First, a GreaterFool success story, wherein a belittled, harassed, demeaned, defrocked rocker gets it together and finds his cool. This is pathetic blogging at its best. Changing this milquetoast, dare-I-rock-on, GIC-sucking, condo-humping country, one dude at a time.

Hey Garth, it’s “Chad”. Thanks for using my email in today’s blog post, you made my week man! I am putting my foot down on this deal of the century and my wife is with me. I guess I shouldn’t say “ex-rock n roller” cause I’m still rockin, just not for a living anymore. My wife is actually the bass player, I’m the guitarist and her brother is the drummer. We are called Dead Cat Bounce, a name I got from your site. Life is good I just need to stop the in laws from talking real estate in my presence. Being a greaterfool regular has made me a real contrarian on the subject and it pisses them all off to no end. Other than that we’re a happy family. Im gonna tell them to leave us out of their financial plans.Your letter has given me the validation I needed to say “hell no”.
Thanks again man.

Not only another life saved from PREABS (parental real estate abuse syndrome), but a heroic trio trying to sex up soulless Edmonton, named in a fit of inspiration after reading this blog. This, truly, is what financial planning is all about.

Now, as if Chad needed any more evidence when he tells his house-horny inlaws where to put their semi, it’s cascading all over us. For example, Van West and Richmond – the two most blistery real estate markets in Canada less than a year ago – are in full retreat. Sales so far in August have shuddered down to 2008 levels, and prices are reflecting the paucity of bidders.

“There are only a few buyers who are out and they’re low balling,” a well-connected guy tells me.  “It is not uncommon now to see an offer go through where the closing price was 20% below asking.  I would say every property is selling for 10-15% below the July 2011 assessment value.”

Since February (just six months), single-family detached averages across the city have ratcheted lower by 16%. It now appears this reduction could be doubled by the Spring. After that, it’s an open guess whether the melt will continue or the market stabilize – too many economic factors are as yet unknown. But this much seems clear: never again in years, maybe a decade or two, or ever, will the average Van detached house be worth $1.2 million.

This makes complete geniuses of those people who sold in 2011 or the early months of this year. Likewise, it shows those who bought were on the wrong side of the trade. Losses of 30% or 40% or more may never be recovered, particularly if we slide into a protracted period of low-growth, quasi-deflation and structural unemployment. Which pretty much describes right now.

This is not just about Vancouver, which richly deserves a spanking, but the housing market nationally. We’ve reached the point where even the real estate industry can find it zipper in the dark. The latest stats from CREA show it all: depreciation.

After rising steadily since the GFC, the national house price average is shrinking. Down almost 1% in June, and 2% in July. Of course, being realtors, there’s the overwhelming need to blame others for your industry’s own avarice and misinformation, so CREA is cutting F down to size. Which is fairly easy.

“Recent changes to mortgage regulations were widely expected to temper sales and prices in Greater Toronto and Greater Vancouver, and the data released today confirms that,” says head guy Wayne Moen. Adds the association’s economist:  “Some first-time home buyers may have difficulty qualifying for mortgage financing due to shortened amortization periods included in recent changes to mortgage regulations. As the lynchpin of the housing market, lower first-time buying activity will have knock-on effects over the rest of the market. It will likely take more time for move-up buyers to sell their current home.”

As this blog has spelled out since March, the feds are determined to turn housing cold. The risks of letting people accumulate mindless amounts of debt so they can live beyond their means are simply too high. Every economist knows that deleveraging has to follow a borrowing orgy like this, and that can amplify negative economic trends, dampen consumer spending and throw more people out of work.

Thus, murdering the 30-year mortgage, ending cash-back loans, raising the bar for new borrowers, reining in HELOCs and slashing insurance on high-end homes are parts of a concerted plan which has a 100% chance of success. Realtors, developers and lenders worry it will work too well, ushering in a Canadian-style crash.

But the real cause is a house lust bred of public ignorance. People think rates will stay low forever. They view real estate as riskless and markets as reckless. They think nothing of 95% or 100% leverage, because houses are ‘safe.’ They don’t fear debt because it’s a tool to get they want. Granite. Besides, real estate always goes up. Their parents said so.

So Chad, don’t hate them. Just ignore them. Everybody over fifty seems convinced the future will be as dominated by inflation and rising asset values as was the past. It’s a critical error. They’ll pay for it.

By the way, if I do a gig in Edmonton, will you open for me?


#1 City that smells like it sounds on 08.15.12 at 9:51 pm

Furrrrrrrssssst!!! Oh ya baby!! :):)

#2 Steve on 08.15.12 at 9:54 pm

Just got an email for phase 2 of Upper Unionville next month… Do you think it will sell out immediately like phase 1?

#3 just learning on 08.15.12 at 9:56 pm

Mr. Turner… I have a couple of names for you. They are both anagrams of your real name:

Truth Ranger
(sounds like useful servant, patriotic fighter)

Hurt Granter
(sounds like realturds killer, heroic badass)

Thanks for the good work. Keep going…

I like ‘heroic badass.’ — Garth

#4 Suede on 08.15.12 at 10:03 pm

This Burnaby Mansion has had a “Price Reduced” sign on it since after the third week it has been on the market. Several price reductions later, and you have $939k. Ouch. Talk about sellers out of touch with reality. Missed the banana boat (no pun or racism intended) by 10 months.


Assessed value: $852,600


#5 East Van on 08.15.12 at 10:06 pm

House prices have not decreased in Vancouver. The house price index (http://www.housepriceindex.ca/) clearly shows this. What has happened is that both listings and sales have fallen dramatically, and the most expensive houses in West Van are not selling at all. This lack of sales has driven down average prices, but when you compare apples to apples, pricec are still going slightly higher. I am not saying prices won’t fall. What I am saying is that it has not yet happened in Vancouver.

Yes, the frankenumber. Very credible. — Garth

#6 T.O. Bubble Boy on 08.15.12 at 10:07 pm

Realtors, developers and lenders worry it will work too well, ushering in a Canadian-style crash.

As opposed to leaving everything as-is (looser standards, cash-back, 30- or 40-yr amortization, etc.), and having a U.S. or Icelandic-style crash?

Are the ‘skip a payment’ mortgages still allowed? Those shady mortgage “features” are simply a tricky way of extending an amortization. If you are on a 25-year mortgage and “skip” 1 payment a year, isn’t that essentially the same as a 30-yr mortgage?

#7 Totalchaos on 08.15.12 at 10:09 pm

Woo Hoo-I’m out! Sold the rental for 12% less than original asking and couldn’t be happier! No more calls from crazy tenants, no more tracking people down on the 1st of the month for rent, no more being a landlord. Did I mention that I am in the BPOE? It’s getting ugly out there, people.

#8 curious on 08.15.12 at 10:13 pm

so this reduction in home prices is it right across all the regions or mainly the gta? I’m just wondering if buying a home in stoney creek ontario by the lake a good location to live? What are your thoughts on the home prices in stoney creek but only by the lake not the mountain or any where else?

#9 Canadian Watchdog on 08.15.12 at 10:21 pm

Toronto 416 Condo Sales To Listing By Area

I’d say get your popcorn ready, but apparently there’s a shortage of corn.

#10 FTP - First Time Poster on 08.15.12 at 10:24 pm

Praise Be! Another soul has been saved!


#11 Smoking Man on 08.15.12 at 10:26 pm

Destinology Buy or Sell outcome is predetermined
Visualize a cold piece of steel, a blow torch. The torch is applied to the metal for one minute, then stop time dead in its tracks, atoms and electrons stop moving.

Everything in the universe is made up of atoms and electrons, electrons orbiting nucleus, attracted to each other in one way or another. The behave based on the surrounding other atoms and electrons. The environment is constantly in motion and has a predetermine trajectory.

Now when we analyse the metal, at the core of the heat source, the electrons are orbiting faster than the ones on the edges.

Our brains being made up of the same stuff, our thoughts and actions are a result of subatomic particles in motion. You reading this, forming an opinion, commenting on the topic was set in motion long before the big bang, that cloud you see at the moment you see it, was destined to be there, at that time in that shape and size not single extra or one less atom in its make up.

As troubling as humans find this idea, the mechanics of this are pure and cannot be changed, thoughts, actions and motion are just results of a sub atomic world interacting with each other. A world in motion.

Humans being are stupid knobs as they believe that they have some kind of control over there destiny.
Not a chance, less of course you invent a time machine and go back to the torch and remove it from the metal for a trillionth of a billionth of a second. Humans give homage and respect to fools that can spell, memorize / regurgitate, and collect certificates, and obediently follow orders, against their interests. They serve the machine without a revenge agenda. Rebel grasshoppers spell like me. Don’t feed the machine.

Now know one will believe a self confess’d master liar, but when I had my near death experience and was taken on a tour of the universe, by a naked gorgeous angel in jet black stelletos, Becky. who introduced me to Albert Einstein crying in a winged chair on the dark side of the moon, crying cause he had no more puzzles to figure out.
I met with the voice, who allowed me to enter the universal consciousnesses consolidator too early after death, where I learned everything there is to know. What the voice did not calculate, guess he was hung over, was I was going to be revived with all this info. After my revival the bastard is still in my head, I promised I would not use this know all power to disrupt the the flow of atoms and electrons, anything else is fair game.

How many times have I been wrong, Those that follow me know of what I speak.

So I say why sweat the big, stuff Buy the House or sell the house. Save or Spend, Cower under a rock or Challenge fking god in a small boat in a thunder storm.

It don’t matter.

Everything, every thought, every key stroke, every action is pre-determined by things too small to see that can not change motion or direction. Your success or failure is not in your control.

Any hot ladies want the wining lotto numbers?

Have great pics here

Don’t worry Garto all clean

#12 rock 'n roll on 08.15.12 at 10:27 pm

“chad’s” band is actually really good!

you guys should tour together.

#13 Lost cash on 08.15.12 at 10:28 pm

Toronto lelieville area is it one of those safer areas or will I get creamed if I buy there?

Home of trendoid, Vespa-riding over-leveraged property virgins. No risk there. — Garth

#14 KLIP on 08.15.12 at 10:31 pm

Atta boy Chad! Punt the outlaws, grab yer gerbil, hit the chords, and rock the joint.
Oh, and ….. pay down that debt at some point dude!

#15 blase on 08.15.12 at 10:31 pm

$3.5 million fire burns down two houses and damages 3 more, story in Calgary Herald.

Looks like the house fire canary is going crazy. Has Shiller or anyone else ever done a graph on the relationship between fires and declining real estate markets?

#16 Ron on 08.15.12 at 10:33 pm

I have been so sick of people with houses saying “MY HOUSE IS WORTH SO MUCH MONEY BLAH”. Well, it is only worth what they actually sell it for.. not the asking price, not what someone else sold theirs for, etc.

All these people should put their houses for sale so they can see how much it is worth. Who wants to pay a million dollar for some crap bungalow. And condos? Look at condos in Toronto that are 20 – 30 years old. They look like crappy old apartments. Condos have almost ZERO long term value. People want shiny and new and with condos they get out of date fast.

$300k condos will be lucky to get $180k in two years. Houses will lose hundreds of thousands to millions in value, but all this value never really existed to begin with.

#17 Tony on 08.15.12 at 10:35 pm

Vancouver and Victoria will drop minimum 50 percent.

#18 KLIP on 08.15.12 at 10:35 pm

We’ve had 10 years of easy credit. 10 years of housing demand brought forward due to “stimulating” financial instruments.

This correction will be 20-30 years, easy. If any of you remember the late 50’s, or early 80’s, you know that debt and credit back then was no where near as rampant as it is now. I watch newlyweds buy and I always say to myself “you’ve got a hard lesson coming, but I guess it has to be”.

#19 Herf on 08.15.12 at 10:40 pm

I think Chad should re-name his band to “F and the Peckerettes”.

#20 Chaddywack on 08.15.12 at 10:41 pm

Why is everyone named Chad these days?

#21 Stinky the Fish on 08.15.12 at 10:52 pm

Chad – Why didn’t you use my name for your band?

