It’s different here


This is fear and greed week. Human emotions, of course, move markets. That’s the basis of technical analysis, which is about all you need to know when it comes to investing. Stuff people want goes up. Stuff that scares them goes down.

Yesterday we talked about why smart people buy dumb assets that pay them nothing. From a financial point of view, GICs have no redeeming qualities. But Canadians have $900 billion there. Sad.

Naturally, real estate’s a great barometer of what emotional wrecks we are. Two nights ago a so-so former bungalow in North Toronto with a second storey stuck on top, sitting on an undesirable corner lot listed for $999,000, sold with multiple bids for $1,100,000. In fact, a whole batch of new bidding wars have hit some demand areas of the godless GTA in the past two weeks – exactly when I told you the Spring season would start this year. There will be more, and buckets of regret later. But the word is out that listings are scarce, and anything south of a million is hot. Here are the latest stats.

Of course, similar homes went unsold in the fall, when sales tumbled, and could have been had for less. But what fun would that have been? No bloodlust, no thrill. Realtors, red in tooth and claw.

Meanwhile in mouldy Vancouver, fear and loathing reign. Prices are falling and, as a result, sales are imploding. It so not cool buying a house when nobody else wants it, either. In case you missed it, last night the real estate board used the cover of darkness to announce January sales tumbled 14.3% from the same period a year earlier, making it the second-worst showing in 12 years. Detached home sales fall 18% and the sales-to-listings ratio overall is an embarrassing 10%.

Prices are also plopping. Even the local board’s hopped-up Frankenumber is down 6%, while detached homes are off by double digits. Sales are now 19% below the ten-year average. And listings have slipped a little from December, but remain above year-ago levels. Says the head realtor: “When a home seller isn’t receiving the kind of offers they want, there comes a point when they decide to either lower the price or remove the home from the market. Right now, it seems many home sellers are opting for the latter.”

Big mistake. After all, the average detached house still sells for about $1.1 million in a city of a mere 2.1 million people where families earn an average of $83,300. And it was human emotion – a surfeit of greed, laced with the fear of ‘buy now or buy never’ – that created what is absolutely, undeniably, irrefutably, a mama of a gasbag.

I mean, how obvious does all this have to be for mere Americans to notice it?

As Fear & Greed week broke, I was shocked to see that the New York Society of Financial Analysts had devoted a hunk of their recent publication not only to the Canadian house bloat, but also this pathetic blog. Have they no shame? Can’t they just worry about Beyonce blowing fuses?

“It is not a coincidence that the best blog I found covering the “most bubbly” of real estate bubbles is called Greater Fool,” writes columnist Aram Fuchs.  “The only difference this time around is the domain suffix —it is a .ca. That’s right, the most delusional housing pricing is in our formerly prudent neighbors to the north, Canada; and Garth Turner’s blog,, is the best chronicler I have seen. He is a scene-setter as well as an analyst. “

And guess what? In New York they also think Brad Lamb is funny.

“What is great from an American’s perspective is that all of the characters that we saw in the US housing bubble are up there in Canada leading the lambs to the slaughter. In another awesome coincidence the main villain is named Brad J. Lamb.  Turner has a great characterization of Lamb, whose nickname is the “Condo King of Toronto.”   Lamb reminds me of some sort of motley blend of Angelo Mozilo and Donald Trump. Lamb is encouraging people to lever up their primary residence to go buy a second, third, or fourth piece of real estate as an investment.

“Going through Lamb’s obviously foolish math in Turner’s post makes me think that ultimately shorting the mortgages on Lamb’s projects will be a money maker in time. Just like in the US, eventually people realize there are no more greater fools and the bubble bursts. I want to be ready.”

Me, too.



#1 Mike on 02.04.13 at 10:40 pm

Great pair of snow boots, I’d swap my Vancouver condo for them :) (imaginary soon to be worth less then a pair of boots condo, I’m a renter)

#2 mortgagebrokeront on 02.04.13 at 10:44 pm

Are these the greatest fools caught in this last gasp bidding war??????

the saga goes on

#3 CrowdedElevatorfartz on 02.04.13 at 10:45 pm

Garth why did you send an amazon out in the cold cruel world without her gloves?

You mean mean man!

#4 guelphstudent on 02.04.13 at 10:46 pm

But Mr lamb says there is no condo bubble in Toronto

#5 C on 02.04.13 at 10:47 pm


#6 From Mississauga with Love on 02.04.13 at 10:49 pm

so bidding wars are back?
do we now have to wait another year? your message isn’t exactly coming through, Garth.

Emotions, dude. Fools apparently still have them. — Garth

#7 Stinky the Fish on 02.04.13 at 10:49 pm

And now Garth and I would like to welcome evryone to the comments section

#8 T.O. Bubble Boy on 02.04.13 at 10:51 pm

Wow – Rob Carrick (Globe and Mail) now saying to get rid of the Home Buyers’ Plan:

I agree with the idea… but maybe a bit too soon, as the various RE cartels are still up-in-arms over the latest re-tightening from F in the summer.

#9 Smartalox on 02.04.13 at 10:52 pm

Back to the cheesecake shots? Spring must be in the air!

#10 ApplePips on 02.04.13 at 10:58 pm

So the real estate cartel choose Super Bowl hangover day to release news… How apropos.

#11 LSC on 02.04.13 at 11:07 pm

I agree that sellers will regret pulling the house off the market instead of lowering their asking price. This I believe is partly due to the amount they have outstanding and probably can’t afford a reduction without a loss of some sort on the purchase transaction.
It will be different this time as the correction gains momentum…In the past Canadians have for the most part meet their obligations and paid their mortgages. In the past however those losses have been mostly measures in the tens of thousands and they carried them until prices rebounded. This time many buyers will see those losses measured potentially in the hundreds of thousands. I do not believe many will carry those losses for long and the percentage of buyers that walk away (declare bankruptcy) will be historic.
I have been noticing a steady flow of adverts by law firms in the local paper. These properties are being sold to satisfy the mortgage owing. I expect to start seeing a lot more as spring turns to summer.

#12 Smoking Man on 02.04.13 at 11:11 pm

Yes home to rent rations bad, that’s when you calculated right. But the Herd don’t, the wife sees granet like it’s a diamond ring, men being the weaker sex that wants some Will muff up the calcs, pun intended.

Bidding wars back, the question, how are LaughingCon’s basement renos going, he’s been silent…

#13 Elmer on 02.04.13 at 11:14 pm

Garth is just jealous of Brad Lamb cause he’s tall.

#14 Big Al New on 02.04.13 at 11:17 pm

Three things that could kill this market.
1/ Higher interest rates.
2/ Increased unemployment.
3/ Financial shock like 2008.

1/ Not happening anytime soon as it would lead to higher values for the Canadian Dollar causing number 2.
2/ Employment numbers should stay steady so long as 1 doesn’t happen.
3/ Well that one is anyones guess, I’m in the camp of there will be another shock just based on the current global economic malaise.

Incorrect. Debt and stagnant income growth are enough. It’s already happening. — Garth

#15 Smoking Man on 02.04.13 at 11:19 pm

To bubble boy, Rob Carrick has been a real estate bear since 2003. He needs a real estate melt….. 10 consistant years of getting it wrong.

Move along nothing to see

#16 Mark W on 02.04.13 at 11:23 pm

The death of ethnic working class neighborhoods of Vancouver.

Moving out to Surrey because of unaffordability.

Within ten years Surrey will become the largest city in British Columbia.

Vancouver is actually at the point where it is dying due to the fact that the average house there costs well over one million dollars.

Vancouver is becoming less of a liveable city and more of a theme park for the rich.

Vancouvers vitality and colour are being drained away from it … to the suburbs.

One big donut … and the hole in the middle is Vancouver.

#17 ClaudiusEmperor on 02.04.13 at 11:23 pm

would you call somebody ‘insuring’ such mortgage sane?
In the case of the government doing that is it not that a crime?
Does F belong to Jail?

#18 Sebee on 02.04.13 at 11:24 pm

Spain is still over priced? My goodness!

#19 Smoking Man on 02.04.13 at 11:25 pm

#6 From Mississauga with Love on 02.04.13 at 10:49 pmso bidding wars are back?do we now have to wait another year? your message isn’t exactly coming through,

Garth.Emotions, dude. Fools apparently still have them. — Garth


Gartho is logical, a stats guy………… But he never plays poker, does not not put enough weight into the mind of the herd…..

That’s what I’m for……..

#20 OttawaMike on 02.04.13 at 11:25 pm

Yeah, here to. Tear downs going for $40k over asking:

We still have a few acts left before the well fed lady stops singing.

So tell us, how does one short the mortgages of the fleeced victims of Mr. Lamb..?

#21 Mike on 02.04.13 at 11:25 pm

Where oh where did the comments go ?
Minutes ago there were a few of them already, now back to 0 comments?

#22 Cranky Cyclist on 02.04.13 at 11:29 pm

On “How Under-or-Overvalued Housing Prices Are Compared To Rents”:

We’re Number One, we’re Number One! In your face, U.S.A! World class at last …

#23 Andrew on 02.04.13 at 11:30 pm

Favorite Quote from Edmonton RE Prez Darrell Cook

“It is important that we provide statistics that are relevant to each specific location. REALTORS® can provide their clients with more granularity or more specific details at the neighbourhood level.”

Anyone see a conflict here? (I really mean you Mr. Cook)Let’s see…. you sell the stuff, you have a total and complete vested interest in having people believe what you want them to believe about the market so that you get to define the “health” of the market with your magical stats and feed this pablum to unkowing public. On good days the MSM publishes your info often as the headline!

EREB Slogan “Here when life happens.”
Mine? “Real Estate is crazy”

#24 Don on 02.04.13 at 11:31 pm

bidding wars again? – Just a blip on a downward trend. As we all are aware you run out of gas slowly, sputter – sputter, CrrrrRASH.

The Americans are starting to really notice and soon it will be in their news. Call it a rivalry, but I am sure they would be anxious to return the comments that Canadians sent their way in 2007.

I had a bad sense years ago and found this like minded blog and have been here ever since. Patience vultures, HOLD THE LINE!!

#25 Sebee on 02.04.13 at 11:35 pm

First, we will not have a correction or a crash.

Now, correction, but no crash.

It these RE guys were alcoholics they would probably refuse to use AA batteries.

“We don’t think it is a crash. We just think it is a mild correction that the real estate market is going through,” Helmut Pastrick, the Vancouver-based chief economist at Central 1 Credit Union, said in an interview.

#26 Paully on 02.04.13 at 11:35 pm

That $1.1M home would probably rent for between $2200 to $3000 / month. Even at the higher rent number, it is waaayyyy less than the carrying cost or opportunity cost of the purchase price.

My Willowdale house might conservatively sell for $750k plus land transfer tax and legal fees. It could maybe get more in a multiple offer situation. At only 3% interest, that amount represents a monthly P.I.T. payment of close to $4000, cash or opportunity cost, take your pick. My rent is $2300. My landlord eats the rest. Works for me!

#27 Big Al New on 02.04.13 at 11:40 pm

“Incorrect. Debt and stagnant income growth are enough. It’s already happening. — Garth”

That’s a long term play, you’ve seen it happen, as your predictions have come to fruition over a longer period than you probably anticipated.
As long as the debt can be serviced there won’t be much of anything happening. I’m talking specifically about single family homes.
As for the thousands of condos in Toronto you might as well put a fork in that market because it’s done.

#28 Rich Renter on 02.04.13 at 11:41 pm

So do we wait another year before pulling the trigger on a home purchase?


#29 Skatch on 02.04.13 at 11:41 pm


I don’t always post…………but I always read your blog every day…………just wanted to say thanks for doing it.

You have taught me much.

Keep it up.

#30 Mr Buyer on 02.04.13 at 11:42 pm

Make no mistake. These opening acts of the selling season are little more than that. They are meant to prime the pump so to speak but …well we all know the rest. Watch and see

#31 900Billion? on 02.04.13 at 11:46 pm

$900B in GICs? That works out to an average of just under $25K for every man, woman, and child in the country. That can’t be right.

It is. — Garth

#32 JSS on 02.04.13 at 11:53 pm

Dude that chick is hot in the snow pic.

#33 James on 02.04.13 at 11:54 pm

So Garth, what are you going to do when it turns you are wrong all along? That this “crash” you’ve been calling for years fails to materialize?

