From bull to bitch

If you live in the GTA, but especially in Winnipeg, Saskatoon, Regina, Edmonton or Montreal, you should be watching Vancouver. We’re in the early stages of what appears to be a market meltdown, and the pattern is so classic I described it here over a year ago.

Phase one: Prices crescendo amid media froth, urban myth (‘the HAM is coming!’), house lust, lax credit standards, cheap money and panic (‘buy now or buy never’).

Phase two: Sales abruptly, surprisingly halt. It matters not if mortgage rates have stayed low or even dropped, whether it’s spring or autumn, or what crap Global TV is broadcasting. Realtors immediately put out a media release saying the market is ‘balanced.’

Phase three: Now sales levels decline exponentially, but prices stay sticky. Idle real estate agents spend their nights on questioning my manhood. They fail.

Phase four: Listings swell uncontrollably as word spreads the market may have topped. Homeowners hungry for record payouts rush to market, vaguely aware the train’s already left the station.

Phase five: With supply now swamping demand, prices start to crack. Certain market segments (like high-end homes or condos) or specific neighborhoods (like Richmond and Van’s west side) lead the retreat. The media starts to notice and asks ‘is the bubble bursting’ after it already did.

Phase six: Prices usually over-correct, crashing through what ends up being fair market value or a long-term moving average, as buyers smell blood and wreak revenge for the ignominy and agony of earlier bidding wars.

Where’s Vancouver now? On Monday the local board will reveal its latest fudged, incomprehensible and purposefully misleading numbers (the ‘benchmark index’). But whatever the news, we know this:

  • Sales are down by about a quarter in the last four months
  • The average SFH price has collapsed by $150,000, or 12%, wiping out the last two years of price gains.
  • Anyone who bought in the last year has likely lost money, even before contemplating what the net proceeds would be after closing costs.
  • Listings have surged to a 10-year high, up 23%.
  • Per capita, there are now five times more houses for sale in Vancouver than Toronto.
  • Close to 200 worried and scared sellers a day are reducing their asking prices

And it’s Spring. Long-term mortgage rates just came down. Banks are still handing out free down payments to newbie buyers. And yet, see what has happened to what was, one year ago, the hottest, most extreme, oversexed real estate market in North America. Prices went too high, vendors got too greedy, realtors too cocky and buyers too disgusted.

Absent were any of those ‘external factors’ bank economists and housing market pumpers told us are absolutely necessary for a market to turn from bull to bitch. The Bank of Canada hasn’t raised its overnight rate this year. The bank regulator has yet to bring in tough new regs tightening up lending. Unemployment hasn’t spiked.

No shocks. And yet the market’s toast. It proves what this pathetic blog has been bleating on about with nauseating repetition – asset prices unsupported by economic fundamentals will collapse. Ten times out of ten. Canadian house prices have climbed a teetering wall of debt, while incomes haven’t kept pace and savings have been depleted. Now that the economy is stuttering again, consumer confidence is being sapped by lousy news, and salary hikes are illusory, it’s retrenchment time.

And not just in Vancouver, home of our weirdest citizens. Everywhere that prices have exceeded our grasp. Each market is different, but inevitably, all will succumb to the same indefatigable laws of economics. God help the distracted, the naive and the horny.

Like Luke.

Hi Garth, my name is Luke and I am a 29-year-old renting in North York with my girlfriend/finacee.  We rent a 1 bedroom condo with 2 parking spaces for 1375 monthly.  I have been following your blog for about a year and wanted to thank you for your non-filtered observation of the housing market in the GTA and Vancouver.  I have used your insight as ammunition for arguments against buying from my finacee and her in-laws.

I would like to ask for some advice because I am about to make an offer on a detached home in Maple for 539 K and nervous about buying at the top of the market.  We both love this house, area and finished basement suite (possible rental income). The down payment will involve draining almost all our savings 60K and 48K no interest cash loan from her parents (hopefully part on this loan becomes a gift when we are married).

I have a decent job as a software consultant working from home making 67 K, with a raise to 72 K due in September. I wish we had the luxury to wait until this bubble pops, however our wedding is next year and we want to start a family soon. Can you help?

Luke, dude. How can you read this drivel for a year and still be such a fiscal dink? If you buy you’ll have (a) no liquid assets, (b) a mortgage of $440,000, (c) double the monthly costs, (d) market risk from buying at the top, (e) rate risk with a mortgage that will renew much higher, (f) conjugal risk since you’re buying before marriage and the worst, (g) indebtedness to your inlaws.

And you think you have to rush because of a wedding in 2013 and maybe a kid? Why does a baby need you to own a house? Why does she need it? How’s it in your family’s interests headlonging into debt for something that will be worth less by next summer?

Real men say no, Luke.


#1 Mike on 06.03.12 at 8:29 pm

OMG, who wrecked my car?
I’ll have to sell my Vancouver condo now to pay for the repairs :)

#2 JohnSaccy on 06.03.12 at 8:39 pm

Garth, what is your take on the text below from Larry Summers? Thanks for everything you do.

Rather than focusing on lowering already epically low rates, governments that enjoy such low borrowing costs can improve their creditworthiness by borrowing more not less.

#3 @crazyfasteddy on 06.03.12 at 8:40 pm

Totally normal Garth. There’s always a sense of euphoria before we die. Maybe it’s just us soiling our pants but it still feels good…

#4 Mike on 06.03.12 at 8:41 pm

Vancouverites are still nuts and most of them believe prices will keep going up. However, I actually heard a conversation on Friday by the watercooler in which a guy said “I started wondering whether selling my house might be a good idea” :) It’s probably too late but at least some people are starting to wake up.

#5 Maxamillion on 06.03.12 at 8:41 pm

“I am about to make an offer on a detached home in Maple for 539 K and nervous about buying at the top of the market.”

Please give me his name so I can advise people on which software consultant to never call.

#6 Randy on 06.03.12 at 8:41 pm

Can’t you smell the fear ????

#7 Vancouverite on 06.03.12 at 8:42 pm

Where is the buying an overpriced house in Vancouver and GTA in this plan?

#8 GLK on 06.03.12 at 8:44 pm

WhY in the world do you need a house just because you are about to get married? Dude, my spouse and I stayed in a one bedroom appartement until our kid was two years old before moving into a two bedroom appartement. Don’t be stupid to cave in. GLK

#9 Bob on 06.03.12 at 8:45 pm

Nice! Just need to hold off for a bit more in GTA!

What to do? GF is giving so much pressure to buy!

#10 Don't Believe The Hype on 06.03.12 at 8:45 pm

Pray for Luke for he knoweth not what he is about to do. C’mon seriously, how can this guy say that the’s been reading your blog for a year and is pondering such a dumbass, illogical move?!?!?! Unless the letter is fake and it’s just some guy looking for attention.
$60K in savings and would instead want to drop it on a piece of real estate that might be worth less for probably the next 10 years. Words escape me. This goes totally and completely against every single aspect of this blog.
Be a man and don’t do it, Luke!

#11 Richard on 06.03.12 at 8:45 pm

“Luke” has been reading your blog for a year AND he is a software consultant. Needless to say, he’s probably a pretty smart guy. And yet… he is contemplating purchasing!

I just don’t get it. Many of my friends are just like Luke. Really smart engineer-types who make decent dough and yet they fail Personal Finance 101. How can you be a mining engineer / geologist and buy a 500 sqft condo in Vancouver right now? South of the border, my sister (a lawyer) is going to pay $200K more than what the house was bought for 7 months ago.

I just don’t understand how apparently smart people can be so lackadaisical about the biggest single purchase of their life. It’s no wonder wealth inequality continues to rise..

#12 thinker on 06.03.12 at 8:46 pm

Luke is a clown – however speaks the truth on the home front, women are the driving factor for many to take the plunge. Saying “I own” vs “I rent” is huge shame factor at the afternoon pedicure.

Explaining the whole rental vs buying, liquidity, etc is of no concern

#13 City Slicker on 06.03.12 at 8:47 pm

“If you live in the GTA, but especially in Winnipeg, Saskatoon, Regina, Edmonton or Montreal, you should be watching Vancouver. We’re in the early stages of what appears to be a market meltdown, and the pattern is so classic I described it here over a year ago.” –

Garth you didn’t mention Calgary, $82/oil now, and in a free fall. I know oil is not the end all be all, but it will bring a more dramatic effect, psychologically if nothing else.

#14 Heinz Skitzvelvett on 06.03.12 at 8:48 pm

Whither art thou, Cam Good? We need another timely snippet of wisdom, something along the lines of:

“If you don’t want to live in a city that beautiful, with that much demand, umm.. then maybe you should live somewhere else?”

#15 The great American on 06.03.12 at 8:54 pm

Buy American its cheaper. Garth I visit Toronto regularly and I have to say the economy is kicking, young kids in their 30ies are making a boat load of money. I have a few that are employed by the company I work for and they’re making 100 to 150 grand plus their wives income. I can’t see Toronto falling just can’t see it at all. A lot of the people that living the city have stable jobs with good incomes.

Also you stated that condos are bought by speckers dontthey still need 15 to 20 percent down? That’s a lot of money to leave on the table……

#16 Trader on 06.03.12 at 8:54 pm

It’s not easy to get out of the market… but we just did that, and last week got the check. House is sold, money in the bank, and we rent now for about 70% of what it would cost us to own that house. Better rentals out there, but this one is exactly where we need to live.

Such a feeling of relief, after 8 months of having the house listed, and a gazillion people tromping through, 2 offers that collapsed, 5 price decreases, two listing changes… and then that magical first time home buyer who liked how new the house was! (Thanks B.C. for the tax break to first time home buyers)

Housing as a speculation is over with for me.

#17 Observor on 06.03.12 at 8:55 pm

MONEY versus Wealth

Let’s see if the following few true statements cause anyone’s head to explode.

All money is financial wealth

All financial wealth is not money

All financial wealth is measured in units of money

The total financial wealth in the world therefore exceeds the total amount of money in the world (I believe it exceeds it by a huge amount, by perhaps ten times or more).

Okay, does anyone disagree with any of that?

#18 50% correction predictor on 06.03.12 at 8:59 pm


Real man takes cares of his woman’s desires, real man will man up and make the tough decision in the toughest time which is now for you in your short time on this earth.

Luke, if you are a real man, BUY! And BUY NOW!

Put in your offer at 10% above the asking price and do not even give others a sniff of your DREAM home.

So what if it goes 50% down next year! At least you be a real man for ONCE in your life!


#19 T.O. Bubble Boy on 06.03.12 at 9:00 pm

I guess the fake buyers in the 2011 helicopter tour didn’t come back for 2012?

#20 Not 1st on 06.03.12 at 9:00 pm

Garth, why did you single out those couple prairie cities? Something you aren’ telling us. You haven’t written about any of these in months.

#21 Aaron - Melbourne on 06.03.12 at 9:02 pm

Today’s photo is from Perth Western Australia – how apt! its a hilarious story and the link is here…

Internet bloggers are divided on what happened just before the crash; some say the Ferrari driver was giving hotel bouncers the finger, while others reckon he had been revving the engine at the traffic lights and waving to a cheering crowd before flooring the vehicle and losing control.

One blogger, claiming to be a Windsor employee, writes that the driver tried to run from the scene and that he chased him down.

“Out the back carpark of the pub the culprit is dashing through parked cars (at a medium/drunk f— pace) so it wasn’t long before my manager and I were in close range of our target,” ‘Antiloop’ writes on the Australian chat forum Teknoscape.

“Little does he (my manager) realise there is a chain fence blocking off a certain section of the carpark and mid-chase he is unfortunate enough to trip straight over and receive a face full of bitumen.

“Like the nimble gazelle I am, I glide over the fence trying not to smirk at my boss’s misfortune and resume the hunt.

“As I regain my composure and lock back on to this ferrari f—er 10 metres ahead of me I see the c— trip, slip and fall to the ground over a second chain fence just before the end of the car park. What luck!

“Just before he jumps back to his feet I catch up, side swipe his legs with the old ‘take that wifey’ backhand and he crumbles back to the ground once more.

“A few swear words later my felled manager and one of the bouncers brought themselves up to pace and grabbed him by the sleeves, carting him back to the accident.”


I am also reminded of the Underpant Gnome investment strategy….

Phase one: Steal the underpants
Phase two: ???
Phase three: PROFIT!

#22 waiting on 06.03.12 at 9:03 pm

Luke – it’s “fiance” not “finacee” or maybe it was a freudian slip and you meant financier.
Also, are you living with your girlfriend and fiance? If so, you have bigger problems …

#23 Sp on 06.03.12 at 9:05 pm

Now that’s a show off. The dude has tons of money that he could afford to wreck his car on purpose and caused property damage. Just sue him and help him to show off.

#24 truth hammer on 06.03.12 at 9:06 pm

If the market has ‘corrected’ simply on the jibber jabber bleating from the BOC and the midget goof who wears the federal finance hat with no actionable events having taken place….then we must ask ourselves as to how much the correction is real and how much is just the product of the perception based ‘sausion’ that as been pumped out…….Could the dip in the market be as temporary as the suasion program that proceeded it?

I’m a macro guy….I look at the big picture…..I don’t see any material change in the makeup of the underlying market….rates still zero…banks still batting them out….buyers still as stupid as ever. So what has changed…..if nothing…then why should change occur. This could be an arbitrage set up for RE speculators with the guts to wait until the pigs come rolling in once the ‘perception’ clears.

Unless the government is prepared to keep spending money promoting this campaign of negative perception the madness will bounce back with a frenzy as long as real estate is the only game in town. There is nothing to show that it shouldn’t.

#25 Onemorething on 06.03.12 at 9:08 pm

Grow a set Luke or be a statistic.

Garth, I have to admit something!

Like this blog, I am pathetic!

I sold my RE years ago and took my profits and bought gold silver at 850 and 12 and sold at 1750 and 48 while playing the AUD from 68cents to 98 cents and Swissy from 1.30 to 0.82 then jumped in on the USD twice.

I pathetically bought into Air Asia at 0.85cents and it went to 4.20 but sold at 3.80.

I pathetically own 6 preferred banking stocks which are preferred and pay both divendends quarterly and nice annual returns.

I hate myself because I dont seem to fit in with anyone and I’m lonely.

This is why I come to your blog so thank you for accepting me as I am.

#26 James on 06.03.12 at 9:09 pm

of your six phases were do you think the various markets sit?

should we be praying for an interest hike tuesday? i am hoping for a housing pop so i can grab an acreage at reduced rates from a baby boomer

#27 Stupesing in Cabbagetown on 06.03.12 at 9:10 pm

Why the hurry Luke? Wedding is a year away. Even if Wifie gets pregnant right away it takes 9 months for a baby to ripen and it will be another year before he or she walks. In other words, you have more than three years before a fenced yard becomes a place to take the little one to play. You can’t leave a toddler unattended anyway, so a neighbourhood park with swings, slides and a wading pool will provide oodles of fun another year or two and you’ll have a chance to socialize with other young parents. Keep socking away the moolah. Life will be so much less stressful with a cushion of savings.

#28 Market Bull on 06.03.12 at 9:10 pm

Spending more than 5 minutes attempting to fathom the Vancouver real estate market is an epic waste of time.

Assuming that it applies in any way to the rest of the country is equally futile.

Remember only one thing. The GTA is on fire and is unstoppable.

#29 45north on 06.03.12 at 9:12 pm

Where’s Vancouver now?

Sales are down by about a quarter in the last four months

where’s BPOE now?

I live on a long street in Ottawa, maybe a thousand houses. Usually there are a couple of houses up for sale but none right now.

#30 zeeman on 06.03.12 at 9:19 pm


when do you think this will happen in the GTA.

I am noticing slowdown in markharm, and stoufville.

I also heard an agent on the radio that he thinks that a correction in gta will occur next year.

Do you think that OSFI will not go through with the changes after seeing that Vancouver is correcting?

#31 Frank the skank on 06.03.12 at 9:20 pm

There’s such a widespread belief that everything is alright and real estate will never drop. This mentality does not descriminate, it infects the rich, the poor, the uneducated, the engineers, lawyers…. everyone. Its seems that the pesimist are the ones that can see the writing on the wall. The lagtime between when the shit hits the fan and when the general public realize what’s going on is amazing. Like some of you, I’ve stopped warning people because they just don’t want to hear it. I continue to be asked why I’m not buying and I give a vague answer to brush them off. I won’t gloat when I finally purchase a house at a discounted rate, I will simply lead a comfortable life and not be house poor, have a retirement plan, education plan for my kids and a wife that will be happy (yes, this is attainable). In the end, blind faith can get you bankrupt, hopefully people learn their lessons.

