Supply & demand

Are there too many houses in Canada? If so, doesn’t it make sense prices should decline? Have we suspended the laws of supply and demand? Or are we setting ourselves up for a US-style situation in which a crushing correction is all but certain?

Consider this: in the American bubble, circa 2001-2006, there were a stunning 11 million new houses built in the US. During that time 7.8 million new households were formed, either through immigration or natural population increase. The excess of 3.2 million houses, or 29%, was the ballooning stock which helped to impregnate a boom into a bubble. It’s why today they’re bulldozing houses in many American states just to remove  inventory which guarantees  prices will flatline, or sink, for years more.

Even in America, in times of cheap rates and cheesy expectations, supply and demand rules.

How do we compare?

From 2001 until this year, we added 1.95 million new houses in the greatest sustained real estate boom in history. Need proof? Just drive through any of the monotonous, textureless burbs surrounding the GTA – Milton, Burlington, Woodbidge, Ajax, Whitby or beyond. Where thousands of acres of farmland existed a decade ago are now hundreds of thousands of suburban houses, arterial roads and vast parking lots erupting in Best Buy, Winners, Home Depot and Staples stores. Of course, the same exists in Calgary, Burnaby and Red Deer. The new symbol of Canada is a particle board box covered in face brick with a double garage door on the front.

During that decade of unprecedented home construction, the population of Canada increased from 31 million to 34.1 million. So, we created 1,148,250 new households (roughly 2.7 people each). This means there was a surplus of 800,000 houses created – or 41% of the new housing stock.

So how could the country create and absorb 40% more new houses than there were new families to buy them?

Same two reasons as in the US during its bubble years: (a) the number of people who became homeowners swelled to historic highs, thanks mostly to cheap debt, and (b) investment exploded, as people bought real estate as a speculative commodity.

In America, homeownership levels climbed from the mid-sixties to 68% in 2006 when the bubble burst (it has since tumbled the fastest in recorded history). In Canada, as you know, we have now achieved 70% homeownership levels. Never before have seven in ten families had a house, and never before have households been this much in debt.

As for speculation, fully 80% of all new condos in Toronto are snapped by absentee owners these days, and this blog is rife with stories of HAM indiscriminately scooping properties in Richmond, Burnaby and Vancouver. Just peruse the Craigslist listings for rentals in any major Canadian city and it’s immediately apparent how many properties are owned by speckers looking for a tenant to help defray carrying costs. Real estate is the investment opiate of the masses.

As Americans discovered when housing fell out of favour, debt mushroomed, demand declined, listings plumped and prices corrected, there were w-a-y too damn many properties. Suddenly the excess of supply over demand sent values skidding lower, creating enduring and monumental social problems. It thrust hapless owners into negative equity and gutted middle class net worth. When average people could not afford the average home, a 68% home ownership level was economic suicide.

So, go figure.

We have a higher ownership rate now than America did at the bubbliest moment. Theirs topped at 68%, and ours is 70%. They built 29% too many houses. We built 41% too many. They assumed record household debt. We’ve piled on even more. And we share the same basic economy.

There’s one glaring difference, though. US real estate collapsed. Five years later it’s destroyed so many families that authorities now bulldoze homes once the object of bidding wars.

This may not happen here. But only the puerile among us believe nothing will.

204 comments ↓

#1 shane on 10.10.11 at 4:36 pm

Garth, give me reason why is shouldn’t happen hear? specially in markham ontario.

Shane

#2 Steady Eddie on 10.10.11 at 4:48 pm

consumption is the opiate of the masses

#3 Thankful in Calgary on 10.10.11 at 4:48 pm

So glad I bought in early 2006….just pure luck…

#4 Felix Set on 10.10.11 at 4:53 pm

My DT Vancouver townhouse has been listed at assessed value on and off for the past 6 months. Zero offers. I want to get out, but I can’t.

#5 Timing is Everything on 10.10.11 at 5:00 pm

http://tinyurl.com/3qnj8zm

#6 RainBird on 10.10.11 at 5:03 pm

It’s hard for foreigners to buy properties in the US. Their tax laws and their laws of residency and lending laws are vastly more restrictive than in Canada.

In Canada, as long as you can prove you’ve invested in property, you can get citizenship, get free education for your kids, get free medical. None of that is available in the US. Vancouver has a very diverse and tolerant society, 60% visible majorities, practically crime free etc. It’s hugely more popular with Asians.

#7 Marc L on 10.10.11 at 5:03 pm

I have been monitoring the Ottawa market and nothing over 500K seems to be moving. It just sits there month after month. Why is the media not doing a story on this?

#8 Bill Gable on 10.10.11 at 5:03 pm

Stark warning – I just got back from SE USA and was appalled at what has happened because of the Housing collapse.
The anger is palpable.
Phoenix and Scottsdale were, in a word, a world upside down, and there’s a War going on just over the Border in Mexico.

My family there is shell shocked.
Gosh, after reading this post – Canadians have got to WAKE UP.

#9 Phil S on 10.10.11 at 5:05 pm

It hasn’t happened in Canada – YET. Wasn’t “supposed” to happen in Australia either (they have Kangaroos there – so “they are different”), but the rot has certainly started, and with increasingly dire un- and under-employment stats for “Middle Australia” seems the momentum is rapidly gaining.

We’re off to visit Ecuador – seems the place to retire to (acc. to International Living), and it seems thet the “new” South American economies are poised to take over where the “old” Western economies have left off. Just look where all the loot from the “Banking Collapse and Rescue” packages has migrated to.

If we bump into George Soros, we’ll give him your best regards!

#10 LS on 10.10.11 at 5:06 pm

Garth, thanks for the new words (all the time!)

Definition of PUERILE
1: juvenile
2: childish, silly

#11 Bill Gable on 10.10.11 at 5:06 pm

Addenda – I of course, mean SW USA. It’s the Ipad’s fault. Apologies.

#12 Ladybug on 10.10.11 at 5:17 pm

Then Salmon Arm, BC must be almost completely inhabited by the puerile because the sentiments we hear the most, as you’ve already said so many times, “it won’t happen here”. Even though Kelowna is less than two hours away – there are no lessons to be learned.

If in fact, one brings up the state of the real estate market in Kelowna it is met with scorn because THIS area is not like them. No, they follow the Vancouver real estate market – by about six months. But it is interesting to note how the market is softening already here too.

We are considered the fools for renting because, don’t you know, “the Albertans are coming! Hurry, hurry! The Albertans are coming!” I guess that’s the local equivalent to the H.A.M. in Vancouver?

It’s going to be an interesting show.

#13 Hoof-Hearted on 10.10.11 at 5:20 pm

Fiiirsssttttttt

#14 Daydreamer on 10.10.11 at 5:21 pm

Interesting that of the people I know, 70% of them are now real estate agents. This will not end well.

Europe is a mess and middle east in shambles and I have to hear from everybody calling me stupid for renting.

#15 NFN_NLN on 10.10.11 at 5:23 pm

Excellent post based on factual comparatives. People can argue all they want but the numbers don’t lie.

I was actually aware of all the figures EXCEPT the 41% you quoted. I fully believe there is a bubble, but even I didn’t anticipate that amount of overbuild. Thanks for keeping the rational debate going.

#16 Nostradamus Le Mad Vlad on 10.10.11 at 5:29 pm


“Supply and Demand, Shitty Advice $1, So, go figure.” — A good thing this cycle is coming toits conclusion shortly. Countries and citizens need more farmers and farmland, not brick shit houses which serve no useful purpose at all.
*
Good posts for a holiday.

Interesting day. With a subsea volcano now erupting off the Canaries in the east (link below — not the big one a little further up — when that blows, the land slides into the sea and causes a massive tsunami), and the Fukushima fallout ten times larger (links and pix below) and headed west to us, money doesn’t really matter anymore.
*
“Escalate wars and you get a Nobel Peace Prize as Obama did. Wipe out 20% of the earth’s population, well then you get your own holiday…” — Today is Columbus Day in the US and, evidently Columbus wiped out 20% of the earth’s population, then had a holiday for him. The world is warped.
*
Financial Polarization and the Super Congress. “. . . were planted last summer when he assigned his right-wing Committee of 13 the role of resolving the obvious and inevitable Congressional budget standoff by forging an anti-labor policy that cuts Social Security, Medicare and Medicaid, and uses the savings to bail out banks . . .”; Four Points to ponder on Wall St.; Plutocrat Panic The mass protests may be having an effect; Eurozone Up- Down-date US$6 trillion (my investment plan), and France loses its knickers.

Dexia bankrupt? Not when bailouts are free and taxpayers are still available to foot the bill! When? For those who like to make predictions; 15 Homeless Shelters to close. “But Sallie Krawcheck gets $6 million severance pay for being FIRED after just two years of work at BofA.”; wrh.com; Shaddup and Die BoA; Egypt Just like Greece and Ireland, who were doing so well.

Canary Islands Subsea volcanic eruption underway; Fukushima Actual fallout is ten times higher and Pictures speak a thousand times louder than words; Four Failures in US nuke plants, not politics; Invisible Surveillance The end of NAmerica, our rights and freedoms as we knew them; Link Proven Solar cycles (sun spots, etc.) and the weather, with a lot of help from HAARP and Cold Winter? Headline says; Pol. Cor. gone nuts. the more laws a country (or countries) write, the less spiritual it becomes.

PC Oligarchy rules UK; GW Club bids farewell to Al of the Goracles; Big Brother (California). Vaccines; Twinkle Twinkle Little Star The planet is being bombarded! Drones Heads up! Put masks on so no one recognizes us.

#17 RentingIsForRealMen on 10.10.11 at 5:31 pm

Hi Garth,

Do you have some statistics about the infamous HAM ? Can we estimate the % of market it represents ? Happy Thanksgiving everyone !!

#18 Smell The Coffee on 10.10.11 at 5:32 pm

House prices have been blown up by ponzi banks that needed a money feeder system to drive up long term debt obligations. They needed these commitments to cover (paper-over) their short-term trading losses from bad derivatives.

The real estate boom is kind of like holding onto an anvil when your house blows up. It is a fast ride up … and quite exiting, but hell on the way down.

That is what happens in a post bubble event. The down draft into a depression excellerates the price decline velocity. It gets terrifying when you run out of updraft air and you hit the ground. Holding the anvil doesn’t help much. Think of the anvil as you mortgage.

Although you can only have a 4 to 5 times annual income ratio for mortgage a bank will lend all of your savings (they don’t have any money of their own … remember they are money managers not money owners).

Theoretically they handle your money for prudent gain. However, in the 1990’s they became casinos with derivatives gambling. t heir debt-to-equity ratio was far worse than your own balance sheet in that they lent 40 to 1 and some banks 70 to1 in derivatives bets and swaps. This was insane risk, but typifiers what banks have done in the name of covering losses.

Now they are broke and not only asking for repeated handouts but will put you in the poor house if you don’t deliver on your life long mortgage obligation.

Occupy Wall Street will soon be occupy Bank Street. Only in this case the banks will be your local branch on Main Street.

#19 MarcFromOttawa on 10.10.11 at 5:36 pm

1st?

Buying XIU tomorrow thanks to Garth’s advice (instead of paying the P-.65% beast).

#20 CJ on 10.10.11 at 5:41 pm

You fail to distinguish between condos, which few people really want, and SFH detached homes. In the area I live in (Lower Mainland of B.C.) the supply of the latter is limited by regulation and geography. Right now I wouldn’t buy one myself as their prices are indeed likely to fall, but there will never be a surplus of them. They will never be bulldozed to cut bank losses as they have been in California, or molder uninhabited as they do in Florida.

While we’re at it, I’m happy to see that you seem to recognize that overseas money actually has played a role in driving up the price of some Canadian real estate. This isn’t news to British Columbians, but the knowledge hasn’t spread as fast as it should have. I tried to tell this to some of my relatives in Oakville and Burlington (yes, really) a couple of years ago, but it was so far outside their experience they had trouble believing it.

Here’s a hot tip for you and your readers. Much of the recent overseas money pouring into certain areas of greater Vancouver is actually a form of money laundering by corrupt Chinese government officials, who are investing money skimmed from state-owned enterprises. This is completely illegal, and every so often somebody gets executed (in China, bullet in the head) for doing it. This is a worry for these people — certainly a much bigger worry than rising interest rates affecting mortgages, which they don’t have because they are, after all, laundering large amounts of cash.

Does any of this mean RE prices will keep on rising to the sky? No. Would I buy westside or Richmond RE myself? No. Would I leap into low-interest-rate debt and live it up? No. But because I live here and I’ve seen it for myself, I understand a few things that people from elsewhere usually don’t.

#21 Paul on 10.10.11 at 6:03 pm

A kicked can will always finds itself at the end of the road. Sometimes that road seems like it will never end, but they all do… I think you can only do your best think critically, assess the probabilities, plan accordingly and then accept the results. It helps if you have some perspective on how fortunate we are to live in Canada. I still hope for an orderly wind-down, but I am worried for BC.

Thanks for your posts.

A happy renter in Vancouver.

#22 penpal on 10.10.11 at 6:07 pm

@ # 12 Ladybug

It’s called denial.

#23 penpal on 10.10.11 at 6:14 pm

@ # 6 Rainbird

Give your head a shake.

You do not gain citizenship in Canada by merely investing in real property.

“Vancouver…practically crime free, etc.”

You don’t get out much do you?

#24 Ozy - USA above Canada on 10.10.11 at 6:23 pm

My take on this…the fellow called Americans, may feel dumber but they are not, there is more freedom south or border, at least they have some distant memories of anti-colonian revolution…and guns.
Today’s Canadians have no similar underpinning historical or moral values like Americans, is an so-easy to swing aroung mass of urban consumer-type populus, so easy to market to and take advantage of.
So, let’s do it and get rich on their back, where is the problem?
Don’t wake up the dreamers, we still have stuff to sell them and thier kids for few more generations!!! It’s a no brainer here.

