The new Eden

kid

“They sure had some interesting things to say about you.”

The two investment bank dudes from NYC sat across from me and slowly shook their heads. I could only imagine what the developers and real estate execs they’d just conferenced with had told them. Nothing good. That much was clear.

“You’re quite controversial, to say the least,” the young one offered. “But I must admit I’ve become addicted to your blog.” He looked guilty as hell. Like admitting you have panties on under your suit.

The two are on a fact-finding swing through the frozen north, prompted by the realization Canada has a housing bubble and things will not end well. Investment bankers love that. They can then figure out how to take maximum advantage of the pain and suffering, advise their clients on vigilante investing and seek profits in the bloody detritus which will remain.

The developers and condo-floggers had told them the market is entering a normal correction, and it didn’t really matter if Canadians were tapped-out, debt piggies with bloated borrowings and uncertain prospects, because Toronto’s the new Eden. At least the next New York.

“We were told that substantial foreign investment, from Iran, Russia and China, for example, is replacing softer domestic demand. What is your comment?”

When I regained consciousness I explained that this is exactly the kind of comment rock star builders and realtors love making – since it sounds sexy and can neither be substantiated nor disproved. It’s like the Yellow Peril that gripped Vancouver 18 months ago, when housing hucksters got everyone freaked out over a mythical invasion of Mainland Chinese with bags of cash. A few, maybe. Enough to move a market? Never.

So I explained how Canada is America circa 2005. Home ownership at record levels. Household debt off the charts. Economic fissures opening. Manufacturing hollowed out. Real estate infatuation. Speculation, house lust and bankers who can’t say no. The Brad Lambs of Canada may have told the money guys that it’s different here, but I don’t think they’re buying.

“So,” the older guy said, “it looks to us like Toronto is a giant collection of gleaming bank branches surrounded by a forest of new condos, presumably where the bankers and the professional class live. What exactly do most people here do?”

Dumb Americans. Isn’t that obvious? (Rick Mercer was so right.) We make condos, then buy them. That’s how almost a third of the entire economy came to be comprised of real estate-related activities, as opposed to the 10% which actually makes stuff. Canada is now as dependent on housing as an economic engine as California was in 2006, just before that state’s finances disintegrated and politicians started attacking firefighter and cop pensions.

And while the Lower Mainland is the epicentre of the real estate correction destined to touch the whole nation, Toronto’s condomania is of special fascination for people visiting from another planet, like Wall Street. “We were told there are about 2,000 condos for sale at any given time,” the youngun blurted. Maybe on this block, I corrected. Actually there are 6,000 listed by GTA realtors, at least an equal number for sale privately, 21,000 new and empty and another 60,000 in the pipeline. Sales of new-builds were down 47% in March from the same time a year ago, and F’s mortgage changes pretty much finished off the property virgins.

F? They blinked vacuously.

I explained. He’s the man who invented 0% down payments, created 40-year amortizations, doubled the amount of mortgage insurance available, allowed the banks to give deposits to buyers without money, brought in new tax credits to encourage the virgins and told everybody things were different here. Then he changed his mind and took it all back. In Canada, we call this decisive leadership.

Our session ended. They promised me a copy of their report. I will share it with you. I’m betting many people in the world will wonder how Canadians could watch their American neighbours self-destruct, snicker, then do the same.

The vultures await.

187 comments ↓

#1 Wall Street Guru on 04.24.13 at 9:04 pm

Nice choice of photo, Garth!

#2 Mike on 04.24.13 at 9:05 pm

The vultures await for sure! :)
In the meantime I’ll enjoy the next 3-4 years of my life by occasionally checking the price declines in Vancouver.
Oh and the photos, like the one today :)

#3 Stephen Harper on 04.24.13 at 9:06 pm

Real estate market is going down! Sell and rent, invest your cash!

#4 FASB on 04.24.13 at 9:06 pm

It is earnings season in the USA. Lot of Wall Street behemoths are reporting.

Of concern is the general weakness in the revenues of reporting companies. Earnings less so because they are often accounting fictions.

71% have exceeded expectations. Overall profits are 1.1% less than Q1 2012. — Garth

#5 TurnerNation on 04.24.13 at 9:07 pm

Life in Harperstan (I am the war president!):

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*CURRENT-2061667&symbol=*CURRENT&region=C

Fraser Institute says Cdns pay 42.7% of income in taxes

2013-04-24 16:16 ET – Street Wire

by Charles Lammam and Milagros Palacios of the Fraser Institute

Unless analyzing tax policy is part of your day job, you likely avoid thinking about what ultimately can be a polarizing topic. But with the deadline for filing our income tax returns around the corner, we are all forced to at least temporarily think about taxes. The deadline after all is a sharp reminder of how much income tax we paid throughout the year.

While some gladly pay their share — thinking of the numerous government programs these tax dollars finance — others feel their income tax burden is too high. No matter where you fall in this debate, to truly gauge whether you are getting value for your tax dollars, you must have a complete understanding of all the taxes you pay, in addition to income taxes.

For that you must look beyond your income tax returns because income taxes form only a portion of the total tax bill imposed on us by all levels of government (federal, provincial and local). According to our calculations, a Canadian family with average income of $74,113 paid $9,195 in income taxes in 2012. While personal income taxes are the single largest type of tax paid by families, they represent less than one-third of the total.

Two other significant taxes on our tax returns are premiums for the Canada Pension Plan and Employment Insurance. In addition, residents of British Columbia, Ontario and Quebec pay health care taxes either through direct premiums or payroll taxes. All together, the average Canadian family paid some $6,769 in CPP, EI and health taxes in 2012. Payroll taxes are second only to income taxes as the single largest government levy.

Next up are sales taxes which many of us hate since they show up every time we make a purchase. Calculating the amount of sales taxes paid by Canadian families is difficult as it requires people to track all their purchases of taxable goods and services. Nonetheless, our estimates suggest the average Canadian family paid about $4,812 in sales taxes last year.

Property taxes are no more popular than sales taxes and add …

Summed up, the average Canadian family faced a tax bill of $31,615 in 2012 against income of $74,113. That means 42.7 per cent of the family’s budget went to paying for government. For perspective, in that same year 36.9 per cent of the budget went to paying for food, clothing, and shelter combined. Indeed, families now pay more in taxes that they do for basic necessities.

#6 Margaret Thatcher on 04.24.13 at 9:07 pm

DELETED

#7 Sommerville on 04.24.13 at 9:07 pm

DELETED.

Every idiot trying to post first is being deleted. So stop it. — Garth

#8 T.O. bidding wars debunked - month to date summary and the sales for today on 04.24.13 at 9:10 pm

http://recharts.blogspot.ca/2013/04/to-bidding-wars-debunked-april-24-2013.html

http://img856.imageshack.us/img856/2721/tobiddingwarsdebunkenda.jpg

#9 Brad J Lam on 04.24.13 at 9:12 pm

Garth, Not fair – I was first but you deleted my post! Does that have anything to do with my name?

#10 Nodebt on 04.24.13 at 9:13 pm

I finally hired a fee based advisor!

#11 Brad J Lam on 04.24.13 at 9:14 pm

Every idiot trying to post first is being deleted. So stop it. — Garth

What if I am not first but the first twenty?

#12 T.O. Bubble Boy on 04.24.13 at 9:14 pm

I guess these guys didn’t read The Economist?
(or any other publication that isn’t paid by Canadian Realtor advertisements)

#13 KG on 04.24.13 at 9:14 pm

what kills the vultures would be making. anything the scavengers could get too ?

#14 Sebee on 04.24.13 at 9:14 pm

Still don’t understand how the Canadian numbers for ratio, incomes, debt rent, square with 10% national correction vs. 35% in US.

#15 Alan Hernden on 04.24.13 at 9:15 pm

There is indeed a looming crisis in the form of govt employee pension plans. NB has already moved from a defined contribution plan to a defined risk sharing plan, this may be the model for other provinces. The current deduction rate for govt employees is high, the number claiming early retirement high, the existing deficiet high, its not a pretty picture. You can imagine what the wage freeze in AB is doing for morale.

#16 CrowdedElevatorfartz on 04.24.13 at 9:15 pm

Garth ,Did either one of these “investment dudes”start involuntarily shaking their heads in disbelief when you were explaining how stupid Canadian consumers are?

#17 Sommerville on 04.24.13 at 9:17 pm

First deleted.

#18 Real eastate savvy on 04.24.13 at 9:20 pm

Garth, I am very pleased that you have put the kibosh on these idiots who post first and so on.

How idiotic can they be. Like young children, they need to be taken in hand.

#19 Smoking Man on 04.24.13 at 9:23 pm

Love the pic

#20 Fzzzzzz on 04.24.13 at 9:26 pm

Good post! You probably already have a cult following in Murica!

#21 Boombust on 04.24.13 at 9:28 pm

…like lambs to the slaughter.

I am so glad my adult kids took my advice NOT to buy for the past few years.

I was determined they would not be victims of a giant fraud.

#22 Bob Copeland on 04.24.13 at 9:29 pm

And you still think America is the country to run to?

#23 Victor V on 04.24.13 at 9:29 pm

Vancouver housing market shows signs of improvement

http://www.theglobeandmail.com/report-on-business/economy/housing/vancouver-housing-market-shows-signs-of-improvement/article11537070/

Sandra Wyant has come across tantalizing clues that she believes point to a gradual turnaround in Vancouver’s tepid housing market.

The new president of the Real Estate Board of Greater Vancouver sees modest but encouraging signs of a stalemate easing between buyers and sellers. Sales volume in the Vancouver region fell 18.3 per cent in March, compared with the same month in 2012, but there is a silver lining: Decreases in year-over-year sales have slowed since last fall, when the number of homes sold tumbled nearly 27 per cent. Another clue? An industry statistic known as the sales-to-listings ratio has improved in Greater Vancouver. “There seems to be more of a meeting of minds going on,” Ms. Wyant said in an interview.

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

Down over 18% y/y and the headline says “improvement”! I am still LOL’ing reading the spin on this.

#24 phinny on 04.24.13 at 9:31 pm

CBC morning, this morning, had an insightful comment about our houses being more expensive, by sixty percent, then the Yanks because they’re built so well here.

Something about cold weather or Nordic superiority or something.

#25 Freedom First on 04.24.13 at 9:33 pm

Very fitting to have the red, white and blue in the pic for your American friends Garth. How polite. To the boy in blue…….good eye:)

#26 AK on 04.24.13 at 9:37 pm

#18 Smoking Man on 04.24.13 at 9:23 pm
“Love the pic”
——————————————————————
Yum!!

#27 Sinclare on 04.24.13 at 9:37 pm

Regarding post # 7:

On behalf of many of your readers, thank you Garth.

