The specker

“I have no idea,” he said. And I believed it. There he was, a piteous figure, rumpled and hunched on the passenger door of his 5-series. A 2010 model. Pathetic. “I had a firm deal, but it fell through. Now I’m getting fourteen housewives coming through every open house looking for damn decor ideas. Lookers. No action.”

Tony’s a realtor I met who bought a lot in North Toronto for $825,000, tore down the wizened bungalow that had stood there since the bombs fell on Pearl Harbour, and built one of those skinny, faux, baronial, stone-faced, staged, mini-mansions which tries hard to pretend it’s on a better street. Price: $1.5 million. Tony’s exposure (mostly borrowed): $1.41 million. It was a high-stakes gamble. And it’s going badly. I looked at him idly picking lint from his sunglasses, knowing it would get worse. He knows it, too.

Even in the traditionally high-demand areas of the nation’s mega-city, it’s like a light switch is being flicked off, street after street. Houses like his which would have sold in three or four days now linger months. Absolutely gone are the bidding wars I described in March, where the asking price was just a silly suggestion. Sure, it’s summer. Summers suck for MLS. But this is starting to feel like 2009.

I flirted with the idea of telling Tony what comes next, but thought better. He stared back up at the unscuffed stone steps and shiny wrought iron, in time to see a jiggling tube top and pink flip flops disappear into the foyer, rich in imported ceramics and dark faux wainscoting. He moaned. There is only so much torture one man may inflict upon another.

Of course what comes next is part deux in the feds’ war on housing. A month ago F murdered the 30-year mortgage, effectively raising borrowing costs by almost a full percentage point for those now forced into a 25-year loan. The elfin deity also ordered CHMC to stop offering insurance on mortgages for any house selling over $1 million. That means Tony’s buyer – if one ever materializes – will have to cough up at least $300,000 for a downpayment, plus $55,000 in land transfer tax for Toronto and Ontario, in addition to closing costs.

At a time when the jobless rate is rising, economic growth is faltering and even Bay Street investment bankers are dropping off the keys for the Targas, tossing $400,000 in cash for a skinny house with a $1.1 million mortgage and $10,000 annual property tax bill is an ugly thought.

Now we get the sequel. This second act comes from the bank cop, OSFI, which has mandated that the big banks make far-reaching changes in how they lend real estate money by the end of their current fiscal years – October 31st. They’re currently busy ironing out the details, and here are the four major changes:

First, home equity lines of credit will be pared back. Yes, again. F trimmed the amount you can borrow from 85% of your homes value to 80%. Now OSFI will hammer that back to 65%. If you want to borrow more in a HELOC, then the amount between 65% and 80% will have to amortized, like a mortgage, with blended payments of principal and interest. And where’s the fun in that?

The impact: big. HELOC use has expanded an astounding 170% in the last decade, and the bankers now have $190 billion in floating-rate home equity lines on their books. In fact, lines of credit have been growing faster than mortgage debt, as Canadians turn their houses into banks and use the money to make stupid. The two most favorite uses for HELOC money: renovating houses and buying rental properties.

This is the financial equivalent of marrying your sister. Don’t expect a good outcome.

Second, mortgages will be harder to get. The bank cop has decreed that borrowers must qualify not at the cheapo VRM rate, but “the greater of the contractual mortgage rate or the five-year benchmark rate published by the Bank of Canada.” That’s closing in on 5.5%.

Also skewering the first-time buyers who fuel the move-up market is the end of cash-back mortgages. Our ‘prudent’ banks have shamelessly been giving borrowers a kickback equal to the 5% downpayment required to get CMHC insurance. No more. Actual money is required, so you can imagine what this will do to demand for condos.

Finally, liar loans are officially gone. Those shifty self-employed people and unreliable commissioned salesmen will have to prove their income to get financing. Most banks have already canned their ‘self-recognition’ loans, but this erects a nice cenotaph.

On their own – shorter mortgages, high rates, tougher borrowing, less credit – the changes all make sense after a decade of bubbly excess leading to gasbag prices families can no longer afford. But the cumulative effect is explosive. This is, without a doubt, the beginning of a new phase. Developers, lenders and realtors know it in their bones, and their bank accounts. The future is troubled.

Without a doubt, Tony will sell for less than he risked. Probably the last spec house he will ever attempt. The loss, if he’s lucky, will be a hundred grand.

But the risk will be gone. Finally. Shifted onto someone more deserving.

183 comments ↓

#1 Gerry B on 08.12.12 at 9:32 pm

I sure hope that driveway picture is fake… or at least not any place where temperatures ever drop below freezing.

#2 Bob on 08.12.12 at 9:37 pm

I shed not a tear.

#3 Lost cash on 08.12.12 at 9:38 pm

Garth really your amazing!!!!! For a year I’ve had my doubts about your visions BUT I see now your the man!!!! Hook me up with a good advisor.

#4 Jeff in Leaside on 08.12.12 at 9:38 pm

#1 Gerry B – If the street ever floods, those garages will make dandy boathouses.

#5 T.O. Bubble Boy on 08.12.12 at 9:43 pm

Credit Bubble is to Asset Bubble
as
Credit Bubble Popping is to ?

#6 Keeping the Faith on 08.12.12 at 9:46 pm

“This is the financial equivalent of marrying your sister. Don’t expect a good outcome.”

CLASSIC!

Garth, will you be my sister?

#7 Guelphite on 08.12.12 at 9:47 pm

“You can’t make this s**t up!” Gotta love it when a real estate weasel is forced to eat his own dog food.

The sheer amusement value of this blog is beyond measure Garth… priceless.

#8 Vincent HRD on 08.12.12 at 9:48 pm

Climbing that driveway each night will be a harsh reminder of how far prices can and will drop. Does Kia make four wheel drives?

#9 Can it be? on 08.12.12 at 9:48 pm

This is a common story among speculators now… Amazing how quick things change! I’m not particularly popular with realtors these days either… And they hate this blog. Talking about the market is a very sensitive issue. Smart speculators are selling whatever they can even the homes they live in just to save themselves from financial ruin

#10 Grim Reaper/Crypt Speculator on 08.12.12 at 9:50 pm

WARNING:

Smoking Man (or his doppelganger) has escaped

PS : Do not buy Canadian Retread Prison Cells

#11 Wondering on 08.12.12 at 9:54 pm

I live in South Surrey/White Rock and am still amazed at prices that homes are being sold for today. There is still the HAM principle in play, and am wondering when this will change. Many of the homes that are purchased sit empty, or immediately are on Craigslist as rental properties. Many people are selling to cash in, and the market seems to be fairly active even in the dog days of summer. Garth – will this change, since many of the off shore investors do not seem to care about mortgages or HELOC’s – and no I tried (but too late) to see you in Vancouver……

#12 disciple on 08.12.12 at 9:56 pm

Garth – Kindly clarify the last sentence… Who is more deserving? And Pearl Harbour probably never happened, like the Kennedy assassination. Jimmy Carter is JFK.

#13 Sebee on 08.12.12 at 9:56 pm

Garth,

Will banks be calling in HOLECs from borrowers who carry over 80% currently? Or will they grandfather?

#14 TurnerNation on 08.12.12 at 10:00 pm

I get the picture. The driveway’s slope represents the coming yield curve changes!! ;-)

#15 BC Bring Cash on 08.12.12 at 10:06 pm

Does the rule change on helocs affect existing lines of credit at the 85% level? Will they be rolled back to the new rule of 65% maximum? If so that will create a whole bunch of hardship for people in this position having to amortize the difference instead of just making interest only payments.

#16 Richard on 08.12.12 at 10:06 pm

No offense but is tony stupid? All that risk for so little gain? He was better off shorting rim

#17 donald trump on 08.12.12 at 10:11 pm

How dare you garth trick these sheep into beleiving realestae isnt,t a safe bet . Its how i made my money tony the speculator will make his money by september no problem when us rich folk come back from august vacation .. eat crow !

#18 TurnerNation on 08.12.12 at 10:13 pm

Is the Targa still in production? I thought it was an older model.

Maybe Canadian Blog Watchdog can chart a Porsche and BMW index from

http://www.leasebusters.com/en/

Canada’s #1
Lease Take-Over Marketplace

#19 Loan money to anyone on 08.12.12 at 10:27 pm

I think it’s prudent for the Feds to tighten lending standards given the upcoming food shortage (see http://tinyurl.com/8n3y3q9). Prices are forecast to rise and the government needs to ensure that it’s citizens have money to buy food. To make matters worse, Canadians already have record personal debt levels.

As some people on this blog have pointed out, some Canadian food banks have already run out of supplies so there’s no room for error.

#20 Toon Town Boomer on 08.12.12 at 10:27 pm

It’s about time, even though this should have happened much sooner. I guess better late then never!

#21 Cory on 08.12.12 at 10:28 pm

I have talked to some realtirs (insert puke here) and they are all still cocky…in public anyway…that there will be loopholes found to circumvent all of these changes. I can’t see it unless alot more lying occurs, but who knows.

Still on fire in Calgary, prices still ridiculously high even though the oil biz is not that hot, restaurant patios full of yuppies with puppies buying $10 glasses of wine…..no signs of reality kicking in at all.

#22 Farfetched on 08.12.12 at 10:29 pm

Realtors, flippers and speckers were the ones in school that made you wonder how they were ever going to survive life after school. These short sighted and greedy individuals have fueled quite the mess we are getting into. I do feel bad for those young families, but they will make it through the better. As for the others, you will be able to find them at any given Denny’s at 6AM on a Saturday, with bloodshot eyes.

#23 This is Wonderland on 08.12.12 at 10:29 pm

Garth, will you hit GTA on your tour and if so can you book two nights, one east end the other west end.

Thank you.

#24 The specker | The Retiring Boomer™ on 08.12.12 at 10:36 pm

[…] As published in The Greater Fool […]

#25 bruce on 08.12.12 at 10:39 pm

There will come a time when equity qucikly evaporates, as it did in the US, when property appraisal reports are rejected by the banks for buyers interested in homes on streets that too many unsold homes along them.

#26 GTA Suburbanite on 08.12.12 at 10:39 pm

Garth, do you see Toronto or its suburbs getting hit harder? And which suburbs are especially at risk?

Thanks, much appreciated.

#27 Canadian Watchdog on 08.12.12 at 10:39 pm

Here comes those Burano “Sold Out” condo speckers flooding rentals on craigslist.

Alas, this is why Lanterra Developments only allowed the first 10 floors to be occupied, because now that sales are dead, new speckers are competing with developer’s unsold inventory, meaning once they start reducing prices, developers will have to follow since buyers will start seeing recent listings sold below the developers price.

Not to mention owners with units above the 10th floor just got thrown under the bus. It’s a race to the bottom now.

#28 detalumis on 08.12.12 at 10:42 pm

Why would Tony the realtor have bothered with all the work involved in building a custom house to make 90K in the first place and that’s assuming he got full asking price; he would make that much selling two wizened bungalows with a lot less stress.

