Days of denial

On one side of a glossy white sheet is the headline, “Is the condo market headed for a correction?” On the other, the pitch, “Get expert advice and protect your investment. Call Craig Emond.”

That mailer was mass-delivered to thousands of condos in central Toronto by a guy many believe is a marketing genius when it comes to getting virgins to buy concrete boxes. In fact, Egmond boasts that he’s flogged over 1,000 condos over the past decade which, when you figure it out, is two deals a week. This is to condominiums what Justin Bieber is to puberty.

Craig’s done TV, too. Five years ago he blazed in an episode of Brad Lamb’s star-crossed HGTV epic series “Big City Broker,” when flogging for the condo king. (“Story line: Meanwhile, sales rep Craig Emond is finally about to move out of the shoebox condo he’s been sharing with his wife Susan and into a 2500-square-foot, one-of-a-kind apartment.’)

His specialty? Finding “value properties that have consistently made phenomenal profits for his clients.” In other words, Mr. Emond likes speculation and sees real estate not so much as shelter as a tradable commodity. Which is fine, and makes more sense than filling your garage with silver bars. But it’s telling that the master of marketing – now vp of Model Suites Realty – has now decided that fear sells. It can sure get his phone ringing with potential listings, from former virgins now freaked that their gossamer threads of equity are about to be snapped.

Fear’s in, actually.

After three long years of insatiable greed – fed by cheap mortgage rates, shameless bankers and herd instinct – people are scared again. Of course most Canadians were always terrified by the stock market (unless tasty little bits of it were sold off, disguised as mutual funds) but this is deeper. Real estate has been the forever fall-back position, so when news gathers than a correction might occur, it’s life-altering. Especially if that’s where all your money is.

Nobody is more exposed to this than young, recent buyers of downtown condos in any major city. Overwhelmingly they are first-timers who used extreme leverage and have average equity of less than 5%. None of them bought with the slightest thought the value of their units would do anything but increase. This is because everybody misled them. The real estate brokers and agents, the developer and salesperson, the mortgage lady at the bank and their parents.

Thousands are about to have a horrible experience, and many are waking to that fact. And while selling into a falling market when you have no virtually no equity guarantees big losses, this is what humans do. They get blinded and buy things at their most expensive, then panic and dump them when they fall. Mr. Emond doubtlessly knows that. Fear sells.

Meanwhile in the troubled West, some of my recent words have not gone down well. A media column this week referenced my belief Vancouver prices could fall by 40% before they hit bottom a year or three from now, then spelled out the consequences. Local developer, consultant, newspaper columnist and builder Michael Geller, who thinks 40% is impossible, said, “if we had a 20% drop in home prices, a lot of people would suddenly be under water. In other words, they would owe more on their house or condo than it’s worth.”

Geller also lays on the fear, saying a house price plunge of even half my recommended dosage would trounce consumer spending, cutting sales of cars and clothing and killing off the home reno business. And how about those poor retirees in their million-dollar houses?

“Then there is the real issue of people planning on using the equity in their home to help them in their retirement years. A one million dollar home on Vancouver’s eastside that suddenly plummets to $600 or $800K would have a huge impact on the future income of retirees. This would likely delay the retirement plans of thousands of Vancouverites whilst reducing the number of job openings and promotion opportunities for younger workers.”

Yes, those same young people who have been goaded into $400,000 condos with nothing down or are permanently shut out of the housing market. And here’s some even worse logic: “As we’ve seen in many American cities, housing may have suddenly become affordable, but that has been accompanied by a declining economy. Regardless of whom you believe, one thing is abundantly clear. If Turner’s predictions are correct, there will be plenty of negative fallout for both homeowners and prospective purchasers alike. We should therefore be careful what we wish for!”

Of course, it is possible to have a healthy city where houses don’t cost seven figures. Where families are not required to spend 70% of their income on shelter. Where debt’s actually paid off, so people have money to buy cars and save for retirement. Where you don’t need others living in your basement. Where kids aren’t taught that being adult means being mortgaged. And where rock star realtors don’t traffic in doubt.

I think we have lost our way.


#1 Rainman on 09.28.12 at 9:55 pm

yup… #1

#2 tow mater on 09.28.12 at 10:02 pm

I cant wait to see the sales numbers for Sept. It appears that in my area of Ottawa not too many homes have been selling.

#3 Mrs. GTA on 09.28.12 at 10:03 pm

anyone notice the ToSolds reports have been very light this week?

#4 City that smells like it sounds on 09.28.12 at 10:03 pm


#5 Rainman on 09.28.12 at 10:09 pm

We have lost our way indeed…. it is so easy to believe what you need too, I’m doing it right now, although that is easy to do with the numbers coming in.
In 2008 I was home owner with no intent on selling and we were just living, so didn’t even know there was any corrections going on??? sure it seemed like things were selling cheaper than normal, but everything goes up… right… and it did…
Not sure what happened this year, but we decided to sell and thank god we did… it was more of a.. lets list and see what happens? well it sold in June after 3 weeks on the market and I feel briliant… it was all pure luck though… my point is people live in their own bubbles and are either in denial or have the blinders on…
We are human and this is what protects us… so we think…. in this case it’s going to be very nasty for a lot of people.
My parents and lots of friends are in this mess… god bless…

#6 labrador refugee on 09.28.12 at 10:12 pm

Labrador city. its a small town in the middle of nowhere but house prices have gone up 400% in 6 years. It crashed 90% in the early 80’s and the first time buyers are taking on $450K mortgages the day they get hired at IOC.

I have been there. This defies all reason. — Garth

#7 zeeman on 09.28.12 at 10:14 pm

first i hope

garth, why are people still buying homes at asking price or close in gta if a correction is coming.

#8 Tim on 09.28.12 at 10:18 pm

Oh, pity the poor folk who are sitting on million dollar homes that have trebled in value. Many barely know the difference between a stock and a bond, but were fortunate enough to ride the biggest real estate boom in a generation, not because of any savvy or shrewdness, but dumb luck. So their homes lose 30 percent in value, many would still be way ahead. Unaffordable housing is what’s killing this economy. Many you people in Vancouver are leaving. Even with a 30 percent correction, many will still have difficulty in affording a decent home. The city is now toying with the idea of narrowing roads to increase density to make housing more affordable. This is hilarious! This is like trying to put out a bonfire with a squirt gun. The simple solution is to stop speculation by foreigners but tracking purchases and putting a huge tax on speculators. However, as the city doesn’t have the brains or the interest in helping locals, I doubt this will happen, so they’ll keep concocting moronic, half backed solutions such as narrowing roads to squeeze a few more buildings in and ruining the skyline with endless sterile glass towers with 500 sqr ft units, under the farce of “eco density” lol…go Gregor you airhead!

#9 chris on 09.28.12 at 10:18 pm

1 stttttt -just kidding
Canadians are very gollable people with very little if any financial sense.
Sorry, just an observation of an outsider from eastern europe who actually only spends money he earns!!!

#10 45north on 09.28.12 at 10:23 pm

Michael Geller: if we had a 20% drop in home prices, a lot of people would suddenly be under water. In other words, they would owe more on their house or condo than it’s worth.

no kidding, Sherlock

#11 TNT on 09.28.12 at 10:28 pm

Friend of mine, RE agent N Shore Vancouver not happy.
RE agents are feeling the pain.
Global engine slowdown = job losses = motivated sellers = reduced prices = pain.
If you read this pathetic blog and you own a place and will have after sales equity sell don’t be greedy.
This has just begun.

#12 bcgirl on 09.28.12 at 10:29 pm

Awesome post, Garth, well said.

#13 Canadian Watchdog on 09.28.12 at 10:33 pm

Today’s non-news:

July Insolvency Statistics

Consumer Proposals = distressed mortgages, credit cards, student/car loans, etc.

Canada: Bankruptcies up 0.4% y/y, Consumer Proposals up 13.3% y/y.
Ontario: Bankruptcies up 1.6% y/y, Consumer Proposals up 7.1% y/y
Quebec: Bankruptcies up 7.0% y/y, Consumer Proposals up 26.4% y/y.
B.C.: Bankruptcies down -0.8% y/y, Consumer Proposals up 20.1% y/y.
Alberta Bankruptcies down -8.0% y/y, Consumer Proposals up 15.0% y/y

Canadian Banks’ Impaired Assets Q2 – Non-Mortgage Loans (Car Loans, Credit Cards, Student Loans, etc. )

Keep touting CBA’s manipulated mortgage arrears stats Market Bull.


“After three long years of insatiable greed – fed by cheap mortgage rates, shameless bankers and herd instinct – people are scared again.”

Greater Vancouver & Toronto Home Sales vs Investor Confidence Index

And that includes lenders’ confidence too; because when insurance dries up and risk is back on the table for buyers who are broke and must borrow on deposit structures ( a loan) to pay a deposit on a mortgage (another loan), it’s game over.

To wit, there are 177,000 units under construction in Canada that I estimate worth between $50-60 billion dollars. CMHC and Genworth have combined amount of $37.6 billion remaining until the insurance limit is breached.

This is why mortgages are now coming back with a denied stamp on it. Lenders control demand, not the free market.

#14 Ms bboomer on 09.28.12 at 10:33 pm

We have lost our way,but by hitting bottom people will begin to dig deeper and think more rationally. Change is needed, and it is happening worldwide. Hopefully society will once again live within its means.

#15 Denise on 09.28.12 at 10:33 pm

You hit the nail on the head with your 2nd to last paragraph Garth. Couldn’t have been said better. Yes, our children need to have hope for a normal life, with a decent home that costs no more than 3X their annual income (only 1 income, not dependant on 2 incomes); the same as we had.
That MG is a parasitic creep & guess you can tell – reading his BS made me angry. He’ll keep spouting his lies so he can keep making his bags of money. Disgusting.

#16 kenken on 09.28.12 at 10:35 pm

this is gonna be a long slow correction process!!
depends on how many stoopid people there are around… and there are many many many!!! … Unbelievable that the stoopid bandwagon are still buying when the media, the govt and even the bankers are saying there will be a correction …. however mild they are saying!!

#17 Dimitri on 09.28.12 at 10:39 pm

What was Craig Emond offering to “protect your investment”?

#18 Rainman on 09.28.12 at 10:44 pm

Garth – Squamish seems to be in its own market??? nothing moving, but prices not trending down for the most part??? is it an anomaly???

Not what I hear. Big money has been lost there. — Garth

#19 Smartalox on 09.28.12 at 10:45 pm

Note to Mikey Geller:

Just because the consequences of something are unpalatable, doesn’t mean that they can’t (or won’t ) happen!

#20 Junius on 09.28.12 at 10:46 pm


You said, “I think we have lost our way.”

Truer words you have not written.

#21 T.O. Bubble Boy on 09.28.12 at 10:51 pm

Condos of 2011-2012 are the dot-com stocks of 1999-2000.

What percentage of Canadians wanted a piece of the action and owned risky stocks in 1999? Probably about the same percentage as own real estate now?

So, we had tech stocks in the 1990’s, real estate in the 2000’s (with a couple of bonus years), what will the bubblicious asset of the 2010’s be?

My bets are on:

a) Gold

b) For-profit education that doesn’t lead to jobs (Devry, University of Phoenix, ITT, etc.)

c) Social Media – Facebook, Zynga, Twitter, etc. (most have already failed, like MySpace)

d) the true contrarian bet — Apple. Just like Sony, Palm, Nokia, RIM, and every other device maker of the past, there will always be another up-and-coming company to make formerly “cool” gadgets look like paperweights.

#22 Retired Boomer - WI on 09.28.12 at 10:56 pm

Ladies & Gentlemen, presenting Miami & Phoenix north, I give you Vancouver, BC……..

Nice place indeed, but WAY over-priced! Jobs don’t pay overly well, taxes are quite high, and its quite soggy.
Some people would say BPOE yet, they may be very narrowly traveled.

Come back later, when housing will be “on sale” there

Same may well be said for a lot of “It Can’t happen here” towns, and cities. Even NYC got its leveling, no its not Newark, but close enough for RE purposes

#23 Peter Goesinya on 09.28.12 at 10:57 pm

#9 chris on 09.28.12 at 10:18 pm

Hows the euro doing?

#24 John S on 09.28.12 at 11:01 pm

Here in the Capital O, there have not been many sales in the past 3-4 months. However, sellers are not budging at even a 3% discount.

Clinging on to their houses before the free fall may be…anyone else has had this experience?

#25 Helga on 09.28.12 at 11:02 pm

Opening the link at #97 Aussie Roy on yesterday’s blog and seeing all the houses/mansions one can buy for $400,000 in other parts of the world, I can only wonder why Canadians are so screwed.

#26 Victoria on 09.28.12 at 11:05 pm

I was in an office today and I mentioned to someone I know that I feel sorry for all these young people who bought Condos (I was listening to a 20 something telling the receptionist she would not be able to take a holiday for years because she and her bf just bought a condo). I was shocked what this person said to me:

RE will never go down in Victoria
There is no subprime in Canada
Interest rates will never go down

This is someone in their early 40s. I was shocked.

#27 Inglorious Investor on 09.28.12 at 11:08 pm

What Michael Geller and other property pumpers either don’t understand––or don’t want to understand––is that a severe and prolonged drop in housing prices would not be the cause of a weak economy, but a symptom of it.

Yes, there would be a feed-back loop, such that a drop in housing would exacerbate an economic downturn, but the underlying cause is too much debt.

Geller and his ilk are like self-serving politicians who want to keep pumping a bigger and bigger bubble just long enough that when it bursts it won’t matter to them, because they’ll be out of the market or public office and they won’t take the blame. Either that, or in their ignorance they truly believe that markets should always and forever-and-a-day go up.

But what we should all understand is that perpetual growth is not only impossible, it’s unhealthy. Especially in a system whose foundation is debt. Inevitably, debt will grow too large and at some point it must come back into balance with actual wealth.

The rebalancing can occur in three ways: generate enough extra wealth to pay for today’s and tomorrow’s obligations; default on the debt, or; inflate it away. Or a combination of all three.

Those of us in the Western world should hope and pray that the US can maintain unchallenged military superiority (long enough for us to get through this era of massive deleveraging), especially in the seas. Because it is this is military might, more than anything, that is keeping the dollar and the dollar/treasury system from sinking.

Without getting into the massive frauds that have been committed and the trillions that have been stolen, as a society we’ve basically spent too much of our future wealth. So much so, in fact, that getting back into balance could be very, very painful. But of course, the pain won’t be equally shared.

Homeowners want their home values to keep going up. It makes them feel richer. But if everyone’s home goes up, is anyone really richer? Also, think about how much home prices have appreciated in the last ten years or so. Does anyone think that keeping this up in perpetuity is actually a good thing? I guess if you earn your living off it, the answer is yes. Until your kids or grandkids need somewhere to live.

#28 wes coast on 09.28.12 at 11:10 pm

Its ok Garth, Mayor Gregor Robertson in Vancouver has found the answer to your annoying economic fundamentals: increase density. He’s pushing through a plan to allow neighbourhoods that have SFH’s to building multi-family units. Look how well density has worked so far. We’re packed in like sardines already and it only takes 11 x’s avg income to live here. No macro-economics here. Just need a policy tweek from Gregor and more concrete filing cabinets to litter the skyline and things will be ‘more affordable’

We have the population of Mexico city disbursed across the second largest country in the world – to think any idiot would pay what we pay for housing in Canada is just plain stupid.

