Jim and Vesha have starred here twice. Once when they complained about what a lousy investment their Victoria house turned out to be. The next time as it languished on the market for months, and they vexed over their future. The hot young couple just sent me an update. I was faint with anticipation:

After 8 months of hiding out in a friends basement bunker suite, we just moved into a 2 year old ocean front condo in a high end development called Aquatro. ( This little enclave was finished in 2008, right around when the original developer went belly up, but someone stepped in, finished the first phase and is attempting to blow out the remainder of the units at around 40% off. Anyways, who cares, our unit originally sold for just under half a million, it’s a 2 bed 2 bath, and offers southern exposure and breathtaking views of Juan De Fuca. All for a mere $1400/mo (notably this is only $100 more than what we were paying for the dark bunker basement). It’s got granite, a gas cooktop, stainless everything else, including a massive double wide fisher and paykel fridge, crazy nice bathrooms, and it’s own standalone geothermal exchanger (which is just stupid excessive for 900 sq ft.).  I’d guesstimate the owners are dropping damn near $2000 to keep this place afloat, and we were told it was bought as an investment.

This small tale follows on my musings yesterday about our nicely screwed middle class. As you know, real estate’s been the boy toy of the upwardly mobile and the materially obsessed. The cult of the house has resulted in the bulk of net worth unwisely migrating into granite and stainless, when it should be liquid. Jim and Vesha’s story tells us simply that a transfer of wealth is going on in that swishy condo outside Victoria, as the owner subsidizes the tenant. Every month passing, the condo investor loses money and the renter lives for less – freeing up capital to buy financial assets.

This is the future. In BC, downtown Toronto’s condo forest, across Britain and Australia and America. The point of extreme may have been reached in Florida. In Tampa, precisely.

The average house there now sells for about $120,000. If you put 10% down and get a mortgage at current rates (about 4% for a 30-year loan), the place carries for $499 a month. To rent it would cost twice as much – and yet such houses sit unsold and unloved. Real estate has been so discredited and shunned that its inherent value has plunged precipitously. Tampa real estate has lost 53%, and its largely middle class owners have been stripped of $153 billion in equity. In one city.

The comparison between the two sides of the border is extreme. In Canada houses are objects of lust, while there they are spurned. Here houses are financial plans. There they are wealth destroyers. Here owners subsidize renters. There tenants pay to avoid owning. Here homes are unaffordable. There houses go begging. Here young fools buy 400-square-foot condos. There 13% of all houses are vacant. Here families believe real estate means security. There families are trapped. Here we are delusional. There they are crushed.

Real estate in Canada has turned into the greatest threat to middle class wealth. Ironically, just one generation ago, housing was the ladder to security. The run-up in property costs has been so extreme, so excessive, that average families in cities like Toronto, Calgary and Vancouver cannot attain average homes on average incomes. Far from it. As the recent Demographia survey  found, we now have the least affordable real estate on earth, outside of Hong Kong – one of the most densely populated places, where seven million people teem over 426 square miles.

In contrast, our nation has 3,855,103 square miles. What are we thinking?

This week Brother Carney, the man behind crack cocaine mortgage rates, broke down and said some parts of the Canadian real estate market are “probably overvalued.”

“So there are risks there. We’re watching it closely. We’re working with our partners, the federal government, the superintendent of financial institutions. Measures have been taken. They’ve been effective. We’ll keep up that vigilance. If more needs to be done, I’m sure the appropriate authorities will take those measures.”

The odds are growing, of course, the feds will ban 30-year mortgages and require everyone who needs CMHC insurance to take a more costly 25-year term. But will F and his minions – who once thought 40-year loans and 0% down were great ideas – have the stones to address the country’s growing subprime secret? That includes the common practice of banks getting around minimum down payment requirements by giving buyers a cash rebate when they borrow horse-choking mortgages. It means regulating (and possibly giving wedgies to) those sleazy no-money-down realtors and mortgage brokers this pathetic blog unearths. And, of course, reigning in CMHC so lenders have to worry if their clients can actually pay their loans back.

I doubt it.

But so what? The die is cast. Residential real estate in Canada is already a bad investment. It’s about to get worse.

In putting together their report naming Vancouver as a toxic place to own, the Demographia guys said, “The causes of massively deteriorating housing affordability are not a mystery.” All you need are governments, “with insufficient attention to economic fundamentals.”

Middle class people, the products of a superior school system and citizens of a capitalist dream state, should get that. There are no fundamentals supporting SFHs in 416 Toronto costing ten times what families earn. The spectacle of speckers lining up to buy condos where they’ll have to subsidize renters is financial theatre. And when banks hand out money to kids they indenture, the end is close.

In such times, the liquid shall inherit the earth.

Tomorrow, financial advisors and the devil’s spawn.



#1 Dan on 01.23.12 at 9:30 pm


#2 Bob on 01.23.12 at 9:30 pm


#3 Doug on 01.23.12 at 9:33 pm

I’ll bet I’m not first….

#4 Helpful Advice on 01.23.12 at 9:39 pm


#5 DboyEDM on 01.23.12 at 9:47 pm

So what now??? The end is near to most Canadians who have all their investments in the “House”. if we have a massive sell of of boomer houses who will buy? Edmonton is the most affordable city in Canada. But it is still high at the average of 350 grand for a MCshack. Link
We are screwed… Some of us are not because we listened to Garth. Thanks for that.

#6 on 01.23.12 at 9:48 pm

Stay liquid, my friends!

#7 DboyEDM on 01.23.12 at 9:48 pm

So what now??? The end is near to most Canadians who have all their investments in the “House”. if we have a massive sell off of boomer houses who will buy? Edmonton is the most affordable city in Canada. But it is still high at the average of 350 grand for a MCshack. Link
We are screwed… Some of us are not because we listened to Garth. Thanks for that.

#8 Jimbo on 01.23.12 at 9:52 pm

Garth, I was watching Global news tonight and they were talking to a mortgage broker who said his business had increased by 1200% with these lower mortgage rates some of the banks are offering. As well, a realtor said that he is seeing bidding wars again on properties.
I guess the banks aren’t going to be happy until 100% of the Canadian population has a mortgage.

#9 Ladybug on 01.23.12 at 9:53 pm

Oooh, I can hardly wait for tomorrow’s post!

#10 Bellurol on 01.23.12 at 9:53 pm


#11 I'm stupid on 01.23.12 at 9:55 pm

Real estate is an instrument of the masses. The unfortunate thing is that the masses are uneducated fools. They take advise from each other or [email protected] (who is a fool herself). They will learn just as a child learns not to touch the stove after he or she gets burnt. If only I could track divorces, they will be the tell sign that the bubble burst. When it’s over all those fools will look to blame others when the mirror is all they need. When the taxi driver tells you to buy homes and rent them out you know your city is fucked.

#12 TurnerNation on 01.23.12 at 9:57 pm

Remax Toronto condos latest update
– they gloat over 2011 but express some 2012 cautions, as I read it:

#13 Are-we-there-yet on 01.23.12 at 9:58 pm

Just received Feb edition of Canadian Business Mag with the following story “Why house prices are about to fall”–issue-january-24-2012-february-20-2012

#14 TurnerNation on 01.23.12 at 10:00 pm

Aquatro? Sounds like an Audi full of water.

#15 CoreyMC on 01.23.12 at 10:06 pm

Yes, crack cocaine! Town Houses in Calgary sold! sold! sold! Cheap compaired to the a lot areas of this Country, but ugly small and still overpriced. It will be hard to see this province not so hooked on their housing porn. Even when thiere’s dwendling resales, people are willing to invest. At least there is an actual economy here, not like the west coast.

#16 george on 01.23.12 at 10:12 pm

Jan. 23 (Bloomberg) — Francois Hollande, the Socialist Party frontrunner and President Nicolas Sarkozy’s main opponent in France’s presidential election, promised to combat the financial sector and restore equality if voted into office May.

“Let me tell you who my rival is. It does not bear a name or have a face, it’s the finance industry,” Hollande told a crowd of more than 10,000 supporters during his first campaign rally yesterday. “In the past 20 years, the financial industry has taken control of our societies, of our lives and threatens our states,” he said in the northern suburbs of Paris.

Exactly 90 days before the first round of voting, 57-year- old Hollande presented for the first time proposals including a tax on financial transactions and splitting retail and investment banks. The lawmaker and former Socialist Party chief said new rules to control the financial sector would be implemented in the first weeks of his administration.

“His stance against the financial sector is intense, but realistic because he’s adopted measures that already have been proposed or existed, like the U.S. Glass-Steagall Act,” said Nicolas Tenzer, the director of CERAP, a political think-tank in Paris. “This was a nod to the left-wing of his party and also an electorate that doesn’t want to bow to the financial elite.”

An opinion poll released Jan. 21 showed Hollande with a 14- point a lead over Sarkozy. The president, who has yet to declare his intention to run, would lose by 57 percent to 43 percent against the Socialist challenger if the two faced-off in the second round of the elections on May 6, according to the BVA poll. The poll of 974 people was carried out from Jan. 18 to 19 and didn’t provide a margin of error.

#17 Florin T on 01.23.12 at 10:16 pm

The report is flawed. It used the gross income in determining the affordability ratio. Who cares about the gross income? It’s useless. I pay for the bread and mortgage by using money left after paying the tax not before.

#18 EJ on 01.23.12 at 10:16 pm

The first rule of profiteering from a housing bubble is: You do not talk about the bubble.

Second rule of bubble club is: You do NOT talk about the bubble!

Third rule of bubble club is: If you violate rule #1 and #2, be sure to say “flat” prices, or at worst “soft landing”. Use the phrase “it’s different here”, and never, ever say “crash”, even when it will.

Ben Bernanke held true to this axiom, even denying the bubble after the crash was already in full swing.

ProTip: Don’t listen to the government, the banks, or the real estate industry. They profit from your ignorance.

#19 Victor on 01.23.12 at 10:20 pm

The suggestion the government might crack down on condo buyers is not new, having been scrapped last year in favour of tougher new rules on amortization lengths and refinancings. Most people in the real estate sector now believe amortizations will be reduced to 25 years after having been as long as 40 just three years ago.

Brad Lamb, a Toronto real estate broker and condo developer, has heard the government is again considering including 100% of condo fees in calculating debt levels but doesn’t think it will happen.

“The 25 year amortization is a no brainer, they should do it,” said Mr. Lamb. “It’s not smart to have loose lending rules. But the condo market is hot because of investors not speculators. These investors are coming [from around the globe]. This silly [condo fee] change will do nothing. These people are buying with cash.”


Brad Lamb finally seeing the light.

#20 The Thing in the Basement on 01.23.12 at 10:27 pm

“we now have the least affordable real estate on earth,
outside of Hong Kong” – Garth

Not a world survey Garth, anglophone and HK only.

Interesting to note Canada overall much more affordable than Oz and NZ

#21 Alberta man on 01.23.12 at 10:29 pm

Could people sue their Realtors for misleading them?

#22 Junius on 01.23.12 at 10:34 pm

For those who have inquired, I appreciate your interest.

My pet monkey, Mr. Junius Junior, is doing fine. He puts me to sleep at night and wakes me in his own special way in the morning. So what, I’m not breaking any laws, and he’s the best friend I’ve ever had. I’m happy, so lay off. Junior and Pappa are like two peas in a pod, we are even starting to look alike. Live with it.

As for Vancouver real estate, the ship is springing leaks fast. We could actually sink year-over-year within 70 days, and be 20% off of peak values in six months or so. And that is just the start.

I do honestly believe that Vancouver has turned and that this is the proverbial big one.

Junior will keep me warm while real estate goes into the deep freeze.

My advice to you – get your own monkey!


#23 R C on 01.23.12 at 10:35 pm

@ #8 Jimbo – Bidding wars are definitely still alive here in the 416. As a first time buyer-in-waiting I’m watching the situation closely. Today our agent was a little more pushy than usual over a 400k pile of junk that was clearly overpriced and a gut job. Maybe they’re all getting nervous?

#24 AprilNewwest on 01.23.12 at 10:40 pm

#8 Jimbo – I also heard the headlines on Global and of course they ask a realtor who will say whatever to suit his agenda.

#25 CHANGES on 01.23.12 at 10:43 pm

Does anyone know who has the power to put restrictions in place so that this bubble does not continue or happen again ? Could British Columbia have its own restriction apart from the other provinces ?

