Roberta and Johnny got a call from their agent Monday night saying an offer was coming in. That was big news. They can’t wait to dump the condo townhouse they bought three years ago. “It was supposed to be an investment,” she says, “not a nightmare.” Not that the tenant’s much trouble. She’s not. But it’s tough to know what you paid $499,000 for thirty-seven months ago is now worth $358,000.

At least, that’s what the offer’s for. Worse, the deal has hair on it. Lots of conditions. Long close. Small deposit. Not much of an offer at all, actually. But better than no offer, the alternative in a town where the market’s died.

I’m not sure if they’ll take it or send it back (my advice – make it clean), but Johnny sent me this, while he pondered things last night:

“A side note of potential interest to you is that the owner of a comparable unit in the same complex priced $100K (yes, one hundred) over ours and that has been sitting on the market without viewings for months, if not a year now, called me the other day and left a message saying that he wanted to talk to me about my price.  He felt that I would be leaving “a lot of money on the table” and gave indication that I must not understand the state of the market in the area very well.  In the meantime, another comparable brand new unit (one of many that are coming out) in a complex down the street was just listed under headlines of ‘receivership pricing’ for $345K.  Needless to say I haven’t called him back.”

Another story from the street. This is real life. The housing market’s bleeding out in towns and cities across the country. Reality is now completely divorced from the big-city media headlines or the corporate reports behind them. Yesterday I showed you how the Royal Bank’s housing affordability study is deceiving and irresponsible, for example. This is the kind of stuff you expect from Re/Max or LePage, but not from the country’s largest bank. Nor from the government, sadly.

This week Canada Mortgage and Housing Corporation released its quarterly financial report on its web site near the smiling face of the minister responsible, Diane Finley. She’s managed to politicize this agency recently, making it a part of F’s Economic Action Plan, which should come as no surprise. After all, cheap money and easy credit is the K-Y Jelly of fiscal policy. CHMC just gives the push.

Imagine how different the world would be if the feds didn’t force taxpayers into guaranteeing every high-risk, high-ratio mortgage. Twentysomethings with no money wouldn’t be able to borrow money at the same mortgage rate as people who are actually creditworthy, because lenders would be on the hook for the risk. Bidding wars would fizzle. House prices would normalize. And the economy, now 20% fueled by real estate, would flatline. Ms. Finley might not have been re-elected last May. This pathetic blog would not survive – as market forces, not the federal government’s engineering, dictated the value of a home.

But forget that. CHMC now exists solely to grease real estate and, apparently, to lie about it.

“CMHC, in consultation with the Bank of Canada and the Department of Finance, is continuing to refine models and techniques used to help identify risks of house price bubbles,” the latest agency report says. “At the moment, there is little evidence of a significant over-valuation in the Canadian housing market overall, although some centres warrant close monitoring.”

Little evidence? Canadian house prices have climbed on a trajectory paralleling that of pre-crash America. A SFH in Van is $1.1 million and $750,000 in 416. Even RBC’s diddlynuts report shows it takes two-thirds of after tax income to carry a house in Toronto, while in Vancouver an entire city has been whipped into delusional danger.

Worse, CHMC is trying to peddle the story that housing prices are sustainable because of ‘encouraging signals’ that we are no longer debt pigs. The growth of mortgage debt, it says, has decreased ‘significantly’ since earlier in the year. This also supports the agency’s view that prices are just fine, when you factor in demographics and economic growth.

Is this credible? Doesn’t such talk of stable markets and prudent borrowing fly in the face of everyone’s experience? When people without money can buy granite and SS and borrow at less than the inflation rate, are things really under control? Or does the minister think we will lap this up the way, oh, the Globe and Mail did this week? (“Growth of mortgage debt slows: CMHC finding lends credence to the theory that the country’s housing market will hold up”)

As Kevin over at Saskatoon Housing Bubble points out, this report would grow fine mushrooms. The year-over-year growth in new mortgage debt was 7.5% in January, peaked at 8% in April (the spring real estate rush), and dipped to 7% in September, amid global financial turmoil. As frosty little Kev reported here, “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.”

Which we do.

Fact is that for every one of the months this year, mortgage debt has leapt higher. This has happened while employment has declined and incomes have fallen behind inflation. And most of this $1.1 trillion is financed at some of the lowest interest rates in history (thanks to the feds), which will not endure.

Back to Roberta and Johnny. Without cheap and easy money they’d never have bought that townhouse, since rent wouldn’t carry it. Now they’re selling at a loss to a vulture. And neighbours are pissed because there goes the hood.

Yes, it sure is different here.


#1 Joe Q. on 11.29.11 at 10:47 pm

Where do Roberta and Johnny live?

Guess. The winner gets a lovingly-autographed, free book. — Garth

#2 T.O. Bubble Boy on 11.29.11 at 10:47 pm

My take: could it simply be that the growth in debt only slowed because HELOCs are no longer backed by CMHC?

Page 21 in the report notes a 25% drop in refinancing – seems like the real story is there?

#3 T.O. Bubble Boy on 11.29.11 at 10:50 pm

oh – and good too see that CMHC has added a whopping $1B in retained earnings to back the $40B in mortgage insurance it has added to the books this year.

how are they allowed to have a 2.5% capital ratio???

#4 Theone on 11.29.11 at 10:50 pm


#5 Dylan on 11.29.11 at 10:53 pm

Another good post!!!

#6 The Original Dave on 11.29.11 at 10:57 pm

must be Kelowna. Ground zero for Canada’s real estate correction. The amount of ‘for sale’ signs in that town looks exactly like Vegas or Phoenix.

#7 International Man on 11.29.11 at 10:58 pm

First !!!!

I think most readers would agree Canadian RE is headed for a correction. The question now is “what next?”.

Based on the Irish, Spanish and Australian experience, prices fall very little in the first year (<5% typically from peak). The 2nd & 3rd years are a doozy (20-30% dump). Since the feds had tried 1st time home buyer credits/ reno credits/ amortization extension in 2008/2009 (and we saw the lack of their success in the US), do you think the government will try to change policy once the 10+% declines are apparent? Will government try to slow the slide with policy?

#8 First Place on 11.29.11 at 11:02 pm

I was first! No fair!!!!

#9 1drs on 11.29.11 at 11:04 pm

There goes the neighborhood?Arrrrgh. The road to hell is paved with lies, damn lies, and statistics. Great post Garth. I watch the TV news and listen to the talk about the Great Escape ( Canada dodging the Bubble Bullet) and it makes me crazy. There are huge problems just under the surface, otherwise, why would CBC put an article about Bankruptcy on its online page ?I think there are an awful lot of Canadians hanging on hoping that next week they will win the lottery and things will be OK. Even in Victoria we can see the house of cards is shakey at best.
Oh, and I hope this ruins all the stupid FIRSTERS day.

#10 Bottoms_Up on 11.29.11 at 11:05 pm


#11 Not 1st on 11.29.11 at 11:08 pm

This must be okanagan. Its firesale time there. I was able to weasel out a month ago. Also sold in Calgary, just my sask residence left.

#12 Gand on 11.29.11 at 11:09 pm


#13 Jan Etter on 11.29.11 at 11:09 pm

37 months ago? My guess is Calgary.

#14 Darryl on 11.29.11 at 11:10 pm


#15 Smoking Man on 11.29.11 at 11:10 pm

Garth I’m surprised you are not on the man’s shit list. You probably are fortunately for you are famous and know a few Tories, when the Gestapo comes around in the middle of the night, they will spare you.

But this pathetic blog is contributing to unrest of the live stock, and they don’t like it. Me I just have little bit of money and good lawyers.

You see the machine wants production out of it’s cattle, It wants them dumbed down, in debt, working around the clock, (you know we are un productive gov’t said so) with no time to actually reflect and uncover where the injustice( are fd) is rooted and what needs to be done to fix it.

Bashing main street media and the gov’t. You’re getting bold man. I think I influenced that behavior in you, you learn fast grass hopper……….

O well drinking again…..I can’t function sober. No creativity, no confidence, no balls.
At leased the kids at Earl Heage got there balls back for a while, give the teachers time and they will be singing like unicks.

#16 Kilby on 11.29.11 at 11:11 pm

Speaking of condos and value…Global had a story about the “Olympic Village” tonight, apparently the ventilation is not designed very well resulting in the tenants being sick, some to the point of having to move out. They also gave figures for the number of suites occupied at around 70% but walking past the building one sees a LOT of empty ones. The city representative interviewed was very evasive.

#17 mark on 11.29.11 at 11:12 pm

Dear me, Bob and Betty got hosed

#18 MR.Lee on 11.29.11 at 11:14 pm

According to the Austrian School of Economics, Central banks cause massive investement bubbles through their credit expansion polices of low interest rates. Not that I am an avid fan of the Austrian School, however they appear to be right.

1.1 Trillion dollars, hold on to your wallets my fellow Canadians. The Feds may coma a call’in. Bail out anyone.

#19 JL on 11.29.11 at 11:14 pm

Just love reading your stuff Garth! Found you right before I pulled out of buying in flatline Montreal, read your book, moved home to Kelowna, went back to school, got a health care job in the retirement industry and now we rent and host a int’l student to pay half of that, waiting patiently. It feels great to see it all come true! My mother got licensed in real estate one year before it crashed here in the 80’s. There is not one realtor from that time that is honest about it either. Doesn’t matter I remember and I wait – thanks Garth for confirming I am not crazy!!

#20 Brew on 11.29.11 at 11:23 pm


#21 Victor on 11.29.11 at 11:25 pm

Garth, can you share what city/province Roberta and Johnny live in. I’m curious to know which market is seeing this type of activity (or lack thereof). Thanks.

#22 Vik on 11.29.11 at 11:26 pm


#23 Throwstone on 11.29.11 at 11:30 pm

they live in the 905…and Finley is a joke. Is’nt she also the minister in charge of Employment Insurance as well; who hired all the E.I. retiree’s back in 08 when claims where skyrocketing. I believe the wait times are up for E.I. claims again.

Maybe Finley is destined to be Harper’s sacrificial lamb when all goes south.

Who’s the minister in charge of bankruptcies? They will need some extra staff soon.

#24 Debtfree on 11.29.11 at 11:30 pm


#25 Angela on 11.29.11 at 11:32 pm

“After all, cheap money and easy credit is the K-Y Jelly of fiscal policy. CHMC just gives the push.”

F’n. Poetic.

Not so relevant to today’s post… Boomers. My parents, 63 currently.

Really for people who preached non-materialism… This generation seems to be the most stuff-consuming of all.

If I put a prize or collector card in the Geritol bottle they would buy it.

It was a large, promising, intelligent, questioning generation but an increasingly disappointing blip. They could have made so much more of a difference on democracy.

Instead they use up resources and remain narcissistic.

#26 Dylan on 11.29.11 at 11:34 pm

My guess is Ottawa. As my wife says, “Stupid Ottawa.”

#27 Marianne on 11.29.11 at 11:35 pm

Great post, love your blog. I’m going to guess Ft. McMurray

#28 Daniel on 11.29.11 at 11:35 pm

This will go down as one of your best lines, priceless!!!

“After all, cheap money and easy credit is the K-Y Jelly of fiscal policy. CHMC just gives the push.”

#29 Leo on 11.29.11 at 11:41 pm

It must be Edmonton.

#30 Aussie Roy on 11.29.11 at 11:42 pm

To the Aussie and Canadian “Central Banks” some free advice.

Ever thought about creating a bubble watch model using data from busted bubbled markets?. Seems a sensible place to start. Does your current so called bubble watch model show there was a bubble in the US before it burst using their data?.

