The new normal

As we stagger into the final weekend before the 30-year mortgage bites the dust there’s little doubt remaining of what comes next. Hey, remember what fun we all had a year ago ridiculing places like Richmond, BC? Savvy foreign buyers. World-class bungalows. Planes full of horny Asians stacked up over YVR. Realtor-experts telling Global TV this was the new normal. Marketer Cam Good saying it was just silly of local residents to think they could ever afford to live there again. HAM everywhere.

Recall moments like this?

“Just another example of the feeding frenzy here in Richmond – a good friend of mine was willing to accept $950,000 about three months ago for his 45 year old house on a 60 x 120 lot. That deal fell through, luckily for him, as he just sold for 1.4 million. That’s a $450,000 increase in three months. The 21 yr old kid never left his car that was parked in the driveway as the deal was negotiated with help from the realtor. He was on the phone the whole time with his parents in China.”

Yeah, right. I wonder how the old snorts feel about Richmond today. Last month all of 76 houses changed hands, a stunning 52% drop from a year ago. The average price, meanwhile, has faded by 7%, a number which could quadruple by the end of the year. The realtor.ca site showing active MLS listings has so many red dots that the area looks like a herpes convention. Sellers who need to sell are desperate. Buyers ambivalent to buy are waiting for the inevitable. They both know where this is going.

It’s a pattern other parts of the country need to get used to. Sales drop slowly, then uncontrollably. Prices dip, then cascade. And as it happens the myths are exploded. You see, there never was a torrent of Asian money lifting the entire real estate market. Instead, the very threat of it was used by a voracious real estate community to instill panic buying and bidding wars. It worked, of course. Ditto for the ‘buy now or buy never’ mentality which washed over this saintly blog in months past. It just reminded us there actually are people who think anything changes, when nothing does. Demand swamps supply, rising prices. Then supply swamps demand, collapsing them.

What’s happening in Richmond and Vancouver will be repeated in varying degrees in Calgary, Skatch, the Peg, the GTA and Montreal. Big sales drops will result in price cuts large enough to shrink the national average by 15%. That could mean 25% in Edmonton, 30% in Winnipeg and Saskatoon, and 10% in 416. The magnitude and timing will depend on how big an impact F’s changes have on the virgins, how soon banks adopt the tighter OSFI regs, how flummoxed the MSM gets (CBC’s National had a cow last night) and how big grows the tide of new listings.

After all, we’re dealing with humans here. When markets rise, listings fall, and buyers get horny. When markets fall, sellers mushroom, and buyers flee. Once again we’re treated to the reality that people want things that are in demand, and shun the same things when they’re unpopular and cheap. This can only be explained by a fundamental misunderstanding of risk. As Richmond and the kid in the car demonstrate, the greatest risk possible is buying anything when everybody’s crazy to get it.

Now, some musical evidence of what real estate can do to a healthy male. If you think a vasectomy is serious, or have ever dreamt you were a stallion that ended up a gelding, just think what having a VanCity babe who expects you to buy a house can do. Snip, snip.

Finally, here’s Susan. She has a problem. It should put yours in perspective.

I read your blog often. Check it pretty much daily. You confirm beliefs I’ve held for most of my life. So for the most part, I’ve stayed out of trouble. I’m 29, female. Never ran up any credit card debt that I didn’t pay off that same month. And since 2004, I’ve been a solid renter, watching as almost every one of my friends have bought a condo or town home. I thought, if nothing else I’m pretty care free.

Now, I know my husband is a really intelligent person. Downright wonderful in every way–perhaps too wonderful of course.

See, he’s really REALLY dedicated to his family. A year before I met him, he was convinced to buy a house with his mother and her then-boyfriend. Its hard getting details out of my husband and I can barely talk to my mother in law but I know for sure that she’s the primary, her husband is out of the picture, my husband is co-signer, he’s also a partial owner and there’s roughly $350,000 left of the mortgage to pay. We have moved out and renters have moved in to share the house with my husband’s mother.

I worry because of what’s going to happen in real estate. I also worry because this woman talks about ‘just walking away’ from the house. My husband says she wouldn’t do that–only she has–years ago. And she JUST went into bankruptcy about a year ago.

I would just like to know from someone I trust (you of course) what danger may lie ahead for us. I talk to my husband about it, but I don’t know if he’s right when he says there’s nothing for us to worry about. How much can this potentially affect us down the road?

Did you really marry this guy, Sue? If you did, his liability might easily become yours. So if mom splits, the bank will turn to your husband to service the mortgage.  Failure to do so will end up in legal action, fat legal bills and a judgment. So when Mr. Wonderful withholds this information from you he’s demonstrating where his true loyalties lie. Maybe he and hubby-eating mama deserve each other.

Find out now. We’re waiting.

246 comments ↓

#1 Keeping the Faith on 07.06.12 at 9:12 pm

Straight up I trade Turner for Harper.

No questions, no conditions, no first round draft picks.

Turner for Harper.

Turner blossoms into the first stringer he was meant to me.

Harper, sadly withers having to write on this blog everyday.

I’m shorting Harper although I’m doubling down that he puts 5 more belt notches on his leather before he’s ousted by the other Great Bearded One … Mulcair!

#2 Keeping the Faith on 07.06.12 at 9:18 pm

ok on a more serious note…. Turner, I’m sad to say that you’ve “Jumped the Shark”

for those not in the circle, let me reference wikipedia:

Jumping the shark is an idiom created by Jon Hein that is used to describe the moment in the evolution of a television show when it begins a decline in quality that is beyond recovery. The phrase is also used to refer to a particular scene, episode or aspect of a show in which the writers use some type of “gimmick” in a desperate attempt to keep viewers’ interest.

Really, a young girl in mud Turner? We’re 3 days away from the biggest beginning of the end in Canadian history, minus the Vancouver Canucks CHOKE of 2011, and you have to put that pic up?

Sorry buddy but lets keep it clean.

This story is written just like Socrates, Ghandi and “Calgary’s OK” there is nothing else to be said because they are all killing themselves, starving themselves or self flogging themselves outside the gates of the G_d forsaken Stampede.

The lords help you “Calgary’s OK” because there could be nothing further from the Truth. Calgary is on the edge of a cliff and the Keeping the Faith knows what he’s talking about.

#3 Toronto_CA on 07.06.12 at 9:19 pm

10% in the 416? I’m skeptical of this, I think it will be much worse. I know, standard response from Garth that this is an average and for the first part, then a slow melt for the next few years and who knows how low it will go in individual hoods as some will retain value and others will plummet. But I think if you throw condos into the mix city-wide, 10% will be way too low for the burst. Nevermind Willowdale bungalows. That’s ground zero of bubbleland. Or bubbletealeand, since it’s all Cantonese money in there.

#4 uh oh on 07.06.12 at 9:19 pm

Sue. Run, don’t walk. Unless he’s really really wonderful.

Wow.

#5 Publius Enigma on 07.06.12 at 9:20 pm

So then, what else is he keeping from you Sue?

#6 Lost cash on 07.06.12 at 9:21 pm

Garth do you really beleive Toronto prices will drop that much in leslieville? I’ve been looking there for years and it’s only got more expensive.

#7 T.O. Bubble Boy on 07.06.12 at 9:22 pm

Mr. Folk Singer has a “good job and good pay”? I’m assuming his primary occupation isn’t “musician”… if he is paid well in Vancouver, is he implying he’s secretly a realtor?

Funny how his target for cheaper housing is Saskatoon — also bubblicious these days.

#8 the captain - hi snides on 07.06.12 at 9:22 pm

two hundred seventy second!

#9 Bulls eye on 07.06.12 at 9:24 pm

Hey Garth,

Are you at the Calgary Stampede?

#10 Mark L on 07.06.12 at 9:26 pm

I can’t believe I’m first

#11 dd on 07.06.12 at 9:26 pm

I see you reusing the title from Bill Gross

He borrowed it. — Garth

#12 T.O. Bubble Boy on 07.06.12 at 9:27 pm

Hey single guys (specifically, the gold digging types) — here’s a fast-track to buying some real estate in Canada — marry a Chinese millionaire:
http://www.calgaryherald.com/life/wanted+Chinese+millionaires/6896041/story.html

“A global manhunt has been launched in China on behalf of 36 female millionaires who have made fortunes from their country’s economic boom but have failed to find love.”

caution: fortunes may dissapear without warning!

#13 Teresa on 07.06.12 at 9:29 pm

Sue

There is never anything good coming from a man who hides behind his mother’s skirt. He isn’t being forthcoming because he knows in his heart that he is in deep, and he will drag you down. He thinks that he won’t worry you until it actually happens, he doesn’t understand there is a difference between planning and worrying. I hate to say it, but you are hooped. Best of luck.

#14 TurnerNation on 07.06.12 at 9:30 pm

Oil’s well that ends well.

#15 Uh Oh Canada on 07.06.12 at 9:30 pm

Ouch! Keep away from parent’s/in- law’s financial interference…I learned the hard way.

#16 50% correction predictor on 07.06.12 at 9:31 pm

Only 10% in 416?

50% for Condos and 30% for the rest – My prediction.

#17 FP on 07.06.12 at 9:32 pm

Pretty “normal” picture from you tonight, Garth! :) Really enjoy your work – just thought I’d drop you a line and tell you so.

#18 Ty on 07.06.12 at 9:39 pm

Winnipeg down 30%? Not a chance.

We are just catching up. Rental vacancy rate of less than 1.5%. Nowhere else to go. Immigrants coming at every turn.

#19 Blasé on 07.06.12 at 9:40 pm

10% drop in 416? no way in hell it will be that tiny. imagine every single condo dropping 50% in the next 3 years. Then factor in lending requirements not seen in a generation, plus higher rates in early 2013. then add in boomers desperate to fund retirements and buyers not eager to lose cut themselves on falling knives. there was a crash before with much less gas-baggery. this will be the crash that is heard round the world, and 416 will be hit at least 30%.

#20 JayBe on 07.06.12 at 9:44 pm

Sweet. :D My daily dose of blog spooned schadenfreude is being swallowed…

#21 So it begins.... on 07.06.12 at 9:52 pm

Garth 10 % drop (GTA)- why so much optimism?
10% drop is only 1 year loss of gains. ( It will be 2 years loss of gains)
Or is that the initial drop ?

Sue you married for better or worse, richer or poorer
Suck it buttercup, you didn’t have a problem when real estate was hot now your worried. You mother in law is part of the problem. Couldn’t afford a home but bought anyway. Deal with it, it’s only money, just tell yourself at least I dont have cancer.

#22 Pat on 07.06.12 at 9:55 pm

#238 Inglorious Investor yesterday:

“The claim that there would be no science without government (and thus dentists would be using pliers) is ridiculous.”

Tell us about it – examples of basic science done outside universities or governmental labs and without government investment?

#23 Mark W on 07.06.12 at 9:56 pm

http://www.realtor.ca/propertyDetails.aspx?propertyId=12119245&PidKey=-1520312364

HAM & Champagne in Ditchmond, BC.

Most of it is actually below sea level and if it were not for the dykes and those water pumps going 24/7 well good olde Ditchmond (aka: Richmond, BC) would actually be below water.

Dig a hole anywhere in this town and you hit water.

#24 Frank on 07.06.12 at 10:00 pm

Some people are just silly. Maybe just maybe there might be a 20% decline in some places, but 416 there might be a 10% decline at most.

#25 Stinky the Fish on 07.06.12 at 10:03 pm

Game Over. All Ur Base Are Belong to Us.
http://www.youtube.com/watch?v=qItugh-fFgg

#26 Cats on 07.06.12 at 10:04 pm

You have no chance to survive. Make your time. Ha ha ha

#27 Vikay on 07.06.12 at 10:06 pm

Can’t believe I’m first when people seem to make a game out of it.

With sex, money and in-laws being the top 3 reasons why people divorce, and Sue having a good head on her shoulders, I’m a little surprised that Item #2 wasn’t thoroughly checked out before sliding that ring on.

I’m waiting to hear the answer too!

#28 IM in C on 07.06.12 at 10:06 pm

Garth you just switched pictures! Why?

Why not? — Garth

#29 JRance on 07.06.12 at 10:10 pm

Garth,

I’ve noticed a couple of times you’ve been seemingly referring to Saskatoon as “Skatch”. “Skatch” is a term of endearment for Saskatchewan. The term of endearment for Saskatoon is “Stoon”. A pejorative term for Regina is “The Vag”. Incidentally there is no term of endearment for Regina :P

Two more reasons not to move there. — Garth

#30 Thinker on 07.06.12 at 10:17 pm

The reality is prices have not followed the dip in sales in any magnitude. You can point out all the bad stories but don’t forget vancouver still has large line ups at condos and are sold out quickly. This rule change is going to feed that more. Prices are very high and a 5-15% drop is not going to big enough to shake anyone out of a market that has 20% annual gains for some time now

Think. — Garth

#31 TnT on 07.06.12 at 10:28 pm

Great post again…
With a downturn on real estate is there any reason to change the standard 60 / 40 blend of a balanced portfolio? Any reason to put less into any REIT, perferred share ETF or CDN equity ETF’s or is it always just buy more if any 1 class dips? I have a 30 year horizon for retirement.

Thanks a bunch Garth

If you have a balanced, diversified portfolio stop trying to be a market timer. Let the asset allocation do the work. — Garth

#32 Realtors in an all out PANIC on 07.06.12 at 10:28 pm

GTA crashed over 10% in 2008 in under three months garth. The house of cards in Toronto is epic as TENS of thousands of people borrowed from their HELOC to buy an “investment” condo or property. Toronto condo market is ground zero for a crash to make 2008 look like a good time. Remember people trying to bail on their downpayment and walk away from their condos?

#33 Hoof - Hearted on 07.06.12 at 10:35 pm

Was out cruising around here in HAM-Ville today..aka Richmond BC.

Very strange anomaly…..actually saw a few SOLD signs….mostly lower end units…

(2) explanations…..

(i) Sold by DESPERATE Sellers who took a major haircut

(ii) Buyer -Suckers who used the last gasp 30 year mortgage before it expired

#34 greed on 07.06.12 at 10:36 pm

#31 Thinker
I beg to differ. Humans hate loss in any market. More than they love gain. Sit at a table of normal people at a poker table and watch the $300 they made at table be taken down to $220 by the new dealer. They generally walk.

#35 I'm stupid on 07.06.12 at 10:36 pm

Ty on 07.06.12 at 9:39 pm

Winnipeg down 30%? Not a chance.

We are just catching up. Rental vacancy rate of less than 1.5%. Nowhere else to go. Immigrants coming at every turn.

Your joking right? You can watch your dog run away for a week in Winnipeg.

#36 greed on 07.06.12 at 10:37 pm

http://ca.finance.yahoo.com/news/6-reasons-why-never-retire-164549581.html

Also retirement sucks, just ask any of the people that enjoy what they do…..Garth Turner at 63.

#37 Observer on 07.06.12 at 10:42 pm

Now a collector’s item…

http://www.youtube.com/watch?v=Uuff4F3_P4M

#38 Inglorious Investor on 07.06.12 at 10:49 pm

#23 Pat on 07.06.12 at 9:55 pm

“Tell us about it – examples of basic science done outside universities or governmental labs and without government investment?”

I never said basic science. I said science. And more importantly, applied science, which–at the risk of repeating myself–is what matters to living standards, which was John’s original point.

Remember this?… “It’s also true that a great deal of the R&D was paid for by government.” –Yours Truly

Yes, governments put up the money to split the atom and to find the Higgs boson. Yes, today government funds allow the basic research that sometimes has no immediate market value and thus can be difficult to fund with private investment. It’s all good.

To get back to my original point, the funds a government supplies comes from tax payers, without which there is no government–at least no responsible government. And no government jobs. On behalf of the people of Canada who contribute more to government coffers than they take: you’re welcome.

#39 Mark W on 07.06.12 at 10:52 pm

http://www.realtor.ca/propertyDetails.aspx?propertyId=12023602&PidKey=1619536029

HAM & Champagne in Richmond, BC.

http://www.richmond.ca/safety/prepare/city/hazards/flood.htm#The%20Facts

Quote from City of Richmond Website:

“Although not officially designated as such, Richmond is located on a floodplain. A ‘floodplain’ is: “land adjacent to a watercourse that is susceptible to flooding”, such as from periods of high tide. In addition, isolated instances of flooding can occur in any community as a result of unanticipated weather events”.

#40 greed on 07.06.12 at 10:53 pm

#33 Realtors in a Panic

“Epic”
Really I would equate owning a property that is losing money to owning a used car that has had to go in the shop and cost me money. It is not “epic”. I will take a loss and it wont be “epic”.
It would be nice to see some balance in the comments from nobody is going to lose money to everyone is going to lose and it is going to be “epic”.

How about a few of you pick up a sociology 101 book or just a basic newspaper and understand the cross section of society that has a vested hand in the RE market from small to tall. Good grief Charlie Brown!

#41 Smoking Man on 07.06.12 at 11:02 pm

Today walk the muts through the hood. Longbranch. Sold sold sold sold. Gartho. Understand why you cahonas are inflamed but

You don’t know the herd in the gta or over confidant from all the adds in MSM suporting your cause. But that has a shelf live the machine will throw it into reverse shortly

Take it from an un schooled drunk who calls shit long before anyone see it

Maintain you cedibilty and back off from sfh in gta they have a long way up befor the turn

#42 MC on 07.06.12 at 11:07 pm

Tick, Tock, Gold prices are living on borrowed time.

