Jay and Marie are flippers. (“Our friends are so jealous,” she says. “Two deals in three years and we made two hundred!”) They’re the kind of people other people with kids, obligations and less brass hate. After all, it’s not easy buying from plans, moving in for sixty days, then selling and splitting. But, hey, somebody’s got to do it.

Jay says they now have $250,000, “which is a great downpayment. The next place we find we want to stay in for a while because as much fun it is making money on houses, we’re tired of moving and would really like to settle.  No children now but we want to start a family.”

So, he poses this question: “We went for a drive in Georgetown and checked out a couple of open houses.  They were nice homes but nothing to scream and shout about, and yet all over $500k.  I make about $120k with my wife but don’t want to live off KD and only go on staycaytions. Do you believe there can be a good size price adjustment in the next 6-12 months in the 905’s?  I’m talking 15-30%?  I really find it hard to justify prices of over $500k in Georgetown, Acton and Milton.”

Well, kids, anyone who’s done that drive through the western flank of the GTA will be gobsmacked at recent developments. Places like Mississauga, Brampton, Oakville, Burlington, Caledon, Milton and Georgetown now lap over each other’s borders, forming the perfect senseless urban sprawl. A year ago in a remote Brampton field where Holsteins created perfect patties, McMansions now rise, ‘starting in the low 800’s’. The population of these communities has exploded – 1.64 million people – greater collectively than Calgary, Ottawa, Edmonton or Winnipeg. In fact, if this run-on mess of houses were one municipality, it would be the fourth largest in Canada, but (by far) the fastest growing.

Does this bode well for real estate values?

Not exactly. In fact, perhaps the opposite.

There is no effective public transit in any of these places – no subways, no light rail (other than tracks running to downtown T.O.), no express busways. As a consequence, the vast majority of households need at least one vehicle, usually two. It often takes a litre of gas to get a litre of milk – because idiot urban planners and local pols have concentrated retail stores into giant Big Box campuses surrounded by dozens of acres of parking lot. As for human scale, trying talking a walk around Square One, the region’s mega mall. You’ll need a GPS unit strapped to your shorts so they can find your remains.

All the houses (basically) are new, and so are the trees. Sticks, actually. In most neighbourhoods there’s nowhere to walk, except to the local engineered park (also full of sticks) to watch restless, bored-crazy youth. Lots are minuscule. Driveways short. Every street after 6 pm looks like Frank Fuccillo’s used minivan clearance centre. Cities like Brampton and Mississauga (and Milton, trying hard to catch up) routinely build four and six-lane arterial roads which are clogged with traffic and provide excellent venues for pedestrianicide.

As for the new homes, many have been slapped together on an assembly line by the region’s biggest builder. This is particle board and glue heaven. The ‘ironwork’ and ‘colonial pillars’ on most facades are plastic. Porches already sag in subdivisions now hitting the ripe old age of nine. New units are thrown up in a mass orgy of building and occupied by deliriously horny young couples within hours of being swept. It’s daunting to imagine what these streets, and homes, will look like in four or five decades.

And forget moving to the burbs for space, or to be five minutes from a cow. Towns and semis abound, with populations now denser than Rob Ford. Yes, all the inconvenience, lack of privacy, noise, congestion and smells of the city, yet lacking in the unnecessary crap, like entertainment, museums, diversity, dining and art.

Worse, if you are considering investing here, is the culture of new. The neo-burbs epitomize newness, where people line up all night outside sales trailers to buy virgin structures. Space and time are sacrificed for the latest touchless faucets and glass countertops, pre-wired media rooms, bamboo floors and shiny stuff with Bosch stickers. How will the resale market be in five or seven years when the hardwood’s no longer scratchless and the bathroom caulking cracks?

Jay, you can spend a half-million easily on a faux Georgian mansionette where heifers once peed. You can line up on Trafalgar or Mississauga for your place in the 40-km-long traffic jam on the 401. You can be a part of the greatest suburbanization now taking place on the continent. You can populate every bedroom with a kid. But don’t confuse this with investment. It’s not. This is consumption.

I’ve little love for flippers. You feed price excess. Shame on you.

May you burn in Milton.


#1 Phil Indablanque on 11.22.11 at 10:02 pm

Come on Garth, don’t pull any punches. Tell us how you really feel :)

#2 Timing is Everything on 11.22.11 at 10:02 pm

Sounds like Hell. Repent.

#3 YR on 11.22.11 at 10:06 pm

I have been reading your blog ever since I happened to stumble upon a nice book in public library. Thanks for the great insight you provide sparing your valuable time. I was able to make some right decisions and avoid jumping on to the real estate bandwagon because of your valuable blog.
Raj, Markham

#4 T.O. Bubble Boy on 11.22.11 at 10:07 pm

HAM trend of the week — intentionally get caught drinking and driving to avoid your loan shark!


#5 martin on 11.22.11 at 10:08 pm

”Every street after 6 pm looks like Frank Fuccillo’s used minivan clearance centre.”’ — how the hell do you come up with this kinda lines men?!?! love it

#6 Raj on 11.22.11 at 10:08 pm

Very well said Garth.Square one is the worst SC for

#7 Econoom on 11.22.11 at 10:09 pm

First. That’s how it’s done. @$$holes.

#8 Econoom on 11.22.11 at 10:09 pm

Damnit. Second. I’m the @$$hole.

#9 T.J. BONES on 11.22.11 at 10:10 pm

Sir Garth England,s debt 492% of GDP Japan 492% of DGP USA 282% of DGP as reported by ROBERT peston

#10 Stinky the Fish on 11.22.11 at 10:18 pm

Nice pic!

#11 Debt's Dark Embrace on 11.22.11 at 10:18 pm

That’s the system. The big guys “play” it. Why not the little guy too ?

#12 GTA Girl on 11.22.11 at 10:19 pm

This one is being posted to every social media forum I can.

Epitomizes everything that is wrong.

When I moved to my little village it was to escape from the city. I am now surrounded by Vaughan, Brampton, RichmondHill. King township is about to become suburbanized.

It’s not heaven in the burbs. Kids can’t cross streets, too dangerous. Sewer catch basins line housing developments. They try to mask them, but their just mosquito cesspools. Traffic in the mornings are insane. Entire developments sit empty during the week days. Only shakily traversed by Asian nannies with babies in tow.

Is this what they moved here for? Too many WalMarts, HomeDepot, Winners…there is nothing to do but shop. Municipalities build parks under electrical towers…when did this suddenly get safe for kids to play soccer under them while they crackle. They build more strip malls right up against residential fences. People buy $500ktownhouses from plans then find out a grocery store will be built behind them, with security lights, garbage bins and late night produce delivery. 20 ft away from their back door, only a cheap fence to separate their patio from 18 wheelers.

Now coke sniffing developers keep pushing 30 story condos on every lot next to 20 yr old homes. Have you seen the monstrosity at Highway 7 and Kipling? floors of condos looking out to Nonnas homes. Not more than 30 ft from the fence line.

Kids with nothing to do. Teens who are bored…trouble follows. No subway, no decent transit. No transit right now as York transit has been on strike for 7 weeks, with not a nod from politicians. Because the only ones who take the bus are students, new immigrants, and people on fixed incomes.

I’m sick of it. I’d rather be back in the city.

#13 eviee1973 on 11.22.11 at 10:20 pm

Because of these pieces of trash Jay and Marie I am unable to afford a house in a decent city. At least they have 50 % down on a half million dump in the middle of nowhere, why are they even worried about a small drop, after all they can make more money on the next place.

#14 LJ on 11.22.11 at 10:23 pm

The buyers of the “shiny new houses” should actually watch one go up – in less than a month. They would be appalled at the shoddy construction involved in $1Million+ homes.

But hey, that veneer is great to look at, until it starts peeling…..

#15 steve p on 11.22.11 at 10:25 pm

the problem with flippers is they don’t know when the pyramid or ponzi or whatever you want to call it is over and they lose all at the end. they are addicted to the game and what they think is easy money. it is easy money when the ponzi is going but once it stops and they are left holding the bag they lose. it is like playing musical chairs and when the music stops they have no chair left to sit on

#16 GTA Girl on 11.22.11 at 10:28 pm

Thank you for letting me vent.

I will not stay here. It’s a wasted life.

Even Southern Ontario as a whole I consider to be on a very bad course.

I need a new province…or a new country

#17 11th Marble on 11.22.11 at 10:29 pm

Pure poetry G, I believe this is your best post yet. My father-in-law had told us in late summer he bought hot off the builder’s plans a house in Georgetown. A 1300sq.ft bungalow for just a mere $500G’s. I was floored to realize that he put a deposit down and will wait till late spring 2012 to put his current home on the market. And for the final topping – he’s been retired for 6 years.

I told him sell now – rent for the year and when the house is built (November 2012) at least you can be assured that money is in your pocket. No such thing – the market is strong, prices have not stopped for over a decade…how do you convince a kind hearted old man that he is making a grave mistake.

I too, many moons ago looked into Georgetown in the late part of the 1990’s. It wasn’t overly appealing as most homes were 1960 ranch style homes. So, like thousands of others who yearned for a home without making a financial sacrifice we moved north. Up to Barrie, where we have been very content and plan on staying for some time. Today prices even here are borderline stupid. A home is a wonderful thing to buy if you put some common sense into it..

G, excellent post – you’ll be hard pressed to top that one!!

#18 Junius on 11.22.11 at 10:37 pm

I have driven through this area recently. It is so ugly and full of same same houses and same same retail. Sadly you would have a hard time differentiating it from parts of Calgary, Edmonton, Langley, Surrey or Richmond. They all look the same.

It is the “new new” and it gets old and tired fast.

#19 TaxHaven on 11.22.11 at 10:39 pm

Interesting! Really is fake Georgian.

I used Google Maps and found the kind of thing you’re talking about…not a supermarket in sight. Not a mature tree. Not a business. Not a job.

I found the area around Intrepid Drive and Nightstar Drive in Mississauga, Ontario. But I’m sure there are hundreds of other neighbourhoods/self-storage facilities very similar…

“Little boxes on the hillside,
Little boxes made of ticky tacky
Little boxes on the hillside,
Little boxes all the same,
There’s a green one and a pink one
And a blue one and a yellow one
And they’re all made out of ticky tacky
And they all look just the same.”

#20 FTP - First Time Poster on 11.22.11 at 10:43 pm

Didn’t get a chance to comment on Canmore last nite. Took the wife there for our anniversary, booked a privately owned 2BR at the Solara (built in 2005/6) The bathroom door hit the toilet seat and one drawer couldnt open because the fridge was in the way. Looked last nite and they sell for $249K plus over $500/mo in condo fees.

If you want to see hurt – go to Kimberly BC. Stayed at a 3BR there this summer – one word……..GHOST TOWN!

#21 11th Marble on 11.22.11 at 10:43 pm

oh..I forgot to mention..I am sending a “shout-out”to GTA Girl. You have a wicket sense of humour, I sense you would keep most captivated in a one-on-one conversation.

Keep up the posts, intriguing indeed –

#22 rosie on 11.22.11 at 10:50 pm

Beware zombies from the burbs. Milton was once a nice little town. So was Brooklin, Whitby, etc.etc…

#23 neo on 11.22.11 at 10:53 pm

Hello Garth,

European’s bond/credit/CDS market may be yesterday’s news according to you. However, it sure does drag down U.S equity futures as well as our dollar which is at .959 as I write. I wonder what MSM story is going to spark a short-lived rally overnight or after 2:00pm this time.

Let’s see whether the CDN is below or above .96 when I get up tomorrow morning. Any wagers? See you in the morning…

Tempus Fugit…

#24 Jsan on 11.22.11 at 10:58 pm

Flippers are parasites. They are not intelligent or shrewd investors, they are naive herd followers, nothing but gamblers who get lucky if their gamble happens to fall at the right time during the frenzy of the bubble.

Hopefully they sleep well knowing that their actions have contributed to causing many families to take on much more debt than they ever would have had to had all of this real estate bubble nonsenseness not occurred.

#25 Timing is Everything on 11.22.11 at 10:59 pm

Kids of Mississauga, Brampton, Oakville, Burlington, Caledon, Milton and Georgetown… and GTA Girl.
Just 4 U…


#26 Deb L on 11.22.11 at 11:05 pm

I’m with martin. :-P

#27 Ex-Cowtown on 11.22.11 at 11:06 pm

I’m still amazed that people in Canada think of houses as an “investment” . All they really are is an expense. When we sold out a couple of years ago and started renting it wa like a massive weight of financial burden and emotional responsibility was lifted from me.

I was born again… I saw the light!!! And my bank account began to groan again with the sheer weight of all of those accumulating digits from my investments.

Rich people buy assets; poor people buy expenses.

I’ll buy again, but not until blood is running in the streets.

#28 Jon B on 11.22.11 at 11:07 pm

This post reminded me of my time at Creditview and Britannia. Good god that was awful.

#29 Mister Obvious on 11.22.11 at 11:12 pm

To those who got huffy about my description of Kelowna yesterday… perhaps I was a bit out of line. The ‘strip mall ‘ look doesn’t begin until few km before entering the city proper and and ends few km after leaving the center of town. Highway 97 outside of that area is indeed quite attractive.

To me, Kelowna’s approaches are reminiscent of Surrey’s King George Highway which, in all honesty, outpreforms Kelowna in the shabby department. I still maintain that if you want to step back into a classic Okanogan setting, Penticton is your best bet.

But the grand prize for unattractiveness goes to my own city’s Olympic Village (aka ‘The Village on False Creek’). It has all the charm of empty million dollar college dorms where the streets are empty but some of the lights are on some of the time.

#30 Not 1st on 11.22.11 at 11:12 pm

Why the hate for flippers? Aren’t they adding value just like the developers do? If it weren’t for them, some of these houses would never get a facelift. Good for the local economy too.

#31 sam.i.am on 11.22.11 at 11:15 pm

be cool or be cast out…

#32 Unoccupy Wallstreet on 11.22.11 at 11:18 pm

In an overheated market, flippers form an important market function. They provide the builder with financing to get shacks built when there aren’t enough final consumers around who can wait 8-12 months for possession. That there is an arbitrage available between 12 month and 60 day possession just means that the existing used homes are being priced too high compared to the cost of a new build. The only way the market can close that gap is if someone comes in and takes advantage of the arbitrage, which causes the new homes to be built, which eventually provides enough supply for the price levels to come down. Flippers are really just taking advantage of an arbitrage opportunity being provided by the bubble, and they are an important part of how the bubble will be corrected because they translate most of the bubble prices to the builders, who then build like crazy.

