Shirtless

Kelly and Frank are coming back to Ontario soon, and don’t like what they’ve been reading on this blog one little bit. “We lost our shirts on our house in Virginia,” she says, “after coming down here five years ago. Now we’re hearing about the possible downturn in Toronto coming up as well. Obviously, we’re trying to avoid losing our shirts twice in the housing market.”

It was bad enough even before last week. The US media has been peppered with stories about an inevitable dump in Canuckistan real estate values now for a couple of months (this apparently seems obvious to everyone but Canadians). But with Ottawa’s deliberate deflation of housing just days ago, fear’s in the air.

No wonder. As the F-and-OSFI tag-team hits are better understood, consequences become clearer.

  • There are more than a quarter million first-time home buyers a year in Canada (new and resale), and at least half of them will be affected by killing off the 30-year amortization, eliminating the cash-back mortgage or jacking up borrower qualifications. A big reason house prices have advanced and unsustainable markets held has been all the virgins pouring in with their hormones and 100% financing. Underestimating the impact of these changes on them, or the market, would be a big mistake.
  • As the mortgage broker bible (Canadian Mortgage Trends) pointed out, dropping the amortization alone means a buyer with no debt and a $75,000 income will qualify for almost $50,000 less in financing. So he doesn’t buy, or prices go down $50,000. Either way, big outcome.
  • Ditto for the new debt-ratio rules. Last week some people thought they were being made more generous, but the opposite is true. The gross debt service ratio (GDS) is falling from 44% to 39%, which means a buyer earning $75,000 not only can afford less mortgage, but might also qualify for a significantly lower amount – 12%, or $57,000, less. More downward pressure on house prices.
  • The new million-dollar rule for CHMC insurance might be politically sexy, but it’s also a game-changer in places like Vancouver, Richmond, Unionville and hunks of 416. In the GTA and the Lower Mainland million-plus listings now amount to almost 20% of the entire market. As I mentioned last week, over 2,500 houses in Van and 5,000 across the region are priced here. Soon buyers will need at least $250,000 in cash to close these deals, which means more $999,900 homes.
  • And those HELOC changes are a big deal. Today you can borrow 85% of your home equity, but soon it will be just 65% (or 80% if you layer an amortized mortgage on top of a line of credit). The inevitable result will be crickets in Home Depot. But how can civilized life go on without upgrades to 14-burner gas ranges and squirting toilets?

By the way, the mortgage industry is freaking. The professional association issued a statement saying, “these changes, together with new OSFI underwriting guidelines…may precipitate the housing market downturn the government so desperately wants to avoid.”

But the fact is, F and Mark Carney now want real estate to deflate. They desire lower prices, even knowing thousands of recent buyers will be thrust under water, economic growth will be impacted, employment whacked and downtown condo towers turned into monuments to speculator stupidity and losses. As houses lose value, families will shed equity – everywhere. The wealth effect will be gone, and consumer spending impacted. Lower retail sales, fewer Best Buys and more Wal-Marts.

It underscores the seriousness of the choice: wait for a US-style, bank-kicking housing wreck, or create a Canadian-style controlled melt.

So back to Kelly and Frank.

“Actually, we’re not looking at Toronto specifically, but probably within about an hour’s drive to the airport, areas such as Caledon, Erin, North Burlington or Milton etc. So, looking for opinions here – if Toronto is hit, how do you see the impact in the surrounding areas?   I realize North Burlington/Milton might also have a different impact then further areas such as Erin, Caledon etc.

“If we move up there within 6 months – should we rent and wait things out?  Or if we’re planning on staying in our house longer term (at least 5 years if not longer) does it really make a difference? The more I read, the more different opinions I get.    But, I’d really like to get yours.”

Well, ground zero for the melt might be GTA condos and Vancouver Specials, but the patina of real estate depression will actually hit the outlying burbs with greater impact. Already sales in the rural areas have been desperately slow, with prices retreating and showings a rare event. Since the world we’ve moving into is all about liquidity, buyers should ensure the properties they choose will stay in demand. You can therefore cross off million-dollar country estates with roiling property taxes, punishing energy costs plus long commutes. And bugs.

So, K&F, buy a donkey farm if you want to stay there for a decade or two (not five years), and don’t mind losing money. But if you want to prevent another Virginia, rent. How hard and fast this market deteriorates is yet unknown, but fall it will. Billions in mythical equity is about to vanish as Canadians learn they’re not superior, after all.

Just late.

198 comments ↓

#1 TurnerNation on 06.24.12 at 5:45 pm

Several Toronto ‘Price Drops’ noted by this site!

http://www.themash.ca/

Prise our squirel god.

#2 Bolo2k12 on 06.24.12 at 5:49 pm

Great post as usual, Garth. This is not going to end well.

#3 Euro Girl on 06.24.12 at 5:51 pm

Great post as usual, Garth.

#4 Not 1st on 06.24.12 at 6:14 pm

Look how the builders association is crying in Regina.

http://www.leaderpost.com/homes/feds+really+mortgage+rule/6829158/story.html

Told them 6 months ago in the showhomes it was a bubble that wouldn’t last.

#5 Uklurker on 06.24.12 at 6:37 pm

I recently went through the same dilemma. I ended up buying in Barrie, which feels dirt cheap to me after the UK. I bought in a nice neighborhood, walk to the lake etc. I get to the airport in 50 mins, and downtown Toronto in an hour as my meetings are mostly in the middle of the day. I suspect the market will go down, and I’ll lose some of our deposit, but I don’t give a rats arse…I’ve rented for 10 years in the UK waiting for that market to crash, and never feeling like I was moving forward…it’s mentally draining. If you aren’t stretching yourself, and you have a healthy deposit then buy a home and forget about property prices and focus on saving to invest in other stuff.

#6 Van guy on 06.24.12 at 6:38 pm

Have you phoned F to congratulate him?

#7 jess on 06.24.12 at 6:40 pm

dimon’s dictum:

Dimon’s Dictum: “Poorly Underwritten Loans Represent Income Today, Losses Tomorrow

Read more: http://www.benzinga.com/general/topics/12/06/2675607/dimons-dictum-poorly-underwritten-loans-represent-income-today-losses-t#ixzz1yklQbBiL

pirate equity
2012-06-23 — nytimes.com

Cambridge Industries, an automotive plastics supplier whose losses had been building for three consecutive years, finally filed for bankruptcy in May 2000 under a mountain of debt that had ballooned to more than $300 million.
Yet Bain Capital, the private equity firm that controlled the Michigan-based company, continued to religiously collect its $950,000-a-year “advisory fee” in quarterly installments, even to the very end, according to court documents

The t-shirts are out
Outsourcing is what Mitt does with American jobs.
Offshoring is what Mitt does with his money.

#8 $B$P$O$E on 06.24.12 at 6:44 pm

Kitty corner to the tallest building in Vancouver where little boxes in the sky sold for upwards of 1500$ per square foot just 1 short year ago. A shining diamond appears to compliment Vancouvers shopping Mecca of Robson Street just half a block away.
(That is Vancouvers “Rodeo Drive” for you seedy renting untermensch, it has a Jugo Juice and a Foot Locker and a Gap…just like the real Rodeo Drive…so keep your snickering to yourself)

But the retail diamond that is the only opening in the area in the past 6 month is.. you guessed it.
A DOLLAR STORE.

You just paid 1500 a sq foot in the heart of the most expensive city in the world.. or what ever tagline drivel Global is pushing this week and Rodeo Drive is now selling Made in China snow tires for a buck and a quarter each.

Im waiting for Globals 6pm slot tonight. Im sure it will include as breathless a piece on this news as it did talking up 35 million dollar joints on Belmont Dr. two short weeks ago.

#9 coastal on 06.24.12 at 6:48 pm

“But the fact is, F and Mark Carney now want real estate to deflate. ”

Exactly what these whiny assed mortgage brokers and agents are clueless to. Have they not listened to one word from Carney the last year ? He’s been chomping at the bit to jack rates but has been handcuffed, so sorry dummies, take the long way home tonite and admire all the for sale signs… and get used to your 500 sq ft. claustrophobic condo palaces, I’ll just keep admiring my 1100 sq ft. rental with the million dollar view.

#10 Frustrated Kiwi on 06.24.12 at 6:49 pm

The idea that it doesn’t really make a difference “if we’re planning on staying in our house longer term,” gets repeated around here a lot too. But surely, it makes a big difference? Suppose we had a crystal ball and knew that we could buy now or buy in a year for $100K cheaper. How much would that $100K add up to in interest (if borrowing) or lost earnings (if using cash in hand) over the time of owning the house – a lot I would say! So it makes a big difference, the only issue is that none of us have said crystal ball.

#11 GTA Girl on 06.24.12 at 7:01 pm

BILD went to Ottawa last month to lobby Flaherty. Must have done a bad job of it.

The CEO and chair were drinking on the patio of One in Yorkville yesterday. Bemoaning that they were duped.

So says a little bird!

Idiot developer sons are on notice. No more $5mil Post Road homes and Bentleys. All on the backs of poorly designed 500sqft condos where you can’t open the bathroom door without closing the dishwasher

Don’t cry for them.

They deserve the lesson.

#12 Keeping the Faith on 06.24.12 at 7:07 pm

“The Lannisters always pay their debts” … Will Canadian home owners?

I don’t think so.
Bankruptcies to rise 400% in the next 12 months, mark this day.

#13 thinker on 06.24.12 at 7:07 pm

All these rules are going to do is push condo prices HIGHER – does anyone actually get it?????? These rules will admit failure of not jumping into SFH sooner. That will not stay and keep the poor out of that space and instead move them into condo’s where great leverage of 20X is available and has not changed. This is bullish condo’s for sure.

#14 Suede on 06.24.12 at 7:14 pm

Another line up around the block yesterday for SOLO District in Burnaby. First of 4 condo developments in that spot.

*******AD*******

They just announced an extra $10,000 discount off the PRICES for my VIP clients:

Starting – before VIP discount
Junior 1 bedroom/Studio 479-524 sf $229,900
1 bedroom (7th floor) 587-616 sf $289,900
1 bedroom + den 645-748 sf $269,900
2 bedroom 907-935 sf $379,900
2 bedroom + den 943-1117 sf $393,900
Junior 3 bedroom (36th flr) 955-1051 sf $589,900
3 bedroom (36th flr) 1137-1164 sf $679,900

Developer reserves the right to change pricing and availability without notice. This is not an offering for sale. Any such offering can only be made with a disclosure statement. E. & O.E.

This is confidential between the sender and the intended VIP client. This is totally confidential and if you are not the intended recipient, you are hereby notified that any disclosure, copying, distributing, or the taking of any action in reliance on the contents of this information is strictly prohibited. If you have received this communication in error, please notify us immediately by telephone or email. Thank you.

************************

…Still building hype all around town. I wonder if there was a craigslist ad for people to get paid while holding spots in line. But don’t tell anyone about this secret pricing – it’s a secret.

#15 50% correction predictor on 06.24.12 at 7:19 pm

#13, thinker on 06.24.12 at 7:07 pm

All these rules are going to do is push condo prices HIGHER

________________________

Ask your Mom give you a grand or two for deposits, and buy a couple of condos.

Be a man and put your Mom’s money where your mouth is. Will you?!

#16 jess on 06.24.12 at 7:21 pm

Trafigura said in May it is shifting its trading centre and a key executive to the city state.

But Singapore is also beating Switzerland at its own game – on taxes.

Official corporate tax rates in Singapore have fallen by around 3 percent to 17 percent over the past five years but held steady at just above 21 percent in Switzerland, according to accountancy firm KPMG.

http://uk.reuters.com/article/2012/06/22/uk-swiss-haven-singapore-idUKBRE85L0DD20120622?feedType=RSS&feedName=GCA-GoogleNewsUK
race to the bottom

==========
http://www.thestar.com/news/canada/politics/article/1215998–ndp-wealth-tax-a-bad-move-don-drummond-says?bn=1
“People who make that much money typically do not have it as employment income. It’s typically from investment income . . . you create a trust account, you put it in Alberta,” where the top marginal income tax rates are lower, he added.

===
agree or disagree ?
….loopholes should be classed as tax evasion and not tax avoidance. Creating artificial schemes for which the primary purpose of the scheme is simply to reduce a tax liability is evasion.

#17 45north on 06.24.12 at 7:32 pm

You can therefore cross off million-dollar country estates with roiling property taxes, punishing energy costs plus long commutes.

like Kettleby, ON

McLister’s take on the new rules is a must read:
http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/06/20-observations-on-the-new-mortgage-rules.html

In Ottawa, I’m guessing that areas south of Hunt Club will decline but those to the north will retain their value. In Toronto the opposite: areas north of the 401 will decline, areas to the south will retain their value.