Densify this Gregor

#29 bsallergy on 09.28.12 at 11:11 pm

Garth, Garth, Garth . . . I’m constantly told I am nuts and it is better here. Why would anyone believe you? Real estate always goes up and everyone wants to live in Dampcouver. Hell here in the peg people wants to live in some far flung, overpriced suburb or exurb.

#30 Jamie Essex on 09.28.12 at 11:17 pm

Hold onto your money if you have it as you will be able to buy homes for fractions

US’ Bernanke declares war on Canadian economy

A big haircut just around the corner for all indebted Canadians according to The Star. Lots of homes will hit the market at the same time just like happened in the US and the price of property will plunge forcing more and more down the big black hole.

That site will make you eat kittens. — Garth

#31 Tim on 09.28.12 at 11:27 pm

Re#9 You’re from Eastern Europe and you are talking about financial sense? lol

#32 Ex Realtor on 09.28.12 at 11:31 pm

When working for sellers in the last downturn, I advised them to cut below the other listings and sell fast. Prices rose $1000 per week in the upswing and the same on the way down for those that really wanted to sell.

There were an alarming number of buyers who thought they’d made a deal way before the bottom hit. After a while, I just couldn’t tell the buyers to buy. Now there are agency agreements, where a realtor works for the seller or the buyer. It makes it easier on the conscious for those that have one.

#33 Inglorious Investor on 09.28.12 at 11:40 pm

#13 Canadian Watchdog on 09.28.12 at 10:33 pm

You touch on some very key points.

First, one of the reasons this biggest housing bubble in Canadian history was able to happen is because of the disconnect between the mortgages and the risk. Through MBS and related securities the banks are able to sell the risk to others. This clearly encouraged some very bad behaviour in the form of reckless lending practices. If the risk had to stay on the banks’ own books, they would never have allowed the bubble to inflate.

Second, you mention that the banks drive demand via their lending practices. Well, I think that, with some fluctuations over time, housing demand is pretty constant under normal conditions of steady population growth. However, property prices can only go as high as banks are willing to lend, so it’s not really unit demand that they affect, but prices. People need a place to live whether they rent or buy. It seems to me that the cost of money can only really shift demand between rental units and purchased homes, but the total number of housing units will reflect actual household formation.

Another thing, real estate has a lot of momentum because of the time and energy it takes to build properties. Because of this inertia, usually, building booms are still well underway after a downturn begins. The eventual oversupply will drive prices down farther than one might expect until the market clears and supply/demand come back into balance.

This is one reason I expect the correction in the condo market to be much more severe than that in SFH. In fact, the Great Canadian Real Estate Crash, if it comes to pass, will likely be called the Great Condo Crash. If Toronto keeps growing at its current rate, condos just may be the thing to buy in a few years time if you are an investor. As much as I deride condos as a investment for the average home owner due to their lack of land, fee inflation, etc, it’s clear that the current trend in housing is toward multi-family as I think SFH may be beyond the reach of most future residents as the costs of home ownership keeps going up faster than incomes. We’ll see.

#34 Smoking Man on 09.28.12 at 11:47 pm

Garth Seriously. Deleting the last post.

I only made referance to the sears catalog cause I new Old man could relate. Perhaps should have substitued H with trickster..

Any way Old Man not doing the weather witch. But ill buy her drink.

#35 kreditanstalt on 09.28.12 at 11:50 pm

Well, risk is here to stay. Canadians had better get used to speculating in the stock market as a “fallback position”…

#36 Canadian Watchdog on 09.28.12 at 11:59 pm

#21 T.O. Bubble Boy

“what will the bubblicious asset of the 2010′s be?”

Bonds and student loans.

#26 Victoria

“RE will never go down in Victoria”

Don’t be surprised when it happens; people will still refuse to believe it.


I’ve obtained some new historic data (the same data The Bank of Canada uses) and have now quantified a broad time frame of 10-25 years for a correction.

#37 Inglorious Investor on 09.29.12 at 12:07 am

#32 Ex Realtor on 09.28.12 at 11:31 pm

Dual agency should be illegal or effectively so. While I am all for the freedom to let market participants do as they please within the limits of the law, dual agency is one of those things that is just so fundamentally wrong, it should simply never be allowed to happen, unless it is under exceptional circumstances and microscopic scrutiny. I’ve seen it in action a few times. You want to take a shower after the experience. And firehose the agent.

#38 Harry Reems and Linda Lovelace on 09.29.12 at 12:10 am

This blog is way too sexualized….we think that it deserves a PG 65 rating.

PS This is due to a complaint by some loozer named Smoking Man

#39 Observer on 09.29.12 at 12:16 am

Canadian cities have become prisons of debt where the bankers are the warden and real estate agents play the officers facilitating the movement of prisoners from one type of cell to another. A speaker blares 24/7 “Buy now or be priced out forever”! “Buy now or be priced out”! Meanwhile outside the sun shines a warm glow on the freedom loving renters who smile as they walk by the watchtowers on the outside and think to themselves “now that’s where I would be if I hadn’t taken the bearded one’s advice”.

#40 Matt on 09.29.12 at 1:00 am


“A media column this week referenced by belief Vancouver” – huh? Typo?

#41 robert on 09.29.12 at 1:04 am

Salmon Arm BC is little talked about but when you look into the MLS stats for this small BC City it becomes clear that things in the RE world are already horrific. Its called no buyers and I mean no buyers. You can count on one hand the number of ytd completed sales in the $450,000 range. The MOI on houses between $250,000 and $350,000 is a staggering 23.75. Yes almost two years supply and no buyers. Take a half hour drive into Vernon and then another hours drive into Kelowna and more of the same. Take another hours drive from Salmon Arm and Kamloops BC is no better. Talk all you want about a soft landing but if you were talking to someone in these areas of BC trying to sell their home they would laugh at you.. in most cases they have already corrected by 20% with more of the same clearly on the horizon. The pace of decline always quickens when the availiable inventory overwhelms demand. We are at that point right now!!

#42 THE CELIAC HUSBAND on 09.29.12 at 1:04 am

As with any other commodity or product in life, marketing is everything.
When one lives in Calgary and hears or eads daily accounts of how RE is going nowhere but up, eventually it sinks in the same as Mercedes being the best car in the world.

#43 Nostradamus Le Mad Vlad on 09.29.12 at 1:17 am

“I think we have lost our way. Fear’s in, actually. This is because everybody misled them.”

To some extent, it’s more a 50-50 call. Zombiesheeple let themselves be star-struck from verbal diarrhea given by their parents, in-laws, agents and mtge. brokers.

But the CPC has to stand alone, encouraging 0-40, 5-35 and now back to 25 year terms with XX% down.

Look at the bigger picture. What Harper said has become prophetically true.
Women running households? Not a bad idea; Rogue banxters Really? Seven Years of financial freedom for Brits.; Selling a home to fund retirement is a risky proposition; Cdn. Friday links IMF and Iceland Going after them again; Solveable or Unsaveable? China delivers supertanker to Iran;Shanghai China’s biggest steel maker closes Shanghai plant; Hard line on teachers; Phoenix Mayor One way of losing weight; UK going to US style medical? Possibility exists; Ed Miliband Let’s see if he keeps his promises, unlike Harper and this what he is talking about; Communist Obomba says don’t insult China (Soros likes them); Spain Betrayed by Europe; Recession over Everything is fine and dandy again, but Recession bites for some.

UN and Agenda 21 Guaranteed to tax sheeple out of existence. That’s what we’re here for! Costs The Obomba family vs. The Royal family; Inflationary Sun and Deflationary Black Hole The EZone is caught in the middle; 9:31 clip Same as it ever was;
US drowning in unemployment; Consumer spending falls; Shiller Housing recovery? Maybe; Wealthy Americans gain; Japan PMI down while France increases tax; Good Business Are the Dodgers worth US$2 bln.? Someone thinks so; Chinese exports way down; Chicago PMI report sux.
6:38 clip Israeli Rabbis greet Ahmadinejahd in NYC. Iran currently has the largest Jewish population in the middle east outside of the state of Israel. Think these guys want war? It’s Noddin’ Yahoo and the zionists who want war, no one else, and Eight Reasons why Iran isn’t a threat; 2:58 clip How TPTB are trying to control and regulate the ‘net; Chinese ad re: the islands; Baffled I know the west is deteriorating, but this is ridiculous; Anti-bacterial Soap Not as good as real soap; P&P Strange name for a restaurant; Live Long and Prosper Life is being extended; Borat Bikini Different, that’s fer sure; SA changes and Chart of SAT Tests NAmericans are being dumbed down through the education game; Monsanto Ten reasons why GMO foods are not needed; Billary Supporting US #1’s enemy (I forgot that al Quaeda doesn’t exist, it’s a made-up group); Adios, Monsanto When it happens, close the door on the way out, please; Nashville’s Lamborghini.

#44 geofferson on 09.29.12 at 1:28 am

I actually interviewed Craig as a potential listing agent when I sold my Central King West this summer. He was concerned about the Toronto Condo Market (especially downtown) and was worried about losing some listings for the first time. I ended up going with another realtor and sold my loft for 99% of asking in just a few days of being on the market. I got $14,000 more than Craig advised listing at, but I did appreciate his frank openness about the state of the TO condo market.

#45 Bo Xilai on 09.29.12 at 1:40 am

Looks like it’s official… Greater Vancouver’s sales numbers for September are the worst for any September since at least 1994…

Even worse than Sept. 2008.

Stick a fork in Vancouver RE… She’s done.

#46 Jack on 09.29.12 at 2:02 am

Exactly. RE agents need to sell, and if nothing is selling in a down market they have to instill fear in the seller to lower their prices…. On the way up they instill fear in the buyer so they buy quickly and for the highest price they can afford. Fear and greed… I experienced it first hand and it is a [email protected]@&ed up. Very slimy tactics…this is why so many people hate them.

#47 Marcel on 09.29.12 at 2:06 am

Do you ever comment on any other cities but vancouver or the GTA?? how about sasky?

#48 Devore on 09.29.12 at 2:34 am

If Turner’s predictions are correct, there will be plenty of negative fallout for both homeowners and prospective purchasers alike. We should therefore be careful what we wish for!

They just don’t get it. It doesn’t matter what you wish for. Might as well wish for rainbows and unicorns, it has just about as much effect on reality.

#49 Buy? Curious? on 09.29.12 at 3:18 am

Two guys, over 9000 views, one great plan.

Who wants to make money? I said, WHO WANTS TO MAKE MONEY?


#50 Coho on 09.29.12 at 4:55 am

On the surface it would appear we’ve lost our way. But, was it ever ‘our way’ to begin with? From a mundane standpoint I say no, it hasn’t. From a spiritual perspective for those of us inclined that way — perhaps so in many cases. This is sad because this is what really matters, a connection to something above and apart from crazy planet earth, and the only thing that WILL matter in a fragmenting world.

The path is paved in the direction which suits TPTB. They pave it, we walk it and all along are science exhibits, schools, media, churches, kiosks of all sorts, etc. In a sense, it’s like a western movie set. A fake town with store front facades. Why fake, when there appears to be substance to the institutions that our society is founded upon? It’s a question of the premise of our society. If the truth of things is that everything is what it appears to be then one could conclude that everything is ‘real’ in that sense. But is everything what it appears to be? I think that more and more people are starting to see through the façade and realize that things are not as presented and reported by the establishment.

Can humanity shape its own future? After all, we have free will, right? So do cows, don’t they? Or are they bred and/or thus programmed to behave in a certain way. You know… the way cows should act.

People seem to act in ways contrary to their betterment – contrary to their well-being. Perhaps humanity is just as predictable in its behavior as different animal groups, although animals don’t abuse themselves. So, how free exactly are we to exert true free will considering our inherent traits combined with very strong belief systems thrust upon us at very young ages? Perhaps we are bred and programmed like cows and have as much chance to shape our future as the cows do to shape theirs. This is the enormous challenge facing all of humanity.

This world is like a chessboard. The people are the pawns. Churches are the bishops. Governments are the rooks and knights. Monarchies are the King and Queen. We are all pieces on the chessboard, but we are not the players. We’re merely the tools of those shaping earthly society for their own benefit and to our detriment–from the poorest and ‘lowest’ right up to the rich and powerful. We’re the ‘played’ and those unseen hands on opposite sides of the board moving the pieces around are the ‘players’. Even the ‘players’ have their master, the one who invented the game, but now we’re getting into metaphysics…

War is coming. The same two factions that brought us WW1 and WW2 and wars before and since have never stopped vying for world dominance. It’s the same groups carrying out their shenanigans from one generation to the next.

Of course the common folk of all countries want the same thing…peace and prosperity for their families and their countrymen. We the common folk in all cultures and ethnicities, have similar hopes, wants and needs and wish to live and let live. Unfortunately, the chess players have other ideas, and if it is war they want, then it is war they’ll get — on our tab and with our blood. Dictates will be passed down to heads of state and they’ll fall in line and align with their respective sides.

More countries and their leaders will be demonized, a sense of urgency to bomb innocent people to bits will ensue, all under the pretense of spreading ‘democracy’ and giving ‘humanitarian aid’ to those we invade. The war drums will beat, the media will fall in line and beat the war drums too, and it’ll be game on whether the people want war or not. That is why we don’t really have true democracies, but rather elected dictatorships. We’re all given dictates. Our leaders, like the rest of us have to walk the same path that is laid out for us to follow. We don’t have to walk the wide and easy path to destruction, but chances are we will. We the people and our government can stop and think and do what’s right, but we won’t. We’ll cave into pressure and abide by the dictates given us by the war mongers. What is so sad is we think we are making our own decisions, when in truth, we’re being played.

So in the big picture, our little bickerings together with the price of residential real estate are almost meaningless. However in the narrow scope of our day to day life, the resource drain of shelter and in particular being mortgaged to the hilt appears to be very meaningful. These are not only millstones around our necks, but serve to keep us distracted from reaching a higher understanding of the world we live in.

#51 Back East on 09.29.12 at 6:09 am

Home prices are inflated. That’s a given. But I think everyones already high debt is bound to inflate too….in a way.
When the economy was artificially growing, so were wages, so when the correction takes hold, everything has to correct with it.
As an example, when house prices climbed, so did everyones wages that helped build those homes. When they fall, so must the salaries of all the workers lucky enough to keep a job. But all the debt stays the same. So less earnings to pay it off equals longer payment period. That equals more debt.

#52 Jane24 on 09.29.12 at 6:28 am

to 23 Peter Goesinya

Easter Europe doesn’t use the euro, so your point is?

#53 X on 09.29.12 at 6:35 am

Canadian Watchdog – thx for the posts!

#54 TO Reader on 09.29.12 at 6:38 am

I now feel that this “correction” argument is now mainstream. … It’s getting a little boring now.

#55 Regan on 09.29.12 at 6:40 am

I can’t take any more “we’re running out of land” arguments. It’s nonsense, along with the idea that Vancouver or Toronto are first class cities like London and Paris. We haven’t even begun to reach population densities that would affect housing prices.

114.7 km² – city of Vancouver, population < 650,000
105.4 km² – city of Paris, population 12 million
1,570 km² – greater London area, 8 million
7,124 km² – greater Toronto area, population < 6 million

#56 Regan on 09.29.12 at 6:48 am

#21 T.O. Bubble Boy – and too true, so many bubbles in such a short time. And mini bubbles in anything new and promising, like renewable energy, as money floods in and then crashes the whole infrastructure. Is it retiring boomers chasing retirement cash? Negative return bonds forcing institutional investors to chase higher returns? When will society’s investments return to actually creating progress and innovation?