The interesting thing with custom homes is that it’s a lot easier to sell the wizened bungalows for 825k than the mini mansion for 1.5 million, people who buy the latter are a lot more particular and most of them would rather build their own custom home to their own specs. In my particularly area the bungalows still sell quickly like within 1-2 weeks but the mini Mansions sit for months on end even and they sat for months on end during the height of the buying frenzy over the past few years.

#29 gtaguy on 08.12.12 at 10:43 pm

Off topic but still…Gotta love it. MSM blasted by a Nun over one-sided Syria reporting.

Who you going to believe?

http://www.irishtimes.com/newspaper/world/2012/0813/1224322099930.html

Guess you can’t hide the truth when its captured on video.

http://www.rt.com/news/syria-rebel-massacre-aleppo-627/

Never heard anything about that on my local tv news. Wonder why?

#30 Smoking Man on 08.12.12 at 10:47 pm

Touching story Gartho. But until I can get a boat slip and see red dots like diandelions on SFH on mls. I will not swallow the cool aid.

And I’m sure your old pal F and his buddy C are scratching there heads and saying wtf is with these stuborn owners. Are they stupid don’t they read the news.

Fat lady in 416 is anorexic

#31 Boomer21 on 08.12.12 at 10:49 pm

#12 Disciple, in which institution do you reside? They sure do allow you a lot of Internet time. Maybe you should ask them to up your meds so you don’t feel so anxious, just saying!

#32 cndnprncss on 08.12.12 at 10:53 pm

loving this blog! i just began reading this a few months ago, but now I find myself looking forward to your next post each day! You manage to mix in the reality (that so many out there prefer to remain blinded to) with a canny dose of humor and wit! Keep em’ coming! <3

#33 Smoking Man on 08.12.12 at 10:57 pm

DELETED

#34 buy low on 08.12.12 at 11:01 pm

Why would a realtor (Tony in this case) tell you, Garth Turner, how much over his head he is with his property – knowing he is going to get roasted on your blog. Doesn’t sound realistic. Also, most realtors li….errr…twist the truth.

I have a way. Nobody can lie to me, or they are smitten. And I was in disguise. — Garth

#35 disciple on 08.12.12 at 11:01 pm

#31 Boomer… Actually I’ve escaped the mental prison you are still in. Fear not, there are more and more of us each day. “How can you have pudding if you haven’t eaten your meat?”

#36 Piccaso on 08.12.12 at 11:04 pm

Better have a lift kit on that Chevy

#37 TRT on 08.12.12 at 11:14 pm

The downward effect seen on $1 million plus homes is a direct consequence of CMHC requiring at least 20% down. This brings average prices down.

The market on the low and medium side will be affected to a small extent with the elimination of cash back, qualifying rates. The big impact potentially could come from the elimination of liar loans. THIS IS A BIG IF. If they do it, then the market will significantly correct. Actually, CMHC should get income from CRA’s previous year’s tax return.

65% hELOC ensures those homeownerswho never took out a HELOC won’t be able to bail when a 35% correction comes. What goes up must come down down. They will have a front row seat.

What will happen to rent prices as people continue to flood into the country??

#38 White Rock Mom on 08.12.12 at 11:15 pm

F1220334 I looked at this spec house yesterday. This house a fine example of the extremely poor craftsmanship and you can buy it for the low price of $1,300,000 plus HST. The floors slope and the master bedroom isn’t big enough for a king sized bed. It is built to the finest level of quality in China. Built by Ham speculators for HAM. I hope they lose their shirt.

#39 Grim Reaper/Crypt Speculator on 08.12.12 at 11:19 pm

This is how Garth goes undercover to get the REAL scoop

http://www.straight.com/article-753536/vancouver/sarah-palin-lookalike-lisa-ann-will-strip-during-republican-convention

PS..don’t worry about Tony..name like that 115% chance Italian …125% of these have at least 3 homes before entering High School.

#40 Fartweezel on 08.12.12 at 11:22 pm

Rich……rich indeed !

#41 Boomer21 on 08.12.12 at 11:25 pm

#35 Disciple, whoa buddy you are definitely in the twilight zone, I should know because I am Rod Serling no I meant maybe Stephen King, shoot today I think I will be Isaac Asimov, oh well whatever! BTW I had meat and pudding today. Enough fun for one night. Great blog Garth.

#42 Smoking Man on 08.12.12 at 11:25 pm

#35 disip. Allways knew you where a floydian

#43 TurnerNation on 08.12.12 at 11:29 pm

$190 billion in HELOC funds! This is over $5000 – each – for every man, women and child in Canada. Baby did a bad, bad thing.

Home fatigue. Or is it a fugue. 1.85mill for a skinny semi infill facing a bleak industrial parking lot.
Y-awn.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12238645&PidKey=-1313150040

#44 FTP - First Time Poster on 08.12.12 at 11:30 pm

I have a way. Nobody can lie to me, or they are smitten. And I was in disguise. — Garth

Told ya that Inspector Clouseau costume would come in handy!

#45 Calgary Car Guy on 08.12.12 at 11:40 pm

My neighbours’ good friend from the Edmonton area was down on the weekend. He’s 30-ish, married and they have a toddler. His wife makes the money. He’s a job-hopper. About a year or so ago they sold their place in Edmonton and were buying another. I tried to talk him into renting to no avail. Anyways, he mentioned this weekend that he had a call last week from someone saying they were going to come out and appraise their home. Since he hadn’t asked for this he wanted to know why they wanted to do this. He was told it was requested by the bank. Then he finds out they’re going to get charged 500.00 for this unwanted appraisal! He was choked. The appraisal guy gave him a phone number to call to reach the appropriate person at the bank so he called it. The bank lady says yes, they do want an appraisal and yes, it’s charged to them but not to worry about paying for it right away–they’ll just add it onto his mortgage! Buddy got into an argument with her and he was eventually shown that it is stated in their mortgage that the bank can do this if they want. Bank lady then said they would split the cost of the appraisal with them. I’m not sure what this all means, if anything. I just thought it was an interesting anecdote.

#46 Thor on 08.12.12 at 11:41 pm

Tony made the fatal mistake by over paying for the tear down by 300K, he should have committed 1/3 third to land value, 1/3 to construction cost, 1/3 to gross profit. This are the correct metrics for this deal or any other deal to work no matter what the final retail price. if he could not achieve these minimum ratios than he should not proceed. In this case he failed because he thought he build the house cheaper and probable encountered unforeseen cost over runs.

#47 Canadian Watchdog on 08.12.12 at 11:46 pm

New post by RealNet explaining GTA’s condo inventory: http://informedadvantage.wordpress.com/2012/08/12/remaining-inventory/

What is not reported by TREB or any data research firm, is how many completed units are sitting in developer’s inventory. This is where the shadow inventory lies. If one searches MLS for a new condo project with unsold inventory, they are likely to find a few listings by price, size, floor, etc.

These listings are only developers showcasing a few model types for buyers, since it would be outright dumb to list every available unit on inventory, showing buyers there is ample supply. If any of these units are sold, it will just be replaced by new listing until inventory is sold off.

Don’t be fooled. The market is far worse then what’s being reported.

#48 Blasé on 08.12.12 at 11:49 pm

it’s hard to fathom how screwed hundreds of thousands, maybe millions of Canadians will be after oct. 31. most people have no idea what is coming. it’s like seeing the water going out and families playing on the beach, and then seeing the tidal wave on the horizon.

#49 John in Mtl on 08.12.12 at 11:51 pm

Greetings Garth and fellow readers,

Tell me something: I often see mortgage brokers (banks may do this too, I dunno) offering mortgages in which one’s personal debts (credit cards, car payments, etc.) are rolled into that mortgage, presumably to make the borrower’s life easier by making only 1 single payment per month and saving lots of money on interest payments from those other debts.

So, say you renew your mortgage of 300K (remaining), pile on 20K worth of credit card debt, and 15K of car loan, for a total of 335K. You get a mortgage loan for 335K instead of 300K. Say you also still need CMHC insurance. Does the CMHC insure the total loan of 335K or just the portion allotted to real estate (300K) ?

What I’m getting at is this: if someone goes belly up on this 335K loan, all the while living it up (on credit cards, fancy cars they can’t afford, etc.) as if there was no tomorrow, and we the taxpayers have to bail the bank out for the bad loan (via CMHC insurance) – that’s where I feel “life is unfair and unjust”! We have to pay for someone’s irresponsible way of living. If CMHC insures the total amount of the loan, that’s where F and C could also have also tightened the rules: CMHC insures the real-estate only, not the rest.

yeah I know, I know… “life’s unfair – get used to it!” (Bill Gates in a speech to young students, circa 1980-90).

Thanks for enlightening me on this :)

John

#50 ANONYMOUS on 08.13.12 at 12:07 am

That photo is obviously photoshoped, but I have seen driveways in California that were 1/2 as steep and tall as that one, and they were REAL.

#51 Roial1 on 08.13.12 at 12:08 am

43TurnerNation on 08.12.12 at 11:29 pm

Home fatigue. Or is it a fugue. 1.85mill for a skinny semi infill facing a bleak industrial parking lot.
Y-awn.

http://www.realtor.ca/propertyDetails.aspx?propertyId=12238645&PidKey=-1313150040

Golllyyy! You don’t know how bad that add makes me feel. All that land 17×96 ft.

Poor me only 400x150ft.

MY frikin garden is bigger than that!

Are you city people that stupid! 1.85 mil.?

hell I’ll sell you mine for 1 mil. and help you move in too.

No. come to think of it I’ll stay and continue to view the mountains from my back door. (Slidding glass)

Oh ya. Went fishing up Island yesterday. Brought home a limit of pink salmon (4) total cost of trip, under 30 bucks.

EAT YER HEARTS OUT!

#52 Freedom First on 08.13.12 at 12:17 am

Great pic and greater post Garth! Thank you for your blog, as I really appreciate it.

This is something I feel compelled to share with you and the blog dogs of this pathetic blog. I thought I was imagining it, but now it has become too real to be just my imagination. First, although I am a thinker and a watcher, who hates to give advice unless asked, in person, there has been people who I am close to, who I have mentioned your blog to as a very informative read. Well…..out of the blue, one has phoned me, a few days ago, telling me him and his wife are pretty sure they are going to sell their house. He did tell me he has been reading your blog. Another person, also close to me, has called me up saying she needs to talk with me asap. I know her and her hubby are worried, not from what she has said specifically to me, but just in general family conversations. I don’t push advice, but people who know me can tell I am very calm about life, see how well I live, and know I sold my house at a good time/profit, and I could care less about owning. My home is where I live. Period. Your blog is helping people Garth, and I think that is awesome, as I take no glee in seeing people ruined, as I know you don’t either. Even though what I see people doing is dumbfounding.

#53 mid on 08.13.12 at 12:17 am

#27 Canadian Watchdog
Here comes those Burano “Sold Out” condo speckers flooding rentals on craigslist.

Thanks for that link. It’s a real eye-opener. You always provide good info

#54 Claudius Emperor on 08.13.12 at 12:18 am

Does F have any idea of insuring stock market investments as well? Something like CIIC – Canadian Investment Insurance Corporation that would insure and cover all capital losses? Well there is nothing for the banks in this case so I guess he is not doing it.

