What could go wrong?

accident

How much does it suck to be a developer these days? Well, just look what poor Wim Zuydervelt had to do to flog a hood of subdivision houses in West Kelowna this past weekend:

  • Give away four stainless appliances, window coverings, fencing and granite counters.
  • Eat the GST
  • Pay cash rewards for sales leads
  • Hand out $17,000 Smart cars as door prizes to buyers.

All this to move a mess of single-family detached houses selling in the low four hundreds – homes that would have sold themselves three years ago, when poor Kelonwa thought it was different there. But, as we now know, it’s not different for very long anywhere.

smart-event

Meanwhile in downtown Toronto there are enough $1-million condos currently for sale to last the better part of two years. Even beneath that no-more-CMHC-insurance, seven-figure threshold, things suck. A luxury, two-bedroom unit constructed within an historic, iconic building has languished on the market for endless months at almost $900,000. But that’s not the real price anymore, says the agent. Just knock off a hundred.

Anxiety’s been festering this summer along with mortgage rates. Now that we’re a single week away from the start of the crucial autumn market, realtors are bracing for a new gush of listings, yet no assurance there will be a corresponding tumult of buyers. As it looks more certain the days of sub-3% loan rates are in the rearview, never to be seen again, everybody – agents, developers, builders, marketers and sellers – will have to seriously compete for business. Many won’t make it.

As this blog already told you, the number of new high-rise projects being launched in the GTA monthly has dropped 70%. A dramatic plop in sales means a crane-free sky two years from now, impacting the construction industry. And how on earth will 36,000 real estate agents in Toronto survive when fewer than 20% make a sale each month?

One big danger of a real estate retrenchment (which is coming) is the impact on the wider economy. Years of national house horniness have sucked capital out of manufacturing, for example, and plowed it into residential real estate. The number of housing-related jobs in Canada jumped almost 4% last year alone, while 14,000 people lost their manufacturing positions. Half as many people now work producing goods as did in the 1970s, while construction jobs putting up all those condos have doubled. In fact, we now have 900,000 people drywalling and installing granite counters, compared with a total of 225,000 in the entire oil-and-gas business.

So, we’ve become California, circa 2005. In fact, worse. Before its real estate-induced collapse, even that state didn’t have as much of its GDP related to real estate as Canada does now. And that’s scaring some people.

Days ago Craig Fehr, an analyst with Edwards Jones, surprised many on  Bay Street by coming out with an anti-bank message – based on the mortgage rate pop and the inevitability of a real estate retracing.

“Lower loan growth in going to be the prominent trend [and] that’s something that we have been seeing emerging for some time,” he said in a TV interview. “We go back a couple of years, banks were seeing double-digit loan growth in a slow economic growth environment. This quarter, maybe we’ve seen low to mid single digit residential mortgage lending growth. Given that mortgage lending is the bread and butter profitability center for the banks, it’s time for some portfolio rebalancing.”

And while the big banks have been preparing for this scenario since 2010, there might be no escaping the housing fallout. The country’s economy has never before been this dependent on a sector which is fueled by hormones and consumer debt. Torrents of money have streamed into building condo towers, many of which stand at least partially empty, while factories closed.  Suddenly we’re all susceptible to a scaling-back in consumer spending which seems certain, at the same time export-driven manufacturing withers.

So, how can there actually ever be a soft landing? We’re counting on a sector now that’s inflated, wobbling and destined to disappoint. With 70% of people already have a house, family debt’s at historic levels, real estate prices are unaffordable and when mortgages are on the advance, what other outcome is there?

And that’s why you should expect a free car when you buy a new house. Poetic justice.

167 comments ↓

#1 brunette on 08.25.13 at 6:24 pm

I really want to make those rubber boot dogs!

#2 alex n calgary on 08.25.13 at 6:33 pm

Nice post! Its true of what I see in person here in Calgary, a ton of blue collar construction guys from all over Canada, not so much oil and gas as you’d think.

#3 David Lau on 08.25.13 at 6:38 pm

Just successfully signed a rental lease agreement for $1650 1+1 bedroom 750 sqft with large balcony for a 5 yr new downtown condo in Toronto for 18 months. As much as it took time for me to find the right place, i’m glad the wait was worth it. $1650 Includes utilities/heat/water/parking. Since this lease will last till 2015, by then i hope to see the confirmation of where this housing market will be considering i could have bought but opted to wait and see until then. Best of all, i know this building would have resulted in $2900/year in taxes and $500/month= $6000/yr in condo fees that i dont have to pay for!!

#4 ozu on 08.25.13 at 6:42 pm

FIRST !!!!!!!!!!!!!!!

should I buy a place at fraser heights now ?

#5 Nemesis on 08.25.13 at 6:47 pm

“What could go wrong?…”

All right then, AuldPol. I’ll see your PantyRocket and raise you a PeterbuiltConventional KelownaChopper PillionPeekABooParable…

http://tinyurl.com/k2m9wqp

Well, it is “International GoTopless Day”… sadly, our Premier declined the Kelowna Mayor’s kind invitation to reward her new WestKelowna constituents with an ‘appearance’.

Oh yes, always dress for the crash. AllTheGear. AllTheTime.

#6 Form Man on 08.25.13 at 6:47 pm

The development Garth is referring to is an excellent example of all that is wrong with the market in Canada today. These homes are marketed at subprime first time buyers. No down payment is required ( the builder makes a donation ). These homes are on First Nations land ( 99 year lease ), so no PTT or GST, yet they still have to resort to giving away cars.

With regard to the slow down coming in housing, it is important to note that a significant number of businesses classed as ‘manufacturing’, are actually almost solely dependant on housing:

window and door manufacturers
cabinet shops
countertop shops
roofing manufacturers
drywall manufacturers
siding manufacturers
paint manufacturers
etc, etc, etc,

Mr. Flaherty may find it much harder to balance the budget by 2015 than he ever imagined………

#7 renting sucks! on 08.25.13 at 6:48 pm

Oh ya the housing market will collapse, owning a home is not a smart thing right now or ever, homeowners have historical personal debt, interest rates rising bla bla bla….
Renting is so amazing and care free mmm…I love it. Ya I just sold my home and now I’m renting and its so relaxing bla bla bla. Ya man things are really going to get ugly for home owners boy I feel sorry for them bla bla bla…
Get a life. And I love owning my place to live. I hate renting anything. I only own. Peace out.

#8 Rob on 08.25.13 at 6:55 pm

A free car, how about a free house… Ok,ok I will settle for a house half price and not a penny more.

#9 retired Boomer - WI on 08.25.13 at 6:58 pm

Nobody is starving in Canada (that I’ve seen). Nobody here, either. We over did the House crap, so did you. Get over it. Your employment levels will plop, as workers re-configure skills to available work, or move to locations offering opportunity. Consumer credit will see higher delinquencies, foreclosures, and car repo’s may go up.

People will still eat, bitch about their lot in the world, and most will go on. A few might take a dive off a condo balcony, but a few always have before.

People drove this matrix, and people will undo it. Time wounds all heals.

#10 gattaca on 08.25.13 at 7:00 pm

TD Economics Q&A on mortgage rate hikes
http://www.td.com/document/PDF/economics/special/RecentMortgageRateHikesInCanada.pdf

#11 SebastienB on 08.25.13 at 7:18 pm

I’m just starting a blog about Montreal real estate because only a few blog exist.

Here my blog : http://bulleimmobilieremontreal.blogspot.ca/

If you have information about Montreal real estate feel free to send it to me.

Thank in advance!

#12 Mike T. on 08.25.13 at 7:19 pm

I posted a link to the Elkridge thing here in the spring, when a friend bought into it.

The developer and some of his local ‘business associates’ are also giving away 10,000 down payments for people who….well… don’t have 10 large.

Can’t sell or move for 5 years.

They call it helping, because, obviously.

It is worse than I thought too….

#13 john m on 08.25.13 at 7:30 pm

Sold a 1400 SG ft semi in Mississauga for half a million dollars?????? Renting a beautiful 2 bedroom in downtown Oakville for $1400. SWEET!!!!

#14 valleyrenter on 08.25.13 at 7:38 pm

Wonder if Smoking Man is correct with “sell Batman,buy Cameltoe”. Have you seen the stats on securities market credit for 2013? Seems July appears to be Batmans second ear! Double peak?

#15 clint on 08.25.13 at 7:40 pm

I think I know now why you have such a hate on for gold . You were part of the Liberal Govt that decided to sell off most of Canada’s gold reserves about the same time that numb nutz Brown in Britain sold theirs right at the bottom of the market…1999 to 2002 abt 280$ an oz. infamously known as Brown’s Bottom.. The liberal oriented press in Canada didn’t report this for obvious reasons. Your philosophy on not holding the metals and their shares has nothing to do with absence of dividends (as you know many of them do pay dividends ) just that you and your Liberal cronies made a bad decision many years ago which still haunts you..

I took my share and loaded up on Bre-X stock. — Garth

#16 Mike T. on 08.25.13 at 7:41 pm

here is a link to Project build for Elkridge

http://elkridge.ca/projectbuild

#17 Donald Trump on 08.25.13 at 7:46 pm

#192 Old Man on 08.25.13 at 3:40 pm

#190 Donald Trump – I enjoyed your humour as 4 cans was the limit, so went back for more as cannot waste my money for gasoline. Now with a name like yours you have nothing to brag about, so take a hike and pick on someone else, as do my gig to save a bit of money as a cost effective trip to hoop me some bargains on a weekly basis. :)
=================================

Old Man:

I didn’t get rich cutting Czechs

RE: Food shopping: Suggest try DOLLAR type stores….pasta, canned foods…etc .etc…

PS Garth…I call bullsh*t on blog photo…photoshopped (and how can she drive a motorcycle without head or arms?)

#18 Innumeracy Chick No More on 08.25.13 at 7:47 pm

Does that mean we should sell our preferred bank shares? Just wondering. Or wait until the share price drops and buy more? Also is this a good time to add more bonds to our portfolio?

