Pay attention. There’ll be a test later.

What does the average family in Toronto earn in a year? $96,040.

How much does the average home cost in the GTA? $481,548.

What portion of pre-tax household income is needed to own a house in Toronto? 52.1%

And what’s that called? ‘Affordable.’ Actually, this exactly how Royal Bank economist Craig Wright puts it in RBC’s latest study: “Housing affordability levels are quite good… and will pose little threat to overall housing demand.” In fact, adds the bank, even though house prices went up, jobs went down and household income atrophied in the last few months, owning a home in this desperate country just got ‘slightly more affordable.’

What does this mean? Are houses really getting easier to own? (If so, time for this pathetic blog to get bombed and go for a long, final Harley ride in the snow.)

First, here’s the way the bank determined this affordablility thing:

Our standard RBC Housing Affordability Measure captures the proportion of median pre-tax household income required to service the cost of a mortgage on an existing housing unit at going market prices, including principal and interest, property taxes and utilities; the modified measureused here includes the cost of servicing a mortgage, but excludes property taxes and utilities due to data constraint in the smaller CMAs. This measure is based on a 25% down payment, a 25-year mortgage loan at a five-year fixed rate and is estimated on a quarterly basis. The higher the measure, the more difficult it is to afford a house.

But wait. The average downpayment in Canada these days ain’t 25% – it’s actually one third that amount. So the average mortgage for a new buyer is more like 93% of a property’s value, not the 75% used here. And because of the higher assumed downpayment, the bank’s numbers do not include the cost of mortgage insurance, which almost all buyers add to the principal (and end up paying it three times over). Mitigating that a little is the use of a 25-year amortization, because nine out of 10 new mortgages today are lifers – the full thirty – which brings the monthly down a tad.

In any case, after paying tax on an income of $96,040, the average Toronto family would have $70,708 left. But wait, the RBC study calculated the cost of owning a house in pre-tax dollars. So, 52.1% of that is $50,036. And when we suck that amount from the money the family actually bring in, the difference is $20,672. This is $1,722 a month.

From this we need to deduct house and car insurance (I’ll estimate $3,000 total over a year), car payments and gas ($9,600) and food for a family of three ($6,000). That leaves $39 a week for clothing, medical expenses, vacations, entertainment, cable and net, Timmy’s and RBC bank service charges. And I forgot booze, stimulants and leopard print panties, which are obviously necessary in such a situation.

This is affordable? And let’s remember the study takes place in a Beaver Cleaver world where everyone has $100,000 to plop down on a home, where property taxes don’t go up (unlike Toronto), furnaces don’t croak, kids don’t covet Xboxes, dogs don’t need vets, nobody takes trips, mom knits your underwear and makes a great pine needle casserole, and you have absolutely no future need for savings, investments, retirement plans or a TFSA.

This, of course, describes the actual existence of the average RBC economist. You can spot them on Bay Street, walking funny.

In short, the bank should be ashamed of itself for publishing such crap. The media which ran the ‘Houses more affordable, study says’ headlines should be even more ashamed. We can excuse (sort of) RBC for wanting to keep its mortgage business robust, but not the reporters, paid to be our filters. Every young couple encouraged to buy into this – one of the most dangerous housing markets of a generation – by the bank’s words is being deceived, misled and failed. I expect more from the guys in the gold tower.

Finally, for comic relief, the same economists say it takes 90.6% of the average pre-tax income in Vancouver to carry a house.  That’s $75,315 a year. Sadly, the after-tax income of Van families is (on average) is $64,162. Add in food, a kid and a car and that household’s under water by $29,753. This is why BC has a negative savings rate and why Vancouver’s doomed.

Average Van house: $622,955

Average Van income: $83,130

RBC: Priceless.


#1 Dylan on 11.28.11 at 10:47 pm

Looking at real estate listings in Edmonton I’m seeing alot of foreclosures. Looks like it can only get worse.

#2 Jamaican_Gal on 11.28.11 at 10:47 pm

Pant, wheeze, FIRST…

#3 anon on 11.28.11 at 10:47 pm

so first it hirts

#4 East Van on 11.28.11 at 10:50 pm

Please include recipe for “Mom’s Pine Needle Casserole” in the next blog entry.

#5 DML on 11.28.11 at 10:55 pm

60 Minutes follow-up piece on U.S. homeless families.


#6 Timing is Everything on 11.28.11 at 11:00 pm

Shame on you MSM and RBC. Honestly, shame on you!

#7 First Place on 11.28.11 at 11:01 pm


#8 WI BOOMER on 11.28.11 at 11:02 pm

AND…most Idiots trust their Bankers, Lawyers, Doctors, Clergymen, and Bartenders.

Well, 1 out of 5 ain’t BAD???

#9 dd on 11.28.11 at 11:06 pm

And this is only real estate news. When you investigature further you will find much of the financial media is written with the same paint bush. Just look at euroland. No contagion was predicted last year. Well this is not the case now!

#10 BPOE on 11.28.11 at 11:06 pm

Canadian Banks are bulletproof institutions who navigated us through the worst Recession in a long long time. Our banks are the envy and the world and if they say housing is affordable then you better believe it. Vancouverites can afford their homes. You don’t ever see articles or hear people talking about how they can’t afford their homes. The banks are currently unleashing a flurry of low interest rate cheques, 0% yes 0% balance transfers for 1 year at some institutions. Money is flowing folks. You can’t afford to rent in this market

#11 squidly77 on 11.28.11 at 11:06 pm

Desperate times result in desperate ?
Royal Bank is sinking

#12 Shame on RBC for propaganda? on 11.28.11 at 11:07 pm

RBC seems to be nothing but paid liars who have inflated the bubble using taxpayers money. This is a crime IMO but in Canada criminals are honest people. Was looking at buying a home in the T.O and the numbers don’t make sense and I have $100K saved ( what a waste of working and saving). People/sellers are delusional increasing their asking price by $100K per year even though their home couldn’t sell last year for $100K less. The CON/bankers have ruined Canada and Canadians futures for short term gain. Where are the media reporters? Oh ya they are paid shills. Canada is an open mad house. I have to put my life on hold thanks to those who have no intention of paying off a loan and borrowing money they will never and can never pay back. I am depressed now, as I should of borrowed and borrowed like a crazy gambler instead of working and saving and living within my means. Thanks CONs and banker criminals for inflating a bubble and now trying to keep it from crashing back to reality. The crash can not be stopped but the question is how long? If the free markets and democracy were allow in Canada (no CHMC) the banks would stop loans the second CHMC was gone. The bankers , realtors and CONs all know it and fear the free markets and democracy which they all claim to protect and honor. May those who caused the bubble suffer from bad karma and pay for their sins.

#13 joe on 11.28.11 at 11:10 pm

first ?

#14 Axel on 11.28.11 at 11:10 pm

This website is awesome. As a new immigrant, I learned in 2 nights reading everything here more about the RE market in Canada than in 1.5years reading “official” news. Thanks!

#15 Al on 11.28.11 at 11:11 pm

Heard two realtors in the elevator today here in Calgary. They discussed how new condo projects like the London are on hold, simply because demand is not there at the price point expected. Also many listings are not being made as sellers wont list at a realistic price.
This is with oil at a high price. Still the boomers at work talk about real estate like its a religion, they get insulted if I say “its over, things can and have changed.”

#16 BPOE on 11.28.11 at 11:12 pm

More desperation from VREAA. This site is absolutely hilarious with stories like “I hear” or My Neighbour heard etcetcetc. They even post that Vancouver Houses will be snapped up but folks folks the sky is falling some places won’t. All owners should read this site for it reinforces how RIGHT the owners have been all along. Check out these comments from the current site absolutely hilarious and don’t have a leg to stand on. Oh have you heard the “trend is not sustainable” same story carted out for the past 5 plus years.
I work in the financial industry and I know of several clients who have approached us recently about the possibility of going bankrupt. They have made some bad financial decisions over the past 5 years, a lot of it to do with risky real estate investments.”
Posted on 28 November 2011 | 1 Comment
“Although Vancouver’s real estate market has been on steroids for years, I do think this boom coming to an end. The rest of BC is not faring so well, prices and sales are down a lot in many areas outside of Vancouver. I work in the financial industry and I know of several clients who have approached us recently about the possibility of going bankrupt. They have made some bad financial decisions over the past 5 years, a lot of it to do with risky real estate investments (and also some just have too much consumer debt, lines of credit etc). Sure, Chinese might come to Vancouver and buy overpriced single family houses, but this is not representative of the entire market. I live in a decent, newer condo building and many units have been sitting unsold for months. Oh and the rent we pay? It’s half the monthly cost of a mortgage payment with 10% down, 30 year mortgage (and yes, in Canada, you only lock in your mortgage rate for 5 years, and no, the mortgage interest is not tax deductible). No wonder those units are not selling. I think 2012 and 2013 will see price declines and more bankruptcies in Canada. Household debt is at an all-time high. This trend is not sustainable.”
– comment from Sally Smith at Global Economic Analysis 20 Nov 2011

#17 GranolaBar on 11.28.11 at 11:16 pm

I have read your blog casually for a year or so but, more recently, it has become a daily habit.

I rent in Toronto, am a professional but in the public sector so don’t make the big bucks. Have wanted to buy for years, not as an investment, but because I’ve had a few crappy renting experiences and want QUIET and my own hovel where I can plant perennials. But I know quiet can’t be guaranteed even if one owns. Anyway, buying is not gonna happen in my lifetime in this city.

I’m a hippie girl who believes in love and (mostly) does not covet material goods. And yet…

I love your blog. I take your advice very seriously. And you are hilarious to boot, although my mother thinks you’re just crude (mothers!)

What I’m trying to say is – do you think we could go out on a date? I’m sure my husband wouldn’t mind.

Bring him along. He can pay. — Garth

#18 sam.i.am on 11.28.11 at 11:16 pm

Fill your application out you will pass without a doubt.

#19 Phil & T on 11.28.11 at 11:17 pm

Something nice for the “Doom and Gloom” brigade to salivate over:


Time to replace the tinfoil hats with lead-lined undies methinks!

#20 LakeLass on 11.28.11 at 11:18 pm

Love your blog, but I do have a quibble with one of your stats today.

A May 11 CBC article indicates that the average downpayment is 30%.

Not new buyers. The bulk of new mortgages are for deals with 5% down and 30-year amortizations. Ask any mortgage broker. This is also interesting. — Garth

#21 Dan in Victoria on 11.28.11 at 11:18 pm

“This of course describes the actual existence of the average RBC economist.
You can spot them on Bay St. walking funny.”

This is what you look for….


#22 Nostradamus Le Mad Vlad on 11.28.11 at 11:23 pm

The lead para. reminds me of Build Me Up, Buttercup because that’s all the talking heads / spin doctors are doing, trying to keep the bubble inflated.

“This is affordable? Yes, it isn’t in Ward Cleaver’s world where everyone has $100,000 to plop down on a home . . .” — What of June Cleaver? Surely she is allowed to have input as well.

TPTB see some room where they can catch eager young bucks before pulling the rug from under them. If we comprehend what is happening in the EU and apply it to NAmerica, that gives us a more level-headed, realistic view.
Two guys, one old, one young, are pushing their carts around Walmart when they collide.

The old guy says to the young guy,

“Sorry about that. I’m looking for my wife, and I guess I wasn’t paying attention to where I was going.”

The young guy says, “That’s OK, it’s a coincidence.

“I’m looking for my wife, too . . . I can’t find her and I’m getting a little desperate.”

The old man says, “Well, maybe I can help you find her . . . what does she look like?”

The young ‘un says, “Well, she is 27 yrs. old, tall with red hair, blue eyes, buxom, wearing no bra, long legs, and is wearing short shorts.

“What does your wife look like?”