Seems painfully obvious to use a known data set to create a “predictive or current state of market” model but alas if the Canadian CB is anything like the Aussie CB and it appears from their conclusions they are.

Acurate modelling of any description seems beyond their current skill set.

Show me a model that can be back tested with US data to see the bubble before it burst and apply it to our economies and then you will get my attention. Of course the results would not be the answer the CBs are seeking, so I guess this more robust modelling will never be undertaken.

#31 disciple on 11.29.11 at 11:47 pm

The window frame woodwork and the obsidian green tiles are pretty snappy. The kid on the right seems to agree with me…

The town where the market’s died… could that be Kitchener?

#32 KingBubbles on 11.29.11 at 11:47 pm


#33 Jsan on 11.29.11 at 11:48 pm

When you read the “Crap” that is constantly shoveled to the media via every group and organization that has a vested…….no, DESPERATE interest in keeping the GREAT Canadian housing Bubble inflated, remember the many quotes (see link below) that were also “shoveled” to the US media as it appeared that their housing Bubble was beginning to deflate.

Again, stop buying the realtor, real estate industry, mortgage industry, media spoon fed BS and use your own brain.


#34 ken on 11.29.11 at 11:49 pm

Little evidence of housing bubble re cmhc. US consumer confidence raises most in 8 years re bnn.???

#35 noodles 79 on 11.29.11 at 11:53 pm

This year my insurance went up by fifty percent.I have had a perfect record for over twenty years.I have talked to a number of freinds and it seems that everyones insurance has gone up drastically. I dont have to ask why it went up, because I know why.The kooks running the asylem have realized they’ve made a mistake by letting this exagerated market continue. Their letting insurance companies and gas companies go unchecked .They dont want to increase interest rates because the maket will die and our so called great banking system will look just as bad as all the rest of the worlds crooked banking systems.Theres a lot of people being fooled by the low interest rates while everything necesary to sustain a job is going up drastically. All you hear about is this great oppertunity of free money, and you can flip in a year and make a bundle.Everyone is a real estate mogul these days.The spin doctors have done their job.Everyone is a millionare,who gives a sh#%t if gas goes to the moon, who cares if insurance doubles, moneys no object!Until the spin doctors decide to play a different tune.And the tune is due for release very soon!

#36 Kevin on 11.29.11 at 11:57 pm

“Frosty?” I’m in Saskatoon. When it hits -40 with a wind of 50km/hr then maybe a bit. But not now.

I just wanted to say something about this comment,
“And most of this $1.1 trillion is financed at some of the lowest interest rates in history (thanks to the feds), which will not endure.”

From the time when interest rates were dropped to all time lows at the beginning of the 2009 until now, total mortgage credit has grown by 20%.

These low interest rates are a gift and one would think that if Canadian borrowers are “prudent”, Canadians would not be gobbling up debt at that pace but paying it down.

#37 Aussie Roy on 11.29.11 at 11:58 pm

Ausie Update

Australia’s house prices are falling at an accelerating rate according to figures out today

Back by popular demand, here is my chart on the respective rates of decline for Australian housing now versus the 2008 experience (which obviously reversed) and the US experience.

Recourse mortgages don’t prevent housing busts

Market data released yesterday by the Real Estate Institute of Tasmania shows there was a 3.2 per cent reduction in house sales for the September quarter on the previous quarter and a 4.8 per cent drop in sales for the year.

Nearly two-thirds of all sales were in the $250,000 to $450,000 price range

COST of living pressures have been blamed for keeping Aussies at home this summer break, with almost half those who do manage to get away staying with family and friends to save money.

Maybe because it takes too much of your wage to pay that mega mortgage.

#38 Nostradamus Le Mad Vlad on 11.30.11 at 12:04 am

The Darwin Awards are out! These Annual Honors are given to the persons who did the human gene pool the biggest service by killing themselves in the most extraordinarily stupid way.

You may recall that last year’s winner was the fellow who was killed by a Coke machine which toppled over on top of him as he was attempting to tip a free soda out.

This year’s winner was a genuine Rocket Scientist . . . no jive! Read on and remember that each and every one of these is a true story. The nominees were:

Semifinalist #1
A young Canadian man, searching for a way of getting drunk cheaply because he had no money with which to buy alcohol, mixed gasoline with milk.

Not surprisingly, this concoction made him ill, and he vomited into the fireplace in his house.

The resulting explosion and fire burned his house down, killing both he and his sister. (Another tomorrow.)

“This is the kind of stuff you expect from Re/Max or LePage, but not from the country’s largest bank. Nor from the government, sadly.” — I disagree, esp. as H – F have proven themselves lying politicos, and C used to sit next to H. Paulson at GS.

H – F engineered the Cdn. massacre, but won’t be held accountable. The less C says, less attention is paid to him.

For a better understanding, read #15 Smoking Man — “But this pathetic blog is contributing to unrest of the live stock, and they don’t like it.

“You see the machine wants production out of it’s cattle, It wants them dumbed down, in debt, working around the clock, (you know we are un productive gov’t said so) . . .”

The machine is the fed. and prov. govts., offloading as many costs onto taxpayers as they can, we are the dumb sheeple who stand blindly around, not bothering to do any research by making our own lives slightly better.

All these overpaid jackasses are in collusion, preparing themselves for that moment when the west slides. CMHC is backed by the taxpayers, but who backs the taxpayers?
Donations Down One domino effect of people not having enough income; This is Britain. NAmerica is next (the Mirror is a left wing rag, the Sun right); BoA Close to US$5, downgraded again; 1:09 clip US Fed and GS run the WH; Mormon Economics They’re preparing themselves for something. The rapture? Check with Harold Wotshisname; Deciphering one plan, while creating another; EU demands Germany rescue. What if Germany refuses?
Kapp vs. Mosca Gone viral. Comments at the end are good! Leaders In war, depop. and the like; Expelled “If the Ambassador was expelled, then the building he used to use is technically no longer an embassy, so Obama’s screaming about Iran’s “diplomatic obligations” is moot.”

#39 earlymidlifecrisis on 11.30.11 at 12:06 am

Very disturbing, but it makes me feel a bit better about the landlady refusing to pay for window coverings that actually fit the window….. Sigh. My guess is port moody or PoCo- or one of those east of van suburbs. Oh no 3+ guesses, not fair!

#40 Michael on 11.30.11 at 12:07 am

My guess is Calgary!

#41 Ammo & Viagra on 11.30.11 at 12:10 am

Victoria ?

#42 Left Vancouver and Happy on 11.30.11 at 12:15 am

Does it really matter that the debt growth has slowed? Isn’t the more important point here that it’s still growing, given the level it’s already at? Where is the sanity?

#43 Van guy smokin now on 11.30.11 at 12:16 am


#44 Scooter on 11.30.11 at 12:18 am


#45 john m on 11.30.11 at 12:22 am

Great post Garth.

#46 peter on 11.30.11 at 12:26 am

Of course the Canadian media and Canuck politicians will say they never saw it coming… that is another recession. Watch as Germany refuses to bailout Europe, China’s housing market and economy falter and finally gov’ts around the world reduce spending. The US is about to cut military spending and the last two times they cut military spending, 1990 and 1973, their economy went into a deep recession.

#47 Onemorething on 11.30.11 at 12:27 am

Who care’s where their from, a SH*T Storm is a coming!

Would be surpised if that deal closes at all! Long closing means exit strategy for the buyer!

#48 Fractional Reserve on 11.30.11 at 12:28 am

If banks do not create money out of thin air Garth how do you explain that according to the CDIC’s 2010 Annual Report, CDIC protected $590 billion CAD in total eligible deposits while your graph shows well over a trillion dollars in mortgage debt. This is only mortgage debt, the banks also have other loans outstanding so the number is much greater than a trillion dollars. Where did this magical extra $500 billion come from if not from thin air?

#49 SophieZombie on 11.30.11 at 12:28 am

Edmonton ?

#50 Grooby on 11.30.11 at 12:29 am

… My guess is Pentiction. My parents got smashed there as well, and are holding on for ‘better times’.

#51 Foggy on 11.30.11 at 12:31 am

“Where do Roberta and Johnny live?
Guess. The winner gets a lovingly-autographed, free book. — Garth”

Given the pricepoint it rules out Van and Vic.
So either Edmonchuk or Calgary. I’ll guess Cowtown…

#52 Gord In Vancouver on 11.30.11 at 12:31 am

Not a great day for overextended Vancouverites!

ICBC seeks basic rate increase

#53 E.G. on 11.30.11 at 12:34 am

Toronto. Should be Vancouver soon enough.

#54 Unoccupy Wallstreet on 11.30.11 at 12:35 am

Nice post Garth.

#55 JohnnyBravo on 11.30.11 at 12:36 am

GF readers are getting important information long before the mainstream media will be forced to capitulate to reality. Thanks, Garth.


What Garth doesn’t say explicitly is that a slowdown in the growth rate of mortgage debt does not mean that the total amount of mortgage debt is declining. As long as the growth rate was positive, total debt would just be rising at a slower rate. This type of statistical spin is used by the media all the time to distort reality.


Speaking of reality… Spin from banks. Spin from governments. Spin from the media. Throw in cheap money and it’s no wonder Canadians are do dizzy with debt. Is there ANY institution that we the people can still trust? Seriously, ask yourself this question.

When future generations look upon the people of our times, I don’t know if they will laugh or cry. But I’m pretty sure it will be one extreme or the other. It’s one reason more and more people are trying to do something about it…


People like Dan Matthews. I watched “Oh Canada! Our Bought and Sold Out Land.” It’s flawed, yes, but it has merit. Kudos to the young film maker for taking action.

#56 Habs76-79 on 11.30.11 at 12:39 am

Look! All the RE and Credit pumpers here in Canada are all saying 100% the same verbal crap and lies that their cohorts in the Excited States said from late 2006 through 2008! And still say even today.

Look it up if any of you do not believe me. It’s as if the Canadian talking heads from government, to bureaucracies to MSM were forwarded the US scripts from those years and like parrots speak these words.


Almost each day just on this blog site itself come real world articles, anecdotes and facts supporting our RE meltdown beginning and our credit bubble blowing up!

It’s likely going to be worse here than in the USA, why? Because too many Canucks are swallowing the distortions, lies and even fraud. Our govt. has an even greater hold on us than the crazies in govt. in the USA. Our govt bureaucracy is worse more intertwined with us than the USA bureaucracy is with their people. Our main streammedia is even more cronyized and in bed with the govt. and financial industry than the MSM was and is in the USA. Result our RE bubble and credit bubble per capita is bigger and thus will correct even worse than in the USA and other industrialized peers of ours.

The USA is our closest fact to base our world on as a peer and has been in a ground busting crash for nearing 5 years now and will likely bounce along if not get worse for 20+ years on terms of any real shine to a real world economy.

China has its citizens now growing in debt at an alarming rate. More and more info on its RE is showing it busting apart to and its a Paper tiger folks, full of cronyism and fraud.

Europe will be on the brink for 2-3 decades to come if not longer.

To think my (and yes it is my BELOVED) nation that is at best really just a middle power to even just a fly speck will escape all this is MYOPIC AND STUPID. Only the most myopic, arrogant, greedy and even fraudulent bastards in this nation will keeping pushing the proverbial string up a hill any longer.


#57 Krysta on 11.30.11 at 12:39 am


#58 Theresa on 11.30.11 at 12:40 am

My guess is Mississauga.

#59 bah on 11.30.11 at 12:40 am

For an autographed book my guess is Toronto.

#60 Mr Buyer on 11.30.11 at 12:40 am

You will have to forgive me for seeing the real estate as investment types being the vultures (most of them may well have been unwilling vultures). The situation is absolutely nuts.

