Why we do it

Cristina’s got the money to buy a million-dollar house, but enough brains not to. Especially like this. Real estate’s in the groupie stage, she says, with ample evidence people have just lost it.

Days ago she received her ‘personal invitation’ to the opening of a new phase of Vaughan Valley Estates, a subdivision of McMansions in exurban Toronto where a giant house on a 50-foot lot starts at $770,000, and averages $1.1 million. But there are tons of pot lights. It opens to the public next weekend but Cristina says, “I won’t be there.”

“Last year I attended the opening for phase 2 in June, an event to which I also received an invitation from pre-registration. Upon my arrival I was asked to wait outside the sales office with a mob of at least 100 other guests and take a number for entry. I left. I was surprised that the others took their number and waited, and moreover that the estate homes were soon successfully sold out.

“How in the world does one buy a million dollar-plus property under those circumstances? One would think they were giving away the million dollar estate homes. If one hasn’t experienced one of these scenes first-hand, one would never believe it. It’s a year later, and the buying frenzy will likely be even more intense. Incredible.”

Indeed, Cristina. There’s no better indicator of a market top than when everybody believes there is no top. That’s when buyers turn into groupies, due diligence is dumped, and a herd mentality elbows out independent thought. I don’t need to tell you what comes next.

As you know from this pathetic blog, flash mob buying, bidding wars, condo riots and purposefully degrading queues are now de rigeur. We saw that two months ago in another near-tundra part of the GTA when horny purchasers camped out for two winter nights for the right to assault a sales centre in Richmond Hill. We witnessed it this past weekend at Marine Gateway in Vancouver, where 11,000 people registered to buy 418 condos at Manhattan prices near a waste disposal facility not far from the Vancouver airport. They sold in 200 minutes after a crowd slammed the place Saturday morning at nine.

By the way, those units will not be ready for occupancy until 2015, when interest rates will be far higher and household debt loads withering. But, of course, prices will be soaring then. That’s exactly why all those smart speckers and astute, experienced investors lined up like heifers.

One of them was Stephen Tse. When he got through the doors there was just one runt condo remaining. “When you have only one unit left,” he said, “you either take it or leave it.” He bought in five minutes, spending a little over four hundred thousand.

Meanwhile the country’s largest housing market is hosting some of the bloodiest fighting.

Of course you know about the Chinese university student babe who bought that Willowdale bung for $421,000 more than the seller wanted. But the bidding wars have little to do with foreign money, and everything to do with buyer desperation. In the last five weeks, multiple offers have become the norm, especially since gluttonous realtors and their voracious clients engineer them by listing properties below comparables. Some of this has to do with a limited supply of properties on the market – since there are far fewer listings in Toronto right now than in little Vancouver.

But there are two other factors at play. One, borrowed money has lost its value. With the return of the 2.99 Special, buyers are willing to tack an extra $50,000 or $75,000 (or $421,000) onto their mortgage, since the bump in monthly carrying cost is weensy. The temptation to overextend is overwhelming. Of course, completely lost is the reality that this steaming pile of money has to be repaid, and with heaps more interest added. So if rates rise, it’s debtageddon.

Second, there’s a growing sense among the chattering classes that this window of opportunity is closing. The more bubble stories the MSM carries, the more F knits and vexes and the more economists fret, the more people fear change. If interest rates do pop next year, or the feds trash the 30-year mortgage, for example, won’t housing be even less affordable? If the people in the condo queue can only afford to buy with a 3% rate and a 30-year am, how can they cope at 5% over 25?

But lost as well is the realization what when money grows more expensive and regulations tighten, houses prices will fall along with affordability. Anybody with a calculator can tell you that less debt at a higher rate beats fat and cheap, ten times out of ten. Ironically, those people paying a premium in a bidding war for fear they’ll be priced out could end up owning real estate worth less, and mortgage debt costing more. Death by house.

Realtors come on this blog about every hour now to post the same thing. I delete the comments as they add nothing. Besides, they’re boring: “Garth, I am growing your beard waiting for this terrible “correction and slow melt” hypothesis of yours to materialize in the GTA. The numbers never lie Garth. If people listen to your advice, they continue to miss appreciation and low interest rates. I hope no one bases the most important purchase of their life on Garth’s predictions that are proven wrong month after month after month . . .”

It’s the common wisdom. The reason people degrade themselves lining up. Why they buy in five minutes. Why they offer more than the price. Why they embrace obese debt. Why they panic.

I look at higher prices and see risk. They gaze, and see the future.

One of us is wrong.


#1 TurnerNation on 03.18.12 at 7:01 pm


#2 Sticky on 03.18.12 at 7:06 pm


#3 Don on 03.18.12 at 7:07 pm

I am an agent (no eggs please)
There is no doubt this will not end well.

#4 Van guy on 03.18.12 at 7:11 pm

You should post those realtor comments. They add some humor to this blog since DA is banned.

#5 Van guy on 03.18.12 at 7:11 pm

#242 John G. Young on 03.18.12 at 1:24 pm
#56 Van guy

“That gay mofo is a liar, and if BPOE wants to listen to him, maybe he’s gay too.”

The only “mofo” I see here is Van guy.

Yes. Did your mom tell you that?

#6 TaxHaven on 03.18.12 at 7:18 pm

I’m curious why you think interest rates will rise anytime soon.

Look at the States: continual government debt and massive spending are financed by bond sales. These bonds are then bought by the continually-bailed out commercial banks and Primary Dealers. Who are in turn permanently zombified, subsidized with and recapitalized with this created money for which they pay next-to-nothing yet reap bond sales spread profits and some piddly coupon. Round and round it goes, sometimes with foreign central banks doing the buying.

Bernanke has guaranteed tht the scheme will run at least until 2014. If the economic crisis worsens, or even continues, look for MORE free money.

I don’t think Canada will do any differently. But is it real money?

The US has low rates because it needs to encourage consumer borrowing. Canada has the opposite problem, and the BoC will seize any opportunity to curb the credit bubble. Rates will rise sooner then most believe, or are prepared for. — Garth

#7 Mark on 03.18.12 at 7:19 pm


#8 Stop with that on 03.18.12 at 7:19 pm

Who are these first callers?

#9 gmc on 03.18.12 at 7:20 pm

Too much I am in Awe I read about it but can’t believe I am witnessing it All I can say is stop and read
You think what is happening is new!!!!! we are different YIKESSS

#10 not 1st on 03.18.12 at 7:23 pm

If this was 2007 in the run up on the first leg of the bubble I could see these line ups still happening, but the fact that its 2012 and people have seen both the stock market and RE in the U.S.A/Europe crash in 2008 and now a recent sovereign default (greece), I am simply amazed that these still happen. Our ability to suspend disbelief is amazing.

All I can say now is watch out for more trouble in europe and now add in japan. On top of that China will slow, there is no doubt about it.

#11 Renting in Vic on 03.18.12 at 7:27 pm

Garth, if you are willing to censor the realtors, could you please also delete all the FFFFIIIIRRRSSSSTTT posts? At least the realtors would add some humour value. The others are a waste of bits (and oxygen).

#12 Sticky on 03.18.12 at 7:28 pm

Near transit is good. Worth at least double per SF.

Lyle Lanley: Well, sir, there’s nothing on earth Like a genuine, Bona fide, Electrified, Six-car Monorail! What’d I say?
Ned Flanders: Monorail!
Lyle Lanley: What’s it called?
Patty & Selma: Monorail!
Lyle Lanley: That’s right! Monorail! [crowd chants `Monorail’ ]
Miss Hoover: I hear those things are awfully loud…
Lyle Lanley: It glides as softly as a cloud.
Apu: Is there a chance the track could bend?
Lyle Lanley: not on your life my Hindu friend,
Chief Wiggum: The ring came of my pudding can
Lyle Lanley: Lend my pen-knife my good man,
I swear its springfields only choice, throw up your hands and raise your voice
Everyone: Monorail, Monorail, MONORAILLLL!
Homer: Mono….D’oh!

#13 Stinky Cheese McGoo on 03.18.12 at 7:29 pm

Lol! More than $700k for a 50′ lot? Those things better come with gold-plated everything..

#14 Sebee on 03.18.12 at 7:38 pm

Are RE agents worse than used car salesmen?

#15 JohnG on 03.18.12 at 7:42 pm

Hope the link works…the economist runs a bit about squirrel, with pic!


If not, then what is the strategy for those already in the market? I have a house, but need a bigger one. If I buy now I pay the peak price, but I also get the peak price. If I wait, no doubt prices come down, but so will the value of mine. Does it make a difference? Renting is an option, but I’ve been waiting/watching for a good rental for at least one year. So far I’ve had to burn 3 pairs socks because of how filthy the “executive rental” houses were. I have kids so schools are an issue, I want to be close and plan out jr and high school carefully, as well as proximity to University (ideally I don’t want to move again for a long time).

Can I sell on the condition I get to rent for 2-3 years? Or could I sell with a 2 year out possession date?

I want to make sure I’ve examined every possible option.


#16 Mikey the Realtor on 03.18.12 at 7:44 pm

“There’s no better indicator of a market top than when everybody believes there is no top”

you have been talking about this phenomenal top for years, yet you have been so wrong it hurts. I have to say, you are one stubborn mofo who just can’t see the light.

#17 Hocus Pocus on 03.18.12 at 7:50 pm

Hey Garth,

Your banned in the U.S. Can’t post your link on


I am banned in all the best places. — Garth

#18 Paully on 03.18.12 at 7:54 pm

We had multiple offers on our Willowdale condo, and we listed it for a higher amount than any other previous sale in the complex. So even without a crazy below-market listing, things can get a bit wild!

This neighbourhood is totally whacked! I have watched a number of local listings that back onto the 401 get bought in a week with multiple offers! Really, bidding wars on sixty-year-old houses that back onto the 401? That is beyond crazy to me. I just don’t understand it.

#19 Losing faith on 03.18.12 at 7:54 pm

I hear agents are preparing to list their million dollar homes ASAP. Cutting back on expenses…. What do these agents know that we don’t kn

#20 Nostradamus Le Mad Vlad on 03.18.12 at 7:55 pm

“Why we do it, with ample evidence people have just lost it.” — Sums it up nicely!

“So if rates rise, it’s debtageddon. Death by house. That’s exactly why all those smart speckers and astute, experienced investors lined up like heifers. They sold in 200 minutes after a crowd slammed the place Saturday morning at nine.” — Lambs to the slaughter, and in 2015 a bunch of us boomers move out of the workforce and onto retirement, except C – F – H should be close to bankrupting the country by then, so we will be another Greece.
#6 TaxHaven — Hi TaxHaven. A few nights back, some US financier (forgotten who) said that rates may go up in 2013. Guess we’ll wait and see.
De-dollarization Not sure what this has to do with Iran; Trojan Horse is another name for Obomba in leading the banxters, and pic; Stress Tests All is well / not well; Iran – Pakistan Trade rises, despite US sanctions; St. Patrick and signs; China to ensure Iran’s oil goes through.
4:50 clip New Ron Paul ad destroys Romney and Obomba; T and T Tennessee joining Texas in fight against Agenda 21; Obomba’s E.O. Sad day for America; Obomba “The Exec.Order allows the nationalization of pretty much the entire USA even in peacetime if he desires.” Incl. is a re-institution of the draft, and 11:32 clip More booga booga. Goes with Obomba’s new E.O. that brings in a draft; 11:46 clip Any attack on Iran would force it to hold nukes, just like Israel; Collected Personal Data will always be used against citizens; London, Ont. Some are taking action; About a nickel Indian call centres selling CC info; Iran Where’s the nukes? Show me the money; Fracking Pennsylvania gags docs.

#21 Losing faith on 03.18.12 at 7:56 pm

Oops. Wondering what the selling agents know that we don’t know. Where will they live, will they rent??? Also the bank lenders are recommending that their speculator clients grab their profits and run. Interesting changes around!

#22 Sally Tucker on 03.18.12 at 7:56 pm

Gateway: that is one stinky area in the heat, not to mention the noisy skytrain station and canned announcements. Ya! Great value suckers!!!

#23 Just Say No on 03.18.12 at 7:58 pm

Minimum wage job with 40 hours in the same week? For many it is a reason to sing! Finding love is a challenge…..but who cares about that? Buying Expensive sleeping places, that you wait years to get? It is what matters most today….I need to laugh> http://www.youtube.com/watch?v=akZ-edeKDXs

#24 Losing faith on 03.18.12 at 7:58 pm

The agents are still promoting these line up sales, but they are not drinking the look aid for themselves. I really think the agents are really feeling the financial pinch from the low sales numbers.

#25 Losing faith on 03.18.12 at 7:59 pm

Super excited to see the march mid month sales numbers :)

#26 zeeman on 03.18.12 at 8:02 pm

i am seeing the craziness in most of york region….it never stops….what i dont understand why people ignore govt warning signs..if F does not change the mortgage rules then he will loose credibility and the market will shoot up even higher….i am not sure what is holding him back….

#27 Chaddywack on 03.18.12 at 8:05 pm

I really hate this new trend of Realtors pricing well below asking to generate multiple bids…..but I don’t see why they wouldn’t do anything else? The only risk I can see to that is say you list a house that’s worth $700k at $450k that you only get one bid at $450k.

The interesting part is that you are not legally obliged to sell it at $450k (at least that’s what the Realtor told me….) so really there is actually no risk is there?

Anyone have thoughts on this? I always wondered what would happen if someone made an unconditional offer exactly at the well below market asking price and it was refused by the seller. Could they go to court to have the contract enforced?

#28 5300 Units!!! on 03.18.12 at 8:17 pm


5300 new residential units along the train line?

Just what Vancouver needs!

#29 Hocus Pocus on 03.18.12 at 8:18 pm


Ya I wanted to make a post….

Remember the housing bubble?

Does this bring back any stupid memories


…. deleted in a nano second

#30 Willy H on 03.18.12 at 8:19 pm

I have been driving by this Vaughan Valley Estates subdivision of McMansions for several years. The folks buying these homes are drunk on home equity, they have purchased homes 5-10 years ago in Woodbridge, Richmond Hill, Aurora etc.. and they have decided to use their newly acquired home equity to finance one of these granite laden faux mansions. Many still owe $100-$250K on their existing home (which are valued at $500K-$700K+) and they simply want to trade up to a $1M+ prestige home. They believe they have won the lottery.

The property taxes, maintenance, and debt servicing costs are trivialities to these folks. They focus instead on the adjoining clublinks golf course, packs of BMW’s racing up and down Highway 27 and the fine Italian dining only few kilometres away in Fantinoland!

The fact that they now own a home that has the potential to price correct much more severely than the more modest home they have just given up, is not even on the radar.

Next stop, the nearest BMW or Mercedes dealership. After all, a $1M McMansion just doesn’t look right with a Equinox in the driveway!

