The flipper king

DOG ROOF

There’s something you should know. I have clients, and I help them plan for retirement through investing in financial assets. I will sit down with you and put together a plan to help turn your first investment into a portfolio worth millions. The return on investment you will receive will be 103%. Contact me!

Okay, seriously. If I wrote those words on this blog, or put them in an ad prospecting for clients, I wouldn’t be a financial advisor for long. The securities cops would (correctly) haul my butt on the carpet, launch an investigation, take disciplinary action, suspend me probably and fine me for sure. Anyone Googling my background would find an indelible record of unethical behaviour and unprofessional conduct. I’d not be an advisor for long.

Why?

Because with investing there are no guarantees. There’s no certainty a ‘first investment’ will end up being ‘worth millions.’ Nobody can assure a return of 103%. Unless you’re a realtor like Ryan Coyle. And guess what you find when you Google him?

Yep, a condo-slinger.

COYLE Mr. Coyle epitomizes why you should keep your daughters (and sons) out of high-rise buildings. Better still, ban them from presentation centres for unbuilt towers promising sexy boxes in the sky with a creamy view of the tower next door. His is a siren song of sure-thing profits built on leverage, illusory gains, false information and unbridled speculation. For Ryan Coyle is the flipper king.

Of course, he’s in the mold of Brad Lamb. Or Bob Rennie. The thinly-regulated Canadian real estate landscape is fertile ground for this breed of super-salesguy who stirs the loins of amateur investors likely unaware of the risk they assume. Without Ryan and his ilk, there would not be 150 condo towers under construction in Toronto today, nor 53,000 units coursing down the bloated pipeline to eventually disgorge into excavations and parking lots.

Up to 70% of all new GTA condos, according to Urbanation, have been bought by speckers and flippers planning on reselling them prior to closing, finding tenants, or using extreme leverage to double or triple their positions. And the pitch continues – despite the wobbly world of housing that’s developed.

“Invest in Downtown Toronto and Make Millions,” says Mr. Coyle’s Kijiji ad, “Let me Show you How.”

“I help my clients plan for retirement through investing in real estate.  I will sit down with you and put together a plan to help you turn your first condo investment into a real estate portfolio worth millions.”

Buy a 447-square-foot little box for $275,900 in a building that won’t be finished for five years, says Ryan, and by 2018 when you close, it’ll be worth $335, 784. Like, guaranteed. (“Projected price is based on the assumption that condo prices will continue their historical rose of 4% per year,” he says.) Rent it for $1,700 a month (for 447 square feet?) and be cash-flow positive by $190. Add in the mortgage principal repayment over a year and it’s – presto – a return on the downpayment ($58,000) of 11.8%. Or you can just flip the place when it’s built and make $103%.

But don’t climax yet. It gets better.

“Once your unit is ready and you take out a mortgage, then it’s expected that your unit will have increased 4-10% per year for the past 4 to 6 years and you will now have significant equity built into the property. Now you will re-finance your property to pull out your equity (down payment + appreciation) FREE OF PAYING TAXES, giving you the ability to buy at least 1 or 2 more units.  This is the best way to build serious wealth through real estate. “

This is wrong, as you know. Even if this profit of $60,000 did materialize (I hear Jesus may also be on the way), the CRA would classify it as income, and tax the poop out of it – as it does your paycheque. It wouldn’t even qualify as tax-advantaged capital gains, and certainly not be tax-free.

As for the strategy, luring unsophisticated investors into highly-leveraged speculative investments in unbuilt structures based on assurances of future gains and guaranteed returns would be appalling if it weren’t taking place daily. Now it’s just legally sad. Ryan Coyle has no idea what rents will be in five years (a glut is coming), where mortgage rates will sit in 2018 (they won’t be lower), or what the market value of a shoebox-sized hipster mini pad will be.

But that doesn’t stop the marketing whiz from promising that condos will appreciate every single year, or that rents won’t explode. “If closing and renting out for cash flow, once your unit is completed, rents should have increased 12-15% and your unit will have excellent positive cash flow.”

You know what? He may be right. For the sake of the property virgins and sticky little landlords his web ensnares in high debt and higher expectations, I hope. But it’s unlikely.

So maybe there’s a role for government, when common sense and ethics leave town, but Mr. Ryan stays.

189 comments ↓

#1 HoweStreet on 09.22.13 at 5:14 pm

Garth was a guest on This Week in Money – Sept. 21st

http://talkdigitalnetwork.com/2013/09/this-week-in-money-102/

#2 ILoveCharts on 09.22.13 at 5:22 pm

Good post.

My view: Survival of the fittest. We don’t need the government to babysit everything. People will be burned playing high-stakes games and that’s ok.

#3 Nemesis on 09.22.13 at 5:27 pm

There’s no denying the fortunes amassed by some ‘FlipperKings’…

Still, I couldn’t help but think that Bob Rennie’s solo breakfast appearance at Oru this morning – with nought for company but an iPhone and a stack of condo marketing materials – an altogether dreary affair…

#4 Blobby on 09.22.13 at 5:28 pm

But if those profits dont materialize – wouldnt you be able to sue him for false advertising?

And if he truly believed he could make 103% profit – why doesnt he buy them all himself?

#5 Keith in Calgary on 09.22.13 at 5:29 pm

Given that the federal and provincial governments can barely agree on who should police securities markets (the “who should be the market regulator” fiasco currently underway is my latest example of this point) one can hardly expect the politicians, who are developing bad lower spines from sitting on wallets packed with RE developer cash bribes, to do a damn thing about the criminals, liars cheats and thieves that dominate the real estate industry.

#6 Peter on 09.22.13 at 5:35 pm

Would we be able to get some posts with more data? I’m talking specifically of graphs or raw demonstrating your positions assertions etc. I love the blog, just have an easier time understanding if I can see the relationships in front of me.

No. — Garth

#7 Old Man on 09.22.13 at 5:37 pm

There is one thing about marriage, real estate, a new girlfriend, or investments. There are no guarantees in life, so we all must move forward in life, and do the best that we can, as life is too short to worry about it all and the Smoking Man says it best with the Grass Roots with a song called, ” Live for Today. ” I hope he brings it up once more, as know where he will be on October 26th.

#8 mark on 09.22.13 at 5:39 pm

Surely one look is enough to know whatever that guy is selling is fast and loose.

#9 guelphstudent on 09.22.13 at 5:41 pm

Quote From Ryan’s website:

“Ryan is also an advocate for the environment and is a Carbon-Neutral Agent. His goal is to reduce his carbon footprint on every transaction he makes. He can help you make your home more energy efficient which will help save the environment, and save you money.”

#10 ILoveCharts on 09.22.13 at 5:49 pm

I stumbled across this older news story about row housing in Vancouver.
http://www.theglobeandmail.com/news/british-columbia/vancouvers-budding-romance-with-row-houses/article4244001/

For those of you in TO: We basically have none out here.
“Between 2008 and 2011, only 40 freehold row houses were built in all of Metro Vancouver, including Vancouver’s lonely cluster of three. In the same period, Toronto, already a city rich with historic row houses, added another 11,277 to its stock.”

This hasn’t been talked about much but I do wonder how much it has contributed to our ridiculous detached single family housing prices.

There are a lot of people that want to avoid a strata at all costs. In Vancouver, you have to make the huge jump from your condo or townhouse (strata in both cases,) to your detached single family home.

If fee simple rowhouses start to catch on in Vancouver, it would certainly reduce some of the pressure on detached houses.

Unfortunately, I haven’t seen much evidence of this happening.

On the subject of BC and stratas. December is the deadline for the depreciation reports. I think that a number of stratas will opt-out (I know of one that has decided to opt-out,) and many will probably be done by people who are poorly qualified. No matter what happens, it is a good thing for buyers and it may result in some prices changes (both up and down,) as people gain more insight. Everyone will have to be careful when assessing prices changes to condos/townhouses after the assessment reports are due. Some prices changes may be due to changes in the market and others will be due to good/bad strata assessment reports.
http://www.singleton.com/en/Publications/Strata_Corporations_Must_Now_Obtain_Depreciation_Reports.aspx

#11 Paul on 09.22.13 at 5:55 pm

Garth,

Why would a refinance (taking out of equity) be taxed by CRA as income? I didn’t think a refinance (ie getting a mortgage) was a taxable event.

Obviously, any net rental income will be taxed and net gains at the time of selling the property will also be taxed.

Please clarify your comments. Thanks!

Covered in a previous post. Flipping gains are considered an ‘adventure in trade’ and taxed as earned income. To be taxed as capital gains the unit would need to be income-generating (rental proceeds). — Garth

#12 Old Man on 09.22.13 at 5:57 pm

Now I want to give a tip in English literature that is directed to Daisy Mae, as a book called The Virginian is how I have personally guided my life for many years and this relates to all. It matters not how one says anything in life, but how they say it, as that is what is important, so do not judge.

#13 Smoking Man on 09.22.13 at 5:58 pm

Ryan Cole, that my friends is a smoking man, pillaging on the schooled. I love it.

See a dumb ass rivet bucket would never go for his shtick.

The educated class, the know it alls, the ones impressing us with words that need googling the ones desperately trying to add a few zeros to go with the obedience certificate.

That’s my market bitches. Candy from infants.

Now if your slightly above the status of a rivet bucket, belive your certificate makes you a bit special, stay out of the jungle, where hungry smoking patiently wait for the next meal.

#14 Ann on 09.22.13 at 5:58 pm

2 ILoveCharts on 09.22.13 at 5:22 pm
Good post.

My view: Survival of the fittest. We don’t need the government to babysit everything. People will be burned playing high-stakes games and that’s ok.
.******************************************
It’s not the Government that babysits but it’s the Government that backs the financing. There was a time you needed 25% down to buy or 10% with C.M.H.C insurance and you could only get it if you were a first time buyer.
Now 5% and you can get 5% cash back and do it as many times as you like or as many times you can fudge you income numbers. If the powers that be want to slow the market simple go back to the old rules the whole thing stops overnight with 15% unemployment in the morning.

#15 Big Bear on 09.22.13 at 5:59 pm

Guys like this will say anything to make the sale, but one day, they’ll say the wrong thing to the wrong client and the law of the jungle will prevail. Give a man enough rope…

#16 Alberta Guy on 09.22.13 at 6:08 pm

Old Man – Always appreciate your comments and, although not always related to the topic at hand, provide this blog and its readers an entertaining view on life. It is like a brief station identification – a kind of “hinterland whos who” pause that refreshes. Now back to our previously scheduled program already in progress…

#17 Ralph Cramdown on 09.22.13 at 6:17 pm

I think there’s a certain fin-de-siècle vibe when a developer’s best shot at a project name is “yonge + rich”

Here’s what the other end of the sausage grinder sometimes ends up looking like:
http://www.ctvnews.ca/w5/investors-take-devastating-loss-in-what-they-thought-were-fields-of-dreams-1.1463419

#18 Bob on 09.22.13 at 6:20 pm

Hey Garth, I listened to the this week in money show that you were the guest on. Good job!

But I was a little taken back by your call on oil. It was positive on the long term and you even suggested that it may retest the all time highs.

You also stated some relatively bullish bets for China.

Maybe I’m wrong, but I always thought that you were a little bearish on the demand for oil and thus Calgary real estate?

#19 eddy on 09.22.13 at 6:29 pm

At the bottom of his add he does have the disclaimer-

**All figures provided are estimates only and none of the figures are guaranteed**

I don’t think we need more government. We have this-

Real Estate and Business Brokers Act, 2002

http://www.e-laws.gov.on.ca/html/statutes/english/elaws_statutes_02r30_e.htm

which covers it-

False advertising

37. No registrant shall make false, misleading or deceptive statements in any advertisement, circular, pamphlet or material published by any means relating to trading in real estate. 2002, c. 30, Sched. C, s. 37.

It would probably require a complaint from the general public

#20 Old Man on 09.22.13 at 6:33 pm

#16 Alberta Guy – I have a gun with many bullets that can be fired, so do not disclose all except in private, so what you see here is nothing at all.

#21 Rebecca on 09.22.13 at 6:36 pm

Some of us young’uns are listening to you instead of these hucksters, Garth. I’m 27 and determined ages ago that renting beats owning. But after pressure from a realtor to buy-buy-buy (because I had good credit, because I rent), I was seriously considering purchasing a Toronto condo with walls of pressed cornflakes as an “investment”.

Then I found this blog, which backed up all my spidey-sense misgivings with facts, and told them to take a hike. Thank you for helping one virgin.

#22 Smoking Man on 09.22.13 at 6:43 pm

Old Man, from yesterday, tell her to look for the dude with the brown Indian Jones hat, at the centre bar after the show.

I need a hottie, chic man magnet for my booth at an up coming trade show.

:)

#23 Evangeline on 09.22.13 at 6:50 pm

#12 #12Old Man “Now I want to give a tip in English literature that is directed to Daisy Mae, as a book called The Virginian is how I have personally guided my life for many year…”

Your post jogged my memory that more than one person whom I respect has urged me to read “The Virginian” by Owen Wister.

