Parental guidance

After watching their parents’ finances destroyed along with the value of the family home, lots of American kids swore off real estate. In fact, the home ownership rate tumbled from 69% to 62% in five years, after taking 45 years to gain that ground. Today the same proportion of Americans own houses as when John F. Kennedy was president.

By the way, the Yanks spent about $2 trillion in the last few years sheltering, subsidizing and bailing homeowners. Just imagine what the rate might be if not for that.

How do we compare? Well, 70% of us own houses, even though they’re on average twice as expensive as in the US. This explains why we now have substantially more debt, because after-tax incomes in Canada and the States are roughly similar. And not only do we pay far more and shoulder comparatively huge debt, but Canadians cannot deduct mortgage interest or property taxes from their incomes. Or get a 3% mortgage fixed for 30 years.

Despite making the same, paying more, being further in debt, more heavily taxed and massively exposed to rate risk, people who live here think they’re financially superior. In Canada it’s estimated that 50% of all new-home sales are made to first-timers, about 95% of whom don’t have enough money to buy a Mazda. This can only mean we continue to raise the horniest offspring on the planet, then goading, pushing and shaming them into a dangerous asset and decades of indenture. We call this parental love.

How insane is this? Much. A new study by RateSupermarket says at the rate we’re going the average home will cost $553,000 by 2020 (it’s now $350,192), and the average college grad will need to save for 12 years just to get a 5% down payment. To double that to 10% will take 21 years.

This assumes a modest initial student debt of $27,000, a 3% rate of return on money saved and annual salary increases of 3% from a $40,000 starting point. It does not take into consideration the normalization of mortgage rates (the average over 25 years is 8.2%), increases in personal taxation (count in it) or, conversely, the impact of a housing correction.

The conclusions are obvious. First, real estate’s beyond the grasp of most kids. Second, nobody should expect newbie buyers will continue to be a major market force. How can they? Surely we don’t send all these damp, warm bodies to university for four to seven years so they graduate and self-destruct.

Do the math. A $400,000 one-bedrooms plus den condo bought in Toronto actually costs $412,000 at closing, plus a CHMC mortgage insurance premium of $10,780. So with 5% down (that’s $20,000), the mortgage ends up being $403,000. The mortgage at 3% is $1,950 with a maximum 25-year amortization. Property taxes and condo fees would raise the monthly to about $2,400 (plus insurance, parking, utilities).

So five years later that’s $144,000 in payments, of which $59,800 was bank interest. If there’s no correction and the kid sells for what she paid, less 5% commission, the proceeds are $380,000. Of that $344,200 is still owing to the bank, which leaves $35,800, of which $20,000 is the down payment. The balance is $15,800. Deduct that from the $144,000 paid to live there, and you get occupancy costs of $128,200, or $2,136 a month.

And what does the same unit rent for? About $1,700. So if the difference – $436 a month – were invested for five years at 7%, it would become $31,832. Yes. Enough to buy a Mazda. A nice one. Or three Kias.

But this won’t happen. Odds are a $400,000 condo in Toronto or Vancouver in the autumn of 2012 will be a $350,000 condo in a year, and then devalue slowly as more inventory streams on to the market, as rates start to inch higher and it dawns on everybody that real estate is a dumbass place for a 24-year-old to get ensnared. That means buyers now will be absolute losers later, their financial fortunes eclipsed by their renting peers.

Did I even mention the loss of mobility and freedom to a young person that a mortgage brings? The premature maturation? The inability to say ‘screw this’ and hit the road? The death of independence? The trading of adrenalin and adrenalin …for a balcony?

Such stuff used to matter. Before parents became helicopters.

171 comments ↓

#1 T.J. BONES on 09.26.12 at 9:27 pm

Garth It has been rumoured that people wanting to get out of their condo,s are not paying the fee,s and letting the boards seize the property, does this mean they are off the hook?

No. — Garth

#2 Randy on 09.26.12 at 9:33 pm

When housing stops appreciating, it will become more apparent how much it really costs to sell and buy another property….I’ve always thought that the transaction costs for agents, brokers, mortgage insurance, land transfer taxes and lawyers were very obscene…..The tide will go out…

#3 Tomavitch on 09.26.12 at 9:34 pm

Amen. We sold in april, are debt free and are trying to educate our kids. Thanks for your good work Garth. We saw you in surrey in 2010 and read your book.

#4 TurnerNation on 09.26.12 at 9:35 pm

I think this is Smoking man’s bank balance? Looks real enough…
Quite amazing.

http://imageshack.us/photo/my-images/545/photo10copy.jpg/

#5 Oldie on 09.26.12 at 9:36 pm

Great, as usual.

First!!!!???

P.S Please come to Halifax!

#6 Little Phil on 09.26.12 at 9:36 pm

Garth, what say you?

http://www.theglobeandmail.com/globe-investor/top-investors-expect-financial-tsunami-in-next-year-survey/article4569722/

Lehman Brothers again?

Say it ain’t so!

It ain’t so. The sample is 300. Get serious. — Garth

#7 ann murray on 09.26.12 at 9:37 pm

fuuuuuuuuuuuuuurrrrrrrrrrrrrrrrrrrrrrrssssssssstttttt GARTHO!

#8 East Van on 09.26.12 at 9:38 pm

Bailing Homeowners??? – You say that with a straight face? The only “people” that got bailed out were the corporations.

Wrong. — Garth

#9 Uh Oh Canada on 09.26.12 at 9:40 pm

“Despite making the same, paying more, being further in debt, more heavily taxed and massively exposed to rate risk, people who live here think they’re financially superior.”

I completely agree. Where did this Canadian superiority come from? As a family, we make an annual trip to the U.S. I’ve noticed that they’ve become more humble since 2009. We’re even treated better now at the border crossing.

#10 Mark on 09.26.12 at 9:41 pm

Garth, a question I’ve always had. Why, if house sale prices are recorded at local city halls, is there not proper real estate stats collected by gov’t (such as by stats can) instead of only getting information from banks or realtors, with their vested interest?

#11 Marco from van on 09.26.12 at 9:45 pm

Garth, another great post. You do a service to your nation that will not be understood by most until too late, but for those who do you have changed their lives in ways they will understand many years from now.

You also do a great service to people who clearly have no other social outlet.

I think this is vital to the greater benefit of the society we live in. Folks like Smoking Man, who have no other outlet to vent their anger towards the structure we live in.

I enjoy their contributions as they provide me with a benchmark that I use to gauge the intellect of the “average”. This has served me well – so thank you.

SM… Let’s just say my teachers may have been proud and may have not. My English, Danish, German, Italian, French and Spanish teachers thought I was mediocre despite being fluent. My Chemistry, Physics, Calculus and parallel algorithms instructors loved working with me, and my philosophy instructor is still a very good friend of mine.

Next time I’m in Toronto… I’m there every two weeks on business. I’m also in Europe and Aftica quite regularly, so I’m happy to meet whenever your navel gazing dominated schedule allows – I’ll even buy you a bottle of “track 5”. We can take a short video and post it on YouTube for everyone to see. I know who I am… Do you Mr. “I chose to spell like a 5 year old to rebel”
?

Sorry for high jacking the comment section, but in doing that, I’m no different… At least I read over 450 entries before doing this…

#12 Mister Obvious on 09.26.12 at 9:45 pm

The premature maturation?

That sounds obscene.

#13 vatoDETH on 09.26.12 at 9:47 pm

http://www.theglobeandmail.com/report-on-business/economy/economy-lab/why-cheap-money-trumps-job-fears/article4566222/

#14 Elmer on 09.26.12 at 9:49 pm

Well 40k a year (an optimistic salary for a fresh grad) is about $2400/month net. So you’re not getting a 400k mortgage with that salary, even if you’re debt-free, let alone if you have student loan payments and car payments to make.

#15 CP on 09.26.12 at 9:49 pm

Love it Garth. Thank you for this post tonight

#16 Vangrrl on 09.26.12 at 9:51 pm

“Such stuff used to matter. Before parents became helicopters.”

Bang on! As always…

#17 Mic D'angelo on 09.26.12 at 9:52 pm

Owning a house or condo as your primary residence was not investment or retirement nest egg but a place to live. Savings and investments that you would put away every month was for a person’s future and not real estate speculation and selling a home you need to live in and buying a bigger home because you would make loads of money. I guess people are going to learn the hard way that there is not set it and forget it way of building wealth. It takes saving, investing,patience, discipline and realistic planning over time to build for your future. There is no easy way out.

#18 lilyjoe on 09.26.12 at 9:57 pm

Garth, you paint the true description of youth and growing up. Being able to hit the road and adventure is what life is all about ~ authentic memories are good finacial investments ~ not granite, stainless and chains of debt. There is nothing wrong with living within your means at any age

#19 Kevin on 09.26.12 at 9:58 pm

Hey Garth – why aren’t long fixed mortgage terms – like 30 years – available in Canada? Is this due to some government regulation?

The Bank Act. — Garth

#20 Stupesing in Cabbagetown on 09.26.12 at 9:59 pm

Thank you Garth for this excellent blog entry! Whenever I hear of a very young adult buying a condo and I ask “why would a 23-year-old want to assume $300 thousand worth of debt?” people look at me as though I have two heads. “Why, to build equity” is always the answer. “Why throw money away on rent?” Thank goodness I have Greater Fool to visit nightly for a dose of reality (and an entertaining read too).

#21 Smoking Man on 09.26.12 at 10:02 pm

Garth do you hounestly think the olive veal devouring dudes that live in Woodbridge no anything other than real estate.

You are so wrong , you never take into account the mentality of the herd, the culture of the field. The mentality of Canada.

The USA is not Canada, Canadians are not risk takers, they don’t see real estate as danger . It becomes a self fulfilling prophesy.

If you took your show south of buffalo. You would be a rock star. Here your a munjee cake.

#22 Smoking Man on 09.26.12 at 10:05 pm

Little phill. I copy righted Gartho. Be carefull

#23 Smoking Man on 09.26.12 at 10:10 pm

4 turner nation

That’s a damn good guess. Have u tapped into the universal consioness consolidator.

I’m impressed

#24 Led on 09.26.12 at 10:11 pm

enough of vancouver and to. what about mtl? apparently 50% tax of income is insufficient. we get to keep only 45% soon, even retroactively. are we going to third world status in a hurry? the pq are going to ruin us

You picked ’em. — Garth

#25 DJB on 09.26.12 at 10:19 pm

At 24 years old I was traveling around the world for 14 months shagging girls on every continent.

Seems to me the banks got Gen Y right where they want them, over a barrel with there wallet hanging out.

#26 Teulon on 09.26.12 at 10:22 pm

[email protected]#1
Condo boards don’t take over units in default. Typically they have the right to register a lien on title which would be subordinate to the first mortgagee (ie the bank). Unpaid condo fees would only be paid if the mortgage debt is satisfied after the bank seizes the property.