#25 penpal on 10.10.11 at 6:26 pm

@ # 21 Paul

Stop hoping for ..”an orderly wind-down..”

You’ll only be disappointed.

It doesn’t work that way when bubbles burst.

@ # 20 CJ

Do you not think the Chinese banking authorities / government are not going to come after these people and demand the house titles as a “proceed of crime”?

They will blow these properties out after a legal fight (which they will win in Cdn or Int’l courts citing Cdn precedent) , at the point in time to inflict serious pricing damage in what will be by then a fragile and falling market.

Do you really think the Chinese will piss around?

You said yourself that they tend to settle these matters with a bullet, didn’t you?

Yes siree, it’s gonna be quite a show in good ole’ Vancouver.

I plan to enjoy it.

#26 Timing is Everything on 10.10.11 at 6:33 pm

#16 Nosty – Countries and citizens need more farmers and farmland, not brick shit houses which serve no useful purpose at all.

Oh, and more golf courses… ;)

http://www.golfcourselistings.ca/

#27 cata on 10.10.11 at 6:40 pm

I use to agree with you about correction, but not for the reasons you wrote here. Now I think it wont be a correction.

#28 Gord In Vancouver on 10.10.11 at 6:48 pm

Excellent post, Garth.
Enjoy your turkey.

#29 doctore on 10.10.11 at 6:50 pm

I have been saying the same thing here in london. How can there be such housing demand with an unemployment rate now last recorded at 9%? There is a wide swath of land cleared just on the northern boundry of the city now all bulldozed and ready for countless hundreds of higher end homes. Before this was just an empty field/farmland. Where are the people with $ coming from settling here to need such housing? I am baffled.

#30 timo on 10.10.11 at 6:55 pm

http://blogs.telegraph.co.uk/news/danielhannan/100109371/more-money-printing-my-masters-are-you-mad/?source=patrick.net

“If I were to print counterfeit £20 notes and buy goods with them, I’d be perpetrating a fraud: I’d be buying something of real value with something I had magicked out of thin air. Yet when a central bank does the same thing, the half-educated economists who dominate our universities and television stations nod approvingly and mumble cliches about ‘boosting demand’.

You can’t keep boosting demand without producing anything, for Heaven’s sake. That’s what got us into this mess.”

holy hamburger batman, another light bulb in the dark.

http://www.dailykos.com/story/2011/10/10/1024808/-Unaffordable-Health-Care-and-Death-of-the-99-in-Pictures?via=sidebar

graphs are so last recession. we need rainbows and candy canes. Art can be fun ;)

#31 Observer on 10.10.11 at 6:56 pm

@ #6 Rainbird – Yeah, Vancouver crime free – hahahaha

As of 2005 Vancouver had the 4th highest crime rate of the 27 metropilitan areas in the Canadian census.

Vancouver’s property crime rates ranked among the highest for major north american cities.

Metro Vancouver has the highest rate of gun related violenct crime of any major metropolitan region in Canada based on a 2006 report.

And just for kicks if you travel down HWY #1 about 1hr east of Vancouver you will find yourself in lovely Abbotsford – Murder capitol of Canada.

Oh yeah , almost forgot to mention the Game 7 stanley cup celebration.

#32 Lookoutbelow on 10.10.11 at 7:00 pm

So finally people are beginning to talk about hot Asian money. Here in the Lower Mainland Greater Vancouver we see it and feel it all around us. There has never been a greater number BMW’s or Mercedes Benzes around, but those are the poorer people. Sales of Maseratis, Bentleys, Ferraris and Lamborghinis have never been higher. And these vehicles are used by teenagers (and seine twenty somethings to race down Hwy 99.

Surely someone has to be asking where this money is coming from?

And what about the Canadian Immigration Minister cutting the number of Business Investor to 700 on July 1 (in 2010 over 3200 immigrated). Come n Garth, with your Ottawa connections, you must know the rationale for this. In the words of the inimitable Marvin Gaye, What’s going on ?

#33 john m on 10.10.11 at 7:10 pm

Shocking! great post Garth.

#34 Devore on 10.10.11 at 7:16 pm

#20 CJ

Here’s a hot tip for you and your readers. Much of the recent overseas money pouring into certain areas of greater Vancouver is actually a form of money laundering by corrupt Chinese government officials, who are investing money skimmed from state-owned enterprises.

And you know this because it’s common knowledge, right? Or do you have access to some facts no one else does?

#35 LSC on 10.10.11 at 7:19 pm

Garth;

To you point of oversupply – The St John’s CMA area is arguably 200,000..ish residence. Based on your 2.7 factor that is a little shy of 75,000 household. CMHC statistics have the numbers of new home starts averaging north of 1500 per year since 2001, or more then 15,000. That would be a new home for one out of every 5 households and yet prices continue to move up. This area will not escape the “correction”….

Great post – you’re on a hot streak lately.

#36 RoninBC on 10.10.11 at 7:26 pm

Still waiting and waiting and waiting for the huge collapse in RE prices in Vancouver as you have forecast so many times in the past. Lots of houses with SOLD signs in front and SOLD OUT signs on high rise sites.

Do you think prices out here are going to drop substantially in 2012, 2013, or when? Or ever?

Tired of waiting.

Then buy. — Garth

#37 Westernman on 10.10.11 at 7:32 pm

Bill Gable,
Yes, the world of reality is just off Canadian’s doorstep but never worry Canadians have their prioritys in order…
Their main areas of concern are things like where to park their RV’s, which group of overgrown adolescents have the best hockey win/loss record,when tee time is at the local golf course and of course how much is up for grabs in the various lottos.
Yes, indeed – have no fear Canadians are right on the case.

#38 Devore on 10.10.11 at 7:45 pm

That’s a nice hockey stick you got there! :) Double your money in a year, ezpz. What could possibly go wrong.

http://www.bloomberg.com/apps/quote?ticker=GGGB1YR:IND

#39 jas on 10.10.11 at 8:12 pm

The excess of 3.2 million houses, or 29%, was the ballooning stock which helped to impregnate a boom into a bubble. It’s why today they’re bulldozing houses in many American states just to remove inventory

Shame on those who are demolishing houses just to keep the prices up.
Then again USA has dumped grain in the belly of the oceans while people strave to death.
Not much of compassion is expected in a country where idots elect bigger idiots like George Bush who say that Greed is Good!

Folks…Lets bring some balance to this madness.

#40 Daisy Mae on 10.10.11 at 8:16 pm

“This may not happen here. But only the puerile among us believe nothing will.”

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

Everyone I talk to is oblivious….

#41 Daisy Mae on 10.10.11 at 8:24 pm

“The new symbol of Canada is a particle board box covered in face brick with a double garage door on the front.”

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

The vast majority of houses being built today are sure not destined to be heritage homes! LOL

#42 Daisy Mae on 10.10.11 at 8:35 pm

LS on 10.10.11 at 5:06 pm “Garth, thanks for the new words (all the time!)”

Definition of PUERILE
1: juvenile
2: childish, silly

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

I know! He does that ALL THE TIME. LOL I keep my dictionary right by my desktop….

#43 wtf????? on 10.10.11 at 8:54 pm

As goes the cheap money , so goes the world….here’s Korea.

“South Korean households’ outstanding debt is more than double their yearly disposable income, almost the level U.S. household debt reached before the subprime mortgage crisis erupted in 2007. Only 1.3 per cent of bank loans’ are non-performing at present, but if households should start to default, that number will go up fast. South Korea’s finances look strong, but they may need to be. ”

Does this sound familiar. Instead of cutting back on spending, governments in the G20 were swayed by idiots like Flaherty ( a bombastic voice at those conferances) to cut rates and juice the consumer debt instead. F figured this would bolster tax revenue so that they wouldn’t have to cut. Now…..morons like him have screwed the world economy….maybe for good, unless people get smart and ditch these spendthrifts and the Keynsian nag they rode in on.

Dear F….100% is everything….the rest is debt and all the bad things that go along with it. Households should not have been encouraged to leverage as if they were corporations or governments….Mom and Pop can’t print money…tax their neighbour or issue bonds.

Cut all spending now……as you can see there are consequences to this silly bugger behaviour. You got elected F…….so howz about cutting back o n the pandering.

#44 Habbit on 10.10.11 at 9:05 pm

Super comparison to the US market. Just more ammunition for your position Mr. Turner. It is unbeleivable that homes are being bulldozed while there are so many homeless. What kind of screwd up system would permit this whole fiasco. Little wonder there are protests. The end of this all may be nasty. In the meantime the suffering. But not to worry it’s different here. Thanks again for making a difference Garth.

#45 APM on 10.10.11 at 9:18 pm

From 2001 until this year, we added 1.95 million new houses in the greatest sustained real estate boom in history. Need proof? Just drive through any of the monotonous, textureless burbs surrounding the GTA – Milton, Burlington, Woodbidge, Ajax, Whitby or beyond.

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

These areas are also a great example of how badly urban planning has failed.

#46 45north on 10.10.11 at 9:21 pm

Bill Gable: I just got back from SW USA

The anger is palpable.

Phoenix and Scottsdale were, in a word, a world upside down, and there’s a War going on just over the Border in Mexico.

Daisy Mae: Everyone I talk to is oblivious….

Not my daughter-in-law. She lives in New York City. She is shocked that owners have destroyed their houses out of anger with the banks.

#47 Paully on 10.10.11 at 9:23 pm

Check out this beauty: Four bedroom, two bathroom condo townhouse in the west end of Toronto. Only $54,900.

Of course,it says that there is no access to the interior of the property. I would have to guess that there must still be police tape around it or something…?

http://www.realtor.ca/propertyDetails.aspx?propertyId=11127145&PidKey=-1082281725

#48 I'm stupid on 10.10.11 at 9:29 pm

Garth

Your wrong. It won’t happen here because Canadiens have figured out how to make 2+2=5. So the numbers are inconsequential to the future.

‘Your’ is possessive. ‘You’re’ is the contraction of ‘you are’. Oh yeah, and les Canadiens suck. — Garth

#49 InvestorsFriend (Shawn Allen) on 10.10.11 at 9:35 pm

50 Murders in 50 Weeks?

In Edmonton we don’t have Gretsky anymore.

No Edmonton Oiler is gonna score 50 goals in 50 games this year.

But, we ARE the murder capital of Canada. Not just per capital either we actually have the highest number of murders in Canada. (As I undertand it)

We are sitting at about 40 murders this year. Quite possibly we are going for 50 murders in 50 weeks.

Remember when it used to be so much safer in Canada. How we were smug about our low murder rates?

#50 West Coast Woman on 10.10.11 at 9:36 pm

I often wonder where are political leaders out here in Vancouver and BC get their projections. Recently we’ve been told that the Greater Vancouver area’s population will increase by 1 million over the next 30 years.

Well, where exactly are these people going to come from, and how can they afford million dollar homes when they get here? The Chinese may come, but they usually leave as soon as their children are educated, just as many from Hong Kong did. Europeans and Americans (whose say that BC stands for “bring cash”) don’t want to come here anymore (it’s too expensive), nor do the Indians (other than some from the Punjab). So where else are they going to come from? South America? Russia? Africa?

Because of these unsubstantiated predictions, every neighbourhood in the City is now going to build expensive high rise 1 bedroom condos – to hell with what it does it does to the social fabric of those neighbourhoods. Many long time residents, seniors, those on social assistance and the disabled are being pushed out to make way for these new condo developments (that no one who lives here wants). Meanwhile there’s probably 20,000 empty condos already in this City – many purchased on spec.

Also, MANY single family homes are empty all over the City. About 5% in my neighbourhood, with one house up the street vacant for the past 10 years! Meanwhile, the developers keep on tearing down great houses to build particle board faux brick McMansions for the Asian market. The asking prices for those now START at $4.6 Million, with one asking $5.6 Million (55 x 120 corner lot) since it also has a “laneway cottage” and 3 bedroom basement suite as mortgage helpers. If I had $5.6 million, I sure as hell wouldn’t buy a house with rental accommodation as a mortgage helper.

Our family spent Thanksgiving trying to convince my niece and nephew (late 20’s, early 30’s) that if they want to have families Vancouver, and BC in general, is not the place to live. The cost of living here has just become too expensive for young families.

One final note – my extended family (mostly professionals) after much discussion on Thanksgiving concluded that most of the responsibility for the huge price bubble here in Vancouver should be placed squarely on the head of BC’s Liberal government. For the past ten years it spent billions of dollars promoting BC and Vancouver for the Olympics as “the best place on Earth”, and insisting that the world would want to come to live here after the Olympics because all this spending was for “economic development”. After BC and Vancouver City spent all this money, maybe 2500 high tech jobs have been created here. $10 billion spent, 2500 jobs – that’s $20 million of tax money for each new job created. Meanwhile, the $1 Billion Olympic Village is still only partially occupied. And the Province and the City have to raise taxes.

Some financial wizards they turned out to be. And why should anyone believe their predictions for future growth?

#51 West Coast Woman on 10.10.11 at 9:40 pm

Sorry – in the second to last paragraph I meant to say $5 billion (their lowball estimate), 2500 jobs – that’s $20 million of tax money for each new job created.

