Bad dogs

We start today’s comedy blog with a repeat performance by Cam Good, the man with the yellow helicopter who (more than anyone) has helped fuel the flames of racial tension in the city that real estate is destroying. Yes, Vancouver. First he hired a helicopter, stuffed it with Asian-Canadian guys from the suburbs and buzzed White Rock with a bunch of TV reporters in the back, telling them these were ‘investors from China.’ But that was a lie. They were local realtors.

Then he got the yellow whirligig, packed it again with Chinese (this time the right stuff), loaded in the TV reporters and assaulted Victoria, landing at a $14 million estate. It’s a private listing, he said, cuz that’s the way billionaires operate. In fact, he told reporters, there’s a private listing service ( just for them. Another lie. It recycles stuff that isn’t selling on MLS. By the way, Cam Good owns

Now he’s brought the Groupon approach to selling condos. Cam’s promoting a new company,, which bulk-sells condos to groups of strangers, so they can all get a discount off the (inflated) list price. He brought a bunch of TV reporters into a sales room and had them interview buyers, like Tara Fluet, “Investor from White Rock.” Lie. Tara works for Cam Good. And BTW, he owns

Smart guy? You bet. I like that. But the fact each untruth was reported as undisputed fact by the Vancouver media shows you what a bush league town this really is. Below is an example of how Global TV drank the bathwater. No wonder the implosion there could be epic.

On an even funnier note, various house pumpers have come by this pathetic blog in the last few days to tell us that never, ever in Canada will somebody with a mortgage have to pay money to renew it. This was in response to the recently-published OSFI guidelines on banks and mortgage lending. OSFI is the federal banking cop, and like everyone in Ottawa these days, it’s panties are in a twist over people doing the kind of stuff yesterday’s blog was about.

The bank regulator is proposing far more scrutiny of both buyers and properties, no more cash-back mortgages (which are used as deposits by people without money) and a new LTV policy. That’s ‘loan-to-value.’ It means if you got a mortgage for 95% of the value of a property, when it comes time to renew the loan, it still cannot exceed that LTV. So if the property fell and the owners were in negative equity, no renewal unless they cough up the difference.

Absurd, say the realtors. Never happened. Never will. (And they come here because they understand clearly almost every recent 5% buyer could be in this situation in the next two years.)

Actually, this is what OFSI said this week in a post-budget statement: “Elevated household debt levels not only make households vulnerable to adverse shocks but continued low interest rates could encourage even higher household indebtedness. Consumers could become a source of negative domestic influence if they take action to rein in spending to address their indebtedness.”

Yup. And it’s exactly why the regulator thinks it makes sense for people who can’t afford to own homes not to have them. (Isn’t that a rad idea?) So if that means making them sell instead of shouldering mortgages larger than the value of the real estate, perhaps leading to mortgage default, so be it.

This happens now, of course. Lenders are under no obligation to renew a mortgage, and some don’t. Soon this could be a significant story, as it is in Britain.

In the UK the bank cop has come up with strikingly similar reforms, called the Mortgage Market Review. When implemented next year, millions of homeowners now in negative equity would be faced with no mortgage renewal. Incredibly, this group now includes half of all those who received mortgages between 2005 and 2011.

All borrowers would have to pass a mortgage rate ‘stress test’, interest-only payments would be banned and self-declared income would not qualify for a loan. The idea is to curb the excessive lending which took place during the British real estate bubble (a lot like ours) and force lenders to ensure owners can pay mortgages from their income, assuming no future jump in the value of their homes.

Says the Brit media: “Millions of homeowners will become ‘mortgage prisoners’ next year, ‘trapped’ by loans taken out during the boom years. Controversial new rules, from the Financial Services Authority, Britain’s financial regulator, which will revolutionise the mortgage market, are expected to come into force next summer… In particular, there will be some existing borrowers who will be unable to remortgage to obtain a better deal despite the fact they require no extra borrowing and their personal circumstances have not changed since taking the original mortgage.”

See what I mean? The radical idea is not withholding money from people who bought a losing investment. It was giving a loan in the first place to those who had no skin in the game. The moment a country like Canada, Britain or the US allowed its banks to extend 95% or 100% financing to borrowers without assets so they could buy houses at historic prices, we kissed poor prudence goodbye.

Americans learned their lesson. The Brits are now. Soon us.

Now, who wants a nice copter ride? Plenty of room. The Chinese guys left.


#1 1nation on 04.04.12 at 9:00 pm

1st… yeeeha!

#2 Trader on 04.04.12 at 9:02 pm

Thanks Garth,

Seems like we are seeing divergences in the markets all over the world, not just Canada.

Good Trades.

#3 Jon on 04.04.12 at 9:03 pm


#4 thinker on 04.04.12 at 9:16 pm

Has this Cam chap actually broken any laws? The wave of using MSM to sell RE is nothing new, but the back door stuff – private, local chinese, etc should be by law at the end of the advert.

Financial Companies disclose relationships, drugs adverts have many warnings, etc…Why is this guy exempt?

Because it’s Vancouver where the media is part of the real estate industrial complex. He plays ’em. — Garth

#5 ShipsNGiggles on 04.04.12 at 9:20 pm

Mr Cam Bad, sleezy wannabee, he is getting desparate as are his employees.

Oh wheres BPOE? Must be licking his wounds from the lastest sales reports1

#6 Ben on 04.04.12 at 9:23 pm

Ha ha… the yellow helicopter

#7 Aaron - Melbourne on 04.04.12 at 9:27 pm

Meanwhile Downunder…

#8 blargh on 04.04.12 at 9:29 pm

I just puked a little in my mouth watching that dreck.

Its amazing what absolute whores Global are to broadcast the yellow copter drama…and then roll this guys latest scam out with absolutely no reference to the previous story. Just pretend that this is the first time they have ever filmed or met the charlatan. pathetic. just pathetic.

the biggest whores in Canada are not running bordellos.. it appears they are running Global TV

#9 Justsayin on 04.04.12 at 9:29 pm

I was shocked to hear a friend of a friend state on Facebook that his North Shore townhouse in North Vancouver was not selling. It is listed at $549,000 and has 360 degree mountain and water views. He bought almost 6 years ago and will be selling for a loss if it sells. I doubt Global will run with that story. He commented that he is the only person losing money in the Vancouver real estate market. Shocking that even a guy losing money in Vancouver thinks everyone else is still making it. Tick, tick, tick, boooooom.

#10 Bobby on 04.04.12 at 9:30 pm

I recall looking at a home quite awhile ago here in Victoria. The asking price was not much above what was owing on the mortgage. Owners originally overpaid for the home but bought it on the advice of a realtor. But they now wanted out as the mortgage was coming due and the bank wanted some equity to renew, money they didn’t have.
So, for all the realty experts out there, yes, it can happen. I certainly wouldn’t want to have an underwater mortgage coming due. Banks are certainly your friends in the good times, but are ruthless when times are bad.
Quite frankly they don’t care if you can’t renew. They get their money as it is insured by CMHC.
It is starting to get ugly out there!

#11 Freedom first on 04.04.12 at 9:31 pm

Thank you Garth, for exposing the manipulation and lies taking place. I think there is a possibility:) it is making the media, and the Real Estate industry appear unethical, immoral, and corrupt. Looks good on em! Thanks again Garth!

#12 AM on 04.04.12 at 9:33 pm

Groupon for condos…what a joke. And the poor soul who thought he saved $25,000 on his condo. Ahhh, the good old mark-up/mark-down strategy; works for beans and weiners, why not condos.

#13 [email protected] on 04.04.12 at 9:35 pm

Flaherty had a chance during the budget to at least warn us that he sees higher downpayments or a reduction to 25 years to chill the market. Unfortunately, it’s most likely he will bring OSFI to heel and water down their actions by the end of the year.

#14 Maxamillion on 04.04.12 at 9:36 pm

How about Groupon for Lobotomies looks like many are in need of one.

#15 Not 1st on 04.04.12 at 9:38 pm

Garth, this proposal to pony up the difference in LTV is no solution at all.

Just imagine a young couple coming in to the bank to renew their mortgage at a higher rate and they are already underwater on it and now the bank asks them to cough up the difference in LTV to renew it.

I suspect there will be a lot of `turning the keys over to the banks` ala the early 80s, hiding assets and lots of bankruptcy. So we will trade indebtedness for insolvency and foreclosure. How does this benefit anybody.

#16 Marco on 04.04.12 at 9:43 pm

Having come from Britain, only to find Canada (and particularly Vancouver) act exactly like the Brits did before the crunch made me think “why”.

Then seeing them behave like the US despite the fact they have a front row seat to the aftermath made me wonder “why”.

I have seen the same tactics that Cam Good employs used time and time over by many business owners who need to create a different reality than IS real to make their success… eg. First representing realtors as real investors, then using his staff as a plant for an investor and booting in media that is more concerned about commercial obligations than the obligation to report verified facts.

They are only successful because we have a perfect storm, the cumulative marketing machine of the lenders, facilitators (real estate companies) and developers, teamed with a low inerest environment that is an essential part of trying to save our export economy, the lack of financial education in the populace and the last and most important fact, that the majority of the population has not seen a recession or massive market correction means most have no idea that this is “too good to be true” and that as things rise more and more, the risk of the fall is greater and deeper.

I am a net investor in financial assets and was in real estate too and i have seen the realities of “investor mania” (read speculative craze) behavior several times.

I remember how people thought I was nuts when I sold all my vested stock options about 3 months before the bubble popped “you’re nuts, we’ll be worth 3 times more in 6 months”… Try worth 1/30th… 3 months later I was seen quite differently…

I was again looked as a loser when I sold out my house in London back in Aug ’10. After making a 50% growth in 7 years I cashed out and did not buy in again. It was “You’re nuts, the conservatives are coming in, taxes will go lower with interest rates, your house will double in 5 years” well the guy who bought mine, a PWC consultant has gone into negative equity…

London has more billionaires buying into it than millionaires in Vancouver and from more countries than only China, and yet when the banks tightened up… It went belly up…

I would hate to see Canada be the arrogant teen ager who doesn’t know enough to listen to an experienced grown up.

It is a wonderful country that was built on the courage of generations of people who created from nothing, now being wasted by one of people who only know how to consume and produce nothing.

I earn abroad, invest internationally and rent here. Be VERY careful, RE here is an irrational exuberant obsession devoid of rationality… Playing with fire, naked and drunk on gasoline comes to mind…

#17 You never know... on 04.04.12 at 9:48 pm

I moved to BC from the excited states after 9/11. BC was 5 years behind the times then and it is still 5 years behind now. We are at the start of 2006 / 2007 here in BC / Candian real estate like like it was in the states back then.
… Garth… ask any blog dogs if anyone has sold Real Estate recently that they bought in the Spring of 2008 when 0 – 40 mortgages was the norm. Anyone make a profit? I know a handful that had to sell recently (Move to a new job) and they lost tens of thousands.

#18 McLovin on 04.04.12 at 9:54 pm

God Bless Garth.

#19 Cory on 04.04.12 at 10:00 pm

Won’t happen. Proposed changes will be watered down to keep the party going to infinity.

How about a $100 bet on this that the LTV will not happen.

#20 Canadian Watchdog on 04.04.12 at 10:03 pm

TREB March condo sales for Toronto East, West and Central areas.

GTA Average Prices m/m.

Detached 416 $816,169 -0.3%
Detached 905 $563,157 -0.9%
Detached GTA $631,509 -0.7%

Semi Detached 416 $569,319 -2.7%
Semi Detached 905 $391,143 1.8%
Semi Detached GTA $455,392 -0.9%

Condo 416 $361,800 -2.6%
Condo 905 $275,826 2.1%
Condo GTA. $337,309 -1.1%

With 2.99% mortgages, this is not good news.

#21 Narrowgate on 04.04.12 at 10:04 pm

Groupon for Lobotomies….haha, that’s a good one!

#22 GrumpyAuldScott on 04.04.12 at 10:07 pm

So, your mortgage comes up for renewal and, as it is submerged, the bank wants $ up front to rewrite the paper. You don’t have $ so the bank forecloses and puts the property on a falling market and sues you, but, as you are now bankrupt and totally f’d they don’t get their money and can’t sell the house.
Wouldn’t that be stupid?