#18 Rental Monkey on 06.24.12 at 7:36 pm

The Mortgage Brokers are freaking all right. Had dinner with one on Fri night. He told me this is gonna be a big mess. (duh?) Also claimed that CMHC is topping out at the 600 million mark because the banks bundled and insured ALL mortgages with CMHC and sold them off, not just mortgages that were -20% dp. No idea if this is true or not…..but from what I have learned here, this info does not seem accurate. I asked if he meant sold off as deri atives, but Im not sure he is clear on what he was talking about either.
I guess Iam curious to know if CMHC insured loans where it was NOT required.

#19 woper_holic on 06.24.12 at 7:37 pm

@#13 thinker

You either laced your post with the thickest sarcasm ever or have left many of us speechless with your economic “intellect”.

#20 Rental Monkey on 06.24.12 at 7:37 pm

*billion* 600 billion

#21 Mean Gene on 06.24.12 at 7:38 pm

Loosing one’s shirt, me thinks I got it.

#22 Oilers Fan on 06.24.12 at 7:43 pm

I have an opportunity to buy a parking stall that would generate at least $175/mo rent in downtown Regina for $23,500.
Property tax is only $110/yr.
Do you guys figure this is a safe investment?

#23 Einzatgruppen kanada on 06.24.12 at 7:44 pm

In Hogtown I wonder for the likes of Queens Quay East and 1 Bloor..

#24 lubudmax on 06.24.12 at 7:52 pm

the 85% to 80% has nothing to do with HELOCS. it is mortgage refinancing – ie. amortizing loans. F carved out helocs completely last year, remember – ie. loans that don’t amortize are not insurable. HELOCS have been at 80% for a while now. on the other hand, refinancing was 90%. F reduced it to 85% in 2008 I believe. now its down to 80%. OSFI will be affecting HELOCs. F did not act on them this round – been there, done that…

#25 Onemorething on 06.24.12 at 7:58 pm

Even a couple of Canucks who have been smacked by the US RE downturn have to ask this question????

Do you all see how stupid we have all become. Slow melt or quick downturn of Canadian RE is a blessing in disguise!

Government knows it, trying to swing a slow melt so families dont loose their shorts however it could turn nasty quickly as demand for everything takes a crap.

Not a question of IF but WHEN! and therefore why would anyone own right now.

#26 Smoking Mans smarter cousin on 06.24.12 at 8:04 pm

I like this Garth Guy

Fresh out of High School…..and wisdom beyond his years.

PS: Mind you most people on the West Coast have it in the bag by Kindergarten.

#27 patiently waiting on 06.24.12 at 8:07 pm

“But with Ottawa’s deliberate deflation of housing just days ago, fear’s in the air.”

You got that right Garth, there is definitely fear in the air in my White Rock hood. I just did a quick search and found 100 listings that are either offering bonus commissions (some as high as $50,000!, one even throwing in $100,000 of furniture), and an unusually large number of Realtors selling their homes – trying to get out before the rush, a number are also mentioning in the Realtor remarks that the seller is “Motivated”, and a few foreclosures which I haven’t seen in awhile . . . funny thing is many of my neighbours haven’t a clue that it’s game over . . . . seems the sheeple are always the last to get the memo . . . when I see things like $50,000 selling bonuses and loads of realtors selling I get a feeling that this is going to be a lot worse (at least in Vancouver / Fraser Valley, and Toronto particularly) than many realize.

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=1384497257&s=BRC&t=BRC

#28 Humpty Dumpty on 06.24.12 at 8:12 pm

Mythical $$$ is already vanishing, but this donkey is betting on a shinny future…… Farm included….

Former Assistant Treasury Secretary Paul Craig Roberts Explains US Govt Rigging of Gold Prices

http://www.youtube.com/watch?v=z5kmTji3bdM&feature=player_embedded

#29 Useless mortgage borkers criminals in an ALL OUT PANIC! on 06.24.12 at 8:12 pm

“By the way, the mortgage industry is freaking. The professional association issued a statement saying, “these changes, together with new OSFI underwriting guidelines…may precipitate the housing market downturn the government so desperately wants to avoid.””

——————————————————————–

Mortgage brokers are in an all out panic as these uneducated useless people HATE the free and open markets and IMO should all be chaged with FRAUD. The mortgage industry went crazy with fear when OSFI said they wanted people to requalify as that would expose IMO the financial crimes within the mortgage industry. When the crash is over mortgage brokers will not admit they were mortgage brokers for fear people will have more then words to say to these criminal scumbags. POST in a PANIC mortage brokers POST in a PANIC!!!!

#30 TurnerNation on 06.24.12 at 8:13 pm

Blast from the past: a young Garth writing for the Toronto Sun.
1981. Still going strong!

Fast forward to 6:40

http://www.youtube.com/watch?feature=player_embedded&v=ASaSldxSnG0#!

#31 a prairie dawg on 06.24.12 at 8:17 pm

Personal HELOC debt finally down to a measly $691.

From 20K not long ago, that’s pretty sweet. :)

Mortgage principle also knocked down 50% in last 5 years. That’s pretty sweet too.

Think parables… Ants, squirrels, preparing for the future… aka, getting your head out of your a**

And read more of the blog. You might learn something.

#32 Bill Gable on 06.24.12 at 8:20 pm

As I noted yesterday we have over 50 condo towers in Dampcouver`s pipeline.
With that boggling stat in mind – the Open House signs in the West End are numerous and not a ton of suckers are lining up.
I counted 15 opens in 6 blocks – and you can bet hucksters are saying “get in before the rules change”.

Cue “The Doors” – ” The End”.

Because it is.

Great post, oh bearded one.

#33 Ryan Perich on 06.24.12 at 8:25 pm

I haven’t read much at all on the thought of….
put 20-21 % down….and the lender can make the mortgage last 40, 50 years no problem.

quick math comparison for $300,000 home (a piece of junk in Edmonton right now ) :
$15,000 = 5 % down @ 4 % interest = $1360 / month

—or—

buy a $400,000 home @ 4 % interest, put down $80,000, amatorize for 40 years and your payment is $1340 / month…same montly cost, $100,000 more home bought for only $65,000 more initially.

good deal ? no. stupid high prices to begin with. but the point is you can still get a 40 year mortgage even after these rules take effect and buy a bigger home and have bigger debt.

#34 sluggo on 06.24.12 at 8:30 pm

11 minute mark pretty much sums up how excess leverage destroyed the US housing market and why it’s not about the houses.

http://jessescrossroadscafe.blogspot.ca/2012/06/michael-j-burrys-commencement-address.html

#35 eddy on 06.24.12 at 8:32 pm

Carney and Flaherty should have fired long ago. In TO the market is skewed beyond repair- entry level shit boxes are half a million: because of F&C, free money for life, and all the first time buyer rebates and incentives from the city and the feds. Now the two criminals most responsible for the mess are coming on TV with a solution. Is anyone buying their BS? The message from Haarper is clear- “We’re not responsible”

#36 highway61 on 06.24.12 at 8:45 pm

i can state, with full confidence, that here in calgary there will be no price drop during next 18 months.

#37 sotiri on 06.24.12 at 8:46 pm

Great post as usual, Garth. Thank you.

#38 Mark W on 06.24.12 at 8:53 pm

http://www.realtor.ca/propertyDetails.aspx?propertyId=12074910&PidKey=96255155

Burnaby dump … next to Vancouver. A tear down.

Bare Naked Ladies song redux: “If I had a million dollars I might have enough to make a down payment on a house in Van..cou..ver.”

#39 Erma on 06.24.12 at 9:01 pm

What was the TDS at before Garth? Has it been raised or lowered?

#40 Andrew on 06.24.12 at 9:03 pm

Commute from Mississauga to Milton, Burlington, Erin (where is that???), Caledon? Enjoy driving on the 401/403/410/427/QEW in rush hour, paying hundreds of dollars a month in gas bills, running into “all lanes blocked due to a collision” every week on one of the highways, having your commute time double whenever it rains.

Rent a condo close to your work (south Etobicoke, Port Credit, etc.) You have to be crazy to live far from your work in the GTA. Traffic in Mississauga near the airport is brutal.

#41 Boomer on 06.24.12 at 9:05 pm

Just sitting here watching Dateline, program on the middle class poor in Boulder Colorado. Very sad that the three families featured were not the high living, high spending Americans that we often mock. They almost all had emergency funds but have hit the wall on being able to find jobs so have eaten through their savings and 401K’s. All of them ended up going to food banks and asking for assistance from the social agencies to pay their bills and get medical coverage. BTW, all of them were renters. I sincerely hope this is not what is in store for Canada. Pay down your debt, live below your means, take Garths advice. Maybe there but for the grace of good advice go we!

#42 Superman on 06.24.12 at 9:14 pm

Vancouver is down 3 months in a row. This has only happened 1 time in 10 years, and it was in 2008. If Vancouver goes into the red for June, it will be 4 months in a row, which will set a new record. My eyes are on July 1… let’s see if this bubble is going to deflate rapidly, or simply explode. Those are the only two options at this point.

Oops, I have to go now… my medium Panago Veggie Korma multigrain thin crust pizza and San Pellegrino sparking water is here. Gosh… took them long enough.

#43 ACP on 06.24.12 at 9:26 pm

#18 Rental Monkey on 06.24.12 at 7:36 pm
“I guess Iam curious to know if CMHC insured loans where it was NOT required.”

I don’t know how they could since it is the purchaser that pays for it. I’m not shelling out extra money for something that I don’t need, especially when it’s based on a percentage of the purchase price. However, I have heard of the banks talking people who had 20% or more for a downpayment into putting down less so they could get CMHC, and when they didn’t they refused them the financing.

#44 Aaron - Melbourne on 06.24.12 at 9:27 pm

Shirtless?

There’s always:

a hair shirt
if someone wears a hair shirt, they choose to make their life unpleasant by not having or experiencing anything that gives them pleasure

#45 Sebee on 06.24.12 at 9:36 pm

New rules are nice Garth, but what do we do about this 150% debt. Surely it’s better to push this down quickly suffer a year and grow, than have it hanging over Canadian economy for a decade of slow debt reduction.

#46 george on 06.24.12 at 9:40 pm

“There’s no question that Canada’s gigantic housing bubble is going to burst. It’s just a matter of when.

Housing prices in Canada have more than doubled in the last 10 years, and in cities like Toronto and Vancouver, prices are up more than 140 per cent. But the soaring prices have nothing to do with wages which have remained relatively flat during the same period. What’s really driving housing prices is debt. Low interest rates and lax lending standards have created a speculative frenzy that’s pumped up a monstrous asset-price bubble that threatens to crash the economy and send unemployment skyrocketing.”

Housing Market Smackdown

#47 East Van on 06.24.12 at 9:55 pm

F and S.H. knowingly created the bubble. Their plan: blow up housing, wreck the economy, institute austerity, and hand over the country to corporate interests.

Take your meds. — Garth

#48 Johnny D on 06.24.12 at 9:56 pm

@ #4 Not 1st
Typical Leaderpost garbage. Like I always say… The LP might as well be a flyer distributed by CREA itself

#49 KWKid on 06.24.12 at 10:00 pm

“The new 39% cap will lower the maximum theoretical mortgage by roughly $57,000, or 12%, for a household earning $75,000. (This assumes a 3.09% 5-year fixed rate with a 25-year amortization, no debt and 5% down.)

If you combine that with the amortization reduction (from 30 to 25 years), it’s quite a one-two punch—amounting to a 20% reduction in maximum theoretical purchasing power.”

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/06/20-observations-on-the-new-mortgage-rules.html

#50 TurnerNation on 06.24.12 at 10:00 pm

#41Boomer on 06.24.12 at 9:05 pm

Shocking stuff. I do not have a TV but will watch when it comes online.
The comments are equally disturbing – and true.
This one reminds me of harper’s current doing.
Divide and conquer:

http://insidedateline.msnbc.msn.com/_news/2012/06/23/12376840-in-suburban-america-middle-class-begins-to-confront-poverty#comments

“””The wealthy have gamed the system to their advantage.
Our elected officials do not serve the people.
And we, the people, continue to elect them.

Tell me, gullible Christian consumers, when the whole thing does finally collapse for the middle class, will you sleep soundly knowing that you saved stem cells, or fetuses, or that you pushed for creationism in school, or trickle-down economics, or fought the godless democrats all for baby Jesus, or stood hand in hand against the dire threat of gay marriage?
None of that helped. None of it put food on your table. None of it made a bit of difference.

While you were distracted and divided and riled up for the wrong causes, your future was outsourced and offshored. Tax laws were rewritten. Wealth shifted upwards while you were fooled into thinking that you were doing ‘better’. Spend and borrow! Take out a home equity loan! Buy a cart full of Chinese crap! Put your neighbors out of work to save a few bucks while shopping!”””