Spring is in the air, leverage, leverage everywhere!

#31 John G. Young on 03.18.12 at 8:25 pm

#5 Van guy

“Yes. Did your mom tell you that?”

No, GLAAD did.

#32 NFN_NLN on 03.18.12 at 8:29 pm

#28 Chaddywack on 03.18.12 at 8:05 pm

Anyone have thoughts on this? I always wondered what would happen if someone made an unconditional offer exactly at the well below market asking price and it was refused by the seller. Could they go to court to have the contract enforced?

I would like the answer to this too. I know the answer in the US first hand – it’s PFO.

#33 cto on 03.18.12 at 8:32 pm

What the hell is wronge with F!!!!! He is a conservative. He should know the fate of his actions! This man needs to come clean and do what is hard, but right!!! Do you think he will do anything. or will he let this ship slide into the sea like that captain of the Costa Concordia!

He used to be a Conservative. — Garth

#34 Daisy Mae on 03.18.12 at 8:34 pm

“….I hope no one bases the most important purchase of their life on Garth’s predictions that are proven wrong month after month after month . . .”


What ARE these realtors talking about? We can SEE it happening….slowly…..steadily. The situation is getting more desperate each day. Talk about realtor desperation.

#35 TurnerNation on 03.18.12 at 8:34 pm

Ouch – more on today’s Winnipeg layoffs. Many USA airlines already outsouce heavy maintainance to South America. This will not end well?
Aveos Fleet Performance Inc., which maintains many of Air Canada’s aircraft, shut down its plants on Sunday, locking out about 2,400 workers and telling them not to return to work.

The majority of the affected employees — about 1,800 — are based in Montreal, while 350 are in Winnipeg and 250 are in Vancouver, says the International Association of Machinists and Aerospace Workers.

Aveos posted a sign on the door of its Winnipeg plant on Sunday, stating, “We regret to advise you that effective immediately, Aveos Fleet Performance Inc. has ceased the operation of airframe maintenance.”

Union officials in Vancouver confirmed that employees at the Aveos plant there were told to go home and leave all their equipment and personal items behind.
Lorne Hammerberg, president of the union local in Winnipeg, told CBC News he fears total job losses at Aveos, as there had been no talk of restructuring the company.

Aveos was Air Canada’s maintenance division until it became an independent company in October 2007. It has been doing all of the heavy equipment maintenance for the airline’s Airbus and Embraer fleet, Hammerberg said.

#36 les on 03.18.12 at 8:37 pm

We are in an unprecedented period of ‘over consumption’

Real estate is just one component of this.

All greatly augmented by low interest rates and easy credit.

Your blog deserves a public service award.

#37 Daisy Mae on 03.18.12 at 8:39 pm

TaxHaven on 03.18.12 at 7:18 pm
“I’m curious why you think interest rates will rise anytime soon.”


Rates are bound to rise. Eventually. But it’ll be very slowly. We’re walking a tightrope…

#38 Debt's Dark Embrace on 03.18.12 at 8:47 pm


Here’s what $75,000.00 Canadian gets you in Talisay, a suburb of Cebu City where I live. You can get it for less if you pay cash and dicker. Modern hospitals are nearby with many US trained doctors. You can book a visit with a specialist and get an appointment the same day. Cost is $9.00 Can. Ask me how I know. International schools are nearby, many Chinese and Korean students come here to study English. A flight from HK to Cebu takes two and a half hours and costs $80.00 Can. Lots of Chinese and Koreans coming here every day. And I am seeing more and more Westerners all the time. And it’s always sunny here.

#39 $$$BPOE$$$ on 03.18.12 at 8:48 pm

The sale of these condos are based on solid fundamentals. These condos are being bought by those with cash who contribute to our economy. These investors couldn’t give a hoot anout higher rates or lower terms

#40 Daisy Mae on 03.18.12 at 8:48 pm

Hocus Pocus on 03.18.12 at 7:50 pm
Hey Garth,

Your banned in the U.S. Can’t post your link on

I am banned in all the best places. — Garth



Could be….”Because you (Yahoo) can’t handle the truth!”

Who said that — Jack Nicholson?

#41 $$$BPOE$$$ on 03.18.12 at 8:50 pm

You should travel more. The air is pristine clean and the sound minimal compared to living in say Hong Kong
22Sally Tucker on 03.18.12 at 7:56 pm
Gateway: that is one stinky area in the heat, not to mention the noisy skytrain station and canned announcements. Ya! Great value suckers!!!

#42 Stuck on the Island on 03.18.12 at 8:50 pm

Our realtor held an open house this morning to coincide with our recent price reduction and we had absolutely zero lookers this time. The first time we have been skunked for an open house.

Real estate is quickly crashing here on Vancouver Island. No doubt about it.

It was even a half decent day out there.

#43 Pr on 03.18.12 at 8:55 pm

…Realtors come on this blog about…I am one realtors and i am one your side. Sadly, I see many of my colleague completely clueless about realestate and economics. So I am not surprise about your comments you received.

#44 Jsan on 03.18.12 at 8:57 pm

Seriously, as usual, GlobalTV does their sales pitch disguised as a news story.

I complained to the Canadian Broadcast Standards Council about GlobalTV and their so called “news stories” here in Edmonton a couple of years ago. The story was a typical one about the huge lineups waiting to buy a condo and “all of the excitement” surrounding the new condo.

1.) Why after the 100th time happening is this still a news story?
2.) How would they know about the lineup on a Saturday morning unless they had pre planned to be there to cover the condo opening?
3.) Why do their “lineup” stories spend so much time talking about the units and their amenities?

The answer to all of the above questions, BECAUSE IT IS NOT A NEWS STORY, IT IS AN ADVERTISEMENT that GlobalTV disguises as a news story.

I submitted a complaint about GlobalTV and their so called “news stories”. It’s easy, just fill out the form below. Not much comes of it but I did get a response letter from Global TV’s regional Director so they are aware that people are complaining and we need to keep the complaints rolling in.



#45 Nemesis on 03.18.12 at 8:59 pm

“The US has low rates because it needs to encourage consumer borrowing.” – Hon. GT

Silly me. I thought it was because UncleSam was a tad concerned about making the ‘vig’ on his borrowings… ;)

Silly you. — Garth

#46 Losing faith on 03.18.12 at 9:00 pm

#28.. I’ve done that two mil listed for one… There is no law outlawing them not accepting not only an offer at list price, they don’t even have to honor an offer over list price. Realtors only protect themselves :(

#47 Canadian Watchdog on 03.18.12 at 9:01 pm

#35 cto

What could F (or Carney) possibly do when every solution has a negative reaction that will send the economy deeper into recession? You’re asking a man (and his party) to commit political suicide—that doesn’t sit well with the corporate interest behind them.

#48 Jenna on 03.18.12 at 9:04 pm

Why is there such a low supply of housing for sale in toronto?

How much of drop do you think leaside will take?

#49 allister on 03.18.12 at 9:08 pm

First, I live 3 hours from TO and I cannot believe the stuff I read about whats happening there. Complete insanity and the madness of crowds!

Second, a person spending a million dollars should be treated to a limo pick up and leather chair with drink in hand. But of course these people are using the banks money so there is no respect for the mil., just the thrill of the hunt.

Third, stand in line, in the cold, with a number? If everyone got real and just walked away like wise Cristina, some sanity would return.

#50 The Patient on 03.18.12 at 9:10 pm

“The US has low rates because it needs to encourage consumer borrowing. Canada has the opposite problem, and the BoC will seize any opportunity to curb the credit bubble. Rates will rise sooner then most believe, or are prepared for. — Garth”

“Seize any opportunity”? You’re kidding, right? Reports of consumer debt north of 153% months ago was an unseized opportunity if there ever was one, but the BofC sat on its thumb. What kind of opportunity does it need? The Second Coming?

No, GDP. — Garth

#51 Uh Oh Canada on 03.18.12 at 9:12 pm


Your predictions have been proven wrong month after month, after month. This post on the ridiculous condo/Mcmansion line-ups just proves it.

The only thing is that your prediction is early, not dead wrong. You probably forgot to factor in how dumb the actual Canadian population is. If we had been smarter, this bubble would have popped with Big Brother US. Then we’d be recovering by now.

With every passing month the eventual bubble popping gets worse and worse. If this lasts any longer, I’m calling for a 90% price reduction. It’ll be worth the wait.

#52 Realtors in a panic. Canada biggest housing bubble on earth on 03.18.12 at 9:15 pm

The RE market isn’t doing well in Toronto. Realtors have seen sales drop and getting harder to come by to the point many come on garths blog to spread propaganda. Realtors need more greaterfools to feed the RE ponzi scheme or else it will crash. Economists and bankers as well as outside observers clearly seen a monster of a housing bubble and maybe the biggest housing bubble on the plant. The numbers are so out of wack that no Realtor would dare use numbers to prove their point. Canadians hold the most debt in the g20.

#53 TurnerNation on 03.18.12 at 9:16 pm

Not the BPOE (and are we surprised?):


Outsiders find Albertans ‘smug’ and ‘uncaring,’ says poll

2008 poll could be more relevant today, says one political scientist

#54 Tim on 03.18.12 at 9:16 pm

11,000 people for a place in south Vancouver? That neighborhood is a dump, next to another dump (Richmond). Seriously, it borders on light industrial and there is nothing interesting around there, no place to walk, no parks, very few shops. Why anyone would want to live there is beyond me.

#55 johnny5z on 03.18.12 at 9:17 pm

Beware the Minsky Moment bell,
it tolls for thee.

BTW – my son received his acceptance letter from UBC – world class education at Canadian prices. He will be at the Kelowna campus – so in a couple of years, when prices recede further, may be time to buy.

#56 Smoking Man on 03.18.12 at 9:19 pm

Ah the London Riot

at first I thought it was buuble heads having the bond fire happy dance, was scanning the tv for the singing fat lady.

O well not this year

Get use to these types of things , kids going into debt getting school’d only to find when they enter the work place they make poverty wages.

What’s even better bet most of those young men played hockey growing up.

There is somthing brewing that will not get reported in MSM

#57 Steven Rowlandson on 03.18.12 at 9:19 pm

Garth when this incredible real estate mania ends it will end badly. When too much of that real estate debt goes bad and they run out of greater fools the real estate debt created part of the money supply will shrink or implode. That has got to have a negative effect on the real economy.

#58 Herb on 03.18.12 at 9:22 pm

#40 $$$BPOE$$$

is that your entry for the joke of the day?

#59 not 1st on 03.18.12 at 9:25 pm

Garth, my dear fellow, just to correct you, the U.S. has low rates so the banks can play the arbitrage game first of all.

Simple math, U.S. fed loans money at 1% to banks, then they loan it to the consumer suckers at 3 or 4%.

If the U.S. fed really wanted money into the economy fast, they would have given the cash directly to the people. The 1 trillion dollar bank bailout was enough to pay off every mortgage in the entire country. If this was done, the U.S. would have roared back in a heartbeat, but because they chose to funnel it through as more borrowing, people are steering clear, thus an anemic recovery if you can even call it that.

Just FYI, $1 trillion dollars was enough to put solar panels on every house in the country thus ending america’s oil addiction forever, but nope, that didn’t happen.

The U.S. is a corrupt society thats why I will never put a dime into that bet.

#60 Tony on 03.18.12 at 9:26 pm

At least the buyers can stave off personal bankruptcy for another 3 years. After 3 years’ time they’ll be living on the street begging for pocket change.

#61 Herb on 03.18.12 at 9:26 pm

Sorry, #42 $$$BPOE$$$.

#62 AprilNewwest on 03.18.12 at 9:26 pm

Mike the realtor #16.
Garth is right on. The Canadian housing market has been in decline in many places across Canada for up to a yr now. Denial won’t stop it.

#63 Smoking Man on 03.18.12 at 9:29 pm

#208 Blacksheep on 03.18.12 at 12:41 am

You link is to Stefan Molyneux web site, a freind of mine. I’m on his doner list.

On the Globe and mail he post as THE STATE
Guy is good……….

his web site

#64 Cy on 03.18.12 at 9:38 pm

This reminds me of something I stumbled upon a couple days ago.


#65 Uh Oh Canada on 03.18.12 at 9:40 pm

Denial posts may not be from real estate agents after all. Could it be…perhaps…our government?



#66 Kaganovich on 03.18.12 at 9:43 pm

#63 Not 1st

I agree with you about the simple arbitrage play that banks are enjoying. Addicts are easier to manipulate most times and the power that would be exercised on the masses would have to get medieval without them being in debt (thus far anyways). Outright physical coercion would be a last resort in the inverted totalitarian political system we seem to be sliding towards. Lately, the bulk of physical violence has been employed on the OWSers.

#67 wollyone on 03.18.12 at 9:43 pm

68th…………..ya baby

#68 peter on 03.18.12 at 9:47 pm

I went to phase II, I wanted to buy but I did not buy because I dont like to buy when there is madness around me, I dont care how good it looks but when there are people getting all excited because they bought a house in 5 minutes for just 600K without reno…..paralized me. However I paid attention to people buying and it was sad seen kids 25-30 years old buying big houses, I am assuming it was starting homes, and some of them start talking with each other and they did not look like people with 6 figures salaries. It was sad, very sad. This wont end well, nobody knows when it will end, no even Garth, but it wont end well for sure.

#69 K on 03.18.12 at 9:49 pm

We both work,renting a nice townhouse in Mississauga,2 kids,no loans,once a year vacation.Saving about $2000 monthly.We can afford a house for about $300.000 (this is our opinion-not banks or brokers).We can’t find anything for this price what could fit our needs.Sad,but real.Canada was going to be our paradise(we will finally have our family house! where we will raise our kids,paint walls,water plants and …),but is not.Two working people with average income can’t afford a very common townhouse in place like Mississauga!!!Many people in my age (34)think that buying RE will secure their future,but it can be their nightmare soon.In my community we are losers because…we are renting.And it is not a nice feeling.

#70 truth hammer on 03.18.12 at 9:49 pm

The idiot savant media braintrust are in lock step with the real tards and the slavish BOC…….debt is good…debt is good…….no inflation……like that Jedi mind trick ever worked on anyone in my neighborhood over the age of eight.


The BOC Carnoodle the Magnificent says…….no inflation despite the officially admitted 18% ( and boys and girls it’s far higher) increase in broad money supply. Broad money is where the flood waters are where the economy looks like a kiddie fun summer sprinkler……the paper is flying like water through every little hole in the tap…..no control. Like it or not we’re experiancing a western style hyper inflation….slow compared to Zimbabwe where there would never be enough surplus goods or services to throw on the fires…..but hyperinflation by definition.