U.S Dollar to begin its climb up. Slow but steady

S&P to outperform this fall – to many surprise

Bearded Oracle goes on a national press tour, in turn teaching economics to panicked housewives and man boys

I wonder what will happen to all those fancy coloured diamonds the radio pumps…lmao….lets ask the loaded chinese cougars

world is a funny place

#43 billfromscarbourgh on 07.06.12 at 11:08 pm

Oh please do you people really think that the minor changes are actually gonna lower prices ? Interest raTes are. The lowest they ever been and theyarent going any where bottom line affordabilty is still there and its still a healthy job market these minor rUles are only taking out the People who would have lost there homes. That’s all. . God bless amerIca

#44 Inglorious Investor on 07.06.12 at 11:17 pm

We are hearing more chatter about Canada as international safe haven, at least in the Canadian press.

Apparently, rich Europeans, who are afraid that their names are being secretly encoded in needlework by the seething wives of scruffy, French inn keepers for future reference, are seeking refuge in Canada.

Anyone have stats on how many foreigners and how much foreign money is coming in?

I’m sure if this actually pans out, the RE industry will latch on to this in a big way and try to convince the public this will save Canadian RE. Like HAM was supposed to. Of course, if it doesn’t work they can always put the blame on Chrétien for something he did circa 1998.

#45 blase on 07.06.12 at 11:20 pm

50% Correction Predictor, glad that we agree ‘)

#46 Saskatoon-Living on 07.06.12 at 11:22 pm

Was having some “sodas”with a couple of pals today and housing came up as a subject. They both own houses, which they bought in the last 4 years, and both have seen a 15% increase on their house since they bought. Bet them both, a bottle of grange, prices would be lower in the next 3 years. The two of them jumped all over me and said it would be higher and doubled the bet. I have lived in S’toon for almost 15yrs and i don’t see why people are paying the prices they do for homes here. Can’t wait for my bottles of Grange!! May even share with you Garth…………..

#47 greed on 07.06.12 at 11:38 pm

#36 Im stupid

Why yes you are. Did you miss the lesson that RE has nothing to do with land. It has to do with emotion and product supply at this time. NOW.
Winnipeg still has some acres left ….that is in the market.

#48 Roial1 on 07.06.12 at 11:42 pm

Well, all you realtards and wannabes. Whent fishin’ today as I said I would. Had a GREAT day.

All you city people are crazy.

If you want to die in the city, so be it. It’s your life.

Me, I’m goin’ fishin’.

#49 Einzatgruppen kanada on 07.06.12 at 11:46 pm

Sue: not kill joy presbyterian savers then – him and mom? Must be bloody spend-all catholic.

Sue no trust in a relationship = end of relationship.

What’s wrong with being a carefree & independent woman again? Take a trip with a wise girlfriend. He’s bait-on-a-hook and you’ve bitten.

#50 Kasia on 07.06.12 at 11:50 pm

http://www.torontolife.com/daily/informer/to-market-to-market/2012/07/06/june-real-estate-sales-down/

Love when these came up in every day’s news…
Just wish more media would do the same.

#51 Canadian Watchdog on 07.06.12 at 11:52 pm

What most analysts miss when evaluating rent prices.

Looking at RealNet’s apartment size data juxtaposed with GTA rent prices, one can see that rent prices have remained relatively flat while apartment sizes have declined:

New Apartment Size By Unit

Studio/Bachlor -3.9%
1Bed -2.4%
1Bed+Den -4.2%
2Bed -4.2%
2Bed+Den -5.2%
3+Bed -16.1%

Evidently, 3+ bedroom apartments have shrunk to a great extent compared to other units. Of course, one good reason is because it makes space for developers to build more smaller units, as shown here , and it keeps affordability at the optimal rate of $1500.

While apartment sizes have shrunk along with on-going price appreciation over the past several years, the actual price per sq.ft. buyers have paid has skyrocketed. Therefore in terms of price appreciation based on value, apartments have been a poor investment.

As for renters: one must look at prices renters pay per sq.ft. measured in real terms, as I’ve estimated here. By looking at nominal prices (GTA average rent price per Sq.Ft.), the average rent price per square foot has increased to $1.80 from $1.58, a 14% increase since 2005. However when measured in real terms (Real rent price per Sq.Ft.), the average price paid per sq.ft. only increased to $1.83 from $1.81, a 1.1% increase since 2005. Essentially the renter has sacrificed size in exchange for maintaining rent at an affordable level. In the renters case, they’ve been paying the same rent on a value adjusted basis.

Somehow, at some point of time, people started to value the numbers instead of the tangible asset. There are many reasons why this could have happened, but the most undeniable one is the acceptance of a lower-standard of living. As for who those individuals may have been is another debate, but surely when Canada is importing two-thirds of its population from emerging economies, it suggests one possible answer.

#52 Blue Monster Lover of Meats and Vegetables on 07.06.12 at 11:52 pm

Here’s another classic Headstones diddy that suits the times!

And all I have to say about Susan’s situation is, OMG! I actually said that while reading the problem. It’s defiantly UNSOUND!

http://www.youtube.com/watch?v=A02AzC7-hYM&feature=autoplay&list=AL94UKMTqg-9C79waIW3-X-8fTwKqi_NAB&playnext=22

#53 Timbo on 07.06.12 at 11:59 pm

http://www.efinancialnews.com/story/2012-07-02/liborgate-changes-the-rules-of-the-game

“But the Libor scandal may well have delivered the final coup de grâce to the free market arguments used to justify many financial industry practices. The behaviour of the Barclays traders (and we know they weren’t the only ones) could not demonstrate more clearly that the markets are only free in theory and are in practice often rigged. ”

Absolute power corrupts Absolutely. Paging ‘Royal Bank of Canada’ , FBI on line 1 and the RCMP is waiting
in reception.

#54 Blue Monster Lover of Meats and Vegetables on 07.07.12 at 12:03 am

#1 Keeping the Faith on 07.06.12 at 9:12 pm

Straight up I trade Turner for Harper.

No questions, no conditions, no first round draft picks.

Turner for Harper.

Turner blossoms into the first stringer he was meant to me.

Harper, sadly withers having to write on this blog everyday.

I’m shorting Harper although I’m doubling down that he puts 5 more belt notches on his leather before he’s ousted by the other Great Bearded One … Mulcair!
——
I’ll vote for Garth for president. For the first president of Canada after the great depression part deux, F that, no more french, the great depression part TWO! And the Canadian civil war, the new American war, the third world war, the final middle easter war and the Canadian independence war!

The we can get Garth for president and a new Canadian constitution! You got my vote buddy!

It’ll be the next vote I ever cast because I will never vote again until after everything above transpires and of course Garth and I survive.

#55 Hoof - Hearted on 07.07.12 at 12:06 am

Geez…don’t some of your get it…?

I posted “Inside Job” documentary yesterday.

It exposed Academics as whores….They are not much different than realtors….hired guns. Much of the research is useless and full of false hope.

aka ” We think we might possibly have discovered maybe “X” ____ ” sort of kinda . Cut us a cheque

Its like accounting….it only exists because of being a Rothschilds auxilliary b*tch..it is aiding and abetting the enemy..thus accounting is sheer treason.

#56 TimV on 07.07.12 at 12:08 am

10% in the 416 has to be excluding high-rise condominiums.

#57 TNT on 07.07.12 at 12:16 am

I’m on the road somewhere and over hear two RE Rock Star Agents, the buyers and sellers trying to plan…orchestrate..conspire how to make a sale. Hmmm, i said to myself also in the sellers market at the time, these guys both have 1 objective, my cash and unless they can make a sale no champies tonight. I was also privy to how they charge more commission then others and adjust it at whim. Regulations anyone? It reminds me of the Libor scam all. How about we phase out RE Agents and have a Home Assessment Dept formed. It would work on salaries not commission and have protocols in place, perhaps 2 random teams of one person each view the same listings at seperate times, for two appraisals to make sure they are fair. These people could also be qualified to do home inspections, be consistently trained. The H.A.D program could be partially funded through the immigration program whose current ante for China is 800k. Men have been put on the moon and men recently found the Higgs Boson i’m sure someone can set this up…perhaps Garth could spearhead it. They will write folk songs about him. “There once was a guy named Garth who pulled the seller out of the hearth…. RE Agents have far too much pull, i have seen a RE Agent, the only game in town influnce the whole market. It didnt matter to him if the houses went up or down really, just push em through. It’s a scam people, you work your whole life for a house and you put it in someguys hands X 2 for a few weeks or months and THEY walk away OR SPLIT with 10 or 20 or 30 or 40 or 50 or 60 or 70 or 80 or 90 or 100 or…..THOUSAND DOLLARS. And what is it with RE agents recommending home inspectors, more inside trading. Wake Up Scam.

#58 Blue Monster Lover of Meats and Vegetables on 07.07.12 at 12:23 am

#23 Pat on 07.06.12 at 9:55 pm

#238 Inglorious Investor yesterday:

“The claim that there would be no science without government (and thus dentists would be using pliers) is ridiculous.”

Tell us about it – examples of basic science done outside universities or governmental labs and without government investment?
——-
Pat, you’re such a raging socialist. I remember you from last year and you were the same back then. Please provide some evidence of all the benefits bestowed upon society from all the public sector science you claim is responsible for our technological progress, not that jobs is dead.

And Toronto CA, did you catch my question at the end of yesterday’s post? About default and inflation/deflation. I have an answer, just wondering what your’s is. Could be fun!

#59 northerner on 07.07.12 at 12:26 am

@ #18 TY Why do people think that low vacancy rates improve peoples ability to pay higher rents, or mortgages for that matter? Oh and there’s ALWAYS somewhere else to go.

#60 Blue Monster Lover of Meats and Vegetables on 07.07.12 at 12:30 am

Here’s where and why innovation happens.

After six Nobel Prizes, the invention of the transistor, laser and countless contributions to computer science and technology, it is the end of the road for Bell Labs’ fundamental physics research lab.

Alcatel-Lucent, the parent company of Bell Labs, is pulling out of basic science, material physics and semiconductor research and will instead be focusing on more immediately marketable areas such as networking, high-speed electronics, wireless, nanotechnology and software.

The idea is to align the research work in the Lab closer to areas that the parent company is focusing on, says Peter Benedict, spokesperson for Bell Labs and Alcatel-Lucent Ventures.

“In the new innovation model, research needs to keep addressing the need of the mother company,” he says.

That view is shortsighted and may drastically curtail the Labs’ ability to come up with truly innovative discoveries, respond critics.

“Fundamental physics is absolutely crucial to computing,” says Mike Lubell, director of public affairs for the American Physical Society. “Say in the case of integrated circuits, there were many, many small steps that occurred along the way resulting from decades worth of work in matters of physics.”

http://www.wired.com/gadgetlab/2008/08/bell-labs-kills/

#61 Blue Monster Lover of Meats and Vegetables on 07.07.12 at 12:33 am

Bell Labs was one of the last bastions of basic research within the corporate world, which over the past several decades has largely focused its R&D efforts on applied research — areas of study with more immediate prospects of paying off.

Without internally funded basic research, fundamental research has instead come to rely on academic and government-funded laboratories to do kind of long-term projects without immediate and obvious payback that Bell Labs used to historically do, says Lubell.

#62 Jim on 07.07.12 at 12:50 am

Sadly, the guy with the guitar is better than half the semi-pros and amateurs I used to see at the local vancouver venues. Open mic night up on main street used to be painful.

#63 carp on 07.07.12 at 12:51 am

I forced a sale of my now-wife and her parents co-owned property. It was a condition for us to live together. There was no way I would jump into half-bake verbal investment with a mother and boyfriend taking advantage of their kids.

#64 Nostradamus Le Mad Vlad on 07.07.12 at 12:51 am


“Recall moments like this? The realtor.ca site showing active MLS listings has so many red dots that the area looks like a herpes convention. They both know where this is going. World-class bungalows. If you think a vasectomy is serious, buy a house . . .”

Speaking of which, where are Mikey the Realtor and BPOE? I suggested they buy a condo and shack up, but nary a word from them!

As for Sue, follow #4 uh oh’s advice.
*
Tent City An update; Budget Crunching and bad habits; Best Buy Contracting? Plus Outsourced Best Buy call centre; 75% The real world’s middle-class tax rate, which is why there are hardly any middle classes left; Italy Choking on pasta; Conversion, or Born Again Walmart is good for some things; Cdn. Friday links and more Cdn. links; Bank plays fare finally; Parking Tickets Becoming more expensive as time marches on; Fraud Probe of fat-cats, and Banxter Prisons.

Even a classy hooker couldn’t earn this type of money; Mass. Man pays off mtge. in pennies; Silly Billies It’s not Libor, it’s central banks, but Central Banks stimulating the global economy? Rigging the price of money; Basically . . with a chart but Can’t afford it; 5:04 clip Gold divorcing Euro by year’s end; Growing Part of the world, incl. confusing chart; 6:35 clip Recession proof jobs; Finland Great idea; Plunging New Orders Global recess- depression? Weak Jobs It doesn’t matter who gets elected, the situation is not going to improve; Cos. useovtertime and temps., but no permanent hires.
*
Panda-monium Bear-devil stunt; UK washed out while NAmerica bakes; Underwater Explosions Life in a dead sea? 3D Map of the universe; Divorce The business is doing quite well, esp. among elders; Golfing in Detroit Not recommended; El Nino or La Nina Who’s on first? Space – Time Portals exist, confirm NASA; The Pedophocracy a.k.a. The Vatican.

#65 Aussie Roy on 07.07.12 at 1:29 am

Aussie Update

A Minsky Singularity

Below is Steve Keen’s recent interview on Capital Account with Lauren Lyster that talks about the Debt Black Hole that economies around the world have unknowingly been sucked into. Steve discusses the fundamentals of his unique analysis on using rising debt levels to finance economic growth. A fantastic renewed perspective on the current financial crisis!

http://www.debtdeflation.com/blogs/2012/07/07/a-minsky-singularity/

You can’t see a bubble until it bursts – lol.

Only if you are delusional enough to think it’s different where you are and you are not willing to look at the logic.

#66 Investx on 07.07.12 at 1:34 am

Only 10% drop in Toronto? No reversion to the mean? It’s different in Toronto?

#67 Kurt on 07.07.12 at 1:35 am

Susan:

Three options –

1 – the house goes entirely in the MIL’s name

2 – the house goes entirely in your husband’s name

3 – you leave your husband

Pick one. See your lawyer on Monday morning. Do this now before this thing blows up in your face.

I’ve seen enough of people to recommend #3, though not without reservation because I don’t know the details of your circumstances.

#68 a prairie dawg on 07.07.12 at 1:52 am

Watch the divorce rate spike in the next ten years.

#69 Freedom First on 07.07.12 at 2:43 am

Garth…..your comment on #32 is a simple statement, and yet, a priceless jewel. Love it! No one knows what is going to happen, but people who follow your timeless financial advice/principles……would not end up screwed.

And Susan. I feel for you. Learning where you truly rank in importance by a significant other, can be extremely painful. Perhaps, now is the time your SO has a vasectomy. Maybe you could even do it for him?

#70 Puzni on 07.07.12 at 3:10 am

Is this the peak point for BC:

http://www.vancouversun.com/business/real-estate/issues+highest+number+building+permits+since+2007/6897279/story.html

#71 Tony on 07.07.12 at 3:46 am

Re: #45 billfromscarbourgh on 07.06.12 at 11:08 pm

Look in the newspapers under jobs hiring. No one is hiring unemployment will go though the roof in Canada.

#72 Tony on 07.07.12 at 3:52 am

Re: #44 MC on 07.06.12 at 11:07 pm

Earnings season is next week starting with Alcoa. Expect stocks to get hammered to the downside as earnings fall short of the mark for the next several years.

#73 Horowitz on 07.07.12 at 4:52 am

Garth,

I agree with everything you’ve posted over the last few years except one. Yes, this real estate bubble is generally a made in canada problem. However, Chinese money, mainly from the mainland, has had a material impact on neighbourhoods in Vancouver. I’ve door knocked for political parties throughout Kerrisdale and Marpole–there are literally blocks of empty houses that are almost certainly owned by mainland chinese residents or houses occupied by non voting Chinese. As the marginal buyers in the west side and Richmond, they have made a material impact on prices. Will this last if china goes into a tailspin or prices broadly fall? Probably not. But I think you have underestimated how significant HAM (although its not that hot if hubbie is buying a house for the foresseable future for mom and the kids to go to west side schools) is in certain neighbourhoods. I heard a story today of a mainlander putting down $9 million for a house near 41st and Arbutus… Madness… But it is moving the market.

#74 Buy? Curious? on 07.07.12 at 5:12 am

Garth, boohoohoo. Like you’ve said a million times before, it’s only a loss if you sell. The only people I hear that are selling are old people, divorcing couples and speculators. I don’t have hard facts on that but based on what the realtors have told me during the open houses in Oshawa. It’s when people start losing their jobs that you’ll see a real panic. However, when banks start foreclosing on homes, they’ll just keep them off the market to create demand.

Keep up the doom and gloom stories coming though. I enjoy hearing about families being torn apart.

#75 Aussie Roy on 07.07.12 at 5:44 am

Aussie Headlines

Remember the “shortage”, like all shortages during bubbled demand, it’s gone, we now have a glut.

It’s conventional wisdom. Australia is suffering from a serious shortage of housing, which is why it is expensive – it’s buttressed by unsatisfied demand. Politicians, economists and industry groups subscribe to this view and, armed with calculations from the federal government’s National Housing Supply Council, they argue a shortage of a quarter of a million homes is driving up prices and killing the dream of home ownership.