#51 Bo Xilai on 06.24.12 at 10:03 pm

Drove past a couple of open houses in North Vancouver (Pemberton Heights) today… One was 1.1M, the other almost 1.4M (post July 9, who knows)…

Crickets were chirping loudly… Front doors open, no one inside…

#52 obert on 06.24.12 at 10:05 pm

First, thank you all the Greater Fools for going in debt and buying houses over the last 5 years (when the real economy was shrinking) to keep GDP stable and Canada from entering deep depression like US or Europe – your job is done.
Now it’s time for reallocate the money back into the real economy: manufacturing, mining, etc.

Question why Conservatives want to deflate the RE now? With Genworth downgraded, and the CIBC not being able to sell it’s Mortgage division, and the prices of RE already retreating the risk of major downgrade of CMHC and with it Gov of Canada bonds has increased dangerously.

It was better to sacrifice the Real Estate Industry and allow the Home prices to go down -with temporary slowdown of the economy – then allowing for Canada to lose its Triple AAA rating. The alternative was to wait till the downgrade and raising the borrowing costs to the Whole Economy and creating deeper and long term problems.

I think creating the housing bubble was a deliberate strategy to get over the downturn of the last few years – Canadians have been better off then the rest of the World (US or Europe).

After all the housing bubble in the US was also burst deliberately by Greenspan – he first help to create the bubble and when it got too “frothy” increased rates and collapsed it. Once the bubble deflated, the rates went down again to support the general economy.

History repeats itself.

#53 Devore on 06.24.12 at 10:08 pm

#5 Uklurker

I’ve rented for 10 years in the UK waiting for that market to crash, and never feeling like I was moving forward…it’s mentally draining.

Mentally draining? Maybe you should have stopped “waiting” and started living.

#54 Can it be? on 06.24.12 at 10:09 pm

Quiet open houses today in Mississauga.. Toronto… Lots of houses taken off the market in davisville, Toronto and north Of Toronto. Houses still have signs but are not on mls… Interesting times. How long can people afford to hold on?

#55 Gunboat Denier on 06.24.12 at 10:10 pm

29 Panic – you need a new gimmick

#56 Can it be? on 06.24.12 at 10:14 pm

You know that show where people flip homes and the blond lady comes to give them advice… Usually people don’t listen, then they show at the end the total asking amount and they deduct the monthly expenses until either the house sold or until the show stopped following the people… And they comment on the state of the flip… That’s the feeling I have now… Everyone is watching as their potential profit slips away month by month. Everyone is hoping to get offers and regretting thy didn’t sell months ago.

#57 Keeping the Faith on 06.24.12 at 10:15 pm

#22 Oilers fan, yes buy-in!
In fact, double down.
They’re not building any more flat land in SK, better get it now and rents are only going to go up.
Definitely the time to get in, on the ground floor.

#58 Smoking Man on 06.24.12 at 10:27 pm

Premature crashulation bubble heads. I don’t see the fat lady yet

#59 Mr Buyer on 06.24.12 at 10:31 pm

#47East Van on 06.24.12 at 9:55 pm
F and S.H. knowingly created the bubble. Their plan: blow up housing, wreck the economy, institute austerity, and hand over the country to corporate interests.

Take your meds. — Garth
…………………………………………………………………………..
I think their plan is more like try to preserve the facade of control over this bubble and try to reinflate it from time to time (think election time) all the while pass it off as chasing the elusive soft landing. On the other hand they may well be actually trying to engineer a history making soft landing which is by and large a fools errand. But how am I supposed to know anyways. Once people realize they can no longer bank on house prices the whole ball of string will become unravelled.

#60 randman on 06.24.12 at 10:33 pm

Intuitive Miss to Anonymous…

“Did you even read your message before you hit the “submit” button? Their wife SHUTS UP! Really?

Sounds like you are the one who is only out for yourself.

And sounds like a vacant lot out in the country is the right place for you. Alone. What self-respecting woman would want to be with a misogynist like you?”

Me thinks thou does protest too much!

#61 Smoking Man on 06.24.12 at 10:33 pm

You see everyone on here is convinced that new regs will dry up bidders and it will. But the way this herd in the gta works is you will see the inventory vanish just like it did in 2008 and 2009. Still have a strong job market and interests rates that are going to be heading down not up.

Sorry LaughingCND hate to pee in your cornflakes for the 100th time.

#62 Mr Buyer on 06.24.12 at 10:37 pm

#58Smoking Man on 06.24.12 at 10:27 pm
Premature crashulation bubble heads. I don’t see the fat lady yet
………………………………………………………
Just like you did not see the 3s over 2s the took out your all in Queen high. Tunnel vision.

#63 KIM on 06.24.12 at 10:40 pm

#29 useless mortgage brokers

I can understand the hatred towards mortgage brokers as I had encounters with these self-serving parasites on Canadian taxpayers

#64 Nostradamus Le Mad Vlad on 06.24.12 at 10:41 pm


“. . . (this apparently seems obvious to everyone but Canadians).” — Well, not all of us. Some (not many) of us did have the foresight to sacrifice exotic holidays and expensive trinkets, pay off the mtge. and other debts ASAP, and enjoy a debt free life.

“Billions in mythical equity is about to vanish as Canadians learn they’re not superior, after all. Just late.” — Mythical equity is the correct term. One should realize by now to take advantage of the opportunities provided to live a reasonable retirement, primarily using ETFs in TFSAs and DRIPs in RRSPs.

Home equity is not one of them.
*
#240 VICTORIA TEA PARTY on 06.24.12 at 5:05 pm — “The Muslim Brotherhood, that would be.” — There are always two sides (or more) to every story.

More than anything else, the US and UK, one way or another, are almost gonzo from Egypt, so I guess there will be a whole bunch of anti-Syria and Iran stories being cranked up. Getting so damned confusing nowadays!

#7 jess — “Outsourcing is what Mitt does with American jobs. Offshoring is what Mitt does with his money.”

A fine pair to choose from — a Rethuglocrat who is declares war on TROTW, and a Demican who sends America’s work to other countries while fattening his own pockets. Isn’t that called socialism?

#58 Smoking Man — “Premature crashulation . . .” — Interesting play on words, SM!
*
Wells Fargo moving jobs to India soon; Economics First para. lays it out; RBS – NatWest “This may not be a “glitch.” This might be a Bank Holiday like we are seeing in Italy and France, but RBS doesn’t want to admit it.” wrh.com; EZone Guess this is what TPTB wanted. Chaos, disunity, everyone for themselves; Panic Seems we may not be the only ones affected by this giant bowl of spaghetti, but The Middle Class Who is destroying it? The BdBs (TPTB, the elite), etc.; One World Govt. CNBC says so, so it must b true; Harper What else could be expected from a control freak? Two Years One could lose their dole (EI) benefits if they don’t have a job after two years, but what if there are no jobs?

Soros’ Solution to the EZone fuddle-duddle; Comparisons dubya and Obomba’s first term in one chart; Robert Shiller Deep end mania? Shipping World Players “No one knows more about the global economy.”; Learning About Banks; Downturn in The Fourth Reich? Capital (Cash) Controls In Spain; Debt Contagion As go PIIGS, so follows Argentina; 5:20 clip Investing for dummies; Divorcee’s $2 mln. settlement Don’t spend it all at once!
*
Google See head. There are plenty of alternatives; Obomba A puppet anyone can believe in; Nature Fights Back against the weasels known as Monsanto; Losing My Sovereignty The cost of joining NATO; Paraguay Obomba’s second South American coup, and Kenya for dessert; Steroids A person I used to work with took ‘roids regularly, then a doctor prescribed him drugs for a further illness and, in the end, a combination of regular drugs and ‘roids caused him to commit suicide; Soggy UK and the Wet Coast have one thing in common; SWAN ((Syndrome Without A Name) 20 months old, nice pic of her swimming underwater; Aspartame Sweet killer? The Vatican and FOX-TV Far and balanced reporting? In yer pipe! New Age Garbage However, it is a person’s freedom of choice to believe what they want to.

#65 Smoking Man (fraud) on 06.24.12 at 10:46 pm

Vancouver will see shocking price drops over the next 180 days.

Will shock this market like nothing it’s ever seen before.

#66 Smoking Mans smarter cousin on 06.24.12 at 11:04 pm

This Garth guy…

I am predicting a real positive future..

This young buck has a lot of potential…recommend he try politics, if not ……start a blog with Nostradamus quotes and a Ouija bored.

#67 Inglorious Investor on 06.24.12 at 11:12 pm

Government giveth, and Government taketh away.

It’s a pendulum of stupidity. First they distort the market with rules that make if far to easy to get cheap money, pushing the market to one extreme for the benefit of some special interests.

Then, once everyone is in the game, they change the rules, roil the markets again, and risk the pendulum swinging to the other extreme. And all those unsuspecting souls caught in the middle of it are utterly impotent.

This is why guys like Peter Schiff blame government for so many of our economic problems.

This is also why we need a solid foundation of consistent, rigidly enforced regulations based on sound financial principles and prudence.

Then let the damn market take care of itself.

Let the market price money. Let the market price houses. How can you know where you stand if the ground beneath your feet is constantly moving?

This kind of blatant central economic planning and intervention never works well. Haven’t we learned this lesson by now?

#68 City Slicker on 06.24.12 at 11:17 pm

#47 East Van on 06.24.12 at 9:55 pm

F and S.H. knowingly created the bubble. Their plan: blow up housing, wreck the economy, institute austerity, and hand over the country to corporate interests.

Take your meds. — Garth
———————————————————-
This is what i’ve been saying all along, our politicians are also controlled by the illuminati. Soon it will be serfdom for us.

#69 Charles Ponzi on 06.24.12 at 11:26 pm

I find it extremely difficult to believe that the global debt crisis happened by mistake.

Politicians must have known the long term consequences of their actions. Believing that our politicians are just plain dumb is being far too generous. Of course our politicians knew that they were creating a real estate property bubble.

Politicians have inside information and use it for their own financial benefit.

#70 Bottoms_Up on 06.24.12 at 11:37 pm

#5 Uklurker on 06.24.12 at 6:37 pm
—————————————-
I have family that bought in Barrie…very reasonable prices….may go down a bit but I can’t see it crashing.

#71 Bottoms_Up on 06.24.12 at 11:43 pm

#10 Frustrated Kiwi on 06.24.12 at 6:49 pm
————————————————
Obviously $100,000 makes a difference over 1 yr, but what if it’s over 10 years?

for example, if you can buy a house now for $500,000 that will cost $400,000 in ten years….do you buy or rent today? You could very well buy today, and build equity to where you’re not under water 10 years out…it IS a difficult decision, and EVERYONE is in a different situation–income, wealth, job stability, family considerations, etc.

#72 Island renters on 06.24.12 at 11:45 pm

We rent in a suburb of Victoria and gave notice this month. The market is totally flooded and our landlord has had zero interest. He’s a young guy with a kid and another house up island. He can’t afford to replace the roof and has missed insurance payments lately. I hope for his sake he gets out now, while he can, at a loss. I can’t see this ending well for him, or for the many other Canadians in his position.

#73 Bottoms_Up on 06.24.12 at 11:50 pm

#33 Ryan Perich on 06.24.12 at 8:25 p
——————————————
Huh? Where can you get a 40 yr mortgage?

#74 Dr. Nick Riviera on 06.24.12 at 11:52 pm

Hey Garth,

In your on going coverage of Canadian cities (really enjoyed the one on Winnipeg) will you be covering Edmonton at some point? I’ve got friends and family telling me I’m an idiot to not buy right now because of the “coming Alberta industrial boom” which will push house prices into the stratosphere. A little ammo to fire back would be appreciated greatly!!

Thanks for everything…

#75 Shoeshine Boomer on 06.24.12 at 11:57 pm

Yes I had the great honor of being F’s neighbor in Whitby
for some years . Strangely , in a tiny townhouse next to the walled stone fortress on a couple of acres and on the occasions I happened to be stumbling by and saw F coming or going I couldn’t resist calling out ‘shoeshine ?’
always made me smile. he never did for some reason.
The wife appeared nervous no doubt from the knowledge
of Whitby’s massive mental institution on the lake .
Where am I now? Why , I’m in the amazing town in southern Ontario where time stands still. That’s right , where real estate never went up and may never go down either. Fort Erie Just tumbleweeds blowing by as my daughter stated aghast on her visit from Bay Street .
Far from F at last .

#76 T.O. Bubble Boy on 06.25.12 at 12:07 am

A potential homebuyer in Calgary thanks F for bursting the bubble:

http://blogs.calgaryherald.com/2012/06/24/how-jim-flaherty-temporarily-burst-my-real-estate-bubble/

So, when it comes time for me to buy my first place under the new rules – although it’ll cost me a bit more every month – I’ll know I can afford my payments, not get in over my head and, ultimately, pay off my mortgage sooner, saving me thousands of dollars over the long run.

Oh, and did I mention the prospect of getting a home cheaper than what’s available in the current market? Yes, a housing price correction of around is expected to take place over the next year as the mortgage rules tighten.

