‘Don’t worry’

In mid-July the average detached house in 416 cost $720,808. In mid-August the same place was changing hands for $597,593. At least that’s what the Toronto Real Estate Board reported this week – a $123,000, one-month 17% plunge – which will probably be brushed off as nothing more than an embarrassing typo.

And just to confuse folks a little more, the cartel reported last month a year-over-year surge of 10% in SFH prices in 416. This month that had morphed into a 7% decline. Whether a mistake, or a reflection of how the realtors have recently decided to manipulate their numbers, I think we just glimpsed the future.

It’ll soon be time to wipe the patina of smugness off the chops of most Canadians. Especially two, who will be making news on Friday. Apparently it ain’t different here, after all.

Consider this: in June our factories were growing cobwebs, with sales plunging to the lowest levels since November. Manufacturing output tumbled to half what analysts had expected in the second quarter. Our exports are down, our trade deficit up.

So what?

Well, so much for the Bank of Canada’s forecast that the economy would grow by a stingy 1.5% in the second quarter. It’s now all but assured we shrunk faster than a stud in a cold pool. This means Canada joins Japan as G7 countries where the economy’s actually contracting – and forms a stunning reversal from the 4% growth recorded last winter.

The reason’s clear – a weak America means a weak Canada. After all these guys buy 70% of what we make, and a loonie above par means our stuff costs too much. This is why the BC forestry industry’s in the dumpster, and no Americans are house shopping on Nova Scotia’s idyllic South Shore

As CIBC’s chief economist Avery Shenfeld put it (in highly technical terms): “the export market has fallen off the proverbial cliff.”

Just a hunch, but this might be why there are currently 218 houses for sale between $400K and $600K in the town of Qualicum Beach on Vancouver Island’s frolicking Boomer east coast. Population, 8,000. That’s enough listings to last about 20 years.

Yeah, yeah, I know, I know. Multiple bids in North Toronto and the west side of Van. Realtors orgiastic over false rumours interest rates in Canada will stay put for two years. A MSM too busy blowing sunshine up backsides to tell people the facts. And a society in which families have never choked down so much debt trying afford what they can’t.

A contracting economy, quiet factories and flipped-out Americans mean fewer jobs, lower incomes and trouble for real estate. It doesn’t matter how cheap mortgages get, these realities will be with us for a long time. As the end-of-days people who hang around this blog constantly point out (sometimes they make sense) we’re not going back to 2006. Ever. The world will be a fine place for investors with money to spread and the wisdom to do so, but for most folks it’ll suck.

The houses they borrowed so mightily for will be worth less. Living costs will be higher, but their net worth lower. Equity will fall, but debt remain. The agents, bankers and brokers who told them property was a no-lose deal will be nowhere in sight. As I have tried to point out here for the last three years, equityless property virgins, house-rich Boomers and anyone with the bulk of their wealth in a single asset on a sole street, is at risk.

If the US economy takes five years to recover (a rosy scenario), can we wait? Do your friends and relatives understand what this might mean? Are they preparing?

Of course not. Because nobody’s telling them. And that will continue Friday.

In Ottawa, opposition MPs forced hearings on the economy, in the light of recent stock market mayhem. Scheduled to testify are F and Mark Carney. At first a number of private sector economists were also invited, but Tory members quashed that. Too much reality.

Said F’s parliamentary secretary: “It’s imperative, in my opinion, that we not do anything that might worry Canadians. And I think that hearing from the Minister of Finance and the Bank of Canada will help to reassure them, as they should be, that there is concern, but that we are proceeding, as parliamentarians, in their interests.”

So screwed.

204 comments ↓

#1 Dan on 08.16.11 at 9:34 pm

I think we’re turning Japanese! Following in Japan’s footsteps….

#2 shanks on 08.16.11 at 9:34 pm

1st! now to read the freaking blog lol.

#3 Priced_out on 08.16.11 at 9:36 pm

First and addicted to this pathetic blog

#4 shanks on 08.16.11 at 9:39 pm

ok so it sounds like our government, as well as your average realtor and the organizations that represent them are all a bunch of liars who report and manipulate statistics as it suits their needs. They all put on a charade of working in your best interest, but like a jock at a frat party they are really only out to screw everyone they can.

#5 mississaugasold on 08.16.11 at 9:46 pm

Oh man I cannot wait to hear what these idiots have to say on Friday. Should be quite a show.

#6 JohnnyBravo on 08.16.11 at 9:48 pm

“Said F’s parliamentary secretary: ‘It’s imperative, in my opinion, that we not do anything that might worry Canadians.'”

OK, now I’m worried.

#7 RonInDelta on 08.16.11 at 9:52 pm

Hate to comment, but as bad as it seems won’t Friday simply be the cheerleading of how great Canada is compared to Europe and America by Flaherty? I like Carney but I can’t see him giving any answers to Parliament that would wake up the backbenchers on the snail’s pace recovery and impending debt/retirement bomb coming.

#8 Smoking Man on 08.16.11 at 9:55 pm

Wow Ron Paul completely ignored by the main street press, there talking points all identical.

As newton noted for every action there is a reaction,
Been following this guy since my son put me on to him last year.

Now for all those that think he is a nut bar, and he may be. When you think off all those people on food stamps, all the Americans that are not working and all the ones that hate Washington, and the bankers if they see this. Look out is all I got to say.

http://www.youtube.com/watch?v=5D58v4eiUuI

If he is a successful as my little voice is telling me he will be. This will mess up all my long term investment forecasts. Back to the drawing board.

Don’t take your eye off this one…………….

Come on Garth you know for the last ten years that prices fall after July for a few months re group and surpass the next year spring prices…Everyone knows that

#9 Shy Blawg Dawg on 08.16.11 at 9:56 pm

Such bleak news … might as well go frolic in the markets . . . panic, fear, greed, gluttony, winners, losers … better drama for entertainment than TV can produce.

#10 DJ on 08.16.11 at 9:59 pm

Wow Garth, you’re right!
Here is the link for the July report for anyone interested.

http://www.torontorealestateboard.com/market_news/release_market_updates/news2011/pdf/nr_mid_month_0711.pdf

#11 squidly77 on 08.16.11 at 10:06 pm

The cartel has assaulted your ‘218 houses for sale’ link in record time.

#12 Mr. Lahey on 08.16.11 at 10:11 pm

Randy, Garth is finally saying what I have been saying all along. The shithawks are circling and coming home to roost.

#13 Snowboid on 08.16.11 at 10:12 pm

I was watching the local Global ‘news’ a few minutes ago, at first I thought I had accidentally started “The Halifax Comedy Festival” on the old PVR – but no…

It was a serious (wink, wink) story: “Real estate is wonderful all across the country” says the Global team, never been better – sales up since last July, yada, yada, yada…

Lucky I was only into the cheap wine today so my prayer to the porcelain god didn’t cost that much!

Garth, please tell me you were invited to the hearings – I would even get up early to watch live CPAC for that!!

#14 Watching the Liberal Party die is so good on 08.16.11 at 10:13 pm

I talked to someone in BC gov today who says that MSP services offices have been overwhelmed in recent weeks by people filing new claims after being laid off in the province after company health programs have been cut off. If there is so many unemployed in BC why isn’t the media talking about it? Where are the buyers for the non HAM markets going to come from?

#15 Jody on 08.16.11 at 10:13 pm

The general public is so clueless. The union I’m part of had a pension shortfall a few years ago, the government chipped in the money they had promised years before, except the government said it only cost them a few billion, the reality was more than 12 billion, and that was just to get everything back on a sort of even keel. Future pension obligations? Yea right. And this is just one public sector union, next up, nurses, doctors, fireman, police, paramedics, etc. No level of government in this country can meet it’s future pension obligation, none. F and the rest of the stooges are totally full of shit and they are going to keep spreading it on Friday, everyone will eat it up. Man oh man, are we all going to be sick. Buy land, land you can grow food on, buy seeds, you will become very rich. Hell, even George Soros is dumping his gold for farmland.

#16 Rope Burn on 08.16.11 at 10:16 pm

2 weeks ago during a family gathering my brother-in-law proclaimed with admiration that he just bought a detached in Georgetown for … (drum role) $500k big ones.

I stopped to collect my thoughts, waiting for some type of punch line…nope, he’s put a deposit down which should be built next summer. He will sell his current townhouse a few months before he moves in. They have 2 kids and his income as a plumber (in the construction industry) is in for a shock.

I work in the Insolvency industry, daily, people will walk in, credit cards, line of credit in the $40-$55k range. Kicker, they’ll do anything to keep the house – though it was the house that crushed their budget.

And as a added bonus, my father-in-law, a happy grampa wants to downsize and move closer to his son in Georgetown. He too purchased a bungalow (amount unknown but believe to be in the $470K range for a 1300 sq.ft money trap).

What ever happened to an ounce of caution! They just put everything on the table, so much to lose.
I tried to convince my wife to tell her father that dark clouds in realestate are brewing. But that fell on deaf ears.
Yes, we own, but we bought almost 10 years ago, bought a house which we calculated if one of us was not able to work, the other’s income could still afford a mortgage based on 11%. We did without all the bells and whistles, our home is just that, shelter.

I sensed things were coming undone back in 2005 – even changed careers and now work in the insolvency field that seems to be growing by the hour!

Batten down the hatches I tell clients, but no one seems to care!

#17 OnlyTheBankersLaugh on 08.16.11 at 10:17 pm

Yeah, 5 more years of low rates. That a boy, Harps and Flarps! Screw the old folks on GIC’s. Screw the young kids by making them feel normal by swallowing debt bigger than price of my first 2 houses. More jugs of wine and fresh horses for the Smokin men, let’s ride, boomers!

OTBL

#18 wetcoaster on 08.16.11 at 10:22 pm

Bernanke is asking Carney “how the hell have you gotten away for so long with the CMHC scam while we suck wind ? ” Carney just smirks and winks while pointing at a pic of Don Cherry pumping Dominion mortgages.

#19 panopticon singularity on 08.16.11 at 10:24 pm

why do stupid morons post first when they aren’t even first, to compound how stupid they are for posting first in the first place? isnt it past your bedtime?

#20 Maxamillion on 08.16.11 at 10:24 pm

Even the condos in downtown Toronto are starting to voice an opinion. Glass keeps crashing down every week. Listen to the condos, they speak.

#21 Marnic on 08.16.11 at 10:28 pm

Bang on tonight, Garth. Strong piece.

#22 Utopia on 08.16.11 at 10:37 pm

I warned you all just ten days ago that the top in Real estate had been breached. I told you it was over. Few listened to me. None commented. Now you will see that I was right.

Crying will not help.

#23 Don on 08.16.11 at 10:37 pm

I can back Garth up on Qualicum Beach – more and more listings are appearing in Qualicum Beach and surrounding areas – small economy and people are passing on – and their children are selling the houses as they can’t find jobs their – Albertains who bought investment properties are moving back to Alberta as they can’t take the wet weather (not good for their health). I mean really – who buys a 3-5 bedroom house when they retire – most are starting to downsize to retirement homes or the few remaining condos. I saw this coming 15 years ago when a 3 – 4 bedroom rancher by the golf course was going for 169K – 249K. A massive building boom took off in Qualicum Beach and this ended one – two years ago. Two many houses not enough retirees with the cash needed to buy – not sufficient health facilities, retirees are getting older and selling to move into assisted living quarters in nearby Nanaimo. It is amazing how common sense thinking is now considered to be contrarian thinking, lol. Victoria is seeing more and more houses for rent and just about every house has a basement suite for rent for about $1200/mth. Apartment vacanies are increasing, less students returning to University – if I was them I would stay at home and take courses by correspondence until they can afford to move out. Vancouver mentality – well you have to live their to understand how trendy they believe they are or think they are, bad traffic, bad weather, and you might get caught in the gang cross fire. Raincouver – it really amazes me that educated people can be so so oblivious to reality, but that’s what herd mentality gets you. I remember the plains first nations use to hunt Buffalo by chasing the herd off the cliffs. We are about to experience the tipping point in housing and corrupt politicians. Stupid transcends all generations – sorry but that is a true reality.

#24 Pete in Barrie on 08.16.11 at 10:44 pm

The National led with a story about Vancouver real estate. It appears the public are still convinced that real estate is the only safe investment out there. They even profiled a 100 year old fixer upper listed for 1.3 million that should go for more than asking by the end of the week.

Will it ever end, and when it does …. ouch.

#25 not 1st on 08.16.11 at 10:45 pm

I don’t think that Carney and F are as reckless as the U.S. is and wanting to inflate this bubble more. They wouldn’t have changed mortage rules a few times if they wanted that. Secretly, they probably want to soft land it, but raising interest rates will kill whatever anemic growth there is.

I am sure F is probably call the banks and telling them BOC interest rates aren’t moving for a while, but you have to make lending standards more stringent asap and reel this thing in. It may be too late for VC and TO, but the rest of the country can be saved.