But Australian Bureau of Statistics census figures released last month turned this argument on its head. Researchers at Morgan Stanley used the new numbers to show there were just over 1 million fewer households than the NHSC’s 2011 calculations using projections from the previous census five years ago.

By updating some other figures, such as the total number of houses, and adjusting for some people missing or selectively filling out the census, an undersupply of 228,000 homes had suddenly morphed into an oversupply of 341,000 homes.

http://afr.com/p/national/riddle_of_place_we_call_home_3hG6nF4SQH1QYyv4DTRk5M

Families on Sydney’s outer edge have experienced a surge in income in the past five years but a big proportion are still under financial pressure because of mortgage repayments.

http://www.smh.com.au/nsw/a-city-split-in-two-worlds-of-housing-pain-20120706-21meq.html

#76 Deb on 07.07.12 at 6:13 am

The critical factor to watch for in the coming weeks will be the behaviour of the potential first-time home buyers. Taken together, the shorter amortization rule and the OSFI changes mean that the trip to the bank for pre-approval will result in most virgins being told that as of Monday, they can afford less of a home than they could this weekend. For a household income of $75,000 and a 5% down payment, this will result in being able to afford roughly $50,000 less of a home. Some will be informed that they may want to consider taking more time to save for a greater down payment for a future purchase and many will be told that it is time to lower their expectations considerably on the types of properties that they can afford at this point in time. This fact alone will have a huge effect on sales, listings and prices, sooner rather than later.

#77 bubble head on 07.07.12 at 7:03 am

# 31 Thinker

Ever wonder why people would lineup to buy condos when there is plenty of resale condos that they can buy.
Because to buy a condo in a sales office all you need is about a $5000 cheque and a signature. No closing fees, no maintenance fees, no mortgage for another for another 3 three years. Some of these buyers have no intention of living there, all they have done is add more supply.
West of the Rogers Center, South of Front and east of Bathurst there are over 230 condos for sale (with two more condos coming online in the next year), yet Tridal is planning to build a 75 storey condo 1 Km east of that area. Why??

#78 noodles 79 on 07.07.12 at 7:19 am

Ive been watching CP 24’s Hot properties this morning, and I feel like puking, They have been talking about the changes in mortgage amortization and Al Sinclair is still insisting its a great time to buy,his logic…before ten years ago all mortgages were amortized over 25years,and people were still buying,he doesnt think the changes will effect the market.Now, for someone whos made a bundle over the last ten years directly due to the long amortization and low down payments to claim these changes will have no affect on the market seems very misleading, and he has lost all credabilty in my eyes,I hope the public remembers some of the BS this guys been feeding people
On a pevious show, he stated that theres a short supply of houses because people are finding it to expensive to sell due to realestate commisions and costs associated with selling.Too expensive to sell?Whats the point of buying something if its going to cost to much to sell.Sounds like a politician talking out of both sides of his mouth.There should be a law against that!

#79 so it begins... on 07.07.12 at 8:09 am

# 73 Tony

I agree, Corporations will have a hard time beating last years earning and thus begin to layoff to reduce cost.

Keep a look out for construction layoffs – always the first sign of a housing bust. That sector will be the one to drive up the unemployment rate.
Soon they will not a have another hole in the ground waiting for them to pour concrete.

#80 ANONYMOUS on 07.07.12 at 8:29 am

Toronto is a weird place; prices explode 20%, then they slowly sink 10% over a few years, then they explode 25% again, then slowly stay flat, then explode upwards again. Since around 1995 nothing ever seems to drop in price in Toronto for very long. I just wonder if this is a ‘permanent’ thing about Toronto?

#81 Bottoms_Up on 07.07.12 at 9:30 am

#184 Toronto_CA on 07.06.12 at 2:52 pm
———————————————
I agree with you that corporate tax rates should be higher and the GST should never have been touched.

I just want you to get off the backs of hard-working Canadians, working for Canadians.

You can slag me and my average salary, my great colleagues and their average salaries….or perhaps you should focus your efforts on the 10 layers of upper management above us that push papers around and really are likely a significant waste for the tax payer.

#82 jess on 07.07.12 at 9:34 am

55 Timbo –
http://www.bbalibor.com/bbalibor-explained/the-basics

Interesting article and name this writer has since Chanakya (c. 350–275 BCE)[2] was an Indian teacher, philosopher and royal advisor from centeries ago.
http://bss.sfsu.edu/mbar/ECON605/Arthashastra.pdf

Who put the lie in Libor?
By Chan Akya
http://www.atimes.com/atimes/Global_Economy/NG07Dj02.html

#83 penpal on 07.07.12 at 9:40 am

@ # 43 Smoking Douche

“Maintain your credibility and back off sfh in gta…”

HAHAHAHAHAHAHAHA!!!!!!!!!!!!

You, Smoking Dude, giving advice on credibility?????

HAHAHAHAHAHAHAHAHA!!!!!!!!!!!!!!

You are truly the dumbest I’ve ever seen post anywhere, anytime.

Toronto falls …. and much faster and steeper than anyone thinks it will happen.

#84 Herb on 07.07.12 at 9:53 am

Blue Monster @ #62/63,

so the free market pulls out of fundamental research and leaves that to big, bad government and taxpayers. Is there anything wrong with this picture in your blue eyes?

#85 penpal on 07.07.12 at 9:54 am

@ # 31 (not a) Thinker

You don’t know f-all about how markets work, do you?

You think that every market unique. Yes they are, but they also share the “fatal flaw” commonalities that ensure the death of all bubbles. It’s in their DNA if you will.

Do you not understand inherent in the life cycle dynamics of all bubbles is that they ALL eventually burst, always have and always will? They deceive the bubble market participants in many ways, but the end result is ALWAYS the same – a bust!

I guess not

As Garth says………think.

In your case, it may be too much to ask of you.

#86 Toronto_CA on 07.07.12 at 9:54 am

“And Toronto CA, did you catch my question at the end of yesterday’s post? About default and inflation/deflation. I have an answer, just wondering what your’s is. Could be fun!”

Hey Blue Monster,

Mass defaults on bank loans should cause credit to seize up and lending standards to tighten which should then lead to price deflation unless it’s opened up again – like by the government insuring the bad debts or printing money (less money supply chasing similar demand of goods). Without access to credit, businesses go under and lay people off, which causes a deflation spiral.

That’s my macro economics courses coming back.

One day closer to July 9th!

#87 penpal on 07.07.12 at 10:02 am

@ # 43 Smoking D

Btw…

If you are so prescient and have such great investment acumen, why weren’t you pushing “Longbranch” years ago before its big run-up in prices?

Instead now, after massive appreciation, you counsel others to buy at a high price.

Total loser investment advice – ya , right buy after everything has doubled and tripled?

Maybe you are “talking your book” and you are actually looking to sell. Nothing I’d put past a scum bag like yourself.

Should change your moniker to Smoking Dope Man, but I like Smoking Douche better – describes you more concisely, don’t you think?

eh buddy?
how’s that Ford Ranger working out for you?

Wassa matter, Welfare throw you off the gravy train?

#88 frank on 07.07.12 at 10:11 am

I have a question for Garth,
We are a family with two young boys , 9 and 3 years old . We live in a small house in a great area that we bought in 1999. The house is in the south richvale area of richmond hill. We have paid off the mortgage and are wondering if we would be better off to sell the house and rent and try to buy something in the same area in a year or so, or just renovate our existing home?

#89 Toronto_CA on 07.07.12 at 10:20 am

“#83 Bottoms_Up on 07.07.12 at 9:30 am”

See we have middle ground here. There’s obviously a tax problem (as we agre, GST and corporate rates too low, personal tax rates too high). But as you also point out, there’s miles of bureau-crazy that needs to be cut. http://www2.macleans.ca/2011/02/07/harper-fattens-federal-bureaucracy

My beef is not with hard working, productive public servants. I think they should get a good wage commensurate with their skill levels.

But sadly, the stats are pretty damning. The Federal public sector has about 2½ times the average rate of absenteeism in Canadian private industry, and almost twice the level of sick leave and disability claims in the rest of the public sector. That shouldn’t be.

And I’ve yet to see anyone outside of a public union defend bankable paid sick days as a perk, or paying out severance when a person isn’t laid off or fired. DB Pension plans need to be made solvent by contributions of the people IN the plans, not the taxpayers.

Anyway, you’ll find I am not a conservative except when it comes to pubic finances being balanced and waste of tax dollars. There’s something intrinsically wrong with provincial and federal governments running deficit budgets year after year after year.

Simplistically, I’d raise the Fed corporate rate 1% (it won’t hurt the economy, companies are just sitting on the cash saved hoarding capital – they are not hiring or spending on research or paying dividends), raise the GST 1%, and lower personal tax rates on the middle class bracket (the one below 85k) by 2%.

And at the same time, fight the public unions to get rid of insane untenable benefits/perks and all this malingering. Bring salaries in line with private sector pay for similar work. And the biggy – require new PS workers to join DC plans on hire, as DB plans are no longer viable given longevity and early retirement perks available in a low investment return environment without private sector help. Educate them on how they should contribute and give generous matching to them. That’s my take. I don’t think it’s so bad….

#90 Frank le skank on 07.07.12 at 10:32 am

#80 noodles 79

Al Sinclair is a funny character. A great example of greed and deception. He’s trying so hard to preserve his cash cow and would run his own mother over to do it. I like to watch hot property to see what the parasites are thinking. I do worry about all the poor souls that actually rely on that show for real estate advise.

#91 Sathington Willoby on 07.07.12 at 11:09 am

Is a soft landing really out of the question here?

Some preach of doomsday, others not so
There is no crystal ball, to say which way it’ll go
Sell now or buy later? Garth seems to know
But come July 9, banks say you’ll need more dough
And realtors will say buy, prices are still low

#92 Ed from TO on 07.07.12 at 11:21 am

Hey penpal,
you sound like a brokedick.
brokedick-someone who cannot get financed.

You like making predictions? Here’s mine.
You will never own in the 416, ever.

#93 Condo crash in Toronto on 07.07.12 at 11:31 am

The condo bubble/ponzi in Toronto is simply a monster bubble that will crash the housing market . The amount of over building has made the over building in Miami look small. Of course it was different in Miami as everyone wanted to retire there. We all know realtors had many reasons why Miami was different but were proven wrong as prices crashed over 50% . Miami held the title of most condo’s being built in NA in a given year but now Toronto is the new king of condo building for the past two to three years. The scary part is more condo’s have yet to be built or are half built. The supply is already well beyond demand. Some condo’s in Toronot have over 60 and sometimes 70 condo’s being sold in just one building. Also think of all the job these condo’s provide when being built and when they are done what will those people do? The fake economy is going to take a hit and this hit will be even more painful as people can no longer borrow from their HELOC’s. Realtors and mortgage brokers in Toronto all know it’s a ponzi scheme on a grand level. They just think people are stupid.

#94 John on 07.07.12 at 11:34 am

Keeping the faith wrote:

“Really, a young girl in mud Turner? We’re 3 days away from the biggest beginning of the end in Canadian history, minus the Vancouver Canucks CHOKE of 2011, and you have to put that pic up?

Sorry buddy but lets keep it clean.”

—————-

I’ve been out of Canada long enough that I was actually stuck for a few seconds on the comment above. Then it clicked. The instinct suppression and man-hate up there is so strong that some poor guy on the internet, lost in self-hate, sees something “inappropriate” in the picture of the little girl in the mud. That is one hurtin’ individual. And so far gone, so traumatized by his decades long castration, that he actually BELIEVES in a “clean-up” call. Wow.

Thing is, this repression of nature is the “snip snip” referred to in Sue’s story. And the mud picture WAS removed…that’s how strong the collective guilt and repression training has been in Canada.

It’s super clear how a guy in Van will buy the world ponzi cheap money for a “house”. He’s shamed to death. Same as in Sue’s story. It’s called codependence, and all substance abuse centers in the world start with that as soon as the drug, activity or obsession is arrested.

A lot got accidentally exposed on the blog. Keeping the Faith…you’ve been trained well. More accurately shamed well. And it’s a society problem. A human problem. Thanks for inadvertantly exposing it.

You actually dropped your pants big time. Welcome to the human race. You’re no better or worse than anyone. Hard to believe eh? It’s a good news event.

#95 YagginHT on 07.07.12 at 11:34 am

Are we still talking about sales? *yawn* You know it’s all about price right? Sure, sure, falling sales is a precursor to falling prices. Hey 2009 called and they want their theory back. *yawn*

#96 Calgary's OK on 07.07.12 at 11:36 am

# 2 Keeping the Faith on 07.06.12 at 9:18 pm

“This story is written just like Socrates, Ghandi and “Calgary’s OK” there is nothing else to be said because they are all killing themselves, starving themselves or self flogging themselves outside the gates of the G_d forsaken Stampede.
The lords help you “Calgary’s OK” because there could be nothing further from the Truth. Calgary is on the edge of a cliff and the Keeping the Faith knows what he’s talking about.”

a. Thank you for putting me in same sentence next to Socrates and Gandhi, I have a lot of respect for both dudes. By the way they’ve done a little bit more the just killed and starved themselves, that is why most of the people still recognize their names without using Google first.

b. Why would I be flogging myself and since when Calgary Stampede is G_d forsaken? They have rodeo there, a bunch of attractions and my personal favorite Smocked Beef on the Bun. Instead of spending all your evenings in front of your iMac you really should try to get out more often and try new things, like socialize with live people.

c. I kept hearing stories about Calgary being on the “edge of the cliff” for the past three years, as well as I’ve been advised by the other fear mongers like yourself to “sell now, or tomorrow I will be left with a brown bag full of rotten bananas” (what ever that means). But the reality is that people who caved into that kind of scare tactics found themselves in the rental condos two years later still waiting for the “fall of the cliff”. So I think I’ll just fine without “lords” help. (I am not sure what kind religion you are practicing, but hey, it’s free country).

#97 ekstso on 07.07.12 at 11:41 am

This is interesting:
http://www.forbes.com/sites/haydnshaughnessy/2012/07/06/the-euro-bombshell-that-finland-just-dropped-on-berlin-and-madrid/

#98 Jack on 07.07.12 at 11:43 am

As per your post:

That could mean 25% in Edmonton, 30% in Winnipeg and Saskatoon, and 10% in 416.

I love your loyalty to TO, however, I wonder where you get off saying that the market that has risen so much will only lose 10%. I guess you have investors that you must try and keep from panicking as well. Very disappointing. I guess that’s what money does to us.
Somebody has lost their objective opinion.

#99 Toronto_CA on 07.07.12 at 11:44 am

Frank #90 – I’d either sell and move into your forever home (the one you’ll be in until you go to the old age facility) or renovate your current house and stay put. Selling and renting to buy back in later is trying to time the market. You could get very badly burned and have to move two times in a short time period. This will make wife and kids grumpy (I know, I went to 5 different highschools).

Good luck.

#100 Toronto_CA on 07.07.12 at 11:48 am

“Are we still talking about sales? *yawn* You know it’s all about price right? Sure, sure, falling sales is a precursor to falling prices. Hey 2009 called and they want their theory back. *yawn*”

Aren’t you curious about lack of sales in condos (down 18%, that’s not a blip) in the GTA and the MASSIVE inventory coming down the pipeline that has to be sold or these places don’t get built? Or go half up and unfinished as investor-flipper/specers walk away from their deposits rather than take a bigger loss by completing the purchase?

It’s fascinating to me, anyway. I think Garth is right about SFH’s in the 416 only dropping 10% (to start – townhouses and semi-detached who knows), but condo prices are going to plummet.

#101 Linda Pearson on 07.07.12 at 11:58 am

#91Toronto_CA on 07.07.12 at 10:20 am

I’ve been following the thread among you and a few other posters these last couple of days. Today, the details of your ideas make sense to me. Actually, you had me at: “Anyway, you’ll find I am not a conservative except when it comes to pubic finances being balanced and waste of tax dollars.” I am socially liberal but personally fiscally conservative.

Frequently, those who espouse hard-line attacks on public servants (and I include teachers, police, fire fighters and postal workers as well as government bureaucrats in that group), are so convinced that ALL of them are gaming the system and refuse to hear about hard-working, loyal and dedicated employees who serve everyone else very effectively.

My daughter is an elementary teacher who agrees with removing the perk about accumulating sick days for a payout when she retires. Don’t forget, she pays taxes too. What she has difficulty with is the clause that would remove whatever number of given sick days per month – not because she wants to take sick days while healthy but because when one teaches very young children one is assaulted almost every day by snotty noses, coughs that are not covered and rashes that sometimes reveal themselves to be infectious.

She would also eliminate the ability of retired teachers to return to the classroom as substitutes. That is double-dipping. It would have the added benefit of allowing new teachers without contracts to actually be hired full-time, though they may not have the benefit of their very own classroom right off the bat.

#102 eaglebay - Parksville on 07.07.12 at 11:59 am

#83 Bottoms_Up on 07.07.12 at 9:30 am
#184 Toronto_CA on 07.06.12 at 2:52 pm
———————————————
I agree with you that corporate tax rates should be higher and the GST should never have been touched.

I just want you to get off the backs of hard-working Canadians, working for Canadians.
_______________

Could you tell me who actually pays the corporate taxes?
Could it be the consumer? Eventually?
More entitled socialist. Get to work.