So, thanks Flaherty. That was definitely not a bad idea.

#77 carl berger on 06.25.12 at 12:18 am

Sellers in Vancouver and the lower mainland including Richmond are still holding onto their dreams of selling at historical high prices. Most of them are saying they hear that prices have taken a “breather”, but are expected to go back up 4% by 2013. Financial “specialists” are telling people not to expect a big drop in RE prices, but they will soften a bit. Realtors are actually telling clients that activity is higher than ever and lower priced RE (such as $500K) are actually selling like hotcakes. They have been right for many years. (sigh)

#78 Lotusman on 06.25.12 at 12:27 am

I spoke with an accountant type who works for a broker. He said they have revised their budget after the F annoucement last week. He is projecting a 1% drop in the number of realtors per month in the coming year. He had to do that for cash flow and other purposes, like the desk fee (or admin fee) that they charge for each realtor in the brokerage. Good luck to all the marginal realtors, your career is toast. You are one of the Great Fools. My adive is to update your resume as soon as possible. Your broker “says” so!

#79 Mr Buyer on 06.25.12 at 12:35 am

#61 Smoking Man on 06.24.12 at 10:33 pm
You see everyone on here is convinced that new regs will dry up bidders and it will. But the way this herd in the gta works is you will see the inventory vanish just like it did in 2008 and 2009. Still have a strong job market and interests rates that are going to be heading down not up.

Sorry LaughingCND hate to pee in your cornflakes for the 100th time.
…………………………………………………………….
How is this for a whiz. Can’t flip it, can’t afford it.

#80 Housing_Bubble on 06.25.12 at 12:35 am

Thanks for the clarification about debt ratios Garth. If they’re decreasing, rather than increasing (what I previously thought)…. then this is going to be carnage….

#81 John on 06.25.12 at 12:39 am

It’s important to remember that housing prices in Virginia did not go down nearly as low as they should have. There was a lot of cash injection in 2008-9, and now continuing. It could continue, but as with any drug, much more would be needed to get the same effect.

The bottom this time will mirror more reality. What appeared like a shirt loss in Virginia, might really only have been a couple of popped buttons…compared to what a free market would have done.

Bottom line is that the “stimulous” factor + the phony US elections don’t add up to moderate price drops in real estate bubbles. Canada is simply an extension of one western economy…the “difference” was just some extra time give to saturate the “suckers” with cheap money.

Finally, as the US goes, so too goes Canada…but perhaps with a deeper bottom.

#82 ozy - A realistic outcome in GTA on 06.25.12 at 12:45 am

A realistic outcome in GTA ( the 905 might be affected twice as much than 416, you count the numbers, I just give you a combined average)

To avoid a larger price decrease, all sale prices should be reduced 5% acroos board on July 10. All unsold homes slowly reduced or buyers will get on strike (all about expectations).

Then prices should drop another 5% by December, market forces, fading demand, rising competions between desperate sellers.

That -10% in 6 months, will put a few folks back capable to buy at still unaffordable levels, and might stabilize the market for short term (Not the kando market though, obviously, isn’t)

Medium term, there will be the employment & mortgage rates at play starting spring 2013, they will decide the trend up or down for the remaining of next year. Probably another -5% ! See you a year from now 15% lower (GTA average, -20% in 905 and -10% in 416)
OK, let’s say someone layed down the future for you. What will you do now (just curious)? – comments anyone

#83 FTP - First Time Poster on 06.25.12 at 12:46 am

Wife & I have discussed moving, buying something bigger. We bought in 06 just before prices went nuts. Up 60% on what we paid. We do have a a few stipulations:

– Min timeline: 18 mos, Max: Never
– Looking tax foreclosures (thanks Garth) & repos;
– Wont increase our mortgage by more than 50% (our mortgage is about 1.1x gross).

I’m sure the RE landscape will be much different in 18 mos time.

#84 Finally on 06.25.12 at 12:51 am

“I told you so” – I can’t wait to say this to all my friends telling me the market won’t go down, while I say otherwise. It’s going to be a great summer!

#85 Smoking mans smarter coousin on 06.25.12 at 12:53 am

I am the UNO… and Only……… Smokink Mansz dopplegangster

#86 new-era on 06.25.12 at 12:59 am

What is wrong with housing once again becoming affordable?

The Real estate ponzi scheme is dying.

Yes it will be different this time. The US spent years thinking they reached the bottom. (and still haven’t)

We have that knowledge. Knowledge that we can hit a bubble which will see a 40 to 70% loss in value. Therefore once this baby starts to fall. there will be no support on its way down and no dead cat bounce.

Also the whole western countries are broke and all in slowdown mode. meaning an increase of un employment can be foreseen

#87 Trixie on 06.25.12 at 1:07 am

Great post. Look forward to reading every day. Please share your thoughts on the calgary market. It is a young city in a “have” province……and everyone I discuss this situation with says l “it’s different here.”. The new rules came out on Thursday and still they say it’s different here. Could it be different here? I hope not.

#88 Piccaso on 06.25.12 at 1:13 am

F and Mark Carney now want real estate to deflate. They desire lower prices, even knowing thousands of recent buyers will be thrust under water, economic growth will be impacted, employment whacked and downtown condo towers turned into monuments to speculator stupidity and losses. As houses lose value, families will shed equity – everywhere. The wealth effect will be gone, and consumer spending impacted. Lower retail sales, fewer Best Buys and more Wal-Marts.

It underscores the seriousness of the choice: wait for a US-style, bank-kicking housing wreck, or create a Canadian-style controlled melt.

——————————————————-

Perfectly said!

#89 TRT on 06.25.12 at 1:26 am

This immigrant from China managed to get $165 million out…bought a home on the bridle path in Toronto in 2005 but it sits unoccupied. read on…

http://news.nationalpost.com/2012/06/24/mobile-immigrants-test-canadian-courts-reach-in-divorce/

#90 RainCity on 06.25.12 at 1:34 am

Great post Garth!

This morning I received a Groupon email offering $1500 off closing costs, and on my way to work every morning I see more ‘For Sale’ signs than I have in the three years I’ve lived here. People in this city cannot even imagine the disaster that is coming.

I feel bad for our stupid friends who just bought in Calgary and are now carrying two mortgages because they decided on a whim that the dog needed a yard after six years without one and “it seems like a good time to buy.”

#91 Aaron - Melbourne on 06.25.12 at 1:39 am

Steve Keen public talks in Toronto

http://www.debtdeflation.com/blogs/2012/06/22/upcoming-talks-in-toronto/

I’m currently at the Fields Institute in Toronto, working with mathematicians here to develop my monetary models. I am taking part in some “no maths barred” seminars every Tuesday:

http://www.fields.utoronto.ca/programs/scientific/11-12/nonlineareconomics/

But I will also give two rather more accessible talks while here. The first is on the private debt bubble and its implications for Canada:

The Continuing Debt Bubble: What It Could Mean for Canada
Dear friends and supporters,
Please join the Canadian Centre for Policy Alternatives’ Ontario team for an evening of wine, cheese and cutting-edge analysis about the risks in Canada and worldwide from the continued expansion of debt – featuring renowned Australian economist Steve Keen.
The Continuing Debt Bubble: What It Could Mean for Canada
Thursday, June 28, 2012
7:00-9:00 pm
The Arts and Letters Club
14 Elm Street, Toronto ON
Sponsored by the Canadian Centre for Policy Alternatives’ Ontario office, the Progressive Economics Forum, and Ryerson University’s Department of Politics and Public Administration
For more information, see:
https://app.e2ma.net/app/view:CampaignPublic/id:34091.12831350436/rid:c96eafff0037de38c7676411a7bc9265

The second is a talk on the global crisis:

Why the crisis is not over

PUBLIC LECTURE
July 5, 2012 at 5 p.m.

Steve Keen
University of Western Sydney

Most post-WWII recessions have lasted less than a year; this crisis has been going on for five. Conventional “Neoclassical” economists didn’t see it coming, can’t understand why it hasn’t gone away, and their preferred cure of austerity seems to be making it worse. To understand where it came from, why it hasn’t gone away, and what might work to end it, you have to understand the dynamics of private debt.
Steve Keen’s models, inspired by Hyman Minsky’s “Financial Instability Hypothesis”, anticipated the crisis and explain why it won’t go away until private debt levels are drastically reduced.

For more information, see:

http://www.fields.utoronto.ca/programs/scientific/12-13/public_lectures/

#92 Piccaso on 06.25.12 at 1:57 am

#46 george
“There’s no question that Canada’s gigantic housing bubble is going to burst. It’s just a matter of when.

——————————————————–

Funny how the rest of the world can see it but not Canada.

#93 carl berger on 06.25.12 at 2:46 am

#18 Rental Monkey

I can tell you first hand that banks have been requesting CMHC insurance on down payments of over 20%. That is indeed true.

#94 Buy? Curious? on 06.25.12 at 2:51 am

Haha! Today’s picture, I thought you were done talking about Winnipeg?

Garth, how often to field questions from wishy-washy couples asking if they should buy a house or not? Do they ask you if they should have kids or not? Should they send their kids to university or not? Why can’t people just make a decision, and let the chips fall where may? Argh!

Hey, I’ve got a question. Should I wear pants today or my speedos?

#95 Jane24 on 06.25.12 at 3:03 am

What happened to all the Vancouver pumpers that were on this site 12 to 6 months ago. You know the ones that said things like;

‘ Vancouver will never go down.”

‘Vancouver is only for the rich.”

“The average Vancouver house will be 3 million in a few years”.

Come on Garth remind me who they were.

#96 penpal on 06.25.12 at 3:26 am

@ # 36 highway61

…and I can state, with full confidence, that you are an idiot.

No one knows the future, not even you genius!

However, there has been a little foreshadowing lately (on this very blog, no less) and those facts sure as hell does not support your asertation.

#97 Rob now in Nova Scotia on 06.25.12 at 4:23 am

As much as I despise Kommandent Harper and the Party, at least F is acting somewhat responsibly and trying to deflate our housing bubble now before it blows even bigger and then bursts.

#98 Aussie Roy on 06.25.12 at 5:08 am

Aussie Headlines

Australias productivity at rock bottom.

It’s the unproductive use of capitial, you know, that big housing bubble and $1T AUD of mortgages

Even though more words have been written about Australia’s productivity performance than most other economic issues, I have learnt very little about what our productivity trends really mean.

Recently, the RBA tried to unravel the mystery. Here at MacroBusiness my wise colleagues have often penned their interpretation of events.

To throw a little more confusion into the mix, the RBA’s D’Arcy and Gustafsson note that:

http://www.macrobusiness.com.au/2012/06/twas-the-land-bubble-that-killed-productivity/

The release of the 2012 REIV State of the Victorian Property Market report (below) provides a sobering assessment.

According to the REIV, transaction levels – both private sales and auctions – are well down on the five-year average (see below table).

http://www.macrobusiness.com.au/2012/06/reiv-capitulates/

Mortgage providers continue to hit the wall

Investment group Perpetual will cut 300 jobs over the next two years and exit the mortgage lending business as it cuts costs amid a downturn in the financial services sector.

But the job losses may not be be confined to Perpetual. The company will also sell its lenders mortgage services business, which could see another 280 people jobs lost, taking the total job cuts to about 580 in a company that employed nearly 1382 people in 2011

http://www.theage.com.au/business/perpetual-wields-jobs-axe-in-restructure-20120625-20×69.html

All advice says “Save, now not the time for big debt”.

I don’t think this is a time in your life to have a large debt. You might consider selling the post-’85 property, clearing your loan and placing as much as possible into super

http://www.theage.com.au/money/saving-strategy-key-to-future-20120623-20uue.html

Lower interest rates cuts oldies income

THE Reserve Bank’s recent rate cuts are benefiting young people at the expense of the old, retirees say.

For John Logan, a 66-year-old Melbourne-based mainframe computer programmer preparing for his retirement, the slide in interest rates has eroded the growth of his term deposits and he is unmoved by complaints of younger mortgage payers.

http://www.theage.com.au/business/lower-rates-eat-into-retirees-income-20120624-20wg3.html

Business in the suburbs dying

However, Melbourne’s suburban retail vacancy rate has nearly hit double figures, at 9.5 per cent – the worst level in 20 years – due to a fall in fashion retailing, refurbishments and redevelopments, according to Savills Australia research.

http://www.theage.com.au/business/property/city-retail-space-tight-but-in-suburbs-its-a-different-story-20120624-20wf8.html

#99 Fort Mac Flatlander on 06.25.12 at 5:16 am

It is really interesting to see the builders in Regina start to squirm. Why, or should I say, How the hell do they justify $650,000 for a house next to the airport with a nice backyard view of the Walmart loading docks is beyond me. I guess not needing an alarm clock with those five o’clock deliveries is justification enough. The entire city is built on a backfilled slough.
But enough of that. Garth is there any way we can incrporate a thumbs-up/thumbs-down to the blog comments, so I can sift through the riff-raff and find the true value?
Thanks.

