“His blog,, clocked an impressive five millions visits last year, and the number keeps growing. Those who comment – the site elicits 50,000 comments a year – tend to be regulars, even addicts, who gleefully offer sentiments like, ‘We are so screwed!!!’

This disturbing blog, and its painfully addicted, social outcast readers, is featured in a current edition of the nation’s smarmiest, eat-the-poor mag, Toronto Life. Four full pages, no less. Mostly piffle, but there’s a fetching picture of me on the grounds of the bunker. Diddling a balloon.

Now the fact a publication which ceaselessly pumps real estate (“Where to Buy Now: the City’s 10 Next Neighbourhoods!” is the cover headline) would waste three thousand words on this pathetic topic is interesting. But, of course, it’s not really about me, as hunky and feral as I may be. Instead, it’s a cover-your-butt piece just in case I happen to be right, and they missed it. After all, how can you publish a magazine purporting to know everything about a place and maybe flub the biggest story impacting your readers?

As you may have noticed, talk of a real estate correction is now everywhere. Big banks, among other members of the real estate industrial complex, are working hard to contain the threat. About every week a bank economist trots out a new housing report or gives a speech, warning prices will go down, but reassuring no “US-style” collapse is in the cards. Increasingly the media is weaving a correction into its patina of real estate coverage. And so it should. It’s here.

In recent days I’ve given you some perspective on sales and price numbers from the major centres – Toronto and Vancouver. Especially in BC, the cracks are turning into chasms. When I talked about the decline on a Victoria radio station for half an hour Monday, nobody pushed back. It is simply self-evident.

In Calgary, even with $100 oil, things are not going well. Despite realtor hoopla over gains in 2011, SFH sales were the second lowest last year in an entire decade (surpassed only by the months of the financial crisis), while condo sales tumbled to the second-worst level since 2001. Prices today are lower than they were in 2007. And about to go lower.

Says BMO: “While the timing of said slowdown remains up in the air (and it’s no foregone conclusion it will start this year), it is highly unlikely that Canada’s housing market can continue its recent winning ways.”

We may get a little more insight today (Tuesday) when CMHC releases data on how many new construction projects got under way last month. As you may recall, the numbers for November were a disaster, the lowest in nine months. And already this week we’ve had news of another bad month for building permits – harbingers of new housing starts to come.

Meanwhile in places like downtown Montreal and (especially) Toronto, the construction cranes defy gravity, adding thousands more condo units even at a time when everyone can see the economy’s stalling out amid overwhelming personal and household debt. If it weren’t for idiot speculators and dozy first-time buyers hot for a mortgage, monthly sales numbers would be causing cardiac arrest at Re/Max.

Yesterday I presented, as clearly as I could, statistical, economic and demographic evidence why real estate is cooked. Hopefully you concluded that prices are unsustainable, held aloft only by debt. Without rising incomes and fresh jobs, there is no reason for more gains. And when fear replaces greed and lust, anything’s possible.

No, a ‘US-style’ crash may not happen. But we don’t need to see cities losing 40% of home values to precipitate a crisis. Our nutso 5%-down, government-insured mortgage rules along with emergency interest rates, RRSP-raiding downpayments and cash-back bank bribes to new buyers have knocked Canada firmly into the sub-prime world we once ridiculed Americans for. So, a decline of even 10% will do to Canada what it’s done for Calgary – push scads of recent buyers underwater, especially those who foolishly opted for condos without land value or the ability to contain costs.

Nobody knows where this is going. Not the metrosexual Toronto Life editors nor the guy they featured in a piece called ‘Bubble Boy.’ It could be mildly irritating. It could be a rout. But if I had the bulk of my net worth in a house, I wouldn’t be waiting to find out.


#1 Trailer Park Boys on 01.09.12 at 7:30 pm


#2 SHORT IT on 01.09.12 at 7:33 pm



#3 Kilby on 01.09.12 at 7:52 pm

It is interesting watching all the banks and media outlets climbing on board. It is funny how anything can be so obvious yet so denied by so many.

#4 Keeping the Faith on 01.09.12 at 7:54 pm


Wonderful post once again.
You’re like a person eating with a fork, you may bite your tongue once in a while but you never miss your mouth.

As they say in academia, “it’s all academic now”

The MSM is has now confirmed the ‘self-fulfilling prophecy’ relating to Canadian RE, “If you write it, it will come”
… no where to go but down.

#5 Layla Bolt on 01.09.12 at 7:56 pm


#6 Prepmonkey on 01.09.12 at 7:56 pm

There will still be houses being built far into the future, but on a more subdued level, it will not be the kind of thing that occupies the minds the entire population. As I work in the construction industry, I can’t help but think of how the catabolic collapse not occur. People were able to buy houses because they were building houses, when the building returns to “normal” sustainable levels, houses bought with boom time jobs/money will be in trouble.

#7 Layla Bolt on 01.09.12 at 7:57 pm

By the way, I love your pictures! Every night I hear my parents laughing over them uncontrollably!

#8 Ballingsford on 01.09.12 at 7:57 pm

Hi Garth,

Why would anyone buy these bonds from Germany that guarantee you’ll lose money? Hard to understand also why the strong desire to buy them. Is this a Corporation loop hole or something?

#9 Canadian Watchdog on 01.09.12 at 7:59 pm

I’ll leave this image here as a marker for tomorrow’s housing starts report.

In a 2008 report, CMHC called Ontario to have 65,000 housing starts by the end of 2012. If that number comes in accurate or close to it, I wonder how CMHC is predicting the market with such accuracy.

#10 Bill Gable on 01.09.12 at 8:01 pm

Toronto Life articles are shameless in their “pumpage”, and yes, I am surprised that Mr. Turner has gotten some ink.

Fascinating that no one ‘pushed back’ on Victoria Radio, when the nasty truth is, Victoria homeowners are in the soup.

WORSE. Reports from people that follow America closely – we could have 11 MILLION homes on Banks “shadow inventory”.
That’s somewhere above $2.5 Trillion liability for Banks that wrote up the subprime garbage.

So – as you look at that home in Palm Springs. FORGET IT, dude.

DON’T TOUCH ANY US RE. Radioactive.

What happens when the tidal wave engulfs Vancouver, only the Black Swan knows.

#11 Paul on 01.09.12 at 8:02 pm

Garth, can you post the link to the radio show?


#12 Dorothy on 01.09.12 at 8:08 pm

Advising people to sell their homes into a “down” market if they don’t “have” to, is the same as advising people to sell stocks into a “down” market if they don’t have to.
I agree that those who are overleveraged would be wise to get out while they can (IF they can) but the rest of us would be wiser to sit tight and hold, and hold and hold, just the same as you would if you were talking about equities.
Remember, the loss is only a paper one, unless you choose to sell.

#13 Randy on 01.09.12 at 8:09 pm

First !!

#14 Keeping the Faith on 01.09.12 at 8:13 pm

… someone has to call the number to see what they’re selling and no matter what it is, low-ball offer by 75%.

Stevenson, I think it’s your turn.

#15 Onemorething on 01.09.12 at 8:15 pm

2003 Prices coming! That’s It and all you need to know!

Boomers yes now at age 59 avg. need to sell. WHY?

Just the basics:

1/All net worth in RE
2/Rates that dont pay 100K bank accounts well.
3/Your not worth what you’re paid anymore and we’re looking for those who can do twice the work at half the cost on contract!!!! Minus the attitude! You’ll be lucky to keep your job.
4/You live to age 85+ and you’re going to need operating capital.

Once the alpha boomers jump ship, it’s all going! Every other gen is coming for the ride.

Condo market Canada – Garth would like to see what happened to Condo market occupancy rates in California after the 50-60% haircuts to RE. I’m coming at this from the point of those dumping McMansions and looking for places to dwell.

Lastly, being a contrarian on RE, I’m also one on the inflationary take. Deflation will again visit us and while I’ve got my eyes on 4 properties globally, other cool assets may finally be within my reach.

Liquidity is the only safe haven!

See my next post on Deflation and what I think it means to us now!

#16 Montrealer on 01.09.12 at 8:15 pm

You’re early today!!!

#17 Steve-O on 01.09.12 at 8:16 pm


You should do a post about RRSP’s and your thoughts on why, when and if to contribute. And why raiding them to purchase a house is bad.

I am starting to have doubts that RRSP’s are all they are cracked up to be.

#18 LJ on 01.09.12 at 8:16 pm

In Calgary, the city sent out its tax assessments last week and I have been hearing from friends that they are not happy with the outcome. They thought that they were gaining ground, but instead they are losing equity hand over fist. And, this is based on historical, July 2011 values…

#19 Beagle on 01.09.12 at 8:17 pm

Sold an 1940’s small house in Victoria in March last year and took a year off to travel. Currently I’m in sunny Florida on the gulf coast, I could buy 4 similiar houses here for what we got for the Victoria place. Also cost of living here is so much less, and I spent the day on a beautiful white sand beach watching dolphins play. Alot of people in BC are delusional.

#20 Doug in Victoria on 01.09.12 at 8:19 pm

Hi Garth, thanks for your tireless effort to raise awareness. Do you know if there a podcast of the Victoria radio interview? Thanks.

CFAX, 11:35 am PT. — Garth

#21 Onemorething on 01.09.12 at 8:20 pm

The consensus opinion is inflation, which certainly seems to be the logical byproduct of running the
printing presses 24/7 and flooding the markets with liquidity. It also makes sense that as currencies are getting debased and going down then gold will continue to rise and provide a good safe haven. However …

If history has taught us anything it has taught us to expect the opposite of what the majority believe will happen. The opposite of inflation is deflation, and in a deflationary environment the world will hemorrhage, convulse, and de-lever. Every asset will fall in price, including our beloved precious metal.

In a deflationary environment cash is your best friend and is king, and the thing we fail to remember about currencies is they are all relative. Yes, the USD is turning into monopoly money, but when the world is all playing the “same board game” the currency that goes down the least in comparison to its rivals will be
the winner. As counter-intuitive as it may sound, the U.S. Dollar
just might just be the cleanest dirty shirt in the laundry basket,
and if this turns out to be true, then holding USD (not gold) will be the smart contrarian play.

#22 jaymel on 01.09.12 at 8:31 pm

Good post Garth. The reality is no one is going to push back especially in Victoria. I just heard that for all of December and the first part of January there has only been 3 sales for the City of Victoria. Indeed, it is starting.

