‘The day it died’


In 2008, GTA realtor Ross Kay invented an ‘engagement index’ to statistically chart house horniness. For five years he’s been diligently amassing data, filtering and weighting it, and watching in fascination as 60 to 90 days later changes in his index appeared as official published real estate data.

His track record (he says): 100%.

ross kay  Hours ago he released what he considers ‘drastic’ results, in a warning to his clients. “Over the course of the last 9 weeks, our index has revealed a downward spiraling real estate marketplace, with results that will not reveal themselves in MLS sales data until finally reported by Organized Real Estate Associations,” he wrote on his site.

In a note to me, he adds:

“On May 19th, 2013 we recorded the lowest value of Canadian consumer engagement in real estate since 2010.  What is scary here is that on April 8th 2012, we reached an all time high engagement value.  The May 19th numbers for 2013 represent about a 72% decline over that peak number.   This massive decline raises grave concerns not being reported in newspapers across the country.

“So we project 60 to 90 days from May 19th that MLS sales will be reported that will reveal the market died on May 19th. Our numbers have not been wrong since 2008. So as it turns out the peak of the real estate market in Canada was April 8th 2012, as posted here on Greater Fool.  Peak pricing was established and as recorded MLS sales prices now show, anyone who bought in competition around that date paid too much.”

Is this credible? Obviously we’ll find out in a couple of months, but it’s consistent with the market news reported here daily. Fewer buyers are chasing fewer houses, rendering average prices almost irrelevant – certainly eliminating them as a leading indicator. The overwhelming advice to potential buyers: don’t.

Meanwhile, here’s Claude. He moved back to Canada after living in China for several years. He landed in Vancouver, and was struck by this big slowdown in the real estate market, but not a corresponding drop in prices.

Real estate’s sticky. Once prices in a hood go up, everybody living there figures the new valuation ceiling is suddenly the floor. An instant permanent benchmark is established and homeowners great creamy thinking about their windfall net worth. But when markets turn ugly and sales slide away, human nature says the reversal’s temporary. Listings fall as owners wait for bull conditions to return, and those people selling stick to their pricing, because ‘that’s what it’s really worth.’

This can go on for a long time. Six months. A year. But once it becomes obvious the market may continue to weaken, rather than recover, prices tumble and listings swell. Have no fear. This pattern will repeat.

But Claude’s eyes bring another valuable epiphany. He writes me:

I also observed upon my arrival in this city that even though small bungalows were searching a million or so, Vancouver was the home of many ‘dollar’ stores and food discount stores. I had lived in China for several years prior to coming back to Canada and the city where I lived there was crowded with Benzes, Audis, BMW, a young man who lives in my building even owns a yellow Ferrari. Also that City ( Guangzhou) is the host of  many luxurious shopping malls occupied by very expensive stores, such as Hermes, Dior, Chanel, Louis Vuitton to name but a few.

My observations in Vancouver were that the majority of cars were, Hyundai, Chevrolet, Nissan, nice but ordinary cars. This didn’t add up in my eyes. How can a city with so many expensive houses  be inhabited by people driving ordinary cars and shopping in discount stores? Vancouver doesn’t in my opinion project an image of wealth there.

Could it be that people here kept buying each other’s houses, creating an artificial demand for properties? If this is so, then someone is without any doubts going to be left holding the bag. Could you comment on this?

He’s right. Many a time has this pathetic blog compared and contrasted the average household income in Van ($83,300) with the cost of the average SFH ($1,100,000). The latest RBC home unaffordability survey shows it takes close to 90% of pre-tax family income to buy a bungalow in that city. And BC has had a negative savings rate ever since the median detached house passed the seven-figure mark. Currently folks in the province spend an average of 108% of income, and are so invested in real estate that it’s turned into a Kia and Wal-Mart paradise.

Making things worse is the urban myth that foreign money’s been responsible for jacking Van prices. Now every time eight Chinese-Canadian couples born in Richmond line up for a new condo opening, we get a “HAM alert”, suggesting an Airbus full of horny industrialist millionaires from Guangzhou has landed at YVR. But while some Mainland Chinese dudes have scooped higher-end properties around the city, there’s zero evidence it’s been enough of an impetus to boost market values. Claude’s correct. This is a Van-on-Van creation (as is the case in Victoria), aided and abetted by the country’s most gullible and bush-league media.

How will it end?

That’s easy. Prices will indeed fall considerably, and stay low a lot longer than many owners will stay solvent. People will look back at 2010 and 2011 – when speculation was rampant, realtors cried ‘buy now or buy never’ and a yellow peril was invented to whip the locals into a buying frenzy – in awe. This was right out of the Phoenix playbook, circa 2004.

There’s simply not the income in Vancouver (or Toronto) to support current prices. Homes have climbed a wall of debt. Without a giant leap in household earning, it’s a mirage.

May 19th. Write it down.


#1 AK on 05.29.13 at 8:30 pm

Buffett’s Berkshire buying NV Energy for $5.6B

Warren Buffett Latest Purchase

#2 Mark NS on 05.29.13 at 8:32 pm

Interesting reading, we are most definitely living in interesting times.

#3 The American on 05.29.13 at 8:33 pm

BINGO. Great post.

#4 timmy on 05.29.13 at 8:35 pm

There is no question that HAM has driven real estate in Vancouver to ridiculous levels. Many trades people tell stories of rich Asians paying with cash. You look around the streets and it is hard not to notice the influence. Many buy a place, set their kids up, leave and don’t pay taxes or contribute to the local economy and work back in Hong Kong.

Of course they pay property taxes, their kids buy things and support the economy, and the people who sold the real estate benefit mightily. Your prejudice is wearing. — Garth

#5 Village Whisperer on 05.29.13 at 8:36 pm

Date noted.

#6 AK on 05.29.13 at 8:38 pm

“My observations in Vancouver were that the majority of cars were, Hyundai, Chevrolet, Nissan, nice but ordinary cars.”
Disappointing not seeing KIA in his list.

#7 DV01 on 05.29.13 at 8:38 pm

FOMO on the way up…FOMO on the way down.

#8 T.O. & GTA bidding wars debunked May 29 on 05.29.13 at 8:40 pm



#9 geofferson on 05.29.13 at 8:43 pm

I sold my loft in downtown Toronto in May 2012. It was a new record for the building based on $/sq ft., and to my knowledge, has held the title. Looks like I timed it well, some thanks owed to this blog!

#10 Boombust on 05.29.13 at 8:51 pm

This whole housing bubble is soooo stupid.

How it was allowed to get to this is almost criminal.

I do think, though, that the “reality” of an unfolding “mess” is starting to penetrate into the conciousness of the “average” person.

We’ll see.

#11 blase on 05.29.13 at 8:51 pm

He’s right about people driving luxury brands, but there was a story in Reuters about Korean construction companies forcing employees to buy apartments that the public wont buy. The hot housing market has turned decidedly chilly here in Korea. One ex-pat friend who I strongly urged to not buy on a whim bought a house and a new SUV, then 6 months later bailed out of Korea after getting burned out from working too much to try and pay off the apartment mortgage. Now he’s in Canada and the apartment won’t sell. No matter what I told him about real estate, the only “fact” that would register in his brain was “renting is throwing away money”. I guess a massive downpayment and falling equity don’t count.

#12 BC_Doc on 05.29.13 at 8:56 pm

Hi Garth– can you post a link to how the index works/what exactly it measures? I’d be interested to know the basics of his methodology.

Lots of For Sale signs out here in the Okanagan now. With bond rates jumping over the past few weeks and mortgage rates following, the blood letting will soon begin. Time for RTM (reversion to the mean) which will require a huge over correction (aka collapse).

#13 Sebee on 05.29.13 at 8:58 pm

So Smoking Man, how can incomes grow when 1/2 of Europe’s youth is ready to out smoke you just for a crack at a 30k cubicle gig?

#14 Editor on 05.29.13 at 9:04 pm

Looked at a rental house in the GTA … the realtor believes in real estate over financial investments because “you can touch it.” What’s more, per said realtor, the value of owing a rental house comes not from the steady income but the capital gains.

Oh well, I guess they have to think this way.

#15 JSS on 05.29.13 at 9:05 pm

GTA realtor Ross Kay = Ron Jeremy

#16 ‘The day it died’ – The Affluent Boomer on 05.29.13 at 9:15 pm

[…] via ‘The day it died’ — Greater Fool – Authored by Garth Turner – The Troubled Future of Real …. […]

#17 lee on 05.29.13 at 9:17 pm

Sounds like hocus pokus.

#18 Big Al (New) on 05.29.13 at 9:18 pm

“of course they pay property tax” If they buy into Canada based on the investment requirements set out by the gov’t wouldn’t they also be responsible for,as owners of the home, for declaring their global income for taxation purposes. How’s that working out for them.

Are you suggesting the US do the same to Canadians owning in Florida? — Garth

#19 Bo Xilai on 05.29.13 at 9:20 pm

I think Claude should give his head a shake… I can’t get over how many Bentley, Range Rovers, high end Mercedes and BMWs I see in Vancouver. The Nillionaires love the leased Range Rovers, Bimmers and Mercs to tool around and show off to strangers. Claude should go to any other Canadian city and he’ll see there’s much more expensive steel rolling here than anywhere else (except China).

#20 blokexistentialist on 05.29.13 at 9:25 pm

Not as good as the taciturn grave marker I plan to have custom-chiselled … an after-life response to the undying nosiness of small town life:
19– to 20—
I lived my life and then I died.
Who I was in life and
what I did is none of your business.

#21 DJB on 05.29.13 at 9:28 pm

Your ceiling floor analogy can also be applied to when people buy stocks that go down in value. If they bought Blackberry at $50.00 they hold until it recovers to that price because that is what it is really worth.

#22 Uwinsome on 05.29.13 at 9:30 pm

” there’s zero evidence it’s been enough of an impetus to boost market values.”

Garth, here’s my anecdotal observations: I sold my Yaletown condo a few years ago. A young Chinese lady came in with her realtor & a young man to view my place. She spoke no English. I asked the realtor what her and her husband thought. The realtor replied that he was not the husband – he was the bodygaurd. They paid full list price, cash. The contract was faxed from her father in Shanghai.

I bought a condo in West Van. I sold it last year to another Chinese lady from Hong Kong. She rented it out. Her return was around 2% a year.