Look I peg real inflation….thats the stuff you use everyday, has averaged a nudge over 20% every year for the past 11 years……don’t look at the gold price that has exactly matched this line right yet……hair gets aflame when we talk gold…..lets just look at real estate prices….auto…cheese…dairy …meats….fee’s ( didn’t you see all the fee increases instead of the income taxe rise?) gas etc etc etc .

Consumables are all up…across the board 200++% over the last ten years. And if you argue that pepsi is relatively stable…look at the drip line and the size of the bottle genius…same across the board…..big price…smaller package.

Boyz and girls……wake up…the real enemy lives in Ottawa not China

#71 young & foolish on 03.18.12 at 9:50 pm

Interesting to see an item on CBC the National tonight about what some families and individuals are beginning to do in Vancouver ….. opting to RENT. Yes, they are choosing to sit out the house price madness, even if some think they will never be able to afford to buy.

Perhaps the sentiment is beginning to turn?

#72 coastal on 03.18.12 at 9:51 pm

Why didn’t Global interview the #8753 guy in the line up ? I wanted to know which part of Hastings and Main he came from and how much Rennie was paying all these dummies ?

If this isn’t the worst show ever of promotional greed and how stupid humans can be. Meanwhile a bubble headed bleach blond delivers this plane crash with a gleam in her eye.

#73 brad in saskatoon on 03.18.12 at 9:59 pm

welll saskatoon is still drinking the houseing koolaid . i got a conditional offer onour last rental house and should be sold .. i finally took garths advice and decided to unload all our real estate , the only place i wil keep is our family home , everything is paid for no debts no mortgages. and saveings in the bank.
this city is still crazy , when i asked the agent to list it he looked at me like i was nutz to sell . i told him i think it is going to start to crumble soon and it willstart in the condo’s he aggreed condos will go down but mantains houses will stay up.
the straw that broke the camels back is every single person i knw and do not know . are all specualting onreal estate , its crazy . you no its time to sell when everyone wants it . and it willbe time to buy houses again when they are not wanted anymore.
if you ever watch stocks come crashing down well one day it is the trend the next its not . this is going to happento houses. it is absolutely not astainable. i read in the local paper they are wanting to build up to 10 more subdivisions not sure where all the people are comeing from or are going to work. only so many tim’s and mcdonaold jobs around . i mean once the houseing stops how many trades guys are out of work. myself i am a trades guy and rely heavily on houseing but this is not going to end well.
anyways thought i would let some no the condition around saskatoon

#74 betamax on 03.18.12 at 9:59 pm

#16 Mikey the Realtor: “you have been talking about this phenomenal top for years, yet you have been so wrong it hurts. I have to say, you are one stubborn mofo”

Right on cue. These people have no sense of history, don’t realize that the same was said in every bubble. It all works perfectly until it doesn’t. As someone once said, bubbles can last longer than the reputation of those who call them, but they don’t last forever.

Decreasing sales volume amidst still-increasing prices is always the beginning of the end. Why do prices still increase? Because anyone buying at the end is by definition a greater fool with no clue the market is turning.

The higher prices go, the more drastic the reversion to the mean. The fact that this particular bubble has gone on so long, and prices so high, merely confirms that the resultant correction is going to be devastating for the Canadian economy.

People like Mikey have been warned; if he’s half as smart as he thinks he is, he better be saving like crazy while the madness continues. But I doubt it.

#75 ANONYMOUS on 03.18.12 at 10:05 pm

I don’t know if it was the correct decision or not, but a co-worker that I know just bought a 2dn-floor 759 sq-ft condo in WaterfrontParkCity condo development for only $315,000 ($375/mth maintenance fees). It includes locker storage and an underground parking space. She put down $65,000 for the place. She asked me if she should buy it and I told her to jump at the chance since it wasn’t in ‘nose-bleed’ territory way up at the 40th story or something like that. I am a fan of living no higher than the 7 or 8th floor, just in case there is a fire and those fire-truck stepladders cannot get any higher.

I’m proud of her for getting such a nice condo in the lakefront part of T.O. for such a low price, I can easily see it selling for double that price in 8 to 10 years from now. The reason for this doubling in price has nothing to do with demand, it all has to do with the massive printing of money by the central banks which is leading to a REAL inflation rate of 12 to 16% almost everywhere around the world, stock markets included. My goal is to buy DDM or SSO, ETFs that are double the return of the market, so if I am correct and inflation doubles the price of everything, including stocks, then SSO / DDM will go up 4-times in price over the next 8 years, something that I definitely look forward to !

#76 DonDWest on 03.18.12 at 10:11 pm

#28 Chaddywack

Real estate is heavily tilted towards sellers. I laugh at people who claim “buyers control the market,” it’s funny because buyers have essentially no rights.
The seller has the option to refuse any offer/contract regardless of circumstances or amounts. The seller could refuse a contract 20K over asking if he wants. Unlike stocks or bonds, you’re at complete mercy to the seller. If the seller wishes to refuse your offer because he doesn’t like your hairdo or smile – that’s perfectly within his rights.

The real estate agent also has zero incentive to advocate on a buyer’s behalf. Real estate agents are paid percentage commissions – therefore they have no incentive to make sure the buyer gets the lowest price possible. If anything, it’s in their best interests to fleece buyers. The remedy for this problem is for real estate agents to be paid based on successful sales (overall success) – not percentage commission.

There are no standards or regulations on the sellers behalf when it comes to selling you a home. As far as the government is concerned, the seller could sell you a home with a bomb in it ready to go off and that’s perfectly fine.

So the rules are heavily tilted towards a seller, which explains throughout history why what should be a depreciating asset often matches inflation or goes slightly above the rate of inflation. Sellers – not buyers – control the “market.” It’s a ponzi scheme that allows people to sell old homes around the same value as new homes.

If your average seller of an average home was subjected to the same regulations as a used cars salesman selling you a car – real estate would rightfully know it’s place as a depreciating consumable much like a car.

Unfortunately, with home ownership being at 70% and developers lobbying big dollars, the government has little incentive to make sure home buyers are treated fairly and all incentive to make sure they’re fleeced.

It’s amazing how much outrage there is if similar tactics are used to sell a car, a vacuum cleaner, or a child’s toy, etc., yet with a half million dollar home it’s viewed as perfectly acceptable.

So yes, the used car salesman is a saint compared to real estate agents. The only crime a used car salesman committed is having difficulty determining the proper value of a used car – an often unpredictable consumable object. Fortunately, you have a lot of regulations and insurance (both private and public) that can reliably protect you if stuff goes sour. Not true for a home however. . .

#77 Geneticistx on 03.18.12 at 10:16 pm

One question… Regardless of what a place is listed for, isn’t it the”free market economy” dictating the final purchase price of an item, including a house? Help me out here. I believe a collapse is coming, yet I still have some faith in free market economics.

#78 45north on 03.18.12 at 10:33 pm

Canadian Watchdog: What could Flaherty possibly do when every solution has a negative reaction that will send the economy deeper into recession? You’re asking a man to commit political suicide

if he raised down payments to 10% and reduced amortizations to 25 years he could say that he had stopped the real estate market from collapse. He would to down swinging.

#79 Stinks McGavin on 03.18.12 at 10:37 pm

Dont you know housing prices will double every 10 years until the value of Canadian homes are worth more than tHe entire world combined? Get with the program, Garth

#80 Riding the Pine on 03.18.12 at 10:37 pm

I’m a recent reader of this blog, and rarely post to anything online. I thought the information below was too pertinent to the readers here to abstain. The subject of foreign RE investors in Van and TO is a hot topic (ignoring the “racist” slant) for good reason. Solid info is hard to come by, and the best I’ve come across so far, albeit only glimpses, is here:


I don’t have a need to share my personal views on this, just wanted to share the info, as I have learned a lot from posters and their links…thanks. I’m always interested in finding unbiased sources of information relating to the Vancouver RE market, so if you can provide quality links., please and thank you.

Riding the Pine (AKA just sold my Vancouver SFH for asking price, and cannot bring myself to put $300K + equity back into a “high” RE market. Should be an interesting year!)

#81 45north on 03.18.12 at 10:39 pm

and another thing: today we broke an all time record temperature 24° C. Previous record was 16.1° C. I mean when you break a record it’s 0.1° C or even 1&deg C higher not 8° C.

sumpn’s up


#82 Honas Wagner on 03.18.12 at 10:40 pm

My father: “Real estate always goes up. Always goes up.”
Me: “Well, except when it doesn’t.”
My father: .
Me: “There have been periods of time when real estate dropped severely. Look at the period you just mentioned in the early 90s. Prices were low then because there was a bust after a late 80s gorge on real estate. Do you not see this.”
My father: “Yeah, but over the long haul….”

Argggggh. I live in a perfectly respectable place with a perfectly reasonable net worth. I’m starting to resort to “There is no way I can explain this to you. You will need to understand it yourself if you’re going to understand it at all. Let’s talk about something else.”

#83 TurnerNation on 03.18.12 at 10:42 pm

Tax slaves trying hard to get around the Harper Govt [sic] no-strike and stripping of private company workers’ hard won rights. Don’t laugh. These will be us one day. “Would you like fries with that”?


In an effort to promote physical fitness, stimulate conversation, camaraderie, the exchange of
ideas and to help put the “YOU” in Union, LL764 has planned the following group activity:

#84 Min in Mission on 03.18.12 at 10:51 pm

Watched the condo sale on Marine.

Yeah, it is different here.

They are all bloody crazy!!!

#85 Stupid Canucks on 03.18.12 at 10:55 pm

No commentary needed. Just watch the video.


#86 Ralph Cramdown on 03.18.12 at 11:22 pm

For your viewing pleasure, I present recent anomalous price behaviour in the Toronto market (a.k.a. Greed! Hubris! Ignorance!) These are some samples where the listing price was RAISED after some time on the market. Most of these are clearly failed auctions, priced low for a bidding war which either didn’t materialize or didn’t generate the hoped-for number. Some are even crazier, apparently sellers who think that it hasn’t sold since December, but is obviously worth more than the listing price now because, you know, the market’s gone up!

The duplicates aren’t mistakes, they’re generally cases where a builder has split a lot, put up two houses that didn’t sell at a price and is raising the price on both of them.

Remember folks, your local agent is worth every penny of that fat commission because he knows local market conditions. And it’s a weird market right now.

Feb 22: $1,988,000 Feb 29: $2,299,000
Feb 23: $199,500 Mar 1: $218,000
Feb 25: $889,000 Mar 2: $999,000
Feb 14: $455,000 Mar 2: $457,000
Feb 26: $399,900 Mar 3: $469,000
Feb 2: $549,900 Mar 3: $579,900
Feb 10: $498,000 Mar 4: $509,000
Feb 24: $799,000 Mar 4: $938,800
Feb 28: $1,499,000 Mar 4: $1,650,000
Mar 4: $1,169,000 Feb 26: $949,000
Jan 24: $799,000 Mar 5: $849,000
Feb 29: $699,000 Mar 5: $749,000
Feb 17: $371,500 Mar 6: $375,000
Feb 23: $399,000 Mar 6: $450,000
Jan 28: $1,352,500 Mar 7: $1,395,000
Jan 28: $1,352,500 Mar 7: $1,395,000
Feb 17: $588,800 Mar 7: $639,900
Feb 23: $888,000 Mar 7: $999,000
Feb 25: $1,650,000 Mar 7: $1,750,000
Feb 28: $749,000 Mar 7: $799,000
Dec 3: $170,000 Mar 7: $184,000
Feb 23: $378,800 Mar 7: $398,800
Feb 16: $499,000 Mar 8: $579,900
Feb 16: $499,000 Mar 8: $579,900
Feb 28: $678,000 Mar 8: $899,000
Mar 1: $899,000 Mar 8: $950,000
Mar 5: $421,000 Mar 8: $439,900
Feb 21: $988,800 Mar 9: $998,800
Mar 9: $1,080,000 Feb 25: $999,000
Mar 2: $1,149,000 Mar 9: $1,328,000
Mar 4: $399,000 Mar 9: $459,000
Feb 12: $120,000 Mar 10: $128,000
Mar 1: $799,000 Mar 11: $828,000
Nov 1: $498,000 Mar 11: $529,000
Mar 2: $298,000 Mar 11: $341,000
Mar 6: $379,888 Mar 13: $389,888
Sep 3: $1,890,000 Mar 14: $2,400,000
Mar 7: $629,000 Mar 14: $668,800
Feb 29: $299,000 Mar 14: $319,900
Mar 15: $1,098,000 Mar 7: $949,000
Dec 23: $569,000 Mar 15: $579,000
Feb 9: $309,900 Mar 15: $313,500 Dec 28: $317,700
Mar 3: $499,900 Mar 15: $529,000
Mar 7: $539,000 Mar 15: $569,990
Jan 6: $105,786 Mar 16: $109,786
Mar 7: $698,800 Mar 17: $948,000

#87 VicLurker on 03.18.12 at 11:25 pm

One question… Regardless of what a place is listed for, isn’t it the”free market economy” dictating the final purchase price of an item, including a house? Help me out here. I believe a collapse is coming, yet I still have some faith in free market economics.

Free markets don’t work with assets. As prices go higher on housing it becomes a signal to buy (like gold), which drives the price higher, and increases the signal to buy, which drives the price higher….. the bubble inflates, and it pops. Greenspan made the mistake of treating housing like a free market in the US, and look what happened. Asset markets must be regulated. As soon as people started treating tulip bulbs as assets and not planting them in their gardens, we ended up with the historical tulip mania bubble so popular the history books.

When looking for ‘invisible hand’ to keep everything in balance, keep in mind that this only works for service and consumable markets. Imagine if a car wash hit 80 bucks, or a Big Mac hit 30 bucks, definately not a good time to buy. But when a bungalow hits 1/2 million? Wow better grab one….

#88 GrumpyAuldScott on 03.18.12 at 11:25 pm

I was in Toronto once….
I can’t get over the fact that people actually PAY to live there.

#89 Tony on 03.18.12 at 11:25 pm

Re: #79 ANONYMOUS on 03.18.12 at 10:05 pm

I could see it selling for $115,000.00 eight to ten years from now. It likely won’t even double in price in your lifetime.

#90 Patrick on 03.18.12 at 11:27 pm

This just from Yahoo news:

Since then, the Bank of Canada has reasserted in its interest rate statement that household debt is the “biggest domestic risk” and, late last week, TD Bank’s chief economist Craig Alexander called on the minister to wait no longer.

Alexander has suggested three options and asks the minister to choose one, including reducing the maximum amortization on mortgages to 25 years from 30 or hiking the minimum down payment to seven per cent from five.

As a third option, he suggests a means test for those seeking loans by ensuring they can afford to make payments as if mortgage interest charges rise to 5.5 per cent, about twice as high as many current rates.

“I’m not recommending we do anything that would drastically hurt the market,” said Alexander. “It’s like you are driving on ice, you don’t slam on the breaks, you just tap the brakes to diminish the risk of a problem.”



