For reasons articulated here yesterday, your house will likely be worth less by next summer. Another egg on Wall Street and a run at those slippery French bankers give us the perfect omelette. Glacial growth in the US and a painful restructuring in Europe. The result: lower demand, cheaper commodities, economic wimpiness, stingy corporations, swampy wages and lousy real estate sales.

Just can’t see folks rushing out to bid on a $1.2 million house on a 30-foot lot in Leaside because five-year mortgage rates have declined two-tenths of a point. In fact, events of the last few days might mean higher unemployment and far less consumer confidence for some time to come. Clearly the fear-greed needle’s still swinging wildly on financial markets, and until the path ahead is clear, only fools and the occasional horny virgin will be on it.

This logic’s already rippling through the embattled US housing market, and has been since last Friday night’s downgrade. In fact, hours ago an interesting list was published of the 10 American housing markets that will collapse over the coming months. The compilers factored in local incomes, house prices, jobless rates, house sales levels and momentum. Layered on top is the new normal – a near-recession guaranteeing recovery will take a lot longer than anyone anticipated, in an environment of financial disarray.

Number 10 on the list is Fort Lauderdale, in the middle are Merced (California), Detroit and Vegas, and topping the chart is Naples, Florida. One of the fastest-growing places in America six years ago, the average price has already cratered by 55%, to $225,000. By the Spring of next year that’s estimated to be 16%, or $40,000, lower.

By the way, compare some of these average prices to where you live: Miami $175,000, San Bernardino $181,000, Las Vegas $140,000, Lauderdale $196,000 and Detroit at $42,000.

This is what happens when real estate goes bad. Homeowners get nailed as values fall and equity simply vanishes. And there’s nothing like financial contagion to make this disease spread far and wide, especially among a nation of people where house prices and real estate debt have never been higher, down payments never lower, and house lust has fueled an irrational bubble. Say, sounds familiar.

In fact, I thought it might be useful – or at least maniacal – to give some thought to those places in Canada which are most, or least, at risk. Are ya in? I’d like to hear your reasons for selecting a city or two which you feel will be reamed or spared by the approaching real estate correction. I have yet to decide on a suitable prize, but I’m leaning towards awarding a small community in the Okanagan. Yes, you can renovate it, play with the remaining inhabitants, or market it in Guangdong. Free choice. Details to come.

So let me kick this off.

First, six cities which I think will be least affected by the inevitable blighting:

Fredericton, because it’s cheap, durable and has a government living there. The average house price is a lowly $153,000, or less than half the national average, and it’s barely grown more than the inflation rate. There’s some bitching architecture, Beaver Cleaver neighbourhoods, a fat river and a wholly disturbing amount of permanence.

Windsor, which is across from Detroit and shares much of the auto heartbreak that took Motor City down. Except Windsor is clean, middle-class, reasonably upscale and cheap. The bubble mood popped in this place long ago, and there are now some houses selling for the price of minivans. But not the Korean kind. Little downside here.

Halifax, which will be affected (already happening), but to a lesser extent than in the urban wastelands to the west. The largest city in Atlantic Canada, it actually has an economy, helped along by a government and the military. At $262,000, the average price is a hundred grand below the national average, and for that you get more house. And a free lobster dinner.

London, where the bubble expired of boredom. Besides, there was a bylaw against it.

Montreal, the second biggest city in the country but, incredibly, the average house price, at about $300,000, is 20% below the national number. In the past values were kept low because there were too damn many separatists. Now there are too damn many socialists. A lesson in here somewhere for Vancouver.

416, where real estate will be among the stickiest in the country. Sure, the GTA as a whole could be in for a 15% haircut, but the epicentre of a region of six million people and a robust economy (despite a growing pile of bodies on Bay Street) is likely to see only marginal declines. There’s a reason the average SFH here in the centre is $800,000, and it’s called the 401.

And which cities will suffer the greatest percentage price decline over the coming year?




#1 Gord In Vancouver on 08.10.11 at 9:59 pm

And which cities will suffer the greatest percentage price decline over the coming year?

Boy! That’s a tough one : )

#2 Just a tech on 08.10.11 at 10:03 pm

Well as long as they dont ban pan handling in Toronto, the average person might make it in this city.

#3 noworries on 08.10.11 at 10:06 pm

My guess waterloo/kitchener/cambridge. The tri cities..

#4 Jason on 08.10.11 at 10:09 pm

Stay away from Windsor. Pollution central. No doctors here. No work to be had anymore.

and the kicker: WAY TOO MANY


#5 guelphite on 08.10.11 at 10:09 pm

I’m kinda shocked that Garth has identified 6 areas that include 416, windsor and london. Most of Southern Ontario in other words. I think Guelph is insulated from price drops. Lots of industry. Big university. Great bars. If Garth had excluded southern ontario from his fear forecasts I might have bought a couple of years ago.

#6 squidly77 on 08.10.11 at 10:15 pm

1 Edmonton – 60%
2 Calgary – 60%
3 Vancouver – 55%
4 Saskatoon – 50%
5 Toronto – 30%

My shiny new tin foil hat is on. LOL. Seriously these are reasonable projections when looking at long term prices.

**Alberta is Canadas only non-recourse mortgage province.

#7 Pat on 08.10.11 at 10:20 pm

In Halifax, $260,000 buys a WWII shack or a bung in the boonies.

How will the $380,000 1-bedroom condos fare?

#8 Bubu on 08.10.11 at 10:21 pm

I think you forgot the cities in AB. If we compare income vs. price, unemployment, I think AB is way better than the cities mentioned.
If you look at the prices in US you should look at the family income also.

my 2 cents… and I’m a bear, but as long as the interest rates will stay at this level I don’t see an issue in AB. Maybe a flat price until we see different interest rates…

#9 Michel QC on 08.10.11 at 10:21 pm

Low house price in halifax is good, but low house prices in Montrèal is bad. I just do not get it?

#10 Smoking Man on 08.10.11 at 10:22 pm

Losers, I’m thinking bad lyers!!!!!!!

Kids: today’s dunking lesson “The art of Lying…………….”

From JK to a PHD it is forbidden. Plagiarizing with a few edits is a holocaust.

Ya see grass hoppers, school is all about making you happy to be the servant to the master, The master want’s you to be honest, he needs to cultivate a obedient trust worth slave class to run the companies he owns and make him money while in his spare time he pine’s whoes, your wives and bros….

You will go into debt, or your parents will spend a fortune in our universities so you can get a certificate that proves to the master you are a certified rule follower, that you will not question, will not steel the customer list, and have any instinctive deductive reasoning skill quashed. He wants you just smart enough to login or push a button and that’s it.

Lying is the most skillful tool in any successful persons tool chest…..You can’t go far in life or a poker tournament without it.

When you become a certified crafty layer like me mind you that requires lots of practice you can spot a fibber a mile away……….

I read many post here, I see through all of them because I am the best…………fibber around.

Slowly but surly I will teach you grass hoppers…………………

I read many posts here about the banksters, those evil people out to screw the little man….So far from the truth it’s funny. An equity trader, swaps trader, a commodities trader defiantly want to f the counter party, but it aint you….You never went to the right school to even be a candidate to be counter party.

For you are the one’s that serves them beer, or cleans the toilet, does their accounting, or manages the slaves, or fixes the computers.

And you know what you have convinced yourself you are happy doing it. That’s what they consider an education….

Kids, Thank god I am stupid and dumb, can’t spell, You all have me to learn from, for I am the One and only Smoking Man…………

So when the next dude who attacks my spelling I won’t respond, but you know what I will be thinking……….

Damn I’m all over the place tonight to many beers at the Duke of Devon………

The point I’m try to make is most of you posters have an agenda, you are all trying to sell your bets, and you are just bad at it……. 90% of you are bad lyres…..

No creativity, just links to other people trying to sell the same bet……….Pathetic

Don’t buy a condo kids……………………….

#11 Marco from the bestest place on the smallest part of earth on 08.10.11 at 10:25 pm

It will be the one where the CREA’s marketing machine will spin up the most drivel, furthest removed from common sense, catering for the most vulnerable market segment, the hormonally fueled, houselust driven, status seeking, never experienced a downturn, only looking at their feet when they are walking first time buyers… So I suspect the Van market, followed by the Toronto “investment property” condo market…

The local boat market has collapsed, car market? well, Audi is doing deals… Stores on much longer sales… Something’s afoot…

#12 DM in C on 08.10.11 at 10:25 pm

Hm. Vancouver, Victoria, Calgary, Saskatoon/Regina, St. John’s.

What about thoughts on PEI? They certainly aren’t making any more land there! Unfortunately not many jobs either, unless you want to potato farm. Or work in tourism.

#13 mike on 08.10.11 at 10:29 pm

Garth, you are a walking contradiction. Is Real Estate in trouble or not.

I am tired of the waffling, I am holding off buying a house based on the blog and your advice in Toronto.

What is your real opinion.

Real estate is local. Learn that first. — Garth

#14 dmc on 08.10.11 at 10:29 pm

Never takes long for the RE vultures to start talking up sharemarket carnage as good for them:


#15 All is knowledge on 08.10.11 at 10:30 pm

I agree with your choices of cities except 416. As the China bubble bursts and finacial crisis spreads 416 average prices especially in 905 should drop by 30% over next 3 years. Its a lack of jobs and wage increases and less money flowing from China which will cause it.

Dude. 416 is 416. It’s not 905. Another country entirely. — Garth

#16 East Van on 08.10.11 at 10:31 pm

Here is my prediction:

Vancouver will have no price decline. In fact prices will increase by approximately 6% per year until the end of time for the following reasons.

1) most existing real estate is occupied by starbucks franchises, yoga studios, and grow ops.

2) When the 2nd half of the 2008 global depression hits all the people who used to have real jobs (and money in the stock market) will ride the rails to Vancouver to work at a Starbucks or start their own grow op, and maybe do a little yoga in their spare time.

#17 Joe on 08.10.11 at 10:32 pm

Interesting list, Garth. I don’t know much about the rest of the country because I’m from Vancouver and my binoculars don’t extend any farther than the Okanagan. Your prediction re Maritimes fairing well is interesting. Huh, learned something. Imagine that.

The GTA as a whole only 15%. You’re kidding? I get what you’re saying about the epicentre of the region not taking a huge hit. But 15% for the GTA as a whole. Does that include the cookie cutter boxes in Mississauga? Geez, that’s like telling us you think Surrey and Burnaby are only going to go down 15%. What kind of doomer porn site is this?

#18 The Original Dave on 08.10.11 at 10:33 pm

I”m disagreeing with G here. What’s Toronto’s household income, $93,000? $800,000 is sustainable? Okay, 15% drop, $680,000 for the average home in the 416….I don’t think that’s sustainable.

#19 vyw on 08.10.11 at 10:34 pm

Vancouver and Toronto will take a pause this fall and then another leg up starting in early 2012. By late spring – May 2012 – prices will be up 33% for YVR and 20% for YYZ due to strong demand, low supply (and bidding wars in choice neighbourhoods).

Windsor should be steady since prices have already corrected.

Montreal is the 2nd biggest metro. If the PQ can be neutralized, prices could actually move up considerably ie. approach national average prices. But more likely, strong demand will boost prices 7-10% there by spring 2012.

All other CDN markets will be topping off or correcting.

#20 Joe Robertson on 08.10.11 at 10:36 pm

Best part about running your own blog is the host can remove any mention of the man with the Beard PPT team only getting a one day bounce as those with eyes to see know whats going on behind the curtain, denial is dangerous for anyones portfolio.

Nice to see this real estate blog sticking to real estate, then again if the yellow brick road had turned down $200 from the call of a top ($200 ago) I’d bet $$$ the host would be shouting!!….the silence is golden $200 further down (up that is) the yellow brick road, lol!

Funny how we now live in a world that if we ignore whats really going on in Europe and the US financial system, the biggest environmental disaster taking place in Japan and the upcoming % drop in over valued “its different here” Canadian real estate…I guess its not really taking place..

I like to deal in reality instead of having ones head stuck in the sand letting the world have its way with your….well in this case your net worth

Good Luck!…with the long real estate short the yellow brick road trade…ouch

I’m planning a piece on saving humanity for Thursday. Do come back then. — Garth

#21 Truth on 08.10.11 at 10:43 pm

Any “made in AB” nut that thinks his Calgary-Edmonton corridor is “different” ought to take a trip down to the forgotten realms in the south and see what awaits them. 4 foreclosures, 8 properties for sale.

You say Calgary-Edmonton, I say Lethbridge-Medicine Hat. Our present is your future.

#22 mississaugasold on 08.10.11 at 10:48 pm

Im shocked that Toronto is not expected to decline that much with all those condos out there. Then again I don’t care anymore as I have no desire to own for the foreseeable future.

#23 R on 08.10.11 at 10:49 pm

Time to accumulate cash..

Pay down debt..

Ignore that offer from TD for a pre approved line of credit (with the usurious interest rate) that popped in the mail the other day.

Stop carrying credit card balance.. (hey, at least I only have one and the limit is sane!)

Perhaps even do something crazy like buy Garth’s book ;)

#24 Neo on 08.10.11 at 10:50 pm


I thought you said there was a zero chance of a stock market crash? Sure looks like one to me. Also, when are you going to finally acknowledge that the U.S. is in the early stages of a Great Depression. The Fed has all but said they expect things to be the same or worse until 2013. So we will have a recession that will at minimum last almost 6 years!?! That’s not a recession and please don’t tell me it ended in June of 2009 as the Gov. maintains.

This isn’t like Japan at all. Japan is a creditor nation with a strong manufacturing export based economy that was supported by their citizens high savings rate. The U.S. is O for 3 in all those categories. Moreover, Japan has been is a Depression holding pattern because the Global economies expansion has allowed them to muddle along. The U.S. doesn’t have that luxury going forward because deleveraging is a global phenomenon not a national one as Japan was 20 years ago. As you always say…this will end badly.

No crash. No depression. No comparison between USA and Japan. Don’t bet against America. You’ll lose. — Garth

#25 buylow on 08.10.11 at 10:54 pm

Hi Garth,

What is your opinion (or maybe someone else may be able to help too) on US Reits like NLY or others in the same sector. Especially now that rates in the US will stay low for 2 yrs – which should help these type of REITs correct? Thanks

#26 Min in Mission on 08.10.11 at 10:58 pm

North Vancouver – Most
Mission – Least

#27 squidly77 on 08.10.11 at 11:00 pm

I was talking major cities where 70% of the Canadian population live.

#28 Carlyle on 08.10.11 at 11:01 pm

I think 905 will take a bath. Milton, Brampton, Vancouver, Burlington, and Oshawa.

I think 416 should do ok.

Ok advice time and question to Garth. My dad is 69. Mom is 65. Total income maybe around 70 – 80k. Home is a 1600 sq ft town at port union and Lawrence on edge of scarborough and Pickering 5 min walk to rouge hill station. Mortgage around 1400 a mth. House value maybe around 380 – 400k. Next to nothing in equity (they did the house ATM thing multiple times). Probaly around 59k equity. Debt around 20 – 40k. Fathers health failing (he still drives transports but is not looking good). They also have a trailer in georgian bay and commute all summer long from honey harbor to Toronto, 2 cars, one new with 5 years left of payments.

I’ve been telling them to sell at their age it all seems crazy. I think Dads plan is to work until he dies and let mom collect life insurance (likely 250k maybe more). Secondary plan is to hope home increases in equity.

Don’t know what advice to give feel like they are screwed no matter what but I love my parents despite financial flaws and want to give best advice possible. They weren’t good with money but raised good kids. Opinions?

Should they sell? I’ve been saying

I am happy to chat with them. Working until you fall over is not a financial strategy. Contact me offline at [email protected]. — Garth

#29 Condo Sucker on 08.10.11 at 11:03 pm

I agree that the 416 region can potentially hold its value despite the absurd and unaffordable prices we are seeing. This will always be the land of opportunity and of plentiful jobs, unlike Vancouver.

It’s certain pockets of the 905 that could be in trouble. At some point folks in areas like Milton and Burlington are going to realize that paying inflated housing prices and spending 2.5 hours of your day commuting are not a winning formula for a high quality of life.

#30 Rich Renter on 08.10.11 at 11:04 pm

We’re already expecting another boom here in Alberta so not to find Calgary or Edmonton on your list is shocking. You really need to get out that bunker more often.

I’m sure everyone’s pumped by that 28% drop in oil prices. — Garth

#31 Cory on 08.10.11 at 11:10 pm

I don’t think the CDN market will crash at all, or even correct from here..except Van and other BC locales.

Why? rates are not going anywhere. The world is full of “fear” in regards to currency, defecits, debt etc and bonds skyrocket as a result????!!!!! While gold rises along with the USD sitting pretty. 10 year treasuries hit a record low yield from money piling on.

So Garth, while I agree with your logic on why real estate prices should slide, that’s what’s wrong with your argument……logic.

#32 All is knowledge on 08.10.11 at 11:13 pm

Dude. 416 is 416. It’s not 905. Another country entirely. — Garth
As you often quote real estate is local..agreed. Some areas of 905 have much higher average values than some areas of 416..eg Scarborough, Malvern and Jane Finch. Indeed 905 maybe another higher income and higher value country.