#61 timmy on 11.30.11 at 12:46 am

maybe you are finally right? lol

#62 Dr.NickRiviera on 11.30.11 at 12:47 am

My official guess would be: Victoria.

My “just for fun” guess is… Fort MacMurray!

#63 Phil on 11.30.11 at 12:47 am


#64 Dr.NickRiviera on 11.30.11 at 12:51 am

errr… make that *Fort Mc”Murray*. They call it Fort Mac but it’s really a Mc.

Now I’m thinking I should have gone with Kelowna for my official guess! Oh well… too late.

#65 Jane on 11.30.11 at 12:54 am

Calgary, I bet.

#66 BC Bring Cash on 11.30.11 at 12:54 am

H and his Economic Action Plan Super Heroes F, C, and Diane Finley etc. are running out of bullets to keep the phony GDP numbers game up. GDP numbers were propped up by running massive deficits. By fleecing the vulnerable with easy credit to drive RE into a huge bubble also contributed to the GDP farce. What will be the next great distraction? The glorifying of the military during sports events? Militarizing the North? Patriotism ra ra ? Where is is the steady hand on the tiller? Its all an illusion folks. All lies to keep faithful coming back for more. The true believers want more BS flowing. H is the PM (Economist). Great qualifications but why are we so much in debt, wages declining and our collective standard of living tanking. Its a good thing an Economist is running the show. Or is it?
As Garth pointed out the tax payer is on the hook for the Canadian Sub Prime Mortgage scam, F is running around the world bragging that Canadian Banks weren’t bailed out. Of course they were by the CMHC guaranteeing these risky mortgage deals and taking the Banks off the hook.

#67 Saeid on 11.30.11 at 12:56 am


#68 Scalgary on 11.30.11 at 1:03 am


#69 Reality check on 11.30.11 at 1:07 am

Roberta & Johnny are in Canmore.
Market is underwater here and the sharks are circling smelling blood.

House round the corner just sold for $1.17m, listed at $1.595m 356 days ago.

#70 GTA Girl on 11.30.11 at 1:08 am

Milton Ontario, is my guess.

And I’d love a signed copy of your book. Would pick it up after a good motorcycle ride. Meet you at the coffee shop in Belfountain….

Damn…it’s December

#71 GTA Girl on 11.30.11 at 1:12 am

Smoking Man… You don’t know how correct you are about the government now.

Wish Canadians would wake up.

If you follow the personal Twitter accounts of many Canadian journalist’s, you can read their frustration and anger at the governments attempts to shut down any reporting.

From my own personal experience, I only hope the bad guys get caught.

#72 Johnny on 11.30.11 at 1:17 am


#73 Nick from Winnipeg on 11.30.11 at 1:22 am

Do Roberta and Johnny live in Winnipeg? I sure hope it’s Winnipeg.

#74 Van guy smokin now on 11.30.11 at 1:28 am

This is the truth though. Sticky market out here still. But sales have slowed slightly over last month.

#75 Davey Boy on 11.30.11 at 1:30 am

Edmonton is my guess, with Kelowna a close second.

#76 Qazmer on 11.30.11 at 1:33 am

“Guess. The winner gets a lovingly-autographed, free book. — Garth”

Toronto, the Condo Capital of North America

#77 Johnny in Ab on 11.30.11 at 1:33 am

I am guessing Victoria. I read the article from CMHC. “growth in mortgage debt slows” How is this good news. The amount is not declining, the pace of borrowing is slowing. Quoted in the globe and mail

“Mortgage assets held by the chartered banks, meanwhile, hit $563.5-billion in October, up from $561.2-billion in August. But, illustrating how growth has slowed, that number was $500.2-billion in October, 2010.

It can not grow forever. This would be good news if the amount borrowed was declining. Canadians are still taking on more debt, not less.

The title of this article is misleading at best. Since when do journalists have less integrity than used car salesmen?

#78 TJ on 11.30.11 at 1:36 am

Please more posts like this that help expose the CHMC for what it is. The enabler of the biggest finacial disaster in Canadian history waiting to happen.

#79 Alberta Ed on 11.30.11 at 1:37 am

Hmm… sounds like delusional Canmore.

#80 Jody on 11.30.11 at 1:44 am

That had to be in Calgary, we really are that stupid about prices and that pissy about what our neighbours sell for, hell, I’m sure some twits round these parts would like a bylaw stating how much below the purchase price you could sell your property. I am so gonna say I told you so when the bottom drops out, they bloody deserve it for being so stuck up and smug about it.

#81 Keeping the Faith on 11.30.11 at 1:44 am


#82 Johnny on 11.30.11 at 1:45 am

When are the Politicans going to address what is really happening in this country….they are screwing over the citizens and the citizens are too nieve to see that Canada is going to end up just like the rest of the world. I’m just flabbergasted that everyone keeps turning a blind eye to reality.

#83 Boomer on 11.30.11 at 1:46 am

Hey Smoking Man! Did you mean “Earl Haig” as in the public pool in Brantford, On.? Is that where you hang out? My, My, very interesting!

#84 Nostradamus Le Mad Vlad on 11.30.11 at 1:55 am

8:07 clip Jim Cramer finally gets it; Politicos We elected them, so we get what we deserve (not much); The Removal of Money from the system; China pulls out of partnership (smart).

Ron Paul and the Gold Standard, OECD outlook, Arm & Hammergeddon, George Osborne again, 34:55 clip Adam Ferguson on HI, Speaking Pix, Deleveraging, Bloomberg figures, UK gilt editions and Three min. clip Bernanke’s fudging while Rome burns.
10:07 clip GMOs — What are we eating? But EU High Court says France’s ban of GMOs is wrong; Flying to Work in your own own drone; Syria Unless Russia and / or China steps in, it will be NATO – US – UN genocide again; 30 Signs A clearer understanding of why Harper & co. want new prisons.

#85 Aaron - Melbourne on 11.30.11 at 1:55 am

The traditional method of calculating housing affordability is outdated and should be considered in conjunction with other ways of weighing up whether people can afford their mortgage or rent.

That’s the finding of a new study from the Australian Housing and Urban Research Institute, which also concluded that some households could afford to spend more than half of their income on mortgages or rents, while others struggled when housing ate up 30 per cent or less of their gross earnings.

“Some household types can easily afford 50 to 60 per cent of their household income going on rents or mortgages and still have enough left over,” says Terry Burke, lead author of The residual income method: a new lens on housing affordability and market behavior.
“enough left over” to service the mortgage
not to have any form of life let alone a retirement

I think I’m going to start up a company making some kind of soylent kibble meeting all the nutritional requirements for old folks.

It may be made of recycled Chinese newspapers (or the Real Estate section of your local paper) with a healthy amount of vitamins derived from circus animals.

Who’s with me?

#86 604 on 11.30.11 at 1:57 am

I know some people on this blog can’t wait for all these people who “invested” in real estate to meet their fate and lose a whole bunch of money. In fact some people write that these people deserve it and have it coming. Although I agree they do have it coming to some degree as they probably listened to some very poor advice and information, got caught up in the granite and SS, and also greedily were hoping to cash in the real estate market, not to mention completely arrogantly ignoring what happened down south.
But they are still humans doing what they do best-making mistakes and unfortunately those who should be made to pay the price dont (realtors, CMHC, banks) and end up being dumped on the rest of us tax payers.
And realistically why people think we are immune to what has happened in the states?? We were lucky to have that happen there first and possibly take a minute and think about potential consequences of our housing market.
It is astonishing and shocking to me at people’s lack of common sense- I am not sure how to think of these people. Should I pity these people and just be glad I have half a brain.
It seems as usual there needs to be strict restrictions, limits, laws and boundaries etc to save people from themselves and stop making stupid choices.

#87 Maya on 11.30.11 at 2:05 am

I guess it’s Calgary. But I am expecting the same in Vancouver soon….

#88 Renters Revenge on 11.30.11 at 2:12 am

I see the stall in debt growth as a warning signal and cause for alarm, not a positive signal at all. The economy needs ever growing debt in order pay the interest on existing debt. If debt levels are no longer increasing that indicates deleveraging which will be hugely negative for the economy as a whole.

#89 Johnny on 11.30.11 at 2:18 am

Lessons. No hubris here.

Another lesson: Don’t buy a place where building code stipulates that electrical outlets on the ground level be raised up the wall due to seasonal flood risk.

Underwater indeed.

Thanks for the help righting the ship, Garth. Better late than…later.

#90 Edmonton Dave on 11.30.11 at 2:40 am

I’ll guess Calgary, sadly, someone else has also guessed it. You just might have to give away a few books to all the lucky readers who got it right, Garth. I hope I’m right. Always an interesting daily read with a great pic for amusement. Thanks.

#91 Bailing in BC on 11.30.11 at 2:47 am

Yay I love competitions!


#92 DML on 11.30.11 at 2:54 am

U.S. home ownership headed to record low of 62%

#93 AACI Home-Dog on 11.30.11 at 2:57 am

Fraser Valley of BC….Surrey or Abby…?

#94 Property Manager on 11.30.11 at 3:09 am

I sold real estate from 1988 to 1997. I moved to Victoria in 1991 and listed places a bit higher, reflecting my experience in the other place in BC I came from where prices were rising. The other realtors gave me a bad time, saying I would never get the price – at that time $125K for a 3 bed bungalow, I listed at $139K.

CMHC had raised the borrowing limit from 125K to $175K and the prices started going up approximately $1k per week. Didn’t take long for my listings to sell. After a year, all the 3 bed bungalows were selling for $179K and I was busy busy. CMHC has raised the limit consistently since then. I’ll bet you can track the bubble to CMHC’s limits…

#95 mark on 11.30.11 at 3:15 am


#96 the Phantom on 11.30.11 at 3:16 am

Garth, blog people (and for you lurkers…I’m writing for you too:-))

Wow would it ever SUCK to be Roberta and Johnny. In this context, Garth, would your position be to sell now, cut your losses and attribute the debacle to a lesson well learned. I can’t see how continued ownership and steady erosion of the asset value would be the correct approach to take.

Could they write that loss off against their annual income as a capital loss? I am still rather ignorant of those taxation issues, unfortunately. If there are CGA’s, CA’s or people in the know, I would welcome your input.

Townhouse??? $499,000 three years ago???Could it be within the Kelowna region? Just wondering. Anyway all, have a grand night. Here in the “brown specks of the prairies (as Garth kindly refers to them) the weather here is a balmy -4 C degrees tonight. Not too bad at all. Reminds me of the winter of 1997 here when I was installing vinyl siding on the house in early December with no fracturing problems because it was only -2 C.

I suppose if we were to only look at the narrow perspective of the weather, it really IS different here. Always have to look for the bright side.

the Phantom

#97 Taking Stock on 11.30.11 at 3:18 am

Garth, is the town Edmonton? I will tell you where to ship the book. It’s going to be a collector’s item for sure!

#98 bcpaul on 11.30.11 at 3:36 am

But not a lovingly-autograph , just a regular autograph, thx.

#99 Humpty Dumpty on 11.30.11 at 3:48 am

The inherent vice of capitalism is the unequal sharing
of the blessings. The inherent blessing of socialism is the equal sharing of misery.

Winston Churchill

Imagine the bath water in 2012.

#100 Vanman on 11.30.11 at 4:23 am


#101 Bug on 11.30.11 at 4:36 am

Cranbrook ?

#102 Peter NYC on 11.30.11 at 5:48 am

I am meeting F in person today here in NYC. He is part of an “invest in Canada” tour. Any question I should ask him??

