A young journalist interviewed me this week for a national magazine article to be published in the autumn. I think the subject is “Don’t believe Garth Turner.” During our tussle she revealed the bung across the street from her parents in Vaughan (a wasteland forming part of the GTA) had just sold for $700,000. “The woman who bought thinks she got a great deal, and plans on spending a hundred in renovations,” she said. “What do you think of that? Haven’t you been wrong?”
It was so cute.
Her frame of reference was the street, the hood and the city she lives in. Vancouver and Halifax are distant concepts. The last real estate bust, which knocked prices down 20%, took place when she was five. Cheap mortgage rates have been in place since she began her career (three years ago). The very idea that real estate could be bloated and dangerous is crazy wacko stuff thrown off by some bearded old goat, since the nice people around you cheerfully trade borrowed fortunes for plots of suburban dirt.
“I’m not Nostradamus,” I whimpered. “My role is to help people understand the risks in putting the bulk of their net worth into something that’s never cost more, financed at rates which will only rise, at a time when the economy’s stuttering. When everybody believes the same thing – like you – smart people split.”
Of course, it’s tough to have perspective when you’ve never actually owned real estate, been caught in a market downdraft, watched you house grow illiquid, renewed a mortgage at 11.75%, paid fifty thousand in land transfer tax, been ripped by a renovator or stumbled into a bidding war. Real estate can be just as dangerous as, oh, owning a blue chip stock like PotashCorp. But you have to learn such things first-hand, since the housing industry will never tell.
As I detailed earlier this week, cheap money and horny little homebuyers have massively distorted the economy. In Germany most people rent while the country grows rich on its exports. In Canada most people own, and we create jobs building condos and selling each other houses on credit. Yep. No risk there.
Now let’s move on to some folks with far more experience and resources – and a more realistic view of what real estate should mean in one’s financial life. Here’s Raymond, in Calgary:
Garth I look forward to reading your blog, your perspective really helps to sort out the hype around real estate and investing. I’m fifty, my wife’s fifty two. We have no kids, make 250,000 between us have no mortgage or bills and from a recent home appraisal from a realtor have a house that would list for 600,000. We have about 700,000 in RSPs, mostly mutual funds as we are conservative savers, TFSAS maxed out , although we could use help in putting our money to work. Now my question is even though we have renovated and keep up the maintenance on our 15- year-old house would it be a good idea to buy a new house within the next year, in the 550,000 to 700,000 range, and avoid going through major upgrades like a roof, furnace etc. in a market where house prices may start to fall in the next five years? Your feedback would be greatly appreciated.
Good question, Ray, because Calgary’s the new Vancouver. Suddenly everyone believes real estate can only rise in value, because it’s different there. The cowboys have convinced themselves the only jobs being created are in Alberta, that commodity prices will never falter, and the economic levers are migrating from the Ontario rust belt – where everyone is on welfare or being shot on streetcars by cops – to the Western Republic. This is also cute.
The latest housing stats from Cowtown reinforce the delirium. Sales up last month 17% and the average price of $460,128 ahead 8%. Active listings are down 24% and local realtors admit the June floods probably pulled demand forward as buyers raced to close deals fearing tighter conditions ahead. The market is now back at 2009 levels.
Does this mean it’ll levitate higher? Beats me. Remember, I’m not Nostradamus. Just a dude asking, ‘do you really know what you’re doing?’ Clearly a mess of people in Calgary do not, given the outlook for commodity prices, Keystone, and the Alberta economy.
But back to Ray & wife. What to do?
Well, it would cost about $25,000 to sell the home, given the usual Calgary real estate commission these days, plus legals and moving. That will certainly buy a new roof and a furnace. So there’s not a lot to gain by selling and buying in the same price range.
Selling and renting is a different story. Six hundred grand invested in a balanced, diversified portfolio should throw off three thousand a month after tax (on dividends and capital gains) – almost enough to live in this house. Combine that with the seven large in RRSPs, and you now have close to $1.5 million in liquid net worth, plus you live in nice digs and can wait for the cold tide of reality to wash over the Calgary housing market.
Speaking of liquid assets, Ray should dump those mutual funds. Most of them are lousy performers, and the management fees are rapacious. ETFs are a far superior choice – ensuring balance between growth and fixed-income assets, with plenty of diversification in terms of geography, sectors and capitalization. Ditto for the TFSAs. Another benefit of selling, renting and investing: not all eggs are in registered vehicles. Given the fact Ray will probably retire in the top tax bracket, he’d be handing over half to the feds. That sucks.
Now, what if I’m wrong?
Ray lives for free. He has a million and a half. He can ignore the roof and the furnace. He’s got liquidity, mobility and choices. And he can dis me when he reads the mag. Then count his blessings.
About the picture: Etienne (by email) – “This was taken on the south shore of Montreal. No joke!” Garth – “I give up. What are they doing?” Etienne – “Using the car AC to cool the apartment.”
160 comments ↓
The couple I’ve been mentioning on this site closed their deal today to avoid “losing their favorable rate”. Chaulk up another one in the $950-999k range in Burnaby today. The good news is they put over 20% down but regardless, the insanity continues…
I have to stop reading this blog. Shaking my head so much is going to give me problems with my neck.
People will learn the hard way, cant say they were not warned.
Lunch ?
Meanwhile in Vancouver, sales are apparently on fire. Up 59% YoY for detached. Is this the last of the Greaterfools gitting in, or a HAM sammich?
Doesn’t anyone do the math anymore ?
Buy a house with a hefty mortgage for 25 years = you end up paying for it almost 3 times over, after you factor in all the interest $ you will have to pay to the lender (who has their mortgage lodged against title until it is fully paid off),
then – add all the property taxes you will pay each year for the house over the length of time you own it,
then – add annual costs to maintain the house – e.g. monthly costs of electricity, gas, budget an annual cost for replacing the roof every 15-20 years or so, plus all the other things like replacing a furnace and windows, new decorating every once and every a while – inside and outside painting, carpeting & lino and the list goes on.
Better to rent than own a “money pit”. The germans have got this figured out.
Old Man…
Take note of that blog photo.
In winter you can hook a hose to the tailpipe and use as a heater!
I bought CPD and XRE based on users of this pathetic blog. These ETFs SUUUUUUCK! All my other stocks are soaring, mostly US stock, canadian small energy and big banks. But these ETFs simply WAAAAAANK. Keep dropping.
Stay away from CPD and XRE. Glad I could get that off my chest. Everyone was so orgasmic about ETFs but I now firmly disagree with the groupthink.
Thanks for reminding us how smart DIY investing is. — Garth
#1 Sign of the Times on 08.01.13 at 5:09 pm
That’s the DrugStore owner and teacher…right ?
Nice to care,(not sure if you gave them your 2 cents worth/advice) but if they still wish to perform the economic equivalent of Thelma And Louise… just move on.
BTW: Did you ever mention their ages?
“Now, what if I’m wrong?”
I notice your tone has changed over past few months, from dead sure about housing correction, to maybe-maybe not.
I personally think, if someone is predicting housing correction, he should be given 3 years. If it doesn’t happen, he should admit that he was wrong.
When will we hear these golden words from you?
Where they’re true. Don’t hold your breath. — Garth
#5 Shawn – we should be glad he’s not a dentist.
#6 DreamingInTechnicolour – 3 times over?? Pump the rent scheme pushed here with facts or loose your cred. Is rent free along with gas, electricity…good points?
Renters work for who?
Think of the irony.
Garth… Garth… no comment on the REIT massacre? 20% collapse more coming. … come on Garth.. why didn’t you warn your lemmings to sell their REITS? why didn’t you tell them to sell their PREF Shares? what’s wrong Garth. selective analysis?
US Rates SKYROCKETING even though Bernanke will print 85 Billion this month, and next, and the one after that, and the on after that….
bye bye REITS, bye bye PREFS… bye bye bye
No reason to sell assets with a 5 per cent yield because of a temporary dip. Dumb move. — Garth
#6 DreamingInTechnicolour on 08.01.13 at 5:19 pm
Doesn’t anyone do the math anymore ?
If you want to see even bigger money pits, check out the gang with cottages! I cannot believe the cash blown on these shacks. Several hundred thousand plus upgrades for 10 weekends a year.
You know we are in trouble when journalists are ignorant. I do notice on the news/business channels though, that when some newscasters/business reporters are spewing their financial propaganda, they have a difficult time looking at the camera, and you can just tell they don’t believe the lies/hype they are reading either. Interesting how some RE liars/hypers/con artists can spew their bs in front of a camera and in their seminars, with such veracity, not to mention any condo king’s name of course as an example, nor a shrill sounding blond woman who sold her own RE after finally leaving the public eye and shutting her mouth.
Keep in mind, Garth has nothing against RE. Nor do I. The name of the game is balance, re-balancing, diversity, and liquidity. Oh, one other thing, I don’t like to buy any asset when it is at it’s all time high. And on top of that, using the leverage of record low interest rates. That is insane behavior. No exception.
Patiently waiting for the Vancouver detached to drop for the past 1.5 years as I sold and renting now. I only have 250K for a downpayment so I can’t make a mistake. My wife and son depend on me to make the right financial decision.
Then don’t put all your money into one asset. — Garth
Wow this guy is in liquidity heaven, and wants to upgrade the shack? Why bother? A roof 2 months income from investments, the furnace same. A new place in a new hood looks like at least 5 years of income. Why??
Inflation here is being tame right now.
Milk $2.99 a gal
Gas $3.65 a gal
bananas .38 a lb
meat & seafood are up but only about 10% from last year
smokes up (TAXES my boy)
Booze flat for now
Hey it’s Thirsty Thursday here! Enjoy yourselves!
The seasonal fruits & veggies are in Vogue, and investments returned near 5% last month. Who can bitch about this life?
Garth, I’m calling you on your numbers.
“Ray lives for free. He has a million and a half.”
