Demand hoods

With Vancouver sinking, Toronto’s latest housing numbers come as little surprise. So far this month, sales have shrunk 10.5% from May, while listings bloated 16.5%. Of course, it’s still one of the tightest markets in the country with barely a two-month supply of houses for sale. The paucity of resales underscores a tenet of human nature: when prices go up, owners hang on. When values fall, people bail.

The average selling price of $516,834 is now 16% higher than it was in January. This is the Vancouverization of the GTA I’ve referred to several times – that unsustainable period of time in which, Nik Wallenda-like, an entire population thinks it can defy gravity and walk on air.

These are days in which recency reigns – that most human of failings which makes us believe what happened recently will keep on happening. It’s why we crave stuff that goes up, and run screaming from assets that fall. It’s why most people are financial failures. They buy high, then sell low.

Recent price levels in the GTA are unsustainable, and unsupported by increases in family incomes or economic activity. As in the early 1990s, there will be a correction – that one took prices down an average of 20%. Worse, almost a decade and a half passed before somebody buying in 1989 got their money back.

Will it repeat? In some places, you bet. In others, dream on. So let’s clarify some words published on this pathetic blog yesterday which had millions of shorts in a twist.

For those hicks and cowboys who come here, it’s worth noting the GTA has more than six million people. If it were a province, it would be the third largest. The entire population of BC, and most of Alberta, could fit inside this one urban area. It covers 6,000 square kilometers and is over a 120 km across.

The GTA, like all of BC and Alberta, is not a homogenous clot of uniformly self-centred and irritating metrosexual people. When it comes to housing, it’s a massive weave of individual markets. And as I keep telling people, all real estate is local. In the inevitable correction and years of moribund markets which lie ahead, some will wreck, some will hold.

Only one thing will determine this: demand.

Demand for condos on the waterfront, for example will be swamped by supply. Prices (and current owners) don’t have a chance. Demand for cookie-cutter suburban semis in Milton and McMansion-stuffed cul-de-sacs in Aurora, ditto. This will not end well for anyone who bought since 2008. Most of the urban area will see serious price and sales declines. But not everywhere. That means waiting for prices in expensive hoods you can’t afford to topple to accessible levels, is a flawed strategy.

That’s what I told Jake yesterday – the guy who wants a detached house in High Park where the average one trades for $900,000. Getting it would mean his family takes a $600,000 mortgage and has no money. A very bad idea. Odds are values there will flatline, not plunge, over the time he wants to buy – the next few months.

How this isn’t self-evident took me by surprise. A lot of people have forgotten what creates markets.

Here’s an example. Leaside is a leafy enclave first built as a subdivision of Toronto over eighty years ago. Now it’s smack in the middle of 416 and has been a real estate hotbed for decades. There are only about 5,000 houses and no additional land available. Every year between 150 and 200 houses come up for sale. Not nearly enough to satisfy demand. This is why bungalows on 30-foot lots go for land value (about $850,000) and skinny two-storey faux estate homes emerge in their places, and the average income is $325,000.

Below are the sales and average selling prices for detached homes over the past 22 years. There are two things you might want to note: first, when Toronto prices crashed in the early 1990s, the decline here was half. Second, the GFC of 2008-9 reduced Leaside prices by just 5.5%. They recovered in seven months.

What are the lessons? Beats me, but if you’re going to buy real estate, make it liquid. Get what other people want – it’s a lot safer. Second, buy what you can afford, which was my entire point with poor Jake. Third, never put the bulk of your net worth in one asset, no matter how leafy it is. Last, don’t mess with me. I might just delay this correction further.


#1 Minto on 06.18.12 at 9:22 pm

Really enjoy reading your site

#2 Fleabitten Monkey on 06.18.12 at 9:28 pm

So prices in Leaside won’t eventually revert to the mean? That table really is something. Looks like parts of Vancouver.

#3 espressobob on 06.18.12 at 9:31 pm

Real estate has had a great Bull Run for two decades!!!! Can’t wait for the carnage to begin so some of us can swoop down and snap up a good deal. It’s overdue!

#4 T.J. BONES on 06.18.12 at 9:34 pm

Sir Garth : At my daughters wedding saturday, my nephews who own condo’s in To said their properties are solid as a rock. I asked how so? They informed me that their condo’s are ON the waterfront. No buildings in front of them and right on the water. Nobody looking in your suite from like your recent post of the dog looking over the cat. We shall see. P.S. Beach Girl please keep posting we need your demographic to counter the norm, also other female posters. Thank You

#5 Shane on 06.18.12 at 9:35 pm

Garth, is unionville considered a wreck.

#6 Amazing on 06.18.12 at 9:38 pm

Great post as per usual…. Garth you seem particularly under attack lately… clearly an indication that people are uptight. I enjoy your blog… and will continue to read it. Its hilarious that people come here all accusatory… it’s your blog… you can write whatever you want… amazing how much influence and power people feel that you have! Good job… I refer people to your blog all the time! Keep it up…

#7 Chris L. on 06.18.12 at 9:38 pm

Even you can’t delay this correction.

#8 Lost cash on 06.18.12 at 9:38 pm

Garth please tell me, do you really get enjoyment in messing with people. Remember your just a man and not god!!!!! I feel sorry for you man.

I’m not? — Garth

#9 JSS on 06.18.12 at 9:39 pm

I also really enjoy this site.

#10 Guy in the orange shorts on 06.18.12 at 9:40 pm


#11 NAM not HAM on 06.18.12 at 9:40 pm

Will Hope, BC hold it’s home prices?

Which street? — Garth

#12 Amazing on 06.18.12 at 9:41 pm

PS… people forget a house/condo is only worth what people are willing to pay. Seems to me most are heavily invested and exclusively in real estate… and maxed out financially. Things have to change.

#13 Full of It on 06.18.12 at 9:42 pm

Sounds like backtracking to me. Lots of slamming on Leaside in the past including 416. In the mean time prices kept going up and up and we heard how much interest rates were going to be going up. Now we don’t hear much about that anymore. The message changed over the years as I have been following it closely. It morphed into focusing only on condos. It was bidding wars on houses next. And it was about putting only a fraction of one’s assets on one thing. Blah, blah, blah. In the meantime it was away she goes on the upside!

Vanouver may not have the poplulation but what it doesn’t have is land and the geogpraphy with the valley and the mountains and the bottleneck commute from the valley. Not to mention it is on the pacific close to the huge growth in Asia. No I don’t think Vancouver is going to implode any more than 416 hate to say it. Garth is eating crow. Pretty plain to me.

We have a global slowdown in the world and this is the best that prices can do is not go up as much? Wow goes to show us how strong the market is in many areas.

Garth is full of it. Are his eyes brown??

Vancouver is still cooked. Get used to it. — Garth

#14 wes coast on 06.18.12 at 9:46 pm

From 1990 to 2000 prices up by 39 percent or 3.9 percent annualized.

From 2000 to 2012 prices up 185 percent or 15.4 percent annualized.

Using 4 percent a year from 2000 to 2012 price should be 740K

I don’t see the argument that anything fundamental pushed those homes to where they are now.

Demand through income concentration. As I stated. — Garth

#15 FTP - First Time Poster on 06.18.12 at 9:46 pm

There will be a time when many people on this site heed your words Garth and mutter to themselves: “there but for the grace of God…”.

#16 Toronto_CA on 06.18.12 at 9:47 pm


You’re setting us up to call you on this. So let me.

IF demand in these hoods was always there and supply was always tight, then they should have been highly priced relative to incomes and rentals (fundamentals) for a long long time. This has probably been the case, like the Bridle Path will always be rich family houses and unaffordable.

But the run up you’ve shown us from 2010 to 2012 in your example, going from 1.088m to 1.426m in 2 years? Some of that is not just demand hoods and tight supply, that is a result of credit standards that got loosened all to hell in the last few years.

It doesn’t stand to reason that the impact of cheap easy credit, once removed, won’t bring these hoods back to their normal but still very expensive relative to incomes/rents prices.

What you’re implying is that the housing bubble hits these in only one way, up, and that there is no downside risk or in fact risk at all when cheap credit drives up the asset price.

That’s fundamentally wrong. It was wrong in the US, it was wrong in Japan, it was wrong in Europe and wrong in Australia. IN fact, it’s wrong in Vacouver according to:

There are big expensive houses in demand neighbourhoods that are dropping in price by lots.

I think that SFH in Toronto that are in demand will remain expensive for average folk after the burst as they always have, but to claim that the bubble only impacts them UPWARDS not downwards (“remain flat”) in the long run is were I don’t agree.

Malibu > North York. To claim that this ludicrous pricing is justified and will continue after Canada’s bubble bursts taking millions of FIRE jobs with it is just inconceivable.

But your advice to Luke was spot on. The house he wants is not going to drop in the next couple of months by any meaningful amount.

#17 Frustrated Kiwi on 06.18.12 at 9:47 pm

Followed you all the way up to “Get what other people want – it’s a lot safer.” I think that should be “Get what other people have valued for a while”, as I (and I presume you) don’t see safety in gold or condos, yet lots of other people want them. Those numbers are pretty volatile (small market I guess) but 20% increase in prices in the last six months looks rather extreme.

#18 Blue Monster Lover of Meats and Vegetables on 06.18.12 at 9:48 pm

That’s your reasoning? Fart!
There will be no demand for trashy Leaside when everyone and their cats turns into cannibals. The feast will be massive with bodies everywhere and death pledge nightmares by all.

Looking at the table provided one can clearly see a blow off top currently underway following a very bearish rally previously in 2009 on high volume falling prices.

Leaside will get slaughtered to below sea level at the seaside.

More than a 100%+ increase in 8 years from 1996-1998 then and another 100%+ in the next 8 years from 1998-2012! This balloon could not get any bigger even if it had every last atom of helium left in storage! BANG! DYNAMITE!

That was convincing. — Garth

#19 $B$P$OE$ on 06.18.12 at 9:49 pm

Liquidity = Water flowing over Niagara Falls

Home Equity = The 1500 foot tightrope walk over the Falls

#20 Blue Monster Lover of Meats and Vegetables on 06.18.12 at 9:49 pm

More than a 100%+ increase in 8 years from 1996-2004 then and another 100%+ in the next 8 years from 2004-2012!


#21 zeeman on 06.18.12 at 9:50 pm


Looking at that chart for Leaside, prices just dont make sense that it has gone up this high, where incomes are flat and taxes very high.

It makes high park a sound investment.

Income concentration means people of higher incomes concentrate in areas. Hence, more consistent demand. — Garth

#22 Abstract on 06.18.12 at 9:52 pm

I’ve enjoyed reading this blog for a while now, but I do not agree with the main points of this post.

Past performance cannot be used as an indicator of the future, especially in a volatile market such as real estate.

The fact that prices in Leaside have increased the last 22 years doesn’t give us any clues on what will happen in the future because there are simply too many variables at play, with population being only one of them.

The past doesn’t explain why prices in Leaside went up 20% within the last year, and it certainly won’t predict what will happen next year.

No predictor. An explanation of value retention. — Garth

#23 Mark W on 06.18.12 at 10:02 pm

Vancouver HAM in it’s purist.

#24 Blue Monster Lover of Meats and Vegetables on 06.18.12 at 10:03 pm

More than a 100%+ increase in 8 years from 1996-2004 then another 100%+ in the next 8 years from 2004-2012! This balloon could not get any bigger even if it had every last atom of helium left in storage! BANG! DYNAMITE!

That was convincing. — Garth

Yeah, yeah, yeah…. what he said, same thing!

#16 Toronto_CA on 06.18.12 at 9:47 pm


#25 Toronto_CA on 06.18.12 at 10:03 pm

So rich people moving to Leaside drove the values up and will keep them up, regardless of what happens to Toronto or the rest of Canada when the bubble pops?

I don’t agree that an economic sh*tstorm that results in the condo market plumetting and loss of FIRE jobs won’t cause these rich Leaside folks to lose their jobs/money and cash out. What makes Toronto’s rich hoods more special and immune to a country wide bubble and recession than the rich hoods of LA, like Beverly Hills?

It’s a demand area. What part of that can’t you understand? BTW, the media price in 90210 (Beverly Hills) is $2.4 million, which peaked at $2.8 million in December of 2005. It is again moving higher. What was that point again? — Garth

#26 Tim on 06.18.12 at 10:07 pm

Vancouver is up over 100 percent since you started this blog on telling people not to buy, and despite dire macroeconomic conditions and all of this gloom and doom, it has dropped about 10%. I wouldn’t exactly call that sinking.

The average SFH in Vancouver is up 29.2% since this blog started in 2008. Stop making stuff up. — Garth

#27 Snowboid on 06.18.12 at 10:11 pm

#11 NAM not HAM on 06.18.12 at 9:40 pm…

Not sure about SFHs or trailers, but looks like condos/townhouses may stay flat for awhile:

#28 Humpty Dumpty on 06.18.12 at 10:13 pm

Could wealth preservation be a flawed strategy G…

#29 Can it be? on 06.18.12 at 10:14 pm

Sigh… So many angry posters and I see more and more listings on the market that actually make
Me smile… Market will correct and is starting to

#30 Nick on 06.18.12 at 10:14 pm

Meanwhile, in Los Angeles, whose GDP is bigger than Ontario’s, the medians sales price is 300k. This is what post-bubble looks like.

You mean all 12.8 million people in Greater LA live in $300,000 houses? — Garth

#31 Throwstone on 06.18.12 at 10:14 pm

Garth is right!…On all accounts.

Read his comments of your comments. Then re-read them carefully and you will see the logic.

Good post G.

#32 Tim on 06.18.12 at 10:17 pm

RE# 13 Full of it

I agree. Despite the torrent of bad news and fumbling economies, Vancouver has barely budged to the downside after more than doubling in less than 10 years. Garth is back tracking on Leaside, and you can extrapolate what he says to the entire west side of Vancouver, in fact the entire city of Vancouver, as it is so concentrated and has such limited supply, so based on his Leaside argument, Vancouver proper won’t see much downside- except for those hideous looking glass towers in noisy Yaletown

With the exception Vancouver is regional city with a small population and prices people there can’t afford. Makes perfect sense. — Garth

#33 Throwstone on 06.18.12 at 10:18 pm

Check out the bluffs in north burlington for another example of wealth concentrations.

Then apply the fact that real estate markets are regional…and see how the bluffs. Unlike leaside will decline in value.

simple…fill in the holes.

