U.S. citizens.

#25 Lisa on 07.06.11 at 9:54 pm

Thank you Mr. Turner for saying it: Canada does have subprime mortgages. This is the dirty truth the mainstream media and the Feds don’t want to talk about. They keep shovelling the same B.S. about how we’re so strong and sound. Nothin’ to worry about here, folks, move it along.
WHY are they keeping this charade going for so long? It’s practically SINISTER. Daily lies churned out by the news, etc.
Check out the latest issue of Maclean’s…blurb about Canada’s “hot housing market”. Absolutely nauseating.

#26 VICTORIA TEA PARTY on 07.06.11 at 9:56 pm

REAL ESTATE: COUNTING ON #1!

No point in Fidgetting over zero downs and the like.

Higher interest rates will kill this goose. But we don’t know when that’ll happen.

In the meantime, the Great Canadian Underclass (with visions of petit-bourgeois lifestyles dancing in their wind-tunnel heads) will continue to be sought out and be willingly “exploited” until the roost and its chickens finally hive into view.

Putting time-lines on any economic bubble is a mug’s game. Really.

BUT VIGILANCE IS STILL NECESSARY

In order to avoid the eventual outcome of all of this swirling debt problem, stay living under your means. If that means renting a home, then do so. If it means not going out to dinner, then eat at home.

And while you’re looking after your own financial business, turn on the TV and enjoy the show: “World-wide Economic Follies.”

Check out the know-it-alls elsewhere on this financially-tattered old chunk of space rock. Who are THEY? Government bureaucrats, politicians, bankers, and rock-throwing rabble.

What are they up to? Trying to convince one another that the debts that they and their predecessors have racked over the last 65 years really isn’t debt. It’s “something else.”

It seems to be that in seeking a “solution” to that “something else” (it’s actually sovereign debt default issues), I have decided to offer some really useful advice: instead of consulting economists, go pounding down the doors of local alchemists!

It could be worth a shot, but likely our betters may just find out that those old guys are better able to turn lead into gold, than they are to cook the debts out of the books!

This glorified kitchen adventure process will continue until one of two outcomes emerges:

#1) The participants will cut a deal cancelling out all debt, thus zeroing out past spending indiscretions, or;

#2) They’ll do something extremely dumb, where nerves will be lost, after a bad decision has been rendered, and down she goes!

I’ll bet the Fidgetters, and their victims are betting on outcome #1!

#27 Mark on 07.06.11 at 10:01 pm

Thank you Mr. Turner for saying it: Canada does have subprime mortgages

Indeed, the entire CMHC book of business is in subprime mortgages. Why else would anyone use CMHC, if they could get a prime mortgage through a bank?

#28 Utopia on 07.06.11 at 10:07 pm

I think what bothers me most about Mr Fidgit is his level of confidence when he is dead wrong. Seems like a used car salesman too. Does he have skin in the game?

Is it any surprise that younger people cannot easily see through his lame argument on rates? How could they have insights on this issue without any special expertise anyway? No doubt some who watched the video will be persuaded everything is OK.

The future is bright. Just put on sunglasses (and horse blinders).

What is most incredible to me though is that anyone is actually paying between 1300 and 1500 monthly JUST for the mortgage. I know, I know…many of you out there pay that and more…but still.

You live in the wrong part of the country and it is wringing your income dry. You cannot save to invest. Many of you cannot even afford to go on holidays without a LOC. I would feel sick if my monthly cost me more than 500 dollars.

You heard that right. Saskatchewan is the reason. Small town.

How pathetic am I then?

#29 BC Bring Cash on 07.06.11 at 10:10 pm

If $244.00 a month difference in payments according to Guru Mark F. is such a big deal, then anybody listening to him should run the other way. $244.00 a month is sweet F all in the cost of financing a RE property. If you are so close to making or breaking it, what a BS sales pitch. $244.00 a month for example is only one utility payment or a strata payment on a condo. apartment. Way to go Mark F. Your good at flogging a dead horse. I guess every sale counts no matter what the consequences to the buyer. Its amazing how much pain and suffering can be created by simply spending a few minutes with a lender and by simply signing your own name on that contract. People do it with a smile on their faces. Incredible.

#30 Markey on 07.06.11 at 10:16 pm

That Mark Fidgett video is the most convoluted babble I have heard in a long time. I wonder what he smoked to come up with such logic?

#31 Randis on 07.06.11 at 10:19 pm

Anyone with sane mind and grade 9 math skill can easily see that Mark manipulated the number to his favor. This guy is based in Vancouver, where average property price is north of 800k (I forgot the exact number …), how the hell can one buy a 800k property with zero down while taking out a 250k mortgage and pay 1500 per month? Where the hell is the remaining 550k coming from? … I mean, its so obvious its almost like crime that he trys so hard to act genuine …

Also, his emphasis on “payment shock” is simply a desperate act to justify his manipulation and really makes no sense at all. I mean, where the hell is the whole notion of affordability?

Lastly, all you zero down lovers, think about this. IF your property price drops to a point where it worths less than your mortgage, what do you think the bank would do? Do you think the bank would let itself expose to such risk and let you borrow more than the collateral’s worth? Wouldn’t it only make sense for them to cover their position and transfer the risk to you and demand equity from you? Deja vu US 2007/2008 anyone? … Hello? Common sense anyone?

Anyhow, this guy makes me sick … I need to hit the W.C now …

#32 Utopia on 07.06.11 at 10:21 pm

#18 BsAllergy said……

“I hope I can vultch successfully when the dust clears.”
————————————————————-
Everyone better understand quickly…that if they don’t have ready cash they will not be able to Vultch at all. Do not assume credit will be available for vultching when the time comes. It will not be there waiting for you.

Only savings set those in debt apart from those who wish to benefit from the misfortune of others and cheap real estate. Even stellar credit and a job will not be your guarantee. We have been there before and we already know the outcome. Savings count.

Do I really need to mention the US again?

#33 Joe on 07.06.11 at 10:22 pm

Erm, um, at the risk of being beaten with copies of Money Road, I, um, I uh, I thought Mark’s argument made sense. I mean, in a way, maybe the guy with the higher rate and payment is better off, in a way. Just a thought. ‘Cause he budgeted for it, right, so he’s used to the higher payment. Backing up slowly, quietly backing away, then run

#34 March of the Pigs on 07.06.11 at 10:24 pm

I’m not against socialist policies like CMHC, but there has to be some ground rules and maybe some public education?

I had a funny conversation with someone who was mad that the government was changing the mortgage rules and making it harder to buy a house. They couldn’t understand it and thought the government shouldn’t tell people how much house they can buy. Of course this was the same person who had CMHC insurance on a house they bought to flip.

It is different here we can look south, the Americans weren’t so lucky.

#35 Drew on 07.06.11 at 10:24 pm

this guy will undoubtedly get some guy who reads this blog to give it a try…what a smart thing to mention Garth, who in turn puts it on here.

This guy reminds me so much of real estate folks in the USA just a few years ago. where will he work in 5 years?

#36 Utopia on 07.06.11 at 10:27 pm

#12 cata on 07.06.11 at 9:24 pm

“A 250,000 mortgage????…. what are you buying? A parking spot in Toronto??”
———————————————————————-

Honest to God. Some of you borrowers are so screwed it is not even funny anymore. Don’t you even understand how ridiculous even 250K of debt sounds to me?

Even the people on this site are debt delusional. Wake up!

#37 Utopia on 07.06.11 at 10:31 pm

#7 Smoking Man on 07.06.11 at 9:13 pm

“So Bubble Heads…………….. Life is not fair is it……….”
——————————————————

You silly old fool. That article is not news. It is an Epithet for a funeral.

#38 TaxHaven on 07.06.11 at 10:36 pm

(Did I hear correctly?) He “…wants to demonstrate why (something) is true in his mind…”? Weird.

Houses are NOT investments. They are liabilities, they are consumer goods, they are a necessity of life. That’s all.

If you need a mortgage to “buy” (RENT, actually) a house, you can’t afford one.

#39 Ex-Cowtown on 07.06.11 at 10:41 pm

Smoking Man and Mikey the Realtor crack me up. There are small parts of only two cities in this whole damned country, and the rest of the world for that matter, where the RE hornmeisters are still smoking crack, and they’re trying to convince everyone else that everything is peachy keen, all over the world.

Right now, you can make a small fortune speculating in RE; you just better start with a large fortune to get there though.

#40 TaxHaven on 07.06.11 at 10:44 pm

I’m sorry, but I listened to that guy and – perhaps because he sounds like AM daytime talk radio – I couldn’t understand a chattering nonstop word he said.

#41 Randis on 07.06.11 at 10:47 pm

Also, I find this whole mortgage-qualification calculation thing soo tedious and misleading at best.

People, think about it, when they qualify you for a mortgage they calculate your GDSR and TDSR using your GROSS (pre-tax) monthly income and tell you how much you can afford per month … But then the money you use to pay your mortgage is actually after-tax money! This actually creates a false sense of security that screws people up and sad weaklings wouldn’t know what hit them … To put it in numbers, suppose your gross monthly income is 5000 and you are at 40% tax rate. Mortgage lenders would tell you that you can afford up to $2000 per month (TDSR 40%) for mortgage payment (assume no other debt). What they don’t tell you is that factor in tax, your gross 5000 becomes 3000 dispensable income and the 2000 monthly payment becomes 66% of a burden …

Anyhow, if any of you disagree, please go ahead I don’t care. All I want to say is Mark is on crack and his example is a totally meaningless and misleading.

#42 chris on 07.06.11 at 10:47 pm

Oh, according to report on global tv early this week, the influx of super wealthy buyers into the vancouver marker form china is only the tip of the iceberg.
In other words, real estate prices in Van have nowhere to go but up they said. Go figure this one Garth.
Ps ; Do you still sleep at night ? :)

You believe Global? — Garth

#43 TurnerNation on 07.06.11 at 10:54 pm

That explains it! F #2 is BPOE!!

#44 Elmer on 07.06.11 at 10:54 pm

Garth what do you think of covered call ETFs like HEX? It pays a whopping 15% yield! Would I be crazy not to add it to my portfolio?

#45 Calgary Illusion on 07.06.11 at 10:55 pm

#21 Pete in Barrie

Make sure the condo building isn’t vacant or at risk of being vacant…..otherwise you may be assuming a massive condo fee for the entire building. Better to find a house in Florida in my opinion to escape condo fees (which are like a mortgage in themselves)

#46 Omni on 07.06.11 at 10:58 pm

I really can’t get someone who wakes up and thinks this sh-t up and succeeds at getting rich off it. Is there no limit to the suckers we have in this country?
So many confident little parasites.
There’s no limit to stupidity and someone eventually will capitalizes on it. I don’t feel sorry for the droves of suckers, everyone is entitled to being stupid once in a while but with these people????
Reminds me of my neighbor, young guy, seeing a gal who really digs him alot, he thinks she’s a wack, but invites her over for drinks on Saturday nite.
Beware my friends, parasite are living right next door. Keep reading Garth’s blog. Fair warned is fair armed

#47 Omni on 07.06.11 at 10:59 pm

sh-t! I meant ‘forewarned is forearmed.’

#48 BigAl (Original) on 07.06.11 at 11:06 pm

#8 LH on 07.06.11 at 9:19 pm
The answer is simple: avoid the suburbs/exurbs and avoid the cheap developments favored by the flippers and the entry-level, 5% downpayment homebuyer!

Houses (not condos) in Toronto districts C01 and C02 are the only thing I would consider. Prices are too high for the vast majority of the subprime class. Transfer taxes are too onerous for the flippers. Furthermore, the banks I’ve dealt with demand healthy 20-35% downpayments on houses in this area. When the stuff hits the fan again, high quality, positively carrying assets in these districts should outperform.
==================================

Let me guess. You own and are vested in C01 or C02?
Another one of the holier-than-thou poo-poohing the newer suburbs. Let me guess – the older homes are ‘more solid’, or just plain ‘better built’, or have ‘better workmanship’, or some malarky like that? The reality of these older neighbourhoods and homes is that they require hundreds of thousands of dollars in renos……. just to bring them up to par with the newer homes, to make these junkers even as aesthetically pleasing as the newer homes. As far as the neighbourhoods go, sure, if you work right in central Toronto. Most of us don’t. Going downtown for the rest of us is a nice adventure, sometimes, like going to the sideshow or the circus. Fun to go to once in a while, but not a place I’d actually want to live and raise a family.

#49 BigAl (Original) on 07.06.11 at 11:14 pm

#8 LH on 07.06.11 at 9:19 pm
” Furthermore, the banks I’ve dealt with demand healthy 20-35% downpayments on houses in this area. When the stuff hits the fan again, high quality, positively carrying assets in these districts should outperform.”
==================================

You are deluding only yourself.
Why would banks decline a 5%er in ANY area when they are fully insured for them. Maybe because they are just fuzzy and warm about C1 & C2 in Toronto like you?
I nominate you for the deluded of the week award. Either that or you’re a realtor in that area. UofT ghettos are so hot these days, aren’t they?

#50 Thetruth on 07.06.11 at 11:22 pm

If in Alberta, take a little risk.

Buy with zero down. If after a while it doesn’t work, return the keys and walk away. Why wouldn’t you do that?

#51 WI Yank on 07.06.11 at 11:26 pm

Smoking Man – sees one up trend month, despite the YEAR being down 4.5% in 416 and He is right? WTF??

Volume Down, prices peajking…classic sign the end game is forming…..An international disease, this House Lust. The demograpghics are against sustained house price increases. Did I tell ya, there is NO cure for Stupid either?

Wanna BUY a House? Then buy one, with a substantial down payment, like say 20% that gets one out of PMI (private mortgage insurance). While we can borrow here at a term “fixed” for the life of the home loan, I understand that is not available in Canada, too bad.

Just don’t be peeved if a few years into the mortgage it is worth LESS than what you paid for it. Think of it as a Big immoveable car.

Whatever your term, 10, 15,20, 30 years, develop the habit of paying some additional principal in addition to your minimum scheduled payment.

Keep that shit-box car an extra year, or two, and pay OFF those dam credit cards in FULL before taking on a house.

Don’t forget retirement, it will be on you – social insurance will NOT pay a mortgage payment, and feed your fat behind, too.

Then maybe you can be like me, retiring at age 60 no debt, paid-off home, all the crap I need, and enough in the investments to buy a couple more houses if I REALLY want them.

Better yet rent, save your money, and in due time, be a Vulture…. It happened here, what makes you guys think you’re immune?? We have dumb politicians here, too!!

Snoing Man might make his money at the Casino, and that is great FUN as well. I prefer other venues, and we all have our vice.

#52 Jane on 07.06.11 at 11:29 pm

Hey Stunned from Yesterday, you are an idiot if you don’t take the money. Think what it could do for your kids down the road. What a great legacy for them, never mind peace of mind for you. We sold and are now renting bigger and better than before. Cash in the bank is a good feeling. And our kids survived just fine.