Not true. According to you, Ray will generate $3,000 a month from his investments if he sells his house which will ‘almost’ cover the rental of a house such as the one you suggested. The rent is $3500, not $3000 and he must pay utilities on top of that so that means he would have a shortfall of $6000 annually for rent PLUS utilities expenses (no idea what they cost in Alberta but probably at least $250 per month x 12 so another $3000 per year there). In total a $9,000 shortfall per year. Not exactly living for free, is it?
Also, if the house sells for full asking at $600,000, you yourself indicated that commissions etc. would be at least $25,000 so Ray would net $575,000. Add that to the $700,000 he has and that gives him $1,275,000, not $1,500,000.
I don’t mind rounding a bit but this is into fudging territory. Your point could have been made without stretching the truth. You don’t want to start sounding like Brad Lamb.
While you’re picking nits, don’t forget the property tax he will not pay, the cheaper insurance, the undone repairs or the fact utilities would be consummed either as renter or owner. So, as I said, his rental cost is almost handled by investment income. Meanwhile graduating from mutuals to ETFs would over time likely boost the RSPSs and augment total net worth. Plus be has 50K in TFSAs. You have nothing to ‘call out’. — Garth
#6 DreamingInTechnicolour (and others using the German RE market as an example),
“Better to rent than own a ‘money pit’. The germans [sic] have got this figured out.”
What the Germans have figured out over generations is that it costs a lot of money to buy a home, and that the German Joe Sixpack doesn’t have much chance of earning this over his working life. There are “buildings & loans” to get a guy started, there are mortgages, and he can even use whole life insurance to pay off the place on maturity (I’m surprised that our FIRE industry has not discovered this wrinkle), but homeownership is a pipe-dream for less-than prosperous Germans.
Besides, there is a good supply of rental accommodation, good public transport, and no economic imperative to move every few years. There is one interesting parallel however: Häusermakler is the only profession or trade in Germany that is not regulated. You can just hang up your shingle and don’t need a course or pesky exam to become a real estate agent.
[…] via Nosty — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate. […]
What was up with PSX yesterday, I dumped everything today. It has to drop after a rise like that. Buy at the end of the week I guess.
Rented a dvd awhile ago. Went to return it, the store was bankrupt. I own a house and a winterized cottage and sleep well at night.
Moral; renters rent cause they can’t afford to buy, especially the germans. If they got paid for sitting in pubs they’d be rich!
No reason to sell assets with a 5 per cent yield because of a temporary dip. Dumb move. — Garth
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you’re already down 10% ytd on REITS. they will lose another 15-20% shortly, for a 25-30% loss for the year. congratulations, you get a 5% yield. i’m sure that makes you feel better.
US 10 year rates are moving from 2.5% to between 4-5% … your Pref shares will get massacred, as will your REITS .. horrible strategy to sit and do nothing, like a deer in the headlights.
“A Harley Biker is riding by the zoo in Washington, DC when he sees a little girl leaning into the lion’s cage. Suddenly, the lion grabs her by the collar of her jacket and tries to pull her inside to slaughter her, under the eyes of her screaming parents.
The biker jumps off his Harley, runs to the cage and hits the lion square on the nose with a powerful punch.
Whimpering from the pain the lion jumps back letting go of the girl, and the biker brings her to her terrified parents, who thank him endlessly. A reporter has watched the whole event.
The reporter addressing the Harley rider says, ‘Sir, this was the most gallant and brave thing I’ve seen a man do in my whole life.’
The Harley rider replies, ‘Why, it was nothing, really, the lion was behind bars. I just saw this little kid in danger and acted as I felt right.’
The reporter says, ‘Well, I’ll make sure this won’t go unnoticed. I’m a journalist, you know, and tomorrow’s paper will have this story on the front page… So, what do you do for a living and what political affiliation do you have?’
The biker replies, I’m a U.S. Marine and a Republican.
The journalist leaves.
The following morning the biker buys the paper to see if it indeed brings news of his actions, and reads, on the front page:
U.S. MARINE ASSAULTS AFRICAN IMMIGRANT AND STEALS HIS LUNCH
…and THAT pretty much sums up the media’s approach to the news these days…
19 Herb
Throw in the fact that you can’t own the land (in Berlin at least) but only own the shack on top while leasing the land and the equation changes again.
CPD and XRE
I’m venturing way beyond my field of expertise here, but aren’t preferreds and REITS bought mainly for their yield? So won’t CPD and XRE continue to get slaughtered as the US economy improves and bond yields go back up (as Garth says they will)?
I would think the reason why you’d hold long-term, fixed-income based investments is to hedge against deflation, which may very well happen here in Canada. But rates can still continue going up, and CPD and XRE can continue going down, if canadian bond yields are tied to US bond yields.
So, the only way the “dip” in CPD and XRE is “temporary” is if we get deflation in Canada AND the canadian and american bond markets decouple.
Maybe Garth will turn out to be right that you should ignore the dip in CPD and XRE. If you think he’s wrong, you can still buy short term bonds, cash or GICs for your fixed income.
Bonds still under Mason-ic influence. TLT.US blackballed.
Smoking man sighted today. Smoking just before noon.
(I was following the Csis guy.)
D.UN-ers getting dunned, by the dint of the glint in their eye.
Why does no one want to interview me.
After all I have the best crystal ball going.
9 bubbles, award all, bubble heads.
I don’t know which is worse, reporters who don’t know anything about business or investing, or those who do but are constrained from saying anything besides group-think.
Gartho thought I would see you tonight with a Hawaiian shirt at the big bash.
See what happens when you tell the harpo to stuffit.
Didn’t muss much.
O
Boaring, they are not even good liers
This country doomed
#23 fun in the sun
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I agree where is the commentary on REITs now and preferred’s. However, what is really baffling to me is why REIT’s, which throw off cashflow and are productive assets and can raise rents in a climbing economy to offset the rate rises, are getting hammered over a ~1% rise in a 10 year and some spewing from the Fed who is always wrong and double why are housing prices supposedly increasing in a rising interest rate environment for a non producing illiquid asset??? It is completely off the wall raquetball.
Many good values in some REOC’s right now. This ‘correction’ is heavily heavily overdone. I do have some and do not plan on selling since I invest Buffet style but can;t help but be in awe of market psychology and the clearly evident herd mentality that exists. People would rather take on a ponzi stock such as Canadian oil and gas dividend payers where there is nothing but risk everywhere you turn in that biz but will bail at the sight of a measly 1% rise in rates thus abandoning a steady predictable and ‘REAL’ yield.
@ #8 Matt on 08.01.13 at 5:36 pm
I bought CPD and XRE based on users of this pathetic blog. These ETFs SUUUUUUCK! All my other stocks are soaring, mostly US stock, canadian small energy and big banks. But these ETFs simply WAAAAAANK. Keep dropping.
Stay away from CPD and XRE. Glad I could get that off my chest. Everyone was so orgasmic about ETFs but I now firmly disagree with the groupthink.
_________________________________
I guess that was you selling to me today… picked up some more REIT ETFs.
My U.S. equities are up over 20% YTD, so there was some re-balancing to be done…
(Int’l equity ETF and REIT ETF were the selections today)
#9 Donald Trump:
Pharmacist is 30, earning $200k + as a Shoppers Drug Mart owner and the teacher is 30 as well working as a teacher ($60k?). Given their ages my guess is the downpayment came from mom and dad, or MIL (seems to be a recurring theme on here), since they did put over $200k down to get over 20%. Plan is to rent the basement out and amortize over 30 years to keep the payments low and then make big lump sum payments each year by pulling money out of the business – because Shoppers Drug Mart is in a very secure place right now :)
As soon as I saw that picture I realized what the idiots were trying to do.
AirCon from the “idling” car piped up to the apartment.
“Brilliant” ……….
Trouble with that scenario is. Hot air ‘rises” not cold.
The amount of cooling that would provide. Negligable.
A cookie tray of ice cubes in front of a fan would work better than that. AND pollute less.
Own/rent…boom/bust
Many of us are too young to remember some of the boom/bust cycles in Canada and the impact on ordinary homeowners.
Garth’s message is sound….don’t have all your eggs in one basket. This link to a CBC news article looks at a B.C. ghost town and possible resurrection…….I guess there was no one left (especially not a small business) hanging in for this potential return to good times. Also makes me wonder how some of the seniors in Elliot Lake feel now that the centre of their town (the local mall) caved in. I believe that was another near ghost town (former mining town) that has been marketed to seniors as an inexpensive place to live.
http://www.cbc.ca/news/canada/british-columbia/story/2013/07/31/bc-kitsault-natural-gas.html
like a deer in the headlights; is like a freezer full of venison around here. Blog dawgs are all wrong.
Good old canucks have been buying up those cheap 10 yr mtgs like a 5 legged dawg, which blows the – sky is falling – theory around here, right outta the pond.
If I were a rental dawg I’d be getting worried about inflation hitting the rental district. $1500 for a 900 sq ft musty basement will be the norm in the yrs ahead.
QE- the only thing about to get tapered is Mr B’s underwear.
Get used to this number in Oct- $100B a month.
#23 fun in the sun on 08.01.13 at 6:53 pm
so you would sell those reits and lock-in that loss?
or would you buy some more that is cheaper?
do you suppose the reits might up their rates?
could you enlighten us as to what would be the best investment?
Thanks!
#13 fun in the sun: “Garth… Garth… no comment on the REIT massacre? 20% collapse more coming. … come on Garth.. why didn’t you warn your lemmings to sell their REITS?”
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Why should he? If he’s your investment advisor, he’ll do what he needs to do.
HAHAHA – talk about insider trading:
Fairfax Financial was up over $10 (2.5%) today, and then after the bell they announce a quarterly loss with $500M in bond investment losses!
http://www.reuters.com/article/2013/08/01/fairfax-results-idUSL1N0G22J320130801?feedType=RSS&feedName=financialsSector&rpc=43
gee – I wonder if they’ll drop the same $10 tomorrow?
also – you gotta wonder how much their RIM (errr… Blackberry) holdings screwed them on the equity side of their investments.
Garth, re #13 Fun in the Sun.
I am heartened with your response.
