Over she goes

“Hey,” she said. “Maybe you were right… after all.” My wife was staring into the back of the seat in front of her as we hurtled along someplace above Quebec. There a little TV screen carried a signal from BNN with the scrolling headline “…78% of Canadians believe real estate prices will correct…”

Whaddya mean ‘after all’? I growled. But she had The Look. I quickly decided to behave.

On Thursday more Bay Streeters piled onto the housing-is-losing bandwagon. The latest is BMO Nesbitt Burns, publishing comments that in the wake of the dismal Toronto sales reported on this henpecked blog yesterday, buyers should be pumped. “With new listings up 4 per cent year over year against a backdrop of falling sales, and with plenty of potential resale condo supply coming over the next year, Toronto is quickly heading for buyers’ market territory for the first time (depending on your definition) since the recession,” said BeeMo economist Robert Kavcic.

Remember, GTA real estate sales fell 21% last month. Condos tanked 27%, and downtown deals declined by more than a third. Detached home sales were off 19%, and SFH prices in 416 are lower by 6% in five months.

And out in distressed Vancouver, the MSM is putting in print opinions it steadfastly ignored just months ago. “My casual observation of single-family homes in Kits suggests 10 to 15 per cent declines already, with a lot more likely to come,” the Province reported university prof Andrey Povlov as saying. “New mortgage rules and troubles in China certainly play their role. But more importantly, the Vancouver market has been substantially over-valued relative to other North American markets for a while now.”

Here’s more to consider.

Blog dog Matt was walking in to his office building in Ottawa this morning and noticed this. “Thought you might like to see the bank’s new sign,” he says.

In mid-town Toronto, around the corner from where massive new condo developments have been planned, blog dog David says there is ample evidence developers are battling stiff headwinds when it comes to selling their projects.

“This morning I saw the attached billboard inside one of the snazzy bus shelters on Yonge St. in the area,” he tells me. “Judge for yourself what it says – and implies.”

Hmm. The majority of people suddenly think real estate prices will fall. Establishment economists freely speak out about coming reductions and a sellers’ retreat. Lenders rushing to extend credit before the HELOC rules are throttled at the end of this month. Condo developers slashing prices and throwing in a year of occupancy costs. Can all these dots be connected?

Well, of course they can. What were once considered fringy bleatings from a marginal (but irresistible) bearded curiosity are now society’s meme. That real estate is wobbly at best and more likely a financial sinkhole is an idea with legs. Suddenly we’re reading about it in the papers, seeing it on the TV news and listening to boring economists and professors tell us we might be screwed. Clearly the real estate community thinks so, with realtors trying daily to talk vendors into lowering prices and developers scrambling to rescue their stalled towers.

This certainly adds momentum to something which was economically inescapable. That real estate prices would topple over given the slightest of nudges was obvious to me. Also clear was that the feds’ war on the house – coordinated between chief peckerette F, the omnipotent Bank of Canada and the financial institutions cop, OSFI – would be that nudge. So, over she goes.

This will not be a fun winter to try to sell your house. So anyone who needs to bail should just slash their price and hope to split now. The correction will be ongoing well into 2013, with fewer buyers finally bringing falling prices. And just when sales levels stabilize, prices will continue to fade. Remember, it took almost six full years for real estate values in the US to finally trough.

Those who bought too early learned a key lesson in premature closing. Those who delayed listing, lost money. The pattern will repeat.

183 comments ↓

#1 Strataman on 10.04.12 at 8:21 pm

First!!!!!!!!

#2 Ian on 10.04.12 at 8:22 pm

Looking forward to your seminar on the 23rd!!!!

Looks like Toronto will follow California (namely LA’s) 45% correction. Too many similarities between the two….

#3 Ian on 10.04.12 at 8:23 pm

BTW, Garth you rock! Love your books!!!!!

#4 TurnerNation on 10.04.12 at 8:25 pm

Early post. Big date tonight??

#5 RE Observer on 10.04.12 at 8:26 pm

This blog is great….sent it to another family member today to convince them not to rush into buying a property to flip. Pretty sure he listened! Thanks Garth.

#6 Randy on 10.04.12 at 8:26 pm

It’s a buyers market…haha

#7 T.O. Bubble Boy on 10.04.12 at 8:32 pm

Wow – another Minto project in trouble? They have been the developer who always seems to increase size of towers and essentially point to “infinite demand” to justify oversized buildings. They had a King West project get canceled in 2008-2009 during the financial crisis (which in the 4 years since has been re-launched and eventually built), and are seeing certain upsizing proposals get rejected now by the city, but it is suprising to see this desperation to sell units.

#8 Babblemaster on 10.04.12 at 8:38 pm

“unlock the maximum equity in your home now before it’s too late!” – Alterna Savings sign.

Too late for what? Are they about to run out of kool aid?

#9 tow mater on 10.04.12 at 8:40 pm

I guess the Ottawa realestate board did not get the memo. According to them in the September sales release Sales are “historically on track”. LOL.

They sort of gloss over the 17% drop in sales since last sept.
http://www1.ottawarealestate.org/home/NewsInformation/LatestNewsRelease.aspx

#10 Babblemaster on 10.04.12 at 8:41 pm

“unlock the maximum equity in your home now before it’s too late!” – Alterna Savings sign.

And you might as well fill in an application for the future govt. sponsored loan modification program while you’re at it.

#11 Alberta/Nova Scotia boy on 10.04.12 at 8:41 pm

Having recently sold our home in Alberta, we met with a banker here in Halifax to plan how to invest our money. He agreed that we were wise not to purchase in Halifax. The mainstream is starting to get it Garth.

#12 happy renter on 10.04.12 at 8:52 pm

I remember when I first was looking to buy a house in 2003. The realtor said don’t wait to long to buy because their going up $1000 a week and he was absolutely right,so I did and made 60 % profit.Then the stock market went to the moon.Now very soon it will be an awesome time to short stocks.Theres always a bubble somewhere,just grab it.

#13 Francis on 10.04.12 at 8:59 pm

And the voters are as quiet as mice. Probably won’t realise who has screwed them, even at the next election.

Pity !

#14 house burden on 10.04.12 at 9:06 pm

Don’t forget there are a huge number of real estate agents that wants to make a sale. They don’t care what you sell for all they want is a commission.

There will be downward pressure to reduce that price so they can make a quick sale. After all they have expenses too.

So for the home owners, your going to get hit by the media, pressure from the real estate agents, and your going to be watching you house prices sink and go into the RED. So if you sell, you’ll be losing money. Can you say depression!

But life is a “FLEXIBLE BULLET” isn’t it.

#15 scotty on 10.04.12 at 9:11 pm

After the housing market has crashed and you can say I told you so. Will you publish a photo of you frolicking with the amazons in the bunker?

I may frolic, but real estate won’t crash. Just crumble. — Garth

#16 WhiteSquall on 10.04.12 at 9:12 pm

It’s called the hot potato game – it doesn’t matter what is in play – those who play the game know that someone will be left with burnt hands.

If anyone actually believe’s the builders are caught with their pants down really needs to take a reality pill. This is a typical cycle – many have gained riches beyond comprehension.

It’s the over aggressive speculator or naive young family that will sit with a mountain of losses – the game will change – and repeat itself once again – an endless cycle.

I was reading the housing blog from Ben Jones in the States as far back as 2005 because things didn’t make sense to me even then – am I a genius – nope, it was just a matter of avoiding the hot potato and let others chance it – no one deserve’s any pat on the back – it’s a cycle…plain jane!

#17 claudius emperor on 10.04.12 at 9:16 pm

# 12 – short stocks? with this money printing?

long stocks (good dividend paying srocks, some international, some selected US, some Canadian) my friend and hold for 5-6 years, we will then speak again.

There would be no deflation except in credit based assets (real estate) and some luxury items. There is already a significant inflation in the cost of food, gas, medications, education (everything that realy matters these days)

God help the retiries and people on fix income or savers (0.15 % interest rate on saving accounts…)

#18 claudius emperor on 10.04.12 at 9:17 pm

60 % decline from the top is a crash.

#19 Freedom First on 10.04.12 at 9:19 pm

I have always been amazed how so many people can be smart enough to learn a job, trade, profession, etc.,and yet spend little if any time becoming financially literate. Not even realizing that financial mismanagement can ruin your life in so many ways. I call this having a closed mind, combined with a big ego. Keeps people ignorant and arrogant. Knowledge and humility are a winning combination. I hope to not ever forget it myself, and consider times like this as a good reminder what can happen by making foolish choices.

#20 Santana on 10.04.12 at 9:24 pm

TRUE STORY: My Mortgage broker cousin in Fraser valley area says that his income has dropped 60% from last year. He is a reputable broker who is worried because he can sense the “tsunami about to hit the market”.. he also says that most of his business the last couple years was mortgage renewals and that ” most people he knows are ear deep in debt”!!!!
He also holds multiple properties that simply are not selling even at reduced prices. I told him to sell at discount and he actually agreed because he agrees that it is going to get a lot worse !!!! THis is going to get scary .

#21 Paully on 10.04.12 at 9:26 pm

So happy to have sold in February! Happily renting now, and watching the spectacle. Pass the popcorn!

#22 Smoking Man on 10.04.12 at 9:39 pm

The majority of people suddenly think real estate prices will fall. Establishment economists freely speak out about coming reductions and a sellers’ retreat.
………………………..

Yes Garth I remember The established economists.

Your buddy Rosie, David Rosenberg, remember his pics, don’t blame him for finding another line of work. And the infamous David Wolf , calling for a masive crash back in the fall of 2008 then in early 2009. He had the headlines for 2 weeks. What’s he doing these days.

Yeah
Established economists.

#23 TurnerNation on 10.04.12 at 9:40 pm

Err, Westjet is phasing out seatback TVs with pay-per-use Tablets.
Would have thought Air Canada is the preferred choice…a chance to earn a Business Class access with upgrades earned by flying often.
Still, YHM is closer to Bunkerville!

#24 Realtors are in an all out panic on 10.04.12 at 9:41 pm

This housing crash is starting to get real nasty in the GTA as realtors can not make a single sell and many are in a state of panic. This housing crash is ONLY going to get worse realtors as no more cash back mortgages starting in a couple of weeks so say goodbye to many buyers. It’s going to be a nasty crash realtors a nasty crash.

#25 Canadian Watchdog on 10.04.12 at 9:46 pm

Construction corruption tied to mafia is “bigger problem” in Ontario. Link

“At the Quebec inquiry, a police Mafia expert let it drop that Peel Regional Police may be investigating government contracts awarded to organized crime groups”

#26 joe on 10.04.12 at 9:51 pm

i have been looking at townhouses in mississauga for a while now and have been noticing the price reductions!! Almost every house has gone through a few before getting sold and some are going down by a lot. This is will break a lot of people and make a few smart ones…

#27 V on 10.04.12 at 9:52 pm

fall prices fall!