#34 John on 06.18.12 at 10:21 pm

I think to keep it simple and get a big picture, a full discussion on jobs has to show up. I connected with a family member in Toronto today…someone who is completely liquid and has a lot of cash.

His take is a “correction” and relatively soft landing. And he compared Toronto to London-New York-Paris. On the other end is thinking the upcoming shift won’t wipe out “local dynamics”.

Guess what. Jobs prop all of it up. The ponzi multiples people’s net worth is propped up on can somehow be argued ( still don’t get that). Jobs can’t be.

Of course a serious discussion about fundamentals
( jobs) never emerged. Cross the real estate bubble with jobs reality, and even the “325.000” Leeside fantasy goes under water.

Ponzi’s are multi-dimensional. Jobs bare what’s up. Start with corporate profits being up. Notice how real jobs don’t figure in? Now THAT’s a real ponzi, and that’s plugged into our bubble..and the central banks and Goldman et al.

#35 50% correction predictor on 06.18.12 at 10:21 pm

“When debt-fueled asset price explosions seem too good to be true, they probably are. But the exact timing can be very difficult to guess, and a crisis that seems imminent can sometimes take years to ignite.”

– From This Time Is Different, by Carmen Reinhart and Ken Rogoff



From all the signs we see, the kaboom moment is coming soon. The wait is almost over.

Your patience will be amply rewarded.

Finally you will be able to say: I told you so!

#36 American Werewolf in BC on 06.18.12 at 10:26 pm

EXCELLENT NEWS (to all those living in Leaside)!

Since the value of your home has nowhere to go but up, get ready to sell and trade in for a $500K beauty in Richmond, BC.

Just, er, don’t do this en masse, or, well…wait a minute.

#37 Claudius Emperor on 06.18.12 at 10:27 pm

House prices in GTA corrected in 2008/in the fall, they were down 10-15 percents in just 2 months. Then the ultimate bubble was created with CMHC insuring everyone and 40 years 0 down mortgages.
The prices shoot 40 % up from the 2008 lows (again just 2 months down) in only 4 years.
Without CMHC insanity the house prices in Canada would have corrected in US style.

The decline from the current prices for GTA would be significant – maybe 50-60 percents from the current valuations.
It might lok insane as a prediction but I think I am a moderate optimist.

There are no high paying jobs to justify even 50 % of the current valuations. Period. Just look at Chicago – prices 2-2.5 times cheaper than GTA.

Time will show but I predict Miami and Phoenix scenario for GTA. In the next 2-3 years.

#38 Skyce on 06.18.12 at 10:31 pm

What about the upper-tier home markets in the states? There are many high income neighbourhoods also feeling the pinch:

Art Tassaro, a real-estate agent with Friedberg Properties in the wealthy New York suburb of Cresskill, N.J., said buyers have all but disappeared in the past few months.

“If it was bad before, it’s worse now,” he said.

Asking prices for luxury homes nationwide have fallen 5.4% since Jan. 4, and such homes now stay on the market for 148 days, compared with 125 days at the beginning of the year, according to The Institute for Luxury Home Marketing’s Luxury Market Report, which tracked prices through Nov. 7. The data — compiled by Altos Research — look at prices in the top 10 wealthiest ZIP codes in 30 large metro areas around the country.

“The only sales of million-dollar homes are foreclosures,” Marcell said.

But you are saying, in the event of a market correction, wealthy neighbourhoods in Toronto are immune to any sort of correction?

#39 Keeping the Faith on 06.18.12 at 10:32 pm

#11 NAM not Ham

Garth is messing with you, there’s only 1 street in Hope! “There’s no Hope in Hope…”

#40 Steven Rowlandson on 06.18.12 at 10:32 pm

No individual market is truly separate from another if there is the possibility of using the prices in one market as a bench mark for prices in another. This is done in the gold and silver market and I have no doubt it is done to some degree in real estate. It is this way because of an instinctive tendency for most people to conform , follow the example of others and try to stop others from doing something different. Hence almost all price manipulation is not from individuals but from collective and business entities that constitute politically correct special interests. Supply and demand and the free market is an illusion and are much abused slogans and nothing more. If you have any doubts try offering $30,000 for a bungalow in the GTA or ask perhapse $200,000 for an ounce of silver. You will find out what institutional resistance means. It is not simply a matter of choice on the part of the counterparty, it is out right hostility to the proposition made and to it being made. That is why the world as we know it must end before it can get better.

#41 Claudius Emperor on 06.18.12 at 10:34 pm

And I think you Garth deeply inside completely agree with me.
You just can’t say it publicly.

Ah this society’s political correctness… It makes me sick.

#42 This is Wonderland on 06.18.12 at 10:36 pm

Ya ya hurrah for Leaside, what about rural area’s Garth like King City and Caledon.

#43 Keeping the Faith on 06.18.12 at 10:36 pm

#13 Full of It … You can say that again.
Tuck your mini-manhood between your legs and crawl up in your parents basement, this is going to be one fun ride. Your description of both Vancouver and TO having the same fate is accurate … They are both crashing, like you coming down off your ‘bathsalts’ high.
Buddy, whatever you’re invested in, I hope you’re ready for this ride, I am … IDIOT!

#44 bubble head on 06.18.12 at 10:37 pm

that table means nothings

sales have no direct relationship to price. In 2010 sales were 152 the lowest in over 10 years but the price was one of the highest.
Forget sales its all about active inventory and soon the employment rate.

#45 Keeping the Faith on 06.18.12 at 10:38 pm

Tim, too many dumb posts to quote the # on his post …
You’re an IDIOT!!! Not worth going into the details … have a fun ride down!!!

“Winter is coming”

#46 Miko on 06.18.12 at 10:40 pm

“This is the Blog of Selected Memory. My estimate (as published more than a year ago) is for a 15% national average decline, far worse in markets like southern BC and northern Alberta, zero in the Maritimes, flat in 416 and average or better (15%) in the GTA. Local pockets (like Leaside) where demand has always outstripped supply due to location within a 6-million-person zone, will see little impact. Is all this not obvious? — Garth”

you’ve always said Vancouver and Toronto would be hit the hardest…northern Alberta?

#47 Jeff in Leaside on 06.18.12 at 10:45 pm


For those of you who like ancient history, Garth lived in Leaside for a time during the nineties, and cashed out to move on to bigger things (like being a minister). Lived on the street behind me, met him once while walking my dog.

The wife and I bought our semi in 1993, at the bottom of the bust. At the time, the lowest selling price in Leaside in a decade (and only one house has sold for lower since). $160,000.00 for a semi, which we’ll pay off next summer. Provincial property assessment says it is worth $414,000.00 for 2012 (thank god for appeals).

The Province is currently doing its’ reassessment for the next three years. God help us what they’ll do this time.

Everyone that I’ve met, new to the ‘hood in the last ten years, are people with enough money to borrow the debt load to buy here, just so the don’t spend the two to four hours a day of their life for the commute from Oakville or Bowmanville.

From here, we can drive anywhere downtown in a half-hour at 7:00 AM, or ride a ten minute bus to the St. Clair subway station.

I’m ust appaled at what people are paying for rebuilt pre-WWII houses around here. How can any young family justify paying 1.5 million, even if this place feels like a small town in the middle of the obscenity of Metropolitan Toronto (I still don’t think of it as the “Mega” city).

Just wanted to say hi, never commented before, and wish I’d paid a lot more attention to what you were saying when you wrote for the “little” paper in Tarwana.

#48 John G. Young on 06.18.12 at 10:46 pm

#234 Smoking Man on 06.18.12 at 6:47 pm

Sounds like you had a great weekend.

And yes, I missed you.



#49 Smoking Man on 06.18.12 at 10:48 pm

Between Now and Feb prices in the GTA will drop like they do every year.

But like I said before looking for sand that is quickly turning to a diamond.

South of lake shore, between 1st and 40 st, that is if you can find one for sale.

Buy in Nov or Dec

#50 LH on 06.18.12 at 10:50 pm

Garth, are you long Leaside?
We all know you once owned a SFH there, did you buy in again?

I can do Hogg’s Hollow, if you want. — Garth

#51 45north on 06.18.12 at 10:50 pm

The GTA, like all of BC and Alberta, is not a homogenous clot of uniformly self-centred and irritating metrosexual people. When it comes to housing, it’s a massive weave of individual markets.

good stuff

the angst is over differential decline – all housing will be affected by withdrawal of credit, tighter lending standards but neighbourhoods will not decline synchronously.

here’s a link on the best housing markets in the US:

the link is counter-intuitive – these are the best housing markets after a catastrophic 50% decline – the decline in Canada hasn’t happened. Yet.

I have a cedar hedge 10 feet high, 12 feet wide at the base, 6 feet wide at the top. 80 feet long. Each year I borrow my neighbour’s ladder. There are 3 sections and the angle between sections is adjustable. I adjust the last section so it forms a more-than 90° angle. I lean the ladder directly on the hedge and then climb up. The hedge supports the ladder and me. On the ladder, on top of the hedge, clippers in hand, that’s me.

#52 OwlEyes on 06.18.12 at 10:50 pm

What is with all these poor 20- and 30something peeps writing to Garth for advice with these paltry incomes of $180,000, $160,000 or what have you. They should be forced to tell us what they and spouse make that money doing. What the heck are they doing? Are they all doctors?
And what about this business of “averageing” $180 family income just before a first baby is about to be born… can they really say that they are making that much?

#53 American Werewolf in BC on 06.18.12 at 10:52 pm

Id like to add that I don’t know the first damn thing about GTA, but I don’t have to. When prices everywhere are this divorced from the fundamentals, the only thing sustaining them is perception (even if perception is regionally dependent, it is perception nonetheless).

You can live in the prettiest, smartest, wealthiest, elitist little oasis in the damn world, but when your country is caught in a turbulent maelstrom, when your children and friends are losing their savings and futures in adjacent areas, when you can’t turn on the news and enjoy 30 minutes without seeing a blurb about the latest bloke who hung himself (or shot himself, or burned himself) over a bad real estate investment, your perception of your own granite countertop might degrade a few notches. Its going to get ugly, and everyone will be exposed to it through some immediate degree of separation (even if the wealthy don’t want to trouble their pretty little minds with it, the truth will ejaculate in their faces).

Perhaps only God could make this declaration about His own hood and influence perception enough to create a self-fulfilling prophecy so His own dig didn’t drop in value, but we have all since learned He is just a fairy tale. Things will get rough, and unless all of GTA practices ostrich yoga in their newly finished basements, they will notice as well, and buckle as well, and fret as well, etc

#54 wes coast on 06.18.12 at 10:54 pm

Demand through income concentration … – Garth


I agree that this plays a factor in more desireable areas growing above the rate of inflation and not correcting as severely but you can’t say the rate of acceleration in price growth isn’t correlated to credit in some way. The wealthy (or wanna be wealthy) can lever themselves up as quickly as anyone else.

We can go back and forth but unless we could figure out how much leverage played the factor in bumping prices up in Leaside (verse real wealth accumulation) we won’t be able to prove our point

As this is your blog. You get the last word.

#55 Grooby. on 06.18.12 at 10:54 pm

Garth, I applaud your resilience in the face of such ill informed comments.

What people are not factoring in here is the redevelopment costs of units in now trendy Leaside. Surely one realises that the house and all its amenities in 1990 do not compare with whatever has been built there since? It’s not entirely just about land value.

#56 Toronto_CA on 06.18.12 at 10:58 pm

“It’s a demand area. What part of that can’t you understand? BTW, the media price in 90210 (Beverly Hills) is $2.4 million, which peaked at $2.8 million in December of 2005. It is again moving higher. What was that point again? — Garth”

So Beverly Hills is down $400k from it’s peak and still down 7 years later, and the huge houses are owned by some of the richest people in the richest country on earth. But Leaside won’t fall at all, why?

That’s my point. But you’re sure obtuse today! Demand areas get hit when the bubble burst. It happened there, it will happen here.

Let’s look at desireable hoods in Phoenix or Miami, too?

US prices fell 34%, Beverly Hills fall 16% and is recovering. Don’t blame me if you pick bad examples. — Garth

#57 Revisionist on 06.18.12 at 10:58 pm

Garth! You revised your view on SFH in 416. When are you going to revise your views on condos?

Get your mom to read you this article. Slowly. — Garth

#58 PatienceIsAVirtue on 06.18.12 at 11:03 pm

“Perhaps more than anything else, failure to recognize the precariousness and fickleness of confidence – especially in cases in which large short-term debts need to be rolled over continuously – is the key factor that gives rise to the this-time-is-different syndrome. Highly indebted governments, banks, or corporations can seem to be merrily rolling along for an extended period, when bang – confidence collapses, lenders disappear, and a crisis hits.

“Economic theory tells us that it is precisely the fickle nature of confidence, including its dependence on the public’s expectation of future events, which makes it so difficult to predict the timing of debt crises. High debt levels lead, in many mathematical economics models, to “multiple equilibria” in which the debt level might be sustained – or might not be. Economists do not have a terribly good idea of what kinds of events shift confidence and of how to concretely assess confidence vulnerability. What one does see, again and again, in the history of financial crises is that when an accident is waiting to happen, it eventually does. When countries become too deeply indebted, they are headed for trouble. When debt-fueled asset price explosions seem too good to be true, they probably are. But the exact timing can be very difficult to guess, and a crisis that seems imminent can sometimes take years to ignite.”

– From This Time Is Different, by Carmen Reinhart and Ken Rogoff

#59 D from the P-town on 06.18.12 at 11:03 pm

Odd how home prices increase with falling interest rates.

#60 DJM on 06.18.12 at 11:04 pm

So is it still safe to say that the average Toronto home will once again be affordable to those earning an average Toronto income?

All you seem to be stating here is that Toronto is developing new choice neighbourhoods where the wealthy choose to congregate. Leaside is becoming another Rosedale, Forest Hill, Bridle Path, etc.. This is just an evolution of the City itself. There are some areas where real estate is just not accessible to a family with a sub 200K income. I accept that. No big deal.

I want to know what’s going to happen to places where regular earners want to raise families. Leslieville, Riverdale, the Junction. These average folks are the people who, I believe, are being stretched beyond their means when they jump into the expanding bubble. They are the people hurting from the cost of living running wild while incomes stagnate or drop. They are the people who can’t sustain a 600K mortgage for a rundown semi-detached. Or if they do, they’ll soon realize they’ll retire into poverty.