#26 Canadian Watchdog on 01.23.12 at 10:48 pm

#19 Victor

This is the same baseless argument I read from RE agents again and again. Canada’s housing market is NO different from the US and when the newswires start headlining the correction has started, foreigners will be the first to unload their properties. The notion that wealthy foreigners will standby and watch the value of their property fall is absurd.

Foreign Direct Investment in the US

#27 Junius on 01.23.12 at 10:50 pm

#22 Fake Junius,

I see you continue to monkey around.

#28 Smoking Man on 01.23.12 at 10:51 pm

Garth Said:
In such times, the liquid shall inherit the earth.

Ya but you don’t need liquid either………….
You can be dead broke, SM in 1993

You need a good plan, a nice tie, and big balls, You can do anything, no limutes to what anyone can do. The just beilive baby. Thats all you need.

I can’t wait to publish my bad spelling bad gramer book and have it become a best seller. I’m on a mission, I need to teach the bubble heads how to do it.

#29 Gord In Vancouver on 01.23.12 at 10:51 pm

Until now, I always took Helmut Pastrick (Central 1 Credit Union (BC) economist) seriously.

Metro Vancouver near bottom for home affordability

#30 coastal on 01.23.12 at 10:53 pm

Just witnessed another young Victoria couple get sucked into buying a pressboard box with no yard within a stones throw of the highway. It was a bank sale on a project that looks barely a couple of years old and they weren’t even bright enough to lowball what was an obvious desperation sale. Of course it was the one set of parents pushing them into it so there smart little boy can be on the “property ladder”.

While one gets sucked in, another I know who has owned for 3 years need daddy to pay for the groceries to keep the kids fed even with a two income family. This is not going to end well in the City of Gardens and the brainless.

#31 AACI Home Dog on 01.23.12 at 10:54 pm

There will eventually be a huge swarm of foreclosures. In the states, there is no CMHC equivalent, so I suppose the banks there are taking the hit on most of the foreclosure activity. Here in Canada, CMHC will be in the red a few billion….ouch. Will it be added to our federal debt ? Will that make our taxes go up ?

#32 Fifty Percent Correction Predictor on 01.23.12 at 10:55 pm

Hope the condo market in Toronto stay hot for another three years. So all the ones under construction and in the planning stage get completed.

#33 Smoking Man on 01.23.12 at 10:56 pm

#23 R C on 01.23.12 at 10:35 pm
If there was any inventory in the 416 Carney would not say anything, yet told everyone he is taking measures to cool the market.

In reality his measures are saying he’s taking mesures.
But that’s about it.

Spike the overnight Carney that will do it….

I don’t offten take chances with my near 100% prediction accuracy but hear goes out on a lime.

Unload you bonds and short em. SM Jan 23 2012

BMO must be freaking right now with the 2.99

#34 coastal on 01.23.12 at 10:57 pm

Pastrick is on drugs and has always been. The mouthpiece for the Credit Unions doesn’t have a brain cell anywhere in his rationale. He’s no economist, he’s a monkey with a grinder box.

#35 Kevin on 01.23.12 at 10:57 pm

There are many ways CMHC should tighten the rules.

One I have mentioned before is the 5% down for 2nd, 3rd and 4th properties. Sure you need 20% down if you are an investor but you only really need 5% down if you want a 2nd property . It is all in the wording. Gotta love loop holes.

Here is RBC that will finance a second home for only 5% down.

NBA – buy a second home ( year round) with 5% down
– buy a second home ( seasonal) with 10% down,2726,divId-2_langId-1_navCode-16603_navCodeExTh-4050,00.html

And this totally insured by CMHC.
All the big banks have this going on right now

The problem with this is that some realtors are telling investors to tell the bank that the purchase is a 2nd home, not an investment. Which we all know, but the banks for some reason don’t, a 2nd home is an investment.

I have to ask why the heck is CMHC even insuring second, third, fourth homes, vacation homes, investor properties etc.? All this does is inflate demand and push up house prices.

This goes against their mandate of making homes affordable for Canadians. CMHC was created to make homes affordable for Canadians. But through the help of their policies, homes in Canada are anything but.

#36 bobby b on 01.23.12 at 10:57 pm

It’s a shame that in Florida the property tax rates for non-residents are so high – around 4% if I’m not mistaken, due to the inability to qualify for the Homestead exemption, which requires you to permanently inhabit the home as your primary residence..

#37 Kevin on 01.23.12 at 10:59 pm

One question I would ask, shouldn’t the board of directors of CMHC maybe have some young renters on it? You know, people who just graduated from university with a mountain of debt, plan to start a family and would like to buy an affordable house. I think they may have a better insight of the housing market than most of the policy makers in CMHC who are all most likely baby boomers who all have their own vested interest in keeping real estate inflated.

#38 Smoking Man on 01.23.12 at 11:02 pm

#206 The Dividend Yield Investor on 01.23.12 at 8:58 pm
I see your point, an agree education is a must.

But you don’t see mine, you don’t need school for an education, good Google key words is all you need.

#201 TurnerNation on 01.23.12 at 8:15 pm

I don’t normally get a Stuckups Coffee, But, ya see their was an amazing hot skirt in line, that smelt so fine. You understand.

#39 Tim on 01.23.12 at 11:07 pm

There are no fundamentals supporting these lofty real estate valuations, I agree, but the fact is that they are very sticky and inelastic… How many rich folk on the West side of Vancouver will bail, even if their property drops 20 percent? Many already have paid for their houses. Though I wouldn’t buy now, I have to admit there are not a lot of great alternatives if you want to rent. There is a shortage of decent rental options in Vancouver and who wants to sign a year lease and then be at the mercy of some speculator who decides to sell the property just when you get comfortable as a tenant?

Looking forward to your piece on financial salesmen- I mean advisers. It would be interesting to compare their performance against the typical couch potato portfolio, basically buying a few blue chips in each of the major sectors of the economy. How much education do these advisers have? What do they know about technical analysis? Fundamental analysis? Do many even know how to evaluate a stock? When you have a bad year, they simply say that there is a lot of volatility and that you are in it for the long term. How much of your profits are eaten up by the management expense ratios and trailer fees of mutual funds? I switched to an investment advisory newsletter several years ago and I have been doing better. I also pay no money in fees to support a financial adviser. Many of these financial advisers don’t even have a commerce degree. Most people would be better off with etfs, or blue chip stocks than listening to many of these advisers.

#40 Canadian Watchdog on 01.23.12 at 11:13 pm

Here is a chart of TREB’s market rental report data showing 1 + 2 bedroom condos only. I removed the bachelor and 3+ bedroom data in order to analyze lease activity on the most active condos (1+2 bedroom).

Lease transactions were hardly unchanged for the period of Sept-Dec compared to 2010. The 2% increase TREB reported was probably due to more bachelor condos being leased, which is not a good sign and bad news for 2+ bedroom owners.

#41 Waterloo Resident on 01.23.12 at 11:13 pm

This is MY plan for this spring:

– I currently pay $1,300 /month rent for a 3-bedroom house. I don’t want to be paying rent forever, so instead I’m going to be putting this money towards the actual PURCHASE of a $580,000 townhouse in Toronto.

– My plan it to go into an arrangement with a lady friend of mine with the idea that if home prices continue to go up then we will continue to make payments on the Townhouse, but if home prices fall more than 10% then she will simply DECLARE PERSONAL BANKRUPTCY and we will walk away from the townhouse.

We are going to try to find one of those banks who offer “NO-Money-Down” and go that way. I will give to my lady friend $10,000 to cover the closing costs.

– My lady friend earns $60,000 per year in a good government job, but she has no savings so she can easily ‘BAIL OUT’ in bankruptcy if things go badly in the housing market.

I have lots of savings so there is no way I’m going to buy because I cannot get out of it through bankruptcy if the housing-economy tanks.

I cannot buy a house / investment properties as if i need to declare bankruptcy then I lose everything I have, so my plan is to sign a business agreement between the two of us and give my lady friend the $10,000 she needs to buy a $580,000 townhouse in Toronto and then if it goes up in value we split the profits, if it goes down in value then she declares bankruptcy and i simply lose my $10,000 (not a whole lot lost).

Each year she buys another $600,000 townhouse and rents it out to cover the mortgage, with me giving her the cash to buy it, but its up to her to find a renter to provide enough cash per month or rental income to cover the carrying costs. After 10 years we have 10 townhouses, and we sell them for double the price we paid for them.

Now, is this a great plan or what??

#42 harden on 01.23.12 at 11:18 pm

The spectacle of speckers lining up to buy condos where they’ll have to subsidize renters is financial theatre.

best. line. yet!

#43 T.O. Bubble Boy on 01.23.12 at 11:23 pm

@ #12 TurnerNation

There are some ridiculous statements in that RE/Max report:

Fear mongers keep talking about a rise in interest rates which could lead to problems. What you need to know is that if rates rise, it means the economy is stronger and we have higher inflation. That translates into higher personal income too, which will act as an offset. For those old enough to remember, inflation has always been a friend to real estate.

ummmm… first of all, inflation is not just due to a strong economy — the term ‘stagflation’ didn’t get defined for the fun of it. Apparently ‘massive debt bubble’ = ‘strong economy’ in Realtor World, since the “Inflation” in house prices in Canada has been driven by mortgage debt – not rising incomes.

– Gen X and Y are also the primary renters in this market, and again, they only will rent new – read hardwood floors, granite counters, stainless steel appliances found in condos.

Really – no Gen X or Gen Y renters anywhere in Toronto have laminate countertops, laminate floors, or white applicances?

– Rental rates will increase by another $75 per month. That means the basic one bedroom without parking will increase to $1600 per month. Vacancy rates will remain below 1%.

Vacancy rate below 1% is a pretty bold statement… especially with boatloads of condos hitting the market and needing renters — maybe official stats don’t include some of the flipper condos that are simply ‘not occupied by the owner’ (i.e. empty) vs. ‘on the rental market’?

#44 mark on 01.23.12 at 11:29 pm


you have often written about REITs and preferred, and ETFs based on them

Do you also favor Utilties and Pipes, or ETFs based on those as holds for income?

#45 Ozy - City of Condos - too late to UNLOAD on 01.23.12 at 11:31 pm

There are only 1-2-3 (maximum) areas in this city of many faces, to buy a condo unit.
All the rest are truly risky (mass gambling not investment) but it appears that is needed to separate the advancers from wannabes at this point in time.
Unfortunatelly, the forest of mushroom-ing high-rise condos is impossible to UNLOAD now, there are too many. The profit money $$$ are in developers/financers/governments vaults and are not rolling back to people.
l watch this as a spectator but still cry for the “investors” – it is heartbreaking already to listen to the stories of trashed dreams and dire present.

#46 Aussie Roy on 01.23.12 at 11:33 pm

Aussie Update

Selling a home is stressful at the best of times. Failing to sell at auction in the midst of a property downturn can be its own kind of nightmare.

Vested interest at it again, now posing as buyers

Must be very hard for these journalists to spot real estate agency staff posing as first home buyers, especially as they have the same surname as the MD of the RE agency they just talked to.

The IMF noted the main vulnerabilities of the Australian banking sector was their exposure to ‘‘highly indebted households’’ through residential mortgage lending, together with their large levels of short-term offshore borrowing.

Dun & Bradstreet (D&B) have just released their quarterly Trade Payments Analysis, which examines the ability of firms to pay their bills, and pay them on time:
During the December quarter last year, the number of bills left unpaid for 90 days or more grew 20 per cent compared with 12 months ago.

Jobs crisis: More pain ahead as 3000 workers face sack

#47 mid-Ontario on 01.23.12 at 11:44 pm

I listened to Brother Carney last week. On the one hand, money is cheap and home owners should be cautious about what cheap money does to house value. On the other hand, he wants business to access the cheap money and grow business so we can grow our way to prosperity.

A tough balancing act indeed.

Many business types, like in the US, are not going to invest in business with the growing housing bubble hanging over our heads.

When housing pops/recedes/slows, general Canadian business will slow and business knows that the cheap money just led to expensive overhead. So, we sit and wait for clear direction.

I wish Brother Carney well.
Lots of tealeaves need be read to get us thru 2012 in good shape.

Greece did not go away. Every politician has kicked every can as far as they can and we all know, it will come back to bite the Eurozone big time and move on elsewhere, possibly faster than Mr. G. can keep us all calm.

Tonight, I think we should wish Carney well in making the right decisions for Canada in 2012.