#26 need a mortgage ? on 08.16.11 at 10:45 pm

As a long term Conservative supporter, this worries the hell out of me,:

“It’s imperative, in my opinion, that we not do anything that might worry Canadians. And I think that hearing from the Minister of Finance and the Bank of Canada will help to reassure them, as they should be, that there is concern, but that we are proceeding, as parliamentarians, in their interests,” explained Conservative MP Shelly Glover, who is Mr. Flaherty’s parliamentary secretary.

It is the secrecy that we see from this government that has turned so many away. We hear absolutely nothing, then, plop, “Here’s the bowl of stew we ordered for you. Sorry, too late to change the order now. We’ve already charged your account.”

#27 Cory on 08.16.11 at 10:46 pm

But Garth, today the CREA reported that real estate is firing up again and prices were on the rise this year and next…….!!! wtf??

#28 Mr. Lahey on 08.16.11 at 10:51 pm

Marc Faber and some sobering words about what is coming down the pipes. Not for the weak of heart. Randy get me another drink and let’s go see what Ricky is up to.

http://www.youtube.com/watch?v=b_L7D-Q4BBk

#29 T.O. Bubble Boy on 08.16.11 at 10:54 pm

Wow – F and Carney in the same room?

They can continue to work on their plan to keep rates as low as possible until the 2006-2007 wave of 0 down/40-year mortgages gets past the 5-yr renewal without getting kicked to the curb by the original lender.

Maybe F can assure us that all the Big 6 Banks are the envy of the world again, right after today’s warning that they’ll likely miss profit estimates for next year.

#30 bricklayer on 08.16.11 at 10:54 pm

hi Garth and others,

I don’t mean to start of off-topic, but … regarding the often here mentioned ETF’s, which ones do you recommend and why? and which ones don’t you recommend and why not?

Thanks for your help.

#31 Mr. Lahey on 08.16.11 at 10:56 pm

More Marc Faber. In his own words at 3:21, “the US is a doomed currency”. Randy, I said I wanted a drink…

http://www.youtube.com/watch?v=basRLcLnX0c

#32 Min in Mission on 08.16.11 at 10:57 pm

Wow, that link really didn’t last long!! Wish that I had been quicker, used to live in that area. Would have been an interesting read.

I think that I can wait/last for 5 or 10 years. Hopefully!!

#33 poco on 08.16.11 at 11:06 pm

#193 Waterloo Resident–from last post

I appreciate your comments–usually when you “sass ” someone a little, you usually get sassed back on this blog if you know what i mean.

I was also in the dark most of the time regarding the housing market–relying on CREA numbers–listening to Global TV and all their pumping–and of course, the local realtors lying through their teeth.

I have 3 friends/relatives who are realtors –bugged the crap out of them everyday–got the real scoop on the market–was linked to all the listings in the tri cities area–got all the new listings– price changes–sales–etc

new everything about any property i was interested in–watched the condo market decline since the spring of 2010–townhouses coming down since this past spring (2011)
was getting over 500 e-mails a week –way too much work–haven’t done too much in the last few months–

i now only follow certain areas and certain types of properties–still lots of price drops.–don’t think this will change for a long time
will post a few of the many listing i’ve found that are in dire straits (underwater) if you are interested in this market–it’s pretty scary when you actually see how many owners are screwed

#34 BC Bring Cash on 08.16.11 at 11:11 pm

F is telling the truth when he says the CONservative Govt. is proceeding as Parliamentarians in Canadians best interests. However he does not specify which Canadians. He of course is looking after the Corporate and Banking lobby interests.He is pretending that he is concerned about the average Canadian family. The current crisis upon us is of his own making just to scam the electorate to vote the Cons. a majority Govt. We truly deserve who we voted for. The Cons. encouraged the expansion of the housing bubble with no money down, liar loans, amortization of 40yrs,etc…
The Finance Minister and Bank of Canada Governor that created the problem has been given the job to fix it. Way to go Harper. Your going to fix the problem with the same way of thinking that created the mess in the first place.
I truly believe that these crises that keep on happening are not really happening due to incompetence but are all part of a plan by the Elite to destroy what is left of the middle class. Once the dust settles like in Ireland the Elite and their Bankers that created money out of thin air can move in take possession of hard earned assets for virtually nothing.

#35 Moneta on 08.16.11 at 11:13 pm

Man oh man, are we all going to be sick. Buy land, land you can grow food on, buy seeds, you will become very rich. Hell, even George Soros is dumping his gold for farmland.
———
Too late. I recently listened to an interview with a grower on Radio-Canada. Land is now so expensive that they can’t increase their business/production buying more land unless they get government subsidies.

Guess what the financiers, speculators and pension funds have been buying up since the credit crisis… farm land!

#36 Dan on 08.16.11 at 11:14 pm

Nice to be first, look up!

Want to see what’s coming next in the US – look at Japan in 2000 … the US is following Japan to a ‘T’.

#37 Rich Renter on 08.16.11 at 11:19 pm

Apparently F will announce Canada will do what it takes to withstand global issues and M will announce that although money will remain dirt cheap for the next 2 years, everyone should be good and not spend their brains out.
What F should announce is the end of CMHC given the fsct that 70% of Canadians owe a home and M should keep his mouth shut.

#38 Ware on 08.16.11 at 11:19 pm

Tory times are tough times. Stephen wanted an election in 2008 before the economy tanked, and it was the same in 2011.

#39 JohnnyBravo on 08.16.11 at 11:19 pm

The average person is being whacked in three main ways:
1) They borrowed too much of their future wealth to buy stuff they really couldn’t afford;
2) Their governments did the same thing;
3) These same governments and their monetary authorities are devaluing their currencies.

(I won’t even include the massive amounts of money that have been transferred from “we the people” to the financial sector, which includes such bait-and-switch schemes like TARP, because that mostly occurred in the US.)

So, the average debt-laden tax payer is burdened with three heavy “taxes”:
• a tax on their future income;
• a tax on their current income (plus all other taxes that go along with being a living, breathing member of the genus Homo), and;
• a tax on the purchasing power of their money.

Nothing new, really, but all three “taxes” are particularly heavy currently, and they’re going up.

It is hardcore, triple-X, brute force financial repression. Even the prudent––or lucky––ones with little or no debt still have the latter two “taxes” to deal with. And it’s getting worse.

If there is to be no sustained economic growth for a while yet, as per the FOMC’s (F√çk Over More Consumers) recent pronouncement, then let’s at least hope for a muddle-through economy in which sound financial advice and good wealth management can help you steadily trudge through the muck so that you are better off when you exit the other end of this swamp we are in. (That’s assuming you have any wealth to manage.)

#40 Killer Chicken or Imploding Boomer? on 08.16.11 at 11:20 pm

23 Don – thanks for some insight on that. I wasnt
sure what Garth was alluding to as the sales in Pville/
Qualicum seem to have been fairly steady for a few years.

http://www.vireb.com/assets/images/pdf/07-jul_11_sales_summary.pdf

#41 Moneta on 08.16.11 at 11:21 pm

Wow – F and Carney in the same room?
—————

http://www.theglobeandmail.com/news/politics/bank-of-canada-governor-to-mps-economy-is-slowing-down/article2131363/

I could swear Flaherty’s hand is in Carney’s pocket!

#42 Sold in Richmond Hill on 08.16.11 at 11:21 pm

The wife and I sold our home for over 100k profit in about a year of owning it. We are going to rent and wait to see how the Real Estate market goes.

My question is: When will we know to buy again?

#43 April on 08.16.11 at 11:30 pm

CORY #27-Your kidding right? You can’t be so naive as to believe the Crea…………

#44 Tom from Mississauga on 08.16.11 at 11:31 pm

Interesting points tonight Garth, I saw on MLS some cities in BC are about to blow wide open. Vernon, Penticton, Nanaimo, Kelowna, Victoria. The guys from hockey Friday morning in Oakville are starting to piece together that there is a problem too. Isn’t this still an accumulate dividend paying stocks time though? With the Boomers cashing in stocks to buy cat food will the multiples on stocks come down?

#45 Victoria Tea Party on 08.16.11 at 11:32 pm

DOOMERS VINDICATED BY GARTH…

Sort of!

In recent months I have kvetched and whined more than once about the extent thereof of Canada’s economic future if our major trading partners are heading to the glue factory of economic Purgatory or worse.

Now I know.

Garth ALSO believes that 2006 was our “last good year.”

He’s right, of course, and in everything else he has inscribed on this date.

BTW, in Victoria, it is my contention that 2009 was OUR “last good year.” Then, real estate was booming, sidewalk cafes were reproducing like UVic’s sick bunny population, and that annoying “we are better than those depressed Yanks” attitude was still extant in our fair town.

Now, the worm is starting to turn. And turn some more it will as federal and provincial austerity measures, to be announced in about six months from now, finally stick a fork into this phoney, two-bit, so-called local economy.

THEN WHAT?

I dunno; but more Zombiefication seems a no-brainer outcome.

In a city of a stunning array of government money-seeking entitlement bunnies, of all ages and persuasions, this should be quite the little sideshow don’t you think? As your trusty reporter, I’ll keep you posted!

THOSE UPCOMING HEARINGS…SCAREY

As for the finance hearings on Friday in Ottawa, it was probably a good idea to NOT invite more than the central characters in this bun-toss.

Only one type of person will be watching, the Garthites, and others who already know what’s happening, but just need to have their worst fears realized by the hearing’s codefied details emanating from the mouths of our Betters.

FOR THIS PICKLE, WHO’S TO BLAME?

To recap: Canada is essentially back into a recession that will go on for years since ALL Western industrialised countries, in addition to their awful and unrepayable debts, have ALSO arrived at that demographic dead-zone where 1.0 per cent GDP per year will seem like economic Valhalla.

The blame ultimately goes to us, of course. Take a good look around at all the “things” the folks “own” and are still paying off to the bank; that dishevelled RV in the driveway, a wooden sundeck that needs a good scraping; another unnecesary Las Vegas trip.

The Middle Class has had the biscuit on this continent.

But there are OTHER candidates for that kind of “lifestyle”. Asia’s full of ’em; all of those unaffordable bells and whistles that WE can’t afford. But they can!

And that is why many Boomers, for example, are therefore against such licensiousness because we NOW believe in SUSTAINABILITY! Another Boomer trip!

Hey, today’s outing…ta da..is the food bank, Sweetie!

#46 Worried Realtor on 08.16.11 at 11:39 pm

Even the condos in downtown Toronto are starting to voice an opinion. Glass keeps crashing down every week. Listen to the condos, they speak
____________________________________________

The housing/condo crash in Toronto will be amazing to watch. The glass house of cards is starting to break apart. We all know it’s a house of cards but we realtors will profit on the way down. I’ve tried to be honest with people but they want to hear and believe what they want.

#47 Mike on 08.16.11 at 11:42 pm

The easiest job in the world and the most overpaid people on the planet. You got it.. REALTORs. True story. A neighbour of mine was trying to sell their two storey, ravine lot renovated 4 bedroom home. Basement apartment and new baths throughout. They went with a One Percent Broker who used the MLS and guess what.. the house, in spite of its quality did not sell. Why? Others down the street sold in days for way over asking in one case and slightly below in another. The difference is that both of those were listed under the traditional “cartel” rate of 6 percent sales commish. Seems that the cartel didn’t feel it was enough money to justify them taking their clients to see the low commission house. One realtor who sold a 50 plus year old bungalow just down the street in original condition for 8 percent over asking indicated that it wasn’t worth his time to show a house just to make 5 grand. Talk about spoiled brats . It is like the mob or a union mentality . They have had it so good for so long that they feel this is beneath them. What a joke. And you wonder why house prices are so high. Now sellers are being coerced into having to pay these high commissions because the crooks are keeping their clients away from these kinds of houses. Let’s not put the client’s needs first lets put the needs of the realtor first. What a classy bunch. With these clowns around don’t expect much of a downturn in prices . Prices hardly budged during the 2008 global near death experience so unless there is a monumental event to rival 2008 then I cannot see any real drop in price regardless of what a TD economist predicts.

#48 Bottoms_Up on 08.16.11 at 11:49 pm

#15 Jody on 08.16.11 at 10:13 pm
———————————–
Doctors don’t get pensions (unless they’re specifically employed in one of the federal government departments). Although they make a ton of money, they have to be prudent and save (and properly invest) a bunch of their earnings.

#49 waterloo Resident on 08.16.11 at 11:56 pm

“POWER OF SALE !”

I have not seen one of those signs in decades, but today in the town of Snowball (just North of Toronto), just about a block North of the ‘T- intersection light, there is a HUGE white sign, listing 35 acres of investment land ; Power of Sale.

If that’s happening now, then its true, the real estate market really is going down the toilet.