Hardly. — Garth

#33 Jan Etter on 08.10.11 at 11:23 pm

416 may only be 15% on average, but since real estate is local I would further subdivide the 416 into: a) demand neighbourhoods along subway lines and/or established neighbourhoods populated by the financial/government/executive class who have been relatively insulated from the market turmoil and have relatively better job security; b) already overheated pockets of the former boroughs of Scarborough, Etobicoke and North York populated largely by the working class affected by manufacturing slowdowns/layoffs/shutdowns with little resources to weather the storm; c) condos, too many of which are owned by “investors” with more supply on the way, and d) the rest.

My guess is a) will dip less than average (except for new-money high-end areas like Bridle Path which could suffer proportionately more), b) will see a greater-than-average retrenchment, c) will probably see the most severe drop by a large margin (as in 1990-91) and d) will be around the average.

I agree 905 will get hit more than 416, but I predict Brampton and Mississauga are likely to be hit harder than Richmond Hill and Markham due to demographics (draw your own conclusions from the Statscan website). Within the 905 areas with a large % of recent builds will be hit harder than more established 905 areas.

#34 Spaz Mogen on 08.10.11 at 11:23 pm

I have to disagree with London (assuming you meant Ontario).

The current unemployment rate of 9.1% will spiral higher as FORD closes in September. For each line job there, there are 6 more elsewhere supporting it. 1000 at FORD are out of work next month, and around 6000 more in trucking/feeder plant jobs. This will not end well. I would not even buy a place to rent to students this year, but perhaps in about the spring of 2013…

#35 T.O. Bubble Boy on 08.10.11 at 11:25 pm

Least affected? You’ve got to look for cities where:
A) The price run-up hasn’t been as steep.
B) The economy is holding up – cities with one major industry are far more at risk than those with diversified businesses.
C) There wasn’t as much evidence of a “mania”, i.e. where the real estate insanity hasn’t taken hold.

So, here’s my Top 6 least affected:

1) London & Windsor — I group these 2 together, because they’ve both already taken their hits from the auto industry / manufacturing layoffs, and both have Universities and other steady businesses to keep things stable. London is also attracting a decent number of retirees thanks to the many hospitals and other services.

2) Halifax — diverse economy, including multiple Universities, tourism, and the military. Also, a house price index of 134 vs. the national average of 142.

3) Newfoundland (St. John’s) — mainly because they are forecast to have the biggest improvement when it comes to the unemployment rate. Affordability is also decent.

4) New Brunswick (Fredericton/Saint John) — same reasons as Halifax, but the economy is not quite as diverse.

5) Montreal — diverse economy (despite the low wages), and house price index right in-line with the national average. Also – not even close to the mania that exists in Toronto and Vancouver.

6) Yellowknife — $121k average income, but the average house price is still only slightly higher than Hamilton’s. ’nuff said.

House Price Index:

Affordability Index:

The GTA market will take a serious hit in the condo market, and a few bad years for Bay St could also wipe out the high-end of the market. I agree that having an actual economy will help, but the GTA is catching up to Vancouver on the real estate insanity rankings (I think HGTV shows in GTA bars now instead of sports). Therefore, despite having by far the most diverse economy, and being the lowest on the house price index, the GTA does not make my Top 6 because it is among the worst for the “mania”.

For tomorrow’s list: Victoria will definitely be in the Top 6 most affected, if not #1. The evidence of a melt is already there: a TON of listings, and sales grinding to a halt. Next step for Victoria is the price decline — a race to the bottom as sellers realise that asking $600k for some dump just because it has a rental suite is not going to fly. One of the only reasons that Victoria might not be #1 is that there will continue to be some activity at the high end of the market — a few trophy homes sold to Asian buyers each month might just keep the average price high enough to stay behind the Okanagan and/or Vancouver. Brampton and Milton may also make that Top 6 list, despite being a part of the GTA — it depends on how you group it.

#36 bill c on 08.10.11 at 11:28 pm

your dead wrong. Toronto will be hit the hardest.
24% of homes are owned by investors.

#37 TurnerNation on 08.10.11 at 11:28 pm

Here a local problem of a false economy: not so many years ago an average home in the Beaches area of Toronto ran 350k, with 500-600k required for a top of the line reno’d property.

People infused with flip this home ideas bought up the 350k’ers and reno’d them into 500-600k jobs.

Fast forward and an average house costs 500-600k with primo joints running up to 1mill +

The problem is, at both price levels the houses are fully reno’d. You spot the problem? The cachet of a Beaches house is now measured by its respective level of renos (aka the owner’s line-of-credit balance) rather than by its intrinsic value (if any, but hey people must live somewhere. I’d pay a ton not to sleep on the streets).

This is why we see bidding wars on the few remaining ugly ducklings: ever one’s a reno winner.

Key point: stead infusions of reno capital are required to keep this game running.

Interestingly, RONA hit new lows recently:


#38 InvestX on 08.10.11 at 11:30 pm

So after a while on this blog mentioning Toronto as an example of a city with overpriced, bubblesque real estate, you now consider it to be likely spared by a correction?

#39 GTA Girl on 08.10.11 at 11:31 pm

Thankyou. Thought I was insane seeing new homes being listed in north GTA as those below 401. Especially the semis and town homes up near Mjr Mac. $550k? For a townhouse$ made no sense

#40 TurnerNation on 08.10.11 at 11:31 pm

By the way GM had the perfect electric car years ago but Big Oil crushed it – literally:


Why did GM crush the EV1??

“Range problem??”
The NiMH EV1 had an EPA certified range of 140 miles on a charge; none of the EV1 lessees complained about the range. So if the customer wants the car, despite what someone else says, why not sell it to them?

When GM crushed the EV1, it drove away its own customers, who went to Toyota. Toyota was happy to take our money and sell us the Toyota RAV4-EV, last sold in Nov., 2002. If there was no “liability” issue for Toyota, GM did not have that excuse either.

“Not enough electric??”
Far from a shortage of electric, being able to buy a plug-in car would actually help the utility grid. The EV1 charges slowly, at night, when there is too much electric; and the money you save NOT buying gasoline will more than pay for your rooftop solar PV system. This isn’t fantasy, it’s FACT; hundreds of Toyota RAV4-EV drivers put solar on their roof and now drive for free, free of pollution and free of cost since the money they saved paid it off years ago. But you can’t do this unless you can buy a plug-in car, none are offered for sale by the Auto Alliance.

“Battery too expensive??”
The EV1 came in two “flavors”: one using advanced NiMH batteries, and the other using cheaper lead-acid batteries. With PSB EV-EC1260 lead batteries, this EV1 had a range over 100 miles on a charge. The cost of this off-the-shelf battery pack is no more than $4,800. The rest of the EV1 is just electronics and bent metal. As for Nickel, it’s entirely recyclable; after the Nickel battery wears out, perhaps 200,000 miles, the only expense is melting it down and “reforming” it into a new battery, using all the old metals and components.

“Cost too much to build??”
Lutz stated that the EV1 would cost too much to build. But in 1994, GM bought control of the NiMH batteries under guise of going into production, and, in 1996 and in 2000, famously claimed that it would have leased as many as people wanted, it was a “production vehicle”.

#41 Joe Robertson on 08.10.11 at 11:32 pm

#23 Don’t bet against America. You’ll lose. — Garth

I’ll continue to take the long trade against America which has been correct these past 11 years as the US$ index has dropped 40% !!

One doesn’t go long America on its fundamentals you go long on further currency devaluation as the Feds are going to introduce QE#3 very soon which will revalue everything priced in US$ higher just as it did March 09 and Aug 10 it clearly shows on the charts.

Its not about depressions or saving humanity Garth its about stagflation and protection of ones net worth from currency devaluation as the only out the ECB and Feds have is further money creation to bail out the financial system.

I’ll stick around until you get it….

Already did. You can go now. — Garth

#42 Conflicted Pumper on 08.10.11 at 11:33 pm

I saw a rerun of an old 22 Minutes episode last week. There was a clip of someone pumping Nortel saying the correction in their stock price was only transitory.

I hope every pumper here that said they were going long equities ahead of the debt-ceiling vote actually pulled the trigger. When the Bernanke put only buys you a rally that lasts 24 hours, you know you are screwed.

#43 TurnerNation on 08.10.11 at 11:34 pm

US GDP no longer in recessionary period? Chart:


#44 Ryan on 08.10.11 at 11:37 pm

# 1 Vancouver
# 2 Kelowna
# 3 Victoria
# 4 Nanaimo
# 5 Toronto
# 6 Inuvik

#45 2or3orsometimes7 on 08.10.11 at 11:40 pm

Missing from the ‘least’ list? Vancouver. Yes it will fall, but not very much. There is a steady stream of locals whose children are growing up, who have never ventured anywhere beyond Burnaby/Richmond (sad, I know), who say with all sincerity ‘this is the most beautiful place on earth!’, who fear having to leave Van more than anything else in life. And there are some children of immigrants who are very connected to their ethnic roots in the city, for whom leaving would be once again an uprooting they don’t want to face. A lot of these people are already renters, and are happy to stay that way if it means they can live in Vancouver. Then there are other Canadians such as myself, who come for a few years and realize ‘wow, not having to deal with bitter house-arrest conditions of winter is kinda nice’. If you want to stay in Canada because of educational licenses/training or fear of US politics, but don’t want to freeze your a** off, and wait 4/12 months (that’s 33% of your LIFE) indoors waiting for when you can get outside, there are not other options outside of southern BC. Then there are the rich elites, internationals, etc who don’t batt an eye and can keep a vacation house whatever the cost.

BC has a record of lowballing wages for all sorts of professionals, because they know that there will always be a significant proportion of people who will want to live there no matter what. If you don’t like it, leave they say. And so the locals suck it up.

I am originally from Ontario, lived in Vancouver for a few years, then 416, and I can see the allure of settling in Vancouver (and renting). Summer in TO is fleetingly short, and wasting time driving to the cottage makes it even shorter. If you live in Vancouver, you don’t deal with that. You come home each day, and that water escape is at your doorstep. Sure one could work for 20 years in Alberta or Ontario, make more money, and retire early on Vancouver Island. But why would you work 20 years for something you can have now, albeit with financial sacrifices. There are many things more valuable than money – and Vancouver has a disproportionate amount of those things. So I can’t see the RE correction being as big as other cities.

#46 etf fan on 08.10.11 at 11:43 pm

I loved the quip about London. Too many bylaws? Absolutely. An anti-idling bylaw was just passed to prevent folks from waiting for one of the many trains passing through the downtown while their vehicle is turned on. The trouble is, there is no one to enforce this rule and if the temp is too high or low outside you can idle all you want.

However, London’s unemployment number was just released and we now lead the country (bumping up against the 10% level). With a city still heavy on employment from manufacturing I’m not sure if the University and Hospital workers can keep housing prices propped up for much longer.

#47 Adviser on 08.10.11 at 11:47 pm


Here is what I would recommend for your folks:

Sell the house, sell one vehicle, pay off all debt, apply for maximum possible retirement benefits available, reduce consumption, find a seasonal rental, spend summers at the cottage/trailer.

Breakdown of possible benefits:

CPP max $960 per month per person
OAS max $560 per month per person (clawback starts at $60K)
GIS max $620 per month, subject to (clawback at $20K per couple, varies on individual basis)

All together a couple with decent CPP income, full OAS and unreduced GIS can bring in about $30,000 to $35,000 annually, with taxes largely eliminated due to nature of benefits and personal exemptions.

One car needs to be sold as maintenance, depreciation and insurance adds up.

The house needs to go as values are at peak, while your folks obviously can’t afford maintenance and upkeep on the property.

Father needs to cease working, enjoy life while he still can.

In either case the situation is not looking great, life insurance will definitely provide for the mother, but the crucial time is now, when both are alive, expenses are high, while income will drop drastically as soon as your old man will stop working.

Keep in mind these are just my personal musings and Garth will surely provide a more exhaustive answer to your situation.

Cheers and good luck,

#48 Deano on 08.10.11 at 11:55 pm

Parts of 905…crushed. 600k execubarns in Ancaster, 400k “cottages” in Dundas, ridiculously priced anything in Burlington/Oakville. Don’t get me started on moronic places like “Brooklin”, east of 416…

#49 Kevin on 08.10.11 at 11:56 pm

I’ll take a stab

1. Kelowna. Double digit MOI and part of the Okanagan region which some parts have over 20 MOI. Some developments in the OK are boarded and fenced up because work has stopped. Confidence has definitely tanked in the Okanagan and Kelowna is near all of this. Who will want to buy there when it looks like a housing bubble bomb went off?

2. Victoria. This place is dependent on relatively wealthy Canadians moving there.Victoria NEEDS people to move there to buy their expensive housing. But who will move to Victoria and buy homes if the whole nation falters and people are trapped in their homes because of lower equity, no equity or just plain scared shitless to move. Almost 10 MOI. Prices too high, no real economy and no HAM to bail this place out.

3. Vancouver. Over a million bucks for a crack shack? One of the most unaffordable places in the world when factoring in local incomes. This place will see the biggest monetary loss.

4. Calgary. This place is a wounded duck. Busted hard in the 80’s. Got hit pretty hard in 08, still has not fully recovered, walking around with a concussion. Prices still sky high. A commodity slow down will put this duck in the roaster.

5. Saskatoon. At least 30% overvalued when looking at historical valuations of house price to income, house price to earnings and house price to inflation. The City of Saskatoon has doubled spending in 6 years and once all these “needed” projects are done, the city will be near the debt ceiling. You don’t have house prices triple in a decade or double in a few years and not see any fallout. A commodity slowdown will bust this place.

6. Toronto. It has busted before and will bust again. An overbuilt condo market, with prices too high will drag this puppy down. It is usually near the top of the list for forecasts of housing prices falling.

#50 Not Wondering Anymore on 08.11.11 at 12:00 am

Victoria and Vancouver have to head the list for most at risk. I realize the dropping oil prices will cause issues for Alberta but dumb and dumber live here in BC. I look at myself living here in Victoria (renting – sold the house) and pulling in a good pension with plenty of well paid extra part time work. And yet there’s no way I could afford to buy an average house (over half a million) and sleep worry free at night. So if I’m considered to be in the “middle class” and I can’t afford to buy another house without a mortgage that would screw up my retirement, then who’s buying these houses and why? Answer: dumb and dumber.

#51 syd on 08.11.11 at 12:04 am

15% for GTA. GTA experienced 15% only in the last 2 years. Are you saying the prices for GTA will only go back to 2009 levels. Pardon me, but were’nt your saying that T.O was overpriced since your blog started….

Also not sure why you keep comparing to USA !?!? I have yet to see any impact in the Canadian market by taking the U.S example and it has been going on for a long time. Infact the canadian market is doing just the opposite as far as housing is concerned. Really confused….

#52 cata on 08.11.11 at 12:05 am

lol…..keep waiting for declining prices, however sit down because you miss the bus…lol

#53 BC Bring Cash on 08.11.11 at 12:07 am

I feel one of the biggest losers will be the Kelowna and the Okanagan Valley in BC. The market here admitted by local Realtors has been in a slump since the 2008 financial crisis. The situation is slowly sinking much like Vegas. Speculative buying was rampant and prices were and still are ridiculously high based on local economic conditions such as people employed, wages earned, etc… The two biggest employers in town are the school board and the hospital. Service industry city all the way.The manufacturing industries that were here left for overseas long ago. Welcome to Broke-Onagan.

#54 a prairie dawg on 08.11.11 at 12:10 am

St. John’s Newfoundland, hands down.

I’m not picking on the newfies here either, just reality as I see it. Before there was a Great Depression 2, that whole region was already decimated economically. Extremely high unemployment for years, fishing industry in tatters, and with no real upside in local growth on the horizon.

And since it didn’t rise a bunch in value there, compared to most other regions of the country, it won’t fall as much either.

But I reserve the right to be wrong. lol

#55 yukon don on 08.11.11 at 12:13 am

Penticton land of speculators and retired folks. Nobuddy wants the small downtown houses , priced above average working peoples wages or the big houses and properties. Empty condos and spec land now on market. Down turn is already here.

#56 Paolo on 08.11.11 at 12:14 am

Cheap money is back. Interest rate hike (and a substantial) one is only thing I see putting a stop to the insanity here in Canada. Now US Fed makes a promise so maybe something will trigger in another part of the world and that just may be Europe. Once again the inevitable takes a twist and a turn and is pushed farther down the road.

#57 Joe on 08.11.11 at 12:14 am

A note from the Lower Mainland ‘burbs. Today I noticed something interesting: The guy across the street who’s had his house up for sale for about a month was getting the roof redone today. Could’ve been an offer with a building inspector that pointed out a crappy roof, but I’m going to put my money on he’s trying to create a comparative advantage because there are A LOT of 3 bed 2 bath homes in the ‘hood that have been on sale for a LONG TIME, we’re talking half a year. Dude around the corner from new roof house had house on market as least since January or February. Took it off the market a few weeks ago and it reappeared on MLS with a brand new kitchen.

Signs of a buyers market if I ever saw one.

#58 connie on 08.11.11 at 12:28 am

I believe that all cities in Canada will get a hit even with low interest rates.

#59 Nostradamus Le Mad Vlad on 08.11.11 at 12:39 am

As no one can predict the future with any degree of certainty (read between the lines and postulate), I venture to say . . .