#48 Trev on 01.23.12 at 11:44 pm


Looks like the MSM is finally starting to get it. From today’s Globe & Mail:

“Connect the housing bubble dots: There could be trouble on CMHC’s horizon”

(and if you want a steady list of people still hooked on the drug, check out these listings: )

#49 Sleezy on 01.23.12 at 11:48 pm

#41 Waterloo Resident


Run, lady friend, run!

#50 OwlEyes on 01.23.12 at 11:52 pm

But wait, a trustworthy source says that there won’t be a bubble bursting (“going kaboom”)!

#51 Night shadow on 01.23.12 at 11:53 pm

#41 Waterloo Resident

Or in 10 years … she give you the finger, kicks you out of the house and gives you the finger!

#52 TheRealTruth on 01.24.12 at 12:03 am

If the gov was serious about housing, they would:

Provide CMHC insurance only on income validated by Canada Revenue Agency. So for both employed and self-employed, the net income would provide income qualification values. No exceptions!

everything else is just hot air….

#53 Dr. Cornwallis on 01.24.12 at 12:07 am

According to Wendell Cox and Demographia, high prices have little to do with poor personal decisions, house lust, banks, BOC policy, CMHC backed loans or unscrupulous realtors. It’s just all that unnecessary land use and environmental regulation that stops developers from building enough crapshacks to keep the prices down.

#54 John on 01.24.12 at 12:09 am

Garthe – The average house there now sells for about $120,000. If you put 10% down and get a mortgage at current rates (about 4% for a 30-year loan), the place carries for $499 a month.

Aren’t there more to carrying costs then the mortgage payment?

#55 tkid on 01.24.12 at 12:09 am

That means the basic one bedroom without parking will increase to $1600 per month.

I’d sooner commute in from Niagara Falls or Grimsby than pay $1600 for a one bedroom sans parking. Remax and its clients are delusional greedy.

#56 Bobby on 01.24.12 at 12:11 am

I have a colleague who looked at Aquattro here in Victoria. They are not selling at fire sale prices most probably because of the exorbitant strata fees. At $1400’a month, the owner is taking a bath.
Just about to call the realtor about a foreclosure home I saw on a bailiff site. Understand there are quite a few here in Victoria. It is going to get ugly.

#57 [email protected]# on 01.24.12 at 12:13 am

Garth, You keep stating to stay Liquid.
Why? How is this going to benefit us?

#58 Free Market on 01.24.12 at 12:28 am

Hey T.O. Bubble Boy! My wife and I are Gen-x. We own a house, have white appliances, and laminate countertops. Sister In-law is Gen-Y, she rents, has I think beige appliances with laminate countertops. We laugh at the pointlessness of SS and granite.

#59 martin9999 on 01.24.12 at 12:35 am

#41Waterloo Resident —

you are too late bud

#60 tkid on 01.24.12 at 12:40 am

P.S. YAYYYYY Jim and Vesha! High fives all around!

#61 Hoof - Hearted on 01.24.12 at 12:44 am

A few points:

One YOUTUBE Video If one does the math apparently the entire worlds population could fit into Ontario, with an allotment of approx . 1400 sq ft per person… if one has a family of (4) and build a two story home, looks good….so the overpopulation and land shortage is debunked.

Another article discussed Greece, and the dangerous game being played by Hedge Funds and the EU. Greek seems to be the plug in the dyke

Vampire Hedge Funds Are Sucking Greece Dry

Here in BC, I can see this is going to be a disaster. I really have no clue what is going on and why people are still building condos. Its either money laundering or something else. The Asian money seems to have dried up.

#62 Hoof - Hearted on 01.24.12 at 12:52 am

Other problem I see with overbuild especially condos….
Eventually any/all owners will have to sell them, and will find a lack of buyers.

Eventually I can see strata hell…..forced to rent to get warm bodies that can pay something/anything………..end up slums so in essence 1/2 empty or worse buildings. The buildings quickly deteriorate.

People can’t pay fees, especially if foreclosed , more burden on existing owners……..Stratas go bankrupt….

SFH ? look up Detroit on YOUTUBE…..

#63 nonplused on 01.24.12 at 1:01 am

“Tomorrow, financial advisors and the devil’s spawn.”

That sounds interesting. But hopefully you won’t be too disparaging to the devil. Comparing him to financial advisors would be, well, unjust. A few key points to keep in mind:

– The devil is in employ of the church, and always has been. Without the devil, there would have been no sin and thus no need for redemption, the Pope, and very likely the church itself.

– The devil is shrewd, but also fair. Reports are that people who have sold their soul to the devil for fame or fortune got what they asked for even if it eventually killed them. (Be careful what you ask for!) However, most people who give their money to a financial planner will drive a distinctly lower quality car than their financial planner does. Remember, the financial industry customers do not have yachts. Some of the devil’s customers do, on the other hand.

– Although the devil is frequently accused of demanding all manner of sacrifice and committing untold atrocities against even babies, the evidence is sparse. However, we have the inquisition, the Salem witch trials, and countless other horrors well documented that were committed in the name of the church, all against people who were undoubtedly innocent of the crimes the were accused of. I mean, witchcraft? Really? Even if she does think she’s a witch and signed a confession after you filled her belly with scolding hot water (or did something much, much worse to her than that), and even if she cursed your cow, she’s delusional and magic doesn’t exist. Only science and slight of hand combined with showmanship exists. Good financial planners might have something close to science behind their work but most use slight of hand and showmanship. But that doesn’t mean we should burn them at the stake.

– The root word for daemon in Greek means “knowledge” in English. But the church was always against the people having “knowledge”, so they were vilified, tortured, and killed. To be “possessed by daemons” was at one time literally the same thing as to be “possessed by knowledge”. The less intelligent have always feared and hated their intellectual superiors because they cannot figure out why they are successful, in the same way the common man detests someone who saved for a rainy day once it starts raining. Remember, even Galileo died under house arrest, the church being so fearful of his now mostly proven ideas. In more religious times, Einstein, Newton, Darwin, Tesla, and even Sagan would have probably been burnt alive. Maybe even Jobs and Gates.

– Most financial planners are peddling a religion. The devil is peddling putting your own interests first.

– The devil isn’t real, and she therefore can’t hurt you unless you do it to yourself through your own ideas and memes. Financial planners are very real and they are coming for your money.

So don’t be too hard on the devil and her “children” tomorrow Garth. She may not be wise but she’s smart, and she is no financial planner.

#64 a prairie dawg on 01.24.12 at 1:02 am

Up to 68,000 jobs to vanish under federal public service spending cuts: report

#65 mac on 01.24.12 at 1:11 am


That would have been a great plan in 2001. What you write in a contract can and will be used against you, especially if it’s illegal or confirms that you seek to defraud your creditors.

On second thought… maybe you and your lady friend are the final greater fools? Like the four horsemen… get shopping dude.

#66 Mister Obvious on 01.24.12 at 1:15 am

#25 Changes

“Does anyone know who has the power to put restrictions in place so that this bubble does not continue or happen again ? “

No one has the power. There will always be bubbles. They’re an inescapable consequence of the human condition.

Someone has to say it. But I still enjoy being a member of the human race, stupid as we are.

#67 Timing is Everything on 01.24.12 at 1:18 am

‘…that swishy condo ‘outside’ Victoria.’—>Way outside.

Ha! Colwood—> Crawl…Y’all.
‘condo investor’—>Isn’t that an oxymoron?

#68 Peter Pan on 01.24.12 at 1:44 am

Good News! I convinced my boomer sister (63 years old) to sell the house. She and her contractor husband are going to sell their California-style house in the Montreal Exurbs after they complete the requisite granite counter-top additions and appliance upgrades. She finally bought the argument when interest rates go up, there will be a stampede for the exits. Better to leave the party early…

#69 Edmontonian on 01.24.12 at 1:52 am

# 5 D-Boy Edmonton
They say we are “the Most Affordable” in Canada-and that’s comical. WHat the Mian stream Medi deosn’t mention is how much they have over built here in the Edmonton Area. We have the highest Vacancy rates in Canada here in ALberta & CMHC doesn’t get the thousands of condos sitting empty in Edmonton.
Most Major cities in Canada saw a resurge to 2007 prices with the recent 195 year low interest rates (the government recreated a housing bubble to “help” the economy as it contracted). But in Edmonton prices still continued to soften this winter-dwon over $20,000 on average and then some!
I know someone that works for a very successful Condo Management company in Edmonton and the surrounding area. Huge condo fee defaults by many of the owners. SOme buildings have over 100 suites and as much as half the owners havent paid their condo fees for more than 6 months!
I guess we had such a boom here in the mid 2000s that the Government couldn’t keep track of the 50,00-60,000 people that went back out east, or back to the states when the credit bubble bursting down south really started to affect us here in Edmonton & ALberta.
WHat everyone that “knows” is crapping themselves about, and possibly the cause of all the conservative members jumping ship is….80% of our exports in ALberta go to the USA, the USA is for the 1st tine SINCE 1979 EXPORTING more oil than it is importing. Our economy is plunging here. And we were hoping China would pick up the slack but they’ve just done a masssive Oil Deal with Afganistan! This is why our Goverment is so desperate to try to force through this new pipelines from the TarSands!
And meantime in Edmonton, city council gives themselves a raise & tries to push through a Huge Coliseum DT to resurrect life into our dying downtown core. They will try to provide all the funding for it although the “Katz group will privately own it. All just before we could see more economic turmoil like never before. No one has even talked about the Carbon Taxes that the EU and USA want before allowing anymore tar-sands exporting.
I was born & raised in Edmonton and I can say our DT core has gone bust for business DT. Such a high rate of homeless wandering around while condo towers that went on sale 7 years ago remain half-empty. A new renovation is being down to the old epcor building & once complete will provide DT with close to a MILLION SQUARE FEET OF EMPTY OFFICE SPACE. We are in a US style real estate market meltdown here in Edmonton, it’s just a matter of time! Sad to see my favourite restaurants & Bars close down here but what can you do when the bubble starts to burst? Sell & run like hell!
We’re back in 2006 Price levels now in Edmonton in most areas!

#70 Nostradamus Le Mad Vlad on 01.24.12 at 1:53 am

“I was faint with Doomed anticipation: In one city our nation has 3,855,103 square miles. In such times, the liquid shall inherit the earth. And when banks hand out money to kids they indenture, the end is close. Tomorrow, financial advisors and the devil’s spawn. I doubt it.”

That’s enough for today. I’ve never experienced Doomed anticipation before. Wot’s it like?

“. . . Brother Carney, the man behind crack cocaine mortgage rates, . . .” — Nice to see the truth finally coming out, ‘tho (of course) it will never be proven, just like 9-11, etc.

Follow the money, esp. to where it ends up. It worked well for Bob Woodward and Cliff Bernstein with Deep Throat’s invaluable help.
#196 Onemorething — “YUP – see where we are going!” — Ooohh, that’s the nicest way of saying something realistic in plain English! Cheers!

#204 disciple — Thx. for the info. and link — bookmarked it. Yes indeed, there is quite a lot of astonishing stuff in this world, which hardly ever gets heard of.

#41 Waterloo Resident — “Now, is this a great plan or what??”

Personally, I prefer #38 Smoking Man’s — “. . . an amazing hot skirt in line, that smelt so fine.”

dOg, I love the scent of napalm in the nighttime!
India to pay in gold for Iran oil; Alternative Unemployment Charts; Illinois – Greece What’s the bigger picture? Sweetheart Deal Could be Obomba’s swan song gift to taxpayers Retirement in the workforce; Iran Taking the next step. Wanna bet how high oil will go? Iran Tit for tat; The Great Divide between rich and poor; Save the Ales Pubs closing.

Time For A Change; Silver; Barton Biggs terrified. Who is he? Italy about to do a Greece; Chinese RE bubble? Different POV; Obummer “The stimulus was really about implementing the Obama agenda.” Which means the Soros agenda; Princess Merkozy? Fannie and Freddie; Derivatives Anyone like some? TPTB or the elite Reforming capitalism.
Elephants Interesting pic and a sombre story; Sun Combined with Fukushima, we’ll be drenched in radiation; Oliver Stone says America will fall; Burger King Now this is a Whopper! Feng Shui from the Chinese masters; Geothermal Energy If it works, it will be a neat way of creating energy; Cognitive Dissonance, like conspiracy theories is the new norm; The ‘net is the last free place on earth; Alternative Foods in case of famine; SOPA’s on hold, but watch out for ACTA; Not yer average Mini Minor; Fighter Jets From Russia (to Syria) With Love.

