Sue’s a yuppie. A worried one. Worse, she’s a codfish yuppie, trapped in a city of godless expectations. “I come from the east coast, where I could buy a flipping MANSION for the price I nearly paid last month for a 3-bedroom semi on a 15-foot lot,” she says. “But what’s a home without a job?”

In sad desperation, the lost Maritime lass has reached out to this pathetic blog for a ray of guidance. “What about Toronto?” she cries. “What about detached and semi-detached homes in the highly-coveted yuppie areas like Danforth, Leslieville, Roncesvalles, etc? For the record, I’m not one of those born-in-the-GTA centre-of-the-universe assholes.

“What is a buyer in Toronto or Fredericton or Victoria supposed to take from chatter about the coming “CRASH” of the Canadian housing market when the “crash” will look different in every area code?”

Well, Sue, damn fine question. As I’ve pointed out enough times to be tedious and irritating, every housing market is unique, but none are different. Toronto, Vancouver, Montreal, Calgary – each big urban area is a cluster of micro-markets, with their own levels of supply and demand caused by area economics and demographics. Plus local wisdom (or lack of it). In a single metropolitan swath, this can cause huge variations.

Having said that, there’s stuff no market in the country can escape. For example, when 30-year mortgages were brutalized, every young couple with a scant downpayment and big house lust was suddenly staring at higher monthly payments. When banks suck up the last of the cash-back loans this month, then 100% financing will effectively be gone. Everywhere. And when Mark Carney inevitably moves rates higher, every VRM holder in the country will be moist. House prices will reflect it.

That’s kinda what the dudes at the IMF were getting at this week when they warned Canada is particularly vulnerable to a slowdown in global growth. This comes not only because we are grafted to the hip of the US, but also because Canada remains one of the few places where the real estate correction has yet to blossom. The International Monetary Fund seems to think it will. So do I.

“An important domestic vulnerability in Canada relates to the housing market. A sharp or sustained decline in house prices could seriously set back the leveraged household sector and domestic demand,” its new report says. It adds: “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.”

Translation: that divine elfin deity known as F had better be ready to clamp down more on mortgage credit, because the world’s brakes are coming on. Growth for the next couple of years will be glacial, suggesting lousy job growth, weak consumer demand and falling real estate values. Yuppies from Fredericton spending fortunes on lean-tos in Leslieville will be toast.

So local matters, but major market forces – the kind I wrote about here yesterday – are hard to withstand. Between now and the end of the year real estate everywhere is going to chill dramatically, dragged down by negative momentum, and any big recovery in the Spring is uncertain and unlikely.

Having said that, there are micro-markets where the 2013 price declines will be substantially less. A few of those were detailed here a few weeks ago, prompting howls of outrage from aggrieved blog dogs craving to see blood flowing from under every Audi A6 and Mercedes E-class parked on an upscale Brussels block driveway. In the GTA, these include the Beach in the east, mid-town hoods like Leaside, plus High Park to the west. Whereas Brampton may lose 25% of its equity, such high-income areas will shed only 5%.

But this is not where the yuppies breed. The young urban professionals with their wannabe metrosexual faux-motorcycles, Lululemon yoga pants and gelato-stained offspring cluster in areas characterized by dodgy structures and without any sustained history of price retention. I mean, in 1965 well-off people lived in expensive homes in Moore Park. They still do, and the houses still are. But back then Leslieville or the Danforth was strictly working-class, with homes that sold for the price of cars.

Nothing wrong with that. But it’s hard to see a new generation coming along willing to pay $650,000 for half a house with no parking and a terrifying basement on a dodgy street. That’s the thing about yuppies. Time will cure it.

So, Sue, rent. Every town and city in the nation will be affected by the events set to unfold. Some will be crumpled, some just dented. Places where people always have wanted to live, and paid a premium to do so, will retain buyers and sticky prices. Areas where people moved just because cheap mortgages got them in the door, don’t stand a chance.

Besides, what’s wrong with Fredericton?


#1 Mike on 10.09.12 at 9:42 pm

Who is going to be next to warn about the bubble after all the MSM and now the IMF?
I know one thing, the loud “RE will keep going higher” chatter about real estate that was impossible to escape daily in our Vancouver lunchroom was replaced by quiet whispering “Have you still not sold your house yet”? :)

#2 Doom on 10.09.12 at 9:44 pm

I miss the photos of women…guess there is no house porn anymore :(

#3 Furst on 10.09.12 at 9:49 pm

Self Reflection – A Poem by Furst

The sun has set, a blog post is near
Garth at his lap top, writing without fear
Around the country, his faithful followers await
Like a young lad on his very first date

F5, F5, yesterday’s posting is still on the screen
Read the comments again, nothing I haven’t already seen
Now, I’ll just google ‘Canada housing bubble is here’
Searching for hits of real estate fear

Crash and Correction, words of hope that give a chance
To one day, try our hand in the real estate dance
F5 once more and alas, a new witty image
Admonishment, warnings of real estate pillage

We salivate, knowing we’ve always been right
To abstain from buying or be part of the plight
Reading the last line of the post, a sigh is let out
We know our time is near, there’s absolutely no doubt

Now what to do as my day is complete
Was about to leave a comment but instead hit delete
Instead, let us end this night like well-trained robots
Visit MLS, smirking at the large number of red dots

#4 Big Bear on 10.09.12 at 10:05 pm

Mr Turner, I left Victoria in June, spent 3 months in Guelph in a rental that was for sale. The owner (very fine gentleman) was recently introduced to your site with a suggestion from yours truly that he price it to sell and cut his losses. I’m currently in London where there seems to be opportunities in my line of work, and must admit, I very much like what I see. Easily 60% more affordable than Victoria, and about 25-30% more affordable than Guelph. Something about being close the the Center of the Universe or the ring of fire makes people silly I guess. Seriously folks, if you’re looking for an affordable city with miles of bike paths, lots of trees and a little less madness and melting pot demographics than TO or the West Coast, what are ya waiting for? I’ve been coast to coast twice over the last year. London has what you’re looking for.

#5 Smoking Man on 10.09.12 at 10:09 pm

171 Penpal.

Revealing about me. So would you rather have him making you egg mcmuffins. Some people are not ment to work. They are art in the back drop of golden buildings.

Repulsive homeless have a place. Just not preparing food.

How do I know this Penpal, the force, yoga told me himself.

Trying to figure out what this means.

:) – Mo

#6 Smoking Man on 10.09.12 at 10:11 pm

Penpal. Typo. Yoga. Is actually Yoda.

#7 Seven Stars and Orion on 10.09.12 at 10:15 pm

My question is, if the hipster crowd is the only crowd ignorant enough to overpay for termite traps in nouveau-choix ‘hoods, how is a correction going to stop them? I mean, would they even notice a correction? I think financial discourse is just so much white noise for this demographic. More like, hey, we CAN afford to buy in hipsterville!!!! Throw down a bid like a Boss!!!!!
Won’t more dummies just pile on, continuing the slow gentrification and negating any correction in these inner city, formerly working class enclaves?

#8 TurnerNation on 10.09.12 at 10:18 pm

Update: the crazy C01 semi (1.8 mill) that won’t sell. now offered with a rental option.

6995 monthly…


#9 dinglehiemersmit on 10.09.12 at 10:18 pm

no drop in gta garth no matter how much u try .. house will keep going up here and if you don,t like it move up north !

#10 Smoking Man on 10.09.12 at 10:19 pm

171 old man

We never know what hand the shuffel machine will hand us the next day. A wise post old man

#11 Timbo on 10.09.12 at 10:21 pm


“Prognosis for Mr. Economy…

Mr. Economy now has a serious chronic condition with limited prospects of a full cure. He might continue to live but in an impaired state of no or low growth for a prolonged period. The threat of a sudden life threatening seizure cannot be discounted. Constant management will be needed.

Happily, Mr. Economy remains remarkably optimistic. Perhaps he recognizes the truth of Mark Twain’s observation: “Don’t part with your illusions. When they are gone you may still exist, but you have ceased to live”.”

It’s going to get better folks…right?


“On Friday, the Arkansas Times reported that Hubbard called slavery “a blessing” in a 2010 book, while Mauch wrote a series of letters to the editor over the last decade supporting slavery and opposing former President Abraham Lincoln, while also organizing an event with a keynote address in favor of Lincoln’s assassin, John Wilkes Booth. Fuqua wrote in a 2012 book that he supports deporting all Muslims and wants to create a system that would allow parents to seek judicial consent to kill rebellious children.”

Bloody lunatics are coming out of the woodwork. Time to build another bunker and load up on ammo…

#12 Old Man on 10.09.12 at 10:25 pm

Garth hit Moore Park, as lived in area for many years, and will tell you a story that few will never know about, as one day at my office in the TD Centre, this man said do you want a ride home instead of taking the subway. So went into his Benz, and he knew where I lived, but turned off going north from Mt. Pleasant Rd. on the first street south of St. Clair Avenue, and made a left turn on this street.

He wanted to show me this home, whereby, he knew someone from the past going back to perhaps the late 1950’s and guess who owned it, and lived in Toronto on occassion? None other than Brigitte Bardot, as he knew her personally, as they had a business relationship, or was it something more?

#13 prairieperson on 10.09.12 at 10:26 pm

I like Fredericton. However, like all cities far from the periphery such as Victoria on the West Coast, the action, whatever kind you want, isn’t there. It is in TO and Vancouver. Yuppies and puppies want to be where the action is. They want to gather. These are the people who, in 10 years, would normally be moving upscale. House prices have disrupted the normal flow. I was priced out of the market many years ago. It was not a pleasant experience. Later, I got back in and bought my heart’s desire. Still, the priced out rankles. This downturn of disappointed dreams is going to have an impact.

#14 Not 1st on 10.09.12 at 10:26 pm

Garth, you do know that the IMF is a criminal organization that is an offshoot of the bildgerberg group and others which intentionally travels the world peddling debt to those who can least afford it and then comes back to collect one day. They have been everywhere, South America, Europe, Africa. Canada was wise to boot them out of here 20 years ago when they were sniffing around trying to “bail” us out.

That is the dumbest comment of the day. And you had competition. — Garth

#15 phinny on 10.09.12 at 10:26 pm

Lived in Freds when I carried a rifle instead of a chainsaw.

It is a really sweet town.

#16 Strataman on 10.09.12 at 10:28 pm

Love the picture….it is not allowed in a condo; that is the building envelope that the half assed yuppie dog has perforated! When you own a condo you own AIRSPACE nothing else! Disagree? Try to plant a rosebush in the lawn or make a lawn where the rosebushes grow! The idea that strata title is even somewhat slightly similar to home ownership (free title) is the largest scam yet no one even speaks of it including YOU (yup yelling) Garth!

#17 Van guy on 10.09.12 at 10:29 pm


You’re so lucky you’ll only lose 5% equity.

So sad you’ll lose 40%. — Garth

#18 TO Reader on 10.09.12 at 10:31 pm

Thanks, Furst. I appreciate the rhymes. First, I thought it was by Frost (Robert), then I saw it was by Furst.

Love how Garth refers to F as the elfin deity.

Already know the housing storyline, but come back to the blog for little anecdotes, humor and the comments.

Keep up the good work, everyone.

