How to rock

rock

So a bank-generated survey finds almost 60% of property virgins have now shelved plans to buy a house. Why? They can’t afford one. And a fifth of those buyers have gone back to mom’s basement because they no longer qualify to even get a mortgage – not after the 30-year loan was F’d.

It’s been nine months now since long mortgages were nipped back, and the impact is just starting to be felt. This week even CREA admitted sales are falling nationally and, as you know, every major market in the country is now in year/year declines. Vancouver’s a disaster and Victoria’s worse. In Toronto sales of properties over a million are on life support, since CMHC insurance is no longer available. The condo market, as I mentioned yesterday, is seeing supply bury demand, and the course of prices is set.

The mortgage industry figures 190,000 jobs will be directly lost because of Ottawa’s desperate attempt to deflate the bubble they said did not exist. Even housing analysts who a year ago dismissed me (this is astonishingly easy) are sanguine no longer. “I think economists have just totally misread what the numbers are saying to them,” career real estate bull Will Dunning tells the leading mortgage industry journal. “Ottawa is getting more than they bargained for.”

What does that mean? Well, Dunning says the 30-year snuff had “a huge impact on the number who can qualify, and there is far worse to come than just botched sales numbers. “Slower sales will translate into slower housing starts with the impact felt in the second half of this year. The reduction in housing starts will be much larger than anyone is expecting.”

While Will’s no buddy of mine, he’s totally correct. Housing starts are already 13% lower than a year ago. Building permits – a leading indicator of construction jobs – are off 7%. The Canadian economy as a whole shed 54,000 workers in a month, while the US gained. Our stock exchange has lost 3% of its value do far in 2013, while the Dow in New York has gained 12.3%.

And a day ago the IMF downgraded its forecast for the Canadian economy, saying we’ll be lucky to see a 1.5% gain in the next year, which means F’s plans to bust the deficit are probably dead in the water. Even blog dog (Sir) Mark Carney, soon to depart the Bank of Canada, has dialed back expectations. He now agrees with the IMF.

That all means four years of absurdly low loan rates, responsible for pushing house prices to nosebleed levels while jacking household and mortgage debt to unheard-of levels, has brought us to this point. Most people own houses they can’t afford. If jobs start to disappear in more serious numbers and the economy crawls, real estate’s soft landing could still end up in a smoky crater ringed with fire trucks.

None of this is helped much by crappy commodity prices, of course, or a Canadian dollar which has lost 10% of its value in a few months. The central bank says the current decline in housing is “welcome and intended,” but guys like Dunning say the feds have no idea what’s coming. The IMF is urging Carney to leave interest rates at crazy-low levels until things improve, but what if we’ve already reached saturation? Too much debt, too many whacked home owners, too high prices, too few buyers?

Meanwhile another 500,000 wrinkly Boomers turn 60 this year, 80% of them with most of their net worth in houses and seventy per cent without pensions. Who’s going to ride to their rescue, now that our big house lust is fading?

Some of this was so predictable. Some of it surprises. As I said days ago, the migration of money out of real assets like houses and gold, into financial assets which generate income cannot be ignored. What happened to bullion could tank real estate. Go find somebody who owns stock in Barrick. Ask them how they feel.

If you want to get out, do it now. It’s a real bad idea not to list your house because you think prices will be higher in a year. If you’re a buyer, wait. This journey back to affordability has just begun. If you rent and have liquid assets, and love, you rock.

207 comments ↓

#1 James Bond on 04.17.13 at 9:01 pm

Fuurst?

#2 Ivandrago on 04.17.13 at 9:01 pm

First! Just kidding…. Seriously though…. Anyone buying a house now is committing financial suicide.

#3 Randy Cross on 04.17.13 at 9:03 pm

Financial assets OK but Crushing Taxes are coming !!!

#4 EXILED on 04.17.13 at 9:06 pm

Mr Turner: you are a greater teacher!

#5 TurnerNation on 04.17.13 at 9:07 pm

Those Bulls better be hoping for a double bottom here.

#6 Big Sexy on 04.17.13 at 9:08 pm

First! Also, thanks for the conference call recording!

#7 blase on 04.17.13 at 9:08 pm

Garth, you don’t say what the 190,000 is that the mortgage industry expects to be lost. Is it hairs from Flaherty’s head?

#8 Nemo on 04.17.13 at 9:10 pm

Nice Picture!

#9 Marc in Montréal on 04.17.13 at 9:10 pm

Meanwhile since Jan. 1st in France…

You now have to own an income property for 10 years for 10% of the profits made not to be touched by the fisc. It used to be 50 % after 10 years just months ago.

By the way the Economist says Canada’s real estate is overvalued by 34%, France’s by 35%.

http://www.tdgimmobilier.ch/vendre-sa-maison-en-france-sera-bientot-moins-interessant.html

#10 HB on 04.17.13 at 9:10 pm

First.

Started reading your blog recently Garth. Of course I heard of you when the Tories booted you out, the media makes you out to be insane, but after awhile I don’t think you are really that bad.

I’m one of these property virgins living with the parents, after thinking through, it’s insane to try to buy now. Simply can’t afford it.

#11 RayofLight on 04.17.13 at 9:11 pm

It use to be that the sight of a beautiful woman would stir me to my bones. Now, it is the finding of a beautiful stock, with a great growth chart, has an under valued price, is in an expanding market, and has a growing dividend, that make me sigh.

I am so ashamed. — Garth

#12 JSS on 04.17.13 at 9:15 pm

Garth –
Based on optics, the TSX still looks worse than the housing market.

Some may say, “Hey, do I invest in XIU or do I go buy an income property?”

Do I invest in an undervalued asset or an inflated one? Tough choice, indeed. — Garth

#13 ChickenLittle on 04.17.13 at 9:15 pm

Well, 2 out of 3 ain’t bad…I have to get me some liquid assets now! Not the liquid assets Smoking Man uses, though.

#14 blase on 04.17.13 at 9:17 pm

Step 1: Mortgage terms lowered to 25 years
Step 2: Tightened lending requirements
Step 3: Sick the tax man on speckers
Step 4: Unemployment
Step 5: Interest Rates rise
Step 6: Boomer exodus
Step 7: Change the name of condos to caskets

#15 Saskatoon Housing Bubble on 04.17.13 at 9:20 pm

Garth,
for those interested, I have compiled a list of mortgage rules over the years. Here are some of the notables ones.

Down payments
*1960 to 1983, 5% is the minimum down payment needed
*1983 to 1992, 10% is the minimum down payment needed
*1992 to 1999, 5% is the minimum down payment for first time buyers, still 10% for repeat buyers
*1999 to 2004, 5% is the minimum down payment for everybody
*2004 to 2005, down payment can be borrowed, essentially 0 down but 95% insured.
*2006 to 2008, 0% down payment is allowed
*2008 to present day, 5% down is minimum down payment required.

Amortizations
*1960 to 2005, 25 years is the maximum length for most loans, ( some programs allowed longer amortizations)
*2006 to 2008, 40 years is the max
*2009 to 2010, 35 years is the max
*2011, 30 years is the max
*2012 to present day, 25 years is the max

Gross Debt Service Ratios
*1946 to 1956, GDS is set at 23% of income
*1957 to 1971,GDS ratio is set to 27%
*1972 to 1980, the GDS ratio is set to 30%. Also, the GDS ratio started to use all of the spouses income. Before, 1972, half of spouses income was used.
*1981 to 2006, GDS ratio is set to 32%
*2007, some lenders scrap GDS ratio altogether, bumping their acceptable TDS ( Total Debt Service) ratios up to 44%
*2008 to 2011, CMHC applies more stringent maximums for riskier borrowers (35% GDS and 42% for credit scores below 680) No GDS requirements for low risk borrowers, TDS at set 45%
*2012, new caps on GDS (39%) and TDS (44%) Riskier borrowers (35% GDS and 42% for credit scores below 680 stays the same)

Price Ceilings On Maximum Amount That Mortgages Will Be Insured By CMHC
*1979 to 1982, price ceiling removed
*1983 to 2003, price ceiling put back into place and dollar amounts varied according to regions. In the 90’s, the price ceiling ranged from $150,000 to $250,000 depending on the area.
*2003, the price ceiling was removed
*2012, the price ceiling put back in place but was capped at $1 million.

Mortgage rules are basically back to 2005 levels, except that today, GDS ratios are at 39% while in 2005, the GDS ratio was at 32%.

If people are being shut out of the housing market when the five year fixed rate mortgage is less than 3% (in 2005, it was over 5%), the problem is not because mortgage rules are too tight. The problem is the market itself.

#16 From Mississauga with Love on 04.17.13 at 9:20 pm

Questions to all: in Ontario, specifically in Mississauga, if a buyer submits an offer in writing (and in there puts a clause that we request the seller to initial and sign the offer even if rejected), then is the seller obligated to reject it in writing?

No. It’s an offer, not an obligation. The seller can totally ignore you. — Garth

————————————————————-
Garth, apparently you’re wrong on this one. My agent called RECO and they told him that the Seller or his agent must sign back the offer indicating rejection. They cannot simply ignore it. This is to ensure that the Seller was presented with all offers and that the agent did not hide one from them.

and on the topic of calling the Seller, how exactly does one get their phone number when at best you have their name.. ummm, no, they’re not on the white pages.

(a) There is no legal obligation, (b) so go visit. — Garth

————————————————————–

You’d think i would have thought of visiting, now wouldn’t you (I have actually done that with another property in the past). But the home is vacant and the owner has already moved.

To clarify to the other individual that responded to me: RECO did not say (I checked with my agent) that the seller has to respond to the offer, but the agent MUST respond and must confirm that he showed the offer to the seller. Otherwise you can file a complaint, an investigation would be launched, and if found that agent did not present the offer to the seller, they’d be fined.

#17 shane on 04.17.13 at 9:21 pm

garth, do you think london ontario realestate will head down further?

#18 shane on 04.17.13 at 9:22 pm

garth, where would be some good places in ontario or alberta to buy commercial properties?

#19 canadian on 04.17.13 at 9:22 pm

Garth, if IMF is predicting 1.5% growth and inflation is 1.5% ,does that mean growth is actually zero?

#20 Driesdtl on 04.17.13 at 9:24 pm

Statistically backed up analysis…

http://www.macrobusiness.com.au/2013/04/canadian-house-prices-bounce-back/

Does that pass for research in Australia? — Garth

#21 FTP - First Time Poster on 04.17.13 at 9:24 pm

Garth,

I think it is now appropriate to title you the “Mr. Miyagi” of Finance. Anyone under 35 wont understand. Thanks again for your service.