#52 Mr.Lee on 10.10.11 at 9:40 pm

Much has been said on this blog about the housing bubble, interest rates and the like. I think these issues to be secondary when one examines the amount of debt that has been incurred by Canadians. Over the last ten years liberal monetary policy has facility the growth in the home industry and with it price inflation. Instead of paying down debt due to favourable rates, Canadians gorged themselves on debt treating it like a second income if you will. We are now at a juncture that Canadians owe anywhere from 147 to 155 dollars of debt to income depending on the source. This debt servicing, no matter how low interest rates are, sets the stage to shrink economic growth including that of housing. Debt is serviced in after tax dollars as are all house hold expenditures. This does not include the various sales taxes and property taxes that are levied on households as well. Now couple this with increases in headline inflation on food and groceries, it does not take a Phd. In Economics for figure out that people by and large are over extended. We as a country have been fed by the Presstitutes and Prostiticians that our secure and conservative demeanour saved us from the same financial oblivion that took place in the US. This may be accurate to a point, but fails to explain how an increase in debt load will keep us sliding into some sort of financial reality check. All assets go up and down in value but debt stays, as Mr. Carney stated some time ago. All assets classes regress to the mean which has been true in any market over time. The question is will the Canadian economy be able to absorb these realities when they become apparent.

#53 InvestorsFriend (Shawn Allen) on 10.10.11 at 9:42 pm

BULLDOSE Houses?

Unless the houses are condemned that is one DOSY idea. It is well known in economics that a useful way to stimulate the economy is NOT to break all the windows in town to give the glass company jobs fixing the windows.

If they want to Bulldoze some old slums that might be okay. But to bulldoze newer homes is moronic.

Anyhow, we are past the bottom for house prices in the U.S. They have actually risen in price the last four month straight according to the Case Shiller index.

Actually it’s great that so many people including politicians are so incredibly ignorant about economics and investing. The smarter investors need SOMEONE to beat in the market after all.

90% of people seem to figure that what has been going up will go forever and what has gone down will go down for ever. They recognise neither bubbles nor screaming bargains. Garth covered this a week or two ago.

#54 Ben on 10.10.11 at 9:44 pm

“The new symbol of Canada is a particle board box covered in face brick with a double garage door on the front.”

———————————————————

Out west it’s a two story particle board box covered in vinyl siding with a 4 ft tree planted out front for blocks and blocks and more blocks.

#55 timo on 10.10.11 at 10:14 pm

http://www.theatlanticwire.com/politics/2011/10/go-ahead-and-beat-your-wife-and-other-dumb-budget-cuts/43458/

You know a state is broke and the world has gone to sh%t when wife-beaters are released due to budget constraints .

In Texas they laid off all the police force for 6 months.

have a laugh and a cry ;)

#56 S on 10.10.11 at 10:24 pm

I think it makes more sense to rent at the moment. By the time you look at the carrying costs of the mortgage, condo fees, and taxes the landlord is likely only earning 2 or 3% return on investment.

The landlord would be making a better investment by putting the money into an REIT or preferred shares.

I agree with Garth about the speculators. There are loads of units looking for renters. I believe the prices they are listing on MLS are soft and can be bargained down if you have a decent job and a good credit score.

Definitely a renters market.

#57 Stinky the Fish on 10.10.11 at 10:24 pm

Let’s get ready to VULTURE!!!

#58 FrankRizzo on 10.10.11 at 10:45 pm

Excellent try #6 Rainbird. Did you sleep through the riots a mere 4 months ago? Does being the break-in capital of Canada not qualify on your list of actual crimes? Perhaps you should also look at the per capita murder rate in your fine city. If making up lame reasons for why Vancouver is “different” helps people sleep at night under their weight of debt……then fill yer boots. As soon as the immigrants realize it doesnt rain 165 days a year in the rest of Canada they will wise up and move East.

#59 Samuel on 10.10.11 at 11:15 pm

Read the piece about Steve keen’s theories in today’s Guardian. Well worth your time.

#60 Toon Town Boomer on 10.10.11 at 11:15 pm

This must be the guy that Brad Wall & Jim Flaherty went to for advice on what to tell the people. Brad Wall you tell them debt is going down in Saskatchewan and Jim Flaherty you tell Canadians there is no housing bubble. I think we’s in big trouble folks.

#61 Ronaldo on 10.10.11 at 11:16 pm

#38 – Westernman – and all of these things are being discussed at a Tim Hortons near you by the same groups that meet there each morning for a 2 hour coffee break while complaining about our politicians, their OAS clawbacks and the rising cost of prescription drugs.

#62 Nostradamus Le Mad Vlad on 10.10.11 at 11:20 pm


Medical Alert — Remember this the next time you have major surgery and need a blood transfusion!! This is good to know!

MEDICAL RESEARCH

Australian Medical Association researchers have found that patients needing blood transfusions may benefit from receiving chicken blood rather than human blood.

It tends to make the men cocky and the women lay better . . . Just thought you’d like to know.

BLESSED ARE THOSE WHO ARE CRACKED,
FOR THEY ARE THE ONES WHO LET IN THE LIGHT!

OK, going back to my room now.
*
Big Ben has the bends. Now we know that Britain is barmy! Also — 0:50 clipPart of a cliff collapsed into the sea today in Cornwall, England trying to imitate the western economy, and a remarkably good job it did.
*
Two min. clip Geraldo outta Wall St.; Cushy Jobs NYPD on banxters’ payroll; Keynes gibberish Legislating this into that; Ben & Jerry’s Which flavor to support protesters? Obomba is doing a much better at destroying jobs than OWS; 1:30 clip Welfare credit cards have resulted in a parasite class, and Karl Marx Soros and Obummer follow Marx’s works.

At last! UK admits green fees are simply a tax on the middle- to low-class, so GW is a scam; China Wot say China deliberately defaults first, then slamdunks te US with its IOU’s? All possibilities exist, no matter how wacky they are (then Russia and Japan can join the game as well); PortuGreece Same shit, new day and BoE Complete reject; Bank Transfer Day Transferring to whom?

Tokyo Taking in more radiation, and Strontium 90 also dispensing; Japan Free holidays, but who wants to go? 5:04 clip Every continent except Antarctica; Too warm there for OWS; 4:48 clip The US govt. or Muslims — who is the enemy? History can be a real drag; Libyan Obscenities Not a single UK life lost, but the Brits. bombed the hell out of Libya; Odamner “This will be Obama’s Iran-Contra.” wrh.com. BTW, where is Ollie North? Bombing others? How the m$m uses diversionary tactics; Topeka, Kansas not prosecuting domestic violence any more.

Advice From A Globalist “We have to Protect and Manage Our Liquid Assets, otherwise our Floodwaters will Destroy our Nation’s Security & Economy!”; Occupy Diff’rent (COINTELPRO) POV; Canaries News; A Decade (or more) of bitter winters.

#63 Aussie Roy on 10.10.11 at 11:42 pm

Aussie Update

For almost a quarter of a century, successive Australian governments have, with varying degrees of enthusiasm, sought to promote higher levels of participation in employment, and higher levels of personal saving.

These are both worthy objectives, ones which public policy should seek to promote. It’s therefore surprising that successive governments have not merely been content to maintain a tax system that taxes income from working and saving at higher rates than those at which it taxes income from borrowing and speculating,

http://www.theage.com.au/business/time-to-axe-negative-gearing-20110424-1dsxs.html#ixzz1aROsPb6P

Housing affordability, the debate we need to have.

Housing affordability was different. The forum kept coming back in different sessions to have another kick at different sides of the great grey mass that’s damaging our economy and people.

Promising article until the end, the fix, build smaller houses – LOL.

http://www.smh.com.au/business/housing-affordability-the-summit-we-really-need-20111011-1licm.html#ixzz1aRPUeAol

#64 Tri State Pat on 10.10.11 at 11:43 pm

The usual well documented info on real estate in Canada
at

http://www.chpc.biz/

Plunge-o-meter website charts what matters to all of us…

#65 Holmes on Homes on 10.10.11 at 11:47 pm

Knock up post again tonight Garth. You seem to come back from the weekends recharged. I look forward to tomorrow and Wednesday before we slip back to zzzzzzzz…. bonds. I know they are important but that’s the boring part of the GarthPlan ™.

Oh and one correction tonight: Houses are built of chip board, not particle board. Ikea furniture is made of particle board, and cabinets and basically all “flat packed” furniture (although I have seen some jointed pine), and the base for Arborite counter tops, and those boards you can hang in the garage and put little hooks in all the holes so you can hang your pliers right where you can see them. But houses are made of chip board, which has much larger woodchips compressed and hot-glued together. Both completely self destruct if exposed to water for any length of time, and both go up like a roman candle if exposed to flames, but chip board is much stronger.

Most wood beams are made the same way as chip board, but much thicker.

Flooring is still often t&g plywood, especially if you want to put down tile in which case you need ¾” t&g overlaid with glued ½ ply, overlapping the joints. That plastic stuff they sell doesn’t work and all the grout will fail wherever there is a lot of traffic. That particle board that they put under lino also isn’t good under tile. You have to take it up and glue down ½” plywood.

#66 Maya on 10.11.11 at 12:01 am

I knew a young couple from china and their parent’s moved their money into Canada and bought them a 1.5million house. According to this young couple’s income in Canada, they can never afford it. I don’t think this case unique, so go figure, when the ham stops, the market may return normal.

#67 Carp on 10.11.11 at 12:13 am

In my 12 years living in Vancouver, I witnessed 2 shootings (blood and all), 5 police squad raids and plenty of (hard) drug trade looking out my window in a upscale Yaletown condo or from my house on nice street in Richmond … Hence, when I started a family and my 2 years old mentioned the “bad” boy on the street, we moved to Ottawa. Rainbird – you don’t look outside much.

#68 Occupy Everything on 10.11.11 at 12:39 am

http://kunstler.com/blog/2011/10/occupy-everything.html

Kunstler is a doomer by Garth’s way of thinking, and he is usually very “out there”. But he makes a good point in noticing how the MSN and the media are attacking OWS for not having a clear agenda, when neither do the regulatory bodies or the government. If we haven’t seen enough malfeasance from the big banks yet to proceed with criminal trials, what’s it going to take? Do they have to start sacrificing our virgin daughters before we finally get upset?

Normally I am opposed to government at all but the local level and even there the should be afraid of the populous. But if we are going to have one, they should enforce the law. Or even there should at least be an agreed upon law everyone, even bankers, have to subscribe too.

Withdraw your money from the banks as best you can! They are criminals, unprosecuted by the government, but OWS is coming for them.

#69 bsallergy on 10.11.11 at 12:46 am

There I was this spring at Charles DeGaulle Airport waiting for a flight back to Canada. Nice young man started chatting with me about how excited he was to have spent some time in Paris and what a cool city Paris was. “So where are you from” I asked. “Toronto” he replied. “Well at least you now know what a ‘World Class City is'” I replied. He didn’t see the humour in the remark.

#70 Waterloo Resident on 10.11.11 at 12:47 am

Garth, you said: ( ” But only the puerile among us believe nothing will. ” )

Well, I guess I am ‘the puerile’, because it is my firm belief that our housing market is “sticky”, or in other words, our house prices go up BUT THEY DON’T COME DOWN.

I don’t know WHY Canadian home prices are like that, they just ARE.

Yes, the ‘AVERAGE’ price in a city might come down, that is due to the fact that more of the smaller houses might be selling at any one time, but when you take a look at the price of each home individually you will see that NOT ONE of those homes in Canada ever mark their prices down very much, maybe a little bit but not by more than 1 or 2%, and NEVER under what they were purchased for, never.

#71 Van guy waiting on 10.11.11 at 1:00 am

I’ve waited and waited for a Vancouver correction. I’ll never get in now. The market here doesn’t look better for the bears. Inventory is still low for Van & BBY. No crash yet. I’m still waiting because I’m listening to you Garth

#72 new Era on 10.11.11 at 1:04 am

I watched an interview of someone from CREA.
He mention that there is roughly 2% of the money coming from HAM.

Basically Canadians are driving the prices up not foriegners. I wonder if the people on this board can do an assessment of their friends.

– Personally I have 0 real estate, sold house and a townhouse in the past couple of years.

1 – friend who owns 2 house, but has one on the market for the past 3 months

3 – friends who own 2+ houses and are trying to sell one or two

4 friends who owns 1 house but live with their parents.
(YES GARTH your favorite, you must be steaming)

5 friends who owns several condos with one or more vacant at the moment

9 friend who own one condo or house and living in it

#73 Waterloo Resident on 10.11.11 at 1:14 am

Let me explain a few things to everyone here.
– first: I rent a house, and no, I don’t work in Real Estate.

– 2nd: Home prices go up because of LEVERAGE. People put down 5% and borrow the OTHER 95%, that is why home prices go up 20% to 50% per year.

– 3rd: Stocks WILL NOT go up as fast a home price go up because you cannot put down 5% on an investment and borrow the other 95%, I think the most an ordinary investor can borrow is 50% maximum.

So if an investor has $50,000 he can borrow $950,000 for a $1,000,000 home. If that home goes up 20% then he’s made $200,000 or he’s multiplied his investment 4-TIMES !

Now lets say the same investor buys a mutual fund / ETF for $50,000 and it goes up 20%. He’s made $10,000 from his investment.

Now tell me, if you give an investor a choice to earn a $200,000 profit from buying a home, or a $10,000 profit from buying an ETF, which one do you think he will choose?

We have CMHC (Canadian mortgage and housing corporation), that is why home buyers can borrow 95%. What Canadians need is the ‘CMIC’ (Canadian MARGIN and INVESTMENT corporation ), this entity would allow Canadians to put down as little as 5% for a stock investment and borrow the other 95%, ,just like they have done with houses throughout the land.