Not such a great advice you are giving to people who religiously follows and giving them false hope. And then another 10 yrs passes by and RE reaches new heights….

My call has always been for a lengthy correction, not a crash. I will, of course, be correct. — Garth

#34 Lead Paint on 02.04.13 at 11:58 pm

Great article by Chris Hedges:

“…and yet, curiously, stock market levels are close to their highs in 2007 before the global financial meltdown. This is because these corporations have been able to suppress wages, slash social programs and bilk the government for staggering sums of money. The Federal Reserve purchases about $85 billion worth of mortgage-backed securities and Treasury bills every month. This means that the Fed is printing endless streams of money to buy up government debt and toxic assets from the banks. The Federal Reserve now owns assets, much of them worthless, of $3.01 trillion. This is triple what it was in 2008.”

#35 Old Man on 02.04.13 at 11:58 pm

There will be no bidding wars in Mississauga over any Real Estate, but there is this guy called the Smoking Man that the women are fighting over, and have no idea why. The women must believe that he is a good asset paying good dividends with a potential capital gain :)

#36 HogtownIndebted on 02.04.13 at 11:59 pm

Out of the blue this week, I’ve gotten calls and emails from midtown Toronto realtors and mortgage brokers I haven’t spoken to for over six months (not even an xmas card – sniff!)

One mortgage guy even included an asian recipe in his email to his prospects. How charming. The realtor’s phone msg sounded almost plaintive, as if she was worried about us – worried about herself, more likely.

The taxi driver I advised last week not to buy a condo – saw him again, a fluke – he gave me a big hug. Funny.

Something’s happening……………

#37 mac on 02.05.13 at 12:04 am

Look at the last 3 entries on the right side of the chart. As goes China/Asia so goes Canada. Your bidding war in a hot TO neighbourhood goes to prove it.

#38 A Nightmare on Bay Street on 02.05.13 at 12:09 am

The girl on picture, she just sold her condo she bought 3 years ago. After she figured how much she lost, she just snapped.

Poor girl. At least, shes still hot.

#39 Smoking Man on 02.05.13 at 12:09 am

Names have been changed

Dialog between Smoking Man and son #3 about trip down south……..Enjoy, see I am a dad sort of…..


Number 3 son
Gonna be hard to top that week but Florida thurs ….booom #2013 — with Steve .

You puttin in work yet? Nd which airport do i fly to?

Number 3 son
We are flyin to Atlanta and I’m about to do some research as we speak

Buf, to Atlanta, Atlanta Daytona. The rules Steve #3 and #2 son, the puke bucked is the Atlantic Ocean. Anyone Puking within 1000 yards of the hotel will not be tolerated…..

Number 3 son
No one pukes rookie

I do recall Steve decorating my house once…

Number 3 son
Hahahaha teenage years smokie

new years, remember you decorated your buddies dad’s faces when on old address

Number 3 son
That was like 6 years ago

Number 3 son
Remember Dominican there bud, you took moms wrath

Lol, Pink Floyd on the speakers, what was that drink mombowombo wombo.. Guess those top less ladies in the pool singing, wish you where here with me might have had something to do with that… But I did not puke…….

Number 3 son
Hahahaha ok we will see in Florida who will win this battle

Grasshopper you have so much to learn…

#40 Asse on 02.05.13 at 12:16 am

The reality regarding that topup in Toronto, that was somewhat poorly built, is that there is very little inventory within that neighborhood. A well renovated post war 1200sq foot bungalow will sell for over 700k. An additional 400k seems absurd but with 5 year closed rates at approx 3% its an additional 2k a month. Across the major street they sell from 1.5 to over 10. By the way, the people buying these properties are professionals, have had previous properties, and work in TO. GC’s also buy but they tend to be short term, 2 years live, fix and flip. No musty basement dwellers, tin Hatters, or entitled blue shirts. Their still too busy waiting for the fallout.

#41 45north on 02.05.13 at 12:17 am

the seller who pulls his house off the market is like the girl who pull her boots off. Both are dysfunctional.

LSC: In the past Canadians have for the most part meet their obligations and paid their mortgages. In the past however those losses have been mostly measures in the tens of thousands and they carried them until prices rebounded.

In the US, sellers pulled their houses off the market only to find out that the prices they wanted had floated away. In the US, there were programs to “keep families in their homes” My plan would pay them (the families) $1000 a month for 12 months.

OttawaMike: Tear downs going for $40k over asking: Sandy Hill – too rich for my blood.

#42 Canadian Watchdog on 02.05.13 at 12:19 am

Here's your bidding wars.

#43 Solex on 02.05.13 at 12:24 am

The big squeeze – increased unemployment, stagnating wages, escalating consumer debt, falling house prices, “investments” not keeping up with inflation…

It’s all coming to a climax in the next 18 months. I beleive we are at the beginning of the greatest transfer of wealth in Canadia history and it is going to be extremely painful for the over leveraged masses.

Cash is King!

#44 It’s different here — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate « The Affluent Boomer™ on 02.05.13 at 12:26 am

[…] via It’s different here — Greater Fool – Authored by Garth Turner – The Troubled Future of Real …. […]

#45 Bobby on 02.05.13 at 12:29 am

Home at the end of my street here in Victoria has been for sale for a number of months. Price reductions to date have notched it down about 10% from the original list price. Still for sale.

Had an open house yesterday, the third so far. Didn’t see one car stop and have a look. Suspect the realtor felt like the Maytag repairman.

Looked at a waterfront condo a few weeks ago. Been on the market over a year. Lots of price reductions, but still no sale. Spoke to a realtor friend. It’s dead he says.

Yes, it’s certainly different here in Victoria.

#46 timmy on 02.05.13 at 12:33 am

Collapse of Lehman Bros…Canadian real estate still expensive
Massive stimuls from the Fed…Canadian real estate still expensive
2008-2009 worst crises since the depression…Canadian real estate still expensive
Subprime crises in the states…Canadian real estate still expensive
Subprime continues as more home come on the market in USA…Canadian real estate still expensive
USA market finally bottoms–we think… Canadian real estate still expensive
Canadian economy slows…Canadian real estate still expensive
Media and Banks finally warining about Canadian real estate and debt levels…Canadian real estate still expensive…

#47 Solex on 02.05.13 at 12:38 am

Here on mid Vancouver Island I’ve been watching the real estate market very closely. The missus and I are in our late 20s and 18 months ago we almost let ourselves get talked into buying a $300k house with 5% down and the bulk of the DP from a line of credit. We got house “horny” but praise be to Allah and we were outbid by $1500 and missed out on the house.

Fast forward to the present and there’s houses listed in the Parksville-Nanaimo area that have been on the market for over a year. They’re dropping prices ($25k on a $350k property we were looking at) and they’re still not shifting.

There is zero confidence in the housing market in BC. Buyers are wary of a correction and sellers are pig headedly thinking that they are entitled to sell for a profit. Quote ” I am not interested in selling at a loss” or “I can’t afford to sell for less than $xxx,xxx”.

Well guess what, a house in only worth what the market is willing to pay and these overleveraged, 50 something Alberta retirees are in for a shock this spring when the “spring upturn” doesn’t materialise.

As for us, were saving every penny right now – waiting for the right house at the right price. 20% down at least and some cut throat low balling is in order. My balls will be so low I’ll be dragging brain on the sidewalk…

#48 CrowdedElevatorfartz on 02.05.13 at 12:47 am

@#39 Smoking Man
HEY ! I’m #3 today !
Does that mean i’m your SON?!?!?!?!

“sniff, sniff, DAD!”

#49 JustTryingToProtectEquity on 02.05.13 at 12:47 am

#33 James

Even if Mr. Turner is wrong (and he isn’t), who do you think benefits from ever rising house prices? 70% of Canadians now call themselves home “owners”. Yet, the average Canadian spends $1.65+ for every dollar they earn. The average Canadian’s salary has stagnated at 1995 levels. It is simply unsustainable. How will the next generation (our children) ever be able to buy in the cities (or towns) that they grew up in, if salaries aren’t going up and house prices continue to grow out of reach?
It’s about supply and demand, demographics, historic low interest rates, historic high debt loads, historic high home ownership. It is over. Any fool who would buy in this market is completely off their rocker.

#50 CrowdedElevatorfartz on 02.05.13 at 12:49 am

Eaglebore ….. have you read #47 Solex?
Parksville … dropping like a stink bomb in an express elevator goin’ DOWN!!!!!!!!

#51 Saskatoon-Living on 02.05.13 at 12:54 am

Saskatoon sales down 10% this January compared to last year’s:

And 99 cent birthday cakes are still nowhere to be found.

#52 jake on 02.05.13 at 12:58 am

Serious question: How can I actually short the bulls? I am very interested to know the details… thanks.

#53 Dr. Hoof-Hearted on 02.05.13 at 1:00 am

Someone has kidnapped Garth.

Smoking Man is on the loose like Hannibal Lecturer……

#54 EIT on 02.05.13 at 1:05 am

Damn, those amazons go through some tough training.

#55 Solex on 02.05.13 at 1:10 am

#50 Elevatorfartz

It stinks so bad you can see it… like a brown mist.

This whole area’s RE has been driven by off island retirees who beleived they were entitled to retire at 53 and cashed in on mainland properties driving up the prices here.

Young people are priced out of the market here – there’s not enough well paying jobs to support an average house price of $325k for the region. When compared to the average income and average house price sales in Vancouver, we’re actually even more unaffordable than the mouldy city.

But, this is a great place to live and there’s a lot of demand from retirees and soon to be retirees. However, the relaity is people can’t afford to retire “on time” anymore and those that did have dipped into that HELOC one too many times to tan their arses in Mexico every February and finance that mustang convertibles.

Expecting big corrections here by the summer – when the spring surge doesn’t materialise, the new reality will kcik in for sellers.

Cash is King

#56 meslippery on 02.05.13 at 1:17 am

Come on Garth.
There.s poor Beach Girl running Away.

#57 TEMPLE on 02.05.13 at 1:21 am

That’s the basis of technical analysis, which is about all you need to know when it comes to investing.

That was amusing. I think your baloney curve has broken out above your broadening top.


#58 John Dominsas on 02.05.13 at 1:21 am

Real estate is overvalued and overrated like Garth Turner.

There’s an app for that. — Garth

#59 Muddy Waters on 02.05.13 at 1:22 am

Had to put shades on to read tonight’s post; too much glare. Can’t even remember the content, now.

Hoping Garth will post the flipside of that bacon tomorrow.

#60 dean on 02.05.13 at 1:24 am

A search function would really help.

#61 Nostradamus Le Mad Vlad on 02.05.13 at 1:36 am

All these numbers mean are it’s a lot of fuddleee-dudleeee BS. Better off to play Five Card Stud — easier to understand.
Strange few days. In the late English Premier League Soccer game (9:30 PST) between Fulham and Manchester United, the floodlights failed with about ten minutes to half time. Sunday, same thing in Super Bowl. Bones of Richard III were identified with a Cdn. connection, and the penny was phased out. Aliens in drag?
Closing Retailers Four of them, and with the advent of ‘net shopping, there will probably be a lot more; Boosting the economy by cutting taxes? What a novel idea! Privatization Not always good for the public; Bickering Bunglers People voted for these yahoos? Rice Up 80%; China A good reason why China and Russia are more than prepared to defend Iran; JPM New to housing slumlords? 3:15 clip The European Union and Soviet Union similarities; Bill Gates Global currency war is what is keeping companies tightwads; Inflation? See pic.
Squirrel Scrap Headline is better; US Control What is thought and what is known are two separate identities; Inventions James Dyson, noted for his other works has come up with a new one; Reg Presley The Troggs) has left the building; Samsung Eight foot wide TV; Garlic Soup Kills a lot of things, and Coconut Butter How to make it; 20 mln. illegal aliens How many in Canada? Smog China exporting it to Japan; Cold Plasma high above earth; Original Batmobile sold at auction; Horsemeat Four fast food ingredients worse than that; Hempcrete, not concrete; 7:27 clip Supersonic table tennis; Great Empires None conquered the world, and all crumbled; Women are invariably smarter then men.

#62 Freedom First on 02.05.13 at 1:37 am

Loved the post today Garth! Yes, the Americans have been puzzled over the Canadian RE naivety/idiocy for a while now, as they can’t figure out Canadians thinking “it’s different here” lunacy, in spite of all of the world wide evidence that confirms the Canadians impending financial suicide.