I have 100,000k dp and can only afford a townhouse

#28 NKVD Black Raven on 10.04.12 at 9:55 pm

I’ve been reading Garth for a couple years now. The small things I hear out there. Earlier this spring King & Blue Jays comes to mind. Some loud & proud young snotty in the lobby of a new condo that area really letting it rip on how he was ready to own condo right now. He was there with the agent. God I sure hope she got him. Precocious little snot – made you cringe.

#29 2muchdebt on 10.04.12 at 10:00 pm

This bubble talk is gaining traction…

http://www.businessinsider.com/canadian-housing-bubble-2012-10

#30 george on 10.04.12 at 10:00 pm

According to Statistics Canada, the M3 money supply in Canada increased 7.3% from the end of August 2011 to the end of August 2012:

http://www.statcan.gc.ca/tables-tableaux/sum-som/l01/cst01/indi02a-eng.htm

#31 Form Man on 10.04.12 at 10:02 pm

#22 smoking man

seems like maybe you are a bit nervous SM. spelling is noticeably better in this post………

#32 FTP - First Time Poster on 10.04.12 at 10:05 pm

Without comment:

http://www.businessinsider.com/canadian-housing-bubble-2012-10

#33 Don't read his post on 10.04.12 at 10:07 pm

Garth, do you think it will take 5 or 6 years to reach bottom in Canada? Or will it be a milder and quicker correction?

#34 Jay Currie on 10.04.12 at 10:09 pm

One interesting question for us popcorn eating renters is how long Wile Coyote stays suspended in mid air before the drop to the canyon floor.

Here in Victoria a silent 15% price drop has happened without there being much of a sense of panic or desperation. A lot of higher end homes have been on and off the market a couple of times but not a drop of real blood in the streets. For that to happen another, visible, 20% drop with slow sales is likely needed. Which could happen as early as this Spring when the market does not “rebound”.

Plus, for added fun, we in BC are almost certain to be blessed with an NDP provincial government. And one which will not be in the least “moderate”. Californication proceeds apace.

#35 TRT on 10.04.12 at 10:11 pm

Must Read:

Apparently, South Asians and Chinese are up to their eyeballs in HELOC’s and Unsecured Creditlines. Why not?

If they’re Permanent Residents, they can open an account in their native country and buy GIC’s!! Once you’re a Canadian Citizen, YOU CANT DO THIS. Most recent immigrant families always seem to have one or two members that remain Permanent Residents for Good Reason:

1 year GIC rate in India is 8.0% !!! Don’t know what the rates in China are but maybe an “Astronaut Dad” can comment?

http://www.icicibank.com/interest-rates.html#fd

Man, do I wish I was a Permanent Resident or had a mom or dad who was. They could collect OAS/GIS + free healthcare and we could utilize the 8% GIC. To fund it we max out our HELOC and other credit. Borrow at 4% and get 8%.

Permanent Residents: All the benefits of Canada and then some!! Too bad I’m just a Canadian Citizen :(

#36 Inglorious Investor on 10.04.12 at 10:14 pm

Organized crime (camorra, ‘ndrangheta, or whoever) have infiltrated the construction industry in Ontario??!!!

To quote that “poor corrupt official” Captain Renault, Casablanca’s Prefect of Police in 1942: “I’m shocked, shocked to find there is gambling going on in here!!”

#37 Realtor # 1 on 10.04.12 at 10:18 pm

Garth – SFH prices in 416 are lower by 6% in five months.
OR about 5 % since July.

No big surprise that usually happens to prices when you compare them to the highest price point – Spring time. They will ALWAYS be down.

it would be more dramatic if the prices didn’t go up from the summer lows

#38 LJ on 10.04.12 at 10:27 pm

That Toronto condo project (above) will probably remain a hole in the ground. If they get the hole dug in time…

#39 Inglorious Investor on 10.04.12 at 10:34 pm

Realtors in Toronto have been fighting tooth and nail for sales when sales were strong and prices sky high. Competition, fierce. Barriers to entry, low.

Consequently, you can’t throw a brick in Toronto without hitting a realtor. Imagine how ugly it will get (cue the cock fights) if sales continue to decline.

While there are honest realtors––and I have sympathy for both of them––my sympathy is tempered by the fact that too many realtors that I have encountered are as crooked as Montreal mayors. I dealt with one particular, arrogant hot shot last summer whom I can only characterize as “the first hole in the alphabet.”

#40 Smoking Man on 10.04.12 at 10:41 pm

Garth, Toronto condo sales will boom in the coming months, the machine sayes it is so.

The average trax sixer will take their marching orders accordingly.

#41 Mr Buyer on 10.04.12 at 10:56 pm

There is a crash camp, a crumble camp, and a correction with melt camp. I am guessing these camps are a great deal closer than we think. Iff average house prices returned to a multiple of 3x average annual income that would mean a decline of 5x average income in some markets. When the magnitude of a decline eclipses the magnitude of the historical average house price I think it is safe to say it is a significant and unique event. If this takes place over 2 months or 21 straight years of property price decline it will still none the less be historic in nature. If calling this event something other than a crash serves a greater purpose while still minimizing the number of deer getting caught in the headlights well I may reconsider my preferred term which is collapse. I think people will remain calm on the surface up until the news starts reporting historic never before seen declines in house values and that will be all she wrote for the sure thing investment status of real estate for a generation or two. As for some sort of an economy continuing parallel to this disaster well Japan is another example of business soldiering on in the midst a real estate bubble collapse consisting of 21 STRAIGHT YEARS OF PROPERTY PRICE DECLINES.

#42 NorthOf49 on 10.04.12 at 10:59 pm

Headline from Hamilton – Average sale price up 13% YOY. “But it’s always good for your realtor to look at longer-term trends so that it’s not just a statistical blip,” said Cameron Nolan, RAHB president. Nolan says his personal sense is the increase is mostly a blip.

So why isn’t Cam more upbeat on such a large YOY price increase? Could it be that Hamilton freehold sales dove 20.4% YOY, or that condo sales dove 25.6% YOY.

http://www.rahb.ca/press/2012/121004pressreleaseSept.pdf

So for all the blog brainiacs that were thinking Hamilton would be a safe haven, it isn’t different here. Prices are too high, buyers are balking, and the value of real estate here is far less than what you’d think.

And besides, if you buy here, you might be dealing with this guy:

http://www.thespec.com/news/crime/article/812279–man-badly-traumatized-13-year-old-girl-judge

#43 Mr Buyer on 10.04.12 at 10:59 pm

#16 WhiteSquall on 10.04.12 at 9:12 pm
This is a typical cycle
……………………………………………………………….
Another myth that supports the expectation that real estate is bullet proof. This is not a typical cycle, this is the collapse of a real estate bubble.

#44 Victoria on 10.04.12 at 11:01 pm

I posted earlier that in Victoria people think that RE will never go down because i.e. we are an Island (?), i.e. everyone in the whole world wants to live here (?) and everyone in Victoria is wealthy (???????)

Okay that makes total sense.

#45 sotiri on 10.04.12 at 11:04 pm

“The Canadian dollar moved higher Thursday after a top Bank of Canada official suggested that rising interest rates are still a medium-term possibility.”

http://www.canadianbusiness.com/article/101179–loonie-moves-up-more-than-half-a-cent-following-boc-interest-rate-comment

#46 Basil Fawlty on 10.04.12 at 11:11 pm

There will be a lot of unemployment and lost tax and fee revenue associated with a downturn in the real estate market. Here comes the downside of the largest credit bubble in world history.
The money printing is now coordinated around the globe to try and stave off the downturn. Can they pump it up one more time?

#47 fredflintstone on 10.04.12 at 11:19 pm

Looking at Hamilton latest press release

“Seasonally adjusted* sales of residential properties were 10.9 per cent lower than the same month last year”

http://www.rahb.ca/newsdetails.php?id=189

Is not seasonally adjusted meaningless if comparing to the same month last year??

Also if you look at the charts they provide, i dont understand where they get the 10.9 percent decrease in home sales, when condo sales in the whole are are down almost 30% and all residential are down 20%??

http://www.rahb.ca/press/2012/Hamilton%20market%20September.pdf

http://www.rahb.ca/press/2012/Burlington%20market%20September.pdf

#48 THE CELIAC HUSBAND on 10.04.12 at 11:21 pm

I get a call from a friend of mine in Calgary. Says he is buying a condo in the newest development there. How much? It did not matter. His chance of making a s#@$load of money quickly was overriding all other arguments…

I invited him to visit me in France for a ‘cooling off” phase. No fat chance he says….suit yourself, what else can I say?

http://theceliachusband.blogspot.fr/2012/06/renovate-in-france.html

#49 Roial1 on 10.04.12 at 11:24 pm

Garth, We, at todays neo-con office meeting, have devised an out for “F and peckerets”.

Since you have been blogging this message for the past few years, WE BLAME YOU!

It will be so easy. Just give the MSM some of your posts and bingo, off the hook.

We got you befor so it should be a “slam dunk”

Thanks again,
S–t head & Fink in Ottawa. (think Bevis & Butthead but much less entertaining)

#50 Joe on 10.04.12 at 11:26 pm

Hey Garth! You must love the name of this new lender! LOL

http://uk.virginmoney.com/virgin/

#51 Joe on 10.04.12 at 11:28 pm

http://www.northernrock.co.uk/Mortgages/Find/Find-A-Mortgage/2yr_everyday_fixed_5dbv/?utm_source=mortHome_mortgage1

Maximum Loan to Value of 60% in the UK ??? WOW!

#52 bclandguy on 10.04.12 at 11:38 pm

I Have been in the BC RE market for over 20 years, I can’t believe that anyone would even consider buying in this market today…wait…wait, and wait is my best advise for new buyers, Vancouver is toast and I can’t believe some people don’t see that, I am waiting till 2016 or so to look at a revenue property for purchase, not in Van but the outskirts.
Cash is king now, hold and wait!

By the way, Smoking Man, I like your posts! :)

#53 GTA Engineer on 10.04.12 at 11:42 pm

#17 Yes short!

Money printing will not cause inflation. That opinion is a month old already. Asset deflation is significant enough that increased printing will not increase the money supply, as the deflation in those assets offsets the printing via destruction of money. Also, these prints are being held by the Fed and not making it out into the public money supply. So again, no increase in money supply. Add to that that the world is slowing – China, Europe, the US. Earnings multiples are assuming growth but actual earnings are dropping. Bonds, a better historical predictor of the economy, are indicating trouble. Stocks are the only indicator not pointing in the right direction, so it’s a bubble – short my friends, or at least sit on cash. I’m 50% in cash, 10% short, and 40% holding REITS, preferreds, and high yield instruments. Good luck all – the stock market’s rally is about to turn.