#103 truth hammer on 07.07.12 at 12:10 pm

Billions more in payoffs to people who have been coddled, spoiled and over compensated to begin with….where are the torches and the street rally’s by ‘Occupy’ and ‘Students for free Tuition’?

http://news.nationalpost.com/2012/07/06/ottawa-about-one-third-of-the-way-through-6b-liability-for-public-sector-severance-payouts/

Talk about misidentifying the real enemy, If it hadn’t been for thirty years of legacy overspending on special interests the streets of Canada would run with gold. Instead we have pissed away untold billions on whiners, liars and malcontents…..while everyone else has had to walk, march and run just to get proper equipment into a few childrens hospitals….imbalanced ideology disguised as charity.

The class war is over….viva the revolution.

#104 GTA Girl on 07.07.12 at 12:21 pm

Leaside party last night. 30 something couple just bought the 70 yrold home for almost $2mil. Calculated about 1,200 sqft. Ikea kitchen, Wolf stove, front door was 70’s version of hollow wood, w/layers of paint. Shared driveway.

Backyard unfinished..with few trees. In the spring, new Owner tried to do landscaping but needed to do a retaining wall to hold back the badly planned neighbors patio. Ran out of money..held together w/cinder blocks.

Whole house interior painted in minimalist white for the staging. But if you look closely you can see cracks, bad drywall taping, or warping.

I didn’t dare mention that I could smell mold in the bathroom. And the tiles were bubbling.

Nanny sleeps in newly drywalled crawl space in the basement.

Couple moved in w/their kids under 3, because it’s the best family neighborhood in Toronto. Though they complain they’re never home, always having to work.

I wished them well.

This is the norm in Toronto.

#105 V on 07.07.12 at 12:22 pm

Hi Garth,

Thanks for sharing your thoughts.

Attached is the link to the Calgary Region Economic Forecast published in Spring 2012 and was hoping you could share the difference between your perspective on what the article forecasts for the future of Calgary’s real estate over the next 5 years.

http://www.calgary.ca/_layouts/cocis/DirectDownload.aspx?target=http%3a%2f%2fwww.calgary.ca%2fCA%2ffs%2fDocuments%2fCorporate-Economics%2fCalgary-and-Region-Economic-Outlook%2fCalgary-and-Region-Economic-Outlook-2012-Spring.pdf&noredirect=1&sf=1

Thanks for taking the time.

Cheers

Certainly. Mine is not self-serving. — Garth

#106 REAL ESTATE: The New Normal ( From Garth Tuners GREATER FOOL BLOG | on 07.07.12 at 12:26 pm

[…] a year ago ridiculing places like Richmond, BC? Savvy foreign buyers. World-class bungalows. Planes full of horny Asians stacked up over YVR. Realtor-experts telling Global TV this was the new normal. […]

#107 TurnerNation on 07.07.12 at 12:34 pm

Listening to random conversations, at work, on transit, in elevators, everybody’s talking about real estate, mortgages, and amortizations.

Reminds me of the 2000 dot-com bubble.

People trading on technicals not on fundementals.

Traders know, short term markets trade upon technicals and emotions; eventually the fundementals kick in.

#108 luke8929 on 07.07.12 at 12:36 pm

US States/Cities to use Eminent domain to restructure mortgages and the Federal Housing Finance Authority in the US to sell large pools of housing to vulture capitalists.

http://online.wsj.com/article/SB10001424052702303933404577505013392791018.html

http://www.breitbart.com/Big-Government/2012/07/06/Obama-administration-to-sell-foreclosed-homes-to-vulture-capitalists

So in the future the market tanks in Canada CMHC sells large pools of RE to investment capitalists at penny’s on the dollar to rent out over a several year period to all the people who have been foreclosed on. Anyone who thinks they are going to get a good deal on a house at the end of this is dreaming. Its government for the bankers by the bankers, no way they don’t profit on this and the minions in gov don’t do exactly what they want.

#109 Anthony Mayfield on 07.07.12 at 12:46 pm

For everyone who can’t get enough accurate commentary on the Canadian Housing Bubble, check out my videos on Youtube

http://www.youtube.deleted

Garth I hope you don’t mind the plug as we are both working to get people educated and out from under this anvil of negative equity that is hovering over the head of the middle class, held up by an unravelling string..

Dude. Grow up. — Garth

#110 TurnerNation on 07.07.12 at 12:47 pm

Or, quoting John Lennon’s lyrics:

“Everybody’s smoking and no one’s getting high…Strange Days indeed.”

:-0

#111 prairie gal on 07.07.12 at 12:49 pm

Actually, in my circle, the Vag is a term of endearment for Regina. Saskatoon is Toontown. and, yes, they are both mediocre places with overpriced real estate.

#112 Gunboat Denier on 07.07.12 at 12:51 pm

90 Frank – dont speculate with the family home – either buying or selling. You have no mortgage, so work on
building up liquid assets for a few years. Examine
employment and family picture objectively. Situation
should become clearer (one way or other) in years to
come.

#113 Aussie Roy on 07.07.12 at 12:57 pm

Ed from TO

on 07.07.12 at 11:21 am
Hey penpal,
you sound like a brokedick.
brokedick-someone who cannot get financed.

You like making predictions? Here’s mine.
You will never own in the 416, ever.

……………………………………………………………………….

Perhaps the most pathetic comment today, those with no logical defense call others names.

How about adding to the conversation, proving your point with logic or is that a bit too grown up for you?.

What was your point, again?. Is it, it’s different in 416?.

#114 Toronto_CA on 07.07.12 at 1:11 pm

#103 Linda Pearson on 07.07.12 at 11:58 am

If only the Union leaders and Government were as sensible as us (and your daughter in law) and could find some middle ground. No one begrudges people taking sick days, especially teachers around little ones.

Bankable sick days paid out on leaving/retirement seems to encourage not taking sick days tho, as you’re making a choice to stay home sick or get money. I don’t see what is so wrong with sick days being neutral to a salaried employee, just have safeguards against malingering similar to the private sector (eg more than 2 days off needs a signed doctor’s note).

#115 TurnerNation on 07.07.12 at 1:23 pm

From the twerpy realty blog (keep in mind its
progenitor paid almost 3/4 mill all-in for a 2 bedroom condo w/large patio).

http://www.torontorealtyblog.com/archives/get-a-toronto-life/7385

“I’m not Garth Turner – predicting doom and gloom, every year, forever”

#116 P Letcher on 07.07.12 at 1:46 pm

For those who have not seen this simple explanation, the root cause of this finacial turmoil was fortold in this brilliant 2007 video…

http://www.brasschecktv.com/videos/in-humor-truth-1/how-the-markets-really-work-from-2007.html

#117 TurnerNation on 07.07.12 at 1:53 pm

Sign of the times. Consumers tightening up?

(Emphasis added).

Reitmans loses $53,000 in Q1
Sales for the first quarter ended April 28, 2012, decreased 1 per cent to $217,094,000, as compared with $219,296,000 for the first quarter ended April 30, 2011. Same-store sales decreased 0.7 per cent. The first quarter ended April 28, 2012, resulted in weaker sales attributable to a difficult retail environment marked by increased promotional activity. **Other factors included the impact of higher gasoline and food prices reducing consumer disposable income for apparel.**

#118 Blue Monster Lover of Meats and Vegetables on 07.07.12 at 2:07 pm

#88 Toronto_CA on 07.07.12 at 9:54 am

Mass defaults on bank loans should cause credit to seize up and lending standards to tighten which should then lead to price deflation unless it’s opened up again – like by the government insuring the bad debts or printing money (less money supply chasing similar demand of goods). Without access to credit, businesses go under and lay people off, which causes a deflation spiral.
—-
Ok, so that’s how it should work if we had a sound money system, where default or no default, the amount of money would be constant and the defaults would erode a given bank’s capital reserves which would then in turn force them to be more careful in their lending going forward which might mean increasing interest rates to attract savers and limit borrowers to the best quality and hence credit contraction. But do you agree that the default of a bad loan in and of itself is neutral in a fractional reserve system? Such that when the loan was created the new money was created by credit expansion which is inflation. Then if the loan is paid back in full the credit would again contract, deflation. But if the loan is never paid back and the bank has to expense the bad debt, it’s neutral in terms of supply of money in the system, right?

I ask because I’ve never had anyone agree with me on this seemingly simple accounting of money supply. And I often have to argue it because so often people automatically correlate default with deflation. But I would argue that could be a secondary effect in a sound money market, but we don’t have that today with the central banker’s ready to print. So rates don’t rise and credit contraction doesn’t occur and banks are recapitalized by monetization of bad debt.

I think people confuse how it’s supposed to work because that’s what they were taught, like yourself, but they don’t realize that things aren’t working that way. They jump to the baked in conclusion, rule of thumb and don’t think critically.

Do you agree?
Thanks

#119 daystar on 07.07.12 at 2:15 pm

#62 Blue Monster Lover of Meats and Vegetables on 07.07.12 at 12:30 am

It takes a symmetry of private/public for innovation overall, I believe. Innovation begins with education and education for the most part begins publically. I’ll use Nicoli Tesla as an example of innovation. If he government didn’t provide the basics (literacy), would Tesla have gone on to secondary education? From there, Tesla came up with the induction motor, AC power, wireless etc. but how far would he have gone without a public education system giving Nicoli a start? How far would most of the rest of us have gone?

Both public and private know you really can’t have one without the other or they remain stunted and it really comes down to the capital and resources needed to make it work. Private might think for example, that they can do without be brother until say… a housing bubble collapses and financials would freeze with innovation the victim unless big brother cushions the blow.

Public can only go so far as well. Where is a nation headed, similarly, with systems of government that stunt private growth, private innovation? Trailing the pack, quite frankly. Public and private both have a role to play and their symmetry is dependent on their working together instead of competing with adversarial ideologies.

The topic of severance pay in the public sector has made the news for obvious reasons and off topic as it is, it will effect incomes and there are some things here that I think are missed that I’d like to address. Severance for retirement and voluntary leave is a dated concept from what I can tell. 4% of the public sector is being laid off, presumably not to be hired again in the near future so its in the spotlight.

I don’t fully understand why the Harper government chose to negotiate severance before contracts are up for renewal? (optics is too knee jerk to be considered a genuine reason with 3 years to go in a majority) I also don’t get why weight was given to severance for retired quitting public sector employees to begin with, its a dated bargaining chip. What I really don’t get the Harper government paying off severance for employee’s who are still working. The Harper government has handled this file poorly.

What I utterly disagree with is this: The Harper government decided in their wisdom, to pay up front severance to those who aren’t leaving. “It’s cheaper”, they say, to pay them now on a voluntary basis. The net effect it has to pay pubic sector employees severance pay while remaining employed is that when these same employees need severance for layoffs, they won’t have the cash when they need it most.

Do employees need severance when they are working? No, they need it when they are laid off and layoffs in the public sector can be hard for the system to absorb because its the largest group of employees in Canada (what is it, 285,000?). From there, its the teachers union that employ’s what, 115,000 teachers and administrators and thats provincial. I can’t think of a private corp in Canada that employ’s six figures. So… if there was an abrupt 5 to 10% layoff from the public sector for whatever reason, the private sector just can’t generate the employment to absorb the glut of unemployed looking for work in their vocations and that means missed mortgage payments with severance paid out early. Large scale public sector layoffs aren’t something the system can easily handle due to the magnitude and concentration of human resources looking for work. Layoff’s are when severance is needed most and the situtation like what we see here with a government that has gone on the “so called” cheap to save at the expense of practicality and human resources reveals just how blind the Harper government is to this reality.

Finally readers, if you read comments that dismiss what the latest regulatory changes will do from our feds (30 years down to 25), just remind yourselves of what it will do to payments. In 2 days, mortgage payments for the same amount will go up. This won’t just effect virgin buyers, but new buyers in general. Credit has tightened. Here’s a mortgage calculator, see for yourselves:

http://www.scotiabank.com/ca/en/0,,25,00.html

30 years to 25 years is roughly a 5% increase in monthly payments depending on the rates you get. Buyers and sellers who don’t think it won’t be priced into the market must think housing isn’t financed or incomes will magically increase by 5% within the next few months to offset. I can offer magical mushrooms to enhance such beliefs but their effects will wear off and so will the idea that tighter credit won’t effect home values when they drop. Tighter credit through tighter regs or higher rates or both will a thousand times out of a thousand reduce affordability which in turn, gets priced in. It shouldn’t be a difficult concept to understand.

#120 daystar on 07.07.12 at 2:31 pm

http://cgi.scotiabank.com/mortgage/payment.html

Wups, provided a dead link. This one functions :)

#121 bill on 07.07.12 at 2:32 pm

sue you should leave him now.right away.
there is no relationship if he keeps important stuff from you.
some one else pointed this out : what else is he keeping from you?
you have already left, right?

#122 Blue Monster Lover of Meats and Vegetables on 07.07.12 at 2:39 pm

#113 prairie gal on 07.07.12 at 12:49 pm

Actually, in my circle, the Vag is a term of endearment for Regina. Saskatoon is Toontown. and, yes, they are both mediocre places with overpriced real estate.
—–
I like the ring of Regina, it has a subtle beauty. Unlike the name Uranus, which would subtly imply the place is a real shit hole. lol.

#123 Ed from TO on 07.07.12 at 2:50 pm

To Aussie Roy,
yes I can add to that,
One has simply to look at the census numbers and the expected population growth in the GTA, all centering on Toronto. Where are all these people going to live??
This will keep the prices up, and until interest rates start jacking up the affordability is still there and prices are not going down.
And as for penpal, he still sounds like a brokedick.
You however sound like a fine person and you input in general is appreciated.

#124 daystar on 07.07.12 at 2:52 pm

#91 Toronto_CA on 07.07.12 at 10:20 am

Have you looked into public vs private wages and benefits?

Its pretty close to the same except for benefits favoring public and there are differences between the sectors but the overall wage average is the same:

http://cupe.ca/economics/battle-wages-paid-more-public-private

This bottom link has links that are more specific (haven’t looked at them, don’t have time!)

http://www.policyalternatives.ca/newsroom/updates/public-and-private-sector-pay-differences

#125 jess on 07.07.12 at 3:09 pm

Roubini on Finland pros and cons

http://www.economonitor.com/nouriel/2012/07/06/is-it-worth-fixing-could-finland-be-next/

—————–

#126 Aussie Roy on 07.07.12 at 3:13 pm

Aussie Headlines

Housing glut hits suburbs

MELBOURNE’S urban fringe has been swamped with 35,000 unsold homes, prompting warnings the glut could trigger a further slump in property values.

The record 55,290 unsold homes in Melbourne in June – the highest number of any capital city in Australia.

The tough market conditions are expected to deteriorate even further, with research showing developers are poised to release another 75,000 new home sites at 126 existing housing estates in the city’s growth areas.

”In good times, that would be equivalent to a five-year supply. Right now, it’s more like a nine-year supply,” said Robert Papaleo, research director for property analysts Charter Keck Cramer.

According to the group, Melbourne already had a 30-year supply of land before a decision last month.

”We already have 30 years of land supply on the fringes, so why would any rational government expand it by another 6000 hectares? It’s crazy stuff.”

So you ask, “what does the RE representative body say”?.

Well I’m pleased you asked.

”There’s no reason for concern. The stock on the market tells you nothing about the fundamentals. It’s underlying demand that matters. Melbourne’s new homes market is in good shape,” said HIA economist Andrew Harvey.

LOL – “The stock on the market tells you nothing about the fundamentals”. I’m speechless (because I can’t stop laughing).

http://www.theage.com.au/victoria/housing-glut-hits-suburbs-20120707-21o6k.html

#127 Canadian Watchdog on 07.07.12 at 3:16 pm

#102 Toronto_CA

“It’s fascinating to me, anyway. I think Garth is right about SFH’s in the 416 only dropping 10% (to start – townhouses and semi-detached who knows), but condo prices are going to plummet.”

Detached prices will eventually fall faster then semis and condos. The reason: more leverage.

#128 jess on 07.07.12 at 3:17 pm

Much of the 30km exclusion zone around the Chernobyl nuclear plant is pine forest, and some of it so badly contaminated that a forest fire could create a devastating radioactive smoke cloud

…Pine damages easily. Wind blows it down. Insects infest it. Drought makes brush into perfect tinder which can all too easily catch fire. And these dying radioactive plantations are considered too dangerous and expensive to clear

Chernobyl’s radioactive trees and the forest fire riskBy Patrick Evans

Chernobyl, Ukraine

#129 Westernman on 07.07.12 at 3:22 pm

daystar @ # 121,
If someone said good morning to you would that result in you giving a 15 minute speech in return?
Maybe you should be in politics – you can sure drone on but never seem to come to a point…

#130 brainsail on 07.07.12 at 3:22 pm

#121 daystar

I think your reference to 285K public sector jobs is only for the Federal Civil Servants. There are 3.6M public sector jobs or about 26% of the entire workforce.

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/govt62a-eng.htm

#131 Canadian Watchdog on 07.07.12 at 3:23 pm

#121 daystar

Nicola Tesla would have gone nowhere without capital investment. Read about the Wardenclyffe Tower Project and what happened when he tried to provide free energy to the world.

#132 Tony on 07.07.12 at 3:26 pm

Re: #18 Ty on 07.06.12 at 9:39 pm

Canada is also catching up to the huge declines in real estate in the rest of the world. Wait a year or two and you’ll learn.