#32 Soylent Green is People on 06.03.12 at 9:21 pm

So luke,s weak? Sounds like he wantsvthe house just as much as she does, he is theonewho read blogand still wants to plunge in to the deep end, empty deep end

Dirty CON tricks keep on coming: The Liberals are expected to complain in the House of Commons Monday voters in Etobicoke-Centre received calls accusing Liberal Borys of plotting to “overthrow” the vote there, and saying voters will have their votes “taken away” by a court decision.

Which is not what has happened there at all, at all.

#33 Stinky the Fish on 06.03.12 at 9:26 pm


#34 Chaddywack on 06.03.12 at 9:27 pm

So what stage is Vancouver in right now?

I wonder how many helicopters that jerk Cam “get out of town” Good has hired this year?

I still get the same crapola from my family “I was taking a drive in West Van yesterday and every for sale sign had a SOLD sticker on it, ALL to offshore Asian buyers who buy with Ca$h”

Let’s get this crash going. What do you think Garth….I think we’re in phase 3 and approaching 4.

#35 Canadian Watchdog on 06.03.12 at 9:34 pm

#28 Market Bull

You just won a free T-shirt for that comment.

#36 JohnSaccy on 06.03.12 at 9:34 pm

AIG Chief Benmosche- “Retirement ages will have to move to 70, 80 years old,” Benmosche, who turned 68 last week, said during a weekend interview at his seaside villa in Dubrovnik, Croatia. “That would make pensions, medical services more affordable. They will keep people working longer and will take that burden off of the youth.”

#37 T.O. Bubble Boy on 06.03.12 at 9:36 pm

Pre-market for tomorrow is showing another 100+ point drop for the Dow, and the $CDN inching down towards $0.95 USD.

Hope you all had some $USD assets in your mix.

#38 phinny on 06.03.12 at 9:39 pm


My wife and I are married. Starting a family. Without talking salaries, we do pretty well. We live in Edmonton, I have a small business that is solid, and my wife is in Oil and Gas. No debt. Not even a little bit. Lotsa cash.

A baby on the way.

We rent. Happily. The baby won’t know the difference.

#39 Toronto_CA on 06.03.12 at 9:39 pm

How does vindication feel, Garth?

Must be a good feeling. I am SO looking forward to the day the GTA starts “correcting” as it is being called by those who don’t want to use words like crash or burst.

#40 mark on 06.03.12 at 9:46 pm

“I have used your insight as ammunition for arguments against buying from my finacee and her in-laws.”

“I would like to ask for some advice because I am about to make an offer on a detached home in Maple for 539 K”

Can’t. Breathe. Laughing. Too. Hard.

#41 Freedom First on 06.03.12 at 9:49 pm

Luke. I watch and listen to people like you. You have read this blog for a year and learned nothing. I gave up trying to be a Garth like educator years ago….I lost patience…..kudos to Garth for the work he does. I know from the many people who thank Garth publicly on this blog that he has, and is helping many people. But not you Luke. It is your thinking Luke. Your fiance must be very hot, as she has addled your brain cells. And just think, Luke…’re not even married yet.

#42 Daniel on 06.03.12 at 9:55 pm

Never take a loan from the inlaws … unless you plan on paying every penny back.

If they decide to make part of it a gift later on, they’ll still have it over you and they’ve given you a gift.

If they want to give you a gift, fine – but don’t let them play these games.

Oh ya, stop being stupid. Keep renting and buy on the downside. If you buy now, you ARE the greater fool.

#43 furst on 06.03.12 at 10:02 pm

A poem by Furst

In laws are great
But mortgage free is best
Rent while you can
As borrowing from wife’s parents
Will put relationships to the test

I think that is called iambic garburator. — Garth

#44 Sunshine Blower on 06.03.12 at 10:02 pm

Luke.. you come to this site to ask if you should be buying a house is like walking into a vegetarian restaurant hosting a PETA convention asking “Dude..where can I get a juicy steak”.

#45 NFN_NLN on 06.03.12 at 10:02 pm

He’s a 29 year-old software consultant… what’s not to get?

She’s holding off on sex until they get married.
She’s holding off marriage until they get a house.

The guy is 29 years old and just wants to get laid, of course he isn’t thinking rationally :)

What do you think with? — Garth

#46 East Van on 06.03.12 at 10:03 pm

Everyone on this blog ought to send Tsur Somerville, director at the University of B.C. Centre for Urban Economics and Real Estate at the Sauder School of Business a nice letter thanking him for his contributions to the debate over the last few years.

#47 safetypup on 06.03.12 at 10:06 pm

10 year bond yields in Canada are at all time lows-1.63% range (depression yields, and extreme distress). This means the big banks could easily offer 2.5% 5 year fixed mortgage rates. The Minister of Finance is probably pressuring them not to, though.

Also, expect the Bank of Canada to lower, not raise, its “emergency” rates if things continue to unravel in Europe.

Bond yields are low because bonds are hot. Investors look for safe havens, and bonds are it. Prices get pushed up, yields down. It’s supply and demand, not ‘extreme distress.’ — Garth

#48 Bottoms_Up on 06.03.12 at 10:09 pm

Luke, if your bride-to-be makes $100,000/yr or more, do it. If she doesn’t, you are out of your freakin’ mind.

Tell me how you will afford ‘life’ (eating, clothes, entertainment, alcohol, exercise, cars, gas, insurances, saving for the future, etc.) AND:

$2000/mo mortgage
$500/mo inlaw debt repayment
$400/mo property tax
$400/mo home maintenance
$250/mo utilities

By the way, average daycare is about $1000/mo, diapers about $100/mo, children’s clothes/toys/shoes/extracuricular about $150/mo and the list goes on (car seats run about $200-400, same with strollers, cribs, rocking chair etc.).

#49 Karie on 06.03.12 at 10:13 pm

Buying a house is not just a financial thing. For many people, I can’t say if it’s just women – there is something about having your own house; having your babies there; creating your own space and backyard; making memories. It’s emotional. Luke and his fiance clearly want to buy even if it’s at the top of the market.

It’s hard to believe there will be a housing crash but if you’ve been reading this blog for a year then maybe just wait a year or a little longer to buy. You can save up a little more. Then you can reassess the situation and if housing does come down, you can get a better deal.

Last thing is think about getting married, starting a family and becoming a landlord with someone living in your basement. Quite a lot of change all at once!

#50 JSS on 06.03.12 at 10:14 pm

“If you live in the GTA, but especially in Winnipeg, Saskatoon, Regina, Edmonton or Montreal, you should be watching Vancouver. We’re in the early stages of what appears to be a market meltdown, and the pattern is so classic I described it here over a year ago.” –

Garth – what about Calgary?

Is Calgary lumped in with Edmonton???

#51 Harry Palms on 06.03.12 at 10:16 pm

#8 GLK on 06.03.12 at 8:44 pm……….my spouse and I stayed in a one bedroom appartement until our kid was two years old ……….. GLK

I lived in the in-laws’ basement for a few years, including the first 1.5 years of my first born’s life.

God bless ’em for this opportunity. It let me sort out a mild revolving debt problem, get on track towards funding eventual retirement, AND scrape together a 20% downpayment for the home we needed, and could carry on my then income (2/3 of current).

(as opposed to a 10% downpayment for a nicer home that I could not really afford to carry even at my current income).

Anyway, Luke, my advice is simple – Don’t be an idiot and sink everything you own into a half-million dollar 25 year sentence to debt servitude.

At 3% interest, the 25 year payments on the $440K mortgage are $2800 a month. The 30 year payments are a ‘discount’ of only $200, but cost you an extra $100K

Add in the $48K of inlaw debt to be paid off over what? Would they let you away with 20 years? $200 per month.

So there’s $3 large a month before you even turn on the lights .

By the time we add on York Region and Vaughan’s gouging tax structure, your utility bills, the other non-essential shit like groceries, car + gasoline, insurance,…….etc. ad nausem, your hard costs are quite likely a fair bit higher than $4G per month…….and these only go up, usually faster than inflation.

Reportedly, you will make $72K by the end of this year. (You don’t mention the fiancee’s income, so I’m guessing it’s a fair bit less. In any case, it might be reduced to $450 per week or less for a good year while she’s on Mat leave)

If I only consider your income, you will be doing nothing but treading water today. You will have to scrimp and save to have a $150 night out with the wife. God help you if you have a repair bill for a new roof or new furnace.

If you have upward mobility, you might be able to eventually afford this mess, but I wouldn’t count on it.

If you must own, well, …….I would avoid buying a suburban McMansion in Northwest GTA. You can’t afford it. Legend has it that you can work from home. Look North or East. The ‘bargains’ are 1 h or more from Toronto’s core.

#52 mortgage brokers in a PANIC! on 06.03.12 at 10:17 pm

Talk to a broker from genworth a few days ago and he was talking about the increase in foreclosed Houses in BC . They now have a whole division assigned to just foreclosed houses in BC. The housing crash will sweep across Canada. BTW a house in the annex which had a sold sign a week ago is back on the market. Local realtor tells me this is has been happening a lot since last mouth. Anyone buying now will lose everything and word is spreading. Good job Garth for telling the truth.

#53 mark on 06.03.12 at 10:19 pm

@46, that Tsur Somerville is a laugh, they wheel him out on Global and CBC as the ‘educated’ talking head.

Unfortunately, these guys have sway when people are shovelling in their nightly meal.

#54 Throwstone on 06.03.12 at 10:20 pm

The Bank of Canada interest rate goes up .15% on tuesday….

I’m betting it will. Carney has to put some bite behind his constant barking.

It will go up tuesday.

#55 veteran trader on 06.03.12 at 10:26 pm

market bull you sound like a 26 year old spoiled brat. What tree’s grow to the moon? You really need to grow up!

#56 Mr Gadget on 06.03.12 at 10:27 pm

#57 Cristian on 06.03.12 at 10:28 pm

Another Canadian loser who thinks that he is not allowed to have a child unless he owns a house.
Renting? That’s a big no-no, after all everybody knows that your sperm swim backwards while you rent.

Not to mention that he doesn’t know the difference between a fiancee and a financee. Well, it’s true that a fiancee can turn into a financee after the wedding, so maybe that’s what he had in mind?…

#58 coastal on 06.03.12 at 10:29 pm

“Do you think that OSFI will not go through with the changes after seeing that Vancouver is correcting?”

What correction ? You mean the latte foam that has been blown off the top of the mania that no one has even noticed ? The west coast market needs a gut churning kick in the nuts where everyone is talking about it to say it’s correcting. We aren’t even close to that yet,as the juvenile real estate agents are still talking how happy one should be in a 500 sq. ft. box oblivious that the Euros are about to shatter their jock straps into bits and pieces.

#59 Dr.NickRiviera on 06.03.12 at 10:32 pm

Ok, ok… Since no one else has yet…

“Use the Force, Luke!”

Be a man and tell your in-laws to stuff it. You know the right move to make, so bail on the offer. We live in Edmonton and sold our house a year ago and are renting. We have two young girls and they are totally cool with the temporary condo. Since then we’ve seen the prices here flatline (destroying the “real estate only goes up!” fairy tale) and have watched all of our friends and family drink the realtor Kool-Aid buying their granite and stainless pressed cornflake McMansions about to head over Debt Niagara Falls. Stay the course and down bow to the pressure.

Good luck, and may the Force be With You!

#60 Throwstone on 06.03.12 at 10:32 pm

The only thing Flaherty is thinking about right now, is how he can coincide the burst of our housing bubble with an international economic event; so he can place the blame squarely on a completely unrelated event.

He’s really hoping Brother Carney holds the key rate.

I’m betting Jim’s gonna lose on tuesday……

#61 Dr.NickRiviera on 06.03.12 at 10:33 pm

(that should be… DON’T bow to the pressure!)


#62 Debtfree on 06.03.12 at 10:34 pm

@ 18 let me guess. You took Garths advise and bought prefereds . Lol . And you’re a vulture. Only a real man wields a two edged sword . So far in life I’ve nailed two re bottoms . Looks like I might make it three. The last two times I felt a little bad but then there was no Internet . This coming time there is and I won’t feel a thing because it won’t be my fault they don’t read. The last two times were just like the weather . The faster it comes the faster it goes. Garth the only thing that makes this blog pathetic is the fact that so few read it . And even fewer understand it . Like tonights poor soul Luke.

#63 Einzatgruppen kanada on 06.03.12 at 10:35 pm

Luke at least your living together before even marrying or buying. This is a twicer smart move on your part. Most couples don’t really learn about each other until they live together. Are you learning about your fiancee and her house lust?

#64 Silver on 06.03.12 at 10:37 pm

Weeeeee… We bought 50% below market in commercial area van 2003 for $315,000.00 and had $75,000.00 cash to put down that was free… so correct away… only owe $150,000.00 mortgage $640.000 on a commercial/residential…3.5%… but we pay $1289.00 by choice. we have both studio locations and our home combined now. it took away $10,000.00 a month in expenses away. so it covered lost costs nicely. So drop away…. I warned friends… oh well…
All reno’s were paid granite. May bee $100,000.00 on 6000 sq ft. but would walk away if someone was dumb enough to give us a mil + cash… not that stupid.
Did the work and saved a shit load. HELOC’s…are you nut’s!!!… but everyone we know has one….. they don’t understand why we don’t use one.
6000 ft of cement and old growth heaven, garden that feeds us.

good price for work and home.
And once the property tax dept gets finished being put in their place it would only run about $1200.00 a month in costs… if need be… plus the mortgage, so if i wanted under 2 grand a month….

if shit gets really stupid… i only walk away with a dept of $150 on it… survived with worse than that….
Silver’s Bunker

#65 Canadian Watchdog on 06.03.12 at 10:40 pm

About those Burano condos that were claimed sold out on Buzz Buzz Home.

Here is one listing on craigslist:

Only this unit is an assignment owned by a firm located in Vaughan named Baron Finance, whose website now reads:

“Unfortunately, we are not providing mortgages, leases, and other financial services at this time. We are working very closely with investors so that we may offer these financials opportunities to you soon!”

But an even a closer look at the broker’s email with a little Google search reveals that the seller of this assignment is named Michael Lukhton, CEO at BARON CONSTRUCTION.

Just another example of who might have been dropping 40k (helping their developer buddies meet the 70-80% requirement to receive financing from the bank) and signing off on 4-5 condo assignments at a time; because when occupancies comes due, you guessed it, the buyer is on the hook to fulfill the mortgage and start paying.

Now times this scenario by 50% of the condos under construction, and you have a recipe for a condo meltdown.

#66 100BT FREE on 06.03.12 at 10:53 pm

Hi Garth ! Been reading your blog for the last 2 months! I love it, my dad told me about it. Luke go buy the house asap! NOW! Its only Money! Quite obvious Lukes a meatball! What guys will do when their horny for their wife! So Garthy i got 120k coming into my bank account next week what do you recommend me doing with it? Im 38 married, 2 kids no debt at all, house and my commercial building are paid outright and go a few bucks in the bank. If i were your horny young son Garth what should i do with it? Your blog rocks!

#67 Van grl on 06.03.12 at 10:59 pm

“Buying a house is not just a financial thing. For many people, I can’t say if it’s just women…” yadi yadi yadi

No Karie, it’s not just women. And contrary to some of the outrageous stereotypes that are repeated ad nauseum on this blog, there are plenty of women out there who are not only interested in “nesting” and breeding and enjoy being free.

God help me I don’t know if I can handle this anymore!!!! haaaaa

#68 timbo on 06.03.12 at 11:00 pm

that was a really good posting tonight Garth. You should seriously think about writing a book ;)

“Ireland would expect similar terms if the EU steps in to shoulder Spain’s bank debt, a minister has said.

Spain is pushing for its banks to be recapitalised from European funds rather than having to bear the burden itself, as Ireland did. ”

No fair, we want what he got………..

“Japan’s Topix Index (TPX) plunged toward its lowest close since 1983, after disappointing U.S. jobs and China services data added to evidence the global economy is slowing. ”

This thing is contained isn’t it?……….

#69 BC Bring Cash on 06.03.12 at 11:07 pm

Garth. I find these real life stories that you write about hard to believe. A guy like Luke can see the reality of it all and he still wants to jump into the frying pan. Does he expect you to say, yea go ahead because your situation is different. Is Luke for real after what he already knows? I guess he hasn’t considered that being a debt slave is not much fun.

#70 Victor on 06.03.12 at 11:17 pm

Luke, Garth is right, marriage does not require to buy a house. I am 39, married 13 years ago, rented a bachelor for 7 years in my home country for family of 3, came to Canada 5 years ago, rent 2 bedroom apartment, what is great comparing to bachelor. People may say I am a loser, but we are happy to pay about 900 and put significantly more in savings. Freedom and feeling of debtlessness are big contributors to our happiness…

#71 Jim on 06.03.12 at 11:19 pm


I’d slow down and do the math on this one, with an eye to risk management. Apart from the issue of buying at a market top, there is the issue of what you will do if something goes sour in the labour market.

