One hundred

IMF: beware Canada's housing 'threat'. Story here.

The next hundred days could be the most pivotal in years for real estate. They’ll show one of two things. That the sales collapse now taking place in most of the country was just a silly overreaction to F’s big mortgage changes and new banking regs. Or, that housing is screwed.

Realtors (naturally) by and large fall into the first camp. Like the boss of the Vancouver cartel below), they maintain there’s a ‘standoff’ taking place between buyers and sellers. Vendors are wisely resisting dropping prices, they say, while opportunistic lurkers smell blood in the water and wait for values to fall along with sales.

They say F & the peckerettes went too far in coordinating an attack on housing by the Department of Finance, the bank regulator and CMHC. That probably knocked 20% of all potential buyers out of the market, creamed million-dollar homes and paralyzed condo sales. “A breather,” they call it. Prices can’t go up 10% a year forever, so this is just a nice little pause. Take your time, savour the choice, and enjoy a buyer’s market. But don’t wait.

Of course, that’s probably the worst advice since your dad told you to sell your mutual funds in March of 2009. Or your mom said to marry the nice boy with the psych degree, instead of that electrician.

Odds are the next 100 days will prove without a doubt that the Era of the House is kaput, at least for a few years. I have no doubt we’re on our way to that national price correction of 15% I’ve been blathering on about – which means 0% in places like Fredericton and up to 40% in Vancouver and Victoria. And that won’t be the end, either. Expect real estate to flatline at best or slowly melt for years after that.

Central to this belief is deleveraging, which will be utterly deflationary for housing. People with crazy stupid debt levels (like your family members, and everyone at work) have no choice but to spend the next decade or so trying to pay some off. Today the savings rate is 3.6%, which is lower than last year. Wages gains are running 1% less than inflation. The debt-to-income ratio (on average) is 152%. So figure that one out.

Meanwhile credit is harder to get. The shorter amortization and death of cash-back mortgages mean fewer virgins can borrow, stalling potential move-up buyers. New HELOC restrictions are locking in equity which cash-strapped homeowners might otherwise take out and spend. And just wait until the Bank of Canada starts piling basis points onto its overnight rate in 2013. Higher VRMs will suck off even more disposable income.

So tell me. How will housing sales and prices start marching higher again next Spring?

Besides, the downward trajectory in sales this autumn has momentum. Toronto deals are off by almost a quarter, and Vancouver by a third. Condos are a disaster. In the GTA new home sales have collapsed 65%, according to the builders. Supply is quickly overwhelming demand, and that will multiply dramatically after Christmas, as new condos and resale homes flood in.

As you know (apparently realtors don’t), prices follow sales. When sales surge because buyers perceive value, prices rise as more buyers pile on. Demand breeds demand. Then, when potential purchasers balk at paying too much, sales crumble and eventually prices adjust. But the lag is huge. Vendors stick with their valuations since most have hugely unrealistic expectations at the end of a boom.

That’s exactly where we are now. In a hundred days nobody in the media will be talking about sales volumes any more. They’ll be gobsmacked by prices.

Realtors also underestimate buyers. Sure, some will be lured into a ‘buyer’s market’ when prices dip 5% or 10%. They’ll come to resent this bitterly. But most will hold out, afraid to grab onto a falling market, reluctant to go against the herd, or astute enough to know that what went up 70% in the last few years will likely correct by half that amount.

Finally, mortgage rates will be rising. No, we don’t need a Bank of Canada upchuck to boost the price of a home loan. The bond market can do that all on its own, and will. As equities gain ground based on continued central bank intervention, improving labour markets, the likely Obama win and still-decent corporate profits, money will flow to stocks from bonds, depressing prices and raising yields.

So, a hundred days of change. Ready?

You can buy now and gamble. Or, list in March and pray.


#1 NewWorldPartyDotOrg on 10.08.12 at 8:00 pm

At the peak of the US Housing Bubble, sales volume plummeted before prices followed.

Many Canadians think that Canada’s Housing Bubble will not crash like in the US, Spain, Ireland and Japan. Wishful thinking. Every reason they give can be argued:

#2 unbalanced on 10.08.12 at 8:01 pm

Thanks for all the hard work you do.

#3 Victor on 10.08.12 at 8:02 pm

“Of course the condo bubble in Toronto is on my mind, but we’re in the early beginnings of it,” Gehry said on Oct. 1, at a press conference about the project at the Art Gallery of Ontario. “The culture of the city and the condo boom has nothing to do with me. That’s your problem.”

Even as the market is softening, a record 224 condo projects with 58,995 units are under construction in Toronto, according to the most recent data from RealNet Canada Inc., which tracks housing across the country. More than a quarter of these are in the same area as the planned Mirvish, Gehry project along King Street, west of the city’s financial core, according to RealNet.

Flaherty criticized “continuous building, without restriction” of condos as the central bank signaled record consumer debt and the chance of a sudden housing correction are major risks to the economy.

#4 Grim Reaper/Crypt Speculator on 10.08.12 at 8:06 pm

Wi’d a French accent..I’m Tird !!!!

#5 woper_holic on 10.08.12 at 8:09 pm

RIP realturds, builders and mortgage d-bags.

#6 TRT on 10.08.12 at 8:22 pm

Agreed Garth!

The next 100 days are critical. I’m keeping a close eye on daily stats, immigration propaganda, and my neighborhood listing’s.

We should know by Feb 1. However, if your prediction of a 40% correction in Vancouver happens, I think Fredricton will feel it too.

#7 T.O. Bubble Boy on 10.08.12 at 8:25 pm

… and if etch-a-sketch wins the election, and the austerity recession hits the U.S. (and bond yields don’t rise)?

We’ll all be saved by the millions and millions of jobs from the Keystone XL pipeline, right?

(sarcasm off)

#8 kenken on 10.08.12 at 8:27 pm

“sales collapse” … “housing is screwed”
wow… some change in the terms used in this blog!
so how much are we saying now?
all i can say is that this will take a long long time to materialize … yearS !!!!
Happy Thanksgiving ppl!

#9 blase on 10.08.12 at 8:33 pm


Why do you say Fredericton won’t have a correction when prices there went up based on all of the factors that you mention have now been curtailed by F & the rest? I don’t believe that people are different in Freddy and didn’t take out 40 year mtgs, nothing-downs, Helocs, etc. I don’t see how housing prices wouldn’t go down there over the next couple years.

#10 TurnerNation on 10.08.12 at 8:36 pm

Aready here. As mentioned CIBC hiked my unsecured LOC’s rate by 2.5% last week. Others will follow.

“Banking can be this uncomfortable. You are poorer than you think.”

Those that are carrying 50-100k of home reno or
buying-binge LOC debt just got a rate hike. Notwithstanding Blog Dog Carney’s indecision.

#11 TurnerNation on 10.08.12 at 8:37 pm

>Immigrants will save housing?

This study says the recent immigrants are earning only 60% of our wages…

“The authors of a recent report from TD Economics (co-authored by the bank’s chief economist, Craig Alexander) found not only that immigrants earn far less than the non-immigrant population, but that the trend is going the wrong way. A male immigrant who arrived in the late 1970s earned about 85 cents for every dollar earned by a Canadian-born citizen, the authors found, and that gap closed to 98 cents within 25 years. Ever since 1995, however, immigrants have fallen behind, despite the fact that more recent immigrants tend to have better educations than the ones who came before them.>>Those who landed between 2000 and 2004 earned just 61 cents on the dollar and have been unable to significantly close the gap. “The simple but sad truth is that many new immigrants cannot hope to close the earnings gap in their lifetime.”<<"

#12 Mark W on 10.08.12 at 8:41 pm

I hope you are wong about these real estate predictions.

#13 Santana on 10.08.12 at 8:45 pm

Whats all this crap about ways that the government can step in in case real estate crashes (as predicted by a small percentage of economists) ????
WHat a piss off to those who didnt buy with the herd!!!

#14 Jay Currie on 10.08.12 at 8:47 pm

You’re right about the next 100 days being critical. However, March itself is likely to tell the story about the sell pressure.

Right now we have wave 1 of mainstream media noticing that maybe, just maybe, there might be a bit of a bubble in a few overheated markets. That story can be run from now until the dead zone of Christmas.

And while it is running people are going to be making “the decision” as to whether to list. Listing in January or February in most of Canada is a bit unwise. But March is always attractive.

For a real crash (and 40% is a crash) and a long melt to occur the market will have to be flooded with listings. And listings from people who have gone from “it would be nice to sell and get the pile now that the kids are gone” to “Dear God, we have to get out right now or we’ll be stuck with this house forever.”

That is when realism is going to roll back into prices.

#15 Not 1st on 10.08.12 at 8:50 pm

“So tell me. How will housing sales and prices start marching higher again next Spring?”

Same way there is a consumer led economic resurgence waiting for the U.S. and Canada – There isn’t going to be either.

#16 eagle eyes on 10.08.12 at 8:52 pm

Robert Shiller says that Canada will be different than the U.S. when it comes to the real estate bubble.

#17 Victor on 10.08.12 at 8:53 pm

There were a record 196 condo projects under construction in the Toronto census metropolitan area at last count (the end of June). Sales of newly built high-rise units downtown this August were about half what they were a year ago, according to RealNet, a real-estate research firm. Prices are slipping – in August they were about 4 per cent lower than the year before – and many economists believe that a glut is forming that will cause prices to drop further.

According to Urbanation, a market research firm, the number of unsold condo units in the Toronto area in June hit a high of 18,123 (a figure that includes projects that are not yet completed). “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,” economists at Bank of Montreal wrote this week.

“It’s an extremely crowded market,” said Urbanation’s Ben Myers. “They have to somehow differentiate themselves from the competition if they want to make sales.”

#18 Suede on 10.08.12 at 8:58 pm

Happy Thanksgiving!

We live in interesting times.

#19 Jsan on 10.08.12 at 8:58 pm

The great worldwide Real Estate unwind continues.

Everywhere that Bubbles grow, they all come crashing back to earth (or back to reality). Asset bubbles and their eventual yet imminent implosion is such a simple to grasp, 100% repeatable phenomena it still surprises me how some people still always fall for the “It’s different here” or “its different this time”? In the category of justifying absurd house prices, has there been a bigger sucker than Vancouver? Toronto is probably close.

I guess the one thing that all asset bubbles have going for them is there is always a new generation that does not understand them or even know they exist until they witness the carnage around them firsthand. You would think with the housing Bubble implosion just across the border, Canadians would have been more cautious?? And very typical with every housing crash, you can always find the realtors trying to drag a few last minute suckers in while they still can. That industry has NO SHAME!!

Netherlands House Price Crash Underway; Will France Follow?

#20 Rainman on 10.08.12 at 9:13 pm

Hey Garth – another good blog, yes the next 100 days will be interesting.
Over at my parents this weekend for thanksgiving and once again tried to convince them in a subtle way that they should sell one or two properties. They have their own and three investment properties. They both said they just wanted to wait it out and see what happens. Both are close to 70 and I think they will be waiting a long time. Not sure what else I can do? it is already too late really. Frustrating!!!

#21 Pig without Lipstick on 10.08.12 at 9:18 pm

Thank you.
I don’t say it often enough but I am very grateful for this form and your stubborn insistence on warning listening Canadians about what the future holds. While our means are modest, we are undoubtedly much better off having heeded your advice about the dangers of real estate, than those we know who went the other way and opted for a larger home financed by more debt.

#22 TNT on 10.08.12 at 9:20 pm

Wait and see what comes out of the duel Canadian-Chinese cross border investigations.