#22 Miss GTA on 08.15.12 at 10:52 pm

Any thoughts on sellers refusing to list properties now because they don’t want to sell at these new lower prices? won’t that lower supply and thus start fueling bidding wars again, or at the very least, keep prices high?
Nobody has to sell their house just cuz…

See GM article today


#23 Stinky the Fish on 08.15.12 at 10:53 pm

I don’t know what to say, Chad…

#24 2centsCdn on 08.15.12 at 10:53 pm

#11 Smoking Man
I think we are witnessing a man slowly going insane …. and he was pretty far gone to begin with : ) Guard those precious bodily fluids you wacky nut.

#25 Stinky the Fish on 08.15.12 at 10:53 pm

I thought we were pals, amigos… the best of friends

#26 Stinky the Fish on 08.15.12 at 10:54 pm

Congrats on growing a pair, btw

#27 KG on 08.15.12 at 10:54 pm

@ #4: Looking at the listing I thought at 93K it is fairly priced, until I realized my brain was ignoring a zero.

#28 John Tivoli on 08.15.12 at 10:54 pm

Check out this realtor who thinks the stats from the Real Estate Association of Greater Vancouver aren’t telling the real story:


#29 T.O. Bubble Boy on 08.15.12 at 10:55 pm

Here’s a Smoking Man special:

Interesting that this place could barely sell in 2010 (listed at $389,000, then $374,000, before selling for $363k)… then it gets flipped and listed at $469,000 2 years later before selling at $521,000 in a bidding war.

Smoking Man – are you secretly a house flipper? I can see why this area is “hot” — lots of dumpy old bungalows ready to be torn down and/or slapped with lipstick.

#30 Smoking Man on 08.15.12 at 10:57 pm

#16 Ron on 08.15.12 at 10:33 pm

Translated I’m a cowered, I hate risk takers that made a bet and won.

I want them to suffer cause I feel less than. I used logic and thought. Now I look like an idiot.

Who has the problem?

Take a risk Ron
love the thrill of victory more than hate of a loss.

It works for anyone that try’s it

#31 Stinky the Fish on 08.15.12 at 10:58 pm

Nice one, CDN watchdog

#32 JSS on 08.15.12 at 11:00 pm

Garth please come to Edmonton

Garth please come to Edmonton

Garth please come to Edmonton

#33 Van guy on 08.15.12 at 11:05 pm

I wonder who’s going to open for Garth in Van?

#34 Saskatoon-Living on 08.15.12 at 11:13 pm

Did you get sick of the BNN ticker today Garth? I know I did seeing the 27% increase in sales headline for Calgary YOY. At least it was better than Saskatoon being the city in the headline.

#35 Smoking Man on 08.15.12 at 11:15 pm

#24 2centsCdn on 08.15.12 at 10:53 pm

I love U too man

#36 donald trump on 08.15.12 at 11:17 pm

what a scam

#37 Smoking Man on 08.15.12 at 11:21 pm

#29 T.O. Bubble Boy on 08.15.12 at 10:55 pm

People want water

#38 Tyrell Pronghorn on 08.15.12 at 11:21 pm

Good stuff. Even though I’ll be better off in the long run because of all this, I still feel kinda bad for people. It’s been a good lesson in basic economics. Thanks Garth.

PS. When’s the next Victoria show?

#39 Surrey Girl on 08.15.12 at 11:23 pm

Kittens on life support

#40 Grim Reaper/Crypt Speculator on 08.15.12 at 11:30 pm


I have a Dim Sum trap in from of my Richmond Hi – Rise

Bait is getting “mouldy”..like a brand new CMHC insured 416 house.

Dear Garth:

Should I turn it into an eternal REIT ?

#41 JSS on 08.15.12 at 11:32 pm

Chad, can you please play the following songs at your gig:

– Van Halen (Romeo Delight)
– Judas Priest (Electric Eye)
– Dio (Holy Diver)
– Iron Maiden (Hallowed Be Thy Name)
– Slayer (Seasons in the Abyss)

#42 BC Bring Cash on 08.15.12 at 11:33 pm

News from K Town. (Kelowna) Driving along Lakeshore dr I saw a RE agent erecting a foreclosure for sale sign in front of a property. The property is between 2 properties already for sale. Trying to flog a lakeside property in Kelowna is getting a little tougher as time goes by.

#43 Devore on 08.15.12 at 11:40 pm

Changing this milquetoast, dare-I-rock-on, GIC-sucking, condo-humping country, one dude at a time.

Deprogramming mass delusion is only possible with great effort, one person at a time. That’s why propaganda is so effective.

#44 Investx on 08.15.12 at 11:48 pm

“Yes, the frankenumber. Very credible. — Garth”

Steve on the previous comments stated that the HPI is a rolling average. Is this why you call it a frankenumber?

#45 blbitwww on 08.15.12 at 11:51 pm

#22 Miss GTA

Any thoughts on sellers refusing to list properties now because they don’t want to sell at these new lower prices? won’t that lower supply and thus start fueling bidding wars again, or at the very least, keep prices high?
Nobody has to sell their house just cuz…

See GM article today


Somebody ALWAYS has to sell (e.g. death, divorce) and those sales set the comps for everybody else. Price is set at the margins, not by those not listing.

#46 Roial1 on 08.15.12 at 11:56 pm

Everybody over fifty seems convinced the future will be as dominated by inflation and rising asset values as was the past. It’s a critical error.

Not EVERYBODY. Just a lot.

Al who is WELL past 60 (but not stupid).

#47 TakingResponsibility on 08.15.12 at 11:57 pm

Hey! Dead Cat Bounce rokks!!

#48 Dr.NickRiviera on 08.15.12 at 11:59 pm

Garth we’d love to have you come shake up our city and knock some sense into the arrogant “It’s different here!” locals – please come to Edmonton!

#49 Astute Poverty on 08.16.12 at 12:01 am

so CREA is cutting F down to size. Which is fairly easy.

That’s a statement if I ever heard one. Dumb and dumber come to mind.

#50 Suede on 08.16.12 at 12:09 am

#19 Herf

Excellent idea for a band name. It sounds modern, yet at the same time, an ode to the 60’s glory of emerging rock.

Their first single could be called “Carnage”

#51 siddelly on 08.16.12 at 12:14 am

#5 East Van
#28 John Tivoli

People should realize that the Home Price Index was created by a corporation called Altus group in conjunction with 6 Canadian RE boards shortly after the previous downturn in sales of 08/09. This is taken from their website:

“The MLS® Home Price Index (HPI) comprises a set of software tools

configured to provide time-related indices on residential markets within territories of participating real estate boards in Canada.

The MLS® HPI is the best and purest way of determining price trends in the housing market. It was pioneered by six founding partners: the real estate boards of Calgary, Fraser Valley, Greater Montreal, Greater Vancouver, and Toronto and the Canadian Real Estate Association. In 2009, the partners contracted with Altus Group to develop the MLS® HPI, which subsequently launched in January 2012.”

You can decide for yourself what their motivation was at the time, to pay the consultancy fees for this service.

#52 Jay on 08.16.12 at 12:16 am

Hey Garth are you planning on stopping in Edmonton on your tour?

#53 new-era on 08.16.12 at 12:17 am

28 John Tivoli on 08.15.12 at 10:54 pm

Check out this realtor who thinks the stats from the Real Estate Association of Greater Vancouver aren’t telling the real story:


Don’t worry, once the real estate agents starts to starve, they will do what they do best, con the sellers to sell low low low…..

That is when the price will start to go down. When the agents need to eat and will do whatever it takes to get a sale.

#54 Plumbing Retailer Intern on 08.16.12 at 12:20 am

We hope that Smoking Man would quit using our Plumbing Displays…especially the Turbo Bidets. FYI the water is NOT hooked up….and our security cameras are still trying to decipher that tattoo on your n*ts.

#55 DR. WAYNE on 08.16.12 at 12:23 am

Following condo prices in Ladner, BC … listings increasing … prices are ‘not’ decreasing …

#56 Freedom First on 08.16.12 at 12:25 am

#1, would your handle stand for Regina?

#57 Nostradamus Le Mad Vlad on 08.16.12 at 12:42 am

Good on Chad and his significant other for such a quick, positive turnaround!

“Every economist knows that deleveraging has to follow a borrowing orgy like this, and that can amplify negative economic trends, dampen consumer spending and throw more people out of work, [plus depreciation and deflation]. Realtors, developers and lenders worry it will work too well, ushering in a Canadian-style crash.” — The longer this goes on, the harder the crash will be so why not just get it over and done with?

#11 Smoking Man — Good post, ‘tho one unknown is always present.

Each individual is guaranteed the right to use their own freedom of choice as they wish, during the short time they are down here.

As each person has their own way of looking at life, enjoying it as if each day were their last, or just working a 9 – 5 job with little or no prospect of advancement, an individual can turn their life on a dime with no explanation required, which is the beauty of life — the unknown.
For Chad’s in-laws; Service Society is the way of the west in the very near future; Money can buy some happiness, but not a lot; Warped Priorities; Misled Roughly the same thing happened in BC, with the new natural gas providers charging more than Fortis and Terasen did; Austerity U-Turn Borrowing more, with less of a producing work force to pay it back; Brazil and Latin America enjoying the good times; Hard Times Recession = suicides; Sears Selling itself off? GM bailout Still not paying back, let alone GM Canada; One Share of Stock worth millions; Muppets Inc.; GS Above the law; China Investment dollars are leaving. All the more reason for China to bring in a new gold-backed currency; Be Like Soros.

Top Ten Ways to f*&k the system; Muted Inflation More QE; Global food crisis As if we need another one; Cisco Nice profit; Former IMF economist says Asia will avoid recession; RBC Take your mortgage and shove it! EZone Still flogging a dead horse; Not in California; Solutions; Brazil is next in line for the summer Olympics. Bye Bye Brazil; Apple going to make cable-TV boxes? Ikea New budget hotel venture? Austria Each Euro country can only function with its own currency, so the end of the EZone? China Replacing workers with robots which means more unemployment; Commodities Nine wars over them.
The opposite of Chad’s in-laws, and Two gorillas reunited after three years; Four nuke reactors in US shut down in last few days; Choosing or Losing your religion; Contempt for democracy The case against the EU; Natural Health vs. Drugs.

#58 no offense, Chad on 08.16.12 at 12:44 am

but I checked out your videos.

looks like you’re having fun, but hang onto those day jobs, man.

keep on rockin’ in the free world.

#59 Scott on 08.16.12 at 12:53 am

Living in the GVRD, I realize that prices are insane. But I’m committed to staying within the 3.5x income bracket for a detached home. Crazy? Yes.

So every so often I look on MLS.ca for any house-detached with a maximum price of $350k. And, just like every other time I’ve searched…0 results. In the entire GVRD. It’s angering and yet sad at the same time that one cannot even afford anything remotely reasonable these days.

#60 Carpe Diem on 08.16.12 at 12:55 am

I live on an awesome street. The folks in my age group are really fun and knows how to party once the kids go to sleep! The boomers are currently selling their places for awesome prices – good for them! The newbees have the nice car but seem so anal!

All my fun, gen-x neighbors bought homes over 10 years ago but both parents have to work to make payments since they were careless along the way.

Me … I have my wife at home taking care of the kids and I work just enough to ensure everyone gets paid, RRSPs, RESPs, future home and other investments. The rest of the time, I love spending time with the kids.

Oh, yeah … I rent a Tudor-like Castle on an acreage for less than the 10-year home owners pouring plenty of cash to pay debt, repairs and taxes … they are the suckers to the engine … some of them are actually agreeing I have it right! One family tried to sell and then gave up – no greater fools!

I feel sorry for families that need to work so much and ignore their kids aside the weekends. Just to be home owners. Be it on a rich or poor streets – its all the same! Everyone seems broke and will only admit it one-on-one. Including those with nice BMW’s or Volvo’s!

Me I have a 10+ year car that is starting to rust but I have no debt and no stress.

I can say thanks to my dad … he always told me, stay away from debt, don’t buy bigs homes (rent them only) … he retired at 52 and at 74, he still has plenty of years left and his non-RE investements keeps him travelling and buying whatever he wants.

He was a mechanic. But a really smart one.

#61 Scott in Gibsons on 08.16.12 at 1:54 am

Before: Boomers are house rich, retirement is no problem, and they can help their kids with education and first homes.

After: House wealth evaporates. Kids are in education debt with no job, and no house.