“The Virginian: A Horseman of the Plains”

http://en.wikipedia.org/wiki/The_Virginian_(novel)

#24 jess on 09.22.13 at 6:51 pm

The private social network for your neighborhood
https://nextdoor.com/#section_1

whether one rents or owns/rich or poor …a safe neighbourhood is what is desired

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

#25 Slow Canada on 09.22.13 at 6:57 pm

Garth – I was looking over some of your old posts from 2008. Can you believe that real estate has continued to go up since then? I am waiting for the same comedown that you are, and I find it hard to believe that Canada lives in some sort of a bubble where things happen 5 years later than the US. But it would appear to be so. Kind of like how we elected the Conservatives in 2006 as the Americans were gearing up to elect Obama (no offense). Has the comedown finally arrived?

#26 The Donald on 09.22.13 at 7:09 pm

Anyone know what the winning bid was for that Trump Tower condo auction today?

Wondering if one bedroom units are still worth a $1 million dollars in that building :-)

#27 a prairie dawg on 09.22.13 at 7:09 pm

The Prorogue Conservative Party are too busy hiding behind fake Action Plans to help with any meaningful change.

#28 Stupesing in Cabbagetown on 09.22.13 at 7:10 pm

My friend’s 24-year-old son just purchased a new build in a community two-hours drive from his place of employment. I warned my friend last April to warn his son (who graduated from college one year ago) that real estate values sometimes go down and that we are at the apex of a housing bubble. Waste of breath.

The kid moved in this weekend and my friend couldn’t be more proud. “He paid $350 thousand for the place and it will be worth over half a million by the time he pays off the mortgage in seven years” he gushed. “Or,” I warned pessimistically, “it could be worth $200 thousand”. He brushed me off: “That won’t happen, real estate always goes up. The value has already increased by $20 thousand.”

I directed him to the chart on the TREB site that shows a drop in average price of almost 28% from 1988 to 1996. He said that never happened and the TREB stats are wrong. Huh?

Apparently the housing crashes I witnessed in Alberta in the 70’s, in BC in the 80s and in Ontario in the 90s do not affect good people who buy “for the right reasons”.

What twilight zone is this?

#29 "Common sense economics" by Ray Dalio... on 09.22.13 at 7:15 pm

http://www.youtube.com/watch?v=PHe0bXAIuk0&feature=youtu.be

This video should be watched by every idiot like the one who is the subject of today Garth’s post and by any of his clients (bigger idiots)

#30 OlderbutWiser on 09.22.13 at 7:31 pm

#17 – Ralph Cramdown, I feel sorry for those poor “investors”. Too many people mistake investing for gambling. That is what they were doing. Garth has been preaching diversification non-stop. Putting 100% of your retirement funds into one investment is a receipe for disaster.

As I have gotten older I have become more cynical and I highly recommend it for all. If someone tells me that so and so is a good investment…I never believe them. I look it up for myself. Pull up those financial statements, review the stats. Always assume everyone else is trying to take your money. More times than not…you will be right. If someone tells me that so and so fund is yielding 6%, I never believe them. Look it up yourself. Go to the source. 6% income yield is a whole other puppy than 6% return where you are getting back some of your capital. Know the difference!

Only you can be the best guardian of your money. Trust no one, assume nothing. Prove everything. You don’t have to be a PR about it, I always smile and say…thanks so much for that tip…I will get back to you on that…

#31 JimH on 09.22.13 at 7:37 pm

Excellent post (as usual), Garth.
It’s a funny thing; the “Flipper Kings” of Phoenix, Lost Wages, Miami and even Seattle, have been strangely silent for the last 6-7 years or so… Wonder what became of them? But of course, “it’s different here”…

Wait a minute… Yes! It is different there! Yes, Indeed!

Let em explain… I recently experienced an epiphany of sorts when, over BBQ’d Johnsonville Brats and celebratory 1” rib-eyes, (heavily salted, lightly rubbed with garlic, pepper and Cajun spice… in celebration of new DOW and S&P500 new highs), a friend of mine, recently returned from a ‘camping’ (he tows a 5th wheel that semis give way to) visit to the Great White North, flipped me a Loonie, soon followed by a “Twoonie”, which for two reasons seemed to fascinate him.

First, they were Canadian dollar denominated coins, rather than bills. The USA had tried this experiment once, but even stamping the image of Sacagawea (or Sakakawea or Sacajawea as you prefer), the uncrowned queen of all White/European “explorer” groupies on these gold-like baubles failed to ignite any enthusiasm whatsoever. (this continent was already well explored by her people, so what she really was up to is between her, God and Lewis&Clark… none of which are talking). In any event, dollar coins are as dead as Blackberrys down here.

Secondly, he was curious as to why, in 2013, the Canadian public would in any way, shape or form tolerate the image of “an old lady from England who usually wears funny hats” stamped on their coinage. (I challenged him on this last point about the ‘funny hats’ and accused him of reading Canadian author Will Ferguson. He fessed up that he had done so prior to his trip.)

I tried to explain question 1.

“Yes”, said, “Canadians generally follow along with whatever the current government in power deems sensible and cost-efficient. But, mostly, they just do as they’re told and go about the more important business of cutting trees, digging mines, watching American TeeVee and taking holidays…”

Question 2 has been a challenge to me ever since I dragged a U-Haul down here in 1994.

Make no mistake; I have nothing against Good Queen Bess Mark II. I do not hold her funny hats, her vapid and rambling messages to what remains of her once great Empire, her dysfunctional family (who can at least practice the unskilled art of celebratory procreation with the same abandon as the lumpen proletariat; one example at least of social leveling), nor her rather aloof and distant attitude towards such far-flung former colonies and Canada.

“Yes”, I replied; “It does seem funny to have a European monarch as the Head of State of a North American nation. But that’s the point… there is no Canadian nation. It’s kind of like the former Yugoslavia… ”

I got only a blank stare. “You see”, I continued bravely, “It’s all wrapped up in tradition… Heritage… Canada is rooted in a history of British Common wealth”.

He looked at me as if I had just landed from Mars. “Don’t know about all that”, he said quizzically; “I was just in Montreal”

“Oh… Oh”, I replied. “Well… it’s just different there…”

I helped him turn over the brats.

#32 I'm stupid on 09.22.13 at 7:38 pm

It’s funny that he has the young+rich development as his advertisement. Garth that’s the problem with gen x, they saw their parents make money so easy and where spoiled rotten by their boomer parents that they don’t value hard work. They think they are owed an easy life. Well news flash, if you don’t get off your lasy asses and 1. Experience life or it will pass you by
2. If you don’t work hard, you won’t be eating filet migon so get use to KD.

#33 Rabbit One on 09.22.13 at 7:38 pm

Canada’s Real Estate in my opinion was very undervalued during the period of 1998 and 2005.
Just like Gold price, longer the flat price period, longer the price increase period.

Understand it is a bit to long of bubble, frustration for the bears, but once fundamentals are way out of line, price will go back to where it supposed to be.

Just think about Canadian Real Estate has ‘cushion period’ of 5~7 years.

#34 Murray on 09.22.13 at 7:43 pm

I did a comparison between buying and renting over a long period of time. I was able to show average home prices for Ottawa since 1956, and Victoria since 1978.

If you go to the following web sites, it will show without a doubt, that based on a 25% down payment you would be much further ahead in the long run if you buy – even when home prices were over priced. The web site shows the comparison between renting and buying each year and is based on holding onto a property for at least 8 years (I did another table based on 6 years with very similar results).

To me the one caveat would be to have a 25% down payment and make sure the monthly mortgage payments are no more than one third the monthly income. That way you could safely handle potential increased mortgage payments due to increase interest rates, and be sure to come out ahead of renting by a large margin.

I realize that past performance does not guarantee future results, but it’s a pretty good barometer. Also the number of years shown in the table, has gone through other over heated real estate markets in the past, so it should be an excellent method to see what will happen in the future.

The two web sites to check out are:
Ottawa:
http://phpinternet.com/OttawaPrices.html
Victoria
http://phpinternet.com/VictoriaPrices.html

It would be rather simple to do other cities too, as long as I could obtain the historical home prices from that city.

It does not appear any value has been ascribed to equity, ie what it could earn if invested. Additionally the 5 per cent investment return is lower than the average TSX gains over the same period. Finally, there is no allowance are for the high entry and exit costs for real estate. — Garth

#35 Rabbit One on 09.22.13 at 7:49 pm

In 1996, with 5Y fixed Mortgage rate @8.50%, it was cheaper to own than rent.
With minimum wage of $8 / hour, you could buy 1BR, 10Y old apartment in downtown Vancouver.
1BR 10Y old apartment then was about $100K ~ $120K, rented for $800~$900 / month.

Those years, like in 1998, 2000, Real Estate was not everyone’s topic.

Imagine, if your property is only worth $120K, if its value goes down 10%, it is still less than your minimum wage annual income.
Also, minimum wage income has lots room to grow if you really work hard and looking for better career opportunities.

Now, if you own 2BR worth $600K 10Y old downtown Van condo, if lost 10% of its value, how many % of your income it represent?
How you can come up with this loss?
Find better pay jobs?
People can get this kind of problems even if you paid cash, or with decent amount of mortgage.
Let alone with large mortgage.

#36 Donald Trump on 09.22.13 at 7:50 pm

#20 Old Man on 09.22.13 at 6:33 pm

#21 Rebecca on 09.22.13 at 6:36 pm

#22 Smoking Man on 09.22.13 at 6:43 pm

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

Ewwwwwww

Rebecaa, would advise have shower.

#37 JimH on 09.22.13 at 7:55 pm

#33 Rabbit One

No offense, but you’re in my rabbit hole. I have lived down there off and on since 1964 and have always left the place spotless. I guess you’re the one littering the place with empty bottles of Canadian Club and Budweiser and Miller Lite cans. (thank you for moving away from bottled Labatt’s Blue. The last 128 dozen empties were heavy as hell to cart out of there and the recyclers didn’t give me squat)

Please go find your own place … Or at least clean up after yourself!

#38 eddy on 09.22.13 at 8:02 pm

@JimH

” her vapid and rambling messages to what remains of her once great Empire”

England being an “empire in decline” always seemed like BS to me, British Imperialism morphed into the NWO

#39 Londoner on 09.22.13 at 8:04 pm

Hi Garth,

Awhile back you mentioned the HELOC as a smart option to finish off a mortgage (normal vs amortized interest). Is there a general rule, or a calculation that can be made to determine the point where this is useful? ie, 10, 20, 30% left on the mortgage?

You’re the best,

#40 JimH on 09.22.13 at 8:07 pm

#21 Rebecca
“Then I found this blog, which backed up all my spidey-sense misgivings with facts, and told them to take a hike. Thank you for helping one virgin.”
=====================================
Thank God!

A virgin is a terrible thing to waste.

I only wish some of my relatives were as wise as you… then again… their ‘housing virginity’ flew out the window long ago.

#41 Murray on 09.22.13 at 8:08 pm

Re post #34:
It does not appear any value has been ascribed to equity, ie what it could earn if invested. Additionally the 5 per cent investment return is lower than the average TSX gains over the same period. Finally, there is no allowance are for the high entry and exit costs for real estate. — Garth

Income of the invested portion was set at 5% with compound interest. I was using that instead of the equity markets as they are much more volatile and savings bonds and/or term deposits are much safer, even though the returns may not be as high.
You are correct that no allowance was made for the entry or exit costs, however, those costs would only work out to less than 10% (real estate commissions, transfer taxes and legal costs), whereby, the increase in profits noted are much higher.

#42 Market Call on 09.22.13 at 8:12 pm

There has never been, nor will there ever be, a national housing correction in Canada. All real-estate is local.

Duh. — Garth

#43 Smoking Man on 09.22.13 at 8:12 pm

http://wx.toronto.ca/inter/it/newsrel.nsf/7017df2f20edbe2885256619004e428e/035e93ecedd31e2385257be4005db7e4?OpenDocument

Above link is bad news for basement dwellers hoping to vulch in Toronto.

Am I ever wrong?

#44 8102 on 09.22.13 at 8:13 pm

You are right on (again) Mr. Turner, these agents make any claim they want, the mainstream media gives them free advertising masked as a news story, and the band plays on… It will be interesting to read the spin put on the Governors latest comments.

#45 Retired Boomer - WI on 09.22.13 at 8:13 pm

Want to invest in Real Estate for your retirement?

Guaranteed you WILL have an opportunity to use it?

Buy a cemetery plot.

#46 TurnerNation on 09.22.13 at 8:20 pm

Checking futures…on Fri via options went long bonds, USD; short oil.

The link posted yesterday:

http://www.salon.com/2013/09/20/rip_the_middle_class_1946_2013/

(Btw I have a copy of that mentioned book: “It was an era, to use the title of a 1975 sociological study of a Wisconsin tavern, of blue-collar aristocrats.)

I said this, last year:

http://www.greaterfool.ca/2012/05/04/advice-2/#comment-169594

“#210 TurnerNation on 05.06.12 at 1:34 pm
Yes, I see others are slowing catching on.