Chinese officials are concerned about the amount of money that has found its way into the housing market.

Immigration consultants are being monitored.
That is the reason for the stalling in the immigration policy.

If you were/are a buyer make sure all the paperworks in order because the audit is massive.

#23 Timbo on 10.08.12 at 9:22 pm

#13 Santana ,

Your glass is half empty.

Reality is that something will be done to try and slow or limit the impact of the fall in home prices. Political inaction with 70% of the populace affected would be a disaster both economically and politically. It is not fair but it is life.

What you have to remember is that if your out of debt your money is fluid and can react to changes. Just be happy it keeps up with inflation and wait for the bottom. Cash becomes king.

“Spanish business people, upper middle class families and their loan guarantors, typically parents of first-time buyers, now account for 60 percent of foreclosures in Madrid, according to AFES, an association that advises homeowners facing repossession. Three years ago, 80 percent of foreclosures were on the homes of immigrants, usually the first to lose jobs and fall behind on loan payments in a souring economy. They now comprise 40 percent of the total, according to AFES. ”

Your castle is not safe…….

“Some of the biggest decreases in prices of resort properties were recorded on the island of Capri, the ski destination of Cortina D’Ampezzo and the village of Positano on the Amalfi coast, where prices fell 5.7 percent, 6.4 percent and 7 percent respectively, today’s report showed. ”

Italian resorts are getting hit? Sell my shares in olive garden post haste!

#24 so it begins... on 10.08.12 at 9:25 pm

In the month of september sales for SFD homes under
1 million (buyers who most likely did not put 20% down and required CMHC insurance) was down 24% y/y.
SFD Homes over 1 million down only 5% y/y in sales.

#25 KG on 10.08.12 at 9:34 pm

#16: good one.
Shiller: ‘in fact it’s worse in Vancouver’.

#26 $$$BPOE#1 on 10.08.12 at 9:39 pm

Obviously this is the pause that refreshes. The World is coming to Vancouver. The World pays in CASH in FULL. Onward and upwards folks. Vancouver Mayor is lamenting the Community fabric is disintegrating due to unaffordable homes. Unaffordable for Canadians but the creme de la creme don’t care about Canadians. The Creme knows Vancouver is drit cheap at these prices. Thats why its called BPOE. See you in the Winners Circle

#27 hoppe1 on 10.08.12 at 9:39 pm

Too much inventory on the market in Nanaimo. 12 months of inventory on my 2nd rental. I’m selling. Dropped it 5% 3 months ago, now another 5% just this week, hoping I can get ahead of this. Thank goodness for the renters covering the mortgage. Either hang on for a 5 year recovery, or jump now. GeronimoOOOOO!!!

#28 $$$BPOE#1 on 10.08.12 at 9:41 pm

Shiller is irrelevant. Over a half decade ago he said Vancouver was going down. Now a few short months ago he says it could keep going up
#16 eagle eyes on 10.08.12 at 8:52 pm
Robert Shiller says that Canada will be different than the U.S. when it comes to the real estate bubble.

#29 T.O. Bubble Boy on 10.08.12 at 9:42 pm

$1.25M for a property where the lot isn’t even created yet (house needs to be torn down, trees removed, etc.):

Are people too lazy to build McMansions now? They just flip the lots instead?

#30 m on 10.08.12 at 9:43 pm

‘Today the savings rate is 3.6%, which is lower than last year.’

actually, latest estimate is 4%, higher both year/year and quarter/quarter.

StatsCan says Q2, 2012 rate is 3.6 per cent, -0.3 from Q2, 2012. But thanks for wasting time. — Garth

#31 Ralph Cramdown on 10.08.12 at 9:49 pm

Reality is that something will be done to try and slow or limit the impact of the fall in home prices.

So… what? Cutting interest rates isn’t much of an option right now. The US experimented with a $8k grant to first time homebuyers, then extended it to all homebuyers IIRC, and you can see the brief dent it made in the downward march of prices if you squint at a chart.

Guaranteeing the debts of, or bailing out banks is downright cheap compared to writing a five figure cheque to millions of homeowners. Even easing mortgage qualifying wouldn’t do much, as most people who could make the monthly are already owners. So what’s your big idea?

#32 Keith in Calgary on 10.08.12 at 9:54 pm

Well, seems to me that the banks here are starting to freak out a wee bit…….

I guess some of them have realised that we’re not richer than we thought.

Today in our mailbox I found a flyer from PC Financial advertising how mortgage holders could reduce their principal by changing to bi-weekly accelerated payments, paying an extra $1,000 per year, paying an extra $100 per payment….etc…etc…

BMO has commercials with that stupid couple in their blue room being told that with “a new fixed rate, amortization and payment plan theri monthly costs will go down and they’ll be mortage free faster”…..LOL !!!

Mu how the programming has subtely changed…………

#33 TD on 10.08.12 at 9:58 pm

I’m hearing a lot of complaints from Albertan’s about the cost of soaring utilities, the most expensive in the country, when they literally come out from our back doors! Since the conservative government deregulated the costs of utilites prices have soared beacuse they raised delivery fees by 400% to keep profits high, and large bonuses for the CEO of the industry. This is a huge problem for Albertans since we are so in debt with massive mortgages & lines of credit! I think this will really effect the realestate market as families struggle to pay gas, power and water bills. I know of old widowed ladies living in the Westmount neighbourhood who must wear a winter jacket or heavy sweaters and double slippers so the can keep the house extra cool in the winter because they can’t afford food & the soaring utlities since the conservative goverrnment derruglated everything to make investors really rich. If yo live in Loydminister which the town is on the Saskatchewan border, abd you live on the Alberta side, you actually can pay over$300 more amonths in the winter for utilities!

#34 Boombust on 10.08.12 at 10:00 pm

“Well, perhaps the universe is unfolding as it should”.

Right, Justin?

Ha ha…

#35 Salacious Crumb on 10.08.12 at 10:06 pm

#33, TD

You’re right, the costs to power a home in Alberta are outrageous. It’s crushing seniors and young families alike. This will be a factor in future affordability in this region.

#36 TNT on 10.08.12 at 10:11 pm

#28 $$$ BOPE#1

That’s not true Shiller recently said the opposite.

#37 McLovin on 10.08.12 at 10:12 pm

DA thanks for the data. Can you break out the % drop from the high’s for apt, detached and attached?

Thank you.

#38 m on 10.08.12 at 10:16 pm

‘Today the savings rate is 3.6%, which is lower than last year.’

actually, latest estimate is 4%, higher both year/year and quarter/quarter.

StatsCan says Q2, 2012 rate is 3.6 per cent, -0.3 from Q2, 2012. But thanks for wasting time. — Garth

no, the household saving rate in 2012 Q2 is 4% and the above is indeed correct. The link doesn’t seem to work anymore unfortunately, but actually look it up yourself – it’s free – cansim Table 380-0072 Current and capital accounts – Households. Latest estimates were released just last week.

No stat here is unresearched. — Garth

#39 LuckySometimes on 10.08.12 at 10:21 pm

Globe & Mail is totally in cahoots with RE industry.
According to this article by Sydnia Yu: Trinity-Bellwoods row house a quick sell, it was sold in 5 days for $100 above asking price of $599,900.
But I found that it was in the market Oct 19, 2011, for the same price.
My comment to G&M pointing this out lasted all of 2 seconds.
Perhaps my opening statement: “Sold in 5 days to a greater fool” must have been blocked like some 4 letter words.

#40 Timbo on 10.08.12 at 10:22 pm

#31 Ralph Cramdown

There is no answer because this is unstoppable unless you have either a huge increase in wages or a debt forgiveness on a grand scale.

Unfortunately, due to politics, if you show your not trying to limit the damage your voting support will collapse. They will try something but it will not work.

#41 Bo Xilai on 10.08.12 at 10:29 pm

The depth of ignorance of the real estate cabal is easily apparent… Check this interesting pronouncement by the President of the Victoria Real Estate Board:

“Interest rates are also holding, but should they increase by as little as 1%, that would negate a 10% drop in purchase price. People shouldn’t wait for prices to drop, because we never know when interest rates will be increased to stimulate the economy.”

If the Victoria Real Estate Board is going to engage in scaremongering, they should at least get their macro-economics straight…

#42 Bo Xilai on 10.08.12 at 10:32 pm

#26 $$$BPOE#1,

Whistling past the graveyard, are we?

Keep you game face on… I wouldn’t want facts to get in the way of your delusions.

#43 Soylent Green is People on 10.08.12 at 10:35 pm

Obama or mitt it really does not matter both corporate owned


Nadine Lumley Why I’m Suing Barack Obama

It is a catastrophic blow to civil liberties.

The act authorizes the military in Title X, Subtitle D, entitled “Counter-Terrorism,” for the first time in more than 200 years, to carry out domestic policing.

With this bill, which will take effect March 3, 2011, the military can indefinitely detain without trial any U.S. citizen deemed to be a terrorist or an accessory to terrorism.

And suspects can be shipped by the military to our offshore penal colony in Guantanamo Bay and kept there until “the end of hostilities.”

The oddest part of this legislation is that the FBI, the CIA, the director of national intelligence, the Pentagon and the attorney general didn’t support it.


#44 Devore on 10.08.12 at 10:36 pm

“Real estate is supposed to be a secure investment.”

There’s all kinds of wrong in that statement.

#45 Soylent Green is People on 10.08.12 at 10:37 pm

So there are differences between the parties: about how enthusiastically the lemmings should march toward the cliff.

We could be moving toward a devastating war. Straightforward ways exist to overcome this threat, but they will not be taken unless there is large-scale public activism demanding the opportunity be pursued. This in turn is highly unlikely as long as these matters remain off the agenda –> not just in the electoral circus, but in the media and larger national debate.

#46 TRT on 10.08.12 at 10:37 pm

We will keep your wages low.

We will increase rents through demand.

10,000 Irish coming. Won’t be counted in official stats because they are semi-permanent. But they will need rental accommodations.–canada-woos-irish-immigrants-in-search-of-jobs

#47 LuckySometimes on 10.08.12 at 10:40 pm

Please delete my previous comment, G&M added my comment after further consideration I guess

#48 TRT on 10.08.12 at 10:41 pm

#11 TurnerNation

said : “>Immigrants will save housing?

This study says the recent immigrants are earning only 60% of our wages…”

That’s cause the other 40%+ is earned overseas…no way of Cdn gov finding out..

#49 LuckyRenter on 10.08.12 at 10:53 pm

Of late, developers have begun to do that by experimenting with practical incentives, such as free furniture or a year without maintenance fees or property taxes, which are proving to be more of a draw for buyers than the thrill of living near key sports or cultural sites.

A couple of buildings in the city have been offering as much as $30,000 worth of free furniture, some of it chosen by designers to take the hassle out of shopping. It’s an appealing idea, but not one that will woo people who already have their own furniture, agents said.

The heavy use of incentives to sell units may be a sign that developers are sensing trouble.

Developers are in despair!! Sorry guys but the train has left the station……. 6 month ago!!

#50 Hawk on 10.08.12 at 11:16 pm

#20 Rainman on 10.08.12 at 9:13 pm


If the properties are owned outright, there is no need to sell. Sit tight and collect the rent, there will be a temporary downtown, which will reverse itself in some years. Even Mr. Turner believes that the market will reverse itself after several years.