#53 Crash Callaway on 07.06.11 at 11:39 pm

The only thing missing in that video is the Ginsu steak knife offer.

In moronville they always 2 choices.
Black – white
left – right

Hey Fidgett what about door #3
The door that reveals it’s insane to buy anything
at any mortgage rate!
The door that says run for your freakin life, and don’t touch these insane house prices with a ten foot pole.

#54 Hoof - Hearted on 07.06.11 at 11:42 pm

#165 Imstupid

Hey, thanks man.
——————————————–

To Hoof-Hearted: What is happening to you? I have often appreciated your writing but your posts have gone crazy lately.

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

Listen Mon Ami..

Life is like ” Oil of OLAY “……..

Keep ’em guessing ………. ALWAYS……..they are out to get you !!!!!!!!!!!

Yes..they are even hiding in the Tupperware !!!!!

Review Ezra Pound bio….

PS ….Can I sell you some Amway/ K-Tel products ???

#55 Duke on 07.06.11 at 11:46 pm

I just got a response from Mark on his youtube channel.

Here is my statement:

Are you telling people about the risks of negative equity? Personally I don’t think prices will rise forever and you should be warning people about that!

And here is his reply:

Absolutely gassey, even more important than negative equity is “affordability”. No one size fits all. What may be good for one, may not be for another. That’s were the word “Consultant” comes in. Experience shows, most don’t consult, they simply get the deal done as fast as possible and move on to the next.

The nerve to call me gassey! Is that even a word Garth?

Check out the action here and let Zero Mark know what you think about his sales ethics.

http://www.youtube.com/watch?v=Rb8Gzx4bqs4&feature=email&email=comment_reply_received

#56 Harlee on 07.06.11 at 11:46 pm

What’s next ?
Having to watch old commercials from The Brick?
(No,please…)

#57 Adam on 07.06.11 at 11:46 pm

Since when can Economists predict anything? Garth is no exception. Where is that crash, melt etc you predicted?

Oh wait, Toronto sales skyrocketed last month you say? Prices too? That’s what I thought.

#58 Bailing in BC on 07.06.11 at 11:50 pm

HA HA!

I will buy a house with nothing down and a 12% mortgage rate! and then you can all kiss my…..

umm.. hang on… how does it work again?

#59 Nostradamus Le Mad Vlad on 07.06.11 at 11:54 pm


“And with what’s coming, expect lots. F is still at work. He recently raised CHMC’s liability limit to match the federal debt – about $600 billion. And most of that portfolio is composed of high-ratio, high-risk loans.”

Ummm, care to elaborate further on what’s coming? Most here are able to see the writing on the wall, but there are plenty of lurkers (not posters) who come here to have their ideas expanded.

Any inside info.? Riots, flag-burnings, etc.? Not that C-H-Zero would welcome you back in caucus!

“. . . and the idiocy of F’s actions, I started this blog. The feds have tried to repair the damage.” — Of their own mistakes, but now with Zero matching CMHC’s debt limits to the feds. debts, they have no responsibility — it’s all on taxpayer’s shoulders.
*
#166 Hoof – Hearted on 07.06.11 at 9:02 pm — ” Vancouver …”

Valid, but interesting way of spelling!
*
Seven Reasons why the US (and Canada) need a depression now; Paying Bills It would be interesting to see if the US is pressuring India not to pay Iran, ‘tho all Iran has to do is shut the oil off; Gold “Bullion Will Now Be Illegal for ALL U.S. Residents.”; Gold Standard? Fuggeddaboud id! Desperate Housewives There’s lots of ’em.

Planetary Catastrophe Trillions needed by way of more taxes; Cdn. Muslim WH infiltrated by Muslim Brotherhood; Long life food No more stale sandwiches! ‘Net Censorship in Canada. inks in. “. . . it is clear that Section 13 has a chilling effect on freedom of expression in Canada.”

White Trash Yessirree, that’s us alrighty then! We have done our darndest to screw up everyone else’s lives, and is another good reason why cycles are shifting into overdrive; Downside of outsourcing. New computer chips made for military didn’t work; Earth Changes Wisdom from the Inuit elders; Expanding Their Horizons Thieves, that is.

#60 ArunPillai on 07.06.11 at 11:54 pm

Just fumbled on this >> Canada’s ‘housing bubble’ deemed close to bursting http://goo.gl/smhY1

#61 hey Mikey the Realtor® on 07.07.11 at 12:01 am

in the spirit of being inclusive, you’re a loser too.

Probably even more so than Smoking Man©

#62 Kevin on 07.07.11 at 12:01 am

Happening down south
Sellers Brace for New Mortgage Caps
http://online.wsj.com/article/SB10001424052702303763404576420101788878440.html?mod=patrick.net#printModeAd

“The new limits will vary widely by location, but will drop to $625,500 in top-tier markets such as New York, Los Angeles and Washington, D.C.”

Imagine what a mortgage cap of 625k would do to Vancouver’s market.

#63 Thetruth on 07.07.11 at 12:06 am

Garth: something for you to read as you always doubted my 555,000 per year number.

as of right now, there are 120,000 temp students in BC and probably twice that amount in temp workers. Almost 8% of population that is not counted.

http://www.vancouversun.com/life/immigrants+Canada+needs+already+here/5056666/story.html

#64 thx Utopia on 07.07.11 at 12:11 am

like someone said recently, thanks for your informed and thoughtful comments. Really appreciate your insight and perspective.

I’ve been on this blog for what seems like forever….and your stuff “stands up to the toughest test, lay it on the table” (props to Stompin’ Tom and his classic ditty, Bud the Spud).

Feelin’ kind of Canadian today…..

#65 Cookie Monster on 07.07.11 at 12:13 am

Never seen anyone so excited over grade 8 math. He’s obviously not an engineer, the ecstasy of Laplace transforms and differential equations would have killed him! Swollen like a dead hippo. Classic.

#66 Sumadartson jr. on 07.07.11 at 12:14 am

Volcano Ash and Radioactive Poisining gonna cause famine and death in Europe, Asia, Africa, South America and USA.

Only safe place left with food and water is Canada.

Is why people coming to Canada.

#67 Sumadartson jr. on 07.07.11 at 12:15 am

Thirty first and Thirty second too.

#68 John Doe on 07.07.11 at 12:21 am

I like the part in which he says “Both these guys are screwed”. It’s the only thing he makes some sense.
This guy is financially illiterate.

#69 Vancouver Shocks on 07.07.11 at 12:23 am

garths blog constantly looks at the 15% of people that bought in between 2009-2011 with little or no money down.

Has every single house in vancouver been bought and sold in the last 5 years? Do you laddies and gentleman have any idea of how much equity is in most peoples home?
Look at our baby boomers, are they going to cry to their friends while on a cruise or yacht about a 20% decrease, 30% decrease?

Everything Garth posts is formatted to his own personal beliefs. and like anyone else in the world, likes to back up their own thoughts by evidence to try and prove their point.

Too bad Garth has been saying a crash is coming for years, just like its too bad people lost everything thinking the world was going to end a few months ago.

A few young virgins losing their thought to be investment with 0% down will be eaten up by buyers who have equity to put into their house.

Look how bad the mosquitos are this year? Constant bites everytime you go outside. What can you do to stop mosquitos put on a spray repellant. Why put repellant on when lots of bits ( lots of buyers ) are out. Because these bloggers are waiting in their basement suites with no mortgage. Have fun making 5% on your $30,000 investments.

#70 D on 07.07.11 at 12:27 am

‘Mark Fudge-it’

#71 The Phantom on 07.07.11 at 12:28 am

Evening All:

While I sense that the end is near, it rather bothers me that the RE in certain places in Canada continue rising without precedent. At the same point in time, I am not particularly eager to see people lose their homes and, as I have mentioned before, I will not be one of those individuals rubbing my hands in glee should families find themselves underwater. I wonder however, how long the prices can continue to rise to stratospheric heights before the proverbial fecal matter hits the fan. I do not subscribe to the fact that interest rates will remain low forever. For my part, as a homeowner, I have a small locked in mortgage at a reasonably low rate of interest for another two years and one month…The money that I hold with the TFSA and cash account are enough to pay the mortgage off outright. The plan is to then re-borrow against the house and invest those funds thereby creating deductible interest and a revenue stream…that is if the house and markets will allow for that in a couple years time…

Night

the Phantom

#72 SophieZombie on 07.07.11 at 12:39 am

Mr. Mortgage, what a great artist you are ! You could have been a board director of the deceased BIM / Business in Motion. http://www.cbc.ca/marketplace/2009/easy_money/main.html

#73 Tony on 07.07.11 at 12:41 am

#21 Pete in Barrie

Foreigners pay big capital gains tax unlike residents of America if there’s a gain. Thank Ronald Reagan and the Japanese who tried to buy up all of Hawaii for that one.

#74 TheFirstRick on 07.07.11 at 12:42 am

While we are on the topic of financial hos and property pimps, whats with all the debt consolidation advertisements lately? I’m particularly disturbed by the ones that make statements suggesting they are somehow government sanctioned and supported? The tone and structure of some of these ads even suggest a news article rather than an advertisement. WTF?

#75 from kits on 07.07.11 at 1:02 am

am I wrong to think that the government should be protecting the property virgins on this?

with muscle bound meat sticks like mark we have no chance…

it’s the US all over again and criminal

#76 from kits on 07.07.11 at 1:07 am

This is for Mikey the realtor… your part of the problem

Are you telling me the curve’s on this chart are sustainable!?!? for anyone who watched silver recently…you’ll know what I’m talking about

http://yattermatters.com/wp/wp-content/images/2011/07/2011-07-01-Average-Price.jpg

#77 Questioning Leverage on 07.07.11 at 1:26 am

Marks F’s central argument is based on the assumption that potential buyers only budget for their current “overhead” (monthly costs). That shows what kind of people he wants to work with.

And it’s also where his argument falls completely apart. He’s essentially arguing that by paying more money to the bank (for no tangible benefit) now, the buyer will be “less screwed” when rates change later.

That seems like an fool’s deal. Logically, you’d be far better off to take the cheaper rate and over contribute the difference. In that approach, you’d have the same interest shock protection, while building your equity faster.

Of course, that approach takes discipline and financial literacy – which is precisely why Mark’s clients are screwed already.

#78 Ravishing rick on 07.07.11 at 1:38 am

Hey Garth,

Last time inflation was at the current level, interest rates were 4x higher. When is that wimp carney going to man up and raise rates?

If you see Carney walking down the street in torono, punch him in the stomach for me.

#79 Showmethemoney on 07.07.11 at 1:43 am

I have been reading this blog for over a year, will there ever be an actual date for the burst, or will it simply not happen, prices just keep rising and rising in yvr. What gives? I’m slowly becoming a “non-believer”…

#80 Observer on 07.07.11 at 1:44 am

Great article once again Garth. I wonder if any of the Canadian leaders you mentioned above have someone close to them living in some of these inflated areas? I wonder if it would be a good idea for some who might not know, to get a first hand sampling of the pain and struggle of a family just trying to make ends meet in an overinflated city, trying to afford a roof over their head, to come and live with an urban family for a while and work through our day to day struggle. Would they be more responsive in policy? Thank you for voicing these truly Canadian issues in a way many in the media have long since abandoned.

#81 Ravishing rick on 07.07.11 at 1:50 am

Oh god i just watched the clip: in summary

Stupid people don’t plan ahead… Therefore be even dumber in the short run than the stupid people and then you might think you are better off, if my un realistic interest rate numbers hold, even though the mathematics proves otherwise.

Hukt oN FonIx wURkt 4 mE!

#82 Across the Pond on 07.07.11 at 1:55 am

My goodness, what a load of old tosh. The only half logical thing that I heard him say was regarding people financially planning based on what they’re spending, and what they’re making and having little regard for the future. Naturally, that is the exact type of clientelle he is looking for.

I wonder where the thousands in saved mortgage payments from years 1-5 disappeared to… Those poor suckers paying down-payments.

And the real gems are on the website!

“In fact, you may have talked with your bank or a real estate agent who told you that you need $10,000, $20,000 or even $25,000 to buy a home.”

I’ll imagine he is deliberately stating very low down-payments as well – not too many houses to go around at $125,000 which your shockingly ‘even $25,000!’ down-payment would cover 20% of…

“Many times, the bigger the down payment and the higher the interest rate, the more money the lender earns.”

So higher interest rate bad? But…but…the video! In fairness he does have a point – many lenders get scared into only offering super high rates when people back their new mortgage with cash…

#83 Jas Girn on 07.07.11 at 2:35 am

That guy in the video is surely nuts. Why would you want to pay a higher monthly payment in the first place anyway? Saving and living within your means is the first thing that people should be doing anyway, so that when SHTF, you are prepared.

I cannot believe he even made a video. WTF. God bless his cunning soul. Lol.

#84 chris on 07.07.11 at 2:47 am

Hey guys, check out what 695k euros (around 900k canadian buys you in Schleswig Holstein Germany in one of the most prestigious areas. In vancouver it gets you a butt ugly teardown in east van.
Oh wait, i forgot Garth, that in not the best place on earth,is it.lol
Ps- it says its negotiable – that means downward and not up.
being a realativelly new comer form old country of Poland i would not dump my hard earned cash at this pompous market if it was the last place on earth.
Good night all.
The end.

http://www.viviun.com/AD-137325/

#85 Beach Girl on 07.07.11 at 3:00 am

Just curious. I own two paid for homes. Have no intention of selling them. They make great rental income. And were bought years ago. But, when and if they do drop in value, will MCAP reduce their evaluations? If they drop 30% will my taxes go down? Great tenants, thanks OW, Ontario does not work. Reliable, steady income and semi-happy campers to boot. Treat people with respect and they will support you.

#86 VanLarry on 07.07.11 at 3:26 am

Videos like that scares the hell out of me.

May as well head down to Edgewater (dinky downtown Casino in Vancouver) and put all your money on red if you’re gonna listen to that guy.

#87 Ben on 07.07.11 at 4:02 am

Canada’s inflation rate is now at its highest point since 2003, yet the Bank of Canada continues to hold the interest rate at 1%. Meanwhile mortgage holders continue to gorge on debt and house prices stay aloft.

#88 nfn_nln on 07.07.11 at 4:37 am

Whenever I fill up at the gas station I always beg the cashier to pay 10% over the actual price. That way I don’t experience the dreaded payment shock when prices go up.

Sometimes the idiot cashier is confused by my financial genius (I guess that is why they aren’t in RE), so I often collect the extra 10% into a pile of paper cash and set it on fire, instead of saving the difference.