Nanaimo, Victoria and Prince George, Calgamonton, Winnipeg, SaskaRegina and La Belle Provence. BC and Ont. are good bets to melt like hot butter.
300,000 pounds a week Is it any wonder why unemployed youth, who have nothing to look forward to, are rioting when a soccer player is offered these weekly wages? Japan govt. leaving Tokyo? Interesting POV No matter your politics, this makes good comparisons between a plane crash and the 2012 elections.

US military prepares, but are too busy bombing other countries; Link in South Africa has the highest unemployment rate and largest strike action; 2:06 clip For those that use Facebook, you may want to avoid it on Nov. 5.

4:45 clip Dylan Ratigan loses it, because both parties are controlled by an outside force (not named, for obvious reasons but their country is in turmoil too), and Financial Terrorism See head and subhead for details; Middle Class Death “On August 5, 1981, President Ronald Reagan fired every member of the air traffic controllers union (PATCO) who’d defied his order to return to work and declared their union illegal.”; Boob Tube Expiring subscribers and losing revenue.

Headline speaks volumes, story isn’t bad; Celente 2008 Love or hate him, Celente was almost bang on in 2008 when he said this, and this; Lew Rockwell “S&P doesn’t have clean hands, of course.”; Portugal loves the IMF; Toilet Paper The US debt, that is; Hmmm. Could be right.

#60 Ex-Halifax Pro-Cowtown on 08.11.11 at 12:40 am

Just can’t see folks rushing out to bid on a $1.2 million house on a 30-foot lot in Leaside because five-year mortgage rates have declined two-tenths of a point.

You’re not underestimating the Greater Fool are you? Not you!

#61 VicHomeOwner on 08.11.11 at 12:52 am

Victoria, Vancouver, Calgary? or is that just too obvious?

#62 Kitchener1 on 08.11.11 at 12:56 am

@ smoking man,

Duke of Devon– awesome pub buddy, was my regular spot back when i lived in toronto!!

got to say that i agree with your post. Critical thinking is not something that is taught in schools, better to go with the flow.

Back when i was in university, first year, i wrote about what I thought was right and truly beleived in– soical justice etc…

then a funny thing happened, when going against the view of profs or teaching assitants, my grading got a lot more strict. Same quality or better paper, but much lower mark.

After that, I just wrote whatever they wanted to hear, researched what journals the professor was published in, what groups the teaching assitants belonged to etc.. and wrote my essay;s towards their point of view, cited their own sources or sources they were familiar with etc.– grades went up substanially, i had to put in much less time everyone was happy.

When i mentioned this to my then university girlfriends, they were offended, like it was so wrong etc… I would have written you an A paper on why the death penalty is great if thats what the prof agreed with, although i disagree with it 100%

Just how it works man, its about going with the flow.

Its stragedy, game theory whatever you want to call it.

That was one of the most important lessons i took away from University. Knowing how to pick your battles and when to stick to your guns and when to go with the flow.

In the business world, its all about presenting ideas, selling ideas, closing deals or making them happen. Smoking man is right though, i have seen many fakers and people who lie go on to huge posistions and get nice raises.

Most people will deny it because it goes against what we are all taught as kids, want to go far in the biz world, you better leave your morals at the door. thats the truth

#63 Boombust on 08.11.11 at 1:02 am

Well, if it’s Vancouver, it’s sure taking a bloody long time. To be bloodied.

#64 ATP on 08.11.11 at 1:11 am

St. John’s, NL is perhaps the least talked/cared about “bubble”. The over-confidence from oil and wealth effect from the recent housing boom is evident on the streets. Without net in-migration, virgin buyer exhaustion will fold this one.

#65 reality guy on 08.11.11 at 1:12 am

We’re already expecting another boom here in Alberta so not to find Calgary or Edmonton on your list is shocking. You really need to get out that bunker more often.

I’m sure everyone’s pumped by that 28% drop in oil prices. — Garth

Don’t forget a slower world economy meaning less demand for oil. Also the oil sands are harder to extract oil from. So I expect that to be put on hold until oil prices goes higher which is at least 3 years from now judging from what helicopter Ben said yesterday

Yep another 2.5 years (at least ) of a global slowdown.

I agree with you Garth , there will be no recession. Actually there is no such thing.

If your working all is good, if your laid off or unemployed and there is no employment in site, its not a recession its a

#66 terces on 08.11.11 at 1:17 am

A comment about Alberta being the only non recourse province. I believe that if you are CMHC insured that you fall under a federal statute in Alberta and that your loan is subject to recourse. Therefore a lot of the 5% down, 7% cash back borrowers are going to squirm real hard before they let go.

#67 terces on 08.11.11 at 1:17 am

I watch the town of Canmore real close. It is an Aspen wannabe and for quite a few years prices tracked the inner city market in Calgary quite closely. Interestingly, there are a lot of Edmontonians who have bought in Canmore. In about 2006 the prices in Canmore diverged and began their own spectacular ascent. It is not as nice of a place to live as it may seem on the outside as the weather is often compromised. Now to the point – there have been very few sales here for months. I receive a realtor update whenever there is a change, and there have been lots of price changes. On Tuesday alone there were six emails from the realtor with about 8 price reductions. Is this a canary in the coal mines of Canmore, for the rest of Alberta or is this a stand alone collapse?

#68 JB on 08.11.11 at 1:20 am

Saskatoon belongs somewhere around $245,000 to $265,000… That is being generous…

With the socialists being booted in 07 I think we would have been near my suggested numbers if we hadn’t been on emergency rate life support for the past few years. Growing (emerging) economy in Skatch + Emergency life support = S’toon Average House price due for a $62,000 haircut…

#69 Ghost of Tom Joad on 08.11.11 at 1:22 am

No crash. No depression. No comparison between USA and Japan. Don’t bet against America. You’ll lose. — Garth

Tell you what – I have to respectfully disagree with you Garth. My little company has done software and hardware installations for small US gov’t facilities for years. In my travels I see pretty much all broken down towns that have all seen better days. Not like our big cities – they just seem broken down. The people are nice, but they’re scared because they can sense that things are bad there. On every visit, I’ll have someone tell me they thought about moving their family to Canada. Many of these gov’t workers that I meet there have two jobs to get by (seems like everyone needs two jobs there). Hard times – getting worse. Sorry, but the US is going down hard – the only question is when. I’d advise for all fluoride heads is to get some insurance and buy gold.


#70 bricklayer on 08.11.11 at 1:22 am

Yellowknife and Whitehorse should not decline much (?).
Alberta will depend on the oil price and at what oil price companies start pulling the pin and stop spending. Nelson should hold its own though crop prices are down from a few years ago.

#71 Thetruth on 08.11.11 at 1:22 am

It is different here.

Canada has the highest immigration per capita rate in the world coupled with the most onerous restrictive land use policies. It’s supply and demand. Yeah, that simple.

Nothing to do with interest rates. Otherwise USA would of had a RE boom too!

#72 BigAl (Original) on 08.11.11 at 1:25 am


Milton’s not about being near Toronto. It’s about being dead centre surrounded by Toronto, Mississauga, Brampton, Oakville, Burlington, Hamilton, Kitchener/Waterloo, Guelph. Its at the centre of a golden circle of people, business, and industry.

I chose Milton because of this, so I open up my choice of job/business options without having to move. Very much preferable than the hinterlands of Newmarket to the north, or Ajax/Whitby/Oshawa to the East.

I left London because the businesses there are lame and don’t realize that there are 325,000 consumers in the city who are NOT U.W.O. students. The downtown is horrid and skidly save for a few blocks on Richmond. Old South is overrated and reminds of the Chekhov quote “The most intolerable people are provincial celebrities”….artsy yuppie hippie HGTV porn addicts. Its OK I guess until you hit the skids at Wharncliffe. Masonville and Richmond Row have lots of pretty girls though. Byron is Stepford-wife land.
I pay the same for daily parking in North York as I did in London downtown.
London’s ONLY advantage is commute time is very low.
Old homes are cheap, newer ones only about a 5%-10% discount from most 905 prices – hardly worth it.

#73 Eileen on 08.11.11 at 1:30 am

I absolutely agree with you Garth on 2 points:

1. Real estate is local – absolutely!!

2. 416 – Toronto area. I preface that statement with the condition to look at point number one (even within the 416 – it’s all about location).

I also agree that Toronto is one of the largest cities in Canada, with an industry (outside of Tourism i.e. Vancouver)… it also has a couple of large Universities, a few community colleges, a subway, an international airport, major renown research hospitals in Canada (i.e. Sick Kids, TGH) etc etc.

Plus, in a recession, one thing that always flourishes is academia and the pursuit of higher education … and we have that in Toronto. That will be a boon to Toronto.

Basically, when immigrants migrate to Canada, Toronto is one of the top choices they will consider. Plus, take the 6 million Torontonians who believe Toronto is the epicenter of the world, and well, it will all help aid the 416 area to survive this downturn (somewhat).

I do not know enough about the rest of Canada to say anything beyond what may happen to Toronto.

#74 Two-thirds on 08.11.11 at 1:31 am

Perhaps this list will help those inclined to submit their entries for worst RE decliners:


The link leads to the Canadian Banker’s association mortgages in arrears monthly figures.

As of May 2011 (arrears as a % of total mortgages):

Canada – 0.41%
Atlantic provinces – 0.44%
Quebec – 0.35%
Ontario – 0.32%
Manitoba – 0.27%
Saskatchewan – 0.34%
Alberta – 0.81%
BC – 0.47%

Can you spot the dud?

Would it be more surprising if you knew that in May-June, 2007, arrears in Alberta were only 0.14%?

The all-time high for the given data set was January 2011 – 0.84%. The previous all-time high – 0.69% was reached in February 1997. I have been told the late 90’s were so much fun for mortgagors. Thus early 2011 must be 22% more fun than then.

In less than 4 years, there has been an almost six-fold increase in the mortgage arrears in Alberta. In the same period, total mortgages increased by roughly 12% to stand currently at 511,573.

As for oil galloping to the rescue, consider that the Energy sector (gas & oil) accounts for only 31% of Alberta’s total GDP:


Plus cheap natural gas appears to be here to stay. Shale gas, anybody?

Historically-low interest rates since 2008 have failed to stem the rise in mortgages in arrears in the province.

This is no doomer talk, just fun facts.

#75 Rico Suave on 08.11.11 at 1:34 am

Re: #15

Dude. 416 is 416. It’s not 905. Another country entirely. — Garth

Yeah, we’ve heard it, everyone wants to live there.

#76 Kilby on 08.11.11 at 1:39 am

Victoria, Kelowna, North Vancouver, Abbotsford, Nanaimo. Having just spending 2 weeks in Ontario, Ancaster, Whitby etc…they seemed far more reasonable than “Out West”

If retirees can’t sell their prairie houses for much, they sure aren’t going to be flocking to Victoria, Kelowna and the Upper Island. To top it all for Vancouver Island are the ferry fares which used to be a part of the highway system but are now approaching international ferry prices. Lots of people say “Love Vancouver Island” but the costs of getting on and off are too high, the kids can’t afford to visit”

#77 KarlHungus on 08.11.11 at 1:40 am

you realize the average price in edmonton is $334,000 right?

#78 American on 08.11.11 at 1:43 am

Hey Neo,

In terms of great depression for the USA… it’s hard to say that from where I am right now. In Palo Alto, California… money is flowing like there is no tomorrow. Many companies have gone IPO, and there are still other tech companies lined up to go IPO. Once they do, what happens (from my personal vantage point) is that the stock money gets liquidated and deposited often into real estate in the Bay Area (usually Palo Alto, or Los Altos etc).

Homes are still selling over asking, and bidding wars are going on here. Salaries are being ramped up like crazy as well. I have heard Cisco has had a lay off recently though.

But look at how when everyone gets worried, they run back to purchasing the USD (as seen by the run up in USD recently).

I don’t see a great depression happening anytime soon. But as a Canadian, why would you want that to happen? Canada’s economy is so tied to the USA that it would not be good for Canada either, no?

However, as NORTH AMERCIANS, I think we should all be concerned about the overall debt of both countries. Clearly, USA is in this pot where the temperature is being raised, and it’s like the analogy of the frog, who doesn’t realize the temp is going up. USA has this huge debt… and it’s banker is China. That is the scary part, on so many levels.

For now, I don’t think it’s in China’s best interest to jeopardize the US economy. So we won’t be seeing China dump the USD. However, we should all be concerned that China is emerging as a world super power. Do NOT bet against the Chinese….

Buy, hey, I don’t hold an economics degree. But I did want to say, that right now… in the Bay Area… the epicenter of innovation of technology …. everything is super cheery and bright… money is flowing, and people are getting wealthier from it over here. No feeling of impending doom yet.

#79 Bogdan on 08.11.11 at 1:45 am

St. Catharines and London should both be part of the “least risky” top in my opinion.

“Most risky”:
– Vancouver (after a long hangover the Chinese will sober up)
– Victoria (a too expensive retirement home for the bankrupt boomers)
– Kelowna (where the f**k is that?)
– Edmonton (with commodities tanking, oil included, Edmonton and Calgary will have to suffer, more Edmonton than Calgary, which is already down quite a bit)
– Ottawa (too much gov debt will mean either a stagnant or a shirking government, education included)

There are small cities around southern Ontario that can do very bad if any of the auto factories will get closed, but I can’t predict which at this time.
Saskatchewan & Manibota will do well too, as people have to eat… at some point.

#80 dosouth on 08.11.11 at 1:47 am

I’ll give the next six a shot:

1- Kelowna (Okanagan in general)
2- Victoria
3- Vancouver – LMD(lowermainland)
4ish – Calgary/Edmonton-same city different location ;o)
5- Parksville/Qualicum
6- Wherever you think it is going to improve…

…cause it’s differnt there!

#81 Snowman on 08.11.11 at 2:13 am

“I’m sure everyone’s pumped by that 28% drop in oil prices. — Garth”

The boom has to do with tens of billion of $$$ invested in multi year projects. A two weeks slide in oil prices is irrelevant when you talk about projects which are supposed to start making money few years down the road.
At this time Alberta has the most affordable housing in the whole country (price to income ratio) and a bright mid term economic future.

#82 Aussie Roy on 08.11.11 at 2:18 am

Garth a great indicator that has worked in other boom – bust areas is the simple task of comparing wage growth with house price growth. For what it’s worth my top picks for a correction in Canada are.

Vancouver 9.5 times annual income
Victoria 7.1
Abbotsford 6.5
Kelowna 5.9

Ask yourself, has increased debt driven prices rather than income, yes of course they have (data above). Could more debt drive these prices higher, of course, will peoples attitude towards debt change in the future?, or will it stay at record levels for ever?. What drives this demand for debt is ever increasing prices and the willingness of people to take on more debt. Debt and emotion are currently supporting prices, certainly not wages. Remove this emotion (and the demand for debt) and prices will only have wages and rental return as support, these supports are a long way below current prices. The old value versus price analysis, not a great short term indicator but a great long term one.

What is overlooked by most people is the RE market has been around since the country was first settled and looking at the entire history (as far back as prices and wages data goes) rather than just the last few years shows a completely different story and pattern to prices. It also clearly shows what happens when a market is driven up by debt and what to expect in the not too distant future.

Ignore history and you are destined to repeat the same mistakes – FOLKS.

Can anyone show me where in HISTORY prices have been pumped up by increasing debt and not wages and the market hasn’t crashed and returned to the LTA.

But I suppose people will say but, but ,but, this time it’s different – LOL.

Aussie Update

Even the infestors are getting concerned.



#83 Aussie Roy on 08.11.11 at 2:24 am

I have posted this link before but for those who have missed it, this is how quickly emotion and the attitude towards debt changes as markets change. More importantly it shows what happens when asset prices fall and the debt remains the same.


#84 BPOE on 08.11.11 at 2:37 am

Could very likely happen. Just remember Vancouver will not go up in a straight line it will have bumps along the way. I am already chuckling when the first short downterm in Vancouver happens and Garth and the American will say “See I told you” But just like gold which is going to have $100 swings up and down you need to focus long term not on the day to day swings which many talk about on this blog. We know no as I stated that interest rates are going to stay low for many many years. The renters who waited for the non event of rising interest rates are royally screwed as they mad a UFD Unrecoverable Financial Decision. Look in the mirror renter. Light a beer and open that 2nd 6 pack. Life is tough when your a renter and a step away from the street. No happy person ever rented.

.#19 vyw on 08.10.11 at 10:34 pm
Vancouver and Toronto will take a pause this fall and then another leg up starting in early 2012. By late spring – May 2012 – prices will be up 33% for YVR and 20% for YYZ due to strong demand, low supply (and bidding wars in choice neighbourhoods).

#85 Jody on 08.11.11 at 3:03 am

“And which cities will suffer the greatest percentage price decline over the coming year?”

1.) Vancouver – 90%
2.) Edmonton – 80%
3.) Calgary – 80%
4.) Regina – 60%
5.) Winnipeg – 60%
6.) Saskatoon – 50%

especially if our dollar keeps being devalued. Less than a year ago we were equal with the Swiss Franc, now we are around 70 cents to their dollar. Every currency on this planet is being purposely de-valued, except the Swiss Franc. Why? Because most of the scum bag bankers see Switerland as a safe haven and Switerland hasn’t bent over for the money masters. Gold over $1700, wake up people. “But you can’t eat gold!” No shit, can’t eat fiat money either, so whats your point? The riots in London are only the beginning of whats coming.

