When my old man was a high school principal he bought a house for two times his annual salary, but we still had a boarder living with us. That was okay. She was cute. Solidly middle class, we also had two cars. A new Buick and a beater VW bug. Interesting that the house was more affordable than the Buick – a mortgage could be amortized over 25 years and the purchase price was reasonable, but a car loan was short and with painful payments, and the wheels cost 30% of household income.

Today the same house costs seven times what a principal makes in the GTA; the most unaffordable point in history. Cars, in comparison, are cheap, with a minivan selling for 20% of the same salary. We still buy houses with long mortgages, but today we rent our rides.

The above should tell us a few things. Houses are artificially expensive. Cars are a bargain. School administrators (at $128,000) make too much. Elephantine debt is a way of life. And families can only get ahead if houses keep rising in value. Which won’t happen.

This raises an interesting question of why more people don’t lease houses and buy cars, if it seems clear both will be depreciating.

After all, how many more signals do we need? Austerity is now sweeping the planet, promising slower growth, less government spending and downward pressure on wages and prices. Commodities, especially copper (off 30% since August) are telling us to expect a swampy economy for some time to come. Already real estate values from poor Victoria to the withering fringe of the GTA, are retreating. It’s only human emotion and an endless appetite for debt – not a growing economy and rising wages – which keep housing aloft in places like Vancouver, Skatch and 416. But not for long.

So there is, say the research guys at Macquarie Research, more than a valid case for leasing real estate. To quote:

The cost of owning a home not only exceeds the cost of renting but is near alltime highs. With interest rates more or less at record lows this is somewhat surprising. In addition, the Bank of Canada reports that debt-to-income of Canadian households is 147%, an all-time high and above the ratio in the US—and just slightly below the ratio in the UK. Consequently, it is not too hard to imagine the Canadian housing market making a serious correction if interest rates start to rise. Moreover, we think that depressed home prices south of the border make high consumer debt levels and low affordability in Canada that much worse.

Of course, even if rates don’t jump, the amount of new debt people can absorb is not endless. And smart folks understand that when you can rent a new condo in Toronto for $2 a foot instead of spending $500 a foot to buy it, leasing could be a genius move – especially with 38,000 more units coming to market.

Is there an argument for sustained and continuous advances in the value of real estate, yielding capital gains and making all this leverage worth the risk? Hmm. Let’s take a short stroll into the west side neighbourhood of Vancouver, arguably the hottest housing market in the entire country through 2011. Over the past couple of months I’ve referenced the efforts of one blog dog to sell a fat lot with a tear-down house (the kind of property HAM loves). He started at $2.5 million (normal for the hood), then chopped that by half a mill after a few showings, but no offers. The latest news: now even the showings have stopped.

“Things have slowed to a crawl here. The last sale in the area was on Sept 6th. I plan on waiting it out and not chasing the market down further. It would be different if there was any movement near us – but there is no activity to chase. So the windfall which had appeared to be arriving on a jet plane, and then sent a telegram saying it was going to have to take the train is now apparently not even coming by bus but rather steamship….”

“No activity to chase.” In the heart of the bubble. This is why average prices – based on sales, not crickets – tell us nothing about true market conditions.

Some days ago I argued that the stats Canadians are being given by real estate boards, marketers like Re/Max and the Canadian Real Estate Association are meaningless and misleading. They record past sales which in many cases resulted from offers accepted months previously. These numbers are lagging indicators, not leading ones. They offer no map ahead. To suggest so is disingenuous.

Personally I’d rather invest in where we’re going, than where we’ve been. This week its initials are N.S.


#1 Jeff Beck on 10.20.11 at 8:12 pm


Somebody. Quick. Get the oxygen. — Garth

#2 mississaugasold on 10.20.11 at 8:16 pm

So when a condo is sold preconstruction, is the sale and price counted at that time or when the condo closes and is built/registered?

Cute pic.

Different regional boards and provinces have slightly different methodologies. In the GTA sales measure closings. — Garth

#3 Chuck D on 10.20.11 at 8:27 pm

Came across this today. The ornate cast fireplace in the modest 50s bungalow is a nice touch. This is approaching Vancouveresque ridiculousness.

#4 Waterloo Resident on 10.20.11 at 8:28 pm


#5 Observer on 10.20.11 at 8:31 pm

Today the same house costs seven times what a principal makes in the GTA; the most unaffordable point in history….

In the mean time, a “lost generation” of priced-out young Canadians are cutting back on their plans to have larger families, while monetary policy makers in this country are talking about slacking off on inflation. It’s a war on the paycheque of the young working middle class.

#6 Waterloo Resident on 10.20.11 at 8:38 pm

Kitchener is a Factory Town (or at least it used to be ), but then the Michelin tire plant shut down laying off thousands, then the Budd truck frame plant went letting go of a few thousand more, and now the The old JM Schneider Inc. meat-packing plant in Kitchener is closing, placing 1,200 people on the street without jobs. I guess all of those workers being let go are the ones who are buying these $600,000 houses, they know that there are no more jobs so they hope to make income as their homes continue to rise in value, that’s the ONLY GAME IN TOWN now. If homes here stop rising then most of the unemployed people here in Kitchener-Waterloo won’t have ANY income coming in !

Now here is where the SH!T hits the fan: Bank of America is doing a MAJOR illegal thing right now ! They know that their derivatives market is about to go “POP” and so they want the U.S. taxpayer to bail them out; TO THE TUNE OF about $75 Trillion dollars. Yes, that is more than the entire world’s annual GDP.

One of the quotes in the the article reads: “If you have any doubt that Bank of America is going down, this development should settle it.”

Read all about it here, its totally unbelievable that the American people are even allowing this thing to go on right under their noses ! :

#7 T.J. BONES on 10.20.11 at 8:38 pm

Garth I see you saw my observation of autos to real estate comparisons, I believe I am learning. Please keep reinforcing the concepts. P.S. Victory is at hand

#8 E.G. on 10.20.11 at 8:41 pm

So… the much vaunted ship building contract in Vancouver won’t spike the RE prices a bit more?

(Or, is Halifax the “next big thing”?)

And, how, exactly, can your average welder afford to live in Vancouver? Maybe they should have awarded the west coast contract to Prince Rupert.

#9 smartalox on 10.20.11 at 8:43 pm

Speaking of those fat shipbuilding contracts, I hate to think what will happen to the owners of all those condos built at the foot of Lonsdale quay in North Van. The last time a ship was built there, a lot of those towers didn’t exist – and for good reason: shipbuilding is a very noisy, dirty business!

#10 Jess on 10.20.11 at 8:57 pm

Rent vs. mortgage…? What about a place like Saskatoon where rent and mortgage payments are just about on par? We’re a family of four looking for a place to live and figure our best option would be to buy and rent out our basement. A house (or townhouse) costs about 1700.00 a month (same as a mortgage payment – not including tax, heating, upkeep, I know). We’re not low income, but we’re not rich either. Just part of the dying middle class…

#11 Barton Cutten on 10.20.11 at 9:01 pm

Garth, I like what you write, but I like the pictures you associate with your verbatim just as much… Garth, you find awesome pictures, lol.

#12 Smoking Man on 10.20.11 at 9:12 pm

Nova Scotia first thing that poped into the head on the contract news…………..
So true

#13 Smoking Man on 10.20.11 at 9:12 pm

Next? How about

World Revolution

You Tube + Burning Street Vendor starts it all………..Go figure……

Momar bites the dust yesterday. Two holes in the skull, how fitting………Why can’t all tyrannical politicians retire they same way……..

I wonder if Mo and Hosni this time last year ever even remotely conceived in there wildest dreams what fate would await in just 12 months……………….

I wonder if Dick Chaney, George W. are thinking right now?

Mo was an idiot he just had to look across the pond to see how it’s done.

He should of started a central bank and moved to the shadows, Then get control of all TV and Radio, Film Production, Book Publishing and Distribution. If someone goes against you, see to it that they never get another job, and save your self the cost of a bullet.

Control the Education system and use phy-ops to emasculate all the males in the population Create happy obedient tax farm slaves that are happy to fork over labour credits, so you can get un tendered contracts for you and your friends using other tax farm slaves to do the work. He should have formed 2 or 3 political parties that he would fund, and control from the shadows. He would have them fighting each other for the dumbest things, government would change when the slaves got restless but he would still be in charge. He could artificially keep rates low, forcing asset prices to sky rocket, then spike the rates, and trade fake money for real assets at deep discounted prices…

Then he could just hang out in his tent with all the hot ladies and have a great life….

But then again….along comes the internet…………….where secrets, theories, and ideas counter spin the master spinners………It’s a new game…………..

The past and present Tyranists in the USA government are going to have an rude awakening very soon…………but it’s not coming from a bomb, or suicide bomber, a brown person, or the emasculated males in the population………

It’s going to come from inside the military……For apple pie, white picket fence mammas boys have had enough of shadow people bankrupting the county, fight proxy wars and losing friends for the globalists agenda and watching their brothers, cousins, friends and dogs back home that use to be middle class now living ion food stamps.

Sweet dreams Dick Chaney ?11

#14 Tkid on 10.20.11 at 9:25 pm

you can rent a new condo in Toronto for $2 a foot instead of spending $500 a foot to buy it

Next time I am asked why I rent, that will be my answer. This is the most clear explanation of the difference between renting and buying I have heard.

#15 Van guy waiting on 10.20.11 at 9:25 pm


Stop picking on Van west. I just looked up numbers for sfh in Richmond since Sept 15. 946 listings and 62 sales. HAM is nowhere in sight.

#16 Zamphir on 10.20.11 at 9:33 pm

School administrators (at $128,000) make too much.

Then why aren’t more people wanting the job?

#17 islander on 10.20.11 at 9:40 pm

Not to be too cynical, I believe the transfer of taxpayer wealth from the all of Canada to Nova Scotia and Vancouver Island via a job creation scheme will result in reducing transfer payments, thus benefiting us all in a somewhat palatable way………..I think!!

#18 Mr. Lee on 10.20.11 at 9:42 pm

Listening to Remix and the various real-estate associations was kind of like listening to the Bre-X investor relations PR persons. How about the era, was there not the mantra that finally we had stumbled across a recession proof segment of the economy? I remember that well, stock boys at the local market investing on margin in Nortel. Where are they now.
The above is exactly the same scenario that we find ourselves in with Canadian housing. One difference, a stock I can unload with the click of my mouse. Not so for that house that I may have to sit on. With Canadians paying more for headline inflation related products and debt service levels taking out more after tax dollars from the wallet, I do not need the predictive abilities of Nostradamus (no offence Mad Vlad) to see what is going to happen.

#19 Victoria on 10.20.11 at 9:44 pm

I remember the RE agents were saying HAM is slowly coming to Victoria and property will go up.

Not happening.

#20 islander on 10.20.11 at 9:49 pm

OK, to be cynical…it is a real estate boosting scheme.

#21 stage1dave on 10.20.11 at 9:52 pm


Dammit, the Edmonton show has been sold out for weeks! Maybe I should post a few pics of all the trick 32’s I’ve pinstriped over the last 3 decades & a couple tickets will drop from heaven…

On topic, the rental hovels I currently inhabit have several parking lots full of brand new vehicles; on a quiet nite I can almost HEAR the depreciation…well, guess I could turn the amp down too.

Looking back 40 years, my parents had a brand new car every couple years in addition to the mortgage costing twice dad’s annual income; but it was a COMPANY car, real common back then.

(anyone seen one lately? The company car, not the mortgage)

Asking for a ride to school, to the mall, or to a friend’s house was treated like you’d just told a sick joke, followed by THAT LOOK warning you not to do it again…nowadays, 35K pickup trucks parade in & out of our lot & the 3 local schools like clockwork at 8:30 am, lunch hour, & 3:30pm…I routinely run into my neighbours at the 7-11, (2 blocks away) jumping out of the minivan to buy a bag of chips, but I walked there. (but yeah, I bought the chips too)

What a total waste of resources…I’m beginning to wonder if new cars aren’t as big a waste of money as housing. OK, I’m done ranting…but does anyone have a # on the “credit bubble” on auto financing? It’s gotta be huge…

Btw, I have about 11 vehicles, & most of them get real crappy gas mileage…but man, are they fun to drive!

#22 dodgedbullet on 10.20.11 at 10:10 pm

Hello Garth,

Some time ago I mentioned poor returns when cashing out of GICs early (TD).

The truth be known, you cannot cash out of some GICs early.

What can I say, I was very very green.

This doesn’t bother me so much, however what perplexes me is that I cannot move the 15k GIC out of “TFSA mode” so as to move new capital into a broker TFSA in the new year…


Thanks again for all the advice and interesting viewpoints.

Best Regards, Ben.

#23 viewwest on 10.20.11 at 10:12 pm

I’ve been watching commercial vacancies (street level, retail) for about a year here in central Vancouver. The “for lease” signs are plentiful and many, even in good locations, have been up for months and months. Every week we see new signs and more empty stores. This week I started to see a new phase. Above the “for lease” signs are “for sale” signs. Seems like many commercial property owners are finding they cannot lease and so are now trying to sell their buildings.

#24 T.O. Bubble Boy on 10.20.11 at 10:18 pm

In the GTA sales measure closings. — Garth

So, the peak sales months of May and October in the GTA are actually March and August sales that are closing? (given the standard 60-day close)

But – the listings are obviously from the current month, right? So, a “months of inventory” calculation is always skewed by 2 months??? (e.g. sales from August against # of Listings from October)

#25 young & foolish on 10.20.11 at 10:21 pm

I wonder who are the “shadow people” …

Hey Garth, did I see you talking up “the troops” on Bay Street today?

Tell it like it is!

#26 vyw on 10.20.11 at 10:24 pm

The Van homeowner should list again for full price in January ahead of the Lunar New Year.

#27 Jan Etter on 10.20.11 at 10:42 pm

#3 Chuck D

Came across this today. The ornate cast fireplace in the modest 50s bungalow is a nice touch. This is approaching Vancouveresque ridiculousness.”