By the way Toronto re seems to still be booming what gives??

#103 Aussie Roy on 11.30.11 at 6:21 am

Steve Keen on RT.

Very fitting todays article, are there any models that can predict where we are headed.

#104 VancouverBoy on 11.30.11 at 6:23 am

I would guess Victoria is where the couple isfrom.

#105 scib on 11.30.11 at 7:03 am

Careful Garth, Good thing we live in Canada where you can still take a picture of a baby in the bathtub without becoming a tier 3 sex offender like in the USA.
You can take a pee outdoors or sit on a park bench also without becoming a sex offender in this country. Thank heaven for the little freedoms we have.
Unless H has his way and harmonizes all our laws with the US.
One 33 year old woman is a life long sex offender because she was caught having sex in high school during a classroom movie. She lives with her husband and kids now but they have to live out of town more than so many miles from any school. She can barely find anywhere to live!
See this link to see all the ways you can become a sex offender. It is mind boggling.

#106 House on 11.30.11 at 7:47 am

A Million Million should get more emphasis on the chart.

#107 Bob on 11.30.11 at 8:13 am


Instead of offering a free book, how about an invitation to the bunker…?

The winner can help you load rounds into your 9MM clips…

I have Amazons for that. Can you fence? — Garth

#108 fancy_pants on 11.30.11 at 8:36 am

Since Toronto has been chosen and it smells like a possible western kind of experience, I’ll aim my guess at a yet to be selected Alberta town… I’ll go with Red Deer.

Sorta co-owned a condo in Red Deer way, way back in the early 80’s (my siblings and I owned 10% each , my Dad owned the rest)

#109 Canadian Watchdog on 11.30.11 at 9:11 am

Hopefully someone read my post the other day about the Bank of Canada having to print through FX intervention.

#110 AJ on 11.30.11 at 9:23 am


#111 Canadian Watchdog on 11.30.11 at 9:25 am

Here it is

#112 Fractional Reserve on 11.30.11 at 9:28 am

From the book by the late Canadian economist John Kenneth Galbraith, Money: Whence it Came Where it Went.

Pages 24, 25: “The process by which banks create money is so simple that the mind is repelled. Inevitably, it was discovered that the original deposit still stood to the credit of the depositor but there was now a new deposit made from the loan of the original deposit. Both deposits could be used to make payments, be used as money. Money had been created”.

The above example shows how banks create money. This process is multiplied many times over so that from an original amount of say $1 million the banks can loan out $10 million. This link below multiplies the above process to show how $1 million on deposit is loaned out to the tune of $10 million.

Will you still stick to your thesis that banks don’t create money Garth and will you dismiss the late John Kenneth Galbraith, probably the most prolific writer on economics in the 20th century also as someone who didn’t know what he was talking about?

Banks do not create money. — Garth

#113 O'Ryan on 11.30.11 at 9:30 am

Although I live in Kelowna,and we are just a nasty mess here,my guess is Kimberly BC.

#114 Mister Sanity on 11.30.11 at 9:30 am


#115 Aussie Roy on 11.30.11 at 9:30 am

Aussie Update

A key index shows house prices fell for the 10th consecutive month in October.

Macquarie is predicting a white collar recession in Australia

#116 Mister Sanity on 11.30.11 at 9:32 am

BTW people read the comments before you post “Victoria” again. There’s no point saying it if you’re anything other than the 1st person to guess it :P Play the odds and pick the biggest unguessed city! I couldn’t be bothered, but Vaughan sounds like a reasonable guess.. Nice try to the guy who guessed “GTA” – if that’s valid, I guess “Canada” –> I win!

#117 Chris no longer in England on 11.30.11 at 9:41 am

“Imagine how different the world would be if the feds didn’t force taxpayers into guaranteeing every high-risk, high-ratio mortgage. Twentysomethings with no money wouldn’t be able to borrow money at the same mortgage rate as people who are actually creditworthy, because lenders would be on the hook for the risk.”


#118 Kevin on 11.30.11 at 9:44 am

@Fractional Reserve:

“Where did this magical extra $500 billion come from if not from thin air?”

The money did not come out of thin air. Before the bank could lend it, someone else had to deposit it.

A brand-new bank with nothing in its vault cannot lend any money. It cannot make money “out of thin air” and lend it. It must be deposited first.

#119 thinktank on 11.30.11 at 9:46 am

hmmmm .. where could the price of real estate fallen so dramatically … hmmm … I dunno – my guess –
Attawapiskat ?????

#120 Canadian Watchdog on 11.30.11 at 9:50 am

The latest from Bank of Canada:

Coordinated Central Bank Action to Address Pressures in Global Money Markets

“The purpose of these actions is to ease strains in financial markets and thereby mitigate the effects of such strains on the supply of credit to households and businesses and so help foster economic activity.”

Enjoy your savings while you can; It won’t be worth much.

#121 Fractional Reserve on 11.30.11 at 9:55 am

#112 “Banks do not create money. — Garth”

You can stick to your assertion till the cows come home to the bunker Garth but it is one thing to dismiss Paul Hellyer as a whacko but when the most famous economist of the 20th century and a good ol Canadian patriot whose services where requested by the US government during the Great Depression states that banks create money and you say they don’t well then I think it’s time you wrote a bestseller on Money that corrects the fallacious ideas of someone like Galbraith. To think Galbraith spent all those years in economics and didn’t even know how money was created! What a fool! Thanks for pointing this out to me Garth!

#122 Marc L on 11.30.11 at 9:59 am

A shame….

Central Bank Pumping More Money to Improve Credit for Families.

#123 stevenson on 11.30.11 at 9:59 am

7.5% in January, peaked at 8% in April (the spring real estate rush), and dipped to 7% in September

The difference between these months are similar every year. Is this is a coincidence or is it actually seasonal activity? Forget the fact that it happens every year.

#124 newbee on 11.30.11 at 10:11 am


#125 Oasis on 11.30.11 at 10:13 am

Banks do not create money. — Garth

and what has the Fed been doing? or the Swiss central Bank.. or today, with all this liquidity.. they just created the money out of thin air.

bonds will collapse. nice double top there. you take your profits yet…

#126 Sam j on 11.30.11 at 10:15 am

Richmond hill Ontario

Please send the book ASAP :-)

#127 Ret on 11.30.11 at 10:16 am

Many Canadians believe that the Harper’s “right wing agenda,” will doom the country. The rhetoric doesn’t match the reality.

Preach from the right, but govern from the left. Diane Finley knows the game. (Rob Ford is a rookie in T.O. but he’ll too learn how to play the game.)

Cash for all through CMHC backed mortgages, Canada Student Loans for beer and fine arts degrees and show up at the airport immigration policies will keep Harper with his right wing socialist agenda in power. Confused yet?

Look for another election just before this housing thing blows apart. Until then, keep housing markets frothy and don’t spook the electorate.

#128 Bob on 11.30.11 at 10:28 am

Here is a quick synopsis of my recent real estate experience. Recently this past month, the wife and I sold our condo in Mississauga to a HAM couple for 99.3% of our asking price in less then 3 days…we used a realtor. The closing is at the end of the month and we are going to rent somewhere in Peel region for the time being and see how much this slow market melt is widespread and to what depth across the GTA.

We have been looking for a SFH but prices in the GTA are very sticky and not budging from their high level. Forget Mississauga/Brampton…a new SFH is clearly unaffordable and sold almost as soon as it goes on MLS. I’m tuned in fairly well to the immigrant Indian community in this region and I still shake my head at how these new permanent residents/Canadians can afford $500K/$600K/$700K homes when their current employment prospects are marginal at best. The easy credit/cheap money here in the GTA is like a siren call to these folks from the old country where home loans run to around 12% and higher for a fixed loan rate…big difference, n’est-ce-pas?

Have looked in Stoney Creek, Grimsby, and Beamsville in the Niagara region and are quite taken aback at the high real estate prices in these areas…although things have slowed down in the past three months…a lot of seniors in this region are holding out for that “higher” price and some places have not moved in six months.

The odyssey continues…

#129 Steady Eddie on 11.30.11 at 10:36 am

Mo dollas…. fed just bailed out Mark Carney and bunch of other central banks…

AND banks do create (debt) money….
“Commercial banks and other financial institutions provide most of the assets used as money through loans made to individuals and businesses. In that sense, financial institutions create, or can create money.”
the remainder (95%) being “created” by commercial banks through the process of fractional-reserve banking.

Banks can create credit, of course. Not money. — Garth

#130 Van guy smokin now on 11.30.11 at 10:39 am

Wow! Still nobody guessing right? Well it’s a boonie town for sure. Grand Forks? Ok Falls? Osoyoos? Vernon? It has to be BC

#131 Junius on 11.30.11 at 10:47 am

#104 Aussie Roy,

Thanks again for the link to Steve Keen. He is one of the few economists who really understands what is going on.

Did you catch him on BBC’s Hardtalk? I can’t find the link but he was given a very hard time as is the custom. I think he held up well but his prescription is a bit shaky.

In any event, Canada doesn’t have a Steve Keen. Fortunately we do have a Garth Turner.

#132 pbrasseur on 11.30.11 at 10:47 am

“But forget that. CHMC now exists solely to grease real estate and, apparently, to lie about it.” – Garth

Well said.

The behavior of the Canadian government in this matter is an outrage!!!!

My guess: Calgary

#133 on 11.30.11 at 10:49 am

#125 there is a difference between central banks and chartered

#134 SLN on 11.30.11 at 10:56 am

@ #128 Bob,
Same thing here, sold for 93% asking a few months ago (didn’t use a realtor though) and waiting out the market to buy something better for the same money. We’re amazed at how sticky prices are in Eastern Ontario, too. We’re a small city surrounded for hours in all directions by smaller backwaters but still, the prices here are too high for what is offered.

this town is old money, strong divide between haves and have-nots, and the haves clearly want to ‘keep.’ I’ve never seen so many houses in this area up over the 450,000 mark. The only ones that are selling are those for less than $270 but they are old dumps that need a lot of work or they are particle board boxes. I’m not willing to go there.

— Roberta And Johnny wouldn’t happen to be in Kingston, would they? I wish.

#135 Ex-Cowtown on 11.30.11 at 10:57 am

So all the banks in the world are now all in on trying to stop the Contagion. Now I’m concerned……

The market, being irrational thinks this is a good thing. Everyone blows their load in one last orgy of interbank lending.

Reminds me of when a good friend of mine was preparing to declare bankruptcy. That week everyone got a steak dinner and a tank of gas on him (well, American Express actually) because the price was going to be the same, so might as well go out in style.

I must be the Greatest Fool, as I can’t see how any of this is positive. The market should be running for the hills.

#136 Aussie Roy on 11.30.11 at 11:04 am

Fractional Reserve on 11.30.11 at 9:28 am

From the book by the late Canadian economist John Kenneth Galbraith, Money: Whence it Came Where it Went.

Pages 24, 25: “The process by which banks create money is so simple that the mind is repelled.


Great quote, FRB.

FWIW, people except banks make loans (create debt) based of their deposits but don’t except that the proceeds of these loans become a banks new deposit, which can then become additional loans. Or maybe they do but don’t consider this is creating money?.

How this system could not create additional money (available credit backed by new deposits), when the loan proceeds becomes a deposit, to me at least is a puzzle.

Anyway different opinions are great, wouldn’t life be boring if we all thought the same way.

I think thats it for me on this subject. As we sometimes say down here ” no point flogging a dead horse”.

#137 The thing in the basement on 11.30.11 at 11:04 am

49 FR (and posts following) Don’t ask the question “where did the money come from” but rather “where did the money go”. Obviously not to CDIC insured deposits. Check the balance sheet of any FI and see how the loans v deposits compare.