The software consultants that I know (a decent number, since I have a background in that area) are always worried about finances, given that they shift from contract to contract. Public sector IT types can make decent money with good benefits and great job security. Private sector, not so much.

67k is not a lot of money in Toronto, to be honest. If your wife has a decent income or strong parental support, it may offset your risk somewhat. Be very careful.

#72 Jack McCullough on 06.03.12 at 11:25 pm

A vomit-worthy article in this weekend Globe, BC edition, by Kerry Gold. In essence, it quotes the usual RE pumpers, this time looking to mine the equity in boomer parent’s houses to debt-enslave their children.

As per the salivating Bob Rennie “I belive that the baby boomer is now so risk averse that they are taking their money off the table…and the first time buyer is the benefactor of this aging demographic.”

And this gem from Ross McCredie of Sotheby’s: “A lot of companies like ours are advising baby boomers to set up a succession plan and part of that includes saying to your kids ‘We don’t want to waste our inheritance, so you buy real estate with it.'”

I can hardly believe these hucksters are willing to make such transparently misguided and self-serving statements in public.

#73 duke on 06.03.12 at 11:25 pm

“I have been following your blog for about a year and wanted to thank you for your non-filtered observation of the housing market in the GTA and Vancouver. ”

So you enjoy reading this blog but don’t believe what Garth writes ??

#74 eviee1973 on 06.03.12 at 11:31 pm

Hey Lukle be a man, tell the inlaws they should purchase the house outright as a “dowry” type gift since you are taking their daughter’s hand in marriage.

#75 buylow on 06.03.12 at 11:32 pm

I feel for the babies that get raised in rentals. The teasing at preschool and the daycares will scar them.

#76 MarcFromOttawa on 06.03.12 at 11:32 pm

Due to the cutbacks in the civil service Garth had predicted that prices in the Ottawa region would be affected significantly. Now Ottawa is not even on the bubblicious list.

Change in conviction?

#77 JW on 06.03.12 at 11:33 pm

Another rock solid post Garth. The truth shall set you free !
Having lived through two massive speculative real estate bubbles overseas in the last 15 years, it can happen over a long weekend. Everyone panics at the same time, for sale signs line the street, and bingo….under the C – Crash.

I think Van city needs to fall at least 50% for most people to seriously see “fair market” value. 2 million for a city tear down? Phase 6 shall be interesting….

#78 Saskatoon-Living on 06.03.12 at 11:36 pm

Buddy of mine just bought a $500,000 house in S’toon. Told him if he waited a couple of years, he would have saved a minimum of 10%. He went on saying SK economy is too good with all the potash projects, oil & gas drilling, uranium, coal, etc; and that his house will be worth 10% HIGHER in 2 years, rather than decline. Almost everyone in SK believes what my buddy believes. When are the prices going to drop here Garth?

#79 Dan in Victoria on 06.03.12 at 11:37 pm

Put some batteries in your calculator Luke.
If you can’t sit down and do a simple calculation of
rent to own, then you get what you deserve.
When this mess goes sideways, which it will, you will be one of thousands whos life will be torn apart.

You will sit there with a god awful feeling in the pit of your stomach.
You will lay awake at night worrying about your family.IF YOU HAVE ONE.
Everything will start off perfectly, everyone will be happy.

Unicorns will be sh–ing skittles

Then it will start to creep up, at first you’ll just say i’ll work more hours, then we’ll cut back here and there.
Then the credit card will get behind, then maxxed out.
money will be tight.
Wifey will take a break with the kid at the inlaws.
Luke will sit at home wondering what happened, all I wanted was to make her happy and have a normal life.
What did I do to deserve this.

Sit down and do a spread sheet Luke, get the date to sit with you.
See if she can see the numbers, Hell see if you can for that matter.
I did ’em in about 3 minutes. I don’t like it.

#80 Smoking Man Fake on 06.03.12 at 11:38 pm

The real pain is in Victoria, where my lemmings are on the lookout for a crash.

It will start in the West….

#81 Tim on 06.03.12 at 11:43 pm

“Phase six: Prices usually over-correct, crashing through what ends up being fair market value or a long-term moving average, as buyers smell blood and wreak revenge for the ignominy and agony of earlier bidding wars.”

So that means prices in Vancouver will eventually drop by 70 percent?

#82 50% correction predictor on 06.04.12 at 12:03 am


Buy now!

You only live once!

#83 Devore on 06.04.12 at 12:08 am

#84 HDJ on 06.04.12 at 12:23 am

Just read ‘The Big Short’ by Michael Lewis and don’t see how the Canadian housing market could possibly go through what occurred in the US. Our mortgage schemes and financial institutions may have their seamy side, but they’re nothing like the corrupt, unregulated and unethical mortgage and investment practices that almost brought down the American financial system and caused a real estate meltdown. Our housing market is overpriced in many parts of the country, but downward adjustments will occur during the next couple of years. I wouldn’t hold my breath in anticipation of a replay of what has happened south of the border.

#85 Inglorious Investor on 06.04.12 at 12:31 am

#267 Canadian Watchdog on 06.03.12 at 8:57 pm

My understanding is that a broker can only legally hypothecate (i.e. put up as collateral) a client’s assets if they are held in a margin account. Now, I’m pretty sure all brokers do this––heck, why wouldn’t they?

If you have a brokerage account and you don’t ever plan on using margin (borrowing money from the broker to conduct trades), then use a cash account instead. I believe they cannot legally hypothecate assets in a cash account. Maybe others have more details on this.

But one thing is certain, you should read your client agreements. If it’s all too complicated for you, get professional help.

#86 Renter in Van on 06.04.12 at 12:44 am

Luke- by the time the 2nd kid is one years old you and your wife will both feel trapped, bored and resentful that you are stuck at home nite after nite watching crappy tv and mowing your postage stamp lawn on the weekends for your underwater house. Hold off buddy. Rent, build up money so when you and your wife are going shit-stir crazy being around the kids you have some cash to spend on trips away, hobbies and activities that will preserve your sanity and marriage. Buying a house now is pretty much predicting divorce within 5 years of the 2nd kid coming along.

#87 Carpe Diem on 06.04.12 at 12:52 am


I hope your 70K is post-tax earnings mostly paid to you as dividends! If pre-tax, a software consultant makes a lot more than that and your bosses are taking advantage of you!

400K+ mortgage is a serious longterm committment at a 70K gross income. Probably longer than the marriage.

I have 3 happy kids and very happy wife living on 2.84 acres, with nice neighbors and a couple of MILFs.

I also rent, since it make no business sense to buy at the top.

Luke, I had to tell my mother-in-law to F off and since then she seems in trouble in Vancouver while we have 3 kids running around and my wife happy living in a castle. We also moved away from Vancouver to a nicer town. This place cost my landload $500+ of maintenance a month. Maintenance = new stove, oven, leak, furnace, dishwash + other leak, grass cutting and snow removal.

Not considering taxes, I still would pay more being an owner.

Never borrow from family – I did it once and would never to that again.

400K mortage is a serious debt load that only someone with signifantly more assets should consider.

Unless you are the greater fool … then you deserve what comes next.

#88 Nostradamus Le Mad Vlad on 06.04.12 at 1:01 am

“And not just in Vancouver, home of our weirdest citizens.” — Are you referring to our two resident comedians, BPOE and Mikey the Realtor who come here and entertain us, with uproarious tales of how RE is shooting ahead? I do enjoy their posts, as they give an accurate (but reversed) overview of how things are really doing!

“The Bank of Canada hasn’t raised its overnight rate this year. The bank regulator has yet to bring in tough new regs tightening up lending. Unemployment hasn’t spiked.” — All the necessary evils were conveniently absent, so I guess when / if the downturn speeds up suddenly, most will be caught completely off guard. Too bad.

As to Luke, he can sort himself out. The last sentence of your post is quite eloquent!
#25 Onemorething — “I hate myself because I dont seem to fit in with anyone and I’m lonely.” — Like me, you’re a reject because you won’t conform to what ‘society’ or ‘the establishment’ says you should do.

Enjoy the freedom, my friend! There’s no better trip than running away from the herd, and going it alone! Remember, pigs love to fight in a shitfest!
Higher Drug Costs? Free Trade deal with Europe; Nuts about Soros; Blink a Grand Plan and Back-Up Plan? EZone Quick Fix; Kremlinology a.k.a. Central Banks; Germany If it bails out the EU, who will bail Germany out? TV Business Collapsing? Rise of the New Economy; Monsanto’s associates.

Avalanche of sell orders. Nasty day today? 10:12 clip How the BdB’s control society; ob Chapman has pancreatic cancer. He is well read (links in); The US debts may be completely unrepayable (links in); Forced Buyouts not so good; Fiscal Union Because nothing else works; Buy Gold Opposite of what Garth preaches; Steve Keen Interesting hypothesis; Who is rolling in the dough from last week’s stock sell-off? 1:12:04 clip Days of destruction; RG Steel Layoffs start Monday, co. filed for Chapter 11.
1:45 clip Daily dose of drama, somewhere in Belgium. Someone inadvertently pressed a little red button, and TSHTF; Largest Private Armies; Der Spiegel Israeli nukes are ready to go; Time Travel and Recurring Dreams and Parallel Universes; Quetta, Pakistan Possible ‘quake time? EZone Insecurity Month as well as the financial insecurity month; A Stressful Life can often lead to an early passing.

#89 Carpe Diem on 06.04.12 at 1:18 am


Ottawa is heading for trouble. Besides RIM’s downsizing and federal budgets. People are hurting. I know folks that are putting homes for sales and IT consultants that needs to find contracts in MTL, TO or beyond since they have a home they don’t want or can’t sell.

Just in my hood, I count 10 overpriced homes that have not sold for 1 year.

I know of one sell in a close enough suburban sub-division. A newly divorced mom & grade school teacher dropping $320K to purchase a “move in ready home with granite countertops!

It required a 5% down and 30 years mortgage and this lady admitted she was barely going to afford it. And she is in her late 30’s!

I told her on a number of occasions that she should rent but in the end she trusts the nice lady at the bank (NLB) and her realtor than me (some renter).

My son mentioned this weekend that her daughter is no longer his g-friend …

My wife and I looked at each other and smiled.

#90 new-era on 06.04.12 at 1:24 am

I case you morons haven’t been listening to

F&C K they have been politically washing their hands to the freakin debt news and CMHC mess.

1) A month ago they said its up to the banks to have sound lending policies
2) Then they mention the government shouldn’t be in the mortgage insurance business.

3) They been warning about debt, but did nothing to discourage it.

I believe they successfully passed the buck and blame back to the “GREEDY BANKS”. Its a great political move.

Tell me you greedy real estate agents, why would they care about your. The scape goat has been choosen, now all they have to do is let the free market handle the fall and blame the banks.

They seen the US, the followed the IRISH and US policies, what make you think this will end any differently then those countries

#91 Don on 06.04.12 at 1:26 am

Popcorn, Popcorn, Get your Popcorn! Read all about it!
Save me a seat in the front row.

I was asked again why I haven’t bought yet. My ‘vague’ reply has been notched up a degree : “Not sure if this community is my type of people”.

People are simply drunk and paper gains arrogant, you can’t warn them as they are simply right as all around them believe the same (majority rules). I don’t even bring up the topic and always go silent as I wouldn’t want to be labeled a conspiracy theorist or a doomer. It is truly amazing how utterly purposely ignorant some can be.

I faced the same dilemma years ago: Like others have said, hope she makes good money also. Luke it’s time to learn something more than just computers, broaden your knowledge base, and follow your gut. I was Lucky Luke, the force was with me. Thanks to Yoda, I was able to say no, and found a reasonable princess. Don’t let your hormones get in the way, come out and ask her why you need to buy right now, Save yourself the future headaches and bitterness. I have seen this movie before.

#92 CalgaryBoy on 06.04.12 at 1:29 am

“We’re getting married and need a house.”
“We’re planning on having a baby and need a house.”

I’ve heard these reasons (excuses) many times used to buy a house even thought it defies all logic.

Are we in a housing bubble? We really need to question that when we know all the facts? the stats?

Oh, boy…we are in for one hell of a show in Canada!

#93 VICTORIA TEA PARTY on 06.04.12 at 1:40 am

#47 safetypup


My version of investor distress is lending the US government my money in exchange for a 10-year bond giving me 1.45 per cent interest.

That is a lousy deal in reality, thanks to inflation; and then what happens should bonds crater and yields explode north? What happens to my 1.45 per cent bet then, eh?

Low bond yields’ effects, according to London Telegraph columnist Ambrose Evans-Pritchard, for Europe and us are explained here, in this big picture:

“…The warnings from the bond markets could hardly be clearer. German 10-year Bund yields closed at 1.17pc. The two-year notes turned negative. British Gilts closed at 1.53pc, the lowest in 300 years. US Treasuries fell to 1.45pc, lower than at any time during the Great Depression.

The debt markets are pricing in for a global deflationary bust (depression). Europe will have to restore shattered trust in the worst possible circumstances…”

So it’s fear, more than greed, that renders unto “Bond-land” what WAS lenders’ loot, and will one day come back to those aforementioned lenders, as belly-button lint, metaphorically-speaking, of course.

Meanwhile the Bank for International Settlements, the international “bank-of-and-for-banks’-financial-interests”, reports that interbank lending is now at its lowest point since before the Lehman’s 2008 collapse, which brought on this current mess! Most of the damage has been in, and to, Europe. Mais oui! That is seriously bad news.

Oh, boy! So low bond yields and banks sitting on their cash. As if that’s not bad enough, for us here on the home front there’s more dross:

What happens to Canada’s economy, over the next few months starting now, as our vaunted never-declines real estate market continues to do just that.

The collateral damage will be fantastic, not nice fantastic, but horrible fantastic.

The economic dislocation to be suffered by thousands of skilled tradesmen, home suppliers and yes, even the lowly and arrogant real estate cohort, will be magnified throughout our economic as job losses pile up and tax revenues decline.

Remember that this “industry” represents 28 per cent of our economic activity. So, will we wind up like “they” did in the US, and are still “doing”, as a matter of fact?

Tying it altogether one gets the impression that all is not well at all.

#94 NormallySilentJeff on 06.04.12 at 2:06 am

The wife and I went to Ikea in Coquitlam BC today. We have never been there before and will never go back (building is like a one way street. Enter, follow ridiculous map that winds through the entire store, with no way out unless you finish. No way to shortcut, no way to go back.)

The trip was not without its charm, however. All the customers seemed to be house horny young adults and at one point a young couple in front of us stopped at a bedroom furniture display and started making out. I started to laugh. It was just like reading one of Garth’s columns :). I doubt any of the people in the building had any actual money and were achieving orgasm with their credit cards.

Like the seasoned (wrinkly?) readers of your blog that we are, we finished the map and burst into the sunlight and rationality of the outdoors. We snickered all the way home to our rental apartment….

#95 Aussie Roy on 06.04.12 at 2:33 am

Aussie Headlines

GLOBAL ratings agency Moody’s says the Australian housing market is still significantly overvalued despite a 7 per cent slide in prices over the past two years.

And Moody’s says the resilience of Australia’s debt-bloated household balance sheets has never been truly tested since house prices accelerated.

The agency has warned it is considering cutting its credit rating on three of the leading Australian businesses that provide mortgage insurance.

Economists are surprised?, let me guess they will also be surprised when they realise we have a house price bubble.

Economists have expressed surprise at suggestions Australia’s AAA-credit rating is under threat, pointing out the level of borrowings are significantly below other top rated countries.

The comments follow weekend reports that ratings agency Standard & Poor’s has said Australia’s sovereign AAA rating could be at risk if the government turned its back on plans to return the budget to surplus if the global environment deteriorates.

Of course all we hear is Australian mortgage standards are high and no sub prime here – LOL.

Struggling homeowners may be allowed to walk away from their mortgages as major financial institutions face a number of court cases over alleged improper lending practises, according to a report by The Australian.

In several states, courts have sided with homeowners who defaulted on their loans and have extinguished their mortgages.

An investigation by The Australian found that a number of mortgage providers and brokers engaged in improper lending practices leading up to the global financial crisis to secure “low-doc” loans.

Free subscription required

Economic jitters continued to reverberate around the world yesterday with Australia not immune to the pain being felt globally.

The Australian dollar sank to its lowest point against the US dollar in almost eight months, hitting 96.34 US cents at the end of five weeks of straight losses against the greenback.

It was also grim news for Australian shares, which suffered their biggest losses in two years last month, shedding about 7.3 per cent or about $100 billion.