Personally, I am puzzled myself as to how so many readers of your blog miss the crux of your financial guidance/message. They seem to think you are anti-RE, or anti-any other asset, in spite of you repeatedly giving out your ratios/formula as to the % of asset allocation as per: fixed income, equity, RE, commodities, cash etc., and your prudent/wise aversion to not maintaining a balanced and re-balanced, liquid, and diverse portfolio. This is an idiot proof portfolio. Not the “Greater Fool” financial suicide strategy. Garth, I admire you continuing to carry your valuable messages to the public, in spite of the never ending tidal wave of financial insanity, from the ethical know-nothings, and even worse, the unethical profiteers of this financial ignorance.

#63 John Prine on 02.05.13 at 1:52 am

Not such a great advice you are giving to people who religiously follows and giving them false hope. And then another 10 yrs passes by and RE reaches new heights….
Who are the buyers going to be? None of the people in their 20’s now unless there is a BIG correction.

#64 Soylent Green is People on 02.05.13 at 1:53 am


#65 Buy? Curious? on 02.05.13 at 2:30 am

Camel Toe

#66 The funky traveler on 02.05.13 at 2:31 am

On a business trip to Chicago from Toronto, Ontario and let me tell you the economy is a bit rocky but the house prices are nowhere as ridiculous as Toronto even in the prime areas by lake Shore…people should really get out more often and take a look around to get bthings

#67 The funky traveler on 02.05.13 at 2:31 am

Things back into perspective

#68 Andrea Sargeant on 02.05.13 at 2:33 am

Hi Garth,

I am wondering how would one read the closing chart properly. E.g. Would one say Canadians over-value their homes 80 times more than the cost of renting? Or is the unit on the left percentage? i.e., …80% more than the cost of an equivalent rental? And do you know how the two were compared? How would you compare the two fairly? That might be important in helping convince people. How do you compare “value”? Thank you.

#69 Gunboat denier on 02.05.13 at 2:43 am

49 Justtrying:

“Yet, the average Canadian spends $1.65+ for every
dollar they earn.”


This should read “The average Canadian owes $1.65 for each dollar earned on an annual basis”

I easily manged such a debt level when I was younger – and at much higher interest rates. The problem isnt with
the “average”, but with the “typical” and the “extreme”.

#70 JuliaS on 02.05.13 at 2:50 am

#47 Solex

Because a very substantial portion of the speculative BC market has consisted of foreign investors, the money was pulled quickly. Foreign investors don’t sit around, waiting for their foreign properties to appreciate. They purchase for the minimal term and bail as soon as the opportunity presents itself. They are always on the lookout for markets offering quickest returns. BC is no longer “hot” by international standards… it’s no longer hot by any standard, to be honest.

Locals speculators are the ones that have nowhere to go and nowhere to run. They’re the ones holding the bag – waiting for the emptied pot to fill up and and it won’t without foreign cash.

Oh, if only the speculators could make money out of thin air, by flipping houses back and forth between eachother! If only they proverbial pot didn’t require fresh blood.

Domestic buyers had lost their interest. The foreigners have bailed. That’s 2/3 of fresh cash. 1/3 is sitting patiently, watering their magic beans. Well, good luck to them! Vancouver needs taxpayers and they’ve volunteered to serve the city for years to come.

#71 Devore on 02.05.13 at 3:52 am

#37 mac

Look at the last 3 entries on the right side of the chart. As goes China/Asia so goes Canada. Your bidding war in a hot TO neighbourhood goes to prove it.

What goes to prove what? You’re not making any sense.

#72 happy renter on 02.05.13 at 4:01 am

I remember looking for my first house in Victoria in 2003 and the realtor said to me don’t wait to long to buy.I asked why?,he laughed and said because houses are going up a $1000 a week,can you save a $1000 a week. He was absolutly right.I’m so glad I listened to him.I listened to Garth and sold my house in early 2012.
Now housing is on the way down so hopefully new buyers will save $1000 a week waiting .

#73 juno on 02.05.13 at 4:29 am

talking about yearly income.

People think the rest of the world is dying to flock to canada. Also they think its everyone in the rest of the world can afford canadian real estate.

OK, if the average canadian income 80,000/per year with large taxes can’t afford a house in canada then!!!!

Average yearly income

china => 3000 per person
UK ==> 26,0000 disposable income. Note
unemployment is increase in places
like spain, Greece etc
US ==> 84,000 per year

If we can’t afford Canadian property, I would bet the rest of the world also can’t.

Also its so insane here, You can buy a beach front property in Hawaii for the same price as an average house in Regina. Yeah regina, where the winters and cold and the local wild life can suck the life line out of you.

I guess in Hawaii, the local wild life can also do that!

#74 Humpty Dumpty on 02.05.13 at 6:14 am

Shorting here, may be different….


You like shorts Smokin Man… Its Mimico part of LB….

You definitely are the “grand puba” of this blog…..

HD may just be heading the other way…

#75 Asse on 02.05.13 at 6:24 am

I do appreciate anecdotal information buut please preface it with location or it’s rather irrelevant. I actually believe there will be a fall in Toronto as well but if you examine New Yorks (and Boston to some degree) real estate adjustment they followed a different path than some of the states. Yes, we do actually have many similarities to Ney York; sevice based with NO manufacturing, and capital HQ to the country.

#76 Devore on 02.05.13 at 7:21 am

#66 Andrea Sargeant

The axis is percentage overvalued relative to rents.

Real estate as an investment is valued like any other investment: by the cashflow it generates. Income, or earnings, is rent. Price is the purchase price. A price to earnings ratio of 150 is commonly accepted as the baseline case for real estate as investment.

Where the chart goes negative it is an indication that it is better to buy rather than rent, financial and life circumstances (and lifestyle preferences) allowing.

Where the chart is above 0, owners are falling behind renters every month they own, from an investment perspective. Meaning, they subsidize renters. Only way they can make money is to sell for more than they bought for; profits from rents alone do not justify holding it as an investment vs other forms of investments.

#77 Buy? Curious? on 02.05.13 at 7:22 am

Maybe Brad J Lamb could be the next James Bond villian!!!!

#78 New on 02.05.13 at 7:32 am

Vancouver RE is gonna be screwed years to come big time. Go to a local store, check out where the groceries or produce come from; check out your mailbox where are those phone bills, bank statements, insurance bills, or even gov’t letters sent from, I can assure you not even 10% come from BC! So, not even 10% of the businesses making money are from BC. Even our provincial gov’t has outsourced our YVR catering services to Ontario. If you’re looking for 20% lowballing in Vancouver, you sure would be a smaller fool, but still a fool though. And about that bidding war in GTA, you know what, you really need to take that with a grain of salt. During that GTA RE down time in 1997-1998, not a few outbid prospective buyers ended up finding that the sale did not go through and got relisted again!

#79 drydock on 02.05.13 at 8:19 am

This is the link from #159 yesterday, a very sobering read indeed.

#80 fancy_pants on 02.05.13 at 9:03 am

The chart say it all.

Now that dad has changed the rules there are unhappy players in TO:

#81 The American on 02.05.13 at 9:05 am

At #24: Don, I have to admit there is a lot of truth in your comment. I should tell you Americans aren’t going to be very nice about it either, especially after the constant spew we have received for years concerning the matter. Seriously, I am in Hawaii right now and I have run into a lot of Canadians – ALL of whom have something to say anti-U.S. banking system (and anti-U.S. for that matter) and pro-Canada system. The delusion is astounding and frankly not even worth trying to correct when someone acts hat ignorant. Also it is entertaining to see the Canadian flags on nearly all backpacks, shirts, hats, stickers, tattoos, and yes, I even saw a canadian flag on a geriatric’s walker. Only country we see around here that behaves like that, and this is Hawaii…. Plenty of French, Brits, Tahitians, Chinese, Japanese, Brazilians. That is no joke. Just yesterday I was at the Bishop Museum where a group of no less than thirty, yes THIRTY, Canadians were sitting outside having lunch and all talking real estate and how there is no bubble whatsoever in Canada because “everyone wants to move [there].” Un-freaking-believable. Delusional. Travel in packs? You dont get Hawaii, or the Golden Coast for that matter, in Canada. Yeah, it was a little offensive, naive, and elementary.

The big difference is Canadians should have known better, especially after watching how this story played out the world over time and time again fom the U.K., Ireland, U.S., Spain, Italy, France, etc. Really, what on Earth could possibly be Canada’s excuse? As I’ve said from day one, “Pride commeth before the fall. Those pointing the finger the most have three pointing right back at them.” The Canadian banking system is a farce, as is the CMHC, the media, and government. All were in on this hoax. The Canadian people have been DOOPED and ther is nobody to blame this time around but themselves. Nope, you can’t even blame Americans, although I’m sure someone in your neck of the woods that someone will find a way to avert responsibility and somehow blame the U.S. government on the Canadian housing crash. Lol

#82 Anonymous on 02.05.13 at 9:15 am

#16 Mark W

Of course the media puts out a sympathetic story when racial minorities are displaced out to Surrey. White people who grew up in Vancouver have been getting displaced out to Surrey for years now and the media never bats an eye out.

That’s because it’s not politically correct to talk about white people who happen to be poor renters. No that goes against the script that only non-white people and immigrants can be marginalized and poor.

Everybody associated Surrey with the Indian diaspora. What many people are unaware of is that Surrey is the beating hard of the white underclass (white trash, if you want to use the pejorative term) in Metro Vancouver. Surrey is chalk full of low income and working class white people who grew up in Vancouver and moved to Surrey for lower rents (often in basement suites owned by members of the Indian diaspora who live upstairs). But it’s almost politically incorrect to even acknowledge the existence of poor white basement suite renters in Surrey displaced from Vancouver. To even acknowledge the existence of these people is borderline racist.

#83 Tony Right on 02.05.13 at 9:32 am

How do I short Brad Lamb?

#84 Herb on 02.05.13 at 9:38 am

Congrats on picking up some recognition in the greater world, Garth. A prophet is never honoured in his own land …

#85 AK on 02.05.13 at 9:38 am

Yes, The US is in a depression. Right…. The Dow hit 14,000 for no reason at all. Right..

Toyota raises annual forecasts, reports quarterly profit rose 23 percent on US sales jump

#86 Gotthardbahn on 02.05.13 at 9:42 am

All this may very well be so, Garth, but why are builders a-building when the market – according to you- sucks. From my vantage point at Yonge & Eglinton in the big smoke I can see eight (!) condo developments during a five minute walk to the TTC ‘tube’ in the morning. A parking lot across the street – now an ex-parking lot – was fenced off over the weekend and the steam shovels and pile-drivers will be moving in shortly. Doesn’t look like a ‘slowdown’ to me, pal.

#87 AK on 02.05.13 at 9:45 am

Best Bond Investment Strategy: ‘Just Say No!’

#88 CrowdedElevatorfartz on 02.05.13 at 9:56 am

@#81 The American
Total agreement. Nothing more boorish than loud obnoxious canuckleheads ( of which there seems to be an endless supply). The only thing more annoying is 20 something Quebecois kids with their “Fleur de Lis” badges on their knapsacks believing the myth of a sustainable sovereign Quebec…good luck with that mes amis.

However you forgot to mention our “free” medical system. The system thats underfunded and overloaded, and groaning toward baby boomer armageddon.
You know. The one that makes you wait a year for a hip operation or a year for an MRI to see if you have cancer or not.
Yup we Canucks have lots to be smug about….

#89 Jaguar on 02.05.13 at 10:17 am

‘Hopped up Frankennumbers”…. What prose. I love your blog, Garth. And is it possible that the reason some sellers might be removing their homes from the marketplace is because they find themselves in a ‘negative equity position’ due to the drop in prices? After paying off their large home credit lines, realtor fees, legal fees, penalties, etc. , they are under water..

#90 Asse on 02.05.13 at 10:22 am

Few rules for life:
– Figure out what you Need. Look at those who have and emulate. May become a thief but that’s your perogative.
-Stay away from like minded folks. Too many entitled think their enlightened. Need more perspective. Entitled are in the news daily it seems. Keep a picture of Russell Williams to remind you.
-Build from the ground up. Start with yourself and move on. Need health and strength to fight the good fight.
-Read. Anything and everything with an open, curious and questioning mind. Lots of nonsense but at least it’s amusing. Really enjoyed Frederick Forsyth, but university chick’s used to appreciate can lit. If you’re not a university guy build you’re biceps. If you have both you’re golden.
-Accept that you’re partners nuts. They are, but they think the same of you. Some guy once described his relationship as a comfortable companionship…that I think is the goal.
-Never marry a happy ending girl from another country…enough said
-If you’re partners fixated on Oprah, the doctors, dr.Phil or other beautiful life syndrome crap hold on tight…you’re in for a bumpy landing.
-Family first. Always. Too many like minded folks enjoy putting down other like minded folks. Otherwise you may end up like Beach Girl, no family, lonely, but with a phone full of ‘friends’ who are busy with their families. The goal is always family, they give you strength and the support to do the undoable….And maybe some cash….