#89 Jody on 07.07.11 at 5:23 am

Allright, I’m sorry, but this kind of crap just ticks me off to no end. What exactly do arseholes like F think will happen when the tax payer is kicked in the nuts by the coming wave of defaults? Is he stupid enough to think that the creative class, the group of people who actually produce something are going to stay in this country and be taxed to death? Really? What a muppet. People are very mobile, especially in our part of the world, those of us who didn’t get sucked into buying will up and move. But alas, people like F don’t want that to happen, they’d rather you be a stupid slave on the plantation so you can’t move when your government treats you like a dupe. God forbid all the plantation owners have to start competing with each other to see who treats their slaves the best. Just look at this website being attacked, why? They don’t want you to know, they don’t want you to be aware. It would be interesting to know if any of the attacks game from a government address. Ask yourself why in the hell does Obama need to have an internet kill switch, I mean really? To stop terrorists? Hahahahaah, yea right!

And if you don’t feel like your a slave then just ask a Greek how they feel right about now, they should have boarded up their parliment and burnt all those banker butt kissing scum bags alive.

Somewhere on this planet there will be a government that welcomes newcomers who want to work hard with open arms and low taxes, to bad it won’t be any of the governments in the North, they’re all to full of themselves. I expect South American and SE Asian countries to come up and kick us in the balls soon, and you know what? We deserve it, big time. A couple of good quotes below:

We’re well past this one, hell half of us take and contribute squat.
“When you see that trading is done, not by consent, but by compulsion – when you see that in order to produce, you need to obtain permission from men who produce nothing – when you see that money is flowing to those who deal, not in goods, but in favors – when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you – when you see corruption being rewarded and honesty becoming a self-sacrifice – you may know that your society is doomed.”
Ayn Rand

“Freedom is not empowerment. Empowerment is what the Serbs have in Bosnia. Anybody can grab a gun and be empowered. It’s not entitlement. An entitlement is what people on welfare get, and how free are they? It’s not an endlessly expanding list of rights — the “right” to education, the “right” to health care, the “right” to food and housing. That’s not freedom, that’s dependency. Those aren’t rights, those are rations of slavery — hay and a barn for human cattle. There’s only one basic human right, the right to do as you damn well please. And with it comes the only basic human duty, the duty to take the consequences.”
P. J. O’Rourke

and finally, from one of the founding fathers of the US, who, if he was alive today would be in jail or would be tortured in Gitmo as a terrorist. Think about that for an hour or two, mull it over in your mind. The words of a founding father would be a crime today, wow, we really have given up our liberty, if we even had it in the first place. We’ve become pussies, total pussies.

“God forbid we should ever be twenty years without such a rebellion. The people cannot be all, and always, well informed. The part which is wrong will be discontented, in proportion to the importance of the facts they misconceive. If they remain quiet under such misconceptions, it is lethargy, the forerunner of death to the public liberty. … And what country can preserve its liberties, if its rulers are not warned from time to time, that this people preserve the spirit of resistance? Let them take arms. The remedy is to set them right as to the facts, pardon and pacify them. What signify a few lives lost in a century or two? The tree of liberty must be refreshed from time to time, with the blood of patriots and tyrants. It is its natural manure.”
Thomas Jefferson

#90 Tim on 07.07.11 at 5:53 am

The guy in the video is hilarious, if in 5 years interest goes up a mere 1%, is he living under a rock?? Interest by then will be way higher than 4.5%!!

#91 jerry on 07.07.11 at 6:12 am

Hello Garth:

As you have pointed out earlier, the potential loss of mobility, that is the ability to move to seek employment or take on a better job without the constraints of having to unload an overinflated property seems to be the unappreciated “elephant in the room”.

#92 Nalliah Thayabharan on 07.07.11 at 6:29 am

Home ownership is a priviledge…not a right. In a free market society, we make our own economic decisions of where and what we live in. Quebecers have a preference to rent and house prices are a lot lower in Montreal than the other major cities in Canada. In the past several years we have seen the average price of a home triple and in some cases quadriple. Much of this has been caused by government programs to help the average consumer afford a home. When the government reduced the down payment required, the sellers simply raised the price so the actual cash required stayed the same. When the banks lowered interest rates, again the price of housing increased thereby costing the consumer the same.
The amount of interest paid on a given property will by far exceed the profit made by the home builder. A 25 year amortization will result in paying TWO & A HALF TIMES the Original Price of the Home. Banks essentially shuffle paper and contribute nothing to the economy. Banks essentially create currency out of thin air…..which leads to inflation & bubbles.
Our banks in Canada are not a healthy as one many think. 12 non-US banks, out of 20, received a share of the $600 billion bailout. RBC Capital Markets, LLC was one of them. All of the Canadian banks are up to their eyeballs in toxic assets & derivatives that they simply don’t understand.

#93 Ben on 07.07.11 at 7:04 am

Housing prices: No rebound in sight – CNNMoney

Housing prices are likely to keep falling the rest of this year, and probably won’t show much improvement next year either, according to a survey of economists.

A CNNMoney exclusive survey of 27 economists showed the battered housing market is facing myriad problems and won’t turn around anytime soon.

http://finance.yahoo.com/news/Housing-prices-No-rebound-in-cnnm-2492444364.html?x=0&sec=topStories&pos=5&asset=&ccode=

#94 T.O. Bubble Boy on 07.07.11 at 7:14 am

“In my mind, the zero-down is a much better risk than say a ‘down-payment’ mortgage”

Raise your hand if this is the first time you’ve heard someone describe a “down-payment mortgage” as an actual type of mortgage, like it’s just another one of the many mortgage options out there?

I can just see this guy’s Mortgage 101 class…

“You see – there are 2 types of mortgages: the down payment, and the zero-down. The down payment will lead to ‘payment shock’, because the bank gives you a better rate for not having to borrow the down payment from them and circumvent the Government rules that require you to finance the minimum 5% down on your own. The ‘zero-down’ on the other hand is amazing! Not only do you not need money, but you won’t be fooled into some monthly payment that is lower than the maximum that you qualified for. The banks think that you’re just an idiot who doesn’t want to take the maximum amount of money that you qualify for – but don’t let those tricky banks push you around!”

#95 ottawan on 07.07.11 at 7:20 am

I put every home in my puny district in Ottawa on a work document every day and from my vantage point of district 72 (excluding condos) they are way overpriced. They sit and sit. One dropped their price by $40,000 this week and another dropped by $30,000. These are total drops over about a month for these 2. A lot of other oldies have dropped about $10,000 which hasn’t done the trick in many cases.

#96 househornyhousewife on 07.07.11 at 7:22 am

Garth,

This latest blog was one of the most frightening. As a housebuyer, I am not really concerned because I can afford the 25% downpayment and my mortgage will be a 20 year loan which I will probably pay down much sooner. I am also only going to pay for a house what I can afford and what I consider to be reasonable (which is why I am still on the market after over a year of looking).

However, as a taxpayer and a member of Canadian society, your blog really terrified me. Mainly because it is not unreasonable to assume that many people are not only sitting on huge mortgages that they cannot afford but they are also sitting on huge maxed out credit margins and credit cards that they used to turn their expensive homes into something out of HGTV. As my husband and I have been visiting potential new homes, we could not believe how 99% of them had recently renovated kitchens and bathrooms and neither one of us can figure out how they can afford this … now I know … DEBT.

But Garth, aren’t we blaming the wrong people for this dilemma ? Shouldn’t the buck stop at the consumer ? Sure the government is unscrupulous, sure banks are evil reincarnations beelzebub, and there are many idiots out there with get rich quick schemes to tempt you into ruining your life forever … well DUH !! The world is a cold and lonely place, get over it.

Same goes for the rise in obesity and the diabetes epidemic that is resulting from this. We can either blame MacDonald’s restaurants or we can blame the people who are actually putting the food into their own mouths.

The consumer is the one who is making these unhealthy choices to consume too many fries & soda and use up too many credit cards. The consumer is the one who, despite their financial situation, insists that they can have it all, right away without ever having to work for it. And the consumer is the one who is turning a blind eye to reality. This is why people like Vax Oxlade, Dr. Mehmet Oz and Dr. Phillip McGraw are making money hand over fist trying to help people (while getting good ratings, of course) get their lives under control.

No amount of regulation is going to fix any of this. Only education and a change of core values is going to change our future. Blame parents who give their children everything without them ever having to lift a finger (like cars when they are sixteen and apartments to live in while in university). Blame schools who are allowing children and young people to go on to the next grade even though they are illiterate and cannot think for themselves (I know all about this because I teach at a university). Blame society for making stupid networks like HGTV look glamorous. In addition to blaming government and financial institutions, we also need to blame ourselves.

Our neighbours to the south are already beginning to espouse these new (?) values and in doing so, they will rise from the ashes. We, on the other hand, are still flaunting our precious “things” and turning a blind eye to what they are actually costing us. Who knows, perhaps our American brethren will actually do us a favour by setting an example on how to build a “debt wise” society. Or perhaps we need to learn by going through it ourselves. You remember how you were as a teenager don’t you ? Risk taking behaviour which results in tragedy simply doesn’t happen to you but to someone else.

Anyway, that’s my ten cents.

HHHW

#97 Mike Rotch on 07.07.11 at 7:29 am

@ 21 Pete and 46 Calgary:

I was last in Florida in Dec. 2008. Stayed near Daytona in a gorgeous ocean side three bedroom condo, 1400 sq ft or so.

Times looked tough:

-Dead. I know it’s a slow time of year, but there was not a soul in any of the condo buildings near us. These were vacation homes and investments, no one was actually living here.

-lots of elderly people working low wage service jobs (and not looking like they just wanted to get out of the house and earn pocket money to support a golf habit).

-Construction stalled on a few half-finished oceanside condos.

-For sale signs everywhere. Nice looking $200K units that apparently would have fetched $600K ish at the peak.

-Loser time share pitchmen reduced to offering far more than a free night and use of facilities. When I turned down the first offer of $100 cash, I was then offered $200! Tempting, had I not had my young family in tow and en-route to a day at the beach……

-All this, and you’d have to be a moron to take the plunge and buy. Scanning the papers, decent looking 1 bedroom oceanside for $600 per month, 2 bedrooms for $900, and so on. In some developments in some of those East coast towns, even if you had to sign a 12 mo. lease, for a considerably shorter stay, you might still win vs. CITY TAXES + CONDO FEES!!!

While the prices look great compared to what some fools bought at, I still wouldn’t touch it.

#98 fancy_pants on 07.07.11 at 7:35 am

go to the BofC website and their mission is presented right on the homepage:

Canada’s central bank.We work to preserve the value of money by keeping inflation low

prove it. The value of money certainly can’t buy you a shelter like it used to. It can’t buy you groceries like it used to. It can’t buy you gasoline like it used to… etc.

Typical bureaucracy. They exist to lecture and wag fingers at the “disobedient” while indirectly encouraging such behaviour with their carrots.

#99 TurnerNation on 07.07.11 at 7:43 am

If would be funny if F #1 increased bank reserve requirements in-line with some sort of new global requirement, and then banks are forced to call-in 10% of their loans. That would bankrupt about 20% of the population.

Would our elite robberbarrons every do such a thing, an engineered crisis? :twisted: :twisted:

#100 Herb on 07.07.11 at 7:56 am

#87 Beach Girl,

if your two properties are the only properties in your municipality to drop in value, your property taxes indeed would go down.

However, if they are part of an overall drop in values in the municipality, your taxes would stay the same because the city fathers merely would increase the tax (mill) rate to meet their budget.

#101 cata on 07.07.11 at 8:07 am

#12 cata on 07.06.11 at 9:24 pm

“A 250,000 mortgage????…. what are you buying? A parking spot in Toronto??”
———————————————————————-

Honest to God. Some of you borrowers are so screwed it is not even funny anymore. Don’t you even understand how ridiculous even 250K of debt sounds to me?

Even the people on this site are debt delusional. Wake up!
__________________________________________

actually, I was sarcastic in my commnets!

#102 Mr Buyer on 07.07.11 at 8:44 am

#98 househornyhousewife…I believe you are comparing apples and oranges. Some of the people that bought into this mess did so at such huge prices because no one would sell at a reasonable price when everyone was running to the bank for larger and larger loans. Yes they could have chosen not to buy at this time but shelter is a necessity while eating at Micky D’s and lying around all day is not. We need places to live. There is no excuse for the bubble our government has created. There are laws against heroine distribution and use for a good reason. The basic necessity of shelter coupled with the mismanagement of CMHC by our government are two MAJOR factors contributing to this epic bubble. People need to be sent to prison for long periods of time for what they have caused even if it was due simply to gross incompetence never mind if it was premeditated (accountability contributes to competence and may lead further up the food chain). Families and children will be adversely impacted for extended periods because of this (to put it mildly). This bubble needs to be analysed, dissected and presented to the people of Canada in order to ensure our descendants will not be subjected to it again. I think criminal negligence charges must be promised to be laid against the bubble architects (all of them) by the next political party seeking office (they are playing hardball with us so why not, I mean really doubled house prices in the absence of decent paying jobs). Yes people are responsible for their part and they will be paying with their way of life and that of their children. While they are paying this price I hope they come to the realization that they can bring the others responsible parties to justice.

#103 refinow on 07.07.11 at 8:58 am

Hey isn’t he the same guy who did the “SLAP CHOP” commercial ?? …

#104 T.O. Bubble Boy on 07.07.11 at 9:08 am

European Central Bank raises rates again… Mr. Carney, can you match?

http://www.reuters.com/article/2011/07/07/us-ecb-rates-text-idUSTRE7662WZ20110707

#105 TS on 07.07.11 at 9:14 am

Mr. Fidgett is a fine example of H and F’s social darwinism beliefs. I bet they are quite proud of him.
Mr. Fidgetts naive and simple clients are going to be hurt bad one day. It is also a sad example of the professional mortgage broker organization that allows these predatory practices. I guess it is just a sign of these immoral times. I suspect this guy is in cahoots with Van City.
Lots of trickery in the financial world brought to you courtesy of CMHC and ultimately the Canadian taxpayer…
Here is another nice CMHC credit risk problem courtesy of Mr. Fidgett.

Q: My friend just bought a rental property in Vancouver and she bought it with only five per cent down. How did she do that when CMHC changed the rules earlier requiring 20% down?

A: Although CMHC will only finance a rental property with 20 per cent down, they’ll still finance a “second home” with as little as five per cent down!

So what constitutes a 2nd home?

http://www.notapennydown.com/blog/a-second-home-with-only-5-down-hows-that-possible-vancouver/

The CMHC organization just loves to take big time risks… They are real players with someone elses money.

#106 Beach Girl on 07.07.11 at 9:29 am

#102 Encouraging Herb, about the mill rates.
# 98 I am in agreement with househornyhousewife who teaches at University, blame parents and schools for rewarding dismal efforts. Like when the two idiots were in mind-numbing sports. And no one kept score. What was that all about. Building self-esteem? Means do not bother trying, you do not have to.

