Barato

CRAP1

Some people think we’re insane. Like Jim. He still gloats over the day he moved from Calgary to Mazatlan. I guess it’s easy to be smug when your property taxes are $85 a year. “Eventually everyone living in those mortgaged-to-the-hilt boxes in Canada will have to admit you were right all along,” he says.

I know that.

Days ago the eggs at RBC published their latest affordability survey, and garnered minor headlines. “Home ownership has become less affordable for the average Canadian, but that hasn’t stopped many from jumping into what may already be an overpriced market, suggests a new report from the Royal Bank,” was how the media framed it. In other words, a non-story. Houses cost more. Yawn. Tell us something we don’t know.

But here’s what it means when RBC says its index has swollen to 54.5 in Toronto and 82.1 in Vancouver:

The bank bases its calculation on an average local family with average income buying an average house (1,200 foot bung or 1,500 two-storey), with a giant downpayment of 25% and a mortgage at current rates (but before the recent increases) on a 25-year amortization. Of course, the average downpayment across Canada is just 7%, and the average family has to add a fat CMHC insurance premium to their mortgage principal. But stay with me.

Then the bank figures out – based on current valuations – how much of that family’s income is required to carry the home which has 75% financing in it. But wait, the number it comes up with is pre-tax – which no family receives. In fact, on a household income of $75,000 in Ontario the take-home is just $58,363, since 22% is lost to government. In BC, the net is $58,942.

So, the ‘affordability’ index of 54.5% in Toronto really means a family must spend 69.8% of its actual cash flow to buy the average home ($503,094) after coming up with a 25% downpayment ($126,000). In poor, delusional Vancouver, the 82.1 number means an average family has to spend 105% of its after-tax income to maintain a home  on which it deposited $150,375.

By the way, the bank is counting in mortgage payments, property taxes and utilities. No closing costs or land transfer tax. And almost everywhere in the country the proportion of household income needed to carry a home now exceeds the maximum amount of a borrower’s gross annual income (32%) that Ottawa has mandated should go to mortgage costs, heating, property tax and/or condo fees.

How can this be?

One word. Debt. Credit continues to expand week-over-week, provided by lenders like the Royal (Canada’s largest manufacturer of mortgages). And as long as people keep buying houses, the bank says they must be affordable: “With Canada’s housing market showing signs of regaining some strength in recent months—home resales increased by 6.4% in the second quarter— current affordability levels do not appear to get in the way of homebuyers becoming more active.”

There ya go. Economics 101. If there’s enough demand to chew through supply, then the market is balanced. No matter if the size of the mortgage placed on the same house bloats more with every transaction. How long this can last depends on interest rates (we’ve beaten that poor equine to death already), and the supply of greater fools – which often appears bottomless. But as house prices and debts swell, the amount of cash left over to buy cars and flatscreens, save for retirement or put kids through college, dwindles in proportion. And that’s an economy-killer.

With a quarter of the GDP already wrapped up in real estate, how much longer can we prosper by building and selling each other condos, rather than manufacturing kit we flog to the world?

Oh well. Nobody cares. Why should I? Or Jim? Eventually this will all be crystal clear.

“My wife and I left the madness a little too early, selling our house in south Calgary and moving to Mexico 12 years ago. But we still have the cash in our bank account. We rented for the first few years, until we decided to settle in Mazatlan. Seven years ago we bought a three-bedroom, two and a half bath house here, a block from the ocean. It’s brick built, so ain’t no hurricane gonna knock it down (and Mazatlan gets few nasty storms as it is). We paid $70,000 U.S. We’re fairly well off financially and could have gotten a bigger place, but chose not to. It was new when we bought it and meets our needs, as semi-retired folks. My wife is an accountant and works on line for clients in Canada. I’m a journalist who covers the energy industry.

“If I were a boomer (which I am) and still owned a house in one of the major Canadian cities, I’d sell now, pocket the money, go non-resident for tax purposes and move to a lower cost country, such as Mexico, Ecuador, Panama etc. That is what we did.

“Our property taxes are $85 a year. We don’t own a car because the taxis are so cheap here and the bus service so good we don’t need one. The fresh fruit, fish and veggies here are wonderful and barato (cheap). And, despite the negative publicity about Mexico and it’s “drug wars”, my wife feels safer here than in downtown Calgary (and we do live in the older, delightful and colonial central part of the city). But the options for expats in Latin America are many. We escaped the real estate madness in Canada and were glad we did.”

Mazaltan

“Two bedrooms, two bathrooms, 1,758 square feet. This warm and well kept house is perfect for your winter get away and to immerse yourself in the Mexican culture! Two bedrooms, two and a half bathrooms, roof top patio and a garage. Within walking distance to everything, this home is centrally located, near beaches, parks, central market, the Plazuela Machado, the town square, the cathedral and several good restaurants and bars. Home is secure, you can lock it and leave it! $125,000 US.”

Tomorrow: Let’s compare this to Calgary…

Update (September 10): After reading all 199 comments below, expat Jim of Mazatlan puts forth the following response. Adios. — Garth

Just a quick note re: the reaction to the email I sent a couple of days ago about the suggestion some Canadians might want to cash out of their high-priced real estate and move to a lower cost country, such as Mexico, Panama, Belize etc. As I wrote earlier, my wife and I sold our Calgary house and moved to Mexico 12 years ago, a move we have never regretted. Oddly enough, we’re now visiting relatives and friends in the epicentre of Canada’s real estate bubble, Vancouver. Lovely city, especially when the sun is shining, which it is this week. But I can’t believe how expensive it is. Everything from the restaurants, to the hotel we’re staying in, to the fruit and veggies stand I went to today reminds me again of why we moved to Mexico. But it is more than about the cost of living (I would estimate about one quarter of what it is in most Canadian cities and much less if one takes into account housing costs).

But I would like to take exception to some of the posts from those who responded to my comments.

The suggestion that health care in Mexico is somehow substandard is absurd. My wife is from a medical family, Her father was a prominent radiologist in Vancouver before he retired. So she is a better judge of health care access and standards than most average folks. Try to get an appointment with a specialist in Canada, in virtually any discipline, in two or three days. We get that on a regular basis. Our GP does house calls. Try that in Canada. We pay for it. We have private insurance that covers us internationally for about $10,000 a year. That is the option we chose. But for a few thousand dollars a year we could get Mexico only coverage and buy medical insurance for when we travel. The dental care in Mexico is also outstanding, and at one-quarter to one-fifth the cost of what it is in Canada.

So let me lay to rest the belief that it is a “third world” health care system. Much the same could be said about health care in Panama, Belize and other parts of Latin America.

One of the posters commented on the presence of bars on the windows of houses, suggesting that means the city we live in (Mazatlan) is crime infested. In fact, it has been customary for middle class and upper middle class families to use that form of protection because, until recently, the technology was not available here to use security companies and alarms. It does exist now.

It would be foolish to suggest there isn’t crime in Mexico but it is largely concentrated to border cities and neighborhoods in the larger cities. Expatriates obviously need to be aware there are some thieves and scoundrels in Mexico, just as there are in Canada and the U.S. When Canadians vacation in the U.S. or snowbird there they avoid East L.A., parts of Miami, inner city Phoenix etc. Common sense prevails.

My wife and I can honestly say, after 12 years in Mexico, we have never felt threatened. I doubt we would say that about inner city Detroit – or Winnipeg, for that matter.

Expatriate living is not an option every Canadian could or should choose. But for those who are open minded, interested in other cultures and open to new experiences it makes a great amount of sense, especially if one wants to escape the inevitable real estate bubble bursting.

One final point I would make is that today’s communications options make living in a foreign country much less of a challenge than it may have been in the past. My IPad works just as well in Mexico as it does in Vancouver and I can FaceTime or Skype my daughters of friends just as easily. I have a VOIP service that includes a Calgary base phone number. I subscribe to and read Canadian newspapers and magazines (and the Wall Street Journal) on line. We have a Shaw satellite and watch Canadian-based programming. There are times when I’m not sure whether I’m in Mexico or Calgary – except when I open my front door in January and walk outside in my shorts and a t-shirt.

Regards:
Jim

203 comments ↓

#1 Mj Stead on 09.09.13 at 7:08 pm

Well, you have my attention. Looking forward to tomorrow’s comparison.

#2 Tony on 09.09.13 at 7:12 pm

Calgary is overpriced and headed for a big fall.

#3 David Jensen on 09.09.13 at 7:15 pm

Does that place in Mexico come with a good hostage negotiator for building residents?

#4 Old Man on 09.09.13 at 7:19 pm

Now will tell something that has been documented but few will ever know. The McDonalds hamburger can be placed in your basement and a year later will look just like new, as no pests or bugs with touch it, as it is bad news. Hey kid you not as just do research on this all.

#5 Youliana on 09.09.13 at 7:25 pm

I love the window bars :-) I guess they would provide some safety of the inhabitants and their belongings. I personally prefer the creek under my bar-free windows of my North Vancouver rental!

#6 Seadood on 09.09.13 at 7:26 pm

But, but but…..
what about pension and health care, the great perks of this country?
Never mind, probably die in the emergency waiting room anyhow.

#7 Donald Trump on 09.09.13 at 7:27 pm

Nobody said First …again! ….wazzup ?

#8 Shutting down recharts.blogspot.ca on 09.09.13 at 7:42 pm

Hi guys

I am shutting down my blog. Some details posted at recharts.blogspot.ca

It has been an interesting experience and I have learned a lot about MLS, listings and stats and the way they (the stats :D ) lie to us . What scared me to death was the amount of work and passion I was able to put into this. I have to stop before being tempted to cross the line and become a real estate agent :-)

thanks for the traffic
recharts

What do you need a private life for? Don’t be such a wuss. — Garth

#9 Randy on 09.09.13 at 7:45 pm

Try Belize….Lots of new condos, good healthcare, great weather….great lifestyle….

#10 Donald Trump on 09.09.13 at 7:49 pm

#4 Old Man on 09.09.13 at 7:19 pm

I read this article that McD’s does some strange process to its meat:

http://wafflesatnoon.com/2013/08/04/pink-slime/

QUOTE:

According to Oliver, the fatty parts of beef are “washed” in ammonium hydroxide and used in the filling of the burger. Before this process, according to the presenter, the food is deemed unfit for human consumption.

According to the chef and presenter, Jamie Oliver, who has undertaken a war against the fast food industry: “Basically, we’re taking a product that would be sold in the cheapest way for dogs, and after this process, is being given to human beings.”

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

I had a craving recently buy some McD burgers…went in…. and each burger I wanted was over $5…..I just walked out.

Life is too short….. especially when better and less expensive options exist out there.

#11 Jim on 09.09.13 at 7:49 pm

Want to see something hilarious? Check out the “Sales History” on this house –

http://www.viewpoint.ca/property/cutsheet/41020223

You have to log in to see it, but an account is free and it’s well worth the laugh.

Originally listed for $424k on April 15 (this year). Just came back on the market today after the spring listing expired, now it’s up for $367k.

Last sold at $318k in 2007 – IF it sells at $367k that’s a net return (not counting lost investment income or land transfer taxes) will be a whopping 10% total over 6 years.

Who says real estate isn’t a great investment?

#12 Old Man on 09.09.13 at 7:53 pm

McDonalds burger chain as had a friend in 1972 that was offered the franchise at the corner of Hwy 10 and the highway into Toronto for about $72,000. He had all cash but turned it down. Wtf, he headed for Saudi Arabia instead as landed a contract to provide air conditioning for the Capital City with his other company, and made a fortune. Guess what? Before he left bought a nice home in Oakville which he rented out, as one day he knew would be coming back to Canada.

#13 Larry Laffer on 09.09.13 at 7:54 pm

Can’t speak for other markets, but this little annecdote hints that a severe correction is already in the works for the Montreal condo market. Some folks who bought five years ago are now forced to lower their price below their purchase price, which had never been seen in the past two decades. And this is within a very desirable central location with good access to transit and services.

#14 Buying a home on 09.09.13 at 7:56 pm

Thanks for dissecting that RBC affordability index. I always knew it was BS, but didn’t want to read the fine print.

#15 Nemesis on 09.09.13 at 8:01 pm

@OldMan#140PriorThread

NoFreeLunch?

