Written in the wind

Being horny and dumb is now ubiquitous. It could be democracy’s finest hour. Or we could be screwed. History will tell, but I suspect it’s the latter. We have two reports. Three, if you count the yellow copter.

If you hang around people in their twenties and thirties the way I do (they’re hot), you soon discover there’s nothing the majority of them want more than real estate. They want it so bad, in fact, they’re happy to live with their parents until an embarrassing age, just so they can move directly into a condo, or a suburban box made out of glue, plastic, sawdust and pressed cornflakes.

Freedom, mobility, independence, backpacking in Chile, or joining a terrorist cell? Nope, forget all that hippy stuff. This is Gen Mortgage. They can’t wait to be amortized and lie prostrate, in the nude, on the raw, cool, glassy, ramrod stoniness of a granite countertop. That must be it. Because otherwise, it makes no sense – often paying double what rent costs to live in the same place, shouldering massive debt and risking big losses in the inevitable correction.

Face it, the whole system has been engineered to rope in virgins. Five per cent down payments and 95% financing. Cash-back mortgages making saving irrelevant. The RSP homebuyers plan allowing tax-free real estate deposits. First-time homebuyer seminars, mortgage specials and closing-cost tax credits. And 400-square-foot condos any other age group would consider to be a half-decent bathroom.

It’s believed home ownership among the iSomethings has exploded in the last few years, although nobody seems to have hard numbers. Unlike in the US, where a real estate bust has taught under-35s a massive lesson.

In fact, there are more potential first-time buyers in the States (51.5 million) than there are people in Canada. And far from posing the solution to their house-weary parents, an increasing number of them want nothing to do with property. Look at this chart…

Rates of home ownership among them has fallen back to 1990 levels. In the last three years only 9% of this generation got a mortgage, down by half from a decade earlier. Why? Student debt, of course, plus higher youth unemployment. But we have both of the same drags in Canada. So why the massive discrepancy?

Two reasons: Young people with brand-new jobs, no savings, no investments and no credit rating in the US can’t get a house with a 5% down payment, which the bank gave them, at a really, really cheap rate that the federal government has guaranteed. In fact, they can’t even get a mortgage of any kind. If you think Canada doesn’t have subprimes, think again.

But the mainly, young adults here have not experienced a real estate downturn, think it’s impossible, lap up HGTV, eschew CNN, believe Americans are nimrods and Global TV is accurate. Besides, mom, the bank gave us the money!

OK, let’s now turn to horny and dumb people with fading bladders, muffin tops and Stones CDs. A few days ago a poster on this pathetic blog wrote:

“Garth, in keeping with this retirement theme, can you do a bit about reverse mortgages? My father has come to the enlightened conclusion that the best plan for retirement is still owning a house, because no matter what goes wrong you can reverse mortgage it. I was astounded. Didn’t he know that reverse mortgages were essentially stealing the house from old people? I went on line and found a “reverse mortgage calculator”, and my fears were confirmed. If you own a $500,000 house free and clear, you could get $90,000. And the fine print is they get the house when you sell.”

Yes, reverse mortgages are the final indignity and should only be entered in to if you hate your children.

Often wrinkly people without enough retirement savings and a big chip on their shoulders come to this site and claim having the bulk of your money in real estate is fine because you can always suck out the equity in retirement and use it to buy beer and Alpo. This is true. You can. A reverse mortgage (offered by HomEquity Bank through the CHIP program) will give people post-60 up to 40% of their equity in tax-free money which never has to be repaid.

The cash can be used for anything, even paying off an existing mortgage. The funds received will not be counted as taxable income, so they won’t jeopardize your OAS pogey. So for people who mistakenly spent a lifetime paying off their mortgage instead of savings and investing, it seems like a godsend.

Seems. But it’s not.

Reverse mortgages are designed to consume the equity in your home – not just the equity you converted into cash. All of it. Over time the mortgage becomes bigger and bigger (unless you make regular annual payments, which nobody does), and your ownership shrinks proportionately as interest accrues relentlessly.

For example, right now a CHIP reverse mortgage comes with a rate between 5.08% and a withering 7%. So a $150,000 loan taken out at 6% doubles – to almost $300,000 – in ten years. Now, imagine if house values stop rising and in fact start declining. Right. After a decade it’s possible that every single dollar in equity could have been digested by the ravenous reverse mortgage.

And these suckers cost a fair amount to set up – appraisals, legal fees and administrative costs can easily top $2,000. Because most reverse mortgage-takers are cash-starved, they add these costs to the mortgaged amount (as CHIP encourages). This boosts the effective mortgage rate even further, as that money is amortized and amplified.

Of course, all this has to be paid back at some point. If it happens when you sell the house, you can end up with zero equity and maybe a bill for the commission. If it happens when you croak, you get to surprise your family!

And now for the yellow helicopter.

Trust me, I couldn’t make this stuff up.

216 comments ↓

#1 Jamaican_Gal on 03.27.12 at 8:26 pm

First? Fiiirrst? Fiiisssttt!

#2 TurnerNation on 03.27.12 at 8:30 pm

Over in BPOE Whistler bubbleland:

Hotel condominium units hit hard by current economy

Some units selling for half of original value

http://www.piquenewsmagazine.com/whistler/hotel-condominium-units-hit-hard-by-current-economy/Content?oid=2287721

Those who own a condo unit in a Whistler hotel are sitting on great potential, but at the moment the units are not showing great value.

Real estate consultant Denise Brown with Re/Max Sea to Sky Real Estate reported that a unit originally sold in the Four Seasons Whistler for about $1.1 million was recently resold for only $520,000.

The so-called Phase 2 units in Whistler have fallen victim to the globally depressed financial situation, said Brown.
“We’ve seen the prices come down significantly,” she said.

#3 T.O. Bubble Boy on 03.27.12 at 8:31 pm

Speaking of HAM stories in the MSM:

http://www.theglobeandmail.com/globe-investor/investment-ideas/breaking-views/mainland-chinese-eye-global-real-estate/article2383302/

Mainland Chinese buyers now account for more than 20 per cent of foreign buyers of new home sales in Vancouver, Toronto, London and Singapore, according to commercial brokerage Colliers International.

Funny – this doesn’t even seem like a statistic… “20% of foreign buyers”, but what % of the market are those foreign buyers? What if there were 5 foreign buyers in Toronto and 1 from Mainland China?

#4 Chris L. on 03.27.12 at 8:31 pm

You can discreetly sell your home with a helicopter? Baffling.

#5 pathcontrolmonk on 03.27.12 at 8:33 pm

According to bubble timelines, next should be a brief bear rally, no?

#6 Dave on 03.27.12 at 8:36 pm

The helicopter is back!!

#7 Lorne on 03.27.12 at 8:40 pm

Wonder if those are really HAM, or just “actors” of Asian origin? Interesting that they did not want to be interviewed! Just wondering??

#8 deanma on 03.27.12 at 8:41 pm

FFFFIIIIIIRRRRRRSSSSSTTTTTT (not)

#9 McExpat on 03.27.12 at 8:41 pm

You think China isn’t going to have a major hiccup and soon? I wonder if Cam Good is losing all his friends and even receiving death threats? Honestly, if that was my business, I wouldn’t be doing an expose on it. It is greed, pure and simple. You are selling out your countrymen to get your commissions.

#10 gmc on 03.27.12 at 8:41 pm

WOW Me ME ME ME watch out here it comes, if Harper and the boy raised the CMHC up to 1 000 000 000 000 insurance for the mortgages divided by less than 30 000 000 tax payers !!!how much do I owe haaaaaaaaa

#11 TurnerNation on 03.27.12 at 8:42 pm

Is what Westernman in today’s picture? And wearing NDP orange?

#12 Big Al New on 03.27.12 at 8:43 pm

Anyone notice it was raining,just like it always does in BC. I spent a week there one afternoon and I was ready to hang myself it was so depressing.

#13 gmc on 03.27.12 at 8:44 pm

EXTRAORDINARY POPULAR DELUSIONS AND THE MADNESS OF THE CROWDS, read it it’s a fun book to read when you think it’s
here.

#14 Kevin on 03.27.12 at 8:45 pm

Shorter terms for mortgages may be in Ottawa’s new budget
http://business.financialpost.com/2012/03/27/shorter-term-mortgages-ottawa-budget/

We will see.

#15 Serbia-Vancouver Lady on 03.27.12 at 8:46 pm

Garth, I think I am in love with you ! :)

#16 Wizzard of Ozzie on 03.27.12 at 8:46 pm

So the object of listing your house on PLS.CA is discreetness so no one will know you are selling. But your open house is going to be on TV and a helicopter full of Chinese are going to land on your front lawn. None of this makes any EFFING sense to me.

#17 Ivan on 03.27.12 at 8:46 pm

Freedom, mobility, independence, backpacking in Chile, or joining a terrorist cell? Nope, forget all that hippy stuff. “This is Gen Mortgage. They can’t wait to be amortized and lie prostrate, in the nude, on the raw, cool, glassy, ramrod stoniness of a granite countertop. That must be it. Because otherwise, it makes no sense – often paying double what rent costs to live in the same place, shouldering massive debt and risking big losses in the inevitable correction.”

This is a work of a literary genius. Props to you Garth – you entertain!

#18 Onemorething on 03.27.12 at 8:49 pm

All that tells you is the Chinese Mainstream buyers who are bailing from their own downturn are looking for the only traditional safe haven they know.

These are not savy Chinese investors. They will move from one bubble bursting to another and as I’ve always said the money eventually returns home.

Loose 15-50% in China RE, move it to BC and loose another 15-50%. Take pockets of change back to China!

Watch the Chinese defend the RMB appreciation by devaluing it once again based on this RE downturn.

China can blow like the wind and within timelines no other country can touch.

#19 Smoking Man on 03.27.12 at 8:54 pm

Garth your answer to why the under 35 are renters
See Charts,

Man did I get my coconuts busted up yesterday.

Loved it.

Means I’m getting through, slowly tearing down a few walls brick by brick.
Why do I feel compelled to do this? same reason I did not give up changing a car light bulb that took 3 hours, in the cold, cutting my fingers, I still finished, Or maybe zillionaires guilt, let the shrinks figure it out.

But I learned something very important today. For today we have more university grads in history to the ratio of the population, yet the average net worth of those under 35 is a night at the casino for me.

See the chart

http://azizonomics.com/2012/03/27/chart-of-the-decade/

Yet every time I point out the root cause, I’m crucified by the ones that are crushed the most.

But that stat plus the one below, Scared the crap out of me.
PS I made out like a bandito on this one, great dividend too:

http://www.google.ca/finance?q=NYSE%3ARGR# Read what they mfg.

Too chats together are like Nitro & Glycerin

#20 Smoking Man on 03.27.12 at 8:56 pm

Face it, the whole system has been engineered to rope in virgins-Garth said that

Ah
Finaly you see it.

#21 Westernman on 03.27.12 at 9:04 pm

Smoking Man @ # 19,
It took you 3 hours to change a light in a car???
Some genius…

#22 Blobby on 03.27.12 at 9:13 pm

“These people didnt want to be interviewed”… Let me guess, because they’re not actual buyers and were only paid to be there?

“Hey – fancy a free trip in a helicopter? Just promise to keep your mouth shut”

#23 Tri-State Pat on 03.27.12 at 9:13 pm

#12 Big Al New.

I also had a rainy experience near Vancouver. Must have been summer 1990 or 91. We were starting up a paper mill related complex and our guys kept a tab on how many days it rained. It rained EVERY DAY for 43 days. The people were nice out there , but our team could not wait to get back to Montreal. You need sunlight to live.

#24 larry on 03.27.12 at 9:23 pm

Breaking news on Global

Canada running out land

#25 not 1st on 03.27.12 at 9:23 pm

Your part time weekend place is going to be a $14 million dollar place??? I call B.S. on that news piece. Those aren’t asian billionaires. More like paid stand ins to drum up hype for this Cam guy. $14 million will by you your own island somewhere in the Caribbean without the rainy weather.

Its all manipulated and nothing is as it seems and the bubble is going to burst in china and Vancouver at pretty much the same time, then watch the blood flow in the streets.

#26 Phil Indablanque on 03.27.12 at 9:31 pm

“… ramrod stoniness of a granite countertop.”

My vote for Turnerism of the month.

#27 Devore on 03.27.12 at 9:37 pm

So 2nd and 3rd mortgages are more difficult to get in China, so they come to Canada, where they buy in cash? Huh? Why not just buy in cash in China? I’ll tell you why. BS!

Oh yeah, pls.ca, don’t forget now kids, pls.ca! You can’t buy advertising like this. Oh wait, someone did.

Disgusting.

#28 45north on 03.27.12 at 9:37 pm

Smoking Man: I did not give up changing a car light bulb that took 3 hours

well I’ve done a lot of stuff with cars, but I’ve dialed it back to putting on new wind shield wipers. If it’s above 0°C

#29 coastal on 03.27.12 at 9:38 pm

If I was Cam Good I would be avoiding helicopters full of filthy rich foreigners. Didn’t work out well for the Bre-X guy when things went south.

#30 Nemesis on 03.27.12 at 9:40 pm

Hmmm…

Cam Good… Rotary charters in aid of Princeling property acquisitions…

AirCanada outsourcing MRO to Foxconn equivalents.

Aveos terminations….

2600 AeroMechanics with some ‘spare time’.

Google, “Jesus Nut”.

Not advocating. Just sayin’.

Bad optics. Worse politics.

#31 John G. Young on 03.27.12 at 9:42 pm

#208 disciple on 03.27.12 at 7:29 pm

“…you misunderstood me… I intended the modified pronoun as a form of endearment not disdain…”

Oh crap, time to get humble — I hate it when that happens!

Seriously, my apologies for misinterpreting. Maybe I’m too sensitive for the blogosphere.

Then again, maybe the blogosphere isn’t sensitive enough.

Peace.

#32 Paolo on 03.27.12 at 9:43 pm

Years from now people will look back at this madness and wonder how we were ever able to get so disconnected from reality…

Like I have said so many times before on this blog, like watching a train wreck in absolute slow motion.

The middle class of Canada, gutted by all this stupidity!