#96 Aussie Roy on 06.04.12 at 2:35 am

Aussie Headlines


Finance industry giants are spending millions of dollars on legal fees fighting homeowners who have successfully exited their mortgages because they were stung by sub-prime-style lending practices during the last property boom. An investigation by The Australian has revealed several mortgage providers and mortgage brokers engaged in improper lending practices in the years before the global financial crisis hit in 2008, including inflating borrowers’ income and ability to repay debts to secure so-called “low-doc” loans.


Courts in several states have sided with homeowners who have defaulted on their loans, extinguishing their mortgages. The rulings have encouraged other lenders to reach settlements with borrowers that are saving homeowners hundreds of thousands of dollars. And the issue could be tested in the High Court in coming months.

#97 TimV on 06.04.12 at 2:44 am

Luke – I can only relate my experience : baby number 1 tooka year more than expected, and baby number 2 was just unexpected. Along the way, we discovered that what we wanted from our house was not a fancy new kitchen and finished basement with hardwood floors (you will cringe when your just-walking baby falls on the hardwood). We have friends with a baby – the surprise for them was that mummy realized she really wanted to be able to stay home (ie, loss of 2nd income). Life may have surprises. Just know that…

#98 jay on 06.04.12 at 2:46 am

#79 and #80, yes and yes.

Given the number of divorces in starter marriages, a pleasant rental for a few years is not at all a bad idea. (And do you really need a baby Y1 of the marriage?)

Victoria is in an interesting place: if you price your house reasonably and it is less than 1m you have a shot at selling it. Price aggressively and you will become very lonely.

On the Dog Walk Index (DWI) through Canada’s leafiest suburb, the major action is houses being taken off the market after the ritual 90 days. And, of course, optimists with glimpse views coming on the market. Overall the neighbourhood is about 25% of 200 houses either for sale or recently for sale but pulled. You can do the math at 1.5 a house that a 75m inventory.

The less leafy burbs and up island are melting. No doubt there are lots of prairie folk and Ontario boomers who want to get out of the snow – but try selling a house in Waterloo or Red Deer these days.

The over all market is certainly correcting – FB did not help, nor does Greece, Spain, Italy or Mrs. Merkel.

The slaughter has been worst in Canadian junior explorers. Full on 2008/2009. Blood in the Streets which, famously, is when the smart money looks to buy.

#99 kansai92 on 06.04.12 at 2:50 am

This is stupid, I thought only chicks have nesting issues. Luke, if that is your real name, grow a set… or better yet buy a set (the ones you hang off your pickup truck). For the love of dog, wifey and I have been renting since 2008 and we have two kids. You r not even married yet. We have absolutely zero desire to buy in the near future. Meanwhile we build our portfolio and wait on the sidelines.

#100 Dadandson on 06.04.12 at 3:10 am

So I put in a Wanted ad for a new rental apartment (I’m pretty happy where I am but would like another room as an office). In a little while I received the email message below. I thought folks here would get a kick out of it.

“I noticed that you are looking for a place to rent. Have you thought about or tried to buy a home in the past? I have been able to help many (both families and single individuals with credit ranging from good to bad) buy a home in the same monthly payment range they were previously renting for. In addition, we have zero down payment options for those that may not have a full down payment saved up.

If you’re interested at looking into the possibility of buying a home rather than renting, let me know and I’d be happy to discuss a few options with you!


R** H** Director of Mortgage Operations”

#101 dangeresque2 on 06.04.12 at 3:14 am

Luke, I facepalmed when I started to read that second paragraph of yours…

I bought in Edmonton during a peak and it’s been flat ever since here. I just sold and got out and although it’s cost me thousands and yet gotten me nowhere… The financial, personal and psychological lessons are priceless. I’m now renting a nicer place for less than half the price!

I’ll tell you something, you are probably like me back then – it’s impossible to really “hear” the advice of others until you experience it yourself. Your situation sounds like a

var luke = new Situation().KeepUpWith((theJoneses)inLaws);
which of course throws a BudgetOverflowException every time.

(Hey furst is writing poems, I’m writing programs!)

I’ve learned some valuable lessons and you will too, and the only way for you to do that is for you to go ahead and buy, to live it out, and to then live and learn through it. Good luck!

ps. there was a line up outside that condo sales center on 104 ave. here yesterday – ridiculous.

Garth, great blog, keep up the good work!

#102 Tony on 06.04.12 at 3:31 am

Re: #54 Throwstone on 06.03.12 at 10:20 pm

Odds: greater than a million to one.

#103 Tony on 06.04.12 at 3:35 am

Re: #78 Saskatoon-Living on 06.03.12 at 11:36 pm

Just tell your buddy to leave the keys in the door for the bank.

#104 Mr Buyer on 06.04.12 at 3:42 am

#10 Don’t Believe The Hype on 06.03.12 at 8:45 pm
$60K in savings and would instead want to drop it on a piece of real estate that might be worth less for probably the next 10 years.
I just want to highlight how unlikely it is that bubble prices will ever be attained again. EVER.

#105 daystar on 06.04.12 at 3:51 am

Hi Luke.

You dreamed a little, had some plan talk and thats ok Luke, but its time to come back to reality. Its sober second thought time. You wanna know what breaks up most marriages? Money. The stress of losing it, the stress of not having it, the stigma of being a “loser” if you lose it… do you really want to heap these pressures on yourself with a marriage at its infancy? Men provide right? Well, provide security by preserving your wealth, not risking it all on an illiquid asset at edge of a cliff. Its time to start talking like a winner.

Chances are north of fifty that an investment in RE will wipe away your equity and then some in the not too distant future. Do you really want to go there? Sometimes the hardest thing to do with the ones you love is to say no to them and give them direction when they think they know the way, but don’t. You’ve got to take control of this and it begins here… now. Bounce these words of her if need be. This could be your first real test with her.

The ideology of ownership could very well be her hangup so you’ve got to turn it around, make renting popular. Its cheaper, its non commital, housing is in a bubble, buy low sell high, you won’t have to wait forever, there are plenty of really good reasons for not buying RE right now but what tops them all is, its a money loser and you have to be strong with this. Winners avoid losses and are patient with gains. Be that guy and tell it like it is.

Sell the negatives to the status of owning… but own what? The taxes and fees, the reno costs, the neighbors and house quirks you can’t move from… you buy a mortgage, what do you own? Debt. You buy the house, how much of it do you really own? Try the downpayment that can disappear in this market in a hurry and then some, leaving you owning nothing. Jobs change forcing you to relocate and try to sell a house in a market downturn, equity turns negative and wipes out your savings. The U.S. is full of people who have gone through this over the last 5 years, Canada is next.

If the marriage fails, are you prepared to take a total loss? If the marriage succeeds, are you prepared to take a total loss? For what, the concept of ownership… owning debt? Owning a mortgage? Owning a house that sucks your equity dry because you bought high and will likely sell low? You love her, right? Want to protect her from all the worlds dangers, right? Even from herself if need be so… why stop now? Its man up time and you aren’t alone so take her concept and status of ownership and so called security and turn it on its head with pure logic. If she’s not logical and controlling over “ownership issues” then you’ve got bigger problems my friend. Best to know them now and if they don’t exist, you get to the man thats saves the day ;)

#106 Superman on 06.04.12 at 4:50 am

If Vancouver is down 12% YOY, you can only imagine how bad Kelowna, Abbotsford, Kamloops and Victoria are. Nothing is moving or selling in Kamloops, it is dead up there. And Abbotsford still hasn’t recovered from 2008.

#107 Canuck Abroad on 06.04.12 at 5:08 am

Luke, Dan in Victoria (79) has the right idea but it is actually much worse than that. The strain of more hours, two jobs, maxxed credit cards is just the beginning.

Fast forward 10 years. You and the wife are finding the stress unbearable. That gift, from the in-laws? Becomes a ball and chain, as every time you and the wife disagree on anything she scurries off to daddy to complain and he quickly reminds you “who paid for the house”.

Her face is lined, hair greying, and she’s packed on 10 or 20 kilos from three kids and comfort eating. Your sex life is over – you’re just too tired from all the work and stress, and frankly your wife’s just not that hot anymore. You start to drink to fill the evenings. Then the days. The work dries up then drops off completely. Wife files for divorce. Suddenly the gift from the in-laws is a loan, with interest, because you were not smart enough to get it is writing.

You try to sell the house but can’t raise enough to clear all your debts. You file for bankruptcy. The kids get to live in that rental apartment after all. They hate you because you ruined the family finances, and you are a drunk. They refuse to see you. You retreat to another part of the country, broke and broken to start all over.

This is why you should not buy a house now.

You’re welcome.

#108 Deb on 06.04.12 at 6:02 am

It was important to point out that the media will primarily report on events which have already happened. In other words, there is really very little new in ‘the news’ and even less if you are seeking concrete, objective analysis of ideas.
The power of the MSM lies in its attempt to validate particular trends or perceptions which serve its interests, thereby contributing to mass acceptance through changes in sentiment. No news here, as this has been going on for centuries now, and it is as effective in the area of real estate market activity as it is for the selling of deodorant or political agendas.

#109 Ex-Cowtown on 06.04.12 at 7:10 am

#108 Canuck Abroad ‘s Advice to Luke on why not to buy a house now:

….. You file for bankruptcy. The kids get to live in that rental apartment after all. They hate you because you ruined the family finances, and you are a drunk. They refuse to see you. You retreat to another part of the country, broke and broken to start all over.

This is why you should not buy a house now.


Canuck Abroad: you are such a cheery, sparklie, glass half full kinda guy. Makes me just happy to write this!

But seriously, Luke… CA is correct. The largest and most divisive issues you’ll likely face in your marriage (barring either you or your wife playing hide the stick with someone else) will be financial problems.

Life is tough enough…it’s even tougher when you’re constantly broke. You know that feeling of security and freedom that you have right now with $50K or so in the bank? I will guarantee that if you buy a house today it will be the last day you feel like that. Maybe ever.

You know what the new status symbol in the U.S. is? I heard it on U.S. radio today. It isn’t a new car, graite countertops or a big house. People are bragging that they don’t owe any money. Seriously. To hell with the toys, they now understand the peace of mind that comes from having a few $$ in the bank and no one there trying to take it away from you.

Wait a year or so. It’ll be the best year of your life. Stay out of the market. Housing prices fall, your fiancee will look at you like you are magic because you saw this coming. And if she doesn’t, get a different fiancee. It’s cheap now to trade her in. Later? Not so much.

There ain’t a woman made worth committing financial suicide over.

#110 Regan on 06.04.12 at 8:01 am

What’s with the ‘be a man’ gender police around here? Look, money is the #1 source of disagreement in a marriage – it matters how you discuss and resolve this in your relationship. Be respectful, state your case and try to listen to hers. Why does she want to own a house before even trying to get pregnant? If it’s about family pressure, then help her stand up to it. If it’s security, find other ways to provide it. It’s not the kids, but maybe she can’t see that. I felt like I had to run a marathon before I got pregnant. A friend felt like he had to win an award at work. It’s worth discussing how these ideas get planted and affect how we approach parenting. But my youngest is 4 and just now stretching their legs enough to make me think a little suburban spread would be nice around now (until they are 13 and bored stupid and spend their time getting drunk and having sex because there’s nothing else to do, so I kind of want a 9 year suburban hiatus actually). So, some more arguments for you: an absolute no on borrowing from the in-laws. A married couple should be able to stand on their own. Buy later, when you can afford a bigger and dreamier home. Keep saving so she can spend quality time with the kids while they’re young. Stay/move to an urban setting that provides drop-in centres and activities instead of isolation, esp. while the kids are preverbal. Rent a condo on the Danforth where you can sign on for mom and baby yoga classes. Wait to buy until you’ve had all the kids you’re going to have, so you know how many bedrooms to get. So you think you’ve got that planned, what if twins arrive? You’re going to want to nest anyway, so buy when the baby’s on the way and re-decorate then. What if you have problems getting pregnant and need that $20K for fertility treatments? Or should stay close to hospitals for a special needs child. C’mon, parenting is full of impossible worries – there’s got to be a few to give her pause and see why it’s prudent to err on the side of caution. And if she isn’t listening to you, or seeing why you want to exercise caution, and can’t respect your point of view or accept a compromise, then you’ve got a bona fide marital issue emerging and you might want to get counselling before taking the final leap. Better to know now than later.

#111 OttawaRenter on 06.04.12 at 8:05 am

Real men say no, Luke.



#112 Steve on 06.04.12 at 8:11 am

Driving through Richmond Hill this weekend I was amazed at the number of signs on the street corners steering people towards open houses – it was like an epidemic…and houses here still sell in just a few weeks.

Driving through Markham, the monster balloons on the penant covered tethers were towering in clusters over the new home sales centers. We all saw the frenzy that was orchestrated at North Unionville…complete with circus tents.

When people are screaming this loud to get your attention, it means there is a loss of interest on the part of buyers. We are at the end of Phase 1, entering Phase 2 in these neighbourhoods. In the words of our host: This will not end well.

#113 Gypsy Kid on 06.04.12 at 8:24 am

Wow…do young people these days like being tied down to a house like that???
Luke, live a little. Why would you want to start off your married life with a $400 000 debt?
I guess you’re in-laws will help out again when the kids arrive, but I tell you…kids are EXPENSIVE! You will be living in debt and stress for a long long time. Or you’ll live indebted to in-laws.
Marriage and kids are stressful enough without mounting bills. Do your marriage a favour and RETHINK!!

#114 Steve on 06.04.12 at 8:24 am

Luke, contact Garth now, and get a Growacet prescription ASAP! You need this today, before you sign anything !!!

You seem like you are at least 1/2 bright (you read this blog, you cried out for help) so listen to the answers. Your fiance seems to like you, hopefully the way you are, so don’t go changing to try and please her (and her parents).

1) Never buy something you cannot afford. If you are getting big$$ from in-laws to buy this house, then you cannot afford it. The time to buy is NOT NOW, but in the future, when you can better afford it.

2) The money from your in-laws will be your debt, and it never gets less, even if your house drops to 50% of value. You take on ALL THE RISK, so don’t do it. The time to buy is NOT NOW, but in the future, when the in-laws can give the money to their daughter, not loan it.

3) RE is crashing, so no need to rush in. Wait a year, and pay less, 2 years and pay less again. The time to buy is NOT NOW, but in the future, once prices have dropped.
4) Buying a house together with someone before you are married is HIGH RISK. The time to buy is NOT NOW, but in the future, when you are married.

If you won’t listen to the rest of us, then at least heed Garth’s a) through g) and save yourself, your relationship, your future.

Good Luck – we hope to hear someday how well it turns out for you.

#115 tony w on 06.04.12 at 8:24 am

re: 15 The Great American –

Investors have walked away from 15 – 20% deposits before on new condos. It all depends on the value/capital gain or loss pending and rental market scenario at closing.
If the law of supply and demand rules, watch out!

#116 Mr. Lahey, Organizer of the FASTPGFBDCparty on 06.04.12 at 8:31 am

#43 Fust

“A poem by Furst…”

The multi talented Furst shows another skill, poem writing! Well you will not only be introducing the guest speakers at the SASTPGFBDCParty but we will have you recite some of your poems as well! Bubbles, Ricky and Randy and the rest of the Sunnyvale gang can’t wait for more poetic gems!

#117 Mr Buyer on 06.04.12 at 8:35 am

#76 MarcFromOttawa on 06.03.12 at 11:32 pm
Due to the cutbacks in the civil service Garth had predicted that prices in the Ottawa region would be affected significantly. Now Ottawa is not even on the bubblicious list.
The bubble is country wide. The CRASH will be country wide as well but how am I supposed to know.

#118 Nubbers on 06.04.12 at 8:36 am

Luke (and anyone else in the same boat), a long time ago in a land far far away (UK, 1990), I bought a small apartment with my then girlfriend in the same phase of another house price bubble.

I had a feeling that it might be a bad time to buy, but I was met with a flood of tears every time I mentioned this (if we don’t buy now we will never be able to!). Eventually I caved in and we bought for 61K GBP in a previously cheap neighbourhood that had become more expensive.

Fast forward 2 years – I am on my own with 100% of the mortgage, the bubble has popped, and I want to move out of the area, which by now had reverted to being the dung hole that it always was. I ask one of the few remaining RE agents in the area how much I could sell for. He says about 27-29K.

I had negative equity of TWICE my take home income (~15K). I could not sell up because I would end up paying more on the remainder that was not secured against a house. Totally shafted in my prime and not exactly a great prospect for anyone else.

Luke, stay ahead of the game and wait for the crash.

#119 John on 06.04.12 at 8:39 am

After close to three months following and enjoying this blog, the articles pretty much enter like a foto now.  But always in the background there’s this shadowy 2.5 meter  
Sasquatch with size 18 shoes whizzing by.   I mean, no way right? That’s all 1970’s bad trick photography right?