#71 Hollywood3000 on 01.24.12 at 2:02 am

House prices will soon decrease in most markets in Canada. It remains to be seen when it makes more economic sense to purchase a house as opposed to be being a continual renter. The amount of the decline and length of time are factors for consideration for comparison in the housing market. Unfortunately in Canada we have been conditioned to take on huge debt levels. I have talked to several people and it was not long ago where debt levels were at .3 versus 1.5 for every dollar earned. I recall doing a University paper where house prices for a town in Alberta for 1990 were ¼ of current levels. It was approximate 1/3 in 2000 and now presently 350000. Although times have changed but a good correction is healthy for the economy. It needs to happen sooner than later.

#72 ALberta Boy Here on 01.24.12 at 2:05 am

Yes we are definately coming out of a Housing bubble in Canada! I think the cost of BC and Alberta will be affected the most since we have the highest Rate of Consumer Debt in the world. Canada has the most Consumer Debt of all the G-20 with ALberta & the Coast of BC leading the way! B.c has had an average savings rate of -2 % and ALberta sits as 0% savings rate for the past 6 years.
In ALberta during the boom of the 80s an average Albertian was saving almost 30% of their income even though mortgages hit 18% for some time. Back then in the 1980s the average house in Edmonton was only $98,000 and the average income per household was $45,000. Today the average household income in Edmonton is about $80,000 and the median house price is still about $349,000 can you see why this isn’t going to end good?
Time to leave ALberta, as in my opinion I feel being a native Albertan the Conservative Government has screwed the people of ALberta. I don’t know how they could do this! Giving away our resources for practically free, forgiving billions in royalties… what a joke. In the meantime FAMILIES LIVING IN POVERTY SOARS 100% in the last 10 years under the CONSERVATIVE GOVERNMENR REGIME here in ALberta!

#73 Edmontonian on 01.24.12 at 2:17 am

The Real Estate Market really id starting to plunge here in Edmonton. I have 4 friends who used to rent out their rental properties since they are under water now. over the past 6 months all four of my friends rental properties are now vacant & they can’t rent them even with price reductions.
Checkout this link: Looks like Alberta has the highest vacancies in the Country!

#74 villain? on 01.24.12 at 2:20 am

“Edmonton is the most affordable city in Canada.” NOT !!!!!!!!!!!!!!
I love how this article, (of course promoted in Edmonton’s own interest by the “Edmonton Journal”) misleads the real story by this headline.
Then, inside the article, it reads:
“The International Housing Affordability Survey looks at housing in cities in the United States, the United Kingdom, Canada, Australia, Ireland, and New Zealand along with Hong Kong”.
Here is a different look at this from another source.
Ten Most Affordable Cities in Canada

10.) Winnipeg
9.) London and St. Thomas
8.) Gatineau CMA
7.) Sudbury
6.) Sherbrooke
5.) Thunder Bay
4.) Windsor
3.) Saint John’s
2.) Saguenay
1.) Trois Rivieres

I don’t even see Edmonton listed on here!

#75 Bast on 01.24.12 at 2:43 am

Have given up on buying RE in Cowtown. Am buying a Miata instead. Zoom, zoom.

#76 michael francis on 01.24.12 at 2:50 am

Australian property is more expensive than Canadian property, and we mine our own granite and stainless.

#77 TheRealTruth on 01.24.12 at 3:40 am

Garth: does the freefall in the Baltic dry Index mean anything? It’s at the March 2009 lows when the world was going to end.

#78 Alan on 01.24.12 at 3:51 am

Garth please add $800 per month for house (hurricane) insurance to your Tampa Bay payment model. This does not include taxes which you may want to add to make your example more palatable.

As for the rest of the blog dogs who think housing is or should correct enormously, you need to ask yourself why you would want to support such a proposition. In fact what you don’t realize is that your livelihood is most likely tied to the health of the housing market. Now think about what you are suggesting that people do…wait until prices correct is a self-fulfilling prophecy.

#79 Canuck Abroad on 01.24.12 at 4:27 am

21 / Alberta man
Could people sue their Realtors for misleading them?
Nope. Everyone knows you are not supposed to rely on a realtor for advice. They are only there to sell and will say whatever they need to make a sale. It’s up to you to do your own due diligence and hire your own lawyers and surveyors and make your own financial decisions. If you believe what a realtor tells you you deserve what you get. Think of them as like a used car salesperson and you should be able to keep everything they say in perspective. Caveat emptor and all that.

#80 Canuck Abroad on 01.24.12 at 4:41 am

41 / Waterloo resident – Sounds like a pretty clear case of fraud to me, especially if you
“sign a business agreement between the two of us and give my lady friend the $10,000 she needs to buy a $580,000 townhouse”…
Hope you didn’t type that message on your home computer and use your real email address when you posted.

#81 villain? on 01.24.12 at 5:05 am

#8 Jimbo
Global News is sponsored by Remax, if I am not mistaken.
I believe, that says it all? ;)

#82 munch on 01.24.12 at 6:56 am


#83 House on 01.24.12 at 7:08 am

But, But Dawna smiled on the “news” last night and told us in Toronto there were ten offers for each listing. Is she and the media wrong? What else could the “news” media have wrong?

#84 Steven Rowlandson on 01.24.12 at 7:49 am

Sad news for mankind. Real estate isn’t an investment!
It is just a over priced consummer good and a place to live and has no more economic importance than a can of beans and may be even less. It has been priced so high that only wealthy people or syndicates can buy it and live at the same time. For ordinary working men real estate is worth nothing. It is not a reasonable expense that working men can cope with, so for all practical purposes real estate is worth nothing. Does real estate have practical value as a place to live? Yes but only if it is equal or less than 3 years pay for one man only instead of 20 or 30 years pay….. If you have to form a syndicate by combining your wifes income with yours to buy a house you are making a mistake and are pricing you children and other men out of the country they were born in. You are feeding the real estate price inflation monster and you really shouldn’t do that.
If you allow fiat currency , fractional reserve lending, banks and the corperations that grow up around them then first by inflation and then deflation financial and political power will be concentrated in the hands of the elite. Your children will find themselves poor and homeless in a land their forefathers conquered.
When grown men with skills are paid like they are teenagers with a summer job and the cheapest house is priced for doctors and lawyers I would say we have arrived at that wretched situation Thomas Jefferson warned of centuries ago.
We have been and are there!

#85 GregW, Oakville on 01.24.12 at 7:55 am

Hi Nastra, I’m so glade corporation now have rights like people. Did you see this story? I’m glade I’m not a rat. And I’m so glade BPA is still used to line our food cans! We humans are so smart!

“Monsanto’s Best-Selling Herbicide Roundup Linked to Infertility”
Researchers tested roundup on mature male rats at a concentration range between 1 and 10,000 parts per million (ppm), and found that within 1 to 48 hours of exposure, testicular cells of the mature rats were either damaged or killed. According to the study, even at a concentration of 1 ppm, the Roundup was able to affect the test subjects by decreasing their testosterone concentrations by as much as 35%.

#86 MoneyAndWealth on 01.24.12 at 8:12 am

The problem with renting a place for $1,400 when it is costing the owner $2,000/mo to carry is you know the owner will take action eventually and boot you out. Whether it be moving into the unit or selling it.

Is that your argument for buying? — Garth

#87 GTA Girl on 01.24.12 at 8:28 am

Waterloo Resident:

What a coincidence, I have a Lady Friend too!

She comes over once a month, makes me cranky, opinionated and bitchy.

Reading your posts makes me wonder if it’s the same gal…?

#88 Bigrider on 01.24.12 at 8:29 am

Well, at least the next issue(feb 2012) of Canadian Business magazine front page says what most of us here believe.

#89 Sky on 01.24.12 at 8:32 am

nonplused # 63 – FYI the Greek root for ‘ knowledge’ is NOT daemon. It’s gnosis.

Daemon definitely refers to the supernatural.

#90 Junius on 01.24.12 at 8:36 am

#78 Alan,

You said, “As for the rest of the blog dogs who think housing is or should correct enormously, you need to ask yourself why you would want to support such a proposition.”

You are confused, as usual. Your question presumes that we can will the correction or do anything to stop it. This is the fundamental error of most of pumpers like you and BPOE. You believe that somehow all of this is sustainable. Or that once hooked it is better to stay on heroin because of the pain of trying to break free of it.

They threw everything at the housing bubble to keep it going in the US and Australia. They have been lowering interest rates, bailing out banks and easing our way to unsustainable levels of sovereign debts for several years now. Now we have come to the endgame.

What you don’t ever want to acknowledge Alan is that the housing bubble was caused by a combination of a global credit explosion and fueled by foolish policies such as the CMHC rule relaxation. It was not build on gains in productivity and real wages.

Like everything that is unsustainable the bubble is bursting. You are correct that it will hurt all of us. Most of us bubble watchers have said that from the beginning. However anyone who understands the causes also knows that it is coming to an end whether we like it or not. And it will not end well. Foolish policies of the past have assured us of that.

#91 Junius on 01.24.12 at 8:43 am

#79 Canuck Abroad,

Not true. You can sue a realtor for misrepresentations, negligence, breach of contract. Realtors get sued all the time. The are also usually insured for lawsuits.

Standard agency agreements do their best to prevent lawsuits but they still happen all the time.

However you are quite right regarding the impact of the market on valuations. A realtor is not responsible for price changes and future market conditions.

Many of the realtors on this blog say “I guarantee prices will go up.” If that happens in real life get them to waive the exclusions in their contract and put it specifically in writing. Then see what happens.

#92 Gypsy Kid on 01.24.12 at 9:11 am

Cheap rates have been “opium” for the masses.

I hate to think what would happen when people have to continue “living” without the cheap borrowing rates they’re used to – especially the younger generation who seem to be dependent on the latest gadgets and gizmos – the must “haves” of today.

I’m tired of real estate. Can we talk investments instead? What REITS do you have in your portfolio?
I’m researching LEGACY and ALLIED.
Looking into either TD or Scotia Pref.

Someone asked why we should stay “liquid” and how this will benefit us. One story I have is a friend of mine who cashed in right before the crash of ’08 ; subsequently, he didnt lose anything, but made money from it eventually. I guess this is one benefit of staying liquid.
BUT my question is, do we have to worry about another “crash” anytime soon???

#93 jess on 01.24.12 at 9:38 am

#16 george

..”The round-tripping phenomenon is well-known in China, where Chinese investors put money into a Hong Kong or other location, and then send the money right back to China so it can claim subsidies not available to domestic Chinese companies.It’s entirely possible that U.S. citizens have done the same using the Cayman Islands…

Romney’s Cayman Explanations Don’t Tell the Whole Story


U.S. Senator Charles E. Grassley has just tabled legislation to call a halt to federal funding to charities that use offshore structures to avoid tax. This proposal apparently arises from the senior Republican’s investigations while on the Senate Finance Committee, during which he discovered that Boys and Girls Clubs held in excess of $50 million worth of equities and other assets in the Cayman, British Virgin Islands and Bermuda.

Requiring ownership information of all business entities, trusts, foundations and charities – information that indicates who actually controls these entities – be made available to law enforcement and the public;
Requiring country-by-country reporting by multi-national corporations of the sales made, profits earned and taxes paid in every jurisdiction where an entity operates;

Strengthening, standardizing and enforcing anti-money laundering laws; and
Eliminating loopholes in our tax system to make sure that the corporations that benefit from all of the resources, protections and markets in the United States pay their fair share of taxes.

#94 SKRenter on 01.24.12 at 9:49 am

Saskatchewan = booming economy, house prices soaring, no slow down here

Numbers came out that last year Saskatchewan was at the bottom of the pack for job growth, amongst all the provinces. In reality, i think our province has just been shuffling people around. Yeah we have a bit of an oil boom, but not hard to attract people who work at Superstore in Regina to oil patch jobs in Estevan, would be my guess. But maybe i’m wrong, maybe a house that 7 years ago cost $75k should be selling for $350k, maybe we are the land of plenty, oh wait, the analysts are warning of slowing commodity prices, forecasts of poor lentil showings next year…..not good. Wait, we keep touting that we have 9,000 jobs on saskjobs, well 8,000 of those jobs are mcjobss, we’ll import, no worries. I am just waiting for the retort to the above article from Royal Lepage, they’ll save the day and report that our fundamentals are solid. Wiat, the sales dude at best buy said my tv wouldn’t break, the fundamentals are good, but i should still buy the protection plan anyways. Is there something for housing, oh yeah, CMHC, thanks everyone for buying SK’s housing protection plan for us! Our economy missed or dismissed the need for hedging long time ago, but we like to think we are. Anyways, when this all implodes and we are down to signal flares to communicate amongst one another, where will the most efficient communication take place, you guessed, SK, flat baby flay, just like our job numbers.