#107 Utopia on 07.07.11 at 9:42 am

“In many of Canada’s regional markets, we saw house prices appreciate at a significantly faster rate than wages and salaries, and this trend cannot continue indefinitely,” said Phil Soper, chief executive officer.”~~ Phil Soper
———————————————-
So did Phil just take a reality pill or something? He has honest to God called the market top (or at least suggested it has arrived). This would normally be welcome news but I really wish his industry had been more forthcoming earlier while the problems were clearly in the process of developing. I wish he had been more forthright instead of sticking with the whole “balanced market” commentary for so long that deluded buyers into thinking everything was OK when it clearly was not. With luck the message will get through, if not to the general public, then to those builders and speculators who stand to lose their shirts if they ignore a developing trend. A trend that can only lead to falling prices.
————————————————————————————
#66 thx Utopia on 07.07.11 at 12:11 am

“Like someone said recently, thanks for your informed and thoughtful comments. Really appreciate your insight and perspective.”

That was a really great compliment. Thank you.
—————————————————————————–
#104 Cata : My apologies if I misunderstood you. It really is hard to catch the tone of sarcasm in the writing of others. It happens to me all the time. I know what I intend to convey but others will read a different tone into my remarks that I had not predicted. Cursing a lot seems to help clarify a position. Everyone “gets” that.

#108 debtified on 07.07.11 at 9:42 am

Garth says: “In early 2008, seeing the damage to affordability, the rise of house porn and the idiocy of F’s actions, I started this blog.”

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

In not so distant future, seeing the damage in our society, the fall of the middle class and the [INSERT NEW WORD HERE] of H’s, F’s and C’s actions, I would like to see all concerned Canadians citizens to exhaust all avenues possible to ensure that history will remember what these three clowns have done to our country.

I would like to see print media (books, newspaper, etc..) and electornic media (blogs, wekipedia, etc..) to document all of what H, F and C have done to ruin our country for all generations to learn from.

I am so pissed off that I will never forget. Who’s with me?

#109 househornyhousewife on 07.07.11 at 9:43 am

#103 Mr Buyer

I disagree. Yes people need a roof over their heads but people also need to eat in order to live. No one is forcing them to purchase a home that is way beyond their financial means just as no one is forcing them to eat big macs and fries (I never said anything about them lying around all day so I don’t know where that comes from .. I guess you are equating an unhealthy diet with laziness .. your statement not mine).

Instead of waiting for a bank or a government to tell you what you can or cannot have, it should be our own wisdom that keeps us from physical and financial ruin. If when real estate was going up, people simply refused to take out those easy loans with nothing down, opting instead to rent or to relocate (if possible) or even to move in with their parents if they had to, the bubble would have stopped right then and there.

I don’t disagree that the government and our financial institutions are unscrupulous and greedy loan sharks. We both agree on that. However, I think we need to take a share of this responsibility and begin to realize that just because someone is wearing a suit and has a few letters after his or her name, it does not mean that we should follow blindly what they say. People have to start to think for themselves and do what is right for them and not what HGTV or the bank manager or some stupid real estate agent tells them to do (believe me, my RE agent has come up with a few doozies and she is one of the good ones). Ultimately it is the consumer who will be stuck with the consequences .. be it having to claim bankruptcy or dying at the age of 50 from some obesity related illness.

Blind overconsumption is dangerous no matter what is being consumed, an expensive property, an unhealthy meal, too many over the counter meds, or whatever.

HHHW

#110 malbadon on 07.07.11 at 9:45 am

The logic leap there blows my mind…. I’m sorry, so Mr. 0 down paying at 5.39 percent is somehow going to be living in a world 5 years from now with an interest rate 1% lower?
Yes, there’s something you can totally count on.

#111 Utopia on 07.07.11 at 10:00 am

#98 househorneyhousewife said…..

“Same goes for the rise in obesity and the diabetes epidemic that is resulting from this. We can either blame MacDonald’s restaurants or we can blame the people who are actually putting the food into their own mouths”
—————————————-

Terrific comments. You are one smart wife and your husband is a lucky guy. I am really bothered by the blame game too. Seems that too few want to accept responsibility for their own decisions anymore. Especially when things turn sour. No wonder there are so many lawyers working overtime to sort out reality.

#112 UVZ on 07.07.11 at 10:32 am

#28 Mark

[Thank you Mr. Turner for saying it: Canada does have subprime mortgages]

In follow up to one of your previous posts, Canada also does have mortgage-backed securities. Specifically mortgage-backed securities backed up by the CMHC.

#113 Dave on 07.07.11 at 10:37 am

In response to Comment #9 from ‘garrulous squirrel’, which stated, “USD 360 Billion in shady loans has ‘disappeared ‘ from Chinese banks. Any wonder why the Van ( Rat ) Couver real estate market has gone wild?”
http://money.msn.com/top-stocks/post.aspx?post=ac207e22-7c8a-4367-8b74-2329ff9a6d7a

With all due respect, I don’t believe this is an accurate interpretation of what was reported in the referenced article. The money has not “disappeared” from China’s banks. Rather, the article stated that roughly $540 billion in loans were not included in the government audit of loans, “because they weren’t properly underwritten and thus couldn’t be classified as government loans.” So it’s incorrect to imply that this money is somehow missing. It’s accounted for, but is at a higher risk of default due to sloppy lending practices.

I am by no means diminishing the seriousness of this finding. It suggests that the rate of non-performing loans in Chinese banks will be higher than previously expected. This has become a concern for institional funds with large investments in these banks. It also raises concerns about the soundness of China’s banking system. However, it has very little to do with the price of real estate in Vancouver.

#114 biil c on 07.07.11 at 10:38 am

GREAT CAESARS GHOST! Royal lepage says real estate prices have peaked. They say high prices cannot continue and likely slowdown. A Real Estate Company?
Do my eyes deceive me or are they protecting their buttocks. Here is the numbers that no one is telling you.
June numbers that came out are properties that sold in past 90 to 120 days. Spring market. Only problem is pending sales have fallen off the cliff. they have these numbers but wont disclose them. The numbers of sales you will see in next few months will be alarming. Dreadful. So dont think Royal lepage doesnt know. They have the numbers and this makes them look good.
Sales will fall 30 to 40 % in next 90 days. Its that bad.

#115 Utopia on 07.07.11 at 10:43 am

#57 Duke……

“…..even more important than negative equity is “affordability” ~~Zero Mark”
——————————————————————

OK, now I get it. Mark rationalizes that it is OK to have negative equity (lose money or wealth) as long as you can afford the payments. So buying overpriced homes is just fine if the monthly is within your income range. No problem.

Just buy the damn house kids. It will only feel like a life sentence when you wind up paying a 30% premium over market averages for your coveted nest.

No wonder we are in the housing pickle we are in.

Mark is making the classic mistake of rationalizing affordability based on interest rates and income while ignoring sticker price and future risk.

Like Mark Carney said, asset prices rise and fall, but debt endures. Clearly, price matters as it is not variable, unlike factors such as mood, sentiment, politics, interest rates and economic forces that can all weigh on asset values (and lower them despite your best laid plans).

Zero Mark gets a fail.

#116 Mr Buyer on 07.07.11 at 10:52 am

#113 househornyhousewife…so you are saying that our government is in no way responsible for this housing bubble.

#117 Mr Buyer on 07.07.11 at 11:02 am

#113 househornyhousewife…the government is not our baby sitter and we as adults are free to indulge or not at our own discretion. Why then are we not allowed to indulge in narcotics at our own discretion and how is that different (if we can compare apples and oranges why not. eating and shelter equate, why not chemicals, fear and lust). I have heard the well worn, people are free and the government is not their babysitter, and it is quite tiresome. If the government does not have the power to induce people to buy than what was the point of the rate adjustments and modified mortgage terms in the first place. You can not have it both ways. Your line of reasoning does not resonate with me at all…

#118 RG on 07.07.11 at 11:13 am

I think that Mr. Mortgage took his math lessons from Ma & Pa Kettle

http://www.youtube.com/watch?v=Bfq5kju627c

#119 abc on 07.07.11 at 11:21 am

Above video shows the stupidest ever.
becuase you pay more evry month you could feel better off??
Why don you pay $2000/month and give the $500 to me.. so you could fell better off even tough the interest raised to 7%….really stupid analogy

#120 Mr Buyer on 07.07.11 at 11:25 am

Not acknowledging that people can be influenced and the degree of influence people that set rules have is at best not a clear appraisal of reality. Yes people have choices without a doubt but they also have limitations. Reason must contend with emotion. Exploitation is real and I am left wondering why people are reluctant to acknowledge it. Good schools, safe neighborhoods, these are not only desirable but impact the probability of children excelling. These are primal motivations among others behind acquiring appropriate shelter. Sure people can chose to wait to buy, but children do not wait to grow up and form views based upon their surroundings. No, I am sorry but your rational is incomplete in my mind and I stand by my assertion that a reckoning is in order. Whining, blaming, call it what you will, I call it accountability. If the buyers are accountable then so to are the lenders, after all they did not have to lend the money, or is it “everyone is equal, some are more equal than others”

#121 garrulous squirrel on 07.07.11 at 11:39 am

Of course Canada has been issuing sub prime loans. What do you think ‘cash back’ mortgages are? Zero down……..is 5% and 10% cash back in the form of a HELOC that not only pimps the downpayment it lets the borrower dive even farther into debt by putting a brand new SUV in the driveway. Have anyone been to the ‘burbs’ lately? BTW….all these ‘equity rich’ new owners are the same ones who are sending their kids to school without breakfast or lunch…..and……keeping their appointment at the foodbank after work.

Now…with respect to

http://www.theglobeandmail.com/report-on-business/economy/housing/house-prices-may-have-hit-the-top/article2089425/

House prices haven’t peaked by a long shot. This current wave of articles is just window dressing by the industry. Prices will not do anything but go up as long as the ’emergency intrest rate program’ is still in full swing.

You can bet that it won’t have any effect on the crooks coming out of China with gobs of stolen cash to launder in Van ( RAT) Couver.

#122 Jay on 07.07.11 at 11:41 am

that reminds me of this video.

http://www.youtube.com/watch?v=Bfq5kju627c

#123 Daisy Mae on 07.07.11 at 11:46 am

“That your country created it? No surprise there, either.”

Nope. No surprise. Can’t tell you how disgusted I am presently, with all levels of government — everywhere. Wow! Such idiocy.

#124 Mr. Lahey on 07.07.11 at 11:50 am

Randy, we may have our problems in the park but at least our trailer is paid for in full. The real whackos are those who have loaded up on debt at artificially low rates. The economic shit hawks are going to wipe them right out Randy. Now let’s go see what Ricky is up to…

#125 NorthOf49 on 07.07.11 at 11:50 am

No surprise that the RE hucksters are coming out of the woodwork, or that sales and prices are increasing beyond expectations. All bubbles end with a final hyperbolic phase, then capitulate rapidly. I have no reason to believe Canada’s RE bubble will end any differently. You can never discount irrational human behavior when the herd mentality is in full swing in the face of contrary indicators. I’m witnessing it personally. My wife nephew and new wife rushed out to buy their first house in south Hamilton Mountain. Prices are still too high in that area and lots of builder inventory available. Some lots not touched for years. I told them to wait a year or two as Hamilton’s economy is stagnant and not expected to grow for year. Prices are only starting to come down now. They are both recent engineering grads and you would think they listen to logic, but the pressure from both sets of parents (Italian) is to buy now, never rent. Also, in my little nook of Ancaster, there’s an actual flip happening with a house on my street. Purchased a couple of months ago, the house is back on the market after some fast cosmetic work performed. Open house is this weekend. Gonna pop by and ask the agent what the deal is. Should be interesting. If it sells fast, then its just another indicator that this bubble ain’t close to bursting yet. However, given that it takes months for houses to sell in this neighbourhood, this thing may be a bust for the spec flippers. I’ll post an update after this weekend.

#126 TS on 07.07.11 at 11:53 am

More Canadians Planning to Buy First Home Survey
A survey conducted by Genworth Financial and the Canadian Association of Credit Counselling Services
With a renewed feeling of financial confidence, more Canadians are planning to take the plunge into homeownership in the next two years. According to a poll sponsored by Genworth Financial Mortgage Insurance Company Canada (“Genworth Financial Canada”) in collaboration with the Canadian Association of Credit Counselling Services (“CACCS”) there has been a significant increase in the number of people planning to purchase their first home, moving from six per cent in 2010 to 11 per cent in 2011.

http://www.cnw.ca/en/releases/archive/July2011/07/c3801.html

I love the language used “more Canadians are planning to take the PLUNGE into homeownership in the next two years.”
I presume the Credit Counselling Service people are supporting this survey with the hope of generating future business.

#127 disciple on 07.07.11 at 12:00 pm

There are some really bright, articulate and hysterically funny bloggers here, but I see also there is so much confusion on this blog pertaining to why people have bought these ridiculously overvalued homes in the past few years. Are they really that stupid? No, instead, I think they have been willfully mislead.

Most of you here I assume are boomers, or over 40 Gen Xers. (I know, I know, there are some younger ones here lurking and sometimes posting), but I don’t think any of you who regularly leave comments have bought in the last few years and are instead sitting on paid for, or almost paid for houses.

If this is the case, you cannot blame the younger generation for wanting a piece of the good life by buying a home. Isn’t that what you did? Of course, the prices were reasonable and good paying jobs were plentiful, which is in absolute contrast to the situation now, but why blame young couples or families for wanting to start off their lives in a natural and routine way by purchasing their own homes?

A horrific collapse is imminent and it will not spare you boomers and Gen Xers. Garth made it pretty clear in previous posts that many Americans were just faithfully paying their payments and bills, had not borrowed too much, were living within their means, and still they are victims. Did you not get that? It is a failure of leadership. Stop blaming the victims. I guess you will see it differently once you are caught in the cross-hairs.

#128 Dr. WAYNE on 07.07.11 at 12:02 pm

Mr. Fidgett is so full of sh++ his eyes are brown … pathetic.

#129 Devore on 07.07.11 at 12:06 pm

#34 Joe

Although it is hard to follow his logic, the higher payment comes from a higher interest rate? So when rates rise by 1% in 5 years (haha) there’s no “payment shock”, and this makes paying more money in interest better. Because I’m sure it’s a huge surprise to home owners that their mortgage is up. One day they just get a call from the bank, and they’re like, oh noez! what now?

It takes some twisted logic to make paying higher interest rate on a larger amortized amount look better than paying lower interest on exact same purchase.

Must make sense to people with no money I guess, that is why they have no money?

#130 totalchaos on 07.07.11 at 12:23 pm

#71 I know many people who bought their first home around when we did – almost 20 years ago. Most of these people have a bigger mortgage now than they did back then! Sure they have granite and S/S, fancy cars and great holidays under their belts, but some of them have sleepless nights at the thought of one of them losing a job. One friend gets anxious when his wife is unable to pick up an overtime shift!

Anyone thinking that most people won’t be affected by a 20-30% decline is dreaming. If you are 80 years old with a pension, you may not be worried, but I bet your kids are because they are counting on your money for THEIR retirement.