Housing is 31% of BC economy

#62 The Dude on 08.16.12 at 1:58 am

For the Love of all that is holy, please set foot in Edmonton. This place is in dire need of two things: someone to tell the truth about housing to my Mother in Law so she can STFU and quit haranguing me to go half a million in debt for a cracker box built of solid rocket fuel. And Two, it needs more rock n roll and fewer house horny hill billies who think that debt makes them rich.

#63 cynically on 08.16.12 at 2:54 am

You all know that Canadians are tagged as nice people so in the interest of y’all I’m going to thank the hundred or so posters who supported Garth’s apt advice to Chad and saved him from the hellhole he might have created for himself. I’m sure Chad would want me to do so, he also being a nice Canadian. Great work gang, now let’s get on to the next poor soul about to make that wrong decision in life.

#64 broadway skytrain on 08.16.12 at 3:17 am

KG on 08.15.12 at 10:54 pm
@ #4: Looking at the listing I thought at 93K it is fairly priced, until I realized my brain was ignoring a zero.

it seems ok to me
lets do the math….
assume the house is worth 0.01
66′ equals 2 lots round here
thats 465 per lot -on a decent street about 14 min from the ocean and dt, no bridges.

head west (into ‘dumpy’ e van) and find decent lots, on a nice street going for min 700 to 850 range (best i saw was a 920ask ,sold in a week, recently) Nothing (SFH) sits on the market to this day – a 1.65m new build w laneway house(not complete) just went off mls – that would set a record in this area as far as i have seen – no hyper bubble like the w side but a steady ratcheting up with no sign of a rest

keep heading west past cambie and lots did get out of hand reaching the 1.5+ range
– no question this was frothy and the hangover is slowing sales and softening prices (also see west van , and to a much greater extent the swampy bogs of richmond) leaving more of the action in the lower priced areas, driving the avg down.

burnaby seems to be growing like hell, kingsway will be unrecognizable if 5-7 years, the option of living across the soon to be tolled fraser river does not excite me or most others in the lower mainland and the available land to build SFH on was spent about 50 yrs ago

smoking guy – i like your style but , dude, your physics needs work. if your ever in van , i can show you what real boating looks like – http://www.sewellsmarina.com/
crazy diamonds and smoking bc style obligatory

you like this, it’s real, unlike cold fusion and it is 1000x hotter than a blowtorch http://www.generalfusion.com/
my dreamjob would be to work there but i lack the motivation and i screwed around too much in eng school!

i was a dumb kid in my 20s (1999)when i quit my cushy eng. job to play full time in the tech bubble – could have totally paid off a 2 yr old mortgage, but held in there (whoops) but watched the bubble pop, dumbfounded. and lost all the ‘winnings’ about 50x faster than US realestate ever fell. a balanced fund is about as daring as we have been since and we have little faith in the SP500 or tsx from here forward

as it stands i am the happiest man on the planet because my perfect wife(the most debt averse person i have ever met) is happy with me doing capital projects to benefit our family (and the cooking ) while she kicks ass in the exec office to pay the bills

after 15 yrs of customizing our paid off house to be exactly what we want we have no desire to move and
would not ever consider selling . for about 350k with 150k improvments on a house and rec property – 500 total, we figure we now are sitting on about 1.25 in equity. (at a pathetic garthratio tm of about 75% of net worth in RE). the first 3 or 4 years after we bought the value did drop but we did not even know it at the time.

so in 15 yrs we are up about 750k on RE and up maybe $7.50 on financial investments. (we only learned the ways of the garth recently) if two fairly bright people can’t figure out investing , but can make a killing on RE , what chances does the herd (vast majority) have of even trying anything but RE?

a 20 or 30 % drop would be effectively meaningless as we are looking 20more yrs out. i figure it will drop 10-15%max around here but again its meaningless in the long term.


disciple – who is pee wee herman again? you need help with these imposter thoughts

finally, looking forward to the big event on monday- a post presentation discussion group down on the windy seawall (nudge,wink) may be in order.

#65 martin on 08.16.12 at 3:28 am

latest news: bad system


#66 gtrz4peace on 08.16.12 at 5:15 am

Garth, I have an opening act for you — for Edmonton, Vancouver, anywhere. His name is Harrison Ivaz and he just performed at Lollapalooza 2012. He’s a 13-year-old genius rock songwriter who is a TRUE contrarian (he argues with everything his parents say, can’t get more contrarian than that.)

Check him out, and all Blog Dogs are invited to do so, at http://www.harrisonivaz.com

Glad that chad got his mojo back.

#67 John on 08.16.12 at 6:43 am

“Too many economc factors are unknown”

Oh really? Don’t you do the 34 second daily skim of CNN? Today your blog article gave me the same feeling as the National Enquirer in a dentists office. Maybe it’s just the timing on the dots.
“The Syrian people have suffered too much, too long. We cannot go on this way,” Ban said.

“The international community must feel the sense of collective responsibility on this situation. How long do we have to endure this kind of a tragedy? This is not justice and this is not acceptable.”

#68 House Horny Housewife on 08.16.12 at 7:24 am


You must feel great about having reached someone like Chad. You helped someone to avoid making a decision that would have probably ruined his life. Good for you.

I think Chad sort of knew that what was being offered was not such a great idea and he just needed a little nudge in the right direction.

The huge plus here is that his wife was on his side. This is no small thing. Had his wife been on her parents’ side, the situation would have been quite different. Fortunately, the wife is also to be commended for her wisdom (at least she did not inherit her parents’ lack of foresight, thank goodness).

Owning anything with relatives is a huge mistake. It is bad enough that a husband and wife co-own a property but in this case, they co-own a lot of other things so “in for a penny, in for a pound”, as they say. When you get in-laws on either side involved, one can easily see what a disaster this can turn into.

What I don’t understand is why in-laws don’t themselves see this and they continue to try to “help” by meddling in their children’s business, especially when their children are married and have their own children. When someone is of legal age and they move out of their parents’ home, then they should have the right to make their own life decisions without any meddling from their parents. Parents do not realize how much harmful pressure they put on a marriage by trying to “help”. I would love someday to turn around and tell my own in-laws what THEY “should” do … perhaps they will get the message then (I have spent my entire life keeping my own in-laws out of my business).

Hey Chad ! Maybe that’s what you should do. Tell those guys what THEY should do about their real estate situation and perhaps they will finally get the message about what they are doing to you. Just make sure that you and your wife are a united front. If that happens, your in-laws cannot hurt you and you just have to hum a tune when they start to advise you on real estate … Pink Floyd or Led Zeppelin or some other classic tune would be great.

Rock on !


#69 bigrider on 08.16.12 at 7:25 am

I live in a self enclosed bubble underneath lake Erie in a very small community of other bubble people.

Funny thing, some of the other bubble people in my community have been buying up other bubbles and spare lake bottom silt to build more bubbles. They say gauranteed to go ‘up’ in value

They all say it’s ‘different here’.

Why you ask ? Because with all the pollution and global warming occuring on land, they say everyone is going to want to live underwater to escape the land based armaggedan that’s coming.

Go figure.

#70 TurnerNation on 08.16.12 at 7:50 am

Is the new saying: Don’t trust anyone over FIFTY? :-)

“The kids are alright”.

#71 Bigrider on 08.16.12 at 7:57 am

#64 broadway skytrain.

Ratchet back to 1989 when real estate crashed and the TSX was sitting in and around 3000. By the late 90’s the TSX was comfortably above 14000 and real estate values had fallen by 40% or so from 89′ depending on where located.

All through the 90’s, GIC refugees ( remember that well coined term at the time?) piled into mostly mutual funds handily making out with double digit returns year after year.

Your pro house pro RE ideology will change

#72 torontorocks on 08.16.12 at 8:36 am

Smoking Man is right on about one thing – the herd, the media, the shepharding of the sheeps. The conditioning (nowadays) to be mediocre, never be the star, go for at least a top 12 finish in total (bronze) medals, etc. I work on Bay Street and I walk like the cock of the walk down here and get sour puss looks all day long by the typical, cookie cutter wankers you see at Ki or any of those other d-bag hangouts. I think he may now fashion himself as a budding quantum physicist (next up a treatise on chaos theory) but if you do take a step back and see, I mean the media goes all the way around the world to find a bad news story (a bus crash in a village in Germany) and rarely finds the time to write something positive. The media has always been an instrument of conditioning for the masses – how many golds did North Korea win (i.e as presented by the NK media to the NK’s?). As long as food stays cheap, Canadians will be happy in their calorie induced stupor. Pay the bills, pay the debt, pay the taxes, meat is $3.99/pound thank God. As for SM, he’s a programmer, my brother is a programmer and these guys seem to operate with logic and questioning, no emotion. they see patterns, they see movements, I get that. I wish him well in terms of the sauce.

As for real estate, I guess the port credit play is a Toronto Oakville.

#73 Carruthers on 08.16.12 at 8:38 am

“Every economist knows that deleveraging has to follow a borrowing orgy like this, and that can amplify negative economic trends, dampen consumer spending and throw more people out of work.”

Garth, not being a smart ass but when has there ever been a borrowing orgy like this? Adjusting for inflation, were the 1920’s worse in terms of personal financial irresponsibility?


BTW how about “Throbbing Hog”?

#74 bigrider on 08.16.12 at 8:45 am

I recently moved to a small community on the moon, right next to a beautiful crater.

Funny thing, people here are buying more and more of the lunar surface and building bigger and bigger lunar bases complete with multiple air locks made of granite, all on the belief that it’s ‘different here’ because everybody will be moving here to escape the overpopulation and the inevitable environmental destruction of the earth .

Go figure

#75 Susan from London area on 08.16.12 at 8:51 am

Okay that over fifty comment what the? I know how to read the weather I just like to watch the weather report to confirm, or not my predictions. I.’m 54 single mom and just had the balls to sell 2 beautiful properties 1 a lakefront with 4 incomes. 2nd a farm 10 minutes from town. I kept a small country property to downsize into and I’m still walking around in shock as to how I rocked my world! My 90 year old geniuse mother turned me on to your news paper article that she cut out everyday for me to read. Hey my generation and the one before me taught you youngens how to rock. Let’s leave some respect for the elders on this blog. Oh and by the way I bought some Kimberly Clarke you know they make depends Ha HU.

#76 eaglebay - Parksville on 08.16.12 at 8:51 am

#8 curious on 08.15.12 at 10:13 pm
” What are your thoughts on the home prices in stoney creek but only by the lake not the mountain or any where else?”

There’s a “mountain” in StoneyCreek?
Kidding right?

#77 NewWorldPartyDotOrg on 08.16.12 at 9:09 am

Some people, if they sell at the peak, will make a ton of money.

Some people, if they buy now, will lose a ton of money.

Bubbles are Extreme Makers and Breakers of Wealth:

#78 Mackie on 08.16.12 at 9:14 am

For the band’s name: I like Hanging Chad. It’s political and sexual at the same time. Much like Garth. lol

#79 Steve on 08.16.12 at 9:17 am

#44 Investx on 08.15.12 at 11:48 pm “Yes, the frankenumber. Very credible. — Garth”

Steve on the previous comments stated that the HPI is a rolling average. Is this why you call it a frankenumber?

Investx, I used the example of rolling average in an attempt to explain the impact of such a tool. They use a collection of tools that, in the name of preventing bias, actually create it. There are technical explanations of exactly? what is done to get the HPI, so hunt one of those down.

Straight from homepriceindex.ca: apparently, you need a realtor to interpret it for you.

“Combined with the knowledge, experience and skills of your REALTOR®, the MLS® HPI allows you to better understand these trends — and how they can affect the market value of your home.”

Please feel free to accept without any diligence everything realtors tell you, or any other group of people marketing/selling to you, and at all costs: avoid thinking for yourself.

Garth is not biting, so please give it up. If you can’t figure it out given the effort expended so far, then please feel free to just believe it.

#80 young & foolish on 08.16.12 at 9:22 am

The economic tide has turned, and the boomers are now facing a new order (asset deflation, cash-flow shortages).

Can you teach an old dog new tricks?

A market is a market, is a market.

The only difference between RE and equity assets seems to be leverage. You can borrow to buy either one, but in the case of RE, you can have someone else pay for the debt.

#81 dd on 08.16.12 at 9:32 am

Never bet again the US … Bull..