Post #8:

Quit yer whinin’

#28 AK on 04.24.13 at 9:38 pm

#9 Nodebt on 04.24.13 at 9:13 pm
“I finally hired a fee based advisor!”
——————————————————————-
What is their fee?

#29 thiscountryis going down the toilet on 04.24.13 at 9:43 pm

G…c’mon……mythical HAM?????? It’s official dude…..HAM is the majority in cities like Richmond BC…not a few G……not thousands G…..many hundreds of thousands….so many hundreds of thousands that they original inhabitants are now officially an official minority….your own liberal census takers confirmed this just recently…please…get out more.

“It’s like the Yellow Peril that gripped Vancouver 18 months ago, when housing hucksters got everyone freaked out over a mythical invasion of Mainland Chinese with bags of cash. A few, maybe. Enough to move a market? Never.”

Dude…you’re just wrong on this one….right out to lunch.

Racist comment. HAM refers to offshore money, not your neighbours of Asian ancestry. — Garth

#30 Min in Mission on 04.24.13 at 9:43 pm

Great picture, but, I only come here for the articles!

I am quite glad that I don’t have a mortgage to worry about. Since there is virtually no chance for any increase in income, the only way to get more money is to be more thrifty and frugal.

I am considering trying a “time share” arrangement for my personal Amazons! A guy has to cut back somewhere.

#31 Retired WI Curmudgeon on 04.24.13 at 9:43 pm

The Bankers will return to NY. Suggest their clients “limit” their investments in Canada due to the country’s overexposure to Real Estate.

There are better places an investor can place their money than into a country with RE run amok. Take the U.S. as an example. There, the lemmings have gone through five years of debt reduction, and foreclosure. Beaver land is just to begin the bloodletting spree. No growth, poor prospects, and lots of idiot people in denial.

What would YOU put in your report? Sunshine, lollipops and roses? Hardly. Grow up, you could have learned from your idiot neighbors to the south, but no, it was different in Canada.

Now, you will pay dearly for your excess binge. Sorry about that, but bailouts may be the name of 2015 Canuck style. Can you afford to be kind to yourselves?

#32 Wilson on 04.24.13 at 9:44 pm

In today’s Mississauga News, there is article “Lots of Marilyn Monroe condo units up for grabs”, more than 100 units up for sale – the reason, high maintenance fees.

$280,000 unit ==> $523 fees
$369,000 unit ==> $851 fees

This is interesting, I can the most rooms are dark in the evening ….

#33 timmy on 04.24.13 at 9:44 pm

There is no question Asians have inflated the market–at least in Vancouver. Most tradespeople I talk with who are building large homes are building them for Asians. Just drive around many parts of Vancouver and you can see for yourself.

#34 benchwarmers on 04.24.13 at 9:47 pm

Great post tonight Garth. Seeing what is going on in Canada right now must be like deja vu all over again for them.
Anyone catch this story coming out of Calgary?

http://globalnews.ca/news/502394/exclusive-video-obtained-by-global-news-reveals-calgary-developers-plan-to-control-city-council/

#35 timmy on 04.24.13 at 9:47 pm

So are you shorting the loonie?

#36 45north on 04.24.13 at 9:50 pm

“We were told there are about 2,000 condos for sale at any given time,” the youngun blurted. Maybe on this block, I corrected.

priceless

pinstripe put me onto The Retirement Gamble from PBS – 53 minutes. The video is powerful and insightful. It makes mention of the housing crisis in the US and how its collapse hurt the middle class.

In the US, as the collapse became evident the Fed was able to cushion the shock by lowering interest rates. In Canada we cannot – rates are as low as they can go. Okay I’m going to say it – the housing collapse will be worse in Canada than it was it the US.

#37 TurnerNation on 04.24.13 at 9:50 pm

The insidious bloated “CityPlace” complex is Kando-Ground-Zero territory. I know a renter there, his overseas landlord owns 60 units. Guess which country.

Look, inventory awash: http://tinyurl.com/c85zomm

#38 Smoking Man on 04.24.13 at 9:51 pm

Garth is it posable to start a hedge fund, which I fund exclusively via a TFSA, I lend it money via TSFA charge crazy interest, the hedge fund uses the loot to trade forex, I always keep it in debt to my self.

Is this posable.. A simple yes or no will do…

If yes I would be more than happy to contact your consulting company pay a fee to help me set this up..

I have never been so tax bitch slapped lately…

My parents just refuse to kick the bucket, hence trapping me here in this summer less concrete waste land.. Only child left here, can’t leave them.

#39 timmy on 04.24.13 at 9:52 pm

DELETED

#40 jim on 04.24.13 at 9:56 pm

#28,

Indeed, anyone who thinks the demographic changes in Vancouver are modest is kidding themselves. A lot of your Asian neighbours are citizens, but I have a hard time thinking of some recent immigrant with an investor class ticket to citizenship as a “Canadian”. Many of my Chinese friends with roots going back 60+ years in BC feel the same way.

A guy from China who just had citizenship slapped on him (and just put a whack of cash down on a house) is HAM. He is Canadian in the trivial sense of having citizenship, which matters less to me than ties to the country or shared values.

#41 nietzsche on 04.24.13 at 9:59 pm

“Like admitting you have panties on under your suit.”

Bwahahaha, it’s funny ’cause it’s true!

#42 noise on 04.24.13 at 10:00 pm

Views on commercial real estate, anyone? I can’t seem to find a cap rate over 7% on Vancouver Island, and our correction began about 2 years ago. I can get close to that with a dividend or preferred stock and they’re liquid and appreciating.

#43 nietzsche on 04.24.13 at 10:05 pm

RE: #28
“Racist comment. HAM refers to offshore money, not your neighbours of Asian ancestry. — Garth”

Nooo way he made a racist post buddy. This a perfect example of a programmed politician’s knee jerk reaction to pointing out the obvious. In no way did that guy saying anything negative or derogatory.

This is why white people are so easily manipulated, fear. Especially on things like going into freakish debt for a home, right garth?

The ‘obvious’ is that lots of people of Asian ancestry like Van, and buy homes there. If you want to divide the world into yellow and white, that’s your problem. — Garth

#44 Smoking Man on 04.24.13 at 10:06 pm

Thanks for the yes no garth…

Anyway forex hounds sell usdcad tonight, you will wake up very happy..

#45 Old Man on 04.24.13 at 10:09 pm

The pic has class, but only the young boy wearing the blue shirt has a future with the women in life, and the guy wearing the red shirt will become a loser.

#46 Chickenlittle on 04.24.13 at 10:11 pm

Sebee on 04.24.13 at 9:14 pm
“Still don’t understand how the Canadian numbers for ratio, incomes, debt rent, square with 10% national correction vs. 35% in US.”

Agreed! How will that work? It really isn’t THAT different here! People still can only afford what they can afford, no matter how someone manipulates the numbers.

#47 al on 04.24.13 at 10:13 pm

“..We were told that substantial foreign investment, from Iran, Russia and China..”

US and Canadian governments put restrictions on banking transactions with Iran, there’s a bunch of empty cities already in China combined with the economic slowdown (since the Western demand is lower, Chinese economy have to slow down), as for Russia, when I told somebody who is running a solid business in Moscow about the rents and RE prices in Toronto, the reaction was one of disbelief.

same thing as an illusion about many thousands of immigrants supporting demand, while them immigrants except select few, are struggling to get menial jobs.

#48 Notsohousehorny on 04.24.13 at 10:14 pm

Where can I buy Money Road? I’ve been looking for it for a while, not at chapters, amazon or kijiji. Any help.

I have chosen not to have the book printed again, rendering existing copies of inestimable value. Wait for the new one. — Garth

#49 not 1st on 04.24.13 at 10:16 pm

Don’t these money guys spring for some independent research? They had to come all that way to sit across a table from you to hear it?

#50 45north on 04.24.13 at 10:22 pm

Victor V: Sales volume in the Vancouver region fell 18.3 per cent in March, compared with the same month in 2012, but there is a silver lining: Decreases in year-over-year sales have slowed since last fall, when the number of homes sold tumbled nearly 27 per cent.

once we cross a certain line BC realtors are going to jump in box cars and descend on Ottawa. seriously year-over-year drops of 20% are going to hit BC hard. Ben Rabidoux says he doubts that the drops will continue through April and May. My feeling is they will.

#51 not 1st on 04.24.13 at 10:25 pm

If you bought a house in a number of foreign countries, it would be built with concrete and stone, rebar and steel. Europe for example, and some asian countries use concrete exclusively.

We here use cornflakes and Elmers glue to build our structures because our trades people are too expensive to build real structures. Even though the price difference between plywood and particle board is minimal, you still can’t get a builder to use it. Our construction doesn’t even involve screws anymore, just nail gun staples holding it all up.

And look at our suburbs – could they be any more bland and uninteresting? Thats because developers don’t want to do custom anything. Houses are a commodity and they want to just build the same style over and over again.

And even though Canada has the 2nd largest land mass in the world, the developers see a need to shave down the average lot width by 3 or 4 ft in the back and sides, so now you get a postage stamp yard and single stick tree as your personal space. I am standing on my back deck looking into my neighbors stove and know what he is having for dinner tonight.

#52 Paul on 04.24.13 at 10:26 pm

Wonder if they make them for Harleys.

http://youtu.be/_-QBh-NA_oM

#53 Coho on 04.24.13 at 10:26 pm

F? They blinked vacuously.

I explained. He’s the man who invented 0% down payments, created 40-year amortizations, doubled the amount of mortgage insurance available, allowed the banks to give deposits to buyers without money, brought in new tax credits to encourage the virgins and told everybody things were different here. Then he changed his mind and took it all back. In Canada, we call this decisive leadership.

More people are starting to realize that F doesn’t come up with this stuff all on his own. But for those that still do, ponder for a moment if it is wise to have a system where one man’s decisions (position of power without checks and balances) can have such a devastating impact on so many. What we have is akin to elected dictatorships.

The video below by a lieutenant-colonel really emphasizes that our confidence should be in principles of what is right, and not men because of such outcomes described in today’s posting.

The clip is 17 minutes long which is too long for most peoples’ attention span it seems, but for those few inclined the first 5 or 6 minutes are the most important in my opinion.

http://www.youtube.com/watch?v=IXR1IkDCPCY

#54 Smoking Man on 04.24.13 at 10:27 pm

#43 Old Man on 04.24.13 at 10:09 pm

The pic has class, but only the young boy wearing the blue shirt has a future with the women in life, and the guy wearing the red shirt will become a loser

………..

Not so fast old man, the kid in the red shirt could be thinking old lady please, the kid in the blue shirt could be looking at a bug that just landed on the mountain.