#23 Shalimar on 01.09.12 at 8:39 pm

News from ground zero – Vancouver Westside.
I interviewed 2 of my Westside postman the other day who said that at least 25% of all the SFH houses he delivers to are empty. These houses are all $2m+ and evidently ‘yield’ isn’t important.
Westside SFHs fell 19% in about 8 months during the 2008 / 2009 crisis until the feds panicked and dropped interest rates. How much could they drop if interest rates creep up over a few years?
If the CMHC finally gets a clue, is it possible for them to disregard mortgages with bad underwriting, as opposed to be on the hook for billions of $s worth of failing real estate?

#24 Makaya on 01.09.12 at 8:46 pm

Bubble, what bubble?

#25 MB on 01.09.12 at 8:47 pm

The fallout in Vancouver is going to be devastating to so many families. Not only the loss in equity or ‘wealth,’ but the loss of employment, especially in construction, that will accompany such a correction.

Doing your homework and actually accessing what one can afford not only right now but in a higher interest rate environment is completely lost on people here; I think many mortgage brokers are to blame for this. Absolutely no one buying property right now is actually considering “risk” that goes along with mortgaging your future on an illiquid asset or the cost/benefit of renting. To many homeowners, equity is as good as cash.

Like you explain so well Garth, economics, demographics and stats all point R/E in the same direction, but it will have to take a hit to the bottom line of most to start listening and understanding the obvious, but by then it will be too late. I think that time might already be here.

#26 Randy on 01.09.12 at 8:54 pm

The need for an improved cash flow in retirement is leading to record number of reverse mortgages in Canada, according to a HomEquity Bank study.

The report released by the only national provider of reverse mortgages in Canada notes its reverse mortgage originations were up 42% in the fourth quarter of 2011. On an annual basis, the company originated $239 million in reverse mortgages, a 16% year over year jump.

Over the next 20 to 25 years, the Canadians population over 55 years will reach 10 million, Yu says, predicting that retirement tools such as reverse mortgage are going to get more popular.

Reverse mortgages are a very bad idea. — Garth

#27 Nostradamus Le Mad Vlad on 01.09.12 at 8:59 pm

“Nobody knows where this is going. This disturbing blog, and its painfully addicted, social outcast readers, Our nutso Addicts 5%-down, government-insured . . .”

The part about the CPC being a nutso addict govt. is good. Aptly describes H&F’s policies. Paul Martin was known as Mr. Dithers, but at least he had a name. These two jokes are not even worthy of an insult.
#149 GregW, Oakville — Hi Greg. ‘Tho the Russians chose not to build Iran’s S-300 missile defense system, but chances are someone conveniently forgot to take the manuals with them, and Iran built their own.

As to the GPS missiles, that technology may be from China, Russia or the US.To quote Ray Davies from The Kinks, “It’s a mixed up, muddled up, shook up world except for Lola, la-la la-la Lola”.

#216 Rich Renter — “Man the foreplay is awesome, this correction will be the best orgasm ever.” — Stop already, I can’t handle all this heavy breathing!

#21 Onemorething — “. . . to expect the opposite . . .” — Isn’t there a gentleman named Buffett who preaches “Buy Low, Sell High”, yet bimrons (cross between bimbos and morons) keep doing the opposite, buying high and selling low?

Further education may be required!
Gold, Derivatives and Money “All the gold ever mined in history, all the bullion, jewelry, coins etc. all together come to an estimated $8 trillion. That is it. The total exposure on the credit default swaps? $750 trillion according to this headline!”; US Govt. selling 4closures in bulk; Obomba Dad (Nostradamus Jr.) is right — the US will attempt to bankrupt TROTW by pre-emptive wars, but all China needs do is a) call their IOU’s from the US, then b) ditch either the Yuan or Remnibi; Targeting Journalists who give the Occupy movements good press, and DHS monitoring journalists; Gas Scam “You see, gasoline usage, around the world, has fallen dramatically.”; 1:09 clip Obomba says ‘they’ are going to kill the US$. Who are ‘they’? Colorado homes increasing; Cuban Missile Crisis II “This will mean war. Pissing off the Federal Reserve is the ultimate unforgivable sin!”; Mitt Romney Poor with figures, but TPTB want him in.

10:51 clip IMF targeting Nigeria, hence the increase in violence there; No Jobs “And this is why there are less and less decent companies, who hire less and less employees, who pay less and less taxes, so there’s less and less state money for social aids, and this is why social aid is about to come in the form of concentration camps.”; Monsanto now owns Blackwater.
Iran Stretching the elastic band with the US until it breaks (or not), and Panetta admits Iran not developing nukes. So who is orchestrating all this fuss in the SoH? 11:26 clip At least the man did the right thing in defending the woman; disciple This one is 4 U; 14:26 clip NDAA is legalized tyranny; Turkey New satellite? and German tech.

Muslim Brotherhood “Dammit, we murdered your leader, smashed your state bank, and brought you democracy so you could vote for our guys!” — Official White Horse Souse (; Evidence the NWO is about to shit its pants; Mel Lastman This is the sort of snowstorm one calls the army out for; Fukushima Headline explains a lot; Atomic Golf Balls “The one about the golf balls is my favorite, but that last one about Hanford will curl your hair … if you have any left.”; Spy Phones The complete list; Cdn. Harassment Men – avoid women.

#28 Retired Boomer - WI on 01.09.12 at 9:30 pm

WeLL??? Is the Canadian RE market beginning to feel like the proverbial hooker in church? Unwanted, and Unwelcome, Unloved?

Welcome to US Real Estate craziness north of the 49th.

Yes, when the Ritz hits the fan everybody gets turdy! Some places where our idiocy went rabid FL, CA, AZ, and NV suffer the most, and it is NOT over here, yet!!

So, Vancouver, outlying GTA, Victoria welcome to write-down land. Oh, its not going to be worth nothing, just less than you might have thought. Sub-prime buyers are toasty now. Maybe that buyer in the last few years with 10% down will find he is going to sell with no equity.

Hell, it is only money…sure, it might be YOUR money, but it is not your life is it? If you’re stuck you can hold on, IF you CAN hold on. Lose your job, have no room on your plastic, you just might be toast. Bankruptcy is always an option, that’s why there are no debtor prisons these days.

It is always interesting to view the suffering of the money incompetents, but i hold little pity for their plight. Some took reckless chances, and now they’re on the losing end.

DEBT leaves no room to maneuver in life. Live within your means, they could become far more austere in short order.

Best of luck to my northern neighbors. Don’t say you were not warned!!

Me, the retired boomer, I’ll be just fine, thanks.

#29 Not 1st on 01.09.12 at 9:35 pm

My plain jane 1300 sqft bilevel in cowtown:

– 2001 purchase – $205,000
– 2007 appraisal – $475,000
– 2009 appraisal – $450,000
– 2012 sale price – $430,000

Thats nearly a 10% drop already. I see a lot of 2100 sqft 2 storeys in the burbs selling for around $400k. I think they will be down around that $300-350k mark in a year.

Now I just need to deal with my Sask home which has doubled too.

#30 T.O. Bubble Boy on 01.09.12 at 9:43 pm

Hold it right there… Toronto Life does a piece on a RE Bubble Boy, and it wasn’t me???

Whoever the imposter bubble boy is, he is a giant fake.
(oh wait, that’s why he’s in the most superficial mag in the city)

#31 Don on 01.09.12 at 9:45 pm

Inventory NOT Sales

Sales do not affect prices of homes (not directly anyway). If you look on the TREB website you can see from as far back as June 2010 to May 2011 sales have been down y/y but prices have increased y/y. There have been many months that sales have dropped by 10- 20 percent. For example in April 2011 condo sales decreased 20% but prices increased by 8% (TREB). Cheap mortgage rates, inventory, employment and foreign investments seem to be the major factors in rising home prices.

#32 Paul on 01.09.12 at 9:47 pm

#22 jaymel on 01.09.12 at 8:31 pm

I think you’ll find you heard wrong. I know of 4 that have sold in the past 2 weeks.

#33 Junius on 01.09.12 at 9:54 pm


I was not suggesting sympathy for my generation but for under 30 crowd. I have a number who work for me who are super smart, hard working and committed. They could run circles around you and yours but that isn’t saying much.

Are you sure that you don’t need medication to deal with this personality disorder tou display here daily?

#34 SHORT IT on 01.09.12 at 9:55 pm

#24 bob’s my uncle on 01.09.12 at 8:42 pm

Nope, if you go LONG Canadian real estate your throwing your money away. The bubble has finally popped!

#35 TurnerNation on 01.09.12 at 10:11 pm

The blog dogs are in a frenzy! Howling at the moon. We can feel it. The prey is so close.

2012 is survival of the fittest year.
F and the boys will soon put the kibosh on the herd. Head em off at the pass.
Rabid blog dogs will pick the weak ones off in due course.

We will feast this year, on dividends and cheap housing.

#36 jaymel on 01.09.12 at 10:12 pm

#33 Paul. Nope I don’t think so. In the City of Victoria 3 SFR sales. Sure there maybe more condos, townhouses, duplexs and so on, but SFR 3 for the city. Now if we include other areas the numbers jump but no where near where they have been. For the entire Capital region 49 sales…langford to the gulf islands, hardly moving for 5 weeks. Really quite shocking…unless you expected this.

#37 a prairie dawg on 01.09.12 at 10:14 pm

It’s not 5 million annual visitors addicted here.

Probably closer to 1 million.

The other 4 million yearly hits are those “first” anal retentives, hitting their browser refresh a couple of hundred times each night. ;)

#38 Devore on 01.09.12 at 10:19 pm

When I talked about the decline on a Victoria radio station for half an hour Monday, nobody pushed back. It is simply self-evident.

Do you have a link to an archive?

#39 Victoria on 01.09.12 at 10:20 pm


I sat inside beautiful rainy cold mossy Victoria thinking how I wanted to bash my head against the wall.


#40 Stinky the Fish on 01.09.12 at 10:23 pm

We are so screwed!!!

#41 Fool in the GTA on 01.09.12 at 10:27 pm

As a renter in the GTA, I look forward to the glut of condos. Rents will be under control for a long time.

#42 Paul on 01.09.12 at 10:40 pm

#37 jaymel on 01.09.12 at 10:12 pm

3 of the 4 I know of and I see today the sold sign is off the 4th. And yes I expected this.

#43 Arrow to the Knee on 01.09.12 at 10:44 pm

I almost bought a condo in Toronto last night…then I took an arrow to the knee.