#54 EI Dude on 10.04.12 at 11:46 pm

Yeah, the bank sign with the professional dry erase board isn’t instilling much confidence. However, the added orange highlight to the lettering is very festive. The sign might as well say ‘ground beef 50% off’.

#55 Nostradamus Le Mad Vlad on 10.04.12 at 11:50 pm


“Over she goes [so] I quickly decided to behave.” — Is that the fat lady singing dem blues? I gave up social niceties eons ago.

“Can all these dots be connected? That real estate is wobbly at best and more likely a financial sinkhole is an idea with legs. Well, of course they can.” — An idea with legs? This blog and what’s left of my mind is becoming decidedly too racy!
*
Banxters’ Leftovers; JPM and the looting of Iran, plus Russia JPM again; Link between WH cyber attacks and global reserve currency; China’s currency forays; Producing Food but the land was used for different purposes; Thameslink Stink Govt. bozos; Divided Fed setting rates? 4Closure Alternatives; Retailers Slower sales growth; Hyperinflation in Iran; China says thanks but no thanks, until the dispute with Japan is sorted out; Gas Prices soaring in California; Oz;s Exports and where they go to; Interesting exchange between Draghi and Wadhwa of CNBC; Bacteria = 24K gold?
*
Breakfast (Break-The-Fast) More of a Hungryman’s Lunch; Bees From Space Blue and green honey? Boat Surfing the wrong way; Iran Mfg. ‘Arab Spring’. Something the CIA does very well; 1:59 clip Billary’s demonic laughter; Floodlights from Space; Black Mamba Snake venom better than morphine; Earth to Mars in six weeks.

#56 cramar on 10.04.12 at 11:56 pm

Had to make a trip to Scarbough today along the QEW and Gardner. Haven’t driven the Gardner in decades. I could not believe the number of condo towers within a couple of kilometres of the Rogers Centre. And I thought Chicago was condo city! Since many of this monster towers seem to be in the final stages, surely there are not thousands of condo-horny people to fill them. With tens of thousands of condos being built, if demand suddenly evaporates that is a recipe for a CRASH, not a “melt down”!

Coming back the GPS took me though old stomping grounds of the Upper Beaches and The Beaches. It has been 45 years since I frequented the place. Many houses now have clean vinyl siding, but does that justify the million dollar price tags? I’d forgotten just how close houses are to their neighbours. You get spoiled with a 60′ wide lot and think that is normal.

Definition of insanity: Living in a city where housing is 4x what it should be worth, and traffic is 10X what is acceptable! If I ever make it back to TO it will too soon.

#57 Carpe Diem on 10.04.12 at 11:56 pm

I see properties trying to sell in Ottawa West (Rural Kanata,Carp, Dunrobin, etc) that are simply not moving.

I would like to purchase this one place where I can have goats, sheep and a kickass guard donkey …. (FYI .. donkeys beat dogs as guard animals)

I can afford the price …. but I will wait.

Actually, my 3-times hotter wife says …. “you are house horny” …. I love this woman! She understands that people are idiots and prices will go down.

#58 Mithan on 10.05.12 at 12:04 am

By crumble, you mean long and drawn out Garth?

#59 Mister Obvious on 10.05.12 at 12:27 am

#19 Freedom First

Excellent little post. I wholeheartedly agree.

#60 Bo Xilai on 10.05.12 at 12:34 am

Garth, further proof about real estate boards and their “Frankenstats”… their proprietary Home Price Indexes… We’ve found a whistleblower who recently quit from the Real Estate Board of Greater Vancouver. Despite being the only “policy wonk” on board, he had no idea how it was calculated and was told not to ask too many questions… Here’s his frank admission from http://www.vancouvercondo.info:
————————————

“The funny thing about the HPI is that despite being the only policy wonk at the Board, I had no f***ing [Ed.] idea how it worked, how it was set up, or how it was administered. To my recollection, there were outside consultants involved in the “negotiations” that went on between the various boards when they created the new multi-region HPI, but as far as what data goes in there, it was a closely-guarded secret. Ben once asked me to find out what kind of pig went into the sausage, and Communications told me it was none of his (or my) business how the HPI worked, just that it did.

I assume that the index property is two blocks from the best school in Vancouver, has a pool, and a bunch of 8s in the street number (i.e., a tiny number of idealized properties), otherwise the spread between the HPI index and median prices is inexplicable.

…I’m not an economist by any stretch, but I was certainly the closest thing to one at the board, and I had no earthy idea how the HPI was calculated.”

#61 Soylent Green is People on 10.05.12 at 12:42 am

(but irresistible) bearded curiosity

#62 Soylent Green is People on 10.05.12 at 12:42 am

(but irresistible) bearded curiosity

#63 Bo Xilai on 10.05.12 at 12:45 am

I just lodged a complaint to Alterna Credit Union about their employees encouraging members to treat their homes as ATMs. I would encourage everyone else reading this to do the same:

https://www.alterna.ca/AlternaSavings/AboutUs/ContactUs/Contact/index.jsp

#64 DON on 10.05.12 at 12:54 am

#19 Freedom First on 10.04.12 at 9:19 pm

I have always been amazed how so many people can be smart enough to learn a job, trade, profession, etc.,and yet spend little if any time becoming financially literate. Not even realizing that financial mismanagement can ruin your life in so many ways. I call this having a closed mind, combined with a big ego. Keeps people ignorant and arrogant. Knowledge and humility are a winning combination. I hope to not ever forget it myself, and consider times like this as a good reminder what can happen by making foolish choices.

*****************
Well said! Sadly True! Now that’s a t-shirt.

#65 Seriously? on 10.05.12 at 12:57 am

OMG, the next truth that will come out is that global warming is real.

#66 Tony on 10.05.12 at 1:29 am

Most think U.S. real estate will fall another twenty percent. I’d say that’s about right when America finally declares they’re in a recession/depression they never ever came out of.

#67 Tony on 10.05.12 at 1:37 am

Re: #17 claudius emperor on 10.04.12 at 9:16 pm

Nice advice, in 5 or 6 years the poor man will be penniless and forced to panhandle for a living.

#68 Over in Australia on 10.05.12 at 1:58 am

What we are seeing here is more and more “free furniture” packages or “free cars” or $50000 worth of premium upgrades with every house and land package.

Stats say house prices have not fallen much as the sale is booked at full (fool?) value..

#69 Aaron - Melbourne on 10.05.12 at 2:29 am

I had to share this purely because of the headline:

http://www.fark.com/comments/7364998/Amityville-horror-house-for-sale-as-owners-drop-asking-price-from-$135m-to-GET-OUT-wpics

#70 cynically on 10.05.12 at 2:53 am

Well Garth, finally some real vindication. Congrats.

#71 cynically on 10.05.12 at 3:06 am

To #2 Ian – LA county was hit pretty hard but the two worst in California and among the worst in the country were San Bernadino and Riverside counties. The latter includes the Palm Springs area cities but they are very slowly coming back.

#72 45north on 10.05.12 at 5:47 am

“over she goes” the top boards on a picnic table are nailed it, in the picture it looks like they could be pulled straight out

#73 Smoking Man on 10.05.12 at 6:17 am

LaughingCon. I have a suggestion re your trade mark quote.

Leave a line. So it looks like this.

Its going to be a nasty crash realtors, a nasty crash.

You might also want to use caps on CRASH

#74 John on 10.05.12 at 6:52 am

Blacksheep wrote:

“Of course this whole premise sidesteps the point John, has repeatedly tried to make here. I think he’s trying share his view that our (most western) Central Banks (at a minimum) sovereignty, has been compromised, to some degree. “The Creature From Jekyll Island” is a great read and starting point if one is like minded. John’s challenge is trying to open a discussion on this topic, but some (me) lack the knowledge, while others won’t to discuss it on a public forum (wise?). John, I see your getting closer to just ‘getting it all out in the open’ Your comments from the periphery are being misinterpreted as slag’s and not helping the discussion advance. Your going to have to take a risk and share what ever knowledge you have, if you want to move the conversation forward. Hopefully others will join in.”
—–

Very good Blacksheep. You know, it’s not about info. I think that can be pieced together. It’s about our own readiness. Ask anyone who has been divorced. They had all the info day one.

Plus, the “information” has a very subjective quality. For some people the most important thing in their lives would be to eat right and excercise…far more important than anything. Life and death for some.

#75 TurnerNation on 10.05.12 at 7:45 am

Man, this weblog is heavy. All about commitment, short hair, working for the man. You’ve changed, man.
Surf’s up.

#76 GTA Girl on 10.05.12 at 7:45 am

Canadian Watchdog; unfortunately your link redirects back to here.

And was this yesterday’s testimony, under publication ban?

I can understand about Peel, but they should really then look into York Region. I believe Ontario municipalities not much different than Quebec

#77 █ ♣ █ My House Pofit is MINE - My House Loss is OURS on 10.05.12 at 7:53 am

#19

Financial system is complex illogical and very confusing with ONE purpose only, which are two things:

– to be beyond simple logic and inconclusive
– to be out of reach of most mortals
– to enlarge itself on behalf of mortals

where 1+1 = 3 if we agree upon.
(which ironically is rule of mathematics..)

lets all hope that CAPITALism will be back
and CREDITism will go to histy books

#78 Julia on 10.05.12 at 8:12 am

224 condo projects with close to 60,000 units under construction in Toronto right now.

http://www.businessweek.com/news/2012-10-05/gehry-too-tall-condo-towers-built-for-bull-market-mortgages

#79 Buy? Curious? on 10.05.12 at 8:22 am

Garth, the worst part about all of these stats being down 21% year on year, average days on the market, House Price Index, Seasonal Adjusted numbers, etc is that they all come from the Real Estate Boards and their economists. Real estate agents can cancel a listing, reprice the property then re-list it and it comes up as being a new listing. If was originally listed at $439k then re-listed at $399k and sold for $419k, well, it’s recorded as being on the market for a few days and sold over asking. You have that done a couple hundred times a month in the GTA, throw in a couple of homes that sell for over a million, and the Real Estate board can say with a straight face that the market is fine. Then you have all those real estate agents that repeat those same stats in the sales meetings, with the same old cliche’d reasons for buying and selling a house to their network of sheep on Facebook and *BOOM* another one buys a house! (Said like Freddy Mercury) How do you compete with that?

Some one should do a documentary on the process of becoming a Real Estate agent and working in a brokerage, say, one that sounds like Climax or Boil my face.

http://www.youtube.com/watch?v=XJ3–NB1QTc

#80 Smoking Man on 10.05.12 at 8:27 am

# 40. Fake

# 31. Giving my liver a rest and got new glasses.

#81 John on 10.05.12 at 8:29 am

“The correction will be ongoing well into 2013, with fewer buyers finally bringing falling prices. And just when sales levels stabilize, prices will continue to fade. Remember, it took almost six full years for real estate values in the US to finally trough.”
——-
Very true, but an understatement. The bailout vibe required in Canada will be the same one that was required in the States. But it won’t be there. Why? It can’t be. Because the bailout pool is not coming from Canada. The solvency, liquidity and political playing cards have all been over dealt at an international level. The “capacity to socialize toxic assets” is now a fraction of what it was. Mainstream media spin is harder to pull off. There are too many young people who need productive societies..not casinos ( although many abused credit when Goldman Sachs et al sold the cheap funny money via government partnerships).