Oddly, HogTown’s WheatSheaf used to do an excellent FreeLunch in the late 80’s.

Now, I’m guessing not so much. In those days a typical Journos BarleyLunch [never mind a pub full of them] could subsidize an ItalianWeddingBanquet.

Alas. TheGoodAuldDays.

#16 lawboy on 09.09.13 at 8:02 pm

The local bus as transportation in Mexico!?? Lol. Of course you still have the money from your Calgary house. Are there any Canadians in southern countries that are NOT weird cheapskates!??

#17 Barato | The Affluent Boomer™ on 09.09.13 at 8:04 pm

[…] Barato […]

#18 timmyt on 09.09.13 at 8:04 pm

Average family income in Vancouver is meaningless. Most couples with have decent jobs would each make at least $75K. Add to this the wealthy Chinese dumping there money here and you have many people that have a lot more than $75K. You should come to the west side of Vancouver and see for yourself.

I was there last week. The average household income in Vancouver is $83,330. — Garth

#19 takla on 09.09.13 at 8:08 pm

owned a PB german sheperd by the name of “nero” from a pup…great dog,trained him for property protection,tracking,personal protection.For an animal with a relatively small brain he was sharp,very smart with a great memory.I still remember the day i brought rotten ronnies home for lunch and tryed to feed him a burger….he turned his nose up to it and he never ate a mcD burger over his life time.Any other meat he’d wolf down .

We may be getting off track here. Just a hunch… — Garth

#20 Liquid on 09.09.13 at 8:09 pm

One of our biggest problems in Canada is a lack of productivity compared to the other G8 countries. I think you’ve outlined one of the major reasons for this Garth. If home owners are using up so much of their disposable income to pay interest to the banks there isn’t a lot of excess capital to fund innovation and productive growth :| When people eventually realize that we can’t spend our way into prosperity by cheap credit, a lot of people will be forced to make major changes to their lifestyles.

#21 TurnerNation on 09.09.13 at 8:11 pm

This blog – home of the Whopper!

What’s with yesterday’s comments. Where do these people come from? A HNW lead generator?

( All that’s missing is that 25 yr old millionaire welder from FortMac.)

Ie.

“Hi Garth
We are an average family, two children, the wife and I.

We earn about 950,000$ / year and have about 830,000$ in a balanced portfolio.

Thinking about buying a small starter house at around 2,200,000$ in GTA. Should we wait ? My dad could help me with the mortgage but I worry about interest rates increase…”

(Can I call you Ed.) Shurley not?

#22 BramptonSux on 09.09.13 at 8:14 pm

Just read your post from yesterday…

7% is fine, but your recommendation to most of us is to use a financial advisor, who takes a 1% cut. Based on this, you may want to use 6% in your calculations going forward.

Returns are net of fees, which are deductible from taxable income. — Garth

#23 TurnerNation on 09.09.13 at 8:14 pm

^ Ok I edited those numbers higher, but this is what it’s coming to..

#24 David on 09.09.13 at 8:17 pm

The affordability indices are skewed by foreign investment. Such investment does not explain either all or none of the discrepancy attributed to “debt” (a good portion is surely “debt” as indicated), but it would be worthwhile to know what the weighting is for foreign investment (i.e. since foreign ownership data is hard to come by, could this be back calculated?)

I have demonstrated previously that over 90% of sales in Vancouver are made to locals. Poor souls. — Garth

#25 abraxas on 09.09.13 at 8:22 pm

I spent some time in Bulgaria last year. There you can buy a perfect beachfront condo 20 minutes from the Burgas airport for under 100,000€. Full view of the Black Sea from the front window. Perfect weather for a pensioner. If I was older I would snap one up in a heartbeat. I can’t believe anyone in their right mind would buy property in Canada. Especially for retirement.

#26 ILoveCharts on 09.09.13 at 8:23 pm

One flaw with the index is that it doesn’t take into account the fact that the average family in Vancouver isn’t buying a single family house at today’s prices. They are buying condos where the affordability is better.

It includes condos. The ratio there is 27.9 nationally. — Garth

#27 Musty Basement Dweller on 09.09.13 at 8:28 pm

Man O Man isn’t this real estate movie the same one that played in the United States and other places in 2008? Oh well not to worry I am liquid now and will be going a similar way to Jim soon. Too bad for the youngsters who will be caught up in it. Sorry boomers you have no excuse, deal with it.

#28 takla on 09.09.13 at 8:30 pm

sorry about the off topic dog story garth,another poster started it,i digressed,any how something else i was wondering about,have you any way to measure how many new blog dogs youve attracted with this pathetic blog over the last year and of the blog dogs that contribute maybe you should poll them with a question such as …”How many truelly believe that a houseing correction is immenent”.Seems to me there are still some unbelievers out there

#29 Jeannie on 09.09.13 at 8:31 pm

Hola Jim in Mazatland, I knew you in B.of Paradise.
I wondered where you’d gone, the rumor was… back to Calgary.
Yes, it’s hard to convince some people that there’s better ways to spend one’s retirement than shoveling snow for six months of the year.
Great house by the way.

#30 Mean Gene on 09.09.13 at 8:38 pm

Maybe learning French in school is a waste of time, they should be teaching Spanish!!!

#31 Canadiense on 09.09.13 at 8:41 pm

Have any of the Mexico haters actually lived there? Exactly.
Lived there 5 months and I’m still kicking…
But if you want you could always hire Denzel to protect you (Man of Fire) great movie.

#32 John in Mtl on 09.09.13 at 8:51 pm

@#20 Liquid on 09.09.13 at 8:09 pm

“One of our biggest problems in Canada is a lack of productivity compared to the other G8 countries.”

Who wants to be more productive when the government just clobbers you with income tax beyond the “normal” 35-40 hour work week? Better to black market my skills & knowledge than give a bigger piece of my pie to corrupt gov’ts at all levels.

#33 M on 09.09.13 at 8:53 pm

The problem in Canada is that the populi is just as ignorant, self centered and arrogant sufficient as the morons just south of the border.
It might happen that a few tens of years ago gave up reading books and picked up on soaps.
Fast forward today they’re glued to the “los oficiales” whether CBC, MLS, Harper, the Oposition (her majesty’s loyal…)
Dead $^%#@$ meat just as the golden butt main dish.
The forefathers would call the living specimen “road kill”
Barely a DNA trace of independent thinking…
And these %$%^&$ vote too. Probably the voting rights should be restricted to 3% (hmmm..then again…WHICH 3% ?)

Garth…bring in some babes man.. You used to have some good habits not long ago…

#34 eddy on 09.09.13 at 8:53 pm

Let’s look at the McBagel. Let’s focus on just one ingredient, propylene glycol. I know you’re sayin’
“eddy, they can’t put that in food” Oh yes, oh yes they can. I still have some propylene glycol in a bottle in my basement. I used to mix a little with distilled water and put it in my cigar humidor. I didn’t know it had any other uses , especially for food. I never imagined I could add it to breakfast

From the mcwebsite:
Regular Bagel
: Enriched wheat flour, water, high fructose corn syrup, yeast, salt, modified corn starch, sodium
alginate, mono and diglycerides, polysorbate 60, oat fiber, propylene glycol, calcium propionate, tapioca starch,
solubilized wheat gluten, wheat starch, enzymes, calcium stearate, silicon dioxide. CONTAINS: WHEAT, OATS.
MAY CONTAIN: SESAME SEED

http://www1.mcdonalds.ca/NutritionCalculator/IngredientFactsEN.pdf

I do appreciate free wifi and clean toilets

#35 Dios Mio, Canada Es Muy Caro! on 09.09.13 at 9:00 pm

I’ve lived in Central America for 12 years and I can tell you the lifestyle is fantastic and the cost is very reasonable if you live like a local. Why live with stress and poverty in Canada when you can live in abundance with warm people in a welcoming culture?

#36 CondoFireSale on 09.09.13 at 9:04 pm

Seeing developers and builders giving away condos now with huge cash credits on closing, etc. Sure sign the market is in big trouble….

#37 Mike T on 09.09.13 at 9:06 pm

#4 Old Man

even after 12 years they do not change…check out this link from 2008

http://aht.seriouseats.com/archives/2008/09/12-year-old-mcdonalds-hamburger-still-looking-good.html

#38 OttawaMike on 09.09.13 at 9:06 pm

#4,10,12 and 19
McDonalds hamburgers..

We may be getting off track here. Just a hunch… — Garth
_____________________________________
Can we just get back to discussing Polish pensions or drinking water fluoridation? Whatever happened to Greg the damn fluoride guy?

#39 tigerbaby on 09.09.13 at 9:09 pm

> … propylene glycol …

common preservative in right concentrations …
please see
http://en.wikipedia.org/wiki/Propylene_glycol

#40 Dave on 09.09.13 at 9:10 pm

I always question mortgage brokers why pre tax income is used to determine how much the bank will let you borrow? My wife and I both have great jobs but we pay quite a bit into our pensions so our take home is not nearly what the bank would expect. It’s crazy the amount they would approve us for. I say borrow 50% of what the bank would actually approve you for. That way you can still have money to do things and have a life.

#41 Spiltbongwater on 09.09.13 at 9:10 pm

When the guy in Mazetlan gets malaria or HIV or both, I hope Canada will show him the same concern when he comes crying back to use our healthcare.

#42 Ralph Cramdown on 09.09.13 at 9:14 pm

To promote the independence of the EI fund, the Harper government will appoint an expensive looking independent board and fill it (with Tory hacks? Shurely not!) The board will announce an increase in premiums to be withheld from hard-working Canadians’ paycheques, though not for a few years. Four years later, the board will be disbanded. A year after that, a little green man will stand in an RV dealer’s parking lot and announce that the whole thing was a dream, and rates won’t be going up after all. But the programme did achieve the important goal of temporarily alleviating unemployment among certain groups. Carry on.

http://www.ceifb-ofaec.ca/en/board_directors.html

#43 Son of Ponzi on 09.09.13 at 9:16 pm

Garth,
You were in Vancouver recently.
Did you visit Central Richmond?

#44 JSS on 09.09.13 at 9:20 pm

Need some more hot chicks on this site. Way too much sausage here.

#45 Jim on 09.09.13 at 9:23 pm

“I was there last week. The average household income in Vancouver is $83,330. — Garth”

Indeed. Even padding the official stats for black market income (of which there is plenty in Vancouver), that city doesn’t do so well with current prices. Half the population would have to be making 200k per year from drug dealing (and not to locals!) in order for prices to be within historical ratios.

The foreign buyers certainly impacted prices, but the majority of buyers are local. The vast majority. And they are increasingly in debt.

#46 saanichtonian on 09.09.13 at 9:24 pm

Just to add to a few of my previous postings…

http://www.greaterfool.ca/2009/09/01/starbucks-epiphany/

http://www.greaterfool.ca/2009/10/20/contrarian/#comment-47109

http://web.archive.org/web/20100310010841/http://www.greaterfool.ca/2010/03/05/on-progress/#comment-64607

Well, that’s enough for now…recent news is that the court case to return Canada to sound money has not gone ahead as of yet.

http://www.youtube.com/watch?v=ORuqqPEX-9g&feature=youtu.be

As people look around the world at the debt havoc being wrought on the western world, perhaps you should question an MP or two about your currency system.

#47 Son of Ponzi on 09.09.13 at 9:26 pm

My wife and I gross about 120k a year in Vancouver.
If we wanted to buy (we are not) all we probably could afford is about a 400k home.
Garth, please tell us who is buying the 1million+ homes.

#48 Marginal on 09.09.13 at 9:28 pm

Billy and Akaisha Kaderli retired in 1991 at age 38. If you are interested in the expat life, this website has a wealth of information. They’ve lived in Thailand, Mexico, South America…. Yes, they travel everywhere using local transportation. Check it out; they also have info about medical care and maintaining your trading account while out of country.

http://retireearlylifestyle.com/blog/

I love to travel and would read/drool over their latest photos and articles whenever I could manage a lunch at my desk.

#49 Bob Rice on 09.09.13 at 9:29 pm

7% is the avg downpayment???? COme on! Are you serious? Holy smokes, head for the hills… we’ll be resorting to cannibalism within a few years…

#50 Nemesis on 09.09.13 at 9:29 pm

“I have demonstrated previously that over 90% of sales in Vancouver are made to locals. Poor souls.” — GARTO, el Honorable – El jinete del cerdo Magnificent

Really? Well, there’s ‘local’ and then there’s local. It’s all in the nuance, I suppose.