#86 Mike on 08.11.11 at 3:05 am

Is there a minimum city size for this? Assuming we can’t just pluck a wealthy suburb that has no more room for more housing I would say:


#87 Daisy Mae on 08.11.11 at 3:10 am

Oh, I suppose you’re going to list Vancouver, Richmond, Victoria, Kelowna, Calgary…. *sigh*

I’m so depressed…I’m going to crawl into the closet and not come out!

#88 Andrew on 08.11.11 at 3:28 am

Garth, I’ve always visited this blog because of your (correct) bearishness on real estate. The only problem I ever really had was that you weren’t bearish enough. Then you started talking about world economics, stocks, US treasuries, PMs, et cetera, and the blog started to go downhill. You’ve been pretty consistently wrong about your short-term predictions, which IMO, are not the kind of predictions you should be making in the first place. You should stick to what you know.

The comment “Never bet against America” is particularly disturbing. It’s every bit as bad as “Real estate always goes up”.

As for the original question in the blog, I believe that with the exception of the occasional town that trips over a gold mine, no real estate market in Canada will go unscathed. The entire country is set up for a huge fall. The bubble is simply too big, with the country’s housing facing about a 90% fall in inflation-adjusted terms over the next 20 years or so. As overvalued as real estate has become in percentage-of-income terms, that’s how undervalued it will have to be at some point in the future.

#89 Canuck Abroad on 08.11.11 at 3:50 am

So that $1.2 million house in Leaside should be okay then? Still seems a bit steep to me.

Looking forward to your list tomorrow Garth. Even within 416, I think there will be pockets that do okay (SFHs in prime areas with fast access to ttc) and other parts that will suffer (condos, lakeshore overbuilt areas, up-and-coming but recently dire areas, etc.) Just my humble opinion…

Carlyle, maybe you could warn everyone when your 69 year old father in failing health heads out onto the highway in a transport truck? Might be a good day for everyone else to stay home.

#90 Thechef on 08.11.11 at 4:46 am

On a much smaller scale, I think Revelstoke will be hit hard. Its a small town in the Okanagan/shuswap where prices have tripled since the announcement of a new world class ski resort, a resort that can only grow from selling RE.

#91 LH on 08.11.11 at 4:52 am

I just put in a bid for a nice SFH in M5R (my neighbor down the street actually). No conditions. Money order for $30000. I didn’t stand a chance, even at the asking price! Clearly this equities puke-out hasn’t hit central 416 yet.

For once, I completely agree with you my sempai Garth, for I think that 416 will massively outperform 905 in the next year.

And if a house I really like does indeed drops 15% or more from what I see as current fair value, I will be ready to buy again. Cash is in the bank, the dry powder has been prepared and I’m ready to roll.

#92 Q on 08.11.11 at 5:16 am

Two of the areas that will decline along the lines of Hongcouver and 416 will surely be Oakville and Muskoka. Oakville because most of the residents (the last 150,000 or so) have purchased an address that is way beyond their means and the bubble is biggest here, with nothing houses (barely white collar) downtown asking $1.4M+ and new “yet to be built boxes” in nosebleed farmland asking $750K+. The majority of people that have arrived in the past 8-10 years to live beyong their means, are a paycheck away from having their leased hummers pulled from the driveway and certainly won’t handle the coming “substantial” property tax increases well. Add to that the fact that many are “stamp people” (those that actually create or contribute nothing useful or tangible to society), stock brokers and promoters, lawyers, bankers and realtors. As for Muskoka….people will be too busy trying to hang on to their homes to worry about an overpriced “mine is bigger than yours” cottage that they use maybe 6 weeks of the year.

#93 Jane24 on 08.11.11 at 5:25 am

TO has to correct as I know so many young families living hand to mouth with everything going into their house and so many older people now unemployed or underemployed. Both groups are just about hanging on and just need one tiny change to knock their house of cards down.

Plus so many idiots with condos on spec that are not even built yet but they are planning their pensions on. Note that these condos when they do get delivered have no way of breaking even and the lucky owners have no way of carrying their investments either.

Plus plus for the price of not much in TO you can buy something really nice in London (the real one) or Barcelona!!!

#94 timo on 08.11.11 at 6:02 am


minsky moment.

#95 SquareNinja on 08.11.11 at 6:12 am

Everyone is saying Vancouver will take the biggest bath… but it will certainly be Richmond, followed by Vancouver. Third is Fort McMurray…

#96 MarcFromOttawa on 08.11.11 at 6:24 am


#97 Neo on 08.11.11 at 6:36 am

No crash. No depression. No comparison between USA and Japan. Don’t bet against America. You’ll lose. — Garth


So you are going to get into semantics with me about what a crash is or isn’t? The Dow went down 2,000 in 2 weeks…That’s a crash. If I told you it would go down 2,000 points in two weeks you could have had the same visceral response as you saying there would be no crash regardless of your definition. Second, if you actually read what I said I am NOT comparing U.S. to Japan as in they are in the same situation with the same outcome. You seem to have these stock responses whenever someone questions you assertions about the U.S. “don’t bet against them, no crash, no depression…” yada yada. I’m saying they couldn’t be more different from the Japan and the global macroeconomic picture couldn’t be more different now than 20 years ago. It is others comparing it to Japan’s lost generation I am refuting. I’m not saying 10-15 years from now the U.S. can’t regain its footing but in the interm they haven’t even begun to address ANY of there structural issues in there economy and political system. But 10-15 years is a loooong time and fortunes will be made just like the last depression for those with cash and be an albatross for those in debt.

#98 Tim Sanderson on 08.11.11 at 6:38 am

On a funnier note….


#99 tomohawk on 08.11.11 at 7:06 am

I’ll vote Moncton, NB as a place likely to be spared. Average income roughly 70K, average house price roughly 170K. Ratio roughly 2.5 : 1. It’s bilingual, so great location for things like customer service centres. It’s centralized between Halifax, Charlottetown, Fredericton and Saint John and therefore the overland transportation hub for the Maritimes. It’s population is growing at about 2% per year which should help keep housing prices up.

#100 Smoking Man on 08.11.11 at 7:15 am

Kitchener1 on 08.11.11 at 12:56 am
Most people will deny it because it goes against what we are all taught as kids, want to go far in the biz world, you better leave your morals at the door. thats the truth

DEAD BANG ON…………………………….

We the sheeple are lyed to all the time, take the interest rate message….Rates are going…they are next week next month next next next……

But if you sit in a chair and have some vodka and think, you will conclude that it aint going to happen.

Anytime a boomer goes to his financial advisor THEY SAY GO WITH 60 70% BONDS lets play it safe you are getting old. Now with all the boomers doing that….It keeps bond prices high, and yeilds low……and more of that is on the way.

But the lyers will tell you rates are going up….and the schoold will buy it hook line and sinker……

Your faux spelling errors are starting to wear thin. — Garth

#101 timo on 08.11.11 at 7:21 am

“Bullish sentiments could be tempered in the short term as margin requirements to trade gxxd have been raised,” Phillip Futures analysts including Ong Yi Ling wrote in a note. “As the costs of trading increases, some investors could be prompted to pare bullish bets.”

It looks like they are putting pressure on the gxxd bugs. Will it work or does the market ignore the speed limit?


#102 Robert Dudek on 08.11.11 at 7:24 am

Vancouver RE is in a bubble, no doubt there. But bubbles can last a lot longer than anyone can rationally expect.

Could real estate in Vancouver go up for another 5 years? Of course it can. It’s more likely that it will plateau and it could be range-bound for decades while waiting for inflation to push up nominal incomes.

Could it crash? Maybe, in the right circumstances. But there is still a tendency for more people to move to Vancouver than to move out of it (same goes for the GTA, but there is more space to build in). There is a long-term dynamic going on: two decades ago not even people in eastern Canada knew much about Van; a decade ago few outside of Canada knew much about it. Now the Olympics have raised the profile of the city such that there is greater and greater interest.

This factor should not be left out of an analysis of future real estate trends.

As long as that sentiment is intact, don’t bet on more than a small correction in Vancouver RE.

PS. The burbs are a different story.

#103 Shane on 08.11.11 at 7:34 am

Garth, I hope Markham is on that list!!!


#104 Cow Man on 08.11.11 at 7:35 am

Garth–” Already did— You can go now. ”

Priceless Garth, thank you.

#105 Montrealer on 08.11.11 at 7:37 am

I don’t agree fully on Montreal being less affected.
You are not factoring in the high income taxes, more expensive gas,vehicle licencing, etc.. which leaves us with less disposeable income. We also have much lower average family income.
There was a study putting montreal at a worse price/income ratio than toronto.

But I would say that the “it’s different here” motto is very, very strong in Quebec and that people are still believing prices are going up forever.

#106 bigrider on 08.11.11 at 7:42 am

Yup, the Italians were right.

Financial(stock) markets are for suckers.

Italy is such a role model. — Garth

#107 Kevin on 08.11.11 at 7:58 am

Garth wrote: “a near-recession guaranteeing recovery will take a lot longer than anyone anticipated”

I disagree that no one anticipated this, but you’re not the first pundit to suggest that nobody predicted this, or it was totally unexpected, or whatever. Since the very beginning of this whole mess, I’ve seen plenty of people predicting that this would take a lot longer than the cheerleader politicians were promising. Ever since the US government stepped in with TARP, auto/bank bailouts, and mortgage restructuring in a desperate attempt to prop up prices, the prevailing opinion of the lowly everyman was that all they were doing was postponing the inevitable, and that this painful correction has to occur. Yet the media kept feeding us soundbites from optimistic politicians, blowing smoke up our tailpipes.

This current threat of a return to a recession does not surprise me at all. But what I do find baffling is that not only are people surprised, but that people like Garth are saying “no one anticipated it,” when there have been people all over the message boards, financial blogs, in the coffee room, EVERYWHERE who have been saying for 2 years that this isn’t even close to being over.

Learn to read before you gloat. I said “it will take a lot longer than anyone anticipated,” not that “no on anticipated it.” There are 500 columns on this site, which should be enough to fill you in. — Garth

#108 bigrider on 08.11.11 at 8:01 am

GTA Girl #40- Townhomes near major mack(richmond hill basically) same as GTA.

Makes perfect sense. 407/yonge/hwy7 intersect near there. Easy to get to 400 and 404.

Yonge is the natural core of the GTA. Subway going to be at yonge and 407/hwy7 within 10 years confirmed.

#109 Andrew Toronto on 08.11.11 at 8:04 am

Garth, perhaps you mean overall in 416, 15percent decline.. I do see certain areas that are not very atractive , Jane and Finch being one.. amoung a few others has well, areas where there are seniors living out their last few years and don’t want to move to a condo , those homes are in desperate need of upgrades.. Plus the fact homes are older and require more maintance.. Most people will rather move to 905 , especially if there is a bigger correction there.

From what I read when a bubble pops ,, The correction starts in the subburbs first and retraces back to the epic center..

Just like when it started to inflate , to started first in the cities and then worked it way out ..

My sentiments ,, I live in 416 (renting now for 3 yrs after taking your advice 3yrs ago) I must say I regret it. But if most canadians are spending more than they got coming in. Any disruption to their way of living plus some fear ,, anything is possible.

We has canadians haven’t seen what fear looks like yet… locally

Look at the riots in the middle east.
look at Greece
look at England
Today Isreal ities are protesting there has well..

the list will grow

Spain, Italy to follow … I suspect the U.S citezins will revolt has well at some point..

Its only the Beginning.. when Candians realize where no longer different , then it will be to late.

#110 The InvestorsFriend (Shawn Allen) on 08.11.11 at 8:09 am

Number 76, Two thirds alarms us with the fact that mortgage arreas in Alberta increased 6 times since 2007 from 0.14% an incredibly low 1.4 per thousand to 0.81% a very low 8.1 per thousand.

All this proves is that 6 times nothing is still nothing. U.S. house arrears topped out closer to 10%, 100 per thousand.

Try again, we are not alarmed by that.

I watched these arrears figures closely for the past two or three years and I expected to see a sharp rise in Ontario due to the 2009 recession. It never happened.

Check Alberta unemployment rate, it’s around 5%.

Alberta does have a portion of workers that are atransient population so that partly explains the almost 1 in 100 that are in arrears. With lower unemployment expect arrears to get better even though they are already low.

#111 bigrider on 08.11.11 at 8:16 am

Looks like you have really softened your stance Garth on the whole “15 to 20% decline followed by a multi year melt” position you had not to long ago.

Really, 15% only in the 416?. I’m starting to agree that the house humpers had it right all along but I haven’t run a site preaching the end of RE bubble for past three years.

Looks like that RE roundtable you were a part of featuring the likes of Brad Lamb rolled over you.

There will be a correction almost everywhere, followed by several years of lousy real estate markets. No change there. But the emerging trend is a simple one – the concentration of disposable wealth. The net housing beneficiary of this will be 416. In other areas, heartache. — Garth

#112 Ex-Cowtown on 08.11.11 at 8:20 am

OK… I’m starting to see a pattern here and I’m getting a bit nervous.

If the most politically palatable thing for governments to do is ignite inflation to cover their debts, doesn’t that put prudent debt-eschewing investors in the cross-hairs?

I mean, that if the governments are irresponsible borrowers, are the irresponsible borrower-investors going to get a pass? And the responsible prudent investor get nailed?

It’s always easiest to rob Peter to pay Paul when Paul is with you.

#113 The InvestorsFriend (Shawn Allen) on 08.11.11 at 8:20 am


That is Garth’s thesis and basically comes down to the fact that you can’t push on a rope. With mortgage rates so low already there is just not much room for an impact.

This is what the Fed is finding too with zero interest rates. They got to the point of pushing on a rope.

Saying yes to a $300k mortgage takes but a moment to pass over your lips but will weigh down your ass for 30 years. Enjoy!

Ignore what anyone else has done. Limit your mortgage to twice your household income at very most. That way if you get a 10% bonus it would amount to the ability to knock 5% off your mortgage.

A mortgage of four times income is almost immune to getting paid off early unless your income is going to soar or you are going to save like scrooge and shop in dumpsters. No sports or movies or new cloths or cell-phones for your teenagers when they get there. Good luck with that. No decent cable package. No vacations. Why would anyone sign up for that?

#114 John on 08.11.11 at 8:24 am

What is the good word in Halifax? stats? Thinking of selling my condo there. Last time I listed on kijiji with lots of interest and showings. Decided to hold on. Screw mls!

#115 timo on 08.11.11 at 8:27 am



The head of treasury risk management for Asia at one bank in Singapore — which has a significant presence across the region — said their credit lines to large French banks had been cut because of the perceived risks in lending to these counterparties.

“We’ve cut. The limits have been removed from the system. They have to seek approval on a case-by-case basis,” the treasury risk official said. The official declined to name the French banks.

“Societe Generale put out a statement on Wednesday denying rumors about its financial health after its shares fell by as much as 21 percent.”

bank run? markets are not going to like this at all.

#116 bigrider on 08.11.11 at 8:29 am

#108 Garth to Bigrider -“Italy is such a role model”

I meant the Italians who immigrated here and basically built every housing/building structure less than 50 years old as far as your eyes can see.

Tridel/Greenpark/Royal park homes/ Countrywide/Starlane/Townwood /Fernbrook/….and about 167(not a typo) other building companies originating from the country you speak of being “such a role model”

Oh, you mean the good Italians, not the huffy, emotional ones. — Garth

#117 bigrider on 08.11.11 at 8:46 am

Speaking of ‘bodies piling up on Bay st.’.

Most interesting that those who work in the financial markets to one degree or another are the same ones in debt heavily for their homes. Ask them what percentage of their net worth is in financial assets verses the home they live in. The answer will shock you.

One guy I know who works as an “advisor” told me that the only way to make money in the markets is to sell the products..LOL. At least he was honest.

Anyway, I woke up a bit grumpy today. I am going to continue to hold a lot of my net worth in ‘expensive’ investment products like Sprott ,Dynamic and Front Street. I may also martyr myself by buying an “investment property” in and around the 401hwy/416 area code. This way I will be assurred of the RE correction I have been waiting for ,for so long.

#118 fancy_pants on 08.11.11 at 8:49 am

screw this BS. Time to upgrade from average neighbourhood to snobby neighbourhood. This is in the context of a fairly stable, reasonably priced, local RE market I live in (KW).

Given that Canada is the perceived visible, external denotation of financial security and the perceived indicator of solid economic status our rates are going to remain low for a long, long time.

What solidifys this notion is the fact that RE in the US has already nose-dived; they have everything to gain by keeping rates low. Need $? QE3, 4, 5….

…you guessed it kids, low and stable interest rates well past the visible horizon.

Rest assured, the gov’t appeases the masses. What the hey, loans are basically free and will be for some time to come. Or you can spend the next two years here waiting for the RE armageddon.

As Garth indicated, RE is very localized. Some areas are reasonable and won’t see a large impact, for other areas, all bets are off. And hey, I can weather a potential storm. Sucks to be you if you can’t.

#119 bigrider on 08.11.11 at 8:49 am

#118 -Garth to Bigrider- “Oh you mean the good Italians, not the huffy emotional ones”

Emotions come with the territory ,as due the flailing hands…LOL

#120 a prairie dawg on 08.11.11 at 8:59 am

#10 Liar

“Kids, Thank god I am stupid and dumb, can’t spell, You all have me to learn from, for I am the One and only Smoking Man…………”

– – –

I call bullshit. There was a “smoking man” character on the X-Files many years ago. At best you’re a polyester replica of him, just more obnoxious.