“Doesn’t matter, let’s look for yours.”
1:45 clip The Lost Generation. A palindrome reads the same forwards and backwards, except the emphasis is different; Ah yes, the UK is in fine shape; Fitch keeps US credit rating at AAA; Citigroup Sweetheart deal nixed; 1:38 clip Walmart spike because of hungry families on foodstamps; Venezuela Heading to a gold-backed currency? Central Banks and managed perception; Govt. propaganda “This is more “blame the people” propaganda! The demands of consumers are being met with products manufactured overseas to allow the corporations higher profits.” wrh.com; Investors Either Chinese or Monsanto.Link in Brit. ex-pats are boiling in Greece, and not only because of the heat.
For Cat Lovers Short clip of a cat comforting its young; Condemnation by Syria; Solyndra Dirty politics working both sides of loan; Something Stinks Who do our politicos really support? Depop. Enforcing vaccinations, whether they are needed or not; 10:38 clip NGOs behind the war on Libya, now Syria; Pakistan closes doors to NATO permanently; USAF New and different approach to recruiting; Fermented Foods seems to have good properties.

#23 BC Bring Cash on 11.28.11 at 11:27 pm

Money out of thin air. That is how our current system of finance works. Lenders create money out of nothing. Contributing no work what so ever to come up with mortgages and loans for the rest of us to pay off with real work, blood sweat and tears. Check out the Mandrake Mechanism.

Chartered banks do not create money. — Garth

#24 Not 1st on 11.28.11 at 11:28 pm

$6,000 a year for food?? More like $10,000 including the odd trip to the food court.

#25 sam.i.am on 11.28.11 at 11:29 pm

Need help understanding the 50,000 per year (4200 pm) cost.

Assume 450k/25yrs/4% = 2400 per mo p&i
Taxes: 600 ?
Utilities: 400

Doesn’t add up to 4200, what am I missing?

#26 International Man on 11.28.11 at 11:31 pm

I always thought the “Occupy” movement in Canada didn’t really have any real, justifiable targets (e.g., no bank bailouts, comingled funds, tax payer funded Freddie/ Fannie and of course no Lloyd Blankfein).

I think this housing issue (and probably future bailout of CMHC) should be the sole focus of any Occupy type of movement in Canada.

#27 Numbers on 11.28.11 at 11:31 pm

If that income is divided among two income earners they have $1000 more cash flow – nothing to sneeze at.

Remove seniors and poor people from your numbers (average home purchaser family in TO is 70k+50k) and you’ve got even more.

While I agree with your main message, your numbers are a little…fudged.

#28 disciple on 11.28.11 at 11:34 pm

What’s a Beaver Cleaver? Just kidding… I remember the re-runs… faintly…

The smarter young Canadian families have already abandoned the house ownership dream and taken second jobs or sought additional income for the household after the 2007 Great Recession. By now, they should be saved up and invested some funds and are ready to weather the coming storm of debt deflation. But if you are one of those still not convinced that you have been deceived and that everything will be alright, you need to heed the gracious advice of this blog’s author and get that monkey of mortgage debt off your back and onto the non-believers who will justly deserve their fate.

This is yet another case where faith will save you, and non-belief will damn you. Self-fulfilling. Time is running out to get religion and make peace with God (so to speak). The fate of your children, of your parents, of the future of your country hangs in the balance.

Dorothy, you are fatally wrong, this ain’t Kansas, babe. But the rest of us need those Dorothy’s, those non-believers, as a sacrificial offering, to appease the bank gods. We will survive on the carcass of your unwavering desire for home ownership above all reason. Praise the Lord and pass the salt.

#29 Shame on RBC for propaganda? on 11.28.11 at 11:39 pm

The worst part is even at 3% it would be financially tight to make mortgage payments and other related housing costs thus leaving very little for anything else. Yes the housing market has slowed alot as nothing seems to be selling and a housing crash looks close at hand but the wait has been tough. Yes I could buy right now and if rates went up 2% I would be bankrupt. The banks have already said a 1 % increase in rates and Canadas housing bubble comes crashing down. How cam RBC lie and how can the media repeat that lie is very dishonest and I hope those who lied will pay.. if there is a higher good .

#30 InvestorsFriend (Shawn Allen) on 11.28.11 at 11:40 pm


In other breaking “news” the sun will rise tomorrow.

More important news: this is why it won’t stay average. — Garth

#31 Renters Revenge on 11.28.11 at 11:40 pm

I just took a look at CMHC – https://www03.cmhc-schl.gc.ca/catalog/productList.cfm?cat=70&lang=en&fr=1322537668718 – and found the following information. As of September, 2011.

Avg weekly earnings: $884
Avg Single Detached home price: $617,000

Avg weekly earnings: $861
Avg Single Detached home price: $1,133,510

Keep in mind these earnings are single earner, not household but even so, it seems that affordability is even worse than what RBC is saying it is. Yikes!

#32 from kits on 11.28.11 at 11:42 pm

but garth it’s different here in Vancouver, we have the asians and the mountains

recent party conversation came up with a great quote
“all that’s important is I can afford the payments.” referring to purchasing the following…


#33 Bottoms_Up on 11.28.11 at 11:42 pm

Oh fudge Garth, I think you (and trying to make my monthly nut) finally convinced me to sell and rent.

It also didn’t help that I learned something from your bloggers the other day that one basically CAN’T get kicked out of a leased space — i.e., a signed long-term tenant’s agreement is essentially as good as gold for the length of the agreement.

Also telling is that my household income (gross) [although only recently substantially increased] sits at over $140,000, but net is closer to $85,000, we live in an average townhouse in a good location in Ottawa (it’s worth less than the average Canadian home), and we can’t afford more than one car (and our current car is paid off!) without sacrificing something important such as RESP, RRSP and TFSA contributions……….there is something seriously wrong here….)

If you’re looking for the canary in the coal mine, or proof to where all this is heading, just think: “even Bottoms_Up can’t make the nut”.

#34 Ex-Cowtown on 11.28.11 at 11:44 pm

I could have been first…. I just chose to let others experience the glory as I’ve already had mine. It’s a Canadian thing…

Always remember three things about banks:

1. The don’t give a $hit about you.

2. They REALLY don’t give a $hit about you.

3. Because of #1 and #2, they churn out great dividends and will continue to do so.

#35 timmy on 11.28.11 at 11:44 pm

You can’t cite average family in Vancouver, they don’t own houses. It’s mainly the weathy Asians and the drug dealers who own the houses

#36 Renters Revenge on 11.28.11 at 11:47 pm

#26 International Man
I’m with you. When people finally understood just how huge the preemptive bailout of Canadian banks via CMHC is, 99% of Canada will be tenting down at city hall. Occupy in Canada is just a bit ahead of it’s time.

#37 Bottoms_Up on 11.28.11 at 11:48 pm

#24 Not 1st on 11.28.11 at 11:28 pm
Agreed. $6000 would be coupon clipping to the extreme, never going out or ordering in, never buying lunch at work etc. My family of 3 is probably around $10,000, and that is not extravagant by any means.

#38 Smoking Man on 11.28.11 at 11:54 pm

The Herd

Any one catch House tonight….

Subliminal message just like many prime time shows…..

For you un enlightened here is my take, Theme: Sick Guy sort of loses his mind, has a cash of weapons worried about all hell braking lose, Turns out the guys problem when house magically figures it out was too much Alex Jones he did not take his vaccine which caused his problem, branded him as nut job in the viewers brain.

Now if you watch these shows you will see the same recurring team, conspiracy theorist bad, un questioning obedience good…..

That’s why I mike Zillions and you tax farm slaves struggle to make ends meet..

I have an advantage, learning disability hence Not a fish………

Now do you really think you bubble heads have a chance against this machine.

Buy real estate, run with the herd. The herd is dumb………

#39 Allan on 11.28.11 at 11:54 pm

Hey Garth,

I have been reading your blogs for a while now, but didn’t feel the need to post. Your math this time is so dead on that I couldn’t stop laughing at the $39 / week for panties. I guess you are into humor too …. LOL !

#40 Smoking Man on 11.29.11 at 12:01 am

#17 GranolaBar on 11.28.11 at 11:16 pm

Come to the dark side….Hello Smoking Man here.

#41 Leopard Man on 11.29.11 at 12:05 am


Would you mind if I join? I have attached a pic of myself. http://s3.thisnext.com/media/250×250/F57255E7.jpg

It would be too obscene if I was wearing leopard panties. Actually, this is the Greater Fool lowly blog? I take that back.

Garth – How can you write so well? Serious

#42 InvestorsFriend (Shawn Allen) on 11.29.11 at 12:06 am


Lowest income earners don’t buy houses

Middle income earners buy cheaper houses

Higher Income earners buy expensive houses

Nothing in this picture suggests that average income earner should be able to afford average house.

All my life I heard that we needed affordable housing.

When houses were $100k (edmonton circa 1989) they were said not to be affordable.

They are never affordable enough for the poor and lower income.

It sucks to be poor or below average in any way. Sadly on any measure 50% of people are below average. It’s the tyranny of math.

#43 Van guy smokin now on 11.29.11 at 12:08 am

There is quite a few drug dealers and big time criminals in Van. God knows how much they make. All tax free too. So, they have a much easier time competing in this market. I don’t see anyone complaining about them as a factor in this crazy market.

#44 Rex on 11.29.11 at 12:17 am

Garth’s response to BC Bring Cash
“Chartered banks do not create money”

Who does create money?

#45 Soylent Green is People on 11.29.11 at 12:18 am


This is one of the most profound moments of musical protest ever recorded.

Paul Simon had been told to play “Bridge Over Troubled Waters” at the Ground Zero tenth anniversary event. Without telling anybody what was coming, he played a 9/11 truth protest song instead.

The “people talking without listening” didn’t get it. The awakened people did.



#46 Soylent Green is People on 11.29.11 at 12:19 am

Paul Martin: “I have been in Aboriginal communities in northern Canada that are far worse than anything I’ve seen in Africa.

While we have a responsibility to the world, we also have a great responsibility at home.”



#47 Debtfree on 11.29.11 at 12:22 am

This adds a new wrinkle to the boomer housing problem.

#48 Ulsterman on 11.29.11 at 12:26 am

Jesus Garth, stop being such a Debbie Downer! By your figures it only takes the average Vancouver family 117% of their after-tax income to service their average mortgage.

In my day, we had to walk…

#49 Lawn Asian on 11.29.11 at 12:28 am

On a recent visit to discuss RRSP. mortgages with our banker we decided to ask casually about the stats Garth always talks about. We asked whether it was true that most people only put down 5%.

Our banker laughed and said that was ridiculous – the average down payment at their branch (downtown Vancouver TD) is 8%.


#50 westcanguy on 11.29.11 at 12:32 am

Agreed. $6000 would be coupon clipping to the extreme, never going out or ordering in, never buying lunch at work etc. My family of 3 is probably around $10,000, and that is not extravagant by any means.

A family of 3 spends almost 200.00 a week on groceries??
Push away from the table people. I can not fathom going through that much food every week.

#51 RM in Oakville on 11.29.11 at 12:36 am

40th!!! I’m so happy.

#52 Rob on 11.29.11 at 12:41 am

Meh… the issue isn’t that the average family incone is $96k/year nor that the avg house costs $480k. Fact is that at those earnings and for what you get in Toronto or area would be pathetic and unappreciated. No… you rent. Make more that $150k as a couple (All the two professional income households with nannies taking their kids I know wouldn’t dream of making less) and maybe you’ll buy in the city. Elsewise, well, hit the road. I hear Guelph is cheap and they got a train now!

#53 Good to be out on 11.29.11 at 12:42 am

So to complete the math and round out the picture, in Vancouver it takes $11,153 more than the average after tax income of $64,162 (using Garth’s numbers) just to carry a home. That means an average person in Vancouver must spend their entire after tax income, plus borrow another $11,153 just to carry their house. Not unreasonably they must also borrow another $20,000 or (likely) more per year to cover all their day to day living expenses such as food, clothing, transportation, etc. That means your house has to appreciate at least 30k per year just to break even on paper.

If anybody is lunatic enough to walk into a scenario like this with their eyes open they better have a good back up plan, like a working spouse, because without one even a 2 or 3 year flat market (never mind a significant market correction), will have you sweating bullets over the growing year over year paper losses.

Doomed is right!

#54 Tony on 11.29.11 at 12:45 am

Garth, great posting. I do not understand how these people live.