Regardless, I’ve always preferred the company of ElLocoMalasNalgas… We always get on so well.

http://youtu.be/BO1WwOQowlg

BonusZen:

http://youtu.be/06ze7mdJYbU

NoteToSelf: #CouldBeWorse – CharlieSheen as ElPresidente! Why not? I’m sure SmokingMan would approve.

#51 Mike Leblond on 09.09.13 at 9:29 pm

Jim, there are no hurricanes on the west coast of Mexico, so your house is safe in that regards. As for earthquakes, I wouldn’t be too sure. Concrete, unless it is re-inforced, is a lot weaker vis-a-vis earthquakes, than 2×4 platform frame construction. Make sure they use Canadian wood, not the junk they sell in Southern U.S. or South America.

#52 Freedom First on 09.09.13 at 9:31 pm

Americans & Canadians=Dumb&Dumber.

Way to go Jim! …….Freedom First.

#53 Donald Trump on 09.09.13 at 9:32 pm

We may be getting off track here. Just a hunch… — Garth

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

My Commodore 64 decoded this crap-tic message as Realtors may have to go back to day- job as clowns.

#54 saanichtonian on 09.09.13 at 9:32 pm

That first comment was
http://www.greaterfool.ca/2009/09/01/starbucks-epiphany/#comment-41354

#55 ILoveCharts on 09.09.13 at 9:33 pm

It includes condos. The ratio there is 27.9 nationally. — Garth

Thanks. I’ve taken a closer look now.
http://www.rbc.com/economics/economic-reports/pdf/canadian-housing/House-August2013.pdf

It’s certainly a useful document and another piece in the puzzle.

It’s too bad they can’t break down the income into segments and that they can’t do a more effective job of accounting for wealth (previously earned income that has been maintained.)

Let’s say that 40% of the residential units are single family houses. We should be looking at the affordability for the top 40% of income earners, not the average income. Even better, we should be looking at affordability for people who hold the top 40% of the wealth.

We have lots of glimpses into what is happening but we don’t have the full picture.

#56 Martin Lazi on 09.09.13 at 9:38 pm

Calgari is not Guatalahara dude, wake up and stop the madness !!!

#57 NotAGreaterFool on 09.09.13 at 9:42 pm

Any realtors in the 416…how are the early days of Fall market looking? Deals taking place? Multiple bids? People have cold feet or is it hot? Any buyers remaining from July and August sales?

#58 Surely Not a Delusional Canadian on 09.09.13 at 9:44 pm

#3 David Jensen
Gov’t of Canada thanks you for your support in Canada. We need people like you who would never think of living out of Canada for a second. But we need more people like you in order to increase Canada’s aging population. We already have mechanisms in school system to develop citizens like you!

Please do not travel anywhere out of Canada. You may find better weather, better food, better social life and all at 1/5 of cost of those in Canada which means BETTER LIFE!

Please keep reading mainstream media, always remember that Canada is the best and safest and greatest and most luxurious, developed and etc. country in the world.

Mexico is bad, drug cartels, etc. As a Canadian, you will be required to do drug cartel business in Mexico and get killed right?
Also you know, people sweat in Mexico which smells bad. You would never see a man sweating in Canada for at least 10 months. We are so developed and ahead of Mexico in terms of sweat prevention.

[Same for Spain, member of EU but when Garth mentioned cheap nice houses there months ago, some oxymorons were also first to raise their concerns about people protesting their government!] Gov’t of Canada also thanks you for that, protesting gov’t is so bad and evil, as good Canadian, never do it and keep safe. Gov’t knows the best and does the best for you, always.

Canada is good, there won’t be too much disputes here until world pop. reaches 50 billion and there is nowhere else but freezing Ontario swamps to live on. So until that happens, no conflicts in Canada, enjoy the swamps!

This is a public thank you broadcast msg for all fellow Canadians who never felt safe in any other country. You are only safe in Canada!

#59 Young Boomer on 09.09.13 at 9:46 pm

Don’t forget about home insurance costs. Rumor has it premiums are rising due to the floods. (Another blogger noted theirs were going up 30%)

As renters we paid $197 for renter’s insurance for the whole year.

#60 timmy on 09.09.13 at 9:51 pm

RE:I have demonstrated previously that over 90% of sales in Vancouver are made to locals. Poor souls. — Garth

You have not. You actually said the govt keeps no stats on this, even though they could easily do so. We all know there is substantially more than 10 percent of sales made to foreigners. Just spend a few hours in Vancouver and you will see proof.

Isn’t it handy they’re all a different colour? — Garth

#61 Nosty the GMO Dandelion on 09.09.13 at 9:54 pm

#34 M — “The problem in Canada is that the populi is just as ignorant, self centered and arrogant sufficient as the morons just south of the border.” — Not all of us. See first link to Smoking Man (9:28 clip).

SMan — You’ve got competition to rival your genius, except he is still a teenage prodigy building a nuke reactor in his parent’s garage! Then this one, from a 19-year-old.

#35 eddy — “I do appreciate free wifi and clean toilets.” — Thanx for the link and post. You may have heard of Monsanto and TPP — here.

#62 Son of Ponzi on 09.09.13 at 9:59 pm

Frosh – sexists rants at Sauder School of Business at UBC – many young Chinese students partaking.
Tiger mom will come to take home baby.

Many Canuck kids, too. Proud of that? — Garth

#63 CrowdedElevatorfartz on 09.09.13 at 10:05 pm

DELETED

#64 satirist on 09.09.13 at 10:05 pm

WOW. You learn something every day!! If you move to a third world country, and live like a third world local, YOU DON”T SPEND HARDLY ANY MONEY.

WHO KNEW!!??

#65 recharts on 09.09.13 at 10:06 pm

Barato comes from Borat.
Let’s not forget that.

#66 JL on 09.09.13 at 10:06 pm

Garth, I trust in your comparison to Canada (and Mexico) that you factor in Calgary’s average wages and opportunities for entrepreneurs and hard working people:

http://www.chpc.biz/earnings.html

Not saying Calgary is the greatest place on earth or that everyone want to live here. But the numbers and stats don’t lie. Incomes very high, among highest in North America and 20% over Ontario average.

No wonder Garth never comments on Calgary price to rent ratio or avg home price to avg income ratio, his arguments wouldn’t be the same.

Or if you like prove me wrong Garth, you have all the numbers… Post the average price to average income for Calgary and plot it against other Canadian cities and rest of country..

Tell it to Jim. I love Calgary. So many untamed hormones. — Garth

#67 Mak The investor on 09.09.13 at 10:07 pm

Sounds great.

Question for the knowledgeable:
If I retire in Mexico, can I send my old age medical bills to Canada as I have paid tax here all my life?

Looking at the efficiency of our medical system, it would have been outsourced to mexico by then so no worries.

Some dividend yields to munch on:
SDIV: 7.8% dividend yield
SPFF: 7.7% dividend yield
DWX: 6.6%

#68 Son of Ponzi on 09.09.13 at 10:11 pm

Young boomer in Calgary.
Calgarians living on the flood plain and trying to renew their insurance will probably out of luck.
Just like there is no flood or earthquake insurance for owners of homes in Ditchmond, a suburb of the Best Place on Earth, Vancouver where house prices almost doubled tripled since 2002, for no apparent reason.
Or maybe it’s because offshore investors.

#69 not 1st on 09.09.13 at 10:11 pm

Sorry Jim, Canada may be a bit overpriced and delusionally horny for RE, but its still the best country on the planet bar none.

Haven’t heard about any tourists being hacked to death on the streets of calgary yet.

#70 CrowdedElevatorfartz on 09.09.13 at 10:12 pm

@#52 Mike Leblond
“Jim, there are no hurricanes on the west coast of Mexico, so your house is safe in that regards.”
++++++++++++++++++++++++++++++++++++

Actually there are hurricanes in the Pacific but they rarely land in the Western Hemisphere. When they do…..Aiiiiiii Carumba!
They dont call them hurricanes in the Pacific. They used to call them Cyclones but for some bizzare reason they now call them Typhoons.

Po-tay-Toe, Po-Tah-Toe.
Either way, big wind, big waves, lotsa insurance claims.

Google Cyclone/Typhoon Freida re Vancouver getting the crap pounded out of it waaaaaaay back in the early 60’s

#71 Pr on 09.09.13 at 10:17 pm

The Mexican going back to their country to. In Canada the real estate, it’s not a bubble, its a Montgolfier.

#72 JimH on 09.09.13 at 10:22 pm

#5 Youliana

I love the window bars :-) I guess they would provide some safety of the inhabitants and their belongings. I personally prefer the creek under my bar-free windows of my North Vancouver rental!

Of course. But then again, you have ADT now don’t you… and the cops can get there from Tim Horton’s in a matter of hours… sometimes less… was smugness part of your rental agreement?

#73 Waterloo Resident on 09.09.13 at 10:35 pm

Mazatlan = city in Mexico, across from the southernmost tip of the Baja California peninsula, population 438,000 people. It is a popular tourist destination.

My advice: Visit, but don’t live there.

http://www2.canada.com/story.html?id=6058418

January 26, 2012:
Mexican authorities investigating the beating of a Calgary woman found badly injured in a Mazatlan resort.
Sheila Nabb, 37, suffered severe facial injuries in an attack that left her bloodied and unconscious
The attack has again raised the debate over tourist safety in Mexico. In Mazatlan, in particular, some cruise ships, including vessels with Disney Cruise Line, Holland America and Princess Cruises, have cancelled stops due to concerns about crime against passengers.
The state of Sinaloa, where resort town Mazatlan is located, is also home to infamous drug lord Joaquin (El Chapo) Guzman, head of the notorious Sinaloa cartel that exports cocaine and crystal meth to the U.S.

Did you hear the one about the kid being shot nine times on a Toronto streetcar? By cops? — Garth

#74 CrowdedElevatorfartz on 09.09.13 at 10:41 pm

@#52
Sorry it was Typhoon Freda and it was calculated as being the strongest storm to hit the Continental US in almost 100 years. It was the equivalent of a category 3 Hurricane but it was joined by a smaller tropical storm which boosted its power.

Winds clocked at a military radar station in south west Washington state recorded a wind speed of 160 MILES PER HOUR before the guage was destroyed by debris.
Vancouver experienced winds clocked at 100 MPH.
It also had the lowest barometric pressure ever recorded in the US. 46 people killed in the US. 7 killed in BC.
Damage in 1962 was estimated at $265,000,000.00
Experts estimate an equivalent storm would cause Tens of Billions in damage.
Yup…….. we get Hurricanes on the west coast.

#75 Screwed on 09.09.13 at 10:43 pm

Mazatlan vs. Calgary affordability?

Don’t waste your time even bringing the comparison to Calgary. Last time I checked, Mazatlan residents didn’t make 100k+ in the oil and gas industry. Furthermore, if Calgary falls so shall the Mexican drug war infested shit holes.

Garth, you’re grasping at straws here.

Actually the post is about affordability. Sorry you feel threatened. — Garth

#76 JulinCR on 09.09.13 at 10:44 pm

Don’t buy all the hype about moving abroad. Almost all the people who you see saying that life is so blissful there are trying to sell you real estate. BTW, you won’t be able to unload it any time soon, sometimes never.

We met Oh so many Canadiens stuck in Central America, because they couldn’t sell their house. First they spent an arm and a leg to bring their container in the country, buy house, hire a gardener and a maid. Then in (usually less than 2 year) they want back so bad.

Don’t take advice from any ex-pats who lived i a particular country for less than 5 years.

To #32 and #35. If you think that culture in Central America is “welcoming”, you haven’t been there long enough or you don’t speak enough Spanish. Here is what locals really think of you: “that gringo/gringa has a money tree back there in Canada”. They think it’s ok to take advantage of rich gringos. That’s the real culture!

#77 Old Man on 09.09.13 at 10:47 pm

#68 Mak – If you retire in Mexico, as a Canadian the fee for full medical insurance there the last time I looked was about $200.00 a year.

#78 JulinCR on 09.09.13 at 10:48 pm

to #73
bars on widows is sort of tradition. It came with the Spanish.