“No reason to sell assets with a 5 per cent yield because of a temporary dip. Dumb move. — Garth”
I have been working with a trusted advisor for 17 years. In January she suggested I add some REITs to my portfolio, not necessarily for the gain on the share price but for the dividend. She looks at our financial situation in total and not as individual pieces. That includes tax treatment of different types of investments.
It’s not always what you make that matters. It’s what you get to keep.
Cheers.
#33 Sign of the Times on 08.01.13 at 7:48 pm
Thanks for the info…
I suspected they were” under 40″…..
I am in my 50’s, and believe me I have seen PLENTY of these RE cycles.
Could write a book on observations.
People in their 30’s who have bought RE recently have been royally sucked in.
In the end, unless where they bought has some anomalistic “micro-market ” where demand exceeds supply…it may be cheaper to bail and absorb the consequences than stick with Plan A.
“About the picture: Etienne (by email) – “This was taken on the south shore of Montreal. No joke!” Garth – “I give up. What are they doing?” Etienne – “Using the car AC to cool the apartment.”
====================================
Yes. It’s what you call a “RedNeck” air conditioner.
Kudos to Anne Rohmer on Hot property this evening CP24.
She started the segment with the notion that the T.O market may be due for a correction in prices and spoke of the various economists warning of an impending implosion . She mentioned that some economists who were previously not worried have now entered the worried camp.
When Al Sinclair appeared later on with the Italian guy from monster mortgage , I think his name was Coccillo, with their usual ‘all is fine ‘ ‘ market going higher’ rhetoric she really stood up to them. Al Sinclair was visibly annoyed at the repeat mention of doom and gloom in the RE market.
Looks to me that the tide of cheer may be wearing thin.
ETFs are great in a rising market and horrible in a falling market.
RBC Canadian Dividend Fund and TD Dividend Growth Fund have been outperforming XDV and CDZ ( the i-shares ETFs) lately, even with their higher MERs. Managers can always throw in a few stocks with rising momentum, into their funds; ETFs remain captive to their index.
REITs are cyclical and their current cycle is declining now. Good perhaps to buy in later (wait for further declines) for the dividend, but most have seen 10% losses because they bought on the way up, or near the top.
All investments have to be monitored. Don’t be afraid to sell a losing stock or ETF (it’s not a house, after all).
Move on to a winner that has some momentum.
Otherwise, stick to GICs, no matter what anyone tells you. You won’t lose 10% on a GIC.
And for all you American haters, get ready for another positive job report tomorrow morning.
Stocks Hit New Highs
Ahead of Jobs Report
Lot’s of talk about Financial Advisors!
Here is what has been my experience! Many are idiot’s and pump products that have questionable value! You can get a feel how GT invests and he is pretty clear what he would advise!
Do yourself a big Fav! When you get approached to manage your money ask for their last 3 years tax returns and complete copy of their present portfolio!
Rule Number #1 never take advise from someone more broke than you!
Rule Number #2 if they don’t find one who will!
I think the entire industry should be “fee based”
as is GT… make way more sense.
And another test…ask them who owns the federal reserve…( google it! )…and see what level of compentency the person that wants to manage your money!
Great post today!
#25 Godth,
that would be news to me. I’ve lived on the economy in the States of Bavaria and Baden-Württemberg, and homeowners owned the land unless it was leased specifically (Pacht) from the state, municipality or private property owner.
My wife is just itching to get into a discussion about the differences and costs of homeownership in Canada and Germany.
re #8 and #13 – Yep, buy high and sell low, that will make you rich. LOL
Still no clients Mikey? Enjoy the welfare lineup kid….
#24 Daisy Mae
I laughed so hard…..but you forgot what the journalist from the other paper in town (hello…Sun News…Fox News…National Post) would have done.
First of all the journalist would have interviewed the parents and found that they are Democrats who were visiting D.C. from Ohio.
The headlines read,
BIKER STOPS COMMIES FROM THROWING CHILD INTO LION’S DEN
47 Herb
My brother-in-law lives in Berlin with a fraulein he hooked up with. They were quite emphatic on this point when we were visiting, I had no reason to doubt them but I really don’t know. Berlin is different in many respects, culturally, historically, freakily.
Any way a quick search didn’t turn up much in that respect but it does show housing booms in both Berlin an Munich. Damn Foreigners :)
I agree that housing is overvalued but what is it going to take to pop this bubble? Interest rate rise? Economy? This is a slow motion version of other crashes… painful to watch.
#42 AK
“Yes. It’s what you call a “RedNeck” air conditioner.”
——————–
I’d call it more of a ‘Red Green’ air conditioner.
http://www.youtube.com/watch?v=blS6WM_qmZU
Dundee REIT (D.UN) -> 7.44% yield
XRE -> 5.03% yield
Morguard REIT (MRT.UN) -> 6% yield
H&R REIT (HR.UN) -> 6.4% yield
Each pays monthly distributions.
Excuse my reach, while I dip into some juicy yields…
Using the car AC to cool the apartment.
dumbest idea ever – well no, not the dumbest, take some hose that you have hanging around anyway, some duck tape and voilà, half an hour later, sa blonde dit “j’ai encore chaud”
#52 JSS on 08.01.13 at 9:35 pm
Dundee REIT (D.UN) -> 7.44% yieldXRE -> 5.03% yieldMorguard REIT (MRT.UN) -> 6% yieldH&R REIT (HR.UN) -> 6.4% yieldEach pays monthly distributions.Excuse my reach, while I dip into some j
……..
Impressive
What do you call
March 15 to July 30
212 present… USDCAD Batman Camel Toe
I will answer for you, bull shit.
Ahhhhhhhhhh
Garth not expecting you to be nonstradamus, I’ve lived by what you preach with regard to renting and staying liquid. I as much as you am shocked that this gas bag keeps inflating, but the fact that you have been consistently wrong about re in Calgary leads me to believe you dont know much about the calgary market. And saying ‘as long as ppl here believe it’s different’ the gas bag will keep inflating? Well ofcourse they think it’s different, and they always will. I’m beginning to think dillusional is the new normal and 2 yrs from now the average house price is gonna be 20% higher not lower (in Calgary).
Sigh. No city’s different. But everyone has to learn. — Garth
#23 fun in the sun on 08.01.13 at 6:53 pm
==============================
I am looking to buy some REIT’s but the question I have is that if REIT’s fall in price surely their yield goes up doesn’t it?
Or are REIT’s like preference shares paying only a fixed %?
And sales being up because of the flood? Well whatever factors are at play the simple fact is that sales are up and listings are down, simple economics would tell me that demand is up, with higher demand come higher prices. Calgary is a long ways away from a correction, and there is no indication what so ever that prices are gonna come down. Nothing. A half percent increase in rates and lower commodity prices won’t pop this bubble it’s got a life of its own, credit! And there is no incentive for creditors to stop lending as all loans are backed by the govt.
I don’t plan on buying into the insanity but have come to terms with the new normal. My call is the housing dillusion will continue for decades as its ingrained into the new generation of simpletons.
#50 Godth,
there may have been some confusion if the Fräulein was talking about a condo or Eigentumswohnung, but condo possession there works just like ours. You own the unit, and the condo corp – of which you own a share – owns everything else. I’ve checked the Berlin.de site and found nothing to indicate that property ownership there is different.
The boom in Berlin is due to it’s being the new federal capital, so people involved or dealing with the government have to live there. The boom in Munich is because everybody wants to live in the German BPOE.
“A substantial percentage of our clients at Baker Real Estate Incorporated buy condos as an investment to add to their financial portfolio. Real estate remains one of the soundest investments anyone can make. In fact, many people feel more comfortable investing in the tangible asset of a condominium rather than stocks and bonds…..”
====================
Read more (Investment of a Lifetime – pg. 25) as only an UNREGULATED condo-pimping pop tart could get away with publishing such laughably erroneous advice without being thrown in jail……
http://virtual.homes-extra.ca/doc/Toronto-Sun-Homes/0728-homes/2013072602/25.html
TO and GTA Stats and Sales 2013/08/01
http://recharts.blogspot.ca/2013/08/416905-condo-sales-and-stats-2013-08-01.html
http://recharts.blogspot.ca/2013/08/905-sfh-sales-and-stats-2013-08-01.html
http://recharts.blogspot.ca/2013/08/416-sfh-sales-and-stats-2013-08-01.html
#22 Marco
Not sure what point you’re trying to make. In your scenario you’re the renter and you get to keep the DVD …
#50 Godth
Damn Foreigners :)
——————————————————
I think some of the differences are educational. Remember the joke in the good old days when Americans and Japanese would meet to do a deal. The Americans would bring 50 lawyers and the Japanese would bring 50 engineers. Same thing with Germany, they place a high emphasis on engineering/technical training. Canada could do better and should, given the global challenges.
http://www.conferenceboard.ca/hcp/details/education/graduates-science-math-computer-science-engineerin.aspx
I really thought you were going to mention S’toon in your blog for a 3rd straight day. Nice posts this week Garth!
http://www.saskatoonrealtors.ca/Mediarelease/DetailedArticle.aspx?Article=184|1
@Marco
shoo fly…if you are so hot and sweaty over your RE (over)investments, why not just cut to the chase and go join the circle jerk over at BC RE talks.
Rents are tied to INCOMES, not to your deluded self-beliefs of your own grandeur…idiot.
RE: #8 Matt on 08.01.13 at 5:36 pm
I bought CPD and XRE based on users of this pathetic blog. These ETFs SUUUUUUCK! All my other stocks are soaring.
There is nothing wrong with those ETFs. They are simply tracking their underlying “stocks”. You would have done worse than XRE if you held only one REIT such a D.UN or REI.UN. ETFs provide diversification, nothing more. Same goes for Preferred shares and their corresponding ETFs.
If you want to “blame” anyone; blame the US FED, or better yet, yourself for taking investing advice from blog dogs.
#8 Matt I’ll gladly trade my 300 shares of POT I bought last Friday for your CPD or XRE. Me thinks I’ll stick to swing trading ETFs from now on for the D.I.V.E.R.S.I.F.C.A.T.I.O.N lol
“dangerous as, oh, owning a blue chip stock like PotashCorp” Damn no kidding.