#55 the Phantom on 11.29.11 at 12:47 am

Hey Garth and fellow bloggers (and as always, lurkers everywhere)…

I’ve said it here at least once before Garth, the old phrase that “figures never lie BUT liars use figures (addition of upper case letters this time was mine by the way). That this dribble would be spewed from a mendacious Leviathan like RBC, shouldn’t really come as a surprise to anyone. I also wonder about the impartiality of the media as well. I’d be curious to know how many stories that tell the real truth are buried and quashed simply for that fact…

(hell and I’m not even much of a conspiracy theorist apart from the fact that I feel the Occupy Movement has a hidden agenda to end corporate greed AND possibly pass marijuana legalization legislation before the winter winds destroy those few tents that haven’t already been dismantled and taken away by the police who enfore the well-meaning politician’s desires to protect the public from these anarchists…have I said too much???)

In closing this story hearkens me back to the old RBC commercial way back in the early ’90’s when we were getting a great deal on mortgages that were 10 1/2% for three years…

I think it went something like”f*&k you, f&%k you at the Royal Bank we say f$%k you”…(or was that “can do, can do”…ah well, actions always speak louder than words don’t they??? Rock on Garth; have a grand evening and keep it flowing because these lonely voices in the wilderness (political and/or geographical) are always appreciated.

the Phantom

#56 the Phantom on 11.29.11 at 12:58 am

Smoking Man #37

Do you really see yourself as having a disability? Could it not be referred to as an exceptionality? I knew some folk that are deaf and they railed at the fact that their deafness was a disability.

Some of the more astute people around are seen as quirky; eccentric even. Those who are assembled a little differently than those in the majority often surprise us with the novel and intriguing lenses through which they view the world!!!

When you are lucid, you almost always make some rather cogent arguements that are worthy of further thought. Although many may not agree with some of your points, I don’t think that many would argue with the fact that more than a little thought and consideration goes into your posts when you’re sober…just my two cents worth…

Night all
the Phantom

#57 Junius on 11.29.11 at 12:58 am

#10 BPOE,

You said, “Canadian Banks are bulletproof institutions who navigated us through the worst Recession in a long long time. Our banks are the envy and the world and if they say housing is affordable then you better believe it.”

Bullcrap. Canadian banks are properly regulated which is why they didn’t get in as much trouble. They were saved from themselves. However look at how much their US divisions lost. Enough said.

#58 LJ on 11.29.11 at 1:03 am

Garth: Didn’t RBC state that their metric “excludes property taxes and utilities due to data constraint…”

Which would mean that the $20,000 left over after taxes would also have to be used for these expenses. Or, did I miss something?

#59 Blobby on 11.29.11 at 1:05 am

They ALWAYS list “low interest rates” as a part of the reason for housing being “affordable”.

But then seem to ignore the rather obvious fact that you’re buying a house for 25 years, not 5…

#60 Crash Callaway on 11.29.11 at 1:10 am

Garth the problem is that this pathetic blog is fighting magic.
Ottawa, banks and the Real Estate mafia have a magic noose while all we have is a handsome Harley rider spreading truth throughout the land.
This magical noose has the ability to stretch and stretch until every Canadian neck is in it while the Harley only gets 100 miles to the gallon.
On the upside… It’s going to be one heck of a neck tie party when the trap door gives way.

#61 grantmi on 11.29.11 at 1:20 am

#2 Jamaican_Gal on 11.28.11 at 10:47 pm

Pant, wheeze, FIRST…


#3 anon on 11.28.11 at 10:47 pm

so first it hirts

IDIOT #2!!!!!!!!!

#7 First Place on 11.28.11 at 11:01 pm



#13 joe on 11.28.11 at 11:10 pm

first ?

Real F_CKING idiot #4

#62 Painted Toenails on 11.29.11 at 1:27 am

Friend of mine took her condo off the market today. 9 months, a few lookee-lou’s and zero offers. Her realtor (a nice woman) moaned that there is now 14 months worth of condo inventory in Victoria.

Yup. And it’s gonna get worse.

#63 Theresa on 11.29.11 at 1:29 am

This is a great post, I want to send it to everyone I know who is considering buying real estate.

#64 Salacious Crumb on 11.29.11 at 1:31 am

I, for one, actually like pine needle casseroles. And grass clipping stirfry is another good way to save a buck.

Don’t knock it till ya try it.

#65 Nostradamus Le Mad Vlad on 11.29.11 at 1:34 am

The CPC An easy-to-read, understandable message. Probably too difficult for you to comprehend; 5:33 clip Trying to make ends meet; Obumbler His supposed ‘concern’ is that if the EU collapses, then it will affect NAmerica severely, so Teeter-Totter; Catch a falling star; MF Global How convenient! Banxters taking it all? They can have it, ‘coz we’re only here for a short and good time!

Soros again, Ripping a Wild Ride; Eat, Drink and be Merry We all move on sometime! Escalating Dangers, Bargain Basement, Break up of monetary union.
Kissinger, eugenics and depop.; 1:38 clip Indonesia’s Golden Gate bridge collapses; Soros and Obama Together at last and Gingrich and Coulter Where is Billary? UK Military Being cut away piece by piece; Russia They are looking at blocking NATO’s supply routes; Newt Gingrich calls for dumping the Constitution and sovereignty (dubya said the Constitution was “. . . just a piece of goddamned paper”; The Fourth Reich What role did Hitler play?

Monsanto Being banned in more and more places; 3:26 clip Octopus walks on land; Backfiring NATO attacks, and this is the stuff which cannot be predicted, just as Russia is sending warships back to Syria; Because Pakistan has blocked NATO’s path, the CIA is increasing internal strife.

#66 LB on 11.29.11 at 1:55 am

Yet another reason why more are accessing the diversity of information on the internet, through blogs such as this, to weigh and disseminate it OURSELVES to discern the truth and make decisions, whether it be on politics, health care, the law,religion,finances,housing, etc. etc. etc.

In not blindly trusting in and following designated “experts” and “leaders” in these and other areas, we are becoming,out of necessity, Renaissance people.

This is all good, as it contributes to us ultimately becoming more eduated and truly democratic, in all aspects of society.

#67 The thing in the basement on 11.29.11 at 1:55 am

25 Sam – me too. I’m getting about $2100/mo on a 360k mortgage at 5.0% as per the average price and 25% DP
in the given example. $25k/yr. Throw in utilities, insurance, taxes, maybe $35k.

The 52% is a “given” at the start, but how is it
calculated? What does is comprise? And why are we
mixing an average house price for all buyers with the
average DP for only first timers? Also, is the average
income for all households? If so, it is almost certainly
affected by lower income earners who rent and retired
people who no longer have mortgages.

#68 Suede on 11.29.11 at 1:59 am

#37 Smoking Man

Funny I just read your post as House is on the tele in the background. Some guy is cheating with another man’s wife, further in the episode House goes on to say “Instead of building a bunker…he should have been getting vaccines for the stuff he’s scared of”

Subliminal messages put there by intelligent writers? Hardly. People can barely come together and be on the same page to run a business, country, or a 2 person household!

JD and coke = great vaccine.

#69 Xindai Shan on 11.29.11 at 1:59 am

Hi Garth,

This is a fine posting. The only thing that you didn’t mention is what your $481,548 will actually buy in Toronto. I really don’t know anything about the east side, but that amount of money might get you into a passable single house on the outskirts of Etobicoke. However, that house is going to need serious structural work, it will probably be on the flight path of Pearson, and in all probability, it will be in a neighbourhood that borders on a very sketchy and violent area with barely functioning schools.

I live in the northern tip of Richview Gardens, where the odd sf house is still listed around 500K for a 1200 square foot 1950s bungalow. Houses are listed in the area for upwards of $800K and up to $1 million south of the Westway . My rental home is 1/2 km from Dixon Road, where I have bookmarked stories about 7 murders in less than 5 years and more published beatings and sexual assaults than I could keep up with. A woman was raped waiting at the bus stop, very close to my house.

To be fair, the sfh in the area is a world away from the unbelievable (and deplorable) poverty of Dixon/Kipling, but the mixing of the two worlds is very much a part of my children’s lives, and we will probably have to move to ensure their safety.

In any real sense, the average home price in Toronto does not come close to buying the Leave it to Beaver quality of life.

#70 UVZ on 11.29.11 at 2:06 am

Great post!

But the banks don’t worry: The CMHC is their hedge against risk.

#71 GTA Girl on 11.29.11 at 2:12 am

Garth’s talk of housing costs and after tax income is disturbing.

CD Howe Institute just released their findings into Municipal cities fiscal responsibility and budgets.

My city of Vaughan is ranked one of the bottom 46% over budget. Edmonton and London Ont. Shared the race to the bottom.


I sat in our city council budget meeting tonight and listened to our Honourable Mayor attack CD Howe, question their numbers and ask city staff to examine the report to find out where CD Howe got their numbers wrong. Ask the same city staff who screw up the budget to examine where a national institute went wrong.

Dear Citizens, with the noose around of necks of household debt, it may be time to fight city mismanagement, or be taxed for flagrant corruption, ineptitude or the vanity show put on by a puppet Mayor.

Either that, or move to a city that has an Auditor General, who has a exemplary fiscal management.

Markham, Ontario seems interesting..

#72 Mister Obvious on 11.29.11 at 2:21 am

#37 Smoking Man

I once thought you were just a typical misfit. But now you’re starting to scare me.

#73 MKultra on 11.29.11 at 2:22 am

Getting bombed and going for a ride on a Harley in the snow sounds like a good time to me! yeeehaaaaawww!!!

#74 Fort Mac Flatlander on 11.29.11 at 2:28 am

#33 Ex-Cowtown
3. Because of #1 and #2, they churn out great dividends and will continue to do so.

Just wait and see what happens to those dividends, when CMHC can’t bankroll the forclosures.

#75 Hoof-Hearted on 11.29.11 at 2:29 am

HULK angry.

HULK want house

HULK spank Bankers.

…err Not spank Bankers…really make them suffer !

#76 Humpty Dumpty on 11.29.11 at 2:39 am

Why do you even bother with Pathetic Canadian content…

Mel Hurtig spells it out very slowly and clearly…


Vancouver may be doomed G, but skiing was priceless tonight….

#77 Michelle on 11.29.11 at 2:55 am

@#4 East Van-

“Please include recipe for “Mom’s Pine Needle Casserole” in the next blog entry.”

Hey Van. Keep in mind that the pine needles aren’t edible and are only for decorative garnish. It’s the inner part of the bark that goes into the casserole, probably along with a lot of bear lard or beaver fat and dried berries.

(I can’t believe I know this stuff …
Man, I had a weird childhood!)

#78 DonDWest on 11.29.11 at 2:56 am

It’s going to take more than $39 panties to wash away the pain in sexual bliss!

#79 Waterloo Resident on 11.29.11 at 3:00 am

Don’t worry Garth, that $400,000 house will soon be listed for $4Million, and it will sell for $12Million !

Everyone in Canada is spending like they just won the $20 Million dollar lottery, so don’t worry, let the good times roll !!!

#80 Waterloo Resident on 11.29.11 at 3:05 am

My goal is to try to live life as cheap as possible, to spend as little as possible while having the BEST LIFE possible.

If I rent a house then my monthly payments are about 65% of what they would be if I was to buy a similar house in this market. If a house was just as cheap or cheaper, then I would buy a house and then when it comes time to move after the market has crashed and there are no buyers to be found anywhere, I would simply declare personal bankruptcy and move on with my life DEBT-FREE.
But what’s the point of buying a house and then paying WAY MORE on monthly payments then i would if I was renting a similarly sized house? It just doesn’t make any sense, so that is why I rent.

#81 gtrz4peace on 11.29.11 at 3:09 am

Divesting from excessive mortgage debt is a no-brainer. In that sense, liquidity is the new black, so to speak.

But some of us still prefer to own, especially those with “special needs” – ie, the need for a quality home studio for recording work, large companion animals, chemical sensitivities to too much particle-board outgassing or carpet, etc.