The police probably won’t come at all, because they don’t have gas.
I’m not kidding.

The ambulance might not come either, just because they are unable to find your address. In case of emergency, you’re better off to transport the person in your car to the hospital (preferably private one).

#79 Big Al (New) on 09.09.13 at 10:50 pm

We happened to sail to the Bahamas two years ago as our boat was kept in a slip in Lauderdale year round. Met a couple from Halifax who had a condo just outside of Freeport and got invited back for dinner. Condo was on a canal 10 minutes walk to beaches and slips available to condo owners to rent. So to make a long story short 65k later and a monthly maintenance fee that including the slip,all in for 300 a month,we’re 3 hours on Westjet away from sailing all winter long. There are so many opportunities if your willing to leave your Canadian mindset behind it’s not funny.

#80 JulinCR on 09.09.13 at 10:50 pm

to #78

You get wht you paid for. If it’s $200 per year, you probably will not survive your first heart attack.

For the dreamers: if you can’t afford private hospital in Central America, DO NOT move there.

Do you have more than venom? A fact, maybe? — Garth

#81 Inglorious Investor on 09.09.13 at 10:53 pm

Never mind SFHs. Inflation in rental housing has been incredible over the past five years or so.

Small apartment blocks (10 to 20 units) that used to fetch around $100,00 per unit, are now commanding anywhere from $150,000 to well over $200,000. And a triplex downtown? Forget it.

Have rents increased at the same pace? Not a chance.

When I run the numbers, it just makes no sense, except if prices continue to inflate at the current pace.

And have you ever seen the average 10-plex these days? You know, those flat-roofed, brick blocks that were built in the 50’s? Most are falling to pieces inside. Usually the term ‘renovated’ means little more than lipstick on a pig.

They say that the higher they climb, the harder they fall. So far, gravity and Canada don’t mix. One day, perhaps.

Deflation? What deflation? This is the 1970’s without the income growth. Inflation. Inflation. Inflation. Unless we get another bout of deflation, brace yourselves for the coming explosion in consumer prices already signalled by gasoline and other goods and services. Especially of the CAD continues to weaken.

However, if the law of gravity and reversion to the mean ever do reassert themselves, then it looks like we are heading for a massive, parabolic blow-off that will wreak utter havoc when the boom finally goes bust.

Who will be the greatest fool?

#82 Son of Ponzi on 09.09.13 at 10:53 pm

My wife’s niece from HK is studying at UBC.
My wife got some frantic phone calls today from her sister in HK worrying about the rape chant news and worrying about her daughter’s safety.
It’s well known that white boys are targeting young Chinese female students.

Evidence? — Garth

#83 Smoking Man on 09.09.13 at 10:57 pm

#20 Liquid on 09.09.13 at 8:09 pm
One of our biggest problems in Canada is a lack of productivity compared to the other G8 countries. I think you’ve outlined one of the major reasons for this Garth. If home owners are using up so much of their disposable income to pay interest to the banks there isn’t a lot of excess capital to fund innovation and productive growth :| When people eventually realize that we can’t spend our way into prosperity by cheap credit, a lot of people will be forced to make major changes to their lifestyles.

………..

Good point on productivity. My son is selling some amazing software designed by Daddy O

He’s doing good but kill ratio is 50 to 1 not bad for software sales.

The point is every single company he approches will be benift greatly, ROI is 2 months, crazy cheap as far as I’m concerned.

This is what he’s up against, business is so spoiled, looking for Gov grants and tax credits.

That’s Canada, socialized business…

We started offering 30 day free trials, amazing how many accept, it’s the smoking man in them, thinking they will just keep using it after the 30 days, front end is excel, used as a grid, back end, proprietary database.

Good thing is after they have invested hours and hours of building there data, If the amateur smoking men don’t pay us.

Kaboom……..

#84 Marginal on 09.09.13 at 10:59 pm

#73 JimH on 09.09.13 at 10:22 pm

Jaime, Diego, for the love of Santiago…..

#5 Youliana/aka Julia? was stating a personal preference. You on the other hand accused her of being smug.

Perhaps it would be better to share info as to why bars on windows are merely decorative and support with stats that crime in Mazatlan is as low as North Van. Many readers who have considered buying in Mexico would be interested.

#85 Donald Trump on 09.09.13 at 11:00 pm

MEMO:

To fairer gender:

Why work?

Simply marry right con-did-date

http://www.richmondreview.com/news/223006281.html

QUOTE:

Vancouver Canucks owner co-owner Francesco Aquilini has settled his potentially very revealing divorce with his wife of 20 years, Taliah, ahead of court proceedings

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

Funny how the local COV rags were having intimate access to “Hey Giudo ” family insider revelations.

ehhh…. whatever….capisce

#86 Realist on 09.09.13 at 11:01 pm

#48 Son of Ponzi
“My wife and I gross about 120k a year in Vancouver.
If we wanted to buy (we are not) all we probably could afford is about a 400k home.
Garth, please tell us who is buying the 1million+ homes.”

Yes, I like to know that question as well. Who is buying these 1 million plus homes. Are these people entrepreneurs, business owners etc., or people taking on lots of debt?

On that note, went to a wedding on west side of Calgary recently just off of Trans Canada in Spring Banks near the golf course. The houses and there is lots of them – I would guess would be worth minimum 1 million to a few million. I wonder if those houses are bought with cash or financed.

#87 Smoking Man on 09.09.13 at 11:11 pm

Had a nap, sleeped of the 30 beer pool buzz, swimming in a t storm, amazing. Gatho thanks for saving my ass yet a gain, took down the pic.

What was I thinking.

Thank you sir.

#88 Franco on 09.09.13 at 11:13 pm

I would rather live in Canada than in Mexico any day. Yes I do agree the RE market will eventually correct, but that is normal, it cannot go up for ever, but it will stabilize.

#89 Vecimaman on 09.09.13 at 11:17 pm

Whether Real-Estate was in bubble since inception of this website or not is not what I would question. However, the truth is, followers and readers of this blog such as myself, have missed a huge speculative bet that could ‘ve made us a lot of money. Your evaluation approach to assets, while flawless, works for (t -> infinity). Meanwhile many people make lots of money riding the irrational exuberance…

Nobody has stopped you. — Garth

#90 not 1st on 09.09.13 at 11:31 pm

Canada will be the winner of the 21st century once climate change takes hold and the earth adds another 3 billion mouths to feed, mostly in the 3rd world. I can visit mexico any time, but I will keep my citizenship right here.

#91 Smoking Man's Old Man on 09.09.13 at 11:32 pm

I have a friend in Vancouver, who is 70 years of age. Has a condo valued at $400K with a mortgage of $250K. He drives an AMG Mercedes, and no savings. Super nice guy, just financially screwed.

Perceptions, in Vancouver, can be misleading.

I know it’s just one example, but I’m pretty certain there are a lot of others in similar situations.

#92 Entitled Millennial on 09.09.13 at 11:35 pm

Hi Garth:

I’ve been reading your blog for the past couple of years. I’ll admit that I’m a fan.

Do you think it will take a recession before housing prices correct? Fundamentally, doesn’t there need to be more sellers than buyers?

My generation is comfortable with credit, because we’ve been raised on it. My student loan is what a mortgage was in the mid 90s. What’s another $300K? Debt has become theoretical. The only thing that’s tangible is the monthly. In other words, we’ll keep buying until the bank says no. And the bank will say yes so long as we have jobs.

#93 Contradiction Detective on 09.09.13 at 11:37 pm

I have demonstrated previously that over 90% of sales in Vancouver are made to locals. Poor souls. — Garth

Don’t you think that’s enough to majorly effect the market, I mean, if sales drop 10% you go screaming the market is crushing but if 10% of buyers are non-locals you dismiss it as minor ?????????????????????

The only conclusion is that Van residents are responsible for Van prices. — Garth

#94 Old Man on 09.09.13 at 11:40 pm

I thought would update the IMSS National Healthcare Program in Mexico for Americans and Canadians who retire in Mexico. The stats for 2011 that covers all including prescription drugs comes in at $300 USD a year or $600 USD per couple. Yes the hospitals have state of the art equipment, and the doctors are well educated and trained. This is a bargain, and don’t let the word Mexico fool you, as judge not by a name.

#95 Obvious Truth on 09.09.13 at 11:45 pm

Great post. Been waiting for one like this.

Posters are in denial. Stage 2 of truth recognition.

True story – Moved with my wife to a smaller city after living in Toronto. Was 2001. We sold a place and had 40k for down payment. Total income of 180k. In our pre approval we were told by TD that we could buy a home for 180k. That means 140k mortgage.

They let us go as clients RSP’s and all because we wanted to spend 240. Our friendly agent found us an alternative but wasn’t easy. Had to pay posted rate.

Rates at the time: 6.4%

My point. Even posters 41 and 48 are way off on what they can afford. Cheap money and a sketchy system of appraisals have made prices so silly even the conservative folks reading here would pay way too much.

Affordability for the deniers reading here has nothing to do with math.

The banks know that most people can’t afford their homes. They do the same math they used to.

They also know cmhc holds the bag.

Try to buy 1M plus without 20% and see how quickly they pull out their calculator. In my neck of the woods 1M plus may as well be priced at 5M.

At 6.4% – the math changes drastically.

I personally don’t expect rates to move anytime soon. Inflation expectations are moving the wrong way.

I do believe CB’s will get inflation eventually.

#96 Son od Ponzi on 09.09.13 at 11:58 pm

Garth,
“the only conclusion is that Van residents are responsible for Van prices”.
Please provide evidence.
Thanks

#97 Joe Calgary on 09.10.13 at 12:02 am

Decided to take a few courses at university this fall, today was introduction day in drama class. The cute 22 yr old girl sitting next to me introduced herself and mentioned she was in the process of selling her condo and buying a house. A 22 yr old student, we are cooked.

#98 JimH on 09.10.13 at 12:03 am

#85 Marginal

Happy to oblige! Canadian chauvinism could use a dose of reality…
An expat dual citizen, I live 1/2 year in rural Missouri and 1/2 year in Arizona… in a sedate suburb of Sierra Vista… 15 miles from the Mexican border.

(Just as a kindly aside, my county in Missouri has had 1 (one) murder in the last 19 years, but that’s another story… makes you wonder about all the conventional wisdom, no???)

Mazatlan is a wonderful place… this is a fun read…
http://www.maztravel.com/maz/retire.html
… and holy $h1t!!!! Crime??? Look at this!!!!!!
http://www.numbeo.com/crime/compare_cities.jsp?country1=Canada&city1=Montreal&country2=Mexico&city2=Mazatlan

Marginal, your assumptions are as tiresome as they are silly and ignorant. I know that folks living in “The Greatest Place on Earth” (yes, they really did put that on their license plates!) might find it hard to imagine, but to many others like me, greater Vancouver is just a great place to be from!

#99 HAWK on 09.10.13 at 12:10 am

The fundamentals are all there but it seems that sentiment just keeps pushing the market upwards.

I tell people about the difficult for first time buyers, the creeping rise in rates, the deluge of boomers, but they always have the same answer………”there are 200,000 immigrants coming to Toronto, there’s only one direction prices are headed”.

Oh well………time will tell……….

#100 Shawn on 09.10.13 at 12:12 am

THE BIG NON SEQUITOR

Premise: Average family cannot afford average house price.

(Flawed) Conclusion: Average house price is too high.

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

Why it is flawed:

Houses are bought by actual buyers who are not average.

50% of families make above average.

FAR less than 10% of families buy a home in any given year

Most families already own and are not buying.

30% of families are poor and will never buy.

As long as the actual buyers cannot afford the price then the price is not too high.

Average house price may indeed be too high, but the fact that the average family cannot afford the average house is not very much part of the equation.

#101 Oneday on 09.10.13 at 12:21 am

In the US, The student loan bubble is starting to burst

http://www.cnbc.com/id/101012270

#102 JimH on 09.10.13 at 12:24 am

#95 Old Man
“… don’t let the word Mexico fool you, as judge not by a name.”

Geeze Louise! How come we have to be “old” before we get wise!

Down in my area of Arizona, most in my neighborhood get a lot of their medical care and virtually ALL of their regular dentistry done in Naco, Nagales, or San Luis Rio Colorado. Seems like all the doctors and dentists are either USA, or Canadian trained. (and a real bonus… there is no &*^$%#@*&% waiting!)