#23 steev on 04.04.12 at 10:09 pm

To those impatient for the crash I want you to sit down, stop whining, and remember that the first rule of making money through investment: Buy low sell high

The first rule of losing it: Buy high sell higher

Would you rather be the guy who sold nortel at $70 when it started looking fishy or the guy who got to ride the plunge from $125 to $0? If it looks rotten at $70, let go of it, no one is smart enough to time the market. Once you’ve determined something is overvalued, the risk to own it increases exponentially as it goes up in value. Sure you could make some dough, but why try when you’re looking the risk right in the face? Say your buddy didn’t understand how roulette worked, and was gloating about how he doubled his money, you going to take him at his word that it always come up black? No you understand the risk/reward scenario isn’t in your favour and steer clear of it. Buy things that are undervalued, you’ll sleep better and be dissapointed less.

The vast majority of the population who expect things to rise forever, or go through a soft landing, they have not done a whit of research. They’ve reached their evaluation of their properties through the MSM and the collective anecdotes of their peers. They aren’t bulls they are pigs. Bears make money, bulls make money, pigs get slaughtered.


#24 Bill Gable on 04.04.12 at 10:16 pm

Complained to CRTC about Global – and the watchdog replied they are reviewing news coverage on Global – ” we take this kind of complaint very seriously”.

I still get the gears from Family and friends that I am an idiot not to buy.

Not a chance, especially here in Dumbcouver.

Today – our half empty high rise, had two swanky agents showing the suite next to ours. The prospective buyers were in the suite for about 4 minutes.

I guess $998,000 for a 900 sq. foot condo, with a nice view, didn’t light them up.

Cam Good? The guy should be censured by the Real Estate Board…don’t you think?

It’s called FRAUD, or at least misrepresentation?


#25 Mr Buyer on 04.04.12 at 10:21 pm

Critical information to be sure but if it does not come to pass it will not change the fact that the BUBBLE HAS TOPPED. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ACROSS CANADA.

#26 Can it be? on 04.04.12 at 10:23 pm

Spent time at two malls today, which is rare for
Me. Its dead out there, very little shopping happening. Sales people working their butts off for a sale. Overheard a few people talking about how the price of gas will be $2 soon…. This coming from young people. Made me forget about housing for the day… The cost of things is definitely on its way up…. People are just starting to feel it.

#27 45north on 04.04.12 at 10:24 pm

Not 1st: Garth, this proposal to pony up the difference in LTV is no solution at all.

It is a solution. People who cannot afford houses lose them. People who can afford houses buy them. What – you thought there wouldn’t be a price to pay?

My plan would pay people who are foreclosed $1000/month for a year.

Mark Hanson complains that in the US, programs to prevent foreclosures have paralyzed the real estate market. No buying, no selling. Misplaced sympathy leads to the most vicious paralysis of the economy.

#28 Mr Buyer on 04.04.12 at 10:25 pm

This is very interesting. I am wondering if there is not a case for grandfathering this in. I mean it will be a hard sell to those that walked into this mess under lax guidelines and I think there would be a case for applying these guidelines only to new mortgages. As much as I dislike this unnecessary bubble I am thinking these new guidelines kind of slant the field unexpectedly and maybe, just maybe, 0.00135879% of people would not have taken on the mortgages they did if they knew this was coming.

#29 Realistic on 04.04.12 at 10:30 pm

I think F is scared…:

“Canada’s finance minister said on Wednesday he would rather not tighten mortgage rules again to curb high household debt and that banks themselves are taking on that job by becoming more strict with their lending criteria.”

Last step of Canadian housing bubble.

#30 sluggo on 04.04.12 at 10:31 pm

Private listing my ass

#31 disciple on 04.04.12 at 10:41 pm

Went to visit a client today who is desperately trying to sell his house, with renovations going on in every room, tools hanging out the length of the yard, dust everywhere, broken faucets littering the hall, new sinks strewn on the floor awaiting glue and vanity, a junk-filled garage, and a scheduled Open House for the weekend. Says he is looking for a larger home, and his wife wants a larger Family Room, and he wants one strictly with a finished basement for rental income. He is a lawyer and his wife is a dentist!

I gave it my best effort to convince him this wasn’t the best time to be buying with less than 20% down, or with anything down, for that matter. He pulled out the old stalwarts about his son needing the same good school in the area, house prices will always go up, immigration will continue like a broken tap, etc… I refuted each of these arguments with comparisons to US/Ireland/Spain/younameit. I saw some hope of sanity in his eyes as he went silent for just a moment but in the end he just ridiculed me. I thought, just like on this blog, I’m used to it…

My conscience is clear…

#32 FTP - First Time Poster on 04.04.12 at 10:43 pm

I’m curious why the banks wouldn’t simply refinance those who couldn’t pony up the difference at a higher rate instead. It seems that flooding the market with repo houses would be far worse than forcing people to pay higher mortgage rates.

I do remember meeting a family member of a friend who had a gorgeous property – told me he bought it during the 80’s bust…..from the bank…..for 25 cents on the dollar.

#33 sluggo on 04.04.12 at 10:43 pm

Nothing like a 40% haircut to original ask in 2007. Could be a litmus test for the rest of the market.

– Swanwick Ranch in Metchosin: $24 million. 529 Swanwick Rd. This 67-acre property includes a contemporary 8,000-square-foot house. Its geothermal heating and air-conditioning system draws water from the ocean, returning via cascading pools. Because it is new, the house is not listed on B.C. Assessment rolls.

#34 Veej on 04.04.12 at 10:47 pm

So Garth… how does one go about lodging complaints against Cam Good and Global TV? The media in Canada and particularly BC has fallen to a new low (and we all know that is saying something). Realtors and reporters are a perfect match – the lowest of the low. Can they be sued for lying to and misleading people into the biggest financial decisions of their lives?

#35 Alex Hoechsmann on 04.04.12 at 10:52 pm

The writing is on the wall…

#36 OnlyTheBankersLaugh on 04.04.12 at 10:54 pm

Thanks for all of the great research, Cdn Watchdog! Much appreciated. Excellent stuff on the beauty of selective stats.

#37 City Slicker on 04.04.12 at 10:56 pm

Here is a great video (brand new) of Peter Schiff’s rebuttal of the Fed’s actions to avert an economic crisis, and talks in length about the housing bubble (starts about 22 mins in). Very eerie of the same happening in Canada.
Worth every minute:!

#38 jesus'revenge on 04.04.12 at 10:59 pm

So if the conspiracy theorists claim that the financial elite are deliberately luring the naive masses into debt peonage, will we be able to blame those same naive masses for believing them if/when what Garth describes comes to pass?

And when Mark Carney, the illustrious BOC boss, keeps warning Canadians they are in too much debt, but does nothing about it, what are we to make of that?

Is Carney trying to lure people to their debt doom on behalf of the banks? Or is wringing his hands about all he can actually do because he in fact does not control interest rates? Remember, folks, it’s all a CONfidence game.

#39 City Slicker on 04.04.12 at 11:01 pm

Garth is like Peter, and F is like Ben in some of the stuff he was saying in the budget last week.

#40 Canadian Watchdog on 04.04.12 at 11:01 pm

Ever the owner of is starting to wonder why TREB stats are all manipulated. He put a post up.

#41 titicaca on 04.04.12 at 11:03 pm

“Bank of Nova Scotia Chief Executive Rick Waugh says Canada’s simmering housing market gives reason for caution, but that it’s up to the country’s banks, rather than the government, to manage the risks of their massive mortgage portfolios.”

My first thought was anger that guys like him gets to speak. Be careful what you wish for – no CMHC. I suspect he wants to take the profits and someone else to take on the risks.

#42 blargh on 04.04.12 at 11:05 pm

Canadian Broadcast Standards

Code of Ethics

Article Three – Authenticity

Electronic journalists will present news and information without distortion. Interviews may be edited provided that the meaning is not changed or misrepresented.

Electronic journalists will not present news that is rehearsed or re-enacted without informing the audience. Newsrooms should take steps to ensure the authenticity of all video and audio, including news material acquired from the public, freelancers and other sources before disseminating/broadcasting it. Editorials and commentary will be identified as such.

Canadian Radio-television and Telecommunications Commission

#43 AG Sage on 04.04.12 at 11:07 pm

This strikes me as a rule that will create more carnage than the situation actually warrants. And the situation already warrants quite a lot of carnage. . .

#44 Clockbike on 04.04.12 at 11:08 pm

Hey “Veej”

Go here to complain about Global:
You need to give the date and time of the program aired and cite why you found it offensive. Cite clause 5:

““Clause 5 – News

It shall be the responsibility of broadcasters to ensure that news shall be represented with accuracy and without bias. Broadcasters shall satisfy themselves that the arrangements made for obtaining news ensure this result. They shall also ensure that news broadcasts are not editorial.

News shall not be selected for the purpose of furthering or hindering either side of any controversial public issue, nor shall it be formulated on the basis of the beliefs, opinions or desires of management, the editor or others engaged in its preparation or delivery. The fundamental purpose of news dissemination in a democracy is to enable people to know what is happening, and to understand events so that they may form their own conclusions.

Nothing in the foregoing shall be understood as preventing broadcasters from analyzing and elucidating news so long as such analysis or comment is clearly labeled as such and kept distinct from regular news presentations. Broadcasters are also entitled to provide editorial opinion, which shall be clearly labeled as such and kept entirely distinct from regular broadcasts of news or analysis.

Broadcasters shall refer to the Code of Ethics of the Radio and Television News Directors of Canada (“RTNDA”) for more detailed provisions regarding broadcast journalism in general and to the CAB Violence Code for guidance with respect to the depiction of violence, graphic reporting of delicate subject matter or the use of explicit language in news and public affairs programming on television.”

#45 Form Man on 04.04.12 at 11:09 pm

#20 Canadian Watchdog

It seems we have a housing market that is stagnant or declining in most of the country, peppered with small pockets of heated bidding wars. Very peculiar.

#46 Veej on 04.04.12 at 11:09 pm

How to Make a Broadcasting Complaint in Canada


Canadian Broadcast Standards Council [email protected]

#47 gta house hunter on 04.04.12 at 11:11 pm

With interest rates staying same , no change in amortization periods , multiple bids engineered by realtors ……I highly doubt if the OSFI guidelines will ever become a reality.
Even though it might be the step in the right direction,political interest will never let it happen.

#48 Mr Buyer on 04.04.12 at 11:13 pm

This is the latest version of what many many scientists know to be coming. It is frame as an economic melt down with the euphemism “precipitous population decline” mentioned in passing. Economics are the least of our worries if truth be told but the news has to dressed up this way for even 0.00087654% of the population to even read the by-line. In fact I am not a doomer whatsoever but in fact a realist, their timeline is about 2 decades shorter than what I have come to understand (BTW, bunkers will be of little consequence, a larger country wide solution would prove much more effective in my twisted view)…

#49 Aussie Roy on 04.04.12 at 11:14 pm

Aussie Update

Finally some common sense.

Dr Tim Williams says governments need to reconsider tax incentives and policies that encourage investors to push house prices higher.

Buyers now scared of the future price direction and stay out of the market.

In 2002 and again in 2003, more than 600,000 houses and apartments changed hands according to RP Data. During the First Home Owner Boost frenzy of 2009, the figure topped 500,000. Last year it was just 370,000, the lowest since the mid-1990s.

Read the comments on this article – RE industry pleads for more incentives.

Tasmanian welfare agencies are reporting an increase in the number of people asking for help to meet their mortgage payments.

The charity organisation Anglicare says there has been a 20 per cent increase in the number of people looking for emergency assistance to pay their mortgages over the past year.

Remember the shortage?, rents will only ever rise, think again.

Tasmania has an oversupply of rental properties, forcing down prices to the frustration of landlords.

#50 harden on 04.04.12 at 11:17 pm

“Plenty of room. The Chinese guys left.”


#51 Westcoaster on 04.04.12 at 11:20 pm

#16 – Marco – V. articulately put (as are many others on today’s blog).
If the practises detailed by GT were to be implemented fully I suspect the math would be catastrophic and I find it difficult to believe that there isn’t something else to this or if it is in fact real then the gov’t would need to take some add’l measures to keep the numbers from reaching a critical mass leading to a meltdown.
Is there something else to this or do we take these plans at face value. If so, I’m just sayin’ …..