These things are more easily handled in a house you own. But it is important that home ownership is NOT your retirement fund. A lesson we have learned the hard way, hence our appreciation for Garth’s sound financial advice.

#82 Vancouver_Bear on 11.29.11 at 3:26 am

#16BPOE on 11.28.11 at 11:12 pm

What did you want to say by this? Think again….dope is dangerous to your undeveloped brain.

#83 BC Boy on 11.29.11 at 3:59 am

we’re screwed folks….

#84 Aussiehouseprices on 11.29.11 at 6:34 am

Haha, nice one! And speaking of honesty in real estate, here’s a short post you might enjoy.

#85 Longterm on 11.29.11 at 6:35 am


I read Money Road recently and want to add some bonds to my portfolio. You don’t cover bond ETFs in the book, rather advocate direct purchase of bonds. are there reasons to avoid bond ETFs versus direct purchase of bonds? They seem flexible with lots of government and corporate investment grade options and easy to purchase in smaller lots. Any guidance, or if you can point me to some reading material on the issue would be appreciated.


#86 I'm stupid on 11.29.11 at 7:08 am

I hate the use of averages for home affordability. The reason why is that it paints a far better picture than the real truth. Here is why:

1. Average age of Canadian population. The largest portion of population are boomers. Majority of wealth is concentrated in this group.
2. The max number is infinite while the minimum number can only be zero
3. Deduct all the homes that are designed for single people. The 400-500sq foot condos.

Even with all these variables thrown into the mix to make affordability seem better the numbers still don’t add up. You must ask yourself how bad it really is at the bottom 20-30%. They are the ones that create the bust just as they created the boom.

#87 Marc L on 11.29.11 at 7:10 am

Ummm, great pine needle casserole.
Garth, can you please post your recipe?
Yeah baby!

#88 I'm stupid on 11.29.11 at 7:11 am

Just to add to the point I just made the total Canadian mortgage debt is somewhere around 1 trillion. If we devide that number by the number of Canadians it’s not that bad. The truth is that infants don’t have mortgages, nor do the majority of boomers. What remains is a bad situation.

#89 David B on 11.29.11 at 7:40 am

And your point is?

BTW did you here of the young couple working at our local coffee shop who move in that new house down the street?

#90 househornyhousewife on 11.29.11 at 7:47 am


Excellent post today. I went and looked at what RBC said and indeed, this is such hogwash it’s amazing those jerkoffs can sleep at night.

However, to us consumers, this should be a signal for what is really happening in the market. Do you blame RBC for trying to pump the market with lies in order to boost demand and sales ? Of course not.

Consumers beware of ANY AND ALL commercial enterprises because they all have one agenda and one alone … increasing profits. Just like the Nutella commercial tells consumers to give their product to their kids because it contains hazelnuts, milk and cocoa and is therefore healthy (sugar? oh yeah, they forgot about that main ingredient), RBC will look at the glass as half full as opposed to half (or two thirds) empty.

I trained as an accountant and know damned well how one can manipulate numbers to say whatever you damned well please. Indeed this RBC report DOES tell us something .. if one is willing to read between the lines.

As for the media being filters for consumers … you almost made me cough up my coffee this morning. Since when have they ever operated with any brand of ethics whatsoever ? They are no better than the communist propaganda machines that operated during the cold war (although they do have fancier equipment such as doppler radar and i-phones).

You just keep doing what you’re doing, Garth. Don’t fire up that motorcycle just yet.



#91 Aussie Roy on 11.29.11 at 7:51 am

Aussie Update

So, the MYEFO delivers a $20 billion black hole that is filled by fiscal cuts by govt over the next four years. I’m going to leave a detailed analysis of this beast to Delusional Economics tonight. Right now I’m just going to take a few moments to run through the assumptions behind the updated forecasts to give you an idea of why Treasury keeps getting these numbers so embarrassingly wrong. At the macro data level it’s pretty simple : Treasury appears to be packed with pathological optimists. Here are the MYEFO assumptions.


Cuts to the public service and smaller tax breaks for executives will be crucial for the Gillard government’s efforts to deliver a budget surplus next financial year as a global economic slowdown batters expected revenues


Mr Murray said that Australia was vulnerable if interest rates rose around the world, which in turn would prompt commodity prices to fall and leave the country exposed with high house prices.

A fall in commodity prices would cut the income flowing into Australia, reducing the pay of many, and make it more difficult for people to service home loans.


HIGH-RISK homebuyers and lenders are facing the prospect of negative equity in their homes after recent property price falls around the country.
The slump in home values has raised concerns that some existing loans are now higher than the property’s value.
Financial research company Canstar says there are now more than 90 loan products that allow people to borrow 95 per cent or more of a property’s purchase price.



It’s been a rocky month for China’s real estate industry. In the first week of November, brokerages in the southern metropolis of Shenzhen have seen a 60% year on year drop in sales volume, while average home prices in Shanghai dropped to a 6 month low. Beijing, the nation’s capital, fared little better with average per-square-meter home prices falling 9.8% week on week during the last week of November.


#92 Steven Rowlandson on 11.29.11 at 7:58 am

With real estate so high and wages so low we have a situation where the working man is in this situation.
Employers pretend to pay us. ( $10 to $20 an hour for skilled and unskilled labor)
And we pretend to live in Canada.
Sounds like something a worker in the soviet union might have said a while back doesn’t it?

#93 Bottoms_Up on 11.29.11 at 8:49 am

#49 westcanguy on 11.29.11 at 12:32 am
$200/wk on food includes a couple of lunches bought at work ($25) and one order-in pizza dinner ($30).

So really what we’re left with for groceries is $145/wk.

#94 Shane on 11.29.11 at 8:52 am

Garth, This is why i’m a big fan.. you put things in propestive, you speak the truth we need more people like you in this world… is there anything the public can do to stop the lies on false advertising??


#95 Herb on 11.29.11 at 8:54 am

But don’t forget to blame the victims! After all, they don’t have to believe the lies, damn lies and statistics rained on them by government(s), media, and enterprise.

#96 House on 11.29.11 at 8:57 am

Banks sell mortgages, The Media sell advertising. It’s that simple. And the poor slobs have just about no where to get any good advice especially when the government which should be an arbitor is just covering it’s ass because of it’s mistakes. So why keep blaming the slobs.

#97 Herb on 11.29.11 at 8:59 am

Er, Granola Bar, our Garth is a little busy, but I’d be willing to help him out here. You can save your family finances and leave your husband home. My wife wont mind either. She wouldn’t even know about it.

#98 Ward Cleaver on 11.29.11 at 9:01 am

“This is affordable? And let’s remember the study takes place in a Beaver Cleaver world where everyone has $100,000 to plop down.”

Hey Garth, nice of you to reference my son Theodore, aka, “The Beaver”. June says hello and Eddy Haskel says he can’t get enough of your blog.

#99 Mister Sanity on 11.29.11 at 9:05 am

#41 Investors Friend

It sucks to be poor or below average in any way. Sadly on any measure 50% of people are below average. It’s the tyranny of math.
I think you mean 50% are below *median*. Due to the 1% (or, more accurately the 0.01%) at the very top skewing the averages, you’ll find a lot more than 50% of people below the average.

#68 Xindai

Agree with what you’re saying. Toronto is NOT just downtown, and similar to my comment above, the multi-million dollar properties are skewing the average. Take out the top 5% of properties and compare averages then. We get averages that include ridiculous $10million+ penthouse suites bought by foreigners (Ritz Carlton, etc.) and then are surprised the averages look high. Let’s take those out of the equation.

STATS: I did a quick MLS lookup. In the Scarborough end of town, there are almost 200 detached homes under $400,000, and about 20 of those are under $300,000. Sure, these aren’t ‘upscale’ neighbourhoods, but that notion is a recent one – in the past there wasn’t as much value put on having neighbours that decked out their driveways in interlock. There’s plenty of value to be had – the MSM just likes to report uninformed numbers like ‘averages’. Funniest one is reporting a Canada-wide average – that’s a useless statistic. Real estate is a localized industry. Sure – if the whole country’s overvalued or suffers the same economic shock, we’ll all suffer. But you can’t paint the whole country in a single color and more than you can paint a province, region, or city. Local markets exist, and anyone who denies that doesn’t know their toes from their fingers.

Secondly, much of Toronto (I’d say a third) is not for anyone but high income individuals/couples, again skewing the averages. Anything south of Bloor or between Bathurst and Vic Park is not what you would consider an ‘average’ middle-class area. In the past, perhaps. Today – no way. It’s higher incomes that buy here, or those who have been in these areas for a while and bought when it was cheaper.

#100 Mr. Lee on 11.29.11 at 9:10 am

#95 brings the point home.

This is why media (presstitutes) are being listened to less and less according to various tracking agencies. Like drug dealers, banksters, need their money junkies to keep on borrowing. Keep the train going until in the end it derails. Then……..you guessed it …….bail out and austerity.

Same story, same cast, same mistakes.

#101 Ammo & Viagra on 11.29.11 at 9:10 am

Great post, Garth baby
btw, my great grannie made the best pine needle casserole

#102 Mr Buyer on 11.29.11 at 9:11 am

I was looking at a 45 acre chunk of land for over a year now. I sent an email to the broker last year saying I would go 150k of the 250k they were asking. I did not hear anything from the broker. This year I sent an email offering 100k of the 250k still be sought. I got an email back saying the land was priced as land around it has sold. I replied that things have ballooned over the past ten years but that is all over now. I went on to say that even at this price I expect to loose cash if I try to sell anytime in the next decade. The Realtor let me know that she will talk it over with the sellers. Things have already changed a great deal.

#103 Mr Buyer on 11.29.11 at 9:13 am

still be sought should read still being sought. POOP

#104 Mr. Lahey on 11.29.11 at 9:13 am

Since our gracious host, Sir Garth Turner has gone silent on our requests for invitations to his bunker for the annual Christmas party, I will extend an invitation to all blog dogs to come to Sunnyvale Trailer Park for Christmas festivities. Ricky and Cyrus have promised to keep the gun battles to a minimum, Randy will be wearing his elf outfit and Bubbles will be serenading everyone with Christmas tunes on his guitar. You are invited too Garth and will be given the stage for any Christmas message you want to deliver.

Sunnyvale is just outside Dartmouth Nova Scotia folks so get out your GPS and head on over.


#105 fancy_pants on 11.29.11 at 9:22 am

although economic fallout has not yet snowballed and unleashed it’s fury, it is already very clear this won’t end well in the RE niche.

Why doesn’t society stop and look around? If you read between the lines, you will notice cracks ~ even the media is having more and more difficulty painting the news with a splash of colour and optimism. As the news becomes darker this will get all the more difficult.

You’ll have nostalgia for your younger days before this is all over. We’ll still be pushing financial carcasses off the cart a decade from now.

#106 fancy_pants on 11.29.11 at 9:27 am

…of course paid salesmen (RBC economists) are an exception

#107 T.O. Bubble Boy on 11.29.11 at 9:31 am

@ #41 InvestorsFriend (Shawn Allen)

It sucks to be poor or below average in any way. Sadly on any measure 50% of people are below average. It’s the tyranny of math.

50% are below median… but when the average is skewed so high, more than half are below average.
(e.g. more than half of Vancouver’s houses are priced below the average of $1M)

#108 King Hammurabi on 11.29.11 at 9:34 am

Here is Black Swan author Nassim Taleb advocating the introduction of my code of laws to punish the banks on Wall Street.


#109 Pr on 11.29.11 at 9:47 am

Honesty. Please read this before buying some realestate, it may get here, soon are later.

The Polish foreign minister said today that : * what Europe faces is “a crisis of apocalyptic proportions” (http://www.ft.com/cms/s/0/d29da7fc-…) and urged what is essentially more useless debt bailout tactics to try to delay mathematical reality a little while longer.
I now believe that when the dust settles after the coming debt implosion wreaks economic havoc across the globe, more than a few banksters and money-changers will find themselves indicted, imprisoned, or possibly just hanging from a tall tree at the end of a short rope. That’s how angry the public is going to get when the full realization of the unprecedented theft and criminality of the global banking elite hits them, I fear*

Scary stuff! I hope its not going to end this way! Not good for anything, including realestate, every where.