#91 JustTryingToProtectEquity on 02.05.13 at 10:30 am

#69 Gunboat Denier

But we are only dealing in extremes. Never before, in Canadian history, have we seen outlandish personal debt levels like this. Never before, in Canadian history, have we seen a run up in home prices like this. You and I were the lucky ones, we were able to pay off our debt loads when interest rates were higher, back in the ’80s and ’90s. But don’t you remember what happened to house prices in ’89? They swooned! Don’t you remember what happened to many of the marriages in your neighbourhood, when the overleveraged realized they owed more on their homes than they were worth? We lived on a street of 12 homes, 6 houses on either side. The older marriages, those who had long ago paid off their mortgages, their marriages stayed intact. There were 5 failed marriages on our street alone. 5 marriages on a street of 12 homes. That’s what debt does. That’s what being over leveraged and fully invested in one asset does. Never before, in Canadian history, have we seen so many people run up so much personal debt. Imagine an environment where people were allowed to put 0 down on a 40 year amortization?! How are we any different than all the other countries, with their “world class” cities (whatever that means)? How are we any different from our neighbours to the south? And , most importantly, with home “ownership” now at 70%, the highest it has ever been in Canadian history, and with prices out of reach for our own children, who were born and raised, and who are well educated and working two jobs each in the cities or towns that they were born in… How on earth do you see this being sustainable? Like me, through a combination of luck and hard work, you were able to pay off your debt load back when interest rates were much higher. Agreed. But we were paying off astronomically smaller loans. I know young couples in my current neighbourhood who have $800 thousand mortgages and $250 thousand LOCs! Yes, you and I paid off our debts. A large number of current house “owners” simply will not be able to. Just have a look at Vancouver and Victoria, where it’s happening already. Just try to remember what happened to home prices after they peaked in ’89. The market swooned. Your home did not return to its peak value again until 2001. This time, the swoon will be far worse. All the variables are far worse. Like nothing we have ever experienced in Canadian history.

#92 hangfire on 02.05.13 at 10:35 am

Huge jump in consumer debt shows real life inflation that the PTB won’t admit to……”Don’t scare the straights” say the liars.

#93 Dupcheck on 02.05.13 at 10:50 am

It makes me think what is going on! I am saying this because the other day I was shopping at Nofrills and this young couple was talking loud (the guy goes: we can’t afford this here, it is on sale at Giant Tiger).

Another situation at my works lunch room: Once in two weeks the lunch room is empty, i wondered why, it was pay day.

It is sad to see that people can only buy groceries when on sale. It is also sad to see, that average Canadians can not afford to go out for lunch more than once in two weeks.

Also God forbid they see you with a starbucks coffee instead of a Timies, they judge by saiyng: Starbucks ehhhhh, I go: It’s just 35 cents more than yours swiss water, how does that make me rich? I can not understand it, people are stretched beyond their financial capacity and do not enjoy life a bit more.

Sad sad….I guess all their money is gone to their homes. Slave to a home.

#94 Daisy Mae on 02.05.13 at 10:54 am

CBC, February 5th: “Debt loads ticked higher in every province except B.C., where they shrank by 0.09 per cent.

TransUnion notes, however, that while consumer debt loads in B.C. are shrinking, at $37,244 the province still has the highest average debt load in the country.”

#95 Gunboat denier on 02.05.13 at 11:06 am

55 Solex

“When compared to the average income and average
house price sales in Vancouver, we’re actually even more
unaffordable than the mouldy city.”

Easily proven not to be true. Up island is still way more affordable than Van or Vic.

And why were you looking at “average” houses in the $350k range? Seems to me a young couple should be
looking at smaller starter homes. Or are you entitled?

#96 hangfire on 02.05.13 at 11:06 am

#76..D…actually the traditional ratio is 20……150 is insane. I/R=V………or flow to service debt….if this can’t be achieved…. the smart investor walks…..

#97 Toronto_CA on 02.05.13 at 11:23 am

“The average consumer’s total debt load increased by almost 6 per cent to a record-smashing $27,485 at the end of 2012, amid disturbing signs of an upswing in the amount of debt Canadians are taking on.”

Disturbing is the right word. 6% growth in consumer debt? That’s an insane increase about 3 times the rate of inflation.

As Garth never tires of pointing out, when Canadians begin to deleverage (pay back this debt instead of increasing it) OR when interest rates rise in general, the economy will suffer. It will suffer greatly as people spend on debt principal and interest instead of on goods and services.

This will lead to lower growth, or a recession, and this will cause job loss/wage stagnation (further) and the end to house price run-ups.

The rest of the world has began de-leveraging, but here in Canada, “Charge it!”

#98 FullofFear on 02.05.13 at 11:28 am

One of the things that makes this blog useful reading, is the charts. But it would be even more useful if the charts had a source (or a date).

#99 Living in AB on 02.05.13 at 11:37 am

Well you can sing the song all you want. Your spring crash won’t come, prices will never correct, and Toronto will always hold its value. This is Canada and we will not allow a US style correction (or anything close to it). Sure some markets perhaps got a little heated (Van) but guess what…. AB has its oil and it will continue to heat the economy. Last time I checked the Hummer and Harley require gas.
Also, rates aren’t going any where either. There isn’t a need.

#100 Andrew on 02.05.13 at 11:41 am

See what I mean?

2 articles today on the Edmonton Market:

The Sun article is basically a real estate ad.
The Journal article not far beyond, though they refrained from the cheerleading and the actual listing included in the Sun article.

Recent MSM articles led us all to believe to that they were not going to be the industry’s lapdog any more, but they continue to publish any and all drivel that the Realty associations spew out.

I am beyond frustrated by this irresponsible nonsense.

#101 BillyBob on 02.05.13 at 11:54 am

@The American

Whoa there tiger, easy…I’m no fan of stupid people either, but you’re starting to foam at the mouth and dribble on the keyboard a bit. We get it, you hate Canadians. I’m a Canuck who moved to Dubai and have watched, astounded, as Canadians fail to learn from the massive mistakes of the nations you mention. (Including yours.) I’m no flag-waver, although I’d move back to Canada a lot quicker than the US, if only for the whole gun-psycho thing. But for now I’m content to earn a whole lot of tax-free money (did you know, the only two countries in the world to tax based on citizenship as opposed to residence, are the USA and North Korea? Sucks for my Yankee colleagues) and wait to see what happens.

But north of the border has no monopoly on idiots and haters, as you are amply proving. Or maybe your post is intended to be, like, ironic? (The whole American ranting against Canadians ranting against Americans thing. I mean, an American lecturing about a people proud of their flag? REALLY? HAHAHAHAH!)

I happen to love Americans as a whole, have American inlaws, great buddies in the UAE. But you’re only perpetuating a tired stereotype, sorry. Quit while you’re ahead.

#102 sue on 02.05.13 at 12:04 pm

#14 Big Al

Housing prices drop first (mostly due to debt, wages and general unaffordability) and then unemployment increases due to the loss of the “wealth effect”. Losing equity on paper halts spending which affects the economy/hiring etc.

#103 jim on 02.05.13 at 12:04 pm


Right you are. Canadians had the luxury of watching the US market implode. Some of the same people (e.g., Schiff, Schiller) were warning of a similar situation in Canada. Yet the Canadian public couldn’t be bothered to look south of the border. Extreme myopia, to the point of stupidity.

I’m looking south to the US for work opportunities, as my fiance is a US citizen. I see the signs of change all around, with layoffs, declining oil revenues, drops in retail sales, rising debt levels. Canada isn’t competitive with the US at the moment. Even our oil sands are being outcompeted by Bakken and other areas. Canada is about to eat humble pie.

#104 Sebee on 02.05.13 at 12:11 pm

Look how good Canadians are at deleveraging debt!

#105 juno on 02.05.13 at 12:11 pm

Debt Bondage is on the increase with ultra low interest rates. Average is 27,485 per person. With BC at 37,244.

I believe that is per person. The mention the average going up b 1,500. I wonder if that includes children. So if there are 3 in the household, thats a whopping 90,000 per hh or in bc 110,000. At Ultra low rates for now. But the risk is out there so if you were the lender, I’m should the Yellow Alert Light must be on right now

I’m not sure if they also include mortgages as part of the equation.

#106 ozy - Bidding drives prices up on 02.05.13 at 12:20 pm

Bidding drives prices up, as long as this technique is used (still legal), coupled with look at previous sold comparables (at previous biddings) – it is logically almost guaranteed to raise prices for as much one can pay + a hand + a leg :)
And boy, there are a lot of FAT pockets in this city. It is full of rich people like Garth, Brad and up!

#107 Rainclouds on 02.05.13 at 12:35 pm

#81 American

Just returned to the mouldy City from Hawaii and yes I concur the flags are ubiquitous.There is no monopoly on idiots as I have heard moronic coments from Canadians, Brits, US, Aussies ect, safe to say every country has em. Most of us have a clue and know when to shut up.

I do agree with your comments re precedents around the world and advance notice: If you follow this to it’s logical conclusion I do wonder about ramifications to Hawaii/Fla/AZ/CA Real Estate as there are a lot of my countrymen(many being the idiots you mention) who have leveraged their homes in Canada to buy RE in the sunbelts. What happens when the inevitable happens? Gonna get interesting in the next few years for sure


#108 Rob on 02.05.13 at 12:38 pm

I noticed something new in TREB’s release of January 2013’s monthly resale figures. Excerpt as follows:

“Greater Toronto REALTORS® are passionate about their work. They are governed by a strict Code of Ethics and share a state-of-the-art Multiple Listing Service.”

It seems someone struck a chord with them.


#109 Suede on 02.05.13 at 12:41 pm

#39 SM

Mamajuana! Haha, what a drink in the DR it is. Aphrodesiac is what it’s advertised as and if they had any clue, they would advertise their country as the #1 producer of that stuff in the world. Go to Cuba to get a cigar, and get hallucinogenic liquor in the DR that gets you revved up!

#61 Nostra Vlad
Good link the other day of the father from Sandy Hook testifying. Nice to get counter opinions sometimes even if you don’t agree with them 100%

#110 Carlos on 02.05.13 at 12:42 pm


The next generation won’t be able to afford perhaps. They will inherent their parents home. As simple as that.

#111 Bottoms_Up on 02.05.13 at 12:44 pm

#224 45north on 02.04.13 at 11:38 pm
What’s broken about the drive clean program is that 3 yr-old cars have to be tested…that makes no sense. So I had an ’06 that was tested in ’09 (passed with flying colours obviously), then I had to re-test again in 2010 due to lease buy-out (obviously passed again), then in 2011 because it was due again, and now I have to do it again!! It is a complete money grab and waste of time.

It makes way more sense to test the oldest cars on the road. Perhaps those greater than 12 years old and/or over 250-300,000 km.

#112 Wes Mantooth on 02.05.13 at 12:51 pm

Wait?!? Housing prices up? Bidding wars back? Surely we must correct this…. Let’s attack Canadians most prized asset and source of greatest sense of pride and stability in their lives further… Lets make it extremely difficult for anyone to achieve this stability, pride and community. Cancel the HBP! Restrict mortgages to 50% down! Sound like a good idea? Lets see how politicans do with that election platform
Here is the real deal:
#1 Interest rates aren’t going up and if they do I can guarantee you house prices will be going UP not down… Do you really think the Bank of Canada is going to hike rates in a declining real estate market?
#2 If there is a material pullback in housing prices everyone to a T that is waiting for this glorious buying opportunity will be more concerned with whether they have a job next week and watching the value of their treasured stock portolio sink like a stone, than purchasing a home. If this occurs see #1 and reverse… The Bank of Canada will be CUTTING rates further…

So what to do?