The rest of the debate is more philosophical than mechanical. I would have to say they do create “money” simply because I can do basically everything with my
bank account that I can with cash. Will you take a

#138 Canadian Watchdog on 11.30.11 at 11:06 am


Any thoughts on why Bank of Canada would hire S&P’s David T. Beers as a special adviser? He was the man behind the U.S. downgrade.

#139 eaglebay - Parksville on 11.30.11 at 11:07 am

#97 the Phantom on 11.30.11 at 3:16 am

Capital losses can only be used against capital gains for income tax purposes.

#140 Sean on 11.30.11 at 11:14 am

gotta say cowtown… although i think about 100 people already have

#141 disciple on 11.30.11 at 11:15 am

#128…Bob’s your uncle… why do you have such an insatiable desire to buy a home? Especially at these inflated prices you would have to be an utter Neanderthal to even consider it. Just rent you fool until the dust settles. Look for 80% declines across the board, back to pre-1990 levels.

I am not of the opinion that RE is local, especially in our globalized society. For someone selling their digs in Stoney Creek, it doesn’t take a rocket scientist to find out what homes are selling for in Toronto or Hamilton and to price your asset along reasonably comparative estimates. What, can you see the demarcation lines in the fields between the GTA and Southwestern Ontario? One foot in highly inflated RE and one foot in reasonably priced RE? I think not. Those boundary lines are IMAGINARY and belong only on maps. Don’t be a fool, there are no “bargains” to be found unless you have a weakness for splintering floorboards, turn-of-last-century cement-work, dark-yellowed tiles, and well-water.

#142 Peter (NYC) on 11.30.11 at 11:15 am

Got to shake hands with Hon. Jim Flaherty this morning at the Toronto Financial Services Day New York 2011. He spoke for a bit and then spoke on a panel. My question to him was “Are you concerned that the massive fiscal and monetary stimulus applied (in Canada) post crisis has let to a housing bubble across Canada especially in places like Vancouver, Toronto, Kelowna – as chronicled in Garth Turner’s blog … have you read his blog ?

his answer

“I know Garth … I know Garth (smiling) …I haven’t read his blog … lately. Overall I’m not concerned except in the Toronto and Vancouver condo markets. Alot of that is foreign money … cash … so I’m not concerned from a CMHC perspective”.

At least he smiled. — Garth

#143 Rich Renter on 11.30.11 at 11:17 am

Irish real estate prices have dropped 45% on average since 2007. The only life support for Canadian real estate is the Canadian govt.

#144 bill on 11.30.11 at 11:20 am

delta bc….. a friend is in a very similar predicament .

#145 disciple on 11.30.11 at 11:21 am

Only God creates money. YOU are money. Your labour and technology creates and IS money. Central and “chartered” banks can put a price on that money and place ridiculous demands on that money (you), but whether you choose to obey them or rather seek God, that is your choice… The original sin is this, placing value on nothing, and ignoring everything that is valuable. Paradise Lost can be summarized as the LOSS OF APPRECIATION for the Bounty of Beauty all around us. This leads to EVIL… and bankers…

*Sigh.* — Garth

#146 Soylent Green is People on 11.30.11 at 11:23 am

Please don’t publish pics of naked children. They tend to get stolen by pedos and photoshopped ala Sandusky and then traded online.

You just made a troubled world a little more so. — Garth

#147 Soylent Green is People on 11.30.11 at 11:28 am

I don’t know what to make of below… anyone? anyone?


repost from Neale Croucher – our government says one thing and does the opposite. Say hello to our new direction with respect to increasing our debt exposure to the failed banking industry in the EU.

Canada will now ease (read relax) our position on throwing good money after bad. Oh well no surprise there. That about face only took a week, hahaha.

PS; Markets should see some gains now…for about a week till reality kicks in again.

#148 JakeTheSnake on 11.30.11 at 11:29 am

My guess is Tel Aviv Garth.

#149 Bob on 11.30.11 at 11:35 am


“Especially at these inflated prices you would have to be an utter Neanderthal to even consider it. Just rent you fool until the dust settles. Look for 80% declines across the board, back to pre-1990 levels.”

Thanks for your words of Pleistocene wisdom. Off your meds today…?

#150 Aussie Roy on 11.30.11 at 11:43 am

Junius on 11.30.11 at 10:47 am

#104 Aussie Roy,

Thanks again for the link to Steve Keen. He is one of the few economists who really understands what is going on.

You’re welcome, will see if I can find the interview you mentioned.

Funny but here in Australia Keen is dismissed and never appears on local TV, he really has quite a low public profile. I would say our host Mr Turner is probably better known in Canada than Steve is here in Australia.

It is great to see Steve gaining the recognition he deserves overseas, pity Aussies don’t realise what we have.

#151 Soylent Green is People on 11.30.11 at 11:45 am

Recent judicial decisions trivialize Canadian privacy rights.

Cavoukian also criticized the federal government’s planned “lawful access” legislation — Bill C-50 and Bill C-51 — which will amount to a major breach of rights and freedoms.

“We are talking about the expansion of surveillance without judicial authorization. THIS SHOULD SCARE YOU.”

#152 Snowboid on 11.30.11 at 11:50 am

#61 Mr Buyer on 11.30.11 at 12:40 am…

From the Valley of the Sun – the vultures leave around late September and return in March after overwintering in Mexico. They had an unfortunate habit of circling us anytime we sat in the community pool, leading us to wonder if they knew something we didn’t!

On a more serious note, talked to a new neighbour who works for the Bank of America. She said most of her business is helping Canadian investors as they set up LLCs for their RE holdings here. Her most recent customer was from Vancouver Island – bought seven homes here!!! They are so happy for the business I don’t have the heart to tell them the days of Canadian money are numbered!

Found out from another BC neighbour that there are two more Canadian owners within a block of us – haven’t met them yet – both from Alberta!

Have to run, as I need to find some long pants – remnants of storm from Pacific Northwest will hit us next couple of days – highs down to 16C, might even need a jacket!

Funny to watch the resident Phoenicians when the temperature is below 18C, they put on parkas, mittens and scarves!!

Put up the Xmas lights last week in 26C weather, fun wrapping the palm tree, cacti and agave – first time in my life I put up lights in a T-shirt and shorts!!

#153 Van guy smokin now on 11.30.11 at 11:55 am


Even this guy is now thinking like you.

#154 Form Man on 11.30.11 at 12:03 pm

excellent post today Garth !

a lot of guesses for Kelowna. Where is DA to ride to K town’s defence ?

#188 yesterday
no answer from westernman, so he has chosen to be a simpleton……

#155 kc on 11.30.11 at 12:05 pm

how about….

Nanaimo, British Columbia

#156 Daisy Mae on 11.30.11 at 12:13 pm

Oasis on 11.30.11 at 10:13 am
“Banks do not create money. — Garth”

Banks don’t ‘create’ money. They ‘manage’ money. Garth is correct.

#157 Daisy Mae on 11.30.11 at 12:21 pm

“At least he smiled. — Garth”


LOL That’s a good one! My guess is all those frowns are supposed to impress us, and we’re to believe the little twerp is ‘concerned’…. What an ass.

#158 fancy_pants on 11.30.11 at 12:23 pm

back in I believe it was @ 1979-80 or 80-81 my Dad almost bought a townhouse as an investment in Port Moody for $29.5k. They haggled over $500 and he never got the property. A year later they were selling for over $100k. doh!

…about RE bubbles: same $hit, different decade.

#159 And in Calgary on 11.30.11 at 12:24 pm

Mosaic Aspen Woods in Calgary?

#160 Daisy Mae on 11.30.11 at 12:26 pm

DISCIPLE: “Only God creates money. YOU are money. Your labour and technology creates and IS money. Central and “chartered” banks can put a price on that money….”


Good grief……

#161 HSC on 11.30.11 at 12:33 pm

I’m surprised so many people are guessing that Roberta and Johnny live in Toronto. Their home has dropped in value by about 28% (from $499,000 to $358,000). Anyone who thinks that Toronto property prices are down by 28% is way out of touch. The bubble seems to be intact in Toronto and it will probably be one of the last cities where the eventual pop will occur. Granted, there are a lot of new condos coming on the market, but it’s occuring in an area with one of the highest population growth rates in the country (this is especially true of the broader GTA, as opposed to the core 416 where growth is more moderate but still sufficient to absorb a lot of those new condos).

I’m not saying prices in Toronto are justified. Quite the contrary. Prices here are obscene! As a prospective buyer, I would want to see a drop of at least 30%. But almost everywhere I look, prices are holding firm or continuing to rise.

If Roberta and Johnny live anywhere around Toronto, maybe it could be in the outer limits of the 905. I could imagine that prices have softened in places like Brampton. But there’s no way they are living anywhere close to the 416, where home prices continue to defy both logic and gravity.

#162 Fred on 11.30.11 at 12:39 pm

I’ll guess Squamish..if indeed I’ve won it will mean I’ve started my xmas shopping early hahahhaha

#163 Helga on 11.30.11 at 12:42 pm

It is definitely n o t Ottawa, the prices have not come down yet but houses stay longer on the market.

#164 Daisy Mae on 11.30.11 at 12:49 pm

CBC headlines – November 30th

U.S. Economy grows 2.5% in third quarter

U.S. Growth revised downward


Wonder which it is?

#165 Fractional Reserve on 11.30.11 at 12:59 pm

“Banks can create credit, of course. Not money. — Garth”

And what pray tell is this credit Garth but money? When a bank multiplies $1 million into $10 million via its credit mechanisms this additional $9 million is bona fide money and accepted as such. There is no distinction between the credit created by the banks and money. The credit is money. Surely money is also represented by physical bills but this is a very small portion of what constitutes money. The vast majority of what constitutes money is the debt creation of the banks!

#166 rower on 11.30.11 at 1:13 pm

My guess is Milton, Ontario.

#167 Q on 11.30.11 at 1:13 pm

“morning garth…another great blog today. Oh, if the answer to the location question is Squamish, BC….i’ll let you know where to send the book. Cheers and have a great day.

#168 Larry Arnason on 11.30.11 at 1:17 pm

Insightful article, many home owners in Calgary have been affected by decreased values from the boom in real estate in previous years. We need to see some changes in the entire process of debt management in Canada.

#169 Coraline on 11.30.11 at 1:41 pm

#23 Appraiser said, “Such horror!

Mortgage credit has grown at the break-neck speed of 4.7% per year since 2009.

Garth, you are a fear-mongering, hair-on-fire goof!”

Garth, why did you let him get away with such innumeracy? Mortgage growth y-o-y for the period in the BOC chart has been over 7% in most months, and never below 6.5%. I don’t know where Appraiser is pulling his BS stat from.

#170 waitingfor on 11.30.11 at 1:49 pm

A sign of the times:

A colleague of mine just sold her house in Georgetown and bought another for over 700k.

A week after purchase their real estate agent came to said colleague and spouse and offered 25k more (plus realtor commissions) than what they had just paid for it.

There was a point in my life where the only thing exciting about Georgetown was the McDonald’s with a re-purposed locomotive car in it’s PlayPlace that served as the backdrop for many 80’s children’s birthday parties.

Today it’s been swept up in the mania.

Banks are greedy, politicians are stupid, and seemingly everyone in real estate (and those who have “invested” in it) has an accute case of Pollyanaism.

It scares me to think how far prices will go before they come crashing down.

#171 Bottoms_Up on 11.30.11 at 1:58 pm

The fed creates money!!