#50 Kevin in Winnipeg on 08.17.11 at 12:01 am

Talking to a Winnipeg Realtor this evening, he mentions he has not seen a CMHC application declined in 5 years. This week he has had 2. This could be a sign to come.

#51 Prairie Rose on 08.17.11 at 12:08 am

My husband and I are in the midst of an argument-we live in Saskatchewan, city folk, and I want to sell our home, rent, and live blissfully everafter. He believes that Saskatoon’s market is stable and can withstand a potential correction, please know that we have no debt and each are drawing from an indexed defined benefit pension. Is he right, yet again? Second question-is Saskatchewan a better bet as far as health care, potential assisted living compared to Alberta or BC?

You need to travel more. — Garth

#52 Victoria on 08.17.11 at 12:20 am

I know many small business people who are saying things are very bad but the media just won’t report on it. A couple will be closing their businesses or at least a second store. They have laid off staff etc. I have heard this in Whistler too. The media is reporting nothing.

#53 Patz on 08.17.11 at 12:22 am

Garth sez:
A contracting economy, quiet factories and flipped-out Americans mean fewer jobs, lower incomes and trouble for real estate. It doesn’t matter how cheap mortgages get, these realities will be with us for a long time. As the end-of-days people who hang around this blog constantly point out (sometimes they make sense) we’re not going back to 2006. Ever. The world will be a fine place for investors with money to spread and the wisdom to do so, but for most folks it’ll suck.

we’re not going back to 2006. Ever. Make that your mantra. I would only add that “suck[ing] for most folks” has consequences.

#54 Tim on 08.17.11 at 12:23 am

Do you expect the Harper Government to be democratic, transparent and accountable? lol! Most Canadians were stupid enough to vote for him, so now we have two stooges giving us their assessment of the economy yet not allowing any independent economists to attend

#55 Tim on 08.17.11 at 12:27 am

Re #20 I bet the windows are falling because they brought in sleazy developers and shoddy construction workers from Vancouver, you know, the boobs who built all of the leaky condos. They had windows fall out of a hi rise in Yaletown several years ago. Some of these workers have about as much training as a realtor lol

#56 Tim on 08.17.11 at 12:30 am

RE #23 you think the wet weather is bad for the health, how about freezing your ass off in minus 30 degree weather with two feet of snow? I’ll take rain any day

#57 Junius on 08.17.11 at 12:32 am

Re: Toronto,

Apparently my comments regarding Toronto struck a nerve with some on the past post. One person posted a chart where Toronto appeared once as World Class in the category “Most people born somewhere else.” Someone else thought I didn’t get it because Toronto was home to commodities stock exchange. However they didn’t explain how mining jobs in other places would keep Toronto going as “World Class.”

For those of you not keeping score I have been arguing since 2009 that the economy of my hometown Vancouver is on thin ice. It is not “World Class” in any way that it makes it immune from a world wide recession.

I will readily admit that Toronto has a lot more insulation than Vancouver does. No question. However the point is that no place in Canada (and yes, that includes you oil pumpers in Calgary and Edmonton) is immune from what is coming. No place in Canada is “World Class” in the sense that it is insulated from the inevitable.

#58 martin on 08.17.11 at 12:33 am

garth when are you gonna have a post about the US dollar as everyone says and brags that the US dollar is gonna be toilet paper. thanks

#59 Analyst Analyzer on 08.17.11 at 12:36 am

Why can’t this housing market fall off a cliff already???? I expect the CDN banks to get hurt by this too.

#60 Junius on 08.17.11 at 12:37 am

#30 bricklayer,

It is not so much about picking individual ETFs but using them to create a balanced portfolio. Most ETFs cover a product category like Oil and Gas or a certain type of bond. You want to use them to create a balanced portfolio. I have shares from 26 in my portfolio.

I like a number of ETFs but most of mine are from iShares, Claymore and Horizon. I also like Vanguard product.

#61 Nostradamus Le Mad Vlad on 08.17.11 at 12:38 am


“Don’t worry. Be happy. So screwed.” — Why is it, then, that sheeple still put little- to no-money down, taking out MM’s (monster mortgages), not seeing the forest for the trees and all the while Runnin’ Down A Dream which, no doubt, will end up in heartache for many young ‘uns?

They must learn from their own mistakes, of course, but why get suckered in to a lifetime of servitude, debt and being someone’s slave when there is no need for it? Did their parents (us boomers) not teach our children well? It is the second half of 2011, so it would appear the planet is getting its knickers in a twist.

“in June our factories were growing cobwebs, we shrunk faster than a stud in a cold pool.” — Similar to a horny “Honey I Shrunk The 2×4” stud?
*
Black Sabbath Heavy metal fans rejoice!
*
3:12 clip Fukushima radiation in Toronto; 8:03 clip Rick Perry in bed with China; Goggle Box a.k.a. the Boob Tube. Another good (health) reason to avoid it (except for soccer and hockey); US vs. China 1:20 clip of aircraft carriers; Harper Good reason why he wants more jails built; Eight min. clip 17 mln. Americans evacuated if another Fukushima happens here; Obama New views on election;

Economic End Times Everything runs its course; Global food prices getting higher; Germany Look out, EU, and this; GW fans Life sucks! Sarkozy Let them eat tax! Putin and the upcoming Eurasian Economic Union; Miami In a tizzy; Shadow Banking incl. charts; Pun Intended and lotsa other thingies.

#62 Vulture Fun on 08.17.11 at 12:46 am

One of the most annoying aspects of the Greater Vancouver RE scene is how people relist the same property multiple times, each time with the banner “NEW LISTING” displayed on MLS. These are not fresh listings, people. Here is my list of shame. Notice the general direction of prices.

3450 Bedwell Bay Road, Belcarra
V822746 – Aug 24, 2010 – $1,299,000
V876816 – Apr 2, 2011 – $1,279,000
V876816 – Aug 16, 2011 – $1,199,000

25171 112th Avenue, Maple Ridge
V795319 – June 29, 2010 – $1,990,000
V852020 – Sept 21, 2010 – $1,990,000
V905396 – Aug. 16, 2011 – $1,980,000

4248 Bedwell Bay Road, Belcarra
V835353 – Aug. 24, 2010 – $1,965,000
V863559 – Jan. 6, 2011 – $1,895,000
V903216 – Aug. 16, 2011 – $1,790,000

5808 167th St, Cloverdale
F1110471 – May 28, 2011 – $749,900
F1119986 – Aug. 16, 2011 – $738,800

1403 Crystal Creek, Anmore
V793488 – Mar. 14, 2010 – $1,798,000
V828315 – May 9, 2010 – $1,850,000
V841142 – June 4, 2010 – $1,925,000
V859904 – Mar 2, 2011 – $1,725,000
V904611 – Aug. 16, 2011 – $1,688,000

702 Alderside, Port Moody
V869111 – Feb 11, 2011 – $2,299,000
V898778 – Aug. 16, 2011 – $2,288,000

LT 1 4825 Blecarra Bay Road, Belcarra
V797467 – Aug. 24, 2010 – $1,590,000
V887432 – Aug. 16, 2011 – $1,480,000

3264 Bedwell Bay Road, Belcarra
V831712 – Aug. 24, 2010 – $1,500,000
V889667 – Aug. 16, 2011 – $1,350,000

1720 Deep Cove Road, Deep Cove
V837676 – Jun 25, 2010 – $799,000
V887373 – Aug 16, 2011 – $745,000

#63 Nemesis on 08.17.11 at 12:49 am

“Multiple bids in North Toronto and the west side of Van…” – Hon. GT

Well. I wouldn’t know about HogTown (far too long, more’s the pity – viz. are “Bamboo” & “ElRancho” still ‘going concerns’? Sigh.)… & now back to ‘biz’, as for the YVR VanWest ‘GoldStandard’ HamCandy SFH?

Over.

Well. There it is.

#64 Bottoms_Up on 08.17.11 at 12:53 am

I think it is high time the blog dogs discuss this:

‘Why has Canadian real estate done so well over the past 5 years (the time frame in which the US market collapsed)?’

Garth so often focusses on what he sees as the future of Canadian real estate, but looking back we have actual fact, and I think it would be cool to discuss the various theories. Was it simply interest rates (this didn’t help the US market)? Was it our commodities/economy? Bank regulation? CMHC? Herd mentality? Immigrant money? The media/CREA coaxing the lemming public into the so-called pyramid scheme? Scotia bank commercials? The Condo King? A mix of all of the above?

Although there is a lot of discussion about how Canada has their own subprime mortgages etc., I am of the camp that our banks were prudent, and that they only lent money to people that can pay it back. I think “no money down and cash back mortgage” advertising is something used to get people through the door, it’s another story to actually get the mortgage (i.e., why haven’t we heard of anybody on this blog that actually got a zero-down, cash-back mortgage, and/or didn’t have to prove income?)

I believe you are wrong. — Garth

#65 dd on 08.17.11 at 12:55 am

22Utopia

…I warned you all just ten days ago that the top in Real estate had been breached….

Wow. You are full of yourself.

So did you actually profit from this little bit of knowledge that you are parting with? Did you put your money where your mouth is and sell your house? Or is this another “should have investment?”

#66 Van MD on 08.17.11 at 12:59 am

[Toronto – 416 district, resale zone – price history]
mid-Apr/11 avg price $540,229
mid-May/11 avg price $543,787
mid-Jun/11 avg price $515,052
mid-Jul/11 avg price $481,200
mid-Aug/11 avg price $443,078
Compared to May 2011 peak, avg price has dropped $100,709 or -18.5%

mid-apr/11 avg SFH $772,721
mid-may/11 avg SFH $774,046
mid-jun/11 avg SFH $744,747
mid-jul/11 avg SFH $720,808
mid-aug/11 avg SFH $597,963
Compared to May 2011 peak, avg SFH price has dropped $176,083 or -22.7%

http://www.torontorealestateboard.com/market_news/release_market_updates/news.htm

#67 Junius on 08.17.11 at 1:18 am

Re: Corporatism masquerading as Liberty

Over the past few days there have been a number of debates on the topics of free markets and liberty. Great posing by Ed Harrison from Credit Write downs on this:

http://www.creditwritedowns.com/2011/02/corporatism-masquerading-as-liberty.html

#68 Bill Grable on 08.17.11 at 1:40 am

I was so fascinated by debt and it’s end use, I got my debt collector license. I have a glimpse at the avalanche coming and it is unbelievable how clueless people are. I did not take a job – just the license – the business is unbelievable.
Debt. This is not a jingle mail Country, for the most part – so a lot of people must be in a terrible vice.

Dropping asset. Food costs way up – pension? Savings? Job security?

The good old days will look it, sadly.

#69 American Werewolf on 08.17.11 at 1:40 am

There aren’t 218 homes in QB in that range. That listing there had houses from Nanoose bay, through Parksville, all the way up to Qualicum Bay (essentially the entire RDN). Thats a 30-40 minutes drive in a car and waay over 8K people

Though, the town in question is entirely overpriced–despite which, I see homes moving still which is absurd considering the price to wage ratio. Most often people buying are those who sell in overpriced markets elsewhere (which will be vulnerable soon, leaving QB’s paper mache economy in tatters).

#70 Ryan on 08.17.11 at 1:50 am

Helicopter Ben has been doing his work the past 4 weeks. The US money supply has been exploding lately. How is the Canadian dollar going to go down to a reasonable level when the US is devaluing theirs?

#71 Timing is Everything on 08.17.11 at 1:59 am

#23 Don said “I remember the plains first nations use to hunt Buffalo by chasing the herd off the cliffs.”

Holy crap…How old are you?

——————————————————-

Garth said “It doesn’t matter how cheap mortgages get, these realities will be with us for a long time.”

http://tinyurl.com/3rj57ck

#72 R on 08.17.11 at 2:45 am

Garth, question about bank preferreds..

Reading up on them it says they are generally suited to holding in a taxable portfolio because of the tax credit available.

Does this mean you would be better off not tucking them into a TFSA? For example, max out your TFSA, then look at them, or is it six of one and half a dozen of the other?

Ok that was three questions disguised as two.

Best held in a non-registered account. — Garth

#73 Not Fooled By Property Spruikers Hype on 08.17.11 at 2:54 am

Anyone interested in how we are travelling Down Under?

The previous decade witnessed a dramatic drop in Australian housing affordability.

In Australia the Median house prices more than doubled to $417,000 while median after-tax incomes only increased by 50 per cent to $57,000. Australia now has amongst the most expensive property in the developed world. This report shows that this decline in affordability is all pervasive through Australia’s states and territories and major cities and towns. Just 10 years ago, Australian housing was considered affordable. Australian housing is now severely unaffordable.If incomes continue to grow at the same rate as the past 10 years, it would take nearly 10 years of flat house prices for Australia to return to an affordable housing market.In 2001, more than half the suburbs in our five major capital cities were rated as affordable. Today, only four per cent are affordable. Not a single inner city suburb is affordable. The impact of affordability is most strongly felt by those attempting to get into the housing market via the purchase of a home, some being forced to do it via investment property. http://nfbpsh.blogspot.com/2011/08/great-australian-dream-just-dream.html

#74 Devore on 08.17.11 at 3:02 am

In Ottawa, opposition MPs forced hearings on the economy, in the light of recent stock market mayhem.