What’s a young family to do? Admit defeat and move to Brighton?

There are a lot of houses between Leslieville and Brighton, neither of which I would choose. — Garth

#61 wes coast on 06.18.12 at 11:05 pm

# 54 Grooby

Houses built with inflated copper and other inflated material prices. Inflated labour prices. Yes the houses ‘cost’ more than the 90’s but you can’t say they are worth more.

Return material costs and labour costs to their long run average and I can build you a house for half the price.
And when they do return all that copper, lumber and labour that went into Leaside will return to the long run average too.

#62 Boombust on 06.18.12 at 11:06 pm

Your point is well taken, Garth.

In the 1982 RE meltdown, for example, Vancouver’s West Side neighbourhood of Kerrisdale actually incresed in value when everywhere else tanked.

#63 Jon B on 06.18.12 at 11:08 pm

How about turning the blog spotlight on climate and how it affects values. Or maybe it doesn’t. Van city and region have the highest home values in the country but we’re still in the latter stages of winter (defined as the time of year when the sun rarely comes out). Home heating systems are running and it rains every few days. How can people possibly be lured to this outdoor cave with the certainty of outrageous costs for shelter. I’m in the buyers remorse phase – 17 years after the fact.

#64 Bandiguile on 06.18.12 at 11:08 pm

Vancouver West is also high in demand, yet…

#65 Boombust on 06.18.12 at 11:09 pm

#53 American Werewolf in BC on 06.18.12 at 10:52 pm

“Id like to add that I don’t know the first damn thing about GTA, but I don’t have to…”

So, shall we say, “American”.

#66 American Werewolf in BC on 06.18.12 at 11:10 pm

“US prices fell 34%, Beverly Hills fall 16% and is recovering. ”

I think that the point is that Beverly Hills wasn’t “flat”. Even that was hit, though less so.

People will only assume debt (buy a home) if they perceive that every year that passes will result in appreciation that offsets (or cancels) the cost of borrowing. That perception sustains housing prices (the lack of it causes immediate bursts). When all hell is breaking lose, will enough buyers have that perception to keep prices flat anywhere? In your cushy little example, will 100% of the normal demand retain this type of perception while watching the shit hit the fan elsewhere?

The build up an crash is hardly about real value. Its about psychology and perception. I think that you are making some outrageous claims about human psychology with this post IMO.

#67 Toronto_CA on 06.18.12 at 11:11 pm

“US prices fell 34%, Beverly Hills fall 16% and is recovering. Don’t blame me if you pick bad examples. — Garth”

So what makes Leaside or other hoods in desireable areas immune to a fall in Canada when in other countries they fell (okay not as hard, but still fell) when the bubble burst? I guess that’s what I’m asking and you’re not answering.

I get that the area is not inflated as much by cheap easy credit but rather from high income people moving in and driving values up; but surely it’s a mixture and both factors will be removed if/when the crash happens? Flat after crash implies that cheap credit had no play in this, which I don’t believe.

(It is rather ludicrous to compare Leaside to Beverly Hills, btw. )

I guess we’ll see how it plays out. I hope you’re wrong, so that clouds my ability to reason without bias here so I’ll stop. I just don’t understand how Canada’s in demand hoods are different than in demand hoods everywhere else. Great post as always, Garth.

#68 American Werewolf in BC on 06.18.12 at 11:17 pm

#65 Boombust on 06.18.12 at 11:09 pm

Are you referring to my honesty or my ignorance? :)

Hey, not knowing or giving a shit about GTA seems to be the one thing I have in common with so many BCers I meet.

#69 rentin on 06.18.12 at 11:24 pm

The average SFH in Vancouver is up 29.2% since this blog started in 2008. Stop making stuff up. — Garth

Ok, I will be the first to admit, Garth kind of pooped the timing on this one. Yeah sure after the market drops 25% we will be back at at 2008 levels. May take 2 years to get there, so in 6 years since 2008 you have not lost money on a house. (Inflation, lost opportunity, tvm, maintenance, taxes, another story)

Why does Garth’s message get garbled? Well aside from being a politician and cleverly bending the truth to get his message across, the readers here expect Garth to miraculously predict, to the week and penny what’s going to happen. People stop. It’s not good for your investment strategy and it’s going straight to Garth’s head.

Let me try to sum it up from what I have read since the “sexy mortgage” and crashing in Kelowna post, that’s how I found this site.

House prices will not go up forever, especially like they just have. Rent. If you need to buy, buy what you can afford. Diversify.

Kind of simple right?

#70 Mr Buyer on 06.18.12 at 11:25 pm

Tokyo has areas of the city that are more expensive even post crash. The staggering prices these areas achieved at the height of the bubble did not persist post bubble. That being said they are still the most expensive areas of Tokyo.

#71 john on 06.18.12 at 11:26 pm

doesn’t anyone remember the 80 s when real estate went down over 50% in BC

#72 truth hammer on 06.18.12 at 11:30 pm

The moral misfits at Stats Can announced another ‘benchmark average’ for Canadian households….and as we all know that averages are for idiots and con men …lets see what the braintrust has come up with…….apparently the ‘average household income’ AFTER TAXES….is $65,000.00….excuse me…….Bwahahahahahahahahahahahahahahaa!!! OK ….I’m Back.

Now…back to reality……..lets say one Canadian in the sample made 10,000,000 ( and yes there are quite a few) …then a sampling of 1 thousand Canadians making one hundred thousand would yield an average income of $ 1,090, 000 .00. Ergo…avergaes are not very accurate measurements of population statistics are they…..shame on you stats can.

Question: Why does Stats can exist? What planet do they occupy? Who do they think the’re fooling? And more importantly…..why are they trying to fool us?

BTW…….to net $65000.00 After Taxes (they don’t tell us whether these are Federal-Provincial-Direct or Indirect inclusive of all deductions…so rather nebulous from the onset) a Canadian ‘average income’ is well over $100,000.00 p/a…………doesn’t add up on Mainstreet. We either all have civil service jobs or somebody at stats can is yanking our chain. Why?????? To make you feel better about the tax hikes that are surely in the pipe after the next round of civil service pension ‘adjustments’?

#73 truth hammer on 06.18.12 at 11:32 pm

oops…’sampling’ of 99 Canucks making $100,000 + the ten millionaire ( hockey player?) damn fat fingers

#74 Miko on 06.18.12 at 11:34 pm

your analysis sure doesn’t work for the Vancouver market, Or California’s Montecito, or many others.

Are you aware that the most desirable hoods in Van are suffering the most right now?

#75 patiently waiting on 06.18.12 at 11:34 pm

#23 Mark W on 06.18.12 at 10:02 pm

Vancouver HAM in it’s purist.
Wow $31,900,000 talk about inflation . . . this home was purchased in October 2003 for $6,000,000, and was on the market (but did not sell) in January 2010 for a paltry $17,900,000 . . . they better hope the eventual buyer is smoking something more potent than the seller, . . . it doesn’t even look like there were any renovations done . . . WTF . . .

V806985 Expired $ 17900000 31-Jul-10 V39323

V002904 V806985 Active $ 17900000 28-Jan-10

V39323 V002288 V317376 Sold $ 6000000 02-Oct-03

V5894 V002952 316 V317376 Active $ 6800000

20-Nov-02 V5894 V002952


#76 Flynn on 06.18.12 at 11:37 pm

If the Toronto market is anything like the Southern California market than all areas are going to be hit hard. SCAL is at least 5 times larger than TO and has a lot better weather, food and wine. Yet prices in Malibu, Santa Barbara, Beverley Hills, Del Mar,Coronado, etc have all been hit hard.

#77 Mr Buyer on 06.18.12 at 11:47 pm

Hey free up the bandwidth. Communication giants are throttling bandwidth and stymieing fiber optic to the home to protect other divisions of their conglomerates. These are monopolies exerting influence to protect other monopolies in other divisions of these conglomerates. It is time the CRTC started thinking about licensing an independent internet giant of a start up that will provide open bandwidth (or a functional equivalent up and down) to a huge proportion of the country. This is like revisiting the first railway across Canada (Imagine unlimited crystal clear hd video conferencing for a reasonably small monthly fee). Progress is not marching on but rather crawling
under the auspices of these conglomerates that offer internet services in addition to their bread and butter divisions. I think this would be a good election issue but I do not think it should displace quality health care on a political agenda but it will get the young vote (they may even show up at the polls on election day) .

#78 American Werewolf in BC on 06.18.12 at 11:49 pm

A final piece of advice for anyone living in these elite, wealthy, protected bubbles: even if your home won’t drop a penny in value, put it up for sale now.

The reason is simple: that incompetent, ignorant, balding neighbor of yours who fetches his paper in his bathrobe–half the man you will ever be–will turn tail and run at the first hint of trouble (not knowing better). In fact, all your ridiculous, annoying neighbors who can’t invest their way out of a paper bag are going to waiver after calling their favorite nephew and explaining how frightened and confused they are.

Do you really want to be the on left in the cold, surrounded by catchy For Sale signs, holding your manhood? I tried that and sold after 3 years of bubble-deflating hell coupled with a blood-letting 30% price reduction.

Get out now–not because your precious, granite adorned home will fall in value–but because your panzy, uninformed neighbors are going to screw you and its best to screw them first.

Want proof? Well, you’ve already considered it twice since you started reading my post, and that blue-haired woman on the corner who does her crossword daily in her tan brassiere finished my post 3 minutes ago, and is already on the phone with her smartest grandson. Just ask her.

#79 Tim on 06.18.12 at 11:50 pm

#45 Keeping the faith
I’m making an observation based on the local market. You can’t even offer a reasoned analysis or an articulate argument because you don’t have the mental capacity. It is dolts like you who probably buy into the real estate hype. Do us all a favor and don’t post unless you have something intelligent to say.

#80 Snowboid on 06.18.12 at 11:51 pm

#72 truth hammer on 06.18.12 at 11:30 pm…

Once again you have shown your innate ability to read without understanding.

It has nothing to do with ‘benchmark average’ (whatever that is).

It’s median after-tax income, which includes government transfers (median of $ 6500 per two or more person family), not just market income (median of $ 56,700 per family).

After taxes refers to income tax (Fed and Prov).
Please see the actual release at

and read carefully, refer to the charts if you want.

#81 Jason on 06.18.12 at 11:53 pm

Doesn’t this completely contradict your “nowhere is immune” comment to my post about highly sought after T.O. hoods being safe from any negative correction?

No place is immune, but neither are they all the same. — Garth

#82 Dave on 06.18.12 at 11:54 pm

Garth if the Leafs ever make the playoffs, will it make the values in Leaside climb even higher?

#83 Smoking Mans smarter cousin on 06.18.12 at 11:54 pm

Sorry 416

Legal Notice:

After viewing History Channel documentary War of 1812, we did a bit of digging, and found that small error re the borders.

Southern Ontario actually belongs to US, you are collateral for Goldman Sachs derivatives and sub primes,( but you can keep your sh*tty Hockey team and Don Cherry .)

PS expect a lot of Greek refugees.

#84 DMZ on 06.18.12 at 11:55 pm

#72 Truth Hammer,

better brush up on your math. The average of your example would be (1×10,000,000 + 1000×100,000)/1001 = $109,890, not $1,090,000 as you state.

Also, you appear to be confusing the ‘Canadian average income’ (your words) with StatsCan’s average household income. Remember that the household income often includes two (or more – think of the boomerang gen-Y’ers) wage-earners. That’s what brings it up. No one is suggesting that the average taxpayer is bringing in $100k+ gross.

Just sayin’.

#85 Ron on 06.19.12 at 12:04 am

I am 100% convinced that we are at the ACME moment in BC. New listings are laughable and red dots are piling up. June 2012 was the month that the ‘arse fell out’.

#86 Stupesing in Cabbagetown on 06.19.12 at 12:05 am

#72 truth hammer – $65 thousand after tax is median income, not average. “The median is the level at which half the population had higher incomes and half lower, hence is considered a reliable indicator of the overall trend in the country.” See this story from the Canadian Press.

#87 Inglorious Investor on 06.19.12 at 12:09 am

The Canadian banks could not have reaped a bigger windfall if they had planned it this way from the start.

Think about it. This latest era of cheap money accomplished something absolutely wonderful for Canadian banks. It managed to entice a record number of Canadian households into mortgages, that, in reality, most of them could not afford.

Counterintuitively, this occurred largely at time when the economy was stagnating and so were incomes. Why did this happen? Simple: even with a slack economy, between cheap money, intergenerational wealth transfers, immigration, and hot money, there were still plenty of funds flowing.

Now, if the economy were to accelerate, that would be great for the banks. No only will they have record numbers of people sending them monthly payments for the next 20 or 30 years, but they will also sell more business loans, car loans, student loans, etc.––and don’t forget credit cards!

But what if the economy does not grow much, and most incomes continue to stagnate or worse? The banks still win. Why? Because they’ve ALREADY won. Think of it this way. We measure economic health mainly by growth in GDP. GDP depends on spending. That means that if the economy stagnates or shrinks, anyone with something to sell (which is just about everyone) will be competing for relatively fewer dollars.

But not the banks.

You see, they already captured a huge share of future GDP by enticing everyone into long-term debt contracts which have secured a huge amount of future spending. If the economy gets worse and people are forced to cut back on spending, they will give up many things (vacations, new cars, gadgets, cleaning service, lawn care service, etc.) before they give up their homes. And if the economy gets really ugly and we have US-style foreclosure rates, F, C, and H (or their successors) will be there to bail them out–with YOUR money!

Heads, they win. Tails, you lose. Yep, it could not be better for the banks if they planned it this way. And Carney is telling Canadians to ease off the debt. Talk about the proverbial barn doors and the escaped horse. What’s been coming out of Carney’s mouth is the same stuff the horse put out, from the other end.

Now, one way or the other housing will have to come back into balance with reality. No matter how that happens (crash, slow growth, or flat nominal prices), housing will be a dead asset, or worse, for years. Enjoy your homes, and your debts. Both may be with you for a long time.

#88 DISAPPOINTED on 06.19.12 at 12:21 am

This is just another example of how wrong the author has been over the last few years of forecasting. Rarely has a position been taken like this in the previous posts.

Rather than saying keep waiting for the eventual crash, the advice he should have provided in 2008 was buy into those areas that are well-positioned over the long run.

Instead, we get defensive responses that mask the mistakes made in the past. Eventually he will be right about something (as all those on the negative forecasting side are), but I wouldn’t bother reading this site for anything more than the creative writing it dishes.

