Rhetorical

A conference of real estate poohbahs, bankers and economists in Toronto this week concluded there’s no real estate bubble. In the quixotic Lower Mainland banker Helmut Pastrick told reporters the housing market is “not skyrocketing away from us. Nor is it likely to fall into the tank either.”

TD econo guy Francis Fong said yesterday home prices are cooling so, “the pace of growth in household credit is no longer a reason for the Bank of Canada to move from the sidelines any time soon.” No mortgage hikes to worry about, kids. CMHC, ever a credible source, reports, “clear evidence of a bubble is lacking.” A Canada.com column concludes that, “big city condo values will continue to rise in general.” No bust there.

And the CEO of the Royal Bank (with a mortgage portfolio of $165 billion), Gord Nixon, has just uttered this: “When we look at the overall marketplace, there might be pockets of vulnerability but we remain quite comfortable. Frankly, I’d like to see the rhetoric come down a little bit.”

So, see? It’s okay. The enemy is not runaway household debt, banks lending wads to people without the discipline to save, unrepayable mortgages, the Boomer bomb, teaser rates, cash-back bribe loans, HGTV horny granititus, credit-fueled bidding wars or houses families can no longer afford.

Nope. It’s rhetoric.

Damn all those words, phrases and sentences. That paragraphing and devious punctuation. Clearly contrarian ideas and warnings have no place in a decent and safe society. It’s hard to imagine what might happen if they morphed into thought. Obviously, you are with the realtors, or with the terrorists.

Meanwhile most people go on with their lives. Corks on an ocean of change. A few wash up on the shores of this pathetic and subversive, rhetoric-drenched blog.

“Hi Garth. I am a loyal blog dog and would like some advice. My husband and I are late starters – he just completed his PhD and got a solid job that starts in August. Combined we’ll $165k annual. Savings $35k. Modest car. We rent. No children. Two great cats. We have no other assets as we are starting out late (both in mid-thirties and have moved around and kept it fairly buddhist like).

“I have wanted a house for close to forever. Most women want babies. I want my own space to design and be creative. We are approved now for $600k (on one wage) so who knows how much we would be approved for come August (that is scary to think of it).

“I think that the market is bobbing its last bobs before going down but I think it will be a slow and painful process to watch. I don’t want to spend the next five years renting with my popcorn on the sidelines. There is one place that I think has great potential, and still has homes that will be protected from the death spiral- Hamilton. The city has lots going on, I love the history, the walkability, and I am a sucker for an underdog. I am thinking we should get a place in the $120-150k range with the aim of paying it off in five years and living comfortably. I have checked out the market and there are plenty of homes in that range that I would live in (and yes, I know Hamilton, and no I am not scared).

“My question is this – for those of us sitting on the sidelines how long should we wait? Am I crazy for routing for Hamilton? Are there some places that won’t fall as badly as others? – Natalie.”

The good news is that Hamilton has some truly cool areas, great houses and an affordability which will never return to the godless GTA. The bad news is, it’s still Hamilton, which means you have to lie, or slur heavily, when visiting friends in Toronto.

If your work allows you, this is a great choice since any real estate correction will have a marginal impact on $200,000 houses located a one-hour ride from Bay Street. Go for it, Nat. You are one sensible woman. Is there anything hotter than a Buddhist babe with fully achievable expectations? And six hundred thousand. Did Gord give you that?

Here’s Steven. Come for a rhetoric refill.

“Love your blog. Yeah, renters like me always say that. Anyway, I have noticed a couple of things out here in the west coast. And that’s that while there was a ‘Groupon’ style condo sale, condo king Bob Rennie sold out a new building in a half day two weeks ago to primarily Asian (though we don’t know if they are offshore) buyers.

“This can truly only mean one thing – ‘flippers’ are back in the game. Not everywhere, and I’m not sure what kind of jungle telegraph people use to buy these places, but there is no way that people are purchasing these units to actually live in. How does that whole Ponzi scheme of condo buying work – are the contracts like futures contracts on real estate??”

Steve, forget it. There is no condo craze. No speculators. No ponzi. No jungle telegraph broadcasting messages of hormonal greed. No flippers. There is no Bob Rennie. You have just been reading this blog too much, which makes hair grow on your hands. You must stop now. And, for the love of Gord, buy something.

“Hi Garth. I am a reasonable Chinese person. My in-laws have been putting constant pressure on me to buy a house for my wife and I.  Even though I recognize that this is not financially wise, I have given in to their demands.  I live in Kitchener-Waterloo.  I have been working for 2 years and make $75K.  Here are 3 options:

“1. Buy a new $260K townhouse with $100/month maintenance near downtown Kitchener.
2. Buy a new $250K condo with $400/month maintenance in a desirable area of Waterloo.
3. Buy a 5-year-old $325K detached house in the same desirable area of Waterloo.

“I believe that housing prices are too high, but which one of  these seems like the least brilliant investment?  Is the Kitchener-Waterloo housing price unusually high among small cities because of the large Chinese population?”

No, Jimmy, it’s because there are more than 70 Royal Bank branches in the K-W area, all of them rhetoric-free and filled with mortgage money at extremely reasonable rates. You should visit, and indulge!

Once you do, forget the idea of the condo with monthly fees and property taxes so high you might as well stay renting. If the bank is cheap with the funds  (RCP are not as welcome as HAM) then the downtown townhouse sounds like the best option – lower recurring costs, walkable location and a price low enough you’ll still be okay when RIM implodes. This is probably the most cost-effective way of getting your inlaws out of your face.

Oh, and Jimmy, when you’re at the bank don’t mention me. Deadly force awaits.

181 comments ↓

#1 broadway skytrain on 05.09.12 at 9:15 pm

only stupid children post ‘first’ , so i won’t.

when does the stk mkt swoon end?

#2 Randy on 05.09.12 at 9:17 pm

What bubble ???..haha

#3 Donalded on 05.09.12 at 9:17 pm

“The good news is that Hamilton has some truly cool areas, great houses and an affordability which will never return to the godless GTA.”

backtrack much? so now GTA won’t ever be affordable? Wishes this blog was created in 2010 :)

Sticking with the prediction: a 15% average price drop nationally, twice that in Van, less in 416, then years of languid torpor. — Garth

#4 T Bone on 05.09.12 at 9:18 pm

The Market is coming down tonight! Lol!!

#5 jake the snake on 05.09.12 at 9:18 pm

Premier!

#6 jake the snake on 05.09.12 at 9:24 pm

Garth, I was wondering if you could respond to this message in a very public and condescending way. I’ve faithfully read every one of your blog posts on this “pathetique” blog since December 2010 and feel that I deserve at least some recognition for that feat that I can show to my mom who thinks my messy living habits are the reason she can’t sell her house, since prospective buyers get turned off when they look at the basement, where I dwell.

Any sort of acknowledgement of my existence will be met with extreme gratitude, something I can really be proud of, since this blog has been at the very centre of my life for almost two years. I’m waiting with baited breath, with my index finger poised patiently over the left mouse button as I refresh the screen in hopes of getting a response from you (or your beard).

Let’s recap. Named after a reptile. Live in mom’s basement. Baited breath. Slovenly. Repel people from above. Finger mice. You fit the demographics of this blog perfectly. Mr. Nixon will be in touch shortly with details of your prize. — Garth

#7 torontorocks on 05.09.12 at 9:28 pm

Garth – affordability that will never return to TO. That worries me because I never imagined I’d be priced out of TO. Maybe Manhattan or London, but not TO.

So no 3-5x income ever again?

Now don’t go all rhetorical on me. — Garth

#8 TaxHaven on 05.09.12 at 9:30 pm

Yes, they fear rhetoric.

Because rhetoric that makes sense could lead to a LOSS OF CONFIDENCE.

And the economic-“growth”-forever, borrow-till-you-die Ponzi absolutely needs CONFIDENCE.

Without confidence, consumers might DELEVERAGE or – heaven forbid! – even SAVE.

#9 Dividend Yield Investor on 05.09.12 at 9:30 pm

Garth
15% drop is only a bit more than statistical noise. So what is the point of all the doom and gloom?
With the Van area at a 30% drop now you are on to something. Can you be more explicit as to the major cities?

My best regards!

Sheesh. I’ll say it again. Fifteen is the initial drop, not the end result. — Garth

#10 45north on 05.09.12 at 9:36 pm

I am a reasonable Chinese person. My in-laws have been putting constant pressure on me to buy a house for my wife and I.

for my wife and me

subjective and objective pronouns:
I me
he him
she her
we us
you you
they them

I’m aroused. — Garth

#11 Foggy on 05.09.12 at 9:36 pm

…CMHC, ever a credible source, reports, “clear evidence of a bubble is lacking.” …..

——————
Well Mr CHMC – perhaps you could define what parameters YOU would use, that would clearly suggest that there is a bubble. Oh, you don’t have any? Perhaps a 10:1 ratio of house price to income in Vancouver might give pause for thought? And there’s many many other blatant economic factors at present – too long to go into here.

Are these people just talking heads with no business acumen at all? What are they paid? How did they get these jobs?
I need a drink….

#12 X on 05.09.12 at 9:37 pm

Yep…our household debt levels are higher than the Americans ever were, and we just had 1 month in that it got bigger but at a slower pace….nothing to see here.

#13 a prairie dawg on 05.09.12 at 9:37 pm

“Damn all those words, phrases and sentences.”

– — –

I guess it’s only rhetoric if ‘they’ don’t write it.
Crisis averted. Phew, that was a close one. lol

http://business.financialpost.com/2012/05/09/banks-talk-down-consumer-debt-hysteria/

#14 Ryan Perich on 05.09.12 at 9:40 pm

a 10 % drop in one year is statistical noise IF you don’t move due to job or moving in with someone. but 10 % on a half million dollar piece of junk that’s 40 years old (like in Alberta) is 50 grand + closing costs + land transfer tax + lawyer fees + moving costs. When most people expect to make money, losing 50 grand just because they’ve only had 1 offer in 6 months which is less than the asking price…..and then the price drops another 10 % the next year, and the next, and the next….suddenly after 2-3 years it’s 5-10 years before your home value = what you owe.

and bankruptcy if you want to walk away from your property will cost you 21 months of some of your salary gone – at $40,000 / year – you owe the trustee almost $6,000 before you’re discharged. (1/2 of anything over $1900/month after taxes). Losing $6,000 for bankruptcy is a lot less than $50,000 + extras from a simple 1 year 10 % drop.

I’d declare bankruptcy and get a credit card 2 years later (yes – it’s called a secured credit card for $500 that you can get anytime by saving up $500, not to be confused with pre-paid useless credit card).

Garth and I are here to slap the asses of the masses -get it in gear ! declare bankruptcy already and come out ahead.

#15 Bottoms_Up on 05.09.12 at 9:46 pm

Time to revisit Peter Schiff rhetoric circa 2005-2006

http://www.youtube.com/watch?v=2I0QN-FYkpw

#16 Smoking Man on 05.09.12 at 9:50 pm

BATMAN

On May 1st

Me and Turner Nation were long on ERF I told him to bail.
————————————————————————————-
#128 Smoking Man on 05.01.12 at 12:29 pm
TurnerNation “This Huston. Shuttle ERF. Go with Throttle Up”
“Roger Huston going with Throttle Up.”
—————————————————————————————-
“Going with Throttle Up” is Trader Speak for disaster about to happen.

How did the Oracle of Oracle’s know, Am I a funky insider?, nope, the insiders don’t listen to me. The fking pre ma dona’s are to busy with their PHD level risk modles.(That never picked up 2008) They are always missing the obvious.

Got a chart here.

http://dyslexicsmokingman.blogspot.ca/2012/05/batman.html

#17 Smoking Man on 05.09.12 at 9:55 pm

The good news is that Hamilton has some truly cool areas, great houses and an affordability which will never return to the godless GTA. The bad news is, it’s still Hamilton, which means you have to lie, or slur heavily, when visiting friends in Toronto.