#33 InvestorsFriend (Shawn Allen) on 11.22.11 at 11:18 pm

I totaly agree with Garth on that point. A house is consumption. At least mostly.

Benjamen Graham defined investment as: laying out money today “which upon thorough analysis promises ssafety of principal and an adequate return”. (See page 1 of the Intelligent Investor)

Houses do deteriorate and wear out over the years and require maintenance and even renovations just to maintain their original condition.

Buying a house at today’s prices cannot reasonably be said to be an investment.

The fact that houses bought years ago turned out to good investments does not make buying today an investment.

That does not mean its necessarily a bad idea to buy a house, but recognise it as a consumption item.

#34 Seven Stars and Orion on 11.22.11 at 11:18 pm

I consider myself blessed to rent a 3 bdrm house in west Ottawa where my wife and I can easily walk to work, parks, market, library, theatres, museums. Gatineau park is 15-minute bike ride away. All, and I do mean all, of my colleagues have mcmansions in barrhaven, kanata, orleans, gatineau. They laugh at me and think I’m white trash or some kind of Occupy loser. I regard most of them as zombies except the ones that rubbed their two brain cells together and became genius flippers. I reserve a special loathing for creeps that helped jack up the value of shelter into the stratosphere.

#35 Marc L on 11.22.11 at 11:22 pm

From Cows and Farmland to RE Development and Sheep.

Nicely written…

#36 Reality check on 11.22.11 at 11:23 pm

#20 FTP – First Time Poster on 11.22.11 at 10:43 pm
Comment on Canmore solar resort.

Those 1000ft2 $249k condos were sold at $500k-$650k ish back in the peak.

Original condo fees were $1000-$1500 per month!!! Then you had to pay extra to use the amenities.

Whole resort went bankrupt, then resold.

Original purchasers looking at minimum 50% haircut. New owner or resort reselling some of the units in 12th fractions.

#37 David Oliver-Godric on 11.22.11 at 11:31 pm

I saw the same thing happen in California. Mom bought 2 post war bungalos for about $40,000 each in the early ’70s. By 1991 they were surrounded by exactly what you described, except they were 3500 sq/ft faux-Victorians. I sold them both in 2001 for about 800K total. Google tells me that larger, newer houses go for about 300K in 2011.

#38 Herb on 11.22.11 at 11:42 pm

“May you burn in Milton.” And may CRA have a real close look at whether you were selling homes that actually qualified as principal residences, or were engaged in “adventure in the nature of trade.”

#39 Stupesing in Cabbagetown on 11.22.11 at 11:45 pm

Garth, this blog post brilliantly describes EXACTLY how I feel about the burbs. Horrifying. Why would anyone choose to live like that? I was driven through Brampton and Mississauga the other day (I live downtown and don’t own a car) and wondered aloud if these subdivisions will be bulldozed in a few years time as is happening now in the USA.

#40 Westcoast repost on 11.22.11 at 11:47 pm

From the west coast, in my 20s, real estate is off my radar until it makes sense again (and if it’s never I don’t even care anymore – Vancouver is losing it’s shine for me in anycase. Plenty of other places in the world to live, with better weather) Anyway, now that I know I’m not going to be dumping the down payment I saved up into real estate, I am looking at investment options in particular I’d like to learn more about preferred shares.


I know you’ve posted about preferred shares before, but I’m wondering have you gone into a more in-depth discussion of them before? I’m reading about rate-reset preferred shares, and from what I’m reading, if you investing in 5-year rate-reset preferred shares with one of the big Canadian banks (virtually no risk of going belly-up, or defaulting on it’s investors), it seems that this kind of investment carries nearly no investment risk (as opposed to perpetual preferred shares). Am I getting this right? Or is there something, some risk that I am missing here with buying rate-reset preferred shares with a super-credit worthy institution like a Canadian bank? Can you please, please, please speak to this (or re-post a link to an entry where you have already posted this).

Also, it would be fantastic if you could speak to the liquidity of rate-reset preferred shares. I understand I can sell them at each reset date (typically 5 years), but is it as instantaneous as selling them like common stock through my discount brokerage?

Your help would be appreciated… I understand this is at the bottom of the comment section right now and might not get read, so I may re-post with your new blog for feedback.

Thanks in advance.

#41 Gerry Beauregard on 11.22.11 at 11:50 pm

As an anti-suburbia rant, that’s up there with James Kunstler. His TED talk is great:

#42 Devore on 11.22.11 at 11:51 pm

Oh ok, so now that Jay and Marie want to buy themselves a family home, after flipping for years, prices are too high. Got it.

#43 harden on 11.22.11 at 11:56 pm

Talked with my RE agent today about present market conditions in Vancouver. While prices peaked months ago on the Westside, November has see a resurgence in activity. Look for the stats to reflect that next wk. The bidding wars are a thing of the past, but there are sales taking place on offers… mostly following listing price adjustments by sellers. Interestingly HAM is playing a smaller role at this point in time. Apparently the question for many sellers when contemplating offers is whether or not they would get a better price come spring. Time will tell I guess.

#44 InvestorsFriend (Shawn Allen) on 11.23.11 at 12:12 am


Let me totally debunk the MYTH that there was ever some magic ratio of house price to income that is “normal”, safe, allowed by banks or affordable.

The rule banks have long had is the rule set by CMHC.

To Wit:

•Your total monthly housing costs, including Principal, Interest, property Taxes, Heating (P.I.T.H.), shouldn’t represent more than 32% of your gross household income.


Let’s say heating and taxes are 2% of the house value per year. Sounds low, but on a $400,000 house that allows $8000 fpor property tax and heating, so that may even be high.

Anyhow this leaves about 30% MAXIMUM allowed for the interest and principal payments

Let’s say income is $100,000. Maximum mortgage payments are then $30,000 per year or $2,500 per mointh. Again, that is a MAXIMUM. It is beyond me how anyone could ever pay 30% of gross income on a mortgage. With 30% for income tax it means you would be left with 40% for all other costs of living. Not enough. But nevertheless let’s use 30%.

Anyhow, here is the math at different interest rates for a $100k income and a maximum 30% mortgage which works out to $2500 per month. This is for 25 year amortization. I rounded just a tiny bit the figures seemed to work out nicely with just a tiny bit of rounding.

At 3% interest CMHC will allow $525k or 5.25 times income

At 4% interest CMHC will allow $475k or 4.75 times income

At 5% interest CMHC will allow $425k or 4.25 times income

At 10% interest (ala 1990) CMHC will allow just $275k or 2.75 ties income

And just for the heck of it at 20% interest (ala 1980) CMHC would allow only $150k or just 1.5 times income.


The 30% MAXIMUM of gross income is CONSTANT.

The MAXIMUM multiple of income you can get varies wildly with interest rates from only 1.5 times at 20% interest all the way up to 5.25 times income at 3% interest.

SO, there is and can be NO RULE OF THUMB regarding the multiple of income you can pay, it actually varies greatly with interest rates.


30% is the MAXIMUM allowed. This tells you nothing about if you can actually AFFORD 30%. Hilariously, the 30% makes no distinction for whether you are a single a couple or have four expensive teenagers.

For years I have read here as people talk about the magic multiple of three times income. It don’t exist folks. It just don’t exist. Myth debunked with math.

You’re welcome and good night.

#45 Axehead on 11.23.11 at 12:16 am

Hi Garth,

I have little love for flippers also – that money was not honestly earned.

Peruse of builder show homes in Red Deer, Alberta shows a city totally out of touch with reality. If I used your quote for Milton and other burbs and apply it to Red Deer “all the inconvenience, lack of privacy, noise, congestion and smells of the city, yet lacking in the unnecessary crap, like entertainment, museums, diversity, dining and art” then you’ve really summed up the city quite well.

Walked into one home on a cramped street, with yards looking directly onto other yards, and replete with those sticks you so acuratly describe. Granite and stainless and on demand hot water and wire closet shelves…all this 2500 square feet of luxury for 750k. Who the heck in Red Deer makes enough to afford a $750k house?

Walked over to house number 2, no granite and size down to 2300 square feet so only priced at $700k. The back yards are so small and close to the next neighbor, with only sticks to block the view, I couldn’t even go outside in my underwear and have a piss in my $750k backyard(Garth, this happens all the time in Red Deer), without everyone galking. The horror.

#46 Van guy waiting on 11.23.11 at 12:26 am

Why so much hate for flippers? It’s the horny buyers that are out there giving opportunities to these flippers. If these buyers can keep their pants on, flippers die off. This big boom in RE gave the chance for people to make $. If you made big, good for you. Just don’t get caught and hope you get the hell out now. For all that didn’t flip, well you missed the boat. The party is over now 

#47 Jan Etter on 11.23.11 at 12:29 am

#25 Timing is Everything on 11.22.11 at 10:59 pm

“Sprawling on the fringes of the city
In geometric order
An insulated border
In between the bright lights
And the far unlit unknown”

One of my favourite Rush songs. The lyrics ring so true for me, as I grew up in what used to be the suburban outskirts, North York (back then you didn’t have to drive very far north to reach the cornfields).

However, at least in those days in the ‘burbs a bored teenager could take a short bus ride to the subway and hop downtown to Yonge and Dundas, check out A&M and Sam the Record Man, walk past the drunks, head shops and strip joints on the way to Massey Hall and see firsthand that the world is much more diverse and interesting than the numbing conformity of the suburbs.

“Drawn like moths we drift into the city
The timeless old attraction
Cruising for the action
Lit up like a firefly
Just to feel the living night”

I worry that today’s “yutes”, as GTA Girl laments, will have nothing to do, except maybe play Call of Duty in their basement for hours on end… I shudder to think what kind of sheltered, fragile children we are raising in the burbs of today.

#48 Hammer1 on 11.23.11 at 12:33 am

Jay and Marie. The only sensible answer is to buy in a country setting or an urban centre that is walkable and affordable, safe and friendly.
Hamilton has great and trendy neighbourhoods such as
Locke St and Westdale. Take a stroll down Locke on Sunday morning and grab a java at Starbucks.

Buy a beautiful home here and have a tiny mortgage and enjoy your life. Hop on your bike and tour the vast network of city trails , leading you to the 100 waterfalls cascading over the Mountain.


or buy in the suburbs and watch your “investment” fall to pieces.

#49 OttawaMike on 11.23.11 at 12:37 am

The walrus published an excellent cover recently and it addresses the 905 sprawl amongst many problems for T.O.:

#50 Timmy on 11.23.11 at 12:40 am

Wow, I thought Richmond, Surrey, and Coquitlam were bad! Remember that Rush song “Subdivisions”? And that was fifteen years ago…

#51 TakingResponsibility on 11.23.11 at 12:42 am

Oh my, what’s with the hate-on for flippers?
I really am trying to understand the emotions or one could say the moralization here?
Houses, oil, rice, wheat, bonds …. why is flipping houses so unethical? What is the difference?

#52 Timmy on 11.23.11 at 12:43 am

Re #29
Kelowna is known as the Surrey of the interior of B.C.

#53 Ozy - Suburbs S-U-C-K BIIIG on 11.23.11 at 12:46 am

Suburbs S-U-C-K BIIIG.
No other comment needed

#54 Can't... wait.... on 11.23.11 at 12:48 am

So the GF is getting tired of my “not tonight honey”. She’s ready and I’m running out of excuses.

I’ve been trying to satisfy her with rented extras, even looked at some twice as big as, well the one I’ve got. It’s not going well, the double garage is for me if I’m honest. The kitchens are all shit, even the expensive ones. Granit and stainless are $3K+ month + utilities and no amount of sweet talking will convince her that kind of rent is a good deal. On some things we agree.

Need something to happen in Cowtown or I’m heading back to weld ships in Halifax.

#55 NorthOf49 on 11.23.11 at 12:48 am

Garth, your post is so on the money. I used to live in north Burlington and considered it the last vestige of decent lot size and fair density. Also the fact that I was tucked just under the Niagara Escarpment meant that there was no place left to expand in Burlington. How wrong I was. After they finished the western leg of the 407 which cuts diagonally through Burlington, they were now able to create a brand new subdivision called Alton that borders the 407. The lots are tiny, the frontage non existent and not a mature tree in sight. Take a drive through and it looks like hell on earth. The density and end to end parked cars makes you want to stick forks in your eyes. But the crap sells and young families are eating it up, especially southeastern Asians who know they are saving thousands over the same crap in Mississauga. And on the southeast side of Hamilton is Binbrook. Same crap but even less services, 20 mins drive to the closest grocery store. I guess it seemed like a great idea to get as far away from Hamilton as possible, but then gas prices shot up and lots of folks are regretting the move. Maybe they’ll cheer up if Binbrook can ever get its first Tim Horton’s opened, and if they’ve got any money left over after filling up.

#56 OwlEyes on 11.23.11 at 12:48 am

Well, the GTA really should be displayed more as an example of the devestating power of macroeconomic policy. I’m an ex-GTA-er and do indeed find it horrific. I thought Georgetown existed so you could have $500k for only $300. Old news. But as GT points out, the real story is the urban planning nightmare that is developing. Whether prices go up or down is almost secondary. A few years back there was a great article in the Atlantic Monthly on “The Next Slum”. We’re going to see this here…

#57 Van guy waiting on 11.23.11 at 12:50 am

This home was bought last year for $630,000. Renos done which I estimate around 120k. Listed this summer for 1.3mil. Sat for a month and the seller took off 50k. Sold for 1.2 mil. How do you resist making that kinda dough? I guess if you hate $.


#58 Mike Rotch on 11.23.11 at 12:58 am

#28 Jon says
“This post reminded me of my time at Creditview and Britannia. Good god that was awful.”

I spent a few years in Mississausage and know exactly what you mean.

City and Regional planning department staff should be shot, pissed on, and buried upside down for what they allowed to happen outside Port Credit and Streetsville, and the handful of other nice pockets.

Just glad I was fortunate enough to be young, single, and renting a large 1bdr in Port Credit. Large 1bdr in a good building, 2 minutes walk from lakefront and mouth of Credit, 4 minutes walk from the harbour area, 8 minutes walk from GO.