#51 mississauga xyz on 10.08.12 at 11:18 pm

to m, re saving s rate, here is the link

#52 B.Anchor on 10.08.12 at 11:26 pm

Just when we were all wondering where BPOE went….. I thought that the cash paying “Pro’s” were going to step in and sweep up everything if prices ever dared dip by so much as a tiny 5%, thus preventing prices ever slipping in Vancouver. I hope they have a lazy few billion between them to shore up the wall of debt that is crashing down on that market. Good luck with that. Best grab a stiff drink to wash down that large slice of humble pie coming your.

#53 TNT on 10.08.12 at 11:27 pm

Trolls Trolls dumping out their souls.
Thinking your pissing off some people Garth.

#54 Onemorething on 10.08.12 at 11:38 pm

Sales Volumes
Then Pricing
Then Lowered Expectations
Then Denial
Then -30C in Vancouver!

Sellers, loose 10% today or 50% later! Buyers hold as there are not many in the market. I like it best when buyers are 1 in 50!

I like it when sellers offer all the toys in the garage + eat 2 points on the new buyers financing!

Garth time to put your denial cycle chart back up, refresh old and new dogs!

#55 dv8 on 10.08.12 at 11:53 pm

Ultimately printing money will make the problem worse (you can’t solve a debt problem with more debt), but governments in the US and around the world simply aren’t prepared to let nature run its course.Which of course is deflation ,this is bad for banks so they encourage governments to print at the expense of taxpayers, why ? because those that stand closest to the printing press benefit the most ,they (central banks) buy bonds with freshly printed money that yields more than the fed rate at .25% practically free money .Why would they loan to people when the can buy bonds with money at tax payers expense that is a for sure bet knowing the fed will print 40billion per month till the currency is worthless ……..think printing doesn’t destroy the purchase power of currency ? check history I know I’m from Hungary , 2 hyperinflations later in less than 80yrs and my own family losing wealth because we were cash rich but commodity poor I’m not gonna go through a 3rd round .I have been buying gold for 30 yrs and proud of it because paper promisary notes mean nothing to me when the currency they are denominated in is worth nothing . DOW 50000 here we come I can just see all the investors drinking dom perignon not even realizing that the currency is worthless but my gold will always be worth something more . PS central banks buying GOLD hmmmmm think they know something??? you guys be the judge I’m sure they know how the history plays out for the future

“Printing money is the last resort of desperate governments when all other policies have failed.”

#56 jesse on 10.08.12 at 11:54 pm

I love the disagreement between buyers and sellers line. Hahaha. If you’re a buyer or a seller, there is no disagreement because you just signed a contract that says you, gasp, agree on terms with the other party.

There’s a disagreement between people TRYING to sell and people THINKING ABOUT buying. Sorry about the semantics but it’s kind of “fundamental” to what’s going on these days and it serves people well to understand the difference.

#57 };-) aka D.A. on 10.09.12 at 12:16 am

#37McLovin on 10.08.12 at 10:12 pm
DA thanks for the data. Can you break out the % drop from the high’s for apt, detached and attached?

Thank you.

Here are the unit volumes and average sale prices for both Single Family Residential (SFD) and Strata for each of the years since and including 2007 to this year to date in the Central Okanagan sub area of the Okanagan Mainline Real Estate Board.

SFD 3,222 units avg price $508,653
Strata 2,008 units avg price $298,995

SFD 1,951 units avg price $541,730
Strata 1,240 units avg price $319,902

SFD 2,151 units avg price $488,058
Strata 1,347 units avg price $296,602

SFD 1,952 units avg price $526,746
Strata 1,146 units avg price $294,208

SFD 1,946 units avg price $506,249
Strata 1,187 units avg price $290,883

2012 YEAR TO DATE AS AT October 10, 2012
SFD 1,697 units avg price $502,372
Strata 1,069 units avg price $282,478

As you can see, for all intents and purposes unit sales volumes and prices have been essentially flat-lined for the last more than four years.

FYI the SFD unit sales in 2000 was 1,857 and the average price then was $202,761. Yet further back in 1996 the SFD unit sales volume was 1,966 and the average price then was $175,400. Further back than that we were running a different database system which would require I go back into the archives to obtain reliable data from an inquiry. I think though that you must understand where I am headed with these last figures though, right?

2007/08 was the bubble. Yes I said ‘bubble’ and it was just that an unsustainable ‘bubble’. It needed to be popped and it was – more than four years ago. That is long past and what we have today is not a departure from norm but rather a return, more than four years ago, to it. Yes prices are high but as long as these sales volumes continue we can expect, all things being equal, they will continue to hold.

Oh and… you’re welcome.

#58 THE CELIAC HUSBAND on 10.09.12 at 12:16 am

Take a breather. Timeout. A Sabbatical.
Come on over to Europe for the winter. Take some time to clear your head.
Either way, you’ll be fine until March he says.
But maybe, just maybe you see an opportunity over here such as ourselves.

#59 Grim Reaper/Crypt Speculator on 10.09.12 at 12:24 am

Where is CrowdedElevatorFartz?

Can’t see any sign…

Should I light a match ?

err…maybe not.

#60 Realtors are in an all out panic on 10.09.12 at 12:24 am

Fellow bloggers go out there are tell everyone about Garth and greaterfool . People need to be educated of the current storm as out of work and worried realtors lie for money to pay their BMW lease that they can not afford any longer. I know of two realtors who will lose their houses if they can not make a sale soon. Many realtors are in a panic like smokingman who know that the housing crash of 40% is going to hit vancouver and many parts of the GTA including 416. Go out there and tell everyone that the housing market is set to fall and fall hard. It’s going to be a nasty crash realtors , a nasty crash!

#61 Mithan on 10.09.12 at 12:25 am

I don’t expect much trouble in sask for a couple more years regardless. Still, prices here are just too high. 350-400k for 40-50 year old homes in Regina and sktoon are crazy.

#62 };-) aka D.A. on 10.09.12 at 12:26 am

Oh and you noticed how, in those numbers there is further proof, price follows volume up and down… follows not leads follows. Where do you think we might be headed?


last year for the same year to date as those provided above the numbers were

2011 January 1 to October 10
SFD 1,562 units avg price $507,469
Strata 965 units avg price $294,689

Clearly this years volume, despite a 20% decrease in September, is up. Of course I don’t have a crystal ball like so many around here but those numbers suggest to me something I’ve always found more reliable. The spring 2013 market will tell us one way or the other – but nothing before especially not the next 100 days.

#63 Michelle on 10.09.12 at 12:36 am

Yes TD,
What you said is soooo true. The conservative Government of Alberta really screwed everyone from single people to families and seniors on set incomes. Most seniors live on the same income they did in the 90s and we’ve seen natural gas prices soar with electricity costs under the conservatives by 300-400%. I assume that is probably part of the reason we have the Highest Foreclosure Rate in Canada here in Alberta. The Foreclosure rate in Alberta hit 1% which is a record foreclosure rate in Alberta. Even in the late 1980s when we had mortgage interest rates at 18% and the price of oil collapsed from $70 a barrel to $20 in one day we never hit 1% foreclosure rates.

#64 Michelle on 10.09.12 at 12:50 am

I found a good article on Alberta Foreclosures that talks about more problems than just the outrageous deregulated utility rates in Alberta that’s eroding life & housing affordability in Alberta.

I wonder if the Conservative Government thinks Albertans should keep getting more into debt each month, or completely use up all their savings( to be able to get by) like The Provincial Government is doing here in Alberta! Théy can’t balance a budget at $90 a barrel!

#65 Nostradamus Le Mad Vlad on 10.09.12 at 12:58 am

Just think . . . If the Indians had given the Pilgrims a donkey instead of a turkey, we would all be having a piece of ass now!
“But most will hold out, afraid to grab onto a falling market, reluctant to go against the herd, or astute enough to know that what went up 70% in the last few years will likely correct by half that amount.” — In this case, one should try to Always Look At The Bright Side Of Life.

If a home went up 70% in value, then dropped 35%, that is still 35% more than what it was worth, so if a family sells their home, at least breaks even after all moving, legal and other costs have been paid, then rent and downsize one’s expectations of life, would that family not be better off in the long run?

I would be quite content to live that kind of life, not relying solely using our home as a retirement plan.
#191 sukh hayre, CGA on 10.08.12 at 8:05 pm — Thanks for getting back, and I appreciate the effort. The Chinese are smart. I know, ‘coz I married one!

Your question in #193, “So, who is the bigger idiot?” to me is quite simply answered “The higher one is, the harder one falls”.

You (and John) are correct in saying this giant ponzi scheme must eventually end, but it will be the fallout which hurts average / poor people more than anyone else.

For now, the rich are quite capable of taking care of themselves.

8:50 clip Spain. Out of Chaos, Order (NWO) and 6K police guarding Merkel for six hours; 3:49 clip US families trying to make ends meet at foodbanks. Wonder if Cdn. families are this badly affected? Joseph Stiglitz The American dream is just that, a dream, not reality; EZone Rescue Fund Note the word ‘permanent’ in the first line, and Binding Contracts plus plus EED European Economic Depression; George Osborne (UK) See rest of headline.

Bristol, UK Alternative currency to the pound; Inflation Number Choose a number, any number; 4:39 clip The UN wants a global tax; Russia – Iraq Five bln. defense pact; Presenteeism Psychology for staying in the work force — don’t be sick; Marks & Spencer Doing well back ‘ome, and Jaguar workers got a 10% raise; Toyota sales in China down 40%; IMF Global slump? No, things are great! Plus IMF ECB may have to lower rates; US Cities Possibly Cdn. cities as well; TFSA time with energy stocks; Georgian Election blow to US oil companies (as well as Venezuelan election); Lagarde List Two dead by suicide? Sssuurree; One algorithm is baffling.
WW3 Preparations; NAmerica on drugs and RE? Try mass casualties; GM Foods, Depop. and Prop. 37 Add on Agenda 21 and we’re almost there to a complete wipeout of civilization! Turkey This is why they have suddenly become so pro-west; Don’t answer the message Read further; Hindu Temple “The most spectacular archaeological find of the 21st century — billions in gold and jewels uncovered in the secret sanctums of a centuries-old Indian shrine — will soon be revealed to the public.”; 4:45 clip The end of US rule in Hawaii? Oil and Natural Gas Wars in MEast; XL Foods “Because XL Foods, its parent company, the Alberta Progressive Conservative Government, the federal Conservative Government and the Canadian Food Inspection Agency have effectively destroyed the reputation of Alberta beef in the span of a single month.”; Iran urges Israel to join the NPT. After all, Israel only has 400 or so nuke WMD, primed and ready to go; Venezuela 1, Wall St. 0Chavez won with 54% of votes; Strange Person Takes all sorts; Man with No Face The Elephant Man was unseemly, but this is an exception to the rule; Bill Gates, the Rockefellers and Doomsday Seed Vault in the Arctic; Decline of Faith Leadership starts at the top, and there doesn’t seem to be much leadership in Christianity these days.

#66 Alberta Ed on 10.09.12 at 1:06 am

Conrad Black enthuses in last Saturday’s National Post “The announcement this week of an effort spearheaded by art collector and impresario David Mirvish, international architect Frank Gehry and innovative developer Peter Kofman to provide Toronto with a novel vertical, arts-based downtown residential complex is potentially a big step in Toronto’s quest to vault itself into the front ranks of the world’s cities…” While I enjoy Black’s prose (albeit a tad prolix at times), I wonder whether said project will ever get off the ground.