#91 DonDWest on 03.18.12 at 11:29 pm

#81 Geneticistx

You have too much faith in free market economics.
Free market economics have failed to meet the needs of the populace in terms of real estate for millennia after millennia. Real estate is the “kryptonite” of free market economics. Real estate has been by far the most corrupt industry in history. People who cheated their way, cheated the market, and achieved endless unearned fortunes through real estate.

Don’t believe me? Trust me it goes well back. Read up on Avidius Cassius, a Roman general and the wealthiest man of Rome, who was the mother of all real estate flippers. His actions led indirectly to the fall of the Roman Empire.

What did Cassisus do? He hired a guild of criminals to torch/burn Roman insula’s. Making sure the homes were damaged but not destroyed. He would then buy these properties at half price from distressed owners. Once he bought the properties at half off (over the damage he caused); he would then restore the properties and sell them at full price. This made the man unbelievably rich.

How rich exactly did it make Avidius Cassius? Difficult to tell adjusted for inflation, but suffice to say he had enough money to buy 1/3 of the entire Roman Legion. This is the equivalent of being able to purchase 1/3 of the US army today, in other words, filthy rich beyond imagining for any one person. He then used this purchased army to invade Parthia (now called Iran) and failed miserably. Opening up the Roman Empire’s eastern flank and hundreds of years later, well, the rest is history. . .

Now tell me, does this real estate scheme and subsequent invasion of Parthia (now Iran) remind you of two other countries today?

#92 Van guy on 03.18.12 at 11:37 pm

If one had $100k cash. How much of that money should be invested?

#93 View on 03.18.12 at 11:37 pm

US$ 64,000 Check out this kitchen! Compare New Park Royal to Marine Gateway to see if you find any value? Am I pumping or not?


#94 1st time buyer on 03.18.12 at 11:38 pm

I love how the Global report mentions 150 people in line for 400 units. Then goes on to say SOLD OUT!

So who bought the other 250 units? I know Rennie had a showroom in China. I am assuming they had a sales center in China too…?

Oh well, I am lucky I came to my senses and bailed when I saw the line-up on Thursday. I was actually there on day 1 for the preview. 99% of the people in the line-up was Chinese which is a major turn off. I can’t even imagine how a pure Chinese run building would even operate seeing as non of them even give a shit about anything or anyone else.

The cost per sq ft was way too high considering the location is no where really. I don’t understand Chinese…What is so attractive about living beside a dump, saw mill and other dirty industry. Plus you got the loud trains that runs on Kent St., the non-stop flights coming and going thru the airport and the dirty dirty mud water of the fraser river and views of Richmond lol? Even with all that people paid top dollar for small little shit units. 660sq 2 bedroom units for 600k…[email protected]#[email protected]

Thanks Garth for the great articles. Keep up the great work. I just discovered you a few days ago and I can’t wait to read the rest of your stuff.

#95 Canadian Watchdog on 03.18.12 at 11:49 pm

#82 45north

Lowering the amortization period to 25 years would exacerbate the market to top out sooner—not something F wants to happen under his belt. The consensus amongst banks and institutions is that Flaherty will terminate the use of collateral backed by CMHC into covered bonds. This will force banks to make better quality loans and tap into private insurers instead of being dependent and abusing CMHC’s competitive rates.

#96 disciple on 03.19.12 at 12:01 am

#69 Uh Oh Canada…. please be advised that both Alex Jones and RT are fraudulent operatives. The Dave Chappelle link is more interesting anyway…

#97 maya on 03.19.12 at 12:11 am

Today I heard someone I know who just bought his 3nd property paid 900K in Van’s suburbs. OMG, that is only an one income family with 2 young kids! His theory is to use the rental income to offset the mortgage, after all the price always goes up. I hope God will save his family when the correction hits….

#98 disciple on 03.19.12 at 12:12 am

#67 Smoking Man… Molyneux is clever. And also dangerous. Mixing truth with lies he is a wolf in sheep’s clothing. I tell you, the real enemy is ever increasingly sophisticated if they can create acts like his. Yes, for those of you who are paying attention, I did post one of his videos, but by now you should know that I only extract the truth portions for your consumption. You can trust me.

#99 Jane on 03.19.12 at 12:21 am

Hey #15 JohnG on 03.18.12 at 7:42 pm

Have you considered selling with a rental clause? Sell your home, but to an investor who will rent it back to you for a fixed or unfixed amount of time. We did that, as we couldn’t find a good rental. We ended up renting our own home back for half a year, before finding a rental that suited us. Then we gave notice and moved on.

#100 Canadian Watchdog on 03.19.12 at 12:42 am

#83 Stinks McGavin

Here is the one and only reason why prices have gone up over the past 30 years, and why they won’t go up further as the BoC meets the end of the road. https://p.twimg.com/AoS_8OMCMAAZKjy.png:large

Private, pension and foreign funds are about to push our gov right off the precipice. Watch for interbank rates to soar as bilateral swap lending breaks down.

#101 Blacksheep on 03.19.12 at 12:48 am

Smokin dude,

Stefan Molyneux is brilliant. Been a fan for years.

take care,

#102 live within your means on 03.19.12 at 12:50 am

All I can say is this is F’n beyond belief!!!

#103 Nostradamus Le Mad Vlad on 03.19.12 at 12:53 am

#60 Smoking Man — “There is somthing brewing that will not get reported in MSM”

Generally referred to as the truth. Obomba’s new E.O. (a lead-in to WW3) is one of the parts. Ask the six individuals who control roughly 95% of the m$m.

#72 K — “In my community we are losers because…we are renting.And it is not a nice feeling.”

Ignore the naysayers. As long as you can rent, max out TFSAs and other investments, you are in far better shape than what others say.
Govts. abdicating responsibilities and passing the buck to taxpayers while taking more for themselves; IMF Don’t worry, be happy! 358 Resignations All top guns, hired hands, etc.; ChIndia gets the spoils from Af’stan, while the west is broke; Iceland investigating derivatives(no one else is);
Why the market keeps heading noth; Cartoons and nukes; Thai billionaire who built his empire from zip has died; Link inConcerns a lotta stuff happening now; Planning A Recession, Part II; Windfall on Outsourcing No kidding, plus other links; Debts / Deficits The west is past the tipping point. Link in.
Smoking Man — I understand your view on education, esp. when these brain-dead, half-assed politically correct ninnies are ruining the system; Obomba’s E.O. A Cdn. perspective, and 8:19 clip Communism and Bolshevism (what we’re living under); Is Canada a democracy? Think again; I Fear But there is nothing to fear. That’s limited, not critical thinking; Hunger is a WMD. This planet can feed approx. 12 bln. people, without Monsanto’s GMO’s; Mysterious rumbles + Sooke = EMPs? Russia Continually preparing for something; Obesity Some epidemics don’t happen, they are pre-planned then put to work; 3:29 clip Back to the future. 1995 clip of Eric Holder talking about brainwashing sheeple into no guns.

#104 live within your means on 03.19.12 at 1:02 am

An ad or a depiction of the media today?


Hope the above link works.

#105 Mr Buyer on 03.19.12 at 1:14 am

borrowed money has lost its value………this is one of your best observations/assertions to date. Money itself is a mere idea but mix in not working for it and the bankruptcy escape valve and there is little or no reason to show any respect whatsoever for money. When there is apparently no other way to make your mark other than to borrow a whack of cash and that cash is made more or less freely available then why not? As for housing being the speculative vehicle of choice well that is easily explained as well. Housing is like arithmetic in complexity while investing is like calculus relatively speaking. Buy a house, ask for more than you paid and sell it. Investing requires a degree of familiarity most people are not willing to obtain. Hence the much larger pool of house speculators (each with easy access to huge degrees of leverage not as easily obtained in other arenas). Again these condo and house frenzies are outliers at this point in this epic bubble. The top has passed and now MSM while admitting to a bubble are busily minimising it (which allows for more to get slaughtered). People should remember just how meaningless money truely is now and thus can be again for better reasons. There is in fact absolutely no reason for any Canadian to be without health care (including dental), housing, clothing, food or education and anybody that rationalises otherwise is not worthy of their citizenship. When I think of the children going without and the greater threats looming scant decades out beyond the horizon and then come to understand the state of paralyasis in the form of protectionist profit maximsing measures rationalised by the present bussines/financial/political organisms I can only shake my head. Look what policy has done to our homes, look very closely what a few changes in law and policy can do. Now imagine better changes. THE BUBBLE HAS TOPPED. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ACROSS CANADA. BUYER BEWARE. Even if nothing or everything changes, every bubble has the same end and there is no need for a black swan event or anything to happen other than the supply of buyers to fall (not even evaporate, just fall is enough) and then a CRASH ensues.

#106 Mr Buyer on 03.19.12 at 1:20 am


#107 Freedom first on 03.19.12 at 2:00 am

OMG……this is getting painful to watch now. I have relatives who mortgaged themselves to the eyeballs within the last five years, with help from Boomer parents. Last few months bought a $60,000 vehicle on Heloc. Now they have just told me they are taking their 2 young kids on an intercontinental vacation in the next 3 months. I say nothing, as I am the fool in their eyes, a renter, even though I am debt free, live well, and have a good diversified portfolio. Live and let live……I am glad to be me:)

#108 SydCixel on 03.19.12 at 2:00 am

I agree with “Renting in Vic” that all of these “first” (or any other number, for that matter) posts should be deleted. Each of these replies contributes only clutter, not conversation.

As for renting: Reading Garth’s blog encourages me to persevere with my rental accommodation, despite the barking dogs (in a “no pets” building), loud arguments in the middle of the night and somebody who pulled the fire alarm after smelling smoke from a fireplace in a neighbhouring house.

#109 chatham chick on 03.19.12 at 2:14 am

I don’t get it. I’m from BC and I was visiting Kitchener last week. As I drove along the 401 to Toronto I saw one “For Lease” and “For Sale” sign after another in front of the commercial and industrial buildings lining the highway. I lost track of how many there were. Then I got to Toronto, and just off the Gardiner Expressway there were so many cranes, hanging over what I assume are condos under construction. If the companies are leaving/closing, where are the jobs coming from for people to afford those condos?

#110 Mr Buyer on 03.19.12 at 2:23 am

#16Mikey the Realtor on 03.18.12 at 7:44 pm
If you really are a realtor and you have access to sales stats across Canada then you know full well the bubble has topped. What do you call a person that knows a fact to be true but states otherwise. BUYER BEWARE. THE BUBBLE HAS TOPPED. SALES ARE FALLING ALL ACROSS CANADA. NOW IS NOT THE TIME TO BUY A HOUSE AND MIKEY THE REALTOR KNOWS IT. BUYER BEWARE.

#111 Van guy on 03.19.12 at 2:26 am

#33 John G. Young on 03.18.12 at 8:25 pm

You got DA banned, now you’re trying to get me banned. Nice try Young one. But we need yellow comments here.

#112 Devore on 03.19.12 at 2:27 am

Last time we had these lineups was before the bubble burst commenced 2008/2009. Just a few short months later condo developers were dumping units at 30% discount. I think cattle have longer memories.

#113 new-era on 03.19.12 at 2:38 am

With all the layoffs, does this mean more foreclosures. One would think, less job security, people should take less risk and save for their insecure future….

Vancouver airport closures around 400 layoff and 2700 in canada


microsoft layoff 200 workers in vancouver


Pepsi layoff 8700 nation wide


#114 Bilbo Bloggins on 03.19.12 at 2:54 am

Buddies and I went to a police bicycle auction years ago.
Thought we could score a couple of nice bikes for cheap.
Instead we ended up getting caught in the moment and overbidding.
People do silly things when decisions have to be made fast and they feel like they are losing out on something.
We learned a hard lesson that day, but hey that lesson only cost us $200.
Much different when the lesson costs $700K and up.

#115 TRT on 03.19.12 at 3:08 am

#50 Canadian watchdog

Absolutely correct!!

F and C can’t do anything anymore! rates will stay low for the foreseeable future even if we have to resort to QE to do it! TO DO SO OTHERWISE IS POLITICAL SUICIDE!

People spending 4-500,000 dollars aren’t stupid even though blog dogs may want to believe that.

Garth, no offense but you have been preaching this for the last 4 years I have been here. The party’s no where near the end because you have gov on RE’s side! The can alter policy on a whim!

#116 TRT on 03.19.12 at 3:15 am

Garth, is this true? yes or no

An aquaintance who recently bought says if the housing market crashes, he will simply transfer ownership to his wife’s name and declare bankruptcy. He may have to file divorce papers for this purpose.

After this, he says he would buy the house back under his name only.

Can this be done

Your friend is an idiot. — Garth

#117 The Real Jimbo on 03.19.12 at 4:31 am

My house is under a Vancouver International approach corridor. I see the jumbo jets from China coming in every few hours. 418 condos sold? That’s one 747 jumbo jet full of Chinese buyers worth of condos.

As long as we have no offshore buyer restrictions and high levels of immigration, then jumbo jet after jumbo jet full of buyers with billions of dollars of dirty money (just Google it) will keep on buying.

Nobody, but nobody, can tell me that Chinese buyers aren’t the #1 reason for these crazy prices in Vancouver. I wouldn’t care except for the fact that Canadian kids can not compete with wealthy offshore buyers without becoming lifelong debt slaves.

#118 blase on 03.19.12 at 5:05 am

Garth, what ever happened to having two sides to a story? Brian Cox asks the question, “is this a sign the real estate market is turning around?” and then doesn’t get someone to answer it. Then he kind of tries to answer his own question with information he got from the developer. Incredible. What has happened to Canada’s once proud news gatherers is a disgrace.

#119 Charles Ponzi on 03.19.12 at 5:16 am

We need land value tax.


#120 Sky on 03.19.12 at 5:40 am

@ 45north:” today we broke an all time record temperature 24° C. Previous record was 16.1° C. I mean when you break a record it’s 0.1° C or even 1&deg C higher not 8° C.

sumpn’s up”


Sunday morning, 7am, it was minus 9C on my sundeck here in Kelowna (westside). Sundeck? What a laugh.

Ottawa stole our weather. Cue the theme music from The Twilight Zone.

Check out the Jet Stream. It’s truly whacked and explains our deep freeze in the west and the eastern heat wave.


Absolutely disgusting weather modification happening all over the place! The Grinch who stole Christmas has nothing on the Grinch who stole BC’s sunshine and heat.

#121 househornyhousewife on 03.19.12 at 5:43 am


I think you should still post the realtors’ comments.

As responsible consumers, we should consider everyone’s opinion, yours and the realtors’. Of course we would weigh any opinion accordingly when using it to make any decision.