#57 John on 09.29.12 at 7:24 am

Labrador Refugee wrote:

“Labrador city. its a small town in the middle of nowhere but house prices have gone up 400% in 6 years. It crashed 90% in the early 80′s and the first time buyers are taking on $450K mortgages the day they get hired at IOC.

I have been there. This defies all reason. — Garth”

I have an idea for a book about Canadian Real Estate:

“The Labrador City Property Boom”

It’s all about the global economy and derivatives. I’m confused about the evolving story here. Which is it….knowing and avoiding…or not knowing and denying?

I’m leaning to the second.

So what’s the plan about this discussion opening up to the obvious? Anyone want to talk about why the LC went up 400 percent?

I’d started by saying that not only does it not defy reason, it’s married to it.

I’m hangin’ out in the LC. Why’d my house go up 400%. Hey, I live in the LC and just cashed in. What’s up?

I’d like to know when the gears are going to shift here.

#58 2centsCdn on 09.29.12 at 8:04 am

Of course people will feel poorer and spend leaner if their home/condo’s value goes down 20% (although most are financed so high they’re already spending lean). And of course when the market finally says “things ain’t selling, stop building” many building trades people, real estate people, mortgage people and The Brick sales people will lose their jobs and stop spending ….

BUT what’s the alternative? Keep the lie going? Keep people sick to their stomach trying to provide a basic life for themselves and their families? This thing was going to re-balance itself either way, whether the gov’t built new rules or not. When the fundamentals were as out of wack as they were, and you build in things like lots of Boomers wanting to downsize in 5-10 years, mortgage rates going up in 3-5 years, the western world getting poorer …. who could possibly think this was sustainable? To build a economy on false pretenses is more dangerous than letting it balance. Reality MUST win in the end.

This is a natural market phenomena …. in any market. For the people who are comfortably financed, live within their means and have a stable job … go about your life and enjoy. For the ones who checked off the “high risk” box on their path in life (whether planned of through greed and/or ignorance) ….. as usual … high potential gains means high risk ….. and you are about to lose. Only first in, first out wins in this life style .. and if you aren’t out yet …. you’ve got some years of suffering ahead of you.

#59 Nathan on 09.29.12 at 8:28 am

A few notes…

Inglorious Investor — I really enjoy reading your commentary. Thanks for your insights.

RE: Boomers relying on the equity in their homes to fund their retirement — Certainly this is true for a lot of working and middle class boomers, but I’m not sure that it’s as big a problem as many are stating. As a poster noted above, a lot of people have been living in their home for many years and have paid off their mortgage (or a good chunk of it) while also contributing to a pension or other retirement savings. Yes their retirements would be easier if they could cash the house out at $400k instead of $250k, but the tenability of their retirement plans never hinged on expectations for 6-8% annual growth in the value of their homes. Maybe I’m wrong, but looking at my parents and their circle of friends who are in that demographic I get the impression that a lot of people have just been living in one place long term without banking on massive returns when they sell and therefore won’t be totally hooped if the selling price for their home reverts to 2004 levels.

Perhaps this is less representative of the population-at-large than I expect, though.

#60 John on 09.29.12 at 8:37 am

Junious wrote:


“You said, “I think we have lost our way.”

Truer words you have not written.”

I don’t agree. It’s contextual. If only 10% of the big picture is presented, without connecting the dots, “I think we’ve lost our way” is the height of either denial or cynicism. The right to say that has not been demonstrated or earned.

#61 Ken R on 09.29.12 at 8:46 am

As a society we have definitely lost our way. The issue no one addresses is quality of life. A chap in a small town, with an average job, who pays cheap rent and cash for his other purchases has a much better quality of life than a house poor, over indebted material junkie who craves the appearance of wealth.

It’s not about appearance; it’s about substance and people don’t get it. It will be an expensive lesson.

#62 Deb on 09.29.12 at 8:48 am

There are many who either do not or cannot recognize the big financial compass, where the direction used to point to greed and now points to fear. Confidence is the bellwether of consumer behaviour. It is of huge importance for the Canadian economy (65% of which is fed by consumer spending) and when it changes direction, however slowly, it can be very difficult to change course. Confidence can only follow one of two paths, one being fear and the other being greed, the Siamese twins of motivation. Each one can be dangerous and each one can bring opportunity, depending upon the previous choices that have been made resulting in one’s current personal financial and housing situation. Accordingly, the change in consumer confidence which we are experiencing now will be very painful for some, and a budding opportunity for others. It depends on what you decide to do now and it depends on how you plan for the coming months.

#63 Steven Rowlandson on 09.29.12 at 9:13 am

“I think we have lost our way.”
Absolutely right the nations have lost their way and canada is no exception. Those nations that rejected the christian god and real metallic money are on the wrong path and must repent!

#64 T.O. Bubble Boy on 09.29.12 at 9:19 am

@ #36 Canadian Watchdog

“what will the bubblicious asset of the 2010′s be?”
Bonds and student loans.
Agreed on both – I jumped ahead from student loans to the quasi-colleges that abuse them. Bonds are the most obvious one, but timing is tough to predict. They may just hang out where they are now for a few more years as Bernanke and the ECB buy them all.

#65 David McDonald on 09.29.12 at 9:24 am

Hi Garth,

I was lecturing on regression analysis on Friday and made the point that extrapolation was a risky procedure but often exactly what one wants to do. I mentioned that extrapolating housing prices into the future based on the past 10 years was fraught. This provoked an immediate concerned question of why I thought prices might go down. I said I was no expert but wrote down your blog address on the blackboard.

I don’t think the fine young people in my class have lost their way but they do need to hear your old fashioned message that debt is dangerous and prices don’t always go up. The same goes for university administrators who should get the message that raising tuition fees isn’t the only solution to balancing the universities’ books.

#66 Frank on 09.29.12 at 9:33 am

The problem is that a housing crash would impact most of us in a negative way, so let us be careful what we wish for. Let us hope it is the so called soft landing that occurs and not a quick pull back. A lot of idiots salivating for a housing crash have no idea what that means.

#67 eaglebay - Parksville on 09.29.12 at 9:36 am

#50 Coho on 09.29.12 at 4:55 am


#68 tkid on 09.29.12 at 9:57 am

*the tenability of their retirement plans never hinged on expectations for 6-8% annual growth in the value of their homes*

One of the things that is being repeated in the Globe and the National Post is that boomers don’t have enough saved up for retirement and a huge percentage of them don’t have a pension coming to them and those that do will be relying on the promises of an underfunded pension plan. Garth has reported talking to people who did not know how little they would get from CPP and OAS.

In these cases the vast amount of their net worth will be in their home, and they will need to sell their home in order to fund their retirement. But the market is falling and that nest egg is getting smaller and smaller.

Why am I sweating this when I am not a boomer and 25 years away from retirement? Because before I know it I’ll be a retiree, and the boomers are numerous enough that they’ll vote in massive raises in CPP and OAS. I’ll be paying for their retirement – that’s if there are the funds for that. Odds are the Feds will be bankrupt but I doubt seniors will care unless it means they do/don’t have to eat cat food to survive.

#69 Smoking Man on 09.29.12 at 9:58 am

How The force works.

Last night before bed time a song keeps playing in my head.

Welcome back Kotter. Welcome back, welcome back.

Any one watch the news this morn

#70 renters rule on 09.29.12 at 10:19 am

Hey Garth, can you DELETE John?

Reading his comments is like a combination of watching Bill Murray’s Ground Hog Day and Monty Python’s Argument Store skit.

So tiresome. Oh ya, the internet has a term for that:


And before you ask, no Troll, I will not respond to any subsequent drivel you will be posting.

#71 TurnerNation on 09.29.12 at 10:19 am

#3 Mrs. GTA on

Yea TO Solds is light. Only the junk is selling. SFHs in C01, 02, Annex areas selling 100-130% of list mostly, in the past week.

Closer to East York WW2 era bungs are selling north of 1/2 a mill! Insanity.


Meanwhile over in Toronto’s ‘Freedville’ a tiny box for near $400,000. Look at the large pictures. Barely room for a couch here:

#72 dv8 on 09.29.12 at 10:22 am

Alberta’s deficit a whopping “3 billion dollars” so much for that surplus they had LOL there goes the jobs–to-3-billion-deficit/article4509683/

#73 Rob now in Nova Scotia on 09.29.12 at 10:24 am

Quote: “… and makes more sense than filling your garage with silver bars.

You’re right. Bars are no good. 1 ounce rounds are way better. In the future when prices for things we need are rapidly increasing, you will want to barter silver for essentials but bars will be way too valuable. 1/2 ounce and 1 ounce rounds are the way to go.

Keep stacking…

#74 TurnerNation on 09.29.12 at 10:30 am

Decidely un-sexy photos of late! Time to open up the floor for blog dog self portraits? ;-)
This weblog must be moving into another phase. However, its idea-generation ability has not grown flaccid. Not to put too fine a point on it.

#75 Kim on 09.29.12 at 10:30 am

Regan on 09.29.12 at 6:40 am
I can’t take any more “we’re running out of land” arguments. It’s nonsense, along with the idea that Vancouver or Toronto are first class cities like London and Paris. We haven’t even begun to reach population densities that would affect housing prices.

114.7 km² – city of Vancouver, population < 650,000
105.4 km² – city of Paris, population 12 million
1,570 km² – greater London area, 8 million
7,124 km² – greater Toronto area, population < 6 million

Been to London and Paris many times (work/vacation) and Toronto doesn't even come close. Toronto I would compare to Chicago and even then Toronto is beat. RE prices in Chicago is 40% cheaper for similar area's and homes. People who think Toronto is a great city obviously do not travel much. Toronto is an average city with well above average prices.

#76 Elmer on 09.29.12 at 10:35 am

Old people should get out of Toronto. Make room for those of us who actually need to live here to work, and who actually contribute to the economy instead of leech off it. Go live your retirement in Leamington or something.

#77 Dave on 09.29.12 at 10:37 am

Its not just those that purchased recently that should be worried. Those that have used their homes as ATMs and rolled consumer or other debt into their mortgages are in big trouble too.

A friend of mine who has refinanced twice, rolling over 100K into his mortgage has another 40k in credit card debt. He recently tried selling his condo and refused to listen to his Realtor on every suggestion he made. He also refused to reduce the price to be competitive and SELL now. Now deciding to wait again until spring. “I’m losing the equity in my home”. Dude, you’ve already spent the “equity” in your home.

Nothing like waking up one day in your mid-50’s and realizing that you haven’t got a penny, or still owe, after selling a 350k house. I suspect there are a lot of people out there that are going to find themselves in the same situation.

#78 Dom on 09.29.12 at 10:38 am

The market has really slowed down and seems to have stopped in North York. Nothing is selling and houses are being taken off the market for a week or two and then relisted as agents seem to be trying to hide the fact houses are not selling for months. Prices reductions are hitting the market at a pace not seen since 2008-09 during the last housing drop only this time nothing can be done to stop the housing crash. Buyer would be smart to wait and watch prices fall 10G’s a month. By next year that $600k house could be $450-470K and in a couple of years $400k or less.

#79 Joe_blown_away on 09.29.12 at 10:48 am

@coho # 50:

Awesome post! Totally agree.

#80 Old Man on 09.29.12 at 10:54 am

#78 Dom – there will be many couples finger pointing and blaming each other for buying a condo; the divorce courts will be busy. Oh this will not end up well!

#81 Hugh Jasz on 09.29.12 at 11:05 am

71 Turnernation:

Text from the listing for the East York special bung-a-hole:

“Sold ‘As Is’ Please See Attached Agent Instructions And Schedule B. Offers Must Be 6 Days Irrevocable. Deposit Cheque Must Be ‘Herewith’, Therefor, Must Accompany Offer. Offers May Be Submitted On Or After September 20th, 2012”.

I have not been house shopping for several years, but I’ve never seen a listing being so demanding for a ho-hum house in a so-so neighbourhood……Anyone who’s driven through this part of the city knows it’s not like we’re running out of these bungs.

That said, it apparently sold for ask…..maybe it really is different here.

#82 Tony Right on 09.29.12 at 11:10 am

Is this city called El Dorado?

#83 Hugh Jasz on 09.29.12 at 11:23 am

Also love the listing for the filing-cabinet-drawer in Freedville:

Living room – n/a
Dining room – n/a
Kitchen – n/a
Master bedroom – n/a

You want more than one room???? Apparently not at this price!

Guess-timate from those pictures, we’re looking at almost $700 per finished square foot.

Mortgage payment of $1800 ish (you are not putting more than 5% down, are you?)

Condo fees of what, $300? $400?

Taxes of another what, $300?

Paradise in the sky is yours for a mere $2500 ish a month. Did I mention that real estate never goes down?

Sign here!

#84 City Slicker on 09.29.12 at 11:23 am

Garth one of the sample areas I look at is a neighborhood in Lethbridge. There were 30 houses listed there end of summer. Come Fall this jumped to 40, I thought it was strange cause usually its the other way around, people usual take houses off the market in the dead Fall season if not sold by summers end. Can this be the sign of Jonah?

#85 willworkforpickles on 09.29.12 at 12:00 pm

Truth is moot.
Most homeowners with little to no equity and many with will only believe the lies that suit them best right up until the panic sets in that is.

#86 willworkforpickles on 09.29.12 at 12:21 pm

Neighborhood bike trail bridges crossing over drainage culverts in the bigger cities generally provide a little more seclusion underneath them from the outside world than what a full scale motor traffic bridge can provide beneath.
Space is limited though and it’s always best to scope out and claim one of these more choice spots early on in an all out housing market crash. Be prepared to share space and live shoulder to shoulder with strangers at any rate.

#87 Gunboat Denier on 09.29.12 at 12:27 pm

55 Regan

1) You have listed the metro pop for Paris. City pop to match area you listed is 2M+. The density stat can be
quite misleading as city boundaries may appear quite
arbitrary and include many non-populated features and

2) Ironically, increased density hopefully leads to lower housing costs on unit basis. Unfortuneately, the intention to densify can increase the land base value negating a large portion of the desired effect.

3) Do not assume all land is developable. The political constrainsts are as real as the physcial ones. Looking out my window, most of the surrounding land is either Agricultural or Forest reserve. Throw in zoning and servicing requirements for development for good measure.

Where these constrainsts dont exist, land should be
much cheaper. But you may not want to live there…..

6 – labrador – must be something in the water…

#88 Seriously? on 09.29.12 at 12:32 pm

De Nile is a river in Egypt.

Speaking of rivers, I will lmao when all of the home builders in Surrey finally figure out that they are up Indus Creek without a paddle or for that matter E.I. benefits. (puns intended)

#89 Junius on 09.29.12 at 12:36 pm

#28 Wes coast,

You said, “. He’s pushing through a plan to allow neighbourhoods that have SFH’s to building multi-family units. Look how well density has worked so far.”

I think it has worked very well for Vancouver. In particular, come it to the alternative which is sprawling suburbs filled with endless sameness and strip malls.

The City of Vancouver simply has no choice. Without densification it loses its tax base and vitality. How can anyone argue that the City of Vancouver is not a more vibrant and cosmopolitan city now than it was 15 or 20 years ago? Don’t we credit at least part of this to the density of Yaletown, Coal Harbour and the other areas that have been revitalized.

When you compare Vancouver or Toronto to cities in Asia and many in Europe they are not dense at all.

Which US cities do you prefer – New York or Chicago versus LA and Houston? Sprawl is not only undesirable it is unsustainable.

Gregor has it right.

#90 White Rock Mom on 09.29.12 at 12:49 pm

Patiently Waiting do you have any recent data on Elgin and Morgan Creek listings.