#52 Hicksville Alberta on 04.04.12 at 11:22 pm

If Cam Good truly is fiddling and people suffer damages from his actions and course of conduct it wouldn’t be much of a stretch to see one or more class action lawsuits started against him and perhaps others (like Global as “co-conspirators” or being grossly incompetent, etc)

Play with fire and one could easily get their ass handed to them.

Time will tell.

#53 Zidartha on 04.04.12 at 11:25 pm

Yellow copters… they’re magically delicious. Could not find the Groupon for Lobotomies. Is there an app for that…

#54 Rich Renter on 04.04.12 at 11:29 pm

This happens in BC on the day the federal govt starts laying off thousands of workers in Ottawa.

#55 gmc on 04.04.12 at 11:35 pm

no way it’s different here, my analogy is, it’s like when you walk in the bank and want to borrow some money, they will ask you “what is your equity” and lend you tons of coin based on your equity, same as canada, when we step up to the bank, Canada , what is your equity, oil , gas, wheat, potash, diamonds, fish, agriculture, large scale animal husbandry, sea food, every mineral in the world, uranium, trees, prairies, undeveloped land, hydro power, coal, peat moss, maple sucre, water, lots of water, lots of oil, many fresh water lakes, educated population, etc…………….
and probably the only country that could handle en in flux of 10 million new immigrant with over 1 million dollars each to boost the economy….

hahahaha just fen Ya, I know now I ‘ just as delusional as the rest….

oh ya buy gold and silver

#56 Retired Boomer - WI on 04.04.12 at 11:37 pm

Oh, come now Canada, you can do better? If you really want to cool off housing, increased mortgage rates.

I would LOVE to see mortgage rates, and by extension Bond rates start going up. Uncle Ben has too long manipulated them to save moribund financial institutions. So, Citi goes tits, and takes BofA with it. We swill never recover as fast, or likely as fully, as we could had we purged the walking dead from 2008.

OK, opinions are like keesters, everybody has one. Rhat’s mine on the financial crisis.

As to giving a subsidy to those foreclosed, NO !!!!

Screw them, just like the fool who has his car repo-ed, or his credit card cut off. They knew the risks…well, maybe not, but they sure as hell will LEARN the risks!!

Life does not end when you get foreclosed, it just gets a bit uglier. You can never teach stupid, it must be learned first hand. Saw it happen to many here, over the last 40 years few were dumb enough to go round twice! Get ready to watch some let class misery.

#57 daystar on 04.04.12 at 11:37 pm

#16 Marco on 04.04.12 at 9:43 pm

Excellent insights. The product of all wealth effects from RE bubbles are the same on humanity, I’m afraid. Greed. Pride leading to poor judgments of every kind. Runaway superiority complex. Unrealistic economic expectations. This is the product of flawed systems either through structure, regulation or incompetant/corrupt governance and practice and way too many of us won’t catch on until its far too late, disconnected, unrealistic and unaware until if finally effects them negatively.

I really have to wonder why it took the IMF coming down on F over the winter to push F into doing his job and even so, OSFI regs are still in draft form until what… christmas? F & H still stay the course. From now until then this RE bubble goes sideways, our mortage credit bubble grows at a 7% annualized pace and close to every buyer between now and then will get burned or go broke buying in at current values. What poor governance. Our leaders are blind and corrupt, their followers naive, ignorant and one and the same… what a waste. All this preventable damage and for what, a brief wealth effect lasting mere years only to turn into ruin.

The thing is, if OSFI turns current draft regs into law and effect the landing will be a hard one. (it’ll be a hard landing regardless of what they do, truth be told. Undersupply is a myth in Canada and we are soon to find out why) I don’t want to sound like a doomer but depending on how its handled by government from here on in (and they’ve given no indication so far that the right choices will be made ), perhaps more than hard.

I can’t see how the sheer size of per capita debt in the U.K. and Canada can be dealt with other than a major restructuring of some sort and it comes only as a last resort much the same way as it unfolded in the U.S. and where bubbles have burst elsewhere. The credit gobbling middle class has it coming regardless of how it plays out and sadly… they deserve this but I must say, they had help. Our systems, our media, financial institutions and our governments have failed them badly, sad products of everyone serving only themselves.

What a waste and shame and one final thought. When we hear F talk about overvalued RE in this nation, F blathers on with the same old story:

“We tightened CMHC regulations in 08′ when the U.S. housing crisis unfolded”

(only after F raised CMHC regs from 25/10 to 40/0’s for over 2 years, a scenario which he himself created)

“We then tightened CMHC regulations in 2010″ when interest rates dropped to record lows”

(to still promiscously loose 35/5 regs but monthly payments were still cheaper than 40 year nothing down regulations were, hardly a classified restraint on credit, what a fraud)

“Then we tightened CMHC regulations again last year and will do so again if necessary”

(The first meaningful step, to 30 year and 5% down, an actual reduction of monthly payments but did F stop 5% and 7% cash back policies? Did he really do much of anything else that had true meaning? Did he far enough, Nope. Far from it, delusional greed and pride are here en’ masse, party on)

Late this year, F will “steward” his “steady hand at the tiller” and “control CMHC through the finance department with more oversight (by laying off 20% of his staff and getting “tough” with OSFI around… christmas and in the meantime, the bubble blowhard will do what? Thats right, nothing and all the while this ugly mammoth RE/credit bubble grows on and when christmas comes, F will say:

“It has come to our close monitoring of housing that some markets may be overheated and require further tightening of current regulations through OSFI”

The result? Regulation much milder than our current draft proposals and a likely CMHC credit limit bump. The conclusion? F & H wanted this bubble but particularly Harper and I can only think of one reason why. More U.S. market share of Canada’s economic sectors. All of them. In our bond markets (expect all this debt to crash the loonie at some point for the grand carrot of cheap oil imports for the U.S.), insurance sectors, medicare, grain handling, commodities, services, you name it. He’s a lobbyist through and through who never gave up his old job and anyone who supported him will end either rich through corruption or a fool. Totally incompetant or totally traitorous, the result is the same.

#58 Canadian Watchdog on 04.04.12 at 11:39 pm

#45 Form Man

That is the anatomy of the bubble.

All that’s driving bidding wars are low yielding 5yr bonds, that this next chart shows how the standard deviation spread widens as buyers foolishly bid more for homes.

Toronto Detached Price with 12 Month Rolling Standard Deviation vs 5yr Bond Yield

What this chart implies is when bond yields decline, bidding ramps up (inverse correlation) as the banks offer lower mortgage rates, making homes more affordable, driving speculators and so on….but there is one major problem, yields can’t go lower then 0, so Carney is technically (and politically) screwed.

#59 2muchdebt on 04.04.12 at 11:40 pm

Here is what the media reports in England….

#60 Carpe Diem on 04.04.12 at 11:44 pm

If stupid people do stupid things. Let them pay. I’ve had plenty of friends being house horny after a divorce or their kids graduating from uni and purchasing a home that is overvalued for their kids …


As a grade school teacher, why the F would you end up buying a place where double income IT professional are fools to buy plastic boxes (in Kanata/Ottawa) + probably most have Radon issues.

I bought and sold before I knew what Radon was. But in Kanata (lakes) there are plenty of people and homes affected by Radon. Buyer beware.

Not to mention Nordion is in neighbourhood.

#61 Kurt on 04.04.12 at 11:46 pm

@ GrumpyAuldScott

Apparently you haven’t been paying attention:

“You don’t have $ so the bank forecloses and puts the property on a falling market and sues you, but, as you are now bankrupt and totally f’d they don’t get their money and can’t sell the house.”

Except that the mortgage was insured by CMHC. CMHC pays the bank the difference between the sale price and the mortgage. The bank literally can’t lose. If, however, total claims paid out by CMHC exceed its reserves, the Canadian taxpayer bails it out – we, the taxpayers, very much *can* lose.

#62 ANONYMOUS on 04.04.12 at 11:47 pm

Oh-Oh !
Check out how the Spanish Real Estate market is crashing 60+% in some places:

Basically, due to Austerity moves, the banks are being FORCED to sell off their foreclosed house holdings and this is leading to homes being sold off for 80% or more off their original prices !

Imagine what would the Canadian housing market be like if that happened here? Imagine what our job situation / unemployment situation would be like? – WOW !

The only reason why I don’t see our real estate market sinking like UK / USA is because we are MOST STUPID ( more ‘stupider’, as most would like to say, which is wrong by the way.)

When you have a nation of IDIOTS, then no one can see the forest for the trees, and no one is smart enough to understand that we are actually IN a forest, because they are too busy watching those house-shows on TV.

It makes me sick.

Its like a guy with a hacksaw who keeps trying to cut off his hand. No matter how much you tell him not to do it, he keeps picking it up and having another go at it. That is the way I see these bidding wars, its just crazy-insane like that guy with the hacksaw trying to cut off his own hand.

And until someone SMART takes away that hacksaw from the crazy guy, he will keep trying to cut off his hand, again and again, just like people keep pushing up the prices of homes in bidding wars again and again, until someone comes along and takes away the hacksaw.

#63 daystar on 04.04.12 at 11:54 pm

Correction, my bad, should have proofed it better, in the summer of 06′, F went to 40 year nothing down CMHC regs from 25 year 10% down. In late 2008, F went to 35/5 CMHC regs from 40/0’s. In the spring of 2010 F changed a few CMHC regs with negligable effect and in the spring of 2011 he went to 30/5’s with CMHC regs effecting HELOC’s but F left 30/5’s alone with 5% cash backs common and has next to nothing since.

#64 Waterloo Resident on 04.04.12 at 11:59 pm


You know, at first I thought that this would be a great thing, that in a few years I could go to people who are desperate for cash and are trying to sell their luxury cars and be able to pick up a Porsche Cayman S for a song.

But then it just hit me; if he’s selling his Cayman for $58,000 its because he still owes $56,000 on it to the bank, so he’s not going to be lowering it to less than he owes, instead he’ll just let the back TAKE IT away.

And with most of the things that people have these days, everything’s on credit, nothing is actually owned outright, so the people don’t have ANYTHING they can sell.

Only the women can sell their bodies for sex, and “no-thanks”, I don’t do that sort of stuff ! (yuck!)

#65 Tim on 04.05.12 at 12:08 am

Re #42
Canadian Broadcast Standards

Code of Ethics
This doesn’t apply now…Harper is in power….

#66 Aussie Roy on 04.05.12 at 12:17 am

Aussie Update

Buying off plan?

All manner of things offered to lure buyers.

Buying a new apartment or house off the plan? These days you won’t just be buying a home; you could also be buying extras such as a rooftop cinema, party hall, valet service, concierge, pools, gyms, barbecue areas, a day-care program, wine cellar … even, in one case, access to a golf course on the doorstep.

Fed Govts turn to axe jobs as tax revenues fall.

MORE than 1500 federal public servants are set to lose their job, as the Gillard government prepares to release a tough budget in May that could trigger even greater job losses in the bureaucracy.

Most of the initial 1500 jobs expected to be shed will be based in Canberra, and are a result of a government attempt to save about $500 million on public servants. But even more jobs could now be cut as a result of next month’s budget, in which the government will pare back its expenditure to try to deliver a surplus.

Repeat after me, bursting house bubble cause high unemployment, NOT you need high unemployment to burst a bubble.

They always collapse, deflate under their own weight.

#67 tres bien goat on 04.05.12 at 12:20 am

I dont know how you do it GT.Day after day,oh the free stand up.Start charging for the hits,the info is priceless. Go get em Pontiac, GTO.

#68 Rob on 04.05.12 at 12:27 am

@Canadian Watchdog
not to mention that the BOC can’t control money demand but they can manage the supply, so if bonds do get close to 0 yield, the BOC will make sure there is plenty of supply to match the demand thus eventually creating a higher yield.
right now the bond market is very overcrowded because of fear, but that can change on a dime which will lead to HI at some point. and the CB response will be? print to match demand because they will sacrifice the currency for the system at any cost.