#110 Honus Wagner on 11.29.11 at 9:48 am

@ #41 InvestorsFriend

“It sucks to be poor or below average in any way. Sadly on any measure 50% of people are below average. It’s the tyranny of math.”

Actually 50% of people are below the median. This just underscores the fact that most people don’t understand math, even the ones who purport to.

Our housing market is so upside down, it’s unbelievable. There was an article in the Star yesterday about renting being a viable option compared to owning a house. The comments were telling. Logic out the window. Stories of how since buying in 1998 they’ve done amazing, not understanding the long run swings in house prices. It’s the same story as those who invested throughout the 90s in equities who told you stocks could only go up, this time it’s different, the old multiples mean nothing. There will be a day (months) of reckoning. At the very least price/income must start to revert. Every time I try to make the math convince me I could buy, I can’t, and that’s in spite of having a very reasonable CMHC free down payment saved.

#111 Realitybytes on 11.29.11 at 9:51 am

Garth, you crack me up. And overall I’m sure you’re right about the bubble….but…
Average income is missleading.
Toronto is full of hundreds of high rise appartments filled with renters making much less, bringing the average down. (hell)

The “average income family” making ~96K is a rare animal.
Toronto is full of money. Small business owners, executives, professionals, salespeople, making well over 6 figures. These are the folks buying property. (heaven)

The folks making 80-120K who want to buy are in the sprawling suburbs. (purgatory)

Renters were not included in the RBC survey. Only owners. It also includes 905. — Garth

#112 Regan on 11.29.11 at 10:18 am

#49 westcanguy – $200 week for groceries is nothing. I have 3 kids and my last grocery run came close to $300. I’d say family of 5 is averaging near $1500/month at No Frills plus another $200 for the odd take-out pizza or fries. You don’t notice the price inflation on groceries as much when it’s just one person, but I can attest that the last six months have been a rapid rise in prices. And no, none of us are overweight, we eat meat once a week and we’re not organic freaks either.

#113 InvestorsFriend (Shawn Allen) on 11.29.11 at 10:33 am

50% below MEDIAN

Mr . Sanity at 98 , Honus Wagner at 109 and T.O. Bubble Boy at 106 corrected me on mean versus average.

Mr. Sanity said:
I think you mean 50% are below *median*. Due to the 1% (or, more accurately the 0.01%) at the very top skewing the averages, you’ll find a lot more than 50% of people below the average.


I stand corrected I used average in a loose way where average and mean are the same. They are the same if the distribution follows the “normal distribution” also known as Gaussian and know by a few other names including the “bell curve”. Incomes do not follow the normal distribution, the average is skewed higher than the mean.

So yes more than 50% of people are below the average income.

That does not mean you have to be that way or stay that way. Get motivated! Join the 1%!

Check it out for yourself whether or not it’s true that “money can’t buy happiness”. I’m not taking anyone’s word for that — I want to see for myself.

#114 InvestorsFriend (Shawn Allen) on 11.29.11 at 10:35 am


The fact that the average person can’t afford the house they now live in is not such a big deal. They alreay own it and in most cases bought it at far lower prices.

We just need the marginal buyers to afford today’s price. According to the banks and especially CMHC, they can. No affordy, no mortgagey.

#115 Angela on 11.29.11 at 10:37 am

Why is everyone always talking about drug dealers in Vancouver? Haven’t you read Freakonomics about why drug dealers live with their mom’s, because they have no money? They don’t “invest” it in houses. Even if they all do buy a house, there are still ample houses for other idiots to buy. And Vancouver houses have only served to push up prices on the north shore and in the valley, where I assure you we’re mostly surrounded by hardworking “average” folk. Article in Vancouver Sun last weekend (probably previously posted by someone) re Coquitlam SF homes selling out in a day after people lined up all night, price in high 600s. That is .6M, over half a million, for a pretty frigging average looking house. Granted the layouts looked pretty nice, but it’s just a plywood building on a postage-stamp-sized lot. Affordable only by downtown Vancouver standards, which is probably what happened, people gave up downtown and moved to Coquitlam because they are going to start building the fabled Evergreen Line soon.

#116 Ian of Ottawa on 11.29.11 at 11:00 am

This is exactly why I rent and spend the savings on OLG lottery tickets ! Can’t lose!!!

#117 Charles Darwin on 11.29.11 at 11:08 am

“What does this mean? Are houses really getting easier to own? (If so, time for this pathetic blog to get bombed and go for a long, final Harley ride in the snow.”

What is with the reversion to this “pathetic blog” Garth? I thought the blog was evolving?

#118 BPOE on 11.29.11 at 11:24 am

Vancouver in with great Company. Another reason buyers continue to flock. Anyone notice Seattle or ANY American City on this list? Folks, The American is crafty with hos pro Seattle bash Vancouver, Canada is like the US in regards to housing rhetoric. Beware of his ilk


#119 The American on 11.29.11 at 11:31 am

At #10: Ahhhhhhahahahahahahaha. That was a perfect way to start my morning. Thanks for sharing the laughter, 27thBPOE. Canadian banks didn’t navigate the Canadian people through any crisis, they aren’t bullet proof, and they certainly aren’t the envy of the world as you put it. At one time, Canadian banks were regulated well. THIS HAS CHANGED. Proof is in the pudding with the stupid loan programs and creative financing terms they’re cooking up and spewing into the market place. Its like the U.S. all over again, but only worse on a per-capita basis and no respect for what history has taught everyone already. In fact, Canadian banks are becoming a laughing stock, specifically within the global banking sector, as the banking sector itself now recognizes the ridiculous games the Canadian banks have been playing with its economy. Nothing is different in Canada than what already happened in the U.S., except for the fact its happening on a much greater capacity in Canada than what it did in the U.S., believe it or not. Those in the “know” already understand the conundrum in Canada and those who are not in the “know” will find out after the fact. I guess ignorance really is bliss. The Canadian banks have been baking up its own national crisis-to-be that is even worse than what other countries have experienced, including the U.S. Canada will, mark my words, be the ultimate case study in everything NOT to do in creating a healthy and sustainable real estate market. Transparency of information was not ideal in the U.S., ultimately leading to the economic crisis. Transparency of information in Canada? Absolutely void and laughable. What transparency? Canadian consumers and its banks are at the very top of the IMF’s radar right now for a lot of reasons. Essentially, Canadian banks are better liars than American banks, and even better liars than European banks.

The IMF has now issued multiple warnings on Canadian debt levels while your banks continue to ramp up antics. Additionally, the IMF has downgraded the growth outlook for Canada.





#120 Steve Thompson on 11.29.11 at 11:45 am

Here is a look at just how unaffordable housing markets have become when median house price is compared to median household income among seven nations Canada:


Many analysts feel that housing is affordable when the multiple ranges between 3 and 4; unfortunately, many cities in these nations have multiples that are in excess of 10, a situation that is untenable at best and frightening at worst. This is the case in most major Canadian cities including Vancouver, Calgary, Edmonton and Toronto.

#121 Timing is Everything on 11.29.11 at 11:50 am

#98 Mister Sanity
#106 T.O. Bubble Boy
#109 Honus Wagner

Well, that kinda sums it up.

#122 poco on 11.29.11 at 11:51 am

#58 April—from yesterday
Where are you Poco? “Blow out sale” on Rochester St, Coquitlam. Asking $199.

still around April—lack of time to do too much with housing stats lately
that blow out sale (#614-528 Rochester) has been listed at 199k since Dec 2010
the other one listed at 199k (#314-528 Rochester) was first listed back in the spring of 2011 (May)-for 215k–getting very close to being underwater at 199k

lots of owners still underwater in the tri ciries April–i have been following locations where family and friends live and what i see ain’t pretty !!!!

i can post some pricing for you if you want–you know the “before and now” pricing of a few complexes i follow–this may also help posters like Alan–(the one that doesn’t have a clue about housing)see where housing was and where it’s going

#123 Okanagan Renter on 11.29.11 at 12:00 pm

Scotiabank has a criminally irresponsible Rent vs. Buy calculator that puts even RBC’s mendacity to shame.

Even when I entered actual numbers for the cost of the condo I rent vs. my monthly rent, this is what the crooks concluded:

“While your rental payments may be lower, after 5 years, you will have accumulated $116,824.30 equity in your home.”

How, pray tell, does any home (especially a condo) accumulates THAT much equity in 5 years?

Here is the link if anyone else wants to give it a go:


#124 RL on 11.29.11 at 12:02 pm

Like I said earlier, they put this stuff out as “Press Releases” , if they put it out as “Advertising” they would all be in Jail.

#125 Mnbv on 11.29.11 at 12:36 pm


I would be intested in some tri-cities pricing, in particular, complexes such as the Cora where the initial investors paid something close to $500 per sq. Ft.


#126 Eurogeddon on 11.29.11 at 12:56 pm

The news is getting darker folks…

(Reuters) – “Italy’s borrowing costs hit a euro lifetime high of nearly 8 percent on Tuesday, taking the debt crisis to a new level of intensity hours before new prime minister Mario Monti was to meet euro zone finance ministers to set out his economic reform plans.”


#127 T.O. Bubble Boy on 11.29.11 at 12:57 pm

#122 Okanagan Renter

“While your rental payments may be lower, after 5 years, you will have accumulated $116,824.30 equity in your home.”

How, pray tell, does any home (especially a condo) accumulates THAT much equity in 5 years?

Because you pay off principal with every mortgage payment.

However – I will take issue with the fact that these calculators DO NOT assume any lost income/gains from the down payment.

$250k @ 5% a year in preferred shares is $12,500+ in gains that don’t appear in the comparison tool.

#128 McFurnish on 11.29.11 at 12:57 pm

Long-time reader, first time poster. Love the blog, but some of the stats being bantered around recently are misleading.

‘Average household income’ (AHI) and ‘first-time buyer’ (FTB) are often being treated as if they were one and the same. This is not even remotely the case.

AHI includes reported income from all households – this encompasses those on income assistance, retired persons, professionals, and the rest. FTBs are clearly a subset of this group.

This means that while a whole lot of high-income families are counted in the AHI, it also means that a whole lot of low-income families are counted – low income families that are *not* interested (or capable) of being part of the FTB category.

The result of this is that while it’s easy to use these figures to illustrate the wild disparity between the average sale price of a single-family home and the the AHI, a more constructive approach would be to look at the AHI of *only* FTBs.

#129 Media and Banks are Friends on 11.29.11 at 1:00 pm

They all belong to the same private club: in Canada, it’s called the CCCE.

The Canadian Council of Chief Executives.

Here’s their own published list of members:


Notice how the bigwigs of all mega-industry, whether it be media, pharma, or banking…are listed.

By the way, the CCCE wrote a letter to Harper earlier this year…with some gentle “suggestions”.

So far, he’s done everything on the list.


#130 disciple on 11.29.11 at 1:01 pm

Is there anything meaningful about a Dividend Payout Ratio, except that this has been typically decreasing every year? On occasion I see that this ratio is greater than 100%, so what does this mean in plain English?

#131 Bailing in BC on 11.29.11 at 1:11 pm

#103 Mr. Lahey

Thank you for your kind invitation. I will be attending with my brood. We will bring the pine needle casserole. We have it every Christmas. It’s an old family recipe, we put marshmallows in it!

#132 scared on 11.29.11 at 1:24 pm

#122 Okanagan Renter

I went to the site and was floored by the chart that was calculated. It doesn’t make sense. I think they are using some kind of computer generated random calculation based on a forecast of annual increases in RE. It is criminal.

#133 poco on 11.29.11 at 1:46 pm

#122 OK Renter

tried it–the equity they say you have at the end of 5 years includes your down payment amount
do it with 0% raise in housing and then try a mortgage calculater–minus your DP it works out the same as a mortgage for 5 years
scotiabank screwing with us again

#134 Sue on 11.29.11 at 2:00 pm

Wow Garth, you’re on fire. The humor in this blog makes it easy for me to get the skeptics over here and then, before they know what’s happened, they are converted. Brilliant!