RIP Middle Class. 1946-2008. Middle class was a quaint, post-WW2 marketing creation built upon USA industrial/manfacturing dominance.

To think: a working stiff, no education, barely any training, could afford a house, a car or two, a tee-vee, and a boat. Braces on the kids teeth. Christmas tress full of presents. A new stove for the missus. Union benefits. Job for life. Gold watch at age 55.
No longer.

The robberbarrons have wrestled back labour rights, taking us back to Depression-era desperation. They always win.
Today, the industrial/manfacturing jobs are outsourced overseas at a fraction of the cost. Or reamining at home but at post-GFC wages ($15, not $60).”

#47 JohnnyMac on 09.22.13 at 8:44 pm

As always a great post Garth – thanks so much for sharing insights on the seedy underbelly of real estate/condo pumping.

#48 TS on 09.22.13 at 8:47 pm

Does anybody know what smoking man looks like? I imagine my hoarding neighbour’s 45 year old son who lives in the basement. He takes the garbage out in his grape smugglers and bath robe every week and creepily stares at my wife.

#49 Mister Obvious on 09.22.13 at 8:49 pm

#9 guelphstudent

Quote From Ryan’s website:

“Ryan is also an advocate for the environment and is a Carbon-Neutral Agent.”

——————————

All of Ryan’s advice is 100% gluten free as well.

#50 AK on 09.22.13 at 8:50 pm

#31 JimH on 09.22.13 at 7:37 pm

“I recently experienced an epiphany of sorts when, over BBQ’d Johnsonville Brats and celebratory 1″ rib-eyes, (heavily salted, lightly rubbed with garlic, pepper and Cajun spice… in celebration of new DOW and S&P500 new highs)”
====================================
Jim,

You are going to have to keep the BBQ lit up for quite a while still, as the Dow and S&P500 have more new highs coming up. :-)

#51 Cow Man on 09.22.13 at 8:51 pm

Trump Tower Auction:
http://www.thestar.com/news/gta/2013/09/22/toronto_trump_tower_unit_receives_belowminimum_bid.html#
Only bid was $550,000. Below reserve bid.

#52 Canadian Watchdog on 09.22.13 at 8:52 pm

This was released very quietly with no press release and Pigg coverage during Friday's rush hour.

Price gap between new condos and houses in GTA reached a record high in August

August saw 663 high-rise sales, down 18 per cent from the same time in 2012 and down 46 per cent from the ten year average. The total is also the lowest number of sales in the last decade. Compared to the ten year average, the 777 sales counted for new low-rise homes represented a 43 per cent fall. However, the amount of sales was a 32 per cent increase from August 2012.

Umm, something doesn't line up with BILD and the gang's "Let’s start spreading the fudge!" marketing campaign statisics, because by their own numbers, last August seen 645 high rise sales which would have made last month 2.8% greater then the previous year. Unless someone just made it up instead of posting the 530-ish sales needed to equate to -18% year-on-year.

Either way, this is what YTD new home sales looks like, now well below 2008-2009 crash levels.

I said it before and I'll say it again: we don't have a statistics problem, we have a reporting problem.

#53 Basement dweller on 09.22.13 at 8:58 pm

I’m becoming less confident about a crash and the more I read this blog the more I feel Garth is as well. Since the inception of this blog home prices have risen 30% and the crash that is coming but no one can say exactly when will result in a 15% decline
I don’t know by I don’t see it coming same old reasons why it should but don’t see it happening

#54 Mortgage man on 09.22.13 at 9:03 pm

This is it the last week for sub 3% and sub 4% (10 year)
Mortgages. You will have a few with 3.2% but you can still get a 4 year mortgage rate.
Big test if prices don’t soften or house don’t linger on the market from now on then no crash.
You still need that pin or catalyst that makes it crash

#55 Vangrrl on 09.22.13 at 9:26 pm

#32: I know I’m being picky here but this sweeping stereotype of gen Xers is bugging me. First of all, for us older gen Xers (each generation spans about 15 yrs so there’s lots of diversity within), our parents are not Boomers. Many of us have immigrant parents (as I do) who were born in the late 30s just before or during the war. They are more rightly war babies and grew up with strong values of thrift, frugality and hard work. Their Cdn born children were taught these important values and (some of us) actually abide by them!

#56 Habs76-79 on 09.22.13 at 9:28 pm

#29 “Common sense economics” by Ray Dalio.

Very informative link to the video by Ray Dalio.

A quick way for anyone to get a better idea of how economies work including the cycles of growth and recession including depressions.

The video shows how things can go up and down including going badly for all, as Ray says with hopeful deleveraging in a beautiful way. But sadly these cycles rarely ever do as all parties interested from Central banks, to governments, to other creditors and bankers, to other businesses and right to the regular citizen all look at things through the narrow optics their own self-interests and suffer from said myopia and ignorance. This is why the beautiful deleveraging that Ray Dalio noted in his video rarely ever works in such a beautiful way.

But a great lesson taught none the less in his video here.

One clear point though, buying any asset at near or at the top of a cycle or bubble WILL END BAD FOR YOU! The most successful people generally learn this and try as best they can to buy and sell any assets they have at the proper points of cycles up and down.

#57 overskooled1 on 09.22.13 at 9:31 pm

For what it’s worth, sometime in the last 2 business days (and despite the modest reversal in bond prices), ING has raised its rate on a 5-year fixed mortgage from 3.79% to 4.09% (as a comparable, RBC is still showing 3.89%).

Not sure why they’ve made this move now, but they’ve usually been on the cheaper end of the posted/advertised 5-year rate range.

Garth, any thoughts or insight (or anyone else)? Is this a signal of fixed rates moving higher across the board?

#58 dupcheck on 09.22.13 at 9:33 pm

people like ryan coyle are a fraud, not even worth mentioning.

#59 Big Brother on 09.22.13 at 9:35 pm

#43 Smoking Man on 09.22.13 at 8:12 pm
No Ex De Havland Rivet Bucker, you are never wrong. Have another blast of red wine sitting in your back yard watching the sky’s for the Mothership. BTW we landed the ship in Marie Curtis Park for you the other evening but, you and your boat were not there.
MKUTRA has your obedience certificate for being a good code monkey at the Investment Market downtown.

#60 VICTORIA TEA PARTY on 09.22.13 at 9:45 pm

GIANT SPECIAL INTEREST GROUP-THINK: A BAD OUTCOME COMETH

Just why we don’t see the huddled, indebted, crainially-challenged masses up in arms about the so-called veracity of Canada’s real estate shills, oops, I mean “sales reps”?

It’s because they (buyers/sellers/newbies) don’t want the party to end. If it’s going to crash, then “not on my watch!” So the real estate property ball keeps rolling along.

And it could soon begin rolling a little faster.

Following last week’s US Fed’s determination to keep the $85 billion of monthly money printing going on, the 10 year bond rates in the US and Canada have moved down, by quite a bit.

It means that lower mortgage rates could follow, by a little bit. Or not. It all depends.

Your average deflowered property virgin needs to see the music not stopping so that he/she can profit from their investment anytime beyond the next 1.5 milliseconds.

They could care less about debt, interest rates, Syria, Obama’s utter failure as an international diplomat, global changes in the prices of giant hot water bottles, whatever.

Because it’s all about “me”. Tomorrow never comes. The lattees are good. Gender confusion reigns. And St. Garth of Possible Outcomes fulminates and rages on.

Like, what’s not to like? Nothing is changing.

It the end, prophets of doom will turn out to be correct, not politically correct, but worse, being “right” on, and about, the money.

Canada’s real estate industry got a small shot in the arm thanks to Helicopter Ben’s indecisiveness (or was it?) last week. Worries now are that his likely successor, Janet Yellin, will crank out even MORE QE. That leaves many worried as heck.

But, here in our frozen north colony, it’s all good.

Toronto the Good, “it’s the kind of city that thickens the blood”, as the old song says, creates ever more real estate dependents and enablers.

In the end Garth needs to keep on campaigning for the concept of fiscal rectitude, because those supposedly in charge such are not.

And all you clueless violated property virgins, please take note; your date with bottom-line destinies will arrive, as will the next phase of the moon, the harvest moon.

Low interest rates will be the death of you.

They’ve pretty much killed off Europe, endangering China, blown up Africa and soon Brazil, the US looks like hell on wheels; and then there are all those boomer wrinklies’ so-called under-performing pension plans.

A jolly bit of street theatre.

#61 KommyKim on 09.22.13 at 9:59 pm

I don’t know why, but this cartoon reminds me of this blog:

http://deflocked.com/comics/september-22-2013/

#62 NoName on 09.22.13 at 10:00 pm

Interesting read

“The Fed news was leaked to, or known by, a large Wall Street Firm who made the decision to pre-program their trading machines in both New York and Chicago and wait until precisely 2 PM when they would buy everything available,” he writes. ”It is somewhat fascinating that they tried to be ‘honest’ by waiting until 2pm, but not a thousandth of a second longer.”

http://qz.com/126823

#63 William of the North on 09.22.13 at 10:01 pm

Hey Garth,

Could you remind us how a “taper” by the Fed and Central banks was going to affect the markets and mortgage rates. Oh yeah…. and tell us when the taper will happen. And tell us why Gold sucks….since the world is pretty much competitively devaluing their currencies.

Even this Comedian gets it

http://www.youtube.com/watch?v=60Fead0hihM&feature=player_embedded

I noticed gold lost $40 this past weekend. My money didn’t. — Garth

#64 Sotiri on 09.22.13 at 10:01 pm

Ryan if your investment strategy is so secure that you can guarantee that the first investment will end up being worth millions than why don’t you quit your job as a realtor and use your strategy to become a millionaire?

#65 al on 09.22.13 at 10:06 pm

about 5 years ago there used to be prominently featured on late night tv commercials condo king Harry Stinson and 1 King West

and also all kinds of less prominent folks advising how to make millions fixing dives in the US and selling them for profit

was good late night tv

#66 Fed-up on 09.22.13 at 10:20 pm

Ohhhhhh Canada…what a country. Where everyone wants to work for the public sector because it’s easy money (that doesn’t even exist), is secure and whomever is left in the private sector gets to fund their crazy benefits and fat pensions. Where manufacturing is slowly but surely becoming non-existent…who the heck wants to pay lazy workers $30-$40 per hour due to the fact that cost of housing and living has gone ballistic thanks to the morons we have in Ottawa? A country where little and nothing is made or innovated and whatever industry we did spearhead at one time, has all become a distant memory. An oil producing nation that screws its own population with insane gas prices due to the fact that we refuse to refine anything that we dig out of the ground. A country where nearly EVERYONE’S idea of getting rich is to speculate the hell out of dirt, windows and mortar to one another. A country where most people believe that lower prices of gas, food, electronics, transportation, hydro and heat would be a good thing, but the prices of housing being among the most outrageous on the planet is just peachy.

Born and raised here, and no longer feel proud to call myself Canadian anymore, sorry to say.

#67 takla on 09.22.13 at 10:28 pm

Just another snake oil salesman plying his con game, someone who sells misrepresented goods to the uniformed.Lets face it,he’s in the business and knows dam well whats comeing around the corner for canadian realestate.If theres a heaven and hell i hope they keep a nice hot little corner down there for the likes of this guy

#68 al on 09.22.13 at 10:33 pm

@ Fed-up

the business got moving jobs to cheap labour countries for at least 30 years now.

hence, most of the people can’t make a living wages anymore or have any job security.

looks like Germany kept the manufacturing though and they are doing ok.

many countries ended up destroying their manufacturing base switching instead to wheeling-dealing speculative economy and the problem is only getting worse.

#69 William of the North on 09.22.13 at 10:44 pm

I noticed gold lost $40 this past weekend. My money didn’t. — Garth

That’s not true. Every time the money supply is expanded your money is worth less.

The Cure is the disease.

#70 Fed-up on 09.22.13 at 10:48 pm

@#43 Smoking Man on 09.22.13 at 8:12 pm

———————————————————————————————–

No Smoking Man, you are never wrong and you have never made a bad investment, win huge on every currency and futures trade, always pick winners in every horse race and clean out the casino whenever you’re gambling. Hell, even your offspring have more financial prowess than Warren Buffet. What’s it like to be so financially flawless? Please enlighten us, oh ye of infallibility.

#71 Smoking Man on 09.22.13 at 10:53 pm

#59 Big Brother on 09.22.13 at 9:35 pm
#43 Smoking Man on 09.22.13 at 8:12 pm
No Ex De Havland Rivet Bucker, you are never wrong. Have another blast of red wine sitting in your back yard watching the sky’s for the Mothership. BTW we landed the ship in Marie Curtis Park for you the other evening but, you and your boat were not there.
MKUTRA has your obedience certificate for being a good code monkey at the Investment Market downtown.

……………………………………………

I was a damn good rivet bucker, wasn’t there long enough to be promoted to a rivet shooter, Now those guys had status, walk up to the wing, blank expressionless look, un holster the gun, coolly place the rivet in the hole, and wait for the bucker to push it, the green light to pull the trigger. Ah man wish I could have done that.