#74 from kits on 10.11.11 at 1:31 am

we are looking at selling our place and I’ve been talking with good friends on this topic and asking the question…

“why will real estate keep going up”

Answers:
the central bank will never raise rates fast enough to wipe out real estate because they know what will happen
because real estate always goes up

I’m liking that I’m getting answers that don’t make any sense but damn it takes some courage to sell and start renting! real courage to start thinking about your house in terms of profit and loss in order to purge debt.

honestly scary stuff for anyone who hasn’t seriously considered it.

#75 Aaron - Melbourne on 10.11.11 at 1:56 am

From Oz

http://www.theage.com.au/business/housing-affordability-the-summit-we-really-need-20111011-1licm.html

#76 Peter on 10.11.11 at 2:24 am

Garth interest rates don’t seem to be going up. Do you figure a major re correction even if interest rates do not go up?

#77 Onthesidelines on 10.11.11 at 3:04 am

@16 Vlad “A good thing this cycle is coming to its conclusion shortly. ”

Don’t bet on it, buddy. This time it might just be different. Joe Nocera points to a pretty good argument why.

http://www.nytimes.com/2011/10/11/opinion/this-time-it-really-is-different.html?_r=1&ref=global-home

BTW…much enjoy the links, Vlad. Thanks

#78 Bogdan on 10.11.11 at 3:08 am

We have a higher ownership rate now than America did at the bubbliest moment. Theirs topped at 68%, and ours is 70%. They built 29% too many houses. We built 41% too many.
There is a very simple explanation to this: Canada’s population density per square mile is 9 times lower than USA’s. This means that we can go as high as 630% home ownership :-)

#79 Aussie Roy on 10.11.11 at 4:29 am

Aussie Update

Negative gearing neads to go, and it should.

One area where this was particularly apparent was negative gearing, where the only people who strongly argued against its withdrawal were property industry lobby groups, most of whom provided no empirical evidence for their assertions.

Meanwhile, former ANZ chief economist and now Grattan Institute productivity research director Saul Eslake tore apart the arguments in favour of retaining negative gearing using that increasingly rare commodity in policy debate – facts.

He pointed out that 92 per cent of properties on which negative gearing is claimed are existing properties, not newly-built ones, meaning that any contribution to the level of housing supply from the policy is clearly negligible, particularly given its $4.5 billion cost.

Kinda funny Saul leaves the ANZ bank and picks up several IQ points – Good on ya Saul.

http://www.abc.net.au/news/2011-10-10/janda-lets-talk-about-tax/3457964

If negative gearing IS phased out, bank profits will collapse, RE is over 50% of all loans. Is this why the ANZ bank are doing this?.

ANZ Bank has taken a knife to the pay of more than 900 of its top executives to combat tough trading conditions.

http://www.news.com.au/business/anz-freezes-pay-for-its-top-executives/story-e6frfm1i-1226163711590#ixzz1aSZ5cr37

#80 plain_janey on 10.11.11 at 4:31 am

“the monotonous, textureless burbs surrounding the GTA – Milton, Burlington, Woodbidge, Ajax, Whitby or beyond. Where thousands of acres of farmland existed a decade ago are now hundreds of thousands of suburban houses, arterial roads and vast parking lots erupting in Best Buy, Winners, Home Depot and Staples stores.”

I hate to admit it but in some small measure I helped contribute to that, working summers in university for various surveying companies who catered almost solely to housing developers such as Matt-Amy & the like. I remember hating those plastic, soul less subdivisions even then and couldn’t figure out who the hell was buying all the houses! Garth’s post finally explains who, but it’s not a good situation. That, and the fact that modern residential architecture in Canada is a complete and utter failure.

#81 big T on 10.11.11 at 4:38 am

please help, what is a “HAM”

#82 I'm stupid on 10.11.11 at 5:11 am

Sorry, iPhone fills in words. I didn’t bother checking.

#83 House on 10.11.11 at 6:52 am

So that’s it your an economist! We have 70% home ownership for the population, but 100% home ownerdhip for the additional population. This is the same kind of reasoning economists use. Faulty! Do we know how you got the 70% and if it is even close? Do you assume that the household size is the same in both countries? Economic data is all ESTIMATES and can rarely be relied upon.

#84 penpal on 10.11.11 at 7:12 am

@ # 57 S

There is a return on investment alright and it’s a NEGATIVE RETURN!

The landlord is LOSING money every month.

Can no one in Canada do math any more?

#85 penpal on 10.11.11 at 7:20 am

@ #71 bsallergy

A man (woman?) after my own heart.

You gave me a chuckle this morning.

Thanks.

#86 penpal on 10.11.11 at 7:25 am

@ # 72 and # 75 Waterloo Resident

First, I sincerely hope that you are not managing your own money.

Secondly, do you have a reading comprehension problem because your opinions have pretty much been disproved by verifiable facts posted here repeatedly regarding substantial Canadian RE pricing drops such as Calgary, Edmonton, etc.?

Thirdly, do you have a drinking problem? Just asking…

#87 Susan from London area on 10.11.11 at 7:32 am

I wonder if free trade hit us Canadians hard over the past 15 years or so, and we have recupperated, somewhat from an industrial nation to more of a service oriented economy. The Americans are now feeling the full effects of free trade and it will take time for the shifting of employement to happen there too?
Either way is aint easy.

#88 SLN on 10.11.11 at 7:36 am

#76 From Kits…

Sell to start renting scary? As someone who just spent the first weekend in a rental home after 12 years of ownership I can assure you that it was terrifying. I think I held my breath from the time the first prospective buyer came through my door until the last of the boxes was unpacked in the new place.

However, now that we’re in and have had a couple of home cooked meals here I feel FREE! Money’s in the bank waiting for a better investment, we don’t have to think about fixing anything that breaks, and I enjoyed watching all the neighbours spend their long weekend pushing mowers and swinging hammers while I sat on my screened in porch scanning the internet. :)

It really is frightening to do something that the herd isn’t doing because … well because of human nature. if your gut is screaming at you to make this change then do it.. there’s nothing worse than looking back and saying, “I knew I should have.. but I chickened out!”

#89 timo on 10.11.11 at 7:37 am

http://marcfaberchannel.blogspot.com/2011/10/steve-keen-max-keiser-on-occupy-wall.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+MarcFaberBlog+%28Marc+Faber+Blog%29

Steve Keen’s interview on wall street and de-leveraging.

#90 Waterloo Resident on 10.11.11 at 7:52 am

#83: Big T

‘HAM’ is the term for ‘Hot Asian Money’, its all those tens of thousands of Chinese coming over from China and buying houses here in Canada because they think we offer a better investment alternative than exists back in overpriced China.

And a large chunk of that money coming over here is money that was scammed out of the Chinese economy illegally, so they want to get the money out of China before they get assassinated or put into jail back home in China

#91 Moneta on 10.11.11 at 8:26 am

Occupy Everything on 10.11.11 at 12:39 am
——
I am really fascinated by the whole thing. People really are clueless.

Some think they deserve every penny they got never once wondering if the industry they work in was subsidized in some sort of way.

Then you have others who judge everyone around them as lazy bums… if everyone was just like them the world would be a much better place. Never realizing that if everyone was exactly like them, chanes are they would not have a job because everyone would be competing for the same job and wanting to stand in the same exact same spot on which they are standing.

We also have the top 5-10% who don’t understand why the other 90% are complaining and refuse to budge. Life is perfect, what is wrong with them?

The exact same dynamics played out in France during the Revolution. Louis XVI was advised to listen to the people. He addressed and warned the nobility which refused to budge. And the rest is history. Unfortunately, the poor got poorer.

It looks like the same thing is happening today. The rich are clueless and refusing to budge and I guess time will tell how much rhyming we will get.

#92 Moneta on 10.11.11 at 8:29 am

House on 10.11.11 at 6:52 am
Do you assume that the household size is the same in both countries? Economic data is all ESTIMATES and can rarely be relied upon
——–
Ya! Why bother planning for anything since there is no data we can really count on. LOL!

#93 timo on 10.11.11 at 8:31 am

http://www.sun-sentinel.com/business/os-foreclosure-squatting-20111010,0,5332715.story?page=1

A housing bubble that lets a 72 year old carry a $200k mortgage? Add to the fact it takes 550 days to actually foreclose.

Florida is just a mess.

#94 fancy_pants on 10.11.11 at 8:46 am

History has revealed that every man-made object or scheme eventually deteriorates or fails over time.

Pick a scheme, it will fail. RE prices, world financial system, bailouts, Dalton M …etc

Through myopic lenses we just need to wait a little longer. Through lenses of reasoning we are already there.

#95 APM on 10.11.11 at 8:58 am

@ 82 Plain_janey

I agree with your observation. I commented earlier that the urban planning profession has failed in these areas. For the most part these subdivisions are driven by the developers who have substantial influence. The planning profession has not made any substantive effort to advance some of their core principles into subdivision design.

#96 Incubus on 10.11.11 at 9:00 am

I think you should add Montreal to list of condomania cities. Montreal, is the third city in north america where they build condo like crazy.

“Le boom du condo neuf viendra sans aucun doute gonfler l’offre au cours des trois ou quatre prochaines années. La région métropolitaine a enregistré un record de mises en chantier de copropriétés l’an dernier – 10 457- , au point où elle devenue le troisième marché le plus actif en Amérique du Nord, derrière Toronto et Houston. Des milliers d’autres mises en chantier ont été annoncées ces derniers mois.”

http://lapresseaffaires.cyberpresse.ca/economie/immobilier/201109/15/01-4447820-montreal-immobilier-le-condo-comme-locomotive.php

#97 young & foolish on 10.11.11 at 9:21 am

“In the long run, we’re all dead” – John Kaynes

But in the short run, it’s obvious; housing is over-invested and the economy is stagnant. Who can really afford to pay more? At the most basic level, it’s just a bad bet. If you are an aspiring home owner, just wait on the sidelines and you will likely have more housing to choose from at lower prices in the future.
Rents are going nowhere (if not lower), while equities and REITs continue to spin off reasonable rates.

What’s the hurry?

BTW, Garth is correct about all those “investment” condos in the GTA. Many of my colleagues at work live in the newer towers and many have been able to renegotiate more favourable rents when the leases come up for renewal.

#98 live within your means on 10.11.11 at 9:24 am

#57 S on 10.10.11 at 10:24 pm

I agree with Garth about the speculators. There are loads of units looking for renters. I believe the prices they are listing on MLS are soft and can be bargained down if you have a decent job and a good credit score.

Definitely a renters market.
……………………………

A friend of mine in her late 60’s has been living in a small 1 bed apt for 25 years. She recently rec’d notice that her rent was to increase by $130./mo. She bargained it down to a $50./mo increase.

#99 Moneta on 10.11.11 at 9:27 am

@82 Plain_janey

I agree with your observation. I commented earlier that the urban planning profession has failed in these areas. For the most part these subdivisions are driven by the developers who have substantial influence
———–
You also have buyers who buy based on their dream life and not their reality.

I still dream of a house, 1800 square feet or less with a mud room that connects to the garage, the entrance and the powder room/laundry area.

For some reason, Canadians need 3 living rooms and don’t have a winter.

#100 Kris D. on 10.11.11 at 9:30 am

Cdn workers have been using the NAFTA visa for a couple of decades now, to get better paying jobs south of the border. If the Americans run into serious financial mess leading to social unrest, what prevents the reverse of that syndrome (thousands of Americans deciding the True North is where they wanna be)? I imagine it’s easier for Americans to immigrate (or at least relocate) to Canada, than for Asians/etc.

#101 BROE on 10.11.11 at 9:30 am

Some interesting stuff going on on the Comox Valley, BC Craigslist under house rentals. Shouting match between landlords and tenants over the “rising” cost of rent. Anybody else see this in their local Craigslist?

I say “rising” because I don’t think rent is actually rising, but rather that some financially illiterate landlords have finally landlords have finally done some math. The lights went on and they now realize that that the investment properties that they purchased (the excess housing that GT mentions in this blog) are actually millstones and are trying to get unrealistic rents to cover their poor investment choices.

Unfortunately, the economy out here is so slow that people can’t afford what the aspiring landlords want to charge.

This is just another step in the painful process of people realizing that their RE investment is crapping out. The would-be landlords over-paid and over-extended and now they feel that someone else should be obliged to bail them out of trouble and are angry rude and obnoxious when no-one rides in to save them.

Unfortunately for the would-be landlords, repos are in their future. They were in greedy and indenial while house prices dropped out here and kept asking too much. Now they’re repeating the same mistake by pricing themselves out of the rental market.

Next stop, BROE- the Best Repos ON Earth.

#102 Aussie Roy on 10.11.11 at 9:33 am

Aussie Update

The good news is, it looks like Australia’s great housing boom is over, and while the bubble hasn’t burst, the Australian property market has certainly had a case of the winter blues. Clearance rates are down across the country from about 75% this time last year, to average of about 54% this year. Traditionally, Spring is the busy season for realtors, as every Tom, Dick and Harry puts their home on the market, with their gardens looking their best. But so far, clearance rates have failed to pick up as we enter our third week of Spring. It means real estate agents are just collecting a backlog of homes they can’t sell.

By my calculations, this means that the old argument that an under-supply of housing is driving up Aussie house prices, is outdated, and few people these days are buying it. It’s basic economics; the longer supply is higher than demand, the more you’re going to see house prices drop.

Of course, real estate agents are the masters of spin and many have begun claiming it’s become a buyer’s market, in the hope of convincing you, now is the right time to invest. Never mind the fact you’d be investing in a depreciating asset, or that interest rates aren’t going down as once hoped. Real estate agents still expect you to happily hand over half a million clams for some dilapidated hovel, I wouldn’t even let my mother live in.

http://7pmproject.com.au/property-pogs.htm

#103 ris ames on 10.11.11 at 9:39 am

Ireland over build 2 and they’re doing just fine right.
right.