#22 Big Sexy on 04.17.13 at 9:25 pm

Hey, where did the recording link go?

The Academy wanted it. — Garth

#23 TurnerNation on 04.17.13 at 9:26 pm

Don’t look now but it just dropped another
$50. ‘It’.

#24 Notta Sheeple on 04.17.13 at 9:28 pm

“……..The mortgage industry figures 190,000 jobs will be directly lost because of Ottawa’s desperate attempt to deflate the bubble they said did not exist………”
====================

In other news, 380,000 jobs return to Canada as housing affordability returns to normal levels, and Canadian citizens no longer require above-market wages to pay for overpriced half-million dollars bungalows.

#25 Dr. Hoof - Hearted on 04.17.13 at 9:29 pm

No Dr. Wayne -Curr yet…

I have a Sherman Tank…he is still trying to load a cap gun.

#26 Mister Obvious on 04.17.13 at 9:31 pm

Vancouver: Home sales are indeed over a cliff. A disturbing number of street-front commercial units are papered over. Shopping malls look sleepy. Only the very trendiest restaurants are somewhat busy while the majority are comatose.

And yet…

The condo building boom roars on. New ground continues to be broken, sales offices are covered with balloons and local rags are filled with full page ads for 600 square foot boxes in towers that will not be online for two years or more.

I feel privileged to be alive to witness a spectacle that will find its way into future textbooks. (Or whatever they will have by then.)

#27 Chopper on 04.17.13 at 9:31 pm

Great article Garth and you are right on as usual. I especially like the last paragraph, great advice for everyone who wants to come out of this on the positive side.

Just got the monthly news letter by mail from my ex-realturd, I don’t know why she keeps sending me them as I wil not use her when I am ready to buy a house again. As usual her take is that now is a good time to buy as prices are moving up and not much to choose from so hurry before they are all gone.

I hate it when people insult my intelligence, I want to have nothing to do with her.

I must admit before I found this blog I was house horney and almost bought, looking back at what I was looking to buy and where, it would have been a disaster for me and my family.

Thanks Garth for the great work you do here.

#28 Crashing yuppy on 04.17.13 at 9:31 pm

Garth

You write smart funny and thoughtful pieces every night and then let this gift you give free of charge be denigrated by absolute brain dead morons saying first.

That is like street bums peeing on the sisteen chapel ceiling or someone taking a dump in the open sunroof of a Rolls Royce

Please have some pride in your work and ban these losers!

#29 Brad on 04.17.13 at 9:33 pm

“Meanwhile another 500,000 wrinkly Boomers turn 60 this year, 80% of them with most of their net worth in houses and seventy per cent without pensions. Who’s going to ride to their rescue, now that our big house lust is fading?”

What is a government to do with this dilemma? I know lets create a #$%^&* housing bubble so the old farts can cash out leaving the kids holding the bag.

#30 Sask Girl on 04.17.13 at 9:35 pm

Garth! I’m getting sad about the situation in Regina. I’m a working professional with a good salary, in the green with a down payment saved up, and I rent for $1,000/mn. I really want to have a house one day, but I don’t want to pay these outrageous prices in Regina of all places (don’t get me wrong; I love living here). But prices seem to go up and up and up. What are my chances in the future? I think things are nuts here! Will prices drop? How low will prices go? People say the Sask economy is too good for housing to go down. I fail to see it. It’s so frustrating.

#31 Randy Cross on 04.17.13 at 9:35 pm

Can I get a list of the wrinkly boomers with no pensions who need to sell their homes in the near future ? I saved too much money….and need to upgrade my residence…

#32 Nuke on 04.17.13 at 9:36 pm

Good post. Affordability is not cash flow. A Ferrari is an affordable car if you can stretch payments out long enough. Normal interest rates, minimum 25% down, 25 year amortization, mortgage monthly costs of 25%-30% of income and house 3 times salary. If you are outside these limits you can’t afford the house. Don’t buy until you can.

#33 T-Bone on 04.17.13 at 9:36 pm

Shine on you crazy diamond!

#34 Mississauga on 04.17.13 at 9:38 pm

Came across this condo in Vancouver.

http://www.realtor.ca/propertyDetails.aspx?propertyId=11057932&PidKey=-1899348519

What $29 million buys in the earthquake belt.

#35 visorman30 on 04.17.13 at 9:40 pm

I was wondering your opinion on the effect of 30-year mortgages for those that are in a good position to buy (meets your Rule of 90 and has a good price). Hopefully, you can follow my reasoning.

What I’d like to know is if you’re in good financial shape and given the prevailing borrowing cost wouldn’t it be best decision to take out a 30-year mortgage?

Even with the axing of the 30-year mortgage, if a person is in good position to buy, the 25-year mortgage shouldn’t really dissuade them out of the market.

So doesn’t that leave only those that aren’t even in a good position to buy? If those are the people that are being shut out of the market, how can they also drive price increases?

Something about this just doesn’t jive with me. Am I out to lunch here?

#36 CrowdedElevatorfartz on 04.17.13 at 9:40 pm

Uh oh, Global tv 6pm news in Vancouver is having a story on the condo meltdown in Whistler………
Hotel condos down 60%?
Smoldering crater doesnt even begin to describe what is happening.
But, the realtors are saying ” Its a GREAT time to buy!”

#37 Saskatoon-Living on 04.17.13 at 9:45 pm

Great conference call Garth! Thought maybe a “306” area code would have been blocked.

#38 Old Man on 04.17.13 at 9:45 pm

#18 shane – do an mls search for Dresden, Ontario for a small office building.

#39 Rob Ford on 04.17.13 at 9:49 pm

Garth, for those that missed your recent conference call, where can we access the recording? Thanks

It was posted all day. — Garth

#40 David W on 04.17.13 at 9:49 pm

Two questions, both unrelated:

1) are resources stocks a good buying opportunity now that they’ve tanked?

2) seems like the world economy is out of steam dispite the billions in stimulus injected by countries. Will we see another recession soon an countries are broke and have nothing left to stimulate growth?

#41 Sherwood Park on 04.17.13 at 9:49 pm

Are you still 100% sure F won’t return the 30 year mortgages?

#42 Spiltbongwater on 04.17.13 at 9:52 pm

Vancouver’s a disaster?

Micheal Levy this morning was saying March prices were up 2.6% y/y. CKNW audio vault 7:35 am

#43 espressobob on 04.17.13 at 9:54 pm

If anyone needs a good laugh?

http://watch.bnn.ca/#clip906861

#44 toughguy on 04.17.13 at 9:56 pm

DELETED. Take it to a gold blog. — Garth

#45 Paolo on 04.17.13 at 9:56 pm

It’s finally coming unglued. After years I am blue in the face and gave up trying to reason with people.

The train wreck is finally here…

“Ponzi Economy” coming apart.

Canada, the new Ireland!

#46 jan on 04.17.13 at 9:59 pm

That’s what I/m worried as well that the fed will bring back long ammorts to prop up that real e whore and save it from dying

#47 Behavioral Finance on 04.17.13 at 10:03 pm

If you live in a tent you are a superstar.

#48 Joe on 04.17.13 at 10:03 pm

DELETED. Take it to a gold blog. — Garth

#49 Behavioral Finance on 04.17.13 at 10:07 pm

Going back to gold. Its has been perceived as a safe heaven asset, due to massive printing by central banks around the world. Just look at feds balance sheet. Its about 4 trillion. Lets not forget that Dow was able to tank 1000 points in few minutes. Nobody can stop the markets when you have a massive sell order generated through derivatives.

This blog will not sustain a debate on the merits of gold, since less than 1% of people own it. On the other hand 70% own real estate. There are enough gold blogs. Take it there. — Garth

#50 Bottoms_Up on 04.17.13 at 10:19 pm

#103 Ret on 04.17.13 at 9:43 am
————————————–
If you have good reason to believe your landlord isn’t claiming the rental income, you can report them to the CRA and the CRA will investigate.

#51 Mick on 04.17.13 at 10:19 pm

93% true, except the part about the US being in good shape. Garth predicted the US would come out of its recession strong. Well, if institutional investors buying up residential real estate to rent them back to their former owners constitutes a rebound, then I guess the US is in one. Don’t tell that to the foreclosed on new renters though.

Myth. US new home starts (announced yesterday) are back at 2008 levels: 1,000,000 units. The American real estate rebound is real. — Garth

#52 Bob Copeland on 04.17.13 at 10:25 pm

I want you to know, I hate it that your right.

I forgive you. — Garth

#53 Post Haste on 04.17.13 at 10:26 pm

I just pray that my neighbour who works in construction gets sh$t canned – I will be dancing in the street when he moves his sorry a$$ as he can no longer afford his mortgage – for everyone one else in construction – you have better have saved a few bills or you’re so screwed. I remember the late 80’s when construction came to a complete halt .. reason # 1 why you don’t send you’re kids into a trade.

500,000 turning the golden age this year – just imagine how OHIP is gonna be running massive deficits. In 20 years the entire health system will be a pay as you go – pretty scary! You’ll be flying to China for a low cost heart surgery procedure.

#54 Timbo on 04.17.13 at 10:30 pm

http://www.cnbc.com/id/100649649

Copper Falls Below Key Level; Warning Signs Flash

Damn ! Can’t make money stripping abandoned mansions…..whats a guy to do??…..

http://www.washingtonpost.com/business/authorities-fertilizer-plant-explodes-near-waco-texas-causing-numerous-injuries/2013/04/17/f4d7c7f4-a7cc-11e2-9e1c-bb0fb0c2edd9_story.html

http://www.bob-owens.com/2013/04/shock-the-system-electrical-grid-comms-attacked-near-san-jose/comment-page-1/

wtf is going on? sh*t is getting weird. Time to dig a bunker hide the little ones…..

#55 Shawn on 04.17.13 at 10:34 pm

Number 19 Canadian asked:

Garth, if IMF is predicting 1.5% growth and inflation is 1.5% ,does that mean growth is actually zero?

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

If I may… GDP growth is always stated in real terms before inflation. So in your example the growth in dollar terms in GDP projected by the IMF is 1.5% real plus 1.5% inflation for 3.0% total nominal GDP.

#56 not 1st on 04.17.13 at 10:37 pm

Garth, your assessment of the TSV vs DOW is downright comical.

Let me fill you in, Canada is letting market forces determine its way – true capitalism and thus the TSX has faltered.

The U.S is printing like a madman creating artificial stimulus that will eventually find its way to an equity bubble.

I’ll take the TSX any day of the week.

