In the end

None of your predictions have become true and I guarantee they never will be. You are such a chicken cockroach who cannot take any criticism, be a man for once.

Several times each day words like that, and far worse, show up in the queue of comments waiting to be published on this blog. They don’t make it. I trash them. After all, they add nothing to the discussion here. And almost always they come from realtors or haters.

True enough, for some time I’ve been convinced residential real is the most dangerous asset. I raised the current alarm four years ago with my book, “Greater Fool,” when I was still a star-crossed member of Parliament. This blog followed. Two years later I opened a financial advisory practice to actually help people find alternative, safer ways to finance their lives. I’ve walked the walk. It’s earned  enemies.

Since then, some housing markets have tanked. This blog’s comment section daily contains stories of folks in Calgary condos, Kelowna houses or Victoria McMansions who are already underwater. Houses are turning illiquid from the west side of Vancouver to the populous mass surrounding the GTA. And while in-demand areas will always attract buyers and maintain values, most markets in the country won’t. Finally, you can always count on the media, and your mother-in-law, to be the last with facts and the first to cough up a pro-house opinion.

Since I began the warning, residential values have risen considerably. Critics say this proves I’m wrong. But real estate’s not safer now because it costs more. It means danger has swollen. Every new buyer in the past three years, especially those with faint equity, resembles a Nortel investor in 2000. And older folks with the bulk of their net worth in their homes might as well be boozing it up at a retirement casino.

Let me remind you why this is so. (Several charts below are based on work done by Saskatoon Housing Bubble, CREA, Bank of Canada, M.Hanson Advisors and Stats Canada.)

First, residential prices in Canada are at an all-time high. Logic tells us buying anything when it’s never cost more is a losing proposition. The financial crisis of 2008-9 started a healthy correction, but the government rush to crash mortgage rates and tell the nation the recession was over, sparked a new orgy of buying. Sadly.

Meanwhile American home values were in fact correcting after a similar speculative run-up engendered by cheap money and lax lending standards. The breadth and depth of that correction is witness to the power of real estate to destroy the net worth of families who believed they were investing in the most secure, stable and riskless of assets. All markets revert to their mean after periods of excess. Canadians should learn that.

Home ownership here has become a mantra, a universal goal. While Americans, Brits, Aussies, Spaniards, Irish and others disdain something they now know can bite, we clamour to buy in. Seven in ten families have houses, whether they can afford them or not – the greatest mass investment ever. Meanwhile half of us have no retirement savings and four in ten can’t pay the monthly bills. Is this a cult?

The rise in housing values is not the result of prosperity or higher incomes. Therefore it’s happened because of speculation and debt. This is not an asset appreciation based on economic factors, rather one bid up through emotion, lust and competition. It’s a recipe for instability and sudden collapse.

The role of debt cannot be diminished. The greatest ponzi scheme comes from using borrowed money to buy something based only on the expectation it will rise endlessly. Fools sell to greater fools, each taking on a proportionately greater hunk of risk. Never before have Canadians owed so much mortgage debt or household debt. This is a direct result of record home prices and home ownership levels.

Is it different this time? You bet. While real estate has boomed before – with each of those episodes ending in a bust – this increase is without parallel in the past sixty years. But unlike in the 70s, when the Boomers were madly nesting, and the 80s, when inflation raged, making mortgage debt melt away and asset prices soar, this time it’s cheap debt plumping house values. We all know this will pass. We know the consequences.

But aside from all else, there’s a bomb in our midst destined to go off. Nine million Boomers – 32% of the population – are approaching the time large numbers will be selling houses to finance their retirements. Of equal concern are far smaller generations trailing the bulge, guaranteeing there will be no more real estate bubbles for years – perhaps decades – to come. Those now jumping into the Millennial housing boom could be buying in at prices which will not be replicated in a lifetime.

I have not mentioned the gross overbuilding of condos that’s taken place in Toronto, Calgary or Vancouver. Not the tightening of lending regs as policymakers try to stem the mortgage tsunami. The above does not factor in a weak economy with rising unemployment in Canada, nor the absolute unpreparedness of most families for any kind of a downturn. Left unmentioned as well is the fickle, irrational, flighty nature of public opinion upon this most of the current housing boom is based. When fear replaces lust, there is no bottom.

So you can ignore me. Billions do. Call me a chicken cockroach. No problem.

But I know how this will turn out. I’m ready. Are you?


#1 Deano on 01.08.12 at 5:47 pm

Garth, no one likes to hear that they’ve done something stupid. Some people just don’t know how to deal with it.

#2 Re-diculous on 01.08.12 at 5:56 pm

Great collection of graphs – this post is a keeper! Thanks.

#3 TurnerNation on 01.08.12 at 5:56 pm

Who needs the Comics section when we have MLS for knee slapping fun.


Translation: home is sitting empty as deperate flippers – or people who bought a new place and are still carrying this one – are trying to sell. Make a low low offer, we are desperate! Photos reveal an empty unit.

p.s. I heard the rooptop patios on this type of unit in this area have water pooling issues, whereby water seeps from patio into the upper floors due to lack of drain.

#4 Roger on 01.08.12 at 5:59 pm

Garth has hit it on the head (again!). It is as simple as this, population is aging. There are less young people and guess what? When the glut of homes hits the market at the same time and there is a small group of guessed it, prices drop like a stone. Supply and demand, simple as that. Also, said young people (the small group that they are) have also amassed record debt (i.e. exorbitant tuition, have everything now generation etc.) so guess what, no more money left over to buy huge $600,000 houses.

#5 LS in Arbutus on 01.08.12 at 6:00 pm

It is beyond me:

1) how anyone, who bought a lipsticked house on a 33 foot lot on the West side of Vancouver last year for $1.6 million, wouldn’t feel extremely queasy after reading this posting,

2) that people make the biggest purchase of their lives with little to NO critical thought,

3) that people simply don’t know that housing is cyclical and

4) people have taken little heed to the correction that happened directly south to us and in most other areas of the world.

BEYOND ME. I will feel very sad for some of these people in the future. Very.

Also, has anyone noticed how almost daily there is a new article in the Canadian newspapers talking about the possibility of a bubble?

#6 jess on 01.08.12 at 6:02 pm

all cities will have this ability soon

De Blasio Names Worst Landlords of 2011,
December 27, 2011
Public Advocate Bill de Blasio today announced the latest additions and new features to his New York City’s Worst Landlords Watch List. There are now 317 landlords listed, and the updated Watch List now tracks whether their violations are on the rise or being repaired. The site, which is featured on to assist apartment hunters, also includes a new list of 176 buildings recently removed from the Watch List because violations like lead paint, infestations and mold have been addressed. The innovative website will soon be adopted as a model by the City of Vancouver, British Columbia to hold landlords there more accountable.

how they caught the strip miners
slumlords/ “strip miners”
Revealing Economic Terrorists: a Slumlord Conspiracy

#7 Angela on 01.08.12 at 6:03 pm

The middle part of your blog post, so about 90 percent of it, I’m betting it’s in the intro chapter of the new book. Called it! It’s January, so when’s the book coming out?

#8 TurnerNation on 01.08.12 at 6:06 pm

More hilarity!

A bachelor condo for $274,900. Add 10k for two Toronto land taxes, closing fees, and so on.

$285,000. Assume a heady 20% down. $300/mo condo fees, assume $1800/yr taxes. Assuming 3% interest rate 30-year mortgage, and the monthly carry costs out at $1408.97.

You want a 25 yr mortgage? That’s all-in 1528.99/mo.

But your professional realtor(r) states:

“Can Easily Rent For $1350. ”

That’s $50/month Cash Flow NEGATIVE! Or $200/mo negative on a 25 year amort.

It’s no wonder the blog dogs are on here sniffing out 2nd opinions for their offers. Who can they trust?

#9 P & T S on 01.08.12 at 6:07 pm

It’s going to be an “I told you so” moment for a LOT of people, not just in Canada.

Thanks (as usual) for the graphic info – supports the assertion that “a picture tells a thousand words”. These certainly do.

Ignore the detractors – “There are none so blind as those who will not see!” – we just post “inflammatory” posts just to stir things up a bit!

As long as the basic structures of our Societies remain intact, your Investment Strategy will be successful – or at least will provide capital protection, and a reasonable rate of return. If things DO go “Horribly Wrong” then it’s anyone’s guess what will be best – PMs as a wealth hoard (but you’ll need someone to want to buy them off you to realise the value – and it’s the BUYER who names the price); we believe the most valuable asset of all is knowledge – the skills and ability to do things for oneself, or for others – maybe in return for them doing things for us. Seems to be working out just fine in the EU – a well known means of avoiding the dreaded VAT.

#10 TheRealTruth on 01.08.12 at 6:07 pm

Great Post Garth! Totally agree…..

Having said that, you always leave out the “population growth” side of the equation. Immigration levels have increased only slightly over the last 15 years or so ( by about 50,000 per year)… So overall not a huge impact!! BUT…

What about the Temporary Population Growth in the hundreds of thousands in primarily two major cities?? This segment is not counted by Stats Canada. And once a permit expires… An exit is not recorded nor can it by the Cdn gov.

So this continuous influx of hundreds of thousands of Temp residents who never intend to go back feeds speculators as they rent out numerous places… Hence low vacancy rates and pressure on rents.

To keep this subject under wraps only helps those with multi-unit properties, telecoms, and bank shareholders.

#11 Loon on 01.08.12 at 6:12 pm

applause ! don’t forget to mention the high cost of ownership and indiscriminate tax hikes from our loving government.

#12 ralph tieleman on 01.08.12 at 6:16 pm

Hi Garth,just got my 2012 Property Assessment Notice showing house and property value at $484,700.00 for a 1500 sq ft waterfront house in Tofino BC. Last year’s assessment was $587,900.00.Numbers don’t lie !

#13 FreeGoddess on 01.08.12 at 6:17 pm

Garth, I’ve never bought a home and never will, but I always appreciate your candid assessment of the housing market in Canada because it’s based in facts. Indisputable, reality-based, solid facts.

Anyone who cannot connect the dots and who isn’t interested in hearing what you have to say is in for a massive shock. I’d just like to be one of the ones who say ‘I told you to listen to Garth Turner!’.

Thanks for all the work that you do.

#14 The Place to Be on 01.08.12 at 6:20 pm

Garth, you mention the gross overbuilding of condos in Vancouver. I live in the Okanagan where RE is DEAD, and was visiting the Vancouver area over the Christmas holidays (around 3 weeks).

Just got back and cannot believe how many towers are springing up around there. Many look to be near completion and many just starting the excavation with pre-sales. These developers all must be pretty confident in the future of the area.

I keep hearing the same old story on how desireable Vancouver is with Asians, etc who consider our prices still very cheap. Also how scarce land is there with the ocean and mountains.

To quote you, “in-demand areas will always attract buyers and maintain values”. Aren’t you now coming to the conclusion that parts of Vancouver (namely west side Vancouver and West Vancouver) are not expected to drop much in price? If so I hope you’re wrong as those areas will always tend to keep the other adjacent areas high.

I’m getting frustrated as I’ve been telling people about the bubble in Vancouver from reading your blog for a few years now and they all laugh in my face. I guess from now on I’ll try and shut up and wait (and wait) and see what happens by the end of this year.

#15 Junius on 01.08.12 at 6:22 pm

Great summary of the issues Garth. Very concise. Debt and speculation.

#16 TheRealTruth on 01.08.12 at 6:23 pm

Two more things:

1) Junius: you live in a recently purchased home in Vancouver West … Yes the million dollar area. I rent my residence in the suburbs. So let the readers figure out what your real agenda is. I’m sure you don’t want a 25% decline.

2) Decline will eventually happen Junius. Just not yet as the Population continues to grow. I’m sure you know that otherwise why did you buy??

#17 The Original Dave on 01.08.12 at 6:26 pm

I’ve concluded something about the whole real estate industry and mass media here in Canada.

It’s pretty obvious to people now that our media outlets have been publishing and pushing that a housing downturn is in the cards. They’re just playing the public. The media is paid advertising dollars by the real estate developers.

The media talks down the market when those developers aren’t selling like mad (like now…the winter months). The public questions whether they should buy because of what they read. However, come spring time, all media outlets will be steering the public back into real estate with their messages and drivel.

Developers pay advertising dollars to media outlets. The media outlets need those developers to sell properties – not the regular everyday people.

With all that being said, the bull market does run out at some point. It could be this spring market. The media will “talk up” real estate, but the public may not respond in droves. When that happens, it is truly and completely over.

We need to have a spring market where the media is publishing all those bullish remax, royal lepage, and bank forecasts as usual, while sales languish and listings surge.

We don’t know if it is truly over yet. I suspect it will be because the debt burden until the spring will keep rising for the Canadian public.

One thing is for sure: stay away.

#18 EVEric on 01.08.12 at 6:26 pm

Read an intresting article today. Caterpillar corp is looking at shutting down their canadian factory and moving to a place where labor costs are half what they are in canada. Asia, korea, china you say, nope the USA.

#19 Junius on 01.08.12 at 6:27 pm

#10 Rtr,

You are so thick it is really starting to get tiresome. Read what Keen says about this in my post on the previous blog.

Immigration and migrations are but one factor in demand. In fact, supply has outstripped demand for many years. You argument is nonsense.

Rising prices have been because of cheap debt and speculation. Period. Figure it out.

#20 Stinky the Cockroach on 01.08.12 at 6:31 pm

Most logical and convincing argument yet, Garth.

#21 T.J. BONES on 01.08.12 at 6:33 pm

Sir GARTH: I see your simplification all I talk to are aware of the bubble, but they want to get that last sale before it tanks. Take that last newbie to the cleaners and then run like h#$%. This generation won’t stand up for themselves, they want us war babe”s to do it for them. They won’t “vote” or take any steps to hang on to what they have been given from the backs of their parents. What we fought for they threw away, ” We don”t need benefits or pensions just give me the money” attitude. They all think that they are Trumps, and Wall street big shots on borrowed money. Hey I look good so I’m a big shot, give me some money. I,m terrified for the next decade, If I don’t get the job I want I’ll just kill myself, is what I here from them. I could use some optimism right now. Your next book is in digital form only? Please don’t I like the feel of something real. Please continue we are listening.

#22 Dr. WAYNE on 01.08.12 at 6:33 pm

An example of the lunacy in Vancouver West: four years ago we sold our house for 1.5 mil. Thought we did pretty good. Yesterday we see the house situated right next door to ours listed for 2.76 mil … same vintage and everything. Now that’s insane …

#23 R C on 01.08.12 at 6:35 pm

Hi Garth,

Great site. I’m a first time buyer-in-waiting in Toronto. My partner and I have been looking for a year now, and have seen ridiculous things. Your site makes me realize the market is indeed out of check. I’ve started keeping a journal, if you feel like a buyer’s perspective feel free to check it out:

Cheers for all the great info!

R, Toronto

#24 Stinky the Fish on 01.08.12 at 6:37 pm

Not even immigration can save us now, with all this risk in the system… and all the youth who have plunged themselves into homeownership.

Garth – Have I ever told you, you look a lot like Brad Pitt but even more like that green midget with the long ears from Star Wars?

#25 Not 1st on 01.08.12 at 6:56 pm

A very clear, concise and unambiguous post which shows it all.

#26 LIBERTY VILLAGE IS DOOMED on 01.08.12 at 6:57 pm

Filled with young, alcoholic, prozac-pumpin’, sociopathic, debt-ridden “professionals”.

Ironic, aint’ it?

#27 brainsail on 01.08.12 at 7:00 pm

Garth, that is a great meritorious presentation! A clean black and white picture of what is going on will wake up disbelievers.

#28 Dorothy on 01.08.12 at 7:03 pm

It isn’t true that housing in general has continued to rise in price over the last year. Real Estate has only increased in certain, limited markets, while stabilizing or decreasing in others. It all depends on the location and local economy.

That said, I agree that huge increases over the last decade, fuelled mainly by speculation and foolishness, are unsustainable. But it’s important to note that it’s not buying a house per se that led to the problem, but buying houses that people couldn’t AFFORD at overinflated prices.

It’s always been true that if we overextend ourselves financially, we’ll come to a bad end. No matter what our age, and no matter what the decade. And for the most part, it’s this over indebtedness that has resulted in folk owning more house than they can afford, with all its subsequent consequences.

Nothing can undo what has been done, so those who are already underwater and unable to sell their homes can only continue to pay their mortgage and hope they don’t lose their job. At best, they can try to reduce how much they ultimately pay for their falling asset by utilizing pre-payment privileges, and making weekly payments, in order to reduce the interest payable.

But for everyone else, falling prices and low interest rates make for a GREAT time to consider buying a home, IF that’s what you want to do, and CAN AFFORD IT.

Providing you don’t make the same mistakes as those who are now in a financial mess, there’s no reason to let the doomers and gloomers talk you into being a perpetual renter. Save up a decent downpayment, shop around for a reasonably priced house, negotiate a fair price, get a mortgage with a reasonable (less than 25 years) amortization, a fixed interest rate for a 5 year term, and a weekly payment. If you have a secure job and do all of the things I’ve listed, you have nothing to fear from buying a home. Just make sure you don’t overextend yourself, and you’ll be fine. That’s always been true, and nothing’s changed.

You really don’t get it, do you? — Garth

#29 Victor on 01.08.12 at 7:04 pm

#17 The Original Dave

Let’s also not forget that Mr. Flaherty is perhaps going to tinker with those pesky mortgage rules again come spring budget announcement time. Increasing down payments or lowering amortizations…one is likely coming our way.

#30 M on 01.08.12 at 7:12 pm

Nothing like fat assed broads and over the top cardboard boxes. Might be directly correlated actually.
Canada being so special no radical downward correction is expected, both in fat assed broads AND cardboard boxes (size for broads, value for boxes).
Quite a depressing sight… time for good old George Carlin:


#31 ts harpoon on 01.08.12 at 7:16 pm



You have kicked this one through the goal posts. Edward Tufte would be impressed.

#32 Tickin' Time Bomb on 01.08.12 at 7:20 pm

Great post Garth. It’s going to be nice to see how the 70% respond when the reality sets in to Vancouver.

#33 Not 1st on 01.08.12 at 7:24 pm

Garth, by your graphs, it could be many years before RE becomes low enough to buy back in. Even when prepared to vultch in a year or two, this market could still be tumbling. How does a person prep for that? Can’t rent a basement suite forever.

So rent a house. — Garth

#34 Steven Rowlandson on 01.08.12 at 7:25 pm

Before the real estate fanatics get destroyed financially and property prices collapse the greed and debt will truly reach insane levels that make todays lunacy look benign. People have to find out the hard way and that is all there is to it. Just be ready to vultch after the big reality check.

#35 Not on the boat. on 01.08.12 at 7:32 pm

I am in the heart of the beast on the Westside… our assessment for 2012 was up by.. wait for it..


In one year.

I think the Mayans were right.. its just that the apocalypse will be industry specific in 2012.

Just popping some corn and going to wait for the rates to start marching, the band to start playing and the financial tide to rise… it won’t be pretty.

It will be a rude awakening when people realize that what governs their money is called math not MAGIC.