Yes I know how to spell diversification
the fact that you have been consistently wrong about re in Calgary leads me to believe you dont know much about the calgary market.
Wise words from Joe Calgary. Garth, you need to acquire some humility. I realize the chances of this getting published are slim and none, but Garth you shouldn’t have deleted all of Brad in Cowtown’s comments. It would have lent some much-needed credibility to your blog. Fortunately we get to see the truth on other blogs, but that doesn’t help the readers on here.
Disrespectful, ad hominem posts are not published. If you can’t make a point without venom, you don’t have one. — Garth
#13 fun in the sun on 08.01.13 at 6:00 pm
Garth… Garth… no comment on the REIT massacre? 20% collapse more coming. … come on Garth.. why didn’t you warn your lemmings to sell their REITS? why didn’t you tell them to sell their PREF Shares? what’s wrong Garth. selective analysis?
US Rates SKYROCKETING even though Bernanke will print 85 Billion this month, and next, and the one after that, and the on after that….
bye bye REITS, bye bye PREFS… bye bye bye
No reason to sell assets with a 5 per cent yield because of a temporary dip. Dumb move. — Garth
——————————————————-
Since when does he suggest buying or selling asset classes. That is the point of balance; the fall in reits is somewhat offset by the rise in other unrelated assets. If you re balance as he suggests, you would be buying more reits, which will likely rise in the coming weeks. I know, I know, I’m talking crazy.
59 Herb
She was due to inherit a house so that wasn’t the confusion. I remember the conversation as I kept reconfirming what I was hearing all the while thinking about how Canucks would swallow that pill. No matter, could have been misinformed. Nothing new.
If German BPOE stands for best place on earth I’d agree with that. If I was looking to move to Europe Munich would be at the top of my list. Easy adjustment for a N.A., clean, central location, not too big, good food, nice park with beer gardens timed just right for the inevitable nature breaks and refills (efficient Germans) etc. ;)
#63 Marginal
The Avro-Arrow sums the situation up. Hewers of wood and drawers of water we remain, right where we’re meant to be.
City of Vancouver taxpayers facing upwards of $300-million loss on Olympic Village: Expert
http://www.theprovince.com/news/City+Vancouver+taxpayers+facing+upwards+million+loss+Olympic+Village+Expert/8733640/story.html
================================
Quote:
VANCOUVER — In early 2009, Mayor Gregor Robertson warned Vancouver taxpayers that they were on the hook for “all of” the $1.1-billion Olympic Village project. After five years that dire statement is coming much closer to reality.
The Province’s analysis shows that with marketing costs still mounting, and about 130 hard-to-sell village homes left, when the last unit is sold final taxpayer losses of over $300 million seem realistic.
=====================================
Bail out now or be screwed forever
TO and GTA Stats and Sales -End of the month stats 2013/08/01
http://recharts.blogspot.ca/2013/08/my-estimates-for-july-2013-for-toronto.html
Sorry for not having very detailed reports this month
I might be able to post better stats, I am working on improving them…
416-Detached ~798K down from 866K in June (752K in July 2012)
416-Semi Detached~594K down from 618K in June (526K in July 2012)
416-Condos -360K down from 366K in June (347K in July 2012)
905-Detached ~585K down from 598K in June(522K in July 2012)
905-Semi Detached ~418K-420K up from 411K in June (437K in July 2012)
905 Condos 270K-275K down from 288K in June (328K in July 2012)
I know that my End of Month or Mid-Month stats did not entirely match TREB’s numbers but, as I mentioned before I am more interested in trends rather than exact numbers.
Garth – You see Ross Kay’s new piece: Resale Home Sales have actually declined 12.86% Nationwide for the first six months of 2013 ???
#44 Sheila
ETF’s are far superior to mutual funds! Lets see, most fund managers can’t even match their benchmark let alone the MER’s they charge? Go figure? I agree with you on the funds you mentioned since the cost is far lower than the norm.
Still though I like being fully invested in a product that doesn’t include market timing or a cash position.
Maybe thats the reason why rebalancing ones portfolio has its merits. Skimming profits off the winners and buying underperforming quality ETF’s is easier said than done. But it does work! Good luck.
High oil prices will keep Calgary Rollin’. Sales are still strong and listings are low.
XRE has only 15 REITs with 35% in Rio-can and H&R . Far from an ideal diversified investment at a .60 MER. The other REIT ETFs are not much better. There has to be a better way to invest in REITs.
About the picture: Etienne (by email) – “This was taken on the south shore of Montreal. No joke!” Garth – “I give up. What are they doing?” Etienne – “Using the car AC to cool the apartment.”
– Gotta be Longueuil!
#4 Spiltbongwater on 08.01.13 at 5:13 pm
Meanwhile in Vancouver, sales are apparently on fire. Up 59% YoY for detached. Is this the last of the Greaterfools gitting in, or a HAM sammich
————————————————-
i believe it.
in the last week of so the sold stickers have gone up on every single dog listing (overpriced, poor construction, etc, mostly semi infills) round here. (comm dr)
the worst ones had been for sale for up to 3-4 months, but ALL are sold now. seems there was some big summer rush to get in.
nice half duplexes for 800k, SOLD. crap built new duplex 650, SOLD. teardowns 850-900 , SOLD.
a newer listing of two side by side teardowns at 980k each has failed to sell in 2 weeks- it will be a new high water mark if they get the asking price.
#33 Sign of the Times on 08.01.13 at 7:48 pm
=======================
Just figured this out..
Given the person owns a Drugstore….tell them to write a prescription for Viagra and pour it on the assessment…guaranteed the price will go up !
Ray can also be part of the 1% of Canadians with investable assets Greater than 1 mill
BTW with $1.5 mill he does not need an ETF for diversification. He can mirror the holdings of an etf he likes buy all the companies individually and avoid the MER even if its only .5%
Horrible advice. He needs balance, not just a bunch of stocks. — Garth
Raymond, we are currently living the life Garth is proposing for you – and it feels great! Similar ages/net worth all invested, successfully launched the kids, and renting for the last year in Calgary. We were able to find a great house for us last summer for $2000/month in a good community. Tenant Insurance is only about $25/month and landlord installed new water heater and bbq gas line. We want to move at some point and love the flexibility renting now gives us. I don’t believe these prices in Calgary can last.
#57
“I am looking to buy some REIT’s but the question I have is that if REIT’s fall in price surely their yield goes up doesn’t it?
Or are REIT’s like preference shares paying only a fixed %?”
The distribution or dividend for reits are exactly like dividends on common shares. The same dollar amount is paid per share to all the shareholders. (That amount is raised by the company, usually yearly.) Your % yield will be based on your purchase price (book value). When someone buys shares at a higher price per share than you did, their % yield will be less than yours, even though you are both earning exactly the same dollar amount per share. Vice-versa, when someone buys shares at a lower price per share than you did, their % yield will be more than yours, but again, you both earn the exact same dollar amount per share.
Garth. Did your incredible book sales have anything to do with your publisher going out of business?
My former publisher filed for bankruptcy a year after I severed my relationship and established my own profitable publishing enterprise. Stupid question. — Garth
#46, you sound a bit jaded. You are either a “poor” excuse making whiner who has fired several advisors…I know the type….or you are a brilliant DIY investor who knows everything about asset allocation, checking emotion at the door, tax planning, net worth building (key focus of wealthy people by the way) and all else money. There are bad advisors for sure. But, with some modest interview and research skills, good ones are not hard to find, and I know lots who are honest, diligent and work hard for their clients. Many good ones however might not choose YOU.
On the topic of fees and commissions, there are bad and good ones on both sides. The key is disclosure and understanding the value you get in either case. I understand Garths crusade with ETFs, as that is his schtick, but as I always say “same crap, different package”. I am aware of fee based advisors who use ETFs and their cost is similar to a mutual fund after their fee and trading costs. You can actually get very low cost mutual funds using fee based funds or high net worth series. Sometimes you are shaving hairs on overall cost. I would be much more concerned and interested in overall VALUE provided by an advisor. A good Advisor can be invaluable.
A fee-based advisor should cost just 1 per cent, with no trading costs. Far less than owning typical mutual funds. — Garth
Sales of single family homes in Vancouver for the last 30 days are pretty much dead even with 2012. here are the numbers:
Year Sales
——————
2013 701
2012 700
2011 1065
2008 677
hardly what I would call on fire LOL …
pw
It is different here in Europe. Whenever I try talking to some locals about real estate and owning a home, their eyes glaze over in less than thirty seconds. I can’t explain it.
They are just not interested. But then, with rents in rural Europe being as low as they are…..can’t blame them. Even if real estate is as cheap as it is. At the moment it’s mostly foreigners from Scandinavia and Britain buying up everything.
That shop and triplex next door for 107K? Just sold three month ago to an investor for 50K…….
http://theceliachusband.blogspot.fr/2012/09/for-sale.html
Wow, loadsof nebbie investors here, best investing advice I can give.
1. Subscribe to Canadian Money Saver, miles better than Money Sense
2. Read Millionaire Teacher by Andrew Hallman.
Regarding the so called blood bath, well it’s what I call going on sale, buy low sell high. For example RioCan inherited my shares from my Dad and thanks to all the carping here checked the price.
OMG there on sale, since my dividends on being reinvested means I get more for my money
Andrew Hallman why I like falling prices
http://andrewhallam.com/2013/07/why-the-baby-boomers-children-should-hope-for-falling-stock-prices/
#22 marco – very stupid remark, Marco. The Germans don’t sit in pubs all day and get paid, that’s the Canadian experience (socialism). The Germans are among the most industrious people in the world, again unlike the Canadians. However they are like Canadians in that both are adverse to risk-taking unlike the Americans who have gone to the top with that attribute along with a few more that we can’t seem to copy so we will continue to wallow as a third tier(not world) country but many of us sure love to criticize them on this blog.
Major question. I have a neighbour who is not receiving what I think she is due. She is 72 and divorced. She is getting 1,200 dollars a month. She is Portuguese and and doesn’t know what she is entitled to. Can she get any more, she has 200,000 in savings, any advice.