#100 Charles Ponzi on 06.25.12 at 6:08 am

Thumbs-up/thumbs down to the blog comments is a fantastic idea.

#101 Keeping the Faith on 06.25.12 at 6:22 am

Hallelujah!!!

Garth you sounded great on CBC Toronto Metro Morning!
Finally, something to offset Matt G’s blind belief in the “Hot” Toronto market.
Here it is in case you missed it:

http://www.cbc.ca/metromorning/#igImgId_43340

All praise the Bearded Oracle…. Mulcair is sooo jealous.

The day has come … the promise land is here.

Thank you Garth!

#102 bubble head on 06.25.12 at 6:29 am

if the banks (at least TD) believe prices are going to fall 10-15%, would they not hesitate giving out an unsecured mortgage of over 1 mill especially if the buyer only put 20% down?

Seems to me that to get that mortgage the buyer will need lots of collateral.

#103 Keeping the Faith on 06.25.12 at 6:50 am

#95 Jane24

Good point Jane!
It’s time to remind BPOE, Stevenson and the like of how IDIOTIC they were when they were young, meaning 2 months ago…

What other pumpers came to this site to make fools of themselves to forever be kept in the world wide web?

I would love to see a Garth post summarizing some of the best/worst predictions over the last 12 months!

I love this site!

#104 Keeping the Faith on 06.25.12 at 6:52 am

#99 … I concur, thumbs up/thumbs down would be a great addition to the site!

#105 bigrider on 06.25.12 at 7:02 am

#11 GTA Girl-

I would love to meet you one day, if we haven’t already.

Seems to me we know the same people.

Sure. Can be arranged. That’ll be $19.95, please. – Garth

#106 bigrider on 06.25.12 at 7:24 am

Garth, should be an interesting time between now and the Sept/October , coming up.

I give it at least a 20% probability that S&P, TSX and MSCI take a 20% dive between now and then. That will be a 40% plus drop since highs reached in May 2011 for all three, and make for third stock market crash inside of a decade.

If it happens(not saying it will) that should finally destroy once and for all any confidence the retail investor had left in investing in the financial markets.

Equities will be considered pure poison and net redemptions from the ownership of strong companies continue for a generation to come.

Rear view mirror investing…can’t beat it.

#107 jerry on 06.25.12 at 7:42 am

The paralysis of analysis and the refusal to lower house prices. I saw it first hand in 2009 in Naples Florida. Entire neighborhoods all holding “firm” at $475000/per house. Nobody wanted to drop their price. “If your house is $475K then so is mine” went the thinking. So, there they stood while real cash buyers (with brains) simply ignored them. By 2010-12, short sales, foreclosures, and maybe worst of all- “Estate Sales” with big tax obligations lead most of the descriptors in addition to huge discounted prices. If you are a seller- beware of “group think” and accept that “greater fools” are not of infinite supply.

#108 timbo on 06.25.12 at 8:02 am

http://www.cnbc.com/id/47943735

“To buy sufficient time to get to the end game of political and fiscal union, I would say we are probably talking about something like a 5-year LTRO of around 2 trillion euros,” said Bevan. “That’s the sort of scale of magnitude that is required to heal the European debt [cnbc explains] problem while the other issues are addressed. ”

2 Trillion? Now that is a recovery………

http://www.profitconfidential.com/chinese-economy/is-china-a-ponzi-scheme/?subid=OUTBRAIN

“As customers run out of cash, they start borrowing and leveraging up to higher levels, which is dangerous for the global economy. If the global economy were strong, clients would have enough cash to fund their purchases, but they can only now buy this equipment with a loan from the company.

It gets even crazier. Reports are surfacing that machines purchased on credit are then being used as collateral! The customers who bought the construction equipment are getting credit backed by the equipment, which they in turn are financing their own clients!”

I love sound foundations and this is not one of them….

#109 Oilers Fan on 06.25.12 at 8:47 am

Garth, you’ve stated numerous times that the new downtown condos in big cities like TO and Edm are being sold to the Greatest Fools. TO and Van is saturated with these overpriced liabilities, this I understand.
What I don’t understand, however, is why a brand new condo being built on prime land in downtown Edmonton is such a bad investment??
I mean, a 2 bed brand new condo for $300k downtown in a steadily growing Edmonton…why would this be the 1st to get hit in the inevitable crash?
Location location location right?
I would think the suburbs further away from downtown and older homes would be hit harder than a brand new downtown condo.

If you wouldn’t mind, could you please help me understand better the order in which segments of the market fall apart when the bubble does go pop?

Love the blog and thank you for all your insights!

#110 BankersArePeopleToo on 06.25.12 at 9:02 am

#94 Buy?Curious?

Definitely wear pants, no speedos on this site please.

#111 GTA Girl on 06.25.12 at 9:04 am

Big rider;

No doubt we do know the same people.

I flipped thru Saturdays Star Home section and picked off all the one named new release condos that will never be built.

Especially that one monstrosity with the glass sided swimming pool on the 30th floor. If we’re having problems with glass condos now, can you imagine the nightmare that will be if a leak springs?

#112 John on 06.25.12 at 9:20 am

Nostradamos La Mad Vlad wrote:

“One should realize by now to take advantage of the opportunities provided to live a reasonable retirement, primarily using ETFs in TFSAs and DRIPs in RRSPs.”
———–

Thanks a lot for your great links.

I think that the point of view above assumes a world “soft landing”. Is that reasonable to conclude, or is it wishful thinking?

Like everyone, I’d prefer a soft landing….but ignoring systemic dynamics actually increases the chances of a harder landing.

#113 BankersArePeopleToo on 06.25.12 at 9:22 am

Hi Garth,

Could you please tell us about Edmonton and surrounding areas like Sherwood Park?
Thanks

#114 stickler on 06.25.12 at 9:23 am

…but I have worked hard for 2 years and saved over $5,000, so of course I need a fully renovated house with $7,000 counter tops and a $10,000 appliance package in one of the best areas of the most expensive city in the country.

Makes you wonder if any of these types ever did the math to calculate what they will actually pay for their house over 30 years.

Never mind, I all ready know the answer. It doesn’t matter because they are going to be rich, their house will be worth $30 million in 2 years, and they will get a record deal and their own reality TV show following them while they golf and or spa.

#115 a prairie dawg on 06.25.12 at 9:27 am

@ #97 Rob

– — –

And you think that little F (as in foot soldier) doesn’t already take his marching orders from ‘Herr Harper’?

The only thing F does without permission is pick out bad looking ties, and buy black liquid ‘shoe polish’ a few times a year.

#116 truth hammer on 06.25.12 at 9:32 am

None of the ‘new rules’ imposed on Canadians have done a thing to stamp out the what’s at the root of the problem which has been speculation. The issue of foriegn speculation has been overlooked by the government media machine due to the politically incorrect nature of such announcements.

Now some wag writing for who knows who’s publiscist into the Vanc media harlot is drying the notion that anything should have been said in the first place…..as if admitting that HAM was a nessecary evil for the ‘market’ on the LOON COAST.

http://www.vancouversun.com/news/housing+market+teetering+Happy/6827464/story.html

I’m in Dallas Texas and happy to report no such idiocy exists here. The community is far more homogeneous than any in Canada. People haven’t been jammed into multicultural ghetto’s for political power plays and convieniance. Everyone has a common sense of purpose, totally refreshing to talk to Americans and not hear about ‘where are you from’?.

The Yankee hating Canadian media has stuffed so many stereotypes down Canadians throats to bolster it’s own narcissistic POV that we forget that the US is a truly mixed country that has chosen to underpin the dynamics of multiculturalism while not locking people into old country cultural and linguistic ghetto’s as has been the case in Canada.

HAM is sitting on it’s hands in Vandump because of perception that the ‘hot money’ speculative nature has run it’s course. This has nothing to do with the current ‘rules’ coming into play. The only thing F has done is screw average Canadians…….He could have stepped in long ago with rate adjustments and the standardization of the 25 year am and adherance to the Bank Act which has already been written so as not to allow zero equity lending.

The problem has always been a lack of political will, pandering and lack of foresight into the nature of a people who’s wealth creation opportunities have been suppressed by decades of socialism and outrageous taxation for bogus elitism.

Get rid of the dead wood ( unions, civil servants) at the top and make it easier for Canadians to get ahead and you will have an enviornment where people aren’t forced to all try and jam through a single door at the same time.

#117 refinow on 06.25.12 at 9:38 am

Most don’t have a clue of the effect of these changes will have.

These changes have been 5 years in the making, all started in 2008.

CMHC is clearly vacating the mortgage insurance business. Went from 95% to 90% Max LTV on Refinances, then to 85%, then to 80%..

Basically meaning they are no longer insuring new refinance mortgages.

This is just one of few steps remaining until CMHC is officially out of the mortgage insurance business.

Didn’t raise the Cap beyond the 600 Billion, think about it the writing is on the wall.

Now, with the reduction of amortizations from 30 to 25 it hack’s off $50,000 in buying power, do you honestly believe property values can continue to rise.

Don’t be fooled by what is about to happen, there will be an initial surge in purchases/refinances while these changes take affect, which the Realtors and the Government will use to make Canadian’s believe all is well in CDN real estate once again…

But this will be it..

as for #29 Useless mortgage borkers criminals in an ALL OUT PANIC…

Yes Canadian mortgage brokers are concerned but not for the reasons you portray.

We know how these changes affect our ability to qualify applications. I am not so worried about the new buyers, GDS at 39% is ridiculous, should be limited to 32% where it was always meant to be… It’s the existing homeowners, which makes up the vast majority of all outstanding mortgages who were allowed to buy with one set of rules, but once they own, are treated completely different with a whole new set of restrictions. It is almost like “Financial Racism”.

Did you ever wonder why someone who has never owned a house before can buy with only 5% down, but an existing client who has owned , cared for and maintained their obligations relating to the ownership of that home does not have the same access to funds, will not be limited to 80% maximum LTV..

Simple, keep people buying homes they cannot afford, and keep this false economy moving.

#118 Nuke on 06.25.12 at 10:03 am

Over 70% own homes, the rest comment on this blog. Real estate became an investment not a housing need. If there is no expected return, no need to waste money and debt on it. Investment dollars can go where they always should have gone, back into real investments that pay interest, dividends and represent actual businesses not speculation on granite counter tops. Best way to get the economy working with real growth not debt inflation of a non-investment asset. If you need a place to live, you can rent from the owner for about 1/3 as renting from the bank with none of the costs or mortgage. Full Stop.

It’s like Flaherty just put a big sign up on the 401 that says Highway Closed and expects only a slow down of traffic on the road. No road- no cars. No returns, no investments.

#119 Junius on 06.25.12 at 10:20 am

#91 Aaron – Melbourne,

Steve Keen remains one of the few economists who really understands the current global economic situation. His lectures are online at his website and worth watching.

#120 MoneyMyHoney on 06.25.12 at 10:26 am

“Soon buyers will need at least $250,000 in cash to close these deals, which means more $999,900 homes.” – Garth

Here is my addendum: The above $999,900 homes will create an additional downward pressure on the existing ‘below $999,900 homes’ which in turn will cause a chain reaction (or ripple effect – however you may want to define it). So, the price drops are going to be higher than $50,000 to $57,000.

Is it going to happen immediately? No, not so soon. Reason: There are a lot of fools in the pipeline itching to get into the market. When they see a minor drop they will get into the market thinking this is the right time to get in. These fools could potential hold the high prices for some more time, possibly creating a plateau in the graph before the eventual slide down.

The length of the potential plateau in the graph will depend on the no. of fools the pipeline carries.

#121 Nuke on 06.25.12 at 10:31 am

If you hadn’t heard. Canadian Securities Regulators are looking at full commission, trailer fee disclosure from the sales guy to the consumer. Hope it is clean cut and easy to monitor.

http://cnw.ca/jihhz

#122 Daisy Mae on 06.25.12 at 10:43 am

#35 Eddy: “Is anyone buying their BS? The message from Harper is clear – “We’re not responsible”

**********************

Flaherty and Carney have been doing Harpers’ bidding. He’s trying to distance himself now, hanging these two out to dry.

Of course, these three incompetents are responsible — totally.

#123 billy contore on 06.25.12 at 10:48 am

After years of dealing with real estate agents the times have changed. Here is what one of Remax’ top agents have told me. “honestly dont buy now if you dont have too. Why pay a dollar for something you will get for 50 cents.”

#124 ANONYMOUS on 06.25.12 at 10:50 am

So are you guys trying to say that T.O. house prices won’t be continuing to rise up 10% each and every year for the foreseeable future, like they have been doing for the past 15 years?