#69 Alberta Ed on 04.05.12 at 12:36 am

Sadly – speaking as a former community newspaper editor – the main street media has become a whore for the RE pimps.

#70 NFN_NLN on 04.05.12 at 12:37 am

The upcoming “buying opportunity” you talked about a while back. This must be it, no?

With the lack of upcoming QE some stocks took a huge beating this week.

#71 Riding the Pine on 04.05.12 at 12:37 am

#16 Marco

Bravo…wise words from an elder. It’s classic human nature to NOT learn from the past. Those that pay attention to history, and most importantly, act upon it’s lessons, fair better in the end.

#72 rob on 04.05.12 at 12:39 am

its obvious that the market in Toronto is stalling. Month over month declines in prices for condos, and semi/detached homes. All of the positive data is coming from outside Toronto to make up for the bad numbers in Toronto as people are hunting better bargains out there.
Toronto needs to have very good next 2 months as i do expect, as this is usually where the biggest prices gains are in those markets for the year or it has topped.
Not to mention looking at the condo sale prices, most condos sold below listing price.
After May things will be more clear.

#73 Van guy on 04.05.12 at 12:39 am

Just got back from Vegas. Made some serious dough at the poker tables. Talk about idiot donators. Up $22,000 and came back with $600. Damn whores sucked me in. I’m a sucker for women. God I love Vegas.

#74 Form Man on 04.05.12 at 1:00 am

#58 Canadian Watchdog

very interesting. the data tells the truth.

#75 stage1dave on 04.05.12 at 1:05 am

“…the consumer may become the source of domestic negative equity…” Oh no; not again!

I will really try not to read too much into that…LMAO…or engage in cruel analogies.

On a lighter note, dropped in at the bank today & whilst making my deposit discussed upgrading my business accounts. In the middle of [email protected] inquiring about my credit needs and/or worthiness, it kinda sneaked out that I hadn’t borrowed any money from a bank in over 23 years…

Might as well have told her I was from Mars…I’m beginning to enjoy getting looks like that from people!

She figured with my income I should be running a mid 5 digit LOC with CC backup…apparently, I should be out there buying more stuff…thought I had enuff stuff…not at this time, I replied.

Regrouping, she inquired about my mortgage needs, & I explained I had none. I’m presently renting a cozy house in a desirable middle class neighbourhood for about half the carrying costs (and none of the headaches!) of a conventional mortgage, telling her that got me nowhere…

Deciding that booking an appointment was the best that she could do, I was allowed a small victory when she intoned “well, there is an awful lot of debt out there…”


#76 Debtfree on 04.05.12 at 1:09 am

It’s institutionalized .lying is coming from the top down . Hell everyone is doing it . RBC wash trading for tax burn . The poll station has moved . BC rail sale was good for BC . Attack ads dion is an alien . Iggy is an American . Wanna buy a cheap f35 that doesn’t exist . The cuts won’t affect services . Come on cam’s just following the leader . A guy that wears more lipstick than his wife . And now a guy can possibly win the miss universe pagent . Adams apples for everyone.

#77 Debtfree on 04.05.12 at 1:15 am

And is it me or does it seem to anyone else that Monty python is running this crapshoot .

#78 Terces on 04.05.12 at 1:26 am

#61 Kurt – what you are saying makes the future look that much more volitile. The mortgage lenders in Canada are quite right in a different category than lenders in other countries – and the difference: they don’t have to bother dicking around with borrowers who miss payments. The quicker they foreclose, the quicker they get paid out by the Government through CMHC. So they will be motivated to move against the borrowers as soon as there is any sign of default.

There will likely be no “Mr Nice Guy” when things start to unravel.

#79 scib on 04.05.12 at 1:28 am

I have decided to vote NDP in the May 2013 BC Provincial election. I hate the NDP always have. Always voted for the conservative parties available. Why do I change now?
Because the NDP will do more to make housing affordable for myself and my 7 children than any other possible factor. They will devastate the business landscape and send hundreds of corporations packing to Alberta. Why should I care. I calculate the damage the housing bubble has done to me and my family at around 600,000.00 in lost opportunity cost.
If that were not enough reason, I am now voting out all liars on principle. The HST debacle in BC is all I need to make up my mind.

#80 scib on 04.05.12 at 1:37 am

The following link has a graph that shows Canada housing only rising 28% in the last 10 years after inflation!
Could this be true. That sounds low to me?

#81 Harlee on 04.05.12 at 2:20 am

“..a bush league town..”
That pretty well describes Vancouver in 2012.I didn’t get to know the city until 1975 when my folks moved there. It seemed like a pretty decent centre then.Liveable on a “working man’s wage”.Fairly friendly and open to all. Hard to believe that’s over 35 years ago.
As some as suggested ,perhaps it was Expo ’86 that started to swell the city’s head to what it is today. Whatever…It sure has changed. For the worst. It’s all very sad…Maybe a “correction” will bring it down to earth again. At least I hope so…

#82 DML on 04.05.12 at 2:32 am

So Global “News” is spewing propaganda and Garth does
the investigative journalism.Something is very wrong here.

#83 Donnie on 04.05.12 at 2:34 am

Garth – How do we short the Canadian Real Estate market?

#84 NoName on 04.05.12 at 2:35 am

Interesting to see how information from MSM is considered accurate by default…

#85 Vancouver_Bear on 04.05.12 at 3:12 am

Let’s do a fundraising for Cam’s lobotomy, he begs for it. Let’s help him to afford it!

#86 TRT on 04.05.12 at 3:24 am

I’d hate to be one of those private types…hates unions…blah, blah, blah. You know, the ‘i got a skilled trade’, ‘private sector employee’, etc, etc, etc.

Your wages are about to go down, down, down!

#87 Aussie Roy on 04.05.12 at 3:47 am

Aussie Update

Oh my word the property lobby use the G word, surely we don’t have – dare I say it a GLUT. Ah I see not a glut of houses on market just an oversupply of sellers – lol.

An oversupply of sellers and not enough prospective buyers is the reason the housing market is soft and will remain soft for some time to come, according to Aussie Home Loans founder and executive chairman John Symond. (Largest non bank mortgage provider in Aust)

He says the problem is worse for those selling expensive homes with greater demand for more affordable properties from first home buyers and investors.

“It’s taking a lot longer to sell a property, and the properties are banked up,” Symond has told the Australian Financial Review.

“There’s a lot more sellers out there than there are buyers.”

RP Data reported that the number of properties advertised for sale had ballooned to 306,000 in February, compared to 259,000 a year ago while capital city house prices have fallen about 4.35% over the past year.

NOTE: 2011 360,000 properties changed hands for the year. I think by June we will have a years supply “on market”.

The latest SQM Research listings figures for March show double-digit growth in listings in Melbourne and Sydney and increases in all capital cities.

#88 betamax on 04.05.12 at 4:10 am

“So if the property fell and the owners were in negative equity, no renewal unless they cough up the difference. Absurd, say the realtors. Never happened.”

It did happen, in the 80’s. I know people to whom it happened. The realtors have either forgotten, are lying, or are simply too young to know better.

The current laissez-faire credit orgy is not normal; it’s an abnormality which has fostered the housing bubble, and it is precisely when values are falling that the banks start tightening credit. Bankers are no dummies; if they perceive risk, then they’ll demand their money up front and screw the owners. It’s not different this time.

#89 betamax on 04.05.12 at 4:18 am

#22 GrumpyAuldScott: “You don’t have $ so the bank forecloses and puts the property on a falling market and sues you, but, as you are now bankrupt and totally f’d they don’t get their money and can’t sell the house. ”

Wrong. The bank gets their money from CMHC at taxpayer expense. It’s a wonderful world.

#90 daystar on 04.05.12 at 4:46 am

F says he’ll do nothing to fix housing and debt problems because “I really don’t want to, I’ve already tightened regs 3 times”.

F must have amnesia. He must have forgotten all those times he loosened CMHC regs. The first time he “tightened” regs was in a lower interest rate environment where mortgage payments actually became cheaper. What a fraud. The second time, he left the main component of CMHC mortgage regulations alone, leaving 35 year length of terms and down payments untouched. Another do nothing attempt. A year ago, he finally did something of substance reducing terms to 30 years but left down payments at a mere 5% with half of our chartered banks giving it back with cash back perks. What an attempt to “reign in housing”. Mortgage credit is still growing at 7% year over year, F has been so successful. There it is in a nutshell. F’s solution to our RE/credit bubble. “Let the banks self regulate, I really don’t want to change regulations”. And why would he… F’s ineffectively “tightened” reg’s 3 near meaningless times.


Terry Cambell who is the head of the Canadian bankers association made headlines yesterday:–145970085.html

Terry Campbell is essentially saying, “we’ve got it handled, we are prudent, no past issues so everything is fine, don’t rock the boat.” I’m ad libbing a bit, but you can find his words of “do nothing with regulations” because “our lending practices are prudent” on on the BNN video story 04-03-12 3:15 pm.

As expected (at least by myself, I trust Mark to do what’s right), Mark Carney fires back at this:

The link below reveals a side of Mark Carney’s professionalism and service to Canada. His message is accurate and unfortunately it falls on deaf ears.

In a low interest environment, there was nothing ever stopping F & H from tightening CMHC and banking regulations far more and far sooner than they did. The link below is just another example of Mark Carney telling it like it is. There is no confusion here, the message is plain as day.

Lets look back in time with our governments choices. Manufacturing was going to get hammered with a higher loonie, we all knew this years ago and could see it coming. As I see it, the Harper government had one of three choices or a mix of both:

1) Grow the economy through housing which is a credit grower and an unproductive asset and if used as a one hit wonder, creates a nasty RE/credit bubble that can if left unchecked gut the middle class and breed a long drawn out recession and worst case scenario currency crisis.

2) Give manufacturing huge federal tax incentives to give them a hedge against our loonie at parity

3) Develop commodities improving productivity/exports and long term jobs.

We needed to develop infrustrastructure in Canada’s north and instead F & H chose housing wasted 10’s of billions on pork barrel economic action plans and now here we are, in a productivity ditch and a housing/credit bubble enslaving the middle class with unsustainable debt in a higher interest rate environment.

F & H quite simply blew it and I do see F trying to increase commodity development “finally” through ramming pipelines through to the west coast and with railway construction through the ring of fire in Ontario (chromite/Cliff resources/KWG/Noront) as two examples but look at what they did with the wheat board and now they want to rubber stamp the environmental process which is piss poor due diligence and comes too late. (they could have moved 2 years sooner with the ring of fire and 5 years sooner with energy exports out west and I’m not convinced that BC is the best route to take to begin with. The Beaufort sea or pipelines east may be more feisable. No time to think now, lets put guns to our heads and make rushed panic plans today!! What a poop show.

One final thought.

Does anyone really think interest rates will not rise until 2014 after reading this last link? Is there anyone left in the house who actually believes this now?

#91 futureexpatriate on 04.05.12 at 6:11 am

#33 What they DON’T tell you in that lying article is that the absolutely hideous Villa Madrona has been on and off the market for the past nine years with no takers. Modern but small Swanwick Ranch for five.

Madrona will never sell.

#92 Bigrider on 04.05.12 at 7:15 am

The OSFI may be proposing greater scrutiny and change but that change will be years in the making.

All the while, homes will continue to appreciate in value, driven by the crazed obsession for RE we have indentured in this country.

House prices and risk headed higher

#93 Kevin on 04.05.12 at 7:52 am

“mortgages larger than the value of the real estate, perhaps leading to mortgage default”

How does negative equity “perhaps lead to mortgage default?”

Your home equity (or lack thereof) has absolutely nothing at all to do with your risk of defaulting.

Only your income matters.

I can see how maybe in a no-recourse jurisdiction, if someone is hopelessly underwater, they could be more compelled to do a “strategic default,” but in a recourse jurisdiction such as Canada (Alberta notwithstanding), that doesn’t work.

If someone’s income hasn’t changed, and their mortgage payment hasn’t changed, and the only thing that has changed is their LTV, what does that have to do with their risk of default?

It’s as ridiculous as saying that if someone’s income plummets, but their LTV is healthy, then they’re not at an increase risk of default.

You’re connecting the wrong dots, Garth. Defaults are tied to income, not LTV.