Boom, Boom

#95 nickolaos vlittas on 01.24.12 at 9:59 am

Check this out, Ladies! It’s a documentary about the dirty underbelly of real estate in the US of A, post bubble.

If you think that you can outsmart real estate agents, banks, lawyers, politicians, etc., you need to write a book! Seriously, you’re a genius and you look great in khakis. I can publish your book too. Send me $4500 and we can get started on planning the book tour.

#96 disciple on 01.24.12 at 10:11 am

I want to put in an offer on a rental house, but one thing is holding me back. The house is listed for sale as well as for rent. I know exactly the price I am willing to pay and I want at least a two-year contract. Suppose I put in the offer and it is accepted… Can the owner/landlord kick me and my family out before the contract expires due to “family or such wanting to move in”? (You know the usual excuse when they have sold their home).

Am I mistaken? Does the landlord have to honour the contract? Or at least give me some notice?

#97 eaglebay - Parksville on 01.24.12 at 10:25 am

#64 a prairie dawg on 01.24.12 at 1:02 am
“Up to 68,000 jobs to vanish under federal public service spending cuts: report”
So what?
That’s still not enough. Most of those jobs are unproductive, useless and costly to the taxpayers.
It’s good to reduce the size of government and hopefully get rid of too much red tape.
Let’s get the government out of people’s lives.

#98 45north on 01.24.12 at 10:37 am

Peter Pan: I convinced my sister to sell the house. She and her contractor husband are going to sell after they complete the requisite granite counter-top additions and appliance upgrades. Better to leave the party early…

it’s too late to be early

#99 From Mississauga With Love on 01.24.12 at 10:37 am

A couple of postings ago you spoke about how one can reduce their tax burden by contributing to the wife’s RRSP (money paid into Spouse’s RRSP becomes hers after 3 years and then she can draw on it…).
Can one do the same trick with the wife’s RRSP with the wife’s money/income? We’re expecting this year so my wife is taking most of 2012 off. If I have her contribute a lot of money to her RRSP before the February deadline for the 2011 allotment (and any in arrears), would she then be able to draw on that money in 2012 at the lower tax rate?

She is self-employed, so she contributes to CPP but not EI. Would she then have to fill in any remaining CPP if we pull the above scheme off?

Short answer is yes. But if she is working a portion of 2012, plus collecting EI, the tax rate on RSP withdrawals may not be substantially reduced. — Garth

#100 eaglebay - Parksville on 01.24.12 at 10:44 am

#77 TheRealTruth on 01.24.12 at 3:40 am
“Garth: does the freefall in the Baltic dry Index mean anything? It’s at the March 2009 lows when the world was going to end.”
It means that we import less and export more. One way empty ships. This is caused by high transportation cost due to higher oil prices.
Therefore North America becomes more competitive and manufactures more of what it needs.
Export of lumber from BC is at an all time high. Same with other commodities.

#101 Sky on 01.24.12 at 10:45 am

@ The Thing in the Basement # 20 – “Not a world survey Garth, anglophone and HK only.”

Good to see someone picked up on that, Thing.

The mother of all housing bubbles is China. Vancouver and Toronto @ 10-12 X average income are bad enough when compared to historical norms of 3 X average income. BUT….compared to China….that’s a tiny little spit bubble.

Chinese average income/house price ratios are ASTRONOMICAL. Granted, there are millions of impoverished Chinese dragging down the income stats. But still!

Snippet: “The average current employment income in China is believed to be approximately $4,325 per year.”

@2010 average price for 1000 square foot residence in Beijing is $286,000.00 (US $)

Something which is rarely, if ever, discussed in our matrix media is the fact that Chinese citizens do NOT own the land which their buildings sit on. The peoples own ONLY the bricks and mortar. The Chinese state still owns all the land.

Interest rates in China:

It certainly doesn’t look like ZIRP led to this mess.

Comparisons with China are useless. Canada has 70% home ownership. China has less than 5%. — Garth

#102 Randy on 01.24.12 at 10:57 am

Your comments about the middle class and our education system are bang on….We now educate people “way beyond their level of intelligence”..Their real practical education may be coming in the near future….

#103 Stevenson on 01.24.12 at 11:00 am

So there will be and end of a rally “maybe”? Weather it flat lines or corrects 10%-15%. IN THE END RE prices have inflated ridiculously in the last few years and have proven to be a good investment if you had the balls a few years ago. Don’t listen to just one opinion, but next time when every else is telling you to jump, jump. Don’t miss the boat.

10-15% is next to nothing considering the appreciation. Just treat it as capital gain tax if that actually happens.

#104 Calgary's OK on 01.24.12 at 11:01 am

“that average families in cities like Toronto, Calgary and Vancouver cannot attain average homes on average incomes.”

Calgary has the lowest unemployment rate and the highest family income in the entire country. Property taxes are half the national average, sales tax on goods is %5 (no PST), no health care premiums. This is modern and diverse city where you can get a decent house for around $350K these days. What is it doing being stuffed between Toronto and Vancouver?

An accident of nature. — Garth

#105 disciple on 01.24.12 at 11:04 am

eaglebay – you have exports confused with manufacturing. Harper has us headed the way of a banana republic. We manufacture zip all.

#106 Sky on 01.24.12 at 11:10 am

“Comparisons with China are useless. Canada has 70% home ownership. China has less than 5%. — Garth”

Good point. I see what you’re getting at. However, 5% of Chinese population is a whole lot of people ( more than double Canada’s entire population).

Consider the fact that the home owners in China represent the upwardly mobile and I see big trouble.

Beijing housing comes in at a staggering 66 X average income. Of the cities listed ( 1st link in previous post) Guiyang is the cheapest at more than 14 X average income.

Canada /Australia/ USA must look like the land of milk ( minus Chinese melamine) and honey in comparison.

#107 poco on 01.24.12 at 11:20 am

#94disciple on 01.24.12 at 10:11 am –this has been hashed out on this site several times in the last little while–check out the link below for BC

What happens if the place I’m living in gets sold?

If the place you are living in is sold and you get a new landlord, the terms in your old agreement will stay the same. A new landlord cannot change the terms of the agreement that you signed with the previous landlord, nor can he make you sign a new agreement.

#108 BPOE on 01.24.12 at 11:22 am

Only a small percentage of buyers in BPOE have debt. Read Tsur Sommervilles comments. Buyers in BPOE cannot get loans they buy with CASH

#109 disciple on 01.24.12 at 11:40 am

List of confirmed future Target locations. Find out who owns the properties and invest away! You’re welcome.
Ajax, Durham Centre
Aurora, Aurora Shopping Centre
Brampton, Shoppers World Brampton
Brampton, Trinity Common
Burlington, Burlington Mall
Burlington, Millcroft Centre
Cambridge, Cambridge Centre
Fergus, Gates of Fergus
Guelph, Stone Road Mall
Hamilton, Centre Mall
Kawartha Lakes, Lindsay Square Mall
London Westmount, Westmount Shopping Centre
London, Masonville Place
Milton, Milton Mall Shopping Centre
Mississauga, Square One Shopping Centre
Newmarket, Upper Canada Mall
Orillia, Orillia Square Mall
Toronto, Centrepoint Mall
Toronto, Cloverdale Mall
Toronto, Shoppers World Danforth
Toronto, East York Town Centre
Waterdown, Flamborough Power Centre
Whitby, Taunton Road Power Centre
Windsor, Devonshire Mall

#110 Houman on 01.24.12 at 11:47 am

I need some advise,

I am 30 years old, work in IT and make around 150k a yea before taxes. My wife works full time and bring in around 40k a year.

We bought a house in Richmond hill from the builder in 2008 for 465k, 45 by 89 and 2600 sqf. They had a special release at the time because of the recession and that is why we bought. We put down 20% at the time and got a 5 year fixed at 3.5%. My remaining balance on the mtg is 289k and the house is worth 700k right now.

Here is my dilemma, we want to sell and move mid town to be closer to work. We tried buying a place last summer but every house we liked sold for 60-120k more than asking. They were all setup for multi offers. Right now my house costs me 1150 a month total. That is interest of the MTG payments plus property taxes. So we cannot justify renting.

I have been thinking about 3 options,
– rent our place out and rent something midtown
– sell our place and buy something midtown
– sell our place and buy something in US!!!

I will have over 400k selling the house and can easily buy a place cash in US.

I appreciate your feedback and thoughts.

#111 Mister Obvious on 01.24.12 at 11:50 am

#67 Timing is Everthing

“‘condo investor’—>Isn’t that an oxymoron?”

Nope. Nothing says you can’t be an investor who only loses money.

#112 Arse on 01.24.12 at 11:55 am

More Canadians making the switch from big banks to credit unions?

Are Canadians increasingly turning to credit unions as low-cost alternatives to the big banks? The results of one credit union’s national survey on the subject would suggest we are but perhaps that shouldn’t come as a shock.

The average Canadian has been with the same bank for more than 15 years, yet more than 40 per cent of those surveyed are unhappy with the service fees their bank charges them, according to the survey conducted by FirstOntario Credit Union.

#113 Kevin on 01.24.12 at 11:56 am


Saskatchewan witnessed slow job growth in 2011

“Saskatchewan appears to be having a “jobless boom” in which employment has grown by only 0.3 per cent in 2011 despite strong economic growth, record capital investment and other positive indicators, says Sask Trends Monitor.”

Saskatoon has fared worse.

From CIBC:
Saskatoon employment growth was negative from Q3 2009 to Q3 to 2010.

Saskatoon employment growth was negative from Q3 2010 to Q3 to 2011.

This was third worst in Canada for two consecutive years.

And average weekly wage growth was slower in Saskatoon than the rest of the province. Sept 2011 it was $853 in Saskatoon while the province averaged just over $900

Here is how the average weekly wage and average house price compare since Jan 2006.

The average Saskatoon house price has increased by about 111% from Jan 2006 to Sept 2011.
The average weekly wage has increased by about 27% from Jan 2006 to Sept 2011.

Just because politicians, business people and the media proclaim, ” Saskatoon is booming” does not mean it is actually happening.

To me, a boom is when employment growth is growing faster than the working population and wages are skyrocketing. Both have not happened in Saskatoon.

The biggest boom in this town is most likely credit.

#114 John Prine on 01.24.12 at 12:02 pm

#95 eagle bay Parksville.

We had to get our passports renewed at “Service Canada” last week in North Vancouver. If the government gets rid of any more workers we won’t be able to get anything done, huge building that handles all facets of government services with no workers left already. Lets not go too far overboard with the “get rid of government” thing . If these services were handed over to “for profit” contractors we all know what would happen. There would no service vs just slow service..

#115 Abitibi Doug on 01.24.12 at 12:05 pm

We can add another country to the list of where real estate prices are correcting, and that is China. If that’s true, it could slow the country’s economy, and present a good opportunity to buy resource stocks or funds, or Asia Pacific funds.

#116 The Dividend Yield Investor on 01.24.12 at 12:34 pm

#205 Roland on 01.23.12 at 8:41 pm
Most people in North America’s so-called “middle class” were never actually middle-class to begin with. They were merely a working class with unusually high wages, which enabled them to buy many of the things associated with the real middle class, e.g. higher education, foreign travel, private vehicles.

But as this unusually well-paid proletariat was exposed to post-Cold War global wage competition, their real wages fell.

Unfortunately, having convinced themselves that they were not working class, and having been constantly told by their political leaders that they were middle class, they tried to maintain that middle class status when they could no longer generate enough income to do so. How? They borrowed.

They went deep into debt rather than accept a visible decline in their social standing. Easy credit slowed their downfall, at the cost of making that downfall permanent.

Particular investment choices aren’t the big picture here. The bad investment choices are really just symptomatic. The real story is declining real wages and loss of progressivity in the tax structure which took place after the end of the Cold War.

Roland!! You nailed it!! You put steel onto the target with a bulls eye!!!!