#44 45north on 01.09.12 at 10:53 pm

Victoria’s News Authority CFAX 1070: VPD found a girl OD’d on ecstasy.

paramedic (my niece): “stay the hell away from this shit”

No, a ‘US-style’ crash may not happen.

we should be so lucky. Comparing Canada to the US at the height of its housing market (2006): Canadians have greater debt to income ratio and greater price to rent ratio. (If you’re highly leveraged a high price to rent ratio virtually guarantees a sell-off) US banks have kept housing associated with distressed mortgages off the market. Canadian banks cannot or can do so to a lesser extent. The US was able to lower interest rates to cushion the effect of the falling housing market. Canada cannot because Canadian interest rates followed the US down. They (the interest rates) are now at zero – they cannot go lower. One more thing – as the housing market started to crash, US state governments continued to spend and only after 5 years did it become evident they could spend no more. Major Canadian provincial governments such as Ontario and BC are already in huge deficit positions. They have to reduce spending at the moment that housing crashes.

So yes we won’t have a US-style crash we’ll have a Canadian-style crash. The perfect storm.

#45 Doom on 01.09.12 at 11:06 pm

Game over man! Game over!

#46 Condo Sucker on 01.09.12 at 11:11 pm

Speaking of regulars who are addicts to this blog, where has “Utopia” been hiding for the past couple months? I miss his posts.

#47 TheFirstRick on 01.09.12 at 11:15 pm

#19 Beagle on 01.09.12 at 8:17 pm
#19 Beagle
“Sold an 1940′s small house in Victoria in March last year and took a year off to travel. Currently I’m in sunny Florida on the gulf coast, I could buy 4 similiar houses here for what we got for the Victoria place. Also cost of living here is so much less, and I spent the day on a beautiful white sand beach watching dolphins play. Alot of people in BC are delusional.”


Let us know how the US citizenship process works out for you. It’s these ‘minor little details’ that are so often omitted on this blog.

#48 Butch on 01.09.12 at 11:22 pm

What would a housing correction/burst do to the loonie?

Would it be wise to convert a portion of my investment portfolio into USD/US stocks?

#49 on 01.09.12 at 11:27 pm

This series about rehabbing foreclosure properties is great:

Most of the houses are dumps. About 1/3 of the time they lose money.

#50 DM @ YYJ on 01.09.12 at 11:34 pm

Link to December Stats from the VREB.
19 SFD sales in the City of Victoria for December.

#51 45north on 01.09.12 at 11:40 pm

you know most Canadian did not buy stocks in Nortel but they did buy houses. We are about to see a Nortel moment whose drama and intensity will be the square of the original Nortel moment.

Mohamed El-erian captures my thought: “the greatest risk is that people’s mindset doesn’t evolve to understand the underlying characteristics are changing”

Bloomberg by way of Zerohedge:

You see if you live in the States you do understand that housing is a costly risky venture whose long-term value can go down. So they are making good economic decisions based on this understanding. Canadians don’t understand and they won’t. They will pump money into housing hoping for the spring, the fall, next year. We need a political party that can say “let’s cut our losses”.

#52 City Slicker on 01.09.12 at 11:44 pm

From all the evidence we covered over the years, it sure does sound like a Canadian crash would be worse.
There is not one reason I can think of that it wouldn’t.

#53 Uh Oh Canada on 01.09.12 at 11:45 pm

I never thought this blog was pathetic- until now. To make it on to Toronto Life!? What’s next? Global TV?

Yes, I am shamed. — Garth

#54 NewWorldPartyDotOrg on 01.09.12 at 11:48 pm

“Many Canadians believe that when this housing bubble bursts, they will have a soft landing, unlike the American’s. They say that the outcome for Canada will not end in a disaster like it did for the U.S. economy, because Canada did not have AAA rated CDOs (Collateralized Debt Obligations), NINJA loans, etc.

True, Canada did not have these, but neither did Spain, Ireland or Japan. Nevertheless, Spain and Ireland are now worse off than the U.S. Here is a comparison: …”

#55 connie on 01.10.12 at 12:07 am

I been seeing on Kijiji website rentals classified as urgent ads. Is this a sign of the times when landlords cannot find tenants? They are building so many condos and many are priced where the monthly mortgage is much lower than a rent. So for the average person a condo at $170K tax included is very tempting

#56 Morry on 01.10.12 at 12:16 am

We are so screwed… we be blue and tattooed too …


we bought 8 months ago and we are riding the wave unscathed. our down payment was over 20%. Our costs are BELOW what we paid in rent. AND our property is up. 20% up!

Your milage may differ… but i love mine!

#57 Al on 01.10.12 at 12:19 am

Today in my lobby in Calgary, Dude was telling two hot ladies that since he could not sell at a decent price he is not renting the unit out, the ladies were potential tenants.
A friend’s son bought a townhouse because the son’s new wife liked the colour of the kitchen. They paid full price despite that there were no other bids.
Almost too sad to be funny.

#58 stealth on 01.10.12 at 12:26 am


Lets assume that your predictions come true within a year or two.
What will you write about then?
What will be your next topic?

I like to prepare early.


#59 from kits on 01.10.12 at 12:41 am

sky is falling?

it’s amazing how many people know about this blog, was in a coffee shop the other day and one guy was reading the blog while I walked in, and 2 people beside me were talking about it.

all good things of course!

#60 Unistar38 on 01.10.12 at 12:50 am

#59 Morry,

Please tell where your property location is. I want to ride the wave up too! I want to have another 20% up.

Please, please, please tell us…

#61 Original Don on 01.10.12 at 1:06 am

Kudos Garth, they are listening now.

Tried to warn a friend and he hung up. Asked him to consider waiting a bit – even tried the global uncertainty card to get him to wait. Apparently his realtor used Amazons to entice him into the buying centre.

Young and dumb and …

Time to teach economics in high school and make it mandatory.

#62 Brad on 01.10.12 at 1:09 am

Looks like the party’s getting started

#63 DonDWest on 01.10.12 at 1:11 am

#12 Dorothy

‘Advising people to sell their homes into a “down” market if they don’t “have” to, is the same as advising people to sell stocks into a “down” market if they don’t have to.’

The big difference being here is that people who buy stocks actually own the stocks; unlike a mortgage that the bank owns and puts you in debt to the tune of half a million. The stocks may also have dividends that can act as collatoral. The house on the other hand has no collatoral. Essentially you’re paying “negative dividends” in interest rates to the bank. Highly leveraged interest rates that can prove quite costly even at a small percentage.

Now, if you mortgaged an apartment complex, a triplex, a duplex, etc. now obviously the story may be a little different depending on how the rental market in your region plays out after the real estate collapse.

#64 Tony on 01.10.12 at 1:14 am

Re: #49 Butch on 01.09.12 at 11:22 pm

Very, very little at most about one-tenth of one cent if real estate drops around thirty to forty percent. Canada is tied into commodity prices especially oil. The Canadian dollar usually moves up and down depending on the price of oil.

#65 I used to be a real estate investor like you... on 01.10.12 at 1:24 am

… then I took an arrow to the knee.

#66 P & T S on 01.10.12 at 1:33 am

If “using the concrete block between the ears” is now regarded as being a characteristic of a “Social Outcast”, we’re very happy to be Social Outcasts.

#67 Nostradamus Le Mad Vlad on 01.10.12 at 1:43 am

#58 bob’s my uncle — Hi Bob. From your link: “Meanwhile the annual cost of the Tax Free Savings Account – announced in the 2008 budget – has grown from $65-million in lost revenue in 2009 to $220-million in 2011. The tax expenditure cost will continue to grow as Canadians save more in these accounts.”

Does this suggest H – F will do another IT flip flop, and can the TFSA, because it’s a godsend to people who want to invest? ‘Owzaboud doing away with Harper’s $XXX bln. fighter purchase? It doesn’t make sense to make the country’s finances worse by buying something that doesn’t work properly, and we don’t need.
Okanagan RE Facts and figures, in a double-fudge numbered scheme to make it all nice and pretty; RBS axing 4K jobs in UK; La Senza is moving its models on; Davos Ten power brokers try to save the Euro; 22.9% Unemployment in Spain, but what are the real figures? Pension funding shortfall; Yes! There is a job opening; Mathematics.

The Hands of Time; Iran bans unofficial money traders; Greece spends on military; 6:38 clip David Rosenberg on possibility of US recession; China 2012 BearBull; US Mtge. REITs Too risky? Chart further down; Snooze Lose and Basel III; The 2012 Surprise; What is a safe asset? Is China Re-balancing? John Williams Watch this space; Consumer Deleveraging is over; Bond Fund Managers take a knee in 2012.
Chopping Block Putin is there, as DC doesn’t want him, and China is getting ticked off with DC; Speed Freaks Going up and Going Down in seconds; 2:20 clip Mitt Romney — does he care about jobs? No; Freedom is an endangered species, and Collecting Rainwater now illegal in several states; Pineapple Enzyme kills cancer; 5:56 clip New Cdn. film, starring Bill Van der Zalm against Smart Meters; Anonymous hacks into NATO and US data; American Revolution #2 It will arrive when it’s good and ready; Pilots Two pilots blacked out on takeoff. Not a great confidence booster.

Zbigniew Brezezinski “With the decline of America’s global preeminence, weaker countries will be more susceptible to the assertive influence of major regional powers.”; 1:35 clip CNN admits they are worried by Ron Paul (good); Obummer okays ‘net id for Americans (Marx is laughing in his grave); Irritants Yes, the GW cultists are mildly bonkers; Apple Not good PR.

#68 the Phantom on 01.10.12 at 1:56 am

At the risk of inciting further infantile behaviour I DO have to begin by saying…

#1 Trailer Park Boys…Gotta love it! It is so laughable that select people derive such joy from timing their posts to be at the front of all the other posts (I think I was able to state my point without employing that word that raises the hackles of so many others!!!)

Garth, Bloggers and Lurkers:

Mildly interesting that those who once scorned any notion that RE was destined for a correction are now sputtering a somewhat different tune. This makes me inclined to consign these individuals to the same heap as Suzanne Somers of the thighmaster fame! Oh the perils of becoming a has been!!!

Nite all
the Phantom

#69 Snowboid on 01.10.12 at 2:00 am

#12 Dorothy on 01.09.12 at 8:08 pm…

Or a gain is only a paper one, unless you sell…now!!!

#70 Snowboid on 01.10.12 at 2:01 am

#48 TheFirstRick on 01.09.12 at 11:15 pm…

What does US citizenship have anything to do with it – Beagle doesn’t say the entire year will be spent in the US, only that the home they sold in Victoria would buy four homes in Florida.

Have to agree with Beagle, but from an Arizona perspective – lots of sand, but not too many dolphins!