#67 One hundred : The Retiring Boomer on 10.09.12 at 1:13 am

[…] Is the Canadian real estate market on the verge of a slow melt, or temporarily overreacting to the Federal Governments recent change in mortgages regulations, and therefor stabilize and continue to rise slowly over time.  Garth Turner in his recent blog post on The Greater Fool suggests that the former is more likely to occur.  Garth suggest that we will be in an environment of deleveraging (declining house values) and rising debt as the cost of mortgages rise as with rising interest rates.  Homeowners tapped out with stalled incomes and rising interest rates will find it difficult to reduce debt and will find the debt levels will increase, in relation to declining real estate values. Continue Reading […]

#68 Ayn Rand Army on 10.09.12 at 1:26 am

The next one hundred days are NOT critical.

The last two thousand days were. The future is certain.

I’ll bet anyone anything on this. There is NO doubt.

What a tangled web we weaved…


#69 Zoronqueen on 10.09.12 at 1:40 am

It is interesting that the “real” stats are no where in sight. Only Garth’s site remains solid.


#70 house burden on 10.09.12 at 1:48 am

IMF is warning US and Canada about housing and debt.

All I can say, its a catch 22 situation. Our economy is run be credit and debt. If you stop debt you slow the economy (fake economy) . If you make make debt easy to obtain, you inflate the debt bubble. Right now the Debt bubble is so over inflated, there is no easy cure to deflate it, without alot of pain. The bigger it inflated the more painful the cure will be. So do we take our medicine now (like a cocaine addict) or do we wait until the sympton are like a heroine addict and go cold turkey.

100 days is too soon Garth, I don’t think we’ll see real signs until march april of next year.

Just wanted to mention. The cost of a old house (close to tear me down) is approxiately 65,000 price difference from a nice 7 year old house now (in east vancouver). Something is wrong with that picture

#71 Muddy Waters on 10.09.12 at 1:49 am

Coming to a GTA 911 call near you:

“Dispatch, this is 12-alpha-6, responding to a report of a well-dressed, bald-headed condo developer, standing barefoot on the ledge of an unfinished Bay Street penthouse. EMS on the way”

Lamb eating crow. Who knew?

#72 Jordy on 10.09.12 at 1:53 am

Always interesting and thought provoking, thanks Garth.

#73 B P O E Sales Way Down on 10.09.12 at 1:58 am

The Creme De la Creme apparantly ain’t buying, they’re smarting than the average realturd, this is the pause that keeps on falling prices already down 10-15% and only another 20-25% further, yup thats right your 1 million dollar crap shack will only be worth $700,000 in the near future, no ones buying with cash the banks have halted lending, lots of asians headed back to asia.

BPOE = no more money = sales stop= prices fall

Mr $$BPOE$$ = dreamer

#74 Mister Obvious on 10.09.12 at 2:09 am

I have four good friends each of whom currently has a detached home on the market in the Greater Vancouver area.

None of them are getting any serious interest. Two of them are re-listed again after previous failed attempts. All of them have been on the market for several months.

All of them have life plans on hold pending an expected influx of money that does not seem to be coming any time soon.

They’ve waited too long and are becoming very anxious. They all know I got out over two years ago and but none heeded my advice to do the same.

This does not make me feel smug or superior. They are my friends and it honestly makes me sick. Those less charitable might say they are getting what they deserve but it pains me greatly to see it.

#75 Steven Rowlandson on 10.09.12 at 2:09 am

If indeed sales have collapsed it is because the market has priced too many people out and too many people that are priced out are also paid next to nothing relative to what is required to safely buy a house and live at the same time. The real estate piggies are going to the slaughter house and that is all there is to it.

#76 Mic D'angelo on 10.09.12 at 2:21 am

Garth, you keep saying interest rates and bond yields will be going up in the next 3 months or so but to what level and how long will stay higher. Bond yields and interest rates mostly every year make lower lows not higher highs since the last 30 years at least. Garth put a number on it and not vague general information like you have been doing at least 2 years that I recall. The government and corporations do not want people to save because their policies speak for themselves.

#77 Jane24 on 10.09.12 at 2:39 am

It won’t take 100 days due to the internet Garth. It will be faster than that. One person emails their friends that RE is going down and they email their friends. This is a much faster world than the late 80’s. Many folk don’t use main stream media any more getting all their news and advice off the web.

#78 happy renter on 10.09.12 at 3:08 am

The Goverment and Bankers planned this scam years ago.Canadians are serfs now,wait for higher taxes,heating and electricity rates to go up every year.The cost of living to raise a family is to much.Our goverment hates children or why would it be so high for child care costs.Also why does our goverment let in over 250,000 people a year into our country when 1,400,000 are unemployed?Its simple so big businesses can pay lower wages and break unions.Ask any union oil worker about these temporary foriegn workers coming in and taking jobs away from Canadians.I want the old Canada back.

#79 Stinky the Fish on 10.09.12 at 3:29 am

Around these parts, they call me stinky the fish.

#80 Bo Xilai on 10.09.12 at 3:52 am

I’ll bet anyone the car in the picture is leased (rented)…

#81 Questioning Calgary stats on 10.09.12 at 4:07 am

#27 hoppe1

You have already missed that boat. The time to get out was a year ago in Nanaimo. You will be very disappointed once you actually sell that property and understand how much money you left on the table by holding out until the market was in obvious decline.

Your renters might be smarter than you think. They might wait for prices to correct even more before buying much lower than you can imagine.

#82 John on 10.09.12 at 5:49 am

“That’s exactly where we are now. In a hundred days nobody in the media will be talking about sales volumes any more. They’ll be gobsmacked by prices.”

It might be a good idea to finally start assessing risk. For that you’d need timeline. You’ve started with “100 days” and then mentioned “the media” “dealing with” the “next phase” of “real estate”. That fantasy might fly while the system wasn’t awash with hundreds of trillions
of dollars in derivatives. “Canadian” real estate is tied to that. In fact that’s our bubble. That’s where all of this is coming from.

The changes you refer to will happen, but it’s global and unfolding together. Something “the media” ( what’s that?) is fighting to spin.

Maybe we should start talking about what happened, what’s happening right now and what is unfolding. Go 100 days into the real deal, and maybe 6-18 months.

So far there hasn’t been risk analysis of a complete kind. Forget crystal ball, talk about reality. Cause and effect.

While creating the true context for an 800,000 dollar house teetering on the edge in Toronto, subject now to “changes”, bring up a real actor or two. Why not “the U.S.”. What is “the U.S.”? Who are they? Are they like “the media”? I mean what do you really think is going on right now?

Who is it we shouldn’t be betting against? Forget “real estate”, imagine your argument. Where will that be in 100 days or a year as the global story unfolds.

What would have to happen to “the media” for people to continue to believe in your argument? A lot of confusion and lies. Scapegoats. An uncertain and dynamic scenario.

Your risk analysis is very poor. You will be unable to keep this micro-argument apart from it’s drivers. For how long? 100 days? A year?

#83 Deb on 10.09.12 at 6:11 am

The relationship between sales and prices in different time periods seems to be very difficult for many potential buyers, in particular, to understand. In the former period of strong sales, the rise in prices tended to occur fairly quickly. In the present environment we are, of course, witnessing considerable drops in sales volume in most Canadian markets. However, many of those looking to buy are asking “Hey, why aren’t prices falling right now?” without realizing that there is a usual lag of around three to six months between large drops in sales volume and corresponding drops in the prices of homes.
Why is this so hard for many buyers to understand? Perhaps it is because of the age of instant gratification that we live in, where we expect to be satisfied with the click of a mouse. I don’t know. What I do know is that making a friend of patience, from now until April Fool’s Day, will turn out to be very rewarding for those buyers who choose to wait to pounce.

#84 Eaglebay - Parksville on 10.09.12 at 6:28 am

#48 TRT on 10.08.12 at 10:41 pm
“This study says the recent immigrants are earning only 60% of our wages…”

That’s cause the other 40%+ is earned overseas…no way of Cdn gov finding out..”

So, immigrants work part time in Canada and part time overseas…
I’ll keep my shares in Westjet.

#85 Eaglebay - Parksville on 10.09.12 at 6:39 am

#55 dv8 on 10.08.12 at 11:53 pm

You should have fought the Soviets a bit harder.
The Hungarian currency doesn’t compare to the US currency and never will.
I understand your fears but, hoarding goal is not the smartest solution.
Financial education maybe?

#86 Eaglebay - Parksville on 10.09.12 at 6:49 am

#64 Michelle on 10.09.12 at 12:50 am

Albertans pay more for utilities and less in taxes than the other Canadian provinces.
No medical payments, no PST, and on and on.
Ah, the Wildrose Party.

#87 Eaglebay - Parksville on 10.09.12 at 6:54 am

#66 Alberta Ed on 10.09.12 at 1:06 am

Conrad Black has to make a living.
Beats jail and the US “freedom”.

#88 Buy? Curious? on 10.09.12 at 7:05 am

Why does the sales and marketing techniques used by real estate agent have such a large element of douche bagginess to them. When you talk to them, they come across as some type of New Age Motivational speaker that watches Oprah or they behave like some Gordon Gecko wannabe.

#89 mid-Ontario on 10.09.12 at 7:06 am

My immediate neighbor’s house remains unsold after many months and open houses.
The number of For Sale signs on the street grows daily with fewer and fewer SOLD signs.
The newspaper has more REDUCED ads than in recent memory.

Things started to turn down here in the Summer.
The big RE market is grinding to a halt.
The next 100 days will establish what is going to happen up here for the next decade.

Unless the US gets its act together what with tax increases and benefit reductions scheduled for post election, our US neighbors will also grind to a halt weakening RE in Canada.

It can be argued that RE is on the brink. The next 100 days will clearly show us where the bottom might be.

#90 Eaglebay - Parksville on 10.09.12 at 7:08 am

#71 Muddy Waters on 10.09.12 at 1:49 am
“Coming to a GTA 911 call near you:

“Dispatch, this is 12-alpha-6, responding to a report of a well-dressed, bald-headed condo developer, standing barefoot on the ledge of an unfinished Bay Street penthouse. EMS on the way”

Lamb eating crow. Who knew?”

We shouldn’t wish anything bad or rejoice at any misery that the RE has or will cause to some people.

We live in a quasi free enterprise system and without government interference none of this would have happened with the exception of the financial idiots.

Some entrepreneurs chose RE and others went into different industries or economic activities.
Some deals are win win and some deals have a loser and a winner. Knowledge and self education is the key.

Be careful what you wish for.

#91 Eaglebay - Parksville on 10.09.12 at 7:14 am

#76 Mic D’angelo on 10.09.12 at 2:21 am

Much conspiracy?
Do you know the definition of the word ‘corporation’?
I’m betting against Italy.

#92 Eaglebay - Parksville on 10.09.12 at 7:22 am

#77 Jane24 on 10.09.12 at 2:39 am
“It won’t take 100 days due to the internet Garth. It will be faster than that. One person emails their friends that RE is going down and they email their friends. This is a much faster world than the late 80′s. Many folk don’t use main stream media any more getting all their news and advice off the web.”

I have to agree with you Jane.
The RE market is in trouble because many people cannot think and figure things out for themselves.
It’s the web, the media or the realtor.
Let’s blame the banks, the corporations and the government.

#93 Eaglebay - Parksville on 10.09.12 at 7:26 am

#78 happy renter on 10.09.12 at 3:08 am

I’m glad you’re happy.
Now, stop promoting your ignorance.
You forgot your landlord in your conspiracy.

What have you done for your country lately if ever?