#27 45north on 09.26.12 at 10:28 pm

the Yanks spent about $2 trillion in the last few years sheltering, subsidizing and bailing homeowners.

yep, they did, at one point the Fed Government gave $5000 to someone who had never owned a house to buy one. Bailed out Fanny Mae and Freddy Mac.

Once the news sinks in, I’d say 2013, the NDP will push for bail outs – reversing the change from 30 year to 25 year mortgages, loosening credit, direct cash hand outs to homebuyers, raising the limits on CMHC and Genworth. Oh and laws, policies and regulations to delay foreclosures.

all for nothing, as Mark Hanson says each mortgage modification is a new mortgage worse than the one before it. There are many “home-owners” in the US who are playing the system. The banks are playing the system. Professionally.

my plan would pay a family $1000/month for a year once their house was foreclosed. The family would have to apply to the Government, the bank would have to confirm that it did indeed foreclose. Oh yeah, the bank could only claim the mortgage insurance if it did foreclose. And obviously, the bank would have to book its loses.

#28 Smoking Man on 09.26.12 at 10:33 pm

11 Marco

I have a social outlet. Hookers with toug studs. I glad your teachers liked you. Your writing skils impeccable, so am I to be impressed. Call the markets and major tren changes for 4 years straight down to the minute and I will blow you. There is only one smoking man. How ever I am weak free bozze. Next time your in town. I’ll hook you up. Cost? 6 wines.

#29 Christopher Lackey on 09.26.12 at 10:33 pm

Not to be smug, but people in my generation need to wake up to the consumerist scam. Our boomer parents can be forgiven for being so attached to their creature comforts. People my age, on the other hand, have no excuse to not have their eyes open. I have greatly increased my liquid assets in three years with nothing fancy, making twenty bucks an hour, very conservative investing, and just cheap rent and living in the city centre, and taking vacations every year. It’s amazing how it piles up even with the sad lower middle class wage a university education gets you now when there’s no car, car payments, insurance, gas, flat screen, cable, iphones/galaxies, nightly take-out, daily lattés, and wall to wall stainless steel (or student loan payments) eating it up. But I shouldn’t spoil my good fortune. I’ll just keep nodding at all the mainstream media claptrap everyday about how much “worse off” and “indebted” my cohorts are. Maybe they are but I have no sympathy for them if they’re making any of those choices

#30 dd on 09.26.12 at 10:34 pm

Great calculation. Now do this for the US financial position.

#31 randman on 09.26.12 at 10:44 pm

Forget about real estate…

Here’s where the big money is…..

Hope you guys like threesomes!!!

http://www.calgaryherald.com/technology/Hong+Kong+millionaire+offers+million+marry+daughter/7303667/story.html

#32 Ryan Tynd on 09.26.12 at 10:44 pm

wow, strong article – did you actually write this yourself Garth :) just kidding

lots of great points hitting home, so many things indicate a correction is coming, yet it seems like its taking forever.

well a slow correction might be a lot more painful than a quick one like in the US – time will tell.

#33 Grim Reaper/Crypt Speculator on 09.26.12 at 10:44 pm

I was in a good mood….(filled my quota !!!)..so I let other be ahead of me….

#34 Ronaldo on 09.26.12 at 10:49 pm

”Property taxes and condo fees would raise the monthly to about $2,400 (plus insurance, parking, utilities).”

And that is after tax dollars. Yikes.

#35 Aussie Roy on 09.26.12 at 10:57 pm

Aussie Headlines

It’s always a good time to buy

Economics correspondent Stephen Long.

STEPHEN LONG: It was the boom town in the back blocks. Moranbah’s in the Bowen Basin, 1000 kilometres from Brisbane and about 200 kilometres from the coast. The heart of coal country or the middle of nowhere, depending on your point of view. It’s home to thousands of coal miners and, until recently, it was heaven for real estate agents.

What did they sell for? $850,000 to $1 million.

STEPHEN LONG: Now no property at Moranbah would fetch anywhere near $1 million. Vendors are struggling to find buyers at any price

JOHN WOOD: The real estate market’s taken a complete turn from where it was last year.

STEPHEN LONG: So what’s happened to prices?

JOHN WOOD: Approximately 25 per cent fall on average.

STEPHEN LONG: And in the worst-case scenario?

JOHN WOOD: Worst case, probably 35 per cent from the peaks last year.

Keep reading it gets better

STEPHEN LONG: Good time to buy as far as you’re concerned?

JOHN WOOD: Yeah, that’s correct, yes.

STEPHEN LONG: I’m surprised to hear a real estate agent say that.

JOHN WOOD: (laughs)

http://www.abc.net.au/news/2012-09-26/coal-town-real-estate-crashes-as-commodities/4282192?section=business

#36 Telecon on 09.26.12 at 10:59 pm

When real estate prices in this country really start to turn down, our government (NDP or Conservative) will go into full blown socialist bailout mode that will make G.W and Obama blush. Born a welfare state, always a welfare state.

#37 Kasia on 09.26.12 at 11:00 pm

What is with the news Stations reporting that housing has gone up since 2008? Of course they did! Didn’t we have a correction in 2008? They do spin it however they want to….as long as it looks like market keeps going up!
Why not give me a YOY stats, apples to apples. I guess they think we are all stupid to buy that manipulated crap! So mad!

#38 MrHulot on 09.26.12 at 11:03 pm

Garth, you mention in Canada the mortgage is not tax deductible as in the US. That is true, but the US homeowner pays capital gains assuming there is a profit whereas in Canada you get to keep the profit on your home tax-free.

Not if they have owned for a short period of time. — Garth

#39 Knucklewalker on 09.26.12 at 11:03 pm

Garth,

Keep talking reality but the other Reality is the market hasn’t crashed… Still waiting for your ass to be right…

#40 Van guy on 09.26.12 at 11:12 pm

A drop of 50k in a year? Didn’t you say 30% in Van, followed by a stagnant market?

#41 truth hammer on 09.26.12 at 11:14 pm

G-Man…you’ve made som bold assumptions as to the employment prospects of todays graduates……which right now are pretty freakin dismal…..and it’s not all about the recession that has youth unemployment at 25%++. There is also the systemic and institutionalized corruption among the current nest of civil service vipers.

You speak of students and grads….lets start there as an example……unionized teachers are the worst, greediest, sleaziest, uncaring anti youth gluttons out there. Why……because the highest percentage of them have used the professional day meetings to drum up a scam. The teachers of today have feather bedded their pension arrangement so that they can retire early…..in their mid forties…..and collect a full pension….85% of the last weeks work….usually at $100,000 +++ per annum. They then take their 85 grand and revert their status to contractor, retain their old job…in the same school, in the same clasroom, teaching the same students….at a rate of $250 per day. They do this approx 40 weeks a year and pull in an additional $200,000 per year ( more than they made as a regular teacher) . These gluttons do this to starve off the next generation of teachers who have recently graduated and have no prospect of working while the union gluttons wallow in their little ‘teachers union only scam’.

We get screwed as taxpayers having to pay double for teachers that are lazy, out of date, fuctionally obselete and usually smell of an impending rotten death.

In Vancouver we see union cops running the same scam…….even though we have plenty of new wanna be cops graduating from the justice institute every year…..we have VPD and RCMP retiree’s taking the jobs on the skytrain and in public servie positions away from the youth so that they can double dip collecting full pensions and earning even more…while the young people that deserve a break starve.

Heywant another example….I could go on all night…..how about those greedy legacy scumbags in the auto unions who saved their own behinds by screwing the guys trying to get in…….

Question to all the unions dickwads out there…and there are a few on this site…do you guys take classes on how to screw the public down at the union hall….is it a night of dancing boys and sloppy greasy sleaze to learn how to pull the strings on the public.

If you think about it..is this why theres so many people dying in the hallways of hospitals …is it because the employees have stolen all the cash and leave nothing for bricks and motar……and akll the while stepping over the bodies of dead seniors who could use a little compassion after their contributions………no such luck when dealing with the unions and civil service punks…….sad but true….OK…now attack me and tell me that what I’ve written isn’t happening…even though everything I said is right out od the newspapers.

#42 T.O. Bubble Boy on 09.26.12 at 11:17 pm

Here’s some irony for you — watching some House Porn on W Network or HGTV may actually convince you that houses are over-priced.

Property Brothers now shows episodes from the U.S. (the first 1-2 seasons were all in the GTA). House prices for the U.S. episodes are 1/2 or less of the GTA episodes — as little as $100k-$200k for the house purchase in some cases. AND – most of these “cheap” houses in the U.S. have giant lots.

So, thank you House Porn for proving that Canadians pay 2 to 10 times more for a house vs. someone in the states.

#43 HDJ on 09.26.12 at 11:22 pm

“…the average college grad will need to save for 12 years just to get a 5% down payment. To double that to 10% will take 21 years.”

A little perspective. My father was a youngster during the depression and started working as a teenager. By the time he was about 40 years old he had a decent job and had managed to save enough for a down-payment on a house. His bank account contained about $2500. The house cost $12,500 (a new bungalow in Montreal) and he had to take out what at that time was an intimidating $10,000 mortgage. This was in the early 1950s and I don’t believe this story is unusual for those times. Big deal if today’s younger generation has to save for a decade or more before purchasing a home.

#44 AACI homedog on 09.26.12 at 11:24 pm

I think that is SM grade five in that picture.

#45 Tom from Mississauga on 09.26.12 at 11:32 pm

Garth, you forgot the 2,600 she would pay in HST on the realtor commission + say another 1,000 for legal on close. That makes balance is 12,200. IF the HST 13% in 5 years (or even in 7 months). 144,000 in payments to get 12,200 back. How exciting!
Personal note, I pick up my check from the lawyer on friday for my sale. I thank god thoughout the workday all this week and last I’m out. My job to goes to much lower cost Portland Oregon on Nov 1st. My myopic colleagues eyes are bloodshot from lack of sleep. One did list however in north Brampton, 5 months, no bids.

#46 Marco from Van on 09.26.12 at 11:35 pm

SM – can you make the calls – down to the minute? Can anyone? are you serious?

I really hope I am wrong on all of the below as I really don’t want you to blow me…

I expect the US equity market indices to move laterally to a shallow up trend with most volatility starting around April 1st to the time most of the Q3 numbers are in. Most of the gains will be in Q4’s until mid January.

Trading in individual stocks will offer the best returns (though with associated risks). I still believe technology (cloud, storage, mobility, integration services, SaaS applications replacing traditional in house), resources, healthcare, transport and utilities will have upside (as many other fields, but these are my focal trade segments).