#19 Randy on 08.25.13 at 7:51 pm

Garth…Stop trying to confuse people by using reality and logic…

#20 Chickenlittle on 08.25.13 at 7:52 pm

#4 ozu: “Should I buy a place at fraser heights now?”

Really?!? Is Garth a magic 8 ball now?

Hey, there’s a career option if financial services ever get boring!

#21 not 1st on 08.25.13 at 7:53 pm

That picture and this blog post is making me so horny…to vultch on the RE. Can’t wait.

#22 Daisy Mae on 08.25.13 at 7:56 pm

“Well, just look what poor Wim Zuydervelt had to do to flog a hood of subdivision houses in West Kelowna this past weekend…”

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

I drove thru Elkridge this weekend curious about all the hoopla. Balloons flying, local radio station on site, hopeful realtors milling about…but actual buyers, I dunno. None stood out. I did notice construction continues! I think it’s too late for incentives….

#23 Lost in Asia on 08.25.13 at 8:01 pm

http://elkridge.ca/

Wow..low 400’s for a pressed cornflake box with vinyl siding is that all! It amazes me how so many fools will work most of their adult lives to pay for these disposable, poorly constructed, card board boxes. When will people ever learn?
Like another poster commented last week..eventually people will be demanding solid built homes that last a lifetime as opposed to the garbage these con artists/realtor/developers are flogging with granite and stainless steel.

#24 Smoking Man's Old Man on 08.25.13 at 8:07 pm

#7 renting sucks!

Seeing as we’re only on this planet, in our current form, for roughly 80 years, I really have the impression that we don’t own much of anything if you really think about it…

#25 Notta Sheeple on 08.25.13 at 8:08 pm

“…The number of housing-related jobs in Canada jumped almost 4% last year alone, while 14,000 people lost their manufacturing positions. Half as many people now work producing goods as did in the 1970s,….”
=========================

It’s impossible to keep manufacturing jobs in Canada, when corporations can outsource to countries whose citizens don’t require above-market wages to pay for half-million dollar bungalows.

Add to that an over-priced Canadian housing pyramid scheme where the retirement of wrinklies depends solely upon their ability to vacuum any remaining disposable income from their grandchildren and you have a recipe for domestic economic disaster.

#26 -=jwk=- on 08.25.13 at 8:14 pm

Lived through this in the US from 96-2005. It’s not pretty. everything gets hit in one way or another, from coffee shops to home depot, the place workers buy steel toe boots….it just ripples through.

in other news,we used a landlord supplied – garage floor paint on our main floor and den. It looks worse than the old parquet (front hall) but much better than the old ratty carpet (den). We offered to paint it ourselves to try it out. it’s a little spotty but it looks generally good. We’ll do better when we do it for real – this rental is our ‘practice house’ :)

House needs a gut and reno, so when we move out in a few years he’ll do it properly. Signed up for another year, no rent increase. New furnace can dry your hair it blows so hard. Must have been $$$ but since the old one was due for a change anyway he bought the high end one he’ll keep post reno job.

downpayment fund approaching 6 figures – not including USA properties. appointment to set up spousal rrsp next week – we’ll be “first time buyers in 3.5 more years.

#27 clint on 08.25.13 at 8:20 pm

Like you, I made a pi$$ pot full of money on Bre-X. It was the greedy who did a swan dive out of the chopper along with Guzman.

#28 The Truth on 08.25.13 at 8:21 pm

A 10% to 30% is correction in Canadian real estate prices is underway! Sellers can’t sell unless they drop their prices and smart buyers know this – builders and developers are very fearful – the cost of labour will also fall sharply in the coming months – it was a great run folks, but now it’s over…

#29 Sideline Sitter on 08.25.13 at 8:24 pm

what’s most telling is the MSM has jumped on board the RE bashing with stories/articles telling of rate hikes, high debt loads, a glut of condos and more.

That sound is the tide (finally) turning.

When the MSM jumps on, people will take notice and over-react. Should be an interesting Spring 2014.

#30 DaleFromCalgary on 08.25.13 at 8:29 pm

Further to #2, I’m involved in the awl biz (conventional and CBM only, no heavy oil or bitumen). Our design work is done in Texas or Mexico, and the big iron is fabricated in China or Germany. Cowtown speculators who want to flip ex-grow op bungalows were just starting to realize there aren’t as many petro-people in Calgary as they thought there were. Those jobs are mostly outsourced. The people buying particleboard shacks in South Cranston or Kincora are tradesmen whose jobs will disappear after the flood repairs are over.

The great flood saved Calgary realtors for a year. The vacancy rate for decent rental family housing is zero, so those with kids and pets have to buy whether they want to or not.

#31 Bill Gable on 08.25.13 at 8:30 pm

At this point, I think it’s safe say “Waiter, check please”- it’s time to head on down the highway.

If this post doesn’t wake up some folks, that still don’t get what’s going on, I give up.

BTW: KUDOS to the bearded one:

Nice job on CBC, Garth.

Tremonti did her best.

#32 timmy on 08.25.13 at 8:32 pm

Kelowna is the drug/crime capital. The greasy biker scum have moved in and started selling drugs. I wouldn’t buy a house there for 400K

#33 R on 08.25.13 at 8:33 pm

Garth Why marry go around, i am doing to See hard landing in your posts. Or may be i don’t understand diff between two

#34 45north on 08.25.13 at 8:42 pm

Half as many people now work producing goods as did in the 1970s

1967 I had a summer job at Gliddens Paint Factory, Wallace Avenue, Toronto. General Electric, Swift Canadian these were big employment centres. People worked in factories.

It’s now 2013 and people don’t work in factories anymore and as Garth says a lot of them work building and selling real estate. It is my fear that the bond market is going to move and squish Canadian real estate. Just as rising waters move across the land and touch the lowest houses so will rising interest rates touch the most financially extended.

In the US, the Home Affordable Modification Program (HAMP) promises to make homes affordable.

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

To a large extent, HAMP gives false hope.

In Canada, the political choice is some sort of like program. How many people are going to conned into believing that they are going to be rescued when they aren’t.

#35 Pr on 08.25.13 at 8:43 pm

…while factories closed…

The majority of the buildings of factories closed become…condo!

#36 Marginal on 08.25.13 at 8:49 pm

#24 Lost in Asia on 08.25.13 at 8:01 pm
#25 Smoking Man’s Old Man on 08.25.13 at 8:07 pm

You’re both right. Reminded me of a walking tour in Gore’s Landing. There were many buildings made of wood, built in the early to mid 1800s. A surprising number of these homes had descendants living there a century later. One of the most interesting buildings was a frame ferry house, built in 1838 and then moved two miles west over the ice in 1845. The building is still there after all these years.

#37 FATHER on 08.25.13 at 8:55 pm

garth somebody said tapering would be 75 from 85 billion per month how is that small?

#38 not 1st on 08.25.13 at 8:55 pm

“Like another poster commented last week..eventually people will be demanding solid built homes that last a lifetime as opposed to the garbage these con artists/realtor/developers are flogging with granite and stainless steel.”

I read somewhere that framing versus poured concrete walls is almost the same price yet you couldn’t find a builder that would do it these days.

#39 Exilled on 08.25.13 at 9:01 pm

Mr Turner : Give Smoking Man his due!! He called it way ahead! Remember Mrs. Harper withdrawing all her savings and running, well CTV online reports that Ceasar might be a ” no show ” on Oct 31. So delayed Parliament will be a long time so the rats can flee the ship, and escape the charges that are never to be laid. Senategate isn’t going away, but Haeper will. I know this is not a Political Blog but for your information. You can delete!

#40 What could go wrong? — Greater Fool – Authored by Garth Turner – The Troubled Future of Real Estate | The Affluent Boomer™ on 08.25.13 at 9:04 pm

[…] via What could go wrong? — Greater Fool – Authored by Garth Turner – The Troubled Future of Real E…. […]

#41 Smoking Man on 08.25.13 at 9:13 pm

This self destruction of my body and mind via a uncontrolled life style push it to limit has to stop.

See what money does..

Did some damage last night, don’t remember falling but have the scares to prove it.

I’m done, no more.

#42 TurnerNation on 08.25.13 at 9:16 pm

Cheeky photo. Just add Balanced Portfolios.

#43 These pretzels are making me thirsty on 08.25.13 at 9:17 pm

#7 renting sucks! on 08.25.13 at 6:48 pm

Oh ya the housing market will collapse, owning a home is not a smart thing right now or ever, homeowners have historical personal debt, interest rates rising bla bla bla….
Renting is so amazing and care free mmm…I love it. Ya I just sold my home and now I’m renting and its so relaxing bla bla bla. Ya man things are really going to get ugly for home owners boy I feel sorry for them bla bla bla…
Get a life. And I love owning my place to live. I hate renting anything. I only own. Peace out.
——————————————————————————————————————–
You really have some serious self-esteem issues, dude. Go see a professional. I am serious!

#44 Canadian Watchdog on 08.25.13 at 9:19 pm

Finance Committee on April 23rd, 2013

Scott Brison Kings—Hants, NS

Thank you, Mr. Chair.

Governor, you've spoken of the financially vulnerable and those who are paying more than 40% of their income in debt servicing. Has the bank done some analysis as to how many Canadians fall into that category, how large the scale of that issue is, and secondly of the profile of these families? Are they middle class families who've had some disruption to their work, who may have lost full-time work and have gone into part-time work because of the decline in manufacturing? Or are they low-income families who have been strapped from the beginning?

What is the analysis the bank has done in this area?

Bank of Canada Governor, Mark Carney

We have done some analysis. We have surveyed some databases that are representative of the Canadian economy. Obviously interest rates are incredibly low at present, both the Bank of Canada rate and the rates at which banks are lending to Canadians, and mortgage rates as well. The consequence is that you have to have a lot of debt relative to your income to be financially vulnerable.