………………………………………………..

LMAO All my kids are buying in Hamilton.

#18 northerner on 05.09.12 at 9:57 pm

Garth the more I read on your blog the more Canada sounds like Australia, the only difference is just about all real estate in Australia is way over valued it’s not just limited to a few cities that are over priced. Anyway you
and your readers might be interested in this link, if you haven’t seen it already,
http://www.whocrashedtheeconomy.com/blog/2012/05/housing-busts-preceded-by-high-leverage-more-severe-and-protracted-imf/
The site also gives, in laymen s terms, a good description of the current economic situation in Australia (just swap the word “Australia” for “Canada”) and how it developed if you click around
Cheers and have a loverly depression

#19 Smoking Man on 05.09.12 at 10:00 pm

Did I not predict a few weeks ago of the pending tug of war for the minds of the slaves.

I think I did.

#20 T.O. Bubble Boy on 05.09.12 at 10:01 pm

Poor Jimmy – thinking too much. I don’t think they fly helicopter loads of RCP around looking for million-dollar properties…. he’s missing out.

#21 Chaddywack on 05.09.12 at 10:02 pm

So a 30% initial drop for Vancouver eh?

Guy down the street bragged to me last week that “My house will have a SOLD sticker on it by the end of the weekend” (800k asking on the corner of two busy streets in East Van)

Tonight I see something different on the sign….balloons!!!!

Any thoughts on seeing balloons Garth?

#22 Bottoms_Up on 05.09.12 at 10:05 pm

Natalie, I had friends buy a nice single just east of downtown Hamilton (nice quiet, treed neighbourhood) for around $140,000 ten years ago. They made money on it after a few years, but I’m sure it’s still only selling for mid-100’s. So don’t expect your home to appreciate in value…enjoy it for what it is…a home. A little unrelated, but there’s this amazing Lebanese restaurant called ‘Tarboosh’ on Upper James…it’s a small place, but dynamite food, I encourage you to check it out sometime.

To the reasonable Chinese person: buy option 1..unless your family has 2 incomes and you can afford option 3. Avoid option 2 at all costs.

#23 Axehead on 05.09.12 at 10:07 pm

FUUUURRRSSSS – ah shit.

Just had to try, always wanted to do that, and besides nobody has tried yet today.

#24 mid-Ontario on 05.09.12 at 10:13 pm

Great column Garth.
I agree with every word you said tonight.
Sleep well my friend.

#25 Inglorious Investor on 05.09.12 at 10:14 pm

Mania.

Open house in my hood on Sunday. Offers had to be in by 7 today. Ten offers in by 2:00.

Only God and the listing agent know how many actually came in under the wire.

Only firm offers accepted. No conditions. But seller has right to extend closing date.

Had to use the inspection report paid for by the seller.

At the open house I saw a prospective bidder who once admitted to me to colluding with the listing agent on another deal. Believe me, he’d do it again.

The listing agent berated me on the phone earlier today for asking questions like “Where should I drop off my offer?” Can you tell he’s busy?

My own agent told me not to bid on this one. Overpriced. Seller holding all the cards. Idiots waiting in line, aching to over pay and “win.” And the guy who makes under-the-table deals with crooked listing agents.

Mania.

#26 Canadian Watchdog on 05.09.12 at 10:18 pm

#9 Dividend Yield Investor

The only factor that stopped Canadian home prices from crashing in 2008, was a $1 trillion global stimulus package amongst G20 nations, helping boost confidence and creating jobs for the economy. This time there is no stimulus—making the next correction a helpless one.

#27 golem on 05.09.12 at 10:31 pm

45north on 05.09.12 at 9:36 pm
I am a reasonable Chinese person. My in-laws have been putting constant pressure on me to buy a house for my wife and I.

for my wife and me

subjective and objective pronouns:
I me

If you are going to be the language police here, at least be sure you are right first!

The correct word is ” for my wife and myself”

This makes catchment areas seem interesting. — Garth

#28 John G. Young on 05.09.12 at 10:32 pm

#249 Westernman on 05.09.12 at 5:58 pm

“John G. Young @ # 202,
Why on God’s green earth would anybody WANT to “understand” your “experience”…”

Guess you better ask “anybody”…

Like shooting fish in a barrel.

#29 AprilNewwest on 05.09.12 at 10:34 pm

It seems to me, from past experience, that this sort of rhetoric of talking down the decline in housing by so called “experts” is what usually happens, and it will continue all the way to the bottom!

#30 High Park Renter on 05.09.12 at 10:37 pm

“It is difficult to get a man to understand something, when his salary depends on his not understanding it.” — Upton Sinclair

#31 Mr Buyer on 05.09.12 at 10:37 pm

All housing is unreasonably priced across Canada because of a BUBBLE fueled by free money for Real Estate. THERE IS ONE OF THE LARGEST BUBBLES ON THE PLANET HERE IN CANADA AND IT HAS TOPPED. The more people with vested interests that line up against the obvious the more alarmed I become. First because of the potential of re-inflating and of and sucking more people up into the bubble along with a larger collapse to follow (but really it is long past the point of exponential increases in the magnitude of potential negative outcomes, it will be really really horrible as opposed to really really really horrible as things stand now so the powers that be figure why not go out with a big bang). I am guessing that the bubble propagators would like this to become the new norm (massive increases in interest revenues). Come to think of it, if I threw a good chunk of my change into bank stocks I would likely be soft selling the calamity to come and trying to engineer the best possible outcomes for my investments as well. I would keep telling everyone the traffic light signalling go is blue rather than green (In Japan many say it is blue, something about pronunciation of the colors dictates blue flows better off the tongue when grouped with red and yellow) if it served my investments well. Truth, we do not need no stinking truth. No accountability, no need for truth, just profit. I can not remember but didn’t they suggest in elementary school that profiting from deceiving and at the expense of others was generally a frowned upon thing. I am so stodgy and old fashioned. Anyways BUYER BEWARE. THE BUBBLE HAS TOPPED. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ACROSS CANADA AND THE BUBBLE PROPAGATORS SUCH AS THE BANKS AND REALTORS KNOW IT. DO NOT GET STUCK HOLDING THE BAG. It will not be ten years and a return to these values. We will likely never see these house values again.

#32 Peter Griffen on 05.09.12 at 10:42 pm

Garth when are you going to give it up? If the market stays flat for ten years, will you still be the fictitious king of the fictitious countdown clock?

Give up what? It’s only rhetoric. — Garth

#33 Eagle eyes on 05.09.12 at 10:42 pm

Good Lord Garth! Now you’re telling everyone to BUY, BUY, BUY?

I live in Richmond BC, the homeland of HAM. If Van is poised for 30% drop, then Richmond should follow suit.

My toes are touching the water and I feel I’m going to jump in any second. $550K townhouse with a $250 maintenance fee. What do you say Garth? You’re my rock. I need some guidance here.

Why buy now when you know it will be cheaper in six months? — Garth

#34 Mr Buyer on 05.09.12 at 10:47 pm

While the final outcome of this bubble is easy to predict. CRASH. The path to that outcome is largely a mystery to me. There will come a point at which the stimulus response relationships will no longer serve the bubble propagators. We are likely at that point now or will soon be. It appears we have reached a point where most everybody that got out with a load of cash will not ever be induced to jump back in and those scrambling will not ever get enough together to keep up with the bubble. CRASH.

#35 Mr Buyer on 05.09.12 at 10:54 pm

DO NOT BUY. ABSOLUTELY DO NOT BUY ANYWHERE FOR A FEW YEARS. TRUST ME. I WILL LIKELY HAVE TO BUY SOONER THAN LATER AND I HAVE THE SAME FEELING I HAVE HAD EVERY OTHER TIME A MADE A HUGE MISTAKE IN MY LIFE. JUST BECAUSE I CAN BLAME THE BUBBLE PROPAGATORS FOR TELLING ME IT WAS OKAY TO BUY ON THE EDGE OF DISASTER THAT DOES NOT MEAN HAVING AN EXCUSE IS A GOOD REASON TO DAMAGE MY CHILDREN’s FUTURE. WAKE UP EVERYONE THERE IS A BEAR AT THE DOOR.

#36 Industrial Guy on 05.09.12 at 10:56 pm

“There is one place that I think has great potential, and still has homes that will be protected from the death spiral- Hamilton. The city has lots going on”

OH MY GOD!! I can’t stop laughing .. Please, Please call the paramedics.

I work in Hamilton. It’s a perfect example of what happens when the entire economy built on minimum wage jobs and US based companies operating there want to pay industrial workers the same wages they do in Guangdong, China.

…. as for buying a condo in a desirable areas of Waterloo. Maybe he should wait until all of RIM’s issues settle down. The BB10 operating system better be a home run otherwise there will be a lot better condo deals to be had after RIM implodes.

Hamilton … The city has lots going on. Yes mam!!! Biker gangs and organized crime agree. If you like attending industrial auctions … Hamilton is the place for you.

#37 Mr Buyer on 05.09.12 at 11:14 pm

Lets see. There is a huge number of people with mortgages. I am guessing that number translates into a huge percentage of voters. This group of voters will likely be highly motivated to vote for whatever politician that can maximize the value of their houses (in essence their votes are bought and paid for with a high likelihood of delivery at election time). So all that remains to be done is to maintain high house prices at all costs. Never mind the Orwellian socialism that providing free money to all willing to invest in real estate represents with some being much more equal than others along with privatized gains and socialized losses (these are mere distractions). The real sad part of all this is that bubbles become totally unresponsive and ultimately crash for reasons not well thought out by myself at this point. It is like trying to control the wind by opening and closing the window.

#38 Jenna on 05.09.12 at 11:16 pm

I’m surprised you suggested the townhouse I thought you would be a land kind of guy.

I’ve decided to hold off until the fall. If nothing changes by then I’ll take the plunge.

#39 Al on 05.09.12 at 11:20 pm

#26 Canadian Watchdog; How about the coming QE3?

#40 DML on 05.09.12 at 11:23 pm

#15 Bottoms_Up

Good clip.Schiff was widely ridiculed throughout 05,06
but he stuck to his guns.

#41 Inglorious Investor on 05.09.12 at 11:28 pm

Yes, Hamilton is a hole. But it’s a hole that many people who work in Toronto may decide to crawl into and commute from. That is, if the economy ever gets back to actual growth. Wait, what am I saying?

#42 Smoking Man on 05.09.12 at 11:38 pm

My kids are starting to think about buying in Victoria, BC as well. In about 4 years.

Ground Zero kids.

Back to my lemonade….

#43 Mr Seller on 05.09.12 at 11:49 pm

#37 Mr Buyer

Relax. You are getting too uptight. Loosen your belt a little!

#44 truth hammer on 05.09.12 at 11:50 pm

#36 IG…if you have voted Liberal or NDP in the last twenty years you have voted for globalization and global socialism and as such you have voted for the ‘global village’ concept of having every industrial worker worldwide earning the same wages. The equalization plan was supposed to be paid for with carbon taxes placed against the rich consumers in places like Canada and all other western nations so that the cash raised could be sent to places like Guangdong China to increase the standard of living there by developing those industrial basins….so if you voted for Kyoto you voted for your job, wages and standard of living being flushed down the toilet to rise up in some other guys pocket in India Afirca China or Central America. The term that was thrown around was ‘sustainable development’ if you voted for sustainable development it didn’t mean jobs in Hamilton…it meant new jobs with cutting edge technology in China and eleswhere so that Canadians were left so far behind in the value chain that workers in this country could never again compete for labor with increased productivity. We all live in ‘one village’ right?