Now, I rent in Coal Harbor. The owner of my suite is from China. There are a few suites like mine for sale in the building. After paying a management company, taxes, HOA fees, etc.. I’m pretty sure he nets out much less than 2% per year.

The Parkade is full of Porsches, Audis, BMWs, Mazerattis – it kind of gives a Subaru driver a complex. The elevator in my building is the rare place where I actually see some neighbors. They say hi & bye, but mostly they speak Mandarin.

More than half of the lights in the building are turned off every night.

You can say there’s no evidence that foreign Asian money is not influencing real estate values. My reply is BS. Take a walk down Robson Street, No. 5 Road, Metrotown, Oakridge shopping mall, or the West Vancouver seawall.

#23 blokexistentialist on 05.29.13 at 9:31 pm

Not as good as the taciturn grave marker I plan to have custom-chiselled … an after-life response to the undying nosiness of small town life:
19– to 20—
I lived my life and then I died.
Who I was and what I did
is none of your business.

#24 neo on 05.29.13 at 9:41 pm


So in 90 days when real estate is seasonally weak you are going to, yet again, point out how the prices peaked in Spring? That happens every year..so what. Sell in May and go away right. Oh right, that doesn’t apply to the stock market apparently, but it will for housing and you will make a big deal about it. You are seriously grasping at straws here with this guy. Besides, prices were still higher this April than last April so how could April 2012 have been a peak in prices?

Not what he said. Pay attention. — Garth

#25 Patient in Richmond on 05.29.13 at 9:42 pm

If you drive through Richmond you will see a lot of Porsche Mercedes etc, true but you also see a lot of houses empty and a lot of houses that are in very poor condition from the outside.

I would be scared to go inside . People don’t have the money every body thinks they do . People love to “PRETEND” . there are more expensive cars in my shitty rental parking lot, then i have ever seen before . Yet i wonder WHY do people that have such an expensive car live in such an old building ?

Probably because they can not afford anything else but car payments maybe ????

The truly rich dont show their wealth.

#26 Gladiator on 05.29.13 at 9:45 pm

By “yellow peril” you mean the helicopter, I presume?

#27 PETER on 05.29.13 at 9:47 pm

“Of course they pay property taxes, their kids buy things and support the economy, and the people who sold the real estate benefit mightily. Your prejudice is wearing. — Garth”

Of course Garth! Free education, health care, old age pension down the road as well. Nice eh?

Hater. — Garth

#28 T.O. Condos 4lease and 4sale -top N above 15 units per building on 05.29.13 at 9:47 pm

I will soon be able to add more info for these


#29 Notta Sheeple on 05.29.13 at 9:48 pm

How about that?

An honest GTA REALTOR® (notta TURD), nottafraid to speak the facts. Who knew? Yes Virginia, there is a Santa Claus.

Maybe he’ll have the balls and integrity to run against a crackTURD® mayor, or even better, a HarpoTURD®.

#30 T.O. Bubble Boy on 05.29.13 at 9:51 pm

Are we all slaves to the banks? This 12-year-old girl explains why Canadians and the Bank of Canada are getting screwed:


Old. Discredited. — Garth

#31 Smoking Man on 05.29.13 at 9:53 pm

#13 Sebee on 05.29.13 at 8:58 pm

So Smoking Man, how can incomes grow when 1/2 of Europe’s youth is ready to out smoke you just for a crack at a 30k cubicle gig?


Easy, central bank have a different definition of the word inflation. When the Labour pool shrinks they traditionaly spike rates to insuring a slow down. Cause if the unemployment rate goes below 6 present the slaves have negotiation power wages go up.

Banks always spike when this happens, they are not going to do that for a while, debt needs to evaporated via wage gains, balance needs to be restored, it went too far to the other side. Corporate side. It is not sustainable.

In the last four years things have gotten expensive, no rate hike.

Inflation to central banks = low unemployment, corps bidding up wages to get Tallent.

#32 scott on 05.29.13 at 9:53 pm

Ross Kay’s site is down. I don’t think its unreasonable to suggest that his site was hacked/crashed by the PR propagandists at the CREA? Seriously, I think Comical Ali is the VP of Public Affairs for REALTORS.ca

“There are no tanks in Baghdad. There will never be a better time to buy!”

#33 What about Montreal on 05.29.13 at 9:56 pm

Garth, any comments on the outlook for Montreal?

#34 Cowpie on 05.29.13 at 9:57 pm

Garth, earlier in January you said the Great RE Melt would occur on April 10, 2013.

According to Ross Kay, you were 2 days off. Not too shabby.

Can I borrow your crystal ball? I could use some advice on which Lotto numbers to pick.

#35 AisA on 05.29.13 at 9:57 pm

The greater the rise the greater the fall. This will be epic. Soft landers, Muahahahaha.

Or of course, the average salary in Vancouver will become 300k a year by ….. TOMORROW.

Malarky prices on Malarky homes paid for by people full of hubris and you guessed it, MALARKY.

OH it feels good to have retained sanity.

#36 In Mississauga on 05.29.13 at 10:02 pm

Not sure why the link to Ross Kay’s site does not work. Did you scare him Garth???

The link is fine. I just think his site is being swamped. — Garth

#37 Sebee on 05.29.13 at 10:04 pm

So inflation, and with it up goes the income as raises are inflation adjusted. But so are those pensions for the flood of seniors – and various government obligations. Not a concern?

What’s your ETA for this inflation?

#38 Cowpie on 05.29.13 at 10:04 pm

#26 PETER on 05.29.13 at 9:47 pm
“Of course they pay property taxes, their kids buy things and support the economy, and the people who sold the real estate benefit mightily. Your prejudice is wearing. — Garth”

Of course Garth! Free education, health care, old age pension down the road as well. Nice eh?

…Peter. May we assume you are of First Nations descent?

If not, perhaps it would be appropriate to point out –
at some point, WE. have. ALL immigrated here!

#39 Yellow rox rock! on 05.29.13 at 10:05 pm

HAM may be overemphasized in some respects but it does exist. Wasn’t it you, dear Mr. Turner, who coined that term?

#40 Tom Vu on 05.29.13 at 10:15 pm

Not much here…just a bunch of sissy Biker wannabees

#41 Hey Garth here are the stats as I collected them- THE GUY IS RIGHT on 05.29.13 at 10:19 pm

I have no idea what index he is compiling but yes the numbers look real !!


(please delete the other message, it had a typo)

#42 timmy on 05.29.13 at 10:20 pm

According to the Case Shiller Index homes in 20 major cities are up, anywhere up to 20 percent. What is interesting is the large increase in San Francisco. If a city as expensive as San Fran can increase that much despite the economy, just think of the likelihood of Vancouver prices falling significantly for the long term

#43 timmy on 05.29.13 at 10:24 pm

RE #22 or Richmond, Westwood Plateau, East Van, Kerisdale, Point Grey, need I go on? It is nothing for many of these folk to pay cash for a condo in Vancouver, and many of them do. It is just that no one is willing to discuss this issue for fear of not being politically correct.

#44 ben l on 05.29.13 at 10:28 pm

Sold my house in N. York for an ungodly sum recently. Wife and I decided to move downtown and rent for a few years. Went to the new Shangri La condos and looked at some units to rent. While the hotel was rocking, the condos were dead and mainly seemed empty. The agent said that there were 22 condos for rent currently and a ton for sale. Rents for $2 million condos were in the $5000 asking range, but the agent said that $4000 would be possible with a serious offer. Considering maintenance fees and property taxes, the negative cashflow would be horrendous. Some of the for-rent units were empty for 6 months+ (days on market)! It really was an eye opener, and the agent said that they turned out to be a pretty poor investment for the purchasers. Looks like the high end of the condo market is feeling some pain already.

#45 Smoking Man on 05.29.13 at 10:28 pm

#199 Cici on 05.29.13 at 7:18 pm

#63 Smoking ManThat sounded like a lecture; are you sure you aren’t jealous of teachers? I think you secretly want to be the rector of Smoking Man U.Anyways, I think you are jumping the gun a bit if you are assuming from my comment that I am in full support of everything Israel or any other nation does, or that I am for or against any other.I don’t fund any cause that is not 100% devoted to improving the lot of this world for EVERYONE; and I do not buy into any one religion, culture, society or country, although I respect and am fascinated by them all.If that makes me a slave or idiot in your eyes, or anyone elses…so be it. I really don’t care because I’m that much of a FREEthinker.


I’m not a teacher, I’m a educator, big difference, I do it for free…

The fact that you understood my cryptic roger waters comment tells me you are well rounded and knowledge.

I’m not fascinated with culture, or religion or any other venue where people are forced to toe the line to fit in. To be part of the group, intentions are good at start but always descends into us vs them.

I hate that…

#46 kc on 05.29.13 at 10:30 pm

“American” from yesterday.

thanks for all the information. What you said about the SFH vrs. condos is about right on the mix for the west. One of our salesmen went east last month and said that it is more of the multi builds that are going up compared to the sfh.


ps I love seattle when we drive south down the I5. Don’t get there enough though.

#47 observer on 05.29.13 at 10:33 pm

#4 timmy on 05.29.13 at 8:35 pm

There is no question that HAM has driven real estate in Vancouver to ridiculous levels. Many trades people tell stories of rich Asians paying with cash. You look around the streets and it is hard not to notice the influence. Many buy a place, set their kids up, leave and don’t pay taxes or contribute to the local economy and work back in Hong Kong.

Bob Reny was on CKNW several weeks ago, he stated there was never HAM. It was Canadiens buying 2nd and 3rd properties and Developers Buying all the oldies and building new houses.

Ham was fabricated by CREA. If there was some real statistics of HAM, they would of showed it to you. There is no evidence of HAM buying everything in site. I believe the numbers were about 2% from foriegn investments. Yeah some of the high end houses were bought foriegn investment but surely not the low end and average houses.

#48 Min In Mission on 05.29.13 at 10:34 pm

Once again, simple, straight forward, and accurate.

“Claude” has made a wonderful evidence-based observation. That is exactly the situation in Vancouver.

People will consistently overpay, pay beyond value, pay beyond their means, because of the twin fallacies of “renting is throwing money away” and “real estate always goes up”

When will we ever learn?

#49 happy renter on 05.29.13 at 10:36 pm

I’ve been waiting for prices to fall in Calgary so I can buy a rental property.Instead prices are going up.I’ll buy this year because they’ll be higher next year.Garth was right ,real estate is local.