Since when is government responsible for stock market performance? Sounds like a whole bunch of noise and “doing something about it” to me.

#75 confused and a little crazed on 08.17.11 at 3:08 am

Well i confirm with the posters on global TV . Van couvers up 7 % from last year and projected to increase more moderately

It ‘s not much we can do about it Garth. You would be right if not for the emergency rates and $125 Billion CAn bailout

and here we are now …possibly zero % interest year after until who knows

they are not solving the problem thet;re just moving it to another mile down the future. this will increase volatility of too much debt. 10-15 year down the road people will have little savings/ RRSP b/c it will all go into the house

hopefully i can weather the storm buy stocks low and sell high…what else can i do i’m priced out around the peak 2008

#76 LAST on 08.17.11 at 3:48 am

Hey Garth thankfully not everyone is drinking the kool aid, had a friend move back to Canada and wanted to buy in Guelph, I sent him several of your articles, idea was to warm him not to make an emotional decision. Itnhelped as they passed on several units and saved about 10 grand, plus they had a 20% downpayment and a 25 year mortgage. Including condo fees the same as rent.

So yes a few are listening

#77 Off the River on 08.17.11 at 4:52 am

Sobering thoughts. I just can’t help but think that there is a good possibility things are really going to be screwed up!

America does not look good. England looks like a total mess and China is pretty volatile in my opinion. I’ve got some money sunk into a 6% interest account, my hous in NB paid for, and the bulk of my savings tied up in my rental lease (The Korean rental system is different from the West: $170 000 will get you a three bedroom apartment rent free).

I keep saving, but with all the volatility, I wonder if currencies are going to take a dive small plot of land with a bunch of vegetables is the safest way to ride out the storm.

I just would like to know how to keep my money frome dissapearing.

#78 timo on 08.17.11 at 5:05 am

lol! what a picture and great post garth.

to add: unless the helicopter begins dropping money again to try and re-inflate the system. Unfortunately it seems with the republican rhetoric now in tea-party mode Ben might have had the keys taken away. Yahoo, free markets!

http://1.bp.blogspot.com/-KfmgOaqyfII/TimeGKsq3GI/AAAAAAAAAEw/kQO41lqrew8/s1600/US+debt-GDP.jpg

Snowbird update: Arizona (be very careful!)

http://www.eastvalleytribune.com/money/article_ae0053a8-c53a-11e0-b00d-001cc4c03286.html?source=patrick.net

“It is very strange. Our inventory, the supply of homes, continues to decline every month,” Menefee said. “In a normal economy, if supply goes down you’d think prices would be going through the roof because there is just a substantial demand for homes. Pricing doesn’t seem to be moving like you’d expect.”

To get the housing market on track, a healthy job market is necessary. Stapp said the real estate market is tied to larger national issues like employment, while Menefee said it was necessary to have abundant work opportunities before we start to see homes appreciate at a rate of 3 to 5 percent a yea

#79 Imstupid on 08.17.11 at 6:07 am

Garth you know better than I do that people will believe anything that affirms their beliefs. TREB can say anything and house horney virgins will believe it. Sentiment can change in a heart beat too. When it does the opposite happens people won’t believe anything. That’s why when housing corrects and hits bottom people that were once Horney get turned off.

#80 Ex-Cowtown on 08.17.11 at 6:31 am

Starting to look at what University to send my son to. I told him that UBC is off limits, despite the fact that it is my alma mater and that I consider UBC a top rate school. Rent and cost of living in Van are so outrageous that there is no way he can afford to go there.

He may have to slum it a U of Alberta, Queens, or McGill.

#81 Aussie Roy on 08.17.11 at 6:49 am

Aussie Update

State govts will try anything to kick start the bubble, this in the largest mining state in Australia.

Sub prime anyone?.

WA’s Bankwest has launched a new home loan exclusively for the state’s first home buyers which will require only a three per cent deposit on the value of the property.

http://news.ninemsn.com.au/national/8286134/no-concern-over-low-deposit-loans-buswell

Inflation, deflation, stagflation, when is RE a hedge?.

http://www.youtube.com/watch?v=o0CD2fsc-gQ&feature=player_embedded

#82 Aussie Roy on 08.17.11 at 7:06 am

Aussie Update

Some common sense from Prof Keen and Krugman.

Ignoring the foreign component, or looking at the world as a whole, the overall level of debt makes no difference to aggregate net worth — one person’s liability is another person’s asset.

IS RUBBISH !

Krugman makes a very sensible observation about the importance of “the overall level of debt” that contradicts the assumption above he made in that paper. Observing that Texas’s allegedly better performance on employment growth is due mainly to “cheap labor”, Krugman comments that:

At a national level lower wages would almost certainly lead to fewer jobs — because they would leave working Americans even less able to cope with the overhang of debt left behind by the housing bubble, an overhang that is at the heart of our economic problem.

Bravo! The aggregate level of private debt does matter, and simplistic attempts to make businesses feel better by lowering their wage costs may actually reduce their revenue even more as already debt-depressed households see their disposable income above debt servicing and repayments shrink dramatically.

http://www.debtdeflation.com/blogs/2011/08/17/sense-from-krugman-on-private-debt/

#83 Neo on 08.17.11 at 7:07 am

Garth,

Here is why I continue to say it is different this time. Let’s go back to 1990. You remember it well. Japan’s housing bubble crashed and we had the Asian Crisis. The U.S. had a housing bubble pop and so did we. A nasty recession ensued. Bond vigilanties crossed the pond and attacked Canadian bonds and pushed yields up to 14% and interest rates were the same and our AAA was lost in 1993 I believe. What happened next was austerity in the Canada AND U.S. (Clinton) but not Japan. They decided to go the Keynesian route and fan the debt flames with bailouts and stimulus. Remember GW Bush’s famous words “No new taxes!” that he had to back away from. At any rate, we got a GST and a balance budget from Martin and dragged ourselves of the fiscal hole and a AAA and so did the U.S., less so with Bush, and more so with Clinton and then in both countries decided to do it all over again in the 2000’s credit bubbles that dwarfed anythign before it. Only this time, we are trying to suck and blow at the same time. We talk about austerity but we are in so much debt (mostly private in the Canada, mostly public in the U.S.) that ultimately we’ve decided to follow a Japan model from 20 years ago and keeps rates low indefinitely and continue with stimulus and deficits. The problem this time around is EVERY industrialized nation on earth is doing it at the same time. Not just Japan. Noone is being fiscally responsible. The malinvestment that has resulted isn’t just isolated in a discrete part of the world. It is choking off of the long term real growth and viability of the entire developed world. So the risks are exponentially greater and the coordinated Keynesian efforts of Central Banks will lead to a simultaneous implosion globally. That is what is playing out here in a slow train wreck fashion. We have no political leadership. No fiscal responsiblity from anyone. What we have is every major industrialized economy all going down in concert. All ISM’s are close to 50 or contraction. All GDP’s are approaching zero at the same time and we have a Japan which is the 3rd largest economy in the world still in the dumps from the 1990 situation that in 2011 the entire planet is caught in. The liquidity trap and deflation. Austerity is no longer an option. Keynesian policies and loose monetary policies are no longer an option. The only option is to flush all this bad debt that cannot be paid or serviced out of the system and find a free market or better still a competitive market equilibrium. The reset involves a nasty recession like the 1990’s. However, we are in a much more vulnerable position this time around because we’ve had to jobless recoveries the last two recessions, especially in the U.S. and we are just coming off of 2008 and are in a much more fragile state. That is why I think what is coming will be much worse than a garden variety recession. I know you disagree with me Garth. But like I said in previous posts. Recessions don’t last 4 years going on 5 and 6 and 7 years….There is another name for that escpecially when it becomes global.

#84 Promised Land on 08.17.11 at 7:15 am

I was gobsmacked by that conservative comment. The conservatives here are just as bad as the conservatives in the UK or republicans over the border…patronising, controlling and anti-democratic control freaks who have their noses so far embedded in big business’ behind that they cannot see anything else. Truly scary.

#85 Pr on 08.17.11 at 7:30 am

As a rule from now: Don t buy a house until the interest rate goes up a full 2%. It will give you from this rate, the real health of the housing market. You will see at that moment, if your still want to buy, when everybody want to…sell!

#86 Gella on 08.17.11 at 7:41 am

Regarding the drop in average price. I remember not too long ago, when the average price kept going up, there were lengthy justifications on this blog how unreliable the average price is as a realistic measure, how fewer sales overall and odd high end sales skew the average price etc. Of course now, when the average price went in the direction supporting the crashing RE point of view, all of the sudden it’s a valid argument and no mentioning of possible higher volumes of lower end sales that can similarly skew the average price curve. Hard to be objective, eh?

#87 Daystar on 08.17.11 at 7:49 am

“Yes, don’t worry your little bobble heads, your parlimentarians are working on your behalf, its all you really need to know. Its more important that you not worry now than it is for you to know the truth. This is why we have brought in slick bankers and expert liars to answer all of your thoughtful, though likely already misled questions.”

Are you all reassured? I’m reassured. Wow, am I relieved to know that I need not worry! Whew! What a load off! I have parlimentarians working just for me doing all the heavy lifting, so I need worry of nothing! I wil never forget this intimate moment of reassurance that gives me such peace and tranquility. Such a sacred trust, I just know my parlimentarians, especially my finance minister will not let me down. I am so deeply touched, I shall remember this shining moment by lighting with vigilance, by lighting a candle with each passing harvest moon commemorating our sacred trust enshrined for I am so deeply reassured.
(swoon) :)

#88 Moneta on 08.17.11 at 7:53 am

Since when is government responsible for stock market performance? Sounds like a whole bunch of noise and “doing something about it” to me
——-
Since it needs to fund billions in underfunded public pensions with more than 40% in equities.

#89 Mr. Lahey on 08.17.11 at 8:21 am

A watched bubble never bursts Randy.

#90 unbalanced on 08.17.11 at 8:27 am

To # 60 – Junuis. Not knocking you or anything, but could you explain why you have so many ETF’s. Just wondering. Thanks in advance.

#91 Echo on 08.17.11 at 8:39 am

Every bit of this is absolutely priceless, published today:

http://www.thestar.com/iphone/Business/article/1040425

#92 echo on 08.17.11 at 8:48 am

Here’s the desktop version of that article:

http://www.moneyville.ca/article/1040425–eager-buyers-keep-housing-market-hot?bn=1

#93 Steven Shaw on 08.17.11 at 8:53 am

Why wouldn’t the Canadian central bank keep interest rates on hold or lower them as they have in the US and the UK?

Low rates are meant to encourage borrowing, which is badly needed in the US. We have the opposite problem. Rates will rise here much sooner. — Garth

#94 Crazy on 08.17.11 at 8:54 am

Before you said the US was strong “don’t count them out”. Now, you say they are screwed, and so are we. Always guessing.

#95 T.O. Bubble Boy on 08.17.11 at 9:05 am

For anyone living in the Toronto area, here is the most insane stat from the August 1st-14th mid-month data:

Average Price
City of Toronto (“416”): $443,078
Rest of GTA (“905”): $438,404

Did the high-end of the “416” market just evaporate? How else can you explain average prices between the core and the burbs being essentially equal?

#96 Cato on 08.17.11 at 9:07 am

The big problem for Canada is our relationship with the US is changing in a big way and our gov’t is oblivious to it. The US is getting back to basics – to an economy of producers and not just consumers. This involves weakening the USD and repatriating jobs lost over last few decades – top of the list of countries to bleed is Canada. Its happening now and we need to prepare for it. Regardless what F. says or hopes for we aren’t going back to the good old days of producing goods america can produce for itself.

#97 Neil on 08.17.11 at 9:17 am

Time to buy the scuba gear, how many are underwater already. Another line from the TREB release. “However, it should be noted that new listings grew at a slightly greater pace than sales.” How big will the snowball get when the weather cools.

#98 panopticon singularity on 08.17.11 at 9:25 am

@#33 poco

i would be interested in seeing some of those waterloo listings as well.