#131 Kevin on 07.07.11 at 12:23 pm

@househornyhousewife

“I think we need to take a share of this responsibility and begin to realize that just because someone is wearing a suit and has a few letters after his or her name, it does not mean that we should follow blindly what they say. People have to start to think for themselves and do what is right for them and not what HGTV or the bank manager or some stupid real estate agent tells them to do”

But to what degree should we require people to suffer the consequences of their mistakes?

The problem is, everybody already knows that trans fats and fast food and donuts will make you fat. So people who indulge anyway and end up fat simply reap the consequences of an informed choice.

But can you honestly say that the people stuck in the housing mess were equally well-informed? You say they shouldn’t have listened to the experts on TV or the expert at the bank or the expert real estate agent – then who SHOULD they have listened to? All those “experts” were saying the same thing – why should the homebuyer have had any reason to doubt them? If the “Speed” network and Car & Driver magazine and my brother and my mechanic all tell me that Toyotas are a reliable car, should I really be expected to ignore their opinions and do my own tests of all the brands? When the gas pedal sticks and I plow into a brick wall, am I rightfully to blame for believing everyone who told me Toyotas were safe, reliable cars? Will you wag your finger at me and scold me for not duplicating the work of all the “expert” organizations that have already tested all makes and models of cars?

That’s really the dilemma, isn’t it. The people were blindly led into a situation that some of us (through luck or genius, though if you ask around it’s 99% genius) dodged, and will now be expected to save them from. We don’t deny cancer surgery to a 40-year smoker. We don’t deny brain surgery to the motorcyclist who refused to wear a helmet. And those people KNEW the risks! So on what grounds can we justifiably deny a bailout to the wave of homeowners who will find themselves underwater and facing foreclosure a few years hence?

#132 bill on 07.07.11 at 12:26 pm

”Look at our baby boomers, are they going to cry to their friends while on a cruise or yacht about a 20% decrease, 30% decrease”

yeah they will cry. it seems they used the house to support a lifestyle and became deeply indebted…which they haven’t paid off and their primary asset, indeed their only asset in many cases is losing its value.

#133 Mark Fidgett on 07.07.11 at 12:28 pm

My first thought is, you bit ;)
My second thought is that you may have missed my point. You are ABSOLuTELY correct, it Would be much safer with a requirement of 20% or more down. That being said, you’ll agree with me when I say, that’s not the rule now.
My main point was, I don’t believe that just because this new rule change requiring a 5% variable client to qualify on a fixed 5 year, makes it so much safer than say a zero down client who not only has to qualify on a posted, but he gets that payment for 5 years.
The video was a lash out at the policy makers. At no time would I say a zero down is better than a 5% down.
Would love to chat further as I am posting this from my favorite coffe shop on Vancouver Thomas Haas. Hope to chat soon :)

#134 jess on 07.07.11 at 12:34 pm

real estate agents like to sell /highlight neighbourhoods that have high functioning local schools with high test scores…

a state investigation found:

At least 178 teachers and principals in Atlanta Public Schools cheated to raise student scores on high-stakes standardized tests, according to a report from the Georgia Bureau of Investigation.(44 schools)

Teachers were reportedly found to be erasing and changing tests after the students had submitted their answers. The intense focus on test scores, as well as unrealistic expectations, is already being cited as a primary incentive for teachers and administrators to resort to cheating. Disturbingly, however, the state investigation found a culture of retaliation and silencing within the schools.

According to the Christian Science Monitor, the district repeatedly failed to investigate allegations that cheating was happening, and employees who complained were simply labeled as “disgruntled.” One principal went so far as to open an ethics investigation against a whistleblower.

======

Read more: http://www.care2.com/causes/systematic-cheating-found-in-atlantas-public-schools.html#ixzz1RRIc1TNN

=

…55,000-student Atlanta public school system rose in national prominence during the 2000s, as test scores steadily rose and the district received notice and funding from the Broad Foundation and the Gates Foundation. But behind that rise, the state found, were teachers and principals in 44 schools erasing and changing test answers.

One of the most troubling aspects of the Atlanta cheating scandal, says the report, is that the district repeatedly refused to properly investigate or take responsibility for the cheating. Moreover, the central office told some principals not to cooperate with investigators. In one case, an administrator instructed employees to tell investigators to “go to hell.” When teachers tried to alert authorities, they were labeled “disgruntled.” One principal opened an ethics investigation against a whistle-blower.

http://www.csmonitor.com/USA/Education/2011/0705/America-s-biggest-teacher-and-principal-cheating-scandal-unfolds-in-Atlanta

#135 Dad on 07.07.11 at 12:35 pm

Son I just wanted you to make sure you read this before heading off to work at Starbucks.

http://www.bbc.co.uk/news/business-14061912

ECB interest rates are going up.

#136 Devore on 07.07.11 at 12:43 pm

#77 from kits

am I wrong to think that the government should be protecting the property virgins on this?

All government needs to do is shut down the CMHC. People will protect themselves when banks start charging market interest rates on highly leveraged depreciating asset purchases and won’t even give you the time of day unless you have 25% down.

#137 disciple on 07.07.11 at 12:54 pm

#133 Devore…

I guess you haven’t seen his video on “2nd mortgages”. It’s on his site that Garth linked in the blog post above. I sat dumbfounded and couldn’t believe he admitted to suckering older people with loads of equity into parting with it by becoming the bank, so to speak, loaning it out to others, hoping that they will default on payments.

The whole scheme depends on house prices forever increasing.

Which leads me to ask: what caused them to start skyrocketing in the first place? I mean, what exactly, and where, and how did this happen? I think it was maybe each time there was a new subdivision put up, the builders would arbitrarily increase the prices, but I’m not really sure. Any thoughts?

#138 MadMan on 07.07.11 at 1:09 pm

Clearly the cult of victimization appeals to some of the readers of this blog. However, the blog is called The Greater Fool for a reason. Sure the government and the MSM are complicit, but ultimately it’s personal greed and laziness that made so many people vulnerable to the lies.

Call me deluded, but even though I bought my house in the 90’s, I couldn’t ever imagine allowing myself to be sucked into something costing over 5 times my annual salary either then or now.

#139 pessimist on 07.07.11 at 1:29 pm

#87 Beach Girl

Just curious. I own two paid for homes. Have no intention of selling them. They make great rental income. And were bought years ago. But, when and if they do drop in value, will MCAP reduce their evaluations? If they drop 30% will my taxes go down? Great tenants, thanks OW, Ontario does not work. Reliable, steady income and semi-happy campers to boot. Treat people with respect and they will support you.

Good luck having MCAP reassess. They will fight you tooth and nail the whole way. Basically, the only thing that would make it any easier is if you had currently bought the properties in an arm’s length transaction at a value that is less than the assessed value. And even if you were successful, the next year they will slap you with higher than average rate increases to get you back up anyway.

The process is much better than it used to be, but it is still an uphill climb if you already own the property.

As Herb mentioned, if all houses uniformly decline in assessment, you taxes will not change at all. That’s because your local municipality states how much money they will get from property taxes. Your mil rate is determined by their tax needs divided by the total value of the assessed properties.

This is a long way around saying that if everyone’s property drops by X%, the mil rate will increase by X% (approximately – it will actually be 100 / (100 – X)%), so that the property taxes owed on every property is precisely the same.

You don’t actually believe that the municipalities will actually tighten their belts do you?

#140 Cookie Monster on 07.07.11 at 1:35 pm

#91 Jody on 07.07.11 at 5:23 am
Nice post Jody, always love reading good ol’ Ayn Rand and Thomas Jefferson. True libertarians. See below the declaration of independence was also predominately written by TJ and indeed the parallels to big government today are disturbing. I watched a few Julian Assange videos yesterday via democracy now website which were also very interesting.
Time has come for a new Revolution!

IN CONGRESS, JULY 4, 1776

The unanimous Declaration of the thirteen united States of America

When in the Course of human events it becomes necessary for one people to dissolve the political bands which have connected them with another and to assume among the powers of the earth, the separate and equal station to which the Laws of Nature and of Nature’s God entitle them, a decent respect to the opinions of mankind requires that they should declare the causes which impel them to the separation.

We hold these truths to be self-evident, that all men are created equal, that they are endowed by their Creator with certain unalienable Rights, that among these are Life, Liberty and the pursuit of Happiness. — That to secure these rights, Governments are instituted among Men, deriving their just powers from the consent of the governed, — That whenever any Form of Government becomes destructive of these ends, it is the Right of the People to alter or to abolish it, and to institute new Government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their Safety and Happiness. Prudence, indeed, will dictate that Governments long established should not be changed for light and transient causes; and accordingly all experience hath shewn that mankind are more disposed to suffer, while evils are sufferable than to right themselves by abolishing the forms to which they are accustomed. But when a long train of abuses and usurpations, pursuing invariably the same Object evinces a design to reduce them under absolute Despotism, it is their right, it is their duty, to throw off such Government, and to provide new Guards for their future security. — Such has been the patient sufferance of these Colonies; and such is now the necessity which constrains them to alter their former Systems of Government. The history of the present King of Great Britain is a history of repeated injuries and usurpations, all having in direct object the establishment of an absolute Tyranny over these States. To prove this, let Facts be submitted to a candid world.

He has refused his Assent to Laws, the most wholesome and necessary for the public good.

He has forbidden his Governors to pass Laws of immediate and pressing importance, unless suspended in their operation till his Assent should be obtained; and when so suspended, he has utterly neglected to attend to them.

He has refused to pass other Laws for the accommodation of large districts of people, unless those people would relinquish the right of Representation in the Legislature, a right inestimable to them and formidable to tyrants only.

He has called together legislative bodies at places unusual, uncomfortable, and distant from the depository of their Public Records, for the sole purpose of fatiguing them into compliance with his measures.

He has dissolved Representative Houses repeatedly, for opposing with manly firmness his invasions on the rights of the people.

He has refused for a long time, after such dissolutions, to cause others to be elected, whereby the Legislative Powers, incapable of Annihilation, have returned to the People at large for their exercise; the State remaining in the mean time exposed to all the dangers of invasion from without, and convulsions within.

He has endeavoured to prevent the population of these States; for that purpose obstructing the Laws for Naturalization of Foreigners; refusing to pass others to encourage their migrations hither, and raising the conditions of new Appropriations of Lands.

He has obstructed the Administration of Justice by refusing his Assent to Laws for establishing Judiciary Powers.

He has made Judges dependent on his Will alone for the tenure of their offices, and the amount and payment of their salaries.

He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people and eat out their substance.

He has kept among us, in times of peace, Standing Armies without the Consent of our legislatures.

He has affected to render the Military independent of and superior to the Civil Power.

He has combined with others to subject us to a jurisdiction foreign to our constitution, and unacknowledged by our laws; giving his Assent to their Acts of pretended Legislation:

For quartering large bodies of armed troops among us:

For protecting them, by a mock Trial from punishment for any Murders which they should commit on the Inhabitants of these States:

For cutting off our Trade with all parts of the world:

For imposing Taxes on us without our Consent:

For depriving us in many cases, of the benefit of Trial by Jury:

For transporting us beyond Seas to be tried for pretended offences:

For abolishing the free System of English Laws in a neighbouring Province, establishing therein an Arbitrary government, and enlarging its Boundaries so as to render it at once an example and fit instrument for introducing the same absolute rule into these Colonies

For taking away our Charters, abolishing our most valuable Laws and altering fundamentally the Forms of our Governments:

For suspending our own Legislatures, and declaring themselves invested with power to legislate for us in all cases whatsoever.

He has abdicated Government here, by declaring us out of his Protection and waging War against us.

He has plundered our seas, ravaged our coasts, burnt our towns, and destroyed the lives of our people.

He is at this time transporting large Armies of foreign Mercenaries to compleat the works of death, desolation, and tyranny, already begun with circumstances of Cruelty & Perfidy scarcely paralleled in the most barbarous ages, and totally unworthy the Head of a civilized nation.

He has constrained our fellow Citizens taken Captive on the high Seas to bear Arms against their Country, to become the executioners of their friends and Brethren, or to fall themselves by their Hands.

He has excited domestic insurrections amongst us, and has endeavoured to bring on the inhabitants of our frontiers, the merciless Indian Savages whose known rule of warfare, is an undistinguished destruction of all ages, sexes and conditions.

In every stage of these Oppressions We have Petitioned for Redress in the most humble terms: Our repeated Petitions have been answered only by repeated injury. A Prince, whose character is thus marked by every act which may define a Tyrant, is unfit to be the ruler of a free people.

Nor have We been wanting in attentions to our British brethren. We have warned them from time to time of attempts by their legislature to extend an unwarrantable jurisdiction over us. We have reminded them of the circumstances of our emigration and settlement here. We have appealed to their native justice and magnanimity, and we have conjured them by the ties of our common kindred to disavow these usurpations, which would inevitably interrupt our connections and correspondence. They too have been deaf to the voice of justice and of consanguinity. We must, therefore, acquiesce in the necessity, which denounces our Separation, and hold them, as we hold the rest of mankind, Enemies in War, in Peace Friends.

We, therefore, the Representatives of the united States of America, in General Congress, Assembled, appealing to the Supreme Judge of the world for the rectitude of our intentions, do, in the Name, and by Authority of the good People of these Colonies, solemnly publish and declare, That these united Colonies are, and of Right ought to be Free and Independent States, that they are Absolved from all Allegiance to the British Crown, and that all political connection between them and the State of Great Britain, is and ought to be totally dissolved; and that as Free and Independent States, they have full Power to levy War, conclude Peace, contract Alliances, establish Commerce, and to do all other Acts and Things which Independent States may of right do. — And for the support of this Declaration, with a firm reliance on the protection of Divine Providence, we mutually pledge to each other our Lives, our Fortunes, and our sacred Honor.

#141 Beach Girl on 07.07.11 at 1:38 pm

People who say they do not care about money, usually do not have any. Lend them more. But, I agree that the young of today, have it much harder, job wise and the chance of owning a home. I am a lucky boomer. Demograhics. I really do not think I could have accomplished as much in this economic environment. You nearly have to be a brain surgeon to get the most basic of jobs out there.

#142 Sumadartson jr. on 07.07.11 at 1:47 pm

Chris #86

Owner of German home is selling because Europe is going into a repeat French Revolution, Drought/Depression from Iceland Volcanoe Ash.
He already bought home in Vancouver too.

#143 CanadaHatesSavers on 07.07.11 at 1:59 pm

Despite the adverse savings environment, 70pc of Britons are savers; they may also have mortgages, but they are making an effort to provide for their future. So why, if savers are such a massive constituency, are the needs of borrowers always given preference?
Why should it be savers who have to prop up the economy, to rescue others from their reckless and imprudent behaviour?

http://www.telegraph.co.uk/finance/personalfinance/savings/8622792/Savers-need-to-be-encouraged-not-driven-to-extinction.html

British article but just as relevant here in Canada….Mr Carney are you listening? If not, you should be!