Investment portfolios need balancing across asset and strategy classes. Your future should be stored in a balanced vehicle. Your day to day trading (providing you can afford the losses and are of an adequate age group) TFSA can take on more risk in exchange for growth upside. The yields should be reallocated to the balanced portfolio so your earnings feed the long term vehicle. RE should only be part of your strategy if you have a long term view (eg. you know you will stay put for 10 years) and only if you can afford it.

The bond market (not my specialty at all) will offer some good opportunity for the contrarian investor who does the due diligence and understands the fundamental risk carried by the asset.

Europe will overcome their difficulties and enter a new “normal” which will sport a much reduced welfare state, less regulation (especially employment rights) and more focus on competitive industries.

China will not implode, it will adjust to a more balanced and sustainable growth curve until it will flatten out as it enters the mature stage of its political evolution. The early signs of this will be visible by 2015 giving the new guard enough time to make their mark and get momentum behind it.

The strict politics will abate and moderate (through most probably still within the same single party system), the cost of labor will increase right up to where the masses have a decent enough existence, though this will take at least another decade.

The rest of the emerging economies will follow a similar general trend but each in their own particular definition.

The US will not self destruct. We will see Obama win again, though as usual a close race. Unlike most other presidents, he will make most of his difference in the last term as a matter of principle. It will also in-source a significant proportion of the manufacturing it has outsourced. This trend will solidify over the next 4 years, but not happen en-masse.

Canada, will survive. I expect our existing PM will survive the next election. RE will deflate leaving a tighter economy due to the individual debt burden, though not implode. CHMC will probably have its charter changed. The TFSA limit will increase to 10K as an election bribe and the budget will be balanced by 2014.

Gold? ups and downs, but once inflation is considered sideways within a 10% channel over 5 years. Oil will start heading north, followed by gas as soon as we get medium-long term confidence in the US recovery.

The world will not end on 12.12.12

Wildcards? Something utterly stupid happening between a dejected (in terms of US relation) Israel and Iran just before the presidential election, black swans or any of the mad Vlad’s predictions coming true.

Oh yes, the most important one… You are not an alcoholic smoker, bay street programmer, top realtor, investor, father of two grown up children who make a living selling from door to door, but a normal person, the vanilla kind of decent guy in a decent life, who has seen a lot of the reasons for why the world sucks and how ridiculously easily it could be a better place.

You’re jaded, lacking “real” enjoyment as you know what you define as “real” is slightly outside your reach simply because life got in the way.

You take an on-line persona expressing your frustrations by attempting to cause reactions by being what you think is a rebel.

You will also not “hook me up” for 6 bottles of wine (because I don’t need “hooking up” and you have never done that yourself) and most of all you will never want to spoil this fun you have by meeting me and engaging in a conversation we can post on you-tube.

I’m in Toronto next Tuesday.

#47 DON on 09.26.12 at 11:38 pm

http://www.cbc.ca/news/canada/british-columbia/story/2012/09/26/bc-maple-ridge-construction-fire.html

Fire destroys 4 homes under construction. Let’s see if this turns into a pattern. Roofer’s Torch.

#48 Devore on 09.26.12 at 11:43 pm

Do the math. A $400,000 one-bedrooms plus den condo bought in Toronto actually costs $412,000 at closing, plus a CHMC mortgage insurance premium of $10,780. So with 5% down (that’s $20,000), the mortgage ends up being $403,000. The mortgage at 3% is $1,950 with a maximum 25-year amortization. Property taxes and condo fees would raise the monthly to about $2,400 (plus insurance, parking, utilities).

I did. Too late, unfortunately.

My price was lower, downpayment higher, and interest rate higher, but net of utilities, my monthly was in this ballpark. I just found I wasn’t getting ahead financially like I was hoping to, and definitely not like I used to before I bought. The “recent sales in your building/area” realtors like to send out to condo owners to entice them to list were not filling me with confidence; I figured I was actually LOSING equity. But who knows, things are only worth what someone is willing to pay for them. Maybe my unit was special.

So I did the sensible thing (right?) and sold, instead of living the home ownership dream. Shortly after I found Garth’s blog, and other bear blogs, which basically confirmed my suspicions; over the last 5 years, Vancouver condos have been, at best, flat. After all was said and done, I was behind vs had I been renting that whole time, even the expensive 2 bed I was in.

Instead of throwing $2300/month (plus special assessment, $10,000) at the Canadian dream, I’m renting it for $1500 (including heat and cable), at a place that I would consider to be overall nicer, and again putting tons of money away every month. Now I don’t stress every day, and sleep well at night.

#49 Tom from Mississauga on 09.26.12 at 11:45 pm

#6 Little Phil on 09.26.12 at 9:36 pm
Lehman Brothers again?
Say it ain’t so!
It ain’t so. The sample is 300. Get serious. — Garth

They stated these events as fears. Not that they thought it was going to happen. Remember Little Phil, this is a paper that didn’t publish the 64.5% drop in new home sales this week in Toronto. There could be some R/E advertising dollars at play here. Don’t sell your financial assets.

#50 TRT on 09.26.12 at 11:47 pm

Math looks okay except for the 7% investment returns.

And 3% thirty year mortgages in the US…more like 4.5% (50% greater ;)

#51 sutluc on 09.26.12 at 11:54 pm

The two trillion was to bail out banksters, not for the good of homeowners.

#52 robert on 09.26.12 at 11:56 pm

Try living in the Okanagan and the Shuswap which have already corrected 15% and it feels like it is just getting started . Have watched homes in the 325k to 335k sit for months with no interest and now they have slowly moved into the high twos and they are still sitting.. Garth is being conservative at 25% to 30% when there are very few buyers capable of buying. It becomes a matter of supply and demand.. Price always follows the trend. Its is getting worse by the month and although i didnot believe we could see a full out panic the trend is certainly leaning in this direction.

#53 Julia on 09.27.12 at 12:04 am

$1950 + condo fees + propery taxes = $2400? More like $2600 no?

#54 T.O. Bubble Boy on 09.27.12 at 12:06 am

Not sure if anyone posted this — a Globe & Mail writer promoting HER OWN HOUSE in an article:

http://www.huffingtonpost.ca/2012/09/26/leah-mclaren-column-house-sale_n_1917905.html

After that piece on CBC’s “The National” with Garth and the Vancouver realtor (where the price drop was under-stated on the house that he was effectively promoting in the news story), and this obvious conflict of interest in the Globe And Mail, is there any news source in Canada that ISN’T just a giant ad platform for realtors?

#55 THE CELIAC HUSBAND on 09.27.12 at 12:06 am

So much risk, so little return. Why do it? I love Canada. A lot.

But there is so much more out there, places to see, places to live. Being a Nomad is not that hard. Especially when you are young. Travelling beats any education.

http://theceliachusband.blogspot.fr/2012/07/walking-jarnac.html

#56 TRT on 09.27.12 at 12:10 am

BC Unions:

BC Nurses get a modest wage increase in their new negotiated contract.

BC Teachers got zero deservedly so. They have so much time to volunteer. I’m confused.. If they worked properly and with determination, they would be too tired to do any volunteer activities. Pilots, Doctors, Nurses, Accountants don’t have the energy to volunteer! Teachers apparently do.

Immediately reduce these clowns’ wages to reflect working hours or get a punch in/out clock. (Maybe 8am-5pm). Next contract.

#57 Devore on 09.27.12 at 12:14 am

#21 Smoking Man

The USA is not Canada, Canadians are not risk takers, they don’t see real estate as danger . It becomes a self fulfilling prophesy.

Americans did not see real estate as a danger either, nor did they think they were taking a risk buying it. It was a sure thing. A self fulfilling prophecy it wasn’t.

Get your butt to platform 5, the train is leaving.

#58 Carpe Diem on 09.27.12 at 12:18 am

I was at Home Depot the other day looking for a tarp to use for an all-guys camping trip on crown land (why spend money going to a provinicial park when lakes are split with crown land is so much more remote and free).

Awesome 4 days.

At Home depot, this old, wrinkle boomer boasted that she felt sorry I was going camping with possible rain in a tent while she was going to stay cozy in her RV thingy …. (the Charlie Brown-listening to the teacher effect clicked in).

Lady … you are an old fart working at Home Depot .. WTF … you need to work to your death for having some vehicle you can’t afford. Keep thinking you are successful for things you have ….

ME … I enjoy figuring out how I can get my 20 year-old $50 tent to make it through a weekend of rain + 8 C degree nights requiring a nice sleeping mat and bag .. I’m glad I have newer items for that.

All this knowledge will end up going to my kids.

Knowledge is far greater than some toy made in China or an RV you can use for 3 months and consider that camping.

#59 William McNabe on 09.27.12 at 12:35 am

Garth assumes that RE in Vancouver will only go down by 35 – 40% on the assumption that there won’t be a recession. But there will be a recession, a big one. Indeed, the world economy has been slowing sharply over the past six months.

Much of the Canadian economy has been sustained by personal debt built on the housing bubble and jobs in FIRE industries (finance, insurance and RE). Manufacturing has nowhere to go but down and the bursting of the Chinese bubble will slash commodity prices (including oil). A 50 – 70% drop in RE prices (on a par with Ireland and Spain) in BC is much more realistic than the relatively small drop experienced in the US. When commodity prices collapse the C$ will go down with it, inflation will soar and interest rates will have to rise sharply.

#60 Nostradamus Le Mad Vlad on 09.27.12 at 12:36 am


Those sheeple students — Are they real or are they Memorex?

“. . . people who live here think they’re financially superior.” — Compared to a dungball, they’re probably right.
*
“If the people were to ever find out what we have done, we would be chased down the streets and lynched.” — George Bush, cited in the June, 1992 Sarah McClendon Newsletter

“Spain just found out!” wrh.com. Spain’s Pain Austerity may collapse the Euro and spread to NAmerica.
*
Right place, right time, right reason, right person Homeless boy wins prize; JPM Wouldn’t be a surprise at all; The US Fed At least it’s doing something; EZone New crisis, but old one not finished; Big Oil wins Texas land grab case; US Lost Decade Japan’s had a couple now. Nothing like spreading the wealth; US$100 mln. a week is what Congress charges the taxpayers, plus add ObombaCare’s costs onto that. ‘Owzaboud our unelected senate? Xmas sales in Sept. Something wrong with the economy? MERS is dead Was it of any use to anyone? Newspaper ad revenue Same as 1950 revenue. Nobody likes a liar; UK’s deficit or using Greece as a scapegoat; Poor baby Tax, or use more austerity measures to gain more financial clout;
*
The Man who prevented WW3 in the Cuban missile crisis. I didn’t know this, but now there is this daft wacko — Noddin’ Yahoo Simple, really. Open up Dimona for world-wide inspections, dump the nukes and play fair; World’s #1 terrorist; Iran has done well with the US-downed drone, and When I’m 64 Drone bases on US soil; AntarcticaIs the southern hemisphere feeling somewhat cooler these days? NATO terrorists bomb school in Syria. NATO is part of The Group of Evil. “Morally weak nations unable to think for themselves ought to be kicked off. Like the United States.” (wrh.com); US Federal Court backtracks on TSA ruling; Sweetened GMO Bacteria We’re all bacteria on the face of the planet, and 25:52 clip The slow poisoning of India; Guess where these pix were taken. Europe, maybe? The Scandinavian countries? Scroll down for the answer; Bagel Heads or big heads? Precision Flying 13K feet up, and they’re all parachutists; Is this a joke? See headline; Bugatti Veyron Pur Sang On the outside, it looks nice; Arctic oil drilling spells disaster; Clip Oxycontin — heroin; 0:59 clip Undersea views by Google; Oz – China – Fiji Oz insulted.