#99 Aj on 08.17.11 at 9:40 am

#63 bottoms_up

I went in to rbc to renew my mortgage in the spring of 2011. Out of Curiosity  I asked how much the bank would give me if I decided to sell my current house drink some kool aid and buy the most expensive new house I could apparently “afford”. I have a very decent income only bc i work one full time job and two part time jobs. I work almost every day trying to save up so my wife and I can buy a farm. They would give me 600 000. If I ever got sick,injured or just did not want to work everyday for the next 30 years of my life I would not have any income from the 2nd or 3rd job. I would then have no hope of making payments on the 600. But hey what does rbc care bc it would be cmhc insured. The bank did check pay stubs to insure employment but with the part time income they mean f-all but I guess it showed there due diligence.

#100 GregW, Oakville on 08.17.11 at 10:04 am

Hi Garth, re: “Because nobody’s telling them.”
I’ve always thought of you as a somebody.
Thanks for telling.

#101 Kilby on 08.17.11 at 10:05 am

Interesting to note that in the 218 listings in the Qualicum area since Jan 31st (first on list) that only 10 have “sold” next to them. Parksville (3) Qualicum (6) Nanoose (1) Pretty dismal by any standards.

#102 Killer Chicken or Imploding Boomer? on 08.17.11 at 10:07 am

57 Junius – well I guess you can say no city is world-class as nowhere is immune.

#103 Smoking Man on 08.17.11 at 10:17 am

# 80 ExCowTown

Why waste a mind and your money….

Unless Jr is a naturally gifted memorize regurgitate machine, and hopes to make a living with a scalpel and a stethoscope (2011 and they still hang those useless interments around their neck, more for show than anything else) Why would you do that to your kids.

All the high paying jobs like engineers and architects or anything not related to local service will be offshore in the lowest labour market.

Send him to trading school, teach him how to buy and sell for in the future that is the only way to make real money….

To bad they don’t have the following courses at university

1)How to bribe a politician
2)The art of lying
3)How to destroy your competitors reputation
4)Low risk methods to cheat on taxes
5)Getting in with powerful lobby groups
6How to hire good people pay them nothing and still have them happy
7)Finding a good Gardner and pool person.
8)Proper methods for infidelity
9)Keeps assets safe form bad things you do.
10)F-M all and laugh all the way to the bank

Now thats a deploma

I could go on do you get the picture

#104 Aussie Roy on 08.17.11 at 10:26 am

Aussie Update

“Sales volumes have dropped 18-20 per cent, so there are far fewer people in the market to make complaints,”

Fewer complaints against RE agents.

http://www.adelaidenow.com.au/property/news/south-australian-real-estate-complaints-falling-but-reasons-arent-clear/story-e6frefgc-1226105550669

Baby Boomers are facing an enormous challenge. And the sad fact is that they are probably not even aware of the problem.

You see, if they haven’t sold their traditional inner-suburban homes before 2012 they need to be prepared to hold onto them until 2025, because there simply won’t be a market for that type of property before then.

http://www.propertyobserver.com.au/residential/baby-boomers-sell-now-or-forever-hold-your-family-home/2011081651189

#105 JON STEWART AND RON PAUL on 08.17.11 at 10:34 am

Funny clip of Jon Stewart scolding media for ignoring Ron Paul:

http://www.mediaite.com/tv/jon-stewart-scolds-media-for-ignoring-rep-ron-paul-i-mean-fck-that-guy-right/

Scroll down on page for video…it’s about 7 min. long.

If you know anything about American politics, this video will have you bustin’ guts.

Food for thought :)

#106 from kits on 08.17.11 at 10:40 am

Said F’s parliamentary secretary: “It’s imperative, in my opinion, that we not do anything that might worry Canadians. And I think that hearing from the Minister of Finance and the Bank of Canada will help to reassure them, as they should be, that there is concern, but that we are proceeding, as parliamentarians, in their interests.”

———————————————–

yes, everytime government speaks positive words I feel better. That’s the exact same mentality as a parent with their 3 yearold after they fell and banged their knee, the government really does think they are pretty smart. And there in lies the problem, we are the little 3 year olds and they believe they are the smart parents…

We should all spend a little less time reading blogs and more time trying to figure out how to pay less TAX!!! morons in Ottawa

More government intervention in the economy, more government, soon we’ll be communist! keep up the great work,

For anyone paying attention prov. and fed debt level has just gone over 1 trillion, keep it up fella’s. Keep screwing the kids…

#107 Daisy Mae on 08.17.11 at 10:47 am

not 1st on 08.16.11 at 10:45 pm

“I don’t think that Carney and F are as reckless as the U.S. is and wanting to inflate this bubble more. They wouldn’t have changed mortage rules a few times if they wanted that. ”

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

These fools should never have tampered with mortgage rates in the first place. And, yes, they’ve been reckless and stupid and arrogant and…..

#108 Living in AB on 08.17.11 at 10:48 am

F and Carney have to consider…. raising interest rates means a stronger loonie and lower exports. Or, leave as is (int rate) and create inflation.

Garth, if int rates remained unchanged and lets imagine that US buck gets stronger against our currency doesn’t that mean purchasing power will go down and leave fixed income peeps in a little trouble?

#109 Tkid on 08.17.11 at 10:53 am

http://www.canadianbusiness.com/article/33638–rental-complex

Found this in the Canadian Business magazine.

#110 The InvestorsFriend (Shawn Allen) on 08.17.11 at 10:59 am

END OF WORLD DELAYED AGAIN?

Stock markets up, panic subsided. Kill the plans to move to concrete bunker with canned food, guns and ammo?

Some people on this blog when the stock market was in deep panic about two weeks ago said they would buy stocks, but only after it fell it bit more.

So what are the stories, who sold out at the bottom. who bought?

I sold some before the plunge and then bought back, mostly too early, but did get some bargains. Still buying a bit here and there on down days. I am still down versus say 3 weeks ago, but recovering rapidly.

Remember the old idea still applies, buy low, sell high.

It’s not panic and sell when it’s low…

#111 Utopia on 08.17.11 at 11:00 am

#65 dd on 08.17.11

“Wow. You are full of yourself.

So did you actually profit from this little bit of knowledge that you are parting with? Did you put your money where your mouth is and sell your house?”
———————————————–

Yes, I am full of myself. You got me there DD.

But that is simply an expression of confidence in my beliefs showing. I have been proven correct in my assessments. It was a year back that I stated a steep market sell-off would precipitate our housing bust.

Well that time has come.

With the TSX dropping as it did in conjunction with the DOW and many other exchanges, sales of homes and prices have begun to fall. It is not over either as a further sell-off is in the offing and that can only result in a further escalation of falling prices. We will all see it within the next 30, 60 and 90 days.

Sadly, few were paying attention. And this is where they are really going to get cornered. As prices fall then vendors rush to market to sell before it is too late. Supply overwhelms demand and pressures prices lower yet. I believe many will be alarmed when they see how quickly it can all fall apart.

Speculators too know a cooked goose when they see one but many overplayed their hands. The Toronto condo market seems especially vulnerable now. These guys just waited too long to bail out. Now they may be stuck too if they don’t drop prices.

That is exactly what is happening now and it’s effect will be to pull the rug out from under private home-owners who’s equity will wilt as price reductions lower neighborhood values across the board.

And my house, DD? It was paid off in full long ago. The correct strategy all along has been to eliminate debt, save and not to take on massive new long term obligations like mortgages.

Few were willing to listen to that advice though despite the fact that solid evidence proved this developing housing correction has been coming for more than two years now.

Our friend Garth was leading the charge long before that even so todays news that major price drops in Toronto have finally materialized should not be too big a surprise anymore.

My earlier comments incidentally were directed at the Realtors and other R/E correction doubters and deniers who frequent this site, not the chorus who live here full-time and already know how this will play out.

Not sure which category you fall in DD but I will wager that like most people in this country you are up to your eyebrows in debt, have multiple credit cards, a fat mortgage at low rates and car payments to top it all off. Perhaps even a student loan like many in your age group.

Did you take the advice in time?

#112 Mister Obvious on 08.17.11 at 11:11 am

#103 Smoking Man

“Now thats a deploma”

Speaks volumes.

#113 Steady Eddie on 08.17.11 at 11:12 am

Given 75% of exports are to the USA and the possibility of that country facing a currency, there is the chance export lobbyists will get the CAD pegged or cheaper than the USD. It’s kind of like being the tugboat attached to the Titanic.

#114 Steady Eddie on 08.17.11 at 11:12 am

Given 75% of exports are to the USA and the possibility of that country facing a currency crisis, there is the chance export lobbyists will get the CAD pegged or cheaper than the USD. It’s kind of like being the tugboat attached to the Titanic.

#115 Junius on 08.17.11 at 11:19 am

#64 Bottoms_Up,

You said, “I am of the camp that our banks were prudent, and that they only lent money to people that can pay it back.”

Oh Good Grief! Please. The banks have been secured by the CMHC. If they didn’t have the CMHC they wouldn’t have made the loans. They made off like Bandits.

The only fundamental difference between Canada and the rest of the world – US, UK, Ireland, Spain, Australia, etc. is timing.

Historically the Canadian market tracks the US by about 3 years. They US market began its fall in 2006. Canada was falling in 2008 when the Feds slashed interest rates. They had already relaxed the CMHC rules and left us for a period with 0 down, 40 year amort mortgages.

The Cons used the housing market to propel the Canadian economy through the past few years. The spending and wealth effect generated by it was what has kept us afloat and why it has been “different here.” However the fundamental answer is the same as everywhere – debt, debt and more debt.

Now we have a 70% home ownership rate and household debt levels nearing 150% on income – BOTH the highest ever. Now the wealth effect high is running out and we see asset prices set to fall in many regions. Gradually we will unwind as well.

Good luck with your Canadian Miracle.

#116 Junius on 08.17.11 at 11:26 am

#102 Killer Chicken,

You said, “well I guess you can say no city is world-class as nowhere is immune.”

I would reverse it and say that World Class economic cities are more resilient. It is also not so much about size but having an industrial base that will still be in demand on a global basis.

Look at a city like Munich. Two companies dominate the local economy – BMW and Siemans. These are both World Class companies and if they maintain good earnings Munich does well regardless of how other regions of Germany do.

Toronto has a strong regional base with so many Canadian head offices and financial services employees. However if Canada suffers so does Toronto. Very little is independent of Canada.

If only RIM were doing better!

#117 Junius on 08.17.11 at 11:32 am

#90 unbalanced,

Why do I have so many? Diversity.

6 are bonds, 3 are currency, 2 are PM, 4 are Canadian equity, 2 are Canadian market sectors, 3 are US equity, 2 are US market sectors, 4 are Emerging Market.

#118 Junius on 08.17.11 at 11:35 am

#82 Aussie Roy,

Steve Keen is an Australian national treasure. His insights constantly rank amongst the most clear headed anywhere.

#119 poco on 08.17.11 at 11:45 am

#22 Utopia

I warned you all just ten days ago that the top in Real estate had been breached. I told you it was over. Few listened to me. None commented. Now you will see that I was right.
Crying will not help.
______________________________________________

please, don’t get so full of yourself—many of us have been posting for a long while that the top of the market in many areas had come and gone —obviously you weren’t reading all the posts or didn’t believe the “unofficial word” of the bloggers of what we saw in our own markets—remember real estate is local

don’t get upset that no one commented on your “revelation”—we already knew the market had turned many months ago

#120 RL on 08.17.11 at 11:48 am

Hmmm…
Public Inquiry into the RE Cartel in, say, 5 years time… To find out how things went so terribly wrong for Canadians.

#121 Smoking Man on 08.17.11 at 11:59 am

Aussie Roy said

Baby Boomers are facing an enormous challenge. And the sad fact is that they are probably not even aware of the problem.
………………………………………………………..
O we are aware, my mola is going offshore, then it’s Generation x & y ‘s problem….

You will be paying for me to slap the nurses behinds at the nursing home. heheheh

#122 Snowboid on 08.17.11 at 12:18 pm

#78 timo…

I think your snowbird update “(be very careful)” generally applies to anyone buying real estate, anywhere in the world.

At least in Arizona there is twice as much real-estate information available on-line than in Canada. You can do much of the research from here, including tax implications (withholding on sale, substantial presence, etc).

The Maricopa County tax assessor and treasurer offer a wealth of knowledge about properties we can only dream about up here.

Head down and check it out yourself – early February 2012 and you can even ‘mingle’ with the thousands of other Canadians at the 59th annual Canadian week picnic on Feb 4th at South Mountain Park:

http://www.canadianpicnic.com/Home.html

You may notice some of their statistics about Canadians in Arizona:

59,000 fulltime residents
500,000 winter visitors

The article you linked to may be right, however, that we paid a bit too much buying last December – but given that we spent less cash (SFH with a large corner lot in a good area) than if we had purchased a mobile home on a leased lot here – we aren’t too worried.

If we had borrowed (with 20% down and 25 year mortgage) at current rates our payment would have been about $ 500 a month!!!