#144 Kitchener1 on 07.07.11 at 2:07 pm

#118 biil c on 07.07.11 at 10:38 am

Garth or anyone else in the know, can you guys comment on this?

Are the monthly sales reports stating actual sales that happened in that month or, do the sales get counted once the deal is closed?

if i sell a home in July with 60 day closing, does that get counted as a July sale or a Septemeber (60 day closing) sale?

If its actual sales that month, what happens when the deals fall apart, are their revivsions made.

Really good point, i always assumed (maybe incorrectly) that the X month sales numbers were for that month, if the are reporting the deals when they close, there is a huge data gap.

#145 MM on 07.07.11 at 2:08 pm

The video does point out the need to think about what happens 5 years down the line. Unfortunately its very difficult for a lot of people think in those time scales, and even more difficult to predict what will happen at that time, seriously what tools do ordinary people have to do this?

So what I think we’re seeing is a sales pitch for a “product” that helps take some of the uncertainty away, “insurance” so to speak. Even sleazy sales people have a certain skill, which is to understand people’s needs and fears and to cater to those – which means he’s simply pointing to an actual need today for mortgage products with less uncertainty.

For some, a 25yr term fixed mortgage would be ideal, zero uncertainty. What is the reason these aren’t offered in Canada?

#146 Daisy Mae on 07.07.11 at 2:27 pm

“See? F is still at work. He recently raised CHMC’s liability limit to match the federal debt – about $600 billion. And most of that portfolio is composed of high-ratio, high-risk loans.”

Must be very frustrating for you to witness such government stupidity…..

I kinda wish it’d blow up in their faces — and it will, next election — but the feds are taking us down with them. We’re powerless. Now. We had our chance last election, and blew it. But then, we didn’t have anything worthwhile to vote for.

The 39% ‘majority’ is nothing to be proud of.

#147 Painted Toenails on 07.07.11 at 2:27 pm

#115 Utophia
#98 househorneyhousewife said…..

“Same goes for the rise in obesity and the diabetes epidemic that is resulting from this. We can either blame MacDonald’s restaurants or we can blame the people who are actually putting the food into their own mouths”
—————————————-

Terrific comments. You are one smart wife and your husband is a lucky guy. I am really bothered by the blame game too. Seems that too few want to accept responsibility for their own decisions anymore. Especially when things turn sour. No wonder there are so many lawyers working overtime to sort out reality.
********************************************

I respectfully disagree.

Many of the posters here will be familiar with European and Asian cultures where WALKING and BICYCLING are the norm along with living and working alongside local markets.

Our suburban developments have crippled us all by forcing us into cars. To compound this we have very few options for food aside from grocery stores which, frankly, are hideous and are stocked with processed garbage masquerading as food.

Our kids don’t walk to school or play outside as we did because of the threat of ‘stranger abduction’, a fallacy if there ever was one.

Indeed, we need to be aware of what we are eating but blaming obesity on the individual is missing the big picture.

;-)

#148 Mr. Reality on 07.07.11 at 2:37 pm

Anyone enjoying the suckers rally the stock markets are currently experiencing?

Mr. R.

#149 Devore on 07.07.11 at 2:43 pm

#135 Kevin

The problem is, everybody already knows that trans fats and fast food and donuts will make you fat. So people who indulge anyway and end up fat simply reap the consequences of an informed choice.

No, they do not reap the consequences, because in Canada health care is free. They pay the quality of life consequences, eventually, but not the financial ones for the additional treatments and care of chronic and acute conditions resulting from their decision.

To put it in financial terms, the health care system removes and subsidizes the risks of a fast food diet by backstopping the costs of failure, and introduces moral hazard into the system. The gains (enjoyment of quick and convenient tasty fast food) are privatized, the losses (obesity, heart problems, etc) are socialized.

#150 Cookie Monster on 07.07.11 at 2:44 pm

#115 Utopia on 07.07.11 at 10:00 am
#98 househorneyhousewife
You guys are both clueless. Without government CMHC the banks would have assumed all risk. The disconnect of risk from reward is 100% government intervention. Also central bank setting of interest rates and uncontrolled credit expansion make the whole bubble possible, 100% government!

Mc Donalds is not backstopped by the feds when all their customers croak from diabetes, the banks are.

#151 Victoria on 07.07.11 at 2:52 pm

PainteToenails,

Our kids don’t walk to school or play outside as we did because of the threat of ‘stranger abduction’, a fallacy if there ever was one.

I am so with you on that one. Google Free Range Kids – its excellent.

Cheers!

#152 Timing is Everything on 07.07.11 at 3:07 pm

Still room on the island for retirement…They’re giving ’em away!…Hurry, Hurry Hurry! These are blow-out prices…

http://tinyurl.com/3o4omkg

#153 Blame Canada on 07.07.11 at 3:10 pm

I don’t think we can look for the CDN Gov’t to really “fix” things. Gov’t do not have a great track record on this.

We need to fix it ourselves. Either Canadian’s realise that DEBT DOES NOT EQUAL WEALTH and get LESS GREEDY, thus saving themselves and Canada OR Canadians keep getting more and more IN DEBT and eventually everyone will be more poor because of it.

Greed and Hubris. Is this REALLY Canadian traits?

Please prove me wrong Canadians!

#154 disciple on 07.07.11 at 3:15 pm

Yes, Painted Toenails, you are putting these selfish people in their place. These people have made a killing in real estate and contributed to the inflated prices and now they are blaming the ones who came after for wanting to own a house? Who cares about anybody else, but myself, right? It must be just bad decisions that they made when they were young. ***Flower Power Generation***It’s all about me. That’s why I don’t have any kids when I’m 45, etc…Truly a selfish generation, the demographic coming after them should have been just as populous if not more. But it’s not, I wonder why?

Let’s take Mr. # 142 MadMan’s comments above and substitute the automobile scenario and…here goes…

(((Clearly the cult of victimization appeals to some of the readers of this blog. However, the blog is called The Greater Fool for a reason. Sure the government and the MSM are complicit, but ultimately it’s personal greed and laziness that made so many people vulnerable to the lies.

Call me deluded, but even though I bought my ((gas guzzler automobile in the 90′s)), I couldn’t ever imagine allowing myself to be sucked into something costing ((more to bring the gasoline to my station than the actual cost of the gasoline itself-and harming the environment and the future health of my children and grand-children)).

Let’s see how well you do without your automobile, Mister. Nobody said you had to buy one, did they? Greed and laziness, huh? Like a defined benefit pension plan via taxpayers for Crown and union employees? I hope the upcoming generation rips the rug from out under you…just desserts.

#155 Devore on 07.07.11 at 3:19 pm

#141 disciple

These schemes are only good while the insanity prevails. You see these shysters come out of the woodwork in every bubble market preying on people blinded by greed. They’ve stayed out so far, because they do not have enough money to participate. Fear not however! If everyone else seems to be getting rich (hint: they’re not), so can I, so I jump on before the boat leaves.

Everything about it is so wrong, I hardly know where to begin.

Anyways, looks like Mark (or an imposter) has shown his face here, claiming it’s all just a big joke to prove a point. That’s why he has a web site dedicated to selling it to people, and makes his living thus.

The only logical counter to his insanity you need has already been posted: take the lower interest rate, pay as if you had the higher rate, and you are also immune to “payment shock”, all the while handing the bank less money and gaining more equity.

5% vs 0% down may seem like not a lot, but clearly there are lots of people who are not able to save any money whatsoever, so they must always find a way to spend every penny they earn. But when amortization was reduced by 5 years, from 35 years to 30, that also reduced affordability by some 7%. If you have a mortgage that is 5% smaller, you could pay the same as a 0% mortgage payment would be, and pay it off nearly 5 years sooner.

#156 disciple on 07.07.11 at 3:22 pm

I am inflamed today! Losing my mind, I guess…the prevalence of bloggers who have no regard for anyone but themselves is profoundly disturbing. I learned a long time ago not to blame others for my own problems. If you don’t like something, then change it. Whether or not you get this yet, but we are all in this together.

The road is long
With many a winding turn
That leads us to who knows where
Who knows when
But I’m strong
Strong enough to carry him
He ain’t heavy, he’s my brother
So on we go
His welfare is of my concern
No burden is he to bear
We’ll get there
For I know
He would not encumber me
He ain’t heavy, he’s my brother
If I’m laden at all
I’m laden with sadness
That everyone’s heart
Isn’t filled with the gladness
Of love for one another
It’s a long, long road
From which there is no return
While we’re on the way to there
Why not share
And the load
Doesn’t weigh me down at all
He ain’t heavy, he’s my brother
He’s my brother
He ain’t heavy, he’s my brother…

#157 Junius on 07.07.11 at 3:25 pm

#144 Cookie Monster,

What does Ayn Rand have to do with the New Revolution? It was Ayn Rand and her idiot followers like Alan Greenspan who got us into this mess. She is no Thomas Jefferson.

If you want to read about the new revolution read Umair Haque’s book, “The New Capitalist Manifesto.” Then we can talk.

#158 Devore on 07.07.11 at 3:25 pm

#149 MM

For some, a 25yr term fixed mortgage would be ideal, zero uncertainty. What is the reason these aren’t offered in Canada?

Most banks offer 10 and 20 year terms. The premium on removing uncertainty is significantly higher. I guess the banks have no more tool than the common person to aid in predicting the future.

US has those mortgages because the government guarantees them. The people demanded it, and the politicians delivered. Now the chickens have come home to roost, and everyone is paying the true price of this wonderful government service.

#159 Junius on 07.07.11 at 3:30 pm

#139 Dad,

ECB interest rates are going up. Indeed.

This is what many of us have been saying for a long time. Interest rates can only be held artificially low for so long. In order to do so gov’ts need to be active in buying bonds and treasuries which means taking on more debt.

As John Mauldin calls it, “The Endgame” is here as they must stop doing it. As a bonds and bourses move towards a free market rates could go up very quickly. They already have in many countries.

Canada may be late to the party but this just means we will have a longer hang-over.

#160 Imstupid on 07.07.11 at 3:40 pm

#8 LH

Your comments are a load of you know what. What banks do you deal with? Are they in some other country or, another decade? The banks don’t give a ( you know what) about the area your home is in when giving you a mortgage. The only thing they care about is income. I’ll give you the fact that a 5% down on a million dollar plus home is quite unlikely because you annual income would have to be more than 250k and the percentage of the population that make that are few. If someone did the bank would have no problem giving out 1million backed by chmc.

The other part of your comment made no sense either, if values drop they do everywhere, no exceptions. The only logical conclusion I can make from your statement is that while c1 and 2 are higher priced homes the bet worth of the individuals in that area most likely weather a down turn. This will likely result in lower losses, it will certainly not result holding value.

#161 Imstupid on 07.07.11 at 3:45 pm

Net worth

Can most likey

Sorry for error

#162 Imstupid on 07.07.11 at 3:48 pm

148 Kichener1

Good point I would like to know also. Hopefully others here see the interest and post reply.

#163 jimsum on 07.07.11 at 3:50 pm

I don’t agree that F is primarily to blame for all the bad mortgages. In the U.S., private companies were eager to insure mortgages without government backing. Insurance companies were more than willing to sell CDS’s without government backing. These companies got bailed out by the government anyway, but that doesn’t change the fact that the private sector was more than willing to make all the subprime loans they could. Government didn’t have to force them to make huge profits.

If we fall into the trap of blaming the government for this mess, we will be compounding the mistake. Mortgage lending must be strictly regulated. Governments may have failed to do this, but it sure won’t be an improvement if we stop regulating the banks.

#164 jess on 07.07.11 at 3:51 pm

n. korean “made supernotes” the fake vs the fake

The Wedding Ruse

To coordinate arrests in the Operation Royal Charm case, agents came up with a clever ruse. Because many of the subjects lived outside the U.S., they were invited to a wedding aboard a yacht docked near Atlantic City, New Jersey. They were sent real invitations, but the wedding was a fake. When several of the individuals showed up for “transportation” to the ceremony, they were promptly arrested.

Smoking Dragon and a related case in New Jersey called Operation Royal Charm led to the indictment of 87 individuals from China, Taiwan, Canada, and the U.S. The investigations uncovered—and dismantled—an international smuggling ring that could have threatened the country’s national security.

Charges against the subjects included smuggling real and phony drugs and other contraband into the U.S. along with counterfeit $100 bills—believed to have been produced in North Korea—that were so nearly perfect and so much more sophisticated than typical counterfeit currency they were dubbed “Supernotes.”

http://www.fbi.gov/news/stories/2011/july/dragon_070511/dragon_070511

#165 Imstupid on 07.07.11 at 4:09 pm

141 disciple

I think a shift happened at some point, where people stopes looking at the mortgage amount and started looking at the payment amount. I had a friend that bought an expensive vehicle, he was earning 8-9k a month. His logic was that a car loan of 1300 per month was nothing until I pointed out the obvious. His 8-9 k a month is actually 4-6k after taxes and his 1300 payment would require 2k gross income, not to mention insurance, had and maintenance. Sure enough he couldn’t make payments. My point is that the same thing happens with homes and sure enough alot of people will lose homes. This explains why net worth is going down as values are going up and household debt keeps growing. It’s not hard to see where this ends you just need the right information. Look at max debt a household can get based on average income and see how far off debt limit average household are in. When they hit the wall prices will decline. Intrest rates won’t matter, chmc won’t matter the only thing that will save them are 6 lucky numbers in the lottery.

#166 Westernman on 07.07.11 at 4:10 pm

Hey Mr. Buyer:
The woman is right. Grow up and quit looking to nanny state government to do your thinking for you. It’s crybaby bleeding heart idiots like you that screw thing sup royaly. Don’t you know the road to hell is paved with good intentions. Be a man and quit crying that someone you don’t know in a building far away isn’t looking out for your best interests.
You do make quite a typical example of a sheltered whining liberal Canadian though.

#167 Borrow until you are bankrupt on 07.07.11 at 4:19 pm

The PTB will ONLY just talk like useless Mark Carney. People will borrow until the credit runs out. My advise is to borrow until you go bust. Why do you think the US crashed? People borrowed until the banks went bust. Same with Canada and the PTB are now getting scared it will crash the system unless they slow it down with talk. They know people will borrow until the system is broke. If they increase interest rate people will go bankrupt. Their only option is to jawbone the market down with words and not action. Why do you think useless mark carney has been talking for a couple of years now? Enjoy the free money and live until they stop the credit. Advise take a chunk of that free money and put under your pillow. When the time comes you will have money to move, pay off a bankruptcy lawyer and find a nice rental place where you can live for free. Stupid people work and smart people borrow. Thanks Canada for the free lunch. P.s I will never pay off a cent if you increase interest rates and force me to go bankrupt.