#61 Tron on 09.27.12 at 12:45 am

#10 Mark on 09.26.12 at 9:41 pm

A private sale between individuals should be private. It’s no different then if you sold a coffee table on craigslist. It’s your business and the public has no ‘right’ to know the details.

The banks have a right to know because they are providing credit, the realtor knows because they negotiated the deal.

#62 fiendish Thingy on 09.27.12 at 12:52 am

#37 MrHulot-

the US homeowner pays capital gains assuming there is a profit whereas in Canada you get to keep the profit on your home tax-free.

Actually, if you’ve lived in your home for 2 years or more a couple is tax exempt for up to $500,000 in capital gains. The 2 year reinvestment rule is long gone.

#63 AprilNewwest on 09.27.12 at 12:57 am

#39 Van guy. I don’t recall Garth writing 30% in a yr…could happen I suppose but as has been mentioned on here many times prices are more sticky on the way down…well unless the desperados pull things down much faster.

#64 Jay Currie on 09.27.12 at 1:00 am

I love the kids lining up for the iPhone5. I’d like one of those but I don’t have the 800 floating around just at the moment and the airtime charges!?

As to condos/townhouses/sfh the transaction costs buying and selling are getting crazier as government grab transfer taxes, commissions and the legals pile up. Rent and, in BC, you have to come up with a 50% deposit and, in my case, a dog deposit.

One of the watchwords for the next few years is going to be “nut” – how much money you need every month to stay even. Shrinking the nut gives you a bit of money to save/invest and a bit more security. People are fond of pointing out that a $4.00 latte every day at work is $80/m. But that is minor compared to gas and parking. Living close to work – walking distance or a single bus or subway saves several hundred a month. Craigslist is your furniture friend – amazing amounts of “staging” furniture shows up. Look at your cable/phone/internet bill – really need that 100 channel package?

And so on. Every buck you shave off the nut is a buck closer to freedom.

#65 GTA Girl on 09.27.12 at 1:18 am

Smoking Man, you mention Woodbridge being driving force of housing… As in the developers or the people?

This would be a nightmare scenario if its just us up in the Vaughan wastelands. A true snake eating its tail.

Many here are in the building trade. They’re buying what they’re building? This analogy makes no sense. If the TO condo market stalls, flushes, job losses are inevitable. And no one is buying anything.

Now if you’re referring to laundering money thru large condo development projects…which is what many are hearing. Well, the pyramid can only last so long. And someone will be pissed to be invested in a rapidly depreciating asset. Most Pyramids only last a max of 5 to 6 years. Madoff was an abnormality and a shell game. 1,000’s of empty investment condos can’t be hidden easily

#66 Soylent Green is People on 09.27.12 at 1:25 am

How can parents who stick their kids in stanger care possibly be clled helicopter parents?

Dat make no sense

Kids R in care longer than parent at work

.

#67 jj29ca on 09.27.12 at 1:29 am

Maybe the reason parents are horny about real estate is because they are old enough to remember the babes on Tom Vu’s boat!!! What ever happened to that Dude? Maybe Garth is the modern day Tom Vu. “Buy low sell high and make a lot of money” Anyone who doubts Garth’s message, hasn’t clicked on Realtor.ca and looked at all the red dots in Muskoka. This world needs more people like you, people who tell it like it is. Hey how much longer do we, have to watch our tax dollars being wasted on commercials that lie to us about an economic recovery?

#68 Mr Buyer on 09.27.12 at 1:38 am

#4 TurnerNation on 09.26.12 at 9:35 pm
I think this is Smoking man’s bank balance? Looks real enough…
Quite amazing.

http://imageshack.us/photo/my-images/545/photo10copy.jpg/
……………………………………………………………
I have always been of the mind that money talks and baloney walks. From now on I shall defer the content of all my scribbling to the bearer of that bank deposit slip. This person clearly has a much more effective modus operendi.

#69 MrHulot on 09.27.12 at 1:49 am

OK, Garth. I accept your theory of declining and stagnating real estate. I accept your theory of Deflation. But what about longer term? How is the US going to pay 17 trillion debt? My only conclusion is that they have to inflate-away the debt. That means inflation in the longer term. Do you agree?

#70 Roy on 09.27.12 at 2:30 am

A good chunk of Canadian young adults are priced right out of real estate, particularly of course in Van/TO. I think many young people may be just saying screw it with real estate. Jobs don’t pay enough, jobs are too unstable, etc., etc.

According to Garth’s stats, on the same pace (save 5% down taking 12 years), Gen Y individual on their own will need to live well past 200 years old to pay off said mortgage!

Sadly many in the young group are already saddled with huge mortgages from student loans. Many are simply debt machines at saturation, pressed on by their boomer parents. Average student debt is $27,000 (2011), and interest on these loans is 5 – 9%.

As I see it F has already kicked the legs right out from under the entry-level buyer in big markets. The anvil may also be coming down from the top with CMHC not insuring $1M+ mortgages.

#71 cynically on 09.27.12 at 3:02 am

#9 uh oh Canada – where did you get the idea that Canadians feel superior to the Yanks? It is just the reverse as we live with an inferiority complex living next door to the world’s greatest country and superpower and the reason is that so much of the world’s non physical output eminates from the US. I’m talking innovation, invention, medical and scientific discoveries, music and art and theatre. They are go-getters and we aren’t as a nation. Unfortunately with their superiority goes an arrogance and a dismissal of other nationals which turns much of the world off. This is probably the cost of greatness among the world’s empires past and present. The Brits were no exception when they had their empire. The Spanish too and I’m sure the successor to the US will be also. China?

#72 TNT on 09.27.12 at 3:52 am

Man made prison.

#73 Deb on 09.27.12 at 5:41 am

A new study by RateSupermarket says at the rate we’re going the average home will cost $553,000 by 2020 (it’s now $350,192)

——————————————————————

It does not appear that these folks have ever visited greaterfool.ca. Essentially, they are assuming that the course of the next 86 months will follow the exact curve of the housing inflation trajectory of the previous 86 months. At the rate we’re going? No.

#74 Steven Rowlandson on 09.27.12 at 6:46 am

If the price of real estate doesn’t implode I am expecting a massive collapse in the number of new parents.. High house prices = genocide by other means.

#75 Picasso on 09.27.12 at 7:13 am

I’m down here in Dallas and you would not believe how many common folk live in motels. And…. what costs near half a mil up there goes for 120G down here.

#76 dd on 09.27.12 at 7:18 am

#6 Little Phil Lehman Brothers again?

——————————
The US gov let Lehman fail. With QE to infinity this will not be allowed to happen. However there are other excape valves.

#77 Victor on 09.27.12 at 7:38 am

#68 MrHulot on 09.27.12 at 1:49 am

OK, Garth. I accept your theory of declining and stagnating real estate. I accept your theory of Deflation. But what about longer term? How is the US going to pay 17 trillion debt? My only conclusion is that they have to inflate-away the debt. That means inflation in the longer term. Do you agree?

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

Garth has spoken to this issue many times over. They don’t have to pay the debt back, but merely service it.

#78 Chris Mewhort, EA on 09.27.12 at 7:55 am

Garth, you mention in Canada the mortgage is not tax deductible as in the US. That is true, but the US homeowner pays capital gains assuming there is a profit whereas in Canada you get to keep the profit on your home tax-free.

Not if they buy another home, or other conditions apply. — Garth
———-
The “another home” provision went away with the Reagan tax changes. It is Section 121 that exempts the first $250/500K from capital gains treatment.

Quite so. Thanks for the remind. — Garth

#79 Buy? Curious? on 09.27.12 at 8:03 am

Professor Garth, let’s try your math again.

“A new study by RateSupermarket says at the rate we’re going the average home will cost $553,000 by 2020 (it’s now $350,192), and the average college grad will need to save for 12 years just to get a 5% down payment. To double that to 10% will take 21 years.”- Garth

Say a guy who just graduates high school (18years old, 2012) decides to work for four years, stays at home and conservatively saves $10k a year. Then when he’s 22years old, 2016, he puts a downpayment on a home. By 2020 his $350k home is now worth $553k, has he not made over $200k tax free in 8yearss, $25k/year, an increase of 58%? Not to mention he has no debt. Though to be fair, he also doesn’t have a degree in Philosophy or Business Administration.

Am I wrong?

http://www.youtube.com/watch?v=uqQ_QdHP3wk

#80 Ottawa Renter on 09.27.12 at 8:04 am

#37 MrHulot on 09.26.12 at 11:03 pm
Garth, you mention in Canada the mortgage is not tax deductible as in the US. That is true, but the US homeowner pays capital gains assuming there is a profit whereas in Canada you get to keep the profit on your home tax-free.

_______________________________________
If you own the home for more than two years there is no capital gain tax. And you are no longer required to buy another home with the proceeds.

#81 Smoking Man on 09.27.12 at 8:10 am

#45 Marko

I sure as hell don’t want to hurt your feelings but I would rather watch paint dry than spend 2 minutes with you.

You’re boaring, stats quo. Your assesment of me and the markets are out to lunch. Mind you, you write well.

Why would I give you first crack at meeting the Great Smoking Man. I have 6 fans on here who will be first at the Gartho Show in Oct.

I think the description you painted of me is a self portrat

#82 TurnerNation on 09.27.12 at 8:24 am

A coworker, about 25yrs old – 10 year younger than me – kind of pressured into a marriage by family interests, bought a condo, and another – used- car, takes regular vacations, new clothes, new dog, expensive gifts.
Debt load is at least $400,000. Car is breaking down now, wife got laid off is picking up part time work.
No kids yet but it all falls onto him and his job. He is drinking heavily, regularly, now under the guise of partying.
25-26yrs old. Debt slave for life. Rides GO Train, suspected Track 6er…

#83 TurnerNation on 09.27.12 at 8:37 am

#23 Smoking Man

I can tell you, it is possible to open one’s “third eye” without the use of drugs or booze. Synchronicity (can sometimes take the form of a ‘miracle’ or second chance and who has not had one of these…) is the best we can hope for. The good news is, life will keep pushing on with or without us. Might as well try to get into its step. Be a part of the winning team so to speak.
Alcohol is known a “Spirits” for good reason. Apparently the “Pharma” root word is related to the same. But these are fraudulent methods of connecting to it.
But people want that connection! Call it what you want.

http://en.wikipedia.org/wiki/Synchronicity

#84 Buy? Curious? on 09.27.12 at 8:37 am

No one can say you’re not fair. Thanks for keeping the dialogue lively.