#50 StFarm on 05.29.13 at 10:44 pm

well we can later do the Calif Flip after the correction.
Flipping Homes Back To 2005 Levels

You a good one Mr Garth T.

Time to buy REITS good to tax avoidance too.

#51 Smoking Man on 05.29.13 at 10:48 pm

#37 Sebee on 05.29.13 at 10:04 pm

So inflation, and with it up goes the income as raises are inflation adjusted. But so are those pensions for the flood of seniors – and various government obligations. Not a concern?What’s your ETA for this inflation?

Soon, in Canada we take our Q’s from the USA, our Corp leaders hold there positions of influence not by merit, but by nabourhood upbringing connections.

They are not bright or creative, they follow, they where nice suits, that’s about it.

A date, 6 months after the USA dose it.

#52 Scully on 05.29.13 at 10:48 pm

HAM is not the sole reason for stupid prices in this mouldy city. Let us not not forget cheap rates, lax lending, HGTV, house horniness, the need for granite – oh baby, and speculation. To state only one factor in causing this bubble would be, well, a myth.

#53 It's About Time! on 05.29.13 at 10:56 pm

We finally have a date, May 19th, that’s wonderful. I have a sick love/hate with Toronto real estate and I can’t bearly stand it anymore. I rent but want to buy but can’t afford a box under the Gardiner prices are so STUPID. This needs to end! and like, NOW!
I REFUSE to buy in this jacked up hyped up false economy whipped up like cool whip by the greedy banks and realtor industry. PUKE!
You are right, nobody can afford it anymore! Toronto is full of average people making average pay. Who the F*** can afford $600,000 for a semi-detached crab shack on a lousy street way out at Danforth and Main? Or worse, in a farmer’s field in the far reaches of Markham?

#54 Victor V on 05.29.13 at 10:57 pm

Worried over the housing market? Five strategies for peace of mind


#55 feabitten monkey on 05.29.13 at 10:59 pm

Offshore asian money, or the resident beneficiaries of it, has definitely influenced prices to the high side in my opinion. However, you can’t say high prices are solely as a result of it. The locals are also flipping houses to each at ever inflated prices. The HAM media myth has influenced those buyers and sellers too and I would suggest to a very large degree. Greed and fear can do remarkable things to influence prices and those two emotions are not unique to where you come from.

#56 Van guy on 05.29.13 at 11:00 pm

“Of course they pay property taxes, their kids buy things and support the economy, and the people who sold the real estate benefit mightily. Your prejudice is wearing.”

— Garth

You forgot to mention they don’t pay income tax, cpp, ei, and worksafe when they work overseas. We pay the government basically everything we make. It’s like slavery.

#57 Questions on 05.29.13 at 11:05 pm

Weird. Even commercial REIT sentiment has become shaky:

#58 Smoking Man on 05.29.13 at 11:09 pm

The death of freedom is collectivism..

A mind needs to explore the limitless of going to – infinite of A to light years past Z

Your in a tribe, a group, a nation, a hard core belief… Your owned, your a dog… A slave..

99 present of the population,

I think I’m an alien, cause I don’t understand why you all do it…..

#59 CalgaryHappyRenter on 05.29.13 at 11:23 pm

I agree, we saw a lot of ‘Save On _______’ stores in BC.
Groceries: Save On Food
Gas Stations: Save On Gas

#60 A Nightmare on Bay Street on 05.29.13 at 11:31 pm

#9 Geofferson

“I sold my loft in downtown Toronto in May 2012. It was a new record for the building based on $/sq ft., and to my knowledge, has held the title. Looks like I timed it well, some thanks owed to this blog”

Well done. Congratulation.
But my toughts go to the young buyers ruined for life by your “profit”.

(yea, I know, maybe its not the case. maybe you sold it to another flipper. but in the end, this whole mess will underline the worst we are able of : throw others under the bus and feel like a genius)

(some recent buyers will receive the equivalent of a death sentence in the next months. but hey, congratulation)

#61 WhiteKat on 05.29.13 at 11:38 pm

re: #18

Most Canadians owning US real estate know about the ‘substantial presence test’ where:

“A non-resident who was physically present in the United States for a total of 183 days during a calendar year clearly meets this test and will be taxed as a US resident.”

However most Canadian owners of US real estate don’t know that:

“A non-resident who has spent more than thirty days in the United States during a calendar year will be deemed to have a substantial presence in the US if the sum of the following calculation of the cumulative number of days spent in the US over a three-year period equals 183 or more:

The number of days spent in the US during the current year, plus
One third the number of days spent in the US during the previous year, plus
One sixth of the number of days spent in the US the year before that
The IRS considers you to be present in the United States on any day that you are physically present in the country at any time during the day.”

The good news is that tax treaties override the definition of resident for tax purposes. If a Canadian resident (who is not a US citizen) satisfies the US substantial presence test, but is still considered a resident of Canada and not the US according to the “tie breaker” rules of the tax treaty (due to closer ties to Canada), the US cannot tax this person’s Canadian income.

The bad news is that the tax treaty simply prevents double taxation, not double reporting. The person would still be required to file US tax forms, FBAR(foreign bank account reports), and would be subject to FATCA(foreign account tax compliant act).

#62 Real Estate Expert on 05.29.13 at 11:39 pm

Plenty of Benzes and Beemers in Ditchmond!
And plenty of HAM!

#63 drydock on 05.29.13 at 11:48 pm

#33 What about Montreal.

Sure, Bill 14. That should improve things immensely.

#64 tigerbaby on 05.29.13 at 11:52 pm

> … Free education, health care, old age pension down the road as well. Nice eh?

are we still talking about the type of people who plunk down cash for multi million dollar houses?

> You forgot to mention they don’t pay income tax, cpp, ei, and worksafe when they work overseas.

Do Canadians who work overseas pay these?

#65 Kate on 05.29.13 at 11:55 pm

May 29, if I may.

#66 Nosty the Boobarian and Grantmi the IDIOT!!!!! on 05.29.13 at 11:57 pm

‘Tho Grantmi still has to figure out what a dog’s cock (exclamation point) is. Then he has to decipher the phrase IDIOT and see whether he fits the mold. May take a few lifecycles.

Smoking Man 14 min. clip. Good take on 9-11. ObL Where is the evidence that he was responsible for the attacks? He passed on into the next worlds just prior to the attacks. PMs Ever wondered why PMs are getting crushed? The chart has a good “Oh shit!” feel to it. Prost!

#67 T4 on 05.30.13 at 12:02 am



#68 not 1st on 05.30.13 at 12:07 am

So now some french guy named claude who gets hard for foreign cars and counts dollar stores is supposed to be our reliable metric on wealth and real estate. Pfft. Stay in China my friend and don’t forget to breathe in that yellow air good and deep every chance you get.

The median income in china is is a fraction of our poverty line. Foreign cars are not wealth, or indicative of anything but insecure people. They are a depreciating asset and the stupidest purchase you can make.

#69 Joe on 05.30.13 at 12:11 am

Don’t buy buy the Canadian lie, drove the Chevy to the levy but the levy was dry and the good ole boys were drinking whisky and rye singing…

#70 Ogopogo on 05.30.13 at 12:28 am

As goeth Vancouver, so goeth Kelowna. As promised, the overpriced shack whose sale asking price I so lovingly tracked last year has just reduced its price… again!

Yes, folks, for those new to this charade, allow me to explain. A greedy Kelowna flipper renovated a crack shack and set an absurd price. After wave after wave of price reductions and no bites, he took it off the market. He put it back on in March at an ever higher price than before! You’ve read it correctly. After failing miserably to sell this shack, he though maybe it just wasn’t HIGH enough.

Ok, so the latest price drop has been from the comically absurd $555,000 to the hilariously hopeful $527,700 (lucky 7s!). Let’s see how long until the next drop. Oh, and those buildings you see behind the house? They’re infested by drug dealers, meth heads and assorted miscreants.

Welcome to Kelowna!


#71 MagnumMtl on 05.30.13 at 12:44 am

#19 Bo Xilai

a lot of expensive steel in Mtl.

Must be the kickbacks.

#72 James on 05.30.13 at 12:48 am

“… You can say there’s no evidence that foreign Asian money is not influencing real estate values. My reply is BS. Take a walk down Robson Street, No. 5 Road, Metrotown, Oakridge shopping mall, or the West Vancouver seawall….”

100% true

#73 screwed on 05.30.13 at 1:00 am

BOC keeping rates low. As expected. More jawboning about rates going up at some point. I doubt it. Maintaining my prediction that rates will go down and Canada will be forced to embark on a real QE experience to weaken the Cdn$. It is a race to the bottom. A currency war across the globe. Why should Canadians be denied an opportunity to compete?

#74 Bucky on 05.30.13 at 1:01 am

Many years ago when I was last in Guangzhou there was massive hotel and freeway building everywhere while I observed – wait for it – exactly no private vehicles. Weird wheeling around on my rented iron bicycle looking at half built elevated roads going nowhere. Ironically I left Canada from Vancouver where people were driving a lot of Hyundais, Chevys, and Nissans, and real estate was jacked up because June 1997 was looming. At least Vancouver hasn’t changed much.

#75 palebird on 05.30.13 at 1:01 am

#50 give your head a shake..seriously…do yourself a big favour and do not buy in Cowtown..and if you cannot deal with renting there then move

#76 DON on 05.30.13 at 1:14 am

Smoking Man… I agree with your last four posts. It is obvious to some what is going on out there in terms of housing, people’s attitudes about stuff, lack of real analysis both numeric and human nature. So many big companies and governments are failing due to a certain degree of who you know rather than what you know. Projects failing everywhere due to lack of competence.

Good time for peoples with valid ideas and insight to start shaving away market share from out of touch companies. Behaviour can be created as you said and will be corrected.

I definitely believe I am from another planet. Catching the red eye to Pluto with a stopover on the Planet Delusional.

TO Garth: I’ve been following for a long time, never doubted this blog, even your view on gold… as shiny metals mean little to me unless I can eat it, shoot something with it, or use it as a tool.