Now being a code monkey you hit the rivet on the head with that, it’s all about acting, in high school I won the best actor award every year I was in school, about the only thing I was good at. But that skill gets you far in life, I can blend with anyone and any group, hanging out with rivet bucker, I could gawk at the hottie walking by, and making really good fitting in comments like. “Wow She’s got nice ones man” or when I was having lunch with the Sultan of Malaysia in his palace, “She has and extraordinary posture, and grace”

I’m an actor, trying to be writer, hardest thing I have ever tried. As far as being the code monkey, monkey is to kind a word, more like rabid dog, I play my role well, but I’m not there for the money, my farts earn more loot than my consulting income, my motives will shine brightly in my book.

I did see a UFO in may of 2012. was that you?

#72 just say no on 09.22.13 at 10:56 pm

I am with Fed-up! And to think 649 and it’s guaranteed weekly million is going to save us all? What a joke…..

#73 Fed-up on 09.22.13 at 10:58 pm

@#68 al on 09.22.13 at 10:33 pm

——————————————————————————————–

I agree Al, but there is still plenty being made in the rest of the G8 nations (Italy, France and Japan for example). Even the US is regaining a huge amount of manufacturing within their boarder as you don’t require $800,000 to put a roof over your head in most cities of their country (more $200,000 or less).

Canada has sealed its fate in this regard, like no other 1st world nation that I have know of.

#74 Sebee on 09.22.13 at 11:02 pm

Speaking of Jesus, WWJD? How many 44sqft condos does he have, up in the sky? Surely not just one.

#75 young & foolish on 09.22.13 at 11:09 pm

Wow … so many bitter people on here … waiting for lower prices so they can pounce. Seems like RE does have a good future after all. Ya got to pay to live somewhere!

As for the flippers? Well, they’re gamblers, but their success means shaky valuations for the majority. Bad karma.

Do yourself a favour, and stay on the sidelines. Good rental rates as far as the eye can see. Besides, God loves renters!

#76 Smoking Man on 09.22.13 at 11:14 pm

#66 Fed-up on 09.22.13 at 10:20 pm

“Where manufacturing is slowly but surely becoming non-existent”

Born and raised here, and no longer feel proud to call myself Canadian anymore, sorry to say.
……………………………………………

So your upset cause there are less factories for you to work in.

Dude think about that, is that the upper end of your to do list?

I’m proud to be Canadian, we have the best people in the world here, I have been around, only thing that sucks here is Ontario Liberals and there bunk bed partners, insurance companies, O and the weather.

#77 Keswickian on 09.22.13 at 11:15 pm

The floor plans for yonge+rich are unbelievable

426 sq/ft studio with a pull out couch as your bed

the one bedrooms+ den And by den they mean you get a 5′ wide place to put a desk. I know why sales are 46% lower this year. Who would want to live in that space.

#78 Smoking Man on 09.22.13 at 11:27 pm

#70 Fed-up on 09.22.13 at 10:48 pm
@#43 Smoking Man on 09.22.13 at 8:12 pm

———————————————————————————————–

No Smoking Man, you are never wrong and you have never made a bad investment, win huge on every currency and futures trade, always pick winners in every horse race and clean out the casino whenever you’re gambling. Hell, even your offspring have more financial prowess than Warren Buffet. What’s it like to be so financially flawless? Please enlighten us, oh ye of infallibility.

……………………………………………….

Heronomics, not taught in school, not even a word.
It work, buy the book if I ever finish it.

As far as Casinos, I lose almost every time..But it’s the only place in the world where I get a free pass, my wife doesn’t bust my b’s when drinking there, I can get absolutely fall down, carpet burns on the head wasted.

It works form me…..

#79 Smoking Man on 09.22.13 at 11:32 pm

Sorry, last post it was “Herdonomics”. Heronomics I don’t know what that word even means.

See told you this writing think is difficult

#80 Big Brother on 09.22.13 at 11:37 pm

#71 Smoking Man on 09.22.13 at 10:53 pm
MKULTRA is the most powerful mind control system on he planet. We are the UFO’s, we control the universe. You didn’t think that our powers came from this planet did you? The UFO you saw sitting in your backyard was us hovering over Lake Ontario. We come in peace but we do come to read your minds. We are everywhere.

#81 omg on 09.22.13 at 11:39 pm

#53 Basement Dweller – I think you got it right – no big correction anytime soon. There is just NO BIG CATALYST that will change the economics of RE in Canada on the horizon. Interest rates will have to pop by more than a couple of percentage points for any meaningful correction.

My own sense is that it will be a gradual GRIND down over the next 10 to 15 years, maybe even 20 yrs, where the real price of houses come back down to normal long-run income to price multiples. Much of this could occur with essentially flat RE prices and 2%-3% inflation per year – that would knock the crap out of the REAL DOLLAR price of a house.

The real wild card is interest rates – a return 1990’s style mortgage rates and look out below. But again nothing is going to get us to those kinds of interest rates any time soon.

#82 JimH on 09.22.13 at 11:48 pm

#66 Fed Up
“Ohhhhhh Canada…what a country… Where manufacturing is slowly but surely becoming non-existent… A country where little and nothing is made or innovated and whatever industry we did spearhead at one time, has all become a distant memory…
Born and raised here, and no longer feel proud to call myself Canadian anymore, sorry to say.”
==================================
As a Canadian/American dual, I sympathize with much you say and empathize with the sentiments that spawn them.

Laurier said about a century ago that, “The 20th Century would belong to Canada”. Well, his timing might have been off a little, but all is not at all lost.

I love Canada, warts and all. I love the USA, warts and all.

I do wish for Canada a more unified and unifying sense of purpose and direction that would unable this great nation to become more than the sum of its regional squabbling parts!

I do wish for the USA a more unified and unifying sense of purpose and direction that would unable this great nation to become more than the sum of its ideological squabbling parts!

But I do hope that you won’t “throw the baby out with the bathwater”! Canada is composed of more than just “hewers of wood and drawers of water”, and does have a manufacturing base that will one day experience its own renaissance.

Many things are still “Canadian made”:

http://www.canadianmade.com/
http://www.readersdigest.ca/travel/canada/13-awesome-things-you-didnt-know-were-made-canada
http://en.wikipedia.org/wiki/Category:Goods_manufactured_in_Canada

Canadians may well have temporarily lost their way; but iof history shows us anything, it is that Canadians can adapt, innovate and invent as well or better than any nation on earth.

People love to say that the current state of affairs “will end badly”. This is true only if “the end” fails to initiate a “new beginning”. It’s never the cards that are dealt, but how the hand is played that counts.

My mother and father always said that they thanked their lucky stars that they experienced the Great Depression. It took me over 60 years (and 2008) to begin to understand that.

#83 Notta Sheeple on 09.23.13 at 12:00 am

#2 ILoveCharts on 09.22.13 at 5:22 pm
“… My view: Survival of the fittest. We don’t need the government to babysit everything. People will be burned playing high-stakes games and that’s ok……”
=========================

Jeffrey Skilling (Enron), Frank Dunn (Nortel), Conrad Black (Hollinger), and Bernard Madoff (Ponzi King), probably all share your point of view.

#84 Ford Prefect on 09.23.13 at 12:02 am

#17: Ralph Cramdown: “Other end of sausage grinder:” one site was proposed for the Comox Valley. It was a piece of rural land that was explicitly zoned not for development. But the developer, Ron Aitkens, tried to proceed – he even tried to get the City of Courtenay to take in the piece although it was miles from current city boundaries. What a farce. It never had a chance of succeeding. I think that Aitkens did not have a clue as to what he was doing and the suckers that backed his absurd scheme have lost many millions.

#85 45north on 09.23.13 at 12:04 am

Keith in Calgary: Given that the federal and provincial governments can barely agree on who should police securities markets one can hardly expect the politicians to do a damn thing about the criminals, liars cheats and thieves that dominate the real estate industry.

once all the horses have left the barn the politicians will close the barn door.

Ann said that if the government wanted to slow the market simple go back to the old rules the whole thing stops overnight with 15% unemployment in the morning.

10% down payment for CMHC mortgages would do just that

Stupesing in Cabbagetown: My friend’s 24-year-old son just purchased a new build in a community two-hours drive from his place of employment. I warned my friend last April to warn his son (who graduated from college one year ago) that real estate values sometimes go down and that we are at the apex of a housing bubble. Waste of breath.

well the commute would kill me but not the 24-year-old son. Doesn’t sound good, you got to maintain your car in A1 condition, probably two cars. I asked google maps for the driving time between Lindsay ON and 315 Huron Street ( where I used to work ). 1 hour 33 minutes. Right now. Try it at 8 in the morning in a snow storm.

Canadian Watchdog: price gap between high rise and low rise in Toronto. I see Toronto low rise as the last hold out against price reductions. You know, when the 24-year-old gives up, he may not give up the commute he may just give up. Period

Victoria Tea Party: And all you clueless violated property virgins, please take note; your date with bottom-line destinies will arrive, as will the next phase of the moon, the harvest moon.

Low interest rates will be the death of you.

well I’d say that the 24-year-old is the clueless person and he is going to need all the help he can get when interest rates go up

the harvest moon for this year has come and gone, the next full moon will be October 18

http://www.farmersalmanac.com/full-moon-dates-and-times/

#86 Notta Sheeple on 09.23.13 at 12:06 am

#13 Smoking Man on 09.22.13 at 5:58 pm
=========================

No Credibility
+ Spell Check
_____________
No Credibility

#87 Donald Trump on 09.23.13 at 12:21 am

#51 Cow Man on 09.22.13 at 8:51 pm

Trump Tower Auction:
http://www.thestar.com/news/gta/2013/09/22/toronto_trump_tower_unit_receives_belowminimum_bid.html#
Only bid was $550,000. Below reserve bid.

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

I am not worried…

They only cost $99 K to build

#88 No Debt on 09.23.13 at 12:32 am

So Coyle is advertising on Kijiji ? Last of the high roller’s is he? Either he’s so cheap his butt squeaks when he passes wind, or he’s casting his line for suckers.

If it’s suckers he’s after, I’d suggest that the dude head down to the east end of Port Hope, to Gage’s Creek. Suckers lay in just below the flat’s so thick you can walk across the creek walking on them and never get your feet wet.

447 sq. feet. I’ve seen travel trailers (with the slide outs extended) that are bigger than that. And about $200,000 less to purchase with the truck to haul it.

#89 Joseph R. on 09.23.13 at 1:08 am

#69 William of the North on 09.22.13 at 10:44 pm

You are repeating old Libertarian myths.

Money supply has to grow in order to cope with population increases. If population increase but the money supply doesn’t, then you end up with the Great Depression, due to a continuous spiral of contraction caused by the Gold standard. This leads to deflation, as there is LESS money to go around; Credit is throttled, prices and wages fall , debtors are hammered, and ultimately widespread defaults on economic commitments (bankruptcies, inability to pay interest due, abandonment of loans, expanding layoffs).

#90 Patrick Winterton on 09.23.13 at 1:14 am

>>Nobody can assure a return of 103%.

Yet you have, many times, claimed that stocks would rise at 7% indefinitely. Hmm…

Actually I have never said that. But a balanced and diversified portfolio, holding both fixed-income and growth assets, has averaged 7% over the past decade, which included the 2008-9 meltdown. The Dow and S&P are ahead 21% this year. Preferreds pay 5.5% plus a dividend tax credit. Some dividend funds have been handing over 8% for years. Nothing is guaranteed, but financial assets have outperformed real estate consistently. Learn more, Patrick. — Garth

#91 cynically on 09.23.13 at 1:16 am

#31 JimH – you described the colony of Canada to a tee. With her obedient servants saluting their “foreign” monarch and head of state, this is why Canada with its copied British political and legal sytems and American financial and everyday living systems, neither system she got right, will forever muddle thru her problems unless its citizens take a lot more pride, becoming a leader, not a follower.

#92 Exurban on 09.23.13 at 1:20 am

Agree with Fed Up about negative effect of expensive real estate on job creation. In the Vancouver area commercial RE is so expensive the only way a business can stay open is if it makes a crapload of money. Pretty hard for the next generation of small business owners to get started.

#93 sideline sitter on 09.23.13 at 1:28 am

ryan is also a spammer who buys email lists… anything to spread his pitch and make a dollar. the problem is that he did it for so long, and made a bundle along the way, so how could it be wrong?

#94 aprilNewwest on 09.23.13 at 2:08 am

I hear the 3D printer is the next revolution and it will be the end of manufacturing ’cause we’ll be able to make stuff at home.

#95 Stomper on 09.23.13 at 3:40 am

#73 Canada = Australia

#96 Rexx Rock on 09.23.13 at 3:53 am

I agree with fed up,the private sector guy loses because of a lower wage and a crappy pension.Thats why parents should tell their children to always look for goverment jobs so they can retire with dignity and respect.Maybe one day it maybe reversed but the goverment pensions are like hush money.