“…Finally, the Fed isn’t lending out “taxpayer dollars” at all. Rather, it is lending out newly created dollars at very low interest rates.

That doesn’t mean that US taxpayers are not risk here, of course. The new dollars have the potential to spark inflation…”

#172 on 11.30.11 at 2:08 pm

Money ‘creation’ also works in reverse, through repayment of debt. Zero sum game.

#173 Vigilante on 11.30.11 at 2:12 pm

Central banks are now accepting Nortel stocks, Enron stocks, Greek bonds ,Monopoly Paper and Fake gold bars as collateral for overnight funds.


#174 Van guy smokin now on 11.30.11 at 2:17 pm


#175 Mr Malden on 11.30.11 at 2:30 pm

London , Ont. ?

#176 Junius on 11.30.11 at 2:30 pm

#145 Disciple,

If only God makes money then perhaps his preachers would stop asking for so much and return what they have extorted from people in his name for generations.

#177 Not 1st on 11.30.11 at 2:30 pm

Mosaic Aspen Woods in Calgary?


Nah, I think those overprices boxes were starting at $750-1 mill.

#178 Okanagan Renter on 11.30.11 at 2:39 pm

#154 Form:

“a lot of guesses for Kelowna. Where is DA to ride to K town’s defence ?”

My thoughts exactly! I guess DA is too busy trying to browbeat unsuspecting buyers to pick up all the homes I see for sale on Abbot St. In my pre-Garth days we used to walk along the Pandosy area and dream of buying one of these overpriced antiques, until we learned that most of them have serious water infiltration problems due to the proximity to the lake combined with the porous soil. Dodged a bullet!

As far as the book-worthy guess, I’m tempted to say Kelowna, but I’m thinking Penticton.

#179 Homer on 11.30.11 at 2:43 pm

Fractional Reserve.

Let’s say Turner Bank opens up with $100 of capital. Net worth $100.

You walk in and deposit $1000 worth of pennies from under your mattress (ignoring disciple’s pleas that lending money at interest is blasphemy).

Bank’s net worth? Still $100. Your depositing $1000 into a bank didn’t create any money.

I walk in and borrow $1000, depositing it into a chequing account.

I have a chequing account for $1000, and a debt of $1000. Change in net worth? 0.

Bank has 2 chequing accounts of $1000 each, and 1 loan outstanding of $1000. Net worth? still $100.

You lent the bank $1000, they lent it to me, I could deposit it in another bank (lend it to them), they could lend it to someone else, but it’s still the same $1000.

On the other hand, Central Banks can create money, at least in countries which haven’t given up that right, like in the Euro countries.

#180 Form Man on 11.30.11 at 2:45 pm

#178 Junius

excellent point. sort of like the notion that although God is ‘all powerful in the universe’ he needs earthly political help from the far-right christians to win in the middle east and so trigger the ‘rapture’ etc.
this view also neglects the thought that God might actually be a woman……….

#181 Junius on 11.30.11 at 2:52 pm

#150 Aussie Roy,

Australians are like Canadians in that they don’t recognize their own until the world does.

Keen was recently recognized at Cambridge for being one of the few economists who predicted the financial crash.

His beliefs are pretty simple. Aggregate debt levels matter nd they have driven us into a depression. Minksy was correct in that markets become unstable in good times because we take greater risks. Furthermore this was a depression created by gambling on ever increasing assets which bubbled and popped.

It is by far the best explanation but it flies in the face of those who want to claim it as unforeseen or even caused by regulation. Because if you accept Keen’s explanation then you need to bring back Glass Steagall and regulate the financial services business. Of course, that is a dangerous message for our bankster overlords.

#182 disciple on 11.30.11 at 3:04 pm

#174… give us some examples… I think you will find that naked interest debt is never meant to be repaid and CANNOT ever be repaid. Zero sum game? Are you really that naive? You’re starting to sound like Bottoms_Up.

#178 Junius… God does not employ preachers… bankers do.

##JohnnyBravo… you should be old enough to understand that neither is gold money. Its value changes daily, how then can it be money? You are confusing the many definitions of money; store of wealth versus medium of exchange versus commodity. Of which do you speak of? Doesn’t matter, gold does not currently qualify appropriately for any of these.

When will you greedy bastards come to the realization that money does not exist? Apart from human systems of material distribution, does it? Of course not. It is an agreement between a collection of minds, it is an abstract concept, like the number ZERO.

#183 Fractional Reserve on 11.30.11 at 3:04 pm

#170 Johny Bravo

“Credit is not money. But it does effectively become money”.

Your logic is escaping me Johny. If credit effectively becomes money then it is money. The credit extended from a bank for someone to buy a house is considered money by the seller and buyer of the house. Money is whatever a society accepts and defines as money. In days past gold, copper, iron and silver, beaver pelts, tobacco, etc., were money. If only gold is money and all the gold on earth was sent to Mars does that mean there would never, ever be money on this planet again? Me thinks we could carry on if gold left the scene.

#184 refinow on 11.30.11 at 3:09 pm

Brampton, Aka (Bramladesh)

#185 April on 11.30.11 at 3:13 pm

What’s this? One listing on the market for months… two more listed online [ same building] a few weeks ago but no sign outside just an information sheet for people to pick up if interested.

#186 Habs 76-79 on 11.30.11 at 3:17 pm


If only God makes money then perhaps his preachers would stop asking for so much and return what they have extorted from people in his name for generations.


There are these three guys each have amassed some wealth in cash on themselves. They are talking about their money and doing good for God with it. They decided that it would be great to devote some money to God. One guy came up with an idea and found a hoop. He laid it on the ground. He said ” I’ll throw my cash up in the air, what lands inside the hoop, I’ll give to God.”

The next guy says “I’ll one up ya.” ” I’ll throw my cash up in the air what lands outside the hoop I’ll then give to God.”

They each then look at the third guy, thinking how can he do any different or any better.

He hums and haws for a moment… Then he says ” Ok, I’ll grab all my cash here and toss ALL OF IT right up high in the air.” “What God then wants he can grab while the money is in the air.”

LOL :-)

#187 lebensaar on 11.30.11 at 3:24 pm

New Westminster, BC?

#188 zeeman1 on 11.30.11 at 3:25 pm

Garth, how does the CMHC even exist in a supposedly free democracy? Is it true it’s a holdover from WW2 that was intended to help Canadians out of the supposed squalor of renting? Why are our tax dollars subsidizing the Federally Chartered banks most profitable business venture?


#189 Brad in Calgary on 11.30.11 at 3:32 pm

Banks can create credit, of course. Not money. — Garth

You obviously define “money” differently than most people. Otherwise, that statement is just ridiculous.

#190 betamax on 11.30.11 at 3:53 pm

My father just sold his place on Vancouver Island for about 10% less than he was offered at the peak, but he was happy to get that now. He’s moving to Kelowna and intends to rent till prices come down further.

His decision to rent wasn’t based on my advice, but on his many siblings in Kelowna, who’ve unanimously told him that prices there are in freefall.

The times, they are a changing.

#191 young & foolish on 11.30.11 at 3:56 pm

Hmmm …. I guess the market is not “free” after all.

#192 miketheengineer on 11.30.11 at 4:08 pm

Garth et al:

Fire up the wood stove in the bunker Garth:

Nostradums le mad Vlad – What do you see in your crystal ball for Mid Dec? Anything Interesting.

Remember, no one can predict the future with 100% certainty…no one.

Here is the link:

Good Luck and God Bless Everyone

#193 Bottoms_Up on 11.30.11 at 4:27 pm


The Ottawa market posts a 0.5% decrease in prices, yr/yr.

Think this will be reported by the MSM?

#194 The InvestorsFriend on 11.30.11 at 4:34 pm


49 and 166 Fractional Reserve and 162 Johnny Bravo are concerned and agitated about banks creating money.

Yes they do, and it’s nothing to worry about.

If you think that banks creating money increases the money supply and therefore causes inflation (more money chasing same goods) you are basically WRONG.

In fact value of a dollar in real terms is determined more so by net worth (as measured in dollars) chasing goods rather than “money” chaing goods.


Money is usually counted as cash in circualtion plus cash in bank account deposits (some non-chequing accounts may be excluded).

Consider if I take out $100k line of credit on my house. I don’t use it. My net worth in unchanged, bank’s net worth in unchanged and there is no incease in deposits or money supply.

Next I write a cheque on the line of credit and put it in my cheqing account for ready use. My net worth in unchanged but I now have $100k ready spending power and money supply is increased by $100k. The bank’s net worth is also unchanged.

Consider who created the money, me or the bank? Or both together? It was of course both of us together.

Consider why is a deposit in my chequing account “money” but an unused line of credit is not “money”? It’s all just arbitrary definitions.

Consider I have a paid for house I can get a line of credit on it a few hours, but that is not money. It’s wealth but not money.

Consider if the price of houses doubles. No bank deposits are created. No money is created But every home owner has LOTS more wealth.

In terms of inflation worry more about arbitrary increases in wealth tied to higher stock prices and higher home prices and worry less about banks creating money.

Banks are a vital part of our system.


Now go earn some money and stop worrying about fractional reseve banking.

Stop visiting those doomer sites!

#195 The InvestorsFriend on 11.30.11 at 4:44 pm


162 Johny Bravo does not think our cahs is money.

He says:

Our national currency is not real money. It is an IOU. Look at your cash. These pieces of paper/plastic are referred to as ‘bills’, but technically they are notes. It says so right on them: “This note is legal tender.” Notes are a type of IOU. In the case of cash, they are on-demand notes, basically meaning that you can spend them at any time; the obligation is covered by the Bank of Canada (or more correctly, the people of Canada).


Some of this is right they are called bank notes and dollar bills. So far so good. The rest is wrong.

The Bank of Canada records these as a liability. That is a fiction they are not a true liability of the Bank of Canada or anyone else. They USED to be when convertible into Gold at a fixed rate on demand.

Now Bank of Canada no longer redeems these notes for a citizen ever.

They have value simply because they are legal tender. The market sets the value of a dollar. Bank of Canada tries to control that with interest rates. But we citizens have a lot of control too, collectively.

Our cash is most assuredly real money because we all gladly accept it in payment for goods and services. In fact under the law, we must.

Bank of Canada has no real liability whatsoever regarding these notes. They will circulate forever. If one wears out the Bank of Canada will replace. Bank of Canada can create and destroy these at will but at no point are they actually obliged to redeem any of these in any valuable good or service. Sure they will perhaps trade you for some America dollars at the going rate, but so will I.

Stop worring if your money is real, it is.

Go and MAKE some money.

#196 Double Trouble on 11.30.11 at 4:52 pm

Regina, Saskatchewan

#197 disciple on 11.30.11 at 4:59 pm

bigga rider… I’m sure you’re aware but the Gates of Bayview Glen Richmond Hill phase 1 and phase 2 are dissolved as a corporation. Increasing number of corporations every month losing to the taxman.

#198 stevenson on 11.30.11 at 5:03 pm

Dow over 12000….made some good dough today through the much feared and avoided leveraged ETFs. Try UDOW or Tqqq. Always buy the dips and sell the rally’s.

I’ve been checking around and Vancouver and Toronto prices are still holding ground and selling away like hot cakes. Anywhere else the properties are pretty sad to own. Although Toronto is somewhat of a want to be world class city there isn’t much choices in boring Canada and for things to tip over? Well good luck. As for Vancouver? It’s not for the poor but there are still plenty of demand. Think of Malibu or Beverly Hill in California, there is constant demand and lack of supply.