It’s only entertainment

Actually 9 of 10 people cannot afford demand areas without subsuming their families in debt. Advocating that is unethical and irresponsible, which seems not to bother you, but advice I would never give. This blog is troubling today, for the same reason it disappointed on the weekend. So many angry people feeling entitled and yet disenfranchised, only too happy to see economic structures crumble so others are toppled. This is not going to happen on any wide-scale basis. The path ahead is through careful, concerted personal action, not ranting about an undeserving overlord class. Anarchy doesn’t work. — Garth

#89 Observor on 06.19.12 at 12:32 am


It is human nature to interpret average or mean as typical.

Usually it is not the case.

Household Income has a wide spread. It tends to increase with the number of occupants in the house.

It increases with age typically (until retirement).

It increases (on average, if I may say so) with education, and with effort too (ALL else equal)

Imagine a swimming pool 3 feet deep in one half and 7 feet deep at the other half. The average is five feet and yet basically none of the pool is five feet deep (save maybe an infinitely thin line across the ramp from 3 foor to 7 foot section).

It’s sad fact of life that many people make more than I do and more than you do. There simply is no typical income. There is an average income and there is a mean income. But there is no typical income that applies to say 30 or 40% of the population. If you come up with typical it will be a wide range..

The mean number of children for mariired coupled might be 1.1 but not a single couple has 1.1 children.

When you start questioning Stats Canada you are wasting your time.

Spend time making and investing money not worrying about data conspiracies at Stats Canada.

For time immemorial, houses have been unaffordable and yet somehow people afford them. Yes they are over-priced now. If you think so, don’t buy.

Really, there has never been a time in my adult life going back to 1980 or so that there were not crys for “affordable housing”. A certain segment of society is always unable to afford single family homes. It has ever been thus. It’s worse now though. (Which is nice for those of us who bought years ago, but bargains will return at some point).

#90 Nostradamus Le Mad Vlad on 06.19.12 at 12:36 am

“When prices go up, owners hang on. When values fall, people bail. It’s why most people are financial failures, an entire population thinks it can defy gravity and walk on air. Last, don’t mess with me.” — Airheads floating on bubbles?
#293 GregW, Oakville on 06.18.12 at 7:15 pm — Hi Greg, good to see you’re still around. We’re all cool and wet here, but this week the temp. if finally going up. Thanks for the links!

#34 John — “Cross the real estate bubble with jobs reality . . .” — Hi John. See first two links about 874K youth unemployed in just over a decade, and how Cameron says the recess- / depression may continue.
874% rise in just over a decade Long-term youth unemployment in UK, and Dragging out the recession; At last A politico who keeps promises; Newspapers The ‘net is the future, and is now; Lazy Greeks? It wasn’t Greek citizens who started this mess, but they’re paying the price of others’ greed; New Shed Bigger than the one in Garth’s pic; Good For Her Young lady hit the big time in biz.;
The Fourth Reich is destroying the Euro; Two Tables from GS; Leaving Las Vegas or Athens? Living Without Money for 16 years; Nokia or RIM Which falls first? FB soaring; Chart Of The Day.

A link posted in the previous thread said Obomba was blaming the EZone for the US’s troubles. Now, the roles are reversed; The Fourth Reich exiting Europe? Frau Merkel; Five Ways to eat healthier and save money; Bitcoins Replacing the Euro? 1992 all over again; EU Banking Union, and Greek Social Explosion; Rothchilds and Gold Fixing, etc; 62% of Americans think country is in a recession. They may be right.
Pakistan If true, this would throw a spanner in world events; Phil Collins No comeback; 3:18 clip Mushroom cloud over Beijing the weekend just passed; Norway gets power from the moon; The Muslim Brotherhood took the Egyptian elections; Big Parma is pissed; Unknown Drone exposed by Google Earth? Hydroelectric Plant Germany has the nicest one; 90 Days to build the world’s tallest building; New Megadrone To keep sheeple in line; Eugenics Poisoned meat gel of TPTB; Autism, Chemicals and Water Supply Possible link; Back On Grid By order of der Fuhrer; CIA – NSA Always around to cause trouble.

#91 ALE on 06.19.12 at 12:42 am

Garth, who knew you were so sensitive.

By the way, it’s still not different anywhere in T.O.

#92 Carpe Diem on 06.19.12 at 12:42 am

69 rentin

“so in 6 years since 2008 you have not lost money on a house.”

Here is math course for you (and others)

100,000 x 28% = 128,000

128,000 – (128,000 x 25%) = 96,000

100K to 96K = 4% loss on total value.

So some dude goes off and pays 500K for a place with 20% down.

This place will go up in paper value to $640K but then drop to $480K.

On a $100K down payment that mean a 20% loss.

On 10% down payment the 50K investment will have a return of -40%.

On a 5% down the 25K will have a return of -80%.

I just don’t see where you can state no loss ….

#93 The RealTruth on 06.19.12 at 12:45 am

And Regarding Beverly Hills Garth,

The most in-demand micro-areas are attracting top dollar. Yes more than in 2006! The only part that area that is ‘down’ a little is the North slope of the hills.

and the Malibu Hills….this place does not know income:homeprice ratio. Best place to live in the world IMO!

#94 Alex on 06.19.12 at 12:47 am

It makes sense Garth, prices in Boston fell only 5-10%. Thanks for the interesting topic!

#95 earlymidlifecrisis on 06.19.12 at 1:01 am

@23- But that’s a really nice hood. . . . For fun i did the math. if i could afford the 600k plus property transfer tax my mortgage would be approx 136k per month. As for the population generalization, I havent been to the island lately but I’m pretty sure 90% of the metrosexuals live in Vancouver. Kelowna has a few, usually in the starbucks. My new landlord looks like a metrosexual, and he’s from Toronto!

#96 grantmi on 06.19.12 at 1:09 am

#23 Mark W on 06.18.12 at 10:02 pm

Vancouver HAM in it’s purist.

What a P.O.S. “` it only has an outdoor pool!! :-)

Move Along! Nothing To See Here!!!

#97 Jim on 06.19.12 at 1:17 am

#52 OwlEyes

It’s actually not hard to get a 180k family gross income in Toronto. A business analyst working in downtown in most industries can command 70k with only a few years experience. Project managers and other white collar professionals are above that. Add to that total lawyers, bankers, accountants, government workers, university professors (etc). Downtown toronto pays pretty well compared to many other areas, particularly Vancouver (cough cough).

Of course, I’m not claiming that the median for toronto as a whole is anywhere near 180k for a family. However, white collar types with two wage earners can get up there pretty easily.

#98 mac on 06.19.12 at 1:20 am

990K to 1.425 isn’t going to reverse in Garth’s world view? Huh? Backtrack anyone?

My, we’re bitter today. — Garth

#99 Devore on 06.19.12 at 1:53 am

I don’t know why this is such a shocking thing to say. Seems rather sensible. If you can’t afford to buy a house in, say, Dunbar, or Oak Bay, or Mount Royal, or whatever, today, you still will not be able to even when the market bottoms. Today we are in the somewhat rare situation where someone of modest means can still LIVE there, by renting, but one should not confuse that with buying.

On the positive side, areas where you can afford to buy in today (via financing), but don’t want to because prices are obscene, will find them much more reasonably priced after the correction runs its course.

And that is as it should be. Areas that are not in your affordability bracket, will remain outside your reach if your income does not improve. But lower prices mean lower debt, that is easier to pay off, even if interest rates are higher, and a better selection of properties, with sufficient time to allow for the necessary due diligence and consideration before such a weighty purchase.

#100 Pat on 06.19.12 at 1:53 am

“US prices fell 34%, Beverly Hills fall 16% and is recovering. Don’t blame me if you pick bad examples. — Garth”

16%*2.8mil >> 34%*0.2mil

as for “recovering,” it is more like staying flat in nominal prices… due to low inventory… due to hurdles in clearing distressed properties

#101 Canuck Abroad on 06.19.12 at 1:58 am

Oh boy, next it will be “The Real Housewives of Leaside” or “Leaside M4G3B”…

Garth it would be very convenient for all if you could put together another little chart with a list of all Toronto neighbourhoods and whether their prices will go down or stay flat over the next decade. Thank you in advance.

#102 Devore on 06.19.12 at 2:08 am

Get what other people want – it’s a lot safer. Second, buy what you can afford, which was my entire point with poor Jake.

Can’t people just be happy with what they can afford? Even a person with zero income lives better in Canada than the average citizen of many other countries can hope to. You have a roof over your head, and food on your plate. A billion of other souls are not so lucky.

I mean, it’s fine to aspire to higher goals, but you need a realistic plan to get there, and be putting it into motion daily. Whether that’s getting a better job, starting your own business, marrying rich, you need some way to reach your goals. Hoping to win the lottery, inherit, or even worse, for misfortune to befall the more successful one, is not a plan. That’s just good old fashioned coveting. Isn’t there a commandment for that?

Make the best of what you have, and focus on what is within your grasp, which is a lot. We are fortunate in Canada. All this whining and kvetching is making me ill. Unlike Garth, I don’t have my own personal Amazons to soothe me. And I’m ok with that.

#103 bill on 06.19.12 at 2:11 am

#62 Boombust on 06.18.12 at 11:06 pm
I seem to recall my parents place losing half its ”value”… and then increasing some years later by a considerable amount.
do you mean kerrisdale rebounded quicker than other areas? I seem to recall that .

#104 Jane24 on 06.19.12 at 2:40 am

Well in comparison to Toronto, house prices in London, England now look very affordable and here in the South of England it seldom snows and paid holidays start at 5 weeks a year.

My daughter has brought a new but existing one bed condo on the London tube in zone 2 and 20 mins from downtown London for $215,000 with high specs. Building maintenance is $450 per YEAR.

Sell up guys and move over or go somewhere else in the world where the living is cheaper. Cash in. Barcelona has some fab buys right now and that is an incredible city. So many places where you can live for life on TO and Vancouver house money.

I was in TO in the Spring for my yearly trip home and I couldn’t believe how expensive EVERYTHING was. Nobody seemed to have any spare money either. People just seem to pay those prices though and sit in that snow, no idea why.

#105 DondWest on 06.19.12 at 2:44 am

Garth, you’re DIRT WRONG about Leaside for three reasons:

1. Yes, the average Leasider is making $325,000 a year, but you forgot the most important stat. What do they actually do for a living? A quick glance at the stats reveals that approximately 70% of them are in sales/finance. Hmmm, sales/finance, do you suppose many of them making a living SELLING REAL ESTATE and issuing out mortgages?! STRIKE ONE!

2. Leaside is NOT Beverley Hills or Santa Barbara. Do you truly want us to believe that the rich and fabulous the world over want to flock to Leaside or even Toronto for that matter? Toronto, the city that had to call in the Canadian military to bail it out from a snow storm. . . STRIKE TWO!

3. As someone experienced in politics, I’m surprised you’re overlooking the storm that’s coming – AN NDP GOVERNMENT! Trust me, the die has been cast, Mulcair is smart enough to play the cards right. He’ll merely point out all the “dirty foreign money” that has entered the country and that hasn’t been taxed. There will be outrage as the people discover none of this money is being taxed while these people enjoy our social services. Even the rednecks in Alberta and BC will join forces with Mulcair as they feel betrayed by Harper. Mulcair will launch a “tax the rich” campaign that even the right of center will get behind. It will be a political slaughterfiest! With an NDP government voted in; the “International Investors”, *cough speculators*, in real estate will move out. What do you suppose will happen to Leaside then? STRIKE THREE!

Or you could believe I’m wrong and you’re right; and buy a lovely Leaside bungalow. After all, if prices only go flat and go up, how could you go wrong? I have just the lovely house for you:

I did not make a contrast to B.Hills. That was another poster. NDP will never form a national government. — Garth

#106 The American on 06.19.12 at 3:12 am

Here’s the deal… Prices will still fall, even in affluent, highly-desirable, and populated areas. They have in nearly every “rich” neighborhood of nearly every major American city. The difference is that prices did NOT decline in these areas nearly the degree that they fell in other neighborhoods. My gut-check is the more affluent, highly-desireable neighoroods’ declines were oly about half of the declines in other areas of the same cities. This includes thse types of neighborhoods in cities such as L.A., San Diego, Chicago, San Francisco, Seattle, Portland, NYC, Atlanta, Dallas, Houston, San Antonio, Austin, and yes, even Phoenix and Las Vegas. Prices will definitely fall, but just not nearly the degree percentage wise.

#107 Ding dong on 06.19.12 at 3:16 am

Looking at the Avg. price graph, it wouldn’t be unreasonable to see it “normalize” in the $800-$900k range. Still not cheap for a nice place, but a pretty painful haircut to your net worth, even if you’re wealthy folk.

Another day with price changes outpacing sales 2-1 here in Van. I really didn’t think it would start to soften here until rates went up. Even my lemming in-law uncle was concerned about house prices and the prospect of a crash yesterday. This is the same guy who thought I was bat-shit crazy not to buy a house back at Christmas. Lol!

Can’t wait to see how people crack after the third rate hike by the BoC, there will be some serious soul searching going on out here in Lotusland. May take a few years, but then again we may not see a bottom formed here for 8-15 years yet. We are maybe a quarter mile into a marathon here.

#108 The American on 06.19.12 at 3:24 am

By the way, for the record, Beverly Hills is not even close to being the richest neighborhood in the U.S. (not even a top 100, by the way). I think this is often a misunderstanding that is perpetuated by movie glamor and media exposure, which creates this perception. Hell, Hunts Point/Clyde Hill, a very nice neighborhood in Seattle, has a median sales price exceeding $7.7MM (not shitting you).

#109 Aussie Roy on 06.19.12 at 4:28 am

Aussie Update

Garth is correct some prices will hold, the smart ones here know this means they are actually falling when adjusted for inflation. My guess these areas will not increase while wages (thanks to inflation) increase.

So if your investment model needs capital appreciation to make money then sorry you will be out of luck for the next 10 years +.

One of the many reasons why the Aussie market has fallen and will continue to deflate is, negative gearing. NG needs prices to rise to cover the shortfall between rent received (4%) and interest payments made (7.2%), otherwise buying that negatively geared investment property is just a way to lose money.

The glory days are over and what drove them is dead in the water. It’s only the “Greaterfools” that still talk about, prices doubling every X years and other such delusional bulls*&^t.