Apparently the word on US real estate is getting around, there are more and more ‘scary’ stories about buying down here. Like I said before, if you are clueless about buying real estate to begin with – doesn’t matter if you buy in Canada or the US.

But anyone with their wits about them wouldn’t be buying in Canada anytime in the foreseeable future.

#71 arbroathscotland on 01.10.12 at 2:11 am

Just wait 59. Keep riding the wave. Hope you have good lungs so you can swim for long periods under water.

#72 Kilby on 01.10.12 at 2:19 am

#22 Jaymel.

Victoria in the last 31 days has seen 245 sales complete, there are currently 1,263 active residential listings. Victoria, Saanich, Oak Bay and Langford all included, not many sales but far more than your 3…… pretty silly claim

#73 betamax on 01.10.12 at 3:06 am

#59 Morry: “we bought 8 months ago….Our costs are BELOW what we paid in rent. AND our property is up. 20% up!”

30% annualized appreciation w/ emergency low rates.

Yah, that’ll last forever: astronomical gains with cheap credit, the hallmark of every bubble in history. Thanks for reaffirming that this one’s due to pop.

#74 604x on 01.10.12 at 3:06 am

Either the data entry clerk at the Vancouver Real Estate Board has been tokin’ the left-overs of the office New Year’s party, or Vancouverites are scrambling for the ownership exit hatch:

Monday, Jan. 9th stats:

New Listings 376
Price Changes 56
Sold Listings 43

Vancouver Westside data is bizarre:

New Listings 96
Price Changes 10
Sold Listings 5


Vive la revolution!

#75 Seller on 01.10.12 at 3:21 am

@short it

You want to know how to short this sucker, here are my best ideas:

#1 There is a publicly listed company called Genworth Mortgage Insurance Canada (MIC.TO). It competes against CMHC and keeps all the risk on book. Even in the event of a mere 10 percent national correction, this stock is going to zero (it has written 260 Billion of high loan-to-value mortgage insurance against only 2.6 Billion of equity. Although its bank customers are able to tap into a gov’t guarantee, that only happens after the common stock holders are wiped out.

#2. Home Capital Group (HCG.TO) is Canada’s largest true sub-prime lender. Run by a lawyer who doesn’t understand credit risk IMHO. All the risk is held on book and very little is insured. As ano added risk, it relies on retail GIC’s for funding. This may take a little longer than MIC, but its fair value is a very round number.

#3 Canadian Western Bank. Somebody has been gaining market share is British Columbia condo development financing and my guess is CWB is amongst the least careful. Also, a better go-to-zero candidate than the big banks because at 2.5 billion market cap, I doubt the feds will think it is too big to fail. Longer timeline here than MIC or HCG, I’d guess, but same trajectory.

#76 betamax on 01.10.12 at 3:23 am

#19 Beagle: “I spent the day on a beautiful white sand beach watching dolphins play. Alot of people in BC are delusional.”

So were the people of Florida, but they learned differently, as will we.

#48 TheFirstDick — thanks for the irrelevant response from the realtor handbook.

#77 jimmy on 01.10.12 at 3:26 am

It’s too bad the media has become nothing more than courtiers spinning and gossiping the words and activities of the people in entertainment, business and politics.

Luckily for me I’m a sadist and in the future I’m gonna love watching humanity suffer.

PS- I bet my bunker is cooler than yours ;)

#78 a prairie dawg on 01.10.12 at 6:49 am

#58 bob’s my uncle

The only viable option? Really…

Too funny. Take a 3 month course in Sales, and suddenly you’re an investment counselor…

You Realtards© should put down the German car brochures and pick up a book once in awhile.

Obviously, you don’t know your Assets from a hole in the ground.

#79 Young Old Fart on 01.10.12 at 7:18 am

“….So, a decline of even 10% will do to Canada……”

Wait….what? Now it is only 10% decline?

Man….people are gonna be pissed at you now! ;)

#80 Keeping the Faith on 01.10.12 at 7:31 am

#59 Morry
Come back in 12 months … we will have the crying towels dry and waiting for you.

#81 Brian on 01.10.12 at 7:43 am

Hi Garth,

Thanks for your many insights & observations. Your blog is informative, interesting and helpful. If you are looking for topics for future posts, please consider more on the broader economy, beyond just real estate (small business prospects, employment, economic policy, trade, globalization, energy, sovereign debt, etc. etc.). There are very few Canadian voices out there who can/will tell it like it is. Many thanks.

#82 GTA Girl on 01.10.12 at 8:03 am

You mentioned the condo cranes in Toronto and Montreal that defy gravity of economic indicators.

It’s been my argument that some/now much of the pre-build condo sales have never been tested the open market. And that sales are within clusters of investors/ developer organized groups. Some have alleged a type of ponzi, or shell game with money.

This explains the dollar per square foot increase in a short period, whereas re-sales of quality older condos cannot break $550./sqft (some being far lower). Yet spec condos being sold for now $1,000 sq.ft.

Something in this defied gravity smells rancid.

It may be worse for condo markets as a whole in Toronto. Ponzi schemes, shell games don’t last, and the majority get screwed.

#83 Crazy on 01.10.12 at 8:07 am

Real Estate in Canada will never “crash”. The renters on here who are able to buy are wasting their money. The TSX declined 12% last year.

A brick is a brick. A sheet of drywal is ~$10 and rising. Live with it

#84 Beagle on 01.10.12 at 8:51 am

#48 TheFirstRick

I have no plans to become a US citizen. Sure is a beautiful country though.

#85 maxx on 01.10.12 at 9:28 am

Spot on, Garth. Fundamentals are terrible, have been for years and are showing no signs of improvement.
My conversations with business owners show that, not only are they chronically pessimistic because sales are way down (some as much as 35-40%) but their suppliers are also in the same boat. Robust is not a term I would use to describe the economic landscape.
We dumped all RE in late 2008 and have no intention of jumping back in until RE prices drop drastically and lunatic “creative” mortgage financing ends. There are so many other, far superior places to invest one’s hard-earned money. Residential RE is simply a commodity, and increasingly no longer the income/profit-producer it once was.
Year over year, I am amazed that people swallow municipal tax increases that defy inflation, often by a wide margin. In the years that follow, they get a nice fat tax increase on the aggregate.
Cost acceleration is now obscene and the damage to future wealth accumulation is huge.

#86 House on 01.10.12 at 9:30 am

What I can’t figure out is why these smart(?) economists and demographers knowing that boomers are 32% of the population and that 70% of them have no retirement savings, that is about 25% of the population who will have no purchasing power or borrowing power in the next ten to twenty years. Creating never ending debt for the rest seems to be compounding the problem not helping.

#87 Rental monkey on 01.10.12 at 9:34 am

@ phantom:

I take offense to you calling Suzanne Somers a ‘has been’ . Have you seen what she has been up to lately? In addition to amazing chemical free alternatives for skin care, vitamins and general lifestyle, she has done some very interesting research on chemo/radiation free treatments for cancer. She RE-GREW her diseased breast using stem cells.

Oh,and she is a well published author, with a very interesting eating plan, that when followed heeds amazing results. Oh and I think she still sells jewellry and clothes on the shopping channel.

Have you seen a pic of her lately? For 65 years old, i would say that thigh master served her well.
Peace. We can all hope to be as healthy and wonderful as her at her age.

#88 Mike Rotch on 01.10.12 at 9:35 am

Beagle et al., Re: Florida.

I was recently there……few days visiting my favourite mouse followed by some time on the beach near St. Petes.

It’s truly astonishing what you can purchase for the same price as a North Toronto teardown.

That said, you’re still nuts if you do. Two-week rental contract projected over the year would have been about the same as the mortgage payments on the ask price for similar unit on the same stretch of beach…….

and if you rent, you only have to pay for it for the part of the year while you’re using it. You also don’t have taxes, maintenance, Federales asking for your papers if they happen to spot you daring to wash your own windows……

If you think it’s going to be an investment property – well, there’s lots of those, and they cost less to rent than a night at a decent hotel……I sure wouldn’t become a distant landlord on those terms!

#89 sid on 01.10.12 at 9:36 am

I predict that when this crash becomes mainstream, you will be viewed as a genius and your popularity will soar. Perhaps a good time to think about getting back into politics. I hear the Liberals need some leadership

I’d rather eat bugs. — Garth

#90 Brad on 01.10.12 at 9:39 am

Big deal, so what if the housing market drops 10%, we all know that with massive immigration the house markets will POP-UP the next year by MORE THAN 10%, totally erasing any of the previous year’s losses. RIGHT?

(a) There is no increase in immigration. (b) A minority of newcomers are home buyers. — Garth

#91 TurnerNation on 01.10.12 at 9:45 am

#57connie on 01.10.12 at 12:07 am

On Kijiji Toronto apartments for rent, run searches for: Brand New, and Never Lived In.

I got 1260 results for the first one, and 217 for the latter today.

#92 45north on 01.10.12 at 10:30 am

Mike Rotch: Federales asking for your papers if they happen to spot you washing your own windows

pretty funny

#93 Peter (NYC) on 01.10.12 at 10:31 am

#78 Seller,

Thank you for your very informative post. One warning for those who would short. Back in the end of 2005 I put on a very large short position here in the US on sub prime lenders, auto lenders, Fannie Mae, all the home builders and a few other select companies whose charts had gone parabolic b/c of the housing boom in the US. My trades were all correct – but my timing was off by 6 months and I used too much margin. I really got crushed on the trade and had to unwind my positions. I ended up losing $140,000 in total for trying to short the housing market in the US. I was so freaked out that I couldn’t even stand to keep some of that position on. No mind you had I put on the position 6 months later I would have made enough money to not have to work again. Shorting is very extremely dangerous so be very careful and only do it with money you can lose and for a small overall position.

#94 gladiator on 01.10.12 at 10:33 am

It will not be US-style. It will be Ireland-style: RE prices in Dublin are 65% down from their peak.

#95 Stevenson on 01.10.12 at 10:33 am

How to stop Canadian real estate from dropping? The same way they could save US real estate. It’s called immigration. If US opened the flood gates and provide easier immigration they would solve their housing issue easily, but they choose not to do so. There is still a huge line up wealthy people dying to get into Canada from overseas.

Also as boomers grow up and retire they sell their houses. Will there be no buyers? Where are they going to move to after they sell?

#96 Peter (NYC) on 01.10.12 at 10:37 am

Thanks again #78 Seller – these charts scare the crap out of me!