Lets face it…Canadians en masse got sucked in to to ‘sustainable development’ starting with Trudeaumania. It felt great to watch the news and see Canadian development taxpayer money flowing to Africa. Except Canadians didn’t understand what it meant to ship all the tax tevenue overseas instead of developing infrastructure and updating plants and machinery here first. Like a lot of great idea’s….nice on paper…pretty ugly on mainstreet Hamilton.

The Liberal ‘sustainable development’ mantra and Kyoto went flat when the British fingered the Africans on the floor of the UN for stealing 100% of the ‘sustainable development ‘ money to but mansions in France and the UK. If you ever visit the south of France you’ll see Canadian tax dollars floating around disguised as 400 foot yachts owned by poor African dictators escaping the heat.

Now by strange kismet, the Chinese bureucrats are stealing hundreds of billions of dollars from their own people as well and rotating them back into western countries to launder….now thats sustainable development.

You see IG…..the plan was to make the west an island of intellectual property….we would all become cloud people who didn’t dirty our hands……thats why the Liberals gladly gutted the industrial heartland of Canada and sent the jobs to China etc. They actually believed the hallucinations they were getting from the parties kool aid dealers and were ready to begin a new society of ‘service providers’.

The way this was supposed to work was they we would send the Chinese orders, they would put the crap together and ship it back to us. We would profit from the labor component efficiencies ( hey think of paying nothing for skilled labor infrastructure in Canada….no apprenticeships or expensice trade schools needed when you can use a Chinese or Indian at a fraction of the cost…..yippeee) and China would buy ‘services’ from us. The money would flow in a virtuous circle…right????? wrong. The Chinese took the orders…kept the money….and sent nothing but crap back….instead they had ideas of their own……they moved down the food chain and circumvented Canadian values…and started buying resources in the third world….with our money…our jobs…….and the jobs and money never came back.

The Liberal Party got hoodwinked and Canadian workers got the shaft. Still in love with ‘sustainable development’? By all means vote for the socialists again and let them finish you off….I mean finish the job…..I mean screw us again……oh well…you get the picture.

#45 Van grrl on 05.09.12 at 11:51 pm

#27 Golem
Seriously Golem??!

1.Reflexive pronouns are used when the subject and object are the same.
I hurt myself.
He shot himself.

2.They are used as the object of a preposition, when the subject and the object are the same.
I bought a present for myself.
That man is talking to himself.

3.They are used when you want to emphasize the subject.
I’ll do it myself. (No one else will help me.)

(uvic.ca studyzone)
———————
Now we’re on a sexy topic~ grammar!!

#46 Mr Buyer on 05.09.12 at 11:51 pm

It is possible that the masters of the universe have never encountered a situation in which the much maligned herd was unresponsive to their cajoling. Maybe the deft and artful hands on the tiller feel they are invincible. Maybe the US were rank amateurs at bubble propagation and management and our overseers with their hands on the wheel learned valuable lessons from our American cousins. The first lesson being “THERE IS NO BUBBLE.” THERE IS NEVER A BUBBLE” (the first rule of fight club is that you do not talk about fight club).

#47 Waterloo Renter on 05.09.12 at 11:58 pm

Thanks for the Waterloo reference. I am currently renting since recently moving to the area and have been figuring out if now is a good or bad time to buy.

Looks like I am right to be concerned of RIM’s sad outlook and effect on housing prices.

If anyone has more detailed info about the KW area please pass it along. I don’t want to scratch the house buying itch at the wrong time!

#48 Inglorious Investor on 05.10.12 at 12:00 am

Speaking of RIM, Ian McLean, the president and CEO of the Greater Kitchener Waterloo Chamber of Commerce was on CBC promoting the company that Jim and Mike built/killed.

In a rather shameless PR stunt he even conducted the interview from his BlackBerry. And of course he never heard of that iPhone thingy (OK, that’s not true). Like a true RIM believer, he bought RIM stock last year (wait, last year!?) and of course he never actually looks at the price. That would be too depressing.

RIM is to Waterloo what your Royal Bank branch is to that little shopping plaza down the road with the convenience store whose name you can’t remember (does it even have a name?) and the dry cleaner who offers next-day one-hour service.

So you can bet the stake holders will be getting louder and louder about this beloved but troubled enterprise. Let’s hope support doesn’t turn into outright denial, followed by pleas for the feds to save the day. Because, with businesses like RIM in town, Waterloo has an actual economy, unlike Hamilton. But if RIM folded, the hole it would leave would be bigger than Hamilton itself.

You can support real estate in Waterloo by buying a home there. Try to nuzzle up to 295 Phillip Street if you can and show all those naysayers that RIM will not only survive but it will thrive. No matter what they say (or don’t say) about BB10.

#49 Harlee on 05.10.12 at 12:01 am

I did get to the bookstore this (Wednesday) afternoon. I bought a first edition of Pierre Berton’s “Fast Fast Fast Relief” published in 1962. It’s a collection of short articles that originally appeared in the Star.
One of the chapters is “Glimpses into the Future”. One concerns the over-population issue.Like this:
“In 1987,the first of the farmers’ riots occured on the outskirts of Winnipeg,a few miles from Regina.The immediate cause was a new subdivision,five hundred miles long,straddling the Trans-Canada highway…”( All the houses are,of course , all indentical and each are on 20 foot lots).The riot is put-down by the RCMP. With the vanishing prairie there is less wheat grown and consumers complain in having to pay $5 for a loaf of bread…
By 1989 the population of Toronto is 5 million and the mayor proudly announces that this stat “outstripped the rosiest predictions of the demographers.”
Holland Marsh is drained and converted into a” popular midtown apartment district…” The mayor proclaims” “You just can’t stop progress”.
“In 1995,the T. Eaton Company announced the construction of the world’s largest supermarket” on land that was originally “the old municipility of Swansea.”
“In 1999,the province of Ontario…banned all house building within its boundaries.A subdividers’ lobby fought the legislation,but it was upheld by the Supreme Court in 2001.”
Various countries around the world start enacting laws to limit the size of families.”In 2020 the U.S. and Canada enacted federal laws making the birth of any child without a licence a crime.”
“In 2022,in Chicago,the first mile-high apartment was completed to house 2,500-family units…”That same year multiple dwelling life becomes compulsory in some states and a few provinces.
The amazing things you can learn from old books ..!

#50 MJG on 05.10.12 at 12:01 am

Garth, you write well. A dry wit, you must have British blood in there somewhere. I enjoyed tonight’s offering immensely. Thank you.

#51 Canadian Watchdog on 05.10.12 at 12:06 am

#39 Al

QE and fiscal stimulus are totally different. QE provides liquidity, lifting stocks, accommodating more borrowing, ect; but it fails to create jobs and boost wages. Fiscal stimulus is more direct spending (like Canada’s Action Plan), where funds are used for building infrastructure, hiring workers, ect.

Remember we haven’t gained any jobs—all we did was keep the ones we had at the cost of nearly $180 billion in bailouts and stimulus money. http://i45.tinypic.com/vfxs8z.png Alas, this Friday is payback time for employment numbers as the last 82.3K figures was nothing more then early job hiring, due to warm weather.

BTW, another $180 billion stimulus or bailout and our debt-to-GDP goes over 100%, the death spiral.

#52 furst on 05.10.12 at 12:22 am

FFFFUUUUURRRSSTT!!!!

#53 Renting In The GTA on 05.10.12 at 12:23 am

You know we are screwed when developers have countdown clocks on their websites for new releases…

http://paradisehomescorp.com/pages/projects/unionville/index.html

Oh ya and the cheapest and smallest detached 34′ wide lot starts at $660’s…

Yup screwed…

#54 furst on 05.10.12 at 12:26 am

Garth called me today to say how cool I am. Bet he didn’t call you…

#55 TRT on 05.10.12 at 12:39 am

No big drop in Van and Toronto.

1) CMHC is doing fine and the limit will never be hit. In fact, $567 billion at year end 2011. Forecast $557 at year end 2012.

2) Immigration will continue at current pace. Believe whatever numbers you want.

3) Household unit formation continues to exceed housing starts by a significant margin. Hence why basement suites are full.

4) Interest rates will only rise marginally if at all. Australia’s rates rose astronomically compared to what G forecasts here…and look at their prices still.

IMO, what this blog has never discussed is the reason behind high RE prices in Van and Tor; but that would suck the emotions out of this blog.

#56 Nostradamus Le Mad Vlad on 05.10.12 at 12:46 am


“. . . clear evidence of a bubble is lacking. . . bankers and economists in Toronto this week concluded there’s no real estate bubble.” — Economists also said Nortel wasn’t in a bubble, and Bre-X was on the verge of a massive gold discovery. So much for xpurts.

“So, see? It’s okay. HGTV horny granititus. Nope. It’s rhetoric.” — Does the term ‘horny granititus’ indicate there is another sexual revolution in the making? Just asking!

“Obviously, you are with the realtors, or with the terrorists. Deadly force awaits.” — OMG! dubya rebirthed!

Time for some tapioca pudding with toffee ice cream and cashews. Way better than finance stuff!
*
#12 X — “Yep…our household debt levels are higher than the Americans ever were . . .”
— and —
#16 Smoking Man — “Going with Throttle Up” is Trader Speak for disaster about to happen.” — Good chart on your blog. Hard landing shortly?
— and —
#18 northerner — “Cheers and have a loverly depression” — Somehow, all these posts have a common link.
*
Oil Prices Down? Disney profits up; Retirement Bubble; Spend A Penny; France and Germany on collision course, and Apple or Europe Crumble? Canada’s secret pension plan? The Great Fall of China They’re sneaky — don’t discount them, and China Not buying Euro debt; 34:52 clip The game board is tipping; 24:42 clip Debt, inflation and austerity; Demographics; Fee-Only Planners; Catastrophic? Umm, no; EU credit markets; David Cameron Austerity backlash; Banxter’s Bonuses Cut in half; Paris Most expensive city for a sandwich; Gas war in UK.

Freak Show; Spain, Greece and others exiting the EU? Cisco Tech slowdown? JC Penney o more commission; US$700 mln. is printed each day, but he has a good idea; US$500K unsolicited offer; Freefall Chart.
*
0:35 clip Surfer rides largest-known wave; Smoking Man — Education Chinese vs. Western; Coalition Not working well; 3:06 clip Nigel Farage (Brit. MP) talks about mass civil unrest; 1:47 clip Solar flares and other thingies; CIA – Mossad Manufacture terror, such as this; Cloaking Device US Navy wants it; Microsoft Reinventing the wheel; Men Drivers Reality check (the pic is a giveaway); Engelbert Humperdinck Yes, he’s still alive and crooning away; New executive jet Nice if you can afford it; Forthcoming Plague?

#57 TRT on 05.10.12 at 12:46 am

Regarding DA;

Its apparent that he comes on here to vent his anger.

Something isn’t ‘right’ in his life.

Surprised people don’t see beyond that. His comments are NOT about pumping up the market…he may be in the same position as most blog dogs.

#58 Freedom First on 05.10.12 at 12:58 am

Tone down the Rhetoric? Does that include Mr. C and Mr. F? Have those 2 men been bad, warning Canadians about their high debt levels the last couple of years? Be interesting to hear what Mr. C and Mr. F have to say about all of this.

Something that comes to my mind along the lines of what someone said a few years ago: “I think if we were going to have a “Housing Crash”, we would have had it by now:) ………

Now Garth, and the rest of the “Blog Dogs”……You just don’t understand:) …….ps….Mr. Nixon, am I allowed to say this?

#59 Herf on 05.10.12 at 1:06 am

#6

With what do slovenly snakes use to “bait” their breath?
Mice (dead or alive?)? Sardines?

#60 Taipan on 05.10.12 at 1:12 am

Im surprised Garth you havent given a framework of how blog dogs can work out for themselves the difference between price and value.

What is price? What is value?