#55 Inglorious Investor on 08.13.12 at 12:20 am

After the housing crash in the US, Americans were derided for using their homes like overstocked ABMs. Banks were chastised for lax lending practices, which included liar loans. Speckers were buying multiple properties which they couldn’t possibly afford in a sane, rational world.

In other words, the USA was Wackyland.

But now, it seems in Canada we’ve made all the same mistakes. What makes our episode with RE mania far more embarrassing however is that we had the benefit of the experience of our American cousins to help us avoid a mess in the first place. And yet, we still made all the same mistakes.

Welcome to Wackyland North.

Oh, and I wonder how long before we get reports of widespread fraud and other bad behaviours by Canadian mortgage brokers. You know, the guys who tell you that price doesn’t matter. Rather, all that matters is carrying costs, and whether or not you can somehow scratch together the monthly.

#56 Sask Girl on 08.13.12 at 12:23 am

It`ll be interesting to see what happens in Regina where `they` are saying 15,000 houses need to be built each year to keep up with population growth. I figure people will scram along with our high housing prices.

#57 randman on 08.13.12 at 12:23 am

Shiller 2008

“Some trends are persistent enough that they eventually attract a very wide pool of participants, as apparent gains amongst one’s peers eventually overcome the caution even of many inherently skeptical people. When they last long enough to overcome the caution of bankers, the result is easy credit to fuel the fire, and a blatant disregard for systemic risk. This is how the largest speculative bandwagons are formed – the ones that become manias and eventually lead to ruin for a large percentage of the population.

Prices are continually pushed up, irrespective of any reasonable objective measure of value, by those who think that it does not matter how much they pay for something if there will always be a Greater Fool who will pay even more. The evidence of pyramid dynamics where insiders and early movers benefit at the expense of later generations destined to become empty-bag holders – should be abundantly clear. The pool of Greater Fools is not limitless.”

#58 Soylent Green is People on 08.13.12 at 12:25 am

Why didnt the japenese bomb usa above ground gas tanks?

……..

President Roosevelt (FDR) provoked the attack, knew about it in advance and covered up his failure to warn the Hawaiian commanders. FDR needed the attack to sucker Hitler to declare war, since the public and Congress were overwhelmingly against entering the war in Europe. It was his backdoor to war.
FDR blinded the commanders at Pearl Harbor and set them up by –

denying intelligence to Hawaii (HI)
on Nov 27, misleading the commanders into thinking negotiations with Japan were continuing to prevent them from realizing the war was on
having false information sent to HI about the location of the Japanese carrier fleet.

http://whatreallyhappened.com/WRHARTICLES/pearl/www.geocities.com/Pentagon/6315/pearl.html
O
O
O
O

#59 Nostradamus Le Mad Vlad on 08.13.12 at 12:30 am


“Even in the traditionally high-demand areas of the nation’s mega-city, it’s like a light switch is being flicked off, street after street.” — Detroit Part II?

“This is the financial equivalent of marrying your sister. Don’t expect a good outcome.” — Speaking of incestuous relationships, are F and the Pequerettes enjoying the downturn?

After all, it was they who engineered a cheap money policy, encouraged liar loans etc. If C had raised the bar one to two per cent, chances are that this wouldn’t be happening to such an extent as it is now, and of course, it’s only just begun.
*
The banks? No, it’s the public’s fault. They’re all crooks; Italy Selling their history; Moscow Spending like the Pentagon; Speedy Decline thanks to austerity; Life Sentence You can check out any time you like, but you can never leave; Germany blocks Greece if targets missed; Positive Vibes Investing in the US. Now if the damn politicos would step aside; China’s export doldrums; GS and JPM what’s that stench? Economic problems growing worldwide; John Mauldin Links in; 29:39 audio clip Derivatives and New GD; Hedge Funds Doing the splits?

SS New retirees taking out less than they put in; Bak 2 skool Feggedaboudid; Sinking but good profits; California Mixed signals on RE, and RE upturn? Stocks Big gains; Borrowing costs surge; Three Budget Charts that Paul Ryan doesn’t want anyone to see.
*
Paul Ryan Romney’s choice, A better idea and this — Severe austerity; The Sun is a complicated piece of spaghetti; Underwater drones off Iran; Costa Rica Nice beaches, bananas and stones; Raw milk and Lemonade stands fast becoming illegal, as they are a major terrorist threat; Watercress Ally against breast cancer? 1:32 clip Things go better with Coca-Cola; Iran “Just discovered that a forum at Godlike Productions was talking about “signs of HAARP” being seen in the skies over Iran in July 2012 and wondering if it meant a coming earthquake.”

#60 Freedom First on 08.13.12 at 12:31 am

I meant to add to my post…#50…….also, speckers that I know personally, who know I am renting now, and used to preach to me about how no way RE in Canada will drop, have not only stopped talking to me about RE, they avoid me now, and when I do see them, they get away from me as fast as they can, even though I am saying nothing about RE to them.

#61 Nodebt on 08.13.12 at 12:36 am

Hey gartho!!!! Love ur blog, never miss a post ever since my dad told me about ur blog! Thanks for all ur free advice! I bought a jet boat in 2007, with my ex business partner, we were into the money pit for about 75k, I know what a waste of money! We only put 116 hours on it, last year my buddy needs money so wants me to buy him out so I gave him 13,500 and last week sold the tin can for 52,500! What a relief ditching the piece of junk! I feel like I just won the lottery! I basically broke even almost! So gartho guess what im doing with my new wealth? Boat was paid for when we bought it in 2007. Putting 20k in my amazons tfsa and 20k in mine and the rest will go into rrsps! They say the 2 best days of a boat owners life is the day he buys the boat and the day he sells it! If u think i should invest the coin in something else gartho let me know ! Thanks

#62 patiently waiting on 08.13.12 at 1:13 am

#11 Wondering on 08.12.12 at 9:54 pm

I live in South Surrey/White Rock and am still amazed at prices that homes are being sold for today. There is still the HAM principle in play, and am wondering when this will change. Many of the homes that are purchased sit empty, or immediately are on Craigslist as rental properties. Many people are selling to cash in, and the market seems to be fairly active even in the dog days of summer. Garth – will this change, since many of the off shore investors do not seem to care about mortgages or HELOC’s – and no I tried (but too late) to see you in Vancouver……
=====================================

I know the White Rock market very well, and while it is still expensive, and there is still some Chinese buying, it too is starting to role over. The link below will show 93 price reductions that I found in only a few minutes. There are many more hidden price reductions where the realtors are cancelling the listings and putting the listing back up with a lower price. I also found a few foreclosures (which I haven’t seen for awhile), one that had 3 mortgages registered against . . . LOL . . . rest asured, White Rock will not be spared in this real estate correction if you are willing to be patient . . .

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=625475348&s=BRC&t=BRC

#63 Once a Banker on 08.13.12 at 1:19 am

Now BoC Treasury Bills 1Y pays 0.83%. Canadian Bank’s HELOC rates are 3.50~4.0%.

Did you remember in 2009, suddently all the banks set their bank prime rates to Government prime + 1.00%?
HELOC rate, or VIRM rates are based on “bank’s prime” + 1.00%, discounted to 0.50~0.80% maximum.

Banks are still hungry for short term lending business.
But if bank lending policy just trim the applicant who were not supposed to be on their mortgage book – High risk-, that will give major impact on the RE market, ’cause there are so many!

#1: Are banks going to bring back bank prime rate to Government Prime ni future?
Why no media is covering this any more?
Short term rate historically low, cost is too high for the banks?
I know, in the mortgage business, the answer is no.
Investment business like insurance book, yes.

#2: I agree with Garth, asset based allocation.
90 – you age = your fixed assets %.
Pretty much, same for Equity portion inside liquid assets.
(if you are 70, 20% equities in your portfolio)

I would like to add, cash-flow consideration.
Banks will give you loan up to 42% of “all debt service” on your gross income.
As you know, if you are making above $70K, 40%+ already due for your income tax.
Since TDS doesn’t include your Child care cost (this is big), cell phone bill, Pension contribution, “borrowers” must put those into the calculation when applying for the loan.

Also, in Canadian loan system, banks are looking at your 3Cs only. That is Credit, Capacity, and Capital (= downpayment).
There aren’t any criteria to review how stable your job is, what is going to happen to your pregnant wife’s income who is wiling to have 2nd or 3rd.
– In some other countries, type of occupation is important when granting the loan

What do you think B.C. Real Estate agent applying for the loan now, his last 3 years average income is $200K.
In the loan paper, he is good up to $7,000 monthly payment. (All home cost, Mortgage plus other debts – including 7Y car loan)
Isn’t it insane…?

#64 Margaret on 08.13.12 at 1:22 am

You stopping in Edmonton?

#65 a prairie dawg on 08.13.12 at 1:25 am

#49 John in Mtl

Greetings Garth and fellow readers,

Tell me something: I often see mortgage brokers (banks may do this too, I dunno) offering mortgages in which one’s personal debts (credit cards, car payments, etc.) are rolled into that mortgage, presumably to make the borrower’s life easier by making only 1 single payment per month and saving lots of money on interest payments from those other debts.

– — –

“saving lots of money on interest payments”

Getting rid of high interest payments is wise. But adding them to long term amortized debt just spreads them out over decades reducing that ‘bargain’ by compounding.

But banks are happy to sign up the math challenged whenever possible.

I personally know someone doing exactly this. Has been for many years now. Every few years, they roll some new personal debt into the mortgage renewal.

The result is a debt standstill for 10 years. Owes the same amount now, as a decade ago. Basically renting money and a house for 10 years, with no forward progress at all on repayment.

Some people call that living…

I don’t.

#66 Bo Xilai on 08.13.12 at 1:41 am

The scuttlebutt is OSFI’s mandated changes are being implemented sooner than the October deadline… I confirmed with a credit union contact in BC these changes are already in the process of being implemented.

http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/08/the-heloc-clock-starts-ticking.html

#67 Scott in Gibsons on 08.13.12 at 2:19 am

Went garage saleing on Saturday and noticed more “moving sales” than normal. Most were moving into smaller homes (cashing out?)

#68 Mr Buyer on 08.13.12 at 2:20 am

#11 Wondering on 08.12.12 at 9:54 pm
I live in South Surrey/White Rock and am still amazed at prices that homes are being sold for today. There is still the HAM principle in play, and am wondering when this will change. Many of the homes that are purchased sit empty, or immediately are on Craigslist as rental properties. Many people are selling to cash in, and the market seems to be fairly active even in the dog days of summer. Garth – will this change, since many of the off shore investors do not seem to care about mortgages or HELOC’s – and no I tried (but too late) to see you in Vancouver……
…………………………………………….
Nice Realtor commercial. Less likely with each passing second

#69 Mr Buyer on 08.13.12 at 2:22 am

#30 Smoking Man on 08.12.12 at 10:47 pm
Touching story Gartho. But until I can get a boat slip and see red dots like diandelions on SFH on mls. I will not swallow the cool aid.