Not. On. The. Boat.

#36 Van guy blazin kush on 01.08.12 at 7:35 pm


Are you renting too?

When I feel like it. — Garth

#37 Fool in the GTA on 01.08.12 at 7:35 pm

Anyone looking at the Canadian Bankers Association’s stats on mortgage arrears/ delinquency?

Delinquency rates are still very much contained and absolutely no where near US levels. But the US experience shows that delinquency can spike very high very quickly.

#38 Not 1st on 01.08.12 at 7:36 pm

#28 Dorothy

Dorthy, with all respect, you need to spend a few hours with some amortization tables. If a consumable items is 3 or 4 times its real median value and you buy it, you will be giving the bank a ransom in interest payments.

Do a calculation on how much interest you pay financing a $700,000 house vs a $250,000. That value is more than most people retire on.

#39 East Van on 01.08.12 at 7:41 pm

Great Arguments.

I would add one more: Young people in Canada are not able to find stable full time jobs paying a decent living wage, and will not be able join the ranks of home owners. In December 2011 Employment among youths aged 15 to 24 declined for the third consecutive month, down 17,000 jobs.

#40 Smoking Man on 01.08.12 at 7:42 pm

See what a great job I did with my youngest son.
He will never buy a house in a market like this.

Text to each other this week end.

Son: U hear about neutrino’s
SM: Ya
Son: Nuts eh, lets figure it out.
SM: Shot at cern they appear to be faster than light, time slowed for the neutrino’s and the speed of light slowed cause of universal shrinkage. Hence the experiment has all the paddle heads scratching the same.
Son: Ur a genius write a book. I’m at Rama.
SM: What u doing their?
Son: Gambling, playing poker like you taught me.
SM: may the force be with you.
Son: Dad just figured out watching all the idiots hear being smart has to do with overcoming emotions to make the right decision rather than a persons education or intellect. Craig 2012
SM: I like it.
Son: where are u
SM: at Fallsview Casino being stupid and loving it.
Son” ahaaaa Dumb ass.
SM: You up,
Son: Double up and walked, steve and phil where up too they stayed and our out of money.
SM: is that what inspired your Craig 2012 cooment.
Son: Yup.
SM: I know a really good blog……

#41 LS in Arbutus on 01.08.12 at 7:46 pm

Further, I wish this correction would get underway, because, I do love looking at buying real estate!

#42 DoomedinSask on 01.08.12 at 7:47 pm

R.I.P Westernmoron. You won’t be missed!

(Not that I agree with smacking kids with down syndrome, but in this case it was the right thing to do!)

#43 Valyrian_Steel on 01.08.12 at 7:49 pm

I really can’t wait to experience Vultch Mode. I can only imagine how empowering it must feel. Garth, I really hope you are right about this.

#44 Tim on 01.08.12 at 7:59 pm

Very well put Garth, the graphs illustrate your points nicely. Can you do a post on condos versus houses for those considering to own a place? They seem to be building an endless supply of condos in the large cities in Canada. I realize they are overpriced now, but what level will they have to be at in order to make financial sense to buy one to live in? Are there metrics used to compare them to the price of an apartment rental- factoring in the ever increasing condo fees, property taxes, and special assessments?

#45 Onemorething on 01.08.12 at 8:05 pm

When are you all going to realize you’ve been scammed by the RE binge!!!

From banks to realtors, pushed by the global elites power of government to rape the middle class and suck dry the boomers who have all the wealth.

The rest of you, Xer’s and Yer’s are just a bonus!

How did the government allow themselves to be put on the hook for insured mortgages. It’s called repaid debt to getting the votes.

At least the Chinese had no choice in investing and looked to property to place yuan. They are now seeing for the first time since the Asian Financial Crisis that RE doesnt always go up. Shanghai or Richmond take your pick!

Canadians will go down in history as the last bubble to pop putting us as the poster children for stupidity. How can we be any different? What were you thinking Canada? But it show’s how gullible and weak of thinking a so-called leading nation of intelligent people can be ponzied!

I believe like some the DEBT SUPERCYCLE is coming to an end. Will Volker enter the room again disguised as someone else? If someone does not step up, the end will be deadly! There’s still money in the boomers so unlikely! Time to squeeze the damp rag dry!

Garth is taking alot of heat from the masses and you know who you are. You listened to him years ago and now blame him for great advice. Just because your wife, kids and friends hate you for renting or holding your view, you take it out on Garth. Grow a set!

It’s okay, Garth’s built like a Rhino, your discontent only fuels our belief in the end game and acts as pure indicators to this emotional process on RE.

Laziness, Greed and Posturing – Your Done!

Replaced by Disbelief, Blame and Pain!

I wont feel sorry for you, there is life lesson in it and shame on me if I intervene!

#46 TurnerNation on 01.08.12 at 8:13 pm

This byzantine weblog is too big to fail!!

#47 Herb on 01.08.12 at 8:16 pm

Ya just gotta have the last word, don’t you, Turner. Ya just can’t let yelps nip at your ankles and try for a bit of self-significance. No, you’ve just got to get out the statistical bludgeon and beat them to death!

#48 Realtors in a Panic on 01.08.12 at 8:25 pm

Without a doubt the numbers show and prove a monster housing bubble in Canada. Realtors know it and yet they will lie for a dollar. They know buyers would be stupid to pay current inflated prices. Realtors are talking about a 25-40% correction. They will never admit it in public but bebind closed doors they are in a panic. Think US style crash.

#49 Daisy Mae on 01.08.12 at 8:29 pm

“None of your predictions have become true and I guarantee they never will be. You are such a chicken cockroach who cannot take any criticism, be a man for once.

Several times each day words like that, and far worse, show up in the queue of comments waiting to be published on this blog. They don’t make it. I trash them. After all, they add nothing to the discussion here. And almost always they come from realtors or haters.”

Wow! Unbelievable. Or, maybe not. Which one of your predictions has NOT come true? I guess all you can do is consider the source….

You have one tough skin!

#50 Cory on 01.08.12 at 8:30 pm

I don’t know. Logic does notprevail here it seems. Condos in Calgary are being built at a fast pace like they are missing some boom or something. Are developers this stupid?? Must be true. Asking prices still ridiculous levels but hey, they must be selling since prices are not really moving too hard to the downside as one would think.

I keep thinking wife and I are not too bright, but then I remind myself how our net worth, very very liquid, continus to risesubstantially, whil we still rent. We use our capital and make more than our rent in a year. So, let them have real estate, I will take “real” returns.

#51 smartalox on 01.08.12 at 8:36 pm

Garth, I think your chart of home prices versus incomes is the key: people looked to real estate as a get-rich quick scheme to compensate for the stagnation in wages. I’d be interested to see the correlation with income inequality in the same time frame.

#52 Realtors in a Panic on 01.08.12 at 8:37 pm

Wow…look at all the out of work realtor shills working overtime on garths blog. If RE was doing well they wouldn’t be here. The number prove RE is 50 % overvalued. Even HAM is walking away. Condo flippers in the GTA are in trouble and the maxed out home owners are looking to sell before they go bankrupt . Realtors in private talk about a large correct both in price and sales volume.

#53 john saccy on 01.08.12 at 8:37 pm

In the end.. it does’nt even matter.

The Ponzi of every kind and type crashes.

#54 45north on 01.08.12 at 8:39 pm

pretty funny: bridal party on collapsing dock

ten years later, they can all laugh at their day in the drink but ten years later the Canadian population won’t be laughing at collapsing real estate prices.

The chart US versus Canada house prices is a stark warning. Here’s a quote from thehousingbubbleblog:

“‘The amount of wealth that was lost to the median family here in Florida is really staggering,’ he says. ‘If the median family of four in Florida were to save at twice the national savings rate, it would take something like 18 years to save back what they lost in home equity.’”

yet another warning: Utopia:

I asked her casually if things were really as bad in the States as we see in the news. “Worse” she said in a thick Southern drawl “you really have no idea”.

the chart suggests that we in Canada will suffer a shock twice that of the US – we are looking at a political revolution.

#55 Not 1st on 01.08.12 at 8:40 pm

Garth, these are direct quotes from that M Hanson firm you borrowed some graphs from.

“There will be a major repricing of risk to Canadian bank balance sheet as the world recognizes that the major banks are not nearly as insulated from a significant housing correction and associated economic weakness as currently believed. With unsecured consumer debt making up as large a share of retail assets as insured mortgages in most Canadian banks, rising loan losses in this segment alone will cause investors to dig deeper
into bank balance sheets….and they won’t like what they see.”

“Certain large Canadian REITS will feel the pinch as commercial vacancies rise and credit conditions deteriorate, particularly those with exposure to Ontario and western Canada.”

Doesn’t this pour some cold water on your bank preferred and REITs theory?

No. — Garth

#56 Timbo on 01.08.12 at 8:40 pm

great posting Garth…sad but true.

#57 Jas Girn on 01.08.12 at 8:47 pm

Very informative post! Still, this would not stay in the brains of millions of people, especially mommy in-laws. Garth, I am ready just like you! I have no debt and have a stable job. I am also liquid for at least two years, in case SHTF.

#58 Daisy Mae on 01.08.12 at 8:48 pm

Well, I’ve forwarded this blog on to many family members and friends….they’d better sit up and take notice.

#59 Smoking Man on 01.08.12 at 8:55 pm

#168 OnlyTheBankersLaugh on 01.08.12 at 1:42 am

140 DA, Excellent response on value of independent thought & development of creative infrastructure that university education can provide but expect to catch some flak from Smokin’ Man

Going to school is no substitute for education. SM 2012

I’m not going to give anyone any flak, you want to spend 50 thousand dollars collecting certificates to hang on your cube, that in today’s world equates to a certificate of obedience and glorifies that you can memorize and regurgitate.

20 years ago, when you wanted higher a education, you had to go to school. Not anymore almost everything ever thought or conceived is easily available with a cleaver Google search. The majority of the courses lead to jobs that will not be there, those jobs are getting offshored to cheaper labour markets.

Today your only hope for success is the be your own boss, Our education system goes out of its way to suppress this fact. Their goal is to churn out obedient happy tax farm slave.

And remember:

By Socrates
An education obtained with money is worse than no education at all.

#60 kim on 01.08.12 at 8:58 pm

The numbers clearly prove a bubble in Canadian RE. Even my girlfriends dad who is a realtor has advised her not to buy for at least a year as he expects 15-20% in 2012. Thanks garth for the numbers and grafts . Now I understand why her father told her not to buy. Its easy to see when you have the numbers in front of you.

#61 Tony on 01.08.12 at 9:00 pm

The 80’s boom in real estate at least in southern Ontario was from the fall of 1982 to the fall of 1987. No matter what crap you read property values peaked the third week of September of 1987. The 70’s boom era was more or less correct. The latest boom in southern Ontario was the summer of 1997 until around March of 2011. Remember the increases in personal tax rates especially surtaxes in Ontario. Also with budget shortfalls taxes will remain high or increase.

#62 Kevin on 01.08.12 at 9:00 pm

Looking at the graph comparing previous booms from 74 and 89 now. Consumer and mortgage debt has absolutely exploded in a lower inflationary period during the 2000’s.

Household debt to personable disposable income in 1974 was 56%.
Household debt to personable disposable income in 1989 was 71%.
Household debt to personable disposable income in 2011 was 153%.

Household debt to GDP in 1974 was 36%
Household debt to GDP in 1989 was 47%
Household debt to GDP in 2011 was 94%

#63 RE on 01.08.12 at 9:01 pm


Thank you for a very informative post. This post should be a sticky, for the rest to see for the future.

Most do not like to hear the truth. That is what the bubble is all about. Remember in 2000 when people said Nortel cannot go down.

#64 Matt on 01.08.12 at 9:10 pm

This post is very well written.

Garth, what is the influence of immigration and/or outsider investors (ie. the arabs of yesterday and chinese of today) on the house prices?

In small pockets, substantial. Overall, nil. — Garth

#65 Daisy Mae on 01.08.12 at 9:12 pm

#5 LS in Arbutus: “Also, has anyone noticed how almost daily there is a new article in the Canadian newspapers talking about the possibility of a bubble?”


That’s what’s so maddening….NOW everyone is saying what Garth has been saying for YEARS! Geez!

Well, I guess we can’t blame them. They’ve been listening to the media, CREA…they don’t all know about this blog. Garth, you can’t be reaching ‘billions’. So don’t blame yourself for all the stupidity out there.

#66 VanIsle Retiree on 01.08.12 at 9:12 pm

I can’t help thinking that there is one point that is raised repeatedly but gets ignored just as often in this discussion. As the percentage of CDNs who own a home (well, OK, they rent it from the bank) increases, the time will come when there are no more buyers left. As my broker used to note, a stock price is doomed when the shoe-shine boy is buying it. I can’t help but think that the shoe-shine boy has already bought. I think you know what is next.

#67 Van guy blazin kush on 01.08.12 at 9:18 pm


Everyone I try to recommend to this site has given me the same treatment you get. Even my pops keeps bitching at me for not buying. He resides in Richmond. His “assessment” has gone up. So how can I be right? Well, even after proving to him that there has been 0 sales for sfh in the Bridgeport area for 4 months. I still get the same ol treatment. I can’t wait until spring!!

#68 Tony on 01.08.12 at 9:25 pm

Re: #4 Roger on 01.08.12 at 5:59 pm

I’ve always considered the birthrate to be one of the most important factors.

#69 ajostu on 01.08.12 at 9:25 pm

One comment from an Aussie: I take issue with your list:

>Home ownership here has become a mantra, a universa goal. While Americans, Brits, Aussies, Spaniards, Irish and others disdain something they now know can bite, we clamour to buy in.

I would argue that at the moment the Australian market is very similar to the Canadian one. In fact the graphs you showed all looked eerily familiar.

With government grants to first home buyers, Australia arguably invented the 2000’s housing bubble. First to rise, last to fall? we’ll see. In the meantime, the usual spruikers are talking up real estate in Oz. And the influence of Chinese investment is also an intriguing side issue.

So don’t count Australia in with the “smart countries that have learned their lesson” crowd.

#70 bcpaul on 01.08.12 at 9:27 pm

Some info for the Shuswap area: Never seen so many repossessed homes for sale. Greedy somebodies refuse to take a loss and lower prices. Some languishing now over two winters with no tenants — not a good idea for homes in rural areas with wells and septic.

People continue asking $700,000 for homes that were $160,000 in 2003. Yep no sales on these.

I continue to see listings that are over 3 years old. No price reduction…zero. I guess they think the home value will reach the asking price soon!?!

Homes that are selling are taking quite a reduction in price.

Where are all of the Shuswap house horny Albertan saviors?

#71 Junius on 01.08.12 at 9:31 pm

#16 Trt,

I don’t know why you keep saying I recently bought a new home. I have stated many times that i looked to trade up in 2009 and decided not to. I was away for much of the holidays and suspect BPOE or one of his types posted as me. It wouldn’t be the first time.

I would not touch Vancouver Real Estate right now. In any event, I am not a real estate speculator. I do have a very conservative portfolio but mostmof my energies are in the business I operate and start-ups in industries I have special knowledge in. Not mining.

#72 tkid on 01.08.12 at 9:31 pm

Dorothy, why am I going to pay double for a house (this how much a house mortgage will actually cost over a 25 year period) that will lose at least 30% of its value over the next 5 years?

I rent, and I lack for nothing. I lose the job, I don’t have one huge mortgage hanging over my head, and I can pick up and move to where the jobs are. Right now I funnel as much money as possible into my savings account instead of shovelling it into the giant, vast, insatiable maw that is a mortgage.

#73 Boomer or Bust on 01.08.12 at 9:41 pm

I disagree with Garth that all the over 65’s will sell there homes. The majority of Boomers have no debt.

Show me concrete facts that demonstrate over 65′ year olds will sell there homes. In fact the opposite is true, Most old people stay in there homes for the last possible second. They love their freedom.

The boomer generation has guided history since the second war and yes R/E will continued to be influenced by Boomers. But they all will not sell, 10% 20% or 50% is anyones guess.

But I would not bet against R/E for one reason only, for that is flawed.
Good luck I will be living in a house that I own till the day I die, and so will you Garth.
I am interested in the response I get from people on the Blog, Keep track because I bet most old people are not going to sell.
And I will go further, most young people will not sell into na housing crash, because they believe in the long run R/E is a good investment, and it is. Maybe the next ten years will be difficult, but after that?
who knows?

#74 City Slicker on 01.08.12 at 9:46 pm

Garth I just heard on BNN that because so many are house rich they will be tapping into it via reverse mortgages.
I guess we don’t have to worry about all those boomers accessing the wealth from their homes.

I have addressed this in previous posts. — Garth

#75 Not 1st on 01.08.12 at 9:48 pm

What is the evolution from the book “After the Crash” where you were clearly in the doomer camp to your latest writings where you are optimistic if properly prepared financially. Isn’t that book After The Crash a bit of an anomaly or do you still advocate some its suggestions?

Try to keep up. — Garth

#76 DDCorkum on 01.08.12 at 9:52 pm

Good day,

This post was very well done. The graph at the bottom was an eye-openner in particular (pointing out the changing demographics and their impact on net buying/selling).

To be devils advocate, I would note that the age of net-selling will probably move slightly to the right due to people waking up to the need to work longer and put off retirement plans in an age when you live to 80+. Of course, this will have only minimal impact and it won’t negate the overall trend which you pointed out clearly.

#77 vatoDETH on 01.08.12 at 9:53 pm

I personally think all of these enemies are great! SUCCESS! You’ve set them off!

When I found Greater Fool 2 years ago, I was running out of resources to support Calgary bubble intuition. People are still convinced that we are heading back to the 2006 here. The levels in 2006 were not sustainable at that time. Why would they be now?

People didn’t make more money during the boom. Corporations made huge gains. Yes, Joe carpenter and Bill the plumber were able to capitalize on getting there own contracts during the boom, but where are they now?
Most of these little upstarts are gone now.

Besides what gains people did make during the short lived, never ending boom of all time got eaten up by housing costs. Greed is a bitch. Two years of boom for 35 years of debt at $450k. I guess the banks win that one.

#78 Habbit on 01.08.12 at 9:56 pm

Garth you’re bloody amazing. One of the best posts ever. Thanks

#79 BPOE on 01.08.12 at 10:00 pm

Vancouverites are smug for a reason. Limited land with HUGE WORLDWIDE demand. Do the math. Richmond went up 25% in one year which is around $250000. So a few coins down is called a healthy pullback. Anyone thinking there will be any major price reductions are truly the greatest fools. Only very high interest rates could cause such a tumble. By the way check out the mega building at the World Class Richmond Olympic Oval. This development is for winners and will sell out quickly. Very high priced for the creme de la creme of society
14 The Place to Be on 01.08.12 at 6:20 pm
Garth, you mention the gross overbuilding of condos in Vancouver. I live in the Okanagan where RE is DEAD, and was visiting the Vancouver area over the Christmas holidays (around 3 weeks).

Just got back and cannot believe how many towers are springing up around there. Many look to be near completion and many just starting the excavation with pre-sales. These developers all must be pretty confident in the future of the area.