#19 Coffin on 10.09.12 at 10:34 pm

I couldn’t agree more… I just sold my place in Calgary in Sept and I think it was a great choice getting rid of debt.

#20 Elmer on 10.09.12 at 10:34 pm

The problem is it’s too hard to find a job in smaller towns, so many of us are forced to live in Toronto. I’d much rather live in Fredericton or St. John’s if I could find a decent job in my field there. Why does every company insist on locating its main office in Toronto?

#21 TurnerNation on 10.09.12 at 10:35 pm

Sounds like our protagonist has a case of potty-mouth. That’s not how we do things in godless T.O. Unless the Leafs lost. Which is always.

#22 T.O. Bubble Boy on 10.09.12 at 10:37 pm

So, average prices in most high-end hoods can rise by 8% in a year, but can’t fall by 5%?

There is a bubble in reno/teardown properties in North Toronto. There is not infinite demand for $1.5M McMansions (built on lots from torn down bungalows).

Yes – rich people will always have money, even in housing market declines and in recessions. The problem is – even Canada’s Top 1% cannot afford houses in Leaside or Moore Park. $250k in annual income cannot carry $6000-$7000/month for a $1.5M McMansion like this one in Leaside or this one a bit further south in Rosedale. And, if the McMansions aren’t affordable, where is the market for $800k-$1M tear-down bungalows like this in Lawrence Park or this in Leaside/Rosedale???

There are only 150 sales a year in Leaside out of 5,000 houses. When demand meets supply in micro-markets like these, prices can stick. Similar story in places like Kits. — Garth

#23 Smoking Man on 10.09.12 at 10:47 pm

Old man

Google on you tube. Grass roots. Live for today.

My code. Crank the speakers. That’s where I come from.

#24 Victoria on 10.09.12 at 10:48 pm

I have been trying to find the average family income in Leaside, Moore Park, Rosedale.

I know there are a Stats Canada paper “floating around” but I can’t seem to find it.


#25 Jounce on 10.09.12 at 10:49 pm

Houses are consumables, not investments. They age, are taxed, wear down and keep you locked in.

Never was, never will be.

It is the insidious effects of inflation, the hidden hand that bites you with fiat dollars that wears your wealth away making it look like you made money.

For most, real estate speculation is a mugs game.

#26 Realtor #1 on 10.09.12 at 10:53 pm

I told you so..
and now Garth agrees with my past posts.
If you think you are going to buy in prime areas with 25% off asking price think again. Maybe in Queen street east where half your neighbours are trendy people with tats and the other half are white trash.

Prices will not dip below the 2008 level.

#27 kenken on 10.09.12 at 10:58 pm

there have been warnings of price moderation, price decrease, housing collapse!!!
Shiller’s theory is that prices always revert back to means!
And as Garth says, prices in different places around Canada will reduce differently depending on income.
So let’s do this: what will be the price decrease expected for the different parts of GTA (Toronto, Markham, Richmond Hill, Brampton, Mississauga, Oakville, etc …), Montreal, Calgary, Victoria, Vancouver, etc ….
can we get mean/median income and house prices for these regions and expected price change for mean reversion? thanks

#28 wallflower on 10.09.12 at 10:58 pm

I am typing notes from my GGGrandather’s document – the year is ~1867 and he writes about a fellow he met in a sawmill in Parry Sound. From my perspective, it strikes me as a splendid analogy of the Toronto Real Estate market…

“He fell on the circular saw and cut off the upper half of his head; the piece fell into the water with the saw-dust and was carried into the Georgian Bay. They say he breathed for three or four hours after this although showed no other signs of life.”

#29 dosouth on 10.09.12 at 11:00 pm

#171 – Gunboat dude from last post….

Your “Stascan” link is broke and 2006 is so 2011 for surveys.

Just Google ‘Nanaimo Blue Collar town” you’ll get the picture, I hope.

#30 Old Man on 10.09.12 at 11:09 pm

#23 Smoking Man – great group and good song – TY.

#31 TimV on 10.09.12 at 11:11 pm

I am not at all convinced of this “Leaside” hypothesis. If I was earning the $400k/year needed to carry a $1.5m house, Leaside would look good when a comparable property in say old East York costs $1m. But if the comparable house drops to $750k … well, I think the economic principle of substitutionary goods applies (I’d spend the $750k I saved on a really nice cottage; or just put it in the bank – I like that even more, actually).

Excluding tear-downs, it seems to me that price:rent are pretty consistent from Leaside to Leslieville to Danforth. If a price:rent of 20 is unsustainable in Danforth, then I can’t see why it is sustainable in Leaside.

Maybe I’m missing your (Garth) point, but the thing about yuppies and semi-detacheds seems like a red herring. The new generation coming in already is willing to pay insane amounts for small 3 room houses with negligible backyards. When I went looking for a house in Danforth, all my competition were other young couples or new families. Most houses were staged with baby cribs. These houses you disparage (notwithstanding the “nothing wrong with that”) already do attract the next generation. It’s not yuppies who pushed the price of a semi up to $650.

Why do they attract the next generation? I don’t know. But they do. I have my reasons (transit, neighbourhood, proximity to Danforth), but they are somewhat specific to me.

[As an aside: Furst, you continue to amaze me].

#32 Grim Reaper/Crypt Speculator on 10.09.12 at 11:12 pm

#10 Smoking Man on 10.09.12 at 10:19 pm

171 old man

We never know what hand the shuffel machine will hand us the next day. A wise post old man


I know bwhahahahahahaha

I’m ready for Hallowe’en and you’ll figure out who I am ahahahahaah

#33 Aussie Roy on 10.09.12 at 11:13 pm

National Bank of Canada foreclosing Americans’ homes over credit card debt

The National Bank of Canada is attempting to foreclose upon hundreds of American families’ homes in California over old credit card debts, according to a published report.

Bay Citizen reporter Rick Jurgens writes that the bank’s debt collection unit, Credigy Receivables, began filing foreclosure lawsuits recently that take advantage of a loophole in California’s laws that lets them go directly for a debtor’s home even if that property was not offered as collateral for a loan.


#34 THE CELIAC HUSBAND on 10.09.12 at 11:19 pm

If one wants to rent in Calgary, say a 2 BR condo. What’s the monthly asking? 900? 1000?

Here, if one does not want to jump into buying a house, you can rent a nice country lane home with a yard big enough to start a hobby farm for about 300.00 Euros, or about 400.00 bucks. Move to a town the size of Red Deer? maybe a bit more. But not by much.


#35 Victoria on 10.09.12 at 11:20 pm

I wonder if prices will stick in Oak Bay, Uplands, and Ten Mile Point in Victoria.

The nicer the area the less they fall?

That is not the point. Supply and demand dictate prices. Right now demand in Oak Bay and Uplands is collapsing. — Garth

#36 renters rule on 10.09.12 at 11:20 pm

I don’t know the T.O. neighbourhoods… I don’t see anywhere in the greater van area escaping with only 5%….. the range will be, after it is all said and done, 20-50%, in my opinion.

Nothing has only gone up modestly, the housing market is completely interlocked (entry level, move up, “good schools’, HAM investment magnet, investor flip target, tear down-build granite and stainless palace; ALL completely inter-related in my opinion).

I do agree however that verything is “local”. The older, well established neighbourhood in West Vancouver that my parents sold out of in June 2008 actually peaked in August 2007. Been pretty “flat” since then, but the transactions also dried up, very few properties of the modest middle class variety have traded since then (monster houses draped on the rocks above the ocean are another story!); that modest market has already be “frozen” for a few years. There was no bounce after the 2008 GFC….what had been going on in Richmond and the West Side has been completely different (HAM magnets).

#37 TimV on 10.09.12 at 11:23 pm

This seems like a reasonable time to ask other blog commentators the question I asked a couple days ago: what will depreciate more? Land, or the houses on the land?

Originally I assumed land value (ie, the price of a tear-down) would see a bigger correction. However, I’m no longer so sure. Curious what others think.

#38 Saskatoon-Living on 10.09.12 at 11:31 pm

Garth, do you think 25% decline in Skatch is realistic, or are you gonna save the response for the well overdue post on SK??

#39 Jay Currie on 10.09.12 at 11:35 pm

Micro markets are nothing terribly new. Back in the early 1980’s you could sell a house in Kits, you couldn’t in New Westminster.

In my little part of the world there are something like 80 1m+ houses for sale in Oak Bay. As credit tightens and mortgage rates rise some will sell, some will drop their price, some will be pulled from the market; but the net effect will be a decline in price.

Markets “clear”. The question is how quickly price drops to meet demand. Put a good dose of panic into a market and people begin to race for the sale and for the bottom.

Not pretty.

#40 45north on 10.09.12 at 11:36 pm

Whereas Brampton may lose 25% of its equity, such high-income areas will shed only 5%.

high-income core areas are decoupling from outlying areas. Two reasons: rising gasoline prices and withdrawal of credit. Populations in outlying areas have to drive much further to get to work, school and social activities. Like 10 times further. Compare Aurora Ontario to Roncesvalles, trips are 10 times longer. Plus population on Roncesvalles can take the TTC or even a taxi. As banks assume more risk for their mortgages, credit will be withdrawn for properties in outlying areas. Prices follow credit.

#41 joe on 10.09.12 at 11:39 pm

#27 Kenken – Its more complicated than that, you forgot one variable, and its debt levels, for example Alberta brings the highest incomes but the average Albertan also carries the highest debt. So although a place like New Brunswick would have lower incomes also has stable home values, debt never inflated, therefore the measures taken by government to reduce debt levels, will not affect New Brunswick as much as high earning Alberta. Just sayin, its more complicated then it looks at first glance.

#42 renters rule on 10.09.12 at 11:41 pm

@#37 TimV

I think there are 3 answers (to your somewhat obsessive question!):

where the bulk of the value is in the building/improvements — i.e. condos and townhouses where the land component is a very low % of the value, it will be the depreciating improvements that hit the price. Where there is an older/modest house on a chunk of land, the land will depreciate the most. Where a house is fairly new, there will be improvements depreciation as well as a hit on land value.

At the end of the day housing is just a commodity, a “real” asset. Commodities trade at the prices people are willing to pay for them.

#43 45north on 10.09.12 at 11:45 pm

oh yeah another reason, it’s not just the cost of gasoline, it’s the time. Trips in the outlying areas typically are 10 as long as trips in the core area. They don’t take 10 times as long but they are longer, like twice.

#44 Tony on 10.09.12 at 11:54 pm

Re: #27 kenken on 10.09.12 at 10:58 pm

Stouffville will take one of the biggest hits.

#45 Tim on 10.09.12 at 11:56 pm

“There are only 150 sales a year in Leaside out of 5,000 houses. When demand meets supply in micro-markets like these, prices can stick. Similar story in places like Kits. — Garth”

Based on that line of thinking, then the entire west side of Vancouver will only see a minor drop–except for the characterless, dinky little crowded condos in Yaletown where there is an oversupply of ugly glass towers.

There are currently almost 1,000 properties for sale on the Westside of Vancouver. There are 26 listings in the Leaside area. Both have about the same number of houses. Do a little more research before you type. — Garth

#46 meslippery on 10.10.12 at 12:03 am

Dear smoking man
Do you think twice before you go out?
I mean you cannot smoke almost any where you go.
When it gets cold who wants to go out side to smoke?
I smoke and mostly stay at home and party here.
Smoke if you want to.
You will save a lot of money having a party at home
Beer and smokes.
What do you think this dose to bars and such that will
not accommodate us?
I like the fact you cannot smoke.
Good reason to stay home and not waste money.