Raymond, you live in Calgary not Germany. Confidence in Canada is high right across the country, buy the house, enjoy our great country.
Potash will stabilize, Keystone will be built, the Americans are not that stupid. In a world headed for a population of 8-billion people, western Canadian oil is headed nowhere but up!
How many worried realtors post here? The RE market is tanking in the GTA. Many hurting realtors are unable to make a sale in over a year now. OUCH
Are Pigg’s flying?
From today’s Toronto Star:
“The number of $1 million-plus condos for sale in Toronto has reached such “shocking” levels, it would take about 20 months to sell them all given current demand, more than four times what it would take to clear the current inventory of more conventional condos.
What’s even more worrisome is those numbers don’t include “shadow inventory,” which could easily exceed the number of high-end condos that were listed for sale on the Multiple Listing Service as of the end of June, says Toronto realtor Andrew la Fleur who did the math recently on behalf of an investor.”
http://www.thestar.com/business/real_estate/2013/08/02/shocking_number_of_luxury_condos_for_sale_on_mls.html
This will get some angry: http://tinyurl.com/pw2zeol
http://www.thestar.com/business/real_estate/2013/08/02/shocking_number_of_luxury_condos_for_sale_on_mls.html
“The number of $1 million-plus condos for sale in Toronto has reached such “shocking” levels, it would take about 20 months to sell them all given current demand, more than four times what it would take to clear the current inventory of more conventional condos.”
The only reason for any foreign investor or mogul to buy a $1mil+ condo is if they suspect to make more in capital gains on the unit than they can get elsewhere with that $1mil. It is not being purchased for recreation, the mega rich will just get a Four Seasons Penthouse Suite while they are in town or its equivalent for the TIFF or what-have-you.
Now that they know the condos are at best going to flatline in value, they aren’t able to sell them. The Greater Fools can’t save this end of the market because they can’t afford it.
Why would you want to buy a new house. Don’t you know they are made out of composite wood and not plywood. Its like buying Ikea furniture. Some of these new homes will deteriorate faster than say 30-40 year old homes already out there. Do your research before you buy a cardboard home.
Heed my advice and succeed in life;
Gold is for girls
Diamonds are for drug dealers
Real estate is for the middle class
Day trading is for crack heads
Owning your own Business is brave but smart
Stocks are a gamble but 1/2 is safe, more is gambling.
Cash is invaluable at 1/4 lets u buy during a panic
GIC’s at 1/4 helps u sleep
My hero;
“People say nothing is impossible, but I do nothing every day.”
Winnie-the-Pooh
Hey Bogleheads ……
iShares XIU …. price on inception $10
…. today $18
You’ll never do better than treading water ….
Check out t he latest from Torstars resident real estate shill Susan Pigg:
http://www.thestar.com/business/real_estate/2013/08/02/shocking_number_of_luxury_condos_for_sale_on_mls.html
It’s a masterpiece of dis information. It starts off cautionary, but ends with a don’t worry, you can still rent that million dollar condo out. Oh, and note how that HAM investor swooped in and bought the condo.
Just read that “July home sales climb 16% in GTA from year ago”.
I guess the big correction will come next year…but if not next year, it will most CERTAINLY be the year after that.
If that doesn’t happen, then without ANY hint of a doubt, it will all come CRASHING down the year after that.
I mean, the data just doesn’t lie.
“The woman who bought thinks she got a great deal, and plans on spending a hundred in renovations,” she said. “What do you think of that? Haven’t you been wrong?”
Thank the banks for having such generous lending standards – and these emergency interest rates are sure allocating capital properly….. The neighbours to the south recently learned the danger of leverage, it’s really time we do too.
I think sometimes what is $500,000? It’s an absurd amount of money, especially when the lifestyle is pay as you go (cash only).
At # : The Real Kip, you said, “Keystone will be built, the Americans are not that stupid. In a world headed for a population of 8-billion people, western Canadian oil is headed nowhere but up!”
Uhhhh, I don’t know how to break this to you nicely, so I’ll just rip it off like a Band-Aid. The Keystone pipeline will never be built through the U.S., especially with that of tar sands. Americans are not stupid enough to allow it for a number of reasons (and we aren’t). First, The U.S. now sits on the largest oil and natural gas reserves in the world – not Canada (not sure if you got that memo). The U.S. is developing new technologies by which to extract these resources, in turn creating new jobs and propelling new advances in the industry. The U.S. will be energy independent by 2018, so the need for Canadian tar sand is moot, thus also making Keystone a moot point. Politically speaking, Keystone is a nightmare to touch it, so nobody on this side of the border will. So, even though the world’s population will soar beyond 8 Billion in time, it really isn’t a valid point as energy independence is the goal within our country, along side reducing the need for oil and gas, creating new technology toward cleaner fuel and lower greenhouse emissions. One country hanging on to the same old dog and pony show… Another country seeing an opportunity to lead to newer and better technologies.
“No reason to sell assets with a 5 per cent yield because of a temporary dip. Dumb move. — Garth”
Garth, I think you are missing the point. You have advised readers to buy ETF’s and enjoy 5-7% yield rather than paying off the mortgage. Then you suggest to sell these ETF’s and apply proceeds toward mortgage before renewal. Right?
The recent dip in REITS underline the risks with that strategy. Especially if you are correct about interest rates as an increase will hurt those ETFs.
Don’t get too excited about REITs that pay distributions of 5-7%, and should form only a small part of a balanced portfolio. If you have 50% or 70% of your liquid net worth in one asset class, fail. — Garth
#86 Meanwhile in Europa,
do not confuse France with Europe. Look at the other countries to see how “cheap” RE in Europe actually is.
We once looked at buying a farm with good acreage and a giant, fortified stone house in Franche-Comté for all of $100,000. Tempting, but didn’t quite fit into our plans.
#89 Beach Girl,
impossible to suggest what your neighbour should receive without knowing what she is entitled to from what source. Is the $1,200 from CPP/OAS/GIS? Maintenace from the divorce settlement? What does her divorce settlement specify? What is she doing for income from her $200k savings? Etc.
#101 This dosn`t do much for the Keystone argument.. http://ca.news.yahoo.com/blogs/geekquinox/incredible-video-captures-massive-cloud-petcoke-dust-rising-141255589.htmlmuch
Woke up at dawn, read the blog & comments again, (read them late yesterday evening) & counted my blessings as the sun rose & a spoiled cat purred on my lap. And I thought about Garth’s posts & the varied comments over the past month or so. I’m not an economist or financial planner or business type. That’s been both a blessing & curse as I take the first scary, painful steps in investing & start climbing the lower slopes of Learning Curve Mountain.
Mistakes I’ve made so far: “I’m Canadian – I should be loyal to the Canadian markets.” So I threw almost everything into Canadian equity funds. THEN I did some proper research. Ick! I’m now 30% into Canadian holdings & that’s too high – want to drop that to no more than 20% but rather than sell to rebalance, (tax implications), I’ll wait until some cash I’m expecting comes in & will buy more international stuff.
I’m a bit on the aggressive side but 100% equity holdings is insane – even if the money isn’t needed for a while. My crystal ball is at the shop so I could be blindsided & need the funds – life can do that. I’m now 75% equity, 25% income – again, need to put more into income & that can be done when I add to holdings after the cash comes in.
I bought 2 individual equities, a sin no doubt for which I’ll pay by having to detail The Harley for a year – getting there uphill both ways, barefoot & in a sleet storm. I researched one very carefully, bought in at a reasonable price, set a target price for selling, sold, (I didn’t wanna sell! Could have made more money!) & locked in a profit. We won’t talk about the other one which was a classic Greater Fool cockup – bought on hype & emotion. Losses there, (so far), have negated gains on the other. I’m still in it, possibly making another classic mistake, hoping the price will come back up. We’ll see.
I’m about to be shot again – MFs instead of ETFs. HOWEVER, I still haven’t properly researched ETFs, how they work, fees etc. I may be losing some gains right now but I will stick to one of my cardinal rules: “Don’t get into something you don’t understand.” Baby steps…
But as to the mutual funds – most of them are Index funds & the others were as low an MER as I could manage. Two sector funds are down, (energy & REITs), but those are cyclical. I wants me some more REIT.. long term for many reasons, they strike me as a good play. I see more & more people, especially those retired or about to retire, getting into rentals & I see more & more rentals going REIT. Commercial & business REITs – I see those as the best way to manage properties as efficiently as possible. A good company will put together a good management/staffing policy & in terms of services needed for properties, volume can make for efficiency in contracting for supplies & services. From a tenant perspective, a ‘poor’ REIT landlord isn’t fun. If they’re pushing too hard for profit, they can often cut the wrong corners & end up losing good tenants & attracting tenants no sane person wants as neighbours. Long term, it does the REIT no good – they ‘earn’ a reputation as a sleazy landlord & things spiral downwards. Being careful there though – suddenly everybody is going REIT so it’s a guarantee there will be some icky products out there that folks will buy thinking: “Its a REIT, how can I go wrong?”
So far, I’m averaging returns, (mostly on paper), of about 7-8% after expenses & taxes. As I learn more & invest ‘better’ & if Mr. Market co-operates, that may improve. But I’m not dissatisfied.
When I look at the economy & markets, I look more at the ‘soft, squishy’ people factors. We are social animals & in general hang together & act together – bad or good. In a herd of cattle, when one animal sees or percieves danger & starts running, the others do with a stampede as a result. Individual steers don’t stop & do individual assessments of the risk. “Hey Carlos is booting it, must be a reason – I’m outta here!” I see many ‘investors’ doing much the same. It’s easier I suppose, than doing your own reading & research but boy can you screw yourself that way. Key word there is YOURSELF. Sometimes it makes sense to do what others are doing, sometimes not. Only you can judge what’s best for you & if your not sure – seek good advice.
I’ve noticed here in the Blog Dog pack a very human tendency to post along the lines of: “My methods, my holdings are better than yours – NYAH! Owning a house is stupid. No it isn’t – renting is stupid. My ETFs beat your individual holdings any day. Oh yeah, my play on ACME widgets netted me a 63% net gain in 2 months – beat that!”