And I’m sure your old pal F and his buddy C are scratching there heads and saying wtf is with these stuborn owners. Are they stupid don’t they read the news.

Fat lady in 416 is anorexic
…………………………………………………….
Hey Smoking man, have heard? TO is ON FIRE

#70 Devore on 08.13.12 at 2:28 am

#45 Calgary Car Guy

Buddy got into an argument with her and he was eventually shown that it is stated in their mortgage that the bank can do this if they want

No one reads. Eyes just glaze over, and the hand is guided to the dotted line.

Some standard mortgage terms:

all costs, charges, expenses and legal fees (between solicitor and own client) which may be incurred by the Bank in:
(i) inspecting and appraising the value of the Mortgagor’s Interest;
(ii) investigating title to the Mortgagor’s Interest;
(iii) negotiating, preparing and registering this Mortgage and other necessary Instruments;
(iv) taking, recovering and keeping possession of the Mortgagor’s Interest;
(v) all other actions and proceedings taken in connection with or to realize on the security of this Mortgage, or to protect or enforce the Bank’s rights hereunder (including the Bank’s cost of the time and services of the Bank’s employees); and
(vi) preparing and executing a discharge of this Mortgage.

You’re also required to fully insure and keep up to date your house against loss and damage, with loss payable to the bank, and with an insurer and terms approved by the bank.

…against such insurable risks and perlis as the Bank may direct including, without limitation, insurance against loss or damage by fire and other risks and perils to the Collateral and all other improvements now and hereafter on the Lands… effect such insurance with such insurer and on such terms as may be approved by the Bank with loss payable to the Bank in priority to every person…

Lots of other interesting stuff in there too. All homeowners who signed their mortgage without reading it should reserve an evening in front of the electric fireplace and a glass of port and peruse the fine print on their copy.

#71 Mr Buyer on 08.13.12 at 2:32 am

#37 TRT on 08.12.12 at 11:14 pm

What will happen to rent prices as people continue to flood into the country??
………………………………………………………….
If I may field this one…Rents will drop. They dropped in Japan and they remain low to this day. Only the higher population density areas of Japan have rents over 1k per month for 2 bedrooms. In my area, just down the road from me a brand spanking new 3 bedroom house rents for around $900 and 250k people live in this rural town. Low income is low income. In the absence of free borrowed money it will become increasingly difficult to find people with cash on hand to pay delirious rents these horrendous mortgages dictate. People will live much longer than mortgages can be carried to find that golden renter even in an expanding pool of renters. Just watch. Bubbles are simple life forms, they inflate, peak and the target asset crashes.

#72 R. Olausen on 08.13.12 at 2:34 am

At the very least,Carney and F. are the game riggingest pair ever appointed to their respective august posts.

#73 45north on 08.13.12 at 3:32 am

There he was, a piteous figure, rumpled and hunched on the passenger door of his 5-series.

best writing ever Garth – and I mean your whole post!

ya gotta realize that up-to-now most speculators have got out clean – including my brother-in-law

Gerry B: I sure hope that driveway picture is fake… or at least not any place where temperatures ever drop below freezing. I see deciduous trees without leaves – I would say that sub 0° C is normal, Piccaso it’s Picasso actually : Better have a lift kit on that Chevy my thought exactly

Cory: realtors are still cocky even as they siphon gasoline from cars parked at Walmart

Bruce: There will come a time when appraisal reports are rejected that time is almost upon us

Blasé it’s like seeing the water going out and families playing on the beach

yeah it is

#74 Mr Buyer on 08.13.12 at 3:33 am

Here is a little something for the leave the kids with a babysitter types (I look like the old guy in the animation)
http://youtu.be/OzwBHP3nnNM

#75 TimV on 08.13.12 at 3:35 am

There’s an awful lot of spec homes where the gross profit margin that I (albiet a non-pro) would guess at exceeds 15%, especially if the lot and zoning let you build two semis rather than one detached. Tony might take a year or two off, but I bet he tries again, eventually.

#76 Mr Buyer on 08.13.12 at 3:37 am

Like a million years ago I applied for a job at a nursing home and the manager took one look at me and figured he could train me on the job as an orderly. Anyways I provided total care fore 10 patients a day and this video nicely sums up what I came away with from the experience
http://youtu.be/-ZJDNSp1QJA

#77 eagle eyes on 08.13.12 at 3:39 am

House prices prior to 2006 have more than doubled. So even if prices drop by 40%, you’ve paid off your mortgage, you’re okay.

#78 new-era on 08.13.12 at 3:43 am

Interesting article about what germany thinks of Canada’s debt model

http://www.theglobeandmail.com/news/politics/why-germany-shuns-canadas-debt-model/article4478005/

#79 falling property taxes? on 08.13.12 at 3:53 am

Here’s a question:

When real estate prices inevitably fall, will property taxes follow suit?

#80 eagle eyes on 08.13.12 at 4:11 am

Here in the fair Province of BC: Whistler RE is like an abandoned child, sad and lonely. Richmond is like an old spinster holding onto hope that some rich dude will come along never to compromise for any less. It’s already looking quite bleak here. Let’s just hope it’s the summer doldrums.

#81 new-era on 08.13.12 at 4:25 am

With food prices expected to rise by 4% or more next year.

Canada better think of what it should do with interest rate.

Its a catch 22 situation, raise rates and housing market will collapse. Don’t raise it and inflation will eat up the Canadian Young-em’s

#82 Buy? Curious? on 08.13.12 at 4:40 am

Garth, great post! The best I’ve ever read! Bravo!

I’ve got the polar opposite story to the emails you receive about how a couple, mid 30’s, combined are making $200k, have $80k in savings and are wondering if they should buy a 5 bedroom house in Leaside because they have a baby on the way (I hate those emails so much!). An ex-girlfriend (I have many) called me up to chat. She came right out and told me, no small talk or anything. They were in the middle of renovations to their house in Leslieville when her husband lost his job. They have been living on their reno budget for the last few months but they are close to running out of cash. So they’re going to try to do the bear minimum in renovations, rent out their place and move back home with her parents. She’s worried that her husband may not find work soon and may fall into a depression. I suggested to her that we meet up for drink on Thursday, maybe share a bottle of Rose’ down by the Boulevard Club, my treat. Could this be a sign of things to come? I don’t know but when ex-girlfriends start call me up and agreeing to have drinks, I think it may be the beginning of the End. The Great Canadian Depression is right around the corner!

http://www.youtube.com/watch?v=s9siMXbuc5o

#83 Dontcallmeshirley on 08.13.12 at 7:00 am

“the greater of the contractual mortgage rate or the five-year benchmark rate published by the Bank of Canada.”

———-
You omitted the beginning of the guideline

“for all variable interest rate mortgages, regardless of the term, and fixed rate mortgages with a term less than the standard five-year term,”

A 5 yr fixed at 2.5% below the “benchmark” is widely available.

Your point incorrectly focuses on rate, when instead it should emphasize the penalty of closing obliged by a fixed mortgage.

#84 T.O. Bubble Boy on 08.13.12 at 7:41 am

Almost half of Canadians can’t save a penny:
http://www.theglobeandmail.com/globe-investor/personal-finance/45-of-canadians-dont-set-aside-funds-for-emergency-expenses-poll-finds/article4478289/

Since 70% of households own RE, there seems to be some overlap between the two groups (i.e. at least some correlation between owning a house and being broke).

The comments section should be interesting…. so far, the #1 ranked comment basically argues “why save when you can HELOC?”.

#85 bigrider on 08.13.12 at 7:41 am

Garth, not sure how aware you are of this, but the madness that is occuring in the private first and second mortgage business is astonishing.

I believe that even with the bank changes and the recommendied OSFI changes, the amount of private lenders willing to give first and second mortgages (seconds as high as 15% !) is going to keep this RE bubble floating longer than you might think.

I’m surprised that with all your writings about speck buyers of RE, you have never addressed the risks of the speck private lenders of mortgage money. Money which would have normally found it’s way into financial markets now finds it’s way, through RE lawyers and agents, into the RE bubble.

#86 Aussie Roy on 08.13.12 at 8:09 am

Aussie Headlines

No sub-prime in Australia, our banks are the envy of the world ——— Yeah Right…

A WA mortgage broker who got rich by “fudging figures” has blown the whistle on the banks that conspired in Australia’s own sub-prime mortgage scandal.

In 2007 Kate Thompson was WA mortgage broker of the year. Now she is facing fraud charges.

It is alleged Mortgage Miracles, in Canning Vale in Western Australia, obtained investment loans for customers by using falsely inflated earnings and assets.

Ms Thompson admits that is exactly what she did.

“I would get upfront commission, I would get a trailing commission. I was probably earning about $5 million a year. It was great. It was wonderful. But it was all a lie,” she said.

But she was not alone.

http://www.abc.net.au/news/2012-08-13/mortgage-broker-blows-whistle-on-big-banks/4195920

It was DIFFERENT HERE until it wasn’t..

Aussies paying off debt faster than ever

PEOPLE are paying off their debt faster than ever, says Australia’s biggest bank.
Westpac’s acting chief operating officer, Jim Tate, has told an inquiry in Sydney that while Australia had high household debt, people were anxious to pay it off because of the financial downturn.
“The behaviour in the mortgage books currently is that people are paying off debt faster than we have ever seen,” Mr Tate today told the Senate inquiry into the banking sector in the aftermath of the 2008-2009 global financial crisis.

http://www.news.com.au/money/cost-of-living/aussies-paying-off-debt-faster-than-ever/story-fnagkbpv-1226446657337

#87 TurnerNation on 08.13.12 at 8:15 am

Cdn Watchdog I checked kijiji for Burano. 43 units. Could be same ones or different.
(Craiglist is so Web 1.0…).

http://toronto.kijiji.ca/f-burano-real-estate-apartments-condos-City-of-Toronto-W0QQAdTypeZ2QQCatIdZ37QQKeywordZburanoQQLocationZ1700273QQisSearchFormZtrue

#88 TurnerNation on 08.13.12 at 8:25 am

#45 Calgary Car Guy on 08.12.12 at 11:40 pm

Scary. In Soviet Canada, house appraise you!

#89 Steven Rowlandson on 08.13.12 at 8:41 am

Who is the genius that designed those driveways?

#90 Form Man on 08.13.12 at 8:45 am

#79

answer is no. property taxes are set by the mill rate. if real estate values fall, the mill rate goes up. property taxes will continue to increase with inflation.

#91 disciple on 08.13.12 at 8:51 am

#42 Smokes… Yes, I’m a closet Floyd-ian. Greatest band and guitarist ever… Money and Keep Talking are the themes of this blog, no? Hey You and Comfortably Numb, man, that is an extension of everything we’ve been saying here…

I’ve got a shocking post on Warren Buffett I’m working on today, you can’t miss this one…

#92 disciple on 08.13.12 at 9:01 am

#58 Soylent… It’s much more monstrous than that. Hitler wasn’t a real person, it was a character played by Kermit Roosevelt. He also played Walt Disney, whose empire now controls billions of minds across the planet. Break free. Your article links to Michael Rivero’s site, who I’ve shown is a fake character as well… just so you can’t say you were never told…

#93 Sebee on 08.13.12 at 9:09 am

Most incredible email today in my inbox. Seems everyone not offers investment advice! Seriuosly, screw ETFs, Bonds and gold. Gucci shoes is where it’s at! Actually they suggest you invest in belts and bags – here is the text. I enjoyed the laugh, maybe you will too.