#97 Buy? Curious? on 09.23.13 at 6:20 am

I say we all give this Ryan guy a big hug. He’s just trying to scrape by, making ends meet. Why can’t we just look past his 80’s Gordon Grecko style and follow him on the path to wealth? His plan doesn’t seem that bad at all. Let’s get together, buy some condos and laugh ourselves silly! Whoever is with me, we’ll meet at Smoking Man’s place on Saturday say 9am to avoid line-ups and disappointment. We may need some designated drivers.

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

#98 bigrider on 09.23.13 at 6:45 am

Wow, 5 years and counting for this fabled RE correction in the GTA.

Time to throw in the towel. I have. Not going to happen.

As for the different regulatory framework that applies to financial advisors verses RE salespeople Garth mentions, well , this is a large part of the reason why RE prices will continue to defy all logic and gravity.

Even with a far more disciplined, regulated environment, financial assets consistently outperform real estate. But then, most people know bricks, and have willful ignorance of securities. This is why we have the 1% – 99% split. — Garth

#99 Listen to Garth, The Time is Short! on 09.23.13 at 8:47 am

Heed the wise words of the bearded mystic oracle, all knowing, all wise, sagacious oracle, all seeing financial prognosticator that runs this wise blog. Former parliamentarian, minister of national revenues, debunker of financial parliamentarian peckerheads and peckerettes, exposer of financial myths, Harley riding badass, followed by a harem of Amazonian beauties, gifted speaker, NYTtimes bestselling author, crystal ball gazing, financial tea leaf reader without equal or peer and last but not least all round jolly good fellow!

#100 John on 09.23.13 at 8:55 am

I will bid 551K for Trump condo but my guess is vendor is not likely to accept. Let’s hope this desperate attempt at selling a Trump condo receives some major news traction because it illustrates exactly where the condo market in Toronto stands. Vendors in price denial and buyers finally realizing that RE is a falling knife. Brad Laaaaaaamb was interviewed before the auction and stated that Trump Tower was a great property….why doesn’t Lamby and Ryan pony up for the owner….after all, he is also a RE agent that ironically sees no value in MLS. When everyone heads for the exits this time your “professional RE agent” won’t be able to do squat. He is too busy trying to save his own ass.

Not only is the RE market going to crash, it is also going to mark the end of MLS monopoly, conventional RE agents, and the blood sucking commissions.

#101 Tonino, Nonno Nicola's Grandson on 09.23.13 at 9:13 am

#98 Big Rider

“Time to throw in the towel. I have. Not going to happen.”

Nonno told me to tell you (he is busy making tomato sauce and getting sauced making vino) that he is happy you finally understood what his grade 5 educated mind has been telling you for years. He also told me to tell you to get over here for the best home made pasta/sauce and vino combo you have ever had!

#102 jess on 09.23.13 at 9:19 am

This story is unbelieveable !

Alberta pensioner fights to reclaim home, declared embassy by sovereign citizen

http://www.therecord.com/news-story/4119581-alberta-pensioner-fights-to-reclaim-home-declared-embassy-by-sovereign-citizen/

========
Leith n.dakota

Locals fight back against neo-nazi plans to turn North Dakota town into a white supremacist communityDaily Mail ‎- 1 hour ago
Hundreds of demonstrators turned out in a tiny North Dakota town to protest against an American Nazi group who want to move in and take

#103 eddy on 09.23.13 at 9:36 am

a radio interview about money, the EU and Greece with Bill Still-

http://www.youtube.com/watch?v=q4wkW83DEAU&feature=c4-overview&list=UUFUC7NaTxZanB_FVOJN92eg

Bill who? — Garth

#104 Yo on 09.23.13 at 9:53 am

Real Estate is an odd sector. I use to work in banking, and if you if you fined or caught doing anything against your securities license, you were out of a job. When I sold my house last year in North York, our agent was eventually fine by RECO for doing things in am improper way (basically colluding with the buyer). But you know, here I am driving my old area and there is his For Sale sign with the same REMAX office.

#105 Financial assets are not reliable on 09.23.13 at 9:57 am

Even with a far more disciplined, regulated environment, financial assets consistently outperform real estate. But then, most people know bricks, and have willful ignorance of securities. This is why we have the 1% – 99% split. — Garth

Garth, you are wasting your time with discussing small matters. Rather that dissecting facts like in this article you should start writing for the financial illiterate.

At this moment I strongly feel that rather than reading this blog I should have a look at the Canadian securities course which seems to be a minimum requirement for anybody trying to work in the industry.
The only thing that holds me back it the intuition that, after reading that book and many others, I am going to find out that the Financial world is rotten, twisted and there is no room for the small fish. The small fish is there just to be food for the big ones. That is the very reason why people don’t trust the markets anymore.
You have to be well educated to make profit in this current environment. The players are too many and less and less small fish . That leads to cannibalism among the big fish.
People don’t have time and (IMHO) they don’t stand a chance against the big fish. The fees and the taxes associated with investing in this rather abstract way that we call today Stock market are one more reason to not even try to go that way.

On the other side investing in RE, or buying your own house and building equity while you live in that house is simple to simple not to try it. So far in Canada the houses have proved to be a very resilient form of investing on long term
Your main argument is “illiquidity”. Well how need it on the long term?

To paraphrase a big fish’s saying about stocks, don’t buy a house that you can not hold for 10 years and you will be fine.

Unless someone comes with a clear explanation for how common people can make money in a safe way by investing in stocks, bonds and whatever else you might suggest, you are not going to see people moving toward that investing in that way no matter what you say or write here.

To understand how we feel just look at the stock market…when you see that sort of swings like last Friday or Wednesday you are certainly not going to put your money there…

So rather than focusing on how bad real estate is try to write a series of clear and simple articles explaining how the average Joe can survive in this mess. That would help us a lot. At this point I believe we know everything we could possibly need to know about the pros and cons of buying RE. What you are missing is that other than “it is more profitable” most of us don’t know anything about financial assets and we do not have a life to spend it trying to understand. RE is simple…try to make Financial assets simple….I doubt that that is even possible for the average Joe. For that reason, although I am with you on the RE side I believe that on Financial assets you are fighting a lost battle

That ground has been convered here many times. And I suggest you take the CSC to ameliorate your bad attitude. — Garth

#106 Fed-up on 09.23.13 at 10:10 am

@#76 Smoking Man on 09.22.13 at 11:14 pm

————————————————————————————-

Maybe you should have read the rest of my post. No innovation, no manufacturing and no refining equals no skills and a false service only based economy. I was also referring to our whole country and not just Ontario. And the best people in the world you say???

You need to get out more.

#107 Donald Trump on 09.23.13 at 10:12 am

I loved that Ryan Coyle on Saturday Night Live !

http://www.youtube.com/watch?v=vAE4AOP6xKs

#108 Investing in Financial assets are not reliable -part 2 on 09.23.13 at 10:20 am

This is not the first time when I come across of interesting information coming from this guy: Ray Dalio

Here is his opinion where he suggests that Investing is a sort of Poker game. Linked to this article there is another one which quotes a study done by the freakonomics guys., study that shows that says that on average the skilled pocker player takes home 30% ROI while the average Joe takes 15% loss

http://www.businessinsider.com/poker-truths-investors-need-to-know-2012-12

Do you really think that the average Joe has the money and the skills to fork to play this sort of game?

Dalio has a clear mind and by his opinion quoted by the first article linked here he admits that investing is not about economy, or a deterministic profitability and so on but rather about your decision against the others’s decisions.
While by what he is saying he has millions to spend on research the average, Joe has at most a “financial advisor” who would rather make money advising his clients to invest in stocks that the advisor is paid to recommend.
In the end if that advisor is so sure that his plan works why wouldn;t he borrow money from somewhere and little by little build his empire….?

Bottom line: this is a game of poker. One could ask, where does the Economics fit in all of these? They fit on the referee side. When the bets go to high and people bet more than they can afford the rules (real constrains ) are there to remind them that this is not virtual reality and Superman is a fiction. In real world that is called bankruptcy :-)

I have never met an advisor who is ‘paid to recommend stocks.’ In contrast, every real estate agent is paid (by the seller) to recommend a house. Worry about that. — Garth

#109 johnny d on 09.23.13 at 10:28 am

Jim Flaherty says house prices are stable in Canada when asked by a Wall Street Journal reporter during a press conference in Toronto just now.

I say, goodbye Canada. Time to pack up and ship off.

#110 Fed-up on 09.23.13 at 10:35 am

@#82 JimH on 09.22.13 at 11:48 pm
——————————————————————————–

I love your positivity and enthusiasm, I really do, but did you actually click on the links that you provided of what is made in Canada? Hardly what a nation of 35 million should be totally thrilled with and in most cases not exactly household names unless it is a multinational owned by a foreign country that has set up shop here. Many Canadian companies listed are only retailers, they do not directly contribute to our manufacturing sector.

I still maintain, we are becoming a 1 trick pony. Services, services and more services.

#111 Investing in Financial assets are not reliable -part 2 on 09.23.13 at 10:50 am

I have never met an advisor who is ‘paid to recommend stocks.’ In contrast, every real estate agent is paid (by the seller) to recommend a house. Worry about that. — Garth

That is why you still have money to invest. However the issue was in the papers around 5 years ago. Forget this. Address the current nature of investing in Financial assets and the poker game analogy.

You must realize that 7%-8% return is not possible to everybody. Assume that everybody has the same advisor and they all invest the same way. Then everybody should get a 8% profit. That would be possible IF the underlying economy generates profit more than 8% because some must remain in the hands of the entity that the investor invested in.

In reality as Dalio said this is a game of poker. I deeply trust him for two reasons:
1. the current economy does not seem to progress at that pace (7%-8%)
2. the entire mechanism is your bet against the others’ bets. In order to you to take some money home, in an economy that is stagnating, someone has to lose money

The problem is that many like Dario are out there making educated bets while the small fish takes home the 15% loss mentioned by the freakonomics guys

Of course most people will lose money. They are mistrustful and unschooled. — Garth

#112 Donald Trump on 09.23.13 at 10:50 am

Re Field of Dreams story

Lots of examples of those.
Remember Eron ?

http://www.cbc.ca/news/business/eron-mortgage-found-guilty-of-170-million-fraud-1.168916

You couldn’t turn on the TV without their ads on.

Or Bear Mountain in BC?

The trick seems to be to get a few celebs(often Pro Athletes) to buy in and lure in more suckers.

One I am going to watch is in Tsawassen Springs in BC on the way to ferry terminal. The developer is quite well off, yet has some well known people partners like Pat Quinn and Michael Buble’. That one is being constructed in a bad market and competing with a FN band right across the street.

#113 Ralph Cramdown on 09.23.13 at 10:56 am

#108 Investing in Financial assets are not reliable -part 2 — “Bottom line: this is a game of poker. One could ask, where does the Economics fit in all of these? They fit on the referee side.”

Poker has referees? You need to understand some stuff.

1) In the long run, stocks have outperformed everything else, in nominal dollars and in inflation adjusted dollars. But if you’re a wage slave with good credit but few dollars, you can do better by putting 5% down on a house due to the extreme leverage, as long as that house’s price keeps going up.
2) If your aunt Millie buys 100 shares of Telephone and does nothing for thirty years, Wall St. makes precisely one commission from Millie and a few pennies every quarter from AT&T for distributing the dividends.
3) This is why Wall St. would much rather that Millie turn on CNBC and day trade along with Cramer, or hand her funds over to a trusted Investment Advisor or mutual fund salesman who will manage her funds and generate fees or commissions.
4) Investing all your money in only one stock is usually a pretty bad idea, so either spread it around, or invest it in a fund that spreads it around and has the lowest fees you can find.

THAT’S ALL YOU NEED TO KNOW. The rest is gravy.

#114 Obvious Truth on 09.23.13 at 11:10 am

#111

Dalio knows it’s about inflation but he too got caught up in the media hedge fund frenzy. Sometimes you have to follow the herd and other times you have to be contrarian.

Rebalancing by its nature does this.

You’ll never hit a home run without massive risk. That’s what most real estate buyers/quasi investors are doing.

My dad worked in all the original queens quay condos in the 80’s and couldn’t even buy one because HK money was buying them by the floor. That creates massive risk. It ended how you would expect.

I bought one for less and lived in it 15 years later.

Rates will be on your side till they are not.

Right now the herd should chase performance in the S and P and there aren’t many sellers.

The fed just told you conditiond are weak and this is with massive world wide stimulus. This won’t end soon.

The tide will turn when inflation does. CB’s will tell you it’s under control when it ticks up but that will be your signal to change course.

#115 hilarity on 09.23.13 at 11:11 am

http://confoundedinterest.wordpress.com/2013/09/22/stealth-socialism-ghost-cities-and-fake-paris-london-manhattan-moral-hazard-gone-wild/

China real estate fun video

#116 IM in C on 09.23.13 at 11:19 am

Here is another downside to renting:

http://news.nationalpost.com/2013/09/23/freemen-on-the-land-embassy-takes-over-alberta-pensioners-rental-property/

And now that This kind of antic has been nationaly publicised, you are going to see a lot more of it!!