It’s hard to believe that the Sasquatch exists.  Almost nobody does.   But years ago I remember it used to be fun to play out the myth…amidst lots of bad, fraudulent 70’s photos. 

I used to see the so-called “doomers” like our hairy BC forest-dweller.   But a 2.5 meter hairy man with big feet now appears to be sitting in everyone’s livingroom, real time.

Consider today’s article:
” asset prices unsupported by economic fundamentals will collapse.”

That’s certainly true.  Aren’t international “economic” fundamentals much like the 2.5 meter beast in a psuedo bear costume, jumping up and down on the dining room table?

I mean…how real is that anyway?

Luke? He’s likely to fold likely a house of cards when presented with the acidic fruit of Canadian culture that goes like this:

“Garth, I love your info and hard work, but I’m offended by your blog T&A”.

Don’t think this is the housing bubble international plug-in? You bet your bippy it is ( wow…phrases like “bet your bippy” make me cringe..but if T&A are evil…)

Luke “uses facebook a lot”, and might soon be writing “we’re pregnant”….

It’s an entire belief system of no identity, based on SEVERE codependency. What does codepedency attack first in a social system? Gender. And being a man is evil in Canada.

Think that’s absurd? Exaggerated? Ask hairy man on the table.

Goldman Sachs et al made it into the livingroom of Canadian homes. A laydown hand when the man has no identity and no boundaries and no NO.

Elephants in the livingroom unseen is an old metaphor. The update is a bit more dangerous.

Could you please be a little more obtuse? Thanks. — Garth

#120 Market Bull on 06.04.12 at 8:41 am

Speaking about Bulls to Bitches:

“The potential for a market capitulation in this period is high, and if we are correct in this view, we fully expect co-ordinated money printing from the major central banks towards the end of June.”

Stewart Richardson, chief investment officer at RMG Wealth Management.

There will be no market capitulation. You believe this? — Garth

#121 Halifornia on 06.04.12 at 8:50 am

Sounds like the Economist is long gold. Print baby print!

The article does not mention it. — Garth

#122 earlybird on 06.04.12 at 8:52 am

Omg Canuck Abroad (108) ….hilarious comment!!
Like they say ‘the leading cause of divorce is marriage’ Real Estate is heavily leveraged, losses are greatly amplified! You say your nervous about buying at the top of the market….enough said….think about that statement objectively!

#123 Toronto_CA on 06.04.12 at 8:56 am

“Garth. I find these real life stories that you write about hard to believe. A guy like Luke can see the reality of it all and he still wants to jump into the frying pan. ”

This is the problem, that so far–at least in the godless GTA–Garth hasn’t been right. Anyone who bought a few years ago has seen appreciation in their property, perhaps even enough to pay for the transaction costs and break even or come ahead. So far. Until the prices stop rising 10% year over year in the GTA, even people who believe Garth’s predictions will have doubts in the back of their mind. It must be awesome to be following Garth and live in Vancouver right now and see the bubble bursting.

What irks me most of all is how the slime of the earth (real estate agents, and my whole family is all realt-whores) are profiting so much from this disgusting bubble.

#124 Farmer Fred on 06.04.12 at 9:00 am

#30 Zeeman

“I am noticing slowdown in markharm, and stoufville. ”

Well maybe the MarkHAMites and Stoufvillians have read Jeff Rubin’s book Why Your World Is About to Get A Whole Lot Smaller and realize that these areas will be converted back to farmland in the not to distant future and want out while it is still possible…

#125 refinow on 06.04.12 at 9:01 am

I got it !!!

Luke’s soon to be Mother in law is a Real Estate Agent, and she is double ending the maple listing..

#126 Hoser on 06.04.12 at 9:04 am

Don’t do it, Luke. It will be the biggest mistake of your life.

Buying the house is a bad idea too.

#127 Harry Palms on 06.04.12 at 9:05 am

Lets assume this poor guy really would be happiest playing house in a pressboard nu-build in Maple.

What do these bad boys rent for?

A quick search of kijiji says $2 to $3K per month.

Geez, I’d hate to throw all that money away on rent, but it sure would be nice to not have a 30 year bank sentence, a fat tax bill, and especially not have to fix shit every weekend……

With cost of living @ about half, renters totally win in this market. Would have been among their ranks myself if not for a conditional ‘gift’ towards a downpayment from my parents…….but that was also many years ago, when the premium to own was far less than today!

#128 In GARTH ALMIGHTY not God we Trust on 06.04.12 at 9:11 am

#78 Saskatoon Living

“When are the prices going to drop here Garth?”

Well SL, it is nice to see you believe that the bearded mystic oracle, all knowing, all wise, former minister of national revenues, denouncer and fierce opponent of all parliamentarian peckerheads and peckerettes, lone voice of reason crying out in the heloc infested wasteland of Canada would know the exact moment of a crash in the great metropolis of Saskatoon. While the bearded mystic sage who writes this pathetic blog (his words not mine) is a great visionary, knowing a precise time frame to Saskatoon’s real estate market tanking would even exceed his financial tea leaf reading abilities.

#129 DonDWest on 06.04.12 at 9:17 am

#95 NormallySilentJeff

There are young people in Coquitlam? Are you sure you’re not an aging boomer that sees someone at age 45 as young?

#130 CrowdedElevatorfartz on 06.04.12 at 9:17 am

You seem to want us to justify a “pressured” descision for you to cave in and buy.
If you’ve been reading this blog for a year you know whats coming.

Let your InLaws and soon to be wife bitch moan and scream all they want…. wait it out.
And if a mortgage( because thats what your getting until the house is paid off 25-30 years hence) is how they measure a “man” .
Then perhaps thats a great indicator that you should run , very fast, in the opposite direction.

#131 Karie on 06.04.12 at 9:30 am

@67 Van Grl –
I am talking about Luke’s situation. Many young couples in love and wanting to get married and start a family also want to buy a home and nest. You might think this is stereotypical but I call it reality.

I took Women’s Studies in university, I have travelled extensively , I backpacked around Europe twice (once when I was even a homeowner), I had a 2 year visa to work in England. The thing is people change all the time and some people don’t change at all. It may annoy you that some think all women want to get married, buy a house in the suburbs and have kids but the truth is there are some that don’t want that but very many who do. Garth talks about horny young couples that want to buy all the time because it is so common. People have seen it in many of their friends, neighbours and relatives so that’s why it is a common reference.

I read somewhere that single women are the highest demographic for buying new homes. I don’t know if that is about nesting, an investment or something else.

#132 JW on 06.04.12 at 9:44 am

Luke! you are doing well, but keep it that way my friend. In debt to the in laws? Bad, bad idea. Save, save and wait. Get married first for petes sakes. Take the in-laws up on a hugely generous wedding gift, but not a loan.

Starting a family? Move up to renting a 2 bed if you must, but wait it out – this is not the time to buy.

#133 Davey Boy on 06.04.12 at 10:03 am

#108 Canuck Abroad

100% spot on, unfortunately we all think it will be different in our case and this only happens to others.

#134 GTA realtors in a Panic on 06.04.12 at 10:11 am

GTA realtors are now seeing a BC style crash developing and they are here posting on garths blog in a PANIC! Why else would realtors spend their days and nights on if the RE market wasn`t in a weak and dire situation. RE deals are falling through as people can not qualify and the new rules haven`t even taken effect. When this housing crash takes full hold like it has in BC prices will drop fast. BC is now down $120K or 12% in less then three month and they continue to fall. Get out of the housing market if you are still in or sit back and watch it crash back down to NORMAL`HISTORICAL levels 3-3.5 times income vs current 7-8.5 times income. Housing needs to crash 50% plus.

#135 debtified on 06.04.12 at 10:13 am

Luke, which one is more important to you: Your Money or Your Woman?

All the best!

#136 veteren trader on 06.04.12 at 10:14 am

Hey market bull, every time you open your mouth it becomes more obvious of your ignorance to certain market realities. Markets need people like you. We embrace you. You are as Garth has warned “the greater fool”

#137 The American on 06.04.12 at 10:14 am

HDJ, you’re absolutely right. The difference is that actually the Canadian financial institutions in Canada are perhaps even worse in way of proper regulation, unethical mortgage and investment practices. Here’s why… the government in Canada is completely in bed with the banks and vice versa. This creates a scenario where the fox is guarding the henhouse. It creates a situation that allows for easier manipulation of the masses and easier spewing of b.s. propaganda to the Canadian public. And this is precisely what has gone on far longer than should be the case. The public there sure has bought it, hook, line, and sinker. This is itself makes the Canadian banking system unethical by nature as there is very little separation between the hand and the arm. You just don’t know it yet. The Canadian real estate meltdown is going to be worse than what happened in the U.S. Mark those words, please. It will only be at that time when Canadians comprehend your banks, media, and government have misbehaved far more egregiously than what was seen here originally. There is not a single statistic that does not indicate the melt/collapse in Canadian real estate prices will not ensue.
1. Canadian household debt exceeds American house hold debt, per capita
2. Rates are low… WHO CARES. That won’t save a thing. And, rates are going to eventually rise.
3. Household affordability as a ratio to income is much worse off there than what was ever seen in the U.S.
4. Your banks are actually hedging against the people… hence the CMHC’s formation
5. The amount of shadow inventory in Canada is believed to be nearly 35%-40% HIGHER than what was ever seen in the U.S. This is probably a good reason why so many towers are in Toronto and Vancouver and all the lights are turned off in the evening throughout the units.
6. Think Canada didn’t have a bank bail out???? Think again… Recently, the CCPA has issued a report stating otherwise. The Canadian bailout was significantly greater than the bailouts in the U.S., relative to population.
7. Population/immigration growth in Canada does not support the volume of housing units built and being built
8. Canada is now at the top of the IMF shit list. What once was viewed as a beacon of light (your banking system) is/has quickly been shifting to people scratching their heads and questioning the validity of previous claims of soundness. People in authoritative roles are now taking note and recognizing this has been perhaps one of the greatest snow jobs in the G20 and the ponzi scheme is ending soon.
9. Transparency is lacking in the U.S. banking system, without question. However, it is no surprise that transparency in the U.S. is still one of the best, if not THE best, of all in the G20. Because Canada has adopted a methodology of bank business where the fox guards the henhouse, transparency to the masses is laughable. You won’t know how bad it is until it is too late. You don’t know what you don’t know. Sorry, but this is just the way it is.
10. Statistically, recourse vs. non-recourse states in the U.S. have very little difference in the percentage of people who “walked” vs. the people who stayed and paid, relative to mortgage debt load. The argument that recourse loans create an environment where people will be incentivized to do the right thing is moot. If you don’t have money to pay, then you don’t have money to pay. One job loss begets another and another. It is much like a house of cards. Another old term is, you cannot squeeze blood from a turnip.

#138 Dupcheck on 06.04.12 at 10:17 am

This is why the market has not tanked in Canada yet. People here have a thing with real estate no matter what the conditions are. We need a lot more help to really get it. Boomers still have a strong influence towards the young people’s minds, ahhh those boomers. Also government has to step in otherwise Canadians do not really get it.

#139 2centsCanadian on 06.04.12 at 10:24 am

FINALLY!! …. A solution to your debt problems.

#140 X on 06.04.12 at 10:24 am

#141 timbo on 06.04.12 at 10:27 am

“Factory orders fell 0.6% in April, which is way worse than the 0.2% growth anticipated.
Last month was revised to a decline of 2.1% from a decline of -1.5%.
And ext-transport, the decline was a solid 1.1%.”

wages that do not keep up with inflation will do that to you……….

“But to put the devastation of Japan’s stock market into context for you, here are some numbers.

The Nikkei peaked at about 39,000 in 1989. Now, 28 years later, it’s trading at 8,296, down 80%.

The Dow peaked at 12,000 in 2000.

If the Dow performs from that level the way Japan has performed from its 1989 peak, the Dow will close at 2,400 in 2027. That’s down about 80% from today’s level.”

You want to talk about extreme………

#142 blase on 06.04.12 at 10:31 am

Hey Regan,

Haven’t you noticed that women love to use the “be a man” line when they are trying to play the male ego against itself? Let’s deal with reality, not wishful-feminist thinking. Gender roles are here to stay. Women don’t want men to be women, and trust me, men don’t want women to go have a beer with and talk football.

Canada would be a lot better off if men would lose the murses and women would lose the tats. Enough with the gender-neutering please.

#143 blase on 06.04.12 at 10:35 am

Oh, and Luke, the worst thing you can do is having a baby in the first three years of marriage. You need those years to travel, bond, and chill out on the weekends together.

You also may find that you aren’t meant for each other, and can easily walk away from the marriage. Hard to do with a little one or two running around.

Ever consider why she’s so set on having kids so quick? I find the faster she wants to get married and have kids, the more insecure/desperate she is. That’s not a great kind of women to be marrying. She may be marrying you for all the wrong reasons if she’s desperate. Just saying.

#144 DonDWest on 06.04.12 at 10:42 am

#85 HDJ

The stages of denial:

1) Hysteria: Buy now or be priced out forever! Real estate will reach 3 million for the average bungalow by 2015!

2) Ignoring: People begin to socially isolate renters. They refuse to invite them to parties and parents advise their precious little darling daughters not to date/marry renters.

3) Mockery: Renters are subjected to mockery. “Renting is throwing away money,” “renters are poor people who can’t afford a downpayment,” “renters are afraid of commitment,” etc. People who don’t buy real estate are mocked in general as complete losers.

4) Downplaying: See HDJ at post #85. “Yes, it’s a bubble, but not as bad as the United States.” “It will be a soft landing.” “The Canadian housing market isn’t a bubble, it’s a baloon.”

5) Stubborness: MY Willowdale bungalow is worth a million. “I can’t sell my house what it’s worth!” “I’ve been trying to sell my house for 2 years, I’ve even reduced the price a whooping 10K off every month. It’s now listed for just under a million, why can’t I sell?” “You’ll have to take me out in a gurney before I would ever sell my house! I’ll eat cat food all the way into retirement if I have to!”

6) Blame: It’s the banks fault! It’s the government’s fault! It’s those darn renters fault for posting on greaterfool!

7) Entitlement: Dear government, who I previously blamed for all my woes, can you help me? Tax those damn renters, tax them to death! I deserve a house!

8) Crying: What do you mean I don’t deserve a million dollar valued bungalow with instant HELOCS?! What do you mean you’re taking away my OAS? Why must I pay back all my debts? Wahhhhhhhh!

9) Defeat, but shifting responsibility: Ok, you win, I lose. People who thought like me messed up the entire nation, but hopefully you young people can clean up my mess. . .

10) Enlightening defeat: You’re telling me that I’m responsible for my own actions?

#145 Mark on 06.04.12 at 11:11 am

Go for it Luke !!!!!!
Are you nuts …….. Havn’t you been paying attention.
Wait 6 months and then analize your situation.

#146 W. Buffett (Willy) on 06.04.12 at 11:11 am

@122 Halifornia

“Sounds like the Economist is long gold. Print baby print!”

For all the gold huggers on this blog, here is what Charlie Munger, Warren Buffett’s partner has to say about gold: ” I think civilized people don’t buy gold. They invest in productive businesses.”

#147 Kenny Banya on 06.04.12 at 11:22 am

low hanging fruit… bonds yield <2%, dividends are about the same for many stocks… or you can reno your kitchen and get 78% return.

Luke, obviously the sentiment here will be against buying, but the important thing to remember is that there are mini-markets within markets. Maple is not going to hold up well for a million reasons – distance from center, quality of construction, car-dependent, lack of transit, etc. If you have to buy (which you don't), at least get something disgustingly, preposterously overpriced in the city that will have some resale value if it goes south.

#148 Canadian Watchdog on 06.04.12 at 11:23 am

TD Report: Canadians say “yes to debt” to help finance life’s firsts:


ON: Ontarians say “I do” to debt to finance life firsts

BC: British Columbians least comfortable taking on debt to finance life’s firsts

AB: Albertans are comfortable taking on debt to pay for life’s milestones

#149 Toon Town Boomer on 06.04.12 at 11:23 am

#78 Saskatoon Living
Prices in Saskatoon will drop when buyers wake up and stop buying all the over priced homes that are making them house poor. C’mon are incomes here can’t support this market! Keep believing we are different and we will continue over paying. I know sellers can be stubborn , but so can buyers. No way,should it cost you an arm & leg to buy a home in this city.

#150 Houseless in Mississauga on 06.04.12 at 11:36 am

I sat my 3 and 5 year old kids down the other day and delivered the cold news: ” sorry children, this house is not ours….we are renters”. Surprise, surprise, they didn’t care one bit. All my kids know is that they live in a loving home and are well taken care of.