That fireplace is so wrong. I hate when someone ignores the great design you can do to match a mid-century modern home.

The price relative to the home size is Vancouver-esque…although it is walking distance to the Sheppard “Stubway”, a relatively large lot, walking distance to the hoity-toity Bayview Village Shopping Centre and a skip to the 401. Given the amenities it’s much better value than many Brampton or Woodbridge McMansions at the same price. I think it’s just outside the much-desired Earl Haig SS district though.

$128k is on the high end for a TDSB principal ( but I get your point Garth. I also get your point about the car-house price comparison, but the gap has widened for good due to a) expanded lending practices at banks in combination with CMHC has driven prices up beyond what they would have in the ’50s/’60s all else being equal, and b) technological advances in manufacturing and global competition in the auto industry have driven prices down below what they would have been in the ’50s/60’s, all else being equal.

#28 Marc L on 10.20.11 at 10:45 pm

Someone please tell me what “HAM” stands for?

#29 Devil's Advocate on 10.20.11 at 10:46 pm

The future, according to some scientists, will be exactly like the past, only far more expensive. ~John Sladek

#30 Kevin on 10.20.11 at 10:47 pm

10 Jess on 10.20.11 at 8:57 pm

In 2005, almost 50% of all rental households in Saskatoon paid more than 30% of their income towards the rent. Since then, rents for certain places have almost doubled. It is of no wonder why it is estimated that almost 50% of all rental households in Saskatoon pay more than 50% of their income towards monthly rent. Long term this is not sustainable.

Not hard to see that Saskatoon has a housing bubble and a smaller but significant rent bubble. If the bubble bursts, both rents and house prices will come down.

I do have to say, if, with a family of four,you are buying a home with a suite, maybe you can not afford the house. I would also warn against a non-conforming suite even though they are frequent in this city. Legal suites are a better idea, but you will pay more for them, which puts you into a situation where buying is way more expensive than renting.

#31 Devil's Advocate on 10.20.11 at 10:47 pm

Never let the future disturb you. You will meet it, if you have to, with the same weapons of reason which today arm you against the present. ~ Marcus Aurelius Antoninus

#32 Renters Revenge on 10.20.11 at 10:49 pm

EG & Smartalox,
Living in Vancouver I have to be happy about the shipbuilding contract but as a taxpayer, not so much. 20% premium? Are you kidding me?

#33 Devil's Advocate on 10.20.11 at 10:50 pm

“The present is an egg laid by the past that has the future inside its shell.” – Zora Neale Hurston

#34 Not 1st on 10.20.11 at 10:51 pm

The debt explosion started in the 1970s when gold standard was removed, them money printing expanded the money supply and rampant inflation took over. That was where most of our purchasing power was lost and it has just continued since then.

Ask yourself what is our economy based on? Did you ever notice a lot of it is like musical chairs. Works good but eventually the music does stop and someone is left holding the bag.

And why does any industry deserve to be bailed out, even our precious banks. If its capitalism, then failure is part of that paradigm. Assets would get broken up and redistributed to stronger players and the system gains as a result. Instead we have created zombie institutions that never die and just keep amassing debt.

One shining example is GE, General Electric, which has the same debt as many sovereign countries like Canada, 600 billion and counting. Many more like that.

#35 Devil's Advocate on 10.20.11 at 10:52 pm

My statistics are more accurate at telling us where we’ve been and are than anybody’s crystal ball is at telling us where we are headed. – D. A.

#36 gtrz4peace on 10.20.11 at 10:55 pm

Smoking Man nails it. But he should not think guys like Dick Cheney are scared as they have soooo many escape routes by now, and amassed fortunes.

And Garth, I hope you are not serious that a school admin “makes too much” at $ 128K. Yes Garth hard to see Canada go poof like the US bubble and I want to say thank you for doing what you could: helping people navigate, profit in and survive the financial realities as they actually are, rather than paint fantasy scenarios for people. Keep up the good work.

#37 Nostradamus Le Mad Vlad on 10.20.11 at 11:01 pm

“Houses are artificially expensive. Cars are a bargain.” — That will soon change, with both sliding. Mind you, I don’t drive anyway (except the better half nuts), so I won’t be caught with any of the carbonazi taxes, when they eventually come in.

“Austerity is now promising slower growth, less government spending and downward pressure on wages and prices.” — Wages, yes but food and energy prices? Depending on what one needs, basics of life have gone thru the roof, while disposable stuff (not necessary) have alternately deflated.
Washington, DC Easy to understand why a few states are speaking of secession; Germany(The Fourth Reich) imposes its own terms; EU “Basically, this is like asking for a credit card but refusing to turn over your credit scores, and the EU us not doing this because the numbers are good!”; Insanity “His name is Steve Bartlett, and he has lost his mind, apparently.” When someone finds (his mind), please send it to Jack The Ripoff; GS Execs. At least some are content, but Wait a mo! O deer, wot a pity, knot two wurry, nevermind; Ohell “Real Americans will work for free so we can give money to the bankers!” — Official White Horse Souse.

EU debt crisis Is the end in sight (to complete failure), or is there no end? Raise the Alarm For politicians? Let them rot; Debt Dynamics Who cares about debt anymore? Banxters and politicos don’t, that’s fore sure. Let’s have more war!

Libya See the headline, then understand the reason for these illegal wars; Flashback “So you can understand why we are a teensy bit hesitant to believe the latest claims.”; Radioactive Canada We might be zombies here in the GWN, but at least we’re shining zombies! Gardasil Young girls dropping dead; Fukushima Nuke debris and waste arriving soon; Portuguese Military If people have riots in the streets, military would support them, not govt.

US Feds Clear reason for secession. Or come and join the four western provinces, and we will do our own version of secession! Ointeference A plague of locusts in his underwear; Swarm-O-‘Quakes “That is a very unusual part of the Big Island for quakes!”; GMO Crops with a pix added.

#38 Andrew on 10.20.11 at 11:35 pm

Agricultural Land Reserve / Greenbelt Act -> real estate prices go up -> real estate speculators buy real estate, making prices even higher -> more condo construction -> real estate bubble. Land use restrictions help make real estate in Toronto and Vancouver unaffordable, and encourage speculation.

Now of course high real estate prices encourage people to leave Toronto and Vancouver, so residents (and employers) will pack up and leave elsewhere, causing growth rates of those cities to slow. It is well known that greenbelts have this effect (notice how little exorbitantly expensive London, England has grown since WWII due to its greenbelt, or how employers have a very hard time hiring talented employees in Vancouver). So I think many people will just move to cities with less strict/no land use restrictions with cheap houses like Kitchener, Ottawa, Montreal, etc. and jobs will move with them, and urban sprawl will continue somewhere else.

#39 45north on 10.20.11 at 11:56 pm

Garth, on my Mac, in both Firefox and Safari the picture at the top doesn’t load. If I click on the spot where the picture should load I get the picture but lose the text. I bet that on Linux in Firefox everything will be fine tomorrow.

Waterloo Resident: I read the ZeroHedge piece. BofA sure has balls. BofA and Ben Bernanke need bigger culverts – bigger than the one in which they found Gadhafi.

#40 Aussie Roy on 10.20.11 at 11:57 pm

Aussie Update

US wants and needs HAM

Senators introducing bill to give US visas to foreign home buyers.

US senators are preparing to introduce a bill next week that would hand visas to foreigners who spend at least $500,000 on residential real-estate – a single-family house, condo or townhouse

Hong Kong property, the cracks appear.

The first Aussie bank to blow BOQ

BANK of Queensland’s credit rating has been placed on review for possible downgrade after the bank reported a rise in bad debts

Gloom is spreading

But in more grim signs for the residential construction market, GWA warned market conditions had deteriorated and its operating earnings were expected to fall by up to 10 per cent. And rather than NSW showing signs of improvement in housing activity following the recent state election, GWA said sales had continued to decline.

The number of houses sold in Melbourne last year was the lowest since the mid-1990s, according to new figures from Land Victoria. Its Annual Guide to Property Values shows that 53,112 houses were sold in Melbourne last year, a fall of 13.35 per cent on 2009. It is a far cry from 2001, when the market was at its peak with 70,137 houses sold.

Auction results – Still not pretty 45% national clearance rate.

#41 Patz on 10.21.11 at 12:03 am

Garth, in your previous post you said: A massive buyer’s market in housing lies ahead, along with a glacial economy.

I agree, except I think the economy will be worse than glacial. But not to quibble. When you say it will be a ‘buyer’s market’ I believe that will only be as if looked at from today. In other words the houses will be cheaper but people’s buyer power will be even lower. Much like what is happening to the south.

#42 Stevenson on 10.21.11 at 12:16 am

Looks like Toronto prices just keep on going up. Catching up to Vancouver soon. Haha I feel so sorry for those who waited especially in GTA. 10% a year appreciation tax free. Damn…. maybe some of you should of kept of some those properties for a little longer.

#43 Stevenson on 10.21.11 at 12:22 am

Very simple reason why people lease cars and buy houses. You have to be on crack to do the opposite in terms of an investment if you compare those. A car loses 20-30% instantly off the lot, a house/condo has a chance and it seems to be doing pretty well wouldn’t you say? There is public transportation, but I guess you could say there is public housing too? Might as well.

Renting is cheaper then carrying a property? Well it better be because why else would you want to help subsidize someone else’s mortgage? Also do you know you will never see that rent money again? It will become sunken cost.

#44 the Phantom on 10.21.11 at 12:23 am

Hey Garth Blog buddies (and as always, lurkers everywhere):

I found it interesting to read today Garth your thoughts on how home payments were more affordable than cars when you were younger and how today, the value of homes (and of course the payments, low interest rates notwithstanding) have increased exponentially while vehicles have never been as affordable.

This may be off topic but it reminds me of a discussion I had with a wise elderly fellow from rural Manitoba a few years ago and during our talk together he told me, “Your society and generation have turned everything we had on its head; you’ve turned it upside-down. When we were younger, the porn magazines were out of sight and the cigarettes were in plain view and now today, your generation has got the porn out in plain view for anyone to see but you’ve got the cigarettes hidden! I can’t understand it!!!”

I laughed when he mentioned that but in some ways he made a good point and it was one of those poignant moments that are forever etched in your memory. I guess it speaks volumes about where our values are today compared to where they were 50 years ago (when Garth was young). Take care all and I’ll scope this blog out tomorrow.

the Phantom

#45 Carp on 10.21.11 at 12:32 am

I lease my home and owe my cars and have no debt!

I just moved from a rented test farm to a 3 acre and who knows how many sqft castle for about the same cost as my sub-urban home I sold last year.

My investments are doing nicely in term of dividends and the up/downs of the markets can be stressful but being balanced helps – lots. All in all, I’m breaking even in this down stock market versus having sub-urban home with taxes, repairs and slowing market.

I even rent my pool at a local hotel – the cost is less than the cost of owing a pool in terms of energy, water taxes, gaz (for heating), and salt. Not to mention opening/closing a pool by the hot pool boy.

I also get the pool year round and my wife/kids all members too.

My wife has now given me a 5 year window to proved home prices will correct + very happy with the castle and land – hence happy life.

#46 poco on 10.21.11 at 12:43 am

#177 DA–from last post

As for your last words; that you are “not buying – yet” is a clear indication to me that my comment that the markets are just fine is the case. There are many, many like you. Thing is; it is hard to time the bottom of the market and to try to do so is no less a speculative game than trying to time the peak. You are a gambler just like most everyone else who posts on this blog that prices are going to “tank”. But thank you for reaffirming my belief that there is a good pent up demand out there. ;-)

you’re repeating exactly what i stated–“the jig is up”

your words—“there are many, many like you.”–yes there are, and the number of people like me are increasing everyday— finally waking up to the fact this housing thing ain’t all it’s made out to be—-hell, look how long it took you to figure out (or finally admit) that many different housing markets have been declining— many since the spring of 2010 like mine in the tri cities—and this is supposedly your “bread and butter”. (refer to your previous post of a 15% decline if you “can’t” remember)

so now you say the market is fine—there’s that pump- pump- pump again–the market isn’t fine and you know it!!!! quit BSing the troops like you’ve been trying to do for so long—there’s no pent up demand anywhere anymore–can’t you see it in the number of listings out there—you better check the sales to listings ratio in a few areas—and please, give us your interpretation of a balanced market –every realtor seems to have a different idea of that elusive “balanced market”

no tank–just a good steep decline for a couple of years,and as far as timing the bottom of the market—ya it’s very difficult but that’s a long way off–not even thinking of the bottom –this decline is just getting started– and as long as i have my sources i’ll know when that bottom is—i’m not looking for the bottom though–i just want to get back to a little “reality”

please let us know when we hit bottom–we can compare notes at that time, but something tells me you’ll be posting first………now go out and try to sell some of those 2000 listings up there

#47 Jsan on 10.21.11 at 12:47 am

Good things come to those that patiently wait. There are many parables that talk about the perils of impulsiveness and the rewards of patience. But, patience also requires…….no, expects self discipline. Just like in the US, I am very confident that those who have the patience and are not impulsively driven to buy at today’s ridiculous peak levels will eventually be rewarded while those that have no patience and live by the “I want IT NOW” principal will reap their less than happy ending “reward”.

“I Bought My Dream Retirement Home — Cheap!”

#48 Nostradamus Le Mad Vlad on 10.21.11 at 12:53 am

Keeping Track of the missing / stolen trillions; The Three Stooges “For a year now, fiscal austerity and financial chaos have sent Britain’s economy into a nasty cycle of low growth and rising unemployment.” We can expect the same here, so maybe that’s why the CPC is building jails; Who owes who? Good question; Curious Theory Hmmm. Bank Holiday in November? Berlin EU break up? But given enough rope, the EU may hang itself; Derivatives Not a bang but a whimper; Economic Depression Orchestrated by TPTB? US$ – Euro Put them in the shredder to make confetti.

FBI and Computers Creating a new ‘net? Fukushima Damage to reactor #3 is more intense; Thailand Flood fallout; EU No, it means Electric Universe; Monsanto Turning itself into a food monopoly; Bill O’Reilly Soldiers burning his books in Af’stan (worthless drivel); Eurasian Union Possible by 2015, and this could play a significant role.