David Walker, former U.S. Comptroller and CEO of the Comeback America Initiative, rejects the $15.9 trillion debt calculation. According to Walker, the U.S. government owes $70 trillion — 77 percent more than the publicly stated amount — and the national debt grows at a rate of $10 million a minute. He counts all unfunded Social Security, Medicare and retiree pension promises in his calculation. The CBO estimates that federal spending on the nation’s major health care programs would grow from 5 percent of GDP to 10 percent by 2037. Social Security spending will rise more slowly from 5 percent to 6 percent in 2030. All together these programs will account for 16 percent of gross domestic product — up from the current 10 percent — in 25 years.

#82 maxx on 08.16.12 at 9:39 am

“…..amplify negative economic trends, dampen consumer spending and throw more people out of work.”

Absolutely true Garth and that is precisely the little poison pill that global governments should have swallowed back in ’08-’09, which would have staved off the vast problem we now have and going forward. Huge numbers of people are suffering enormously and this is a fast-growing trend which not slowing down.

In the years since the GFC, our family has found many creative ways to slam the anchor on most spending whilst having an equal or better quality of life. We have decided that the difference between zirp and normal interest rates is the additional amount that we save and invest each and every year. It has worked extremely well and has become an exciting part of our new routine. We have so much fun bringing home our bargains and sharing experiences. For the ladies: recently scooped an Hermès Constance bag in excellent condition a charity shop for $1.00. For the gents: a brand new Tilley hat (with tag), also for a dollar. The bargains are out there and they are plentiful. Same for food: you can feed yourself a much higher quality diet for a fraction of the processed junk cost. We didn’t implement overnight, but with each step, a rich, rich harvest starts rolling into our portfolio.

We will not spend “like it’s 1999” until interest rates normalize. It’s so easy to reduce costs and we’ve realized that it’s an eye-opening shock how much you can save “invisibly”- without even feeling it.

The high you get from watching your savings balloon is like no other.

Garth had it right in so many ways all along, especially the part about getting out of debt- and fast.

#83 The American on 08.16.12 at 9:46 am

Toronto Mayor… Shame on you…


#84 disciple on 08.16.12 at 9:58 am

Changes to the dividend tax credit

For tax years that begin after December 31, 2009, the eligible dividend gross up and enhanced dividend tax credit will be reduced from their current levels of 45% of the dividend paid and 11/18 of the eligible dividend gross up, respectively, to:

44% and 10/17, effective January 1, 2010;
41% and 13/23, effective January 1, 2011; and
38% and 6/11, effective January 1, 2012.

As a result, the effective enhanced dividend tax credit expressed as a percentage of the taxable amount of the eligible dividend is 17.9739% for 2010, 16.4354% for 2011, and 15.0198% for 2012.

#64 broadway skytrain… pee wee herman is a character played by the same actor who also plays Peter Schiff.

#85 Van Isle Renter on 08.16.12 at 10:00 am

#44 Investx on 08.15.12 at 11:48 pm

“Yes, the frankenumber. Very credible. — Garth”

Steve on the previous comments stated that the HPI is a rolling average. Is this why you call it a frankenumber?

The only thing rolling about the average is that it rolls the way the CREA wants it to. This average is a complete hodge-podge of cherry-picked data, specially selected by people with a vested interest in selling you something. It is a complete and utter distortion of the statistics and of no use whatsoever, nor was there any need for it …. at least not by anyone interested in making an informed decision.

Think about it: Statistical measures such as Average, Mean, Median and Mode have been in use for hundreds of years by scientists and economists all over the world to accurately describe all sorts of groups of things, from the size of world-wide corn crops, hemlines and used by everyone from insurance underwriters to sub-atomic particle physicists.

But the CREA, composed of a group of financially illiterate to semi-illiterates decided that conventional statistics were not “robust” enough to describe the Canadian housing market. So they invented their own #’s and want everyone else to follow along.

I’ve looked at how the number is calculated and it is indecipherable and not only that, it is impossible for someone with the raw data to re-create their results.

This puts the CREA stats into the realm of black alchemy at best and utter fraud at worst. You would be better off believing Sino-Forest’s annual reports or Bre-X’s ore estimates.

#86 Daisy Mae on 08.16.12 at 10:00 am

“But the real cause is a house lust bred of public ignorance. People think rates will stay low forever. They view real estate as riskless and markets as reckless. They think nothing of 95% or 100% leverage…”


Very true. And the feds understand how most minds work. But the feds weren’t as smart as they thought they were, because their devious plan backfired.

#87 cramar on 08.16.12 at 10:03 am

#11 Smoking Man

You should next become an expert in quantum mechanics. Then a week later go on to string theory, and become an expert in that. By early Sept. you will eclipse Stephen Hawking in knowledge and understanding and be on your way to a Nobel Prize. It’s all foreordained. You cannot fail.

#64 broadway skytrain

“after 15 yrs of customizing our paid off house to be exactly what we want we have no desire to move and would not ever consider selling.”

You da man! Luv your style!

#88 disciple on 08.16.12 at 10:04 am

Chad Smith of Red Hot Chilli Peppers is indeed Will Ferrell. Alice Cooper is indeed Steve Carrell. I believe I have identified Bernanke. I’m fairly certain who Greenspan was (Larry King). Rob Ford kind of looks familiar too. Speaking of which, why doesn’t he just pay for a driver out of his own damn pocket? Of course, AM radio news would never make that suggestion, which is ironic considering how much they bash public sector unions… why no venom for private sector unions?

#89 Garth is over fifty on 08.16.12 at 10:12 am

Don’t trust him? or do trust him?

#90 GTA BOY on 08.16.12 at 10:25 am



#91 Steven Rowlandson on 08.16.12 at 10:27 am

As much as I disagree with the real estate cult and government debt I think may be the government is setting the wrong example by its own mindless and excessive borrowing and debt accumulation. If the government wants some financial sanity practiced by the citizens then it must lead by example and cut spending and pay down its own debt and don’t try to do what it can not afford to do .

#92 Just Checking on 08.16.12 at 10:40 am

Another very entertaining, informative post. Glad for Chad.

One small detail, in case you want to change it,
“They don’t fear debt because it’s a tool to get they want.

#93 mingeford on 08.16.12 at 11:11 am

Today in the UK’s biggest selling newspaper. It all sounds very familiar:

“Britons with homes in France who already face a substantial tax hike on any profits they make if they sell are also at risk of a property slump as transactions dry up.

A perfect storm is said to be blighting the market across the Channel. According to a report in the newspaper Le Parisien, property sales are being driven down by a sellers refusing to cut asking prices, higher taxes from the new French Socialist government, tighter credit conditions and would-be buyers stalling to see if house prices will fall.”

Read more: http://www.dailymail.co.uk/money/mortgageshome/article-2188731/French-house-prices-warning-British-owners-hit-15-tax-hike.html#ixzz23ipoYFso

#94 Alberta Guy on 08.16.12 at 11:12 am

Just sold in Calgary after 60 days on market for 98.5% asking and long possession date. Also got myrealtor to wave any claim to 20k deposit should buyer get cold feet. Thanks Garth!

#95 This is Wonderland on 08.16.12 at 11:33 am

11 Smoking Man on 08.15.12 at 10:26 pm

You’re a crazy old man…entertaining but crazy.

Here are some black stiletto heels for you.


#96 Gunboat Denier on 08.16.12 at 11:35 am

82 Maxx

“We have decided that the difference between zirp and
normal interest rates is the additional amount that we
save and invest each and every year……. We will not spend ‘like it’s 1999’ until interest rates normalize.”

This is a little noted effect of ZIRP. It also applies on a larger scale to pension funds as well as retirees who count on a more reasonable return on their fixed-income holdings. In addition to preventing money from entering the economy, it sends a bad signal that we are still on very shaky ground.

I hope “Blog Dog Carney” notes this and will start raising rates incrementally very soon.

66 GRTZ4peace – No I think Garth should get the one-
man blues band from down under – Claude Hay


76 E-bay – I guess “mountain” is relative. Doesnt
the “escarpment” run thru Stony Creek?

Great weather out this way. Enjoyin’ the boat?

#97 Nate on 08.16.12 at 11:42 am

Garth! Would love to see a presentation in Edmonton, I’d come and I’d bring a few house horny friends with me!

#98 Aussie Roy on 08.16.12 at 11:47 am

Aussie Headlines

RBA statements don ‘t match their own data.

According to Rismark, the average home price nationally was $447,994 as at June 2010. Given that dwelling prices nationally are down around -6% since peak, we can estimate that the average dwelling price nationally is around $421,114 currently, which suggests that average household disposable income (i.e. after taxes) is around $105,000 according to the RBA’s ratio calculation.

This is a ridiculous notion given:
1.The ABS 2009-10 Household Income and Income Distribution Survey showed that the average after-tax household disposable income was only $74,360.
2.The 2009 Household, Income and Labour Dynamics (HILDA) Survey estimated that an Australian household only needed to earn over $77,500 after-tax to be classified in the top two income quintiles (i.e. the top 40 per cent of income earners);
3.Individual average annual earnings (pre-tax) were only $54,600 as at March 2012;
4.The ATO Taxation Statistics showed that individual average (pre-tax) taxable income was only $66,500 in the 2009-10 financial year; and
5.The 2011 Census revealed that median annual household income was only $64,168.


NAB Bank funds RE buying drug lords activities

Files released yesterday by the Victorian Supreme Court show how in just six years from 1995, Tony Mokbel went from being a pizza shop owner with total assets of $128,000 to a Ferrari-driving ”property developer” worth in excess of $15 million.

The documents trace the close relationship between Mokbel and the NAB, which loaned him millions of dollars to build his property empire at the same time as he was emerging as the state’s biggest illicit drug manufacturer.


Aussies don’t listen to Steve Keen but the rest of the world does

In the past two years, Keen has been jetting off to a series of speaking engagements, invitations by central banks, and numerous TV appearances overseas, with audiences showing a deep appetite for his bearish views on debt.

“I am now well and truly experiencing the ‘Tall Poppy Disconnect Syndrome’, with my status and recognition growing internationally,” he said.


#99 Miss GTA on 08.16.12 at 11:48 am

Um… can someone please explain for this newbie how sales can go down but average prices still go up??
as per TREB real estate data?

AND , just to clarify, I am not looking at HPI, I am looking at average price still. Is it because the mix is different for higher end homes making up a greater share of the market? Or are buyers just accepting higher prices even without getting into bidding wars?

#100 BCGirl on 08.16.12 at 11:51 am

HEADLINES for this morning’s Vancouver Province Newspaper:

Young people fleeing B.C. in big numbers: Are bad economy and pricey housing to blame?

Read more: http://www.theprovince.com/business/Young+people+fleeing+numbers+economy+pricey+housing+blame/7096450/story.html#ixzz23iyRQDJl

This is not surprising at all! We have even thought of moving out and we are fortunate enough to make a decent living here. Money doesn’t go far here, especially in Vancouver.

After all, BC = Bring Cash! : )

#101 Just Park It on 08.16.12 at 11:52 am

One conjecture to Garth’s view of the market meltdown and the view of timelines.

Late 80’s – The housing bubble in Mississauga was on a tear, those day’s people stood outside construction sites and watched in horror as sales agents raised prices without a moments thought – but sales steamed ahead.

Prices finally hit it’s peak – and crashed – everyone was saying that it was better to dump the property as they were never going to recover. Fast forward – peak in the late 80’s $380K – dropped in a medium range of $140K – same home today $480K..

It took 10 years to recoup your losses – break even – fine, the blog dogs are gonna have a frenzy that was 10 years of lost income – but the return roared back – and as I always say – Never say Never – we are now a society that builds wealth on gambles and chances, that’s why this bust will turn to a boom in short order.


#102 broadway skytrain on 08.16.12 at 12:00 pm

considering how much they bash public sector unions… why no venom for private sector unions?

private sector unions are not, and never have been, funded by sending men with weapons/guns to the houses of those who choose not to patronize them.

#103 Bigrider on 08.16.12 at 12:36 pm

When you get off the planein Mexico you are immediately besieged by Mexicans trying to sell you tour packages, excursions and the like.

When you land at Pearson in T. O it’s RE agents and mortgage brokers trying to get you to buy a house

#104 Amazing on 08.16.12 at 12:39 pm

Looks like a quiet couple of weeks for MLS and then come September watch the listings start up again. By October we should really have a much better picture of how things are really going to go.