Well place your bets… If you like the recovery story pick your points in real estate (keeping in my condos are a commodity) and get yourself in the stock market. If you don’t like the global economy and of the belief the entire economic system is on the verge of collapse… Buy some gold, guns and make your way to the Canadian wilderness…

My bet remains… >50% of the people on this blog miss any buying opportunity in housing..

#113 Bottoms_Up on 02.05.13 at 12:51 pm

#81 The American on 02.05.13 at 9:05 am
Thanks for sharing your story, pretty funny.

You do have to admit that US lending standards were too lax (no documentation of income etc.) — and having dangerous products such as mortgages with rates that quickly reset to much higher levels (100% higher for example).

And I’m not here to defend the Canadian banking system, but in my personal experience two of the big 5 that I met with were actually very conservative, I couldn’t get a conservative mortgage back in ’07 and ’08 (even though having great job prospects, great credit and cash in the bank) because I didn’t have a good enough paying job to back that mortgage.

So in MY experience the Canadian banks were prudent, and there is no doubt in my mind that the US banks would have given me that mortgage were I a US citizen and had it been the year 2005.

#114 all_we_need_is_mortgage on 02.05.13 at 12:59 pm

Susan Pigg knows better: “Toronto-area realtors are seeing a surprisingly strong start to 2013 after a slump that began last spring.”

#115 Butch on 02.05.13 at 1:23 pm

More bidding wars…? Damn – should have bought in 2008, will we ever see that low again?

#116 AprilNewwest on 02.05.13 at 1:31 pm

#81 American. I agree fully with you on Canadians being “dooped”. I know a couple of retired Van teachers who believe Vancouver RE will not drop in value … based on “experience” they say. One of them is in a leaky condo costing her $125 thousand so I’m guessing she doesn’t want to hear of a RE decline.Too many believe what they get on dumb tv. One would think people with a higher education would have some critical thinking ability. Good for you American. Tell it like it is. Those Canadians you overheard in Hawaii sound so delusional I can’t help but wish for them to have a wake up call about what’s going on in their beloved Canada. Canadians going around advertising the flag ….well that says it all……………….

#117 Rand man on 02.05.13 at 1:33 pm

John Hussman warning about the stock market…

“I am ambivalent to the exact timing since I cannot know it. But I am more confident that the punchline to this comedy, if it continues unabated, will be the devaluation of the currency and at least a de facto default on the debt. And the usual yahoos will rise up and seek power, promising people to take away their pain, while inflicting it on ‘the others.’

“Present market conditions now match 6 other instances in history: August 1929 (followed by the 85% market decline of the Great Depression), November 1972 (followed by a market plunge in excess of 50%), August 1987 (followed by a market crash in excess of 30%), March 2000 (followed by a market plunge in excess of 50%), May 2007 (followed by a market plunge in excess of 50%), and January 2011 (followed by a market decline limited to just under 20% as a result of central bank intervention). These conditions represent a syndrome of overvalued, overbought, overbullish, rising yield conditions that has emerged near the most significant market peaks – and preceded the most severe market declines – in history:
S&P 500 Index overvalued, with the Shiller P/E (S&P 500 divided by the 10-year average of inflation-adjusted earnings) greater than 18. The present multiple is actually 22.6.
S&P 500 Index overbought, with the index more than 7% above its 52-week smoothing, at least 50% above its 4-year low, and within 3% of its upper Bollinger bands (2 standard deviations above the 20-period moving average) at daily, weekly, and monthly resolutions. Presently, the S&P 500 is either at or slightly through each of those bands.
Investor sentiment overbullish (Investors Intelligence), with the 2-week average of advisory bulls greater than 52% and bearishness below 28%. The most recent weekly figures were 54.3% vs. 22.3%. The sentiment figures we use for 1929 are imputed using the extent and volatility of prior market movements, which explains a significant amount of variation in investor sentiment over time.
Yields rising, with the 10-year Treasury yield higher than


#118 Doug on 02.05.13 at 1:36 pm

I wonder at two things.

The first is why the government continues supporting CMHC. It was originally created to spur home construction for the veterans that returned from WWII, because the banks would not take on the risk of those loans. I am constantly puzzled as to why the Gov’t of Canada guarantees loans, when it is the Banks’ business to assess risk and set lending rates and savings rates to make money. F and the dancing peckerettes should be getting Canada out of the business. They have made housing less accessible and have created a situation where Canadians are carrying excessive debt.

The second thing I worry about is the amount of debt that we friendly Canuckleheads carry. All this money pouring into real estate has re-prioritised peoples’ budgeting. Now all the money goes to development firms and the banks rather than being circulated. Money that doesn’t go to debt servicing can be spent on vacations, cars, clothes, food, entertainment, etc., creating jobs and spurring the economy. Yes, home construction does contribute, but a building is a 50-100 year object that does not create a lot of jobs after it’s built. We need disposable income to spin things up.

#119 Inglorious Investor on 02.05.13 at 1:41 pm

#225 Chubbychops on 02.05.13 at 3:14 am

“Your in depth perception and erudite comments are read with interest. The only reason you can expound in this manner is because you have money. Those without opportunity, born under different and less fortunate circumstances would find it difficult to accept your thoughts. BUT, good for you, good for your wife and your children, may your luck continue.”

I sincerely appreciate your comment, Chubbychops.

You say that I have money. Well, to be honest, these days I’m not sure what “having money” even means. I can tell you that my household net worth is by multiples higher than the median or average (assuming those numbers even mean anything).

Am I wealthy? I don’t think so. I don’t really know how my household net worth compares to those in my solidly middle-class familial and social circles. (These days, homes and cars are not always good indicators of actual wealth.) But I can tell you that my family’s standard of living is no higher, and in some cases lower, than those I associate with. That doesn’t mean we have a lower quality of life though, as these are two different things. Perhaps our one indulgence is we have a cleaning lady who comes every other week. I value time over things.

I have two vehicles: one is 13 years old and the other is almost 9. Actually, they are about the same age as my children because we bought both vehicles when my wife was pregnant. (Perhaps I will have to knock her up again to buy another car.)

My kids attend public school. Both my wife and I work (often after regular business hours). We cook all of our dinners from scratch every day and eat bagged lunches. No prepared meals. We dine out rarely. My wife price-matches when buying groceries (which I figure is worth in savings of about $2,400 in pre-tax income per year.) On weekends, my wife bakes cookies, muffins and cakes; and she roasts a batch of almonds once in a while. I walk with my kids to school almost every morning (for the exercise and just to chat). Friday night is usually family movie night where we’ll catch something on Netflix or Apple TV. I usually fall asleep in my daughter’s lap.

I believe in hard work, equal justice, balance, regulated free markets, and getting the best value for your money. I often harp about public sector unions because I don’t believe tax payers are getting the best value for our money. I think it is immoral to force Canadians with no pensions and stagnant incomes to give more money via higher taxes to give more to those who already have gold-plated, government pensions and high incomes. I am disturbed by the current imbalance between the public and the private sector. I believe we the people need to, on occasion, remind those in government just who they are supposed to be working for. I believe money should not dictate political power.

I believe we need to care for those who can’t care for themselves, but the money should only go to those who really need it. But when it’s really needed, don’t be cheap. The fraud in the welfare system is rampant. If those who can work got off welfare, there might be more money for those who really need it. I believe in publicly funded health care because health care quality should not be determined by P&Ls. I suspect Obamacare is a scam. I believe the people create wealth, not governments. Therefore, the more government takes the less prosperous society will be. However, I do believe in paying for responsible government. But it must be responsible to the we the people, not big money interests.

I can go on but my comment is already too long, and rather crude, as I am writing on the fly.

Perhaps we can discuss specific issues as we go. There but by the grace of Garth go I.

#120 Rand man on 02.05.13 at 2:01 pm

Yes it is different here…

Now for something completely different!

The DOJ in the USSA is (get this) blaming rating agencies
For the financial crisis….

Pure pathetic political posturing, because it was the rating agencies, whose complicity and conflicts of interest everyone knew about, who were responsible for the financial crisis. Not Alan Greenspan, not Ben Bernanke, and certainly not Wall Street which made tens of billions in profits selling CDOs to idiots in Europe and Asia. Of course, the US consumer who had a gun held against their head when they were buying McMansions with no money down and no future cash flow is not even mentioned…..

#121 Steven Rowlandson on 02.05.13 at 2:05 pm

That picture is about as crazy as me and a bunch of Katimavikers marching around the block in Hearst ,Ontario in our bathing suits in -40 C weather back in the winter of 1978-79 after getting out of a sauna that was +225 F. People do some wild and crazy things sometimes.

#122 TEMPLE on 02.05.13 at 2:16 pm

#118 Inglorious Investor on 02.05.13 at 1:41 pm

I think it is immoral to force Canadians with no pensions and stagnant incomes to give more money via higher taxes to give more to those who already have gold-plated, government pensions and high incomes.

I’m a civil servant and my “gold-plated” government pension and “high income” is a mythical creature. I don’t think you know very much about working for the public sector. I make a lot less working as a civil servant than what I would make in the same job in the private sector. I pay a huge amount into a pension plan that will probably be gone when I retire- this amount paid reduces my RRSP contribution limit, so I am doubly screwed. Despite this, I still like working for the civil service because I have a lot of pride in working for Canada and I believe in the importance of the work that I do.

I am disturbed by the current imbalance between the public and the private sector.

I am, too. I think the private sector is out of control. The solution isn’t to punish unions so that we all end up without pensions or job protection. How about asking the private sector to treat its workers fairly instead? I understand that misery loves company, but if pensions are so jealously coveted by private sector workers, then unionize and get one instead of trying to take away the pensions of others. It’s petty and counterproductive.


#123 Andrew on 02.05.13 at 2:17 pm

#99 Living in AB

ha, ha, good timing on the post…

Your comment is textbook “It’s different Here”, wondering if you are serious or tongue in cheek?

Perhaps you missed Redford’s speech a few days ago where she mentioned something about Alberta being 6 Billion short, missing a pipeline and budget cuts coming…

AB might have oil but you got a sell it somewhere and then you have to be able to get it there.

#124 AprilNewwest on 02.05.13 at 2:26 pm

#86 – Your missing something……… and the slow down has begun….. also some developers late to the game lost their shirts in the last boom/bust.

#125 Dr. Hoof Hearted on 02.05.13 at 2:30 pm

Is that a photo of an Iceland Banker getting run out of town?

#126 jess on 02.05.13 at 2:37 pm

KitCamWat: according to cmhc
the vacancy rates for units priced
above $1,000 have jumped…
russian winter games 50billion !
how would one know if it was a bribe or a bonus?

Russian Court Rules On VAT Invoices
by Tatiana Smolenskaya,, Moscow
04 February 2013

Bonuses are offered in the Russian retail sector to encourage early payment of invoices, or to incentivize a shop to purchase a large quantity of a particular product. However, these bonuses do not reduce the list price of a product, and businesses offering bonuses therefore currently need to provide an adjusted invoice for VAT purposes for each original invoice. Businesses including Jaguar Land Rover, Philips, Volvo, Xerox argued that this requires a vast amount of extra paperwork, to the extent that it may not be possible to continue to offer bonuses.

Further, adjusted invoices must be provided within five days of the purchaser being made aware of the new price, making the issuance of invoices for cumulative periods impossible.

The Court, however, decided that the current rules accorded with Russia’s tax code, and that there was therefore no basis for ordering a change.


#127 JustTryingToProtectEquity on 02.05.13 at 2:41 pm

#110 Carlos

I wish you were right. I wish it was that simple. But anybody who put 0% to 5% down, on a 35 to 40 year amortization, is going to lose their home if the husband or wife sees a decrease in pay or a job loss. Or if interest rates go up. Even as it is, Stats Can tells us that Canadians are not putting enough away for retirement. What retirement? A couple in their 30s who put 0 down on a 40 year amortization will never see retirement. My wife and I bought a home in ’89, at the peak of that market, but we paid it off in two years, so the high interest rates didn’t kill us. We sold that house in ’96 for a $30K loss but bought another home in the same down market, a home that was listed at $580K, eighteen months before we bought it. We bought it for $325 and paid it off in two years. We sold it last spring, for $975, three times what we bought it for, and are now renting. The young couples who think they will still be together after 40 years of paying down a mortgage, 40 years of accruing other debts on their LOCs, aren’t being reasonable. They won’t have a house for their kids to inherit. And they won’t be married. You can’t spend 40 years together putting that much money toward a mortgage. It isn’t living. This market, like housing markets all over the world, before they corrected, is way too pricey, way too overbought, way too overleveraged. And, with Canadian debt loads only increasing, it has no where to go… but down. Regardless of interest rates.