#117 TEMPLE on 09.23.13 at 11:22 am

#105 Financial assets are not reliable on 09.23.13 at 9:57 am

I should have a look at the Canadian securities course…The only thing that holds me back it the intuition that, after reading that book and many others, I am going to find out that the Financial world is rotten, twisted and there is no room for the small fish.

Do you see any problem at all with formulating your (totally wrong) opinion based on intuition? And with jumping to a conclusion about an industry based on a book you don’t want to read because you feel like you already know what the book will tell you? I wish I could digest information so quickly. I’d go to the library, briefly fondle every book there, and emerge an opinionated genius.

The fees and the taxes associated with investing in this rather abstract way that we call today Stock market are one more reason to not even try to go that way.

Are you talking about the fees that are (at worst) about 85% cheaper than the fees associated with real estate? Or the huge tax advantages of capital gains and dividends? Or are you talking about some other imaginary fees and taxes that you cooked up by not reading the tax code?

TEMPLE

#118 dosouth on 09.23.13 at 11:28 am

#105 Financial assets are not reliable –

You need to watch the latest Michael Moore film. Then choose the best of all the evils you speak of or put your money in a mattress..

Capitalism – A love story

#119 Canadian Watchdog on 09.23.13 at 11:58 am

Toronto subway extension to get $660M [bailout] from Ottawa

The federal government will contribute $660 million to help extend Toronto’s Bloor-Danforth subway line in the east-end neighbourhood of Scarborough, federal Finance Minister Jim Flaherty announced this morning.

“You have our money, let’s get this subway built,” Flaherty said.

And a special thank-you to all those Canadian taxpayers who will pay their share for never riding this subway in their lifetime. Viva Cubada!

#120 HDJ on 09.23.13 at 12:00 pm

“Of course most people will lose money. They are mistrustful and unschooled.” — Garth

Garth, You’re such an arrogant dick. You’d make a great politician.

How was that an arrogant statement? Besides, I sucked as a politician. Too polite. — Garth

#121 bigrider on 09.23.13 at 12:09 pm

#98 Garth to Bigrider- “…most people know bricks, willful ignorance of securities. This is why we have the 1%-99% split ”

I think you better take another look at that 1% in Canada Garth and then tell me how they became the 1%.

I will tell you how they did it, by licking and humping bricks. This is why the country is in this ” twilight zone” “mass hysteria” over RE. If it were not the case, then no such mania.

The fact that they are willfully ignorant ,or not, of financial securities markets does not change the immutability of that point.

Every uptick on the financial markets is a reason to sell, as is every down tick, regardless of the obvious long term outperformance of financial markets. Hence the continued, chronic ,under exposure to financial assets across the board.

Garth, you need to re examine this whole RE correction thesis of yours in the GTA. People here are in love with RE. The psychology unmovable. The ownership principle ingrained in the very souls of Torontonions ,more so than any religion.

#122 HDJ on 09.23.13 at 12:20 pm

“How was that an arrogant statement? Besides, I sucked as a politician. Too polite.” — Garth

Love your responses, really. And have enjoyed your energetic, mind-bending and occasionally arrogant blog for many years. Cheers.

#123 Bigrider on 09.23.13 at 12:21 pm

#101 nonno

The reason why the correction in RE may not occur is exactly because there are a lot of ” nonnos” in the GTA.

Not a good thing

#124 Tonino, Nonno Nicola's Grandson on 09.23.13 at 12:26 pm

#121 Big Rider

“Garth, you need to re examine this whole RE correction thesis of yours in the GTA. People here are in love with RE. The psychology unmovable. The ownership principle ingrained in the very souls of Torontonions ,more so than any religion.”

Now you sound like Nonno Nicola Big Rider! Glad to hear you have joined our side. Now get yourself over here for some homemade vino, pasta and the best tomato sauce this side of the Atlantic!

#125 NoWayMe on 09.23.13 at 12:27 pm

Well took your advice Garth on this recent pullback in REITS and dipped my toe in with 200 shares of HR.UN. Trying to build a well diversifed dividend portfolio. Also recently bought ENF (Enbridge income trust) as it too was beaten down. Slow and gradual …

#126 Evangeline on 09.23.13 at 12:30 pm

TD-W today: ” … attractive fundamentals … in the Alt-A mortgage market…”

What is the “Alt-A” mortgage market?

#127 Evangeline on 09.23.13 at 12:38 pm

#120 Garth: “How was that an arrogant statement? Besides, I sucked as a politician. Too polite.”

I always thought “too honest” was the problem.

#128 Itiswhatitis on 09.23.13 at 12:46 pm

Doomers think a 15% correction is going to occur.

Realtors think 15% rise in prices.

The truth is stable prices overall going forward. Detached prices will rise while condos fall.

Detached Housing is in it for the long haul. Hope you’ve got a seat!

#129 Calgary Rip Off on 09.23.13 at 12:47 pm

“Hope you caught that piece of a comment here yesterday – angst from a Gen Xer, pissed at me for dissing the notion of young house lust. The logic is classic: (a) If I have to pay rent to live, I might as well pay more and ‘own,’ (b) it doesn’t matter if houses are overvalued because I want one and will live in it forever, besides (c) it’s different here, the economy’s hot and prices will always go up.”

Angry at posting a differing opinion than mine? Never. I agree that housing is not a good investment. Look at facts: No rental controls in Alberta. Landlord can raise rent to whatever. If you have a solid job why would anyone risk waiting to see if housing goes up along with interest rates? Yes there was a crash in Calgary in the 1980’s. Yes it could happen again. Is reactive thinking the way to go?

This has zero to do with “housing lust”. Again, lust has to do with parts of the female anatomy, not with housing. A house is a place to live. You may own it. You may not. And when you are dead it wont matter if you owned it or not, the goal is some degree of comfort in this temporary existence because time goes fast.

Instead of presenting an argument as to why not to buy why not look at both sides from opposing views and let the reader decide which is correct so they have all the facts? This is what a good financial advisor for whatever does, and you are not doing that. You are simply saying dont buy dont buy, and chances are you own a place. Am I right? Or do you only rent?

Disagreement on parts of your readers does not imply anger for voicing a different opinion, just disagreement. It is not a personal attack, it is a viewpoint of looking at facts. As much as Calgary is $200K above real worth in both rental values and mortgages, saying this doesnt make the old prices come back. Chances are if they do have a drastic reduction like the 1980’s the majority of people in Calgary would leave, no jobs. So logically speaking it is best to buy a place if :1)Job is likely long term and unionized, 2)Retirement(if ever) is 30 years away, 3)You dont plan on moving for 10 years, 4)When interest rates go up you will qualify for renewal even if values drop slightly. What is the logic of renting and paying a landlord if the criteria for 1-4 are met?

From a goal perspective for any goal it is important to keep trying and keep at it. This goes for investing too. If a person makes a mistake it is bad advice to just not do anything and wait. Did Donald Trump wait or did he make mistakes, go bankrupt, and then build it back up?

So buy, Donald. We’re rooting for you. — Garth

#130 housedoc on 09.23.13 at 12:48 pm

Re:119 Canadian Watchdog on 09.23.13 at 11:58 am

“You have our money, let’s get this subway built,” Flaherty said.
___________________________________________
Our money?
Didn’t the province just commit to the same two subway stops to nowhere?
The plan simply turns two LRT stops into subway and does not connect to the Sheppard line.
At the cost of what?

#131 Herb on 09.23.13 at 12:49 pm

#119 Canadian Watchdog,

what’s your problem? $600 M for Toronto Centre is cheap, especially if this government won’t be around to pay it.

#132 Itiswhatitis on 09.23.13 at 12:52 pm

#109 JohnyD:

Good-bye. Where you going?

Oh, btw You need Millions$$ to immigrate to other parts of the first world. Not that easy.

#133 Young & Foolish on 09.23.13 at 12:58 pm

“People here are in love with RE. The psychology unmovable. The ownership principle ingrained in the very souls of Torontonions ,more so than any religion.”

Scary, because it’s sort of true! Good thinking, Homer!

#134 Patiently Waiting on 09.23.13 at 12:59 pm

Saw this posted on BNN this morning …

Toronto new condo sales worst August showing in a decade

Tara Perkins, The Globe and Mail
12:34 PM, E.T. | September 23, 2013

The number of new condos that sold in the Greater Toronto Area during the month of August dropped to 633, the lowest level for that month in a decade, according to RealNet Canada Inc.

The figure is 18 percent lower than the 772 sales that occurred in August of 2012. There were 1,923 sales in August of 2011.

Toronto’s condo market has been a significant source of concern for policy makers in Ottawa in recent years, including at the Finance Department and Bank of Canada. Finance Minister Jim Flaherty expressed concern in 2012 that he felt too many new units were being built, a phenomenon that could ultimately lead to a crash. The Bank of Canada has said that such a crash could pose a threat to the country’s broader economy. Real estate agents say the warnings have been having an impact on the market, by causing some buyers to think twice about getting in.

Flaherty has also taken a number of steps to cool the market, most notably tightening the mortgage insurance rules 14 months ago. One of the changes he made was to cut the maximum length of an insured mortgage to 25 years from 30, a move that took a number of first-time buyers out of the market.

The total number of new homes, both low-rise and high-rise, that have sold in the Toronto area so far this year stands at 16,775, the lowest year-to-date total of the last 10 years, RealNet said Monday.

There were 777 sales of new low-rise houses during August. While that is up 32 percent from 588 one year earlier, it is 43 percent below the 10-year average for the month.

While a growing number of tall condo towers are dotting the city’s skyline, the amount of land that’s available for the construction of new low-rise homes is constrained because of government policies aimed at curbing urban sprawl and maintaining green space.

“Constrained land supply has severely diminished inventory in the low-rise sector, bringing prices to a considerable increase,” stated Brian Tuckey, the CEO of BILD, which represents developers.

The price gap between new high-rise and low-rise homes has widened to a record level of $222,149. RealNet’s low-rise price index rose 8.1 percent over the past year to a record high of $658,938, while the high-rise price index eked out a mere 0.1 percent gain to $436,789.

The gap between the price of new high-rise and low-rise homes averaged about $75,000 between 2004 and 2011, but has been growing at a fast clip during the last two years.

The unsold inventory of new low-rise homes now stands at 7,247, RealNet said, while there are 21,028 new unsold high-rise homes.

August marked the fourth straight decline in high-rise inventory, as developers have been bringing fewer new units to market of late. But economists say that the number of new condo buildings going up is set to rise in 2014.

pw

#135 Smoking Man on 09.23.13 at 1:12 pm

#106 Fed-up on 09.23.13 at 10:10 [email protected]#76 Smoking Man on 09.22.13 at 11:14 pm————————————————————————————-Maybe you should have read the rest of my post. No innovation, no manufacturing and no refining equals no skills and a false service only based economy. I was also referring to our whole country and not just Ontario. And the best people in the world you say???You need to get out more.

………….

I was just messing with you.
I get out a lot, Canadian business have relied on a week dollar and slave wages, every single company we approach with our productivity solution, always asks are there tax credits or grants. Spoiled huge.

Just like property virgins they suck at math, ROI is month or two. Everyone should buy it.

Kill ratio for a qualified prospect1 in 10 that sucks.

#136 Ralph Cramdown on 09.23.13 at 1:15 pm

#84 Ford Prefect — “But the developer, Ron Aitkens, tried to proceed – he even tried to get the City of Courtenay to take in the piece although it was miles from current city boundaries. What a farce. It never had a chance of succeeding. I think that Aitkens did not have a clue as to what he was doing”

Normally I believe in “never ascribe to malice what can be attributed to ignorance” but I make an exception when it comes to property developers who pitch small, amateur investors. If you’ve got a sensible business plan, it’s a lot cheaper and easier to pitch a smaller number of larger, more sophisticated investors than to buy lots of radio or TV advertising to find hayseeds with $25k each.

As well, the serious developers have plenty of their own money in the project. The crooks buy the land themselves or through straw buyers, then sell it to the partnership at a big markup, and their profit is made before an architect is even hired.

#137 Canadian Watchdog on 09.23.13 at 1:32 pm

#125 Patiently Waiting

I'm not sure how TO's new condo market isn't already considered a crash when high rise sales just posted its 16th consecutive year-on-year decline. Chart There's some other force at work here or something happening behind the scenes that the public is not hearing about. Developers can't last too long without cash flow.

#131 Herb

The fact that Toronto can't find a way to fund its own transit lines tells you everything you need to know about the state of the city and its management. There's so much curruption and looting right now it's not funny.

BREAKING: BBRY enters into Letter of Intent with consortium led by Fairfax Financial, $9/share in cash

#138 Ralph Cramdown on 09.23.13 at 1:33 pm

#126 Evangeline — What is the “Alt-A” mortgage market?

An ‘A’ mortgage is one you can get from* one of the big banks, i.e. prime. Alt-A is below that, but supposedly above ‘B’. They’re both subprime, but it’s a matter of degree.

http://www.calculatedriskblog.com/2008/08/reflections-on-alt.html

* – ‘from,’ not ‘through.’ Some bank mortgage specialists will happily pass your stinky-ass mortgage application on to Schlomo’s Bruised Credit Specialty Lending, for which the bank collects a finder’s fee.