Consider the supposed “US trough” south of the “border”. Talking about a real estate trough in the context of massive bailouts and QE to infinity of 40,000,000,000 per month…with an “election” in November? You think that’s a market? Please explain.

Look at your argument. You’ve got some unfixable assumptions going on. You seem to think that deleveraging ( planned or otherwise) doesn’t apply to governments in particular…and perhaps large corporations in general. You correctly identify deflationary risks, but overplay the mid to long term value of cash ( liquidity). What’s worse, you don’t back up this overplay at all. It’s just mired in timed technical analysis of secondary importance.

The US real estate trough analysis protects avoidance of the truth about non-productive corporate earnings, bank profits tied to casino dynamics, sucker real estate debts, the European Central Bank holding Europe together, derivatives, mid-term power of cash, central bank imposed austerity and the terrific impact of socializing global ponzi scheme debt that is impossible to deleverage.

You analyze Canadian real estate in a short-sighted way. We need solutions, not finger-crossing and populism.

#82 Jeff in Moose Jaw on 10.05.12 at 8:34 am

Hey,

This is all while money is being lent at emergency levels of interest! Now what?
I attached a link from wiki showing “List of countries by central bank interest rates”.
I find it interesting most major central banks are lending at these emergency levels.
TGIF!

#83 Jeff in Moose Jaw on 10.05.12 at 8:35 am

Here is the Link…..
http://en.wikipedia.org/wiki/List_of_countries_by_central_bank_interest_rates

#84 Gord In Vancouver on 10.05.12 at 8:44 am

Great Canadian Job Growth #’s Despite High Loonie

Looks like it’s time for Carney to ignore the fear mongers and raise interest rates.

http://www.businessweek.com/news/2012-10-05/canada-september-job-growth-is-five-times-faster-than-forecast

#85 Stoopid Idiot on 10.05.12 at 9:01 am

#63 Don

If one was to ponder the Dummying Down of modern society one could appreciate the increase of say the service sector. I’m sure our Tax Returns have deliberately been made difficult so the average wife could not do them. Look around. 70% of Canada’s GDP is service sector. Top that with all other sectors of say service providers and Voilà …. You got yourself an economy. Sadly it’s a service economy based in and on consumption. Houses are no different except ….. it is the last source of personal wealth on the part of the baby boomers…. Now we’re all broke

https://www.cia.gov/library/publications/the-world-factbook/geos/ca.html

http://www.youtube.com/watch?v=HFMN8_lv1F0

#86 gladiator on 10.05.12 at 9:06 am

is the guy on the right wearing women’s shoes?

His final wish. — Garth

#87 Smoking Man on 10.05.12 at 9:14 am

Skynet is real

NFP. Fudged. Machine just gave Obama the win

Sept NFP always down. 114K. Ba hahahaha

Rommy has got to be freaking

#88 Bossman on 10.05.12 at 9:24 am

Mr. Turner,
I have just recently been viewing your posts and the comments from the general population. Great insight!! I am currently looking to get into a home thinking it is better than renting, I now believe renting may just be a better option for me for now at least. I wonder if you can comment on the following. If all mortgages are backed (insured) by the CMHC and that money is tax payer dollars, why do the banks get to profit from these mortgages? Why do they assume ‘no risk’ when a client fails to pay? If we the tax payers are the ones backing the mortgage then shouldn’t we (the taxpayers) get to collect the interest? Why do we even need banks for mortgages. I fail to understand how this is just. I think if the banks are turning a profit from interest on money loaned (taxpayer money in a sense) the money should be backed by the banks and not us the taxpayers. This just doesn’t make sense to me, if they assume no risk then what is stopping the banks from giving mortgages to people who cannot afford it!!

#89 Canadian Watchdog on 10.05.12 at 9:28 am

#75 GTA Girl

Here’s the link: Ontario must root out the Mafia in its midst

Which may be related to this.

http://www.thestar.com/news/gta/article/1241481–watchdog-orders-brampton-to-reveal-details-of-huge-contract

“Councillors and residents have tried unsuccessfully for more than a year to learn more about the pricing of the winning bid by Dominus Construction”

Dominus also owns City Zen and if you look at Google Maps you’ll see three office locations show up: Mississauga, Vaughan and Markham.

We’ll see what happens in time.

#90 Toronto_CA on 10.05.12 at 9:29 am

US jobless rates drop below key 8% threshold, and it’s from people finding jobs not dropping out of the market?

Garth is right, don’t bet against the USA.

#91 Marcus on 10.05.12 at 9:41 am

“The unemployment rate decreased to 7.8 percent in September, and total nonfarm payroll employment rose by 114,000, the U.S. Bureau of Labor Statistics reported today. Employment increased in health care and in transportation and warehousing but changed little in most other major industries.

Household Survey Data The unemployment rate declined by 0.3 percentage point to 7.8 percent in September. For the first 8 months of the year, the rate held within a narrow range of 8.1 and 8.3 percent. The number of unemployed persons, at 12.1 million, decreased by 456,000 in September. ”

If you’re wondering “How the hell did THAT happen?” Simple.

1. The ranks of the employed rose 873,000.

2. Of these, 574-thosuand were “estimated” into existence with the CES Birth/Death model. Hmmm…

3. All of the job growth came in “services”. The ugly part is goods producing (like manufacturing jobs, you know, the kind that have been mostly jobjacked to Asia and Mexico? ) actually went down 10,000 for the month. Durable goods jobs down 13-thou.

4. 81-thosuand jobs were found by 167-19 year olds. And on it goes.

#92 John on 10.05.12 at 9:43 am

Love this blog! I’ve been renting for several years now and almost got caught up in the hype twice. Now I look like the smartest guy in the world after everyone telling me that renting is throwing away my money. I’ve never bought that argument and have been able to save, invest, purchase (and afford) a nice car. I would certainly be a stress case if I needed to sell a property now or in the next year or so.

I just hope the feds don’t bail out the over-leveraged, debt-ridden while punishing prudent citizens like myself.

#93 Gunboat denier on 10.05.12 at 9:51 am

A couple of bloggers were criticizing the demographia studies yesterday. I found this in their 2006 study:

“Toronto, with its newly enacted land restrictions seems
likely to experience serious housing affordability
deterioration in the years to come (Figure 9).”

#94 45north on 10.05.12 at 10:02 am

Smoking Man: I have a suggestion

out of care-actor

#95 Smoking Man on 10.05.12 at 10:18 am

#88 Marcus

582000/873000

And the answer is 0.66666666666666

What are the odds of that.

To be a fly in the room at Romney place.

“Those [email protected]”/:’_:cks. That F#(ing-:! [email protected]

#96 ozy - all of those KANDOS looks like guaranteed L-O-S-S (not only risk) to me on 10.05.12 at 10:22 am

All of the new KANDOS in the KANDO FOREST looks like guaranteed L-O-S-S (not only risk) to me, not enough sun and root system for all :) judge yourself, even the economists say that.

http://www.businessweek.com/news/2012-10-05/gehry-too-tall-condo-towers-built-for-bull-market-mortgages#p2

I would say it’s time to S-T-O-P buying KANDOS in the KANDO FOREST baby

#97 Daisy Mae on 10.05.12 at 10:22 am

Business Insider: “Canada avoided many of the mistakes that the U.S. made in its housing market.”

Read more: http://www.businessinsider.com/canadian-housing-bubble-2012-10?op=1#ixzz28Qzaxv5M

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

What are they talking about? Canada has made all the same mistakes as the USA, albeit a few years later.

#98 Daisy Mae on 10.05.12 at 10:34 am

#34 Jay Currie: “Plus, for added fun, we in BC are almost certain to be blessed with an NDP provincial government.”

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

Probably. Cummins has been described as “old, stubborn, cranky and aloof” — quite clearly the wrong man for the job. All because the provincial Conservatives chose to prevent a leadership race. So we’ll get what they deserve. And it’ll be NDP. *sigh* Here we go again….

#99 DR. WAYNE on 10.05.12 at 10:35 am

#1 Strataman on 10.04.12 at 8:21 pm

First!!!!!!!!

Look in the mirror, Strataman, you’ll see an a$$hole.

#100 Daisy Mae on 10.05.12 at 10:44 am

#44 Victoria: “….and everyone in Victoria is wealthy (???????) Okay that makes total sense.”

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

I’ll have to inform my son who lives on the island. He doesn’t realise this….

#101 Pr on 10.05.12 at 10:56 am

#89 John
…Love this blog!… I just hope the feds don’t bail out the over-leveraged, debt-ridden while punishing prudent citizens like myself.

The feds wont bail them out, because they(feds) have made many warning to be careful and to take proper action regarding those warning.

Me, I just pray that the feds will never go back to 30 years amortization. 25 years amortization and a bigger cash down like 20% will be the best, for the stability of the nation.

#102 jim on 10.05.12 at 11:12 am

Bossman #85

We live in a fascist country . There is no free markets and yes it make no sense to have taxpayer taking all the risk (CHMC) and the bank collect all the profits (interest). If banks lent out their money and took all the risk interest rates would be 8% or greater.

#103 };-) aka D.A. on 10.05.12 at 11:22 am

#26joe on 10.04.12 at 9:51 pm
i have been looking at townhouses in mississauga for a while now and have been noticing the price reductions!! Almost every house has gone through a few before getting sold and some are going down by a lot. This is will break a lot of people and make a few smart ones…

And that’s a major revelation! Wow, I am blown away by the discovery of such a profound barometer on the state of the real estate market. Wait a minute… hang on… could it be… is it possible… might there be just a glimmer of possibility… that those morons were overpriced to begin with and maybe, just maybe, so out of touch with reality that it took them two or three, maybe even four, times moving toward accepting reality before they finally got there?

For crying out loud people, you can ask whatever you want for your property it doesn’t mean it’s worth that. Maybe consider looking at something more indisputable, something verifiable, something real, something like, oh I don’t know, maybe the actual, selling prices of homes rather than pipe dream asking prices, you know something like what someone is actually prepared to pay, as an indication of where the market is rather than some idiots emotionally wrought palatial price expectation for their Walmart staged half duplex under the flight path of the local airport next to the provincial correctional facility.

#89John on 10.05.12 at 9:43 am
Love this blog! I’ve been renting for several years now and almost got caught up in the hype twice. Now I look like the smartest guy in the world after everyone telling me that renting is throwing away my money. I’ve never bought that argument and have been able to save, invest, purchase (and afford) a nice car. I would certainly be a stress case if I needed to sell a property now or in the next year or so.