#94 Eaglebay - Parksville on 10.09.12 at 7:30 am

#82 John on 10.09.12 at 5:49 am

I’m still trying to figure out which planet you’re from.
Don’t bet against the USA or China. Italy maybe?

#95 █ ♣ █ My House Pofit is MINE - My House Loss is OURS on 10.09.12 at 7:47 am

# 11 Turner Nation

How can Canadians take away jobs from immigrants ?

This is totally inappropriate !
This must be stopped NOW !!!


#96 Stoopid Idiot on 10.09.12 at 8:02 am

Homeowners associations clamp down on rentals

The More Big Brother Clamps Down, The More It Loses Control

George Orwell knew that big brother in its various forms will always try to control the masses. That is, until its lack of understand of market forces and behavior dynamics of confidence lost, best encapsulated by the phrase flight of capital, inevitable leads to its own demise. As long as HOAs fight the secular bear market trends in real estate, they only invite more conflict. The escalation of conflict and uncertainty will force people and capital to flee, thus, leaving big brother with a bigger problem of shrinking populations. Ghost towns are bad for property values too.
Who’s really in control here?

Headline: Homeowners associations clamp down on rentals

9:19PM EST October 4. 2012 – Neighborhoods across the country are hiding the welcome mat from renters in a bid to protect property values, a trend that has put a strain on renters and homeowners alike.

Some homeowners complain local laws and neighborhood association covenants are becoming too restrictive on renting in an economy that already makes it tough to sell a home.

“It’s really bad here in Florida, and I’ve talked to a lot of property managers all across the country,” says Jayci Grana, president of the National Association of Residential Property Managers. “Some areas have more associations than others, but for those that do, they’re just tightening down ridiculously hard on tenants.”

#97 Victor on 10.09.12 at 8:02 am

The International Monetary Fund is taking a dimmer view of Canada, cutting its economic forecasts and warning of the threats from the housing market and swollen consumer debt levels.

“In Canada, the key priority is to ensure that risks from the housing sector and increases in household debt remain well contained and do not create financial sector vulnerabilities,” the IMF said today in updated global projections that, over all, paint a bleak picture of the world in the post-crisis era.

“Thus far, mortgage credit growth has slightly decelerated in response to the measures taken by the authorities, including tighter mortgage insurance stands,” it said in its lengthy report.

“If household leverage continues to rise, additional measures may need to be considered.”

#98 Tom on 10.09.12 at 8:50 am


Do you think Thunder Bay will be more like Fredericton or Vancouver? Everyone here is saying “it could never happen here – there are new mining projects starting all around us”. Any validity to this statement?


#99 Click Here, its different on 10.09.12 at 8:50 am


You are probably right. I also think that internet make tendencies moves a lot faster. And not only that, it also creates “Mc-Experts” on several subjects.

The best example is probably the “buy gold” mania. I doubt so many random people would be into this without the internet. Metal-heads became a social phenomenon. Blogs, vids, conferences, articles, …etc.

While 100 days is quite short, Garth, it may very be faster than that or at least, sellers might have the wakeup call earlier. 30 minutes of browsing should convice them to “sell now or sell never” …

lol … This one came spontaneously … so funny … Sell now or sell never … ahahahah

#100 Toon Town Boomer on 10.09.12 at 9:21 am

@61 Mithan on 10.09.12 at 12:25 am
I don’t expect much trouble in sask for a couple more years regardless. Still, prices here are just too high. 350-400k for 40-50 year old homes in Regina and sktoon are crazy.

Wait and see. FEAR IS IN THE AIR and news travels fast. Prices are crazy and the smart money will wait. Who wouldn’t want to save thier hard earned cash?

#101 pjwlk on 10.09.12 at 9:27 am

IMF cuts Canada outlook “…and most, though not all, observers, now see a soft landing…”

Once the slide starts, my money’s on at least 5 more calls from the “experts” for a “soft landing”. After they’ve been thoroughly disgraced then perhaps there will be a soft landing…lol.

#102 Smoking Man on 10.09.12 at 9:30 am

#1 newworldpartydotorg

Seriously man. The guy who wrote the piece is a moron.

Mind you well presented still out to lunch on content.

Inter generational injustice.

I quote.

Its a massive trabsfer of wealth from the you to old.

Ba hahahahahahahahahaah

The young have no wealth to transfer. To busy with their ipones to create transferable wealth.

I do understand the frustration of entitled youth.

#103 thinker on 10.09.12 at 9:59 am

Plenty of talk of government coming in to save the market – the mortgage market in Canada is ALREADY the government! Every Canadian bank is laughing as tax payers are lending themselves money and the banks are enjoying the spreads in between. I meet stupid people everyday who sit in taxable GIC and non tax deductible mortgages. The banks are laughing.

#104 Gunboat denier on 10.09.12 at 10:05 am

63/64 Michelle – the arrears rate in Alberta was about 0.6% in July, having declined from 0.8% over a year ago.

Please provide a reference for your claims.

#105 House Horny Housewife on 10.09.12 at 10:13 am


You are right about slowing sales eventually affecting prices. Simple supply and demand economics.

However, I think you underestimate the stickiness of prices and the resulting time lag for their descend as well as the emotional attachment to property. These variables are quite unpredictable.

I do not think that buyers will necessarily wait for the market to hit bottom in order to buy .. only for prices to begin to descend enough for them to latch on with their meagre financial resources.

You cannot assume that buyers and sellers will behave logically and in their own financial interest. People are not logical and they sometimes have other motives besides profit.

No one likes to put their life on hold while waiting to find a house and the sooner they can move in, the better. Even if it means losing money. The only barrier will be what they are able to afford and not necessarily what they want to pay.


#106 };-) aka D.A. on 10.09.12 at 10:16 am

Reference my post at #57 and you will note that, in Kelowna, a 39.5% drop in Single Family Residential sales volumes between 2007 and 2008 led to a mere 9.9% drop in the average sales price the following year. That drop then was well warranted as volumes and then subsequently prices had spiked unreasonably driven by a rampant buyer demand fuelled by fear that ‘if they didn’t buy then they would be priced out of the market forever’. Some fools got in too late, others didn’t get in at all let alone early enough

The historical volume trend in Kelowna was increased by an excessive fifty percent between 2001 and 2007. It took the bone jarring Financial Crisis of 2008 to awaken the markets to the madness such that those volumes gave back a third and began to follow those more ‘rational’ levels. What we have in Kelowna today is a ‘rational’ market in which sales volumes are the consequence of that ever present core market after that irrational component of 2007 was removed. The subsequent price capitulation of 2008 was nothing more than removing the unwarranted froth. Sure there does remain some excess in prices but that which does remain is nothing more than ‘sticky’ markets always hold onto as they await the core market to catch up to their not so distant advance.

As I have mentioned here before, historically prices tend to double every ten years or so – just as everything else does. But the emotionally fraught housing markets do not follow a straight line trajectory. Sometimes the markets exceed ‘rational’, other times they lag behind. The period between 2003 and 2007 was one in which the Kelowna markets exceeded rational. Only after the jarring wakeup call of the Economic Crisis of 2008,when you couldn’t pick up a newspaper or turn on a radio or TV, or log onto the internet without being given good reason to believe the world was about to fall into an economic abyss did some sense of sanity return as we tried desperately to backpedal to some outcropping hope of salvation. Still prices fell by less than ten percent despite volumes dropping by a third. What so awakening potentially dire event equal to the seriousness of that Financial Crisis of 2008 lies in wait in the next 100 days that will cause such another sudden ratchet drop in the real estate markets as did that of 2008? None that we know of. That is not to say some Black Swan event might not emerge. What are you going to do, hide you head in the sand worrying about the possibility of such events. Watch out there’s a bus headed your way! You can catch it or be hit by it… choice is yours.

Toronto and Vancouver may well have needed and be headed toward a volume haircut as they exceeded the limits of that ever present core market just as Kelowna did more than four years ago. But don’t expect every regional market of this country to do the same and those that do will not give nearly so much price back as most readers here seem to believe.

The Pareto Principle applies very strongly to many aspects of the real estate markets too. Eighty percent of this countries markets are following a traditional and warranted pattern, twenty percent are not. That twenty percent which has deviated from a normal trajectory should and will be forced one way or another to get back on track but they are not so much the rule as the exception and likely just a short lived one at that.

I don’t expect we will see prices increase for another two years. Any further price capitulation between now and then will only hasten the breadth and speed of those rising prices when they finally do arrive. Remember prices are ‘sticky’ on the way down and tend to hold while the rational core component of the market catches up.

I am sure we will see much mirage of what appear potential thirst quenching price drops on the horizon but that is all they will be, mirages, and as we near they will evaporate before your outstretched hand can reach them. I suspect there will be no better time for such mirage sighting as there will be over the course of the next 100 days. Most of those mirages will come from sighting of the distant actual and rightful shifts in such markets as Toronto which when viewed from afar by the wanton few in more real but beyond them markets like Kelowna are pointed to as the coming of their salvation. But they will be disappointed as the reverberating wavelengths of those centers reality fades into nothing more than local illusion. Save for such currently heady markets as Toronto, and probably Vancouver too, this market is real, justifiable and holding as it waits for the next frenzied party to begin.

#107 Daisy Mae on 10.09.12 at 10:36 am

“The Canadian government has already moved several times to tame the mortgage market and take the froth off house prices. The latest move by Finance Minister Jim Flaherty, in July, has helped cool the market, and most, though not all, observers, now see a soft landing.

Mr. Flaherty moved amid record high levels of debt to disposable income….”


Why does the media continue to portray this little twerp as being a responsible finance minister — a good guy? Can’t anyone state truthfully, that F and the peckerettes CAUSED this disaster?

They could print something such as: “After bungling the economy, the feds are now in ‘damage control’ mode….”

#108 John on 10.09.12 at 10:39 am

Eaglebay Parksville wrote:

#82 John on 10.09.12 at 5:49 am

I’m still trying to figure out which planet you’re from.
Don’t bet against the USA or China. Italy maybe?

Poor Eaglebay Parksville. All over the map, trying to potshot anything and everything that interferes with a delusional belief system. Yet your posts are only doing that. You don’t have an argument. You’re consistent. The best you can hope for is that those using real argument are going to remain marginalized and that you can hide behind the group.

What exactly is your argument? I don’t get it.

#109 dv8 on 10.09.12 at 10:43 am

#85 Eaglebay – Parksville on 10.09.12 at 6:39 am

I understand your fears but, hoarding goal is not the smartest solution.
Financial education maybe?

I suppose i should hoard the almigthy US dollar you so cherish if i did that 30 years ago that would have been a mistake and you think currencies last forever? perhaps you may need a little education in the field of monetary science READ a book titled “When Money Dies ” this is a currency issue not a financial one big difference , also being the world reserve currency (us dollar) they are only exporting inflation to the world for now until all that printed money outside of us comes back to homeland usa then its inflation at home .The IMF and the UN is already calling for a new reserve currency . Sorry buddy but the dollar is a dead man walking

#110 Daisy Mae on 10.09.12 at 10:43 am

#9 Blase: “Why do you say Fredericton won’t have a correction…”


Perhaps because there were no unrealistic price spikes or bidding wars throwing everything out of whack, such as we’ve seen in Vancouver and Toronto?

#111 Country Girl on 10.09.12 at 10:57 am

Perception is everything. I just checked the TO Sun’s online survey; “Do you expect Canada’s housing market to soften into 2013?”, 54% (or 582 votes) said “Yes, it’s overheated.