An update from my home town: Town of Qualicum Beach (average age well over 65). BIL told me real estate is sucking wind in the retirement meca. The whole island is about retirement. Every province is well represented in Qualicum. Problem is, people are passing on. Retirement wave started back in 96 (freedom 55)…now most houses have one occupant. Overworked health care workers (simply too much demand) drive from house to house. A couple weeks back a house went up for sale for 150K in the nice part of town (starting price for a bare minimum spec house 370K+++). Realtor scooped it up, never made it to market. Adult children took the cash, 50K each, they all live in Vancouver No major industry, just retirement. Not many high paying jobs, lower number of young families. Went to visit old friends recently and the usual real estate talk focused on them questioning why I haven’t jumped in. It was the kind of questioning to that was two fold. What’s up, what do you know that I don’t. I held my tongue and played dumb, anything else would have wrecked the fishing trip. Besides I told them I was keeping my options open as I wasn’t sure where my career would end up.

You can sense it is the air, no more smug we are rich looks. At work the subject of real estate is very quiet – not a word. People even looking at the current listing sales prices on there computers.

Canada is always 5 years behind the US. Been a rule of thumb for me since my early 20’s.

Nanaimo, Courtney, Campbell River, Comox, all the same dips in real estate. Port Alberni real estate never did get out of control. It has never really recovered from the hit taken to the forestry sector.

#77 screwed on 05.30.13 at 1:15 am

40 yr mortgages were a big part of the housing boom and making house ownership a possibility for many first time home buyers. There was nothing wrong with that option in principle. The mistake was to open it and then slowly withdrawing it when many homeowners are trapped in real estate valued at levels that the property cannot be resold for again. If prices drop substantially further, there will be a glut of underwater homeowners. Any wonder why the banks are advertising to pay off the mortgage faster? Why? The values were bogus and the banks benefited. Now they drain Canada’s economy and expect people to pay the bogus debt. Good luck. If it goes down, the banks will go down and will need some form of support from the taxpayer, the government. Banks, insurance companies, pension funds etc carry real estate at unrealistic values. Their balance sheets will be upside down just as bad as the homeowners on their mortgages.

Bottom line is that the only way out for CBs all over the world is to create inflation. Rising interest rates cannot create inflation. If rates started rising every investor would expect higher and higher returns on fixed paper. That income would have to be extracted from an already shrinking economy. Good luck with that. Can’t be done and won’t happen.

Low rates and lower rates or loan write offs or adjustments.

Government and banks should be sued for allowing the “dream of home ownership” with 40 yr mortgages and distorting the market. Then changing course drastically and killing the economy. Canada’s economy will crap out in the summer. It’s noticeable how slow things are all around. Breaks have been put on. The engine is coming to a complete stop. Possibly reversing course.

Entitlements, welfare, public service sector contracts…. and so on. All will be on the table.

F. will freak out and give in. Embark on Canada’s first QE with the nod from OECD. By the way, OECD said today that Canada should keep rates low until late 2014.

We got room to go lower even. Wouldn’t hurt us one bit. The bond holders can either appreciate smaller returns or take haircuts later. Their “choice” and they know it too

#78 Tom Vu on 05.30.13 at 1:17 am

I call Bullshiesse

Ross Kay is well known soap opera star !


When actors get into real estate …..,time to fade to black!

#79 m on 05.30.13 at 1:23 am

Cars in Vancouver? Come to Kerrisdale and you will see an endless cavalcade of Aston Martins, Lamborghinis,Porsches, Maseratis, Bentleys, Jaguars (meow) the odd Rolls Royce or Tesla and way too many BMW’s, Range Rovers, Audis and Mercedes. The guy down the street has two grey Ferraris. Who has one grey Ferrari???? Volvo, Acura and Nissan all definitely down market here. There is just the one aging Toyota in the hood and the neighbours are rallying support at the block beautification meeting to have it removed from the front of my house. As long as they provide a Jag loaner, I guess I’ll be okay…, but I’ll need to get it back because I’m very attached to the old girl. No Kias allowed in the hood. They had a meeting about that.

#80 new on 05.30.13 at 1:30 am

@4 Timmy;
Many buy a place, set their kids up, leave and don’t pay taxes or contribute to the local economy and work back in Hong Kong.
Don’t you have any idea how many HK people are you talking about? For the last decade, only around 600 people, or 150 HK families each year immigrate to Canada . That means, even with 20% of them moved to BC, it was just only a handful of 30 families. And, downtown Vancouver could have snapped at best 3-5 families a year! Your landlord might have outperformed. Do you know most of the Vancouver homeowners who purchased in the past few years actually owned more than one property. And for those immigrate from HK to Canada before 1997, how many years ago are you talking about? Their “kids are already in their late 20’s to mid-30’s. Please, give me a break, sir!

And #27 Peter:

Of course Garth! Free education, health care, old age pension down the road as well. Nice eh?
Are you saying you get “free education” from your Government? You really make my day! Where are you living? Around the world, which developed countries do not provide free elementary and high school education? How about your “free university”? What makes Canada so different?

For free healthcare, you really need to dig deeper! HK have free healthcare, with no “surchage” each year which BCers are paying and medications included! Which part of healthcare available here you think will attract HK people to come. I can only see many of them move back and retire back to HK for the horrible healthcare here!

And to qualified for that old age pension, they need to lived in Canada for over 10 years before they are qualified, and over 180 days a year! HK has their own OA pension, so why would this attract them to stay unless they have friends and families already settled here and have been residents here all along?

You know what makes people to keep buying properties here – rumor, and yes, definitely greed and fear! Plus, most ethinic families only read ethnic newpaper. Those media can say whatever they want without any challenges. Other than some really rich people, most homeowners in Vancouver pay their mortgages with the help of a whole bunch of tenants, and family-tenants, and 2nd, 3rd…..family incomes. Without doubt, the young couples who jumped into the RE market, maxed out their debt in the past few years, especially for condo-buyers, for sure are gonna lose an arm or a leg or both!

#81 Kaganovich on 05.30.13 at 1:38 am

#59 Smoking man

Ha! You think collectivism is synonymous with heteronomy? I think you have to open your mind past that narrow historicism implied in that notion.

#82 Canuck Abroad on 05.30.13 at 2:09 am

57 / Van Guy – “You forgot to mention they don’t pay income tax, cpp, ei, and worksafe when they work overseas. We pay the government basically everything we make. It’s like slavery…”

But if the parents/buyers aren’t living here, why should they pay income tax, cpp or ei? They aren’t going to collect any old age or unemployment benefits if they don’t actually live here. And they are not deriving any ongoing benefit themselves like health care or education or infrastructure if they don’t live there. As buyers they do pay land transfer taxes at the time of purchase plus property taxes every year. And their children, who do live in the house and presumably work in Van, will be paying all those taxes you list. So what’s the problem? Not sure why you are so keen for people who don’t even live in the country to pay taxes here.

#83 Bubu on 05.30.13 at 2:10 am

#59 Smoking Man on 05.29.13 at 11:09 pm

Scary, but I think we are related, on the Alien side, probably reading the same alternative media as well.

Btw, I was reading the article about collectivism today, was really interesting. I had this theory for a while.

#84 Another Vancity Renter on 05.30.13 at 2:21 am

Another great post, Garth. It’s nice to have someone back up what I’ve felt in my gut about Vancouver RE with solid arguments based on the realities of economics and finance. It’s easy to feel like an outcast in this town, “throwing away” money on rent while waiting for a correction. But what the hell, as you reminded us in an earlier post, it’s about freedom rather than stuff and I still have my 20+ percent downpayment money and loads of freedom.

I think you’re right about two things in particular tonight: that the media folks here are bush league and that the HAM influence, while possibly a factor in the SFH market, is almost certainly not enough to prop up the entire Vancouver market. No, that takes a city of fools. I’ve been the fool on other investments before, but am hoping to avoid that when it comes to RE. Thanks, Garth, for beating some caution into us. I’d like to have a place of my own, but house horny I am not.

#85 betamax on 05.30.13 at 3:01 am

I work in Vancouver with about 20 people who make six figures; most of them are couples in six-figure-plus households, and I keep hearing how everyone’s living paycheque to paycheque.

In fact, I talked to someone at work today who said he had to put a $300 purchase on his credit card because he didn’t have that much in his bank account.

Most are homeowners going broke trying to live some Hollywood lifestyle they can ill afford. Even the ones who bought cheaply before the boom are racking up HELOCs because they don’t want to wait to spend their ‘equity’.

End well, it won’t.

#86 jim on 05.30.13 at 3:33 am


“Of course they pay property taxes, their kids buy things and support the economy, and the people who sold the real estate benefit mightily. Your prejudice is wearing.”

Dropping off kids and wife to collect social security and suck up benefits (while working in hong kong and not paying taxes) is an age old Chinese sport. My Chinese friends, of which there are many, freely admit to this. The Canadian-born ones think it is despicable.

Garth’s overwhelming obsequience to ethnic groups other than his own blinds him to simple truths. The spittle would fly if you pointed out that certain ethnic groups are massively over-represented in auto insurance, home insurance and medical insurance fraud. He’d deny it to the last, even though places like ICBC and Worksafe have special investigative teams with particular language skills and ties to certain communities.

I see no argument that property taxes and real estate commissions exceed social welfare costs (e.g., healthcare, education). In that case, these people are parasites.

#87 leaving vancity 2nd time for good on 05.30.13 at 3:47 am

I notice there are a lot of resentment towards the Chinese, I wonder if the hate will also apply to Caucasian immigrants? What if all the “foreigners” are all Caucasians? Will you haters shut the hell up?

Good luck getting stuck in Vancrap city!

#88 john on 05.30.13 at 4:32 am

Of course they pay property taxes, their kids buy things and support the economy, and the people who sold the real estate benefit mightily. Your prejudice is wearing. — Garth
But the issue is whether or not they pay Canadian income taxes on world wide income.
The point is that the category of ‘investor class immigrant’ is a different category from a ‘Canadian resident for tax purposes’. By the way you can be a ‘Canadian non-resident for tax purposes’ and file a Canadian tax return, or be a ‘Canadian non-resident for tax purposes and not file one’.
In a similar vein I notice that the illustrious Mark Thatcher was reported in 2006 http://www.independent.co.uk/news/uk/this-britain/sir-mark-thatcher-looks-for-a-tax-haven-home-in-gibraltar-426849.html as shopping for a tax haven to hole up with his 64million pound fortune in. In Britain they have both non-doms and non-residents http://www.thisismoney.co.uk/money/news/article-1611272/Super-rich-paying-no-income-tax.html. Goga Ashkenazi and Lev Leviev are examples of non-doms, while Sir Richard Branson (please I like Christy Clark come nude windsurfing with me) is a non-resident. As a non-resident apparently you cannot spend more than 90 days a year in Britain over four years. I just wonder who keeps count? No doubt it’s by the honour system.