Price is what happens every day. Value is when an asset reflects underlying future value.

With real estate its the market prices of real estate in the past before this bubble kicked in. Around 2005/2006.

There are micro markets right across Canada and within provinces.

A bubble is just that.

It starts in the centre and expands outwards and upwards in price from the centre. Regional areas are the last to get the bubble and the first to fail as the bubble contracts.

As you have shown on this pathetic but highly entertaining blog, many regional areas are already hurting.

So how do individual blog dogs determine what really is value for them? Many dont care about those most entertaining centres like Vancouver or Toronto (but im a glutton for mass stupidity!)

They need to search their particular area, that they are interested in.

Identify the time before the bubble took off and then collect as many “normal sales” for comparison purposes as they can from that time frame.

When prices return to those levels they know they have some basis of value.

It doesnt mean prices wont fall further, but at least you wont be paying bubble prices.

Just some advice from a property valuer!

BTW just notice the make up of your CHMC board. Surely a case of the fox in charge of the battery hen shed! OMG talk about a conflict of interest! No wonder your screwed!

#61 BigAl (Original) on 05.10.12 at 1:18 am

Found another annoying real estate flyer stuck through the weatherstripping of my front door. (New neighbourhood in Milton…we’re inundated daily with these). This guy promises he’ll get you a mortgage with:
-No income
-No credit
-No down payment
-5% cash back

It even says this on his website:
http://shahid.ca/homebuying.html

#62 Loz on 05.10.12 at 1:32 am

Garth:

Can you have a vote up/down system for comments i your blog? Like in the website: http://vancouvercondo.info/2012/05/cmhc-gets-a-bit-weird.html#comments

It would make reading the comments sections more interesting and have a healthier for of debate – translating to more readers and money for you!

Cheers from the left coast.

#63 Van guy on 05.10.12 at 1:44 am

#33 Eagle eyes on 05.09.12 at 10:42 pm

You are getting too excited. Richmond attached properties is sitting at 10 moi. And it’s effin Spring!!! Come fall time, it’s gonna be bad. Come 2013, it ain’t good. Average price is already down for Richmond and Vancouver. And yes, the prices are coming down in the higher end and condos. This happened in 2008. The rest, slighter drop but nothing now to save the market. The Eurozone keeps fuckin their own butts they don’t even know what to do. It affects us too!!! Canada will have its turn on the front page of international newspapers. We are screwed. Have a nice day :)

#64 Dividend Yield Investor on 05.10.12 at 2:10 am

Garth,

Let’s keep this simple.

What is the big number – from peak to bottom?

For the average of all homes in Canada.
Vancouver and GTA.

Best Regards
Dividend Man

#65 Aaron - Melbourne on 05.10.12 at 2:15 am

PRICELESS! well no actually.

http://theage.domain.com.au/court-knocks-out-illusory-1000-home-sale-20120510-1ye7a.html

The Sherriff sold this home for a $1000. Court over-ruled and set aside the sale.

Of course the interesting thing is that this occurred in Australia and not sub-prime USA.

#66 jay on 05.10.12 at 2:23 am

Down the street, overlooking a pretty Victoria bay, a house went on the market. It was a nice house, a bit dated, but a decent size on the brow of a hill. It was listed for 850K. It sold in less than 2 weeks.

The listing agent has a few other houses around here but they are all over 1m and they have just sat.

Whether the value was right or not in some sort of cosmic sense, the fact was the house was listed at a genuinely attractive and realistic price. Even in a down market that matters.

#67 Debtfree on 05.10.12 at 2:24 am

Just a little off topic but you must be laughing your head off Garth . Gwyn Morgan . You know h s mentor is up to his eyeballs in it . Now a 1.5 billion dollar class action law suit . I wonder if h can keep from getting any of that on him . And how about Elmer’s kids new pamflet . Shaking hands with the devil. Did you ever watch “yes minister” I don’t think h did. You can piss off the voters all you want but you can’t piss off the ………..service . Can you now.

#68 Aaron - Melbourne on 05.10.12 at 2:30 am

Rhetoric from Oz

http://www.theage.com.au/money/borrowing/extra-payments-a-winner-20120508-1y9lh.html

The chief executive of Westpac, Gail Kelly, was asked about the impact of falling house prices on loan security when she presented the bank’s March half-year results last week. Kelly said the bank was keeping an eye on valuation movements, especially in Queensland and centres along the east coast.

The executive director of banking and financial services at the Macquarie Group, Frank Ganis, says: ”A lender has to be mindful of what is going on in the property market. You always have to look at the possibility that you may have to sell the security to recover the loan.

”A 4 per cent fall in house prices does not lead to a significant change in lending practices. What drives the performance of a mortgage is the capacity to repay.

”But we are paying attention to housing market movements. We are making sure the borrower’s ability to service the loan is strong, that the loan size is right and that the house being purchased is in the right area.”
*********************************

Very much in line with my recent comments. The banks have had a major drop in mortgage issuance. A bank’s business is selling money. They need to keep lending (selling and creating $$$) in order to maintain the value of the underlying asset values backing the loan book. If they turn off the credit tap to a trickle they will drive the crash into overdrive. Their tightrope is determining the right balance of prudence in lending versus fuelling enough cheap money out the door to maintain profits and not having to contemplate the likely scenrio that the security backing the loan has fallen in value as a consequence.

#69 Tony on 05.10.12 at 2:53 am

Hamilton has a few nice bars but it ends there. The city still stinks of steel stench. It’s really a city in the middle of nowhere and the good news is it likely will fall less percentage wise in price than the greater Toronto area.

#70 Tony on 05.10.12 at 3:07 am

Re: #33 Eagle eyes on 05.09.12 at 10:42 pm

Wait at the very minimum another 4 years. The likely scenario is the Canadian taxpayers will be on the hook for anywhere between 500 billion to a trillion dollars in mortgage defaults and personal bankruptcies.

#71 Tony on 05.10.12 at 3:29 am

Re: #18 northerner on 05.09.12 at 9:57 pm

• Tony Says: Your comment is awaiting moderation.
May 10th, 2012 at 4:57 pm
I can tell you exactly what caused the housing crash in Australia. Someone had this fictitious idea of a worldwide recovery in their head and jacked up interest rates prematurely for no reason whatsoever. This is the sole reason for the housing crash artificially high interest rates compared to other major cities around the world.

#72 John on 05.10.12 at 3:47 am

Whisperer has a contest to guess the day Vancouver inventory tops 20,000.

http://whispersfromtheedgeoftherainforest.blogspot.ca/2012/05/countdown-to-20000-whats-your.html

#73 John Bennett on 05.10.12 at 3:58 am

Garth,

Long time lurker, first time commenter. Great blog: Sorry, but it’s true.

I find myself compelled to defend the undefensible: Hamilton. I’ve lived in the outskirts for the last ten years, and although there are parts of town that can be described as post-industrial wasteland, especially the north end near Stelco, there are far many more parts of town that are beautiful, walkable, and full of interesting historical properties.

In addition to cheap real estate, there’s easy access to beautiful trails and conservation areas just outside of town, great cycling areas in the country, a smattering of good restaurants and a safe inner city. Yes, right downtown needs a bit of work, but with the influx of a huge amount of federal infrastructure dollars over the last few years, even that is showing evidence of a turn-around.

I would easily pick Hamilton over Toronto, Mississauga (now that’s a wasteland), Burlington (endless suburbs), Milton or any number of other mediocre areas in southern Ontario.

And unlike the GTA, you don’t have to “dress to impress” when you go out grocery shopping: Track suits have been suitable atire for both men and women downtown since the 1970’s!

#74 Linda Pearson on 05.10.12 at 4:03 am

#27golem on 05.09.12 at 10:31 pm
45north on 05.09.12 at 9:36 pm

Can’t resist…I think the correct phrase is “bated breath” in the sense of holding one’s breath.

#75 Can it be? on 05.10.12 at 4:05 am

Tell people in mineola, Lorne park, oakville who have lowered their asking prices a few times and the houses are still sitting on the market… Yup no crash in sight. It’s more then obvious that prices are coming down, particularly in the higher end homes. Even custom builds will lose money at this point as they are listed so that after fees they would be lucky to break even. I see the last desperate sellers trying to get out now. School years almost over, everyone is listing… I agree with previous posters… Start stink bidding these listing… Drive the market down. The banks and the realtors can say what they want, but it’s painfully obvious to those of us that have been monitoring what’s really going on. Maybe the neighborhoods I watch are unique… But it’s good for me, I enjoy watching the prices fall in these pockets… It’s just a matter of time now :)

#76 Can it be? on 05.10.12 at 4:12 am

One thing I’ve learned, to be really good at sales, you have to know as little about the details as possible… You just need to appeal to people’s emotions. This is why certain realtors who you wonder how they could possibly do well persevere. I personally enjoy watching the realtors today actually work a little harder for their money. Survival of the fittest. There are some great agents that have been around for a long time. It’s the ones that are trying to pull the wool over your eyes… Lying to you that drive me nuts. Good luck to them. Let’s watch how it unfolds and who’s left when the dust settles.

#77 ORIGINAL N.GOAT on 05.10.12 at 4:41 am

By the way Garth.You ain’t
nothing but a blog dog,just blogging all the time.You ain’t never caught a crash and you ain’t no friend of mine.When they said you was high classed, well that was just a lie.You ain’t never caught a crash and you ain’t no friend of mine. INSPIRED BY THE DESIGNER DOGGS!

#78 John on 05.10.12 at 6:38 am

Northerner wrote:

“http://www.whocrashedtheeconomy.com/blog/2012/05/housing-busts-preceded-by-high-leverage-more-severe-and-protracted-imf/
The site also gives, in laymen s terms, a good description of the current economic situation in Australia (just swap the word “Australia” for “Canada”) and how it developed if you click around
Cheers and have a loverly depression.”
——————-

Could it be? Will the focus shift to reality and away from irrelevant terms like “Canada” and “Australia”?

Nah…let’s talk about Australia’s finance minister or the current central bankster. Don’t know their names? What percentage could remember the name of their head of state. Extra points for listing 2 important things he’s “done” in this important economy.

That’s how Goldman Sachs et al Network sees Canada. Imagine what they think of Canadians. Absolutely nothing. Just an opportunity. Who is Mark Carney? What does his presence mean?

I sure hope Crocodlie Dundee got out and has his money tucked away in the rest of the ponzi, run by GS et al Network.

The denial associated with not discussing seriously the big picture is far superior to the denial found in the minds of greater fools purchasing real estate at the top of the market. They aren’t aware of the information available.

Quite amazing mate.

#79 The real Kip on 05.10.12 at 7:07 am

I’m surprised you didn’t tell them all to move to Detroit, you can buy houses there for the back taxes now.

#80 yorel on 05.10.12 at 7:28 am

#22
“So don’t expect your home to appreciate in value…enjoy it for what it is…a home.”
This person should seek professional help.

#81 Ralph Cramdown on 05.10.12 at 7:42 am

Any thoughts on seeing balloons

Mylar, helium filled: Great listing agent with TONS of marketing talent

Helium filled: Probably just a run-of-the-mill agent from the “Above the Crowd” balloon-a-gram franchise

Air filled: That’s what happens when you negotiate the listing agent’s percentage down

Flaccid: Primed for next week’s “New Price!” sign.

#82 down and out on 05.10.12 at 7:44 am

I know of two examples now of people taking less than they owe to get out of this condo complex because of job or family relocating.I now see a price drop between neighboring sellers of units for a sale. All this in Windsor which I thought finally hit bottom.I believe condo sales are the canary in the mine; sort of a warning for the spring market for housing sales .I feel like a lost sheep watching the flock head over a cliff and thinking why.

#83 maxx on 05.10.12 at 7:58 am

“Frankly, I’d like to see the rhetoric come down a little bit.”