#168 vyw on 07.07.11 at 4:23 pm

There was a slight decline in average prices in Toronto in June 2011:
http://www.torontorealestateboard.com/consumer_info/market_news/news2011/pdf/nr_market_watch_0611.pdf

vis-a-vis May 2011: http://www.torontorealestateboard.com/consumer_info/market_news/news2011/pdf/nr_market_watch_0511.pdf

Perhaps just a seasonal adjustment but then again…the decline was in the detached and semi-detached homes categories in the 416 area.

#169 Mark Fidgett on 07.07.11 at 4:34 pm

The fact that the Vid has achieved GREAT dialogue and thought process, makes this worth while.

Cudos to the site for allowing that.

Is it safer without Zero down mortgages, without zero down leases, without zero down car loans, ABSOLUTELY, no questions asked.

Experience shows, there isn’t always a black & white answer as it relates to specific indivuals and circumstances.

It’s good that our philosophy is to ensure that our clients buy responsibly and understand all the financial repercussions they’re facing. Whether that’s a Zero Down mortgage or not.

Most clients that contact us for a Zero Down, typically change their mind after the initial consultation and end up with a down payment mortgage scenario.

This may not be relevant to you, but unlike most banks, we design a mortgage strategy that best fits our clients overall financial wellness.

I think you’ll agree that ensuring the client can truly afford the house is key?

Thanks Garth for bringing about the dialogue.

Informed people make smarter decisions!

#170 Dan M. on 07.07.11 at 4:46 pm

#144…Ayn Rand was not a true libertarian. She relied on her uncle’s connections to Hollywood to make her name and she also used state healthcare in her final years. A true libertarian would eschew such things (as well as tax payer funded roads, research, schools, police protection, fire protection etc. etc.).

Rand was a buffoon, just like her acolytes are today. Hell, she even idolized a serial killer as the ideal man (with plenty of personal correspondence with this monster to back that up).

#171 Nostradamus Le Mad Vlad on 07.07.11 at 4:49 pm


#83 Ravishing rick — “Oh god i just watched the clip: in summary . . . Hukt oN FonIx wURkt 4 mE!” — This spelling is a really neat diversionary tactic! Posters have to slow down, read and re-read a sentence b4 it materializes in the brain chemicals! Well played!

#91 Jody — “. . . when the tax payer is kicked in the nuts by the coming wave of defaults?” — and —
#101 TurnerNation — “Would our elite robberbarrons every do such a thing, an engineered crisis? :twisted: :twisted:”

Well, it is the second half of 2011 now, so all bets are off as the west’s economies are tanking quicker than a Cdn. sub. (Not from Subway or anywhere like that, the real thing).

China and Russia are doing their level best to stay on par with the west by bankrupting themselves first, thus screwing up the west completely then (probably) coming out with a new financial system.

#160 disciple — “I learned a long time ago not to blame others for my own problems.” — Amen to that — it is better known as self-responsibility, and applies equally to everyone.
*
IMF right on this one — austerity does not lead to growth, so what is Plan B? 39% increase in food prices; GS loves borrowing and getting bailouts at the same time; 7:10 clip Tricky Dicky still lives! In a Tim Geithner body. Wonder if this is the reasons (one of many) he’s quitting next month, after the Aug. 2 debt ceiling?

Rupert Murdoch News Of The World finishes Sunday, but Murdoch’s still around; Obama invites Mexicans on to US highways, chopping US jobs.

#172 squidly77 on 07.07.11 at 4:52 pm

From the very bottom of the treb report..

Greater Toronto REALTORS® are passionate about their work. They are governed by a strict Code of Ethics and share a state-of-the-art Multiple Listing Service. Over 31,000 TREB Members serve consumers in the Greater Toronto Area.
The Toronto Real Estate Board is Canada’s largest real estate board in North America.

Kinda says it all.

#173 Bobby on 07.07.11 at 4:53 pm

Clowns like this abound in any market, whether it be real estate, dot coms or commodities. Unfortunately, they target those without the wherewithal to make an informed decision. Moreover, they don’t explain how they make their money, which is usually a commission based on the sale of whatever the scheme.
Here in Victoria, two financial pumpers that have appeared regularly on CFAX, Gerry Connor and David Michaels are facing charges for regarding their respective schemes. The supposed investments haven’t turned out as they advertised. Sadly many people have been burnt and will not see their money.
As in most things, it is buyer beware! If it is too good to be true, it probably is.

#174 jess on 07.07.11 at 4:54 pm

cult of victimization ?

…then why would law /regulations be changing or the need for bailouts?

#175 Hoof - Hearted on 07.07.11 at 5:00 pm

#144 Cookie Monster

Dam that YOUTUBE !!!!!

Or…… Thank God for YOUTUBE

If one digs into the issue…( and yes this involves Rothschilds……) the Yanks have never shed their British rule…its a sick joke.

The US acheived a bogus autonomy, but still ruled by the black hands within Europe.

Some U.S. patriots did warn of the black hands….and were either assassinated or replaced.

Wilson, Hoover, Truman…. Roosevelt …….set the seeds.

In essence. the US…since 1776 has been a pitbull / lapdog for Britain and its banking system.

The Constitution etc. is being underminded continually …much of it due to the faux terrorist threat.

The US is simply “washed up” and will be the military muscle for these same Euro interests.

#176 Cookie Monster on 07.07.11 at 5:02 pm

#153 Devore on 07.07.11 at 2:43 pm
Good post. Another reason government should not be involved in health care. The lack of competition and profit motive is sinking every province. Canadian health care is so expensive now BECAUSE it’s free!

#161 Junius on 07.07.11 at 3:25 pm
Alan Greenspan’s actions as Federal reserve chairman were in direct opposition to every principle and axiom Ayn Rand ever advocated. Read Atlas Shrugged or any of her works. You can not blame Ayn Rand for the actions of another.
I personally think Alan Greenspan embraced the Keynesian principles on purpose to throw the system into violent disrepair and damage so as to make the problem and solutions obvious to society, and if I’m right he gets an A+.
Thanks for noticing.

#177 jess on 07.07.11 at 5:09 pm

quit looking to nanny state government to do your thinking for you. “?

… free lunchers are more suited to your tastes?

============
the word ‘rents,’ which is a particular term used by economists to denote unearned income, windfall income, ‘the income of the man who loves to reap where he did not sow’ for instance. Income from rising land values is a case in point: it’s nothing to do with the hard work of the rentier, and everything to do with a free lunch.

======

Economic rent is typically defined by economists as payment for goods and services beyond the amount needed to bring the required factors of production into a production process and sustain supply.[1] A recipient of economic rent is a rentier.

Economic rent is different from other unearned and passive income, including contract rent. This distinction has important implications for public revenue and tax policy.[2] [3][4] So long as there is sufficient accounting profit natural economic rent on resources such as land and minerals can be collected by governments for the purpose of public finance without the adverse effects caused by taxes on production or consumption. Alternatively, economic rent can be collected as royalties or extraction fees, in the case of minerals and oil and gas. Economic rent is closely related to producer surplus, but is measured in input units rather than output units (wiki)

=

Kleinbard :
“Stateless income privileges multinational firms over domestic ones by offering the former the prospect of capturing “tax rents” – low-risk inframarginal returns derived by moving income from high-tax foreign countries to low-tax ones.”

Professor Ed Kleinbard of the University of Southern California, a leading US tax professor, has an interesting presentation looking at the concept of ‘stateless income’ – that is, income that multinationals stash overseas, typically in tax havens.
By: Edward D. Kleinbard
USC Gould School of Law
[email protected]
“Stateless income privileges multinational firms over domestic ones by offering the former the prospect of capturing “tax rents” – low-risk inframarginal returns derived by moving income from high-tax foreign countries to low-tax ones.”
http://www.sbs.ox.ac.uk/centres/tax/symposia/Documents/Kleinbard%20final%20v3.pdf

#178 Hoof - Hearted on 07.07.11 at 5:14 pm

Vlad

…ya seen this before….

THE SECRET HISTORY OF THE ATOMIC BOMB
WHY HIROSHIMA WAS DESTROYED

http://www.whale.to/b/mullins8.html

“But, Mr. Secretary,” said Alger Hiss, “no one can ignore the terrible power of this weapon.” “Nevertheless,” said Stettinius, “our entire postwar program depends on terrifying the world with the atomic bomb.” “To accomplish that goal,” said John Foster Dulles, “you will need a very good tally. I should say a million.” “Yes,” replied Stettinius, “we are hoping for a million tally in Japan. But if they surrender, we won’t have anything.” “Then you have to keep them in the war until the bomb is ready,” said John Foster Dulles. “That is no problem. Unconditional surrender.” “They won’t agree to that,” said Stettinius. “They are sworn to protect the Emperor.” “Exactly,” said John Foster Dulles. “Keep Japan in the war another three months, and we can use the bomb on their cities; we will end this war with the naked fear of all the peoples of the world, who will then bow to our will.”

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

Ah the world

……simply one big circus , sideshow …..smoke and mirrors…

#179 Devore on 07.07.11 at 5:21 pm

#161 Junius

What does Ayn Rand have to do with the New Revolution? It was Ayn Rand and her idiot followers like Alan Greenspan who got us into this mess. She is no Thomas Jefferson.

Somehow I do not think Ayn Rand would be cheering Greenspan during his career as central banker. Of course Ayn is no Thomas Jefferson, because only Thomas Jefferson is Thomas Jefferson. You just want carbon copies of people walking around?

“idiot followers” was that really necessary? Your blind hatred for all things you do not agree with comes across very clearly in your otherwise intelligent posts.

#180 canali on 07.07.11 at 5:29 pm

vancouver sun story:
foreigners buying up Vancouver RE is underestimated (read: thanks for helping drive up the prices)

http://www.theprovince.com/business/Asian+buying+Vancouver+real+estate+underestimated/5065907/story.html?cid=megadrop_story

#181 Steven Rowlandson on 07.07.11 at 5:51 pm

So desparate to make a deal. Let me guess, nothing down, next to nothing as an interest rate and if there are job losses or any changes in the terms of the mortgage it’s default time and send the keys to the bank. People rarely ever learn and just love to follow the example of the greater fool. Canada’s real estate market will be most entertaining and worth staying away from for quite some time.

#182 Sunny on 07.07.11 at 5:54 pm

we’re screwed…

#183 Hoof - Hearted on 07.07.11 at 5:55 pm

Olympic Village tenants decry excessive energy bills.

http://www.straight.com/article-402344/vancouver/tenants-decry-energy-bills

Geoff Mulligan, Enerpro’s vice-president for internal operations, said that he cannot directly comment on claims that his company’s bills are too high. The Straight obtained an Enerpro billing for one of these buildings, but no resident is willing to speak to the media regarding their concerns, for fear of being evicted.

“The one I can say is that I think this is a very brand-new system,” Mulligan told the Straight in a phone interview, referring to the energy meters. “People are used to paying, you know, maybe just a gas bill if they’re in a house. But nobody has ever seen hot water–specific bills, heating-specific bills, especially in a multifamily residential building, because that’s a cost…absorbed within all the rents. So I don’t know how they’re making that comparison or being able to make that justification that they’re too high.”

It was Mulligan who responded to a call from the Georgia Straight to Enerpro CEO David Van Seters, who also happens to be the founder of Small Potatoes Urban Delivery, a grocery-delivery business promoting organic food. Van Seters’s SPUD was supported financially during its infancy by the investment firm Renewal Partners, whose president is Joel Solomon, a backer of Mayor Gregor Robertson.

According to Armstrong, COHO contracted Enerpro on behalf of the city.

According to Armstrong, Enerpro charges a flat monthly administrative fee of $12.50 for each billing, with the rest going to the City of Vancouver.

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

It never ends…..

More evidence to support the green agenda as BS…it is simply another cash grab.

Be warned ……. and stay away !!!!!!

#184 Linda on 07.07.11 at 6:07 pm

We live in a society devoid of morals and ethics.

#185 Cato on 07.07.11 at 6:20 pm

The inane, circular reasoning put forward by Mark F. in the video just illustrates how polluted supposed logical thought processes have become in both industry and gov’t.

This is the logical end of where interference in a free market leads. Trouble is we’ve had the influence of misguided, twisted policies from gov’t for so long we really have no idea what a healthy market should look like.

The only solution to this mess is do away with the CMHC entirely. There will probably be plenty of public support to kill the agency once taxpayers realize just where money in the CMHC coffers has been going.

A stable market requires lenders being fully exposed to risk. When the CMHC disappears so does the irresponsible behaviour of the banks . When that happens banks will act more like banks of old and the useless finance based economy that produces nothing but debt will disappear. Mortgage brokers like Mark can get productive jobs that actually serve society and don’t just leach off it.

#186 Beach Girl on 07.07.11 at 6:25 pm

#143 Pessimest. I must be naive regarding decling tax rates. But that is just not fair. I am a big girl (but not big that way).
#160 Holy Smokes Disciple, you are probably smarter than me in financial acumen. But are you on windowpane or just having an LSD reoccurence today. He is not heavy, that is dating you.

#187 Beach Girl on 07.07.11 at 6:33 pm

Yes, I made a spelling mistake. English is not my first language. But I am better than Smoking Man. Having fun, enjoying the Blog. What does Blog mean? Thanks all for the entertainment. If I make a spelling mistake do not hang me.

#188 Mr Buyer on 07.07.11 at 6:34 pm

#170 Westernman…if nanny state did not take the measures it did I would likely not be visiting this blog and watching this bubble follow a similar path bubbles like it took and are taking in Japan and the US, how is that not at best incompetence. Sheltered, whining, Liberal, Canadian, typical, nice lob but it is just too predictable.

#189 BPOE on 07.07.11 at 6:37 pm

Not posting as much anymore folks. As you can tell I’m pretty smug and darn proud of myself for being 100% right. How much was that price increase in 1 MONTH oh yeah onlyh around 150k. How about the OWNER with the dilemna should I sell and make 2 MILLION after owning a house for 5 years in Vancouver. Folks listening to the American has made you poor. Sunny days ahead folks. Oh yeah and about that interest rate increase. Yeah I was right about that too.

#190 Bill Gable on 07.07.11 at 6:40 pm

Bonds in Portugal have gone hyperbolic and at the same time, the President of the United States is playing chicken with default. China has been exposed doing the “off books boogie” to the tune of over a TRILLION bucks.

Are we really seeing this mess of enormous magnitude, by chance? No – this game of chicken, and kicking pension cans down the road, have made the next era one of uncertainty and Black swans the size of Mike Duffy, quite likely.

Go long on Big Pharma – sales of tranquilizers, sleep aids and anti deeps must be selling like “Casey Anthony is a killer” teeshirts.

#191 $froma$ia-(Money does come from trees!) on 07.07.11 at 6:56 pm

Zero down? 5 % down?

I have the option not to buy. Its simple.