#135 Guan-Di on 11.29.11 at 2:11 pm

#122, Okanagan Renter

Yeah I would say the calculations are a bit skewed towards ownership… I plugged in some rediculous numbers, like paying $1,200 a month in rent vs. a $950K mortgage… it said the same thing about how you might save more from renting but that you would have ~$150K in equity in 5 years… the difference in rent vs mortgage alone over 5 years without any gains would be $168K + the $50K for the downpayment… didn’t mention those numbers though… funny that;)

#136 BPOE on 11.29.11 at 2:23 pm

Nothing could be further from the truth. If you believe this then put your money where your mouth is and short the banks. Canada knows how to run its bank and America as usual had to bail theirs out!! The only laughing stock in the world is America, still looking for those weapons of mass destruciton, bailout of Wallstreet. Canada doesn’t bail IT PRODUCES!
118 The American on 11.29.11 at 11:31 am
At #10: Ahhhhhhahahahahahahaha. That was a perfect way to start my morning. Thanks for sharing the laughter, 27thBPOE. Canadian banks didn’t navigate the Canadian people through any crisis, they aren’t bullet proof, and they certainly aren’t the envy of the world as you put it. At one time, Canadian banks were regulated well. THIS HAS CHANGED. Proof is in the pudding with the stupid loan programs and creative financing terms they’re cooking up and spewing into the market place. Its like the U.S. all over again, but only worse on a per-capita basis and no respect for what history has taught everyone already. In fact, Canadian banks are becoming a laughing stock, specifically within the global banking sector, as the banking sector itself now recognizes the ridiculous games the Canadian banks have been playing with its economy.

#137 BPOE on 11.29.11 at 2:27 pm

IMF says to Canada Don’t Raise Interest Rates
Thanks fopr the link American as you continue to justify all my posts
The IMF also suggested the Bank of Canada hold off on raising interest rates.

“In terms of monetary policy, an accommodative stance will remain appropriate for some time given stable inflation expectations, ongoing economic slack, forthcoming fiscal drag, and heightened external risks,” said Gian Maria Milesi-Ferretti, chief of the North America division of the Western Hemisphere Department.

#138 Dc on 11.29.11 at 2:35 pm

I think the real point of the story is to get a job as an economist for a big bank. What other profession can you get a decent wage while making wrong predictions?

#139 jess on 11.29.11 at 2:39 pm



#140 zeeman1 on 11.29.11 at 2:46 pm


Home ownership in the GTA requires about 50% of total average family income and the 3 levels of government require about 50% of a middle class earner’s average income so it’s no surprise most people can’t put any money aside and live off lines of credit.


#141 Harlee on 11.29.11 at 2:50 pm

Michelle @76
And when I was a BOY we all learnt about pemmican in school. Which sounds a bit like what you’re describing with the pine needles…Pemmican and dandelion salad is the “pioneer food” we were taught. With the food prices rising maybe we’ll all be back to that….

#142 Mr. Lahey on 11.29.11 at 2:52 pm

#103 Bailing in BC

Thanks for responding and offering to bring your pine needle casserole. The park is buzzing with excitement with the anticipation of all the blog dogs who will be coming. Randy and Cyrus have extended olive branches to each other over the Christmas season and have laid down their weapons. Bubbles is working hard on a large repertoire of Christmas carols for the sing along in the crisp Maritime air by the large tree Randy and I cut down. The hot chocolate and eggnog will be flowing I can assure you. The only thing that will cap off the whole affair is a visit from the former right honourable Garth Turner…

#143 young & foolish on 11.29.11 at 3:11 pm

Oh nuts! Does this mean we all have to sell our bank shares now?

#144 disciple on 11.29.11 at 3:12 pm

Some top yielding stocks to consider in your portfolio:

BCE 5.25

What is your savings account paying you? The path to poverty is paved with inaction, willful ignorance, or an unhealthy combination of either or…

#145 GregW, Oakville on 11.29.11 at 3:18 pm

Hi Nostra, Someone may be interested in these? The one on military robots makes me feel safer already, not!

(Seem you could take part in the data collecting too. With a few more bucks to spare than I have right now. But others might be able too?)
Crowdsourcing Radiation Monitoring, with 13min audio.

Military Robots, (Coming soon to a neighborhood near you, and with weapons too, I’d guess! We human beings think we are so smart. I wonder how you’ll feel about it all when the barrel starts pointing/hunting you and your family. Any idea how to make EMP devices for home protection? If they aren’t designed with sheilding that is.)
New Biosensor Chip Picks Up Heart Signals Remotely

(I wonder what ever happened to this idea for powering homes? I recall hearing you could use natural gas or purified biogas as your hydrogen source.
I assume it would be quieter than a gasoline generator too.)
Home Fuel Cells to Sell in Japan
South Korea Opens World’s Biggest Fuel Cell Park

Surges and Setbacks for Trash-to-Gas Electricity
(Is/was this really ever a good idea?? I recall leaning that burning plastic always make dioxin, high temp can break it down, but then reforms in the cooling flu gases. And it is impossible to filter out the nano size partials. So you end up making dioxin that bio-accumulate up the food chain to us humans. But women can reduce there dioxin body loading when breast feeding there infants. Dioxin gets excreted into breast milk you know!
The ash from incineration is also very toxic and should be stored properly, for ever. You know all the empty shipping containers we ship back to places like China, are we shipping our garbage/plastic back in them and then they burn it? I’d guess there garbage burning plants don’t need gas exhaust filters on them? Maybe just tall smoke stacks so we get some back too.
We humans are so smart.)

#146 disciple on 11.29.11 at 3:26 pm

Video. Psychopaths rule the world. I believe westernman is being interviewed by John Pilger…


#147 Heinz Skiztvelvett on 11.29.11 at 3:37 pm


“The threat of a bubble has largely dissipated,” senior economist Robin Wiebe said of Metro Vancouver. “But, really, there never was one.

Face in palm.

#148 Marnic on 11.29.11 at 3:46 pm

Strong post today, Garth. Nail on the head.

#149 disciple on 11.29.11 at 4:03 pm

Our moon is an artificial satellite. So is Iapetus, one of Saturn’s moons which resembles the Death Star and probably inspired (informed?) James Lucas. The universe is electric and filled with charged particles. The EM force is a gazillion times stronger than the weak gravitational force, and yet “scientists” still cling to their wind-up gravity-based explanations for everything. Here’s the honest truth, honest:

The “Big Bang” model is based entirely on the notion that gravity, a very weak force, is the only power at work in all the universe. Astronomers have no idea how gravity works, or what powers it, only that it exists. Gravity is a force whose power of attraction falls away at the square of the distance (it weakens exponentially with distance). But NASA misses the forest and the trees. Outer space is not ‘gravity only;’ it is electrified plasma.

Space plasma is a low-density mix of atoms and molecules, in which electrons are stripped from atomic nuclei. The nucleus becomes a positively charged ‘ion’ and the free electrons are negative ‘ions.’ These charged particles attract, repel, squeeze and shape material in outer space.

Space then, is a web, a field, a series of flowing, layered, pinching, rotating currents, rivers and oceans of charged, powerful particles. Powerful because the attracting force does not fall off at the square of distance. And the electromagnetic attracting force is 10 to the 39th power stronger than gravity.

That is, the attraction in a plasma is 1,000,000,000,000,000,000,000,000,000,000,000,000,000 times stronger than gravity to begin with, and does not fall off quickly, but only with distance, not distance squared.

In this universe, then, gravity is not king, or even queen. Plasma and electromagnetism rule – but NASA has not rolled the Big Bang model over yet, and so does not figure this reality into its 18th Century model of stars and planets.

What did Arthur C. Clark know? As a Freemason like James Lucas, everything… The inner planets were ejected from one of the gas giants in our current solar system. They were satellites of that gas giant.

Yahweh, Cronos, Brahma, Zeus, Jupiter, Ahura-Mazda, etc… are Saturn and Jupiter, failed stars, former brown dwarfs, out of which one issued our planet, a wet rock, upon which through DNA and water were sung the song of life and consciousness realizing itself. Something… wonderful. About a year ago I told you of the green monolith. And I’m wearing indigo today. (That’s a coded message to those who know).

#150 Kevin on 11.29.11 at 4:17 pm

Growth mortgage debt slows

But they do not say by how much. Thankfully the mortgage numbers can be found at the Bank of Canada website.

I calculated year over year mortgage credit growth for this year at
jan 7.5%
feb 7.3%
march 7.9%
april 8%
may 7.6%
june 7.3%
july 7.2%
aug 7.1%
sept 7%

So of course mortgage credit growth is down from the spring but the amount of “slowing” is so negligible it does not deserve a press release.

I think this is more of a ploy to try and show that the mortgage rules are “working” and no more mortgage tightening is needed.

Which of course, as we all know, could not be further from the truth.

#151 disciple on 11.29.11 at 4:19 pm

Dogen, a thirteenth-century Japanese Buddhist teacher said, “We must always be disturbed by the truth.”

So, if you want honesty, you must remove thyself from thy comfort zone. Are you willing?

Jesus said “I come not to bring peace, but to bring a sword” (Gospel of Matthew 10:34), I send you out as sheep in the midst of wolves; so be wise as serpents and innocent as doves…

WISE AS SERPENTS?? Perhaps referring to the line of Cain whose father literally seduced Eve in the garden…

#152 Dorothy on 11.29.11 at 4:23 pm

All of the economies of the West appear to be in disarray, which suggests to me that the so called economic “experts” who advise our governments and companies, have all been proven to be wrong. So I’m not sure that advice from such as the IMF is advice that should be listened to.

Countries should stop listening to bodies such as the IMF, which have hidden agendas to protect certain groups, and start doing what’s best for their own people.

It’s important that Countries keep their debt/deficit down, so as not to fall under the control of such bodies. Because having organizations such as the IMF dictate government policy is NOT democratic rule, no matter which way you slice it.

That said, individual debt is just as much of a concern as government debt, so it’s equally important that our Government take steps to help curb that debt too.

Mortgage debt could easily be controlled by returning to the old standard of a minimum of 10% down. Anyone with less than that amount is far too vulnerable to minor price fluctuations, and shouldn’t be buying real estate.

But the government also needs to regulate the credit card industry more. For example, why is it legal for credit card companies to give cards to students with little or no income? Why is it legal for companies to raise the credit card limit without written permission from the card holder? Why is there no legal requirement for the card issuer to conduct periodic checks of the card holder’s financial ability to carry the maximum card balance? After all, peoples circumstances do change, and it is in everybody’s interest to ensure their limit does not exceed their ability to pay.

All the above minor regulation changes would be easy for our Government to enact, and would go a long way towards ensuring Canadians do not become overly indebted. So, if the Government really is concerned about Canadian over indebtedness, why haven’t they passed any such regulations?

Talk is cheap, but actions speak louder than words!

#153 GregW, Oakville on 11.29.11 at 4:23 pm

Hi Garth, a review of energy report.
The Next 25 Years in Energy
POSTED BY: Bill Sweet / Fri, November 11, 2011

#154 Fractional Reserve on 11.29.11 at 4:29 pm

“Chartered banks do not create money. — Garth”

Are you kidding me Garth? A fellow politician you may know, former right honourable Paul Hellyer wrote a book entitled Funny Money on how the chartered banks do indeed create money out of thin air. It is called fractional reserve banking.

“Paul Hellyer explains how private bankers have been creating, in their worldwide , unbridled avarice over the centuries, legally fraudulent money.”


Hellyer’s a nut. Banks do not create money. — Garth

#155 Bench Warmer on 11.29.11 at 4:32 pm

Finally, for comic relief, the same economists say it takes 90.6% of the average pre-tax income in Vancouver to carry a house. That’s $75,315 a year.
If it weren’t for their grow op’s these families would be screwed!

#156 malkoo on 11.29.11 at 4:50 pm

its all manipulation

must read :


#157 Okanagan Renter on 11.29.11 at 4:53 pm

I came across a terrific article published in July in Canadian Business that drives a stake through the heart of the cult of home ownership in Canada. With echoes of the Greater Fool, Moshe Milevsky, a finance professor at Schulich and one of Canada’s best-known home-ownership skeptics writes:

“I really wish I could sell my house and rent. Immediately!” he says. “The market is so overvalued. I’d sell to the biggest sucker.”