As an investor, I like making money. Being overweight in Canadian equities is a recipe for lower returns. Enjoy. — Garth

#57 Brian Ripley on 04.17.13 at 10:38 pm

Note to #5 TurnerNation above http://www.greaterfool.ca/2013/04/17/how-to-rock/#comment-237010

re: “Those Bulls better be hoping for a double bottom here.”

I just mashed up a chart from Tim Knight on IYR (iShares Dow Jones U.S. Real Estate Index Fund), Tim has observed that it has hit a “double top” which capped the 2007 mad peak in U.S. housing quickly resulting in the plunge into the March 2009 Pit of Gloom.

Chart here: http://www.chpc.biz/2/post/2013/04/us-housing-recovery-update.html

The cash markets could be telling us that a double top is going to favour the bears. If so, then it is possible that the U.S. so called housing recovery is over and that means more import slowing from Canada.

Cheers, BR

#58 Inglorious Investor on 04.17.13 at 10:42 pm

#19 canadian on 04.17.13 at 9:22 pm

“Garth, if IMF is predicting 1.5% growth and inflation is 1.5% ,does that mean growth is actually zero?”

As defined by real GDP, yes.

As I’ve said many times, inflating the money supply (The Beard’s favorite pass-time) does not grow the economy. Actual growth requires an increase in wealth, not currency. Increasing the currency supply faster than actual wealth only transfers wealth from some to others.

Wrong. GDP numbers are net of inflation. — Garth

#59 vancouverite on 04.17.13 at 10:45 pm

‘Canada’s smallest-ever condominiums’ start at 297 square feet in Whalley
Tiny units start at $109,000, building containing 56 of them to be completed in summer of 2014

http://www.theprovince.com/homes/Surrey+micro+suites+intended+those+dream+owning+home/8256935/story.html

#60 Inglorious Investor on 04.17.13 at 10:45 pm

“Wrong. GDP numbers are net of inflation. — Garth”

REAL GDP vs nominal GDP. Tsk. Tsk.

GDP is always in real terms. — Garth

#61 not 1st on 04.17.13 at 10:57 pm

Once oil drops and the loonie gives way, the TSX will be right back on par with the DOW just in time for Canada to ride this super economic renaissance in the U.S.

#62 Inglorious Investor on 04.17.13 at 10:58 pm

“GDP is always in real terms. — Garth”

Then why do economists have metrics like Real GDP, Nominal GDP, GDP Deflator…?

#63 Tom Vu on 04.17.13 at 11:00 pm

Luv blog photo

Am much pleased that Smoking Old Man (finally)got a date…Lavalife,… Losers.com, …BS.ca……. or otherwise.

PS: Only problem is…can’t tell..which one is they ? strapon?… or strapless?

#64 Inglorious Investor on 04.17.13 at 11:07 pm

#3 Randy Cross on 04.17.13 at 9:03 pm

“Financial assets OK but Crushing Taxes are coming !!!”

Governments are and will be “confiscating” everything they can. Higher taxes. More taxes. Capital controls. Bank “bail ins” using “certain liabilities.” Forced purchases of government bonds. Pension fund raids…

I would say get ready, but there’s really no place to hide. This may be why so many people in the US are finding it no longer pays to actually work anymore. Like the voice in the Porky Pig cartoon about Wacky Land said, “It CAN happen here!”

But it won’t. — Garth

#65 OnlyTheBankersLaugh on 04.17.13 at 11:13 pm

http://business.financialpost.com/2013/04/17/a-tide-of-squatters/

Olay ….. Toronto & Vancouver squatters rule circa 2017

#66 Inglorious Investor on 04.17.13 at 11:16 pm

“But it won’t. — Garth”

I hope you’re right.

#67 KG on 04.17.13 at 11:16 pm

It was posted all day. — Garth

Any chance of reposting ?

#68 Piccaso on 04.17.13 at 11:24 pm

Sorry flippers, the gigs up. When first time buyers can’t afford 3.5 % interest rates… it must be the price?

#69 Inglorious Investor on 04.17.13 at 11:26 pm

Some financial blogs (e.g. Zero Hedge) publish chart graphics where two indices (e.g. S&P and NASDAQ) are super-imposed to show that a past chart pattern of one index looks like a current chart pattern of another. The point is to show that if the current index follows the same pattern as the past one, then some event, such as a crash might occur in the current index. For example: http://www.zerohedge.com/news/2013-04-16/party-its-1999

While I think Zero Hedge offers some excellent analysis, I think this kind of chart overlay is just silly nonsense.

Human beings are pattern-seeking animals. We like to (or need to) find patterns in nature––and in charts. But because we do so instinctively, we tend to “see” patterns that don’t even exist. Price charts are a good example.

This is one reason that technical analysis is flawed. Another reason is that one can only confirm a specific pattern AFTER it’s occurred, making the information imparted by the pattern useless as a forecasting tool. Yet another reason is that if you see the pattern, so does everyone else. Which means that the market will react accordingly and negate the potential value of your pattern seeking.

#70 Geeks on 04.17.13 at 11:39 pm

This F’s RE deflation ideology looks more like Michael Gorbatchev’s Perostroika and Glasnost to me.

After researching the macroeconomic data about Canada at the World Bank, the CIA.org and multiple blogs I have come to the conclusion that what we see today is just the beginning of a CRASH, not a Soft Landing.

BTW Michael Gorbatchev is still alive but the USSR is dead.

#71 Devore on 04.17.13 at 11:41 pm

#35 visorman30

You are correct. When lending rules change, only marginal buyers are added or removed from the market. If amortization reduction from 30 to 25 years (equivalent to less than 1% interest rate increase) bumps you from the market, you should not have been buying in the first place. Save up some money, improve your income, and try again later.

#72 Devore on 04.17.13 at 11:46 pm

#35 visorman30

So doesn’t that leave only those that aren’t even in a good position to buy? If those are the people that are being shut out of the market, how can they also drive price increases?

Supply & demand. When you let in a bunch of new buyers (demand) into the market all at once, say by dropping downpayments to 0% and amortizations to 40 years, they overwhelm the available supply, and drive up prices. Second, some mortgage rules (and interest rates of course) make housing “more affordable”, which simply means prices are bid up until affordability limits imposed by the new rules are reached again (this is generally why subsidies don’t work for very long, but appear to work great at first).

#73 Tom Vu on 04.17.13 at 11:49 pm

Also:

Photo inspires this wise logistic/statistical moment

Q: ” How come Toronto Maple Leafs have never had “Too-Many- MEN- on- the Ice ” penalty” after 500 years.

A: PS: ……..Never mind

#74 Devore on 04.18.13 at 12:14 am

#45 Paolo

It’s finally coming unglued. After years I am blue in the face and gave up trying to reason with people.

Can’t argue with people’s core beliefs. Save your breath.

#75 Sgip on 04.18.13 at 12:18 am

Harper will never have a picture like that…

….

“What a traitor this ex-Goldman Sachs executive Carney man is!

He waits until Harpo is over in England, at the Thatcher funeral, and then delivers this “bad news” — he should have waited until Harpo returned so the media could have at him over this!

Poor Flaherty fell out of his chair, upon reading this, as he will no longer be able to keep his LIE of balancing the budget by 2015 now or even putting a dent in the Nation’s $650 Billion debt!

Now, Carney slinks off to the Bank of England to do a policy launch, in coordination with the U.S. Federal Reserve, that will put the economy’s of Britain and the U.S. at the brink of collapse.

I hope the British taxpayer enjoys paying Carney his $400,000 per year “housing allowance” to maintain his apartment in London’s “Square Mile” district — I wonder if he got a housing allowance for living in Ottawa!”
Share it Permalink

O
O

#76 AltRock on 04.18.13 at 12:29 am

I am in my 40s and my wife in her 30s.

I owed and sold. I rent, I hold financial assets, I love, I live and I love alternative rock!

The best day of my life was having no mortgage and renting a little farm. The next was renting a little Tudor castle and the next a water front!

Renting is fun and flexible! Owing is rewarding … sometimes.

Most people are dumb and you sure cannot cure that …

#77 Gunboat Denier on 04.18.13 at 12:32 am

117 Tony – last blog – thanks, I found this to verify

http://www.taxtips.ca/personaltax/investing/taxtreatment/capitalorincome.htm

I gather if you declare your trades as income you can write the loss off against any other income. I guess this is why CRA may actually prefer the cap gains declaration.

#78 Uh Oh Canada on 04.18.13 at 12:35 am

Love the last line. Renting as a strategy is wise as the bubble pops. Remember: Contrarians are the winners in the end. Renters are going contrary to the popular course.

#79 VancouverJoe on 04.18.13 at 12:52 am

#34 Mississauga: “What $29 million buys in the earthquake belt”

The top-level dwellers usually know little about mechanics during earthquake – the tower’s top sways several meters away, literally throwing everything out of the windows, all furniture as well as people.
It would be better to have smaller windows for $29 ml.

#80 KinKalgary on 04.18.13 at 1:02 am

New home building permits in the US are down, apartment building permits are up..tells me fewer buyers more renters – where’s the housing recovery?

#81 I Believe in God smoking man so what's your problem? on 04.18.13 at 1:07 am

Eh smoking man, just because you don’t believe in God doesn’t give you the right to think that those that do are any less than you are for you clearly stated that you are Not a believer so go your own way and believe what you think is right for you…. K….. but don’t belittle me or others who believe in God for by you speaking that way in your printed words does as [email protected] suggested but she didn’t really did not accuse you as being a fool for she sat on the fence…

But for me smoking man you are the biggest regular fool on this site by treating others who have a different opinion (Belief) than you as lesser members of society… grow up man…. and Shame on you smoking man….and an apology is in order!

Sorry Garth, but God knows, he deserves this….

#82 Jeff on 04.18.13 at 1:08 am

Still think rates are going up soon, Garth? Nope, the bubble is bursting despite low rates, not because of them, as I predicted. And Carney’s successor won’t throw fuel on that fire.

#83 Skip Breakfast on 04.18.13 at 1:15 am

I rent and am liquid. Bailed out of Toronto real estate in 2011.

But I’m still what you call a doomer. Just a different kind of doomer than Garth heckles so often.

I reject gold as readily as I reject real estate. I see deflation, but unlike Garth I don’t think it’s going to be a mild variety. I don’t think the system can take ANY deflation, and so even a slight deflation will break the back of the world economy.

Good luck folks. Stay wary, liquid and nimble.