I just hope the feds don’t bail out the over-leveraged, debt-ridden while punishing prudent citizens like myself.

Oooooooo… a nice car. Man I am soooooo envious. Do I ever wish I could afford a nice car. Some iconic sleek sculptured steel steed that the ladies would swoon over and befit my manhood. Man you’ve got it all. Such a fortunate man you are John such a fortunate man. Fortunately for you John you can probably, if push comes to shove, live in that nice car of yours. };-)

Yes the comments section of this blog carries so much credibility as a measure of public opinion on the state of the markets… not.

#104 Pr on 10.05.12 at 11:30 am

WOW! this guy, Eugen Klein from real estate board Vancouver, has no clues of what is in motion!!!
Black hawk down ! Big prices cut coming at you. Over!

http://www.youtube.com/watch?v=k16n04zbfPQ&feature=player_embedded#!

#105 coastal on 10.05.12 at 11:33 am

#44 Victoria,

SFH sales have fallen off a cliff in V town the last few months. Group think in a high risk endevour is a dangerous thing. What they don’t get is there has never been a time in history where homeowners were even capable of having five credit cards AND a maxed out HELOC. Banks would never allow this back in the 80’s and 90’s.

Sounds like the Victoria crowd is all holding hands chanting Kumbayah while the endless summer winds down. Garth is just trying to be nice with his estimates of a “crumbling”.

#106 Hawk on 10.05.12 at 11:50 am

#35 TRT on 10.04.12 at 10:11 pm

I am of Pakistani origin and the (pre-tax) interest rate over there would be about 11% on GIC’s.

A fat lot of good it is when the PAK rupee depreciates an average of 8 – 10% against the CAD $ annually and this is likely to increase in the years ahead.

Yes the Indian rupee has fared somewhat better, but after examining a 10 year chart of it’s performance against the CAD$, it has gone still roughly from 30 Rs. = $1 to 55 Rs. = $1, so that’s quite a decline.

The “good times” for India are also now ending with the world economy being in the shape that it is. Also I am guessing that 8% return on their GIC’s is a pre-tax return.

Looking at interest rates in any country, without the tax and currency performance factor mean nothing. Now if one had invested in Australia in a GIC then that would be a kick ass investment because the rates are 4-5% and the Australian Dollar has gained against the CAD$ over the last 10 years.

For now, my belief is that for a while longer precious metals will remain a better option for most people.

#107 Mister Obvious on 10.05.12 at 12:03 pm

#77 Julia

Thanks for the link. Two of those structures look like tilting piles of Popsicle sticks. The other resembles a giant loofa sponge. God help Toronto.

#108 Hawk on 10.05.12 at 12:13 pm

#41 Mr Buyer on 10.04.12 at 10:56 pm

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

Since this “TWENTY ONE” year decline of Japanese RE prices has been mentioned on these blogs about roughly 21 times, it’s fair to examine this now.

The prices in Tokyo around 1987 shot up about 6.7 times in value in just a couple of years. That’s a 670% INFLATION IN TWO YEARS.

The prices in Toronto in contrast were around $250K in 1987 and by 2011 which is 14 years later were around $450K which is not even double.

I hope that puts things “in context” for you.

http://housingjapan.com/2011/11/10/a-history-of-tokyo-real-estate-prices/

http://realestate.yourmoney.ca/2012/02/the-average-toronto-home-cost-21360-in-1966.html

#109 jess on 10.05.12 at 12:18 pm

no worries gdp will go up

http://www.thestar.com/news/gta/article/1267186–port-hope-radiation-464-615-spent-to-remediate-130-000-house#comments

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

Complex flip-flops probed by RCMP
Sep. 2, 2006. 01:00 AM
BOB AARON

The “Oklahoma,”
http://www.nachi.org/forum/f48/cmhc-does-not-check-best-7456/

#110 CalgaryRocks on 10.05.12 at 1:01 pm

#35 TRT on 10.04.12 at 10:11 pm
1 year GIC rate in India is 8.0% !!! Don’t know what the rates in China are but maybe an “Astronaut Dad” can comment?

http://www.icicibank.com/interest-rates.html#fd

Man, do I wish I was a Permanent Resident or had a mom or dad who was. They could collect OAS/GIS + free healthcare and we could utilize the 8% GIC. To fund it we max out our HELOC and other credit. Borrow at 4% and get 8%.

Permanent Residents: All the benefits of Canada and then some!! Too bad I’m just a Canadian Citizen :

Like Hawk mentioned those rates are tied to the inflation in the country and their currency devaluations. No arbitrage opportunity there for the common folk.

The only people that are allowed to legally print money (besides the government), are the banksters that borrow at close to 0% and lend it back for mortgages (2%-4%), loans (9%?), credit cards (20%) etc…

#111 Old Man on 10.05.12 at 1:05 pm

I was just looking at the new Four Seasons Hotel which opened today with condos. It has a good location at Bloor and Bay; goes operational tomorrow; the bar and restaurant could have been better too in my opinion. The restaurant menu is not expensive, so guess Smoking Man can afford to go on occassion, but those condos will be too expensive in the end.

#112 T.O. Bubble Boy on 10.05.12 at 1:18 pm

Here’s something interesting:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=12481262&PidKey=442680427

Semi-detached, listed at $699,900.

In the listing: “** Seller Willing To Lease Back For 1-2 Years At $3000 Per Month + Utilities”

So, if I do the math, with a 20% down payment (=$139,980):

$559,920 mortgage @3% w/ 25-yr amortization = $2650/month

With property tax of $450 per month, and ZERO maintenance/insurance/etc., you’re still losing $100/month — and that is after dishing out a $140k down payment and over $20k in land transfer taxes.

Yes – you are paying down principal… about $31k in those 2 years.

But, putting it all together, you’d lose:
$2,400 over 2 years from not even covering the carrying cost
$20,000 in land transfer
$15,000 over 2 years in the investment of the $140k (@5%)

That’s $37,500 in losses over 2 years, against $31,000 in principal paydown.

Even if you bought the house in cash, you’d be getting $36,000 a year in rent (about 5% of the $700k price), but then losing $450/month to property tax, bringing the gain down to $30,600, or 4.4%. If you need to pay an agent to get a tenant (2 months rent commission), and you’re down another $6k to $24,600, or 3.5%. After putting some insurance on the place, and you’re down towards 3% yield. Any kind of repairs/maintenance, and you’re probably better off putting the $700k in a high interest savings account or GIC.

#113 Old Man on 10.05.12 at 1:43 pm

Question: why would such a huge capital expense that is called the new Four Seasons Hotel at Bay and Bloor with highend condos open up a second rate restaurant and bar establishment there? I have seen better today, and decades ago, so just don’t get it, and tell me what I am missing in this equation?

#114 The Real Tony on 10.05.12 at 1:46 pm

Toronto real estate is going to drop 10,000%. Heard it here first

#115 Jeff in Moose Jaw on 10.05.12 at 1:46 pm

This is all while money is being lent at emergency interest levels.

#116 Frank le Skank on 10.05.12 at 1:49 pm

#105 Hawk on 10.05.12 at 12:13 pm
The second article you posted has a good conclusion and raises a very important observation. A $400,000 house with a 25 year mortgage at 3% will cost you $1,900 in monthly payments.

If there’s a 30% correction, this $400,000 would be worth $280,000. If interests rates eventually went up to 6% your monthly payments on that $280,000 house would be $1,800 per month.

From an affordability standpoint, people are in the same boat. There could be a small window of when the prices decline and when the interest rates go up.

#117 Devore on 10.05.12 at 1:58 pm

This might explain the negative savings rate and rapidly vanishing discretionary spending:

http://www.cbc.ca/news/business/story/2012/10/04/bmo-budget-survey.html

66% of Canadians don’t set a budget. They have no clue how much money is coming in, and how much is going out, until a check bounces and they look at their account balance.

Ownership costs are nearly always underestimated by buyers. They inadvertently forget to account for a couple hundred dollars a month somewhere, be it property taxes, higher insurance, mortgage insurance (gets added to mortgage increasing monthly payments), maintenance, higher commuting costs, weekly trips to Home Depot, the multitude of tools and appliances you suddenly need, like hey grass doesn’t cut itself, new furniture to fill up the new empty spaces, higher utilities, the list is endless.

#118 TGS on 10.05.12 at 2:01 pm

I’m not sure many people in the comments actually understand how CMHC works. It’s not simply a matter of the government covering for banks if someone defaults on their mortgage.

CMHC is incredibly profitable, one of the richest financial institutions in North America. The insurance on mortgages where people who don’t put 20% down goes to CMHC, which allows them to rake in the cash (profit of $250 million in 2nd quarter of 2012), which gives them a big pool of money from which to cover defaults. The only way your precious taxpayers dollars would be on the hook is if there was such a massive wave of defaults that it exhausted CMHC’s stockpiles of money. Unless the real estate bubble popping is accompanied by an interest rate spike (which would be idiotic policy on the part of the BoC), you probably won’t get defaults on a massive enough scale to the point where CMHC needs to get money from the government.

Even though CMHC is a crown corporation, bossman above is correct that we the citizens of Canada don’t profit. CMHC’s manager’s zealously guard their hoard and like to pretend and dream CMHC is a private corporation (which they lobby for constantly because they want massive private executive salaries). Some of that hoard of money really should be going back to the government. It’s funny that when crown corporations do poorly they get their losses covered, but when they rake in piles of money, none of that money has to go back to the government, and certainly the revenue from CMHC could cover all the loses of all the other crown corps, and still have enough of a hoard left over to cover defaults.

#119 rambler on 10.05.12 at 2:05 pm

Real estate has cycles, and just like a stopped watch is right twice a day, Garth if you keep saying real estate will go down long enough, years in your case, eventually you will be right LOL.

#120 Teacher on 10.05.12 at 2:07 pm

If I were y’all I would watch this video starting at 21:54
http://www.youtube.com/watch?v=nC_Zb5PEAZ4&feature=player_embedded

#121 Devore on 10.05.12 at 2:08 pm

#42 NorthOf49

So why isn’t Cam more upbeat on such a large YOY price increase? Could it be that Hamilton freehold sales dove 20.4% YOY, or that condo sales dove 25.6% YOY.

Lower sales impact realtors much more than lower prices. Their commission is frontloaded into the first $100,000. Their incentive is to make a sale, not to get the highest price (or lowest price, from buyers perspective).

20% lower sales hurt way more than 20% lower prices. If sales are down 20% but prices are up 20%, that’s not good.

Lower sales also mean fewer realtors are getting a paycheck, and those who are, are getting it less frequently and with higher volatility. This impacts their household budgets. Some realtors are taking on flexible part time work to supplement their incomes.