#89 ben on 05.30.13 at 6:04 am

Canada third most overvalued housing:


Don’t look down! Note also Germany.

#90 Sebee on 05.30.13 at 7:14 am

Smoking man, in US real personal income fell at a 5.8pc rate in the first quarter.

#91 TurnerNation on 05.30.13 at 7:44 am

I cannot fathom people paying 800,000 for a squished-in house, up in some 905 farmers field. Say Major Mack and xxth Line. (Major-friken-Mac…!)

These days I am rarely venturing north of Queen St. in Toronto! Sometimes up to Bloor-Danforth. And if there’s life north of Eglinton I don’t need to know about it. Send the Mars or Uranus Rover.

#92 PokerCat on 05.30.13 at 7:47 am

#50 Happy renter said:

“I’ve been waiting for prices to fall in Calgary so I can buy a rental property.Instead prices are going up.I’ll buy this year because they’ll be higher next year.Garth was right ,real estate is local.”

If you’re looking solely to capital gains for your profit, you’re in for a world of hurt.

#93 Gypsy Kid on 05.30.13 at 7:55 am

Turner Nation, as a Toronto lifer, I’m rolling my eyes at your comment about possible life north of Eglinton.

I’m probably older then you and once thought like you. Now I rarely venture south of Bloor and still love this city, in spite of that stupid, nasty, idiot of a mayor.

And to all the people commenting about investor class immigrants, why blame them???? Blame your own lame-ass federal government. I’m not going to leave my front door, side door and back door wide open and cry if I get robbed….

‘Robbed’? What an unfortunate choice of words. — Garth

#94 fancy_pants on 05.30.13 at 8:14 am

#21 DJB on 05.29.13 at 9:28 pm

right, except you forgot to mention in your analogy that most bought the stock on margin (RE on mortgage) and will be forced to sell. These folks will be SOL on the ‘hold and wait till it recovers’ option.

#95 Ralph Cramdown on 05.30.13 at 8:17 am

OK, so who guessed that CIBC would be the only bank not to miss earnings estimates? Extra chutzpah points for Waugh over at BNS for blowing his first quarter but saying he’s still on track for the year.

More funnies:

Canada’s bout of disinflation leaves Ian Pollick, fixed income strategist at RBC Dominion Securities, scratching his head. Record low interest rates are no longer driving prices higher, even for the most traditionally rate-sensitive products, including cars, furniture, clothes and restaurant meals. “All those components are falling and it makes absolutely no sense.” — Obviously he’s got his, and can’t understand that Joe Howmuchamonth is about tapped out. Maybe he should ask some questions of RBC’s credit card division…

#96 Gypsy Kid on 05.30.13 at 8:18 am

#94. Garth, you are too funny…now, please do something about Rob Ford. Really.

#97 valleyrenter on 05.30.13 at 8:26 am

#60 CalgaryHappyRenter make no mistake, Save On ____ is a powerful marketing tool. Don’t think for a second that Pattison or Vandekerkove don’t have their sights squarely set on the Alberta market. Isn’t that Weston territory with Real Canadian Superstore, Liquorstore and Gas Bar? Coming soon to an Alberta town near you Save On ____! Watch for the trucks, bwahahaha!

#98 TurnerNation on 05.30.13 at 8:33 am

That silly Mint fund’s IPO launch marked a top. How’d they know? Paging Erik Splott too…
The Pied Paper Brigade.


#99 TS on 05.30.13 at 8:36 am

May 19th. Write it down.

During last weekend, over a hundred of new units sold in a grand opening, in GTA.

On sale? never heard of it.

#100 bigrider on 05.30.13 at 8:47 am

#14 Editor- ” ..the real estate agent believes in relaestate over financial investments because ‘you can touch it’ ”

Tell the RE agent to buy some shares in one of the big banks, then go down the street and ‘touch’ one of the bank branches at every corner of the neighborhood.

Better yet, tell him to buy shares in CP rail then go walk the tracks with his bare feet, a canoli and espresso in hand no doubt.

#101 bigrider on 05.30.13 at 8:51 am

#92 Turnernation

Oh boy ,another 416 snob. “I live in the CORE !!” …whoopdeedo

Why do you 416 guys feel the need to rant like this?

#102 gotthardbahn on 05.30.13 at 8:56 am

Garth –

Who cares what Claude from China thinks? He was living in a region of China heavily populated by communist party thieves, er, ‘millionaires’. Had he gone out into the countryside at least once, he would have seen peasants living in the 14th century. Something like 300 million (!) Chinese don’t even have running water or sewage systems, so please, spare us all the anecdotes of wealthy China.

You keep going on about how the economy here is crashing and taking real estate down with it. As I pointed out yesterday, your hero, ‘rock-star’ central banker Mark Carney said the economy grew better than anticipated in Q1 and he still wants to hike rates. Frankly, he has more credibility than you, sir. It is a fact that central banks around the globe are cutting rates so it really must be ‘different’ here in Canada. CAD is rallying this AM – check it out.

Finally- your guy with the prescient index – what rubbish! He can tell the high and the low to the day? How about to the hour and minute too? He should tweak this to predict the high and low on the TSX or the Dow – that’s something YOU could use!

#103 Victoria on 05.30.13 at 9:01 am

Another 100 days to wait out till the market is dead, huh? And what about the previous 100 days? October, was it, when you promised them?

The reference was to Ross Kay’s prediction. You should work on that reading comprehension. — Garth

#104 LP on 05.30.13 at 9:08 am

#87jim on 05.30.13 at 3:33 am

…The spittle would fly if you pointed out that certain ethnic groups are massively over-represented in auto insurance, home insurance and medical insurance fraud.

And you know this to be true how? Site chapter and verse from those sectors’ data please.

…even though places like ICBC and Worksafe have special investigative teams with particular language skills and ties to certain communities.

And how is that different from having English or French speaking agents who communicate with the anglo- or franco-phones in the country?

#105 lawboy on 05.30.13 at 9:22 am

#38 Cowpie

Cowpie, are you suggesting that First Nations did NOT immigrate here? Pretty ignorant of you…

#106 Toronto_CA on 05.30.13 at 9:24 am

Fresh in my inbox from ING Direct:

“Submit a mortgage pre-approval or a mortgage application between now and October 31st, and we’ll give you $600 once your mortgage funds.”

Smell the desperation.

#107 Ralph Cramdown on 05.30.13 at 9:30 am

#91 Sebee — “US real personal income fell at a 5.8pc rate in the first quarter.”

While I’ve no doubt that you believe this factoid, which seems on its face to be shocking and alarming, if you actually bothered to verify it, you’d perhaps reach a different conclusion. RPI is up compared to the first three months of 2012 and compared to September through November 2012, but down compared to a shockingly high December 2012. Did the little people all get huge Christmas bonuses last year, or did corporations pay out huge special dividends in anticipation of a January 1 tax hike on dividend income?

Now the question you have to ask yourself is whether the source of your factoid was stupid or disingenuous…


#108 Credit on 05.30.13 at 9:32 am

Old. Discredited. – Garth.

You did realize what you wrote, didn’t you?

Yup. The vid is old and discredited. What part of that do you not understand? — Garth

#109 Daisy Mae on 05.30.13 at 9:56 am

#22 Uwinsome: “Take a walk down Robson Street, No. 5 Road, Metrotown, Oakridge shopping mall, or the West Vancouver seawall.”


Talk a walk thru Metrotown in Burnaby, BC. I was born/raised in Vancouver. I’ve never seen so many Chinese. An obvious influx.

#110 cowtown cowboy on 05.30.13 at 10:08 am

#80 m on 05.30.13 at 1:23 am

M; appearances can be deceiving…..I had a neighbor with 3 Ferrari’s, one being a very rare $1mil+ enzo…he had a great house with killer views, and one day I watched as they wheeled him out of his house deader than a doornail at about 53 yrs old. He was a land developer and leveraged to the hilt, so the story goes, it most definitely did not end well for him….

Live within your means, use leverage wisely, try to enjoy what little time we have on this blue marble, and work a little harder at making this country, and this world, a better place for our kids.

#111 Dr. Hoof - Hearted on 05.30.13 at 10:17 am

#25 Patient in Richmond on 05.29.13 at 9:42 pm

Re all those fancy cars….

I have strong suspicion they are leased, not owned.
That way they can keep up appearances.

#112 Devore on 05.30.13 at 10:20 am

#22 Uwinsome

You can say there’s no evidence that foreign Asian money is not influencing real estate values. My reply is BS. Take a walk down Robson Street, No. 5 Road, Metrotown, Oakridge shopping mall, or the West Vancouver seawall.

That’s less than 1% of Vancouver land mass or population. That’s what you’re basing your “observations” on?

#113 sciencemonkey on 05.30.13 at 10:26 am

Immigration is a double edged-sword. From a personal perspective it has its pros and cons. The pros are that a) I wouldn’t be here without it (my parents came in 75 from ‘merica) and b) most of the founders of the company I work for were immigrants.

The con is that it simply represents a lot of people, taking up space, making an affordable house within a reasonable drive from work an impossibility.

#114 Daisy Mae on 05.30.13 at 10:29 am

#60 CalgaryHappyRenter: “Groceries: Save On Food”


Ever notice how Save-On inflates the price of their grocery items, only to reduce them to competitive prices only IF you use their card?

#115 :):( Ying Yang on 05.30.13 at 10:40 am

#206 Daisy Mae on 05.29.13 at 9:07 pm

#141 Ying: “Atheism or agnosticisms is a religion.”
MERRIAM-WEBSTER, religion – ‘service or worship of of god’.
Please quit with the crap…okay? It’s tiresome. Got nothing better to do?

You are correct Miss Daisy, I was merely trying to point out that a religion is a firm belief in what ever you want two worship. i.e Smoking Man could be a religion for those who follow his code of conduct. BTW here is a snippet from Merriam Webster Online. Well Shinto priests arise! Hockey is a religion!