#133 Toronto_CA on 07.07.12 at 3:54 pm

Daystar, I’m afraid linking to a CUPE website is a bit biased for me to believe those stats.

I am pleased if wages are the same for private and public sectors for similar work (and productivity). That is how it should be.

Let’s ignore bankable sick days and severance payments as benefits that the private sector would never expect to get as they are untenable.

DB pensions are where anyone who can read would see that the public sector unions have deviated from the private sector. These pensions are bankrupting cities in the USA (idiots in positions of power are to blame for this as much as the unions themselves here) and the unfunded liabilities in Canada (Federal and Provincial) are not pretty. More people retired than working means more money going out than in. Ponzi schemes at it’s best. Stupid people keep living too long! :)

We just had a solvency review of our DB plan at work (legacy employees only for the last 10 years new employees go into the DC), and it has a surplus. Something so rare that our parent company does not have an accounting code to use for it (I stick it in other assets).

But most places including the federal and provincial governments as you know are majorly unfunded on a solvency basis (using conservative interest rates). I’m not a pension actuary, but every time interest rates fall the discount gets smaller on the liability (bad) and the return on assets gets smaller (double bad). Maybe when interest rates rise again we’ll see these plans go solvent again and it will make sense.

The Feds and the Provinces need to move employees to a DC plan for new hires starting yesterday. Or raise taxes. Or both.

#134 Ty on 07.07.12 at 3:55 pm

#106 GTA Girl on 07.07.12 at 12:21 pm

————

Right , but what is their combined annual income?

#135 Toronto_CA on 07.07.12 at 4:00 pm

#129 Canadian Watchdog on 07.07.12 at 3:16 pm

Interesting theory Watchdog. Do you think Garth is right on the 10% then for the whole city? He always backs that number with the “slow melt” afterwards, which I take to mean flat prices while inflation creeps forward making them more affordable. To me the higher they go the bigger they fall (Garth and I discussed Beverly Hill versus Leaside which BH is still down 16% from peak prices after a larger crash in 2008).

PS Thank you for all your insights and data collection. I think you’re the most valuable commentor on Garth’s pathetic blog.

#136 Piccaso on 07.07.12 at 4:04 pm

Financial institutions push debt because it makes them money

DEBT ADVICE VS . DEBT PRODUCTS

There was a time when the financial industry was excellent at preaching the merits of paying down debt as a strategy to achieve financial freedom and independence. That was until it discovered debt was not only a profitable business, but a hugely profitable business.

Today, actions speak louder than words. While the financial industry might talk the talk of paying down debts, its actions don’t always promote that ideology.

Take the growing problem of credit card proliferation.

How many times do you throw away new offers of credit cards in the mail? At one time, the financial institutions would send you the actual credit card ready for activation, but as you can well imagine, this became a real problem. The government stepped in and now mock credit cards come, along with a hint of pre-approval.

Walk through the airports and attractive men and women will smile and see if you want to apply for the BEST travel credit card.

Go to Home Depot, Sears, Walmart or the Bay and you can get 10 per cent off the price of your purchase if you sign up.

The promise of easy money is also everywhere. Mortgages mean big money for lenders. How many times have banks helped clients get into their homes by making payments more affordable? They can lower monthly payments by simply extending the amortization of the mortgage from 25 years to 40 years.

That happened a lot until the government stepped in and said no more 40-year mortgages. It’s bad for Canadians. So then the banks suggested 35-year mortgages, until the government stepped in and took those away. Now the government has stepped up once more and said no to 30-year mortgages as well.

What people need to remember is that leverage is risky. When I first came into the financial industry, it was noble to help young people start up an automatic $100-per-month savings plan in a RRSP. The only problem is advisers could not make a living from these clients because they would make $4 per month or $48 per year. What if you could turn that $4 per month commission into $1,000-plus $100 per year?

Welcome to the world of leverage.

Instead of getting the client to invest $100 per month, get them to borrow $25,000 and invest the $25,000. Now the client uses the same $100 per month but uses it to pay the interest on the loan, and now they have more money working for them in the markets. Sound good?

This all works for the client if the return on the investment exceeds the cost of the interest. The risk comes when the investments do not perform or the cost to service the debt goes up as a result of rising interest rates. If you think about it, the risk only applies to the client. The adviser makes money regardless of what happens in the markets or with interest rates. Leverage is lucrative for those selling the concept

Rising debt is a problem in our society, and the problem is not isolated here in Canada.

The next time you get a pitch to take on more debt, whether it’s a mortgage, a car lease, a line of credit, a credit card, or the opportunity to leverage, ask yourself what’s in your best financial interest.

#137 TurnerNation on 07.07.12 at 4:20 pm

That Dateline middle class poverty show is now available online:

http://www.msnbc.msn.com/id/21134540/vp/47966536#47966861

My thoughts are: everyone featured is struggling, with some signs of hope, but many appear emotionally immature, vain, entitled, and helpless. Yet in their former jobs they were supposedly powerful.
But lacking basic life skills. Hard to imagine, an entire ‘neutered’ generation. Whereas, their parents knew how to make do, economize, and balance the cheque book.

Current generation is even more doomed. Early 20-somethings buying $400,000 condos, with $350/mo condo fees alone…
This will not end well.

#138 tkid on 07.07.12 at 4:28 pm

Divorce him Sue. Divorce him and get the thing finalized while the house is still an asset and not a liability.

#139 Blacksheep on 07.07.12 at 4:28 pm

Field report from here in Osoyoos (in the OK.). Been staying at Waltons Mountain Resort four years in a row, first week in July. For the previous three years the place has always been booked solid with RVs from Alberta and Van. Not this year. Less than 50% occupied. This little tourist town in general, is pretty quite. Been looking at RE in town, prices dropping, last MLS home sale was mid May. Multiple bank owned homes for sale. On a different note, business in the Fraser Valley has fallen of a cliff for some (me) in the past six weeks. Our business has stable, long term customers, but people are sitting on their hands. Finland’s publicly stating they would bail on the E.U. before taking on others debt (post # 99, ekstso, thanks) opens the discursion on tactical exits by members.

Well a least it finally stopped raining.

Take care,
Blacksheep

#140 Hoof-Hearted on 07.07.12 at 4:43 pm

We get it folks on the Tesla, Henry Ford etc. etc. Capital Investment, University Research etc.etc.

That was then..this is now.

Have our lives quantifiably improved over the past few decades, especially for the tail end of the boomers and those who were born after?

Since the 1970’s we have lived in an “Alice In Wonderland ” Ponzi scheme that is collapsing all around us.

Since the Federal Reserve was created, we have had 2 World Wars and a 3rd one likely. The US was BANKRUPT within about 20 years of the Federal Reserve(whole other topic of what that really means) . Since then the Ponzi Scheme and decoupling from gold standard has sucked us all in with inflation. Music is stopping, no more chairs, except maybe on the Titanic called Global Banking

Gov’t continues to grow…more bureaucracy and regulation. These bored little beavers simply create more work as the real world cuts back. Perfect example here in BC is the Federal Fisheries. Fewer Fish..fewer fishermen but more and more enforcement and red tape..for what ?

Doing a lousy job gets rewarded..only in Gov’t..hence the sign of a growing Big Brother state and the extinction of the middle class.

#141 Steven Rowlandson on 07.07.12 at 5:12 pm

If indeed prices have started to decline one should not delude oneself by thinking that the end is near and a recovery is just around the corner. It is still a long way down before homes become affordable to working men.
When we get back to mid 1960s or earlier house prices then there is a good chance things will have bottomed out and prices will be at reasonable price to earnings ratio instead of 20 to 30 years pay for a house.
Then again if the interglacial period we have enjoyed comes to an end then canadian real estate prices won’t matter one bit because we will be in an ice age and it will be a situation of your staying or your living a little closer to the equator.

#142 sid on 07.07.12 at 5:12 pm

this is hilarious! http://www.yattermatters.com/2012/07/the-new-twisted-christmas-vancouver-real-estate-card/#more-31357

#143 Questioning Calgary stats on 07.07.12 at 5:31 pm

#98 Calgary’s OK,

You refer to people who talk about the fundamentals of the housing market as “fear mongers” who talk about Calgary “being on the edge of the cliff”.

Do you know anything about CMHC at all? Since you never back anything you say with any factual information, let me give you something to get started with. Let’s keep it simple. Calgary’s real estate market was in free fall in late 2008, early 2009. The ONLY thing that stopped that plunge was the fact that CMHC was mandated to begin immediately to insure more high risk mortgages. Up to that point, CMHC had about $300 B on its books. From 2009 until now, that number has basically doubled up to $560 B. (You must have heard about the liar loans, 0 down cash back mortgages, etc). As well, interest rates were taken to historic, emergency levels and kept there.

Without this unprecedented intervention, the Calgary housing market would have continued to crash and by now it could have easily been down 40% from peak.

You seem to think that the Calgary market has stood on its own and didn’t need intervention to stop the downward slide it was in. Please explain how that is so.

#144 Cannatown on 07.07.12 at 5:48 pm

10-15% down in 416 but seeing everyone hoping 50% crash LOL a lot of losers here… Even if the price down 30% I hope you have more than 20% downpayment and good credit score and still have your jobs … Me and partner is on track to pay off mortgage in 8 years.. Bought my place 6 years ago…. The best decision ever… If price is going down at its still ok… I still have roof on my head

#145 prem on 07.07.12 at 5:52 pm

Realtor open houses in brampton in a panic. Never seen so many open houses which all appeared to have no buyers looking. Brampton will be known as power of sale city as people will go bankrupt and leave Canada. Without the free money this cold country of nightmares would Be finished. Many Indians have left Canada for a better life in India or USA. Borrow all you can before leaving Canada. Thanks for the free lunch and dinner Canada as I will not pay back even one penny.

#146 dd on 07.07.12 at 6:05 pm

ECB, BOE, and China all making money cheaper. The Bank of Canada will be hard pressed to increase interest rates any time soon.

Too bad, we need an investing-saving environment and not consumption.

#147 dd on 07.07.12 at 6:07 pm

#127 jess

….Roubini on Finland pros and cons…

You listen to this guy? His policy – extend and retend.

#148 Kim on 07.07.12 at 6:12 pm

It seems Garth has a vested interest in T.O . In my area I seen people lower their prices by 40-75k the past couple if weeks in C6. I remember prices in this area went from 550k houses to 450k and 450k to 359k in just three months in 2008. No one can tell how hard the crash will be since We are in a ponzi market.

#149 T.O. Bubble Boy on 07.07.12 at 7:17 pm

It seems that commercial property is also slowing:

http://business.financialpost.com/2012/07/06/toronto-commercial-leasing-listings-down-22-treb/

Time to ease up on the REITs?

#150 Grim Reaper/Crypt Speculator on 07.07.12 at 7:39 pm

Just so you know…

Winnipeg was created when Hell and purgatory gets a bit crowded. mostly from people in Ontario and Quebec.

Saskatchewan and Alberta.? ….its redundant.

PS how’s Gretzky’s daughter doing,….at the Convent yet? TMZ wants to know.

#151 2true on 07.07.12 at 7:40 pm

#147 prem

I asked about this possible phenomema back in 2009 and was accused of being anti-immigrant.

#152 jess on 07.07.12 at 7:44 pm

vip loans

Buying influence
By The Associated PressJuly 5, 2012 Subprime lender Countrywide bought influence of Washington elite with mortgage discounts

=========
think tank funnels

The 30-page letter sent to the IRS on June 18 was inspired by a separate, whistleblower claim lodged by consumer group Common Cause in April, which alleged ALEC is a corporate-funded lobbying group, which violates IRS rules that govern 501(c)(3) nonprofit corporations. The complaint was based, in part, on information about ALEC obtained by the Center for Media and Democracy, a nonprofit research group opposed to ALEC’s legislative ambitions…

#153 ANONYMOUS on 07.07.12 at 7:52 pm

You know that lady friend of mine who bought a condo off Fort York Blvd for $320,000? Well, someone just offered her $410,000 for it if she was thinking of selling ! Yup, almost $100,000 rise in price in just 2 months, its just nuts I say.

#154 jess on 07.07.12 at 8:22 pm

according to mr. zimmerman
1958, University of Chicago, annual tuition was $870. Inflation would make that $6,945 today.
U of C this year is $43,851, 6x as much, making crushing debt inevitable for most students…

The Aftermath of Occupy Will Surpass the Gains of 1960s Activism
Tuesday, 03 July 2012 09:38 By Bill Zimmerman, Truthout | Op-Ed

…”The United States graduates about 800,000 college students annually. With an economy no longer expanding as it did previously, only about 400,000 can find full-time jobs.
============
Judge Blocks Key Provision of “Gainful Employment” Rules
July 2, 2012, 2:22 pm ET by Jason M. Breslow

The Obama administration warned this week that nearly 100 for-profit colleges could lose federal funds for not meeting new performance requirement standards

Some For-Profit Schools At Risk of Losing Federal Aid
June 27, 2012, 5:41 pm ET by Sarah Childress

At least 35 percent of former students must be repaying their loans, reducing the loan balance by at least one dollar.
A typical graduate’s estimated annual loan payment cannot exceed 30 percent of their income, or
A typical graduate’s estimated annual loan payment cannot exceed 12 percent of their earnings.
As we reported earlier this year, the government had written tougher rules to keep loans from going to students at the most exploitative for-profit schools. But these regulations were watered down after aggressive lobbying by the for-profit industry.

Now, programs at several schools have failed to meet even this lower threshold.

The government said that 193 programs in 93 different schools failed to meet any of the three requirements. Only 35 percent met all three. You can download a spreadsheet with data on all the schools’ metrics here, or a list of the failing programs by institution here.

#155 TRT on 07.07.12 at 8:25 pm

#147 PREM,

You know that if a crash happens in Brampton and recent immigrants are forced into bankruptcy, I think the gov may well start to write down the principal portion of the mortgage for these homeowners. Otherwise, immigrants would leave the country and leave it desolate and leave immobile Canadians to pick up the tab. Its the equivalent of Armageddon with respect to Corporations, Banks, and the RE lobby and maybe even this blog.

Its interesting that IMHO, the most successful Canadians in the coming couple of decades will be those that are mobile and have one foot in Canada and the other in another country.

#156 TurnerNation on 07.07.12 at 9:40 pm

#155ANONYMOUS on 07.07.12 at 7:52 pm

I call BS. On MLS I count over 70 condo dots on Fort York blvd. Ever been there? I go by there every few weeks. Sandwiched beside the Gardiner Expressway are several more new towers underday.

#157 Herb on 07.07.12 at 10:05 pm

You won’t believe this and it may not happen again, but I’m going to defend Harper, on Severance Pay anyway.

Whether anyone likes it or not, Severance Pay has been part of the pay and benefits package of the public service for decades. It was duly blessed by Treasury Board when Treasury Board meant something, and was intended to ease the transition to retirement or a second career on leaving the public service. Just cancelling it would be as feasible as giving all public servants an immediate retroactive pay cut. Our resident Roach Brigade would love it, but it simply can’t be done. The one-sided abrogation of contractual obligations is not considered to be good business practice.

By paying out the accumulated severance pay of people who may continue to work in the public service, Harper meets an existing obligation, prevents its further growth in future, and in fact eliminates a PS benefit, all without having to fund a quid for this quo. Truth Hammerer and cohort should be cheering him.

#158 Uki on 07.07.12 at 10:22 pm

#157 TRT,

“these homeowners” are not homeowners but idiots who jumped into ownership because “real estate always goes up”. If government will start to write down the principal portion of their mortgage, myself and my fellow smart euro immigrants will leave this country for sure. Good luck with socialist experiment ( again ).

#159 dd on 07.07.12 at 10:22 pm

#145 Questioning Calgary stats ol
Ya … It was oil at $30 bucks that caused most of the fall. Not to say Calgary is great value – far from it.

#160 BPOE Toronto on 07.07.12 at 10:27 pm

Foregin ivestors are buying TO properites lock stock and barrel. TO is not affordable for Candian tax farm slaves but only creme de la creme world class investors. Toronto is now officially BPOE. Yepeee!

#161 BPOE Toronto on 07.07.12 at 10:28 pm

Could I be the last?

#162 Can it be? on 07.07.12 at 10:36 pm

Sold signs finally in north Mississauga and thorn hill… Price cuts, sold under asking but people are cash strapped and need to get out. Looking forward to
See how the rest of the summer unfolds.

#163 disciple on 07.07.12 at 10:40 pm

Breaking…Helen Thomas is Ayn Rand. I will have more info posted later as I weigh the ramifications…Where is Monster? Ha!

#164 Riding the Pine on 07.07.12 at 10:43 pm

The irony is pungent.

When the market is strong, we hear about our city being “world class – everyone wants to be here”, or “we’re just catching up to the rest of the world”.

When things even stagnate or dip, it’s a complete mystery to the “professionals” in RE, and their explanation is “…Something has affected the psychology” of buyers and sellers.
Well done. Expert analysis. Good greif.

http://www.theglobeandmail.com/report-on-business/economy/housing/in-vancouver-the-sellers-market-recedes/article4389244/

#165 cramar on 07.07.12 at 10:44 pm

#155 ANONYMOUS on 07.07.12 at 7:52 pm
You know that lady friend of mine who bought a condo off Fort York Blvd for $320,000? Well, someone just offered her $410,000 for it if she was thinking of selling ! Yup, almost $100,000 rise in price in just 2 months, its just nuts I say.