Well, that’s just too damn bad Gordie, because it is what it is…..a huge fiscal mess, from the level of hugely profitable debtload of Canadians to the systemic risk to the economy at large.
You, sir, are in zero position to tell the public what to think or say….however influential you may be as an industry interface.

#84 Steve Thompson on 05.10.12 at 7:58 am

Here’s an interesting article from yesterday’s NP showing how some of Canada’s leading minds are apparently spending most of their thinking time in another reality:

http://business.financialpost.com/2012/05/09/rbcs-gordon-nixon-weighs-in-on-housing-bubble-furor/

Of course Mr. Nixon wants to deny that there is a housing bubble – his bank (and his bonus) depend on our continued foolish indentured indebtedness.

#85 Kiron on 05.10.12 at 8:05 am

Jimmy,

Not all areas near downtown Kitchener are safe. If you choose to buy there, first check out the area. One way to do this is to go to a local variety store and ask the owner about the neighbourhood. Also learn about what schools your children would go to and find out about those. There can be quite a difference between schools across the city.

#86 Victor on 05.10.12 at 8:08 am

Buying a home with just 5% down? Make sure you love it

Thursday, May. 10, 2012

This hypothetical chart below shows what might happen if you bought a $300,000 house with 5 per cent down and a 30-year amortization. (The average purchase price for a first-time buyer is about $295,000, according to national figures from mortgage insurer Genworth Financial Canada.)

This chart assumes a 15 per cent drop in home value over three years and flat prices for another six or more years. (It also assumes you make no mortgage prepayments, pay a 2.95 per cent default insurance premium – as required by law, and incur roughly 6.5 per cent in liquidation costs, which include realtor fees, legal fees and disbursements, mortgage discharge fees and penalties, repairs and staging, etc.)

In this hypothetical scenario, if you wanted to sell your house after five years you’d owe at least $16,500 more on your mortgage than you could get from the sale.

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-buying/buying-a-home-with-just-5-down-make-sure-you-love-it/article2425135/

#87 tiny bottoms on 05.10.12 at 8:11 am

In many real-world situations, there is conflicting evidence from different studies. So, it is important to make judgments about which evidence is strongest. But, these results suggest that people are biased to interpret the evidence in ways that are consistent with their desires. That means that people may ultimately come to believe that the weight of evidence supports the position that they already wanted to believe was true. And they will believe this without recognizing that their own desires influenced the evaluation of the evidence

#88 CTO on 05.10.12 at 8:22 am

# 13 Mr Buyer

Oh Mr Buyer – STOP THE RHETORIC!
Oh Mr Finance Minister- STOP THE RHETORIC!
Oh Mr Central Banker- STOP THE RHETORIC!
Oh IMF- STOP THE RHETORIC!
Oh Peter Schiff circa 2006- STOP THE RHETORIC!
Oh Thomas Andrews (Titanic)- STOP THE RHETORIC!

Garth – STOP YELLING. — Garth

#89 arctodus on 05.10.12 at 8:28 am

The grinding collapse of civilization is unrelenting and unstoppable. American house prices are continuing down and will not stop en masse until they are priced in potatoes or perhaps slaves.

This trend will occur throughout the developed world.

Housing is a symptom of what has occurred..but not the cause.

The rise of the totalitarian police state in America (and Canada now as well) is also a symptom of this.

Energy availability has peaked and is now in hard decline. Nothing else really matters in the overall analysis….all else is window dressing and rhetoric.

We will now see a return to medieval norms with 1% of the population having great wealth and 99% having nothing….and as the populations of human monkeys begin the collapse as food production falters…we will see the effective implosion of society at large.

But as we human are not trained to see the world as it really is, but rather as “mother culture” tells us it is

(you know the BS that men have any rights in family law in Canada, the BS that the government is there to help the less fortunate, the BS that working hard will allow you to get ahead, the BS that religion is more than political-social posturing of deluded monkeys who are afraid of their own mortality…the list is quite a long one)

because of our collective stupidity…we will argue over minutiae as our children starve out and as our society itself implodes….

nothing new under the earth’s yellow sun…..

…and there will be no history books (let alone kindles and holographic memory systems) to record the end….just the pounding of sticks on hollow logs and the sound of wind in the grass overgrowing the sidewalks of our futures.

Please do continue with your squabbling over sheet rock and shingle pricing.

#90 Kevin on 05.10.12 at 8:31 am

@45North:

Really? You’re nitpicking the Chinese guy’s English grammar?

How’s your Mandarin? That’s what I thought.

#91 ANONYMOUS on 05.10.12 at 8:43 am

This is a description of the US housing bubble, but when you read it you can see how Canada fits in nicely with that description:

( “At the core of the folly was the almost universal belief that the value of houses was certain to increase over time and that any dips would be inconsequential. The acceptance of this premise justified almost any price and practice in housing transactions.” ——
——
“The same logic explains why so many households, including those with low wealth, played the game. Given the belief in eternal appreciation of house prices, you would have been crazy not to take out a 2/28 ARM with no money down, and maybe a little cash back at closing! “)

http://www.washingtonpost.com/opinions/the-folly-of-the-us-housing-bubble/2012/05/07/gIQA6sIw8T_story.html?source=Patrick.net&hpid=z2

#92 DA's better half on 05.10.12 at 9:07 am

Got news for you hun. Those slinky dresses aren’t only for your benefit. You keep working and the winnings pot is growning bigger. Then blammo I’ll take half and head to Florida. Time to ditch this one horse town.

#93 disciple on 05.10.12 at 9:09 am

Bottoms Up and DML… Perhaps you missed it, but Peter Schiff is a character played by Paul Reubens (pee wee Herman).

The reason he knew about the impending Great Financial Crisis is because his associates/employers were in on it. This is yet another classic example of mind control via the use of controlled opposition. Like adding a pinch of salt to sweet apple pie… it’s the contrast in flavour that makes the final outcome better.

We are not dealing with idiots here. Your real rulers are sharper than you could scarcely imagine. They know you better than you know them. Let’s change that. Start by Googling: “Peter Schiff Anne Frank fraud” (you can highlight this phrase right here and right-click and search google that way really quickly). Tinyurl here:
http://tinyurl.com/7slfxp6

If you care to, and your heart is good, you will eventually find out that the diary of Anne Frank is fraudulent, and so are the characters of Peter Schiff, Alex Jones, and Max Keiser… – disciple out…

#94 kelownaboy on 05.10.12 at 9:18 am

“Banker Helmut Pastrick told reporters the housing market is “not skyrocketing away from us. Nor is it likely to fall into the tank either”. And the CEO of the Royal Bank Gord Nixon, has just uttered this: “When we look at the overall marketplace, there might be pockets of vulnerability but we remain quite comfortable. Frankly, I’d like to see the rhetoric come down a little bit”
And remember Sherry Cooper “It’s not a bubble, it’s a balloon. Unlike the catastrophic decline the U.S. housing market experienced in 2008, Canada’s housing market is expected to deflate slowly rather than pop. While bubbles ALWAYS burst, a balloon often deflates slowly in the absence of a pin”.
But then think again, even the balloon after it deflates slowly it always falls to the ground with the thump. Unless of course the laws of physics don’t apply in Canada(differenthere!) Watch the road – bumps ahead.

#95 Keith in Calgary on 05.10.12 at 9:27 am

Your female reader/writer says “I have wanted a house forever”……

Before the backlash from the fem-nazis says it’s not “hormones or nesting” which is making women want to buy a home…..etc…….consider the new TV show from the purveyors of B-grade house porn, your friends at HGTV……

http://www.hgtv.ca/buyherself/

It is entitled “BUY YOURSELF” and exclusively features Sandra Rinomato’s breasts and single women buying a home on their own……because men are the last likely to go and do that, as realtor’s figured out decades ago when they were trained to separate the couple in the showhome and hammer on the woman. Making the man’s life at home miserable until he capitulates.

#96 Throwstone on 05.10.12 at 9:43 am

WOW!

Just finished the book PENSION PONZI.-Bill Tufts & Lee Fairbanks…

The light show is going to be fantastic!!

Gen X and Y are screwed!!

Can’t believe how badly underfunded they are, combine that with a real estate melt down and were totally SCREWED!…

http://www.amazon.ca/Pension-Ponzi-Bankrupting-Education-Retirement/dp/1118098730

http://business.financialpost.com/2011/10/29/the-pension-ponzi-scheme/

Imagine what Canada is going to look like in 10 years?

Its troubling to think of it…

All levels of government in debt!
All Pensions are underfunded in Canada!
Real estate meltdown, (exaserbated by the lack of retirement money)…

Yep I say this country is no greece, ireland or spain……..just give it time, say about 5-10 years?

#97 Dean on 05.10.12 at 9:50 am

There is no bubble. Kind of like there isn’t going to be a recession.

#98 Throwstone on 05.10.12 at 9:54 am

Oh yeah…

Put in offers! Start low balling…

Low ball, low ball, low ball.

Aim for somewhere around the knee caps! Like 50% of the asking price.

Who cares if they look at it and throw the paper in the trash!

They will get the point.

#99 Throwstone on 05.10.12 at 9:59 am

Hamilton is great by the way!

Its got some issues but overall what city does’nt!

real estate is still fairly priced and you drive an hour to toronto or an hour to long point or an hour to the border.

the city will turn around…Its going High tech soon enough.

#100 Kris on 05.10.12 at 10:03 am

Garth, in response to doomers-&-gloomers, you’ve said a few times that Greek debt (and Eurozone’s woes in general) are more bark than bite; that the Europeans have patched and contained the problem.

Sure, the world isn’t gonna end, but last week’s Greek elections showed the issue is far from a done deal. There’s now a real chance Greece may leave the Eurozone (voluntarily or otherwise) – An outcome often dismissed as hogwash on this blog.

#101 Tom from Mississauga on 05.10.12 at 10:04 am

I know you’ve stuck up for RBC in the past Garth, I guess you’re a shareholder. The Home Affordability Index was agitating. But clearly after the ‘rhetoric’ comment and ‘it’s on!!!’

#102 Mr Buyer on 05.10.12 at 10:10 am

#43 Mr Seller on 05.09.12 at 11:49 pm
#37 Mr Buyer

Relax. You are getting too uptight. Loosen your belt a little!
……………………………………………………………………..
Actually I am doing pretty well on the relaxation front, but thanks for the heads up all the same

#103 helpful on 05.10.12 at 10:12 am

I wanted to buy a property 4 years ago. I did not buy because I started reading this blog and his predictions. Since then, same property has increased 40% its value. So a 15% drop in value, I would still be way ahead of the game……damn it, sometimes you have close your ears and eyes and have balls and jump into it…..no crash folks, just frozen prices, I feel your pain, I was priceout as well waiting and waiting and waiting……..

I almost felt sorry for you until I realized you like to post here under various names, making dumb accusations. Man there are a lot of realtors migrating here lately. — Garth

#104 truth hammer on 05.10.12 at 10:34 am

good article on Chinese ghost cities

http://www.topsecretwriters.com/2012/05/creepy-china-ghost-cities-you-never-want-to-visit/

#105 truth hammer on 05.10.12 at 10:41 am

Canada tops in money laundering from China show Aussie police sting

http://www.smh.com.au/national/homing-in-on-the-narco-dollars-20120323-1vp5y.html

leading to question why the RCMP is playing dumb on the file? dope money for immigrants OK in political circles maybe?

#106 steev on 05.10.12 at 10:45 am

#55 TRT on 05.10.12 at 12:39 am

No big drop in Van and Toronto.

1) CMHC is doing fine and the limit will never be hit. In fact, $567 billion at year end 2011. Forecast $557 at year end 2012.