#158 live within your means on 11.29.11 at 5:30 pm

#49 westcanguy on 11.29.11 at 12:32 am

A family of 3 spends almost 200.00 a week on groceries??
Push away from the table people. I can not fathom going through that much food every week.


I doubt it’s just for food. Most people’s grocery bills include many other items including laundry, dishwasher & regular dish detergent, toilet & paper towels, as well as many other household items that one buys at grocery stores. Almost all products have increased in price and reduced in volume.

#159 Michael on 11.29.11 at 5:33 pm

Not encouraging for a price drop, hopefully you can explain this tommorow :)

“The CMHC said it saw little evidence of a price bubble.”


#160 Regan on 11.29.11 at 5:35 pm

#122 Okanagan Renter – I compared a $600,000 house with 5% down against a $1800/month rent (comparable pricing for Toronto places I’ve actually looked at, don’t forget utilities etc. are extra and the housing cost should include transaction fees too), assumed 0% increase in both over 5 years. Since it’s a 5 year time frame, I used the 5 yr mortgage at 5.29%. My rent costs are 108,000, my mortgage payments are about 200,000 and my equity is about 105,000 minus the 45,000 down so (105,000 – 45,000 = 60,000 built to equity). So, if I rented and socked away the monthly difference in costs (200,000 minus 108,000 = 92,000 plus my 45,000 downpayment that I’ve kept doing 0% = 137,000). Basically, the interest costs (140,000 in the first 5 years!) are in excess of the rental costs. Any other expected capital gain or loss is speculation and introduces factors of risk, so is using the short-term mortgage rate.

#161 John saccy on 11.29.11 at 5:43 pm

Hellyer’s a nut. Banks do not create money. — Garth

Banks do not create currency. They create debt or money through fractional reserve banking. This in turn results in credit expansion eventually increase in money supply. Right now most of the money supply is created by banks and NOT by currency supply through BoC.

Banks do not create money is WRONG.
Banks do not create currency is RIGHT.

#162 Westernman on 11.29.11 at 5:50 pm

“What other profession can you make a decent wage while making failed predictions?” I submit – weather forecaster for Enviornment Canada…
Disciple @ #145,
Thanks for the compliment – I say whatever it takes pal, whatever it takes… you can put your tinfoil hat back on now Mr. Disciple.

#163 poco on 11.29.11 at 6:01 pm

#124 Mnbv
I would be intested in some tri-cities pricing, in particular, complexes such as the Cora where the initial investors paid something close to $500 per sq. Ft.
______________________________________________555 and 575 Delestre (Cora)in Coquitlam had some of the largest price drops in all the tri cities—when i was doing some research into those complexes (Jan 11 to june 11) i really thought that there must have been some structural problem with those towers because of the large price gap between what the owners paid (pre sales ) and what they were trying to dump them for

i haven’t looked at those highrises for a few months but had posted some of the previous listings on here in the past—these are just a couple of the listings from the spring–don’t know what happened with them–these are all from 555 Delestre
v882730-#203—-bought Aug 09–481.7k–last listing i have was for 394.9k in May 2011
v886442-#1202—bought June 08–374.3k–last listing i have was for 308.9k in May 2011
v875355-#1005—bought Mar 08–319..9k—listed for 365k in Jan 2010–sold in Apr2011 for 311k–i guess this was one of the luckier ones to get out without a bigger loss
v873989-#1801—bought June 08–518.8k–last listing i have was for 380k in May 2011

many other highrises in the tri cities area had significant price drops — hundreds of owners listed and sold while underwater this past spring and summer and still are today–hope this helps

#164 Bill Gable on 11.29.11 at 6:15 pm

Lovely FLASH:

“Bank of America Corp., Goldman Sachs Group Inc. and Citigroup Inc. had long-term credit grades downgraded to A- from A by Standard & Poor’s after the ratings firm revised its criteria for the banking industry.

Standard & Poor’s also made the same cut to Bank of America’s Merrill Lynch unit on its website today.

The move may increase pressure on Bank of America, which has plunged 62 percent this year in New York trading. The second-biggest U.S. lender by assets said in a November filing that a ratings cut could trigger billions of dollars in collateral payments and crimp access to credit markets.

Downgrades may be costly for banks. Bank of America said in a regulatory filing this month that it may have to post $5.1 billion of additional collateral and termination payments on its trades were it to be downgraded one level by rating companies.

Ratings downgrades “could likely have a material adverse effect on our liquidity, potential loss of access to credit markets, the related cost of funds, our businesses and on certain trading revenues, particularly in those businesses where counterparty creditworthiness is critical,” Bank of America said in the filing.

The company, which noted the risk of downgrades from S&P and Fitch Ratings in its third-quarter filing, previously said it has prepared by lining up funding for a year.”


My next question is: what happens when they start marking to ‘market’ the Quadrillion in SIV’s off books?

#165 Victoria on 11.29.11 at 6:19 pm

The CMHC said,

Oh well then ….

#166 Herb on 11.29.11 at 6:32 pm

#150 Disciple,

WISE AS SERPENTS?? Perhaps referring to the line of Cain whose father literally seduced Eve in the garden…

And we all know how wise seducing Eve turned out to be. So what’s your point, Disciple of whatever?

#167 AACI Home-dog on 11.29.11 at 6:36 pm

I believe you are mistaking this blog for the following astronomy blog.


#168 Kevin on 11.29.11 at 6:41 pm

For those wondering:
This is how mortgage loosening and mortgage tightening compare with mortgage credit growth year over year since 2005.

#169 lokoutbelow on 11.29.11 at 6:45 pm

Let’s see now, who pays this wonderful Economist’s salary. What are his critical success factors? Can he really publish a report that says the housing market is likely to tank soon?……NOT!

Just take a look at the stock charts for the major banks. The “smart money” is moving out of these equities. Next stop, dividend cuts. S&P just downgraded 17 of the Major US banks, Europe is about to implode and these “great minds” think that housing is becoming “more affordable” in this country. If you are from overseas i.e. CHINA I guess it is becoming more affordable, so they can buy and just ket the house sit empty till it’s needed, that will be when China enforces the outflow of its money…..

By the way, Craig (the wonderful RBC Economist), you can get cheap money at RBC and we will sell you our “really affordable” house in Vancouver. Just call me.

#170 sam.i.am on 11.29.11 at 6:46 pm

Chartered banks do not create money. They do create credit. Whether the creation of credit is the same as creating money is up for debate.

#171 bramptonsux on 11.29.11 at 6:47 pm

Using one number for GTA and another two numbers for Toronto in the same context is misleading. Toronto and GTA are not the same.

In the context of the post, they are the same. — Garth

#172 Form Man on 11.29.11 at 6:47 pm

#161 westernman

I use weather forecasts all the time to schedule concrete pours. Environment Canada is the most accurate. To paraphrase Churchill ‘ they are the worst forecasters……..except for everyone else’ This also fits with your view of Canada ‘ it is the worst country…….except for all the others’. Of course we do not expect logic or reason to play any role in your small minded, bigoted thinking……

#173 BPOE on 11.29.11 at 6:56 pm

Bubble what bubble

#174 UVZ on 11.29.11 at 7:01 pm

#35 Renters Revenge

Re: CMHC exposure. You’re right.

Don’t count on any meaningful reaction by the common people.

#175 live within your means on 11.29.11 at 7:03 pm

#77 DonDWest on 11.29.11 at 2:56 am
It’s going to take more than $39 panties to wash away the pain in sexual bliss!


Rec’d the following joke from a friend today. It’s an oldie, but goodie.

Research shows that there are 7 kinds of sex.

The 1st kind of sex is called: Smurf Sex. * This kind of sex happens when You first meet someone, and you both have sex until you are blue in the face.

The 2nd kind of sex is called: Kitchen Sex. * This is when you have been With your partner for a short time, and you are so needy you will have sex anywhere, even in the kitchen.

The 3rd kind of sex is called: Bedroom Sex. This is when you have been with Your partner for a long time. Your sex has gotten routine, and you usually have
Sex only in your bedroom.

The 4th kind of sex is called: Hallway Sex * This is when you have been with Your partner for too long. When you pass each other in the hallway you both say
‘F*** you.’

The 5th kind of sex is called: Religious Sex. * Which means you get Nun in The morning, Nun in the afternoon and Nun at night. (Very Popular)

The 6th kind is called Courtroom Sex. This is when you cannot stand your Wife any more. She takes you to court and screws you in front of everyone.

And; Last, but not least, The 7th kind of sex is called: Pension Sex. You get a little each month. But not enough to enjoy yourself.


I have enough problems Of my own!!

#176 Smoking Man on 11.29.11 at 7:03 pm

American Blog Dogs
And you though those FEMA camps were for nothing.

Be very carefull of what you say on blogs, tweets and Facebook. Seriously

The Senate has overwhelmingly voted down an amendment to the National Defense Authorization Act that would have provided oversight to check the military’s power to arrest U.S. citizens as suspected terrorists on American soil and detain them indefinitely without trial.

The Senate soundly defeated a move to strip out controversial language requiring mandatory detention of some terror suspects, voting it down 61 to 37 and escalating a fight with the Obama administration over the future course of the war on terror.

Things always get nasty at the big poker game of life when When a few have everyones chips……

#177 sam.i.am on 11.29.11 at 7:05 pm

Oh Canada! Our Bought and Sold Out Land


Relevant bits to money creation discussion start around 20:00.

Posted before. Incredibly inaccurate. — Garth

#178 Smoking Man on 11.29.11 at 7:07 pm

The dumb thing about passing laws like the above, power just assumes they will have it forever, then one day an old baldman who don’t like them gets elected.

Bingo he can lock em all up………

#179 Smoking Man on 11.29.11 at 7:13 pm

#2 U.S. Senator Joe Lieberman is asking Google to install a “terrorist button” on all Blogger.com blogs so that readers can easily flag “terrorist content” for authorities.

Can we then turn you in? — Garth

#180 Nostradamus Le Mad Vlad on 11.29.11 at 7:16 pm

#144 GregW, Oakville — “We humans are so smart.”

Compared to dunghills and dingbats, yes we are! Thanks for the links and feedback!

#148 disciple — “The universe is electric and filled with charged particles.” Correct. See links — Here, here, here (9:53 clip) and here.

#108 Pr, #128 Media and Banks are Friends and #151 Dorothy — You are all correct, and all have one common thread running through them.

When Poland publicly said they had paid off all their obligations, and were capable of helping other countries out, they became a direct threat to the IMF.

Hence, the Polish govt. was wiped out in a mysterious plane crash in Russia. Elections, new govt., Poland is up to its eyeballs in debt.

Libya was self-sufficient, with a gold-backed dinar and a central bank. They were not reliant on the IMF. The old govt. is gone now, and NATO – US – UN have reduced Libya to rubble.

The US completely destroyed Iraq, as Sadaam had said they were switching to the Euro from the petro-dollar.

Ain’t too hard to figure out which country has benefited the most.

#175 Smoking Man — Bingo!
Iran and the Bilderbergs This will be very interesting, to see the end; Three Choices incl. collapse (EU); Citigroup As per Japan, the EU faces a lost decade; 9:59 clip Last Chance Euro Saloon? Surprise! The world’s most profitable banking centre is . . .
NAFTA Except the new one covers the Pacific; Newt Gingrich Evil personified (right wing nuthead, as per Harper, dubya, etc.); Treason The US Senate; Launch Pads “Do you get it? Al Qaeda are FAKES! They are the modern version of 1984’s Emmanuel Goldstein; a made up enemy created by the government to keep the population scared and to justify all wars and tyranny.” wrh.com; Double Standard Esp. after what the UK did in Iraq and Libya; Pakistan NATO’s payback is a bitch; Sea fence “Wouldn’t a machine gun emplacement be cheaper?” and Prison Society That’s what the communists, incl. Obomba are doing.