#47 Leon Lens on 10.10.12 at 12:06 am

Tim V, I cant answer your question, but it’s a good one as was your earlier post. Time you started your own real estate blog – driven more by thought and less by ego.

#48 Van guy on 10.10.12 at 12:07 am

There are only 150 sales a year in Leaside out of 5,000 houses. When demand meets supply in micro-markets like these, prices can stick. Similar story in places like Kits. — Garth

I thought prices would be sticky in Kits too. But they’re not. Lots of inventory and price reductions. Why would you think Kits prices will hold? Just months ago you said no area is safe in the lower mainland.

#49 truth hammer on 10.10.12 at 12:07 am

Housing prices in Canada will crash regardless of the global economy…….affordability is so far of of wack with incomes that reality demands it……..remember the tuplip mania in the 1630’s.

Pyramid scemes and ponzi scams can not outrun the mathematics of population…..demographics not withstanding……..real estate has already absorbed a 70++ % participation rate. Flaherty barely touched the qualification rules and the market crashed…what does that say about the strength and viability of the market going forward?

It reminds me of an old investment joke about a guy who continually buys a rising stock on his brokers advice…….the sucker begins to get scared and phones the broker to sell his huge number of shares at a ‘profit’….at which he’s been buying. He yells at the broker…”Sell”…..the broker replies ‘To who ?……You’re the only one buying”.

Alas the pool of suckers in Canada is like frogs on a flood plain after the sun comes out and the mud starts drying. They flip and flop….wriggle and slip….but to no avail….the juice is all gone up in a vapour and left them high and dry.

In fact these are the best times to be an investor……the smart money goes to work when the worst has been priced in…….many newbies fixate on the headline news….Baltic Dry….Long Beach traffic…but this is for amateurs……look instead at aggragate orders and intermodal railcar utilization.

Dow theory 101 says transportation is the forerunner of the general US economy turning……and the Transport Index has been turning up. ……..too bad it’s way too late to save the suckers in Canada’s real estate cess pool. They’ll have to sit by while people makes big money in stocks while they’re trapped in their McCoffins.

#50 willworkforpickles on 10.10.12 at 12:11 am

Went to Canadian Tire today and noticed the price on tents has gone up.

#51 Oceanside on 10.10.12 at 12:19 am

That is not the point. Supply and demand dictate prices. Right now demand in Oak Bay and Uplands is collapsing. — Garth.

I have a friend that has moved from Victoria and has been trying to sell his (now empty) 1948 renovated home for 6 months, bought it 3 years ago and is asking less than he paid…With no action.

Neighbour in Qualicum area has house listed for $40,000 less than he paid in 2010, people don’t even come to look.

#52 Y is HWY 2 only two lanes ??? on 10.10.12 at 12:32 am

Here’s the plan. Move to Alberta. Illegally traffic people from Eastern Europe to the province. Gain a million dollars through tax evasion and by exploiting them. Get caught and pay a quarter of it back. Pocket the rest of the money. Absolute BULL****!

#53 betamax on 10.10.12 at 12:34 am

Garth: “such high-income areas will shed only 5%”

I think you’re under-estimating the amount of debt, even in ‘high-income’ areas. I know a couple who bought a 3.3 million dollar house, but they still took out a 2.5 million dollar mortgage to buy it. The fact that they’re making good money and had $800k from a previous house sale didn’t stop them from leveraging themselves even further. Even at emergency rates, it’s a big nut to cover every month. One job lost or a divorce and they’ll sell for whatever the market will offer.

#54 2nd class on 10.10.12 at 12:36 am

Hey garth,

What about the 500 000 – 1 million range in kelowna?

See 30-40% coming off them?

If so I might be retired by 35!

#55 Aussie Roy on 10.10.12 at 12:37 am

Aussie Update

Singapore cools their Housing bubble, RBA trying to keep ours inflated

Up, down or sideways? Debate has intensified about the future direction of Australia’s property market since the RBA announced a 25 basis point cut to the official cash rate this week. It’s not the first cut we have had. Australia has experienced five downward adjustments in monetary policy since November last year as our economy starts to become increasingly sluggish.

Singapore’s new measures

This week, Singapore’s central bank, the Monetary Authority of Singapore (MAS) has taken such action to help prevent its citizens over extending themselves. Effective from the 6th October 2012, Singapore will limit all new residential loans to 35 years. Any loan over 30 years in duration or with a period that will extend beyond the retirement age of 65 will have tighter loan to value ratios. For this group, the maximum LVR will be 60 per cent for a borrower with no other residential property loans or 40 per cent for borrowers with one or more residential property loans.


Unemployment hits 10%

One of the take home messages from yesterday’s 25 basis point drop is the Reserve Bank’s worry unemployment is starting to rise.

On Monday, Roy Morgan research released the results of its latest unemployment and under-employed survey, showing unemployment in Australia is now at 10 per cent, and quite a bit higher than experienced during the GFC.


Mortgage rates plunge to “emergency” GFC levels

There is growing concerns Australia’s miracle economy might not be in as good shape as our politicians would lead us to believe. This view was reinforced today when the Reserve Bank of Australia was forced to cut official interest rates to help stave off what could emerge as the second stage of the GFC.


Hopes for a surge in sales of residential property …… research reports?

The concensus among private housing data providers is the Australian residential property market is on the mend. Prices are once again rising, after our “mini” housing correction.

But it is hard to find the drivers of this new found confidence.

The Reserve Bank of Australia has today released the August update of its financial aggregates. Month on month growth in housing finance remains stuck on 0.3 per cent for the third consecutive month, the lowest since records exist. This pulled annual housing credit growth to just 4.8 per cent, also the lowest figure since records started 35 years ago.


#56 willworkforpickles on 10.10.12 at 12:39 am

#7 I thought the choice moved out of that neighborhood.

#57 DonDWest on 10.10.12 at 12:44 am

I had to laugh at everyday Canadians reaction to that IMF article in MacLean’s. Canadians were literally explaining to the world that they knew more about economics than everyone else and that Canada is the beacon of light in a world filled with darkness. Apparently, housing is destined to go up, up, and away because we’re the world’s sanctuary. It truly was quite a poetic display of arrogance.

My response to such emotional drivel, dear Canadians, is the following: Let’s say there’s an off chance that you’re correct and Canada is indeed the Garden of Eden. What you haven’t considered is that the world is run by centralized banking. I’ll spare you all of the details how fractional reserve banking operates, but in simple terms, our world banking system is comparable to a mafia. The IMF is the Godfather of this mafia. When the Godfather makes an announcement that the music stops, you better believe the music will stop! Brace yourselves!

#58 lookoutbelow on 10.10.12 at 12:46 am

Garth, you actually included the words “CRASH” and “crsh” in today’s post. I have been reading this blog for the past two years and I don’t believe I have seen you pen that word before.

Tell me I am wrong….

#59 Gunboat denier on 10.10.12 at 12:51 am

29 dosouth – sorry about the link. Try searching “statscan 2006 community profiles”. The latest they have. Anxiously waiting for the new info.

I dont have to google Nanaimo. I grew up there.
Harewood. While there were millworkers, loggers,
truckers and such, the ‘hood also had bankers, office
managers, salesmen, teachers. The “other” side of town
(townsite, Departure Bay) had more professionals. It’s in
each persons perspective. I think you can consider other
coastal towns much more “blue collar” than Nanaimo.

24 Victoria – see if you can get it by the same search. It wont have every neighbourhood, but will give you separate suburbs.

#60 Gunboat denier on 10.10.12 at 12:55 am

Maybe try this. Dropped a few characters.


#61 Ronaldo on 10.10.12 at 1:04 am

#37 Tim – In answer to your question. Here is my take on it. Since we pretty much know the cost of building and average 1200 s.f. house, we can well assume that a property that has risen in price (Vancouver) from $750,000 to 1.2 million in a short time period can only be attributed to the illusionary value of the piece of land underneath the house. In this example, $450,000 which I would attibute to this illsionary value. So, a correction of $450,000 or 37.5% is certainly not out of line. So to answer your question, it would have to be the land.

#62 Nostradamus Le Mad Vlad on 10.10.12 at 1:13 am

“. . . the world’s brakes are coming on.” — Say the IMF slams the brakes on, but they are worn out. Do we just keep careening off the face of the earth, with nothing to stop us?

That would be akin to Felix Baumgartner, who is going to jump out from a balloon at a height of 23 miles, then for the earth to exit stage right. What is there to stop him from free-falling through space ad infinitum?
#3 Furst — Another excellent poem! Keep it up and give Garth a good run for his money!

#21 TurnerNation — “Unless the Leafs lost. Which is always.” — Out of interest, what century did the Laughs last win Lord Stanley’s mug in?
Preparing “US corporations are sitting on more cash than at any point since World War II.”; Warning Seems the govt. is provoking sheeple; Restructuring an unsustainable federal debt machine; Capital One targeted More cyber attacks; Jack Welch Still speaking his piece; Robert Fineberg and the IMF Who is right? IMF Pt. 2 Who will buy their assets? Financial Job losses in EZone; Oil spikes higher; Boomers Are Working Well Past 65 which doesn’t leave much room for young ‘uns; State of the Economy; Steve Wynn The US Fed and Bernie Madoff have something in common; Big Warning China slowdown leading to job losses in US; Walmart Disgruntled employees.
Highway Racetrack Running wild and free; Animal Photobombs 16 of them; Walking on Water Insects; The Eagle Has Landed and taken a croc in the process; Foretelling? See head and pic; Men Who Stare At Pandas; Floating BdB Cities where masses are controlled and kept quiet; UK – Israel developing SARS-like weapon; Global Warlords and humanity’s role; ADHD Mercury in pregnant women seems to play a part; Fast Food Stay away from these items; US Navy and Ouija Boards Watch the last 75 mins. of The Exorcist: The Version You’ve Never Seen. That will turn heads, in more ways than one; China doesn’t have to take over the world. The cycle change dictates it’s their turn anyway, and Kissinger; Old Codger? No, old spider.

#63 TRT on 10.10.12 at 1:36 am


I have a beef with this blog’s opinions being too one sided as well. Not balanced at all. Guess a function of the types of posters who are attracted here.

They too call me a Realtor. Even when I tell them I’m not one, they still call me a Realtor. WTF?

#64 TRT on 10.10.12 at 1:42 am

I say my hood, Surrey, will only lose 5% max as well. If anyone can say it will be different in the Beaches, well i know my local market well..

if everyone starts chanting that mantra, everybodys neighbourhood will only go down 5%.

In a major correction, all places go down! No exceptions.

#65 TRT on 10.10.12 at 1:46 am

Its settled. Best time to buy was 2008-2009.

If anyone thinks Vancouver can go down 40% and the Beaches 5%,…. well……

#66 Junius on 10.10.12 at 1:54 am

#26 Realtor #1,

You said, “Prices will not dip below the 2008 level.”

Of course they will. As for your other comment about agreement with all your previous post – please – give us a break.