The most recent analysis we did of this, which was probably six months ago for the December financial sector review, shows that at present around 8% of borrowers are in this category. We did some sensitivity analysis, some stress tests, around it, and the thing we've tried to show is what happens if interest rates start to move towards a more historic level—not very high levels, but more historic levels—and what happens if there's a shock, as we discussed earlier, that increases unemployment. Then we get up into numbers, such as that one in ten Canadians could be in that situation. Rates go up, and because of floating rate debt and repricing of debt—or unemployment as well, and at the same time, because often the two go together—and because the proportion of debt stock that's held by vulnerable households is slightly higher, we start to see that unhelpful dynamic.

We will share that analysis.

Senior Deputy Governor, Tiff Macklem

The key point to keep in mind and to underline is that because interest rates are so low and delinquencies are relatively low, people are not having a huge problem servicing their debt. But with a bigger level of debt, when rates go up, the potential for that problem to rise more rapidly than it has historically is certainly there. That's a vulnerability, and that's what we've been trying to remind Canadians of.

#45 VT on 08.25.13 at 9:21 pm

And how on earth will 36,000 real estate agents in Toronto survive when fewer than 20% make a sale each month?

…Would you like fries with that?

#46 Tripp on 08.25.13 at 9:30 pm

#24 Lost in Asia

“…eventually people will be demanding solid built homes that last a lifetime…”

They already started, centuries ago. Not in North America, though; most of us don’t know any better and still believe we have the best houses in the world.

#47 45north on 08.25.13 at 9:31 pm

Canadian Watchdog: Finance Committee on April 23rd, 2013

thanks

#48 Garth's Disciple on 08.25.13 at 9:35 pm

“…homes that would have sold themselves three years ago, when poor Kelowna thought it was different there. But, as we now know, it’s not different for very long anywhere.”

ahh Garth – you are too cruel! It’s almost like you are taking vindictive pleasure in slaughter of the innocents. The hard working citizens of Canada are not to be blamed…they have been led to the edge of the cliff by the trustworthy faces of Flaherty, Carney and the CEOs of the chartered banks….and just like Greenspan, W and Cheney, this posse will parachute away to their golden nest eggs just as their flock plummets to its demise (actually Carney already did).

#49 Ben on 08.25.13 at 9:37 pm

SebastianB

glad you are doing a blog on Montreal. Each day on this blog I search the comments for Montreal and hardly ever is there a hit! Now you provide a whole blog. Great.

#50 mortgagebrokeron on 08.25.13 at 9:43 pm

renting sucks

I got news for you, most people that have mortgages dont ever own their home.

the bank owns it for about 40 – 50 yrs,

mortgage = debt = bondage, for a period of time

then you finally own it.

most people don’t own their home

#51 More Calgary on 08.25.13 at 9:54 pm

I get a kick out of the anti-renter sentiment from some of those that “own”.

I’ve never really understood how being a minority shareholder paying exorbitant buckets of interest over a quarter of a century is allowed to be called “owning”.

#52 Kelowna on 08.25.13 at 9:57 pm

Elkridge.. just happens to be my neighbor. This developer still owes massive amounts to his contractors and vendors, well known in the local circles here that Elkridge and similar projects in this part of the province are complete failures now. Buyer beware.

#53 Valerie Keefe on 08.25.13 at 10:24 pm

@ retired Boomer – WI

Nobody is starving in Canada (that I’ve seen). Nobody here, either. We over did the House crap, so did you. Get over it. Your employment levels will plop, as workers re-configure skills to available work, or move to locations offering opportunity. Consumer credit will see higher delinquencies, foreclosures, and car repo’s may go up.

It’s worth noting that between 2000 and 2012 US 15-64 employment fell 7%, from 74.1% to 67.1%*, more than anywhere else in the OECD, yes, even more than Greece… 3.2% of that fall was from 2000-2007, during the Bush Expansion.

What does this mean? That a hollowing out of the prospects of the working poor actually kills jobs, but that’s okay, at least here in Canada, it’s not like we’re making it harder to access income supports like Employment Insurance by making beneficiaries take a pay cut… oh crap.

*For those of you wondering, Canada went from 70.9% to 72.2%, up 3.7% during the last 6 years the Liberals were in power and down 1.4% since.

http://stats.oecd.org/Index.aspx?DatasetCode=LFS_D

#54 OttawaMike on 08.25.13 at 10:34 pm

Let’s dust off and bring back Devil’s Idiot, the permanently banned Kelowna Realtor, Greater Fool commenter, and get his take on this story.

I am quite sure he will gladly explain how everything is fine in the Okanagan, this is merely a flesh wound.

#55 Marginal on 08.25.13 at 10:41 pm

#41 Smoking Man on 08.25.13 at 9:13 pm

Lifestyle can always be controlled, but self destruction is an entirely different matter.

#56 HogtownIndebted on 08.25.13 at 10:41 pm

Spent the weekend in cottage country, seeing some beaches and events in Georgian Bay, Tiny township and Barrie/Orillia areas.

The number of cottages for sale is amazing, including a surprising number of power of sales. The prices are delusional, more like high end detached homes in nice parts of Toronto. Looking at MLS, lots of the photos have snow in them – some of these places have already been on sale for ages. Many are turning to 416 realtors to try to dump their properties on gullible hogtowners.

The towns and villages are filled with too many empty storefronts. Real businesses have been vacated and replaced by signs in front of houses offering aromatherapy and shiatsu – to whom, I wonder? The traffic home was still horrendous, making me wonder who thinks it has value to spend four hours coming home travelling only 165 km. An unsafe and unpleasant ride at that, with a surprising number of completely reckless idiots on motorbikes on the way up, tailgating, passing on the gravel shoulder of the 400 or against a solid line (sorry Garth, no offense to you and your half naked biker pals who I’m sure follow the law)

Quite a few signs for building projects too that advertise “low 400s” etc.. for townhouses in and around Barrie. Seriously. No shovels in the ground anywhere, though, that I saw.

Cottage country is really not looking strong from an economic and real estate perspective. Wonder how long this will take to unravel.

#57 Marginal on 08.25.13 at 10:50 pm

Garth, you mentioned many horrors and “monsters be here” in your post today, but surely a shout out to sunscreen would be in order ;-)

#58 Ray on 08.25.13 at 11:00 pm

Like I said many times GTA condos are doomed but 416 SFH are resilient.

#59 not 1st on 08.25.13 at 11:16 pm

Its all just tinkering until real pain close to home runs rampant. Here is some;

http://www.calgaryherald.com/business/Penn+West+cuts+more+than+staff/8822455/story.html

#60 Jim on 08.25.13 at 11:37 pm

“So, we’ve become California, circa 2005”

Well, there are indeed many people in Real Estate.

However, let’s not kid ourselves. California is in deep doodoo financially, but it is WAY better than Ontario.

A fraction of the population of California, and multiples of the debt. Ontario is in for a world of hurt.

Something most people don’t know about is that the various municipalities have been calling in consultants to advise them on what to do when the housing market plunges and their revenues start disappearing. They need to know where to cut first.

#61 Snowboid on 08.25.13 at 11:38 pm

Elkridge?

I think the reason there is no GST or PPT is that the development is on Westbank First Nations land – in other words leasehold. Last I heard it was a 99 yr lease, but still risky.

Some of the hardest properties to sell are leasehold, they are a dime a dozen in Kelowna as well – look at the 55+ subdivision off Raymer Avenue and along Stillingfleet Road.

#62 Ralph Cramdown on 08.25.13 at 11:39 pm

#59 Ray — “Like I said many times GTA condos are doomed but 416 SFH are resilient.”

Because tomorrow’s first-time SFH buyers are obviously not hoping to use the equity in the condos they currently reside in, oh no!

#63 Jonah on 08.26.13 at 12:16 am

I am planning on renting near bathurst and steeles area. One of the owners had listed his condo at 1850 with 3 bedrooms. When we visited there were only 2 bedrooms and 1 small dining room which per him can be used for the third room. His selling/renting point was this unit is bigger compared to newer units hence comparatively better priced. We offer him 1750, which he refused and I am confident he regrets it too as the condo is still listed for rent. Same story on Bathurst where an owner got emotional in order for me to agree on rental price so that she could “move on” as she cannot afford to have two places while at the same time being “firm”at $2000 for a nice 1500 sqft condo. It is a shame that some of these condo owners would not let it go for slightly less but bear the financial loss. No wonder, I learned now why people are emotionally attached to their properties. It sucks to be an owner right now and especially of a condo.

#64 Manuel on 08.26.13 at 12:46 am

Elkridge is on Indian land so I’m assuming that there is no land transfer tax because the land isn’t being transferred?!? Anyone know if that’s correct?

#65 backwardsevolution on 08.26.13 at 1:37 am

Oh, those important banks!

One not-so-funny thing: take the earnings of the big banks out of the S&P 500 second-quarter earnings, and you’ll find the remaining companies, collectively, experienced negative earnings growth in the second quarter of 2013.

It’s scary stuff—and it’s proof that quantitative easing is helping the banks more than any other sector of the economy.

#66 backwardsevolution on 08.26.13 at 1:45 am

Warning: Homebuilder stocks that make up the Dow Jones Home Construction Index are down 25% since mid-May.

The surge in U.S. housing has been from hedge funds and financial institutions buying up distressed homes and renting them out, but the word is that they’re making a quick exit.

#67 Island Alchemy on 08.26.13 at 1:59 am

Here in Nanaimo – it’s different. A friend of ours; one of the top realtors in Naniamo just sold his family home. It was not even on the market. Another realtor approached him and said he had buyers so the deal was made. The buyers are a Chinese family whos children are attending school here. They also bought everything in the house except the mattresses. For cash.
I called a taxi the other day. I recognized the driver from his picture on some real estate signs in days gone by. When asked he confirmed he was indeed that realtor. Maybe it’s not different here.