#104 The American on 10.11.11 at 9:46 am

At #4: Felix Set, sure you can get out…. if you want to. So list your condo below assessed value. Easy as pie.

#105 The American on 10.11.11 at 9:56 am

At #6: Rain Bird, you are kidding, right? Americans prefer to think of it as a little thing called “having standards.” We don’t agree that anyone and everyone should just automatically receive citizenship because he/she has the money to buy his/her way into it by means of investing in real estate. Seriously, how crazy is that! Why not make it an investment into a Dairy Queen, or a Best Buy for that matter?!? It makes no sense whatsoever. That’s very lame, actually, to operate in that sort of a fashion. If you want citizenship as an American, you work for it, rich or poor, and you take the same tests and checks as everyone else. Also, to call Vancouver “practically crime free” is a hugely laughable statement. Nothing could be further from the truth. The reason Asian money is attracted to Vancouver is because there are NO standards. EVERYONE I KNOW AND THEN SOME WOULD AGREE. Its easy and cheesy for them to set up shop, not intertwine with the local cultures and customs (other than their own), and frankly hide the dirty money the Chinese government is giving them to bury, and disappear. This is precisely what is happening in Vancouver. Is that what you really want in your own back yard? By all means, please keep it there! You’re delusional if you honestly believe Vancouver was a first-pick choice, apart from the fact anyone can hide cash there.

#106 SLN on 10.11.11 at 10:01 am

#103 BROE
Yes! I have seen three or four ‘shouting matches’ on Kijiji in my Eastern Ontario city – rents way too high, properties in disrepair… We found a decent place but it truly was a struggle. My city has two large post-secondary institutions, though, so landlords have always gotten away with murder here.

I do concur with the rest of your post, though. I think you hit it on the head and and I’m still renting in a year I will bet that I will be able to negotiate the price down at that time.

#107 Young Old Fart on 10.11.11 at 10:02 am

People whining because they “listened to Garth” and missed the market. …

People whining about the state of health care…

You didn’t miss the market. If you are planning long term, buy within your means and live your life. If you are planning to buy for investment? Too late….kinda….

I am in South America concluding some business that is 15 years in the making. I bought a big piece of land outside of the city 15 years ago for 50k. Over time the city built out and around my land until recently a developer came and made an offer which I accepted. The offer was such that I could buy 3 Vancouver crack houses with the money. ;)

The developer paid big $$$$ but will make money his investment…..

Yes real estate has it’s ups and downs but if you are patient, it is always up down the road. People thought I was nuts to pay 50k for bushland……

Health care, in Canada it is a joke. While down here the wife and I always do full check ups. In fact, I had an endoscopy done this morning. Made the appointment last Thursday, went in today, paid $150.00 and walked out with results in my hand. NO WAITING!!

The smartest thing Canada could do is give the option for private health care to those that want it. You can keep the shitty system in place, you know, the ” free” one, and let those that want it, pay for private. Then again, it is easier to fly south where the quality FAR surpasses anything in Canada. Oh I mean south, beyond the USA.

The biggest problem people have in North America is they do not look much past their back yards.

Then I have to laugh at the future So called “vultures”.

If you are waiting for a crash to find deals in real estate then you are on a losing streak already. There are a ton of deals out there if you looked beyond your backyard.

There is a lot of mention that the gap between the haves and have nots is widening. No shit Batman, that is because the have nots are stupid and make wrong choices. 25 years ago I was living off Ichiban noodles and KD and saving while my buddies were buying Vette’s and ski boats.

Today I can drop $300.00 at Morten’s and drive a super car and have not a DIME of debt.

At the end of it all, who helped me? Nobody.

Which is why I am amazed that a guy like Garth gives the advice away free on his blog as he does. People that hire him as an advisor would move into the smart column immediately.

Finally, to those that rant over one specific asset, be it RE, gold, beans, whatever… If you are in only one asset, you are in the retarded column.

I have RE and gold. I also hold stocks, bonds, cash, GIC’s. I believe in a lot of baskets, but maybe that is just me…

Remember, only YOU cares for YOU….

#108 BPOE on 10.11.11 at 10:28 am

USA is a crime ridden has been Country. Canada and Vancouver is particular is what the world wants! Americans are poorly paid. Folks, what you see on tv land is not the true USA. It is a country of extreme poverty. Of course we have higher rates of ownership – better jobs – Natural Resources which America continues to steal – Everyone wants to live here
____________________________________________
We have a higher ownership rate now than America did at the bubbliest moment

#109 BPOE on 10.11.11 at 10:32 am

Ever heard of a successful long term renter?(cue cricket sounds)
Renters are always at the mercy of the owners. Do you want to spend your entire adult life on your knees begging to please not raise my rent. Please forgive a sinner for renting and not buying?
****************************************
BROE on 10.11.11 at 9:30 am
Some interesting stuff going on on the Comox Valley, BC Craigslist under house rentals. Shouting match between landlords and tenants over the “rising” cost of rent. Anybody else see this in their local Craigslist?

#110 Nemesis on 10.11.11 at 10:37 am

Picture of the day… (Chicken jokes, Nostra? I’ll raise you an ostriche).

I could be wrong about this, but it certainly looks like a contender for a future GreaterFool leader illustration.

http://tinyurl.com/3neroxs

#111 BPOE on 10.11.11 at 10:38 am

The American running scared again. Something is happening and you don’t know what it is – do you Mr American. Canada will never disallow foreign ownership. In fact its going to get even easier in the coming future. Man up and admit – the world has no interest in your real estate that’s why its bargain basement. It’s called supply and demand!
*********************************************
The American on 10.11.11 at 9:56 am
At #6: Rain Bird, you are kidding, right? Americans prefer to think of it as a little thing called “having standards.” We don’t agree that anyone and everyone should just automatically receive citizenship because he/she has the money to buy his/her way into it by means of investing in real estate.

#112 Dad on 10.11.11 at 10:42 am

Re Young Old Fart: You say that now, being wealthy (150 endoscopies aren’t pocket change for everyone). But I’ll take Universal Health Care over denial of coverage for preexisting conditions and recission.

#113 bill on 10.11.11 at 10:53 am

just saw a neon sign in a window of a house on the northwest corner of tranquille and holt in kamloops.
RENT TO OWN …
thought it was a neon beer sign but no …
Kamloops is a tad overbuilt as well which I suppose is not exactly news around this blog.

#114 Daisy Mae on 10.11.11 at 11:09 am

Westernman: “Yes, indeed – have no fear Canadians are right on the case.”

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

Amazing, isn’t it?

#115 Van guy waiting on 10.11.11 at 11:11 am

There is no %50 off for condos in Kelowna. Where is this sale? I’d like to buy one.

#116 Mister Obvious on 10.11.11 at 11:12 am

#012 Kris D

…what prevents the reverse of that syndrome (thousands of Americans deciding the True North is where they wanna be)?

You’ve got to be kidding.

#117 pessimist on 10.11.11 at 11:18 am

USA is a crime ridden has been Country. Canada and Vancouver is particular is what the world wants! Americans are poorly paid. Folks, what you see on tv land is not the true USA. It is a country of extreme poverty. Of course we have higher rates of ownership – better jobs – Natural Resources which America continues to steal – Everyone wants to live here

Hahahahahaha….

Whatta maroon.

There are pockets in the US where there is higher than average crime. The vast majority of US cities are far safer than say Toronto or Vancouver.

Americans are NOT poorly paid. I lived for four years in the US and gained an immediate 400% (not a typo) raise in pay. I still work for a US company (live in Canada) and due to the higher US salaries, I am still paid about 400% more than my fellow countrymen in similar jobs.

There certainly are NOT better jobs in Canada. There may be some, but let me tell you, with a Ph.D. in Electrical Engineering, I gave up after 200+ applications to Canadian companies paying little more than minimum wage. After 2 applications to US companies, I had a solid offer that I received.

Despite your greatest hopes, Canada is not in a better situation real estate-wise. We’re just operating under a lag. Any single defence as to how “it’s different here” is totally wrong.

It’s not different here.

#118 sam.i.am on 10.11.11 at 11:18 am

#102 NAFTA Visa – TN

Do some research on the TN visa. Only certain professions qualify and in general, there are still plenty of jobs for those folks in the US. I have used a TN in the past to go from Can->US. It sounds simple to pack up and move cross-border (either direction) but there are all sorts of risks. Only a very small percentage of the overall population will be in a position to actually make such a move. The US unemployment situation is not as bad as the media makes it sound. Anyone remember Canada’s unemployment situation in the early 90’s? THAT was bad.

#119 Daisy Mae on 10.11.11 at 11:18 am

45north on 10.10.11 at 9:21 pm Bill Gable: I just got back from SW USA

The anger is palpable.

Phoenix and Scottsdale were, in a word, a world upside down, and there’s a War going on just over the Border in Mexico.

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

Daisy Mae: Everyone I talk to is oblivious….

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

Not my daughter-in-law. She lives in New York City. She is shocked that owners have destroyed their houses out of anger with the banks.

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

CANADIANS are oblivious.
Certainly not the Americans.

#120 The American on 10.11.11 at 11:29 am

BPOE, The U.S. income per capita exceeds that of Canada’s. Would that make Canadians dirt poor?
http://www.conferenceboard.ca/hcp/details/economy/income-per-capita.aspx

Oh, and the average Canadian has more debt than the average American. That only adds insult to injury. Sorry, but you loose on this one too. Poor 16th BPOE.

As for “stealing” your resources, last time I checked it is the Canadian government begging to build the pipeline with shit oil to the U.S.

As for “better jobs” in Canada, Canadians come to the U.S. for jobs in much greater quantity per capita than Americans going to Canada. That speaks for itself.

Not everyone wants to live there. Trust me. Your government would have you believe it to make you feel better about the ass-rogering you’re about to receive (and already are incurring in many markets) in the real estate market. Enjoy! :-)

#121 Kilby on 10.11.11 at 11:32 am

Took a BC Ferry from Vancouver to Nanaimo yesterday. Their was a couple in their early 40’s from Fresno, California going to Tofino for whale watching. When they found I lived in Vancouver they asked about “houses selling for a million dollars” and if I thought it was a bubble ready to crash…He is a contractor, she a nurse. They bought their house 5 years ago for $263,000 and said that it was now valued at $130,000 and that they were going to walk away from it. They really couldn’t grasp our prices.

#122 Renting in leaside on 10.11.11 at 11:36 am

10 Years ago we had Steve Jobs, Bob Hope and Johnny Cash.
Now we have no Jobs, no Hope and No Cash.

#123 Fady on 10.11.11 at 11:41 am

Hello Garth

I love the statistics that you use to back up your arguments. I’ve just read an article on the Financial Post website, I don’t know how they allow such misleading articles to be published for the masses to read!

Could you read it (link bellow) and give any thoughts about this?

http://business.financialpost.com/2011/10/11/canadas-home-building-steams-ahead/

#124 The American on 10.11.11 at 11:43 am

BPOE, rising income inequality undermines Canadian success

http://www2.canada.com/story.html?id=5098343

http://www.oecd.org/dataoecd/44/48/41525292.pdf

The chasm of income inequality is increasing at a faster pace in Canada than in the United States.
http://www.theglobeandmail.com/report-on-business/economy/economy-lab/daily-mix/income-inequality-rising-quickly-in-canada/article2163938/

http://www.policyalternatives.ca/projects/growing-gap

http://en.wikipedia.org/wiki/Poverty_in_Canada

You’re living in a LALA land. Delusional you are.

#125 disciple on 10.11.11 at 11:47 am

#109 Young old fart… Greetings, welcome to our planet… you never fail to prove to me how much of a dweeb you are. Everything you wrote is dead wrong. Nobody helped you, eh? Please. Save your bull shite for your mommy, or did you skip that whole birth canal thing and just suddenly appear on this backwoods as God’s gift from heaven? Do us all a favour, (including yourself according to your disdain for my country) and stay down south where you belong.

When things need fixing, just bail and exploit another country, yeah, thanks, great advice. Just for the record, nobody’s whining but you.

#126 Young Old Fart on 10.11.11 at 12:34 pm

#114 Dad on 10.11.11 at 10:42 am
Re Young Old Fart: You say that now, being wealthy (150 endoscopies aren’t pocket change for everyone). But I’ll take Universal Health Care over denial of coverage for preexisting conditions and recission.
===================================

What I am saying, that nobody is getting, is that when people take the private care, it lessens the load for Universal Health Care.

#127 disciple on 10.11.11 at 11:47 am
#109 Young old fart… Greetings, welcome to our planet… you never fail to prove to me how much of a dweeb you are.

nobody’s whining but you.

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

This coming from a “disciple” that not long ago posted along “christian” lines. Nice to see your true colours. Forgive me if my post sounded like whining, that was definitely not my intent. Here’s some advice (free too) for you. Crawl out of your basement suite and take the time you waste here and find a second job. Take those proceeds and put all of it into a dividend fund and save it. Perhaps in a couple years your financial outlook will help to improve your sad outlook on life.

Cheers.

#127 penpal on 10.11.11 at 12:37 pm

@ # 111 BPOE

“Ever hear of a successful renter?”

Yeah, millions of them blockhead.

In Switzerland , fully 70% of the population rents and last I checked it was really the destination deemed ” the best place to live” and by no less than the rich and ultra-rich you so slavishly are dreaming of catering to.

You are know-nothing dipsh*t and you reinforce this fact every time you post.

Why not waste your miserable delusional life elsewhere.