#91 Old Man on 09.29.12 at 12:52 pm

#69 Smoking Man – I just love your number, and Weather Witch caught on; you will be in big trouble if all you can offer is a cheap drink because she has big plans for you after the big seminar, so saddle up cowboy.

#92 Old Man on 09.29.12 at 1:13 pm

I know this is off topic, but Health Canada just issued a new warning in regards to XL Foods Inc. in Alberta that processes 5000 cattle per day in regards to E-coli contamination. It has now gone viral to include various raw beef products that is being sold in all major grocery stores in Canada; like almost everything. We can all thank Caesar for this mess, as he cut back on proper inspections, and don’t believe the Reform spin doctors who will throw the blame elsewhere. Some of you have children, so be careful what you cook, and hit the government site for details.

#93 Junius on 09.29.12 at 1:16 pm

#60 John,

You said, I don’t agree. It’s contextual. If only 10% of the big picture is presented, without connecting the dots, “I think we’ve lost our way” is the height of either denial or cynicism. The right to say that has not been demonstrated or earned.”

This is a free speech blog so I don’t see why I need to earn the right from anyone but Garth to say that. You say it is the height of denial or cynicism but I say it is simply reality.

I cannot speak for Garth on this subject (he does a good enough job on his own) but I know what I mean when I say that. Here is what I mean.

We live in a world where the prevailing myth is that we are owed a life where we get more than the generation before us. We measure more by way of consumer goods including houses and automobiles along with the latest technological products.

We believe we have a divine right to plunder the resources of the world and others in it to achieve these goals. Whether we worship science and the rationality of man in a belief that human beings will solve all our future problems through science and an unfettered free market or whether we are tied to a fundamentalist religious belief in the return of Jesus does not matter. They prevailing myth remains that we are invincible, man is progressing morally and spiritually towards a future utopia.

Where we have lost our way is that we have forgotten that “the fault is not in the stars but in ourselves, that we are underlings” as Shakespeare said. Human nature does not progress but human achievement in technology does. Humans remain flawed and limited in our abilities to see the entirety of our existence.

We can now see clearly the limits of the past decades of unfettered economic growth and an economy built on consumption and debt instead of productivity and a common good. We have hit an economic wall as we reach the limits of the debt cycle on a global basis. We see the folly of a consumption driven demand economy that has pushed jobs and wealth to the lowest bidder.

We see the environmental degradation brought to us from unfettered capitalism whether it is the destruction of the Gulf of Mexico by big oil, the over fishing of our oceans or the deforestation of the rain forests.

Meanwhile our political parties offer bromides and platitudes of sameness. All of them are largely controlled by those who are in power and stand to lose in any paradigm shift away from ideology of continual economic growth and the myth of human moral advancement. Therefore they have nothing new to say and no real solutions to offer.

So, to be clear, we have lost our way. We need a new paradigm that starts with re-understanding that we are not an omnipotent society but live in a fragile, complex eco system. We need to re-understand what we were taught which is that human societies need a common purpose and common good that is more important than individual self gratification. We need to remember that we are not gods in we need less hubris and more humility in our world.

#94 brainsail on 09.29.12 at 1:33 pm

As usual the only news that we get in the US about Canada are the weird and stupid ones. Feet washing ashore. A gay body hacker. A cat running for mayor.

This one is interesting, though.

#95 Nick on 09.29.12 at 1:34 pm

Without looking at any chart or number, I can tell that summer of 2011 was the pinnacle of the canadian real estate mania.
I remember having dinner at a friend’s house. We were a bunch of 30 something couples. Most around the table had bought years before. The only couple who was renting (beside us) spent the evening on the phone, while their food was getting cold on their untouched plates. They were talking with their agent. They were making an offer to buy a house in the worst, most depressing part of town, a place no one of us would ever have considered 2-3 years before. Now they were so eager to buy they were skipping a rare Sunday dinner with old friends to try to make a deal.
The guy who was trying to buy was an freelancer, and so was his wife.
I remember his eyes. They looked almost possessed. He was making 1000x of calculations in his mind. Fear and greed were competing. Hard.
To me, the possessed look he had during this long phone call, while his plate was getting cold and people in the same room were having a good time is what will stick as a permanent image of this era of excess.

#96 Hawk on 09.29.12 at 1:56 pm

#61 Ken R on 09.29.12 at 8:46 am

People don’t live in big cities and pay for expensive housing to “keep up with the Jones” and maintain appearances. Only very few idiots would be doing that.

Most people living in big cities, do so because they offer much greater likelihood of jobs and careers than small towns. Even when a small town has jobs for people, they are inevitably far fewer.

Your comparison has about as much relevance as the poster who claimed that a mansion in the back of beyond and middle of nowhere in Slovenia, South of France, Tuscany etc is a bargain at $400K or less in comparison to a place in a major metropolitan city in Australia. A $400k breathtakingly beautiful mansion in the middle of nowhere doesn’t have the proximity required by an average middle class person to employment or small business opportunity.

And we’re living in times, when people are less likely to be able to retire………

#97 TurnerNation on 09.29.12 at 2:01 pm

You want a new MLS system?

It’s called: Kijiji. It’s free.

Soon, the desperate realtors will be emailing sellers, begging for a buyers commission. Bet on it. Realtors should be a panic. Realtors, stock brokers. Largely, a dying breed.

Overheard in Toronto just today: “their house sold for 30k over ask”.

Do people have any idea of what 30k means? Very little in the global casino.
If you paid $1000 cash extra each month, for 3 years, you might just pay off this new 30k burden. But who has an extra 1k lying around each month?

#98 TurnerNation on 09.29.12 at 2:14 pm

If Calgary is different why then in 2009 upon my visit was I told it is a “city of holes” at the moment. Construction was stopped. Downtown, downtown condos. Holes. 2013 will be a repeat. Lower rates re-juiced this machine. But it’s running out of the fuel. Property virgins on its pyre.

#99 truth hammer on 09.29.12 at 2:53 pm

This ‘sheeple’ mentality is the product of decades of social engineering and brainwashing by governments who find it far more expediant to cow people into ignorant pens by controlling the message that is swept out of the back rooms and into the wallets of a complacent media.

Lets face it…after 30 years of Liberal propaganda the advertisers learned a trick or two….people will believe anything they’re told in Canada. There are only two mainstream media outlets and one giant advertiser who dictates the flavour of every idea….the rats who slink along in the slipstream of government lies slip in the lies ancilliary to the government message….shut up…pay your taxes….don’t ask questions.

When people have asked questions the government agencies are marshalled into a ‘wack a mole’ complex……the media attacks the whistleblower and calls them all kinds of nasty names…..the agencies bus in groups of organized ‘protestors’ to set up a media frenzy inside the narrow view of a camera lens….and the cops barge in and confiscate home computers, ranscak homes, terrorize familes and shut down dissent with nebulous arrests which ensure that nothing is said for years while ‘the matter is before the courts’….the Nazi’s couldn’t have dreamed up a better mind control system than has the Liberal based bureaucracy….it’s positively Soviet in the application of force against free speech…….Canada is the ‘Skinners Box’ of nations.

We’re being told what we must accept without being able to question the veracity of the propaganda…..we’re told that we must accept terrorists back on our soil because the family…even though they had fraudulently received Canadian citizenship, is now Canadian “under the law”…..really…who says so…..the bleeding heart Liberal and their supporters? The Liberals love the terrorists but will say absolutley nothing about the number of Canadians who die every year at the hands of the national police force……when it is staistically more dangerous for a Canadian citizen to walk the streets of this country than a soldiers life in Afghanistan there is a big problem…….but what is being said by the media and the politicians……bring in more terrorists and play a public relations shell game with the leadership of the RCMP…………sick.

Nobody except the Liberal wack jobs have wanted this slime back in Canada………

And now the Liberal dream about a dynasty will appear soon…a witless boy king to be annointed to lead us….just like the crazy nutjob his father was…a country wrecking, fiscally irresponsible, twirling drag queen who manipulated the seats in parliament so violently that the democracy of Canada was raped by a gaggle of seperatists so that they could ‘soft revolution’ the Nation of Quebec’ into existence…….all the while allowing no comment…because it was before the courts’.

Canadians deserve much better than Justin Trudeau……this whole smear is an insult to the country.

It;s no wonder to me why Canadians are so easily misled and confused by the real estate pimps and their constant advertising……Canadians have never been allowed to think for themselves and have since devolved into bainless complacent mush

#100 Old Man on 09.29.12 at 3:12 pm

There is this great buy with Randall residences in the pre-construction phase for 36 suites at 300 Randall Street in Oakville. It will cost you a modest $1.8 million to buy a modest unit of 1800 sq. ft. or just $1000 per sq. ft., but fear not as they have some larger ones for the wife who needs something bigger.

#101 NewWorldPartyDotOrg on 09.29.12 at 3:12 pm

Bubbles have happened throughout history, dating back to the Tulip bubble in 1635. In the past 35 years, there have multiple bubbles: Housing Bubble in 1989, Dot Com, Oil, Dubai, Housing Bubbles in Japan, US, Spain, Ireland, etc.

Canada’s Housing Bubble is the longest lasting bubble in Western history. No bubble in history has plateaued after hitting a peak. No bubble in history has not collapsed. Many Canadians are hoping that Canada will be the first country in the world to break history. Unlikely.

The young, who make up most of the first-time buyers, got screwed by this housing bubble…again.

The best thing they could do, is sell ASAP before they become financially ruined.

#102 Humpty Dumpty on 09.29.12 at 3:18 pm

Its one thing being young and naive..

Then there are those who are in complete Denial…

#103 eagle eyes on 09.29.12 at 3:26 pm

You sell your house, you usually buy another house. You sell high, and buy high / sell low and buy low. You need a place to live. 9/10 people who have owned their homes usually do it because they like to own due to whatever reasons. Very few people sell and then rent. For example, you go to Vegas and win big time at a blackjack table. Chances are you will be giving it back. It’s the draw and excitement of the game. When you win, you want more. When you lose, you want to chase your losses back. Real estate is similar, except I would say even more addictive because you don’t need to book time off work to take a flight to Vegas to bet. The casino is right in your hometown. The difference is that MGM Grand usually don’t loan you money to gamble, whereas CMHC does. And if things don’t work out, you can declare bankruptcy and walk away, no cement shoes.

#104 Bill Gable on 09.29.12 at 3:27 pm

Paris has 12 million people in an area smaller than Vancouver – and we have 650,000 here.

Thanks to earlier poster for killing the ‘they ain’t making no more land’, myth.

Paris is so expensive it made me go green. (*What a City!)

No wonder I didn’t see any obese people in Paris – they can’t afford to eat!

#105 Canadian Watchdog on 09.29.12 at 3:37 pm

#33 Inglorious Investor

“However, property prices can only go as high as banks are willing to lend”

Bingo. The best way to prove this notion is by disproving relating facts on borrowing patterns of existing homeowners, who (as shown below) began basing their affordability via equity gained through home appreciation rather then personal earnings. This is why price-to-income ratios have soared; equity and other financial assets sold—re-invested and re-leveraged to purchase a larger more expensive home.

From CMHC’s Home Purchase Survey:

Survey Question: Purchased Home Worth More Then Previous

2007 74%
2008 70%
2009 66%
2010 67%
2011 59%

Although the data shows a declining rate, over 50% of existing home buyers still purchase a home worth more then their previous home. By how much can be determined by the price-to-income ratio (broadly speaking).

Survey Question: Home Equity As Down Payment Source

2007 40%
2008 32%
2009 33%

Survey Question: Savings As Down Payment Source

2007 30%
2008 40%
2009 43%
2010 88%
2011 84%

The key here is that CMHC stopped reporting home equity as a down payment source in 2009 and consolidated data with savings. Hence why savings jumped from 43% to 88% from 2009 to 2010. The data that can disprove that it was primarily sourced from cash savings (wages), can be shown in the following charts.

Personal Savings Rate No cash savings increase here.

Total, Market and After-Tax Income – Canada (majority of Canadians fall into second and third quintile bracket.)

Second Quintile
Third Quintile

Stagnant and declining incomes could not have provided more cash savings as a down payments source with the cost of living rising throughout the years. More notably, market income (all income sources including investments, pension, etc.) had declined more rapidly. This is primarily due to i) declining stocks and other investment vehicles and ii) buyers selling their financial assets to be invested into real estate. Charts

Q & A: The questions I had asked myself to quantify all the above:

i) What encouraged existing home buyers from borrowing ten or twelve times their income as opposed to a more prudent six or eight times? The answer: equity gained on home price appreciation and their ability to re-leverage loans offered by lenders. This is the fundamental scheme that kept home prices rising, as long as lenders could continue offering high ratio loans and more buyers (namely first-time buyers) enter the market.

ii) What would stop lenders from continuing to lend more high ratio loans? The answer: their ability to offshore risk by selling MBS to investors and insuring loans on their balance sheet. If the government had increased CMHC and private mortgage insurers’ limit, along with lessor guideline rules for cash-strapped borrowers, home price appreciation would have definitely continued on the premiss of rising owners’ equity.

It is highly unlikely that the government will increase the near-breaching insurance limit for CMHC and private mortgage insurers, simply due to the fact they would be risking Canada’s AAA credit rating, which if downgraded, would increased borrowing costs for all governmental agencies and the financial sector. With no limit increase, it is mathematically guaranteed that demand will fall as lenders will refrain from holding uninsured-declining assets on their books and will pay higher MBS spreads on by investors demand higher returns for more risks.

This is the inner-mechanics of what’s driving the market, and why I always say: when the lending stops, everything stops.

#106 From Mississauga with Love on 09.29.12 at 4:14 pm

i am hearing in Mississauga the market has already turned to a buyer’s market, according to a friend real estate agent. Now he might be tempting me to buy, but I think he knows I don’t buy BS.
Still, though, some people here are still living in the clouds with unreasonable prices. But many homes I have been watching have been listed for 3-4 months now with several price reductions (not that the price was reasonable before)… good times coming our way…

#107 Old Man on 09.29.12 at 4:30 pm

The root of the problem was the deregulation of the mortgage market which is like giving a drunk one more drink for the road. This deregulation was intentional as Caesar wanted to boost the GDP, and employment to make the economy boom to grandstand how well things were under his Reform leadership going into the next election.

It was all smoke and mirrors in the end, as the herd fell for the bait moving the Real Estate market with lots of spinoffs, and can add as much as 2% making the economy look good. Things were booming, and now comes the bust as they changed the game for those to be sacrificed on the alter – isn’t the new Reform Government just peachy? It was all a shell game in the end.

#108 Mel on 09.29.12 at 4:49 pm

In the long run, cheaper housing costs will be better for the economy.

Mr. Geller does not know what he is talking about. Now we know why we are heading for trouble. It is because of people who think like him.

#109 Herb on 09.29.12 at 5:15 pm

#99 Truth Hammerer,

yawn. Since you’re blind to facts, no point bothering.

#110 TRT on 09.29.12 at 5:22 pm

Sales have tanked in Vancouver (excludes Fraser Valley).

But, prices have only trended lower on high end properties. Not on the mid or low end.

Now, inventory is said to experience a huge drop on Oct 1st. From what I’m hearing, it will be the biggest inventory drop in a long time. We will see if that’s true by Tuesday. If it does happen, less supply means firmer prices.

Meanwhile, 550,000 people more here (Canada) every year in all immigrant streams.

For a price correction (20%+) to happen on the mid/low end, you need a shock. Higher interest rates aren’t happening for another few years. Only thing bringing prices down in Toronto and Vancouver is an unexpected shock. but Garth says 2008 is not coming back!