#112 Tom from Mississauga on 10.09.12 at 10:57 am

Any idea if this affects the CAD? Would you suggest the SPY or the XSP?

#113 Frank le Skank on 10.09.12 at 10:58 am

I don’t live in Fredericton and have no connection there except my g/f was a residence while at St.Thomas University. This small town is an anomaly and prices are very high for some reason. I would agree that 90% of the Maritimes will not experience price declines because the economy is always crappy there, but places like Halifax and Fredericton will probably see decreases in price.

#114 TurnerNation on 10.09.12 at 11:02 am

Lots of chatter about Alberta going down the drain. With the robust oil prices.
Makes little sense when even the bumbling, alcoholic premier was able to mail prosperity cheques to all when oil was at just $40/bbl.

Let me suggest this. Albert is being broken down into a have-not province, its oil will be shipped to China for a song.

How? Social change, a revolution, under the guise of progress. It *appears* good on the surface. I remember when Bush Jr, appointed people like Condaleeza Rice. It seemed like balance, diffferent perspectives were coming in. Less redneckism. Was I wrong. They all turned out to be neocons. Madalene Albright let Iraq’s destruction with glees. No diversity there.

How about this for change, division: Calgary’s Muslim Mayor; Edmonton’s from a Jewish background; a female premier in the most redneck province.

I propose to you: while the premise appears sound (diversity, different idea), beware that they could be trojan horses brought in by the one-world-order types…
They know how to tickle our fancy.
“Hope and Change? Not much.

#115 Van Isle Renter on 10.09.12 at 11:05 am

House repo’s on the rise in Spain. Why?

Mommy and Daddy used their house for collateral to backstop a house for junior. Why? because real estate is different there; EVERYBODY wants to retire to Spain. RE will never drop.

FFW 3 years: Junior lost the house and moved back home.

FFW to Today: Now bank wants $$ from Mommy and Daddy. Mommy and Daddy can’t pay, so they lose their house.

Possible in Canada? Nah, it’s different here.

#116 Country Girl on 10.09.12 at 11:11 am

Eugen – The suit and tie make him appear so very smart, until you hear his message. Big hat, no cattle.

#117 Van Isle Renter on 10.09.12 at 11:15 am

#106 };-) aka D.A. on 10.09.12 at 10:16 am


U B on crack.

I haven’t read such a disjointed cherry picking ill informed, bunch of drivel since my stock broker phoned me with this hot tip on Bre-X .. at $100. After it was crashing from $240.

The question that you need to answer is where is the $$ going to come from to push prices higher?

1. Incomes are flat. No more $$$ available there.

2. Anyone who could fog a mirror already bought. No more $$ from there.

3. Banks are tightening credit. No more $$ from there.

4. Interest rates are as low as they can get. No more $$ from there.

Good luck with your delusion. As someone far wiser than me pointed out in an earlier post “The reason you find reality scary is because you don’t spend enough time there.”

#118 Daisy Mae on 10.09.12 at 11:18 am

#35 Salacious: “You’re right, the costs to power a home in Alberta are outrageous. It’s crushing seniors and young families alike. This will be a factor in future affordability in this region.”


It will certainly curtail consumer spending, so retail businesses should be squirming. With Christmas just around the corner?

#119 AprilNewwest on 10.09.12 at 11:27 am

#105 Your suggesting Canadians are different. We’re not. Look at what has and is happening in other countries.

#120 xdisciple on 10.09.12 at 11:48 am

My dear Quebecois: CAQ is a fraud, leader Francois Legault and deputy Jacques Duchesneau are actors and identified and now busted! See my blog by clicking on my name above…

Do that again and you are off this blog. — Garth

#121 Old Man on 10.09.12 at 11:57 am

I wonder if what is to come in TO and the GTA will have a ripple effect on cottage country to the north? I guess such will depend upon the structure of financing to buy that summer home – not sure!

#122 PERPLEXED on 10.09.12 at 11:58 am


#123 Mister Obvious on 10.09.12 at 12:07 pm

Eugin Klein from the REBGV describes the current Vancouver stalemate as “a tug of war between buyers and sellers”.

That’s not a good analogy. I think Wile E. Coyote suspended in midair about six feet beyond the edge of a cliff is far more illustrative.

#124 T.O. Bubble Boy on 10.09.12 at 12:09 pm

“Netherlands House Price Crash Underway; Will France Follow?”

Welcome to the future headlines for Canada.

#125 NFN_NLN on 10.09.12 at 12:28 pm

#114 TurnerNation on 10.09.12 at 11:02 am

Lots of chatter about Alberta going down the drain. With the robust oil prices.
Makes little sense when even the bumbling, alcoholic premier was able to mail prosperity cheques to all when oil was at just $40/bbl.

I am not taking sides on Alberta and the drain but at least get your facts correct. There is a large difference in the cost to extract oil by pumping it out of the ground and having to extract it from tar sands.
I bet there is more than $40/bbl in labour, energy and infrastructure put into each bbl of tar sands.

#126 Old Man on 10.09.12 at 12:29 pm

#124 T.O. Bubble Boy – this is a sign of worldwide deflation taking place for a discounting of assets. Some come sooner, and others later, but nobody will escape from the grim reaper, as there is a price to pay for the pie in the sky when the herd borrows cheap money; rolls the dice on what they cannot afford; and then craps out.

#127 Interesting Times on 10.09.12 at 12:30 pm

@ #121 Old Man on 10.09.12 at 11:57 am

My mother just sold the family cottage due to fears of a real estate ripple effect in cottage country. If people are struggling to hang onto their houses, the cottage will be the first thing to go. She had to cut her price and settle for less than she had hoped for but at least it sold. Better to sell it now – otherwise it will likely be worth less next spring. Hers was the only one on the lake that sold this year, even though there were several other listings available (at much higher prices).

#128 Victor on 10.09.12 at 12:37 pm

Scotia Capital economists Derek Holt and Dov Zigler, in a research note, said multiple housing starts have returned to their pre-crisis peaks.

“As inventories stockpile, investor demand wanes and new projects are pulled, condominium starts are poised to soften into next year and this will play the greatest role in driving cooler housing markets.

#129 Just Park It on 10.09.12 at 12:58 pm

I have the perfect solution with the Chinese wanting to buy Nexeen.

Let them buy the rights – but let Canadians have the right to buy land in China that holds the precisous earth – which is a rare commodity and limited throughout the world.

Lets see how business oriented the Chinese will be ??

#130 Nathan on 10.09.12 at 1:42 pm

@ T.O. Bubble Boy # 124
Until recent regulatory changes Dutch banks were handing out mortgages that make the lending practices of Canadian financial institutions look downright stingy. 120% of assessed value, interest-only mortgages, etc. Lots of households over-borrowed and when the crisis hit and growth stalled the vulnerabilities began to show. There are a lot of Dutch people right now who hold mortgages that far exceed the current market value of their homes. A relatively steady employment rate to this point has been the only saving grace.

#131 TNT on 10.09.12 at 1:58 pm

Any chance you can do an article on the recent mysterious disappearance of sites that were tracking the Vancouver housing market independent of the RE board?

Any contacts in Revenue Canada?

#132 };-) aka D.A. on 10.09.12 at 2:12 pm

#117Van Isle Renter on 10.09.12 at 11:15 am

And yet the ‘core’ everpresent buyers and sellers in any market continue buying and selling. Not everyone is broke, not everyone needs such credit and they who do still qualify. You are in and of the minority.

#133 randman on 10.09.12 at 2:16 pm

Soylent Green #43

No one here likely cares ….
They think it won’t be abused or can’t happen here..
We should all be weeping for our loss of freedom…
The bully down south will not stop or surrender..

#134 45north on 10.09.12 at 2:32 pm

one hundred days

on my street in Ottawa there are three houses for sale, they’ve been for sale for over 30 days now, I think they’re empty. I’d say it costs $500/month to pay the taxes, insurance and utilities. Another 100 days will cost $1500. Plus the mortgage.

#135 };-) aka D.A. on 10.09.12 at 2:35 pm

#117Van Isle Renter on 10.09.12 at 11:15 am

And yet the ‘core’ everpresent buyers and sellers in any market continue buying and selling. Not everyone is broke, not everyone needs such credit and many of they who do still qualify. Might you are in and of the minority?

#136 Steve on 10.09.12 at 2:53 pm

One Hundred Days puts a hard number on the timeline to reach clarity for something that has been developing for over a thousand days. Some will think that is quite a bold prediction Garth!

Clearly the blog comments show that many have already made up their minds, without the benefit of more time to see which way the numbers go heading into the new year. So here is a short tale of 2 houses for consideration.

Two SF houses in the same ~30 year old neigbourhood (within a few hundred meters) on similar lots. The main difference is style/size. House 1 is backsplit 3+1 bed 2 bath. House 2 is 2 storey 4 bed 3 bath. House 1 has been on the market for a year, and is still there at $479k (different Realtors, different prices). House 2 went on the market 2 weeks ago at $489k, and sold in under a week. There are nearby new developments, so competition for buyers is from both resale and new.

Two specific houses have many individual characteristics, but these two represent one seller (group 1) who is stuck (wanting or needing more than buyers will pay) and one seller (group 2) who was motivated (estate sale) and set the price so the house moved immediately.

Some of the group 1 sellers will stay where they are, but more and more will shift into group 2 if the buyers will not bite. If the next 100 days are a period of stalement – group 1 not moving on price and buyers not buying, then sales will be reduced accordingly.

Given the USA as a reference for the rate at which a price shift occurs, it looks like Garth will be right, and the RE numbers will continue to decline for quite some time (several 100s of days) before a critical mass of sellers land in group 2 and price to sell. If he is right about the sharp decline and slow fade in prices, and using the USA again as reference, the sellers will need about a year to adjust down to the buyers’ pricing level enough to stop the sharp decline that looks to be starting (or already started depending on your local market).

Today is not a good time to be a seller, but tomorrow is worse, and the day after that worse again…

#137 Old Man on 10.09.12 at 3:14 pm

#127 Interesting Times – I hope before she sold the family cottage that she made provisions with the tax ramifications, and if not there may be time to adjust this matter with a few adjustments. Never sell a cottage as a secondary residence unless certain things are put in place ahead of time and well documented.

#138 Dontcallmeshirley on 10.09.12 at 3:15 pm

#132 D.A. ,

“… You are in and of the minority.”

Tsk, tsk…after a brief respite you’re doing Ricky Roma from Glengarry Glen Ross again.

Regret, fate, hope, a life mis-spent, redemption. This message is a theatre cliche.

You know Glengarry Glen Ross is almost 30 yrs old?

#139 Timbo on 10.09.12 at 3:26 pm

“It’s quite simple. If any new taxes are levied on me, or my company, as our current President plans, I will have no choice but to reduce the size of this company. Rather than grow this company I will be forced to cut back. This means fewer jobs, less benefits and certainly less opportunity for everyone.”

The nobles are telling the serfs how to vote, or else!! lol

“David Cameron’s latest attack on the poor has a longer history than he seems to know. “We” have not created a culture of dependency; the animus against the poor, and the remedies proposed, go back at least to the consolidation of the Elizabethan poor law in 1601, and even further: one of the post hoc justifications for the destruction of the monasteries was that these had offered alms and relief to the idle and undeserving, who had dissimulated themselves among the widows and orphans fed and sheltered by religious houses.”

Fascinating class warfare card to mask bad policy. Punitive detention camps to service the good are on the way.