#84 Julie on 04.18.13 at 1:28 am

#59 vancouverite on 04.17.13 at 10:45 pm
‘Canada’s smallest-ever condominiums’ start at 297 square feet in Whalley
Tiny units start at $109,000, building containing 56 of them to be completed in summer of 2014
============================

That’s comical. Our 2br 2bath plus den 1050 ft in chilliwack was 145k. 8 yr old bldg. sold our house thx to Garth a year ago……starting to believe him about the USA. Our sales there are pretty good.

#85 collettenewwest on 04.18.13 at 1:35 am

#42 Spitzbongwater – Levy is Jurocks buddy.

#86 Patiently Waiting on 04.18.13 at 1:40 am

Sales of single family homes (combined Vancouver & Fraser Valley Real Estate Boards) for the last 30 day period are down 58% from 2012, down 66% from 2011, down 64% from 2010, and even down 54% from 2009 following the financial crisis …

2013 886
2012 2114
2011 2651
2010 2440
2009 1934

———————————————————–

Sales in former HAM heaven White Rock are even worse … down 53% from 2012, down a wopping 80% from 2011, down 65% from 2010, and even down 48% from 2009 …

2013 53
2012 113
2011 270
2010 152
2009 102

————————————————————–

pw

#87 Musty on 04.18.13 at 1:50 am

31 Randy Cross on 04.17.13 at 9:35 pm Wrote
“Can I get a list of the wrinkly boomers with no pensions who need to sell their homes in the near future ? I saved too much money….and need to upgrade my residence…”

..Come to Nanaimo and go door to door. If my street is any indicator, one out of every three houses of my immediate neighbors is in this boat. Retired, minor income without pension, 60’s, too stubborn to move now but will have no choice in a few years.

#88 Humpty Dumpty on 04.18.13 at 2:19 am

Gonna Rock around Japan tonight….

Japan’s decision to pump more money into its economy by expanding its bond buying earlier this month was like a stone thrown in a pond–sending ripples across the global economy and financial system.

Except in this case, it was more of a boulder. And the ripples have rocked the boat for Canada, along with everybody else. The Canadian dollar and Canada’s 30-year bond rose as the yen sank after the news

Ted Carmichael, a managing director of OMERS–the Ontario Municipal Employees Retirement System and previously chief Canadian economist at JP Morgan JPM -3.51% in Canada, thinks Canada’s central bank should go even further, and actually cut its policy rate by 25 basis points to 0.75%.

“In my opinion, the best thing we can do for the Canadian economy right now is to cut rates,” he said, recommending a 25-basis-point cut Wednesday, and another of the same size at the next policy announcement on May 29.

http://blogs.wsj.com/canadarealtime/2013/04/16/japans-wave-of-monetary-easing-washes-up-on-canadian-shore/?KEYWORDS=japan

Wonder if Da boys are gonna rock the house with
Stevie Ray Vaughan &Jeff Beck singing “Goin’ Down”….

http://www.youtube.com/watch?v=UE_33OAUUq4

#89 T.O. Bubble Boy on 04.18.13 at 2:27 am

Interesting renter piece in the G&M — “A former homeowner, now a renter: one year later and still loving it”:
http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/home-buying/a-former-homeowner-now-a-renter-one-year-later-and-still-loving-it/article11360326/

Q: Do you feel richer now, given that you only have to pay rent?
>> No question. The financial stress we lived under is gone.

Garth is slowly but surely roping in the MSM!

#90 Poppabass on 04.18.13 at 2:36 am

I also vote for the repost, if it is possible.

#91 Buy? Curious? on 04.18.13 at 3:23 am

Old people, they crack me up.

Here’s a clip of old people being forced to work and there’s a cameo of a great maritime singer that passed away, Rita MacNeil.

http://www.youtube.com/watch?v=3N877Nps_Nk

“It’s a working man, I am and I’ve been there, underground…”

#92 Julie on 04.18.13 at 4:12 am

http://www.cbc.ca/doczone/episode/the-secret-world-of-gold.html

Dam CBC. Someone needs to stop those tin foil people. Maybe the govt can help with the CBC problem. Oh wait…..

#93 Buy? Curious? on 04.18.13 at 4:25 am

Rita MacNeil? Stomping Tom Collins? Now Canada’s real estate numbers are coming out, all trending down? All happening in the same year? I knew the Canadian Culture scene was dead and losing two Canadian Icons just proves how little pride, confidence and talent we have (No disrespect but you’re the closest thing we got as a Superhero), but Real Estate now looks it’s got one foot in the grave and another on a banana peel!

Look at this clip of my main man, Garth, doing it up on This Show Is 17 Minutes Too Long, er, I mean, This Hour Has 22 Minutes.

THAT! Is REAL Gold!

http://www.youtube.com/watch?v=4884Gs_phJ4

#94 Ballingsford on 04.18.13 at 5:06 am

Love today’s picture and your last sentence says it all. It’s given me a warm and fuzzy feeling to begin my day!

#95 Alliston Anti-Guru on 04.18.13 at 5:18 am

Living in a bunker and not owning gold just doesn’t fit the lifestyle:-)

#96 SFH price heat map updated -Is the market cooling off? on 04.18.13 at 6:44 am

This is the map for what has been sold since Jan 01 2013
Read my notes at the top of the article

http://recharts.blogspot.ca/2013/04/is-toronto-sfh-market-cooling-off-here.html

#97 maxx on 04.18.13 at 7:19 am

“I think economists have just totally misread what the numbers are saying to them,” career real estate bull Will Dunning tells the leading mortgage industry journal. “Ottawa is getting more than they bargained for.”

Nope.
Ottawa is getting exactly what it bargained for: the goal was to help stem unbridled stupidity from spending itself into oblivion and damaging the economy at large for decades to come. More needs to be done. The economy is what is important, first and foremost- NOT the RE and mortgage industry.
RE is now completely over sized and needs serious pruning, followed by a measured regime of interest rate rises.
That is the first step in restoring consumer confidence.

#98 sue on 04.18.13 at 7:32 am

#81 Ibelieveingodsmokinmanetc

I’ve always thought that Atheists are really following their own religion. They strongly believe something that they are not able to prove and look down on others for believing something different. Their religion is no different than others. (the manmade dark side of religion that is) #hippocrites The common thread of all religions is spirituality and that’s where it’s at baby.

#99 T.O. SFH sale price heap map update on 04.18.13 at 7:49 am

Is the market cooling off? Read my comments at the top of the post

http://recharts.blogspot.ca/2013/04/is-toronto-sfh-market-cooling-off-here.html

#100 jess on 04.18.13 at 7:52 am

myth: “tax havens promote greater tax efficiency through competition,” Where is the evidence ?

Bankrupt Cayman Islands to get £38m bail-out By Rowena Mason 10:11PM BST 30 Sep 2009
faced bankruptcy and was unable to pay its government employees. Cyprus had to be rescued by the troika.

U.S. Permanent Subcommittee on Investigations, “Dividend tax abuse: How offshore
entities dodge taxes on U.S. stock dividends” (September 2008), pp.2-12; In April 2011,

‘The Telegraph’ reported that UK banks hold 181 subsidiaries in the Cayman Islands. See
http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/9205647/Barclayshas-
more-Cayman-Islands-links-than-RBS-and-Lloyds.html; 30.8.12.

17 U.S. Permanent Subcommittee on Investigations, “Dividend tax abuse: How offshore
entities dodge taxes on U.S. stock dividends” (September 2008), pp.2-12.

http://en.wikipedia.org/wiki/Offshore_financial_centre#cite_note-3

#101 Not 1st on 04.18.13 at 7:52 am

Being debt free is a worthy goal but its not always a simple choice. For example I have debt for my business. I could sell the business and clear the debt with a decent profit too boot. But then what am I going to do all day? Sitting around watching your bank account is boring. So I keep building the business and accept the debt as a necessary thing.

#102 jess on 04.18.13 at 8:06 am

facta

China rumoured to join FATCA
In a bid to help countries agree to implement FATCA, the US has acknowledged that many have issues with their own domestic law such as privacy and data protection.

The court heard how Wegelin had helped around them hide £750 million from US tax inspectors for 10 years. It was the first foreign bank in the US to plead guilty to the charge of helping people evade taxes.

Landmark FATCA Case
A managing partner at the bank admitted that its policy of sheltering US citizens between 2002 and 2010 was ‘wrong’.

http://www.iexpats.com/fatca-countries-tax-network/

#103 Victor V on 04.18.13 at 8:09 am

http://ca.finance.yahoo.com/news/u-gold-futures-down-1-percent-etf-holdings-004200645–finance.html

Gold slipped as much as 2.7 percent on Thursday as losses in other markets, prospects for easing inflation, and worries about central bank sales drove investors to sell bullion to raise cash, undermining the metal’s status as a safe-haven investment.

#104 jess on 04.18.13 at 8:15 am

if the gov. is 2/3 buyer of services how is austerity going to bring growth…is this suck and blow?

“Harper is insisting now that he can erase the deficit by 2014 simply by cutting $4 billion a year in wasteful and inefficient spending. But in 1995, he said it would be impossible to eliminate the deficit without slashing social programs, which he noted account for two-thirds of federal spending.

http://www.thestar.com/news/canada/2011/04/25/s
tephen_harpers_most_controversial_quotes_compiled_by_tories.html

#105 fancy_pants on 04.18.13 at 8:32 am

Ottawa and the little F: nothing heroic about your valiant attempts at avoiding a wreck when you peckerettes created the hazard in the first place. After years of giving the RE market laxatives, you run around looking for a plug. no $hit.

#106 Gotthardbahn on 04.18.13 at 8:42 am

Hey Garth –

You say:

‘And a day ago the IMF downgraded its forecast for the Canadian economy, saying we’ll be lucky to see a 1.5% gain in the next year, which means F’s plans to bust the deficit are probably dead in the water. Even blog dog (Sir) Mark Carney, soon to depart the Bank of Canada, has dialed back expectations. He now agrees with the IMF.’

The BoC says (yesterday):

‘With continued slack in the Canadian economy, the muted outlook for inflation, and the constructive evolution of imbalances in the household sector, the considerable monetary policy stimulus currently in place will likely remain appropriate for a period of time, after which some modest withdrawal will likely be required, consistent with achieving the 2 per cent inflation target.’

Huh? If the economy is tanking and core inflation is running at 1.4% (according to the BoC), well below the bank’s target, then why is Mr. Carney still talking about
RAISING rates? That’s what ‘modest withdrawal’ means. Please explain.

Growth will return. Rates will rise. He is reminding you so you don’t borrow your brains out. — Garth

#107 Jeff In Moose Jaw on 04.18.13 at 8:59 am

Well done #15 Saskatoon Housing Bubble.