#33 Montrealer on 03.27.12 at 9:43 pm

Pls.ca is owned by Cam. This video is a huge free marketing campaign for his website and services…
On pls.ca main page the picture is that same house than the video. It sickens me thst Global falls in a trap so easily. thrre should be restricyions for media to advertize fake news like that

#34 Smoking Man on 03.27.12 at 9:44 pm

#21 Westernman on 03.27

Im sure it’s nothing for you

#35 Devore on 03.27.12 at 9:44 pm

Oh screw it, nothing in this story makes any sense. Even the lady at the end complaining about people leaving Vancouver says “keeping our prices high, which is good!”. No it isn’t! It’s not good! That’s why people are leaving, how can it be good?

#36 DJB on 03.27.12 at 9:45 pm

I have always found that when MSM like Global TV picks up a story on any market (Stock or RE) it is always the top or bottom. By the time MSM reports it is all doom and gloom and time to buy or all sunny and rosy and time to sell.

#37 CrowdedElevatorfartz on 03.27.12 at 9:46 pm

I watched that ridiculous “news” story last night, shook my head, and changed channels. Global tv doesnt deserve the sweat perculating in my “nether regions” or the time it takes to scratch the self same regions.
pathetic

You sound busy. — Garth

#38 Al on 03.27.12 at 9:47 pm

How do F & H expect the Canadian Economy to grow when most of us are mired in mortgage debt?

#39 CrowdedElevatorfartz on 03.27.12 at 9:50 pm

over to you BPOE 1
Time for another inane, “pumper”, all renters are looooosers! diatribe.
Dont disappoint me my rittle Rich-man ginsing eater……

#40 Smoking Man on 03.27.12 at 9:54 pm

#15 Serbia-Vancouver Lady on 03.27.12 at 8:46 pm

I too am a desendant of Price Lazar…You know people of heaven

Actully Tesla is in the blood line

#41 Bill Gable on 03.27.12 at 9:58 pm

The reverse mortgage scam exposed, brilliantly.

Great post.

I have literally been lampooned and been the butt of jokes, because I sold the apartment building and our condo, and rent.

Friends accused me of being stupid and a doomer.

I owe nothing, to anyone and the Bank keeps trying to get me to grab the “good life” and a mortgage…in mailers,about once a month.

Watch what happens when Flaherty proposes the taxpayer bail out the CHMC.

Goldman Sachs has done a great job. Now to real the whirlwind.

The busiest place at Safeway today was the Coin Gobbler, as people get their change converted to Kraft Dinner money.

This is a very dangerous and unsettling start to an era of Japanisation.

The car lots are dead here in Vancouver.

That is, if you can see them through the nearly endless rain.

#42 Eviee 1973 on 03.27.12 at 9:59 pm

In the video, they did not want to say what the people did to get their loads of money, they must be the one’s who put toxic waste in food and children’s toys!

#43 Smoking Man on 03.27.12 at 10:00 pm

#8 deanma on 03.27.12 at 8:41 pm
FFFFIIIIIIRRRRRRSSSSSTTTTTT (not)

Stop doing that or my new freind Bill will need to up his dose of Nirto

#44 Stupesing in Cabbagetown on 03.27.12 at 10:01 pm

There is so much wrong with that Global piece, but to me the most alarming is the fear mongering. The message: unstoppable hoards from China are squeezing out true Canadians — the human equivalent of purple loosetrife or zebra mussels — an invasive species. Talk about fueling xenophobia!

#45 Tim on 03.27.12 at 10:02 pm

What more evidence does one need? The real estate whores have sold us out. They’ve disenfranchised many locals and the government is not doing anything about it. And by the way Sam Sullivan is full of shit. He’s ruined the skyline by giving developers free reign. It is disgusting how the real estate marketing whores are ruining it for many of us by selling to the highest bidder offshore

#46 Stinky the Fish on 03.27.12 at 10:02 pm

Hoping China will stop making millionaires one day and exploiting their own people to low pay and brutal-working conditions. “What are these millionaires doing in China? – the video says” I spat out my Guiness and left a mess all over my screen. C’mon! How f-ckin naive are we? Grow some balls, Global

I’ve been to China a couple of times… Next time I go will be to see Ordos or another one of their ghost cities. It’s a mess there, all the rich want to get their money out… and lucky us – we are the beneficiaries?

Like the video suggests, harsher rules should be in place like Australia

Have you guys seen this?
Recent immigrants a ‘huge burden’ on taxpayers
http://www.torontosun.com/2012/03/15/recent-immigrants-a-huge-burden-on-taxpayers

I’m sure everyone is going to call me a racist after this post..

#47 Tim on 03.27.12 at 10:05 pm

Cam Good is pathetic. He is selling us out to the highest bidder. Disgusting…he’s even stupid enough to go on TV. Most people would be ashamed

#48 steev on 03.27.12 at 10:07 pm

I think what isn’t well understood by the public in general is that there isn’t a linear relationship between interest rates and prices. Most people believe interest rates go up = prices go down and vice versa, as if the initial point prices move to is equilibrium. It’s more complicated than that. Let’s take a fictional town…Stevesville. The town has steady birth and death rates so the population is constant. Everyone is employed at one factory, it makes awesome. Awesome is a product in this fictional town. In fact it’s so important that the government has decreed that only so many people can know about how to make it, making awesome is the trade secret that makes Steveopia (the country) special. For this reason the number of houses in Stevesville is set a certain point and building is illegal. Unfortunately the economy of Steveopia isn’t doing well, and the government wants to stimulate demand for everything. They lower the key interest rate (or make CMHC rules more lax, or make mortgage/line of credit rules more lax, it doesn’t matter which). Suddenly the youth/disenfranchised of Stevesville have access to credit they didn’t have before. They covet houses, since traditionally a Stevesville house has been hard to come by. As would be expected the price of houses goes up since demand has risen. The smarter residents of Stevesville recognize this is because of credit and not part of some fundamental shift, so they sell their houses and pocket some nice gains before moving on or renting. A few years later the Government decides it doesn’t want to drop rates. This new credit thing is just what the economy ordered, even inflation is in check since everyone got more productive, save the people in Stevesville…the world can only take so much awesome.

Let’s come back to Stevesville 5 years down the road. Where is the price of housing….up where it was when we left? Nope it’s back to where it was before (relative to every other product sold in town). The people who were younger/disenfranchieder then the yonge/disenfranchesd who bought when credit became easier were not able to afford the run up. They couldn’t get mortgages and were left by the wayside (where they should be, they don’t make very much awesome, it’d be great if there were enough houses for all but they are a limited resource). Housing didn’t continue to get more expensive since demand had fallen back to original levels while supply stayed constant.

Unless you’ve been in cave, Toronto is Stevesville…on crack (Vancouver is Stevesville on meth). In the past decade housing has doubled in price. During that time the change in wages, inflation, rent, productivity, development and demographics all point to lower or level housing prices. Credit, and lots of it point to higher ones, but as we’ve seen above credit doesn’t sustain higher housing prices, it just brings demand forward. We’d be boned even if the guys in charge weren’t making credit less available…but they are.

Cheers

#49 Chaddywack on 03.27.12 at 10:11 pm

‘Copter Cam and the HAM: A Vancouver Story

Next Blockbuster Movie? (no pun…seriously)

#50 ACP on 03.27.12 at 10:11 pm

The responses tonight are cracking me up. Bwaahahahaha

Couldn’t believe that garbage reporting on Global News last night after watching the piece on Garth’s blog the same night about how condos are overbuilt. Global runs a piece on Friday about an RE correction, receives thousands of bomb threats over the weekend and Monday run a spot with the exact opposite message, the Asians are coming to save us all!!

#51 Can'tbelieveit on 03.27.12 at 10:23 pm

The realtors are fighting back with a new BPOE promo video!

http://www.youtube.com/watch?v=qZDdcO4_5wA

OMG! — Garth

#52 The Thing in the Basement on 03.27.12 at 10:24 pm

Some pretty negative comments on the vid. But here are some quotes from it:

“Obsession with the price of RE”
“Price beyond any reasonable boundary”
“Not grounded in reality”
“certain pockets”
“Asians not responsible region wide”

How is this not presenting both sides (if there are sides)?

#53 waiting on 03.27.12 at 10:34 pm

Funny, is it just me, or does that “exclusive” PLS listing look a lot like this one on the regular old MLS.
http://www.realtor.ca/propertyDetails.aspx?propertyId=11480225&PidKey=-1091333764

If you read the fine print on PLS™.
They offer “the best homes and real estate assets in Canada to international buyers … These are the finest homes and real estate assets in Canada. They’re TYPICALLY not made available for sale to the general public and cannot be found through any other means.
PLS ? it should be PULEAZZE …

#54 midcentury on 03.27.12 at 10:39 pm

Beware of reverse mortgages. Lots of lessons learned here. Very long story. I’ll try to keep this short. This was my first experience and only experience with real estate, as I am a low-income long-term renter. And it was a hell of an experience. I no longer trust lawyers, real estate agents or bankers.

My dad at 93 and in failing health has been supporting my disabled brother in the family home. At semi in North York. Being 93 he ran out of money and without letting me know, was talked into a reverse mortgage by the family lawyer. “No problem” my Dad thought since mortgage rates are at an all-time low. When I finally took over his affairs two years later and read the fine print I almost had a stroke. Interest rate 8-9% compounded monthly, equity on his previous paid-off house disappearing rapidly. Only way out of the reverse mortgage–sell or die. To stop the bleeding I had to get my father into a nursing home, make arrangements for my brother, sell the family possessions and then work like hell 10 hours a day, 6 days a week for 6 months to get the house up to market value.

I updated the house as best I could, but didn’t put in SS, granite or pot-lights, which lowered the price. Was on the market 4 weeks before a firm offer, this past January. No bidding wars, no multiple offers, lots of low-balling. Go figure. So much for a hot real estate market–not on my street. Managed to get 98% of list price, but list price was low. Paid off our debts with a little bit of equity left. If my father had passed before I had finished we would have lost everything. Guess I did okay. Glad to be out of it. A horrible experience. No longer trust anyone. Imagine letting a 93 yr old sign such a document!

1. Stay away from reverse mortgages if you want to leave anything to your kids, or grand kids.
2. Get power of attorney as soon as you can, so you can see what’s going on.

After finally selling, discovered this blog. Wish I had seen it sooner. I read it regularly but with the greatest amount of scrutiny.

#55 Observer on 03.27.12 at 10:41 pm

What a bunch of hooey that Global piece is.

Don’t believe one word of it.

How stupid do they think people are.

#56 CrowdedElevatorfartz on 03.27.12 at 10:41 pm

@ #40 Smoking Man
“….Tesla is in the blood line….”
I thought Tesla was Czech? Anywho.

hmmmmm, NOW i understand my little serbo-amerikanski intelligensia.

All those “experiments” with DC electricity. And the Tesla Coils arcing 10’s of thousands of volts everywhere. ……..” It’s perfectly harmless!”

Do you only sleep soundly only when visiting long lost realatives living under high voltage wires with the two headed cows in the barn stall next to you????????

and I thought Tesla rendered himself impotent with all that ‘xperimentin’

I stand corrected.

#57 TurnerNation on 03.27.12 at 10:41 pm

The NWO (which does not exist!) is coming along nicely…

http://www.france24.com/en/20120327-geithner-urges-congress-back-imf-world-bank

AFP – US Treasury Secretary Timothy Geithner on Tuesday urged a tight-fisted Congress laden with conservatives opposed to global institutions to keep up financial support for the IMF and World Bank.

Last Friday the White House nominated Korean-American physician and educator Jim Yong Kim to succeed outgoing US diplomat Robert Zoellick as World Bank president

#58 Observer on 03.27.12 at 10:43 pm

What a bunch of hooey that Global piece is.

Don’t believe one word of it.

How stupid do they think people are.

Cam Good reeks of desperation.

#59 Smoking Man on 03.27.12 at 10:48 pm

#56 CrowdedElevatorfartz on 03.27.12 at 10:41 pm

Sorry killed amother bottle. WHat did you say

#60 Smoking mans smarter coousin on 03.27.12 at 10:50 pm

Hey that’s the guy in the ORANGE tops !!!

Oh “Deer”

#61 T.O. Bubble Boy on 03.27.12 at 10:52 pm

Wait – according to MY sources, these Asian millionaires are too busy shopping for watches and wine to be taking helicopter rides:

http://www.chinadaily.com.cn/cndy/2012-03/28/content_14927692.htm

(maybe there is a duty free catalogue on the helicopter?)

#62 Doug in Victoria on 03.27.12 at 10:52 pm

Now I know how the Mexicans feel.

#63 CrowdedElevatorfartz on 03.27.12 at 10:55 pm

@ #57 Turnernation

The New World Order ( NWO) ? Ugh.

Time for you to buy more gold, more beans, more bullets and jam the drones circling overhead at 50,000ft with more tinfoil on yer baseball cap…
A water cistern in the basement, freeze dried irradiated food with a 10 year shelf life( for when you cant stand the crowdedbunkerfartz from yer visiting amigos :)-

Books on self surgery, self dentistry, self prostate examination ( what the hell have some FUN), self porn ( you GO girl!) and last but not least self cannibalism ( for when things get really really really BAD!)

Yup. The NWO. cant wait…..

#64 dd on 03.27.12 at 10:56 pm

Fed buys euro bonds.

I get a feeling they are the market.

http://www.zerohedge.com/news/its-official-fed-now-buying-european-government-bonds

#65 Sigh on 03.27.12 at 10:57 pm

Sigh…. My realtor is looking at renting out the basement of the house to make ends meet…. I guess real estate is not bringing home the bacon like it used to. Gotta pay the lease on the high end car… Pay that ever increasing property tax… Yada yada yada… And yet the market continues on… Onwards and upwards! This will never end… My other relative has no idea what their family expenditures are…. The unemployed spouse pays those bills…. Ignorance is bliss my friends… You cannot make this stuff up.

#66 a prairie dawg on 03.27.12 at 11:06 pm

I see GT made the Post today.

http://business.financialpost.com/2012/03/27/mortgage-rates-have-nowhere-to-go-but-up/

#67 First Wave Boomer on 03.27.12 at 11:06 pm

Maybe someone can explain to me about Ham. China has currency control limits of US$50,000 per individual a year. We know that the rules only apply to ordinary folks, but Ham can have millions in cash to buy here??? China has income tax, so supposedly this is net money after taxes. As a permanent resident to Canada Ham would have to pay canadian tax on world income. Maybe they love Rainy Vcr and support of our social system after ripping of there own people, or is it the protection the government of Canada will give if China wishes to extridite them.