Links in, but what of a small u/g nuke explosion in Texas; Bolivia Time to another ‘cano to fart in the wind? Supernova Isn’t the sun supposed to go supernova today? Libya Just like Iraq, there was no reason for US – NATO forces to destroy either country, but karma’s a bitch and must be repaid; More Looting Not too hard to figure out where, but it would be interesting to see if this had anything to do with it.

#49 johnny5z on 10.21.11 at 1:09 am

My father built and sold homes similar to the link in #3 above in the early 1960’s. In London, Ontario these homes would sell for around $16,000. Toronto was a few thousand higher.

#50 Humpty Dumpty on 10.21.11 at 1:10 am

It’s only human emotion and an endless appetite for debt – not a growing economy and rising wages

Is it possible that greed be the motivating factor to drive this “human emotion”.

One of the consequences most Canadians refuse to acknowledge is, compounding debt = slavery.

Instead of watching HDSTD, the leafs or those pathetic canuks attempt to entertain you with a stick and rubber puck, try listening to Peter Shiff while he was before Congrees.

Try putting the converter down during the secound period and listen to him. Unless you enjoy being chained to your master.
My appologize, I meant chair..


#51 Torquemada on 10.21.11 at 1:11 am

Rent vs. mortgage…? What about a place like Saskatoon where rent and mortgage payments are just about on par?

Mortgage payments based on how long of a mortgage? 35 years? 25 years? 15 years?

#52 Bailing in BC on 10.21.11 at 1:15 am

#3 Chuck D

Sorry Chuck, it appears that you miss posted your link. When I clicked on it I went to a site posting pictures of Versailles. Please try again.

#13 Smoking Man

Nice post. Made me think of what I saw on the internet the other day, veterans in support of Ron Paul.

#53 Devore on 10.21.11 at 1:41 am

I am sure you’ve all been seeing those CIBC “Wealth Builder” mortgage ads on TV recently. Things didn’t add up for me, so I decided to look this up.

So you get a mortgage, and with the “Wealth Builder” option you get an initial amount of money, and then a small amount ($100) every quarter. This is of course cash-back, so this money comes out of your equity, gets amortized over the life of the mortgage at whatever rate you have.

Now, I understand taking out your house equity and investing it. But we’re talking people here, who aren’t that good at math, are getting $100 at a time every 3 months, and they’re supposed to invest it (using CIBC investment “products” no doubt that [email protected] recommends) and get a rate of return (after taxes) beating their mortgage rate. I bet interest paid on this “Wealth Builder” money isn’t even tax deductible, like interest on an investment loan would be.

I wonder if the geniuses who came up with this scheme had a nice hearty chuckle after someone proposed naming it “Wealth Builder”.

But hey, you’re richer than you think. Or something like that, I may have my red banks confused.

#54 THE TITANIC on 10.21.11 at 1:46 am


VANCOUVER, B.C. – October 4, 2011 – Consistent increases in
property listings and fewer home sales over the summer months has
helped move the Greater Vancouver housing market into the upper end of
a buyers’ market.

The Real Estate Board of Greater Vancouver (REBGV) reports that
residential property sales of detached, attached and apartment
properties on the region’s Multiple Listing Service® (MLS®)
reached 2,246 in September, a 1.2 percent increase compared to the
2,220 sales in September 2010. Those sales also rank as the third
lowest total for September over the last 10 years.

“There’s more competition amongst home sellers in today’s market,
providing more options for prospective buyers,” Rosario Setticasi,
REBGV president said.”Buyers now have more properties to choose from
and more time to make decisions compared to the spring season.”

New listings for detached, attached and apartment properties in
Greater Vancouver totalled 5,680 in September, the third highest
volume for September in 17 years. This represents a 20.1 percent
increase compared to September 2010 when 4,731 properties were listed
for sale on the MLS® and a 21.2 percent increase compared to the
4,685 new listings reported in August 2011.

The number of properties listed for sale on the Greater Vancouver
MLS® system has increased each month since the beginning of the year.
At 16,085, the total number of residential property listings on the
MLS® increased 4.6 percent in September compared to August 2011 and
rose 4.4 percent compared to this time last year.

“Our sales-to-active-listing ratio currently sits at 14 percent,
which is the lowest it’s been this year. Generally analysts say that
a buyer’s market takes shape when the ratio dips to about 12 to 14%,
or lower, for a sustained period of time,” Setticasi said.

The MLSLink® Housing Price Index (HPI) benchmark price for all
residential properties in Greater Vancouver over the last 12 months
has increased 8.8 percent to $627,994 in September 2011 from $577,174
in September 2010. Since reaching a peak in June of $630,921, the
benchmark price for all residential properties in the region has
declined 0.5 percent.

Sales of detached properties on the MLS® in September 2011 reached
957, an increase of 10.5 percent from the 866 detached sales recorded
in September 2010, and a 32.8 percent decrease from the 1,423 units
sold in September 2009. The benchmark price for detached properties
increased 13.4 percent from September 2010 to $896,701.

Sales of apartment properties reached 922 in September 2011, a 5
percent decrease compared to the 971 sales in September 2010, and a
decrease of 38.1 percent compared to the 1,489 sales in September
2009. The benchmark price of an apartment property increased 4.4
percent from September 2010 to $405,569.

Attached property sales in September 2011 totalled 367, a 4.2 percent
decrease compared to the 383 sales in September 2010, and a 43.3
percent decrease from the 647 attached properties sold in September
2009. The benchmark price of an attached unit increased 5.4 percent
between September 2010 and 2011 to $516,697.

#55 Andrew on 10.21.11 at 2:12 am

#10 Jess

When borrowing rates rise (and they will, either due to government rate hikes or due to inflation caused by government stimulus and low interest rates, the latter being more likely), mortgage payments will go up and rents will go down. Unless you can lock your rate for your entire amortization (basically impossible in Canada), your mortgage is not a good hedge against inflation because the more inflation there is, the higher rates will have to rise for the lenders to survive the inflation.

#56 Foggy on 10.21.11 at 2:38 am

Hmm….NS. Can it be my newly adopted home with affordable housing, low taxes and lobster on the menu everywhere?
Oh and a fat 25 billion$ contract to make some nice patrol boats for our sovereign islands in the Arctic. However things don’t get really rolling on that until a year or so, employment-wise. Still maybe it will keep the buoyz at home and convince the Fort McMurrayiers to return to the fatherland.
And who knows what the ripple effect of all that is….

#57 Aussie Roy on 10.21.11 at 2:40 am

Aussie Update

New product to short Aussie banks

A financial product has been created aimed at investors concerned with the exposure Australian banks have to housing and potential disruptions in the global markets. That product will potentially benefit from a decline in the share prices of two of the largest banks in Australia and is named BBN Short Bank Series.

Fiat Money: Explained in less than 4 minutes

#58 Aussie Roy on 10.21.11 at 2:49 am

Aussie Update

Keen “we have people living in a palace but in poverty”.

Why Aussie banks aren’t safer than other banks who blew up a credit fuelled house bubble.

#59 Where's The Money Guido???? on 10.21.11 at 3:09 am

Re: #27 Smoking Man on 10.19.11 at 9:59 pm

Perfect example of Bat Man Head

Look at Tue Morning Bat Man upside down… BUY
Look at Tue Night-Wed Morn Bat Man up right SHORT

Then click on a 5 year chart and look at 2008, what do you see…………Very clean very Sharp Bat Man,,,,,,,,,,,,,,,,, look at Early 2009 soft but still a Upside Down Bat Man…

The above secret is gift it’s for me being a dunking ass on a bender these last few weeks………Contaminating this Great Blog with shit….

Google charts suck Look for Bat Man using Renko charts best is ( CMC Markets Trade Station) and you can turn 50K into a million in a year if this volatility keeps up and you know how to safely use Margin….Your welcome…
Please help this newbie and explain the margin part and how to trade this way. And please be SOBER when you explain it!!!!! How do you get to see these charts in real time to buy or short ?? to make this million you speak of.

#60 Canuck Abroad on 10.21.11 at 3:17 am

Renting has many other advantages over owning besides just the cost benefit.
My reasons for renting:
1) much cheaper than owning an identical unit
2) no maintenance/strata costs
3) no property taxes
4) no home repair costs
5) no home repairs at all – landlord does it
6) total mobility – not stuck in a place because can’t sell for the price wanted / needed to clear mortgage / etc
7) no debts whatsoever means I am not a debt slave or wage slave
8) ability to live centrally rather than have to move to the burbs and commute
9) I’m easily bored – if I tire of a place, I hand in my notice and ring the movers. Done. No real estate agents fees, no legal fees, no survey fees, no stamp duty on a new place, no land registry fees. And so on.
10) Total financial liquidity, my cash is not tied up in an asset that is hard / expensive to shift if I want to employ the cash in another use.

I could probably come up with other reasons for preferring renting but those are the main ones. I have owned property in the past (and made a lot of money on it as it turned out). But the experience was stressful, I hated having to take care of all the repairs myself, and I felt tied down. To each his own I guess.

#61 Canuck Abroad on 10.21.11 at 3:34 am

Most homedebtors do not realise that leverage also works in reverse.

Yes, you can out down $10k and if your house goes up $100k you have made 10X your money (booyah!) – before subtracting all the transaction costs of course.

But if you put down $10k and your house falls $100k (just ask the americans, spanish, irish if this is possible) then you will have to come up with $90k just to get out of your mortgage, plus all the transaction costs.

How many people consider this when they lock themselves into such an illiquid asset?

#62 Off the River on 10.21.11 at 5:29 am

N.S. Is lookng great. I’m so happy for my Bluenose buddies. I think it may be a good time for me to pack up and move back from the far East to the East Coast.

One thing to consider, with the recent troubles regarding debt, mortgages and bancruptcy. Would it not be a good idea to get in the rental business? It seems as more people eventually and inevitably flock to renting, the demand will go up. The price should follow as well.

#63 David B on 10.21.11 at 7:00 am

Not sure where things are going in N.S. (HRM) other than up ….. apartment blocks have been going up and up and up … not so much SFH’s as compared to row housing. Construction is up up on business buildings …. I have not got clue where the people are coming from and have for the past few years ….. the big contract is a couple of years away so that is not it, or it would seem that way. In any rate dat’s it

#64 MarcFromOttawa on 10.21.11 at 7:41 am

#28 Marc L

HAM = Hot Asian Money

#65 Victor on 10.21.11 at 7:46 am

Inflation rises to 3.2% in September; core leaps past Bank of Canada target

Friday October 21, 2011, 7:05 am

By The Canadian Press

OTTAWA – Statistics Canada says the country’s annual inflation rate edged up a notch to 3.2 per cent last month as the cost of most consumer goods the agency tracks cost more from a year ago.

On a month-to-month basis, consumer prices rose two-tenths of a cent between August and September.

The increases were moderate, but if there was an alarming signal in the report it was that the Bank of Canada’s core inflation index shot up three-tenths to 2.2 per cent.

That’s the largest annual gain since December 2008, and puts core inflation above the central bank’s two per cent target for the first time since February 2010.

The major drivers of inflation remain gasoline and food. They were up 22.7 per cent and 4.3 per cent respectively from a year ago.

But the agency says other items also cost more, including shelter, the cost of transportation, car insurance, recreation and education, alcohol and tobacco, health and personal care and clothing and shoes.

#66 Hot Asian Money on 10.21.11 at 8:08 am

#28 Mark

Someone please tell me what “HAM” stands for?

Read my pseudonym.

#67 on 10.21.11 at 8:17 am

#63 David:

The people are coming from the rural areas. Same thing happening in NL, only probably worse effect there. Sad. I forget who said this but ‘demography is destiny’. So true.

#68 bigrider on 10.21.11 at 8:21 am

Once again, a great entry Garth.

Leasing however is closer to $3 a square foot. 600 sq ft in T.O gets $1800ish not $1200ish. Still cheaper no doubt.

The average in the GTA is $2.19 per foot. — Garth

#69 T.O. Bubble Boy on 10.21.11 at 8:28 am

@ #43 Stevenson

Very simple reason why people lease cars and buy houses. You have to be on crack to do the opposite in terms of an investment if you compare those. A car loses 20-30% instantly off the lot, a house/condo has a chance and it seems to be doing pretty well wouldn’t you say? There is public transportation, but I guess you could say there is public housing too? Might as well.

Renting is cheaper then carrying a property? Well it better be because why else would you want to help subsidize someone else’s mortgage? Also do you know you will never see that rent money again? It will become sunken cost.

So, to follow your logic — buying a house with 5% down (or less, in the case of cash-back mortgages), and being faced with at least 5%-10% in closing costs if you decide to sell is BETTER than losing 20%-30% on the value of your car? The way I see it, you are instantly the hole for 100%-200% of your down payment unless house prices continue to go up. At least people are realistic with car prices – they know that they will depreciate as they fall apart (unlike homes).

As far as rent vs. own: “subsidizing a mortgage” doesn’t even happen with many places today. For example, take a $1.2M house that rents for say $3,000/month (they do exist, especially in Vancouver).

On a 3% mortgage, the INTEREST alone on that mortgage is $36,000/year, or exactly what the rent would be bringing in.

So, you’re still on the hook for paying all of the principal ($2,700/month), plus the maintenance costs etc.

Even for a standard $350,000 1 bdrm + den condo in Toronto that rents for $1,500: Mortgage Payment @ 3% (assuming 25-yr amortization) is $1650/month, including both principal + interest… add on $350/month in condo fees and you’re at $2000/month… add on $200/month in property taxes and you’re at $2200/month in costs.

Yes – I’ve ignored the down payment in this scenario, but considering that you could plop that down payment in a 5-year GIC and get 3%-3.5%, it should be considered in the cost calculation since that represents lost investment income.

#70 Stevenson on 10.21.11 at 8:49 am

#60 Canuck Abroad

Your a bit blind sighted there. You see only what you want to see and ignore the reality.