Why don’t you discuss the Zero down and dont buy.

$$$

#192 Kevin in Winnipeg on 07.07.11 at 7:14 pm

Sentiment seems to be turning around in the under $300,000 crowd here. Open houses have little showings and homes are being taken off the market or prices are being reduced. $300,000 for a house in Winnipeg is ridiculous as it is but most still think it’s a good deal so I don’t see prices changing too fast in the near future.

ps… renting sucks.

#193 Steven Rowlandson on 07.07.11 at 7:18 pm

What will they do next to keep the housing bubble intact? Link all the rights of citizenship to home ownership? That would imply black mailing people into debt slavery in order to vote, drink, drive and get married. Is such a thing beyond the realm of possibility?

#194 Mr Buyer on 07.07.11 at 7:22 pm

#135 Kevin I am not in favor of bailing out home owners really. I want this to not happen again.

#195 Nostradamus Le Mad Vlad on 07.07.11 at 7:27 pm


Debt Deal? “Why are they even having that discussion? Under the Constitution, the US Government can simply print up their own currency and use it to buy what they need without having to pay interest to a private bank. Lincoln did it. Kennedy did it. Why not Obama?” wrh.com; Jailed for cashing a cheque; Is Finance illegal? If so, the Eurozone is burned-to-a-cinder toast.

0:31 clip I pledge allegiance to Boston Pizza! Repeat of 2008 Another reason why Timmy and others may be headed for the exit door; China Standing tall to counter inflation; Gold Coins Rare double eagles (not golf).

Brzezinski Garth spoke of “what is to come”, or words to that effect. This is a hint, Is this part of the whole? September Surprise; Paranoid The US (and Cdn. govts.) have become clueless beyond words; Monsanto Not just for (un)healthy eating! Fukushima “His findings included a 63-64% decrease in all bird species during the period that Chernobyl iodine fell in the United States…”; Brownshirts are in Madison, WI and Brownshirts Two.

DSK Uno “Which explains why the corporate media is so eager to sell you the “I was framed” story.” wrh.com, and DSK Dos Curioser and wacky. “Which means that the $100,000 might be the payment to her from DSL to sabotage her own case and let DSK off of the hook.” wrh.com; Drink Milk Esp. with Kahlua, Vodka, tea and brewed coffee! Google and Yahoo More reasons to switch and avoid these altogether.

#196 Utopia on 07.07.11 at 7:32 pm

#154 Cookie Monster on 07.07.11 at 2:44 pm

To #115 Utopia and #98 househorneyhousewife

“You guys are both clueless.”
—————————————————————

Well that’s a little extreme Cookie.

Just because you are handed a tool is no reason to turn it on yourself and inflict physical damage while blaming the giver.

What sane person does that?

I mean, if I hand you a sharp knife do you think of sticking in your foot or making a nice tomato and lettuce salad? I think we are going to have to get used to the blame game though. When prices of houses actually start dropping it will have to be somebodies fault won’t it? But never the one who actually signed the loan and accepted the debt.

Funny that. And all this time there was crowing and puffing of chests and bragging about how much houses were worth and how much they went up each month etcetera until some of were nauseated. Everyone had that rich feeling and were happy to stick it to those who did not participate.

Don’t you think that should tell you that almost everyone was well aware of the fact that free money was being made for doing nothing and that a casino mentality had taken hold for those speculating? Those poor ignorant people.

That means that those victims you refer to were actually full participants. I don’t have sympathy for them. They knew what they were doing all along and some will pay a dear price for it soon.

#197 Utopia on 07.07.11 at 7:47 pm

#153 Devore

“To put it in financial terms, the health care system removes and subsidizes the risks of a fast food diet by backstopping the costs of failure, and introduces moral hazard into the system. The gains (enjoyment of quick and convenient tasty fast food) are privatized, the losses (obesity, heart problems, etc) are socialized.”
————————————————

Brilliantly said. I could not agree more. Without free medical care we would all be much more risk averse. Of course, by extending that idea just a little more I would also have to say that by taking away cheap money we would all be more cautious with our investments and more prone to save.

Looks like the complainers are winning a point with me after all.

#198 The InvestorsFriend (Shawn Allen) on 07.07.11 at 7:54 pm

WHEN WARREN BUFFETT SPEAKS… LISTEN!!

Warren Buffett was interviewed on CNBC this morning. His comments were upbeat and optimistic. Everyone should read these comments. http://www.cnbc.com/id/43671706/

Some of you may remember some commercials from maybe 15 or 20 years ago about a financial advisor. It was something like “when E. F. Hutton speaks, people listen”. Well when Warren Buffett speaks, I listen. So should you. And frankly, I don’t have much time for anyone who who does not see the wisdom in listening to the world’s most successful investor.

I mean the people on this Site spend time reading anoymous comments that are often absolute drivel, often made by complete nutbars, with only the odd useful nuggett occasionaly found. If you read the blog comments here, surely you have time for Buffett.

In particular note that Buffett is bullish on America (not it’s currency but the country) and is in particular bullish that the house construction industry will rebound soon.

(Buffett bashers, feel free to respond, which will only reinforce my point…)

#199 Hoof - Hearted on 07.07.11 at 8:00 pm

“Hired labor is cheaper than slave labor. And you don’t really have to feed your employees, whereas if your stock is in slaves, you damn well have got to feed them.

“… My heart doesn’t bleed for my country. If you can’t or won’t think of the causes of your slavery; if this conducement of slavery of your children for ten generations – if you won’t think of it – God help you. You are in for billions of debts and you have not got your own people’s money to pay for it.

And most of you have not got the groggiest idea of Lincoln – you don’t know what he meant by it, when he gave the people of this republic the GREATEST BLESSING THEY EVER HAD-THEIR OWN PAPER TO PAY THEIR OWN DEBTS.
‘Here are ignorance of coin, credit and circulation’, said John Adams 80 years before Lincoln.”

– Ezra Pound, June 8, 1942, Radio Broadcast from Rome

#200 Hoof - Hearted on 07.07.11 at 8:03 pm

CrowdedElevatorFartz

WTF…????

I thought we tag teamed and got rid of BPOE?

Time for Plan B ” you know ….Code 888 “

#201 Utopia on 07.07.11 at 8:09 pm

#135 Kevin wrote…

“So on what grounds can we justifiably deny a bailout to the wave of homeowners who will find themselves underwater and facing foreclosure a few years hence?”
—————————————————–

You must be kidding Kevin. Are you seriously expecting a home-owner bailout? If so then please explain why those who rent should pay a tax subsidy to those who made poor investment choices?

Do you think they will feel good bailing you out? Why should they enrich you and fill your boots out of their taxes? What is in it for them?

Should savers be saddled with higher taxes because you were profligate in your ways in the past? Remember all the bragging and sending all thee e-mails and photos of your wonderful vacation to the Bahamas (or wherever) to your less wealthy friends? Remember. But now you want them to redeem you to boot!!!

Let us keep in mind that those who have enjoyed all the benefits of cheap money to finance a wonderful lifestyle will earn the fruits of their wasteful ways fairly soon. Hey, maybe the government should just pay your mortgage in full so your lack of responsibility can continue unabated.

Don’t even think of asking for a subsidy. Ain’t gonna happen.

#202 Imstupid on 07.07.11 at 8:16 pm

#173 Mark Fidgett

What a load of crap you are writing. I can’t believe you actually have the guts to write that B.S. and think anyone will believe it. I may be stupid but I’m no fool. Stand by your words, don’t play politics and do damage control after being called out. If what Garth Turner says is B.S. why does he get all the attention? I read what smoking man writes and don’t even bother responding. Why do you? If you pick a fight defend your points or admit defeat don’t play damage control.

#203 Cookie Monster on 07.07.11 at 8:25 pm

#201 Utopia on 07.07.11 at 7:32 pm
Fine, everyone is ultimately responsible for their own actions, but when we live in a nanny state where the environment within which people act is disconnected from reality peoples perceptions of being responsible become erroneous. People see prices are rising and rates are low so they better hurry and get into the market, it’s a great time to buy. The banks are disconnected from risks, the home buyers are disconnected from sound lending practices, and the credit expansion is disconnected from actual savings. These disconnects are all precipitated by the government housing program, CMHC, and the central bank’s setting of low interest rates to meet their under reported inflation target.

#204 Devore on 07.07.11 at 8:37 pm

#174 Dan M.

A true libertarian would eschew such things (as well as tax payer funded roads, research, schools, police protection, fire protection etc. etc.).

A true libertarian would use what he paid for.

#205 Hoof - Hearted on 07.07.11 at 8:54 pm

#203 The InvestorsFriend (Shawn Allen)

Warren Buffett aka “Worn-out Buffoon ” ?

He had a use….but he is leading the public astray

Weren’t some of his firms part of the Wall Street cover up?

Vlad had a good link above…..(post 200)

The next, worse financial crisis
Commentary: Ten reasons we are doomed to repeat 2008

http://www.marketwatch.com/story/the-next-worse-financial-crisis-2011-07-06?dist=beforebell

Buffet would have more integrity if he called a spade a spade…not trying to lure and create more greater fools.

Eventually the Wizards get exposed….

#206 Hoof - Hearted on 07.07.11 at 9:04 pm

#206 Utopia

#135 Kevin wrote…

“So on what grounds can we justifiably deny a bailout to the wave of homeowners who will find themselves underwater and facing foreclosure a few years hence?”

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

I agree it won’t happen…because its not part of ” the Plan”

The” Plan” is to create upheaval and turmoil….and for the vested interests to exploit stupid (redundant) politicians who should be charged with Treason.

As a KGB agent who defected said the (4) steps to undermine a country or targetted group etc.

(i) Demoralization ( individuals see lack of hope )

(ii) Destabilization ( the citizens see mass chaos and mass confusion , society collapses )

(iii) Crisis ( ie a quasi 9-11 …..or 2008 Debt Crisis)

(iv) ” Normalization ” (what the vested interests deem as ” the solution” aka we should trust them)

All the aforementioned are used in sync and sequence to create an insidious bloodless coup…… aka don’t see it till it is TOO LATE.

#207 r on 07.07.11 at 9:09 pm

“As you can tell I’m pretty smug…”

yes, we can tell. and there are a few other four letter words we all like to use when describing you.

#208 Mr Buyer on 07.07.11 at 9:14 pm

#203 The InvestorsFriend (Shawn Allen)…I wonder if LePage consulted with Buffet before issuing their statement that house prices are peaking

#209 Utopia on 07.07.11 at 9:26 pm

#208 Cookie Monster

Good points Cookie. I agree with many them. I have a lot of commentary I might add to the mention you made of a nanny state but I am plumb worn out today. It is the heat. The prairies are sweltering today, high humidity and mosquitoes by the millions. It will have to wait until another day, I need a cold shower to cool off.

#210 Markey on 07.07.11 at 9:37 pm

#198 Steven Rowlandson – most people don’t vote anyway so that wouldn’t be a deterrent.

#211 Mark Fidgett on 07.07.11 at 11:43 pm

#207 Ain’t no damage control here my friend. In fact, I’m enjoying the discussion. I stand by what I said, BUT I wanted to make sure it came across as I intended. As I said in my response, I still feel from an Insurance risk policy perspective, the fact that a variable mortgage requires you to qualify on a variable, DOESN’T make it safer than a zero down. I know how GT feels about high risk lending, not a surprise there. Did I know when I shot the vid AND tagged him that he would respond. ABSOLUTELY. Do I agree will all his stuff, not at all. Do I believe he has some valid points, absolutely. Not offended by what you think about what I say, just want to make sure your comments are based on what I wanted to say. PS – if you knew me, you’d know that defeat and my name never appear in the same sentence ;)

#212 Mark Fidgett on 07.07.11 at 11:47 pm

#207 – Sorry, meant to say “A variable rate mortgage requires you to qualify on a posted 5 year rate”

#213 AG Sage on 07.08.11 at 4:47 am

>#81 Showmethemoney on 07.07.11 at 1:43 am
>I have been reading this blog for over a year, will there ever be an actual date for the burst, or will it simply not happen, prices just keep rising and rising in yvr. What gives? I’m slowly becoming a “non-believer”…

Believe it or not, people like you are a sign of a top.

#214 Zero — Greater Fool – The Troubled Future of Real Estate | No Money Down on 07.08.11 at 10:11 am

[…] the original here: Zero — Greater Fool – The Troubled Future of Real Estate Share and […]

#215 Mr. Reality on 07.08.11 at 12:51 pm

Economics 101

Todays job number in the States suck……..The markets rose in anticipation of the numbers which are a disaster…..

When people do not have jobs, which means no money, they do not consume. Canada and the US depend on domectic consumption and is a major part of the GDP.

When countries such as China stop consuming, they stop buying Canadian commodities.
This means people lose jobs and spend less. This causes GDP to suffer. Compounding job loss and decline in spending causes recessions (along with a number of other things).

This causes panic and house selling due to unemployment and debt problems. Owning a house is no longer viewed as a good thing (like owning illiquid assets ever were). House selling en masse cause prices to drop.

House prices dropping fast cause people to lose wealth and start living in the wonderful world of negative equity.

Add in a Euro debt crisis and you have the recipe for a perfect storm.

The perfect storm is brewing and the proof is in the numbers.

Short the TSX. Sell your house and rent.

Mr. R.

#216 Steven Rowlandson on 07.08.11 at 4:30 pm

Hello Garth.
Cheap money meant houses could jump in value without anyone’s wages or salary going up. This is how real estate became detached from the real economy. It’s exactly what happened in the US between Nine Eleven and 2006. Prices followed the debt chart skyward.

Well you are to some degree correct except that this problem has been in the works since the late sixties and early seventies so there has been lots of time to build a massive financial house of cards supported by pay rates that are 30 or 40 years out of date. This is not going to end well and the demographic and financial damage will be unbelieveable. You have seen nothing yet.

#217 Bill Gable on 07.08.11 at 5:40 pm

Making some Friday Notes – insiders are not buying shares (buybacks off the cliff) = the EURO is a Banking story = When a Drachma was Drachma, we knew it stunk = then it was a EURO is a EURO > NO, not in Greece, where the non collection of taxes, scams and dodges had wreck the Hesperus a few times – as delineated by Mr. Turner; it meant the Countries bonds smelled and banks in Germany and French are CRAZED with worry.

Spain overbuilt for English MORONS, who mortgaged the leaky moss hut and thought Alicante was groovy.

Holy Pender Island! (*Times a THOUSAND).

Santander and other Spanish Banks Bonds look like small Zeppelins.

Portugal Bonds? Italian Bonds?

See Athens?

Detroit = August 15th. I sure hope not.

US =MORE – BORROW MORE? What’s a TRILLION when we have a QUADRILLION off the books of major Entities?

SIV’ and Derivatives that are more complex than theGordian Knot on steroids.

Buying a home out of foreclosure in Hawaii? HA, have fun!

My Godiva what a era – fascinating. I guess they all are = but WOW.

I thought the Stagflation burdened 70’s were weird – now it’s “Twilight Zone”.

Nice $1.2 million dollar house, sir!