#139 Spiltbongwater on 09.23.13 at 1:46 pm

My folks listed their Coquitlam house last week. Had open houses on Sat/Sun. Had 7 offers yesterday, 3 with no subjects, sold above asking price.

Smart folks. What was the asking price? — Garth

#140 Doberman on 09.23.13 at 1:47 pm

Gartho not every RE market in the world collapses or has a serious correction. Look at Germany, just keeps going up over time, slow and steady. Most are now priced out of houses forever, and settle for a condo/apartment which is barely affordable and can only rent until they die. Maybe Canada will be the same??
Just thinking outloud here.

The home ownership rate in Germany is 42%. Here it is 70%. You have no point, Dobermano. — Garth

#141 T.O. Bubble Boy on 09.23.13 at 1:47 pm

Alberta floods costliest natural disaster in Canadian history
http://www.cbc.ca/news/canada/calgary/alberta-floods-costliest-natural-disaster-in-canadian-history-1.1864599

Insurance Bureau of Canada report says staggering $1.7B cost is still rising

Hmmm…. I guess Flaherty isn’t considered a natural disaster? He costs us a few billion every month!

#142 Donald Trump on 09.23.13 at 1:51 pm

From a goal perspective for any goal it is important to keep trying and keep at it. This goes for investing too. If a person makes a mistake it is bad advice to just not do anything and wait. Did Donald Trump wait or did he make mistakes, go bankrupt, and then build it back up?

So buy, Donald. We’re rooting for you. — Garth

===================================
ROTFLMAO

Actually, let you in on a secret.

It’s over…. the real money has been made.

The rest is RED pill or BLUE pill

http://www.youtube.com/watch?v=3Mu_8w6db5M

The real world has been supplanted by relativity.

Wanna get rich?
You have to join the neo-con…the top 1%.

#143 bigrider on 09.23.13 at 2:06 pm

#124 Nonno to bigrider.

Nonno, I am afraid you mistake my questioning of the inevitability of RE correction ,or not ,as enthusiasm for the avoidance of one.

Higher and higher prices for shelter is not a good thing, anymore than it is for food and clothing, other basic necessities.

I’m sure your sauce is good, but your thought process with regard to above , maybe not so much.

#144 omg on 09.23.13 at 2:20 pm

#90 Patrick Winterton

Since 1929 (before crash) the Dow has returned 8.8% including dividend yield – that’s not adjusted for inflation. (from “Stocks for the Long-run” – an excellent book).

Since 1987 the return was 10.6%, again not adjusted for inflation.

Equities beat the crap out of bonds over the long-term but can have huge volatility – like down 50% in 2009, not to mention down 20-25% a few other times in the last 25 years.

So unless you got conjones of steel you wouldn’t hold just equities in your portfolio.

Here’s is an interesting point – since the late 1990s equities have lagged their long-run performance significantly. The question is – are we going to see catch-up over the next decade, or was the market so over valued in late 1990s that we have just returned to normal valuations?

#145 Holy Crap Wheres the Tylenol on 09.23.13 at 2:24 pm

#137 Canadian Watchdog on 09.23.13 at 1:32 pm

BREAKING: BBRY enters into Letter of Intent with consortium led by Fairfax Financial, $9/share in cash
______________________________________________

Not Breaking news anymore as Jesus once said ” It is Done”

http://money.msn.com/business-news/article.aspx?feed=AP&date=20130923&id=16926743

#146 :):( Ying Yang on 09.23.13 at 2:36 pm

#135 Smoking Man on 09.23.13 at 1:12 pm
#106 Fed-up on 09.23.13 at 10:10 [email protected]#76 Smoking Man on 09.22.13 at 11:14 pm————————————————————————————-Maybe you should have read the rest of my post. No innovation, no manufacturing and no refining equals no skills and a false service only based economy. I was also referring to our whole country and not just Ontario. And the best people in the world you say???You need to get out more.

………….

I was just messing with you.
I get out a lot, Canadian business have relied on a week dollar and slave wages, every single company we approach with our productivity solution, always asks are there tax credits or grants. Spoiled huge.
Just like property virgins they suck at math, ROI is month or two. Everyone should buy it.
Kill ratio for a qualified prospect1 in 10 that sucks.

………………………………………………………………………

Smoking Man missed you at the Seneca Casino a few weeks ago to trade secrets of investing. You were in Vegas? My brother in Hong Kong asked me if your productivity program is that good, then you should be out there pushing it instead of being a coder working for the man. Better to push your own success story instead of being someone else s bitch! He said quit your day job and show the world your productivity software. You will be the Smoking Millionaire.
P.S. He said what is it called?

#147 IMHO investing in Financial assets is not for everybody - on 09.23.13 at 2:47 pm

Earth to TEMPLE…do you read me ? do you read me?


Do you see any problem at all with formulating your (totally wrong) opinion based on intuition? And with jumping to a conclusion about an industry based on a book you don’t want to read because you feel like you already know what the book will tell you? I wish I could digest information so quickly. I’d go to the library, briefly fondle every book there, and emerge an opinionated genius.

I do not need to learn how a car is built when I take a drive test and I see that the car is malfunctioning.
If I want to make money I might need to learn about how the cars are built and to see how I can fix it and resell it. Only then I can decide to buy it. The learning can take me a long time. That and the fact that I don;t know if in the end I will make any profit will make me turn around

However none of you addressed the message of my post, you are just riding side arguments.

The idea was that for real and solid profits you need:
1) either to know the players and the game and bet on short term
2) or to invest on long term but you really need to know what you invested in.

Both of the above are beyond the skills of the average Joe. The above points that you tried to undermine are just details.

Most of the investors are just riding the market but it so happens that some of the riders are smashed on the walls. Small fish does not survive the impact.

EARTH

#148 Form Man on 09.23.13 at 2:56 pm

# 123 Bigrider

http://www.theglobeandmail.com/report-on-business/economy/housing/toronto-new-condo-sales-see-worst-august-showing-in-a-decade/article14464065/

the market cannot keep going up when supply is being created faster than demand. New condos are the first to go down, the rest will follow in due course……….

#149 Snake on 09.23.13 at 2:57 pm

Condo Sales In Toronto Hit 10-Year Low: Industry Group

http://www.huffingtonpost.ca/2013/09/23/condo-sales-toronto-10-year-low_n_3976075.html

A rare breed: Home buyer balks at a $500,000 mortgage

http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/a-rare-breed-the-debt-averse-house-hunter/article14264162/

#150 AgentSmith on 09.23.13 at 3:07 pm

Snakes in the grass like the former Starbucks employee mentioned in this blog – Haircut, Pamphlets, start up money from Daddy (Contractor?)

Mix the above into a bowl of starving young Hipsters making $16/hr pushing Organic Beet Shoes and Falafel Breaded Reusable Loofahs and what do you get?
A guy probably making a pretty good living. Jelly? Yes and No.

Read between the lines people –
A closet on Younge Street or your Manager job at Whole Foods isn’t going to last forever.

Out of the Matrix comes this convo..somewhere in a coffee/artisan shop that used to be a wharehouse for dental dams
“oh my gawaawaad Richard..my Parents financial advisor set them up to liquidate or whatever its called..you know..make them find more money..ya..and they gave me enough to put on this condo…oh ma gawd..I can’t wait to fill it up with all the stuff I can get at Hipster emporium and rack up my credit card again so Daddy can pay it off”

#151 Peter on 09.23.13 at 3:15 pm

This house in Markham is listed in the beginning of June, price reduced by 50K, still no takers

http://www.realtor.ca/PropertyDetails.aspx?PropertyID=13460039&PidKey=60036081

#152 Devore on 09.23.13 at 3:27 pm

#136 Ralph Cramdown

Of course serious investors don’t invest into condos (ie apartments) because they do not see the value in it. That’s why pre-construction condos are targeted unsophisticated rubes who go for broke, and the hopes and dreams crowd, and that’s directly reflected in the type of marketing you see.

#153 Spiltbongwater on 09.23.13 at 3:35 pm

Smart folks. What was the asking price? — Garth

Asking price was $750,000. Insane valuations, but people are paying it, so money/debt is coming from somewhere. I make slightly over avg income and never would have considered paying that much for an avg house, but to each their own.

#154 Devore on 09.23.13 at 3:35 pm

#140 Doberman

Do you even have a clue what the eff you’re talking about? No, of course not. Doesn’t stop you from informing us of your opinion.

Here, look at these charts, and pull up Germany. For shits and giggles, compare it to Japan, itself in a 2 decade long real estate slide (ie soft landing).

Just thinking “outloud” here.

#155 Devore on 09.23.13 at 3:36 pm

And of course the crtl-v buffer is empty when I need it.

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices

#156 Doberman on 09.23.13 at 3:49 pm

#140 Doberman on 09.23.13 at 1:47 pm
Gartho not every RE market in the world collapses or has a serious correction. Look at Germany, just keeps going up over time, slow and steady. Most are now priced out of houses forever, and settle for a condo/apartment which is barely affordable and can only rent until they die. Maybe Canada will be the same??
Just thinking outloud here.

The home ownership rate in Germany is 42%. Here it is 70%. You have no point, Dobermano. — Garth
———————————————————-
Doesn’t matter what the home ownership rate is, point is houses are not correcting or collapsing, just hovering. Same can happen in Canada, that’s all I’m saying.

German houses cost a lot, so most Germans don’t buy them. Canadian houses cost a lot, but 70% of us buy them on credit. Guess where trouble looms? Think it through. — Garth

#157 Devore on 09.23.13 at 4:03 pm

And the award for worst analogy ever goes to…. (drum roll)

http://business.financialpost.com/2013/09/18/stephen-poloz-canada-close-to-tipping-point-for-business-investment/

Stephen Poloz, Bank of Canada governor, “Spaghetti”.

#158 Smoking Man on 09.23.13 at 4:20 pm

#146 :):( Ying Yang on 09.23.13 at 2:36 pm

None of your business what it’s called lol, your pal is to close to China clone shop.

As far as leaving the tax farm, I’m not quite done just yet, soon though this is for my son dude, so he can have the thrill of making or not likely but losing his millions. Been there done that.

Best ride next to the twins a man can have.

#159 Screwed on 09.23.13 at 4:21 pm

German houses cost a lot, so most Germans don’t buy them. Canadian houses cost a lot, but 70% of us buy them on credit. Guess where trouble looms? Think it through. — Garth

German banks were signing 15 yr mortgages @ 3% all day and night long this Spring/Summer. Their market has now peaked for a while. Multiple residential are some of the best investments there. High yield ROI based on typically solid renters in solid built multiplexes.

Let’s just say things in Canada are a whole lot more fluid and good tenants are rare. Can’t buy cheap, so stay out of it. Can’t afford to fix up when tenants show up with an army of lawyers and tenancy right advocates. I’d rather throw money down from one of the new glorious bridges crossing the Fraser…

Great places to live, not so great to either do business or invest.

#160 HDJ on 09.23.13 at 4:31 pm

“German houses cost a lot, so most Germans don’t buy them. Canadian houses cost a lot, but 70% of us buy them on credit. Guess where trouble looms? Think it through.” — Garth

But what % of the 70% purchased when prices were much less? And how many have relatively small mortgages remaining on their homes, or are now even mortgage free?

#161 espressobob on 09.23.13 at 4:32 pm

#125 NoWayMe

Buying individual stocks like Enbridge & H&R are well intended on your part, but theres much risk in this approach! Anything can happen when it comes to owning equities, including downside! Many long term BB lovers, Um, well you know.

An ETF like say ZDV already owns Enbridge along with 50 other stocks, more diversified. XRE holds H&R along with 14 other REITS! The idea is to mitigate risk through diversification. Single stocks are scary.

http://www.etfs.bmo.com/bmo-etfs/glance?fundId=86809

http://ca.ishares.com/product_info/fund/overview/XRE.htm

Good Luck.

#162 Jennifer Yu on 09.23.13 at 4:39 pm

Well said Garth, I definitely agree with you. Looking forward to reading more of your posts.

#163 BauBau on 09.23.13 at 4:46 pm

German houses cost a lot, so most Germans don’t buy them. Canadian houses cost a lot, but 70% of us buy them on credit. Guess where trouble looms? Think it through. — Garth
The statement is false in regards to Germany and their expensive houses.

Use the link posted by #155 to see that the price to income ratio for Germany is quite low actually!