1-6: You pay it in rent. Money that is a sunken cost and can never be retrieved. This is a lost in opportunity costs as well. If you owned “historically” as RE appreciates you get your fair share.

7-8: This is simply an income problem and one off where the party can not afford housing in the central areas. Nothing to do with renting or owning.

9-10: Personal preference and no matter what investment you need to take risks. Also any other investment would not be tax free so you need to add that to your equation when considering risk/return ratio. Debt or liquidity is in the perspective of the beholder. You could be in debt because of low rates or you have not saved enough, or you could buy it out completely if you had the cash. Sell or not sell is at what price, not can or not makes it liquidable.

#71 live within your means on 10.21.11 at 8:51 am

Not sure where things are going in N.S. (HRM) other than up ….. apartment blocks have been going up and up and up … not so much SFH’s as compared to row housing. Construction is up up on business buildings …. I have not got clue where the people are coming from and have for the past few years ….. the big contract is a couple of years away so that is not it, or it would seem that way. In any rate dat’s it

Nor do I and many others David. I don’t think our population has increased in our tiny prov. Yet, over the last several years I’ve seen so many condo developments built downtown and TH’s, especially in Clayton Park and even in our neck of the woods – Dartmouth.

Next door neighbour said they’d put their house up for sale last spring – now saying it will be next spring as their children & grandchildren are no longer here. A friend was supposed to put her place on sale (overlooking Shubie Park on a cul de sac) last spring but did not get around to it. She’s an ex school VP & has a consulting business as well as being a grandmother of 2 or 3. Got a great deal on her place years ago, but now finds that it’s costing her money – plumbers, etc. It’s a lovely home for a woman & her dog or a couple. She wants to rent and travel.

If I had my way, I’d sell our home and rent. Not going to happen tho. :-(

#72 Marc L on 10.21.11 at 8:57 am

found it myself
hot Asian money (HAM)

sHAMe on you

#73 eaglebay - Parksville on 10.21.11 at 9:16 am

#56 Foggy on 10.21.11 at 2:38 am

People are blind. Don’t know anything about business and the economy.
Nova Scotia will be lucky to get $5 billion.
Quebec and particularly Ontario will get the bulk of the $25 billion.
Where do you think that the steel and other metal will come from? The paint? The hydraulics? The designs? The electronics? The ammos? The engines? The artillery? The kitchen and accomodation equipment? The transportation?
Nova Scotia will only get some of the labour.
It’s still very good for Nova Scotia but not like it seems on the surface.

#74 disciple on 10.21.11 at 9:31 am

My opinion is that based roughly on prices over 6 years ago, housing values are at least 400% overpriced in Vancouver, and about 100% overvalued in the GTA. So if you are wise you will not buy until values reach 75% and 50% lower levels respectively (or even lower because of violent reversion to the mean). Did I get the math right?

The price appreciation in the past 5-6 years is partly due to hidden inflation and the expanding money supply, there are more dollars chasing the same number of houses. Contraction of the money supply by the banksters will result in asset price deflation, followed by asset confiscation, and asset liquidation. Like tenderized meat, you can only massage the numbers for so long, before it dissolves into a liquid mass not fit for consumption.

#75 Devil's Advocate on 10.21.11 at 9:38 am

#46poco on 10.21.11 at 12:43 am

I can’t tell you with any certainty what the markets will be doing in six months’ time. What you are telling me is that you are waiting for what you believe to be the bottom, or damned close to it, before your buy by your “not buying – yet” comment and your agreement that there are many, many like you. THAT sounds like a pent up demand to me poco.

You see poco, mine is a business with a future. As Charles F. Kettering said “My interest is in the future because I am going to spend the rest of my life there”. So it pleases me that you and many, many others will be buying in the future as near or distant as that may be, because my business depends upon it.

And poco the market IS just fine for even that rented basement suite you may be living in for the time being was bought and will eventually be sold. If bought sometime three years ago and sold today it may very well net the seller a solid 15% net loss. But, before that, the seller your landlord then bought it from might have reaped a 100% profit.

You see I don’t care if prices go up or down so much as I care that I am writing the deals. And there are ALWAYS people buying and selling poco. Not as many today to be true, but that too is not an entirely bad thing.

You see when our markets are robust EVERYBODY it seems enters real estate and the bounty of transactions are diluted across a field of many. Those numbers are today retreating in my favour. And when the market does pick up again there will be relatively few who compete as so many will have given up during the lean times – lean times which typically darkest just before the dawn so to speak. Most people quit whatever it is they are doing at the very brink of success.

The thing of it is poco, I AM in the business and I understand the business. I’ve been in it a while and I know what it does and how it works – you, do not. And THAT is why I am quite content with today, not sentimental about the past and optimistic about the future.

I don’t have a crystal ball poco. I have no idea what the world will throw at us in six months’ time. I have no time for pontificating the future as I am too busy participating in the present. What I can tell you of what has happened thus far is; The decent has slowed significantly, it appears to me we are bumping along bottom, fence sitters are growing weary waiting for prices to fall further, prices have not capitulated nearly so much as posters on this “pathetic blog” believed they would have by now, there are still too many “green” agents vying for the business – which is about my only complaint (I do believe the prerequisites to entry to this business should be greater), people are still buying and selling – not as many but plenty enough.

Why just the other day a buyer insisted on paying 10% more than we cautioned them the home was worth in today’s market because they “had” to move, wanted an owned house, and it was the only reasonable purchase option available to them. As I said we cautioned them that we felt they were paying too much. They think prices will continue to rise. I don’t have a crystal ball and no way of saying definitively that prices will not continue to rise. I do not predict the future I deal only in realities and the reality of that situation is if we didn’t do the deal they would have found another who would have. I am sure you might think that predatory of me but believe me we counselled them as best we could. Ultimately the decision was theirs.

My point is for every poco out there there are two of contrary thought and millions who are oblivious to either extreme. In a city the size of Kelowna there are typically on average about 200 homes bought and sold in any given month. Thus far this year to date there have been 2,779 homes sold in Kelowna with each successive months volume; Jan 196, Feb 235, Mar 323, Apr 297, May 340, Junh 335, Jul 331, Aug 275, Sep 300 and October month to date at the 20th, with still a third of the month to go 147.

On price median home price in Kelowna in 2001 was $159,500, 2002 – $169,800, 2003 – $191,416, 2004 – $232,900, 2005 – $ 272,500, 2006 – $ 319,900, 2007 – $ 370,000, 2008 – $398,000, 2009 – $ $367,300, 2010 – $ 375, 000, 2011 YTD – $367,500. So from the very peak prices of 2008 we have dropped but 7.66%. I personally do call for more but not so much and must conceed ultimately to the realities of today.

Despite the warnings of this “pathetic blog” over the past three years we are doing just fine thank you very much. I dread to think what might have been otherwise were we to have heeded your advice three years ago.

Live for today… plan for tomorrow.

My advice then, as now, is to diversify so all of your net worth is not in real estate. You write a lot, but listen little. — Garth

#76 bigrider on 10.21.11 at 9:40 am

#68 Garth to Bigrider. “average is 2.19 a sq ft in the GTA”

Yes but closer to $3. in T.O which is why I said T.O.

500-700 sq ft downtown condos fetch $1600 to $1800 a month in rent.

#77 brad in saskatoon on 10.21.11 at 9:44 am

How can renting ever be better than owning a property? if people would live within your means.!
If you do not mind driveing older vehicles and owning A older house.
|Everyone around me i see debt debt debt..we are all slaves to the system.
i persONANNLY own 1 rental house worth today about $120,000 and my family house worth about $240,000 drive a older car .
i have my own concrete business which is worth about $125,000 k. i have $40,000 in cash i owe not a penny to anyone . i paid for everything as i had cash to do so . except my own housse which i mortgaged for years(paid now) , i hated be a slave to debt so i made it my personal goal to pay everything off.
i am 33 years old my wife is a stay at home mom with our daughter (prago with our second ). i would like some help as too what to invest in as i have no other investments and i see a not so bright future in saskatoon .
now i just want to be around for my kids too watch them grow and , still work ( get board ) but not have to work as hard as i have .
any advice ?
thanks been lurking on this site for A few months , found some intersting stuff on here

You have $260K in real estate and $40K in cash. Apart from your business (worth what someone will pay), you have 87% of your net worth in one asset. That should worry you, especially in Skatch. — Garth

#78 Devil's Advocate on 10.21.11 at 9:56 am

BTW those stats contained in my previous post are directly from the Okanagan Mainline Real Estate Boards MLS System Matrix database. They are not from a press release they are raw numbers for residential unit sales. I used to keep track myself as I like raw unmanipulated data for my own purpose. After years of doing so I found the MLS data to be accurate enough for me to rely upon. I’d be happy to provide screen shots of the process if there was some way of doing so other than emailing me directly at [email protected] for some form of audited proof.

#79 Ex-Cowtown on 10.21.11 at 9:59 am

Spoke to our old Cowtown neighbors yesterday. Ground zero for Alberta’s oil patch $$$. High end neighborhood filled with $1 M+ houses. They said there are more listings than they’ve ever seen in the neighborhood and they’ve been there for close to 30 years. As GT would say… crickets… nothing’s moving.

Another neighbor is sitting on their house, empty. No takers, no offers, few tire kickers. And this is after several price reductions.

So all you Roughrider’s fans, you better explain to me why SK RE is going to go up, up up because of oil prices while in Cowtown where the oilpatch investment decisions are made and the $$$ people are bailing… or trying to.

#80 Young Old Fart on 10.21.11 at 10:01 am

you can rent a new condo in Toronto for $2 a foot instead of spending $500 a foot to buy it

Next time I am asked why I rent, that will be my answer. This is the most clear explanation of the difference between renting and buying I have heard.

Ya, but, in 20 or so years you will own it when it is worth ?????

Question you have to ask is are you in short or long term?

For example, my current house in Canada cost me half a mil 10 years ago. Worth a mil today. I have paid off the mortgage a few years ago and my rented basement covers taxes, hydro and gas with a bit of change left over. I plan to own and live in this house (at least during the warm months) for another 15 years. If the market corrects 25%? I am still good. What will it be worth in 15 years? Don’t care right now. In the 10 years that my renters have been paying me a grand a month, I have replaced a few light bulbs, a couple water filters and a washing machine that came with local and provincial rebates. Total under a grand for 10 years worth of rental cash.

So like I said, you looking long or short term……?

In 30 years a condo building could well be in need of major structural repairs, over which unit owners have no control but must finance. This potentially devastates condo values and steals equity. A renter is impervious to this, while an owner has spent 25 years paying more every month in the hope of a capital gain. Your words are inexperienced. — Garth

#81 JohnnyBravo on 10.21.11 at 10:06 am

So Macquarie Research said, “The cost of owning a home […] is near alltime highs. With interest rates more or less at record lows this is somewhat surprising.”

The biggest reason the cost of home ownership is near all-time highs is because prices are near all-time highs, which was CAUSED primarily by record low rates. Your interest rate may be relatively low, but the principal to which it is attached is huge.

It’s sort of like saying, “Obesity rates are at all-time highs even though food costs are at all-time lows.”

And their slogan is: “Providing valuable insights into major markets.”

Perhaps MR has also gotten caught up in the now normal finance meme that encourages debtors not to worry about price, because all that matters is the monthly payment.

#82 Van Isle Renter on 10.21.11 at 10:06 am

In our community the word is that listings are up 10X above normal. Our realtor friend who knows that we are renters who could buy whatever we want for cash :) was extolling the virtues of a “buyers market” and that we should jump in now.

When I told him that prices are falling so it makes no logical sense to buy, at least he had the common sense to agree and start talking about the weather.

The only thing I smelt in the air was desperation.

#83 Devil's Advocate on 10.21.11 at 10:06 am

My advice then, as now, is to diversify so all of your net worth is not in real estate. You write a lot, but listen little. — Garth

And I have listened Garth. It is not your advice which prompted you to call this a “pathetic blog” and certainly not your advice to which I retort but the incessant howling of your pack of followers who I venture to say are the ones who do not listen to you as they amplify and distort your message. It is they who I venture to set straight for you and I my friend, as you well know, are of closer opinion on the matter than they know.

#84 Bobo on 10.21.11 at 10:07 am

“Today the same house costs seven times what a principal makes in the GTA; the most unaffordable point in history”

Did your mother work too? If not, add in what a typical working woman makes today to get full housheold income. No doubt price-to-household income ratios are high, but let’s not over dramatize it…

How can I ‘over dramatize’ the reality of a family with household income of $128,000 needing seven times earnings to buy that Toronto home? This is twice the average salary. Is it not dramatic enough on its own? — Garth

#85 disciple on 10.21.11 at 10:26 am

I was engaged in my weekly ritual of cleaning the crud off my iphone with a pin and sticky tape. You know, where the charging cord attaches and around the earphone jacks and along the sides of the touchscreen and in the corners of the protective case. I assume it’s a combination of lint, dirt, moisture, etc…

Why do we clean the dirt off? Will it make the phone work better? Maybe. Maybe not. It just feels better. Made me think of how every waking moment we are in a sense, keeping the dirt off. The way we use clothing, wash up, prevent/remove dirt buildup on our various precious assets while we use/waste precious water. Think of all the consumer products devoted to just this one purpose alone. Most of us live to clean (among other things).

I’m not saying it’s wrong or right, but in the end, what happens? We are literally covered in dirt, or turned to ashes which make their way back to dirt. Ironic? It just all seems meaningless, nothing really matters, anyone can see…. nothing really matters…. to me…. Freddy Mercury.

#86 Aussie Roy on 10.21.11 at 10:33 am

Aussie Update

Why not let us build some more shoddy places

BUYERS of new apartments could face higher levies and a drop in property values as a result of changes to the period in which developers have to offer cover for shoddy work

Investor activity in the housing market remains subdued, according to the latest figures from the Australian Bureau of Statistics. Although the value of housing loans for investments rose 11.5 per cent in August compared with July, levels are still well below those of a year ago.

Housing investment peaked in June 2010 with $8.3 billion in loans approved. The August 2011 figure was $6.8 billion.