The MSM reports that there is a 7 years processing time just to get a permanent resident visa for Canada. Even tourist visas are difficult to get for individual chinese citizens, that is the reason for promoting group tours out of China. How is it that these people seem to get visas so easily?

If I had $7 million I would not be buying in White Rock after a Helicopter flight. Try Republic of South Africa. It is just one of many countries where High net worth individuals are granted permanent residency and all the sunshine you can tolerate. Just be sure to leave some money for private security. And with millions you can afford private medical and private schooling for the wife and kids while you spend time in china working on your next billion.

Leave Vcr for the ordianry folks from China who really contribute to Canada and now fill many of our Macjobs. You can find them at your local Starbucks or Church’s chicken.

#68 not 1st on 03.27.12 at 11:09 pm

An asian billionaire, or for that matter, any billionaire, doesn’t use a scumbag everyday realtor like this Cam guy. They are using someone and something much more exclusive than PLS. The whole segment is garbage.

#69 sluggo on 03.27.12 at 11:09 pm

That place is $14 million less than it was listed for 2 years ago.

Also, according to the property manager I work with who is mainland Chinese, the word coming out of China these days is all the inflation imported out of the west can no longer stimulate GDP growth so strict new regulations reducing capital outflows repatriating all those $ are being introduced to prevent stagflation.

Because of this he is starting to see the $2-3 million properties he has listed attract very little attention and sales have ground to a halt which in his words is due to the very wealthy having limited access to zero interest capital so they are now not able to pick up a portfolio of properties to make it worthwhile.

The “poorer” Chinese buyer, again in his words, are the newly formed Chinese family owned development company bidding against each other, stretching their credit to the limit, buying the $1-1.5 million tear down, building new, hoping for quick flip.

I can attest to the latter as that is the segment of the construction industry in Vancouver I participate in and you can no longer make money using the old fashioned, fundamental approach because it is impossible to put a price on quality when profit margins can be lost in a speculative bidding war before the project even gets off the ground.

There is a huge imbalance in the risk reward ratio, heavily favouring risk.

#70 Smoking Man on 03.27.12 at 11:10 pm

The elite which I have distance myself from, amazing powers of observation at play, the universal consiousnes consolidator via near death experiance

Song for you enjoy

Crank it bubble heads
http://www.youtube.com/watch?v=2Xnd4hVDhwA

#71 U-The Man on 03.27.12 at 11:12 pm

Canadians buy real estate with Canadian earned after tax dollars. Asians or other foreigners buy Canadian real estate with dollars made and taxed (or ?) in other countries. The true value of a dollar is one that is not taxed and so Canadians earning their money in Canada are at a disadvantage because money needed to buy real estate has already been heavily taxed. This is why Canada needs to adopt the Australian law of limiting foreigners from buying real estate. Of course our housing bubble has not been totally caused by foreign buyers but the perception of foreigners competing and buying for inflated prices in some cases has helped fuel the bubble and pushed some Canadians into making bad buying decisions.

#72 Aussie Roy on 03.27.12 at 11:17 pm

Aussie Update

Property market undergoing seismic shift, report finds

Australia’s real estate sector is undergoing a once-in-a-generation shift as debt-wary buyers stay out of the market, according to a new report.

http://www.theage.com.au/business/property-market-undergoing-seismic-shift-report-finds-20120328-1vxr1.html

Australia’s Reserve Bank has warned against local banks taking on more risk or excessive cost cutting to help maintain profits in the face of the slowing credit market.

http://www.theage.com.au/business/rba-sends-risk-warning-to-banks-20120328-1vxny.html

HOME owners and developers have felt the icy blast of the deteriorating conditions in the residential market which have triggered a rise in mortgage arrears and profit warnings.

Late payments on mortgages jumped unexpectedly at the end of last year despite a stable economy, a credit ratings agency said. The increase suggests mortgage pain is taking its toll on the already stagnant housing market.

http://www.smh.com.au/money/housing-sector-still-in-the-doldrums-20120327-1vwnt.html

MISH
Australia Roundup: 25% of Small to Medium-Sized Businesses Struggle to Pay Bills; Bank of Queensland Hit by Surge of Real Estate Losses; Labor Party Routed in Elections

http://globaleconomicanalysis.blogspot.com.au/2012/03/australia-roundup-25-of-small-to-medium.html

What shortage?
As you can see from the above table, rental vacancies fell by -2,279 (-4.6%) in February, but remained 3,662 (+8.4%) higher than in February 2011.

Melbourne, Sydney, Brisbane, Adelaide, Hobart and Canberra have all experienced yearly rises in the number of rental vacancies, whereas Perth and Darwin have experienced falls.

http://www.macrobusiness.com.au/2012/03/rental-vacancies-rise-leith-van-onselen/

Ireland
You know you are in trouble when the Irish are worried about your housing market.

This week, the column is going to focus on the one country that has been receiving thousands of young Irish people for the past three or four years, giving them a chance when there were none at home. The question I pose this week is: what will happen to Irish emigration to Australia when the Australian housing market goes bang?

http://www.independent.ie/opinion/columnists/david-mcwilliams/david-mcwilliams-tremors-from-australias-crash-will-reach-our-shores-2984954.html

#73 BC Bring Cash on 03.27.12 at 11:22 pm

Vancouver Real Estate in turmoil. Here is another opinion.
http://whispersfromtheedgeoftherainforest.blogspot.ca/2012/03/tues-post1-turmoil.html

#74 dd on 03.27.12 at 11:28 pm

2% Inflation the Goverment claims.

General Mills Feb 2012:

Input costs increase 10-11%. 63% of sales are from USA.

“Chief Executive Officer Ken Powell said, “Our third-quarter results reflect strong worldwide sales growth for our business, but the 10-11 percent input cost inflation we’re experiencing this year pressured our margins…”

http://bing.search.sympatico.ca/?q=general%20mills%20input%20cost%20increase&mkt=en-ca&setLang=en-CA

#75 That's it ! on 03.27.12 at 11:45 pm

Best post in a while… I LOL’ed… twice!

#76 U-The Man on 03.27.12 at 11:48 pm

The Ontario Liberal budget believes in restraint and legislating if necessary 0% wage increases for its workers. Yet how many 100’s of millions have they gifted to first time buyers/speculators by not charging them land transfer taxes. Mcguinty is also guilty of helping fuel this housing bubble and this budget has not ended this free ride for property virgins.

#77 Cowboy Pete on 03.27.12 at 11:55 pm

@ Serbia Vancouver Lady

“raw, cool, glassy, ramrod stoniness”

Compared to Vancouver and especially Richmond’s soft alluvial till, what’s not to like?

#78 harden on 03.28.12 at 12:03 am

Cam’s annual helicopter shoot looks a little suspicious (Chinese actors?) , just like Rennie’s evidently staged condo line-ups. It’s all beginning to feel a little bit desperate.

#79 VancouverJoe on 03.28.12 at 12:07 am

To: Stupesing in Cabbagetown on 03.27.12 at 10:01 pm

“… the most alarming is the fear mongering. The message: unstoppable hoards from China are squeezing out true Canadians — the human equivalent of purple loosetrife or zebra mussels — an invasive species. Talk about fueling xenophobia!”

— No need to watch Global TV, just visit Richmond, BC

#80 John G. Young on 03.28.12 at 12:08 am

#51 Can’tbelieveit

“The realtors are fighting back with a new BPOE promo video!”

http://www.youtube.com/watch?v=qZDdcO4_5wA

Finally, we Canadians have our own Rebecca Black!

#81 Aussie Roy on 03.28.12 at 12:12 am

U-The Man on 03.27.12 at 11:12 pm

This is why Canada needs to adopt the Australian law of limiting foreigners from buying real estate.

—————————————————————

Yes there are rules, but Australia has the most relaxed ownership laws in the world. As an example we have free trade agreements with many countries, these trade agreements allow (for example) a US corp to purchase up to $1B (yes 1000 million) of prime Australian property without review. There are currently wide spread community fears about the rush of foreign buyers purchasing prime Ag land.

In the residential sector for example if you have a child studying in Australia there are NO laws which would stop you from purchasing a house/unit for your child to live in. There has been some tightening of this law (you must sell when your child is finished their education) but there are holes so large that it is very simple to get around the “feel good” restrictions.

I’ve mentioned before Melbourne (the real BPOE – the worlds most livable city – 2011) is the captial for HAM. This has not stopped prices in some prime inner city suburbs crashing by 40%.

http://en.wikipedia.org/wiki/World%27s_most_livable_cities

http://www.news.com.au/money/property/its-war-melbourne-vs-sydney-property/story-e6frfmd0-1226308118142

Australia and foreign Home Ownership Policy and rules

Chinese buyers are flocking to Australia for property due to the growing rich in china and the cheap property available to Chinese here in Australia compared to skyrocketing property prices in the main cities in china. Many of the new influx of Chinese buyers are said to be Chinese communist officials , Rich Businessmen or associates tied to China’s one party police state.

http://www.australianpropertymarket.com.au/property-market/australia-and-foreign-home-ownership-policy-and-rules/

#82 b on 03.28.12 at 12:28 am

Wouldn’t it be nice? Lol

#83 Sgip on 03.28.12 at 12:28 am

work like hell 10 hours a day, 6 days a week for 6 months to get the house up to market value.

..”… Why on earth would it take that long to do a crap job?

Somrthing fishy about that story

.

#84 Burnt Norton on 03.28.12 at 12:32 am

#51 Can’tbelieveit on 03.27.12 at 10:23 pm

Pretty freaking hilarious.

—–

I wonder how it will shake down at that $14M Saanich waterfront weekend home when the Cascadia subduction zone shimmies and the ensuing tsunami makes the indoor salt water pool a little redundant. Hopefully they have some water wings. Might want to keep the ‘copter running.

#85 Mr Buyer on 03.28.12 at 12:43 am

Bubble Mechanics calls for a huge crash in value of the object upon which the bubble is based not long after sales of the object crash. bubblepedia.org
BUYER BEWARE. THE BUBBLE HAS TOPPED. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ACROSS CANADA. DO NOT BUY INTO A MULTI GENERATIONAL FALLING MARKET. BUYER BEWARE.

#86 Had enough... on 03.28.12 at 12:48 am

#51 can’t believe it …
That was painful to watch.

#87 The Dude on 03.28.12 at 12:48 am

Garth, I think the reason why 20-30 year old Canadians are buying right now is out of fear that the little down payment they do have will buy less and less in the future. And can you blame them? Inflation (cost of fuel, tax, parking, food, etc.) is making it harder and harder to save while densification is making a joke out of living space. Every year apartments are built smaller and smaller. Not to mention flat wage gains and the fact that they have invested much more than their parents’ generation in education (time and money). A 10% down payment now is about the same as a 20% down payment on the same dig 8 years ago. It’s a feedback loop accelerated by fiscal policy, advertising, generational pressure, low interest rates, demographics, and the remaining points you have mentioned on this site. It might be considered hysteria at this point. It ends when it ends, but I think our culture has changed because of it.

#88 Makavelli on 03.28.12 at 1:16 am

#35 Devore on 03.27.12 at 9:44 pm

Oh screw it, nothing in this story makes any sense. Even the lady at the end complaining about people leaving Vancouver says “keeping our prices high, which is good!”. No it isn’t! It’s not good! That’s why people are leaving, how can it be good?
•••••••••••••••••••••••••••••••••••••••

I can’t believe how much jealousy there is in this market. If you can’t afford to buy here, that’s too bad for you. Move further east to the Fraser Valley. People like you sat over the years prayer and preaching for a market decline. While others flipped over and over and made some good money. Exactly what Ive done. This party ain’t over yet. You should grow a set and make a good flip. I’m at 7 flips now and up over $300k. Did your portfolio do that in 6 years? And I don’t have to live in the burbs. Sucker!

#89 grantmi on 03.28.12 at 1:16 am

#1 Jamaican_Gal on 03.27.12 at 8:26 pm

First? Fiiirrst? Fiiisssttt!

Idiot! Iddiiot! Idddiiiottt!!!

#90 Suede on 03.28.12 at 1:17 am

Note to self:

1) Take Real Estate Course

2) Create a flashy website with a photoshopped picture smiling, wearing a M2M Harry Rosen suit

3) Rent a helicopter for $230/hr – or better yet, $460/hr for the bigger one for two hours tops (http://www.glacierair.com/fares/index.htm)

4) Call CTV and give them a lead on an interesting piece they can’t resist. (“Why does Global get all the helicopter chinese and not us!…GET SOME ANSWERS PEOPLE” -CTV boardroom discussion)

Singlehandedly re-ignite the public into thinking there’s new opportunities now that Italians are fighting the Chinese in bidding wars for property in Vancouver.

Total Cost: Under $5000, and most of it (if not all) tax deductible

The six o’clock news just ain’t that cool anymore. At least put on some stunning and attractive women to keep our attention instead of the usual drivel.

France knows what to do:

http://www.youtube.com/watch?v=xg89TfgbERk

#91 Suede on 03.28.12 at 1:20 am

….I’m actually very surprised with the large European populace in the Lower Mainland that they haven’t been featured on the news buying houses. Ahh well, they reserve that pumping at family dinners and baptisms.

#92 GeneticistX on 03.28.12 at 1:26 am

i just received an email from my real estate agent that sold me a tiny bungalow in a central part of Toronto a number of years ago. The Bungalow i purchased for $282K in 2002 and sold for $385 in 2005 is now on the market (not renovated at all) for $629K. The master bedroom has NO closet. Nice house, but after all said and done with land transfer tax and moving, it’s almost $700K for a tiny bungalow. This can’t, just wont, end well.

#93 Freedom first on 03.28.12 at 1:36 am

I think being house horny in many parts of Canada today is much akin to being seduced by the prostitute “Ms. Rea Lestate”

#94 Canis on 03.28.12 at 2:02 am

#69 Sluggo: Do those planning to tear down, rebuild and do a “quick flip” notice that the $2.5-3 million rebuilds are not selling? Why do they think their rebuild will sell if hundreds of others in Vancouver have been sitting on the market for months with very few sales in this segment?

#95 CrowdedElevatorfartz on 03.28.12 at 2:10 am

@#59 Smokin Man

LOL good one!

enjoy dem 99 bottles on the wall, if one should fall…………………

#96 ANONYMOUS on 03.28.12 at 2:10 am

I don’t want to burst anyone’s bubble here, but there is a say that says:

“NEVER UNDERESTIMATE THE POWER OF STUPID PEOPLE IN LARGE GROUPS”.