I do think you are right, Garth, when it comes to interest rates. They will eventually go up because where else can they go, down even further ? The question is when. My husband and I just recently bought a new property and locked in for 4 years at 2.99%. I am fully prepared that by the time I have to renegotiate, the rate will be higher .. if not, then woohoo ! I also think, however, that banks will become even more competitive than they are now simply because they are running out of borrowers, especially “good risks” which are few and far between these days. I therefore think that if you are a responsible borrower (ie. can manage debt properly), you will be able to shop around and get a very good deal (albeit perhaps not as good a deal as today’s but still a decent rate since banks will be playing things close to their chests).

As for those ridiculous prices in Vancouver and the GTA, in addition to the line ups to purchase sight unseen etc.. Well, “stupid is what stupid does” and one cannot really explain the herd effect. I do think that Toronto will continue to coast on top for a while since the GTA is popular due to jobs and the economic situation etc.. (although I still think I would rather earn less and have a lower cost of living and higher quality of life .. but most people don’t see things that way, they just see the revenue part of the equation as opposed to the bottom line). Again, both of the these large cities will hit the ceiling at some point but the question is when. Anyone purchasing a property in these places around this time is taking their chances. They may sell for the same or more if they need to but the market can plateau at any time. It’s a real gamble and I am sure that many stand to lose more than their shirts.

I think that anyone without serious equity backing them up, who decides to try to make money by speculating on real estate is taking a huge risk with their future. Buying and selling property involves layouts of huge sums of money and lots of legal costs etc… Why on earth the average consumer has suddenly decided that this is the way to go, I’ll never know. Again the herd effect, I suppose. The attraction of making a quick buck has never lost its appeal and there are many similar examples of this throughout history … real estate is the flavour of the month and cheap debt is enabling people to take big risks.

Any real estate agent that encourages this type of behaviour (ie. speculation by average consumers) is irresponsible to say the least but since a real estate agent’s job is to be an agent to buying and selling real estate … well, one cannot blame them for trying. It is up to the individual to smarten up and know which end is up.

Quite frankly Garth, I am very interested in listening to what you have to say but I am also interested in listening to what those agents have to say as well .. being fully aware that each side has its own tastes and prejudices (as do I). A healthy discussion which includes all sides is something I would enjoy. In the end, we cannot blame anyone but ourselves for the decisions that we make.

But for heaven’s sake, if you feature the opinion of a realtor on your blog, don’t go choosing one of those obvious nutcases. Find one with a shred of intelligence who can make valid arguments and even the playing field a little. Those other guys are good for a laugh once in a while but that’s about it.


#122 Joe on 03.19.12 at 6:46 am

I’ve been waiting for years for these record low interest rates to increase but they just keep going lower and now I believe only a massive property tax increase will put the breaks on this bubble. Unfortunately it’s unlikely the conservatives will do either anytime soon.

The Bank of Canada has not lowered rates in three years. And property taxes are municipal, with no connection to federal fiscal policy. — Garth

#123 MD on 03.19.12 at 6:47 am

Mr Garth,
I have been following your blog for quite a while here and it seems that the way things are happening here in Brampton are very different, people are making a fortune after flipping houses and prices are going over 10% every year and there seems no stopping to this ride. My views are either we are living on different planet or are noticing of of the biggest housing booms of our lifetime in Btown. As far as interest rates are concerned they are not going any where atleast for next 5 years and we all know that as even of fixed rates go up for a few months they will be brought down immediately of mr F or C finds its crashing the market.

Good luck with that. — Garth

#124 BuyingaHomeinCanada.ca on 03.19.12 at 6:58 am

If Garth were a REALTOR, he would specialize in helping buyers exclusively. No selling for him. He would talk a ton of purchasers out of buying and then focus on helping those who buy cash or only need a tiny mortgage get the best possible deal. He would tell them to stay away from auction style sales and shop from what is sitting on the market apparently unwanted and low-ball these sellers. Best of all, his guidance would be at no extra cost to his clients because his real estate license would allow his company — Garth Turner Home Buying — to collect half of the commission paid by the seller. If Garth were a REALTOR this is what Garth would do.

You just don’t give up, eh? — Garth

#125 Me so 'Orny, Me love long time! on 03.19.12 at 7:05 am

Garth, “The Sun will come out, tomorrow” Turner, I’m going to throw an idea out there, but could it be possible that you’re *ahem* wrong about real estate in Canada? Could it reeeaaallllyyy be different here? Aren’t all the line-ups to buy condos on speculation, multiple bidding wars and low interest rates that have not moved in ages, serve as evidence that Canada has been the one place where it has avoided falling off a cliff? Anecdotal stories, over and over, about how people are STILL buying yet you still seem to standing on the corner of Yonge and Dundas telling them that the end is near. It’s like a grown-up Charlie Brown trying to kick a football that Lucy is holding.

I bought a place in 2003, sold in 2008 and made more money then I ever made in my total working career! I bought a place that closes on June 1st that I plan to stay in for 12years, that will be paid off in 7years, how much do you think it will appreciate and be worth then?

Now I don’t want to to encourage Smoking Man because I know he’s out there covered in Soya Sause, doing a Paul Reuben every time he’s mentioned in the comment section, but he’s right. I was horrible in school. C- average in high school and dropped out of university 2nd year but that didn’t stop me from being successful. In fact, I think it made me better!

So, this is the time when Doubt rears its head, taps you on the shoulder and whispers, “Hey Baby, you got girfriend?”


‘Could it reeeaaallllyyy be different here?’ No. — Garth

#126 Bigrider on 03.19.12 at 7:27 am

Luckily, if I wanted a home at the Vaughan valley estates, I wouldn’t have to lineup. Simply put one on hold through my contacts and close after the fact.

Given the fact that there are so many pre registered, might be worth the buy and flip, if I wasn’t so bearish on RE.

I just think this market can turn on a dime, anytime.

Your Italian friends are so disappointed in you. — Garth

#127 Bigrider on 03.19.12 at 7:32 am

Garth I’m with you on all your views regarding RE. Been here on your blog a long time.

However ,after 11 years of sideways and brutally volatile financial markets, S&P and TSX no higher than where they were 12 years ago, European indices lower than a decade ago and most people having not made any money in a decade on their financial assets, you are not convincing anyone in this house horny nation of the risks related to houses anytime soon. More importantly and even more difficult, is convincing them to buy financial assets.

Keep trying though. Your patience and persistence far exceeds mine.

Who would own an index for 11 years? Ever heard of rebalancing? — Garth

#128 T.O. Bubble Boy on 03.19.12 at 7:43 am

@ #90 Ralph Cramdown:

That is an impressive list! The other reason for the price increases (at least, based on what I’ve seen) is when a realtor “under-prices” to try and get a bidding war, and then when no one bites they are forced to take the property off for a couple of days and re-list at the price that the seller wanted in the first place.

Or – for some other real estate shenanigans, check out this place I noticed on guava.ca on the weekend…

129 Snowdon Ave:
Oct 29th, 2011 (C2228817) $949,000 – sold in a few days
March 15th, 2012 (C2309019) $959,900 – sold in a few days

What’s the story here?

A) Someone lived in this place for a couple of months, got a case of buyer’s remorse, decided they didn’t like it — and paid over $50k in realtor fees and other costs for that pleasure?

B) Someone bought this place in the fall, and then decided that they couldn’t afford it?

C) The realtor bought this place for a client, so that they could buy an even more expensive place off of them?

D) Someone bought this $1M house as a tear-down, and didn’t get approval to build a McMansion?

Now, it is entirely possible that the answer is B) — someone lost a job, and couldn’t afford a million-dollar house… but I’m leaning towards C).

#129 TurnerNation on 03.19.12 at 7:44 am

Another sign of a market top/craziness? A VIX index of Apple (AAPL) stock!


#130 Bigrider on 03.19.12 at 7:49 am

Remember Garth, according to Ellen Roseman , TorontoStar,
an investment advisor who recommends borrowing to invest is a ‘scammer’ regardless of obvious suitability of said borrower, but a mortgage broker who secures borrowing to invest in RE for a sub par borrower and gets the loan for the borrower, has ‘gone the extra mile’ and ‘done a good job’ for said borrower.

Strange, distorted times we live in.

There is no right or wrong strategy. Borrowing to invest, for some, leads to disaster. For others it’s a fast track to greater net worth. Every case is unique, which is why those who get investing advice from the newspaper take their chances. — Garth

#131 TurnerNation on 03.19.12 at 7:54 am

~300 blog posts over the weekend! Blog dogs are still in a frenzy. Howling and gnashing is reaching a feverish cresendo. This weblog has its pulse on the nation’s economy. Anecdotally, we are piecing together the real story.

Forget “Dear Abby” we have “Dear Garth”, with ordinary Canadians spinning their home-made tales of financial woe and fiscal largess.

#132 pbrasseur on 03.19.12 at 8:12 am

“One, borrowed money has lost its value. ” – Garth.

True. Actually the CMHC/BoC little game is nothing but a variation on quantitative easing. The BoC prints truckloads of money and then CMHC ensures it is funneled into the economy which gets “stimulated”.

We have not invented anything here, this is just good old monetarism, a policy that has been dear to irresponsible politicians (are there any other kind?) for generations.

How it ends is a well known affair also: inflation, loss of purchasing power and economic stagnation, high unemployment and probably a nasty recession since some much structural changes will be required to go back to an healthy economy. We’re already seeing the effects, but that’s just an appetizer for what’s to come…

#133 Me so 'Orny, Me love long time! on 03.19.12 at 8:25 am


You’re right. It’s not different here.

It never was. — Garth

#134 Bigrider on 03.19.12 at 8:33 am

#125- Garth to Bigrider -” your Italian friends would be so dissapointed in you ”

My Italian friends are the ones building them.

#126- Garth to Bigrider “…ever heard of re-balancing”

You could have re-balanced until you were blue in the face, returns have been subpar for a long time and most have lost money in financial markets regardless of reasons. This hurts perception and since everyone uses a rearview mirror to guide their decisions, well, hello housing mania.

#129 – Garth to Bigrider-” Their is no right or wrong answer…Anyone who gets advice from newspaper takes their chances”

Agreed but my only point with this post is that if writers like Ellen Roseman continue to get the broad audience they get and remain unchallenged in their agenda to discredit the efforts of financial advisors, then repeated dissertation of falsehoods become the reality for all.
Advisors need a consolidated and unified voice for their profession. They need a ‘CREA’ of sorts.

Rebalancing means taking profits when assets outperform the intended portfolio weightings, then redistributing the gains among those assets which have declined. Following this over the past 11 years would have given you a different outcome. — Garth

#135 Canadian Watchdog on 03.19.12 at 8:45 am

Anybody wondering why TREB hasn’t released their mid-month report? They need more time to channel stuff pre-cons into GTA stats.

#136 GTA Girl on 03.19.12 at 8:53 am

Willy H & BigRider,

Vaughan Valley Estates are depressing. As well as new subdivision being built by CountryWide Arista on MjrMac./PineValley. These really are postage stamp lots, mixed with stacked town homes. All for $700k+.

I still say Vaughan will be ground zero for massive problems should, when RE tanks. So many in the industry here. All the kids of those in trades/development did not learn from their grandfathers to put some money aside.

WillyH? Fantinoland???

#137 Canadian Watchdog on 03.19.12 at 9:03 am

#139 GTA Girl

From my findings, Vaughan has the worst demographics that will be highly vulnerable to a correction. Stated income (low income) immigrants mixed with a large portion of Italians in construction related jobs is a recipe for disaster.

#138 ozy - let the fools do it on 03.19.12 at 9:12 am

let the fools do it and bring the economy down, like in the states.

#139 Ret on 03.19.12 at 9:13 am

“He (F) used to be a Conservative. — Garth”

H,F&C preach from the right and govern from the left. That is what Canadians want to hear.

Preaching fiscal responsibility while offering new spending programs guarantees re-election. To do otherwise would be political suicide.

I am quite adept at political suicide. — Garth

#140 GTA Girl on 03.19.12 at 9:16 am

Canadian Watchdog; and they’re all in complete denial. Yet we have a new Bentley dealership in Maple.

But don’t dismiss the presence of organized crimes heads in Vaughan. Depressed times makes the drug business boom.

#141 eaglebay - Parksville on 03.19.12 at 9:16 am

#120 The Real Jimbo on 03.19.12 at 4:31 am

Been to YVR many, many times.
Saw many more flights coming in and going out with white people than Chinese.
You’re full of it.

#142 ozy - to #119 TRT on 03.19.12 at 9:22 am

#119 TRT on 03.19.12 at 3:15 am
Garth, is this true? yes or no

An aquaintance who recently bought says if the housing market crashes, he will simply transfer ownership to his wife’s name and declare bankruptcy. He may have to file divorce papers for this purpose.

After this, he says he would buy the house back under his name only.

Can this be done

Tell him he’s funny, why not marry a beautiful young lawyer before divorcing! So, don’t forget the mortgage is on title and stays there until is paid, the house will be lost if he fills for bankrupcy.

#143 Steven Rowlandson on 03.19.12 at 9:26 am

Stinks McGavin on 03.18.12 at 10:37 pm
Dont you know housing prices will double every 10 years until the value of Canadian homes are worth more than tHe entire world combined? Get with the program, Garth.

What really stinks, Stinks is that wages don’t double every 5 to 10 years to keep up with real estate hyper inflation. In my case during the last 6 months I earned under 8 grand working on stairs…. That is why real estate prices must ultimately collapse. The men that do real work don’t get paid to buy real estate and live in Canada. In my view the real estate market is insane and its fans for need to go find their moral compass because they have clearly lost it long ago.

#144 refinow on 03.19.12 at 9:33 am

Garth, I disagree with the increasing interest rates, unless you are saing .25 -.50% that is always a possibility in any market… But anything more then that will burst the CDN housing ballon instantly. No soft landing and no one driving this bus will want to single handedly want to take full responsibility for the correction.

They will curb housing increasing by tightening up lending policies.

The irony is the moment those changes are announced we will see an instant surge for the ones trying to get into a mortgage before the policy changes take effect. But then after that….. Crickets….

So one last bounce by that dead cat, and it will lay still.. Bye Bye kitty, its been fun…

Then rates will sit and sit….Cant increase them, cant lower them.

Then the blame game will start, as to how Canada got sucked into the same housing death spiral…..

Na.Na. Na.. Na….. Na.Na. Na.. Na…… Hey. Hey…. Good Bye.!!!!!

Go talk to the bond market. — Garth

#145 Smoking Man on 03.19.12 at 9:33 am




Sorry Bubble Heads perhaps next month.

Not sure you get it. This is unquantifiably bad news. — Garth

#146 patiently waiting on 03.19.12 at 9:42 am

The interesting part is that you are not legally obliged to sell it at $450k (at least that’s what the Realtor told me….) so really there is actually no risk is there?

Anyone have thoughts on this? I always wondered what would happen if someone made an unconditional offer exactly at the well below market asking price and it was refused by the seller. Could they go to court to have the contract enforced?