So far in 2011, $49.4 billion worth of housing investment loans have been approved across Australia. This is 10.2 per cent less than the $55.1 billion approved for the same period last year. Although investor activity is down on last year, nearly $700 million in loans for new housing was approved in August, which is the highest figure in 18 months.

But, but, it’s all good infestors are about to re-enter the market – LOL

TWELVE Melbourne suburbs have been dumped from the exclusive magic million club, as their median house prices fall below a million dollars.

New research reveals further evidence the top end of town is suffering in the property slowdown.

Windsor, Prahran and Port Melbourne all tumbled from the exclusive list, with median prices below $880,000 for September.

Robert Larocca, of the Real Estate Institute of Victoria, said the blue-chip suburbs often saw a lot of movement.

#87 Bobo on 10.21.11 at 10:35 am

When you adjust these price-to-income ratios for mortgage rates, affordability is pretty close to the long-run average, that’s how they’re doing it.

Note: I fully agree that Cdn housing is a poor investment right now for anyone expecting to make money in the next decade, given where rates and valuations are. But at least there are fundamental reasons why prices have done what they’ve done. The real ugly messes are after rampant speculative bubbles (see Toronto 1989, USA), and that’s just not happending in 98% of this country.

#88 Young Old Fart on 10.21.11 at 10:46 am

#45 Carp on 10.21.11 at 12:32 am

…..Not to mention opening/closing a pool by the hot pool boy…..

My wife has now given me a 5 year window to proved home prices will correct + very happy with the castle and land – hence happy life.


Am I reading that wrong??? :))

#89 on 10.21.11 at 10:52 am

Garth, how should one go about diversifying away from being overweight home equity? What are the mechanics?

We’ll review that soon. — Garth

#90 Form Man on 10.21.11 at 10:57 am

#180 Devil’s Advocate from yesterday’s post

I am who I say I am, and I have given you plenty of clues to figure out who I am. More amusing to me is why you would doubt. Because I don’t fit the ‘mould’ of a typical Kelowna builder (realism rather than optimism, reliance on facts rather than hope ) ?
I regret my comment about realtors being run out of town, obviously we need realtors to sell our products. What I am troubled by is the excessive run-up in housing starts and prices which inevitably leads to a crash. It is true that Kelowna is selling about 300 houses a month. It is also true that there are almost 5000 homes on mls and at least a couple of thousand more not on mls ( in-house marketing such as my development ). It is also true that the population of the central Okanagan is not currently growing ( BC government census stats ). Given these facts, it is obvious that it will take considerable time ( and price drops ) to clear the excess inventory. Surely we would all be better off if the housing industry were on a more sustainable path, without the economic carnage brought on by overbuilding. In my personal situation, it is going to take as long to sell the last 10% of our homes as it did to sell the first 90%. I have had to let most of my best people go. They have not found equivalent paying jobs ( if they found jobs at all ). The strain on families is immense. I believe a lot of this could have been avoided if not for the market distortions caused by CMHC ( and the lax lending standards as a result ). It is nonsense to think that continuing to build at a faster rate than households are being formed is a good thing. Currently there is a narrative being propogated in the local municipal election; that the Kelowna’s economic woes are due to city council not being developer-friendly enough…….seriously ? If this what people believe, then Kelowna has a long way to go in developing a diverse, robust, economy……

#91 disciple on 10.21.11 at 10:57 am

I love it when others disagree with me. Some of my greatest discoveries in my life have occurred at the precise moment when someone dared to diverge from the path of my own understanding. LOL.

I wasn’t necessarily wrong and at the same time not even close to being right, but forks in the road appeared whenever someone slapped my face simply by sharing their viewpoint, and I always took the fork not yet traveled. In that sense, I have no guide, unfortunately, nobody to show me the way.

The Ancient Mariner spoke of this when stating, “water, water everywhere but not a drop to drink”. Thousands of years of accumulated knowledge and yet not a drop of wisdom. You have to WANT to find it. Where is your thirst?

So don’t be afraid. Time only exists in our third level of density; therefore, remove this self-imposed constraint on your quest. In fact, remove ALL self-imposed constraints. Be free!

#92 Devil's Advocate on 10.21.11 at 11:03 am

Prices are a lagging indicator they mean little. It is volumes which you want to watch. Price follows volume up and down. Volume started to ramp up in 2002, peaked in 2007 at 66% higher than that of 2001 and has since 2009 returned to pre-bubble levels. Until volumes show marked decreases from traditional norms I can’t see any reason to expect prices will capitulate as they have not during these last three years of volume stability.

#93 Moneta on 10.21.11 at 11:06 am

am 33 years old my wife is a stay at home mom with our daughter (prago with our second ). i would like some help as too what to invest in as i have no other investments and i see a not so bright future in saskatoon .
now i just want to be around for my kids too watch them grow and , still work ( get board ) but not have to work as hard as i have .
I’m more worried that he’s 33 and already looking to slow down with young kids and a wfie not working.

#94 on 10.21.11 at 11:14 am

#84 – ‘Typical working woman…’

You raise a point that I think is central to present day family economics. That is, most families NEED two incomes just to get by. The days of a single family breadwinner are over. The Canadian birth rate is decreasing, death rate increasing (google it). These trends will not reverse any time soon. The declining birth rate, I believe, is mainly due to the need for two incomes. Hard to be a good parent and hold down a fulltime job. You can do one or the other but usually not both well.

#95 Smoking Man on 10.21.11 at 11:14 am

#59 Where’s The Money Guido???? on 10.21.11 at 3:09 am

Newbie you’re going to losse your shirt, 99% of people getting into day trading will lose.

I paid my dues too…but stuck with it and learned.

You can practice trade all day long but when you have skin in the game, just watch the new personality come out of nowhere and mess up your stratagy.

I will post instructions on my blog later this week…

Simple: we have in this market 5% shifts in direction every week. so if you can capture 3.5% gain weekly. 50k x a 4 Margin gives you 200k to play with. Compound your winnings and in 52 weeks after you pay back your margin you are at about 1 million…….

The volitility wont last a year.. even if you can get 1% a week you can still double up on your investment.

Compound interest is a beutiful thing when in your favore.

#96 disciple on 10.21.11 at 11:17 am

Similarities between a Birth Certificate and a warehouse receipt:

– Date of issue
– Serial number
– Receipt number
– Description of product
– Authorized informant

A certificate is simply a document attesting to the truth of something, in this example, attesting to the truth of the existence of the warehoused goods or to the existence of YOU. Who keeps the original statement of live birth documents? You certainly don’t. Your owners do. They are banker families, the descendants of the ancient sea-kings.

YOU are the commodity being traded on the markets. You are the money. YOU are money. You ARE money. Use this knowledge to your advantage, you’re welcome.

#97 Devil's Advocate on 10.21.11 at 11:18 am

#90Form Man on 10.21.11 at 10:57 am

You need a new marketing team – if for no other reason than to tell you where the market IS not where it was and not where it might be headed.

#98 Peakoilist on 10.21.11 at 11:24 am

#85 disciple
I swear my car always runs better after it’s been washed…and following your #91 advice, I think I’ll be naughty(maybe a little dirty) this weekend. I think that ties back to your first point quite well. thanks.

#99 VicBC on 10.21.11 at 11:25 am

BC wins 12 billion contract.

The extra 4 billion is for cost overruns

I thought it was HST. — Garth

#100 888realtor on 10.21.11 at 11:31 am

“Of course, even if rates don’t jump, the amount of new debt people can absorb is not endless.”

Isn’t it one of the principals of monetary policy – debt can be absorbed for a very long time as long as there is a possibility to refinance? Manipulating money supply and using other monetary policy methods, government can provide possibility for refinancing practically “forever”.
So, it seems that there won’t be any interest rate increase in the near future as rising interest rate would make it impossible to refinance the current debt and it would bring economy to very unstable and uncontrollable condition.

I’d worry about tomorrow, rather than today. Rates will not stay low forever. — Garth

#101 disciple on 10.21.11 at 11:36 am

According to Burke’s Peerage, the foremost authority on aristocratic lineage, the royal families of Europe are descended from the prophet Mohammed.

What? That was my reaction, too. The history we learn in school is THEIR history, with the juicy parts left out of course. OCCUPY history classrooms.

#102 penpal on 10.21.11 at 11:49 am

@ # 14 T kid

Garth forgot to mention that not only are you rentinga $ 500 / foot condo for $ 2 / foot, but the idiot “owner” is spending from another $ 0.50/ft to $ 1.00 /ft to hold on to it!!!!!!!!!!!!!! (taxes, common expenses, maintenance for tenants, etc. WHICH WILL ONLY INCREASE OVER TIME)

Picture all those “investors” borrowing their brains out for a piece of this action.


More like mathematical morons!


Sh&t, now that is funny.

#103 Van guy waiting on 10.21.11 at 11:50 am

Garth, prices are dropping at current interest rates. Rate rise and will pop this baby hard. So is it possible still for interest to rise knowing that risk?

Of course rates will rise when the bond market believes current threats are dissipating. The prime will not remain at 3%. That should be obvious to everyone. — Garth

#104 Form Man on 10.21.11 at 11:56 am

#97 Devil’s Advocate

Why didn’t I think of that ! Unfortunately our product is targetted to a specific market ( wealthy Albertan retirees) . That market has all but disappeared, and we cannot change our product. We can, however, lower our prices……and we have……more than once……there you go, lots more clues !

#105 Kilby on 10.21.11 at 11:59 am

#9 Smartalox.

Good point about shipbuilding, condos and noise at the foot of Lonsdale. We are leasing in one of the partially filled buildings. Just with a few shifts going repairing ships the noise is annoying but the dust from sandblasting coats our deck floor and railings in just a few days and we are on the 7th floor. They are proposing two more buildings even closer to the water. Would you pay to be 50 meters from a 400 foot ship being sandblasted and painted?

#106 penpal on 10.21.11 at 12:08 pm

@ # 43 Stevenson

You have it backwards, as usual.

If you lease a car, you generally don’t have the money to buy it, ergo, you don’t have any real money.

Anybody that needs to lease a car in order to”have that money working for them elsewhere” doesn’t by definition, have much money.

Among my wide acquaintenship, virtually every truly well-to-do person I know with MEANINGFUL assets, own their vehicles outright REGARDLESS OF PURCHASE PRICE, without exception. They would have it no other way.

I’m talking about people that don’t live off “cash flow” of a paycheque or their struggling businesses, like Realturds and other conspicuous consumers or other “50 cent millionaires”.

I am beginning to believe that you may be mildly retarded.

#107 Young Old Fart on 10.21.11 at 12:22 pm

….. Your words are inexperienced. — Garth


And yet, here I sit at 49 with RE in 3 countries, all paid for, some paying income every month, with a nice bank account(s) to live from for the rest of my life…..

Your right…..I don’t know squat……. ;)

The comment was about the long-term investment potential and costs of condo ownership. Have you experience with condos? — Garth

#108 GPC on 10.21.11 at 12:36 pm

From the head RE pumper in Edmonton Chris Mooney:

“Your local RealTOR® isn’t always right. We’ll gladly admit when we’re wrong. For instance, the REALTORS® Association of Edmonton predicted a
three percent increase in the price of single family homes in 2011. Turns out, that
was a conservative number.

Single family homes have actually increased in value by five percent, through the first three quarters of the year!

That’s great news for the local economy, and REALTORS® welcome that extra two percent, even if it throws our batting average off when it comes to predictions.”

Alright, so your saying house prices have gone up, which I suppose is good news for sellers, but don’t you also represent buyers? I am sure that they are very happy to be paying bloated unjustified prices for shelter…

Anyway, thanks Chris, for the rosy economic outlook, while ignoring all fundamental economic indicators! I’m sure we’ll just keep on buying houses because everything is so great!

Oh sorry there’s more. Here’s the rest of what the impartial Mr. Mooney had to say, I love his ability to spin, almost fed politician level:

“As is often the case, an increase in sales goes hand in hand with the increase in prices”. (Editor’s note: so charge me more and I will buy more? Sounds like a good deal to me!)

“The numbers still indicate that properties in the lower half of the price range are selling faster, so sellers will want to make sure they’ve got
an effective price strategy to make the most of these trends.
REALTORS® remain very optimistic about the future of the local market too, with no reason to believe that prices are going to soften through the final three months of the year.

And we usually get it right. Not always. But usually.”

(Editor’s final note: Well sure you get it right when you are in charge of fixing prices… these comments seem so grade school as to be laughable but the sad part is, he has the voice and people are listening…)

#109 Davey Boy on 10.21.11 at 12:37 pm

Re: Disciple

Don’t forget “Dust in the Wind” by Kansas. Although for the most part I think pushing spirituality on this blog is rather pointless.
Enjoy your postings.

#110 Daisy Mae on 10.21.11 at 1:03 pm “That is, most families NEED two incomes just to get by. The days of a single family breadwinner are over…”


Two income-families has been great for governments, all levels — twice the taxes. It’s been great for big/small business — more disposable income. Whether or not it’s been good for families is debatable.

An economist years ago stated that if the wifes’ income wasn’t substantial, it wasn’t worth it…after factoring in daycare costs, convenience meals, clothing costs, fuel, etc.

#111 eaglebay - Parksville on 10.21.11 at 1:03 pm

#99 VicBC on 10.21.11 at 11:25 am

Any cost overrun this large means that the Government of Canada would take over Seaspan’s shipyard.
Check it out.

#112 johnny5z on 10.21.11 at 1:08 pm

I don’t know what is more entertaining – this pathetic blog or Nigel Farage, of the UK, taking on the Europeon (intended) parliament.

#113 JRoss on 10.21.11 at 1:19 pm


“So from the very peak prices of 2008 we have dropped but 7.66%. I personally do call for more but not so much and must conceed ultimately to the realities of today.”

The median is determined as much by the product mix and the amount people are able to borrow as price changes on individual properties. You should know that and thus are either ignorant or disengenuous.