#111 Risk Analyst on 09.29.12 at 5:26 pm

Can anyone present evidence that we are headed for a fiscal cliff?

#112 Inglorious Investor on 09.29.12 at 5:27 pm

#105 Canadian Watchdog on 09.29.12 at 3:37 pm

Excellent post, CW.

#113 John on 09.29.12 at 5:46 pm

Junious wrote:

“We can now see clearly the limits of the past decades of unfettered economic growth and an economy built on consumption and debt instead of productivity and a common good. We have hit an economic wall as we reach the limits of the debt cycle on a global basis.”

Well thought out and complete post ( the above is important). And most important of all your idea about humility.

Your opinion that “we have lost our way” is accurate based on what you’ve posted. But you said that “We’ve lost our way” was the truest thing Garth Turner ever wrote: This is what I disagree with, and it’s an important disagreement.

Turner keeps things to the current status and meaning of Canadian real estate, but not to it’s message. Your post did go to the message…his approach doesn’t. So where’s your alignment?

That’s a pretty big gap, don’t you think?

Remember the “takeaway” on this blog ( the general vibe) leans towards investment in the ponzi. It hasn’t been very strong on what you laid out clearly in your post…especially the paragraph above.

If there’s no dot connect ( in the complete way you’ve done it), and instead one more “ponzi call”, Garth Turner’s right to say “we’ve lost our way” is bogus. It’s counterfeit.

You seem to have missed that fact, so you have a bit of a dilemma.

#114 Conor Bergevin on 09.29.12 at 5:48 pm

All provinces should to have property transfer tax. This a great cash cow and Canadians are so passive,they’ll pay it.Same with property taxes,they go up every year and nobody does anything.People should stop buying houses until their affordable and taxes are lower.Canadians are like sheep to the slaughter and thats the truth.

#115 Behavioral Finance on 09.29.12 at 6:45 pm

The Doc is in…

#116 DonDWest on 09.29.12 at 6:51 pm

#107 Old Man

True enough, Harper deliberately pumped up the housing market so he could get re-elected. Had he left the market alone, it would tank right before the election campaign started.

I remember listening to the fools, “the conservatives have done well for the economy in spite of the global recession. They’re heroes. They have my vote” It was enough to make me barf.

BTW, 99% of the people who thought along these lines were baby boomers, for the most part the young didn’t fall for it and saw the correlation between what is happening here and the United States. At least that was the case here in Nova Scotia. Seems like the young were the biggest suckers of all in Ontario, BC, Alberta, Saskatchewan, and Manitoba.

#117 Westernman on 09.29.12 at 6:57 pm

Truth hammer @ #99,
You got your post correct in every way except for one glaring mistake…
That statement “Canadians deserve much better than Justin Trudeau”
Wrong. That scumbucket is exactly what Canadians deserve – remember… people get exactly the government they deserve and this was never more true than in Canada…

#118 EIT on 09.29.12 at 6:59 pm

Now that the music has stopped, time to accept reality and make decisions. Let’s start with getting out of Afghanistan. There’s no need to be doing our UN buddies any favours. We sent 158 Canadians to their deaths, and for what?

Days of Denial

I think we have lost our way.

#119 Behavioral Finance on 09.29.12 at 7:16 pm

More than $500B of Canada’s estimated $1.1T housing market are considered to be high-risk mortgages. Recently Ottawa began increasing its scrutiny of the CMHC for allowing this level of high-risk mortgages to rise to the level that it’s at now.

Canadification of mortgages at its finest…

#120 Denise on 09.29.12 at 7:33 pm

As of this week, there’s now 2 empty houses in my area, not even 1 block away from each other. One’s been empty for several months & the occupants of the other one just moved out this week. The most recent ones to move listed their house 2 months ago, the other house owners listed 6 months ago.
Multiple price drops & still obviously priced too high as no sales. The natural correction that should have been allowed to happen but didn’t – because of government interference in the market place – is now here.

#121 Junius on 09.29.12 at 7:39 pm

#113 John,

You said, “You seem to have missed that fact, so you have a bit of a dilemma.”

Do you know what that word “dilemma” even means? Your post doesn’t make any sense.

#122 Wofenstein on 09.29.12 at 7:43 pm

When is the official `I told you so` moment Garth? Is it when prices go down 10%? 20%?

Every market is different. — Garth

#123 Grim Reaper/Crypt Speculator on 09.29.12 at 7:50 pm

Where is everybody?

Out at pre-sale condo line-ups?

#124 Gunboat Denier on 09.29.12 at 8:18 pm

105 Watchdog

“…. (majority of Canadians fall into second and third
quintile bracket.)”

quintile = 1/5, so 40% of Canadian fall into any two

#125 pretzels on 09.29.12 at 8:45 pm

#110 TRT

Let me guess…
You are an east Indian RE pumper from Surrey BC.

#126 NKVD Black Raven on 09.29.12 at 8:59 pm

Canada’s no longer a country, just a protected boundary for 5 banks and their profits.

#127 Aussie Roy on 09.29.12 at 9:14 pm

Aussie Headlines

Soft sales, wary consumers and a high stock of unsold houses are bedevilling the real estate sector

Big drop … this Woollahra property had a list price of $13m in March. It sold for $5m at a mortgagee auction last week.

At the end of the property boom in late 2010, a three-bedroom singe storey cottage facing the waterfront on The Esplanade in Mosman sold for $3.25 million. Two years later in April this year, it was on the market again. This time the property, which came with a pre-approved development application, fetched $3,025,000 – a discount for the new owner of $225,000.

On the other side of Port Jackson in Wilfield Avenue in Vaucluse, a plush four-bedroom home went for $2.9 million in 2010. Last June it was resold for $2,550,000.

On the other side of the city, also in 2010, an ordinary-looking brick house in Blakehurst, a suburb south of Sydney Airport, sold for $880,000.

Twenty months later, in May this year, it was on the market again. This time the Californian bungalow fetched $850,000, a discount of $30,000 for the new owner.

Advertisement These homes illustrate the change in market conditions confronting spring vendors and buyers.

#128 TurnerNation on 09.29.12 at 9:18 pm

Our forum host, on the bombastic Howe Street radio rag!

Garth Turner — Toronto home shocker.

#129 Old Man on 09.29.12 at 9:29 pm

#106 From Mississauga – I was looking at that market today and prices are getting attractive, so is one to watch over the next couple of years as an option over the core in TO.

#130 45north on 09.29.12 at 9:34 pm

John: “I think we’ve lost our way” is the height of either denial or cynicism. The right to say that has not been demonstrated or earned.

since it’s Garth’s quote, your criticism can only mean that he has not earned or demonstrated the right.

which brings us to the more fundamental issue which is that if you ever publicly acknowledge any authority as legitimate you will be instantly returned to the dark dimension from which you came

#131 TRT on 09.29.12 at 9:46 pm

#125 Pretzels said:

“You are an east Indian RE pumper from Surrey BC.”

What does ‘east Indian’ have to do with anything I said??

As for my post, I’m telling it like it is. Not telling anyone to buy or sell you bigot!

Why is he a bigot? — Garth

#132 Yuus bin Haad on 09.29.12 at 9:57 pm

Damn that Mike Harris! Ooh, I get so angry!!! er, … sorry, … what was the question?

#133 wisewebwoman on 09.29.12 at 10:02 pm

#50 Coho:

You rock!

#134 John on 09.29.12 at 10:12 pm

45 North wrote:

John: “I think we’ve lost our way” is the height of either denial or cynicism. The right to say that has not been demonstrated or earned.

since it’s Garth’s quote, your criticism can only mean that he has not earned or demonstrated the right.

which brings us to the more fundamental issue which is that if you ever publicly acknowledge any authority as legitimate you will be instantly returned to the dark dimension from which you came.

Well, you’re not wrong. I do have a character defect with authority which can “overcharge” my judgement.

You could say I’m a “recovering Canadian”. When not in recovery, Canadians accept authority without question. That’s how we got here, would you not agree?

Nonetheless, debating the message of this unreal Canadian real estate situation is worthwhile. Because it’s involving all of us.

I stand by my opinion that saying “we’ve lost our way” while under-reporting the severity of the situation, and suggesting ponzi investing is unearned and not demonstrated.

Look, nobody is going to get this even close to perfect…this is all new. But in this one you’d at least have to talk about the dilemma of serving two masters.

“We’ve lost our way”….and then point back to the same way? This is what I’m saying. A days of denial extravaganza.

My defects are equal to those of “authority figures”…but would it not be more important to get clarity on where we’re at?

#135 pretzels on 09.29.12 at 10:44 pm

# 131 TRT
What does ‘east Indian’ have to do with anything I said??

As for my post, I’m telling it like it is. Not telling anyone to buy or sell you bigot!


I am an east Indian myself, so I hope that makes you feel better about yourself, and my statement

My issue with RE pumpers (and there are many unscrupulous ethnic agents in Surrey) is disingenuously propagating this lie about 550,000 immigrants each year that supporting unreal RE prices. Many unsuspecting and naive immigrants fall for it and will ruin their financial future.

Your posts carry the same irresponsible tone and message

#136 Nostradamus Le Mad Vlad on 09.29.12 at 10:54 pm

#38 Harry Reems and Linda Lovelace — “This blog is way too sexualized….we think that it deserves a PG 65 rating.”
— and —
#74 TurnerNation — “Decidely un-sexy photos of late! However, its idea-generation ability has not grown flaccid. Not to put too fine a point on it.”

Prude Nudes?

#69 Smoking Man — “Welcome back Kotter. Welcome back, welcome back. Any one watch the news this morn”

No. Do you mean this? I know Ron Palillo moved back into the next worlds in August just passed. What else?

#111 Risk Analyst — Probably not, maybe but then again definitely maybe or maybe not. See if it evolves around election time down south. Also — US$ falls Well, it is fall;
Big oil prodding and provoking Iran; Fraud Con artists becoming bolder; 2:57 clip Cyber attacks on banks a FF, ‘tho hardly anyone noticed; AAE Austerity Across Europe, and Denmark to tax firewood; 7:02 clip Why Whole Foods pays employees more than it has to; 13 States considering using gold and silver as money; Problem? Fix it, and EZone Five problems; Ireland and Canada Two feeder nations; Confirmed The US economy sux; JPM and BoA Forgiving sins; The 25 most profitable media cos.
#118 EIT — “Let’s start with getting out of Afghanistan.” — Bingo. See following — Af’stan US out, China in; RE Agents Here’s a new technique to help you sell; Secession Might as well; 1:47:57 doc. Psychiatry / Psychology industry of death. Bye Dr. Phil; Hugo Chavez Opposition falling apart; Mitt Romney Raises the point that TPTB have already chosen him. Most here understand set things on fast track, but was also less than truthful. Romney may well turn out to be an unmitigated disaster, so what will TPTB gain from it? 2:23:50 doc. Thorium is far better than nuke stuff; Fit for a King and Queen.

#137 Grim Reaper/Crypt Speculator on 09.29.12 at 11:36 pm

#125 Pretzels said:

“You are an east Indian RE pumper from Surrey BC.”

What does ‘east Indian’ have to do with anything I said??

As for my post, I’m telling it like it is. Not telling anyone to buy or sell you bigot!

Why is he a bigot? — Garth


Damn rights !!!!

If you want to understand the finer points of Political Correctness…here’s the quasi “Coles Notes” course.

#138 GTA Girl on 09.29.12 at 11:43 pm

They’ve killed Yorkville. Friday Saturday night is dead. Used to be filled with people out to people watch, look at exotic cars and exotic women, no more. They closed FourSeasons, lowered their standards, lost Toronto Film Festival and now it’s empty.

So why the hell would anyone buy a condo there at $1,000+ per sq ft?

I’m mourning it. I spent my youth in admiration, thinking one day when I was older, I’d get dressed up go to a fancy dinner the drinks at the to of the Hyatt in the exclusive bar.

Went their tonight. A place that charges $25 per drink and the tables were filled with university students sipping cokes socked feet up on couches Apple laptops and chip bags strewn nearby…what the hell is going on?

This isn’t the first time I’ve seen such boobery in what used to be classy places. How are these young people affording $150 dinners at La Societe on Bloor? They still show up in their tattered clothes looking like the homeless. They’re catered to, coddled as they dig out coins from their Prada wallets.

What the hell is going on in Toronto?

Answer: Money is too cheap. Everyone has it, debt is at record heights, the young are living beyond their means. And the standards of behavior are low.

Clothes in hipster heaven on Queen street are tshirt a starting at $100. All to look exactly like the other hipster sipping a $8 latte at Starbucks. No one seems to work, everyone slouches through life, hopping from one cafe to hipster bar then on their $700 bike to go to their $450k condo in Liberty Village. All this endless cycle at age 24.

This has it to end. It makes no sense. There aren’t enough $120k a year jobs to maintain this. Something is wrong.

I’ve waited many years to finally relax from work, enjoy the fruits of labour…not to spend $150 for a meal in a high end restaurant to have some 20 something remove his sandals, put his feet up, and swear loudly cause his IPhone needs recharging.

Harry Rosen is going to go out of business. No one wears suits…they need to start selling wool caps at $200 per to stay a float.

I needed to vent.


#139 Free Beer on 09.29.12 at 11:47 pm

In Saskatoon…

The Show Home for Town Square Villas is currently located in Hampton Village at 1022 Hampton Circle.
(behind the new Shoppers Drug Mart on the corner of Junor & Hampton Circle)

Visit the Show Home and fill out an application to see if you qualify for down payment assistance and
receive a free $10 Walmart gift card.

We make home ownership easy.

#140 cynically on 09.29.12 at 11:54 pm

#134 John – I must say I don’t enjoy your posts because they are usually too long and tend to drift off into tedium although you’re sure you are making a relative point on some subject. However your statement that Canadians accept authority without question is unarguable. Would only more of us become “recovering Canadians.”

#141 Smoking Man on 09.30.12 at 1:00 am

Mia. Negative re stories in MSM

I’m god calling it in front of all the double bubble head.

You have no chance vs machine. Marco frm van. You see. Down to the minute.

Old man weather witch ok lets see what she looks like

Got pulled over by a spot chi. Sir where you drinking.

I said no. Why do I smell bozze on your breath she says. I said caught medicine or my drunken wife.

Pull over, beem there do that, have a move to beat breathalyzer. .45. Ha.

Insurance industry .05 cops total track 6ers. Insurance co should pay there salary.

Beat em again. Always say cough medicin you blow over, and say nothing else. Your lawyer will own them

I hate cops

#142 Freedom First on 09.30.12 at 2:18 am

#76 Elmer

My uncle wants to give you a vasectomy with 2 bricks.

#143 Benchwarmer on 09.30.12 at 2:39 am

Went and checked out a few new show homes here in Calgary today. One word dead. None of the builders could give us a firm price on any of the show homes their numbers were very vague ” mid to low fives”, ” mid to low sevens”, that’s as close to a real price they would give. We saw this same thing in 2008 when things were slow. I remember one sales lady telling us she really had no idea what the price was,”make us an offer”.
Get ready Calgary this is just the begingning of the calm before the perfect shit storm.
Benchwarmer out.

#144 Onemorething on 09.30.12 at 2:50 am

3.5x income is when you buy which is affordable for housing and if not you should be renting and investing.

However, while housing prices may decend in value so may your income (or job loss) so it could be a while before 3.5x comes your way.

One thing for sure when it does 25 year mortgages will be the norm, 15%+ downpayments the norm, no matter how long rates stay low.

Property Taxes will have to adjust as well so watch assessments for the first 3 years to make sure the valuation isnt double what you paid.