#123 Bottoms_Up on 08.17.11 at 12:19 pm

#80 Ex-Cowtown on 08.17.11 at 6:31 am
—————————————–
Don’t rule out McMaster, you can pick your kid up a nice SFH for ~$150,000 and have the mortgage paid by renting out the rooms to other students. Just have to convince the students to live just east of downtown (20 minute commute).

#124 Bottoms_Up on 08.17.11 at 12:21 pm

#99 Aj on 08.17.11 at 9:40 am
————————————
I think that’s just the thing — in the US, they gave money to people who couldn’t pay.

In Canada, they give money to people who currently can pay.

Whether or not they can pay in the future is yet to be seen.

#125 deaconmoss on 08.17.11 at 12:34 pm

Been ready for years for the coming blowout, but now older and not much wiser, but for Garth, I too would have been under way more debt than I am now. Love the blog, not necessarily the message, but you make it real. Keep on keeping on Garth.

#126 Ryan on 08.17.11 at 12:53 pm

# 23 DON
I remember the plains first nations use to hunt Buffalo by chasing the herd off the cliffs

How old are you anyways Don?

#127 Smoking Man on 08.17.11 at 12:58 pm

112 Mister Obvious on 08.17.11 at 11:11 am
looks like you fell into a faux hole

inside joke with me an gartho

#128 Smoking Man on 08.17.11 at 1:03 pm

Soft bat man head on gold, but get ready gold boys the falls are a getting close

#129 Volume on 08.17.11 at 1:06 pm

Look at the volume before last market “dip”
you’re buying this dip?
you’re going to get smoked

#130 timo on 08.17.11 at 1:17 pm

http://www.winnipegfreepress.com/canada/breakingnews/mayors-gift-to-ex-wife-a-20-ton-boulder-on-her-lawn-wrapped-in-ribbon–note.html

real estate is always a rock solid investment.

#131 GOLDMAN SACHS: THE EMPLOYER OF MARK CARNEY on 08.17.11 at 1:21 pm

By the way, nice blog Garth!

This, I feel, is all we need to know about Canada’s financial situation:

Mark Carney, the Bank of Canada’s head dude, worked in high-level (mostly international) managerial positions for GOLDMAN SACHS for 13 years prior to “engaging” the Canadian public service.

He is also a product of the Harvard/Oxford “program”.

Lest we forget: Goldman helped Greece hide its true debt level from its own citizens, in part, leading to its eventual financial meltdown.

Essentially, Goldman lied and helped obscure billions and billions in Greek debt–hurting not only the Greek people, but the rest of Europe as well.

Here’s a NYT link, partly explaining the situation:

http://www.nytimes.com/2010/02/14/business/global/14debt.html?pagewanted=all

How can we trust this guy to do what’s best for our country, when he himself was knee-deep in Goldman s*&t for 13 years?

Garth is right: ” So screwed.”

Food for thought :)

Unlike most people on this blog, I had an opportunity of interviewing Mr. Carney (as a member of the House of Commons Finance Committee) prior to him commencing his current job. I have infinitely more confidence in him than I do in F. — Garth

#132 BrianT on 08.17.11 at 1:25 pm

Toronto Life this month has a cover story about families getting out of TO-an interesting stat quoted is that for every person moving into TO from another Canadian city, 3.5 persons are moving out. The article concludes the livability just ain’t there anymore.

#133 Aussie Roy on 08.17.11 at 1:39 pm

Smoking Man on 08.17.11 at 11:59 am

Not even close son, I’m in my 70s. Retired a few years ago currently managing our family vineyard, active and enjoying life. Don’t feel much different than in my 50s so I’m fortunate. You can have the nursing home all to yourself, I have a caring, close, respectful family.
Slapping some nurse, just doesnt have the same appeal as my family does as I get older, but hey, we are all different.

Aussie Roy said

Baby Boomers are facing an enormous challenge. And the sad fact is that they are probably not even aware of the problem.
………………………………………………………..
O we are aware, my mola is going offshore, then it’s Generation x & y ‘s problem….

You will be paying for me to slap the nurses behinds at the nursing home. heheheh

#134 bricklayer on 08.17.11 at 1:40 pm

60 Junius on 08.17.11 at 12:37 am

thanks for taking the time to reply.

#135 timo on 08.17.11 at 1:43 pm

#121 Snowboid,

I am very happy for you wish you well on your investment. You did not mention that the market is still not recovering due to huge job losses which help sustain home prices. Good luck with your investment and enjoy the climate.

http://www.bizjournals.com/phoenix/news/2011/07/25/arizona-among-worst-job-creators-in.html

http://abcnews.go.com/Business/housing-prices-double-dip-downward-spiral/story?id=13723919

#136 wetcoaster on 08.17.11 at 1:47 pm

Conflicting media reports means the top is in, look out below.

CBC Vancouver pumps out segment with agent saying “multiple offers” & buyers saying “it’s Kits, we’re insulated”, blah blah, with no so called independent financial expert.

15 minutes later on Global National a negative realist segment with falling sales and the words displayed : “TD says real estate “ripe for a correction”. Not a pumping agent anywhere in sight either.

Looks to me like this puppy is baked.

#137 timo on 08.17.11 at 1:48 pm

Great read if you want to buy down south…

http://foreveryoungnews.com/posts/1361-snowbird-real-estate-trends-to-watch

#138 dddd on 08.17.11 at 1:51 pm

a q for the smoking man…

any thoughts on if i should hold the 2x inverse sp500 (hsd)
i picked up late fri?
ie – do we have more downside to go?
dow down 200 from this morning highs – are your spidey senses tinglinging yet?

#139 NorthOf49 on 08.17.11 at 1:55 pm

#80 Ex-Cowtown on 08.17.11 at 6:31 am
—————————————–
Yes, as Bottoms_Up #122 mentions, you can put McMaster on your list. Rents are low, cost of living is low but I absolutely advise against buying in Hamilton to become a landlord to students. Been there done that 20 years ago, and now the environment is much worse. New student residences have increased supply and a city bylaw crackdown on illegal slum housing has forced many landlords to sell up and get out of the game. You may also want to consider U of Western in London, ON. My step-daughter attends Fanshawe there and her rent actually decreased this year below $600/mth for a one-bedroom apartment.

#140 poco on 08.17.11 at 1:55 pm

#98 panopticon singularity
i would be interested in seeing some of those waterloo listings as well.
______________________________________________
sorry, i was referring to listings in the tri cities area in BC

#141 Devore on 08.17.11 at 1:59 pm

#88 Moneta

Since when is government responsible for stock market performance?

Since it needs to fund billions in underfunded public pensions with more than 40% in equities.

Is that a non-sequitur? I could repeat the question, but I suspect the answer wouldn’t change. Are the hearings going to be about public pensions? What do they expect to be able to do anyways? I suppose our own version of QE to pump some money into the markets. I’d be curious to know what the purpose of the hearings is, and what is the expected outcome. Presumably, you only hold hearings into something you can control, otherwise it’s just going to be a bunch of hot air, hand-wringing and grandstanding.

#142 Devore on 08.17.11 at 2:02 pm

#123 Bottoms_Up

I think that’s just the thing — in the US, they gave money to people who couldn’t pay.

That’s revisionist. In hindsight, they couldn’t pay. But at the time they were give the loans, they could pay just fine, that’s why they were given money. Whether or not they could pay in the future is now seen.

#143 MM on 08.17.11 at 2:32 pm

#80 Ex-Cowtown – getting by with little money is part of what you learn as a student. As is making your own decisions/mistakes.

#144 Mr. Reality on 08.17.11 at 3:05 pm

#22 Utopia on 08.16.11 at 10:37 pm
I warned you all just ten days ago that the top in Real estate had been breached. I told you it was over. Few listened to me. None commented. Now you will see that I was right.

Crying will not help.

I’m with you Utopia. This doomer told you to short the markets at the top in April/May. You would be in the money but should stil be holding on, you aint seen nothing yet.

Mr. R.

After your comment of 2011/08/15 you are no longer welcome on this blog. — Garth

#145 Aussie Roy on 08.17.11 at 3:06 pm

Junius on 08.17.11 at 11:35 am #82 Aussie Roy,

Steve Keen is an Australian national treasure. His insights constantly rank amongst the most clear headed anywhere.

Yes, I think so to, I’m a big fan.

http://www.debtdeflation.com/blogs/

Pity is, that he gets about as much coverage here on MSM as Ron Paul does in the US.

I spent my working life as a currency and Ag commodity price risk manager, more or less using Beniot Mandelbrots 1960s cotton market price theory. Keens brand of economics is the only one that can explain and support Mandelbrots pricing technique and the simple concept that markets are not always in equilibrum.

In other words there are times to buy and times to sell. It’s almost impossible to predict when a market will crash but some very simple math can tell you whether prices are over or under their true supported value. Both our housing markets IMO are cooked. When and at what speed prices start to correct is anyones guess but glad I cashed out most of my RE in 2009.

#146 Snowboid on 08.17.11 at 3:07 pm

#135 timo…

Who said anything about the purchase being an investment?

If we break even after ten years we will be happy, it still will be 60 months of bliss in the winter sun!!

If I believed every article written on the subject I would be busy digging the hole for a bunker right now.

Hey, I’m reasonable – come down and see for yourself, it doesn’t cost that much to visit!

I will introduce you to the dozens of other Canadians within walking distance of our home.

And even take you to the picnic…

#147 Don on 08.17.11 at 3:14 pm

Timing is Everything.

I should have clarified that I read about the Plains Indians herding Buffalo off the cliffs in a history book – I read history and tend to learn from the similarities. Remember wisdom does not necessarily come with age – I am old enough to be patient and wait for the real estate fall out before I make my move.

American Warewolf – Take a drive through Qualicum and especially up to Tempo store in little qualicum bay – for sale signs everywhere – some even private sales. MLS is a bad source for exact numbers – as properities come off and on the market due to realtor manipulation.

#148 Smoking Man on 08.17.11 at 3:27 pm

#138 DDDD
I’m thinking for the next little while you can be Long or Short and in the money once or twice a week.

I went long on div paying Banks and energy right at the bottom last week. Holding those

But best bet now no over night, just momentum trade, jump on train, ride and jump off when trend changes.

I use combo of renko charts, and candle sticks.

Got a week signal about shorting gold, no action yet, need another sign

#149 dd on 08.17.11 at 3:30 pm

Some price increases since August 2010 (US):

•Unleaded gas prices are up 45%.
•Heating oil prices are up 46%.
•Corn prices are up 71%.
•Soybean prices are up 26%.
•Rice prices are up 13%.
•Pork prices are up 31%.
•Beef prices are up 25%.
•Coffee prices are up 38%.
•Sugar prices are up 48%.
•Cotton prices are up 13%.
•Gold prices are up 42%.
•Silver prices are up 115%.
•Copper prices are up 23%.

Wow. That 5% div is looking not so good.

Does your gold send you a monthly cheque yet, and provide a healthy dividend tax credit? Say, I notice Eric Sprott is bailing out of gold. — Garth

#150 JohnnyBravo on 08.17.11 at 3:32 pm

As I mentioned in an earlier comment, the Fed’s FOMC, headed by Chairsatan Bernanke (a very rare example of an evil beard), has basically thrown in the towel on the US consumer/economy.

I also mentioned a concept called Jaguar Inflation, whereby debt levels reach a point where no matter how cheap credit becomes people just won’t take any more.

Today we get this from David Rosenberg: “In a vivid sign that housing is no longer responsive to interest rates; mortgage applications for new purchases cratered 10.1% in the August 12th week. They have declined now for three of the past four weeks and are at the lowest level since July 2010.”

This pertains to the US, where it may be no surprise. Certainly Bernanke is not surprised. But just as most innovations come to Canada via the US, I think we can also feel confident that at some point Canada will embrace Jaguar Inflation. With more and more observers calling a recession (like now), perhaps we are very close.

Property virgins be prepared.

#151 Moneta on 08.17.11 at 3:38 pm

Devore on 08.17.11 at 1:59 pm
#88 Moneta
—-
I assumed your question was rhetorical so I added some sarcasm. LOL!

Frankly, I’m not too sure what to expect these days.

Logic tells me that they will do everything to keep the market propped up but then looking at how committed they are to austerity, my tin foil hat goes on and I start to wonder if a tanking market wouldn’t give them the perfect reason and opportunity to cut pensions and other entitlements.

#152 MasterBootLicker on 08.17.11 at 3:54 pm

121 Smoking Man-“You will be paying for me to slap the nurses behinds at the nursing home. heheheh”

Guess again. If you go into a nursing home, you will be denied critical treatment and slowly euthanized along with the rest of the “useless eaters”. Thats not me saying that, its the globalists in power like John P Holdren, Obamas health Zar that is saying it. He wrote books on the subject. Thats our socialized aka rationed health care system we will have in the near future. So when you bend over in the near future for that daily enema , make sure its a suppository they are placing up there and not a gun barrel ha.