The realtor is correct, the seller is not obligated to sell. However, things could get a little interesting if there is only one offer, and the offer is for full price, and the offer is subject free. In this case the seller is obligated to pay the commission, as the selling agent has fullfilled the obligations of the listing contract, in that the agent has brought the seller an offer from a buyer who is willing and able to purchase the property on the terms and conditions set out in the listing contract.

#147 Q on 03.19.12 at 9:44 am

I dunno which of you is correct Garth (GT or realtors). I mean, let’s look at the qualifications for being a realtor… hmmmmm…a pulse, inability to spell economics and belief in the tooth fairy. Think I’ll stick with you on this one. Good sigh of houseaggedon, is when the lemmings are pre occupied with the monthly payment (cuurent) and not the ammount they are paying…and then wait in lineups to spend all that money they don’t have….

#148 SJ on 03.19.12 at 9:55 am

Open houses in Oakville are packed, and lots of sales happening. Does not seem to slow down a bit, maybe 2.99% is working?

#149 bill on 03.19.12 at 10:01 am

”You got DA banned”
no he didnt AH got himself banned.

#150 pbrasseur on 03.19.12 at 10:17 am



“Not sure you get it. This is unquantifiably bad news.” — Garth

But still a fact…

I agree, the higher we go the harder we’ll fall, yet we have to admit this bubble still has legs, yes it defies logic but after all it’s not called irrationnal exuberance for nothing.

However there are a few signs the end is approaching. Most notably the Canadian economy is underperforming, as shown among other things by Canadian stocks, if this keeps up (there there is no reasons it won’t) the fundamentals will become (eventually) impossible to ignore, which is required for credit to grow.

Yet for as long as easy credit is available, and in this country it is so in good part governemnt policy, this bubble may continue.

#151 Kris on 03.19.12 at 10:20 am

Harper, Flaherty & Carney.
HFC. Horribly Fried Cdns.

#152 G2thaBLA on 03.19.12 at 10:24 am

Imagine walking down the sidewalk, and getting splashed when a car hits a puddle… now imagine that when you’re in bed with the window open:

#153 Daisy Mae on 03.19.12 at 10:28 am

#80 DONDWEST: “Real estate is heavily tilted towards sellers. I laugh at people who claim “buyers control the market,” it’s funny because buyers have essentially no rights.”


Without buyers, the sellers are SOL….

#154 johnny5z on 03.19.12 at 10:30 am

I’ve seen people criticize you for not having the date for the real estate downturn to the exact date and time of day. They remind me of those who begrudge “Dr. Doom” because he predicted what would happen correctly but ahead too far in advance. They ought to learn that the only places were exact timing is important is in comedy and in the sack.

#155 Daisy Mae on 03.19.12 at 10:33 am

#82 45 NORTH: “What could Flaherty possibly do when every solution has a negative reaction that will send the economy deeper into recession? You’re asking a man to commit political suicide.”


The ‘cons’ got us into this mess. They have to get us out of it. And if it costs F his job, so be it. It will be well deserved.

#156 Aussie Roy on 03.19.12 at 10:36 am

Aussie Update

Early hopes on auction action fade to grey


For me, one of the most interesting aspects arising from following the Australian housing market over the past couple of years has been the widespread change in media and public sentiment towards the state of the market.

Since writing my first ever post warning of a housing bubble in May 2010 – just as Australian home prices reached their peak – the mainstream media has seemingly turned from vocal cheerleaders for housing – running countless articles / television segments on a near daily basis promoting property as an sure fire way to get rich and promising further house price gains – to housing pessimists.

Reader comments on newspaper’s property-related articles also appear to have flip-flopped.


Conflicts of interest undermine the quality of advice and policy. It is critical to the functioning of markets and government that parties involved are free of conflicts, especially monetary ones. We would like to believe others are ethical, engage in honestly practices, and do not withhold or manipulate information for selfish reasons.

Sadly, the real estate industry is saturated with such conflicts.


How the US housing bubble increased segregation


#157 Dean on 03.19.12 at 10:37 am

I’m concerned that Canada’s resiliance to this recession is simply based on unsustainable credit expansion of consumers due to low rates. If we’re not creating new jobs and expanding our “real” economy with the low rates, hard to see how things won’t just evaporate once the stimulus is removed.

#158 eddy on 03.19.12 at 10:39 am

re: pricing under value to generate multiple offers,

that happend to me once, offers were held off, i was the only one, went in maybe 2% below list, got a signback for over list, I said ‘what gives’? agent said seller was expecting multiple offers, i walked, the house sold shortly thereafter for several thousand less than my offer, And guess what? the ‘agent’ never called me back, cany you believe it? and it wasn’t her own offer! If she was doing her job she should have called me to see if I would come back – to get more money for Her client, I just figured that the seller must have been a total dick and she was just punishing him

#159 Canadian Watchdog on 03.19.12 at 10:42 am

#148 Smoking Man

All pre-cons making the gains. That’s right, starting in July TREB includes sales from non-existent homes that will be built in 2013 and beyond. Great way to inflate the stats.

#160 Daisy Mae on 03.19.12 at 10:44 am

#82 45NORTH: “if he raised down payments to 10% and reduced amortizations to 25 years he could say that he had stopped the real estate market from collapse. He would to down swinging.”


F will merely be correcting bad decisions made by this government. He should not get any accolades for saving us from anything.

And DPs should be 20%.

#161 John G. Young on 03.19.12 at 10:47 am

#114 Van guy

“You got DA banned, now you’re trying to get me banned. Nice try Young one. But we need yellow comments here.”

1. I didn’t get DA banned — he did that himself. DA was not a victim, and neither are you.

2. I’m not trying to get you banned — I’m calling you on your hateful comment. If you persist in making hateful comments, I’ll persist in calling you on them (as I did with DA), and you just might succeed in getting YOURSELF banned.

3. I don’t know what you mean by “yellow” comments, but if you mean hateful, see #2 above.

#162 Canadian Watchdog on 03.19.12 at 10:52 am

Garth, when an agent books a pre-con sale it’s listed as a sale on the MLS system correct?

Yes, that is my understanding. And I saw your comment about them being counted in TREB numbers shortly. Source? — Garth

#163 Junius on 03.19.12 at 10:57 am

#160 Dean,

You said, “I’m concerned that Canada’s resiliance to this recession is simply based on unsustainable credit expansion of consumers due to low rates.”

This comment is 100% correct. What is worse is that this credit driven economy has masked the fact that we have weaker productivity. When it crashes we will have lost years if not decades when we should have been re-tooling and will still be left with all the debt.

#164 Arshes on 03.19.12 at 10:59 am

#119 TRT on 03.19.12 at 3:15 am
Garth, is this true? yes or no

An aquaintance who recently bought says if the housing market crashes, he will simply transfer ownership to his wife’s name and declare bankruptcy. He may have to file divorce papers for this purpose.

After this, he says he would buy the house back under his name only.

Can this be done


He can trasnfer to the house to his wife, but the mortgage would still be in his/thier name(s). The title of the home, can be seperate from the names on the mortgage, so unless the wife can take over the entire mortgage which i doubt she can on her own income and the bank allows it, i doubt this would work.

An insane idea with a 100% chance of failure. — Garth

#165 eddy on 03.19.12 at 11:04 am



this is because of the inventory shortage.
yesterday i checked on mls.ca for open houses
there were about 4 in the beach proper (S of Kingston Rd, E of woodbine)
and ZERO in Leaside.

#166 Ronaldo on 03.19.12 at 11:07 am


Interesting condo stats

#167 Randy on 03.19.12 at 11:10 am

Still waiting for rural and recreational properties to collapse due to market correction and high gas prices….Have to wait for $10 / litre gas…haha

#168 Van guy on 03.19.12 at 11:24 am

#148 Smoking Man on 03.19.12 at 9:33 am



Sorry Bubble Heads perhaps next month.

Not sure you get it. This is unquantifiably bad news. — Garth

I get it. When the GTA is at 10.6 x the medium household income, there will be panic. We’ve said bubble at 5.5 x. So keep the party rolling over there and flip em’ like burgers.

#169 kc on 03.19.12 at 11:24 am

160 Dean on 03.19.12 at 10:37 am

“Canada’s resiliance to this recession is simply based on unsustainable credit expansion of consumers”

I couldn’t agree with this statement anymore than you said it… and to further your observation here is a good read of how things look in the south from a level headed person who gives a perplexing argument.


American’s Asleep At the Wheel Driving Into Debt Slavery

by James Quinn

#170 Canadian Watchdog on 03.19.12 at 11:24 am

Look at March 2011 mid-month figures http://i41.tinypic.com/f04y20.png

Mar11 4,138 vs Mar12 4,215 is a +1.86% increase, not 7% as reported by TREB. A seven percent increase would equate to an estimate of 3939 sales for Mar11 mid-month.

Wondering how they get 7% ? Revisions (Feb data) http://i44.tinypic.com/24bri9y.jpg That’s right, they remove pre-con sales booked last March that will be booked ‘again’ when the sale is closed, so they are comparing the current month sales (pre-cons included) compared to last year’s figures (excluding pre-cons).

TREB started reporting data this way in July 2011, and to my discovery, when calculating the total volume divided by sales (average price) somehow the average price was inflated right at the time of their new report. http://i39.tinypic.com/34zyvcl.png

They are fudging numbers.

PS. Revisions can be found on the last page of TREB’s monthly report.

#171 Rural Rick on 03.19.12 at 11:30 am

My dad ( a real estate agent in the 60’s in Toronto) gave me some advice.
1 When they line up to buy it is time to sell.
2 Forget speculating in markets by the time you and me find out about it. It is too late.
Thanks Dad

#172 Mike used to be in Leaside on 03.19.12 at 11:34 am

Taxhaven #6 asked “why you think interest rates will rise anytime soon”. For how fast things change, just look at Canadian bond rates you’ll see they’ve risen almost a quarter point in a week.


Bond rates obviously drive mortgages. Also based on a Globe article article on Friday, it looks like the BMO 2.99% is probably not market rate but actually BELOW market & only because BMO locked up lots of bond funds to capture market share.

I just locked in for 5 years – some think the smart money should ;lock in for 10.

Not me. — Garth

#173 Lorne on 03.19.12 at 11:50 am

#116 Those 200 Microsoft layoffs are in Seattle….read the article…it is from the Seattle Times!

#174 DonDWest on 03.19.12 at 12:07 pm

Anyways to put things into perspective how overvalued Canadian houses are today. With the amount of money I have in my bank account today I could buy:

– 6 brand new cars
– or 14 used cars
– or 112 brand new computers
– or 225 top of the line I-Phones
– or two (maybe 3) decent houses in Miami

Yet I can’t even afford to buy one sleezy 50+ year old Canadian bungalow with cold hard cash. Maybe there is a little depression at work here – 10 years ago, adjusted for inflation, the money I have wouldn’t be able to buy that much stuff, but I could buy a house.

#175 MoneyMyHoney on 03.19.12 at 12:14 pm

Garth, if planetary positions have their way, nothing will happen until May 2013. From May 2012 to May 2013, it is going to be expansionary phase.

The slide down will start only after May 2013. Can you fend off the attack on your credibility till May 2013?
All that you are seeing now, is raw data and the mismatch. You are not seeing how the movements of the planets.

By starting off way too early, all that you have done is to drag your credibility through the mud. Some occult will be helpful.

By the way, I am not ‘Harold Camping’ who predicted the end of the world. I am just ‘MoneyMyHoney’

#176 Smoking Man on 03.19.12 at 12:26 pm

Not sure you get it. This is unquantifiably bad news. — Garth

No kidding Garth, the Schoold Herd is out of control, F and Carnage got to be scratching heads right now.
Even if F drops ams to 25 Y the Herd will find away around it

Herd is affraid of Bonds
Herd is affraid of Stocks
Herd is affraid of Finacial advisors

The HERD only knows that REAL ESTATE always goes up, The Teacher, and Mom and Dad Said So

#177 DonDWest on 03.19.12 at 12:32 pm

As for people who are commenting how real estate is going up in Toronto due to low inventory – don’t believe it. Actually take the time to scout the neighbourhoods and count the for sale signs.

Real estate agents are manipulating the MLS by removing properties off the site to make it look like there’s a shortage of inventory. This puts buyers into a panic and they pressure buy. Once the real estate agent unloads his troublesome house – he moves on to the next by putting it on the MLS. Seeing this tactic played out in Halifax – seeing it first hand in my neighbourhood. According to the MLS only four properties are for sale in my neighbourhood, which is BS, because at least every 3rd or 4th house has a for sale sign here. The only thing in common amongst all these for sale signs is that they’re shared amongst 4 to 5 realtors.

It’s a sleezy tactic because anyone who takes the time to explore the neighbourhood before buying a house could smell something fishy. If you want to buy a house I suggest to get ready to do a lot of walking during your spare time – know your city inside and out.

This is just yet another example of why real estate needs to be badly regulated. If stores advertised “we have limited stock of this item – buy now!” yet people found an endless supply in their warehouse – they get sued. There’s advertisement and then there’s plain old lying. Telling people inventory is low – when it’s actually high – crosses that threshold.

#178 Canadian Watchdog on 03.19.12 at 12:41 pm

Say bye bye to 2.99% specials. http://i43.tinypic.com/ftq1r6.png

If BMO cuts their special early, then we know their talk of securing cheap funding was a bluff.

#179 DonDWest on 03.19.12 at 12:41 pm

156 Daisy Mae

“Without buyers, the sellers are SOL….”

Yes and no, even without being able to sell, the sellers still get thousands year after year in corporate welfare to renovate their houses thanks to Harper’s “economic action plan.”

#180 BuyingaHomeinCanada.ca on 03.19.12 at 12:44 pm

To my #127 you said: You just don’t give up, eh? — Garth

Garth, I just don’t get it. Turner Tomenson is providing its clients with a fee-based wealth management service. Providing these same clients with a fee-based home buying service is a logical extension. Your clients are currently buying homes through all your REALTOR friends, why not do it through your firm instead? You’d be doing them a favour. And whenever they would purchase an MLS listing, the share of the commission money your company would collect would be applied to reduce their fee and any leftover dough would be given back to them with a handshake and a smile for having made money by buying their house through you instead of a traditional REALTOR!!!! You think like an EBA, you talk like an EBA, and Toronto is in desperate need of an EBA office. A guy like you would quickly revolutionize the way Canadians buy their houses. No more calling the REALTOR on the sign; let’s give Garth’s people a shout… This EBA thing has worked for little me, only god knows how far you could run with it.

#181 Victor on 03.19.12 at 12:47 pm

Aveos lays off 2,400 Canadian workers

The Canadian Press – 13 hours ago

WINNIPEG – Aveos Fleet Performance Inc., a company that provides aircraft maintenance to Air Canada, has shut down its plants in three cities, telling more than 2,400 workers they’re being laid off and should not return to work, a union leader said Sunday.