Neo-Classical economist trys to explain why, we are not buying houses when it’s such a SAFE bet they will be a GREAT investment – LOL

Yet another contradiction to ponder about our economy: of the two biggest purchases most Australians make, one is going gangbusters while the other is flat and getting flatter. Go figure.

And the one that is booming is guaranteed to be a completely dud investment, rapidly and inevitably losing value by double digits a year, while the laggard historically has done quite well, appreciating well ahead of inflation.

No prize for guessing the first is car sales running at near-record levels while the second is moribund housing.

Yet another economist who doesn’t know, emotion and debt drive housing prices, wages drive SUSTAINABLE house prices.

Here in Australia we slowly inch closer towards the underlying sustainable price driven by household income every day, only about another 25% to go.
The slow melt has many, many more years to run.

As always Garth, you do a great job spreading the logical truth and dissmissing the delusional, vested interest spin.

#110 daystar on 06.19.12 at 4:58 am

Garth, have you seen the alternative ending to this thread?

The trailer:

(nah, I like this version better :)

What caught my interest tonight in comparison to stats yesterday was average incomes in Leaside at $325,000. The census back in 06′:

… had Leaside incomes pegged at $82,670. This number would have been reflective of 2005 earnings and $325,000 would have been reflective presumably of 2010 but that’s quite a jump in average income over a 5 year period where roughly 17% of the houses there changed ownership during that time. Is it Leasides proximity to the financial hub of Canada driving incomes? Dunno but its quite a bump over 5 years.

#111 daystar on 06.19.12 at 5:08 am

#47 Jeff in Leaside on 06.18.12 at 10:45 pm

Its funny that you would mention being appalled at prices for pre WWII homes in Leaside. That was my impression when I looked up Leaside last night and read this link.

… and looked at valuations Garth provided. Communters dream I guess. Think there’s a chance Leaside faces highrise development over the next 20 years?

#112 The real Kip on 06.19.12 at 5:32 am

So, today I learned, Leaside has immunity and, there are others.

Hopefully you learned what an average means. — Garth

#113 Deb on 06.19.12 at 6:07 am

When looking at housing prices in a particular area, or comparing current to past prices, the average is usually used as the statistic of choice rather than the mean. It’s unfortunate, really, that both are not used more often as each will provide a very different view of the same picture. Many prefer the median figure as the better of the two because it serves to smooth the effect which both the extreme high-end and low-end properties for sale has on the final number that is calculated. It is something to keep in mind when looking at prices in a certain neighbourhood, locality or region.

#114 John on 06.19.12 at 6:49 am

Daystar wrote:

“… had Leaside incomes pegged at $82,670. This number would have been reflective of 2005 earnings and $325,000 would have been reflective presumably of 2010 but that’s quite a jump in average income over a 5 year period where roughly 17% of the houses there changed ownership during that time. Is it Leasides proximity to the financial hub of Canada driving incomes? Dunno but its quite a bump over 5 years.”


You just exposed the obvious yet again. Yet you’re still maintaining the premise of the argument you unwittingly debunked?

Why not do an article on global derivatives and the Canadian economy. Use Leeside as a “pocket community” that’s easier to read. Mention Goldman Sachs et al.

Any ideas on “drivers”? Three suggested categories:

1. Obvious
2. Overwhelmingly obvious
3. Blisteringly obvious

#115 Toonie on 06.19.12 at 7:34 am

re: NDP won’t make national government leader – did anyone really think Harper would get a majority given the reason we all went to the polls…..never say never, someone has to save us from Harper!

#116 JO on 06.19.12 at 7:35 am

Hi Garth, we cannot afford Toronto. What do you think about a good area of Oakville ?

#117 pbrasseur on 06.19.12 at 7:47 am

“Demand hoods” do exist, such as Westmount in Montreal.

During bear market they fall less and then rebound faster, that’s a fact.

But they only represent a tiny portion of the market, a portion which most people can’t afford anyway.

For most who read this blog (beside C and F) this is largely irrelevant, but I think Garth likes to play with you a little bit…

Fact is GTA market is doomed just like Vancouver, Winnipeg, Montreal, etc…

It’s only a matter of time (although you could wait longer than you think).

#118 T.O. Bubble Boy on 06.19.12 at 7:56 am

“Concentration of Income” may be misleading… I think the real trend is “Concentration of Wealth via Inheritance”.

i.e. Incomes alone still can’t explain the prices in most of Leaside/Lawrence Park/Hogg’s Hollow/etc.

The families (many being 30-somethings with kids) buying in these areas need help from the bank of Mommy & Daddy Boomer to get these million-dollar homes.

That “average” income of $320k for Leaside would be skewed by some uber-high earners… just look at the Top 1% stats, where you need $230k to be in the Top 1% but the average for that group is more like $450k.
( )

So, applying that type of trend to Leaside, the average of $320k could mean that many incomes are sub-$200k… hardly enough to buy Garth’s old house for $2M+.

#119 fancy_pants on 06.19.12 at 8:00 am

damn! I hate looking at graphs like that… it always points out the what if, should have scenario.

I could have simply forgone a university degree, and simply spent my time purchasing housing and working a line job and renting the properties and be 10 times wealthier than I am today.

In life the rear view mirror is never hazy like the windshield.

I got nervous in the fall of ’08 and sold my investment condo only to realize now what a mistake that was.

I also remember looking at some greater Vancouver area properties going for $650k in spring ’09 that are now going for over a million.

RE in this country is really getting silly! Maybe if they impose capital gains/losses on primary residences there would be less speculation and movement. Water under the bridge now. This country is getting nuts

#120 TurnerNation on 06.19.12 at 8:02 am

7.5 million for a Toronto condo penthouse? Come now, you can build several McMansions on generious acerages for this price. Rent a couple, heck give a few away. Join the horsey set. Still a better deal than this on:

#121 TurnerNation on 06.19.12 at 8:05 am

Jake = Toronto’s Chad.

#122 Gypsy Kid on 06.19.12 at 8:08 am

I personally think Leaside is overrated….narrow lots, narrow and crowded streets. It ain’t Forest Hill, that’s for sure. Lot of folks there also are not “rich”. They scrimp and get by, trying to keep up a facade of easy living.

Canadian real estate, especially TO/Van, to me is untouchable. Stay away people!!!! Insane doesnt even start to describe it here. Reminds me of Tokyo two decades ago. Not to say it will crash like it did there…

#123 John on 06.19.12 at 8:19 am

Ding dong wrote:

“Can’t wait to see how people crack after the third rate hike by the BoC, there will be some serious soul searching going on out here in Lotusland. May take a few years, but then again we may not see a bottom formed here for 8-15 years yet. We are maybe a quarter mile into a marathon here.”

I have heard the “long decline” argument many times here, and am searching for where this idea is coming from. It’s very true that this happened before ( 1989 through to 2005 recovery: Toronto), but those economic conditions have disappeared completely. I mean, try to find one aspect of the economy that is built in the same way. It’s all gone.

You often hear of supposedly “realistic” scenarios where people “admit” that a “worst case scenario” could be like a 20 year languishing Japan ( whole economies). But they forget to mention the 20 years of global funny money being blown into the area of play at the same time. That card has now been well-played.

The slo-mo version of a Vancouver decline isn’t adding up, and I can’t think of a reasonable argument for the concept. Where are you getting this from?

What marathon?

#124 TurnerNation on 06.19.12 at 8:25 am

GTA (Garth Turner Area) house prices may not immediately drop, but peoples’ incomes will.

We know they are maxed out. One job loss, one mat leave, one called LOC , one emergency home or car repair, one tuition bill, one maxed out credit card, one interest rate hike, one OFSI announcement, one ‘investment’ or vacation property sitting unsold, unrented, unloved will tip the balance into selling.

Homes are secondary. Peoples’ behaviour will take on greater importance this year.

#125 bubble head on 06.19.12 at 8:28 am

some of these demand hoods became more expensive because of flippers knocking down bungalows and building McMansions. (leaside, Yonge and Sheppard etc.,) when people can no longer afford to pay close to 2 mil or when 2mil gets them in a better neighbourhood prices will drop. Can’t sell a bungalow for $800 thousand if a newly built home sells for 1.4mil (no profit) prices will drop. The newly built homes may not drop as much as the rest but bungalows and fixer uppers will.

#126 ThiNg on 06.19.12 at 8:32 am

Hey Garth,

Gail Vaz Oxlade did a post on Real Estate today. I put a mention in for your blog in her comments. I think a lot of people who read your blog also read hers. It would be a good for you guys to share some posts or link up somehow.


#127 Frank on 06.19.12 at 8:37 am


I cannot believe some of the people that post questions to you asking where to live. Perhaps they are the greater fools. Think for yourself people.

#128 bigrider on 06.19.12 at 8:44 am

Hey everyone. Make sure you invest in a house in the N3 Area. Rich-man Hill. Tons of wealthy folks in that area. Subway will arrive by 2020.

It’s the next Leaside.

#129 I wish you were a beer on 06.19.12 at 8:49 am

Garth, I would be very interested in your take on what happens to the “value” neighbourhoods in 416……the handful where ~$400 to $450K will still fetch a modest but liveable 1800 foot detached SFH on a modest plot.

Not too many of these. Curious to see how these ‘hoods hold up against their competitors in the near-905.

#130 RE Guy.... on 06.19.12 at 9:02 am

To give you an inside look at RE in TO, as a RE and mortgage agent I have to admit that government of Canada has perfect timing and amazing coordination of their moves. What I mean by it is that over last couple years they have done quite bold moves that could topple the RE in no time but haven’t. To give you an example, most “investors” are people who are maxed out to the max and I mean max, they used to take maximum allowable mortgages on yearly basis as the name of the game was, to own as many as humanly possible units and to pay as little as possible. I knew of people who owned over 60 units that they acquired over last 10 years and basically they “collected” yearly gains every year with hopes of having enough to purchase yet another units. When the government changed rules saying that investors will not be covered by CMHC any more, can you imagine what happened to a guy who had over 60 units, all on 95% leverage and had to go down to 80%, we are talking about 1/4 of the leverage that they were allowed before, that alone could have toppled the market as so many “investors” had to sell some of the properties they had, or have to still if they have taken two years, as most investors usually take one or two years mortgages, this alone can make RE market go soft real fast, think of it. 80% or so people purchasing downtown TO are investors, and if they have to lower their leverage from 95% to 80%, that means they would have to sell 3/4 of they properties to make it work… you do the math… that could spell huge influx of properties to the market… that alone can cause major trouble. In regards who is able to afford those expensive houses, from my experience are lots of people who have FIRE jobs or who support those with FIRE jobs, once that dies down, there will not be to many “rich” people around to purchase those homes. I know people that come through my doors that make ridicules amount of money that makes no sense. The other day I had a guy who delivers and places RE signs for RE agents, making over $200K a year… do you think he will be making $200k when the RE prices go down? I don’t think so… same applies for a lot of construction guys that are making lots of money now but once RE prices head south, they will not have those incomes to support them and will be forced to sell as well, in my personal opinion, the real rich neighbourhoods will hold their prices as they are purchased mostly for cash, but those mid to high middle class, will safer the most as those guys will have most trouble paying for their mortgage, people who are making now “lots” of money that allows them for most leverage at this moment but will not have that income once the RE market plummets, those neiberhoods will suffer the most, not the once withlow to mid range priced properties where middle class working individuals (for banks, office jobs, not related to RE) can afford will stay afloat the most but the once that “got rich” over last couple years from RE related businesses will suffer the most. I remember in 2008, the most impacted individuals were the once that had direct exposure to FIRE and gas prices (transportation, import, export). For some reason when prices of RE go down, the people directly involved in it suffer first, then the once around them, and as we know there is almost 1 out of 3 jobs in Canada in related to RE. You do the math. Also another thing that many people talking about on this blog but fully do not understand is renting. Many people talk of it without understanding the risks associated with it. Yes you have no financial exposure but you do have exposure to a owner/investor who may be forced to sell the property or may go under. I have seen this in US when people rending suddenly are given 60 day notice to move out because the property is being sold or the bank has overtaken the property. A really good friend of mine had this experience 4 times in 2 years time in Las Vegas, after 2nd time he did not unpack his boxes, just waiting for the next one and that can be very risky as well, when most people are experiencing price drops in RE, the investors are the first to go under or are forced to sell. So when renting, make sure that you do it smartly so that you are not left on the street during time when finding rental will be most difficult. Stay smart, stay sharp, and don’t do anything to compromise yourself financially.

#131 brainsail on 06.19.12 at 9:05 am

“Average” is synonymous with “Mean”.

#132 Stoopid on 06.19.12 at 9:06 am

#3 Espresso bob

Hope you live long enough to realize your dreams and then even longer to realize a profit

The only real indication for me will be when we create value added job/careers that produce real wealth. Not replaced and realign credit requirements that enables your society to continue to consume…. The melinvestment must be purged out. In the process phony wealth and valuations will go up in smoke

#133 Boombust on 06.19.12 at 9:07 am

“#65 Boombust on 06.18.12 at 11:09 pm

Are you referring to my honesty or my ignorance? :)

Hey, not knowing or giving a shit about GTA seems to be the one thing I have in common with so many BCers I meet.”

Hey, if this is you newly-chosen country, you can now drop your American swagger and arrogance. Of course, dropping the ignorance would be a step in the right direction, too.

It isn’t always about YOU.

#134 CrowdedElevatorfartz on 06.19.12 at 9:10 am

@#10 “The Guy in the Orange Shorts”

Check yer shorts, they arent orange anymore after that comment…….

#135 CrowdedElevatorfartz on 06.19.12 at 9:18 am

@#68 American Werewolf

“….Hey, not knowing or giving a shit about GTA seems to be the one thing I have in common with so many BCers I meet….”

Excellent statement. But you could also include the majority of Canadians NOT living in the “Center of the Universe” aka Toronto that dont give a shit about Terrana…..

It may be pissing rain and 18cel here in Van. but it aint 45 cel (with the humidex) and so smoggy flies are doing the backstroke in mid air.

As you said. A shithole.

#136 Tom from Mississauga on 06.19.12 at 9:21 am

Totally agree with this post, particuliarly the “massive weave of individual markets”. Around Square One there are 662 properties for sale within 1 K of the mall listed on MLS. But my building where I’m for sale a short drive to Lakeview, I’m the only listing in my building of 110 similar 2B units. Had 5 viewings in the last week, S1 crickets. Could it be the other people in my building suffer from recency? Time will time us all soon enough.