Question for Garth;

Why is it that you don’t require those with a professional bias (such as RE agents, mortgage brokers,etc.) that post here to declare their profession so that readers can know this, especially when they post from their place of business?

Not asking for their anonymity to be dropped, just the fact that they are in the RE or related business.

I mean, you do criticize the media regularly for such duplicity…. after all

#128 maxx on 10.11.11 at 12:56 pm

#53 Mr.Lee on 10.10.11 at 9:40 pm

Great post.
“…our secure and conservative demeanour saved us from the same financial oblivion that took place in the US. This may be accurate to a point, but fails to explain how an increase in debt load will keep us sliding into some sort of financial reality check. ”

Demeanor more like mass hypnosis. I have never seen and spoken to so many people with money problems due to debt. Two-career couples in their 30’s, 40’s, 50’s and 60’s who should be firmly in the black are up to their armpits in debt. One guy, and I’m not making this up, has taken out an insurance policy on his mother as a guarantee of “inheritance”. One lady in her mid-sixties, who worries incessantly about money has about 10K left on her mortgage and yet spends much of her time shopping. She could easily pay it off in a couple of years if she wanted.

Conservative? Secure? That’s what MSM regurgitates on an almost daily basis, however IMO, that characterization is off by a very long shot.

TPTB diddle daily by blowing gently on their interest-rate levers, engaging in overt and covert QE, massaging media releases, hoping that, with just a little more time , some merry miracle of capitalism will blanket the land with riches and jobs anew.
The endless stream of G-series hand-holding sessions on an almost weekly basis are infertile, yielding nothing but increasingly creative ways to prop up banks that continue to pay obscene bonuses.
Most of all, I believe that these mountainous egos are too afraid to have to admit that the wet dream of homes and mutual fund portfolios for all the little people of the world was a huge error which will cost far more than just money.
Wake up Canada, listen to Garth and get the hell out of debt!

#129 Daisy Mae on 10.11.11 at 1:02 pm

Carp on 10.11.11 at 12:13 am “In my 12 years living in Vancouver, I witnessed 2 shootings (blood and all), 5 police squad raids and plenty of (hard) drug trade looking out my window in a upscale Yaletown condo or from my house on nice street in Richmond … Hence, when I started a family and my 2 years old mentioned the “bad” boy on the street, we moved to Ottawa.”

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

I was born/raised in Vancouver and in the mid-fifties we moved to Cloverdale to get away from the bad element in Vancouver….some things never change? LOL

#130 Daisy Mae on 10.11.11 at 1:07 pm

Waterloo resident: “….you will see that NOT ONE of those homes in Canada ever mark their prices down very much, maybe a little bit but not by more than 1 or 2%, and NEVER under what they were purchased for, never.”

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

Do they ever sell?

#131 Stevenson on 10.11.11 at 1:17 pm

So we have excess supply of housing? Excess supply leads to price drops under normal conditions. That’s interesting so where is this excess supply in Canada because they don’t seem be the high demand metropolitans. Is there excess supply in places like Philadelphia or phoenix? I am sure New York city doesn’t have excess supply of RE. I don’t consider Calgary a as preferable place to live.

BTW the questions doubts peoples mind is why are international investors pouring buckets of money into Canadian RE? If we correlate financial wealth to financial intelligence then these people are not stupid, but through our eyes they may seem stupid. After all we’re the brighter ones waiting a RE crash based on fundamentals of other countries? Unless the world collapses together then of course we are part of the planet and will suffer. At that point we are no different.

Canada has been proven many times to be different and continues to do so. That itself is support as the rest of the world suffers. Continuing to believe the market is going to tank soon is the same as believing Rogers and Bell will lose their oligopoly over communications.

#132 NFN_NLN on 10.11.11 at 1:19 pm

http://www.cbc.ca/news/business/story/2011/10/11/td-study-seniors-household-debt.html

“As well, Canadians aged 45 to 64 and approaching retirement tended to show an above-average tendency to hold debt later in life, suggesting the trend may not be temporary.

One explanation may be that Canadians 65 and over have been tempted by historically low interest rates to buy property.

Investment in real estate by seniors has grown at a faster rate than the average across other age groups, with average holdings doubling since 2002.”

I don’t make this stuff up…

#133 Stevenson on 10.11.11 at 1:25 pm

only one article illustrating how we are okay amid global turmoil while other developed countries are struggling.

Also unless Flaherty is intentionally trying to mislead the public as a government representative. I trust his words as being more responsible and reliable then any post/blogger.

http://www.theglobeandmail.com/report-on-business/economy/housing/canadian-home-prices-resilient-in-third-quarter/article2191563/

http://business.financialpost.com/2011/10/05/no-housing-bubble-flaherty/

#134 Moneta on 10.11.11 at 1:26 pm

Canada Mortgage and Housing Corp. said on Tuesday that starts rose to seasonally adjusted annualized rate of 205,900 units last month. August starts were revised up to 191,900 from 184,700.
——
What’s household formation?

http://www.cmhc-schl.gc.ca/odpub/pdf/65845.pdf

Building at over 200K
Household formation less than 175K which usually drops when real estate weakens.

#135 Maxamillion on 10.11.11 at 1:58 pm

Don’t forget to watch the next episode of My House, Your Money on W Network. Do they buy a house for the dog too?

http://www.wnetwork.com/Shows/My-House-Your-Money.aspx

#136 DaBull on 10.11.11 at 2:04 pm

Something even more interesting

Using Garth’s number of 2.7 persons per household, Canadian population growth and total new housing completions per year.

2001-2010 = 733,271 more built than population growth
1991-2000 = 790,415 more built than population growth
1981-1990 = 810,044 more built than population growth

Looks like Canada have been overbuilding since 1980. And that overbuilding has actually slowing down this last decade.

Numbers taken from
http://www.cmhc-schl.gc.ca/odpub/esub/64681/64681_2011_A01.pdf?fr=1318353956992
and
http://en.wikipedia.org/wiki/Population_of_Canada_by_year

#137 Robert Dudek on 10.11.11 at 2:05 pm

By all means, please keep it there! You’re delusional if you honestly believe Vancouver was a first-pick choice, apart from the fact anyone can hide cash there.

I think it would be great to live in a place that is considered “the money-laundering capital of the world”. Sadly Vancouver has a long way to go to achieve that title.

#138 Victoria on 10.11.11 at 2:24 pm

Bernake, No housing bubble ….

http://www.washingtonpost.com/wp-dyn/content/article/2005/10/26/AR2005102602255.html

#139 Nostradamus Le Mad Vlad on 10.11.11 at 2:25 pm

#70 Occupy Everything — “But he makes a good point in noticing how the MSN and the media are attacking OWS for not having a clear agenda, . . .”

In NAmerica, six individuals control 94% of the m$m, ‘tho the figure can fluctuate.

Several months ago, a link posted said there was / were new political groups, with different agendas and philosophies which would be introduced in 2011 by TPTB (who control the m$m, as it’s in their best interests), mostly designed to get people fighting with each other.

It seems they have accomplished their goals, as most sheeple have become so dumbed down, they don’t see the reality of life anymore.

#79 Onthesidelines — Thanks for the feedback. Whatever plays out, it will be a mighty different world than the one we’re presently living in. Cheers!

#83 big T — HAM is Hot Asian Money. HIM is Hot Indian Money. NCM is No Canadian Money!

#90 SLN — Great description of what it’s like. I’d like to be renting as well, but circumstances dictate otherwise. At least there are no debts to be concerned with.

#112 Nemesis — Great pic! I fold, you win! You’re right — the rhino represents people who are debt free, whether owning or renting and the ostrich (when flattened) show TROTW what ingesting too much debt does. Nice one!

#124 Renting in leaside — Good play on words, and accurate as well.

#140 avenirv on 10.11.11 at 2:26 pm

i am sorry but i cannot stop from posting this.
RainBird ,
education and medical coverage IS NOT FREE in canada. it is paid through the taxes we pay.
misinformation…..

#141 Daisy Mae on 10.11.11 at 2:37 pm

Flaherty says: “The government has tightened mortgage rules three times since 2008, most recently in January.”

….and that would be because Flaherty and the ‘Cons’ SCREWED IT UP three times since 2008…

#142 Aussie Roy on 10.11.11 at 2:45 pm

penpal on 10.11.11 at 12:37 pm

@ # 111 BPOE

“Ever hear of a successful renter?”

Yeah, millions of them blockhead.

………………………………………………………………..

Howdy Penpal, one thing I’ve learnt, you can never win an argument with a crazy delusional person. Must be the lack of any logical thought. BPOE is the poster child for the housing religion, his belief (no matter how illogical) just can’t be shaken, no matter how much data or logic you use. His ramblings just confirm the the mindset of many RE market participants.

Really did enjoy your reply to him today – LOL.

#143 poco on 10.11.11 at 3:07 pm

136 stevenson—you said

Also unless Flaherty is intentionally trying to mislead the public as a government representative. I trust his words as being more responsible and reliable then any post/blogger.
————————————
you take the cake as the greatest fool– hands down–boy you’re gullible—do you so quickly forget this

http://www.youtube.com/watch?v=vkk_OR6Dqt8
—————————————————————

or this little clip from the past……………

http://www.youtube.com/watch?v=PbMCgR6FIzU&feature=related

my God man –start reading the entire articles–not just the 1st line

mind you –you do supply some comic relief to my reading but the majority of your postings are the ramblings of the uninformed, much like those of Waterloo Res

#144 Junius on 10.11.11 at 3:15 pm

#136 Stevenson,

There is no reason to think that Canada can avoid the global financial turmoil. This is just head in the sand naivety. Anyone who thinks that the US can struggle without Canada struggling just doesn’t understand how connected we remain to the US. Add in Europe and the slowdown in China and there is no exit.

As for this comment on F – “Also unless Flaherty is intentionally trying to mislead the public as a government representative. I trust his words as being more responsible and reliable then any post/blogger”.

Give me a break. F was the one who changed the CMHC rules and created the Canadian Housing Bubble. You think he is going to admit that there is a bubble? Please.

#145 Junius on 10.11.11 at 3:19 pm

#146 poco,

Good finds. This guy Stevenson is so naive it is just incredible.

#146 Junius on 10.11.11 at 3:22 pm

#145 Aussie Roy,

I actually think BPOE’s belief it totally shaken. Otherwise he wouldn’t come here everyday and post all this hype. He even uses more than one name. If he was really confident he would be out selling his HAMsters all day long.

Just another Spruiker (to use an Aussie phrase) who is trying to keep the bubble alive a day longer so they can sell another greaterfool.

#147 disciple on 10.11.11 at 3:28 pm

#128 Young old fart… assumptions, assumptions, the playground of the foolish. You still do not see that it is you with the sad outlook on life. Your definition of ‘not-stupid’ is being able to conspicuously consume at “Morten’s” and frivolous sports cars. You get out of life what you put in. My true colours are consistent on this blog. I have stated it many times, I am not religious, “disciple” is hardly an exclusively religious term. It denotes humility, constant learning and improvement, dedication, and self-sacrifice in order to help others, not only yourself. So, again, I ask rhetorically, nobody helped you, eh? Who did you help? (don’t answer that, it’s rhetorical, you old fart)

What I feel for you is…pity.

#148 JRL on 10.11.11 at 3:46 pm

Government continues to pile on debt and raise taxes to historic levels as they recommend ‘austerity’ for everyone else.
Heck, the Sunshine List TRIPLED in size during a RECESSION! I mean, how is that possible?
Here’s a clue for you to cash in: They DO NOT CARE about you!
Lie, cheat, steal all you can, borrow and leverage to the max and claim bankruptcy – that’s how the fat cats do it.
Trump has claimed bankruptcy 3 times. Trump knows the value of a good bankruptcy. Stupid me always thought such a thing would be shameful.

Insignificant little me has no debt, no mortgage, freedom 55 with lots of savings – and all I do is watch my savings go down, and down, and down some more as the fat cats steal a little bit at a time, by inflation, by collapsing the stock market, combined with ever-escalating taxes.

In retrospect, I am the stupid one, not them.
They figured out how to rig the game early in life when I was busy playing by the rules. As it turns out, I am the greater fool.

#149 Echo on 10.11.11 at 3:47 pm

Crushing. Certain.

#150 Snowboid on 10.11.11 at 3:50 pm

#117 Van guy waiting on 10.11.11 at 11:11 am…

They are in West Kelowna.

http://www.tuscanyvillas.ca/

#151 Snowboid on 10.11.11 at 3:53 pm

#126 The American on 10.11.11 at 11:43 am…

Don’t let BPOE get you steamed, no one has told him the new slogan is CEH (Canada Ends Here).

http://thetyee.ca/Mediacheck/2011/10/04/BC-Best-Place-On-Earth/

#152 timo on 10.11.11 at 4:03 pm

http://articles.businessinsider.com/2011-09-09/markets/30155003_1_housing-bubble-canadian-economy-canadian-real-estate-association

It may be tempting to believe that Canada is, in the words of more than one economist, “a bastion of stability”. But a realistic look at the Canadian economy suggests a castle at least partly built on sand, and of course financed with debt. Unless house and commodity prices continue to defy gravity, Canada’s current good fortunes will likely come to a very painful end.

#153 jess on 10.11.11 at 4:08 pm

The FTSE 100 largest groups registered on the London Stock Exchange comprise 34,216 subsidiary companies, joint ventures and associates.
38% (8,492) of their overseas companies are located in tax havens.
98 groups declared tax haven companies, with only two groups, Fresnillo and Hargreaves Landsdown, who did not.
The banking sector makes heaviest use of tax havens, with a total of 1,649 tax haven companies between the ‘big four’ banks. They are by far the biggest users of the Cayman Islands, where Barclays alone has 174 companies.