#103 Devore on 09.10.13 at 12:35 am

#14 Buying a home

Thanks for dissecting that RBC affordability index. I always knew it was BS, but didn’t want to read the fine print.

It’s just an index. There is nothing special about it. An index is used to illustrate a pattern by comparing comparable things over time. The key lies in how one interprets it, and what conclusions are drawn.

#104 Cici on 09.10.13 at 12:47 am

I’m in Victoria right now, and houses are dangerously overpriced. Anyone I know who has bought in the last 5 years has technically lost money on the transaction (house valuation has dropped since purchase) and every single one claims to not care about their mortgage debt level, because they don’t foresee ever being able to pay the mortgage off completely anyways. So, the basic strategy is “live big in the present, and worry not about what’s to come. Home prices can only rise, la dee la dee la!”
Not only that, it’s obvious that people are maxed out. For every beautifully maintained and well-landscaped home/property, there are 20 surrounding it with unkept, brown lawns, overgrown hedges, and endless streams of junk piling up in the yard. Yet ownership is equated with status.
And I thought things were bad back East. There’s got to be something in the drinking water out here that’s skewing people’s common sense.

#105 Carpe Diem on 09.10.13 at 12:51 am

There is no beach in Calgary.
There are plenty in lots of those in Mexico.
Mexico is a 3rd world country.
So is Spain and Greece the days.
Mexico has lots of drug cartels.
Why? Because USA and Canada needs drugs to their clientele!

Mexico has awesome places to retire. Make sure there is a hospital close by, your insurance covers it, you have a good pension fund.

#106 WaitinginLeaside on 09.10.13 at 12:55 am

I have been waiting for prices in Leaside to go down for 4 years now. I don’t think its going to happen. We have a balanced 60:40 Equity/Bond portfolio that’s just north of $500,000. Dividends are great! We are expecting our first child soon so our income will drop from $310,000 to roughly $220,000 when my wife stops working. We want to buy a home but are worried about whether we can afford it on a reduced income. Help!?

#107 happy renter on 09.10.13 at 1:00 am

I’ve decided to move to Puerto Vallarta for 5 months and work in Fort Mcmurray for 7 months.I met one guy who rents a studio for $300 a month and spends about $700 for food and beer money.I’m 47 and decided this is the life for me.Less stress and less for the blood sucking goverment.If you go there you will be amazed of all the people living down there even with good pensions. I met one American cop who lives there all year because its to expensive in Florida.Pipefitters,bricklayers,pub owners the list goes on.I’m glad the media scares people away from Mexico,it means more places to rent for the winter months.No lie,I feel safer walking in all the neighbourhoods in PV at midnight than downtown Victoria.There is so many violent attacks on innocent people in Victoria late at night ,you would’nt believe it.Ask any cop is it safe to walk alone at night in Victoria and the truth will scare you to stay in after dark.

#108 Devore on 09.10.13 at 1:03 am

#52 Mike Leblond

Make sure they use Canadian wood, not the junk they sell in Southern U.S. or South America.

Really? Really?

This is just another case of “it’s different here”. Yes, even our trees are better.

The reason they would use Canadian lumber is that we’ll happily export raw logs for pennies, and they can use cheap local labour to process it. So it’s cheap, and they don’t have to cut down their own forests, which are just as good as the Canadian ones.

Speaking of “it’s different here”, the case of foreign buyers blowing up the market doesn’t wash either. Lots of places in Canada (and around the world) get more foreign buyers than Vancouver, and their prices have gone up just as much. And there are lots of places with little foreign buying (like Winnipeg) where prices have gone up even more!

Every buyer has an impact on the market. But whether foreign or domestic, they do have one thing in common; they’re both paying way too much.

#109 Devore on 09.10.13 at 1:17 am

#70 not 1st

Haven’t heard about any tourists being hacked to death on the streets of calgary yet.

No, just Canadians getting their heads chopped off on the Greyhound, or getting tasered or shot to death by cops.

#110 Habsfan on 09.10.13 at 1:18 am

Amazing.

Half of the people here (and Canadians outside this blog) say, “Move to a poor country and take advantage of how cheap everything is” (thus pushing up house prices for people who make a fraction of what we do), while at the same time the other half (and even some of the above group probably) is pissed at foreigners coming to Canada and buying property (and [supposedly] pushing the prices up here).

You can’t have it both ways, people! If you/we advocate going to poor countries and screwing them out of being able to afford a house, then you/we can’t cry when others come to this country to buy property. It could be argued quite easily that we are in a much better position to deal with foreigners coming here than the people of Mexico/Belize/Costa Rica are with us going there.

#111 Devore on 09.10.13 at 1:25 am

Evidence? — Garth

Son of Ponzi is a prolific troll and race baiter on Vancouver-related real estate blogs. Usually just makes stuff up. Best ignored.

#112 BillyBob on 09.10.13 at 1:34 am

The ignorance of many commenters re: overseas living is at turns amusing, painful, but most of all…embarrassing. It’s way beyond the level of sheer, rednecked stupidity that is usually attributed to our cousins south of the border. Canadians have NOTHING on them, from the sounds of it.

I’d be curious to know just how many people pontificating on the dangers of Mexico have actually lived there? As opposed to just reading some news piece or “something they heard”. I’d love to know how many of the “experts” have actually travelled beyond their borders. And no, I don’t mean leaving Burnaby to visit their cousin in Regina.

I was somewhat forced to relocate overseas, to the Middle East, by lack of work in my field in Canada (airlines). Talk about a different culture! Yet people in Canada seem to think it’s all bombs and bullets and terrorists, where the truth is I live in more safety than, for example, that kid on the subway in Toronto. Financially?! I couldn’t even afford to move back and take a job as a pilot now, as the new startups with WestJet and Air Canada (Encore and Rouge) pay a starting wage around 35k. It’s the Walmartization of virtually every industry. Those wages are less than what I put in the bank every few months after expenses – and taxed! No tax, and company pays an accommodation allowance that I choose to spend on a brand new, comfortable apartment renting for far less, allowing for even more savings. Is this possible in Calgary? Anywhere in Canada?

Health care? All employees (over 40,000) have free access to incredible facilities staffed by Western-trained doctors. There is no such thing as “wait times”.

Say what you want about the reasons WHY this is possible, but to dismiss alternatives to livin’ the Canadian debt dream, as the couple in this blog post have, is just…sour grapes.

People need to wake up. It’s a global village now. Vast sums of money cross borders with a click on a keyboard. Labour is just a commodity, with the vast amount of it available cheaply. Hint: it’s not in Canada. You will not get rich, put your kids through college, or retire, on a debt-based economy. I guess that’s why most Canadians retirement planning includes Lotto 649 tickets.

Mobile labourers and people moving to retire are no longer the outliers. There are entire industries now that revolve around expat communities, all over Asia, South America, Eastern Europe – places most Canadians couldn’t find on a map. Better weather, lower costs, all-around better community living, and all kinds of interesting lifestyle perks. Cherry-pick the negative stories to support your own biases and fears if you like, but the only person that will lose out is you.

It’s fine if no one wants to leave the comfort zone of their home country. People are entitled to their opinions. But when those opinions aren’t based on actually “walking the walk”, but merely their own fear, it’s a bit sad.

#113 Randman on 09.10.13 at 1:41 am

I’m in Thailand right now…..checkin it out….
Only problem I see with living here is…do you want the sea or mountains!

#114 w-hat on 09.10.13 at 2:00 am

I’m a big fan of the Yucatan in Mexico and have done a lot of research into owning property anywhere near where you might want to own property in Mexico. There is a law, which I believe was in question this spring (but I have no idea what the outcome was) that foreigners cannot own land within 50km of the coast. To buy you have to negotiate through a bank or RET who does the buying for you and leases you the property. Listening to Mexicans talk about that law is like listening to Fox news tell you why Mexicans shouldnt be allowed into the US. It’s all baloney.

At any rate, Mexico has amazing food, beaches and an approach to life that suits retirement. On the negative, it is a corrupt place where money talks and justice usually walks. I hope they sort that out in the next 20 years, before I retire, because I would love to “actually” own there.

#115 M on 09.10.13 at 2:05 am

#62 Nosty the GMO Dandelion

But of course not all. There is the rest.. the 3%..

#116 Fed-up on 09.10.13 at 2:06 am

@#45 JS
———————————————————————–

Hot chicks don’t come onto this blog. They’re too busy railroading their men into $900,000 mortgages.

#117 George Osborne - clueless on 09.10.13 at 2:13 am

Controversial 95% mortgages ‘show we have a healthy economy’: They’re not weapons of financial mass destruction, says Osborne

Read more: http://www.dailymail.co.uk/news/article-2416437/Controversial-mortgages-healthy-economy-Theyre-weapons-financial-mass-destruction-says-Osborne.html#ixzz2eT3IbB3V
Follow us: @MailOnline on Twitter | DailyMail on Facebook

#118 M on 09.10.13 at 2:26 am

#86 Donald Trump

MEMO:
To fairer gender:
Why work?
Simply marry right con-did-date
********************************************************
“Tour dady’s rich
And your mama is pretty…”
..so Ella Fitzgerald sings Gershwin

…maybe mama ain’t that pretty as it used to be decades ago

http://www.theguardian.com/lifeandstyle/2004/nov/07/foodanddrink.features11

Obesity numbers are worse now 9 years later

..I wonder whether Garth works harder today for the babes’ pictures ,than 5 years ago.

#119 The real Kip on 09.10.13 at 6:01 am

How’s the snowmobiling in Mazatlan? Ice fishing? Hockey, skiing? It’s no wonder it’s so cheap, nothing to do there in winter but there’s always summer and the nice 100 plus temperatures.

I’ll take Canada any day!

#120 dan mclean on 09.10.13 at 6:05 am

You may want to check out the state of the hospitals and medical system first. I’ve seen far to many in Central and South America, even capital cities, which are grossly dirty and inadequate. And depending on the need -car accident, burst appendix, or any other emergency, you may not be able to fly to Calgary for treatment. Good luck.

#121 fancy_pants on 09.10.13 at 7:15 am

The real pi$$er is guess who indirectly foots the bill when this all falls apart? That’s right, all the fiscally prudent and responsible, live within your means folk.
The gov’t caters to the masses and the masses are up to their eyeballs in debt…
so… will just be another score for the financial sluts when it’s all bailed out by the savers.

#122 Squatter on 09.10.13 at 8:03 am

There are many RE pumpers in 3rd world countries who will promote these countries, saying there is low crime.
The truth is the locals will think you are rich, and watch out for violent robberies, kidnapping, etc.

You mean like Winnipeg? — Garth

#123 Herb on 09.10.13 at 8:25 am

#122 fancy_pants,

“the masses … up to their eyeballs in debt …” kept the economy perking and put a lot of money into circulation and pockets.

How about attaching some of your blame to the seducers, not just the seduced?

#124 Catalyst on 09.10.13 at 8:27 am

If spending 105% of your household income on housing is ‘less affordable’; I would hate to see what unaffordable looks like.

#125 JimH on 09.10.13 at 8:42 am

#120 The real Kip
“How’s the snowmobiling in Mazatlan? Ice fishing? Hockey, skiing? It’s no wonder it’s so cheap, nothing to do there in winter but there’s always summer and the nice 100 plus temperatures…”
====================================
Is this really the best you can do?
Ice fishing, snowmobiling and skiing are fine for some “frost-backs”. Obviously not quite enough of a draw for the millions of Canadians who flock south in October after every Canadian Thanksgiving, having given thanks to the Almighty for a few months of reasonably tolerable weather.

Do you really think those flocks of snowbirds have it all wrong?

As to your claim of Mazatlan’s scorching summer temps, the long term average highs for June, July, August and September range from 88.3 to 90.3 with night time average lows in the mid-seventies. As for the “winter” temperatures, well, I’ve looked, but there aren’t any… no “winter” at all…

#126 Wes Mantooth on 09.10.13 at 8:44 am

Great… lets compare Mexico to Canada… and be objective… no comparison for the retired set that is travelling on a Canadian passport and ready to jet home at the first sign of health problems.