From: [email protected]
Subject: Investment Pieces

Set the right tone this season with Gucci accessories. Impeccable craftsmanship, exquisite leathers and flawless design make our shoes, bags and belts investment-worthy pieces. In other words, luxury essentials for men who set the agenda, style and otherwise.

#94 Dontcallmeshirley on 08.13.12 at 9:26 am

@ #84 bigrider

“…you have never addressed the risks of the speck private lenders of mortgage money”

—————

So true, those little “real estate secured” ads frequently appear in the Globe & Mail.

I wouldn’t have thought folks with money, who read the Globe, would wager $$$ on this sort of thing.

No one under 30 even reads a newspaper. It’s sad that older people, who should know better, trip over themselves to put money into second mortgages.

#95 bigrider on 08.13.12 at 9:37 am

Ok, now I think I know why Garth is no comment on the rampant private mortgage lending/speculating that is going on in the GTA.

How much have you lent out privately for mortgages oh bearded oracle?

#96 The American on 08.13.12 at 9:46 am

If you REALLY want to real in this bullshit game in Canada with the overinflated housing market, you need to stop insuring mortgages up to $1,000,000. Frankly, that’s beyond ridiculous, and far from prudent or conservative. Even at peak in the U.S., the conforming limits never exceeded $670,000. Conforming loans in the U.S. have returned to the norm and are covered in amounts up to $417,000 nationwide, except for a handful of high-cost areas, where the amount may go as high as $565,000. For non-conforming loans (over conforming limits), nearly all of them are required to be portfolio loans that the bank must hold on its balance sheet (or sell to another bank) and are not covered by FMAC and FNMA (essentially the CMHC). You cannot stop the insanity if you do not hold the lender (the bank) accountable for at least SOME of these poor practices. A bank has to have some “skin” in the game, otherwise there is no incentive to do the right thing. In Canada, all the banks are mass subprime lenders, and its only a matter of short time before the public figures that out.

#97 Tonino, Nonno Nicola's Grandson on 08.13.12 at 9:52 am

#84 Big Rider

“Garth, not sure how aware you are of this, but the madness that is occuring in the private first and second mortgage business is astonishing.”

Nonno is so busy with the garden these days, he has asked me once again to respond to your post. Plus, Nonno’s English is even worse than Smoking Man’s. First, the private lending business worked well to date because in the credit bubble extraordinaire that we witnessed, money could be repaid back to the private lender because greater fool zombies were plentiful. The landscape has changed Big Rider and there are going to be many, many getting burned in the private lending business. Past results do not indicate future returns saith Nonno. Further, private lending fraud is huge and Nonno knows of not one, but two lawyers who were disbarred for mortgage fraud. Check out the disbarred lawyers from the Law Society and see how many were disbarred for mortgage fraud.
Finally, Nonno says to tell you to stay the “hella awaya from da morgagee privati”. Gotta go, Nonno is yelling from the garden.

#98 Alberta Guy on 08.13.12 at 9:58 am

Brad J Lamb speaks about Toronto condos being “not good for a city” at 07:50 into program

later he says about the condo business…”its a business and your grinding out weiners”.. mustard anyone?

http://bcove.me/qzcqhck7

#99 big town on 08.13.12 at 10:01 am

I had no idea a lot in North York goes for 825k….I must say I really live in a cave. My experience back in Nanaimo in the 1990’s provided us with a semi-ocean front lot near Departure Bay for just under $30,000 including services so I am so out of date. Now that price included all the CITY SERVICES and I know in the GTA city services tacks on a big $25k more or less to the bill. Canada is a big country and there are real big regional differences in lot prices and city services costs.

#100 Guan-Di on 08.13.12 at 10:03 am

#83 T.O. Bubble Boy

The problem is, people don’t realise that paying off a one time emergency, like a car repair, with debt creates a chronic emergency: indebtedness! But most people don’t see debt as being as dangerous as it really is… yes, if used properly, debt can be a very useful tool, but like so many tools, if you don’t know how to use it, it can cause serious damage!

#101 2centsCdn on 08.13.12 at 10:04 am

I hate to say it … but I’m not entirely in disagreement with smoking Man. I agree TO, Vancouver and Calgary condo’s will take a huge hit in the next few years (starting now). But the SFH I’m not so sure. Up here in 905 land (a couple million people living 30 to 50k north of TO for those of you who don’t know the area) …… it seems the number of SFH’s for sale is low. Not as many For Sale signs as I thought there’d be by now. I think many are going to try to weather the storm and get back to “normal life”. It seems the $800 to $1.2 million newer homes are log jamming and seem to sit for sale a long time ….. many of these are the people with the 4, 5,600K+ mortgages …. I think these “upwardly mobile” (leveraged to the tits) 30 and 40 something’s know they are balls to the wind (and may be toast already) ….. but all in all ….. I don’t see mass panic across the board yet. Everyone is keeping a stiff upper lip (sellers and agents). I also know of three fairly well known and regarded real estate agents in this town who have quietly and quickly down sized their personal homes. What does that tell you? One bragging how she “stole” the smaller place she bought (22% below asking price). Smoking Man .. I agree there aren’t a wall of red dots on the SFH chart in GTA .. but a sh!t storm is slowly coming, there will be.

#102 Ret on 08.13.12 at 10:08 am

My guess is that the private lenders will vanish if they haven’t already. Who would want to risk taking back a property worth thousands less in a deteriorating market? VTB mortgages could be as equally financially lethal.

A few potential buyers are asking for vendors around McMaster to take back mortgages on student rental properties. “I really want to buy but the new rules are making it hard for me to qualify for a mortgage, blah blah blah.”

Nice try. After they milk the rents for 3-4 years and after their kid graduates, if they even have a kid going to Mac, they default and hand back the keys. Seeya later sucker.

#103 John on 08.13.12 at 11:12 am

Garth wrote:

“Tony’s a realtor I met who bought a lot in North Toronto for $825,000, tore down the wizened bungalow that had stood there since the bombs fell on Pearl Harbour, and built one of those skinny, faux, baronial, stone-faced, staged, mini-mansions which tries hard to pretend it’s on a better street. Price: $1.5 million. Tony’s exposure (mostly borrowed): $1.41 million. It was a high-stakes gamble. And it’s going badly. I looked at him idly picking lint from his sunglasses, knowing it would get worse. He knows it, too.”
——-
It’s a good ( and well-written) story, but does Tony know ( or care) how Canada ( and Australia etc.) got into this DYNAMIC?

You may not want to deal with this now ( like Tony and the whole ecosystem), but ( as you can see), reality isn’t driven by that.

And nobody is different or better or smarter in this. The bottom line is human nature. There is comfort in saying how things are…the fear comes from trying to control what can’t be controlled.

The real estate issue is not local…and especially since 2002. “Global ponzi chips”…is the reality.

#104 esoteric on 08.13.12 at 11:22 am

@ #13 Sebee

The banks will not “call in” the excess 15% over and above the 65% LTV however clients WILL be forced to lock that into a mortgage portion at current posted mortgage rates and terms.

This means they will need to start paying principle as well, not only interest and their rate could be higher.

The government was going to roll this out in October but rushed in for this week and sortof caught all of us at the banks off guard.

It will squeeze over-leveraged buyers.

#105 Arthur on 08.13.12 at 11:27 am

#49 John in Mtl

With the new CMHC refinancing rules the maximum loan to value ratio is 80% for refinancing and lower for HELOC. There is no requirement for CMHC insurance if you own 20% so there should not be much risk for tax payers. CMHC is still covering people who refinanced under the old rules however so there is some risk for existing loans.

#106 Sebee on 08.13.12 at 11:34 am

#13 Sebee on 08.12.12 at 9:56 pm
Garth,

Will banks be calling in HOLECs from borrowers who carry over 80% currently? Or will they grandfather?

>
More important question should have been; if your house drops 20%, must the banks call in the HELOC to maintain 65% or 80% ratio?

#107 Canadian Watchdog on 08.13.12 at 11:34 am

#86 TurnerNation

Craigslist and Kijiji receive the same syndication feed from agents and brokers that use automated listing services. Craigslist had 41 unique listings while Kijiji had 39 for Burano.

The numbers vary depending on duplicate listings.

#108 bigrider on 08.13.12 at 11:35 am

#90 Disciple and #42 Smoking.

As Floy dians you should both realize that ‘Time’ is most significant of all the songs.

“Kicking away the moments that make up…

#109 bigrider on 08.13.12 at 11:39 am

Tonino, nonno Nicolas Grandson.

Definitely staying away.

Ask nonno how his tomatos are this year in the garden. Not enough rain so my dad’s garden yielding notta to many..

#110 Canadian Watchdog on 08.13.12 at 11:52 am

Here we go…. Australian mortgage broker blows whistle on sub-prime scandal http://www.abc.net.au/news/2012-08-13/mortgage-broker-blows-whistle-on-big-banks/4195920

You’re next Canada.

#111 45north on 08.13.12 at 11:52 am

2¢Canadian: Up here in 905 land (a couple million people) it seems the number of SFH’s for sale is low.

but as you say

a shit storm is coming

#112 Dupcheck on 08.13.12 at 11:53 am

The KIA’s engine was not designed to pump oil to it on that type of sloped driveway. It will burn!

The above sentence can be translated in many meanings.

Only a military hummer can make there. Which means we are in for some serious trouble.

On the positive side that home will not flood easily.

#113 Rod on 08.13.12 at 12:10 pm

#68 Mr Buyer on 08.13.12 at 2:20 am
I live in South Surrey/White Rock and am still amazed at prices that homes are being sold for today. There is still the HAM principle in play, and am wondering when this will change. Many of the homes that are purchased sit empty, or immediately are on Craigslist as rental properties. Many people are selling to cash in, and the market seems to be fairly active even in the dog days of summer. Garth – will this change, since many of the off shore investors do not seem to care about mortgages or HELOC’s – and no I tried (but too late) to see you in Vancouver……
…………………………………………….
Nice Realtor commercial. Less likely with each passing second
__________________________________________________________________________________________

Not sure of your comments – I am far from a realtor – but a long term resident. I am watching our neighborhood slowly change from young families to houses sitting empty since they are being purchased for an investment not to be lived in. I hope things will change…..

#62 Patiently Waiting – thank you for your comments and insight!

#114 truth hammer on 08.13.12 at 12:11 pm

Well Garth..you assume that Tony will find a buyer at or above the cost of development…….I have seen many instances where this turns out not to be the case. In fact…Tony’s just a rank amateur in a field awash with multi-unit holders of ‘professional builders’ if he has only one property on his hands…the average is four to six….those are the guys whose sphincters are tightening so quick that the valley at night sounds like a deep divers underwater squeeze.