Take them to union station at 12:43 two times, on the second trip you will know better. A 5er or a 6er

Old man do I need to educate you too…

#55 AndrewAB on 04.24.13 at 10:27 pm

Hi Garth,

A well-known blogging real estatefriend of mine uses a 3 year average to show that sales in Calgary have increased in the last month.

You show that sales declined in the same period by using a YoY comparison.

Who’s right?

Beats me. I quoted the realtors’ own numbers. — Garth

#56 Uh Oh Canada on 04.24.13 at 10:29 pm

The tables have turned. We are the new Americans.

#57 visorman30 on 04.24.13 at 10:31 pm

Based on this meeting, do you get the sense that the Americans are looking to pull what a lot of Canadians did to properties in Florida/Phoenix/Vegas when their housing prices took a dive?

I know you’ve previously predicted a Canadian-style drop rather than the more dramatic drop experienced in the US. Personally, I don’t see it, I mean even with a 15% drop or 20% a lot of housing in Toronto is still way overpriced.

#58 Nodebt on 04.24.13 at 10:34 pm

#27 AK
There fee is 1%, how is that AK?

#59 Paully on 04.24.13 at 10:35 pm

Apparently, there are still lots of crazy people out there participating in multiple-offers on houses in Toronto.

Can anyone explain to me why?

It seems self-evident to me that over-paying today is nutty, when you could buy it for less next year.

The multiple-offer chart has been published on this blog almost daily. Welcome to a media myth. — Garth

#60 Kingarthur on 04.24.13 at 10:36 pm

Turner Nation: Everyone who does their own taxes knows how much they pay. My math doesn’t agree with the Fr*ser “Institute” institution. They are nothing but mouthpiece of the Corpornation of Canada. You get the opinion you pay for.

#61 Yellow Rox Rock on 04.24.13 at 10:36 pm

I can only comment on the area of Greater Vancouver for which I have the most knowledge: Marpole.

There is an abundant supply of HAM. Not people of Chinese heritage who have lived here for a couple generations but real HAM: Wealthy, non-English speaking, partial absentee owners with no connection to the community. They are of course not the only group in Marpole but they are the prominent group that flip all of the single family homes back and forth between each other.

Source on the ‘flips’? — Garth

#62 Canadian Watchdog on 04.24.13 at 10:38 pm

#36 TurnerNation

Just gave a cursory glance; data for Iceboat I & II area is here. Roughly 23% of 1167 units are for sale or rent.

#63 Ryan Perich on 04.24.13 at 10:41 pm

Agreed! How will that work? It really isn’t THAT different here! People still can only afford what they can afford, no matter how someone manipulates the numbers.

I disagree. People here in Canada can’t afford what they buy half the time. People here in Canada decide to try to afford what they cannot, based exactly on how people manipulate the numbers and decide to give people mortages 5-7x their annual pre-tax income with no money down – and only choose to put 5 % down out of necessity, not prudence.

#64 Sgip on 04.24.13 at 10:43 pm

“The Fraser Institute has 51 full-time employees, and paid a total of $5.6 million in compensation. Twenty per cent of its full-time staff members earned salaries that put them in the top 10 per cent of all Canadian income earners. About 10 per cent earned incomes in the top one per cent.

So here we have charitable organizations which are exempt from paying taxes on their revenue paying themselves generous salary scales while giving each other tax-exempt gifts so they can produce reports complaining that too many single moms and minimum-wage dads don’t pay sufficient taxes and are a threat to our democratic way of life.”

http://www.vancouversun.com/opinion/columnists/Stephen+Hume+Fraser+Institute+exempt+status+makes/8180605/story.html

O
O

#65 AK on 04.24.13 at 10:44 pm

#44 Old Man on 04.24.13 at 10:09 pm
“but only the young boy wearing the blue shirt has a future with the women in life”
——————————————————————–
The boy in the blue has “Alimony” written all over his face. :-)

#66 Sgip on 04.24.13 at 10:44 pm

Nadine Lumley The Fraser Institute, Canada’s leading right-wing think tank / CON echo chamber, received over $4.3 million in the last decade from eight major American foundations including the most powerful players in oil and pharmaceuticals. Funding from foreign special interest groups undermine Canada.

“The Fraser Institute gets taxpayer’s money as a write-off and they do nothing but influence public policy,” Senator Grant Mitchell told The Vancouver Observer.

http://www.vancouverobserver.com/politics/charitable-fraser-institute-received-43-million-foreign-funding-2000

O
O

#67 Smoking Man on 04.24.13 at 10:44 pm

#56 visorman30 on 04.24.13 at 10:31 pm

Based on this meeting, do you get the sense that the Americans are looking to pull what a lot of Canadians did to properties in Florida/Phoenix/Vegas when their housing prices the took a dive?I know you’ve previously predicted a Canadian-style drop rather than the more dramatic drop experienced in the US. Personally, I don’t see it, I mean even with a 15% drop or 20% a lot of housing in Toronto is still way overpriced.

………….

Who are you to jump to that conclusion, you ever evaluate population growth, the mind of the herd, the fear of investing in in markets when mom and dad made a fortune in real estate….

That’s powerfull, takes an un schooled lush to point it out… Education system here socks.

#68 AK on 04.24.13 at 10:48 pm

#57 Nodebt on 04.24.13 at 10:34 pm
“There fee is 1%, how is that AK?”
——————————————————————–
1% is good. Much better than the 2.49% MER that is charged by many of the Bank mutual funds.

#69 Tom Vu on 04.24.13 at 10:49 pm

Hi Smoking Man:

You get “The package” yet?

#70 Squatter on 04.24.13 at 10:53 pm

Garth, do you recommend that the bond part of our portfolios be mostly in foreign currencies, as you recommend for stocks???

Neither. — Garth

#71 Julia on 04.24.13 at 11:00 pm

Toronto condos… A bargain at twice the price!
http://www.sunnybatra.com/blog/p/toronto-vs-worlds-most-expensive-real-estate-markets

#72 Baldpaul on 04.24.13 at 11:02 pm

Sold my house last May…renting for fraction of cost. The astutely unaware snicker behind my back, the smart ones are jealous, but cannot escape the “home ownership status trap”.

#73 Boombust on 04.24.13 at 11:11 pm

#55…

Yeah. If Mulroney had his way.

This new CIA stooge, Harper, is still trying, though.

#74 The new Eden — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer™ on 04.24.13 at 11:20 pm

[…] “You’re quite controversial, to say the least,” the young one offered. “But I must admit I’ve become addicted to your blog.” He looked guilty as hell. Like admitting you have panties on under your suit. Continue reading → […]

#75 Laughing out loud on 04.24.13 at 11:32 pm

Garth,

Love your daily pics – today’s especially cracked me up! Junior really loves checking out the scenery!

#76 Scully on 04.24.13 at 11:46 pm

Smoking Man is right again. I can’t tell you how many older folks here in BPOE think my husband and I are insane for renting. They made their fortune in RE so why aren’t we? All have lost in stocks but not RE…yet.

#77 neo on 04.24.13 at 11:46 pm

71% have exceeded expectations. Overall profits are 1.1% less than Q1 2012. — Garth

71% have not exceeded REVENUE expectations and that is a number that A.) Is much harded to manipulate and B.) Gives a better outlook on the strength and momentum of the company and overall economy.

#78 Pounding sand in Peachland on 04.24.13 at 11:48 pm

What does it take to get DELETED

#79 Pounding sand in Peachland on 04.24.13 at 11:52 pm

Sinclare you’ll never be DELETED. OH and you don’t speak for me

#80 Craig on 04.24.13 at 11:54 pm

I started working in Liberty Village a week ago. The amount of condos still going up is mindblowing. I had no idea it was that bad…

#81 Victoria Tea Party on 04.25.13 at 12:00 am

BLACK SWANS A-LANDING

That’s instead of the ordinary everyday chickens coming home to roost!

Or vultures. Who needs ’em?

When a couple of money-connected Yanks drop by your office, St. Garth of Interesting Times, Inc., it means that those Wall Street couriers have been told to sniff out an easy target for “A Few Dollars More”, AND they’re not taking guff from the local CREAites. They came for, and obtained, the truth.

THIS WILL HURT.

In other words, Black Swans on “Final” as Garth writes:

“…Canada has a housing bubble and things will not end well. Investment bankers love that. They can then figure out how to take maximum advantage of the pain and suffering, advise their clients on vigilante investing and seek profits in the bloody detritus which will remain…”

I was kind of expecting such an article, but wasn’t sure just when it would show up.

Now it has! Hmmm.

Methinks that a bunch of recently-interned real estate “purchasers” north of the 49th may feel they’ve been interred instead! Well, they have, sort of.

How can they escape the inescapable? How many lattee shacks will shutter because our real estate industry is actively imploding?

How will the upcoming BC NDP government get its extra taxes from all those “big corporations”, like Starbucks, if they’re not there anymore!

Our entire economy has at last been chucked onto the slag heap along with the rest of them. And the US is nowhere near healed!

Sheesh!

#82 T4 on 04.25.13 at 12:05 am

Wilson, gotta link to the Monroe building on M news ?

#83 800 RMK on 04.25.13 at 12:17 am

Garth, your blog is priceless. Even if I didn’t agree with most of what you say, I would still read this blog for the witt and humour.

#84 raider on 04.25.13 at 12:19 am

Garth, I think the ‘correction’ pretty much settled in to th e heads of the regulars on this blog.

However, can you elaborate a bit further how this vigilante investing is ought to be played out?

Condo developers do not seem to listed on the TSE, and their financiers (like TCN) are probably well insured against a downturn. Also BNP Paribas, which seems to be the biggest financier at this point in Toronto, is far to big to be beat down by just Toronto… besides most of these loans are also CMHC insured.

You saved so many potential property virgins from oblivion, now give us a little hint, what to expect from the vigilantes and vultures …

#85 VancouverJoe on 04.25.13 at 12:36 am

>>>>>>

G…c’mon……mythical HAM?????? It’s official dude…..HAM is the majority in cities like Richmond BC…not a few G……not thousands G…..many hundreds of thousands….so many hundreds of thousands that they original inhabitants are now officially an official minority…….
…..
Racist comment. HAM refers to offshore money, not your neighbours of Asian ancestry. — Garth

——————-
Wrong.
Protecting your cultural identity has nothing to do with racism. Not good idea to be drown in asian culture. Ultimately, I would always prefer French cuisine rather than sushi.

#86 live within your means on 04.25.13 at 12:41 am

#177 Dean Mason on 04.24.13 at 4:49 pm
If the federal liberals and Justin Trudeau win the 2015 election there will be a bunch of new and higher taxes,you can count on it.The federal debt will increase at least by$300 billion in their first term. Thomas J. Mulcair and his NDP party will be just as bad or even worse than the liberals.