#137 Enough on 06.19.12 at 9:24 am

This blog has morphed into a bunch of whiny Have Nots.
The post was simple in its message – ‘Some affluent areas will not be hit as hard as others’. I can’t believe what this message board has become…its pathetic to hear the common theme of ‘but, but, you said it RE in the GTA was going to drop and I was clean up by renting and saving!’ Garth is right about RE being a bad place to but all your eggs right now, but its not a bad investment to put SOME of your wealth. Read between the lines and quit whining, its very sad. Hope your rental unit in the GTA has A/C.

#138 Beach Girl on 06.19.12 at 9:33 am

#226 Nonno Nicola.

Middle aged is not that young but thanks for the complement.

Beach Girl made it clear that she did not want to live to eighty..ugly is the way she put it I think.

She made no mention of ill health, her comment was clear and concise in that age 80 is not an age she would wish to reach, regardless of health, or at very least she made no mention of presumed health.

I am quite sure that on the day before she turns 80, assuming she makes it, she will be looking for more years to live.

I would portend that even with ailments that are somewhat managable, or downright debilitating, she would want to live.

The survival instinct is overwhelming to most.


I have no aliments that I am aware of. But I wonder sometimes. I am healthy, but have seen children die. I would give up my place in life for that child. Why does God protect me? I have always made my 2 sons volunteer. This family, although broken, still cares for other individuals.

#139 Mississauga Mel on 06.19.12 at 9:35 am

#129 I Wish I Were a Beer

“Not too many of these. Curious to see how these ‘hoods hold up against their competitors in the near-905.”

One has to bear in mind something about parts of the 905 area. South Mississauga touches the south Etobicoke border. We are talking about an area that is 15 kms from downtown Yonge St/financial district with a Go Station. The QEW can get you to Yonge street in 20 minutes in non rush hour traffic. This is closer to downtown TO than many parts of the GTA. Further, you can get a nice home for 60% of the value of a similar home in Etobicoke. My point is not all parts of the 905 area code are in far flung regions of the GTA.

#140 yel on 06.19.12 at 9:38 am

just so that you know:

#141 45north on 06.19.12 at 9:49 am

John: I have heard the “long decline” argument many times here, and am searching for where this idea is coming from.

Context John context! Canada is actually on the same continent as the United States. It is our largest trading partner and shares a common history and language. In the United States, housing prices declined an average of 30% over 5 years.

Canadian context: last year in Vancouver there was no decline in sight. Housing prices were rising inexorably. Wealthy Chinese were flying in on helicopters to snap up properties. BPOE posted multiple times each day: “Vancouver is the Best Place on Earth”. Vancouver sales have dropped four months in a row.

Search no more.

#142 Buy? Curious? on 06.19.12 at 9:55 am


#143 Amazing on 06.19.12 at 10:07 am

Prices will plateau or drop… Your money will go further in the future… if you feel priced out… don’t worry… prices will not continue to rise…. but plateau or drop. Things work out in the long run if you are smart… lots of Leaside folks can’t afford to live there… especially when they get their upcoming tax bills. There are many places to live… why people get so obsessed with one area is beyond me.

#144 Bubble Boy on 06.19.12 at 10:08 am

#119 Fancy Pants

“I could have simply forgone a university degree, and simply spent my time purchasing housing and working a line job and renting the properties and be 10 times wealthier than I am today.”

Very interesting and true comment and one that is shared by others. Someone told me recently that he owned several rentals in Toronto in the early 70s and that had he kept them (in desirable hoods)these past 40 odd years and worked at a fast food joint during this time he would be worth around 3 million Canadian loonies.

#145 Mel Eager on 06.19.12 at 10:12 am

Hi Garth and Dawgs,

Do you think Oakville has any areas with Leaside qualities?

Let me know, Mel.

#146 Demand houses in the US crashed on 06.19.12 at 10:15 am

When the house of cards fell in the US even those in upper class area’s found themselves in trouble as the economy turned down. Even the so called rich are maxed out on debt. Some people make more money but they maxed out.

#147 Alex on 06.19.12 at 10:16 am

Wow, you guys paint a horrible picture.

Glad I live in Regina.

#148 Demand houses in the US crashed on 06.19.12 at 10:21 am

When the tide goes out I think even Garth will be surprised just how many were swimming naked. Their are so many naked people in Toronto , Vancouver and in Canada that the word ponzi comes to mind. CHMC AND EASY LENDING IS THE ONLY REASON. .

#149 Karie on 06.19.12 at 10:29 am

Garth is not a clairvoyant people. Even if your example is featured in the blog, it’s still not enough info. Who are you? What are your goals? What are you willing to compromise? Garth doesn’t know your financial comfort levels or if you don’t mind commuting. People commute to Toronto from Wasaga Beach and Cobourg for lifestyle reasons. Some people want to be home at 5:15 p.m. Are you willing to sacrifice size and age of home for location? Can you work from home sometimes? Think about your personality and take into account Garth’s opinion but he doesn’t know you!

Not sure about the NDP forming a national government. Regardless of who’s in power, I think overtaxing the rich is a mistake. These are the most talented, smartest people in Canada. They often contribute heavily to charities. If the govt thinks they should give more, they should have them give a seminar on what it took to get to the point of making $500,000 a year. Maybe we could all learn something from them!

#150 The American on 06.19.12 at 10:30 am

On CBS This Morning today, “In an unexpected and unexplained swift shift, Asians are now the fastest growing immigration population in the United States, outpacing all others, including Hispanics.”

Now, I’ve been told over the past handful of months this is happening, and I’ve been told it is contributing to the recent stability of real estate values in many cities on the West coast in the U.S. I have also been told much of it is coming from out of Canada as the parents’ children establish residency in the U.S. to attend University and the parents come with. I can say I do know of three families that have done this that I have met over the last five months.

I’m not an expert in Canada, but I often see comments about HAM. Is there much or any validity or truth to this in Canada, or is it manufactured by RE brokers and the CREA to keep values propped?

#151 thinker on 06.19.12 at 10:36 am

That table is useless without interest rates and income in that time period – you are saying 325k avg income in that area, prices could easily go to 1.8-2.0. Leaside Gardens condo coming soon

#152 Daisy Mae on 06.19.12 at 11:05 am

#105 DondWest: “NDP will never form a national government. — Garth|


The ONLY reason the NDP is our ‘official opposition’ is because the Liberal party let us down.

#153 Canadian Watchdog on 06.19.12 at 11:06 am

Presented with no comment.

BILD Low and High Rise Sales:

#154 Uh Oh Canada on 06.19.12 at 11:08 am

Spoke with a friend who revealed that she makes the same amount of money as a lab technician (after four years at Concordia University and a degree in Lab Pharmaceuticals) as she did working retail selling clothes. These are truly tough times. I made more money circa 2000-2004 than I do today.

The only difference now is that everything has gone up- real estate, gas, food, etc. How are people surviving with these bloated house prices? Even the mainstream media has now switched to the negative. This is gonna be really bad.

#155 House Horny Housewife on 06.19.12 at 11:10 am

Regarding your last paragraph …



#156 Daisy Mae on 06.19.12 at 11:11 am

#115 Toonie: “…did anyone really think Harper would get a majority….”


And one pathetic ‘majority’ it was….

#157 NAM not HAM on 06.19.12 at 11:17 am

#62 Boombust on 06.18.12 at 11:06 pm

Your point is well taken, Garth.

In the 1982 RE meltdown, for example, Vancouver’s West Side neighbourhood of Kerrisdale actually incresed in value when everywhere else tanked.

Capitol Hill could be a area of immunity. But only the properties that are higher up with a view. There are very few homes up there and inventories are always low.

#158 ANONYMOUS on 06.19.12 at 11:23 am

I’m not a realtor, just a common everyday idiot, but from what I can see; if people think that T.O. real estate is going to fall in price anytime soon then it is those people who think that prices in the Toronto are going to fall that are THE REAL FOOLS here.

Because no matter what Garth says, Toronto is a ROCK, price only go up here, and in 5 years from now time will prove it.

#159 Pied Piper of Hamelin on 06.19.12 at 11:25 am

It’s time to play the real estate pipe. Who will follow, rats or children?

#160 NAM not HAM on 06.19.12 at 11:33 am

Re: Vancouver indvidual property sales details
by gse36 » Mon Jun 18, 2012 10:33 am

59 w21st. livable house
realtor’s house no less.
paid 1.303M. May 2011
sold 1.281M Jun 2012.

Realtor taking a loss.. hmm

Interesting. If a realtor is bailing and takIng a loss, what does this mean? I’m going to have to investigate and see who this realtor is!!!

#161 avenirv on 06.19.12 at 11:35 am

rich people DO NOT live in Leaside. they are maybe upper middle class.
rich people are a different class.

Less than 2% of Canadians have $1 million in investible assets (outside of RE). — Garth

#162 Hoof - Hearted on 06.19.12 at 11:37 am

Well…..too many people at the upper end of the pay scale are in Financial Services….. They really produce nothing except friction burns from paper shuffling.

Like IT jobs….they can and will be farmed out, if not simply replaced by computers. Your bookie or a chimp with a dartboard has better odds on what the future holds. (Riingg..oh its Mssrs’ Flaherty and Carney on boileroom Line ONE)

The future is in plastics and Gunsmithing

#163 WaterlooResident on 06.19.12 at 11:39 am

Remember me?
– A little while ago I said that $400-K house will soon be selling for $800,000 and that $880-K house will soon be selling for $1.2 Million.

Seems like I was underestimating the dramatic Economy of Southern Ontario, home prices have far outdone even my most optimistic wild guesses !

So now i say that $800,000 house will soon be selling for $32 Million, and when I say soon, I mean like in about 3 to 4 years soon.

#164 Thornhill Dweller on 06.19.12 at 11:47 am

What is your opinion of the Old Thornhill area? North of Steeles, South of Hwy 7, between Yonge & Bayview? Would this area hold its value in a market correction?

Don’t bank on it. — Garth

#165 Observor on 06.19.12 at 11:53 am


It’s moronic to suggest that service jobs like financial services produce nothing of value.

The value of a car and a car battery are set in the market place.

So too are the value of financial services set in the market place.

You may predict car prices will drop or you may predict accountant salaries will drop.

But until then the best proof of the value of anyone or anything in our society is the price for that peron or item in the market place.

The market may not be a perfect system, but it’s worked pretty damn well.

#166 Joe on 06.19.12 at 11:56 am

Why do you delete my comments? Isn’t this the comments section?

Only for people who don’t use multiple names and make useless ad hominem comments. Shove off. — Garth

#167 Ronaldo on 06.19.12 at 11:57 am

#123 John –

”The slo-mo version of a Vancouver decline isn’t adding up, and I can’t think of a reasonable argument for the concept. Where are you getting this from?

What marathon?”

John, patience lad, patience. Rome wasn’t destroyed overnite.

#168 Frank le skank on 06.19.12 at 12:03 pm

Garth rarely predicts (if ever) the entire % value that housing will decline. The message I get from reading Garths posts is that within Canada, prices will initially decline by 15%, followed by futher unpredictable declines. I don’t think I’ve heard or would expect him to predict the total drop because its impossible to know how much or when it will start, especially considering that every local area will differ. I think that regarding his Leaside prediction, he is saying that prices will initially remain flat. How far COULD prices fall after an initial flatening is difficult to forcast. Nobody can predict how one human will react to a given situation, let alone how a whole country will react to this cluster f#$k of economic problems.

I would guess that 70% of Canada has no idea of the current global and national economic situation, or at best, have been misinformed by self serving bigots. Canada has adopted the ignorance is bliss mentality (like everyone else) because a lot of people are making money by doing nothing. The psychological affect that an obvious decline in prices to RE will have massive implications in Canada’s highly polulated areas. We have been experiencing job loss, stangnant and declining wages, outsourcing, easy credit, lack of goverment intervention, no transparency from banks and goverments. I’m not a doomer, but the compound effect of the above circumstancs is not normal or does not create a good economy which is required to sustaing RE price increases that we’ve seen for the last decade.

#169 Canadian Watchdog on 06.19.12 at 12:05 pm

Charts: BILD/RealNet Sales

Chart: BILD/RealNet 416 High Rise Sales

Chart: BILD/RealNet 905 High Rise Sales

Chart: BILD/RealNet GTA High Rise Sales

Chart: BILD/RealNet 416/905 High Rise Sales Ratio

#170 Real Estate Agent Panic on 06.19.12 at 12:13 pm


Garth’s blog is turning into a real estate agent panic barometer!

Look at ’em go!

#171 From Winnipeg... on 06.19.12 at 12:13 pm

I keep waiting for a ‘correction’ in my neighborhood of ‘Riverview’, but was coming to the conclusion it ain’t gonna happen! Thanks for confirming it.

#172 Hakuna Matata on 06.19.12 at 12:15 pm

I know your site is free and we’ve never met and I’ve never paid you a dime for any financial advice, but it is clear that if I did not voluntarily read your free blog every day and rely on it 100% to the exclusion of all other reputable sources, which are readily available to anyone, I would be a multi-millionaire right now. I was going to buy 50 houses in Leaside before you put free words on the internet and I would have made so much money it’s not even funny. I demand compensation for the pain and suffering you have caused me and my family. If you don’t pay up I will chirp you in the comments section you provide for free on your free blog that doesn’t have any advertising on it. OH YEAH WHAT ABOUT BEVERLY HILLS U R SO DUMB GARTH I HATE YOU!!!

Did I ever mention this won’t end well? — Garth

#173 DodgedBullet on 06.19.12 at 12:20 pm


I think of the homes I grew up in (we moved around a fair bit)… and they are all so very basic, with basic furniture, small basic kitchens, lawn gardens, plastic bathrooms, cheap beds, etc.

I just keep hearing the bell of entitlement ringing out in these blog posts.

My first personal computer cost almost 2 thousand pounds 20 years ago, it was the biggest investment my father ever made in my personal development… you can buy a similar present day model for a couple of hundred bucks.

We’ve become so used to coming by things easily, it doesn’t translate for housing, people wanting million dollar homes on a incompatible income.

Good luck!

#174 Tony on 06.19.12 at 12:26 pm

Demand means nothing when everyone in Toronto is selling and demand is near zero. Anyone who thinks High Park will hold it’s value will be one of the first people in line to declare personal bankruptcy. All sectors of Toronto will fall. Whatever went up the most will fall the most. High Park will fall more percentage wise in price than most of the rest of Toronto. That’s how it works when people lose all their houses.