That being said, if enough of the 20-year olds feel that housing is WORTH paying $4 Million for a 3-bedroom, then they ‘WILL’ push up house prices purely by will-force alone.

What I can see, so many of this i-Pod generation are so out of whack with what is going on in the world, they are throwing 105% of everything they earn into their mortgage payments (the other 5% to 15% coming from their credit cards).

So from what i can see, if the 20-somethings are as STUPID AS DIRT, then they will continue to keep bidding houses higher and higher for the next 10 to 20 years, at least in the GTA for sure.

Of course, I could be wrong?

#97 Cooliecat on 03.28.12 at 2:23 am

The Video has it wrong! The House they visited is in Metchosin and has been on the market for a very long time.

#98 $$$BPOE#1 on 03.28.12 at 2:24 am

Looking great from up here in the chopper folks. This is the new way to shop for real estate in BPOE. Acquilini group just getting ready to build some towers by Rogers Arena, new village being built behind the Oly Village. Richman exploding in towers with whole neighbourhoods being bulldozed So many buyers on the ground it’s become overwhelming. Buying in Vancouver is a beautiful thing as everyone is making out like bandits.Everyone is rich and happy only the renter is depressed, the Canadian is depressed, these renters and Canadians should be happy, please just leave quickly so the flowering can continue. Buying in the US is ugly, it is taking adavantage of a nations misfortune. The American even takes advantage of his own people buying depressed property in Hawaii, no morals, an ugly person inside and out. Vancouver is flowering and not just the cherry trees. Vancouver has transcended the world. God how I love it!

#99 daystar on 03.28.12 at 2:27 am

We’re screwed, Garth. This is going to be a long post sor my apologies go out to those readers who are too lazy to read in volume (good ol’ caffene). To understand where the future of Canadian RE goes from here, we have to understand whats going on in the U.S. market. Two things have to happen before interest rates rise in North America and once rates rise in the U.S., we are officially screwed because they will rise here almost simultaneously so its question of time. The first is a U.S. housing recovery which suffers a combination of oversupply and ARM’s resetting with higher rates until the last quarter of this year. The second is an economic recovery.

Warren Buffet has recently mentioned that the U.S. economy can’t recover without a recovery in housing and I think he’s right and he’s well known for being right and his point is simple. Oversupply must be met with more buyers? Where are they going to come from? The U.S. can think about taking the 15 million or so semi-permanent illegal immigrants and legalize them for starters but I’ll get more into this solution later.

http://bottomline.msnbc.msn.com/_news/2011/11/14/8796976-warren-buffett-on-europe-housing-and-his-investment-portfolio

The 3 distinct types of U.S. mortgages that created the U.S. housing mess they are still in now are subprime (1.3 trillion market), Option A’s (higher risk borrowers, a 1.1 trillion market) and ARM’s (1.2 trillion), also known as predatory loans and liar loans best defined in this link:

http://en.wikipedia.org/wiki/Adjustable-rate_mortgages

And this link for Alt A’s:

http://en.wikipedia.org/wiki/Alt-A

So lets look recap what the mortage industry did from 2001 to 2008 shall we? Bush wins his first term and wants a boom in housing. The banking industry seriously deregulates to create a housing boom by offering 40 year amortizations while interest rates were at record lows and enables banks to lend to anyone with a pulse and ID:

http://en.wikipedia.org/wiki/File:Federal_Funds_Rate_1954_thru_2009_effective.svg

Never before can americans borrow so much so cheaply and it gets priced in and valuations and development soar specifically from 2002 to 2005. Then interest rates spike as evidenced from the chart above. What does the mortgage industry do in light of higher rates? Subprime essentially morph’s into ARM’s:

http://en.wikipedia.org/wiki/Subprime_mortgage_crisis

…because they have cheap teaser rates for the first 1 to 5 years depending on the ARM and this type of mortgage becomes popular because a homeowner can buy a house with cheap payments… til’ they reset but thats ok because RE values always keep going up right? Rate’s shot up and the mortage market pushed ARM’s hard to keep the U.S. RE bubble going with teaser rates. This link sheds some light on ARM’s (I’ve provided it because of the date, note the date).

http://www.youtube.com/watch?v=shYJ_KkbzWg&feature=related

There are, however, some mistakes in the numbers of the above link provided by the man being interviewed. The ARM market is much larger than 500 to 600 billion. Its more like 1.1 trillion (partly because ARM’s were still alive and well when the interview was made) according to the link below:

http://ftalphaville.ft.com/blog/2010/03/02/162856/coming-soon-1000bn-resetting-recasting-us-arms/

These charts below map the future of U.S. housing so I strongly urge readers to take a look and note the dates of which ARM’s and ALT A’s reset to higher rates which continue to create bankrupcies, oversupply and depress housing:

http://av.r.ftdata.co.uk/files/2010/03/9085247.gif

http://www.cycleprooutlook.com/Charts/SP500/OptARM-AtlA_Resets_0908.jpg

http://ftalphaville.ft.com/blog/2009/10/29/80306/option-armageddon-rears-its-ugly-head/

If readers don’t yet understand what I’m trying to say, they didn’t check the links. The message is simple. Until the fallout of ARM’s/Alt A’s resettingto higher rates ferrets the bad mortgages, U.S. housing can’t recover (which isn’t far away as evidence by provided charts). Never mind 75% of them being concentrated in just 4 states (California, Nevada, Florida and Arizona) its 1.1 trillion worth and ARM delinquency rates are north of 50%, obviously enough to damage the entire nation.

Nor can housing recover until their government deals with oversupply and I can only think of one thing that can make that problem go away and its through immigration. Simply put, the U.S. needs more Americans to fill the vacancies so they either immigrate from other nations or deal with their illegal immigration problem by making illegal immigrants that have lived there for years and decades… legal. Obama, are you listening? It would solve a good deal of problems in California alone. It might get you shot, but…

Once the lion share of ARM’s/Alt A’s reset and the fallout is over, housing should theoretically recover somewhat (except for that small oversupply issue). Fed rates in my view have had to stay artificially low through bond market intervention. Same goes for MBS bailouts and most of the rest as well but once the worst is over from ARM’s, oversupply has to be dealt with and I can’t see it being solved except through immigration unless America chooses a much slower recovery route outside of dozers.

The bottom line and the point I’m trying to make here is this. Interest rates are poised to stay at record lows here because they are poised to stay that way in the U.S. until housing recovers. Did you look at the charts? It could begin as early as the end of this year or early next but regardless, a huge drag on U.S. housing will be lifted as ARM’s fully unwind and then up up, rates go in the U.S. and they will climb here in Canada almost at at same time as foreign investors look for higher returns on bonds.

What effect will normal rates have on RE in Canada with Canadian RE in a bubble? You know the answers. RE values will fall, equity will shrink, construction will slow, unemployment will rise, bankrupcies will increase and if it gains unstoppable momentum, RE values can trigger a recession that will last for years depending on how high and quickly rates climb. Considering our own housing oversupply and the ultra high employment levels housing currently generated over the last 5 years, (Its an 18% average. The U.S. housing boom employed 13% of americans on average for 3 years before their bust in comparison)with household debt and potential negative equity fallout, so called surprise large federal budget deficits and CMHC bailouts running up public debt; 5 years from now Canadians could be looking at flirting with double digits from our banks.

We do have recourse loans except for Alta and we don’t have ARM’s and Alt A’s that reset into higher rates. What we do have or will have if rates stay at or below 1% from the BoC into next year is at least 4 years of mortgage holders renewing their terms into higher future rates and if, God forbid, the U.S. economy/housing doesn’t recover until 2014 and BoC rates are 1% or less til’ then here in Canada, it’ll be a full 5 year cycle of every single homeowner in Canada renewing popular 5 year terms into higher rates, some of them potentially sky high. It’ll be much like the same effect of every single Canadian mortgage holder having an american ARM.

In short…. we’re screwed. Its just a question of when and I hope I’ve helped shed some light on the timeline (hint! Go for the 10 year renewal and if you are thinking about bargain hunting for RE in Florida you have 6 to 9 months). In the meantime, Canadians in light of realizing just how much risk F & Harper have put our economy in, should seriously think about joining the chorus for F to resign and rethink how they’ll vote in 2015.

#100 First to last on 03.28.12 at 2:41 am

Imagine that rich people using helicopters to get around…

#101 Michelle on 03.28.12 at 2:43 am

@ #51- Can’tbelieveit

“The realtors are fighting back with a new BPOE promo video!”
http://www.youtube.com/watch?v=qZDdcO4_5wA

“OMG! — Garth”

That was awesome! Especially when she started to rap!
…But I noticed they’ve disabled the comments section :)

#102 Devore on 03.28.12 at 2:58 am

#52 The Thing in the Basement

Sorry, I can’t hear you over the sound of me madly typing pls.ca over and over!

#103 Rent4ever on 03.28.12 at 3:05 am

http://www.nytimes.com/2005/12/25/business/yourmoney/25japan.html?pagewanted=all

Just replace Japan with USA and USA with Canada! The similarities are eerie!

#104 VanLarry on 03.28.12 at 3:09 am

Yellow helicopter?

Reminds me of the 80s S&L crisis. Danny Faulkner, Empire savings and Loans. Of course no one remembers that.

#105 eagle eyes on 03.28.12 at 3:21 am

If the Chinese are coming to the Lower Mainland pounding down our doors to buy our real estate, then how come today 2 sales in Richmond:

5177 Jaskow – asking $988,00 sold $906,000
6231 Gibbons – asking $2.388 m sold for $1.428m

I don’t see any bidding wars here. Does anyone recognize those actors in the vid? The China buyer usually would use referred Chinese realtors. They don’t go with weird white guys.

#106 CHANGES on 03.28.12 at 3:55 am

Why The F$ck Don’t We Get Garth Turner On Global Flying Around In A F$cking Helicopter
http://youtu.be/AJRVOvho_RA

#107 TRT on 03.28.12 at 4:21 am

#67 First Wave Boomer

HAM and other foreign money comes here via a simultaneous dual transaction in both countries.

If someone sells a $10 million piece of property in China, they sell that money to a person/corp needing it there…it never “comes” here. Simultaneously, the same parties do a transaction in reverse over here with money already previously here.

I am in awe of mansions going up here in Surrey by the Indian community but more in awe of the Palaces sprouting in the Punjab countryside!

It is sickening and rampant…regardless of what Garth thinks…. Untaxed illicit money…

#108 Tie Dummy on 03.28.12 at 4:32 am

Garth “Word Up” Turner, I’m scared. You have all these old people about to cash out to pay for their final years of life yet who can afford those prices, young people that are saddled with massive debt with no jobs and now, (shivering) the Leafs have missed the playoffs again yet they build a huge bar that I’ve seen people puking under tables! What do these three things have in common? No one seems to care. Everyone just goes along, doing the same thing that they did yesterday, last week, last year. I’m afraid that we will all be sucked into a whirlpool of despair. What kind of future are we leaving for our children?

http://www.youtube.com/watch?v=eFTfWTqQ0dM

#109 Rental monkey on 03.28.12 at 4:44 am

@ 51 Cantbelieveit:

Thanks for that visual little diddy. I have a strong suspicion that’s BEACH GIRL, or at least thats what I envision.

#110 noodles 79 on 03.28.12 at 5:06 am

This may be a naive question, but I was wondering, can foreign home buyers, buying a 14,000,000$ property with very litlle down.,get a CMHC backed mortgage.If they can, we’re definitely f#%@&ed!

#111 Stevenson on 03.28.12 at 5:39 am

As I have said before, some of uou have no idea how rich people are in Asia. If you can’t afford then move away. It’s happened to many cities before, it’s progress.

It’s also about the opportunity and human habits and psychology. You see house and condo horny? Don’t run and sell…..

It may be too late now though cuz you missed the boat. I saw the opportunity and conquered while others like there tiny after tax dividend.

#112 Stevenson on 03.28.12 at 5:44 am

#62 Doug in Victoria

“Now I know how the mexicans feel”

So true! But they don’t whine and cry.

#113 John on 03.28.12 at 6:10 am

The way that “property virgins” perceive authority is the root of their behaviour, as well as their complete disinterest in the big picture. There is a faceless, efficient and benevolent “system” in place that has “the people’s” best interests at heart, and is to be trusted blindly.

They think like this: “Oxygen exists because I need to breathe”. What’s worse than blind faith in authority is the narcissism it’s built on. While being used as a pawn of speculation all along, the property virgin thought they were the center of the world…much the same way a 3 year old does, in his natural developmental process. Parents are gods, and the 3 year old feels magical and entitled…and usually very safe. It’s a child’s delusional, innocent state.

Taking on mountains of debt isn’t an option offered to 3 year olds….nor is expecting them to understand their world, objective worth, or real responsibilities to self, others and community.

A 30 year old narcissist isn’t a bad person, but he does have his judgment centers barely on life support.

It’s this “prototype” that is getting used by the pump-up. The problem isn’t the house they’re buying…it’s more about a delusional character structure.

And if you expand beyond this cohort, you’ll see it’s cross-societal, but better hidden due to “accidentally positive investment”. Kind of like being a 24 year old buying a house in Toronto just as the banking cartels engineered a speculation window in 1971 ( when the gold standard was ditched). It was just timing.

Is there that much difference between the 70 year old and the 30 year old today? Not really. It was all timing. It’s just that the scheme is different.

Talk to both. Find out how they view authority and themselves. That explains both identity and decisions made.

#114 bromance on 03.28.12 at 6:10 am

Weird how people can ignore examples of disasters all around them. Japan, USA, S&L crises ect. Just look south and see a flat out RE depression. You have no idea what its like, when one day you realize that instead of getting crazy rich, you’re were just plain crazy and are locked in perpetual poverty. You’ll never make a lot of money, and you really don’t know how to do anything useful like create wealth. In fact, your major skill is wealth destruction.

#115 Phoeey on 03.28.12 at 6:28 am

A bit of nonsense parroted about Australia here I see. The truth is that it is very easy for rich foreigners to buy property in Australia. Also we have massive immigration combined with extremely strict controls on building extra houses. The result is a massive shortage and high prices and very high rents.
To rent an ordinary house in Sydney costs $500 per week and it would typically take 60 minutes of travel to work. Did I mention that our huge immigration has NOT been matched by improved roads and trains?
Shortage-deniers like Aussie Roy will grasp at any straw like a rise in rental vacancies. This is nonsense. Real evidence of the shortage solved will be cheap rent for a decent house a decent commute from work. We are a long long way from that.