Time will tell and show how history repeats it’s self.If you think unemployment is high now than you guys are in for a surprise from the other side policies.

Mr. Harper has increased the federal debt by $200 billion and turned an annual budget surplus into a record deficit. Worth remembering. — Garth
………………………..

CRAP & their supporters are up to their usual fear antics.

#87 Piccaso on 04.25.13 at 12:49 am

Jarome Iginla home sold for full list price of $3.995 million
Sale after only one day listed on the market

http://www.edmontonjournal.com/business/commercial-real-estate/Jarome+Iginla+home+sold+full+list/8290052/story.html

#88 Yitzhak Rabin on 04.25.13 at 1:06 am

Were somewhat defending the firefighter and cop pensions in California with that comment? Excessive public pensions (with taxes and over-regulation) are responsible for the downfall of that state.

Ontario and Manitoba are doing their best impression at copying California.

#89 Shawn on 04.25.13 at 1:10 am

FRASER INSTITURE AND charitable deductions…

So some complain about this institute getting tax deductible donations.

Simple solution. Cease and desist all tax deductions related to charity.

You want to give to charity, go ahead, but why should tax payers kick in a percentage?

This would surely reduce a ton of paperwork and bureaucracy as well.

Charities can still attract money by appealing to peoples goodwill and by giving people recognition for donations and in other ways. Getting a tax receipt for a charitable donation just muddies the waters. Just do it ’cause it feels good.

And also no deductions for political contributions, please.

#90 Humpty Dumpty on 04.25.13 at 1:22 am

Dumber Americans.

The return of the prodigal interest only loan:

It is interesting to see the interest only option now making a strong comeback in the market. Just because you put a large down payment doesn’t mean you are safe.

This reminds me of a beagle burying bones in an area prone to sinkholes. A large down payment only means you were able to save for a very long time. Once you plow it into a home of this price and going with an interest only loan, you are making a big bet on the future

http://www.doctorhousingbubble.com/interest-only-loans-comeback-california-interest-only-mortgages/

A land flowing in debt and money…

#91 Geeks on 04.25.13 at 1:31 am

[I’m betting many people in the world will wonder how Canadians could watch their American neighbours self-destruct, snicker, then do the same.] — Well said!!

In the US, Greenspan colluded with the banks to suck money out of the masses. I mean what I say here because I’ve filled two complaints against the US Bank and Wells Fargo in 2012 and I can tell you that these banks are scammers. They should NOT be trusted by any sane person.

When the bubble burst at last, the US government used tax payers money to bail these locusts called banks while leaving millions of Americans in the pasture of foreclosure..

In Canada, the right wing government organized the same scams instead of private bankers and the Canadian “Virgins” are going to experience the same fate as their American neighbors…

Isn’t that insane?

#92 Gord In Vancouver on 04.25.13 at 1:40 am

“So,” the older guy said, “it looks to us like Toronto is a giant collection of gleaming bank branches surrounded by a forest of new condos, presumably where the bankers and the professional class live. What exactly do most people here do?”
_______________________________________

In Vancouver, that question would’ve thrown even the most diehard real estate bull off guard.

#93 VanPerfecto on 04.25.13 at 1:57 am

Harper is awfully quiet these days. How much is he responsible for the pickle Canada is facing? Someone posted the other day that CRA will be going after taxes on people who live here but don’t work here. How would they be able to catch these people? Would this not have a significant affect on the market. Insights by Garth, The American and other informed posters appreciated

#94 rp1 on 04.25.13 at 2:31 am

“I’m betting many people in the world will wonder how Canadians could watch their American neighbours self-destruct, snicker, then do the same.”

We’re gullible, with a superiority complex. See the third chart:

http://economix.blogs.nytimes.com/2011/10/14/lean-on-me-trust-and-friendship-around-the-world/

#95 AngryMan127 on 04.25.13 at 2:50 am

Did they make you drink the Liberal cool aid Garth? The multi cultural dream is just that in Vancouver a dream. Its all China town here. The reality is that high housing prices are a consequence of global capital movement supported by illicit bank transactions with those desparate to get some of their money out of places with negligible amounts of due process and respect for individual property rights. Trade that we have embraced no less! Oh for the principles of the Cold War trade embargos!

Boomers have sold out and kept their eyes shut to the radically altered fabric of this country. No one speaks publicly for fear of being branded a bigot. There may a period of slow stagnation, being the calcified group of wealth preservationists we Canadians are, but affordable housing is permanently out of reach for the next generation and to continually ignore this reality is to further betray this generation.

I love the way you meld racism (‘all China town here’) with ageism (‘Boomers have sold out’) into a symphony of generational entitlement. A new low. — Garth

#96 ApplePi on 04.25.13 at 2:58 am

To all those that still insist on HAM being alive and well in Vancouver… think about it for a moment as a completely rational person.

If the HAM exists, does anyone benefit? The only ones that truly benefit are the ones selling the product.

It is, therefore, in the real estate industry’s best interests to perpetuate the HAM story… true or not. This alone would lead a logical and reasoning person to question the existence of the HAM or at the very least ask for further proof. Why do we never see numbers published on the number of foreign Asians buying properties in places Vancouver? Why do agencies like MAC hire local Chinese agents to go on TV pretending to be HAM? Why do places like Winnipeg go up and up?

If you use the reasoning centres of your mind, you’ll ask the right questions. The right questions will lead you down the path of logical conclusions. Whether you choose to follow that path to its obvious conclusion is up to you. The decision is yours to believe what you want to believe.

#97 Mr Buyer on 04.25.13 at 3:25 am

The whole rent falling with the collapse of a real estate bubble thing has been a bit of a mystery to me. It happened in Japan but it is hard for me to understand why. It seems counter-intuitive. With increasing amounts of renters one would expect that the demand would warrant higher rents but this was simply not what happened over the 21 consecutive years of property price decline in Japan. Rents fell but why?
People need a place to live so one would think that the sky would be the limit as far as rent was concerned and this has certainly been the case in Canada during the festering expansion of our massive real estate bubble. There is an upper limit to the amount of rent that can be asked for a place to live. People only make so much money and if they are not flipping houses then there are no cash windfalls to offset burdensome rents. So there is a potential ceiling not set by demand but rather income. This ceiling can be circumvented by the formation of multi-income homes in which numerous bread winners live together but can enough of these dwellings be formed to allow ever increasing rents? I simply do not know. Anyways back to our mundane limit set by income from a job of all things (how 1950s). So a bubble is collapsing, equity vanishing, prices are falling, people are not buying but rather waiting and renting. Why would a property owner with a massive mortgage with a monthly obligation akin to that owed to a loan shark ever even consider lowering rents? It happens and I cannot get a convincing handle as to why. It has been mentioned on the blog many times that reasonable sale prices can be related to multiples of rental amounts and falling sale prices would thus dictate falling rents to maintain these multiples over time. Can it be as simple as that?

#98 Mr Buyer on 04.25.13 at 3:42 am

I am guessing in a market where virtually every renter is a potential buyer rents were simply set to induce renters to buy. We have heard a million times how silly it is to be paying somebody else’s mortgage when you could make it your mortgage (with a massive finders fee in the form of a huge increase in the price of the home that has to be added in when getting your very own mortgage). I can see how traditional rental businesses made out very well in this gaseous expansion of rental rates that accompanied this real estate bubble. I wonder when the rental market is going to turn and make its march downward and what the mechanics of that will be.

#99 Pascal on 04.25.13 at 4:11 am

Garth: if the two dudes are the boys on the picture, then who are you? :)

#100 visorman30 on 04.25.13 at 6:40 am

@Smoking Man, Your response to me:

Who are you to jump to that conclusion, you ever evaluate population growth, the mind of the herd, the fear of investing in in markets when mom and dad made a fortune in real estate….

That’s powerfull, takes an un schooled lush to point it out… Education system here socks.

I’m not quite sure what you’re talking about. I believe it was a general question and all I offered was my personal opinion which was stated as such. In so far as my education/level of research etc., it doesn’t matter as long as everyone is an anonymous internet commenter. Feel free to disagree with me all you want. That’s fine and it’s nothing personal but if you do, please offer why rather than imply I don’t know what I’m talking about.

I’m also not clear if all the spelling mistakes in the second part of your response is intentional given the first paragraph was clean. Sometimes, spelling errors come across as uneducated. The Halo Effect is also powerful.

#101 pbrasseur on 04.25.13 at 7:26 am

“F? They blinked vacuously.” – Garth

:-)

Love the way you write! A pleasure to read you as always.

#102 Herb on 04.25.13 at 7:48 am

Somethingn I never thought I’d see in The Ottawa Citizen, practically the rag of record for “organized real estate” –

http://business.financialpost.com/2013/04/23/even-in-a-real-estate-slump-some-canadians-will-get-into-a-bidding-war/

The New Eden is upon us, right after RE purgatory.

#103 Oh-No! on 04.25.13 at 7:51 am

Garth,
If you would be a Prime Minister of Canada right now, what would you do with housing market?

#104 GTA Girl on 04.25.13 at 7:52 am

Where to begin with this story? http://www.thestar.com/business/real_estate/2013/04/25/condo_renters_pay_hefty_price_for_downtown_living.html

The illusion is that condo owners can increase rents for any amount. But when does fair market take over? Unless there is collusion on a mass scale of condo owners to keep rents high, I cannot see how a 500sqft downtown condo is worth $3-5k a month .

But I can see how it would be possible for areas like CityPlace could become ghettos, with many people packed into a unit.

Rents cannot be held at a artificial high rate. It’s not sustainable. Something has to give.

#105 Craig on 04.25.13 at 7:54 am

Fear mongers; ” the same thing that happened in the US will happen here.”

BS

Their banks loaned $Billions to people who were unemployed, min wage earners and created a fantasy mortgage scheme called ARM’s ( If I recall)

Our Banks are ranked at the top in the world. Far from perfect but stable. I do believe a RE correction is coming but not a meltdown in RE / banks, etc.

That is simply people trying to scare other folks into doing something irrational.

Like this debt ratio report for Canadians. Where is this report and has anyone drilled down into the data to confirm it’s legit?

Like I said before, if the US Gov’t wipes out the debt of the Banks, thereby wiping out the debt of bankrupt mortgages, then the debt ratio of the people in the US starts to look real pretty of course.

People are sheep and will believe anything.

Like the comment – 71% exceeded expectations !

LOL

OK, so if my expectations are that a company will fail and it doesn’t, is that 100% exceeded expectations?