Best part – my rent was half the cost of ownership for a half-sized P.O.S. condo or “stacked town” in one of the car-infested wastelands north of Rathburn.

Even ~12 years ago, it made zero sense to buy in the sky!

That’s Mississauga. Milton, Georgetown, etc. are just like it, only further from the centre of the universe.

#59 Crash on 11.23.11 at 1:12 am

Watch their video “Subdivisions” by the great Canadian band “Rush” and realize things never really change… http://www.youtube.com/watch?v=Lu9Ycq64Gy4
“Conform or be cast out”

#60 Nostradamus Le Mad Vlad on 11.23.11 at 1:18 am

So, “Jay and Marie are flippers. But, hey, somebody’s got to do it. I’ve little love for flippers. You feed price excess. Shame on you. May you burn in Milton.” — That’s right — takes all sorts to make the world go round, no matter whether it’s Donald Trump, Jay and Marie, a hobo or Bernie Madoff.

None can be blamed for what they chose in life, and life, which is the greatest teacher of all, will eventually balance things out.

Chances are that in less than two decades, the east — China, Mongolia, Russia and India — will be dictating to the west what they want.
#172 Bigrider on 11.22.11 at 8:05 pm — “Tower after tower after tower…” — Build them poorly and they will fall, one way or another.

#175 Timing is Everything on 11.22.11 at 8:22 pm — Yeecchhh! Hideous looking. Not sure whether the steel boxes would have better resale value and lower monthly operating costs!

#181 ballingsford on 11.22.11 at 9:24 pm — “How can you enjoy life these days if you are a slave to your home?” — Ahh yes, but we are not slaves to our home. We bought our home so we could bring the kids up fairly well, while at the same time maintaining the place reasonably well.

We are certainly not debt slaves! Perish the thought! If our son and DIL hadn’t needed a place to live a few years ago, we would have sold the home and gone back to a townhome, which is how we started.

But life doesn’t always work out the way one would like, so one has to roll with the punches or go with the flow, making changes as necessary.

Keep in mind this is an abundant world, plenty of everything — resources and the like. It’s just that many people have chosen to be fixated on one asset — a house — without bothering to see all the expenses involved, while getting themselves mired.

Yes, I would prefer to be renting a condo or apt., but it hasn’t worked out that way. I’m happy with what I’ve got — if anything new comes into my life, then I welcome it, no matter what presents itself. No mtge. or debts — that is the main thing.
Thomas Cook Traveling down? MF Global looted customers’ accounts. If they looted, then they were probably worse off than they let on; Banks are evil and sheeple are angry; Gold and Money Yes, fed. reserve notes are backed by gold, same as Libya; Debtors’ Prison “Not paying off debts can eventually land you in jail — at least in a sizable minority of U.S. states…” Which may not be a bad thing. At least prisoners are fed, and can exercise.

China bubble. If China pops, they finish with the Yuan and switch to the Renmibi, call the loans from the US, that will be a pleasant xmas for some; Run On Europe Running to where? China recession, UK failure, IMF BS, Greek showdown, Violent Gold, 27:56 clip Jim Rickards on currency wars, Is it any wonder? MF Global One and MF Global Two.
Guilty Bush and Blair found guilty of war crimes in Malaysia; Rumors Obomba to stand aside for Billary; Chevron and BP First, the GoM. Now, off Brazil; Police State powers South Africa’s turn; Avoid SKorea “Folks, South Korea is a tiny place, about the size of Florida. Believe me, with 50 million people and the price of empty land, you start feeling claustrophobic rather quickly.” No, that’s not BPOE writing.

#61 Bill Gable on 11.23.11 at 1:24 am

And to think I used to whine on my commute from South Kingsway to a certain Radio station on Adelaide, off King.

I find these new slums depressing.

#62 45north on 11.23.11 at 1:26 am

There is no effective public transit in any of these places – no subways, no light rail, no express busways. As a consequence, the vast majority of households need at least one vehicle, usually two.

I’m guessing more than 80% of households have two cars or more. My niece lives in Georgetown. She and her husband have two.

Most families in these places have “stretched” to buy their house. Cost of gasoline for the household is over $400/month. These places are fragile and vulnerable to economic shocks. What are the social institutions and values that people can fall back on?

Milton is the San Bernardino of the North.

#63 billy contore on 11.23.11 at 1:28 am

Does anyone in canada know whats happening in China.
Real Estate prices are falling like crazy. If i have to hear stupid remarks like Canada is safe because we have chinese and immigrants. Wake up. So does the US and Europe. China has 1.5 billion. U.S. 365 mil and growing.
Real Estate in Canada has bubbled and it will no doubt come crashing. NO FRKING Doubt. Everyone knows it and now Personal Debt will be the death of many individuals. 1 or 2 more months of job losses and ITS OVER.

#64 Devore on 11.23.11 at 1:28 am

#33 InvestorsFriend (Shawn Allen)

A house you live in is almost certainly (I say that as a lay person) a consumption item, not an investment.

Some argue that owner-occupied houses return income: the rent you’re not paying, because you have to live somewhere. But even if mortgage interest payments (+taxes, maintenance, insurance and depreciation) are lower than the rent you’d be paying instead (with the principle repayment being the “forced savings”), the house does not RETURN income.

It may save you money, but does not PROVIDE income. If renting is cheaper than owning, no one says it’s an investment, because you’re saving the difference between rent and what you’d pay in ownership costs. It sounds ludicrous. That’s because it is. Whether you rent or own, you’re SPENDING money on a necessity: shelter. That is an expense.

When you save money on shelter over alternative forms of shelter (renting vs owning when renting is cheaper, and vice versa), you can use that saved money to invest, but owning a house to live in (or renting) is itself not an investment. In that sense, you should seek to minimize your housing costs at all times. You don’t want to move every few months, but it makes sense to at least re-evaluate your position every few years.

Owning a house to rent out, now that is an investment, and then has to be evaluated as an investment whether it makes sense to buy it or not.

#65 Roial1 on 11.23.11 at 1:39 am

Wow! tonight’s post sure brought back memories for me.
I grew up in Brampton back in the late 50’s early 60’s.
What a different place now. YUK!
Thank heaven (and the R.C.A.F.) I got out of there when I did.

Today was an other so so day on the lake. I only retained 2 fish of the several I cought.

Life is so tough out here on V.I.

#66 Foggy on 11.23.11 at 1:39 am

At 16 GTA Girl
“Even Southern Ontario as a whole I consider to be on a very bad course.
I need a new province…or a new country.”

I was raised as a GTA boy. I grew up in a great, diverse city of 1 1/2 million. Now that same city has 6 million people crammed within the same boundries, from immigration, starting in the 80’s. During that same time period there was a great exodus out of Toronto to York Region and neighbouring counties, as entire neighbourhoods changed into ethnic ghettos. Nothing wrong with immigration, but this was immigration on steroids. So now Toronto and the environs is choked with congestion 24/7 thanks to the social engineers in Ottawa. When I retired, living anywhere near the GTA was out of the question, but rural Ontario was a worthy alternative. But then you have those hot humid Ontario summers, those high taxes, and generally higher cost of living to deal with. Off I went to the Maritimes to start a new life. Affordable housing, cheaper taxes and saner living. I would never return to Ontario…

#67 Tony on 11.23.11 at 1:41 am

I do remember Georgetown back when the recession of ’81 hit. All that was left of that city was a few pool halls and a few gas stations. Basically nothing else, even most of the banks closed up. I can’t believe anyone would even consider living out in the middle of nowhere today.

#68 Soylent Green is People on 11.23.11 at 1:43 am

Every street after 6 pm looks like Frank Fuccillo’s used minivan clearance centre.

Lolololol sooooooooöôò funnyyyyyÿ


#69 ex bc boy on 11.23.11 at 1:47 am

to gta girl- theres lots of work here in alberta. Im in red deer. as long as you dont mind things like-let me see- snow and minus temp for six months.

#70 Double Trouble on 11.23.11 at 1:53 am

Check out this link on what 350k buys you across Canada:


It’s insane!

#71 Soylent Green is People on 11.23.11 at 1:54 am

‎5,000+ Canadians have just signed in the last hour

Attawapiskat Housing Crisis



#72 bridgepigeon on 11.23.11 at 1:57 am

No museums, no art. Who’s going to pay for that useless stuff? What are you, a liberal? You’re knocking the Canadian dream here. ;-)
Even worse are the coveted lawns, roundup ready Kentucky bluegrass. Try driving a stake in the grass, you get down two inches to the rubble. Sums up the whole scene.
However, compared to a lot of places in this world, it’s still pretty good. The air isn’t always clean but if you’re from Mumbai or Hong Kong, it’s decent. And there’s no bombs going off. Funny how I’ve been meeting Afghanis and Pakastanis lately, businessmen, who come here because we’re at war with their countries, making them unsafe. Crazy world.

#73 Two-thirds on 11.23.11 at 2:12 am

“deliriously horny young couples within hours of being swept”

Not just couples, check out this story (WARNING: may cause nausea):

“Joining the ranks of the first-time homeowner

Compelling factors combine to make buying your very own place a realistic option”


#74 diharv on 11.23.11 at 2:39 am

Everytime we drive home on Hwy 1 leaving Vancouver we look to the right at what I guess is either Langley or Aldergrove and the relatively new suburban sprawl filled with ugly McMansions so close together that if you fart in your own house chances are the neighbor can hear it (and smell it ) if the windows are open.It should be illegal to do this to prime agricultural land. Whenever I think it would be nice to live in the lower mainland I think about where we would have to live and the price it would take to do it compared to our nice paradise in the central interior. We could sell out and drain all our assets to buy and be debt free down there but what life would we have. Today’s post was very poingnant about suburbanization. What is there to do but cruise malls and big box stores. I suppose we could go to Vancouver but that city is culturally dead to tell the truth. The only thing I look forward to when we go to Vancouver is the trip home. BPOE my A$$ !

#75 West Coast Survivor on 11.23.11 at 2:44 am

Man, I can’t imagine a house for 500k anymore. Even with a correction – how much can a west side house come down?

#76 Dmitri on 11.23.11 at 2:50 am

Garth, this is a much awaited post. You’ve been alluding to the unsustainablity of ex/suborbia for a while now. In this article you’ve finally have put all the pieces together. I’m still amused that there are people that don’t understand the simple fact that living in the “incubator” is nothing to be happy about. Myself however, I’ve been thinking about this, what seems to be intractable North American problem for the past 6 years.

Suburbs are hell.
No easy access to markets (be it, baby sitter, shopping, jobs,
enterntainment etc. etc). The costs incurred are horrendous as well. Average family will WASTE over 10k a year for just for the transportation alone, as they’ll need 2 cars. I’ll not even include the cost of time and health wasted in traffic.

It seems there is no political will or desire to address the ailing infrastructure. Toronto is already #1 looser from all of the developed cities in the world when it comes to transportation. Yet, everyone but, their uncle is trying to squeeze into the burbs. In US there is a slow reversal of this trend. People are finally beginning to realize that close proximity is highly important. Some of the most downfallen cities in the rust belt of US (i.e. Detroit) are slowly trying to rebuild their inner core.

Toronto proper, does not seem to have an issue with massive exodus from the inner core, but the transportation infrastructure is much lacking. At this point, I don’t believe that even drastic measures such as large fees (~50$) to enter the city core by car will fix anything. (the proceeds of the fees going towards the public transportation improvements – the naiive assumption here)

#77 Jody on 11.23.11 at 2:54 am

“Little boxes on the hillside,
Little boxes made of ticky tacky”

Yes, that’s a classic. Will our inner Tyler Durden ever make an appearence? I sure hope so. I so hate the tack, the sameness, the suffocating Stepford Wives/Village of the Damned bag over our heads. I say let people buy a lot and build whatever the hell they want, so long as shit ain’t flowing through my backyard I don’t care if my neighbours build a house in the shape of a giant pink dildo. Variety is the key to a happy and healthy life. If I want to live in a neighbourhood with with white picket fences, front lawns groomed more than pubic hair and Suzie the slut lonely house wife then I can move there of my own volition.

Some comedy relief, I’d so do her.


#78 Dmitri on 11.23.11 at 2:59 am

Half a year ago I’ve moved from Toronto to a nice US city just 3h south of Vancouver and don’t regret a bit. In fact I love it here and hope this will become my nest. You already know the prognosis of the R/E here. All of my coworkers that have houses are underwater. Most of them professionals that would rather move away to the markets in those parts of the country that have growing pockets of better job opportunities and growth, but can’t. The bitterness they experience is overwhelming. Hower, this same city has nice plans for the transportation infrastructure improvement. While, 1/3 the size of Toronto it already has it’s own light rail train going to the airport for 2.25$ one way and free buses/trolleys withing the downtown core. (p.s. I don’t believe in free lunch, but the taxes here are 1/2 of what they are in TO, so it works for me)

#79 Tim on 11.23.11 at 3:03 am

Well, regardless, the original question deserves an answer. I’d (quite ignorantly, I might add) wager < 45% probability for 15% drop in 9 months, and < 5% probability for 30% drop in 9 months.

That said, the most frequently quoted price number is a sale-price-weighted average, not market weighted or unit weighted, or etc. It's stating the obvious to say that this can hide a lot of market dynamics.

#80 Johnny O on 11.23.11 at 3:07 am

I love this blog…but why blame this couple for making money on real estate? You call them ” flippers,” I call them “successful investors.” It may all go South tomorrow but that’s the risk you take. And it sounds like this couple is now very hesitant to invest in this current precarious Real Estate climate. And hey, they’re savvy enough to ask you for advice.

#81 Phil & T on 11.23.11 at 3:45 am

be cool or be cast out…

– and there are a LOT more Subdivisions now than when Rush penned this track!

Methinks now would not be that bad a time for the “Elder Race to reclaim the home where they belong!”

Definitely one of Canada’s better exports!!!!

#82 SB aka Mr. B. on 11.23.11 at 3:51 am

It really is awful what developers have done. Squeeze as many in the area as possible for profit. I watched Mississauga, Brampton, and now Milton. There are towns out there with non box stores for the necessities. I’ll be looking for one before too long.

#83 munch on 11.23.11 at 3:58 am



Brilliant Garth, brilliant!