#68 Mark on 08.26.13 at 2:31 am

Banks don’t make money on ‘loan growth’ , they make it on spreads (“loan growth” actually costs the banks money and reduces spreads). Spreads have generally been at historic lows. As the banks tighten up, their profitability should rise as the spreads expand.

#69 Grimbot on 08.26.13 at 2:32 am

Hi Garth,

Here’s some recent information on the continued rise of household debt in Canada…

http://ca.news.yahoo.com/canadas-delinquency-rate-falls-1-19-per-cent-055637920.html

The good news is delinquency rates are down….but overall debt continues to rise…even for those over 65.

#70 ILoveCharts on 08.26.13 at 2:45 am

Garth: As a fan of this blog and with all due respect, I request that you correct the facts in this blog post.

You stated that the developer had to:
“Eat the GST
Eat the property transfer tax”

If I understand correctly, that is not the case. This is a leashold development and so those taxes simply do not apply to the buyers. (I know this is true for PTT, unsure about the GST.) The developer is not eating those taxes. It is quite likely that you wrote this post without knowing that it was a leasehold development because that is not clear from their website and you are not a mind reader.

http://bcrealestatelaw.com/2013/04/11/wfn-elkridge-lease-faq/

The fact that these are leasholds also explains the lower pricing and the need to ply people with gifts. Leaseholds are always a tougher sell.

#71 dominion on 08.26.13 at 3:05 am

Speaking of california, is there any evidence that they learned any lesson, or are they just trying to re-inflate the bubble?

#72 gsiam on 08.26.13 at 5:58 am

I have been saying this for many years despite the US people I know. You have to pay taxes for the inflation increase of your home price. The neighborhood I grew up in has had the home price slightly more than double yet the average wage is only slightly more so it now takes two incomes or a great job to buy a home.

#73 raider on 08.26.13 at 6:52 am

The melt in real-estate is going to come to man.

However, should be continue to be on a buying spree for preferreds and REITs at this point?

Since everyone got used to feel entitled handouts these days, do you expect there to be any rescue effort for SMEs or startups when spending goes down the drain? Usually any government is shit-scared of deflation, however traditional measures to counter deflation seldom make it into the real economy of unlisted companies, mom & pop shops, and other SMEs. Instead unions typically tend to cripple whats left behind…

#74 Mr. BigStuff on 08.26.13 at 6:54 am

Buy (own) that which rises in value and rent (lease) that which loses value. Keep it Simple S…..

#75 Canadian Watchdog on 08.26.13 at 7:15 am

#70 Grimbot

National Average Delinquency Rate at Record Lows While Seniors Acquire More Debt-Equifax Canada Reports

Equifax Canada's Q2 2013 National Consumer Credit Trends Report finds that the National 90 day-plus delinquency rate decreased over the past three years in Canada, to a record low of 1.19 per cent.

But Canadian consumers continue to increase their debt burdens according to data from Equifax Canada, despite recent efforts from regulators to tighten lending standards. Total debt rose by nearly $77 billion, or 6.1 per cent, from last year's level driven by an 8.6 per cent increase in auto loan balances and a 7.4 per cent increase in outstanding mortgage debt.

Why pay it down now when you can borrow more, kick the can and pay later?  To keep the kids in school.

Now read post #44 again.

#76 rosie "moving forward" in the knowledge that, "this won't end well" on 08.26.13 at 7:47 am

#72

Good advice, too late for us though. http://www.timesargus.com/article/20130825/BUSINESS03/708259896/1006/BUSINESS

#77 The Big M on 08.26.13 at 7:48 am

The pic is a fake with bad lighting.

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

With 70% of people already have a house, family debt’s at historic levels, real estate prices are unaffordable and when mortgages are on the advance, what other outcome is there?

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

70% of Canadians have always owned their homes. (give or take)

So what’s your point?

Home ownership was 58% in 1950. You really should try harder. — Garth

#78 maxx on 08.26.13 at 8:07 am

#24 Lost in Asia on 08.25.13 at 8:01 pm

Pressed cornflake building materials are horrid, unhealthy things. Mold risk, off-gassing and fugly. Check out the paper doors in this video. Not just a paper core, the entire door is paper.
Another wonderful “engineered” structure for you. Cheap garbage, coming to a new build near you.

http://www.youtube.com/watch?v=OdXf-P0V3HY

All that glitters….I’d love to see the “staging” for this type of dung heap in a few years time.

#79 maxx on 08.26.13 at 8:20 am

#45 VT on 08.25.13 at 9:21 pm

“And how on earth will 36,000 real estate agents in Toronto survive when fewer than 20% make a sale each month?”

No sympathy whatsoever. They can whistle Dixie on the street corner….or work in a call center….or a coffee shop.

Tough.

#80 steve p on 08.26.13 at 8:30 am

#57 “Cottage country is really not looking strong from an economic and real estate perspective. Wonder how long this will take to unravel.”

with oil over $100/barrel not very long

#81 jerry on 08.26.13 at 8:58 am

Enter the new era of the dreaded “Conditional Offers”.

Two of the most frightening:

1. Conditional on sale of purchaser’s property
2. Conditional on purchaser getting Finance!

Watch for grim faced realtors reporting that the offer is “dead”.

#82 Siva on 08.26.13 at 9:07 am

70% of Canadians have always owned their homes. (give or take)

So what’s your point?

Home ownership was 58% in 1950. You really should try harder. — Garth
_____________________________________________

US home ownership at peak before the Great Recession was 69.50%. Now it’s in low 60s and falling. Home ownership in Canada is now 70%. Lot of people who should not be buying properties are given loans thanks to CMHC taking the risk and banks the reward. Very similar to sub prime.

#83 Bob on 08.26.13 at 9:33 am

We are definitely in for a correction. I just watched a house I sold under 5 years ago in the high 3’s for about 5 and 1/2. There is sound economic logic in that considering all things being equal. The best rate then was a tad under 4% on a five year fixed, and we are close to that level again. I still think owning a house, especially if you have a family, is good investment. You have to buy wisely in any market. Carrying a mortgage is not a bad thing, unless you go all in for cheap credit at 5% down or less in some cases. I saved up for my down payment so that I could avoid the need for government backed insurance and gain some peace of mind.

So where is it all going? Odds are that the correction is going to happen sooner than later. If you take the example of the house I sold a few years back, a 20% correction would not be out of the question, maybe more in the condo market. But at the end of the day, people will still need housing, so they’ll still be buying. Hopefully we don’t get what happened in the U.S. here, and the government has been trying their best to prevent that with their interference in the mortgage “business”.

As for gold, if you have the cash to invest, invest in it. Currencies come and go, but gold has been there since pretty much the start of commerce.

#84 charles ponzi on 08.26.13 at 9:57 am

“And how on earth will 36,000 real estate agents in Toronto survive when fewer than 20% make a sale each month”

thats the point, the whole real estate business is such a racket that selling one average high end condo / home earns more money for the broker/agent than most people make in a year.

Hardly. The commission on a $500,000 transaction is typically $25,000, of which half goes the the listing agent and half to the agent for the buyer. Then those two have to split the remaining amount with their brokers. The end result can be as little as $6,000. Can you live for a year on that, in Toronto? BTW, no benefits, vacation pay or pension. — Garth

#85 CantRememberMyName on 08.26.13 at 10:08 am

#7renting sucks! on 08.25.13 at 6:48 pm
—————–
Too bad Life’s a rental… LOL

#86 Big Brother on 08.26.13 at 10:45 am

#41 Smoking Man on 08.25.13 at 9:13 pm
This self destruction of my body and mind via a uncontrolled life style push it to limit has to stop.
See what money does..
Did some damage last night, don’t remember falling but have the scares to prove it.
I’m done, no more.

MKULTRA says don’t worry Smoking Man you mind is under our control here at the CIA. We are grooming you for the CIA’s Program of Research in Behavioral Modification.
Step one we get you to drink heavily.
Step two we get you to smoke like there is no tomorrow.
Step three we get you to gamble flagrantly without regard for your limits.
Step four we get you to keep chasing the bar girls at Seneca as if you are in a brothel with Fridays paycheck.
Step five we get you to feed your wifey poo loads of cash at your favorite casino to keep her happy.
Step six we get you to drive your boat around the lake half drunk on vodka.
Step seven we get you to chase the markets with Batman and Robin.
Step eight we constantly instill the fear of “speeling correclty” into your mind and promote your dislike of schooling.
Step nine we get you to impulsively rant on this blog with wanton disregard for the ramifications herein by getting you to use substances which will promote illogical thinking and impulsiveness to the point where the recipient would be discredited in public.
Step ten we create the Ultimate Smoking Man who can take materials which will cause temporary/permanent brain damage and loss of memory.

After last night I guess we are done!

#87 bigtown on 08.26.13 at 10:48 am

Edward Jones might have a point about bank’s future earnings but the banks have really been doing well now so I guess we have to wait and see.

My spouse got booted in the 08 GFC from his plant job in Brantford where half the town felt that major downsizing in the manufacturing sector.

My spouse begged a Toronto agency to give him a job and he was lucky and got work but the downside was a PAY CUT OF 30 PLUS…WE ARE BLESSED BY GOD THAT our family eats but we cut the coupons and also our own hair. The worst part is trying to find good rental housing when there is little to choose from and most Canadians are in our shoes. So that’s the way it is here in the GTA and southern Ontario. Of course the Alberta families of ours are doing great but my spouse can’t shake the Ontario roots.

#88 Sebee on 08.26.13 at 10:53 am

Well, this settles it, thanks Globe. $2K a month for mortgage only on a $400K box that’s probably 500sqft, not including all the other fun monthlies that go with Condos. They threw this into the back burner quick, even Globe is starting to act ashamed…some days.

http://www.theglobeandmail.com/life/home-and-garden/real-estate/with-toronto-rents-spiking-condo-ownership-looks-appealing/article13912770/

#89 FTP - First Time Poster on 08.26.13 at 10:53 am

Worst photoshop ever Garth. Anyone else notice how chickie poo’s feet aren’t on the pegs? Guess she’s draggin those stilletos. Crappy pic.