Unless you’re going to university for some type of professional profession, you’re a fool and deserve the debt you accumulate. I know a girl, straight A’s in high school, went to Western for 4 years in Arts, then went into a job in retail and just this year, 20 years later, paid off her OSAP, just this year!

#85 JOJO on 09.27.12 at 8:41 am

Well, I told you so!
Timing is everithing. After colapse of housing in USA,Ireland,Iceland,Spain etc. Canada went in RE buble like never before in History. Toronto- GTA, Vancouver,Calgary,Victoria, etc are alredy in trouble.
Who is creator of that problem? People? Nope.
Who was problem in USA,Ireland etc?
Only Goverment and banksters. Because when we got Zero down mortg. with 2% interest rate and changes for second mortgage- for second house/condo should be at least 50% down with cash and double interest if you want to protect the people from speculators on the market.
We had perfect Real estate until 2007 and covencional 25/y mortgages with 25% down and 5-7% interest , but somebody wants Zero down and 2% interest, with home “equity” bull shits etc. Federal Goverment, Provincionals and most of Municipal Gov, now they have more than doubled debt than 5 years ago.
So Garth and company in Jan/2009 you said RE Crash is comming? Huh, that time avg. RE prices in Toronto area were 310k, today are more than 500k. Well you missed so bad, because you don’t create economics.
Now I tell you it’s comming. Between Nov/2012 and maximum until March/2016, I don’t know when bankster will pull the triger, but RE Crash will be much worst than 1990’s and this will be just beggining of the World economic collapse of $ 100 trillions “junk” derivates (stocks, bonds, “assets” etc).
After 20 years will have completly different economy, with different VALUES and new economic system in the New World Order. Good by

#86 █ ♣ █ RENTER - REDEMPTION on 09.27.12 at 9:00 am

Ups, error:

The trading of adrenalin and adrenalin …for a balcony?

The trading of adrenalin and testosterone …for a balcony?
(estrogen is mostly granite/porch horny…)

#87 JOJO on 09.27.12 at 9:07 am

quote “By the way, the Yanks spent about $2 trillion in the last few years sheltering, subsidizing and bailing homeowners. Just imagine what the rate might be if not for that.” Yes they spent $ 2 trillion and situation is still WORST than 5 years ago. Untill when they can spent? Untill middle class will be ZERO. So guys on walfare will get $ 1400, and they have free or very cheap housing for $ 200 with no bills, plus free passes for transit, free ‘food stamps” etc , and lets say registred Nurse will get
$ 2,600 net with student loan $ 200, and car insurance $ 200-300, and rent about $1,200 to $1,500 plus all bills, no food stamps or free transit etc.
Who is better? Nobody.
Only 1% rich in the world are more richer and they OWN about 90% money and assets. Period

#88 brainsail on 09.27.12 at 9:18 am

“Home prices may not return to peak until 2023” (US)

Nevada may take 40 years to return to peak prices.

http://money.cnn.com/2012/09/26/real_estate/home-prices-peak/index.html?iid=HP_River

#89 Just Asking on 09.27.12 at 9:20 am

So, I’m noticing that when I go down to the bottom of the page and click on Previous Entries, suddenly it’s 2011 again?

#90 John S on 09.27.12 at 9:26 am

OK, Garth. I accept your theory of declining and stagnating real estate. I accept your theory of Deflation. But what about longer term? How is the US going to pay 17 trillion debt? My only conclusion is that they have to inflate-away the debt. That means inflation in the longer term. Do you agree?

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

Garth has spoken to this issue many times over. They don’t have to pay the debt back, but merely service it.
+++++++++++++++++++++

What happens when the rates go up? Japanese style deflation is the answer is it? What happens when no one other than the FEDS buys US Treasuries?

Just because Garth (with due respect) says something does not mean it is going to happen. Think for yourself.

#91 rosie on 09.27.12 at 9:40 am

#40
You really should check your meds.

#92 Smoking Man on 09.27.12 at 10:16 am

#82 TurnerNation

I call it the Force. Star wars. It really works.

It works with or without bozze but there is a sweet spot after 2.5 glasses of wine. Which brings everything in focus.

Like benoculars. Don’t want to be to back or to front turn the focus just right

#93 live within your means on 09.27.12 at 10:19 am

#54 THE CELIAC HUSBAND on 09.27.12 at 12:06 am
So much risk, so little return. Why do it? I love Canada. A lot.

But there is so much more out there, places to see, places to live. Being a Nomad is not that hard. Especially when you are young. Travelling beats any education.
……………………

Agree – I have so many wonderful memories of places I have visited and people I have met. Our friends in Bordeaux are off for a week in Madeira this am. Lucky them. I think it’s their 3rd or 4th trip this year. Tho we’ve never met, we’ve been corresponding weekly for a year. It will be great to finally meet & stay with them next year. They have a daughter who lives in Costa Rica & one of their sons live in Mtl.

#94 Mixed Bag on 09.27.12 at 10:23 am

#2 Randy on 09.26.12 at 9:33 pm

Agreed, but especially for the agents. 3% on a $500,000 is a $15,000 commission. The lawyer doesn’t make near as much, but spent much more on schooling than the RE agent did, and has legal liabilities, whereas the RE agent has none.

#95 Oceanside on 09.27.12 at 10:24 am

#51 robert on 09.26.12 at 11:56 pm
Try living in the Okanagan and the Shuswap which have already corrected 15% and it feels like it is just getting started . Have watched homes in the 325k to 335k sit for months with no interest and now they have slowly moved into the high twos and they are still sitting.. Garth is being conservative at 25% to 30% when there are very few buyers capable of buying. It becomes a matter of supply and demand.. Price always follows the trend. Its is getting worse by the month and although i didnot believe we could see a full out panic the trend is certainly leaning in this direction.
——————————————————————-
Two years ago we had our lake view 1/2 acre south Okanagan home appraised for sale at $619K, listed at $599K, it sold after 6 months for $497K and we were glad to get out, there were 15 similar lake view homes at the time and only a few have sold in the last 18 months and unlike other areas (Vancouver Island) the owners are not reducing their prices, still holding out for what they thought they were worth in 2007.

#96 live within your means on 09.27.12 at 10:28 am

#90 rosie on 09.27.12 at 9:40 am
#40 You really should check your meds.

…………………

Don’t respond to him. He probably visits many websites, spouting his diarrhea.

#97 Smoking Man on 09.27.12 at 10:31 am

Anyone catch a new negative Canadian real estate story in MSM.

Been looking. Can’t find one.

See Marco. Down to the minute when I said the DoomGloom re reporting would vanish

#98 Stickler on 09.27.12 at 10:34 am

How about a new product -> the new CIBC Multi Generational Mortgage. The mortgage is divided in 2; you amortize the 1st one over 25 years, and defer the start of the 2nd mortgage at the end of the first-> for another 25 years.

Of course you will be contractually obligated to have children… and sign them up to resume the payments once you die.

This way your children won’t be priced out forever! They will thank you.

#99 vic_guy on 09.27.12 at 10:43 am

@ TRT – 49

2 second search in google : 

The average rate for a 30-year fixed loan fell to 3.4% in the week ended today from 3.49%, McLean, Virginia-based Freddie Mac said in a statement. It was the lowest in data going back to 1971. The average 15-year rate dropped to 2.73%, also a record, from 2.77%.

http://www.latimes.com/business/la-fiw-mortage-rates-20120928,0,6880149.story

#100 Daisy Mae on 09.27.12 at 10:45 am

For anyone interested….

LEHMAN BROTHERS
Episode 1
http://youtu.be/Reu6jKDduJc
Episode 2
http://youtu.be/flHRYGPnCFY

#101 Just Park It on 09.27.12 at 11:26 am

Garth your logic and numbers are sound – “but” – you are comparing apples to oranges.

No doubt buying over renting is more expensive, however, not everyone – and I personally don’t know of anyone who plans on repaying the mortgage with the full term – I am 2 years away from paying off my mortgage which will mean 12 years for our first home with the mortgage beast.

If you plan and stick to a disciplined budget – you will be living mortgage free (besides the obvious taxes and living expenses)…

Forced savings works for me – renting I had less expenses but I also saved nothing, I had this mentality of renting was part of the “I own nothing attitude” so why bother…

On a final note – of all my buddies, I am the only one who still has a mortgage to pay off (only those who are naive will actually count 25 years in their budget) – so 12 years is my punishment .. but I am about to live a life of carefree living while others “rent” their shelter forever…I promise to wave to all the renters on my newly purchased sailboat courtesy of my newly minted cash flow.

Go Big or Go Home!!

#102 PoorgEoisie on 09.27.12 at 11:30 am

Truth hammer, even as a union dickhead I can agree with much of what you wrote concerning double dippers. They no longer contribute to pension plans and take a spot from someone who would be. I don’t like it but in many cases I understand it as many of the double dippers I know are not living high on the hog they are still paying mortgages, alimony and so on.
That being said, if it were up to the union there would be no double dipping. It is the company that hires them back and believe me they don’t take back the agreement thumping boat rockers. They tend to re-admit the ones that consistently circumvent the union (people you would like).
The unions are failing and that is not a good thing. Take the example of the auto workers voting for a two tier pay scale. The lack of foresight and solidarity lead to a hijacking by the greatest common denominator. Obviously, lower paid workers will have a harder time paying into the soon to be raided pension fund. Soon that 2nd tier group will make up the majority and will probably divorce the union at first chance. Great right? Nope. The 2nd tier workers will also be less likely to afford whatever awesome service you provide and the price of cars will not go down.
Companies have been busting unions for decades and the price of goods has not declined (average income in real terms has though) the incomes of the super rich have soared thanks to cheer leading from the likes of you. And that is the real tragedy because you sound like someone with a lot of fight in them but you would rather fight for the one in a trillion chance to become super rich at the expense of everyone else.

#103 Junius on 09.27.12 at 11:49 am

#35 Telecon,

You said, “When real estate prices in this country really start to turn down, our government (NDP or Conservative) will go into full blown socialist bailout mode that will make G.W and Obama blush. Born a welfare state, always a welfare state.”

People keep coming here and saying this but they do not offer any realistic form of the bailout. Housing was already bailed out in Canada in 2008 with Billions of dollars of CMHC guaranteed loans. Note to your comment – this was from the socialist Conservative government.