I keep hearing the same old story on how desireable Vancouver is with Asians, etc who consider our prices still very cheap. Also how scarce land is there with the ocean and mountains.

To quote you, “in-demand areas will always attract buyers and maintain values”. Aren’t you now coming to the conclusion that parts of Vancouver (namely west side Vancouver and West Vancouver) are not expected to drop much in price? If so I hope you’re wrong as those areas will always tend to keep the other adjacent areas high.

I’m getting frustrated as I’ve been telling people about the bubble in Vancouver from reading your blog for a few years now and they all laugh in my face. I guess from now on I’ll try and shut up and wait (and wait) and see what happens by the end of this year.

#80 somecatchphrase on 01.08.12 at 10:00 pm

The average boomer is currently 50 years old.

If we have a fairly orderly decline, this suggests that peak selling pressure might not materialize for another 15 – 25 years, somewhere between 2027 and 2037.

Today’s post in one of Garth’s best ever.

#81 Westernman on 01.08.12 at 10:05 pm

Not gone, you goblin – just waiting for you to make your next stupid cheerleading statement about Sask.
I’m sure it won’t be long…

#82 Waiting for the sun on 01.08.12 at 10:08 pm

))) [garth] But aside from all else, there’s a bomb in our midst destined to go off. I’m ready. Are you?

Ready for what? You are calling for a gradual 15% drop in prices, and ridicule others who predict worse.

The initial decline will be of that magnitude, varying by regions. It will certainly not be the end. This is a multi-year event, as I have written. — Garth

#83 Nostradamus Le Mad Vlad on 01.08.12 at 10:09 pm

“None of your predictions have become true and I guarantee they never will be.” — Doncha jes’ luv it when something is guaranteed? What is the latest high and low price for Bre-x, Nortel, Enron, Dome Petroleum etc., and how healthy do their current statements and balance sheets look like? Good investment material?

“It’s earned enemies. It means danger has swollen, sparked a new orgy of buying [and a] sudden collapse.”

That’s one way of getting the wax outta one’s ears. Have a sudden and unexpected collapse! To remove the dust from one’s empty space between the two ears, insert a Swiffer BustDuster, clean thoroughly, add disinfectant then swallow and PUKE-O-RAMA!
#44 Onemorething — “Shanghai or Richmond take your pick!” — Seen Ditchmond and it sux, so I’ll go for Shanghai — eat some good Szechuan food there!

#52 john saccy — “The Ponzi of every kind and type crashes.” — Now it’s Oz’s, NZ’s and our turn. Then the west will have almost completed its cycle, and hand the reins over to the Yellow / Red races.
Splendid coupla days away. Don’t know where I was or what I was doing, but it sure was lotsa fun!
7:05 clip Laundered money, using bleach and suds, and 3:18 clip US$500 trillion. Who has that much? m$m “The reality is that just 6 gigantic corporations collectively own most of the major mainstream media outlets in this country.”; Dangerous 2012 — The Year of Living Dangerously with The Year of the Water Dragon (starts Jan. 23); Iran – Russia replace the US$ with local currencies; Visualizations Pix of money in comparison to other things; Meet Foster Friess He bought Iowa for Rick Santorum.
9:02 clip Iraq is an international war crime; 16:17 clip As per Libya, things are not going well in Syria for NATO, etc. and Russian Navy Fleet docks in Syria. Messes things up nicely; US – Venezuela US expels diplomat. “Venezuela’s oil reserves are incredibly rich. Venezuela, like Iran, does not engage in private central banking. Venezuela may be on Obama’s “to do list” after Iran to affect “regime change” because of those two issues.”; Straits of Hormuz Iran says it will block them if exports are halted, and Tapping reserves; Yes, it’s true Sheeple are moron-bimbos that can’t be helped; 1:15 clip Brainwashing. Most men don’t have brains.

#84 george on 01.08.12 at 10:11 pm

Ozzie Jurock was a guest on Michael Campbell’s radio show (Money Talks) yesterday (Saturday) on radio station CKNW in Vanvouver.

It is well worth listening to 2 minutes and 15 seconds of this interview where Mr. Jurock discusses recent house prices in Vancouver.

The link at the end of my post will take you to the audio vault page of the radio station. You do not have to register with the station to access the audio vault.

At the top of the audio vault page put the date Jan 7 in the first drop down box and 9:00 AM in the second drop down box. Then click on the “listen” link. When the page loads use the slider to fast forward to the 43 minute part of the program. Be sure to listen to the full 2 minutes and 15 seconds of the interview as there are two good quotes in it.

#85 Nick on 01.08.12 at 10:13 pm

I say Canadian ego and hubris are ripe for a correction all right…

#86 Habbit on 01.08.12 at 10:18 pm

#73 I will not be selling. Many I know will not sell as well. These are the ones with liquidity,pensions, savings. Those that have all their eggs in that one basket…… will likely have to sell. And there are many many of them.

#87 Ben Rabidoux on 01.08.12 at 10:19 pm

Well Garth I see you’ve gotten your hands on some of my research. To be fair, 6 of the 7 graphs were not “based on work done by MHanson Advisors”, they were lifted directly from my notes to clients. You’re welcome.

And since you’ll be using my work, might as well explain the graphs correctly: The 6th chart down showing the recent booms measures the change in REAL not nominal house prices, in case some of your readers are confused.

The basis for various graphs was, as I credited, a report by M Hanson Advisors. I note on your site that, “Ben Rabidoux is an analyst and strategist with M Hanson Advisors, a market research firm catering to professional, institutional investors.” It’s a good report. — Garth

#88 Uh Oh Canada on 01.08.12 at 10:20 pm

Garth- You are the only voice of reason in the real-estate world, that’s why we keep coming back. The numbers in the graphs speak for themselves…we are screwed. However, those who heeded your advice will be fine.

I suspect you replaced the original words of the comment with ‘chicken cockroach’. Come on Garth, tell us what he really wrote.

#89 Not 1st on 01.08.12 at 10:24 pm

Try to keep up. — Garth


I’ve followed your blog for 10 months and not once in that time have you squared your current advice with your previous recommendations in that book to buy a generator and a gun and head for the hills. The two don’t really line up so I and others would really like to hear the readers digest version.

I have a generator. You don’t? — Garth

#90 Pr on 01.08.12 at 10:27 pm

Thanks garth for explaining, simply, the real estate statue right now , with numbers and grafts, this will be great help to every one who wish to understand, i will passing this to every one i know, like all of us should do. But you cant save everyone! That is just the way it is! I am surprise that the bankers, are not, knocking at your blog, to shut up .

#91 Idustrial Guy on 01.08.12 at 10:29 pm

Hello Gath,
I looked up Chicken Cockroach with Google and could only find some odd reference to Karachi, Pakistan.

I think the economic policies of the sitting Government of Canada need to be reviewed for the true evil that they are. They were crafted to achieve the political Holy Grail of a Majority Government no matter what the future cost.

The average level of family debt in Canada says it all. We borrowed our way out of a recession spending money back stopped by an asset which is unstable and prone to breathtaking drops in value. The sad reality is … all this spending didn’t end the recession. All we achieved was to delay the inevitable and possibly make the situation a whole lot worse.Debt doesn’t magically go away. Sooner or later it must be addressed. A sudden increase in wages would lessen the burden but, does anyone think there is a great likelihood of that happening? Canadian consumer will be forced by rising interest rates to channel more disposable income towards debt payment, taxes, energy costs and things like car insurance. The demand for consumer goods will be taking the brunt of this shift in priorities. The shopping malls in this part of the country were not packed like sardines this Holiday Season. 40% to 60% off sale signs were everywhere.

Many young families will be left with no choice but to unload their particleboard castles for cash to pay down maxed out Credit cards and LOC debt …. If they still have jobs. Here in Ontario, major Government cuts are coming. The Federal Government is hinting of major cuts in staff also. Manufacturing plants are still closing. The new plants which are opening are paying $12.00 per hour and not the $26.00 per hour that their predecessors offered. Benefits? Pension? In your dreams. Just visit Windsor if you want to see what the real estate market in Canada could be.

Commercial and new home construction amounted to about $74. billion in 2011.
It’s no wonder the Bank of Canada is reluctant to end this fire sale on debt.

Happy New Year. Bonne Année

#92 truth hammer on 01.08.12 at 10:39 pm

The governments nihilistic attitude on personal debt is quickly reaching an inflection point as shown by these graphs. Inflation and debt are outstripping incomes and imported wealth. Of course we know why…the government is desperate for cash to support itself and the millions of luxury living hangers on. When the crash happens….look for a big increase in taxation. The last to fall will be the big unions…….at the expense of everyone else of course.

#93 Keeping the Faith on 01.08.12 at 10:45 pm

You Hoooo … Stevenson where are you?!?!?!
I want to laugh at the pumpers response to this Monster-Blog from Garth today!

Garth got Game, what do you have?

#94 McLovin on 01.08.12 at 10:54 pm

Buddy got his assessment in Kelowna. He owns a 2 br condo with great view of the lake in the Skye building. Paid $660,000 presale in 2007 incl GST. Took possession in 2009.

2011 Assessment $631,000
2012 Assessment $541,000

Drop of 18% in 1 yr and over 20% from his presale purchase price in 2007.

Truthfully, if he had to sell the place he would be lucky to get $500,000. So he is down about 25% and there is no bottom in sight.

Hey DA, tell us again how things are “not as bad as you think” in Kelowna.

I have said it many times, Kelowna is ground zero for the crash and will not stop till prices drop 50%.

#95 TheFirstRick on 01.08.12 at 10:56 pm


As an original follower, buyer of all your books and believer in your message overall, YOU ARE DESERVED OF SOME SERIOUS CRITICISM!!!

I know things change, we all conveniently ‘forget’ your message in 2008 suggesting generators, cash on hand, buckshot, squirrel recipes, no interact, etc. I suspect many of your minions haven’t been around long enough to remember the message from start to now.

A few years ago you seemed to support the premise of housing being unaffordable to the working middle class, and predicted an economic crash. Today, you constantly give us target examples of people earning large at a young age or have a million dollars in cash to either buy a house or invest. What should they do? Christ, you are using these extraneous examples to make your point. In keeping, your online minions have all morphed themselves into investment gurus and financial genius’.

Great, lets all party, we are online and anonymous financial experts!!!!

Garth, nothing you ever said or published was wrong in theory. Unfortunately (or fortunately??) things didn’t come to fruition as predicted because of governmental meddling in the financial markets, you couldn’t have predicted this, basic economics was run off the road.

But PLEASE, stop publishing ‘letters’ from 28yr olds claiming to make $90K per year or people with a million in the bank asking the obvious. To me, this seems like a feeble attempt to appear ‘right’ in only a microcosm of the original message. Focus on the average Canadian, not the anonymous internet millionaire. I’m certain none of these Warren Buffetts in disguise ever bought one of your books.

Admitting things didn’t turn out quite like your originally suggested will only garner you more respect, not less. Not doing so only gives the ‘haters’ and ‘Realturds’ a little more ammo.

You are so 2008. — Garth

#96 Renting in Toronto on 01.08.12 at 10:57 pm

I was looking at properties for sale in Maui, Hawaii last night. That put an end to any desire I had to buying there, and can’t help but think it foreshadows our future here. Condos there, with comparatively dirt cheap propert taxes, a short walk from the beach that were assessed at 500k+ in 2007 now priced at less than 200k (some for 150,000) and sitting on the market for 500 days and more.

#97 Ed on 01.08.12 at 11:08 pm

@#73 Boomer or Bust
“I will be living in a house that I own till the day I die…”

This boomer agrees. I’ve already figured out where to install the lift for getting up to the second floor if the knees become weak. Why would one leave a home after so much care and attention has already been invested in it? Why give up a place to which one’s children and grandchildren are emotionally attached? It takes years to build up the soil and find the plants that do well in the various micro-climates on the property. Why give all that away?

#98 T.O. Bubble Boy on 01.08.12 at 11:09 pm

The saddest part of this story is that the statistics noted here have actually been out-of-whack since at least 2006 (when F first released the mortgage debt machine with the 0/40 party). Maybe even 2003, when CMHC got rid of the cap on mortgage insurance.

Somehow it has taken 5+ years for the media to pick up on this story. Near-zero interest rates have masked the bubble with the affordability hoax since 2008-2009. If someone is able to apply for a mortgage online, you’d hope that they’d be able to google “interest rates in canada” and find that the Bank of Canada rate was 3.5% higher just 4 years ago — which would take a $1900/month mortgage payment ($400k, 3%, 25-yr) today and turn it into nearly $2700/month.

#99 GregW, Oakville on 01.08.12 at 11:13 pm

Hi #82Nostra, Is it just me or does the Iran thing just seem like a really really bad movie rerun? It sure seem like the inmates are running the insane asylum yet again. With everyone in the room knee deep in gasoline threatening to light the first match. And some are just dumb enough to let it happen yet again, I’m sorry to say. What are they thinking, or are they?

#100 renting & waiting on 01.08.12 at 11:18 pm

I was comparing rents in Kingston, ON to Vancouver, BC. Kingston rents seem to be at par or higher!!!

Granted, I don’t know for sure what/where the places in Van are. I know what you get here for your money though, and it is not a good go. Toilets up on steps, minimal square footage, doors that don’t shut properly, fire code violations, bad neighbourhoods, etc.

This is not a good city to buy OR to rent in, particularly since mature renters are competing with silver-spoon student renters (Queen’s U) who think it’s a ‘cool experience’ to pay huge $$ for absolute slum conditions.

Ugh, I need out of this town.
Either that or i need the magic moment when sellers realize they have to lower their prices to finally materialize.

#101 InvestorsFriend (Shawn Allen) on 01.08.12 at 11:24 pm


Renting in Toronto at post 94 is afraid to buy a condo in Hawaii apparently on the simple basis that the prices are 60% cheaper than a few years ago and they are now taking a very long time to sell.

Duh, this is a buyers market a paradise for an astute buyer who actually wants and can use a condo in Hawaii. (And who consequently would not be looking to sell it again any time soon).

It’s so typical of why most people in fact buy high and sell low, rather than the opposite.

This Toronto Renter does not recognise a bargain when it strikes him in the head like a two by four.

#102 renting & waiting on 01.08.12 at 11:31 pm

^Yes, Toronto Renter, can you explain why super low prices are preventing you from wanting to buy in Maui?

#103 BPOE on 01.08.12 at 11:35 pm

Bottom line as stated before a person goes to University or College with the dream of owning a home. No parent and I mean NO PARENT dreams that one day their child will be a renter. Renting has always = shame
Even persons renting following Garths balanced approach only do so that they can make money and one day be part of the Winners circle
7 Van guy blazin kush on 01.08.12 at 9:18 pm

Everyone I try to recommend to this site has given me the same treatment you get. Even my pops keeps bitching at me for not buying. He resides in Richmond. His “assessment” has gone up. So how can I be right? Well, even after proving to him that there has been 0 sales for sfh in the Bridgeport area for 4 months. I still get the same ol treatment. I can’t wait until spring!!

#104 Edmonton Citizen Here on 01.08.12 at 11:35 pm

I’m suprised the Conservative Gov’t of Canada has allowed credit to run out of control in this country causes these over inflated house prices the will probably plunge over the next 24 months. In Edmonton here the Provincial Conservatives have been just as rotten to the middle calss & singles through out the entire province of ALberta. They’ve sold & deregulated our resources, including Power, Gas Oil and water!
This is what has happened in ALberta with a government I don’t like: Electricity shoots up 175% in the last 12 years, groceries up 80%, Gas up 140% (all do to deregualtion & aloowing massive deliver charges which went up 440% or more in the Province of ALberta.
Property taxes up 150% in Edmonton, Wages UP ONLY 35%!
Yes the bubble will pop pretty badly in ALberta since everything costs 40% more than the rest of the country!

#105 Snowboid on 01.08.12 at 11:39 pm

#93 McLovin on 01.08.12 at 10:54 pm…

We looked at a rental at Skye, a sub-penthouse. It had to have cost the same or more than your friends’ condo.

They wanted $ 1400 a month, most utilities included as well as 2 parking spots. We passed because it was too small and there was still better deals around.

Not sure if prices will go down 50%, but who knows – the place we bought in Arizona lost about 65% of its’ value from the peak in 2006.

#106 Canned Goods and Buckshot on 01.08.12 at 11:46 pm

Regarding the 6th graph comparing the booms: What is being measured on the horizontal axis?

#107 Island Girl on 01.08.12 at 11:57 pm

#101 BPOE

I don’t know how you came up with the idea that Renting = Shame and that renters are only renting to save up enough money to buy and become a “winner”. We’re renters and we’re happy where we are at. We briefly became so called “winners” but later realized that we were in fact bigger losers than if we had said just renters. Even now, sure if we could buy I’ve got my eye on a place, but it’s not the house that’s calling me, it’s the 30’x60′ greenhouse and expansive vegetable gardens and fruit trees that I want. The house is just shelter to live within. Would I buy? Sure, if I can make a 25% down payment and mortgage it for less than 25 years max, otherwise I’ll happily rent. At least when something goes (like the fridge did) I can just ring up the landlord for a new one, no money out of my pocket!

#108 Tiffa on 01.09.12 at 12:00 am

Almost as disheartening as watching people I know look for places to buy *now* is listening to folks talk about pouncing and vultching on multiple investment properties “in a couple of years” as if then prices are going to head directly back up again.

Right here you’ve got Garth demonstrating the real potential for prices to drop substantially and stay down for a generation, but still people rub their hands together as if they’re clever, just waiting to leap into the market.

It seems to me that, in terms of investing (not just buying a home for your family and treating it as a cost of living) the point is to stop looking at real estate altogether. Leave it alone. I really wonder if today’s vultures will still be chomping at the bit when we get a real look at a serious drop in values, or if they’ll experience the same psychological shift as everyone else.

#109 neo on 01.09.12 at 12:01 am

The difference between this year and last year in the GTA was that after May last year prices went down but then recovered in November and December to close to the May highs. That didn’t happen this year because the macroeconomic environment finally wore the market down. Whether this is an anomaly or a trend we will have to wait unti the Spring selling season for confirmation. At that time it will be obvious to the most lay person that the economy is weakening and we may finally see housing begin it’s multi-year decent. All realtors are holding onto right now is Spring. Unfortunately, it will be too late for those who waited for the confirmation. They should have sold last Spring.

#110 Alan on 01.09.12 at 12:13 am

1, If everything goes according to Garth, property prices will fall on average 15%. That takes us to RE prices of a year ago. Don’t see any real problem there.

2, Experts predicted in the mid-1990’s that the days of large houses owned by families were over. The days of the big white elephant was upon us. That never happened and the idea that Baby Boomers will have no one to sell to is completely false. It has been proven that BB don’t want to leave their homes. They stay in them until the end.

3, The Canadian economy is so dependant on RE and it’s direct and indirect businesses that feed that business, the federal government will not raise interest rates to cause problems with the largest investment most Canadians own and cause economic disruption.