#181 sam.i.am on 11.29.11 at 7:21 pm

Yes, sorry about the repost, didn’t realize till after it was too late. Was for entertainment value more than anything.

#182 Westernman on 11.29.11 at 7:25 pm

Form man,
Enviornment Canada couldn’t accurately predict the sunrise… typical government bureau – full of automatrons collecting taxpayers money for nothing. I wouldn’t plan a trip to the mailbox on the strength of Environment Canada’s forecasts.

#183 sam.i.am on 11.29.11 at 7:28 pm

Smoking Man, I always get a chuckle at the level of paranoia and focus on the US situation. Maybe it’s time for some stock in alcoa. Can we get back to finance/economics/real estate?

#184 Mr Buyer on 11.29.11 at 7:41 pm

We are doing the math regarding renting and household expenses for even a single year and it is simply horrifying. I can not think of a better way to put it. Gouging past the bone into the marrow on a daily basis. Maybe if I sell one of my kids for his organs my other kids can have some kind of a future, even if it is only for a few months. I am becoming fighting mad over the state of affairs. I have to calm down because it is tricky to place me shots when I am as emotional as this. While we have some funds they are clearly not enough and if everybody did the math there would be precious few that came even close to enough. People must be borrowing for just about everything to get by now. I see the yolk of debt looming over the horizon and I have the shadow of 14 nuclear reactors on an active fault line pushing me towards it. I have an overwhelming feeling of inadequacy in the face of all this. Wake the hell up everyone.

#185 Smoking Man on 11.29.11 at 7:42 pm

Can we then turn you in? — Garth

To late brother I got list a long time ago…..But I did take down my blog Not an idiot, booze speaking mind, not good in a police state…….

We are going to war very soon…. and anything goes when it comes to rounding up free thinkers so been keeping my nose clean…..

Do you not remeber about six months ago we I said this was going to happen……..

Do I have vision or what…………………..

#186 sam.i.am on 11.29.11 at 7:43 pm

[email protected], that just made my day.

#187 Patiently Waiting on 11.29.11 at 7:58 pm

Deciple: Thanks for your post re: top yeilding stocks. Are these prefered shares? Are they appropriate for short term holding? What is the risk that these stocks go lower in value in say the next 12 to 18 months potentially wiping away any gains on the yeild?
Patiently Waiting
____________________________________________Some top yielding stocks to consider in your portfolio:

BCE 5.25

What is your savings account paying you? The path to poverty is paved with inaction, willful ignorance, or an unhealthy combination of either or…

#188 Devore on 11.29.11 at 8:14 pm

#169 sam.i.am

Chartered banks do not create money. They do create credit. Whether the creation of credit is the same as creating money is up for debate.

It is not up for debate. Credit money and currency money are fungible. One and the same.

#189 Form Man on 11.29.11 at 8:16 pm

#181 westernman

and whose forecast would you rely on ? ( a simple question requiring a simple answer only a simpleton would ignore )

#190 The InvestorsFriend on 11.29.11 at 8:19 pm


John Saccy at 160 said:

Banks do not create money is WRONG.

I would say they DO create money and there is nothing nefarious about it. It is perfectly fine.

The reason they create money is that money is defined to include the sum of all bank deposits.

If a bank lons someone $100 and it gets redosited back in the bank, then they can loan out $90 (assume 10% fractional reserve required), the $90 gets re-deposited in some bank and some bank loans out $81 etc. Until an intial $100 of new depost money (say from outside the country) turns into $1000.

But the banks don’t own that money, the depositors do and it is offset by loans owed to the bank.

It’s really just the quirky way we define money.

Nothing to worry about.

Do worry that banks don’t have enough shareholder equity capital (which is different from the cash reserve in the vault). Don’t worry about bank money creation, which also only happens if we the people take out loans. Without customers banks could create no money.

You have seen the enemy and it is you…

#191 Nostradamus Le Mad Vlad on 11.29.11 at 8:40 pm

5:55 clip Abrupt fiscal downturn, staying within the context of the times; Fiscal Fascists Watch out, they’re coming back for more; Bankruptcy American Airlines. Good on the TSA — they did their job! Not Immune “Obama’s pushing of the mortgage fraud settlement is a lot like the Catholic Church’s practice of selling ‘indulgences’, immediate forgiveness of sins, to the rich.” wrh.com; Failing Infrastructure The EU is falling to pieces, and could be gonzo in a few weeks; Illegal 4Closures That will boost morale in the military; Prodding What happens if one annoys a sleepy tiger to much?

The Christ and Putin have one thing in common; Secret Revolution of NDakota “North Dakota citizens may abolish property taxes, allowing them more control over government spending.”; Hank Paulson and Hedge Funds; Bailout Fund Why not have it large enough to cover every single person in the world? Subsidiary of RBS at fault.
George Orwell’s guide to the news; 2:37 clip Regime change? Probably not in Syria and Iran, as China and Russia have too much investment tied up there; Hacking Scandal “This has gone beyond mere scandal-mongering. Murdoch was running an intelligence gathering operation behind the facade of his newspapers. The question that must be asked now is, which nation did he provide the gathered intelligence to? You get three guesses and the first two don’t count.” wrh.com; Type 2 Diabetes Is there a ‘miracle cure’ for it?

For BPOE Vancouver is tied at fifth; Computers Hard drive prices go through the roof, and Windows tablet not well received; Russia – Syria Same as Libya, that’s why the warships are headed back there, and this — Russia activates missile radar system; Pakistan – US Nukes come between them; Blah blah Gingrich Pushing for Singapore-style drug testing.

#192 Junius on 11.29.11 at 9:17 pm

#172 BPOE,

Markets are always balanced as they pass from hot to cold. You are witnessing the shift. Get used to it.

#193 ballingsford on 11.29.11 at 9:20 pm

I don’t mind the renting thing at all at the moment. Glad to stay where I am until all this uncertainty settles (which may take a while). The place is clean, warm, cool in the summer, rent is lower than a mortgage ( which doesn’t include property taxes, utilities, gas (or whatever you use for heat), maintenance etc.) back yard for a garden and bbq, large patio table, etc. We could use a bit more storage room though, but what the heck, it helps us discard the things we don’t need sooner.

I’d rather rent in this hood instead of going to and buying in FarHaven (intentional spelling error), Orleans, or Kanata because most of the things we like are nearby. And, I mean really near by. I would rather spend my wasted mortgage cash on family things for my son which includes the occasional restaurant meal (once a week), a little junk such as the odd happy meal, RESP’s, donations to charities, and other things. Also, it’s only about 20 minutes to downtown by bus.

I ignore anyone who thinks we are missing the boat because we rent instead of own. We will eventually! House prices do not rise forever.

I’ll continue to enjoy my Prime Rib while you naysayers enjoy your KD.

#194 Smoking Man on 11.29.11 at 9:45 pm

185 sam.i.am on 11.29.11 at 7:43 pm

Happy little Butt kissing tax farm slave

#195 Aussie Roy on 11.29.11 at 9:54 pm

Banks do not create money. — Garth

Garth I never thought I would disagree with your comments. If your statement above is a blanket statement concerning all banks then sorry but you have it wrong. Banks create money (via loans/deposits) through the financialization of assets by using loans against existing deposits and creating new deposits with the loan proceeds.

A simplistic example

Bank – total 550k deposits – no loans
Banks lends 500k for a mortgage
Settlement on house loan proceeds paid to seller (freehold property).
Seller deposits 500k proceeds of sale in bank.

Bank total $1.05m deposits – 500k loan
Against the loan proceeds which is now a 500k bank deposit bank can supply another loan (at 10% reserve requirements a 450k loan). Yes this deposit was created from the loans proceeds, if you like the bank created or enabled this deposit through asset financialization.

How could banks not create money as loan proceeds become deposits which can be used to create further loans. More loans equals more deposits in the case above.

Sure the above example is simplistic but its easy to see just how the financialization of assets (in this case housing loans) creates deposits which it turn allows banks to create more loans. It is a circular process.

Banks create loans from deposits, loans create further deposits which creates further loans.

It’s said here many times that one persons loan is anothers deposit, it is also true that one persons deposit can be the proceeds of another persons loan, again this is a circular process which must be viewed as such not just in isolation from a single view regarding deposits but loans and deposits.

One step on, the process above of course starts to fall apart when the level of equity (future deposits from a sale) start to get close to zero. Where the highly leveraged sell (or are foreclosed) creating little or no new deposits for banks (limiting banks future loan growth) at the same time destroying the banks asset base (loans are a bank asset). If you like the falling value of the assets which have been financialized always creates a negative feedback to the banks.

What eventually blows up banks starts with falling loan volumes, rising bad debts, sending the backed asset price lower, in turn leads to erosion of future deposits and falling banks assets (loans). Then the final straw is always counter party risk, when other banks isolate and refuse to lend to the bank in question – Bear Sterns is a classic example of this negative feedback process.

It might be hard for some to get their head around but Prof Steve Keen is 100% correct, 30 years in the industry confirms to me he his.


#196 sam.i.am on 11.29.11 at 9:55 pm

Credit and money are not the same thing. The issuance of credit creates the illusion of new money, but the money is not new – it is the same money asymptotically loaned and re-deposited within the financial system. The bank’s job is to make a profit by managing risk.

#197 Media and Banks are Friends on 11.29.11 at 9:58 pm

#160 John saccy

You are right.

And, as far as I know, the reserve rate of banks in Canada (thanks to Mulroney) is zero.

What a racket!

#198 sam.i.am on 11.29.11 at 9:59 pm

#193 Now that just made my week.

#199 Macrath on 11.29.11 at 10:10 pm

“Each and every time a bank makes a loan (or purchases securities), new bank credit is created — new deposits — brand new money. “~Graham F. Towers, Governor of the Central Bank of Canada (from 1934 to 1955),


#200 Okanagan Renter on 11.29.11 at 10:12 pm

#159 Regan:

Spot-on math there! I shudder at the thought of sinking 140K in interest. It’s ironic that Scotiabank makes such a calculator available when in fact it’s more likely to turn any astute user off of buying! And some well-meaning folks still bleat the mantra that “rent is money thrown away.”

#201 Tony on 11.29.11 at 10:54 pm

#186 Patiently Waiting on 11.29.11 at 7:58 pm

Likely lose your shirt on all of them when the market tanks without precedence. Expect the bottom to fall out of all commodities. Most dividend plays will end up like Yellow Media.

#202 disciple on 11.29.11 at 11:40 pm

#186, #200… Dividend-paying stocks should be part of your growth portion, not your emergency shirt off your back portion of your wealth… You should not look at the capital gains, rather just the dividend, that is the real wealth… money must circulate to generate real wealth, it’s the dividends, stupid… Buy, Hold, Prosper. And Yellow Media is adapting quite well to the technology shift and will bounce back soon enough. They must have taken my advice on an earlier posting…

#203 Michelle on 11.30.11 at 12:55 am

@#140 Harlee-

It’s an acquired taste I must say. My dad spent many years with the Cree and wanted to make sure I never starved in the wilderness :P

#204 Not Wondering Anymore on 11.30.11 at 3:42 am

#151 Dorothy

Simple. Because western governments have ceased being democratic.

They no longer represent their citizens, but are instead owned by and represent the corporate and financial sectors.

#205 disciple on 11.30.11 at 11:29 am

#203 Not Wondering Anymore… what makes you think Western governments were ever democratic? They have always represented Big Business. That’s what a “Charter” is for, why the West began at all, for Pete’s sake. That’s what governments are for. Truly free and enlightened human beings do not need government (mind control) per se. The reason you cannot fathom this is because IF you were the owner of one of these corporations you deride, you would have no ethical troubles with the government. Am I right? Are you true to yourself? I could be wrong, but don’t make the mistake of not following your convictions to their fullest conclusions… confront the self.

#206 Kosta on 11.30.11 at 2:53 pm

My friends (all house or condo owners) keep pressuring me to buy. I’ve rented for the last 5 years while saving up enough for a downpayment.

So why do all my friends tell me to buy and that it’s guaranteed to go up?

#207 Sunmonkey on 11.30.11 at 4:25 pm

Do they live in Mississauga?