The fact that Canada is overpriced and the same ratio quoted above is one of the highest on that chart is undeniable

Quite so. I forgot to mention most Germans are not house-horny delusional real estate porn addicts. — Garth

#164 jess on 09.23.13 at 4:48 pm

Monday, September 23, 2013
U.S. court: Barclays tax avoidance scheme a ‘reprehensible . . . waste of human potential
A comment from the U.S. Court of Federal Claims, on a giant tax avoidance scheme peddled by Barclays and several others, called STARS (“Structured Trust Advantaged Repackaged Securities”). Various entities were involved, but this was essentially a ploy by two banks – UK’s Barclays and BB+T bank in the U.S., with nearly three quarter of a billion dollars in play…”
http://taxjustice.blogspot.ca/

Monday, September 23, 2013

Court Rejects STARS Tax Shelter, Calls Conduct of Banks, KPMG & Sidley Austin ‘Reprehensible … Waste of Human Potential’
By Paul Caron
http://taxprof.typepad.com/taxprof_blog/2013/09/court-rejects-.html

Salem Financial, Inc. v. United States, No. 10-192T (Ct. Fed. Cl. Sept. 20, 2013):

#165 jess on 09.23.13 at 4:55 pm

Why POTUS Allowed Bailouts Without Indictments
janet tavakoli
..”Federal portfolio managers can claim they are making money on carry trades while the assets are declining in value due to defaults or permanent value destruction of collateral. This situation can continue for a long time to create the false appearance of profitability. In other words, U.S. taxpayers can be told they are making money, when in reality they are losing money.
http://www.tavakolistructuredfinance.com/2013/09/financial-crisis-fake-accounting/

#166 TEMPLE on 09.23.13 at 5:09 pm

#147 IMHO investing in Financial assets is not for everybody – on 09.23.13 at 2:47 pm

However none of you addressed the message of my post, you are just riding side arguments.

Well, to be fair, I addressed your “message” in my first sentence, i.e., that you are wrong about financial markets. And then I poked holes in the reasoning that you presented to back up your (not so humble) opinion. Specifically, that you figured you wouldn’t bother reading the CSC textbook because you figured it would confirm your incorrect opinion. There is a serious flaw in your logic here.

The idea was that for real and solid profits you need:
1) either to know the players and the game and bet on short term
2) or to invest on long term but you really need to know what you invested in.

Incorrect and unsubstantiated opinion. Why should anyone believe you when you have already established that your opinion on financial markets stems from ignorance?

Think about this for a second: you happen to be running your mouth on a blog full of “small fish” (including the host) who are able to do very well for themselves in financial assets. Could be a good time to ask questions and/or listen carefully, maybe?

TEMPLE

#167 IM in C on 09.23.13 at 5:19 pm

@129 Calgary ripoff
Yes it is true that we don’t have rent controls in Alberta, (well actually we do, just not as stringent as anywhere else). What that means is that here in Alberta rents can go also down . Case in point: I am presently paying $85/month less than what I was paying in 2008 for the same unit

#168 Doberman on 09.23.13 at 5:20 pm

.#154 Devore on 09.23.13 at 3:35 pm
#140 Doberman

Do you even have a clue what the eff you’re talking about? No, of course not. Doesn’t stop you from informing us of your opinion.

Here, look at these charts, and pull up Germany. For shits and giggles, compare it to Japan, itself in a 2 decade long real estate slide (ie soft landing).

Just thinking “outloud” here.
.#155 Devore on 09.23.13 at 3:36 pm
And of course the crtl-v buffer is empty when I need it.

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices
———————————————————
German houses cost a lot, so most Germans don’t buy them. Canadian houses cost a lot, but 70% of us buy them on credit. Guess where trouble looms? Think it through. — Garth
———————————————————-
I’ve seen that chart before and it indicates house are cheap in Germany, which is contradictory to Garth’s comment, but consisent with a source that says indeed homes are expensive in Germany.
So which one is it boys, what’s lying here?

Smart people would rather have a Porsche. — Garth

#169 Dale on 09.23.13 at 5:21 pm

Garth,

I am sure you know that realtors / brokers require a license to practice. They have a governing body. They have a code of ethics. Why don’t you simply fire off some of your observations to RECO and see what happens?

It’s not the individual we should worry about, but the system. — Garth

#170 Doberman on 09.23.13 at 5:38 pm

German houses cost a lot, so most Germans don’t buy them. Canadian houses cost a lot, but 70% of us buy them on credit. Guess where trouble looms? Think it through. — Garth
———————————————————
And just cause people buy with credit doesn’t mean the house of cards will be coming down, so long as payments are being made there is no problem, and this is why Canada has been bucking the trend.

You’re licked, kid. Go home. — Garth

#171 Devore on 09.23.13 at 5:39 pm

#163 BauBau

Use the link posted by #155 to see that the price to income ratio for Germany is quite low actually!

And that’s the whole point. Prices are relative. And in Germany, they’re fine, and economically sustainable, vs incomes and rents. Just because something is expensive, does not make it overpriced. It simply means you have no business buying it.

In Germany, home ownership is a long term goal and commitment for serious people with money necessary to properly finance and maintain them.

In Canada, it is a checklist item, somewhere between “Finally Legal: Get Wasted” and “Grow A Pair, Talk To Cute Girl @ Starbucks”.

#172 The Big M on 09.23.13 at 5:40 pm

I forgot to mention most Germans are not house-horny delusional real estate porn addicts. — Garth

Brilliant!

#173 Ralph Cramdown on 09.23.13 at 6:01 pm

Look Doberman, no offense but Dobermans are supposedly a fairly smart breed, so if you can’t use the internet to figure out whether German house prices are cheap or expensive relative to incomes, I suspect you’re a Bulldog trying to pass.

Moving on to the more advanced class, let’s examine this theory that German house prices are on a slow, even increase and that most Germans are priced out. Is this possible?

Rents come from current income. You can borrow to pay the rent, but not for long; sooner or later, you have to move to somewhere cheaper or add roommates to the equation.

If rents are to stay a constant share of incomes, then rents can only rise as fast as incomes do, unless everyone’s moving back in with the parents. Obviously rents can’t rise faster than incomes for long, especially if most renters are already stretched — and if they weren’t stretched, wouldn’t they buy?

Prices can only rise as fast as rents are rising, otherwise landlords would gradually be accepting a lower and lower rate of return. Usually, the prospect of lower returns drives some people out of investments and makes them less desirable for new investors… which puts downward pressure on prices.

Now one other way things could change is if Germany’s GINI index was rising rapidly, indicating a small class of wealthy rentiers who own everything and a large underclass of those who can’t afford anything. But it isn’t.

#174 jess on 09.23.13 at 6:03 pm

The Insurance Bureau of Canada says the June flood in southern Alberta is the costliest natural disaster in Canadian history.

The bureau says the latest estimate of the insured property damage now exceeds $1.7 billion.

Bill Adams, vice-president of IBC’s western and Pacific regions, says in a release that the number is staggering and is expected to rise.

http://www.theweathernetwork.com/news/articles/june-flooding-in-southern-alberta-the-costliest-natural-disaster-in-canadian-history-insurance-bureau-reports-/13264/

#175 Alberta Ed` on 09.23.13 at 6:09 pm

Any government worth its salt would bring in legislation to prevent such abuses by real estate professionals as Garth lists, as it does financial institutions.

#176 jess on 09.23.13 at 6:22 pm

Was money created to overcome barter?
By Reynold F. Nesiba
Professor of Economics
Augustana College – Sioux Falls, South Dakota

http://neweconomicperspectives.org/2013/09/money-created-overcome-barter.html#more-6453

#177 Jim Balsillie on 09.23.13 at 6:30 pm

Glad to be rid of that dog…suckers

Back to my life’s purpose of bringing aPro Hockey Team to the Bay of Fundy.

If that fails…bringing a real NHL team to Toronto.

#178 John on 09.23.13 at 6:50 pm

Garth, if you haven’t done so already you should take a gander at the main website for “The Condo Store”. They claim that if you are a flipper they will ALWAYS get you out at the assignment stage….and have generated returns between 50 to 700 per cent..it is obvious how they achieved this but I think the jig is up.

They are pretty cavalier about their “system”.

#179 Nemesis on 09.23.13 at 6:55 pm

Speaking of ‘Flippers’…

…”Today, the 77-year-old former vice president of marketing for Oral-B juggles two part-time jobs: one as a $10-an-hour food demonstrator at Sam’s Club, the other flipping burgers and serving drinks at a golf club grill for slightly more than minimum wage.”…

[BloomBerg] – At 77 He Prepares Burgers Earning in Week His Former Hourly Wage

http://bloomberg.com/news/2013-09-23/why-100-000-salary-may-yield-retirement-flipping-burgers.html

#180 More Cuts on 09.23.13 at 6:55 pm

Citigroup to cut 1,000 in mortgage division

http://www.marketwatch.com/story/citigroup-to-cut-1000-in-mortgage-division-2013-09-23-1791180

#181 Obvious Truth on 09.23.13 at 6:56 pm

It’s very hard to believe that there are people who don’t get that ultra low rates and loose lending have driven prices. I guess we shouldn’t be surprised because people don’t like to hear facts. Facts are fun wreckers.

Astounding that they talk with emotion about it. It’s just a place to live. at this point it’s clear that about 1-2% will cause an outright crash. No emotion. we are seeing it. Investing on the other hand has little emotion.

CBs will get inflation in the next year or so as they continue to pump. Draghi reaffirmed today that he is still part of the breakfast club. ” don’t you forget about me ”

Ray Dalio gave you insight on why we need more money supply. The trick is can you get the right balance. The answer will be no. They’ll err on the high side. But who cares because even Dobermans know to take a bite out of inflation.

All the so called real estate investors should position accordingly.

#182 Evangeline on 09.23.13 at 7:10 pm

#126 Ralph C.

Thanks for posting that interesting link. The blogger has no love for the Alt-A category.

“You’re probably still wondering what all this has to do with Alt-A. Alt-A is sort of a weird mirror-image of subprime lending. If subprime was traditionally about borrowers with good capacity and collateral but bad credit history, [he cites Donald Trump as an example], Alt-A was about borrowers with a good credit history but pretty iffy capacity and collateral. That is to say, while subprime makes some amount of sense, Alt-A never made any sense. It is a child of the bubble.”

Read more at http://www.calculatedriskblog.com/2008/08/reflections-on-alt.html#1AgsFqG1ccyhUAO8.99

#183 NoName on 09.23.13 at 7:34 pm

There is an reason why Germany is in a good shape, they tool economy to make hi quality and luxury products that targets wealthy consumer. But what happened in Germany in last 20-ish years is that lots of “foreign” labor aka yugo’s, polaks turks etc that retired went where ever came from, and ger. gov. other than sending regular check sent to them once a month have no other liabilities, gov. don’t have to provide services that are associated with older people.
Maybe iam wrong…

#184 Bau Bau on 09.23.13 at 7:52 pm

@TEMPLE

Obviously you have a problem with measuring the size of the fish in our tank.

Discrediting me so you could void my opinions is a cheap tactic.

We are wasting time here, you do not have to share my opinion, it is just one of the many. You will be rich I will be poor. But you will not be reach on my account :-)

Goob bye!

#185 eddy on 09.23.13 at 8:14 pm

Al said: looks like Germany kept the manufacturing though and they are doing ok.

Maybe that was part of a larger plan?

http://www.bloomberg.com/news/2013-01-27/nazi-goebbels-step-grandchildren-are-hidden-billionaires.html

#186 Aurora on 09.23.13 at 8:41 pm

#151 Peter

In what world is Aurora, Markham?

#187 Tony on 09.23.13 at 10:30 pm

Re: #177 Jim Balsillie on 09.23.13 at 6:30 pm

I remember Rogers paid 9 dollars a share for a company worth 1 dollar a share. In this case Fairfax paid about 9 dollars a share for a company worth about 3 dollars a share. These two will go down as one of the worse buyouts for the buyer in Canadian history.

#188 Tony on 09.23.13 at 10:34 pm

Re: #186 Aurora on 09.23.13 at 8:41 pm

This is a repost like he said from a while back. Aurora is slightly slightly northwest of Markham.

#189 Trust a Realtor? on 09.24.13 at 10:27 pm

#175 Alberta Ed said –

Any government worth its salt would bring in legislation to prevent such abuses by real estate professionals as Garth lists, as it does financial institutions.

—————-

Actually, they are licensed individuals that are expected to abide by a code of ethics that in part states “A REALTOR® ’s ethical obligations are based on moral integrity, competent service to clients and customers, and dedication to the interest and welfare of the public. The Code has been amended many times to reflect changes in the real estate marketplace, the needs of property owners and the perceptions and values of society. For more than forty years, through a variety of updates, the CREA Code of Ethics is unchanged in demanding high standards of professional conduct to protect the interests of clients and customers and safeguard the rights of consumers of real estate services.”
Taken from ” http://www.realtor.ca/StaticPage.aspx?f=RealtorCodeOfEthics

You can download “The Realtor Code” here –
http://crea.ca/sites/default/files/files/The_REALTOR_Code.pdf#view=FitV

Pay special attention to the sections about advertising.

These are doozies –
“12.2 A REALTOR® shall not provide an Opinion of Value if it is outside the REALTOR®’s field of expertise to do so unless this fact is disclosed in writing to the Client or assistance is obtained from another Person who has experience in this area.”

” 15. Advertising Claims Claims or offerings in Advertising must be accurate, clear and understandable.”

Kinda gives you a warm fuzzy feeling doesn’t it?