4, Most importantly, what we are witnessing is the separation of those that own real estate and those that will forever be priced out of the market in major cities in Canada. This is a direct result of the Internationalization of Canada. Canada has joined the top class of countries in the 21st Century. This is the final outcome of today’s economic real estate cycle.

Real estate will continue to be Local. Outlying areas will continue to have pressure due to the lack of International interest but will benefit from people who want to own RE but are priced out of the major centers.

Perfect example of this is Rome, Paris, NYC, London -prices are still outrageously high despite all the RE down cycles, there are still buyers for good quality RE in the best locations.

People like you are responsible. — Garth

#111 Snowboid on 01.09.12 at 12:14 am

#73 Boomer or Bust on 01.08.12 at 9:41 pm, #86 Habbit on 01.08.12 at 10:18 pm, #95 Ed on 01.08.12 at 11:08 pm…

To each their own, but sitting in home till the day you die seems so ‘pre-boomer’.

Instead of installing a lift to hobble around on a second floor, I would rather feel my hair blowing in the wind as I opened the Sporters’ throttle on the freeway onramp.

Okay, I’m actually nearly bald and don’t own a Harley – but you get the idea.

I’m not convinced our various offspring have any emotional attachment to the homes we owned, but do know they have an emotional attachment to us.

I agree that a large number of boomers are ‘stuck’ in a potential house-poor existence, and their lives will become miserable when the costs to maintain those properties (taxes, maintenance, utilities, etc) are unbearable. Then it may be too late to sell.

I do have boomer friends and relatives that have just found out in the last couple months that they can no longer increase their HELOCs – I suspect the prospect of down-sizing is in the works for some of them (if they can sell).

I still like the idea of buying a home again in the Okanagan, but will wait until it costs less to own than rent.

#112 nonplused on 01.09.12 at 12:17 am

Nice post tonight Garth, you always come back from the weekend refreshed, it seems. I agree, “through the goal posts”.

Nice photo too. I wish I had thought to have a wet bridesmaid contest at my wedding too. Nicely done, whoever you are! Oh well they are all showing up one by one in the new hot tub. You can’t put a price on some things.

#113 Stevenson on 01.09.12 at 12:18 am

Wow Garth you really do keep on changing your predictions as time goes by. So we discover there is major crash but then it may be possible in the next few decades? Then the areas with high demand may be able to avoid price drops? Aren’t theses locations such as Toronto and Vancouver the areas with the flashing signals of a “bubble”? Maybe not chicken cockroach but being wrong? So far YES.

Do you know the proper advice in your book Greater fool would of been Garth? Max out what you can mortgage and buy the most expensive property you could afford. Then sell it 3-4 years from now.

The RE prices have kept on appreciating while all signals point to a bubble 3 yrs ago. How are we not different?

When you learn to do research you’ll find I’ve long believed we will have a sharp correction of 15% nationally (much more in areas that deserve it), followed by a multi-year melt within a stagnant market sellers will hate. Oh yes, and realtors like you. — Garth

#114 martin9999 on 01.09.12 at 12:25 am

garth is right but he has beeing calling this real estate down turn to early, and ceartanly he still is.

he doesnt understand that the mass will borow till they can. so preatty the feds are calling the shots here.

whatch and learm debt hitting 160percent this year and probably 170 next.

one thing is for sure tho, longer it takes worst its gonna be

The mass is already lost. I write for those who listen. — Garth

#115 Junius on 01.09.12 at 12:29 am

#79 and #101 BPOE,

On the first post you parrot your own posting under another name and on the second one you try and shame people.

Which adjective should we choose for you? Desperate? Ridiculous? Deceitful?

All of above. I guess you weren’t showing this weekend because you sure spent a lot of time here.

#116 Junius on 01.09.12 at 12:39 am

#109 Alan,

Thanks for adding yourself to the long line of desperate realtors coming here today to flog their B.S. You, BPOE (and his many names) and Stevenson. If the bursting of the bubble was only about seeing an end to your type I would be enjoying myself right now. However, sadly, it will hurt us all. Just those of us who saw it coming a bit less.

#117 Snowboid on 01.09.12 at 12:39 am

#105 Snowboid on 01.08.12 at 11:39 pm…

Correction, the home we purchased in Arizona only lost 56% (not 65%) of its’ value from 2006.

#118 Peter on 01.09.12 at 12:46 am

I’m with Island has to be a productive piece of land of some size,not just a suburban house .
In the future the value of each will be markedly different.

#119 Van guy blazin kush on 01.09.12 at 12:52 am

“And while in-demand areas will always attract buyers and maintain values, most markets in the country won’t.”


In-demand areas?? Can you specify which areas you think are high demand? I can think of only Van and T.O???

Areas = neighbourhoods, not entire cities. — Garth

#120 Peter Pan on 01.09.12 at 12:53 am

I know I’ve been begging my deep-boomer 62 year old sister to sell her house in the Anglo Montreal Ex-urbs… I basically told her it’s never going to get as good as it is now… 10 years ago, there were always tons of “A Vendre” signs in her neighbourhood… Now there are few. Cheap rates and the “I can swing that” mentality are dangerous elements of creating a housing bubble. She’s finally willing to list her huge over-sized house this spring.

#121 Van guy blazin kush on 01.09.12 at 1:00 am

#103 BPOE on 01.08.12 at 11:35 pm

It’s not that I can’t afford to buy. I just don’t want to get screwed with debt and risk. I’m positive at this point prices are not rising. So I will wait it out and look to buy when it’s cheaper. Ive waited till now, no rush waiting for even 2-3 more years. I’m not feeling any shame for renting.

#122 Dorothy on 01.09.12 at 1:10 am

Garth – you say I “don’t get it” yet you yourself own your own home. If I’m totally wrong, I don’t understand why YOU don’t sell into a falling market and rent. But the fact is that I’m not totally wrong, am I?

#123 Dorothy on 01.09.12 at 1:11 am

#38 – Not 1st
As Real Estate prices are dependent on a local, not national, market there are many places where first time buyers can buy a nice home for a heck of a lot less than the $700,000 you mention. And for those that do live in more reasonably priced ‘hoods, home ownership is definitely affordable provided they go about it in the right way, and don’t get in over their heads.

If I lived in a market like Vancouver or Toronto I’d be renting too. But here in the North Okanagan one can buy a very nice 3 bedroom home for less than $240,000. And there are many other markets that are even more affordable than here. Some of those markets never saw the huge price increases in the first place, whereas others (such as in my own area) have softened considerably since the recession hit, and are probably still on their way down. But the fact remains that both prices and interest rates are currently lower than they’ve been in years, and with some serious negotiating I’m willing to bet there are some real deals to be had out there. But one will never know unless one tries.

I only mentioned a 25 year amortization as a maximum; obviously the shorter the amortization the less one will pay for the house over the long term. But the amortization should never be longer than 25. My advice would be to put down a minimum of 10% and then go for as short of an amortization as you can reasonably afford, without having to live on bread and cheese, and take advantage of the 15% annual prepayment you’re allowed to make without penalty. By doing that (together with making weekly instead of monthly payments) I was able to pay off my first mortgage in 12 years (despite starting out with a 20 year amortization). A strategy like this will save you thousands of dollars, and once the mortgage is paid your paid for home WILL be cheaper than renting.

#124 Van guy blazin kush on 01.09.12 at 1:12 am


The development beside the oval is River Green. This building had prices starting in the high 300’s for a 1 bdr. Phase one has not yet sold out. Phase 2 is not even selling yet. This is suppose to be a high development in Richmond? Why would you want to invest that much $ into a Richmond condo? That’s pathetic as it gets. I have no idea why you think Richmond is a good place to invest. Only reason why you may think this way is because you have some property in Richmond and you cant off load it now.

#125 monte in van on 01.09.12 at 1:20 am

Garth, thanks again for another great post. My parents got their recent property assessment that you commented on a few blogs ago. They have a 60 y.o. house in Burnaby. Their house was assessed at $900K. What a joke. Although their neighbourhood has been popular with HAM, not a single older home has sold anywhere near that amount and that is WITH the recent craze this past year. (which has now stopped I think) What a scam the city gov’ts have going on. There is no way their house would sell for that amount. So thankful that we are still renting.

#126 Dorothy on 01.09.12 at 1:22 am

#72 – tkid
It’s true that home ownership can make you less mobile when it comes to looking for work, which is one of the reasons home ownership isn’t for everybody. If you’re young, footloose and fancy free you’re probably better off renting. However, for people with a more stable lifestyle who WANT to buy a home, and have the financial wherewithal to do so, prices and interest rates are lower than they’ve been in years, so if they live in an area where prices have softened enough to make home ownership affordable again, they shouldn’t let all the doomer talk on this blog put them off buying.
Prices in my area have dropped a lot in the last 18 months, with many homes selling for a lot less than the asking price. And I’m sure there are other areas of the country where the same is true. So for those who’ve saved a decent downpayment, are not swimming in debt, and have a secure job, why shouldn’t they try to negotiate a good price for a home they’d really enjoy living in? Just as homeownership isn’t for everyone, neither is renting. To each their own!

#127 Mister Obvious on 01.09.12 at 1:26 am

#97 Ed

“Why would one leave a home after so much care and attention has already been invested in it? Why give up a place to which one’s children and grandchildren are emotionally attached?”

Really Ed… how many times must it be repeated?Certainly anyone who doesn’t need to would sell their cherished “memories”.

But for thousands of innumerate and financially illiterate boomers a house will be the only significant asset at the approach of the twilight years. The information presented in today’s blog screams out that the future of that particular asset is bleak indeed.

One will need to pay the usual costs of living right up until the end. One can’t do that with memories and drywall.

Kudos to you Ed if only 30% or less of your net worth is wrapped up in your clear title home. You may take a seat on the sidelines.

#128 poco on 01.09.12 at 1:28 am

#94 McLovin on 01.08.12 at 10:54 pm
Buddy got his assessment in Kelowna. He owns a 2 br condo with great view of the lake in the Skye building. Paid $660,000 presale in 2007 incl GST. Took possession in 2009.
2011 Assessment $631,000
2012 Assessment $541,000
Drop of 18% in 1 yr and over 20% from his presale purchase price in 2007.
Truthfully, if he had to sell the place he would be lucky to get $500,000. So he is down about 25% and there is no bottom in sight.

Hey DA, tell us again how things are “not as bad as you think” in Kelowna.
I have said it many times, Kelowna is ground zero for the crash and will not stop till prices drop 50%.
your friends place is about on par with many condo developments within the tri cities
don’t know what last years assessment was for these three but i have a strong feeling they have dropped considerably also (probably pre sales also)all around 1000 sq ft.
#1401 1185 High St Coq–bought in May09–497.9k–now listed for 429k—assessed for 2012 at 392k

#1701 1185 High St Coq–bought in Apr 09–527.9k–now listed at 480k—assessed for 2012 at 404k

#1901 1185 High St Coq–bought in May 09–537.9k–now at 455.9k–assessed for 2012 at 410k

***Van guy blazin kush — take note –these are the ones we were discussing before xmas—you didn’t do your homework

#129 TheRealTruth on 01.09.12 at 1:30 am


My apologies…someone stated a while back that you had purchased.

#130 Nostradamus Le Mad Vlad on 01.09.12 at 1:34 am

#97 GregW, Oakville — “. . . the Iran thing just seem like a really really bad movie rerun?” — Yo Greg.

If Iran does close the SoH, the west will feel the pain (instant rising gas prices), so it is not to their advantage. Methinx it is posturing on both sides, ‘tho with the link a day or two back, it seems Iran has the west over a barrel.

Iran’s non-nuke missiles have been upgraded with GPS on them, a lot of them targeting Israel’s chemical and nuke WMD. The west can’t do very much about it, except to yell and scream a lot.

Since the Islamic Revolution in 1979, Iran has invaded zero countries. The US and Israel — the list is quite extensive. Better description here on the SoH, and here.
Iran’s Oil and Gas = Death of the western empire, and Reshaping World; Strange Money for strange times; Selling Chopsticks to China and other related stuff; Mitt Romney and the others (except Ron Paul) are abject failures. If Romney wins the Repub. nod, it will hand Obama a second term; 8:06 clip The real truth about the economy; Light Bulbs The replacements are slightly more expensive; Lloys and RBS New credit losses; 11:38 clip The Euro, debt crisis and garage sales.

Cyber Crime “The world’s banks have built a wall of silence around their losses, fearing a dramatic loss of confidence in the banking system if the true scale of the cyber criminals’ operations were ever made public.”; Germany; Euro drops; Iran and oil; US Fed Are they still alive? Japan “. . . Japan finally has a trade deficit.”; Garth and John Mauldin Joined at The Tragically Hip; IMF Substantial cuts?
Fukushima Not the best of situations; 3:50 clip “You can shine your shoes and wear a suit / You can comb your hair and look quite cute / You can hide your face behind a smile / One thing you can’t hide / Is when you’re crippled inside”; David Cameron forcing Scots to take vote on independence; Dirty Polytix Was it ever clean? Loose Nukes Are they still around from the USSR days? Pakistan – China Kiss the US adios; 18:35 clip Opposition to Agenda 21 (the NWO).

2:15 clip Population growing? Relax! We’re shrinking (not my waist); US rescue seems to involve a lotta BS.

#131 JohnG on 01.09.12 at 1:45 am

I am in a spot. I have a very nice piece of land in a highly desirable (for now) cottage area. I want to develop it immediately while the kids are young to get max enjoyment with them as they grow. However, I know that 10 years ago property (with a cottage) was around 75K. Today you cannot get the property for that. I expect that during the next few years listings will start to flood in, and/or the costs of building will drop…but a few years in “kids” is all kinds of difference. Financially I am able, but on the flip side I love the liquidity I have now, and the regular 4-5% it’s producing (we could have a major family trip anywhere each year just with the interest). We have outgrown our house in the city, but it’s good enough to wait it out until some sanity to return to the market. City house – bought 1999, paid down aggressively. No other major debt. So what to do? stay invested or try to connect to the kids and nature?

#132 TheRealTruth on 01.09.12 at 1:45 am

To all the boomers Harping that they will never sell their homes: A little news from the younger generations…

Well the under 40 crowd is eventually going to get sick of paying more taxes for your increased healthcare needs…

Maybe make healthcare for seniors like welfare… if you have assets (a paid off house), then you pay for your own healthcare… or the other option is privatization until at least this demographic bulge passes. Leave emotions out of it…just telling it like it is.

#133 An Cat Dubh on 01.09.12 at 1:54 am

I believe the US numbers are inflated. With 4 million foreclosures predicted for 2012. The values are like Vancouver and TO. With the few homes selling are of the high end of the market which raises the average price. Hopefully you keep the blog running for 2012.

#134 Gord In Vancouver on 01.09.12 at 2:00 am

Home ownership here has become a mantra…..
…. Is this a cult?

Does it rain in Vancouver?

#135 chubster on 01.09.12 at 2:02 am

more imminent than boomer demographics is sovereign defaults. $7T sovereign paper will need to roll this year. sovereign debt levels are near sustainability limits in all major western economies. europe first, japan next, then usa. default directly on bondholders or print. the mother of all credit bubbles ends here.

#136 patsan on 01.09.12 at 2:10 am


There are sure herds of frothed “creme de la creme of society” that cannot wait to secure a spot under an YVR runway corridor, next to Olympic Oval, to have an unobstructed smell of kerosene from taking off planes. There are also rumors that the developer is going to throw a free yearly hearing test for 10 years along with free earplug supply for the same period for first 200 buyers.

#137 Devore on 01.09.12 at 2:17 am

#73 Boomer or Bust

I disagree with Garth that all the over 65′s will sell there homes.

How can you possibly disagree with something no one has said?

#138 Trailer Park Boys on 01.09.12 at 2:47 am

Hey…WTF ????

We had scalped tickets.. we should be #1 in GF Blog line.

#139 Oldtimer on 01.09.12 at 3:25 am

#132 TheRealTruth on 01.09.12 at 1:45 am

Hey toddler, you will be there to and faster then you now think!


#140 Canuck Abroad on 01.09.12 at 3:27 am

The home ownership thing is deeply ingrained in a generation I’m afraid. Recently spent Christmas with friends and as much as I like them, the woman does go on every single time I see them about how I should buy a place. Even when I bring up moving overseas, she says something like, “oh you could just buy a little 2 bed flat to use when you visit, my friend so and so did…” and then I get the story of the friend for the tenth time. They have children the same age as mine and I feel a bit sorry for the kids because I know they are getting the same pitch as me but every single day.

Expense aside, why would I want the hassle of maintaining a pied-a-terre thousands of miles away from where I live when I could just stay in a hotel when I visit. “Oh, you could rent it out!” she will say. Yeah, I want to be a long distance landlord and fill out and extra set of tax returns while I tie up all my money…

#141 Canuck Abroad on 01.09.12 at 3:40 am

8 TurnerNation – I like your posts, you find some great examples. Re this studio, I don’t think it would ever rent for $1350. Have been looking for bachelors for one of my kids and there are literally dozens (probably hundreds) that can be had for under a $thousand. So anyone who bought this and tried to rent it out for $1350 would probably watch it sit empty until they cut the rent.

#142 betamax on 01.09.12 at 4:27 am

#73 Boomer or Bust: “Most old people stay in there [sic] homes for the last possible second.”

You’re confusing current old-agers with boomers. Different generation, different spending/saving habits, different outcome.

#143 betamax on 01.09.12 at 4:40 am

Distilled bull argument: “Something hasn’t fallen yet, ergo it will never fall. Gravity’s been repealed.”

– popular argument at Nortel,, Wall Street pre 2007, David Lereah’s previous place of employment, every other bubble in history, the Hindenburg, etc.

#144 P & T S on 01.09.12 at 5:08 am

Just a thought, but with the rapid escalation in house prices (not value), there has been adirectly comparable escalation in the “perceived wealth effect” which itself has propped up quite a lot of discretionary spending – from eating out to the big ticket items (boats, cars, New RVs, etc), so it’s reasonable to expect that a slowdown in “price appreciation”, and, Heaven forbid – “Negative Growth” might have an immediate and pretty devastating effect on “perceived wealth”.

So – what’s going to happen to all those jobs dependent on the “easy come, easy go” home finance mindset? And – the long trail of “jobs dependent on jobs” which will include a lot of Civil Service and Manufacturing positions?

We’ve seen what happened in the US, and their correction could be argued as being “quite modest” in comparison with what COULD be heading for Canada.

“That’s NOT the light at the end of the Tunnel, it’s the approaching Express Train!”

Thoughts, please folks??

#145 edm guy blazin' kush on 01.09.12 at 6:11 am

Received my tax assessment in the mail on friday (Brand new 2-storey detached house in upper class neighbourhood in Edmonton) Property assessment value dropped $30,000 from 2011 value to 2012 value! That’s enough indication for me, thanks for opening my eyes Garth… I’m peacing out !

#146 Aussie Roy on 01.09.12 at 7:00 am

Aussie Update

There is NO BUBBLE in Australia, 2012 will be a boom year says “paid RE spruiker” – LOL.

Some comments on this article are classic.

Housing – When the dumb money is rushing into the market, it’s probably a smart time for you to bail.

Construction industry still shrinking.