Worse, man. Did you hear about the tooth fairy? Total fraud. — Garth

#90 TheCatFoodLady on 08.26.13 at 11:01 am

I see an ego fight between some owners versus some renters here. Why do some find it necessary to engage in schoolyard bragging? For many, owning DOES make more sense while for others renting is the way to go. It’s about ‘boring old balance, diversity & available liquidity’.

If you’re set for retirement with a good income stream on top of a home that’s paid off or close to it, if you’d made sensible financial choices… why not own? We all want something we can point to & say: “That’s mine!”

The worrying fact being increasingly raised & not just by Mr. Turner, is that far too many people approaching retirement ASSUME they can cash out on house liquidity & use that to fund retirement. If we’d all had four kids looking to buy homes, it might work. But we didn’t & those we had are up to their eyeballs in debt. The number of buyers needed to easily absorb family homes in many markets simply isn’t there. Many Canadian housing markets are close to the stratosphere.

You bet banks & other institutions are going to loan money if they’re backstopped or if they can charge enough of a spread to make a buck. They’re BUSINESSES not charities. Stores are happy to let you buy for “no money down, no interest until 2015” – you might want to read the fine print on those deals.

There’s a little thing called individual responsability that has to come into play. Just because you can do something – in this case borrow money – doesn’t mean you should.

It was a dead RE market here this weekend, few open houses & after a spate of price cuts last week – no more. 5 local properties have had their places on the market since April – For Sale By Owner. I’m going to assume they’re asking way too much because… there they sit. And sit…

#91 Daisy Mae on 08.26.13 at 11:02 am

Snowboid: “Elkridge? I think the reason there is no GST or PPT is that the development is on Westbank First Nations land – in other words leasehold. Last I heard it was a 99 yr lease, but still risky. Some of the hardest properties to sell are leasehold, they are a dime a dozen in Kelowna as well – look at the 55+ subdivision off Raymer Avenue and along Stillingfleet Road.”

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

What about it? Leasehold properties and their 99-year leases are prepaid and not a problem. Band land is not in the least bit ‘risky’. Properties on band land most certainly are not hard to sell. The Band owns large tracts of land so, naturally, is quite developed. The Band, itself, is very gracious. And they are presently in the process of clearing land for the construction for the first ‘wellness clinic’ in Canada.

#92 Daisy Mae on 08.26.13 at 11:12 am

#65 MANUEL: Not sure…read below:

“A number of commonly claimed exemptions are outlined in Bulletin PTT 003, Property Transfer Tax Exemptions:
• net interest passing
• transfers involving joint tenants and tenants in common
• transfers involving an agreement for sale
•transfers following bankruptcy
• transfers resulting from marriage breakdowns
• transfers to registered charities (also see Bulletin PTT 025)
•transfers under the Veterans’ Land Act (Canada)
• transfers by which property escheats, reverts or forfeits to the Crown, or where the property is returned
• transfers to municipalities and other local governments”

#93 Bob on 08.26.13 at 11:13 am

Canadians continue to take on more debt, but a growing concern is the extent to which OLDER consumers supposedly enjoying a worry-free retirement are resorting to credit, says a new report:

http://www.bnn.ca/News/2013/8/26/Debt-burden-climbs-as-older-Canadians-borrow-more.aspx

#94 More Calgary on 08.26.13 at 11:45 am

#78 The Big M: 70% of Canadians have always owned their homes. (give or take).. So what’s your point?
_________

Ummm that’s some solid research right there. A one second google search pulled up StatsCan numbers that show Canadian home ownership has typically averaged around 60% between 1971-2006. The house-hornies age group (20-34) has averaged around 45% during this same period…

http://www.statcan.gc.ca/pub/11-402-x/2011000/chap/fam/fam-eng.htm

#95 Old Man on 08.26.13 at 11:46 am

I heard that the Smoking Man will be soon on his way to Phnom Penh for a special assignment. A meeting has been scheduled on 172 street at the Laughing Fatman Bar and Restaurant. Nextdoor is the Sundance Hotel that is jointly owned by a Canadian and an American, as it has a bar and rooftop pool. Smoking Man wanted the best and then his new assignment will be discussed before he arrives at the Nagaworld Casino by his assigned tuk driver and body guard.

#96 Suede on 08.26.13 at 11:54 am

Speaking of Bubbles. TESLA stock is ‘charging’ forward.

http://finance.yahoo.com/q?s=TSLA

#97 Big Brother on 08.26.13 at 12:09 pm

#97 Old Man on 08.26.13 at 11:46 am

I heard that the Smoking Man will be soon on his way to Phnom Penh for a special assignment. A meeting has been scheduled on 172 street at the Laughing Fatman Bar and Restaurant. Nextdoor is the Sundance Hotel that is jointly owned by a Canadian and an American, as it has a bar and rooftop pool. Smoking Man wanted the best and then his new assignment will be discussed before he arrives at the Nagaworld Casino by his assigned tuk driver and body guard.

MKULTRA says Smoking Man is not ready to be the next James Bond. More like Austin Powers! Yaaa Baby, Yaaa.

#98 Suede on 08.26.13 at 12:13 pm

Looks like buyers are suing to get out of Vancouver’s Olympic Village contracts…

http://getlegal.ca/blog/2013/8/24/olympic-village-condo-buyers-seek-rescission-of-their-purchase-contracts

#99 The Big M on 08.26.13 at 12:20 pm

#96 More Calgary

The house-hornies age group (20-34) has averaged around 45% during this same period…

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

The discussion is around baby boomers which is the blue line – 55-64.

ALL in the 70% range.

Learn to decipher a graph before cracking off.

#100 TS on 08.26.13 at 12:21 pm

Home ownership was 58% in 1950. You really should try harder. — Garth

To think about home ownership back to 58%? is it harder enough?

#101 Squatter on 08.26.13 at 12:58 pm

Garth, it’s really great what you told us about the REITs and preferred shares.
I would be interested to know more what you think about the other sectors of the stock market.

#102 Smoking Man on 08.26.13 at 1:14 pm

http://www.bankofcanada.ca/rates/interest-rates/canadian-bonds/

BATMAN ALERT

Bonds are looking good.

#103 Donlad Trump on 08.26.13 at 1:22 pm

#58 HogtownIndebted on 08.25.13 at 10:41 pm

Spent the weekend in cottage country, seeing some beaches and events in Georgian Bay, Tiny township and Barrie/Orillia areas.

The number of cottages for sale is amazing, including a surprising number of power of sales. The prices are delusional, more like high end detached homes in nice parts of Toronto. Looking at MLS, lots of the photos have snow in them – some of these places have already been on sale for ages. Many are turning to 416 realtors to try to dump their properties on gullible hogtowners.
=================================

This market is one to watch and learn from.

Our family has lakefront in Cariboo.
Most people are long term ( if not original )owners and very little turnover. About now… many of the owners are elderly, but can keep it in the family which is around 3 generation + by now,. However a wave of them will pass on and unless some estate arrangements made , will have to sell to pay taxes…which will be $100,000 plus for many.

The younger generation often doesn’t have the money nor the interest to go long distances….they have become urbanized, thus will be either non buyers or motivated sellers.

I did note a recent wave of tail end boomers(middle generation) drive the market, buying property and putting on literal houses, fully serviced on NON waterfront lots ..I am talking $200,000 for a lot and building a house. These people will be hit hard and lose big time.

Talking to a realtor, the market in the area is DEAD dead. However the demographic shift was so predictable if one even remotely analyzed it. I don’t see any recovery, its done like dinner.

#104 Snowboid on 08.26.13 at 1:41 pm

#93 Daisy Mae on 08.26.13 at 11:02 am…

I have nothing but the utmost respect for the business acumen of the Westbank First Nations. They have proven themselves many times over the past 25 years.

All leaseholds are risky, whether private, crown or First Nations. Why?

They are difficult to sell, we have talked to owners both at Sunrise in Kelowna and on Mimosa (near Elkridge) in West Kelowna still trying to sell after over a year.

We have seen multiple properties languishing on MLS for a couple of years.

In the event of financial problems, such as the developer declaring bankruptcy, the leases can be terminated.

It is my understanding that obtaining mortgages requires more paperwork, and that not all leasehold properties are CMHC approved. Fees are comparable if not more than the PTT.

In the case of WFN – your monthly fees and taxes are governed by the WFN, as are all laws relating to reserve land – including any dollar increases (they have to provide six months’ notice).

Of course, with a 99 year lease – why worry? Your grandchildren will likely be the ones stuck dealing with a renewal (or eviction).

Bottom line about leaseholds – I would never choose one over renting.

Wellness clinic? Actual the plan is for a full-blown hospital, in partnership with John Hopkins. WFN states because it is on their land, federal and provincial laws don’t apply.

One top surgeon I know in Kelowna has told me of plans to abandon public health care and work at the new WFN hospital when complete. I’m sure there are others that will also leave MSP – this is not good for the public system in the region. I don’t blame them, the bureaucracy at Interior Health is severely bloated at the same time as front-line workers are being short-changed (nurses, etc).

#105 broadway skytrain on 08.26.13 at 1:43 pm

#105 Donlad Trump

the cariboo is so far from the city it will never be much other than dead – takes to long to travel, when all of the coast and a lot of the interior are much less travel time

and if all the young’uns are going urban are condos back in play?

#106 Devore on 08.26.13 at 1:45 pm

#101 The Big M

The discussion is around baby boomers which is the blue line – 55-64.

The discussion is about CANADIANS (or you can just go back and read your own comments). 70+% is all time high, and well above historic levels.

#107 Devore on 08.26.13 at 1:46 pm

#95 Bob

Canadians continue to take on more debt, but a growing concern is the extent to which OLDER consumers supposedly enjoying a worry-free retirement are resorting to credit, says a new report:

Gosh, I wonder where they’re getting the money from. Oh, I think I know. This party’s coming to an end too.