#97 Gotthardbahn on 01.10.12 at 10:38 am

December Housing Starts came out this AM north of +200K, well above the consensus of +185K. Those awful November numbers you mentioned were revised higher, too, from +181 to +185.6 starts. So where’s this correction you’re always going on about? Just asking.

If you think condo over-building is good news, think again. — Garth

#98 disciple on 01.10.12 at 10:44 am

Garth, “real estate industrial complex”… LOL, you are THE BEST… did you already patent that one or can I use it in conversation without a reference credit?

#58 bob’s my uncle… nice link. We need to get Garth back in Ottawa so that his TFSA idea will continue its run. They’re trying to kill the Internet now, so this digital democracy thing should be used expediently.

#99 eaglebay - Parksville on 01.10.12 at 10:53 am

#87 Beagle on 01.10.12 at 8:51 am
#48 TheFirstRick
“I have no plans to become a US citizen. Sure is a beautiful country though.”

So is Mexico, exept it’s full of Mexicans.

#100 disciple on 01.10.12 at 10:55 am

What’s the real story in Syria and Nigeria? I will tell you. Oil use is in decline overall, especially as the emerging markets are finding that they do not need to base their economies on crude. They are struggling against the Anglo-British actions to shove oil down their throats and like it. They won’t even need it pretty soon, and even if they did, I’m certain that they won’t need to source it through BP or Dutch Shell. All of the nonsense media reports you will see in the coming months is meant to do one thing: convince you that Peak Oil is the problem and the reason why it is necessary to kill brown people. But the real truth is that the price of the bubbly is being manipulated on a grand scale. Lithium is the new oil, and don’t let anyone convince you otherwise.

Same thing with Natural Gas. The only remaining profitable market for North American gas is the emerging markets, but even that is limited as they can easily get it from Russia or Turkey or some such other NON-north american source. Get it? The price has been manipulated for so long that finally the charade is up. The media pundits on BNN and CNN will continue to tell you that the pipelines and oil and gas sector will continue to pay dividends, and they will be right for a year or two, but after that, I advise you get the hell out as fast as humanly possible. Ditto for gold, it’s in a huge bubble. When the gold bond funds are telling you that gold will go up from 1600 an ounce, you should be well advised to retain the opposite counsel.

#101 Daisy Mae on 01.10.12 at 11:13 am

Well, don’t expect an apology from the media, CREA, RE pumpers, or posters…no one has the decency or the guts.

#102 Aussie Roy on 01.10.12 at 11:20 am

Aussie Update

Now where have I heard this before?

House prices haven’t increased because of increased demand from migrants outstripping dwelling construction — rather, prices have risen because bank lending has created false demand. Supply factors have played little, if any role in the recent house price growth. As soon as bank lending is restricted (and this is happening already), it is likely the illusion of a supply shortage will disappear. Just like what happened in Japan in the 1990s, or California and Ireland after the recent financial crises.

National capital city prices are down 6% YOY. But this RE spruiker writes, “You only have to open any newspaper or turn on the radio to know that many parts of Australia are experiencing a property boom, with the price of many properties increasing significantly above their long term trends”.

Nice see the spin in all its glory.

How about those bullet proof Aussie banks.

THE nation’s biggest banks plan to slash thousands of jobs across the country as they attempt to consolidate their record profits.

Westpac, the Commonwealth Bank and ANZ have all drawn up plans to cut expenses as funding costs soar and mortgage growth rates slow

#103 poco on 01.10.12 at 11:25 am

#82Young Old Fart on 01.10.12 at 7:18 am
“….So, a decline of even 10% will do to Canada……”
Wait….what? Now it is only 10% decline?
Man….people are gonna be pissed at you now! ;)

can you not comprehend what was written in the post—it doesn’t say it will only be 10%—read and think it out

#104 Bobby on 01.10.12 at 11:40 am

Enjoyed your talk on CFAX yesterday here in Victoria, Garth. Much like yourself, I was surprised the Head of VREB wasn’t calling in, disputing your comments.
Many of the homes I have looked at are now off the market with many sitting empty. In my area there are For Sale signs everywhere, many with Reduced or New Price.
It is obvious, the market has changed.

#105 Van guy blazin kush on 01.10.12 at 12:00 pm

If you think condo over-building is good news, think again. — Garth

Of course it’s good news. Just not for speckers and flippers. It’s very good news for you Mr Turner.

#106 disciple on 01.10.12 at 12:28 pm

Of course, that’s not to say that gold would not spike up to $3000 due to fear in the media, or childish military stunts by either or all sides, but rest assured, it will eventually come crashing down, and it’s better to be one year early, than one minute too late.

And now for something completely different: mind control…”The Christian church is an encyclopedia of prehistoric cults” – Fredrick Nietzsche

The Tarot is the actual “Book of Life,” one written not with words but images. The suppression of symbolic tropes as used by the ancient adepts served to assist the elite members of the Solar Cults in their campaign for world control. From the advent of Judeo-Christianity, humanity began to lose contact with Nature and reality. This is an inevitable consequence of the psychic falling off. In other words, when communion with the deeper hemispheres of consciousness is occluded, man becomes less of a Self. He becomes less of an individual. And the less individual a man is, the more of a conformist he becomes socially. The more conformist he becomes, the more he demands others to conform. In order to force others to conform violence must be used. And so the vicious cycle begins. The psychically mutilated man becomes shallow, narcissistic, obedient, oppressive, and violent. Such a man uses words and symbols as means to and end, that end being the control of human thought and behavior. The Bible and other religious tomes have been used for just this purpose. And then you get the final product – all those people who actually read thus far this post and are angry that I wrote it… How do you like me now?

#107 Form Man on 01.10.12 at 12:35 pm

#103 eaglebay

good of you to be up front about your racism. what other intolerances do you harbour ?

#108 Arrow to the Knee on 01.10.12 at 12:44 pm

I used to think the HAM would never end…then I took an arrow to the knee.

Are you twelve? — Garth

#109 disciple on 01.10.12 at 12:45 pm

Written phonetic languages are a relatively recent development. Our earlier heritage as a human race is that of the more exact communication via pure symbols.

Where there are words there are images. One cannot be separated from the other. When, for example, a passage of the Bible is read out loud, it conjures images in our minds. This is because the mind thinks magically, that is, imagically. The greatest words, those written by the poets, are “great” because of their capacity to convey images. We are not, therefore, moved by words as much as we are moved by images that spoken words give rise to. And the images that move us are conjured within our own consciousness. Words are merely carriers of images. Sadly, as experience shows, they are more often than not imperfect carriers. Moreover, words are of the left-brain. When we speak to someone, they are not hearing us with the whole of their mind. And when someone speaks to us, our defenses are up. We too only hear the speaker with one small part of our brain. This is why we tend to be more receptive and attentive to those we know and care for and skeptical and inattentive to those we do not know or care for.

#110 Mister Obvious on 01.10.12 at 12:51 pm

From today’s G&M:

“When you look at markets like Vancouver and Toronto, there is a level of caution from a risk perspective that is higher today than it would have been a few years ago,”

– RBC chief executive officer Gordon Nixon

Well… I’ll be damned if Gordon didn’t almost come right out and say something there.

#111 The Thing in the Basement on 01.10.12 at 12:51 pm

112 Form Man – I won’t tolerate being murdered in Mexico. I just won’t stand for it.

#112 Junius on 01.10.12 at 12:53 pm

#106 Aussie Roy,

Excellent post and articles. The similarities between Australia and Canada are just so interesting to watch. In particular, the twists and turns of the RE Industry including out right lying in order to prop up a deflating bubble.

I appreciate it.

#113 morry on 01.10.12 at 12:58 pm

what a bunch of inane comments to my posts!

My son paid over 25% down. His payments are low low low. His townhouse in Coquitlam is up over 20% from his purchase in Jan 2011 and climbing! Evergreen line is now due to arrive mins away. We have calculated future payments for 5% and 7% rates. NO PROBLEM! His mortgage is amortized over 25yrs. making bi monthly payments and is budgeting for an additional 5K additional mortgage top-up on annual basis.

Building equity he is!

#114 The Thing in the Basement on 01.10.12 at 12:59 pm

63 Unistar/74scotland/ 76 betamax/ 83 KTF

From 59 Morry:

“our down payment was over 20%. Our costs are BELOW
what we paid in rent.”

What’s not to like about this? Isnt this what we’ve been looking (and waiting) for?

Morry – could you please break down the numbers for us and tell us where you are generally located? Windsor
maybe? Maritimes?

#115 disciple on 01.10.12 at 1:01 pm

Speaking of addicts and addictions…Last post for today, I promise. I just have this feeling somebody out there needs to read this (I live on pure emotion sometimes)… the revolution starts here.

The thought of symbolically illiterate men is confined to the frontal lobes and “left hemisphere” of the brain. It is thought that is cut off from the Living Oracle. As a result of his psychic state, the symbolically illiterate man is less able to resist the propaganda of the hidden dictators who control the world. He is vulnerable and perpetually victimized by his overlords who manipulate his beliefs and allegiances. As time goes by, the psychically infirm man becomes completely reliant on his masters. He will do and think whatever keeps him in rapport with them. If maintaining the status quo means the complete loss of individuality, it is a sacrifice most men will eventually make. As we can see when we examine the state of decay in the world today, man has just enough freedom to imprison himself, just enough will to enslave himself, and just enough understanding to remain ignorant.

The force man refers to as “god” exists within consciousness. That force can be likened to a great river upon which the fragile boat of consciousness floats. The great river has its own mysterious and unknowable flow and course. It has its own enigmatic voice, and it speaks to each of man in a unique manner. The voice man thinks he hears and which he has long taken for a guide is merely the voice of his own ego, not that of the great river. Modern man’s failure to attune to the true inner voice ensures that he lives inauthentically. He endures a life full of competitiveness, envy, guilt, sorrow, loss, and waste. Clinging to the socially-vetted roles and to the plethora of ready-made escapes from the roles, modern man falls victim of what Alexis de Tocqueville referred to as the “tyranny of the masses.” Image-starved, he seeks to alleviate his systemic impoverishment in a compulsive manner, via addiction to television, video games, sports, pornography, advertisements, drugs, and all manner of virtual realities. However, these bromides and panaceas provide only temporary relief. They cannot spiritually empower and lead to wisdom.

At the entrance to the Oracle of Delphi was the inscription, “Know Thy Self”.

#116 The Thing in the Basement on 01.10.12 at 1:02 pm

19 Beagle (and others) – before we all run to Florida and
buy multiple houses, can you tell us what the property taxes are like? My very limited understanding is that Florida has high property tax, but low income tax, whereas Arizona is the opposite.