The ‘builders’ are generally gangs/jv’s that have been in the market only as long as the market has been going up….they are overextended to the nines…..with four spec houses for ex…the entire profit is generally tied up in the last unit……..this willc reate an enviornment where guys like Tony will have to dslash the price of his unit to meet the banks demands to repay the COC loan……as much as 10% per month until the unit is sold…depending on his personal standing with the bank….if he’s a one shot deal and he’s all in….the bank will likely kick him in the nutz to get their money back.

Look for builders unit prices to come tumbling down in the near future…..down markets can last as long as 5 – 7 years and then go sideways into a troughing period for 2 or more years.

Look for lots of phony incentives to flood the market like cars and trips….don’t fall for any of them….the only thing you should focus on is price.

This is all bad news for new buyers of record who purchased in the last three years at the peak of the market……..the forced sales of new units will crater the stats on prices and bring ‘average prices’ down like stone in all area’s ……in the burbs…..where 5% down was king….the builders lots will come down below purchase cost retail and flush the newbies ‘equity’ down the toilet………we can expect to read about the masses being ‘underwater’ by the end of the year……spring ’13 will be a bloodbath for the refi market for any who can’t afford to re-up to a fixed rate.

This will be the death of the spec market especially in Vanc and TO for years.

#115 Gunboat Denier on 08.13.12 at 12:35 pm

98 Bigtown – Semi-oceanfront? I gotta call ya on a typo or failing memory. I dont believe you could purchase a lot in Departure Bay for that in the 90s. 80s maybe, but
the 90s? Sure you werent in Harewood?

#116 Sandra on 08.13.12 at 12:36 pm

Garth,

I second #23 Wonderland’s suggestion. If possible, can you make an East and West end event happen for Toronto? You know they’d be booked solid.

Cheers.

#117 Tony on 08.13.12 at 12:44 pm

Tony will probably drop about 325,000 dollars.

#118 Ex-Edmonton Mortgage Broker on 08.13.12 at 12:51 pm

#113 truth hammer on 08.13.12 at 12:11 pm

the absolute truth spoken! i know so many amateur “builders” in toronto who couldn’t even turn a profit when the times were good! now? forgetaboutit

was approached by a one of these ” all in types” building a $15m palace in toronto and needs a $5m private first. hahahaha. hey, only 30% LTV he chirped. it’s no risk at all. this is his grand retirement scheme. make $3m on the sale and call it a day. methinks there might be a hole or two in that plan.

i’d happily broker the deal between him and any private lender who’d be idiot enough to hand over $5m. hey, what do i care, it’s not my money. i wouldn’t lend him a red cent from my own stash. no sir.

if you think toronto is amateur, you should see the sorry excuses for tradesmen here in Alberta. fresh off the boat, never laid a brick or hammered a nail in their lives, and working on custom estate homes. scary….

#119 Canadian Watchdog on 08.13.12 at 1:13 pm

Follow real-time US inflation rate here. Founded and created by MIT professors.

#120 jesslyn on 08.13.12 at 1:17 pm

I am curious to know what happens if/when particular markets crash-will speculators not just jump in and start buying up as investment properties again?

Is this not what we are seeing in places like California, Miami, Las Vegas etc? The traditional homebuyer is not purchasing in these places and the market is experiencing growth due to investors buying up wholesale.

Does this signify that another correction is on the way for particular markets in the states? Especially due to a lack of traditional buyers in those cities or when Canadian capital (investor dollars) is compromised due to changes in HELOC regulations, or simply overextended buyers and a Canadian market that is correcting ?

#121 truth hammer on 08.13.12 at 1:19 pm

#89 FM…..quite right..socialism and the nasty entrenchement of legacy contracts ensures that the fat sucking greed of the civil service will continue regadless of any reduction in property values. As opposed to other jurisdictions Canada’s tax pot is a magic black hole for the elite unions to swill from. As opposed to elsewhere where a finite amount is collected and then disbursed as available Canadian cities have and endless ability to up our taxes to satisfy the never ending greed of the civil service wage and pension demands.

To account for the increases as ‘inflation’ is not to the point…..the only inflation we see in property tax increases is the cost of supporting the infinite gluttony of the civil service.

#122 esoteric on 08.13.12 at 1:36 pm

@ 105 Sebee

“Current LTV” isn’t periodically re-assessed by banks. It’s only assessed when you get the mortgage initially or when you refinance and have an appraisal done.

I’m not trying to down play the impact of these changes (I welcome them personally) but it’s not like over night a bunch of people will have to re-qualify or that they will have large chunks of their HELOCS taken away from them based on a vague concept of the market turning downward.

At my bank anyone who has a line of credit for over 65% LTV will have to IMMEDIATELY reduce it to 65% and get a mortgage for the rest of the balance.

This WILL hurt a lot of over-leveraged people. And I’m glad about it.

#123 truth hammer on 08.13.12 at 1:39 pm

read this article about canadians inability to save and then read the comments….the cats out of the bag…a majority of Canadians have woken up to the fact that outrageous taxes goung to support the outrageous demands of the fat elites in the civil service is now gone mainstream.

http://www.ctvnews.ca/business/45-of-canadians-unprepared-for-emergency-spending-1.911840

my comments on this topic are continually censored…is that what you call denial by keeping ones head buried in the sand amigo?

g-man…your sainted love of all things Liberal is definatley not shared by the majority.

#124 Not 1st on 08.13.12 at 1:47 pm

Garth, if you can recall the 60s for a moment, you will find a time when there was very little public debt. People paid cash for houses and vehicles back then. The DOW was under 1000. One person working was enough for a family of 4 or more. Then the gold standard was removed and look what happened. Inflation has already wreaked havoc on us for the past 30 years. Now people have to have to borrow to buy everything.

#125 Mithan on 08.13.12 at 2:27 pm

#56 Sask Girl:
It will crash like everything else. The vast majority of the new people who have moved to Saskatchewan have done so for construction or construction related businesses.

When the construction slows down, people will begin moving out and the momentum will go in the opposite direction.

Personally, I think Saskatchewan will be one of the places that gets hit the hardest for the sole reason that when the construction slows down, there isn’t enough industry here to keep the jobs going.

Take a look at the lakes and how much of their property is for sale, as those are leading indicators.

40-60% correction.

#126 Sebee on 08.13.12 at 2:36 pm

#107 bigrider on 08.13.12 at 11:35 am
#90 Disciple and #42 Smoking.

As Floy dians you should both realize that ‘Time’ is most significant of all the songs.

“Kicking away the moments that make up…

Money, it’s a hit. Don’t give me that do goody good….

#127 Grim Reaper/Crypt Speculator on 08.13.12 at 2:58 pm

APB:

Search for Smoking Man narrowed down.

http://www.vancouversun.com/news/Unconscious+found+with+backpack+full+panties/7059769/story.html

#128 TNT on 08.13.12 at 3:00 pm

Great photo.

The realtors could target market it for High Rollers.

#129 John on 08.13.12 at 3:08 pm

Nostradamos Le Mad Vlad wrote:

“This is the financial equivalent of marrying your sister. Don’t expect a good outcome.” —

” Speaking of incestuous relationships, are F and the Pequerettes enjoying the downturn?

After all, it was they who engineered a cheap money policy, encouraged liar loans etc. If C had raised the bar one to two per cent, chances are that this wouldn’t be happening to such an extent as it is now, and of course, it’s only just begun.”
———-

Whoops….back to the ditch again. It may create more calm to direct attention to the Canadian Finance Minister. Just as many Australians speak of their finance minister in that way….

Once again. It makes no sense to talk about the weather vane’s spin. Just trying to keep it between the ditches.

Maybe this is like the yearly disasterous Thanksgiving dinner where grandpa ends up sucking gravy out of his napkin.

You get every angle in the post game analysis except grandpa’s drinkin’.

Seem right? The situation is a bit advanced to be investing in “let’s pretend”. In other words, from a global perspective this is “Flaherty who…?”

The parade of blinded national weather vanes is hardly a place to start.

#130 Hoof - Hearted on 08.13.12 at 3:09 pm

Forty West Vancouver home break-ins in one month: Corporal
Cash and valuable items are being swiped during daylight hours

http://www.news1130.com/news/local/article/391184–forty-west-vancouver-home-break-ins-in-one-month-corporal

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

HMM…

I wonder if many of these are staged for insurance settlements.

#131 jess on 08.13.12 at 3:14 pm

Rep. Paul Ryan (R-WI) on the House floor during the debate over TARP – Sept. 29, 2008

http://dailybail.com/home/busted-watch-tarp-republican-paul-ryan-begging-congress-to-v.html

#132 jess on 08.13.12 at 3:15 pm

good humour
COMEDY – Clarke and Dawe Explain Quantitative Easing
http://dailybail.com/home/comedy-clarke-and-dawe-explain-quantitative-easing.html

#133 Bill on 08.13.12 at 3:20 pm

#122 Truth Hammer – isn’t there a John Birch Society meeting that you should be attending? Or are you more of a sovereign citizen type? In any case, you clearly don’t understand economics… Ideologically based austerity will only make our problems worse.

#134 Devore on 08.13.12 at 3:26 pm

#119 jesslyn

I am curious to know what happens if/when particular markets crash-will speculators not just jump in and start buying up as investment properties again?

You are confusing and using interchangeably investor and speculator. Speculators are buying all the time, assuming they have money. That’s what they do, speculating that the future will look a certain way.

It is true investors are buying in many US locations. This means the market is nearly done correcting, or at least the current return is high enough to mitigate risk of prices falling further in the future (ie, buying is cheaper than renting). Investors provide a floor for real estate prices, because they will buy a property when rental is cash flow positive and provides a good return, while traditional buyers (owners occupiers) are still either too scared or cannot obtain the credit.

#135 Canadian Watchdog on 08.13.12 at 3:33 pm

Red Pin MLS listings up by 111% w/w. http://www.theredpin.com/blog/canada/toronto-real-estate-aug-13-2012

#136 Devore on 08.13.12 at 3:42 pm

#123 Not 1st

Then the gold standard was removed and look what happened. Inflation has already wreaked havoc on us for the past 30 years. Now people have to have to borrow to buy everything.

The (former) US gold standard has nothing to do with this. Only paper notes were backed by gold, credit has nothing to do with this. One of the biggest credit bubbles in history took place during the 20s, and the fallout (and the remedies) gave us the great depression.

#137 Herb on 08.13.12 at 3:49 pm

#122 Truth Hammerer,

there you go again manufacturing your own “evidence”!

Against my better judgment, I read your CTV link and its comments. Where is “the cat … out of the bag? Where in the article are taxes and your fat cat PS elites mentioned? So four comments (Tim, Mark M, Cliff and Al G) complain about taxation, but where, except in your own mind, is the evidence that PS salaries are responsible for high taxation? Where is any evidence that the other reasons mentioned for the inability to save are wrong?

Shoo back to Talk Radio, Shill.

#138 falling property taxes? on 08.13.12 at 3:52 pm

#89 Form Man

Oh my! Property taxes will continue to increase as property values fall?