Keep it up, bro’

Rgds, Munch The Greatest

#84 munch on 11.23.11 at 4:07 am

@ #16 (GTA Girl)

New country?

Come to South Africa, sister!

Or Zimbabwe – God’s Country, s’true as Bob!

A little bit rough, maybe not what you are used to, but you will quickly adapt and you will experience quality of life that you will get nowhere else on earth.

Come! What are you waiting for?

#85 bcpaul on 11.23.11 at 4:08 am

#21 11th Marble on 11.22.11 at 10:43 pm

oh..I forgot to mention..I am sending a “shout-out”to GTA Girl. You have a wicket sense of humour, I sense you would keep most captivated in a one-on-one conversation.

Keep up the posts, intriguing indeed –

Falling in love on the Greater Fool blog…what’s next?

#86 Michelle on 11.23.11 at 4:18 am

Garth, I so love and agree with your description of the Square One Mall parking lot :)

They are scheduled to start construction of the LRT system which will run north/south down the middle of Hurontario street, connecting Brampton to the Port Credit Go station in 2018….I’ll believe it when I see it.
I’m just glad I’m not in one of those posh new condo buildings that line Hurontario street. Construction and traffic will be a nightmare for them.

I live in a 1970’s condo building on Mississauga Valley Blvd…commonly referred to as “immigrant central” by the white suburbanites who shun the area. All I can say is, I bought a 1400 sqft unit 10 years ago for $160,000 and that includes a locker and 2 parking spots. No pool or concierge, but at least I can walk around in a little community with wide boulevards, older trees, and families who still go out at night with their kids and dogs for walks around the neighbourhood.
Nearby are many multi-ethnic grocery stores and restaurants run as family businesses. The TD bank machine across the street gives people a choice of 5 different languages, including Spanish and Tagalog.

It seemed to me like the only bit of Mississauga that had any life left in it, once they got rid of all the cows and horses :)

#87 plain_janey on 11.23.11 at 5:10 am

god I hate the 905, it scares me to think about moving home to what you describe. I used to complain about these sprawling featureless subdivisions to friends and co-workers and usually got bemused looks for my rant. Glad to see I wasn’t the only one who felt this way, as per you and all the comments today, but there’s no escape from the creeping zombie masses or their nightmare suburbs.

#88 gmc on 11.23.11 at 6:15 am

We are different, slow maybe but then again, we are a rich country with lots of space, what if the harpers decided to save us by allowing 10 million to come here min entry i million plus new immigrants, really this is the best place to be NO!!! HA
ya we are screwed

#89 Lady Evangeline on 11.23.11 at 6:20 am

“Where Holsteins made perfect patties”
Garth, you missed your call. You weren´t meant to be a politician, nor a financial advisor, nor a “pathetic blogger”.
Garth, you are a poet!
Made my day again!

#90 Lady Evangeline on 11.23.11 at 6:23 am

Correction: ” Created perfect patties”
My apologies.

#91 Onemorething on 11.23.11 at 6:44 am

Good gig if you and your family have the stomach for it!

Difference here Garth is this couple will get exactly what is coming to them, a purchased $500K SFDU in the GTA and loose the whole downpayment gambling on it’s value down the road.

This is why the rich get richer and have already flipped.

It’s called not getting greedy and taking profits, RE has been no different!

Why I sold Silver around $48 after buying at $12.50!
Gold at $1750 after buying at $800!
And divested of all my RE in Res and Comm.

Put it this way, if your friends aren’t billionairres your gonna work your ass of to get any special returns moving forward.

There’s always money to made up or down but you have to be liquid to play.

#92 Smoking Man on 11.23.11 at 7:10 am

Use to live in 905 for 25 years, kids and hockey… Before that I was at Dovercourt and collage…

Been back in the 416 for 1 year, 1 min walk to the bar, 5 min walk to go train, 3 min walk to stores and fine dinning, 2 min walk to the beach, 5 min drive to the marina and a nice sail boat.

Property Tax in 416 1/3 of my 905 bill. heat hydro 1/2 price,

ETR went from 700 per month to 0, Gas running 4 cars in 905 1500 per month down to 100 per month..

905……. a wasted 25 years

What was I thinking……..

#93 Marco from the bestest place on the smallest part of earth on 11.23.11 at 7:32 am

In the last 10 days I have traveled from Vancouver to Sydney and now in Tokyo. All for work in my job which this year will produce about $350-400k. I’m investing all the proceeds and renting… Why? This trip characterized it.
I came from a market where property is the only investment, justified by MSM manipulation, herd behavior and cheap lending.

I visited one where the HAM effect (and it is a much better BPOE than Vancouver will ever be) wore off and lending a bit tighter (they don’t have a CHMC) but the high interest rates are offset by negative gearing. Here despite exporting more to china than Canada, the housing market has stalled and is on a very shallow slope. The gov’t will be challenged to keep many tax breaks afloat such as negative gearing and many are on a wait and see mode. But consumer credit is maxed out.

Then yesterday I pulled into Tokyo, where real estate is the most expensive In the world and the country completely frozen in an economic model where high prices are endemic at all levels. Here housing has been largely static for over a decade and people buy only if they can afford enough down payment to ensure the overall costs are cheaper than rental. Ps. These folks don’t do credit, they save before they buy and only spend if their savings budget is filled first.

I realized the Japanese have experienced for the last 10-15 years the kind of economic environment we will be experiencing for the next 10 or so years. So, I rent and save. I don’t buy on credit and don’t act like this years income is guaranteed in the future.

I speculate if you were to add consumer debt to government debt, the Canadian economy may not look much different than the Japanese (they do still have a manufacturing sector).

So I guess being more like a Japanese in Canada will offer more upside than being like most Canadians (in terms of personal financial management – for the rest, unlike being Canadian just fine!)

#94 gentleInvestor on 11.23.11 at 7:35 am

I live in an 150 year old mortise and tenon farmhouse out here in the “boonies” and it’s as solid as the day it was built. Sure, we had to renovate a bit and cut out a few rotten bits but who doesn’t have rotten bits when they’re over 100? The wind can howl on this exposed land and we can sleep at night.

In the years to come (and the not too distant future at that) the building practices of the last 10 years will be looked upon with disgust. Woodchips and glue sheathing (some call it OSB) that swells at the first touch of water. Plastic siding (some call it vinyl) that is designed to let water run down the wall BEHIND it with only a thin layer of weaved poly (TYVEK) seperating the water from the OSB. Pressed cardboard flooring (they call it laminate). Sawdust and glue for kitchen cabinets. There’s a word for all this stuff, and it rhymes with schmit.

No, today’s houses will not be standing in 20 years, let alone 150 years.

#95 detalumis on 11.23.11 at 7:39 am

Hmm I should think today’s post is sort of proving my point that anything in Toronto centrally located near the subway should not fall all that much!! My first house was actually in Mississauga in a neighbourhood we called Meadowjail; I picked an itty bitty ticky tacky box that was at least walking distance to the ticky tacky mall. The first time I went home on the train and tried taking a local bus it took 30 minutes i.e. longer than walking because it took a meandering route down every curvy street. The old chicken and egg thingie – why does nobody take transit in the suburbs. This route took even longer because one lady couldn’t remember where her house was, there were only 3 different styles of houses and all the same colour.

I would come home and cry, I hated it so much and my neighbours would say to me how much they loved it here, so peaceful and such even though we were under the flight path for Toronto’s airport, something nobody thought to mention when you buy your house on Sunday morning in a soundproof sales office. I thought I must be mentally ill since I was the only person who didn’t like living there. I couldn’t move, my house had fallen in value of course, so I just worked and waited. Then one spring morning the clouds parted, prices had risen it seemed over night and poof I noticed everyone in the fricking street was selling en mass and getting the hell out of there – including me. Everyone who had said they loved it so much had actually told lies to keep the property values up I guess.

A generation ago, we had a whole country full of walkable neighbourhoods, literally mini Torontos everywhere. Today it is actually the suburban kids who are filling those skyboxes because once they discover another way of living, a more human way, they do not want to come back. The only reason we allowed this sprawl model is because it is cheap, cheap and fast, fast to build. It is not human in the least, it is not desirable and one thing is for sure, it will never ever last.

#96 gentleInvestor on 11.23.11 at 7:47 am

#16 GTA Girl,

Head on east to the “boonies” where your neighbours are still friendly, houses are cheap and you can throw a rock into the ocean from your front yard.

#97 Ray MacDonald on 11.23.11 at 8:10 am

I moved to Georgetown in 1979 when I worked in Brampton. Most of my co-workers thought I was nuts to move so far out, but we loved the community.
My daughter grew up there, went to a tiny school with no portables, met her future husband at the age of 6.
By the time we got out in 2005, the place was unrecognizable. We went back for a friend’s funeral in 2008 and hopefully will never need to return. Our other friends have mostly moved away.
Right now I’m 400 Km NE in a town where they build as many houses in a year as they do in Georgetown and Milton before coffee break. I had to retire to get here but I’m glad I could do it.

#98 bigrider on 11.23.11 at 8:12 am

Beautiful ! Just Beautiful entry today !

Agree whole heartedly.

I bow to your pre eminent skill as a writer

#99 Junius on 11.23.11 at 8:15 am

#29 Mister Obvious,

I don’t think your analysis was too harsh at all. The strip mall effect on the East side and on the West bank in Kelowna are hideous. They detract significantly from an otherwise beautiful landscape. However they remind me more of Calgary and Edmonton than of the Vancouver area.

Here is a basic rule of thumb for interior BC communities on which have look the best. If the highway directly through the city then becomes a strip mall dive – think Vernon and Cranbrook at the top of the list. Whereas if the highway runs by the town leaving the core intact then it is much nicer – think Penticton, Summerland, Salmon Arm, Nelson and Kimberly. Then consider the impact of car-first culture on all forms of urban design. Just a thought.

#100 bigrider on 11.23.11 at 8:21 am

If you are any further north than Major Mackenzie Road and any where further east or west of the Yonge St corridor ,delineated by Bayview and Bathurst, then your 905 residence is in for a fall.

Yes that includes you HollyWoodbridge and surrounding area (Klienbridge/burg) the center of the universe..LMAO

#101 bigrider on 11.23.11 at 8:47 am

Real estate prices are grossly inflated here in Canada for the most part but maybe not in Florida.


#102 hal colborne on 11.23.11 at 8:56 am

Was at Toronto Board of Trade Seminar Yesterday.
All talk was about Real Estate in Canada and GTA. Most investors are selling property quickly and lowering price to “GET OUT”. There is no doubt we will soon be hit by a deflation that has not been seen here in many many years.

#103 bigrider on 11.23.11 at 8:59 am

All this criticism of the suburbs while praising the virtues on the city core.

All you ‘Toronto proper’ dwellers need to look at what is being done to the core of T.O with 500sq ft concrete boxes (and less). Not family friendly thats for sure. I guess they are all made for the kids and poor immigrants who will be renting them.

Get ready for a “gutting” worse than Detroit.

Give me inner ‘905’ with a driveway, some space and the most rarest of all, REAL LAND.

#104 househornyhousewife on 11.23.11 at 9:00 am


You have just explained EXACTLY why I moved away from the suburbs of Toronto over 20 years ago.


#105 Hammer1 on 11.23.11 at 9:00 am

blame the greedy developers without the sense to build livable ,walkable communities …if you build it they will come to zombieland

#106 T.O. Bubble Boy on 11.23.11 at 9:09 am

@ #44 InvestorsFriend (Shawn Allen)

Your “AFFORDABLE HOUSE MATH” is missing one key factor — virtually all mortgages in Canada are “floating” in some way (variable rate and/or 5-year term).

The “math” that you’re pushing here assumes:
A) Income stays the same for the full amortization period.
B) Rate stays the same for the full amortization period.

Obviously, neither Income or Rate can stay exactly the same for the 25-30 years most new mortgages have as the amortization period.

So, “affordability” in your example (which is exactly how CMHC, Banks, Politicians, and Economists everywhere define it) is literally a snapshot of what someone can afford TODAY — and is guaranteed to change over the 25-year/30-year period.

The sad reality is — with many people treating their house as a short-term investment (despite the illiquid nature of housing), the typically mortgage holder sees everything through the eyes of a flipper…. i.e. they can get out if the market turns and still escape with the paper gains many have seen over the past 10 years.

As has been noted 1000x on this blog, you only need to look a few miles to the south to see what happens when everyone has the “housing is not an investment” epiphany at the same time.

#107 sue on 11.23.11 at 9:14 am

The comment about Square One made me laugh. When I was 8 months preggo, I went to that mall. After an hour I was tired and realized my car was parked on the opposite side of where I was. I almost burst into tears. It took me an hour with 10 bench breaks to get there.
Best. Post. Ever.

#108 Hammer1 on 11.23.11 at 9:20 am

The end of Suburbia….enjoy


#109 fancy_pants on 11.23.11 at 9:34 am

It’s not enough that we have stock markets, lottos and casinos – human greed has clearly found a home in the RE circus as well.

Jay and Marie, I encourage you to keep playing the game. What could possibly go wrong? I will say with conviction that you do have H, MC and F on your side.

Come back in two years and let us know how full your joy tank is. Even the puppeteers can’t artificially defy an equilibrium forever.

#110 Mr. Lahey on 11.23.11 at 9:37 am

The fringes of the 905 are a friggin wasteland. Drive by on the 401 or north on the 400 and see the mass of heaped drywall called the suburbs. Sunnyvale is quiet (except when Ricky and Cyrus start shooting it out) and has no traffic jams. That aside folks, Europe is going to hell in a handbasket and don’t be lulled to sleep with Garth’s mantra “Europe is yesterday’s news”. The shithawks are circling over this fair land of Canada folks, get ready for the biggest shitstorm since the Great Depression…

#111 Junius on 11.23.11 at 9:44 am

#63 Billy Contore,

You asked, “Does anyone in canada know whats happening in China.”

In a nutshell, local Chinese economies at the civic and state level have used construction to maintain or increase GDP numbers over the past few decades. In many ways similar to what happened in the West.

This has led the building of millions of unaffordable apartments and empty buildings all in a country with millions of poor people living in squalor. A misallocation of resources of unbelievable scale. Just do an Internet Search on “Ghost Cities of China” and see what comes up. There is an excellent piece from Australia’s “Dateline” program (sort of a 60 minutes downunder) that is worth watching if you can still find it.