Tell her to immediately get back to the prospect and say, “I have been thinking of your offer. I’d sell for $420,000!” (That way she doesn’t appear desperate.) She doesn’t even need to pay a realtor. Invest the profit. Then rent. If she doesn’t follow your advice, tell her she will live to regret it. If she follows your advice, she can tell the story for the rest of her life on how she made $100G in 2 months! Everyone will say, “What a sharp lady!”

#166 Timbo on 07.07.12 at 11:20 pm

http://howestreet.com/2012/06/who-destroyed-the-middle-class-part-3/comment-page-1/#comment-5557

“The faux journalists in the mainstream media have been pounding the consumer deleveraging mantra. They babble on about the austere masses methodically paying down their debts. It’s a specious lie. The chart below shows that banks have written off $218 billion of credit card debt since 2008. It also shows outstanding revolving debt falling from $1.01 trillion to $819 billion, a $191 billion decrease. For the math challenged, like any Wall Street shill paraded on CNBC, this means consumers have added $27 billion of credit card debt since 2008. Does that sound like deleveraging? Households have also taken on $300 billion of additional student loan debt since 2008, buying into the government sponsored scam to keep the unemployment rate lower by offering the false hope of jobs with useless on-line degrees from the University of Phoenix. Does that sound like deleveraging?”

Nothing to see here, all is good…………….

http://www.usnews.com/opinion/blogs/economic-intelligence/2012/06/12/the-government-shouldnt-subsidize-higher-education

“In the end, this bubble will be worse than the last. Even when homeowners got hopelessly behind on their mortgages, two options helped. First, they could declare bankruptcy and free themselves of their crippling debt; second, they could sell their houses to pay down most of their loans.

Students don’t have either of these options. It’s illegal to absolve student loan debt through bankruptcy, and you can’t sell back an education.”

High student debt will save us all……

#167 cramar on 07.07.12 at 11:20 pm

#106 GTA Girl on 07.07.12 at 12:21 pm

Leaside party last night. 30 something couple just bought the 70 yrold home for almost $2mil. Calculated about 1,200 sqft. Ikea kitchen, Wolf stove, front door was 70′s version of hollow wood, w/layers of paint. Shared driveway.

Backyard unfinished..with few trees. In the spring, new Owner tried to do landscaping but needed to do a retaining wall to hold back the badly planned neighbors patio. Ran out of money..held together w/cinder blocks.

Whole house interior painted in minimalist white for the staging. But if you look closely you can see cracks, bad drywall taping, or warping.

I didn’t dare mention that I could smell mold in the bathroom. And the tiles were bubbling.

Nanny sleeps in newly drywalled crawl space in the basement.

Couple moved in w/their kids under 3, because it’s the best family neighborhood in Toronto. Though they complain they’re never home, always having to work.

I wished them well.

This is the norm in Toronto.

—————————

Garth should create the “Garth Turner Greater Fool Award” to be presented daily to the one who exemplifies the spirit of the greatest real estate fool. Call it the award!

I nominate this host family for today! Please present it to them and tell them, “Congratulations! You win hands down.”

#168 50% correction predictor on 07.07.12 at 11:29 pm

155 ANONYMOUS on 07.07.12 at 7:52 pm

You know that lady friend of mine who bought a condo off Fort York Blvd for $320,000? Well, someone just offered her $410,000 for it if she was thinking of selling ! Yup, almost $100,000 rise in price in just 2 months, its just nuts I say.
_____________________

Don’t you ever try to insult the intelligence of the blog dogs here!

Maybe it was you who sugar daddied her $100,000

#169 Mr Buyer on 07.07.12 at 11:49 pm

155 ANONYMOUS on 07.07.12 at 7:52 pm

You know that lady friend of mine who bought a condo off Fort York Blvd for $320,000? Well, someone just offered her $410,000 for it if she was thinking of selling ! Yup, almost $100,000 rise in price in just 2 months, its just nuts I say.
…………………………………………………………..
A likely story

#170 Nostradamus Le Mad Vlad on 07.07.12 at 11:54 pm


And now, a different take on pepper, to go with the warm temps. we are currently having.
*
New Banking glitch Germany. Keep spare cash on hand; Libor Oh what a wicked web of deceit we weave; China Stockpiling rare earths; Switzerland Good for the Swiss and India; Recovery? Some may differ; Marxism replacing Capitalism? It appears so; Liborgate We’ve only just begun; Burning Wood to survive; RBS After being bailed out, they are outsourcing jobs to India.
*
The Truth Hurts The most honest three and a half minute clip you’ll ever see, and this; Further info. on the TPP; 7:48 clip Actually, the west will pay a price for causing so much trouble; Monsanto Good. Bankrupt those SoBs, and farmers join together to fight Monsanto’s scorched earth policy. Where’s HAARP? NAmerica (some of it) is being burned, while the UK and Russia are drenched. Coincidence? America Same applies here, and Electric Eye Govt. snooping from the air; 6:26 clip US plans to wipe out all sovereign states, but what is planned and what actually transpires are two separate things, and 13:13 clip Libya — another revolution to get rid of TPTB who caused this mess; Anarchy Did this ever happen under Gadaafi? No. Under the west? Yes; Approved Georgia, next to Russia, receives new defense chief courtesy the US; Scientology and Mormonism a.k.a. Mitt Romney and Tom Cruise; Double Star Constellations Quite nice; Fish and Chips Jawsome; Battling the Bulge with chili peppers; US Election Obomba, Romney and China?

#171 Toronto_CA on 07.08.12 at 12:00 am

#159 Herb on 07.07.12 at 10:05 pm

Herb, the fact that Harper is paying it out early is offset by 2 things: 1) the .75% across the board raise as a concession to losing this completely unfair perk that will cost hundreds of millions and 2) the people being ACTUALLY let go are getting additional severance on top of this severance. So 2 severances. The numbers I read show that this will not save any money because of those 2 things.

Harper should have paid out the severance early but NOT given a bonus raise as concession to the Federal worker and NOT paid out two severances for those actually laid off, just the one. I will never applaud Harper, the man has run the country very poorly (the G20 fiasco is one of the dumbest things ever, 2 billion dollars of waste and massive human rights abuses against our own citizens–let’s not go into the fighter plans or ridiculous Bev Oda).

Not that Premier Dad in Ontario has any better record, Orange, eHealth, the list goes on. Glad he is finally taking on the unions and asking for some pay freezes until the books are in better shape tho.

It’s enough to make you want to run for office.

#172 Country Girl on 07.08.12 at 12:01 am

#155ANONYMOUS on 07.07.12 at 7:52 pm

Tell your friend to get the offer in writing and accept.

#173 Calgary's OK on 07.08.12 at 12:24 am

#145 Questioning Calgary stats on 07.07.12 at 5:31 pm
“Let’s keep it simple. Calgary’s real estate market was in free fall in late 2008, early 2009. The ONLY thing that stopped that plunge was the fact that CMHC was mandated to begin immediately to insure more high risk mortgages. Up to that point, CMHC had about $300 B on its books. From 2009 until now, that number has basically doubled up to $560 B. (You must have heard about the liar loans, 0 down cash back mortgages, etc). As well, interest rates were taken to historic, emergency levels and kept there.
Without this unprecedented intervention, the Calgary housing market would have continued to crash and by now it could have easily been down 40% from peak.”

Well it doesn’t sound very simple to me at all. From your explanation above one can get an impression that just Calgary was in trouble and CMHC’s efforts were directed to save Calgary’s RE along. In real life, CMHC’s increased it’s books to $560B insuring RE of the ENTIRE country. Without this unprecedented intervention, the CANADAS’s housing market would have continued to crash and by now it could have easily been down 40% from peak. But it DIDN’T! In fact, only Calgary’s prices stayed pretty much flat since correction of 2009, and everywhere else they just kept going up! It looks like you expect fundamentals to apply to Calgary only (I assume just because you live there and naturally would like to purchase some affordable RE), but the rest of the Canada, according to you, should be fundamentals free!

You expect Calgary’s RE to be at least 40% below current levels, which would make an average price around $260K, really? Can you buy anything for $260K in the mosquito infested Manitoba or frozen Saskatchewan without going too far into boonies? Don’t get me started on places like Vancouver, Toronto, Kitchener-Waterloo or Ottawa (among a few others). What fundamentals would you apply to justify $1M for a 60 year old bung? Don’t get me wrong, I am all for fundamentals, but I also expect them to be applied equally to all major cities in Canada.

You say I never back anything I say? Here is a few of the fact about Calgary to back me up:

1. Fifth largest Canadian City with lots of jobs and modern infrastructure (opposite to infrastructure of some other cities where it is either non-existent or falling apart).
2. A city with one of the highest family incomes in the country (as opposite to other cities in Ontario and some other parts of the country where people struggle finding decent paying jobs).
3. No provincial sales tax, federal 5% tax only (as opposite to 12 up to 15% in in some other provinces).
4. Proximity to world class skiing, horse jumping facility, hiking trails, snowmobiling and hunting grounds (not for everyone, but still worth mentioning).
5. Home to a bunch of major companies home offices, seconds only to Toronto. Also, Calgary has actual downtown!
6. LOWEST property taxes of 0.5% in the entire country!!! In Toronto/Vancouver/Ottawa for example it is around 1.0% If you go to places like London ON, or pretty much any town in Ontario, property taxes there are around 1.6% – that’s three times higher. You can score some affordable RE in places like that (good for retirement, no jobs or opportunities for kids although), but you will be paying more in property taxes than for more expensive house in Calgary. In some parts of Quebec BTW, property taxes start from 1.6% and go all the way up to 2.1% (plenty of affordable RE there, knock yourself out).
7. Did I mention no land transfer tax?

Now I have a question for your Questioning Calgary stats, name me another major Canadian city that has similar set of advantages as I listed above and is actually worth living in? If you can find a city like that, do me a favor, keep it a big secret and move down there, before others find out about it and buy up all cheap RE in that place!

Happy Stampede!

#174 mac on 07.08.12 at 12:28 am

OMG! You’ve discovered a new blog: love and money agony aunt. Can’t wait to read it.

#175 Worried realtor on 07.08.12 at 12:48 am

#155 anonymous

Your story is pure garbage as Fort york blvd has over 60 condos in just one building for sale. I heard that person just bought like for $320 k but got only one offer for $255k and they need to sell badly.

#176 Dom on 07.08.12 at 1:02 am

LOL …. You realtors are looking really desperate and scared about toronto’s housing market. Face it realtors… sales have crashed hard and this before the new rules. Anyhow thanks for the laugh .

#177 Blue Monster Lover of Meats and Vegetables on 07.08.12 at 1:05 am

#165 disciple on 07.07.12 at 10:40 pm

Breaking…Helen Thomas is Ayn Rand. I will have more info posted later as I weigh the ramifications…Where is Monster? Ha!
—–
If she’s still alive and youve found here I’ll kiss you repeatedly!

#178 Keeping the Faith on 07.08.12 at 1:05 am

#155ANONYMOUS on 07.07.12 at 7:52 pm

Total Lie

#179 daystar on 07.08.12 at 1:13 am

#131 Westernman on 07.07.12 at 3:22 pm

And you never have anything nice to say about anything really. This is the best you got, being someones bitch? lol

#132 brainsail on 07.07.12 at 3:22 pm

Yeah, I’m talking federal. I haven’t looked at the federal provincial breakdowns but I will be, its of public interest.

#133 Canadian Watchdog on 07.07.12 at 3:23 pm

For sure. Same goes for his research when he couldn’t get capital. His life is a story of 10 tales both rich and poor.

#135 Toronto_CA on 07.07.12 at 3:54 pm

Daystar, I’m afraid linking to a CUPE website is a bit biased for me to believe those stats, – TCA

Lol, I assume bias with everything bud. Pensions aren’t my forte’ but I’m interested. The system has to be self sustaining and we have to recognize the risks going forward. When I see governments spending more than they generate in revenues without even touching interest on debt and its happened since what… 08′, that’s a serious problem and right now we are there with both Harper and McGuinty governments. I’m with you on tax increases and what really irritates me is the lack of transparency with federal accounting. Provincial, not as much but federal, yeah, there’s a problem. How can one look into pensions for example without detailed breakdowns? Lol, do I really have to go to union websites to get it, apparently so.

One thing that Harper has done that is consistent is hide anything that can be used against him. Its wide ranging from our public books to the environment. Just off the top of my head, here’s a cut thats gone unnoticed because of what it is likely to find:
http://www.winnipegfreepress.com/opinion/westview/closing-ela-penny-wise-pound-foolish-154975805.html

This was a government program to test water quality and industrial side effects from toxins that cost 2 million annually. It already had an international reputation for saving billions in Canada, never mind internationally. One would think a responsible federal government with the scale of fresh water Canada has needs to know the risks of pollution but not the Harper government. Need to know means the intel can be used against development so there’s now no need to know. They say greed is blinding. So is stupidity.

#180 Calgary's OK on 07.08.12 at 1:33 am

#145 Questioning Calgary stats on 07.07.12 at 5:31 pm

I also have a feeling that you maybe not entirely happy with Calgary stats… There are at least two realtors in Calgary who routinely track Calgary’s RE stats and post them on their websites. One of them is running http://www.findcalgary.ca click on MLS stats Archive. There you can find current stats divided in two categories (condos and SFH) and historic data since January 2007. I use them all the time to see what’s happening on Calgary’s RE market. It is actually pretty difficult to find similar kind of stats for most of other Canadian cities, they are usually available from local Real Estate Boards, but scattered all over the place, I really appreciate both Mike and Bob for doing that. You can question them all you want, but they are what they are – just raw numbers without being “indexed” or manipulated in any other way (at least I think so). You can use them to see the trends, or continue to question them, it is up to you, just don’t call me a realtor again, there is no need for name calling…

#181 Questioning Calgary stats on 07.08.12 at 1:43 am

$175 Calgary’s OK,

I applied the effect of CMHC taking on higher risk mortages to Calgary because Calgary was the city you were talking about.

Reread my post. Nobody said Calgary would have lost 40%, try “could have”.

As for the rest of your post, Calgary this, Calgary that. Try CMHC this, CMHC that. The CMHC pipeline is closing down and that is all that will matter from now on. Give it a year or two, then tell me that Calgary is different.

#182 Questioning Calgary stats on 07.08.12 at 1:51 am

$161 dd,

Actually a fair amount of the decline from peak that the Calgary market experienced happened while the price of oil was above $100, which is where it was at until late 2008.

#183 Investx on 07.08.12 at 3:27 am

100 – Jack:

That could mean 25% in Edmonton, 30% in Winnipeg and Saskatoon, and 10% in 416.

I love your loyalty to TO, however, I wonder where you get off saying that the market that has risen so much will only lose 10%.
————————————————————-

I guess Garth thinks it’s different in Toronto.
Reversion to the mean doesn’t apply.

I’ve explained how an area of six million people is not one market. Stop being so simplistic. — Garth

#184 Dividend Yield Investor on 07.08.12 at 6:25 am

If you have a balanced, diversified portfolio stop trying to be a market timer. Let the asset allocation do the work. — Garth

Garth,

Are you an adherent to Modern Portfolio Theory, which is held jointly with Efficient Market Theory? If markets are efficiently priced [EMT] then Canadian RE must be at fair value and not in a mania.

Dividend Man – Deep Value Investor
Canadian RE – is in a bubble.

#185 John on 07.08.12 at 7:48 am

Calgary’s ok wrote:

“Now I have a question for your Questioning Calgary stats, name me another major Canadian city that has similar set of advantages as I listed above and is actually worth living in? If you can find a city like that, do me a favor, keep it a big secret and move down there, before others find out about it and buy up all cheap RE in that place!”
———–

You wrote a list of advantages, so I’d challenge you to now write a list of disadvantages. Say I’ve got a million cash to “invest”, and I’m looking for class. Forget a traditional meaning of class. I’m lookin’ fer WORLD CLASS.

What better place than Calgary?

So my question is ( regarding world class cities), what is Calagary’s proximity to world class derivatives? Not a long answer here…just a short list. How close is all of your list to the world class ponzi scheme? It’s all about location, location, location right? So how close is it?

Everything’s connected, so make some kind of mention of “horse jumping fascilities” in your answer.

….or not. I mean, it’s not for everybody.

#186 T.O. Bubble Boy on 07.08.12 at 8:19 am

@#162 BPOE Toronto
Foregin ivestors are buying TO properites lock stock and barrel. TO is not affordable for Candian tax farm slaves but only creme de la creme world class investors. Toronto is now officially BPOE. Yepeee!

The only difference between how wrong you were about Vancouver and how wrong you are about Toronto is the % that prices will drop… There is enough house-horny local wealth in the core 416 to prevent a Vancouver-type implosion.

#187 T.O. Bubble Boy on 07.08.12 at 8:22 am

(but there will still be a 15%+ drop, and Toronto condos will fall up to 40%+)

#188 T.O. Bubble Boy on 07.08.12 at 8:28 am

Wow – does Flaherty run the pension plan now?

http://www.theglobeandmail.com/report-on-business/cpp-investment-board-makes-1-billion-real-estate-investment/article4398134/

CPP trying to ride the Aussie property and commodity boom… yet more proof that anyone under 60 should consider his/her CCP pension at risk.

#189 Lee on 07.08.12 at 8:54 am

Sold my tiny house two weeks ago. Now rent or buy? Son will go to school Sept2013. Want to settle by then. However, saw a beautiful home for 1/2mil yesterday. Wife and friend are saying this will be your house for years so if market goes down this year and comes back up after 5 years. you will not loose anything. thoughts??
I am leaning towards cheap rental for a year.