Another nail in the realtor coffin.

I think that this is a very important point, especially in places like Oshawa–where it costs between $3000-$4000 in property taxes per annum just to carry a very small house.

Insane.

#139 M G on 08.13.12 at 3:56 pm

comment 32 about rents

I am a realtor and any condo listed for rent under 2000 stays on market for about 2 -3 days and then ts leased. I have clients looking to rent and they are being picky. whenever they want something its gone.

#140 Don on 08.13.12 at 3:58 pm

#121 esoteric
This WILL hurt a lot of over-leveraged people. And I’m glad about it.

Sick puppy you are.If you get in a car crash let all go out for drink and celebrate.
Get it

#141 zeeman1 on 08.13.12 at 4:30 pm

#137 Herb.

Since salaries make up most of every government department’s budget it makes sense that government employee salaries would mostly be responsible for our high taxes.

You may also want to do some research on the growing problem of “government employee legacy costs” to see the bigger problem no one wants to talk about.

The truth is like a breath of fresh air.

#142 Canadian Watchdog on 08.13.12 at 4:54 pm

#139 M G

“I am a realtor and any condo listed for rent under 2000 stays on market for about 2 -3 days and then ts leased. I have clients looking to rent and they are being picky. whenever they want something its gone.”

That’s interesting because TREB recently reported lease transactions up 3% in Q1 while listings was up 15%. That’s five times more supply over demand.

#143 Spiltbongwater on 08.13.12 at 5:04 pm

How much do realtors get paid for finding a client a rental house, condo?

Normally one month’s rent. — Garth

#144 Interesting Times on 08.13.12 at 5:19 pm

@ #124Not 1st on 08.13.12 at 1:47 pm

Garth, if you can recall the 60s for a moment, you will find a time when there was very little public debt. People paid cash for houses and vehicles back then. The DOW was under 1000. One person working was enough for a family of 4 or more. Then the gold standard was removed and look what happened. Inflation has already wreaked havoc on us for the past 30 years. Now people have to have to borrow to buy everything.

—-

I’m sure that many people would have enough to live on today if they lived as they did in the 60s. Just think, one black and white television in the house with a tv antenna, no cable so no cable bills, no cell phone bills (maybe a ‘party line’ phone line), one car per family, no electronic games, no electronic kitchen gadgets etc. Family camping trips instead of trips to Europe. Birthday presents wrapped in pages of Saturday comics. Dinner at home almost every evening – eating out was a real luxury. Lunches taken to work and school rather than being bought and so forth and so on. That’s how I remember the 60s.

#145 Canadian Watchdog on 08.13.12 at 5:19 pm

Well folks, we may just have a hint as to why MLS numbers are switching like high-frequency stock quotes.

“Interesting news from the GMREB today – starting June 5, 2012, MLS listings in Quebec will be assigned RANDOM numbers (as opposed to the current method of them being consecutive). This means that buyers will no longer be able to “guess” how long a property has been listed simply by its MLS number. Good news for sellers!”

Link

#146 Herb on 08.13.12 at 5:33 pm

#141 zeeman1,

the truth certainly would be “a breath of fresh air”, if we ever came across it.

Yes, personnel costs are a major factor and may exceed other operating and capital costs in many tax-funded government operations. The question is which public servants at what level – from police beat to PCO – can be dispensed with. A haircut across the board is the lazy and inadequate way out. Detail the role of the public sector at all levels before you demand equality with the private sector.

I’d be happy to accept you as the lead in establishing that truth vice Truth Hammerer and Westernmoron, who for some reason have failed to rise to the task.

#147 jess on 08.13.12 at 5:43 pm

The officer received a fatal wound after reportedly trying to serve an eviction notice …

http://www.guardian.co.uk/world/2012/aug/13/texas-gunman-police-officer-dead

#148 Nostradamus Le Mad Vlad on 08.13.12 at 5:49 pm

#55 Inglorious Investor — “In other words, the USA was Wackyland. Welcome to Wackyland North.” — Good description!

#81 new-era — “Its a catch 22 situation, raise rates and housing market will collapse. Don’t raise it and inflation will eat up the Canadian Young-em’s”
— and —
#82 Buy? Curious? — “The Great Canadian Depression is right around the corner!”

Both your posts tie in almost exactly with one another. Obviously, there are many different POVs, but essentially the young are screwed (unless they’re in banking, finance or politics), the old will be shipped off to Funny Farms which leaves only the middle class, which is being systematically destroyed, via wars, Monsanto, big pharma etc.

#119 Canadian Watchdog — Good link.

#126 Sebee, along with #42 Smoking Man #90 disciple and #107 bigrider — Interesting to note that Waters, Gilmour, Mason and Wright all (musically) preferred the follow-up, “Wish You Were Here”.

Syd Barrett, the original founder showed up at the studio wanting to re-join the band when they recorded WYWH. He was completely bald, no eye-lashes, nothing but the band was enormously successful by then, and didn’t need him (he was more of a visual artist). Shine On was dedicated to him.

They were one of about five bands who bankrolled Monty Python and the Holy Grail. George Harrison produced MP’s Life of Brian.

#149 AJ on 08.13.12 at 5:53 pm

Pre-Build Condo Price Reduction- downtown Toronto

Change is in the air. I registered to be contacted by a condo downtown TO (FIVE condos, Yonge and St. Joseph). This morning had a message from them saying: “Good news…we wanted to let you know that we have reduced our prices, and added three new stories to the building (ummm…what?), and now the penthouses are also ready for release”

Pop!

#150 marrying your own sister on 08.13.12 at 5:59 pm

Coffee from this morning cam e out from my nose! Garth you are too funny!

#151 TurnerNation on 08.13.12 at 6:34 pm

http://www.moodys.com/page/viewresearchdoc.aspx?docid=PR_252971&WT.mc_id=NLTITLE_YYYYMMDD_PR_252971

Announcement: Moody’s: Stable outlook for US REITs
Global Credit Research – 13 Aug 2012
New York, August 13, 2012 — The overall outlook for Moody’s-rated real estate investment trusts (REITs) is stable, as the REITs continue to keep their real estate portfolios well occupied and benefit from their access to the capital markets, says Moody’s Investors Service in the industry outlook “US REITs and REOCs Update.” Moody’s also has a stable outlook for the operating fundamentals of five of the six major property sectors in which the REITs operate, the one exception being multifamily properties, for which Moody’s has a positive outlook.

#152 The specker (From Greater Fool Blog ) | on 08.13.12 at 6:36 pm

[…] The specker http://www.greaterfool.ca/ […]

#153 Smoking Man on 08.13.12 at 6:59 pm

Grim Today’s coming post dedicated to you :)

#154 Casual Observer on 08.13.12 at 7:13 pm

Also skewering the first-time buyers who fuel the move-up market is the end of cash-back mortgages. Our ‘prudent’ banks have shamelessly been giving borrowers a kickback equal to the 5% downpayment required to get CMHC insurance.

It always bothered me that people were so smug about our banks not being irresponsible and offering zero down mortgages like those nasty US banks.

A year or two back, BNN had a RE discussion on one of their shows and I wrote them an email pointing out that anybody could get a mortgage with no money down at any major Canadian bank because of these cash-back deals.

They read parts of my email on the air, and the “panel” of guests basically said that it wasn’t true and that people were mandated to put 5% down in order to qualify for the mortgage.

While this is “technically” the truth, they neglected to mention or even confirm that the banks were giving buyers the 5% to put down. It was like nobody wanted to admit that our banks were doing the same thing as the US banks.

We are not so different from our American cousins as we would like to believe. Greed is an emotion that doesn’t recognize borders.

#155 cynically on 08.13.12 at 7:15 pm

# 137 Herb, try and have an open mind then read #226 of Surprisenomics. To the salaries, pensions and aides’ costs of the bloated bureaucracy in Ottawa add the very same costs in the provincial capitols and you’ll see the enormous cost of running the country. The payments for the most part come from the citizens’ taxes and those taxes have to be high and varied. It’s simple arithmetic. Sleeken the government – lower the taxes. (while you’re at it, democratize the Senate)

#156 Nostradamus Le Mad Vlad on 08.13.12 at 7:34 pm


Interesting post “The largest bubble in world history continues to inflate at a rate of $3.8 billion per day and has now expanded to epic bubble proportions of $15.92 trillion, up from $9.65 trillion in September 2008 when this current Wall Street manufactured crisis struck. A 65% increase in the National Debt in less than four years can certainly be classified as a bubble.”; 49% Real simple math, not govt. doublespeak figures for unemployment; 16:16 clip The (coming) food bubble. Ummm, it’s already here; Deconstruction of the US The redistribution of wealth. It’s not a ‘trickle-down’ theory, it’s a trickle-up fact; FedEx Buyouts in NAmerica; Mega Banks Protecting their own, like GS, JPM, Morgan Stanley etc.; Greece “But the bankers at the ECB are happy and that is all that really matters!” wrh.com, and US banks; Motorola Axing 4K jobs; Bulk Food Provided it’s good, can be beneficial; Home Owners Associations 4close on big banks; Govt. officials Those naughty feds.; 2:09 clip Pakistan – Iran. “Shove off America, we need gas to produce electricity.”
*
10:43 clip The food is stacked against us — addictive, sweet and sugary, and Chinese health suffering; Iran “So here comes Israel, which has nuclear weapons, was caught trying to sell one to South Africa, is NOT a signatory to the Nuclear Non-Proliferation Treaty and does not allow IAEA inspections, screaming that the world must force Iran to scrap all peaceful uses of nuclear technology they are legally entitled to. And Israel wonders why the world thinks it is Israel that is being unreasonable.” wrh.com. Karma may be a bitch, but is VERY exacting down to the smallest detail, and Israeli Protestors “The people of Israel are against this war. Why should a billion people fight in a war only tyrants and bankers lust for?” wrh.com; Controlling the ‘Net is what Hollywood wants; The US Treasury now directs the war on Syria which, BTW, is guilty of nothing at all; Russia Not buying Billary’s lies; Hypocrisy? No, Christians don’t do that; Statins Side effects.

#157 Can it be? on 08.13.12 at 7:51 pm

Cmhc survey just called me asking questions… Do I own my home… Is it part of a condo… Do I Own another home that is part of a condo… Since I answered no… Surveyor said they only want to talk to people who own condos… Quickly got off the phone. Weird times

#158 45north on 08.13.12 at 8:06 pm

A judge tossed out gun charges against two men Monday after concluding that an Ottawa police officer violated their rights with his “careless and casual” approach to getting a search warrant.

the police officer was doing his duty

but his work was overruled by the Ontario Court Justice

who was doing her duty, I suppose

http://www.ottawacitizen.com/Ottawa+police+search+that+netted+handgun+ammunition+violated+Charter+judge+rules/7082524/story.html#ixzz23TRdVi7i

#159 truth hammer on 08.13.12 at 8:21 pm

Holy Stalinism batman…the CAW wants to collectivize industry so to assure the fat keeps dripping into the lazy union maw. Chairman Mao would be happy.

http://www.ctvnews.ca/canada/caw-wants-automakers-to-invest-in-facilities-1.912202

Marx Stalin and Lewenza…all cut from the same cloth…..the Canadian unions today are equivelent to the Communist Party Member Elites of Soviet Russia and China….fat finery for the elite unionista’s while the majority of workers starve.