Think logically folks, not emotionally

#106 Ballingsford on 04.25.13 at 8:20 am

Watched Lang and O’leary last night and was disappointed with Amanda’s view of real estate. She sounded like a geater fool. I think that was the first time that I agreed with Kevin.

#107 Paully on 04.25.13 at 8:30 am

Garth, you replied to my post #58 above:

“The multiple-offer chart has been published on this blog almost daily. Welcome to a media myth. — Garth”

I have looked at those heat charts, but I have also been checking out the TOSolds pages daily, and although lots of places are selling for under asking, there are still a surprising (to me, at least) number of homes and even some condos that are reporting sales at or above list price. Mosey on over to the TOSolds.com site and see what I mean.

It just leaves me shaking my head. Who or what are these crazy people that must be still thinking that they must buy now or be priced out forever?

#108 Smoking Man on 04.25.13 at 8:31 am

#100 visorman30 on 04.25.13 at 6:40 am

I ment no insult, I have several high stress gigs at the moment so every evening at 9pm I indulge in power drinking wine. Then I sleep like a baby . do a but of posting a stress release… So depending on how much I have had my post can go from good to understand readable, sweet spot is after second glass..

As far as the spelling, it’s my trade mark, my brand, the machine demands much from us slaves, I flatly refuse to give it my soul too.

Bad spelling is an extension of the middle finger to the machine. Most won’t understand as they live in the matrix, and obediently obey

No ones perfect.

#109 NRI13 on 04.25.13 at 8:32 am

Fellow greater fools, The toronto star reported in an article today that the investors can raise rent for the condos as they please as rent control applies to buildings occupied before 1991 in ontario. Is this correct?

#110 Ray on 04.25.13 at 8:49 am

#104 GTA Girl on 04.25.13 at 7:52 am
Again, without clicking on the link, I am 100% sure it is written by Susan Pigg.

#111 TurnerNation on 04.25.13 at 8:59 am

Smoking man, already posted: TSFA raid. I might try it later this year. The margin interest, of course, may be claimed on tax returns as an investment expense.

http://www.questrade.com/trading/margin_power.aspx?pid=13-04-00-Qcom-MarginCentre-banner-MarginPower

Here’s how Margin Power works:
Link your margin account with your TFSA
Continue to trade as you normally would in both accounts; you don’t need to change your strategy
The assets in your TFSA will boost the buying power in your margin account
Leverage the assets in your TFSA to enter to positions in your margin account without selling securities or transferring in cash*
Your trading platform will show the buying power of your margin account and the increased buying power available via your TFSA

#112 Jeff in Moose Jaw on 04.25.13 at 9:11 am

There is a lot of debt sloshing around in Canada.
On the average 165% of disposable income is spent, can we make it to 180%? Maybe.
Deflation is the only way.
Also, I can see why people won’t sell right now, if you had a money tree in the backyard, balcony if it’s a condo (money tree = HELOC) can the mortgage holder really afford to cut that stream of cash?
No renter has a money tree, can’t keep all the stuff, and would have to live on actual income.
So the party continues, but at some point the personal debt can get no higher.
Thanks I feel better now, had to get that off my chest.
Oh and I agree with most of what Smoking Man says – seriously.

#113 Dr. Wayne on 04.25.13 at 9:14 am

#7 Sommerville on 04.24.13 at 9:07 pm

DELETED.

Every idiot trying to post first is being deleted. So stop it. — Garth

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

HALLELUIAH, HALLELUIAH, HALLELUIAH, … there is a God (uh, I use the term loosely)… and, more so, a pissed off Mr. Turner whose patience and numerous requests to cease and desist this infantile habit has fallen on ‘deaf eyes’.

Although this is attributed to Edith Sitwell, Mr. Turner can claim some connection: “I am patient with stupidity, but not with those who are proud of it.”

ALSO: “Beware the fury of a patient man.”
John Dryden

OK all you ‘idiots’ … take that …

#114 Buy? Curious? on 04.25.13 at 9:21 am

Hey Garth, when they make a movie of your life, who would you like to play you, Jason Bateman or Ryan Reynolds?

http://www.youtube.com/watch?v=nHnE0iWIHmo

Maybe we can we can get Bar Refaeli to play your Amazonian Love Interest?

http://www.youtube.com/watch?v=2LR8Pu5UAVY

#115 Smoking Man on 04.25.13 at 9:23 am

#100 visorman30 on 04.25.13 at 6:40 am

I ment no insult, I have several high stress gigs at the moment with extreme arthritic pain, so every evening at 9pm I indulge in power drinking wine. Then I sleep like a baby . do a but of posting as stress release… So depending on how much I have had my post can go from good to understand readable, sweet spot is after second glass..

As far as the spelling, it’s my trade mark, my brand, the machine demands much from us slaves, I flatly refuse to give it my soul too.

Bad spelling is an extension of the middle finger to the machine. Most won’t understand as they live in the matrix, and obediently obey. They don’t understand the significance that little act of rebellion.

#116 someone on 04.25.13 at 9:38 am

A few days ago I was in a crowded store in Vancouver and I was trying to make my way to the exit and I kept politely saying, “excuse me, excuse me.” Nobody would get out of my way. Nobody even seemed to acknowledge my presence. Then it occurred to me, these people don’t mean to be rude, they simply don’t know what the words “excuse me” mean. With the invasion of HAM, there is no common language in Vancouver anymore. No wonder common courtesy like saying, “excuse me,” “thank you,” and “please” are going out the window these days. You can’t have common courtesy when you don’t have a common language because in many social situations in Vancouver there are so many non-English speaking Chinese people that nobody understands what you are saying when you say these pleasantries. Why even bother saying “excuse me”? Just push your way through the crowd. That’s what they do in China anyways.

Because good people lead by example. — Garth

#117 What about CMHC? on 04.25.13 at 9:39 am

I hope you told the Americans about our lovely CMHC.

#118 Nemesis on 04.25.13 at 9:45 am

LeaderIllustration.

Now we’re talkin’!

Oh yes, just between the two of us… as regards F. and “Like admitting you have panties on under your suit.”…

DoTell.

#119 Toronto_CA on 04.25.13 at 9:45 am

#104 GTA Girl on 04.25.13 at 7:52 am

That article is crap. No newspapers picked up the Toronto BILD press release about worst March sales in history, 47% drop in new home sales, etc. But they’ll run that piece of shit article about rents going up 10% which is an anecdote as headline news (my rent hasn’t increased in 5 years, let’s run a front page article on that?).

Rents are set by the market and constrained by actual incomes, not interest rates and mortgage amortization periods which strongly influence house prices as we’ve seen. If a landlord increases the rent 10% and still finds tenants easily it means he wasn’t charging the right amount before. Current rents to current house prices in Canada according to that Economist article point to a benefit to renting over buying today, especially in Toronto as Garth has shown repeatedly.

#120 Daisy Mae on 04.25.13 at 9:52 am

“…..Then he changed his mind and took it all back. In Canada, we call this decisive leadership.”

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

This is all so perfectly well stated. Wow, are we dumb…and our government is dumber.

Just as dumb as our Advisory Committee presently going after the BC Government for a carbon tax rebate — we’re entitled, they say, because the sunny Okanagan is an ‘isolated northern rural community’.

#121 TurnerNation on 04.25.13 at 9:57 am

I think it was comedian Ron James whose joke is: “If the Canadian government introduced a 97% tax Canadians would say ‘Well at least it’s not 100%'”.
Yup. Eh.

Here we have the right wing Fraser Inst. with an report (motive unknown) sticking up for individuals, and the “left” responds with a barrage of shrill, knee jerk attacks and tired canards. Sheesh, we’re doomed to pejoratives!
Kanada as we know it ended with the Mulrooney NAFTA sell out. It’s over. Cling to your shreds if you must.
We’re “global citizens”, now, in the North American Union Lo-Wage zone, prefecture #5. Report to your block captain for your daily duties, comrade. The party elites’ sunshine list pensions are saggy.

#122 Penny Henny on 04.25.13 at 10:14 am

That picture reminds me of tube top Sandra.
To be a property virgin again…..ahhhh

Penny Henny

#123 beach girl on 04.25.13 at 10:15 am

Craig on 04.24.13 at 11:54 pm

I started working in Liberty Village a week ago. The amount of condos still going up is mindblowing. I had no idea it was that bad…

____

That is just a nasty area of town. Owned a rooming house there in the 80’s. Was comical, but within 2 years I beat it. Too depressing. Way worse now.

Lived in Liberty Village for 6 months in 2010, as on a contract. I work sometimes, when it makes sense. When I work, international computer shit, I have to be available 24 hours. Job went to India. They were paying me too much anyway. Same with Ford Canada.

For some dumbass reason they needed to see you. BS.

Probably won’t do it again. Just goes to taxes anyway.

Been self employed since age 23. Living large on the beach with my little doggie.

#124 sciencemonkey on 04.25.13 at 10:18 am

Rules on when the caps come into effect:

http://www.landlordselfhelp.com/RentIncreaseGuideline.htm

The increase can be no more than 2.5% or CPI, whichever is lower. However, there are circumstances when it can be higher, such as passing on higher taxes, utilities, security costs, and capital expenditures.

http://www.ltb.gov.on.ca/en/Key_Information/STDPROD_098894.html
http://www.ltb.gov.on.ca/en/Key_Information/157435.html

I can’t find a source, but I remember reading somewhere that there may also be a provision for big increases if the rent is a lot lower than comparable units.

I’ve had no increase in 4 years, and I hope it continues to be that way. I’m a model tenant.

I’m curious, why do the rent caps not apply to new buildings?

#125 LP on 04.25.13 at 10:32 am

#117someone on 04.25.13 at 9:38 am

That’s really thought provoking, at least to me. Several years ago I read a book about the “death” of cultural literacy that made the case that increased imigration (Note – not a bad thing) meant that our slang, our cliches, our references unique to our culture, hold no meaning for those raised in a different context.

References from Shakespeare, from the Bible or Torah, expressions like “carrying coals to Newcastle” and “in for a penny in for a pound” which are British related but understood in Canada, would cause a newcomer to scratch his head in bewilderment.

Increasingly we will encounter such differences and it will take the utmost goodwill and civility on everyones’ part just to make it through a day.

#126 Pr on 04.25.13 at 10:42 am

The vultures await.

Its so clear now, that i think, the invisible hand, will make the correction last for many years. So Carney will be back smiling.