#175 Bigrider on 06.19.12 at 12:27 pm

# 164 thornhill dweller on thornhill area. Garths response ” don’t bank on it”

Anything just north or south of yonge and highway 7 delineated by bayview in the east and Bathurst in the west you can absolutely bank on provided RE continues it’s upward march.

Best suburb there is. Period

#176 Snowboid on 06.19.12 at 12:27 pm

#155 WaterlooResident on 06.19.12 at 11:39 am…

You were more conservative in your previous estimates:

#18 Waterloo Resident on 09.18.11 at 8:32 pm

Real Estate is “Sticky”, once prices reach a high point they don’t want to come back down.

That $500,000 house you have your eyes one will soon have bidding wars on it, and it will sell for $10 Million in about 6 years time, just wait and see.

Keeping in mind the household income would need to be over $ 1.5 million to service the mortgage in your conservative estimate.

The $ 32 million house, okay I must admit you are indeed the Ontario equivalent to BPOE!

#177 Tony on 06.19.12 at 12:29 pm

Re: #171 From Winnipeg… on 06.19.12 at 12:13 pm

The word is freefall not correction. Keep waiting it shouldn’t be much longer.

#178 mac on 06.19.12 at 12:37 pm

Unbelievable. I’ve had a night to sleep on it and now can see all the implications of Garth’s advice for those readers who have been waiting to buy in central Toronto or Vancouver Westside, aka: “demand areas”.

It’s forget about it–go to the burbs. For those who own there already, simply sell up, buy a place in the burbs and give your money to a financial planner when stocks have seriously under performed Canadian real estate for a decade. But wait for it… that trend will reverse any minute now… riiiiight!

I think I’ll be reading Garth for the great writing and amusement factor alone from now on.

Actually, it’s forget about it – buy what you can afford. Minimize debt. And diversity, which does not mean getting two houses. BTW, direct equity investing is a bad idea for almost everyone. — Garth

#179 Tony on 06.19.12 at 12:45 pm

Re: #163 WaterlooResident on 06.19.12 at 11:39 am

Those 400 thousand dollar houses will be selling for around 250 thousand dollars in a few years’ time. This is called how economics works.

#180 Steve on 06.19.12 at 12:48 pm

#131 brainsail on 06.19.12 at 9:05 am

“Average” is synonymous with “Mean”.

Really? I am thinking that there are three words in that sentence that you need to look up in the dictionary. You know you are spewing ultimate nonsense when Garth does not even bother to slap you down.

#181 Tony on 06.19.12 at 12:49 pm

Re: #13 Full of It on 06.18.12 at 9:42 pm

Vancouver will get walloped!!

#182 Buy? Curious? on 06.19.12 at 12:57 pm

Why am I getting the old’ delete treatment? Is because difference of opinion based on my own experience, rude comments about bodily functions or my disdain for old people that have one foot in the grave and the other on a banana peel?

Just answered it, didn’t you? — Garth

#183 Linda Pearson on 06.19.12 at 12:58 pm

#149Karie on 06.19.12 at 10:29 am

Regardless of who’s in power, I think overtaxing the rich is a mistake. These are the most talented, smartest people in Canada. They often contribute heavily to charities.

Ooooh, Karie, don’t go overboard here praising the wealthiest among us. There are talented and smart people in all strata of society, self-employed entrepreneurs who scrabble daily to keep their businesses going or to perfect new inventions or tweak old ones. Sure, many of those would prefer to be richer but many also measure their worth by job satisfaction.

And as for the rich giving lots to charities, I’m afraid that ship doesn’t sail either. Yes, there are a few high profile types who give thousands, even millions, to the arts and post-secondary institutions. There are a few that fund medical wings, usually in exchange for their names being on the front door. But in my twenty years of working for 5 different charities, I can tell you for sure that the vast majority of donations and the largest annual amounts received came in dribs and drabs, $10 here or $100 there, from the middle and lower earners. Only a couple of years ago StatsCan stated that, as a group, citizens of Newfoundland-Labrador as individuals contributed more than any other province in the country.

I haven’t worked for a couple of years now so I can’t give you the latest figures but you could easily find them from places like Imagine Canada, the RevCan website or even StatsCan. But believe me when I say that it isn’t the splashy large gifts that keep charities open day to day; it’s the thousands of little gifts, many of them a real stretch on someone’s budget, that do that.

#184 truth hammer on 06.19.12 at 1:20 pm

Talk about ‘wack a mole’ conditioned response mechanisms. Never fails to amuse how many closet civil servants will leap up out of obscurity to defend the regime of outrageous taxation and lies out of Ottawa for their own self interest. I come from the standpoint that I should not be paying taxes for the benefit of the elite who gorge and squander the countries resources on perks and pensions far and above what the ‘average Canadian’ recieves’.

The recent spate of ad hominem attacks on the PM show the depths of hatred the losing liberals have when they see their precious entitlements being unwound.

So yes….it is now OK and acceptable to tear strips of the politically fascist liberals who stripped the cupboards bare and raised taxes to where they stand today by aggrandizing their philosophy of class warfare and creating an Orwellian civil service to the detriment of the general population of ‘average’ tax payers.

Let the knee kerking salutes and the whining begin . And by all means….correct my spelling if the righteousness of doing so swells your heads with visions of grandeur.

I remain constant in theknowledge that any information coming out of a civil service in any department that is staffed by legacy liberal appointee’s is so politically skewed away from fact that do not have the ability to publish reliable information. T

he only solution for Canada is to fire every last one ( including the judiciary) and begin again with all new non unionized maket compensated civil servants taking a oath of loyalty to the country and not to their political or labour masters.

#185 Frank le skank on 06.19.12 at 1:33 pm

According to your “From Bull to Bitch” post from earlier this month and judging by the hostility on your website, I would say we are in phase 3.

#186 John G. Young on 06.19.12 at 1:42 pm

#183 Linda Pearson on 06.19.12 at 12:58 pm

Totally agree.

In general, rich people are rich for one simple reason: money is their highest value, and that value informs all of their daily decision-making.


#187 TRT on 06.19.12 at 1:52 pm

The Morning After the big Nuke strike…

Advice to doomers: 2.99% mortgage still available. Buy in a demand area.

To Junius: demand areas not going down buddy. Don’t shoot the messenger.

And G man, why delete my comments??

When you fabricate, I delete. — Garth

#188 Canadian Watchdog on 06.19.12 at 1:52 pm

Price Change. Mar 16: $1,739,000 Jun 19: $1,888,000 Mar 25: $1,939,000 Apr 18: $2,039,000

Yes Garth. Even the small private developers are coming out of the woodwork and selling properties on MLS. Did you really believe TREB sales soared to 10k last month and just dropped off in the last two weeks?

When it looks fudged and smells fudged, it is fudged.

#189 Toronto_CA on 06.19.12 at 2:00 pm

@180 – to find a mean of a data set you take the sum of the values and divide by the number of values.

That’s what most people think of as an average value also. Please enlighten us as to what you think the “mean” is if not an average?

I don’t think any statistician would disagree with what I just posted, but I’m happy to be proven wrong.

#190 brainsail on 06.19.12 at 2:09 pm

#180 Steve

#191 Victoria on 06.19.12 at 2:14 pm

From UK Daily Telegraph. Buying is still cheaper than Renting?

#192 45north on 06.19.12 at 2:18 pm

Alex: Glad I live in Regina.

I’am glad you live in Regina.

#193 John on 06.19.12 at 2:22 pm

Ronaldo wrote:

#123 John –

”The slo-mo version of a Vancouver decline isn’t adding up, and I can’t think of a reasonable argument for the concept. Where are you getting this from?

What marathon?”
John, patience lad, patience. Rome wasn’t destroyed overnite.

Ha ha…that is brilliant.

#194 Q on 06.19.12 at 2:23 pm

Interesting real estate situation in Beijing, where I presently am. In a city with a population of aproximately 16 million, there are currently 3.8 million “unoccupied” condos registered. That figure is just for unrented spec condos and not including the tens of thousands currently under construction, or the rented and occupied. Now that should be an interesting bust………

#195 jess on 06.19.12 at 2:27 pm



Global Witness has a new report out called Grave Secrecy: how a Dead Man can Own a UK Company and other Hair-Raising Stories about Hidden Company Ownership: which shows how companies can be used as cover to launder the proceeds of corruption, tax evasion and other crimes.

…In the most egregious example, the shareholder of one
UK company was a Russian man who had actually died
some years before the company was registered. His identity had been used to hide the real owner of a company that appeared to have US$700 million flowing through its account at AUB while doing no business in the UK and failing to file accounts with the UK corporate registry as required. It is scandalous that lax oversight and enforcement over company registration in the UK allows such behaviour to prosper.

“There are now companies based in off-shore havens which offer to protect emails and data caches from prying regulatory or legal scrutiny. Take this company for example – Private layer. Private Layer operates out of Panama and Switzerland.(tax justice network)

#196 condopoor on 06.19.12 at 2:39 pm

Thank you Gen Y, for securing Garth’s predictions and advice with the proverbial nail in the coffin.–gen-y-guess-who-s-driving-the-luxury-market?bn=1

#197 jess on 06.19.12 at 2:49 pm
Even the Employed Suffer as Hours and Wages Are Cut
Americans fortunate enough to have a job are often overqualified and find that wages and benefits are down, leaving many unable to meet their expenses.

adjusted for inflation, the median hourly wage was lower in 2011 than it was a decade earlier, according to data from a forthcoming book by the Economic Policy Institute, “The State of Working America, 12th Edition.”

The Federal Reserve reported last week that the economic crisis left the median American family in 2010 with no more wealth than in the early 1990s, wiping away two decades of gains. With stocks too risky for many small investors and savings accounts paying little interest, building up a nest egg is a challenge even for those who can afford to sock away some of their money.

I agree with you .#37 Claudius Emperor

#198 EdmontonJim on 06.19.12 at 3:00 pm

When dealing with individual neighbourhoods, or even individual streets, the sample size is small enough that individual sales can skew the average.

There is a sweet spot for neighborhoods that retain value. For a neighborhood to have high demand it has to have both quality and scarcity, but not so much that it becomes rarified.

Thus a neighborhood where every second household is a doctor or lawyer will have high demand and hold value as long as there are doctors and lawyers who want to live near other doctors and lawyers. An estate with a $100,000 per year gardening bill has less of a market.

#199 Steve on 06.19.12 at 3:05 pm

#190 brainsail on 06.19.12 at 2:09 pm #180 Steve

Fair Dinkum Mate – had a brain cramp and perceived ‘median’ where you typed ‘mean’. Asked Garth to delete, but he decided to let me reap what I had sown.

Since the retraction failed, please accept my apology.

#200 ronthecivil on 06.19.12 at 3:09 pm

Who cares how much prices in swanky exclusive neighbourhoods are? If you were the kind of person that would be living there you already would and presumably have enough money that you really don’t care which way the market goes.

Even IF any of the posters ARE the kind that could/would live in these high priced areas even then their biggest concern should be how much everyone else in the country has bid their neighbourhoods up to and how much debt they accumulated doing it, since the consequences of that are more likely to be a concern to their bottom line than any fluctuations in the value of their residence.

#201 TNT on 06.19.12 at 3:09 pm

I took a drive with the wife yesterday from Dunderave in West Vancouver out towards Horseshoe Bay, about a 10 minute drive. This area has much prime water front, some of West Vans best and it was littered with FOR SALE signs. In one stretch there were 5 in a row. I also know that there are more homes for sale on this main road without signs up. I’m aware that there is a RE board concern and mandate to keep signs to a minimal as to not invoke fear, a stratagy.
Garth two questions, i know you are not psychic but is there an indicator or point that has to be reached before intrest rates go up, what is your educated guess?
I know that there are many home owners on the North Shore that bought in years ago and have huge gain$ in their home$. Is it rational to think that if these people are aware of the declining house prices that they can justify taking a below appraised price. I know that the assessed value means nothing. I’m just tryng to get a historical handle on how home owners react and how it unwinds, fear vs logic…
Thanks for your free advice and suggestions.

#202 Smoking Man on 06.19.12 at 3:12 pm

Gartho Toronto Life mag has a huge story on you. Calling you Dr Doom lol. Not sure if they are compimentry or chirping you all the same for the record. Smoking Man like sex more than money. Story chirpt the regualr posters

#203 Snowboid on 06.19.12 at 3:25 pm

#184 truth hammer on 06.19.12 at 1:20 pm…

So you originally post something (as you regularly do) that isn’t even close to the truth, then you claim “…wack (sic) a mole conditioned response mechanisms.” when others question your lack of wisdom.

Actually your incorrect responses are so well programmed – are you actually some code that Smoking Man has crafted to amuse us?

#204 Bill Gable on 06.19.12 at 3:29 pm

A lot of scared owners here in Vancouver – judging by the ridiculous rents hoped for, well, crummy boxes in the sky. Craigslist and other rental sites have a welter of stuff with rents that are hallucinatory.

The smell of fear permeates this city, just like the never ending rain.

At Canadian Tire today – and it was pretty quiet. The clerk at the order desk, where I was picking up a new remote for the parking garage was pretty downcast. I had to ask – “how’s business?”. She told me that she has been working for the Company since the store opened and it was “dead quiet”. She volunteered that she was worried layoffs were on the way.
I had to head next door to Best Buy and it was shocking.
I counted about 5 customers.

If this is a symptom of a slowdown, it is a doozy. Maybe it is the dreadful weather, adding to the woes, but I don’t think that has much to do with it.

Real incomes, as Mr. Turner has been telling us, have been flat since the 90’s…and with medan income around 59K in this wacky town – something’s gotta give, and the pressure is building.

Get liquid, or get run over?

#205 mac on 06.19.12 at 3:33 pm

“Actually, it’s forget about it – buy what you can afford. Minimize debt. And diversity…”

Fair enough. But Garth. COME ON,MAN. Many people reading this blog get the message of DON’T BUY NOW, WAIT. Not buy what you can afford now.

You have been predicting a major “melt” in TO, a collapse in Van, use whatever synonym you want. This simply doesn’t square with buy a smaller, further away property because you are also saying those properties will decline majorly.

You must clear things up with your readership.