Many China watchers such as hedge fund manager Jim Chanos have been talking about for sometime. The state and local governments are now badly overleveraged and the lending for projects needs to be brought under control. This is resulting in a huge drop in prices as the speculation period ends.

Of course, long term this has a negative impact on HAM coming to China. Certainly some of the HAM coming to Canada and elsewhere are the so-called “Naked Officials” who are leaving with less than their suits on their backs but a suitcase. These are often people who have stolen money or at least obtained it in a way that is either going to get them jailed or in some cases executed. NOTE: They execute fraud in China.

We open our arms to these sorts because we somehow think anyone with money should be welcome in Canada. While no one knows what percentage of HAM this represents, and it is probably a minority, the overall impact of the situation in Canada will probably mean a run of people trying to get out now before the current crash takes hold followed by a slowing afterwards.

#112 Tom from Mississauga on 11.23.11 at 9:46 am

I’ve tried a bus in Brampton, Oakville and Burlington. Ridiculous to get around. Mississauga isn’t too bad south of the 403. One car for a family is really hard because everything is so spread out. Trust me on this, nobody I know that bought in this area in the last 4 years has planned for a pregnancy, new car or major home repair.

#113 Jay on 11.23.11 at 9:52 am

I’m Jay… to clarify my story and some of the facts, please read below:

I wanted to clarify a couple of things. First, we’re not flippers. Let me explain.
The first place I signed for in 2005 when one could get between 700 and 800 sq.ft with parking and locker for $220k. I was single at the time and this was something I could afford, along with being a way to discipline myself and save towards a goal. This place took 5 years to complete, by which time I had actually married and plans had changed. We moved in and sold, making some money.
The second place was a townhouse we could afford, well within our budget. We moved in, did it up nice and were going to stay. We figured we were going to stay in this house 5-10 years and then step up once we made a good dent in the mortgage and saved some $$$. I saw the crazy prices and thought that this cannot go on forever, so we listed for kicks and got what we wanted.
Now we rent.

You note to me indicated profits of $200K between early 2010 and just months ago, on two purchases and two sales. Ergo, flippers. — Garth

#114 Hammer1 on 11.23.11 at 9:57 am

#86 Michelle
We owned a condo in that area of Mississauga from ’01 to ’04.(600 Mississauga Valley) .nice area, but not walkable..we still had to jump in the car to do anything. We noticed that the congestion in that auto suburb was building.
We then bought a shack in the burbs of Oakville…3 years later another stupid move to a Mattamy shack in the soulless burbs of Burlington.

Finally escaped and purchased in a very nice affordable, trendy area of west Hamilton.

Yes,I guess we were flippers, and built up a lot of equity during those years…but all the moving was a pain. We just didn’t know where we wanted to be..It feels right now. Every time we moved, it was actually a downsize,but we ended up making a profit…Moving to Hamilton was again a downsize..living in a good neighbourhood, walkable, friendly , and
with a very small mortgage, Much less than any rent..approx $500 per month..life is good.

Leave the suburbs before it is too late and those cardboard shacks are un-sellable (spelling? sorry)

#115 Jay on 11.23.11 at 9:58 am

Oh and one more thing. The house we are currently looking for would be in the burbs but a more mature and established area, where lots are 60X150 at least. I am not a fan of a cookie cutter neighbourhood. To go with this, we would find work out there. NO COMMUTE!!!.
As much as I love reading Garth’s posts, he did not include all the facts.

#116 Hammer1 on 11.23.11 at 10:16 am

“Leave the suburbs before it is too late and those cardboard shacks are un-sellable”

not you, Michelle, sounds like you enjoy the area,
mainly talking to folks like Jay and Marie

#117 Junius on 11.23.11 at 10:18 am

Excellent piece from Paul Craig Roberts, the founder of Reaganomics, on Market Regulation. Worth reading for anyone interested in the role of deregulation on the current state of our economy:


#118 Buy Low Sell High on 11.23.11 at 10:20 am

Bulls v. Bears!!

Garth, I have a suggestion. Let’s separate the believers that real estate prices are going to decline versus the non-believers. We’ll do this with a simple poll question:

Do you believe that in 5 year’s time real estate prices will be lower in your respective local market?

This will separate the bulls from the bears and give a longer term viewpoint as to the direction of RE prices.

Is there any way that we could track this running tally maybe on a bar graph at the top of the blog page?

#119 Nick in Calagary on 11.23.11 at 10:21 am

Garth has no love for house flippers, and neither do most people, but they are providing liquidity in a relatively illiquid asset, and they aren’t necessarily driving the price increases, it could also have something to do with the idiot buyers of the flipped houses accepting higher asking prices.

#120 InvestorsFriend (Shawn Allen) on 11.23.11 at 10:27 am

106 T.O. Bubble boy responded to my number 44 about the multiple of mortage level to income.

He said:

So, “affordability” in your example (which is exactly how CMHC, Banks, Politicians, and Economists everywhere define it) is literally a snapshot of what someone can afford TODAY — and is guaranteed to change over the 25-year/30-year period.


Well, right that calculation is all about today, and assums interest rates and income don’t change. True.

But it is not even really about what someone can ACTUALLY afford today, much less what YOU can afford.

It just gives the MAXIMUM possible ASSUMING you can afford the maximum paying 30% of gross income on a mortgage. Most people can afford nothing close to 30% and live a life of auterity and credit card debt trying to do it.

It’s a MAXIMUM folks. Take up that offer at your peril.

And yes if your income soon soars that will help. But God help you when (not if) interest rates soar.

#121 Jay on 11.23.11 at 10:48 am

Flippers are people who purchase with the intent of flipping immediately.
My first purchase I waited 5 years to get into, by which my life had changed drastically and the condo no longer made sense.
Our second purchase was taking advantage of a stupid market. There was no intent to buy and sell quickly, as noted in my original and followup email. You can say what you want, however, my words are being twisted to get a blog, which is not really fair.

Closed in 2010, sold in 2010. Profit: 180K. Closed in 2011, sold in 2011. Profit: 30-40K. What would you call yourself? — Garth

#122 Jay on 11.23.11 at 10:58 am

Somebody must see my point…
Yes, the condo closed in 2010, however, it was a very long time coming. Things had changed.
The house, well, the prices seemed unsustainable… if we were going to sell in 5 years and not sell for as much as we could now, why wait. It made sense. We knew we wanted to sell eventually but if we think we could get more now than later, why wait?
I think many would have done such a thing and not thought of it as flipping.

#123 bill on 11.23.11 at 10:59 am

look jay can do backflips….

#124 Kevin on 11.23.11 at 10:59 am

OK, so we hate cookie-cutter, postage-stamp-lot suburbia and we hate concrete “glass boxes in the sky” (condos).

So, where should we all live, then? Should we all live in a nice, well-built bungalow, on a 1/4 acre of mature land, in the heart of the city? All 2 million of us?

Anyone else see the problem with that?

#125 Oakville Owner on 11.23.11 at 11:05 am

Garth- For the most part I agree with you on this post but there are some very nice pockets of the GTA. Bronte Creek in Oakville is full of mature trees and great walking and bike trails. The bus goes through the community every 20 min and to top it off even if prices do crash back to an affordable level most people in the neighbourhood are already up $200 to $300 000 since they bought. As long as they realize that is paper money like I do they will be fine.

Check it out.


#126 disciple on 11.23.11 at 11:07 am

#84 munch… You’ve never had to stop at a red light in Cape Town, Pretoria or Johannesburg… :)

#127 CountryLover on 11.23.11 at 11:12 am

This post really resonates with me. Our first two homes were brand new in West Miss – stayed 3 years in 1st and 5 years in 2nd. We got sick of the cars everywhere parked in our subdivision and no where to walk. Tiny park. All these fancy homes and it still looked horrible.

We were lucky we made $ on both homes and that enabled us to put a 25% down payment on our current country home in Erin. It is 40 years old and will need some cosmetic work as savings allow (not as pretty as Miss fancy house) but the bones are great, it is economical to heat and a size we could retire in one day without feeling over housed. And the lot is gorgeous with some deemed conservation -we could put 30 of our Miss lots into our current 3 acre one. Trees are 50+ feet and line our 280 foot driveway. Kids get to go to one school for each phase and not get moved around like in Miss due to overcrowding. They have room to play, see nature and swim in the pool. The only downside is we pay a ton for gas to commute each week to work in Misss/Brampton (work from home 1x wk). Property taxes are same as Miss though. It is worth it to live in the country and hey, I can walk my dog down our gorgeous line anytime past farms, horses, etc, no need for ‘parks’ i live in one. And Tim’s, groceries, library etc. is only a 5 min drive. To me it is heaven and the best of both worlds. Used to take me 20 mins less to get to work when we lived in Miss, with far more traffic, the extra mins each day in the car are so worth it. And, i do know how lucky I am but we did work for many years to be able to do this. In our early 40s.

#128 Bobby on 11.23.11 at 11:16 am

Frankly, I couldn’t care less if someone wants to flip real estate. That is their business. However, I know of many who couldn’t make that final flip and sell when they needed to and were then stuck in a house they couldn’t really afford.
Besides when you add up all the costs of moving, transfer taxes etc, how much did they really make and was it worth it. I like to think my leisure time is worth something.
Reminds me of a colleague who supposedly saved a bundle on a car purchase in the US. When you added up all the add on costs, the savings were much less. Not worth the time or effort.

#129 Hammer1 on 11.23.11 at 11:25 am

Jay, you’re a flipper..own it
You now have the money and skill to settle down in a good place that has value. Don’t beat yourself up or feel ashamed.
however, maybe you caught the bug and will buy and sell again (if time allows) and then will need therapy to break the habit. There is a certain rush and satisfaction from sealing a good deal and moving into new digs.

#130 Hammer1 on 11.23.11 at 11:31 am

Actually, Jay, the therapy might be a therapy that you never signed up for..that is being miserable in a house that you eventually won’t like anymore, in an area that will grow uglier by the year.
Tough love of the purest and organic kind.

#131 bigrider on 11.23.11 at 11:32 am

11 years since the turn of the century and all the major indexes are lower than they were back then.

To boot problems globally with debt are exaserbated by the day with no end in sight.

The secular bear market we have been in for over 10 years so firmly intact.

Nothing but misery for savers going forward and even worse for the empty of pocket /loaded with debt crowd

#132 bigrider on 11.23.11 at 11:35 am

” This time it’s different” are the most dangerous words ever uttered.

This time to ignore those words you do so at your own peril..this time “It is different”

#133 Ret on 11.23.11 at 11:38 am

Mortgage insurance vs. Term 20 first-to-die-insurance

A very interesting article (Hamilton Spectator) for any younger couple going into a mortgage. I did not know that such an insurance product existed.


#134 Daisy Mae on 11.23.11 at 11:39 am

“I’ve little love for flippers. You feed price excess. Shame on you.”


Yeah, I’m not impressed. Not impressed, at all.

#135 Onemorething on 11.23.11 at 11:41 am

Sorry Jay your a flipper, there are thousands like you!

The challenge is once you’ve been bit it’s hard to stop!

Reminds me of that old Merry Melodies cartoon “The Gambling Bug”


“Oh and one more thing. The house we are currently looking for would be in the burbs but a more mature and established area, where lots are 60X150 at least. I am not a fan of a cookie cutter neighbourhood. To go with this, we would find work out there. NO COMMUTE!!!”.

what kind of dream world are you living in? Do you even read Garth’s posts?

Garth, did you just showcase this guy as an example of the delusional so we could roast him?

#136 Mr. Lahey on 11.23.11 at 11:41 am

Randy just shared this news out of Europe today with me. I may need a whole bottle of scotch with this one… Shithawks folks, it’s a total shithawk storm engulfing Europe. Canada doesn’t live in isolation. Be warned, not for the weak of heart.

Tommy Molloy, chief dealer at FX Solutions, called the German bond auction a “fricking disaster.”

“I don’t think I’ve ever seen a worse auction out of Germany,” said Molloy, who has been covering the bond market since the 1980s. “The eurozone looks like a sack of garbage right now. Even though Germany is the very best piece of paper in the eurozone, it’s still in the eurozone.”


#137 MixedBag on 11.23.11 at 11:43 am

Poor accidental flipper, netting 200K in two years tax free. You gained on your sales, but now you have to pay if you want to buy. It’s called moving with the market.

BTW, I hate flippers. (You were an accidental flipper, so I don’t quite hate you really, and in a stupid area too). They take affordable housing away from non-stupid people and drive prices up that stupid people are willing to pay.

And I never understood the line-ups to buy in such inconvenient areas, where you can’t walk to a corner store, where you have to drive to get anything anywhere. Stupid people!

I live in a part of Toronto that is not considered desirable, but we can walk to doctors, dentists, stores, groceries, banks, liquor and beer store, bus stops, parks, community centres, bakeries, library, pharmacies, skating arena, elementary schools – all walking distance. High schools and hospitals nearby.
Certainly there are areas that need improvement, but wherever I go looking when considering moving to a new neighbourhood, the “better” areas don’t have this.

#138 Bottoms_Up on 11.23.11 at 11:55 am

#44 InvestorsFriend (Shawn Allen) on 11.23.11 at 12:12 am
You forgot daycare. A lender doesn’t ask you what your daycare bill is, but for many it is similar to a mortgage payment.

My daycare bill (for 1 child in Ottawa) is $1300/mo, which is identical to my mortgage payment.

Granted, the daycare bill isn’t forever, but over a few years that’s a substantial chunk of change. Add in a concurrent 2nd daycare bill, and you’re looking at living in the poor house.

#139 David B on 11.23.11 at 11:57 am

Fr: The Guardian this morning

UK incomes fall 3.5% in real terms, ONS reveals

Big fall in salaries for average workers and sizeable rises for senior managers, says annual households earning survey

Is this not just what Garth has been spouting off about for months/years.

So to our flippers … go ahead buy in 905 and soon y’all will be selling to make ends meet.

Nothing changes, nothing changes … greed sets in and people buy above their heads and safe little thinking the cash will always flow …

Case you did not get it … The Supercommitte (USA) failed Super Big Time …. they could not even save 3 cents on the dollar as they bark at Europe to get their finances in order.