The Reserve Bank’s decision to cut interest rates twice at the end of last year has done little to support the construction industry.

Activity in the sector contracted for the 19th month in a row, a private survey has found.

The monthly Australian Industry Group/Housing Industry Association Performance of Construction Index rose 1.4 points in December to 41.

A figure below 50 shows that the industry is contracting, while a figure above that reading indicates expansion in the sector.

#147 Canuck Abroad on 01.09.12 at 7:04 am

80 / somecatchphrase – “The average boomer is currently 50 years old. If we have a fairly orderly decline, this suggests that peak selling pressure might not materialize for another 15 – 25 years, somewhere between 2027 and 2037…”

Absolutely not true. Boomers are minimum 47 years old right now, and that’s if you believe the boom ended 1964 (some believe the boomer birth period ended earlier). The average is a decade older (late 50s now). So peak selling will occur in as little as 5 – 8 years.

#148 big T on 01.09.12 at 7:36 am

the big climb in real estate started with the repatriation
of Hong-Cong, coincidence?

#149 GregW, Oakville on 01.09.12 at 7:49 am

Hi #130Nostra, I’m assuming the GPS you mention is not the USA system, which the USA can switch off or just decease the accuracy. I know Russia has a GPS system; I’m not sure about China, or if they sold receivers to Iran. I wonder if Iran installed an automatic optical camera based targeting system for final approach? (I hope no one start the shooting!)

#150 Mr Buyer on 01.09.12 at 7:55 am

The following is from a comment above…

I do have boomer friends and relatives that have just found out in the last couple months that they can no longer increase their HELOCs

Another anticipated mile marker passed in the unfolding saga. I am pretty sure some acquaintances had the same experience recently (big holiday cancelled) but I do not want to pry open the kettle of fish they are in so I am just guessing…My wife keeps telling me she wants a house no matter how many times I describe the situation to her (and she is Japanese but a little young to truly appreciate what happened to her country. None of her friends were old enough to get destroyed when the bubble burst here). She is willing to wait until I secure some sort of reasonable employment upon our return to Canada so we may be on the sidelines for a good deal of the impending carnage as job prospects are not the best and will not be getting better anytime soon. I really want to sit out the storm here in Japan at my own business but my youngest is not picking up English like our first two did. I am willing to put two years in back in Canada for the good of the kid’s language skills and if things do not pan out I intend to return to Japan. I hope the kids speak native English and Japanese and living in each culture moves them well along that path. I am seriously considering building a commercial property here and just renting in Canada forever but my wife wants a BIG, BEAUTIFUL Canadian house.

#151 steve on 01.09.12 at 8:02 am

Bang…there you have it. You can’t reasonably argue with numbers like that.

I tire of getting looked at like I’m a buffoon if I even mention real estate correction and usually don’t bother any more. You have a thick skin Garth.

#152 T.O. Bubble Boy on 01.09.12 at 8:19 am

Obvious quote of the day (from a furniture seller in China): “If they don’t buy homes, we don’t sell sofas”

What’s this crazy concept?

Next thing you’ll tell me, demand for appliances can’t keep increasing when the property developers run out of money and stop building empty condos!

#153 T.O. Bubble Boy on 01.09.12 at 8:25 am

Whoops – forgot the link:

#154 Pr on 01.09.12 at 8:29 am

Its clear that the gouvernement will, not do, what we expect, like raising interest rate. No, they will, like all the years before, do the opposite, keep it low, maybe lower, for what ever the reason, for many years to come, until, its unsustainable in every front. And BANG!

Rates will normalize. — Garth

#155 Benny Hill on 01.09.12 at 8:56 am

hi Garth,
I’m starting to like your new year’s resolution of more humility…might be the sign of things to come.

Don’t get used to it. — Garth

#156 Tkid on 01.09.12 at 9:13 am

Dorothy, you remind me of my mother; she too is house mad. *grin* But I have a cure for financial conversations – she brings up buying a house and I immediately talk about the doomed state of the world economy and how food prices are going to skyrocket … And then I buy her bags of rice and bread and if I can find ’em, giant cans of tuna outta Costco.

And that is what I recommend others do with parents who keep going on about buying a house; buy ’em groceries so they can eat after the financial apocalypse hit.

P.S. being compared to my Mom is a compliment of the highest order.

#157 TurnerNation on 01.09.12 at 9:26 am

I wonder how much of the hate mail originates from H’s cronies. Remember, a hardline regime’s first targets are always the journalists, intellectuals, teachers, labour leaders, professors. Bascially, anyone who is smart and/or can lead others. These types are huge threat to hardline regimes. Don’t think we are any different or special than other world countries. People are the same, the world over.

#158 Q on 01.09.12 at 9:32 am

Garth, don’t be discouraged by the lemmings and haters. Anyone with one iota of common sense sees what’s ahead. My batting average in real estate forecasting has been 1.000 (until now) and I predicted a serious correction by August 2011 (perdiction made 18 months earlier). Who would have guessed that there was so much blind stupidity (as well as horesh#t & hotair from CREA)around to keep the market afloat? It will happen and soon. Just remember, the higher you climb the farther you have to fall. What may have been a managable correction 18 months ago, could very well become a US style massacre now. Great blog today….you could not have made your point better.

#159 maxx on 01.09.12 at 9:47 am

#6 jess on 01.08.12 at 6:02 pm

Very interesting….and about time. We are taking just such a slumlord to court. Far too many slumlords are getting away with ripping people off. They all need to understand that they MUST deliver healthy, liveable premises and that is not happening in far too many buildings. We are now in a great rental with an excellent provider, however we will not let the aforementioned slumlord get away with having ripped us off.

#160 Arse on 01.09.12 at 9:48 am

The total value of building permits decreased 3.6% to $6.1 billion in November, following an 11.6% increase in October. A decline in the non-residential sector, particularly in Ontario, more than offset gains in the value of residential permits.

#161 Arse on 01.09.12 at 9:52 am

Residential sector: Higher intentions for both single- and multi-family dwellings
The value of building permits for single-family dwellings rose 8.2% to $2.4 billion, after posting slight changes during the three previous months. The advance was attributable to higher construction intentions in seven provinces, led by Ontario.

After three consecutive monthly declines, multi-family dwelling permits increased 5.0% to $1.5 billion. Gains in five provinces were behind the increase, with British Columbia posting the largest advance, followed by Nova Scotia and Quebec.

Nationally, municipalities approved the construction of 16,895 new dwellings, up 5.8% from October. The increase came from both single-family dwellings, which increased 6.2% to 7,199 units, and multi-family dwellings, which rose 5.5% to 9,696 units.

#162 Incubus on 01.09.12 at 9:52 am

“I have not mentioned the gross overbuilding of condos that’s taken place in Toronto, Calgary or Vancouver. ”

You forgot to put Montreal on the list.

#163 verbose on 01.09.12 at 9:54 am

I own a 2 bedroom condo in Mississauga that I bought pre-construction about 6 years ago as an investment. I bought it at $184,000 and it’s worth around $310,000 now. It’s been rented out since I bought it, and it is slightly cashflow positive.

Do you think I should sell it and do something else with the cash or keep it? It’s located right next to Square 1.

#164 Arse on 01.09.12 at 9:55 am

Permits up in just over half of census metropolitan areas
The total value of permits rose in 18 of the 34 census metropolitan areas.

Vancouver, Ottawa and Québec posted the largest increases. In Vancouver, construction intentions for multi-family dwellings and institutional buildings accounted for most of the advance. Higher intentions for commercial buildings were largely behind the gains in Ottawa, while multi-family dwellings mostly explained the increase in Québec.

In contrast, London and Montréal recorded the largest decreases. London’s drop was the result of lower construction intentions for institutional and commercial buildings, which had recorded notable increases the previous month. In Montréal, the decline was attributable to both the residential and non-residential sectors

#165 disciple on 01.09.12 at 10:07 am

In the end… you get what you deserve… a true story involving disciple follows…

I was helping out this guy one time, I mean, I was really going out of my way. I had other places I needed to be at the time, but since I promised to help him, I patiently waited for him outside his residence. He didn’t even invite me to stand inside and it was the middle of winter. Rudely, he didn’t tell me what he was doing inside and how long it would take before he would come out so I could help him with something he needed. He just told me to wait and closed the door. He wasn’t a friend, more of an acquaintance who asked for my help and so I obliged and this is how he treated me? Like a dog…

15 min passed, I got a little impatient staring at the other houses on the street, the soaring maples, the fancy brickwork and paving stones in each driveway, the colourful vehicles, and the black and white picket fences. So I knocked on the door and after a minute he opened it and said he would be “3 min” longer. So I said okay. Another 15 min later, I got sick of the wait and was ready to just drive away, but instead knocked on the door and this time I opened it. I called towards the vastness of his front foyer open concept balcony-chandelier entrance. I heard his voice in the distance somewhere upstairs saying he would be about 3 more minutes! Totally classless…

I politely acknowledged, but secretly disparaged, closing the door and realizing I now could not stem the flow of the golden flow, so to speak. I need to go, badly. I thought to myself, “Self, you are being treated like a dog, this is a moment where you have to act like one”. So I did it. In the cold air of the winter afternoon, steam rose from the warm flowing arc that angrily splattered the fancy retaining wall beside this guy’s front door door. A wooden outdoor table partly hid the now wet-stained white painted wall area, so as to provide a temporal cushion to the onset of his or anybody else who happened to walk by’s discovery of the pungent pool.

When he finally came out, still shuffling through some papers, attempting to get a response from one of his disinterested family members as he said goodbye, he failed to notice the new addition to his landscaping.

I was relieved, literally, and figuratively. Okay, not so figuratively… not proud of this one moment which I still remember, but not really that ashamed either…

#166 Alpha_Bear on 01.09.12 at 10:12 am

Dorothy on 01.09.12 at 1:11 am said:

“…but here in the North Okanagan one can buy a very nice 3 bedroom home for less than $240,000.”

Wow. You must be a realtor, Dorothy, if you consider a pre First World War teardown on a tiny lot a very nice home.

The North Okanagan may be a nice place to visit during the summer, but most people find the cloudy winters to be depressing. There are also fewer good jobs each year, as employers “downsize” or simply shut down.

You’re encouraging people to buy into a declining market, in a declining local economy.

It does not make sense to buy in the North Okanagan at this time.

#167 DonDWest on 01.09.12 at 10:19 am

132 TheRealTruth

Here, here!

Young people priced out of housing should NOT have to pay CPP for boomers who own a house. It’s like a reverse Robin Hood. It’s time to put emotions aside and call all the entitlements for seniors for what they are: A transfer of wealth from a younger/poorer generation who rents to a richer/older generation who owns a home.

The way I see it; if you have enough excess to own a 2k sq ft. house, you shouldn’t be needing any welfare. You can sell the house. . .

#168 ris ames on 01.09.12 at 10:37 am

salmon arm area

last year assessment 371, this year 359.
this has come down from 430 in 07.
and not much is selling

#169 Herb on 01.09.12 at 10:58 am

Ladies and Gentlemen,

I give you the future of Canadian politics. Just ignore the players, focus on the message(s), and change the direction from flung at the Pres to flung by the PM.

I want my Canada back!

#170 bp on 01.09.12 at 11:02 am

find your housing reports interesting, but looking forward to your pref. stock articles,


#171 Really? on 01.09.12 at 11:05 am

Garth writes “First, residential prices in Canada are at an all-time high. Logic tells us buying anything when it’s never cost more is a losing proposition”.

According to one of the graphs in this very posting, in 1999 prices had never cost more. Anyone who bought at this historically high price are still up 100%+ on average.

I agree with the overall premise of the blog, though.

#172 CalgaryRocks on 01.09.12 at 11:18 am

#157 TurnerNation on 01.09.12 at 9:26 am
I wonder how much of the hate mail originates from H’s cronies.

I guess we’re all someone’s crony at some point in our lives.

What must be avoided at all cost is turning into a fanboy.

The first sign of being one is when we make up nations led by our idol. Hey ‘TurnerNation’…

#173 613 Happy where I am on 01.09.12 at 11:19 am


Fearmongering! — Garth

#174 Scott on 01.09.12 at 11:22 am

So remind us again, why do Canada’s interest rates have to normalize? They’ve been low for many years, and the popular prediction is that they must continue to be low so as not to harm the economy. What are *all* the motivations for the Bank of Canada to raise them? (I know of just one.) And how likely is that to happen? I wish the this “pathetic blog” had a decent search facility, as I’m sure this topic has come up before.

#175 T.O. guy blazin' Kush on 01.09.12 at 11:23 am

I hope the market can hold out ’til spring so I can sell and GTFO.

#176 disciple on 01.09.12 at 11:23 am

#22 Dr. Wayne… you’re hilarious. 1.5 million is insane to begin with, yet you feel that 2.76 million is the insane amount. The envy in your words are pouring out of my computer screen, and then they reveal themselves to be the lunacy that they indeed are. You feel that you should have waited longer, don’t you? Lol.

#177 Daisy Mae on 01.09.12 at 11:38 am

As a hospital volunteer, I’m amazed at the number of young people in their forties — equal number of men and women — coming to Emergency with chest pains. Never before. May be stress due to job insecurity and financial woes.

#178 Victoria on 01.09.12 at 11:47 am

Canuck Abroad,

We had a small apartment in Paris that we rented out when we moved to Toronto. You are so right. It was a nightmare. People left it a shambles. Stopped paying rent 3 months before moving out so we would not take their damage deposit.

We sold it when we bought in Toronto. Luckily a friend in Paris fixed it up (someone we trusted). My husband bought it when he was 20 and had it for 10 years. Broke even. Never ever made any money on it. Cute apartment. Good area too.

#179 disciple on 01.09.12 at 12:06 pm

#97 Ed… “Why would one leave a home after so much care and attention has already been invested in it? Why give up a place to which one’s children and grandchildren are emotionally attached? It takes years to build up the soil and find the plants that do well in the various micro-climates on the property. Why give all that away?”

You fool. You may not have a choice. You can’t take it with you. You’re always just one heartbeat away. Always remember this. I suggest you teach your children and grandchildren to become emotionally attached to other human beings rather than things. Idiot.

#180 Daisy Mae on 01.09.12 at 12:09 pm

#122Dorothy on 01.09.12 at 1:10 am
‘Garth – you say I “don’t get it” yet you yourself own your own home. If I’m totally wrong, I don’t understand why YOU don’t sell into a falling market and rent. But the fact is that I’m not totally wrong, am I?’


He’s told us a million times — real estate is fine IF if comprises no more that 30% of net worth. So why SHOULD he sell and rent?

#181 Abitibi Doug on 01.09.12 at 12:13 pm

@TO guy blazin’ Kush, post #175: List it now, if you haven’t done so already!

The topic in this post reminds me of a saying by some wise person, who said: the only thing humankind learns from history is that we learn nothing from history.

#182 Van guy blazin kush on 01.09.12 at 12:17 pm


I said I was with you on the condo topic in your hood. Yes I know prices are down. But we need to define “underwater” on this blog. I have been to the Tri-cities recently and there’s a shit load of new townhomes being built on the mountainside of Coq & Poco. I’m not sure how many of those are sold because I cant see new sales on the mlslink.

#183 disciple on 01.09.12 at 12:18 pm

#163 verbose… I will buy it from you for 75K. It may not seem like a good offer now, but I assure you, the offer will stand even when you are struggling to sell it a couple of years from now. Let me know, whenever.
Thanks – disciple.

#184 Van guy blazin kush on 01.09.12 at 12:20 pm

What’s up with the dudes copying my name?

Edm guy blazin kush & TO guy blazin kush.
The best kush comes from bc

#185 robert james on 01.09.12 at 12:28 pm

#177 Daisy Mae I think you are in the Okanagan .. My wife worked in health care here and the people that are on anti-depressants along with some of her co-workers is absolutely mind numbing.. I some how do not think that this is the Utopia that it is hyped to be.. DA must be the happiest person in the Okanagan.. Well,,I am happy too but my wife says that I don`t have enough on my mind to get depressed.. LOL

#186 Dorothy on 01.09.12 at 12:41 pm

#156 – Tkid
Thank you for the complement (I think), but your Mom and I probably know a lot more about living on a budget than you do. And that’s the reason we were able to save up and buy a house in the first place.
I often get into discussions with my own adult kids about ways to save money on food budgets. Such as avoiding prepared foods, buying cheaper cuts of meat, making smaller portions, and cooking from scratch. I save hundreds of dollars using such strategies, but for the most part my adult kids aren’t interested. They prefer to spend more on their grocery bill, and then complain they’re broke! And the sad part is that there’s lots more folk who are just like them.
My point is that there are many who complain they can’t afford to buy a house that could afford it if they just went about it a different way.
If people looked at their overall budget and found ways to cut a few corners in order to save up a decent downpayment, and then looked around for a house that was reasonably priced (making sure to consider needs rather than wants), negotiated the lowest price possible (being prepared to walk and look at a different house if necessary), and took out a fixed rate mortgage with as low of an amortization as possible, then home ownership is a possibility for many who currently think it isn’t.

Not everyone lives in places such as Toronto where prices are exhorbitant. Even I wouldn’t consider paying such outrageous prices just for a place to live. But that’s always been true of large metropolitan places, which is why I’ve spent my life living in the north, or the rural south.

When I was young I would have LOVED to live in Vancouver. But the fact was that I couldn’t afford it, so I lived in a smaller, northern city instead. And I’ve had a good life, to the point that now that I’m older I no longer want to live in the busy, urban zoo that Vancouver has become.

If you want to buy a house, and can’t afford one in your ‘hood, consider moving to a different location where homes are more affordable. You just might find you like it in your new location.

#187 The Phantom on 01.09.12 at 12:57 pm

Hey Garth, fellow bloggers and lurkers

Great graph data! Recall that era or time well. For some the world was coming to an end and then with “stimulus” here in Canada the effects in the macroeconomic sphere were short lived. The USA has countered their debacle with “quantitative easing”. Gotta love these euphemisms.

Now however that the chamber is empty down south and the tit has run dry up here up north, what other options or rabbits can the gurus in the Fed, the B of C and their minions pull from their top hats???

I don’t consider myself as sharing those doomsday predictions that some espouse. Nor am I someone who will chuckle or rub my hands together with glee if thousands of fellow Canadians find themselves underwater due to falling property values either. Misery in any of its forms, self-inflicted or not, is never a sight that entertains me. Here’s to a “soft landing”, Garth (remember that phrase?).

the Phantom

#188 CAD on 01.09.12 at 12:58 pm

This is the best blog you’ve written. Being a fan of Harry Dent, I especially loved the part showing the baby boomer effect on housing. Dent’s main thesis is that boomers also stop spending at age 50, changing the direction of purchasing in the economy and dramatically affecting GDP and the stock markets ( down). The peak of boomers are now at this age point. Good stuff.

#189 Tony Right on 01.09.12 at 12:59 pm


Keep up the great work. Rational minds are paying attention! Thank you.


#190 disciple on 01.09.12 at 1:08 pm

#187 Dorothy… that is such UN-helpful advice, I don’t know where to begin. You are so out of touch with young people today. Bread isn’t 20 cents anymore. Do you shop anymore, or are your meals prepared for you now?