We never do leave the playground or school yard, do we? A lot of it is a reflection of insecurity about what one is doing. I’ll admit, I’m afraid of making mistakes but… if I don’t take any kind of calculated, (as best I can), risk – no rewards. It’s also hard to overcome what we learned early in life – that becomes ingrained. If all we’ve heard & seen is that you can make a killing on real esate, (primary home & moving up) & we’ve seen it work for our parents & grandparents – we react best to what we KNOW. We’re creatures of habit & close to home example. It matters way more when Dad sells the house for 5 times his original buying price & we see that than it does to hear some bloviating economist talk on BNN about a ‘sound strategy’. It can be so very difficult to realize things ain’t what they used to. But things are never what they used to be. Cycles rinse & repeat with unique tweaks to each cycle based on politics, macro & micro economics & what I call ‘necroponomics’ – analytical autopsies of dead investment strategies to see what went wrong & what shouldn’t be repeated.
But the young haven’t been around enough to experience any cycles except their souped up new Schwinn or Kranked mountain bike. I’ve noticed the twenty-thirty something crowd are as reactive as they’ve ever been. We aging farts tend to call them slackers, (most aren’t) & they’re determined to prove us wrong. How? By achieving the milestones WE have told them equate to genuine adulthood & unfortunately these days, that involves insane debt levels you need to get into most housing markets. And yes, most of the younger buyers look at monthly carrying costs as they are now – they don’t look at total amounts to be repaid or what happens if interest rates go up. Here’s where I LIKE The Jar Lady – she points that out in very clear & simple terms. Her material isn’t a bad start at all for young house hornies who are in over their heads. Follow her advice or an approximation, get your fiscal house in order, (although she’s a bit too big on real esate for most of her clients), then get into proper long term investing/savings strategies.
And finally, ( I DO ramble), I thought of the responses to Karen’s post on Wednesday. I was dismayed at the many negative posts. Yes, what she’s considering is a bloody tough road. Farming isn’t for wimps, no matter what type of agriculture you’re getting into. But our ancestors came over & many had never farmed. Those who had had worked land in a very different climate & environment with many more supports available. They came over to start a new life & that took guts.
I’m encouraged to see people willing to gamble on a different life. Whether it’s living small or wanting something more connected to the land… stress reduction, (city stress), or whatever; if you think you can make it work & have done as much research as you can – go for it. It’s an example of the enterpreneurial spirit we desperately need to encourage in people today.
Just as there are many ways to screw up one’s life, (personally experienced list available upon request), there are a ton of ways to do it right. Life is like investing – it’s best to be balanced & diversified as best you can be. At certain stages, you’ll be overweighted in certain obligations, (kids’ debts, mortgage) & at others, overweight on the more fun stuff. You’re trying to live a life where, within your interests & personal charactoristics, you experience enough to stretch your heart & mind, enjoy a boatload of pure wonder & end your days reasonably satisfied.
I’ve never heard of anyone on their deathbed wishing they’d spent more time at the office or washing their floors.
Have a great long weekend everybody. I’m heading out to my garden – heavy date with some weeds & a few butterflies & jewel toned insects.
#28 Smoking Man on 08.01.13 at 7:17 pm
Why does no one want to interview me.
After all I have the best crystal ball going.
9 bubbles, award all, bubble heads.
Smoking Man we have interviewed you while you were sleeping. We used drugs like sodium pentothal, sodium amatyl, scopolamine, mescaline, LSD, and hypnotic benzodiazepines to get what we required from you. We are MK-Ultra. We know everything about you. We know you smoke, drink, gamble, invest wildly in the stock market, drive a boat when you are drunk, work downtown in the financial towers, and you live in a home in Long Branch by the lake. You are connected with Aglo3 and Keysme as business ventures. Your birthday was in July. MK-Ultra knows everything about you and what we found is that you are not the true one, the messiah but rather an anomaly in nature a quirk, a space oddity, a Smoking Man. Scary, paraniod?
http://www.infowars.com/the-cia-james-holmes-mkultra-and-truth-serum-torture/
Max Keiser seems to be reading Garth’s books :). And so far no mention of gold & silver over a period of 25 mins.
http://www.youtube.com/watch?v=LNyLLmdlPoE
Disrespectful, ad hominem posts are not published. If you can’t make a point without venom, you don’t have one. — Garth
Garth, that was laughable. You were happy to publish comments like the following…
“…you ignorant math deprived slut”
#46 by Retired Boomer http://www.greaterfool.ca/2012/07/20/outrageous/#comments
“Garth is doing his part in telling the Canadian public the truth about those greedy, evil , criminal, uneducated , lying , dirty realtors. Criminal realtors are uneducated but are masters of propaganda and lies.”
#31 by spread the truth bloggers http://www.greaterfool.ca/2012/07/19/h-s-m/
“These RE salespeople should be lined up and shot.”
#52 by bigrider http://www.greaterfool.ca/2010/10/27/markageddon/#comments
“Kicking (Flaherty) in the balls–Repeatedly!!”
#7 by Dark sad person http://www.greaterfool.ca/2010/10/19/were-different-2/#comments
What you really mean is something along the lines of disrespectful comments which agree with my agenda will be published.
So, you went back three years on this blog, where there are 296,000 published comments, and found four that I missed. So happy you have that kind of time to waste. My words stand. — Garth
Dr. Sherry S. Cooper predicted it right. She has better credentials compared to you.
She said one more thing about you, a clock that is not working will show the correct time twice a day.
still going strong. http://www.thestar.com/business/real_estate/2013/08/02/toronto_real_estate_sales_soar_in_july.html
GTA sales for April-July 2013 are lower than year-ago levels. Some ‘soar’. — Garth
pardon my bluntness, but there are some dumb a$$ comments today from the Calgary and Vancouver contingents.
Do you not remember 2008-2009 when the Calgary market went into red-alert panic mode and dropped off a cliff?
Do you not remember that it was a 1% prime rate that saved your hides and blew the bubble up, again?
Do you not realize you are solely dependent on two commodities that are being deeply marginalized by cheaper American producers?
And please, explain to me how new York, San Fran, London, Tokyo, Miami and Dubai could all have real estate crater, but your prices will stay safely plateaued after the bank of Canada rate backstop ends in a year or two, while your left to pay back a 30 year mortgage that renews within five years at 2x higher rate?
Please look up leverage and the extreme danger that comes with low bond rates that begin to rise.
it’s child’s play to see that in 5 years this Canadian housing ponzi will be completely obliterated by normal rates. Trouble is, Canadians with mortgages that reset every 5 years live in a make believe land where what happens today must mean it will go on forever.
Never has it been so, and never shall it be. You are picking up dollars bills in front of a steamroller. Let me know how that works our for you in 5 years or less.
#27 Turner Nation
Wait until the equities fall at least 20% over the next 12-18 months.You never talk about REIT’s falling double what government bonds because you can’t use your name anymore.
You are a trader not an investor.I don’t care about the value of my bonds.hey will mature with full value.I care about the $225 a day 365 days a year income I am raking in.I win everyday.
# 107
You realize the good doctor sold her house right?
Canada, and Mexico part of the ‘Homeland’ says NSA surveillance program.
http://www.theatlanticwire.com/politics/2013/08/welcome-homeland-mexico-and-canada/67874/
44 Sheila on 08.01.13 at 8:26 pm
Absolutely everything you said was absolutely wrong. Please get help and stop giving advice.
#106 TheCatFoodLady
What is this blog now – Dear friggin abby
What you guys are missing about the XL pipeline is that the flow is reversible, it is a pipe after all isn’t it?. Oil can flow from Can to US, but also can flow from US to Canada. It takes an Engineers brain to figure that out. So if today Canada has the oil they export it to US, if tomorrow US has the oil they export it to Canada. Bingo a great use of the pipeline, now that said, lets build this sucker up. Oh yeah Americans were not that smart to figure this out.
@#103 HERB
while not all countries over here have inexpensive properties, most do. It’s a matter of boots on the ground and not Internet searching.
Portugal, Spain, France, Eastern Germany, southern Italy, parts of Austria and of course all countries east of Vienna.
@T.O. Bubble Boy, post #32:
Isn’t that always how it works? When these inexperienced “investors” panic and sell stocks or ETF’s at cheap prices in underperforming sectors, someone like you or me scoops them up at those cheap fire sale prices. I wouldn’t be at all surprised if Warren Buffett is also scooping up these kinds of assets while they are on sale now. It seems so ridiculously simple, I mean what exactly is so hard to understand about buy low and sell high? REITs and preferred shares are on sale now, just like resource stocks (including gold mining stocks) were in the late 1990’s, tech stocks in 2003, American, Canadian, and European stocks or equity funds about this time of year in 2011, bond funds in 2006-07, or all equities in 2008-09.
IM in C on 08.02.13 at 9:03 am Check out t he latest from Torstars resident real estate shill Susan Pigg:
http://www.thestar.com/business/real_estate/2013/08/02/shocking_number_of_luxury_condos_for_sale_on_mls.html
It’s a masterpiece of dis information. It starts off cautionary, but ends with a don’t worry, you can still rent that million dollar condo out. Oh, and note how that HAM investor swooped in and bought the condo.
———————————————————-
LOL….Torstar is in a world of hurt and soon to go bankrupt in a few years. They have to sell out and print paid for propaganda for the RE industry or else they will be jobless which will happen and is happening right now. The media is nothing more then paid for propaganda.
#116Marco – Figured it might as well be this morning. I’m in a great mood – don’t harsh my mellow & besides, you used up both your & my share of manly belligerance & pseudosarcasm for the day.
#119 Meanwhile in Europa,
my boots have lots of time on the ground in Europe. Now talk about countries and places one would actually want to live. After all, you can pick up cheap housing in parts of Canada too, not to mention Latin America etc.
I’m glad you found your paradise in Jarnac, but it, France and Europe are not for everyone, so stop making them the measure of all things real estate.
The 162,000 increase in payrolls last month was the smallest in four months.””