1.Passport
2.Health Care
3.Education
4.Democratic country with a strong financial system

This is why foreigners are knocking down the door, and why they are forgoing the sunny beaches of Mazatlan. A house here buys you a lot more than just a place to hang your hat.

#127 Stickler on 09.10.13 at 8:44 am

chacun à son goût

Many Canadians appear so afraid of the world outside of Canada…or outside of their armed and gated resort vacations.

Those types will only feel safe if they live in a condo on top of a hospital….hey! Great idea. Who’s in?

#128 Ralph Cramdown on 09.10.13 at 9:00 am

What I like about the RBC index is that it plainly shows that, at one time in the not-so-distant past, putting 25% down for your first home was considered normal.

And as commenter #118 pointed out, there’s fierce debate in some places as to whether 5% down mortgages are a good idea, or just a sop to homebuilders.

#129 :):( Ying Yang on 09.10.13 at 9:01 am

#84 Smoking Man on 09.09.13 at 10:57 pm
We started offering 30 day free trials, amazing how many accept, it’s the smoking man in them, thinking they will just keep using it after the 30 days, front end is excel, used as a grid, back end, proprietary database.

Good thing is after they have invested hours and hours of building there data, If the amateur smoking men don’t pay us.

Kaboom……..

Smoking Man my brother is a programmer and has created programs for sale around the world. He has sold many in North America as well. He said if you create a program that knowingly has a flaw, back door entry, or countdown timer then you can be charged with Fraud. So be careful what you tell people about your software program.
Smoking Men don’t last long in jail.

Frauds that can be committed by sellers include

selling counterfeit merchandise –
shill bidding;
selling bootleg merchandise;
receiving payment and not shipping merchandise;
shipping items other than those described;
giving a deliberately misleading description;
knowingly and deliberately shipping faulty merchandise;
denying warranty exchange after pre-agreeing to RMA of DOA merchandise

#130 Sean on 09.10.13 at 9:03 am

Seven years now in Panama for us… not perfect, like some will claim, but a very nice and perfectly do-able alternative to Canada. I was looking forward to the barrage of defensive myth-perpetuating commentary about how horrible the rest of the world is… Hunker down, Canada.. winter’s a comin’… lol!

#131 palmyra on 09.10.13 at 9:03 am

Now a non-resident Canadian, I have lived in Puerto Vallarta for a year and a half. Canada is a wonderful country, but living in Mexico is pretty wonderful too. And I can tell you first hand a few things:

1. There is far less violent crime here towards the average person than in Canadian cities. Its absolutely true that some parts of Mexico are extremely dangerous but Puerto Vallarta isn’t one of them.

2. Health care here is fantastic. I have access to almost any kind of treatment that I would in Canada. I have wonderful caring doctors and dentists and I can get an appointment within 48 hours. I do pay for health insurance which runs about $2,000 US per year but that gives me worldwide coverage (as I travel a fair bit) and provides access to all hospitals and services. So its just not true that you have to worry about health care here.

3. Property taxes are very low compared to Canada. My property and household insurance is higher though. I pay approx $2,200 US per year due to added expense for hurricane and earthquake coverage.

4. I chose not to have a vehicle as taxis and bus services are excellent and cheap. In the long run, less expensive that owning and maintaining a vehicle.

5. Cost of living. I don’t live that frugally, so my monthly cost of living expenses are probably only slightly cheaper than in Canada. For instance, what I save on heating costs in Canada I spend on air conditioning here. Food costs are probably on par unless you shop at the local mercados.

6. Conveniences. You can get most things here. There are the popular big box stores – Home Depot, Walmart, Costco, Sam’s Club, etc. Some very nice shopping malls and you can find most things that you would at home. Not all, but most. You do have to make some adjustments.

The largest savings for me and one of the main reasons I decided to relocate to Mexico was housing costs. I was able to purchase a 2800 sq ft penthouse on a beautiful beach just south of the city for less than a townhouse in suburban Calgary would cost. I have a beautiful pool, 180 degree view of the bay, and of course gorgeous weather all year round.

So unless you are living or have lived in Mexico, perhaps you are not qualified to make assumptions and comments about the realities of residing here. And I don’t know if you can call Mexico a third world country anymore? It certainly doesn’t feel like that here in PVR. I can heartily recommend this area as a lovely place to call home!

#132 tb on 09.10.13 at 9:03 am

@#99 JimH

That numbeo site has 36 reports for Mtl, and only 2 for Mazatlan.
Hardly reliable numbers don’t you think?

#133 DM in C on 09.10.13 at 9:41 am

“How’s the snowmobiling in Mazatlan? Ice fishing? Hockey, skiing? It’s no wonder it’s so cheap, nothing to do there in winter but there’s always summer and the nice 100 plus temperatures. ”

Ahahahaha — that’s your argument for staying in Canada? Hahahahahaha. Yeah, seniors love to play hockey and snowmobile and ice fish — nothing better for arthritis and joint pain than deep soul crushing cold.

#134 Rusty Venture on 09.10.13 at 9:44 am

I can see buying in some warm climate if you plan to stay there permanently, but if you are a migrating snowbird, why not rent? Who wants to be stuck in the same Florida double-wide winter after winter?

Mazatlan this winter, Phuket the next, try Spain afterwards, then onwards to Santiago.

#135 young & foolish on 09.10.13 at 9:53 am

A somewhat disingenuous housing comparison …. but true enough.

The problems facing Canada’s economic output seems to match that of many first world countries … more un, or under-employed than honestly reported, and more new part-time or low paying jobs. New manufacturing technologies need less people and more robots. Companies want to be nimble and won’t hire for the long haul. What to do with all these people? What to do about all these seemingly expensive “assets”? If people can’t pay now, how will they be able to tomorrow? Something has to be re-calibrated, and you won’t likely get too far ahead of the crowd.

#136 Yo on 09.10.13 at 9:55 am

I am not sure about the straight up comparing of Calgary to Mexico.

I think more comparable to watch what the rise in interest rates are doing in the US, and what that means for the Canadian market at such high valuations.

http://www.bloomberg.com/news/2013-09-10/bofa-cuts-jobs-as-mortgage-slump-ensnares-jpmorgan-wells-fargo.html

#137 beefcake on 09.10.13 at 9:59 am

Here’s another example out of strong and steady Ottawa:

May 31 – $399
June 5 – $369 (must have only been crickets during that week)
July 21 – $349
August 15 – $339
September 9 – $319

So that’s a 20% drop. Still not sold. mega lust site 867936

#138 45north on 09.10.13 at 10:00 am

BillyBob: I’d be curious to know just how many people pontificating on the dangers of Mexico have actually lived there?

I was in Mexico two years ago. Loved it.

M: “Your daddy’s rich
And your mama’s good looking”
Ella Fitzgerald sings Gershwin

http://www.youtube.com/watch?v=u2bigf337aU

#139 Yulyyz on 09.10.13 at 10:01 am

@113 Billy Bob
You sum it up well – it’s ok if someone isn’t into traveling and just wants to stay in Canada, but don’t knock those that have lived in a different country ( especially one where the living is generally good and very affordable ) if you’ve never even tried it and try not to latch onto a few media stories and generalize – stuff happens everywhere.
With respect to crime – I lived in Zurich for about 3 years – in that time my apartment was broken into, lots of my stuff stolen. In the same span of time I was threatened by some nut on a train, a friend of mine was assaulted walking in the city about 10pm, and I had to steer clear of pickpockets in Lucerne. All this in 3 years in Switzerland. The policeman even told me that there is usually a breaking every 15 minutes somewhere in Switzerland.
All that to say- nowhere is perfect, but if I had the possibility to retire to an affordable, pleasant place with nice people and nice winter weather – I would definitely have Mexico in my top 3 spots.

#140 Mr Happy on 09.10.13 at 10:11 am

“#42 Spiltbongwater on 09.09.13 at 9:10 pm
When the guy in Mazetlan gets malaria or HIV or both, I hope Canada will show him the same concern when he comes crying back to use our healthcare.”

News flash loser….Canadian Health care pays in Mexico. Just need to fill out a form and walla…paid by you Canadian taxpayers! Thanks for that. Didn’t know that did you? Lovin it in Mexico!

#141 old gringo on 09.10.13 at 10:32 am

Being a non resident for 20+ years ,I agree too many folks have only vacationed for a week or two, or not at all to comment on living/crime etc. in Mexico.Life IS much better here, doctors, dentists,food, weather etc.If the Canadians and Americans could quit using drugs all the drug problems here would go away.Well got to go to the organic veggie market and then pick up some fresh Mahi Mahi for the BBQ.
Adios amigos

#142 Bob on 09.10.13 at 10:33 am

#141 Mr Happy

“News flash loser….Canadian Health care pays in Mexico. Just need to fill out a form and walla…paid by you Canadian taxpayers! Thanks for that. Didn’t know that did you? Lovin it in Mexico!”

——————————————

Can you provide me with a link to this info. My understanding was that you can retain your Canadian Health Care if you are present in Canada for more than 6 months a year. But, the treatment is only available in Canada.

Therefore treatment outside of Canada & permanent residents (Canadian citizens) of other countries are out of luck. Am I wrong?

#143 Julie on 09.10.13 at 10:40 am

Average family income in Vancouver is meaningless. Most couples with have decent jobs would each make at least $75K. Add to this the wealthy Chinese dumping there money here and you have many people that have a lot more than $75K. You should come to the west side of Vancouver and see for yourself.

I was there last week. The average household income in Vancouver is $83,330. — Garth
—————————————————

Garth….NO its not 83k because so any people cheat, lie about their income and/or have “extra” income they don’t tell you about. It’s a worthless stat.

Give us a better one. — Garth

#144 young & foolish on 09.10.13 at 10:40 am

Yup, the smart folks are all rushing to Mexico, Panama, or Thailand, where the living is good and cheap, the weather pleasant, and the people friendly. More value in the south. The losers are all huddled in New York, London, Paris, Frankfurt, Toronto, etc. where RE prices are astronomical, and people are surly.

Love your name. — Garth

#145 The real Kip on 09.10.13 at 10:59 am

Detroit is even cheaper than Mexico. You can buy there for the back taxes. Hahahaha!

#146 cowtown cowboy on 09.10.13 at 11:11 am

#87 Realist on 09.09.13 at 11:01 pm

It is Springbank, not Spring Banks….and yes there are lots of 2 acre places out there, about a mil minimum to get in, ranges up to 5-7mil for the new fancy shacks, lot of O&G money out there, I live on the edge of it and wouldn’t mind getting one for myself, but then I wonder who my kids would play with…

BTW, I pay myself 120k/year and the wife kicks in another 80k for her 4 day/week role (which helps reduce what I have to pay the nanny every month), but on our 200k/year income, believe it or not it, doesn’t feel like we are that well off. Sure we can afford to eat out when we want, and I finally demanded that we start saving at least 2k/month but after that there doesn’t seem to be a ton left over, what with childcare, mortgage, util, and several k/month in cc’s to pay off. I can try and keep some $ in my corp to top up savings every year, but it is often feast/famine in my line of work, so no guarantees there, but I figure if we can save 50k/year, we should have about 3.5mil by 61, based on about 8%/year return(historical market returns are over 9..). Now I need to figure out how to get a downpayment for a condo in Maui…those things are cash cows…

#147 pbrasseur on 09.10.13 at 11:19 am

I do believe discussions about non residency will become a recurring subject in years to come.

Leaving for retirement (or work…) is apparently advantageous already but guess what, you haven’t seen anything yet.

As ageing continues and enters its most critical phase, pressures on our (already rationed) health care system and publics finances are going to become immense. Not to mention the upcoming RE correction.

Of course politicians will be tempted to solve this by increasing taxes and tariffs but this will only make things worse, it will drive wealthy and productive people away even more.

I for one can tell you this: I certainly don’t intend to stay in this country to see my nest egg being pillage by a bankrupt state.

But of course if you stay mostly in $CAN and keep rebalancing your portfolio into a crumbling bond market you’d better get used to waiting lists, potholes and dirty and overcrowded hospitals…

#148 WhiteKat on 09.10.13 at 11:23 am

@Marginal,

Reporting back as you requested, from the Flaherty announcement at Ottawa Camping Trailers; glad I went:

http://www.theglobeandmail.com/globe-investor/personal-finance/taxes/flaherty-says-tax-deal-near-on-americans-living-in-canada/article14197496/

#149 Mike T on 09.10.13 at 11:28 am

#52 Mike Leblond

Make sure they use Canadian wood, not the junk they sell in Southern U.S. or South America.