The biggest tax haven user overall is the advertising company WPP,
(http://www.wpp.com/wpp/#)
which has 611 tax haven companies.

The FTSE 100 companies make much more use of tax havens than their American equivalents.
There are over 600 FTSE 100 subsidiary companies in Jersey (more than in the whole of China), 400 in the Cayman Islands and 300 in Luxembourg – all tiny tax havens.
Alongside the financial sector, oil and mining companies are also huge users: TJN recently noted that they are often headquartered in Canada, and ActionAid noted that

“BP and Shell have almost 1,000 tax haven companies between them, including more than 100 in the Caribbean (hardly a major source of oil).”

http://www.actionaid.org.uk/doc_lib/addicted_to_tax_havens.pdf

#154 Moneta on 10.11.11 at 4:09 pm

Stevenson on 10.11.11 at 1:17 pm
—–
Lots of empty homes and condos. A lot of second homes too… just like in the US.

When equity dries up, they’ll be trying to offload these… just like in the US.

#155 Moneta on 10.11.11 at 4:15 pm

Aussie Roy on 10.11.11 at 2:45 pm
——

http://www.bbc.co.uk/news/health-15214080

Most people’s brain can only cope with happy thoughts.

#156 timo on 10.11.11 at 4:38 pm

http://www.cnbc.com/id/44854607

Slovakia’s parliament rejected the expansion of the euro zone bailout fund in its first vote but the package was expected to go through in a later re-vote because the outgoing prime minister planned to ask for help from the opposition.

back to choppy waters….

#157 Young Old Fart on 10.11.11 at 4:45 pm

#150 disciple on 10.11.11 at 3:28 pm
#128 Young old fart…
=================================

Thanks for my daily chuckle, mensch, you make it so easy!!! :o)

#158 Dan in Victoria on 10.11.11 at 4:55 pm

Stevenson @ 136
Did you read your second link?

When asked what would constitute evidence of a housing bubble mr flaherty said,
“If we saw a dramatic surge in prices in some parts of the country” blah blah blah etc etc.

C’mon man, the standards around here are a little higher than that.

#159 Devore on 10.11.11 at 5:08 pm

#136 Stevenson

There was no bubble in the US, even as the bubble was clearly bursting. And subprime was contained. Are you saying Canadian politicians are more trustworthy than their US counterparts? Governments ALWAYS downplay negative news. When the worst happens, hoocouldaknowd? Oh look, shiny thing!

#160 Devore on 10.11.11 at 5:18 pm

#137 Moneta

Household formation less than 175K which usually drops when real estate weakens.

Not only does it slow down, but it remains slow for some time as the households that DO form are larger. People are more likely to wait until they are married/engaged before moving out of the house, or even longer, putting particularly severe downward pressure on the 1 bedroom and studio condos that are so popular with investors (and are the vast majority of new construction), and the move-up market seizes up, as people figure they can make do with what they have for a few more years.

#161 Steven Rowlandson on 10.11.11 at 5:20 pm

Too many houses chasing too few buyers that have too little in the way of income?
Don’t burn or bulldoze! Its fire sale time!
One property per customer and homeless people and apartment dwellers that are citizens of canada only.
Make an offer , just don’t screw yourselves by offering too much.

#162 BPOE on 10.11.11 at 5:42 pm

The never ending cash flow. The pot of gold at the end of the rainbow. Facts folks just the FACTS
******************************************
Housing starts in Metro Vancouver rose to 1,783 in September over 1,644 in the same month last year, with most in the multi-family category, according to Canada Mortgage and Housing Corp.

“Apartment starts were concentrated in the cities of Vancouver and Richmond, while Surrey led the way in less dense housing types including single detached and town house starts,” CMHC senior market analyst Robyn Adamache said in a statement. “The City of Vancouver had the second highest number of single family home starts in the region, most of which were replacement housing.”

#163 GtaGuy on 10.11.11 at 5:48 pm

#6 RainBird
Buying property in the US couldn’t be easier for foreigners. Don’t need to deal with a lawyer and no land transfer taxes. Ended up costing me about $500 in fees over offer price for buy a property. Although you don’t need a lawyer you do not a trust company.

No lawyer? Were you sober at the time? — Garth

#164 triplenet on 10.11.11 at 5:52 pm

#101 Moneta –
For the most part these subdivisions are driven by the developers who have substantial influence.

Have you ever been to a development or a zoning change proposal at a City Hall. I bet not.
Perhaps you who has absolutely zero experience in any form of development (aside from your sewing room or kitchen), will kindly tell us what to develop and how.
Perhaps you can show us the perfect home – designed by your local committee of interested and bored house-people. The vast majority of development is what the people want and need (and can afford).
With copious amounts of City Planning influence.

A spec house of OSB, asphalt/fibre shingles, vinyl everything and lots of perimeter concrete is about as romantic and exciting as the old boy on a (too) loud
Harley, all dressed in black (as if he’s bad), wearing leather boots, gloves, pants, and a skull cap with matching sunglassess. (and I have my photo)
If that’s what I need and want – up yours!
…..Oh yeah, I don’t sew, knit or cook. I have some-one who needs and wants to do that.
Well, something like that.

#165 Nostradamus Le Mad Vlad on 10.11.11 at 5:58 pm


#151 JRL — “Government continues to pile on debt and raise taxes to historic levels as they recommend ‘austerity’ for everyone else.”

Bear in mind that H – F are two chronic liars. They probably lie about their first names being Steve and Jim.

Austerity 4 us? We haven’t got anything anyway!

#154 Snowboid — “. . . the new slogan is CEH (Canada Ends Here).” — Well pointed out! See #151 JRL’s post above (Funeral For A Friend — Canada).
*
Pet Rocks Not as dramatic as purple dandelions, but nice nonetheless.

Sept. 15/08 Sept. 15/11 — Where are we (John Mauldin).
*
Iran “If this all happened last June, then announcing it today is clearly a desperate and pathetic attempt to distract the media from the economy, the wars, OccupyWallStreet, Fast And Furious, etc. etc. etc. etc.” wrh.com. Anyone smell a FF coming up shortly, to justify an invasion? Of course, this will only antagonize China, Russia and possibly India and Pakistan, all of whom are well stocked with nukes, to protect their own interests and 4:59 clip Evidently, Russia can stop the change in Libya, but will probably wait to do a unified mission with China and a few others; Flashback Check the date then the headline; Occupy Agitators Doing their thing; NATO “The US said exactly the same thing about North Vietnam.” wrh.com; 4:17 clip Present protests may lead to violence.

Jon Corzine Ex-GS head honcho on Occupy; 8:12 clip Asher Edelman backs OWS; Dexia 100% nationalized; 5:39 clip Fraud. How long can H – F be sentenced for defrauding Cdns.? Wall St.’s Job Losses “How that we have all the money, we don’t need the henchmen any more!” — Gold in my Sacks (wrh.com); 4:49 clip Tax Havens. Plenty of companies use them; 8:03 clip No street lights at night? Who said utility bills were skyrocketing?

#166 Shoggy on 10.11.11 at 6:07 pm

There’s no surplus of housing. 70% ownership is low. In the Lower Mainland we’re going for a house for every man woman and child. Also, we all get a unicorn and a puppy at Christmas.

#167 poco on 10.11.11 at 6:11 pm

72 waterloo res–you said—
Yes, the ‘AVERAGE’ price in a city might come down, that is due to the fact that more of the smaller houses might be selling at any one time, but when you take a look at the price of each home individually you will see that NOT ONE of those homes in Canada ever mark their prices down very much, maybe a little bit but not by more than 1 or 2%, and NEVER under what they were purchased for, never.
_____________________________________________

again you speak of something you know nothing about

“NEVER sell for less than they purchased for”—–what kind of crap are you on????
you sound like Phil Soper on BNN last spring when he stated “not one homeowner in Canada is in negative equity”

well– suprise, surprise I said, as i e-mailed BNN with a few of the hundreds of listings that underwater owners were trying to sell for less than they purchased for, just a few short years earlier.
try these WR
309-1185 High St —bought june 09—369.9k
—sold Mar 11— 289k

2507-400 Capilano—bought Dec 08—358.9k
sold Mar 11—315k

14-3065 Dayanee Sp.—bought Jun 08—519k
sold Mar 11—504k

as i said before “uninformed” ramblings

#168 jess on 10.11.11 at 6:21 pm

accounting control fraud Mr. Black speaks about

According to the indictment, which was unsealed this morning, United Commercial Bank was a commercial bank headquartered in San Francisco, Calif., with branch offices throughout the United States as well as in China and Taiwan. Its holding company, UCBH Holdings, Inc., was publicly traded on NASDAQ. The defendants held the following positions at the bank:

■Shabudin, 63, was an executive vice president. From approximately September 2008 through April 2009, Shabudin served as the bank’s chief credit officer and chief operating officer.
■Yu, 48, was a senior vice president. From approximately June 2008 through June 2009, Yu served as the bank’s manager of credit risk and portfolio management.
The indictment charges that, between 2004 and 2007, the bank’s loan portfolio increased from approximately $4.4 billion to more than $8 billion. By September 2008, the bank’s loan portfolio faced growing losses. In November 2008, the bank received approximately $298 million from the Troubled Asset Relief Program (TARP).

“The Federal Deposit Insurance Corporation (FDIC) Office of Inspector General (OIG) is pleased to join our law enforcement colleagues in announcing the indictment of these two former bank officials for their alleged role in securities fraud, falsifying books and records, and lying to auditors,” said FDIC Inspector General Jon Rymer. “It is especially important to investigate and prosecute cases where trusted insiders abuse their positions to undermine the integrity of the financial services industry. In the case of United Commercial Bank, losses to the FDIC alone are estimated at $2.5 billion. We are committed to preventing and addressing such threats to the safety and soundness of FDIC-insured banks throughout the country.”

http://www.fbi.gov/sanfrancisco/press-releases/2011/former-united-commercial-bank-officials-charged-with-securities-fraud

#169 jed on 10.11.11 at 6:36 pm

136 Flater-fly? Really? This guy, like most government assignments, has great hindsight, extremely poor future vision. He can see the bus after it has hit him.

#170 dddd on 10.11.11 at 6:37 pm

uh-oh

alcoa misses by a mile

profit down nearly 50% over last q\\

warns of continued weakness

http://finance.yahoo.com/news/Alcoa-Q3-profit-up-but-sees-rb-3950431847.html;_ylt=Agj_TRqHkcf8QH.tmpGW4uO7YWsA;_ylu=X3oDMTE1dmJza2hkBHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsawNlYXJuaW5nc3NlYXM-?x=0&sec=topStories&pos=main&asset=&ccode=

But revenue up 21%, mostly on aluminum foil sales to GreaterFool readers. — Garth

#171 Math is Fun on 10.11.11 at 6:44 pm

Magic numbers Garth – thanks for putting them together.

It will give me more ammo over dinner with my CMHC pumping mother-in-law(s)…just kidding – not plural.

#172 Taipan on 10.11.11 at 6:45 pm

“#113Van guy waiting on 10.11.11 at 4:24 pm
TAIPAN:
Why do u care so much about our real estate. If you are a developer, why haven’t you invested into Vancouver years ago and cash out now? And good for u Aussie boy banking 5 mil. You’re like a virus and everywhere I go to research RE, there you are. Btw Jaguars suck!”

Read the message that i posted in the previous blog.

What did line 3 say. Ill remind you.

“I want to buy a ski property in BC.”

Youd be nuts to buy a property in Vancouver.

I made a decision to buy myself a little chalet in BC with some good snow. That was 2008.

I did my due diligence and found out that the Canadians had all be drinking the property coolaid. The market started to correct in 2008 and your stupid government and reserve bank flooded Canada with cheap and easy finance.

The equivalent of pouring petrol on a fire.

So what comes next? GFC2 – over the next few months.

That will take the floor out from under all of those vendors hoping and praying that some greaterfool will buy their property at the last moment.

No anarchy, no destruction of the USA, but big changes world wide!

On the Jaguar here is a quick video clip from Top Gear.

http://www.youtube.com/watch?v=Tyj9VMhE6oI

Explains me perfectly. LOL LOL LOL

Jag drivers dont drive German taxi’s and we dont conform. Makes us good contrarians.

Vancouver will fall 50%. BTW i dont change my pseudonym around the place like you need to. Obviously a regular over at RET.

If your waiting for Vancouver property to fall, youd better hope im right

#173 jess on 10.11.11 at 6:53 pm

Accounting conrol fraud Mr. Black speaks about.

Former United Commercial Bank Officials Charged with Securities Fraud

Former Chief Credit Officer and Former Senior Vice President Charged; TARP Lost $298 Million; FDIC Losses Estimated at $2.5 Billion

According to the indictment, which was unsealed this morning, United Commercial Bank was a commercial bank headquartered in San Francisco, Calif., with branch offices throughout the United States as well as in China and Taiwan. Its holding company, UCBH Holdings, Inc., was publicly traded on NASDAQ. The defendants held the following positions at the bank:

#174 Stevenson on 10.11.11 at 6:57 pm

Wow you guys are seriously amusing. Forget taking the news or fact as it is, but lets try to make sense of it so that it fits your judgement. Really? and better standards? You guys are hilarious…is this your new religion? It seems your beliefs are pretty much to the extreme.

I admit it I own a lot RE and I get good income off of it. I take risk of non registered student housing, but unless it burns down I am safe. If it does I won’t be here for it. Oh the beauty of dual citizenship. Don’t worry I’ll be back to reap my benefits though when I am 65.

I sure hope people here who claim to be so full of themselves are not holding ANY residential RE. Otherwise somebody is contradicting themselves.