#125 Observor on 06.25.12 at 11:11 am

Bigrider at 105 – Predicts market drop

“I give it at least a 20% probability that S&P, TSX and MSCI take a 20% dive between now and then. That will be a 40% plus drop since highs reached in May 2011 for all three, and make for third stock market crash inside of a decade.”

Interesting. Big predictions based on absolutly no analysis. From a man who apparently does not know how many years are in a decade. (I think it is fair to say the early 2000’s crash was more of a 2000 and 2001 event, so that is over 10 years ago. Even id you count it as a 2002 crash, that is not inside of a decade.

Also big rider can you explain what you mean by net redemptions from equities? Investors can’t redeem shares, they can only sell to other investors. (Except in the case of share buybacks and those are at the discretion of corporations, not investors).

#126 YagginHT on 06.25.12 at 11:20 am

Ah, typical poor person bias. Assuming that what has just happened recently (real estate down turn in the U.S.) will happen immediately again. Is it no wonder they’re poor? Poor decisions lead to poor results.

#127 YagginHT on 06.25.12 at 11:23 am

All the ‘evidence’ presented in this post still can’t get past the reality that real estate is booming. Funny that.

#128 LB on 06.25.12 at 11:25 am

No thumbs up, thumbs down icons please.

The appeal of this site is that we can read,consider and form our OWN decisions about the the credibility of each comment, to agree, disagree or comment ourselves if desired.

No sheeple “group think” ratings are needed here to influence or distract from individual opinions and voices.

#129 Living in AB on 06.25.12 at 11:31 am

The effect of housing via TD How Much can I afford Calculator:

90k Income (avg income in Edmonton, where I’m from):

Old Rules: $5k down, 30 years @ 3.29% = 470k MOrtgage

New Rules: 5k down (for comparison purposes) 25year @ 5.24% (OFSI rule) = 344k MOrtgage

Did the tag team (F & OFSI) just force a correction?

#130 Silver on 06.25.12 at 11:32 am

#93 carl berger and # 19 rental monkey…

We bought Commercial /residential in 2005 and CMHC insurance was included in the mortgage finance costs.
we had 30% down….
… they removed it when I asked if we actually needed it… they did not tell me I didn’t till i asked…
and they said no.
So the banks ,etc. have been doing this for a long time… its nothing new.
… at 30% down do you really need insurance….
so the answer is yes…

Silver

#131 Hicksville Alberta on 06.25.12 at 11:33 am

For those worrying on the Calgary and Edmonton real estate markets i would be very very careful and stand aside for now.

Oil is now down to $78 and natural gas is still fundamentally in the tank and this is what truely drives the Alberta economy.

There is a glut of oilsands oil and there is some serious price discounting going on with some of the production and it doesn’t take much of a stretch to imagine a potential serious slow down in oilsands development and construction if even to try to catch up with the immediate glut.

Junior oil companies are running out of cash for conventional drilling and their sources of financing are drying up. Some bankruptcies are expected there soon.

The real huff and puff right now is being done by Alison in Wonderland and her City Minions in Calgary and Edmonton as well as in the lesser communities throughout the Province and either they will have to start borrowing serious money or raise serious taxes and fees to keep the huff and puff going or start to face the reality that their squandering spending needs to be curtailed.

We have the setup for a perfect storm and i’ve been through these before so watch out just in case as the “new” normal may end up turning into a nightmare.

#132 $$$BPOE#1 on 06.25.12 at 11:36 am

End of the day means nothing. Housing comes down 50 grand whopeeee. Meanwhile the person who paid $300k 5 years ago now only has $700k in equity instead of $750k. the new owner was going to blow out 50 grand in rent in 2 years. Onwards and upwards folks. this whole idea of a housing correction was a total bust . 40% correction LOL.
******************************************
•As the mortgage broker bible (Canadian Mortgage Trends) pointed out, dropping the amortization alone means a buyer with no debt and a $75,000 income will qualify for almost $50,000 less in financing. So he doesn’t buy, or prices go down $50,000. Either way, big outcome.

#133 Mel Eager on 06.25.12 at 11:45 am

I think Garth said it perfectly in this one line, “buyers should ensure the properties they choose will stay in demand. ”
This gives me comfort that we purchased in Oakville 8 years ago. Oakville will most certainly be immune to these changes, due to the fact it will clearly stay in demand. Oakville has it’s pricey areas certainly where the CHMC rules will affect people, but the majority of the Oakville community is not on Lakeshore among the mansions. The other communities south of the QEW have the lot size, and mature neighborhoods that people desire. Although, for myself I would never consider buying for the land to tear down and rebuild a Custom Home in today’s enviroment, Oakville does have that postive draw as well. There are rebuilds all over South Oakville. So people, if you absolutely have to buy, come check out Oakville, it might be one of the last bastions of stability.
Cheers! Mel.

#134 Debt Ratio on 06.25.12 at 12:11 pm

“The gross debt service ratio (GDS) is falling from 44% to 39%”

It seems this change is confusing a lot of people. Here is how the Department of Finance announced it:

Lenders must review a borrower’s debt service ratios before granting a mortgage loan. In 2008, the Government announced a 45 per cent TDS limit as part of the adjustments to the rules for government-backed insured mortgages. The measure announced today will limit the GDS ratio to 39 per cent and lower the maximum TDS ratio to 44 per cent. Setting a GDS limit and lowering the TDS limit will help prevent Canadian households from overextending themselves and reduce the number of financially vulnerable households.

#135 Moose Jaw Mike on 06.25.12 at 12:11 pm

It is a little late with bringing in new lending standards and bringing it back to 25 years amortization morgage. All but a few people have dive into the housing market borrowing as much as the could get. The damage has been done. F has created a total mess and he should have know what his actions would have created. Bye bye middle class

#136 SCIB on 06.25.12 at 12:17 pm

I Wonder how many politicians have liquidated their vacation and over-sized homes at the “right” time, with insider knowledge of the mortgage changes.
In the US they only recently passed an act disallowing insider trading for congressmen. It was perfectly legal up till then when a whistle blower analyzed how politicians were beating the market better than anyone else, even the professionally managed funds.

There would have been no insider notification beyond the usual circle of DoF officials. You know little about the system. — Garth

#137 Debt Ratio on 06.25.12 at 12:19 pm

The GDS limit is a new measure and the TDS ratio is reduced from 45% to 44%. In any case, this change should not have much of an impact on the market since, according to current CMHC requirements, the GDS should not exceed 32% and the TDS should not exceed 40%. However, the government has clearly tightened the regulations on debt service ratio.

Garth: I can’t post a link to the Department of Finance website, please insert it here if possible.

#138 LuckyRenter on 06.25.12 at 12:36 pm

#133 Mel Eager on 06.25.12 at 11:45 am

I am not sure about Oakville !! If you take a drive by lakeshore ,there are mushrooms of “for sale” signs. Nothing is moving.Same thing in Burlington, a lot of “for sale” signs. I don’t understand what is fueling your optimism , but Oakville and Burlington are not different.

#139 DonDWest on 06.25.12 at 12:37 pm

The higher the price; the greater impact the amortization changes have on the market. It scales rather beautifully. Let’s just say, if you actually managed to buy a decent house under 200K in Canada without dipping into the CMHC insurance, the following changes won’t affect you the least bit. You may even stand to benefit as the prices of higher end homes go down and your own home retains it’s value. There will still be winners in this real estate market despite the fact it will soon hit a deflationary spiral. . .

#140 jess on 06.25.12 at 1:13 pm

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Step-by-step instructions
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===================
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In June’s Taxcast: celebrity tax avoidance, Greece’s missing billions, what should have been on the G20 agenda and trade mispricing.
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#141 bubble head on 06.25.12 at 1:20 pm

#117 Reinflow

There will be no intial surge, changes take effect July 8th. You can’t lock into an amor rate only a interest rate. If you close after July 8th you will be affected.

#142 TimV on 06.25.12 at 1:20 pm

#133 Mel Eager:

I can’t speak to Oakville, but in Burlington, a surprising number of the Lakeshore homes are actually rented, and the prices are cheaper than you might guess (sub $1m for some). Those lakeshore homes are probably more analogous to Leaside, from the Leaside discussion a week ago. Just my thoughts, looking from the outside in…

#143 Devore on 06.25.12 at 1:28 pm

#33 Ryan Perich

put 20-21 % down….and the lender can make the mortgage last 40, 50 years no problem.

And do you have any evidence banks are giving out 40 year mortgages? How many and what value? Now that they can’t insure their low ratio loans, I don’t think they’re so eager to get themselves into these types of mortgages with long amortizations just so the borrower can lower his payment. In other words, if you need to do this to be able to afford it at all, I don’t think you’ll find a bank to stand behind you.

#144 Harlee on 06.25.12 at 1:36 pm

#38 Mark W.
That “Burnaby dump” is on the same block as the Sutton Realty office isn’t it ? Maybe that’s why it’s worth so much…:-)

#145 disciple on 06.25.12 at 1:54 pm

What is the connection between unrest in the Middle East and your vitamin supplements? Eric Margolis. Also, just so you know, Jerry Sandusky is played by Kevin Costner.

#146 From Mississauga With Love on 06.25.12 at 2:00 pm

i wouldn’t get too excited about those changes in pushing the price lower just yet until i see it. there were tightenings before and the price kept on pushing forward. too premature to celebrate. remember that summer is a weak season for RE.
the problem is that people don’t understand that people will “invent” money from somewhere to cover the cost of buying homes. Also, never underestimate, as Smoking Man says, the herd mentality.
people will hear the agents and mortgage brokers say price won’t be affected and they simply won’t budge. Never underestimate the stupidity of the common folk. They do as they told here in Canada. That’s what makes it a country so easy to govern.
if Agents tell them it’s OK, it will be OK. That’s people’s rationalization. Agents in the meantime will try to manipulate inventory and control prices to prevent them from dropping. This is an industry of collusion.
bottom line is I believe it when i see it happen. till then, SSDD.

#147 rembrandt on 06.25.12 at 2:21 pm

I wonder how all these virgins purchasing an in 2015 to be completed condo building on the shores of the Fraser River on South East Marine Drive feel today. Those Elmer Fudds after shaking hands with Bob Rennie then attending the proverbial Johnny on the spot purchased three condos each.One hundred eighteen of them purchasing 400 units. Is it doubtful that this building will not be built for the next 5 to 10 years? Will the 118 purchasers walk away from their deposits?

#148 Devore on 06.25.12 at 2:23 pm

#101 Keeping the Faith

The segment is actually directly at http://www.cbc.ca/metromorning/episodes/2012/06/25/cooling-the-market/

Good point at the end about protecting people with regulations. Most people are financially and economically illiterate. Not just uninformed, or ignorant. Illiterate. When mortgage brokers, [email protected], the realtor(tm)(r), tell them they can afford something, or that it’s a good time to buy, they listen. And the monthly payment is always, always, the last refuge of the salesman. That’s what they bring out when you can’t afford something, they find some way to convert the purchase into a monthly payment, and then find ways to lower it (while increasing their profits).

Not so long ago, when rates were higher and prices lower, affordability (ie, the monthly payment) was about the same as it is today, with million dollar “starter houses”. But affordability, which is the main, if not only, thing people look at when they ask themselves “can I afford this”, is very misleading. When prices were lower, a family could pay the mortgage off faster. Increasing incomes, an inheritance, a bonus. They could tighten the belt, take on extra part time work, and pay it off faster. It wasn’t unheard of to know people who paid off their mortgages in 10-12 years. This is not possible today. Throwing an extra $100-200 on the debt doesn’t even count as rounding error. It certainly doesn’t make as big a difference as it used to. It’s no surprise so many just make the minimum payment, choose the ‘skip-a-payment’ option, and even refinance higher, rolling their HELOCs and credit card debt into the mortgage.

Affordability is still decent in most areas, which must be incredibly assuring and tempting to first time buyers. However we will no longer have 40-50 year olds with paid off houses piling their top earning years’ incomes into retirement savings. Instead we’re going to have people retiring with mortgages, with only the vampiric house equity to their name. Already, a large portion of this generation of boomers expects to retire with debt. These are people who bought 20-30 years ago.

This is going to be a disaster long term.

#149 NoName on 06.25.12 at 2:25 pm

self-centered, destructive, spoiled-rotten, entitled, lazy bratz kidz (banks) going after baby boomers petty cash…

http://goo.gl/5bGAf

oh yeah, this is only beginning…

#150 House Horny Housewife on 06.25.12 at 2:27 pm

Garth,

If this couple just lost their shirt, why are they in such a hurry to jump into the real estate market again ?!

This is nuts. Why not rent and recover from the recent hit ? Save and build up some equity and savings. In the meantime, they should rent and see which neighbourhood is most attractive.

Location is key to buying real estate so you have to buy something in a valuable location. There is no way of knowing this ahead of time. You have to move into an area and live there for a while. Become a resident and then see which areas are attractive to you and which areas are risky (ones that can change in the future .. especially new developments, those are the worst).