#117 morry on 01.10.12 at 1:05 pm

There is no major bubble that will pop in the greater vancouver area, except for some areas such as richmond and west side YVR where houses have high valuations. The other areas are fine. But IF and WHEN there is a bubble correction it will be in the range of 15-20%. My sons are sitting pretty with where and what price they purchased. Nothing like having roof over your head that you own! Nothing!

Don’t be such a morse bunch of moaners.

#118 Gran Pabroon on 01.10.12 at 1:09 pm


Your post from two days ago “In the End” was a nice reiteration of the major factors pushing against Canadian real estate.

I think these types of posts are needed from time to time, especially for the newer blog-dogs to this site.

There have been times when I would like to look back and find one of your better posts from months ago to show the MIL, but cannot seem to locate it.

With that being said, I have an idea for the site and think it would help a lot with finding the better posts.

I think that you should implement a rating scale at the bottom of each post each night. Perhaps out of ten. That way each of us can give your nightly post a score (eg: 7.5 or 8.0 or 9.5). The scores would obviously be averaged from all the readers, and the better posts would then have a better score.

You could then have a sidebar on the website which lists the top rated posts, so that we can find them with ease.

You can thank me for the website advice with a signed copy of your new book.

Gran Pabroon

No book. This is no popularity contest. Read what I write. There’s a test later. — Garth

#119 HSC on 01.10.12 at 1:10 pm

@ #9 Canadian Watchdog
“In a 2008 report, CMHC called Ontario to have 65,000 housing starts by the end of 2012. If that number comes in accurate or close to it, I wonder how CMHC is predicting the market with such accuracy.”

Well, the numbers are in and Ontario housing starts for the year were 65,240 (reference the report available for download on CMHC’s website). That’s remarkably close to the CMHC’s estimate. But of course, this is the 2011 figure. The CMHC prediction you cited was 65,000 housing starts in Ontario, “by 2012”. The CMHC’s wording in that statement is a bit vague. Was it intended to mean ‘by the arrival of 2012’ (ie: the year-end figures for 2011), or was it refering to the end of 2012? I’m not sure.

#120 Timing is Everything on 01.10.12 at 1:27 pm

#73 Snowboid – “but from an Arizona perspective – lots of sand, but not too many dolphins!”

Mesa/Chandler/Gilbert AZ are listed in the ‘America’s top 10 Most Boring Cities’ (
Maybe it’s all the sand and no shorelines?

I don’t read Forbes much though…Too boring.

#121 Form Man on 01.10.12 at 1:28 pm

Devil’s Advocate

I did some research this morning on the OMREB ( Okanagan Mainline Real Estate Board ) site.

stats for the central Okanagan December 2011:

total listings = 3856
total sales = 183 ( giving us 21.07 months of inventory)
new listings = 461
average price year to date = down 4.43 %

total units sold by year :

2011 = 3633
2010 = 3643
2009 = 3927
2008 = 3773
2007 = 6196
2006 = 5459
2005 = 6070
2004 = 5153
2003 = 5064
2002 = 4909
2001 = 3681

total units sold for 2011 are lower than they have been for at least 10 years……even with population growth…….21 months inventory means declining prices for a while yet ( until we reach approximately 6 months inventory ). OMREB tries to cast the recent numbers in a favourable light, but when compared to history, the numbers are abysmal. The average selling price drop is understated and obviously skewed by the fact that volume has dropped by half, but I will let others sort that one out.
Had a buyer in our sales office on the weekend. His home was assessed in 2010 for $649,000. He sold it last week for $450,000…….yikes !

#122 T.O. Bubble Boy on 01.10.12 at 1:30 pm

Here’s the reality of housing life in Toronto (since I haven’t read the Toronto Life pieces, I can’t comment on how “real” they may be):

73 Snowdon Ave.,
Typical 3-bdrm house in Lawrence Park.
Went on the market today for $869,900

$870k you say? That’s way cheaper than the multi-million dollar homes I read about in Lawrence Park!

But here’s the thing — last listing was in March 2007 (almost 5 years ago) for $599k.

So, 5 years, $270k increase (+45%, or about a 7.8% gain per year).

This is reality — houses have gone up an above-average amount (like the 7.8% per annum example here) for a very long time, and these increases are substantially higher than income gains or other factors that would drive house prices.

So – the gains are “under the radar” enough that the so-called experts can claim there isn’t enough of a spike for this to be a bubble, but when you have above-average gains for probably 10-15 years in many places, the end result is a spike that is just a big as a bubbly 20%+ per year run-up in a couple of years like Florida/Arizona/etc. would have seen.

So, all Canada has done is spread our gains out over a much longer timeline… this doesn’t change the end result: house prices that cannot be justified using any standard valuation, and a high likelihood that buyers in 2012 will lose money on their homes.

#123 Kilby on 01.10.12 at 1:35 pm

#118 Morry:

Sounds like it must have been you that recommended the purchase by your son last year, if he is up 20% and has buyers he should sell now. Real anomaly for your area.

#124 new_era on 01.10.12 at 1:51 pm

You can tell how the economy is going by

1. Yesterday I looked at changing my kids gynmastic and swimming lesson schedule. For the first time ever, I’ve seen empty 8 spots open for gynamstics and 2 spots open for swimming, a week after the session started.

Usually these spots gets allocated within the first 4 hours of opening registration.

2. Went to Home depot two times this week and seen the same thing, the place was dead empty, mabey 6 or 7 customers in the huge building.

Look for your self, people are spending less eventually meaning more job losses and shops closing down.
for my kid. This is the first

#125 Chris on 01.10.12 at 2:08 pm

I’m a young adult from Saskatoon. Great job that pays above average, and have more than 20% down for a home (At these crazy high prices), but do you know what that gets me? A $300k, 1000sq ft house that needs either major repairs or major renovations, and a roommate or renter in the basement and even then I could barely afford the place. NO THANKS!!!

Prices have slowly been coming down since 1 year ago. Lots of reductions, and tons of under-bids, and I see it continueing which is great. An average house here should cost no more than $150-$180k and if any of you pay any more than that, you’re on crack. Things are slowly coming back down to earth, which is great. I will continue to sit on the sidelines and rent until houses become affordable to the point where I can buy one without requiring a roommate and where the purchase of it is not going to make me house poor like 100% of my peers.

#126 Bill Gable on 01.10.12 at 2:30 pm

Very interesting anecdote from a sales type for one of Vancouver’s top Radio Stations. At breakfast today, he looked awful. I found out why. He is having trouble selling advertising, big trouble. No sale, no commish. ” I have been in media sales for 21 years, and I have never seen anything like this – people are scared, after a terrible Christmas, and those I did sell to, aren’t paying and we are having to think about Collection agency help.”

That is a clear sign to me, that the deleveraging might be a real catastrophe in the making.

#127 Beagle on 01.10.12 at 2:31 pm

#121 The Thing in the Basement

I never said I was looking to buy or rent in Florida. I’m actually travelling in a RV. Been to 20 states and 6 provinces in the last 6 mos. Really opens your eyes to see places first hand. Many are as nice as Victoria is and way cheaper for housing. Also I find most Americans to be really really nice.

#128 Canadian Watchdog on 01.10.12 at 2:32 pm

#124 HSC

They would be referring to 2011 year end figures which stand at 65,240 for Ontario (preliminary), but it’s close enough. They predicated that figure nearly 3 years ago which is a pretty remarkable (but suspicious) call for a free housing market. I think CMHC (being a hybrid government agency) has a more influence on building permits then one expects.

#129 hollywood3000 on 01.10.12 at 2:35 pm

I believe Canada is over built with houses and supply exceeds demand. In the forest industry when it was at its peak in 2005 mills were humming all across Canada. For instance there were at least 30 Oriented Strand Board Mills in production used in particle board McMansions and now there are about 7 running currently. The oversupply of houses in Canada, lack of good quality stable jobs, employment issues(presently hard to find a job by many), destability in the economy and most importantly high prices for houses will be major headwinds in real estate for 2012. The only direction for homes will be down. This will be good for the economy going forward as this needs to come down for affordibillity for people buying homes. In my opinion on why the USA will continue to gain ground on Canada on economic growth and jobs. It does not make sense why houses are selling in the USA for half what we pay and we have more land available.

#130 Seller on 01.10.12 at 2:40 pm

@ #97 Peter

Good advice. For those of you with net worth below $1 million (not including RE equity), you will find that MIC and CWB are both option eligible. I think spending $10,000 on 50 MIC July $22 puts; or spending the same amount on 50 CWB July $26 puts will turn out to be a far better investment than putting the same amount down on a condo to be built on the Toronto Harbour in 2014.

#131 Ben on 01.10.12 at 2:45 pm

Overbuilt condo markets in Vancouver and Toronto at risk, says RBC president
Tue, 10 Jan, 2012, 1:41 PM EST

#132 poco on 01.10.12 at 2:47 pm

#118 morry on 01.10.12 at 12:58 pm
what a bunch of inane comments to my posts!
My son paid over 25% down. His payments are low low low. His townhouse in Coquitlam is up over 20% from his purchase in Jan 2011 and climbing!

percentages can be very deceiving—is it 25% on a 200K TH (there are some foreclosures that low)–but not very nice places) or 25% on a 400k to 500k property
Coquitlam is a pretty big place with very different price ranges–look along North Rd compared to say lower Westwood plateau–huge price difference

narrow this location down a bit so we can make a better decision whether this is all bs or in fact might be true–20% increase since Jan is kind of hard to believe

for those that don’t know -here’s the route for the Evergreen line
The Evergreen Line will run north from Lougheed Town Centre on an elevated track along North and Clarke Roads, before entering a tunnel in the vicinity of Como Lake Avenue and emerging near Barnet Highway north of Clarke Road in Port Moody. Through Port Moody, the route will travel at-grade on the south side of the Canadian Pacific (CP) Rail lines before transitioning to the north side near the Port Moody/Coquitlam boundary. The Evergreen Line will continue next to the CP Rail lines to the West Coast Express Station in Coquitlam and will then run on an elevated track along Pinetree Way, ending near Douglas College in Coquitlam.

#133 Linda on 01.10.12 at 2:47 pm

Suzanne Somers also claimed on American TV a few years back to not have farted in about 5 years due to her new diet based on food combining. Does someone like that sound credible?

#134 eaglebay - Parksville on 01.10.12 at 2:58 pm

#112 Form Man on 01.10.12 at 12:35 pm
“good of you to be up front about your racism. what other intolerances do you harbour ?”