The landcor price index shows that prices are actually down more (in some cases much,much more) than 7.66%. Anyone perusing MLS in Kelowna without an agenda to reinforce will have noticed the same.

#114 smartalox on 10.21.11 at 1:23 pm

@kilby, no, I wouldn’t. I hope that your lease is flexible enough that you can negotiate a fat rent reduction in exchange for staying through the din. At least you’re not in your landlord’s shoes: a worsening neighbourhood, and increased competition will make it harder to sell!

Can’t blame them for buying though. When those lower Lonsdale condos were built, no one ever expected shipbuilding would ever return to BC, let alone North Vancouver!

#115 Bigrider on 10.21.11 at 1:34 pm

Scott mcgillivray the RE guru. What do you think of the story he tells people Garth? Anyone?

Isn’t he a TV carpenter? — Garth

#116 disciple on 10.21.11 at 1:41 pm

My grandma enjoys the oldies, the old doo-wadda-bee-bop rama dama ding dong. It’s all good but when I was six, this music was probably already vintage archive going yellow in radio station storage rooms. I wonder, if and when I’m 85, I’ll be doing the wiggle and cranking out the “oldies” – would my grandkids say, “grandpa, sit down, don’t hurt yourself”. Can you imagine?

“Mama said knock you out”
“Back in black”
“Drop it like its hot”
“Smells like teen spirit”
“You down with OPP”
“Bloody Sunday”
“Any Phil Collins song, doesn’t matter”

My kids have to put up with stupidity like, “I’m sexy and I know it” with the associated soft porn that passes for acceptable mainstream popular music videos.

#117 disciple on 10.21.11 at 1:45 pm

I’m noticing more listings for homes that are both “for sale” and “for rent”. For example, I saw one the other day that is asking 2200 as rent, but is going for 750,000 for sale.
Wow. What a disconnect.

#118 Beach Girl on 10.21.11 at 1:54 pm

Good day, not for that Liberian gentleman. But, he did look good in the day. Mick Jaggerish, kinda. Love that new song. Move like Jagger.

Anyway, I rented properties for well off people in the 80’s. Mostly in the Yorkville and Annex neighborhoods. I personally resided on Lowther Avenue. (Yorkville). (I am into history, it was part of the Baldwin family, MAJOR Mansion) (not a phony Disneyland McMansion).

It was an educating experience.

But for all these lovely people saying renting is amazing. I believe most of that is crap. Me and Miss Daisy live in our own home, mortgage free, no one can complain about me or my lovely companion. Nor do I have to worry that the landlord is going broke, and I have to uproot constantly.

The salt water pool is closed. Now I have to mingle with the YMCA crowd till summer.

#119 Form Man on 10.21.11 at 2:02 pm

JRoss #113

couldn’t agree more…..

#120 spaceman on 10.21.11 at 2:04 pm

#82 Van Isle Renter

Cash is king in Victoria, ( and elsewhere) if you have a pre-approval letter, and nothing to sell, there are 2 subject to’s removed, that the sellers really like. the Dominoe affect is really affecting deals here, and nobody in there right mind buys without a subject to on their existing property, do they?

I am renting in a great location, cheap, no reason to move, cash in hand pre-approved… let the games begin…

#121 Stevenson on 10.21.11 at 2:11 pm

#69 T.O. Bubble Boy
#106 Penpal

No one is asking you to lease a car. Very simple a car depreciates instantly the time you buy it off the lot. A house as T.O. bubble boy said “unless” house prices keep going up your in a hole? Well there you go, a car is a horrible purchase and house is the better one. I do lease my car and drive it whenever I am in Canada, but it’s write off.

Mildly retarded? Did you really need to start making statements like those now?? Shows how weak and insecure you are about your points. Also coming from someone is somewhat in denial and obviously wrong doesn’t really mean much either.

Btw for the record I am not a realtor. I did however make a lot of money off real estate and continue to do so. Rent from one tenant is not going to cover your mortgage or bring additional income. Some of you here think way too simple minded. Lets put it this way unless rent drops to a point where it’s more affordable for students to buy then rent. I am pretty safe.

Proletariats – Crunch these numbers 5K month on each 350K properties. Forget the appreciation as its not in the questionable bubble areas.

#122 Van guy waiting on 10.21.11 at 2:16 pm

Oh baby, me so horny looking at this stat. I warned my friends and they just laughed at me. “it’s different here in Richmond”. HAM is here not to worry. SFH is toast here with 15 moi and list/sales ratio of 6.5%. I will be posting condo #’s later for Richmond which I feel is even uglier than sfh.

#123 Devil's Advocate on 10.21.11 at 2:27 pm

#104Form Man on 10.21.11 at 11:56 am

Still not enough. I have a hunch, but you are not distinguishing yourself so much from any other developers who has lowered their prices of late, and there are many, not because the market has fallen from under them but because they were asking too much to begin with and came to realize so too late.

Problem with development is the lag between project conception and implementation. The market can change a lot in the 3 months it takes to plan a single house let alone the 6 months afterward that it takes to build it. Ask any one of the many who had a spec. or two on the go in the spring of 2008.

That you claim to be a bigger player than a one off spec. builder does not necessarily make you any the wiser, just a gambler of higher ante. Don’t gamble.

Always, always, always underprice the market. You never go broke making a profit. Underprice the market at project conception. Don’t dwell on the past and don’t try to forecast the future. If you underprice at inception and the market value goes up – bonus. If you underprice at inception and the market goes down you will have built in a cushion. If you can’t do that don’t do it. It is what it is right now.

Too many developers were too greedy and got caught.

You need a new marketing team.

#124 T.O. Bubble Boy on 10.21.11 at 2:36 pm

@ #121 Stevenson

My point was about “rent paying for someone else’s mortgage”… this is absolutely NOT true for many rental properties today, because rent levels are not high enough to cover costs (and in some cases not even the mortgage interest payments).

And – your logic that RE only goes up is exactly the bubble mentality that is leading the market off a cliff. Unless the RE magically goes up 10% per year to infinity, the math simply doesn’t work because the “owner” is losing so much every month.

What you are promoting is basically the “negative gearing” concept that fueled the Australian housing bubble (which is now crashing, because all of a sudden house prices stopped going up).

#125 T.O. Bubble Boy on 10.21.11 at 2:44 pm


Exhibit A: Toronto, Ontario — 194 Soudan Ave.

This is a semi-detached house on a busy street, gutted/reno’ed and covered in stucco about 1-2 years ago.

Recent listings for this house:

September 25, 2010: $850k
October 6, 2010: $799k
November 18, 2010: $789k (-7.3% below original price)

one year passes (not sure if this place sold, or was taken off the market)

October 20, 2011: $899k!!!

For all the jokes about the Vancouver bubble, and HAM buying up houses just to sell them months later for profit, this is exactly the same insanity happening in mid-town Toronto.

#126 Devil's Advocate on 10.21.11 at 2:44 pm

#113JRoss on 10.21.11 at 1:19 pm

I tend to agree with you that “The median is determined as much by the product mix and the amount people are able to borrow as price changes on individual properties.” But median is a better measure than average wouldn’t you agree.

Also each neighbourhood is unique those stats are for the whole of the Central Okanagan (Peachland to Oyama and all in between). Each neighbourhood most certainly has it’s own unique dynamics there are some which never saw a price decrease at all and others which have seen well more than the 7.66% median since 2008.

Want to talk specifics? Give me your general address and I will tell you how your neighbourhood has fared.

#127 Young Old Fart on 10.21.11 at 2:54 pm

The comment was about the long-term investment potential and costs of condo ownership. Have you experience with condos? — Garth

Actually, yes. :)

I was thinking houses but your argument has merit. Condos definitely do NOT return as well as houses in the longterm.

That being said, the condo I am sitting in right now? I could sell today for 5 times purchase price after 15 years.

You are just so much smarter than everyone. Must be a burden. (So, why not sell and collect the gains?)– Garth

#128 poco on 10.21.11 at 2:54 pm

#75 DA
As Garth said “you write a lot, but listen little–which translates to “you don’t comprehend anything”
i’m not looking for the bottom as my post said –it’s too far off—what i said was you’ll be posting that we’re at the bottom far sooner than i will(you know to keep the BS going)and that’s exactly what you did and said in your post #75–if you conduct your business on “sounds like pent up demand to me” you’re in more trouble than i thought

now , why do you and many of the other posters on here, when trapped in a corner like a rat, have to try and “DIS” all the renters on here by saying something stupid like you did —
“And poco the market IS just fine for even that rented basement suite you may be living in for the time being was bought and will eventually be sold.”
–nothing wrong with renting a basement suite,watching the value of your non asset decline in price, month after month—mine is a condo –new when i moved in–1000 sq. ft.– 6 new apps–2 pkg–you know–everything one needs–but the best part is it costs me 15% of net income–you try to do that presently buying in this delusional market
and you’re right it will eventually will be sold but not for a long long time, and the owner will take a loss if selling in the next few years–pre sale cost of these units 2007-2008=389.9k—-last one that sold went for 304.9k
my landlord is underwater, as are many many owners in the tri cities—spin that in your crystal ball and tell me it ain’t so !!!!
you said…
The thing of it is poco, I AM in the business and I understand the business. I’ve been in it a while and I know what it does and how it works – you, do not.

……you have no idea of what i do or did in the past–so i don’t think you can comment that i do not know or understand how the market works—–and from many of your previous postings, i don’t think you do understand it as much as you think you do or spend enough time analysing what’s really going on—or are you now admitting you were lying to the dawgs for the last couple of years regarding the wonderful housing market–because you have been wrong !!!–Your track record hasn’t been that good

i get the same info for my areas as you do–i have good sources–and as i said before –it ain’t looking pretty
you said—Why just the other day a buyer insisted on paying 10% more than we cautioned them the home was worth
when you start telling me a bullsh*t sounding story like that, things must be pretty slow

Live for today… plan for tomorrow.
exactly what i’m doing !!!!!

DA –you keep on believing the market’s fine and keep repeating to yourself “Things will get better”–good luck with that !!!!

#129 Little Phil on 10.21.11 at 2:59 pm

What about the housing market in Ottawa? I’m contemplating buying VS renting. Any advice would be greatly appreciated.

Why buy in a government town on the eve of austerity? — Garth

#130 Habs 76-79 on 10.21.11 at 3:03 pm

Young old fart.

You claim you bought a $500,000 home ten years ago and paid off the mortgage in less than ten years. Ok how did you do that? Was it a 5% down situation upon buying the house? If so the income you made to be able to pay off the large mortgage in less than ten years means your income must be much higher than the Cdn. avg. and thus makes your story moot.

If you do no have a much higher than avg. income then you either did not finance 95% as most CMHC mortgages are and must have come into money elsewhere, INHERITANCE MAYBE??? If it was inheritance then you DID not pay off the mortgage totally yourself in less than ten years, your passed on relatives leaving you such a big inheritance paid off most of that mortgage, making your story not typical nor avg. and thus moot.

On top of that you can’t even enjoy using your whole home, you have had to rent out a chunk of it to a renter and that there is a cost if not monetary to such a situation. It’s like buying say a Corvette Z06 and having another person use it say 30-50% of the time. Sure they may pay you to use it but you who bought it is relenting an amount of time that YOU can use it as a result.

#131 zeeman1 on 10.21.11 at 3:06 pm

Good posts lately Garth – Concise and meaningful.

Smoking Man, I like you better sober. Not so self indulgent and nice and conspiratorial.

Disciple you’re good too when not being all new age and crap.

#132 Canuck Abroad on 10.21.11 at 3:12 pm

Stevenson – I don’t believe you are not a real estate agent. There is no other explanation for your silliness.

Don’t you think we have all heard (hundreds of times, from trolls, parents, neighbours and all sorts of other busybodies) the daft argument that rent is throwing away money and you are just paying off someone else’s mortgage? Do you think you are presenting some new concept? If you have a mortgage you are renting cash from the bank. So whether I am renting a property from an owner or you are renting cash from a bank, what is the difference? If you have bought the house solely on the expectation that its value will appreciate, you have bought a future. An illiquid one. Good luck with that.

I’m not going to disclose my profession, but let’s just say I don’t need to be lectured on RISK, financial instruments, asset allocation, portfolio management or tax planning. Good luck with your house(s). I will keep myself mobile.

#133 City Slicker on 10.21.11 at 3:27 pm

In 30 years a condo building could well be in need of major structural repairs, over which unit owners have no control but must finance. This potentially devastates condo values and steals equity. A renter is impervious to this, while an owner has spent 25 years paying more every month in the hope of a capital gain. Your words are inexperienced. — Garth
Garth makes a good point here. I read in a Calgary paper about the Bella Vista condo, where unit holders are on the hook for $thousands$. And I mean $77-189K each. Unbelievable!

Well here is a link to it:

Careful when purchasing older suites.

#134 Habs 76-79 on 10.21.11 at 3:47 pm

2 more cents…

That house you think will be a 100% positive investment is not likely so, if I may?

The home you bought must over the course of the term you will mortgage it (lets just say 25 years) appreciate in monetary value at a rate higher than the total financial costs you will pay, principle + compound interest. BUT! not only just the financials but the guaranteed ever increasing property taxes you will also have to pay over that 25 year period. If it’s a condo or town/row house you will have strata fees which will likely go up over time too. If it’s a house you will have to budget for maintenance costs over 25 years too. ALL OF THESE COMBINED MUST BE LESS THAN THE END RESALE VALUE OF YOUR HOME AFTER 25 YEARS! If not that investment was a LOSS and if you sell it even to down size you will incur further closing costs even on the down sized unit which BTW probably appreciated in its resale value (if for discussion you stay in the same locale) after 25 years too.

You did not likely come out ahead. Sure you cashed out on the first home and yes you have money sitting in a bank account . You can use it as I said to buy a another home or you can choose to become a renter but odds are you did not come out ahead as I noted above. Even if you did it’s not likely near as much as many other possible investment vehicles.

Buying in a bubble market will only make the pain worse. Even based on historical norms like for much of the last 100 years in housing you as I said do not really come out ahead.