Other countries have tried home owner credits and other similar demand driving proposals but they found it was like pushing on a string.

They are put of policy options for 5 fundamental reasons.

1) Home ownership is at 70% nationwide which means demand is going to be weak.

2) Household debt is at an all time high which makes it harder and dangerous to load people up with more.

3) The risk exposure of the CMHC has gone from 100B to 600B in just a few years. Any increase of this exposure could impact the federal governments credit rating and cause more problems.

4) Interest rates cannot go much lower. Even if they did they wouldn’t have much effect for the reasons set out above.

5) Other economic forces are simply too powerful to stop. The economy is slowing globally and we are in a protracted period of asset deflation combined with commodity inflation. Most people are getting poorer and will have less disposable income. Add in the changing demographics and it is baked in.

Any policy prescription will just be pushing on a string. None will work without creating worse problems in other parts of the economy or society that are worse.

#104 KommyKim on 09.27.12 at 12:02 pm

#40 truth hammer on 09.26.12 at 11:14 pm

I’m tired of calling you guys, “right wingers”. From now on it’s going to be “wrong wingers”.

#105 CP on 09.27.12 at 12:07 pm

What a week for the Globe. First Margaret Wente “wente” off course and plagiarized, now Leah McLaren is trying to sell her house in her weekly coloum. Journalistic integrity indeed!

http://www.huffingtonpost.ca/2012/09/26/leah-mclaren-column-house-sale_n_1917905.html

#106 Old Man on 09.27.12 at 12:16 pm

Do you all remember when Garth mentioned two good USA property markets? One was Phoenix and the other was Miami. Well just saw the figures for Phoenix the other day with an ending as at July 2012, and the average property increased in price 16.6% for 12 months; Canadians in the western part of Canada were the main buyers.

#107 CP on 09.27.12 at 12:18 pm

And apparently Leah’s mom did the same thing a couple years back… what a bunch (fits in with today’s title; “Parental Guidance”:

http://www.theglobeandmail.com/life/home-and-garden/architecture/architecture-features/letting-go-a-cherished-home/article1902043/?service=mobile

#108 Trt on 09.27.12 at 12:30 pm

#98 vic-guy

Oh please. You forgot the bank fees. They are added afterwards. In Canada, all is included. So yeah, minimum 4.5%.

My patience with this blog is wearing thin. Too many Google know it all who think they are informed posters.

#109 I am disappoint on 09.27.12 at 12:33 pm

#100 Just Park It

You may not be paying rent for your home, but property taxes, utilities, insurance and upkeep (you are budgeting for upkeep to maintain the value of your home, are you not?) will ensure you continue to pay monthly until the day of your death for your “rent-free” home.

That new-found cash flow you mention would be available to you right now if you were to rent instead, and invest what would have been going towards the mortgage. That’s freedom.

#110 John on 09.27.12 at 12:37 pm

“By the way, the Yanks spent about $2 trillion in the last few years sheltering, subsidizing and bailing homeowners. Just imagine what the rate might be if not for that.”
———
Just imagine what the rate might be. Why don’t we run with that? Just so we can be clear about what’s going on and what to expect.

A little more of this would be about right…it’s coming out anyway.

You can’t talk about an artificially propped up market in your analysis and then remove that reality when it’s convenient. I mean, you could I suppose…but why?

#111 Molly on 09.27.12 at 12:38 pm

# 73

I think your wrong on that one, EX. My friend and her husband just had their first child, (we’re 25) and they have around 40 k in debt, 30 for school and 10 to credit, the child is 8 months old and there trying to have another, they also want to buy a house this year as well as a new vehicle as her two door is just” too hard” with a child. She buys lululemon like its going out of style as well as ridiculous items she doesnt need (tassimo, 500$ Juicer) did I mention shes on mat leave (hairdresser) and now wants to be a stay at home mom, oh and her husband finally (after being out of school almost 2 years) got a job, a government position watching messed up juvenilles for 23 bucks an hour. This is the mentality of a lot of these people, if they want it it should be theres doesnt matter if its a house, car or child its all about them. Oh and there going to Hawaii in november……

#112 Old Man on 09.27.12 at 12:38 pm

#101 PoorgEoisie – The union workers had a good deal for decades, but the world has changed, and in order for Canada to survive a new order must be established to compete which means an adjustment in wages and benefits because the party is over; this will become a painful reality.

I will tell you all about Ford in Canada, as they had a special clubhouse with tv and pool tables for workers that qualified for workmens compensation. They were given an option to receive full pay not to make a claim, and all they had to do was show up once a day to shoot a game of pool or watch tv for an hour; too many claims became costly to Ford, so don’t work, and you will receive a full pay cheque.

#113 DON on 09.27.12 at 12:47 pm

@ #40 truth hammer

What I can’t stand is someone who presents half the story. What about management hiring their incompetent family and friends as hiring rules for management positions are non existent. In BC we have layers of management in all industries especially the Health authorities. One thing is for sure – if you got rid of most of these management positions – the Province would still operate by the front line workers. I get what you are saying…but not to look at the whole picture makes me wonder about your agenda. Let’s fix both sides…

#114 joe on 09.27.12 at 1:08 pm

Calgary has become the new center of dellusion the new Vancouver. Cocky realtors, hoards of sheep, “its different here”, “we got oil”.

#115 Old Man on 09.27.12 at 1:22 pm

#93 Mixed Bag – I agree with what you had to say, but the Real Estate agent or broker has a huge liability with the Registrar who is a Caesar, as he can pull your ticket in a heartbeat, and throw you on the street for a violation of the Act. I will never forget Cox decades ago as he phoned me weekly after 6 beers, and said one day will get you too, and just laughed at him, as held a mortgage brokers licence.

He was no threat at all, but was frustrated that I was so clean, so we chatted once a week, as was his way of becoming friends because he loved to shake my cage in life. It is not what one says, but how they say it, and it is not what one does, but how they do it – nothing else matters in life.

#116 Smoking Man on 09.27.12 at 1:23 pm

Seam like the machine just laid of the Fat lady as she was entering the theater.

I googled in news section.
Toronto real estate
Canada real estate

In the globe and new story, except it was blowing sunshine.

Vancover ok home owners pulling listings.
Toronto SFH Prices to keep climbing. Lack of supply.

I’m not awsome bubble heads?

#117 Mike on 09.27.12 at 1:32 pm

#52 Julia Thanks for the link the other day to the globe article on disposable buildings.

Is anyone building new towers to last, or are they all constructed in the same slipshod manner?? This might be relevant after the correction when RE is ripe for the picking.

Thanks, Mike

#118 Mike on 09.27.12 at 1:34 pm

Kudos to Garth for posting family/work friendly pics with a touch of humor and class; makes it much safer to pass the blog onto others!

#119 Roland on 09.27.12 at 1:36 pm

British newspaper, Telegraph, fawningly mentions Mark Carney as possible successor to Mervyn King over at the BoE !

I say, “Take our central banker–please!”

Carney is said to have disclaimed any desire to go to the BoE. I guess Carney’s holding out for more. Perhaps he hopes that the TPTB might simply parachute him in to run/ruin some southern European country or another, with a pleasant climate. I mean, don’t all former Goldman executives get to run countries nowadays? Why should Carney settle for the dreary business of telling that bonehead Cameron what to do?

#120 Junius on 09.27.12 at 1:41 pm

#112 Don,

You said of Truth Hammer, ” I get what you are saying…but not to look at the whole picture makes me wonder about your agenda.”

I think the agenda is very clear. It is the dumbed down right wing agenda that is part naive libertarian, part Ayn Rand devotee, part unfettered capitalism combined with a religious hatred of all things that are related to the government. It is an ideology that does not deal in nuances or facts.

Small minds seek simple solutions to complex problems.

You don’t have to go any further than our friend TH to see that maxim at work.

#121 jess on 09.27.12 at 1:46 pm

As the complaints to consumer boards relating to condos gets more press and reaches more ears , the listeners hearing starts to improve.

I wonder what will change with this “out of touch ” 1998 act
=====

#122 John on 09.27.12 at 1:48 pm

East Van wrote:

“Bailing Homeowners??? – You say that with a straight face? The only “people” that got bailed out were the corporations.

Wrong. — Garth”
———

Follow the tedious trail and arguments. The only reason that there was some “action” taken was to “support” muppets suckered by cheap cartel “money” was to hold the ponzi together…for a more complete and ordered transaction of wealth from the middle class to few hands.

Who are the corporations and what links do they have to government?

The problem with the above is that it deals with unpleasant facts that are going to have to be faced. Thus the resistance.

Let’s say there has been a debate. Notice how one side is all fuzzy, ducks and dives? Anyone care to clarify the other side of the argument, because I have absolutely no idea what it is.

The facts are laid out, and then a couple of one word answers and snappy phrases are issued as a response.

I call BS.

#123 Old Man on 09.27.12 at 1:53 pm

#115 Smoking Man – Well have some good news for you as know this hot babe who wants to meet you if you will spring for a dinner some night. She wants to know what track to meet you on, and at what time in TO as wants to take a ride with you, and will even hold up a sign saying, “Smoking Man.”

#124 truth hammer on 09.27.12 at 2:22 pm

101.. Poor…I get what you’re trying to say…but lets all get over apologizing for ALL the greedy leaches who have clogged up the Canadian labour system. The failure of unions is a Good Thing…….in todays economy they are job destroyers not job creators….as we see with the rampant nepotism and double dipping as the usual practice of these youth hating anti Canadian dipwads at the top of the union ladder…..they serve only themselves.

The auto workers two tier greed was so patently obvious that they were screwing the young workers was something to be ashamed about.

The double dipping teachers are a disgrace.

Double dipping cops are pigs in the trough….the pension they recieve should be clawed back euivelant to the wages they recieve.

What is so wrong with the union mentality that the kids coming up have to be screwed by the legacy members before they are considered worthy? Why are recent grads not being hired? Why isn’t the government stepping in during these times of high youth unemployment and putting a stop to the pigs and the sartorially resplendant union leaders who wave their fat guts around for the camera’s?

The unions that take 100% of each ministries annual budget before a single penny gets to the sick, elderly and the kids and then cry///”The system is underfunded” ….should be imprisoned and lashed every day until their bones are fed to the polar bears.

On the subject of nepotism and party favours within each and every level of government…this is third world and should be considered criminal…..no more party workers getting stuffed into civic jobs…no more kids or wives getting cushy jobs in some backroom slushpit……make it law that no family member or relation can work in the same government as the relative is serving. Party workers should be considered volunteers not potential hires.

Fire the civil service in it’s entirety and start again we taxpayers will survive this morass.

#125 604 on 09.27.12 at 2:25 pm

this is all a product of stupid lazy people who are entitled.
#110 Molly- too many people out there like you mentioned and they are all reproducing-even more stupid, lazy and entitled offspring.