Actually not in the case of first-time buyers who took the plunge on the full expectation of continued capital gains. Falling into negative equity can be a shattering event for many, who might decide they are better to leave the keys on the granite countertop, and take their chances with default instead of feeding an insatiable mortgage. Dots connected. — Garth

#94 Victor on 04.05.12 at 7:55 am

Most Canadians plan no home buying in next 2 years: RBC

Reuters – 1 hour 52 minutes ago

TORONTO (Reuters) – A growing majority of Canadians do not intend to buy a house in the next two years, even with mortgage rates near record lows, according to a Royal Bank of Canada survey released on Thursday.

In RBC’s annual poll of Canadian homeowners, 73 percent of respondents said they are unlikely to buy within the next two years, an increase of 2 percent over the previous year’s survey.

#95 CTO on 04.05.12 at 8:03 am

#19 Cory

I think your right, and i also think that this culture ensures that we will have a meltdown at some point. The longer the party plays on the harder shock when reality slits our throats!

#96 pbrasseur on 04.05.12 at 8:06 am

If Garth is right and government acts via OSFI then the feds strategy is clear. They want to avoid a real estate collapse by making sure there is no weak link among the borrowers. They think by making sure borrowers are solvent they will avoid triggering a crisis and therefore obtain what they really want: a soft landing in the real estate market that would bring some relief to households balance sheets, hopefully that would allow the economy to grow on more solid ground. That is the theory.

Fact is I really don’t know what’s going to happen short term. Many of us have been predicting an imminent collapse for years now and every time the market just kept right on going.

So I don’t know if there is going to be a bloody crisis, imminent or not, but I do know that the unbalances created in the Canadian economy by a decade long credit binge are very real, very structural and very damaging. We are going to pay for this, one way or another and it’s going to be painful. If you’ve heard of the economic concept of “creative destruction” then you understand why. Basically you cannot create a productive economy before destroying the unproductive parts before. It’s the job of markets to do this and the method is not always kind….

The funny (well sort of) part is that a soft landing would be good for politicians but bad for Canada. A soft landing would mean more debt, more structural damage to our economy and even less lesson learned. A hard landing would bring more short term pain but unbalances would get fixed more quickly and a healthy recovery would come sooner, past mistakes would become obvious enough to be avoided in the future (well a least for a while…).

#97 Butch on 04.05.12 at 8:07 am

*Sigh* Of course real estate prices in T.O. have gone up another 5% from last year.

#98 Ret on 04.05.12 at 8:32 am

LTV- what dat?

Whom or what determines the “value” in LTV? My home has an Ontario MPAC tax assessment value of $251,000 but would sell for $325-350,000. My neighbours blow about their bank assessments and appraisals of $450,000 on their similar properties.

#99 jess on 04.05.12 at 8:33 am

and read who was sitting on that media board

Op-Ed Columnist
Financiers and Sex Trafficking
Published: March 31, 2012
THE biggest forum for sex trafficking of under-age girls in the United States appears to be a Web site called

#100 Narrowgate on 04.05.12 at 8:40 am

T.O.’s Cam Good = Brad Lamb

#101 Nuke on 04.05.12 at 8:45 am

Well if a Chinese Song Dynasty Ru Bowl (nice finger bowl) Sells at $26M at Sotherby’s then what’s 14mil for an estate property.

#102 sceptic on 04.05.12 at 8:58 am

# 22 GrumpyAuldScott
How about they rush to get their money out of CMHC before it collapses.

#103 Market Bull on 04.05.12 at 9:06 am

Flaherty says it’s up to the banks to ‘fix’ the mortgage market: Financial Post.

#104 Randy on 04.05.12 at 9:16 am

Is the CMHC a vehicle for social justice ?? haha

#105 Combustable Tobacco Male on 04.05.12 at 9:23 am

Gartho, (burp) it’s me, Smoking Man! I just tried the thesaurus feature on this computer and it came up with this. Don’t believe it’s me? Well, I’m into my 3rd bottle of wine AND I turned off the autocorrect. I know, I know, I should be working on my book but you make it hard not to comment on your posts. Here’s what I think, there’s no way any form of racism or xenophobia will ever gain traction against the Chinese. You know why? Everything we own is made in China. When I stumble into the corner store to buy with a wet stain from my pants zipper down to my shoes, who’s the only one that’s going to sell to me? If they buy houses and it drives prices up so high that my retarded son can’t buy one, it’s not the Chinese fault. As for Cam, if people are still buying off him knowing what type of snake oil salesman he is, it’s their own fault.

When are you going start posting pictures of people holding signs with how much underwater on their mortgage people are? 60 Minutes has done so many stories about how people are losing every thing due to buying at the top, when are you going show some of those losers? I’ll bet you none of them are from China.

#106 Arse on 04.05.12 at 9:24 am

Postive Canadian economic news this morning.

The total value of permits rose 7.5% to $6.5 billion in February, following an 11.4% decline in January. The advance in February was the result of an increase in the non-residential sector, which offset the decrease in the residential sector.

Following four months of little change, employment increased by 82,000 in March, mostly in full-time work. This brought the unemployment rate down 0.2 percentage points to 7.2%.

#107 };-) aka DA on 04.05.12 at 9:28 am


You have two families: “*WORKING JOE* ” vs “*WELFARE JOE* “. Both families have two parents, two children, and lives in Canada.

WORKING Joe works in construction, has a Social Insurance Number and makes $25.00 per hour with taxes deducted.

Welfare Joe does not work, has a Social Insurance Number, and gets paid $15.00 per hour “without leaving the house”.

Ready? Now pay attention…

Working Joe : $25.00 per hour x 40 hours = $1000.00 per week, or $52,000.00 per year. Now take 30% away for provincial and federal taxes. Working Joe now has $31,231.00 net..

Welfare Joe : $15.00 per hour x 40 hours = $600.00 per week, or $31,200..00 per year. Welfare Joe pays no taxes. Welfare Joe now has $31,200.00 net.

Working Joe pays medical and dental insurance with limited coverage for his family at $600.00 per month, or $7,200.00 per year. Working Joe now has $24,031.00 net.

Welfare Joe has full medical and dental coverage through the Provincial and local clinics at a cost of $0.00 per year. Welfare Joe still has $31,200.00 net.

Working Joe makes too much money and is not eligible for welfare. Working Joe pays $500.00 per month for food, or $6,000.00 per year. Working Joe now has $18,031 net.

Welfare Joe has no documented income and is eligible for welfare. Welfare Joe still has $31,200.00 net.

Working Joe pays rent of $1,200..00 per month, or $14,400.00 per year. Working Joe now has $9,631.00 net.

Welfare Joe receives a $500.00 per month federal rent subsidy. Welfare Joe pays out that $500.00 per month, or $6,000.00 per year. Welfare Joe still has $31,200.00 net.

Working Joe pays $200.00 per month, or $2,400.00 for auto insurance.. Working Joe now has $7,231..00 net.

Welfare Joe says, *”We don’t need no stinkin’ insurance!”* and still has $31,200.00 net.

Working Joe has to make his $7,231.00 stretch to pay utilities, gasoline, etc.

Welfare Joe has to make his $31,200.00 stretch to pay utilities, buy gas, prepaid cell phone card, (alcohol/cigarettes) and play at the Casino.

Working Joe now works overtime on Saturdays or gets a part time job after work.

Welfare Joe has nights and weekends off to enjoy with his family & friends.

Working Joe and Welfare Joe’s children attend the same school. Working Joe pays for his children’s lunches while Welfare Joe’s children get a government sponsored lunch. Working Joe’s children go home after school, while Welfare Joe’s children have an after school ESL program provided free.

Working Joe and Welfare Joe both enjoy the same police and fire services, but working Joe paid for them with his taxes and Welfare Joe did not.

Do you get it, now?

If you support any politician who supports our welfare system, you are part of the problem!

It’s way PAST time to take a stand for Canada and Canadians!!

What are you waiting for? Pass it on!

#108 Market Bull on 04.05.12 at 9:30 am

#93 Kevin on 04.05.12 at 7:52 am

“mortgages larger than the value of the real estate, perhaps leading to mortgage default”

How does negative equity “perhaps lead to mortgage default?”

Your home equity (or lack thereof) has absolutely nothing at all to do with your risk of defaulting.”

You make a valid point Kevin. During the worst real estate downturn in recent memory, mortgage in arrears data peaked at 0.65% in January of 1997.

#109 Grantmi on 04.05.12 at 9:55 am

#83 Donnie on 04.05.12 at 2:34 am
Garth – How do we short the Canadian Real Estate market?

Oh Donnie Boy….maybe try Rona (RON.TO).

No more fixy-upsy biz!! And Lowes is going to eat their lunch anyway. (remember Walmart?? How about Woodwards, Eatons?)

Come here! Go away!!

#110 The American on 04.05.12 at 10:00 am

The group-sell approach to condos is certainly not a new tactic. In Seattle in 2009, a company was formed named “Condo Bulk Buy” The operation was led by a member of a major real estate firm. This was the very firm that had represented many of the developers during the pre-sale phase, but unfortunately could not manage to get all the new units sold. So, they came up with this scheme and decided to give it its own official company name. A member of staff from this real estate firm (now called Real Logics Sotheby’s) who couldn’t sell remaining inventory in the downtown, Capitol Hill, South Lake Union, and Ballard neighborhoods, proceeded to create a bulk purchase program. The program proved to be to cumbersome and annoying to the purchasers who wanted to join. The reason? The program did not want to provide any kind of set pricing or transparency. The process became even less transparent to the buyer than what they had received in the initial pre-sale phase. After a few auctions using this strategy, buyers quickly realized that some of them had paid the pre-sale price or even more in some cases. Talk about PISSED OFF people. After all, they were promised a bulk-rate discount. Needless to say, the program no longer exists.

#111 JIM on 04.05.12 at 10:07 am

#93 Kevin and Garth

Actually both of you are right. Garth, if someone buys a house with the idea that he will live in it for say 20 years and raise a family there, it will probably not be an issue if the market value of the house falls. Kevin, if on the other hand, the house was bought with the idea that it would provide an immediate capital gain, then there will be problems.

Car dealers call vehicles where the trade in value is less then what is owing on it “upside downs”. Apparently insurance companies loath these situations because upside down cars tend to be ‘stolen’ and subsequenly destroyed far mare than average. Perhaps there is a warning here for the realestate industry

#112 Canadian Watchdog on 04.05.12 at 10:10 am

Royal Canadian Mint Develops Digital Currency: MintChip

#113 Gord In Vancouver on 04.05.12 at 10:17 am

Excellent News! Now RAISE Interest Rates!

Canada’s stalled jobs market roars back in March

#114 Uh Oh Canada on 04.05.12 at 10:29 am

‘Mortgage Prisoners.’. This says it all. The tables have turned…all those folks who’ve ridiculed us for being prudent and living within our means, who have secretly called us losers behind our backs are now gonna get what they deserve. The majority if people I know fall in this category. In fact, I am the only one in my circle who is not in debt. These are interesting times ahead.

#115 Iconoclast on 04.05.12 at 10:31 am

#93 Kevin,

If you’re underwater on your *only* asset, with no near-term prospect of improvement, why not walk away?

This is a no-brainer in a non-recourse environment, but is still rational if recourse is a factor.

They can’t get blood from a stone. Just line up your rental first…

#116 Hicksville Alberta on 04.05.12 at 10:32 am

#79 scib

Great post.

I’m totally with you on voting the Bums out and that is why i am voting Wild Rose in Alberta for starters.

I haven’t voted NDP since i was a kid (in fact it was CCF at the time) but i am going to donate some cash to the Federal NDP right now as i think Mulcair has shown some balls and deserves a platform even though i don’t think i could vote for him.

Seems H & F & Company are getting out of hand by enabling and promoting antisocial housing (and perhaps to some extent immigration) policies as well as the F-35 boondoggle and the G-20 spending extravaganza.

By donating some cash to the NDP now perhaps Mulcair will be able to influence some positive change and bring on some much needed accountability at the Federal level and that is what Democracy is supposed to be about.