5-7 years to bottom and the new normal to take charge _ YUP! Unless you are like me and buy 10% before the bottom and sell at 10% before the top!

#145 TRT on 09.30.12 at 4:19 am


Garth: Look up the relationship between bigot and segregationist. Why the adjective before RE? Purpose?

#146 TRT on 09.30.12 at 4:21 am


And Pretzel could equally be a “she”. Just saying.

#147 Reg dunlop on 09.30.12 at 4:54 am

As a guy in the biz of specialty building materials the parties not over yet – feb and march building permits in the gVrd were up 30 – 35% over same 2011 these peojects – from sf reno to tower-These will complete from now until the new year – this downturn wont effect the starts until the new year . Inventory will tell the tail this fall / winter on how the developers will stake their claim.

There has been a trend in government tenders (schools/hospitals)in the last month or so and commercial rezoning to keep people working – if

residential is going down is victoria trying to keep the ball rolling with hospitals and gvrd colleges ?

#148 Dr. WAYNE on 09.30.12 at 9:08 am

#1 Rainman on 09.28.12 at 9:55 pm

yup… #1

YUP … you’re an asshole …

#149 Dr. WAYNE on 09.30.12 at 9:10 am

“I think we have lost our way.”

Sounds like a good title for your next book …

#150 futurologist on 09.30.12 at 9:16 am

Do not forget coming election in USA.
It’s much more important for our existence than Canadian real estate.

If Romney will be elected – there is a last tiny chance for western civilization to survive.

If obama will be elected – there will be the fast END of western civilization: economic collapse, far-left dictatorship and chaos.

As was foretold by blind Bulgarian predictor Vanga 30 years ago, the 44th president of USA (obama) will be a black and the last.

Probably obama will be elected to be the last president of USA (RIP).

#151 eaglebay - Parksville on 09.30.12 at 9:17 am

#107 Old Man on 09.29.12 at 4:30 pm

It’s my understanding that the conservatives were a minority when the changes were made.
So much for you, liberals.
Don’t you think that people should have a mind of their own?
By the way, CMHC doesn’t lend money.

#152 John on 09.30.12 at 9:21 am

Cynically wrote:

#134 John – I must say I don’t enjoy your posts because they are usually too long and tend to drift off into tedium although you’re sure you are making a relative point on some subject. However your statement that Canadians accept authority without question is unarguable. Would only more of us become “recovering Canadians.”

You’re not going far enough. If you agree on the “authority” part…keep going. Docile apolitical Canadians have systematically allowed faceless global “authority” to completely take over their lives.

Do you think this is an exaggeration? Make your point. There are posters on here with names like “renters rule”. Shouldn’t that be considered a joke? Do you think a national scope and fake 1990’s “Canadians interacting in a global community” is the right scope? Do you think investing in banks and commercial real estate “about covers” risk?

Is that tedious and long enough?

I think my point of view is sharp and unwavering…even if incomplete. It’s a process.

Step up to the plate with your own ideas that could be different than the community you might have around you…virtual or real.

Is what I’ve responded here “some subject” or is it explicit. I’d say explicit. Denying and ignoring is an option of course.

Starting with un-recovered obedient non-critical Canadians ( westerners really) is an anchor. What have the real consequences been? What does an 800,000 dollar normal 3 bedroom house in Toronto in 2012 mean?

Why is it 800,000 dollars? What is your personal opinion? Open up the discussion. Very few people wabt to do this.

#153 Old Man on 09.30.12 at 9:25 am

#138 GTA Girl – you left out the movie theatre on Cumberland; check out the Windsor Arms; never forget Holt Renfrew; and for the best meals in TO that are on the cheap there will always be Master’s Buffeteria. I hear that is where Smoking Man takes his cheap dates.

#154 eaglebay - Parksville on 09.30.12 at 9:34 am

#126 NKVD Black Raven on 09.29.12 at 8:59 pm
“Canada’s no longer a country, just a protected boundary for 5 banks and their profits.”


How many people do the banks employ?
Nothing is stopping you from starting your own bank.

#155 Mr Buyer on 09.30.12 at 9:52 am

#105 Canadian Watchdog on 09.29.12 at 3:37 pm
when the lending stops, everything stops
Well done. I would just like to say that the bubble would have crashed ultimately even if lending continued. Lending just put off when the crash would occur.

#156 Junius on 09.30.12 at 10:06 am

#138 GTA girl,

Try the Hazalton if you want wxpensive and pretentious in Yorkville. If that place doesn’t do it no where will.

#157 Junius on 09.30.12 at 10:12 am

#135 Pretzels,

You identified TRT well. Not a week goes by when doesnt come here and sound the alarm of an immigrant flood into Canada that will swell Re prices. Like all pumpers he is sell side only and has no interest in substantiating this point or debating rhis point.

Note how he ran from your central point and charged you as a bigot instead of defending his lie.

#158 brown on 09.30.12 at 10:24 am

We are selling our home in Richmond Hill. What are the potential benefits and concerns of holding the mortgage?

Why would you lend to somebody the banks reject? Dumb move. — Garth

#159 Hawk on 09.30.12 at 10:39 am

#138 GTA Girl on 09.29.12 at 11:43 pm


Agreed, if someone has earned a lifestyle that can enable them to regularly waste money on $150 dinners, so be it, more power to them.

If they’re fueling it through debt, hoping to later declare bankruptcy then it’s indicative of the Marxist nature of our society that let’s the unproductive run up large tabs and then get away with what is essentially theft, without going to debtor’s prison as used to exist once upon a time.

#160 CrowdedElevatorfartz on 09.30.12 at 10:42 am

God bless the inane ramblings of #141 Smoking Man.
The “insane genius” or the “intoxicated idiot”…
Either way, he makes me very glad i’m …… me.

#161 Julia on 09.30.12 at 11:00 am

I agree with TNT. It was a racist comment.

#162 City Slicker on 09.30.12 at 11:03 am

#84 City Slicker on 09.29.12 at 11:23 am

Garth one of the sample areas I look at is a neighborhood in Lethbridge. There were 30 houses listed there end of summer. Come Fall this jumped to 40, I thought it was strange cause usually its the other way around, people usual take houses off the market in the dead Fall season if not sold by summers end. Can this be the sign of Jonah?
Garth further to me looking for the sign of Jonah, in this neighborhood I’m looking at the observation I’ve made is a lot of these houses coming on the market are in the construction phase. Are these companies building on a prayer? Don’t they know what happens in a housing downturn which could be right around the corner? What if nobody buys the place for the price they want?
Please help me understand this phenomenon….

#163 Julia on 09.30.12 at 11:04 am

Sorry, it’s TRT and i know you said bigot not racist. I don’t know anything about the person who made the comment so I would never call them a bigot. I just wanted to support you that the comment sounded racist to me.

#164 Smoking Man on 09.30.12 at 11:04 am

#160. Glad to be of serevice.

You cop or insurance broker?

#165 willworkforpickles on 09.30.12 at 11:24 am

#158 Private lenders are lending to those the banks reject lending to every day and for far better returns than anything Garth has ever suggested here.
If the buyer is willing to put x amount of dollars of his own money into the purchase – anywhere from 5 to 10 percent of the purchase price and you can get him to go a 1st mortgage on 70% (with you) and let them find a broker who can arrange a second for the difference, then you move out with 30% of the purchase price in cash in your pocket while holding a 1st mortgage doable at 8.5 -9% – You will be way ahead in the game with a grand monthly income being generated from your Richmond Hill property.
More than enough income there to rent a place with for yourself – and with a load of cash to boot with your bulk principle secure.
Garth says its a dumb move.
Well i say Garth just hasn’t taken the time to think that one through and has let you down with a poor response.

Naive words. People the banks won’t lend to are poor credit risks, and unworthy of lending to. If they default, you do not get the property back, but are forced into a lengthy and costly power of sale procedure. The comment above is from someone who has not experienced this. — Garth

#166 Cyclist on 09.30.12 at 11:28 am

138 GTA girl

“…hopping from one cafe to hipster bar then on their
$700 bike…”

You mean their $8700 bike, right?

#167 Form Man on 09.30.12 at 11:30 am

#151 eaglebay

minority makes no difference, as the changes made were not subject to overview by the House of Commons. Flaherty and Harper figured they could juice the market in order to win a majority, and then manage the bubble into a soft landing. They got the first part, now for the second part. We shall see……

#168 Tony on 09.30.12 at 11:33 am

Re: #21 T.O. Bubble Boy on 09.28.12 at 10:51 pm

Without a doubt gold as it will probably fall back to 200 dolars U.S. Stock markets in general should lose around 50 to 80 percent during the next decade with the German DAX leading the way with a fall of around 90 percent.

#169 willworkforpickles on 09.30.12 at 11:40 am

#158 One thing you may want to consider in a falling market and with the normal wear and tear on the property while holding a 1st mortgage for the buyer is it may be wise to hold that 1st mortgage on just 60% of the purchase price .
Good Luck.

Do not hold one at all. When the banks will give people 95% of a purchase price at 3% or less, people who need private financing are credit timebombs. As I said in my last response, being a mortgage holder does not mean you automatically get the real estate back if there is a default. This is a myth. — Garth

#170 TurnerNation on 09.30.12 at 11:47 am

I just made the connection. Today’s protagonist moved on to another brokerage. He’s the one selling the “crazy C01 semi”!
Price dropped 2x already.
With tortious interference in mind I think I’ll just refer you all to the comments (none of which are mine) found in this write up:

#171 willworkforpickles on 09.30.12 at 11:58 am

re#165 No not naive words Garth. Not at all.
This is why you take 30 to 40% off the top in case you are forced to undergo power of sale proceedings.
You get 8 to 9 % monthly income on the remaining principal until final payout and make a smart move by holding a first at 60% for the buyer in a falling market with few to no buyers as will soon be the new reality along with the steep price declines that will follow.
Better to lock that deal in now than be faced with a steep price decline and few buyers in a buyers market later.
It’s all relative and any way you cut it there is risk.

You clearly have not been through this process. In any case, a ‘buyer’ with a 40% down payment will not want an 8% VTB when they can get bank financing at 2.75%. You are talking nonsense. — Garth

#172 Rob on 09.30.12 at 12:21 pm

#151 Bagleboy The Cons didn’t need a majority to tweak the mortgage rules, they did that all on their own. You are right that CMHC doesnt lend money, they just insure the banks will get our money when the property bubble collapses. Having doubled down, and then redoubled again, H&F have been behaving like compulsive gamblers. Your Con government now has us backstopping almost 1 Trillion in mortgage debt. Don’t worry though because all will be well when Saint Stephen empties the treasury and sends your children off to fight the Persian dragon.

#173 leloup on 09.30.12 at 12:22 pm

Garth, what game is Mirvish playing with this ridiculous proposal for 3, 80 storey condos on King Street?

#174 TurnerNation on 09.30.12 at 12:45 pm

#138 GTA Girl

King West (Spadina west to Bathurst) is trying to take Y-ville’s place. It has the TIFF now, and million dollar penthouses sold by rock star realtors, $600-750 a sq foot condos, Thompson Hotel & rooftop. The Spoke Club and rooftop. The new IT place. Hyatt rooftop strikes me as old money. New, fast, money is in . Gauche money.

Weekends – closer to Bathurst – it’s normal for me to walk by – parked – one or two Aston Martins, a Bentley coupe, and even a white, 4-door Aston Martin. Around the corner is found a club/lifestyle promoter’s office – mostly their cars. Celeb chefs have a few places along the strip.

The best part? I rent here, newish condo, moved here a few years ago before the rental rate explosion. My rate is at least 20% lower than what it will rent for now.

I joined the facebooks groups of a few new local condo developments a few years ago. Some of the high end buildings are nightmaish. D-bag owners, partying, domestics, shoddy workmanship, noise, dog dung everywhere, and these are the owners!! New money. Bleh.

Harry rosen – was in their newly rennovated First Canadian Place store last week. I’ve never bought anything there. Outrageous prices. Quality is not noticibly better for the extreme price differential. I’m not paying $250 for a casual shirt because it says “BOSS” on it.

#175 Victoria on 09.30.12 at 12:45 pm

Interesting. I seems that people will think the CMHC will protect them if they can’t pay their mortgages?


#176 Denise on 09.30.12 at 12:59 pm

Oops, just noticed I didn’t put what city I live in for my #120 post, it’s Victoria BC, in a regular middle class neighbourhood. (Helps to know what city the poster’s talking about doesn’t it?) :)

#177 condopoor on 09.30.12 at 12:59 pm

I just bought a Condo in Coal Harbour for $600K. The owner paid 700 in 2008 at the very peak. I know I’ll lose a bit, but already have 30% equity in one of the nicest areas of downtown Vancouver.

I hope I made the right choice.

The only equity you have is what you put down, and that is at risk of falling. — Garth

#178 Old Man on 09.30.12 at 1:01 pm

The reason a buyer seeks private money is that there is a problem somewhere and in todays bubble that just might lead into a power of sale scenerio down the road.
I laughed about finding a broker to finance a second mortgage with a small down stroke, as that will quickly disappear with a loss of capital with lawyer fees and real estate commissions; not to mention a fall in the market price. Oh mercy if it all hits at the same time.

#179 MagnumMtl on 09.30.12 at 1:23 pm

I live in Mtl and play hockey with a couple of real estate agents. They say it’s the quietest September they have seen in quite some time.

Vive le Quebec libre.– Garth

#180 Old Man on 09.30.12 at 1:28 pm

#151 eaglebay – This goes to show you why Caesar is called a Con, and of course many mortgages are insured by CMHC, but who does Caesar leave holding the bag when things turn sour, and F was just his frontman? You, Me, and other taxpayers will pay one way or another in the end. I would also like to point out it was the Liberal Party for years that held back the idea of reforming the mortgage system, and banking system.

#181 truth hammer on 09.30.12 at 1:31 pm

Garth…you posted..

‘Yes, those same young people who have been goaded into $400,000 condos with nothing down or are permanently shut out of the housing market. And here’s some even worse logic: “As we’ve seen in many American cities, housing may have suddenly become affordable, but that has been accompanied by a declining economy.’

This can also be seen as a very well known economic concept known as ‘stealing from the future’……the young sheep who will be virtual prisoners in their underwater condo’s will not be able to sell and repurchase when real housing stock prices come down to what would have been in their reach should it not been for the bubble campaign.

There will be an entire generation who will not be able to support the economy in any way because they are stuck in inflated coffins with no value…….the lag between these and the next generation of buyers can be as long as a decade while the new crop matures……..with rising rates the current suckers will have a lifetime of pain to look forward to as opportunity passes them by.

#182 Old Man on 09.30.12 at 1:37 pm

Just an update as the Canadian Food Inspection Agency has just released a new directive, and this looks nasty, as virtually all beef and steak products are being pulled nationwide in regards to E-coli – thanks again Caesar for cutting back on food inspections, and there will be much more coming. The list is getting long, and Nova Scotia has been hit with Foodland.

#183 Roial1 on 09.30.12 at 1:52 pm

#99truth hammer on 09.29.12 at 2:53 pm

“Liberal propaganda” (your words)A.R.W.

It;s no wonder to me why Canadians are so easily misled and confused by the real estate pimps and their constant advertising……Canadians have never been allowed to think for themselves and have since devolved into bainless complacent mush.

And it is dimmwitts like you who insist in perpetuating the myth of it being a “Liberal” media execise.

THERE ARE NO Liberal media.

All media is in the hands of the few!