#108 Devore on 08.26.13 at 2:00 pm

#106 Snowboid

The main problem with leaseholds, as you point out, is the added risk. Financing is usually an issue. As the lease nears the end, there is zero financing available period, and value approaches strictly rental value as the lease dips under standard mortgage amortization length. Lots of heartache for “owners” of these properties in the south False Creek area in Vancouver, after the city announced it had other plans for that land, and lease renewals are far from certain. Between leaky condos and lease issues, that’s one tough market to be selling in.

Of course, none of this matters when the real estate market is hot hot hot, which is exactly when you see these leasehold developments coming out. Buyers are lusty, they just want to get into the market, and the lower prices of lease properties seem very attractive.

#109 Steven on 08.26.13 at 2:14 pm

When you see builders trying to sweeten the deal in order to sell their product then it is a sure sign that the product in question is overpriced relative to what people can afford. Don’t expect a real housing boom anytime soon.

#110 Donald Trump on 08.26.13 at 2:38 pm

#107 broadway skytrain on 08.26.13 at 1:43 pm

#105 Donlad Trump

the cariboo is so far from the city it will never be much other than dead – takes to long to travel, when all of the coast and a lot of the interior are much less travel time

and if all the young’uns are going urban are condos back in play?

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

As a kid we used to go to Cultus Lake…approx. 2 hours from Vancouver.
Then it started attracting the weekend warrior yahoos, and turned people off. To get the same peace and serenity, people had to go farther out of town. The Cariboo was a 6 hour drive for us one way.
There is a point the novelty wears off and it is far more work that enjoyment.

Re young-uns ?
That’s a backward reflection. They can’t even afford a condo, so recreational property is the last thing they can afford even if they wanted to. The smoother chain of transition via a market of buyers and sellers that was once there is broken.

That’s my premise, we have oversupplied product and over-indebted a generation .

#111 DreamingInTechniColour on 08.26.13 at 2:39 pm

The best piece of advice for investors I know of:

“Never invest more than you can afford to lose”

This advice is the same for any kind of investments whether they are shares, metals or properties etc..

#112 Spaccone blablabla on 08.26.13 at 2:39 pm

#75 raider

“However, should be continue to be on a buying spree for preferreds and REITs at this point?”

I believe Garth at one point stated a balanced portfolio with REITs in the low to mid single digit %. As much I think REITs are going to recover throughout the rest of the year and onwards in addition to the yield, I’m not exceeding that personally, and am not too thrilled with what I think are games from short progam trading (banks?) that shakes people and their dollars out.

Though I have a 11% bet on the miners (not sure if I should crystallize some of that profit now) that helped me recover from the May/June/July yield investment divebomb.

#113 Alberta Ed on 08.26.13 at 2:42 pm

There is a condo development under construction in Esquimalt sporting a large FOR RENT sign. I suspect that the tide has changed.

#114 zeeman1 on 08.26.13 at 2:43 pm

“For investors, a slow-walking Fed means stock and bond markets can stop hyperventilating and retreat to normal.”

Garth ,great article yesterday, but the above sentence struck me as odd.

By definition, continued QE means these markets are anything but normal.

#115 Donald Trump on 08.26.13 at 2:45 pm

Leaseholds ?….IMHO will become dogs.

There will be so much selection, people will cherry pick .

#116 Uwinsome on 08.26.13 at 2:50 pm

BBC News Netherlands real estate bubble bursts during downturn – watch video:

http://www.youtube.com/watch?v=UyxUn_FkS9k

#117 Ralph Cramdown on 08.26.13 at 2:56 pm

“The commission on a $500,000 transaction [in the GTA] is typically $25,000, of which half goes the the listing agent and half to the agent for the buyer. Then those two have to split the remaining amount with their brokers. The end result can be as little as $6,000.” — Garth

I’m not faulting your math, but agency was a going concern — Benzes and all — ten and twenty years ago when prices were far lower (inflation adjusted, even!) and commission was no more than 6%, often less. The biz IS somewhat akin to a Ponzi scheme where fresh meat is continuously lured in. What do the newbies do? Pay several thousand to the provincial licensing self-regulatory organization, then spend a year or two doing a bad job of representing friends and family on a 50:50 split with their broker and staffing top producers’ open houses. When the F&F have run out, either they can do enough deals on merit (possibly with an accommodating, earning spouse) or they keep paying licensing fees and fees to a brokerage to park their license (just in case…) or they drop out.

Regardless, the broker does OK, the provincial association and the local board make out OK, the sellers of local paper and park bench advertising do OK, all but the poor Joe Q. Publics that the newbie agent represented — they pay full price for a (likely) substandard job. What fuels the fire? New agents don’t understand that the top few percent in any given market do much of the business, or believe that their chances of cracking that echelon are much higher than actual probabilities would suggest.

The worst thing you can say to the general public is (to paraphrase) “they’ve got expenses…” Who gives a shit. If they’ve promised half their commission to their broker and they’re only selling one a quarter, meaning the car, phone, office and licenses all have to be paid out of this deal, so what? I sold a FSBO last year and the pitch from a not-unsubstantial local agent regarding fees was 1) offer less than market to the buyer agent (“—- that,” was my reply) and 2) I’ve got to charge about this much to you as the listing agent, because I’ve got expenses. WORST VALUE PROPOSITION EVER.

Do better.

#118 Nemesis on 08.26.13 at 2:58 pm

@SnowBoid/#106…

Fascinating! Accordingly, you have earned yourself an EasterEgg.

Whether Declarative or Imperative; Grammarians will be particularly amused by the OkanaganNations’ witty dig at the soon to be vanquished interlopers:

http://tinyurl.com/mn22f62

#119 Uwinsome on 08.26.13 at 3:00 pm

#100 “Olympic Village law suit”. Here’s a list of the unhappy buyers.

Bok J. Choi, Il Ho Ahn and Ra Young Choi,
Yen Hai Doan, Tian Gao, Thomas Gisby,
Jung Gu Han and Hyun Joo Han,
Jung Kyoo Han and Sung Sub Han,
In Cheol Jang and Sunkyu Choi,
Heebo Kang and Soon Bin Kang,
Mi Hyang Jin and Yung Jun Kwon,
Mohamad Lafta, Hak Hyung Lee, Flora Kwangah Lee,
Sang Wook Kwang and Hyun Jung Lee,
Kyoung Won Lee and Nam Won Park,
Gordon Mah, Wendy Milligan,
Sook Ja Oh and Mu Hong Oh,
Young Ock Park and Yi Yong Pan,
Young Mi Seo, Shermar Holdings Ltd.,
Susana Yim and Hardy Yim,
Sook Ja Yoon and Eul Byong Yoon

NO H.A.M. here!!

HAM = ‘Hot Asian Money’ as in funds from people resident in Asia. You may not have noticed, but there are people resident in Canada who have Asian names and like condos. — Garth

#120 Viewpoint.ca on 08.26.13 at 3:11 pm

Great stuff Garth. Any idea when a new book is on the way?
The CBC spot was well done. Too short though.

#121 Uwinsome on 08.26.13 at 3:12 pm

#121 “HAM = ‘Hot Asian Money’ as in funds from people resident in Asia. You may not have noticed, but there are people resident in Canada who have Asian names and like condos”. — Garth

I know, they’re just Canucks fans.

#122 jess on 08.26.13 at 3:14 pm

15 middlemen =

why would you pay for the fund managers research ?

http://www.bbc.co.uk/iplayer/episode/b037r5dh/How_You_Pay_for_the_City_Episode_1/

#123 This list is very mono-color on 08.26.13 at 3:14 pm

You can find it at the bottom of this article
http://getlegal.ca/blog/2013/8/24/olympic-village-condo-buyers-seek-rescission-of-their-purchase-contracts

Are these foreign investors ?

Bok J. Choi, Il Ho Ahn and Ra Young Choi,
Yen Hai Doan, Tian Gao, Thomas Gisby,
Jung Gu Han and Hyun Joo Han,
Jung Kyoo Han and Sung Sub Han,
In Cheol Jang and Sunkyu Choi,
Heebo Kang and Soon Bin Kang,
Mi Hyang Jin and Yung Jun Kwon,
Mohamad Lafta, Hak Hyung Lee, Flora Kwangah Lee,
Sang Wook Kwang and Hyun Jung Lee,
Kyoung Won Lee and Nam Won Park,
Gordon Mah, Wendy Milligan,
Sook Ja Oh and Mu Hong Oh,
Young Ock Park and Yi Yong Pan,
Young Mi Seo, Shermar Holdings Ltd.,
Susana Yim and Hardy Yim,
Sook Ja Yoon and Eul Byong Yoon

You guys are obsessed. Get over it. — Garth

#124 JimH on 08.26.13 at 3:15 pm

#85 Bob
“….. As for gold, if you have the cash to invest, invest in it. Currencies come and go, but gold has been there since pretty much the start of commerce.”
====================================
Please! Does your mother know you hand out this sort of silly advice; totally devoid of any and all caveats, warnings or analysis of the downside risk?

Since Sept 2011, gold has lost >22% of its value. Many of the miners >50%. The trip to the downside has been characterized by rapid rips to the upside followed by more gradual and more drastic downtrends to new lows.

Experienced swing and position traders have been successful in buying the dips and selling the rips.

Their ‘buy long and hold’ cousins have been badly wounded catching nothing more than a series of falling knives.

Yes, since early July of this year we have seen another rip to the upside; a rip that has now positioned gold, gold ETFs and gold miners generally levels where their RSI, MACD and Stochastics are all screaming “overbought”.

Gold appears to be struggling with serious resistance at $1400, but could in fact struggle higher.

The GLD etf has hit a new higher high in $135-$136 territory, and might well tickle the $140 mark if it can manage to hold above $127 or so.

In any event, short term downside risk is now very considerable, and gold’s well established downtrend is guilty until proven innocent.

Anyone jumping into gold at this time should be aware that the train left the station about 6 weeks ago, and that downside risk is cumulative.