#117 brainsail on 04.05.12 at 10:41 am

“Buying a home is more affordable than renting now in almost every part of the United States,”

#118 AprilNewwest on 04.05.12 at 10:45 am

I know someone in vancouver who is about to list their appt. They are afraid it won’t sell. They’ve been told by a couple of realtors the the “bidding wars are over. People just walk away”.

#119 Tony Right on 04.05.12 at 10:48 am

I’m 30 and so happy I was taught by the greatest generation ever (WWII generation) instead of the most pathetic generation ever (Boomers). I was taught to save my money and invest it in equities for the long-haul, eschew debt, and never-ever believe everything you read or hear on tv (Sun newspapers, Global, politicians, and so on and so on). The WWII generation experienced the great depression and their lessons are falling on their childrens and grand-childrens deaf ears. It’s sad. I rent and have all my money in equities, adding more whenever I can, ignoring the news. Mr. Market always goes up in the long-run. I don’t want to say I can’t wait for the destruction of the housing bubble, as I hate to see people become bankrupt, but I believe that intelligent savers like myself who have heeded the advice of the greatest generation ever deserve to be rewarded for our patience and not putting our money into a housing market who’s fundamentals defy anything I ever learned in University economics, finance, etc. Sadly, though, I believe we live in a time where the market isn’t free anymore. Boomers in charge in the U.S. didn’t let corporations fail and bailed them out on the taxpayers dime (This is Socialism is it not?). I have a feeling the Boomers in charge here will do the same thing to save their skin and investment blunders. How can a guy my age ever win?

#120 Daisy Mae on 04.05.12 at 10:52 am

“It was giving a loan in the first place to those who had no skin in the game. The moment a country like Canada, Britain or the US allowed its banks to extend 95% or 100% financing to borrowers without assets so they could buy houses at historic prices, we kissed poor prudence goodbye.”


But we couldn’t possibly blame Flaherty and Harper for this, could we? Oops! There I go, being facetious again….

And I don’t believe Cam Good is ‘smart’ in view of the fact he’s being exposed for what he is — a common liar.

#121 Dontcallmeshirley on 04.05.12 at 10:59 am

Hmmm…yeah, Garth’s interpretation of OSFI guidelines, the mandated enforcement of LTV at mortgage renewal time isn’t too crazy.

Thinking about it, having someone pay up more $ as condition to renewing is essentially like paying the tail end of a deferred downpayment.

If a bank said, on day one, they want 5% now and another 5% in 5 years would you spaz out? Not particularly revolutionary or inflammatory.

#122 Daisy Mae on 04.05.12 at 11:04 am

“And they come here because they understand clearly almost every recent 5% buyer could be in this situation in the next two years.”


And they figure this will be a boon to them down the road with all these new forced listings at greatly reduced prices…and all the ensuing sales? Wow! Whata racket….

#123 fancy_pants on 04.05.12 at 11:12 am

Don’t kick F in the knees, you’ll get his nuts.

He’ll be long gone with a full pension before you can lay your boots into him anyways, just after the next election when the RE bubble really begins to bleed. And this largely from HIS irresponsibly to loose lending rules.

What a moron, blaming the banks for playing (and playing well) within the rules those morons on the hill set. I have begun to understand the passion some have for searching for intelligent life elsewhere… not much hope left on this planet, at least not for the idiots in power.

#124 steev on 04.05.12 at 11:21 am

#93 Kevin

Futther to Garth’s point, when house values plummeted in the US, so to did the incomes for a number of people as the housing market and the economy are joined at the hip.

Since 2003 the percentage of GPD in “bubble cities” that is made up of housing relating industry (construction + FIRE group) has taken off from long term averages. In Toronto this fraction jumped from 28% historically to 32%. That doesn’t sound like a lot, but put 1 in 25 people (4%) out of work and we’ll all be selling less, and our incomes will reflect that.


#125 45north on 04.05.12 at 11:25 am

Kevin: How does negative equity “perhaps lead to mortgage default?”

Kevin there is a whole body of evidence in the case of the US. Recourse, non-recourse. Yes in a way you are right, that if your income stays the same who cares what the “value” of your house is. Everything works in pervasive combination: unemployment goes up, house prices go down. Thousands of people make decisions that affect neighbourhoods, counties and states. Case in point – British Columbia.

#126 Abitibi Doug on 04.05.12 at 11:27 am

@Tony Right, post# 118:
For the most part, I agree with you but not all Boomers are the pathetic type you described. I am a 51 year old Boomer who has NO DEBT, has investments in equities, and lives well within my means. Some of these habits I learned from my parents, who were born during the depression, and because they were raised by parents who lived through the depression, learned to manage money sensibly. The rest I learned thorough observations, like seeing past bubbles and how they ended up (gold in 1980, real estate in 1989, and tech stocks in 2000) and the rest by reading books by people like Garth, David Chilton (the Wealthy Barber), Gordon Pape, and many others. What I don’t understand is why so many Boomers, who like myself were also raised by depression era parents, are so foolish and reckless with money.

#127 TnT on 04.05.12 at 11:45 am

Cam Good is smart. He sees an opportunity and uses his skills and resources to work the “system”. People buying from him are stupid. Anyone who signs up for a multi-year commitment without doing their homework is stupid. There’s more than enough free resources out there to get balanced data on when / where to make a dwelling purchase. Someone has to pay… just like someone has to make the french fries – just ain’t gonna be me.

#128 Suede on 04.05.12 at 11:47 am

Thinking outside the box:

If someone had to cough up the difference when renewing a mortgage (mark early 2017 on your calendars when the 5yrs all expire) – Banks or lenders would likely have a structured product where you could borrow money (shocking) to pay that difference. More debt, yes. Exactly the opposite of what OSFI intends.

Banks have 6 months to think 2-3 moves ahead once the regulations are implemented.

Smoking Man could be right, of the people that i know (small sample size therefore) that have MBA’s, they work for a couple of the Big 6. They are content for middle management positions and status quo because they enjoy the larger paycheck – but none of them have ever even incorporated a company other than on paper for their courses. Risk is not predator and prey for them, it’s just a number on a piece of paper with a fancy calculation.

#129 truth hammer on 04.05.12 at 11:49 am

” A majority of those who bought since 2005 will become mortgage prisoners within the year”…..the press is just getting to this now?

Bwahahahahahahahaha !!!!

As we see…the sheep have begun to realise they’ve been corralled and have become wary as the recent poll suggests states that a majority have no intention of buying in the next two years…… spite of the zero down…zero rate policy to shoo them up the ramp into the real estate abbatoir

No matter what the rate or the teaser to get in…….the mortgage payment is based on the price…….and that has many reviewing their GR 8 math skills…… dude……$500,000 to 800,000 for a 350 sq ft condo is a lot……man !

When sheep get restless…they run……..can anyone say……staaaaaaaammmmmmmppppeeeeeeedde !!!

#130 maxx on 04.05.12 at 11:57 am

#24 Bill Gable on 04.04.12 at 10:16 pm


Misrepresentation precedes fraud.

#131 zeeman1 on 04.05.12 at 12:03 pm

#79 scib.

Don’t do it. The NDP can say anything they want to make the soft headed feel good because they know they’ll never win, and they get paid the same either way.

Take a look at the Freedom Party of Canada if you want real change and are tired of vote buying.

No, Garth I am not a member but they have a good platform.

#132 JM on 04.05.12 at 12:14 pm

How’s this for bankster story. My mortgage is due Jun 29th with an outstanding balance of 250K. I’m in the military and will be renting at my new location. I have to move on Jul 15th, based on my message and the requirements of my new location. So, to extend the mortgage to Jul 15th (when I plan to sell), the bank will renew my mortage for one year, then discharge it on Jul 15th, for the low fee of 1% of the remaining balance. Yes ladies and gents, $2500 to extend my mortgage by 2 weeks! Criminal!

#133 vreaa on 04.05.12 at 12:25 pm

“Garassino has actively discouraged her own kids from waiting around in Vancouver to find out how it unfolds” – “I tell my kids to go out and seek their fortune elsewhere. You can’t do it here. These are kids that could build Vancouver. They’re educated, ambitious and entrepreneurial, and they don’t think that Vancouver represents opportunity for them.”

– from an article by Max Fawcett

#134 Cam Good on 04.05.12 at 12:27 pm

Will you go on a magic yellow helicopter ride with me?

#135 ferret on 04.05.12 at 12:27 pm

Cam Good is smart? LOL.

Most smart people I know do not get ahead or gain notoriety by working a loophole, exploiting the uninformed, or luring in the financially strapped by inciting emotional reactions through half truths.

That’s the problem with todays world. Cam Good gets labeled as “smart”, even by Garth, when in fact “smart” is also how bankers described credit default swaps, mortgage backed securities, and zero down mortgages.

Cam Good is a predator. He’s far from smart. He is living during a time that allows him to get away with shenanigans, but it won’t last forever. At some point intrinsic value will come back into this corrupt market. Cam Good will then be left to show the world what he has to offer, not what he can contrive.

#136 Mike on 04.05.12 at 12:38 pm

Wow. Wouldn’t that be something if Global TV voluntarily (or was forced) to air a few “correction” reports exposing the lies that Mr. Yellow Heli told during his last few “stories” with Global. Imagine the panic in the market if all the sheepel realized that Vancity’s hottest RE Agent was actually pulling a fast one on all them.

#137 Zidartha on 04.05.12 at 1:03 pm

“The aging of Canada’s population will put upward pressure on wages as the pool of available workers shrinks, and global aging might over time lead to lower interest rates, Bank of Canada Deputy Governor Jean Boivin said on Wednesday”

Curious, why would this inevitably lead to lower interest rates?

Read more:

#138 Chris L. on 04.05.12 at 1:09 pm

Flaherty thought about it this way first: “I’ve unloosened mortgage lending three times (he held up his 3 fingers)…I don’t want to do it again.”

He took it back and instead went with: “I’ve tightened up the mortgage insurance market three times … I really don’t want to do it again.”

You can use that in your next blog post if you want Garth.

#139 };-) aka DA on 04.05.12 at 1:11 pm

Sorry to burst your bubble folks (or anti-bubble as the case may be) but if you were actually in the market you would see that things are ramping up nicely. When I say “nicely” I mean moderate caution by level headed buyers maintaining values through their purchase of realistically price seller’s properties. On either side of that “balance” no one is getting what they think they should.


#140 Andrew on 04.05.12 at 1:12 pm

Anyone catch Mr. Goods Freudian Slip at 2:00?

A Freudian slip, also called parapraxis, is an error in speech, memory, or physical action that is interpreted as occurring due to the interference of some unconscious (“dynamically repressed”), subdued wish, conflict, or train of thought. The concept is thus part of classical psychoanalysis.

Yeah, realtors really want to get their clients the best deal.


#141 Bailing in BC on 04.05.12 at 1:20 pm

#131 JM

Can you sell earlier and rent back from the new owner for 2 weeks? When we sold our house the new owner wanted to close a month before we were ready to move so that they could get a mortgage that they were pre approved for at a great rate. We just closed early and signed a rental agreement for a month for $0. Even if you had to pay rent it would probably be less than $2500 and you wouldn’t have a mortgage payment on top. Better to give money to the new owner than 1 cent to the banksters

#142 anon on 04.05.12 at 1:35 pm

Can someone clarify – can the OFSI enforce anything?

These are simply guidelines, so it really has no “teeth,” so to speak.

My disclaimer is that I know little of the role of the OFSI.

It regulates the bank. It can force any change it wants. — Garth

#143 daystar on 04.05.12 at 1:36 pm

93 Kevin on 04.05.12 at 7:52 am

How does negative equity “perhaps lead to mortgage default?” Your home equity (or lack thereof) has absolutely nothing at all to do with your risk of defaulting. Only your income matters. – Kevin

Income is only the half of it. What triggers negative equity to begin with? The cost of borrowing and that sure matters. As we know, if interest rates go up, payments go up, it gets priced into the market and home values go down, LTV goes up and if current OSFI draft regs are introduced in current form or the ability to lock in terms is reduced or taken away, those who want to lock into terms will only have one option which is to float their loans at variable rates.

If higher rates are the trigger to home devaluations to begin with, negative equity no longer becomes the only issue, the cost of debt service relative to income becomes “thee issue” and if rates are trending higher and mortage holders in droves are forced to float in that climate, listings will explode, dropping values will capitulate even more listings and dropping values and bankrupcies will mushroom by the truckload.