This relates right back to the insanity of USA real estate bubble and now the Canadians. There are other factors in place to be sure, however that is a major component of the problem as described.

The attitude of “shop till you drop” is dead in the USA and will soon be coming to Canada.

Once again, GREAT POST!!!

The Dividend Yield Investor
Atlanta G.A.

P.S. Your last paragraph I’m not so sure what that has to do with the body of your post? Please clarify!!

#117 Timing is Everything on 01.24.12 at 12:36 pm

#94 disciple FYI

REASONS FOR THIS 2 MONTH NOTICE TO END THE TENANCY (put an “x” in all the boxes that apply)
– The rental unit will be occupied by the landlord or the landlord’s spouse or a close family member (father, mother, or child) of the landlord or the landlord’s spouse
– A family corporation owns the rental unit and it will be occupied by an individual who owns, or whose close family members own, all the voting shares
– All of the conditions for sale of the rental unit have been satisfied and the purchaser has asked the landlord, in writing, to give this Notice because the purchaser or a close family member intends in good faith to occupy the rental unit

There are more ‘reasons’…

How can a landlord end a tenancy? About half way down the page…

#118 disciple on 01.24.12 at 12:40 pm

Thanks, poco. I live in Ontario, so I found the following info below that would pertain to me and other Ontarian renters. Seems that the landlord must honour the contract terms, and can only break the lease if the tenant misbehaves.

“There are lots of ways the Landlord can terminate the tenancy – for cause or not for cause, either during or at the end of the fixed term. But one thing to keep in mind is that the Landlord can only terminate in accordance with the Act.

The Landlord can only end the tenancy AT THE END OF the fixed term for reasons like (but not limited to): the Landlord needs the rental unit to live in for themselves, their spouse, their parent, or child; the Landlord has entered into a purchase and sale agreement with a purchaser who requires the unit for residential occupation for themselves, their spouse, their parent or child; the Landlord needs to demolish the unit, convert it for a purpose other than residential premises or do major repairs (they have to be so extensive that they require a building permit and vacant possession of the unit); or the Tenant has persistently failed to pay rent on the day it becomes due and payable.

The Landlord can only end the tenancy DURING the fixed term for reasons like (but not limited to): the Tenant has failed to pay rent; the Tenant materially misrepresented their income; the Tenant or an occupant whom the Tenant permits to be there has committed an illegal act in the rental unit; the Tenant or an occupant whom the Tenant permits to be there has wilfully or negligently caused undue damage to the rental unit; the Tenant or an occupant whom the Tenant permits to be there has substantially interfered with the reasonable enjoyment of the residential complex for all usual purposes by the Landlord or another tenant; if the Tenant’s act or omission seriously impairs the safety of another person; or if the number of persons occupying the rental unit on a continuing basis contravenes health, safety or housing standards required by law.

If neither the Tenant or the Landlord terminate at the expiration of the term (in accordance with the Act), and the lease has not been renewed by either party, then the lease is DEEMED to have been renewed as a MONTHLY TENANCY agreement containing the same terms and conditions that are in the expired tenancy agreement: section 38.”

Why do home for sale ads often state “The tenant is willing to stay”? That is misleading because the tenant has the right to stay until the end of the lease term. Correct?

#119 Kilby on 01.24.12 at 12:46 pm

Just looked at 2 and 3 bedroom units for sale at the Aquattro, prices ranging from $459,000 to $689,000. The strata fees were between $418 to $688. These coupled with taxes would make for some pretty high monthly costs.

We have a 996 square foot 2 bedroom condo in downtown Victoria with two parking underground spots and gas for fireplace included Older but well cared for building near Oak Bay High, condo fees are $261 inclusive.

These new buildings with all the expensive common property features are going to have some astronomical fees as they get a bit older and start having complicated problems. Something to consider for future affordability

#120 Gregor Samsa on 01.24.12 at 12:47 pm

Why Housing (in the U.S.) is still unaffordable:

#121 Victoria on 01.24.12 at 1:36 pm

This is in Colwood ….


#122 Victoria on 01.24.12 at 1:38 pm

However they do say that RE keeps appreciating in Victoria so maybe it will be okay and not turn into some money loosing project :-).

Again sooooo many people are moving to Victoria it is going to be the next New York so they have to build in sleepy box store Colwood!

#123 Blacksheep on 01.24.12 at 1:43 pm

#77 TheRealTruth on 01.24.12 at 3:40 am
“Garth: does the freefall in the Baltic dry Index mean anything? It’s at the March 2009 lows when the world was going to end.
#98 Eaglebay,
“It means that we import less and export more. One way empty ships. This is caused by high transportation cost due to higher oil prices.
Therefore North America becomes more competitive and manufactures more of what it needs.”
“Most bulk dry cargo shipping criss-crosses the Pacific. Thus, the current low BDI indicates a major and sudden drop in industrial production in Asia, chiefly in China, down to one of its lowest point, about a tenth of what it was in 2008.”

“Since bulk dry cargo ships carry commodities used in semi finished products and industrial goods like cement and (coal-generated) power, the BDI is a forecasting tool of future economic activity.”


Logic dictates, an increased cost to ship, would have the affect of making domestic manufactures more competitive.
Unfortunately, I believe there are some dark factors at play the may prohibit a renaissance of manufacturing in North America, any time soon.

I also heard, they recently built more ships, forcing competition and prices lower.

take care,

#124 poco on 01.24.12 at 1:44 pm

#108Houman on 01.24.12 at 11:47 am
I need some advise,

No you need some MATH courses—figure it out

372k mortgage at 3.5% for 5yr fixed even at 40 year amm is over 1400k payment

with your figures you should go buy 2 properties

#125 Victor on 01.24.12 at 2:00 pm

#108 Houman

I have been thinking about 3 options,
– rent our place out and rent something midtown
– sell our place and buy something midtown
– sell our place and buy something in US!!!


There is a 4th option,
– sell your place out and rent something midtown
– invest the cash into preferreds, REITs, ETFs to help offset your rent and build wealth

#126 Arshes on 01.24.12 at 2:04 pm

Question, Garth. I live in Edmonton and noticed some of the condo developments built in last 5 years are being advertised in a Rental magazine, if there are a large amount of unsold condo’s and they get rented out, who isthe one renting them out? Is it the builders? The condo board? I know some are being rented out by owners, but what about the unsold ones?

#127 eaglebay - Parksville on 01.24.12 at 2:08 pm

#103 disciple on 01.24.12 at 11:04 am
“eaglebay – you have exports confused with manufacturing. Harper has us headed the way of a banana republic. We manufacture zip all.”

First, my post was about North America.
Second, Harper is doing fine. What are the options to replace Harper?
Believe it or not, there’s manufacturing in Western Canada. As for Debtario, who knows.

#128 Timing is Everything on 01.24.12 at 2:10 pm

#112 John Prine

#129 Junius on 01.24.12 at 2:11 pm

#106 BPOE,

You said, “Only a small percentage of buyers in BPOE have debt.”

One of your most ridiculous statements ever. Considering how many there have been that is really saying something.

Vancouver is the HELOC capital of the world and you know it.

#130 Kilby on 01.24.12 at 2:12 pm

#110 Arse.

We changed from a bank to a small independent credit union over 10 years ago. Service is better, less officious, higher interest rates if you have over $100K total in deposits but best part is “profit sharing” We get back anywhere from $300 to $600 per year every spring which covers all costs and then some. If you have a big mortgage or a lot of deposits you get a substantial amount back. best thing we ever did!

#131 Junius on 01.24.12 at 2:13 pm

#111 Kevin,

Thanks for the post and listing the facts. The “we are different here” and “things are booming here” rhetoric coming from the prairies has been deafening now for more than a year. However the stats don’t support it.

#132 eaglebay - Parksville on 01.24.12 at 2:14 pm

#104 Sky on 01.24.12 at 11:10 am

You’re still wrong.
3 million Chinese join the middle class every month.
The so called RE bubble in China will end in a soft landing. Prices will adjust as always and the demand for housing can only grow.

#133 eaglebay - Parksville on 01.24.12 at 2:19 pm

#107 disciple on 01.24.12 at 11:40 am
“List of confirmed future Target locations. Find out who owns the properties and invest away! You’re welcome.”
It doesn’t make any difference, they’re only replacing Zellers as tenants. The REITs are the same and only safer as an investment.

#134 City Slicker on 01.24.12 at 2:24 pm

#102 Calgary’s OK on 01.24.12 at 11:01 am “that average families in cities like Toronto, Calgary and Vancouver cannot attain average homes on average incomes.”

Calgary has the lowest unemployment rate and the highest family income in the entire country. Property taxes are half the national average, sales tax on goods is %5 (no PST), no health care premiums. This is modern and diverse city where you can get a decent house for around $350K these days. What is it doing being stuffed between Toronto and Vancouver?

An accident of nature. — Garth
Then why is Calgary the most indebited city in Canada?

#135 NorthOf49 on 01.24.12 at 2:34 pm

#108 Houman

Since you didn’t state what you’re basing the $700K resale estimate on, I suggest you speak to an agent and get some comparable solds in your neighbourhood. Finding out your house may only go for $500K – $600K may change your options.

#136 reasonfirst on 01.24.12 at 2:39 pm

#130 eaglebay – Parksville on 01.24.12 at 2:14 pm

“3 million Chinese join the middle class every month”

What is the definition of middle class in China and what is your source? genuine question….

#137 Sky on 01.24.12 at 2:41 pm

eaglebay # 130- “You’re still wrong.
3 million Chinese join the middle class every month.

Yes, China has an endless stream of people at the bottom of the pyramid (ponzi) who want to buy into 15-80 X av. income /housing costs. The mother lode of greater fools.

Can you see what’s wrong with this picture?

#138 Ryan on 01.24.12 at 2:42 pm

Hey Garth, I am renewing my mortgage on my residence. Do you think it would be wise to lock in at the 10 year fixed rate of 3.89%?

If you plan on staying for ten years, yes. — Garth

#139 Ret on 01.24.12 at 2:48 pm

#107 Target stores

The US Target stores that I have visited have a small fraction of the traffic that a Walmart store has. I don’t see Target as big news in retailing in Canada. They have the same merchandise as anyone else and the price points are slightly higher than much of their competition.

#140 John Prine on 01.24.12 at 2:48 pm

#126, Timing is everything.

Wasn’t complaining about the service, looked after everything just fine, I was just pointing out that the Federal government has already cut a lot of jobs and the “let’s git rid of the government” attitude may not be the answer to the world’s financial problems. The service was excellent, we just had to wait a lot to get it.

#141 jess on 01.24.12 at 3:13 pm

TMX Group Inc., TMX, is reaching much further, buying a significant stake in the Bermuda Stock ExchangeTMX, is reaching much further, buying a significant stake in the Bermuda Stock Exchange
…(BSX), a well-known, and highly controversial, tax shelter….“The BSX gained recognition as a Designated Stock Exchange under Canada’s Income Tax Act, effective October 31, 2011,” adds the TMX release PRIVATE
Source – Office for National Statistics uk

“This is the chart that struck me most forcibly, both for what it tells us about the debts of the private sector, in particular the private finance sector; but also because of what the Treasury chose not to tell us: that the public debt to GDP ratio is tiny compared to private sector debt to GDP ratio.” ANN PETTIFOR, DIRECTOR OF PRIME ECONOMICS


Monday, January 23, 2012

(photo: YNN-10 Now News) In yet another case of drinking water contamination in areas where energy companies have engaged in the controversial practice of hydraulic fracturing, or fracking, the U.S. Environmental Protection Agency (EPA) is supplying clean water to some residents of Dimock Township, Pennsylvania (pop.: 1,398), at taxpayer expense

#142 Liggsie on 01.24.12 at 3:14 pm

Any recommendations for a brokerage to buy REITs at? Are they available at Questrade, or only the big investment houses (TD Waterhouse, etc)?

#143 jess on 01.24.12 at 3:21 pm

load em up with debt take out your “super divy” and your management fees go bankrupt and stick the pension obilgations to the fdic sweet!

#144 pjwlk on 01.24.12 at 3:22 pm

#23 R C – “Today our agent was a little more pushy than usual over a 400k pile of junk that was clearly overpriced and a gut job. Maybe they’re all getting nervous?”
The idea for some Realtors is to spend the least amount of time and energy on you and for them to get you to buy as quickly as possible. The faster the mill runs the more money they make.