#122 Canadian Watchdog on 10.05.12 at 2:29 pm

#90 Gunboat denier

“Toronto, with its newly enacted land restrictions seems likely to experience serious housing affordability deterioration in the years to come (Figure 9).”

They (the United Nations) can forecast it because they created land restrictions, like in Vancouver and everywhere else in North America that’s now under occupancy of non-elected officials telling mayors and city council how to plan our cities without any public input .

Google The Vancouver Declaration On Human Settlements

Here’s one excerpt.

Land (Agenda Item 10)

1. Land, because of its unique nature and the crucial role it plays in human settlements, cannot be treated as an ordinary asset, controlled by individuals and subject to principal instrument of accumulation and concentration of wealth and therefore contributes to social injustice; if unchecked, it may become a major obstacle in the planning and implementation of development schemes. Social justice, urban renewal and development, the provision of decent and healthy conditions for the people can only be achieved if land used in the interest of society as a whole.”

———

Go ahead, read the rest. See what these sociopaths have planned for your kids future.

#123 Daisy Mae on 10.05.12 at 2:30 pm

#82 Stoopid Idiot: “I’m sure our Tax Returns have deliberately been made difficult so the average wife could not do them…..”

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

I’ve been saying that for years. Feds dazzling us with their footwork. LOL

Viola! Enter H&R Block and all the other tax preparers. Job creation….and with it, additional income tax dollars.

#124 DON on 10.05.12 at 2:39 pm

#44 Victoria on 10.04.12 at 11:01 pm

I posted earlier that in Victoria people think that RE will never go down because i.e. we are an Island (?), i.e. everyone in the whole world wants to live here (?) and everyone in Victoria is wealthy (???????)

Okay that makes total sense.
******************************

One thing is for sure – there are a lot of delusional people in Victoria and the people that move here are mostly old and will be moving on sooner than later.

#125 DM in C on 10.05.12 at 2:48 pm

Yes the comments section of this blog carries so much credibility as a measure of public opinion on the state of the markets… not.

+++

DA why don’t you go away and STAY AWAY? Christ you’re a condescending arsehole.

#126 PERPLEXED on 10.05.12 at 3:08 pm

I JUST DON’T GET HOW EDMONTON WILL BE AFFECTED.

THERE’S ONLY A 1.5 MONTH SUPPLY HERE AND PRICES WERE UP LAST MONTH. WHAT GIVES.

HISTORICALLY, HAS THE ALBERTA CORRECTION LAGGED BEHIND OTHER PROVINCES, PERHAPS, EVEN BY YEARS?

WHEN WILL IT START TO GET FUN HERE?

STOP YELLING. — Garth

#127 Oceanside on 10.05.12 at 3:08 pm

I have four friends that are realtors, the newest has 17 years experience. One keeps saying “Everybody wants to live here” and “The bottom has arrived”.

The other three all agree that the market is far too overvalued and that the change has started happening. They are able and willing to go through the “Market re-set”. Their challenge is to convince sellers that if they actually want to sell their home, it is worth what it will sell for, nothing more.

These are people that have saved when times were good and are able to weather the storm. Also are embarrassed by what their own CREA keeps saying about the market.

#128 xdisciple on 10.05.12 at 3:16 pm

#85 Bossman… You got it! An enormous learning curve awaits you from this point on. Eventually you will identify the problem begins and ends with the parasite financial class who are invisible Royals, and if you go to my blog, you will see how in the modern era, they’ve taken up acting in order to amuse themselves even further…

#129 xdisciple on 10.05.12 at 3:18 pm

Canadian Watchdog and GTA Girl… You must have missed my post from yesterday… I’ve confirmed that Lino Zambito is Jay Leno, an actor. Add this fact to whatever conclusions you reach concerning the construction industry and its relation to the housing sector…

#130 Humpty Dumpty on 10.05.12 at 3:22 pm

Here’s one of the establishments CHIEF economist!

http://www.guardian.co.uk/business/2012/oct/03/imf-global-economy-warning

#131 Old Man on 10.05.12 at 3:24 pm

There are Real Estate cycles of boom and bust in the GTA that has occurred for decades, but this time the equation is different. It is all a matter of the size of the bubble in relation to many factors, as a momentum of correction, and think about a balloon being blown up at different levels.

A small bubble will be a light wind to deflate the excess, and so on. This time the bubble has expanded greatly into unknown territory, and when it breaks there will be an equal reaction turning into a hurricane wind force with fear and panic setting in sending the market down quickly.

I do not believe that this will be a slow process for a correction, but a quick one with a few false bottoms, and then down she goes again, and my take is about 4 years max, and it will all be over.

#132 Puzzled Redneck on 10.05.12 at 3:24 pm

Somewhat related, perhaps: I contacted Statscan to ask what happened to their composite leading indicators and received a reply that they are no longer compiling them! Wow … I guess since the last results are from April, the layoffs are to blame.

Does anyone have alternatives? I find fragments of related information here and there around the site. This seems like a huge deal to me! Thoughts?

#133 truth hammer on 10.05.12 at 3:44 pm

Bwahahahahahahah…..what a coincidence that the Unemployment numbers came in positive after Obama’s massive gutting in the polls after his robotic and inept performance.

Look at how the numbers were formulated by using almost 600,000 ‘persons’ who were ‘estimated’ into existence using the birth death model.

http://www.bls.gov/news.release/empsit.a.htm

If anyone is left wondering if the civil service isn’t corrupt they should give their head a shake.

Read the full report here

http://urbansurvival.com/week.htm

isn’t this a great line applied to Obama

“awakening from emotional infatuation with the awareness of disappointment or disillusionment.”

And in Canada…another Liberal Party Hack from SBE ( somewhere back east) has endorsed Justin Trudeau…..bwahahahahahahahahah….would that be great for the civil service unions…a leader with no education in economics…no business experiance…a lifetime member of the radical teachers union in Quebec…a leader who would rely solely on the hacks in the backroom to formulate another gutting of the public purse as Liberals are prone to do.

Someone said “you get the government you deserve’…..I think better of Canadians than another round of insider ass grabbing among the boorish greedy unions and wishy washy sycophants.

Of course Obama lied….what do you think….thats the liberal game plan….if you can’t debate in the light of day…..cheat.

#134 truth hammer on 10.05.12 at 3:52 pm

#113…Frank…you forgot to include the calc on how much the guy who paid $400,000 would be paying at 6% . After all…he still owes the 400 not the market adjusted $280. Lets not forget that first time buyers will be in increasingly short supply in the future as this clown show has sucked in 70% of Canadians into homeownership.

So when we’re talking about ‘window’s……the underwater homeowner might want to think about taking the opportunity to jump out ……..into bankruptch freefall. 6% would murder the vast majority of current homeowners……the banks say the majority can’t support 1% in real rates…..Flaherty effectively raised the entry fee 1% and look what happened.

#135 Old Man on 10.05.12 at 4:09 pm

I do not have to look at stats, and am going to do this roughly within the context of then and now. There was not too much personal debt years ago, and costs were cheap in Toronto as compared to now. There were a few bubbles along the way with Real Estate back then, but lets look at what happened to average wages with a good education.

1972 $7,400; 1975 $9,000; 1978 $15,000; and 1981 $20,000 per year. Thus, any bubble in Real Estate was made up with sharp increases in market wages, and if you worked for a government agency wages were higher still. Those that bought a home in the past few years are into personal and mortgage debt with no way out because they wanted to ride the wave.

Their earnings today can no longer afford a downturn in the Real Estate marketplace to take the hit with the changing economic factors in today’s world on an after tax basis, and wages will not be rising for years to come; things have changed, so they are now between a rock and a hard place. Those who bought in the past few years need to sell, and rent for a few years, or will be underwater much too long to survive it all.

#136 Silver on 10.05.12 at 4:16 pm

I was told at City Hall that the the Corporation of Vancouvers financial managers do not inspect a single document submitted by BC ASSessment countrfeiting operation Corporation for the property tax bill that you receive as a bill for your QUIT RENT.

I repeat.. they do not inspect a single document for accuracy period. A complete abandonment of budget safeguards and responsibility by the Citys overpaid Financial Officer.

Silver

#137 jim on 10.05.12 at 4:26 pm

TGS #115

You know freddy and fanny Mac was profitible when the ponzi scheme was going do. Once the ponzi schemem crashed Freddy and fanny needed a bailout. Everything looks good when the ponzi is going good.

#138 Steven Rowlandson on 10.05.12 at 4:32 pm

Garth the picture says it all when it comes to what people believe about the financial law of gravity.
They think what goes up stays up or goes higher.
If they want to think like that I suggest they all move to the International space station where there is little or no gravity.

#139 jess on 10.05.12 at 4:45 pm

Overseas Cash and the Tax Games Multinationals Play Dealb%k
Oct 3 – “Hoarding cash in tax havens is evidence of the implicit cost of international tax deferral, as companies engage in wasteful tax planning techniques and fail to allocate economic resources in an efficient manner.”

…alternating loans from two offshore entities, one in Belgium and another in the Cayman Islands, during 45-day windows to technically meet an exception for “short term” loans. The subcommittee report explains that a pattern of “continuous lending appeared to be occurring for most of the period between 2008 through 2011.”
====

from 2007 e.g.

By LYNNLEY BROWNING
Published: September 11, 2007

…”The Blips shelters were created to generate artificial losses that were then used by wealthy investors to offset gains in legitimate income. The shelter involved a purported investment component as well as banks, extending purported loans to investors. Blips were marketed and sold around 1999 and 2000 to at least 186 wealthy investors and generated at least $5.1 billion in phony tax losses, according to prosecutors. The Presidio entities made at least $134 million selling Blips

==========
They ask will the tax shelter problem return?
huh …did it leave?

‘Frontline’ corporate tax shelters
http://www.pbs.org/wgbh/pages/frontline/shows/tax/
http://en.wikipedia.org/wiki/KPMG_tax_shelter_fraud

#140 Canadian Watchdog on 10.05.12 at 4:48 pm

#126 xdisciple

“I’ve confirmed that Lino Zambito is Jay Leno,”

Maybe he is, but this guy isn’t.

Mafia kingpin Vito Rizzuto coming home to Canada:

“the Star reported that police were hearing from their underworld sources that Rizzuto might be considering the GTA as his new home base.”

“He was a frequent visitor to the Woodbridge area.”

——

Time to collect the rent.

#141 Smoking Man on 10.05.12 at 4:48 pm

#105 Hawk

Amen.

But take it from Yoda’s mentor(me). Its a tough crowd in here.

#142 Old Man on 10.05.12 at 5:03 pm

#120 Daisy Mae – I will work on your Tax Return for a good dinner, and will show you how to beat the Tax Man with every ‘legal’ trick in the book, as one needs to study the Tax Act carefully, as there are things even they don’t know about. I charge no money and when I sign the return on your behalf they will see the red flag going up, and all will be approved.