While pregnant with my second child, my nesting instincts really kicked into high gear. I desperately wanted to buy a house and I started dragging the reluctant hubby to open houses and searched the MLS listings for that perfect home to call our own. Our families got excited…after all, we had been living in a two bedroom apartment with our first born. Homeownership seemed like the natural next step, especially with a second baby on the way. Everybody was doing it. All our friends were buying, rates were cheap and we could even extend our mortgage over 35 years. The time seemed perfect…except living in the GTA meant RE prices were ridiculously high. Luckily, I found this blog and started reading it avidly. As a result, I called off the house-buying plans but didn’t give up my plans of moving into a house in a family friendly neighbourhood, with a fenced yard the kids could play in. That’s exactly what I got.

Fast-forward three years, we rent a three bedroom, fully detached 2 storey house, with a finished basement, fenced yard and a garage in a family friendly area in Mississauga. We don’t worry about snow removal and our grass gets magically trimmed by little elves sent by our landlord. We’ve had one house malfunction incident and all it took was a phone call to our landlord and he had someone here within the hour to fix it. The houses in our street start in the low $500’s…we pay $1600/month + utilities for ours…and we don’t need to have someone we don’t even like in the basement to afford it. The kids are happy and we are happy.

Luke, all I’m saying is you don’t need to own a house to be happily married and you certainly don’t need to own a house to start a family and raise happy kids. You don’t need to own a house to have a home.

#151 refinow on 06.04.12 at 11:38 am

Joys of being the husband..

Cave in, and buy a house and the bubble pops,now drops 40%, it will be your fault because you agreed to buy a house.

Wife is happy, family is happy, initially until the bubble pops.


Stand your ground continue renting, the bubble pops, houses drop 40%, then you buy a house.

Wife is upset, parents think your are stubborn cheap-skate initially….but then the Bubble pops, you are then held with high regard, wise choice to wait.


I always like to end on a high note.

#152 Sebee on 06.04.12 at 11:45 am

Luke, did you know that about 50% of marriages end up lasting forever?

You may also think that you want to be a father, but after you have a few kids you may realize that you really wanted to be an uncle.

#153 Luke on 06.04.12 at 11:47 am

This is for MR. Luke… I don’t usually give advise on this blog but since we share our names and I went through the same kind of situation few years ago, I would like to share with you my perspective on the situation from 5 or so years later based on my and my best friend’s perspective. I was in the same situation as you, I had a girl that WANTED a house “for the baby” full of nice kings (like staleness appliances, granite, etc, etc ), well I married her and the pressure of her and her parents was huge… buy buy buy buy.. every call, meeting, family gathering was about buying.. buying… it came to the point were I did not want to see or talk to them… and it looks like you are in the same point… now what ever I tell you from here on is based on personal experience and I know how difficult it is to go against the tide, when everyone (friends, family) around you is doing it, your family is telling you to do it… number one, if this girl is the kind of girl that does not understands what “earning it” or “financial responsibility” is, pack your bags, regardless of how cute, sexy, or how much you love her. She will wreak havoc over time in your life, destroying you financially, emotionally, and in every other imaginable way. You may ask why? It’s very simple, people like that were cared for by their parents, secluded from real life and simple concepts of action/reaction. They cause trouble, their parents always bail them out and as result they have never learned simple rules of life which you have to follow in order to succeed. It’s like trying to defy rules of gravity, as the old saying goes, if you try to break the rule, it will at the end break you. Same goes here, it starts nice and easy, I WANT a house for the baby, once you give in, it gets harder to get out, with each step, she gains more “power of over” you, and demands escalates, until you collapse, financially, emotionally, or in any other way.
My story, I was 27 years old at the time, in IT as well having good income, and just in the same situation, she wanted house, her parents wanted a house, I persuaded them to put it off for later. We rented for time being and got married, since we got married the I “want to buy a house” became daily. I said let’s wait and let’s see how life goes, I did not want to commit to a house. It got to the point that it was ridicules. So 1.5 years later she told me, either “we” buy a house or she is gone. Now my thinking was, if she is willing to do it now, I should let her go now before having a house, before having kids, before getting my self in a financial hole and I did. It was very hard, very frustrating, but compared to my friends 5 years later, it was nothing. Just simple divorce, no kids, no major assets, just simple divorce.

Now a story of my best friend who’s wife is just as my ex was, they were like sisters in most if not all aspects. We got married few months apart, and they just celebrated their 6 anniversary. He’s got a nice home (read mortgage up to his eyeballs), two cars (all on credit), and goes every year for a nice vacation (all on credit). His wife’s financial responsibility, lack of understanding how things work in this world, have driven him to a whole comparable to Grand Canyon in size, the scary part it, he him self does not see it. When they had their first baby, she came home after the first day of returning to work and told him that she does not want to go back to work because her baby will be left alone so she has to stay with him. No conversation, no planing, no nothing, just she “WANTED”. They had a second child now, the demands are just growing. I have seen him few months ago, this guy looked so pale from all the worries, problems he has to deal with that she initiated. Last week I found out he had a heart attack… 34 years old guy… can you imagine…. and the guts this girl has, she said to him that he works to much and it has to be his work and he needs to change jobs for more paying … but now that they have two kids, they need bigger house… she just does not get, it’s like the disconnect between earning and spending is so far apart that she cannot see that concept.

Another good friend of mine.. same story as above… wife that wants wants and wants some more… 3 kids… a house, one car.. again same situation..all on credit… he lost his job and could not find one for 4 months… but what happened 3 months into this? His “loving” wife through him out of the house because he did not buy her furniture she wanted because her friend got it and why should could not have it as well? Can you believe that? She does not see that , she only could see what she WANTS… when the guy was in his difficult moment, she did not care, just through him out like that and a week later said that she wants a divorce which was paid for by his credit card.

Another guy, ended up on disability due to the stress induced sickness, lost his home , executive job, everything went down the drain.

Another guy I know, good guy, church going, helping voluntarily, I’ve known him most of my life, ended up doing illegal things to support his income. Of course this only lasted a bit before he got arrested and lost all things in his life.

I’m not saying that I’m against marriage, or women, but what I’m highly against is people (men or women) that are irresponsible, selfish, and only concentrated to live off of someone else hard earned sweat, looking for someone else to pay for their things, someone who is not willing to take responsibility, those behavious in your own life or those who you choose to be with will eventually lead down a path that may end up destroying you and/or your life. DON’T do it Luke, if she cannot understand now that this is not a good idea, she will not understand it later and with each step you are getting deeper and there is more at stake. Buying or not buying a house is not your major issue, but perhaps having someone in your life that does not understand basic concepts of life which may make them unfit for adult life, for which you may end up paying for.

As for my own story, I have found an amazing, mature, and financially responsible woman that is a pleasure living with and at times it’s her who tells me that we should not spend on this or that… which i real pleasure hearing. I find that we are able to solve life’s problems much easier and smother, at times it’s pleasure facing those trouble that shows up as you know you can solve them together. I guess my last advise to you would be if you see that trouble that life brings bring you more closely, that is good but if any trouble ends up being only yours and she is not willing to take on any of the responsibility.. that will end up being very difficult for you over time and leave your burned out. So perhaps before looking at the house, take a close look at your relationship to figure out is she is able and fit to have an adult life with you before having that house. Good luck and stay smart, don’t get suckered !!

#154 malbadon on 06.04.12 at 11:55 am

I like how Lukes solution to renting a $1375 1 bedroom that is too small for kids was to buy a house, not look for a $1500 2 bedroom….

#155 Kenny Banya on 06.04.12 at 12:02 pm

let’s stop being so negative and get creative for Luke, how about a “wedding equalization payment” from the in-laws?–daughter-wants-wedding-equalization-payment

#156 Mixed Bag on 06.04.12 at 12:10 pm

Good Lord, Luke. At 67K per year, you have no business looking at a $500K+ house.

You’re not getting married until next year, so you don’t need to buy a house until next year, and a lot can happen to the market between now and then. Perhaps it will help if you convince your fiancee that the debt will also be hers, and if you were to split up, she would be responsible for half the debt.

Build up your down payment for another year. Hopefully you’ll get some nice wedding gifts to add to that down payment. Then go buy.

#157 pbrasseur on 06.04.12 at 12:10 pm

Garth –

Regarding yesterday’s post where you said the median net worth of households in Canada was $120,451 in 2005 (seems it was in 1999)

Here’s what I found[email protected]?iid=84

“Their median net worth was $148,350, 23.2% higher than in 1999”

How about that Credit Suisse number of $89,014, is that just as reliable?

Net worth would decline as debt increased. — Garth

#158 Tim in Ottawa on 06.04.12 at 12:20 pm

Luke’s email started out so promising, saying all the right things…and then he negates it all by saying he needs to buy because he’s getting married and wants to have a kid. What a gutless chump.

Borrowing from your in-laws (or your own parents) is a loser move, and in Luke’s situation, there is no reason to do it. They’ll criticize every move you make after they know that you’re indebted to them forever (and it will be forever).

Garth made the point: a baby doesn’t care if you own or rent, and he’s right.

Don’t be a dummy, Luke. Haven’t you learned anything here?

#159 Inglorious Investor on 06.04.12 at 12:22 pm

Uh, oh.

Our Minister of Finance is back to his old saw:
“Canadians can rest assured that our fiscal and economic fundamentals are solid…”

This is what he kept repeating throughout the crisis. Things must be worse than I thought.

Call it the Flaherty Index or the “FIX”:
To wit: The higher the frequency with which F makes this statement, the higher the risks of a severe downturn.

#160 daystar on 06.04.12 at 12:37 pm

#111 Regan on 06.04.12 at 8:01 am

Gender police? Nah its a guy thing, solicited advice. (it might be policing otherwise) While women are laid up with pregnancy and new found motherdom distractions, the guy really does have to man up and provide not just bucks but all the other forms of security (emotional, mental, beliefs) and key to it is how those forms are defined through communication as you eloquently state.

Smart women pre-assess their man’s abilities to handle such challenges long before full commitment towards marriage. Its time for him to rise to the challenge. Does it surprise you that other men would define it through “man up” expressions? (I too often see most of us get hung up on expressions actually, its how they are defined by their users as much if not moreso than their listeners that counts)

We didn’t make up the gender roles, here as you know. The woman nests, the guy provides. Btw, a woman deviates from the role a good mom is supposed to play from prenatal on and guess what you’ll sound like (if not verbally at least within your own mind depending on solicitations). Don’t misread me though, I liked the advice you gave just the same.

#161 pbrasseur on 06.04.12 at 12:37 pm

“Net worth would decline as debt increased.” — Garth

Thanks Garth, but I got that

What I’m saying is that you 2005 number of $120,451 for median net worth is wrong, the true number from Stat Can is $148,350.[email protected]?iid=84

Your point still valid, only even more…

My number came from StatsCan. — Garth

#162 Canadian Watchdog on 06.04.12 at 12:45 pm

The Australian: Subprime borrowers ‘let down by system’

“In many cases, mortgage brokers or other parties falsified loan application forms by substantially overstating a borrower’s income or employment status.”

#163 snotglue on 06.04.12 at 12:51 pm

BBC ponders CDN real estate bubble:

#164 cramar on 06.04.12 at 12:52 pm

So The Bridal Path is turning into a rust belt! LOL Get your rusty house for only $6.95 million! Noticed that David Bowie didn’t buy.

#165 timbo on 06.04.12 at 12:57 pm

“The latest example is the prison in Corinth where after the supply stoppage from the nearby military camp, the prisoners are at the mercy of God because, as reported by prison staff, not even one grain of rice has been left in their warehouses. When a few days earlier the commander of the camp announced to the prison management the transportation stoppage, citing lack of food supplies even for the soldiers, he shut down the last source of supply for 84 prisoners. The response of some Corinth citizens was immediate as they took it upon themselves to support the prisoners, since all protests to the Justice ministry were fruitless.”

what a bloody mess……

“The Las Vegas Farmers Market (with locations at Gardens Park, Bruce Trent Park and Floyd Lamb Park at Tule Springs) has recently installed EBT machines to be used to process payments for Supplemental Nutrition Assistance Program payments (or SNAP, formerly known as food stamps).”

finally some good news……

#166 Halifornia on 06.04.12 at 1:05 pm

#122 Sounds like the Economist is long gold. Print baby print!

The article does not mention it. — Garth

They are saying central banks have not done enough and there is room to do more. Bullish for precious metals.

#167 its starting... on 06.04.12 at 1:06 pm

From the Victoria Realestate board
the average prices are down even though sales up are up.

#168 Dorf on 06.04.12 at 1:07 pm

Luke just gave you truthful and accurate advice. Take it.
Someone who cannot take NO for an answer now, will be far more difficult in the future. The person who has to pay for everything is the person who gets to decide if they can afford it or not.

My ex told me….It’s always about money with you!

I said… That’s because nobody takes smiles or buttons!

#169 Halifornia on 06.04.12 at 1:11 pm

#148 W. Buffett (Willy) on 06.04.12 at 11:11 am
@122 Halifornia

” I think civilized people don’t buy gold. They invest in productive businesses.”

We call that arguing ad-hominem. T’is the season for the risk-off trade.

#170 zeeman1 on 06.04.12 at 1:12 pm


We both know Luke and guys like him are not men, but Metrosexuals at best.

BTW, who pays anyone $72K/year to CONSULT on software?

How does any consultant make more than $20 bucks/hour?

#171 Steven Rowlandson on 06.04.12 at 1:14 pm

Learn to say no! Absolutely right. When I was born my parents stayed in a PMQ at CFB Greenwood untill my dad got tranferred to Comox in 1965. At first he rented a house in Black Creek and then he bought a used house 3 miles from work at CFB Comox. At the time he was making roughly $100 a week when he was 27 and the house cost him $6,700.00.
My advice for Luke would be rent and save about 20 or 30 percent of your pay for 5 or 10 years and watch for a price drop that brings house prices down to a year and a half to 3 years pay and then buy with little or no debt.

#172 truth hammer on 06.04.12 at 1:16 pm

I question the veracity of anything Stats Can has to say. I have yet to see a single number come out of any government that has been subject to public scrutiny not be revised. C’mom guys…get with it !! It’s incredibly naive to listen to these liars time after time be proven wrong…and yet perfectley intelligent people fall for the same trap at the next pronouncement.

“We’re from the government, we’re here to help you”….you’ll LYAO when you hear this line in a comedy club….but take it seriously when you hear a goofball like Carnage Carney blow smoke up your arse for a few weks in the ‘newspapers’? This level of denial and cognitive disonance makes no one proud of Canadian’s ability to keep up with the real world.

Howz about this…..’if he lies consistently…then he must be a liar’…..straight line logic…..try it sometime. Template this statement over every government pronouncement ( inc StatsCan) and you’ll get a better understanding of what you’ve been missing.

The fact is…we are teering over the edge …right into Canad’a ‘Minsky Moment’. How can it be otherwise when people have been hoodwinked into carrying

1)160% debt/income.

2) National debt is 100% plus GDP

3) Hyperinflation has destroyed savings

4) ZIRP isforcing people to sell assets at depressed prices exacerbating the decline.

If you don’t know what the definitions are click here

If you want a good comp…click here

If the Canadian Press has not told you what has actually been going on here,-part-ii/

Now bugger these ‘Stats Can says arguments. Rates are NOT going to rise tommorrow……BOC is not an independant body…….Canada is going down in flames……it’s just a matter of how fast.

Read the 2007 comments on the Housing Bubble site…….everyone thought it was differant…that what happened could never happen….until it did.

Carnage… cannot fix a debt problem with more debt…..sooner or later you’ll have to grow up and realise that we don’t have more than 100% taxation to borrow against….setting rates artificially low to borrow against to underpin failing policy will only come back to bite you in the ass.

1) It’s not a right to own a house

2) It’s not a right to make 100K

3) It’s not a right to set immigration numbers above the job creation number

4) some people are going to unemployed….live with it.

#173 patiently Waiting on 06.04.12 at 1:26 pm

Everyone I talk to to in my hood (White Rock / South Surrey) is still drnking the coolaid. Whenever I tell them that the market has peaked and is going to correct (citing many of the statistics that are often quoted on this blog) they all look at me like I have two heads. At coffee the other day a good friend said to me his realtor told him the market is on fire, another young couple with a high ratio mortgage used their HELOC to invest in a spec home that they cannot sell, a 3rd owns two homes and is offering on a 3rd one because in his words “homes double in value every 7 to 10 years” but he lives with his family in a basement suite, the 4th (a property manager) plans to buy one condo every 18 months . . . I later sent them an e-mail showing over 90 homes (there were a lot more but I was tight for time) in the area (including a few that are under foreclosure) that are on the market that have recently had price reductions, and a list of 57 homes (all over $1 million) that were bought by asians (mostly within the last 12 months) that are back on the market . . . some of the price reductions were as large as $200,000! They still don’t believe the market will go down . . . those that drink the coolaid in this hood drink deep . . . this will not end well . . .