If you wish to buy a home, FINE! buy your principle residence as a PLACE TO LIVE IN! It can be a pleasent and nice way to live life. Buy only what you truly can afford and do your best to have a good down payment and as short time of mortgage as yo can truly live by.

If you have the where with all to buy 2nd, 3rd + properties to rent out maybe in a balanced market not a bubble one you can make some cash. But being landlord is rife with problems and responsibilities that can cost you $$$$ and eat away any real investment in these holdings too. Bad/bothersome tenants, possible drug making or grow op homes and yes, many of these guys can hide such for a while and the damage of drug/grow op home will cost you BIG TIME!

You will have to declare taxes on these homes too and they also are subject to the short and long term whims of the markets they sit in. It can lead to restless nights. But, if you are a good and professional landlord and do your best to have good tenants, don’t treat the like crap and are attentive to working with them, you may come out looking good in these investment properties.

#135 Bill Gable on 10.21.11 at 3:47 pm

New acronym for Vancouver homebuyers – HDM -hot dumb money.
Sales have fallen off a cliff.
VREB can bleat all they want – the jig is up.
Vancouver is back to endless rain, now for another 9 months of grey.

#136 Form Man on 10.21.11 at 3:48 pm

#123 DA

Our homes are pre-sold and built to order. We are almost complete, and we are still selling ( very slowly), but I consider we are one of the luckier ones. What you cannot deny is that the Kelowna market is experiencing a glut that is driving prices down, especially with regard to condos. This glut has persisted now for more than 2 years, and with current inventory at almost 20 months, it is sure to persist for a few years more. If this is how it will unfold in Toronto and Vancouver, then we have a serious problem indeed. Brand new condos are being marketed for 50% off here…………

#137 City Slicker on 10.21.11 at 3:55 pm

I wonder what happens when not only HAM stops buying, but realizes the party is over and starts pulling out. I’m sure they know what the term bag holder means.

#138 Stevenson on 10.21.11 at 3:59 pm

#124 T.O. Bubble Boy

#132 Canuck Abroad – You are leaving RE solely on expectations as well and you missed a golden opportunity already if you didn’t buy earlier. Could of made some quick change.

Don’t gamble and think you know the odds to beating the house. I am proud to say I own RE and don’t plan on selling it either. I don’t guess it will go either way. You think Vancouver or Toronto RE is expensive? Try silicon valley. Not everyone in Toronto and Vancouver are blind investors/buyers. Also stop blaming HAM you could purchase properties over there if you had the cash too. These people are smart individuals and that is why they have the money to buy at these prices. Otherwise it would be the opposite wouldn’t it?

Merely household residence is not all rental RE. Renting is cheap, but having a management company and owning properties that rent OUT to multiple tenants in each property is better. Therefore the rent more then subsidizes the debt payments.

#139 Little Phil on 10.21.11 at 4:01 pm

Garth, first time reader & poster – I knew from the moment I posted I should’ve given more details.

I’m 30, single and just got a permanent position (not in government, oddly), making over 60k/year.

I want to remain in a part of town where walking to downtown is still possible, hence looking at Market/Sandy hill/Vanier-Beechwood/Centretown area, and am looking at condo purchase VS renting, planning to make the move by spring, once I have a more sizeable down-payment.

Any input is greatly appreciated.

Thank you in advance,

#140 JRoss on 10.21.11 at 4:21 pm


Thanks for the offers, but I don’t need you tell me specifics, and you are being very loose with the truth.

I do not live in Kelowna (anymore) but Mom still does and I have deep roots there. I know numerous people in real estate, including one very notable agent who was Dad’s client and was VERY frank behind close doors about the state of the market.

And anybody willing to put in a bit of effort can obtain information about actual sales in any neighbourhood without having it spun by someone with an obvious self interest.

I may indeed need an agent in Kelowna in the next year or so. You will not be on my call list.

#141 Devil's Advocate on 10.21.11 at 4:22 pm

Good to know I’m not the only argumentative, incessant, long winded blowhard frequenting this blog. ;-)

I’m just trying to provide some balance poco.

1.) It seems to me you are arguing my points more than I yours. For example your comment that your “landlord is underwater, as are many many owners in the tri cities—spin that in your crystal ball and tell me it ain’t so !!!” I would not dispute that.

Greed is a bitch and many would be flippers got caught and are now “reluctant landlords”. But what they paid is not as true a reflection of what the market was even then as what they could sell it for today is of today. Some people just pay too much despite being advised otherwise.

2.) I am sure, even if I knew what business you were in, that I would have little or no clue what your business entails on a day to day basis. Nor might I venture to say do you of mine. Hint – HGTV it is not.

3.) There are many highly motivated buyers out there every month. Job transfers, divorce, death, growing family, mobility issues and so on. Not so many of them want to rent they are still stuck in the ownership paradigm. Majority rules the market poco. You are in the minority.

My “bullsh*t sounding story” refer to the last sentence in my point #1.) above.

I believe things will be fine. You believe things are going to get a whole lot worse. I am confident that each of our respective predictions will prove true for each of us.

#142 GPC on 10.21.11 at 4:33 pm

From the Edmonton Real Estate Blog:

“It appears as though there has been a significant increase in the number of sales of low priced condos in recent weeks which is bringing down the overall average. If I cut out the sales under $100k the average sale price for condos sits at $230k for the past 4-weeks.”

Okay, I’d like more money in the bank-Oh I’ll just adjust the numbers- poof- there it is!
Now I can afford the bloated, unjustified price of that chipboard condo (that had to have it’s water membrane replaced after only 2 years-cost to condo owners $2 million dollars-developer disappeared) awesome!!

#143 Marc L on 10.21.11 at 4:41 pm

I am truly happy I don’t know Old Beach Girl and Young Old Fart.

#144 Young Old Fart on 10.21.11 at 5:09 pm

(So, why not sell and collect the gains?)– Garth

Have to live somewhere….. And don’t forget the 4 words that define the meaning of life……

Happy wife, happy life.

Finally, no, I am not smarter than everyone else. Why do you think I am here Garth? I glean tidbits and act on them. I.e. Last year you suggested bonds and I bought bonds. About 7% return YTD thank YOU very much.

I believe in the basics. Stay out of debt (or get out ASAP) and live within your means…..

#145 jess on 10.21.11 at 5:10 pm

i see there is another Jess

New report from the GAO. for the Fed. watchers
Regarding governance and conflict-of-interest issues at the 12 regional Reserve Banks.

e.g. Friedman

#146 bigrider on 10.21.11 at 5:14 pm

#115 Garth to Bigrider regarding Scott McGillivray. “isnt he a TV Carpenter”

Yes but he is also an advocate of purchasing multiple properties for rental purposes. Apparently he has over 20 said properties all within an hour of his home in Brampton. A pumper for sure, he has several books out on how to improve properties by adding rental suite in basement etc. and creating income etc.

Just wondering if there is any value in his message.

#147 zeeman1 on 10.21.11 at 5:19 pm

Disciple, have you read R. Buckminster Fuller? Good reading if you haven’t.

#148 Young Old Fart on 10.21.11 at 5:29 pm

#130 Habs 76-79 on 10.21.11 at 3:03 pm
Young old fart.

You claim you bought a $500,000 home ten years ago and paid off the mortgage in less than ten years. Ok how did you do that?


The lasts thing I will do is get into my financial history.

But I will say this, NO, I did not inherit anything. My family is all alive and well.

I have made a lot of money in RE, the stock market, plain hard work and living within my means. I started with nothing but scraped, saved, lived years on KD and worked 18 hour days, at times with 3 jobs.

I was a millionaire by the time I was 30, doubled that by 40 and doubled again and retired at 50.

Yet here I am, still trying to learn things from Garth…..

That’s how I did it…… Happy?

#149 Devil's Advocate on 10.21.11 at 5:33 pm

#136Form Man on 10.21.11 at 3:48 pm

Again, it is what it is.

Yes the condo market is the segment which has been hardest hit. But again after having peaked markedly in 2007 reaching then unit sales volumes through the MLS of 1,265 it has since retreated to more traditional volumes in pushing 700 units in each of these last three years just as prior to the bubble . The pattern is the same as it is for single family residential just a more exaggerated bubble in 2007.

As far as inventory levels go you are absolutely correct. The month over month of available units in these last three years has been two to three times that of those months in the three years prior to the peak of the market.

Still that has not affected price nearly so much as a layperson might suppose it would. Strata condo prices ramped up from a median $108,000 in 2002 to peak at a median $260,000 in 2008 and have since fallen only relatively minute amounts since; to $237,950 in 2009, $235,000 in 2010 and $225,000 in this year 2011 YTD. Indeed price is fluid on the way up but very sticky on the way down.

Bottom line condo prices are holding relatively well despite excess inventories. Will those prices capitulate? Who knows. I can tell you that the proliferation of sexy newer stuff is making it very hard to sell the older resales as, all things being equal, location is not such a factor in the condo market.

Again these are Central Okanagan wide stats including Big White. Big White now there’s a different story completely different story. Each development is it’s own unique market and deserves a focused analysis of its own for a variety of differing influential factors. So this discussion is admittedly most generalized.

But you aren’t there as you can’t so much build a condo to order.

50% off? I can think of a couple – but again are they 50% off or have the developers come to terms with the realities of the market for they never did sell at those “lofty” prices did they?

Nice talking to you. My day off is done now. If you’d like to pick it up again email me at [email protected]

#150 realtors are worried on 10.21.11 at 5:40 pm

Realtor Stevenson your days of employment are numbered and from the looks of the sea of unsold homes on the market spells crash.

#151 tran, Calgary on 10.21.11 at 5:48 pm

Condo can bankrupt you.–condo-repairs-an-ongoing-nightmare

#152 Do the math on 10.21.11 at 5:51 pm

I am renting a 900k house in the annex for $2500. Do the math realtors. Lots of for sale and rent signs . BTW I sold my house in the summer and enjoying my first month of no worries of a housing crash. A banker buddy sold as well and is also renting. Smart money is out of RE and the taxi cab driver is saying its a good time to buy. LOL the housing crash has started.

#153 Reasonfirst on 10.21.11 at 6:08 pm

#141 Devil’s Advocate on 10.21.11 at 4:22 pm

“Good to know I’m not the only argumentative, incessant, long winded blowhard frequenting this blog. ;-)”

You forgot condescending ;-)

#154 Devil's Advocate on 10.21.11 at 6:17 pm

#140JRoss on 10.21.11 at 4:21 pm

No problem. There are some very good agents in Kelowna and I am sure your Dad delt with only the finest.

If you were to add some names to the list I would highly recommend; Gord Hoffman of Prudential, Peter Kirk of RE/MAX or Terry Courtenay of Royal LePage as three that come to mind as the highest integrity and market knowledge.

#155 poco on 10.21.11 at 6:43 pm

#141 DA–that was a lot of wasted space –again you “skirt” the questions—-but i expected no more from you than what you posted

#156 renters rule on 10.21.11 at 6:48 pm

“That being said, the condo I am sitting in right now? I could sell today for 5 times purchase price after 15 years.”

I call bullsh*t. 15 years ago would be 1996. Even in the Van market, there are not any condos that were purchased for $150K 15 years ago that are “worth” $750K today. Current market, even with a lot of renos/updates which he has not bothered to mention (but would still be a “dated” suite/building compared to what the house horny lust after today), you might get 3.5, but nothing is selling right now… so you are probably drifting down to 3x.

Within 2 years those condos will be selling for low $300s or less…… the age also puts the unit in the Van sweet spot for major leak remediation (if it has not already happened)…. and the factoring excludes carrying costs for taxes, condo mtce fees and assessments….

#157 Form Man on 10.21.11 at 6:53 pm

#149 DA

I stand by the facts that you keep dancing around…….the housing market in Kelowna is glutted, prices are falling, and will for some years yet. I am finishing up here, and building housing in the Okanagan is not where I see opportunity for the forseeable future. Infrastructure, energy, and mining is where the profitable work is for the next several years. I imagine you have some properties to show this weekend. Good luck !

#158 Nostradamus Le Mad Vlad on 10.21.11 at 7:10 pm

#17 and #20 islander — “Not to be too cynical, it is a real estate boosting scheme.”

But of course! The CPC is running the country on smoke, mirrors and fumes. The gas tank was empty when H – F said “We will never run a deficit in the Cdn. shield”, or words to that effect.

With the $25 bln. contracts being handed out, new prisons to be built (odd, as the birth rate is declining and we’re all moseying off to the other side rather quickly), the dictatorial control freak in charge has an overwhelming urge to spend taxpayer’s money on useless artifacts. Unless it’s for the politicos and banxters.

They’re liars, con-men and politicos, all wrapped into one headline who couldn’t care less about citizens!

#18 Mr. Lee — “. . . the predictive abilities of Nostradamus (no offence Mad Vlad) to see what is going to happen.”

No problem, Mr. Lee! We do live in very interesting times, that’s fer sure.

#112 johnny5z — Farage wins by a whisker. Unlike the talking head trolls or spin doctors, he has the guts to stand up and say what and where the problems are.

Unfortunately, hardly anyone listens, as it’s not ‘establishment’ talk.
3:47 cartoon OWS simplified; Huge Bonuses Execs. at GS are gloating; Million- and Billionares What’s the dif? 4:27 clip Edyoukayshun leson — Let’s Get Rich (very good); Bank Transfer Day started last week, and seems to be gaining momentum. A possibility of a bank holiday in November does hold water. Credit Unions and small, regional banks rock! 3:41 clip Erin Burnett proving (once again) what a talking head troll is (blind and deaf to the realities of life); GM is selling well . . . in China.

M2 Money Supply rapidly increasing. Is this a silent cue for inflation? Gang of Six “Here is the plan. Step 1, we take all your money. Step 2, we give it to the bankers so they can loan it back to you at interest. Merry Christmas!” — Official White Horse Souse.; 3:02 clip US govt. okays loan to car company, which then builds cars in Finland; Reason “Gaddafi’s biggest crime was a government-issued value-based currency, the gold dinar, which is a major threat to the power and wealth of private central bankers who love to loan out the public currency at interest.”; Silver Limitations? China Suspending rare earths to get better prices; Lost Wages The WH called. You’re on your own; Economic Chaos Will the US collapse before it can rule the world? 7:24 clip Lehman Moment II.