#143 B P O E Sales Way Down on 10.05.12 at 5:17 pm

Happy Thanksgiving Day Weekend! Will be a poor weekend for sales, a lot of chatter around the supper table will be about RE in decline. Get you finances in order and prepare for rough water ahead.

#144 neo on 10.05.12 at 5:32 pm

#87Toronto_CA on 10.05.12 at 9:29 am
US jobless rates drop below key 8% threshold, and it’s from people finding jobs not dropping out of the market?

Garth is right, don’t bet against the USA.

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

The household survey had an increase of 873,000 jobs. It surveys 60,000 households and it a very volatile number. That caused the U3 to go from 8.1% to 7.3% even though U6 was unchanged at 14.7%.

The establishment survey which surveys 200,000+ businesses had an increase of 114,000 jobs.

With a GDP of 1.25%, which number seems more plausible?

Quit being so naive.

Quit being so blind. — Garth

#145 Mr Buyer on 10.05.12 at 5:35 pm

#116 rambler on 10.05.12 at 2:05 pm
Real estate has cycles, and just like a stopped watch is right twice a day, Garth if you keep saying real estate will go down long enough, years in your case, eventually you will be right LOL.
…………………………………………………………………..
This is not a cycle. This is a real estate bubble and it is now collapsing. Japan has now experienced 21 straight years of property price decline as part of the collapse of their bubble.

#146 Mr Buyer on 10.05.12 at 5:40 pm

#113 Frank le Skank on 10.05.12 at 1:49 pm
There could be a small window of when the prices decline and when the interest rates go up.
…………………………………………………………..
I do not have time to check your numbers but this small window you are speaking of has lasted 21 years in Japan. Based upon this buyers should not feel any pressure to buy over the next 5 years.

#147 Mr Buyer on 10.05.12 at 5:41 pm

Just to clarify, interest rates have been incredibly low in Japan for a very long time now.

#148 };-) aka D.A. on 10.05.12 at 5:49 pm

It must be Thanksgiving because I sure am seeing a lot of turkeys today.

#149 Mr Buyer on 10.05.12 at 5:56 pm

#105 Hawk on 10.05.12 at 12:13 pm
The prices in Toronto in contrast were around $250K in 1987 and by 2011 which is 14 years later were around $450K which is not even double.
……………………………………………………………
Am I to understand you have just derived proof the Toronto is not in the midst of a massive real estate bubble? I would like to congratulate you on the implied extended period of price increases in Toronto. In Tokyo 1000 years ago houses went for roughly $20 and 1000 years later they go for around 500k. That is an average increase of only (500000-20)/1000 which equals an average annual increase of around $5 a year. So as you can see it is very easy to develop context that can totally eliminate evidence of a bubble. By the way did I mention 21 STRAIGHT YEARS OF PROPERTY PRICE DECLINE during the collapse of the now non-existent Japanese real estate bubble.

#150 City that smells like it sounds on 10.05.12 at 6:05 pm

Is Regina immune from the correction like everyone says?

Why would it be? — Garth

#151 Mr Buyer on 10.05.12 at 6:09 pm

I would also like to add that the 21 STRAIGHT YEARS OF PROPERTY PRICE DECLINES in Japan during the collapse of the real estate bubble have been experienced across Japan with the exception of a few markets that have not even come close to recovering bubble level prices.

#152 old gringo on 10.05.12 at 6:12 pm

#44.
Having lived many years in Victoria, both on Dallas Road and The Uplands, we have never enjoyed and lived as well as we do in Mexico. All is not rosy on “the island” as the economy is about to pull the plug on it and down she goes. It’s really not different there then it is in Sask. or Nova Scotia. C’est la vie

#153 jess on 10.05.12 at 6:14 pm

#115 TGS

if the rcmp had to investigate those are tax payer costs…if the originators had to pay for the investigations would they still make liar loans?

CMHC’s approach reflects the premise that, although lenders have a key responsibility for fraud prevention, fraud will be reduced most effectively by CMHC working cooperatively with lenders, and not by penalizing them at claim stage. Accordingly CMHC’s pays 100% of eligible costs on all emili claims, the only exception being instances of fraud where the lender or their staff are involved….

#154 };-) aka D.A. on 10.05.12 at 6:39 pm

The talk in the biz is the high incidence of listings we are having to turn down because the sellers have high price expectations fueled by those REALTORS who are willing to “buy the listing”, as we call it, by telling the seller they can get way more for it than they ever will be able to. Of course the ploy is to list it at such a high price and then hammer the seller with price reduction after price reduction until finally it is where it should be. But where it should be then is lower than had they started out at the right price to begin with. For every dollar you overprice by expect fifty cents less than true market value when you finally do sell.

#155 Nostradamus Le Mad Vlad on 10.05.12 at 6:40 pm

#34 Jay Currie — “Plus, for added fun, we in BC are almost certain to be blessed with an NDP provincial government. And one which will not be in the least “moderate”. Californication proceeds apace.”

Doesn’t really matter who gets in now. Gordo Campbell attended a BdB conf. in ’08 or ’09, and promptly bought the HST on his return (we’re owned by those bloodthirsty PTB now, and there’s nothing anyone can do about it), and that was Gordo’s austerity ticket for us. He’s a paid politico — what else can you expect?

#38 LJ — “If they get the hole dug in time…” — That would be a great place to park the Toronto Maple Weenies in!

#46 Basil Fawlty — “There will be a lot of unemployment and lost tax and fee revenue associated with a downturn in the real estate market.” — Which means there will be a whole lotta new taxes added to replace the lost revenue. If the country splits up into three or four distinct regions, each having their own capital, there will be no need for Ottawa anymore.

#84 Smoking Man — “Skynet is real. NFP. Fudged. Machine just gave Obama the win” — Tight race. K O’Leary predicted Romney by the thinnest of margins, and it depends as to how Soros / Obomba do. China is watching with great interest, and Soros likes Beijing’s way of doing things.

#89 John — “I just hope the feds don’t bail out the over-leveraged, debt-ridden while punishing prudent citizens like myself.” — The feds. wii get their pound or two of flesh any way they can, by hook or by crook. See response to #46 Basil Fawlty above.

#119 Canadian Watchdog — “See what these sociopaths have planned for your kids future.” — I would hazard a guess that that is what is already underway, that adults and kids (sheeples) are already being dumbed down by various acctions (random mass killings in the US, wars happening all over, etc.

Nothing any of us can do about it, except to take care of ourselves, those around us and those who need help.

#130 truth hammer — “Of course Obama lied….what do you think….thats the liberal game plan….if you can’t debate in the light of day…..cheat.”

Ummm, Tricky Dicky Nixon, Jean Chretien (GST), Harper and Flaherty (Income Trusts) and plenty of others all have one thing in common — they lied while they were in power. Lobbyists and politicos lie. That’s what they do best. They’re here to serve TPTB, not us. We’re expendable. Enuff said.

#134 jim — “Everything looks good when the ponzi is going good.” — Indeed, but everything runs its course, and all good things must come to an end.

#156 Old Man on 10.05.12 at 6:42 pm

#137 Canadian Watchdog – Woodbridge is old hat and the word on the street at Flo’s in Yorkville is he will be hiding out in Richmond Hill. Flo’s is where I take out all my cheap dates for breakfast on the upper outdoor patio when the weather is nice, and the babes get so concerned that all these Italians say hi to me, and say know them not.

#157 TurnerNation on 10.05.12 at 7:17 pm

CIBC just rasied my unsecured LOC rate by 2.5%.
Was prime + 3.75%, now prime + 6.25%.
Joke’s on them it’ll be paid off by year’s end. They’ll not get another penny from me.

Still, a chill for those carrying large usecured LOCs in addition to their other debts.

#158 Hawk on 10.05.12 at 7:18 pm

#138 Smoking Man on 10.05.12 at 4:48 pm

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

No worries about a tough crowd, I just wish people would be realistic in their analysis.

I myself am waiting for a 10 – 15% correction to buy a second house, which I’m hopeful will happen in another 6 months.

If I waited for the 50% crash, that many anticipate, I figure I’d be waiting a long time…….like maybe forever.

But only time will tell.

#159 Denise on 10.05.12 at 7:22 pm

#44 Victoria. Well I live in Victoria, grew up in Victoria & am certainly not rich, nor do I know any rich people. I’ve been watching the RE market in my neck of the woods & prices are going down & most houses are taking a loooong time to sell. The quicker selling houses must be the ones accepting low ball offers, no other explanation, there’s nothing special about them. Funny about people wanting to live here because it’s an island, that precisely why many don’t, especially with the exorbitant ferry fares that keep going up & up & up. Don’t get me wrong I love Victoria & Vancouver Island, wouldn’t live anywhere else, it’s been my family’s home for a few generations, but it ain’t paradise.

#160 Old Man on 10.05.12 at 7:39 pm

Now have a tip for you that are renting which have done in the past. Lets say you have short term deposits with the banksters which are paying you nothing, and that is interest earned that is fully taxable. I have no idea what the market rate is today, and that will all depend on your Landlord.

This will occur just before the annual rent increase, and say what discount will you give for a years rent in advance; they will usually do it, as with cash in hand the Landlord might surprise you, as he can offset that somewhere else; no harm in asking!

#161 Herb on 10.05.12 at 7:50 pm

#133 Silver,

and your point is?

The BC Assessment Corporation’s role, like that of any other assessment corporation in any of the other nine provinces, is to assess the current value of each building and advise municipalities of these assessments as the baseline for property tax levies. There is no potential gain for an assessment corporation, so the risk is inefficiency, not cheating.

Homeowners are advised of their individual assessments, and it is up to homeowners to accept or challenge the validity of these assessments. There would be no point in city officials going out to check property assessments against actual properties, so they cannot be blamed for not doing so.

#162 dv8 on 10.05.12 at 7:51 pm

RE:#85 Bossman on 10.05.12 at 9:24 am

ah grasshopper you now see the conspiracy of banking welcome to waking up

#163 Herb on 10.05.12 at 7:53 pm

#131 Truth Hammerer,

you forgot to include the statement that it’s all the Liberals’ fault.

#164 TNT on 10.05.12 at 7:53 pm

West Vans RE fueled local rag The North Shore News latest edition has a significant article on the 2nd page about the cooling market with a 6.6% drop in housing prices.

The state of denial is lessening, or the cartel is preparing to short the market.

Smoking Man…does that refer to the liver?