#140 Incubus on 11.23.11 at 12:01 pm

The flippers success because of this :

“When the wind blows hard enough, even turkeys fly”

Most of them at the end of the cycle they end up broke

#141 Junius on 11.23.11 at 12:03 pm

#118 Buy Low Sell High,

I believe everywhere in Canada will be lower in 5 years than it is now. Some areas like Vancouver A LOT lower.

Count me a Bear, like there was any confusion on that.

#142 DondWest on 11.23.11 at 12:07 pm

Here’s an example of what Jay and Marie will get for a 500K house in the burbs of Toronto. Enjoy the informative video (recommended you’re not drinking a glass of milk while viewing):


#143 Junius on 11.23.11 at 12:09 pm

Re: Flippers

Personally I have no issue with Flippers. I also have no issue with people who made a fortune shorting the Securitized Mortgage market in the US or even specing gold.

The problem is government policies that have allowed a financial culture to emerge where our energies go into pumping assets and speculation instead of building productive and valuable things.

Flippers and Speckers are a symptom and not a cause. In fact, focusing on them probably distracts us from looking at the cause. It is much like blaming people who take LIAR loans for being so stupid instead of focusing on the Banks who write the loans.

Flippers are just the, well, Flip side of that equation. For there to be losers there must be winners. My point is that if there wasn’t cheap credit, CMHC guarantees, et al then there wouldn’t be either and people could spend their productive time building value instead of extracting it.

#144 Ret on 11.23.11 at 12:11 pm

MANA steel in Hamilton. Another sad story.

Sandra Pupatello and Dolton, stand up and take a bow for loaning this company $9M one year ago.

City of Hamilton chipped in $201,700 as well to get rid of 18 PCB transformers. (Are they gone yet? Who knows?)

Looks like around 20 jobs created so far for $9.2M.

“Hey Dear, can you pass me that calculator?”


#145 disciple on 11.23.11 at 12:14 pm

The suburbs are carefully designed to produce the most painfully slow mental torture humanly possible. The war is for your mind, never forget this. Wolf Blitzer is a former Mossad spy, and he is giving you the news. Does anyone else see a problem with this?

And one should also wonder about Sandusky’s interview with Bob Costas and the glaring implications that emerged. Note that his lawyer, Joe Amendola, at age 49, impregnated a 17-year-old, let him go on the air.

“BOB COSTAS: Are you sexually attracted to young boys, to underage boys?
JERRY SANDUSKY: Am I sexually attracted to underage boys?
JERRY SANDUSKY: Sexually attracted, you know, I enjoy young people. I love to be around them. But no I’m not sexually attracted to young boys.”

When you repeat a question that you were just asked, that generally means “Yes”, and you’re looking to buy time to figure out how to say “No.”

It took Sandusky exactly 16.3 seconds to answer No. Regardless of how the MSM neglects the deeper facts of the Sandusky case, you can rest assured, there is much deeper involvement, both in elite circles, law enforcement and of the US government.

Remember the Franklin Cover-up? No? Well, I’m not surprised. That horrific episode involved everyone from the local Omaha newspapers, the Omaha chief of police, the FBI, and led all the way to the back door of the White House and upper levels of our US Military.

And “good ol” Larry King escaped that pedophile nightmare unscathed because of higher powers protecting him. And that wasn’t just Larry King having his way with very young boys, it involved Illuminati satanic cultists torturing, raping, mutilating, eating and burning their victims to make sure not one shred of evidence was ever found.

Very sorry to disturb your morning coffee…

#146 disciple on 11.23.11 at 12:42 pm

“Do you know we are ruled by TV?”
— from the poem An American Prayer by Jim Morrison


#147 Aussie Roy on 11.23.11 at 12:48 pm

Aussie Update

Australia’s residential property market is headed for its worst year since the global financial crisis as growing economic uncertainty deters buyers.


The Real Estate Institute of Australia is urging the government to adopt a successful Canadian scheme that allows first-home buyers to tap into their superannuation to assist with making their first purchase.


Banks are tightening the screws on development sites that have breached borrowing covenants, pushing more into receivership with “at least” $1 billion worth of distressed property currently for sale.


So the rate cut that stopped the nation has come and gone. Will we see more rate cuts? It is possible. Will the rate cuts provide a floor in the housing market with the possibility of a recovery next year? Yes, maybe.

The two questions are dependent on what happens in Europe. Europe is all-important and will be a key driver behind the housing market next year. The reasons Europe is important are many but let’s start with the main ones.


AUCTION results in capital cities continued their lacklustre run over the weekend.


#148 Form Man on 11.23.11 at 12:52 pm

# 143 Junius

excellent post ( while I am enjoying my superhero status, the lack of ‘changeroom’ phone booths in this age of cellphones provides a challenge. fortunately westernman is a weak and rather unresourceful opponent )

Daisy Mae # 186 yesterday

actually highway 97 only follows Okanangan lake between Penticton and Kelowna ( approximately half way ). The endless strip mall, periodically interrupted by billboards, that stretches from Westbank north to Kelowna airport is undoubtedly one of ugliest stretches of road in BC

#149 disciple on 11.23.11 at 12:53 pm

I remember one of the curiosities of Georgetown was the majestic Kingdom Hall, in which was poured all the gold this side of the prairies. I estimate in passing, close to 60 acres allotted to this behemoth of mind control. Is it still there?

#150 Mr. Lahey on 11.23.11 at 1:09 pm

Sorry folks but the shithawks are out in in full force today.

“The head of the City’s financial watchdog, Adair Turner, warned that the global economy was at risk of a deflationary spiral as the private sector and governments seek to pay off their debts at the same time.”


Hmmm, I wonder how this will affect Canadian real estate…

“Jim Lahey here telling all citizens of Sunnyvale Trailer Park (and Canada)to take cover. The long awaited shithawks are coming in for the kill.”

#151 Dorothy on 11.23.11 at 1:19 pm

#143 – Junius

You are correct when you say that flippers and speckers are a symptom, not the cause, of the current financial/economic mess we find ourselves in.
Ditto for the legions of the overly indebted.

Government policies around the world have resulted in almost bringing the entire globe to its economic knees, yet the media has barely focused on that aspect of this crisis.

Our government in particular, relaxed mortgage borrowing rules to the point that people without any money can buy houses they cannot afford. It’s not CMHC per se that caused our current problems, they’ve been around for years and were not an issue when downpayments had to be at least 10% and tighter restrictions were enforced re the amount borrowed, particularly the length of amortization.

Why is the media giving the government a “free pass” when it comes to the way poor past policies contributed to this current mess?

Another example is the current CBC exposé of how our infrastructure is crumbling. There’s lots of talk about how to fix it, yet very little discussion of the how and why it was allowed to get into this mess in the first place. What happened to all the preventative maintenance over the years? What kind of policy decisions allowed such a situation to arise?

Ditto for what’s going on in Europe. We’ve heard lots of talk about the potential for sovereign defaults and what will happen as a result. And lots of talk about what needs to be done to avoid it (usually bail out the wrongdoers on the backs of the workers). But we’ve heard very little about government policies that allowed the financial crisis to happen, and the corporate pressures placed on those governments to get them to enact those policies.

When is the media going to start focusing on exactly what led up to this current mess? How is it that almost every single country in the world is on the brink of financial disaster? All at the same time?

We just came through a boom period, so where did all that money go? Obviously not on infrastructure! How could all these countries end up so broke so quickly after just going through such good economic times?

Even in the States, there seems to be a lot of partisan finger pointing between political parties, but little real analysis in the media of the kind of government policies over the past decade that contributed to such a financial/economic disaster. So again I ask, why is the media giving previous governments a “free pass” when it comes to allocating responsibility for what’s currently happening? Where’s the investigative reporting leading to the exposure of the causes of what’s going on? And who or what was behind such poor policy decisions?

#152 S on 11.23.11 at 1:24 pm

Little boxes

#153 robert james on 11.23.11 at 1:38 pm

#148 Form Man I could not agree more with you regarding “the strip mall between Westbank and the airport ” .. Butt ugly IMHO !!! Classic example of what happens when Greed and Stupidity team up.. The Okanagan Valley was a beautiful place in the 60 s and 70 s though.. We spent a couple of weeks touring Nova Scotia in Sept.. Now that really is a beautiful place compared to overrated Kelowna. I have lived in Peachland off and on since 1967 before the orchards were replaced with this ugly pink stucco garbage and even uglier condo s.. I do drive South to Penticton to shop or just for a drive as it is still nice down there..

#154 Young Old Fart on 11.23.11 at 1:49 pm

Closed in 2010, sold in 2010. Profit: 180K. Closed in 2011, sold in 2011. Profit: 30-40K. What would you call yourself? — Garth

I’d call him one smart SOB!!!

Why the hate on for flippers? Just because people didn’t take the risk themselves so they put the hate on for the ones that prospered? Well then ya’ll can put the hate on me….just closed another deal…. Acquired in 2002 for 200k….sold to a developer for 1.5M.

Think I’m gonna take the soul mate for a round the world vacation……

Man I love RE!

#155 Form Man on 11.23.11 at 2:09 pm

#151 Dorothy

I agree completely. The Feds especially ( but also other levels of government in Canada ) have not addressed the aging and failing infrastructure issues in any meaningful way. The ‘stimulus’ money after 2008 was spent on ‘quick turnaround’ type projects. Sadly this money is now out the door, and governments have begun cutting back at exactly the wrong time. The lack of leadership and foresight demonstrated by the Harper government is appalling but unsurprising. In their zeal to ‘starve the beast’, the is little chance there will be any funds available for infrastructure by the time the Tories are turfed from office. Ideology over common sense and facts…….

#156 TaxHaven on 11.23.11 at 2:14 pm

@#154, agreed, nothing wrong with flippers…they are accepting risk abhorred by others, IF they use their own money. (which they usually don’t, however…)

The problem with flippers is that they seem to believe that there are always more “suckers” out there, suckers with access to cheap money. Until there aren’t any…

There are good times and bad times to be a flipper. This is a bad one unless you have DEEP pockets, a 30-year horizon and are prepared, after that time, to POSSIBLY get back your nominal costs…before inflation.

#157 george Klein on 11.23.11 at 2:23 pm

Every time I here that Chinese and Foreign Investors are the ones driving prices up I wanna scream.What a pile of horse crap. Chinese and foreign investment in Canada has nothing whatsoever to do with Real Estate prices.
They buy much more real estate in California, Hawaii, Seattle, Florida, London England and other coastal areas. These area prices have done nothing but fall drastically. The only thing that has affected real estate boom is low interest rates, 30 to 40 year amortization. with 5% down and East to get mortgages. Just look at how much mortgages CHMC has given out in the last 3-4 years. They have given out more mortgage value in those 4 years than the last 50 years combined. IS anyone aware of that or have you all closed your eyes. CHMC is the next Fannie and Freddie. No one should ever forget that this will be Canada’s undoing. Its the perfect storm ready to wipe many people out. 80 to 90% deflation is very possibe. 50% is as sure as you can say “Harper trades in Bubble for Majority.”

#158 Jan Etter on 11.23.11 at 2:24 pm

“#122 Jay on 11.23.11 at 10:58 am
Somebody must see my point…”

Ok, I’ll put my 2 cents in and defend you. Your results looks like a flip but it is “accidental” as #137 MixedBag on 11.23.11 at 11:43 am put it. To me a flipper (and I know a couple) buys with the sole intent of selling for a profit as soon as they can claim the principal residence exemption, and not with the intent to live there. I won’t begrudge you your good fortune or blame you for what’s wrong with the real estate market.

“#115 Jay on 11.23.11 at 9:58 am
Oh and one more thing. The house we are currently looking for would be in the burbs but a more mature and established area, where lots are 60X150 at least. I am not a fan of a cookie cutter neighbourhood. To go with this, we would find work out there. NO COMMUTE!!!…”

Well, I’d agree with some posters that your wish list is pretty unrealistic – these days houses are easy to find, jobs aren’t. Burbs, established area, min.60×150 lot, not cookie cutter, near employment areas – not impossible but the areas I can think of that meet that criteria you’re looking at $1M-$1.5M and I’m not sure what your budget is. I’d worry about finding the job in the burbs first, then find the residential neighbourhood nearby that meets your criteria.

#159 spaceman on 11.23.11 at 2:35 pm

I have a great Realtor, ok sounds like an Oxymoronic statement but it is not. They do exist, and if you want their names I will give them to you.

My Realtor, Darkanion, was also a flipper, and so has built, bought, flipped, and reaped the benafit. His knowledge is immense, on a showing of a “fixer upper” (more like “buller dozer”) he showed me the roof tiles were not actualy changed as stated, and nor were the drain tiles. The listing agent lied, oh boy. But i digress.

He owned 6 units, condos, house, and I think town house. but has liquidated everything, except for one, that has sat on the market for 4 months, and dropped in price 3 times, still no buyer. Now that I have retained him as my Agent (Garth suggested this, good advice) he is very candid and works for me. He wants to see me in a home for my family. His take, the market is soft, well ya, he is exiting big time and pulls no punches, but his job is to sell. He has sold nothing in the last while. Including his own rental. Oh, and it sits empty, not a great dividend investment if you ask me.

The smart flippers have exited the market, the dumb ones are still trying to get in.

I am waiting for spring, Febuary or March I will start low balling offers again. With a suite, the mortgage and overhead, minus the suite income is the same as I pay rent now, almost, but I can’t stomach paying 50 grand more for something.

#160 fancy_pants on 11.23.11 at 2:39 pm

to all the cry babies who hate flippers…

don’t hate those who happened to be smarter or luckier than you at the RE game that is before us. Instead, hate the morons on the hill who set up the game – they are the ones to be ashamed.

You are in a tough spot now though – hold off buying or waiting and renting. I would be tempted to rent now as it feels like a peak but two years ago the same dire warnings were before us and how well has that paid off? not so well for those awaiting a correction.

Shrug it off Jay – sour grapes are always bitter.

#161 bill on 11.23.11 at 2:41 pm

I wonder if the blog dogs can help me out?
Many years ago when we were travelling to the muskoka region we would drive by this perfectly planted forest. Like guardsmen the lines were so straight. trees about 10 feet apart and really cool to drive by as you passed by the different angles showed straight lines of sight through this beautiful endeavor.
It was planted by german jews who got caught up in the red tape after escaping from germany at the start of world war 2 .
As they were viewed as hostile[?!!?] aliens by the canadian government they were treated as prisoners of war. And duly put to work planting trees. And the result was this perfect forest.
Where is it, I wonder ? before barrie or after it? .
thanks !