Tell me I lied.
My other intolerances are phony politically correct people.

#135 Victor on 01.10.12 at 2:58 pm

Overbuilt condo markets in Vancouver and Toronto at risk, says RBC president

The Canadian Press | January 10, 2012

TORONTO – The head of Canada’s largest bank says the housing market, especially in Vancouver and Toronto, could be at risk in 2012.

Gordon Nixon, president and CEO at Royal Bank (TSX:RY.TO – News) told a banking conference that the Canadian housing market could be headed for a slowdown.

He says the overbuilt condo markets in Vancouver and Toronto, where home prices are sky high, are especially vulnerable.

#136 a prairie dawg on 01.10.12 at 3:00 pm

#95 bob’s my uncle

Well since you asked so nicely…

The fact is though, most people won’t do as I suggest anyway. It requires too much effort. And most people don’t like effort.

15 years ago I decided to take my finances into my own hands. I started by reading everything I could get my hands on relating to finance, investing, etc. (business magazines, books, internet searches)
I would typically spend an hour or two every day reading, and I still do, 15 years later. At some point it turned from an obsession into a hobby. But it has paid me back tenfold in returns. Time well spent.

This approach however is not for everyone. Most folks just don’t have that kind of commitment.

Your results may vary…

As for the TFSA, I’m a little puzzled at how they arrived at their numbers. Are they basing this on lost revenue at some future date when it is withdrawn, and comparing it to what would be taxable income if it was withdrawn from an equal sized RSP account? If so, that’s a lame comparison. It ASSUMES people would have put this money in an RSP otherwise. They need to show their math first. Then I might buy it.

And for the record, F and C are not my friends either.

#137 Morry on 01.10.12 at 3:05 pm

@kilby yes i did. And I have been saying this on this wretched blog for quite sometime now. We have done our homework. This is not the time to sell… why would he?

@The Thing in the Basement
Coquitlam BC. 320K 120k dwn, (2bedroom TwnHome) now worth 345K. I Expect the increase will be mild from now on – until Evergreen Sky-Train line gets built. After that another spike in price for sure. Right now he enjoys a great home for less than what he was paying in a basement suite, albeit his commute is up by 45mins. BUT so what..equity is building. Of this there is no doubt, no matter what read here from naysayers who hope to see blood just because they wish it so. Look around you the world over. PEOPLE want to come here! It ain’t going to stop!

My advice as garth as also advised; buy at a good fair price, at what you can afford, with at least 10% down payment and don’t sweat the rest.

#138 spaceman on 01.10.12 at 3:06 pm

“I am starting to have doubts that RRSP’s are all they are cracked up to be.”

RRSP’s are for poor people, rather poor people that are paying tax in the 40% category. If you will have an income from retirement, including your RRSP money, that is within the 40% tax category, then you will wind up paying too much tax on that money, and think of this, if your RRSP doubles in 10 years, (you do the math) and you pay 40% tax (on the gain’s not principal) you are losing a lot of money. A TFSA might be better for you. TFSA’s are great for the rich, they are pumping into them as fast as they can, because they know the strategy of tax avoidance, is paramount to building an investment portfolio. As always, get a good financial advisor, who deals with tax avoidance as well.

A couple of Assets that can grow and not be taxed.

1. Principle Residence
3. Life Insurance payout (you have to be dead)

I have 2 and 3, and will have 1 when the correction is in full swing, (I am putting in offers starting next month if there is something I like)

#139 jess on 01.10.12 at 3:17 pm

.#90 Rental monkey
..”well published author” ? She is a marketing machine!
I suggest you read the info below and read how one attacks her “information”

60 Minutes Stem Cell Fraud
AFP: US scientists warn of fraud of stem cell
US scientists warn of fraud of stem cell ‘banks’. (AFP) – Feb 20, 2010. SAN DIEGO, California — Clinics that offer to “bank” stem cells from the umbilical cords of

if it quacks ….

#140 Kris on 01.10.12 at 3:36 pm

I’d like a RE correction too, but it’s dicey to use Van stats as evidence of a nationwide correction.

In my nook, Oakville/Burlington, west of Toronto, there are no FOR SALE signs glutting the streets. Even last week, a property on my street listed/sold in 2 days. I’ve been watching for an affordable SFH for 2yrs now – There is no buyers market here.. not even a slowdown.. not yet.

RE is local – Who knows if/when Toronto’s burbs will mellow? We may spend 3-5 yrs waiting on the sidelines, and finally get a 500K SFH for 75k cheaper.. But we’ve spent 75k on rent meanwhile.

#141 Alberta Ed on 01.10.12 at 3:37 pm

Today’s Canmore banner: CONDO PRICES LOWEST SINCE 2002. Still not selling. For Sale signs springing up all over town. And they’re still overpriced.

#142 Form Man on 01.10.12 at 3:38 pm

#139 eaglebay

I don’t tolerate ‘phony’ ones either

#133 canadian watchdog

there you go again. you obviously do not understand how the building permit process works in Canada. CMHC has great influence over the mortgage market, and some influence over the building code. They have zero influence over the issuance of building permits

#143 lawboy on 01.10.12 at 3:43 pm

@127 TO Bubble Boy

Good analysis…less dramatic YOY price gains, but over a longer period of time, are equally dangerous although more subtle.

#144 lawboy on 01.10.12 at 3:49 pm

@ morry 142:

morry, he is only “building equity” so long as the property maintains its value. Otherwise, all he is doing is paying down the mortgage.

Properties purchased at or near the top of the market are not likely to maintain their value over the coming years. If the property values dip below early 2011 levels, any equity built will be wiped out, and all he’ll have is the declining mortgage balance. Oops.

#145 Timing is Everything on 01.10.12 at 3:49 pm

#91 Mike Rotch

Agreed. We were just in Kauai. Rented a townhouse (2 levels/2br/2full baths/laundry etc.) at Poipu Beach. Worked out a deal directly with the owner, who lives in L.A.. Plenty of rental deals to be made in the US at the mo’.

#146 Snowboid on 01.10.12 at 3:51 pm

#125 Timing is Everything on 01.10.12 at 1:27 pm…

Don’t know much about the east valley, we are in the northwest valley and it’s a 45-50 mile drive via freeway down to Mesa, Chandler or Gilbert. Like I’ve said before – the ‘Valley of the Sun’ is a huge area.

Tempe does have a lake, if you can call it that. We are about a half-hour drive to Lake Pleasant with about 10,000 surface acres. Nice marina, but not really a beach as such.

Can’t say that I’ve felt bored anytime we are here, love the sports, concerts, events (especially related to cars), fine arts – if anything there is too much going on at one time!

#147 The Thing in the Basement on 01.10.12 at 3:58 pm

132 Beagle – OK. Can anybody else answer the question
re Property taxes in FLA vs AZ?

142 Morry – Thanks. Interest on a $200K mortgage plus
condo fees plus property tax is less than rent on a bsmt

143 Spaceman

“RRSP’s are for poor people, rather poor people that are
paying tax in the 40% category………TFSA’s are great for
the rich, they are pumping into them as fast as they can,
because they know the strategy of tax avoidance”

Sounds kinda backwards. RRSPs work better for high income earners who expect to be in a lower tax bracket when funds are withdrawn. Marginal rate is over 38% at $83K annual income and you max out the 18%/$22K contribution at over $120K/yr. Doesnt sound poor to me.

The TFSA contribution limit is a non-issue for the rich because it is so small comparitively. The one case that might work is risking it all hoping to get a 10 bagger or more. But if it fizzles you lose the contribution room. There was also a loophole for over-contributions that was

#148 zeeman1 on 01.10.12 at 3:58 pm

#17 Steve-0

RRSP’s are one of the biggest scams ever perpetrated on the middle class. Not only do you get raped on your withdrawals (yes, you’re made aware of this from the outset) but look how much value has been lost over the years on these managed funds that provide so much in commissions for the bankers.

RRSPs are not the problem. The assets people choose to put inside are. — Garth

#149 Junius on 01.10.12 at 4:01 pm

#131 Bill Gable,

The advertising numbers in the traditional media business are way down. There are a number of reasons that include a migration to digital and mobile. However the main reason remains the slower economy and the lack of consumer spending.

The fundamental problem is that marketers are concerned that even if they reach consumers there is less and less room for discretionary spending. Many campaigns are waiting for a green light now but a number of marketers expect their budgets to be slashed.

I had lunch with one ad exec over the holidays who expects that they will have a terrible year in 2012. When I was in Toronto in December I spoke to a few others who felt the same way about the start of the year. As with pretty much all people in advertising the glass was half full but you could sense a real worry.

#150 Two-thirds on 01.10.12 at 4:03 pm

A hot-off-the-press article on interest rates that I rate “interesting”:

“Bank of Canada seen on hold until 2013

By Claire Sibonney

TORONTO (Reuters) – A deteriorating European with slower growth and the longer we go without economy and weak global growth will keep the Bank of Canada from raising rates for at least another year, though an interest rate cut looks highly unlikely, according to a Reuters survey.

The Reuters poll of 41 economists and strategists released on Tuesday showed the median forecast for the next interest rate hike was pushed back by three months to the first quarter of 2013 from the fourth quarter of 2012 projected in a November poll. The Bank of Canada’s target for the overnight rate – its main policy rate – has been at 1 percent for more than a year.”

If C does not rise rates, F will have to do the dirty work – but will he?

I guess Bernanke is the one to follow, C plays second fiddle in this band.

#151 zeeman1 on 01.10.12 at 4:04 pm

#58 Bob’s My Uncle.

Really? I mean, really?

#152 Timing is Everything on 01.10.12 at 4:09 pm

I don’t how you do it, Garth….But your post conjured up Suzanne Somers and ‘Thigh Master’.?? Fetish site for sure.

#153 AACI Home-dog on 01.10.12 at 4:12 pm

REIT’s article of interest…

#154 Van guy blazin kush on 01.10.12 at 4:51 pm

#118 morry on 01.10.12 at 12:58 pm

Your son bought a townhome in January and now it’s worth 20% more? Why do u even bother with the bs. This blog ain’t supid. Prices are down in some parts of the Tri cities or flat. You and your son can continue to drink the Kool aid and watch that townhome devalue over the next few years.

Poco: your turn now to answer this guy.

#155 bigrider on 01.10.12 at 5:04 pm

20 minutes spent trying to find the article in Toronto Life magazine online and no luck.

Would really appreciate a link to it… anyone.