#126 Phil on 09.27.12 at 2:30 pm

7% after tax return? Good luck with that!

Where did I say after-tax? — Garth

#127 eastvanspecial on 09.27.12 at 2:46 pm

@ #63 Jay Currie: good idea on buying ‘staging’ furniture!

#128 █ ♣ █ RENTER - REDEMPTION on 09.27.12 at 2:48 pm

#40 Said it all…

Either we ALL Unionized or Nobody !
Because the unions will rape the other ones.

unionized teachers are the worst, greediest, sleaziest, uncaring anti youth gluttons out there.

Why……
because the highest percentage of them have used the professional day meetings to drum up a scam.

The teachers of today have feather bedded their pension arrangement so that they can retire early…..
in their mid forties…..
and collect a full pension….
85% of the last weeks work….
usually at $100,000 +++ per annum.

They then take their 85 grand and revert their
status to contractor, retain their old job…
in the same school, in the same classroom, teaching the same students….
at a rate of $250 per day.
They do this approx 40 weeks a year and pull in an additional $200,000 per year ( more than they made as a regular teacher) .
These gluttons do this to starve off the next generation of teachers
who have recently graduated and have no prospect of working while the union gluttons
wallow in their little ‘teachers union only scam’.

#129 Penny Henny on 09.27.12 at 2:52 pm

How about a new product -> the new CIBC Multi Generational Mortgage. The mortgage is divided in 2; you amortize the 1st one over 25 years, and defer the start of the 2nd mortgage at the end of the first-> for another 25 years.

Of course you will be contractually obligated to have children… and sign them up to resume the payments once you die.

This way your children won’t be priced out forever! They will thank you.
——————————————–
Hey Stickler, they had this product in Europe.
But it is common to have multi generations under one roof.

#130 Network Admin on 09.27.12 at 2:58 pm

#121
East Van wrote:
“Bailing Homeowners??? – You say that with a straight face? The only “people” that got bailed out were the corporations.
Wrong. — Garth”

I agree with Garth. Some people got bailed out. Look at this http://ochousingnews.com/news/housing-recovery-in-question-as-california-home-sales-fall (scroll down to “$282,000 in HELOC money and two years squatting”). Not a bad deal.

#131 CalgaryRocks on 09.27.12 at 2:59 pm

That new-found cash flow you mention would be available to you right now if you were to rent instead, and invest what would have been going towards the mortgage. That’s freedom.

It isn’t freedom for me if all of my savings AND my cash-flow are dependent on the market banksters.

#132 Reserve Ratio on 09.27.12 at 3:00 pm

The beauty of exponential curves.
http://www.youtube.com/watch?v=8WBiTnBwSWc&feature=plcp
Our “landlords” are in serious trouble and blissfully unaware. They own 5 or 6 properties in Van., last one purchased in May ’12, plus this place on V.I. bought in spring ’11. Full recourse mortgage, what’s that? So smug, so arrogant, ignorance is a virtue apparently. I wonder if bankruptcy can be filed under anesthetic? Scary shit.

#133 vic_guy on 09.27.12 at 3:01 pm

@ TRT – bank fees weren’t forgotten, you didn’t mention them in your assumptions.

Anyhow, BoA online calculator says 3.5% @ 30 years, 5% down, $8900 closing fees for $500k.

Maybe you’re looking @ more expensive banks.

#134 jess on 09.27.12 at 3:13 pm

…. plebs listen up

what one says and what one does …
http://treasureislands.org/britains-liberal-democrats-steeped-in-money-from-the-septic-isle/

#135 Smoking Man on 09.27.12 at 3:14 pm

#122 Old Man

You should know me code of conduct by now.
If I don’t find em on back page it aint going to happen.

My son will be with me. 6’4″. Brad Pit ish he has no code of morals. Bad parenting I guess.

He will meet the young lady be sure the sign reads.

Smoking Mans e-moral Son

#136 Herb on 09.27.12 at 3:14 pm

Smoking Man,

whatever your age is, you really should act it.

#137 Vangrrl on 09.27.12 at 3:16 pm

#100:
‘I am about to live a life of carefree living’… About to?
I always have ;) I suppose if you need that security to feel carefree, I can see where you’re coming from. I should be thankful I have the confidence and resourcefulness to know I will always be able to come up with a few hundred a month to cover the cost of shelter. It helps that I can pretty much go anywhere on the planet if I need to (and I like that idea).

Oh look now, it’s almost 1pm… I must begin my 5 hr work day. Feeling so carefree as a renter ;)

#138 Toronto_CA on 09.27.12 at 3:37 pm

#96 Smoking Man on 09.27.12 at 10:31 am

The National Post and the Huffington Post.ca both ran the Toronto new home sales collapse articles two days ago I believe. Those are pretty MSM, even though you’re right about it being curiously absent from other sources (CBC, The Star, The G&M)

#139 Smoking Man on 09.27.12 at 3:41 pm

#135 Herb

Act my age? Why?

I school did ur teacher make you write that on the black board 1000 time.

Live with in your means
Act yor age
Be respectful
Memorize, regurgitate and obey.
Don’t smoke or drink
Eat healthy
Excersize

See where I’m going with this Old man.

A free man says and does what he wants regardles of who might be judging. For a free man is the judge.

I you ever worry about what some other wee weer or excrimenter thinks about yoiu.

Your owned

#140 Old Man on 09.27.12 at 3:47 pm

The big story about Real Estate is taking place in Montreal, whereby, the mob has boosted the end price by as much as 30% in end costs. This reminds me of my past when a married woman would call me from Creeds to do a lunch, and her husband was my friend, PV would give me a call, and say what is this all about, and said Paul it is all a matter of honour and respect as am paying the bill, and if you want to come too then you will pay for all – he laughed his head off, and said no not take advantage of my wife ok.

#141 CalgaryRocks on 09.27.12 at 3:50 pm

#136 Vangrrl on 09.27.12 at 3:16 pm
#100: It helps that I can pretty much go anywhere on the planet if I need to (and I like that idea).

Oh look now, it’s almost 1pm… I must begin my 5 hr work day. Feeling so carefree as a renter ;)

Why this constant need of renters to prove that their way is better. Weird. We’ve all been renters at some point. We know what renting is like. Is it OK, if some people don’t want any of it?

BTW, 5 hour work day that can be done all over the world. Are you a barrista at Starbucks by any chance?

#142 Frank le Skank on 09.27.12 at 4:09 pm

I’m not a huge quote guy but the best quote I’ve heard related to this housing crash was made by a realtor named Keith Roy. “To ignore the truth doesn’t change the truth.”

http://keithroy.com/blog.html/time-to-cash-out–1976393

I know the article is old but its proof that not every realtor is slime.

#143 Herb on 09.27.12 at 4:25 pm

#127 █ ♣ █ RENTER – REDEMPTION,

you’re absolutely right. Get unions out of the way so that management can rape everybody.

#144 Coho on 09.27.12 at 4:28 pm

Truth Hammer #40,

You raise some good points. These are examples of fear and/or greed expressed by the majority of people to some degree. It is the FEAR of NOT having enough. It is the GREED of NEVER having enough.

Security and happiness is a state of mind. In my opinion, in the still affluent (but sliding downhill fast) West, happiness and contentment derived from within has been replaced by a much shallower existence of pursuing external stimuli to fill that emptiness.

People deserve fair working wages and benefits, but humans tend to exploit one another if given a chance. Unions were spawned because of this and a middle class emerged. This is a very simplified summation to illustrate what people can achieve when uniting. And this is why issues which divide people like real estate, gay marriages, abortion, unions, liberal/conservative idealism and so forth dominate the airwaves. This is by design. These are divisive issues with no resolution because those on either side of the fence of such issues are subjected to very strong programming through various mechanisms and thus are very rigid in their beliefs. As long as we bicker amongst ourselves, we are like putty…no more than consuming puff balls in the hands of those shaping societies. That is, those whose dictates ‘sovereign’ governments abide by.

Many movements (truth, green, etc) and institutions have been co-opted and undermined to some degree. Everything is polluted and blackened. Fear and greed is the product of insecure people trying to cope in a world quickly changing for the worse. Isn’t there something terribly flawed with the idea that working people, who by definition will never be rich, need to accumulate riches to fund their retirement?

As for retirement, medical care, education, etc, there isn’t enough money for the people because the money is taking a detour away from the people and into the coffers of the very privileged few, which make up the Ruling Class. These are the ones who our governments (which increasingly appear to elected dictatorships) answer to.

The fear, greed, intolerance, anger, frustration, hatred, and selfishness people express is a reflection of societies in decline. It is every ‘man’ for himself more so than ever before. There is a lot of truth behind the saying “United we stand — divided we fall”. People need to divert some of that 100% focus on themselves and start asking where the wealth of their nations is going.

#145 DON on 09.27.12 at 5:28 pm

#119 Junius
Well Said – I was just baiting “NOT SO MUCH Truth Hammer” He needs to start to present both sides of the argument anything less and he is a hack with an agenda…on a real estate blog.

#143 Coho

Well said!

Old man – You can’t win with Smoking Man he is a 360 delusional being – although he does make a solid point once in a while – key words “once in a while”

@TRT – if you are tiring of this blog – Well then LEAVE. Go Buy a house in Vancouver or you’ll find yourself priced out FOREVER.

#146 chris on 09.27.12 at 5:37 pm

WHY is it canadians expect that the canadian government will not allow real estate crash by bailing everybody out of negative quity.
As a renter I am more then pissed off and will like to ask the government to bail me out of my huge rent I pay i Van city. Wtf is it that makes home-buuyers/owners so special and not renters for example, am I not a human being deserving of the same sort of protection????????? and lastly, why am I a renter/taxpayer bailing out lucky/whealty home owners?????????

#147 Old Man on 09.27.12 at 5:49 pm

Real Estate – there is a huge mob trial taking place in Montreal which I am following, and it blew my mind away, as there are dozens of developers involved, as the end cost is huge; as much as 30% on the end cost to buy a home. So what if this is taking place all across Canada in all major cities with a variety of mob type criminals? This would mean that the end price for any home is an illusion, as the developer usually has a profit margin fixed in at say 40%. Not sure what this is all about, but my take is that a MAJOR crash will be taking place in the near future, as the mob saw too much money to be made with a bubble, and they wanted to control the green.

#148 Old Man on 09.27.12 at 6:41 pm

Now I anticipate that some of you will say this was all about Government contracts in Quebec, and I say read my lips, as the mob will never discount $billions that is involved with condo towers; commercial shopping centers, and vast home developments – get it! I say how far across Canada did this scam go? I have never seen this in decades, so say this could become a huge bust, as the costs were pumped up for a developer to sell to you idiots, and this could become a massive crash with false cost values.

Garth is more than right, and those in 416, 519, and even in the GTA – sell out now, as something is not right about this all.