#67 Victoria Tea Party on 10.10.12 at 2:00 am


…doth point to us, warning of our VERY OWN real estate Armageddon approaching? Pretty much.

The International Monetary Fund, a wizened group of financial incompetents, is led by a holier-than-thou French lady who would have been so much English tripe had Lady Margaret Thatcher been in power at this time. The IMF is the defacto economic eunuch at the newly-repainted House of Monetary Debt and Destruction.

And it has landed on our fair shores with a doom and gloom message, inspite of themselves.

Here is the IMF quote stating the obvious of Canada’s distended, but still apparently vibrant, housing market:

“…the key priority is to ensure that risks from the… housing sector remain well contained and do not create financial sector vulnerabilities,…”

The most important line in the G&M yarn follows that above quote. It’s the journalist-in-question’s line, not the IMF’s:

“…updated global projections…, over all, paint a bleak picture of the world in the post-crisis era.”


We’re in a post crisis era? Well, excuse me, Mr. Reporter!

The way economic things continue to unravel in giant fits and starts (beginning with 2007) there is plenty more unravel left to go! Lots and lots, by golly.

And that’s the problem, and why the IMF has no more control over the current currency wars (a major cause of our troubles) and everything else financial, than has a Chinese Panda bear living in a zoo.

Why? Because of the incredibly more powerful special interests that are at play including the industrialized world’s broke and busted sovereigns, our friendly denizens of the financial markets, and the markets themselves, of course.


can only be unwound if one or more of the above special interests gives up power to cut back on the frictions that deny us the ability to BEGIN to resolve this debt nightmare. Like THAT will happen!


If you want to know just how stinky it’ll get in 2013, watch incumbent presidential candidate Mr. Obama’s body language carefully these days.

He knows what’s shakin’ there, Mr. and Mrs. Smith! Yup.

Do you also get the impression that he’s trying to throw the election over to Mr. Romney, or is it Big Bird?

Who can blame him if he is? What a disaster Mr. Obama inherited and has since allowed to grow and fester to this current and dangerous moment.


Did you watch last night’s The National’s piece on a group of homeless Californians living in their motor vehicles in church parking lots in “rich” Santa Barbara?

And things are improving there? They don’t think so!

And Victoria real estate’s funk will be largely over by January, or after a luxurious lunch tomorrow?

Unicorns, fairy tales, teddy bears and DOMs (days on the market).

It’s all good! Honest! Another lattee should do the trick.

#68 aaci-home dog on 10.10.12 at 3:01 am

Small rural Towns with a good industrial (job) base seem to be doing ok where I am in BC. Except for the recreational sector, real estate is stable (or boring). Currently there are far more interesting places to put some spare cash than in real estate.

#69 eagle eyes on 10.10.12 at 3:16 am

The other day I heard that many Chinese builders in Richmond BC imports most of their building supplies directly from China, ie lights, windows, doors, hardware, trim, etc. The Builder would make a trip to China and buy everything needed for building a house. I couldn’t believe it. I figured when you factored in travel, time, and shipping costs, the cost savings couldn’t justify this. When I was told the actual savings even after all the costs I was floored!!! They would pay a fraction of what it would cost if everything was purchased locally. Factor that and the fact that they sometimes hire workers under the table, now even real estate in BC is Made in China.

#37 TimV “What will depreciate more? Land or houses?

I’m thinking that houses will depreciate more because soon enough they’ll be selling them at the Dollar Store along with all the other Made in China items.

#70 Dan7 on 10.10.12 at 3:56 am

How will Markham Be affected especially Major Mac and woodbine area (Victoria Manor) ?

#71 Buy? Curious? on 10.10.12 at 4:35 am

Garth, your picture today is of a small grow-op, of, er, tomatoes. A rookie one at that. They should install some solar panels so there isn’t a spike in electrical usage. And that’s what some people will have to do to offset a rise in interest rates. People won’t be able to fork out $50 for a 24 in a couple of months. You seem to be one of the few people suggesting that a rate rise is around the corner and that a few points up will wipe out all the poor people who bought in suburbia. Why doesn’t the media report this? Why can’t we see more analysis of what a housing correction, that has happened in almost every Western country, will look like? Is there a reporter that is brave enough to do a story that everyone else is afraid of?


#72 Humpty Dumpty on 10.10.12 at 5:00 am

John Williams from Shadow Stats with an Unbiased view.


#73 John on 10.10.12 at 5:47 am

“Having said that, there’s stuff no market in the country can escape. For example, when 30-year mortgages were brutalized…”

People believe this stuff. It’s secondary. You went on to talk about an “IMF warning”. It’s all spin. The unwind. The impossible deleverage.

Now, back to snow on the TV: “Carney will eventually raise rates…”

What has the change in the 30 year rate, Carney and the IMF “warning” got to do with the fundamentals of Canadian real estate?

Almost nothing. You’re talking political spin. It’s like a dog chasing its tail.

#74 Mark on 10.10.12 at 7:56 am

“The other day I heard that many Chinese builders in Richmond BC imports most of their building supplies directly from China, ie lights, windows, doors, hardware, trim, etc. The Builder would make a trip to China and buy everything needed for building a house. I couldn’t believe it. I figured when you factored in travel, time, and shipping costs, the cost savings couldn’t justify this. When I was told the actual savings even after all the costs I was floored!!! They would pay a fraction of what it would cost if everything was purchased locally. Factor that and the fact that they sometimes hire workers under the table, now even real estate in BC is Made in China. “

You didn’t really think those bathroom fixtures at the Homo Depot that have $500 stickers on them cost any more than about $25 to make in China, did you?

#75 Gypsy Kid on 10.10.12 at 8:56 am

Big Bear, there are people who like the “melting pot demographics” as you gently put it to cover up your fear of the “others”…however, yes, London is nice and affordable. Good luck to you.

#76 SSF on 10.10.12 at 9:03 am

What about Oakville? 10% initially? 40% when done?

#77 Eaglebay - Parksville on 10.10.12 at 9:15 am

#30 Old Man on 10.09.12 at 11:09 pm
#23 Smoking Man – great group and good song – TY.

You two, get a room.

#78 TorontoBull on 10.10.12 at 9:16 am

great topic Garth…
now that the correction is underway here are attributes that will sustain RE values:
1. Close proximity to good schools
2. Low crime rates
3. Close proximity to transit (subway ,LRT, GO), which improves access to central business district and other employment centres.
4. Close proximity to amenities (restaurants, services, community centres, shopping centres, etc.) in other words high walkability areas , where you don’t need 1 car per person.
On the other hand, areas will see substantial price declines possess the following attributes:
1. properties lying in the immediate vicinity of a highway will carry a handicap. Anecdotaly, I have friends who live 500m from 401 and need to sleep with earplugs!
2. Low income areas – I don’t want to sound racist but research from US shows (David Harris, 1999, for example) that neighbourhoods with higher concentration of blacks tend to lower neighbourhoods’ desirability.
What have I missed?

#79 ozy - I beg to differ, again on 10.10.12 at 9:19 am

Prices in way-expensive hoods will also drop 10-15% (not only 5%). If 2008-2009 was any example. The difference is that it will stop there and it will rebound earlier in years ahead.
The reason for the 10-15% drop, is the extreme overpricing compared with value in those hoods. Money buys you 1 full bath home in those areas (made you ask how pretentions folk(lore)s folks can live there?) it only buys you a small crap of land, so almost zero value\price ratio.
Also, there is a low value\price ratio since detached on 25foot lots with mutual drive sell for (but not worth) 900000 when detached on 40foot private drive, same street are 1100000 milion. A sign the elastic band is overextended and is gonna hit many of the suckerilos on the face soon.

To see why I can’t call those buyers yuppies:

#80 Bigrider on 10.10.12 at 9:20 am

Garth, do you live in Caledon, Leaside ,Rosedale or do you have multiple addresses in different areas of the GTA ?

As Vinnie Bobarino would shout while rubbing head to alleviate the pain of thought, from the T.V show Welcome back Kotter….

“I’m all confused !! ”

I’m around in the dark. I’m everywhere. Wherever you can look, wherever there’s a fight, so hungry people can eat, I’m there. Wherever there’s a cop beatin’ up a guy, I’m there. I’m in the way guys yell when they’re mad. I’m in the way kids laugh when they’re hungry and they know supper’s ready, and when the people are eatin’ the stuff they raise and livin’ in the houses they build, I’m there, too. — Garth

#81 ozy - I beg to differ, again on 10.10.12 at 9:22 am

Prices in way-expensive hoods in Toronto will also drop 10-15% (not only 5%). If 2008-2009 was any example. The difference is that it will stop there (not at 30% like Richmond Hill-Ontario) and it will rebound earlier in years ahead.
The reason for the objective 12.5% drop called above (no interest to buy or sell), is the extreme overpricing compared with value in those hoods. Money buys you 1 full bath home in those areas (made you ask how pretentious folk(lore)s folks can live there?) it only buys you a small crap of land, so almost zero value\price ratio.
Also, there is a low value\price ratio since detached on 25foot lots with mutual drive sell for (but not worth) 900000 when detached on 40foot private drive, same street are 1100000 milion. A sign the elastic band is overextended and is gonna hit many of the suckerilos on the face soon.

To see why I can’t call those buyers yuppies:

#82 detalumis on 10.10.12 at 9:29 am

Very easy to determine which part of the GTA will retain it’s pricing – walkability, local amenities, transit choices. In the suburbs that would mean say only some pockets in Port Credit or Clarkson in Mississauga or downtown Oakville. Any other portions of those cities are fair game. In Toronto, it’s the old city, the one designed before the car was king.

You can study other places like Paris or London or Manhattan and see the same thing holds true. There was nothing from stopping Hazel McCallion in Mississauga there from continuing the subway line and building along that, nothing except for being cheap and having no vision but it’s too late to do anything about it now.

It’s actually the young people from the suburbs who are moving into central T.O. and keeping those prices afloat, the ones who grew up in the suburban lifestyle and don’t want that for their own children, you know where you drive the kid to the indoor playground and look for a boogeyman behind every bush and tree and where when you are old and hang up your car keys you are also a prisoner living in solitary confinement until you die.

So no I can’t see prices in these types of areas ever going down because they sure ain’t building any more of them and you know what scarcity does.

#83 gladiator on 10.10.12 at 9:42 am

@49 truth hammer: I call BS on the Transportation index going up. Yes, it has gone up from 4892 (on Oct 1st) to 5008 (today as at 9:38 AM EST), but it’s been see-sawing down since February 2012, and it crossed the resistance line twice – in May and June. At least, that’s what my Bloomberg terminal is saying about DOW Transportation (TRAN Index).

#84 The American on 10.10.12 at 9:47 am

At #33: Aussie Roy, this will fail miserably for the National Bank of Canada. By design, credit card debt is unsecured, revolving debt. The “loophole” in question will be rejected within seconds when entering a court of law.

#85 Eaglebay - Parksville on 10.10.12 at 9:49 am

#67 Victoria Tea Party on 10.10.12 at 2:00 am

Another extraterrestrial.

#86 Victoria on 10.10.12 at 9:51 am

“Places where people always have wanted to live, and paid a premium to do so, will retain buyers and sticky prices”.

Most people in Victoria think this relates to housing here and we (Vancouver Island) are untouchable and isolated.