What I said a year ago holds. Expect an average correction of 15%, followed by a multi-year melt. Differences will vary widely by market, from carnage in parts of Vancouver to calm in Moncton. Anyone buying should do so in a fashion which protects net worth. Get what you can afford. Minimize debt. Diversify. — Garth

#206 Linda Pearson on 06.19.12 at 3:51 pm

#186John G. Young on 06.19.12 at 1:42 pm

No, I think your view is simplistic. Many wealthy people have worked darn hard for their money. Some have inherited. And some are really lucky, having had great advice or been in the right place at the right time.

It’s the love of money, not the having of it, that is the problem. The Gates and Buffets among us (okay, none of them are around me) are heroes in my book because they encourage those like them to be generous.

But when SOME rich people bend all their efforts to evading their rightful share of taxes or turn their heads at the sight of the suffering in society, suffering economically as well as socially or medically, that’s when my blood boils.

The wealthiest man I ever knew was generous beyond all reason. Funny enough, he kept right on prospering. A religious person – I am one – would say that he got his just desserts.

#207 truth hammer on 06.19.12 at 4:15 pm

As I said…the recent ‘write up’ of increasing ‘average net worth’ out of BS Statistics Canada is entirely political and bogus. As I asked ….”Why should they lie to us like they do?”

My supposition is that the reality of the net worth of the average person falling is negative optics for the labour lobbies who need to ‘persade’ Canadians to think that it’s OK to continue to increase taxation by lieing to us about how ‘rich’ we are ( not).

Take for example the ‘average ( 90%) of all US households falling and why this ‘real estate bottom’ suasion tactic by th Obama government is a wash technique to make people think that things a stabilizing….the truth suggests otherwise.

Likewise in Canada the suggestions coming out of liberal appointed bureaucrats ( such as the beatification of Jack Layton by the CBC) at stats can that Canadians are getting wealthier because their urban property assessments have been jacked up by greedy labour unions to increase pay perks and pensions of ‘civil servants’ is in fact only immoral misdirection.

It’s all about putting you to sleep with liberal nonsense so that they can continue to take advantage of you and gorge in the public trough a while longer.

#208 Amazing on 06.19.12 at 4:20 pm

It seems to me that anyone involved in real estate is doing well. Building homes, flipping homes…. creating more hype. The market is crazy… but the solution is to stay on the sidelines and wait for things to calm down. There are no shortage of homes… it’s a question of timing. Garth doesn’t have a crystal ball.. but he has lots of good insights… if the government wasn’t propping up the market things would be different. If you can’t wait then buy now… but don’t complain on this forum when the tide turns. I agree with the post that people are earning less then ever… except realtors.

#209 Investx on 06.19.12 at 4:44 pm

So I guess if you’re considering buying property in Leaside “you better hurry up before you’re priced out forever”!

#210 It is Amazing on 06.19.12 at 4:55 pm

That so many people are so blinded by greed and emotions.

Fiat lux.

Well, so far all we have is r.e.bubble and fiat currency.

#211 John G. Young on 06.19.12 at 5:06 pm

#206 Linda Pearson on 06.19.12 at 3:51 pm

Hi Linda,

Yes, my comment was simplistic — when writing I tend towards short, general statements. When talking it’s different, much to the chagrin of friends and family ;).

And again, totally agree with your comments. I would say that your statement about the problem being the love of money, rather than money itself, is what I was alluding to when I talked about some rich people valuing money above all else. Of course that exists in all socioeconomic levels in society; it’s just been my experience that, in general, people who have less tend to be more generous with what they do have. (Maybe that isn’t actually true, it may just be that witnessing it makes such an impression.)



#212 MarcFromOttawa on 06.19.12 at 5:13 pm

Quick question

Why is the guy in the picture holding the steering wheel?

#213 Timing is Everything on 06.19.12 at 5:15 pm

‘No strippers for Langford pub after all’

The owner of Ma Miller’s Pub has reportedly cancelled a five-year contract with bar manager…

#214 Rural Rick on 06.19.12 at 5:18 pm

Here is the link to the Toronto Life story that Smoking Man mentioned

#215 Blue Monster Lover of Meats and Vegetables on 06.19.12 at 5:21 pm

It’s obvious to me that Garth has been kidnapped or he’s strung out on drugs and hallucinating lately.

Either that or he’s having self doubt and just needed a shoulder to lean on in a time of need so I hope we straightened you out! Now smarten up!

#216 Blue Monster Lover of Meats and Vegetables on 06.19.12 at 5:27 pm

But when SOME rich people bend all their efforts to evading their rightful share of taxes
Their rightful share is a lot less than what they are currently paying. The pay a lot and hardly use the system. But I think you meant it the other way, so I think you’re mistaken.

#217 Hicksville Alberta on 06.19.12 at 5:38 pm

Bill Gable – really appreciate your observations on the ground in Vancouver.

truth hammer – For the most part i definitely agree with much that you post but tuning it down a bit from time to time may work better in the long run.

Snowboid – Seems like “truth hammer” is hitting your nerve a bit. Do you have a guilty conscience or do you think that what masquerades for an economy in this country is really sustainable, even in the medium to short term? I’ve got kids and grandkids and each and every day this crap continues their chances at living simply and peacefully and having any kind of future continues to diminish and deteriorate.

#218 Westernman on 06.19.12 at 5:41 pm

Truth hammer @ # 72,
You ask: ” Why does Stats Can exist? ”
Well, the same reason Enviornment Canada, Canada Post, the CBC and literally thousands of useless government agencies, bureaus, offices, etc. do.
That is, to give the useless, self-entitled bums of Canada that have absolutely NO productive skills a cushy “job” with a fat pension at the expense of the ever-shrinking number of actual productive Canadians left.
And as far as having to set-up Canadians for a tax increase I don’t think the Government even needs to do that anymore… Canadians a a whole absolutely LOVE high taxes and look forward with glee to the inevitable next tax hike…
When you drink the politically correct socialist kool-aid you can’t even think in your own best interests anymore… this is where we are as a country now…

#219 PoorgEoisie on 06.19.12 at 5:44 pm

I’m not buying and if economic fundamentals continue to be thwarted, I will not hold a blog host responsible. 15% is in my opinion a little conservative, but it’s keeping G out of the crank zone.
The crank zone is pretty fun, but then again I don’t have credibility to worry about

#220 salonist on 06.19.12 at 5:50 pm

love is a brain chemical redistribution,a chemical romance.lasts a couple of years and then you wake up one morning, brain back to go what happened, what am i doing here.
and guess what you did, you signed a contract without a lawyer and your wife is buying your underwear.
50/50 chance you will not be with the person that you signed the contract with.
from what i recollect 80% of those contract terminations is initiated by the female.
my question is,where are the guys living that gave up their matrimonial homes to the spouse?

#221 Nostradamus Le Mad Vlad on 06.19.12 at 6:17 pm

#85 Ron — “June 2012 was the month that the ‘arse fell out’.” — Followed by all the naughty parts, and
#119 fancy_pants — “In life the rear view mirror is never hazy like the windshield. This country is getting nuts” — The nuts came off when the arse fell out!

#131 brainsail — “Average” is synonymous with “Mean”.” — Or “Lean”, frugal etc.

#167 Ronaldo — “John, patience lad, patience. Rome wasn’t destroyed overnite.” — Correct. As Garth said, it’s a slow melt — well underway — ‘tho people are still buying, but not with the foolish speed and nonchalance they did before.

“Did I ever mention this won’t end well? — Garth” — Decades ago, probably. Don’t recall anything recent!

#197 jess — Good post and great link. Deflation (the withdrawal of money), in combination with other factors are turning this continent into a service-based continent, with slaves (sheeple) doing their level best to get by, while the ultra-rich keep skimming the cream from the top.

#220 salonist — “love is a brain chemical redistribution,a chemical romance.” — Splendid idea! Instead of a wealth redistribution, a chemical redistribution is much better. Take everyone and everything back to zero, we’re all on a level playing field then let the chips fall where they may!

#222 jess on 06.19.12 at 6:41 pm

Debt crisis: Spain and Italy to be bailed out in £600bn deal
European leaders are poised to announce a £600 billion deal to bail out Spain and Italy, it emerged at the G20 summit on Tuesday night.
The collapse of Enron back in 2001 revealed that the biggest financial institutions, here and abroad, were busy creating products whose sole purpose was to help companies magically transform their debt into capital or revenue. At the time, there were news reports about Merrill Lynch pretending to buy Nigerian barges from Enron, JPMorgan Chase dressing up its loans to Enron as commodity trades and Citigroup disguising Enron debt as profits from Treasury-bill swaps.

This went well beyond Enron. Our banks had gone into the business of creating “products” to help companies, cities and whole countries hide their true financial condition.

In 2006, the agencies jointly published something called the “Interagency Statement on Sound Practices Concerning Elevated Risk Complex Structured Finance Activities.” It became official policy the following year.

SUMMARY: On May 19, 2004, the Agencies issued and requested comment on a proposed Interagency Statement on Sound Practices Concerning Complex Structured Finance Activities (“Initial Statement”) of national banks, state banks, bank holding companies, federal and state savings associations, savings and loan holding companies, U.S. branches and agencies of foreign banks, and SEC registered broker-dealers and investment advisers (collectively, “financial institutions” or “institutions”)..

#223 DOM on 06.19.12 at 7:57 pm

Wow…alot of worried realtors on this bolg. I guess it true that sales in the GTA have stopped and power of sales are increasing everyday as maxed out home “owers” go bankrupt.

#224 Nostradamus Le Mad Vlad on 06.19.12 at 8:00 pm

Elites and Iceland “The IMF has launched a propaganda campaign to take credit for Iceland’s recovery.”; Working For A Living Except Greek workers aren’t being paid; Silver Bullet Economies need more than a bullet to fix them; US Jobs With last night’s link, about the UK losing 874K youth jobs over a decade, comes this from the US; New Websites about lousy credit cards, etc.; Crushed Young households; Viva l’Espana and Viva Italia! Both getting bailed out.
Melbourne, Oz 5.2 M ‘quake; Flame = Stuxnet II, and 3:21 clip Stuxnet — Anatomy of a virus; Kuwait One and Kuwait Two. Connect the dots, and see the US military is spread way too thin now; Fasttracking Obomba “Declaration of a national emergency fast tracks his authority. He can declare nuclear war on Russia and not have to be held accountable for six months. That’s after the elections.”; Syria Guess Russia’s had enough. On the other hand, they’ve all had enough of the west’s constant interference; Modern Nukes “This chart does not show the most powerful nuclear weapon ever built; the 100 megaton “Tsar Bomba”. Test detonated at only 50% yield (to keep from destroying the drop aircraft) it left a crater still visible from space.”, and here is the follow-up link; Kissinger and Romney Two warmongers; 6:18 clip Obomba vs.Putin — who will win? WHO Another stupid headline, and probably a call for new taxes; San Onofre California’s Fukushima? Fujitsu cracks a new code; NDAA Resolution Tell the WH to shove it; Intimidation or just plain dumb? Biofuels Another scientific lie.

#225 Snowboid on 06.19.12 at 8:25 pm

#217 Hicksville Alberta on 06.19.12 at 5:38 pm…

I don’t mind posters massaging the truth to make a point, and TH may be correct that the government of the day does this with Stats Canada. But reading an article, then misquoting it completely doesn’t make a valid point in my mind.

I also agree that there are problems with the economy, but for TH to continually blame unions and average public servants isn’t just simplistic, it’s total fabrication.

I hate the waste of taxpayers’ money the same as anyone, but if you want to stop the big ticket waste you need to snag bigger fish than average public employees.

I too have children (and hope to have grandchildren soon) and the current sellout of our country by Harper and crew and our province by Christy and her crew will definitely make the future for our kids most difficult indeed.

The gradual destruction of our country does hit a nerve with me, and when I look at the continual support of this by TH, yes that hits a nerve as well.

Guilt? Yes, I do feel guilty that there was more I could have done years ago to stop the ‘giveaway’ of our provincial and federal resources.

Plus I’m old and cranky – but will tone down my responses in future!

#226 I wish you were a beer on 06.19.12 at 9:05 pm

#128 bigrider ………….Rich-man Hill……….Subway will arrive by 2020.

If the subway is truly brought North to Major Mack before these donkeys finish servicing Toronto, I will seriously consider visiting council chambers with an unregistered firearm.

#227 Herb on 06.19.12 at 9:16 pm

Well, I can figure out why Stats Can, Canada Post, Environment Canada etc. exist. What I can’t figure out is why Truth Hammerer and Westernmoron exist.

#228 Herb on 06.19.12 at 9:19 pm

#225 Snowboid,

entirely with you. I’m old and cranky too, but let’s not tone down our comments.

#229 Mr. Anderson on 06.19.12 at 10:35 pm

# 163 WaterlooResident

Whatever your smoking can you send me some….BC bud has nothing on you.

# 201 TNT

Did the same drive as you except west to east yesterday, counted the same signs.

#230 Westernman on 06.19.12 at 10:43 pm

Herbie @ # 227,
I’ll bet there are a LOT of things you can’t figure out. And by the way, you are a perfect example of the tax-loving Canadian I described in my post.
Here’s hoping the taxman eats your lunch… you would probably hand him your last meal, wouldn’t you Herbie?
You just can’t find a pair anywhere, can you?

#231 CrowdedElevatorfartz on 06.20.12 at 9:13 am

@#229 Mr Anderson.
go easy on WaterloonResident. It aint “bud” he’s smokin’ …Lookit where he’s from. It’s in the water.

I too, live in the north side of the Lower Mainland. We should go for a $9 FrappaLappaChinno at one of the 10,000 Starbucks that infest the LM.
Is it a date? Please dont wear your black polyester slacks, they make your hips look BIG!

#232 Rob on 06.20.12 at 11:03 am


What is your outlook for a neighbourhood like Rockcliffe in Ottawa? Ottawa is still growing, but prices in this neighbourhood (which is dominated by just one or two real estate agents) have gone up fast. Demand neighbourbood, but pricey for what you get (excellent location, but generally old and poorly restored homes).

#233 TNT on 06.20.12 at 4:33 pm

Garth-Since you are taking an economic educational tone (still) i have a question. You seem to indicate that the States will recover. Correct me if i’m wrong but you say its not a recession? With 40% of personal wealth already gone and still depreciating via portfolios and declining house values and with unemployment way up what is your evaluation of this and how would you label it if not recession? I know you have been banging the drum on this but i can not wrap my head around it. Thanks

A recession is not incompatible with long-term recovery. In fact, it’s irrelevant. — Garth