In general, older developed neighbourhoods with nice old trees and services close by such as nice restaurants, grocery stores, farmers’ markets, beautiful parks etc.. are good gambles. If your budget isn’t huge then even a smaller lot in a nicer neighbourhood is a much better idea than a big honkin’ lot in a crappy or unsure one. In the real estate market it is better to serve in heaven than rule in hell. If you want to maintain value that is .. and you should ALWAYS want to do that, even if you plan on staying forever. Shit happens, priorities change .. you know how it is. Never say never as the saying goes.

If you are not sure if you will be staying longer than 5 years, then you should definitely rent. If you are secure in the knowledge that you will be staying put (ie. you have secure jobs lined up etc..) then rent for a while until you get your bearings.

Kelly, don’t be in such a rush ! Take your time and learn from your last experience. Fool me once, shame on you .. fool me twice, shame on ME ! Choose wisely.

HHHW

#151 Kevin on 06.25.12 at 2:28 pm

“Where can you get a 40 yr mortgage?” – Bottoms_up (#73)

Any Canadian bank. The 25-year amortization limit only applies to mortgages where CMHC insurance is required (i.e., less than 20% down payment). If you have more than 20% to put down, then you don’t need CMHC and the bank is free to offer any amortization they want.

#152 Junius on 06.25.12 at 2:35 pm

Britain’s banks downgraded to bastards

http://www.newsbiscuit.com/2012/06/23/britains-banks-downgraded-to-bastards/

#153 Kevin on 06.25.12 at 2:37 pm

“if the banks (at least TD) believe prices are going to fall 10-15%, would they not hesitate giving out an unsecured mortgage” – bubble head

What the heck is an “unsecured mortgage?” Isn’t that an oxymoron?

#154 Spiltbongwater on 06.25.12 at 2:43 pm

You know little about the system. — Garth

I was walking in a farmers market with my so call girlfriend when she handed me a cell phone. She told me it was my dad. I said man, this isn’t my dad, this is a cell phone, I threw it on the ground. The moral of this story is you can’t trust the system.

#155 mike on 06.25.12 at 2:53 pm

#102 bubble head
take an example of a property that cost 1.9 Million and you have four hundred thousands down payment. TD Bank could lend you 1.5 Million if you have proven income of $360,000. So if you have 3 names on the title, each person had to make $120,000. You need way less income if you’re getting rent from the property.

#156 Observor on 06.25.12 at 3:40 pm

$300k plus Mortgages immune from paying early?

DEVORE at 148 said:

It wasn’t unheard of to know people who paid off their mortgages in 10-12 years. This is not possible today. Throwing an extra $100-200 on the debt doesn’t even count as rounding error.

++++++++++++++++++++++++++

Devore, I totally agree, absolutely right. These mega mortgages are almost impossible to pay down early. People have signed on voluntarily for debt-for-life.

Even an extra $10,000 paid on one of these monsters hardly makes a dent. (And who has an extra $10,000 when they are already paying 30% of gross income on the mortgage?)

Imagine how beholden they are to their bosses. What a life! Sucks to be them.

#157 John on 06.25.12 at 3:44 pm

Inglorious Investor wrote:

“Let the market price money. Let the market price houses. How can you know where you stand if the ground beneath your feet is constantly moving?

This kind of blatant central economic planning and intervention never works well. Haven’t we learned this lesson by now?”
———

The other option is to bury the problem, get liquid and play the game against your neighbour, family and society. Choices right?

There’s an elephant in the livingroom. The end of the pretense it’s not there is a start. Maybe demanding a shift to a healthy economy is not correct. A lot of things have to run their course first. Those damn consequences we all hate so much.

#158 Not 1st on 06.25.12 at 3:45 pm

Today I am watching the idiocy and insanity in the Eurozone. Its beyond farcical.

1. First of all these countries have been attending G7 and G20 meetings for decades like some sort of economic power houses. Nothing could be further from the truth. France, Germany, Italy and U.K should be tossed from that club plus U.S. and Japan too. Anyone with a GDP to debt ratio greater than 75%. That leaves Canada as the only member of the G7.

2. All of the countries are now broke and insolvent and are just passing printed cash back in forth. its the same money going from crisis to crisis. And then they have the gall to ask Canada to help with the bail out. Where were they in the 90s when we got our debt problem under control? Harper made the right move telling them where to go. They didn’t like hearing it. Tough luck. We are going to be trading with asia anyway, let the eurozone self destruct.

3. Lastly, watching these soccer fans act like their respective countries are so great. Somebody should tell them they live in a broke, corrupt, insolvent state which is dragging down the world economy. They should be hanging their heads in shame instead of cheering for their country.

#159 The American on 06.25.12 at 3:48 pm

At #116: Truth Hammer, I couldn’t have said it better myself. Well put!

#160 Observor on 06.25.12 at 4:00 pm

ARE YOU POORER THAN AVERAGE?

No one who has amassed less than average or median wealth for their age wants to know about it.

Nevertheless Statistics Canada has the numbers

Only the 1977 and 1984 cohorts could be followed until they were in their early 50s. Both groups built nearly identical median household wealth—just under $150,000 per adult.

By 2005, the young adults in 1977 had reached the age of 56 to 62. As they neared their retirement years, they had amassed a median net worth of $213,000 per adult. At this stage of the life cycle, rising private pension assets and declining mortgage liabilities generally contributed to increases in the net worth of the typical household.

http://www.statcan.gc.ca/daily-quotidien/120622/dq120622c-eng.htm

So who’s behind and proud of it? Let us know.

#161 $$$BPOE#1 on 06.25.12 at 4:08 pm

One more things. You Canadians on this site looking for a correction in BPOE (not happening) so that you can go from renter to Owner. Well folks it just got a whole lot harder for you. Pros descending from ALL over the World licking their chops going to buy every last thing in sight. Getting better everyday in BPOE. Love it

#162 jess on 06.25.12 at 4:22 pm

nostradamus – the collective

There Is an Alternative to Capitalism: Spanish City Mondragon Shows the Way
Monday, 25 June 2012 09:46 By Richard D Wolff, The Guardian UK | Op-Ed

Mondragon Corporation (MC),

#163 cramar on 06.25.12 at 4:46 pm

Seems there is a housing bubble in Norway! Debt to income ratio of 200% is really scary. Is it possible for Canada to stretch the band that far without it breaking?

http://blogs.marketwatch.com/thetell/2012/06/25/warning-of-a-house-price-bubble…in-norway/

#164 Tony on 06.25.12 at 4:51 pm

Tell Kelly and Frank to watch housing prices in both Mississauga and Brampton. These will be the last two cities in all of Canada to tank in price. Once these two cities start to dive in price then it’s all over end of story. The crash can’t be averted. They’ll be hundreds of thousands or more going back home as the banks foreclose in these two cities.

#165 Junius on 06.25.12 at 5:37 pm

#161 BPOE,

You said, “Pros descending from ALL over the World licking their chops going to buy every last thing in sight.”

Really. Listings in Vancouver area are headed towards 20,000 at a new record pace.

Are these pros all blind because they appear to missing the “For Sale” signs that are everywhere in the Lower Mainland.

#166 brainsail on 06.25.12 at 5:46 pm

163 cramar

More on Norway.

http://www.cnbc.com/id/47950697

#167 jess on 06.25.12 at 5:53 pm

muni debt bombs

….In other places, bond guarantees have been time bombs, causing problems too severe to be solved in a workout. Stockton may be headed for Chapter 9 bankruptcy this week after pledging taxpayer money to backstop authorities’ debts for a hockey arena and other showcase buildings. Scranton, a faded former coal center, touched off a full-blown debt crisis this month, losing access to the capital markets when its City Council refused to honor a taxpayer guarantee for a parking authority’s bonds.

Residents of Pennsylvania’s capital, Harrisburg, recently learned from a forensic audit that their city’s fiscal woes could be traced to a guarantee issued in 1998, for the bonds of a trash incinerator project. Every few years after that, the authority running the project issued more bonds, and the city guaranteed those as well….
http://www.nytimes.com/2012/06/26/business/surprised-taxpayers-are-paying-for-bonds-they-did-not-vote-on.html?_r=1&hp

http://www.rollingstone.com/politics/blogs/taibblog/notes-on-wall-streets-bid-rigging-scandal-20120622

Oakland, one of the cities listed as a victim in the Carollo trial (the defendants rigged an auction for a Port of Oakland bond deal)

Read more: http://www.rollingstone.com/politics/blogs/taibblog/notes-on-wall-streets-bid-rigging-scandal-20120622#ixzz1yqPJgCwn

————–

Michigan probing Encana-Chesapeake land bidding practices – The …www.theglobeandmail.com/…encana-chesapeake…/article4368056/You +1’d this publicly. Undo
1 hour ago – State looking at report executives discussed joint approach to bidding in land auctions

#168 Gmaz on 06.25.12 at 5:54 pm

#164 Tony
okay, i promised myself i wouldn’t comment on this blog again, but your comment just peaked my interest way too much.

Why Mississauga and Brampton?????
Everyone on this blog keeps telling me it has already tanked and nothing but crickets at open houses.
I am very interested in your reasoning Tony.

#169 Kaganovich on 06.25.12 at 6:11 pm

#158
Not First wrote:
“Harper made the right move telling them where to go. They didn’t like hearing it. Tough luck. We are going to be trading with asia anyway, let the eurozone self destruct.”

Yes, lets just forget about the Eurozone and trade with Asia, because Asia doesn’t depend on the EZ to purchase their goods, right? Are there any other decoupling wet dreams floating around this blog today?

#170 patiently waiting on 06.25.12 at 6:23 pm

# 156 Observer
$300k plus Mortgages immune from paying early?

DEVORE at 148 said:

It wasn’t unheard of to know people who paid off their mortgages in 10-12 years. This is not possible today. Throwing an extra $100-200 on the debt doesn’t even count as rounding error.

++++++++++++++++++++++++++

Devore, I totally agree, absolutely right. These mega mortgages are almost impossible to pay down early. People have signed on voluntarily for debt-for-life.

Even an extra $10,000 paid on one of these monsters hardly makes a dent. (And who has an extra $10,000 when they are already paying 30% of gross income on the mortgage?)

Imagine how beholden they are to their bosses. What a life! Sucks to be them.
+++++++++++++++++++++++++++++++++++

Many of the families that I know that have taken on large mortgages (I’m talking $700,000 to $1,000,000) have the attitude that it doesn’t matter how big the debt is because: 1) housing values always go up and 2) inheritance will take care of it anyways . . .
sheesh . . .

#171 Nostradamus Le Mad Vlad on 06.25.12 at 6:29 pm


#83 FTP – First Time Poster — “I’m sure the RE landscape will be much different in 18 mos time.” — Apt description. Maybe this?

#91 Aaron – Melbourne — “Why the crisis is not over”. — Far from it. As long as the west keeps creating false wars (thanks, Soros and Obomba), sheeple (who are dumb enough to read the m$m) will be focused on ‘who did what’ in other parts of the world, rather than pay attention and stick to their own business and lives.

This will keep going endlessly until someone puts their foot down and says enough.

#112 John — “Is that reasonable to conclude, or is it wishful thinking?” — Hi John. Your guess is as good as mine, but a look at the western housing market gives one a much better perspective.

Countries such as China, Ireland, France, Spain and Italy have all experienced crash landings, whereas central London, prices have increased.

Probability is that when hard and soft landings happen, they will be entirely different from one area to another. No one can put a blanket over the whole thing and say, This what will happen as it probably won’t.

Cheers!

#162 jess — “nostradamus – the collective” — Hi Jess. A lot of mayors of various cities and towns are in bad shape through no fault of their own, and this is why a plethora of different and new ideas are happening. Someone has to pick up the garbage, shovel the snow, do city and road maintenance, etc.

#172 neo on 06.25.12 at 6:39 pm

#138LuckyRenter

He definitely needs to drive through the Lakeshore Rd. from Bronte going east. I must have counted 7 houses in a row for sale.

#173 T.O. Bubble Boy on 06.25.12 at 6:39 pm

@ #163 cramar
Seems there is a housing bubble in Norway! Debt to income ratio of 200% is really scary. Is it possible for Canada to stretch the band that far without it breaking?

http://blogs.marketwatch.com/thetell/2012/06/25/warning-of-a-house-price-bubble…in-norway/

Definitely a bubble (from the sounds of things), but keep in mind that Norway is doing pretty well as a country (+13.5% of GDP surplus vs. most countries that have big deficits), and their sovereign wealth fund has their health care and other areas funded to infinity.

So, unlike Canada (or the US, or Australia, etc.), popping the Norwegian housing bubble won’t kill the country’s finances.