Supply in Victoria is washing over demand. Look at the flow of listings and the sales ratio. — Garth

#87 Eaglebay - Parksville on 10.10.12 at 9:58 am

#77 The American on 10.10.12 at 9:47 am

The “loophole” IS working.
Don’t you wish you were Canadian?
Suck it up Obama.

#88 Steve on 10.10.12 at 10:44 am

#77 TorontoBull on 10.10.12 at 9:16 am
What have I missed?
Good: any neighbourhood with a history of low inventory (for sale), as residual demand may well consume any increase in supply. These are likely to follow your suggestions, but may be so for other reasons too.

Bad: Proximity to Airport Flight Paths – noise.

Bad: Proximity to industry (too close) – noise, odour, too blue collar.

Bad: areas with high levels of speculators/novice RE investors/liquidating Boomers. Each of these groups will drive up inventory as some will need to sell to stay afloat. Watch condos for the first 2, and 40 year old neigbourhoods of SFH for the last.

#89 SRV on 10.10.12 at 10:54 am

You forgot to tell her to buy gold with the downpayment Garth!

Oh, and as someone who’s always ready to lend a helping hand, here’s a chart you can use to explain why, in a QE (and liquidity) to infinity world, gold will not continue its climb through $3K.


#90 drydock on 10.10.12 at 11:19 am

Does anyone else think dinglehiemersmit and $$$bpoe#1 are the same person?

#91 xdisciple on 10.10.12 at 11:35 am

#4 Big Bear… Thanks for the info on the demographic dynamics… I will steer well clear of London. Families are leaving there in droves right now to find work elsewhere in the country.

#24 Victoria… I’m pretty sure GTA Girl would know where to get this info…

Supply and demand dictate prices, but demand is more often than not artificially created through deception. Why the heck would I need to live in Rosedale other than to keep up appearances when I could get the same or better accommodations in London, Ontario as Big Bear shares with us, and probably closer to crucial amenities like a damned hospital?

45north, you are wrong because you are not considering the fact that by 2015, well over 80% of people will begin the process of NOT having to commute to a physical office. Too many stubborn old folks on this blog with stubborn old ideas that no longer work or are relevant. And then they complain about the fact that they don’t understand young people…

Open your minds a little, for goodness sake!

#14 Not1st… The IMF is currently run by Martina Navratilova… Yes, you read that correctly. I won’t make the same mistake as yesterday but you know where to get the info. The IMF is a criminal outfit for sure that does not one ounce of good in the world, fronted by actors no less…

#92 };-) aka D.A. on 10.10.12 at 11:46 am


#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.

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

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

#93 bailing in bc on 10.10.12 at 11:50 am

#79 Bigrider

I knew it! Garth is the Fourth Amigo!

#94 Marcus on 10.10.12 at 11:53 am

The IMF is like the plague of old….if they have set their sights on Canada you better watch out for the real estate reaper. None will be left standing in this global deflation then reflex inflation. That is the plan. Just like using the QE3 40 billion a month to buy our mortgages and the banks using the money to buy treasuries. All will be owned by the globalists.

#95 Hawk on 10.10.12 at 11:55 am

#75 SSF on 10.10.12 at 9:03 am

I think Oakville will weather the downturn better than Mississauga and Brampton, maybe about 15% or so.

It’s Brampton and areas even further that should be hard hit in the GTA. I was told by a realtor friend that a town house (forget detached and semi-detached) in Aurora is around $365K. If that’s true, I think it will be a nose dive in those far out areas.

The 416 particularly the center and the west end should not see much more than 10 – 15%.

#96 jimmy on 10.10.12 at 11:55 am

Hey Garth, my century old rowhouse house is in queen & bathurst. Is this considered a demand hood that will shed less than brampton in a correction?

#97 };-) aka D.A. on 10.10.12 at 11:57 am

#25Jounce on 10.09.12 at 10:49 pm

Houses are consumables, not investments. They age, are taxed, wear down and keep you locked in.

It is the dirt under the house which is the foundation of the real estate market. This is why the old adage “location, location, location” is so timeless. It’s not nearly so much about the improvements upon the property as the property itself. It’s about the land – without which we have nothing.

#98 Realtors are in an all out panic on 10.10.12 at 12:02 pm

DonDWest on 10.10.12 at 12:44 am I had to laugh at everyday Canadians reaction to that IMF article in MacLean’s. Canadians were literally explaining to the world that they knew more about economics than everyone else and that Canada is the beacon of light in a world filled with darkness. Apparently, housing is destined to go up, up, and away because we’re the world’s sanctuary. It truly was quite a poetic display of arrogance.

My response to such emotional drivel, dear Canadians, is the following: Let’s say there’s an off chance that you’re correct and Canada is indeed the Garden of Eden. What you haven’t considered is that the world is run by centralized banking. I’ll spare you all of the details how fractional reserve banking operates, but in simple terms, our world banking system is comparable to a mafia. The IMF is the Godfather of this mafia. When the Godfather makes an announcement that the music stops, you better believe the music will stop! Brace yourselves!

This is what realtors don’t understand or want to understand. The elite are now pulling the rug from under the Canadian housing bubble JUST like they did to the reat of the world. It’s going to be a nasty crash realtors , a nasty crash.

#99 Herb on 10.10.12 at 12:02 pm

#79 (Garth’s comment)

great words, Garth, but can you recite them like Henry Fonda?

#100 Dan on 10.10.12 at 12:06 pm

Garth, I am agreement with virtually everything you say in regards to housing, what I do not agree with is that interest rates will rise any time soon.

The US Fed is on hold until late 2015, our government and central bank is scared about our strong dollar already. If Carney increases our rate differential it will push our dollar over 1.10 towards 1.20 – that will kill your Eastern manufacturing (what little is left).

Our economy is going into a soft spell because of, slowing global activity, reduced housing and construction spending soon to follow – you really think as consumer spending tails off, and the Canadian economy weakens that our central bank will employ tightening?

The real reason they have waged a regulation war on CMHC is to try and cool housing and debt levels with the only tool they can use.

We are no different than the USA or Japan – try as we might, we are in for low rates and a lost decade for years where the saver is punished in an attempt to save the foolish.

#101 Lostinthewilderness on 10.10.12 at 12:23 pm

Bubble bursting or simply deflating.Just begun? More to Come?

MSN: Forbes


Financial Post:


#102 TurnerNation on 10.10.12 at 12:26 pm

I guess the dog for today’s picture is a “Yippie”.

#103 TNT on 10.10.12 at 12:43 pm

How much and the A/C stays.

#104 TNT on 10.10.12 at 12:54 pm


Marvel issss

#105 jess on 10.10.12 at 1:00 pm

IMF the champion of the free-market
one cannot influence the market without borrowers


The surgeons whose tax affairs led to the crackdown were orthopaedic specialists Gary Hooper and Ian Penny of Christchurch. Neither responded to calls for comment.

They took Inland Revenue to court in 2008 after it ordered them to increase the level of tax they were paying. The case went to the Supreme Court, with the judges there coming down behind Inland Revenue.

The court heard Inland Revenue claims that they had arranged to pay themselves “artificially low salaries” through the companies they used to run their business.

Inland Revenue claimed the surgeons paid other money from their companies to family trusts which meant they were able to enjoy the benefits of earning more without paying equivalent levels of tax.


“As long as there is a differential [tax rate] there will be people who try to exploit it. It’s just human nature.”

the ingenuity of humans (1975 Friedman optimism ) to get around laws ..”
go to 25min and listen to


A Second Greek Man On ‘The Lagarde List’ Has Been Found Dead Business Insider
Oct 6 – “The so-called “Lagarde List” – the name given by the Greek press to a list containing 1,991 names of wealthy, Swiss-bank-account-possessing Greeks who are being investigated for corruption and tax evasion – is causing a major stir in Greece right now. Since Friday, two men suspected to be on the list have turned up dead in apparent suicides


#106 Mark W on 10.10.12 at 1:00 pm

Three Vancouver obituaries for a dying city under the weight of it’s own unaffordability.




All being town down to make way for condos.

Living in downtown Vancouver Yuppie Condo Land … however just try finding a dry cleaner anywhere.

You want to buy groceries at a reasonable price odds are you have to leave and go out to the suburbs if you don’t want to pay $12.00 for a head of cabage.

#107 truth hammer on 10.10.12 at 1:02 pm

#82 G……. that ‘see saw’ activity’ you refer to is in fact ‘a wall of worry’ to the rest of us……and failing to observe the reality of an imperfect marketplace is why a majority of ‘investors’ both amateur and professional always miss the meat…….like the juicy returns we’ve gained since July……while others less agile wait for ‘perfect conditions and a bell to be rung’.

Ask yourself why your ‘advisor’ hasn’t made a move? A great many issues peripheral to the general indexes are already up 50% and more…I have many of these in my portfolio. I suggest reading the analytical reports oneself and relying less on the Newshour for advice on trading or investing.

I would also like to comment on the ‘afterglow effect’ that a potential Romney win has had on the market specific stocks/sectors set to profit after the debate…..stocks are cheap on a fundamental basis…..if the US gets back to business we will see a surge in demand for Canadian resources. This has yet to be fully realized in certain sectors…..however these sectors have already moved about 15%….and the dumb money is quickly being set up for a distribution rally once the facts are reported.

One must buy low in order to sell high……it is never the wise man who buys high to sell higher……thats why basic material activity and transportation are critical to understanding what will happen in the future. Once you understand that then you can go long comfortably in spite of the gut wrenching news of what happens on Main Street today…cause the noise is just noise…not investment advice.

If railcar utilization rates are so solid….what are they carrying?

#108 Chris on 10.10.12 at 1:04 pm

Haven’t posted anything for a few months, but I’d just like to update on nation leading “hot” Saskatoon… Prices are still and have been FLAT for about 2 years now. Yes, “average” house prices are still rising, but that’s only b/c more ppl are going into massive debt by purchasing gigantic homes. 5 yrs ago there was no such thing as a 2500sqft home except in the Willows. Now that’s almost the norm and entire areas are being populated with mcmansions (wilowgrove, rosewood, evergreen, stonebridge), so that is what is skewing home prices up. Prices are still 30% overpriced though.

#109 Victoria on 10.10.12 at 1:13 pm


I agree.

I think the property boom in Victoria the last 10 years was just a blip. People honestly thought everyone (rich) wanted to live here and at one point many did. Americans, Europeans and people from Alberta and Ontario were coming. That has pretty much stopped – dried up overnight as one well known RE agent put it. I think people found that Victoria was not all it was cracked up to be. The Americans I know where not happy about Canadian taxes, healthcare and cost of living. It rains more than people thought. Homeless problem etc. etc. etc. It was a trend it was just a blip. Everyone on to something new now.

My ex-RE agent thought this was going to be a multi-millionaire playground and the locals would be priced out and have to move to Langford (Scarborough of Victoria) and the Western Communities. He was actually happy about this.

#110 Silent Fan on 10.10.12 at 1:30 pm

I think she took the blinders off her horse….
CALGARY — Tighter mortgage rules have been cited recently as reasons for a slowing down housing market in Canada, particularly in major markets like Toronto and Vancouver.

But that isn’t happening in Calgary and when it comes down to dollars and cents, the impact of these new regulations are not that dramatic, says a mortgage expert.