Tony Didoshak with the International Association of Machinists and Aerospace Workers said Aveos employees were given the notice simultaneously at 1:30 p.m. ET on Sunday in Montreal, Winnipeg and Vancouver.

The union, which also represents Air Canada’s mechanics, baggage handlers and ramp personnel, had feared for Aveo’s future after Air Canada moved to subcontract some of its work offshore.

“It is my understanding that Aveos has ceased operations,” said Didoshak, who is the union’s general chairman in Winnipeg.


#182 I'm stupid on 03.19.12 at 12:53 pm

Can anyone make sense of this?

My brothers neighbor just sold his house. The property went into a bidding war. The final offer was conditional to home inspection and mortgage approval. I said b.s. I can’t believe a property that went into a bidding war would have a condition to financing. I’m thinking either the listing agent is a fool or it’s a scam. Any thoughts?

#183 The Real Jimbo on 03.19.12 at 1:03 pm

#144 eaglebay…

“Been to YVR many, many times. Saw many more flights coming in and going out with white people than Chinese. You’re full of it.”

Domestic terminal or international terminal? There is a big difference.

I am so tired of non-Vancouver people on this blog trying to convince us that Chinese demand and money are not the primary reason for these high prices. They gobble up the top end homes and the effect trickles down to all levels of housing.

Go to Metrotown Mall in Burnaby. In the very back corner of Sears there is an old black and white picture on the wall of opening day many decades ago. In the picture are some men on a stage with a mob of thousands of people looking on. There is not one – NOT ONE – Asian face amongst the thousands of onlookers.

Go to Metrotown Mall today and you’ll see thousands of shoppers… probably 95% Asian. Caucasian faces are few and far between. And the English language is heard less than Chinese.

But, right, I’m full of it. It must be just a figment of my imagination.

#184 Hocus Pocus on 03.19.12 at 1:05 pm

The Power of Cheap Money


#185 Onemorething on 03.19.12 at 1:13 pm

There has never been a better time to SELL! That’s all I read today!

Will China spur a new Asian Financial Crisis?

Slowdown in Property values in Hong Kong, Singapore, Malaysia underway. Indonesia looks strong!

Condo market always first to get smacked!

#186 OlderbutWiser on 03.19.12 at 1:20 pm

I recommend that all those that fear being left out of this market – EDUCATE YOURSELVES! For God’s sake, read some books. Research the recent RE bubble in the US. Understand why Canada is heading for the fall. Understand why we are several years behind the US.

I was in Florida in 2005 looking for a retirement property and in the area I was interested in the prices were all north of US$425K. People were srambling all over themselves to buy. I had seen the Can bubble in 1988 – same kind of lunatic behavior – and so hubby and I walked away. I went back last year and bought the same type of home, in the same area for US$132k!!! Ours was the only offer and we negotiated a steep reduction from list.

Anyone who thinks that interest rates will not go up because “that would stall RE investment” has clearly not lived through the 80’s. Get Garth’s book – Money Road – excellent information for just $20 (and no, I don’t get any kick-backs). Get an understanding of monetary policy, fiscal policy and the economic cycle. Your future financial health depends on it. READ, READ, READ.

#187 interesting on 03.19.12 at 1:24 pm

#173… and this is why you are the watchdog :) good job! I knew it was fudged, just didn’t have time to figure out why… this can’t work year over year that’s for sure….

#188 interesting on 03.19.12 at 1:27 pm

I see all the same listings in the GTA. Those realtors who are not making money right now must be feeling pretty bad about themselves since the market is so “hot”! I have no idea why they are downsizing their lives…. Let the magic continue. Next year treb will once again revise how they track numbers and real estate will never stop going higher lol

#189 interesting on 03.19.12 at 1:33 pm

#168… the reason there are no listings is because no one can sell and move up anymore… this is unsustainable. How much more debt can people take on? seriously? It’s all exciting… everyone is doing it… buy buy buy. Then you get in it and realize what you got yourself into. The smart ones that are in over then heads will get out… but most will buy more lottery tickets… or think things will magically improve and will potentially lose out. The long term does not look good.

#190 Ralph Cramdown on 03.19.12 at 1:39 pm



TREB numbers guy (mumbling): “Please Lord, cool off the stats, just for a few months, until Flaherty passes the budget. … Aww NUTS!”

#191 Bigrider on 03.19.12 at 1:40 pm

# 137 Garth to bigrider- ” rebalancing means.. Doing so would have yielded a different result”

Assuming you are correct Garth still irrelevant. The fact remains that so many have done so poorly in the markets past 12 years means markets will be viewed with skepticism , real estate as religion.

Remember, rear view mirror investing is the publics predominant method of investing.

I can’t cure stupid. — Garth

#192 Rob M on 03.19.12 at 1:57 pm

Average selling price per TREB Feb 1-29 in the GTA $502,508


Average selling price per TREB Mar 1-14 in the GTA $502,155


This time last year, the avg price went from $453,329 (Feb 1-29, 2011) to $459,605 (Mar 1-14, 2011).

Prices this year during this same period should have risen but actually remained relatively the same.

#193 Ross K on 03.19.12 at 2:13 pm

As a 25 year professional REALTOR selling in Burlington Ontario, actually 3rd generation in this business, I have been through 1987-1990 then 1990-1995 and 1995-2000 and finally 2000-2012.

Since the GFM it has been very difficult being involved in this profession. We saw the fall coming in 1989, the return in 1995 and the rise of the new decade. Earlier generations taught me the cycle always repeats itself in real estate.

When I started in 1987 a 2100 sq.ft 2 story (on 50 foot lot) sold for 130,000 in this great GTA city. Today the same home is $540,000. At a fantastic 4% YOY increase it should be $346,000 but instead 6% YOY is in effect.

The bubble was breaking in 2008, it is simply not sustainable for all the reasons Garth states.

#194 Coraline on 03.19.12 at 2:13 pm

Canadian Watchdog, #165, #173: I love the graphs you post. I believe that TREB started revising the data to remove sales that were never finalized, i.e., fell through. They are not pre-construction sales (remember, this is resale data, not new home data.) However, you are correct that they now compare the unrevised data to the revised data, which inflates the figures exactly as you describe.

This blog had an enthusiastic discussion and seemingly direct input from TREB on the issue:

I thought that the above was your blog, but I guess it’s not!

#195 GregW, Oakville on 03.19.12 at 2:17 pm

Hi #20 Nastra, re: your links:
“Any attack on Iran would…”
At least one British MP John Baron sound sane and reasonable. I hope there are lots more?
To bad the 11:46 interview you gave link to can’t fit in a 30 sec news clip.

That link “Where’s the nukes”. ‘Mossad, CIA agree Iran has yet to decide to build nuclear weapon’!
The Iran decision to stop selling their oil in USA dollars March 20 is more likely the big issue for all the threats! ‘Robert Newman’s History of Oil’ has an interesting view of the issue.
http://www.youtube.com/watch?v=kQhhrzHKMhI 1 of 9 parts total about 45min.

I hope they don’t start shooting, it’ll be very bad for all human on our only home planet, IMO.

#196 betamax on 03.19.12 at 2:17 pm

#160 Dean: “I’m concerned that Canada’s resiliance to this recession is simply based on unsustainable credit expansion of consumers due to low rates.”

Best post of the day. Succinct and accurate.

#197 betamax on 03.19.12 at 2:22 pm

#119 TRT: “if the housing market crashes, he will simply transfer ownership to his wife’s name and declare bankruptcy. ”

The bankruptcy courts have seen such lame attempts to transfer wealth a million times. No one gets away with stupid crap like that. Garth’s right: he’s an idiot.

#198 John G. Young on 03.19.12 at 2:43 pm

#187 The Real Jimbo

“Go to Metrotown Mall in Burnaby. In the very back corner of Sears there is an old black and white picture on the wall of opening day many decades ago. In the picture are some men on a stage with a mob of thousands of people looking on. There is not one – NOT ONE – Asian face amongst the thousands of onlookers.”

Do you have any idea what this statement says about you?

#199 EdmontonJim on 03.19.12 at 2:48 pm

I get a kick out of people who say ‘Renting is throwing your money away!’

These people are lining up to throw their money away.

You know what forget it, these people don’t deserve to have money or nice things. I am now cheering for the developers who rob from the dumb to give to bank.

Disclosure – my position is long on bank shares.

#200 Q on 03.19.12 at 2:48 pm

should be an interesting pop, when the bubble bursts on this bloated tale of stupidity and greed. Think this crash is going make ‘Vancouver 81″ and ‘Toronto 89’ look like positive markets. Prediction; Muskoka-down 55%+, Toronto SFD- down 65%, Oakville SFD-down 60%+, Vancouver- who cares…..

#201 Investx on 03.19.12 at 2:55 pm

“The US has low rates because it needs to encourage consumer borrowing. Canada has the opposite problem, and the BoC will seize any opportunity to curb the credit bubble. Rates will rise sooner then most believe, or are prepared for. — Garth”

Huh? They’ve had many opportunities to raise rates the past few years. It was believed here that rates would have risen by now.

#202 EdmontonJim on 03.19.12 at 3:01 pm

Oh, I feel like kicking a hornet nest.

Forget gold, buy Apples!

Fact: Apple now directly controls 57% of the U.S. Economy, and 37% of the Chinese Economy

Fact: Apple is now run by the cybernetic consciousness of Steve Jobs, who has also taken control of the Internet.

Fact: Apple will soon begin issuing Class Omega shares, which will replace every national currency as the new global iPad-backed currency.

Fact: All your base are belong to Apple.

Note: These are not facts and are completely false ;) ;)

#203 Bigrider on 03.19.12 at 3:02 pm

#195- Garth to Bigrider- ” I can’t cure stupid”

True enough and cool but until this much anticipated decline in RE happens, mania for it will only intensify.

My fear is that with overwhelming Asian influence here in the GTA, coupled with various other visible immigrant groups like Russians and Persians, price to income multiples will not matter. They want to buy, period. We could see same nosebleed multiples as Vancouver.

#204 Westernman on 03.19.12 at 3:08 pm

[email protected]#180,
It comes as a shock to you everyday that people lie, doesn’t it?

#205 eddy on 03.19.12 at 3:19 pm

David Miller’s Toronto Land transfer tax also contributed to killing the upgrade market in 416 , and Ford seems unable to come through on his promise to nix it.

For example – someone sells an east york bungalow (850 sq ft) for 550K , and wants to spend 750K, they have to pay 22,200 K cash on closing if they buy within 416.
So many folks just stay put. There is aslo more upward preasure on the entry level prices thanks to Ottawa, meaning that it might be a better investemnet to stay in the bugalow

#206 jess on 03.19.12 at 3:32 pm

If the
numerator > denominator
agents : listings
from that view it would seem like not a lot of listings.
some of the Herd is afraid of
the relationship of the RATE of revenue growth : RATE of earnings growth

Where is the next Edison ?

#207 triplenet on 03.19.12 at 3:36 pm

#165 – Watchdog

When is a sale a sale?

I am an associate member of numerous real estate boards. To my knowledge, regardless of the property type, a sale is recorded as a sale when all the conditions precedent have been approved. This means it is an unconditional contract and legally enforceable – that should help.

#208 bill on 03.19.12 at 3:41 pm


been here in vancouver all my 57 years. there are quite a few asians amongst the new canadians. no one says there are not. but 95%? really? yeah you are full of it.
they are NOT the most numerous. you should travel more ,around the valley for instance.
and as for your picture , neighbourhoods change .
for the better in the case of my parents neighbourhood [57 and granville] very quiet.no kids like me riding mx bikes through the neighbourhood…. or loud rock-bands practicing in the garage. street races and delinquency. down as well.
violins and pianos is pretty well what you hear from your neighbours. oh and pleasant greetings , even if some of the elders are not exactly fluent in english.

#209 ANONYMOUS on 03.19.12 at 3:43 pm

#83: yes and no. yes, housing prices will double every 10 years, but at the same time the rest of the world will also double in price too, so the ratios stay about the same. Its just that wages in Canada WON’T go up, so the only way you can keep alive is to invest into something that DOES go up, that means buying a house or stocks, but definitely NOT cash as cash is sinking by 50% every 10 years.

#93: ‘Tony’: I highly doubt that her $315,000 condo will be selling for $115,000 in 10 years time as the GTA is being flooded with immigrants. And people need some place to live don’t they? But seriously, demand and immigration has nothing to do with it, the main thing is INFLATION due to the printing presses of central banks all over the world running at full speed, that is the ONLY reason why everything is doubling in price every 10 years, no other real reason.

#126 MD: Yes, I totally agree with you that prices are crazy, that everything is going up 10% every year. I’m not just talking about homes and stocks, I mean bread, pop, fuel, everything is going up, everything EXCEPT wages. That is what’s truly scary.
And yes, you are correct and Garth is wrong; interest rates will not be going up more than 2% in my lifetime. Yes, they will go up 1.5% to 2% but that’s it, no more.

#146: yes, you are 100% correct, this real estate hyper-inflation is totally nuts, but then so is the food hyper-inflation, the gasoline hyper-inflation, all due to central bank money printing. And yes, our wages are not high enough to buy these homes, and in 10 years from now they will be even less likely to buy a home when homes are double today’s prices. Sad but true.

Frankly, I hope Garth is correct and that I am wrong, I hope that house prices crash 30% to 50% over the next few years so that reality can come back to Earth, but with the FED still going nuts I just don’t see it happening within the next decade.

#210 Victor on 03.19.12 at 3:52 pm

Canada watchdog wants more mortgage transparency

ReutersReuters – 14 minutes ago

OTTAWA (Reuters) – Canada’s banking regulator wants lenders to be more transparent about their mortgage businesses as it seeks to minimize the risk to the economy from record-high levels of household debt.

Draft guidelines from the regulator released on Monday called for increased disclosure by banks on their exposure to certain mortgage products and markets, enhanced risk-management practices and treating home equity lines of credit (HELOCs) the same way as mortgages.

The Office of the Superintendent of Financial Institutions has been reviewing bank’s residential mortgage portfolios for over a year and the draft guidelines reflect some of its findings.

“Although financial institution mortgage portfolios in Canada continue to perform well, a number of vulnerabilities in the financial system exist, including high household indebtedness,” said Mark Zelmer, assistant superintendent at OSFI’s regulation sector.

“OSFI is acting in an effort to prevent these vulnerabilities from evolving into problems for the financial system,” he said.


#211 bill on 03.19.12 at 4:00 pm

john g young said
”Do you have any idea what this statement says about you?”

nope he doesn’t ….