#174 Van grl on 06.04.12 at 1:33 pm

I didn’t mean your post was stereotypical, I should have been more clear. I was just responding to your statement “I don’t know if it’s just women”- and no, you should hang out on my street! Most of the men work from home and spend weekends puttering in the yards… it’s pretty amusing actually. Nesting is not a feminine trait. It’s a human desire to have a place to call home, for sure. But that could be a mansion, a rental suite, a hotel room- a tent! :)

I was referring to some of the constant posts stating that it is “wifey who ropes hubby into buying the home”- see Blase’s post above (yaaaawn).

As for single women buying condos, I’d guess it reflects their financial security (assuming they have nice, fat down payments) and independence. Kudos to them!

As far as your earlier post re: memories… My parents didn’t buy a place until I was 12. My childhood memories are not of sitting in a pretty living room and staring at nicely painted walls. It’s the skiing and camping trips that shaped my childhood.

#175 Bottoms_Up on 06.04.12 at 1:42 pm

Average net worth per household is $400,000, real estate forms 50% of it:

Yes averages suck in this case. Median is a much better indicator of the financial health of Canadian families.

#176 $$$BPOE#1 on 06.04.12 at 1:45 pm

Folks, nothing goes straight up or straight down. this is the pause that refreshes. HST debacle almost finished being ironed out. Check out west 2nd by World Class Oly Village towers going up everywhere. It just keeps getting better everyday

#177 Back East on 06.04.12 at 1:45 pm

I can partially claim my vehicle against my home based business as a depreciating asset. However, my home is deemed to always appreciate, limiting me to a partial write-off of interest paid on the mortgage. Could that change when home values tank?

#178 2centsCanadian on 06.04.12 at 1:47 pm

About Luke. Some people get it … most people don’t. Nothing you can do about it. I read what Garth and others write on here over and over again about caution and don’t buy or borrow when things are at historic highs (RE) and lows (bank interest) …. and still men and women “just want their own house” (or other “stuff”). I want it NOW! at all costs! Oh well …. let nature (and the math) take it’s course. Banks must just ring their hands with sinister smiles …… as guys like Garth and others warn warn warn …. yet guys like Luke are drawn into the smothering inescapable, mega-stressing, life destroying debt pit.

#179 fancy_pants on 06.04.12 at 2:07 pm

Geez, we’ve been at this for a couple years to no avail so far. This is much, much more drawn out than it ever should have been b/c of all the muddling by the peckerettes.

RE prices should have just kept going down (or at best stabilized) after the spring 2009 thaw when prices took a quick dip. Instead they have gone up at least 15-30% since then (likely more in Vancouver).

this has been one drawn out affair to hold the gas in the balloon.

#180 coastal on 06.04.12 at 2:18 pm

“The real pain is in Victoria, where my lemmings are on the lookout for a crash.

It will start in the West….”

It’s easier to persuade 500 potential buyers down to 200 than it is 5000 per month. The smaller cities will feel it first like it always does. The next few months will lay the groundwork for the wake up call that the game is over. Victoria is a city still in denial cause they “are so much cheaper than Vancouver”.

#181 John on 06.04.12 at 2:26 pm

Houseless in Mississauga wrote what is in my opinion a toxic post, supposedly in a “home” where the kids have a “loving environment”. A partial review of the concepts are important to understand how a derivatives-based world economy could have sunk so many men. And it will be the men who have to take responsibility for what happened.

Check it out…here she starts “advising” our genderless wonder “Luke”, a man without the identity or stones to say NO:

I sat my 3 and 5 year old kids down the other day and delivered the cold news: ” sorry children, this house is not ours….we are renters”. Surprise, surprise, they didn’t care one bit. All my kids know is that they live in a loving home and are well taken care of.

While pregnant with my second child, my nesting instincts really kicked into high gear. I desperately wanted to buy a house and I started dragging the reluctant hubby to open houses and searched the MLS listings for that perfect home to call our own. Our families got excited…after all, we had been living in a two bedroom apartment with our first born. Homeownership seemed like the natural next step, especially with a second baby on the way. Everybody was doing it. All our friends were buying, rates were cheap and we could even extend our mortgage over 35 years. The time seemed perfect…except living in the GTA meant RE prices were ridiculously high. Luckily, I found this blog and started reading it avidly. As a result, I called off the house-buying plans but didn’t give up my plans of moving into a house in a family friendly neighbourhood, with a fenced yard the kids could play in. That’s exactly what I got.”

Poor kids. The women suffering the absence of any male energy is relegated to using her husband and kids for a terrible parade of “I”. It’s all “I”. In Canada this woman has not been allowed to BE. To enjoy her unique, wonderful feminine self…instead going for the Goldman Sachs et al depolarized unisex. Thus, no decisoon, no direction, and a poisionous environment for children.

It’s not evil ( unless ignorance is evil), but it IS. And the men have been the drivers on this one. You can imagine that Luke’s dad probably created an emotionally negative anti-gender home for Luke…causing him to “choose” his integration to larger sick system. All in the Canadian soup.

What would Luke say in a room full of Canadian women…if asked about his reaction to the fotos of this blog, and a bunch of other sexual stuff?

You can bet he’d hide his reality in shame..and thus loses his male anatomy…and his ability to say no to systemic Goldman et al.

#182 edmonton mortgage broker on 06.04.12 at 2:41 pm

this is the ugly reality of what can happen when folks are pushed to the limit financially and eventually snap. get used to it, it’s already common place in the states.

#183 Chris on 06.04.12 at 2:46 pm

people we know tried to buy a place in missga this wkend. bidding war, these folks didn’t get it. the “winners” paid tens of thousands above asking, waived home insp too. approx 470K – for a townhome.
i’m not holding my breath for sanity to return to the GTA.

#184 Arthur on 06.04.12 at 2:58 pm

I have a greaterfool success story in Vancouver. Using arguments and info from this site, my coworker who is getting married in the fall convinced his fiancee, parents, and in-laws to keep renting after they get married.

Unlike another coworker I previously posted about who is also about to get married. He took possession of a house a couple weeks ago and this weekend found out the house is infested with rats. The rats are well fed thanks to the next door neighbour’s chicken coop.

#185 Superman on 06.04.12 at 2:58 pm


REBGV just released their May 2012 stats. And here is what they had to say:

“The MLS® HPI benchmark price* for all residential properties in Greater Vancouver currently sits at $625,100, up 3.3 per cent compared to May 2011 and up 2.4 per cent over the last three months.”

WHEW!!! THANK GOD! And here I thought we were down 12% YOY… turns out, we’re actually up 3.3% YOY. Okay, seroously, how can these guys keep a straight face when writing this? lol. Newsflash, it’s not going to work!!! This is going to backfire on them… instead of creating market strength, they will simply make the drop worse by delaying the inevitable.

#186 truth hammer on 06.04.12 at 3:03 pm

In a country where politically correct means that nobody in the entitlement generation ia made to understand failure….who thinks we won’t have taxpayer funded bailout scheme for underwater ‘real estate speculators’

#187 Mr. Lahey on 06.04.12 at 3:14 pm

#155 Luke

Very wise words, true life tales and good judgement calls in your life that the Luke in this story would do well to heed.

#188 Nuke on 06.04.12 at 3:15 pm

I’d like to see the average composition of median assets broken up in categories. Investment assets; large personal assets such as real estate and automobiles; and personal assets should all be segmented. That would give a better idea of the real value of the assets.

The principal residence should be removed as an investment due to its illiquid and personal nature. Trying to price a property based on a median price or similar properties is fraught with error compared to pricing a marketable security that can trade by micro-second.

#189 truth hammer on 06.04.12 at 3:17 pm

QE 3 EU floated Friday ( Gold up $66 in response )….Confirmed Monday…..Who’s in trouble?

#190 DM in C on 06.04.12 at 3:21 pm

“men don’t want women to go have a beer with and talk football. ”

But…. but….. I like beer and football – – I can’t enjoy them with men?


#191 Nuke on 06.04.12 at 3:25 pm

From the Vanier Institute report noted above. Very disturbing once real estate begins to normalize.

SINCE 2000
Net worth per household, in constant 2009 dollars, increased by $46,200 from 2000 to the thirdquarter
of 2011 (see Appendix C). Over the same period, the net value of real estate advanced by
$49,099 (a value gain of $71,321 minus an additional $22,222 in mortgages outstanding).
The increase in housing wealth is just a bit larger than the total increase in wealth from all sources
since 2000. Real estate now comprises half (50%) of the net worth of Canadian households, up
from 36% in 2000 and similar to 1990. This 50% ratio is the highest it has been over the entire
period (since 1990) for which data is available. A fall in house prices, which is likely, would have a
negative impact on the size of the total family wealth”

#192 Kenny Banya on 06.04.12 at 3:34 pm

Chris on 06.04.12 at 2:46 pm

people we know tried to buy a place in missga this wkend. bidding war, these folks didn’t get it. the “winners” paid tens of thousands above asking, waived home insp too. approx 470K – for a townhome.
i’m not holding my breath for sanity to return to the GTA.

Exactly. In my neighborhood, a semi-detached on the next street over listed for $750, sold for $872k within the week. Today the next semi on that street gets listed… for $899k. Viva the bubble. It ain’t over yet, at least not in Toronto.

#193 yel on 06.04.12 at 3:42 pm

to #13 City Slicker on 06.03.12 at 8:47 pm

“Garth you didn’t mention Calgary, $82/oil now, and in a free fall. I know oil is not the end all be all, but it will bring a more dramatic effect, psychologically if nothing else.”

you wish :-)

#194 disciple on 06.04.12 at 3:46 pm

Real heroes you never hear about who take up the fight:
The teenager who flew to Red Square:

#195 Ralph Cramdown on 06.04.12 at 3:58 pm

The MLS® HPI benchmark price* for all residential properties in Greater Vancouver currently sits at $625,100, up 3.3 per cent compared to May 2011 and up 2.4 per cent over the last three months.

The MLS® HPI benchmark price for all residential properties in Greater Vancouver currently sits at $683,800, up 3.7 per cent compared to April 2011 and an increase of 2.8 per cent over the last three months. The benchmark price for all residential properties in the Lower Mainland is $612,000, which is a 3.4 per cent increase compared to April 2011 and a 2.6 per cent increase compared to three months ago.

Isn’t some guy supposed to come out, tap the mic a few times, mumble something about the sales mix, and leave again?

#196 BBstudios on 06.04.12 at 4:24 pm

Luke, in the end you will make your own decision regardless of what we say on this blog. I feel your pain however. I’m 29, married for a year, bought a house with the wifey in Feb 2012. We settled for a semi outside of Toronto for $320K but we were all horny for the detached, 2 car garage, larger backyard, etc. You need to understand – you can’t have it all on the first shot. If you really need a place to call your own, try something smaller and more manageable. We were about to put in an offer for a $420K house and I started to shake and get jittery. The thought of that much debt (even with having 20% down payment) made me sweat. Good thing there was another offer on the place, as this cooled us down and made us walk away. Thank God for that. I don’t know how you could go for a $500K+ house right now. Get something smaller. The house you want isn’t for first-time home buyers. Best of luck to you though. Sounds like you will be okay, just make sure it’s the house you want if you’re ready for that much debt.

#197 Canadian Watchdog on 06.04.12 at 4:26 pm

#197 Ralph Cramdown

HPI and average/median prices have completely decoupled.

Don’t surprised within the next few months when TREB adopts the HPI price as its headline figure.

#198 Coraline on 06.04.12 at 4:26 pm

I particularly like this excerpt from the latest REBGV report. They are completely shameless. No wonder it took them longer than usual to massage the data.

*Editor’s Note: Benchmark prices underwent a re-calculation this month in order to more accurately
reflect trends measured by the MLS® Home Price Index. There were no changes to the calculation of
index values.
This re-calculation involved aggregating benchmark prices using the sales weighted approach for the
reference period (i.e. January 2005) and thereafter linking movements in aggregate benchmark prices to
their corresponding MLS® HPI.

#199 Beach Girl on 06.04.12 at 5:30 pm

Luke. are you all there? Or are you Skywalking through life.

I certainly hope you are Italian, because if you’re not. You have already lost. Probably have anyway.

If you don’t already hate your in-laws, you will. They probably hate you, but conceal it well. She will side with Ma and Pa and you my good friend are up the creek sans paddle.

I would chill for 24 hours and head for the hills. You be serving hard time like Bernardo, except he has more freedom.

#200 Someguy on 06.04.12 at 5:32 pm

So they moved the goalposts to make the numbers look bigger. I really hope the goalpost moving becomes the headline and not the press release.

#201 Fisc on 06.04.12 at 5:39 pm

#202 Mr Buyer on 06.04.12 at 5:41 pm

#198 BBstudios on 06.04.12 at 4:24 pm
I don’t know how you could go for a $500K+ house right now. Get something smaller. The house you want isn’t for first-time home buyers.
Buying as a bubble just tops is not a really good idea no matter what the size of the house is. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE. THE BUBBLE HAS TOPPED. SALES ARE FALLING ACROSS CANADA AND PRICES ARE STARTING TO FALL IN AREAS AROUND CANADA.

#203 Mr Buyer on 06.04.12 at 5:47 pm

#185 Chris on 06.04.12 at 2:46 pm
people we know tried to buy a place in missga this wkend. bidding war, these folks didn’t get it. the “winners” paid tens of thousands above asking, waived home insp too. approx 470K – for a townhome.
i’m not holding my breath for sanity to return to the GTA.
To those poor souls that think the bubble with continue in Toronto until you buy and then sell that newly bought house please think again. The bubble has topped.

#204 David in Calgary on 06.04.12 at 5:55 pm

TD Canada Trust: How Does Alberta Fare Out Regarding Debt?

Even though 69% of Albertans put a high priority on saving for their first home, 40% of Albertans admit they would rely on a loan or line of credit to ***finance a deposit*** on their first home.

I repeat, from TD Canada Trust: 40% of Albertans rely on financing deposits for home mortgages.

#205 Toronto_CA on 06.04.12 at 6:34 pm

Ugh. From that article in the FP that Fisc linked:

“The board’s benchmark price index for all residential properties in Greater Vancouver was $625,100 in May, a 3.3% increase from a year ago. Detached home prices jumped 5.1% from a year ago to $967,500, apartments increased 1.7% from a year ago to $379,700 and townhome property prices rose 0.9% in May from a year ago to $470,000.

However, using actual average prices instead of the index, average detached home prices are down 12.2% from a year ago, townhomes are down 0.2% and condominiums are off 1.1%.”

I’m so glad the article called out that f**king index for the total BS that it is! I hope the rest of the MSM stops reporting the index numbers since the REBs are obviously just making it up to stop a panic.

#206 Westernman on 06.04.12 at 6:45 pm

Beach Girl @ # 201
Congratulations! You FINALLY composed a post that made sense…
I didn’t think you had it in you…

#207 ANONYMOUS on 06.04.12 at 6:52 pm

Its not Luke’s fault, women PUSH the men into buying homes that they themselves don’t want, and the men obey the women’s nagging just for the sex.

If the men simply told the women to jump into the lake, more men would save their financial lives!

Look at it this way: WHEN the market turns and homes crash, she’s going to leave him anyways, calling him a “LOSER” to have bought such a lemon. So he’d damned if he does, and damned if he doesn’t, so just tell her ‘NO WAY BI**H’, and let her just walk away and find another stupid dude to buy her a depreciating house.

#208 Devore on 06.04.12 at 6:57 pm

#199 Canadian Watchdog

Don’t surprised within the next few months when TREB adopts the HPI price as its headline figure.

The *REB* will headline whatever statistic is most advantageous to their customers, the realtors. In the absence of a headline grabbing number, the market is cooling, and balanced.

#209 jess on 06.04.12 at 6:57 pm

tax credits for films that make billions and pay the actor millions . Should they really get a 22m. tax credit ?'re_getting_ripped-off_by_hollywood

Iowa suspended its scandal-plagued film tax credit program in 2009 after other examples of abuse came to light. Brouse is the seventh person convicted so far, including the former head of the state’s film tax credit office (see Moviemakers Charged with Stealing Film Tax Credits).
“pass through entities”, $225 to rent a single push broom and $1,350 to rent a two-foot extension ladder for 45 days.”

#210 Chris on 06.04.12 at 7:01 pm

#204 Mr. Buyer, you’re not really adding anything to the discussion by saying BUBBLE HAS TOPPED, BUYER BEWARE multiple times per day.

Maybe you think you’re turning public opinion that way? Effort appreciated, but I doubt it’s effective. If it was, Garth would be copy-pasting such words daily, instead of talking econ fundamentals & RE stats.