Boy are you cheap. — Garth

#156 Realtors in a PANIC on 01.10.12 at 5:19 pm

As you can see realtors posting on Garth blog because the RE market is Good? Right… Realtors continue to post on this blog in a PANIC since the RE bubble has started to crash all over Canada…mainly Vancouver and the GTA. Prices are down 7-10% in the past six months. This is how it started in 2008 . Only this time The government Can not and will not do anything. In fact Harper has his majority and will let the free markets be free of manipuolation. Realtors are in a panic cause they know the housing bubble is beyond a bubble and that their good life of easy work and big paydays are over……CRASH!

#157 Cato on 01.10.12 at 5:34 pm

A US-style correction is probably unlikely but thats not necessarily a good thing.

I think the long, slow melt that we are in for will probably be far more painful. The 2-5% yearly declines over period of 10-15 years will be an economic killer. In nominal terms it wouldn’t surprise me if we see a 35% decline.

We seem to be quickly shifting gears back towards a resource focused economy which is a big step back. There isn’t much trickle down effect in the resource sector, it doesn’t make for a healthy economy or society. The best thing for the country would have been a US-style correction, get the pain over with and get back to economic growth.

#158 Snowboid on 01.10.12 at 5:51 pm

#91 Mike Rotch on 01.10.12 at 9:35 am…

Don’t know much about Florida or Hawaii rentals, but in a good area of Phoenix the costs to rent are quite a bit higher (during the peak season Oct-Apr) vs the costs of purchasing – at least in the current market.

I guess that would explain the number of former Canadian renters that have purchased in the last couple of years… they also figured out the current advantage to buying.

Of course there are many other pros to renting, such as changing locations, etc – but if you made the decision to spend the winters in one area such as Phoenix the numbers don’t favour renting.

Especially when taxes, maintenance and other costs are so low.

#159 Westernman on 01.10.12 at 6:00 pm

Eaglebay- Parksville,
Something you should understand about Form Man, Eaglebay, this blutznutz is the CLASSIC bleeding heart liberal that really epitomizes the mental disorder popularly referred to as liberalism… I mean if he was being robbed at gunpoint he would feel sorry for the robber because he had a bad upbringing, didn’t get enough welfare checks to buy drugs etc. He can’t think logically, objectively or critically about anything – he’s a walking colostomy bag of of uncontrolled feminine emotions.
Good luck trying to reason with him.
By the way, Garth, congratulations on the success of your blog.

#160 poco on 01.10.12 at 6:09 pm

Van guy blazin kush—you’re hot today–was just scrolling down to do just that
____________________________________________#122 morry on 01.10.12 at 1:05 pm –you said—
There is no major bubble that will pop in the greater vancouver area, except for some areas such as richmond and west side YVR where houses have high valuations. The other areas are fine. But IF and WHEN there is a bubble correction it will be in the range of 15-20%.
Sorry Morry but you’re dead wrong on this statement –the tri cities has been falling (mostly condos) for over 2 years and as i said in the last post, TH have been going down consistantly since last spring and now the downward trend has hit the SFH market–i have lots of data if you like –we have our 10% to 15% down in parts of the tri cities already—how much further it drops is anyones guess but what i receive via e-mails from my “helpers” we’re in for it –get out while you can
#142Morry on 01.10.12 at 3:05 pm
@kilby yes i did. And I have been saying this on this wretched blog for quite sometime now. We have done our homework. This is not the time to sell… why would he?
Coquitlam BC. 320K 120k dwn, (2bedroom TwnHome) now worth 345K. I Expect the increase will be mild from now on – until Evergreen Sky-Train line gets built. After that another spike in price for sure. Right now he enjoys a great home for less than what he was paying in a basement suite, albeit his commute is up by 45mins. BUT so what..equity is building. Of this there is no doubt, no matter what read here from naysayers who hope to see blood just because they wish it so.
first off Morry –you need to do some math—up 20% on 320k does not = 345K
that’s great if it is but you may be in the only TH complex in the tri cities that has seen an increase in the past year—most have dropped or remained flat–lots of foreclosures too
looking at you increase to 345K you should do the math on how much of your downpayment might be lost if you had to get out–

i would still be interested if you can give a better location that you bought in–not just Coquitlam

PS: they’ve been talking about building the Evergreen Line for about 10 years –it will probably be another 10 years before it reaches Coq Town Center—hey perfect— property values might be back up be then

#161 Habbit on 01.10.12 at 6:33 pm

#66 DonDWest People could use leverage to buy stocks.

#162 Habbit on 01.10.12 at 6:56 pm

#13 Chris. Sounds like a good simple plan that is starting to turn in your direction. Hope DonDWest reads your post. Best of luck to ya

#163 Van guy blazin kush on 01.10.12 at 7:04 pm

Morry & poco

Even if this TH is up 25k, that would be about 7% increase. But you don’t know until you sell it. After closing cost if you do get that price, you’re breaking even. Also, this TH must be really old. So you could be spending more money if repairs are needed. And for building equity, good luck to your son. That 120k could go bye bye

#164 The InvestorsFriend on 01.10.12 at 7:15 pm


Number 143 spaceman complains about taxes on an RRSP.

If income comes with taxes I ‘d rather have the income minus the tax than face no tax because there was no income.

I am on track to pay huge taxes on my RRSP, but that’s okay. The taxes are really just a return of the approximate 40% of “my” RRSP that the government funded through tax deductions when I put the money in PLUS the gain on the governments’s 40% share of my RRSP.

My RRSP has about $500 in it for every $100 dollars contributed. The way it really works is I put in $100 and got back $40 in refund so net cost to me was $60.

Now if I take out the $500 the government gets 40% or $200. I get net $300.

Whine about the tax if you like but as I see it my net $60 grew to $300 tax free. The goverment just takes back my original $40 refund plus the gain on it.

Actually it is mathematically identical to putting the $60 in a TSFA and having it grow at the same rate.

This math is irrefutable (assumes marginal tax rate constant at 40%). The situation does get more complicated if we include impacts of old age claw back…

The more I make in my RRSP, the more I pay in taxes when I take it out. What is unfair about that?

#165 Form Man on 01.10.12 at 7:22 pm

#165 westernman

excellent ! that was a very amusing attack. There appears to be something about me that brings out a better writer in you, westernman………..

#166 DonDWest on 01.10.12 at 7:31 pm

“#66 DonDWest People could use leverage to buy stocks”

To the comparable rate of real estate? No way. The only way to leverage stock as an average Joe is to take a bank loan out against your savings and shove that bank loan into stock purchases.

#167 Stupesing in Cabbagetown on 01.10.12 at 7:39 pm

#114 disciple – I understand. For years I thought that “Gladly the cross I’d bear” was about a cross-eyed bear named Gladly.

#168 Westernman on 01.10.12 at 7:49 pm

Form Man,
I didn’t think of it as an attack, more of an description… a kind of warning label to alert the unwary and innocent to the self-destructive guilt trip that liberalism is.
I consider it a kind of public service work.

#169 live within your means on 01.10.12 at 8:14 pm

Been upset since Xmas. Niece, 28 next mo, is now living with someone 16 yrs older than she. We met him and he’s a nice chap. He’s divorced w/a 15 yo daughter. They visited France and her fiance’s family in Nov. She finished her studies but did not finish her thesis and her fiance told my DH she could not, but would not say why. She rec’d a SHIRK grant for her Master’s. Sorry for my ignorance, but it this plausible? He rec’d an inheritance of $100+K at Xmas. Yesterday she looked at 3 places and is interested in one. She only works part time, if she’s lucky. At Xmas, it was obvious that any warnings on my part would totally be dismissed. And, they are trying to have a baby. As she’s an only child, per parents are understandably upset, but don’t want to ‘push her’ away. I know they are worried.

Ironic that I became a good email friend of my niece’s 3 yr+ ex-boyfriend’s (from France) Mother. She had invited us to Bordeaux last summer.

#170 Habbit on 01.10.12 at 8:50 pm

#172 DonDWest No one said anything about a comparison difference of total dollars that can be leveraged to buy either asset.
You said
The big diffference here is people who buy stocks actually own the stocks.

#171 live within your means on 01.10.12 at 8:59 pm

#90 Rental monkey on 01.10.12 at 9:34 am
@ phantom:

I take offense to you calling Suzanne Somers a ‘has been’ . Have you seen what she has been up to lately? In addition to amazing chemical free alternatives for skin care, vitamins and general lifestyle, she has done some very interesting research on chemo/radiation free treatments for cancer. She RE-GREW her diseased breast using stem cells.

Oh,and she is a well published author, with a very interesting eating plan, that when followed heeds amazing results. Oh and I think she still sells jewellry and clothes on the shopping channel.

Have you seen a pic of her lately? For 65 years old, i would say that thigh master served her well.
Peace. We can all hope to be as healthy and wonderful as her at her age.


I mostly agree. But it also helps when one can afford to spend $ thousands on alternative health foods, treatments, etc. Barbara Walters is over 80 yrs of age, but I’m sure she’s had numerous various face lifts. Helps too when one has good bone structure. And, don’t forget the makeup artists, etc., etc.

#172 north TO on 01.10.12 at 9:32 pm

MLS #N2255129 listed for $235k, 43% of the appraisal value.

Are these realtors that stupid? Do they realty believe that a bidding war would triple the price these days?

#173 Snowboid on 01.10.12 at 10:49 pm

#153 The Thing in the Basement on 01.10.12 at 3:58 pm…

Taxes AZ vs FL – you are correct. Not sure about FL sales tax, we pay around 9% depending on city (AZ state, Maricopa county, then individual city combined).

#174 Morry on 01.11.12 at 12:49 am

oh you silly puppys. Invest i nthe PoCo area before it’s too late.

we are happy we bought at a fair _low_ price. After ten years of NOT paying rent my son will be way ahead in terms of LOST rent…even if his PRICES remain flat, which will not be come selling tim in ten years. prices are not falling in the poco area. ;-)

#175 DonDWest on 01.11.12 at 1:13 am

“The big diffference here is people who buy stocks actually own the stocks.”

And for the most case that’s true. Most people actually own their stocks; mpst people don’t actually own their homes. Capich?

#176 Ronaldo on 01.11.12 at 8:29 am

#17 Steve-O – ”I am starting to have doubts that RRSP’s are all they are cracked up to be.”

This link may be of assistance.

#177 a prairie dawg on 01.11.12 at 2:52 pm

#181 DonDWest

Actually most people don’t own their stocks anymore. At least not the way they used to. Try asking for your shares certificates to be sent to you.
Then you’ll see what I’m getting at.

Now the operative phrase is “beneficial ownership”.