Steev: So after nine years of dishing out mortgage insurance at a break neck pace since (regional caps removed in 2003), CMHC will reign in that practise to realize a hard stop at $557 Billion instead of its $600 Billion cap? How prudent. No headwinds for real estate prices there…

2) Immigration will continue at current pace. Believe whatever numbers you want.

Steev: Agreed, but inconsequential unless considered against housing starts…see 3.

3) Household unit formation continues to exceed housing starts by a significant margin. Hence why basement suites are full.

Steev: Source?
From 2000-2010 the GTA’s population grew by 1,079,003, housing starts were 420,719 or one new residence for every 2.56 people. Roughly one new residence per family. No shortage of land there. In Vancouver, where prices rose much faster than in TO, that ratio is only 2.24 over the same period. The opposite would be true if we had a market dictated by supply and demand as you are suggesting.

4) Interest rates will only rise marginally if at all. Australia’s rates rose astronomically compared to what G forecasts here…and look at their prices still.

Steev: Interest rates don’t need to rise for a society to experience debt fatigue. I’m guessing this is one of the main reasons Garth is predicting 15% followed by slow melt rather than US style crash. No pin required.

IMO, what this blog has never discussed is the reason behind high RE prices in Van and Tor; but that would suck the emotions out of this blog.

Steev: Have you read this blog before? Whether or not inflated RE prices are sustainable make up 95% of the discussion here (the other 5% is wisely dedicated to Harleys and Amazons). It’s funny you should mention emotion…it’s half the reason prices aren’t sustainable, the other half being cheap credit.

Care to try again?

#107 cramar on 05.10.12 at 10:59 am

Jimmy,

Have to support what Garth says about K-W with one minor exception. As Garth said, DO NOT buy a condo in K-W. It makes no financial sense. I looked at a new hi-rise complex in Kitchener near me and for a 800 sq foot 1-bedroom, they were asking almost as much as my house is worth. Besides condo fees, the property tax was as much I pay with a detached house and 135ft lot! Where is the logic in that? Two and three BR condos are much more! One thing to note: property taxes are lower in Kitchener than in Waterloo.

Where I disagree with Garth (understandable since he doesn’t live here and I do) is in the $260k downtown Kitchener condo. Save the condo fee, and for this price look a km west for a detached house. The neighbouhood is better, and you can walk around in the evenings. Downtown is DEAD at night and crime is real. Just near me a brick bungalow sold in days and was listed around $240k. It is walking distance from downtown. If you find something act fast! A lot of people are catching on and under $300k detached houses are selling like hotcakes! Even if RIM collapses, you are better off with the detached than a townhouse.

#108 cramar on 05.10.12 at 11:00 am

Edit: Meant “downtown Kitchener townhouse” not condo.

#109 bill on 05.10.12 at 11:04 am

”I think the correct phrase is “bated breath” in the sense of holding one’s breath.”
unless you are trapping mice in your mouth…..peanut butter is a good bait.

#110 vangrrl on 05.10.12 at 11:13 am

Keith;
You lost me at femnazi- I think u meant ‘the women with opinions’… I’ll skip your link because it sounds idiotic. Turn off the tv, get outside and find a real woman to talk to. She’ll be hiking trails rather than shopping for granite countertop. Have a great day!

#111 GregW, Oakville on 05.10.12 at 11:13 am

Hi #269 Nostra, Re: your last link.

Have you heard about this issue? (See link)

“U.S. Senator sounds alarm about ‘precarious’ Fukushima situation, warns of imminent release of radiation”
http://www.naturalnews.com/035813_Ron_Wyden_Fukushima_radiation.html

Why can’t the global army’s heavy lift helicopters be used to relocate the speant fuel to a stable storage location? Who do we can to get this or another solution implicated today, not tomorrow, it might be to late!

(If the SNC new nuclear division goes on strike, maybe the UN can hire them to help Japan get the job done before we have an even more dangerous radiation release with fallout landing on all of us!)

#112 Cy on 05.10.12 at 11:23 am

I was just in Victoria had a conversation with a family friend who owns three houses. I made the comment that the real estate market was looking like a bust and his defense, you guess it, “it’s different here”.

This is gonna be ugly.

#113 Buy Curious on 05.10.12 at 11:26 am

My friend is moving to the States in 6 months and is wondering if he should sell now or in September? I told him to wait but another friend said to sell now. I asked the guy why and he stated all these points that are puked up on this nerd hangout of blog. I said if you’re making financial decisions on what back water Canadians think, you might as well as move to Barrie and open up a burger van on the side of road.

#114 Corban on 05.10.12 at 11:30 am

#87 tiny bottoms on 05.10.12 at 8:11 am

It’s called confirmation bias

#115 bill on 05.10.12 at 11:37 am

for those who would doubt this old mouse catching technique….

Edmund: [calls] Baldrick!

[Baldrick enters, wearing an apparatus on his head which is dangling
a piece of cheese from the end of his nose. Edmund begins to speak
about something, then notices.]

Edmund: [calmly] Why have you got a piece of cheese tied to the end
of your nose?

Baldrick: To catch mice, My Lord. I lie on the floor with my mouth open
and hope they scurry in.

Edmund: …and do they?

Baldrick: Not yet, My Lord.

Edmund: Well, I’m not surprised — your breath comes straight from Satan’s
bottom, Baldrick. The only sort of mouse you’re going to catch is
one without a nose.

Baldrick: That’s a pity, because the nose is the best bit on a mouse.

#116 Tom from Mississauga on 05.10.12 at 11:54 am

BTW the way I’ve been asking you to supply us dawgs with a couple American REIT’s to take advantage of the eventual upturn in the market. Took the bull by of horns and found ticker KBWY myself. US REIT ETF provided by Powershares, 6.3% yield while I wait. Nice, eh? That’s double my mortgage rate!!!

#117 JAGHamilton on 05.10.12 at 11:59 am

Live in Hamilton. Yes there are some cool areas but none where you can buy a home for 150k. A house on my street (in a cool area) just sold for $450,000. Must have been from Toronto. Same house 10 years ago would have been about 175K. Stupidity has not bypassed hamilton.

#118 Canadian Watchdog on 05.10.12 at 12:05 pm

He’s back.

Brad J. Lamb debunks the argument that Toronto’s condo supply is unsustainable http://blog.buzzbuzzhome.com/2012/05/brad-lamb-toronto-condo-supply.html

#119 getreal-tor on 05.10.12 at 12:05 pm

#61 BigAl (Original) on 05.10.12 at 1:18 am

How can you fault Mr Shahid who is a graduating student of the school of Terry Paranych (Super Start Agent) who has been slapped with multiple administrative penalties by RECA

http://www.reca.ca/consumers/content/complaints-discipline/PDF-Discipline/administrative-penalties/Paranych-11-12-13-Admin.pdf

Organized crime is more transparent than the real estate agents. At least the organized crime goons don’t pretend to be your friend or have your best interest at heart like RE agents.

#120 Einzatgruppen kanada on 05.10.12 at 12:10 pm

Rhetorical history:

The RE bubble today is yet more proof why Canada would be better off if it had lost 1812. NO BORDER and east/west separatists treasoned by Congress.

#121 Canadian Watchdog on 05.10.12 at 12:18 pm

Video Interview: Brad Lamb fully refutes mass condo inventory, says “this is exactly what we want.” http://watch.ctv.ca/news/national-affairs/may-8/#clip675018

#122 };-) aka DA on 05.10.12 at 12:29 pm

DELETED

#123 KingBubbles on 05.10.12 at 12:46 pm

Winnipeg among leaders in new house prices:

http://www.cbc.ca/news/canada/manitoba/story/2012/05/10/mb-house-prices-winnipeg.html

It must be different in the slurpee capital :-)

#124 expat_engineer on 05.10.12 at 1:19 pm

#51 Canadian Watchdog

” QE and fiscal stimulus are totally different. QE provides liquidity, lifting stocks, accommodating more borrowing, ect; but it fails to create jobs and boost wages. ”

It creates jobs because more borrowing means more economic activity. Its estimated that 1/4 of the world output is caused by Central Banks programs.

Remember money is borrowing in our system of fractional reserve lending. So more borrowing creates more output.

#125 Keith on 05.10.12 at 1:40 pm

Sticking with the prediction: a 15% average price drop nationally, twice that in Van, less in 416, then years of languid torpor. — Garth

Curious what your predictions are for some of the other big markets: Calgary, Ottawa, Montreal, Halifax….

#126 zeeman1 on 05.10.12 at 1:44 pm

#93 Disciple.

Your “research” seems to discount the well known facts of genetic similarities common in all ethnic groups/races etc that carry down through the millennia.

Reubens and Schiff come from a small population Jewish background that allowed few outsiders for millennia and it’s extremely likely they would share similar facial traits, etc.

Ever been to Somalia or rural Germany or Britain?

Lots of obvious genetic similarities everywhere you go.

Only in the last 1-2 centuries have we seen people breeding with others outside their hundred mile radius.
Jeez, most royal families are half insane due to breeding with their cousins until the present generation.

I still like you, buddy.

#127 disciple on 05.10.12 at 1:49 pm

#116… Tom, would the 15% witholding tax apply in your situation? Is it invested in a TFSA?

#128 How do you feel now Garth? on 05.10.12 at 1:59 pm

PROFESSIONAL OPINION

http://www.moneyville.ca/article/1175563–housing-bubble-talk-dismissed-amid-toronto-condo-craze

“The big question people ask is, is Canada’s housing market in a bubble. Our answer to that is no,” said Jim Murphy, chief executive officer of the Canadian Association of Accredited Mortgage Professionals. The association’s research suggests growth in mortgage credit is below average, he said.

Gee, that’s a shock. — Garth

#129 Canadian Watchdog on 05.10.12 at 2:35 pm

#125 expat_engineer

I’m not sure what you mean by ‘money is borrowing’ and ‘borrowing creates more output’.

Borrowing is debt and real productivity output is declining.

#130 disciple on 05.10.12 at 2:39 pm

#126 zeeman1… Good point. And I agree with you. It’s one of the first things I considered. And there was also the possibility that they are family related. Science proceeds via elimination of possibilities, but where the evidence is lacking and deductive logic may not be possible, we can only present our theories insofar as they match the known facts. In most cases this is inductive logic. Like how I know the sun will rise tomorrow not having any evidence but empirical.

This is just a drop in the ocean of evidence I presented. There are too many coincidences spanning not only Schiff, but also Keiser, Jones, Celente, Chossudovsky, Freeman, Zuckerberg, and the list goes on and on. Just a handful of families with enormous talent (Lady Gaga and Jennifer Greenberg Sexton play many roles) can sway the minds of the public so acutely. This is not a game to me.

#131 TRT on 05.10.12 at 2:54 pm

#107 Steeve —-> do your hw!

No big drop in Van and Toronto.

1) CMHC is doing fine and the limit will never be hit. In fact, $567 billion at year end 2011. Forecast $557 at year end 2012.

Steev: So after nine years of dishing out mortgage insurance at a break neck pace since (regional caps removed in 2003), CMHC will reign in that practise to realize a hard stop at $557 Billion instead of its $600 Billion cap? How prudent. No headwinds for real estate prices there…

———> There will be no hard stop. $60 billion in mortgages to be paid off in 2012 and similar numbers in years ahead. So you are dead wrong. Learn to do a proper analysis.

2) Immigration will continue at current pace. Believe whatever numbers you want.

Steev: Agreed, but inconsequential unless considered against housing starts…see 3.

———> not inconsequential…. It equates to demand.

3) Household unit formation continues to exceed housing starts by a significant margin. Hence why basement suites are full.

Steev: Source?
From 2000-2010 the GTA’s population grew by 1,079,003, housing starts were 420,719 or one new residence for every 2.56 people. Roughly one new residence per family. No shortage of land there. In Vancouver, where prices rose much faster than in TO, that ratio is only 2.24 over the same period. The opposite would be true if we had a market dictated by supply and demand as you are suggesting.