Really? Really?

yeah really

i sold wood for 7 years.

you should see the difference between oak that comes from the great lakes region vs oak that comes from Georgia….you would not want the southern oak in your house

same goes for maple, cherry, alder

I would not throw south america in the mix though, you can get great jatoba and ipe from S America….but stay away from the plantation FSC crap wood.

#150 The real Kip on 09.10.13 at 11:30 am

To all who hate that Canada beats Mexico hands down in both summer and winter. I hope it snows 4-feet in November, I live on beautiful Lake Simcoe, ice fishing capitol of North America. Below is a link to The real Kip on his real sled last winter.

http://s265.photobucket.com/albums/ii202/kipgardiner/Snowmobiles/Feb%202013%20Sledding%20With%20Helen/?action=view&current=SleddingInFeb28_zpsd3603670.jpg

#151 Suede on 09.10.13 at 11:32 am

Gold down
Oil down
Bernanke to change the levers next week?

Maybe Obomba is smarter than we give him credit for. Doesn’t want to look weak so he puts the missile strikes on congress to vote down and throws his hands up saying “What can i do?” I have a nobel peace prize lol.

Then everyone loves him again. He likes being loved by Oprah and Jay Leno. Air strikes and wars won’t get him that.

He doesn’t want to start another war. He’s a guy that’s pulled out twice.

Double Entendres. Oh the immature fun that I have been missing.

How do you invest in Russian Pipelines?

#152 Why so many expats are reading this blog? on 09.10.13 at 11:34 am

This sounds a little bit strange to me. I am seeing so many expats reading this blog. By their comments everything is fine where they are. Did I make a mistake when I left my country for Canada?
And those crazy mexicans living that beautiful country to work and live in US?
Something is fishy here something does not fit in the picture, like saying I am going to the organic food market to get some vegetables for my barbeque!


There was a guy waiting in line at the Pearly Gates for his chance to enter heaven. The line was long and there was an offer to go for a tour of hell. Down in hell it was like one big party – beautiful people laughing, drinking, gambling. After returning from his tour he passed through the Pearly Gates but the quiet chanting and constant playing of the harps in heaven seemed incredibly dull compared to life in hell. The white clouds, wings and robes were beginning to get on his nerves. After a while he could stand it no longer and asked God for permission to transfer into hell permanently. Upon arrival into hell, he was immediately chained and thrown into a vat of boiling oil. He couldn’t understand what was happening. This was nothing like the hell he visited earlier. He called out to the Devil for an explanation. “Don’t confuse tourism with immigration!” replied the Devil.

#153 CantRememberMyName on 09.10.13 at 11:35 am

What is this?!?!?! At a loss? In Manhattan?!?!?! You gotta be kidding me… Poor poor Senator Wallin…

http://www.cbc.ca/news/politics/story/2013/09/09/pol-greg-weston-pamela-wallin-senate-coop-sale.html

#154 Westernman on 09.10.13 at 11:37 am

Herb @ # 124
Attaboy Herbie – everything is somebody elses fault and no one can be expected to look out for their own interest, safety or health…
You make a fine Socialist Canadian Comrade Herbie…

#155 OnPar on 09.10.13 at 11:44 am

Well Jim certainly has figured it all out! What’s the point in using retirement to continue contributing to your community, spending time with your family, or indulging in a passion. Why not flee to a foreign country, sit around in the sun like a sloth and eat fish, tacos, and fruit while sipping on some fine tequlia?! When Jim croaks in a Mexican hospital, I bet his bank account will huge! Keep hoarding those pesos, greedy Boomer.

#156 Castaway on 09.10.13 at 11:56 am

Would be nice if all those posting comments on the pros/cons of being an expat would provide some basis for what makes them an expert on the matter. If you have never lived outside of Canada save your opinion for yourself! Its worthless. Went offshore 19 years ago and have never looked back. Not for everyone but give it a try, think you will like it. Oh and btw, as for the myth about healthcare, please. My offshore doctor, dentist, ortho surgeon and cardiologist, all Canadian. Enjoy your wait list times.

#157 Colors on 09.10.13 at 12:07 pm

It seems to me that people are having trouble differentiating between foreigners and non-white Canadian citizens. I’m pretty sure second or third generation “brown-ish” people are allowed to buy in West Van too.

#158 Alex N Calgary on 09.10.13 at 12:16 pm

I appreciate showing how cheap you can live in Mexico compared to prices here in Canada, but its not quite the same. Who doesn’t hate winter, no question there in Canada, but Drug War murder central Mexico? not to mention the mass of population, I appreciate its a cheap flight back, but hmmmmm, maybe not for everyone. But wow cheap retirement place, no question.

#159 cynically on 09.10.13 at 12:38 pm

#113 BillyBob – extremely well put. I agree with your sentiments wholeheartedly. Too many Canadians are afraid of life outside their government comfort zones. Live outside the country for awhile, if possible, and get a better perspective of the world ouside of Canada. I know it’s not possible for the vast majority but in that case let those who have lived or are living abroad do the commenting, good or bad.

#160 Donald Trump on 09.10.13 at 12:46 pm

If owning is cheap…renting must be cheaper.

Why tie up the cash in a foreign country ?

#161 calgary rip off on 09.10.13 at 12:48 pm

Mexico huh? Yes that may work for some, but it is also dangerous. If you are not a citizen there, you cannot get guns, etc. If anyone is seriously looking to move there 1)Learn spanish until you are well versed, 2)look into the financial laws regarding property owned, 3)look into the medical system, tax laws. This may be an option if you are close to retirement and as an added bonus you can put 12 foot high barbed wire fences around your property unlike in Calgary where no mortgage owner can put up a fence greater than 4 feet high(dumb bylaw just like most of the stupid bylaws here).

#2 Tony: Ive been looking for the “crash” in Calgary for 6 years. Will it happen? Maybe. When interest rates go up things may go down. If interest rates skyrocket I wont have a job anymore, so home ownership wont matter either because I will end up leaving, so is this good anyway?

The solution is to rent right? Unless you are a boomer or soon to retire say in 10 years, why would you do this? Sure much of the money on the place would go to interest, however you have no landlord who due to lovely lack of rental increase laws can do whatever they want with their tenants and the vacancy rate is low in Calgary. So renting isnt always the answer. Nor is mortgage ownership. In Calgary there isnt any answer because it is all overpriced.

#132 : Go LDS, CTR!

#98 Joe Calgary: What fool would sit in university paying for a class in drama? University is way overrated. I cant wait until some of these young punks get to work in my area no sense of what is real. Best to not waste your time paying for deluded university professors who call themselves doctors and get a job.

#162 condopoor on 09.10.13 at 12:58 pm

Regarding all the racist comments about Vancouver’s population – didn’t anyone take history class?

Many of these Asian families have been here longer than yours probably has. It’s part of Canadian history, especially on the west coast. Any educated citizen should know this.

#163 Ralph Cramdown on 09.10.13 at 12:58 pm

RETURN OF THE BLENDER

“Condos in Toronto are becoming increasingly difficult to place even for borrowers with very good credit […] It depends on the client situation and the income they make; sometimes you need a combination of mortgages from different lenders […] The B-lenders will usually take on 65 per cent and you fill the gap with a private lender and that will get you to your traditional 75-80 per cent.”

Welcome to the subprime stacker with a blended rate of 6%, and 3% in upfront fees. Now how many people are looking forward to taking possession of their investment condos? I can picture investors pleading with the builder for a LONGER interim occupancy period before he registers the condo corporation.

http://www.mortgagebrokernews.ca/news/condos-in-toronto-are-brokers-at-a-disadvantage-175018.aspx

#164 molson cdn on 09.10.13 at 1:13 pm

can i grow a little bit of pot in the backyard?

#165 Bob on 09.10.13 at 1:27 pm

Another housing bubble forming in the States:

http://www.cnbc.com/id/101019905

#166 X on 09.10.13 at 1:27 pm

If F and OSFI were to simply crack down on the propaganda that the RE industry produces, it would have an effect on the market, without making any more mortage, rate, lending changes…..

#167 FlatFee495.com on 09.10.13 at 1:28 pm

Great info, and veryu interesting stats,
seems that RE market is cooling down a bit…

#168 Cici on 09.10.13 at 1:30 pm

#111 Habsfan

Excellent point, good job.

#169 averagesare statisticaltoiletpeper on 09.10.13 at 1:31 pm

What nonsense it is to use ‘averages’ to describe income. It only takes one million dollar income to treble skew the ‘average’ income of 1000 welfare recipients…ex: 1000 welfare recipients earning $525 p/m…..add one million dollar earner into the mix……et voila…..each welfare case ‘makes an average’ of $1523.4765 per month……magic….and idiocy all rolled into one.

Lets look at the average wages of civil servants…..like those in city hall making $365K +++ or…..the police chief @ 314K p/a….( more than the chief of NYC) etc etc…….how bout the $200,000 sky train cops……compared to the ‘average Starbucks barisita…..we shouldn’t be quoting misleading averages to make our point……..the product makes us look stupid.

#170 averagesare statisticaltoiletpeper on 09.10.13 at 1:37 pm

oops….fat finger rage….the welfare guys make $1386p/m……1525000/11=1386.36…….still quite an nice ‘average ‘ raise for the welfare bums.

Most people do not choose to be on welfare. Calling them ‘bums’ says reams about you. — Garth

#171 Nemesis on 09.10.13 at 1:39 pm

In no particular order… TuesdayZen for SaltyDogs…

#PartayLikeSmokingMan

“The belligerent porker went on a drunken bender after stealing and drinking three six-packs of beer that had been left out by campers at the DeGrey River campsite in Port Hedland, Australia.”

[UK Independent] – Boozy feral pig steals beer, gets drunk and starts fight with a cow

http://www.independent.co.uk/news/world/australasia/boozy-feral-pig-steals-beer-gets-drunk-and-starts-fight-with-a-cow-8805312.html

#Espíritu Comunitario, Estilo Michoacan

[WaPo] – In Mexico, self defense groups battle a cartel

…”TEPALCATEPEC, Mexico — An audacious band of citizen militias battling a brutal drug cartel in the hills of central Mexico is becoming increasingly well-armed and coordinated in an attempt to end years of violence, extortion and humiliation.

What began as a few scattered self-defense groups has spread in recent months to dozens of towns across Michoacan, a volatile state gripped by the cultlike Knights Templar, a drug gang known for taxing locals on everything from cows to tortillas and executing those who do not comply.”…

http://wapo.st/17majBR

BackGrounder: http://projects.latimes.com/mexico-drug-war/#/interactive-map

#172 Boomer on 09.10.13 at 1:52 pm

A lot of people in detached homes in Vancouver rent out the basement for an extra 18,000 to 25,000 thousand a year. I’m thinking they do not claim this as income on there taxes either.

#173 Smoking Man on 09.10.13 at 2:10 pm

Just in, new law, 3 years in jail for starting rumours on the Web.

Are these people insane….

Better shut down the basterd rumor generator algo till I get more info on this.

#174 -=jwk=- on 09.10.13 at 2:16 pm

@ #48 retireearlylifestyle blog.

Sure, don’t have kids and you can do whatever you want, go wherever you want. I love my boys too much for that, I’ll wait til I’m 60 thanks.

#175 bill on 09.10.13 at 2:20 pm

#163 condopoor on 09.10.13 at 12:58 pm
exactly right old son.
chinese labour built the cpr in bc and many of them stayed and continued to work hard and save.despite the racism.

#176 walltiger on 09.10.13 at 2:21 pm

#83
so a few chants and your sister is worried about her daughter’s safety? and white boys always target Chinese girls, target Chinese girl for what, for rape? Listen to the load of crap coming from your mouth.

#177 Form Man on 09.10.13 at 2:34 pm

#155 westernman

that is rich………..coming from an infantile crybaby like yourself who has never taken responsibility for anything.

I still have a construction site labouring job for you westernman ( just indicate if you want to work in Kelowna or Saskatoon). Time for you to get off the couch and become a valued citizen and contributing taxpayer………..