#116 detalumis on 03.28.12 at 6:29 am

Reverse mortgages are great. A guy in my neighbourhood had one and he just got carted away to heaven after a stroke; the company comes over and posts a notice on the door of the squirrel and rat infested dump, sort of like one of those QUARANTINE notices from the good-old-days. They are the ultimate revenge on your spoiled brat kids who expect “their inheritance” so they can buy their granite palace – no starter homes with old kitchens and bathrooms for them, no sirree.

It doesn’t matter that you let the house fall down around you and it doesn’t matter if the value of the place is a big ZERO point ZERO because YOU ARE DEAD or lying in LTC with no spouse at home either. It’s all “pie in the sky when you die” and make mine lemon meringue svp. Yeah all boomers should go for them and make sure you take out the maximum.

#117 Tie Dummy on 03.28.12 at 6:38 am

@ #51- Can’tbelieveit

“The realtors are fighting back with a new BPOE promo video!”
http://www.youtube.com/watch?v=qZDdcO4_5wA

“OMG! — Garth”

I can top that! Check out this tribute to the Maple Losers!

http://www.youtube.com/watch?v=LmX3Fcm0nhY

#118 Ben on 03.28.12 at 7:14 am

Love that grey and rain, that’s worth some bucks.

LMAO

#119 John on 03.28.12 at 7:18 am

Just wanted to add a cultural context to the low identity property virgin decision making ecosystem. Let’s not forget that a 28 year old man taking on a 400,000 dollar debt is usually “doing it for his wife”.

When Canada won Miss Universe in 2005, The Star decided to black out any news or coverage of it. And this morning, in The Star, this appeared:

( selected quote: “this bi-gendered view of the world is a cause of…negativity”).
http://www.thestar.com/iphone/Living/article/1152370

You can’t imagine what this looks like from South America. How do you expect a 28 year old property virgin to NOT make decisions? It’s illegal to be male, have balls and say NO to the loan. The man isn’t even aware it’s a bad decision.

Canada is neutered. The women don’t like it…and will rightfully blame the men for giving away their balls.

#120 Aaron - Melbourne on 03.28.12 at 7:24 am

@ #72 Aussie Roy on 03.27.12 at 11:17 pm
Aussie Update

Ireland
You know you are in trouble when the Irish are worried about your housing market.

Roy, (et al) did you catch this one? Dicing with debt: Irish collapse – 45 mins

http://www.abc.net.au/iview/#/view/908646

#121 Work & Tumbel on 03.28.12 at 8:08 am

To all who visit this blog Read post #54 Mid century a second time . This happends all the time and you may need to let this sink in. (I got involved just in time)

#122 Steven Rowlandson on 03.28.12 at 8:44 am

Real estate ownership with out citizenship must be made illegal….
Second issue:
If more land for home construction were available and developed the price would not come down it would stay up or even go higher. The greater availability of homes would attract buyers which would create more demand driving up the price. Real estate isn’t really a market, it is a religion and a speculative orgy… In this case the laws of supply and demand do not function if they exist at all. It will take something truly devastating for a long time to bring people to their senses.
Something like 50% interest rates, nuclear war or an ice age or all of them. How do you set an ice age Garth?

Snow tires & rims. — Garth

#123 unbalanced on 03.28.12 at 8:46 am

Why buy in the U.S.A. Prices keep going down. There has to be some very rich americans. Why aren’t they buying up all the deals. Yup, yup, drink some more kool-aid. What does it cost to have those extra places? I can only sleep in one bed at a time, no matter where I stay.

#124 Aussie Roy on 03.28.12 at 8:51 am

Aaron – Melbourne on 03.28.12 at 7:24 am

Good 4 corners program.

I didn’t know whether to laugh or cry to read the article I posted. It is amazing how those O/S can see are bubble but very few here can.

Free subscription required for the articles below.

At last someone is prepared to tell us the truth as to why Australian mortgage interest rates are not going to fall substantially any time soon. And at the same time it shows the significance of the Bank of Queensland loss.
In his KGB interrogation Pimco’s Peter Dorrian explained that the major overseas wholesale lenders to Australian and world banks visit Australia and study our housing market. They conclude that there is great danger of a bubble-like collapse.
Here in Australia we believe that the chance of this happening is remote but the people who fund about 40 per cent of our banking assets think we are simply ignoring the risk.

http://www.businessspectator.com.au/bs.nsf/Article/mortgage-interest-rates-BOQ-property-Peter-Dorrian-pd20120328-SSR3J?OpenDocument&src=spb

Pimco talk debt

offshore investors’ view of our banks and one thing you’d have to say at the moment is that there’s quite a wide difference of opinion between Australian investors’ view of our banks and offshore investors’ views, and it’s largely got to do with what you think is going to happen with the Australian property market. Even my colleagues in the US look at the Australian property market and say it’s the most overvalued property market in the world. To be honest, it’s a serious bubble.

Of course, if the government was to guarantee the banks, it would make a huge difference, wouldn’t it?

We’re not saying we don’t invest in Australian banks. We hold quite a lot of Australian bank paper in our portfolios. But simply transferring the risk from the banks to the government? Then people start looking at the government just as they are in Europe, just as they are in other parts of the world.

http://www.businessspectator.com.au/bs.nsf/Article/KGB-Peter-Dorrian-Pimco-bond-equity-market-yield-b-pd20120328-SSV4N?OpenDocument

#125 Beach Girl on 03.28.12 at 8:52 am

#109 Rental monkey on 03.28.12 at 4:44 am

@ 51 Cantbelieveit:

Thanks for that visual little diddy. I have a strong suspicion that’s BEACH GIRL, or at least thats what I envision.

___

I take that as a compliment, same attitude, but I have much finer features and a tad slimmer. But just as happy. Wonder what she was paid for that? I want a job doing that too.

#126 Herb on 03.28.12 at 8:55 am

#99 Daystar,

thanks, Lorne.

#127 Pre-Approved on 03.28.12 at 8:56 am

I’ve been following this blog for some time, but am a first time poster. 28 years old with a wife and baby on the way.

I’ve owned a place in the GTA (not downtown) since the mid 2000’s. It is a nice 3 bedroom townhouse with everything my wife and I will need for at least the next five years. It was and remains well within what we can afford. However, because we are expecting I figured I’d go look at a few places.

I am a finance professional and will have an MBA done within the month, so I preface this by stating that I understand the concepts of interest and debt well, unlike many others in my age group who may or may not be virgins.

A mortgage professional I spoke with indicated that the maximum mortgage we could qualify for right now was $1,200,000, with a final purchase price of $1,400,000 considering the equity we’ve built up in our current place and other investments. Imagine the granite we could get! Infinite pot lights!

Here’s the kicker… I’m still in school – I’ve had ZERO income while I’ve been here. My wife makes well under $100,000. The decision was based solely on credit rating, my wife’s income, and my stated income for a job I have yet to start. No proof of job offer required.

It makes me angry that some people believe it is solely foreign ownership at play here. News stories like the link to Global TV Garth posted do nothing but serve to fan the flames of racism in Vancouver.

As Garth has stated before on this pathetic blog, there are all sorts of factors contributing to this bubble.

However, I’d propose the real story is this: There is a very strong “Keeping up with the Joneses” mentality amongst those in my generation. We have always been able to get what we want, when we want it, and we’ve all been raised to think we are extra-special. Don’t tell me the price, just the payment. Payment too high? Let’s bump it up to a 30 year am. We wouldn’t be caught dead in the “wrong neighbourhood” in Oakville, Markham, Milton or Vaughan. Wouldn’t be caught dead in a home without stainless steel, and serious panache. Wouldn’t be caught dead in a home that was less granity and more affordable than our friends… Oh wait…

We think EXACTLY like the Americans did before the financial crisis. Couple this with zero down, low rate mortgages, and all of my friends buy houses that are “better” than the one we just purchased. Simple as that. See you all on the other side – can’t wait to snap up my McMansion after the crash. Party at my place – Garth, you’re invited.

Can I bring my biker friends? — Garth

#128 TurnerNation on 03.28.12 at 8:57 am

#63CrowdedElevatorfartz on 03.27.12 at 10:55 pm

Yeah I don’t believe that BS. Complete coincidence of the following countries falling into ruins within a 5-year period: Iceland, Spain, Italy, Greece, Turkey, Syria, France Libya, Yemen (did I miss any?) USA, and next up, Canada.

It’s normal for Canada to hold hold 4 elections withig a 5 year period in order for their man to get in! Perfectly normal. That the last election was so sorely rigged (Toronto voters with UPS mail drop addresses, robo calls), is de rigeur. Do you Iraq much?

Little history lesson, take the polar opporise meaning of our mind controllers’ speeches: the War on Comnumism was a was OF the same. South East Asia is firmly communistic, and produces our Ipads.

Next up, South America was taken over via the Argentian financial crisis. Ditto Russia financial collapse of 90s. Early 2000s: Iraq, Afghan. Say, did you ever wonder why USA would invade Iraq in 1991 but leave Saddam in power? Walking away leaving him unscathed after unleasing the mighty USA military machine on to the country and its people? Make sense to you? Of course not. He was left in power for a reason. There’s no us or them, it’s all the same people controlling *both* sides. I just gave you proof. It’s a game. He came in handy, 10 years later, with “We know he has WMD” to terrorize us.

Now we’re on to Europe and N. America.
All caused by “sub prime” homeowners! wink wink.

#129 Kip on 03.28.12 at 9:00 am

“Face it, the whole system has been engineered to rope in virgins”

Two days ago it was all the fault of Boomers. I suppose Boomers engineered the whole corrupt system.

How many 20-year-olds do you see in Parliament? — Garth

#130 Steven Rowlandson on 03.28.12 at 9:07 am

#90 Suede

Rent a helicopter for $230/hr – or better yet, $460/hr for the bigger one for two hours tops

I think if we don’t have a real estate depression equal to or worse than in the states you will need pay rates the same as what is needed to rent helicopters to buy real estate. It will get that bad or worse if it isn’t already.

#131 Kip on 03.28.12 at 9:09 am

#116 detalumis

Right on man! Dead is dead, take the reverse mortgage and screw em all! Let the county bury me.

The ultimate slap in the face to the system has to come from Kenneth Lay of Enron fame. Just when it appeared the judicial system was going to administer a slight slap on the wrist, the guy keels over dead of a heart attack! Perfecto!

The system is corrupt, screw it hard!

#132 Kip on 03.28.12 at 9:14 am

“How many 20-year-olds do you see in Parliament? — Garth”

None, they can’t get the Boomer vote.

Or the 20something vote. — Garth

#133 CrowdedElevatorfartz on 03.28.12 at 9:17 am

@#124 Turnernation
you left out the Military Industrial Complex, ZOG, Masons, the Bildeberg Group, the IMF, Ft Knox is empty, etc, etc, etc …………

Stock up the bunker with Buckshot,beans and toiletpaper. mmmmmmmm soft toilet paper will be worth MORE than gold……think about it.

#134 Kevin on 03.28.12 at 9:32 am

I think reverse mortgages are a horrible product (like every other “investment” sold by a bank or insurance company), but I have a couple of problems with this example.

How much would home values have to decline in order for all equity to be gone after 10 years?

Well, if the rules allow you to borrow up to 40% of the value of the home, and you took $150,000, then the value of the home at year 0 is $375,000.

After 10 years, at 6%, the $150,000 borrowed amount grows to $268,627. In order for all equity to be gone by this point, the home’s value must have dropped from the original $375,000 to $268,627 – a difference of $106,373, or 28%.

My two problems with this example are: 1) How likely is it for a house to lose 28% of its value over a 10-year period? and 2) Who cares? The only person who loses here are any potential benefactors. The elderly owner has turned stale, useless equity into vastly more rewarding vacations and medicine. Let the greedy, entitled kids save for their own damn retirement. The goal of life is not to leave a fat nest egg for kids who’ve already been coddled their entire lives – it’s to die broke.

Someone getting a reverse mortgage at age 60 cares a lot about having equity left at 70, if the bulk of their net worth is in a home. Stop thinking this is an end-of-life financing, since for most subject borrowers now it is not. — Garth

#135 Condo Sucker on 03.28.12 at 9:32 am

“…often paying double what rent costs to live in the same place.”

You’re being quite generous there Garth. I would reword it as paying double to live in a smaller place, given the size of 1 bedroom condo units nowadays. You’re right, makes zero sense. Of course, the herd doesn’t see it that way.

#136 Sebee on 03.28.12 at 9:32 am

Can I bring my biker friends? — Garth

Are you talking about the hard core well educated, well mannared, financialy literate, bathed and fresh smelling, Sweet Caroline on the hog speakers, latte drinking at stops, full-serve gas station only crew you roll with? I’m sure you’re welcome over at anyone’s place.

What is the name of your crew? Liquid Angels? :-)

The Mild Ones. — Garth

#137 Ret on 03.28.12 at 10:00 am

“The MSM reports that there is a 7 years processing time just to get a permanent resident visa for Canada.” Yeah, right.

All the foreign students at McMaster get permanent resident visas in less than one month. That way they don’t pay foreign student fees and they get OHIP cards as well. They are also eligible for Canada student loans, CMHC mortgage insurance and can sponsor other family members. The same goes on at every college and university in Canada. Start your studies and just never go home. You’re in baby!

A few US residents playing the game to get around the crazy US tuition prices. They’re foreigners too!

The how to link:

http://oisa.mcmaster.ca/immigrationmatters/changeofstatus.cfm

#138 dd on 03.28.12 at 10:15 am

Forbes – SWIFT Banking Payment System:

“India is now told to cooperate or suffer the consequences implying tacitly that payment network sanctions are a real possibility…forecast how the BRIC economies and other emerging trade areas around the world may soon look to establish their own SWIFT-type transfer systems so as not to get locked out of the international monetary system in the future. The backlash from this action will lead to the remonetization of gold around the world as barter and currency substitutes to the U.S. dollar gain in importance.”

http://www.forbes.com/sites/jonmatonis/2012/03/27/the-payments-network-as-economic-weapon/

#139 Hicksville Alberta on 03.28.12 at 10:23 am

Don’t bet on a responsible real estate budget from H & F tomorrow based upon the milk toast budgets of Ontario and N.B. yesterday.