Laura Parsons, mortgage expert with BMO Bank of Montreal in Calgary, said the bottom line is not as big as it seems.

“In Calgary we are really seeing a nice balanced (housing) market. With the changes, what it does, like it has done every single time there’s change, people that were sitting on the fence think they can no longer get engaged into home ownership,” said Parsons.

“A lot of people are feeling like it’s a bigger change than what it is. As an example, it’s about $50 per $100,000 going from 30 to 25 years (amortization) to a person’s mortgage payment. When we put it into perspective it kind of makes them feel a little bit better. And when they see the interest savings, it’s huge.”

But Parsons said many people today are struggling with a down payment, particularly for a younger demographic.

A recent survey by PwC said the majority of Calgarians — 64 per cent in fact — consider housing in Calgary to be affordable.

In September, it was reported that Vancouver’s housing market experienced a 32.5 per cent decline in sales compared with a year ago while Toronto saw a drop of 21 per cent. However, Calgary witnessed a 10.68 per cent year-over-year hike in MLS sales.

Across the country, according to the Canadian Real Estate Association, MLS sales in August were down 8.9 per cent from a year ago. It was the biggest year-over-year drop since April 2011.

“August’s sales figures will no doubt provide comfort to policymakers, providing the first clear indication that the recent changes to mortgage regulations aimed at cooling the market are working as intended,” said Gregory Klump, chief economist for CREA. “With previous changes to mortgage regulations, demand rose between the time changes were announced and their implementation, and invariably fell in the months immediately after being implemented, before recovering to long-term levels. By contrast, recent changes to mortgage regulations were in force more quickly after being announced, so home buyers had far less time to react. As a result, demand didn’t pick up just before the changes took effect, while sales declined once they did.

“The broadly based decline in August sales activity suggests that some buyers may no longer qualify for a mortgage now that amortization periods for high ratio mortgages have been shortened. As the lynchpin of the housing market, lower first-time buying activity will have downstream effects over the rest of the market. While we expect it will likely take more time for move-up buyers to sell their current home, a few more months of data are needed to gauge the broader impact of recent regulatory changes on Canada’s housing market.”

[email protected]


© Copyright (c) The Calgary Herald

Original source article: Tighter mortgage rules cited for slowing down Canada’s housing market

#111 CowTown Geer' on 10.10.12 at 1:31 pm


Depending on the unit you are looking to get into – a newer luxury condo will will rent for 1800-2200/mo for a 1BR and 2000-2700/mo for a 2BR. You could get into an apartment building and find an older 2BR for much less…say 14-1500/mo.

I was just in Europe and loved southern France. I think you have made the right choice. Unfortunately I am at the beginning of my career and the Oil and Gas engineering in Calgary is extremely lucrative compared to anywhere else in the world. I may just rent for 15 years and buy a nice little place in France / Spain. Barcelona is a wonderful city…

#112 SSF on 10.10.12 at 1:36 pm

#94 Hawk

A town house in Oakville is over 400K, so why Oakville will weather the downturn better?

#113 jess on 10.10.12 at 1:41 pm

yeah, delaware

U.S.: It’s time to eliminate anonymous shell companies Thomson Reuters
Oct 9 – Manhattan District Attorney, Cyrus Vance, calling for Congress to pass the Incorporation Transparency and Law Enforcement Assistance Act. -“…my office, time and time again, finds its criminal investigations thwarted by an absurd system of secrecy whereby criminals can hide their money without even breaking a sweat — or the law. Welcome to the bizarre world of anonymous shell corporations.”

#114 broadway skytrain on 10.10.12 at 1:47 pm

agreed dow transports are looking very WEAK, both short term and long term

djia moving down with strong conviction short term – i get the feeling the support to keep it over 12.5k is not there

place your bets.

oh, and vancouver will get rain on friday – ending a 10+week dry spell – i never knew it was sunny all the time on the left coast;)

#115 TimV on 10.10.12 at 1:56 pm

#61 Ronaldo: That was my original thinking, but what if there’s simply an oversupply of buildings and other construction? If there are simply more large houses than demand, then it’s possible for the buildings to decrease more than the location/land. Looking at the 7% GDP directed at construction, and at the profit margins for builders (a bad reno will roughly break even; in any normal market, a bad reno should lose money) – there certainly seems to be an over-supply of construction. I still tend to think the land value will adjust more than the improved value, but it’s not obvious to me yet.

#77 TorontoBull: You seem to be assuming that more desireable properties are universally less overvalued than less desireable properties. I consider this unlikely. Indeed, bubbles usually form around items that are considered desirable (tulips, pearls, etc). When was the last time you saw a bubble in worm prices? At least Garth’s “Leaside” hypothesis is based on sales, listings, and income.

#116 Suede on 10.10.12 at 2:00 pm

Which will come first

a) A post on Saskatchewan RE
b) End of the hockey lockout

I feel for these people past the hundreth meridian

Another anecdote to pass along. People in North Burnaby are resorting to renting their homes at the same time as they’re listed but not selling…craigslist.

#117 Bigrider on 10.10.12 at 2:08 pm

Front page of Toronto Life Magazine for November reads:

“The New Elite ”

” They’re Affluent”.
“They’re hyper-educated”
“And they’re coming to Toronto from all over the world”

Bottom right corner of front page ” Foreign investors’ love affair with Toronto real estate”

I wonder how many contributors to the back room, pass the hat collection from the likes of the Brad Lambs of the city it took to get T.O Life to make this it’s front page.

Garth I am pretty sure this magazine gets more eyes than your blog unfortunately.

Don’t count on it. — Garth

#118 Timing is Everything on 10.10.12 at 2:11 pm

“The province of Ontario has gone from criticizing the oilsands to opening a trade office in Alberta to capture their economic benefits.”


Ontario must be getting desperate.

#119 TorontoBull on 10.10.12 at 2:15 pm

US is a pretty good case study -good neighbourhoods (as defined by the attributes that I listed) lost signigficanlty less value compared to bad neighbourhoods. Look at data for San Francisco, Boston, NY, etc…
and google ‘hedonic prices’

#120 penpal on 10.10.12 at 2:17 pm

@ # 116 Bigrider

Keep that copy of Toronto Life.

Dig it out 6 months, 1 year and 2 years from the date you stashed / re-stashed it away.

Don’t be surprised if this issue turns to be a classic sign, not of the top in 416, but the top point of the long slide in prices.

Total red flag.

#121 John on 10.10.12 at 2:22 pm

“And that’s the problem, and why the IMF has no more control over the current currency wars (a major cause of our troubles) and everything else financial, than has a Chinese Panda bear living in a zoo.”

Yep. The Chinese Panda bear living in a zoo. That’s the level of “real estate” analysis being offered today.

And then there’s the cherry picking on traditional “doomer” arguments and highlighting them as “ridiculous”. Predictably anyone using pre-packaged stuff gets polarized to draw suckers into not doing their own research and thinking for themselves.

We’ve got severe, over the top crony capitalism going on in the entire world. Work backwards. The institutions and political systems we have are supportive of crony capitalism, or they would not still be in place.

It’s best in a pre-cooked debate to step around packaged arguments. They’ll be jumped on in a flash. It works well to sustain avoidance of the big picture.

Thing is, too many are using their brains now, and the internet has all the information. Packaging isn’t required.

#122 Just Park It on 10.10.12 at 2:32 pm

I’ll tell you one area that is defying the odds – Barrie,ON – 1 hour north of Toronto.

Nearly every sale sign has a sold slapped on it within a few weeks. My family sold there home in 7 days of 95% of asking price.

I think the condo’s in Toronto are source of concern, but owning a 500sq.ft box is bad news no matter how you sugar coat it –

Just enjoy life – the Mayan calender is a telling fact!!

#123 DonDWest on 10.10.12 at 2:48 pm

One of the features that has always left me confused about real estate/capitalism are condos. People argue it’s “land values” that are driving up the costs, but how is that possible when condos, the piece of real estate that has shown the highest percentage value increase since it’s creation, don’t have any land?

Devout communists have long argued that capitalists are so greedy that they would one day charge us to breathe. Haven’t condos already done just that? When you buy a condo, 95% of the costs are essentially going to AIR. Yet nobody is crying fowl. . .

#124 NI on 10.10.12 at 2:54 pm

What do you think will happen to house prices in Nanaimo?

#125 Jimbo on 10.10.12 at 2:57 pm

It would be interesting to see what these properties will actually sell for.

A Leaside McMansion at 3.2 million

or this McMansion in King City for 2.2 million

#126 Westernman on 10.10.12 at 2:59 pm

A note to all those patiently waiting for a post on Sask. R.E. :

It may be a long time before that happens because –

1. No one cares about Sask OR it’s R.E.
2. There are not enough people in the outland of Sask. to make any difference whatsoever in the world outside the bubble of hollowed out water-mellon heads in Sask.
T.O probably has more people living in apartment complexes than Sask. has people.
3. The provinces pop. consists mainly of people 100 years of age or older and inbred mental deficients – hence no one cares what they think, say or do.
4. No one and I mean no one wants to move there.

Hope that clears up why blogs dedicated to Sask. R.E. are going to be rare – real rare.

#127 Mark W on 10.10.12 at 4:09 pm


Granville 7 cinema closure threatens Vancouver International Film Festival

Granville 7 cinema is closing next month, a decision that threatens the film festival’s viability, festival director Alan Franey says

So now EVERY theatre in the Vancouver entertainment district along Granville Avenue is gone.

An area that used to be referred to as Vancouvers Broadway for all the neon lights and theatres.


So when the VIFF (Vancouver International Film Festival) moves out of Vancouver will it still have the same name.

BIFF …. Burnaby International Film Festival?
SIFF …. Surrey International Film Festival?

New advertising logo: “Show up in the BIFF: Burnaby International Film Festival”

Vancouver dying under the weight of it’s own unaffordability.

#128 Bill Gable on 10.10.12 at 4:09 pm

Feeling gloomy?

Check this:

‘Neither Obama or Romney is going to be able to stop what is coming. The global economy is getting weaker with each passing day. The central banks of the world can print money until the cows come home, but that isn’t going to fix our fundamental problems.

The largest economy in the world is imploding right in front of our eyes and nobody seems to know what to do about it.

If you believe that Barack Obama, Mitt Romney or Ben Bernanke can somehow magically shield us from the economic shockwave that is coming then you are being delusional.

Just because what is going on in Europe is a “slow-motion train wreck” does not mean that it will be any less devastating.

Yes, we can see what is coming and we can understand why it is happening, but that doesn’t mean that we will be able to avoid the consequences.’

>>The other side of the argument re: the recent Turnerisms, methinks?


#129 Frank le Skank on 10.10.12 at 4:14 pm

Where do i get accurate statistics for Pickering ontario?

#130 Elchavo on 10.10.12 at 4:22 pm

Garth, what happened to the post about RE in Sask ??? You only did Winnipeg and that was it! U know, we have a huge bubble in Saskatchewan too… delusional masses with full government support, rockstar realtors, neverending resources, a plethora of F-150’s with labels such as: E-Z Landscaping, Roughrider Roofing, Chad & Dustin – Plumbing and Heating…

Or perhaps, instead of a post, why don’t you make an appearance in this godforsaken prairie? Full house guaranteed. But come to Regina this time.