#128 Dr. Ralph Cramdown, FRCS(C) on 02.05.13 at 2:43 pm

And why were you looking at “average” houses in the $350k range? Seems to me a young couple should be looking at smaller starter homes. Or are you entitled?

Maybe somebody’s hoping for a materially better retirement by saving the money they’d otherwise blow on transaction fees and sundries? When your local real estate board crows about an average $40-50k in economic spin-offs associated with every home sale, who do you suppose is bringing that money to the table?

#129 Dr. Ralph Cramdown, FRCS(C) on 02.05.13 at 2:52 pm

Greater Toronto REALTORS […] share a state-of-the-art Multiple Listing Service.

I wish they’d share it with the public! The version I see is cluttered with condo parking spots, 1 bedroom + niche units magically transmogrified into 2 bedrooms, photos that put the ‘fun’ into funhouse mirrors and data that is the epitome of “garbage in, garbage out.”

#130 The Prophet Elijah on 02.05.13 at 2:59 pm

#85 AK on 02.05.13 at 9:38 am Yes, The US is in a depression. Right…. The Dow hit 14,000 for no reason at all. Right..

Toyota raises annual forecasts, reports quarterly profit rose 23 percent on US sales jump
Yep the auto industry is the next subprime lending that will go.

#131 Mister Obvious on 02.05.13 at 3:04 pm

“My call has always been for a lengthy correction, not a crash. I will, of course, be correct. — Garth”


I’ve been reading this blog a long time and can attest to the truth of this statement. Garth has also reiterated many times that some areas will fare worse than others, but on average the future of Canadian residential real estate is one of slow to moderate deflation depending on location.

What many don’t seem to grasp it that a protracted slump and a rapid decline (call it a ‘crash’ if you must) are almost equally destructive to those people who are either overextended and illiquid or equity-rich but cash poor.

Most of the financial “plans” of today’s homeowners assume either never-ending increases or at least preserved equity that can be easily converted to ready cash when needed.

Sorry to disappoint those bibliophiles who yearn for financial fire and brimstone where the wicked are consumed on the alter of their own greed and stupidity. It’s not going to happen quite that way.

But it will happen regardless, and there will be plenty of pain to go around.

#132 jess on 02.05.13 at 3:06 pm
The Roman Domitius Ulpianus was one of the first annuity dealers and is credited with creating the first life expectancy table.

#133 45north on 02.05.13 at 3:14 pm

Bottoms_Up: talking about Ontario’s Drive-Clean program: It is a complete money grab and waste of time.

I couldn’t find on the site where it says when a car has to be tested. If there was a small tweak to the rules then costs could be brought down. Remember too, that private garages who have invested in the equipment would lose business.

#134 betamax on 02.05.13 at 3:21 pm

#81 The American: “…Canadian flags on nearly all backpacks, shirts, hats, stickers, tattoos, and yes, I even saw a canadian flag on a geriatric’s walker.”

Canadians are seemingly now overcompensating for decades of humility by stooping to uncritical jingoism and flag-waving. We used to accuse Americans of mindless patriotism, but now we’ve exceeded them.

As Thoreau said, “Patriotism is a maggot in their heads.”

#135 00CP on 02.05.13 at 3:27 pm

“I believe…”

Inglorious Investor for PM!

#136 Daisy Mae on 02.05.13 at 3:29 pm

#103 Jim: “Yet the Canadian public couldn’t be bothered to look south of the border. Extreme myopia, to the point of stupidity.”


And, of course, it was our stupid federal government that made it all so easy to forget….the realities. And so, we did.

#137 Timing is Everything on 02.05.13 at 3:29 pm

Garth, riddle me this! Have you deciphered yet?

“Our government has taken aggressive and proactive actions since 2008 to protect the Canadian housing market and curb personal debt. We will continue to monitor the housing market to ensure its long-term stability,” Flaherty said in statement.

#138 Seriously? on 02.05.13 at 3:57 pm

How soon we forget. So let me remind you.

As a result of the American mortgage meltdown, Canadian banks were left with a 60 BILLION dollar exposure. That’s right, the Canadian banking brain trust lost 60 BILLION dollars.

We the taxpayer bailed the banks out With 60 BILLION

What did the Banking Brain Trust do next? We let me remind you. They went straight into the business of selling SUB-PRIME loans to anyone that was breathing to the ceiling of 600 BILLION taxpayer insured dollars.

The American is correct, the Canadian banking brain trust is a farce, bordering on being criminal, and Canadians on the whole are DELUSIONAL.

Res Ipsa Loquitur. The facts speak for themselves.

Sorry for yelling.


#139 Stalin , Lenin and Mao on 02.05.13 at 4:28 pm

Remember :


#140 bill on 02.05.13 at 4:31 pm

”My call has always been for a lengthy correction, not a crash”
this is a common perception I fear, amongst the ‘readers’
maybe put it at the top of the blog with other quotes that just dont seem to be ‘read right’?

#141 Andrew on 02.05.13 at 4:41 pm

#112 Wes

It seems to be the assumption that many who post or follow this blog is a frustrated would-be home buyer, currently renting and praying for a crash.

Not completely true.

Our Real Estate and Debt pig out and our “We’re smarter than the U.S.” mentality has put our economy in some serious risk and anyone with any sense knows that a crash will screw us all.

I’m not happy that the actions of a bunch of greater fools and their idiot Realtor cheerleaders will almost certainly drag us all down financially to some extent in the very near future.

I follow this blog, because Garth preaches, no pleads for reason and balance and gives us many strategies to avoid finanicial ruin and maybe even have some kind of retirement income.

#142 BoomBoomDynamite on 02.05.13 at 4:45 pm

Will a real estate crash strongly affect a REIT?

#143 zeeman1 on 02.05.13 at 4:46 pm

#121 TEMPLE.

I have to laugh every time I hear a career government parasite, er, employe, claim that they would make more in the private sector.

If that’s true, why are you still working for government?

I thought so…

#144 JuliaS on 02.05.13 at 4:54 pm

Arguing over which area of BC is more affordable is like comparing survival chances of someone who’s been shot 30 times vs 28.

#145 rosie "moving forward" on 02.05.13 at 4:55 pm

# 99 Moving forward on my neighborhood walk for sale sign index, I can report a 50% increase . Nine home are up for grabs from six, 2 weeks ago. The blog has acquired a many new subscribers. This is excellent news. Their optimistic entries regarding their local markets are enlightening. As usual, time will tell, moving forward that is.

#146 Inglorious Investor on 02.05.13 at 4:56 pm

#121 TEMPLE on 02.05.13 at 2:16 pm

Cry me a river of tax payer-funded tears.

I know more about working for the public sector than you think.

The CFIB did a study in 2006 which says:

“[…] government and public sector employees are paid roughly 8 to 17 per cent more than similarly employed individuals in the private sector. […] taking into account significantly higher paid benefits and shorter workweeks, the public sector total compensation advantage balloons to past 30 per cent.”

Take teachers, for example. At the high end, a teacher’s compensation package is worth about $120,000. That’s in the realm of a director or vice president at a large corporation. Give. Me. A. Break.

Tell me, is your pension DB or DC? I bet it’s DB. Go try to find a private sector worker these days with a DB plan. In fact, go find a private sector worker with a pension at all?


You say, “The solution isn’t to punish unions so that we all end up without pensions or job protection. How about asking the private sector to treat its workers fairly instead?”

I don’t like to get personal, but that comment shows just how naive and out of touch you actually are. It’s not about being fair. It’s about supply and demand. What is driving the current conditions in private sector pay is a little thing called ‘The Market.’ Now, I know that too many gov workers have no clue what that is because you are largely sheltered from market forces by a seemingly endless stream of tax payer dollars, but the market is the reality, not what you experience in your little government cubicle.

Supply and demand, TEMPLE. In fact, the primary purpose of unions is to limit the supply of labour in order to artificially increase its relative demand and thus drive up its price. Translation: you are paid more than you are worth.

Now, I don’t care what other people make––unless I’m paying for it. Then I want value for my money.

If you want to learn something, learn a bit more about how privileged you are to have a good paying job with excellent benefits and a pension, brought to you by your friendly, neighbourhood tax payer. And by that I mean the ones who actually pay more in tax than they take.

And by the way, whose paying for your time while you write comments on Greater Fool in the afternoon?

#147 Frank le skank on 02.05.13 at 5:01 pm

For 416 (Toronto), according to TREB, 1.3% less transactions. Year over Year sale numbers are -7.6% detached, -5.2% semi, -11.2 towns and -4.5% for the dreaded condo. Yup, looking good out there!

#148 Dr. Hoof Hearted on 02.05.13 at 5:02 pm


They say that Detroit is just a matter of “weeks or months” away from running out of cash, and when Detroit does declare bankruptcy it will be the largest municipal bankruptcy in the history of the United States. But don’t look down on Detroit, because the truth is that Detroit is really a metaphor for what is happening to America as a whole. In the United States today, our manufacturing infrastructure has been gutted, poverty is absolutely exploding and we are rapidly approaching national bankruptcy. Detroit may have gotten there first, but the rest of the country will follow soon enough.

#7 Approximately one-third of Detroit’s 140 square miles are either vacant or derelict.

#8 The city government of Detroit has closed dozens of schools and has decided to cut off public services to the “heavily blighted areas”.

#9 According to one estimate, there are 33,500 empty houses and 91,000 vacant residential lots in the city of Detroit today.

#10 The median price of a home in Detroit is just $9,000, and there are some areas of Detroit where you can still buy a house for $100.

-An astounding 53 percent of all American workers make less than $30,000 a year.

-Amazingly, there are hundreds of thousands of Americans with either Master’s degrees or Ph.D.s that are enrolled in the food stamp program at this point.

#149 Alberta Ed on 02.05.13 at 5:04 pm

Calgary realtors must be getting desperate. We just got an email from a realtor we first contacted over four years ago… and we moved to BC last summer! Must have been digging through her Rolodex…

#150 VMD on 02.05.13 at 5:06 pm

Battle of Vancouver: Jan 2013 SFH Battle Update:
– As predicted in December, Bear Forces successfully invaded Van East and Burnaby South
– Bear Forces are now stockpiling tanks in Burnaby & New West.
– The following Bull Territories are facing imminent defeat: Port Coquitlam, N Delta, N Surrey.
– Bulls’ grasp over Tri-cities & Surrey has been steadily loosening.
– However, in January Bull Forces retook West Van & Tsawwassen.
* -1% HPI YoY Change = 1 blue tank (Bear)
* +1% HPI YoY Change = 1 red tank (Bull)

#151 polecat on 02.05.13 at 5:14 pm

#70 drydock, quite the read but sums it up. Scary really. Seems you can’t trust the leadership, we are in for a bad ride. Feel bad for our children. Maybe smoking man will have a drink with me, I’m depressed as hell now…

#152 Dr. Ralph Cramdown, FRCS(C) on 02.05.13 at 5:33 pm

Sorry to disappoint those bibliophiles who yearn for financial fire and brimstone where the wicked are consumed on the alter of their own greed and stupidity. It’s not going to happen quite that way.

First they came for the HAM, but I was not HAM, so I made like a clam.

Then they came for the property virgins. That didn’t affect my urgin’s, so I stifled my misgivin’s.

Then they came for that lady at the bank. Some said she was nice; I thought her a skank. So I failed, I failed to raise a big stank.

Finally they came for the bibliophiles. Smiles on their lips, but stares thousand miles. And with nobody left to say a word for the bookies, they bundled me off, and I fear t’will be ugly.

#153 Kilby on 02.05.13 at 5:40 pm

was at the Bishop Museum where a group of no less than thirty, yes THIRTY, Canadians were sitting outside having lunch and all talking real estate and how there is no bubble whatsoever in Canada because “everyone wants to move [there].” Un-freaking-believable. Delusional
———————————————————————Thirty Canadians all talking about the lack of a bubble….. Even hard to think about making that one up, maybe you meant 2 couples….

#154 Mister Obvious on 02.05.13 at 5:41 pm

#141 BoomBoomDynamite

“Will a real estate crash strongly affect a REIT?”

Are shopping malls and major city high rise office towers the same thing as a chipboard subdivision in Surrey?