If anything, you’re hurting the GreaterFool cause by painting the rest of us as a bunch of blind believers. No offense, just my opinion.

#211 Morpheus on 06.04.12 at 7:14 pm

#122 Halifornia on 06.04.12 at 8:50 am
Sounds like the Economist is long gold. Print baby print!

The economist is part owned by the Rothschild family, what do you think?

#212 cramar on 06.04.12 at 7:34 pm

Luke, nobody has yet mentioned option C).

A) Buy 539k house.
B) Rent instead.
C) Move out of Toronto!

You see, I was in your situation a generation ago. Just married, so we rented a basement apartment. First child came then we decided to move to walking distance from work and rent a townhouse. Then second child came.

This was the inflationary 1970s, house prices were climbing monthly in the GTA and mortgage rates were well into the double digits. I remember thinking, “I will NEVER afford a house, unless I get out of the Toronto area.” I found a job in a smaller city, but would have to take a noticeable pay cut. I felt it was worth it, so we moved to Kitchener and rented another townhouse. Became supers in exchange for rent reduction. After one year we saved enough and we were read to buy. With a good downpayment topped up from a loan from my mother, we were able to buy a fixer-upper in a good ‘hood with 40% down to keep payments low. Paid off within a decade. The bottom line to this story is that this is STILL a valid option today!

Because you are in software, you should be able to find another job in another Ontario city of your choice—one that has much cheaper house costs. Your 60K+48K down-payment will go a long way on a 300k house (or $250K or even $150k) instead of a $540k one! That will keep your payments far lower even if you must take a pay cut.

If you do not want to move out of the GTA for some reason, then RENT!

#213 jess on 06.04.12 at 7:46 pm

calling the kettle black

$1.5 million investment by the state encouraged by Mr. Romney was Governor of Massachusetts .
In 2003 –– Konarka filed for bankruptcy

Meanwhile the Republicans attack Solyndra a program that financed Solyndra which was started in 2005 during the Bush Administration, and Bush’s same federal employees recommended Solyndra’s funding.

Republicans will raise taxes so that they do not have to cut defense.

By Thom Hartmann, The Thom Hartmann Program | News Report

#214 Nostradamus Le Mad Vlad on 06.04.12 at 7:51 pm

Chamber Music is a marvelous way to brush the cobwebs from the empty white space in my cranium, separating my two external antennae. Not everyone’s extra-strong mocha, but it works for moi. Great posts today.
Coordinated Synchronicity or the financial slowdown; Euro Elite Possibly why the R&R’s merged — to solidfy and centralize power; CNBC accuses Morgan Stanley; China hoarding gold; Brussels We have a chart here; Unloading Zuckerberg; UK — Stealth Default? That will awaken people up; Spanish Riots Miners and cops; Yuan – Yen Aiming for the top; Ten Ideas we can adapt from Greece; Contracting Business lending, that is; Unemployment Benefits In collusion with Kannaduhhh?
Congress — An Overview; 1:49 clip Rothschilds behind CC? SAS and MI6 Yet the UK may default; US – Germany – Israel “So all of that cash taken from the American people and given to Israel is illegal under US law! It is time to ask why the US government is breaking its own laws to send your money to Israel. And to demand a refund plus interest for all that money illegally sent to Israel.”; Germany keeping itself busy while economies flounder; Vitamin D and the flu, and 75% of docs. refuse chemo for themselves; Ibuprofen Some alternatives; Cyberwars The boomerang effect; Drone blitz on Pakistan because the Dow is tanking; China Getting tired of the west screwing Syria up; Russian Geneticists disprove Out Of Africa claim; Linux – Microsoft Locking Linux out, and Worst Companies at protecting privacy; Food Additives Flame retardant is not usually one of them; Top Ten GMO Foods to avoid; Plastic Bags banned in Hawaii; US Missiles “What moron signed off on outsourcing those parts?”

#215 CrowdedElevatorfartz on 06.04.12 at 8:02 pm

@#178 Bee Pee
“Folks, nothing goes straight up or straight down. this is the pause that refreshes. HST debacle almost finished being ironed out…..”

Bwahahahahahahahaha. Your delusional!

The RE market is dropping and you’re pumping that this is “the pause that refreshes……”


What a maroooooon.

Owe-Limp-ick Village.
OR the buildings rising around that rat infested bankrupt repossesion.

Yeah a rode my bicycle past there a few weeks back on a sunny Saturday. Prime RE selling time one would think. 2:30pm and the only people around were the Buskers paid by the city to “stage the neighborhood” as a “happnin’ place”

complete joke.

Oh and as a warning to potential purchasers of property in that area….Note to self.

The City of Van ( which OWNS the financial boondoggle) hasnt been enforcing parking regulations around the “Village” to give potential buyers the false sense of “abundant parking”……

Good luck when you want to park or you have visitors…..

BPOE is a Realtor AND a buffoon.

Ignore his rambling diatribe.

#216 ANOTHER SALES FALLS THROUGH on 06.04.12 at 8:03 pm

sales in Toronto and the GTA are falling through as people can not qualify. Another annex house goes back up for sale and house near uncles house at young and sheppard is back on the market. Looks like housing market falling apart in Toronto.

#217 CrowdedElevatorfartz on 06.04.12 at 8:05 pm


#218 gokou3 on 06.04.12 at 8:12 pm

Can someone explain how is it possible that the “benchmark price index” is rising while the average transaction prices is dropping?


#219 Ret on 06.04.12 at 8:17 pm

Flaherty not ruling out more stimulus spending.
Code for,
Flaherty not ruling out more deficit spending and future debt for all Canadians.

Why doesn’t he man up and call it what it is? Canadians are repeatedly told to worry about their personal levels of debt but the government can spend carte blanche, seemingly at will.

If there is money to be spent, Canadians will spend it more efficiently than any government. Governments are notorious for getting poor value on dubious projects.

#220 Arb Watson on 06.04.12 at 8:20 pm

That is awesome…

#221 gladiator on 06.04.12 at 8:23 pm

@212 Chris: so true, Chris, so true!

Mr. Buyer, stop singing this mantra of yours. We get the point. I am tired of scrolling through your posts and stopped reading them months ago (when you started all this mantra singing).

#222 Junius on 06.04.12 at 8:26 pm

#211 jess,

Canada has generous tax credit regimes both federally and provincially. In the 90s we had tax shelters which proved to be a very inefficient and sometimes costly approach to financing. Much of the money ended up in the pockets of the syndicates, lawyers and accountants.

The worst scams were actually in Germany in the late 90s and early 2000s where German tax funding was underwriting hundreds of millions of dollars of Hollywood production.

The tax credit system was introduced in the late 90s and it is better because it applies primarily to labour costs so it is easier to estimate the real costs. Essentially it is looked at as “found” economic activity that rebates a portion of the taxes actually paid to induce the industry to be here.

The system has become a race to the bottom as different jurisdictions have thrown more and more money at Hollywood to attract the industry. It is seen as a high profile, clean industry that moves in and then out leaving only money. However, as the article rightly points out, there have been some bad experiences in chasing these dollars. Most of the US states trying to attract the business appear to have discovered just how ruthless Hollywood can be.

#223 Onemorething on 06.04.12 at 8:26 pm

#25 Onemorething — “I hate myself because I dont seem to fit in with anyone and I’m lonely.” — Like me, you’re a reject because you won’t conform to what ‘society’ or ‘the establishment’ says you should do.

Well it’s the ability to manipulate the manipulators that I like most.

#224 Junius on 06.04.12 at 8:31 pm

#178 BPOE,

You said, “Folks, nothing goes straight up or straight down.”

That is not what you have been saying on this Blog for the past 2 years. You said that Vancouver was going up, up, up with no end in sight. And you were never wrong.

Glad we all ignored you from the beginning as a delusional pumper. Fries with that?

#225 AACI Home Dog on 06.04.12 at 8:36 pm

GM & US….
the ultimate capitalist plan ?
Nostradamus…have you seen it ?

#226 jess on 06.04.12 at 8:49 pm

Modern Britain.

A group of long-term unemployed jobseekers were bussed into London to work as unpaid stewards during the diamond jubilee celebrations and told to sleep under London Bridge before working on the river pageant…

..”The woman said that people were picked up at Bristol at 11pm on Saturday and arrived in London at 3am on Sunday. “We all got off the coach and we were stranded on the side of the road for 20 minutes until they came back and told us all to follow them,” she said. “We followed them under London Bridge and that’s where they told us to camp out for the night … It was raining and freezing.”

A 30-year-old steward told the Guardian that the conditions under the bridge were “cold and wet and we were told to get our head down [to sleep]”. He said that it was impossible to pitch a tent because of the concrete floor.

The woman said they were woken at 5.30am and supplied with boots, combat trousers and polo shirts. She said: “They had told the ladies we were getting ready in a minibus around the corner and I went to the minibus and they had failed to open it so it was locked. I waited around to find someone to unlock it, and all of the other girls were coming down trying to get ready and no one was bothering to come down to unlock [it], so some of us, including me, were getting undressed in public in the freezing cold and rain.” The men are understood to have changed under the bridge…

#227 Canadian Watchdog on 06.04.12 at 9:06 pm

#220 gokou3

There is some discrepancy between the average and benchmark price due to lower sales. The average price is less reliable when sales fall because the sample size is smaller. The best indicators to track over time is median price and total volume.

#228 ozy - Unless on 06.04.12 at 9:08 pm

Unless you have 30-70% downpayment, stay away on this market. If you have the dough, then you could buy very very selectivelly, make sure you get value (if you know what I mean).
Do not have the 30-70% downpayment? Then stop thinking about buying, stop consuming all, save all, start learning and increase your qualifications, change jobs to increase salary. Come back to this post when you have accumulated the dough. Prices riched a ceiling and won’t be rising significanlty until next spring, but the downturn risk of loosing 10% by then is real (50% chance of correction). Reffering to GTA

#229 Gmaz on 06.04.12 at 9:47 pm

Anyone can give me some real stats (i.e new listings or price reductions on MLS) for Mississauga.

When I read about the Toronto housing market, does that apply to Mississauga as well?

#230 Thewrongone on 06.04.12 at 9:48 pm

Garth, you were absolutely right -and bright- on this one. Today’s GVRSB says the market is balanced, even the inventory is creeping up, sales are flat fpr the last 4 months and very low compared to last year. But Brokers’ association keep trying to brighten things up… dark times are coming…

Something that you forgot to mention in that the Vancouver specials will be the first one to drop SIGNIFICANTLY in price. People who bought those specials over the last 2 years or the greedy ones that hold on them for too long are going to burn some real cash…

#231 disciple on 06.04.12 at 10:18 pm

In 2005, Jim Tucker wrote Jim Tucker’s Bilderberg Diary, a book chronicling his thirty-plus years of exposing the Bilderberg Group.
After the 2006 Bilderberg meeting in Ottawa Tucker “was able to report that in the year ahead many hundreds of thousands of American home owners would lose their homes”. Tucker said “someone actually laughed about that at the Bilderberg meeting”, while he also said another person present remarked “the stupid jerks deserve it”.

Maybe some of you already knew that. But what you probably didn’t know is that Jim Tucker is none other than David Rockefeller Jr.! He also plays the role of Jim Marrs, among others:

#232 dave t on 06.04.12 at 10:30 pm


You have an awesome place in probably an awesome neighbourhood in north york, where you have lots of playgrounds, splash pads, green space, libraries, and daycare. (RE Daycare, it’s a real bitch to get in Toronto so get on those lists NOW.) Your taxes pay for all those public services so use them. Your kid will not give a flying whether or not daddy rents or pays a mortgage to the devil so do what saves you the most money. You can buy one pair of jewelery or leather goods each month you save by renting and still come out on top. But really, you won’t have to – your wife is a keeper who doesn’t need to be bought off … right???

Dude, I love renting; we have two kids, good times and no massive debt swinging in our faces. Once buying at the standard of living we want costs less than renting, then ok, we’ll do it. Otherwise, we’ll just keep pocketing the difference.

When you eventually end up buying, it will be life’s great trap. You’ll have an expensive house and your wife will still be venting to you about how snobby the other moms at school are and we’re talking public school. Had a good talk about it at work with someone taking out a HELOC to renovate for 4 months and renting temporarily for $3k/mo – ouch. Well at least she’ll be chopping carrots on granite when it’s all done. “Keeping up” with all the other assholes on the block is a farce. Better to burn it on family trips and awesome experiences for the kids.

Your kids will be the realest people you’ll ever know. Realer than your in-laws, your parents, your friends, realer than the assholes at the office and the hens clucking at the mani-pedi bar your wife deals with. They’re gonna love that you’re blowing a wad on them and still putting away more than you would by buying.

Remember, she’s marrying you for your balls, so keep them on at all times.

#233 Mr Buyer on 06.04.12 at 11:41 pm

#223 gladiator on 06.04.12 at 8:23 pm
@212 Chris: so true, Chris, so true!

Mr. Buyer, stop singing this mantra of yours. We get the point. I am tired of scrolling through your posts and stopped reading them months ago (when you started all this mantra singing).
(WARNING: GLADIATOR. While this is a response to your message you may want to blow right by it as usual as I included the usual trite sloganeering at the end)
Dearest Gladiator…My intent was not to offend your sensibilities. While the endless droning on my part can seem excessive it is only to counter the endless minimizing, denial and outright misleading of people. Most people that are here everyday likely blow past the drivel I peck out and rightly so but a clear and consise message to some poor soul that has staggered in hear out of the cold and about to be run over buy a bus with MSM and RE types cheering him (or her on) could stand to hear a stark bit of sloganeering from time to time in my admittedly warped estimation. Repetition works, repetition works. BUYER BEWARE. NOW IS NOT THE TIME TO BUY A HOUSE. SALES ARE FALLING ACROSS CANADA. THE BUBBLE HAS TOPPED. PS…I rarely read anybodies posts other than my own, except of course that so an so Smoking man’s stuff(It really gets under my skin sometimes). It is kind of like, look mom I made a KaKa. It is probably some narcissistic disorder but do not tell anyone okay.

#234 Courage | on 06.05.12 at 9:44 pm

[…] a leading indicator of conditions to come. The bloat in listings is another – one of the critical six stages of the market I wrote about on Sunday. Soon, what’s happening in Vancouver will manifest in Toronto, as […]

#235 Dave Ball on 06.06.12 at 10:20 am

For most of us, it’s best to look at a home purchase as exactly that – a home purchase. Not an investment per se. A home. Raise your family, live there 25 or 30 years. Don’t think of it as an investment in anything more than stability for your family.

Some may enjoy renting. But not renting has its benefits too. Want to paint a wall fuschia? It’s your house. Go for it. Want to remove a wall. Take it out (but watch out!) because again, it’s yours.

Want to deal with some money grubbing real estate investor? Rent. Get nickled and dimed. Be hassled. Get evicted. It doesn’t matter, because you may get to brag to your friends that you listened to some failed politico turned blogger and saved a few dollars. Or not!

Even at today’s prices, in 20 or 25 years, your home will be worth it. I bought at a high point many years ago, and today, I am so much further ahead. Rent in those days was $600 for a nice little house. Buying cost $900 a month. When we sold it many years later our mortgage was still $900 a month and rents were more than double.

I have a friend who explained the finances and wisdom of renting way back then, in the 80s. Today he pays $1900 a month for a 1 bdrm and is in one of those west end apts where the slumlord wants to renovict residents. He has saved some money over the years. About a third of the value of my house. And he’s paid more in rent for most of the time than we did in mortgage.

Me? I now live rent-free, mortgage-free, and I work way less. Got a few sheckles in the bank. Not rich, but no where near being ‘one pay cheque away.’ And I have a number of friends in the same position. We’re all about 50 yrs old.

So my advice is be careful of being stampeded by false prophets and their wisdom and insight. Do what works for you. A house can be just a home, a nice to place to live, and not necessarily an investment whose value you need to weigh every 2 weeks.

Stay in a home 25 or 30 years? Canadians move on average every six. This fact, combined with transaction costs, changes your argument. — Garth

#236 tnt on 06.07.12 at 12:36 am

New guy, what if money thats bailing from Europe now and is going to the States whose (economy is done) then diverts up North to invest in a top rated and so far proven banking system and country eh? There is a ton of money coming this way.

#237 From bull to bitch — Greater Fool – Authored by Garth Turner – The … | | Vancouver Realty News BlogVancouver Realty News Blog on 06.07.12 at 8:56 am

[…] From bull to bitch — Greater Fool – Authored by Garth Turner – The …Spending more than 5 minutes attempting to fathom the Vancouver real estate market is an epic waste of time. Assuming that it applies in any way to the rest of … […]