#105 GTA Girl on 08.16.12 at 12:42 pm

#90 GTA BOY on 08.16.12 at 10:25 am

April 2012 Detached 416 $831,214
Mid August 2012 Detached 416 $763,603


what else do you need?

#106 Kind of Different on 08.16.12 at 12:48 pm


You rock!

So happy Chad is taking advice from the blog dogs!

#107 PoorgEoisie on 08.16.12 at 12:58 pm

Great sleuthing as always disciple, I’ve got it from a good source that every sumo wrestler is actually every other sumo wrestler.

Chad, I know you know this but just in case: covers are only exceptable once per set or around a campfire. Cover bands are the anti-thesis of rock and roll and there is no coming back once that line is crossed.

#108 Devore on 08.16.12 at 1:07 pm

#68 House Horny Housewife

When someone is of legal age and they move out of their parents’ home, then they should have the right to make their own life decisions without any meddling from their parents.

They “should”? I think they “do”. But a right not exercised ceases to exist. Usually that’s the case because “it’s too hard” and there is a decision to make and a price to pay.

The parents are meddling because they can, and because there are no negative consequences for them for doing so. The ball’s in Chad’s court, where it always was.

#109 BooYAH on 08.16.12 at 1:14 pm

Great post from another forum

It is not that hard to predict the foreseeable future using the existing regulations in place. One cannot predict the sudden GOC actions and one only can guesstimate the BOC interest rate decisions but outside of this it is fairly predictable – see the table I posted on page 88

Prior to May 2006 the “average CRA” Vancouverite could afford a mortgage of $2614.53 /month and with this amount he could buy a property up to $495k using the existing 5/25 regulations and BOC rate.

Then in May 2006 this changed big time with the introduction of the 0% down / 40 years mortgages and he saw his purchasing power “increase” by more than $86,000 to $581,572.
Initially BOC increased the rate by 0.25% (July 2007) but then changed the direction and with bold moves decreased the interest by 2.25% (Oct. 2008) which allowed new Vancouverite with the same $2614/month to afford a property now worth $792,815 at that time – a whopping 60% more without any change in income!

The GOC realized their mistake and canned the 0/40 – replaced with min 5% down/35 years in Oct. 2008 which immediately affected the purchasing power of these “$2614/month” – down to $769,839 and the buyer was required to put $38,432 of his own money.
However we were starring at the financial abyss and the BOC cut the interest rates whole 2% in only 4 months to a unheard low of 0.5% in April 2009. This sow the seeds of a real estate orgy as the purchasing power of $2614/month shoot to an all time high of $1,060,205.
This continued from Apr. 2009 to June 2010 – the two busy spring seasons (2009 and 2010) Vancouverites feasted on $1M+ properties, feeling rich and wealthier than ever before – all facilitated by the likes of Cam Good and the other used houses salesmen. Then the BOC took a few baby steps – increasing the interest rates by 0.75% by Sep.2010 which somehow decreased the purchasing power of these “$2614/m” to the still pricy $935,826 (which BTW is 12% down from the all time high attainable between Apr.2009-June2010.)

But the RE orgy did not stop, BOC hands were tied down by our neighbors to the south and fearing for the busy Spring 2011 the GOC trimmed the available amortization down to 30 years beginning March 2011 which limited the purchasing power of these “$2614/m” to $825,843 which is 22% down from the all time high. However the RE market is not a sports car, not either Titanic and the effects will be felt a year down the road.
And I have a feeling that what we see now is the results of this decision.

And the consequences of the further trimming down the amortization to 25 years only done by GOC in July 2012 (just like it was prior to May 2006) which reduced by a whopping 33% the purchasing power of these $2614 to only $708,771 will be felt a year from now.

To recap – 495k to 582k to 793k to 770k to 1060k to 936k to 826k to 709k now. – all possible to be carried by $2614 /month with the same income.

For the young people out there who cannot afford a house – divide the $2614 by 2 and divide the other numbers in similar way to gauge where the condo prices are going (from 250k to 530k and now to 354k)
This is an update for the downtown Vancouver condo market by a realtor specializing in this.

And for the young Torontonians who purchased their 630 SF condos in May 2011 or before – it is a bad news -but I will update my “condogeddon” post once the mid August TREB figures are released today or tomorrow.
Keep in mind the 354k number from above – for the past year and half the average price was in the 350-360k range – breaching that one will be the first sign of the pending RE storm.

#110 neo on 08.16.12 at 1:23 pm

So looking at that Canadian average chart. Since 2010 we have stayed within a $25,000 range peak to trough within a calender year. Anything outside of that and we are in 2008-2009 correction territory again. That means basically if we break $350,000 in August then the next support level is $325,000. There has always been a second half bounce since 2009. I don’t think given the headwinds this time around were are going to get that bounce. I think there is a good chance we get close to $325,000 by the end of this year. The real question going forward is will we get that normal Spring bounce or will it confirm this downtrend and also confirm the end to this housing bubble cycle.

#111 John on 08.16.12 at 1:23 pm

Smoking Man:


In the disease of addiction, the concept of “will”
( the power to decide and act on one’s own behalf) is damaged. In three ways:

1. With self
2. With a power greater than self
3. With others

The three bridges of will. Unity.

But addicts think in reverse. They believe they are separate, and work backwards, towards a universe where they have control and power.

But power is being connected…not separate. So? Fail.

Curiously the combination of ego and monumental insecurity results in your post.

Cold fusion.

Any human being would take connection ( reality) over disconnection ( illusion) any day, any time, under any conditions. In fact, that’s what we did as kids…inventing the false self. The “big ego”.

Refer to 1-2-3 above for where the bridges to reality are blown out.

A more interesting topic is someone who is neither more nor less than human…connected. Millions of people are working on that topic. Like in AA for example.

Your post was nonsense.

#112 Buy? Curious? on 08.16.12 at 1:24 pm

Chad, don’t give up on your dreams, the dry ones at least. You can still rock out AND own a home. Take your inlaws cash but rework the agreement. It’s called NE-GO -CIA-ATING. Tell them them to put up a deposit, interest free for year. Then take out some credit to renovate it, then flip it, pay them back (or not) and the use the profit to use as a deposit on a smaller house that you and your bandmates could use to practice your stage presence. Then when you make it big, sell the house and buy a REAL mansion. Garth is such a wet blanket when it comes to finances.


If he can do it, anyone can!

#113 truth hammer on 08.16.12 at 1:33 pm

Inflation was juiced up revenues by government to create the current hyperinflation ‘Canadian style’ and now the consequences are raging uncontrolled ?

How do you put the genie back in the bottle? We have seen housing prices double in 5 years….milk bread meat fish canned goods proceessed foods, gas, hydro, utilities, heating..etc etc have all doubled and trebelled in the same time while ‘wages have remained stagnant’….so they say…….this is not the fault of employers….this is the direct result of government manipulation in the markets.

And now the feds are warning us that food costs may go up….may go up…..because of the drought in the south and central plains….what crap….food costs are already triple what they were five years ago.

In twenty years we’ve seen our taxation triple after the Liberals off loaded the national deficit onto the local governments in the phony ‘balancing’ that the Liberals have lied so long about.

The only people who are benefitting from this hyperinfaltion are the small percentage of civil servants who have their snouts buried deep in the trough.

JM Keynes concept was to increase the size of government 2% per year….but that was in the late 1800’s….he never envisioned what would happen when taxation reached 100%……..he was considered an idiot in his day by the way……but liberal governments everywhere loved the idea of ever expanding government….especially the Trudeau era liberals…..who loved Castro and Bolivar and modeled canadian democracy after Stalins Ukraine experiment.

JM Keynes also quipped “The only intelligent occupation is the avoidance of taxation”…but of course the liberals never found a tax they didn’t love and now we are burdened with the legacy of thirty years of liberal dictatorship.

Canadians need to wipe the slate clean and turf all the appointed bureaucrats that were employed under the Liberal government…attitudes have to change before we see our country dragged into the toilet.

#114 disciple on 08.16.12 at 1:40 pm

#87 cramar… Stephen Hawking, a guy who talks through an antiquated speech generating device, seems rather suspicious now that I think about it, and especially since I know for certain that Carl Sagan and Walter Mondale were the same person.

“The particular voice synthesiser hardware he uses, which has an American English accent, is no longer being produced. Asked why he has still kept the same voice after so many years, Hawking stated that he has not heard a voice he likes better and that he identifies with it even though the synthesiser is both large and fragile by current standards. For lectures and media appearances, Hawking appears to speak fluently through his synthesiser, but when he prepares answers, his system produces words at a rate of about one per minute.” – Hmmmm….

#115 Old Man on 08.16.12 at 1:58 pm

#101 you are correct at what happened in the late 1980’s, as it was a boom and bust, but this time the economic factors are different. This time the bust will be explosive, as we in Canada are facing a different reality which has never happened before, and the outcome will not be pretty; do not expect another boom for a decade or more. Buy no Real Estate whatsover, until a bottom becomes apparent which is going to take many years to accomplish; even then any capital appreciation will be minimal from year to year.

#116 DM in C on 08.16.12 at 1:59 pm

John #111

“Your post was nonsense.”

Pot Kettle

#117 Steve on 08.16.12 at 2:03 pm

#99 Miss GTA on 08.16.12 at 11:48 am Um… can someone please explain for this newbie how sales can go down but average prices still go up??
as per TREB real estate data?

I suspect you may not have really said what you meant to ask, but to answer the question as stated: One is a measure of how many houses sold, and the other is a measure of the average price of the houses that sold, both over a given time period in a given area. They change pretty much independently (from each other) and both may be indicators of market conditions – at least when properly analysed.

If a neighbourhood has mixed homes (some high price, some low) then you are more likely to see variations in that neighbourhood. A small number of higher end homes selling in the period will raise the average but not the number of sales. A large number of small homes selling will do the opposite. Same collection of homes, very different reporting outcome. You are best to know the neighbourhood to interpret results.

#118 Steve on 08.16.12 at 2:05 pm

#105 GTA Girl on 08.16.12 at 12:42 pm #90 GTA BOY on 08.16.12 at 10:25 am

April 2012 Detached 416 $831,214
Mid August 2012 Detached 416 $763,603


what else do you need?

For those that really want to understand, the rest of the context. For everyone else, that’ll do

#119 Realtor # 1 on 08.16.12 at 2:11 pm

SFD prices up 28% , wow, but let’s focus on how sales are down , Sales were also down y/y in the last six months of 2010 and the first three months of 2011 however prices didn’t decrease. Repeat this year.

Don’t you wish you bought in 2010. At this rate a 25 % brings you back to 2011 , wow, let’s wait two or more years for a price correction that only goes back one year.

#120 Westernman on 08.16.12 at 2:19 pm

Truth Hammer @ # 113,
Don’t hold your breath for Canadians to take ANY kind of action to get their Socialist, high tax, politically correct nanny state under control. Canadians as a rule aren’t the least bit interested in freedom or liberty anymore ( maybe they never were? )…
As long as they have a case of beer, a recliner and some inane sporting event on the T.V. they are content sheeple…
Or to make a long story short – as a nationality Canadians just don’t have what it takes…

#121 Canadian Watchdog on 08.16.12 at 2:43 pm

#99 Miss GTA

“Um… can someone please explain for this newbie how sales can go down but average prices still go up??”

Like I said Garth, don’t expect average prices to fall dramatically until 2013 as TREB will keep baking in pre-sales into GTA’s average price.

For the blog’s sake, I’ll post my finding again.