Please get some info on who owns it ALL! They are NOT the poor or the “Liberals”. They are ONLY (the owners) the GREEDY rich! (not all rich are greedy)

An example, ALL of the small town papers in B.C. are owned by ONE man. David Black. (there may be one that he does not own)

Now, stop being a dupe and get an education.

#184 Form Man on 09.30.12 at 1:57 pm

eagle idiot

Harper inherited a budget in surplus, and a reasonably well functioning housing market. That was 6 years ago. The next 3 years will show Canadians what sort of a mess a ‘trained economist’ can make ………..

#185 Old Man on 09.30.12 at 2:14 pm

#174 Turner Nation – It appears there might be a shift in market taking place which you are pointing out for the cool people like a herd following the green to show off their toys. I cannot disagree with your astute observations, and the old Park Hotel was at one time where the elite met for drinks at the Room At The Top for all big deals that occurred in Toronto.

Times do change, so now what? I believe that for a couple that wants to buy a condo or whatever they must rent, and wait for a real bottom to settle before they buy, and where? I say stay away from the hot spots, as you can always experience the glamour by car, and make a wise choice elsewhere with elements that support what you need in life.

The best is not always where one might think, as a means to an end. I use to buy the best suits in Toronto for more than 50% off market price on Spadina south of Dundas – cash. There was a stairway with no sign, and at the top was a showroom; rolls of material from Europe; and a master tailor who did it all including a vest. :)

#186 Daisy Mae on 09.30.12 at 2:21 pm

#119 Behavior Finance: “Recently Ottawa began increasing its scrutiny of the CMHC for allowing this level of high-risk mortgages to rise to the level that it’s at now. Canadification of mortgages at its finest…”


Amazing. What galls me is that the media continues to downplay the ‘cons’ responsibility for this disaster. All the feds are doing now is attempting to rectify the damage they’ve caused, as a result of their past stupidity. The Canadian government isn’t as smart as they thought they were, after all….

#187 Daisy Mae on 09.30.12 at 2:33 pm

122Wofenstein on 09.29.12 at 7:43 pm
“When is the official `I told you so` moment Garth? Is it when prices go down 10%? 20%?”


Garth doesn’t need to tell us “I told you so”.

We can see for ourselves that he’s been totally and unequivocally correct in every single aspect of this fiasco since Day One.

#188 Alberta Ed on 09.30.12 at 2:52 pm

Not every young person is lost. Our two sons and DILs have refused to step into the property trap. They’re renting and investing for the long term.

#189 John S on 09.30.12 at 2:54 pm

The nephew bought his house in Aylmer, Gatineau for almost 10% below asking. Hope he does not get slaughtered as the market slopes downwards.

cost/income ratio is less than 3…so I hope he stays safe.

#190 Old Man on 09.30.12 at 4:15 pm

#187 Daisy Mae – you made it a good call, as Garth has made it perfectly clear that any downward fall in Real Estate values will depend on numerous factors, as to a location in Canada, and within any specific large city location there will be differences in the capital crash values. This is tuff to sort out, but Garth is no fool, as he takes the high road with a general outlook.

#191 Davey Boy on 09.30.12 at 4:15 pm

Me thinks “Smoking Man” and “Old Man” is actually one in the same. :)

#192 TurnerNation on 09.30.12 at 4:50 pm

#182 Old Man

What’s more powerful than a bomb? Answer: A week without food. This will bring a country to its knees.

Who could do such a thing? Why our own government or the WHO. With a pen’s stroke – no vote – most foodstuffs could be ordered destroyed. For our own good! Desperate starving people, trying to get at the food. Brave men in uniform have orders to stop them at all costs. Their own food, paycheques are assured. Their loyalities are clear.

Scaremongering, will never happen you say? History says otherwise. I don’t like what I am seeing here. Recall we woke up one day to world-wide bans for carryons, liquids on airplanes. Instantly. No vote. No quiver from our “democractic” leaders. Recall we woke up one day to our troops bombing Libya. Instantly. No vote. No quiver from our “democractic” leaders.

#193 Old Man on 09.30.12 at 4:59 pm

#191 Davey Boy – nice guess, but not me, as the difference between me and Smoking Man is I get all the the highend babes on my arm for a night out on the town, and Smoking Man takes what he can get, and might have to throw him a few to boost his ego a bit, but can he afford this all?

#194 jess on 09.30.12 at 5:08 pm

…”Tax havens increase the inequitable distribution of tax revenues. The use of tax havens affects which country has the right to tax income from capital and can lead to
a more inequitable distribution of tax revenues. This problem relates particularly to taxation of capital gains by companies registered in tax havens. The normal approach in bilateral treaties regulating which country has the right to tax international revenues
is to apply the domiciliary principle – in other words, the primary right to tax rests with the country in which the owner is domiciled or registered rather than the sourceTax havens can encourage rent-seeking and reduce private incomes in developing countries. Countries rich in natural resources have averaged lower growth than other nations over the past 40 years. This phenomenon is often termed the paradox of
plenty. The most important lesson it teaches is that revenues which fall naturally into the lap of the political and economic players in a country can have unfavourable economic consequences in nations with weak institutions (such as a weak government
bureaucracy and weakened democratic processes). This is because resources are wasted on redistributing existing revenues in one’s own favour rather than on creating new income (known as rent-seeking).
Rent-seeking leads to the reorientation of society’s resources away from productive value creation. A particularly important effect of this reorientation is that tax havens influence how some private entrepreneurs choose to use their talents. Tax havens make it relatively more profitable for them to devote their abilities to increasing the profitability of their own business through tax avoidance rather than through efficient operation. A private-sector distortion of talent along these lines is not balanced by a socio-economic gain, because the socio-economic calculation must reflect the fact that tax saved for the private entrepreneur represents a reduction in government
revenue. Tax havens thereby enhance the profitability of being a rent-seeker, which prompts more people to opt for rent-seeking and fewer to choose productive activities. The more people who opt for rent-seeking, the fewer who participate in productive activity. In fact, rent-seeking activity can become so great that private income actually falls. Such a redirection of talent away from value creation is a particular problem in countries with a low level of expertise and technological development. Tax treaties. An unfortunate effect of tax treaties as they are normally drafted is that they reduce tax revenues in the country where the income is earned (the source
country). Combined with the use of secrecy rules and fictional domiciles, this makesthe access to tax-relevant information conferred bysuch treaties illusory.
Paradoxically, tax treaties help to make tax havens a more favourable location than if such agreements did not exist. The tax treaties will not affect the harmful structures that exist in tax havens. Accordingly, the Commission has noted that tax treaties can
do more harm than good unless they are followed by measures that reduce the harmful structures identified by the Commission. It is important to ensure that in this
connection the tax treaties do not constrain further action against tax havens…”

read more

#195 futurologist on 09.30.12 at 5:20 pm

Prices of Canadian Real Estate skyrocketing.
Millions of political refuges arriving in Canada from Soviet Obamostan (former USA).

#196 Old Man on 09.30.12 at 5:33 pm

#192 TurnerNation – there is nothing that I do not know, and the problem with Libya was their standard of living surpassed the world, and even Canada could not come close to what the citizens had; know the leader might have been a dictator, but took all the wealth and gave it back to the people. He had to be taken down, as the NWO could not accept this with their agenda – will send a link to Garth.

#197 Nostradamus Le Mad Vlad on 09.30.12 at 5:40 pm

Garth’s sentence, “I think we have lost our way.”
when combined with
#138 GTA Girl — “…what the hell is going on? This has it to end. It makes no sense.”,
#150 futurologist — “As was foretold by blind Bulgarian predictor Vanga 30 years ago, the 44th president of USA (obama) will be a black and the last.”
#192 TurnerNation — “What’s more powerful than a bomb? Answer: A week without food. This will bring a country to its knees.”

Can be summed up in one sentence — the Chinese curse or blessing “May You Live In Interesting Times”, because we sure are living in strange days.

It brings forth the cycle change, which will happen no matter what philosopher, economist or politico says. It was a nice party, enjoyed by many but within a couple of decades or so, the west will take its place in the natural order of things, ceding to China, Mongolia and Russia.

#198 45north on 09.30.12 at 5:58 pm

Denise: Oops, just noticed I didn’t put what city I live in for my #120 post, it’s Victoria BC

well thank you, I do get annoyed when someone posts but not say what city or region he is talking about.

45north (Ottawa, 45° north, 75° west)

Even the Smoking Man says what city he is from. He says he blew .45 in a breathalyzer – which is practically embalmed.

#199 jess on 09.30.12 at 6:25 pm

phantom debts

Letter in your mailbox says:

“You are approved for a full principal forgiveness of your Home Equity Account.”

But what if you don’t owe the money because you filed for bankruptcy three years ago and the debt legally wiped out.

but the Internal Revenue Service considers debt that is forgiven to be taxable income. One exception occurs in bankruptcy; when a debt is discharged, it is not taxable.

What the heck?

How to Erase a Debt That Isn’t There
Published: September 29, 2012

#200 Old Man on 09.30.12 at 6:44 pm

#194 jess – know all about offshore banking, and it all starts in Hong Kong, as there will be no agreements or any treaty with the world machine, as a simple 48 hour corporate registration can take place with a law firm, and a bank account, and the bank of choice is HSBC. There is no taxation on any investment income coming into Hong Kong from outside; there are over 100 banks there worldwide, and why?

All the Canadian Banks are there, and the HSBC is the front bank, and does a skip to somewhere else as a cover for investments. Now ask yourself the big question, as to why HSBC is all over Toronto with the ATM machines in place? Not to mention branches here there and everywhere. I just sit back and laugh about it all.

#201 maxx on 09.30.12 at 6:48 pm

#24 John S on 09.28.12 at 11:01 pm

Yes, so true! 3% drop is a complete farce. Be patient.

We are renting a to-die-for condo with amazing views for a fraction of the ownership costs and using some of the savings to max out RSPs and TFSAs. With the balance, we are traveling more than ever.

This is the cash that greedy homeowners want from saavy renters but will not get until they come down (waaaaay down) to earth. This is the same cash that they now want so that they can travel and “have some fun”- away from home. Well, they can whistle Dixie for all I care, they’ll get what I decide to give them and it won’t be the idiotic prices they cling to. IF I eventually decide to buy. Oh, happy day, are we glad we sold off all RE!!!!

The money they might have a hope of getting, IF lenders decide to take the risk, is mostly from naive, house and condo-horny youth with generally precarious and certainly not likely long-term job prospects.

When government debt leads it to pare away at their staff in a big way, can pensions and benefits be far behind?

Sooooo glad we got rid of the millstones when we did! Money is getting increasingly harder to get and even harder to keep.

#202 truth hammer on 09.30.12 at 7:04 pm

#183 R……you’re missing the entire function of the miniscule Canadian public media business model …..there is no free media… media is a struggling business…..THAT DEPENDS ON AD REVENUE …..everything is controlled through revenue streams not by the owner…..the owner is just the guy who sells the ads and prints the rag… the advertiser who dictates the message and pays the medium to traffic the message….

Canada’s largest advertiser is #1….the government….# 2 civil service unions……we have no corporations in Canada like Proctor Gamble etc to sell soap or soup. Without ad revenue coming from government and union ads there would be zero press outside the CBC….and guess what…they are an arm and mouthpiece of the traditional Liberal faction and have been liberally rewarded for being defenders of the faith with senate seats and GG positions…not to mention ludicrous production budgets and insane salaries for a organization historically based on political correctness and nepotism.

Work in a public relations related busines and you will find that…..when an advertiser tells you what he likes and doesn’t like….. and then threatens to pull your only source of revenue because you’ve accidentally printed something they don’t like….. you quickly conform to the message you’re advertiser wants to promote….in this case it’s a sad fact that 30 years of Liberal Canada media has been beggared by a succession of liberal governments effectively shutting down all industry and replacing what should have been free non political ad dollars with campaign and party sloganeering.

Don’t blame the local owners for being whores when the government dollar is the only game in town. If you don’t understand how Canadian media operates why bother posting?

If it wasn’t for guys like Black keeping the local rags alive you would be getting your news from pick up trucks with bull horns attached driving through the streets…..wake up….the media is not a public service…nor does it serve the public…….ever wonder why Tony Parsons refers to his news hour as a ‘news show’? It’s because the bits in between the lost puppy stories are paid for by the ads.

#203 Canned Goods and Buckshot on 09.30.12 at 7:12 pm

Dear Junius and John,

I think the point that John is trying to make is that if you believe that resource depletion, climate change and unfettered capitalism are contributing to a dim future, then investment in our current “ponzi” economics of debt servicing ad infinitum and passive participation in our political system, then the whole exercise is a massive capitulation to cognitive dissonance.

Junius routinely offers accurate social commentary. I always enjoy his posts and never scroll by them. But similar to other social critics (Hedges, Martinson, Kunstler, Homer-Dixon), at least from what I’ve read, they seem light on offering a way forward. I think I lot of us are looking for some solution to our common problems.

Garth’s blog is really helpful to many people who should be trying to organize their finances better, but it is a baby step in the bigger picture of how we need to change our social order to deal with our myriad threats.

The “dilemma” that John refers to is what to invest in if not in over priced real estate? Investment in banks, oil companies or commodities is just the same old, same old. Still up the creek without a paddle. If my portfolio is 7 figures but salmon stop returning to the Fraser am I still going to pat Garth on the back?

800K for a house in TO? John asks what does that mean? I guess there are a lot of people with faith in the financial system than underpins our society. Perhaps a lot of people who make a good living. But also people who don’t understand risk. If swaths of these same people can’t weigh risk with respect to their individual financial position, how are they to weigh the bigger issues of threats to our collective good?

#204 willworkforpickles on 09.30.12 at 7:28 pm

Hordes of private lenders nationwide currently have money lent out bringing 7 to 10 percent monthly interest holding first mortgages for clients the banks won’t touch and have not ever had to undertake power of sale proceedings on a defaulted mortgage.
The key there is never lend on a property you would not want to own yourself and do firsts only on up to 60 percent of the value and no higher.
Everything above and beyond that is very high risk.

You have no idea what you’re talking about. Not one default? — Garth

#205 Industrial Guy on 09.30.12 at 7:41 pm

Old Man – New World Order? You didn’t say whether it was the Trilateral Commission or the Bilderbergers? It’s your conspiracy….. The average Libyan sure wasn’t happy living in Paradise. Old Man, accept that it was a popular uprising sir. Are you trying to suggest that a lot of very happy, wealthy content Libyans were shot to ribbons by their own army because of some international conspiracy based on GDP numbers? Gaddafi was hardly the benevolent despot you try to make him out to be. Ask the folks in Lockerbie, Scotland ……

#206 Daisy Mae on 09.30.12 at 8:01 pm

#184 Form Man: “The next 3 years will show Canadians what sort of a mess a ‘trained economist’ can make ………..”