A few years ago I had a Realtor interested in selling my house who before discussing what she thought my home was worth, wanted to play a “game” of sorts to see how much (read how low) I would sell it for. Needless to say, I wasn’t impressed.

A few days later I had the good fortune to meet with another Realtor who in the end got me $45k more than I was asking. At the time that was an outstanding achievement.

A few weeks later Realtor #1 phoned to inquire when I would be listing. She was stunned when I told her I had already sold… LOL!

#145 Bill Gable on 01.24.12 at 3:30 pm

#107 Eagle Bay

Sorry to disagree – but I have a friend who sells RE in China and it is a DISASTER. There is NO SOFT LANDING.

The RE discounts in Shanghai and Guangdong are destroying the “grey market” lending, (*loan sharks) and the Banking system in China.

Watch out – because if China slows – our Commodity prices fall off a cliff and all that speck money will dry up.

Vancouver better wake up – the party is OVER.

#146 Junius on 01.24.12 at 3:51 pm

#130 Eagle-bay Parksville,

You said, “3 million Chinese join the middle class every month. The so called RE bubble in China will end in a soft landing. Prices will adjust as always and the demand for housing can only grow.”

What they call middle class and we call middle class are very different. We are talking about people making $3-5K per year being middle class.

How do you know the Chinese bubble will end in a soft landing? People like Jim Chanos who study and invest in China say otherwise. What is your opinion based upon?

The price adjustments will cause massive problems. Homes are priced so high over the middle class an adjustment could seriously damage the banking system. What do you know differently?

#147 45north on 01.24.12 at 4:21 pm

Houman: I have been thinking about 3 options

keep thinking Houman. How about the 1st criteria is that you post back here in a year? Which means that you have not been too badly beaten up.

#148 disciple on 01.24.12 at 4:28 pm

Remember: You read it here first:

The story that emerges is that two rival Korean royal houses, the Southern and Northern dynasties, have been struggling over control of both Japan and the Korean peninsula for hundreds of years. The Southern dynasty includes the current Japanese emperor and the secret rulers of South Korea. The Northern dynasty controls North Korea, Northern Japan and Okinawa and has powerful influence in mainland China.

The Southern dynasty has been the one pushing for a unification of Western Japan and South Korea with a new capital city in Osaka and is allied with the British Royal Family. The Northern group was working with the Nazis and the New World Order faction of George Bush Sr. and the Gnostics.

It is interesting to note that the Japanese imperial navy during World War 2 was allied with the Southern dynasty and the house of Windsor during WW2 even as the Japanese army in China was allied with the Northern regime and the Nazis. It was in fact remnants of the Japanese imperial army that set up the North Korean regime in cooperation with the gnostic Nazi Odessa group.

According to the information collated, the Northern faction is suing for peace and will settle for some sort of symbolic and ceremonial role for North Korea’s Kim Jong Un in a unified state. A Southern faction royal family member was open to this and informal negotiations could start within a couple of weeks. The end result may be a giant new global financial center being set up in the general vicinity of the ancient capital of Nara, South of Osaka.

#149 betamax on 01.24.12 at 4:44 pm

#142 Bill Gable: “I have a friend who sells RE in China and it is a DISASTER. There is NO SOFT LANDING.”

Correct. Sales volume is tanking, prices are crashing, and realty offices are closing. My wife’s relatives in China, who all own multiple dwellings, are worried sick.

#150 disciple on 01.24.12 at 4:46 pm

#136 Re(i)t… good observations, but none of that matters. Your sample size is 1 (yourself). The novelty for the consumer will wear off eventually but the initial splash is all that matters. And of course, the long-term leases and stable cash flow that follows is nothing to be ashamed of either. One thing you have to understand about business is that COMPETITION IS GOOD all around for both consumers and retailers alike.

And another thing to keep in mind is that this portends a trend of more US retailers foraying into the Canadian market. Not so much in chasing discretionary dollars, although that must be part of the reason, I think that there is a hidden agenda of moving assets out of the US, and a good way of doing this is through foreign capital expenditure and acquisition of cash cows. We see this with the Vanguard ETF’s. Speaking of Vanguard, I believe they will soon announce additional ETF offerings…

#151 lawboy on 01.24.12 at 5:01 pm

#116 disciple

You are correct, the lease continues under the same terms with the new owner once a property is sold.

If you are in a fixed term tenancy (ie the two year term you are hoping to sign), the new owners cannot evict you to occupy the unit themselves.

Once the term ends, and the tenancy is a month to month tenancy, they can do this. So when you see MLS listings stating that the tenant would ‘like to stay’ it is because they are in a month to month tenancy.

#152 Mixed Bag on 01.24.12 at 5:09 pm

SETH GODIN: If You’re An Average Worker, You’re Going Straight To The Bottom

“For 80 years, you got a job, you did what you were told and you retired,” says the former vice president of direct marketing at Yahoo! People are raised on this idea that if they pay their taxes and do what they’re told, there’s some kind of safety net, or pension plan that’s waiting for them. But the days when people were able to get above average pay for average work are over.

Read more:

#153 MoneyMyHoney on 01.24.12 at 5:27 pm

CHMC says it is still hot.
Realtors say it will only go up.
Bank mouthpieces say it is rock solid.
The govt. says there is no dysfunction and no medication is required.
The astrologer says it is a Dragon Listen to CBC @ time 5:14 minutes
Garth, the lone wolf keeps howling all night.
What is wrong Garth? Take TUMS and go to sleep.

#154 Devore on 01.24.12 at 5:52 pm

#66 Mister Obvious

No one has the power. There will always be bubbles. They’re an inescapable consequence of the human condition.

They can be greatly limited by the availability of credit. Bubbles will suck as much money as people can dump into them until they run out. If you only have available the money you saved up, the bubble will fizzle that much quicker, and you’re also going to be more careful parting with something you earned, as opposed to other people’s money.

#155 Al on 01.24.12 at 6:02 pm

Number of listings of SFH in the GTA is way down – makes for much higher sale prices this Spring.

Huh? — Garth

#156 Devore on 01.24.12 at 6:10 pm

#94 disciple

It varies province to province. Check your residential tenancy rules. In most cases, a lease cannot be broken (unless, of course, you trash the place, don’t pay rent, conduct illegal activities, etc), unless both parties agree to it. It’s a contract, but the contract is ruled by the provincial residential tenancy act.

#157 BC Bring Cash on 01.24.12 at 6:23 pm

The economic sanctions against Iran the Europeans and US are planning could possibly backfire. Iran is working out a deal with India and China to trade oil for gold and therefore bypass the $US. The US was not happy when Saddam Hussein suggested using the Euro as the currency to trade oil.

#158 maxx on 01.24.12 at 6:25 pm

#142 pjwlk on 01.24.12 at 3:22 pm

Good job! We had a very similar experience when we decided to sell our lakefront home a few years ago. We wanted a few quotes from realtors and the first agent we called (one of the top local ones) tried to pull a fast, albeit highly transparent one. Prior to knocking at the door for her appointment with us, she made a huge show of sauntering around the property, hands on hips, with the facial expression of someone who detected a bad smell. She gave us what we considered to be a ridiculously low assessment. We said nothing and told her we’d get back to her. The next agent quoted what we thought made sense, based on recent comparables in the area. In under 2 weeks, we sold and got $50K over what she had quoted. There is so much incredibly dishonest behaviour, much of it deployed in ways that can be covered up and wriggled out of. Realtors should be far more accountable than they currently are. There are, I suppose, some trustworthy realtors, but I for one will never, ever trust them. I got a close up when I took the course. Some of the stories I’ve heard from the horses’ mouths would curl your toes. Just smile, nod and move on with your own agenda.

#159 Devore on 01.24.12 at 6:35 pm

#115 Timing is Everything

This is semi-correct. When you are under fixed term tenancy (a lease in BC), as opposed to periodic (month to month), the landlord cannot end the tenancy until the term is over.

Which is why if you want a stable home, you get a lease, and renegotiate it well before it ends, so you always know where you stand. If your landlord won’t give you a new lease, and wants you month to month, you should start looking for a new place.

#160 SKRenter on 01.24.12 at 6:55 pm

Kevin, i thought what i wrote was fairly sarcastic and i agree with you 100%. Maybe i should work on my internet sarcasm. Or was that just sarcastic……..

Anyways here are some neat internet speaks, that i just made-up:

FMLIR – [email protected]&$ My Life I Rent (the homeowners love this)

YB2WHO – Yuppie B%$^ Who Worships Home Ownership

#161 Devore on 01.24.12 at 6:57 pm

Don’t be surprised to see Vancouver West average go up this month. This monstrosity sold for nearly $20,000,000, which, given the low volume, will have a disproportionate effect on average price.

#162 Kevin on 01.24.12 at 7:03 pm

No worries, I knew it was sarcastic. I believe you are one of a few who are allergic to koolaid. Good on ya!

#163 Nostradamus Le Mad Vlad on 01.24.12 at 7:15 pm

#61 Hoof – Hearted — Correct. The four western provinces, if it wasn’t so bloody cold, could quite easily hold 10 – 12 bln. Overpopulation, like GW is a cultish myth.

#66 Mister Obvious — “l enjoy being a member of the human race, stupid as we are.” — Fair summation. No one can fix stupid!

#164 Debtfree on 01.24.12 at 7:39 pm

Garth ever feel like no one is left in Ottawa that is on the side of us the people .

Every blessed day. — Garth

#165 Alister on 01.24.12 at 7:58 pm

#86 GTA Girl on 01.24.12 at 8:28 am

So you’re not in your 50’s yet, when your current friend will disappear and a new friend will come into you’re life. The new friend will run hot and cold and visit any time of day or night.

#166 Alister on 01.24.12 at 8:03 pm

#102 Calgary’s OK on 01.24.12 at 11:01 am “that average families in cities like Toronto, Calgary and Vancouver cannot attain average homes on average incomes.”

Calgary has the lowest unemployment rate and the highest family income in the entire country. Property taxes are half the national average, sales tax on goods is %5 (no PST), no health care premiums. This is modern and diverse city where you can get a decent house for around $350K these days. What is it doing being stuffed between Toronto and Vancouver?

An accident of nature. — Garth

And thats where Mr Van Horne put the railway station.

#167 Nostradamus Le Mad Vlad on 01.24.12 at 8:38 pm

UK Jamming Signals “That would suggest the attack on Iran is imminent. The push for sanctions has flopped. With the Asian Dollar Exclusion Zone set to buy Iran’s oil without using dollars, this latest war for Israel will destroy the already crippled American and European economies without actually harming Iran.”; Extortion from Austerity courtesy the IMF; Chinese supertankers hired for Iran’s oil, and EU – Iran Be interesting to see what the EU’s reaction to India paying its oil debts by gold is, Petrodollars Same reason why Iraq was invaded; Apple Outstanding profits, but they have a penchant for using slave labor in China; Banxter Settlements “$1800 compensation for having your home taken using deceptive tactics? I think the 750,000 Americans who got that deal ought to take that $1800 and buy an assault rifle with it.”; 2:19 clip Obomba, Congress and Wall St. use taxpayers to bail out Fannie and Freddie, and Gingrich receives US$1.6 mln. from Freddie; Gas Prices soaring “So of course telling Iran to shove their oil up their assets to please Israel makes a whole lot of sense right now.”; NAmerica after dark (not a pretty sight); Chinese steal too, plus other links; TARP pays more.

China, Russia, India and Iran Eroding US$; Schilling says global recession is here, so when does the depression happen? Soros warns of riots in the US (orchestrated by TPTB); The Auto Industry’s and Detroit’s decline; Banker adversaries “He wants to split up France’s largest banks.” In France, plus other links.
Fracking? Busted Bit Torrent sites at Fox, Sony and others; USAF “Maybe they broke the X-37B and it can’t get down!”; CFR Madmen Set them on a one-way trip to the sun; 5:01 clip Situation in Libya is going just fine, thanks to the UN – US – NATO – IMF, and Iraqi executions; VCR Thirty years ago, MPAA said the same things about VCRs; Forced Vaccinations on children in Maryland.