#190 penpal on 07.08.12 at 9:15 am

@ # 125 Ed from TO

DELETED

#191 penpal on 07.08.12 at 9:23 am

@ # 115 Aussie Roy

It’s ok, Roy, the lad is no doubt a proudly enslaved homeLoaner badly in debt for his stupid purchase at the top of the biggest RE bubble in Cdn history.

I guess if we were that dumb, we’d be angry at messengers like us who point out the errors of his way on a daily basis.

The ad hominem attacks and the ‘brokedick’ reference tell me all I need to know about this pathetic little frightened redneck boy.

Bottom line, he’s terribly worried that we are correct, and him being an insecure unmanly boy, is striking out in terror.

Kinda makes me laugh actually.

#192 penpal on 07.08.12 at 9:32 am

@ # 94 Ed (the assho’) from TO

Already sold in 416 to a greater fool like you!

Will repurchase from overextended weak handed assholes like you at my leisure over the coming years.

Remember this post well you weasel.

It wil be very apparent to you fairly soon that you have made a grave error. Then the predictions of the Penpal will come to haunt your consciousness daily as you wallow in the depression of the knowledge that you have become The Greater Fool!

Moan and bitch all you want little boy – the RE market in Cda and your future are going downhill boyo. Go suck on it!

#193 Smoking Man on 07.08.12 at 9:32 am

#85 penpal on 07.07.12 at 9:40 am

Why the hostility penpal.

Could it be all your peers have overtaken you by large margins by buying real estate, leaving you in the dust and bitter.

Your only hope or demented sense of vindication is for them to fall.

It’s not happen do you have a plan B prob not you never had a plan A.

But I understand your frustration and the feeling of being left behind, so if it makes you feel better to vent on me

Knock yourself out.

#194 Daisy Mae on 07.08.12 at 9:48 am

#138 Picasso: “That happened a lot until the government stepped in and said no more 40-year mortgages. It’s bad for Canadians. So then the banks suggested 35-year mortgages, until the government stepped in and took those away. Now the government has stepped up once more and said no to 30-year mortgages as well.

What people need to remember….

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

What people need to REMEMBER…is that this GOVERNMENT introduced the ridiculous amortizations you mention. And now this government has to rectify the damage, they alone, created…

Please get your facts straight.

#195 Daisy Mae on 07.08.12 at 9:57 am

#159 HERB: “By paying out the accumulated severance pay of people who may continue to work in the public service, Harper meets an existing obligation, prevents its further growth in future, and in fact eliminates a PS benefit, all without having to fund a quid for this quo. Truth Hammerer and cohort should be cheering him.”

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

Well, I dunno…people aren’t going to ‘save’ this severance package. They’re going to spend it — speculating on condos, perhaps?

Harper has ulterior motives for everything he does.

#196 Herb on 07.08.12 at 10:47 am

#173 Toronto_CA,

I’m not defending Harper’s record, but pointing out that his severance pay move makes sense. As a CA you should have no problem doing a rough cost/benefit to see whether or not eliminating severance pay this way saves or costs the government money. That’s all that seems to count for now.

There is a case to be made even for the double severance pay you object to. The normal “severance” is the earned benefit that an employee accumulates over his service, a contractual arrangement and part of his pay and benefits package. It also encourages retention.

The second “severance” is for people terminated but not on retirement or voluntarily. Is it a good thing to give such people extra money to help the transition to other employment? If you recall the reaction to the plant closures we’ve had in Ontario where people were simply let go, there seems to be a general impression that severance pay is good. I share that view. In fact, I think it was a major mistake in management to go from “Personnel” to “Human Resources”. Nomen est omen. I’ve seen a plant where the pay check was the only motivator, and management could not figure out why they had problems on the floor. But I digress.

#197 penpal on 07.08.12 at 10:51 am

@ # 195 Smoking

Again displaying the shallowness of your “brilliance” are you by making assumptions?

I’ve missed nothing – I sold and am heavily liquid.

Unlike yourself, I don’t find it necessary to put down others in an attempt to self aggrandize the way you seem so pathetically to need to do.

I am also not compelled to post obviously inflamatory postings to get a little ego stroke from some poor ill informed and misguided posters who are dumb enough to believe ANYTHING you say.

I am content to reveal the faulty thinking of others and the inconsistencies of their lazy thinking by hanging them with the rope of their own words.

You , on the other hand, seem to live on braggadaccio and not much else. In my humble experience, the best and most successful investors don’t broadcast their success nor do they belittle others who are not as talented.

In your case, it’s not much of a challenge.

Have another drink while you are losing your paycheck at the casino.

#198 TurnerNation on 07.08.12 at 10:54 am

Property taxes: Toronto is floating a yearly 1.9% hike ‘forever’, *plus* the regular increases, for funding the transit system that should have been built years ago.

World class? Hardly. We have but two subway lines circa 1960. They added a 4 station extention to no-where (Sheppard line).

#199 penpal on 07.08.12 at 10:55 am

@ # 192 ED from TO

Garth, selective censorship now?
Without explanation?
Have a nice time with YOUR blog!

This blog is always edited for gratuitous use of offensive language. You failed. — Garth

#200 daystar on 07.08.12 at 11:00 am

#197 Daisy Mae on 07.08.12 at 9:57 am

That’s my thinking. Ten year civil servants are getting 10 weeks of pay early from Harper. It could mean a higher tax bracket for some and if CS’s get laid off 5 years from now, they get 5 weeks severance when it should have been 15. Some would argue that “they could have saved it” but its human beings we’re talking about here and my concern is a CS with this example will need 15 weeks, not 5, at the time they get laid off and I’ve explained why (systemic risk).

Serrendippity is everything.

#201 penpal on 07.08.12 at 11:02 am

@ # 195 Smoking

Why don’t you stay drunk and high all the time?

Your postings are so much better that way and certainly more realistic.

I guess you are f’d up all the time on drugs and booze and chasing hookers and hanging at casinos losing money because you are just so darn happy!

Yeah, that’s it!

Epic loser you are buddy!

#202 cramar on 07.08.12 at 11:09 am

#175 Calgary’s OK on 07.08.12 at 12:24 am

6. LOWEST property taxes of 0.5% in the entire country!!! In Toronto/Vancouver/Ottawa for example it is around 1.0% If you go to places like London ON, or pretty much any town in Ontario, property taxes there are around 1.6% – that’s three times higher.

——————

Nope! Here in Kitchener, my taxes are 1.0%. Maybe they need to reassess, but that is what I am paying! But still twice what Calgary is. But I’d bet an equivalent house is a lot more that 2x the cost in Calgary so how would I ever be further ahead there? If houses were half the price in Calgary as here and it never got below -15c in winter, I’d consider moving there.

#203 Herb on 07.08.12 at 11:13 am

#197 Daisy Mae,

I think that the ulterior motive this time is simply to save the government money, with the elimination of a perceived public/private sector discrepancy a side benefit. Again, the Anti-PS Roach Brigade should be cheering!

If Harper were trying to goose the RE market/FIRE industry, it would be a pretty dull way of doing it. People need steady employment to pay big mortgage bucks. Lump sums might cover downpayments, but only jobs help meet mortgage payments.

Besides, isn’t it up to them how they spend this “windfall”? Personal responsibility and all that. There’s always beer and popcorn …

#204 jess on 07.08.12 at 11:15 am

“surplus funds”.
“There are tens of millions in cash missing.”

THE global hunt for what’s left of Sean Quinn’s fortune has switched to a tax haven chain of tropical islands in the South Pacific.

Financial investigators hired by the former Anglo Irish Bank were dispatched to Vanuatu last week, in what could prove to be a “critical stage” in its efforts to track down the fallen tycoon’s foreign assets.

Ukraine
Larisa Yanez Puga, the former manager of a Kiev shopping centre once owned by the Quinn family. She was named in court for signing documents that effectively transferred the claim to ownership of the $78m (€63.4m) centre to an offshore company.

The family are under increasing pressure to disclose their assets, following a damning High Court judgement that found Sean Quinn, his son, Sean Jnr, and his nephew, Peter, guilty of contempt of court for ignoring court orders to stop the asset stripping.

Last weekend, secret film footage at a meeting in Kiev disclosed Sean Jnr talking about moving $100,000 into Ireland undetected, and Peter Quinn saying that he was prepared to lie in court.

On foot of the extraordinary footage, IBRC asked the High Court to appoint receivers over the worldwide assets of members of the Quinn family, because it believes they cannot be trusted to comply with court orders. Quinn, whose €4bn business empire collapsed after a disastrous share gamble on the now-nationalised Anglo Irish Bank, along with his family, is being pursued for debts of €2.8bn.

http://www.independent.ie/national-news/hunt-starts-for-sean-quinns-funds-in-paradise-island-3161628.html

http://news.ninemsn.com.au/national/8473158/vanuatu-case-involves-large-tax-fraud

#205 Questioning Calgary stats on 07.08.12 at 11:19 am

#182 Calgary’s OK

You really need to reread my posts. I asked if you were a realtor, that does not qualify as calling you one.

It’s interesting to note that prices in Calgary have remained relatively flat since 2009 compared to other cities such as Vancouver and Toronto which saw big price increases. CMHC was mandated in 2009 to start insuring more high risk loans than ever before and nearly doubled the total on their books since that time. With that type of extreme intervention, one would have expected Calgary house prices to skyrocket, but they did not. This clearly points to an underlying weakness in the Calgary market.

The recent changes to the mortgage rules will basically remove much of the above mentioned intervention and bring on conditions that more closely represent a free market. Please explain to us how this will not affect Calgary house prices.

#206 NoName on 07.08.12 at 11:22 am

#167 cramar on 07.07.12 at 10:44 pm

For your friend to dich that condo at after few months living in it would be so “expensive”.
there is a good thing that she would see only half of that 90k.
when you factor in
RE fees, tax, (20k)
legal fee, (2k)
Cap gain tax (20ishK)
mrtg penalty and discharge (???)
and uhaul truck (19.95)
lot of hers huge gain gets eroded very quickly

#207 Echo on 07.08.12 at 11:33 am

#76- Please be mindful that such statements are based on fact.

There will be no holding back properties from the market. In fact, the largest market to be hit in this cming debaucle (Ontario) doesn’t “foreclose”. A vastly different legal process called “Notice of Sale” is used actually. Banks MUST follow an abcd process, and in a timely manner as well, in order to avoid liability from the owners whom they took the property from. This is because of 2 reasons…if there is a shortfall (the Bank can’t sell for the amount of the mtg so suffers a loss) the owner is responsible for it. Two, if there is gravy after the sale it must go back to the owner so it better be accurate as well.

So, NO foreclosures by Banks in Ontario because that is not their process and NO holding back properties because the Bank is as liable to the owner as the owner is liable to the Bank. Many other provinces are on the same system.

I haven’t commented for ages but this was too important. People may have believed you and that is just wrong. The truth will be much more dire, i.e. properties WILL hit the market as they default and go through the motions, and in a timely manner. Just as in the early 90’s, but what’s coming will be worse. Much worse. Just a slower, longer, bleed but with large dramatic surges fro job losses here and there.

It’s NOT different here in a zillion ways, just as Garth says, but, it IS different here in the way that I’ve explained. Get that “US Holding Back Props to help control the damage” notion out of your heads everyone. Oh, and it’s also like stopping a thunderstorm with one bucket. There’s that too.

Keep it real.

#208 jess on 07.08.12 at 11:38 am

The judge in the case, Recorder Rosamund Horwood-Smart, said: ‘In this court there are no rules just for the rich and no rules just for the poor . . . the tax system relies on voluntary and honest disclosure of tax affairs and it applies to all equally.’

This case was made possible after a disc of bank data was allegedly stolen from the Swiss division of HSBC in 2010. It was then passed to the UK by the French authorities after the employee had fled to that country.

The taxman is targeting 6,000 Britons who were exposed by the list for hiding bank accounts in Geneva in Switzerland.

Read more: http://www.thisismoney.co.uk/money/news/article-2169732/First-HSBC-customer-Michael-Shanly-convicted-tax-evasion-stolen-account-details.html#ixzz202uKiRxu

Read more: http://www.thisismoney.co.uk/money/news/article-2169732/First-HSBC-customer-Michael-Shanly-convicted-tax-evasion-stolen-account-details.html#ixzz202uC7wGz
Read more: http://www.thisismoney.co.uk/money/news/article-2169732/First-HSBC-customer-Michael-Shanly-convicted-tax-evasion-stolen-account-details.html#ixzz202th6YAV

#209 Echo on 07.08.12 at 11:39 am

p.s. Susan – very bad sign, this communication thing. Don’t rationalize it into the idea that he was trying not to worry you, as another poster said. Leave the guy. Love isn’t ‘good’ love if you’re having this issue.

#210 Echo on 07.08.12 at 11:47 am

p.p.s. Btw, foreclosure used to be allowable in Ontario, possibly still is, but the Banks don’t go that route and will not this time either, for so many reasons, as expalined above. Our Banking system is an entirely different animal from the US form so the clean up is totally different as well. The only common denominator was/is sub-prime lending.

#211 truth hammer on 07.08.12 at 12:02 pm

Politics makes strange bed fellows…..the Liberal dropped millions of immigrants into newlky created constituencies to buy elections…now the Cons are buying off the unions with billions of undeserved dollars for labour peace leading up to the next election

http://fullcomment.nationalpost.com/2012/07/06/kelly-mcparland-billion-dollar-payout-enriches-unappreciated-civil-servants/

Who gets screwed in all this…the taxpayer……with higher taxes to pay for the pork…shame on you Harpy….for describing yourself as conservative or as an economist…..or even a man with a brain.

#212 Gunboat Denier on 07.08.12 at 12:11 pm

190 TOBB – there is a link in your article from ROB that you should read.

There is no silver bullet investment for the CPP investment board. They own Manhattan RE, a mall in the UK etc. It’s all about diversification a la Garth, and taking some risk to achieve growth.

Dave Cowens, former NBAer said this – “I expect to win each game. I dont expect to win every game.”

#213 Echo on 07.08.12 at 12:20 pm

#203 Penpal:

You’re so much more immature, and vile, than Smoking Man.

And, you would be wise to heed his advice, regardless of how it’s presented.

You must be new. (and very green…alcoholism has masked genius throughout history and SM doesn’t deny his foundation either, unlike most alcoholics…however, your imagination about his disposition and success, or lack thereof, or who he actually is for that matter, is clearly in high gear = naive and arrogant.)

You’re persnickety, anything but “humble”, panties in a knot, crusader for all (don’t deny it, I can see the smoke in your nostrils) attitude is…gross. Give it a rest. Ripping apart Smoking Man on here is not appreciated by the majority of people on this blog. The intelligent ones anyway, and there are plenty of us darlin’.

#214 futurologist on 07.08.12 at 12:23 pm

Real Estate Crash, starting now in Canada, is only a small domino in the bigger failing dominos chain of the Western so called “civilization”.
You could expect during autumn and winter of 2012 and afterward following events:
Financial/banks crisis
Economic collapse:
Massive unemployment
Food prices up/other prices down
Disruption of communications (internet), banks, infrastructures (electricity, water, transportation)
Social unrest:
Riots
Criminals ruling streets, neighborhoods, cites
Police inaction, will be busy to defend government structures and elites
Creation of local militias, self-defence organizations by different groups and ethnics
Chaos/anarchy
Only China will be seemed as an island of stability
As on effort to stabilize the situation governments and elites will enforce martial lows/dictatorships/fascist regimes and wars.

It will not be “the end of the world”, but starting of a very dark period in human history.

#215 Calgary's OK on 07.08.12 at 1:02 pm

#187 John on 07.08.12 at 7:48 am

Nowhere did I mention that Calgary is a World Class city, nor am I trying to prove that “it’s different here”. All I am saying is that it is a good place to live (as opposite to some trying to portray it like some kind of toxic dump) and majority of the people make decent living, so some poster’s expectations that RE in Calgary should be 40% less from the current level is a little bit unrealistic. If you guys want to complain about unreasonable RE valuations I am with you on that one, but please do so on the Canada-wide scale, why single out Calgary?

If you have a million dollars to invest in RE, there are probably some other better places to do so, but if you are just trying to make a decent living and raise your kids then Calgary is one of the best places to be in Canada. On second thought, here is something for your consideration – if you make an investment in a million dollar property in Calgary, your property taxes are going to be roughly $5K a year, in any other major Canadian city your property taxes will go all the way up to $10K, that’s $5K in your pocket every year!

As for your question regarding Calgary’s location and connection to the world class “derivatives”, Banff and Jasper come to mind, as well as Canmore and Lake Louise. Calgary is located on the hwy #1 and CP Rail connecting BC to the rest of Canada, how’s that for strategic location? If you want me to incorporate “horse jumping facilities” in my answer, here it goes – Spruce Meadows is hosting North American and International horse jumping competitions every year; it is a beautiful and truly World Class horse jumping facility attended from all around the world (and broadcasted Internationally). Did I mention Stampede? It is not for the locals only, you know, apparently it is a big hit in Asia, people come to Calgary Stampede from all over the world to see Stampede Rodeo and the Chuckwagon Race.

And you are right, Calgary is not perfect and it may be not to everyone’s taste, but if you think that RE here is overpriced I guess the best way to solve this problem is to move and find yourself a better place to live. The problem is, so far I cannot find such a place.

P.S. Did I mention that health care in AB is free?