#108 Huuk on 04.18.13 at 9:15 am

I thought the longest amortization in Canada is 30 years for non-CMHC insured mortgages and 25 for backed ones.
Is this correct?

#109 MC on 04.18.13 at 9:18 am

Garth,

Is there a way to effectively short the Canadian housing market? We all know there will be a decline but how to we profit from it?

MC

#110 amazona girl on 04.18.13 at 9:19 am

Nice picture garth Love rocks !!!

#111 Ralph Cramdown on 04.18.13 at 9:21 am

I was just reading the Bank of Canada’s Monetary Policy Report, April 2013, released yesterday.

Page 4 is blank except for a single quotation:

“The adjustment in the housing sector is intended and welcome.”
—Mark Carney
Governor, Bank of Canada
25 February 2013
London, Ontario

#112 Rational Optimist on 04.18.13 at 9:42 am

61 not 1st

You nailed it.

#113 Not 1st on 04.18.13 at 9:55 am

Garth maybe you could address oil someday cause from the looks of things it’s headed to sub 50 dollar range and may not be back for a generation. There have been so many large finds lately especially in the US, couple that with better fuel standards and finally some real incentives for renewables now and I don’t see how oil gets up off its back for a long time.

#114 Bottoms_Up on 04.18.13 at 9:57 am

High government debt does not slow growth, top IMF economists debunked:

http://www.theglobeandmail.com/report-on-business/international-business/us-business/sharp-eyed-student-takes-on-famed-economists-over-basic-errors—and-wins/article11366264/

#115 Bottoms_Up on 04.18.13 at 10:03 am

#98 sue on 04.18.13 at 7:32 am
—————————————-
Wow, your comment is ripe with prejuidice.

“Atheists….look down on others for believing something different.”

You cannot paint a group of people with the same brush! (other than calling them Atheists)

The basic tenant of Atheism is that belief should follow proof. It has nothing to do with what others believe.

It is interesting to note, however, that of the multitude of religions in the world, each one is considered ‘correct’ by their followers.

#116 Stoopid Idiot on 04.18.13 at 10:08 am

After the deadline for this GEAB number last Saturday evening, our team has closely watched the unusual coincidence of all the market indicators’ collapsing: European, American and Asian stock exchanges, raw materials… and even and especially gold.

http://www.leap2020.eu/GEAB-N-74-is-available-Global-systemic-crisis-The-war-has-been-declared-between-the-economic-political-world-and_a13900.html

#117 TS on 04.18.13 at 10:10 am

“As I said days ago, the migration of money out of real assets like houses and gold, into financial assets which generate income cannot be ignored.”

From real to non real, that is not very bad.

From speculations and inflated to income-generating, based on real businesses. That’s good. — Garth

#118 NoOneOfConsequence on 04.18.13 at 10:16 am

Hey! There is an alternative!

Want to own some choice real estate in the greater Vancouver area?

http://www.theprovince.com/homes/Surrey+micro+suites+intended+those+dream+owning+home/8256935/story.html

Don’t downsize your mortgage…downsize your condo instead!

#119 Dr. Hoof - Hearted on 04.18.13 at 10:17 am

#59 vancouverite on 04.17.13 at 10:45 pm
‘Canada’s smallest-ever condominiums’ start at 297 square feet in Whalley

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

For many Surrey residents, its their one and only condo …also called jail cell.

#120 Timbo on 04.18.13 at 10:24 am

http://www.businessinsider.com/philadelphia-fed-manufacturing-april-2013-4

The headline index unexpectedly fell to 1.3 from last month’s 2.0 reading. The consensus estimate predicted a rise to 3.

unexpectedly again….how about forecasting rationally?.

http://www.cnbc.com/id/100651692

” But change is in the air.

The cost of manufacturing in China is going up and rising quickly.

“It’s something that we anticipated when we went to China, we just didn’t know how quick it would happen,” said Mark Miller, CEO of Prince Industries. ”

Is it time to move on and watch their economy implode….

#121 Julia on 04.18.13 at 10:38 am

Interesting article about attitudes of seniors re selling up. I would guess it’s similar here.

Media release below from the website: http://www.aihw.gov.au/media-release-detail/?id=60129543094

Older Australians, especially home owners, want to age at home
Over 90% of older Australians intend to stay in their current accommodation rather than move to aged care or move at all, and this intent is strongest among older people who own their own homes, according to a report released today by the Australian Institute of Health and Welfare (AIHW).

Interesting, but perhaps not relevant to Boomers, who will not be ‘aged’ for a while, and are conisderably more indebted/less secure than existing senior seniors. — Garth

#122 sciencemonkey on 04.18.13 at 10:50 am

Am I crazy for thinking condos are worth no more than $100/ sq foot, and monthly maintenance fees shouldn’t be more than a quarter/ sq foot?

#123 Canadian Watchdog on 04.18.13 at 10:52 am

April mid-month TO homes sold cvs data is posted here.

#124 sue on 04.18.13 at 10:57 am

#115 Bottomsup
That’s my whole point. Atheists BELIEVE strongly in something without any PROOF. Agnostics don’t believe anything because they are not sure..need proof. Every single person I’ve come across who follows this Atheism “religion” thinks that people who believe in God (higher power, the soul etc) are just silly little imbeciles looking for comfort. If you can find me an Atheist who truly respects others beliefs, I’ll eat my shorts.

#125 Canuck Abroad on 04.18.13 at 10:58 am

36 CrowdedElevatorfartz – I think I found the clip you were referring to:

http://globalnews.ca/video/490640/whistler-condo-prices-plummet

This just actually makes me angry. Has Global TV no shame at all? They’re shilling for Whistler real estate now that everyone has called their BS on Vancouver? Even Cam Muir says you won’t make any money there (short term) so you know it has to stink. I have owned a couple of places in Whistler over the last 20+ years (sold the latest several years ago). Prices on condos there are down at least 33% from the peak, easy, and have been falling for more than five years.

Calling the bottom now, when Vancouver owners are going to have to start dumping their Whistler properties en mass to cope with the loss of their housing-ATM facilities in the city, is optimistic at best. Furthermore, these properties do not generate enough rental income to ever be a good “investment”. These homes are vanity purchases only. You rent them out to cover some but not all of your running costs and make your money, if any, on the appreciation when you sell.

The management companies demand an outrageous 30% of the gross to “manage” your rentals but you still get to fix everything that breaks, replace stolen items, and live with other people’s wear and tear when you go out to stay in your own unit.

Owning in Whistler was fun and I have many happy memories of nearly every Christmas spent there when the kids were young. But for heaven sakes Global TV, don’t tell people these places are a good investment, priced at the bottom, or all the rest of the real estate BS you regularly peddle!!

/Rant over

#126 Toronto_CA on 04.18.13 at 11:01 am

http://www.thestar.com/business/real_estate/2013/04/17/canadas_housing_market_drawing_the_bigmoney_crowd.html

The Pigg’s daily RE trough feeding. Hot money from corrupt places around the world are snapping up $5mil properties in North Toronto!

So our market will never correct!

God this woman is vile.

#127 Ronaldo on 04.18.13 at 11:06 am

#122 Science Monkey –

”Am I crazy for thinking condos are worth no more than $100/ sq foot, and monthly maintenance fees shouldn’t be more than a quarter/ sq foot?”

Depends on what you figure ”air space” is worth. What do you really own with a condo except all the problems associated with them as the developers collect their monstrous profits and leave you holding the bag for their poor construction.

#128 Grantmi on 04.18.13 at 11:11 am

Interesting, but perhaps not relevant to Boomers, who will not be ‘aged’ for a while, and are conisderably more indebted/less secure than existing senior seniors. — Garth

I agree with this statement! Those born BEFORE the 2nd WW are the current Senior, seniors. This is a totally different demographic then the Baby Boomers AFTER the 2nd WW.

My folks are the Pre-Boomers. Both alive … 77 and 80 age. .. and that’s the attitude THEY have. .. feet first. BUT! Their home is completely paid off and have a large retirement package with balanced investments to live on.

They have no need to tap into THEIR home to be able to pay for every day issues.

Two different groups in my mind.

Rock on Garth!

#129 Beach Girl on 04.18.13 at 11:22 am

I am keeping my rental properties for a few more years, 10 max. All these people have to live somewhere. I like the company, and rented in my youth. Problem with renting, you have no control over a mental landlord, you don’t know their financial predicament. I prefer security and renting is just waiting for a shoe to drop. Renting sucks.

#130 Richard in Kelowna on 04.18.13 at 11:39 am

What’s up with gold? Still seems to have a bit of life left in it. Only a matter of time I guess…

#131 Marty Mcfly on 04.18.13 at 11:44 am

#123 Canadian Watchdog

Great links keep them coming
Is there a web page for that info?

#132 Whitekat on 04.18.13 at 11:45 am

@Jess,

Are you confusing FATCA(think fatcat without the ‘T’) which has 7 million US expats and dual citizens up in arms with FACTA.

Here are a couple articles about FATCA you might find interesting:

http://www.theglobeandmail.com/commentary/irs-wants-canada-to-nab-us-tax-cheats-why-we-should-care/article6994760/

http://www2.canada.com/vancouversun/news/archives/story.html?id=71cc9019-69f0-4556-8ab7-f257e8ec2ccf&p=1

#133 elchavo on 04.18.13 at 11:46 am

#30 Sask girl

hey! im a professional too (in the green), renting for 1100 (very happy renter), huge RE bear and I like living in regina too. How about we go to Atlantis for a coffee and discuss real estate. Talk about our financially ignorant coworkers, laugh at the silly realtor listing descriptions and their exclamation point abuse. Comment on the brutal workmanship of harbour landing condos, share horror stories told by house poor “homeowner” friends… It’s not different here, why would it be? All the arguments you hear defending the regina RE market are the same old recycled pro bubble arguments used in orlando, las vegas, vancouver, toronto, scottsdale, etc. And you’re already a step ahead from the crowd, cause at least you question the situation. I know plenty who have got 5/30 mortgages of 250K+, with salaries no higher than 55K and don’t have a single clue on what’s going on with the country’s and/or province’s economy. Now that sucks.

So, coffe?

#134 Humpty Dumpty on 04.18.13 at 11:46 am

JIM RICKARDS: Here’s How To Trade In A World Of Currency Wars And Potential Collapse

The presentation discusses Federal Reserve monetary policy and the future of the international monetary system.

Rickards lays out four options for the future – a world with multiple reserve currencies, a system based on IMF Special Drawing Rights, a new gold standard, or total collapse.