Rent or mortgage, plus food, plus heating bills, plus vehicle, plus insurance, plus this, plus that, on even double minimum wage $20 / hour just won’t supply anybody with a living standard much above poverty anymore. Add to this inflated house prices, and inflated consumer staples, retailers on the edge struggling to squeeze every last nickel, and what you get is what we have, over-extended citizenry surviving on HELOC’s of various stripes and names.

Like I said, you just aren’t helping Dorothy.

#191 Dorothy on 01.09.12 at 1:15 pm

#166 – Alphabear
I wasn’t suggesting that everyone move to the North Okanagan, merely using it as an example of a place where housing is nowhere near as unaffordable as many on this blog appear to think. And there are many other towns and villages throughout Canada where housing is similarly, or even more, affordable. One only has to look. Here are three examples of homes in the North Okanagan that are affordable for many.
Obviously one has to move to a place where one can get a job, and I won’t argue that finding work is no easy task in the North Okanagan. But that doesn’t mean it’s impossible, if one has marketable skills and knows where to look. However,I wasn’t trying to make a plug for any one particular area, merely pointing out that not all house prices are as high as in places such as Toronto and Vancouver.
People currently living in large metropolitan areas who feel priced out of the housing market should do as I did and consider moving to a more affordable location. Find a job outside of the expensive areas, and not only will you find more affordable accommodation, but you may also find a much more enjoyable way of life.

#192 jess on 01.09.12 at 1:20 pm

18 EVEric
Caterpillar university?
The state of n. carolina is paying to train caterpillar workers hopeful to earn a 40k wage .

#193 Dorothy on 01.09.12 at 1:28 pm

#167 – Don D West

CPP is not welfare. The only people who get anything out of it are the people who paid into it, and even then you only get an amount dependent on how much you paid in. People such as myself, who stayed home when my kids were young, will only get a very small Canada Pension.

As for my paid for house, my spouse and I both worked hard over the years and made many sacrifices in order to be able to afford what we have now. When we were young we rented until we’d saved enough to buy our first, very modest home. And ever since we’ve always lived beneath our means, and every house we’ve ever bought has been less than we could afford. A strategy has always served us well, and which I recommend to all you young people out there who feel economically deprived.

Nothing in life comes easy. It didn’t come easy for us, and it won’t come easy for you. But if you work hard and live beneath your means, you will eventually get what you want. Slow and steady always wins the race.

#194 AM on 01.09.12 at 1:38 pm

Fact = read the charts on todays post.
Fantasy = RE only goes up.

#195 CAD on 01.09.12 at 1:40 pm

disciple, before you trash Dorothy about how everything was so much cheaper back then, remember that salaries were much, much less than today. Bread may have been 20 cents but salaries may have been as low as 4 digits depending on what decades we’re comparing. To buy a house then, you had to budget, save, and plan to stay in that house for sufficient time for salaries to catch up to your “overextended” purchase. Market appreciation of value was a bonus, but not the primary reason we bought houses. It was part of life, a place to settle and raise our families, not just a quick get rich scheme. Dorothy, good advice.

#196 Cookie Monster burnin' Kus on 01.09.12 at 1:56 pm

Disciple, have some respect for your elders you dirty dog you! And quit peeing on peoples houses. You know there are doctors who get paid for listening to weird stories like yours that can help you. Very amusing.

#197 Alistair McLaughlin on 01.09.12 at 1:59 pm

@#8 Turnernation, you didn’t even include insurance costs and interior maintenance costs not covered by the condo fees. I think it’s more like $300 cash flow negative, and that’s without considering the opportunity costs of not having invested the 20% down in something that generates a positive return.

#198 jess on 01.09.12 at 2:03 pm

…two cats in the yard and your very very own house

chester va
Beds: 4 Baths: 2.5 Sqft: 2,233 Lot: 12,719 sq ft / 0.29 acres Type: Single Family

20 years later
Listed for sale 2011- $189,900 July 26 2004- $216,950 1991 -148,950
Beds: 4 Baths: 2.5 Sqft: 2,354 Lot: 15,289 sq ft / 0.35 acres Type: Single Family Year built: 1997

Nov. 16, 2007 Listed $329,950
Oct. 26 2011 sold $225,000
First price drop
May 28 2008 Listed $305,000
two months later
July/29/2008 Listing removed $305,000

April 08/2011 Listed for sale $244,950
July 10/2011 Price change $238,500

#199 Devore on 01.09.12 at 2:16 pm

#192 Dorothy

I wasn’t suggesting that everyone move to the North Okanagan, merely using it as an example of a place where housing is nowhere near as unaffordable as many on this blog appear to think. And there are many other towns and villages throughout Canada where housing is similarly, or even more, affordable.

There are reasons for this, and it is primarily jobs and commute time. Sure, I could move to some $200k Okanagan shack, but I wouldn’t have a job in my field. Or, as some numbnuts “ecnonomist” in the city suggested, I could move to Abbotsford or Squamish, but then I’d have a 1.5 hour highway commute, each way.

#200 Junius on 01.09.12 at 2:20 pm

#174 Scott,

Yes, there have been lots of posts on interest rates in the past. There will be again.

A few points to remember.

First of all, most mortgages are 25 years or more meaning what happens in the next few months or even year will only be a fraction of the term of the contract. These are long term contracts and therefore most likely to be subject to historical rates over the full term.

Interest rates are low right now because they are being artificially set and the economy is so crappy. Hopefully, at some point, these conditions change.

The Gov’t overnight rate only sets the short term interest rates. Long term rates are set in the bond market based on demand. Look at how high the long term rates have spiked for countries like Greece, Spain and Italy.

There are numerous economic scenarios where Canada would be faced with low demand for our bonds. We will not see Greek like numbers but it could bring them up enough to change things dramatically. We could also see an eventual rise in US rates after their market bottoms out which would plunge ours in the other direction.

There are also policy considerations for Mark Carney on the over night rates including cooling the debt situation. Garth has addressed this many times.

The point is that we have been in this “new normal” for long enough that people think it will stay forever. Better to plan as if they won’t because that is the most likely scenario.

#201 GTA Girl on 01.09.12 at 2:21 pm

I just posted this blog entry to my Twitter and Facebook page.

After reading all the BS sales figures from BMO and realtors last week, I’m now expecting a frenzy of angry responders & DM’s.

Truth seems to bring out the worst in people.

If there are journos reading, why not do a investigation piece on Toronto developers to see how many actually live in a condo building?

Would be an interesting story. Because many of the condo units sold in last 3 years are unliveable for long term, badly designed boxes.

Just floating an idea

#202 The InvestorsFriend on 01.09.12 at 2:29 pm

HARRY DENT and the coming depression

CAD at 189 says: Harry Dent’s main thesis is that boomers also stop spending at age 50…

Well, he could be right but does Harry know that 60 is the new 50?

Does he take account of the whole shift whereby people tend to marry later, have kids later?

At 51 my spending is going off the charts… (upward) in good part due to having two teenagers…

Still, Harry has some sobering things for us to think about… Demographics are one of the few things that are predictable…

But the spending cut-back could be a few years later than Harry Dent predicts…

#203 Tkid on 01.09.12 at 2:38 pm

Dorothy, thanks for insinuating I and all renters like me cannot budget. I now have formed my opinion of you, but alas it is unprintable.

It is no wonder my generation is getting more and more hostile.

#204 jess on 01.09.12 at 2:38 pm

maxx –
It is also interesting how that community advocate used the softwar to find the slum strippers and demostrated how they sell the same building to one another year after year….I forgot to put that entry regarding that Virginia listing :
4806 Lippingham DrChester, VA 23831.

#205 Snowboid on 01.09.12 at 2:42 pm

#192 Dorothy on 01.09.12 at 1:15 pm…

Each of your posts get more irrational – why would anyone except retirees want to live in Armstrong or Lumby or in an ‘as-is’ half duplex in Vernon?

I tend to agree with the other posters that conclude you are an agent – presented with multiple arguments that disprove your theories, you continue to pump the same story.

Or maybe you are a retired RE agent?

#206 a prairie dawg on 01.09.12 at 2:54 pm

#49 Daisy Mae

I’m pretty sure that politics makes this blog look like child’s play…

#207 Blacksheep on 01.09.12 at 3:05 pm

Disciple # 165,

Your being so helpful to others today, sharing your
opinions and counsel, that I assume you would
welcome any insights, that might help you grow, personally.
“He just told me to wait and closed the door”

“15 min passed, I got a little impatient”

“So I said okay. Another 15 min later”

“I politely acknowledged”

“he failed to notice the new addition to his landscaping”
Your “systemic” training seems to have really took.

May I suggest an alternate path, to have dealt with said event:

When he tells me to wait out side, in the winter time,
I say OK, you’ve got 5 minutes and then I’m gone.
10 minutes later, I leave, as warned.
He calls my cel, surprised, 25 minutes later and asks,
were I went?
I tell him, I said I’d wait 5 minutes, I waited 10.
It took you 35 minutes to notice I’d left?
Sorry man, I wanted to help,
but nobody wastes my time.

People get walked on by others, because they let them.
Alpha is a choice, learn the real rules, play the game.

Take care,

#208 City Slicker on 01.09.12 at 3:19 pm

Garth what’s your prediction for the metropolis taking it the hardest in terms of %? Calgary? Since it’s so boom and bustish? But if Alberta is the king pin of wealthy provinces why is GTA house prices higher.
Maybe that supports the fact that Alberta’s resources aren’t as hot as people think.
I dunno can you help.

#209 Stevenson on 01.09.12 at 3:22 pm

Garth a 15% worst case scenario in areas that don’t have much demand is chump change. For areas that are in high demand such as toronto and vancouver which according to you won’t see much of a drop. Whats the point? Say they drop 5%…. they inflated 7% just the last quarter.

I am still around and still feeling the love. The RE markets in Canada have done great for me. For those of you still expecting a crash, keep on dreaming on. I have tried to clarify it before that I am not a realtor or a broker. I have a dual citizenship and profit from Canadian Real Estate without ever living there much.

I buy and rent. My goal is not to pay off the mortgage but to leverage. So for those of you who have been renting thank you, as some of you could be subsidizing those mortgages by renting from my management company.

Unlike some of you who “choose” to believe what they want to hear. I on the other hand don’t sit around and wait for “shxx” to happen. I simply buy the dips and sell the rallies. Also I don’t try to forecast or predict that market based on solely what you seen in the media and charts. The global economy has infinite factors that can make markets go either directions.

#210 Seller on 01.09.12 at 3:27 pm


I just want to tip my hat to you for rolling up your sleeves and delivering the most sensible set of analysis that exists anywhere in this country with respect to residential real estate. Job well done, you can take the rest of the day off as far as I’m concerned.

#211 Willa on 01.09.12 at 3:29 pm

Fun quote;

“When someone tells you they’ve just bought a house, they might as well tell you they no longer have a personality. You can immediately assume so many things: that they’re locked into jobs they hate; that they’re broke; that they spend every night watching videos; that they’re fifteen pounds overweight; that they no longer listen to new ideas. It’s profoundly depressing.”

— Douglas Coupland (Generation X: Tales for an Accelerated Culture)

#212 Junius on 01.09.12 at 3:30 pm

#210 Stevenson,

You have it in reverse. Small centres that have not seen much change will not see much of an impact. Places like Vancouver and Toronto will see the largest changes except, perhaps, in select neighbourhoods.

#213 Cato on 01.09.12 at 3:31 pm

The fundamentals of the housing market are easy to read. Its the human element that is difficult to predict. I see this in my personal life all the time. Acquaintances have a change in financial circumstance and are presented with a choice. They can cut back their spending live within their means or they can attempt to maintain current lifestyle by taking on debt. 9 times out of 10 they continue to spend.

A country is no different. We have choice and the choices we make lead to predictable outcomes. Garth has been correctly raising the alarm. We could have cooled an overheating housing market but we didn’t. We let a bubble develop, we let consumer debt run rampant. There are long term consequences to our actions and just because we haven’t reached the endgame yet doesn’t mean we’ll escape unscathed. During every economic bubble throughout history human emotion eventually wanes and economic fundamentals once again re-assert and the real hardship begins.

What I find laughable is unlike Tulip mania in the 1600s we now have the benefit of hindsight. We’ve seen this happen many times before. In Canada’s case we’ve seen our friends in the G7 fall victim to a real estate bubble and yet we still jumped off the cliff. Only reason I can think of is pure arrogance. That somehow we are better & different than any other humans on the planet. We aren’t and its now too late to avoid. Now we are left with the consequence of our actions. At some point emotion will wane, the mania will subside and harsh reality will set in.

#214 Rich Renter on 01.09.12 at 3:37 pm

Man the foreplay is awesome, this correction will be the best orgasm ever.

#215 Junius on 01.09.12 at 3:38 pm

#194 Dorothy,

You do need to face up to the reality that times have changed for people. Your generation had things much easier than young people today. My Gen-X had it easier as well.

My view is that as Gen-Y and the Millenials begin to figure out just how screwed they are things are going to get very interesting politically. We could see our future politics impacted more by generation than by so-called Left/Right or Rich/Poor than we ever have.

#216 disciple on 01.09.12 at 3:38 pm

#208 Blacksheep… Indeed I do welcome all insights, including Dorothy’s worthless one(s) from today. Unfortunately, I did not glean any from yours either. A promise is a promise, buddy. And the natural floral fertilizer was a bonus gift to that guy. It just may not have landed exactly on the flora…

#217 -=jwk=- on 01.09.12 at 3:43 pm

the house prices-debt-income graph was you needed.

Some EU humour:

The Eurozone crisis explained:

Some years ago a small rural town in Italy twinned with a similar town in Greece.

The Mayor of the Greek town visited the Italian town.
When he saw the palatial mansion belonging to the Italian mayor he wondered how he could afford such a house.
The Italian said; “You see that bridge over there? The EU gave us a grant to build a two-lane bridge, but by building a single lane bridge with traffic lights at either end this house could be built”.

The following year the Italian visited the Greek town.
He was simply amazed at the Greek Mayor’s house, gold taps, marble floors, it was marvelous. When he asked how this could be afforded, the Greek said; “You see that bridge over there?”

The Italian replied; “No.”

#218 refinow on 01.09.12 at 3:51 pm

Looks like Garth got some new Graphing software for xmas.

Great Job Garth…. Your grade 10 social studies teacher would be so proud of you.

All kidding aside…..the waters are clearly starting to recede as the nation’s worst housing tsunami quickly approaches… Run for cover !!

#219 poco on 01.09.12 at 3:52 pm

#182Van guy blazin kush on 01.09.12 at 12:17 pm
I said I was with you on the condo topic in your hood. Yes I know prices are down. But we need to define “underwater” on this blog. I have been to the Tri-cities recently and there’s a shit load of new townhomes being built on the mountainside of Coq & Poco. I’m not sure how many of those are sold because I cant see new sales on the mlslink.
where did the term “underwater,” in respect to the housing market, come from? my first real introduction to this meaning was during the downturn in the USA housing market and it was readily accepted to mean–a home owner owed more on his mortgage than his property was worth.
but is that what it should be?
all i was saying is even though a property sells for a price that is the same or more than the owner owes on his mortgage, can he still not be considered to be underwater if taking into account all the expenses required to buy and maintain, for any given time limit, and then sell his property and comes out of it with a loss to his net worth
look at an owner who pays 350k for a property with 50k as a down payment–2 years later sells for 300k—payments for two years have dropped his mortgage down somewhat and even though he is not “underwater” as per the definition i don’t believe he is a happy camper
figure in all real estate fees–property taxes–condo fees –the list goes on—-would you consider yourself to be ahead of the game after all that? i don’t think so–more important –you think this seller will be a buyer anytime soon?
i believe Garth has mentioned these factors in other posts though not mentioning the “underwater” term
i’ll let you know what i know about the Burke Mtn area and the other areas you mentioned shortly

#220 disciple on 01.09.12 at 3:55 pm

#196 CAD… my first wage was under 4 bucks an hour sweeping floors. Warehouse workers and unionized folk were bringing in just under 20. This was the early 80’s. A decent home at that time was about 80K in my “area”. The minimum wage now is about 10 bucks. Guess what a decent home is going for now (350+)… guess what a unionized meat packer would make now (if there was such a job available for them that is)… that’s right… about 20 if they’re lucky. Often with paltry benefits and only distant phantom promises of a pension. Again, I rest my case.

Therefore, I have little understanding of what you mean by housing not being a quick get rich scheme. Your generation certainly milked that cow. And I haven’t mentioned any other inflated costs of living, you know, like having kids.

I represent that thin thread of demographic that can bridge the generation gap and compare and contrast having lived through all transitions. I honestly don’t know how those younger than me will ever get out of their parents’ homes. In the US, about 25% of young men over 18 still live at home. I am afraid to find out the number in Canada… but I know some stories, believe me, of parents complaining about their 24 year olds who get “bored” after a two-week stint at a 20/buck an hour job and would rather just go out with their friends partying, etc… We are raising a lazy generation of entitlement freaks who know nothing else.

Hmmm, sounds eerily familiar… like boomers squared.

#221 refinow on 01.09.12 at 3:57 pm

Condo’s vs freehold home ownership…

There is one actual good part to condo ownership, and that is “forced savings for future home repairs”.

The problem is that most condo corporations are run like the government… Lots of miss use of funds, top heavy with high management fees, and not properly tendering contracts, someone is usually being greased.. If they just used the monies as they were intended, there would be no reason to increase to the levels that they do…..

#222 pbrasseur on 01.09.12 at 4:01 pm

Pretty good recap of where we are, when you put is all together like this it’s hard to imagine there won’t be a major correction in Canada.

Speaking of which, Garth, you keep mentionning there was a 17% overall correction in the US but according to the National Realtor Association it has been a 39% correction:

What gives?

That is resale only. — Garth

#223 Dorothy on 01.09.12 at 4:22 pm

#200 – Devore
Depending on your field there are probably jobs to be had that are outside of the Vancouver area, but chances are you’re not interested because you don’t want to leave the city. And that’s fine; just don’t complain about the high cost of housing, if it’s your choice to live in such an expensive area is your choice.

When my spouse and I were young we also lived in a big city, and enjoyed all the benefits such a metropolis provides. But for economic reasons we decided to emigrate half a world away, and live in some really isolated communities while we built a nest egg. We didn’t particularly WANT to live in those communities, and in the beginning we didn’t particularly ENJOY living in those communities, but we did what we felt we had to in order to build for our future.

One job my husband had required driving more than 1 ½ hours each day over a poorly maintained winter road and I always worried about the possibility of his having an accident. And another job he had involved his living away for weeks at a time, while I stayed home by myself in a strange town, with no family or friends and two babies to look after. So I know all about having to do things we don’t like in order to get on in life.

And by the way, if you think the homes I posted as good examples of first time properties are “shacks”, you should have seen the first home I lived in when first married. It made those examples look like palaces.

#224 Herb on 01.09.12 at 4:30 pm

#193 Jess,

the Province of Ontario paid Dell to train “Call Centre Operators” under an Apprenticeship Training Program for a Dell call centre opening in Ottawa. There no doubt were a few other financial/tax concessions as well. And when the public well had been pumped dry, Dell packed up and left the country.