#165 Nostradamus Le Mad Vlad on 10.05.12 at 7:56 pm


Gas Rationing in California; National Bank of Canada 4closing homes in America with Cdns. living in them? China “War against China to prop up the US petrodollar?!? I wouldn’t bet against it right now.” wrh.com; 3:31 clip Which of these two are liars? Both is a good answer; Silver Cartel takes an unexpected dump; PayPal No more class action lawsuits against them; Earnings Suck; Ron Paul The reason he had to be stopped (the US Fed), and the US Fed’s QE Infinity.
*
Beyond the Propaganda The real reason the US and Israel don’t want a nuke Iran (but they will have to live with one anyway); 0:45 clip Joe Biden says to raise US$1 tri. in taxes (here too?); American Spy “A senior American spy familiar with America’s domestic spy program warns that the United States is quickly turning into a totalitarian East Germany like state.; DHS criminals? Ohh noooo, they’re federal employees! Conrolling the ‘Net via FF hack attacks; India’s Landless “Many of India’s landless were made landless by Monsanto’s devastating GMO cotton failures, which threw them into debt to buy the GMO seeds, then produced a much lower yield than promised. A quarter million India farmers committed suicide after losing their farms as a result.” wrh.com, EU sides with Monsanto, but Monsanto fails to explain tumors in rats; Ignore the m$m Better yet, ask them where Sadaam’s nookes were hidden. They have all the answers; Wiping Palestine Off The Map; Bill Gates and a load of other stuff.

#166 T.J. BONES on 10.05.12 at 7:58 pm

Sir Garth: Comment: it has been noted, I was in a discussion about the Gateway Pipeline. It was pointed out to me that the Neo-Con’s are creating the largest robbery in world’s history. I said how so? The pipeline will carry vast amounts of oil products out of this country to another country ( USA ) To Texas which has mega large refineries mothballed due to lack of supply. One of these plants could produce all the gas and oil products the entire country of Canada uses yearly, just one! So with that much volume, say the Canadian oil companys just shut down the Canadian refineries. So what do we have, the US with all our resources capacity’s supplying their market first, reducing their country’s cost, but raising our cost and limiting our supply. We will be left with no domestic refineries and no control over the supply. Fits perfectly with Harpers grand vision. It seems not to farfetched. Discussion??!!

#167 Daisy Mae on 10.05.12 at 8:04 pm

#139Old Man

#120 Daisy Mae – I will work on your Tax Return for a good dinner, and will show you how to beat the Tax Man with every ‘legal’ trick in the book, as one needs to study the Tax Act carefully, as there are things even they don’t know about. I charge no money and when I sign the return on your behalf they will see the red flag going up, and all will be approved.

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

Thanks for the offer. LOL But who wants to ‘study’ anything? It’s so complicated the average lay person hasn’t a hope in hell. Back in the fifties the form was a single sheet, front and back…and one slip. Now it’s 4 sheets and 20 slips. Enter a figure here, deduct a percentage there. What a (bad) joke. I have no respect for this system. Quite frankly, it disgusts me.

And don’t get me started on daycare and double incomes…when one income used to suffice. LOL

#168 Mr Buyer on 10.05.12 at 8:06 pm

#155 Hawk on 10.05.12 at 7:18 pm
…………………………………………………………………
Just a little more context here…Tokyo is one of the few markets in Japan that did not endure 21 straight years of property price decline in the after math of the bubble and while it bottomed and prices climbed again they are nowhere near the prices attained during the bubble. Almost every other market in Japan, most of which saw doubling and tripling of property values have endured 21 STRAIGHT YEARS OF PROPERTY PRICE DECLINES (with present property values a fraction of bubble values). Based upon this buyers in Canada should not feel any pressure to buy for the next 2 to 5 years and likely much much longer.

#169 Daisy Mae on 10.05.12 at 8:08 pm

Further to last….

And if anyone wants to contradict…what came first? The chicken or the egg?

#170 Old Man on 10.05.12 at 8:35 pm

#166 Daisy Mae – in life the egg comes first with the hen, and the rooster does his thing, and a chicken is born, as am a farm boy at heart. Now you must know who comes first. That damn rooster woke me up every day in his pen at sunrise yelling at his hens in the barnyard, as had work to do.

#171 Smoking Man on 10.05.12 at 8:39 pm

#166 dasy may

Answer: The machine

Liver is getting a work out tonight .5 past 2.5

Anyone ever try and force themselves to sleep.

That’s what its like try to re write two chapters.

I may never do it. Show down with publisher I’m thinking

They don’t like 911 truth shit, so what it was an inside job. They won’t let me talk about it. My point being small scaraficee to take care of the loones. ;) that’s mohamood. Get my point.

#172 TNT on 10.05.12 at 8:42 pm

@ 166 Daisy Mae

Or the rooster.

#173 45north on 10.05.12 at 9:00 pm

Canadian Watchdog: talking about the United Nations:

See what these sociopaths have planned for your kids future.

nothing good

#174 Gunboat denier on 10.05.12 at 9:00 pm

119 Watchdog – thanks for the info. Is this the stuff they teach in unuversity these days? Hope we dont all have to
take goose-stepping classes.

#175 Canadian Watchdog on 10.05.12 at 9:23 pm

#171 Gunboat denier

Yes this is what they’re teaching universities, politicians et al. Anyone here can go to their local town/city website and they’ll be sure to find reports with themes like “sustainable development” or “sustainable growth” or “smart growth”. These are all ideologies from the UN that have infiltrated government agendas.

Very important topic to follow and educate others on, that is, if you can get their eyes off an iPad or iPhone.

#176 Canadian Watchdog on 10.05.12 at 10:06 pm

#171 Gunboat denier #170 45north

Just to add: Follow Toronto’s new cutie city planner @jen_keesmaat

Here’s her blog: http://ownyourcity.ca/ideas-forum/ and a recent article.

She’s all about urban density, walkability and pushing for tiny little condos. Speaking of which, she just tweeted this article: Marcus Gee: Cities seeing a reversal of the flight to the suburbs

“Suburban life is looking less and less attractive. High gas prices and growing traffic congestion make car commuting a drag. Smaller families have made the quest for the open spaces and sprawling houses of the suburbs less urgent.”

Really? How about growing a garden to save money on food? Having space for kids to play? This is what I mean by the UN’s densification agenda being trickled down into local governments and council members that are starting off with bad ideas to begin with. It is not done in a collusive manner, rather in a way that the institutions control and drive the conversation, leaving less public input into shaping their communities.

#177 Hawk on 10.05.12 at 10:35 pm

#165 Mr Buyer on 10.05.12 at 8:06 pm

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

Mr. Buyer, the point is that every market is different.

Tokyo is one example, we don’t know how much inflation Japanese cities experienced over how much time frame. What we do know is that Japan is a homogenous society, not particularly welcoming to migrants that no one would go there except for business or employment reasons during their boom. Once they lost their boom it isn’t surprising that real estate prices remain low for over two decades.

Markets go through cycles and I don’t disagree that we have reached a peak in Toronto, and will now start to decline for a while.

But unless we have a large chunk of the Canadian population going bankrupt (which is unlikely and certainly not something to wish for either) I seriously doubt that the correction is going to last 20+ years here.

#178 jim on 10.06.12 at 12:11 am

TurnerNation on 10.05.12 at 7:17 pm CIBC just rasied my unsecured LOC rate by 2.5%.
Was prime + 3.75%, now prime + 6.25%.
Joke’s on them it’ll be paid off by year’s end. They’ll not get another penny from me.

Still, a chill for those carrying large usecured LOCs in addition to their other debts.
———————————————————-

Alot of people on the brink of going bankrupt will not be able to handle this increase. Many will have to sell their homes or face losing it all. The flood of listings on an already depressed market will cause a panic as sellers lower their prices in a sellers war. Many borrowed to buy condo’s which are now crashing. Many will go bankrupt in this housing crash.

#179 Silver on 10.06.12 at 1:06 am

#58 Herb

altering a bill of sale value is legal…thats the only document thats needed to determine the mill rate or Quit Rent
and the permit value filed with the city that they don’t use…
lazy f..ks, they should try working instead of counterfiting value on property values
a Bill Of Sale is good starting base point for the Quit Rent… no exceptions on million dollar purchases.
And add in any other borrowings against the property
..and add that to it… tax the Leverage… simple.
That’s the true public cost.
The Real Dollars backed by a Promise To Pay.
Not Counterfeit Fictional Dollars…
I don’t give two shits what my neighbor wants to spend its not my commitment nor should I subsidize his vision of self worth.. pay the the rate on what you promised to pay or go to jail, not some counterfeit number with no real documentation behind it supplied by the Real Estate Boards a commercial venture.
I dealt with four years of out right lies from these people… and they have admitted i can Sue them….
I believe the line was…
Oh My God You Can…. hold us liable for our signature…
… that was the assessment officer and her supervisor…
they now ask for their higher ups to be there and take the heat…
The sweat on their brow was interesting…

Doesn’t take a rocket scientist to use Real Numbers…
1+1=2 simple… not the cluster f…. the Assessment Authorities Counterfeit into existence.
oops that would kill the market for new properties wouldn’t it. Lets transfer those costs to the long term residents by altering their Equity Documents value.
creating money and counterfeiting it into existence…
do you work for they public service…

Yes you are right… going out and checking the Claimed New Value would require them to do some actual work instead of just making numbers up from real +estate board documents… at their desk.
… and the appeal process is a rigged kangaroo court.
the Appeal Board Chair had a space in the Assessment Councils office… no conflict there….

what a bunch of clowns with power… they would be fired by any honest company in a minute..

Silver

Silver

#180 jess on 10.06.12 at 11:49 am

134 jim
fannie and freddie 188b. provided by taxpayers 46b. in dividends

http://online.wsj.com/article/SB10000872396390443328404578022640377038654.html

http://pdfserver.amlaw.com/tal/FreddieClass.pdf
…” failed to improve the complaint to show that Freddie Mac and its executives had misrepresented the company’s financial footing and depth of involvement in the subprime…

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

“Fannie and Freddie have asked banks to repurchase $66 billion in mortgages made between 2006 and 2008, according to an analysis of federal filings by Inside Mortgage Finance, an industry newsletter. ”

http://www.crainscleveland.com/article/20121004/BLOGS03/121009895

#181 live within your means on 10.06.12 at 11:55 am

#130 truth hammer on 10.05.12 at 3:44 pm

#131 truth hammer on 10.05.12 at 3:52 pm

…………..

Shouldn’t you be spending your time posting on the National Post or the Sun News Network (aka Fox North Network) along with Ezra.

#182 live within your means on 10.06.12 at 12:18 pm

#164 Daisy Mae on 10.05.12 at 8:04 pm

Yeah – I had to go to an accountant last year. I’ll try and claim his fees in 2013. I’ve always done my DH’s & my tax returns but I got confused with ‘capital gains’. I went to H&R Block once in the early 70’s as I had worked overseas.

#183 jess on 10.06.12 at 12:27 pm

William K. Black.Assoc. Professor, Univ. of Missouri, Kansas City; Sr. regulator during S&L debacle
Posted: February 25, 2009 10:31 AM
The Two Documents Everyone Should Read to Better Understand the Crisis

The FBI has been warning of an “epidemic” of mortgage fraud since September 2004. It also reports that lenders initiated 80% of these