#199 edmonton mortgage broker on 11.30.11 at 5:11 pm

Edmonton and surrounding areas showing a total of 408 properties currently in foreclosure. lots of country residential in the mix, which is not surprising as most of these are self funded custom builds and people almost always run out of funds.

if you count just condos and residential in greater edmonton, there are 326 foreclosures. there are roughly 6500 total condo/residential listings right now. that means 5% of all residential listings are in foreclosure right now. many of these listings are for very high end homes, brand new and still keeping up appearances. the house of cards is starting to tumble.

stats below for total foreclosures on MLS.

Your search has found 408 properties.
Data Last Updated November 30, 2011, 1:22 pm
Country Residential: 50 – Rural Land: 19 – Country Recreational: 4 – Commercial: 3 – Condo: 103 – Mobile: 6 – Residential: 223

#200 Van guy smokin now on 11.30.11 at 5:36 pm

Why don’t Roberta or Johnny just tell us?

#201 MarcFromOttawa on 11.30.11 at 5:40 pm

TSX down 5% in a week.
TSX makes up all lost grounds 5%+ in 2 days.

Good luck investing out there folks.

#202 an a-hole on 11.30.11 at 5:43 pm

Can’t wait for shit to hit the fan. Then, during social gatherings, I’ll look for individuals in a similar situation to mine. We’ll gang up and start talking (loudly) about how smart we were for not diving into the RE pool. We’ll compare and rave about our portfolio’s monthly gains. We’ll talk to “Homeowners” and we’ll ask them with disbelief about their buying decision. In a very subtle way we’ll mock them, and then we’ll remind them of all the money that they will never make because they decided to buy. Finally, we’ll talk about fully paid vehicles, fully paid vacations, the joys of being debt free… aaaahhh good times. And when I’m leaving I’ll also make sure to mention that I’m getting new windows and a new furnace for “my” place without having to pay a single cent ! I’ll be the a-hole of the party. But a hapy debt free one.

#203 Westernman on 11.30.11 at 5:43 pm

Form Man,
As I have told you before, this is not a courtroom and you are not the prosecuting attorney, I am under no obligation whatsoever to answer any of your questions…man, you are as thick as a brick. When the day comes I have to answer to some ape who pours concrete for a living…

#204 an a-hole on 11.30.11 at 5:48 pm


#205 on 11.30.11 at 5:51 pm

Our cash is most assuredly real money because we all gladly accept it in payment for goods and services. In fact under the law, we must.

And hence, the reason why gold is not money.

#206 on 11.30.11 at 5:59 pm

#184 see #181

#207 Form Man on 11.30.11 at 6:10 pm

#206 westernman

as I thought. a simpleton you are and a simpleton you have chosen to be. ( my wife liked the ape reference )

#208 Abitibi Doug on 11.30.11 at 6:14 pm

Well, I’m not going to guess where Roberta and Johnny live, but heard today some reputable British economics publication concludes that the Toronto real estate market is an overpriced bubble which is about to correct. Surprise, surprise, isn’t that what Garth (and a few other analysts who don’t follow the crowd by the way) has been warning us about for the last 2 years?

#209 Fractional Reserve on 11.30.11 at 6:15 pm


Homer stick to the nuclear power plant because you not what you speak of. I am not going to carry this any further. Banks create money via debt obligations. Do yourself a favour and read Galbraith’s book on money and my link and example on the multiplier effect of deposits and loans. I am not blindly agreeing with Galbraith because of his status but because what he wrote was and is true and will always be true under the fractional reserve banking system.

#210 kilby on 11.30.11 at 6:15 pm

Has to be Victoria……or Kelowna. The deluded neighbour sounds like Victoria though.

#211 Fractional Reserve on 11.30.11 at 6:20 pm

#196 The Investors Friend

You crack me up up cowboy. Where oh where did I say I was opposed to fractional reserve banking? I merely explained how it worked. Fractional reserve banking has made me a bundle over the years. This is one person that knows how to make a buck and make the buck work for me.

#212 The Original Dave on 11.30.11 at 6:23 pm

Hey Garth, any comment on the Cominar take over bid for Canmarc in the REIT business? Heard Kevin O’Leary say he wouldn’t touch any Reits in Canada right now because this is the type of action seen at the top of the market.

#213 Nostradamus Le Mad Vlad on 11.30.11 at 6:43 pm

Further semi-finalists in The 2011 Darwin Awards, ‘tho the first group could be referred to as ‘Followers of Moon Unit (Zappa)’ . . .

Semifinalist #2
Three Brazilian men were flying in a light aircraft at low altitude when another plane approached.

It appears that they decided to moon the occupants of the other plane, but lost control of their own aircraft and crashed.

They were all found dead in the wreckage with their pants around their ankles.

Semifinalist #3
A 22-year-old Reston , VA man was found dead after he tried to use octopus straps to bungee jump off a 70-foot rail road trestle.

Fairfax County police said Eric Barcia, a fast-food worker, taped a bunch of these straps together, wrapped an end around one foot, anchored the other end to the trestle at Lake Accotink Park, jumped and hit the pavement.

Warren Carmichael, a police spokesman, said investigators think Barcia was alone because his car was found nearby.

“The length of the cord that he had assembled was greater than the distance between the trestle and the concrete,” Carmichael said.

Police say the apparent cause of death was “Major trauma.”
#194 miketheengineer — Hi Mike. No prognostications for Dec. Too sunny and mild here (enjoying it for the next few days) to be bothered with the stuff of this world.

Are you headed down Texas way? If you have any chance, you should jump at it and squirrel away as much moolah as you can, saving for the forthcomiing rainy day.


#214 T.N. on 11.30.11 at 6:51 pm

They live in Squamish I bet. There are two townhouse complex receiverships underway. Aqua, and University or was it Tantalus.

#215 Westernman on 11.30.11 at 6:55 pm

Form Man,
Are you allowed to do anything without your wife’s supervision?

#216 T.J. BONES on 11.30.11 at 6:58 pm

Sir Garth Is it wasauga Beach Ont?

#217 Snowboid on 11.30.11 at 7:02 pm

#192 betamax on 11.30.11 at 3:53 pm…

“My father just sold his place on Vancouver Island for about 10% less than he was offered at the peak, but he was happy to get that now. He’s moving to Kelowna and intends to rent till prices come down further.”

Exactly the same as us, but back in the spring — all thanks to Prof. Turners’ wise musings.

#218 ballingsford on 11.30.11 at 7:12 pm

Prince Edward Island is my guess. Maybe I’ll win a book for the stupidest answer.

It sucks reading this blog in the evening because all the good answers were already taken. Sob! :-(

#219 Kevin on 11.30.11 at 7:18 pm

Some banks more exposed than others to overleveraged consumers: Moody’s

No duh,
Total household debt has exploded by 135% between 2000 to 2010.
Mortgage debt has exploded by 131% between 2000 to 2010.
Consumer debt has exploded by 146% between 2000 to 2010.
This is at a time when the average weekly wage increased by 30%.

I would not worry about the banks, as most of the loans are insured. Bad news for over indebted Canadians though, as they are the ones who insured these loans.

#220 Cato on 11.30.11 at 7:19 pm

What we are about to enter may not technically be a recession but for a great many Canadians its sure going to feel like one. For those caught on the wrong side its going to be painful and its going to last a life time. The hangover from the housing bubble is only one part of a larger systemic economic problem brought on by decades of misguided economic policies.

The evidence is already all around us. The Canadian economy is shedding high paying jobs at an alarming rate while in those very same sectors the US is gaining strength. The US is no longer our largest trading partner but is now our largest competitor and the competition is just beginning.

Our political system lacks leadership and instead relies on media animals driven by a political agenda. Not only did those in power ignore opportunities to avoid the crisis they refuse to acknowledge the storm brewing on the horizon.

We are going to see another bleak jobs report which is going to shake consumer confidence. A lack of confidence and a few weak hands walking away from the financial mess they find themselves in is all it takes to bring down the whole house of cards. We are now entering what is going to be a long term economic cycle that splits the country into have and have not. Its going to challenge alot of long held Canadian attitudes & beliefs, we might not even fully recognize the country that emerges on the other side.

#221 coquitish on 11.30.11 at 7:30 pm

My guess is coquitlam, bc

#222 lotuslander on 11.30.11 at 7:31 pm

I just came back from a shopping excursion in Kitsilano and I was waiting at the deli/coffee counter at Capers for service. No one actually lines up, people just kind of mill around as the “honor” system rules. People actually keep track of whose next for service, acknowledge each other and will often let other go in front of them even if it isn’t their turn. That sort of informal community awareness of your fellow humans is why certain parts of Vancouver are so special. Vancouver has been described for decades as “the biggest village in the world”. This lifestyle and state of mind is sadly being lost as the gentle folk of Vancouver are being displaced by people from other cultures and belief systems where you push, shove and cheat your way through this earth-bound life …

anyways… I digress … standing around waiting for my turn, a woman butted through and ordered a coffee. The other people ahead of her smiled and informed her they were next but she was most welcome to go first and she was taken aback a bit. She relaxed and explained she was very stressed out, having a terrible day. She said she was from Whiterock, (a close suburb south of Vancouver adjacent to the border) and has been trying to to sell her “beautiful ocean view” house but there has been NO serious interest at all and she was beside herself with worry.

The couple that let her in front asked her if she needed a good real estate agent (one of them was an agent) and they all nodded in agreement when she rolled her eyes and stated “… then you know what’s it’s like right now … what’s happening to real estate”

They said they knew …

… it’s over

#223 Jimbo on 11.30.11 at 7:35 pm

#201 edmonton mortgage broker
How many foreclosures are there in Regina,Saskatchewan?

#224 Van guy smokin now on 11.30.11 at 7:45 pm

Prices ain’t crashing until rates rise. Garth, you even said this last year. So I guess we have to wait until 2013 to see what happens.

Rates are now largely irrelevant. — Garth

#225 Jimbo on 11.30.11 at 7:48 pm

#201 edmonton mortgage broker
How many foreclosures are taking place in Regina,Saskatchewan.

#226 Spiltbongwater on 11.30.11 at 7:49 pm

Do they live in North Vancouver?

#227 Bobby on 11.30.11 at 8:00 pm

For # 180 Okanagan Renter,

My guess is that Devil’s Advocate is their realtor!

#228 johnny5z on 11.30.11 at 8:23 pm

#225 – My daughter and I visited some university campuses last week to assess which one she would feel most at home with. She loved uVic and then we took the bus-ferry-bus-skytrain to Burnaby. Then we got on the SFU bus. As we were getting off, I nearly got run over by the horde. She took one look at the campus – gray on gray and the experience of the bus ride was enough for her to turn around. A one and a half hour tour turned into five minutes.

On the main topic, I’m wondering if the CMHC models are done by Derek Zoolander?

#229 Form Man on 11.30.11 at 8:28 pm

#218 westernman

my wife is completely spellbound by my quick wit and dashing good looks ( and of course my money ).

#230 Nostradamus Le Mad Vlad on 11.30.11 at 8:29 pm

5:43 clip Intelligent Design — Collapse Europe and NAmerica, then install a NWO! Simple and easy (this may go with your post, Mike), and Gold, or how to save the Euro; Impending Fiscal acopaylsep (idi I spell that write?)Holding Trying to hold the EU together while being crushed by debts; Desperation “The global bankers just handed Europe another cork for the bottom of their boat … then drilled another hole.”; Whistleblower found dead“43 years old, and this case is not being investigated as a homicide?!?!? Something here reeks, big-time.”; The One Per Cent This is the worst; 1:03 clip US Fed grants US$7.77 tri. in secret bank loans, so the OWS groups do have a point; China cuts reserve ratios.