#127 Timbo on 04.25.13 at 10:43 am

http://www.economonitor.com/blog/2013/04/u-s-jobless-claims-fell-last-week-close-to-a-5-year-low/?utm_source=rss&utm_medium=rss&utm_campaign=u-s-jobless-claims-fell-last-week-close-to-a-5-year-low

” But today’s claims release at the very least tells us to refrain from assuming the worst for the labor market, and the economy.”

so the world is not going to end?……

http://ca.finance.yahoo.com/blogs/balance-sheet/cape-breton-unemployment-rate-hits-17-5-per-172828957.html

“Clarke will remember, of course, that it was Mackay’s boss Stephen Harper who suggested, while campaigning for votes no less, that the East Coast had a “culture of defeat”, one that will be “hard to overcome as long as Atlantic Canada is actually physically trailing the rest of the country.” Like say, in employment levels.”

words to remember, and loathe…..

#128 TEMPLE on 04.25.13 at 11:38 am

#110 NRI13 on 04.25.13 at 8:32 am

Fellow greater fools, The toronto star reported in an article today that the investors can raise rent for the condos as they please as rent control applies to buildings occupied before 1991 in ontario. Is this correct?

Technically, Pigg is correct but, as usual, not very helpful. Susan Pigg, the author of the article you mention, is an unrepentant real estate shill, and will spin facts in all sorts of amusing ways to keep the real estate zeitgeist breathing.

Rent bubbles typically don’t last long (and there have been a few- New Zealand and Australia had rental bubbles a few years ago, for example) because rent is largely about supply and demand. Overbuilding, like in Toronto, invariably suppresses rents as would-be landlords chase renters.

For example, where I am living now, units are sitting empty (sometimes for months) and rents are creeping down.

TEMPLE

#129 Westcdn on 04.25.13 at 11:38 am

I am one of those that think there is a lot of lying, cheating and stealing going on. I use the internet for facts and opinions to protect myself against unpleasant future events or misinformation. I came across this video while surfing the web to find answers/truth. I am in the race to achieve financial freedom for the rest of my life. I think that Garth, as a coach, must see this race result too many times. http://www.youtube.com/watch?v=bYvbaqfq9mI
Anyway, financial markets look good to me as I think there is more QE on the way.

#130 Oakvillian on 04.25.13 at 11:50 am

http://www.theglobeandmail.com/report-on-business/economy/housing/vancouver-housing-market-shows-signs-of-improvement/article11537070/

#131 Ronaldo on 04.25.13 at 11:56 am

#17 Sommerville – were you ignored as a child?

#132 bill on 04.25.13 at 12:11 pm

#105 GTA Girl on 04.25.13 at 7:52 am :
”Rents cannot be held at a artificial high rate. It’s not sustainable. Something has to give.”
you are quite right.
It has started here in Kits.
took us a month and a bit two rent what used to have a line up of 10+ ‘desirable type’ renters back before every one had a condo to rent out.

#133 Chickenlittle on 04.25.13 at 12:13 pm

Remember a few years ago Jay Leno had a segment called something like “It sold on EBAY for…” These are all the same people who are buying RE in Canada for these stupid prices. Now they have space to display their $500 chip that looks like Jesus, or the burnt toast that Elvis appeared on.

#134 Uwinsome on 04.25.13 at 12:15 pm

BMO Supports HAM:

http://www.vancouversun.com/Business/asia-pacific/teaches+financial+survival+skills+wealthy+Chinese/8290738/story.html

#135 Bailing in BC on 04.25.13 at 12:19 pm

It’s a sad day on the blog when the little cultural nuance of the fun loving fursters is deleted, while Dr Wanker and his little minion AK are allowed to spew their hateful crap unabated.

TurnerNation said it best in reply to that humourless suckhole Dodged-a-Bullit-in-Alberta

“Yah you should totally leave because of 1/200 of each day’s blog posts.”

#136 Humpty Dumpty on 04.25.13 at 12:22 pm

This New World Vulture is projectiling some interesting comments…

Former Nestlé CEO Says Water Is Food That Should Be Privatized – Not A Human Right

Former Nestlé CEO Peter Brabeck: “Access to water should not be a public right.”

http://americanlivewire.com/nestle-ceo-says-water-is-food-that-should-be-privatized-not-a-human-right/

http://en.wikipedia.org/wiki/Vulture

New World vultures often vomit when threatened or approached. Contrary to some accounts, they don’t ‘projectile vomit’ on their attacker as a deliberate defense, but it does lighten their stomach load to make take-off easier, and the vomited meal residue may distract a predator, allowing the bird to escape.

[6] New World vultures also urinate straight down their legs; the uric acid kills bacteria accumulated from walking through carcasses, and also acts as evaporative cooling.

#137 T.O. Bubble Boy on 04.25.13 at 12:30 pm

Garth – here’s a suggested blog post topic for you: “A Look Back”.

A dumpy listing showed up in North Toronto / Lawrence Park today, which reminded me of an April 2011 post from Greater Fool:
http://www.greaterfool.ca/2011/04/04/the-sure-thing-2-2/

So, let’s take “A Look Back”….
in April 2011, we all were shocked by a 100-showing, 12-offer bidding war over a 5-bedroom, fully renovated house in Lawrence Park (on Melrose Ave). The listing price for this house was $995,000, and it sold for $1,162,000.

Now, fast forward almost exactly 2 years to today, and take a look at a $949,000 listing on Melrose Ave:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=13101048&PidKey=1528052453

Notice that this is a 3-bdrm, never-renovated, possible teardown… for almost the exact listing price as a 5-bdrm renovated house one block over!!!

So – what’s your take: were we all just crazy/naive for thinking that the bidding war frenzy over 51 Melrose Ave was “risky” in 2011?

Given that someone will likely be spending $1M on a dump like 118 Melrose Ave this week, it is pretty clear that 51 Melrose was a *relative* bargain at $1.16M (as insane as that sounds).

#138 al on 04.25.13 at 12:37 pm

#105 GTA Girl
“..Unless there is collusion on a mass scale of condo owners ..” – there is a collusion, on craigslist one bedrooms go from $1500 to $1800, two bedrooms for $2500.

the thing is, if that what they want it does not mean it is realistic or sustainable.

some folks will rent for these amounts, but median wages in GTA is less than $4000 per month, and family income is under 80K.

if one pays over 1/3 of the income on rent, it is overpriced for that person.

to pay $1500 a month for a studio, you’d need to be making $100k per year and may as well buy the place.

in the last 10 years “the investors” bought condos to rent out, but if $300k mortgage costs say $1500 a month to service, add $500 in maintenance fees etc – you’d have to charge $2000 just to break even, there is a limit somewhere.

the hottie in the article splits the rent with boyfriend, what if a couple splits up, what kind of a mess is that?

whatever the owners want to charge, people are not going to pay, let them want what they want and keep paying the mortgage and maintenance on empty units in the meantime.

#139 JohnnyNo5 on 04.25.13 at 12:39 pm

“He’s the man who invented 0% down payments, created 40-year amortizations, doubled the amount of mortgage insurance available, allowed the banks to give deposits to buyers without money, brought in new tax credits to encourage the virgins and told everybody things were different here. Then he changed his mind and took it all back. In Canada, we call this decisive leadership.”

LOVE THIS! so true

#140 Bottoms_Up on 04.25.13 at 12:48 pm

#93 VanPerfecto on 04.25.13 at 1:57 am
—————————————–
Although this is just conjecture, my assumptions would be that the CRA would first rely on voluntary disclosures of foreign income. Secondarily, they would tackle those files that are suspect (maybe they received tips, or put two and two together and realize the person that claims $16,000 in yearly income but pays $50,000 a year in property tax must either be independently wealthy or have other sources of income).

#141 bill on 04.25.13 at 12:49 pm

#85 VancouverJoe on 04.25.13 at 12:36 am said:

” G…c’mon……mythical HAM?????? It’s official dude…..HAM is the majority in cities like Richmond BC…not a few G……not thousands G…..many hundreds of thousands….so many hundreds of thousands that they original inhabitants are now officially an official minority…….”

hey joe …MANY hundreds of thousands????
get a grip on reality:
…..Canada 2006 Census Population % of Total Population of richmond bc:
Ethnicity group
Source:[11] Chinese 75,725 43.6
White 59,335 34.2
South Asian 13,860 8.0
Filipino 9,555 5.5
Japanese 3,230 1.9
Mixed visible minority 2,745 1.6
Southeast Asian 1,480 0.9
Black 1,390 0.8
Korean 1,290 0.7
Latin American 1,265 0.7
West Asian 1,155 0.7
Arab 960 0.6
First Nations 700 0.4
Métis 495 0.3
Other visible minority 295 0.2
Inuit 10 0
Total population 173,565 100

#142 Al on 04.25.13 at 12:57 pm

The vultures have been waiting a long time.

#143 T.O. Bubble Boy on 04.25.13 at 1:04 pm

… oh – and the $949k for 118 Melrose again proves my theory of ‘unintended consequences’ from the Flaherty decision to put the $1M purchase price cap on CMHC-backed mortgages.

Any SFH — no matter how much of a tear-down — in Midtown Toronto will be priced around $950k-$999k, as that is the maximum purchase price allowed for CMHC-insured (sub-20% down) mortgages.

#144 Loopback on 04.25.13 at 1:13 pm

The vultures have already landed! Bulk 1,400 properties bought in Atlanta. Welcome to the foreclosed renter society. Bloomberg

#145 NRI13 on 04.25.13 at 1:14 pm

#129: Temple, thanks. Appreciate your response.

I rent in a new building as well (apparently, in words my mom..me renting shames the family go figure) and my rent did go up by only by 2.5%..that had me thinking about my current place.

#146 Smoking Man on 04.25.13 at 1:16 pm

Turner nation, don’t quite follow what your saying.

How do I make my profit tax free.. Re forex trading.

My account a lush he’s no help other that a wing man at pub

#147 jess on 04.25.13 at 1:21 pm

don’t forget to mention tyrants along side with vultures

Angola deal to repay debt to Russia exposes EU tax havens
Case provides vivid example of plundering that can take place in developing nations with complicity of European banks and tax havens

http://www.osisa.org/sites/default/files/the_corrupt_russian-angolan_debt-deal-executive_summary-04-13-2013-for_web.pdf

…The report provides a detailed account of the web of financial transactions involving Angola’s $5bn (£3bn) debt to Russia, which evolved into the diversion of hundreds of millions of dollars of public funds to middlemen and senior government officials.

Millions of dollars were transferred through banks based in Switzerland, Luxembourg, Cyprus, the Netherlands, the British Virgin Islands and the Isle of Man to the benefit of powerful Angolan and Russian figures, the report shows.

As Feinstein explained, it had been much easier to trace the Angolan officials who benefited from the criminal transaction.