7:33 clip Truth about Libya that US, NATO, BBC, CNN and others keep secret; 4:31 clip The Omen. NATO – US forces should have left Libya alone. Sooner rather than later, they will discover they have created more problems by interfering but Gadaafi Last laugh? Plus Libya The unreported stuff; Odammitall Approval shrinks; Homeland Security “Considering he was able to videotape the arrest with a pinhole spy camera – after they confiscated his main camera – he has a strong chance of winning because it shows he was not breaking the law when he was arrested.” Pen and sunglass cameras are very good tools; Fukushima Speaking of Chernobyl.

#159 poco on 10.21.11 at 7:23 pm

#141 DA –you said
Greed is a bitch and many would be flippers got caught and are now “reluctant landlords”. But what they paid is not as true a reflection of what the market was even then as what they could sell it for today is of today. Some people just pay too much despite being advised otherwise.

oh i get it now–anyone who is now underwater just paid too much for their property at the time of purchase–it wasn’t relative to market conditions—is that how you see this decline in prices ??
I’m sorry Garth -delete this if you must, but this man is a “FRIGGIN IDIOT”

#160 Vik on 10.21.11 at 7:48 pm

If this bill passes, HAM headed south:

#161 T.J. BONES on 10.21.11 at 7:48 pm

Garth: Today the TSX and the DOW are only a hundred points difference. It used to be two thousand, then fifteen hundred, thousand and now in short order it’s only a hundred points. Does this mean that the dow is going up, or the TSX is falling fast. The sky falling or the oceans rising? What does it mean?

#162 Moneta on 10.21.11 at 8:05 pm

Marc L on 10.21.11 at 4:41 pm
I am truly happy I don’t know Old Beach Girl and Young Old Fart.
Maybe you do.

#163 Devore on 10.21.11 at 8:06 pm

#124 T.O. Bubble Boy

What you are promoting is basically the “negative gearing” concept that fueled the Australian housing bubble (which is now crashing, because all of a sudden house prices stopped going up).

The beauty of negative gearing (which CRA allows as well) is that you can actually make money by losing money! Well, only in a few very special cases, but theoretically, you can. You can lose money on the transaction, and still come out ahead after taxes. Because losses from negative gearing apply against income (you reduce your taxable income), but gains from the sale are taxed at capital gains rate.

That’s why only backwater countries like Australia, Canada and New Zealand allow it at all. We love to subsidize other people’s investment mistakes.

#164 45north on 10.21.11 at 8:09 pm

T.O. Bubble Boy: Exhibit A: Toronto, Ontario — 194 Soudan Ave.

$900,000, 24′ X 99′, holy mackerel! apparently it’s still for sale.

#165 Moneta on 10.21.11 at 8:11 pm

Little Phil on 10.21.11 at 4:01 pm
A condo in Sandy Hill on 60K at 30? Why would you do that to yourself?

#166 The thing in the basement on 10.21.11 at 8:11 pm

DA – wow you’re really taken your lumps today. Some good posts from you though esp the last bit of 123. Form man – thanks for your contribution too. Good to hear from the development community. Poco – sorry you seem a little obsessed with these price drops. Let it slip for a bit and check prices again in a few months.

#167 live within your means on 10.21.11 at 8:14 pm

Someone mentioned lobsters. DH bought 2 large ones today. They’re in the fridge and I’ll cook them tomorrow. :-)

#168 Devore on 10.21.11 at 8:19 pm

#133 City Slicker

Garth makes a good point here. I read in a Calgary paper about the Bella Vista condo, where unit holders are on the hook for $thousands$. And I mean $77-189K each. Unbelievable!

Well, that’s a few years of rental income down the drain. Not like you can even raise rent after those repairs.

Which brings up another point. The trouble with condos is the people looking to rent them expect them to be nice. If you have a condo in a 30 year old building, you are already thanking the gods for each year that goes by without a special assessment. You should. But if you have a 30 year old condo, that hasn’t been updated in 30 years, you can’t get nearly as much rent as a new condo. It’s old and busted. Who wants to live in a tired old building in a suite with stuff older than you are, and pay top dollar?

Yeah, same goes for buyers. You can renovate your suite all you want, but unlike with a house, you have no control over 99% of the building. That new condos now nearly rival in price SFH is just a sign that the bubble is bigger there. In any sane world, a condo (or any strata unit) would sell at a gigantic discount to a stand alone freehold. That is because like any building, condo towers have an expiry date. But unlike SFH, a tower is much more difficult to dissolve. So it sits around and ages. Maintenance stacks up. Repairs get more expensive and frequent. All the while the value underperforms new buildings. No, they certainly don’t build them like they used to.

#169 rosebery on 10.21.11 at 8:23 pm

Hey DA.

You seem to know your way around the OK.
Why doesn’t this duo show up on your list?
They seem to have all the right qualifications.

#170 Habs76-79 on 10.21.11 at 8:23 pm

Young Old Fart.

Thanks for responding to my post on you. This said your story to me verified that your journey to being able to pay off a $500,000 mortgage in less than 10 years was NOT TYPICAL!

If I grant that you tell the truth about your general well being, you have little reason though to try to make it seem as if paying mortgages for most though is so easy.

But again based on what you said and I say that people have a tendency to embellish wealth/success and their personal journey and even struggles to get ahead. You know like parents and grand parents saying to kids/grand kids they walked to school 5 miles per day in winter with boots with holes in the soles. I’m not saying that you did not work hard or if you got it easy. I don’t know and really I don’t care. You may have or may not have worked up to 18 hours a day. But in my business/social life I’ve heard this stuff from many people and often it’s more a story than truth but I’ll give you the benefit of the doubt ok?

You came across much like a modern day Horatio Alger and BTW he’s dead and is more a fairy tale to most folks in life. I’m not saying you did not become a modern day Horatio Alger but fact is 9/10 folks never have nor will get said opportunity.

Based on what you told me you are an anomaly in wealth generation, but most folks buying into especially RE today are not going to do as good as you said you have. They may not be as smart as you seem, as lucky as you may be, as well connected to others as you are, whatever, so I only note for 9/10 RE is a dangerous game and will especially in a housing bubble with precarious economic/monetary times that may stretch out for a long time may just blow up on most who try.

#171 brad in saskatoon on 10.21.11 at 8:33 pm

Moneta on 10.21.11 at 11:06 am

so have to ask you why are you concerned about someone in there 30;s wanting to slow down and enjoy Life and the fruit of it . any excess we earn beyond what we need to live is all for nothing is it not. we cannot take it with us and also , i want too invest in my childrens future , in real LIFE.
and Garth yes i have 360,000 in real estate and 40 000 in cash but you need too live somewhere and even if i sold . it would cost me 1800 a month too rent my house and i would loose the 700.00 profit after bills on my rental every month so basically i would have to be makeing 2500 per month consistantly on my $360,000 if i converted too cash .anyone i know trying rrsp AND gic and such are not makeing nothing ..
thanks brad

#172 Devore on 10.21.11 at 8:41 pm

#146 bigrider

A pumper for sure, he has several books out on how to improve properties by adding rental suite in basement etc. and creating income etc.

Just wondering if there is any value in his message.

Sure there is value. Adding 40 grand on your line of credit and inviting strangers to live in your house is how young buyers are making ends meet. I’ve seen the show before. Without an income suite half of those owners would be declaring bankruptcy within the year.

#173 Snowboid on 10.21.11 at 9:03 pm

Been away for a few days on a leisurely drive down to our winter residence – bit too hot right now (36-37) but is supposed to cool down to 32-34 next week.

Sitting on the patio typing this with a Corona to cool down as I look out on the saguaros, agave, aloe vera etc – framing the sunset in our backyard.

Thought I would check in to see if the smoker was sitting in a Louisiana jail by now, but I guess not.

Wow, DA has finally found his match – will it come to fists with Form Man? FM obviously knows his stuff. Methinks the battle of big time developer vs. small time realtor will draw some recreational property blood.

Don’t plan to check in too often, but again have to thank Prof. Turner – without his sage advice we would probably be sitting back in Victoria, covered in mould, broke and miserable.

I realize US real estate wasn’t part of the Professors’ teachings, but sitting here with a house we only dreamed of owning in BC, enjoying the sun and wonderful people of Phoenix, just seems right.

Not sure how much real estate will decline in the Okanagan over the next six months, but will wait for those 70% off condo sales!! Sorry, DA

#174 Marc L on 10.21.11 at 9:33 pm


#175 sue on 10.21.11 at 9:46 pm

Scott McGilvery’s value to society is that he has a great bod, smile and sense of humor. I love the show but couldn’t care less about being a landlord.

#176 Moneta on 10.21.11 at 9:48 pm

brad in saskatoon on 10.21.11 at 8:33 pm
Moneta on 10.21.11 at 11:06 am

so have to ask you why are you concerned about someone in there 30;s wanting to slow down and enjoy Life and the fruit of it .
Because I think we will be going through a redistribution of wealth from the developed world to emerging markets. But it does not end there… Boomers are going to squeeze the young until they can’t. And I’m not sure the young can expect to slow down without losing their quality of life. I think slowing down at 30 is a luxury.

However, if you are going from 100 hours a week to 50, then I understand!

#177 disciple on 10.21.11 at 10:23 pm

#109 Davey Boy… thanks! Everything is pointless…what’s your point? LOL.

#147 zeeman…. I sure have. One of the greats. Actually he worked up in Canada and went broke in Chicago, and went from drunken bastard to frickin’ genius. His work proves that all planetary bodies are hollow. But as usual, nobody listens, nobody seems to care…BTW, I’m definitely not new age, that is a diversion, don’t be so easily fooled by labels and boxes. That’s been tried before and all you end up with is ism’s and schism’s.

Shamanism would more accurately describe my worldview. A re-connection with the heartbeat of the Earth, for she is a living being that we are a part of.

Nitey-nite y’all.

#178 Evelin Johncox on 10.21.11 at 10:27 pm

Re: Property Guys listing GTA: the snow is a nice touch. I loved this: Okanagan and Annapolis Valley listings so old they now need surgery…….How true I live in Kelowna unfortunately… one year, 4 showings and no offers…..

#179 45north on 10.21.11 at 10:53 pm

Little Phil: Any input is greatly appreciated.

what about your own diner?

#180 young & foolish on 10.21.11 at 10:53 pm

Condos are a fantastic scam …. the builders get their profits first, by off loading the units to the wannabe “investor/landlord” crowd. In the old days, they used to build apartment buildings and had to manage them for years. Now, condos are the new rentals, with the little owners on the hook for maintenance. What’s the incentive to build them well? That’s right, there is none.
Stay away from this “investment”.

#181 Jane on 10.21.11 at 11:17 pm

Garth, #77 is where I was a year ago. He seems to be an honest hardworking guy. Help him, he needs the bigger picture of his and his families’ wealth spelled out for him.

#182 Evelin Johncox on 10.22.11 at 12:05 am

Kelowna: supposed to be a BIG SALE here last weekend; units that are left are 1,300, 1,400 sq. ft. or more; $375,000 or more hst on top; NO one showed up! probably 20 units left. When I moved in 28 months ago was supposed to almost sold out! 3 people were here! Building was black at night! Tessco is still building in Edmonton….right downtown I see online…..
This probably won’t be printed, it’s nothing new!

#183 Where's The Money Guido???? on 10.22.11 at 4:17 am

Re :95 Smoking Man on 10.21.11 at 11:14 am

#59 Where’s The Money Guido???? on 10.21.11 at 3:09 am

Newbie you’re going to losse your shirt, 99% of people getting into day trading will lose.

I paid my dues too…but stuck with it and learned.

You can practice trade all day long but when you have skin in the game, just watch the new personality come out of nowhere and mess up your stratagy.

I will post instructions on my blog later this week…

Simple: we have in this market 5% shifts in direction every week. so if you can capture 3.5% gain weekly. 50k x a 4 Margin gives you 200k to play with. Compound your winnings and in 52 weeks after you pay back your margin you are at about 1 million…….

Thanks Smoking Man, I think I’ll give it a try, but at one-tenth your rate….baby steps fer newbs…. I could still use the 100k though…

#184 brad in saskatoon on 10.22.11 at 6:03 am

#176 Moneta on 10.21.11 at 9:48 pm
you are probABLY right . i see it within my small circle that the boomers are liveing the high life (well high debt life)
big trucks big rv campers which get used 4 times per summer, building big cabins 700,000k too 1 milion for a place to go for 3 weeks in the summer.
now if you asked me about cabins and rv’s i would say way smarter to rent as they do not get used everyday like your home.
i no garth always talks about 35% of your net worth tied up in real estate but whats wrong with your family home and owning it as you can do what you please with the place.
so is it smart to pull equity out of your home too invest elsewhere?ie: stocks , or business.and if so where could i see return $28200 (conservative #)per year on a $360,000 real estate .like i mensioned earlier i would have to pay 1800 per month rent plus i collect 700 rent on my rental all together they are worth $360,000k’s.all of which i have about $260,000k’s of real money in the 2 houses the rest is infalted as time went on . if real estate tanked and they dropped 30% it really is not a big deal , as i am not going to sell my house where i live , maybe the rental but not my own home .(where i am free to change things to suit our family’s needs).
i dunno ANY thoughts
thanks brad

#185 Beach Girl on 10.22.11 at 7:18 am

I meant to say Libya.

#186 TurnerNation on 10.22.11 at 6:49 pm

Weekend Offtopic: this is not a vaccine blog, but…killing us softly. Eugenics is alive and well. They are sending not a penny of food to starving Africa today. No benefit concerts this time. No billionaires on TV begging us to send money. Only deadly AIDS drugs are being sent.

TORONTO — The World Health Organization is trying to prevent thimerosal, a mercury-based preservative used in vaccines, from being banned.

A new round of talks on a global treaty to reduce human exposure to mercury begin on October 31st