None of the current so called leaders have any interest in taking responsibility for their previous mismanagement so the game will go on.

Perhaps there is hope for change at least in Alberta as it appears the current Regressive Conservative Provincial Government are about to get their asses handed to them by the Wild Rose Party and hopefully that will be the case as i think some real new blood in the Alberta political arena is way past due.

#140 The American on 03.28.12 at 10:36 am

At #51: Can’tbelieveit… Seriously, WTF was that? If I were a Vancoverite, I would be humiliated right now. Trust me, i understand.

http://www.youtube.com/watch?v=lwniFHoRL3Y

http://localbrew.com/episodes.php?episode=4&clip=2

http://localbrew.com/episodes.php?episode=5&clip=3

http://localbrew.com/episodes.php?episode=4&clip=3

http://www.youtube.com/watch?v=AlYTHtTTZIw&feature=pyv

http://www.youtube.com/watch?v=e04N9FNo2p0&feature=related

#141 Grantmi on 03.28.12 at 10:43 am

•Immigration Changes: Admissions to Canada will be tailored more closely to the needs of business and to address labour shortages.

http://www.thestar.com/printarticle/1152754

There goes the HAM money!!!!

Come here! Go away!!!

#142 EdmontonJim on 03.28.12 at 10:49 am

#122 Steven Rowlandson

You raise two complicated issues:

Real estate ownership without citizenship is tricky because the ownership of land is different from say, owning a car. You cannot own land in Canada, only the title and rights, which are granted by the provinces. (or the Federal Government in the Territories). Since the provinces don’t have such a thing as citizenship it would amount to the federal government telling the provinces what to do with their land.

As for house prices rising with more development I think you miss some of the links of causality. People, like to move in packs. When someone adds units to an area, it allows more people to move in, and when people move in, it makes more people want to move in, which increases the demand and the price.

However, people moving in is balanced by people moving out of other places, which reduces the demand in those places.

Also, there is always a point of saturation, where the number of new units exceeds the demand. If the neighborhood is stable, then developers will simply stop adding units and the price stabilizes. If the neighborhood is unstable, then a housing glut will tend to depress the value of all units and the demand and price drops.

#143 Dontcallmeshirley on 03.28.12 at 10:50 am

#127 Pre-Approved,

Your story impact would rise dramatically if you name the lender.

It couldn’t have been a BIG bank.

#144 daystar on 03.28.12 at 10:53 am

#126 Herb on 03.28.12 at 8:55 am

Ditto :)

#145 Wage Slave on 03.28.12 at 10:57 am

87 The Dude on 03.28.12 at 12:48 am:

It’s a feedback loop accelerated by fiscal policy, advertising, generational pressure, low interest rates, demographics, and the remaining points you have mentioned on this site. It might be considered hysteria at this point. It ends when it ends, but I think our culture has changed because of it.

Your whole comment was great, I especially liked the quoted bit. Well done!

54 midcentury on 03.27.12 at 10:39 pm:

Thanks for sharing that. What a rotten situation to be put in (for your dad, brother, and yourself). Glad you’ve made it out, and you have reinforced for me the warning in the last part of today’s post.

#146 eddy on 03.28.12 at 11:07 am

If we had a government reverse mortgages would be illegal.
“reverse morgage’ is senior abuse.

My pet peeve is market value assessemnets. That is classic sernior abuse.
The city of Toronto has solution for their senior home owners who cant afford the bubble assessements-
“can’t afford your assessemnt old guy? no problem. don’t pay a cent, we’ll just roll it over each year, add interest, and collect when you check out, your estate pays the lein, kinda like a reverse mortgage”

Of course Haarper loves the combination of bubbles and MVA, because cities are off his back

Have you heard how Toronto city hall cries about being broke? Imagine the tears if we get lower assessements, they’ll need bail outs from ottawa

#147 jess on 03.28.12 at 11:09 am

That clip is very informative with just the right balance of accurate estimates and oxymorons especially the “high prices are good but the real “contributors are leaving.
—————————

2004
Bernanke claimed the “Great Moderation” delivered numerous benefits:

…”Lower volatility of inflation improves market functioning, makes economic planning easier, and reduces the resources devoted to hedging inflation risks. Lower volatility of output tends to imply more stable employment and a reduction in the extent of economic uncertainty confronting households and firms. The reduction in the volatility of output is also closely associated with the fact that recessions have become less frequent and less severe.” …

http://www.federalreserve.gov/BOARDDOCS/SPEECHES/2004/20040220/default.htm

#148 City Slicker on 03.28.12 at 11:19 am

Freedom, mobility, independence, backpacking in Chile, or joining a terrorist cell? Nope, forget all that hippy stuff. This is Gen Mortgage. They can’t wait to be amortized and lie prostrate, in the nude, on the raw, cool, glassy, ramrod stoniness of a granite countertop. That must be it. Because otherwise, it makes no sense – often paying double what rent costs to live in the same place, shouldering massive debt and risking big losses in the inevitable correction.
———————————————————-
Thanks Garth I needed the good laugh this morning. And confirming the brethren, it’s easy to forget and appreciate the no hassle freedom that comes with renting.

#149 Ret on 03.28.12 at 11:21 am

•Immigration Changes: Admissions to Canada will be tailored more closely to the needs of business and to address labour shortages.

What exactly does this mean? Who knows.

If I need some work slaves to work 12 hour shifts for minimum wage in my bakery or meat packing plant 50 kilometers from Nowhere Sask., and I can’t get workers, then I guess that I have a labor shortage that the government will have to address through immigration increases. More immigration=more votes is the real story.

Canadians would like to know where all of these skilled, living wage unfilled jobs are. Timmy’s????

#150 Coraline on 03.28.12 at 11:22 am

This was a seriously funny post.

#151 MikeB on 03.28.12 at 11:23 am

Honestly… people should be very happy that foreigners find Canada appealing. Imagine the opposite.. It is not only the asians but Europeans like the highly educated Irish who look to places like Ontario or out west to find jobs. We are gaining the best of the best from other countries and I cannot see that being a bad thing. Some 150 years ago it was the scots and english … then we had the Italian and Portuguese population, both of whom have brought so much to our country … immigrants have brought prosperity to Canada and now it will be a new dimension of prosperity. Don’t really see the downside. Wages will eventually have to go up to compensate for any higher costs and our kids will finally have to realize that they must wholly and completely pull up their socks in education and compete globally. We cannot rest on our laurels that is for sure.
As for Garth’s mantra… of course do not put all your eggs in one basket… How basic is that. Live below your means… yes pretty obvious…. Is CMHC a joke… yup but it has been for decades. Will the taxpayers in Canada be handed the dirty end of the stick. You betcha. Guaranteed.. but this is nothing new. What is new are the A-hole realtors making more coin than our doctors. Now that is perverted. There are some craggly old realtor farts who have moved up in the real estate mafia to Capo or General positions and are making millions of dollars in commission every year. And for what?? Showing someone where the bathrooms are. It is perverse indeed and it sends a wrong message to our children. The lawyers who have 100% liability for the transaction make a couple grand at the best and the agents who have zero liability walk away with 20 grand or more. It is of course funny to listen to them complain that the bulk of the realtors do not make enough money to cover their yearly costs…. a licence fee of a few hundred or so and gas and their office fees and bad hours. Dude… they make more money in 3 transactions then 95% of canadians… To compound it they come to your door and suggest it is a good time to sell…When I ask why they don’t sell if it is such a good time… they bluster that they are not ready to sell just yet and want to see their capital appreciation when they retire. They spew this garbage all the while I am closing the door on their face.
So what is the solution.???… drop commissions to one quarter of a percent and then we will weed out the A-holes… The 2 percent commission was moderately ok when houses were 100-250K… Realtors… many housewives doing it on the side… could make an ok living with little to no training.. Now at a million a pop they can make more money than trained professionals. That industry needs to be overhauled.

#152 Steven Rowlandson on 03.28.12 at 11:23 am

How do you set an ice age Garth?

Snow tires & rims. — Garth
No good answer for that one eh?
Based on ice core research ice ages have been a regular cyclical event for the last 2.5 million years.
It goes like this. You get a big iceage that lasts an average of 105 thousand years followed by a interglacial warm period that lasts an average of 11,500 years and after that it’s bacback into the deep freeze for roughly 105,000 years.
That is the cycle and we are almost at the end of an interglacial period. All those zillion dollar homes we are all bitching about or bragging about won’t be worth jack once it becomes obvious that its back into the deep freeze. According to research on the subject the transition period can be as short as 3 to 20 years.
I would say it casts doubt on the wisdom of paying so much for so little. The next real estate boom just might be in Mexico. Nature will screw all the virgins and everyone else in more ways than one.

http://iceagenow.info/

#153 mel in victoria on 03.28.12 at 11:30 am

Is this Cam Good dude related to the famous broadcaster at CKNW??

#154 debtified on 03.28.12 at 11:31 am

Garth, what you said (quoted below) is so true. I am in my mid-30s and every single one of my friends think that I am wasting my money by renting and traveling.

I’ve visited 27 countries so far; I have skydived (almost died), scuba dived, bungy jumped and hiked several national parks in several coutries. I’ve met so many people around the world. I continue to keep in touch with some of them and, from time to time, when I travel some of them meet up with me wherever I may be. Best of all, I get to see how other people live in other parts of the world. It puts everything in perspective. I don’t complain as much about the shortcomings of living here in Canada.

In contrast, my friends would rather buy a big house (as big as the bank would allow them) and fill it with stuff. When we have gatherings at these houses, they all ask me how I am able to afford all the traveling that I do. I simply point out that I don’t have a $50K car that they have in their garage (sometimes they have multiple of them and they replace them frequently while I still drive the same car I bought 13 years ago). They have humongous TVs (in every room); all the toys (PS2, Xbox, Wii – every single one them) and, most importantly, I don’t spend thousands of dollars every month like they do in interest payments for their mortgage, HELOC and credit card balances.

I pay for experience; not stuff. And the best part is, I have more savings than they do.

If you hang around people in their twenties and thirties the way I do (they’re hot), you soon discover there’s nothing the majority of them want more than real estate. …

Freedom, mobility, independence, backpacking in Chile, or joining a terrorist cell? Nope, forget all that hippy stuff.

#155 Joe Q on 03.28.12 at 11:36 am

Hey Garth,

Startling Acceleration of the crash occurring in Richmond, BC – at a time when the “spring market” is supposed to be heating up!! New home “owners” who bought in January are already underwater. Next come the defaults. R.I.P.

http://www.yattermatters.com/2012/03/community-snapshot-is-richmond-in-the-ditch/?src=widget

Same thing in Burnaby. Stick a fork in it.

http://www.yattermatters.com/2012/03/community-snapshot-burnabys-tulips/?src=widget

#156 mad vancouver on 03.28.12 at 11:41 am

This one is for BPOE, the eternal optimist:

Richmond prices down 10% in one MONTH!

http://www.yattermatters.com/2012/03/community-snapshot-is-richmond-in-the-ditch/

If this is not a crash, what is?

#157 eaglebay - Parksville on 03.28.12 at 11:46 am

More jobs, this time in Debtario.

http://www.theglobeandmail.com/globe-investor/toyota-adding-400-jobs-at-ontario-plant/article2383887/

#158 disciple on 03.28.12 at 11:48 am

Can someone explain something to me? I’ve never, and still don’t understand the basis for the argument that a political leader will act solely with the underlying intention to “stay in power”. What in God’s name does that mean?

If you think clearly about it, long and hard, you will realize that such a statement is utterly meaningless in a truly democratic and non-monarchical socioeconomic organizational structure; i.e…, it’s another ruse. Joke on you.

You could make the assumption that “staying in power” refers to the ease with which a political party can re-distribute wealth in favour of their friends and allies within a society. But then you would be conceding the fact that the society in question is non-democratic and non-egalitarian and it would defeat the whole purpose of the original electoral excercise.

And, if you made such an assumption, you would be acknowledging that the sole purpose of voting is to reinforce that corruption.

So, when we see comments in the media such as the Liberals did this or that so that Premier Dad can stay in power without regard for long-term consequences, one should remember that if such a statement is meted out by a reputable journalist or a national media empire, that it is a form of Mind Control whereby the intended conclusion of the discussion is already pre-determined as factual and obvious, when in fact, it is nothing of the sort; thus, rendering all succeeding parallel conclusions to be false also.

Did I lose you?

#159 Snowboid on 03.28.12 at 11:50 am

#88 Makavelli on 03.28.12 at 1:16 am…

“I’m at 7 flips now and up over $300k”

Wow, that’s big-time for Vancouver – what were you flipping? Double-wides?

#160 "You can't afford Canada? Then MOVE" - Cam Good 2012 on 03.28.12 at 11:51 am

As a poor Vancouverite that has 8 million annually in transit fare evasion ( just released yesterday), I am sick of Cam Good selling our country off to the highest bidder.
You can’t do this in Thailand, Phillipines, or Mexico. If anyone in govt. cared, this would be called “Treason”.

Anyway, Globlow didn’t get the news memo – no fake news…… CRTC what were you thinking!!!!!
http://www.theglobeandmail.com/news/politics/ottawa-notebook/crtc-ditches-bid-to-allow-fake-news/article1921489/

#161 mad vancouver on 03.28.12 at 11:59 am

@RET

My reading of the like you provided (http://oisa.mcmaster.ca/immigrationmatters/changeofstatus.cfm) is exactly the opposite of yours: they need to get a PR card to see a decrease in tuition fees. This link does not say anything about speeding up PR application.

All the international students in my college pay 4 times the regular fees, and the college LOVES them: international students are even allowed to register 2 weeks before Canadian students so that they can choose the courses they like. If a class as a wait list of 20 international students or more, the college will add a new section.

If there is a way to pay 4 times less, I am sure my fellow students would be delighted to know. So please tell us more.

#162 live within your means on 03.28.12 at 12:17 pm

#127 Pre-Approved on 03.28.12 at 8:56 am
I’ve been following this blog for some time, but am a first time poster. 28 years old with a wife and baby on the way.

I’ve owned a place in the GTA (not downtown) since the mid 2000′s. It is a nice 3 bedroom townhouse with everything my wife and I will need for at least the next five years. It was and remains well within what we can afford. However, because we are expecting I figured I’d go look at a few places.