Re: free health care. Checked out marginal tax rates lately? — Garth

#216 OttawaMike on 07.08.12 at 1:21 pm

Re:Fed Govt Severance

I spoke with a ready to retire civil servant woman “Jo” about this last Friday.
The way Jo explained it was that every retiring/quitting fed employee is entitled to a severance payout. She still has a year to go but they paid her now whereas she would have gotten it in a year anyway. And yeah it is a six figure amount although she wouldn’t say exactly how much.

I likened it to the new contracts that were created for the auto workers after the GFC of 08. We now have autoworkers earning half the hourly rate of the next ones in the line with high seniority. This federal payout is a fairer deal because it keeps everybody at the same level from here on out.

Got to get out and enjoy our 2 week Ottawa summer now as should some of the shut-ins on this blog..
Bye

#217 ANONYMOUS on 07.08.12 at 1:23 pm

I told her to go ahead and accept the offer, and if the price is reduced then to go ahead but accept no less than $395,000 for the place.

Frankly I’m just shocked, my mouth is wide open in amazement at how many IDIOTS are there trying to buy places that are so small.

I visited her last week to install some IKEA furniture for her, and many of the older cars that were Honda Civics and older jap cars are now replaced with other owners who have moved in and they all drive Top-Dollar BMW / Porsches, well North of $100 K ! So it seems that big money is moving into that place.

#218 John on 07.08.12 at 2:01 pm

Calgary’s ok wrote:

“And you are right, Calgary is not perfect and it may be not to everyone’s taste, but if you think that RE here is overpriced I guess the best way to solve this problem is to move and find yourself a better place to live. The problem is, so far I cannot find such a place.”
——-

I think we have a big misunderstanding. I love Calgary. The spring is way too short though. You’ve got a case that it may be the best place to live in Canada ( Montreal and Halifax are good because of the fine people), but the subject is values of real estate. You connected the value of real estate to the fact that Calgary is a great place to live for lots of reaons.

So you’re not catching my point.

The point is that most of the value of ALL Canadian cities ( and here in Chile) has come from a WORLD ponzi run-up over a long period of time, and particularly from 2002 after 9-11 and the advent of the Euro.

You’re going in reverse. I don’t disagree with your points, just that you’re tying that to dollars of “value”. For that you have no case. It’s simply not true.

The reason you might not agree with that? Simple. You choose not to enter into the discussion.

That strategy has no impact on reality.

#219 Canadian Watchdog on 07.08.12 at 2:01 pm

Banks caught red-handed.

Old – $4.3M Forest Hill foreclosure. 57 days on the market. http://i49.tinypic.com/w02l50.png

Take a new picture, reduce the price and it’s a new listing.

New – $4.1M Forest Hill foreclosure. 10 days on the market http://i47.tinypic.com/s6umo4.png

#220 Hoof-Hearted on 07.08.12 at 2:16 pm

#217 Calgary’s OK

P.S. Did I mention that health care in AB is free?
==================================

There is a guy in BC doing booming business lining up surgeries etc. in the U.S. for Canadians who ,for various reasons, are not willing to be on long waiting lists.

What he does is find UNbooked operating rooms and cuts deals with hospitals for discounts for his clientele.

He said 6 out of 10 clients come from….drum roll…Alberta.

#221 DM in C on 07.08.12 at 3:10 pm

Calgary’s OK:

We’ve been here six years now. We’ve lived in Eastern and Atlantic Canada — it’s a nice city. We like it. It’s easy to fly out of to get someone to vacation during the 9 months of the year when you can see your breath.

But it’s not the be all and end all. There’s more money than brains here. And more pickups. And rude people, because it’s not a community, it’s a place to work, make your money and move home.

Citing Stampede and Spruce Meadows as reasons to be here doesn’t really help Calgary’s image as a ‘one horse’ town. It really is. It’s all about O&G and wanna be cowboys.

So property taxes are cheaper than other places — utilities are more expensive and ridden with riders and fees. Groceries are more expensive than even places in the Maritimes with their PST/HST hits.

And houses are overpriced here. By 25% approx. Which is why with an income of 150k+ we choose to rent. We pay $1750 for a place that would get listed at about $520,000. More money in my pocket.

You sound a little insecure about being a Calgarian. Who cares what others think?

#222 Echo Chamber on 07.08.12 at 3:11 pm

Yo Echo. I appreciate penpal rippin Smoking Man here.

He’s an idiot, a pathological liar, and a most of us could care less is he were to be run down by a cab while leaving the Duke.

Batman this, batman that, the universe is shrinking, and so are my balls (or what’s left of them)…

Yes, we revere Smoking Man here. Along with his, I hate teachers, I feigned poverty, track 6 is for people like me (no Smoking man, you’re not a contrarian) rants.

#223 Herb on 07.08.12 at 3:19 pm

#218 OttawaMike,

“Jo” would have to have 30 years of continuous service and would have to earn $3,333.33 a week to reach six figures ($100,000) in severance pay. Not many public servants are in that $160 K/yr pay stratosphere.

#224 Debtfree on 07.08.12 at 3:21 pm

@219 top dollar BMWs now that’s funny . They are assembled in the states . You should have a look under the hood and see where the parts come from lol . I bet you’d be impressed with a land rover . They are even funnier . Do you know who owns them now and is putting their parts in them . Brand names are meaningless and have been for years . You must be one of the last people on earth that doesn’t know this . And most of the cars on the road are leased . Geez. Everything you see is either smoke, mirrors or credit . No wonder even on Garths blog it’s tough to glean useful information but I’m thankful for what I did find .

#225 Keeping the Faith on 07.08.12 at 3:23 pm

@ # 192 ED from TO

Garth, selective censorship now?
Without explanation?
Have a nice time with YOUR blog!

This blog is always edited for gratuitous use of offensive language. You failed. — Garth

___________________________________________

We are lucky Garth does edit the posts, to save us from ourselves.

Think of it as a badge of honor, you’re not really a contributor until Garth has deleted you at least once.

Means you’re not trying or passionate or both.

#226 brainsail on 07.08.12 at 3:54 pm

#225 Herb

“Federal workers’ buyouts could reach $2B”

“Workers eligible for up to 82 weeks severance, plus retraining and pension breaks”

http://www.cbc.ca/news/politics/story/2012/03/12/pol-weston-public-service-budget-severance.html

#227 John G. Young on 07.08.12 at 4:13 pm

Hi Penpal,

Remember me? Probably not – I’m just one of the many, many people on this blog who could never hope to be as intelligent, masculine or successful as you.
But I remember you – you’re a self-described straight, white, male “Christian”, affluent with “ten million plus net worth friends” whom, you informed us, you often chastise for not meeting your (obviously high) standards of masculinity. Judging from post #193, in which you referred to another poster as an “insecure unmanly boy”, this clearly continues to be an obsession of yours, and I wanted you to know that I for one am relieved that you have not abandoned the cause – way too many little boys/girly men out there!!
Also, as you so accurately pointed out in that same post, “I don’t find it necessary to put down others in an attempt to self aggrandize”, nor are you “compelled to post obviously inflamatory postings to get a little ego stroke” – and that self-awareness and humility is just part of what I so admire and respect about you. I know that some readers might find these statements somewhat hypocritical (not to mention un-“Christian”), considering your use of “douche” (post #85), #87 “you don’t know f-all” (#87), “scum bag” (#89), “total loser” (#89), “epic loser” (#203), and of course “DELETED” (#192), but to those readers I say: do not confuse these with ad hominem attacks! Penpal obviously knows these posters personally, otherwise he would never make such statements!
Anyway, as your Number One Fan, it’s been a good day for me – nine posts from you so far today, with more to come I’m sure! In closing, I want to end with two quotes from you: reading them, it’s as if I wrote them myself, and I suspect other readers may feel the same.

#199: “I am content to reveal the faulty thinking of others and the inconsistencies of their lazy thinking by hanging them with the rope of their own words”

#193: “The ad hominem attacks…tell me all I need to know about this pathetic little frightened redneck boy.”

#228 John G. Young on 07.08.12 at 4:21 pm

#227 Keeping the Faith on 07.08.12 at 3:23 pm

“Think of it as a badge of honor, you’re not really a contributor until Garth has deleted you at least once.

Means you’re not trying or passionate or both.”

Bullshit.

John

#229 peter on 07.08.12 at 4:29 pm

I support and believe in 80% of what you write. However, we need to be clear about the rule changes. They mainly apply to high ratio mortgages. The 30 year mortgage is NOT “biting the dust” for conventional mortgages.

#230 Echo on 07.08.12 at 5:23 pm

#224- If you appreciate the way Penpal expresses himself YOU are the idiot, or perhaps you’re twelve.

What has he lied about? (this should be good…and remember, you need proof, not just an opinion to use that word…or right, you’re twelve.)

He dislikes the education ‘system’, and the teachers who are either too naive, or too self-absorbed, to go along with the idea of NOT teaching our children financial skills and other empowering intellectual skills. Duh. I regress…

Track 6 was an excellent analogy of herd mentality, which is also the reason for the coming economic collapse in Canada, amd which occurred because of our education system and the passive, ignorant teachers within it. Generally speaking, as a whole.

Even the rare incidents of a teacher who is special still has to follow the curriculum. Heck, if they’re anywhere from 25 to 45 they probably walked into a Bank and drank the koolaid.

Anyway, here’s to any critical thinkers out there. If they went through Kindergarten to Grade 12 in North America they, intentionally, weren’t taught those skills in “school”.
nor were they taught fundamental mathematics as it applies to income, debt, and LOGIC.

Do you realize how dumbed down a person has to be not to figure out something SO simple for themselves?

#231 TurnerNation on 07.08.12 at 5:39 pm

CRA cracking down on the people who earn the least.
Min wage for servers is even lower than regular min. wage. In other news, the 1% and many US corps. move offshore, for untold amounts of tax advoidance.

http://www.cbc.ca/news/canada/toronto/story/2012/07/08/toronto-canada-revenue-agency-pilot-project-tips-gratuities.html

A blitz by Canada Revenue Agency auditors on an unfortunate group of waiters and waitresses in one Ontario community has exposed “very surprising” amounts of unreported tips and gratuities.

The pilot project targeted 145 servers working in just four restaurants in St. Catharines, Ont., a blue-collar city on the Niagara Peninsula, south of Toronto.

Auditors reviewed two years’ worth of income and found that every individual had hidden some portion of their tips from the taxman, with about half reporting no tips whatsoever.

In the end, the blitz flushed out $1.7 million in unreported tips and gratuities — almost $12,000 for each person

#232 Grim Reaper/Crypt Speculator on 07.08.12 at 6:04 pm

Y’now…I like this Smoking Man….

I was tempted…y’know….but the dam logistics were too overwhelming.

I had planned for the strippers pole to break off at $1 /Pitcher nite on Sunday….when Smoking Man had his front row pew with the Biker $$$ launderers.

I promise..”cross my heart and hope to…y’know”…(he gets at least till next weekend).

#233 Ralph Cramdown on 07.08.12 at 6:48 pm

Banks caught red-handed.

Old – $4.3M Forest Hill foreclosure. Take a new picture, reduce the price and it’s a new listing. New – $4.1M Forest Hill foreclosure. 10 days on the market

Let’s be fair. They didn’t just take a new picture, they fired the old agent, hired a new one (one of Garth’s buddies from the R.E. roundtables), and dropped the price, strategically adding a couple of eights to attract some HAM.

#234 Herb on 07.08.12 at 7:16 pm

#228 Brainsail,

the MSN and we should keep the severance pay that is being bought out and phased out separate from job cut benefits due to PS reduction. The two are quite different and only produce the horror stories being bandied about when they are rolled into one. Some people will get both, since some long-serving public servants are becoming redundant. Some will get only the severance pay payout because they will continue to be employed. And some will see little of either.

I will chalk up another one for Harper: he is taking the lumps for ceasing severance pay and reducing the public service in one fell swoop, then getting on with government.

Blast Harper to hell, but do it for good reasons, such as bloating the PS to the exent that it now has to be reduced expensively to the level he started with.

#235 TimV on 07.08.12 at 7:33 pm

#231 Peter: Technically you are right, the 30 year mortgage is still around for >= 80% LTV. However, when we got our recent mortgage (first home), it is interesting that our mortgage broker immediately put us into a 25 year instead of the 30 year that we had originally planned during qualification. I presume he could have still found us something with a 30 year amort if we’d really wanted, but I understood it to mean that the 30 year was now harder to get even with the >= 80% LTV.

The HELOC size stayed at 80% minus outstanding principal, so banks don’t seem to have implemented the new HELOC restrictions yet.

#236 Keeping the Faith on 07.08.12 at 7:52 pm

#230 John G. Young on 07.08.12 at 4:21 pm

Time to self-prescribe … up the dosage

#237 PoorgEoisie on 07.08.12 at 7:56 pm

Whether you get on from 5 or 6 that train is taking all of you to the same place at the same time.
The victory exists only in the mind of the “winner”.

#238 Nostradamus Le Mad Vlad on 07.08.12 at 8:00 pm


#233 TurnerNation on 07.08.12 at 5:39 pm — “CRA cracking down on the people who earn the least.” — Which means only one thing — we’re just as brokedick as Greece. Ah well, the charade was too good to last, we’re outta money and the bills must be paid!
*
Banxters For the record, banxters have no brains. A brain is a useful tool, but we can live without banxters; Five min. clip “Trillions for war. Trillions for Wall Street. Pennies for taking care of the United States.” wrh.com. DC crumbles; Libor Banks potential trillions in lawsuits; 7:30 clip Consumerism as conditioning; Floating Away Angry brokers leave firms, along with blns.; Banxters focusing on short-term profits, not long-term solutions; Moving As happened a few months ago here, millions moved accts. to credit unions, and told banks where to shove it; Big Bump “Remember, to the private central banks issuing all the public currency as a loan at interest, “Growth” means the people of the world go deeper into debt.” wrh.com; Eliot Spitzer “As Taibbi explains, Barclays couldn’t have acted alone.”
*
The Toilet is back “Which sort of confirms that “Al Qaeda” (nudge nudge wink wink) have been working for the US Government all along.” wrh.com, and here, but Russian nuke bombers intercepted off west coast; Another US warship, slated for decommissioning like the carrier, has joined the fifth fleet (that’s the cheap way of getting rid of them — have someone else sink them); 4:14 clip Billary’s bluffing; Monsanto Why don’t they want their goo labeled? Monday’s Malware Meltdown Unplug the computer for a day; Beetroot Juice Add a little vinegar and it makes a nice drink.

#239 aaci-home dog on 07.08.12 at 8:52 pm

113…prairie girl….
Haha…reminds me of a very old joke…
What does Star Trek & toilet paper have in common…?
they both circle Uranus, searching out Clingons…

#240 mid-Ontario on 07.08.12 at 8:56 pm

#227 Keeping the Faith on 07.08.12 at 3:23 pm

“Think of it as a badge of honor, you’re not really a contributor until Garth has deleted you at least once.

Means you’re not trying or passionate or both.”
————————————————————–
Garth is also sensitive about challenges to instances where his position appears to have changed.
I appreciate that it is Garth’s blog and he has the final say. Good enough for me.

#241 John G. Young on 07.08.12 at 9:18 pm

#238 Keeping the Faith on 07.08.12 at 7:52 pm

“#230 John G. Young on 07.08.12 at 4:21 pm

Time to self-prescribe … up the dosage”

Wow. Too clever for me.

#242 Serbia - Vancouver Lady on 07.08.12 at 9:23 pm

#229 John G. Young

Good Humor…Love it ! :)

#243 John G. Young on 07.08.12 at 9:48 pm

#244 Serbia – Vancouver Lady on 07.08.12 at 9:23 pm

Well thank you!

Cheers,

John

#244 daystar on 07.08.12 at 10:03 pm

#236 Herb on 07.08.12 at 7:16 pm

I’m surprised you’re missing it. You only assume the government needed to prepay CS’s on retired/quit severance to phase it out. Think about it, severance for quit/retired (to a point with retired, there’s pension eligibility overlap there) was a weak union bargaining chip at best. It was a waste of taxpayers dollars to pay it out up front when the government could have negotiated for its removal all together at a later date. Couple this with a week future layoff severance and Harper’s reduced the reason why severance exists to begin with.

Where do you think its going to go from here? Perhaps severance doesn’t need to exist at all? Is that next, because severance for layoff’s, while great today, in the future will be pretty pityful for the next 10 years as a federal CS. Up to 10 weeks pay, big whoop. Lets just do away with severances entirely, it has so much meaning now and set the standard for the provinces AND private to follow… right?

They screwed this up, Herb. Good governments don’t pay out severance for employees that don’t severe, it weakens the pot for when they need it most and they shouldn’t pay for benefits that are outdated and unjustified, its just common sense at least from my perspective and thats what surprises me is that I know you to have common sense so whats up? Is it a personal thing? “I didn’t get benefits in my lifetime so what makes anyone else so special”, is it as personal and simple as that?

#245 betamax on 07.09.12 at 6:20 am

#215 Echo — yes, vitriol is ugly, but so is sycophancy.

#246 Echo on 07.09.12 at 9:43 am

If I’m not feeling self-congratulatory then I can’t be a s
ycophant. Stating a fact with respect to intelligence compared to a person capable of vitriol, and the fact that it referred to many readers of this blog says it all Basic intelligence isn’t something to boast about, and that’s all I claim to have.

If you’re referring to my comments about real estate law in Ontario with respect to the Banking system here… i’ll simply say that if you were/are a basket weaver and I wanted to know how to weave one I’d ask you to teach me.