#125 TorontoBull on 08.26.13 at 3:27 pm

I have been playing with a mortgage calculator, and have some interesting findings to share. Suppose you have 400,000 mortgage for renewal @4% 5-year fixed and 20 year amortization left. Now suppose you have 10,000 dollars to invest. Should you apply them towards the mortgage or invest in Garth’s portfolio @7%?
The monthly payment on 400K comes to 2,423.9, while the monthly on 390K comes to 2363.3. This is a 60.6 dollars monthly difference or 727.2 annual savings if you apply the 10K towards your mortgage.
Seems better than the 7% diversified portfolio…

#126 The obsession is theirs on 08.26.13 at 3:33 pm

“You guys are obsessed. Get over it. — Garth”

With all due respect but I would rather say they are the obsessed ones :-)
I did not notice the previous message (#121) or it was not approved yet when I started writing what I posted above. Sorry for that

However there is no smoke without fire.

#127 Donald Trump on 08.26.13 at 3:39 pm

#125 This list is very mono-color on 08.26.13 at 3:14 pm

You guys are obsessed. Get over it. — Garth

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

I agree with Garth….

Personally, I have nothing against the Irish, even when either of us is sober, but I think its long overdue that we accept the Paddy’s as equals.

#128 Mr. BigStuff on 08.26.13 at 3:44 pm

@TorontoBull, who cares? keep playing your calculator games, lol!

#129 jess on 08.26.13 at 3:52 pm

16 clint
refresh

mean business or perhaps mean is not the proper word

http://danielsethics.mgt.unm.edu/pdf/Sunbeam%20Case.pdf

#130 charles ponzi on 08.26.13 at 3:59 pm

#119 Ralph Cramdown

well said sir…..

“agents” all kicking $$ up to the broker who maintain a monopoly with other agents/brokers all to maintain sky high fees and thousands of agents all expecting riches from a couple of weeks training course.

town I Iived in had about 380 agents with a population of 8000 people.

sorry garth but you are in a minority defending a scheme which if a cartel of corporations fixed prices like the RE business does, would find themselves under investigation for illegal price fixing.

#131 lawboy on 08.26.13 at 4:09 pm

#66 Manuel

I believe the reason there is no property transfer tax is because indian land is in some sense, federal land? In any case, federal, indian land…the provincial government has no jurisdiction over it and cannot tax it.

If it were not indian land, the transfer of a 99 year leasehold interest would attract property transfer tax.

#132 jess on 08.26.13 at 4:34 pm

U.S. Marshals Selling Russian Spy House in New Jersey
http://www.usmarshals.gov/assets/sales.htm

UK blood plasma company sale to Bain
Plasma Resources UK to US private equity firm
….
The warning comes after Lord Owen, the Labour minister who created the system to make the NHS self-sufficient in blood products in the 1970s, described the sale as the worst possible outcome.
——

http://www.nhsca.org.uk/docs/nhsfraud.pdf
…carried interest‟, a performance fee typically based on 20 per cent of profits generated,

http://www.fbi.gov/about-us/investigate/white_collar/health-care-fraud
=====

Roy Lilley, a health services expert, said private sector suppliers can carry additional risk for the NHS, citing Southern Cross, which closed hundreds of care homes for elderly people when it was unable to pay its bills. “[The Bain deal] is privatisation of an essential part of the NHS supply chain.” he said. “I have never seen any deal conducted in this way with so little public scrutiny.”
http://www.theguardian.com/business/2013/aug/25/uk-blood-plasma-company-sale-nhs-supplies#start-of-comments

#133 2CentsCdn on 08.26.13 at 4:34 pm

#118 Uwinsome
Here we go …. house value crash “how can the government let this happen?” OMG .. the mentality (stupidity) of the some person now. I think the gov’t should cover me when my stock portfolio drops a little … and while we’re at it …. cover my Vegas losses as well. But if I gain or win ….. Don’t you dare tax me!

This is going to be hilarious. How did people become so stupid and entitled the last 20 years? Can you see now that the only way for a gov’t to get re-elected is to to NOT fix problems? (keep kicking the problems down the road). The system is doomed. Because the average voter is soooo short sighted …. and would happily contribute to crashing the country into the ground over not feeling any pain or punishment for their own stupidity, greed and entitlement. Really crazy times. And world wide. Yikes!

#134 The Peg on 08.26.13 at 4:44 pm

HAM invading Europe.

Wealthy Chinese snap up homes in Southern Europe as governments offer visas for buying

http://business.financialpost.com/2013/08/22/wealthy-chinese-snap-up-homes-in-southern-europe-as-governments-offer-visas-for-buying/

#135 bill on 08.26.13 at 4:44 pm

#121 Uwinsome on 08.26.13 at 3:00 pm
you sound like the kind of person that would like to put the H.A.M. in a concentration camp.
I imagine this is exactly the kind of in depth thinking like yours that sent my wifes people to places like: Bay Farm ,Greenwood, Kaslo Lemon Creek, New Denver
,Popoff ,Rosebery Salmo Sandon Slocan City

and
Camps and relocation centres elsewhere in British Columbia

Bridge River (South Shalalth)
McGillivray Falls
Minto City
East Lillooet
Tashme
perhaps you should put a lid on your prejudices ?
it is very offensive to me personally.

#136 Snowboid on 08.26.13 at 4:54 pm

#120 Nemesis on 08.26.13 at 2:58 pm…

Make it Cadbury Creme, please.

#137 CalgaryRocks on 08.26.13 at 5:05 pm

#136 The Peg on 08.26.13 at 4:44 pm
HAM invading Europe.

Wealthy Chinese snap up homes in Southern Europe as governments offer visas for buying

http://business.financialpost.com/2013/08/22/wealthy-chinese-snap-up-homes-in-southern-europe-as-governments-offer-visas-for-buying/

On a somewhat related note, why are the big 3 telecoms whining about the possibility of HAM (Hot American Money) competition?

If John Smith from Vancouver has to compete with the other HAM the big 3 should be able handle Verizon without crying like 6 year old girls .

#138 ILoveCharts on 08.26.13 at 5:06 pm

I am disappointed that there was no direct response to my earlier comment and that the blog post has not been updated.

Given how much you post, it’s not unusual for a few incorrect facts to slip through. It’s also not a big deal – as long as they are corrected when they occur.

Elkridge is a leasehold and so the Property Transfer Tax does not apply. It’s not correct to state that the developer is eating that cost to try to sell the units more quickly.

When real estate boards take liberties with the facts, you do not hesitate to point it out and to destroy their credibility.

Now you are giving all the bulls ample firepower to draw the credibility of this blog into question.

Why not just acknowledge that you accidentally overstated the extent to which this developer is having to use incentives and make a correction?

Because I was busy. — Garth

#139 William Bell on 08.26.13 at 5:12 pm

@#127 TorontoBull, I could be wrong but based on your calculations:

Your initial $10000 doesn’t valued to be $10727.20 at the end of the year. It is subject to deductible costs towards its net worth. Similarly a 7% portfolio will also be subject to taxes, fees, and transaction costs.

You need to compare the two “TRUE” values at the bottom line and decide which is more valuable and suitable for a particular person/family.

It’s like arguing if one would be healthier by taking 1 Omega3 + 1 vitamin C pill everyday VS eating 1 orange + 1 apple daily.

#140 broadway skytrain on 08.26.13 at 5:13 pm

bill back off man – admitting a group exists is not the same as locking them up , you are way off base.

and i know and like the nihon-jin better than most but that was a different time and japan was warring across the pacific and headed this way – the loyalties of relative newcomer, non integrated, japenese fisherman, with likley the biggest fleet of boats on the coast was rightfully questioned imo. people need to get over the past , ever hear of the expulsion in nova scotia? you don’t hear me crying about great great great great great gramppy and grammie got the same deal at the hands of the brits. so please spare us the whining…

///////////////////

#141 Stickler on 08.26.13 at 5:20 pm

I agree with your views on Canadian housing, and the Canadian economy.

I find your views on the US economy like, well, …you know, that old children’s tale…from the sea?

Once we hit 7 its all good…

“7,
7 is the key number!
Think about it…
7/11, 7 dwarfs
7 man!, …thats the nunmber
7 chipmonks twirling on a branch,
eattin lots on sunflowers
on my uncle’s ranch
…you know that old children’s tale…from the sea.”

#142 Ballingsford on 08.26.13 at 5:21 pm

Garth, your comment to #91 aboutt the tooth fairy being a complete fraud has me concerned.

My son is almost six and hasn’t lost any teeth yet, but when he does; I’d like it to be magical.

Good thing he hasn’t taken an interest in reading this blog; Yet.

Anyway, keep up the great work. Pictures of a tail gator watching the bkini babe are good too.

He gets that! No concern there.

#143 FATHER on 08.26.13 at 5:39 pm

garth you said the tapering is going to be small but from what I hear it’s 75 billion from 85 that doesn’t sound that small or does it?

It does. — Garth

#144 broadway skytrain on 08.26.13 at 5:42 pm

back on topic , sort of, somebody astutely identified a true bubble in tesla , it sure caught my interest.

20billion mkt cap , freshly blown
never made a profit
needs enviro credits to have any chance at a profit
hard to get the spec’d performance

no proprietary technology , safe from slackers like bmw, honda, ford, toyota, china, etc. – they would not dare compete …..

a currently wildly popular ‘latest thing’ in cali with a stock market herd stampeding in tow? maybe…

put options are gambling yes, but, at one point, long before cdn housing bottoms this stock will flame out with some puts going 50x.

i think a single stock bubble is a MUCH more simple equation than a country wide housing one, if we can figure out when this one will pop we can all buy a new house or 2 :)

who needs a casino when there are stocks like this – we need a ‘herd-ometric’ tm analysis from smokey

anybody have an e-car now?

who’s got a crystal ball on this one???