Anybody wondering why TREB is phasing in their HPI as a headline price? It’s simple. GTA’s average price has been completely distorted by pre-construction sales booked on MLS, and now, TREB realizes there’s a cliff ahead in Q1 2013 that will cause GTA’s average price to decline by double digits before spring season. For those who know, average prices do not reflect common sales, rather it is a better measurement of market conditions since its formula is simply total dollar volume divided by sales.
GTA’s Average Price Explained.
Here is TREB’s new data by area/district: https://docs.google.com/file/d/0ByrPFSoPLahJMlBjaVhndUcxRDg/edit?pli=1
After reviewing the data, the first observation I had noticed was excessive price gains in particular districts. Since the new data provides average and median prices by district, one could easily pinpoint ans search for new developments in these areas of interest. So I did, and sure enough, all districts with the highest price gains had one thing in common—pre-construction.
Districts with high q/q gains.
Markham, district of Unionville median home prices up 51% q/q.
Pre-Construction Area
Mississuaga, district of Creditview median home homes price up 18% q/q.
Pre-Construction Area
Newmarket, district of Stonehaven median home prices up 29.8% q/q.
Pre-Construction Area
Richmond Hill, district of Langstaff median home prices up 44% q/q.
Pre-Construction Area
Brampton South median home prices up 28% q/q.
Pre-Construction Area
There are two ways how new home and condo developments contribute to GTA’s average price i) builders marking up prices ii) pre-sales booked on MLS that are not built yet. As for the latter, I’ve found numerous sold listings for units with completion dates from 2013 to 2015.
MLS Sale to be completed in 2013.
MLS Sale to be completed in 2015.
There’s no disputing it anymore. It’s happening, and there’s a lot of them. This I believe is also the view of one RBC economist who stated in a recent report how Vancouver’s average price is badly “overstated.” I agree.
As of recent news, new GTA sales have started to decline as reported by BILD/Realnet. This is a major problem because GTA’s average price requires dollar volume on new home sales to maintain its seasonal month-over-month price range between $475,000 – $520,000. Looking ahead in Q1 2013, there is massive hurdle for GTA’s average price to clear due to a few factors:
i) Around Q4 2011 and Q1 2012, when new home sales started to slow at developer’s sales offices (offline MLS sales), they began to sell new and unbuilt units on MLS; these offline sales helped boost dollar volume into GTA’s average price. With recent mortgage rule changes and lending conditions starting to deteriorate, it is highly unlikely new home sales in Q1 2013 will surpass 2012.
ii) This past January 2012, there was 2.99% mortgage wars between big bank lenders. This sparked last minute sales that also fueled dollar volume into GTA’s average price. It is also unlikely low mortgage rates will be offered in 2013 due to bond yields rising again, but mainly because banks must meet new Basil III capital rule requirements, forcing them to hold more capital, in turn, lending less.
iii) CMHC insurance ceiling and new guideline rules.
iv) As a speculative prognostication, even if we don’t know what type of weather we’ll have this winter, Q1 2012 was a record breaking season that kicked-off an early buying season. Any bad weather could derail sales even further.
Alas, the main issue at hand is that TREB’s average price has been a headliner for industry professionals and the general public for decades, making it very difficult to detour everyone away from it before Q1 2013. Unfortunately for sellers, even if GTA’s average price is overstated and TREB’s HPI is somewhat more accurate (its really a rolling six month median price), what matters is what the mainstream media and public accept as a trusted reference price, and that is, average price.
With the above reasons given, it is most likely that at the beginning of the new year there will be a major decline in GTA’s average price, and with mainstream media headlines blasting double digit price declines, this would certainly discourage spring buyers from jumping in the market.

#122 Edward on 08.16.12 at 2:47 pm

Not being pushed by in-laws into buying? Smart! Getting free band promotion through a former MP’s financial/real-estate blog? Genius!!

“Some first-time home buyers may have difficulty qualifying for mortgage financing…” <– Why does CREA say this like it's a bad thing? Of course "some" buyers should have trouble qualifying!! Anyone who doesn't have enough money should have trouble. …Shouldn't they?

#123 Herb on 08.16.12 at 2:48 pm

#113 – Truth Hammerer,

excuse me, Sir, but what is the difference between a Liberal and a Conservative bureaucrat? They get paid at the same scale, and isn’t pay and benefits your problem with the PS? And wasn’t it this Conservative Government that inflated the PS something like 25% over the Liberal PS establishment?

#124 randman on 08.16.12 at 2:51 pm

Chris Martenson has a great article …highly suggested reading

“What do the following have in common?

LIBOR, Bernie Madoff, MF Global, Peregrine Financial, zero-percent interest rates, the Social Security and Medicare entitlement funds, many state and municipal pension funds, mark-to-model asset values, quote stuffing and high frequency trading (HFT), and debt-based money?

The answer is that every single thing in that list is an example of market rigging, fraud, or both.

How are we supposed to make decisions in today’s rigged and often fraudulent market environment? Where should you put your money if you don’t know where the risks lie? How does one control risk when control fraud runs rampant?

Unfortunately, there are no perfect answers to these questions. Instead, the task is to recognize what sort of world we happen to live in today and adjust one’s actions to the realities as they happen to be. The purpose of this report is not to stir up resentment or anger — although those are perfectly valid responses to the abuses we are forced to live with — but to simply acknowledge the landscape as it is so that we can make informed decisions.”


Garth…spoiler alert …there is a section on gold manipulation …… hope it doesn’t get your knickers in a knot!

#125 Casual Observer on 08.16.12 at 2:58 pm

#113 Truth Hammer

….this is the direct result of government manipulation in the markets.

Politicians may have contributed to the bubble by policy mistakes that enabled it, but it was still people acting on their own greed (speculators) and fear (of being priced out) that pushed Canadian RE prices to absurd levels. People keep blaming politicians for everything instead of taking personal responsibility for their own actions.

Don’t forget that there was a RE bubble throughout most of the world during the past 10 years. The Liberals can’t take credit/blame for a worldwide bubble, can they?

….milk bread meat fish canned goods proceessed foods, gas, hydro, utilities, heating..etc etc have all doubled and trebelled in the same time while ‘wages have remained stagnant’….

Your hyperinflationary statements about food prices tripling over the last five years has me wondering where you shop. Prices have gone up, but nowhere near that much.

In twenty years we’ve seen our taxation triple after the Liberals off loaded the national deficit onto the local governments in the phony ‘balancing’ that the Liberals have lied so long about.

Tax rates have not tripled over 20 years. In fact, marginal income, capital gains, and corporate tax rates have gone down. Some taxes have increased, yes, but again – no overall tripling.

My preference would be to see more taxes shifted to consumption, and away from income, but that’s another discussion.

The federal budget was ‘balanced’ by offloading costs to the provinces, but it was not lied about. The proof was that the federal debt was decreasing after the books were balanced.

The only people who are benefitting from this hyperinfaltion are the small percentage of civil servants who have their snouts buried deep in the trough.

Are these the same civil servants who are getting their lay-off notices from the Federal Gov’t?

I don’t agree with Keynes ideology, and I’m not a fan of the Liberals, yet I find myself defending them here.

You may have valid points, but when extremely exaggerated statements are made, the points are lost in translation.

#126 neo on 08.16.12 at 3:23 pm

#105GTA Girl

-8.13% doesn’t mean much unless there is follow through next Spring.

YOY prices are up 28%

The only softness right now is condos which are down 3% YOY.

#127 cramar on 08.16.12 at 3:35 pm

#114 disciple

I can readily identify with Prof Hawking whom I missed on his last trip to the PI (Perimeter Institute) in Waterloo. I had an antiquated Win95 system which lasted 11 years without problems to retirement a few years ago, and sadly was thrown out some weeks back still in perfect working order. If my wife had not insisted I’d still have that boat anchor purring in the basement. I also have an original APPLE II, which I’m procrastinating on parting with.

Could I really be Steve Jobs? Naw, he died younger than me.

#128 Realtor # 1 on 08.16.12 at 3:45 pm

105 GTA Girl

Real estate is seasonal – prices from April to august are always down around 10%.

What else do YOU need to know?

#129 John on 08.16.12 at 3:48 pm

DM in C wrote:

“John #111

“Your post was nonsense.”

Pot Kettle”

To you….because you don’t want the subject matter. Yet those dynamics ( covered in the post) are precisely the family matters driving the world credit bubble. Identity problems. Poor priorities. Disconnected and lonely people.

They’ve very understandably made really poor decisions.

Pot-shotting at something you don’t understand and don’t want to understand is a waste of time. You can choose to ignore it.

Nowadays people are quite overwhelmed with the circus and need connection. This is the story behind the real estate madness. Lack of connection. To self. To something bigger than they are. To community ( others).

#130 lilyflor on 08.16.12 at 4:00 pm

the average home price chart above is revealing a double top, you know what that means…

#131 Glen on 08.16.12 at 4:09 pm

Atta boy Chad, good decision.

#101 – Just Park It

I like your optimism but I think it is a bit misplaced.

A demographic tailwind has helped the housing market along in the past. In addition to all the other problems, an aging population is more likely to create headwinds going forward. There just isn’t enough Gen X and Y to soak up all those McMansions and recreational properties.

#132 Investx on 08.16.12 at 4:10 pm

79 Steve

Investx, I used the example of rolling average in an attempt to explain the impact of such a tool. They use a collection of tools that, in the name of preventing bias, actually create it. There are technical explanations of exactly? what is done to get the HPI, so hunt one of those down.

Please feel free to accept without any diligence everything realtors tell you, or any other group of people marketing/selling to you, and at all costs: avoid thinking for yourself.


How ironic…

Steve, so it’s not a rolling average? And you can’t explain why it’s supposedly misleading?

Who is the one now that’s made up their mind without due diligence and simply following the herd?

I don’t want to simply follow the rest of the real estate bears, which I consider myself part of (!), because they tell me to and call it a “frankenumber”. I’d like to understand why and make an informed decision. I sincerely want to understand the HPI.

You, on the other hand… well, like I said, ironic.

#133 Old Man on 08.16.12 at 4:14 pm

Real Estate can be compared to a bond with a coupon or a fixed rate of return which is taxable. Now when the cost of money goes up in terms of yield, the capital value of the bond will decrease, and when the cost of money goes down, the capital value of the bond will increase. Real Estate works the same way, so cheap money brings in the suckers to buy the big home in a deflationary environment, but a mortgage has a term, and that becomes critical if the market blows, as you will lose the dice game. Then what? You might go underwater in a heartbeat waiting for the next mortgage renewal with no equity, and what will the bank tell you?

#134 Amazing on 08.16.12 at 4:35 pm

#128 Realtor… shouldn’t you be busy selling something… clearly the blog dogs are not your target market… killing time???
All the realtors I know are selling off their properties.. even their personal residences are on the market. Some are just selling to family members… heard a funny story about a realtor using a tragedy recently to self promote. These are difficult times for some realtors… Survival of the fittest. Somehow I think that the realtors posting on this blog might want to change their focus and market themselves to potentially greater fools that are still buying. Not sure who the “LOSER” is…. sigh…. easy come easy go… hope the realtors have some savings for the rough times ahead.

#135 aggie on 08.16.12 at 4:38 pm

Not exactly related to this thread… but I need to share my pressure with someone, and why not you lovely blog dogs?
Those who remember me (may 22 article), will know that I’m trying to sell in a negative equity situation. Paid 248, listed at 237, dropped it to 232,7. NOW expecting an offer in… HALF AN HOUR!!

And I am trembling, can’t think clearly… what should I look for in this offer? I will try hard not to sign anything until I’ve met with the two realtors (I’ve not yet met the one who is subbing for mine while on vacation), then check back here. I looked in my lovely Money Road book for some advice, saw to ask for a good nonrefundable deposit. But how much is realistic?

And I had pegged an article I’d found on the ‘net… now to find my bookmark!

I can’t afford to carry much more debt than what I’d be inheriting at my asking price, but I have two LOCs lined up and ready to cover the shortfall and closing costs. And then start the journey to recovery. It’s actually quite exciting!

cheers, dogs!


#136 Amazing on 08.16.12 at 4:38 pm

#126 an 8% drop might mean something to people who just got less money selling their home. Times are tough for those selling. I see lots of people who are using their home like a bank machine to travel that will be in a lot of trouble in the very near future. The fall, winter and spring will definitely be interesting… even the speculators think the game is over…. that tells me a lot!

#137 HD on 08.16.12 at 4:53 pm

#129 John on 08.16.12 at 3:48 pm


You are an interesting fellow.

I have to give you credit for that.



#138 Realtor # 1 on 08.16.12 at 5:19 pm

Here’s the bottom line: the market in some parts of the country is just experiencing a seasonal ‘dip’.

Now is the time to BUY losers.

Give your local REALTOR® a call before it’s too late.

#139 new-era on 08.16.12 at 5:22 pm

A symetrical system.


US is recovering from its 6 years of housing easing (aka crash). While Canada re-inflated its bubble in 2008.