You did get one thing right though, you’re the biggest liar on here. But most of us had that figured out as soon as you started posting…

#121 biff on 08.11.11 at 9:02 am

Just from reading the news, I would think Ottawa would be near the top for a correction (a la the mid 90’s) as government there has announced mega layoffs in order to balance the budget with many more expected in the next year or two. Also, Ottawa’s other engine, high tech, has not been spared with several companies announcing significant layoffs as well.

#122 debtified on 08.11.11 at 9:12 am

#102 Smoking Man on 08.11.11 at 7:15 am

Your faux spelling errors are starting to wear thin. — Garth


Yeah, Smoking Man. You have been an awesome comic relief on this site. I can’t tell you how to stay good or get better (you’re naturally funnier than I am) but I can tell you that you are losing your edge. Stay funny!

Onto the topic at hand… “And which cities will suffer the greatest percentage price decline over the coming year?”

I am tempted (driven by emotions) to say Vancouver will top the list but I don’t think (being rational) it will – it will still be somewhere on the list, though.

The list will definitely include a lot of Western cities/towns such as Calgary, Edmonton, Victoria, Whistler, Kelowna and the rest of the Okanagan Valley, Squamish, Lower Mainland (Vancouver, Surrey, Abbotsford, Port Moody, etc…).

My hometown of Ft. McMurray is a wildcard – it will go bust big time just like in the early 80’s should the price of oil go below $70 and stay there (a possibility). It’s already hard to sell a house at this time at the asking price. Another contributing factor will be the postponement of the Keystone XL pipeline decision until after the elections in 2012 (Clinton will have an announcement before year’s end and politics will have a lot to do with it). Until then, oil produced here will sell for less because Cushing is backed up.

It’s hard to pick just a few and put them in order but the top six to ten will be dominated by the West. For an idea on how the decline will materialize here in Canada, just learn from what is happening in Australia right now.

#123 The InvestorsFriend (Shawn Allen) on 08.11.11 at 9:31 am

Andrew at 111 predicts U.S. citizens will revolt.

Others say many of them are already revolting… some may begin to protest and riot as well.

It’s an ugly thought.

#124 Prof ANON on 08.11.11 at 9:34 am

@ # 92 Thechef

I’m assuming they included plans for a new airport in their resort design? Revelstoke is a bit of a drive from major transportation hubs.

#125 Neo on 08.11.11 at 9:37 am

#80 American

It’s doesn’t matter what we wish to happen or we want to happen. In the end you get what you deserve and no amount of wishing it away or covering it up with trillions you print with hide it in the long run.

California just announced that there tax receipts dropped a whopping 10% last month! They’ve based all there recovery and abilibity to pull themselves out of there mess on revenues climbing. So please don’t bring up California to support your argument. They are a BIG part of the problem. Moreover, what makes America..America… is the size of there middle class and the majority of that $10 trillion in GDP in consumption they are responsible for. We all know the wealthy are doing great given the disparity in wealth transfers the past decade that only resemble the very Depression of the 30’s. American, recessions don’t last 6 years and that is what your Federal Reserve is telling you, so far.

Lastly, fortunes will be made from this just like The Kennedy’s who went from rich to wealthy in it’s aftermath.

‘There’ is a place. ‘Their’ is possessive. The plural of ‘Kennedy’ is ‘Kennedys’; the plural of ’30’ is ’30s’ and the possessive of ‘it’ is ‘its.’ I may not be able to convince you there’s no conspiracy, but at least you can be articulate in expressing your myths. — Garth

#126 Bruce on 08.11.11 at 9:39 am

Wow Garth, really? I kept my post factual and respectful and you still censor it. That speaks volumes. Can’t handle the truth…you’re a sad excuse for a man.

This is not a gold-pumper blog, and it does not post ad hominem attacks. You just showed your colours. Buzz off. — Garth

#127 Thechef on 08.11.11 at 9:52 am

@ #126 Prof ANON

Actually there is already an airport but no commercial flight. Must be another thing they added to the “delayed” list like the golf course or the new lifts.

#128 Kitchener1 on 08.11.11 at 9:55 am

Garth, go to say that I disagree with your 15% decline model for the GTA. I do agree that it will not be as bad as other parts of the country, but its also were the highest concentration of low downpayment– debt ridden folks are located as well.

In 2008-2009 before the emergency rates came into effect, prices were dropping hard and fast. I reckon we had a 15% drop in that time frame with no bottom in sight.

What a lot of people forget is that GTA is a home base for many folks that live elsewhere in Canada– people that travelled out west to work etc.. there are a lot of people out there who are not invested in their places of residence and who can leave at a moments notice– guess were there going to go too. GTA. They all either have a friend, relative, family that live in the GTA and can probely stay for free or next to nothing until they find a job.

As for the 6 worst city declines:

#1 Van city
#2 Richmond
#3 Calgary
#4 Winnipeg
#5 Kitchener-Waterloo-Cambridge
#6 Tossup between Brampton and Durham region (Oshawa etc..)

#129 all capital letters and run on sentences on 08.11.11 at 9:56 am

“I’d like to hear your reasons for selecting a city or two which you feel will be reamed or spared by the approaching real estate correction. I have yet to decide on a suitable prize, but I’m leaning towards awarding a small community in the Okanagan.”

I’m not sure which cities will be spared, but one that I’m afraid that will be hit significantly is the one where I live: Markham, ON.

Within a 1 km radius of the “new downtown”, which is completely undeveloped with the exception of some very new, very ugly, low-rise condos, there are currently over 100 units for sale, and the asking price for existing condo rentals is declining. Couple that fact with an apparent lack of local, high-density employment (with the exception of a few high-techs, two of the Top 10 employers are the Town of Markham itself, and the local hospital), recently renewed fears of the Pickering airport development, and a recent influx of foreign-born RE buyers, and the area is questionable as to it’s ability to sustain the current valuations. Oh yeah. Any place that has the letters H-A-M in it’s name is in trouble :).

Even if my response is worthy, you can keep the prize. I can’t afford it.

#130 Jack Russell on 08.11.11 at 9:57 am

I can give you some context from down south as to what things look like when things correct.

It is easy for people to convince themselves that other areas are overpriced, but their area will hold value for one reason or another. It is an easy trap to fall into. If you start to compare housing prices to income levels for an area, you can get a feel for the degree to which an area might be overpriced.

It is also easy to only look at the people who will be underwater as those will be affected by these things, but there is always going to be a lot of collateral damage. When things start to go bad, unemployment goes up. All sorts of things – first go the builders and all of the folks that would get hired as subcontractors. But realtors and mortgage brokers also get hit. As do places that sell home furnishings of any sort.

Down here in the states, we also had lots of folks drawing equity out of their homes, and using the money for all sorts of things. Home renovations, expensive cars, vacations, expensive meals or clothes. That gravy train came to an end a few years ago. But so did the paychecks for people who sold all of that stuff. We saw lots of businesses go under after things crashed down here. It sounds like you have a lot of real estate infestors up there – those people could easily end up caught in a real financial bind.

As more and more people cut back spending because of reduced income, more and more other people will have less income. And so it spreads until it reaches many parts of the economy that might have nothing at all to do with real estate. And if regional income levels start to drop, then housing becomes less affordable, and housing prices might take yet another round of cuts.

#131 GTA Girl on 08.11.11 at 9:59 am

Bigrider; I don’t think you can compare a town home up north of Mjr/Mac and Weston, with a resale town home in 416. The highway doesn’t make it as alluring. Walking out the door and not being able to walk anywhere, only car, compared to being in a actual city w/transport options, walkable shopping and entertainment.

This is why new builds have become a joke. Everywhere new condos/towns are the same price allover 905. Yes the Greenpark towns in little Italy downtown will be sold for $900k….as a shell, no extras. Why would I want that when I could buy a house in many areas of 416?

I believe developers have been coming up with number from thin air. Many projects aren’t seeing market reaction and being sold on spec. You only have to look at resale market to see this. A new build pre-construction should not be 20% more than a resale.

Back to the farmers fields of the 905, vast wastelands of congestion after 4pm, 400 series highways packed, side streets used as cut thrus, makes me long to live on the Bloor subway line and be able to walk or reach everything. And ‘that’ ideal should always be a premium.

The new subway extension is already a nightmare of bad planning. The stop at 407 station will have ample parking. But it seems the elusive station at Jane and 7? Someone didn’t plan parking. They are trying to squeeze a bus station in. Laughable considering no one uses buses in 905. Wait 1 hour for a bus? When I can take my car for a 10min jaunt?

905 has worst planning and it’s showing. This is why RE is overvalued. Quality of life is not there.

#132 Moneta on 08.11.11 at 10:03 am

I mean, that if the governments are irresponsible borrowers, are the irresponsible borrower-investors going to get a pass? And the responsible prudent investor get nailed?
Society is a work of symbiosis. People can’t get rich alone.

Prudent investors probably have way more money than they would have had had we not had all these bubbles and profits generated by spendthrifts.

The true prudent investors should be kissing the hand that feeds them.

#133 infernalmachine on 08.11.11 at 10:19 am

A bit surprised there, g-man. You’ve contradicted yourself on the TO bubbliness in this post. And I totally disagree. Are people (bay streeters and bankers included) really MAKING double the wages they were in 2004? If not, then why on earth would TO homes (yes even the nice central ones) be selling for double now? Not to mention the insanity of the condo specking action.
Prices will always be higher in TO but that still doesn’t mean they’re worth what they’re “priced at” today in 2011″

#134 GregW, Oakville on 08.11.11 at 10:22 am

Hi #41 TurnerNation,

The new batteries in the EV1 worked ok in nice warm California.
But try starting the thing in – 40 or after a few half full recharge cycles and your hopped!

Lead and Nickle to power output are still pretty high to.
The so called body of “bend metal” has mass.

You might have something there about oil corporation profits, but my first guess would be for the profits of GM’s. Electric cars need less parts to build and less repairs. I believe GM big cars have a bigger up-front profit margins, and then there are the after market repair parts too.

Anyway, I’m glade that now there are new and improved battery technologies since the EV1.
Lighter batteries to power output (Lithium types). Better operating temperature rang. Longer life cycle. Quicker recharge time if needed. Lighter materials to build the car body with.

Of course there are now marketing some plug-in hybrids. (A bit bigger then the EV1 too.)
You can just use the battery power for the short trip around town and the regenerative breaking.
Still have the option of long distance driving with the smaller more efficient combustion engine.

All we need is to find a supply of low cost materials for all the millions of battery so we all can afford to buy one. We will still need to make the energy/electricity to recharge the masses vehicles each day. (Even when the wind isn’t blowing and the sun isn’t shining!)
It’s a lot of energy. I’m not sure were all the toxic stuff will be going in the mining and manufacture of the needed materials?

Of course we will still have the traffic jams, but with less air pollution from the cars them selves.
We might have less air pollution overall depending on how we generate the needed electrical recharge power of the millions of cars?

#135 Billy in Nobleton on 08.11.11 at 10:22 am

The only differance between housing prices in Toronto & Pittsburg is………………..JOBS

GTA will survive with a small 10% haircut

#136 BPOE on 08.11.11 at 10:22 am

BPOE broke the news awhile back and now the banks are starting to release news as well. Rates going lower folks. News coming out shortly how Buffet has lost the magic price by placing his money in America. This is not the time for diversification. It is time for ACTION.
House hunters worried about being pushed out of the market by higher mortgage rates received a little good news this week.

The turmoil inflicted on world financial markets over the last two weeks is taking the pressure off bankers to raise interest rates, something that was expected to happen this fall.

“What everyone was anticipating before all this came to light was for mortgage rates to start to increase,” said Ryan McKinley, mortgage development manager for Vancity credit union.

But now, McKinley said, the credit union’s members sense the possibility that already low rates could even be heading lower. Vancity’s best five-year fixed mortgage is sitting at 3.79 per cent, and its variable rate is 2.2 per cent.

#137 Shane on 08.11.11 at 10:26 am

garth, Is Markham on the list for a good pullback in realestate?


#138 Daisy Mae on 08.11.11 at 10:27 am

“There’ is a place. ‘Their’ is possessive. The plural of ‘Kennedy’ is ‘Kennedys’; the plural of ’30′ is ’30s’ and the possessive of ‘it’ is ‘its.’ I may not be able to convince you there’s no conspiracy, but at least you can be articulate…. — Garth”

I use Incredimail for personal e-mails. And I use Spell Check. Every time I type plurals (its, 30s) it’s deemed incorrect — Incredimail wants to insert an apostrophe (it’s, 30’s). Must have something to do with the schooling this generation of employees received…..

#139 Aussie Roy on 08.11.11 at 10:30 am

Aussie Update

Well, we have some 8.9 million houses. A quick back of the envelope calculation tells me 3.79 per cent of all our houses are for sale right now.

But wait, we typically exchange about four per cent of these each year.

This suggests we have over eleven months stock on the market today. The US is struggling with 9 months of supply on the market, a level which is driving down prices.


Australia’s unemployment rate unexpectedly rose to 5.1 per cent as the economy shed jobs last month with employers growing more cautious about hiring full-time staff.


#140 GregW, Oakville on 08.11.11 at 10:37 am

Hi #61 Nastra, re that link ,
“Japan is considering the possibility of creating a back-up capital city in case a major natural disaster, like the March 11 earthquake, strikes Tokyo.
A new panel from Japan’s Ministry of Land and Infrastructure will consider the possibility of moving some of Tokyo’s capital functions to another big city, like Osaka.”

It might say more about past disaster and the fall out than we are being told, since Osaka is much farther away for that GE designed light water nuclear power plant???

Also I have heard for a 474 pilot that the air flight from Asia to North America have altered there flight paths to avoid the air born ongoing fall out since it happened.

I hope they get the reaction to stop alltogether and it is comtained as soon as they can. It may take a long time since the so-called hottest stuff in now all over the place instead of in the sheaded containers.

BTW, I still like the Canadian designed CANDU’s.

#141 Kilby on 08.11.11 at 10:50 am

Forgot Whistler ,it’s small but should be considered. There are 655 listings in Whistler/Pemberton and from July 29th to Aug 11th there have only been 11 sales. Lots of speculation there before the Olympics and ensuing hangover.

#142 nick on 08.11.11 at 10:55 am

I agree with Montrealer (#107) : there is more to the Montreal story than what meets the eye. The low average price masks the fact that in demand neighborhoods have gone ballistic over the last decade or so. People here have this idea that any price is ok “because Toronto and Van are so much more expensive!”. It gives us cover for our own stupidity. I think Montreal is more like Seattle : we’re not Miami, so we think we’re immune. But, in the end, Seattle tanked as well.

#143 Living in AB on 08.11.11 at 10:59 am

Hit the hardest…..not anyone city but all those overpriced acreages around the major cities.

#144 Q on 08.11.11 at 11:08 am

re Kilby #143, you’re right, as I also forgot to include Whistler. But then again, Whistler won’t correct, it will totally collapse under the weight of its own BS…yet again….

#145 Neo on 08.11.11 at 11:09 am

‘There’ is a place. ‘Their’ is possessive. The plural of ‘Kennedy’ is ‘Kennedys’; the plural of ’30′ is ’30s’ and the possessive of ‘it’ is ‘its.’ I may not be able to convince you there’s no conspiracy, but at least you can be articulate in expressing your myths. — Garth



I was actually talking to American. I know you are a stickler for grammar, so I save that for responses to you (sarcasm). I love how you attack grammar when you can’t or cannot (sarcasm) come up with something to actually refute what I said. One can very well say your whole Blog has been a “myth” since your predictions haven’t come to fruition and you keep moving the goal posts or massaging your rhetoric. I actually agree with you on housing regardless of what the current situation may be telling us. Same goes for the U.S. Garth (-;

Aw, don’t be hurt. Just improve. — Garth

#146 Neo on 08.11.11 at 11:16 am


“Same goes for the U.S.” meaning “their” current situation isn’t really reflecting what is actually going to be the final outcome so I DON’T agree with you with respect to the U.S. (-:

#147 skube on 08.11.11 at 11:17 am

“416, where real estate will be among the stickiest in the country. Sure, the GTA as a whole could be in for a 15% haircut, but the epicentre of a region of six million people and a robust economy (despite a growing pile of bodies on Bay Street) is likely to see only marginal declines. There’s a reason the average SFH here in the centre is $800,000, and it’s called the 401.”

My stomach sank when I read this. Sold my multi-family 416 house in 2008, opting to make gains in the -50% stock market instead. While I now have some liquidity and have made some gains, I would have definitely been further ahead had I not sold.

Even if I had bought a 416 SFH less than a year ago, I would be more ahead. And that’s factoring in a future “marginal decline” too.

Hindsight is bitch.

So is jumping to conclusions. The correction I have detailed is in the short-term. After that there is an unknown number of years of languid and languishing prices. Stick with the financial assets. — Garth

#148 Steven Rowlandson on 08.11.11 at 11:27 am

I can’t see employers paying much more than minimum wage either. Except for elite employees most won’t make as much as one third the price of a house per year. Raising peoples pay would be inflationary and might enable them to live properly.
That just can not be allowed now can it?
And of course dropping the price of real estate is taboo and can not be allowed. The common working man must remain a homeless virgin untill the day he dies.

Thats the way of it isn’t it.