#144 Daisy Mae on 04.05.12 at 1:42 pm

#26 Can it be?: “The cost of things is definitely on its way up…. People are just starting to feel it.”


Right! So….all our disposable income is spent on increased utilities and taxation bombarding us from every angle and every level of government.

What will that accomplish? The situation becomes more and more out of kilter….

#145 Makavelli on 04.05.12 at 1:46 pm

82k full time jobs created last month. Who needs those Chinese guys.

#146 johnny5z on 04.05.12 at 1:47 pm

#93: The classic definition of insolvency is when liabilities exceed assets. That’s old school. While cash flow is of paramount importance, most lenders and the folks that regulate them don’t like negative equity (also known as LTV> than 100%).

People who are in the business of predicting default first look to how much was put down at purchase. There’s an amazing correlation – believe it or not, the more that was put down, the less likelyhood of default.

#147 Patsan on 04.05.12 at 1:58 pm

#127 Suede

Banks can come up with whatever new products, however, debt payment has its mathematical limit that is somehow related to wages that are not keeping with the speed of debt accumulation. If a requirement to ammortize HELOC is thrown into the equation, there could be a totally different picture.

#148 Daisy Mae on 04.05.12 at 2:03 pm

Realistic on 04.04.12 at 10:30 pm

I think F is scared…:

#29 REALISTIC: “Canada’s finance minister said on Wednesday he would rather not tighten mortgage rules again to curb high household debt and that banks themselves are taking on that job by becoming more strict with their lending criteria.”


Of course, he’s scared. He’s a gutless wonder.

Flaherty is so busy trying to save face, he refuses to do the right thing. Namely, raising DPs and reducing amortization periods to 25 years….which have been in place forever and which always worked. Duh!

The banks can’t be blamed for simply doing what the government allows them to do. It all boils down to ‘human nature’. Top executives are human. I think…

Flaherty doesn’t give a damn about Canadians.

#149 Daisy Mae on 04.05.12 at 2:06 pm

Flaherty and the ‘cons’ are just passing the buck trying to take the heat off themselves.

It won’t work.

#150 jess on 04.05.12 at 2:14 pm

rhyming assumptions? SFUN|newswell|text|Business|p

#151 jess on 04.05.12 at 2:21 pm

????? forgot to include this

Business Summary
SouFun Holdings Limited operates a real estate Internet portal in the People’s Republic of China. It offers marketing services primarily through advertisements on its Website to real estate developers in the marketing phase of new … View More

#152 Arse on 04.05.12 at 2:26 pm

#106};-) aka DA

People on Welfare in Toronto get about $560 a month. That is $3.50 an hour, not $15 an hour.

Also people on welfare in Toronto receive only basic and emergency dental care.

#153 Patsan on 04.05.12 at 2:27 pm

Reuters: Canada banks need more mortgage oversight-OSFI

A key proposal in that guideline was to lower the minimum loan-to-value of uninsured home equity lines of credit (HELOC) to 65 percent from 80 percent, a nod to the increasing role HELOCs play in raising consumer debt loads.

Once implemented, does it mean that we will be seeing HELOC demands of payment from the banks to the borrowers that do not qualify?

#154 Mikey the Realtor on 04.05.12 at 2:32 pm

The OFSI can try and do what it wants, but when the economy start tearing apart at the seams because of their policy’s they will have to back pedal. I dont see how the government allowed cheap rates, high amortization, cash back mortgages and then expect to pull the rug out from the same people that took advantage of their irresponsible policies.

#155 eagle eyes on 04.05.12 at 2:36 pm

#106 aka DA

*Substitute Working Joe for Chinese New Immigrant driving a bimmer, hummer, or mercedes. Now you’ve got the clearer picture of where your tax dollars are going.

#156 Soggy Dreams on 04.05.12 at 2:56 pm

Michelle Miller, the reporter in the Global BC story, graduated from the esteemed Ryerson Journalism school. I wrote the Chair and others to let them know my concerns about this story. I also urged them to forward the video to the ethics professor so it can hopefully be shown to students.

#157 disciple on 04.05.12 at 2:59 pm

In case this blog gets shut down by the Feds, it can be called (Domain name is still available)

This link below is only for Aussie Roy. If you are not Aussie Roy, you are not authorized to click on it…

#158 Daisy Mae on 04.05.12 at 3:17 pm

“It regulates the bank. It can force any change it wants. — Garth”


And Flahertys’ hands are tied?

Puleeease say ‘yes’?

You bet. Yes. — Garth

#159 Harlee on 04.05.12 at 3:26 pm

And can any of you experts on this blog explain what TD’s latest tv ad with the two old guys is all about ? The two old guys sitting at a table with a young married couple :”We’re taking a mortage vacation” chirps the young woman with a big smile on her face.
I enjoyed the other ads with these old farts until now. Can’t figure out what the hell the point is. Looks like TD is getting desperete for some reason and is losing it.Very bizzare to say the least….

#160 Kevin on 04.05.12 at 3:35 pm

@Iconoclast (#114):

“If you’re underwater on your *only* asset, with no near-term prospect of improvement, why not walk away?”

Integrity? Your credit rating? You need a place to live?

Take, for example, a new grad fresh out of university. He gets his first job, making $65k/year. He rents an apartment and has no savings yet (he just started). He has some student loan debt. So he has a negative net worth.

He goes out and finances a new car.

He gets home and realizes, “Holy smokes, I’m underwater on my *only* asset, with no near-term prospect of improvement. Why not walk away?”

Really? You think the rational move here is for him to simply stop making payments on his brand-new car and let it get repossessed the first month after he bought it, just because he’s upside-down on it, and it will only keep going down in value?

How about the fact that he can afford the payments? How about the fact that he needs it to get around? How about the fact that he promised to make the payments?

Does none of that mean anything? For you, it’s simply “it’s his only asset, he’s upside down with no near-term prospect for improvement, he should immediately default on it.” Really?

How is a demand car loan on a liquid asset the same as an amortized $300,000 mortgage on an illiquid one? — Garth

#161 Believer on 04.05.12 at 3:35 pm

I spoke to someone yesterday and he believes that “Canada is different” . The reason is that we get every year 300,000 immigrants, and each of them brings $100,000. Of course he has huge mortgage. No comment.

Patent rubbish. — Garth

#162 Alex n calgary on 04.05.12 at 3:36 pm

Of the many good posts today, Marco and Steev, check em out.

Back at the lawfirm I work at, older woman, late 50’s, I was chatting about my problems finding a decent rental in this town with a dog, single detached and double car garage, fair enough, why don’t you buy she says….housing is too high. She snorts, it already corrected in 2008, 5% or less I say, she says no way, then mentions the investment condo she owns, clearly her retirement dreams from the hellhole secretary job she has processing real-estate transactions. Houses are really unstable right now, a correction is coming, I say. DREAM ON she says, it’ll keep going up…. I tell her to have a look and google it, after all you sit in front of a computer all day.

No chance of that, her evidence of believing Calgary is an invulnerable powerhouse of oil and gas that could never experience a downtime….driving houses higher and higher, no internet research, no nothing, waiting to get wiped out, perhaps after this bust people will learn to utilize this amazing thing called the internet to do 15min of reading before hitching themselves up to 500k+ of volatile investment, saddens me.

Also pisses me off we can’t get a bloody house and have to keep renting, I hate moving, landlords are so greedy, SIGH correct and get a little stable so I can have something that isn’t a massive risk already, sheesh a roonie.

#163 Two-thirds on 04.05.12 at 3:43 pm

Concerning the timing for the OSFI regulations release, they may not have to wait until December, according to Reuters:

“TORONTO, April 5 (Reuters) – Canada’s financial services regulator is demanding that banks tighten their board oversight of mortgage lending practices as loan books soar and Canadians struggle under record debt loads.

Speaking in Toronto ahead of the release of new corporate governance guidelines this summer, Julie Dickson, head of the Office of the Superintendent of Financial Institutions (OSFI), said the regulator had noticed cases where board-approved policies were not being followed.”


Summer? That would be better than Winter, but post-spring market peak.

I published that timetable here prior to the budget. The new mortgage rules will be in force by the end of the year. This is not the same as governance guidelines. — Garth

#164 Fabrega on 04.05.12 at 4:03 pm

#131 JM

Criminals above the law. These thieves should be hanged.

#165 Canada BIGGEST housing ponzi Bubble in the world on 04.05.12 at 4:08 pm

Mikey the Realtor #153

Every realtor , banker, mortgage broker and government officals knows that Canada has the BIGGEST HOUSING PONZI BUBBLE IN THE WORLD. Take away communist CHMC and see where the FREE MARKETS take housing prices. Without CHMC housing in Canada would crash 50% overnight and that is 100% fact.

#166 Realtors in a PANIC on 04.05.12 at 4:12 pm

The housing bubble is so large that realtors and other vested interests dare not use numbers to justify the ponzi bubble. They can’t even spin the numbers anymore since they go against the laws of economics. The sad fact is once the ponzi crashes Canada will be bankrupt. The CONs are trying to bankrupt Canada plain and simple. The masses are to stupid to understand math.

#167 Just(not)AnotherSheeple on 04.05.12 at 4:29 pm

Re #105 Arse

Following four months of little change, employment increased by 82,000 in March, mostly in full-time work. This brought the unemployment rate down 0.2 percentage points to 7.2%.

Why not take a deeper look into the composition of this “full time” employment gain…

10,600 of these positions are in “public administration” in Ontario only- just when we had the new “austerity” budget.

So there will be soon up to 10,600 new house or condo buyers in Ontario once they hitch on the permanent position with DB and generous pension…

Haven’t checked the 32,000 position in “health care and social assistance” but one can guess who is footing the bill for these too…

Austerity “Canadiana” TM

#168 D-dawg on 04.05.12 at 4:50 pm

#141 Can someone clarify – can the OFSI enforce anything?

#157 And Flahertys’ hands are tied?

The OFSI has no authority to legislate change. Their mandat is to administer and monitor the institutions which fall under thier influence. They are empowerd to enforce current legislation, not to change it.

The head of the OFSI is Julie Dickson, she reports to F. F is the shot caller, not Dickson. The OFSI can ‘reccomend’ anything they want, legislation makes it real. That comes from F.

Wrong. Read this. No new legislation required. — Garth

#169 tkid on 04.05.12 at 4:54 pm

Sherry Cooper frets about the Canadian real estate market …

#170 Westernman on 04.05.12 at 5:02 pm

Van Guy @ # 73,
Maybe the 600 dollars wasn’t the only thing you brought back with you…
Maybe penicillin won’t work…
Still love Vegas, Mr. Caligula…?

#171 pjwlk on 04.05.12 at 5:06 pm

Here’s putting an end to the notion that nobody cares about the European debt crisis anymore.

CANADA STOCKS-TSX hits 3-month low as Europe fears return.

#172 anon on 04.05.12 at 5:16 pm

Look for hour 3 – interesting discussion on real estate in Canada

Cam Good makes an appearance. Funny to listen to his biased responses. That dude is a media slut.

#173 Told-you-so-in-2007 on 04.05.12 at 5:28 pm

106 };-) aka DA


I’m learning more about you every day, and most of it is very scary:

#174 FI Guy on 04.05.12 at 5:29 pm

#152 Patsan

No, it won’t. Those that are above the 65% LTV are likely to be forced into an “amortizing” mortgage. This will not be a huge deal for many borrowers.

But, it will slow credit growth. GDS/TDS ratios will increase as a result of the additional principal amount that is required to be paid on mortgages.

#175 I'm stupid on 04.05.12 at 5:30 pm

Hi Garth

I had a few questions I hope you can answer for me.

1. Can you recommend a good financial planner? One that is trust worthy and will not put my money into mutual funds or gics.

2. Do these financial planners require a minimum investment?

3. What is the cost to have a fully managed account?

Thank you
I’m stupid.

Contact me offline. [email protected]. I’ll try to help. — Garth

#176 I'm stupid on 04.05.12 at 5:36 pm

On another note

Here are what some home builders in the grace are doing.