#149 jess on 09.27.12 at 7:13 pm

lax enforcement in regulation auditing,accounting, and media -sounds like Canada

=======

“escape”

“Many of these people escaped to London or other countries in order to preserve their wealth. But it is going to get more and more difficult.”..

Many of the continent’s richest individuals don’t have publicly traded assets, Mr Mobius said. “What we see is that these very wealthy people will begin to want to legitimise their wealth by a listing,” Mr Mobius said yesterday.

http://www.independent.ie/business/world/africa-could-have-up-to-200-hidden-billionaires-3242176.html

#150 Smoking Man on 09.27.12 at 7:16 pm

I thing I posted this on yesterday’s.

3 stela atwas in 40 min. No one is perfect.

fk ing un real. Rush to the go to catch the 5.43 tv says platform 6. Ha done this before so I head to track 5

The go police are on the track and say. Track 6 sir. I hate it when people call me sir. They say door will only open on track 6. Body language was a bit off but the beer buzz was kicking in so I head toward track 6. 4 steps down, I deside to gamble. No way I was going to make the train huge line not moving on 6.

So I head back up, police try and tell me to split, doors won’t open. Was consent rating. Liers takes on to know one.

I head toward the front 700 to 10000 people on track 6. Apparat from me and the go police I am the only human on track 5.

Several people on 6 are smiling at me. Don’t know if they are blog dogs going that’s the great smoking man. Or track 6erz thinking the losses ain’t getting on.

Was the first on the train as always.

#151 Smoking Man on 09.27.12 at 7:20 pm

Marco from van

Dude didn’t mean to hurt your fillings. I hope I haven’t pulled a pen pal and scared you from posting.

Your no match for me nore is any human. Don’t take it personal, I’ll be nice going forward.

#152 Herb on 09.27.12 at 7:29 pm

#138 Smoked Man,

a free man also knows his limits and the limits of what he can inflict on others.

There is a difference between being free and only wild.

#153 Old Man on 09.27.12 at 7:37 pm

#134 Smoking Man – have bad news for you as this hot babe has just kicked you under the bus, and calls you a loser for not being nice to her, and tells you to take a hike lol – sorry!

#154 ballingsford on 09.27.12 at 7:44 pm

Why are the stocks still rising? Something strange going on again.

Anyway, my poppa once said to divide your net monthly income into quarters; 25% for lodging (mortgage or rent), 25% for food, 25 % for bills (utilities, credit cards, car payment, etc.) and 25% for savings.
Simple enough?!?!?!

#155 Nostradamus Le Mad Vlad on 09.27.12 at 7:48 pm


Nice collection of posts today.
*
Double digit inflation coming? Mega Banks Note how the m$m is vilifying the Muslims, whereas the west (predominantly Christian) is in the process of screwing the world up, then blaming others. Speaking of that — Mitt Romney, and Obomba’s recovery Not much to write home about; Double dip Four in ten workers’ pay frozen; Atwater, Calif. Trying to avoid bankruptcy; Low Wage work force grows; CNN Money CNN is m$m, as bent and crooked as a barn door. Not to be trusted; The Lectro A one-world currency for a one-world govt. Neither will ever see the light of day; GDP revised lower It’s all horsefairies anyway, and two short clips; Another banxter charged (good); Banxters Doing what they do best.
*
Lieberman urges Obomba to control the ‘net; Russia – Pakistan This will piss DC off; Confirmed Again Statin drugs and arteries don’t mix; LRAD Sonic Weapons Dumbing down of sheeple underway; Putin Right on this one; Iran, and the hocus pocus bovine excrometer (from Israel and the west) about their non-existent nuke WMD; Communication Items for when TSHTF; Windows 8? Non Windows 7? Oui. I prefer XP; 2013 New comet discovered, seen next year.

#156 Smoking Man on 09.27.12 at 7:54 pm

DELETED

#157 Smoking Man on 09.27.12 at 8:00 pm

Herb the school system teaches A to Z. Fantastic world exists out side those boundaries.

Don’t put limits on your self. You old fart

#158 An Importation in Quebec on 09.27.12 at 8:10 pm

Hot asian money did exist but now nobody can come to Canada since July, exactly since the sales are falling. Funny how no newspaper found it:

Note: As of July 1, 2012, CIC has temporarily stopped accepting applications for the federal Investor program to focus on processing the applications we already have while the program is reviewed. This pause on new applications will continue until further notice. It does not apply to the Quebec Immigrant Investor Program. (http://www.cic.gc.ca/english/immigrate/business/investors/index.asp)

Following a decision by the government published in the Gazette officielle du Québec on June 29, 2012, the Ministère de l’Immigration et des Communautés culturelles has suspended the intake of applications for a selection certificate that can be submitted by candidates in the businesspeople class. To determine if these new rules apply to you and to find out the suspension dates for the intake of these applications, consult the page Intake of applications. (http://www.immigration-quebec.gouv.qc.ca/en/immigrate-settle/businesspeople/applying-business-immigrant/three-programs/investors/index.html)

#159 Smoking Man on 09.27.12 at 8:14 pm

155 deleted

ok perhaps I’m past the sweet spot of 2.5 wines

typing out a killer post, put a pot of coffie on, got to get this one out before I lose it for ever.

#160 randman on 09.27.12 at 8:21 pm

Don

“What I can’t stand is someone who presents half the story. What about management hiring their incompetent family and friends as hiring rules for management positions are non existent. In BC we have layers of management in all industries especially the Health authorities. One thing is for sure – if you got rid of most of these management positions – the Province would still operate by the front line workers. I get what you are saying…but not to look at the whole picture makes me wonder about your agenda. Let’s fix both sides…”

What half story?

Ok here’s the half you’re looking for

If management hires morons and lazabouts …
The business goes broke

End of story…

Can’t stand it when people don’t think things through

#161 Wha? on 09.27.12 at 9:06 pm

Renter – there is not a single correct fact in your post. Teachers get 65 per cent of their best 5 years, cannot retire with a full pension until years of service plus age equals 90 and they can only supply 50 days per year upon retirement.

Perhaps you might want to do a little fact checking next time. I’m not even a teacher for goodness sake.

#162 Marco from van on 09.27.12 at 9:07 pm

Smokey,

I grew up in Ethiopia, Sudan, Ghana, Nigeria. I hunt, fish, survived 3 revolutions and managed to come all the way out here… Trust me, the last thing you can do is scare me.

I’m just chuckling at the fact you mush have read the whole post… I cut and pasted most it barring the last bit – you actually had to read it to get to the bit that baited you… Man that still cracks me up.

One thing is for sure, I’m good where I am at. I made a living being free and make a living from deals indonacross 4 continents with people and businesses way richer (financially, culturally and intellectually) than you. I did this despite being literate and educated.

Your statement of being unmatched? Whoa… Good luck man, really!

All the best to you and your endeavors… Crack me up you do…

#163 Victor on 09.27.12 at 9:18 pm

http://www.theglobeandmail.com/life/home-and-garden/real-estate/no-large-pop-for-the-toronto-market-observers-say/article4571876/?cmpid=rss1

Prof. Andrew says he’s not surprised that the softness in Toronto’s real estate market in August continued into the first two weeks of September.

Sales in the overall market in the Greater Toronto Area declined by 15 per cent in the first two weeks of September compared with the same period last year.

Hardest hit, according to figures from the Toronto Real Estate Board, were sales of condos in the 416 area code, which plunged 32 per cent in the first half of September compared with the same period in 2011.

The “double-whammy” on the condo front, says Prof. Andrew, comes from the fact that buyers are stepping back even as more new units are arriving on the market.

Between 48,000 and 52,000 units are still under construction, he warns.

“That’s an awful lot of supply coming down the pipe.”

#164 Vangrrl on 09.28.12 at 12:37 am

#140:
Clearly you paid no attention to the fact I was replying to a very smug and condescending post by #100. Did you read what s/he wrote? Perhaps you should. And no, I’m not a barista (you assume because I rent I don’t have a more lucrative career?) but if I could earn enough slinging coffee in this city I might just do so, worked in a cafe years ago and it was a great job.
Btw, Calgary doesn’t rock.

#165 Graham on 09.28.12 at 8:06 am

#40, talking about teachers…..”at a rate of $250 per day. They do this approx 40 weeks a year and pull in an additional $200,000 per year”

$250 per day x 40 weeks = $250 x 5 working days per week x 40 = $50,000. Where does $200,000 come from?

#166 jess on 09.28.12 at 8:59 am

If condominium development=credit boom
Did the bankrollers lend the developers, interest reserves — money to cover the interest payments.

Do they then convert to an apartment and restructure into real estate investment trust?

#167 jess on 09.28.12 at 9:15 am

business without borders ?

Public-Private Partnerships
http://www.bwob.ca/industries/technical-services/how-canada-is-leveraging-its-ppp-expertise-worldwide/

Why did this part make me leery?
“These projects are, from a legal perspective, 95% to 98% commercial contract negotiation. Local law really has very little impact on those negotiations,” says Shouldice. “In fact, a lot of times, for international projects, the parties will choose to have the contracts governed by a different law, just to have the dispute-resolution procedure something other than the local courts.”

#168 kreditanstalt on 09.28.12 at 12:00 pm

Recently, we’ve seen a spate of headlines about “soaring Canadian consumer confidence”, “Canada in top ten (five, 20, whatever…) countries”, “Canada’s strong banks” and so on.

Forgive me, but all I see are fat people in Walmart parking lots, overpaid labour, no jobs for the young, car loans, pickup-truck loans and pawnshops…

Am I missing something or is the vehicle still moving even after the wheels have fallen off?

Dead cat bounce.

#169 Weekend Links – End of September! on 09.28.12 at 1:03 pm

[…] don’t know Garth Turner, he’s quite the character! I really enjoy reading his blog, and Parental Guidance is no different. WARNING: Real estate is VERY EMOTIONAL! You are either a real estate bull or a […]

#170 Crash Calaway on 09.28.12 at 6:37 pm

The thing about Calgary is that it lags the rest of Canada by 5 years. In 1980 when the rest of Canada were into punk and electronica Calgary folk were still struttin around in dungarees and disco clothes.
Is it the inbreeding in this province or is it that Cowtown has it’s head so far up it’s own butt.

Calgary is a city with major reality jet lag and this city falls the hardest when the music stops.
Boom & bust Calgary… it’s always been that way despite the realtors trying to glue the hands on the clock.

#171 Crash Calaway on 09.28.12 at 6:46 pm

Calgary is also the first city to allow every Otis with a dawg to take it down to the Ranchman’s watering hole.

A little Realtor spin could go something like this:
” Ifin yer dawg is old nuff ta drink… he’s old enough to buy a condo!”

“Oh yeah… Cowtown will never run out of buyers, and prices only go up”