#149 bill c on 08.11.11 at 11:40 am

BOC to cut rates in sept. So much for real estate crash.

#150 from kits on 08.11.11 at 11:44 am

@skube – a little early to determine if hindsight is a bitch…

1 – Suburbs of Vancouver (Langley, Abbotsford, New Westminster, Richmond, White Rock, Surrey, etc) West Van, Vancouver, & north Van will remain, if you live here you’ll know why

2. Victoria – city has little to be desired and is full of grey hairs who will need the money

3. Ottawa – I believe the government is going to have to start cutting back on staff, this more of a 10+ year call but city is made on government employees with their fat salaries and fat pensions, something’s gotta give

4. Kingston, On – Tons of grey hairs, no real jobs to sustain in downturn

5. Kelowna – again grey hairs, no real economy in this city

No way would I say Edmonton or Calgary – just too much investment dollars being put into this province. They already have more people employeed in the province than before the bust of 2008 and they expect worker shortages by 2012. economics too good for this provice, same with Sask. Argiculture will continue to boom

#151 Devil's Advocate on 08.11.11 at 11:49 am

What a pompous, self-righteous species we are…

It is a new world and a new economy which we have not quite yet come to terms with. We have packed an additional 6 billion bodies on this planet over and above the 1 billion which inhabited it a mere 100 years ago. In that same 100 years we have developed technology which has made traversing the once great expanse of our world little more than what a jaunt to the local corner store once was. Great silver birds migrate from one corner of the globe to the other carrying parasitical bodies within. The airwaves carry news in an instant that once took days to reach us from that side of the planet cloaked in night to this other bathing in the glow of the sun.

And you are surprised at what is happening in the world today?!?!

We worry about the environment. We fear “Global Warming” (“Climate Change”), the extinction of any given species of animal or plant, pollution, war, famine, disease, terrorism, and yes anything less than economic “growth”.

That your home may have a lesser market value next year pales in comparison to other things coming your way. What will those other things be? Who knows? Who has a crystal ball? No one knows. Do we really care as we toil away building a better life for ourselves? Should we worry about the inevitable uncertainty the future holds in store for us, the stoppable the unstoppable, the forecastable the unforcastable?

We are no different from the simplest life on this planet. We will continue to grow and prosper until eventually we expunge ourselves by our very own doing. Like rats in a cage we will stomp upon one another trying to find our own solid ground. The demand for space will ever increase as we seek it to build shelter, harvest energy to feed our infrastructure and our bodies, manufacture those goods and services and teach our young that they may carry on our good works.

Silly fools, greater fools, … simple fools. Our time here is relatively insignificant. Even the most extraordinary among us is only so among us for whatever reason we deem them so. In the grand scheme of things even the seemingly most insignificant among us, in the end, is every bit the equal of they we most admire. And if you believe that how we conduct ourselves here will land us in a better or worse place in “another life” then explain the hypocrisy so rampant within our ranks… they’re hypocrisy and your own hypocrisy, flagrant self-important blasphemy. “But I am not a hypocrite!” you proclaim? Ya right. We are all hypocrites. We shape this planet to suit ourselves. We manicure desert lands with lush greenery, we pave over lush greenery to build roads and parking lots for our chrome self-propelled polluting chariots, we build iconic monuments to commerce where we control the environment so we can shop in comfort season in and season out, come wind, rain, snow or heat.

We are all hypocrites to one degree or another, if only that we be surprised by what we are doing to ourselves, although we say it is the planet we harm “this planet isn’t going anywhere… we are”

Climate change? Did you know that hundreds of meters below the ice at the South Pole the frozen remains of palm trees were found? How did they get there? Or more telling, how did the ice get there? Manmade climate change… such a pompous notion. We are insignificant insects in the whole grand scheme of things… but everything to ourselves just as is that mosquito you swat into a bothersome splat of blood and guts hopefully before the blood is of your own.

“It is intellectually dishonest to speak of environmentalism without discussing population control.”

So enjoy… don’t waste your life wallowing in worry. Do the best you can while living a full life.

“While I thought I was learning how to live, I have been learning how to die” Leonardo da Vinci

“The fear of death follows from the fear of life. A man who lives fully is prepared to die at any time” Mark Twain

We’re Here For A Good Time (Not A Long Time) :

A very good friend of mine
Told me something the other day
I’d like to pass it on to you
Cause I believe what he said to be true
He said

We’re here for a good time
Not a long time (not a long time)
So have a good time
The sun can’t shine every day

And the sun is shinin’
In this rainy city
And the sun is shinin’
Oooooh, isn’t it a pity
And every year, has it’s share of tears
And every now and then it’s gotta rain

We’re here for a good time
Not a long time
So have a good time
The sun can’t shine every day

And the sun is shinin’
In this rainy city
And the sun is shinin’
Oooooh, isn’t it a pity
That every year, has it’s share of tears
Every now and then it’s gotta rain

We’re here for a good time
Not a long time
So have a good time
The sun can’t shine every day

Will your home be worth more or less next year? Yes probably it will be… worth more or less next year. Does it really matter? Are you going to stand frozen in time waiting for the one or the other? Time is the most precious commodity you have… cherish it. Time’s a wastin’.

In the end human beings are quite a resilient lot. We have a great future ahead of us, all-be-it probably shorter than we would like, if not for the adventure uncertainty alone brings with it. Challenges, wins, losses; it’s not the destination it’s the journey.

Life’s a ride… enjoy.

#152 Opus on 08.11.11 at 12:39 pm


I am very curious about Palo Alto as I thinking about buying a retirement home down there. (it would be ‘vacant’ quite a bit during the course of the year as I have 15 more years to go.)
I have some concerns about buying in Cali.

-Property Taxes-are they high? could they get crazy high due to the mess down there?
-Crime and Break-ins and other Societal Concerns

I pretty much know nothing about Palo Alto other then great weather.

Thanks, I always appreciate your posts and it is interesting to hear an American viewpoint on these issues…

#153 Bruce on 08.11.11 at 12:40 pm


#154 Dave_in_BC on 08.11.11 at 12:42 pm

I think that overall BC will decline with Vancouver, Island, and the Okanagan leading. Alberta will decline with Calgary and Edmonton leading there. Lethbridge will have less decline as the economy there has a large AG component.

That said, I was once told that the best regional economic development plan for the maritimes was the Alberta Oil Sands. While the work there will bouy the local economy, it will also support other regions. One can live in BC, work @ Ft. Mc., and the company will pay your camp and travel costs while paying a wage that can not be met.

Another indicator I find interesting is descretionay spending. Want a boat, lots of deals to be had. Interested in a cottage or vacation property… look at the drop in places like Canmore, Okangan or the Gulf Islands. Not into Harleys but I suspect there are deals there. Bottom Line, people are pulling their financial horns in. Expensive non-essentials are being liquidated.

The argument about the 416 being the least risky sounds like saying Vancouver won’t decline beacuse of the North Shore Mountains… Not enough factual data to support that notion. “It’s different here”.

Thanks Garth, I am hooked and look forward to your comments daily. Good Mental Floss. Cheers

#155 Opus on 08.11.11 at 12:49 pm


I meant to say Paso Robles. Sorry, I know a lot about the world but I must say my American geography is very limited. Similiar names, I am thinking very different places? Just looking for a great vacation property…

#156 Snowboid on 08.11.11 at 12:51 pm

I started my list last night, but as I started typing…

K…e…l… a massive bolt of lightning struck outside, followed by the most ‘born-again I am now’ boom of thunder ever heard, so shut off all the electronics and hid under the bed!!

Seems safe now, so…



Pause while I carefully scan the skies…it’s safe…


I don’t know much about other markets – except always thought real estate in NS and NB was under-priced and especially love the mansions along the river in Fredericton. But maintaining those acres of lawn and the 10′ feet of snow in winter discouraged us from moving there!


Your repetitive script is becoming most tiring!

#157 unbalanced on 08.11.11 at 1:01 pm

To # 122 Prairie Dawg.

I totally agree with you 100 %. Bang on!!!

#158 BrianT on 08.11.11 at 1:08 pm

#119Big-Very good point and very accurate.

#159 Westopia on 08.11.11 at 1:14 pm

Buffett sells bonds to raise capital:


#160 MDG in Burlington on 08.11.11 at 1:18 pm

My picks for the worst hit:

Vancouver and the greater vancouver area
Newmarket/Bradford/Keswick (newly built subdivisions)

#161 The InvestorsFriend (Shawn Allen) on 08.11.11 at 1:20 pm

Canadian Dollar DAZE

So the Canadian dollar is back down close to parity.

Remember when it was up past $1.05, a lot of people were going to move some money into U.S. dollars , but not just yet, they were waiting for $1.10 or $1.15

Or they were convinced that the U.S. dollar and even all things priced in U.S. dollar (except Gold) were confetti.

Remember too when it got to $1.10 in 2007, remember how most people missed out on that as well?

My strategy is always to buy gradually when things get cheaper.

Like stocks this past week. I was buying. It’s scary, but I take bargains when they are available.

I won’t buy anything today.

#162 Darcy on 08.11.11 at 1:21 pm

Those that live in Vancouver such as myself know where were heading and it ain’t good. A couple of years ago the skyline had more than a 100 building cranes and now there are only a a handful and most of those are finishing up buildings. Also many of the new buildings are sitting empty mostly the result of (Ham)speculators waiting to resell when the market goes back up.
Those that live here know that we are not the center of the Universe as the media would portray it. The most liveable city is all hype. How can the most liveable city be the most expensive for basic needs, where housing is unaffordable to the average working person, where we have the most homelessness, a huge drug problem, and where the government caters to one demographic – Asian money and forsakes the rest of the Canadian mosaic.
There are currently 58 condo listings in downtown Vancouver between 169k and 299k that are not selling, six months ago they were practically non existant. Yes Vancouver is going down.

#163 Hathor on 08.11.11 at 1:27 pm

Biggest loser cities:

Vancouver – 69%
Victoria – 58%
Abbotsford – 54%
Kelowna – 49%
Toronto – 41%

BC not looking so hot; projections based on what values would have to decline to based on 3x median income.

#164 Carlyle on 08.11.11 at 1:37 pm

#133 GTA Girl

I actually have lived in all 3 parts of the Oreo cooking that makes up the GTA (The core, the GTA, and the 905).

In terms of desirability (to me at least) the core or 905 are the preferred options as alot of the GTA seems like it’s ghettoized in the last 15 – 20 years. Not the level of a US ghetto of course, but definitely alot poorer and run down.

The wealth of the region now seems to run up and down the young subway line like an arrow into the core, after that it’s poverty until you hit 905.

In terms of livability …. downtown is a walking lifestyle filled with shops, restaurants and concrete sky boxes of 500 sq ft (maybe 600 if you are in a “big” one bedroom). Unfortunately these 600 sq ft shoeboxes are not conducive to raising families … thus the concentration of young families fleeing to the 905 where prices are cheaper and houses are bigger.

My wife and I lived in downtown Toronto for 10 years and then moved to Milton. Talk about culture shock haha.

Upsides of 905 life in Milton

a. I loved my big new townhouse.
b. Loved the clean air and massive property lot that was all “mine”.
c. I also fell in love with big box stores. Loved being able to drive to Wal Mart/Best Buy/Costco/etc and “stock up”.
d. Milton was also a great area in terms of schools, community cleanliness and civic responsiblity.

The downsides of Milton were

a. The commute (spent 3 hours a day driving +407 fees — over 1000 dollars a month on gas and 407 fees)
b. The lack of walkable shopping options (had to drive just to get out of the neighborhood let alone actually go somewhere
c. The lack of decent ethnic restaurants
d. the commute (putting this down twice as this is the big thing that ruined 905 life for me)
e. lack of job opportunities that didn’t involve aforementioned long ass commute
f. Off at 5 home by 8 — Losing 3 hours a day, 15 hours a week of my life commuting.

Long story short, wife and I are back downtown again. My gas/407 bill has gone from over 1000 a month, to about 130 – 140 dollars a month (just gas, obviously 407 bill is gone) My commute has gone from 200km per day to 25km per day. Hours of my life given back to me daily. The jobs downtown are more lucrative paying far more money for both me and my wife, and also allow for much better career advancement.

Upsides of downtown

a. Amazing shopping
b. Amazing restaurants
c. Accessible services
d. Everything in walking distance
e. Amazing views from box in sky
f. Museums, parades, festivals, etc
g. Walkable to work or very short drive
h. Far more job opportunities in both walking and driving distance
i. Allowing landlords to subsidize my condo living
j. Big box stores that I fell in love with in Milton, an easy drive to in Etobicoke
k. Off at 5, home by 5:20.

Downsides of downtown

a. Pollution
b. bums
c. traffic getting in and out of the core
d. living in a shoebox in the sky (lack of space)

That’s about it. I love living downtown. I’m guessing once I have kids though it will be back to the 905 for me. I just can’t see raising a family in the downtown core … mainly because housing isn’t affordable and condo’s don’t cut it for a growing family (with the majority of downtown condo’s 1 bedrooms bought by speculators).

#165 ROBBY K in the USA on 08.11.11 at 1:50 pm

cannnot agree with you here, I think everyone/everyplace is going to have a haircut, some large, some small and that especially includes the 416 area code if that is what you are referring to, low rates have casued asset bubbles and too much debt accumulation everywhere

#166 Utopia on 08.11.11 at 1:56 pm

Some rosy predictions for Ontario but I beg to disagree.

Has everyone already forgotten the massive Provincial debt and deficits?…. Or that Toronto itself is set for some serious cuts as it reigns in past overspending or even that the Federal Government is in austerity mode?

All of these events are taking place simultaneously. The debt burden combined on our towns cities, provinces and country is actually staggering.

Let us not pat ourselves on the back too hard just yet. There is pain coming in the form of reduced services, increased taxes and even the complete elimination of programs.

Forget fresh funding for novel new ideas or money to be made available for sports facilities and big spending events. Expect instead that our infrastructure will degrade and that bridge and road maintenance as an example will get a lower priority in the face of demands for health care dollars.

That is the future. It is why I feel so sick about the level of personal debt Canadians are taking on. One day we will look back on these days and seriously question the sanity of having spent hundreds of thousands of dollars on a single family home.

We will then finally acknowledge how over leveraged we have become in both the private and public sphere when the recognition dawns that while we do have revenues, they are simply insufficient to support the lives we are accustomed too.

For now, the housing bulls still seem to be in charge and are happily counting their paper gains while mocking everyone who brings up reasonable and rational opinion warning of a housing bust.

But I know beyond a shadow of a doubt how this will all end. In sadness and tears for millions of stressed home-owners. The evidence against buying now is irrefutable and paints a stark and worrying picture for the health of the nation if the excess cannot be reigned in.

#167 Smoking Man on 08.11.11 at 1:58 pm

122 a prairie dawg & my good buddy unbalanced……..

x-files smoking man? Nope.

One day I looked in the mirror and I saw a Smoking Hot Looking Man….wanted to use it as a blog name, but knowing the characteristics of a typical Canadian who despise, and cringe at handsome people who just happen to like themselves and are filthy rich,

I knew it wouldn’t work. So I shrunk it down….. I do smoke, I love it.

But as disappointing as I am to you on record on this blog are my predictions, can’t lye about those can I dwag.

I shorted the market on may 27 may 31 it started it’s descent missed peak by a day. No one is perfect.

#80 SMOKING MAN on 06.21.11 at 6:34 am
So true, so then why am I short?… Batman showed his ugly ears on a five year chart. However I will reverse my positions when I get confirmation of a trend turn.

And this Picking the bottom of the market, note the time stamp , now I am predicting right to the minute…….Admit it have a talent for it

124 Smoking Man on 08.09.11 at 3:24 pm
Batman head showed up again upside down, well defined at around 2 42 to 244Unloaded all my shorts, buying back in with 20% capital
See what gives tommorow, might miss a big gap up, but will go all in if things look good….2 year at .8 div’s on blue chip CDN companies at 5% Can’t resist

I have probably made just today you and un balanced combined annual income in one day…………………….
All I do is try and educate the underclass only to be a victim of insults…

Canadains eh

#168 sharpie on 08.11.11 at 1:59 pm

After spending 15 years in the U.S., I moved back to Saskatoon. Prices here are nothing short of flipping delusional.

#169 Two-thirds on 08.11.11 at 2:01 pm

#112 The InvestorsFriend (Shawn Allen)

So Shawn, would you mind elaborating on why comparing figures for one Canadian province to those of an entire country valid?

Also, could you kindly explain why you think that arrears reaching almost twice the national level and blowing through the 1997 all-time high is not a big deal in your opinion?

In short, is the current 0.81% figure a bullish or a bearish signal, in light of the historical precedent?

#170 DM in C on 08.11.11 at 2:06 pm

Oh lord, diarrhea of the keyboard, aka DA is back. Prepare to be blasted with multiple, inane postings. Business must be slowing down.

#171 Stampede Sam on 08.11.11 at 2:08 pm

There’ is a place. ‘Their’ is possessive. The plural of ‘Kennedy’ is ‘Kennedys’; the plural of ’30′ is ’30s’ and the possessive of ‘it’ is ‘its.’ I may not be able to convince you there’s no conspiracy, but at least you can be articulate in expressing your myths. — Garth
Thanks for these much needed corrections Garth, and can I please add another one that I see too often? ‘Loose’ is the opposite of ‘tight’. ‘Lose’ is the opposite of ‘win’. You don’t ‘loose’ money, you ‘lose’ it.