#155 jess on 02.05.13 at 5:46 pm

parallel trading

hongkong – powdered formula
norway diaper flippin’ by poles and lith.


Our complaint asserts claims under the Financial Institutions Reform, Recovery and Enforcement Act of 1989, or FIRREA. This statute was enacted in the wake of the Savings and Loan crisis in the late 1980s but has not been used very often in recent years. One of Congress’s stated purposes for FIRREA was to provide “enhanced enforcement powers and increase criminal and civil money penalties for crimes of fraud against financial institutions.” Under this law, the Department of Justice can seek civil penalties for the violation of certain underlying criminal statutes, including mail fraud, wire fraud and bank fraud, which the Department alleges as part of this lawsuit. But, unlike a criminal case that requires proof beyond a reasonable doubt, the FIRREA provisions underlying today’s lawsuit require only proof by a preponderance of the evidence. In addition, FIRREA authorizes the Department to seek civil penalties up to the amount of the loss suffered by a financial institution as a result of the violation.

S&P cites first amendment free speech

#156 Humpty Dumpty on 02.05.13 at 5:58 pm

And its very different south of here…

White House defends drone strikes against Americans on U.S. soil even without evidence of a pending attack

The U.S. government can order the killing of American citizens if they are believed to be ‘senior operational leaders’ of Al Qaeda or ‘an associated force,’ the memo states

The U.S. government can do so even if there is no clear evidence that the American targeted is engaged in an active plot to attack the U.S.
NBC reported the news after obtaining and releasing the memo

The Justice Department told MailOnline that it would not comment on the news

#157 Rand man on 02.05.13 at 6:06 pm

Inglorious investor#145

A scathing and blistering…direct hit!


#158 Rand man on 02.05.13 at 6:13 pm

Humpty Dumpty

Nice try but the majority of sheep here will just roll their eyes and think”loony”

Sadly we have been transported back to 1933 and the rise of the machine..

But due to the Moses principle,most youngsters can not and will not believe that history can both repeat/rhyme
And disguise itself in the fluffy feel good world of Facebook and honey boo boo….

A sad disgusting ending to what we call humanity but is more aptly named inhumanity…

Someone will press the reset button

Skynet has come of age

#159 Rand man on 02.05.13 at 6:16 pm

And on the subject of Facebook..and big brother…

“Those concerned about Facebook’s controversial privacy policies may have yet another reason to worry. The social network is reportedly developing a smartphone application which will track the location of its users – even when the app isn’t running.”

#160 AK on 02.05.13 at 6:17 pm

‘Severe’ Danger Looming In Corporate Bonds: BofA

#161 hangfire on 02.05.13 at 6:17 pm

Bwahahahahahahaha….this is too funny……when it comes to taking on debt…the government hates competition.

The personal debt levels are actually growing more slowly than the national and provincial debt level…..but F and Carney want individuals to stop borrowing? Why is that? Its because the government wants its cake and to eat it too. yousee….the persoanl debt levels shine a light on the national…that makes the dweebs at the IMF get mad at Canada……embassing the government into action on the diplomatic level.

So heres how it’s supposed to work according to Carney and the F ster….governemnt will love it if it can keep rrates down below zero if possible because it gets to create and borrow money from itself at ridiculously low levels…..but they don’t want the citizen to also jump into the same spending through…..oh no…..thats not good.

Id the consumer debt continues to skyrocket alongside national debt..the IMF will balk and begin to sanction Canada from particapting in the paper hanging it has been doing…..a minor uptick in rates will expose the governments spending and crater the give aways that they have been giving the special interests and the house of cards will fall… see…the government can’t afford to pay back the money it has borrowed from the citizen…..and the IMF has to account for the shortfall should Canada be forced into default…which it technically is anyway…..consumer debt is seen as the straw that may break the camels ( pigs) back.

#162 TEMPLE on 02.05.13 at 6:20 pm

#145 Inglorious Investor on 02.05.13 at 4:56 pm

Wow, so much wrong, so little time! I’ll try anyhow.

At the high end, a teacher’s compensation package is worth about $120,000. That’s in the realm of a director or vice president at a large corporation.

No it isn’t. Not even close. Why do you begrudge high teacher pay, anyhow? Don’t you want the people teaching your kids to be well compensated?

Go try to find a private sector worker these days with a DB plan. In fact, go find a private sector worker with a pension at all?

Exactly my point. You want us all to race to the bottom. Why? So big corporations can make more money? So the rich can keep more money? When did you start to think that capitalism was the ends, rather than the means?

In fact, the primary purpose of unions is to limit the supply of labour in order to artificially increase its relative demand and thus drive up its price.

Pure ignorance. Pick up a history book and learn about organized labour. Then maybe we can have a rational conversation about unions.


#163 Good authority on 02.05.13 at 6:25 pm

Classic case of a Garth saving a family.

Close family member arrives in town with great job.
Looks around and says “I can buy and pay less than rent” but “I need a co-signer”.

I tell family member the costs of renting and owning are a bit skewed but in any event Garth says RE going down so go rent.

Family member rents then loses great job as plant suddenly downsizes. As a renter, family member can go get another job anywhere.

As one who is not stuck with a sink hole as a co-signer, I can sleep at night.

Thanks Garth!!

#164 IM in C on 02.05.13 at 6:26 pm

It is different here – in Canada.

Unlike in the US, our politicans cannot allow wholesale evictions, like they had in the US. Imagine the howls of outrage from the NDP etc. The sitting gov’t that allowed that would find themselves turfed out eh nex election!
Not going to happen.
Therefore we will not get the US style meltdown. What we are going to get is stagnation of the realestate market. People stuck with homes they can’t, or rather won’t sell for present market value. virgins trapped condos facing a decade of crushing mortgage payments. Rents well below the actual value of the house.
People, there is no way on God’s green earth that any Canadian government would allow the CMHC to go out and foreclose on 100’s of thousands of homes.

#165 Ken R on 02.05.13 at 6:28 pm

A few posts ago, Garth commented that the goal was not more stuff; but freedom. Five down and thirty years doesn’t sound like freedom to me. People make their own choices, own or rent, personal choice. What has really ruined this country is the air of entitlement that consumes our society. A dream home was something we DREAMED about. The masses have been brainwashed otherwise and it’s a shame. The country is poorer for it.

#166 Rand man on 02.05.13 at 6:29 pm

A final word on the Swiss housing bubble….

“So the Swiss earned a reprieve buy excessive printing and much lower interest rates. That’s the good news. The bad news is that they’ve created a bubble. The Alpine state’s housing market is now in overdrive, and there is speculation that it could be forced to implement restrictions. “We don’t have a bubble in the way that Spain or Ireland did, with double digit price increases year after year. But we have had a boom for 15 years, and at some point things become unsustainable and you get a correction,” says Claudio Saputelli, an economist at UBS. The average price of an owner-occupied apartment in Switzerland has risen 75 per cent in the past decade, according to property consultants Wüest & Partner, fuelled by a combination of high immigration and, latterly, the rock-bottom interest rates to which the Swiss National Bank has committed itself in a bid to stem the appreciation of the franc. Mortgage volumes, meanwhile, are higher than Swiss national output.

So now we are at the intersection of the rock and the hard place. We all know how housing bubbles end. Just ask anyone in Japan or the US. The Swiss National Bank refuses to consider higher rates because that will drive the Franc higher. Under Switzerland’s new rules, the SNB can address such threats by asking the government to force lenders to build up capital buffers worth up to 2.5 per cent of their risk-weighted assets, and economists increasingly believe such a request could be in the offing. “If the market developed as quickly in the fourth quarter as it did in the third, then I would expect [the SNB] to ask the Bundesrat [federal council] to introduce the capital buffers,” says Mr. Saputelli. Other observers take a similar line. “I think a lot of people in the mortgage market are quite nervous about it – they expect to hear every week that the buffers will be introduced,” says Fredy Hasenmaile, head of real estate research at Credit Suisse.”

#167 TEMPLE on 02.05.13 at 6:29 pm

#142 zeeman1 on 02.05.13 at 4:46 pm

I have to laugh every time I hear a career government parasite, er, employe, claim that they would make more in the private sector.

If that’s true, why are you still working for government?

Sorry about your reading disability. I’ll explain it again: I have a strong social conscience and a moral imperative to work for my country.

You are probably too selfish to understand that, so let me ask you this: if civil service jobs are so darn good, why don’t you have one? How about coming to take mine? All you need is a Ph.D., a bunch of years of legal training, and the wherewithal to turn down private sector jobs that pay more in starting salary than what I top out at.

I don’t think you have the moral fibre to do that.


#168 IM in C on 02.05.13 at 6:35 pm

Not sure why posting #65 Buy ? Curious?
has been included in this blog.

#169 hangfire on 02.05.13 at 6:36 pm

Political mismagement and special interest spending has thrown Canada’s historic economic engine into the toilet with the dukey.

Does this mean that property taxes will skyrocket? Won’t they have to? Wheres the money going to come from otherwise?

In his speech today Obama proposed raising income taxes to 63%…stating he thought this was ‘fair’. What is that going to do to the Ontario economy…such as it is? Will the new Ont government follow suit in sympathy…..won’t they justify having to raise taxes to maintain ‘services’?

You greenies who hate the Alberta miracle better get in your cars and volunteer to build those pipelines for CDN crude out to Asian markets so that we can capture the full world rate for our oil …..the 25 billion per year we currently lose because of the stifling green lobby may be the only thing that saves us all from serfdom.

Will the civil service unions all kick in and give back the big gains so the rest of us aren’t thrown into debtors prison and lives of cat food? Something has to give….otherwise…forget about Quebec…..we may have to jettison Ontario.

#170 Rob in TO on 02.05.13 at 6:44 pm

#38A Nightmare on Bay Street on 02.05.13 at 12:09 am

“The girl on picture, she just sold her condo she bought 3 years ago. After she figured how much she lost, she just snapped.

Poor girl. At least, shes still hot.”

So right, she is a hottie.

Good one, after reading all this about greed, fear and the Brad Lambs of the world, I needed the laugh.

I gotta go and make my Kraft dinner now and try to forget.

Thanks Garth and Nightmare on Bay Street.

Goodnight all.

#171 Sebee on 02.05.13 at 6:46 pm

Hey, look Toronto is “HOT”!

What aren’t they telling us this tiem? More days in 2013 Jan than 2012 – which they always point out if it’s less this year than last, but never when it’s more this year that last? Are slowing sales being offset by growing inventory? Did they frankenify the numbers from last year? Does someone have archive of 2012 data to verify if the number they show now is actuall what they reported back then?

I think it was

4200 in Jan 2011
4567 in Jan 2012
4375 in Jan 2013

#172 Sebee on 02.05.13 at 6:51 pm

Hey Canadian Watchdog,

Check it out, the $1M “Sewage Plant Special” Executive Townhome is back and listed. Only $1.050M to enjoy the pleasure of smelling Toronto’s poop during hot humid Toronto summers.

Hey, Executive home owner is that’s 30 day dry aged AAA rybeye you have on your grill or your dog’s poop-n-scoop? I can’t quite tell. :-)

#173 johnnny on 02.05.13 at 6:51 pm

Off topic question.Appreciate any replies.
If you have a will made in one province ,and you move to another province.Is there a problem with that?
Thanks in advance to any answers.

#174 Asse on 02.05.13 at 6:57 pm

I don’t get the hate on for school teachers. Yes, theres bad apples but it’s harder to hide incompetence. Take a look at the sunshine list. You will see principals. Teachers, at top rate make 92k. That’s with a masters and extra certificates. I know a public school principal and many catholic teachers. It’s not a profession I would choose, and it was an option. Instead look at the list and choose accordingly. Police officers get maybe one call a day, traffic officers really are glorified ticket takers (sorry never charged and clean abstract). The one public service group I feel for are nurses; most can only get part time positions and they still need an education for a dirty thankless job. Don’t even start on transit, but I’m sure Hudak has his eye on them;)

#175 think again on 02.05.13 at 6:57 pm

When the US sneezes (2008) Canada catches the flu…

#176 Doug in London on 02.05.13 at 7:04 pm

@Daisy Mae, post #135 who said: And, of course, it was our stupid federal government that made it all so easy to forget….the realities.

Our stupid federal government did create the conditions for a housing bubble, but it DID NOT make it easy to forget realities of what happened elsewhere such as in the United States. Those who didn’t see what happened, connect the dots, and realize that something similar could happen here brought it on themselves and have themselves to blame. If you take it upon yourself to look at history, you’ll see Canada has had real estate busts before. Even an idiot like me who failed a college financial course could see the parallel between Canada’s real estate markets and elsewhere.