Yeah but lets dig a little deeper comrades. The us sleuths don’t brag about the details they just cheer the number.
2000 professional jobs created (engineers, doctors,)
100,000 fast food servers and delivery guys
60,000 table dancers.
Can’t rag on anyone for trying to earn a buck but lets not pretend the us is on the mend. That’d be like saying Weiner can keep his wiener in his pants.
The us is getting ticked off. Pukin kicks mud in BO’s face and lets the snowbird nest there. Other countries laugh when the us barks and they hoard terrorists like we hog ice time and beers.
History will repeat itself and if the us econ fails, watch out, they’ll be lookin for a good old fashion war to redirect the worlds focus and kick someone’s butt.
I think they still like us
All new jobs are now “part-time” or “temporary” … get used to it. Nobody wants to employ you for life anymore. It’s the new take on the old reality … you know, the one where profits are funneled to the top, and “debt” is used as a stick to beat your expectations down to reasonable levels.
#101 The American on 08.02.13 at 9:36 am
At # : The Real Kip, you said, “Keystone will be built, the Americans are not that stupid. In a world headed for a population of 8-billion people, western Canadian oil is headed nowhere but up!”
Uhhhh, I don’t know how to break this to you nicely, so I’ll just rip it off like a Band-Aid. The Keystone pipeline will never be built through the U.S., especially with that of tar sands. Americans are not stupid enough to allow it for a number of reasons (and we aren’t). First, The U.S. now sits on the largest oil and natural gas reserves in the world – not Canada (not sure if you got that memo). The U.S. is developing new technologies by which to extract these resources, in turn creating new jobs and propelling new advances in the industry. The U.S. will be energy independent by 2018, so the need for Canadian tar sand is moot, thus also making Keystone a moot point. Politically speaking, Keystone is a nightmare to touch it, so nobody on this side of the border will. So, even though the world’s population will soar beyond 8 Billion in time, it really isn’t a valid point as energy independence is the goal within our country, along side reducing the need for oil and gas, creating new technology toward cleaner fuel and lower greenhouse emissions. One country hanging on to the same old dog and pony show… Another country seeing an opportunity to lead to newer and better technologies.
Uhhhh, I don’t know how to break this to you nicely, but America is not the only country that requires fossil fuel in this rather large global village. Why sell at discounted rates to uncle Sam when we can sell to the world at our own rate. We will build pipe lines. We will employ people here to do so. So you miss out on some jobs in Nebraska, no biggy, right? The reserves in America can only sustain your own growth for the near future. Uhhh and I surmise you believe the DOE completely, unequivocally without doubt. You will not likely be exporting to China or Europe. So when push comes to shove America will always look out for its own interests first and screw the rest of the world. Never put all of your eggs in one basket! BTW I do not hate America, have lived and worked there for many years, have relatives and many friends still there. Just my snapshot of watching what America does best!
@119 Herb
Not making Europe measure of all RE, just mine. For now. Keeping an open mind, broaden my horizons. I highly recommend it.
Yes, Canada is a fantastic country actually (having lived there for 15 years Calgary and Cochrane), fact remains you have winter for 6 month. Didn’t cut it anymore for me.
As well, when you choose the bush in Canada for inexpensive housing options, you are still stuck with Tim Horton’s frozen donut dough and the Sysco truck for food options, whereas here (and Latin America) you get authenticity. Not to mention variety.
To each their own.
Now is the time to sell USA stocks and buy farmland
Don’t get too excited about REITs that pay distributions of 5-7%, and should form only a small part of a balanced portfolio. If you have 50% or 70% of your liquid net worth in one asset class, fail. — Garth
Well, after following this pathetic blog for 3 years and not buying a house. I have loads of cash in my rrsps and tfsas. I made good money in first quarter and sold everything, thought about buying a house. But now, Thanks go Garth, am priced out. Just can’t put 70% of my networth in house for 20% down.
So question Garth, i purchased alot of REITS and PREFERED ETFs, which currently form 25% and 26% of my portofio respectively. I know it sounds huge, but i am waiting for some form of equities correction. Then i will buy them to a level that reits and preferred are basically 6% each in my portfolio.
Is this a right strategy?
No. Get some help. Blaming others for your own actions is not a great strategy, either. — Garth
I need to tell a story that there are serious issues that need to be paid in life which involves money and a sense of parent responsibility in life if you have big money. So you send your son to Europe as a present for graduating from highschool, and after a nice trip comes home, and all is well, as he had a great time.
I know of a situation that was covered up, as months later a young woman in Germany hopped a freighter with a belly pop that could not speak a word of English on her way to Canada, but ended at the door of the family mansion looking like a drowned rat. She pointed to their son, and her belly with a nod, and they had a mess on their hands; need I say more!
#28 Smoking Man on 08.01.13 at 7:17 pm
Why does no one want to interview me.
After all I have the best crystal ball going.
9 bubbles, award all, bubble heads.
MK-Ultra will have a nice drink ready for you tonight at Seneca Niagara Casino. You know the girls that you always talk about meeting here. Well lets just say they are at the Casino for a reason. Enjoy the Crystal ball and have a drink on us. Red Wine perhaps? So you can show us bubble heads what you can do at the Casino tonight. We have a video of your last visit to the Casino.
http://www.youtube.com/watch?v=GmXGVDnPU9o
@Joe Calgary on 08.01.13 at 9:52 pm and Calgary Phantom:
If either of you have followed Calgary from 2004 until now, it is clear that for now that housing has gone up. Yes Garth may be correct about interest rates going up, or he may not. What if he is incorrect and the rates do not go up and prices still rise? Can you afford this? Given that rentals are the same as a mortgage in Calgary, investment aside, is it wise to wait, considering the reality that if rates do go up will you be able to renew the mortgage?
Calgary is a total ripoff when it comes to prices. Most of the houses are laughable and really worth around $200K but that is not the market reality. So is it really best to wait around if you can afford the place and afford the renewal and will be working another 30 years? Garth is not in the same position as youngsters who will be working another 30 years.
#118 Dupcheck the Engineer on 08.02.13 at 11:40 am
What you guys are missing about the XL pipeline is that the flow is reversible, it is a pipe after all isn’t it?. Oil can flow from Can to US, but also can flow from US to Canada. It takes an Engineers brain to figure that out. So if today Canada has the oil they export it to US, if tomorrow US has the oil they export it to Canada. Bingo a great use of the pipeline, now that said, lets build this sucker up. Oh yeah Americans were not that smart to figure this out.
—–
Keystone is for transporting crude oil from Canada that needs to be refined in the states. How would a pipeline that flows into Canada help Calgary oil sands producers with selling their product?
#122 TheCatFoodLady – I had no idea that this was a weekend holiday, as wish there was a woman in life who could clue me in about this all. I have about $20.00 to my name, and the banks will be closed until Tuesday as was going tomorrow. I need a cash loan to get me square, but caught me short once again in my sordid life, and hate to use credit cards; have about $200.00 in quarters, so might get rolling some.
#129calgaryPhantom on 08.02.13 at 1:21 pmvd
You have 51% of your portfolio in REITs and Preferred ETFs?
Please have a look at these model portfolios:
http://canadiancouchpotato.com/model-portfolios/
You shouldn’t have more than 10% in REITs according to The Complete Couch Potato model.
Hope that helps.
Best,
HD
@Dupcheck the Engineer, post #118:
You are right, the flow direction in a pipeline can be reversed, but not easily like the reversal of flow in a power line. I don’t understand all the details, but it can take months to make the changes necessary to reverse flow. Such changes are going on now with Enbridge pipeline #9 so oil will flow east from Sarnia to Westover (near Hamilton) and points beyond, ultimately to Montreal. For years the oil flowed west to Sarnia. Oh and by the way, the Americans have figured it out, as another Enbridge pipeline is or has been reconfigured to bring oil south from Cushing to Houston. When money talks, not only do people listen but the engineers figure out how to handle the requests it makes.
No. Get some help. Blaming others for your own actions is not a great strategy, either. — Garth
#135 HD
————————————
Let me rephrase.
Reits are 25% and Preffereds are 25%, of my “Invested” money.
So basically my portfolio is 78% Cash, 6% prefereds, 6% REITs, 2% bonds and 8% diverse equities.
Basically i just started on my portfolio. So loaded up on REITS and Preffereds. I wanted to wait in cash and enter equities/bonds portion of my portfolio after a little bit of correction/sanity.
Is it still a whacked portfolio/strategy?
If you don’t know what you’re doing, why are you doing it? — Garth
#128 jujubean on 08.02.13 at 1:01 pm
Now is the time to sell USA stocks and buy farmland
==================================
Farmland? Well not me…
If you follow Agenda 21…..you”ll see that the farmer becomes the cattle, to be herded off the land into cities.
IMHO, all this “boom” to frack the ground all over the country , if not globally…has an insidous agenda to “poison the well” big time. Farmers in the US cannot outbid the big exploration companies for water.
If the rural aquifers become contaminated…..the land is worthless, as one cannot do anything without a safe water supply. Then, we will all be dependent on treated water .
Agenda 21 is simply a means to crowd us into concentration camps called cities. The powers that be have always attacked the least brainwashed/ most independent, rural dwellers. GOOGLE Bolsheviks versus “Kulaks”.
Hey dude, you told that chick yesterday to go start a booze farm and she’s a computer bunny.
Where’s the logic Spock?
If you don’t know what you’re doing, why are you doing it? — Garth
When you have digital skills, common sense and the courage to live off the established grid – despite the challenges that brings – why not try it? Besides, if it sucks you can just drink a lot.
CFTO news tonight at 6 PM lead story ” GTA home sales surge 16% ” .
Pretty sure more people will see that story than read this blog.
Also, send Fernando at 109 a box of tissues.
This blog is to protect you against CFTO. — Garth
Hey Garth! When are we going to hear some “Boohoohoo, I lost 20% of my house and now I’m poor! Boohoohoo” stories? The closet you get to those types of stories is some single woman who bought a condo a few years ago and now wants to sell and move to Lindsay Ontario to grow turnips! Where the tsunami of destruction, the tornado of terror, the Rob Ford on a stag night stories you promised back when I first tripped over this blog back in April 2008?