#162 Jehovah Joe on 11.23.11 at 2:42 pm

#149 Disciple

“I remember one of the curiosities of Georgetown was the majestic Kingdom Hall, in which was poured all the gold this side of the prairies. I estimate in passing, close to 60 acres allotted to this behemoth of mind control. Is it still there?”

Are you kidding me disciple?? The Jehovah’s Witnesses as a global organization are alive and well and growing in leaps and bounds.

#163 Devore on 11.23.11 at 2:43 pm

#80 Johnny O (and others like this comment)

Hate for flippers? I don’t know about that. There’s irrational hate for everyone out there, so I don’t deny that.

There are different kinds of flippers. One kind buys a run down house, slaps on some paint and cheap cosmetic updates, and sells for double the price. These houses will be passed around like hot potatoes to unsuspecting buyers who unknowingly bought after an incompetent house inspection (or without inspection at all). They will bring misery and massive bills to anyone who lives in them until they are torn down.

The flippers in our story appear to be pre-sale condo flippers. Different breed.

Now, there are many reasons to dislike flippers, especially those who do no or little work to earn their profits. They merely hold property in a bull market, and resell it later, often tax free after jumping through some tax loopholes, or just evading taxes straight out. Houses are seen as a basic need (shelter), and there are many families out there who are homeless, or struggling to put a roof over their heads, so anyone seen as speculatively pumping up the price is looked down upon. Yes, I see the irony.

Our flippers here have been profiting from the rapidly rising property prices, and didn’t mind the price increases, because they were profiting from it; it didn’t matter how much houses cost, as long as they were assured someone would buy them later at a higher price.

But now that they are contemplating buying a house they will not flip, now that it’s their own money, oh now prices are too high and unreasonable!

That’s where the “hate” is coming from.

#164 Nonno Nicola on 11.23.11 at 2:46 pm

#131 Big Rider

“11 years since the turn of the century and all the major indexes are lower than they were back then.”

Ah, that is a righta Grande Rider. 11 years and da pazzo stoca marcato is lower than backa thena. Reala estata on da other handa has gone uppa, uppa and uppa for da lasta 11 yearsa. Figlio mio, when you gonna learna where to putta youra moneta?

#165 Stevenson on 11.23.11 at 2:49 pm

In any situation or environment the strong survive. In this scenario is the smart and saavy. Flipper or investor whatever you want to call it, we make money on these opportunities. The market is inflated because of these people too, but for people who decided to wait for a crash for the past few years that did not work out too well for you did it?

Selfish? Yes but I am not here to do charity. Heck I try to not to pay almost any taxes whenever in town. Only in stupid Canada where we have a system that motivates people to be lazy and not work. Union workers and their strikes and welfare moochers too.

#166 Regan on 11.23.11 at 3:07 pm

#120 InvestorsFriend (Shawn Allen) – yes, but you offered up your math to debunk the idea that ‘reasonable’ housing costs could be calculated as a multiple of income. You’re right in that cheap interest rates make payments manageable on larger loans, but if the current interest rates are at historic lows, then the buyer incurs risk that they will rise to normal levels before that loan is paid. To assess the overall risk in the market, it’s reasonable to look affordability based on averages – at the average cost of a home, the average salary and average interest rate of an average loan amount to assess potential risk and market movement in the long-term.

#167 Snowboid on 11.23.11 at 3:13 pm

#128 Bobby on 11.23.11 at 11:16 am…

Car purchase in US? Your colleague maybe didn’t do enough research first!

Our first experience importing a car into Canada cost us in time:

1 hr online research
2 hrs at dealership
2 hrs getting DRL relay installed
10 minutes scanning and emailing documents to US Customs Blaine
10 minutes at US Customs
20 minutes at Canada Customs
10 minutes at RIV office – Surrey
45 minutes at inspection station (Canadian Tire)
20 minutes installing front plate holder
30 minutes at ICBC

Including the purchase price, addition of DRLs, then adding the GST/PST, Duty, AirCon fee, RIV fee, Inspection (provincial fee), removal of front window tint, our net savings:


I would say that was definitely worth the time and effort, eh?

#168 Junius on 11.23.11 at 3:30 pm

#151 Dorothy,

You asked, “Why is the media giving the government a “free pass” when it comes to the way poor past policies contributed to this current mess?”

Because we don’t have any independent media left. Our media outlets have been acquired and consolidated. Journalism, as profession, is dead.

#169 Ian on 11.23.11 at 3:34 pm

Hi Garth, my friend forwarded this blog to me in a discussion about housing. I myself am a renter, and have been renting in central Ottawa for 5 years, out of school. I have to say, the pricing in Ottawa, and other cities I agree is out of hand. I have travelled to many places around Canada and North America, Europe, Asia. I can say that housing does not add up. Currently, in Ottawa, a 500 sqft condo is running around 300K in the central part of the city w/o parking! Not to mention the condo fees are about 300/mth after a year. My friends keep raging on me to get in, but I refuse. I’m an engineer and in short, I enjoy numbers and for some reason economics! Your blog is right, it doesn’t add up. Well I know a correction of some sort is in the pipeline. My question to you is something the Economist reported on a ways back. What will the housing crisis be when the baby boomers have to sell their McMansion because of their age, disability, death? I’ll continue to rent at my all included 1 bed + den apt in Ottawa for 850 a month. God bless rent control too, last year 0.7% increase 5bucks a mth! Its going to be really scary for cities when housing goes down and their revenue from property taxes too. So much to chat about. Thanks Garth!

#170 Roial1 on 11.23.11 at 3:37 pm

#73 Two-thirds on 11.23.11 at 2:12 am

Whent to the Edmonton Journal article you linked to.
They quoted a Sandra Young as their “Houseing Expert”.

This is her web site.

Is this called “Un-biased journalism”?????????


#171 Mr. Lahey on 11.23.11 at 3:39 pm

I’m on a roll today folks, Randy just keeps giving me all this doomer news. To boot, Ricky is stoned out of his skull and is in a shoot out with Cyrus as I type…

2008 will seem like a walk in the park when this current financial crisis finally blows up.

From Forbes comes this lovely bit of news:

“Estimates on the amount of derivatives out there worldwide vary. An oft-heard estimate is $600 trillion. That squares with Mobius’ guess of 10 times the world’s annual GDP. “Are the derivatives regulated?” asks Mobius. “No. Are you still getting growth in derivatives? Yes.”

In other words, something along the lines of securitized mortgages is lurking out there, ready to trigger another crisis as in 2007-08.”


#172 Darlene on 11.23.11 at 3:56 pm

Okay Jay, you’re not a flipper but hopefully you do realize that you were lucky to make the money that you did. I get now being ready to settle into a home where you can invision yourself living for years to come. I also get the idea of large lots with character and livability.

Where you totally lose me is in your delusion of finding equivalent work in Georgetown that compares with your current 120,000 income. Yes Halton Region does have higher than adverage incomes but that is because they tend to travel into Toronto for work and there’s a higher median age. Unless you both work in education or healthcare you will probably be hard pressed to find suitable employment.

If you truly don’t want to lose you goodfortune of capital that you gained try looking further west to K-W or Guelph; or south to Hamilton. These areas are large enough to be self sustaining. Most of the people who live in these areas work in the area and have wages that compare to yours. And yes housing prices in these areas are not as high as the 905 area. You could actually find something suitable at 500,000.

#173 bigrider on 11.23.11 at 4:07 pm

#163 Nonno Nicola

But Nonno, I did what you say and I boughta real estate EVERYWHERE in the world and it is all down. I lose alot of moneta in the USA and Ireland and all of Europe and even in our own motherland bella Italia.

What maka Toronto so differenta ?

Does the ground grow a better Tomato in a Toronto?

For an Italian, that’s lousy mock Italian. — Garth

#174 Guan-Di on 11.23.11 at 4:10 pm

#138 Bottoms-Up

Move to Gatineau, my daycare bill for two kids is $280 a month… sure I pay higher taxes but the utilities are cheaper and the mortgage for a comparable house in a comperable neighbourhood is about a third of what it is in on the Ottawa side… what are you waiting for?

#175 Devore on 11.23.11 at 4:11 pm

#113 Jay

Well, that puts things in a somewhat different light. As with all “Dear Garth” letters posted here, the unstated assumption is that people comment based on what information is provided in the email and post. Which never reveals the entire situation and context. I tend to not comment very much on such posts, because there are so many assumptions you have to make, you might as well be talking hypotheticals.

#176 Peter (NYC) on 11.23.11 at 4:12 pm

#25 Timing is Everything
What a blast from the past – thanks for the Rush clip. Never saw that one before. I can swear that some of those clips were from subdivisions in Maple and Woodbridge where I spent my childhood. It reminds me how strongly against suburban sprawl into subdivisions I always felt. Garth’s post today really resonated with me.

#177 zeeman1 on 11.23.11 at 4:13 pm

Garth, bang on today. Cut to the bone, baby!

#178 bigrider on 11.23.11 at 4:14 pm

#165 Stevenson.

I’m a Ok with a flipper so long as risk is all his.

Enter CMHC, exit risk to the flipping assh&^% right?

#179 bigrider on 11.23.11 at 4:17 pm

Garth to Bigrider at #173-” ..lousy mock Italian”.

Wasn’t trying and wrote quick.

Promise to do a better job next time and..

I know you chuckled oh bearded leader.

#180 Westernman on 11.23.11 at 4:19 pm

Have to say I like the comment about the used mini-vans. Mini-vans are like sheeple droppings…whenever you see lots of those things you know you are surrounded by dumb-A$$ brainwashed sheeple…. I’ll bet Form Man has two mini-vans in the driveway of his suburban clapbox…

#181 Devore on 11.23.11 at 4:25 pm

#119 Nick in Calagary

Garth has no love for house flippers, and neither do most people, but they are providing liquidity in a relatively illiquid asset, and they aren’t necessarily driving the price increases, it could also have something to do with the idiot buyers of the flipped houses accepting higher asking prices.

This is the same rationale given by HFT traders (High Frequency Trade). That they are providing much needed market liquidity. The problem with this is that when markets turn down sharply, all that liquidity suddenly disappears. So they are reaping the benefits on the way up, but exacerbate an already bad situation on the way down.

So they are not providing liquidity at all; they are heating up an already hot market with their excess turnover, and cooling down a cold market by withdrawing. They make higher peaks, and lower valleys. They are injecting additional demand which drives prices higher, and then removing demand which drives prices lower.

Speculation can be good and is needed in a market, because it provides a balancing contrarian view. Speculators take the opposite side of a long trade in a bull market. The long side in a declining market. They find undervalued and overvalued assets, and bring things into balance. The kind of liquidity provided by flippers is exactly the wrong kind of speculation, and gives all speculators a bad name.

Whether you are day trading or flipping houses, you are a momentum investor, and move with the herd. You provide excess liquidity in a hot market, and remove liquidity in a cool market, the opposite of what a liquidity provider should be doing.

#182 CTO on 11.23.11 at 4:32 pm

161 bill

“And duly put to work planting trees. And the result was this perfect forest.
Where is it, I wonder ? before barrie or after it? .
thanks !”

That forest is just north of barrie Bill.

#183 julian b. on 11.23.11 at 4:35 pm

as expected:


jay, go ahead and buy/sell some more real estate – this is your era after all.


#184 Dan in Victoria on 11.23.11 at 4:44 pm

Not much to say lately,
Form mans been doing a good job, more energy than me for sure.
Looks like we have a solid correction underway in Vic, at least the properties that interest me.
Have seen a few that were tempting to buy but am just going to sit tight for 6 months or so.
Last good one I saw was a single family house with suite, the suite rental alone would carry the house payments…..
Was talking to a fellow this morning who has 6 rentals 3 vacant, dropping his rent just trying to fill them.
Lets see where this goes.
Its been a long time coming.

#185 Form Man on 11.23.11 at 4:48 pm

#180 westernman

hey buddy ! great to hear from you again ! actually my driveway resembles a minivan used car lot……and behind all the vehicles sits a hideous plastic-clad tribute to 1980’s suburbian dreck…….you would feel right at home………….

#186 disciple on 11.23.11 at 4:49 pm

#181 Devore… I like your attempt at a comparison because it speaks to the heart of the issue: is making money off flipping a real investment? The one glaring difficulty I see in your comparison is that HFT run their own risks, while flippers run that of the taxpayers’ via CMHC. Of course, the HFT (investment banks) have been bailed out by the taxpayer, so in that respect your analysis is practically correct. Also, the speculators are creating the “hot” RE market, while I can’t say the same for daytraders.

“Whether you are day trading or flipping houses, you are a momentum investor” – Speculating is not investing. You’re fusing/confusing definitions here, but perhaps that is the point. We haven’t really decided if speculating in housing was indeed a good investment if the end-goal was ownership. No “real” wealth has been gained by anybody.

#187 BPOE on 11.23.11 at 4:52 pm

LOVIN IT. Reinforces everything I have been posting

OTTAWA — Bank of Canada governor Mark Carney said Wednesday the central bank is standing fast to its price-stability policy and will keep lending rates near historic lows to limit the impact of a global economic downturn.

#188 JohnnyBravo on 11.23.11 at 4:54 pm

TSX stair-stepping down like a slinky lately. Drop. Consolidate. Drop. Consolidate… I’m not an expert in technical analysis, but in my experience this is a very bearish pattern. BTW: TSX down abut 18% from the March-April double top.

Out of ZH:
Trouble brewing in Syria. US embassy tells Americans to get out immediately, while carrier CVN-77 parks itself next to that country.

Bank stress tests coming. Will they once again restore confidence? I’d be surprised without an actual material change.

Spreads widening. 2008 crash signals (though not necessarily a crash) according to money manager Ben Davies.

Are we getting ready just in case?