#168 NorthOf49 on 01.24.12 at 8:43 pm

Garth, glad you mentioned Florida. Just got back from Orlando. Stayed at a gated condo “resort” 15mins from Disney. Place was nice, big 3-bdrm condo with pool, clubhouse with three more pools and hot tub, restaurant. Couldn’t beat the price for 9 days, $750 Cdn. Each condo unit is owned by an investor and the resort company manages the rentals. When we arrived, the front-desk girl told us we had our pick of the units because the place was dead, and best bet was over by the “unoccupied units”. Wasn’t sure what she meant until we checked into our unit. Looking out from our balcony we could see that a third of the property was an entire ghost town of abandoned units, cut off from the rest of the resort by a “Berlin Wall” fence, presumably to keep out vandals and looky-loos, and to help with marketing. Here are some pics:

Looking west:

“Berlin Wall” and blocked access road:

Looking east, undeveloped land and blocked access road:

Apparently none of the abandoned units are for sale, they’re just in limbo of some sort. But ironically, the unit we were staying in and a bunch more in the occupied section were for sale at huge discounts from original price, 50% off for some units.

Final kicker, one morning I went out to the car and was stalked by two women from Quebec who had purchased three of the units some time ago, when times were good, but were now having trouble renting them out. They asked that if I ever came back to Orlando, that I would consider their units for private rental. I can’t say I was surprised by their sales job as there are hundreds, if not thousands, of resort-condo units for sale and rent all around Orlando. Something to think about if you plan on investing in FL real estate.

#169 Cookie Monster burnin' Kus on 01.24.12 at 8:46 pm

#161 Nostradamus Le Mad Vlad on 01.24.12 at 7:15 pm

#61 Hoof – Hearted — Correct. The four western provinces, if it wasn’t so bloody cold, could quite easily hold 10 – 12 bln. Overpopulation, like GW is a cultish myth.
I’m amazed at how many people dismiss global warming as false. On what basis?

Do you dispute the physics of the greenhouse effect and/or that the earth’s atmospheric CO2 levels are currently 380ppm versus 250ppm 100 years ago?

Le Mad, I know you like astronomy, look at this link on Venus.

I’d like to know how you are so sure that global warming is fake when the science tells me it’s real. Please enlighten oh great one.

#170 Ex-Cowtown on 01.24.12 at 8:47 pm

#75 Bast on 01.24.12 at 2:43 am

Have given up on buying RE in Cowtown. Am buying a Miata instead. Zoom, zoom.

Buy a 1987 Porsche 911 instead. Cheaper, more reliable, drive it for 5 years and sell it for more than you paid for it. Plus chix dig it more. A Miata is a girly car. (If you’re a girl, carry on… otherwise… meh)

#171 Calgary's OK on 01.24.12 at 8:52 pm

#132City Slicker on 01.24.12 at 2:24 pm

“Then why is Calgary the most indebited city in Canada?”

What kind of debt are we talking about here? Do you mean Calgary’s debt as municipality is high or you are picking at the personal debt level of Calgarians? Ether way, can you provide some sources please.

#172 eaglebay - Parksville on 01.24.12 at 9:00 pm

#144 Junius on 01.24.12 at 3:51 pm
“How do you know the Chinese bubble will end in a soft landing? People like Jim Chanos who study and invest in China say otherwise. What is your opinion based upon?”
I would rather listen to Jim Rogers instead of Jim Chanos.
Check out Jim Rogers on Google. He lives there and is a heavy investor in China. Much wealthier than Chanos.

#173 Pr on 01.24.12 at 9:20 pm

…Brother Carney..:“So there are risks there. We’re watching it closely. We’re working with our partners… –
To make sure we have many tricks left, to in debt you!

#174 I'll do anything for a listing on 01.24.12 at 9:22 pm

Breaking news from the the best place on ERTH.
Most expensive hotdog now in Vancouver!!!!
Not the worlds best, but the Guniness world record breaker.
Probably a realtor thought this up.

Anyway, back to my lonely thoughts about the Eurodebt hammer……

#175 The Dividend Yield Investor on 01.24.12 at 9:24 pm

#38 Smoking Man on 01.23.12 at 11:02 pm
#206 The Dividend Yield Investor on 01.23.12 at 8:58 pm
I see your point, and agree education is a must.

But you don’t see mine, you don’t need school for an education, good Google key words is all you need.


Smoking Man,

We are in agreement far more than you know. The traditional educational establishment needs a good kick in the a$$. The ways of educating oneself is becoming more and more diverse and that diversity is to be celebrated, unfortunately the powers that be still want to see credentials.

However, I have worked with MBA’s that didn’t know crap about business(and lazy) and a highly motivated high school grad who did. I’ve seen just the opposite where the High School grad didn’t know anything and the MBA was on top of his game.

As Mark Twain said, “Common sense is the most UNCOMMON of all traits” or something to that effect.

Yep, we seem to be more on the same page than we think possible.

Best Wishes,
The Dividend Yield Investor
Atlanta G.A.

#176 Smoking Man on 01.24.12 at 9:29 pm

My Book title:
The worstest self help book ever riten.

To be a success in business you need to develop a criminal mind. You won’t last with out one.

On the back:
If your’e a teacher put this book down, don’t open a single page, this content is dangourse to your self-estseam.

If you think having a degree and job that pays 100 k is success, Put this book down, anyone that has a job and has taxes taken of the top is a losser

If u like lotti out of starbucks amd are one of those, put this book down, I don’t want to sell it to you, I hate your type, don’t want or need your money. Don’t want to give you a real education. I hate you.

But if your scratching your head and saying I followed all the rules did what I was taught and told, got the degree, played the game, put the plastic on, got the job, and I still can’t make ends meet. I’m pissed Someones going to pay for my plight. This should not happen to me.

You should Buy this book.

and tough shit for you if I mix up There, Their and they’re once in a while.

This book is about real knowlage, and not erealevent grammer and speeling rules. Those skills are for job loving tax farm slaves.

This book is about becoming the master and have slaves, opps meant resources working for you.

By the Dyslexic Smoking Man

#177 eaglebay - Parksville on 01.24.12 at 9:36 pm

Some info on China.'s_Middle_Class.

Outside some of China’s big cities REs all is well.
They’ll also need billions of dollars to develop and improve their infrastructure.
Commodities will do well.

#178 Daisy Mae on 01.24.12 at 9:44 pm

EAGLEBAY: “Second, Harper is doing fine. What are the options to replace Harper?”


No, he’s not doing fine. But at the present time there are no options.

#179 I'll do anything for a listing on 01.24.12 at 9:45 pm

I forgot to mention, Tie in Enbridge pipeline & big ships never crash……
That is what they tell the people on the BC coast regarding the pipeline to China full of Bitumen.
So, the captain of that 500,000$ cruise liner, obviously was paid off by David Suzuki and first nations to crash that modern craft to raise fears that “big ships do crash”. World conspiracy I say!!!!
Big ships don’t crash…..

#180 Smoking Man on 01.24.12 at 9:53 pm

#173 The Dividend Yield Investor on 01.24.12 at 9:24 pm

Your right when I was kid desgined built and flew RC aircraft, even built the radio for heath kit. Could not read well, but learned much from images and pic’s.
Got my pilots license at 19

After 10 years as a rivit bucker, desided that I wanted to own slaves and started a mfg company.

After a few years of that got board, discovered the PC learnd to program.
I’m the second best in the world. Guy thats the best, he thinks he’s the worsed.

The programing got me on trade floors where I learned to trade, my success is off the chart. Little old batman thing that anyone can do.

An I discoverd that by fluke. I was wasted and started seeing images of batman on the screen when ever there was a trend reversal. Dyslexia has it’s advantages.

I do get a kick knowing that all the harverd phd grads never had a modle that predicated the obvious, big melt down in the usa. They must have been reading the same text book.

See those VIX way down right now. Time to make a move.

#181 Smoking Man on 01.24.12 at 9:56 pm

#173 The Dividend Yield Investor on 01.24.12 at 9:24 pm

We are in agreement far more than you know. The traditional educational establishment needs a good kick in the a$$. The ways of educating oneself is becoming more and more diverse and that diversity is to be celebrated, unfortunately the powers that be still want to see credentials.

Those credicials mean, your prospective slave graduated obidance traing, your client list is safe..

#182 bill on 01.24.12 at 9:58 pm

159 Devore on 01.24.12 at 6:57 pm

that whole cliff area is made up of compressed sand.that could be interesting if it liquified during an earthquake. nice view though.

#183 Smoking Man on 01.24.12 at 10:07 pm

Mark Twain I hear referance to him alot, never read his book,

I will wiki him now

#184 The Dividend Yield Investor on 01.24.12 at 10:45 pm

#108 Houman on 01.24.12 at 11:47 am
I need some advise,

I am 30 years old, work in IT and make around 150k a yea before taxes. My wife works full time and bring in around 40k a year.

Dear #108,

Please bear with me when I ask you this question? When it comes to true wealth do you want to be someone who is really wealthy or the pretend version??

This question is not as silly as you think, I can’t tell you how many folks here in Georgia that played that game of the fake rich guy. Plenty of debt, or an expression in the personal finance language, “looking good but going nowhere fast.” They were a train wreck awaiting and the wait wasn’t long.

Your house question: SELL, SELL, SELL!!

Take your 400,000 gain and buy income producing assets, such as those that have been mention by Garth on his blog. If you have experience at rental properties or a HIGH desire to get into the game, then look at areas of the USA that have been hit hard. Miami and Las Vegas are two that come to mind.

With a combined income close to 200,000 per year, let me make an outrages proposal. Assuming you are not going the rental route, take your 400,000 gain minus the tax load and purchase income producing assets as prescribe by Garth.

Here is the outrageous idea; move your standard of living down to the 60,000 level and invest the rest of your combined pay into income producing assets. Your friends and relatives will think you have fallen on hard times or that you are crazy. Crazy like a fox!

Begin to move up your living standard only as the income increases from your investments. Your long term goal is to have ALL of your income going into investments. After about 7 years from now your relative-friends will not think you are crazy but an astute businessman. What a turn of events and this is from my personal experience!

Your personal financial career is to convert your earned income into interest, dividends, rental and royalty income as quickly and efficiently as possible.

Hope this helps.

The Dividend Yield Investor
Atlanta G.A.

#185 Trial by Fire on 01.25.12 at 12:28 am

Hi Garth,
Been a long time reader, and have been tempted to post for a while. I’ve been a savvy renter most of my life. I DID almost buy in 2010- had a bid accepted and the paperwork was signed.
I was somehow spared from making a purchase, due to a number of blunders. In short, 7 months after signing, the house was taken off the market to, um, ‘fix the legal issues’. The city and 2 of our blessed big banks pretty much wiped their asses with the pertinent paperwork and flushed it, from what my lawyer could tell. Let’s just say that no one could prove that the lot actually existed. To make things easier, though, once it was proven whether or not it existed, it was still uncertain as to whom had juristiction. Fun stuff.
It ended up being such a tangled web that I escaped unscathed. I still love that little house…
Anyhoo- In spite of me having $35,000 for a downpayment, the local gov’t here was more than willing to provide me an additional $12,000 to buy a new home, as of 2011- I think the catch was that I had to stay in the house or not sell for 20 years- not sure- I promptly shredded it, anyways. The [email protected] ( @ the government), was not so nice when I told her that I wasn’t interested. LOL. I was polite about it, too… I think she mentioned that she was angry because I hadn’t notified her one way or the other- because of my hedging ‘ other families had missed their opportunity’. Bummer.
BTW- For all Realtor-haters out there- I had a kick ass agent. I was not obligated to sign anything to have him represent me. Furthermore, the lawyer that he recommended did not charge me a penny for the 60+ hours that she spent in calling the city, the banks, the land registry. She actually called me, very upset, when she couldn’t resolve the issue for me.
There are wonderful people in every profession, just as there are useless, careless idiots in every profession. Choose wisely.

#186 Yoda on 01.25.12 at 1:08 pm

[email protected]

Your meds adjusting needed are.

#187 Junius on 01.25.12 at 10:18 pm

From my pet Monkey, Mr. Junius Junior.

Further EVIDENCE of the meltdown in Vancouver.

It’s real, and it’s coming to a theatre near you.

#188 disciple on 01.25.12 at 10:19 pm

Yoda… I’m not on medication. But you may need some once you find out that JonBenet Ramsey, Amy Winehouse, and Lady Gaga are the same person!

#189 nonplused on 01.26.12 at 1:02 am

#88 Sky

Ok, but at least you will admit in the original they were helpful spirits, not evil. Knowledge and “smart” is a helpful spirit, and some writers interchanged the 2 not having a scientific basis for where it came from.