#174 Mr Buyer on 06.25.12 at 6:59 pm

#161 $$$BPOE#1 on 06.25.12 at 4:08 pm
descending
………………………………………………….
Just thought I would highlight the only word coming close to describing the situation

#175 J.I.M. on 06.25.12 at 7:00 pm

@151 Kevin
My understanding is that most banks are insuring all mortgages. Yes , putting 20%+ down does free the borrower from the requirement to have the mortgage insured by CMHC. Banks, however, are ensuring the prime mortgages with CMHC and paying the premiums on behalf of the mortgagee.

#176 lord lucan on 06.25.12 at 7:43 pm

From Bloomberg:

Is Canada too smug about its economic future ??

http://www.businessweek.com/articles/2012-06-25/is-canada-too-smug-about-its-economic-future

#177 Q on 06.25.12 at 7:53 pm

Re: #8 $B$P$O$E,

with regards to Robson Street being the 5th Avenue or Rodeo Drive of Vancouver, I’ve always found that quite amusing. I lived on Robson until 2 years ago and was usually embarrased when business associates came to Vancouver and asked where the famous Robson Street was…while we were sitting on a pubstraunt deck in the heart of retail hell. For the most part, it’s nothing more than flafel/taco joints and discount shoe or luggage stores, with a blosk of the Gap and FCUK types. The most over rated retail street on the planet. Furthermore, it’s a good indicator of the remaining disposable income in Funcouver, where baristats, boiler rooms and “growops” are the only growth industries. So a dollar stoer may actually be a bad idea, as I seriously doubt that the average granola sucking, Birkenstock wearing, pot smoking, self deluded, Funcouverite has that much disposable income left.

#178 Nostradamus Le Mad Vlad on 06.25.12 at 7:53 pm


#171 lord lucan — It’s a facade. Look at the debt / deficits the CPC has run up while being involved in all these wars. Who pays the bills? Taxpayers.
*
#162 jess — Remember what I said about broke cities / towns, etc.? Plus this; BRICs Currency Devaluation? Globalists A one-world currency goes with a one-world govt., a one world toilet (?) and one-world anything you like; ING What’s in the Orange Guy’s shorts; Unprecedented Recovery? Not for workers; Wall St. The current crime syndicate of choice; Disappearing Labels; Very Short Work Week; Spain’s new loan; 10:33 clip Russia has plenty of oil and gas; Ousted Caterpillar; Loyalty Cards Another method of govt. snooping; Oboohoo Money’s drying up, so it’s up to Soros now.
*
Iran — WW3? Syria – Turkey At least Turkey had the decency to tell the truth; Egypt One ” The same generals that enforced Mubarak’s will over his people still maintain absolute control over the country, and in reality this is what was intended all along.”, and Egypt Two; Obomba’s War Actually, it is Soros’ war on democracy. Obomba is just his puppet; Muslims “Actually, the reason some Muslims hate America is that for the last 60 years, every time there is a huge explosion in the middle east and everywhere Muslims lie in bloody shreds on the ground, the shrapnel is stamped “Made in the USA.” wrh.com and 46:09 clip “More ‘Gee, look how sloppy security was’ pre-sale of a coming Olympic false flag to be blamed on Muslims?” wrh.com; 4:10 clip US puts four minesweepers in SofH; The Drug War CIA and drug cartels keep it going and flowing, ‘coz it’s profitable; The m$m is a conspiracy theory; Not Immune Macs to viruses, malware etc.

#179 mac on 06.25.12 at 8:10 pm

Garth,

Under OFSI will the books of the CMHC become public? I am concerned about not only the close to $600 billion in mortgages they’ve insured but also how much in mortgage backed securities have they bought from the banks? Is OFSI’s mandate to open up the CMHC to public scrutiny?

Thanks.

#180 truth hammer on 06.25.12 at 8:19 pm

#159 American. I’ll do the politically incorrect thing and point out that three decades of Liberal policy has been an exercise in blatant political manipulation and outright racism in ‘multiculturalism’ as it is officially mandated in Canada. Is it not the politics , policies and antiquity of an immigrants place of origin that has driven them to flee that country in the first place? Why does the liberal mindset want to isolate them within those same nightmarish conditions once they arrive in Canada?

So when these people come to Canada they find that they are steered into immigrant ghetto’s where the government has chosen ‘leadership councils’ for the dissemination of services. Every immigrant has a single place that they must go to recieve services and they are held in thrall by those in charge of these service portals…..not always in the best interests of the immigrant or Canada.

We have multicultural ghetto’s where the very pratices , religions and cultural bias are enforced against people who had to escape these practices in the first place to come to Canada.

Have we not seen the underground practice of the wildly misogenist Sharia Law in the Muslim ghetto’s in Toronto and Montreal? Are young Muslims not being recruited in Canadian mosques to fight ‘the Great Satan’ after training bases in Africa and elsewhere?

This is just one example…we all know many more….and if it was politically correct many of the people who are trying to escape the horros of violence would be able to speak out as well…..but not in Canada…….we need our ‘immigrants’ to be ‘immigrants’ so that we may pander to them as voting blocs.

Multiculturalism is flawed at root and broken in Canada. Three decades of liberal social experimentation have proven wrongheaded.

#181 The American on 06.25.12 at 8:52 pm

At #180: Truth Hammer, I have to admit I am learning a lot from your perspective. I’d be curious to understand any other perspectives out there. I must say here that I do not in any way understand the meaning of multiculturalism (we celebrate many cultures in the U.S. as well as is evidenced in the many holidays and celebrations in honor of those cultures).

However, it appears the primary difference is in the U.S., one is expected to assimilate to the culture to which he/she has chosen to become a part. Otherwise, why move to the U.S. in the first place? There is no “American” culture, per se, other than the fact it is a complete mesh and melting pot of several cultures into one, including cuisine, customs, expectations, etc. It is ever evolving and quite fluid. What was accepted as a cultural or societal norm in the U.S. even a decade ago may not be the case today.

Regardless, I become disenchanted when I hear comments where one believes the U.S. is nothing more than guns, right wingers, and idiocy. In fact, from an IQ perspective, GDP per capita, innovation, infrastructure, and acceptance, I honestly cannot say I know of another place anywhere that melds all of the above better than where I live today. It may not be the *best* in any singular category, but all around, I cannot see a better place to be. It is a lot like a BMW if one must use an analogy. A Bimmer isn’t the fastest, best looking, most solid, or highest quality vehicle in the world, but overall it is sure hard to beat, regardless of its flaws, as it sure does perform well in all categories.

American is the East are very different from Americans in the West, whom are very different from Americans in the South, whom are very different from Americans in the Southwest, whom are very different from Americans in the Southeast. Despite how different all the politics, cultures, viewpoints, etc. may be from one geographical area to the other, overall most can come together when necessary and be unified in overall approach. The media outside the U.S. certainly loves and lives to try to prove this wrong. What do they know? They aren’t living here day in, day out. What I am saying is it is quite alright, and even preferred that each person be his/her own INDIVIDUAL, but it is expected he or she at least attempt to respect the overall peace and accepted societal norms around.

#182 Dan on 06.25.12 at 8:57 pm

Tony on 06.25.12 at 4:51 pm Tell Kelly and Frank to watch housing prices in both Mississauga and Brampton. These will be the last two cities in all of Canada to tank in price. Once these two cities start to dive in price then it’s all over end of story. The crash can’t be averted. They’ll be hundreds of thousands or more going back home as the banks foreclose in these two cities.
——————————————————————–

Brampton is in worse shape then Mississauga but Mississauga is turning from bad to worse as sales have stalled and foreclosures are up in both with Brampton having more foreclosures but Mississauga isn’t far behide. Alot of sub-prime/liar loans given to many people who could never prove their income and way to much over building. We’ve all heard the stories of people selling everything and leaving Canada overnight as the bankers find an empty house. This has happened mostly in brampton but now you are hearing that this is happening in Mississauga now.

#183 Canadian Watchdog on 06.25.12 at 9:10 pm

#167 jess
So Meredith Whitney was off by a year or two…

#179 mac
CMHC’s debt is the government’s debt. That’s all you need to know.

#176 lord lucan
Canada is broke like the rest.

#184 zeeman on 06.25.12 at 9:10 pm

at GMAZ:

You are back. i checked the sold listings for missisauga and only one house sold for over asking price. I dont know if that house sold for market value or not as i am not familiar with that area in mississauga.
however, the rest of the sold listings, were either at asking price or less

And your other area, Vaughan, not one listing over asking price.

what happened to your thesis that all houses are selling for more than asking price.

#185 Salacious Crumb on 06.25.12 at 9:13 pm

I would also like to hear your take on the prognosis of Edmonton, AB. We’re still hearing big talk promising the gravy train will roll on.

I’m not buying it, but what sayeth you, O Bearded One?

#186 Useless mortgage borkers criminals in an ALL OUT PANIC! on 06.25.12 at 9:31 pm

http://www.theglobeandmail.com/report-on-business/moodys-warns-on-mortgage-debt/article4369806/

A little to late to stop Canada’s housing crash.

#187 Gunboat Denier on 06.25.12 at 9:33 pm

Cramar/Brainsail/TOBB Re: Norway

predicted by some a few years back

http://www.nytimes.com/2009/05/14/business/global/14frugal.html

#188 Can it be? on 06.25.12 at 9:50 pm

@zeeman… I’ll bet that the only house that sold over asking in Mississauga was the lakefront in port credit… Crickets everywhere else. Houses taken off the market in Toronto hot areas… Mississauga… Everywhere. The downward spiral is beginning. Interesting times ahead. Two of my immediate neighbors are about tO start bridge financing… They bought before they sold. Crazy.

#189 John on 06.25.12 at 9:51 pm

Not First wrote:

“3. Lastly, watching these soccer fans act like their respective countries are so great. Somebody should tell them they live in a broke, corrupt, insolvent state which is dragging down the world economy. They should be hanging their heads in shame instead of cheering for their country.”
——
Not sure where you’re going with this. You sound like you’re thinking of “countries” in the global ponzi scheme. Where are you getting this idea? Who’s Mark Carney? Mario “three card” Monte? Mario Draghi? Do you understand their common interests? If so, why would you be talking about “countries”?

Soccer is just a game on one hand, and on the other hand, your perspective doesn’t reflect how the world works in 2012. It’s one ponzi scheme. You can’t use the old paradigm to describe it.

#190 Boombust on 06.25.12 at 9:52 pm

#181 The American on 06.25.12 at 8:52 pm

“I’d be curious to understand any other perspectives out there.”

Okay. Here goes. Buggar off.

#191 Boombust on 06.25.12 at 9:56 pm

“…with regards to Robson Street being the 5th Avenue or Rodeo Drive of Vancouver”

Ever been on Hollywood, Sunset or Santa Monica Boulevards? Ugh. As ugly as every other place in the Big Smoke.

I’ll take Robson anytime.

#192 Boombust on 06.25.12 at 10:01 pm

That stupid Vancouver Global News at 6 is at it again.

Their whole take on the new mortgage/financing rules is that people will now NEVER be able to afford a home.

Er, gee, if THAT’S the case, duh, I guess prices will just have to adjust downward.

Such “reportage”. Not.

#193 a prairie dawg on 06.25.12 at 10:05 pm

The idea of like/dislike buttons (or thumbs) is just so effin facebook.

When someone runs a free blog, and intentionally keeps it ad free, and also puts the amount of time into that the host here does, you shouldn’t ask for lame bells and whistles. Just be glad he tolerates you. lol

#194 The American on 06.25.12 at 10:09 pm

At #190: Boombust, I’m not sure why you’re so hostile. You definitely confirm the ignorance and small mindedness of what is often perceived by Americans of Canadians. I don’t believe this perception is true, but you certainly do not add value, nor do you make for an interesting dialogue. I guess I would refer to you as a simpleton.

#195 zeeman on 06.25.12 at 10:32 pm

at can it be

i agree with your assessment. checking the sold listings on TOsold, i noticed a lot less sold listings for each of the area. normally, after the weekend sales,there are a lot of sold listings on monday but not this time. it could be a sign of things to come but again i will say that it is too early to come to any conclusion on the markets.

for some reason, gmaz continues to feel everything is selling for over asking price…..

#196 cramar on 06.25.12 at 11:18 pm

#173 T.O. Bubble Boy on 06.25.12 at 6:39 pm

That is interesting! Also Norway as FREE university education, universal health care, and the highest living standard in Europe. You don’t have the newly employed with staggering university debt. You don’t have people loosing all due to massive medical bills. You don’t have American-style poverty.

#197 Fort Mac Flatlander on 06.26.12 at 4:13 am

#193 a prairie dawg

To each his own. It was merely a suggestion. As a person that doesn’t use Faceplant, I guess the idea isn’t old to me yet.

#198 Boombust on 06.26.12 at 8:37 am

“I guess I would refer to you as a simpleton.”

“Takes one to know one”…as WE say in Canada.