He also gives some trade ideas to play the uncertainty surrounding the future of the system.

http://www.businessinsider.com/james-rickards-presentation-2013-4?op=1#ixzz2QpXcpDHh

#135 blinded on 04.18.13 at 11:51 am

DELETED

#136 blinded on 04.18.13 at 11:51 am

DELETED

#137 thiscountriesgoing down the toilet on 04.18.13 at 12:04 pm

4 years of artificailly low rates?….try 13.

“That all means four years of absurdly low loan rates, responsible for pushing house prices to nosebleed levels while jacking household and mortgage debt to unheard-of levels, has brought us to this point. ”

The absurdly low rates were brought in by Greenspan in 2001 to juice revenue for the tech bust and the ‘mission accomplished war…part I”

The governments worldwide got hold of the crack and couldn’t put the pipe down…..all the civil servants have gained mightily…..buy so has inflation.

Lets look back at what prices were in 2000 and shoot for a reversion to the mean……too bad we can’t roll back the civil service costs and the uptick on consumables. The only way the government is going to deal with the new overhead is by raising taxes….ala Manitoba…BC and Ontario.

I was standing beside a guy at a grocery store a few days ago who started bursting about how he couldn’t afford anything on the shelf……I’ve been pointing this out for years.

#138 Craig on 04.18.13 at 12:05 pm

I know Garth hates gold but I look at it like any other investment. It fluctuates like any other stock / ETF, etc. If there’s money to be made on it, then who cares.

Right now things are outta whack. Stock market is to high, real estate is to high, interest rates are to low so perhaps cash is king till things settle down.

Something has to give but since the US Gov’t controls the interest rates and any boost in those rates would kill the US and their debt payments…..so do they artificially keep them down forever?

All the experts, a year and a half ago said rates would have doubled by mid 2013….and go nuts in 2014.

So who do you believe in this tangled financial web?

I don’t hate gold or any other asset. But there is no reason to hold a non-performing, volatile, speculative security. — Garth

#139 Squatter on 04.18.13 at 12:09 pm

#125 Canuck Abroad:
The management companies demand an outrageous 30% of the gross to “manage” your rentals but you still get to fix everything that breaks, replace stolen items, and live with other people’s wear and tear when you go out to stay in your own unit.
***************************************
Just curious:
in this kind of investment, are the condo revenues and expenses pooled, or do you get exactly the revenues and expenses related to your specific condo?
I mean the rent, stolen TV replacement, etc.

#140 Spiltbongwater on 04.18.13 at 12:14 pm

When I was talking to my dad last year when I was about to buy a townhouse, we were discussing renting vs owning. I mentioned about what Garth Turner has to say about buying vs renting. My dad asked Garth who?

Is he a monk? — Garth

#141 AK on 04.18.13 at 12:15 pm

#130 Richard in Kelowna on 04.18.13 at 11:39 am
What’s up with gold? Still seems to have a bit of life left in it. Only a matter of time I guess…
——————————————————————–

I have been hearing about $5,000.00 Gold since 1980. Here is another one.

Another 5,000 Dollar Gold Prediction

#142 sciencemonkey on 04.18.13 at 12:15 pm

@124 sue

Please, don’t drag atheists down to the level of religious believers by saying atheists also believe in something. An atheist simply says that the burden of proof is on the believer of the nonsensical fairy tale.

http://en.wikipedia.org/wiki/Russell%27s_teapot

Anyway, as an atheist it’s impossible for me to have any intellectual respect for your religious belief. I do deeply respect your freedom to live your life the way you like, although I expect this in return, which includes freedom from proselytizers with pamphlets.

—-

@127 Ronaldo

I see those dangers too, which is why condos are not worth today’s prices.

#143 Bill Gable on 04.18.13 at 12:26 pm

Mr. Turner – here in Vancouver,you referred to HAM (*Hot Asian Money) – well, check this: Toronto?

“Sotheby’s International Realty is seeing a surge in demand from wealthy Syrians, Egyptians and Europeans looking for a safe and relatively stable place to park their millions — Canada’s softening real estate market.
There has been an uptick in “very significant transactions” in tony areas like Oakville and North Toronto by Europeans, many with young families who originally had planned to settle in the U.S. but fell in love with Canada instead, says Sotheby’s Canada CEO Ross McCredie.”

Link: http://tinyurl.com/d95zuzz

#144 Canuck Abroad on 04.18.13 at 12:31 pm

139 squatter – If you are renting out your own condo, which I did, you get exactly the revenues and costs for your unit. you choose the dates you want to use it yourself and when you want to rent it out, etc. Nothing pooled.

Can’t comment on how it works if you buy a unit in a hotel complex.

#145 Canuck Abroad on 04.18.13 at 12:38 pm

And Squatter, I never had anything big stolen like a tv. The management company would pursue the guest if that happened. It’s more little things that get pilfered because guests thinks they can get away with it. Especially anything small but nice. Probably the same folks who help themselves to ashtrays, nice hangers etc from hotels… It all adds up though doesn’t it? And it’s annoying having to keep your own nice stuff in a storage locker to use when you’re out there, because you have to leave crap in your rental.

#146 Daisy Mae on 04.18.13 at 12:41 pm

CBC: “Canada’s smallest condos go up for pre-sales this weekend in Surrey, aimed at buyers with modest incomes.

The 300-square-foot units start at $109,000.”

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

Pre-sales, natch. And “cheaper than rent…”

Why would you lease a hotel room? — Garth

#147 Godth on 04.18.13 at 12:44 pm

Growth will return. Rates will rise. He is reminding you so you don’t borrow your brains out. — Garth

A day late and a dollar short methinks regarding borrowing.

Following this growth mantra…at 1.5% growth, the population or economy or whatever doubles in 46.7 yrs., at 3% doubling is 23.3 yrs. Simple arithmetic.

How’s it possible to sustain this?

meanwhile
http://www.globalresearch.ca/surreal-us-troops-stage-in-jordan-to-defend-and-protect-al-qaeda-in-syria/5331900

#148 Canuck Abroad on 04.18.13 at 12:47 pm

Squatter, example: one summer I put a very nice (expensive) coffeemaker in the unit. Go out at Christmas and there is a $15 Sunbeam special on the countertop. Where did my coffeemaker go? Who knows. A guest? A cleaner? The management? No theft reported because there was still a coffeemaker sitting there. You get the idea…

#149 -=jwk=- on 04.18.13 at 12:56 pm

sue, what are you blathering on about?
#115 Bottomsup
That’s my whole point. Atheists BELIEVE strongly in something without any PROOF.
—————-
It is up to the person making the proposition to prove their point. It is not up to the atheists to disprove religion, rather is up to the religion to prove it is real.

This is true for all science and research. It would be imposeible for the atheists to ‘disprove’ every possible religiuos theory. For example, earth as the center of the universe was supported by lots of evidence at the time and accepted due to that evidence. Only the meddling of the church prevented the real truth from getting out earlier. As a general note, killing scientists isn’t the way to help you cause!

So until you get some real proof of whatever your beliefs are, please be quiet.

A tie in with real estate, finances or the global economy would also be heplful to stay on topic.

#150 World Traveller on 04.18.13 at 12:58 pm

#148 Canuck Abroad on 04.18.13 at 12:47 pm

Trying to sell our rental condo, don’t want to play landlord anymore, I don’t keep the Nespresso machine there, that’s for sure!

Did not hire a prop mgmnt company.

#151 Squatter on 04.18.13 at 1:07 pm

#148 Canuck Abroad:
Just too bad for your nice coffeemaker…
Just a guess, maybe a guest dropped the coffeemaker and broke the glass part. He then went shopping and bought the cheap one to replace it.

#152 HD on 04.18.13 at 1:08 pm

#142 sciencemonkey on 04.18.13 at 12:15 pm

Amen Brutha!

Best,

HD

#153 Bottoms_Up on 04.18.13 at 1:08 pm

#121 Julia on 04.18.13 at 10:38 am
——————————————
That is interesting, the anecdotal evidence from my experiences suggests the foggies will stay in their homes. Two recent retirees are planning on staying put. My great grandmother stayed put. My grandmother is staying put. My mother in-law is staying put. All my retired neighbours are staying put.

But Garth does have a point, there are those that need the money in their homes, and those are the ones his warnings are most directed at.

#154 Bottoms_Up on 04.18.13 at 1:10 pm

#109 MC on 04.18.13 at 9:18 am
———————————–
If this were a teenage party you’d be washing out the punch bowl. That question has been asked here repeatedly over the past couple years. I would think at this point you’d stand to lose money by “getting in early” on this bet.

#155 jess on 04.18.13 at 1:20 pm

whitkat
Theoretical arguments used to support tax “competition” between countries were first made in a 1956 paper by the economist Charles Tiebout.
http://www.jstor.org/discover/10.2307/1826343?uid=3739448&uid=2&uid=3737720&uid=4&sid=21102163667797

“tax competitive?
http://www.guardian.co.uk/commentisfree/2013/apr/18/tax-competition-mythbuster

#156 Dave on 04.18.13 at 1:22 pm

A month or 2 ago you had predicted rates were going to double. I told you that you were crazy and you made fun of me…

Mortgage rates from 3% in 2013 to 6% in 2018? Absoutely. — Garth

#157 jess on 04.18.13 at 1:25 pm

job poaching through tax subsidies
http://www.neweconomics.org/mythbusters

#158 Smoking Man on 04.18.13 at 1:37 pm

#81 I Believe in God smoking man so what’s your problem? on 04.18.13 at 1:07 am

Who says I don’t believe in God…. I See him every time I look on the mirror….

Now when it comes to a decomposing corpse coming to life after 3 days.
Or
A man parts the seas.
Or what ever other fairy tails are in the bible old and new, Koran or even scientology…

I Don’t swallow Kool aid. I sell it…..

#159 Mike on 04.18.13 at 1:37 pm

http://www.theglobeandmail.com/report-on-business/economy/carney-warns-of-quicker-rate-hike-if-household-debt-not-tempered/article11370408/
Bank of Canada Governor Mark Carney warned on Thursday that interest rates could rise sooner if the growth in household debt, which is related to the housing market, was not tempered.
………….. For more, see link above (swithc to Incognito mode if you dont’ have a subscription :))

#160 Craig on 04.18.13 at 1:45 pm

I don’t hate gold or any other asset. But there is no reason to hold a non-performing, volatile, speculative security. — Garth

Like Apple ?

lol

$700 to under $400 in 6 months

Just razzin’ you about gold…our banks are starting to look fair again. I’m watchin’ BNS

I seem to remember writing a post on Apple, the new RCA. — Garth

#161 Seller on 04.18.13 at 1:48 pm

Hi All

in current market, is it good idea to do reno and sell or sell as is

#162 Bargains everywhere on 04.18.13 at 2:02 pm

#124 sue on 04.18.13 at 10:57 am

Sue, who cares? Take it to another forum. This one is about investing and real estate.