———> so 107,000 population growth per year as per your stats. That doesn’t even include the Foreign Temporary workers and International Students. They need a place to live don’t they? Don’t cherry pick stats…keeping ones you like and throwing others away. And 42,000 housingstrats per year in the GTA???? So the condos coming online this and next year in Toronto is more like an average year. No?

4) Interest rates will only rise marginally if at all. Australia’s rates rose astronomically compared to what G forecasts here…and look at their prices still.

Steev: Interest rates don’t need to rise for a society to experience debt fatigue. I’m guessing this is one of the main reasons Garth is predicting 15% followed by slow melt rather than US style crash. No pin required.

———> you’re hanging out with the wrong society. Many people I know have become very wealthy over the last 10 years. Maybe you just have to see beyond your circle. There is a lot of money around.

#132 steev on 05.10.12 at 2:58 pm

Anyone have an idea of what it takes to become an accredited mortgage professional? this isn’t meant to be a cheap shot, I’m genuinely interested in what the requirements are. Anyone know off hand?

Cheers

#133 Schmenge on 05.10.12 at 3:00 pm

Lived in Hamilton for ten years, three as a homeowner. Bought a 1910 three bedroom solid brick house looking onto a park for $150k in early 2009. Yeah, its NE of downtown, so there’s the odd dude sleeping on a bench, nothing more than you’d see in lofty Trinity Bellwoods in TO.

Perhaps the best part of the city was the lack of snooty attitude that so often prevails in Toronto. A smaller, gritty (read: authentic) place that blows the cookie cutter Mississauga and Milton worlds out of the water, and at 70% off. Waterfront, history, good cheap eats, and it doesn’t take an hour to find a farmer’s field or a picturesque village.

Keep in mind that the city has a huge range of housing, you can get a Georgian mansion in the Durand, or a 1880s workers cottage in the North End, and anything in between.

And yes, only an hour from Toronto. The TO folks make fun of you until you mention your mortgage is only slightly more than the maintenance fees on their condo in CityPlace…

Now living in Edmonton, kept the Hamilton place to rent out. Renting in Edmonton, my 1 bedroom is more than my Hammer-town mortgage. Oh, Canada…

#134 Bottoms_Up on 05.10.12 at 3:04 pm

#130 Canadian Watchdog on 05.10.12 at 2:35 pm
————————————————–
Exactly. Watch the Peter Schiff video (10 minute compilation of him ‘telling what the future holds and why’). Debt and productivity (along with ARMs and lending standards) are addressed.

#135 Skyce on 05.10.12 at 3:08 pm

Mortgage arrears rate highest in Alberta

The mortgage arrears rate in Alberta is by far the highest in the country, according to the CIBC Household Credit Analysis report released Wednesday.

http://www.calgaryherald.com/touch/business/story.html?id=6591663

#136 Bottoms_Up on 05.10.12 at 3:09 pm

#118 JAGHamilton on 05.10.12 at 11:59 am
———————————————–
What are you talking about? Here’s a decent-enough looking house for $134,000. People from Vancouver would puke if they see this:

http://www.realtor.ca/propertyDetails.aspx?propertyId=11415067&PidKey=668116318

5 min. from downtown, 10 min. from jogging/habour paths (yes, you can sit on a park bench and watch the sun go down over the harbout), 15 minutes from McMaster University.

#137 Bottoms_Up on 05.10.12 at 3:12 pm

#113 Cy on 05.10.12 at 11:23 am
————————————-
Your friend owns debt on three houses. If your friend (and people in general) owned the houses there wouldn’t be much of an issue.

#138 Bottoms_Up on 05.10.12 at 3:19 pm

#103 helpful on 05.10.12 at 10:12 am
————————————–
“Priced-out” shouldn’t even be a concept.

The mere fact that “the market can get away from you” PROVES that Canadian housing is a Ponzi scheme (not based on fundamentals) and will fall.

People buy houses. When houses become unattainable…well, prices come crashing back to levels where people can once again afford them.

What would happen to prices if people had to make the tranactions with CASH SAVINGS? In most major markets, prices would probably come down 50-75%.

Ubiquitous access to funds has driven prices up. This has got to (and will) stop.

#139 brainsail on 05.10.12 at 3:44 pm

#133 steev

“Anyone have an idea of what it takes to become an accredited mortgage professional? this isn’t meant to be a cheap shot, I’m genuinely interested in what the requirements are. Anyone know off hand?”

I did a quick Google and I’m still laughing.

“A financial calculator is NOT required for this course.”

http://mortgagecampus.org/Licensing.aspx

#140 Arshes on 05.10.12 at 3:53 pm

#114 Buy Curious on 05.10.12 at 11:26 am My friend is moving to the States in 6 months and is wondering if he should sell now or in September? I told him to wait but another friend said to sell now. I asked the guy why and he stated all these points that are puked up on this nerd hangout of blog. I said if you’re making financial decisions on what back water Canadians think, you might as well as move to Barrie and open up a burger van on the side of road.
———————————————————
Sell now, September is traditionally the slower period as people are going back to work and school. And thats when things are going be bad, when people realize that the thier house that didnt sell in the spring or summer proabably isnt gonna sell at all or at least at the price they want.

#141 steev on 05.10.12 at 4:01 pm

#132 TRT on 05.10.12 at 2:54 pm

Seems I need to elaborate my points a bit.

1) I understand that Canadians pay off a good chunk of mortgage debt each year. My argument is that after regional caps were removed in 2003, real estate gains have largely mirrored growth in CMHCs insurance in force, a trend that won’t continue, a trend we agree on.

2) Immigration doesn’t equate to demand, rather it is a component of demand. I chose household formation as my yardstick for demand. My point about it being inconsequential was that we can talk about demand until we’re blue in the face, but if we don’t consider supply at the same time then our arguement would be inconsequential.

3) Arguing that I’m cherry picking data doesn’t come off well when you fail to present any at all.

4) Not addressed by your response…

Care to try again?

#142 $$$BPOE#1 on 05.10.12 at 4:04 pm

Oak and 70th SOLD SOLD SOLD. Lovin It. Everything getting mopped up nice and clean. WINNING!
I think it’s pretty clear now THERE IS NO BUBBLE. Get over it and Get buying. Every year you don’t buy is another year of failure and a lifetime of regrets. 25 years from now you are free. Look at BoB Rennie and Tsur Sommerville, uber rich and have transcended all pain and misery in this world by being owners. Do you have money issues or chronic illness? All this is alleviated with the purchase of the home. The freedom you will experience can’t be explained

#143 Westernman on 05.10.12 at 4:12 pm

Jenna @ # 38,
Yep, I’m sure RE will have fallen back to perfectly reasonable levels in the next 90 days…yep – fall would be a good time to buy…
Don’t forget, get yourself in as much mortgage debt as you possibly can otherwise life just won’t be worth living…

#144 Two-thirds on 05.10.12 at 4:16 pm

I like my rhetoric stirred, not shaken.

Hence, this subversive blog is my watering hole of choice.

Stay thirsty, my friends.

:)

#145 AprilNewwest on 05.10.12 at 4:30 pm

#129 – How do you feel now Garth?

You can’t be so naive as to believe what these people spout. They have a vested interest in propping up the housing market.

#146 Reserve Ratio on 05.10.12 at 4:36 pm

Perhaps it will take a twelve year old to explain how deluded our society has become.
http://www.youtube.com/watch?v=Bx5Sc3vWefE

How will the Canadian chartered banks survive once their orgy of zero reserve ratio debt creation comes to it’s inglorious climax?

There are much larger forces at work (Bank for international Settlements…anyone…anyone) that have created a worldwide “bubble” of cheap credit which is newspeak for debt.

How about the derivatives bubble? It’s only somewhere in the neighborhood of a quadrillion fictional dollars. Does good old fashioned math even apply anymore? It’s simply insane.

This whole era should go down in history as ” how to mine the future, screw your kids and pretend we’re rich”. It’s shameful. Arrogance and ignorance are a deadly mix. This will end in a river of tears.

The sooner this ends the better.

#147 Westernman on 05.10.12 at 4:59 pm

Keith in Calgary @ # 95,
Sounds good, with any luck we will have a large population of herd stock buried in mortgage debt … they will need help from men ( as always ) … now that would be a target rich enviornment!
Advantage to the men…
Sorry John G., I know this concept must be repugnant to your kind…

#148 zeeman1 on 05.10.12 at 5:06 pm

#131 Disciple.

I understand, but Occam’s Razor, my friend.

#149 getreal-tor on 05.10.12 at 5:13 pm

#119 Canadian Watchdog on 05.10.12 at 12:05 pm

I call bullshit on Brad saying that they do not sell to foreign investors. I know of plenty of local people who represent investors with 100% foreign money.

Funny how he also addressed the CMHC vacancy numbers by stating that only 500 units are for rent in Toronto. Just because someone bought it, it does not mean that they are necessarily renting it.

He clearly isn’t a dumb guy but I am tired of all these news outlets using people that have a lot to lose in this market as spokes people. It’s like asking the pharmaceuticals to rate themselves on the effectiveness of drugs and any potential side effects.

#150 new_era on 05.10.12 at 5:15 pm

Gee is canada in a housing bubble. So they ask CMHC.

That kind of like asking the

– CEO of RIM is the black berry dead

#151 John on 05.10.12 at 5:19 pm

Smoking Man wrote:

“Did I not predict a few weeks ago of the pending tug of war for the minds of the slaves.

I think I did.”
——————

There is some value in that…but as far as mental health is concerned it’s all about boundaries, self esteem ( self-care), and empathy.

You’re not touching on that, so your relevance as far as understanding the “crisis topic” at hand is really low.

The problem started at an individual-collective identity level, and is solved there.

You’re not even at first base.

#152 jess on 05.10.12 at 5:24 pm

http://www.guardian.co.uk/business/2012/may/07/tax-evasion-global-action
..”the Bank of International Settlements (BIS) shows bank accounts in tax havens still held $2.7tn (£1.7tn) last year – about the same amount as in 2007.
=================
leveraged metal streams?
volumetric production payments, or VPPs.
http://www.reuters.com/article/2012/05/09/us-eig-chesapeake-mcclendon-idUSBRE8471H020120509

#153 harden on 05.10.12 at 6:16 pm

“With warm weather comes househunting season”

http://www.vancouversun.com/Vancouver+real+estate+cheapest+homes+market+West+Side/6599393/story.html

#154 truth hammer on 05.10.12 at 6:17 pm

EE # 33 ….Richmond townhouses at $550,000? You must be either looking a super busy highway crap main street or out of the way locations with no amenities. The area’s in demand radiate from around ‘shitty hall’ which is also where all the amenities and shopping is. Great shopping by the way. At Blundell and Gilbert there are six new townhouses listed at $1, 080, 000. The streets between Williams and Cambie are 99% HAM these days. You can walk through any of the six major mall and see no caucasians for blocks either in the buisinesses or working there. Banks have all converted to HAM occupation…ditto civic services. Official stats have HAM in the lead at 75% of the population. Has any one got any ideas on running a ‘visible minority’ program for whitey now that they are a visible minority as so many immigrant groups have enjoyed and still enjoy?

Isn’t it time for whitey to get the freebies” Free education, free housing, free daycare, free tax prep….jobs secured by shitty hall reserved only for new pressed HAM… no prison time for drug offences…or reckless behaviour? This is an opportunity for you leftovers out there who like a free ride courtesy of the political correct policies of the politically correct socialists.

Of course you realise that this is all tongue in cheek…but now that whitey IS officially a visible minority…will policy decisions begin to reflect this?

#155 jess on 05.10.12 at 6:36 pm

Martha Rosenberg asks: If going to prison for research fraud is not enough reason for retraction, what is?