Our obsession with equity markets is unfortunate and often debilitating. This should form only one part of a balanced, defensive, effective portfolio. — Garth

#189 disciple on 11.23.11 at 4:58 pm

“Our rulers make the news, but they do not appear in the news, not as they really are-not as a political class, a governing establishment, a body of leaders with great and pervasive powers, with deep, often dark, ambitions. In the American republic the fact of oligarchy is the most dreaded knowledge of all, and our news keeps that knowledge from us. By their subjugation of the press, the political powers in America have conferred on themselves the greatest of political blessings-Gyges’ ring of invisibility. And they have left the American people more deeply baffled by their own country’s politics than any people on earth. Our public realm lies steeped in twilight, and we call that twilight news.” —–Walter Karp

“Two percent of the people think; three percent of the people think they think; and ninety-five percent of the people would rather die than think.”—-George Bernard Shaw

You can’t wake someone who is pretending to be asleep.–Native American Proverb

“Truth is a fruit that can only be picked when it is very ripe.”–Voltaire

I noticed a while ago, that often, the “nonsense” I post here, becomes the indirect subject of the G-man’s evening’s posting… so here goes… I pick Investing vs. Speculating….

#190 Timing is Everything on 11.23.11 at 5:06 pm

#167 Snowboid

2012 Honda Civic Sedan Si (MSRP)

$25990 CDN
$22405 US

What the hell did you buy? A Lamborghini!?

#191 Habs 76-79 on 11.23.11 at 5:14 pm

Carney not sounding too worried about the future for Canada. His spin machine is turned on a rather high speed I guess.

Lets see though, more worries now that China’s economy may be hitting the ground hard.

The USA has been bouncing along the economic bottom for the last 4 odd years and looks to keep doing so.

Europe is in a financial dominoes that now is looking to threaten the heart of it, Germany into the quagmire.


All’s well in Canada. No worries about having the highest personal debt load of the G-20, a Fed govt. that will not be balancing the budget ANY TIME SOON and the provinces in tow. The Feds while under Hier Harper are good for growing govt., not reducing or better managing what it already has. Inflation of life’s necessities will be an issues even though official inflation numbers are politically/bureaucratically skewed to look lower. Canada will like it’s peers print billions of more FIAT money for “economic stimulation” making Einstein’s quote for the definition of insanity to be true, ” Doing the same thing over and over but expecting a different result is the definition of insanity.” Our trade will continue to stumble along with the USA and will flat line to Asia too, but housing will BOOM BABY BOOM and who the “F”cares if we are all in debt up to our eye balls. We are sheepish, good, lil Canucks and we believe what we are told by our govt. and the cronies who live off such. Have any of you all here not noticed, OUR COUNTRY ROSE ABOVE ALL OTHERS! Forever we will be above it all and all other nation states.

What is that coming but still for now in the distance sound?

Errrrrrrr, squeeeeel, crash! (closer, closer and closer).

#192 GTA Girl on 11.23.11 at 5:23 pm

Thankyou all for the suggestions on where to move. All are good and solid places.

King Township/Kleinburg used to be places you’d see people still on horseback. That was only 15years ago.

It’s not that I want that back, but suddenly Brampton is at my door. Bigrider will tell you that Vaughan is building it’s 5th Walmart, gridlock is insane, and it’s Fugly developments of odd configurations of semis, townhouses. All more expensive than what I paid for my home and huge lot in 2003. Almost 2/3 more.

Has income gone up enough to justify the costs? No.

At least with my home I know I can rip it down and build something better, the lot size is huge…not postage sized.

I’m grateful to have left Mississauga back in the 90’s. I laughed when a person mentioned that city staff should be taken out and shot.

Where is quality anymore? Workmanship. Lifestyle. Experience…? I’m not seeing any.

I’m thinking Montreal…..

#193 Devore on 11.23.11 at 5:36 pm

#186 disciple

Also, the speculators are creating the “hot” RE market, while I can’t say the same for daytraders.

Although HFTs are relatively small, I don’t think their effect on the markets is small. While a fund may move a few billion in transactions every week, an HFT can churn a couple million hundreds of times in the same period of time. They also close out their positions at the end of the session, because the after hours can be so volatile. Trading volume has a large effect on prices.

#194 Junius on 11.23.11 at 5:45 pm

#165 Stevenson,

Are you equating flipping properties with working for a union? At any job that actually involves showing up on a daily basis?

Are you completely nuts?

#195 Junius on 11.23.11 at 5:47 pm

#187 BPOE,

Since when did you predict a “global economic turndown”?

Let me see. How about never. If you don’t think this is going to impact Canada you are as nuts as your pumper pal Stevenson. You two should get a room.

#196 martin on 11.23.11 at 5:53 pm

Our obsession with equity markets is unfortunate and often debilitating. This should form only one part of a balanced, defensive, effective portfolio. — Garth

— how the hell can you ‘balance’, ‘difersify’ effective portofilo when everything out there is going down, down and down?? and when i mean everything, it really means everything!! well other then real estate so far.

Learn more. Bond prices rise when equities fall. REITs have risen smartly, and pay good income as do many solid income trusts. Preferreds have maintained value and pump out a continuous dividend. Diversified. Balanced. Effective. Just as I said. — Garth

#197 Van guy waiting on 11.23.11 at 5:56 pm

#187 BPOE on 11.23.11 at 4:52 pm
LOVIN IT. Reinforces everything I have been posting

OTTAWA — Bank of Canada governor Mark Carney said Wednesday the central bank is standing fast to its price-stability policy and will keep lending rates near historic lows to limit the impact of a global economic downturn.

Fear!!! Rates going nowhere in the next year.

#198 Mr. lahey on 11.23.11 at 6:00 pm

#191 Habs 76-79

“What is that I hear but for now still in the distance?”

The answer is shithawks Habs 76-79. The sound you hear is the shithawks coming in for the kill.

You are tedious. — Garth

#199 Hammer1 on 11.23.11 at 6:05 pm

#162 Jehovah Joe
scary cult….sorry you’ve succumbed to the brainwashing

#200 Nonna Nicola on 11.23.11 at 6:10 pm

#173 Bigga Rider

Why is Toronto differenta you aska Bigga Rider? Toronto is la terra del golda Bigga Rider. I coma here in da 50s and I know the minuto I get offa da boata dat Toronto is da terra of golda. Nonno Nicola never looka backa and he nevera buya the landa in odder crazy paesi not even in my homaland, Italia. No Bigga Rider you grew uppa in dis citta and you know what da housa costa when you were a Little Rider and vat they costa nowa? You beena a here all alonga Big Rider and you watcha da price of da housa go uppa, uppa and uppa but you never make da investamento in da housa. No, you a smarta boya, you a go to da universita and you investa in da stocca marcato and losa da moneta. Listen filgio mio to Nonno Nicola and forgetta da resta da worlda and put youra moneta in the terra of golda, Toronto, la bella citta.

#201 Markey on 11.23.11 at 6:17 pm

reply to #161 Bill – The planted forest you describe is North of Barrie in Midhurst near the Simcoe County District School Board office.

And to #111 Junius and #63 billy, see: http://www.businessweek.com/magazine/chinas-superrich-buy-a-better-life-abroad-11222011.html

#202 Hammer1 on 11.23.11 at 6:20 pm

#171 Mr. Lahey
you and randy just chillax. Garth says that those darned derivatives that Warren Buffet termed “weapons of Financial destruction”. will never unwind. You can take that to the bank….Look, Randy, the shithawks are turning around !

#203 new_era on 11.23.11 at 6:23 pm

Your German bonds are worth shit!!! at 2%. No one want you lousy euro’s

cmon, anti up and raise the rates to 7 to 15 %. This is a early indication that interest rates will rise and the Euro countries will not be able to service its debts.

Take note Canada. First Euros, then Yens.
If no one wants to buy your debt, then how do you get more?


#204 GTA Girl on 11.23.11 at 6:24 pm


75 stories. 75. This is in addition to all the condos coming down the pipe. All glass. Overpriced. But now Toronto city hall is in the development business.

Is this not conflict of interest?

I’m sorry. This is beyond making sense. There is something nefarious about the condo development in Toronto.

#205 Dr. Cornwallis on 11.23.11 at 6:46 pm

124 Kevin wrote:
“OK, so we hate cookie-cutter, postage-stamp-lot suburbia and we hate concrete “glass boxes in the sky” (condos).

So, where should we all live, then? Should we all live in a nice, well-built bungalow, on a 1/4 acre of mature land, in the heart of the city? All 2 million of us?

Anyone else see the problem with that?”

Bump – I’d really like to see some responses to this question.

I don’t have one myself – other than maybe we start redeveloping existing urban areas into parisien-style 5-6 storey mixed use areas with some serious atttention to architecture, parks, and other amenities. I don’t hold out much hope though.

#206 Junius on 11.23.11 at 6:51 pm

#201 Markey,

Yes, I saw the Bloomberg article this am. I thought the part about the emigres not wanting to report world wide taxes of being interesting along with the people they hire to clean up their personal history.

The last line paragraph was also very interesting:

“Longer term, if China’s economy continues to grow, the emigration surge could abate. Ski resort entrepreneur Li says some of his friends are reconsidering plans to get foreign residency. In part that’s because of stricter rules in Canada and elsewhere. And while rich Chinese still crave Canadian or U.S. degrees for their children, they may see less reason to emigrate. “When I first went to Canada, I thought China was very backward and it would take 50 years for us to catch up,” says Li. “After 10 years, we can all see that China will absolutely surpass the rest of the world.”

#207 Okanagan Renter on 11.23.11 at 6:52 pm

Ontario $443 million in the red (http://www.thestar.com/news/canada/politics/article/1091436–ontario-takes-443-million-hit-thanks-to-global-downturn?bn=1)

If anyone in Ottawa still reads the good book, I’d recommend Daniel 5:25-28 (with creative license):

“God has numbered the days of your low interest rates and brought them to an end. You have been weighed on the scales and found wanting. Your kingdom is divided and given to the loan sharks and collection agencies.”

#208 Westernman on 11.23.11 at 6:53 pm

Form man,
Why in the name of hell’s half acre would I feel “at home” in some characterless, souless, chipboard Southern Ontario dung hole … that sort of unrepentently sullen lifestyle is for compliant slaves like you…not free men.

#209 Onemorething on 11.23.11 at 6:54 pm

Interesting Point from MISH regarding the EURO and debt in Europe.

“Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the “bail out” debt foisted on their country to be null and void. That person will be elected.

Greece, Finland, Germany, Belgium, and even France are possibilities. All it will take, is for one charismatic person, timing social mood correctly, to say precisely one right thing at exactly the right time. It will happen.”

Use EURO as the scapegoat for going back to traditional currencies to reset Europe?

What will the likes of the UK do? Join the EURO zone to do the same? This might get the USA out of the backlash!

You can now see how all global markets are so closely connected and it doesnt matter if even Greece gets a cold somewhere in your portfolio, you own part of it!

#210 Onemorething on 11.23.11 at 7:00 pm

The following are 25 bitter and painful facts about the coming Baby Boomer retirement crisis that will blow your mind….


#211 bigrider on 11.23.11 at 7:02 pm

Disappointed in your censorship of my last comment .

Really?you afraid of what I said? Really?

You have been warned previously. — Garth

#212 Longterm on 11.23.11 at 7:03 pm


I’ve read your book and re-read the bond section a few times. I notice that you don’t cover bond ETFs. I want to add some bonds to my portfolio and am considering using various iShares bond ETFs instead of purchasing bonds directly via a broker. What do you think of bond ETFs VS direct ownership of bonds? Can you point me to further reading on the topic of direct ownership of bonds versus bond ETFs to help me get a handle on the pros and cons?


#213 bill on 11.23.11 at 7:16 pm

markey thanks a lot man!

#214 bill on 11.23.11 at 7:18 pm

and cto thankyou as well

#215 Michelle on 11.23.11 at 7:35 pm

@116 Hammer1-

I agree with you Hammer. The traffic congestion at the Hurontario and Burnhamthorpe intersection is horrible. That’s why I never walk over to the Square One Mall even though it’s theorectically 5 mins away. Luckily for me, all my little Ukranian, MiddleEastern, South Asian and Korean grocery stores are located to the SouthEast of that intersection, so I can avoid it.

I’m hoping the LRT will help the traffic congestion eventually but my fear is that, if the Hurontario corridor gets “gentrified” like Roncesvailles Ave. where my sister used to live, then all those family run businesses won’t be able to afford the rent and my great little cheap restaurants will be replaced by organic butcher shops and doggy grooming salons. :(

#216 Form Man on 11.23.11 at 7:48 pm

#208 westernman

who is talking about Southern Ontario ? I can tell from your reactionary,bigoted, uninformed, uneducated rantings, that you belong in Kelowna ! climb out of your soulless worm cage and join your brethren. you will run and jump in the Okanagan sunshine like a lamb in the spring………this is your destiny westernman…….!

#217 Snowboid on 11.23.11 at 8:14 pm

#190 Timing is Everything on 11.23.11 at 5:06 pm…

Nope, a loaded entry level luxury sports sedan. One that honours the warranty both sides of the border and doesn’t charge for the recall letter RIV needs.

#218 Westernman on 11.23.11 at 9:09 pm

Form Man,
So I guessed the location wrong, big deal.
But I can tell by your increasingly shrill responses that I got everything else right,lol.

#219 Westernman on 11.23.11 at 9:20 pm

Form man,
So I guessed the location wrong…big deal.
But I can safely sumise that by the increasingly shrill and angry responses from you I got everything else right and that you are finding that truth less than flattering.
This pleases me.

#220 Daisy Mae on 11.23.11 at 9:36 pm

BOBBY: “Reminds me of a colleague who supposedly saved a bundle on a car purchase in the US. When you added up all the add on costs, the savings were much less. Not worth the time or effort.”


Or the people who drive across the border to gas up — burning a tank to get there? But I suppose it’s a days outing….

#221 Daisy Mae on 11.23.11 at 9:46 pm

BOTTOMS UP: “My daycare bill (for 1 child in Ottawa) is $1300/mo, which is identical to my mortgage payment….add in a concurrent 2nd daycare bill, and you’re looking at living in the poor house.”


So your wife is working to pay the daycare costs?

#222 The thing in the basement on 11.23.11 at 9:55 pm

74 Diharv – Aldergrove is an island inside protected ALR areas.


#223 disciple on 11.23.11 at 10:26 pm

Western man has pleased himself.

#224 Snowboid on 11.24.11 at 3:41 pm

#190 Timing is Everything on 11.23.11 at 5:06 pm…

BTW, Honda doesn’t honour a US warranty…

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