I swore at that time that I would never buy a Dell product, and have kept it up despite the fact that they make good stuff.

#225 Big Fan of this Pathetic Blog on 01.09.12 at 4:35 pm

That’s a home run, a beauty post. Thank you so much for doing what you do, Garth. You have helped me so much in my own life. I know what I have to do…. I have tried to pass it on, but it seems that so many people prefer to keep the blinders on….

#226 Dorothy on 01.09.12 at 4:36 pm

#206 – Snowboid
My spouse and I are NOT retirees, yet we live (along with a lot of other non-retirees) in one of the small North Okanagan communities. We like the small town lifestyle (having previously lived up north for many years) and we also like the lower property taxes.
And no, I am NOT a REALTOR, just someone who knows how to be thrifty, and how being so always pays off in the end.
Everything my husband and I have today is what we spent the last 38 years working and saving for. We’re not rich, but we do own our own home, have no debts and are comfortable.
All I’m trying to say is, if WE could start out with nothing (which we did) and get to where we are today, than many of those participating in this blog could do the same thing. It’s all about making sacrifices while young, in order to reap the benefits when you are older. Short term pain for long term gain.
But I find that many young people today want to live in a house as nice as mine, with a big flat screen TV and 2 new cars in the drive, while living and working in a large metropolis. And although I also would have liked that when I was young, I knew I couldn’t afford it and didn’t use credit to try to achieve it. I’ve never carried a balance on either a credit card or a line of credit in my entire life, always preferring the motto “if you don’t have the cash, you can’t afford to buy it”.
Debt is what has got a lot of our young people into the mess they’re in today. And much of that debt has been run up trying to live a lifestyle they couldn’t afford. Once people learn to live within their means, a much happier and more prosperous lifestyle will follow. That was true when I was young, and it’s still true today.

#227 Junius on 01.09.12 at 4:37 pm

#215 CATO,

Good post.

You said, “What I find laughable is unlike Tulip mania in the 1600s we now have the benefit of hindsight. We’ve seen this happen many times before. In Canada’s case we’ve seen our friends in the G7 fall victim to a real estate bubble and yet we still jumped off the cliff.”

It is proof that perhaps human history is more a matter of cycles than it is a matter of progress. We still remain so blind to our human nature and our behaviour.

#228 Van guy blazin kush on 01.09.12 at 4:37 pm


I haven’t taken a look at listings in your area in the last month. # of sfh listings have dropped quite a bit. 2-3 months ago, it looked like 2008 all over again. Listings should climb from here, but only time will tell. Btw, I do homework on the areas Im interested in.

#229 Dorothy on 01.09.12 at 4:55 pm

#217 – Junius
I agree that times have changed for young people, although not for the same reasons that you do. It is my belief that young people have stood by and remained silent while many of the benefits my parents generation fought so hard for (like defined benefit pension plans) were slowly chipped away and finally eliminated one by one. It’s not the Baby Boomers who are going to suffer the most from such changes, but our children and grandchildren. I’ve tried over the years to do my part to resist such changes, but when it comes to the younger generation my comments have usually fallen on deaf ears. But I suppose each generation must fight their own battles, and achieve their own benefits. Just don’t blame folk like me for your subsequent problems, because it was you younger guys who failed to show up at the polls and VOTE when your votes could have made a difference!
That said, when it comes to being able to manage your household finances in such a way as to prepare for a secure future, things have not changed. Good money management and living beneath one’s means will always pay off in the end. Far too many people want far too many things RIGHT NOW and are not prepared to wait while they save up for anything.
I look around and see many young people buying huge homes that I can’t afford, even though I paid cash for the modest home I currently live in. In the past people raised families in much smaller homes with fewer bathrooms, and no fancy appliances. Kitchens were work areas, not works of art, and the basement was usually a work in progress. It’s hard to believe but we only had ONE television, and ONE vehicle. And I actually went to work on the bus!!!! We were willing to live in areas that while not as desirable, were definitely more affordable, and we saw our house as a living expense, not as an investment.

#230 Dorothy on 01.09.12 at 5:02 pm

#222 – Disciple
The key to younger people getting out of their parents homes is to get an education in a field where there is a demand for workers.
Both my children (30 and 32) have good paying jobs with benefits, but they both have 5 years post secondary education as well.
Far too many people get diplomas or degrees in fields where there is no work for them once they’re finished. Schools need to do a better job of helping students research where the demand is when it comes to choosing a career.

#231 poco on 01.09.12 at 5:13 pm

Van guy blazin kush –here are two listings in the Dayanee Springs area (off David and Pinetree) the up and coming area of Coquitlam–so called a couple of years back —these are both listed for a little more than the owners bought for 3 years ago
this is a townhouse that is listed for approx. 15k more than the owner paid in Feb 09 –it sits empty

this is listed for approx 22k more than the owner paid in Oct 09–it sits empty–has been listed for sometime (Check realtors comments re open house)

what do you think? are they going to sell for that price?
i kind of doubt it—to me they are probably going to suffer a loss –these were probably bought for investment purposes and it ain’t working out too well–hence “underwater”on their investment!
there are hundreds like this in the tri cities–started with the condo market has crept into the TH market in the late spring and now there are more and more big price drops in SFH—the ones who want out

don’t follow the Burke Mtn area –SFH way over my head –but know a few young couples who bought into the TH complexes on Sobell –similiar to this

i always wonder –why new? –when you can get something comparable only a short distance away for a lot less

#232 Mister Obvious on 01.09.12 at 5:21 pm

#217 Junius

“My view is that as Gen-Y and the Millenials begin to figure out just how screwed they are things are going to get very interesting politically.”

I wouldn’t want to paint all members of a specific generation with the same brush (as is often done to boomers by this blog’s commentors).

That said, the few millenials that I know well seem to be rather short on ambition. I find them personable and even enjoy their company but ‘motivated’ isn’t the adjective that first comes to mind.

Hmmm… maybe they’ve already figured out how screwed thay are.

#233 Kilby on 01.09.12 at 5:23 pm

#73, boomer or Bust.
I will be 61 in two weeks, my wife works at a good job and will have it for another 3 years or so, I am retired with a modest pension, some savings and no debt. We saw this real estate “adjustment” coming several years ago and sold our 3200 total sq. ft. Okanagan home a year ago and consider us lucky to get 83% of asking price after 6 months on the market. We, like many other “Boomers” are selling the big houses we raised out kids in and buying smaller SFH’s in small towns. there are a lot of large homes for sale that are not moving at all. It feels good to have our holdings liquid while we rent a $540,000 condo in Vancouver for $1,600 per month. Just for interest, there are quite a few people leasing in our building that have sold their homes in the last year or two and are having the interest on their cash pay the rent while they wait for the “adjustment”

#234 School Reality on 01.09.12 at 5:32 pm

#232 Dorothy

Why the heck would schools do this?

They don’t care what happens to you when you leave!

They already got your cash (errr…”credit”)

#235 Kilby on 01.09.12 at 5:34 pm

#107 Island Girl.

That the Yellow Point Property?

#236 Muzza on 01.09.12 at 5:34 pm

Do you have a chart showing how many people approve of your blog juxtaposed to the haters ? Do you really care about the haters…? I think not, so keep on selling what you’re selling Garth ! I don’t expect you to be right all the time with your ‘predictions’ but it beats the hell out of getting force fed the same marketing crap we’ve been led to believe this past decade. After-all you’ve only displayed logic and reason in your blogs, no need to fiddle numbers in your charts; what’s all the hub-bub with the haters anyway… ? You should have been a NHL hockey referee, it comes with being insulted no matter what you do or say… Good on ya Garth !

#237 Youth and Decadence on 01.09.12 at 5:37 pm

#222 disciple

Decadence is the end of empire.

#238 Dorothy on 01.09.12 at 5:40 pm

#204 – Tkid
If you go back and re-read my post I most certainly did not insinuate that you and all other renters could not budget. What I DID say was that we older folks (your mum included) have learned a lot over the years about living frugally, while many of the younger generation (my kids included), are not prepared to make the same sacrifices, despite complaining they are broke. If you chose to interpret that last remark as including you, then that was your choice. I don’t presume to know whether or not you are the same as my own kids, because I’ve never met you. Please don’t read between the lines what wasn’t there.
In a general sense (not a personal one) I DO think that there are a lot of young folk who are blaming everything and everyone for their financial predicament, when what they really need to do is take a look in the mirror. If someone is swimming in debt because they tried to live a lifestyle their income couldn’t support, they have no-one to blame but themselves. If someone is unable to save up, because they’re too busy spending every penny they earn trying to impress others, they have no-one to blame but themselves. If someone cannot afford to buy a home because they choose to live in a very expensive area, when they could get a job in a less expensive area but choose not to, then they have no-one to blame but themselves for their inability to buy a home. And so on. If none of this applies to you, then don’t take my argument personally. But surely you know someone who this argument DOES apply to, because I know lots of folk like this.
I’d never suggest that EVERYONE is responsible for the hard times in which they find themselves. There are always those who hit hard times through no fault of their own. But the vast majority are definitely the authors of their own misfortune, they just don’t want to admit it (even to themselves).

#239 Dorothy on 01.09.12 at 5:42 pm

#236 – School Reality

Unfortunately, you’re right!

#240 poco on 01.09.12 at 5:44 pm

here’s the link for the one i screwed up in post 233

#241 Westernman on 01.09.12 at 5:44 pm

Stevenson @ # 113,
Max out your mortgage and buy the most expensive place you can, you said…
Great advice but don’t stop there – buy a huge tin box on wheels ( Rv ), at least two new SUV’s, an expensive boat, a see-doo, a ski-doo, two new Harleys, a couple of giant dogs, have at least three kids etc. etc. etc.
Charge it all – absolutely bury yourself in debt… don’t forget the leg irons because you will be a slave at that point – a complete indentured slave.
Oh yeah, don’t forget the expensive vacation so you can be a hero at the local golf course ( with your exspensive golf clubs also bought on credit. Great plan…

#242 renting & waiting on 01.09.12 at 5:50 pm


I hear what you are saying and think I understand where you’re coming from. It seems logical to believe that if one chooses a good training program for a job that is in demand and if one budgets tightly and lives in the slums for a number of years that one might be able to afford a nice house of their own these days.

And it’s probably true for some.


Not everyone can be an engineer and not all ‘in demand jobs’ actually pay very well. I studied legal assisting back in my youth – got the papers and boy did it cost me since i was a single mom who had to borrow all the money for living expenses in addition to the tuition/books. (I’m serious.. it’s a long story but it’s a true story. Either I borrowed it ALL, or I got none.) Besides, I couldn’t have gone to full time school AND worked being that childcare would have broken me and I never would have seen my child..

As to living in the slums for a while. Yeah, I did that as well. I’d guess that most of us have, and that’s why we’re so pissed that houses are ridiculously over prices now.. it USED to be that you could work and buy your way out of having to live in the dive neighbourhoods.. Now the dive neighbourhood homes are considered starters at almost a quarter of a million dollars.

Why can’t we buy anything better? Well.. because wages have stagnated for 30-odd years while prices have skyrocketed! Interest rates are lower now, sure, but they’re also lower for savings, let’s not forget.

I was lucky. I bought a house as a single mom for only $80,000 in 1999. it was a P.O.S but I fixed it up as best I could afford and later sold for a lot more, enabling me to pay off my entire student debt AND my car.

Do I use my experience to bludgeon others over the head like you? Do I preach “look how smart and frugal I was!!” No. I realize that had I bought that house even 2 years later than I did I’d most likely never have gotten in the game. I’d still be paying off my student loan and would have had to retrain because legal assistants make very little more than minimum wage for doing most of a lawyer’s work for them.

Dorothy I’m telling you you’re wrong on this. If people moved to little tiny towns for the cheap house prices their commuting-related expenses would eat up any difference in mortgage payments almost completely, not to mention the lack of quality of life they’d have. Not to mention that those ‘little towns’ are now priced almost out of reach, too… at least for anything decent. Believe me, I’ve looked. I’m able to move anywhere in Canada and it’s an epidemic of high prices.

thanks for reading & here’s hoping that you can understand that there are plenty of young people who work hard, try to save money, don’t spend on frivolous things, and STILL can’t afford a safe, decent house in this country.

#243 Blacksheep on 01.09.12 at 5:52 pm

Disciple # 218,

“A promise is a promise, buddy”.
People that go above and beyond to avoid confrontation, even when abused, make excellent friends.

One can never have to many friends.

I’d like to consider you a friend, now that we are on buddy terms.
I’m moving soon, any chance you could help a buddy out? I’m in Van :)

take care,

#244 Mister Obvious on 01.09.12 at 5:53 pm

#232 Dorothy

“Far too many people get diplomas or degrees in fields where there is no work for them once they’re finished. Schools need to do a better job of helping students research where the demand is when it comes to choosing a career.”

I knew perfectly well in my early twenties that the liberal, artsy stuff I was taking in college would lead me exactly nowhere in regards to decent employment. I was filling in time while avoiding the labour market for a while.

For a slacker wishing to wear a veneer of scholarly respectability, calculus and physics are not the way to go. Sociology, English and Political Science are the best bets. Now I don’t mean to disparage those fine disciplines, nor have I ever been sorry I undertook such studies but they are generally not a path to decent money for most of us.

But it wasn’t until a few years later (when I realized time was running out on getting ahead) that I embarked on a technical education (electrical engineering). Let me tell you, that was challenging. But it was like hopping on a bullet train to much bigger paychecks.

I just needed a few hounds snapping at my ass first.

#245 Snowboid on 01.09.12 at 5:53 pm

#228 Dorothy on 01.09.12 at 4:36 pm…

Your story isn’t unique, and maybe your lifestyle isn’t either – consider yourself lucky to have employment in a small town.

Hopefully as you retire you will be able to afford to stay there – if that is your wish.

I also think your comment about ‘living within your means’ can apply to all of us – not just young people.

However, with the sage advice Prof. Turner, we found the avenue to enjoy our dreams and at the same time set the bar much higher for ‘living within our means’!!!

All it took was a realization that our ‘home’ was nothing more than an oversized box that was destined to take an ever-increasing share of our income. Selling was the best financial move we made in our sixty-odd years!

Why not take that opportunity when it presents itself???

#246 Keeping the Faith on 01.09.12 at 5:55 pm

#73 and #97
re: Living in your house until the day you die.

Don’t be ridiculous both of you.

My parents sold the family home of 30+ years a few summers back and moved into a 2 bedroom condo. They LOVE IT!
No maintenance, no big expensive repair bills or as my mom puts it “we just close the door and go on vacation” without any other thoughts.
In response to all the years and emotional attachments the kids/grandkids have to the house… we still see them like we used to, enjoy our visits and are actually happy because now when we leave, the kids/grandkids, we don’t worry about my dad cutting off a finger with his old bandsaw in the garage because he isn’t as nimble as he used to be.

You two goofballs sound like you should be extras on “grumpy old men” reminds me of the hold-outs in the NHL that thought is was sooooo cool to not wear hockey helmets because they didn’t have to with the rule that “grandfathered” them the ability to not wear the helmets.
Similar to the helmet-less players, both of you can stay in your houses til the day you die out of stubbornness, you will only be hurting yourselves.
Just think, what a great gift you’re leaving your kids when they get to go through all your “stuff” in the basement one day after you fall and break your hip.
My parents both agreed they were happy to ‘purge’ on their own terms and satisfied they didn’t leave us kids to be stressed with that. I’m thankful to them everyday because of it.
Great gift you’re giving your kids because of your stubbornness, nice parents.

#247 Waiting for the Sun on 01.09.12 at 6:07 pm


On December 18th article, you said
[garth] I said recently (for a variety of reasons) the average house price could decline 15%, then enter a long comatose period. That seemed to disappoint some and enrage others, who believe real estate must (and therefore will) decline until they can afford it. So they pile on and forecast a 30-50% rout, taking a SFH in 416 to $450,000 and in Van to half a million. Well, ain’t gonna happen.

Now you say,
))) [garth] But aside from all else, there’s a bomb in our midst destined to go off. I’m ready. Are you?

So, to try to reconcile these statement, we need to believe that a 30-50% correction “ain’t gonna happen”, but a bomb will go off, and prices will merely fall 15% (but not 30-50%). Have I got it right now?

You will when you learn to read. Average national prices are not going to collapse by half. But local prices could. — Garth

#248 Junius on 01.09.12 at 6:24 pm

#246 Mister Obvious,

That is all fine but the student loan you graduated with would have been a fraction of what today’s students leave with whether they choose well (for employments sake) or not.

I got an undergraduate degree and a law degree on working working in the summer and loans. I paid the loans off inside a decade and certainly in less time than most people would pay off one degree these days.

BTW – I find it interesting and telling the Boomers are usually the least sympathetic to the other generations.

#249 thanks for the lectures today on 01.09.12 at 6:30 pm

Hi Dorothy, unfortunately I am with #244 renting & waiting’s comments today.

Although I appreciate all your comments about living within your means, making do with less, etc etc, it really is a different world out there today.

If you’ve been married for 38 years, I am going to go out on a limb and guess that you’re somewhere between 58 and 68 years old. So generalizing about how “your” generation is better than “the younger generation” is not going to add any weight to your argument or win you any friends.

It was easier for you as a young married couple than it is for a young married couple today. No point in debating that IMHO.

End of story.

#250 Rantanplan007 on 01.09.12 at 6:33 pm

Keynote Condos in Calgary. New development. Just an example of what’s happening here:

Keynote-1 Corner Unit 620 sqft in 2009 = 395k
Keynote-2 Corner Unit 620 sqft in 2012 = 290k

Same units on same floor (approximately)

Also, on the market right now in Calgary:

– Condo Average Price for Dec 2011 = 280k
– Condo Average Price for Jan 2012 = 260k (so far)


#251 Keeping the Faith on 01.09.12 at 6:38 pm

#187 Dorothy (and associated previous posts)

From reading your first post today I thought you were a RE pumper and maybe you still are.

After your last post, #187, I think I understand where you’re coming from … the herd.

You believe the forced savings approach of buying a house will teach fiscal management to the masses or vice-versa.
Your fear is that people like your adult children will never benefit from this approach.

First step in public speaking, or writing, know your audience.
You audience on this blog are one step ahead of your thinking, we have listened to Garth and done our research we know fiscal responsibility.
That’s why when we review Garths post today with the ‘paint by numbers’ graphs, we see big red letters saying “DANGER”

A house for my generation is not security, it’s not forced financial learning, it’s not a path to a better future. It’s all the opposite of these things as pointed out by Garth in 1000 posts before this and on todays visually appealing graphic display.

I enjoy cooking myself, I buy on sale, I shop for deals, I automatically withdrawn savings and investments monthly (30% annually), I don’t want for anything. What I especially don’t want for is someone, good intentioned or not, telling me the sky is pink when it’s really blue, i.e. you telling me/preaching to me that RE is a good investment because I will “Learn” from it.

Know your audience Dorothy.
Some people will “Learn” from buying RE.
Some people don’t need to learn these painful lessons because they already know financial responsibility.