Why Are These Fraudulent Papers Not Retracted?
Thursday, 10 May 2012 13:52 By , Truthout | News Analysis

perverse incentives that lead scientists to cut corners and, in some cases, commit acts of misconduct.”

But elsewhere, audacious, falsified research stands unretracted – including the work of authors who actually went to prison for fraud!

Richard Borison MD, former psychiatry chief at the Augusta Veterans Affairs medical center and Medical College of Georgia, was sentenced to 15 years in prison for a $10 million clinical trial fraud,(2) but his 1996 US Seroquel® Study Group research is unretracted.(3) In fact, it is cited in 173 works and medical textbooks, misleading future medical professionals.(4)

Scott Reuben MD, the “Bernie Madoff” of medicine who published research on clinical trials that never existed, was sentenced to six months in prison in 2010.(5) But his “research” on popular pain killers like Celebrex and Lyrica is unretracted.(6) …”

http://truth-out.org/news/item/9049-why-are-these-fraudulent-papers-not-retracted

#156 furst on 05.10.12 at 6:46 pm

The key to successful timing of real estate is to be FURST!!!

#157 Kaganovich on 05.10.12 at 6:49 pm

132 TRT

I don’t think immigration equates with demand. Rather than immigrants as an accurate proxy of demand, I would go along with Steve Keen’s equation which is demand equals income plus available credit. There is much more debt than cash in the world. With this being said, cue the Investors Friend to explain to everyone how assets always equal liabilities so we don’t have anything to worry about….oh that’s right, his overbearing pompousity got him barred from the blog. Anyhow, Mish has done a good job of dismantling the ‘cash on the sidelines’ meme on numerous occasions.

#158 John G. Young on 05.10.12 at 7:08 pm

#148 Westernman on 05.10.12 at 4:59 pm

“Sorry John G., I know this concept must be repugnant to your kind…”

You know nothing.

#159 jess on 05.10.12 at 7:42 pm

While they argue over cuts to food stamps and austerity –ABC news reporter, Jonathan Karl “Spinners and Winners” Clinton made 10m. and billed taxpayers more than 1m. in expenses . Bush had a 80k phone bill! Maybe he should take up lip reading.

============================

American taxpayers own close to 200000 vacant houses, and over the next year they will spend more than $40 million just to mow lawns

#160 Smoking Man on 05.10.12 at 7:52 pm

Been at the duke since 3. On the train heading home. I have an epic post in my head. Hope I can hammer it tonight. Before I kill this liter of wine in my hand

Caustion my start a gender war on here

Why woman like granet.

#161 B.Anchor on 05.10.12 at 7:58 pm

House price rise not because of the mania of buyers, but because of expansion in credit against a relatively fixed asset base. The mania of buyers impacts demand for credit, and loose lending fuels the boom. For price to continue to rise, outstanding credit must continue to rise, and indeed accelerate. For house prices to rise continuously, housing as a % of GDP will need to increase past the current high, and mortgage debt to GDP will need to double over the next 10 year. Do you really think that is possible or probable? If outstanding mortgage debt does not grow, it is impossible for house prices to rise. Growth in credit is now decelerating, not growing. Be patient. Look at the long run Housing as % GDP chart that the Bearded One put up, and you can estimate the time for change in market sentiment and price. It won’t happen overnight, but it will happen…..

#162 Nostradamus Le Mad Vlad on 05.10.12 at 8:04 pm


JPM crashing and JPM crashing again; 12:14 clip The Euro — it’s a planned crisis; Greek Chaos “Meanwhile MP Farage warns a rebellion has started and Europe is now facing an outright revolution.”; Build My Burgers 2012 Location found; FHA = CHMC? Possible bailout (surprising); 1:32 clip “Low Interest Rates Are Great For Bankers’ Recovery From Criminal Gambling, But Retirement Plans Of Millions Wiped Out!” wrh.com; Europe = Bear Stearns “They fooled us once in 2008 before the collapse saying all was well with the Bear Stearns collapse. It just happened again and this time the crash will be much larger.”; India’s Gold Legal beagles at work; David Cameron and the Queen No, they’re not having a hot affair, there’s no growth happening in the UK, and Single Govt.? That’s what Cameron says, so mebbe that’s what they are working on; Greece Using the barter system and selling freedom to the world; 6:31 clip Turkey sharply increases Iranian oil imports; Lottery Winnings Great way to use part of them! Greek election and the effects on stock markets; Florida 4closure case could hurt banks; Pensions Strike UK civil servants; America For Sale China City going up; Student Debt The origins of The Mudshark?
*
Distributing Food and facing possible criminal charges for doing so; 2:52 clip Prosecuting dubya’s regime for war crimes. Good on Malaysia; Putin tells Obomba to do a naughty thing to himself; Turkey Got this right; Humans Eclipsed by chemicals; Six min. clip Headline says it better; Four min. clip CNN asks Ron Paul to withdraw from the race (he is leading). Individuals can also drop CNN from their channels; Iran – Israel “Why is Israel even part of all of this? Israel is not a permanent member of the UN Security Council, nor even a regular member.” wrh.com; Sarkozy Opening a large can of worms; Garlic more effective than antibiotics.

#163 Realtors and mortgage broker's in a panic on 05.10.12 at 8:08 pm

Do they believe they will fool anyone with the housing crash in Canada. Housing in Canada is a huge ponzi and is starting to crash. Their screams will get louder as the crash gets worse.

#164 Skip Breakfast on 05.10.12 at 8:14 pm

#151 new_era wrote: “Gee is canada in a housing bubble. So they ask CMHC. That’s kind of like asking the CEO of RIM is the black berry dead.”

Ha! That is too true. I think the announcement that the government is thinking about spinning off CMHC is not a small indication of a problem, but a giant, big red flashing alarm that the government sees a meltdown of epic proportions. I’m afraid it indicates to me that the government is seriously concerned about wearing a real estate collapse. Potentially even bigger than Garth’s estimate of an “initial” 15% national average drop. Everything I look at points to a fall even more precipitous than that!

#165 Junius on 05.10.12 at 8:25 pm

#132 TRT,

Saying the same thing over and over again does not make it true. Immigration did not cause the increase so it cannot sustain it. Immigration levels have been the same for decades.

How do you explain the fact that places like Phoenix and Vegas experienced the same sort of immigration and prices crashed? You can’t. Look at Australia now. Same future.

You are wrong. Still.

The housing bubble has been caused by cheap credit. Period.

#166 its starting .. on 05.10.12 at 8:26 pm

desperate developers….

Cinema Towers (TIFF condos on King St.)
5 percent down, 6 months free maintence.

#167 Industrial Guy on 05.10.12 at 8:31 pm

zeeman1 I guess you’re refering to … Occham’s razor, the law of parsimony or is that persimmons? ..I always get the two confused……

#168 Dooode on 05.10.12 at 9:07 pm

#74 Linda Pearson

Can’t resist…I think the correct phrase is “bated breath” in the sense of holding one’s breath.

You’re right on girly…
http://www.worldwidewords.org/qa/qa-bai1.htm

#169 villain? on 05.10.12 at 10:07 pm

#113Cy on 05.10.12 at 11:23 am

It’s true Cy, nothing is gonna BUST on Vancouver Island, it is truly different,
because they are going to SINK! :)

#170 TurnerNation on 05.10.12 at 10:34 pm

#16Smoking Man on 05.09.12 at 9:50

I bailed, myself. That morning. Why: “Plan the trade, trade the plan”. My plan was 19 and it came close to it, enough.
***
#233TurnerNation on 05.02.12 at 10:03 pm
Well I punched out of ERF.TO while it was close to 19 this morning. Close enuff for me. See you all now on Track 5??

#171 Ozy - Toronto slowing down sloooowly on 05.10.12 at 10:53 pm

For who has eyes to see and ears to hear, or otherwise, feel the unfelt.
Toronto is slowing down sloooowly, but surely. Listings popped like mushrooms. Prices very high, some still selling but less and less above asking. Come fall, Toronto neighborhoods leafs and valuations are falling down.

#172 expat_engineer on 05.10.12 at 10:53 pm

#130 Canadian Watchdog

I’m not sure what you mean by ‘money is borrowing’ and ‘borrowing creates more output’.
————–

Do you even wonder where money comes from. we the citizens created it by borrowing it. Money does exist until we borrow it.
Yes real output is declining because the rate of growth of debt creation is declining. . But nominal output is inceasing becuause they are trying to print (QE) to make up for the debt destruction. The end game of all of this is a massive inflation as the central banks print money to make up for the debt destruction.
To sum up , the whole economy is a ponzi scheme that relies on exponential growth of debt. the end game is hyperinflation. That will happen when US bond rates start to rise like those of the PIIGS.

Hope this isnt too convoluted. But house prices will never go down too much in real terms. The CB will do a sleight of hand and destroy the currencies so that home values go up.

But ultimately all ponzi schemes have to end. Beware and prepare.

Hope ur still with me.

#173 Van grrl on 05.11.12 at 12:51 am

#148 Westernman:

That made me laugh “they’ll need help from men, (as always)”. Clearly not if more of them are buying on their own than the boys are.

Why direct your comment at John G? I’m the one you have to deal with on this issue.
Chicken?!

#174 2centsCanadian on 05.11.12 at 1:38 pm

I know a few very wise and successful investors (stock market and real estate). And all have said that if you can get into a market within 10% of the bottom and get out within 10% of the top …. you’ll be doing just fine in your investment life. People get greedy trying to nail the timing on that last 5-10% and miss (often going backwards 30 – 40%). A good rule of thumb is to always leave some cushion in your financial (and life) plans. Things DO go wrong.

In our life times there are historically only 4-5 of these cycles. The ducks are nearly perfectly lined up … we ARE at a quivering high. Tooth picks stacked on top of tooth picks. Denial, squinting our eyes and drinking more alchohol can only help for so long. Reality ALWAYS eventually comes to the surface.

#175 Westernman on 05.11.12 at 4:07 pm

Van grrl @ # 174,
I knew that comment would draw out the Feminazi’s out…
Two points.
1. They are not buying anything – they are loading up on debt, the bank owns it all… so get that straight.
2. Concerning John G. – it’s always fun to take a shot at the weirdos’, don’t you think?

#176 Westernman on 05.11.12 at 4:12 pm

John G. Young @ # 159,
Re: ” You know nothing ”
I know a weirdo and creep when I hear one…

#177 John G. Young on 05.11.12 at 4:19 pm

#176 Westernman on 05.11.12 at 4:07 pm

“it’s always fun to take a shot at the weirdos’, don’t you think?”

I enjoy taking shots at you, so yes.

#178 John G. Young on 05.11.12 at 4:23 pm

#176 Westernman on 05.11.12 at 4:07 pm

Oh and BTW, if anyone on this blog fits the profile of a Nazi, it’s you.

#179 Westernman on 05.11.12 at 6:46 pm

John G.Young @ # 179,
It was only a matter of time before you trotted out the old “Nazi” saw, wasn’t it?
One just can’t play the “victim” role without trying the shaming language, can one?

#180 Andrew on 05.12.12 at 12:29 am

Kitchener-Waterloo is a cheap place to live. $260K for a condo townhouse with low maintenance fees and $325K for a detached house is not all that expensive. There is no real estate bubble in smaller cities in Canada. K-W is far enough from the GTA and not part of the greenbelt so it is not affected by the GTA/Vancouver real estate bubble. That said, ignore the inlaws and save money for your downpayment, do not buy right away. You should not borrow over 4x your income for a mortgage.

#181 Virgin Toronto Couple on 05.13.12 at 8:08 am

Hey Natalie,

I’m in the exact same position. Thought we could find something for 350 in Toronto – no chance. So we turned to thinking of Hamilton, but the commute would do me in. Otherwise we’d be there with all the other folks like us. Good luck!