They install programmable thermostats in your new home. The catch is that you rent them for $3 per month and you are locked in for 3 years. What a joke, this is criminal.

#177 Smoking Man on 04.05.12 at 5:52 pm

Bubble heads u see those job numbers what do you think the herd sitting on the sidelines will do with that info

Better yet carney now has no excuse but to pump up rates remember they only go up when the labour pool shrinks

At the pool with a 30+ hottie with barnd new toung stud just dieing to take it for a test drive

Bald and old with big ass beer belly I call it a pillow

What to do


#178 John on 04.05.12 at 6:13 pm


A bit lost on where your conscience is at. The Dentist and Lawyer were about to create Real Estate suicide, you got all the way out to Ireland and Spain in the convo with the guy, and all you talked about was real estate?

You’re both quite possibly on laughing gas. No wonder he didn’t listen.

You’ve got as much company not talking about the economy as the delusional lawyer and dentist do buying real estate at the top of the bubble.

The weird thing is that you all have internet connections. If you don’t want to know, you’re not going to ask. It’s how denial works.

#179 Mr Buyer on 04.05.12 at 6:16 pm

#176 Smoking Man on 04.05.12 at 5:52 pm
Bubble heads u see those job numbers what do you think the herd sitting on the sidelines
The herd sitting on the sidelines are doing so not because they are chomping on the bit to get in the game, they are on the sidelines because they can not get in the game, EVER. It is over. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ALL ACROSS CANADA. THE BUBBLE HAS TOPPED. DO NOT GET BURNED VERY BADLY.
PS. The herd has likely reached the point of financial exhaustion and this will become even more apparent over the coming days, weeks and months, even in TO and VAN.

#180 Cowpoke on 04.05.12 at 6:25 pm

Sounds again like the ‘big print giveth’ and ‘the small print taketh away’.
This hasn’t changed a bit in my life time.
Bait and switch.
Call it what you like.
Nobody’s ever really done anything about this.
The scams go on and on.
Continual fleecing of the lambs.
You city folks are so….

#181 Mr Buyer on 04.05.12 at 6:36 pm

BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE. Do not let the sales people convince you things are otherwise. SALES ARE FALLING ACROSS CANADA.Those pushing real estate now are extremely leveraged and must make a sale. They will say anything to get you to indulge your desire for a home and the financial security it once represented. That security has left the housing market and will not return for much longer than anyone wants to admit. Sadly, your family must wait. THE BUBBLE HAS TOPPED AND A CRASH WILL SOON BE UPON US. DO NOT GET LEFT HOLDING THE BAG. Businesses went bankrupt even in great economic times and these are anything but great economic times. Our homes have been turned into financial fire traps by our national government (not the banks or sales people). Remember this next election after your dear friends and family members get burned by this horrific bubble. SHAMEFUL and OBVIOUS.

#182 TakingResponsibility on 04.05.12 at 6:43 pm

#115Hicksville Alberta on 04.05.12 at 10:32 am

“I’m totally with you on voting the Bums out and that is why i am voting Wild Rose in Alberta for starters.”

Voting for the busty bus….and, why? Because the Conservatives are lemon socialists? But, Hicksville, you do know that there has been considerable inbreeding between the C’s and WR….

Gahhh…. I just do not get the logic.

You know, the thought process behind such a radical act such as voting Wildrose. ; )

#183 truth hammer on 04.05.12 at 6:53 pm

#23 Steve……right you are….the pigs gets slaughtered. The one consistent factoid about mania’s is that it takes until such time as entire populations climb aboard convinced that there is only blue sky ahead before they implode. It’s not’s not timing, angst or legislation …. the big kaboom will happen when as many suckers as can fit have climbed aboard the back of the pig.

Conversely…bull markets buck as many riders off as possible leaving more losers than wiinners on the way up.

Pigs get slaughtered……written on the backside of the ten commandments.

#184 mr bubble on 04.05.12 at 6:58 pm

I looked at the monthly stats for the month of March on the Vancouver Real estate board website.

new listings up 16% y/y
sales down 29% y/y
detached home sales down 34% y/y
apartment sales down 26% y/y
townhomes sales down 25% y/y

#185 Daisy Mae on 04.05.12 at 7:23 pm

#125 DOUG: “What I don’t understand is why so many Boomers, who like myself were also raised by depression era parents, are so foolish and reckless with money.”


Because they believed the government would take care of them.

I know ’cause I listened to people discuss this very subject in years past….they were spending freely with absolutely no thought with regard to retirement.

#186 Daisy Mae on 04.05.12 at 7:29 pm

#126 TnT: “Anyone who signs up for a multi-year commitment without doing their homework is stupid.”


And naive…and gullible….and greedy….

#187 Ronaldo on 04.05.12 at 7:43 pm

#158 Harlee – Does this answer your question?

#188 Daisy Mae on 04.05.12 at 7:48 pm

153Mikey the Realtor on 04.05.12 at 2:32 pm

“The OFSI can try and do what it wants, but when the economy start tearing apart at the seams because of their policy’s they will have to back pedal. I dont see how the government allowed cheap rates, high amortization, cash back mortgages and then expect to pull the rug out from the same people that took advantage of their irresponsible policies.”


SOMEONE has to pull in the reins….and that ‘someone’ is this stupid, irresponsible government.

#189 eddy on 04.05.12 at 7:49 pm

If the client Always pays on time, i would expect an offer to renew in the mail irregardless of loan to value

Re: automatic mortgage payments. Every late payment event is recorded, resulting in a ‘red flag’. When the term is up, red flags= “let’s take a closer look, perhaps he’s having problems”.

#190 Ronaldo on 04.05.12 at 7:55 pm

”Ms. Cooper, the chief economist at Bank of Montreal, is starting to worry about Canada’s housing market after refuting the arguments of the extreme bears in the past.”

Amazing what a difference a year makes. Was she calling you an ”extreme bear” Garth? Too bad you weren’t at the last round table.

#191 Daisy Mae on 04.05.12 at 8:25 pm

F-35s to cost $14.7B over 20 years: Harper government

For the latest on this breaking story, visit

#192 Smoking Man on 04.05.12 at 8:27 pm


#193 Gross Pig on 04.05.12 at 8:34 pm

Toronto Star, April 05, 2012 Business Section
” City’s condo frenzy reaches new heights”
“27 new projects launched just since January”

Garth, they have skin in the game. You are saying that they don’t know what they are doing. You just talk.

Since when is a ‘frenzy’ a good thing? Run. — Garth

#194 Abitibi Doug on 04.05.12 at 8:34 pm

@Zidartha, post #136:
I read the same thing in the Globe and Mail today, and can tell you that if you believe that I’ve got some Nortel shares I’ll sell you for the rock botton bargain price of only $100 each. The assumption has been made all these older people have generous pensions and will have no desire to work. The reality (completely ignored) is that many of these people have little savings, and if they have all their net worth in housing (which is going to drop in value) they will need an income. They will go back into the workforce and flood the market with labour. The good news is if there is actually a shrinking labour force (not likely, as more jobs are made redundant through automation) it may put an end to age discrimination by employers. It’s hard to say how that will affect interest rates except that stubbornly high unemployment will keep rates down, although probably above today’s extremely low rates.

#195 TurnerNation on 04.05.12 at 8:44 pm

Pain at the pumps these days. Over a barrel.

“In Soviet Russia, gas pump you!”

#196 Smoking Man on 04.05.12 at 8:53 pm


#197 Hicksville Alberta on 04.05.12 at 9:19 pm

#181 Taking Responsibility

I have no problem whatsoever supporting the Wild Rose as a viable, responsible and energizing alternative to the Conservatives in the Alberta election.

I’ve been a comparatively generous financial supporter of the Provincial Conservatives for many years till recently when i felt they had become financial spendthrifts and had lost their way.

I can’t believe that they could come up with an over $ 40 Billion budget for about 3 1/2 million people this year ending up with a deficit.

I know three of the P.C. sitting members including one who ran for leadership this time and last and seeing them in action and the changes in them over the past few years makes me think they have become sellouts and they all need to be turfed.

The pay, tax free allowances, so called cash severance payments and overly generous pensions they have built for themselves are putrid and revolting.

Two or three terms as an elected member allows each of them likely to become millionaires or more and that does not count the connections, etc they make on their way through.

As far as the Libs and NDP both of their leaders have yet to leave their Edmonton Pens on the campaign trail and any policyspeak that is reported on the News as coming from them appears shallow and “ignorant” and they are truly undeserving of any support.

I could be wrong of course but i have placed my bet and am more than willing to allow the new blood their chance at the trough.

#198 ShowMeTheMath on 04.05.12 at 9:40 pm


You said: “It means if you got a mortgage for 95% of the value of a property, when it comes time to renew the loan, it still cannot exceed that LTV. So if the property fell and the owners were in negative equity, no renewal unless they cough up the difference.”

If housing prices slide, we will certainly get a bunch of people in negative equity. If I’m understanding you right, the government will force the banks to force the citizens to pay what could be the equivalent of another down payment, or declare bankruptcy? Why would you willfully push your citizens into bankruptcy? Why not allow them to ride out the lows, even if it does take 15 years.

Can you provide a logical explanation of why the government would want to do this to its citizenry? Or am I completely missing something? Is it somehow a net benefit to Canada’s economy in the long run? How?


#199 The Thing in the Basement on 04.05.12 at 10:56 pm

In support of Kevin’s posts, straight from the OSFI

“The borrower’s
demonstrated willingness and capacity to service their
debt obligations on a timely basis should,
fundamentally, be the primary basis of a lender’s credit

#200 Mr Buyer on 04.05.12 at 11:37 pm

#196Hicksville Alberta on 04.05.12 at 9:19 pm … supporting the Wild Rose
You can call it what you want but that doesn’t change the fact that the conservatives are western (reform) conservatives. We as a nation do not need another political movement that is interested in damming upstream to starve out those downstream so you can buy up their spreads for a song.

#201 D-dawg on 04.06.12 at 12:47 am

#167 Wrong. Read this. No new legislation required. — Garth

Thanks for URL that G.

The only thing that the OFSI is saying is that FRFIs *should* have a Board-approved Residential Mortgage Underwriting Policy which *should* do a lot of things.

The Guideline does not affect the rules for insured mortgages, which are set by the government.

I dunno G, hardly convincing that sweeping lending reforms are forthcoming.

#202 NAGA on 04.06.12 at 6:39 am

Regarding having to pony up additional equity on renewal has happend before. I have experienced it with my worst RE investament – bought condo in 1987 – closed in 1990 and on renewal in 1995 I had to pay out an additional $10,000. This was a 100% leveraged investment with 75% 1st and 25% second. Intial cost about $140,000, worth about $115,000 on renewal – today worth about $220,000 – somebody else (renter) paid off the mortgage. Today rents for $1,350 and condo fees are $520. Not a great return but not bad based on the fact that I did not put up any money – someone else repaid the mortgages and now I have an income stream and a nice chunk of equity in the value of the condo. No worries about a correction even if it is a 50% drop. Not sure how many other investments would have produced same results based on a 100% financing strategy.

Now new topic as reading, worrying and waiting about imminent RE collapse not productive.

Garth – have you thought about the economic impact of the current trend of increasing gasoline prices – both on Canadian and other economies? I think that in the short term and depending on how long prices stay up or continue to rise we will see negative implications. However, over the longer term – not sure if this is 2 or 5 years or longer – as a result of shale gas exploration both natural gas and oil will change the global geopolitical realities. This is based on the fact that the current middle east oil producing countries will no longer be able to dictate oil prices (Cost of oil in the longer term I expect to settle around $50-$60/barrel) – but as we are finding out the cost of refining is ever increasing so that the cost of gasoline may not necessarly drop – unless the big oil cartel is broken and more refinery capacity added – especially in Canada.

Anyway – Garth even though I do not always agree with your rantings on RE ( although I have agreed that we will see a correction – more like a soft landing for SFH – and possible slaughter of condos prices) I do respect your thoughts and breath of coverage of issues related to investing.

Will you consider doing a piece on the future of oil? do you agree with “peak oil” theories? implications on inflation and investing strategies? is shale exploration a game changer?

BTW Re Cumberland development – I had another look this AM – don’t think I would fit in it as you suggested lot too narrow