#153 Kitchener1 on 08.17.11 at 4:02 pm

#132 Brian T

Not everyone in Toronto can afford to buy there or are willing to take on huge debt load. The average household income is in the 80-90k range if i remeber correctly.

Thats not all that good when you figure its per household, basically one person making 50-60k and another 20-30k. Not a whole lot to raise a family on in Toronto.

The other issue is long term job. By now, everyone in every city either knows directly or through friends/family someone that either

a. has lost a job and found work for substanially less
b. has not found any work at all
c. has had to do work in an entire different field to make ends meet, for a lot less
d. someone who has put off retirement and is working past 65, sometimes into their 70’s.

People will always say, whew, glad that was’nt me, but then it starts happening at their workplace, or to their neighbours or even family, friends, friends of friends etc..

It really makes you wonder weither or not you want to sign on the dotted line for 25-30 year mortgage.

Even those that in 08 had jobs that looked to be 100% secure and untouchable- govt jobs, you know, the people that work for the city or Ontario or Federals govt etc.., well even those jobs are looking unstable.

City of toronto looking to layoff who knows how many
Ontario laying of 2000 employees by May 2012
BC hydro cutting 300-1000 jobs
Federal govt just getting started – Atomic eneergy 900 jobs gone, enviroment canada 700 jobs etc..

#154 Bottoms_Up on 08.17.11 at 4:05 pm

#142 Devore on 08.17.11 at 2:02 pm
—————————————-
Are you saying the banks in the US verified income for all mortgages they gave out? Are you saying the banks knew the people could pay in the future once their ARM interest rates reset?

#155 Smoking Man on 08.17.11 at 4:09 pm

DDDD you got me thinking

A relatively safe bet with huge upside potential right now is equal notional Short Gold and Long Silver. Silver has some catching up to do, but the way my cyrisatl ball sees it if bulls rule the metals then Silver will run up faster than gold, If the bears take over then Gold will drop way faster than silver.

If they diverge even more you are looking at a small loss

This is call is a no brainier….

#156 Bottoms_Up on 08.17.11 at 4:15 pm

#115 Junius on 08.17.11 at 11:19 am
——————————————
CMHC doesn’t change the fact that the Canadian banks verified income and lent money to people that could afford to pay it back.

#157 Smoking Man on 08.17.11 at 4:18 pm

Garth said

Does your gold send you a monthly cheque yet, and provide a healthy dividend tax credit? Say, I notice Eric Sprott is bailing out of gold. — Garth

Just read the story…..I’m I Pyscic or what

Read my last post

#158 clem on 08.17.11 at 4:19 pm

#147 Smoking Man on 08.17.11 at 3:27 pm

Got a week signal about shorting gold, no action yet, need another sign
.
The gig is up!!!!! Smoking Man is Eric Sprott!

#159 arctodus on 08.17.11 at 5:26 pm

http://www.theoildrum.com/node/8268#more

There is NO chance of recovery economically speaking ever….

Once you understand true fundamentals (which any grade schooler can understand)…then you realize that house prices are such a small sliver of the problem.

This depression that Canada is now into will NEVER end. But heaven forbid you mention such because you might get called a “doomer”.

We are a population of airheads ruled by lunatics.

World made by Hand coming one way or the other.

#160 timo on 08.17.11 at 5:29 pm

http://financialfollies.blogspot.com/2011/01/on-australians-buying-us-property.html

“It’s no secret: USA property investment gives you a 10-20% net return… Even after your expenses are paid you will still make money with My USA Property”
“Once American banks start lending again, the USA market will recover. So you’d be wise to invest in an undervalued market now since every Australian dollar buys more” (My USA Property)
“When you say “Go!” you set the wheels in motion for an exhilarating ride as your property grows in value giving you the possibility to create enough cash to fund the rest of your life in a few short years. Call us now!” (888 USA Real Estate)

Now, before you leave to throw up, I’d like to note that the statements above would be illegal if these guys were stockbrokers. But apparently in property land it’s OK to promise fantastical rates of return without pointing out any of the risks involved in the investment strategy. Speaking of the risks, we’ll get to that later”

:)

I just love living in a casino.

#161 Hoof-Hearted on 08.17.11 at 5:32 pm

Qualicum ehhhhhh.

” Inheritance on non Primary residences/property ”

A couple of years ago,I was chatting with a person whose widowed mother-in law had died and how the estate was being settled .

He rolled his eyes.

The estate comprised of ( 5 ) waterfront lots near Qualicum.

They had been bought by the widow’s father back in the 1940′s aka relatively cheap.

The mother had established a primary residence on one lot. She gave a lot to each of her (3) children. There was an extra lot.

My understanding is upon death, the property is deemed as “sold”, and the taxman wants his cut.

The primary residence would be exempt.
However, the bare 4 th lot was to have taxes paid on it.
If this 4 th lot was sold, it would have covered all the “estate” taxes.

However, one son said no way….this lot will always be valuable, we have to keep it, at least in the short term.

The others, too timid to argue, basically agreed and had to come up with approx. $ 300,000 to pay the taxes. They were able to establish a line of credit using the primary residence as collateral.

I strongly suspect the value of that lot has decreased since then…and I always thought that was a dumb move, as it often leads to more complex messes later on.

#162 Junius on 08.17.11 at 5:58 pm

#156 Bottom’s_Up,

You said, “CMHC doesn’t change the fact that the Canadian banks verified income and lent money to people that could afford to pay it back.”

You are kidding, right? You can’t be serious.

#163 brainsail on 08.17.11 at 6:09 pm

64 Bottoms_Up

‘Why has Canadian real estate done so well over the past 5 years (the time frame in which the US market collapsed)?’

“Unemployment” is the one word answer. This is something that Canada hasn’t felt yet. There are so many jobs connected to housing, real jobs or underground jobs, that will be affected if there is any slow down in the economy. Study the next Canadian employment numbers and you will will notice a very strong trend towards partime jobs vs. full time.

#164 Dorothy on 08.17.11 at 6:19 pm

Knowing that our Parliamentarians don’t want us to hear bad news because it might cause us to worry, is making me worry. Because the news they dont want us to hear must be really, really bad if they think it might start a panic.

It’s not simply hearing bad news that causes people to behave in such a way that it becomes a self fulfilling prophecy, it’s being told that the news is SO bad it’s best to keep it under wraps!

#165 Junius on 08.17.11 at 6:38 pm

#156 Bottom’s_Up,

It appears you are not kidding.

What has happened in Canada as in the US and other countries is that people took the largest loans possible so they could leverage up in the market. Many fudged their numbers to the max. Lots of lenders help them get the most money possible. If you don’t think Canadian lenders were pushing mortgages through as fast as they could you are naive. All is rosy at the time of the loan as life is great and Real Estate always goes up!

When the economy slows and interest rates go up they could find themselves in negative equity. It may not be for several years that we see a significant amount of negative equity in Canada but it is coming.

Let’s put it this way, if it wasn’t for the CMHC the banks would not have made many of the loans they did. They are not that stupid. However our gov’t clearly is.

#166 Victoria on 08.17.11 at 6:38 pm

I have young children and I don’t want them to worry ie. money troubles, daddy might have diabetes, granny needs tests. They are young and don’t need to worry about things at their age.

The government looks at us as children.

#167 Devore on 08.17.11 at 6:42 pm

#151 Moneta

I guess not much comes across in text unless you get downright snarky, and then it’s just rude.

It wasn’t entirely rhetorical, I mean what are they really holding hearings into? Sound and fury signifying nothing? But it might be prelude to restructuring some obligations because of “current market climate”, that’s code for “bend over”.

#168 Mr Buyer on 08.17.11 at 6:51 pm

Just noticed this rosie forcast posted on Yahoo news…
http://ca.finance.yahoo.com/news/Real-estate-buyers-focus-low-capress-322648189.html?x=0

#169 Devore on 08.17.11 at 6:52 pm

#154 Bottoms_Up

Are you saying the banks in the US verified income for all mortgages they gave out? Are you saying the banks knew the people could pay in the future once their ARM interest rates reset?

They verified income as much as Canadian banks verify income on CMHC mortgages. The logic in the US was that borrowers could sell to cover their loan, or refinance and continue paying it. It’s not rocket science that if your rate resets and your mortgage payment doubles or more, that people will not be able to make payments, and no one expected to, hence the loans were made.

Sorry, but I cannot agree with the view that Canadian banks are somehow head and shoulders above US banks on lending standards. Rapidly rising foreclosure rates on fancy properties and toys in Alberta, while interest rates are DECLINING, tells me Canadian banks did not do a whole lot of due diligence on those borrowers.

Tip of the iceberg.

Vast majority of US mortgages were made to people who are perfectly capable of servicing them. It doesn’t take very much to create a mess when you have to many borrowers leveraging 20:1, regardless of how careful you are.

#170 Math is Fun on 08.17.11 at 6:55 pm

Just drove by a flailing Condo dev in Burnaby – BIG NEW SIGN “5% Down” Lol.

Negative equity looks so sexy in a glossy brochure.

#171 brainsail on 08.17.11 at 6:59 pm

#162 Junius on 08.17.11 at 5:58 pm

You said, “CMHC doesn’t change the fact that the Canadian banks verified income and lent money to people that could afford to pay it back.”

Should be changed to ” …and lent money to people who really didn’t need it.”

Where are banks going next? How about “home lease programs?” To a world were you never actually own anything?

#172 Devore on 08.17.11 at 6:59 pm

Say, I notice Eric Sprott is bailing out of gold. — Garth

As the story clearly says, he’s selling to capture the ludicrous premium (20%+) on his metals funds (both silver and gold) with intention to re-invest. In other words, buy low, sell high.

Compare to the popular metals fund denominated in CDN (CEF) which has been trading pretty tight to its NAV for the last month at least. Because, like the Sprott funds, CEF has a fixed number of units, I’ve been using the same strategy to enter and exit it. Buy when it’s at a discount, sell when premium is high.

#173 Habbit on 08.17.11 at 7:11 pm

How are realtors compensated? My understanding is MLS commissions are split 50/50 between the listing company and the selling company. The listing realtor then receives half of the 50% as does the selling agent giving each agent 25% of the gross commission. If the agent lists and sells the same property they would then receive 50% of the entire commission. Comments

#174 shanks on 08.17.11 at 7:20 pm

Smoking man, i think you should open a school of your own!

#175 maxx on 08.17.11 at 7:26 pm

#52 Victoria on 08.17.11 at 12:20 am

“The media are reporting nothing”. Bullseye. Nothing of any relevance, at any rate.We haven’t bought a Canadian paper for years. Complete waste of money. We get the Saturday Guardian (UK). The writing quality is delicious and the reporting far exceeds anything in this country.

#176 Bottoms_Up on 08.17.11 at 7:40 pm

#173 Habbit on 08.17.11 at 7:11 pm
————————————-
True as verified by my remax agent.

#177 Bottoms_Up on 08.17.11 at 7:50 pm

#165 Junius on 08.17.11 at 6:38 pm
—————————————–
Nope. Not naive. I was turned down twice by Canadian banks in 2007 and 2008 (which contradicts what you said).

I had no debt, solid credit score (over 750), $40,000 in the bank and was finishing a Ph.D. (wasn’t making a lot of money at the time but was highly employable). Financee was also making some money and they wouldn’t even consider her income because it was contract work.

Tried to get a 5% down, $200,000 mortgage and was shot down. Twice. No dice.

Why?

Because our banks were/are prudent.

I am living proof that they behaved differently in Canada than the US.

Do you think I/we could have received a mortgage in the US under the same circumstances? How much do you think we could have received?

#178 Snowman on 08.17.11 at 7:50 pm

“In mid-July the average detached house in 416 cost $720,808. In mid-August the same place was changing hands for $597,593. At least that’s what the Toronto Real Estate Board reported this week – a $123,000, one-month 17% plunge”

Interesting … it was only a week ago when you said this:

“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.”

Don’t get too excited about a monthly number. But this is progress. — Garth

#179 Devore on 08.17.11 at 7:52 pm

#173 Habbit

Not necessarily. Yes, the commission is split 50/50 between the two agents. Either agent may reduce their commission depending on their agreement with their client, and refund the difference to their client. It is expected that even if the selling agent reduces their commission, that the full commission will be paid to the buying agent, unless other agreement is made. This applies to fixed fee or low commission (1%) agents, as well as FSBO, although many FSBOs will insist the buyer pay his own agent separately.

If an agent double-ends a deal, as it is known when one agent is both the seller’s and buyer’s agent, a perfectly cromulent, if ethically challenged, arrangement, the agent may pocket the entire commission, or reduce it, depending on what his clients agree to or demand.

The contract terms and payment between agent and his client is negotiable.