#131 smartalox on 10.10.12 at 5:01 pm

Another factor when it comes to price declines, particularly in Vancouver is “what kind of harebrained scheme will city hall come up with next, to further reduce property values?”

Will they build a in-patient drug treatment facility two and a half times taller than anything in the surrounding neighbourhood, a block from (admittedly overinflated) million dollar homes? Will they jam a new house, or stacked townhouse condo onto half of your corner home lot in Kits? Will they rip up the streets to put in a failed subway system?

And most importantly, will the province jack my property taxes in order to compensate for falling property values?

Things to think about before you sign on the line…

#132 TNT on 10.10.12 at 5:04 pm

@101 TurnerNation

Very Funny LOL.

#133 Denise on 10.10.12 at 5:13 pm

This realtor, Ron Neal, was just on CFAX, a talk-radio station in Victoria. They were talking about this blog entry of his for Oct. 3, 2012 & whether the VREB was angry at him for posting this opinion of the Victoria RE market. Interesting how he calls today’s buyers “predatory”, LOL, but he does give his own differing stats & disputes the VREB’s. Some people shouldn’t do talk-radio as they give the listeners the impression they’re bored, pouty & arrogant.


#134 TimV on 10.10.12 at 5:16 pm

#118 TorontoBull: I’m not sure what hedonic pricing has to do with anything. If you want academia, I found a paper here: http://faculty.chicagobooth.edu/veronica.guerrieri/research/Detroit.pdf which says that price declines affect all neighbourhoods within a city equally (but price increases not necessarily so), but they don’t have a dataset to account for price declines due to changes in sentiment or interest rate.

Some neighbourhoods will fair better than others; I agree with that. I think it’s silly to blindly assert that any premium feature (eg: distance away from the 401) will automatically translate into less of a price decline. Indeed, in Toronto, some of the neighbourhoods where houses trade closest to replacement cost are the least desireable neighbourhoods, and I would suggest that they have the least potential for price decline (because they are closest to replacement cost already).

One of the times that Garth mentioned Leaside, another blogger (whom I can’t seem to find back) tested the Leaside hypothesis on some data from, I believe, Los Angeles, For the two particular neighbourhoods compared, the writer did find that the more desireable neighbourhood decreased less. But both declined a lot, and one comparison of two neighbourhoods does not prove a trend.

#135 TimV on 10.10.12 at 5:19 pm

Rereading Garth’s posting today, I’m struck by a “things should return to the way they were in 1965” tone. Sometimes certain things do change forever. As an example, anyone who thinks Cabbagetown is going to be re-inhabited by the very lowest income group is truly dreaming. Go back a bit in time, and I suspect one could make the same argument (“no history of price retention, not the place where well-off people live”) to argue that Cabbagetown should long ago have reverted to being cabbages. But it didn’t. And it won’t.

#136 Smoking Man on 10.10.12 at 5:21 pm

Jimbo. You can cherry pick all you want. Don’t change the fact that for every 1 person in the 416 thinking about selling there sfh their are 50 wanting to buy one.

And this is the worst time of the year to sell.

Over the next few months. Hoods that have lots of condos the ave price will go down. Areas that are free of condos ave price will surge.

Btw. Bungalows will be hot to trott.

#137 Picasso on 10.10.12 at 5:34 pm

Find foreclosures, MLS listings and home values


#138 Realtor # 1 on 10.10.12 at 5:43 pm

# 66 Junis

I’m sorry my point is the 2008 crash was the time to buy. You had the stock market decline, Unemployment increase and people afraid of buying.
You don’t have that today the stock market is slowly making some gains, unemployment is stable and their is NO doom and gloom like 2008.

If we don’t have a spike in unemployment what will make sellers become desperate?
Debt? Maybe for a few but, will everyone run out of credit next year and need to sell their home?

Remember prices of homes will also revert to the mean
So what is the mean? What should the real prices of homes be? in 2008 is was 450000, today it should be around 515K not the 625K.

There will be no blood.

#139 GTA Girl on 10.10.12 at 5:43 pm

There was an announcement for a new development in eastern GTA. One established developer, one unknown builder and a investment fund that seems to hold 2nd mortgages.


When I was trying to look up this investment firm I clicked on their web link

Website under construction? Um, yeah that’s not odd at all.

What I did learn that it is a mortgage lender through a company called Centro mortgage, for investors.

The condo market has many odd twists and turns that just don’t seem to make sense. Something that the CRA should really sink their teeth into.

#140 GTA Girl on 10.10.12 at 5:50 pm

Another iconic Toronto landmark is about to become demolished for another 30+ story all glass condo with units 400sqft +.

140 Yorkville avenue. The corner of Yorkville and Avenue road. Houses the courtyard with the famed restaurant Il Posto, and Vidal Sassoon.

this is a thread of people discussing the building and its demise.

The only mistake is the amount the developer paid for the building. It’s inaccurate, add a 0 to the million.

As with the recent Mirvish announcement of the Princessof Wales theatre condo site, I wonder…when will it stop?

This latest Yorkville project confirms why the developer has been so buddy-buddy with Mayor Rob Ford lately.

#141 };-) aka D.A. on 10.10.12 at 5:51 pm

#129Frank le Skank on 10.10.12 at 4:14 pm
Where do i get accurate statistics for Pickering ontario?

From the Pickering Accurate Statistics Farmer’s Market. That or you could try a local Pickering REALTOR.

#142 Eaglebay - Parksville on 10.10.12 at 5:53 pm

#116 Bigrider on 10.10.12 at 2:08 pm
Front page of Toronto Life Magazine for November reads:

“The New Elite ”

” They’re Affluent”.
“They’re hyper-educated”
“And they’re coming to Toronto from all over the world”

Do you mean like your buddy Rizzuto?

#143 Timing is Everything on 10.10.12 at 6:01 pm

#121 Just Park It – …the Mayan calender is a telling fact!!

Ya Garth, even the Mayans gave a date. Sheesh.


#144 Realtors are in an all out panic on 10.10.12 at 6:11 pm

Out of work realtors posting in a panic on garths blog. For sale signs everywhere and nothing is selling. Even white hot C6 of north york has seen a change. NOTHING is selling there and this is being repeated all over the GTA from what realtors buddies have been saying and believe me they are in a panic. The CHMC limit has almost been hit and no more zero down mortagages which is 40% of the current sales. Nothing will stop the housing crash and every realtor knows it. It’s 2008 all over again and only this time the crash will be harder and faster and nothing can be done to stop it. Cheap and easy credit was the ONLY reason for the run up. Take it away and the house of cards falls back down to reality. Home prices will return to 3-3.5 time income which is the HISTORICAL AVERAGE. 8 times income for a home in north york will crash back down. It’s going to be a nasty crash realtors, a nasty crash.

#145 Realtors are in an all out panic on 10.10.12 at 6:12 pm

116 Bigrider on 10.10.12 at 2:08 pm
Front page of Toronto Life Magazine for November reads:

“The New Elite ”

” They’re Affluent”.
“They’re hyper-educated”
“And they’re coming to Toronto from all over the world”

Do you mean like your buddy Rizzuto?
LOL realtors and builders are in a PANIC as new home sales CRASHED OVER 60% ..OUCH

It’s going to be a nasty crash home builders, a nasty crash.

#146 Willy H on 10.10.12 at 6:22 pm

Whereas Brampton may lose 25% of its equity, such high-income areas will shed only 5%.

__ __ __ __

I don’t agree. Brampton is already on the low end of the scale for housing prices in the GTA and therefore has less of distance to drop.

Places like Vaughan, Richmond Hill, Aurora and Newmarket are in great danger. Thousands of detached homes all priced at well above $500K to $600K.

#147 Westernman on 10.10.12 at 6:34 pm

Elchavo @ # 130
Please reference post @ # 125…

#148 West of the Grand on 10.10.12 at 6:42 pm

#4Big Bear

Yes, London has many good things going for it, and I really enjoy living here after moving from the GTA.

Two problems though:

1) If you are moving here and trying to make friends, good luck. Everyone already has enough friends and family from high school, university and previous jobs. It is difficult to break in socially unless you have some schtick (kids in hockey, work in a specialized sector of the economy, or your job is to disburse money to people).

2) Presumably you followed a job to move here. Try finding a job here when you are out of work. Over the past 2+ years there has been very little private sector hiring going on, combined with a strong MUSH sector which is currently paralyzed with austerity fears.

London is a virtual island, surounded by empty green fields for at least 100km in every direction (sorry, Strathroy and St. Thomas). I have been without a job for 8 months and counting, and I am not an outlier.

For anyone who read this far, note that I am not a pathetic creature looking for pity, just someone who is forced to face the reality of the downside of this particular city. Real estate never really bubbled here because job growth over the past 10 years has been very slow, and plant closures have been high.

No ad hominem attacks please. :-)

#149 Big Al New on 10.10.12 at 6:46 pm

@129 Frank le Skank “where do I get information about Pickering” bahaha,your kidding right. Pickering is a planning disaster, with houses built wherever there was an empty field. No roads no infrastructure no schools just portables. The property taxes are going to kill you, the traffic is going to leave you parked and the neighbors are going to shoot you. Your choice mate.

#150 Bigrider on 10.10.12 at 7:04 pm

#142 Eaglebay-Parksville.

Are you referring to your boyfriend when you were both on the inside ?

#151 Nostradamus Le Mad Vlad on 10.10.12 at 7:14 pm

#57 DonDWest — “The IMF is the Godfather of this mafia. When the Godfather makes an announcement that the music stops, you better believe the music will stop!”
— and —
#93 Marcus — “None will be left standing in this global deflation [then reflex inflation. That is the plan. Just like using the QE3 40 billion a month to buy our mortgages and the banks using the money to buy treasuries. All will be owned by the globalists.” — Good posts, but there ain’t a damn thing we can do about it.

#110 CowTown Geer’ — “I was just in Europe and loved southern France.” — Gorgeous part of Europe. Great Grandad’s (Nostradamus) home is in Salon, been nicely done up by the French govt. Well worth spending some time there.

#121 Just Park It — “Just enjoy life – the Mayan calender is a telling fact!!” — Hi Just Park It. I agree about enjoying life. The Mayan Calendar is just the conclusion of their age. A few years later, the Aztecs and the Incan (Incas) Ages also end, so there are a lot of cycles finishing over the next several years, while plenty of new and unexpected ones will be starting.

#128 Bill Gable — Good post. There is almost no difference between Romney and Obomba, save for one point — Romney would nuke Iran just because, whereas Obomba is distancing himself from Noddin’ Yahoo. Other than that, they’re equal numbnuts.
Spain It’s over, so nuke it and start again; 1:04 clip 1936 speech from FDR; Corporate CEOs want austerity so their money can be reinvested in cheap places; Bain and Mitt Romney Amazing what one finds on the ‘net! JPM, an heiress and derivatives; 28:03 clip plus see headline; The US Fed’s only purpose — keeping banks afloat, but they recently released tidy profits; Dictatorship Now; Boost for borrowers, diddly squat for savers.
5:53 clip Harper has his face slapped again, but deservedly so; Riots and Food Prices Unpredictable? Syria NATO ready to attack then be destroyed by Russia; GMO crap ” The pregnancy prevention plants are the handiwork of the San Diego biotechnology company Epicyte, where researchers have discovered a rare class of human antibodies that attack sperm.”