Citigroup Settlement “The heads of financial institutions who sponsored the bundling of fraudulent mortgage-backed securities should be tried, and put into prison for the harm they have caused the American people.”; 4:14 clip Occupy UK. Mass general strike; Rampage Stocks up, yet ratings cut; Tens of Millions How about a FF? That will distract them; Good Economy? “I have never seen, in all my time, so many people holding signs on street corners asking for money, food and work…”; FAQ about liquidity swaps.
Pakistan This would make things very interesting if it goes ahead, and Access “If Russia follows through on this threat, coupled with Pakistan’s shut-down of access to NATO supply lines, the only way to get materials and personnel into Afghanistan will be from the air, and that will be a very pricey endeavor.” These first two links go together; South China Sea “Placing fractures in ASEAN was the design intent of US foreign policy moves toward China here.”; Missile Shield Talks between Iran, China and Russia; Bloodthirsty describes NATO – UN – US aptly; Big Pharma Payouts Conflict of interest? Newt Gingrich He should be given a rifle and parachuted into Tehran or Sirte; Antique Pix from an antique California.

Murder In standing with his sheriff, the judge was murdered; Tyranny from the people we elected; New Authoritariarism along with decrepit govts., but the cycle (250 years or so – 2026 or thereabouts) is nearly complete; CC The scientists now appear to be seeing light at the end of their noses; Wipeout Gene Modified mosquitoes; Meth for sex Not my cup of tea, but which sex — male or female? 10:19 clip Two faced Obomba; Iceland recognizes Palestine as a state (good on Iceland); Egypt Good for the workers, because the military can’t use it on their own people; Sensationalsim David Attenborough’s a little off when it comes to GW.

#231 northerner on 11.30.11 at 8:40 pm

my guess is Roberta and Johnny live out the door, line on the left, one cross each right next door to disciple

#232 McLovin on 11.30.11 at 8:41 pm

#225 – Hilarious.

#233 Westernman on 11.30.11 at 8:46 pm

Form man,
“Quick wit and dashing good looks” … says you.
And as far as “your money” goes – you don’t have any. I suspect the bank owns 95% of everything you “think” you own and your wife owns 95% of the 5% left. You own a trowel and the clothes on your back most likely.

#234 i.see.debt.people on 11.30.11 at 8:57 pm

Real estate agents are toast. my friend just bought a cottage in wasaga beach joint with her retired parents. their real estate agent was pissed at the seller’s agent cuz he wanted the buyer agent to give up a portion of his commission. …..shows you how desperate the realturds are for a commission since property listed for sale stay listed for months with no showings. the buying agent threatened to report him and he backed off.

sitting back with my Johnny walker watching the crash

#235 Anotherlowlyrenter on 11.30.11 at 9:00 pm

Given that the amount of mortgages guaranteed by the CMHC is roughly equal to Canada’s national debt, it’s shocking that the HR minister runs it. You’d think for something as important as this, at least it would fall under the purview of the minister of finance.

#236 45north on 11.30.11 at 9:17 pm

lotuslander: talking about a distraught woman:

“She said she was from White Rock, (a close suburb south of Vancouver adjacent to the border) and has been trying to to sell her “beautiful ocean view” house but there has been NO serious interest at all and she was beside herself with worry.

thanks for your story

The two main housing markets in Canada are Vancouver and Toronto. I get the feeling that Vancouver is rapidly cooling but Toronto is simmering. The housing market in Canada is best described by chaos theory. The image is super-cooled water. When will it freeze? As long as sales in the Toronto core hold up the rest will remain liquid but once sales in the Toronto core fall watch out! Indisputably fall. The whole mass will freeze up.”

#237 45north on 11.30.11 at 9:18 pm

opps must have forgotten a tag

hows this?

#238 CoCo on 11.30.11 at 9:23 pm


#239 InvestorsFriend (Shawn Allen) on 11.30.11 at 9:44 pm


Johnny Bravo at 234 thanks for the detailed response.

I don’t work for banks; I own them.

So I ask you if credit is not money but can be turned into money very quickly, should we worry about credit creation just as much as money creation?

There are those on this Site who think all banks should be outlawed and that all debt is evil.

I think definitely credit and money (even fiat money) and debt have been part of the grease and the incentive that has allowed the wonderful standard of living of today.

Is there too much credit and debt and money at some point? Maybe yes. Do I know when that point is reached? No I do not.

Do I think I can make money owning banks and other stocks and that I can continue to live a wonderful and increasing standard of living, one that is better than my parents lived and very far beyond that which my grandparents lived? Yes I do.

Do I think the best time in the history of the world to be born was today? Yes I do.

Life is grand, now let’s go count our stock gains from today.

#240 Daisy Mae on 11.30.11 at 9:49 pm

JOHNNYBRAVO: #156 Daisy Mae on 11.30.11 at 12:13 pm
“Banks don’t ‘create’ money. They ‘manage’ money.”

Yeah, they manage to siphon it off the rest of us.


You’re absolutely right!

#241 Dan in Victoria on 11.30.11 at 10:02 pm

Was busy working away on a job today, someone who was more grey haired than me showed up looking for work.
No the owner isn’t here I said, well could you give him my card?
Sure I said taking it and reading it, you’re from Nanamio I said….
Yes I need work its slow every where he said.

Young fellow doing some contracting on the house was smiling with glee I’ve got 4 houses to do he said all full of himself.
Good I said.
Yeah, I dropped my price 15% and I’m getting work.
What happens when your competitors drop 10% below you I asked.
Ohhhhh…as the smile came off his face.
Man, I’ve seen this same thing over and over.
It starts the same way every time.
It ends the same way too.
Here we go.

#242 Okanagan Renter on 11.30.11 at 10:03 pm

#205 an a-hole:

You, sir, are my new hero. See you at the party!

#243 The thing in the basement on 11.30.11 at 10:05 pm

184 Disc – good comments re the abstract concept of
money and gold. So many think in absolutes.

#244 Alan on 11.30.11 at 10:06 pm

Let me pour a bucket of ice on the last 243 gloom and doom real estate comments…by this cut and paste…sorry

From the Globe and Mail:

“Consumer caution will be a positive for the real estate sector because it lays to rest concern of an overheated market and the risk of a bubble popping, said Jim Murphy, chief executive officer of the Canadian Association of Accredited Mortgage Professionals.

“We’ve had all these discussions about a bubble, but the market is stable,” he said. “We have in most markets in the country real estate prices increasing at a measured pace.”

Ok so there are places that are not so interesting and those real estate prices are correcting and there are places that everyone wants in….so is there anything new in Real Estate? Been the same for millenia.

Your source was the mortgage industry, dude. — Garth

#245 Daisy Mae on 11.30.11 at 10:08 pm

OKANAGAN RENTER: “In my pre-Garth days we used to walk along the Pandosy area and dream of buying one of these overpriced antiques, until we learned that most of them have serious water infiltration problems due to the proximity to the lake combined with the porous soil. Dodged a bullet!”


Very good point. It took Kelowna General Hospital 1-1/2 years to reach the point to where they could build their expansion…very near Abbott Street, very near the lake. Water table is high. It was a very interesting process. New expansion will be open 2012.

#246 FRUITLOOPS on 11.30.11 at 11:07 pm

I read you from Québec, english is not my first langage but i read your blog every single day and wished there were some straight teller guy like you here in this frenchy part of Canada where everybody is bullish about real estate. I am spreading the good news and refer to your blog as often as possible . Keep up the good work !

#247 Snowboid on 11.30.11 at 11:20 pm

#248 Daisy Mae on 11.30.11 at 10:08 pm and Okanagan Renter…

Our first home was a modest rancher on West Ave between Pandosy and Abbott, and you could indeed dig down a couple of feet and hit water.

My late parents’ Lakeshore Road home was worse, a couple of times water lapped at their front porch!

I was told most of the homes along Abbott near downtown were built on a bed of sawdust from the former mill there!

#248 bbrodriguez on 12.01.11 at 2:29 am

Is it insufficiently specific for me to say they live in the BC lower mainland, excluding Vancouver Proper?

My money’s on New Westminster, if it is.

#249 Bon on 12.01.11 at 3:22 am

I’m so glad to find this blog. I have been feeling like a conspiracy theorist the last few years with regards to real estate. I felt alone in the wilderness, wondering why everyone around me seemed to have lost their last scrap of sense and logic when it came to house buying.

Whew! Thank you thank you for helping me see that it really was the inmates running the asylum after all.

#250 Beach Girl on 12.01.11 at 4:43 am

Prices ain’t crashing until rates rise. Garth, you even said this last year. So I guess we have to wait until 2013 to see what happens.

Rates are now largely irrelevant. — Garth


I don’t owe, so off to work, I don’t go. But what do you mean that interest rates are irrelevant? Very curious.

#251 TurnerNation on 12.01.11 at 9:04 am

Beach girl, why rates are irrelevant to house prices now: people are using maximum available debt, e.g. 35 year amort with 5% down (or less if they borrow the DP). They are tapped out on monthly payments.

How can house prices rise further unless wages also rise? And even if they do, we know the cost of taxes/gas/hydro/food/insurance is rising 3-10%/yr anyway.

The Capital Classes have us over a barrel. In school they never teach about the Capital Class, only how to be good debt slaves and “get ahead”.

#252 disciple on 12.01.11 at 9:53 am

#254 Beach Girl… I’m surprised at your question… Garth, as a God among men, has explained this so many times, did you miss all 666 times he has mentioned this in the past year?

And regarding work, newsflash, some people actually enjoy their work or vocation, I trust that typing your blog posts is enough daily work for you (which you obviously enjoy), but I’m sure you still think you do not owe anybody anything. I know, I know, those turkey dinners you give out are probably really great… please if you could help out some of Rob Ford’s victims and their families… but I don’t want to put you out, because I know it’s so hard collecting the rent every month, eh?

#253 Squamish Townhouse – 2008 $499K, 2011 $358K – “It was supposed to be an investment, not a nightmare.” | Vancouver Real Estate Anecdote Archive on 12.01.11 at 10:38 am

[…] Roberta and Johnny can’t wait to dump the Squamish condo townhouse they bought three years ago. “It was supposed to be an investment,” she says, “not a nightmare.” Not that the tenant’s much trouble. She’s not. But it’s tough to know what you paid $499,000 for thirty-seven months ago is now worth $358,000. At least, that’s the offer they have. Worse, the deal has hair on it. Lots of conditions. Long close. Small deposit. Not much of an offer at all, actually. But better than no offer, the alternative in a town where the market’s died. Johnny writes: “A side note of potential interest is that the owner of a comparable unit in the same complex priced $100K (yes, one hundred) over ours and that has been sitting on the market without viewings for months, if not a year now, called me the other day and left a message saying that he wanted to talk to me about my price. He felt that I would be leaving “a lot of money on the table” and gave indication that I must not understand the state of the market in the area very well. In the meantime, another comparable brand new unit (one of many that are coming out) in a complex down the street was just listed under headlines of ‘receivership pricing’ for $345K. Needless to say I haven’t called him back.” – Excerpts from a story relayed by Garth Turner at 29 Nov 2011 […]

#254 AG Sage on 12.01.11 at 12:53 pm

#36 Kevin on 11.29.11 at 11:57 pm

>From the time when interest rates were dropped to all time lows at the beginning of the 2009 until now, total mortgage credit has grown by 20%.

When interest rates first fell in 2009, 30% of all mortgages were refinanced just in that one year. (Based on CAAMP) Which may be more than 30% of the total debt, because it would be logical to assume that higher LTVs would be better candidates for refinancing. You can’t just assume the old mortgage debt sat static while only the new debt was experiencing change.