#177 Smoking Man on 02.05.13 at 7:41 pm

Ah yes the housing stats…..

what’s the point in rubbing salt in an fresh wound…….

Told ya…….Never ever bet against the Smoking Man….

If you dogs treat me nice, let me be an idiot on the weekends, I will tell you what year and what month the decline will start…..

#178 Canadian Watchdog on 02.05.13 at 7:42 pm

#171 Sebee

Was already reduced.

Nov-12 W2515470 27 SMITHFIELD DR $1,199,000
Dec-12 W2515470 27 SMITHFIELD DR $1,100,000
Jan-13 W2540964 27 SMITHFIELD DR $1,050,000

TREB threatening market will implode if data (the truth) is disclosed to the public. Link

Wondering why? Because when buyers see the price history that wasn’t disclosed to them by their realtor, the next thing that follows is a lawsuit.

#179 Smoking Man on 02.05.13 at 7:45 pm

#173 Asse on 02.05.13 at 6:57 pm
I don’t get the hate on for school teachers.

Cause they are not bright, they train kids to be obidiant slaves. too stupid to know that’s what they are doing. And feel entitled… If we fired them all, let stay at home moms and grannies take over……marks would go up.

#180 Devore on 02.05.13 at 8:06 pm

#86 Gotthardbahn

A parking lot across the street – now an ex-parking lot – was fenced off over the weekend and the steam shovels and pile-drivers will be moving in shortly. Doesn’t look like a ‘slowdown’ to me, pal.

Builders build, that’s what they do. The land is already bought and paid for. Very expensive land. It needs to be developed and sold asap. Doesn’t look like you know anything about construction, pal.

#181 Dr. Hoof Hearted on 02.05.13 at 8:08 pm

Girl in photo is in a presale condo line-up in Saskatchewan.

PS: Mountain is a hologram

#182 Devore on 02.05.13 at 8:14 pm

#113 Bottoms_Up

I couldn’t get a conservative mortgage back in ’07 and ’08 (even though having great job prospects, great credit and cash in the bank) because I didn’t have a good enough paying job to back that mortgage.

Should have gotten one of those non-conservative mortgages, they were handing those out left and right.

#183 InvestX on 02.05.13 at 8:15 pm

Vancouver detached price rises in January”

JAN/13 – $1,152,900
DEC/12 – $1,078,500

And it’s down 8% in 11 months. Grasping, aren’t we? — Garth

#184 Nostradamus Le Mad Vlad on 02.05.13 at 8:25 pm

#145 Inglorious Investor — “How about asking the private sector to treat its workers fairly instead?” — I never worked in or for govts. when I was in the workforce, only the private sector.

The trade I was in (typography) served me very well for three decades, and during the ’80s (the decade of greed) and the 90s, we had overtime pouring out of our ears, exc. DB and DC pension plans, all the bells and whistles.

Because of that, and because we have taken advantage of TFSAs and RRSPs, we have a modest (but sufficient) income. However, I don’t compare apples and oranges.

#147 Dr. Hoof Hearted — “. . . 53 percent of all American workers make less than $30,000 a year.” — Which means the rich are getting richer, while the middle class and poor are being systematically wiped out, due to the removal of money from the system.
. . . but not to be outdone . . .
#137 Seriously? — “The American is correct, the Canadian banking brain trust is a farce, bordering on being criminal, and Canadians on the whole are DELUSIONAL.” — Fair rejoinder.

#151 Dr. Ralph Cramdown, FRCS(C) — Your poetry / prose is close to par with Furst’s!

#157 Rand man — “Someone will press the reset button . . . Skynet has come of age” — Agreed, but who is the ‘someone’? Soros / Obama? TPTB in Brussels and London? Or will China and Russia do an ‘Israel’ on the west, blowing all their runways up so they can’t fly? The remainder of the decade will be very interesting.
Ticking Time Bomb; Best Buy ‘Net comparison shopping is much easier; Fake Economist who fooled a nation; Bad Deals Good for bus. / govt.; Yale, Penn suing their own students (debt bubble); Amazon Coins Not Garth’s bodyguards; Anonymous It’s good to see names of banxters released.
Latin America MEast, North Africa, Africa and now LAmerica; 0:54 clip Japan – China on the brink; US Prison Population Unprecedented increase; Texan Secession? Sixth graders design new flags; Flu Shot Four days later, the kid was gone; Ummm “What prescription medications was he on? Or was someone ‘cleaning house’?” (allowing that he had once served as a contract pilot for the CIA and DEA during the Iran-Contra affair), and Flashback — 2005 “They knew there was a problem with SSRIs all the way back in 2005!”; Snowy Winter? Here, it’s almost time to engage in sun bathing; New Malware Getting really convoluted; US only Interactive map of illegal immigration.

#185 jess on 02.05.13 at 8:35 pm

The government plans to introduce amendments to the foreign corruption law in the Senate on Tuesday. Other changes to the law will include closing a loophole that allows “facilitation payments” to government officials in places where this is common practice, and another loophole that limits prosecutions to companies that are operating “for profit.” cbc

#186 Oakville Owner on 02.05.13 at 8:36 pm

#173- Asse

“Police officers get maybe one call a day”

The only day I can recall only getting one call during a shift was just over a year ago when a crazed man murdered his wife by multiple stab wounds and then ran at myself and some co-workers with the knife trying to murder us as well!!!!

All of the good guys went home at the end of that tragic day and I feel we earned every $. It is still extremely sad to think of the couples children that don’t have a mother or a father because of that tragic day when I only did one call!

#187 Asse on 02.05.13 at 8:37 pm

Inglorious, why don’t you provide your cv?
By the way, there was a recent study done that stated public employees get paid about 30% more than comparable private employees, WITH the exception that professional public service employees, ie engineers and lawyer’s, that receive less. Can’t quote the source other than CFRB about 2 weeks ago. Jerry Agar rant.

#188 LongTimeReaderFirstTime Writer on 02.05.13 at 8:50 pm

Temple & Inglorious Investor/zeeman

I just had to chime in here. Good for you, Temple. It has become just so commonplace to hear completely ignorant notions about the public service.

I too have worked in government, have paid for huge pension deductions each paycheque (privately managed, and NOT guaranteed by taxpayers, by the way) and done so out of a desire to give meaningful service and live a balanced life, with time, the most precious commodity, to live with my family.

Been there, done that with 80 hour corporate workweeks, and they produce nothing of value in the end. That route to happiness is a terrible lie we tell to ourselves and inflict on our children, who grow up never being known by us.

I have worked in all sectors. The private sector appeals to me as an independent entrepreneur, and I still do some of that type of work. I have grown to hate corporations more and more, for thier inherent injustices.

The salary differentials are just too much to ever justify, and we are all spiralling to the bottom. To say this is what we need more of in this day and age is to have no sense of history or future.

To criticize the public sector and unions, public or private in such knee-jerk fashion, is testimony to just how much the conversation has been distorted and manipulated by far-right ideologies.

Woe to us all if they get what they say they want.

#189 Westcdn on 02.05.13 at 8:58 pm

I was looking at the chart. Poor Spain – hard to believe things can get worse for the people. Shows you what debt can do for you. And Japan – the people must be in shell shock to prefer their government bonds over home ownership. I guess it is their demographics where the young will likely inherit a home.

#190 Adam on 02.05.13 at 9:00 pm

The average selling price in Toronto in 2001 was cheaper that it was in 1989….but this time’s different.

#191 Pr on 02.05.13 at 9:22 pm

The number for January are not to bad, in big part because of the 50 billions “gift” to Genworth MI Canada, just before Christmas.

To you Jim Flaherty, Finance Minister, the CMHC + GENWORTH, its way to mutch now. Enough please.

And you at home, send some letters or emails, this money given, concern you, if you are Canadian. Those loan, if not paid, will be given to you, to paid the banks.

#192 Asse on 02.05.13 at 9:24 pm

Oakville owner, sorry to hear about that experience. It unfortunately seems to be happening more and more. I humbly retract my statement.

#193 JuliaS on 02.05.13 at 9:36 pm

#173 Asse

Good or bad apples – we can’t afford either kind. Teachers, fire fighters, nurses and police will be suffering job losses for the simple reason that there isn’t going to be enough revenue to sustain their services. Housing bubble, transaction taxes and upward assessments paid for the gravy train. Now it’s the end of the ride and the leeches are getting aggressive.

No one’s special and no one’s entitled do anything, especially money out of someone else’s pocket.

You said police gets one call a day… and there you have it, few comments later, straight from the horse’s mouth. One day of vital work, but whole 365 worth of arrogance and salary expectations.

When money’s mentioned, teachers hide behind kids back, firefighters threaten with response time, coastguard says people will drown if we don’t give’em what they “deserve”, and police – in the same boat. Give us the money, or poor kids are never gonna see their mommy and daddy!

How do you like them apples.

#194 Smoking Man on 02.05.13 at 9:55 pm

He has not posted yet …

Garth’s topic tonight…..House Hold Debt….See I read minds too

#195 Gunboat denier on 02.05.13 at 10:16 pm

91 Just trying TPE – thanks for the effort in writing your response. Many valid points. My experience in RE was different though as there was no market drop here in 89.
There was blip in about 1990 when rates peaked. When
they started to drop, prices took off. I didnt buy until 91.
Sold in 02 for about $21k more than we paid, built new
house and got that paid off in 7 years.

#196 Oakville Owner on 02.06.13 at 12:04 am

#191- Asse

Thank you for your understanding!

While there is always a need for greater accountability in the public sector there is also a lot of vital work that goes on each day that goes under reported.

#197 Oakville Owner on 02.06.13 at 12:34 am


Absolutely no arrogance or salary expectations here. Picked my career knowing full well that I will never get rich quick and that I would wake up each and every day excited to go to work to assist in multiple vital rolls.

-assisting people during mental health crisis

-taking drunks off the road

-assisting during domestic disputes

-apprehending bank robbers that we’re armed with machine guns

– or talking with that parent of a child that is being bullied at school

The list can go on and on. Not arrogant just happy to help out each and every day in my own small way.

Many people tell me each and everyday that they could not/would not do my job and each day I thank them as I am happy to do it.

#198 Oakvillian on 02.06.13 at 1:09 am

#199 JuliaS on 02.06.13 at 1:09 am

#196 Oakville Owner

To you my apologies. I misunderstood what you were trying to say.

#200 futureexpatriate on 02.06.13 at 7:06 am

#82 Surrey has an even bigger problem. Every tenth structure is a grow-op. Woe when pot becomes fully legalized down south. There goes BC’s number one export industry into the toilet. And wait until THOSE places get dumped on the already crashing market.

#201 Beach Girl on 02.06.13 at 7:24 am

#90 Asse, I hope your own Mom didn’t name you.

Are you this sites Dr. Phil? Someone actually married you and stayed? Yikes, now that is desperate.

On another note, I thought a camel toe referred to the front.

#202 all_we_need_is_mortgage on 02.06.13 at 1:37 pm

This is a really interesting reading:

“It would be all too easy to dismiss… American politicians (of all persuasions) as being blissfully ignorant of the economic realities. In fact, I suspect that some may be all too well aware that they are presiding over failed systems for which the only question is ‘when’, not ‘what’. Their last refuge, it seems to me, is to put off the evil day for as long as they can.”

Some sober sounding voices from Europe:

“…The trend which reached its end was the “monetary ratchet”. Over time, a cyclical process had emerged in which excessively low interest rates created bubbles, and the bursting of each bubble led to another reduction in policy rates as central bankers sought
to stave off recession. From 2008-09, this process ended because rates were now effectively zero.”

It seems we should leave any hope for interest rate increase, shouldn’t we?

#203 Ronaldo on 02.06.13 at 9:35 pm

Here is a place you can have for a mere $3,980,000.00. Built in 1945. It can be yours for only $796.000 down and 25 year mortgage at $17,623/month. Taxes $5848.

Who on gods green earth, if they could afford to buy this, why would they? The insanity of it all.

#204 walltiger on 02.07.13 at 9:55 pm

-assisting people during mental health crisis

-taking drunks off the road

-assisting during domestic disputes

-apprehending bank robbers that we’re armed with machine guns

how often do you actually do that?
by asssiting you mean escalating, and then tasering.