#172 disciple on 08.11.11 at 2:14 pm

You do not get ahead by parking your morals at the door of the House of Sin. As one of the Jesus twins said, “what does it profit a man to gain the whole world but lose his own soul?” No, hold steadfast to and mightily defend what you know to be right. Don’t let your mind-controllers ever fool you into believing otherwise. Chasing profits at the expense of ethics will bring disaster in one form or another.

Why do many commenters on here talk about global conspiracies? Simply because they believe that there is a trickle-down effect on them and their families in some way. And family is the key word in understanding how some of these conspiracies may be operated. Such a finely tuned co-ordination of timely events would not be possible without the strict code of family cohesion groupthink. Now multiply that efficiency by the number of similar families involved, and now you arrive at an accurate hypothetical model of why for example, only 4 people control ALL media in this country.

I know many of you don’t believe in global conspiracies, that’s okay, ignorance is bliss and I support that…to some extent…but it is my burden to inform those of you who need to hear it…that there will be a severe price correction in housing no matter where you live in Canada, precipitated by factors outside of Canada. We are not an economic island. We are dependent on what is shipping from Shenzhen, what transpires in London, which banks in France and Germany get cheap money from the IMF, and how well our gov’t can continue to attract foreign money. And this last point is how inflation is kept hidden. Lack of confidence is causing volatility in the markets. According to plan.

#173 somejerk on 08.11.11 at 2:14 pm

There will be a correction almost everywhere, followed by several years of lousy real estate markets. No change there. But the emerging trend is a simple one – the concentration of disposable wealth. The net housing beneficiary of this will be 416. In other areas, heartache. — Garth

So is jumping to conclusions. The correction I have detailed is in the short-term. After that there is an unknown number of years of languid and languishing prices. Stick with the financial assets. — Garth

hmmm, thanks for clarifying that, some of us rabid followers thought you had fallen off the wagon…

But in 416 with the intense pre-closing tax change buying binge in 2007, the almost non existent 2008 plunge, the abnormal low interest rates and gorge since then don’t you think, once the market softens, you get to, at least (-20%), 2007 prices before the long languish for a number of years… no matter how much wealth concentration most people are way in over their head in the 416…

#174 Debtfree on 08.11.11 at 2:18 pm

@152 DA . I realize you’ve got buckets of time but next time you want us to enjoy the 70s again . Could you please use links like …http://www.youtube.com/watch?v=3qFIaI1M5kU it would save you and some of us old guys a few minutes and brain cells . TIA . BTW nice rant . We did not go south this summer . We went north instead . Bigger cleaner lakes . Full of fish . No traffic . The more we see of the north the more we love it.
As far as the drop in prices . I don’t care . You’re right that real estate is local and it really is different here . I have never in the last thirty five years seen so much growth in my little northern city . We even have a mini rush hour . Never had that before . We even have new re agents in town . One is even home staging expert out of vancouver.Imagine that. Every weekend the hotels are full . And this is only the beginning . For all you rein guys/gals this place ticks all the boxes in the goldmine score card . Billions of investment $ allocated . And man does it show . Lots of sold signs. The same thing is happening on the other side of La Belle Canada . http://plannord.gouv.qc.ca/english/ . If you look for gloom .You will find it . But its not all bad. There are and will always be exceptions for every rule . Crescendo is supposed to happen 2013 14 . I’d tell you where but it’s crazy enough here.

#175 Neo on 08.11.11 at 2:19 pm

Aw, don’t be hurt. Just improve. — Garth


I guess I could say the same to you Garth. (-:

#176 Devil's Advocate on 08.11.11 at 2:20 pm

B.C. home sales increased 12.9 per cent to 6,533 units in July compared to the same month last year, according to the British Columbia Real Estate Association.


#177 T.O. Bubble Boy on 08.11.11 at 2:36 pm

Apparently long bonds do get hit when you’re downgraded:


The poor auction had nothing to do with the downgrade and everything to do with a 400-point rally on the Dow. — Garth

#178 Rich Renter on 08.11.11 at 2:40 pm

Garth, I can hardly wait for your usual Canadian western city bashing post tomorrow. Houses in Alberta are selling and the continued migration of familiues with “Yours to discover” license plates will only increase. Head west young man head west, for this is where the real money is. SUre we may have a slowdown but a crash, not a chance.

#179 Northern Dirt on 08.11.11 at 2:46 pm

Does your assessment of the 416 include condo’s?
I can’t see this speculators market lasting once they start trying to capitalize on their investments.

#180 The InvestorsFriend (Shawn Allen) on 08.11.11 at 2:50 pm

Number 172 Two Thirds asked me the following (about my post at 112) to which I reply.

So Shawn, would you mind elaborating on why comparing figures for one Canadian province to those of an entire country valid?

Reply: I never made any such comparison. I mentioned Alberta and Ontario but I made no comparison. It’s always wonderful when people attack what I never said.

Also, could you kindly explain why you think that arrears reaching almost twice the national level and blowing through the 1997 all-time high is not a big deal in your opinion?

Reply: Because as I said Alberta only rose to the point where 8.1 mortages out of 1000 are 90 days late or more. In the U.S. at the height it 100 out of 1000. 8.1 out of 100 is not a high deliquent rate. In Canada the peak was higher than that in the early 90’s.

In short, is the current 0.81% figure a bullish or a bearish signal, in light of the historical precedent?

Reply: Beats me. I don’t invest based on signals. I just pointed out that a rise from 0.14% 90-day delinquent to 0.81% which you sound the alarm for a six times rise is still a small default rate. Six times next to nothing is pretty much still nothing. CMHC will not be worried about this.

Call us when 90-day delinquents get up around 2%, THEN we can worry.

In other words a tall Dwarf is still a short person.

#181 GTA Girl on 08.11.11 at 3:12 pm

Carlyle, I agree completely. I moved my office up here because the commute times were taking 2hours each way…drive the same route at 3am, and you can be at Bay and Front in 40min.

My kids are all in their teens, so my husband and I will probably move back to Toronto when the time comes. But I live near a small village of Kleinburg, and feel removed enough from the sprawl at the moment.

But I don’t think I’d downsize to a condo…that’s the fallacy developers never clues into. Emptynesters don’t want less space, they want the same and lifestyle. Greedy bunch…but do you blame them, after living in sprawl?

Purgatory is a semi detached home for $550k in a former farmers field along w/1,000 similar units, where you have to get in the car to buy milk.

#182 SRV ES339 on 08.11.11 at 3:12 pm

Not so sure about the 416 Garth… at least the condo market.

My pick for the biggest drop (Vancouver would be like taking Gretzky in an 80s hockey pool) is the 905… it will get smoked.

#183 Oshawa and Walmart on 08.11.11 at 3:16 pm

El ‘Shwa for sure!

And don’t shop at Walmart: it’s like shooting your future self in the foot.

And your great-grandkids in the head.

I dare any of you to watch this 90 min. documentary, and disagree:


There’s a high cost to low prices.

Food for thought :)

#184 bigrider on 08.11.11 at 3:23 pm

#139 Shane-is Markham on the list of a good pullback.


#185 Tom from Mississauga on 08.11.11 at 3:34 pm

London? Oh Garth.

#186 Smoking Man on 08.11.11 at 3:47 pm

Garth just noticed your comment.

“Your faux spelling errors are starting to wear thin. — Garth”

Had to look that up. Never remember seeing that word before in my life..

Faux = not genuine or real…..

As hard as it is for you to believe especially with my demonstrated super human ability to spot top’s and bottoms of trends as they happen, and document here.

They were not faux errors, they where genuine

I swear…..:) I’m taking great pains to make sure no errors on here. Spell check on.

My brain has two sides, the analytic, programming and logic, and the thinking and typing of words…That one is very broken….Yet when I type computer code, make a typo maybe once every 6 months.

I have no logical explanation for this.

#187 Kilby on 08.11.11 at 3:52 pm

#153 Devil’s Advocate.
Well said, we spend a lot of time planning and wondering “how we are doing” that we forget to live for the day. I am guilty of doing this but realize that I have start enjoying the “now”. I have a friend who is 60, single with a paid for waterfront home and 2.5 million in stocks and cash. When I said that I was going to get a sail boat he replied “They won’t make you any money, they just depreciate” He is right….but I am 60 as well. There are a lot more important things then the next profit.

#188 BPOE on 08.11.11 at 3:52 pm

B.C. home sales rose 12.9 per cent to 6,533 units in July compared to July 2010, while the average price climbed 10 per cent to $541,000, the B.C. Real Estate Association reported Thursday.

#189 Carp on 08.11.11 at 4:06 pm

Top: Richmond BC … they have mega homes being built all over the place. In 2007, prices for such a home was $1mill now going for $2-3 mil … I’ve seen whole town home complexes with for sale sign and no sold signs. As well, the city will slowly sinking in the sea and valuations should show that eventually. I’m so glad my vacation is over and I escaped those horrible Richmond drivers.

Although not on the top 10 – I think Ottawa will be on the list of cities getting a nice shave.

1. Prices went crazy last few years
2. Lots of folks close to retirement and the C’s won’t go looking for newbies to take their place
3. C’s will shave the budget further
4. Shitty built homes in the suburbs that every 20-something bought on credit because its different here.

#190 The InvestorsFriend (Shawn Allen) on 08.11.11 at 4:07 pm

Oshawa and Wal-Mart…

What time is the Luddite meeting. We gotta destroy those machines that are takin’ our jobs…

Basically Wal-Mart is a superior and more efficient form of retail product distribution.

Around my part of the country we have Wal-Mart and a LOT of other stores,

P.S. I am a proud owner of Wal-Mart shares

#191 HouseBuster on 08.11.11 at 4:10 pm

And the 401 means it should be 8x income?

#192 Kilby on 08.11.11 at 4:10 pm

Vancouver, East and West sales July 2010 and July 2011.

July 3, 2010 to Aug. 1, 2010 747 completed residential.
July 4, 2011 to Aug, 1, 2011 809 completed residential.

City of Vancouver only. Up 8% from 2010.

#193 Hell in a Handbasket on 08.11.11 at 4:13 pm

America is a sleeping giant. Sure she is on the rocks right now, but don’t make the mistake of counting her out yet. The last countries to make that mistake were on the losing end of WWII. Once the US learns that to become rich again it needs to start producing more goods at home then it wil climb out of debt.

#194 Rich Renter on 08.11.11 at 4:26 pm

#196. Unless they get rid of the tea party republicans and start taxing their citizens more, the US is screwed. Wall street rules not Washington. The jobs that left America to satisfy corporate greed will not be coming back anytime soon.

#195 DM in C on 08.11.11 at 4:35 pm

Ottawa just lost what must be the final bits of it manufacturing base yesterday with SMART announcing it’s moving to Mexico. Ain’t free trade great!


BUT in a nice move by karma, 18 of the ones who got pink-slipped yesterday won the 6/49.


#196 Red Tory Tea Girl on 08.11.11 at 4:35 pm

I’m actually really surprised that people are so bearish on Winnipeg, given how cheap some homes already are there… I suppose though when you live in a city like Edmonton, as I do, home of the hundred-ninety-five-thousand-dollar fixer-upper, that you get your perspectives skewed a bit.

#197 Bill Gable on 08.11.11 at 4:40 pm

All of them.

#198 JohnnyBravo on 08.11.11 at 4:47 pm

#13 mike on 08.10.11 at 10:29 pm

mike, you said, “Is Real Estate in trouble or not [?] I am tired of the waffling[;] I am holding off buying a house based on the blog and your advice in Toronto.”

I would buy a home if:
• I really preferred owning to renting.
• I could afford it (I mean REALLY afford it, taking into account all present and future obligations, e.g. kids’ education, saving/investing for retirement, money for uninsured emergencies, maintenance/repairs, higher property taxes, etc.)
• Along those line… I would be able to afford higher mortgage payments if I had to renew at higher rates.
• I could afford to keep my home for an extended period if I lost my income. This may seem a bit overly cautious, but you have to account for the higher risks of buying at this time.
• I plan to live there at least several years.
• I am emotionally and psychologically comfortable with the amount of debt I’d be taking on. In other words, I would be able to sleep at night.
• I have no expectations that my home will fund my retirement. My home may be worth a small fortune when I retire, but I won’t count on that. Plus, since residential RE prices typically move up and down in sync, you really can’t expect to gain from arbitraging between a SFH and, say, a small condo. (Selling in Van or T.O. and retiring to Florida right now is a different story, and a gift for anyone in that position.)
• I could devote the time and effort required to maintain a home, especially a house on a decent property (or pay others to maintain if for me).

#199 canali on 08.11.11 at 5:07 pm

real estate in bc continues upwards overall, unabatted by turmoil elsewhere:

#200 8 times income the new normal Garth? on 08.11.11 at 5:23 pm

Looks like the buy and go bankrupt people are winning and the worry worts who think on how they will be able to pay off the debt and thus didn’t buy since the number don’t make sense have lost. People with NO MONEY (stupid money if you can call no money that)are the big winners from 2006 and on who had nothing to lose and everything to gain. Garth you are now back tracking and telling us 3.3 times income ratio is no more and 8 X income the new normal? Canada will crash but the question is when. Buying into a economic prison is not an idea for those who want to live. I lost big following Garth’s logical advise. 8X income for a home SFH is the new 3X income because it’s near the 401? If prices in the 401 were overvalued in 2008 how can it only drop 15% in total? I either leave Canada for a better life or go into a economic 8 X income prison since the 401 is near by???

That makes entirely no sense. Try again. In any case I merely said 416 is less likely to decline than other cities, for obvious reasons. — Garth

#201 Two-thirds on 08.11.11 at 5:28 pm

#183 The InvestorsFriend (Shawn Allen) on 08.11.11 at 2:50 pm

Thanks for the reply, the Dwarf comment was amusing.

“It’s always wonderful when people attack what I never said.”

Since when is asking questions considered an attack?

“I said Alberta only rose to the point where 8.1 mortages (sic) out of 1000 are 90 days late or more. In the U.S. at the height it (sic) 100 out of 1000. 8.1 out of 100 (sic) is not a high deliquent (sic) rate. In Canada the peak was higher than that in the early 90′s.”

8.1 out of 1000 (AB) is indeed not a high rate, but only with respect to the 100 out of 1000 (USA) which you have now quoted, unreferenced, twice. This is a comparison between the U.S. and Alberta, made by you. I respectfully asked you to explain why you believe this comparison is valid, but you did not answer.

8.1/1000 (AB, 2011) is substantially large, compared to 1.4/1000 (AB, 2007) or 4.1/1000 (Canada, 2011). It is even larger than the previous peak of 6.9/1000 (AB, 1997). Apples to apples.

“90-day delinquent to 0.81% which you sound the alarm for a six times rise is still a small default rate. Six times next to nothing is pretty much still nothing. CMHC will not be worried about this.”

Where in my original post was “alarm” mentioned? Your sentence reveals more about the reader’s reaction than the writer’s intention. The figures in my post are just facts.

We have both established our positions here. It is up to all the other individuals in this blog to draw their own conclusions about the facts. For the sake of not polluting the comments section with a likely fruitless exchange, I will add no more to my previous comments. Thanks for sharing your opinion.

#202 Ari on 08.11.11 at 5:30 pm

What about Hamilton? Don Cambell pumps Hamilton like there is no tomorrow. Your comments Garth, please.

His numbers are wrong. Specking in Steel City (former) is a mistake. — Garth

#203 Timing is Everything on 08.11.11 at 5:36 pm

#188 Tom from Mississauga

“Some might say Jordan Blake headed the wrong way, moving from Victoria, B.C., to look for a job in his hometown of London shortly before unemployment here spiked to 9.1%.” The London Free Press


#204 unbalanced on 08.11.11 at 5:39 pm

To the Smoking Man . Ya called me your ” old friend and good buddy”. I guess I was wrong. I can be your friend. I’m just that sort of person who can’t hold a grudge. Its not in me. I quit smoking 3 months ago after smoking 40 years. You know what they say. You can’t escape death or taxes. I’ll beat death for a little while. Take care and remember to try and take it easy on us little underlings.

#205 WI Boomer on 08.11.11 at 5:43 pm

Today the markets closed up decently. Housing expected to keep in the quicksand. What DID they expect? Quiet sales, employment gowing at a snails pace -in most areas.
People are cautious now, and after their exuberance of years gone by, it is a time for cleaning house, or your balance sheet.
See the US is repatriating some jobs, nice for a change. Hope it is the start of a trend.

What Canadian markets will fare worse? Won’t hazard a guess as I have no fresh market knowledge there.
I see our markets they think will perform poorly, and they might be fairly right on there.
Just wish you don’t HAVE to go through what the US has been through. I was lucky, or frugal, or both I think.

#206 betamax on 08.11.11 at 5:50 pm

#196 Hell in a Handbasket: “America is a sleeping giant.”

More like a drunken hobo passed out in an alley and fast approaching is a gang of teenage thugs carrying a can of kerosene and a Zippo.

Figuratively speaking, of course.

#207 betamax on 08.11.11 at 6:00 pm

#64 Kitchener1: “After that, I just wrote whatever they wanted to hear….Its stragedy[sic], game theory whatever you want to call it…That was one of the most important lessons i took away from University.”