My recommendation is to buy your kids some time with Gail Vaz Oxlade and put them on a ‘life lessons’ diet. This will be a better approach to forced learning then buying a home in Canada in 2012.

#252 Marshy on 01.09.12 at 6:46 pm


Check out some of Mr Dent’s earlier predictions …. the Dow at 40,000, the Nadsaq as high as 20,000 …. he advised agressive investors to allocate 45% in tech just prior to the tech bubble bursting a few years back. Do the opposite of what he recommends and you will do just fine.

#253 Keeping the Faith on 01.09.12 at 6:50 pm

#206 Snowboid on #192 Dorothy

My money is on Dorothy being a retired RE agent.

She was probably a good one in her day and her advice probably very useful and helped a lot of people, in the early 80’s and mid-90’s right before she hung her RE license.
Her advice has lost it’s timely appeal though.

A good comparison is the broker that recommended buying RIM in Dec 1997 @ $1.50/share vs. the same agent that tells you to buy RIM in June 2008 @ $150/share.
Same advice, difference in value.

I kinda like her though, she’s grandmotherly.
My 2nd grandma passed away about 5 years ago and it’s comforting to see Dorothy’s posts.

#254 Dorothy on 01.09.12 at 6:50 pm

#247 – Snowboid
There is absolutely NOTHING wrong with selling your home and moving to AZ (or wherever it is you now live) if that is what you want to do. But at the same time, there is absolutely NOTHING wrong with choosing to stay in your own home either. It’s all a matter of personal choice (within the parameters of what you can afford).
Most of my remarks on this blog are aimed at those who criticize and blame baby boomers for all their financial woes, when I think the true blame lies much closer to home.

#255 Dorothy on 01.09.12 at 6:54 pm

#248 – keeping the Faith
I’m glad your parents are happy with their choice, but please don’t make the mistake that “one size fits all” when it comes to condo living.
I have a friend who sold her home to move into a condo and absolutely hated it. She particularly hated the fact that when her grandchildren came to visit they had nowhere outside to play (it was an apartment style condo with a small balcony). She wound up selling the condo and buying a 2 bedroom corefloor bungalow with a small yard.

#256 Brad on 01.09.12 at 7:00 pm

Several weighty economic houses are lining up behind you now so don’t worry. All bull markets sag eventually, particularly one’s 13 years in the making.

#257 Tkid on 01.09.12 at 7:03 pm

Dorothy, everyone where I live takes the bus. Driving is slower, and more expensive. Major arteries – roads and highways – turn into parking lots.

When I was commuting from a cheaper small town, transit costs were $300 min, and if I drove the car it cost $900 max. And working in the small town was out of the question – if it isn’t a Tim Hortons job then one is out of luck. The only jobs left are in the big city.

This ‘the youth of the country cannot budget’ schtick you are espousing is beginning to sound like prejudice. I know plenty of Boomers and War Children who cannot budget either. Do I write them off as you write off Gen X and Y?

#258 Cookie Monster burnin' Kus on 01.09.12 at 7:09 pm

renting and waiting is right Dorthy, the problems today are much worse than they were for your generation. Too much government and a massively bloated public sector with high costs and low quality social services are a heavy burden on our economy that most business have either left or have no money retained to maintain or invest in themselves or their productivity.

Our standard of living is falling like lead on Jupiter similar to the collapse of the Soviet union from 100% socialism, looking at Canada I’d say we’re about half way there. The cause of all the hardships, of no opportunity, all the wealth is being consumed by the non-productive elites in our public sector and government. We have econimic cancer and if not treated won’t have long to live.

#259 Westernman on 01.09.12 at 7:13 pm

Junius @ # 250
The reason boomers and most people for that matter are not ” sympathetic ” to your generation is that your generation doesn’t deserve any sympathy.
In general, your generation are a bunch of lazy bums more interested in getting yet another tattoo and burying your unshaven faces in an I- Pod all day long while whining about how hard done by you are.
You just don’t deserve any sympathy, that’s the truth of it – despite how much you hate hearing it.

#260 Van guy blazin kush on 01.09.12 at 7:27 pm


Those areas are overbuilt with lots of TH and condos. I’m not surprised that a correction is in place. But if you look south of the Barnet, there’s not much attached properties and not many listings for sfh. I can see Richmond looking worse than your area. That’s because Richmond has overbuilt everywhere and sfh are flipped like hot cakes.

#261 Keeping the Faith on 01.09.12 at 7:32 pm

#244 Renting & Waiting

Great post. I thought it was mine for a moment …

#262 TurnerNation on 01.09.12 at 7:33 pm

#172CalgaryRocks on 01.09.12 at 11:18 am

have you forgotten your own cult: ?

Who would you rather be running the country: Harper, Turner, or …the Flames?

Anyway they’ve renamed it as the “Harper Government” – get used to it, you will not recognize Canada when they’re done.

#263 Garth can you please ask Westernman to leave now? on 01.09.12 at 7:40 pm

I see your guideline “Abusive, obscene or disrespectful commenters will not be published, and are subject to banning from this forum.”

This guy is just plain rude, and other than being a troll who gets people riled up and insults them he is not adding any value.

Or maybe you could switch to blog software that just lets users “hide” select commentators such as Westernman, Devil’s Advocate etc.


#264 Form Man on 01.09.12 at 7:42 pm


So if you hate Alberta,Manitoba and Saskatchewan; that leaves only B.C. ( the most left wing of the western provinces) for your fascist rump of a separate western Canada. I guess your tiny mind didn’t really think this one through………..maybe you had plans of annexing Alaska…… and Sarah Palin ( similarily geographically challenged ) could view Russia together from her house……

#265 brainsail on 01.09.12 at 7:43 pm

Garth, I just realized that there might be something inconsistent with your charts.

The chart that shows house prices from 1980 to 2011 increasing from 60K to 360K is a 6X or 600% increase.

The chart comparing house prices Canada vs. the US starts at 100 and tops out at 600 relecting only a 5X increase. Same thing with the house prices vs. debt and income chart. Shouldn’t they be starting at the 0 level instead of the 100 level?

I hope this helps.

#266 Stevenson on 01.09.12 at 7:48 pm

Westernman #243

I did not mention all the etc… for a reason. Credit is there for you to use and not abuse. Use it wisely and it will pay off greatly. I have friends who flipped 5 different pre construction condo units in Vancouver all around the same time frame and made use of the opportunity. Why use your own money when you can get a line of credit approved for buying cars and toys or renovations easily? He used that and some of his own money on down payments of 5 different properties that year and then flipped them 2 years after. You have to be idiot not to take advantage of the easy deposit purchases at these condos. They never do background checks require mortgage approvals when we buy them.

If shxx hits the fan I bounce and never come back to this giant country where almost every resident has something to complain about. Sorry guys i don’t have a union cake job backing me up like some of you do.

If I was chicken “shxx” then yeah i would of played with my fingers and tried to predict the how the market “should” be heading. If you want theory go pick up a text book.

As soon as people sell there will be people popping in to buy it. There will not be a slow melt down. Ever heard of immigration? This giant Tundra Canada is very attractive to people outside for some reason, so if real estate needs a boost? Just open the flood gates.

#267 CalgaryRocks on 01.09.12 at 7:56 pm

261 Westernman on 01.09.12 at 7:13 pm
Junius @ # 250
The reason boomers and most people for that matter are not ” sympathetic ” to your generation is that your generation doesn’t deserve any sympathy.

There is a lot of opportunity nowadays. If you build a solid foundation, which in my opinion is your knowledge, experience and reputation, everything else (rent/buy/invest) will be a matter of preference and timing.

#268 Habbit on 01.09.12 at 8:30 pm

#132 Careful what you wish for. What goes around….

#167 The D must be for delude.

See ya’s at the voting booth. No go back and play NICE in your sandbox.

#269 CAD on 01.09.12 at 8:49 pm

DISCIPLE, how about I don’t imply that your generation is a bunch of spoiled brats who have overly high expectations if you don’t imply that my generation had it easy and coasted into being a bunch of fat cats who don’t care about your needs. I’ve been through one shift in housing that cut my house value in half so I know that it can happen, and today’s situation is that housing is going to correct again and give younger generations a shot of actually obtaining one at decent prices. When the time comes though, they still need to temper expectations, JUST LIKE WE DID, and expect to sacrifice to get what they want. Short term must be replaced with long term expectations and behaviour. Right Dorothy?

#270 Westernman on 01.09.12 at 9:38 pm

Form Man,
That’s the best your tiny little alleged mind can come up with? I must like B.C. if I don’t like Sask., Alb. and Man.?
Pitiful man, just pitiful… you just can’t think out of your little box can you?
# 265 – not rude, just truthful and factual… I’ve got it dead right and that threatens your little sheep-like mind and makes you uncomfortable… too bad.
Anyway kids, I’ve leave you to try and out-polite and out-politically correct yourselves for the rest of the evening. I’ll be back tomorrow to shine the harsh light of reality on you.
I must say that there is no better value for your entertainment dollar than an indignant Canadian liberal.

#271 Daisy Mae on 01.09.12 at 9:48 pm

CAD on 01.09.12 at 1:40 pm
“disciple, before you trash Dorothy about how everything was so much cheaper back then, remember that salaries were much, much less than today. Bread may have been 20 cents but salaries may have been as low as 4 digits depending on what decades we’re comparing….”


I think many are being too hard on Dorothy. She DOES make alot of good points. The pendulum is swinging back the other way finally and we will be forced to become more frugal in the future, out of necessity….and that’s not a bad thing.

#272 DonDWest on 01.09.12 at 10:37 pm

Rather than argue with Dorothy any further (I’ve learned that when a baby boomer is convinced and runs off emotion, there’s no moving that pylon) I’ll instead indulge this blog with yet more sixth grade mathematics.

Let’s take Dorothy’s 240K house in rural British Columbia as an example she gave as “affordable housing for young people if they just learned to budget.” Well dear Dorothy, here’s some budgeting:

A quick glance on the mortgage calculator reveals that a house with a price tag of 240,000, with 20% down ($48,000 up front), at 4% interest, with an amortization period of 25 years comes to a mortgage payment of $1009.96 per month.

Affordability is generally measured by housing taking up 1/3 of your pre-tax income. So let us calculate just how much our hypothetical young person needs to earn a year to afford this 240,000 modest adobe. 1010 * 3 * 12 = $36, 360 per year. Already, getting such a wage in rural Canada would prove difficult for someone just starting off; only one problem, we’re not finished yet. . .

There are other factors in housing affordability to consider than just the raw mortgage. When we put in property taxes of let’s say 1% ($240,000 * 0.01/12) we get another $200 a month added to the monthly mortgage cost. We must also consider heat ($100 a month, conservative est.), electricity ($100 a month), maintenance ($100 a month, extremely conservative est. considering the house is an old beater, but at this point it’s getting monotonous).

Suddenly our monthly bills on just the house alone tally up to $1510 a month. Assuming you want to spend only 1/3 of your budget on housing in order to maintain affordability; our hypothetical young person would need a wage of $54,360 per year ($1510 * 3 *12).

How many jobs pay someone in their 20’s $54,360 per year in rural Canada? Maybe if you become an engineer, but even the engineer has a few dilemmas of his own. How exactly does an engineer save for a $48,000 down payment when he spent 5 years out of the workforce going to school and may have debts in the tunes of several thousands? Maybe he can handle the monthly payment, but he’ll certainly have difficulty securing a down payment. He may end up waiting until at least his early 30’s to get that down payment. This is assuming everything goes well and there’s no sudden unwanted interruptions.

This of course overlooks the fact that not everyone can become an engineer. This of course overlooks the fact that baby boomers mostly became first time home buyers in their early to mid 20’s and only needed a 10th grade education in order to secure that home. This of course overlooks the fact I forgot to include home insurance, but I’ll assume it’s good because of the 20% down, but at this point I’m beating a dead horse. . .

Now, perhaps there’s an off chance Dorothy is correct. Maybe I’m just a punk with no discipline who doesn’t know how to save with 100K in his bank account while only making 35K a year. Maybe I should have just pitched a tent all of my 20’s and wiped my butt with leaves.

I’m certain this will be followed with condescending remarks over my lowly income in our incredibly status driven society. Well guess what? The reason why I have such a low income is because I wasted so many years in school trying to get that engineering degree that I had no aptitude for what so ever. I went after that engineering degree because I knew it was the only gateway to the middle class comparable to that of a baby boomer high school 10th grade graduate. Arguing that we can all just become a double engineering couple is a bit daft. Not everyone has an affinity in mathematics and physics. The truth of the matter is I would have probably been better off getting one of those worthless artsy degrees rather than simply flunking out of engineering disciplines multiple times.

Without question the baby boomers have had it much easier than my generation. It’s not even REMOTELY comparable. Where all the infighting begins is that if baby boomers ever admitted they had it easier; like good little narcissists, they would feel that such an admission cheapens their own success.

Unfortunately, my generation are cowards, they won’t demand anything in the fear of being viewed as more entitled than they’re already portrayed. Propaganda working well as always. . .

#273 jess on 01.09.12 at 10:58 pm

Blackrock’s 10 predictions for 2012
Romney /Repatriate offshore money (8.&10. )

“The repatriation tax break created a competitive disadvantage for DOMESTIC businesses that chose not to engage in offshore operations or investments and provided a windfall for multinationals in a few industries without benefiting the U.S. economy as a whole,” said the Democratic staff of the Senate Permanent Subcommittee on Investigations, in its Oct. 11, 2011 report, done in response to the new push for another tax holiday.”

win america

#274 Randman on 01.09.12 at 11:46 pm

Condo’s vs freehold home ownership…

There is one actual good part to condo ownership, and that is “forced savings for future home repairs”.

“The problem is that most condo corporations are run like the government… Lots of miss use of funds, top heavy with high management fees, and not properly tendering contracts, someone is usually being greased.. If they just used the monies as they were intended, there would be no reason to increase to the levels that they do…..”

Management fees …in general about $20 per unit per month …how is that top heavy!

For that price you get years of experience and advice
that unfortunately the average Strata council ignores
because there’s too many poor council members
who..having no power in their jobs or marriages feel
the need to be “important” by being on council.

Most of the time these people blather on about items that affect their own self interest ….wasting valuable time and money….

Are you the Strata President or just the treasurer?

As far as someone usually being greased…..
Welcome to the friggin real world dummy!

#275 Helen - A fair analysis or Toronto's market on 01.10.12 at 12:41 am

Judge for yourselves, the correction must be 12.5% in Toronto (based on official data)

#276 The Thing in the Basement on 01.10.12 at 1:35 am

274 DDW – Now I know why Garth calls it a pathetic blog. And sorry about my 3.5 GPA in eng’g (Not that it does you any good in the real world – I’m not even a P.Eng) If you were as good at work as you are complaining……

And you really want a house badly, I mean, you’re entitled, right?

#277 Snowboid on 01.10.12 at 1:44 am

#256 Dorothy on 01.09.12 at 6:50 pm…

Let me explain, as a confirmed snowboid. Winter in a purchased Arizona SFH that cost a tad over $ 120K in Canadian dollars (a home that would sell for about $ 550K in the Okanagan) – where all costs associated with the home and living are about 35-40% less than in Canada. Summer in a rented $ 400K (approximate) condo in the Okanagan for a tad over $ 1300 a month.

I believe the math speaks for itself.

#278 “Four years ago we sold our Vancouver Westside house for $1.5M. Thought we did pretty good. Yesterday we see the identical house situated right next door to ours listed for $2.76M. Now that’s insane.” on 01.10.12 at 3:14 am

[…] next door to ours listed for $2.76M. Same vintage and everything. Now that’s insane.” – Dr. WAYNE at 8 Jan 2012 6:33pm Insane? If you still owned your house, you’d think it made perfect sense. Whatever you do, […]

#279 Habbit on 01.10.12 at 7:14 am

#274 DonDWest you make some valid points. I’ve often thought to myself and have expressed this to my young adults that I would not want to be starting over in the enviroment we are now in. We cannot choose when or where we are born. Both of us are fortunate we were not in europe in 1917 or 1944. We are however extremely fortunate to be born here in this great country. Odds are we would have been born in China, India or Africa. We all need to get away from the blame game, boomers included. I don’t speak for anyone else but as a boomer I want the good life however that is defined for our young folk. As time goes by young people will redefine this and it is all good. We need to work together as families. The goals now may be more difficult to attain, so we must persevere. My son is a university grad. He graduated will very little debt. In order to accomplish this he worked the summers and part time when he was able. Also our familly topped up as much as we could afford the costly obligations. Once he graduated he lived at home for a year to wipe out the left over debt. Point is we did it together. Wasn’t easy. He wanted his own place, we wanted some space after 24 years. It’s tax time again and time to rebalance our modest profolio. Our objectives are to not be a burden to our children when we get older and to leave them an inheritance that we and their grandparents wanted. We both cannot control what the government will do. Should they change the OAS and CPP eligibility to 67 years so be it. Should user fees come into play for health care so be it. If this happens we may have to work longer thus again taking up jobs that should go to our young people. Also this would surely impact what we want to leave behind for future generations. We live a modest but good life. It is not all about us but more importantly the well being of all of our familly. I do not know of your famillies situation or how you interact. We keep our young folk informed of our situation and often they have valuble input. We feed of one another. It’a a mutual respect thing. Thinking of others is I think a great way to go. Hope this helps. Best wishes to you and your familly.

#280 disciple on 01.10.12 at 10:08 am

Dorothy – Your views are slightly narrow. You state many things that are patently obvious (being frugal and saving is a good thing, etc… – I mean do you honestly believe that nobody else but you can understand this?), and in the same breath you make revealing under-your-breath remarks that you know are inflammatory towards the younger demographic. You fool, they are not blaming their parents for their mess (except whiners like DonDWest etc…), they are taking exception to the fact that you are blaming them for the current mess. Get it? That’s why the inter-generational backlash.

I hope by now you are ready to admit you were wrong when you claim that most people can’t budget. It depends on the overall plan. Not everyone is like you and desperately wants to own a house at all costs. You have been a maniac for so many years in this regard, and now your mania has produced a mature narrowed mind incapable of empathy or even sympathy for anyone who does not hold your antiquated views.
The only reason I can come up with for you doing this, is that you are envious of the material advances of the generation pursuant to yours. You feel that your sacrifice should mean something now, and you relish the correction to come. Just like Tony but you don’t need the nicer house now.

Perhaps scientific and civilized progress is something totally alien to you. Yup, that must be it. Every generation must be like yours and believe in the same ideals, or else they are wrong, right? Please, let me introduce you to the 21st century. I say this a lot on this blog…. Your culture is your enemy. Break free.

#281 Are-we-there-yet on 01.10.12 at 5:38 pm

RBC/BMO CEOs warn on housing in Tor/Van

#282 Mia on 01.12.12 at 3:33 pm

And where do u suggest the boomers will be living after selling?? Definitely not the streets….empty nesters wanting do downsize will go after the condos market…

Condos r best investment i think…


Renting a condo is better. Adequate cash flow, not owning real estate, is the goal. — Garth