#148 Carson's Cellar on 04.25.13 at 1:21 pm

First time poster, long time lurcher

#105 GTA Girl on 04.25.13 at 7:52 am

A quick search on the woman profiled on the Star article indicates she works for rate_hub.ca (mortgage industry). Her twitter account references this article and she is being encouraged by people in the pre-construction condo industry. Now there’s a response from municipal and provincial saying rent control is needed for post Nov. 1991 condos:

http://www.thestar.com/business/2013/04/25/we_need_action_to_close_condo_rent_loophole_ndp_says.html

I’m thinking the original goal was to encourage condo sales since owners have carte blanche to charge renters whatever they want (what a good investment!). This appears to have back-fired

#149 Penny Henny on 04.25.13 at 1:31 pm

I just noticed in the photo.
They’re twins!

#150 deja view? on 04.25.13 at 1:35 pm

It’s time to prioritize the nightmares.. (NM)
While Garth is hammering the balance of my net worth into the ground (NM#1), I’m feverishly recaulking my boat (NM#2) before the big one hits (NM#3), all the while wondering if I can run the 3000 km gauntlet of Japenese tsunami debris (NM#4) w/o being holed (NM#5).. to escape to (NM#6)??

#151 Rainclouds on 04.25.13 at 1:36 pm

More support for Garth’s assertation re asset allocation

“While the richest 8 million U.S. families, saw their wealth soar 28% from 2009 to 2011, for the other 111 million, mean net-worth slid 4%. That’s because the richest households held most of their wealth in financial assets, while poorer folks are tied to real estate.”

http://www.canadianbusiness.com/blogs-and-comment/economic-inequality/

#152 TurnerNation on 04.25.13 at 1:46 pm

BULLISH

#153 Derek R on 04.25.13 at 1:52 pm

#97 Mr Buyer on 04.25.13 at 3:25 am wondered
So a bubble is collapsing, equity vanishing, prices are falling, people are not buying but rather waiting and renting. Why would a property owner with a massive mortgage with a monthly obligation akin to that owed to a loan shark ever even consider lowering rents? It happens and I cannot get a convincing handle as to why.

Having a massive mortgage with a monthly obligation akin to that owed to a loan shark is scary but bearable when you have a tenant to pay it. It becomes much scarier and possibly unbearable, when you do not have a tenant to pay it. Under such circumstances a sensible landlord does everything possible to attract and keep a good tenant, including reducing the rent. In fact if the landlord is underwater on his mortgage, can’t afford to sell and has difficulty attracting tenants, he may even accept a rent that is less than his mortgage payments on the grounds that half a loaf is better than no bread.

#154 cramar on 04.25.13 at 2:00 pm

#87 Piccaso on 04.25.13 at 12:49 am

Jarome Iginla home sold for full list price of $3.995 million
Sale after only one day listed on the market

————–

And he will probably buy a similar place in Pittsburg for half the money. Iginla is doubly laughing he was traded. Triple, if he follows this blog and knows the Edmonton dig might be worth $2 mil in a few years.

#155 Godth on 04.25.13 at 2:02 pm

Central Banks Load Up on Equities
http://www.bloomberg.com/news/2013-04-24/central-banks-load-up-on-equities-as-low-rates-kill-bond-yields.html

#156 Craig on 04.25.13 at 2:04 pm

They’re looking at it so you know what’s next

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

Lawmakers, economists spar over ‘wasteful’ US mortgage tax break

13:51 EDT Thursday, April 25, 2013

Print this article

By Kim Dixon

WASHINGTON, April 25 (Reuters) – The popular U.S. tax deduction for mortgage interest is wasteful and does little to spur home ownership, economists from across the political spectrum said at a congressional hearing on Thursday, but many lawmakers mulling a tax code overhaul were having none of it.

Congress is scrutinizing many tax breaks, including the one enjoyed by about 40 million Americans – mainly middle-class voters – for the home mortgage interest they pay.

The value of the deduction collectively is about $100 billion a year, according to the congressional Joint Committee on Taxation.

Experts from a free-market think tank, a liberal-to-centrist group and other organizations mostly agreed that the mortgage deduction is inefficient because it encourages debt and disproportionately helps those in the highest income brackets.

At the hearing, many lawmakers from both parties were skeptical of the economists’ arguments, however, and warned against scrapping the tax break as a way to lower tax rates.

“Would it be just for us to say to working families, to middle-class families, that we are going to snatch the rug from under you?” said Representative John Lewis, a Democrat from Georgia.

As Congress inches toward possibly revamping the tax code for the first time since 1986, a wide range of tax breaks is being examined. In the House of Representatives, efforts are being led by Michigan Republican Dave Camp, chairman of the tax-writing Ways and Means Committee, which convened the hearing.

Eric Toder, an economist from the liberal-leaning Urban Institute and centrist Tax Policy Center, and Mark Calabria, an economist from the free-market think tank Cato Institute, both said the deduction is bad policy.

“Both theory and available evidence suggests it does little to encourage home ownership, but instead mostly encourages upper-middle households to buy larger and more expensive homes,” said Toder.

Calabria, who backs scrapping the tax break altogether, said that a decline in housing prices would soften the blow.

“I’d rather pay less for the house quite frankly,” Calabria said. “It is a subsidy for debt, not home ownership.”

Representative Pat Tiberi, an Ohio Republican, cited his experience as a real estate agent to challenge some of the economists who spoke at the Ways and Means hearing.

“Never once did I have a client say to me, ‘I want to buy this house because I can get a higher mortgage interest deduction,’ ” Tiberi said.

SECOND HOMES A COMPLEX ISSUE

The maximum amount of eligible mortgage debt for the deduction is currently $1 million for either a first or second home, or even a boat, and up to $100,000 on home equity loans.

Rob Dietz, an economist with the National Association of Home Builders, said the second-home issue is more complicated than it appears because many of the wealthiest owners of second homes own them outright without a mortgage.

“When most Americans think of second homes, thoughts typically go to expensive beach homes,” Dietz told the panel.

The average household income of those who have a mortgage on a second home was about $71,000, according to the analysis by the National Association of Home Builders.

A December 2010 deficit-reduction study known as the Simpson-Bowles report proposed lowering the limit on eligible mortgage debt to $500,000, as well as killing the deduction for home equity loans and second homes. The report was commissioned by Obama, but he did not embrace it.

#157 CalgaryBoomer on 04.25.13 at 2:06 pm

Dunno, Calgary didn’t get the memo yet. Still seeing lots of new sold signs. I’m believing the story on lower inventories…of good houses! Anything decent seems to be moving quickly, rest are dogs and priced too high, fishing. You can’t just look at a yoy comparison because there could be reasons for that, like inventory. I know what a slowdown looks like here and this ain’t it. Not that it may not happen soon, things can turn quick. And no, I’m not a realtor.

Does anyone think Calgary’s attempt to halt outward expansion can/is raising prices?

#158 Humpty Dumpty on 04.25.13 at 2:06 pm

Looks like these guys are planting a new garden…..

CHINA, FRANCE VOW TO PROMOTE ‘MULTIPOLAR’ WORLD

“China and France both want a multipolar world. We want there to be a balance. We refuse a world of powers, and of superpowers,” Hollande said. “When China and France agree on a position, we can drive the world.”

http://hosted.ap.org/dynamic/stories/A/AS_CHINA_FRANCE?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2013-04-25-06-37-04

#159 Arshes on 04.25.13 at 2:15 pm

#97 Mr Buyer
“The whole rent falling with the collapse of a real estate bubble thing has been a bit of a mystery to me.”

Demographics are part of the reason, go growth in Japan in another, supply and demand in another. Alot of people may rent, but that doesnt necessarily mean that demand exceed supply.

#160 Arshes on 04.25.13 at 2:15 pm

Opps “no growth”

#161 happity on 04.25.13 at 2:22 pm

The stock market is goosed because central banks are loading up.

http://www.bloomberg.com/news/2013-04-24/central-banks-load-up-on-equities-as-low-rates-kill-bond-yields.html

#162 happity on 04.25.13 at 2:33 pm

Bubble Maker in Chief?

“Carney said Bank of Canada officials “reached over the heads of commentators and spoke directly to Canadians” about the low cost of borrowing, persuading them to spend and boost growth.”

http://www.reuters.com/article/2013/04/25/us-britain-carney-idUSBRE93O00020130425

#163 Old Man on 04.25.13 at 2:43 pm

The plumber and his assistant are here and my landlord is flipping out, as all the plumbing under the kitchen sink needs to be replaced. LOL

#164 Craig on 04.25.13 at 3:04 pm

More Signs of Economic Weakness: Where to Place Your Money

Apr 25, 2013

More Signs of Economic Weakness With the stock market at all-time highs, the momentum has been built on the belief that an economic recovery is close at hand and the world will avoid a global recession. However, new data show that perhaps this belief might be too optimistic.

Markit Economics has just released the Purchasing Managers’ Indexes (PMIs) for many nations and economic zones around the world. Frankly, the data are quite bleak, showing that an economic recovery is certainly not occurring anytime soon, and that a global recession is becoming a distinct possibility.

http://www.investmentcontrarians.com/recession/more-signs-of-economic-weakness-where-to-place-your-money/1908/?subid=taboola

#165 dv8 on 04.25.13 at 3:10 pm

No oney down mortgages are making a comeback in america lol we all know how that ended the last housing bubble lol
http://articles.marketwatch.com/2013-02-01/finance/36675179_1_borrowers-investment-portfolio-citi-private-bank

and here

http://www.cutimes.com/2013/03/27/no-money-down-mortgages-stage-a-comeback?ref=hp

#166 I am in C on 04.25.13 at 3:22 pm

Here’s the email I sent to Susan Pigg regarding here column today re renters:

Ms. Pigg

In todays article you profile an individual facing a large rent increase

Is this the individual’s cv?

http://ca.linkedin.com/in/klmcallister

http://www.ratehub.ca/about-ratehub

She appears to be employed by a company that sells mortgages.