#140 Toronto_CA on 10.09.12 at 3:30 pm

This is just groan inducing:,-2012,-article-entitled-the-right-play-for-first-time-home-buyers

“The best time to buy has always been now.”

Unless you actually do the math. These guys are a walking joke. He actually advocates buying a crappy house where you don’t want to stay long and selling in 3-4 years…hmm wonder who benefits from that? The real estate agent or the poor guy who sold? Even with a good chunk of appreciation (which isn’t happening, especially on condos bought by first time buyers) you’d not come out ahead with closing costs and RE commissions after 3-4 years.

Sigh. People wonder why everyone HATES realtors.

#141 dosouth on 10.09.12 at 3:31 pm

#27 Hoppe1
#81 Overtime —took the words out of my mouth for Nanaimo. We sold 18months ago in the Okanagan travelled Canada for 1 year and came back to Nanaimo to rent until this market corrects.

Nanaimo is a blue collar economy and if Hoppe1 ever reads even the vireb report he/she will need 20% to catch up after all 5% + 5% of nothing = nothing.
P.S. Hoppe 1 there are lots of foreclosures (you may need this guys name soon) – heck read this report and find a few for yourself, maybe we can help you in dropping more before you end up with a hair cut. – password: foreclosure

#142 Old Man on 10.09.12 at 3:46 pm

Warning: those of you that have secondary properties in any form other than your principal residences the TAX MAN is waiting for you, and will focus on the summer home or cottages for a disposition or a sale if you will, as this is a very complex matter.

Taxation can be avoided somewhat, and know of at least four ways, but this all depends upon all the facts going forward which might involve either the present or future heirs to be considered, as the present must be ascertained with a clear mind before a sale or a disposition of a capital asset.

I know the Tax Act, but one must get expert advice for any new amendments in place, as they change like the wind, so if big money is involved, one must consult an expert in taxation at a law or accounting firm to take advantage of changes that need to be done.

#143 John on 10.09.12 at 3:50 pm

Daisy Mae wrote:

“Why does the media continue to portray this little twerp as being a responsible finance minister — a good guy? Can’t anyone state truthfully, that F and the peckerettes CAUSED this disaster?”

Isn’t it clear by now that this is not the case?

#144 spaceman on 10.09.12 at 4:23 pm

Victoria is already off by 10%, look at listing prices, most 20-60 thousand below assessment. And still not getting offers. Today $534,000 4BDR house, listed at $450,000, that is desperate. On the market 4 days, open house was Saturday. I have it on PCS, will let you know what happens.

Victoria has been dropping for 2 years, Vancouver went up another 10%, they have further to drop than us. I don’t see the 2 citys as equals at all.

#145 truth hammer on 10.09.12 at 4:38 pm

Bank pimps still in denial of Canadian real estate crisis.

The mortgage pimp interviewed says that ‘debt to income ratio’s in Canada have not accrued to the levels they were in the UK and US before those markets collapsed’…..bwahahahahahahahahaha. Nit picking between 160% and 158% is navel gazing.

Besides wasn’t the US level in the 140’s when the pyramid collapsed? Canada has eclipsed the ratio’s set in the UK and US by a WIDE margin.

This proves that there is no independant BOC where rates are concerned…..this is Finance Ministry policy…with Carney a show boating meat puppet paid his half million a year plus perks to make it look like there is some independant oversight.

Don’t hold your breath for a rate rise…it won’t happen…the FED is too happy printing bonds a zero rates that it can buy back from itself to fund the gluttony of the civil service…..for the sake of ‘labour peace’. The trouble is the real national debt continues to build…to stratospheric amounts that Canadians can never pay back.

#146 DON on 10.09.12 at 4:57 pm

“Dress for success – they used to say. If you wear a suit you are a somebody and people will take you seriously.

What a joke! If everyone is doing it – it means nothing. Now we have realtors wearing flashly suits and I am supposed to think they are professionals. NOPE.

“Prices can’t go up 10% a year forever, so this is just a nice little pause. Take your time, savour the choice, and enjoy a buyer’s market. But don’t wait.”

NO doubt they believe this to be logic dummies or self serving hacks. I would like to think self serving hacks, as I hope people are not taking advice from the truly stupid who dress up in suits.

What people don’t see – is the momentum that is building and the present path needs to run it’s course. Like being sick – one must get sicker before getting better. I can only wait to hear my in law tell me that housing will correct and that’s the way he/she saw it – even though he/she didn’t. But whadda I know! I sleep at night.

#147 Cory on 10.09.12 at 5:06 pm

When little ole’ “prudent” Canada/Canadians hit the world radar (IMF article) regarding household debt levels, you can clearly see why Flaherty et al made the moves they did.

I said this many times. When you’re on the world radar, politicians need to make some changes regardless of what the all knowing crooked realtors think.

As the old saying goes, the jig is up!! the smoke and mirror show has been identified and exposed by the world. Now, if only Canadians would see the same thing……

#148 Old Man on 10.09.12 at 5:31 pm

I have a new name for F, the puppet on a string, that one week said trust me, as there will be no changes to Investment Trusts, and then a few weeks later got his marching orders from Caesar, and crashed this market down about $33 billion in a NY minute. His new name is a FSOAB.

#149 Snowboid on 10.09.12 at 5:35 pm

#65 Nostradamus Le Mad Vlad on 10.09.12 at 12:58 am…

I’m not that good at math, but it seems if a $ 100K home went up by 70% it would be worth $ 170,000.

The $ 170K home going down by 35% is $ 110,500 which is only 10.5% more than the original value?

#117 Van Isle Renter on 10.09.12 at 11:15 am…

Agreed – also what market is ‘flat’ when it doesn’t even keep pace with inflation over the last five years?

#150 Devore on 10.09.12 at 5:43 pm

#74 Mister Obvious

All of them have life plans on hold pending an expected influx of money that does not seem to be coming any time soon.

You lie. Everyone knows only renters put their life on hold, as they wait, homeless, for their moment, and that adulthood (indeed, life itself) begins when you buy a house.

As one Property Virgin was overheard mumbling unconvincingly on camera, you’re nothing until you own something.

Of course, many here know home owners who have not only put their life plans on hold, but gave up on them completely. Travel, education, starting a business, change of career, retirement, having kids, having more kids, stay-at-home parent… all on hold because the house costs too damn much.

#151 Justsayin on 10.09.12 at 5:44 pm

Bozo, Ronald McDonald, J.P. Patches, Crusty are all clowns. Oh yeah, don’t forget $$$BPOE#1. Biggest clown of them all.

#152 Devore on 10.09.12 at 5:55 pm

#96 Stoopid Idiot

9:19PM EST October 4. 2012 – Neighborhoods across the country are hiding the welcome mat from renters in a bid to protect property values, a trend that has put a strain on renters and homeowners alike.

Reducing the income potential of an asset only serves to depress its value, not that these kneejerking idiots would know anything about economics. Too many people still have a core belief that houses are worth what they think they should be worth (ie, more than they paid), even as prices across the country are correcting to fundamentals, right before their eyes. Now they want to charliehorse the fundamentals too.

#153 Blacksheep on 10.09.12 at 6:06 pm

Daisy Mae # 107,

“Can’t anyone state truthfully, that F and the peckerettes CAUSED this disaster?”
They definitely facilitated is it’s occurrence, but decisions were made on a global scale to inflate housing, giving the Cattle the perception of wealth, postponing the eventual day of reckoning.

As of 2007, real estate bubbles had existed in the recent past or were widely believed to still exist in many parts of the world,[6] especially in the United States, Argentina,[7] Britain, Netherlands, Italy, Australia, Canada, New Zealand, Ireland, Spain, Lebanon, France, Poland,[8] South Africa, Israel, Greece, Bulgaria, Croatia,[9] Norway, Singapore, South Korea, Sweden, Baltic states, India, Romania, Russia, Ukraine and China.

take care

#154 Nostradamus Le Mad Vlad on 10.09.12 at 6:11 pm

#58 THE CELIAC HUSBAND — “Take a breather. Timeout. A Sabbatical.”

Not a bad idea. We’ve been to Europe a few times, so now the time is ripe to explore other parts of the world. May go back to Europe at a later date, but it is a good trip there.

Thanks for the posts!

#78 happy renter — “I want the old Canada back.” — Right on lower wages, spiraling utility costs and breaking unions, wrong on having the old Canada back. Too far gone into Oromneyba’s totalitarian state. Good post.

#82 John — “. . . but it’s global and unfolding together.” — When TPTB decide enough is enuff, that’s when they yank the carpet out from under our feet.

#155 Smoking Man on 10.09.12 at 6:13 pm

Last week on the way to union station a begger had a cup out as I always do I dropped a tonnie in his cut.

A guy from my tax farm said why did you do that.
Let him get a job like the rest of us.

This begger was repulsive.

I said to collegue do you realy want the guy hidden in the kitchen flipping your burgers.

So funny my collegue drops him a tonnie. Said your let’s keep him where we can see him

That’s how a smoking man rolls

#156 Devore on 10.09.12 at 6:15 pm

#132 };-) aka D.A.

And yet the ‘core’ everpresent buyers and sellers in any market continue buying and selling.

That is a meaningless truism, which you seem to be very fond of, and with which you make no point. When someone is debating how much it rains in the fall, pointing out the sky is blue is irrelevant, since the color of the sky is not in question.

We KNOW there are people buying. In ANY market there are always buyers and sellers. As Bre-X, Nortel, YP, BB, countless .coms were freefalling, there were still people buying. All throughout the decline in the US, house sales never reached zero. What, pray tell, should we conclude from this?

#157 jess on 10.09.12 at 6:20 pm

the comment that “Canadians are serfs.”

…The account of the rising by the contemporary chronicler Jean le Bel includes a description of horrifying violence. According to him, peasants

“killed a knight, put him on a spit, and roasted him with his wife and children looking on. After ten or twelve of them raped the lady, they wished to force feed them the roasted flesh of their father and husband and made them then die by a miserable death.”

…The peasants involved in the rebellion seem to have lacked any real organization, instead rising up locally as an unstructured mass

An attack by Taliban gunmen in north-west Pakistan that wounded a 14-year-old who campaigned for girls’ rights has caused an outcry in the country.

Malala Yousafzai was shot in the head on her way home from school in Mingora, the main town in the Swat Valley.

Malala Yousafzai came to public attention in 2009 by writing a diary for BBC Urdu about life under Taliban militants who had taken control of the valley.
castration would be too kind

#158 Triplenet on 10.09.12 at 6:21 pm

Garth – from yesterday
The webmaster informs there were 2.3 million page views in the last month. Only one in a hundred visitors makes a comment. Only one in two hundred of those is an idiot. Thankfully.

….not sure about your math re the comment count and idiot factor (sic) of 2,300,000 monthly hits. Notwithstanding, a well travelled site but surely must have a greater idiot representation count than 1/2 of one percent.
Is it possible you average 200 comments a day – and then you can do the rest of the math.
Idiots maybe – foolish probably.

#159 Devore on 10.09.12 at 6:41 pm

#96 Stoopid Idiot

I should expand on that. The first to begin buying houses after a real estate crash are investors. Investors who see an opportunity to make money, because buying a house makes economic sense again. Investors make money from real estate by charging rents. (I mean the real investors, not Trump wannabes.)

By limiting rentals, all these home owners associations are doing is turning away a large chunk of much needed buyers. Now prices must fall even more for buyers to return. Protectionism, subsidies, special treatment only serve to distort the market further, and move it away from the intended direction.