#212 Canadian Watchdog on 03.19.12 at 4:00 pm

#198 Coraline

Which ever way TREB slices it, it’s manipulative. Just look the average GTA price TREB reported, $502,155, now look at the sales distribution by price from the February report http://i41.tinypic.com/o9is5h.png

The 500-600k category at 777 sales is 11% of total sales. That is no where near the majority and why TREB should be reporting (headlined) median prices in such a dynamic market.

I assure you TREB has a great interest to keep the headline number round and fat.

#213 disciple on 03.19.12 at 4:01 pm

Ridiculous asking prices, and equally ridiculous SOLD prices. The insanity prevails another day…


#214 Mingeford on 03.19.12 at 4:25 pm

Taken from a Realtor’s blog


Fascinating stuff!

But which of the following do you find more amazing:

1) 18.6% of all licensed Realtors in Toronto did NOT sell a single property in 2011.
2) 71.6% of Toronto Realtors sold six or fewer properties in 2011.

#215 Fabrega on 03.19.12 at 4:32 pm

Garth said: “It’s the common wisdom. The reason people degrade themselves lining up. Why they buy in five minutes. Why they offer more than the price. Why they embrace obese debt. Why they panic.”

Why? Because they are morons that were teached to obey and follow what the system says is good or bad for them.
No critical thinking skills. Followers of the system.
Welcome to the Matrix.

#216 jess on 03.19.12 at 4:33 pm

Employment centre to lay off staff

The bricks and mortar vs. the onliners
Jersey and Guernsey

the cows lose VAT case against UK Treasury

Illinois gov. signs the bill

#217 Kevin on 03.19.12 at 4:37 pm

Brokers taking up association’s call to arms

“The industry has been seeing a lot of changes that have only done harm. We’re not, as brokers, uniting as we should be and we’re not speaking out,” says Syndicate Mortgages CEO Marcus Arkan.

In a message to its members, CAAMP says mortgage volume has decreased in the last two years due to tightening of lending criteria and if the market becomes stricter it will weaken the housing market and have a direct effect on the economy.”

Self serving, don’t ya think? Don’t they realize that outstanding mortgage credit is growing at over 7% year over year. And in the first month of 2012, it was growing faster than any month of 2010, including the spring months, which see the highest mortgage volume. Rounds 1,2 and 3 of “mortgage tightening” have really done nothing to stem mortgage credit growth to levels that are sustainable.


#218 Canadian Watchdog on 03.19.12 at 4:43 pm

Here comes CAAMP going absolutely apeshit as F is about the redefine the rules of lending.

Brokers taking up association’s call to arms http://www.mortgagebrokernews.ca/news/breaking-news/brokers-taking-up-associations-call-to-arms/123558/

“We were 40 per cent of the market, now we’re 25. We’re a dying breed and if we don’t stand up and try to speak up for the industry, who’s to say we’re not going to be extinct shortly? Then the only place to get a mortgage will be the banks and Canadians are not going to be able to get competitive rates if brokers are not in the market,” Arkan says.”

I’m amused how brokers haven’t figured out that the banks just pulled a 180 on the broker industry and are about to blame all the soon to be toxic sub-prime mortgages on…you guess it, mortgage brokers.

And which banks are dumping loans with brokers names on it?

Scotiabank “Your broker then you think” loans

CIBC Streamlined “Off the boat to the bank” loans.

This is a 100% repeat of the US sub-prime crises. Why? Because it turns out (like in every US case) that banks could ONLY make double digit profits by lending to those who can never afford it. Prime loans are not profitable to banks, but sub-primes are!

#219 Coraline on 03.19.12 at 4:49 pm

Hi again, Watchdog. Please don’t read my post as a defense of TREB. I fully agree that they are trying to make sales look higher by comparing unrevised data to revised data. I also agree that TREB has introduced its new sales metric because the board is aware that a downturn is around the corner, if not here already.

#220 AG Sage on 03.19.12 at 5:02 pm

>#6 TaxHaven on 03.18.12 at 7:18 pm
>I’m curious why you think interest rates will rise anytime soon.

Up 35 basis points since mar 6.

#221 NO CHMC and RE Falls 50% Overnight on 03.19.12 at 5:08 pm

Bankers know it , realtors know it , government knows it , BAM (borrowed Asian money) knows it and every economist and every other people in the world knows it . Canada is in the biggest housing ponzi housing bubble in its history. When this ponzi falls Canada will know what Americans suffered through. Those stupid high school educated realtors have no idea about the laws of economics. Spring sales will be down and realtors will say the warm winter pulled sales forward. You can’t have it both ways. Realtors are uneducated liars.

#222 Vex and silence on 03.19.12 at 5:25 pm

Not me. — Garth

in response to :

“I just locked in for 5 years – some think the smart money should lock in for 10.”

OK, I’ll bite, what’s the downside to a 4 to 5 year 2.99% , or a 10 year 3.99%?

Is it the mortage breaking penalties? Given that most people move every fifth year or so, so all are at risk of needing to dump?

#223 Arshes on 03.19.12 at 5:36 pm


I sincerely believe you are wrong on all accounts, but for your friends sake, I hope your right. Because if your not, you’ve genuinely screwed her over………….

#224 Kits on 03.19.12 at 5:39 pm

From my wife (financial analyst)

You should blog this to Garth

Only proposed changes at this point but this could be huge

Proposed OSFI changes to HELCOs
1) Limit HELOC LTV to 65% – this is huge
2) HELOC must switch to an amortization (cannot float in perpetuity)
3) Banks must disclose information about their residential mortgage portfolios


#225 JIM on 03.19.12 at 5:54 pm

Here’s a question: When CMHC reaches its 600 billion dollar cap, presumably sometime this year, then what happens?

#226 eaglebay - Parksville on 03.19.12 at 6:03 pm

#195 Bigrider on 03.19.12 at 1:40 pm

Every market consist of transactions between two parties or two sides.
A buyer and a seller. One winner and one loser.
We know which side you’re on.

#227 eaglebay - Parksville on 03.19.12 at 6:10 pm

#202 John G. Young on 03.19.12 at 2:43 pm
“#187 The Real Jimbo

“Go to Metrotown Mall in Burnaby. In the very back corner of Sears there is an old black and white picture on the wall of opening day many decades ago. In the picture are some men on a stage with a mob of thousands of people looking on. There is not one – NOT ONE – Asian face amongst the thousands of onlookers.”

Do you have any idea what this statement says about you?”
This statement only says that he’s telling the truth.
I know, I’ve been there a lot.
What are you reading into it?

#228 Smoking Man on 03.19.12 at 6:10 pm

#217 disciple on 03.19.12 at 4:01 pm

Question is disciple when the schooled herd see’s it on the news tonight, and the home ouners see it on the new what do you think will happen.

Ah to be a Smoking Man always ahead of the the dumb herd.

So what I can’t speel

#229 eaglebay - Parksville on 03.19.12 at 6:16 pm

#207 Bigrider on 03.19.12 at 3:02 pm
#195- Garth to Bigrider- ” I can’t cure stupid”
“My fear is that with overwhelming Asian influence here in the GTA, coupled with various other visible immigrant groups like Russians and Persians, price to income multiples will not matter. They want to buy, period.”
And before them, the Italians did it.
Who’s next? The South Americans?

#230 eaglebay - Parksville on 03.19.12 at 6:22 pm

#211 triplenet on 03.19.12 at 3:36 pm
#165 – Watchdog
“When is a sale a sale?”

“I am an associate member of numerous real estate boards. To my knowledge, regardless of the property type, a sale is recorded as a sale when all the conditions precedent have been approved. This means it is an unconditional contract and legally enforceable – that should help.”
According to Canadian Commercial law, a sale occurred when the buyer takes possession of the goods being sold or when the services are rendered.
Maybe there’s an exception for real estate. I would let the judge decide.

#231 Mikey the Realtor on 03.19.12 at 6:23 pm

#197 Ross K

you just became this blogs favourite realtor, dang!

#232 cto on 03.19.12 at 6:27 pm

#168 eddy

You sure as hell aint gonna sell if you know you sure as hell can’t buy!
There has to be some sort of pent up inventory of future sellers just waiting for prices to drop a bit to blow the gate.

#233 Nostradamus Le Mad Vlad on 03.19.12 at 6:43 pm

The continuing adventures of the wild and gay animal kingdom
The male teacher in a girls’ school asked the science class:

“Who can tell me what organ of the human body expands to 10 times its usual size when stimulated? Mary, can you tell me?”

Mary blushed furiously as she stood up. She said:

“Sir, how dare you ask such a question? I will complain to my parents, who will complain to the principal.”

The male teacher was taken aback at first by Mary’s reaction. Then, as understanding dawned on him, he called for another pupil, this time a volunteer.

Lily put up her hand. “Yes, Lily?”

“Sir, the correct answer is the iris of the eye.”

“Very good. Thanks, Lily,” said the male teacher.

He then turned to Mary, who threatened to complain to her parents and principal.

“Well, Mary, I have three things to tell you:

“First, you have NOT done your homework. Second, you have a DIRTY mind. And thirdly, I fear, one day, you are going to be sadly disappointed.”
#116 new-era — Good post. Could be that some of these jobs will be outsourced to cheaper locations. Others, technological innovations are simply replacing human labor.

#184 MoneyMyHoney — Indeed. C – H – F have all but finished Canada. Harper is applying the final touches. It was a good country while it lasted, but nothing lasts forever.

#199 GregW, Oakville — Hi Greg. Two possibilities —

1) Having signed his new E.O. into law, basically putting Americans under peace time martial law, means that Obomba can mobilize the unemployed and re-institute the draft, without calling it a draft, so they are free to go to war anytime they want.

2) There won’t be a shot fired until after the election. Romney – Santorum – Gingrich are too busy fighting among themselves, which leaves the door open to Jeb Bush.

Then it is entirely up to TPTB. They are the ones who have chosen the prez. since G.H.W. Bush, so they will choose between Obomba and Jeb Bush.

It seems no one in the public eye has a clear understanding of what Iran’s defense systems are. All that is known is that plenty of their missiles, armed with GPS equipment, are aimed at Dimona. Add in Russia and China and, there it is — WW3.

#234 Timing is Everything on 03.19.12 at 6:52 pm

To Toronto…




#235 Canadian Watchdog on 03.19.12 at 7:16 pm

#228 JIM

I don’t think F is worried about the cap limit, rather recapping CMHC’s equity.

#233 eaglebay – Parksville #211 triplenet

I’m not entirely sure about the process of booking pre-cons or omitting bad sales in the MLS system, but the question is why are they being removed on a monthly basis?

If you see TREB’s March report below there is a historic annual sales report that shows 89,347 sales for 2011, however if you go to the last page on the March report, you see 89,140, now if you add up the initial headline sales number (front page) on every monthly report, you get 91,756 sales, being a difference of around 2,616 from the former.

Even in September I noticed TREB reported three different revisions for 2010 on the same day. http://i44.tinypic.com/124frpy.png I don’t know who’s running the show there, but it seems like a bunch of kids.


#236 John G. Young on 03.19.12 at 7:24 pm

#219 Fabrega

“Why? Because they are morons that were teached to obey…”

Yeah, those morons probably weren’t TAUGHT proper English either…

#237 Sarpar on 03.19.12 at 7:25 pm

Still hoping for the bubble to pop in York region! People are over bidding on houses with no home inspections. We are talking 50 to 60,000 over asking! Too crazy!

#238 John G. Young on 03.19.12 at 7:34 pm

#231 eaglebay – Parksville

“This statement only says that he’s telling the truth.
I know, I’ve been there a lot.
What are you reading into it?”

Still waiting for your response to my post #240 on 03.18.12 at 1:21 pm

Until then, shove off.

#239 Ralph Cramdown on 03.19.12 at 7:43 pm

Orange guy: “Get the hell out of my shorts!”

ING just cancelled their conventional stated income mortgage program. As TD, Scotia, and CIBC’s broker channel pulled out last month, they were getting a lot of applications. Adverse selection?

#240 Fabrega on 03.19.12 at 8:11 pm

John G. Young

And I guess you are one of those morons also.
Jumping on other peoples mistakes gives a high?
Do you have something useful to say other than your negative comments?

Relax. To the Creator and Rick Santorum, we’re all morons. — Garth

#241 John G. Young on 03.19.12 at 8:23 pm

#244 Fabrega

“Do you have something useful to say other than your negative comments?”

Absolutely. When one posts a comment on a blog pointing out the supposed stupidity of others, posting messages that contain poor grammar and/or spelling can diminish the credibility of your argument.

Hope that was useful.

Also, live within your means.

And have a nice day.

#242 maxx on 03.19.12 at 8:31 pm

Spoke with a NYMATB (nice young man @TB) today and I quote: “This housing bubble’s going to pop”. Furthermore, he’s not buying for at least another 5 years, not interested in paying CMHC insurance and believes that buying now is a huge mistake.

#243 TurnerNation on 03.19.12 at 10:11 pm

#202John G. Young on 03.19.12 at 2:43 pm

C’mon, despite the government, NWO, and school “multi cultural” programming we are all still ethnocentric!

It’s why we live in Little Italy, Chinatown, Little India, Greektown, Chinatown, Africaville, Little Israel, Little Portugal – because we prefer to live and socialize within our own culture and ethnicity.

“Birds of a feather flock together”. Even the kids get it.

#244 John G. Young on 03.19.12 at 11:24 pm

#248 TurnerNation on 03.19.12 at 10:11 pm

“C’mon, despite the government, NWO, and school “multi cultural” programming we are all still ethnocentric!”

Yes, that thought did occur to me, but not until after I’d hit the ‘submit’ button. However, the language of the rest of the post seems sophisticated, so I still have my doubts.

Any anyway, isn’t it discriminating to make such assumptions?

#245 eaglebay - Parksville on 03.20.12 at 12:06 am

#243 John G. Young on 03.19.12 at 7:34 pm

Check your spelling, dumb, dumb.
So bright aren’t you.

#246 John G. Young on 03.20.12 at 10:06 am

#250 eaglebay – Parksville on 03.20.12 at 12:06 am

“Check your spelling, dumb, dumb”

Dumb beats hateful every time.

Get lost. I mean it.

#247 Van mover on 03.20.12 at 10:50 am

Its mommy and daddies money anyhow. Does that still count !

#248 blueknowser on 03.20.12 at 11:22 am

There are many parts of Canada where “thankfully” we have the opposite problem. 500′ lots with modest homes for less than $200K. The quality of life is unbeatable. Some day there should be walls around TO and VAN to help prevent the spread of the lunacy.

#249 ontarian on 03.20.12 at 10:28 pm

Garth, I think your right about the things you say. It’s unbelievable how blind some people are. I don’t know how they sleep at night, in a 400k house earning 65k a year. Maybe not today or tomorrow, but they will wake up and realize there up the creek without a paddle as the fatcats lounge on the shore eating your hard earned fish.