Definition of RELIGION
a : the state of a religious
b (1) : the service and worship of God or the supernatural (2) : commitment or devotion to religious faith or observance
: a personal set or institutionalized system of religious attitudes, beliefs, and practices
archaic : scrupulous conformity : conscientiousness
: a cause, principle, or system of beliefs held to with ardor and faith
— re·li·gion·less adjective
See religion defined for English-language learners »
See religion defined for kids »
Examples of RELIGION
1. Many people turn to religion for comfort in a time of crisis.
2. There are many religions, such as Buddhism, Christianity, Hinduism, Islam, and Judaism.
3. Shinto is a religion that is unique to Japan.
4. Hockey is a religion in Canada.
5. Politics are a religion to him.
6. Where I live, high school football is religion.
7. Food is religion in this house.

#116 Rabbit One on 05.30.13 at 11:04 am

Talking about Asian immigrants, once they landed as permanent residents, they are counted as Canadian residents.

Talking about they are also paying taxes, someone in the comment is correct, most are filing close to zero income tax. Unless they are woking at local companies. in B.C., very few.

Also, many noticed after HST removal this year, plenty of B.C. Asian restaurants increased price by 5~7%.
Most are B.C. famous “cash only” restaurants.
Your Shanghai Noodle is $8.99 + 12% on HST days, cash only. Now HST removed, $9.50 + 5%, cash only.
This won’t work as “they pay taxes”.
In this case, none.

The racism evident in a comment like this, if widespread in Vancouver, cannot help but poison a once-great place to live. Beyond sad. — Garth

#117 thiscountryis going down the toilet on 05.30.13 at 11:06 am

Wrong wrong and wrong…..deny deny deny……it would n’t be supporting of the liberal party line to out the truth on HAM would it.

Second…..prices will not go down on mortgaged units……but they will on spec units…..look for HAM to bail in a few years of lethargy on the high end but not out of the suburban nightmare like in Richmond where there is less spec , rentals are in place, and buys are tied to immigration.

Third..builders will come under pressure albiet slowly because of emergency low rate……so no fall there….slow bleed instead….but nothing noticeable.

Condo’s…a different matter…..condo prices will fall dramatically as there is strong evidence that a majority have been bought on spec and cost of ownership is high. Rising rates will cap that roach.

It seems impossible to get guys like Garth to accept the other elephant in the room……the fact that a civil servant is being paid triple and quadruple of what the average income is…and that the elites don’t have any incentive to save………as we have seen in the Vanc Sun article yesterday the elites have given themselves 55% raises in the past five years….they are legion…..price anomalies in certain expensive areas may persist due to the rich civl servant being able to shoulder costs normal Canadians couldn’t.

With every post you grow more irrelevant. — Garth

#118 Spiltbongwater on 05.30.13 at 11:07 am

#104 Victoria on 05.30.13 at 9:01 am

I was actually looking forward to the follow up on the 100 days blog in Oct. Sadly Jan. came and went and not one word was mentioned about what the previous 100 days showed us. Must have been pretty insignificant.

Like a 50% decline in sales in the Lower Mainland? — Garth

#119 Helga on 05.30.13 at 11:10 am

Interesting listing: same house, higher price for mls.Toronto



#120 Old Man on 05.30.13 at 11:11 am

Rob Ford? Never heard of him, or are you suggesting that someone boost a Ford car? #97 Gypsy Kid

#121 Canadian Watchdog on 05.30.13 at 11:15 am

CMHC Says Mortgage Insurance Balance Drops to C$562.6 Billion

Canada’s federal housing agency said its mortgage insurance balance fell 0.6 percent in the first three months of this year to C$562.6 billion ($542.5 billion).

The agency’s insurance in force was C$566.1 billion at the end of last year, Canada Mortgage & Housing Corp. said in a financial report released today.

Revenue dropped 13 percent to C$3.1 billion from the same period last year, while net income decreased 15 percent to C$378 million, CMHC said.

Housing starts will reach 190,300 units this year and 194,100 units next year, the agency said.

From Q1 report.

The Provision for Claims is an estimate of possible future losses on mortgages that are in arrears but have not yet been reported as a claim by the lender. The estimate is the result of actuarial forecasts based on a number of economic assumptions. It is an estimate because many of these mortgages will benefit from CMHC-supported default management activities that enable borrowers to work through their financial difficulties and remain in their homes.

In other words, if you can't pay your mortgage, just dial 1-800-BAILMEOUT and CMHC and your lender will workout a deal to reduce your monthly payments by lengthening your mortgage to 35 years. Of course, the catch is this will be at a higher rate and insurance premium because you're now a risky borrower who XX months ago, somehow qualified a required GDS/TDS ratio that was calculated and approved by the very same institutions now offering you a bailout.

Alas, as history shows time and time again, when governments fail to allow whatever capitalism is left to run its course and begin dictating private markets by choosing winners and losers, the situation always ends up far worse.

If you're a buyer waiting on the sidelines to jump in the market, you may be waiting a long long time. Start thinking in decades, not years.

#122 Shawn on 05.30.13 at 11:17 am

TOUCH THIS ASSET, It’s REAL (And Hard too)

101 Bigrider about fools buying real estate ’cause they can touch it.


I agree Bigrider. The notion that stocks which are shares in real companies are never hard assets is propogated by gold nuts and real estate nuts and also by those who view shares as mere squilles on a screen.

Shares in solid corporations are very real.

#123 Penny Henny on 05.30.13 at 11:32 am

So that’s it. May 19th was the one day that across Canada house horniness dropped off a cliff. Wow this guy is good, he can narrow it down to the exact day, never mind the week of the 19th it was May 19th right on, wow!
What ever happened to “real estate is local”???
Thought I read that around here.
Penny Henny

#124 Mister Obvious on 05.30.13 at 11:32 am

#80 m

” Come to Kerrisdale and you will see an endless cavalcade of Aston Martins, Lamborghinis, Porsches, Maseratis, Bentleys, Jaguars (meow) the odd Rolls Royce or Tesla and way too many BMW’s, Range Rovers, Audis and Mercedes. The guy down the street has two grey Ferraris”

Right you are, m… In Vancouver, the dealers for every one of those high end vehicles all seem to be located within a two block radius of Burrard Street and Second Avenue.

Several times a day you will see some young guy tooling around the neighbourhood in a Ferrari or Lamborghini. These are usually mechanics out on a so called ‘test drive’.

“Well Mister Upjohn, we took it out for a spin and let me tell you sir, that baby purrs like a kitten”

From what I can tell by casual observation business is absolutely on fire. (Of course, this is coming from a guy who drives a ’98 Buick).

What does it all mean? Damned if I know.

#125 Devore on 05.30.13 at 12:03 pm

#22 Uwinsome

You can say there’s no evidence that foreign Asian money is not influencing real estate values. My reply is BS. Take a walk down Robson Street, No. 5 Road, Metrotown, Oakridge shopping mall, or the West Vancouver seawall.

Lets put it another way.

Robson? Well, in my neck of the woods, Robson has about a half dozen Korean and/or Japanese restaurants per block, so there goes your HAM theory.

#5, Metrotown, Oakridge, those are areas there various Asian ethnicities and nationalities tend to congregate, that tells me nothing. If you looked at Little Italy, would you conclude we are being invaded by Italian gangsters?

Seawall? If the seawall population is representative, then I have to conclude 50% of Vancouver’s population is hot Asian females, a clearly ludicrous notion.

So I don’t know what you’re going on about, and I don’t think you know either. Open your eyes and stop playing some sort of victim.

#126 DM in C on 05.30.13 at 12:09 pm

Lot’s of ppl denying HAM on this site seem to need to watch this video:

“Where are you from?” http://www.youtube.com/watch?v=rHEprQtyyjQ

#127 Real Estate Expert on 05.30.13 at 12:15 pm

113 Devore.
Take off your blinders.

#128 Nemesis on 05.30.13 at 12:19 pm

“Urban Myth”, OldPol?

To paraphrase ScotiaBank, “It’s bigger than you think.”

For certain types of housing in certain micro markets (in which I have personally resided) offshore inflows and absentee owners effectively are the market.


Averaged out across the entire GVRD quantifying the gross effects/regional distortions becomes somewhat more problematic… but it is doable – or would be, absent a dearth of political will.

While not directly applicable to this quantitative ‘open question’ – the very best scholarship on the regional influence of transnational flows/inward migration can be found here…


[Not – ‘coincidentally’ – the academic of ‘choice’ as regards traditional media outlets. Probably something to do with antagonizing the HandsThatFeed, both inside and outside TheBordello.]

#129 Real Estate Expert on 05.30.13 at 12:24 pm

122 devore.
Go on picnic at any of the beaches or parks in the LM.
And make sure you leave your blinders at home.
And by the way, there’s only a small fraction of Italians living in Little Italy.
And there are very few Germans left on Victoria Drive.

#130 DM in C on 05.30.13 at 12:25 pm

Sorry, broken link — try this one


#131 Sebee on 05.30.13 at 12:33 pm

#108 Ralph Cramdown

The source was generalizing. While I’m sure that certain factors contributed to the decrease, let’s for argument sake say those factors can account for 4% of that 5.8% number. We’re still down 1.8%.

#132 Spiltbongwater on 05.30.13 at 12:48 pm

Like a 50% decline in sales in the Lower Mainland? — Garth

I believe your 100 days blog was about a national level (will check archives). So lets compare apples to oranges and talk about a 50% decline in sales in Lower Mainland. Sounds about right.

#133 Q on 05.30.13 at 12:49 pm

Ah yes…”Funcouver”, a legend in its own behind….you have to wonder about the hype, when some of the most expensive retail space in North America (Robson St.) and the shopper oasis in Van…is little more than flafel shops, roti huts, discount shoe stores, coffee stands and junk souveneir (cigarette) kiosks. Add to that the fact that the only growth industries there are pot cultivation and baristas……and you have….well, you have to admit, the scenery is gorgeous the 45 odd days per year when it’s not raining. Prediction: 60% dump in real estate values over the next 15 months. Before you call me nuts…. I was right about the 45-50% drop in value back in 1981-82….and there was still an economy then.

#134 happity on 05.30.13 at 1:01 pm

The previous blog on the USA economy reports symptoms but does not really delve into and provide sources and links to cause, which is the real value in knowing what is coming next.

“America is back” What does that mean, really? Oh, it means “no recession this year”.

How can US be out of recession when you admit an unprecedented 50 million on food stamps, high unemployment, etc.?

Could it be the only thing that is out of recession is the Central Bank and Wall Street?