#180 Nostradamus Le Mad Vlad on 08.17.11 at 7:53 pm


#38 Ware — Nicely pointed out, ‘tho now, nothing can be done about it. Harper’s actions will judge him, not us.
*
“Say, I notice Eric Sprott is bailing out of gold. — Garth” — Then this . . . Chavez pulls Venezuela’s gold from JPM. Is the US about to invade (again), or is the economy about to crash? Also — 1:27 clip Check it’s not tunstenized; SEC Anyone remember them? 5:42 clip Is GS too big to fail? Economic Implosion = Police state, as sheeple are blazing mad; RBS to cut some ATM users off at the knees; 9:10 clip GS. Speaks for itself; 2:46 clip Lady’s yard sale to pay for medical bills shut down. None of the banxters at GS or JPM have ever been charged, ‘tho; Unemployment in UK rising; Merkel and Sarkozy “The system is intentionally designed to bring about permanent enslavement to debt.” wrh.com; Free Labor Money for Nothings and the chix for free (for the corporate execs.); EU Dispense with politicos, banxters and the like thruout the world. Pluto needs a good banking system!

Hedging Bets on America’s biggest banks; Gold Fever Discovering it is just as exciting as selling it; US$184 bln. (old price) NAFTA Super Hwy. from Texas to Timmins.

3:18 clip US govt. to build shadow ‘net; Motorbikes Further evidence of a police state / dictatorship, and a deteriorating economy; Gored Al Brutally average to cool here this summer, too; Obama Stirring the shit and looking for a FF to boost his ratings. Michelle Bachmann or Sarah Palin can do that for him! Nuke Fallout Wondered why I’m turning purple with pink spots!

Lunatic Fringe Ron Paul is persona non grata. Who is a looneybin? Peace The m$m is the enemy of peace, constantly craving for more wars to boost their readership and ratings; GW and Infrastructure Infrastructure can be fixed. Not so for GW cultists; 14 Cities ready to riot, do a GB Part II; Obama Becoming ours and Mexico’s king under the NAU / SPP?

#181 Bottoms_Up on 08.17.11 at 7:53 pm

#169 Devore on 08.17.11 at 6:52 pm

“They verified income as much as Canadian banks verify income on CMHC mortgages.

Vast majority of US mortgages were made to people who are perfectly capable of servicing them.”
———————————————————

How certain are you of these two sentences?

#182 Devore on 08.17.11 at 7:54 pm

#173 Habbit

Agents and their RE office have a “desk fee”, which allows them to use the marketing/branding/resources/facilities of the company. I’ve heard 50%, which seems high, but I don’t know how it is typically structured. Undoubtedly it varies. I’m sure the many realtors(tm)(r) on this blog will enlighten us.

#183 Moneta on 08.17.11 at 7:56 pm

Sound and fury signifying nothing? But it might be prelude to restructuring some obligations because of “current market climate”, that’s code for “bend over”.
—–
I just get the feeling they are doing everything to make us worry and believe that it’s very bad out there… so bad that we have no choice but to embrace their proposed austerity measures.

#184 JohnnyBravo on 08.17.11 at 7:56 pm

“Say, I notice Eric Sprott is bailing out of gold. — Garth”

Maybe Mr. Sprott really means it when he says that gold was the investment of the last decade.

I find it interesting that Sprott is getting deeper into silver, while Janzsen recently got out of silver completely, at least for the intermediate term.

BTW, many people have invested and won in Mr. Sprott’s bullion trusts, but the biggest winner, I’m sure, has been Mr. Sprott himself.

#185 Bottoms_Up on 08.17.11 at 7:58 pm

#162 Junius on 08.17.11 at 5:58 pm
———————————————
I would love to hear from someone on this blog that took out a mortgage in Canada that they know they can’t afford.

Anyone?

If Garth’s blog get’s 500,000 hits a month, I’m sure someone on here has some type of story where someone making $50,000 was given $500,000 with zero down?

Anyone?

#186 Mr. Reality on 08.17.11 at 8:01 pm

DELETED

#187 Victor on 08.17.11 at 8:02 pm

Chinese faking divorce to buy more homes

Call it ‘Til Debt Do Us Part, China edition.

Soaring real estate prices in China are breaking up marriages, but not in the way you might expect. Unlike in North America, where high household debt levels are putting a lot of stress on families, Chinese couples are divorcing – or at least pretending to – in order to borrow more.

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/chinese-faking-divorce-to-buy-more-homes/article2132059/

#188 Hoof-Hearted on 08.17.11 at 8:02 pm

Stimulus ….yeah….right.

I really laugh when the politicians talk “stimulus”?

Do they think the are Jesus to Lazarus?

A private sector firm takes YEARS to build up…and not much to go broke.

Once its dead its G-O-N-E…perhaps a bit of life support will delay the inevitable.

U.S. REAL unemployment numbers are bad…do they really think these people will be “re -stimulated”?.

Talk about the ” BIG LIE”

#189 T.O. Bubble Boy on 08.17.11 at 8:03 pm

So, let’s say that you’re listing your yet-to-be-built condo on mls.ca… what picture would you use?

How about the construction site being demolished, and looking like a garbage dump?

http://www.realtor.ca/propertyDetails.aspx?propertyId=10862425&PidKey=-760667235

#190 Utopia on 08.17.11 at 8:29 pm

#119 poco

don’t get upset that no one commented on your “revelation”—we already knew the market had turned many months ago”
————————————-

Sorry about that everyone.

As I noted earlier, that was my mistake in how I wrote my post. The comment I left was directed at the group of people who often come to this site and belittle us for our views.

That was just my way of saying “told you so” to the many doubters (and there are plenty) but the remark was definitely not meant for the regulars.

I will have to proof read for clarity a bit more.

#191 jess on 08.17.11 at 8:32 pm

I just love living in a casino.

Timo, i thought it was a carousel ;)

=

“CMHC doesn’t change the fact that the Canadian banks verified income and lent money to people that could afford to pay it back.”

You are kidding, right? You can’t be serious.

Regarding the computer database Emily. Who verifies and checks that the numbers these “professionals” input for income are correct?
And with the usa experience wasn’t the brokers who went down first?
===============================
From the FBI site:

“Mortgage fraud perpetrators using their experience in the banking and mortgage-related industries—including construction, finance, appraisal, brokerage, sales, law, and business—exploit vulnerabilities in the mortgage and banking sectors to conduct multifaceted mortgage fraud schemes. Mortgage fraud perpetrators have a high level of access to financial documents, systems, mortgage origination software, notary seals, and professional licensure information necessary to commit mortgage fraud and have demonstrated their ability to adapt to changes in legislation and mortgage lending regulations to modify existing schemes or create new ones.”
=======

http://grassley.senate.gov/about/upload/2011-08-17-CEG-to-SEC-MUI.pdf

#192 USA A-OK on 08.17.11 at 8:43 pm

Want to live cheap?

Here are 10 cities with houses under $150k

http://www.planbeconomics.com/2011/08/17/10-cities-where-you-can-buy-a-house-for-under-150k/

No thanks. — Garth

#193 Mike on 08.17.11 at 8:48 pm

Unlike most people on this blog, I had an opportunity of interviewing Mr. Carney (as a member of the House of Commons Finance Committee) prior to him commencing his current job. I have infinitely more confidence in him than I do in F. — Garth

Yes like comparing Moe to Curly … Neither is steering the ship. Both are along with the ride like the rest of us. It is all in the hands of USA folks and the boys on Wall Street. Even F knows this but let him bluster around with his resoled leather shoes thinking he is making a difference. NOT.

#194 Daisy Mae on 08.17.11 at 9:02 pm

Victoria on 08.17.11 at 6:38 pm

“I have young children and I don’t want them to worry ie. money troubles, daddy might have diabetes, granny needs tests. They are young and don’t need to worry about things at their age. The government looks at us as children.”

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

Yes, they do…treat us like children. ‘Cause we act like children.

#195 Onemorething on 08.17.11 at 9:07 pm

DELETED

#196 Cabot Lodge brylcreem & trenchcoat on 08.17.11 at 9:25 pm

Imagine owning one of those GTA falling glass condo’s.

#197 smoking man on 08.17.11 at 9:39 pm

Bubble heads. Not going to belive this from a certifide lieer black dude from hatti in the smoking cage at woodbine says to me bet on hourse 8 in race

Brother I say there is no hourse 8. He goes 8. Hum I get a feeling. I go to the betting window box 1 3 4. Tryactor.

Well just won 1900 and change

Garth do u remeber the psc of movie script I sent u. That u did not post. thannks for not posting it. But the character smoking man is real. I can read minds and predict the futer. 50 50. Help me finish it

#198 Markey on 08.17.11 at 10:05 pm

Garth, you’re mentioned in The Huff Post: http://www.huffingtonpost.ca/2011/08/17/toronto-housing-market_n_929457.html

How fitting. I’m all huff. — Garth

#199 this is wonderland on 08.17.11 at 10:10 pm

#189 T.O. Bubble Boy

What’s that red blob in the ceiling?

#200 disciple on 08.17.11 at 10:52 pm

Our puppet rulers mince no words in telling us that they are lying to us, and we still hang on their every word? They manipulate you because you let them. If you don’t want to be treated like children, stop acting like children. You know that they cannot save you from a very bleak future indeed. Redeem yourselves through action. Stop electing them, look to the independents in your riding. Otherwise, you have no excuse to whine when they decide they won’t be paying for your healthcare anymore, because the health taxes went to pay the central bankers.

Your real rulers want you to think they are bumbling idiots. Nothing could be further from the truth. Their well-crafted plan has a precise purpose, always.

At least three generations of this world have been subjects of their modern techniques of free-range farming via so-called liberties such as cessation of child abuse and allowing women to vote. (Livestock that feel “free” are better producers of wealth for their farmers).

And I will empty my bladder wherever and whenever I feel like. Thank you. I have no ruler, but my own conscience, my direct link to the divine. I follow the dictates of collective human government only to the extent that it promotes unity, peace, and elevates the spirit of enterprise. That would preclude 80% of the law.

I encourage all of you to get off the farm. There’s an entire universe of knowledge that awaits you.

#201 Sane Oddballs; More Peripheral Collapse – “It is amazing how common sense thinking is now considered to be contrarian.” | Vancouver Real Estate Anecdote Archive on 08.18.11 at 8:36 am

[…] “More and more listings are appearing in Qualicum Beach and surrounding areas – small economy and people are passing on – and their children are selling the houses as they can’t find jobs there – Albertans who bought investment properties are moving back to Alberta as they can’t take the wet weather (not good for their health). I mean really? – who buys a 3-5 bedroom house when they retire? – most are starting to downsize to retirement homes or the few remaining condos. I saw this coming 15 years ago when a 3 – 4 bedroom rancher by the golf course was going for 169K – 249K. A massive building boom took off in Qualicum Beach and this ended one – two years ago. Too many houses not enough retirees with the cash needed to buy – insufficient health facilities, retirees are getting older and selling to move into assisted living quarters in nearby Nanaimo. It is amazing how common sense thinking is now considered to be contrarian thinking, lol. Victoria is seeing more and more houses for rent and just about every house has a basement suite for rent for about $1200/mth. Apartment vacancies are increasing, less students returning to University – if I was them I would stay at home and take courses by correspondence until they can afford to move out. Vancouver mentality – well, you’d have to live there to understand how trendy they believe they are or think they are, bad traffic, bad weather, and you might get caught in the gang cross-fire. Raincouver – it really amazes me that educated people can be so so oblivious to reality, but that’s what herd mentality gets you. … Stupid transcends all generations – sorry but that is a true reality.” – Don at greaterfool.ca 16 Aug 2011 10:37pm […]

#202 Shane on 08.18.11 at 1:04 pm

Garth, I was talking with my Remax agent in Markham Today she said the market is still very strong in Markham?

Shane

I’m shocked. — Garth

#203 Betty Danin on 08.18.11 at 3:22 pm

On the coast to coast radio last night a person I can’t recall his name said He is warning people in Vancouver real estate will drop 40%-50% over next 4 years.He sees that worldwide real estate will plunge as he called it one of the the world’s largest bubbles. He also sees the Dow Jones falling to the 3300 level by 2015. Cash set aside is what he recommends until 2015 there will be a once in a lifetime opportunity to buy equities, real estate. He also recommends stay away from bonds which are very overvalued too. What do you think Garth Turner?

Doomers are in these days. — Garth

#204 Trev16 on 08.18.11 at 7:03 pm

Real estate markets go up and they go down. As a realtor here in BC…..I can see that listings are going up and sales are decreasing……which will result in an obvious reversal. How much…..who knows? However the one thing I do know is that fiat currencies are doomed and one day there will be a bank holiday where there will be a reset of all the values and a cleansing of the ponzi scheme (debt). If you really want an idea of how corrupt Wall Street and governments are: go to maxkeiser.com and infowars.com. Also zerohedge has an article up right now that indicates our banks are next on the chopping block. It’s all good!!!!!