I am a finance professional and will have an MBA done within the month, so I preface this by stating that I understand the concepts of interest and debt well, unlike many others in my age group who may or may not be virgins.

A mortgage professional I spoke with indicated that the maximum mortgage we could qualify for right now was $1,200,000, with a final purchase price of $1,400,000 considering the equity we’ve built up in our current place and other investments. Imagine the granite we could get! Infinite pot lights!

Here’s the kicker… I’m still in school – I’ve had ZERO income while I’ve been here. My wife makes well under $100,000. The decision was based solely on credit rating, my wife’s income, and my stated income for a job I have yet to start. No proof of job offer required.

It makes me angry that some people believe it is solely foreign ownership at play here. News stories like the link to Global TV Garth posted do nothing but serve to fan the flames of racism in Vancouver.

As Garth has stated before on this pathetic blog, there are all sorts of factors contributing to this bubble.

However, I’d propose the real story is this: There is a very strong “Keeping up with the Joneses” mentality amongst those in my generation. We have always been able to get what we want, when we want it, and we’ve all been raised to think we are extra-special. Don’t tell me the price, just the payment. Payment too high? Let’s bump it up to a 30 year am. We wouldn’t be caught dead in the “wrong neighbourhood” in Oakville, Markham, Milton or Vaughan. Wouldn’t be caught dead in a home without stainless steel, and serious panache. Wouldn’t be caught dead in a home that was less granity and more affordable than our friends… Oh wait…

We think EXACTLY like the Americans did before the financial crisis. Couple this with zero down, low rate mortgages, and all of my friends buy houses that are “better” than the one we just purchased. Simple as that. See you all on the other side – can’t wait to snap up my McMansion after the crash. Party at my place – Garth, you’re invited.

Can I bring my biker friends? — Garth

////////////////////

BIL split with his common law wife after 18 yrs (couldn’t stand her, to put it mildly). He had to pay her off & the lazy

#163 Lorne on 03.28.12 at 12:19 pm

#153 Mel In Victoria
I was wondering the same thing…is Cam Good related to Bill Good?

#164 Cy on 03.28.12 at 12:20 pm

#154

Amen.

I get looked upon as some sort of anomaly among my friends and family, like valuing a life of experience over the mindless consumption goods is somehow a waste of my existence. I’ll just save and invest, travel, enjoy what I can afford in life, live within my means. At the end of the day I value my time more than anything and I’m not willing to waste most of my life trying to pay off something that I couldn’t really afford in the first place.

It really is depressing to watch friends and the like chain themselves to the debt ball and its pretty hard listening to them chortle on about how much their house is worth and how real estate prices will never drop, without giving any evidence. It’s a sad state of affairs.

#165 tiny ponies on 03.28.12 at 12:25 pm

More than 40 per cent of Canadians surveyed are unsure about their ability to afford their homes in the case of a two per cent interest rate hike

http://ca.finance.yahoo.com/news/bmo-survey-suggests-2-interest-150554165.html

#166 Kevin on 03.28.12 at 12:28 pm

Outstanding Canadian residential mortgage credit over the years.
http://tinyurl.com/6npz3r4

$14.6 billion in Jan 69
$88.8 billion in Jan 80
$233 billion in Jan 90
$421 billion in Jan 00
$965 billion in Jan 10
$1.111 trillion in Jan 12

Here is the annual change in mortgage debt to GDP. Mortgage credit growth to GDP has been larger in the last decade compared to the 80’s.
http://tinyurl.com/885lec6

Here is the annual change in mortgage debt to personal disposable income. Mortgage debt growth to personal disposable incomes has been larger in the last decade compared to the 80’s.
http://tinyurl.com/7v9r96h

Here is the growth in mortgage debt,GDP and personal disposable incomes since 1982.
http://tinyurl.com/6wf6acp

Two of these grew at about the same pace as each other for almost 30 years while one saw an explosive expansion. Guess which one is the runaway train.

#167 gladiator on 03.28.12 at 1:05 pm

@127 Pre-Approved: don’t wanna rain on your parade, but if you think your MBA will make employers beg you to work for them, you may be unpleasantly surprised.
I know MBAs who had to start with salaries from the mid-30s. Experience is far more important to the employers.
Hope everything works out well for you.

#168 Victoria on 03.28.12 at 1:12 pm

Properties over $1 million seem to be selling in Victoria now. About 4 sold this week. I wonder if it is HAM?

Just asking.

#169 coastal on 03.28.12 at 1:13 pm

Stupidest part of the Cam Good video is that rich guys have been renting copters to buy real estate for decades. He’s nothing other than a ho from the east side who latches on to rich clientele. Once he is no use to him they will turf out the back door like piece of crap on their shoe and use their own Asian agents.

Of course no mention wether they bought the place or not, it’s well known the Asians don’t like the island and is why the HAM here is minimal.

#170 Victor on 03.28.12 at 1:24 pm

Home affordability uncertain for many with even small rate hike: report

Published Wednesday, Mar. 28, 2012 12:34PM EDT

An interest rate hike of 2 per cent would leave four-in-10 Canadians unsure about whether they could afford their homes, according to a new study from the Bank of Montreal.

The survey, compiled for BMO by Leger Marketing and released Wednesday, found 43 per cent believe an interest hike would either hamper their ability to pay or leave them on unsure footing.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-affordability-uncertain-for-many-with-even-small-rate-hike-report/article2384125/

#171 live within your means on 03.28.12 at 1:34 pm

#127 Pre-Approved on 03.28.12 at 8:56 am

Can I bring my biker friends? — Garth

////////////////////

BIL split with his common law wife after 18 yrs (couldn’t stand her, to put it mildly). He had to pay her off & the lazy

Your comment is awaiting moderation.

/////////////////

Oops – Must have hit a wrong key. Plus I meant to delete part of #127’s comments. Maybe that’s how I lost 4/5 hours work on our taxes. Maybe I gotta cut my nails. :-) That would be really hard, as I was a nail biter for 50+ yrs.

As I started to say – BIL split with his common law wife after 18 yrs (couldn’t stand her, to put it mildly). He had to pay her off & the lazy, but highly attractive, woman stole money from him & their business as well. He found out later.

To try & make a long story short, he met a ‘more beautiful’ woman shortly after. They married a year or so later. He paid off the mtg, His wife (chemist – pharma sales rep) has been out of work for 2-3 years (her fault), yet they bought Bosch washer, dryer & dishwasher, redid their kitchen, & installed a huge SS Freezer next to a huge SS Fridge What is really insane is that both have very little food in them. My BIL will drive to the grocery store 1/2X a day, even after work cause he forgot something. BTW, he’s 56 & she’s 18 yrs younger. They have an 8 yr. old together & she has a 19 yr old son from her previous marriage. She pampers both of them.. BIL has a good PP, but no investments & will not invest since he lost oodles of money in Nortel or whatever? They haven’t been back to see my PIL’s in France for several years. No wonder, they can’t afford it & my PIL’s won’t put money in a banking account they can access from Canada.

You can always bike with DH & his Beemer & Harley friends Garth. :-) Actually, DH, his bro from Mtl & a couple of local Newfie friends are planning on a week ride in Newfoundland trip this summer.

#172 Blacksheep on 03.28.12 at 1:38 pm

Disciple #158,

“Can someone explain something to me? I’ve
never, and still don’t understand the basis for
the argument that a political leader will act
solely with the underlying intention to “stay
in power”. What in God’s name does that mean?”

I’m here for you, Brother.

“you will realize that such a statement is
utterly meaningless in a truly democratic and
non-monarchical socioeconomic organizational
structure.”

Yes.

“But then you would be conceding the fact that
the society in question is non-democratic”

Uh-Huh

“acknowledging that the sole purpose of voting
is to reinforce that corruption.”

Of coarse.

“one should remember that if such a statement is meted out by a reputable journalist or a national
media empire, that it is a form of Mind Control”

Preach’in to the choir!

“the intended conclusion of the discussion is
already pre-determined as factual and obvious,
when in fact, it is nothing of the sort”

Shhh….supposed to be a seekwet.

take care,
Blacksheep

#173 Angela on 03.28.12 at 1:58 pm

Perhaps Uncle Stephen and Uncle Dalton should have been providing an example of how to save money…

#174 spaceman on 03.28.12 at 2:09 pm

Asian buyers are being caught up in their own bubble trap, the buy which push’s prices up, and when they see prices going up, they buy even more.

Think Tulip Bulbs, what happens when these Greater Fools Realize the Ponzi is over ?

Locally the last couple of weeks , Victoria has seen a moderate up swing in sales, some at or above list, and some at or above assesment value, could it be because they took advantage of the 2.99 special?

#175 Bench Warmer on 03.28.12 at 2:14 pm

If a home that was CMHC insured is foreclosed on and the bank makes a claim, who ends up with the house?

#176 Adviser on 03.28.12 at 2:18 pm

#167 gladiator on 03.28.12 at 1:05 pm
@127 Pre-Approved: don’t wanna rain on your parade, but if you think your MBA will make employers beg you to work for them, you may be unpleasantly surprised.
I know MBAs who had to start with salaries from the mid-30s. Experience is far more important to the employers.
Hope everything works out well for you.
———————————————————

Completely agree, an MBA is no longer that one way ticket to glamorous jobs and money. Too much competition in finance from highly experienced US expatriates following the Wall Street blood bath.

Nonetheless it does provide a level of differentiation, just not worth 50 to 100K anymore.

An MBA Grad

#177 NCYer on 03.28.12 at 2:28 pm

My mom called me to talk about her upcoming lawn upkeep this season and how she wanted to save from having aeration done and just do the weed spray and fertilizer treatment. That reminded how much I don’t miss owning my home; the weekly yardwork, the upkeep with lawnmowing and the cost of maintenance (soil, fertilizer and grass seeds) etc.

Renting rocks!

#178 Blacksheep on 03.28.12 at 2:28 pm

Just noticed, used coarse when it should be, course.

Stuppid englash languge.

take care,
Blacksheep

#179 Math is Fun on 03.28.12 at 2:35 pm

How to spot the top of the RE market:

– The city gets a Housewife show.

#180 Iconoclast on 03.28.12 at 2:40 pm

I wonder what would happen to real estate if they decide to evacuate Tokyo? How many Fukushima refugees could Canada handle?

http://www.washingtonsblog.com/2012/03/tokyo-soil-hit-with-fukushima-radiation-would-be-considered-radioactive-waste-in-the-united-states.html

#181 Bigrider on 03.28.12 at 2:51 pm

Garth, is it possible you are changing your tune with regard to the overwhelming subjective evidence of asian influence on our real estate markets?

I look around Richmond Hill and there are more and more everyday as homeowners.

Happy to have them.

#182 jess on 03.28.12 at 2:54 pm

158 disciple
two headed coins
songs for muppets
http://muppet.wikia.com/wiki/One_of_These_Things

FRONTLINE
A Private Investigator Explains the “Dark Arts” of Tabloid News
March 27, 2012, 10:48 pm ET by Zachary Stauffer

…” a bag containing a laptop computer, phone and paperwork found in a bin in an underground car park near their £1.5million Chelsea Harbour apartment last July.”

Read more: http://www.dailymail.co.uk/news/article-2114838/Phone-hacking-probe-Rebekah-Brooks-husband-Charlie-arrives-Cheltenham-Festival-just-day-phone-hacking-arrest.html#ixzz1qREOps3I

#183 Canadian Watchdog on 03.28.12 at 2:58 pm

Rogers Laying off 300 Employees: http://www.techvibes.com/blog/rogers-laying-off-300-employees-2012-03-28

Next…

#184 disciple on 03.28.12 at 3:04 pm

Thanks, Blacksheep. Hey, guess what I just did? I left a comment on all the major news websites in Canada, pointing out that they only represent the views of the four major national policy think tanks (Fraser, CDHowe, CCCE, ConfBoardCA). But some didn’t have comment sections:
Toronto Star, Montreal Gazette, and Vancouver Sun. And I found out Maclean’s is really just the National Post… whoops, I think I forgot about the Globe website, I’ll do that later…

#185 Mark W on 03.28.12 at 3:07 pm

Vancouver is a special freakshow that has been going on for years because of the billions of dollars in hard cash coming into this city from China.
Although the Gov’t here downplays this it has been reported in Bejing newspapers that 39% of all the money being spent in the Vancouver area right now is hard cash from Asia.
Vancouver is a city that has had the guts of it’s middle class ripped right out of it; so those nice stories your Social Studies teacher in grade school used to tell you about Canada’s wonderful “middle class” are now gone from this city!
What really angers me about a lot of these rich immigrants is not their money but their arrogance: that the locals of this city are now their peasants who must dance to their tune = we own this place now so you get out.
When the big flood hit Winnipeg back in the late 1990’s I was there, and it was really incredible with neighbours helping neigbours with sandbagging and other things.
Everyone helping everyone else in an incredible esprit de corps.
Now ask yourself this question?
If (and when) an earthquake hits Vancouver the first thing to go will be the dykes surrounding Richmond which will flood.
Then the hostilities will come out full force, like they did during the Vancouver Stanley Cup riots.
How many people will be helping their rich arrogant immigrant neighbours sandbag their homes?

#186 Van grrl on 03.28.12 at 3:37 pm

#154 Debtified and #164:
I am older than you, Debtified, but pretty much have lived a similar life. I’ve been fortunate enough to surround myself with mostly like-minded people of all ages. I know there are (a lot of) people in their 20s and 30s like the ones you both describe but I have never moved in those circles so I’ve been slightly deluded into thinking there are fewer of them than there are I suppose .

This blog is so fun, and I enjoy all the comments and links from all of you! It makes me sad to think of all these young people so insecure and desperate- the world is huge, perspective is everything, get out there and live!

Thanks for the laughs, Garth. You outdid yourself today!

#187 steev on 03.28.12 at 3:54 pm

The Dude:

The idea of “buy now or be priced out forever” is a myth. Going eyeball deep in debt to own a condo will never get me closer to a detached house via growth as the house will always grow faster than the condo since its worth more. Oddly enough if this growth continues unchecked I’ll still be able to live in the house so long as I can afford the rent, as it will still be dictated by income. Rents have tracked income nearly bang on as far back as I can find…including during the recent housing boom. So if things continue to run the course as they have for the last decade the average family will be able to comfortably afford renting a house costing $1,000,000 (or $5,000,000, or $10,000,000 if this madness continues) contribute enough to their savings to retire and continue living in the house, but not ever be able to afford owning said house. The “buy now or be priced out forever” argument just doesn’t hold water.