As an interesting aside, when renting is more expensive than buying, renters will actually be wealthier than buyers, on a cashflow basis, because they pay more monthly. They choose to pay more, because they pay for convenience and for someone else to take on the risk of real estate ownership. It’s called the ‘ownership discount’, soon to replace the ‘ownership premium’ in common lexicon.

This situation in Florida (Florida? why am I not surprised) is nothing more than a search for a new scapegoat to blame for a morose real estate market.

#160 DON on 10.09.12 at 6:46 pm

@#84 Eaglebay – Parksville

Is the following why you are agitated today?

From the Parksville Qualicum News.

****Prices, sales down for Vancouver Island real estate
Share this story
[Pin It]

Real estate prices up six per cent here
Mid-Island house prices down nine per cent
When investing in property, consider Real Estate Investment Trusts
Vancouver Island Real Estate Board elected new executive
Real state awards coming up
Average home sale prices are down in 2012

By Contributed – Parksville Qualicum Beach News
Published: September 07, 2012 8:00 AM

House prices in Parksville and Qualicum Beach and area were down eight per cent in August, reports the Vancouver Island Real Estate Board (VIREB).

The average selling price for homes in this area was at $363,873 last month — still above the average prices for homes in VIREB’s coverage area: Nanaimo ($341,434), Comox Valley ($329,008), Cowichan Valley ($351,061), Campbell River ($301,093)*****

#161 Old Man on 10.09.12 at 7:05 pm

#155 Smoking Man – this reminds of the day when I was walking down Yorkville with a VP from RBC, and this poor guy who was homeless was just lying down on the sidewalk with his handout. I bent down and put a few bucks in his hand, and he said thank-you and ran away. The banker said why did you do such, as these bums are worthless, and not worth the time of day, and said one day that could be you or me.

#162 TurnerNation on 10.09.12 at 7:09 pm

The latest ‘Toronto Life’ mazagine has arrived. Pages upon pages with real estate development ads and long articles about Toronto’s “stable” condo market featured. Realtors must be in a panic.

Last month brought two realtors buying a home together and settling for less. The comments are funny.

#163 Devore on 10.09.12 at 7:15 pm

#97 Victor

But you forgot to hilite the most important part!

““In Canada, the key priority is to ensure that risks from the housing sector and increases in household debt remain well contained and do not create financial sector vulnerabilities,” the IMF said today in updated global projections that, over all, paint a bleak picture of the world in the post-crisis era.”

#164 maxx on 10.09.12 at 7:21 pm

#127 Interesting Times on 10.09.12 at 12:30 pm

Your mom is a smart cookie. Even at these pathetic interest rates, you can rent one for a month for the rest of your life on the proceeds from the sale of most cottages. No maintenance, no taxes, no fear of a break in…..

#165 Smoking Man on 10.09.12 at 7:22 pm

So everyone still think USA building bull run is still going.

HD Home depot up double since last year. Balance sheet and rev flat. Home builder indexs. Da nana nana Batman.

Only safe real estate in the world right now. 416 sfh with no maintance fees.


#166 Timbo on 10.09.12 at 7:23 pm

“The goal is to sell them all,” said property manager Cindy Zaretsky. “But for now, we’re renting them out month to month.”

Veritas isn’t the only east Exchange District condo developer having trouble finding buyers. M2 Engineering has only pre-sold two of the 43 units in Phase I of its H2O development at 500 Waterfront Dr. And that has owner Michael Mark and listing agent Lisa Derenchuk of RE/Max Performance Realty shaking their heads in bewilderment.”

Slow decent with reality leading the way…..

“The narrative boils down a range of statistics and research reports to document Canada’s shrinking middle class. Most of the income gains of the past three decades, the report argues, were realized by only wealthy Canadians.”

We are richer than we think? Hmmmm…

#167 Hawk on 10.09.12 at 7:46 pm

#74 Mister Obvious on 10.09.12 at 2:09 am


You have the right outlook. Though many people are oblivious to it, it’s simple common sense that if your friends had cashed out somebody else (the buyer) would now be the one to suffer asset deflation for a few years. If someone gains, another has to lose in this scenario.

Hopefully your friends will wait it out a few years and the tide will eventually turn back.

#168 Nostradamus Le Mad Vlad on 10.09.12 at 7:59 pm

#149 Snowboid — “I’m not that good at math . . .” — Neither am I, so you’re probably right.

#153 Blacksheep — “They definitely facilitated is it’s occurrence, but decisions were made on a global scale to inflate housing, giving the Cattle the perception of wealth, postponing the eventual day of reckoning.” — Well said, and spot on.
Thought For The Day: “Give a man a gun and he can rob a bank. Give a man a bank and he can rob the world.” — Jim Truther
China preparing to launch its new gold-backed currency, and China, Russia and the end of the petro-dollar; 2:46 clip Debt and deficits don’t matter. That’s a relief; GS role in the 1998 Russian financial crisis; PayPal Dec. 1 is opt-out date; Show Time or Panic Time? “In simple terms, it means the banks profits are an illusion created by QE-infinity funding.”; 2:07 clip – UK Military Drones replace soldiers who go on dole; 3:41 clip Mainstream America brewing a revolution? Five Fiscal Apocalypses in history.
1:53 clip Putin tells McCain to f*(k off politely; Russian Explosion Sabotage? US and Israel Another Oct. surprise may be a joint strike on Iran, but after seeing the report about Kissinger a few days ago, saying the the elite no longer see Israel in a decade’s time, what is the possibility of Oromneyba turning the other cheek and striking Israel? Vaccine Empire Several empires collapsing, and this is one of them, and Splenda Better to use Stevia drops; Adios, orthodox religions “Humankind is starting to break free of the slavery of belief.”; Soros and Syriageddon, and Soros / Obomba owned by someone in Shanghai. One of Soros’ buddies? 11:23 clip NATO (helping US) are the drug-pushers; Modern India Abysmal poverty.

#169 Hawk on 10.09.12 at 8:04 pm

#103 thinker on 10.09.12 at 9:59 am


Yup, insured by CMHC, collateralized mortgages, nice little spreads, almost all risk taken by taxpayer.

LOL – the banks are laughing all the way to the banks.

#170 };-) aka D.A. on 10.09.12 at 8:15 pm

#156Devore on 10.09.12 at 6:15 pm

I know you to be not that stupid Devore. Your analogies are irreverent, irrelevant and inane. You are simply trying to be argumentative.

#171 penpal on 10.09.12 at 8:17 pm

@ # 155 Smoking Man

“… That’s how a smoking man rolls.”

You gave $ 2.00 to a “repulsive” beggar and then you talk about it on a blog.

Pathetic is how you “roll” dude.

Your post is very revealing about you.

#172 penpal on 10.09.12 at 8:24 pm

@ # 163 aka D. A.

Devore is holding you to account for the BS you have posted here.

Her motives and sanity are not in question – yours is.

#173 Oceanside on 10.09.12 at 8:34 pm

Albertans pay more for utilities and less in taxes than the other Canadian provinces.
No medical payments, no PST, and on and on.
Ah, the Wildrose Party.

No homeowner’s grant in Alberta..

On $100,000 income. Tax in AB: $26,490. Tax in BC: $25,451. You were saying? — Garth

#174 penpal on 10.09.12 at 8:36 pm

@ # 170 aka D. A.

(formerly @ posting # 163, aka D.A.”s comment to Devore at posting # 156)

#175 KG on 10.09.12 at 9:06 pm

I see you having updated the post with IMF story link. That’s great, but isn’t IMF a front for big corporate interests and beggars the countries it loans the money to with unstated motives.Why would you follow such institutions.

You’re right. I should follow you instead. — Garth

#176 John on 10.09.12 at 9:17 pm

Nostradamus Le Mad Vlad, thanks again for all your great links. You know how to consistently offer value.

#177 Gunboat denier on 10.09.12 at 9:18 pm

141 doSouth – I remember in the 80s being told Nanaimo was so near a perfect cross-section of demographics etc that a marketing company set up there for testing and studies.

According to Stascan, only a minor portion of the economy could be termed “blue collar”. Is this just a personal observation?

#178 CT on 10.09.12 at 9:23 pm

If I feel the need for a chuckle all I have to do is read this blog :-) thanks all for keeping me laughing

#179 obert on 10.09.12 at 9:38 pm

..Obama will lose..
Then Romney’s tax cuts, economy in US grows, and interest rates go up… and Canadian house prices accelerate down.

#180 };-) aka D.A. on 10.09.12 at 9:40 pm

Devore and Penpal and anyone else interested

Despite September’s volumes being down 20% this year over last the year to date figures are up 8% over last. And, while still very early in the month of October, already volumes are trending 50% higher than October of the previous year for Single Family Residential and 25% higher for Strata.

Argue in disbelief all you want the fact is volumes, in Kelowna anyway, have been consistent for more than four years and commensurate with those prior pre-bubble levels.

Volumes are increasing as confidence returns. And that ain’t no blue sky.

#181 45north on 10.09.12 at 10:08 pm

DontCallMeShirley: talking about DA: you’re doing Ricky Roma from Glengarry Glen Ross

Ricky Roma the character played by Al Pacino

yeah I can see that

I like the scene where Shelley Levene (played by Jack Lemmon) finds a phone booth beside an airport and pretends he is an international traveller at the airport

#182 randman on 10.09.12 at 10:13 pm

I see you having updated the post with IMF story link. That’s great, but isn’t IMF a front for big corporate interests and beggars the countries it loans the money to with unstated motives.Why would you follow such institutions.

You’re right. I should follow you instead. — Garth

Garth…it’s your blog but

This poster makes a relevant comment and asks a question

Why would you give him such a flippant response?

Shame shame

You’re right. It’s my blog. Stupid comments speak for themselves. — Garth

#183 penpal on 10.09.12 at 10:24 pm

@ # 180 aka D.A.

Your post is meaningless without a source / link to provide a factual context for your assertations.

Remember, you are a Realturd and no one here puts much faith in what they have to say.

Prove it.

#184 Van Isle Renter on 10.09.12 at 10:56 pm

};-) aka D.A. on 10.09.12 at 2:35 pm
#117Van Isle Renter on 10.09.12 at 11:15 am

And yet the ‘core’ everpresent buyers and sellers in any market continue buying and selling. Not everyone is broke, not everyone needs such credit and many of they who do still qualify. Might you are in and of the minority?


Yes, I am in the minority.

I am liquid, have solid investments and could purchase virtually any home I want for cash.

And no, you can’t have my phone #.

#185 };-) aka D.A. on 10.09.12 at 11:05 pm

#183penpal on 10.09.12 at 10:24 pm
@ # 180 aka D.A.

Your post is meaningless without a source / link to provide a factual context for your assertations.

Remember, you are a Realturd and no one here puts much faith in what they have to say.

Prove it.

Puzzles me why you think I would care if you believe me or not.

#186 };-) aka D.A. on 10.09.12 at 11:06 pm

I’m really not trying to save souls here. I just have a thing against anything too one sided.

#187 Freedom First on 10.10.12 at 4:19 am

Garth, I believe buying American$ when Canadian$ has been worth 2.5 cents more and up, believing when Canadian housing and Canadian economy both drop, the Canadian$ will drop, perhaps significantly. Not withstanding the trouble in the world, most likely the Middle East, could easily cause fear and drive people to the U.S. $ in a huge way. Your thoughts please Garth? As always, love your blog, answer withcoming or not! ThanksGarth!

#188 KG on 10.10.12 at 9:15 pm

You’re right. I should follow you instead. — Garth


The feeling is mutual.