#175 jess on 10.11.11 at 7:00 pm

young old fart

In Brazil, recently the Federal Police unleashed Operation Alchemy arresting 24 people for charges of tax evasion. The group is connected to a large company and is estimated to have been withheld about $ 1 billion, making use of shell companies based in tax havens. Deputy Paulo Maluf, a former mayor of St. Paul, faces charges of diverting public money and remittances to tax havens. Prosecutors said the fraud involved more than $ 1 billion dollars, and part of the robbery would have returned to the country after the money was laundered in tax havens.

http://www.inesc.org.br/noticias/noticias-do-inesc/2011/outubro-2/acao-global-contra-os-paraisos-fiscais

#176 TurnerNation on 10.11.11 at 7:02 pm

How can anybody support the Wall Street protests?

Americans never had it so good:

– They can snag long term mortgages for 3% (an unbelieveable rate for the past 100 yrs).

– Mortgage interest is tax deductable.

– One may buy houses for a 50-80% discount.

– Large US brokers like this one are providing stock margin loans for under 2%, the proceeds of which may be invested in income producing assets paying 4-8%:

http://www.interactivebrokers.com/compare/

Yes, the little guy can actually arbitrage between banks and income producing assets – an unheard-of situation.

About what are they complaining? Oh yeah, their addiction to 3 cars, 4000 sq foot houses, 60″ TVs, and rampant shopping. Boo hoo, not anyone’s fault.

#177 triplenet on 10.11.11 at 7:03 pm

Further to my comment #165….
it’s called supply and demand.
The biggest mistake any business can make is to unilaterally redefine fundamental economic rules and principles.
It’s also why McDonalds serves unhealthy food to fat people. Go ahead, take the big Mac away from a fat kid or take away the beer from a hockey dad.
Supply facilitates demand. The inverse as well.
More profit in the latter.

#178 penpal on 10.11.11 at 7:04 pm

@ # 145 Aussie Roy

Thanks for the compliment mate!

You make a most excellent point.

BPOE is the Canadian Real Estate bubble personified!

I knew he had to have some use.

But, truly aside from that virtue, I think he is still a waste of skin.

I’ll just skip his delusional rants from here on in.

#179 penpal on 10.11.11 at 7:06 pm

@ # 177 Stevenson

Let me restate that comment about you:

You are an immoral waste of skin.

As per your posting – what a scumbag landlord.

#180 ballingsford on 10.11.11 at 7:10 pm

Flippers, can you not see for yourself that your time has come? It was good while it lasted! Let Canada normalize again and begin before the flipping frenzy fad started.

Did I actually call this a fad? Fads come and go and this one has run its course.

Bye bye!!!

#181 jess on 10.11.11 at 7:13 pm

Minutes of meeting on Goldman Sachs settlementRecord of a meeting on 8 December 2010 chaired by HMRC general counsel Anthony Inglese revealing that permanent secretary Dave Hartnett shook hands on secret settlement with Goldman Sachs

Goldman Sachs let off paying £10m interest on failed tax avoidance schemeLeaked documents show top tax official shook hands last year on secret settlement described by sources as a ‘cock-up’

reddit this guardian.co.uk, Tuesday 11 October 2011 16.44 BST

#182 Moneta on 10.11.11 at 7:17 pm

Oh yeah, I don’t sew, knit or cook. I have some-one who needs and wants to do that
——
Are you mocking me? Wow! And I don’t even cook! LOL!

And I did say that houses are built according to people’s wants… their dream life and not their real life.

#183 ballingsford on 10.11.11 at 7:18 pm

I don’t get this one Garth from your reply to post #173 dddd.

uh-oh

alcoa misses by a mile

profit down nearly 50% over last q\\

warns of continued weakness

http://finance.yahoo.com/news/Alcoa-Q3-profit-up-but-sees-rb-3950431847.html;_ylt=Agj_TRqHkcf8QH.tmpGW4uO7YWsA;_ylu=X3oDMTE1dmJza2hkBHBvcwMzBHNlYwN0b3BTdG9yaWVzBHNsawNlYXJuaW5nc3NlYXM-?x=0&sec=topStories&pos=main&asset=&ccode=
*********************
But revenue up 21%, mostly on aluminum foil sales to GreaterFool readers. — Garth
*********************
What do the Greater Fools and tinfoil have in common?

Tipping hair for hair coloring highlights? Warming left over turkey? Covering the wine bottle when the cork cracks and no other stopper is around?

#184 Aaron - Melbourne on 10.11.11 at 7:21 pm

Too many houses in Australia?

POP POP POP. Looks like the entire estate is for sale in this drive by video.

http://www.youtube.com/watch?v=tJB4frVnilQ

#185 Blacksheep on 10.11.11 at 7:37 pm

Avenirv #143,

“i am sorry but i cannot stop from posting this.
RainBird ,
education and medical coverage IS NOT FREE in canada. it is paid through the taxes we pay.
misinformation…..”
—————————————————————–
I am also sorry Anenirv, but the “taxes” we are legally bound to pay are the equivalent of an entry in a ledger, nothing more. Nothings “paid” with it, just the way the system works.
Garth’s recent, multiple references to fact the US (or Can.) cannot be forced to default on debts owed, in their own sovereign currency, confirmed my research.

See link below.

http://en.wikipedia.org/wiki/Modern_Monetary_
Theory

take care,
Blacksheep

#186 Stevenson on 10.11.11 at 7:54 pm

#182 penpal

Immoral? You think morality and costs compliment each other? Steve Jobs was immoral, people remember him as a legend still.

You can continue to dream. Remember sell all your RE before it’s too late. What a joke some of the beliefs are. Canadian RE will not tank unless the world collapses together. Don’t ask my why everyone decided to purchase here, but it’s a free market. If people with cash can afford more the its normal for the one’s who cannot to rent or buy somewhere else.

#187 dd on 10.11.11 at 8:27 pm

….We have a higher ownership rate now than America did at the bubbliest moment. Theirs topped at 68%, and ours is 70%. They built 29% too many houses. We built 41% too many. They assumed record household debt…

Love this stat.

#188 dd on 10.11.11 at 8:29 pm

#3Thankful in Calgary

…So glad I bought in early 2006….just pure luck…

Ya, people in the states were saying “… 2001.” Well in some places prices have retreated to 2001.

#189 Kris D. on 10.11.11 at 8:30 pm

I wrote earlier about the market in/around Oakville.

My friend visited an open house in Burlington today, 2800sqft SFH, 4bdrm, 10yrs old in a great locality (great school), basement done, upgrades like potlights, crown molding, 9ft ceilings, California shutters etc etc.. List 629k.

Buoyed by gloomy macro-economic news all around, my friend called the agent and bid 600k – He also suggested the seller’s agent double-end the deal, thus making a lower bid more palatable. The agent said they already had multiple bids (property on mkt since Thu, i.e, 5 days), and his offer was too low to bother writing-up.

It’s what I’m seeing in Oakville/Burlington for 1.5yrs now – No signs of a slowdown, let alone a Vancouver-style meltdown. I’d like to think we’re on the cusp of it, though!

Your friend knows little about how to buy a house. A verbal offer’s worth nothing. — Garth

#190 miketheengineer on 10.11.11 at 8:34 pm

Garth et al:

Garth you were right….so many people trying to sell and can’t sell…some of your posters are saying they want to sell, but after 6 months no buyers….

Why?

It is just as you explained before…THE PRICE IS TOO DAM HIGH. Take your lumps if you want to get out. But do it soon or you are going to LOOSE EVEN MORE.

RE for investing takes guts, and balls. It is like the stock market. You could win and you can loose big time. It is also a bit of PONZI scheme. The last one in has the greatest potential to LOOSE BIG TIME.

An engineer buddy of mine, much older told me his “big” story. He bought 3 or 4 “big” homes. He hoped to build them and sell after completion for easy profit. So he gave the builder the 25% down payment, and waited the year. Lo and behold the builder delayed closing…then the market dropped (back in the 80’s) and guess what he could not close. The result he lost his shirt and almost his personal home and had to start from “0”

#191 Bill Gable on 10.11.11 at 8:42 pm

BTW – Violence is a way of life in Vancouver and so is endemic poverty – Hep C and homelessness.
The creatures crawling the Alley’s day and night, will drive ya whack.
The Downtown East side is as scary a place as you’ll find on the Planet.
Then there’s the gangs.
Every time I see an Escalade driven by some 20 year old, my shoulder holster gets adjusted. (*I wish).
I am sick to DEATH of people painting Vancouver as anything buy what it is.
Pretty Bay, nice Mountains – the City itself – pretty much S U C K S – unless you are rich and or ‘connected’.

We are moving out of the City in anticipation of the REAL event MSM is avoiding = when Fukushima debris will starts washing up on the west Coas – look out.

Lovely thought.

Time for a nice spot in, oh, Souris PEI?

#192 InvestorsFriend (Shawn Allen) on 10.11.11 at 8:42 pm

AND THEN IT WAS 42…

Over here in Edmonton we just got two more murders today so we are at 42. Surpassing our old record of 39 from 2006.

We are on track for “50 murders in 50 weeks” unless things quiet down the rest of this year.

Some claim that as a City we are still not really “on the Map”, but this might do it.

#193 Bill Gable on 10.11.11 at 8:44 pm

*I Pad typing and spelling was ridiculous – egad – apologies.

#194 betamax on 10.11.11 at 9:23 pm

#73 Van guy waiting: “I’m still waiting because I’m listening to you Garth”

Take some responsibility. You’re waiting because prices are insane, not because you read something on a blog.

#195 betamax on 10.11.11 at 9:28 pm

#117 Van guy waiting: “There is no %50 off for condos in Kelowna. Where is this sale? I’d like to buy one.”

#153 Snowboid: “They are in West Kelowna.
http://www.tuscanyvillas.ca/

Now you know. Stop trolling, go buy one and let us know how it works out.

#196 The American on 10.11.11 at 9:40 pm

At #149: Junius, you are ABSOLUTELY CORRECT!!! Also, you’re right about BPOE using more than one name. BPOE also uses the name OASIS. Just an FYI for all you readers out there. He’s a friggin’ idiot. If he truly believed what he wrote, it would stand alone on itself. He has far too much time on his hands to write such b.s. on a daily basis. Oh, and he has a major inferiority complex that shows through each time he goes on the defensive/attack :-) And I’m talking M A J O R.

#197 Timing is Everything on 10.11.11 at 9:45 pm

#194 Bill Gable

Maybe Vancouver is a world class city after all.

#198 Robins on 10.11.11 at 9:58 pm

Not only Canada is a safe place to park imported cash, it is also a good place to import inflation from countries where food prices, controlled by hoarders, keep on climbing.

10 years ago, a whole soy chicken was only $5 and one whole BBQ duck $7-$10. Today, the prices have more than doubled or tripled. http://chowtimes.com/wp-content/uploads/2011/02/HK-BBQ-Master-No-3-Rd-Richmond-3.jpg

Today you can still pick up one whole roast chicken for $5 – $7 from Safeway, SuperStore, Walmart, Safe-On with or without coupons.

#199 Kris D. on 10.11.11 at 10:13 pm

#192 Your friend knows little about how to buy a house. A verbal offer’s worth nothing. — Garth

Garth, you’re probably right about my friend. Regardless, my point stands – about the brisk housing market in this town – That property will sell before hte weekend.

I forgot to mention, the exact same model on the same street sold for $550K-ish in late 2010 (albeit with a smaller backyard, so we can add 25K, even 50K?) Still that indicates a significant increase in prices in the past year. Still waiting for a sane market this end of Canada..

#200 Abitibi Doug on 10.11.11 at 10:23 pm

There’s something terribly wrong with this picture. In the US, there are many thousands (possibly hundreds of thousands) of homeless people and houses are being bulldozed. Does that make sense? No wonder there are so many doom and gloomers here and elsewhere.

#201 Snowboid on 10.11.11 at 11:43 pm

#166 GtaGuy on 10.11.11 at 5:48 pm…

Have to agree, at least in Arizona, lawyers aren’t required. Our cost to close (title company) was $ 260 – seller paid another $ 275 for their share of the closing as well as $ 880 for title insurance. No property transfer taxes, no other taxes or fees.

The entire process was done electronically (Docusign) except one document we had to sign with a notary which cost us $ 25 extra.

After receiving a rebate from the realty company our overall costs including prorated taxes and HOA fees were about $35.

When we first got down to AZ we did consult with a lawyer about possible implications for us buying there. Not only did he confirm lawyers weren’t required (especially on cash deals) but didn’t charge us for the 15 minutes he spent with us (that is a first in all my dealing with lawyers) – and directed us to the notary we used for the document signing.

And we were sober through the entire process, but entirely plastered after close of escrow (possession date).

#202 gtaguy on 10.12.11 at 12:16 am

#166 GtaGuy
No lawyer? Were you sober at the time? — Garth

No lawyer just an independent third party title company ensuring everything is done smoothly and correctly in the transfer of the property.

Not necessarily all states work like this. House was purchased in AZ. Was very simple, quick and best part cheap.

Encountered no hiccups along the way. Title company took care of all the details and any concerns.

#203 dddd on 10.12.11 at 12:34 am

wish list for papa garth

any chance you could put a link(s) (back to top, next blog entry)at the bottom of the comments so we don’t have to scroll around so much?

thx

#204 Van guy waiting on 10.12.11 at 2:01 am

#197 Betamax

Look I know prices are insane, but I can still afford it. When I see this site, it makes me spooked. Im not sure what to believe anymore. I hope prices come down, but that’s about all I can ask for. Sales in Vancouver area are still good and inventory is not ballooning yet. When is this bubble popping? I thought 3 years ago.