#163 jess on 04.18.13 at 2:18 pm

citizens up in arms with FACTA? which ones -undeclared accts. sham corps.through panama etc etc…..

http://www.justice.gov/usao/nys/pressreleases/April13/PaltzerandBuckIndictmentPR.php

Manhattan U.S. Attorney Charges 34 Members And Associates Of Two Russian-American Organized Crime Enterprises With Operating International Sportsbooks That Laundered More Than $100 Million
FOR IMMEDIATE RELEASETuesday, April 16, 2013 Twelve Defendants Charged with Racketeering, Others Charged with Crimes Including Money Laundering, Extortion, Fraud, and Operating Illegal Poker Rooms in New York City
One of the Enterprises Allegedly Laundered Tens of Millions of Dollars from Russia and the Ukraine through Cyprus Shell Companies and Bank Accounts into the United States
http://www.justice.gov/usao/nys/pressreleases/April13/TokhtakhounovetalArrestsPR.php

FBI Assistant Director-in-Charge George Venizelos said: “Today’s charges demonstrate the scope and reach of Russian organized crime. One of the principal defendants is a notorious Russian ‘thief-in-law’ allegedly directing an international conspiracy through Cyprus to the U.S. The defendants are alleged to have handled untold millions in illegal wagers placed by millionaires and billionaires, laundered millions, and in some cases are themselves multimillionaires. Crime pays only until you are arrested and prosecuted.”

#164 Luke on 04.18.13 at 2:31 pm

@ #93 Buy? Curious?

“Rita MacNeil? Stomping Tom Collins?”

One Canadian icon indefinitely on ice; and another apparently on the rocks. Make mine a double please.

#165 Humpt Dumpty on 04.18.13 at 2:31 pm

Some Rock, but these guys are going to Roll….

“The Rollover Moment”

The U.S. Consumer Financial Protection Bureau is weighing whether it should take on a role in helping Americans manage the $19.4 trillion they have put into retirement savings, a move that would be the agency’s first foray into consumer investments.

“That’s one of the things we’ve been exploring and are interested in in terms of whether and what authority we have,” bureau director Richard Cordray said in an interview.

The bureau’s core concern is that many Americans, notably those from the retiring Baby Boom generation, may fall prey to financial scams, according to three people briefed on the CFPB’s deliberations who asked not to be named because the matter is still under discussion.

http://www.bloomberg.com/news/2013-01-18/retirement-savings-accounts-draw-u-s-consumer-bureau-attention.html

#166 thiscountryis going down the toilet on 04.18.13 at 2:35 pm

You said,

“Mortgage rates from 3% in 2013 to 6% in 2018? Absoutely. — Garth”

Simply ain’t going to happen….that would bust the BOC and federal budgets…..they have borrowed ( between the feds, provinces and minor governments by way of bind issuances) over a trillion dollars from themselves at ultra low ’emergency rates’ and could never pay back the interest owing to taxpayers if rates doubled.

This is not unique to Canada…..the US is in the same pickle.

What you’ll see is a doubling of taxation ( as is already in progress) and the status quo on civic spending.

BTW…did you see the CTV reporting a $900,000 scam perpetrated on condo owners by a ‘property manager’…who has since fled to Pakistan….who would hire a bozo like that in the first place? And why are they reporting it now……..this happened last year……what have the RCMP done in the meantime…..the owners are just getting their ‘special assessments’……why no fraud insurance on the so called property managers E&O insurance?….something stinks…….but we all know how difficult it is to prosecute ethnic cases.

http://www.thestar.com/news/crime/2012/09/03/fraud_forces_condo_owners_to_pay_thousands.html

Fixed-term mortgage rates are set in the bond market. The government has nothing to say about it. — Garth

#167 StudentDormDiarrhea on 04.18.13 at 2:37 pm

“Quebec realtors dispute figures showing more condos on sale in Montreal than Toronto” Read more: http://www.montrealgazette.com/homes/Quebec+realtors+dispute+figures+showing+more+condos+sale+Montreal+than+Toronto/8257416/story.html#ixzz2QqEmIPGG

http://www.montrealgazette.com/business/Quebec+realtors+dispute+figures+showing+more+condos+sale/8257416/story.html

#168 Tom Vu on 04.18.13 at 2:40 pm

#158 Smoking Man on 04.18.13 at 1:37 pm

#81 I Believe in God smoking man so what’s your problem? on 04.18.13 at 1:07 am

Who says I don’t believe in God…. I See him every time I look on the mirror….

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

Happy Birthday Rosemary’s Baby !

#169 Mike in Surrey on 04.18.13 at 2:43 pm

#156 Mortgage rates from 3% in 2013 to 6% in 2018? Absolutely. — Garth
Does not matter as 500,000 Mortgage balance is 411,504 after 5 years of payments at $2,366 per month. Just reset to 25 years amortization again, payment is only $2,633 per month or 2.5% of $10,680 household income per month today. There are ways to pay Mortgages when a Family can.

#170 Craig on 04.18.13 at 2:46 pm

Fixed-term mortgage rates are set in the bond market. The government has nothing to say about it. — Garth

Garth, what do you think will be the catalyst for interest rates to rise?

And how did you arrive at only a rise from 3% to 6% in 5 years?

Thanks

Of course rates will rise as the economy resumes growth. No brainer. — Garth

#171 WhiteKat on 04.18.13 at 2:47 pm

@Jess,

I give up.

#172 Old Man on 04.18.13 at 2:58 pm

My parents bought their first home for $8,500 in 1951 and my dad took out a mortgage at 5.46%, so what are you all crying about? My grandmother stepped in with cash to pay it off, as her daughter deserved better. The grandparents took a mortgage for 0% payable, and my dad paid them back in 3 years – nice deal!

#173 Dr. Hoof - Hearted on 04.18.13 at 3:01 pm

#125 Canuck Abroad on 04.18.13 at 10:58 am

36 CrowdedElevatorfartz – I think I found the clip you were referring to:

http://globalnews.ca/video/490640/whistler-condo-prices-plummet

This just actually makes me angry. Has Global TV no shame at all? They’re shilling for Whistler real estate now that everyone has called their BS on Vancouver? Even Cam Muir says you won’t make any money there (short term) so you know it has to stink. I have owned a couple of places in Whistler over the last 20+ years (sold the latest several years ago). Prices on condos there are down at least 33% from the peak, easy, and have been falling for more than five years.

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

I can forsee Whistler and other resort areas suffering major haircuts…and near ghost town status as time goes on. It will be a frill few can afford to indulge in .

#174 broadway skytrain on 04.18.13 at 3:01 pm

#168 Mike in Surrey on 04.18.13 at 2:43 pm

Does not matter as 500,000 Mortgage balance is 411,504 after 5 years of payments at $2,366 per month. Just reset to 25 years amortization again, payment is only $2,633 per month or 2.5% of $10,680 household income per month today. There are ways to pay Mortgages when a Family can.
——————————————-
yes there are, plus in the first 5 yrs after we got a mtge income nearly doubled as we were starting off in careers

#175 Craig on 04.18.13 at 3:07 pm

And people thought throwing $$Trillions at NASA every year was a waste of money….gezzzz.

Can we short NASA?

Three newly found planets are some of the best candidates so far for habitable worlds outside our solar system, according to NASA scientists.

NASA’s Kepler satellite, which is keeping an eye on more than 150,000 stars in hopes of identifying Earth-like planets, found the trio.

“Earth is looking less and less like a special place and more like there’s Earth-like things everywhere,” said Kepler scientist Tom Barclay.

Two of the planets, described in the journal Science, are 1,200 light-years away; the other is 2,700 light-years away.

A light-year, the distance that light travels in a vacuum in one year, is nearly 6 trillion miles

#176 Devore on 04.18.13 at 3:11 pm

#117 TS

From real to non real, that is not very bad.

Yes, all those companies that give people jobs, put products in the stores, and generally build and operate everything around you, including your precious “real” assets, they’re just fiction, right? The income a REIT collects and passes on to their unitholders is just as real as the rental income from your mouldy basement suite.

#177 Dean Mason on 04.18.13 at 3:46 pm

To #156 Dave

Government long term bond yields in Canada and U.S. declined by about 0.30% and 0.38% respectively since about 4 or 5 weeks ago at their peak in 2013. The U.S. 30 treasury bond was 3.25 vs.2.87% and Canada was 2.64% and now is 2.34%. The low on Canada long term bonds was 2.19% in July 2012 and U.S. 30 year bonds were about 2.32%.

It seems to be a seasonality of bond yields falling in spring and summer.i noticed this the last 2 years.

#178 Old Man on 04.18.13 at 4:03 pm

Here is how this may play out called a dark drama; Act 1 was borrowing debt to buy the dream home with cheap money that you could not afford. Act 2 will come with a correction in Real Estate putting so many under water and you will blame each other with hatred. Act 3 is when the final curtain comes down with a mortgage renewal with higher rates, and it is all over.

#179 Dr. Hoof - Hearted on 04.18.13 at 4:05 pm

SNC-Lavalin agrees to 10-year ban from World Bank projects

http://www.cbc.ca/news/canada/montreal/story/2013/04/17/business-snc-lavalin.html

Montreal-based engineering firm SNC-Lavalin Inc. has settled a complaint from the World Bank that will see the company forbidden from bidding on any projects funded by the international monetary body for at least 10 years.

While the specific terms of the settlement are confidential, SNC-Lavalin said in a release Wednesday it has agreed to be suspended from bidding on any construction projects that are backed by the World Bank for the next decade.

The ban applies specifically to SNC-Lavalin Inc., a subsidiary of SNC-Lavalin Group, and any “controlled affiliates.”

The World Bank has not commented on the reason for the complaint or the settlement.

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

Damn:

I wanted to order a hydrogen powered poutine maker.

#180 Tyrone Asauras on 04.18.13 at 4:32 pm

#161Seller on 04.18.13 at 1:48 pm
in current market, is it good idea to do reno and sell or sell as is

Kinda sorta depends on what you’re reno’ing, what the hard costs are, and what the market is going to think your reno is worth.

Given that you have zero control over the third factor, I can tell you I would not spend big bucks on any reno that I’m not planning to use up myself………

I’d limit pre-sale renos to small-ticket jobs aimed at camouflaging ugly/concerning items. A half decent neutral coloured paint job probably ain’t a bad idea either. Other than that, eff it.