Yes! Isn’t that a joke? Absolutely disgusting…

#207 Nostradamus Le Mad Vlad on 09.30.12 at 8:10 pm

Banks — Part One and Part Two “I hate being right all the time.” Yet another FF bites the dust; 3:23 clip Madrid welcomes austerity riots. TPTB are no doubt enjoying this immensely, and Police Provocateurs; UN Taxes Global Carbon and Agenda 21 taxes, along with Soaring energy bills and Rising Mtgs. in UK; Ten Brands may fly the way of the dodo bird soon; 28:02 clip US Fed arrogance with a few other things; TPTB Destroying a middle class near you; Sheeple, or why taxpayers are dumb enough to fall for this; Pondering the state of the nation (not overly good).
Gadaafi Murdered on orders of Sarkozy? 12:23 clip West miscalculated Arab fury. No shit. If Libya (and Iran) had never had public central banks, along with gallons of black gold and other goodies, most of this would never have happened; Council on Foreign Relations (CFR) Venezuela, meet Uncle Sam; Kannaduhhh “This writer hints at but does not get to the real issue. Like the United States, Canada’s standing in the world declines in direct proportion of its support of Israel.”, New Yorker magazine says quite correctly, “Noddin’ Yahoo is an arrogant and dangerous man”. At last count, Dimona had 400+ nuke WMD stored. Dimona is about 55 miles from Gaza, and Of course Six monolithic corporations control 95% or so the m$m, so whaddaya expect? Fair and balanced reporting? Big Pharma “How embarrassing if it turns out the people skipping doctors and prescriptions are found to live longer!”, and and Salmonella Fried Chicken Flavor of the Month from KFC; Oz Think NAmerican govts. are bad? Try Down Under; First ammo, now weapons Agenda 21 imposing itself; Japan – China “Due to treaty obligations with Japan, this will drag the US, kicking and screaming, in to a military confrontation here, unless cooler heads prevail in Beijing and Tokyo.”; GMO Sterility Making men sterile one at a time; Space Junk pic Just in case you’ve run outta things to be concerned with; Two identical UFOs? No. One is Garth’s bunker, the other for the Amazons; Phoney Tony The higher one goes . . .; Grocery Chain learns how to not waste food.

#208 CrowdedElevatorfartz on 09.30.12 at 8:16 pm

@#164 S & M

Cop or Insurance broker……
neither, I’m like you, cant stand either one.

butt my fecal fumes flow for future friends of BPOE

#209 Old Man on 09.30.12 at 8:24 pm

#204 willworkforpickels – who in their right mind with 60% equity in a Real Estate property would be accepting a mortgage at 7 to 10%; got a laugh about this all, so go back to Reform as you must belong to Caesar, and his crowd.

#210 Mr Buyer on 09.30.12 at 8:36 pm

#197 Nostradamus Le Mad Vlad on 09.30.12 at 5:40 pm
ceding to China, Mongolia and Russia.
I would like to point out that western elites ceded to such interests (for wild profits) some time ago by advancing the globalization agenda. Two thoughts come to mind. The first being a childlike hope that we the west are allowed to keep what we have in the face of the rising challenge of what some economists describe as command economies (read military dictatorships) and second if we cannot and are ultimately over run that we the unwashed hordes get to see the elites that sold us down the river get their Kodak moment (yes I can be quite petty at times). This past 3 decades has been a win win for the command economy psy-ops teams, a real no brainer. Massive influx of investment and technology, massive discontentment and demoralization of non-command based economies. Polarization of societal benefits in the capitalist economies with rampant infrastructure decay as a little cherry on top. The end game promising wide-spread access to huge swaths of remaining resources with a single decayed superpower left to answer the challenge of two huge dictatorships and a massive caste based society. I know who I would be putting on the front lines of my army for that horrendous mismatch, the no-mind elements of western society that have been living large during the debasement of the west. On that dark note I will just end by saying that I think the feeding of these traitors to us will be the final act of this ceding maybe televised on a Saturday night by our potentially new masters (after appropriate culling of our numbers of course). It will be interesting to see what money buys in that dark potential eventuality. In any event I have to get back to work.

#211 RippingOffTheYoung on 09.30.12 at 8:36 pm

After three long years of insatiable greed – fed by cheap mortgage rates, shameless bankers and herd instinct – people are scared again…

If I was in my twenties trying to start a family in Vancouver or Toronto, I’d be very angry. Baby boomers and bankers have reaped huge profits while I enter an inflated market that is hostile to young working families.
Time for the young to think about forming a new conservative political party with policies that will focus more equitably on the new generation.

#212 Mr Buyer on 09.30.12 at 8:48 pm

#205 Industrial Guy on 09.30.12 at 7:41 pm
Old Man – New World Order? You didn’t say whether it was the Trilateral Commission or the Bilderbergers
I was talking to a military type one day and he had a little chuckle as I was citing various economic indicators that I had little true understanding of. This person went on to point out that money and the acquisition of money holds power of the most tenuous kind. There is a very narrow and exceptional set of prerequisites that has to be in place for money itself to hold anything that approximates durable power. He went on to say that military power on the other had is a much more durable form of power the persists in a far wider set of circumstances. To this day I have no reasonable counter to this very basic and apparently self evident truth. We are telling ourselves bedtime stories when we speak of the economic benefits of whole heatedly developing directly and indirectly the military capabilities of huge populations ideologically opposed to us (us being the west). Our young will pay the price.

#213 Ralph Cramdown on 09.30.12 at 8:52 pm

– The key there is never lend on a property you would not want to own yourself and do firsts only on up to 60 percent of the value and no higher.
Everything above and beyond that is very high risk.

– You have no idea what you’re talking about. Not one default? — Garth

While I admit that this VTB advocate sounds hopelessly optimistic, I always thought that, given enough equity, a second mortgage holder almost always keeps the first mortgage current, to avoid being wiped out if the 1st holder were to file for FC or POS.

#214 dv8 on 09.30.12 at 9:04 pm

Re 168 Tony
Without a doubt gold as it will probably fall back to 200 dolars U.S. Stock markets in general should lose around 50 to 80 percent during the next decade with the German DAX leading the way with a fall of around 90 percent.

$ 200 I doubt that not unless the usa stops printing money and mysteriously creates 30 million jobs , may i suggest you read “When Money Dies ” or perhaps do your homework on the topic of Monetary Science before you spew garbage

#215 Form Man on 09.30.12 at 9:10 pm

#206 Daisy Mae

agree. Like what happened with Mulroney, Canadians will soon realize the country cannot afford Conservative policies. Sadly, a tremendous amount of damage will need to be repaired……….

#216 Hawk on 09.30.12 at 9:50 pm

#215 Form Man on 09.30.12 at 9:10 pm

Would you rather have the NDP?

#217 Mr Buyer on 09.30.12 at 9:57 pm

The U.S. Department of Defense defines psychological warfare as:
“The planned use of propaganda and other psychological actions having the primary purpose of influencing the opinions, emotions, attitudes, and behavior of hostile foreign groups in such a way as to support the achievement of national objectives.
Psy-ops are a form of aggression that is continual in nature and highly effective in reducing the military capabilities of a potential opponent. If I were given the assignment of subjecting a given population to psy-ops with the goal of degrading the opponent’s ability to interfere with my given population’s objectives one of the first things I would do is sew discord within the given population at every turn. I would finance special interest groups in the target population thus providing a much larger sphere of influence disproportionate to the size of the special interest group. This identification of native or natural points of discord present in any population (relations between men and women, poor and rich, young and old) can be thought of as the low hanging fruit of psy-ops. With relatively little investment and from an over the horizon position huge levels of discord from many angles can be achieved with an accompanying deterioration of cohesiveness and morale that is unmatched in breadth and scope in cold war situations. Divide and conquer. A hamfisted yet equally effective counter psy-ops measure especially with and educated population is to point this very dynamic out. These are not my ideas but notions drummed into during the latter stages of the cold war through various forms of media from those times. Many popular movements were reported to have received mysterious cash infusions from apparently innocuous sources. Some of these cash donations were part of psy-ops activities on the part of aggressive nations while other reports of donations were fabrications to simply degrade a special interest group’s position (this to bred discord and such false reports were disseminated as psy-ops by aggressor states and by other special interest groups adversely impacted by the assertions of opposing special interest groups). As one can imagine the world of psy-ops can quickly appear to be through the looking glass but it is a potent and real force none the less.

#218 robert on 09.30.12 at 10:07 pm

It drives me crazy that Canadians will do more due dilligence on their choice of a cellphone than they do on a home purchase. I urge every Canadian who is contemplating a home purchase to do some exhaustive research and use some common sense. Forget about cheap money today or easy terms and pay attention to real value. Buying a 20 year old house that is about to enter the (time to replace cycle) where roofs, flooring, paint, furnaces, air conditioners, appliances, hot water tanks, fixtures etc etc can be financially devastating. Would you pay more than the new price for a twenty year old car? What if rates end up back at 8%. Could you handle the payments? Oh and if rates rise will prices fall accordingly? The correction has just begun and yes prices have pulled back to the point that deals are starting to look attractive but dont be fooled as this falling knife market is filled with risk. The true meaning of wealth is about to take a detour and that detour makes a man with NO DEBT a wealthy man. The man who believed leverage was the key to wealth will learn that leverage works both ways and the downside can be very painful as it chews you up and spits you out leaving you broke and liable for uncontrollable and unlimited downside risk. There are thousands of Canadians tonight just praying that a greater fool wll stumble into their open house and save them from this mountain of debt called a full recourse mortgage.

#219 Mr Buyer on 09.30.12 at 10:15 pm

It is not that peace is not a good thing. Peace is a bad thing when the desire for peace is fostered in a population through the activities of an aggressor population as part of the aggressor’s preparation for conquest. This is another form of psy-ops, emphasizing elements of national consciousness in-congruent to a given situation. I remember in the run up to the Marvin Hagler Sugar Ray Leonard fight I saw Hagler literally overcome opponents in a lightning storm of devastating lefts and rights. A number of fights were over in moments. I was pushed by a friend to forecast the outcome of the Sugar Ray/ Hagler match up and I said that iff Sugar Ray can weather the first round or two he will win. Military conquest being what it is now with the elimination of front lines and accuracy improving each nanosecond the chances of weathering the opening rounds are diminishing fast. In the event of widespread technologically advanced war it is thought by some that if a winner is not evident in relatively short order the technologically advanced assets will likely be quickly expended and thus the opponent with the most boots on the ground and means to move those boots around will likely prevail (nothing new there). It is worth noting that psy-ops is not practiced solely by nations but by also by aggressors in groups of many different sizes with many different goals, the key elements of psy-ops are certainly laterally transferable skills. All this comes from reading too many spy novels during the cold war.

#220 Mr Buyer on 09.30.12 at 10:40 pm

Social Psychology describes a phenomenon know as social inoculation. I will start by saying that the important elements of social inoculation are indeed laterally transferable tactics. Basically social inoculation is practiced by a given group to galvanize loyalty to the group and thus elevate cohesiveness. Group members will present to fellow group members outside objections and criticisms concerning the group and offer direct rebuttals to the criticisms or emphasize the purpose of the criticisms is to prevent the group from attaining objectives (along with other techniques to convoluted to explain here). A particularly devastating (perhaps to severe a word in this case) manifestation of elements of social inoculation takes the form of any given salesman raising concerns in one breath and minimizing these concerns in another. As is the case in breeding loyalty in groups, it breeds loyalty to the salesman in buyers. It is easy to see why first year psychology classes are often the most popular university classes.

#221 Mr Buyer on 09.30.12 at 10:55 pm

As a Canadian the last thing I desire is to gain more land and resources by conquest or any other means for that matter. We as Canadians have more than enough land and resources. My big concern is being able to keep our lands and resources as the world approaches its carrying capacity (a dynamic number still openly debated). While I do not speak for Canada, I am still none the less Canadian and as a country Canada obviously does not need any more land or resources.

#222 Mr Buyer on 09.30.12 at 11:01 pm

I am not Japanese. I will never become Japanese because Japan requires a new citizen to renounce citizenship in all other countries and I will never renounce my Canadian Citizenship. I remember my life as a boy in Canada all to well and realize that while it was usual and mundane from a Canadian perspective (rivers, lakes, swimming, camping, hockey,trapping, hunting,fishing,skiing, snowshoeing the list goes on) it is the stuff of dreams for many people in other parts of the world.

#223 Mr Buyer on 09.30.12 at 11:14 pm

Having grown up during the latter parts of the cold war and at least part of my childhood being spent near a large army base my school experience included repeated vivid accounts of the second world war that caused me to become a little bit of a student of that horrendous war. As such you can imagine the atrocities carried out by the imperial Japanese Army coupled with the Japanese soldier’s vaunted indomitable spirit bread deep fear in me of the Imperial Japanese soldier and my country Canada never felt the wrath of that army marching across our lands. I watched a black and white war movie one rainy afternoon when I was 5 years old and everyone was sleeping. Even the greatly sanitized movie left me with fear and loathing of the Imperial Japanese Army that has never fully left me. With all this in mind I can tell you no one can be more surprised than myself that my careening through life has brought me here to Japan.

#224 Mr Buyer on 09.30.12 at 11:27 pm

What I have found here in Japan is industry and hard work at level I would have never thought possible. The Japanese people live on a string of Islands that are as beautiful as they are dangerous. In the face of real devastation they as a people continue living and working and I cannot help but respect that. While I am not Japanese my wife is and she has been and continues to be a good wife that I count myself extremely lucky to have married. Most importantly, my children are Japanese Canadians. They presently speak Japanese much better than they speak English and they deeply love their Japanese Grandparents as I loved my French Grandmother as a child. I heard a saying once. It goes something like if you want to make God laugh just tell him your plans. At no point in my life in Canada did I imagine having Japanese children. I can only say that I would rather be lucky than good and I am truly lucky to have my kids, screaming, yelling crying, jealous, laughing, playing, daddy, daddy, daddy kids.

#225 new canadian on 09.30.12 at 11:53 pm

#31 Tim
You fit more into “Canadian public” in pure debt. This blog must have bored you already.

#226 Roland on 10.01.12 at 12:21 am


You wrote:

“Those of us in the Western world should hope and pray that the US can maintain unchallenged military superiority (long enough for us to get through this era of massive deleveraging), especially in the seas. Because it is this is military might, more than anything, that is keeping the dollar and the dollar/treasury system from sinking.”

That’s one thing I definitely do NOT hope for.

The faster the USA loses its sole world reserve currency status, the better it will be for everybody all over the world–including most of the people who live in the USA. This “exorbitant privilege” (as someone once aptly called it) has never done anyone much good, except perhaps for a small minority of people involved in high finance.

Nothing has caused more global economic instability than the Americans being able to purchase real goods with their fiat paper.

This has cost millions of American people their jobs. After all, how can a typical working American, trying to trade real goods or services in the world market, outcompete his central banker’s printing press? Don’t you see how much easier it has been for Americans to print money, lend it out, and buy from abroad, rather than maintain their own real goods-producing industries?

It has cost the people in countries such as Saudi Arabia untold possibilities, as their unelected rulers have sold out their country’s irreplaceable resources in exchange for a bunch of ever-devaluing American paper.

That American reserve currency, so recklessly and irresponsibly managed by their unelected and unaccountable central bank, has caused a massive imbalance in world trade. Many parts of the developed world have been experiencing double-digit inflation for the past decade or more, because the lousy s.o.b.’s running the world’s reserve currency have engaged in deliberate, all-out devaluation. The only way anyone can try to protect against this flow of ever-devaluing US dollars is to disengage from the world trade itself.

In other words, the reckless management and abuse of world currency status by the USA threatens to undermine the structure of open global commerce which has taken so long for us to establish.

Bernanke and his ilk might ruin what might have been the most promising set of developments in world history.

And you, #27, somehow want this economically inefficient and morally disgusting state of affairs to be artificially maintained by the threat of force? Aren’t you even the least bit ashamed for thinking like that?

#227 Mike on 10.01.12 at 10:02 am

“We should therefore be careful what we wish for!”

Wow… it’s like those columnists think that wishing for a scenario to pan out will actually make it happen!

#228 deja view? on 10.01.12 at 1:09 pm

Euphoria + self-flagellation = the RE cycle.
We are now entering the later.
‘Made in Canada’ whips, now on sale!

#229 Steve on 10.01.12 at 3:09 pm


only 2 comments in almost 15 hours?

Who hacked the blog?