#188 Blacksheep on 03.28.12 at 4:11 pm

Disciple # 184,

“Hey, guess what I just did?”

Careful there dude, “they” got a special list, for
trouble makers like you :)

http://www.youtube.com/watch?v=inZUDMGJsKo&feature=related

take care,
Blacksheep

#189 Ret on 03.28.12 at 4:19 pm

#161 Re: Foreign students and Permanent Resident status.

You enter with a Study Permit and change to a Permanent resident as soon as possible. Read “Fee Status Change” in this link:

http://oisa.mcmaster.ca/handbook/entry.cfm

Changing your status to Permanent Resident takes less than 2 months (34 business days) in this gov’t link:

http://www.cic.gc.ca/english/information/times/perm-card.asp

Only a sucker would pay International fees at a college or university in Canada. Get a PR card asap.

#190 Cato on 03.28.12 at 4:43 pm

The gullible press sinks to yet another low. I’ve crossed paths with some uber wealthy individuals and certain things stand out. They usually have a few well placed personal assistants who know their bosses tastes performing all the legwork, including dealing with RE agent. Once assistant has a short list of potentials private viewings are arranged on short notice at their bosses convenience. From what I’ve seen they usually aren’t the types to all pile into a helicopter with media cameras in tow to do an agents tour but maybe I’m wrong and Cam really did find himself a helicopter full of billionaires willing to trounce around backwoods of Victoria on a miserable winter day. Something smells but hey, maybe I’m too cynical.

#191 Smoking mans smarter coousin on 03.28.12 at 5:15 pm

I think Smoking Man is simply Flaherty without a spell – checker

#192 Sticky on 03.28.12 at 5:18 pm

#149 Ret “Immigration Changes: Admissions to Canada will be tailored more closely to the needs of business and to address labour shortages.”

>> Thats business speak for we dont want to pay market wages for skilled positions…we need cheap immigrants we can underpay.

#193 r on 03.28.12 at 5:22 pm

“Changing your status to Permanent Resident takes less than 2 months (34 business days) in this gov’t link:”

Are you sure that isn’t just the time to process the card itself (e.g. the physical plastic – not PR status)?

#194 brainsail on 03.28.12 at 5:42 pm

#189 Ret

“Only a sucker would pay International fees at a college or university in Canada. Get a PR card asap.”

Only a sucker Canadian taxpayer would allow this to happen.

#195 Ret on 03.28.12 at 6:16 pm

Re: #193
A student from India showed up with his parents and a brother and rented the house next door for 3 months last summer before the student started at Mac. (Nice people actually.)

The student had sent paperwork from India to our government before arriving and had acceptance at McMaster. He had his immigration interview, Permanent Resident Card and OHIP card before Mac classes began. His father told me that the younger brother will do the same Sept. 2013. Dad also got an Ontario driver’s license for himself. He appeared IMO to have plans to be possibly immigrating in the future.

#196 Grantmi on 03.28.12 at 6:19 pm

The CEO of Genworth MI Canada Inc. (MIC-T21.700.010.05%), the country’s second-largest mortgage insurer, says it will not be picking up all of the slack as Canada Mortgage and Housing Corp. curtails its own growth.

Genworth is likely to scoop up some market share, but “I don’t see ourselves filling the void that could be in the marketplace [because of] CMHC’s cap,” Genworth CEO Brian Hurley told analysts at a conference Wednesday.

Globe and Mail web site. Business tab

#197 Canadian Watchdog on 03.28.12 at 6:29 pm

Why life in Ontario will be miserable for years to come: http://www.theglobeandmail.com/report-on-business/top-business-stories/why-life-in-ontario-will-be-miserable-for-years-to-come/article2383771/

And why it will be worse then stated above due to union wars. http://i39.tinypic.com/2ag23d1.png

#198 TRT on 03.28.12 at 6:39 pm

#189 Ret and #193 R,

Most international students that come here on a study permit pay intl fees for 1 year max. Then a marriage of convenience saves them tens of thousands and grants them and parents/grandparents bro’s/sis’s all perm status eventually.

Its sad that Canadians think the foreigners come here for the education…like wuality education doesnt exist in their homeland??..sheeple have bought the argument from the MSM that education is superior here somehow…even the ones on this blog. I guess the jokes on the gullible.

#199 BizarroLand on 03.28.12 at 6:45 pm

Did anyone else notice this article?

http://www.theglobeandmail.com/globe-investor/genworth-wont-pick-up-slack-left-by-cmhcs-insurance-cap/article2384578/

Apparently the goverment backstops the private players to 90 percent of the loan instead of 100 percent like CMHC. This means there isn’t just a $600 billion liability but potentially $250 billion (soon to be upped to $300 billion) more per private player (at least 2).

Crazy!

#200 arctodus on 03.28.12 at 6:48 pm

#152

No ice age my friend or at least not for several million years now. We are well into a “neo-eocene” event and it is unstoppable. Global temps are poised to shoot over 6 degrees C and more likely well over 10 C in the next 75-90 years (and perhaps much faster as methane outgassing really gets going). these are temps that will make most of the planet uninhabitable by humans.
The really “cool” thing about thsi event is that it is playing out so fast that we individuals can actually witness it first hand.

But what is our response…hmmmm……we deny it, we talk about the latest celebrity fad…our we talk about real estate prices ;)

So damn funny…so sad…so tragic…but really just so damn funny….

We are witnessing the utter collapse of the modern agroindustrial state due to “peak everything” and that very state has given us the tools to actually measure the destruction of the actual living planet (or at least the ecology that supports hominoids)….and we are still so clueless (or so absolutely fricking petrified maybe) that we have not the collective courage to understand what we have wrought.

we debate such laughable points as the rate of economic growth (because there is ZERO chance of that actually happening any more) when the evidence is all around us that the situation today is a complete and utter game changer.

We want to bargain with the world we have created because we fear the death that it portends…..but not only can we hear the ominous sounds over the horizon, we can actually see and feel the future today (jobs decline, crazy high temps, psychological stunting of our young immersed in electronics…..)

We are in a crash but because our perceptions of the world are so screwed up…we can’t even tell

Now is where Garth will tell me to buy a harley or bank stocks ;)……or just go away…..

#201 TRT on 03.28.12 at 6:55 pm

Breaking…

Genworth’s mortgage cap to be raised from $250 Billion to $300 Billion. Word is also that gov will guarantee 95% of the mortgage amount of the original loan (currently 90%) vs the 100% CMHC.

So, no crisis. Most that will happen is banks will ‘force’ people into 5 year fixed… Also maybe scale back their cash-backs. Premiums may also go up a little.

But that”s it folks. I can just see the bewildered looks.

Actually Genworth’s CEO said today his company will not be moving in to make up for CMHC scaling back. Try to be truthful. — Garth

#202 BizarroLand on 03.28.12 at 7:26 pm

If they aren’t moving in to make up for CMHC why are they raising the caps to $300 Billion. Presumably they won’t need it. So that seems contradictory.

Plus I guess the real question is how many extra billion on top of the $600 Billion are we as a taxpayer on the hook for.

#203 mad vancouver on 03.28.12 at 7:34 pm

Coming from abroad, I would tend to agree that education in Canada is far from better than elsewhere. However, Canada ranks really high in international rankings. Why? Because in other countries, the education system only takes care of the A students. Canada is an excellent place for B, C and D students :)

#204 Debtfree on 03.28.12 at 7:43 pm

Garth as much as I have always enjoyed coming last,for obvious reasons . Would it not be charitable to give a small prize to the person that is most concistently coming in first in say a week or month . Like an autographed book . One of yours preferedly . They work so hard at it . With no reward save driving some here to distraction. I for one enjoy the rath they incure much more than their winning the self inspired contest .Tia . Another great blog . Looking forward to reading tonights .kindest regards .

#205 mad vancouver on 03.28.12 at 7:45 pm

@RET:
Sorry, but you sound like some one who never tried to immigrate to Canada…
I wished it was that easy :)

#206 mad vancouver on 03.28.12 at 7:52 pm

@RET
http://www.cic.gc.ca/english/information/times/perm-ec.asp

Student visas and PR cards are two different things.
Some people apply for PR card 2 or 3 years prior to landing in Canada, so yes, they have their papers done quickly when they move in your city.

#207 Nostradamus Le Mad Vlad on 03.28.12 at 7:53 pm


Not much of anything (except Fukushima) happening today.
*
World Bank Nominee How curious. Supported by Obomba; Confiscation PMs? Failure to Deliver or selling homes to make ends meet; Economic Recovery? If Obomba says so, it must be false; Monetary and Credit Freedom Nice, but we don’t have it (yet); 2012 — The Year of the Short Sale in RE; Not The Ziegfeld Follies; Ongoing debt bubble, and The Ponzi Scheme “And the walls come tumblin’ down” — Mellencamp.
*
Fukushima #180 Iconoclast touched on this earlier, and Citizens getting ticked off; Gingrich and Santorum may be pulled from the race, leaving Romney and (possibly) Jeb Bush as the contenders (5:55 clip); Romney may have shot himself in the foot for saying this; France helping Jordan to reach its nuke goals, so what’s with Russia helping Iran? Free Speech Being limited in UK, and US — 2:25 clip; More Side Effects from Aspartame; Education Decline SM, this one’s 4 U.

#197 Canadian Watchdog — “And why it will be worse then stated above due to union wars.” — Happening all across the west — UK Unions Things are coming to a head; NKorea Just to spice things up.

#208 Snowboid on 03.28.12 at 8:03 pm

#185 Mark W on 03.28.12 at 3:07 pm…

Funny, we know quite a few arrogant people, many wealthy, a few from Vancouver, but where they came from doesn’t fit your theory.

If an emergency happens, normal people do not distinguish whether you are rich or poor – they just help in whatever way they can.

Normal people would even help you!

#209 Daisy Mae on 03.28.12 at 9:01 pm

#146 EDDY: “The city of Toronto has solution for their senior home owners who cant afford the bubble assessements-
“can’t afford your assessemnt old guy? no problem. don’t pay a cent, we’ll just roll it over each year, add interest, and collect when you check out, your estate pays the lein, kinda like a reverse mortgage”

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British Columbia has the same option.

#210 Westernman on 03.28.12 at 9:05 pm

Smoking Man @ # 40,
Tesla? In YOUR blood line? That’s a good one – the other day you were regailing us with your tale of taking three hours to replace a light in your car…
Tesla??? I think your heritage is more like Mongo…
Have a couple more drinks chump, you’ll think you are Albert Einstein next …

#211 jess on 03.28.12 at 9:13 pm

http://www.britannica.com/EBchecked/topic/313486/

Kautilya

… Kautilya sums up as “the science of punishment.” He openly advises the development of an elaborate spy system reaching into all levels of society and encourages political and secret assassination. Lost for centuries, the book was discovered in 1905.

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Sounds like Republicans

Ancient China and Its Enemies: The Rise of Nomadic Power in East … – Google Books Resultbooks.google.ca/books?isbn=0521543827…
Nicola Di Cosmo – 2004 – History – 380 pages
Yet the motives behind Han Wu-ti’s decision to embark on an unprecedented … can be summarized in two points: border defense and trade opportunities

#212 Sherri on 03.28.12 at 10:28 pm

Just rented a house in West Van as we can’t afford to buy – all the rentals we saw were Chinese owned, most of them still IN China. Spoke to a 15 yr. Chinese/Canadian waitress about the situation – she said she knows of a huge house in the British Properties that is owned by a Chinese family – they come here for two weeks every year to golf – that’s it. They pay about $4000 per month in upkeep. No one else uses it……now THAT’S money!

#213 grrr on 03.29.12 at 2:14 am

why didn’t you mention how cam good, the realtor with the helicopter is the same one who staged the white rock flyover with fake chinese buyers a year earlier? You posted on that at the time and how it was all manipulated. Fool me once…

#214 Keith on 03.29.12 at 11:58 am

You enter with a Study Permit and change to a Permanent resident as soon as possible. Read “Fee Status Change” in this link:

http://oisa.mcmaster.ca/handbook/entry.cfm

Changing your status to Permanent Resident takes less than 2 months (34 business days) in this gov’t link:

http://www.cic.gc.ca/english/information/times/perm-card.asp

Only a sucker would pay International fees at a college or university in Canada. Get a PR card asap.
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@Ret

This is xenophobic fearmongering and exactly the type of racism that Garth warned about. The only way to change a student permit into PR is if you qualify for immigration as a permanent residence. This does happen but it is the exception not the norm. For example, student starts university, parents qualify for PR and migrate to Canada, student then reclassifies as a domestic student. The idea that students themselves would have enough points to qualify for PR on their own is nonsense. Most have significant challenges qualifying for PR even with the work for PR programs the government has for international students graduating from a Canadian university.

Despite what the men in white robes tell you, immigrating to Canada is not easy. And the average immigrant is significantly better educated and skilled than the average local. This is what Canada needs. Not racist fearmongering about the outsiders taking over.

Next time, try getting more than a superficial understanding of the issue. And don’t think that posting barely related links will allow you to get away with your racist and xenophobic views.

#215 Calgaryboomer on 03.29.12 at 4:16 pm

It’s like the only real estate market in Canada is GTA and Van! I guess that’s where the fear is, farthest to fall. In Calgary, I see lot’s houses for sale but nothing moving except really small ones, lot’s of sold signs from the last 2.99% scare. Maybe we’ll see lot’s of action across Canada in the coming weeks with everyone pre-approved and 90 days to use up their 2.99% rates that are no longer available.

With all the talk of “boom” again in Calgary and lot’s of out-of-town plates, you would think that houses would be flying off the shelves. There is certainly lot’s of hiring going on. Business friends tell me they are losing people leaving for higher paying jobs, usually oil related. So maybe it’ll take a year before we see the effects in housing (ie, rising prices, more sold signs). I’m a believer in the demographics that our friend Garth writes about, but like TO and Van, I think it might go on for longer than we think. (i thought the dot com boom would end years before it did!) Should help out the rental market in the mean time.

#216 Escaped on 03.31.12 at 9:45 am

I am thoroughly enjoying reading your blog. It’s completely entertaining. My hubby and I are both engineers in our early thirties, sold our stuffy over priced condo in the Van area and moved to the states. From the proceeds of the sale we can easily afford a few properties complete with with lawns and driveways. Will someone please pass the popcorn?