Because the Central Bank pumps $85billion every month into Wall Street to relieve them of their mortgage manure and Wall Street then uses that money to buy real estate and equities.

Finally, what will rising interest rates really do? Folks like Jim Grant clearly state that a 2% rise will kill the US economy.

US economic renaissance is an unassailable fact. Get used to it. — Garth

#135 Sideline Sitter on 05.30.13 at 1:03 pm

They say you can’t time the market… but I sold my house in downtown Toronto in April 2012 (and closed the following June).

I still think timing the market is near impossible, but I’m going to pat myself on the back anyway :)

When I sold, I couldn’t believe how much I got. I’m still in shock, even though prices have gone up a little since, I don’t think I’d get the same $$$ had I tried to sell this Spring.

#136 Rabbit-One on 05.30.13 at 1:05 pm

Hi Garth

I understand it could sound too racy.
(re: immigrants, Asians not paying taxes)

I am Asian immigrant, too, (but not Chinese who are the major Asian population here)
I just know too many people in B.C. won’t be ready to pay taxes in Canada.
Many are doing cash business.
Not disclose real (world) income.

Very sad to say, yes, it is there.
Many parts are hidden to Non-Asian community.
But many already know.

In my view, Canadians are very clean, very ready to pay taxes, pay big money towards donation.

It’s simply Asian culture, they have totally different ideas about taxes.
But they won’t share their ideas / tricks to those who don’t agree of course.

I don’t say all are like that, but it is there,
it is so common in B.C. unfortunately.

(I myself pay all taxes, clean, have no option to do any cash business. I have paid more than $1MM in income taxes so far)

#137 fancy_pants on 05.30.13 at 1:11 pm

Garth, if you run out of ideas, start recycling your old posts from a couple years back. equally relevant today.

Not sure what to think anymore regarding the RE bubble; thankfully I don’t have to (own + no mortgage). But this RE nonsense could go on for a while. It seems the big players will keep it propped forever

#138 EB on 05.30.13 at 1:13 pm

>Most are B.C. famous “cash only” restaurants.
>Your Shanghai Noodle is $8.99 + 12% on HST days, cash >only. Now HST removed, $9.50 + 5%, cash only.

While I agree that the post had lots of racist agenda behind it, this is a well-known thing. It was my Asian co-workers who first explained it to me (and FYI I understand a little Japanese and a tiny bit of Mandarin and I *like* Asian culture).

#139 Old Man on 05.30.13 at 1:23 pm

Do you remember the movie called Three Days of The Condor? Well the hitman took the CIA agent aside who wanted to return to NYC, and he said here is how it will happen with you. Mr. Turner put up a great link which within context parallels Real Estate, and guess what is going to happen? I know and it is going to look like a train wreck in slow motion, but he warned you all, did he not?

#140 elchavo on 05.30.13 at 1:32 pm

“Canadian house prices will fall 5 percent in the next few years, with Vancouver and Toronto leading the drop…”

“A housing slowdown is already well underway in Canada, but a soft landing is widely expected by both private economists and policymakers. ”

“The prospect of a soft landing has been helped by Canada’s more conservative approach to home ownership and mortgage lending”



#141 Ralph Cramdown on 05.30.13 at 1:36 pm

#132 Sebee — “The source [that stated that US real personal income fell at a 5.8% rate in the first quarter] was generalizing. While I’m sure that certain factors contributed to the decrease, let’s for argument sake say those factors can account for 4% of that 5.8% number. We’re still down 1.8%.”

I gave you a link to the FRED data. Using it, you can easily verify that every monthly RPI has been higher year over year since March of 2010. Your source tortured the data to feed you a line of BS. The Wall Street Journal?

#142 Old Man on 05.30.13 at 1:38 pm

I need a part-time job in Toronto, as would be busy, as another staff member has been escorted out of the mayor’s office whose name is Brian. Man could make me some money to pay my bills if I was given this job, as they are leaving; now there might be two, but hear that the Smoking Man hooped the contract for this all, as wants a kickback to be hired.

#143 Sebee on 05.30.13 at 1:42 pm

#108 Ralph Cramdown

I just looked at the links you provided. Clearly things are distorted by the 1%. The 99% likely didn’t benefit from dividiends or bonuses. And so it could be argued that the 1% are pulling up those numbers disproportionately.

Also, is RPI number reported pre-tax? Those new taxes do take a larger bite.

#144 -=jwk=- on 05.30.13 at 1:53 pm

Many years ago when I was last in Guangzhou there was massive hotel and freeway building everywhere while I observed – wait for it – exactly no private vehicles. Weird wheeling around on my rented iron bicycle looking at half built elevated roads …

Bicycles are now banned in guanzhou (2010). Too many accidents with cars, so the bikes had to go…

#145 Toronto_CA on 05.30.13 at 2:15 pm


Another 140+ professional white collar jobs gone today.

#146 Russell Olausen on 05.30.13 at 2:20 pm

When the long mortgage (35yr.) became available, I found a way to roll all that tedious high interest consumer debt along with the 18yrs. left on my existing mortgage into a nice all inclusive debt instrument known as the 35 yr. mortgage. To do this I bought a pre-buy in 06 that was built 30 months later, occupied in 08. The net benefit was substantial, enough that I did not have to doff my cap to anyone. I drove truck and managed it, so it makes me think a big bunch of the insiders of the F.I.R.E. economy did so too. Now making the first buyer look like a chump on grounds of large mortgage that they greedily took, ha ha. The corrupt manipulation of the mortgage market goes apace with all the appropriate fall guys in place. Mr. Turner has listed them and graciously given them funny names like horny, ham, and on. I hope a few of you will get it.

#147 Ralph Cramdown on 05.30.13 at 2:20 pm

OK Sebee, I did some googling and it looks like the source of your ridiculous claim is David Rosenberg of Gluskin+Sheff, likely via ZeroHedge.

Here’s a guy who comes to the same conclusion I did, with pretty charts to boot. The chart makes it SOOOO obvious that my thesis is correct, and Short and his chart additionally highlight something I didn’t think of — not only did corporations pay fat divvies in December, but people with small businesses paid themselves more in December AND less in January to compensate. The tax planning thesis explains everything, the US is still growing, Rosenberg goofed, and reading ZeroHedge is bad for ya. Class dismissed.

#148 Josh in Calgary on 05.30.13 at 2:31 pm

93 Pokercat,
Your advice to 50 happy renter is spot on. I spent a year renting out a place in Calgary. After a year of chasing my tenant for checks, spending evenings lining up fix-it items for “his” property and just breaking even on cashflow (probably lost a little equity), I called it quits. I could see the writing on the wall – sideways equity at best.

In the mean time I had some other money in a REIT (part of a balanced portfolio). All that ever did was spit out 5% dividend consistently and go up in value … no work involved. Not to mention the returns are taxed at half the rate of the income generated by the rental property.

That being said, the price of REITs are sky high right now too.

#149 mtl_re on 05.30.13 at 3:07 pm

Montreal & Quebec city CONDO prices expected to DROP by 5% over the next year

First time Desjardins predicts lower prices


#150 Buford Wilson on 05.30.13 at 3:13 pm

Interesting observation about the cars.

I noticed many years ago that the the level of cars drops sharply when you cross from the US into Canada.

Long ago in the 1980s when I lived in Nova Scotia I occasionally drove to Boston.

On the return I immediately noticed that something like the Nissan Maxima SE, a common ordinary car even in Maine, was a high level vehicle rarely seen in eastern Canada.

Even in Calgary the cars are at a much lower level then in Houston.

#151 rosie "moving forward" on 05.30.13 at 3:16 pm

Would ya look at this. A bubble is starting to hatch. http://blogs.marketwatch.com/election/2013/05/30/in-many-markets-its-cheaper-to-rent-than-buy-but-thats-not-stopping-home-builders/

#152 Reader's Request on 05.30.13 at 3:39 pm


#153 spaceman on 05.30.13 at 3:40 pm

May 19th ? thats my bday thank you… no this started a long time ago… 33 years ago to be exact, we are just seeing the results of it now… the end started in 2010 when people started coming to their senses… most of all our own Gov.

40 year amorts, 0 down, CHMC backs anybody, housing is making everybody rich, HAM (small impact), oh sorry… the big one… FREE MONEY…. get a loan for 2.85 when the economy is running 7-15%? thats free money.

And the boomers, yet to happen. Can you say “Perfect Storm” ?

#154 Sebee on 05.30.13 at 3:42 pm

#148 Ralph Cramdown

Definately wasn’t Zero I read that at.

I concede that the 5.8% drop can be explained with various issues, perhaps not fully as higher taxes are eating more into the middle class incomes. And yes, US is growing. But Income is not seeing the same exposive growth as in the past as noted in previous post by some from days past.

The point of this exchange with SM was that income growth certainly is not sufficient in Canada to justify the ratio to home prices.

#155 Mark on 05.30.13 at 4:04 pm

Hi Garth,

I’ve been following your blog for about a year, mainly because you tend to confirm many of my own impressions on the Van real estate market. And for the great humour. I’m a renter by choice, currently living in a small penthouse by the beach for 2k/month. I would never be able to afford to buy a place like this.

While I agree with a lot of your analysis and outlook, I think you’re wrong about Chinese investment here.

My experience of it: I rented a small post war bungalow in the Arbutus neighbourhood for 4 years, and was evicted last summer to make way for a standard McMansion appealing to Chinese buyers. The neighbourhood has been 80% redeveloped and all I saw on the streets were Asian seniors and children, along with tiger moms driving black SUV’s. Very few adult males 30-60. I would say hello to people on the street and many clearly spoke no English.

The dismal little bungalow across the street from mine was put up for sale, with an open house scheduled for Super Bowl Sunday 2012. There must have been 30 Mercedes, Bmers and the like parked along the street….all Chinese shoppers. Listed at 1.8 sold for 2.3. These oldtimers were bulldozed, rebuilt and (if bought by a developer) listed for 3.5-4.5.

One of my neighbours was a 45ish Chinese woman who moved here in 2004. She regularly appeared on TV shows that were shot here and broadcast in China to draw offshore investment . As far as she was concerned, Chinese investment drove the market, and as long as that money was flowing, prices would rise.

Even if many of the buyers are already landed in Canada, the $ flow is/was significantly from offshore. The ethnic transformation of neighbourhoods like Arbutus is largely complete.