Not very appropriate featuring her in an article about issues surrounding renting

If she replys , I”ll copy you

#167 Old Man on 04.25.13 at 3:30 pm

Now for you that own homes in Ontario will give you a tip from the plumber, as plastic piping can no longer be used anymore, as it now violates the fire code because of deadly fumes. I am not out of the woods yet, as one piping piece had to be ordered from a wholesaler, and hopefully will come in tomorrow at 8:00 AM or will be out of business for days, as all has been shutdown :(

#168 jess on 04.25.13 at 3:46 pm

…geez those bank types must think canada is the new switzerland due to those high net retiring boomers

Private Banker Internationalwww.privatebankerinternational.com/CachedCanada: the new Switzerland? 02 April, 2013 … Marina Daras finds that offshore investors, who traditionally may have had their assets in the… Rolling with the …

#169 jess on 04.25.13 at 3:47 pm

159 Humpty Dumpty

all those investigations going on with those politically exposed people….

http://www.parisschoolofeconomics.eu/docs/zucman-gabriel/revised_jan2013.pdf

since this … http://en.wikipedia.org/wiki/Bettencourt_affair

For the private Geneva-based financial institution that Cahuzac used to manage his funds hidden abroad, Reyl & Cie, is alleged by several sources contacted by Mediapart to have provided its discreet services to other French personalities – including senior political figures
=============
treaty shopping
The End of Bank Secrecy? An Evaluation of the G20 Tax Haven Crackdown
New study – the first attempt to assess how bilateral treaties affected bank deposits in tax havens – lends support to a multilateral agreement on tax havens. Rather than repatriating funds, the results suggest that tax evaders shifted deposits to havens not covered by a treaty with their home country.
http://www.financialtaskforce.org/category/blog/
http://www.financialtaskforce.org/

#170 -=jwk=- on 04.25.13 at 3:50 pm

@Craig #106.

Get Real.

Fear mongers; ” the same thing that happened in the US will happen here.”

BS

Their banks loaned $Billions to people who were unemployed, min wage earners and created a fantasy mortgage scheme called ARM’s ( If I recall)

Same as here. execpt in the US Adjustable Rate Morgtages aka ARMs were only a small percent of borrowers. In Canada Everyong gets an ARM!

Our Banks are ranked at the top in the world. Far from perfect but stable. I do believe a RE correction is coming but not a meltdown in RE / banks, etc.

So were America’s before the melted down.Record profits, record bonuses, record share prices for major US banks. Sound familiar?

That is simply people trying to scare other folks into doing something irrational.

thworing away your downpayment and all that interest to the banks i s’rational’?

Like this debt ratio report for Canadians. Where is this report and has anyone drilled down into the data to confirm it’s legit?
the same report they have been using for 50+ years. Now you question it?

Get real, it will happen here. everything is in place.

#171 DreamingIntechnicolour on 04.25.13 at 4:00 pm

Expect to see a lot more vehicles with BC License plates on the streets in Calgary and Edmonton if the NDP win the Election in May

#172 Smoking Man on 04.25.13 at 4:13 pm

#156 Godth on 04.25.13 at 2:02 pm

Central Banks Load Up on Equitieshttp://www.bloomberg.com/news/2013-04-24/central-banks-load-up-on-equities-as-low-rates-kill-bond-yields.html

……….

They are buying apple…..

#173 Old Man on 04.25.13 at 4:18 pm

I throw up a hypothetical involving Real Estate for the Province of Ontario and perhaps elsewhere. I for one can do any renovation myself, but never knew about the plastic piping was illegal in a kitchen or bathroom or anywhere else, as it violates the fire laws.

So what if a young married couple bought a modest cottage for example and they were savy enough to do their own renovations with improvements from time to time; it is lots of fun, and used plastic plumbing for a new bathroom or kitchen. The cottage would be insured against a fire, and if such occurred an adjuster would come out to investigate.

Now if he saw plastic plumbing being used at this small modest retreat, would the insurance policy become null and void? I say maybe!

#174 Mr Buyer on 04.25.13 at 4:53 pm

#160 Arshes on 04.25.13 at 2:15 pm
#97 Mr Buyer
“The whole rent falling with the collapse of a real estate bubble thing has been a bit of a mystery to me.”

Demographics are part of the reason, go growth in Japan in another, supply and demand in another. Alot of people may rent, but that doesnt necessarily mean that demand exceed supply.
…………………………………………………………….

Demographics: aging with low birth rate
supply and demand: widespread multi-generational households attenuate demand somewhat but demand is still very large

#175 Craig on 04.25.13 at 4:55 pm

145 Loopback on 04.25.13 at 1:13 pm
The vultures have already landed! Bulk 1,400 properties bought in Atlanta. Welcome to the foreclosed renter society. Bloomberg

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

“”The private-equity firm, which has spent more than $4 billion on 24,000 rental properties in the last year making it the largest buyer in the U.S., purchased the residences from Building and Land Technology, said Marcus Ridgway, chief operating officer of Invitation Homes, Blackstone’s single- family rental division. “”

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

How many other companies are buying in bulk? Now do the math on per house cost average. Very low. So when reports come out saying the US Housing Market is rebounding….be careful with any number out of the US.

They’re buying them at cents on the dollar because no one else is buying them

The strengthening US Economy is a house of cards = BOGUS numbers.

You watch.

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

” Investor buying has pushed up prices, with values in Atlanta surging 12.4 percent in the year through February, CoreLogic Inc. reported this month.”

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

And when these Private Equity Funds stop buying….timberrrr.

The US Economy I think is a mess and will head into a recession like they’ve never seen before.

This stuff you read is all smoke and mirrors.

#176 Old Man on 04.25.13 at 5:30 pm

Now the plumber that came to my residence was top end, as his boss is worth at least $200 million with office and apartment buildings. This guy was about 31 years old, and his assistant was a young lady; a wife, girlfriend or an apprentice. They were both tops with the words like two diplomats, and this guy was too handsome for any household job.

Now, have never seen in my life two professionals in this position who knew what to do and say for a client, as we had a meeting of the minds. I said see this and he said that is normal, and said no way, and he knew I was no fool; so we all had a good laugh. I checked out all the major stores in Ontario and they are still selling plastic plumbing piping that is illegal against all the fire codes, so say WTF?

#177 TEMPLE on 04.25.13 at 5:41 pm

#146 NRI13 on 04.25.13 at 1:14 pm

#129: Temple, thanks. Appreciate your response.

I rent in a new building as well (apparently, in words my mom..me renting shames the family go figure) and my rent did go up by only by 2.5%..that had me thinking about my current place.

Small or no rental increases has been my experience, too. When I lived in Ontario (both Toronto and Ottawa) in 1995-1997 and 2005-2012, my landlords never raised rent by the maximum amount. Most years had no increase, and other years it was always less than the maximum. Two percent was about the biggest increase I ever saw. Living in BC, I went years without an increase (Victoria, mostly) as well.

Anyways, I think good landlords value good tenants more than most people realize. Squeezing a good tenant for rent just makes the tenant move, and the landlord incurs the risk of an empty unit. Not to mention all the work involved in preparing the unit and screening tenants.

A friend of mine owns 8 or 9 rental houses and he deliberately keeps rent lower than market for good tenants because the hassle-free cash flow is more important to him than grinding out a few extra dollars.

TEMPLE

#178 n1tro on 04.25.13 at 5:54 pm

Central banks buying equities to prop up stock markets so the masses believe everything is “OK”….

http://www.bloomberg.com/news/2013-04-24/central-banks-load-up-on-equities-as-low-rates-kill-bond-yields.html

Isn’t that like buying a house in Vancouver after seeing the global news story of the asian in the yellow helicopter buying up property?

#179 Dr. Hoof - Hearted on 04.25.13 at 6:11 pm

#172 DreamingIntechnicolour on 04.25.13 at 4:00 pm

Expect to see a lot more vehicles with BC License plates on the streets in Calgary and Edmonton if the NDP win the Election in May.

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

There is desperate …..and then there is DESPERATE….like hell freezing over and Leafs win cup

#180 Timbo on 04.25.13 at 6:24 pm

http://www.kansascity.com/2013/04/25/4202036/kansas-city-fed-regional-manufacturing.html

“An index of manufacturing conditions released Thursday by the Federal Reserve Bank of Kansas City showed a reading of minus 5 in March, which was an improvement from minus 10 in February. However, the latest data represented a step back from January, when the index had a reading of minus 2. The index measures production, new orders, employment, raw material inventory and supplier delivery time.”

hard to stay positive with all these negative vibes……

http://www.bloomberg.com/news/2013-04-25/blacktone-buys-atlanta-homes-in-largest-bulk-rental-trade.html

“The private-equity firm, which has spent more than $4 billion on 24,000 rental properties in the last year making it the largest buyer in the U.S., purchased the residences from Building and Land Technology, said Marcus Ridgway, chief operating officer of Invitation Homes, Blackstone’s single- family rental division. ”

This is going to end well. Corporate overlords controlling the rental market….what can go wrong….

#181 Old Man on 04.25.13 at 7:02 pm

The rental scenerio in Ontario is a factor of age in any apartment building with an increase in rent, as some are covered with rules, and some are not. Now with my landlord he cannot increase my rent too much, unless he goes to the rent review board with a sad luck story about all the money he has spent with tears in his eyes, as my last rent increase was about $34.00 a month, and warned him not to hoop me, or will move out.

#182 Old Man on 04.25.13 at 7:26 pm

Now want to clarify this all for you, as have an old lease in place that never renewed, as went legally month to month. Now in Ontario the rules changed a bit that a renter or a landlord could negotiate the rent payable, but not on my page, as this was all bs to control a market rate against the renter. I have my landlord by his rocks, as he is under the old rules to raise my rent a bit each year with an inflation index, and sit back in my modest penthouse to look out at the city lights on my patio.

#183 Daisy Mae on 04.25.13 at 7:29 pm

“I’m betting many people in the world will wonder how Canadians could watch their American neighbours self-destruct, snicker, then do the same.”

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Maybe Europe is having second thoughts re Carney….?

#184 Daisy Mae on 04.25.13 at 8:21 pm

#172 DreamingIntechnicolour: “Expect to see a lot more vehicles with BC License plates on the streets in Calgary and Edmonton if the NDP win the Election in May…”

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Well, let’s face it. If ANY of these parties win, we’re facing more disaster. How much can we take?

#185 Daisy Mae on 04.25.13 at 8:44 pm

“…as opposed to the 10% which actually makes stuff.”

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This is so sad. Canada doesn’t need anyone. We have everything we need, right here.

#186 Daisy Mae on 04.25.13 at 8:53 pm

Being a financial advisor, along will all your other credentials, this entire sordid mess must make you absolutely….what word could possibly describe? Absolutely unbelievable.

#187 Doug in London on 04.26.13 at 4:00 pm

Wow, a third of the entire economy came to be comprised of real estate-related activities, as opposed to the 10% which actually makes stuff? That means the economy is going to really going to take a beating with what’s coming. Not only that, but it appears most people don’t see it coming. As for where to invest your money, you’re probably safe with Canadian equity funds like XIU and, according to Uncle Garth, REITs will probably weather the storm. What you should AVOID is home builders stocks, unless they have a lot of U.S. exposure. Does anyone remember what the last real estate bust did to Bramalea Inc in 1995? That could be a forewarning of what’s coming.

Hey, it’s a nice day, so it shouldn’t be all doom and gloom. Those companies complaining they couldn’t get people with construction trades experience won’t have that problem for much longer!