Real investors are now looking at the USA. With signs of a recovery, where you can actually buy a house which can substain itself and can be written off while in canada you can buy a house and have to provide it with oodles of cash just to keep the life support going.

If the US start to recover, look for interest rates in the US to rise. If Canada doesn’t go with the flow, then the few people who actually has cash will move funds over to the US to collect better returns. Bottom line interest rates will rise.

Also look at Europe @ 7% interest, fund managers must be waiting for signs of a bottom and recovery. Once that start to happen look out Canada, because your going to have to match the returns on investments otherwise money will flock out of the system. With no deposited money left, who will lend out cheap money at 2 % while others are paying 5 to 7 %?

#140 Smoking Man on 08.16.12 at 5:30 pm

#111 John

Don’t know what you are trying to say pick up a few words like false ego. The most successful people on the plant have a false ego. It works. You take risks that can’t hurt you.

John that’s a religios name you probably had a religious up berining and to each his own. If my post offend you. I don’t realy care. Next to garth. I’m the next best read on here suck it up.

#141 Inglorious Investor on 08.16.12 at 5:31 pm

#130 lilyflor on 08.16.12 at 4:00 pm
“the average home price chart above is revealing a double top, you know what that means…”

It means that prices rose, fell, rose, then fell. Sorry, I’m just tired of amateur technical analysts. And for that matter, I’m tired of the so-called “pros”, as well.

Technical analysis is great––for showing you where prices have been. Any value technical analysis may have had as a price forecasting method is now virtually nil by definition since everyone, their dog and their computers are doing it.

I had a great conversation yesterday with an old-time, retired investment banker. He told me one of he reasons options became so widespread is because the average investor became too knowledgeable about stocks.

Once everyone knows the game you have to invent a new game in order to make money.

#142 new-era on 08.16.12 at 5:35 pm

#121 Canadian Watchdog on 08.16.12 at 2:43 pm

Its very simple,

If you actually been watching the buying and selling action around Vancouver you can clearly see what is happening.

Its comparing apples to oranges, so this is what I’ve been seeing

Over the Past year, I’ve been seeing tons of older houses (30 years of older) bought. Then torn down and and new monster house created with several suites in the basement (ground floor).

Its happening all over the lower mainland in BC.
So when that house is resold, its at a higher price, but what isn’t records is the 300,000 to 500,000 upgrades to the house.

1 old house bought at 700,000.
2 new house knocked down and replaced
3 resold at 1,078,000 to 1,500,000
4 Profit a few hundred thousand dollars.

But now alot of these new houses are empty, simply no buyers who can place 20% down on a house over a million. The most these newbies can afford is zero % down, which has been eliminated. OMG

So if they sold for 999,999. They would have a lost

+ transfer cost and etc

So they hold and don’t sell losing monthly interest and expenses of their stale holdings.

#143 Inglorious Investor on 08.16.12 at 5:44 pm

#99 Miss GTA on 08.16.12 at 11:48 am
“Um… can someone please explain for this newbie how sales can go down but average prices still go up??”

The short answer is: supply and demand. Demand can drop, resulting in fewer sales. But if supply drops faster, prices can still go up.

(This is a general statement and does not address the manipulation of data or any other methods one could use to distort reality.)

#144 truth hammer on 08.16.12 at 5:46 pm

#120 West….sad but true…the past thirty years of Liberal Party gag laws and enforced social steerage through the media and schools have led to an overall helpless complacency among a distinct group of Canadadians…but not all.

I have been reading through the comment/tweet sections of the most inane of the reportings and a huge number of Canadians are actually furious at having been duped gagged and lied to….

Under the old Liberal system of a controlled media and national gag laws against free speech and expression, the majority of people were actually fooled into thinking that their opinions were in the minority whenever it was obvious that the public disagreed with the Liberal spin.

Anyone who said anything contrary to the Liberal Party crazies was set upon by bus in campaigns supported by Liberal Party advertising in the media paid for by the taxpayer. We had the longest running, most vicious and decietful propagnada campaign run against a free people by a government that has ever occured under the flag of a democratic country.

What has come out after the fact that almost no one outside the party faithful supported the Liberal platform but with gag laws and a omplete control of the countries media no one was able to expose the liars for what they were.

We have yet another example of institutionalized corruption at another Crown Corp in BC as ICBC is forced to open its books and expose that thousands of fat greasy bureaucrats have been gorging themselves out of the public purse with outrageous executive incomes for low line clerical jobs that could be done for minimum wage.

And yet…even after firing the top pig…he will stay on as a ‘consultant ‘ and continue to double dip on top of his disgudtingly large severance payout…..and no word on the thousands of overpaid pigs still on the payroll. What good to the taxpayer if only one is forced to fall on his sword while leaving behind a legacy of disgusting corrupt behaviour….and thousands of overpaid pigs still on the payroll.

Didn’t we hear from the chief wingnut at Transit recently that they will continue to pay the double dipping ( wages and pensions) police force even after the fare gates are screwed in?

They don’t have this many police on the platform in New York…….this is what is called instituional corruption where instead of cash envelopes these pigs get the union bosses to write the corruption into civil contracts and stick us with the bill!!


Corruption and nepotism rule the day at all crown corps as we have found out..again recently that Hydro had over 6000 public servants raking off more than $100,000 per year while the average one person income in BC is less than half that with zero pension and none of the gluttonous perks that the civic servants gobble up.

This is happening at the same time as 900,000 households in Canada are forced to use the food bank each and every week.

Shame shame shame on the pigs in the civic service…..but of course these pigs feel no shame……

#145 Herb on 08.16.12 at 5:51 pm

#120 Westermoron,

perhaps Canadians would notice and do something if you, Truth Hammerer and similar blog roaches were to present them with cold, hard facts, rather than your overheated opinions.

#146 JULNICAN on 08.16.12 at 5:51 pm

Whenever I read this blog I get so scared that I am constipated for a week.

#147 OlderbutWiser on 08.16.12 at 5:53 pm

“Everybody over fifty seems convinced the future will be as dominated by inflation and rising asset values as was the past. It’s a critical error.”

That is much too general of a comment. I think that what we will see is inflation in things that we need – food, gas, utilities etc. We are seeing that now – have you been to the grocery store lately? Have you looked at the increase in your hydro bill?

Where we will be not be seeing inflation (and in fact will experience drops in value) will be in housing much like they have experienced in the US, and in technogadgets (ipads, big screen tv’s, cell phones etc).

I have no idea of what the impact will be on equities (although I am fully invested in dividend yielding stocks) or on gold for that matter (although I do not own any).

Just my 2 cents from someone who is over 50.

#148 Stickler on 08.16.12 at 5:58 pm

– sock market volume is super low (includes ETFs, REITs, Perfs),
– Retail investors continue to sell,
– Most economic indicators indicate a slowing (not all…but most),
– US fiscal cliff approaching,
– the only buy ins are due to rumors of central bank easing policies
– Europe is a basket case
– China is slowing
– Brazil is slowing
– India is slowing
– low yields on bonds
– low yields on REITs
– low yields on most quality dividend payers

If you are not manager of an investment fund (that is required to be invested) why would you be in the market at all right now?

Wait, and Vulch is my (and many many many investor’s) thought now.

Cash is king.

And real estate in Canada!? that so so 2011.

If you can’t put 20% down and pull significant positive cash flow (after taxes, condo fees, maintenance, property management, depreciation, etc) then you are relying on appreciation…in today’s world good luck with that.


#149 $$$BPOE#1 on 08.16.12 at 6:19 pm

The pause that refreshes. Top dogs like BPOE and Rogers have been warning you for a long time now. Vancouver represents the ultimate hard asset. You do not want to be invested anywhere else than Vancouver and other hard assets.

In a riveting interview on CNBC, legendary investor Jim Rogers warned Americans to prepare for “Financial Armageddon,” saying he fully expects the economy to implode after the U.S. election

#150 Blue Monster Lover of Meats and Vegetables on 08.16.12 at 6:39 pm

Truth Hammer, where abouts in Asia are you when you’re not in Canada and why did you pick that place and are you working there, own a business, or retired?

#151 Stickler on 08.16.12 at 6:57 pm

@ #149 $$$BPOE#1 on 08.16.12 at 6:19 pm

“Vancouver represents the ultimate hard asset. You do not want to be invested anywhere else than Vancouver and other hard assets.”

>>HA! Hilarious!

#152 Snowboid on 08.16.12 at 7:06 pm

#144 truth hammer on 08.16.12 at 5:46 pm…

You are hopelessly confused, your descriptions of Liberals (and don’t for one minute to try and convince us the BC ones are real ‘Liberals’) are in reality a very concise explanation of the current Conservative governments, federally and in BC.

Your hate on for all public servants is not only unhealthy, it reveals more about your own problems than others.

Sadly, you often offer valuable points, but they are drowned out by the serious chip on your shoulder.


#153 Steve on 08.16.12 at 7:13 pm

#132 Investx on 08.16.12 at 4:10 pm

Well, I guess my mistake was trying to put it in simple terms. Rolling average is easier to understand and still demonstrates the idea that they are averaging out their reults to create a slow changing metric, without getting into the details of regression.

Please, just google the technical explanation. Good Luck.

#154 Canadian Watchdog on 08.16.12 at 7:13 pm

Here’s a chart with constant home prices showing how GTA’s average price can go up month-after-month while sales are declining, resulting in a 1/3 market contraction by sales and dollar volume (liquidity).


This shows how a market can become illiquid far before the average price declines, leaving sellers trapped with less buyers and value on offers.

#155 aggie on 08.16.12 at 7:16 pm

Sold! Whew, I feel like one of the luckier idiots, escaping just in the nick of time without having to eventually declare bankruptcy. I shouldn’t speak too soon… closing is at the end of September… down 4 from my last asking price. Fingers crossed that it goes down smoothly.

Meanwhile, will be browsing rentals and RVs and RV pads, not sure which it will be for me. Have a few friends willing to rent me a room… but in areas like Maple Ridge or Guildford, and if I’m to pay down my closing cost debts, I want to be within cycling &/or transit distance of work in the big city. Bby, actually… just need a place to park my graying head at night…

A new life begins, a wiser one full of a different kind of learning, one that should’ve started 5 decades ago for me and my Boomer peers, especially women. I’m looking at my RRSP paperwork for the first time ever! Hmm, 2.4% average return over the past 12 months in one, and we won’t mention the one in a GIC!

And I guess that’ll be my last update on my situation. Thanks to all of you who’ve commented and encouraged, most recently Derek R. You are all my heroes.

To anyone who’s wondering where to start the journey out of idiotville, I urge you to get Garth’s book, Money Road. I jumped into the real estate section first, gobbled up his advice, and put all my focus into the marketing and saleability of my home.

Now, I’m going back and reading the whole dang thing from the beginning! At least twice…

#156 Just Checking on 08.16.12 at 7:18 pm

#138, Realtor #1 said “Now is the time to buy losers.”

Why would anyone want to buy a loser?

#157 TurnerNation on 08.16.12 at 7:18 pm

Chadley, name of your next band: TurnerNation

Try for a gig at Parliment Hill’s Canada Day event.

#158 aggie on 08.16.12 at 7:20 pm

p.s. and how could I not single out the man himself to thank!!!

Garth, you’re amazing, and we’re so lucky for your having one of those rare personalities that likes to share their very precious financial knowledge lined with something just as rare: common sense.

Not sure about the marriage counseling side of you, tho…

#159 Jen on 08.16.12 at 7:21 pm

@Carpe Diem
In your dad’s time owning was a lot more affordable than now. Actually, your dad should have bought a house – if he did, you would have inherited one. The problem now is that a house (or home) is a lot less affordable and puts people in a lot of debt, which is unnecessary.
Renting is not always better than buying, but it is in a bubble.

#160 Derek R on 08.16.12 at 7:27 pm

#135 aggie on 08.16.12 at 4:38 pm wrote:
And I am trembling, can’t think clearly… what should I look for in this offer? I will try hard not to sign anything until I’ve met with the two realtors

Don’t worry, Aggie. Your realtor should discuss all that with you and bring along any paperwork that needs signing. So just keep calm and don’t get too downhearted if the offer falls through or isn’t high enough.