#181 Godth on 04.18.13 at 4:43 pm

#178 Old Man

That’s what happens when money = debt = borrowing = growth. Nothing grows forever. The few benefit though, short term, so why the hell not?

#182 Humpty Dumpty on 04.18.13 at 4:57 pm

Your turn to Roll the dice…

Carney says Canadian deposits safe under bail-in, but offers no guarantee

OTTAWA – Mark Carney says policy-makers are working diligently to devise an international “bail-in” regime to prevent big bank failures, but he offered no guarantee that individual deposits would be protected.
The Canadian central banker, who is a few months away from heading the Bank of England, says banks must have a set of buffers in place to draw on in an emergency.

Speaking during a televised interview in Washington, Carney appeared to disagree with the approach taken in Cyprus last month that involved taxing deposits, but would not state his personal position because he said it might be misinterpreted.

He notes that the Canadian government has pledged not to dip into individual deposits.

http://ca.finance.yahoo.com/news/carney-says-canadian-deposits-safe-under-bail-offers-171950345.html

#183 Dean Mason on 04.18.13 at 5:00 pm

To Old man #178

The problem is not the higher mortgage rate of say 4.00%,5.00% or 6.00% in the future. The problem is that housing prices went up too much. If a house increased to income growth and demand not to very low interest rates,mortgage rates not seen for 70 years or more a $500,000 house today would be no more than $365,000 at the most.

Mortgage rates would be 5.00% to 5.50% and only those that could afford a house would qualify. There will always be speculators and people that get into too much debt but this time it’s ridiculous and way over the top.

Also, people forget that there is a great deal of extra rising costs besides monthly mortgage payments,property taxes. There is utilities,repairs,maintenance,H.S.T. on all these expenses and costs,CMHC insurance which could be at least $10,000 every 5 years,home insurance,lawyer fees,land transfer taxes etc. All the rising costs that don’t go away once the mortgage is paid off will make it more unaffordable 20 to 25 years down the road.

Say all these expenses excluding the monthly mortgage payments,CMHC insurance premiums add up to $800 per month today.A 3.00% annual increase on all these expenses and costs in 25 years would be would be $1,675.02 per month.Now you see why reverse mortgages will be very popular over the next 10 to 15 years.

#184 Joe on 04.18.13 at 5:35 pm

158 Smoking Man.
If you think some corpse raiseing from the grave is hard to believe then try to wrap your head around everything having evolved from nothing….that’s nothing, no planets, no air, no water, no sun, no life, zilchola.
You have to think outside the man made bubble.
Nothing+Nothing=do the math…

#185 Old Man on 04.18.13 at 5:38 pm

I love dogs and if Mr. Turner will permit have a great story to tell, as it all happened on Halloween night. I would be sitting in my den beside the fireplace just looking a TV, and dog was about 5 years old, so the bell would ring, and she would bark and run for the door going for an attack.

My dog was a watchdog to protect the home, as all the kids in the neighbourhood knew her. So when the door was opened they are called out her name and petted her; this went all night long like 50 times. Each time she came back to the den wanted a reward so gave her a tiny dog biscuit for being a good watchdog.

Imao, as so much for my watchdog to protect me and my home, as she believed on Halloween all the kids came to see her.

#186 Godth on 04.18.13 at 5:53 pm

This will work out well.

http://business.financialpost.com/2013/04/18/irish-cash-strapped-borrowers-face-ban-on-vacations-limits-on-food-spending/

#187 Julia on 04.18.13 at 6:05 pm

#153 Bottoms_Up on 04.18.13 at 1:08 pm
#121 Julia on 04.18.13 at 10:38 am
——————————————
That is interesting, the anecdotal evidence from my experiences suggests the foggies will stay in their homes. Two recent retirees are planning on staying put. My great grandmother stayed put. My grandmother is staying put. My mother in-law is staying put. All my retired neighbours are staying put.

But Garth does have a point, there are those that need the money in their homes, and those are the ones his warnings are most directed at.

——————————————————
What’s interesting about the article is that if it’s true that seniors will be staying put but boomers will be trying to sell, both demographics will be exiting their homes around the same time, one by choice the other by necessity. And, the seniors kids (the boomers) will be the ones left trying to sell their homes and their parents homes.

#188 Grim Reaper/Crypt Speculator Ⓤ on 04.18.13 at 6:27 pm

#184 Joe on 04.18.13 at 5:35 pm

158 Smoking Man.
If you think some corpse raiseing from the grave is hard to believe then try to wrap your head around everything having evolved from nothing….that’s nothing, no planets, no air, no water, no sun, no life, zilchola.
You have to think outside the man made bubble.
Nothing+Nothing=do the math…

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

Smoking Man….you’ll find out eventually, by then too late.

No atheists in faux holes

#189 Smoking Man on 04.18.13 at 7:23 pm

#188 Grim Reaper/Crypt Speculator Ⓤ on 04.18.13 at 6:27 pm

Smoking Man….you’ll find out eventually, by then too late.No atheists in faux holes
………………….

I don’t no why people can’t accept, when the heart stops ticking, you turn to worm food.. Neurons stop working, you memories, dry up like pond in Vegas in July..

It logical and obvious, not afraid here…. On my near death experience tour of universe, I met the voice, thought it was god, when I was revived, I knew it was the crazy voice inside my head.

Speaking of death, RIP Storm Thor.. The artist painter drawer, for Pink Floyd

Hope to see you some time on the dark side of the moon

#190 Small Town Steve on 04.18.13 at 7:27 pm

Yay !!
XEF.TO
XEC.TO

Two new global asset non hedged ETF’s .

#191 Dr. Hoof - Hearted on 04.18.13 at 7:36 pm

#187 Julia on 04.18.13 at 6:05 pm

#153 Bottoms_Up on 04.18.13 at 1:08 pm
#121 Julia on 04.18.13 at 10:38 am
——————————————
That is interesting, the anecdotal evidence from my experiences suggests the foggies will stay in their homes. Two recent retirees are planning on staying put. My great grandmother stayed put. My grandmother is staying put. My mother in-law is staying put. All my retired neighbours are staying put.

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

I see this as the next trend….

People do not want to live in multi – family….and will only leave feet first.

I also submit that more families will live communally under one roof.

A whole different future.

#192 CrowdedElevatorfartz on 04.18.13 at 7:48 pm

@#125 Canuck

Very well put. And I couldnt agree more.

#193 Humpty Dumpty on 04.18.13 at 7:52 pm

Just spreadin some love…

The Temptations Papa Was A Rolling Stone

http://www.youtube.com/watch?v=3s3SNHIH0bs

#194 CrowdedElevatorfartz on 04.18.13 at 7:55 pm

@#173 Dr. Hoof
Total agreement. Whistler has priced itself so outrageously it almost deserves whats coming.
$100 lift tickets?……… asinine.
I havent skied there in about 5 years

#195 shaan on 04.18.13 at 8:00 pm

Yeah I love liquidity, but would you consider REITS (.UNs) a financial non real asset ?

#196 Devore on 04.18.13 at 8:12 pm

#146 Daisy Mae

CBC: “Canada’s smallest condos go up for pre-sales this weekend in Surrey, aimed at buyers with modest incomes.

These “condos” are aimed at speculators and investors, who will buy them by the dozen on their credit card, then rent out to the poor and working poor.

Do you really believe anyone actually wants to own and live in one of these things? Not surprisingly, the project is at Gateway, Tomorrow’s Slums Today!(tm)

#197 Daisy Mae on 04.18.13 at 8:18 pm

#142sciencemonkey
@124 sue

Please, don’t drag atheists down to the level of religious believers by saying atheists also believe in something. An atheist simply says that the burden of proof is on the believer of the nonsensical fairy tale.

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

Yes. I agree with ScienceMonkey. I, too, am an Atheist. This is not a ‘religious’ blog. Believe what you want…just keep it to yourself. We’re not interested.

#198 Daisy Mae on 04.18.13 at 8:24 pm

#146Daisy Mae on 04.18.13 at 12:41 pm
CBC: “Canada’s smallest condos go up for pre-sales this weekend in Surrey, aimed at buyers with modest incomes.

The 300-square-foot units start at $109,000.”

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

Pre-sales, natch. And “cheaper than rent…”

Why would you lease a hotel room? — Garth

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

What does this mean, Garth?

#199 Daisy Mae on 04.18.13 at 8:27 pm

You’re so quick witted….way ahead of me!

#200 Daisy Mae on 04.18.13 at 8:35 pm

#148 Canuck: “Especially anything small but nice. Probably the same folks who help themselves to ashtrays, nice hangers…”

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

Like the salt & pepper shakers we used to snitch from cafes when we were teens…so funny! Well, maybe not…for the cafe.

#201 Joe on 04.18.13 at 9:04 pm

189 Smoking Man
Look in the mirror and then look up the meaning of entropy.

#202 sue on 04.18.13 at 9:51 pm

Sciencemonkey Your post just backed up what I was trying to say. You called God a “nonsensical fairy tale” which is a strong belief which you cannot prove and you then said you have no respect for people who believe…lol That’s the dark side of religion which I am not a fan of. Sorry Garth, last comment on this.

#203 Daisy Mae's blog? on 04.18.13 at 11:00 pm

Believe what you want…just keep it to yourself. We’re not interested.

This is not a ‘religious’ blog.

Well last time I checked This was Garth’s blog and he allows what is seen here so until then Daisy Mae …just keep it to yourself…..on what you think is allowed here or not, oh and I will pray for all you non believer’s for it is the right thing to do.

God Bless…

#204 Dupcheck on 04.19.13 at 8:09 am

From the graph i thought US was at 167% ratio around 08-09 now it looks like it was 120%. Who to believe?!!!

#205 CrowdedElevatorfartz on 04.19.13 at 8:44 am

@#188 Crypt Spec

Respectfully, Its a financial blog, not a church.
Save the sermon for a more receptive audience.

#206 Daisy Mae on 04.19.13 at 10:57 am

#196 DEVORE: “Do you really believe anyone actually wants to own and live in one of these things? Not surprisingly, the project is at Gateway, Tomorrow’s Slums Today!(tm)…”

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

Well, actually, they interviewed a 19-year-old who was ecstatic….her purchase was going to be cheaper than her current rent. She’s not an investor.

#207 salonist on 04.19.13 at 4:17 pm

#168Tom Vu on 04.18.13 at 2:40 pm

if clues were shoes would you be barefoot?

you’re beautiful in diapers.love those baby blues on you