#152 Devore on 10.10.12 at 7:26 pm

#31 TimV

When I went looking for a house in Danforth, all my competition were other young couples or new families. Most houses were staged with baby cribs.

Staging is a funny business. I’d bet the other houses not staged with baby paraphernalia were staged with a home office. That 3rd (or 2nd) bedroom is not big enough to fit a regular bed and still look presentable. Depending on the perceived buyer demographic for the area, you’ll typically see one or the other.

Which is fine, it’s the 21st century version of a starter house. It’s just that they cost vastly more than starter houses used to. There is no reason to buy one, unless you’re expecting double digit annual gains so you can sell and buy a bigger and cheaper house in the burbs later.

#153 Devore on 10.10.12 at 7:37 pm

#37 TimV

This seems like a reasonable time to ask other blog commentators the question I asked a couple days ago: what will depreciate more? Land, or the houses on the land?

House value (replacement cost/construction cost) doesn’t vary that much. The cost of labour will go down a bit, because the supply will get freed up after the boom time construction is over, and materials costs aren’t going to change very much either.

A popular argument from a particular RE bull on the VCI blog is that if prices fall, developers will stop developing because they won’t be able to make money. Plentiful examples in Canada and worldwide to the contrary aside, as well as simple logic (developers need incomes too), developers will keep developing, because they will find ways to cut costs to compete with resales. Where do the cost savings come from? Not from their own pockets (they want to maintain their incomes) not from trades (they’ll both take a small cut, but not much), not from materials (why would 2x4s or shingles be any cheaper).

It will come from land prices. What goes up during bubble times is land value, not improvements. In fact, in extreme bubble cases the value of improvements upon the land is entirely superfluous. The speculation is not in 2x4s or shingles or plumbers, it’s in land value.

#154 TNT on 10.10.12 at 7:41 pm

Yoo Hoo,

Three weeks ago there were sites talking about the recent formation of a duel Chinese-Canadian coordinated task force that’s reviewing Chinese housing investments and brokers.

Now these sites are gone as are other Re related sources.

Is this not a relevant issue?

#155 Form Man on 10.10.12 at 7:49 pm

#152 #153 Devore

good posts

#156 Devore on 10.10.12 at 7:49 pm

There are currently almost 1,000 properties for sale on the Westside of Vancouver. There are 26 listings in the Leaside area. Both have about the same number of houses. Do a little more research before you type. — Garth

Van Westside is a rather broad geographic region that encompasses a number of individual neighbourhoods. For example, Shaughnessy might correspond to Leaside in TO, Oak Bay in Vic, Mount Royal in Calgary, etc.

I don’t know how many houses there are in Shaughnessy, or how many are for sale, just making a point. I’m sure there are “nice” areas in TO that are ready for a major dip. Look for neighbourhoods with historically established and stable demographics to have the least downside, and for the newly yuppified ones to strap in, as those are the most leveraged purchases most sensitive to the monthly payment.

#157 Ralph Cramdown on 10.10.12 at 7:53 pm

What do you think will happen to house prices in Nanaimo?

They’ll end up having to rename the place ‘Yonimo’?

#158 TurnerNation on 10.10.12 at 8:01 pm

If this weblog fell in a forest would anybody read it?

Please step back from the chainsaw. Slowly. — Garth

#159 Rosebery on 10.10.12 at 8:08 pm

NI 123
What do you think will happen to house prices in Nanaimo?

Nanaimo is in real trouble. Lots of inventory, nothing selling, price cuts weekly. Few jobs, high ferry costs,
retirement buyers pessimistic. VI downsizers stranded
as prices decline, no-shows at open houses, winter coming. RE Agents folding their tents as costs spiral.
It’s over.

#160 McLovin on 10.10.12 at 8:21 pm

DA thank you again for the facts you posted. That said, I have asked you twice for specific information which you did not post.

All I want to know is:

How much condo’s and houses are down in price in % terms from the peak month in 2007. To out another way, if I was unlucky enough to buy at the peak in Kelowna (the very peak) how much would I be down in % terms.

This is all I want. I don’t know why you are specifically not posting this information and spinning it. I am giving you the benefit of the doubt here but you are living up to your namesake as a Realtor.

I don’t want sales figures or anything else. Just the answer.

#161 Devore on 10.10.12 at 9:02 pm

Hmm, Canada running a record trade deficit. Someone remind me again what the price of oil and other commodities is?

#162 Bottoms_Up on 10.10.12 at 9:09 pm

I love people that say that whole “centre of the universe” thing. Never heard that saying until I left the “centre of the universe”…and whenever it’s said it comes across as the person saying it has a bit of an inferiority complex.

And most of the people I’ve ever known from “the centre of the universe” have been model citizens.

#163 TimV on 10.10.12 at 9:11 pm

#153 Devore:

Hisorically I bet land values have more price variation. But is this time different? Many of the small SFH’s seem to be competing with condos. They’re not much larger than a 2 bed condo, compareable to a condo townhome. Target market seems similar: young couple, no kids, no desire for a lawn, but desire for a BBQ patio. If it’s true that condos are the segment that will correct by the largest amount, then shouldn’t detacheds that compete for the same set of buyers be most affected?

I’m thinking the older parts of Toronto. The comparison to condos may not apply in areas like North York.

#164 Bottoms_Up on 10.10.12 at 9:17 pm

#138 Realtor # 1 on 10.10.12 at 5:43 pm
that’s assuming prices in ’08 weren’t overvalued. which they were.

#165 Bottoms_Up on 10.10.12 at 9:19 pm

#129 Frank le Skank on 10.10.12 at 4:14 pm
Type in CMHC housing statistics into Google. Route around their website, you should be able to find something.

#166 Gunboat denier on 10.10.12 at 9:26 pm

153 Devore – yes, good posts. Regarding raw land value, I have seen unknowing owners turn down offers from
developers only to return a year later seeking the same
price. In the meantime, a small reduction in house prices
lowers the developers new offer.

Many developers also keep some rental stock to see them through, and go about acquiring raw land at bargain prices in anticipation of the next upswing.

#167 Hawk on 10.10.12 at 9:35 pm

#111 SSF on 10.10.12 at 1:36 pm

Oakville tends to have a greater professional class with somewhat higher income and more future earning potential than Mississauga / Brampton etc.

#168 Marshy on 10.10.12 at 9:41 pm

Westernman @ 125

Thought you might like the following link


Auf Wiedersehen!

#169 randman on 10.10.12 at 9:42 pm

On the news tonight…

2 teenage girls in Van pay $340 each for Justin Beiber tickets!!

All is well in the world…..

#170 Westernman on 10.10.12 at 10:11 pm

Marshy @ # 168
Do you believe everything you read? A few lousy hard labour jobs at oil rigs do not a boom make.
What is it about you backwoods Sask. types that make you want to believe such fairy tales?
Just admit you live in the a-hole of the western world – it’s the first step to recovery…
And take a trip somewhere once in awhile – it’ll be an enlightening experience…

#171 Ronaldo on 10.10.12 at 10:40 pm

#123 DonDWest – most people don’t realize how condos came to be in the first place. Back in the early 70’s when governments imposed rent controls, developers stopped building rental properties.

Basically, they were telling the government that if we can’t make a decent return on renting then we’ll condomize them. So they did. By doing so, they passed all the problems associated with owning what would have been rental properties onto the buyers. I was one of them having purchased my first home ( a townhouse) in North Van. in 1970. These were affordable for first time buyers costing around 3 times average salary for one earner. Not like today where the same thing is now ten times that salary in todays dollars. What was affordable (at 10% interest rates) for a 23 yr. old with an average wage is now barely affordable for a professional couple pulling in $200,000 at current low interest rates. What’s wrong with this picture?

I would never own another condo again. Too many hassles. Too many problems with condo boards (owners) who keep the strata fees low at the beginning and later owners end up footing the bill because not enough was put into the kitty to cover major costs such as roofs, windows, etc. Too many silly rules and then there is always that self appointed condo cop who likes to make peoples lives miserable.

And your absolutely right. How can you justify these outrageous prices for 500 s.f. boxes in the sky on a small piece of land.

On a flight from Edmonton to Vancouver a few months ago, I was talking to a developer from Edmonton. I asked him why prices had increased so outrageously from 2005 to 2006. His response was “Super Profits”. Well, these profits are going to be a lot less in the months to come and that is a certainty.

So here’s what can happen when developers overbuild. In the spring of 1992 the vacancy rate for rentals in Vernon was zero. By the end of the year that rate was 7% and the building continued. Then, the housing market dried up and developers were stuck with vacant lots. So, what did they do, they kept building and were trying to sell them for basically cost just to get rid of the land. This drove prices down and many projects sat uncompleted and windows and door boarded up. Developments took several years to sell out and prices flattened for 10 years until the early 2000’s.

I see the same thing about to happen in many parts of the country in the months to come. When Garth says 40% in some areas, I believe he is being conservative.

The situation today is even more drastic when you consider that back in the 90’s the mortgage rates were in the double digits and not as today with mortgage rates the lowest in history. When the rates start to climb it will be nothing to see $100,000 drops in prices overnite. Many young first time buyers will lose everything and foreclosures will be commonplace. The government knows this and there is nothing much they can do about it but let it happen.

#172 Snowboid on 10.10.12 at 11:44 pm

#160 McLovin on 10.10.12 at 8:21 pm…

From OMREB Sept 2007 – Sept 2012 (not sure if Sept 2007 was peak month)

2007: SFH – $ 512,649 Condo – $ 266,596
2012: SFH – $ 488,788 Condo – $ 217683

So SFH are down 4.7% or 13% adjusted for inflation
Condos are down 18.3% or 25.7% adjusted

#173 Frank le Skank on 10.11.12 at 10:15 am

#141 };-) aka D.A. on 10.10.12 at 5:51 pm
I’m looking for accurate statistics

#149 Big Al New on 10.10.12 at 6:46 pm
Find me a place that isn’t a planning disaster? thanks Captain obvious.

#165 Bottoms_Up on 10.10.12 at 9:19 pm
thanks BU

#174 Dupcheck on 10.11.12 at 11:17 am

#4 Big Bear, well said. London, ON is a very good city to live in.

I agree with you, but who would listen. I have told my sister that tens of times, but i guess some people need to learn it the hard way. Go to Toronto i tell her and you would never get out of debt, you will never have financial freedom if you have a detached house/mortgage that would cost 650K minimum. London has everything you need in a 10 min span, malls, movies, groceries, downtown, etc. What does Toronto have to compare? It takes 45 min to get anywhere, you have to drive like you got out of a mental hospital, you have to pay for parking downtown, that beer that you wanted to enjoy all the sudden will cost you 10$ in gas to get there, +15$ parking, +1 hour lost in traffic stressed out, + 10$ beer, = 35$ for the same dang beer you could have had anywhere, and why? Ohh but this is Toronto the mighty town of broke people living on debt. Give me a break, this is madness and slavery combined. Open your eyes youth, you are brainwashed, Toronto is just an old lady with tons of make up, it will never be young again, its time passed 15 years ago, its odometer clocked 300k a while ago. No repairs will bring it back, its frame has rusted. Now it has no hope for the new generations.