#145 bill on 08.26.13 at 6:16 pm

#142 broadway skytrain on 08.26.13 at 5:13 pm
I am aware of the acadians and the irish and the scotch who were cleared off their land.and lots more besides. it has never stopped.
maybe more of us should speak up then eh?
I will continue to ‘whine’ about and I am not going to stop
so you will just have to deal with it as best you can.

#146 Jumbo on 08.26.13 at 6:27 pm

Looks like the wrinklies are in trouble.

http://m.thestar.com/#!/business/new-owner-for-boom-flow-radio-stations/227f460e15c2f24d6483e600bc2bb07e

#147 Uwinsome on 08.26.13 at 7:03 pm

#137 bill

My opinions don’t reflect any prejudice. My only observation, in living in Vanvouver, has been that there is much investment by off shore Asian money. But, it doesn’t mean that I object to it. I only feel that it has been a substantial factor in Vancouver’s increasing property values. Period.

If you were offended by my comments, you misinterpreted them. But I appologize anyways.

#148 broadway skytrain on 08.26.13 at 7:22 pm

hey bill,

this is a longshot but did you marry a wcb lawyer , from stv’stn, who went to windsor u?

if so, i understand your position.

#149 bill on 08.26.13 at 7:40 pm

ha ! thats very Canadian…you dont have to apologize to me.
I believe you when you say that it was without prejudice.
in the past however more than one person has said or otherwise inferred that H.A.M. was a problem.
any Chinese name attached to a house sale was on occasion offered as proof that we were inundated with off shore buyers. to me this is prejudiced thinking.
as it turned out it was a very insignificant amount of people
all the rest were Canadians swept up in the ‘house lust’
the way the many in America were.

#150 Nosty the Vladiator on 08.26.13 at 7:45 pm

Cdn. Watchdog — Referring to your post from a couple of nights ago. The west is framing Syria as it did with Iraq, John Kerry mimics dubya by saying WMD BS, The Only Reason (cue the Rothschilds), Seven Countries in Five Years, S-300 anti aircraft (‘tho the S-400 is out now), and Russia’s new MiG 35D.

Of note, Iran and Syria have now targeted Israel, the main cause of the troubles, if the west attacks, and Russia has stated that it will defend Syria and Iran. This is what the Rothschilds and Israel want — a WW between the US and Russia.

#151 Smoking Man on 08.26.13 at 7:48 pm

The Namgnikoms are working overtime over seas, un like me who has moral boundaries, and rules of engagement, a code. Namgnikoms are heartless they exist on both sides of fight.

When it comes to making loot, I draw the line on killing humans

Namgnikoms have no problem killing woman and kids. Namginkoms can be found in every country.

You can’t stop them, best to try and figure out how to profit from the fight no matter what side of the battle field you find yourself on.

More on this when I get a bit more looped.

#152 happity on 08.26.13 at 7:49 pm

“New orders for manufactured durable goods in July decreased $17.8 billion or 7.3 percent to $226.6 billion, the U.S. Census Bureau announced today”

The USA economic renaissance is on a roll!

NOT

#153 bill on 08.26.13 at 7:54 pm

broadway skytrain:
I appreciate your great concern however
I have had enough conversations over the years with people who are ignorant of the concentration camps .
plainly it could be talked about so more.
Mr Carlin seemed to think it was cause for concern.

http://www.youtube.com/watch?v=hWiBt-pqp0E

go to 6:30 if you wish to cut to the chase but the first bit is thought provoking as well.

#154 Smoking Man on 08.26.13 at 7:59 pm

Damn I spelled it wrong.

Should Be Nemginkoms

#155 Daisy Mae on 08.26.13 at 8:27 pm

#106 Snowboid: “All leaseholds are risky, whether private, crown or First Nations. Why? They are difficult to sell, we have talked to owners both at Sunrise in Kelowna and on Mimosa (near Elkridge) in West Kelowna still trying to sell after over a year.”

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

We could debate this forever. If your friends can’t sell, perhaps their asking prices are out of line. Greedy sellers face this dilemma every day. Your friends have to blame something or someone, so why not leasehold? My neighbours haven’t had a problem — some have sold without a realtor. It is not difficult and absurd to suggest otherwise.

BC Assessment Authority regulates our property taxes. Last year our property taxes were lower than surrounding areas. The band has nothing to do with strata fees. So what taxes/fees are you talking about?

Any/all land can be expropriated at any time — private, crown or First Nations. I won’t be worrying about lease renewals….and neither my grandkids.

#156 KAM on 08.26.13 at 8:35 pm

Hardly. The commission on a $500,000 transaction is typically $25,000, of which half goes the the listing agent and half to the agent for the buyer. Then those two have to split the remaining amount with their brokers. The end result can be as little as $6,000. Can you live for a year on that, in Toronto? BTW, no benefits, vacation pay or pension. — Garth

But why the hell Real Estate companies are getting half of the commission ($12,500 ).don’t you think there should be some $ value ceiling per transaction.

#157 Daisy Mae on 08.26.13 at 8:37 pm

#106 Snowboid: “In the event of financial problems, such as the developer declaring bankruptcy, the leases can be terminated.”

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

Well, of course. Why not? This would be the case with any development.

And, paperwork? No more than any other RE transaction. You’re making mountains out of molehills.

#158 Daisy Mae on 08.26.13 at 8:40 pm

#106 Snowboild: “Wellness clinic? Actual the plan is for a full-blown hospital, in partnership with John Hopkins…”

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

Will not include psychiatry. Will not include Obstetrics.

#159 bill on 08.26.13 at 9:55 pm

#150 broadway skytrain on 08.26.13 at 7:22 pm

no. my wife is from the interior.her mom was at bridge river and her dad was sent to the prairies to work on farms there.
the parents met later at ubc.
i know of some of the steveston ship building families through my grandfather. he fished commercially during the summer.

#160 Snowboid on 08.27.13 at 12:38 am

#160 Daisy Mae on 08.26.13 at 8:40 pm…

We could debate the pros and cons of leasehold land, and I am happy your experience is good.

On the other hand, based on our friends and discussions with our RE agent, we would rather rent – as I have said.

You got me on the ‘full-blown’ hospital – I should have said a luxury, five-star experience that focused entirely on the most profitable areas of medical practice – and ignored emergency services and the two you mentioned.

The thought of a gourmet meal with wine does sound good, but it’s not likely their rates are pensioner friendly!

Over and out,

Snowboiled

#161 Daisy Mae on 08.27.13 at 10:07 am

#162 Snowboid: “On the other hand, based on our friends and discussions with our RE agent, we would rather rent – as I have said.

You got me on the ‘full-blown’ hospital – I should have said a luxury, five-star experience that focused entirely on the most profitable areas of medical practice – and ignored emergency services and the two you mentioned.”

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

We have at least three RE agents owning houses in our gated community. They don’t seem to have a problem.

We have a ‘full-blown’ hospital in Kelowna. How many do we need? The Wellness Clinic was never meant to conflict, but rather complement, our Kelowna General Hospital. It will alleviate wait times for many procedures such as hip/knee replacements and yes, will be a ‘pay for service’ facility. Thus keeping the dollars in Canada. Anything wrong with that?

#162 Snowboid on 08.27.13 at 2:53 pm

#163 Daisy Mae on 08.27.13 at 10:07 am …

Glad to hear you have three RE agents in your community, that is reassuring.

The WFN hospital isn’t designed to complement KGH, but to make money – like I said before the WFN are very savvy when it comes to business.

Nothing wrong with making money, I’m sure there are large numbers of wealthy Okanagan residents that will line up to pay big bucks for the best service and staff.

Cost comparisons?

KGH, three major surgeries, multiple tests, several nights hospital stay: $ 0.00

WFN estimate (based on JH charges, not including wine and cheese): $ 68,000.00

Anything wrong with that?

#163 Optimist/Greaterfool on 08.27.13 at 4:09 pm

Say, if the price of comparable houses in the area a year ago was $500,000, the current price is 10% more, therefore the house is worth $550,000. You just made easy $50,000 tax free. Think how long you have to work, pay taxes, save to get this $50,000.

There is a lot of $500,000 houses on the market. You still have a chance to get rich. Thank you.

#164 Daisy Mae on 08.27.13 at 8:08 pm

#168 Snowboid: “KGH, three major surgeries, multiple tests, several nights hospital stay: $ 0.00

WFN estimate (based on JH charges, not including wine and cheese): $ 68,000.00

Anything wrong with that?”

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

Yup! KGH stays aren’t free. We’re paying thru the nose with premiums! ;-)

#165 Daisy Mae on 08.27.13 at 8:13 pm

#168 Snowboid:

Do you realize that every visit to KGHs’ Emergency Department costs the taxpayer $286? Doesn’t matter if it’s a stroke or a cut finger! And believe me, there’s a ton of abuse. I should know…I’ve been a volunteer for almost 30 years.

#166 Daisy Mae on 08.27.13 at 8:15 pm

#168 Snowboid:

We need user fees….

That should stop mom from bringing Junior in for the sniffles.

#167 Snowboid on 08.27.13 at 11:30 pm

#166-8 Daisy Mae on 08.27.13 at 8:15 pm…

Sorry I was off on my calculations, I forgot the $ 68K didn’t include multiple blood tests, EKG, CT scans and biopsy. The cost at WFN would likely be closer to $ 90,000!

As a regular volunteer at KGH in the mid-70s to mid-80s I used to share your bitterness.

Although I’m not a socialist, I don’t believe that charging user fees will do anything but force low-income families to forgo medical treatment (as happens in the US).

But I do believe in socialized medicine, and it worked reasonably well until BC politicians starting tinkering with it about twelve years ago.

Privatization and P3s all cost the system valuable front-line resources.

I guess you won’t have to drive so far soon for services, maybe they will pay their volunteers at the WFN hospital?

Forgive me if I’m snotty, I’m still recovering from my third major surgery in as many months!

Incidentally, if I had to pay the bill if the work had been done at a private hospital I would be bankrupt or dead – or both.