This moniority of civil service elite live lives unattainable by the average citizen….gluttonous wages…fabulous pension…..and don’t even start listing the perks including banking leave…compassion pay…early retirement….double pensions….double dipping…..on and on the fat greasy pigs can’t understand that the Canadian citizen has had enough of 20% living like Marie Antoinette while 80& can’t put a meal on the table.

Shame beyond Shame Lewfor even suggesting ‘THE CORPULANT UNION ELITES NEED MORE ‘SECURITY’.

#160 ClaudiusEmperor on 08.13.12 at 8:27 pm

zeeman1 #141, try telling that to your doctor when going for a cancer treatment.

#161 Daisy Mae on 08.13.12 at 8:30 pm

79falling property taxes? on 08.13.12 at 3:53 am
“Here’s a question: When real estate prices inevitably fall, will property taxes follow suit?”

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

No. The mill rate can, and does, fluctuate.

#162 Daisy Mae on 08.13.12 at 8:46 pm

#89Steven Rowlandson on 08.13.12 at 8:41 am
“Who is the genius that designed those driveways?”

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

It’s gotta be ‘photocrop’ or whatever they call it…

#163 Westernman on 08.13.12 at 8:54 pm

Herb @ # 137,
Hey numbskull, how do you think these parasitic ” Public Servants ” get paid? From the bottom of Cracker Jack boxes?
They get their unjustifiably high wages and benefits by leeching of the life energy of what productive people are left in this country – in the form of extortion in the form of excessive taxation…
By the way, your claim of being fabulously rich that you made recently sounds like a croc of shite to me – you don’t seem to have any financial common sense at all…

#164 Investx on 08.13.12 at 9:03 pm

145 Canadian Watchdog:
Well folks, we may just have a hint as to why MLS numbers are switching like high-frequency stock quotes.

“Interesting news from the GMREB today – starting June 5, 2012, MLS listings in Quebec will be assigned RANDOM numbers (as opposed to the current method of them being consecutive). This means that buyers will no longer be able to “guess” how long a property has been listed simply by its MLS number. Good news for sellers!”
—————————————————————-

Hooray for lack of transparency!

The real estate industry is a joke.

#165 NewWorldPartyDotOrg on 08.13.12 at 9:19 pm

Developers and Construction workers have been HUGE beneficiaries of the massive manipulation of the housing market by the government and the real estate industry. But then, the government and the real estate industry are in bed with each other. Look at Quebec.

Housing is most manipulated market in the world…to the benefit of the real estate industry at the cost of non-home-owners, first time buyers and children.

http://www.newworldparty.org/2011/04/housing-most-manipulated-market-in.html

#166 TRT on 08.13.12 at 9:20 pm

Everyone read this:

http://www.huffingtonpost.ca/2012/08/13/concentration-media-ownership-canada_n_1773117.html

So media ownership is twice as concentrated than the number 2 country in the world. We are #1. Add to that the attack on Public k-12 education. Mix this together and what do you get?

#167 Casual Observer on 08.13.12 at 9:22 pm

It’s gotta be ‘photocrop’ or whatever they call it…
.

It’s not even a recent photo. Most trees have leaves in the middle of August.

#168 Hoof - Hearted on 08.13.12 at 9:28 pm

What the unions rank and file never seem to figure out is they were stooges for a Communist agenda…they were peacetime soldiers to have enough choke point control to manouevre society .

Their worst nightmare is that everyone was in a Union..then everyone would be equal….and the gravy suckers would not have any fiscal advantage..aka making $30 /hour for “X” job when the private sector paid $20.

Now, as these unemployed Union morons wake up to the bad dream..the public sector union is nicely set up to be the commissars.

#169 Herb on 08.13.12 at 9:30 pm

#155 cynically,

I had read your #226 and thought it unobjectionable until the as-many-MPs-as-electors bit.

I’m all in favour of lean and mean government and lower taxes myself, but I want them achieved realistically by function, and not because government cost is an easy target for people who have no idea what is involved in government. Decide what it takes to run the country, and then determine what you can afford and what you can do without. Ranting and raving about the cost of government and the public service is easy but not good enough.

#170 Smoking Man on 08.13.12 at 9:47 pm

vlad Shine On You crazy diamonds is my favorite all time tune.

Nothing like listing to it in a car by the lake in late nov in a rain storm.

Amazing

I know the whole Sid story, I have bike too, and Grim arnold lane ring a bell, that/s what I thought of with your link.

#171 Tony on 08.13.12 at 9:54 pm

Re: #161 Daisy Mae on 08.13.12 at 8:30 pm

With about 99 percent certainty property taxes will actually go higher, much higher. This to make up for provincial budget shortfalls. This will accelerate the decline in housing prices. Same thing happened in most American states but it will be far worst here.

#172 bill on 08.13.12 at 9:54 pm

Nostradamus Le Mad Vlad and smoking man:

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

http://www.youtube.com/watch?v=lwanEi0X6_g

saw them at the pne gardens in 73 …live analog six channel sound
they played a bunch of songs off their old albums in the first half and then they played their new album in its entirety in the second half.
guess which album that was smoking man…

#173 Ret on 08.13.12 at 10:01 pm

“During the financial crisis, the federal and Ontario governments helped bailout Chrysler and GM with a rescue package that totalled about $13 billion — with the majority, $10.5 billion, going to GM.”

While the CAW is negotiating another fat contract, maybe Lewenza and the boys would like to invest in their future and buy back some $50 stock that they and GM stuck the taxpayer with. It now trades at around $20. Way to go H and Dalton!

Maybe the money could have been better used to open a new Korean Kia plant in Canada! For $10.5B, they probably would have thrown in a Hyundai plant or two as well.

#174 Herb on 08.13.12 at 10:17 pm

#163 Westernmoron,

excuse me, Sir, could you direct me to a comment where I said anything about my personal financial situation?

The rest is your usual rant.

#175 Calgary Car Guy on 08.13.12 at 10:17 pm

#144 Interesting Times

Yeah, that’s how I remember the 60’s too (except we could afford real wrapping paper,lol) I’m glad I’m old enough to remember the 60’s. A truly awesome decade to live through. Thanks for your post.

#176 2centsCdn on 08.13.12 at 10:20 pm

#101 my own post.
Holly caw …. I stand corrected. I hadn’t looked at the MLS in a few weeks. There are huge piles of homes for sale in the $600K to $800K price range in the 905 area north of hwy #7 ….. mostly newish, several year old homes. Hundreds and hundreds …. Smoking man ….. walls and walls of red dots. It IS over!

#177 Patiently Waiting on 08.13.12 at 10:25 pm

Here is another link for the White Rockers. All of these listings are currently active and have had price reductions of $100,000 or more since the owners have been trying to sell. Note the listings that do not show a price reduction overtly – these have been taken off of the market and re-listed at prices of $100,000 or more lower than their original list price.
Tomorrow’s post will include properties that have two or more mortgages listed on title . . . this getting to be fun . . . LOL . . .

http://mlslink.mlxchange.com/DotNet/Pub/EmailView.aspx?r=600628756&s=BRC&t=BRC

#178 Canadian Watchdog on 08.13.12 at 11:07 pm

#164 Investx

“Interesting news from the GMREB today – starting June 5, 2012, MLS listings in Quebec will be assigned RANDOM numbers (as opposed to the current method of them being consecutive). This means that buyers will no longer be able to “guess” how long a property has been listed simply by its MLS number. Good news for sellers!”

Link

———-

I have yet to confirm this is happening with TREB listings, more on this soon.

#179 cynically on 08.14.12 at 3:11 am

# 155 Herb – It all sounds nice and mannered on paper but you are very naive to think a change can come about that way. In real life we are dealing with pols who have great egos so they are not about to sit down among themselves to do the things you suggest, such as decide what it takes, determine what is affordable and what is disposable, etc. Sure ranting and raving is easy but maybe if enough citizens were to wake up to the problems, there might be a start in the right diection. As a starter I’ve said there are too many electees for the population of the country – 2/3 the number of MPs to the number of Representatives in the US House and 4 more non-electee senators (104) to the 100 in the US Senate for a country(Canada) 1/10 the population. Who is overloaded with pols and their adherent costs? Only your taxes can pay for this luxury.

#180 Grantmi on 08.14.12 at 8:35 am

#56 Sask Girl on 08.13.12 at 12:23 am
It`ll be interesting to see what happens in Regina where `they` are saying 15,000 houses need to be built each year to keep up with population growth.

Why? What could possibly be in Regina that would require an increase of 15k new homes a year?

Explain!! ( and yes… I’ve been to Regina.. And I still don’t get it)

#181 Herb on 08.14.12 at 12:01 pm

#179 cynically,

all right, I’m naïve. You, on the other hand, are going to rant until politicians reduce the political caste and gore each other. And you are going to change the Constitution to slaughter regional sacred cows, such as QC’s guaranteed 75 seats. Have another helping of that delicious pie in the sky while you’re waiting.

I’m going to wait for politicians to discover the obvious themselves. Politicians at all levels have to worry about functions and budgets, and they are going to run out of slack and are going to tighten the purse strings. That’s when they will have to worry about government roles and available means, and cut the suit to fit the cloth. Harper seems to have started, and I’d be quite content to let him carry on if I were not concerned about forgone conclusions and the competence his merry minions. It’s rationality we need, not ideology or servility.

Anyway, elected officials and public servants serve as the officers and crew of the ship of state. It’s the size of the ship and its onboard functions that determine their numbers and roles. That’s where you have to insert the oar.

#182 Bill on 08.14.12 at 9:58 pm

Herb – Westermoron, Truth hammer and cynically are all adherents to an ideology that believes in reducing the size of government and replacing its functions with those of private enterprise… Even when it makes no sense whatsoever. They fail to realize the same services will still be needed, and being provided by business, they will naturally cost the individual citizen more once you factor in the profit motive. Any savings are realized by paying employees peanuts, which means that they in turn have no money to spend in the economy, which in turn makes the whole situation worse.

Do you expect a rational argument from them? There motivations for reducing the public sector stem mainly from jealousy and a sense of personal smallness. When they see others who have been successful, they start to regret their own poor life choices. Rather than doing anything to improve their lot, however, they would rare focus on making other peoples’ lives more miserable.

Oh, and they religiously parrot everything they hear on Sun News.

#183 johnny5z on 08.15.12 at 2:02 pm

I was visiting a bank and they put me in a meeting room next to the mortgage banking department. Quite entertaining – just like pro-wraslin. I realized that the mortgage bankers could sell pretty well everything and anything; even asphalt driveways to apartment dwellers.

As far as the 15,000 new units in Regina, remember builders and developers don’t ask for demographic studies. Builders will build as long as lenders will lend.

Finally, I heard that sentences that start with “they say that” and “I heard that” are bs and not worth finishing.