I’m off to the spa now.
Love you lots.
Reits are 25% and Preffereds are 25%, of my “Invested” money.
So basically my portfolio is 78% Cash, 6% prefereds, 6% REITs, 2% bonds and 8% diverse equities.
Basically i just started on my portfolio. So loaded up on REITS and Preffereds. I wanted to wait in cash and enter equities/bonds portion of my portfolio after a little bit of correction/sanity.
Is it still a whacked portfolio/strategy?
———————————————
Just my 2 cents,
your strategy MIGHT be good, but only if you master it enough that you don’t have to ask if it’s right or wrong.
Ah relax … what we’ve been witnessing going on the past few months is a mad dash to purchase the glut of listings of those smart enough to list and sell at the very end and top of the cycle …. and those dumb enough to buy. We are just about through it.
by the way….it’s known as a dead cat bounce.
#136 Doug in London – the USA has not needed any oil or natural gas from Canada or anywhere else in the world since the late 1970’s, as this huge find was placed as classified at the highest levels as a direct order of the President to advance a hidden agenda; how about the biggest find in the world. One day they will put a royal flush down on the table, as there is only one thing they need from Canada, and that is a water diversion into USA. This will become a checkmate in the future.
Quebec immigration program stiffs B.C.
Quebec gets the investment from investor immigrants, but most promptly settle in Vancouver
Read more: http://www.vancouversun.com/Quebec+immigration+program+stiffs/8739039/story.html#ixzz2aqOsjPHi
===================================
QUOTE:
OTTAWA — The Harper government signalled Thursday that it will no longer put up with Quebec accepting thousands of deep-pocketed investor immigrants each year even though the majority settle in other provinces, especially B.C.
Immigration Minister Chris Alexander echoed complaints from predecessor Jason Kenney, who said in June that some immigrants are engaged in a “fraud” that enriches the Quebec government while costing taxpayers in B.C. and elsewhere a bundle.
QUOTE:
“If a person fills out Quebec’s Investor Program form and indicates their intention to reside in Quebec, but then it later becomes clear that the person never had such intentions, then goes straight to Vancouver without even going to Quebec, that would be fraud,” Kenney told MPs. “It is a crime. We are talking about fraud.”
The federal and Quebec governments operate parallel immigrant investor programs aimed at luring deep-pocketed foreigners who would presumably use their wealth and business savvy to boost Canada’s economy.
The cash-for-visa program is open to individuals with a net worth of $1.6 million and a willingness to put up $800,000 for five years, in the form of a guaranteed interest-fee loan. Quebec gets to use the money during this period for economic development.
The proceeds of the federal program are distributed to provinces based on their relative share of Canada’s economy.
The Quebec government, starting Thursday, will also pocket $10,000 for each application, up from $4,102. Quebec financial institutions, which lend immigrants the $800,000, and immigration consultants, who charge commissions averaging $80,000 to arrange the whole application, also rake in profits.
B.C. taxpayers, meanwhile, foot the bill for those who instead move here — in terms of health care costs, schooling, language training and other programs.
“Quebec is taking the money of immigrant investors and using it, but the British Columbia taxpayers must pay the price for the social services provided to immigrants selected by Quebec,” Kenney said.
===================================
Can someone explain this to me….my head is spinning.
Scenario : A person wants to immigrate to Canada.
—Current terms is $800,000 invested over 5 years
—The loophole is they go to Quebec first.
—Quebec financial institution lends the immigrant the required $800,000.
—Then Quebec Gov’t gets to use the $800,000 for 5 years interest free for economic development(whatever that means)
So…the immigrant shows some evidence that they have $1.6 Million, but one way or another..lend the host province $800,000 ?.
Why would one allow them to borrow the $800,000 from a Canadian Bank? Why not insist they have $800,000 cash sourced externally ?
What the hell is going here ?
Re: 137 Market timing doesn’t work. A major correction could be tomorrow, or 5 years from now while the market soars. And then what? Missing out on the gain, and then jumps in at the peak?
Set your asset allocation, and just buy in lump sum.
Garth to Bigrider at # 140- “This blog is to protect you against CFTO News”
Pea shooters against WMD’s.
#146 Trump:
Can someone explain this to me….my head is spinning.
Scenario : A person wants to immigrate to Canada.
—Current terms is $800,000 invested over 5 years
—The loophole is they go to Quebec first.
—Quebec financial institution lends the immigrant the required $800,000.
—Then Quebec Gov’t gets to use the $800,000 for 5 years interest free for economic development(whatever that means)
So…the immigrant shows some evidence that they have $1.6 Million, but one way or another..lend the host province $800,000 ?.
Why would one allow them to borrow the $800,000 from a Canadian Bank? Why not insist they have $800,000 cash sourced externally ?
What the hell is going here ?
——————————–
You got it wrong, the IMMIGRANT lends the $800k for 5 years and doesn’t get any interest during these 5 years.
Wondering if he has to lend the money to a business?
#146 Donald Trump
Quebec gets to give the finger to rest of Canada, because there is nothing feds can do about it without looking like bigoted bad guys.
Investor immigrants could always borrow the $800k, and no doubt most of them did. Allowing the money to come from a Canadian bank just makes sense, might as well keep the interest payments at home.
@Old man, post #145:
I don’t know where you get your information from, but it isn’t a reliable source. In 2010 about half the 18 million barrels per day consumed by the USA was imported, and half that amount (or 25% total) was from Canada, mainly Alberta. With increased production from fracking and offshore oil rigs, the USA imports less oil now but still imports about 40% and dropping. As for the water issue, if a changing climate leads to more droughts there will be pressure to pump more water out of the Great Lakes. One last word, all this fracking to produce oil consumes a lot of water. I wonder where it all will come from?
Canadians are so Stupid.
I just went through some research for a student who lived in HK all their lives but could not make it into the HK universities.
Now the killer is they live (visited) in BC just to give birth.
But will be going to SFU as a domestic student. (That BS) because these student (6 of them) didn’t pay a red cent into our tax system, yet they get the tax subsidies of a canadian citizen.
How can we let these things go on when Canadian are here starving and having problems getting into Canadian Universities and colleges!
#59 Joe Calgary
” My call is the housing dillusion will continue for decades as its ingrained into the new generation of simpletons.”
I don’t know how old you are, but with a comment like that, you’re obviously too young to have seen the many boom and busts in Calgary. This Canadian boom in housing has been on a roll for the longest period, ever. The swan dive will come, the only questions are when and how much.
Calgary’s fortunes turn on a dime, and are impossible to predict. But one thing is certain- nothing lasts for decades in Calgary.
Canadian are simpletons? When it comes to real estate, that’s an understatement. Canucks will follow this housing market right over the cliff, just like the Americans did with theirs.
The good news? Rental building prices will return down to a level where it will be profitable to be landlord, if you are interested in that sort of thing. You’ll be able to hire good skilled labour for a fraction of what they charge today. Because the battered housing market will ensure a glut of roofers, plumbers, electricians etc. Lot’s of cars, boats, motorcycles, RV’s (and, oh yeah, houses) for sale, cheap.
So there is an upside!
At #128: Holy Crap Wheres The Tylenol, I never disputed the global village approach. Great point! Errrrrrr, was it? That doesn’t explain why the U.S. would want or ever consider the Keystone Pipeline. WE DON’T NEED YOUR OIL! So, sell your oil to the rest of that global village. Our country has larger reserves than your’s. We could care less about some stupid pipe that will cause environmental issues, political issues, and fosters an environment for keeping the status quoe. Canada should be looking at ways to produce clean energy – not keep doing the same old dog and pony show. So, Canadians can be pissed all you want, but we Americans want NOTHING to do with this pipeline. Period.
Quote #1:
“Population: With a population of more than 12 million, Ontario is home to one in three Canadians.” (taken from an Ontario tourist website.)
* * * *
Quote #2:
“Almost 900,000 adults make use of Ontario’s social assistance system, with 464, 159 people using welfare and 430,858 using disability support as of June 2013.”
Quote taken a Toronto Star article: http://www.thestar.com/news/gta/2013/08/02/dr_robin_hood_case_shines_light_on_activist_doctors.html
* * * *
Does this mean that almost 1 out of 13 in Ontario is on Social Assistance?
When I went to university a couple of decades ago (in Ontario) one of my Professors believed the “Canadian Middle Class was Shrinking” for various reasons, many were falling into the cracks, and into the “Working Poor” and “Poor” categories.
* * *
Let us not contribute to our own downfall, if possible.
If trying to “live the Middle Class dream” is propped up by living a creditcard lifestyle, extending our lifestyle dream by buying NOW with little down (whether for a new car or realestate)…maybe living simpler….as some have suggested on this website…..
can keep us still in the Middle Class…but not with all the shiny bells and whistles, nor the risk.
Have a good weekend or long weekend.
Good reading…..
http://patrick.net/housing/crash1.html
#144 chickenlittle Vancouver just experienced the sunniest July on record: 31 days, no rain, no oppressive humidity that comes with hot weather back east. Montreal is a great place to visit, but…
https://www.youtube.com/watch?v=AdQO-8Ikqgs
#159 Kingarthur Vancouver just experienced the sunniest July on record: 31 days, no rain…
Vancouverites do get to dry out their raincoats in July and August. It’s also a chance to scrape the clumps of mold off of the north side roof and vinyl siding. (Yup, the eaves troughs are full of this stuff too.)
But by October, Vancouver is back to permagrey skies, and daily spits of rain. During the October -May period, a solid month can go by without ever seeing the sun. Dull. Grey. Damp. With an occasional dump of wet slushy slow. Paradise, no?
#160 Berniee: Thanks for slagging Vancouver. Any assistance in slowing down the growing in-migration from the East is appreciated.
“The woman who bought thinks she got a great deal, and plans on spending a hundred in renovations,” she said. “What do you think of that? Haven’t you been wrong?”
Wow, that’s a very compelling argument. It’s a good thing she doesn’t know how much she doesn’t know.