It’s not called “stragedy” nor game theory, it’s called kissing a** and selling out. Most people who practice it don’t need to go to university to learn it.

You could have instead done substantial research and written a brilliant paper that they would be forced to give you an “A” for regardless of their personal beliefs. Then you might have learned quite a different lesson from university.

#208 shane on 08.11.11 at 6:00 pm

Why did the Bigrider delete me? #187


#209 shane on 08.11.11 at 6:02 pm

Garth, I need your back-up from BigRider i belive he deleated me because he doesnt’t want to hear how much markham is going to drop!!!


#210 Walmart and Shawn on 08.11.11 at 6:02 pm

To Shawn Allen:

Did you even bother to watch the video posted?

Obviously not.

Like all your comments: Pure conjecture, based on nothing.

By the way, Nazis were “superior and efficient” too.

Do some homework.


#211 randman on 08.11.11 at 6:10 pm

Good post DA!!


#212 Timing is Everything on 08.11.11 at 6:13 pm

Aw, don’t be hurt. Just improve. — Garth

Imagine how Smoking Man feels.

Smoking Man, you’re improving already. I knew you’d
figure out that spell-check thingy…eventually.

I use spell-check all the time, and my brain isn’t even damaged.

#213 Cato on 08.11.11 at 6:39 pm

I think perception of risk is likely influenced by age, income and lifestyle choice. I’d judge risk based on attitudes of others in community because that will be the biggest determining factor in who thrives and who suffers if times get hard. When big brother is no longer there to answer to every whim what is going to be the response of your neighbours.

Communities who will likely thrive or survive:

Most maritime communities fit at top of the list. Roots run deep and folks are not inclined to pick up and leave. Halifax would probably top the list, it has widest range of lifestyle choice and plenty of neighbouring communities near the ocean. Should make it attractive to refugees escaping housing downturn in other Canadian markets. It also has boring, predictable employment. Wages aren’t terribly high but economy is predictable and that means sense of job security.

St John’s – the rock is used to hard times and its neighbourhoods know how to adapt if times get tough. You’ll know your neighbours whether you want to or not, there is a far stronger sense of community then suburban wasteland like Calgary. If you can stand the winters its a very livable city for all social classes. Unlike Vancouver life doesn’t completely suck if you happen to be poor. This has a stabilizing effect on housing as lower wage earners just aren’t pulling up stakes and moving on a whim. When people feel connected to their communities they don’t attempt to burn it down. I don’t imagine civil unrest will be good for property prices in places like Vancouver.

Bottom of the list is easy:

Calgary – completely unsustainable. Needs vast amounts of tax dollars to support bloated infrastructure costs associated with a city so poorly designed. Its too spread out. Ironically increasing energy costs will probably kill the city. The middle class tax base will get squeezed on all sides. Its bad enough that you need to have a car to survive there but even worse when you add up the number of miles driven to live some semblance of a life. Five bucks put into gas tank in order to get groceries is money not going to dinner table.

Vancouver – no real economy to speak of and what little it does have its losing. The city can’t compete with a strong C$ which means its bleeding high paid jobs in the knowledge industries. The other driver of employment is real estate development. If California ever legalizes pot then its really game over. This is a city with expensive tastes and city councils who make spending decisions based on ideologies. Not a very good place to put down roots unless you have a net worth in the top 1%.

Avoid suburbia like the plaque, its a doomed lifestyle choice. Suburbs will be the first to see service cuts and first to see tax increases. When times get a little hard and neighbours need to look out for common interests themselves last thing you want is to be stuck in a community where people have gone years without ever meeting each other.

#214 The InvestorsFriend (Shawn Allen) on 08.11.11 at 6:50 pm

Come to Wal-Mart, we have cheap underwear. (I am a part owner of Wal-Mart).

We mark our stuff up an average of 33%. (Gross profit 25%) A major Canadian clothing store chain marks up about 200%. (gross profit 67%) But we make more money at the bottom line return on equity. We are simply far more efficient.

Costco marks up around 16% and is more efficient still but who needs a whole case of underwear (well who besides stock investors this past week)?

And no, I will not model the underwear for you.

#215 Glen B on 08.11.11 at 6:52 pm

I currently rent in the 416. Although I know and like 416 area, I would not buy a property here even if prices corrected 30%. 905 is much nicer for the most part IMHO and I can’t wait to get back into a 905 house after the correction.
I think 416 will fall harder than Garth thinks.

#216 The InvestorsFriend (Shawn Allen) on 08.11.11 at 6:53 pm

United States 30-day mortgage delinquencies rmain at 10.2% at Q1.

In Canada we report 90-day figures but we are WAY lower… as in 10 times but that is 90 days versus 30.

Credit card delinquencies were down a lot…

We should get Q2 figures shortly


#217 Live Under Your Means on 08.11.11 at 6:54 pm

#101 tomohawk on 08.11.11 at 7:06 am
I’ll vote Moncton, NB as a place likely to be spared. Average income roughly 70K, average house price roughly 170K. Ratio roughly 2.5 : 1. It’s bilingual, so great location for things like customer service centres. It’s centralized between Halifax, Charlottetown, Fredericton and Saint John and therefore the overland transportation hub for the Maritimes. It’s population is growing at about 2% per year which should help keep housing prices up.


Hubby really liked Moncton and has even thought about retiring there. I like the bilingual atmosphere, but not it’s weather, etc. Too small for me. Not sure where we’ll end up when he retires. I’d love to go to France, but it’s too expensive. Sure my hubby’s cousin in the south of France would love us to move into their vac. lodging above. It’s huge, has a separate entrance, but is missing a kitchen.

#218 BrianT on 08.11.11 at 7:16 pm

Business as usual in Ontario-210 a yr to pick out art for the LRT line http://www.thestar.com/news/ttc/article/1037975–province-halts-very-rich-contract-for-ttc-art-consultant?bn=1

#219 Terence on 08.11.11 at 7:16 pm

I’ll say Toronto, but most specifically: The GTA Condo Market. Like you say, houses downtown will hold their value… but the condos are becoming ludicrous, and not a single developer has actually considered that to keep owners in the building, they should make the condos family-friendly. At least Adam Vaughan understands this. The developers don’t care because they just want to sell their units – then they wipe their hands clean and walk away. If the market is buttressed by investors, though, (which it is), it’s a harder nut to crack

#220 miketheengineer on 08.11.11 at 7:27 pm

Garth et al:

Some of the not so great cities (in Ontario)

Milton-where the party has not ended and the homes are still going up like crazy. Why? Very little real employment and industry, almost 90% of RE is homes, and shitty roads leading into and out of it to go to Toronto to the jobs. Prediction 25% decline if TO declines 15.

Barrie-It has some industry, but man what a brutal commute in the winter to T.O. for your job…a Hummer is a must. Prediction 25% delcline

St. Thomas – Ford shutting it’s doors forever. Predict 50% decline if it hasn’t already happened

Oshawa – Like Hamilton, pretty much a one horse town without big hospitals, big University, big College, and no waterfalls to hike in the summer. It is down already so 30% more. But hey cheap waterfront properties.

Just my thoughts, and hey the party can keep going, I could be entirely wrong….some say Milton is the center of the galaxy….or potentially the home to greatest number of highly leveraged home owners in the country. But what do I know, I am just an engineer….?

#221 ballingsford on 08.11.11 at 7:37 pm

My guesses:
Vancouver (HAM is cooked)
Victoria (Shellfish are overcooked)
Kelowna (Marijuana is rotting because of too much rain)
Toronto (The number of uninformed kids who are buying is shrinking and the rest are getting wiser.)
Calgary/Edmonton (The oil patch is going the way of the Cabbage Patch Kids.)
Ottawa (Government and Technology doesn’t look good unless you win the lottery when you receive your layoff notices. Congrats to the folks who worked with the Smart Board technology (I love using your Smart Boards) and I’m glad you won the 649! Others, in these jobs shouldn’t count on this for their retirement.

So as an aside, what’s your prediction for the markets for Friday? One day up, one day down. I’m going to say a down market on Friday. Housing, well what can I say. It’s an interesting time to be alive and witness all of this!!

Garth, you will go down in history, I am sure!

#222 Timing is Everything on 08.11.11 at 7:38 pm

#107 Montrealer

Not to mention, the ‘falling’ concrete jungle that is Montreal. Taxes and user fees are gonna be a bugger. Maybe the city should issue hard hats to citizens. Paid for with tax dollars, of course. Is it really that bad there?


#223 Nostradamus Le Mad Vlad on 08.11.11 at 7:53 pm

After looking at the pic and getting full financing from Dragons Den, I began a new venture — HemorhhoidAfterFX Inc., in collusion with GS, JPM and the US Fed. Yessir, I’m on to a winner here!
#142 GregW, Oakville — G’day Greg. Japan, as per the rest of the west, is a basket case, but most don’t even realize it. Stay well!

#153 Devil’s Advocate — “Life’s a ride… enjoy.” Nice to see you still around, DA and a great post!
Go Iceland! The world can learn a valuable lesson here — Screw those Infernal M-F*(kers! Beijing downgrades US again; Booming Business Tent cities becoming more widespread; Trade Deficit widens for US.

US Default A good thing? Not too sure; 2:42 clip US Congress owned by corporations (wait ’til the Super Congress takes power and makes these clueless dickheads unemployable); Looting taxpayers to keep themselves afloat, and this — 3:23 clip; 4:50 clip Chaos (not you, Chaos!) is coming to the US; What Obama, Congress and the IMF don’t know know about bank runs (when people have nothing, they have nothing left to lose); 5:13 clip 2012 — Debt crisis only for US.

1:06 clip Greg W. — Plutonium suspected at nuke blast in Fukushima; Mars Final destination for Rover? Survival People stocking up on survival gear could be labelled terrorists by the FBI; UK Govt. Big Brother; Syria “Israel is blackmailing the United Nations by threatening to launch a regional war if the UN recognizes a Palestinian state.”

Massacre NATO doing a fine job in Libya; CC Polar bears are drowning because they can’t swim. On a related note, pigs do fly; Obama and the neocons. Same party, different day — creating new wars in the ME for someone else.

#224 Smoking Man on 08.11.11 at 7:58 pm

#207 unbalanced on 08.11.11
Love you man freinds again :)

Running out things to talk about, time for the bottle opener

#225 walter safety on 08.11.11 at 8:13 pm

Would anyone actually want to live in some of those cities?
Ok, Fredericton has the same amount of sunshine as the 905, and Halifax is very beautiful and livable .
Is the goal just to protect yourself from price declines?
Hey if its just a guess who cares.

#226 Eileen on 08.11.11 at 9:07 pm

Although, Stampede Sam, if you are “loose” with money, you will most likely “lose” it. In that case, it’s a moot point, cause whether it’s loose, or lose, it’s ultimately LOST. :)

#227 Utopia on 08.11.11 at 9:09 pm

#114 Ex-Cowtown

“Are the irresponsible borrower-investors going to get a pass? And the responsible prudent investor get nailed?”

In some cases yes.

You got it right Cowtown. In fact, savers are subsidizing borrowers right now. It is a form of tax on security versus risk, a transfer of wealth from one class of investor to another. It is the reason you must get properly invested and earn more than the real rate of inflation too.

Let me explain. Plenty of debt instruments are currently paying out a tiny yield. GIC’s are another situation where you are lucky to get 3%. If real adjusted inflation is running at 3.5 percent then you are losing buying power by effectively holding low interest bearing certificates.

You get all your money back when the terms end of course and you get the posted rate you bought in at but you can buy less than the day you first invested there.

That’s why the Orange guys shorts is no place to live.

Contrast that with the borrower who reinvests for returns ranging from 4 to 10 percent and is capturing the differential between extremely low borrowing rates versus higher returns plus a possible upside on the capital investment.

The banks can make out like bandits in such situations. Ever wonder why they are posting record profits despite a dismal economy and extreme volatility everywhere?

Houses and most other property including farmland has been rising in value for several years for example. Stocks (until the last few weeks) have been on a tear for more than two and a half years.

So savers who seek safety over yield effectively subsidize those who borrow to reinvest for higher returns. At least in the very large picture anyway. And that is again another reason why it makes so much sense to cash out at the top of a real estate market and get reinvested for growth.

Recall that many people have earned enormous capital gains by employing cheap money with minuscule interest rates. Converting that advantage into a rising stock market (after a correction) means you could catch both trends to your advantage.

In the very long run, as rates finally rise and housing hits bottom you can repeat the cycle by going back into housing again.

You do this when credit is tight and prices low. Usually this coincides with rising interest rates. You see,savers do get their crack at taking advantage of borrowers eventually though it is during other parts of the credit cycle when easy money is unavailable.

That is coming eventually. But not for two more years according to Ben Bernanke. It can certainly pay to load up on cheap money at a time like this if you have the sense to know what to buy and when to get the hell out.
On another note…man, some bonds kicked ass this last little while. It is times like these when a little balance in a portfolio can shield you from the extremes the market is dishing out.

#228 Brave Sir Robin on 08.11.11 at 9:16 pm

Re: #204 Ari

Specking in Hamilton is a mistake?
OK, Hamilton actually has an economy apart from the steel companies ie major teaching hospitals, a university, a college, it’s a major destination for immigrants, a plethora of government jobs, and many successful small businesses, decent ethnic restaurants, cultural venues such as the hamilton philharmonic orchestra, concerts, art gallery…..the Ti-Cats of course. Housing in Hamilton is very affordable, and although I don’t agree with speckers, hamilton would be a good place to invest.

#229 Utopia on 08.11.11 at 9:19 pm

#153 Devils Advocate

Good one man! Glad to see you are back posting. I see you have already riled up one or two of the dawgs. Maybe it is your name that drives them wild…or could it be the chemistry and the mayhem you allude too…..

#230 Utopia on 08.11.11 at 9:49 pm

So which towns are going to get hit hardest? My vote is for the resort communities of Whistler and Canmore as examples.

Ski-country is going to get its ass whipped as usual.

Every major downturn is the same in this regard and some of the trendy BC ski-resort communities like Rossland will be on the block as their economies are just too reliant on tourism.

Cottage country is headed for a fall too. It is all fine and dandy as long as everyone is able to cover the expense of a second or third home but sentiment changes like lightning as recessions emerge.

I cannot neglect small prairie towns in this group either. They are full of empty homes and shops and business that are used simply for storage and nothing else. The residents have long since moved to the major urban centers for better opportunities and to be close to services and medical centers.

Many of the communities themselves are well along the road to dying and the demographics prove this. These towns are “old” being heavily weighted with the fifty plus to retirement age group. The homes in some of these places were give-a-ways until recently. Lots could be had for a dollar, houses for free if you would only just please pay the taxes to the RM’s.

They will see one of the largest crashes in percentage terms despite being dirt cheap already. That just goes with the territory. Up near the Battlefords there is a town where the local Legion closed not so long ago. The municipality gave the building to a local for the price of one dollar just to ensure there would be a continuation of property tax revenue.

There were no other offers of interest.

#231 Pat on 08.11.11 at 10:26 pm

@ #215 Cato,

Lifestyle choices, deep roots, weather… bla-bla-bla…

All that matters is prices, rents and incomes.

I’ll comment about Halifax because this is the city I’m most familiar with (apart from Toronto and Van where the situation is obvious).

I can show you two identical condos, one for sale at ~ $350,000, the other for rent at ~1,400/mo. Or two similar houses, one for sale at $650K, the other for rent at $2,000/mo. What’dyasay? I say Halifax is 30% overpriced.

#232 bigrider on 08.11.11 at 10:29 pm

#210 and 211 Shane on Bigrider deleting me.

I cannot delete you shane. Only Garth can do so. I made a funny that I guess Garth did not find funny and he deleted my post.

Believe me , no big deal. I do believe Markham will drop in price.

#233 a prairie dawg on 08.11.11 at 11:30 pm

#169 smoking man

“All I do is try and educate the underclass only to be a victim of insults…”

– – –

I hate to burst your bubble, but the people that come to this blog every day aren’t here for your predictions. You show up out of the blue one day not long ago and it’s been blah blah blah ever since. Start a blog or website of your own if you have to be in the spotlight or be a post whore. The drunken ramblings of strangers on the internet is getting old.

#234 american on 08.12.11 at 12:16 am

Here is a link from a “main stream media” news website

ya see, not all is lost in the USA.


#235 Ari on 08.12.11 at 8:56 am

Thank you. Much appreciated .

#236 Aub on 08.12.11 at 10:55 am

Garth said in the article:

I’d like to hear your reasons for selecting a city or two which you feel will be reamed or spared by the approaching real estate correction.

Some posters have suggested that Kitchener/Waterloo area in Ontario as a possible area to be hit by falling prices. As a resident in the Kitchener/Waterloo area who’s considering buying, I’d appreciate hearing from those posters what their reasons are.


#237 nat on 08.12.11 at 11:35 am

Curious where you see Winterpeg Garth. Winterpeg had a depressed real estate market for many years but which has been in the ascent for the last several years. Average price is around 300K. Winterpeg is no industrial hub, but it has some significant private sector players (Great West Life, MB Hydro, MTS, Investors Group, a bunch of farm equipment manufacturers), a mature local economy (avoided a recession after the ’08 crash and tends to do better than most provinces when the overall economy is hurting) and the provincial government is a major employer. I tend to think Winterpeg is headed for flatling values within a couple of years, and maybe a dip (due to boomers trying to cash out) but not a full on collapse.