#178 CantRememberMyName on 09.10.13 at 2:36 pm

DELETED

#179 Canadian Watchdog on 09.10.13 at 2:38 pm

A must watch documentary on China's housing bubble: Living in a Bubble

Not surprisingly, money laundering and lending schemes appear to be a very popular source for mainlanders who've seen their price-to-income ratios skyrocket to unaffordable levels. The reason? As one young worker stated: it's mother-in-laws.

Watch the entire video and pay very close attention to the ending where Chinese developers get a sense of what would happen should prices continue to decline.

As I've noted in earlier posts: Canada has adopted an unregulated presale system, founded by this man, Henry Fok, in the early 1990s. His vision, originally, was to make homes more affordable for rural workers and at the same time, allow developers to offshore risk by selling future developments at a set price. At least that was his intention.

Over the years as more developers began using presales to finance developments, an added feature and opportunity became more prevalent between developers and end users: speculators. The belief was that agents and brokers could optimize price discovery much better then developers, but as we see today, greed and speculation has taken over.

Canada doesn't have a credit bubble. It's worse. We have a speculation bubble hidden under a very opaque shadow market, like China, where new homes are sold with nothing more then a piece of paper that says, "I'll buy it when it's ready." This is why I'm relying less on statistics and now looking forward to what matters next, and that is property rights and the rule of law.

My view is our government is not ready to deal with a real estate bust, especially for newcomers who've been sold a fallacious Canadian dream through greedy immigration lawyers and international labour agencies. How will they react when prices go south and lose all their savings? What do they know about Canadian law and how it protects them, or doesn't?

These are the questions I'm asking now, because it's not a matter of if, but rather when the bubble pops, somebody will have to be blamed and pay for it.

#180 Mister Obvious on 09.10.13 at 2:57 pm

#173 Boomer

I suppose some do manage to rent out a Vancouver basement suite for $1500 to $2100 monthly (i.e. 18,000 to 25,000 per annum) but most I have seen rent in a lower range and really aren’t much to behold.

For that rent you can easily find more comfort above ground in a purpose-built accommodation provided you spend a bit of time hunting around.

I realize that wasn’t the point of your post, but I’m just saying…

#181 Form Man on 09.10.13 at 3:05 pm

#180 Canadian Watchdog

excellent post

#182 Westernman on 09.10.13 at 3:25 pm

Form man @ # 178
You don’t have any such thing – you are an old Beatnic with his wispy grey hair pulled back in a ponytail who spends his time collecting social assistance checks and hanging out at Tim’s nursing a double double and delusions of grandeur …

#183 Devore on 09.10.13 at 4:17 pm

#181 Mister Obvious

I doubt very many basement suites rent for more than $1000, certainly not in suburbs. I don’t doubt many are advertising for more than $1500, but generally they are not getting rented. Again, there are exceptions for everything, but that’s why “exception proves the rule”.

I know some claim that declaring/not declaring rental income makes no difference, but that is only from a very strict accounting/investment point, which looks at the current market value of an asset (mark-to-market). The case is if you do not declare rental income, you cannot claim the offsetting deductions either, and vice versa, so in the end it is largely a wash.

But that is not true in the long run, beyond the first couple of years.

First, deductible expenses decrease over time vs rent charged. As rent increases as a function of increasing incomes, while eligible expenses (primarily mortgage interest) stay relatively flat. Thus the income tax payable would go up over time, and expense deductions would not keep pace.

Second, capital gains. A property held as 100% primary residence is exempt from capital gains taxes, and even if prices only rise in line with broad inflation, that can be a significant amount, a portion of which would be taxale if rental income was declared.

Thirdly, property taxes may be calculated differently for properties with rental suite(s).

Everyone should pay their fair share of taxes, and no more. Not paying taxes “because it cancels out”, especially when it clearly doesn’t, is tax evasion.

Finally, municipalities need to know how people are distributed in their cities, so they can plan for sufficient power, sewage, water, transit, transportation, parking, greenspace, recreational and commercial space and capacity, to name just a few. Too many people complain about the lack of this and that in their city, while housing a whole other family in their basement. Legally licensed and declared suites must also meet building code and safety laws. At least on paper, slum lords will always be slumming.

#184 Liquid on 09.10.13 at 4:20 pm

@ #84 Smoking Man
That’s a great idea to get people using your software :) Give them a free sample and get them hooked. Good luck to your family business. I was just reading a study that said Australia and Norway are leading the pack in terms of labour productivity. What I realized is that both of them are export nations of resources like us, so I think the good news is Canada has the potential to do better :) The conferenceboard study.

#185 Rabbit One on 09.10.13 at 4:20 pm

>113 Billy Bob

Completely support what you said in the post.
I appreciate what Canada offers, but there are many
countries that has much better health care system, generous to lower income people, government budget used for smarter purposes.
Myself, lived in Europe for 5 years, 2 years in Hong Kong and Malaysia, 6 month temporary stay in Iran and the Philippines. They all have specific excellence.

> 180 Canadian Watchdog
Nice post.

#186 Form Man on 09.10.13 at 4:37 pm

#183 westernman

You are dead wrong as usual. Also note your lame deflect. The fact you run and hide from uncomfortable facts speaks volumes.
You are a sad and angry little man……..

#187 jess on 09.10.13 at 4:54 pm

300:1 us dollar and rising

Syria’s Currency Crisis
http://www.aawsat.net/2013/07/article55309597

Home > Syrian Crisis Hits Currency
Syrian Crisis Hits CurrencyMoney talks. But for now, the Syrian pound is increasingly silent. Last week, Syria ordered merchants and shopkeepers to price goods in their home currency – or face jail. But at this money shop in neighbouring Jordan, cash from its crisis-hit neighbour is worth less and less

Read more: http://www.nasdaq.com/video/syrian-crisis-hits-currency-517928363#ixzz2eWcpaD8G

privatized tax collection

http://www.washingtonpost.com/sf/investigative/201
3/09/08/left-with-nothing/?hpid=z2

http://www.fbi.gov/baltimore/press-releases/2010/ba050410.htm

Harvey M. Nusbaum pleaded guilty to a one-count charge of conspiring to submit non-competitive and collusive bids at tax lien auctions in Maryland on Feb. 23, 2010. Nusbaum along with his business partner, Jack W. Stollof, was originally charged in an indictment filed on June 16, 2009. Stollof pleaded guilty on Jan. 6, 2010 to the same charge. The department charged that the conspiracy began in or around the spring of 2002 and continued until at least Aug. 9, 2007, and involved tax lien auctions conducted by Baltimore City and the counties of Anne Arundel, Baltimore, Howard, Montgomery and Prince George’s. Stollof’s sentencing, which was scheduled to take place today, will be rescheduled….

#188 Donald Trump on 09.10.13 at 4:54 pm

The “COMMENTS” were tapering….but due to Qualitative Easing, the Doubt Ceiling is lifted.

#189 Westernman on 09.10.13 at 5:10 pm

Form Man @ # 187
As soon as I hear a fact from you I may or may address it – my choice …
But so far, nothing but wish full thinking and made up self-importance…
Maybe you should lay off the mushrooms for a while…

#190 Grantmi on 09.10.13 at 5:16 pm

#173 Boomer on 09.10.13 at 1:52 pm

A lot of people in detached homes in Vancouver rent out the basement for an extra 18,000 to 25,000 thousand a year. I’m thinking they do not claim this as income on there taxes either.

That’s why I love basement suites. The landlord is usually more accommodating, and keeps rents low.

Last thing they need is to piss you off as a tenant, and they get a call from the taxman saying we understand you’ve been renting your basement suite out for the last 3 years, and you haven’t declared it.

I did this to an asshole landlord years ago who tortured us for 3 years.. before we found a better place. I knew he wasn’t declaring the rent, because his assessment tax notices were coming to the house and he demanded any mail that came to the house to call him asap.

#191 2CentsCdn on 09.10.13 at 5:29 pm

#180 Canadian Watchdog
developers pre-sale system ……. ” when the bubble pops, somebody will have to be blamed and pay for it.”

Developers may be blamed … but they won’t won’t be punished (well maybe by their financiers if they have to take all their customers to court who don’t close on their deals). But no Gov’t punishment. At the time of the pre-sale the developers didn’t break any laws. Just because it all blows up doesn’t mean you can make a new law …. back date it … and fine them.

Virgin buyers who have no equity (and no or low salary) might be sue proof …. but the developer would have every legal right to come after any buyer who doesn’t close on their deal. Nowhere on the future purchase agreement does it say “you only have to close on the deal if it’s worth way more than what you’re purchasing it for”. If before completion a condo or house goes to half it’s purchase price, if you lose your job, if you divorce … none of that matters … you gotta buy it somehow … or you are liable for any losses the developer incurs getting rid of the (your) unit.

No need for blame …. won’t change anything, future contracts is gambling, not a sure thing. I’m sure after this mess … there will be new laws on pre-sales.

#192 2CentsCdn on 09.10.13 at 5:57 pm

#190 Westernman
on Form Man @ # 187
“no you’re a poo poo head!”
Children! Children! …. recess is over …. get back in class.
Sheeesh! … you guys wreck a good blog.

#193 VanPerfecto on 09.10.13 at 5:59 pm

Flawed logic. Homes are being bulldozed at an unprecedented rate. The cost of buying the house, tearing it down and rebuilding is huge. The stats on average family income are completely bogus. How can one even qualify for a home on the west side makeunder 70 grand
“The bank bases its calculation on an average local family with average income buying an average house”

#194 Spaccone on 09.10.13 at 6:17 pm

Even with the recent huge dump in affordability US housing is still more affordable than anytime before 2010 and since at least the 80s. Though not sure if the dump is a precursor to temporary rough conditions ahead.

http://research.stlouisfed.org/fred2/series/COMPHAI

#195 HAWK on 09.10.13 at 6:24 pm

#114 Randman on 09.10.13 at 1:41 am
==============================

Thailand is an amazing place, for travel or when one retires, (I have been there a few times), but whether one can get a good job there as a foreigner is what you should look into.

#196 Donald Trump on 09.10.13 at 6:31 pm

#180 Canadian Watchdog on 09.10.13 at 2:38 pm

Re: Video “Living in a bubble ”

Can’t access it…anyone else having trouble?

#197 CrowdedElevatorfartz on 09.10.13 at 7:35 pm

@#197 D.T.
I watched it earlier today. Its quite good.
Perhaps its being “swamped” with views?

#198 Daisy Mae on 09.10.13 at 8:07 pm

#105 Cici: “….brown lawns…”

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

When my son and family moved to the Victoria area, he was amazed at the brown lawns up and down the street, including his. So he watered…and watered…until it was lush green. Then he received his water bill.

#199 Pounding sand in Peachland on 09.11.13 at 10:40 am

define “eventually”

#200 ozy -OK,,,, Leave on 09.11.13 at 1:36 pm

OKKKK, leave us, go to mehico, too many kanatians here anway – and not the ones that are know how to fight for change

alividerci

#201 Beth on 09.11.13 at 2:15 pm

With an Alberta government job, my take home pay is just over 60% of gross after all the deductions (including gov’t pension, disability premiums etc.). The maximum amount I was approved for a conventional mortgage with BMO last year would have eaten up nearly 60% of my take-home pay, not to mention the fact that they grossly underestimate property tax, utility and home insurance costs when calculating your housing costs as a percentage of income. It’s not just the B-lenders deliberately making people house poor

#202 Future Expatriate on 09.11.13 at 7:01 pm

Hey Jimbo…. be sure to let us know how dull machetes feel when the inevitable revolution occurs and the 99% come for you rich 1% foreigners and your families…. again. But hey, you saved thousands, yes.

#203 Rob aka Mr BTSX on 09.12.13 at 4:48 am

Glad I came back for an update, I live in Germany and even accounting for an aging population etc etc German healthcare is what Canada USED TO BE 20 years ago. Moved here two months ago and am already scheduled for knee replacement surgery which I put off to the fall. Canada does have good healthcare but it’s not as good as it’s cracked up to be.

Sadly for my wife and I we’ll probably retire in Munich, a bloody expensive city but as long as we can spend our winters somewhere warm I’m happy, even if we have a bit less money.

Also I wouldn’t bother with Canadian programing (all American anyways) a simple proxy and you have British programing and all the US programing you want via Hulu and PBS

Also