#161 Can it be? on 08.16.12 at 7:44 pm

Realtor #1… Slow day at the Remax office? Wrong blog to try to drum up business :)

#162 Nostradamus Le Mad Vlad on 08.16.12 at 7:51 pm

#130 lilyflor — “the average home price chart above is revealing a double top, you know what that means…” — Contemplating on the forthcoming Boomergeddon earlier today, it reminded me that humanity (particularly the west) may end up turning out like this. Should one’s naughty parts be classified as appetizers or desserts?
4:06 clip 41 years ago, Tricky Dicky abandoned the gold standard and, on cue, the Chinese may bring it back woth their own currency, and China — importing tons of gold; The feds. destroyed the housing market; GS and Corzine not prosecuted; Long article, so here is a precis: “If i were the “CIA \ Rothschilds-elite \ controllers”, i would seek to design the running of Anonymous and Lyndon LaRouch … and even Mike Rivero with his MENSA brain and NASA heritage. When you hunt Fox you have beaters. When you hunt Pheasant, you have beaters. When you hunt Rabitts, you have beaters … if you own the estate. If you learned like i did, you trained a dog specialized in single ‘take’ hunting. You learned to hear the halo-jump landing in the mountain’s winter forest of the 10th Mountain Division coming in for training exersises of their new class.”; Bristol Pounds Banks and banxters reap what they sow; One Chart shows Obomba’s and Ryan’s debt projections as almost identical; Short clip Coucilwoman breaks law to feed homeless; Silver Day trading algos? Jobless claims increase, while Housing starts decrease; The Emerging One World Economy Could be that’s why China is looking at a different option; BBB Big banks bluff.
Sinkholes, and not the financial type; Scriptwriters This is how the movie is supposed to play out; Oliar Trust yourself; NASA “The $850 billion Wall Street bailout cost more than NASA’s entire 54-year existence.”; US govt. buying ammo. So what? All they can do is kill these physical bodies, but life continues; Gun Control The US authorities might hit some roadblocks here; Mitt Romney Draft dodger; Big pharma targets free speech; Degenerative brain disease Af’stan vets. getting it.
disciple — here’s one for you. The only difference is that Soros is pulling Obomba’s strings, and both are leading the US down the left (China – USSR’s) path.

#163 TurnerNation on 08.16.12 at 7:54 pm

#141Inglorious Investor on 08.16.12 at 5:31 pm

This is why options must be sold not bought. Write covered calls and cash secured puts (on stocks you wish to own) only.

#164 fattycakes on 08.16.12 at 7:56 pm

#141Inglorious Investor on 08.16.12 at 5:31 pm

” And for that matter, I’m tired of the so-called “pros”, as well….”

“I had a great conversation yesterday with an old-time, retired investment banker. He told me …”

I though you were tired of the “pros” retired or not.

#165 Westernman on 08.16.12 at 7:59 pm

Herbie @ # 155
Since when have Canadians been interested in facts? No, Comrade Socialist Herbie, the nation is the way it is not because facts weren’t available but because Canadians ( with the rare notable exceptions ) just don’t, as I stated previously, just don’t have what it takes… period.

#166 Daisy Mae on 08.16.12 at 8:06 pm

#55DR. WAYNE on 08.16.12 at 12:23 am
“Following condo prices in Ladner, BC … listings increasing … prices are ‘not’ decreasing …”


I find that so amusing. Prices are not decreasing? Well, sellers can ask anything they like. No buyers = no sales. LOL

#167 Devore on 08.16.12 at 8:09 pm

#132 Investx

HPI is a number you either trust, or don’t trust. It’s explained in a document I linked here a few days ago. But it matters nothing, because you do not have the raw data, nor do you know what a benchmark property looks like. You can take the HPI number and say “hmm, ok”, or you can say “yeah, and?”.

#168 City that smells like it sounds on 08.16.12 at 8:18 pm

Post #56

#1, would your handle stand for Regina?

Why yes, yes it does! Garth when are you coming by?

#169 Joke Anagan on 08.16.12 at 8:21 pm

This whole topic is apparently taboo here in the okanagan. Everyone here is going to be shocked. It’s slightly more awkward than talking about sexual dysfunction. I explained this and all the guy said after a nice long silence was “I like to make equity in a house” ok then…

#170 jess on 08.16.12 at 8:21 pm

How come the debt clock think tanks don’t mention this ?

Alan Grayson questions the Inspector General of the Federal Reserve – 05/09/10
3minute mark

#171 John on 08.16.12 at 8:35 pm

Smoking Man wrote:

“#111 John

Don’t know what you are trying to say pick up a few words like false ego. The most successful people on the plant have a false ego. It works. You take risks that can’t hurt you.

John that’s a religios name you probably had a religious up berining and to each his own. If my post offend you. I don’t realy care. Next to garth. I’m the next best read on here suck it up.”

Smoking Man…taking risks with a false ego so you can’t get hurt? That’s what a property virgin does right?

There are many ways to be “the Greater Fool”…..the thing about addiction is that you can’t even imagine acting on your own behalf. There is no “you”.

Same identity crisis as people loading debt on themselves to create chaos. Lost. Following.

Being a legend in your own mind doesn’t change anything.

Who cares if you can talk angles? It’s YOU that counts. Addiction is de-selfment. So the concepts can’t sink in.

#172 karl hungus on 08.16.12 at 8:41 pm

You people are hilarious. If CREA or CMHC call for increasing prices you all yell “propaganda from realturds!!” yet if they call for falling prices you take it as the bible. Cant have it both ways folks.

Edmonton has already had its decline, its up from here. Look at the underlying fundamentals, its all pointing up.

Like your toes. — Garth

#173 Boomer21 on 08.16.12 at 9:00 pm

#148 Stickler, of course the “Sock Market” is super low,it’s summer! Who wears socks! Ok, just kidding:)

#174 realtors are in a panic on 08.16.12 at 9:09 pm

Look at the many out of work and can’t make a sale realtors posting on Garths blog in a panic. If the market was doing well these realtors wouldn’t be here. Very sad desperate realtors.

#175 Inglorious Investor on 08.16.12 at 9:19 pm

#164 fattycakes on 08.16.12 at 7:56 pm

I was referring to “pro” technical analysts. Please choose more relevant nits to pick next time.

#176 Smoking Man on 08.16.12 at 9:37 pm

#71. John

Seams I hit a nerve. The religous chirp. Or the fact that peole love me more than you.

John I’m a liar did you swallow the cool aid.

Just cause I say I can speel and drink to oblivion don’t make it so.

My work is never done with grass hoppers

#177 Blue Monster Lover of Meats and Vegetables on 08.16.12 at 9:44 pm

Garth, speaking of things turning up, like karl’s fungus toes, I hope you sold your gold at $1900 and I also hope you bought back again at $1530 or soon because the US long bond has been dropping like a stone for two weeks now which means the real threat for QE three is mounting and therefore so is $2-3k plus gold.

#178 Derek R on 08.16.12 at 9:47 pm

#155 aggie on 08.16.12 at 7:16 pm wrote:
Sold! Whew

Congratulations, that’s great!

#179 Smoking Man on 08.16.12 at 9:54 pm

And John. Beckey was super hot. Think about it how many hot Becky’s have you met. Why would the voice name the hotest angle Becky. Beets me.

John. Baptize some one. Get it out of your system

#180 cramar on 08.16.12 at 10:53 pm

#155 aggie

Wow! Very inspiring. Way to go! Another dawg saved from the jaws of death. Wishing you success as you go forward.

#181 Snowboid on 08.16.12 at 11:05 pm

#165 Westernman on 08.16.12 at 7:59 pm…

You poor misguided soul, stooping to shallow insults.

Based on what I have read, Herb is twice the person you could ever hope to be, and without doubt, much smarter.

#182 Westernman on 08.16.12 at 11:38 pm

Snowboid @ # 181,
You may consider it as you wish but if you have followed Comrade Socialist Herbie’s posts calling him as such is a simple statement of fact – nothing more – nothing less…

#183 truth hammer on 08.17.12 at 12:04 am

#150 BML…… I have chosen Thailand …specifically Bangkok …there are a lot of great spots….it is very inexpensive and the lifestyle in a quiet neighborhood is first class. I highly recommend it.

I also suggest that you do your best to stay away from the ‘usual suspects’ that is the ex pat communities that are easy to find and just as easy to avoid. These places are full of suckers who pay way too much…..The Thai’s love suckers as much as anyone.

The Thai people that don’t deal with tourists are super nice………you have to work at being accepted..through cultural awareness….and adapting to local customs but once you get to know the place…….heaven.

A retired couple wanting the simple life can rent a nicely furnished one bedroom apartment…get all the tricks installed……eat well ….travel around the city….shop….live a swimming pool lifestyle all winter long for under $1000 CDN for all basic costs. Lot’s do. I rented ny last place..hi rise…furnished…2 bed…2 bath…1600 sq ft….with everything…concierge & security….$700p/m. Never cook a meal at home besides coffee…and sometimes it’s too hot for that….ice coffee is the thing……besides…a nice breakfast steps away is $1….why cook?

Of course the sky’s the limit in BKK…its a big modern city…….and you can spend as much as you want…..but I know a few Canadians who have retired on little money ( as most Canadians do….. if they aren’t blood sucking evil civil servants) and they do quite well.

Of course if you booze a lot, smoke…. travel to the outside etc and flash around you can spend as much as you like.

#184 cynically on 08.17.12 at 3:08 am

Hey Herb, you’ve got the cold, hard facts that you seem to be missing – on the posting just before yours – #144 – but since it’s from truth hammer, I suppose you won’t believe any of it. Look in any B.C. news outlet tomorrow to see the ICBC story and note how this greed has hurt the average working Joe at ICBC. In B.C. there’s also the transit and hydro boondoggles and it doesn’t seem to matter which party holds the purse strings as they all seem to be incompetent and love feedin at the trough. I can remember a few years ago when the government of the time had to let their choice as head of Lotto go and he went out the door with a $500,000 golden parachute. It’s mostly taxpayer money but that doesn’t seem to bother wealthy men like you, Bill and Snowboid. If the waste of money isn’t a problem for you guys, how about the inadequacy and incompetency of the pols who bring on these scandals. Is it politcal greed or a general Canadian complacency that allows them to happen and I’m sure they happen in the other provinces and I know they do in Ottawa but as long as the the three of you and the Canadian public is willing to put up with it, we’ll always have it.

#185 The American on 08.17.12 at 9:57 am

I see all the buyers of “dd” and “bpoe” must be drying up and moving to the U.S. The desperation of these two wack jobs is all too funny!

#186 Herb on 08.17.12 at 10:07 am

#184 cynically,

the only “hard facts” I found in Truth Hammerer’s comment is that governments at all levels look after their friends and supporters, that the greedy are delighted to pile onto this gravy train, and that it has nothing to do with public service or political stripe. Hardly new discoveries.

Now if you, Truth Hammerer and Westernmoron would stick to finding and presenting facts, you might convince people. Overtorqued wingnut rhetoric won’t cut it.

#187 Herb on 08.17.12 at 10:15 am

#181 Snowboid and #182 Westernmoron,

being called “Comrade Socialist” by our unlearned friend is not an insult and isn’t even a statement of fact. Considering the source, it is a high compliment that distinguishes my poor self from the moronic Right.

#188 Mark P on 08.17.12 at 1:47 pm

Always love how deep you go in your posts…

– People think rates will stay low forever… assumption based on???

– They view real estate as riskless and markets as reckless… belief based on?

– They think nothing of 95% or 100% leverage… naivety based on?

– Besides, real estate always goes up. Their parents said so… intentional “head in the sand” based on???

PS Love your toilet pic… too funny.

Based on… people like you. — Garth

#189 Westernman on 08.17.12 at 6:06 pm

An open statement to all who dispute the moniker “Comrade Herbie” as being an untrue or unjust description…
Lets review shall we?
1st. Comrade Herbie has never met a tax he didn’t like.
2. Comrade Herbie 100% supports government control of everything at all levels at all times.
3. Comrade Herbie is “all in” on this political correctness nonsense.
4. Comrade Herbie is of the opinion that productive have a moral and ethical obligation to give the fruits of their labours to bums, no goods and layabouts…
Conclusion : He’s 100% Socialist/Communist – hence the name “Comrade Herbie”… period.