Given the fact that some 130 Billion was stolen from the Chinese treasury over a period of years and carried out of the country to invest around the world including Canada, OZ and elsewhere, leaving a trail of real estate bubbles, I don’t understand why you don’t see this money flow as the tip of the spear. And if it’s not, then why have the Feds changed the rules on offshore investment and immigration?

Coincidentally, I sublet that basement to a young woman who worked as an immigration consultant. Most of her employer’s business was with Chinese immigrants. She said that when asset disclosure rules were changed, business dried up. This was in the Spring of 2012. Clearly this demonstrates that money laundering was part of the equation. This might be the biggest scandal in the country not on the front page of newspapers. I’m surprised that someone of your stature and insight is a money laundering denier. Why are you so didactic about this?

Cheers and keep up the good work.

#156 Happity on 05.30.13 at 4:16 pm

US economic renaissance is an unassailable fact. Get used to it. — Garth

And there is the rub.

Could this be called gambler’s fallacy?

#157 apm on 05.30.13 at 4:19 pm

I disagree with Claude. As a Vancouverite, I’m always shocked with how many luxury cars there are here. I swear every other car is a BMW.

#158 Agree with 155 on 05.30.13 at 5:14 pm

mark at #155: you are completely right, I have lived in Vancouver much of my life and experienced very similar tings to what you describe. Money laundering clearly has been a if not the key driver behind the ueber-bubble that has been blown on the west coast. I suspect Garth is ot aware of this because he lives in Ontario. Without first hand experience it is easy to dismiss what we and many pthers have witnessed here in the past decade as nonsense or an insignificant contributing factor.

#159 Rabbit-One on 05.30.13 at 5:31 pm

All comments above witnessed lots of luxury cars in B.C. is true.
A friend of mine, immigrated from centre of London was impressed about seeing many million-dollar-worth-cars in Vancouver that he’s never seen in his own town.

My apology for the comment I made regarding taxes and Asian (Chinese) in B.C..
I actually have no intention to be racist, just wanted to say the whatever the things I saw in my daily life, or heard personally from my Asian friends, etc.

Shanghai noodle may just mean, my Italian friends love to talk about Real Estate as much as he loves spaghetti.

Cash Only business is more common in B.C. if run by Asian (in general).
And there is reasons for that, can ask owners or owners’ friend.
One is too pricy merchant fees, and there is another.

I just don’t want people to be too naive about some fact.
Some people came from the coutries completely different background from Canada, although all are trying to adjust themselves, to be Canadians.

There are lots of cultures mixed here in B.C.,
we immigrants mention about other culture specifically, sometimes bad, just like English joke about Quebec, Italian, NFs, but don’t mean much, between immigrants Eastern European, Middle East, South Asian, East Asian, African, we are all fine with it.
We all counter : D

But of course, we have to respect first..!

#160 Ralph Cramdown on 05.30.13 at 6:30 pm

#154 Sebee

I’ve got no quibble that this has been a crummy US recovery, inherently slower because it was from a balance sheet recession rather than an inventory one. And it has been in spite of government’s best efforts to kill it with sequestration, middle class payroll tax increases, debt ceiling and budget hijinks and a few other things I’ve no doubt forgotten.

Meanwhile in Canada the lunacy continues. I just made a mid five figure bet with one of our big banks. They’re hoping I’ll fail to repay in six months so they can hike the rate to something approaching sanity for an unsecured loan. Based on their past experience, they should know they’re going to lose the bet again. It’s a bizarre business model where you lose money (on a risk weighted return basis) on your most financially astute customers, lose even more money on your least astute customers when they go BK or proposal, but make boatloads on the ones in between who are willing to pay 12%-20% interest month in and month out. Rick Waugh, I’ll be helping you blow your numbers for the second, third and fourth quarters.

#161 NoName on 05.30.13 at 6:31 pm

Interesting read

us banks are rolling in the money, anticipation of improving econimy.


tax evasion bad, but tax avoidance is smart and legal and not fair…


“The Philippine economy grew by 7.8% in the first three months of 2013, surpassing every single analyst estimate and putting it just above China”

over $5 billion in the first quarter of 2013, 8ish percent of that 5bil. (400mil) was sent from Canada.


#162 Devore on 05.30.13 at 6:35 pm

#158 Agree with 155

And what does any of that have to do with the price of a 300sqft studio in Surrey, or price of a house in Winnipeg, or price of a loft in Montreal? Oh yeah, nothing. Every place has their own “it’s different here” mythology.

#163 Spiltbongwater on 05.30.13 at 6:40 pm

I bought my Clicgear push cart from my golfing partner for $50 because it wouldn’t fit into his Mercedes. I got my cart golf bag from another fellow golfer as it was to big to fit into the trunk of his BMW. Ya, no luxery cars in Vancouver. We may have expensive housing, but we still have first world problems.

#164 Dr. Hoof - Hearted on 05.30.13 at 6:40 pm

I drive the ethno- gauntlet here in HAMVille…

Around 3PM any school day, I often drive past 2 elementary schools and and 2 High Schools near the City Center.

The vast majority…I am talking at minimum 80% , are Asians. Caucasians are very few and far between.

BTW: what is going on is Cultural Marxism…GOOGLE the term.

People in the GTA see the same every day in Markham or Unionville, where similar ethnic groups congregate. The differnce? Toronto is mature. — Garth

#165 Old Man on 05.30.13 at 6:44 pm

Lets face reality as when you see a nice property with all the bells and whistles worth big money are you seeing equity or bank debt? Give this some thought!

#166 Shawn on 05.30.13 at 6:58 pm


Ralph Cramdown at 161 suggests his bank is losing money on his unsecured loan.


Well, not sure the interest rate. let’s say it is 3%.

A bank would not lend its own equity capital at 3% unsecured. But keep in mind it is lending you mostly its depositor’s money at say 3%. They are paying 0% on short term deposits. Let’s say the admin cost is 1% for a spread of 2%. Leverage that up 10 times ($9 of depositor money for every $1.00 of bank equity) and you are at 20% ROE pre-tax.

No, the bank won’t lose money, unless that is, you fail to pay the money back.

#167 sickofbc on 05.30.13 at 7:16 pm

More Calgarians plan to buy condos in the next five years: BMO

Intentions increase in Toronto as well


#168 sickofbc on 05.30.13 at 7:23 pm

Canada’s Flaherty Sees No Sign of Canadian Housing Bubble


#169 Darren Gough on 05.30.13 at 7:27 pm

HAM is a huge factor. Although it appears to be slowing HAM pays cash and do Not need a mortgage. Do you know how many empty houses there are? No one does. HAM is not tracked but its out there and it’s effect is real. To a lot of them it’s just a money laundering sheme or a future escape pod for a child. Many would rather have it empty than deal with the hassle of renters and English laws and language.

#170 maxx on 05.30.13 at 7:39 pm

#14 Editor on 05.29.13 at 9:04 pm

” … the realtor believes in real estate over financial investments because “you can touch it.”

True. Just like you can touch a pink slip, a credit card/line of credit/car lease bill, divorce petition…..yeah…, “you can touch it”, all right.

#171 Mister Obvious on 05.30.13 at 7:46 pm

#157 Happity

“Could this be called gambler’s fallacy?”


In a word, no. ‘Gambler’s fallacy’ is a belief that past random events have bearing upon future random events. They don’t.

That has nothing to do with present evidence that a US recovery is under way.

#172 Daisy Mae on 05.30.13 at 8:31 pm

#160 Rabbit-One: “There are lots of cultures mixed here in B.C….”


Problem is, they don’t mix. So much for ‘multiculturism’. I don’t expect the different cultures to totally abandon their traditions, but TRY to assimilate. You now live in Canada.

#173 Dr. Hoof - Hearted on 05.30.13 at 8:52 pm

People in the GTA see the same every day in Markham or Unionville, where similar ethnic groups congregate. The differnce? Toronto is mature. — Garth


Not sure why Garth is so defensive on this issue.

As a wise olf man once told me
“The world does not owe you a living, but it owes you a chance to make a living”.

Canada is not some sort of frontier, it has enough critical mass to provide both a population and the chance to make a decent living.

Like any country, their is a core citizenry that have been taxed to the hilt to pay for the basic physical and social infrastructure. This same citizenry sacrifices to build a better life for the new citizens aka their children.

Or…charity begin at home.

I see no advantage to selling Canadian citizenship aka providing a political- bureaucratic “pole vault” to benefit a few. I tend to look more long term, that one’s investment in one’s country will not be prostituted, but we are simply a link in a chain of continuity for the next generation.

Instead, pundits say that the younger generation will have a lower standard of living than previous ones.

WTF is wrong with this picture?

Isn’t this what this blog is all about….warning people of the trap set long ago to make people nesting horny trying to keep up with those who have relegated them to basement suites ?

#174 Tbeck on 05.31.13 at 1:12 am

#22 I have similar anecdotal evidence you should be interested in Garth. I sold townhouse in point grey 1 year ago and am now renting in yaletown. It took me over two months to find a suitable unfurnished apt. to rent. Everything listed was furnished. I look out my window at night and there is not one building with more than 30%of lights on. The fancy one across from me literally has three lights on at night. With all these empty condos why are there so few units for rent? And why are most of them being rented out furnished? And who is the owner of my rental? A Chinese woman who lives in china. In fact almost all the owners of the units I’ve looked at we’re owned by Asians.

#175 Tamsen on 05.31.13 at 1:38 am

We completely agree with 156 Mark. If you’ve lived any extended period of time in Vancouver, you cannot deny the foreign Asian invasion here. Our Canadian-born Chinese friends say Vancouver has changed, too, and quite resent being mistaken for HAM!

#176 Bill Gable on 05.31.13 at 5:15 pm

Here’s something to ponder, Mr. Turner:

“The Hindenburg—the stock market version, of course—may not have crashed into Wall Street Friday, but it certainly appeared to be circling.

Traders were abuzz in the afternoon trading session that the “Hindenburg Omen,” an ominous sign that seems to pop up every few years and can signal a major market tumble, was in play.

As a result, markets sold off rapidly into the close, with the Standard & Poor’s 500 down 1.43 percent and the Dow industrials tumbling more than 200 points to close off 1.36 percent.”

>> Something big cometh….but what?

Link: http://tinyurl.com/k6a7neg

The inevitable is coming – less Fed stimulation. We are into the phase when good economic news = bad market news since every strengthening means tapering comes closer. No surprise here. — Garth